Disappointment for foreseeable future

2014/9/19

From：Macau Business Daily

Anyone hoping for good news and for the Macau gaming market to stabilise over the next few months will be disappointed, analysts warn. Revenue growth this year is likely to be flat.

Analysts are wary about what’s in store for the gaming industry here over the next “several months.” Sterne, Agee & Leach, Inc analyst David Bain said in his latest note to clients that “those hoping for good news [and] stability over the next several months will be disappointed.”
However, it’s not all bad news for investors in the long run. “Those investing with a longer-time horizon are presented with a foreword potential ‘look-back moment’, whereby one can look back a year from now having captured significant gains from current stock levels,” the note to clients reads.
The brokerage firm had lowered Macau’s gross gaming revenue outlook for the full year of 2014 to 0 percent from the previous 3 percent amid anticipations of a mid to high single-digit mass revenue growth for this month. In addition, Mr. Bain said, a high single-digit mass growth for the fourth quarter of the year is expected. “We expect VIP revenue growth to decline more than 20 percent for the remainder of the year.”
As other analysts have been saying for some months now, the primary reason for the lowering of mass revenue projections is Beijing’s crackdown on corruption, which is “bleeding into the mass market.” Chinese president Xi Jinping’s anti-graft campaign “is not just impacting VIP,” Bain said, “but premium mass as well, which is a sizable controlling piece of the overall market

Copyright@Macau Business Daily