Research houses are going into the New Year bullish on Macau and casino stocks after a record breaking year in 2013. Macau posted an 18.6 percent gain in gross gaming revenue last year to $45.2 billion. On the back of the strong 2013 performance, U.S. bank Morgan Stanley has upped its forecasts for GGR this year to 18 percent from 13 percent. It expects casinos in the enclave to take in $53 billion, with mass-market revenue likely to gain 28 percent and VIPs lagging at 13 percent.
Citi Research called 2014 a “watershed year” for Macau and U.S. gaming stocks because of restricted supply and excess demand. It raised its ratings on Wynn and MGM Resorts International to Buy from Neutral. The bank is among the most optimistic predicting an increase in GGR of 20 percent, with VIP growth up 13 percent and mass market surging 35 percent. Union Gaming is predicting a slight more stately gain of 14 percent for the market this year, while Credit Suisse pegs growth at 13 percent. CLSA said in its Global Themes 2014 report that there are five factors leading the company to retain its bullish stance: higher minimum bets, unlocking of positive synergies, overseas expansion, redevelopment of existing casinos and further valuation re-rating. Its top picks are Melco Crown, Wynn Macau, MGM China and Louis XIII.