A few days ago, investment analyst Cameron McKnight of New York-based Wells Fargo Securities LLC released a note suggesting that Galaxy Macau Phase 2A’s launch might be postponed to May 2015. Previously, it was announced that the gaming operator will complete its expansion in March and it will be available to visitors.
Mr. McKnight stated that the delay could be attributed to the corruption scandal in mainland China as well as to the fact that Macau’s economy is not particularly stable at present. As it was previously announced, the administrative region has been reporting a decrease in gambling revenue for several months now and this downtrend is expected to last for at least six more months.
According to another suggestion, the project’s developer Galaxy Entertainment Group Ltd. is planning to announce two opening dates – one for the general public and the other for the investors that might show interest in patronizing the enterprise.
Yesterday, Michael Mecca, president and COO of Galaxy Entertainment, stated that all these suggestions are far from being true. Mr. Mecca pointed out that his company has always met its deadlines and has never exceeded its projects’ budgets.
There are several factors that influence Macau’s current economic situation. In the first place, a massive anti-corruption operation is taking place in China. What is more, new regulations on the money transfer from the region to the mainland have been introduced. Last but not least, President Xi Jinping clearly stated that he expects the city to take due measures concerning the monitoring of its gambling industry.
According to Mr. McKnight, both the political and economic environment in Macau is “not healthy” enough to sustain the launch of new casino and hotel venues at this point. Yet, he shared his hopes that the opening of Galaxy Macau Phase 2A will prove to be beneficial to the local gambling market and bring to an end the current downward trend in revenue.
Mr. Mecca stated Galaxy Entertainment shares President Xi Jinping’s opinion that Macau needs diversity. The company’s COO also pointed out that he and his colleagues believe in the city’s bright future.
Back in May, it was reported that local and international investment communities suggested that Galaxy Macau Phase 2 might be launched during the Chinese New Year festivities. At that time, analyst Kenneth Fong of Credit Suisse AG commented that the construction was on track and the casino facility, part of the project, would be ready by June 2015. As for the hotel venue and the shopping center, he said that they were to be opened in the first months of 2015.
On August 19, however, Galaxy Entertainment announced that its HK$19.6 billion expansion project was on schedule and all its facilities would be launched towards the middle of 2015.
