NFOs reopen 1.5 months earlier than expected, outlets to reopen gradually

KUCHING: Number forecast operator (NFO) outlets reopened 1.5 months earlier than analysts expected, after the Ministry of Finance allowed all NFO outlets across Malaysia to reopen starting from September 14.

However, as the re-openings are subject to approval from local councils, the research arm of Maybank Investment Bank Bhd (Maybank IB Research) did not expect all circa 1,700 NFO outlets to reopen on September 14.

“Instead, we expect them to reopen gradually,” Maybank IB Research said.

“To recap, Berjaya Sports Toto Bhd’s (Berjaya Sports Toto) Sports Toto Malaysia has 676 NFO outlets, Magnum Bhd (Magnum) has 485, Pan Malaysian Pool’s Da Ma Cai has 341 and the Sabah and Sarawak state NFOs have circa 160 outlets between them. “Needless to say, this is positive for the NFO industry. We had expected NFO outlets to reopen only in November 2021 after Malaysia reaches herd immunity in end-October 2021.”

The research arm also liked the fact that NFO outlets will be allowed to reopen more or less simultaneously.

“Channel checks inform us that betting with illegal NFOs surged from mid January to mid February 2021 when most NFO outlets were shut but legal NFOs were still holding draws, which illegal NFOs mirror, to cater to NFO outlets in Sarawak.”

Looking ahead, Maybank IB Research said: “In any case, this positive earnings upside is unlikely to be repeated next financial year onwards as we already assume that all NFO outlets will operate on full year basis going forward.

“The more positive takeaway is that Berjaya Sports Toto and Magnum will be more comfortable resuming paying dividends.”