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Fitch: Macau gambling market headed for a comeback

9 December 2015

(PRESS RELEASE) -- Macau's gaming revenues will post a full-year 2015 decline of approximately 34-35%, but moderate in 2016 with revenue declines of approximately 5%, according to Fitch Ratings' 2016 Outlook.

China's investment-led economic slowdown should not have a significant impact, with fundamentals indicating consumer spending growth will remain intact.

Fitch's 2016 Rating and Sector Outlooks for Macau remain Stable, unchanged from last year.

"Investors in Macau's gaming sector are playing the long game," says Alex Bumazhny, Director of Gaming, Lodging and Leisure. "As Macau's gaming revenues begin to stabilize next year, we're starting to see its long-term potential on the horizon."

Fitch believes the Asia-Pacific gaming market overall remains underpenetrated, and delayed infrastructure projects, once completed, will make Macau more accessible to the mass market. New projects in the Cotai area of Macau could underperform initially but should show more acceptable returns in two to three years.

Fitch believes Macau's gaming growth prospects will remain dependent on travel policies and infrastructure, available credit for the VIP segment, perceptions about the mainland's corruption crackdown, and domestic policies like the smoking ban.

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