Jul 31, 2020 Newsdesk Latest News, Macau, Top of the deck 

Investors are now understanding the return of meaningful tourism volume in the Macau market is likely to involve small steps every two weeks on the part of the Chinese authorities in terms of relaxation of mainlandtravel policy relative to Macau said a Thursday memo from JefferiesHong Kong Ltd.

Possible clues had been provided by a phase of easing that beganon July 15, via a relaxation of quarantine conditions for travel from Macau to nine cities in the neighbouring Chinese mainland province of Guangdong, which was then extended to the whole of the provincea fortnight later.

The Macau recovery remains dependent on IVS [Individual Visit Scheme], but we expect this to be a gradual and phased reissuance on an individual Chinese city-by-city within each province, said Hong Kong-based analyst Andrew Lee.

He added thatGuangdongis key,given theprovince accounted for46percentand 55percent respectivelyof 2019 andfirst-half 2020mainlandChinese visitors to Macau, with73 percent and 69 percent respectively,of2019 and first-half 2020Guangdongvisitors using IVS.

Hubert Wang, president and chief operating officer of Macau casino operator MGM China Holdings Ltd, said on the second-quarter earnings call of the parent MGM Resorts International on Thursday, he thoughtIVS resumption couldcomein mid-September or even a little bit earlier, possiblystarting with Guangdong province.

The executive added that a return from July 15 of non-tourism exit visas from Guangdong to Macau including for business travel which had been retrospectively reported on Thursday, would be helpful to our business.

Nonetheless, such travellers will still need to provide a timely test certificate showing freedom from Covid-19 infection.

Mr Wangs boss, MGM Resorts chairman Bill Hornbuckle, said on the groups earnings call that recent moves including the easing of quarantine conditions for travel from Macau to Guangdong wereinitial steps in an encouraging direction.

But he noted: Hong Kong borders remain shut and the IVS and tour visa programmes have not yet restarted, which we believe is necessary for a meaningful recovery.

The resumption of the IVS scheme has been widely touted as a key element in a rebound in Macau casino gross gaming revenue, which was down 77.4 percent year-on-year to June 30, according to Macau government data.

IVS travellers accounted for 46.8 percent of the aggregate mainland visitor arrivals to Macau in 2019, and possibly a higher proportion of gaming revenues at the citys casinos for that period, wrote JP Morgan Securities (Asia Pacific) Ltd in a January memo at the time the IVS programme was suspended.

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GGRAsia Small steps fortnightly key to Macau rebound: Jefferies - GGRAsia