There is plenty of excitement around the casino-like behaviour of Hong Kong and mainland equity markets right now. The rather grim outlook of the nation's casino capital, Macau, helps explains why. Of the seven listed gaming companies operating in Macau covered by analysts at BNP Paribas, only one merits a buy recommendation - Galaxy Entertainment - with forecast share price upside of about 9 per cent. BNP's least favourite table play is Melco Crown, for which it forecasts a 28 per cent price fall. The drag is all about Macau's attempt to transform its gaming model - never mind its economic model - to one that that is less reliant on high rollers. "From the current situation we do not expect a V-shaped rebound for Macau; rather, we expect a long bottom to take shape," BNP analysts write in a new client note. "All in all, we could be looking at an L-shaped turnaround in Macau beginning only in late Q4." No wonder punters are placing their bets elsewhere.
