Macau Numbers

Visitor arrivals to Macau rose 11 percent year on year in October to 2.65 million, said the city’s Statistics and Census Service on Monday.

Those coming from mainland China increased by 20.5 percent year-on-year during the month.

That jump doesn’t seem to have been reflected in mass-market casino play. In October, mass-market gross gaming revenue (GGR) dropped about 8 percent year-on-year, according to unofficial industry returns quoted by investment analysts.

GGR market-wide in Macau dropped by 23 percent year-on-year in October according to data from the Gaming Inspection and Coordination Bureau. Analysts said that result was mainly due to a sharp fall in VIP chip roll.

In previous months, mass market gambling had been growing year-on-year even as VIP gambling was retreating in the face of China’s corruption crackdown.

The statistics service said October’s visitor numbers were supported by the National Day holiday and its accompanying ‘Golden Week’ period when many Chinese factories close and workers take an extended break. It said the Chung Yeung festival on October 2 was also a contributory factor to the strong visitor numbers.

The bureau added that 43 percent of the 1.82 million mainland visitors during the period were from neighbouring Guangdong province.

Mainland visitors travelling under the Individual Visit Scheme rose by 18 percent, to 798,110. Visitors from South Korea (45,119) and Japan (21,889) increased by 17 percent and 2 percent respectively, while those from Hong Kong (508,710) and Taiwan (79,057) decreased by 6 percent and 11 percent.

The numbers of long-haul visitors from the United States (15,449), Australia (9,112), Canada (6,656) and the United Kingdom (5,838) all registered year-on-year declines.

My Thoughts on China

Despite constant policy easing, I believe China’s growth will continue to slow. China is still heavily reliant on investment to boost growth and there are still many structural headwinds. These include:

– Property Market Correction
– Overcapacity in many sectors
– Over-leveraged Corporate Sector
– Policy Easing become less effective

Though Xi is trying hard for reform, there is still a long way to go. The NDRC approved on the 5th of November, seven new railways projects totaling RMB 200bn. This follows recent approvals in other investment projects. My thoughts are this investment will continue, along with further cuts in bank reserve requirements to maintain at least 7% GDP Growth.

Oil – $78.13 a Barrel

$78.13 a barrel… a 4 Year low…

What implications are there of this?

Massive tailwind for nations such as India and China. Fiscal Budgetary pressure for OPEC countries. Perhaps Japan can now focus on fundamental wage inflation growth, rather than imported inflation.

I would want to avoid oil companies (largely because I have limited knowledge in this area). Refining companies still good though.