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By no means am I trying to imply that Beijing controls the government machinations of the Macau SAR. I’m actually stating it definitively. That is why I take note when Beijing summons the local Macau powers that be to the capital. I suspect there will be some more definitive action taken with regard to the visa situation. Leisure visits were recently pushed from once every month to once every two months. Effective September 1st, visa restrictions were tightened so that the circuitous route through Hong Kong to escape restrictions has effectively been closed. September gaming revenue looks like it could come in flat with last year vs. a 44% gain in August, so the visa situation is clearly making an impact.
  • What could happen at this meeting? I believe one of two scenarios. First, Beijing could maintain the visa status quo until the end of current Macau Chief Executive’s term next year. It’s no secret that Beijing is not happy with some of Edmund Ho’s public statements, especially regarding Beijing’s influence. A second plausible outcome could be a reversion to the previous visa environment; that is, back to the once a month visitation restriction and access for mainland Chinese arriving directly from Hong Kong.
  • Either of these scenarios takes a 6 month visa restriction off the table, which is big plus. You may recall, seemingly credible rumors of an even longer restriction contributed to a sharp sell-off in the Macau stocks. Investors now seem to anticipate either the current 2 month restriction continues in perpetuity or worse, so either scenario could be positive relative to expectations. On the margin, the probabilities are favorable for a near term spike in the Macau stocks. Las Vegas Sands, with 20% of the stock short, could have the most leveraged move higher.
Macau revenue growth is in Beijing's hands
Reversal of 9/1 visa restrictions would be a big positive