MOP 6.00 Vitor Quintã Deputy editor-in-chief Editor-in-chief Tiago Azevedo
Not on my watch Chui’s ‘no’ to non-res dealers C
hief Executive Fernando Chui Sai On stressed yesterday – on the eve of China’s National Day – that only permanent residents will be allowed to work as casino dealers as long as he is in office. Speaking on the sidelines of National Day celebrations organised by the Macau Chamber of Commerce, Mr Chui recalled that he had “promised” that only residents could become dealers. “In the past I have said several times and also expressed in the Legislative
Assembly that dealer positions will only be filled by locals under my term. We have not changed this since then. I can’t comment further as it is a promise [I have made] and everyone knows that,” he stated yesterday. The debate was sparked by an observation made last week by Michael Leven, president of Las Vegas Sands Corp, that the locals-only policy regarding casino dealers was “going to put some limit on the availability of people unless the government rules are changed”.
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Year II
Number 382 Tuesday October 1, 2013
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April 19, 2013
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Govt coy on ‘18 month’ delay to light railway
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A government official would neither confirm nor deny yesterday that the first phase of the Light Rapid Transit (LRT) railway – from the border at Gongbei on the Macau peninsula to Cotai – could be at least 18 months late. Lei Chan Tong, Transportation Infrastructure Office director, had earlier admitted on the sidelines of a pre-National Day celebration, that the peninsula section would be delayed by that long. “The main construction works of the Taipa section started in February last year so there is already a delay of more than a year and a half” for the Macau peninsula section, he stated. The Taipa section has also been plagued by controversy in the last few months as one of the contractors and the government traded accusations over construction delays. Top Builders International Co Ltd, in charge of the railway depot and transportation hub in Taipa, said in August the project may be finished only in 2018.
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Housing prices drift as sales becalmed
Exports take biggest hit in 28 months
Lawrence Ho seeks growth overseas
%Day
POWER ASSETS HOL
2.59
CITIC PACIFIC
1.31
KUNLUN ENERGY CO
1.12
CHINA RES POWER
0.55
HONG KG CHINA GS
0.11
TENCENT HOLDINGS
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WHARF HLDG
-2.89
CHINA MERCHANT
-2.93
BELLE INTERNATIO
-3.76
COSCO PAC LTD
-3.89
Source: Bloomberg
The number of homes sold fell again in August, but average prices still went up 1.8 percent monthon-month. Prices were however still well below the peak of nearly 100,000 patacas per square metre reached in May. In August prices were an average of 67,414 patacas (US$8,441) per sq. metre. Savills (Macau) Ltd business development manager Skie Ng blamed the decline from the peak on slump in pre-sales.
Macau’s exports suffered in August the steepest decline in more than two years. The value of goods recorded – especially items for reexport including telecommunications equipment – went down 12 percent year on year said the Statistics and Census Service on September 30. Exports were worth 718.7 million patacas (US$89.8 million) in August. It is the first year-on-year decrease since February this year and the largest plunge since April 2011.
Lawrence Ho Yau Lung – cochairman of Macau casino developer Melco Crown Entertainment Ltd – admits that constraints placed on Macau’s gambling industry have spurred his interest in investments further afield. Melco Crown is interested in Japan and is fitting out a new Philippines casino in a joint venture. His Melco International Development Ltd has a project in the Russian Far East, and invests via another unit Cambodia.
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Macau
Official coy about LRT opening late The government says it will soon begin consulting the public about the peninsula route Tony Lai
tony.lai@macaubusinessdaily.com
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he head of the Transportation Infrastructure Office is noncommittal about the prospect of a delay of one and a half years in the opening of the Light Rapid Transit (LRT) elevated railway. The railway is scheduled to open in 2015. Speaking yesterday about the start of work on the peninsula section of the LRT, Transportation Infrastructure Office director Lei Chan Tong said: “The main construction work on the Taipa section started in February last year, so there is already a delay of more than a year and a half.” Asked if this meant the railway would open a year and a half late, Mr Lei gave an indirect reply. “It is a fact that the Macau section has already been delayed by a year and a half,” he said. “We just hope we can carry out the consultations better this time and start the Macau section work as soon as possible.” Mr Lei was speaking on the sidelines of the Macau Chamber of Commerce’s National Day celebrations. The start of work on the peninsula section has been on hold since July last year, when the Commission against Corruption, taking the side of NAPE residents, suggested that the railway should run along the waterfront rather than through the middle of NAPE. Mr Lei said his office would publish several proposals for the route of the peninsula section in the next one or two months, and consult the public about them. He said the government would ask consultants about how to bridge the gap in time between the completion of the Taipa section and the completion
The Light Rapid Transit railway is scheduled to start running in 2015 (Photo: Manuel Cardoso)
of the peninsula section. “A decision will then be made,” he said. The first phase of the railway will stretch from the Gongbei border crossing to the Taipa Ferry Terminal and have 21 stations. The Taipa section has also been plagued by controversy in the past few months, since the government and one of the contractors building it began trading accusations about delays in the work. Top Builders International Co Ltd, which is building the train depot and transport interchange on Taipa,
said in August that the project might be finished only in 2018. The government threatened a month ago to sack the contractor. The row has since cooled. Mr Lei said yesterday: “In the past two weeks we have had several meetings about the depot with the contractor, which has expressed a positive attitude.” He added: “It has also promised it will continue construction based on the original requirements stated in the tender documents and contracts.” Top Builders would make next week a new construction proposal for
Housing prices drift as sales be calmed Buying off the plan was only a trickle in August while projects awaited government approval Vítor Quintã
vitorquinta@macaubusinessdaily.com
W
ith pre-sales in limbo, the number of homes sold fell again in August, leaving prices far from the peak they reached in May. The price of housing rebounded by 1.8 percent to an average of 67,414 patacas (US$8,441) a square metre, having fallen in the preceding two months, the Financial Services Bureau announced yesterday. But the average price remained a long way from its peak in May, when it was close to 100,000 patacas a square metre. Savills (Macau) Ltd business development manager Skie Ng blamed the freeze in pre-sales
for the slump. Ms Ng told Business Daily that most unfinished flats were in high-end projects like Windsor Arch on Taipa, and that their prices were “much higher than for mass-market flats”. The number of purchases off the plan increased to 31 in August from 12 in July. In contrast, in May the figure was 721, or half of all flats sold, as developers rushed to clinch deals before new rules on pre-sales came into force. Since June 1 sales of flats off the plan have been legal only if the foundations of the development that will contain them are complete and each flat is registered with the government.
Ms Ng said many large housing projects were awaiting government approval, including the later phases of One Oasis on Coloane and Polytec Group projects in Areia Preta. As so much of the supply of highend flats was on hold, the average price of unfinished housing tumbled by over 20,000 patacas to 89,647 patacas per square metre in August. It was the lowest average since the Financial Services Bureau began publishing data on pre-sales in May. Ms Ng expects prices to remain at “the same level” for the rest of this year. She predicts that they will rise only early next year, when space in new
the government to consider, he said. Top Builders senior commercial manager Calvin Pang confirmed that his company will have a new plan for the depot. But he said discussions about the transport interchange were deadlocked. Asked if work on the Taipa section could get back on schedule, or if the government would penalise Top Builders, Mr Lei declined to comment. He said only that the government had ordered Top Builders to get more workers and equipment on site.
projects goes on the market. She considers the big drop in the number of sales normal. Just 534 flats were sold in August, 114 fewer than in July and the fewest in any month since February last year. The number of finished flats sold fell by 20.9 percent to 503. On the peninsula, 524 homes were sold in August, 106 fewer than in July. Ms Ng said that as housing sales shrank most estate agents had moved into “more active” markets such the market for rented homes and the market for office sales. She said the law on estate agents, which came into force in June, was making it “tough” for estate agencies. But she said the law would do some good in the long run by “pushing out some ill-equipped agents”.
MOP 67,414
Average price per square metre of housing in August
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Macau any interactive discussion with the society [public] or study on this matter,” said Mr Tam. “Rumours will be stopped by the wise,” he added, quoting a Chinese saying. Davis Fong Ka Chio, director of the University of Macau’s Institute for the Study of Commercial Gaming, said on Saturday the government should allow migrant workers to make up between three percent and five percent of dealers. The Macau Federation of Trade Unions, the Macau Gaming Enterprises Staff Association, the Macau Gaming Industry Workers Association and the Forefront of Macau Gaming group oppose any change. Mr Tam said the government felt “no pressure” to change the rule. “This policy has been enforced for like a decade,” he said. “If there is any pressure, it has already been here for 10 years, not due to the current issue.”
Table cap
“This policy has not changed and we have no plans to change it,” the official stressed three times in his sixminute question and answer session with the media. Mr Tam described as “strange” recent debate on the issue. It was sparked by an observation made last week by Michael Leven, president of Las Vegas Sands Corp, that the locals-only policy regarding casino dealers was “going to put some limit on the availability of people unless the government rules are changed”. “At this current stage the government is not prepared to start
Mr Tam said he does not expect the labour market will be strained by the opening of several Cotai resorts starting 2015. Macau could need as many as 10,000 more croupiers for Cotai alone between the middle of 2015 and 2018 were the government to approve all the approximately 3,366 new tables that the eight new Cotai projects have requested, according to Business Daily calculations. The figure is based on the assumption that three dealers would be needed per table – the current ratio in the local industry. Mr Tam hinted that not all gaming tables that casino operators have requested will be approved. “It has been widely known that the compound annual growth of the gaming tables in the next 10 years will be capped at three percent,” he said. “If there is an annual growth of three percent on tables in the next 10 years, this means there will also only be an annual growth of three percent on the dealers,” said Mr Tam. Union Gaming Research Macau said in a note in September last year that “based on simple math”, a total of nearly 1,900 new tables will become available under the capped growth plan. The government will only start in 2015 to discuss its policy for the industry beyond 2022 when the last of the current six concessions expire; “which is an appropriate time,” Mr Tam reiterated yesterday.
agencies in the city in 2012, compared to the 186 operating in 2011, according to the data. The upward trend in travel agency numbers was also seen in Hong Kong, where there was a four percent rise during the same period – to 1,671 – according to Hong Kong’s government-operated Travel Agents Registry. Receipts of Macau travel agencies rose nearly eight percent year-onyear to slightly more than 5.97 billion patacas (US$747 million) from approximately 5.54 billion a year earlier. Receipts from services requested by people while outside the city only accounted for 9.7 percent. The Macau data don’t otherwise distinguish between agency receipts from inbound tourists and those from outbound tourists, although the survey does show 31 percent of receipts came from reservation of tickets, 26 percent from package tours and 24 percent from reservation
of rooms. Takings from online services were only 0.3 percent of the total, at 19.53 million patacas. In Taiwan, which has also seen major growth in tourists from mainland China, 40 percent of all inbound visitors last year, chose a “group tour arranged through a travel agency” according to the island’s Tourism Bureau. For outbound tourists from Taiwan, acceptance of online shopping for travel services appears to be much higher than in Macau. A survey in April last year by MasterCard – a credit card issuer which admittedly has an interest in promoting transactions via plastic – indicated more Taiwanese are doing their travel-related shopping online. The results suggested an increase in both online spending on hotels (up from 62 percent a year earlier to 72 percent) and airline tickets (up from 59 percent in the earlier period to 66 percent).
Macau could need as many as 10,000 more dealers for Cotai alone
Chief Exec’s clear ‘no’ to non-resident dealers City’s leader says such a policy change will never happen on his watch Tony Lai
tony.lai@macaubusinessdaily.com
C
hief Executive Fernando Chui Sai On stressed yesterday only permanent residents will be allowed to work as casino dealers as long as he is in office Speaking on the sidelines of National Day celebrations organised by the Macau Chamber of Commerce, Mr Chui recalled that he had “promised” that only residents could become dealers. “In the past I have said several times and also expressed in the Legislative Assembly that dealer positions will only be filled by locals under my term. We have not changed
this since then. I can’t comment further as it is a promise [I have made] and everyone knows that,” he stated yesterday. Mr Chui’s current term as chief executive will end by December 2014 but he is expected to run for re-election. Francis Tam Pak Yuen, secretary for Economy and Finance, also commented on the issue later at the same event. “The government policy has always been very clear – casinos will not import any non-residents for the [positions of] pit supervisors and dealers,” stated Mr Tam.
Package visitors spur agency growth Agent receipts rose nearly 8 pct last year show official data Michael Grimes
michael.grimes@businessdaily.com
T
he number of travel agencies in Macau rose six percent year-on-year during 2012, reflecting a 13 percent growth yearon-year for inbound package tourism to the city, said the Statistics and Census Service.
Additionally during the period there was a 4.4 percent net rise in the city’s population, and thus more people seeking to travel outside for business and leisure, said the statistics bureau. There were 197 active travel
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Exports in steepest dive for 28 months A plunge in shipments of mobile phones drags down exports in August Tony Lai
tony.lai@macaubusinessdaily.com
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xports had their deepest slump for more than two years in August, undermined by a drop in re-exports, particularly re-exports of mobile phones. The Statistics and Census Service announced yesterday that exports were worth 718.7 million patacas (US$89.8 million) in August, 12 percent less than a year earlier. The fall from a year earlier was the first since February and the biggest since April 2011, when exports fell by 17 percent. The fall in August was due to the sluggishness of re-exports – goods shipped in only to be shipped out without any value added here. Re-exports were worth 543.5 million patacas in August, 14 percent less than a year earlier – again, the biggest fall for more than two years. The value of domestic exports declined further to 175.2 million patacas, 7 percent less than a year earlier. Exports of telecommunications equipment, which includes mobile phones, fell the most. They were worth 28.3 million patacas, having been worth 227.2 million patacas a year earlier. In contrast, demand for jewellery
Macau’s trade deficit widened in August as exports slumped
remained strong. Re-exports of jewellery doubled in value to 46.2 million patacas. The value of shipments to Macau’s main export market, Hong Kong, fell by 22.1 percent to 370 million patacas. The export slump and a rise in imports meant the August trade deficit widened by 22 percent to 6.27 billion patacas. Imports were worth 6.99 billion
patacas in August, 17 percent more than a year earlier. The value of gold jewellery imports was 1.05 billion patacas, two-thirds more, and the value of watch imports rose by over one-half to 617.2 million patacas. The drop in exports of telecommunications equipment meant the value of imports of mobile phones fell by one-quarter to 394.5
million patacas. In the first eight months of this year the cumulative trade deficit was 46.33 billion patacas as imports grew to 52.39 billion patacas, 14 percent more than in the equivalent period of last year. Despite the slump in August, the value of exports in the first eight months, at 6.05 billion patacas, was 12 percent higher than in the equivalent period of last year.
CTM lowers local leased line fees M
acau’s major landline telecommunications operator will charge less money for allowing rival companies to use its network, starting today. The reduction will range between 4 percent and 16 percent based on contract terms, Companhia de Telecomunicações de Macau SARL (CTM) said yesterday. “Various industries including SMEs [small and medium enterprises], banks, retail (…) and also local telecom service operators will benefit from this reduction scheme,” the company said in a press statement. Rival mobile phone operators, which must use CTM’s network, had been demanding a reduction in charges for some time. SmarTone Mobile Communications (Macau) Ltd said in May that leased-line fees were six
to eight times higher here than in similar markets, such as Hong Kong. CTM has denied such claim. It submitted a price-cut proposal on local lines last November but the government thought the cut was not enough. The Bureau of Telecommunications Regulation said in a statement yesterday they would continue to push for further cuts on lines charges to create “an effective environment” for competition. CTM is also offering to their customers fee discounts during a year based on the lengths of their contracts for leased lines. This could push the reduction to as much as 21 percent if the discounts are included, the company added. CTM had already reduced its charges for international leased lines by up to 42 percent in July. T.L.
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Melco International unit signs LT Game deal Latter will supply electronic table games to boutique casino in Cambodia Staff Reporter
newsdesk@macaubusinessdaily.com
M
acau-based casino equipment maker LT Game Ltd has signed a deal with a unit of Lawrence Ho Yau Lung’s Melco International Development Ltd for electronic gaming machines at a Cambodia casino. LT Game will “supply, install and provide maintenance for 30 electronic gaming machine seats on a revenue sharing basis” at Entertainment Gaming Asia Ltd’s Dreamworld Pailin casino near Cambodia’s border with Thailand. The US$2.5 million (20 million patacas) Dreamworld opened in May last year with approximately 1,100 square metres (12,000 sq. feet) of gaming space offering 30 live tables with games including baccarat, roulette, and poker and dice variations, according to a company statement at the time. It also had 40 slot machines. The revenue split on Dreamworld’s deal with LT Game will be 85 percent to 15 percent, in favour of the casino operator, known by its ticker name EGT, according to a statement issued
by the latter firm. It will involve “semi-live electronic baccarat and roulette table games” – understood to be a reference to games with electronic bet settlement but live dealers. The contract term is for five years probably commencing this month. “We are delighted to be able to offer the LTG range of products in our markets and expand our gaming product mix beyond our extensive line of Dolphin gaming chips and [gaming] plaques,” said Clarence Chung Yuk Man, chairman and chief executive of Nasdaq-listed EGT. In an EGT filing to the United States’ Securities and Exchange Commission in November last year, Melco International Development was described as the parent of Entertainment Gaming Asia’s principal shareholder, EGT Entertainment Holding. Melco International is also a five percent investor in a recently announced casino project in the Russian Far East. Mr Chung in turn is also the chairman of Melco Crown
Dreamworld Pailin’s casino floor
(Philippines) Resorts Corp, a unit of Macau casino developer Melco Crown Entertainment Ltd. The latter firm – via an indirectly held unit called MCE Leisure – has exclusive management, operation and control of the US$1 billion Belle Grande Manila Bay casino project in the
Philippines according to an October 2012 filing in Hong Kong by the MCE parent. Melco Crown is developing Belle Grande with Filipino-Chinese entrepreneur Henry Sy’s Belle Corp. LT Game is a unit of Hong Konglisted Paradise Entertainment Ltd, chaired by Jay Chun.
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Macau KEY POINTS Macau and mainland control Macau casino growth City too ‘small’ for theme park: Lawrence Ho VIP gambling could soften in Golden Week: Union Gaming China manufacturing – indicator for VIP – below Sept forecasts
Lawrence Ho – ‘small’ Macau limits development options
Macau constraints spur Ho’s overseas plays Co-chairman of Melco Crown says not enough space in city for ‘theme park’ building Michael Grimes
michael.grimes@macaubusinessdaily.com
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awrence Ho Yau Lung – cochairman of Macau casino developer Melco Crown Entertainment Ltd – has admitted in an interview that constraints placed on the city’s gambling industry have spurred his interest in investments further afield. “Given the Macau government and the Chinese government want to control the growth rate,” the company is seeking other opportunities outside the city, he told Bloomberg News in an interview in Tokyo. Referring to the wishes of the Chinese and Macau authorities to see diversification beyond gambling in Macau’s tourism market, Mr Ho stated: “Macau is a small place…As much as I want to build a theme park, we just don’t have the land to do it.” Melco Crown, a joint venture with Australia’s Crown Ltd, said last week it was interested in spending more than US$5 billion (40 billion
patacas) on a casino resort in Japan if the law there eventually allows such ventures. Mr Ho didn’t mention a theme park for Japan in excerpts of the interview published at the weekend. That country already has three international-standard theme parks – Tokyo Disneyland and Tokyo DisneySea in the capital, and Universal Studios in Osaka. Mr Ho would be happy with either of those cities for his suggested Japanese gaming resort, says Bloomberg.
Philippines plan The Melco Crown partnership is already committed to spending up to US$650 million in a Philippines joint venture with a local investor on the US$1 billion Belle Grande Manila Bay. Melco Crown said in a Hong Kong filing in October 2012 that a local unit – MCE Leisure – would
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be entitled to “approximately” half of Belle Grande’s earnings before interest, taxation, depreciation and amortisation “subject to overall property revenue and profitability levels”. MCE Leisure will also get all profits from non-gaming operations. The resort is due to open in the third quarter of 2014 according to local partner Belle Corp’s second quarter report filed with the Philippine Stock Exchange. Mr Ho is also diversifying into a Russian casino scheme via his own business Melco International Development Ltd and another Hong Kong-listed vehicle called Summit Ascent Holdings Ltd in which he has an equity holding. An initial US$130 million is to be spent on the scheme in the Primorye region of the Russian Far East by all the parties, including local investors, according to a Hong Kong filing by Summit Ascent. In other developments, Union
Gaming Research Macau said that VIP gambling in Macau may soften sequentially during the Golden Week holiday that straddles China’s National Day today. That would follow a pattern sometimes seen during Chinese New Year when crowds or family commitments keep high rollers away. “With respect to GGR [gross gaming revenue], it is important to keep in mind that like Chinese New Year, which sees a massive influx of mass market customers, many VIP customers will wait until the market has quieted down before coming to Macau,” said a note from Union’s Grant Govertsen. “As such, VIP might not pick up until later in the first week and over the second weekend,” he added. Union Gaming says that in 2012, over the 10-day period around October’s National Day holiday – which included a preceding weekend – Macau recorded a total of nearly 1.2 million visitor arrivals, representing 13 percent year-on-year growth. The research house added that mainland curbs on low-price tour groups could affect this year’s headline numbers for inward visitors during the holiday, but were unlikely to have an impact on gambling revenue. Chinese manufacturing activity – in the past one indicator, albeit on a six-month trailing basis for Macau VIP gambling activity – rose more slowly than expected in September according to one index. The Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics rose to 50.2 in September from 50.1 in August. The final number was lower than last week’s 51.2 preliminary reading and the 51.2 median estimate in a Bloomberg News survey. A similar gauge from the mainland government is due today. With Bloomberg News
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Greater China
Shanghai trade zone restricts foreign investment
Pimco sees Chinese debt dominant
Investment in 18 sectors restricted or banned in the new zone
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he Shanghai government published a list of sectors yesterday where foreign investment will be banned or restricted within its new free trade zone (FTZ), but in a departure from usual practise, no permission will be required to invest in other sectors. The China (Shanghai) Pilot Free Trade zone officially opened for business on Sunday, and officials have outlined ambitious plans for bold reforms in the country’s currency, interest rates, trade and industry policies in the zone, but without giving details on implementation. The “negative list”, published on the FTZ’s website, closely resembles the central government’s current catalogue of nationwide restrictions on foreign investment. Officials have said the list will be shortened over time as zone liberalisations gain steam and risks are better understood. Top leaders were not present at the zone’s opening, and state media has tried to manage expectations by quoting unnamed officials saying dramatic reforms are unlikely to be rolled out this year, while also discouraging property speculation around the zone that has already seen prices for some commercial properties rise 20 percent over several months. The list is the first of its kind in China and a step forward compared with China’s national “foreign investment catalogue”, that divides investment permissions into broad categories – encouraged, allowed, restricted, or banned – which foreign companies complained were too vague and inconsistently interpreted
to be of use. The “negative list” approach means that if a sector is not on the list, foreign companies can invest in it without any restriction or jointventure requirements; overseas entities just need to register for their projects without applying for approval. “For all fields not on the negative list, an approval system for foreign investment projects is now replaced by a registration system,” the Shanghai municipal government said in a statement accompanying the list. “Those [projects] related to national security, censorship and anti-trust investigations must also comply with related regulations.” Foreign investments in 18 sectors will be restricted or banned in the Shanghai zone. The negative list is also composed of hundreds of line-
KEY POINTS ‘Negative list’ restricts investment in 16 major industrial categories Proscribed industries nearly identical to national policies Investment in any industry not listed permitted by default
Chinese gold imports could get a boost
China to ease gold trade restrictions C
hina’s central bank is planning to increase the number of firms allowed to import and export gold and will also ease restrictions on individual buyers of the precious metal, according to a draft policy document issued yesterday.
The proposed policy change could boost imports by China, which is expected to overtake India this year as the world’s top gold consumer, and where gold normally trades at a premium to London spot prices. “If it comes into effect, supply into China could increase and [local] prices could ease depending on demand,” said a Hong Kong-based precious metals trader, who declined to be named. The People’s Bank of China said on its website that the new rules would allow bank members of the Shanghai Gold Exchange, as well as gold producers with an annual output of more than 10 tonnes, to apply for import and export licences.
item restrictions in 16 major industrial categories, ranging from culture to hydropower to telecommunications, many of which trade partners argue China committed to opening up long ago when it was allowed to join the World Trade Organization. For example, foreign firms are still banned from investing in China’s tightly controlled media organisations; from publishing newspapers, magazines or books; and from producing electronic publications. Similarly, they are banned from setting up internet cafes, conducting gambling businesses or opening pornographic venues, according to the list. Foreign firms are also proscribed from the production and development of genetically modified (GM) seeds. The list however includes items which allow limited foreign firms investment in new economic areas, such as the exploration of shale gas. For the first time foreigners will be permitted to invest in projects exploring non-traditional national gas resources, such as shale gas and sea-bottom natural gas, but only via joint-ventures with Chinese partners. The FTZ will also be bound by provisions in national laws that set restrictions for foreign participation in insurance brokerages and commodity futures trading companies. The list, which comes into effect immediately, will be subject to timely changes in line with developments of the zone, the statement said without elaborating. Reuters
Trade is currently restricted to just nine banks, while the exchange has 25 bank/financial institution members. The central bank did not say when the new rules would take effect. In a statement accompanying the policy document, it said the draft rules were designed to “standardise and promote the development of the gold and gold product import and export business and protect the legal rights of practitioners”. All transactions will need to be registered with the exchange, and licence holders have a responsibility to ensure that domestic supply and demand remain balanced, the draft document said. The central bank would continue to maintain control on overall gold export volumes “in accordance with the requirements of state macroeconomic policy adjustments,” it said. “It is part of the new tide of financial deregulation,” said Jiang Shu, a gold analyst with Industrial Bank in Shanghai. “In the long term, this is a natural process of relaxing gold import regulations.” A shortage of gold in China earlier this year when a steep fall in international prices sparked a surge in demand could have been a factor in easing the rules, he said. China does not publish gold trade data, but according to figures released by the World Gold Association, the country’s imports via Hong Kong reached a new record of 834.5 tonnes in 2012, up 94 percent on the year. Reuters
China will dominate the region’s dollardenominated debt markets in 2014 as domesticdriven economic growth boosts energy and realestate bonds, according to Pacific Investment Management Co. Companies in China and Hong Kong have sold US$52.7 billion of notes this year, or a record 50 percent of all dollar securities in Asia outside Japan, the first time a single country has captured half of the region’s U.S. currency market in data compiled by Bloomberg starting in 1999. The yield premium on debentures from China has shrunk 46 basis points in the past 12 months to 378 basis points, versus a 17 basispoint jump for Asian credits, JPMorgan Chase & Co indexes show. “It’s clear that the credit market’s expansion will be driven from China,” said Raja Mukherji, the Hong Kong-based head of Asian credit research at Pimco, manager of the world’s biggest bond fund. “There are innumerable opportunities in China but investors have to differentiate between the Chinese credits. Fund managers really need to do their credit checks to assess whether they’re being paid to take on the risk.” Companies from China sold some US$5.6 billion of bonds this month, more than twice as much as in August, data compiled by Bloomberg show.
Beijing offers solar power tax rebates China’s Ministry of Finance announced it will offer tax breaks to manufacturers of solar power products, as China moves to support an industry still struggling to deal with massive overcapacity and weak demand. The ministry said in a short statement on its website that producers of solar power products will receive immediate refunds of 50 percent of value-added taxes. The National Development and Reform Commission provided subsidies for solar power stations in late August. “China’s bloated photovoltaic industry still faces a grim outlook as many companies are deeply mired in debts,” said a report on the official Xinhua news service discussing the announcement. It cited data from the China Renewable Energy Society saying that the country’s top 10 solar panel makers are up to 100 billion yuan (US$16.34 billion) in debt, with a debt to asset ratio above 70 percent on average. Beijing has said it wants to consolidate the industry, but the sector continues to enjoy protection at the central and local level; the latter is particularly strong because solar power companies are frequently major employers.
Taiwan ruling party fails new court test An appeals court upheld a freeze on the Taiwanese ruling party’s bid to expel the speaker of parliament, in a setback for President Ma Ying Jeou’s bid to move on from a series of political scandals. Taiwan’s High Court ruled yesterday the Kuomintang can’t expel Wang Jin Pyng until a determination is made on whether he tried to stop the prosecution of an opposition lawmaker, as the party claims. The Kuomintang said he tarnished its reputation, while Mr Wang denies any wrongdoing. The court ruling further slows Mr Ma’s bid to get past a string of scandals – including the death of a military conscript and plagiarism claims – that resulted in the resignations of 10 cabinet-level officials this year. Mr Ma, whose approval rating is less than 10 percent, incurred criticism for allegedly circumventing due process in Wang’s case. The Kuomintang will continue its litigation against Mr Wang, the president’s office said after the ruling. The opposition Democratic Progressive Party said it would seek Mr Ma’s impeachment for violating the constitution in his handling of Wang’s case, according to Wang Min Sheng, a party spokesman. The DPP has 40 of 113 seats in the legislature to the Kuomintang’s 65.
11 11
October 2013 April 19,1,2013
Greater China
Manufacturing growth stalls PMI numbers miss preliminary result Koh Gui Qing
C
hina’s factory sector grew only slightly in September as domestic demand faltered, a private survey showed, an unexpectedly weak outcome that suggests a firm rebound in Asia’s economic powerhouse still remains elusive. The Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics rose to 50.2 in September from 50.1 in August. Although a five-month high and showing the sector was growing, the survey was disappointing for investors as it was well below last week’s flash reading of 51.2, with domestic orders weaker than preliminary estimates suggested. New export orders picked up the slack, climbing to 50.7 from 47.2 in August to be above the 50-point mark separating expansion from contraction. After seasonal adjustments, however, the expansion was slight, HSBC said. The Australian dollar, a proxy for growth in the world’s second-largest economy, fell a quarter of a cent on the disappointment that activity was not as strong as hoped. “The final reading was weaker than the flash and it showed that
activity has weakened in the last 10 days,” said Tao Wang, an economist at UBS AG in Hong Kong, adding a rebuilding of stocks by firms that had led the economic pick-up was slowing. Today the government releases its official PMI, which is weighted more towards bigger and state-owned companies and generally paints a rosier picture than the private survey, which focuses more on smaller and private sector firms.
Still stabilising The softer-than-expected final HSBC PMI reading was in line with investor bets that China’s economy is stabilising, even if the revival is feeble and perhaps short-lived. Indeed, parts of the PMI poll suggested the economy is not out of the woods. Factories cut jobs for the sixth consecutive month in September. And although output and new orders grew in September, HSBC noted the expansion was fractional after seasonal adjustments. In fact, it said some firms reported a contraction in output, citing unstable economic conditions. Qu Hongbin, HSBC chief China
Soft domestic demand hits manufacturing PMI
economist, said action taken by Beijing to shore up growth was helping to lift the economy. “Growth is bottoming out on Beijing’s mini-stimulus,” Mr Qu said, noting however that growth in domestic demand was unchanged from August. Beijing’s support and firmer growth in the United States, China’s second-biggest export market, have put a floor beneath China’s economy,
which has slowed in 12 of the last 14 quarters. To reinvigorate growth, the government has fast-forwarded infrastructure investment, lowered taxes for small companies, and sustained spending in public housing. But analysts warn the mild pickup could fizzle if Beijing enacts planned reforms that include curbing state investment. Reuters
12 12
October 1, 2013 April 19, 2013
Asia San Miguel to raise US$2 bln San Miguel Corp said it will raise US$2 billion from the sale of its stake in Manila Electric Co to JG Summit Holdings Inc, helping fuel expansion into airlines, energy and infrastructure. Manila Electric, also known as Meralco, surged 4.4 percent, the most in five months, after the deal was announced. San Miguel, the Philippines’ largest and most acquisitive company, and its units hold about 27 percent of the country’s largest electricity retailer. The asset sale is the latest in a series of acquisitions and sales by San Miguel, which started as a brewer more than 100 years ago. JG Summit’s purchase of a stake in Meralco, which sells electricity to a quarter of the nation’s population, marks retail and property magnate John Gokongwei’s entry into the power business and fortifies his alliance with billionaire Anthoni Salim’s First Pacific Co. “Manila Electric remains a very valuable franchise with an attractive dividend yield,” said James Lago, head of research at PCCI Securities Brokers Corp. “This Gokongwei-First Pacific partnership could lead to other things. San Miguel will use proceeds from the sale to fund projects and possibly refinance debt.”
Toshiba to cut jobs in TV unit Toshiba Corp, the maker of products from flash-memory chips to steam turbines, will cut the number of workers in its global television operations by half to 3,000 as it boosts outsourcing of production. As much as 70 percent of TV output will come from other manufacturers by the year ending March 31, 2015 from 40 percent now, Tokyobased Toshiba said in a statement yesterday. The company is targeting cost reductions of 20 billion yen (US$204 million), spokesman Toru Ohara said by phone. Japanese TV makers are struggling with stalling demand and falling prices amid competition from South Korean rivals including Samsung Electronics Co and LG Electronics Inc. Toshiba is expanding in semiconductors, medical systems and energy amid falling sales of liquid-crystaldisplays and 100 billion yen of TV losses in the past two years. “In TVs it’s difficult to compete against the South Korean makers and Toshiba wasn’t able to add extra value to its TVs,” said Tsunenori Ohmaki, an analyst at Tachibana Securities Co in Tokyo. “It’s positive for Toshiba to take action before losing more money.” The company will restructure its visual and home-appliance business and close two of the three internal TV production sites it has overseas, the company said.
Tokyo Electric to get US$5.9 bln financing Creditors are set to provide US$5.9 billion in financing to Tokyo Electric Power Co (Tepco), a person involved in the talks told Reuters yesterday, offering a lifeline to the embattled owner of the crippled Fukushima nuclear plant. Tepco’s major banks are prepared to provide 500 billion yen (US$5.09 billion) in financing in December – 200 billion yen in loan rollovers and 300 billion yen in new financing – said the person, who has been involved in financing talks as a representative of one of the utility’s major creditors. At the same time, Tepco’s application on Friday to restart an undamaged nuclear plant helped convince some wavering smaller banks to join a group of 28 financial institutions in rolling over 77 billion yen in loans due at end-October, the person said. The utility’s success in winning a refinancing of the loans due next month was previously reported by the Nikkei and Asahi newspapers.
Jump in output hints at S. Korean recovery Industrial production at nine-month high
S
outh Korea’s industrial output expanded in August from the previous month at its quickest pace in nine months, data showed yesterday bolstering third-quarter growth prospects for Asia’s fourthlargest economy. Industrial output rose by a seasonally adjusted 1.8 percent in August from the previous month following a revised 0.3 percent fall in July, Statistics Korea data showed. The outcome beat the median forecast from a Reuters survey of economists for a 0.5 percent rise and was better than the most optimist pick for a 1.5 percent rise in the survey. South Korea’s industrial output closely mirrors its exports, as the country is home to some of the world’s biggest manufacturers of cars, ships and smartphones. Exports in August grew by 7.7 percent from year earlier, the strongest in seven months, and along with other data in recent months suggest the economic recovery is starting to gather momentum. “Overall, the economy is gradually turning around in the second half,” said NH Investment economist Kim Jong-soo. “The output data shows an improvement in average utilisation rate, retail sales and capital investment.” The data, combined with a Bank of Korea survey showing that local manufacturers’ assessment of likely business conditions rose to a 17-month high for October, suggests that the trade-dependent country continues to recover as stabilisation in the U.S. and China improve prospects for exports. South Korea’s sequential gross
Industrial output grows 1.8 pct on-month in August
domestic product growth accelerated to a seasonally adjusted 1.1 percent in the second quarter from 0.8 percent seen in the January period, and the firm August exports and output data bolster expectations that growth in the current July-September quarter will remain firm. Government officials remained cautious on the economic outlook, however. “We see the August data as supporting evidence to the belief that the economy remains on track for a gradual recovery,” Choi Sang-mok, director general of economic policy at the Ministry of Strategy and Finance, told Reuters. NH Investment’s Mr Kim also said the government and the Bank of Korea will retain their growthsupportive policies for now. South Korea’s September trade
and consumer inflation data will be released separately today. Median forecasts Reuters survey of economists suggest weaker annual exports growth and inflation for this month compared with August’s, suggesting that growth momentum remains modest at present. The Bank of Korea kept the policy rate unchanged at 2.50 percent earlier in September for the fourth consecutive month after cutting by 25 basis points in May, and Mr Kim said he does not expect the central bank to change rates in the near term. “Only time will tell whether the current recovery will be sustained, and there are also uncertainties looming over financial markets because of the cloud over the U.S. tapering of its bond-buying stimulus,” Mr Kim said. Reuters
Nomura sees US$690 bln flowing into Japan stocks Equities made up just 7.9 pct of household assets as of March
J
apanese savers are poised to pump US$690 billion into stocks to benefit from new tax breaks as the government tries to avert a retirement cash crunch in the nation with the world’s oldest population and lowest interest rates. The Nippon Individual Savings Account programme, which opens for applications today, will allow individuals to buy 1 million yen (US$10,143) a year of risk assets that are exempt from taxes on dividends and capital gains for five years. The plan will draw as much as 68 trillion
yen through 2018, with 65 percent of users pulling money out of bank deposits to purchase securities, estimates from Nomura Research Institute show. “I am considering investing in Japanese stocks for the first time in my life,” said Toshiya Enomoto, a 42-year-old engineer whose parents likened equities to gambling. “With the heavy tax burden in Japan, these accounts are really attractive.” Japan’s government is encouraging citizens to switch money out of bank accounts that pay interest
of 0.02 percent, not enough to fund retirement in a nation where 26 percent of the population is already 65 or older, according to data compiled by Bloomberg. Households held US$8.5 trillion in deposits as of March, the most ever, central bank data show. Diverting some of that money into stocks, where the Topix index surged 42 percent this year, would help Prime Minister Shinzo Abe provide capital to spur growth in the world’s third-largest economy. Equities made up just 7.9 percent of household assets as of March,
editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com
13 13
October 2013 April 19,1,2013
Asia
N. Zealand takes gamble to cool housing market Central bank concerned about risks of overheated housing market
N
ew Zealand’s central bank takes a step into the dark on Tuesday when new rules to limit risky house lending come into effect, although many economists doubt they will work. Meanwhile, struggling first home buyers look like they have become the first casualties.
From today, banks have to keep lending to borrowers with mortgages of less than 20 percent of a property’s value – the so-called high loan-tovalue ratio lending (LVR) – to no more than 10 percent of their total lending. The Reserve Bank of New Zealand had been flagging for the
past year its concern about the risks of an overheated housing market, particularly in the biggest city Auckland, and the risk that posed to the country’s financial system if there should be sharp downturn. “The LVR restrictions are designed to help slow the rate of housing-
Reuters
Median house prices were at a record in August
compared with 34 percent in the U.S. and 15 percent in the eurozone, the most recent Bank of Japan data show. Domestic individual investors accounted for 28 percent of Japanese share trading in August, according to Tokyo’s bourse. While that’s up from 21 percent a year earlier, foreign buyers made up 63 percent.
Topix surges The Topix soared 69 percent since elections were announced in November that brought Mr Abe to power. Shares have risen more than any other developed market as record stimulus from the Bank of Japan improves the outlook for growth. Investments in Japanese equity funds climbed by the most in May since the Investment Trusts Association started compiling such data in March 2010.
US$8.5 trillion
Households held in deposits as of March
related credit growth and house price inflation, thereby reducing the risk of a substantial downward correction in house prices that would damage the financial sector and the broader economy,” said RBNZ governor Graeme Wheeler in the September 12 monetary statement. By his own admission, Mr Wheeler does not know if the measure will work and what impact it might have, although he has said the bank does not want to cool the housing market by raising its official cash rate because it might fuel buying of an already elevated New Zealand dollar. Median house prices were at a record in August, having risen 9.5 percent over the year, but in the biggest city, Auckland, where supply is heavily constrained, prices rose 17.9 percent. To some observers the RBNZ’s move is more like a policy stab in the dark, to cool a moderate housing market with two hot spots – Auckland and earthquake-damaged Christchurch. “The Reserve Bank of New Zealand has moved into the realms of experimentation with its macroprudential prescription,” said Stephen Toplis, the Bank of New Zealand’s head of research. The new rules, which apply only to retail banks, do not ban lending to home buyers with less than a 20 percent deposit. But banks, which had as much as 60 percent of new mortgages in such loans, have all but turned off the tap, and are charging a higher rate of interest compared to those with big deposits.
“The tax break could be a catalyst for a change in attitude toward investment, which is more necessary than ever given the aging society and expected inflation,” said Naoki Kamiyama, chief equity strategist at Bank of America Corp’s Merrill Lynch unit in Tokyo. “Coupled with the government’s policies to get the country out of deflation, the programme will promote the shift of people’s money to stocks.” While Japan’s pool of retirement savings outstrips that of any other nation, it’s not growing fast enough. The nation’s 2010 population of 127 million was the world’s oldest and will shrink 17 percent by 2055, the fastest decline among developed economies, according to United Nations data. Mr Abe is caught between trying to curb a national debt that the International Monetary Fund estimates will reach 245 percent of gross-domestic product this year and funding pensions. The government projected in 2009 that the 140 trillion yen set aside for 34 million workers will run out by 2031.
Tax-free investing The NISA system, based on the U.K.’s Individual Savings Accounts, is scheduled to start in January and run through 2023. It allows taxfree investment of the equivalent of about US$10,000 a year in stocks, exchange-traded funds and investment trusts, while bonds and
Topix index has surged 42 percent this year
currencies are not covered. The tax exemption lasts five years and compares with levies as high as 20 percent outside the plan. The U.K. plan, which began in 1999, allows as much as 11,520 pounds (US$17,400) in tax-free investment each year. There were 2.9 million active accounts as of September 2012, according to government figures. Mr Abe’s government said in a growth strategy report published in
January that the NISA programme is designed to help Japan’s households boost their retirement savings and expand the flow of funds necessary for the country’s economic growth. Preliminary account applications before the official enrolment period starting today had reached 3.2 million by August 9, according to a survey of 128 brokerages conducted by the Japan Securities Dealers Association. Bloomberg News
14 14
October 1, 2013 April 19, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange)
Max 55.45
average 54.7
Max 49.25
Min 54.25
average 48.437
Last 54.4
Min 47.9
Last 47.95
55.60
82.20
55.25
81.75
54.90
81.30
54.55
80.85
25.7
54.20
Max 82.1
average 81.520
22.0
48.95
21.8
48.60
21.60
48.25
21.4
47.90
Max 21.95
average 21.779
PRICE
DAY %
YTD %
(H) 52W
101.73
-1.108194809
8.825417202
111.3399963
85.79000092
BRENT CRUDE FUTR Nov13
107.66
-0.892939335
2.299505891
115.7599945
96.19999695
GASOLINE RBOB FUT Oct13
264.8
-1.053732905
1.771782159
298.210001
246.6799974
911.25
-1.59287257
0.80199115
980.25
837
3.536
-1.476734466
-5.580774366
4.59400034
3.281000137
297.18
-0.612019665
-0.638603765
322.8999853
276.1999846
GAS OIL FUT (ICE) Nov13 NATURAL GAS FUTR Nov13 NY Harb ULSD Fut Oct13 Gold Spot $/Oz
1341.65
0.3568
-19.3943
1796.08
1180.57
Silver Spot $/Oz
21.849
0.2698
-27.4361
35.365
18.2208
Platinum Spot $/Oz
1423.5
0.2112
-6.2099
1742.8
1294.18
Palladium Spot $/Oz
731.69
0.1972
4.5779
786.5
587.4
LME ALUMINUM 3MO ($)
1840
0.987925357
-11.23974916
2184
1758
LME COPPER 3MO ($)
7300
0.675768859
-7.956121548
8379.75
6602 1811.75
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Nov13 CORN FUTURE
Min 21.3
Last 21.8
(L) 52W
WTI CRUDE FUTURE Nov13
LME ZINC
Dec13
1907
0.474183351
-8.317307692
2230
13985
1.157323689
-18.02461899
18920
13205
15.38
-0.12987013
-0.227051573
16.65000153
14.77000046
454.25
0.055066079
-24.26010838
647
445.75
WHEAT FUTURE(CBT) Dec13
680.75
-0.32942899
-17.0575693
913
635.5
21.2
SOYBEAN FUTURE Nov13
COUNTRY MAJOR
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
Max 25.95
average 25.666
Min 25.15
Last 25.75
25.1
26.9
26.7
26.5
Max 26.9
average 26.591
Min 26.3
Last 26.45
26.3
1314.25
-0.416745596
0.882748033
1409.5
1162.5
113.8
0.087950748
-27.26110578
200
113.5
SUGAR #11 (WORLD) Mar14
17.74
0
-13.79980564
22.14999962
16.69999886
ARISTOCRAT LEISU
87
0.427103775
10.49022098
93.72000122
74.34999847
CROWN LTD
COTTON NO.2 FUTR Dec13
World Stock Markets - Indices COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
15258.24
-0.4570631
16.43832
15709.58
12471.49
NASDAQ COMPOSITE INDEX
US
3781.594
-0.1540096
25.23851
3798.76
2810.8
FTSE 100 INDEX
GB
6463.04
-0.7619007
9.583727
6875.62
5605.589844
DAX INDEX
GE
8574.48
-1.00479
12.63848
8770.1
NIKKEI 225
JN
14455.8
-2.06144
39.06253
HANG SENG INDEX
HK
22859.86
-1.496012
CSI 300 INDEX
CH
2409.037
TAIWAN TAIEX INDEX
TA
KOSPI INDEX
SK
S&P/ASX 200 INDEX
NAME
YTD %
(H) 52W
(L) 52W
0.9325 1.6152 0.9055 1.3506 97.94 7.9867 7.7544 6.121 62.63 31.29 1.2555 29.63 43.475 11427 91.329 1.22287 0.83614 8.2671 10.7863 132.28 1.03
0.0859 0.0806 0.0442 -0.1183 0.3063 0.0063 -0.0026 -0.0392 -0.2116 0.1278 0.0796 -0.2126 -0.253 -1.2514 0.2256 0.1791 0.1985 -0.0702 -0.0046 0.4385 0
-10.1465 -0.1484 1.0933 2.3958 -12.089 -0.0438 -0.049 1.7906 -12.1906 -2.2691 -2.716 -2.0148 -5.6814 -14.2995 -2.1921 -1.2585 -2.4781 -0.6 -2.3725 -14.1442 -0.0097
1.0599 1.6381 0.9839 1.3711 103.74 8.0111 7.7664 6.3005 68.845 32.48 1.2862 30.228 44.82 11730 105.433 1.265 0.88151 8.4957 10.9254 134.95 1.032
0.8848 1.4814 0.9021 1.2662 77.79 7.9818 7.7498 6.1064 51.3863 28.56 1.2152 28.913 40.54 9563 79.408 1.20302 0.79424 7.8281 10.1113 99.79 1.0289
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
4.62
0.4347826
15.55
-1.892744
VOLUME CRNCY
46.66666
4.7
2.56
2201979
45.73571
16.08
9.01
1260157
AMAX HOLDINGS LT
1.31
0
-6.42857
1.72
0.75
1149900
24.9
-0.9940358
3.3195
28
22.85
8356772
CENTURY LEGEND
0.43
-1.149425
62.26416
0.56
0.23
3276000
CHEUK NANG HLDGS
6.57
0.4587156
9.682809
6.74
3.82
32400
CHINA OVERSEAS
22.85
-0.867679
-1.082253
25.6
17.7
18155506
CHINESE ESTATES
17.7
0.6825939
57.39562
18.12
9.337
34500
CHOW TAI FOOK JE
11.1
-0.7155635
-10.7717
13.4
7.44
3512800
EMPEROR ENTERTAI
3.51
0
85.71429
3.56
1.43
1475000
FUTURE BRIGHT
2.56
-1.538462
111.2166
2.76
1.103
1166000
GALAXY ENTERTAIN
54.4
-1.00091
79.24217
56
24.1
9392110
HANG SENG BK
126.5
-0.2365931
6.571191
132.8
110.6
1693297
6950.53
HOPEWELL HLDGS
25.95
0
-21.95489
35.3
23.2
1089902
15942.6
8488.14
HSBC HLDGS PLC
84.35
-1.171646
3.751534
90.7
72.3
14750402
0.8957063
23944.74
19426.35938
HUTCHISON TELE H
3.36
-1.754386
-5.617976
4.66
2.98
6388000
0.587314
-4.51514
2791.303
2023.171
LUK FOOK HLDGS I
24.2
-1.626016
-0.8196706
30.05
16.88
1904000
MELCO INTL DEVEL
20.8
-0.2398082
130.8546
21.2
6.55
3380000
8173.87
-0.6902224
6.161051
8439.15
7050.05
MGM CHINA HOLDIN
25.75
2.18254
93.92573
26
12.236
7655621
1996.96
-0.7376479
-0.004511048
2042.48
1770.53
MIDLAND HOLDINGS
3.15
-1.5625
-14.86487
5
2.68
1562000
NEPTUNE GROUP
0.19
3.825137
25
0.23
0.131
85240000
NEW WORLD DEV
11.66
-1.52027
-2.995012
15.12
9.98
16308564
SANDS CHINA LTD
47.95
-1.641026
41.23711
49.8
26.35
10865718
SHUN HO RESOURCE
1.68
-0.591716
20
1.92
1.19
62200
4.35
0
3.818614
4.65
2.97
3450102 17806145
5218.877
-1.661635
12.25926
5314.3
4334.3
ID
4337.282
-1.953944
0.477107
5251.296
3837.735
FTSE Bursa Malaysia KLCI
MA
1776.09
5.15942
1826.22
1590.67
NZX ALL INDEX
NZ
996.157
-0.8780265
12.93618
1005.231
835.827
SHUN TAK HOLDING
PHILIPPINES ALL SHARE IX
PH
3758.23
-2.161276
1.601793
4571.4
3440.12
SJM HOLDINGS LTD
Euromoney Dragon 300 Index Sin
DAY %
BOC HONG KONG HO
AU
JAKARTA COMPOSITE INDEX
PRICE
Macau Related Stocks
COFFEE 'C' FUTURE Dec13
NAME
80.40
Last 80.4
25.4
Currency Exchange Rates
NAME
METALS
Min 80.4
49.30
Commodities ENERGY
26.0
SI
618.84
0.51
-0.36
NA
NA
STOCK EXCH OF THAI INDEX
TH
1386.42
-2.191903
-0.3958539
1649.77
1260.08
HO CHI MINH STOCK INDEX
VN
492.63
1.23713
19.07041
533.15
372.39
Laos Composite Index
LO
1309.38
0.7827834
7.788304
1455.82
1038.79
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
21.8
2.347418
22.83311
22.382
15.835
SMARTONE TELECOM
10.28
-0.9633911
-26.98864
16.22
9.97
2786502
WYNN MACAU LTD
26.45
0
26.25298
26.95
19
10060914
ASIA ENTERTAINME
3.83
0.5249344
36.07216
4.7647
2.4835
32924
BALLY TECHNOLOGI
73.01
-1.775864
63.2968
76.3
43.16
526885
BOC HONG KONG HO
3.23
0
5.211729
3.6
2.99
6665
GALAXY ENTERTAIN
7.1
0.8522727
78.84131
7.16
3.11
1900
INTL GAME TECH
19.23
-6.966618
35.70924
21.2
12.37
9231434
JONES LANG LASAL
87.95
-0.1929187
4.777219
101.46
72.56
267279
LAS VEGAS SANDS
65.88
-1.524664
42.72097
67.351
37.8353
5321310 2150543
MELCO CROWN-ADR
31.6
-0.8160703
87.64845
32.24
12.74
MGM CHINA HOLDIN
3.22
-0.617284
83.96937
3.29
1.5895
13800
MGM RESORTS INTE
20.22
-0.24667
73.71134
20.41
9.15
6127585
SHFL ENTERTAINME
22.97
-0.08699435
58.41379
23.09
12.35
827972
SJM HOLDINGS LTD
2.76
-1.075269
21.17934
2.9481
2.0508
21780
WYNN RESORTS LTD
158
-1.08927
40.45693
159.85
103.0933
788222
AUD HKD
USD
Hang Seng Index NAME
PRICE
DAY %
VOLUME
36.45
-2.016129
23285171
CHINA UNICOM HON
ALUMINUM CORP-H
2.88
0.3484321
12619128
BANK OF CHINA-H
3.54
-1.117318
312501816
5.7
-2.229846
26590478
BANK EAST ASIA
32.85
-1.203008
3763514
BELLE INTERNATIO
11.26
-3.760684
17644000
24.9
-0.9940358
8356772
AIA GROUP LTD
BANK OF COMMUN-H
BOC HONG KONG HO
NAME
PRICE
DAY %
VOLUME
12.1
-0.1650165
26226488
NAME POWER ASSETS HOL
PRICE
DAY %
69.4
2.586844
CITIC PACIFIC
10.06
1.309164
10595185
8818996
SANDS CHINA LTD
47.95
-1.641026
10865718
CLP HLDGS LTD
63.15
-1.018809
4129590
SINO LAND CO
11.42
-0.1748252
8025667
CNOOC LTD
15.78
-1.251564
64610647
SUN HUNG KAI PRO
105.5
-1.769088
3605450
COSCO PAC LTD
11.86
-3.889789
10358032
SWIRE PACIFIC-A
92.9
-0.5353319
1124243
ESPRIT HLDGS
12.42
2.985075
7649091
TENCENT HOLDINGS
406.8
-2.632839
3690132
26.4
-0.3773585
4136917
TINGYI HLDG CO
20.55
-1.909308
6054570
11.78
-1.174497
11619780
67.2
-2.890173
5963029
HANG LUNG PROPER
15.2
-0.3931848
4118675
HANG SENG BK
126.5
-0.2365931
1693297
WANT WANT CHINA
118.1
-2.396694
3614645
HENDERSON LAND D
47.9
-1.74359
2880272
WHARF HLDG
CHINA COAL ENE-H
4.64
-1.694915
45654628
HENGAN INTL
90.7
-1.945946
1624200
CHINA CONST BA-H
5.97
-1.485149
251073449
18.66
0.1072961
8526997
CHINA LIFE INS-H
20.1
-2.189781
35019114
HONG KONG EXCHNG
124.3
-1.035032
2396637
CHINA MERCHANT
28.2
-2.92599
4702043
HSBC HLDGS PLC
84.35
-1.171646
14750402
CHINA MOBILE
86.65
-1.701645
17051334
HUTCHISON WHAMPO
92.9
-1.327669
5611511
CHINA OVERSEAS
22.85
-0.867679
18155506
IND & COMM BK-H
5.41
-2.34657
265765811
CHINA PETROLEU-H
6.07
-1.938611
93487098
LI & FUNG LTD
11.28
-1.052632
17145617
CHINA RES ENTERP
24.65
-1.004016
2269059
30.7
-0.8077544
2010369
CATHAY PAC AIR CHEUNG KONG
VOLUME
HONG KG CHINA GS
MTR CORP
CHINA RES LAND
22.05
-0.4514673
5020000
NEW WORLD DEV
11.66
-1.52027
16308564
CHINA RES POWER
18.44
0.5452563
7344820
PETROCHINA CO-H
8.56
-1.722158
67957236
CHINA SHENHUA-H
23.6
-1.871102
22496832
PING AN INSURA-H
57.65
-1.87234
10567894
MOVERS
5
45
23310
INDEX 22859.86 HIGH
23300.79
LOW
22859.86
0
52W (H) 23944.74 (L) 19426.35938
22850
26-September
30-September
15 15
October 2013 April 19,1,2013
Opinion
Shanghai free-trade zone wires is a symbol, not a threat Business
Leading reports from Asia’s best business newspapers
Inquirer Business
William Pesek
Bloomberg View columnist
Four of the most eminent economists in the Philippines have criticised the minimum wage law for perpetuating the twin problems of unemployment and poverty amid rapid economic growth. The economists – Gerardo Sicat, Gilbert Llanto, Calixto Chikiamco and Raul Fabella – have called for policies that will lower the cost of labour and make it more competitive to boost investments and job creation. Mr Sicat said the high wage levels was a key reason why the country loses out in the competition for investments against its neighbours.
China Daily Beijing is still awaiting a signal from Brussels on the launch of longawaited negotiations for an investment agreement that would expand bilateral market access, said a senior Chinese diplomat. “We’re prepared, but we’re still waiting for the European Union to say it is ready to talk,” the diplomat surnamed Zhang was quoted as sayinh. “We have not agreed on timing, although both sides are committed to moving as soon as possible.” Zhang said that the EU is still waiting member states’ agreement to move ahead. It began seeking such agreements in May.
Bangkok Post Thailand will probably miss opportunities to tap low loan rates to finance the 2-trillionbaht (US$63.7 billion) infrastructure investment if the megaprojects are delayed, a senior Finance Ministry official said. Countries could miss out on cheap loans as yield curves in bond markets are likely to spike when the U.S. Federal Reserve sets a clear timeframe for stimulus tapering, said Ekniti Nitithanprapas, deputy director-general of the Fiscal Policy Office. “We should grasp this opportunity for funding infrastructure investment,” he added.
Myanmar Times Japanese carmaker Mazda Motor Corp inked a deal with domestic firms Automobile Alliance and Cycle and Carriage Automobile Myanmar to import its new vehicles to the Myanmar market, though rivals claimed domestic interest in the brand falls below its competitors. With sole distribution rights, the two firms aim to launch sales and sell spare parts through a permanent Yangon showroom to be opened in 2014.
H
ong Kong is dead. Economic roadkill on China’s way to world domination. Starting last weekend, a free-trade zone opening in Shanghai will supplant the former British colony as the gateway to the world’s most dynamic economy. That’s the chatter in the city of 7 million people, where some business leaders fear becoming China’s Chicago, long ago eclipsed by New York as a financial and cultural centre. Shanghai’s new free-trade zone, opened for business on Sunday on 11 square miles of land, will offer freer yuan trading, more flexible interest rates, relaxed restrictions on foreign money, and maybe even access to Twitter, Facebook and other websites banned across China. None other than Li Ka Shing, Asia’s richest man, has warned of an existential threat. Shanghai “will affect Hong Kong heavily,” the property magnate recently told local news media, and the city must act immediately to raise its competitiveness. That warning is as intriguing as it is silly. To spark an Adam Smith moment in Shanghai, China’s Communist Party would, virtually overnight, have to embrace a variety of things it has avoided. Leaders would have to create something approaching a firstworld legal system and sound rule of law, ensure social justice, force politically connected companies to compete on their own, and allow unfettered free speech and access to websites such as Bloomberg.com and NYTimes.com, which have been banned for more than a year for daring to run stories about official corruption. China would have to tolerate Google and stop rerouting anyone typing “Tiananmen
Square crackdown” to bland tourism brochures.
Lower hopes Can a regime really step back and let traders and financiers run amok when its leadership model is based entirely on control, stability and a playing field level only for princelings and state-owned enterprises? Don’t get your hopes up. In fact, there’s reason to worry a Shanghai trade zone that’s free in name only will exacerbate China’s financial woes. This Shanghai zone could well sap momentum and the will to implement more sweeping reforms nationally, which China desperately needs. Another risk China might not appreciate is the danger of welcoming capital flows of the kind that overwhelmed Southeast Asia in 1997. To maintain 7.5 percent growth, as Premier Li Keqiang has pledged, means more borrowing by state-owned companies. That’s why it’s highly unlikely Beijing will allow complete yuan convertibility and full-blown interest-rate deregulation. “This must increase the uncertainty of capital inflows and outflows,” says Michael Pettis, a finance professor at Peking University. “The additional point, however, is that as debt rises, so does expected volatility. Increasing uncertainty at the same time you increase the volatility of the system’s response to changes is a very risky business. The more debt there is, the bigger the reaction of the financial sector to overwhelming inflows or outflows of capital.” Leaders are also risking a flight of capital from other parts of the country. China can’t contain free capital flows within a specific geographic region just a taxi ride away from the nation’s
financial capital. The zone will be viewed immediately as a kind of “green zone” for the elite who became millionaires and billionaires though illicit land grabs, old-fashioned rentseeking and insider trading. Wouldn’t this create fresh avenues for corruption among party officials? State-owned banks outside the zone also may experience runs on balance sheets.
Opening up If China is going to open up, it should do so nationally and evenly. A freed yuan would accelerate and deepen China’s integration with the world economy, create the bigger service sector China needs to wean itself off exports, enable markets
For the moment Hong Kong can breathe easy. That’s not to say the city doesn’t need to continue raising its game as an economic and cultural centre
to better price risk, reduce trade frictions, and insulate China from U.S. charges of currency manipulation. Far from achieving any of these goals, this Shanghai halfmeasure is a distraction. Beijing will also have some explaining to do if 1.3 billion Chinese hear that a bunch of privileged foreigners in their financial green zone can tweet away and click “like” on the Facebook pages that 20-something mainlanders can’t access. So then, what is the real motivation here? That China is being so vague about what its Shanghai zone will offer and working on such a tight schedule to open it sure does make one wonder. Surely, political symbolism is part of the motivation. As they try to hone their reformist chops, who better for Li and President Xi Jinping to channel than Deng Xiaoping, who in the 1980s experimented with the Shenzhen Special Economic Zone? The Shanghai experiment also seems aimed at Hong Kong’s stubborn pro-democracy movement, which is set on pushing the case for the universal suffrage Beijing has no intention of granting. “It’s leverage over Hong Kong,” says Andy Xie, an independent economist with past stints at the World Bank and Morgan Stanley. “If Hong Kong becomes ungovernable, the Shanghai free-trade zone will become real. Now, it is designed as a bird in a cage, as all China’s reforms have been.” For the moment Hong Kong can breathe easy. That’s not to say the city doesn’t need to continue raising its game as an economic and cultural centre. But with apologies to Mark Twain, rumours of its demise are greatly exaggerated. Bloomberg View
16 16
October 1, 2013 April 19, 2013
Closing Japan to raise sales tax: final draft
Troika takes breather after Greek progress
Japan’s Prime Minister Shinzo Abe will announce that he is raising the nation’s sales tax in April while cushioning the economy with a US$50 billion stimulus package, according to a final draft seen by Reuters yesterday. The tax increase to 8 percent from 5 percent, to be announced today, is the government’s first attempt in more than 15 years to rein in Japan’s runaway public debt. The stimulus package will include public works spending for the 2020 Tokyo Olympics, tax breaks for corporate capital spending and an early end to a corporate tax add-on that funds reconstruction from the 2011 earthquake and tsunami.
Greece’s international lenders called a temporary halt to their latest mission to Athens, saying they had made good progress and expected to resume talks with the government soon. The pause in talks between the two sides had already been flagged at the end of the first week of work by the inspectors, who are seeking to determine the size of a third bailout for Greece and what Athens will have to do for it. “To allow completion of technical work, policy discussions in Athens will pause, and are expected to resume in the coming weeks,” the lenders said in a joint statement.
Asian stocks fall on U.S. budget concern
Stocks fell trimming their biggest monthly gain since 2012
an economic-support package. South Korea’s Kospi index lost 0.7 percent and New Zealand’s NZX 50 Index dropped 1 percent. Australia’s S&P/ASX 200 Index fell 1.7 percent, paring its biggest quarterly gain in four years as record-low interest rates boost profits. Taiwan’s Taiex Index slipped 0.7 percent and Singapore’s Straits Times Index fell 0.8 percent. Hong Kong’s Hang Seng Index d ro pp ed 1 .5 pe rc ent . C hi na ’ s Shanghai Composite Index rose 0.7 percent. Hong Kong’s markets are shut today and tomorrow for a holiday, while yesterday was the last day of trading for mainland markets until October 8.
Budget impasse
South Korea’s Kospi index lost 0.7 percent
A
sian stocks fell, with the benchmark index paring its biggest monthly gain since 2012, on concern the U.S. government is headed for a shutdown amid a budget stalemate. The MSCI Asia Pacific Index dropped 1.5 percent to 138.65 late afternoon in Tokyo, with all 10 industry groups on the gauge falling. It’s headed for a 6.5 percent increase this month, the most since January 2012, and is up 6.2 percent this quarter. Even if Congress resolves the budget fight by today’s deadline, U.S. lawmakers would move to the
next fiscal dispute over raising the US$16.7 trillion debt ceiling. “There’s no agreement among the government at the moment, and if they can’t agree on the budget, there’s no way they are going to agree on the debt ceiling,” said Andrew Sullivan, director of sales trading at Kim Eng Securities in Hong Kong. “It’s the end of quarter and so you may see people looking to sell into the recent strength, locking gains, on expectations the U.S. government does shut down.” The September gains pushed valuations on the Asia-Pacific
measure to 13.7 times estimated earnings as of September 27 from 12.7 at the end of August, according to data compiled by Bloomberg. That compares with 15.4 for the Standard & Poor’s 500 Index and 14.3 for the Stoxx Europe 600 Index, the data show. Japan’s Topix index slumped 1.9 percent as the yen gained, weighing on exporters, and a report showed industrial production fell more than expected in August. Prime Minister Shinzo Abe is scheduled to speak today on his plans for a sales-tax increase and
Futures on the S&P 500 Index slipped 0.8 percent yesterday after the gauge declined 0.4 percent on Friday. Congress is leaving itself just one day to end a budget stalemate that raises the risk of the first government shutdown in 17 years. The House of Representatives voted 231-192 on Sunday to stop many of the Affordable Care Act’s central provisions for one year, tying it to an extension of U.S. government funding through December 15. Were the Senate to reject the bill yesterday U.S. time, the government could be shut down from today. Companies that do business in the U.S. dropped. Toyota, Asia’s biggest carmaker, declined 2.6 percent to 6,270 yen. Honda Motor Co, a Japanese carmaker that generates 47 percent of its sales in North America, fell 2.7 percent to 3,735 yen. James Hardie Industries SE, a building materials supplier that gets about 70 percent of sales from the U.S., slid 2.1 percent to A$10.68 in Sydney. Bloomberg News
Eurozone inflation at three-year low Price slows more than forecast on energy, food
E
uro-area inflation slowed more than economists forecast in September, led by falling energy prices, and remained below the European Central Bank’s 2 percent ceiling for an eighth month. Consumer prices rose an annual 1.1 percent after a 1.3 percent increase in August, the European Union’s statistics office in Luxembourg said in a preliminary estimate yesterday. That’s the lowest level since February 2010. The median forecast in a Bloomberg News survey of 34 economists was for 1.2 percent growth. The ECB forecasts that inflation
will average 1.5 percent this year and 1.3 percent in 2014. ECB President Mario Draghi reaffirmed his pledge last week to keep key interest rates low for an extended period of time “based on a subdued outlook for inflation” and “broadbased weakness” in the economy. The central bank is forecast to hold its benchmark rate at a record low 0.5 percent tomorrow, a separate Bloomberg survey shows. “Against this backdrop, we would expect ECB President Draghi to reaffirm on Wednesday the ECB’s commitment to keep interest rates at record lows for an ‘extended period,’
while keeping the door to a further rate cut or a new LTRO wide open,” said Martin van Vliet, an economist at ING Bank NV in Amsterdam. Energy prices in the euro area fell 0.9 percent after a 0.3 percent decline in August, yesterday’s report showed. The cost of food, alcohol and tobacco increased 2.6 percent after a 3.2 percent gain a month earlier. The core inflation rate, which excludes volatile food and energy costs, was 1 percent. Inflation in Germany, Europe’s largest economy, was unchanged at 1.6 percent in September, data on Friday showed. The Bundesbank
said last week that slowing inflation is helping to support an “extraordinarily good” consumer climate in Germany. Euro-area economic confidence increased more than economists forecast this month to the most in two years. An index of services rose to the highest since June 2011, signalling a strengthening recovery. Economists in a Bloomberg survey published this month forecast euro-area economic growth of 0.2 percent this quarter and next after 0.3 percent expansion in the three months through June. Bloomberg News