Genting S’pore

Genting S’pore: Nomura opines that the outlook for S’pore's gaming business could be constrained by slower growth prospects from both the VIP and mass-market segments. Argues that unlike in Macau, the govt has no plans to make S’pore a gambling hub and expectations on market size must be realistic. The house expects regulatory pressure to gain momentum before renewal of the 2 casino-gaming licenses in 1H13, adding the entry levy for locals may be raised. S’pore's VIP growth potential is also capped by the near non-existence of junket operators, which have been instrumental in driving Macau's gaming-revenue growth by providing credit to VIP players. It keeps its Reduce rating on Genting S’pore with $1.42 target under review. Notes its FY12 earnings estimate is 18% below consensus. The stock has yet to reverse its long downtrend but watch for any upside break of the $1.425 resistance.