3 January 2018
HY Corporate Credit
HY Multi Sector.Media. Cable & Satellite
Economic Outlook. Our assessment of the Macau gaming market couldn't be
complete without reviewing the prospects of the Chinese economy. We
currently anticipate that China's economic growth will slow in 2018 as the
government implements actions to slow its credit expansion. We based our
view on commentary from China's deputy head of the Research Office of the
State Council, who stated that GDP growth at 6.3% in 2018-2020 would be
sufficient to achieve the Party's 2020 growth target. We also note that recent
economic data suggest the economic cycle has indeed cooled down. We note
that in O3'17 fixed asset investment (FAI) growth turned negative in real terms
for the first time since O4104. Further, growth of property sales for the nation
turned negative in October (first time since 2015). Lastly, we note that the
property market boom in Tier 3 cities seems to be losing momentum as well.
We believe that the slowdown of China's credit expansion is a positive
message for the long term. In our view, GDP growth at 6.3% in 2018.2020
should support a healthy expansion of the Macau gaming market.
Deutsche Bank Securities Inc. Page 77
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