Barclays lowers 2014 VIP forecasts to 0.5% in Macau gaming

Due to underwhelming trends.

Barclays has revised its VIP forecast for 2014, lowering it from 4.5 percent to 0.5 percent, due to recent trends that continued to track below its expectations.

According to a research note from Barclays, it now forecasts a 2% y/y decline in VIP revenue in 2H14 (from low single-digit percentage growth previously).

The report also noted that Barclays continues to expect a double-digit y/y decline in VIP revenue in July with the impact from the World Cup still in place.

In line with this, it now looks for a resumption to a flattish y/y VIP growth trend for the rest of the year, similar to the trends seen in April and May.

Here's more from Barclays:

We look for flattish y/y VIP growth for these reasons:
1) While we expect larger junkets toremain strong with liquidity, the trend of smaller junkets having more difficulty raising new funds could stay in place;

2) With more VIP tables allocated by operators to the mass segment, we believe it is difficult for VIP revenues to grow – this, together with the junket liquidity factor, are supply-related constraints;

3) the VIP base comparison from 2H13 is tougher than 1H; and 4) slower economic growth in China could continue to impact playing sentiment.

We also tweak our full-year mass table growth forecast to 31%, from 32%, due to the weaker-than-expected momentum we have seen in June, which we believe could have been partially impacted by the World Cup.

Including slots/electronic table games (ETGs), our overall mass revenue estimate for the full year is now 28% (29% previously).