Wells Fargo On Macau: 'Don't Expect A V-Shaped Recovery'

In a report published Monday, Wells Fargo analysts said that there would be more clarity on a Macau recovery only after the Galaxy Phase 2 opening. In the report Wells Fargo noted, "Checks this week suggested that the government has allotted Galaxy Phase 2 150 tables, and a Macau official indicated that a full smoking ban would mean no smoking rooms. Meanwhile, Chinese macro data remained weak, with housing prices recording their largest drop since 2011, and Premier Li calling for more "forceful measures.""The analysts said that they "remain neutral" as the market adjusts to a "new normal" of: Tighter government oversightMore muted medium-term industry revenue growthA recovery that is likely to be flatter than prior rebounds. The analysts do not expect a sharp V-shaped recovery similar to what was witnessed in 2009 and 2013. This is because of the now stricter policy settings and lack of broad-based economic stimulus in China. Melco Crown Entertainment Ltd (NASDAQ: MPEL) has authorized repurchases of shares worth up to US$500MM until May 2016. The company has not specified when it would start the buyback initiative. "The company began buying back shares last year. At the time, CEO Lawrence Ho stated that the buy-back program reflected the board's confidence in MPEL's long-term strategy and growth prospects," the analysts wrote.