Possible stabilization encourages gaming analysts, stock prices

Gaming analysts have been reviewing the casino sector’s prospects after strong results were recorded for the first two months of 2016. Gaming stocks are starting to be more optimistically priced than the region has seen since 2014 after last week’s news that February’s gross gaming revenues almost registered positive year-on-
year growth.
Indications of recovery also come in the form of bullish remarks from Sheldon Adelson of Las Vegas Sands and Steve Wynn of Wynn Resorts in their fourth-quarter earnings reports. Wynn said that January had been “our best month in a long time,” and Adelson said he was predicting “stabilization in gaming revenue trends.”
Macau’s gross gaming revenue amounted to MOP19.5 billion in February, down just 0.1 percent compared with the same month last year, and marked the smallest year-on-year decrease since the gaming slump began in mid-2014.
According to the three-month moving averages of gaming revenue, as indicated by data released by Macau’s Gaming Inspection and Coordination Bureau, Macau’s casino sector may be approaching recovery. While individual months over the two years have seen accelerations and decelerations compared with their corresponding months a year prior, the general trend seen in the three-month averages appears encouraging.
For about a year now, there have been both upward and downward swings around the MOP20 billion per month mark, indicating that even if Macau is not experiencing a recovery, it may at least be bottoming out.
Financial services and investment analyst company The Motley Fool regards the challenge of increasing demand in the face of mounting supply as the biggest obstacle facing Macau’s gaming resort companies. The company warns that a supply crisis could negate any potential gains in the gaming recovery. DB