Investors will likely be looking for bottom-fishing opportunities in 2016, but should continue to be patient, Macquarie Research says.
The temptation for investors comes from a combination of share price correction over the last two years, early signs of mass market GGR stabilization and the MSCI China index inclusion of ADRs, which has made it harder for China portfolio managers to outperform the benchmark.
However, Macquarie advises investors to be patient, wait for a better entry point, and to keep an eye on tactical trading opportunities.
“We believe the structural growth of Macau GGR won’t come back in the next two years and the multiples do not look appealing. However, we think there are tactical trading opportunities in CY16”, Macquarie Research says. “The key catalysts include: 1) company-specific events such as results and new casino openings, 2) key months GGR data releases (May and October), 3) policy changes related to the smoking ban, money laundering & visa policy, and 4) regional completion such as the openings of Shanghai Disneyland, Genting Malaysia Tower 2A remaining phases, Naga2 in Cambodia and Grand Mariana in Saipan.”