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Harry C. Curtis, Managing Director and Senior Analyst Covering the Gaming, Lodging and Leisure Sectors at Nomura Securities International Interviews with the Wall Street Transcript: Macau Sees Opportunities but Atlantic City? Not So Much

67 WALL STREET, New York - December 3, 2012 - The Wall Street Transcript has just published its Gaming and Leisure Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Hotel Occupancy, Rates and RevPAR Trend Upward - U.S. Regional and Emerging Market Hospitality - Gaming Opportunities In Asian Markets - Macau VIP and Mass Market Gaming

Companies include: Marriott International, Inc. (MAR), Carnival Corp. (CCL), Royal Caribbean Cruises Ltd. (RCL), Starwood Hotels & Resorts Worl (HOT), Las Vegas Sands Corp. (LVS), Wynn Resorts Ltd. (WYNN), MGM Mirage (MGM) and many others.

In the following excerpt from the Gaming and Leisure Report, an experienced analyst from Nomura Securities discusses the outlook for the sector for investors:

TWST: Would you start with a brief overview of your coverage universe and give us a broader sense of where you're focusing within this space right now?

Mr. Curtis: Within gaming, lodging and leisure, it's hotels, the casinos and the cruise lines. We have one "buy" rating in the hotel space, Marriott (MAR). We have several in the casino space, which is mainly based on our positive view in Macau. And in the cruise-line sector, particularly post the Concordia accident, we have "buys" on two stocks, Carnival (CCL) and Royal (RCL).

TWST: Please start with Macau. Would you give us a sense of what you see in there? It's been a crazy year for the stocks that are exposed over there.

Mr. Curtis: Right. The stocks started out very, very strong in early 2012, because there was a continuation of significant growth in VIP casino demand. But that changed in May, when the year-over-year growth rates slowed to zero. The U.S.-listed stocks, which had been up anywhere from 20% to 40%, pulled back to essentially even for the year. It was fascinating, because the combination of a deceleration in growth with a slowdown in the Chinese economy caused investors to take the chips off the table, if you will - pun intended - and the shares have been pretty much treading water ever since.

In the last month, a rebound in some of the Chinese macroeconomic data has helped a number of Chinese-related consumer stocks outside of our coverage, such as the restaurants. But typically, it takes one or two quarters for improvement in credit, economic activity and consumer sentiment in China to flow through to higher gaming volumes. Notably, the gaming volumes and growth have continued to be very strong in the mass segment, and the mass segment is important because it's got a 35% margin as opposed to 12% margin for the VIP business. But the VIP business has been stuck in neutral. Our sense in 2013 is that there should be mid-single digit growth in the VIP segment as the Chinese economy reaccelerates, and that the mass segment will continue to grow at about 20%.

TWST: In September, you boosted target prices for several lodging names as well. What was the rationale there?

Mr. Curtis: The RevPAR growth rate through the third quarter...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.