Macau Q4 GGR to drop 15-20 percent, Morgan Stanley says

Morgan Stanley Research is forecasting Q4 gross gambling revenue in Macau to fall 15-20 percent year-on-year, with EBITDA expected to be down more than 10 percent.
The research report sees VIP volume falling by more than 15 percent in 2015, if the monthly rolling chip volume falls to MOP400 billion ($49.3 billion) but could recover to MOP500 billion after the opening of the Galaxy Phase 2 resort.
The analysts also noted that VIP gamblers check-in amounts had fallen sharply to an average of HK$3-5 million ($386,853 -$644,754) from HK$20-30 million prior to the downturn. The report said similar trends were evident in the mass market.
Other negative signs lay in the fact that junket liquidity was also under pressure after the ‘Huangshan’ disappearance with funds due in April, leading to the need to rebuild market confidence.
Credit conditions also remained tight generally. Customers face tight lending, slower velocity and extended payment cycles from customers. But casinos are refraining from extending credit despite strong balance sheets. Also noted was a slight pickup in bad debts at around 2.0 percent of overdue amounts, according to one junket.
Morgan Stanley suggests VIP numbers are not necessarily down but spending per person is lower and “smaller mid-sized junkets are facing a liquidity crunch,” the report noted.