In a new report out this week, Barclays analyst Felicia Hendrix urges caution when it comes to calling a bottom in Macau gaming stocks. Although there have been several recent news reports and analyst reports indicating that Macau may have made it through the worst of the downturn, Hendrix wants to see more evidence before she is convinced that the gaming stocks have found a bottom.

Show Me The Money

Recent governmental commentary, including an easing of mainland visitation restrictions and the potential for a scaled-back smoking ban, have sent Macau stocks surging in recent weeks. However, Hendrix continues to urge caution in Macau for the time being.

“While declining GGR and the risk of budget deficits in Macau could be driving legislators to take a less restrictive stance, we need to see concrete evidence of sustained GGR stabilization to believe the sector has bottomed,” she explained.

Policy Implications

According to Hendrix, investors may be overestimating…

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