Mid–tier Macau to see a resurgence of the market share in the VIP gaming segment, according to brokerage firm JP Morgan Securities (Asia) Ltd. Latest government data shows that there is a 16 percent year-on-year increase in Macau casinos ‘ gross gaming revenues (GYR) in April, where many industry analysts attributed to a jump in the VIP gambling.
the Analysts of JP Morgan emphasizes in a note on the recent trend of the mid-sized junket outfits obtaining a higher share of the market than the big three that – Suncity Group, Chun Branch of the Group and Guangdong Group.
It should be noted that this is a shift of the consolidation that was observed in the junket industry during the recent crisis in the Macau casino industry.
According to the analysts, the growth was mainly due to that can boost their capital levels after a strong showing during the Chinese New Year, and also because of the new gaming rooms will be opened in the last few months. Analysts DS Kim and Sean Zhuang, however, warned that there was an increased credit risk, because the smaller junket was looser credit policy than the larger companies.
the Analysts at another brokerage firm Sanford C. Bernstein Ltd expect the VIP segment to decline in the second half of the year, and that increases the risk of bad debts. In a statement, Vitaly Umansky, Zhen Gong and Yang Xie analysts at Sanford C. Bernstein said:
VIP-GYR during the month was much stronger than we had expected. However, in the longer term, we remain skeptical of a long sustained double-digit growth environment for VIP. We see VIP slowing down in the second half (and perhaps turn negative in the fourth quarter).
Christopher Jones of Buckingham Research Group Inc. expected VIP gaming growth to continue in the short term. He noted that the operators responded stronger VIP gaming performance with an increased capacity for high rollers. He has predicted Can casino GYR to jump 13 percent to 15 percent year-on-year.
An analyst at Wells Fargo Securities LLC Cameron McKnight has cited China’s current monetary stimulus program and the return of the housing bubble as the reasons for the improvement in the VIP-performance. He added that he does not expect these factors to support.
The company anticipates May casino GYR by 14 percent to 18 percent on a year-on-year basis.
Grant Govertsen of the Union Gaming Securities Asia Ltd. noted that the Macau GYR growth was better than expected for the third consecutive month in April.