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    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

TICKERS: LVS,RCL,CCL,NCLH,BYD

COMPANY NEWS  

OPAP - is extending an open invitation for the Expression of Interest (EoI) by interested parties regarding the concession of the right to install and operate 18.500 VLTs in Greece. The EoI process will run until 30 April 2015. The full EoI document plus other relevant information can be found at www.playopap.gr.

The EoI process will be followed with the issuance of an RFP in an open, international tender for the submittal of binding financial proposals by prospective concessionaires.  Participation in the EoI process will not be a prerequisite for participating in the tender process which will follow.

Takeaway: The 2nd round of Greece is an important growth opportunity for SGMS and GTECH and will be closely watched.

Genting Singapore - As stated in the March 9th and 11th Announcements, the share buy-backs referred to in the Announcements do not constitute the purchase, redemption or acquisition by the Company of its own shares under the Isle of Man Companies Act 2006 until the name of the Company has been registered in its Isle of Man register of members in respect of those shares. The Company wishes to inform that the name of the Company has been registered in its Isle of Man register of members in respect of 11,989,400 shares which are the subject of the share buy-backs referred to in the Announcements, and such shares have been cancelled on 1 April 2015.

Takeaway:  Those shares represented only 1% of outstanding shares.

Genting HK-  Genting Hong Kong is seeking shareholder approval for a new mandate to dispose of NCLH shares at the company's discretion. This gives it the flexibility to sell shares at appropriate occasions, without having to get approval for each transaction.

Genting HK's 2014 mandate for selling up to just under 56.82m NCLH shares is expiring on April 25 and, as expected, a new 12-month mandate has been proposed.  Under the 2014 mandate, Genting HK has sold 6.25m NCLH shares to date.

In a filing Tuesday, Genting HK said the future disposal may constitute a major transaction or a 'very substantial disposal.' 

ARTICLE HERE

LVS - Sands Bethlehem wants to expand its gaming floor with the addition of a multimillion dollar live dealer electronic table game stadium. Sands officials made an informational presentation for the Pennsylvania Gaming Control Board on Tuesday. Sands has yet to apply to the board to add the gaming stadium.

If approved, the 150 betting terminal, live dealer electronic gaming stadium would be the first in a Pennsylvania casino. It would feature four to eight live dealers.

ARTICLE HERE 

AirBnB - starting today Airbnb will allow Americans to book accommodations in Cuba.  More than 1,000 properties are currently available across the island with 40% in Havana. Airbnb believes Cuba could become one of its largest markets in Latin America. 

ARTICLE HERE

RCL - Bernard Aronson, a director of Royal Caribbean Cruises Ltd. since 1993, has decided not to stand for re-election at the company's upcoming Annual Shareholders Meeting in May, citing the time commitments required of his new responsibilities.  In February 2015, Aronson was named by President Obama as U.S. Special Envoy to the Colombian Peace Process.

CCL - Following its inaugural Europe season in 2016, Holland America Line’s new Koningsdam will homeport at Port Everglades in Fort Lauderdale, Fla.

The ship will sail a series of Caribbean voyages and one cruise to the Bahamas from November 2016 through March 2017. Itineraries range from one four-day cruise to seven days and 10 and 11 days.

NCLH - is testing an enhanced room service menu on Breakaway-class ships that incurs a convenience charge of up to $7.95 per order. Room service orders by Haven and suite passengers will not be charged the convenience fee.  

No comment yet on whether this charge will roll out to the rest of the fleet.

The new room service fee comes shortly after the cruise line instated an automatic 18% gratuity on all specialty and entertainment dining.

ARTICLE HERE

Takeaway: Sure these changes would benefit onboard yields but why would potential cruisers want the higher costs by sailing NCL?

BYD - The Borgata casino has confirmed it will file an appeal of its property tax assessment for this year by Wednesday’s deadline, the Philadelphia Inquirer reported. Last year, the Borgata won $88.25 million in a settlement with AC over its appeal of 2014 property taxes.

INDUSTRY NEWS

March GGR shares - March GGR shares: SJM (23.2%), Sands China (21.4%), Galaxy (20.0%), MPEL (14%), Wynn Macau (11.2%), MGM China (10.2%).

ARTICLE HERE

Takeaway: Wynn had the most improvement month-over-month while LVS took the biggest hit. New junkets at Wynn finally making an impact.

Online bust - Mainland China police have apprehended 1,071 people allegedly involved in a large online gambling network, said Xinhua. The agency described it as the largest ever enforcement action against an illegal operation trading in bets on the results of China’s legal state lotteries – the welfare lottery and the sports lottery.

ARTICLE HERE

Gaming taxes - The government has reduced its estimate of revenue from gaming tax this year by 27.3% to MOP84 billion (about US$10.5 billion) in view of the downturn in the casino market, Secretary of the Economy and Finance Lionel Leong Vai Tac has said.

Leong told the Legislative Assembly that this means he now expects revenue from all sources of MOP119.9 billion, 22.4% less than before. The government now forecasts that gross gaming revenue will average MOP20 billion per month this year, having previously forecast an average of MOP 27.5 billion.

ARTICLE HERE 

Takeaway: Leong's forecast would imply a 31% YoY decline, below our estimate of 25%.

Package tours hotel stats (Feb 2015) - Attributable to the Lunar New Year holidays, visitors on package tours increased by 13.2% YoY to 983,000. Package tour visitors from Mainland China increased by 21.5% YoY.

A total of 756,000 guests checked into hotels and guesthouses, down by 9.9% YoY. Guests from Mainland China (512,000) and Hong Kong (87,000) decreased by 6.4% and 16.2%. In the first two months, hotel guests totaled 1,559,000, down by 8.9% YoY; the average occupancy rate stood at 79.8%, a decrease of 6.1% points.

ARTICLE HERE

MACRO

Hedgeye Macro Team remains negative Europe, their bottom-up, qualitative analysis (Growth/Inflation/Policy framework) indicates that the Eurozone is setting up to enter the ugly Quad4 in Q4 (equating to growth decelerates and inflation decelerates) = Europe Slowing.

Takeaway:  European pricing has been a tailwind for CCL and RCL but a negative pivot here looks increasingly likely in 2015.