Macau Business Daily, April 11, 2013 by Business Daily

Year II Number 259 MOP 6.00 Thursday April 11, 2013 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: Vitor Quintã www.macaubusinessdaily.com

Air quality ‘below standard’ in most casino smoking areas T

Investors fail to connect with Viva Macau auction The auction of a 99.9 percent stake in downed budget airline Viva Macau flopped yesterday, with no bids during the government’s attempt to recoup money it loaned. Viva Macau was declared bankrupt in September 2010. A report prepared by the court-appointed administrator estimated the airline’s debts were about US$38 million but did not identify any assets.

here were air quality problems in the smoking areas of almost two-thirds of the city’s casinos and slot machine parlours, the Health Bureau announced yesterday. The industry has been told to improve or face possible reduction in the scale of existing smoking zones. That could have negative financial consequences for the casinos involved. A report from Morgan Stanley in December estimated eight in ten Macau gamblers are smokers, compared to only three or four in ten in Australia. Casinos should submit their own air quality reports within four weeks and then the bureau will send staff to carry out checks in the problematic venues, the Health Bureau said. More on page 7

Page 4

I SSN 2226-8294

Brought to you by

Poor weather hits light rail works

2013-04-11

2013-04-12

2013-04-13

15˚ 18˚

14˚ 17˚

15˚ 19˚

The foundations of the Light Rapid Transit railway depot in Cotai are ready but over schedule. The delay has been blamed on ‘poor weather’, the Transportation Infrastructure Office confirmed. Carriages supplied by Japanese giant Mitsubishi Heavy Industries Ltd will only arrive in Macau next year, meaning trial operations will be delayed until at least then.

22050

Page 5

21970

HANG SENG INDEX

22010

Zhuhai hotels MOP1,000 cheaper on average Okada facing criminal inquiry in United States Kazuo Okada – a former director of Wynn Resorts Ltd and Wynn Macau Ltd – is officially under criminal investigation in the United States according to a Nevada court filing lodged by federal authorities. It relates to a US$2.3 billion (18.4 billion patacas) Philippines casino project he is planning, and alleged possible breaches of the U.S. Foreign Corrupt Practices Act.

Page 6

21930

21890

21850

April 10

Hotel rooms in neighbouring Zhuhai cost only a third of nightly rates in Macau according to a hospitality industry survey. The latest Greater China hotel quarterly review by consultant HVS found Macau hotels charged on average 1,486 patacas (US$186) per night in the fourth quarter of last year. Zhuhai hotels asked only 355 yuan (453 patacas). But few big spenders will opt for budget cross-border accommodation, an expert told Business Daily.

Page 3

Pan democrats urge clarity on association handouts

Lift safety guidelines are due out this month Page 2

Page 4

HSI - MOVERS Name

%Day

CHINA LIFE INS-H

4.23

HUTCHISON WHAMPO

4.19

CHINA RES POWER

3.92

CHINA RES LAND

3.37

CHINA OVERSEAS

3.11

BANK EAST ASIA

-0.84

WANT WANT CHINA

-1.90

CATHAY PAC AIR

-2.15

CHINA RES ENTERP

-3.20

SWIRE PACIFIC-A

-1.47

Source: Bloomberg

2 |

business daily April 11, 2013

macau opinion

Pause for thought

Cotai lift accident prompts drafting of new safety rules Government accelerates plans to regulate lift and escalator maintenance after 34 Four Seasons workers were hospitalised Stephanie Lai

sw.lai@macaubusinessdaily.com

José I. Duarte Economist

very time there is news of a new strain of influenza virus in the mainland, there are many who cannot avoid feeling a chill run down their spine. Anyone who was around when the severe acute respiratory syndrome (SARS) epidemic derailed the economy in 2003 is acutely aware of how sensitive Macau is to these types of calamities. In the second quarter of 2003, the economy was badly battered by the ill winds of that epidemic. An economy that was acclimatising to rising tourist numbers was suddenly faced with a drop of 31 percent in that quarter and, God forbid, even posted a loss of tax revenue from gambling. The consumer price index dipped into negative territory, retail sales, employment and GDP almost came to a standstill. It was a shortlived crisis and the recovery was swift. Hopefully, this new strain of the bird flu virus will be less virulent than SARS and that the health authorities have learned their lessons. There are currently grounds to hope that this outbreak will not evolve into a serious crisis. The H7N9 strain of bird flu was identified relatively quickly and mainland officials seem to have gone public with their findings early. SARS’ virulence was compounded by a policy of concealment that allowed the epidemic to fester for months and for hundreds of people to become infected before any serious alarm was raised or action taken to contain it. By then, the openness of our world and ease of travel had carried the infection well beyond its origins in Guangdong. Also, there is no evidence of the H7N9 strain being transmitted between humans. Although the strain’s source and its mode of transmission are yet to be established, the first results of screening among those who were in contact with infected patients give grounds for optimism. The suggestion is human transmission is, at the very least, difficult.

Cautious optimism The current strain is more easily detected in affected birds, which become visibly ill. That helps facilitate the identification of potential sources and containment measures. Finally, the health authorities, both in the mainland and in neighbouring regions are, in principle, better equipped now than they were then, and under the gaze of an attentive and better informed public. Alertness is certainly paramount but these facts give us justifiable grounds for cautious optimism. In the end, unless this outbreak takes a sharp turn for the worse, its economic and social impact is likely to be minor. The current situation should remind the public that the economy is increasingly dependent on a single activity – gambling – and associated businesses, and how they are increasingly dependent on flows from the mainland, including food, tourists and money. As more and more resources are attracted to those activities, and fewer independent small and medium companies can resist the problems of running their businesses, the economy becomes increasingly reliant on the success of its golden-egg avian. Benevolent policies from Beijing, not to mention, possibly, a blind eye to less conventional practices, have ensured the undiminished laying of riches. But then, there are events that no one can control, be it a virulent avian flu, a less than benign regional conflict, natural catastrophe, a successful competitor or any other event our imagination is not prepared to picture. Unusual events are bound to happen. If the big one strikes, we may find the economy is less resilient than we would like to admit. God forbid.

Four Seasons hotel staff were hospitalised after they were trapped inside a lift for about 20 minutes earlier this week (Photo: Manuel Cardoso)

he government will roll out a set of guidelines controlling regular lift inspections later this month, Secretary for Land, Public Works and Transport Lau Si Io said yesterday. “This month we will contact the engineering sector and introduce a set of monitoring guidelines for them to follow,” he told reporters after a meeting of the Legislative Assembly. “Whether the monitoring mechanism will be legislated, we will see how well the implementation of the guidelines goes. We do not rule out [drafting] legislation on it.” Mr Lau said the government had yet to decide if it would set up a

standalone body to monitor lift and escalator safety. There is no compulsory monitoring of escalators and lifts here. Mr Lau was questioned yesterday by reporters after workers were trapped in a lift at the Four Seasons Hotel in Cotai. The Fire Services said 34 workers were hospitalised after being trapped inside a lift for about 20 minutes on Tuesday. The lift reportedly lost speed while ascending to the hotel’s first floor before it plummeted to the ground floor. Injured staff reported headaches and “palpitations” from being trapped in side the stuffy lift, the

Progress in land swap rules: legislators Ilha Verde land swap still unresolved, government acknowledges Stephanie Lai

sw.lai@macaubusinessdaily.com

evelopers could only ask for a land swap within the same district if the government asks to take away part the granted plot for public use, namely for road construction, according to the land law revision. “Under these circumstances the developers are only allowed to swap for a plot within the same district as their development project,” said Kwan Tsui Hang, head of the Legislative Assembly’s first standing committee. “And the plot to be swapped should be of the same or smaller size as their original plot,” she told media yesterday after a meeting with government representatives. But if the government decides to take away all of the land to proceed with a public interest

project the rules change. “In that case the land to be swapped could be a bigger one, though the area should not be more than 50 percent bigger than the original plot granted to the developer.” “And, the developer has to pay a premium for the bigger land,” she added. Land swapping principles and procedures have been heavily criticised by legislators in the past. One notable example was the land swap agreement with developer Pak Lei Sun Development Ltd, a subsidiary of Polytec Asset Holdings Ltd, for Ilha Verde sites where public housing was eventually built. The said sites were granted in 1989 by the Portuguese administration to the developer for

Macau Gaming Enterprises Staff’s Association told Business Daily. The lift’s maximum capacity is 21 people. “The staff at the hotel used to complain that the lift sometimes halted when ascending or, all of a sudden, the emergency bell would go off, even when there was no overloading,” Choi Kam Fu, the deputy director general of the trade union told Business Daily. The Four Seasons told Business Daily that the elevator’s manufacturer, Schindler Lifts (Macau) Ltd, had checked and fixed the malfunctioning lift. “The elevator is back in normal operation,” it said.

an old neighbourhood revival project. The project never got off the ground and the government eventually took over the land. In a reply to a legislator’s enquiry in 2010 Housing Bureau director Tam Kuong Man confirmed that the government decided to give a parcel the same size as the Ilha Verde plots to Pak Lei Sun. However the exact location of the land plot to be granted to Pak Lei Sun has not been disclosed. “The Ilha Verde land swap case is the one that is left unresolved,” said Ms Kwan, quoting the government. Pak Lei Sun will not get a plot in the same district, she added. Hong Kong developer Kerry Properties Ltd is also waiting to get a plot in one of Macau’s five new reclaimed areas in return for giving up part of the land granted for the Galaxy Macau resort. The committee head noted that the legislators were fairly satisfied with the latest changes to the land swap conditions. “Though some legislators urged the government to make sure it fully discloses land swap procedures for public knowledge,” she said. “There were also voices that questioned if the government is holding too big of a discretionary power over land swap,” she added. The government replied it would “try their best to balance public interest and developers’ rights,” Ms Kwan said.

April 11, 2013 business daily | 3

MACAU Natural gas hike could affect electricity price The government should be “cautious” in considering a hike in natural gas prices, which may push up electricity tariffs, said Companhia de Electricidade de Macau - CEM, SA. Iun Iok Meng, advisor to CEM’s executive committee, told media yesterday they hope the natural gas importer Sinosky Energy (Holdings) Co Ltd and the government could settle this issue soon. Sinosky said earlier this week they were hoping for a price rise in mid-year. Mr Iun also said CEM was looking forward to the natural gas supply resumption this year, which is a cheaper means for electricity production.

Zhuhai hotels are on average about a 1,000 patacas cheaper (Photo: Carmo Correia)

Real-time payments in budget hotel website

Cheap Zhuhai hotels not yet a challenger Hospitality experts say longer border opening hours would have a limited impact on the industry Tony Lai

tony.lai@macaubusinessdaily.com

Tourists could soon be able to pay online for hotel rooms booked in the Macau budget hotels’ website, the online platform administrator told Business Daily. “Right now tourists can reserve rooms in the website but they can only pay the fees after they have arrived, at the frontdesk of the budget hotels,” said Kenny Cheung Kin Chung. “But we are discussing with some companies now on how to improve the website this year so that tourists can pay with credit cards,” said the secretary-general of the Macau Hoteliers and Innkeepers Association. The association set up in November an online platform allowing visitors to reserve a room at one of the city’s budget hotels, with the help of the Macau Government Tourist Office. The website covers 500 rooms out of the city’s 1,500 budget hotel rooms. Mr Cheung said they had so far received “positive feedback” from the hotels and users, but without giving any concrete examples and figures. T.L.

ower room rates in Zhuhai and the possibility of keeping border crossings open for longer would have little effect on the hotel industry here, hospitality experts and an industry insider say. The latest quarterly review of Greater China hotels by consulting firm HVS found the difference in average room rates between hotels here and Zhuhai had reached 1,000 patacas (US$125). A night in a Macau hotel cost an average of 1,486 patacas in the fourth quarter of last year. Across the border, the price was 355 yuan (453 patacas), the report said.

The room rate here is acceptable and the occupancy rate remains very strong Edmund Loi Hoi Ngan, gaming and tourism professor, Macau Polytechnic Institute

The price gap does not surprise the secretary-general of the Macau Hoteliers and Innkeepers Association Kenny Cheung Kin Chung. He told Business Daily that room rates were influenced by factors such as the balance of supply and demand, Macau’s appeal to visitors and inflation. The annual rate of inflation stood at 6.11 percent last year but was 2.6 percent in mainland China. “Macau has a very good tourism image and the central government has also said they want Macau to become a global tourism centre,” Mr Cheung told Business Daily. He said the city had “its own characteristics with elements of West meeting East… and the service management of the hospitality here is at a quite high level, so the visitors will know how to choose”. Two academics also said Zhuhai did not pose a big threat. “It will all depend on the types of customers Macau wants to attract,” said Gao Yan, a tourism professor at the City University of Macau. “High-end travellers usually care about the experience the hotel can provide while customers with limited budgets eye the price.”

Holiday headache Macau Polytechnic Institute gaming and tourism professor Edmund Loi Hoi Ngan said: “Those

who stay overnight in Macau usually have a high spending power. The room rate here is acceptable and the occupancy rate remains very strong”. “One problem in Macau is that the visitors cannot find accommodation during holidays, as well as speculation over the room rates.” Mr Loi was referring to soaring prices charged by hotels during peak periods, such as the Chinese New Year holidays. Three-star hotels were charging more than 2,600 patacas a night during the festival, according to data from the Macau Government Tourist Office. The occupancy rate in January was 82.9 percent, up by nearly 4 percentage points in year-onyear terms. Ms Gao warned that mid-priced hotels with room rates of about 1,000 patacas a night might be concerned when border crossings stay open longer or even around the clock. “They charge visitors at a certain level but most do not provide services matching their standards,” she said. “When the border opens for 24 hours, the mainland will draw some guests away from such hotels.” Chief Executive Fernando Chui Sai On said on Monday the government would strive to open the border around the clock. There was a temporary twohour extension in the operating hours of the Gongbei border

crossing during last week’s threeday Ching Ming festival. Mr Cheung said members of his association were not concerned by the border staying open for longer periods. “It may draw some travellers away but at the same time it also helps bring more people to come and stay here,” he said. Mr Cheung said the city needed more budget hotels to better suit all tourists. Macau had just 1,500 budget hotel rooms in January, accounting for 5.8 percent of the city’s 26,000 hotel rooms, official data show.

When the border opens for 24 hours, the mainland will draw some guests away from such hotels Gao Yan, tourism professor, City University of Macau

4 |

business daily April 11, 2013

macau Second half loss for soccer club owner Birmingham International Holdings Ltd, owner of Birmingham City Football Club in the United Kingdom, expects to record a net loss for the six months ending December 31, 2012. It blames a “decrease on profit on sales of players”. The club is 13th in the Football League Championship, the second tier of English professional football and is BIHL’s main asset. The company’s stock has been suspended from Hong Kong trading since June 2011 following the arrest of its chairman Carson Yeung Ka Sing, a businessman with Macau business interests, on money laundering charges. He faces trial in Hong Kong this month.

Bidders overlook Viva Macau auction The government will look for another way to recoup 212 million patacas loaned to failed airline Tony Lai

tony.lai@macaubusinessdaily.com

he auction of shares in Viva Macau – Sociedade de Aviação Ltda flopped yesterday, with no bids in the government’s attempt to recoup money from the failed airline. The auction of a 99.9-percent stake in the airline was arranged by the Court of First Instance. The stake belongs to Eagle Airways Holdings Ltd, Viva Macau’s major shareholder, and had a face value of almost 25 million patacas (US$3.1 million). The reserve price was about 17.5 million patacas, 70 percent of the face value. The auction lasted less than one minute with no party bidding for a stake in the airline that was grounded in March 2010 after repeated cancellations of flights. Viva Macau was declared bankrupt in September 2010. A report prepared by the court-appointed administrator estimated the airline’s debts were about US$38 million but did not

“There will not be another scheduled auction and the party [the government] will sell the assets through other means,” a court spokesperson told Business Daily. The government could have arranged a second auction with the reserve price reduced to 50 percent of its face value. If that auction failed, a third auction could have been held without a reserve price.

Next move

The low-cost carrier Viva Macau was declared bankrupt in September 2010

identify any assets. Yesterday’s auction was an attempt by the Economic Services Bureau’s Industrial and Commercial Development Fund to recoup 212

Pan-democrats call for subsidy openness

Macau University of Science and Technology received over 128.4 million patacas in subsidies last year

he New Macau Association has urged public bodies to publicise their criteria on granting subsidies. Associations that receive money should also release their financial statements for public supervision,

the pan-democrats said. “The Macau Foundation should be particularly open over how it approves or rejects applications for subsidies as its criteria is the least strict compared to other public bodies like the Social Welfare Bureau and

million patacas in loans granted to Viva Macau in 2008 and 2009. The airline failed to repay all of the five loans. Eagle Airways is the guarantor.

the Education and Youth Affairs Bureau,” said Jason Chao Teng Hei. The New Macau Association president thinks the government should hold a public consultation on criteria for granting subsidies. The group held a press conference yesterday to announce the 10 associations that received the most public money last year. The Macau University of Science and Technology and its affiliated groups top the ranking with 47 subsidies worth over 128.4 million patacas (US$16.05 million), data compiled by the association show. The General Union of Neighbourhood Associations of Macau came second with 91.1 million patacas in 333 subsidies. Macau’s largest labour group, the Macau Federation of Trade Unions, ranked third with 81.6 million patacas. The Women’s General Association of Macau (55.7 million patacas) and the City University of Macau (41.5 million patacas) came next. Mr Chao said the parties receiving public money should publicise their annual accounts and reports on the activities in which the subsidies were used. “There were cases in which three affiliates of a same association applied for government subsidies for the same event,” he said. T.L.

A lawyer representing the Industrial and Commercial Development Fund did not comment on the government’s next move. “I am not in a position to say anything now. I have to discuss with my client first,” the lawyer said. He would not give his name. “This auction is just part of the procedures my client is carrying out.” The Economic Services Bureau did not reply to Business Daily’s inquiries yesterday. The government may opt to keep the stake in Viva Macau as compensation for all or part of the debt. If that happened, the government would become the major shareholder of a now defunct private company that has a lawsuit pending against it. The airline’s suit alleges that Secretary for Transport and Public Works Lau Si Io illegally ordered the city’s flagship carrier, Air Macau Co Ltd, to revoke Viva Macau’s sub-concession to run a low-cost airline in 2010. The Court of Second Instance threw out the case last month, saying Mr Lau had given Air Macau his opinion rather than an order. Viva Macau could take its claim to the Court of Final Appeal, if the bankruptcy administrator gives its permission. Economic Services Bureau director Sou Tim Peng has defended the Viva Macau loans against criticism from Legislative Assembly member José Pereira Coutinho. Mr Coutinho accused officials of negligence and wasting government money in a written inquiry to the government in February. Mr Sou responded in a written statement released last month that the fund had “strictly fulfilled its responsibilities according to the law and prudently utilised its resources”. Mr Sou also leads the board of directors of the Industrial and Commercial Development Fund.

April 11, 2013 business daily | 5

MACAU

Poor weather hits LRT depot works Trials of railway carriages planned for Cotai depot could be postponed Vítor Quintã

vitorquinta@macaubusinessdaily.com

he foundations of the Light Rapid Transit (LRT) railway depot in Cotai are ready but only after a delay caused by poor weather, the Transportation Infrastructure Office confirmed. According to a notice published in Monday’s Official Gazette, the 386-million-pataca (US$48.3 million) construction contract with China Road and Bridge Corp was stretched for another year. The depot foundation “was originally scheduled for completion by the end of year 2012,” the office admitted in an e-mail reply to Business Daily. “However, due to poor weather conditions such as heavy rainstorms and typhoons during the construction period” the works were postponed by “more than a month,” the authorities added. The foundation works were finished in January and the first phase of the depot construction “is basically completed,” the office said. The delay has had “no major impact” on the construction works of the depot superstructure, which

The first phase of the elevated railway’s Cotai section should be completed by 2015 (Photo: Manuel Cardoso)

Macau next year, thus forcing a postponement of the trial run. “The supplier has commenced the production work of the LRT vehicles, with expectation to undergo testing in Japan at the end of this year,” the reply says. The four-cabin trains stretching 47 metres long, 2.8 metres wide and 3.9 metres high and with a capacity for 476 passengers “will be shipped to Macau after completion of a series of testing procedures and approval of acceptance,” the office added. Mitsubishi won the contract worth 4.69 billion patacas to supply the rolling stock and the system for the first phase of the railway system in late 2010. At the time the company was given almost four years to complete all the construction works and after that, two more months of trial runs for the system to begin operation. The launch of the railway system was originally slated for 2008 but it has been successively postponed. The project’s budget has topped 11 billion patacas – almost three-times higher than the initial forecast.

have already begun, it added. The depot includes a test track that will host trials of carriages destined to run on the Light Rapid Transit elevated railway system before the end of the year, office

coordinator Lei Chan Tong said in February. But the office has now hinted that the carriages supplied by Japanese giant Mitsubishi Heavy Industries Ltd will only arrive in

MIN

TO THE MAJ OR 201 BUS 3 Bu INES reco sine g s S AW size nition s Awa ARD r s p S IN to a and fro rogram ds of th

ATIO

NO WO

PEN

ll e THE orga individ m all se for pro Year i REG s u c f n e a M t i s o s l ION aca sion rs. P perm ation s and u a ! a ’ s s pr ls an bus rtici that com anent e i p n d m a esse carr t b i basi i e o pan u r n in sin yo s, s y, o r no . You ca n their or othe the aw ess of a We min ll r n a ar c re eith invi ate er n tivities levant ds is op te y y o in urse o en ou t lf, o minate Macau o be Nom r a y o n p o inat n art o ur c i ions omp ndividu a f it! ope al o a n y. n un ra til Ju ne, 20th , 20 13.

For m ww ore in w.aw form or c onta ardsma ation, p inqu cau l c .com ease vi iries t us sit o @aw ur w ards ebs mac ite a au.c t om

ORGANISED BY:

6 |

business daily April 11, 2013

macau Okada v. Wynn – now the U.S. govt is involved

Okada facing criminal inquiry in U.S. – court filing Feds also conducting criminal investigation into Wynn Resorts’ donation to University of Macau Michael Grimes

michael.grimes@macaubusinessdaily.com

azuo Okada – a former director of Wynn Resorts Ltd and Wynn Macau Ltd – is officially under criminal investigation in the United States according to a state court filing lodged by federal authorities on Monday, U.S. time. The inquiry relates to a US$2.3 b i l l ion ( 18.4 billion p atac as) Philippines casino project he is planning, and alleged possible breaches of the U.S. Foreign Corrupt Practices Act, say the papers. The statute bars payments to foreign officials. The U.S. Department of Justice also noted in the filing that it has been conducting a criminal investigation into Wynn Resorts’ US$135 million donation to the University of Macau Development Foundation. The bequest was announced in May 2011. Mr Okada has said Wynn’s board turned against him for opposing the donation. Mr Okada is a Japanese citizen, and his main known investment vehicle is Universal Entertainment Corp., a company listed on the JASDAQ in Osaka. Business Daily understands however that the U.S. is claiming jurisdictional interest in Mr Okada because

KEY POINTS U.S. criminal probes into Okada’s Philippines deal and Wynn Resorts’ University of Macau donation Okada’s Japanese company Universal Entertainment Corp., ‘cooperating fully’ Wynn Resorts ‘continuing cooperation’ with govt Dept of Justice asking Nevada court for stay of civil hearings in Okada v. Wynn

of his former role as a director of Wynn Resorts Ltd, a company with operations in the U.S., and with the majority of its group revenue coming from Macau operations. The Japanese pachinko billionaire also controls Aruze Gaming America Inc., a business with an office in Las Vegas. The firm is licensed to supply electronic casino equipment including slot machines, to major casino markets including Nevada and Singapore. Aruze equipment has also been approved for use in Macau. Monday’s filing asks for a stay in civil proceedings in Nevada between Mr Okada and Wynn Resorts. There are multiple lawsuits there stemming from the unilateral cancellation by Wynn Resorts in February 2012 of Mr Okada’s near 20 percent stake in the company and his ejection from the Wynn Macau board. Wynn has said in stock market and court filings the reason for the action was that Mr Okada’s conduct in pursuing a Philippines casino scheme had made him “unsuitable” to be a director of Wynn Resorts; involved possible violations of the FCPA; and threatened Wynn Resorts’ Nevada gaming licence. Mr Okada has denied all those claims and countered the shareholding cancellation was to shore up the chairman Steve Wynn’s own position in the company. According to a U.S. stock market filing in late March, Mr Wynn has 9.9 percent of Wynn Resorts.

Manila probe In January Cristino Naguiat, current chairman of the Philippines’ gaming regulator Pagcor – the Philippine Amusement and Gaming Corporation – told local media Mr Okada faced a Federal Bureau of Investigation probe in the U.S. – in addition to a Philippines Department of Justice inquiry into how he got a Philippines casino permit. That was not confirmed at the time by U.S. federal authorities. Reuters reported in March that the FBI and the Philippines’ National Bureau of Investigation

were investigating allegations of US$40 million (320 million patacas) in payments to Rodolfo Soriano. Mr Soriano – understood to be a Philippine national – was described by Reuters as a “former consultant” to Pagcor and a “fixer” who assisted Mr Okada in his bid for a gaming resort on a planned strip of new Las Vegas-style casinos at Manila Bay. Mr Okada has denied any wrongdoing.

Philippines licence Mr Okada’s Manila casino licence was granted in August 2008 under the leadership of the previous Pagcor chairman Efraim Genuino. Last September the Philippines DoJ recommended the prosecution of Mr Genuino for 175 counts of malversation of public funds and 174 counts of violation of the AntiGraft and Corrupt Practices Act. The U.S. Department of Justice said in its court filing in Nevada on

Melco Crown unit boosts share capital fivefold A

shelf company – expected to raise US$400 million (3.2 billion patacas) from a share sale for Melco Crown Entertainment Ltd’s managed Manila casino venture Belle Grande Manila Bay – has been given permission to boost its share capital more than fivefold. The Philippines’ Securities and Exchange Commission approved an increase in Melco Crown (Philippines)

Monday that Mr Okada’s lawyers would probably oppose the stay request “in whole or in part”. Wynn Resorts won’t oppose the request, the DoJ said. The federal government’s application is due to be heard next Tuesday U.S. time by Clark County District Judge Elizabeth Gonzalez, according to court papers. Universal Entertainment’s shares initially fell 18 percent on Wednesday trading in Japan on news of the criminal inquiry into Mr Okada in the U.S. The stock closed the day at 1,666 yen (US$16.8), a fall of 15.73 percent. Wynn Macau’s shares were up 0.48 percent yesterday in Hong Kong to close at HK$21.00. “Universal is cooperating fully with all investigations,” said Eric Andrus, a spokesman for the Japanese company at RLM Finsbury, a public relations firm. Kim Sinatra, general counsel for Wynn Resorts, said the company would continue to cooperate with the government.

Resorts Corp.’s capitalisation from 900 million shares at par value of one peso per share, to 5.9 billion shares at the same value. “One of the shelf company’s purposes was to own land which under Philippines law requires 60 percent local ownership,” a gaming industry source told Business Daily. “Melco Crown acquired the company and technically defaulted on one of the purposes of the company. Now they are amending their primary objective away from owning land, after which they can own as much of the stock as they like,” said the person. “…the Corporation currently does not own land, and does not intend to do so for now,” the local unit said in a filing to the Philippine Stock Exchange. The Melco Crown unit is developing the casino there in a venture with Filipino Chinese entrepreneur Henry Sy.

April 11, 2013 business daily | 7

MACAU

Air quality ‘below standard’ in most casino smoking areas

Corporate

Sands expands green meetings plan Integrated resort operator Las Vegas Sands Corp has expanded its Sands ECO360 Meetings programme, which has also been implemented in the company’s Macau properties. New offerings include ‘green meeting concierges’ to guide the entire sustainable meeting planning process for the minimum environmental impact. The concierge also use the new event planning tool to work closely with clients to customise their programmes and help them meet individual sustainability goals. Another new option is the event impact statement, a report to track a meeting’s sustainability performance, including a carbon footprint calculation, utility consumption, recycling and waste diversion, sustainable food and community benefit. Customers will also be given the option to add community engagement events to the meeting experience. “Our clients have a growing interest in conducting business in an environmentally responsible way,” said John Mims, senior vice president of worldwide sales and resort marketing at Las Vegas Sands.

Sofitel Macau chef recognised in France Yannick Ehrsam, the executive chef of Ponte 16’s Sofitel Macau has been named Master Chef by one of France’s most esteemed culinary associations, ‘Maîtres Cuisiniers de France’. The association created in 1949 held its 59th congress in Lyon, France, last month and welcomed 28 new master chefs including Mr Ehrsam, who oversees the culinary team at Sofitel Macau. “His passion towards the culinary arts is exemplary. He sets a great example for our younger chefs to learn from, said Cory Winter, regional director of food and beverage at Sofitel Greater China. Mr Ehrsam opened upscale boutique French restaurant Privé at Sofitel Macau in September 2012 after having worked at award winning Beijing restaurant Pre Lenotre. He learned his trade at some of France’s most renowned kitchens such as L’Atelier De Joel Robuchon, La Ferme de Mon Pere and Le Bateau Ivre.

Health Bureau wants improvements, threatens to cut down on smoker zones Vítor Quintã

vitorquinta@macaubusinessdaily.com

here were air quality problems in the smoking areas of almost two-thirds of the city’s casinos and slot machine parlours, the Health Bureau announced yesterday. A first round of regular checks during six days in late March shows 28 gaming venues “have at least one indicator that does not match the standards, accounting for 63.6 percent of the total,” the bureau said in a statement. More than half – 16 – of the casinos with air quality issues were run under the gaming licence of Sociedade de Jogos de Macau, SA (SJM). However most are actually run by other companies. Melco Crown (Macau), SA also had problems with eight of its gaming venues, most of which were the company’s Mocha Clubs. Three of the casinos run under the licence of Galaxy Casino, SA were also on the warned list, along with Wynn Macau casino, operated by Wynn Resorts (Macau), SA. “We will be working closely with the Health Bureau over the coming weeks to address this matter,” Wynn Resorts told Business Daily. “We regret that the air quality test result … is less than satisfactory and we pledge to make the necessary improvements to go in line with the related requirements,” Galaxy said. Business Daily asked SJM and Melco for a comment but received no reply before press time. MGM Macau, operated by SJM sub-concessionaire MGM Grand Paradise, SA and all four casinos run by Venetian Macau, SA, (technically a sub-concession of Galaxy) matched the air quality requirements.

The bureau has conducted 1,000 checks on Macau’s 44 casinos and slot parlours between March 25 and 30. The partial smoking ban in casinos came into effect on January 1. The testing focused on six indicators linked to tobacco smoke: carbon monoxide, carbon dioxide, fine particles smaller than 2.5 micrometers, fine particles smaller than 10 micrometers, volatile organic compounds, and benzopyrene. The average air quality in casinos’ smoking areas was 2.7 points – in a scale of 0 to 5 with five being the best. Air quality was somewhat better outside smoking areas: 3.3 points. Gaming operators were also required to carry out monthly checks on their smoking areas’ air quality and submit the report to the bureau. As of April 9, two casinos or slot parlours had failed to submit a complete set of required reports, the bureau revealed – without naming those venues. The authorities said they have already notified the operators of the venues that fail to meet the standards and told them to improve their facilities. Casinos should submit their own air quality reports within four weeks and then the bureau will send staff to carry out checks in the problematic venues, the statement said. In case the smoking areas still fail to meet the requirements, the government could “reduce the area of its [a casino’s] smoking area in accordance with the legal proceedings,” the bureau warned. Chief Executive Fernando Chui Sai On has the power to reduce or terminate smoking areas in casinos.

Partial smoking ban in casinos came into effect on January 1

8 |

business daily April 11, 2013

GREATER CHINA Surface tablet warranty follows law Microsoft Corp. said its Surface Pro tablet and all other products meet or exceed warranty laws in China. Consistent with Chinese law, Surface Pro and its main components are covered under a two-year warranty, Microsoft said in an e-mailed response. China National Radio on Monday reported the company had a one-year pledge for the Surface Pro. “We stand behind our products with a manufacturer’s warranty, which is additional to our commitment to honour any statutory obligation as either a manufacturer or retailer, to repair or replace a faulty product,” Microsoft said in the statement.

Trade deficit sets upbeat tone March trade deficit may signal key import shift Aileen Wang and Nick Edwards

hina has posted a surprise trade deficit in March as imports rose more-thanexpected on stronger demand for commodities such as copper and oil. March saw a mild trade deficit of US$884 million as a forecast-busting 14.1 percent year-on-year surge in imports eclipsed export growth of 10 percent, signalling that domestic demand was gathering steam needed to drive economic recovery. Customs Administration data yesterday showed import growth far in excess of the 5.2 percent expected, while exports fell just short of the 10.5 percent rise forecast in the benchmark Reuters poll. That left China with a trade deficit, compared with a forecast surplus of US$15.4 billion and February’s surplus of US$15.3 billion. Haibin Zhu, chief China economist at JP Morgan in Hong Kong, said the surge in imports in March could help dispel a major concern over the strength of the domestic demand cycle prompted by weakness of import data in previous months. “The stronger than expected import growth for March suggest this cycle is probably coming to a

turning point,” Mr Zhu told Reuters. “If domestic demand turns out to be stronger than expected, it’s definitely positive for the economic outlook.” China’s Commerce Ministry has pledged to unveil fresh measures this year to boost imports, chiming with Beijing’s long-term goal of balancing its trade structure to pursue more sustainable growth by tilting the economy more towards domestic consumption. Yesterday’s data follows two months of particularly strong export

KEY POINTS China posts unexpected trade deficit of US$880 mln Imports rose by an aboveforecast 14.1 pct y-o-y March trade data signals strengthening recovery

growth – February’s soared past forecasts to jump by a fifth year on year, even after January’s had jumped by 25 percent – which had implied a overseas demand boom that had confounded economists.

‘Uncomfortable reality’ “We thought something odd had been going on with [export] numbers,” said Alistair Thornton, China economist at IHS Global Insight in Beijing, who believes the export data does not support the notion of the overall economy gaining significant momentum and remains suspicious of it. “China’s exports to Hong Kong grew by an astounding 93 percent year on year – the highest since March 1995 – whilst exports to the EU contracted by 14 percent year-on-year and those to the U.S. sank by 7 percent. Given a lot of exports to Hong Kong are actually re-exported to the EU and U.S. as final destinations, this seems a little incongruous, to say the least,” he said. “The upshot is that the 10 percent headline [export] growth number

Yuan-Aussie trading starts as HSBC joins market makers

to reduce the country’s reliance on the dollar. China has accumulated US$3.3 trillion of foreign- exchange reserves, the world’s largest stockpile. This is a “significant step forward in supporting the growing demand for RMB for payments, settlement and financing globally,” said Tony Cripps, chief executive of HSBC’s Australia unit, according to a statement from the company released yesterday. “Greater RMB turnover and liquidity will ultimately make exchange-rate transactions for businesses and investors from both countries easier.” RMB, or renminbi, is the official Chinese name for the currency. The PBOC announces a daily reference rate for the yuan against the Australian dollar at around 9.15 am in Shanghai on each trading day, based on market-maker prices. The rate was set at 6.54 per Australian dollar yesterday, compared with

masks an uncomfortable reality – either the trade data is unreliable, or if it is reliable, then what are being booked as exports are not actually exports. Either way, this is not an optimistic data release,” Mr Thornton added. Analysts believe that Hong Kong is often used by Chinese firms as a conduit through which they can

Fitch cuts local currency debt rating

Becomes the third currency to trade directly with the Chinese yuan SBC Holdings Plc started direct trading between the yuan and Australia’s dollar yesterday, joining two other banks in getting approvals from China as market makers. China, Australia’s top trading partner, will start direct trading between the nations’ currencies, Australian Prime Minister Julia Gillard announced on Monday in Shanghai during an official visit. The People’s Bank of China approved Australia & New Zealand Banking Group Ltd and Westpac Banking Corp. as market makers for such transactions, she said. The Australian dollar becomes the third major currency allowed to have direct trading links with the yuan after the greenback and Japan’s yen. Chinese Premier Li Keqiang took office last month and retained central bank governor Zhou Xiaochuan, who has been seeking

Imports boost – key for a more sustainable growth

6.5314 on Tuesday, according to the China Foreign Exchange Trade System. Direct trading means the fixing will be computed without involving a cross rate with the U.S. dollar. China remained Australia’s top trading partner in February, with transactions at A$9.7 billion (US$10.2 billion), according to the bureau of statistics. “For China, the interest for having direct trading with the Aussie is very much tied up with the desire to have commodity pricing other than the dollar,” said Cliff Tan, East Asian head of global markets research at Bank of Tokyo-Mitsubishi UFJ Ltd. in Hong Kong. “From the Chinese perspective, it’s always great to have one more potential offshore pool of yuan liquidity. But I’m very interested to see how Australian companies will go in terms of adoption.” Bloomberg News

Fitch Ratings Ltd cut China’s long-term local-currency debt rating, citing increasing risks to the country’s financial stability given the lack of transparency in the increased borrowing of local governments. Fitch lowered its assessment by one step to A+, the fifth-highest grade, it said in a statement yesterday. The agency cited “underlying structural weaknesses” and a growing risk from shadow banking. The downgrade is for yuan-denominated debt, not foreign currency debt. It estimates total credit in China’s economy, including various forms of so-called shadow banking, may have reached 198 percent of gross domestic product at the end of 2012, up from 125 percent four years earlier. Chinese local governments “likely have significant additional contingent liabilities” arising from the debts of companies linked to them, Fitch said. The local governments may have had 12.85 trillion yuan (US$2.1 trillion) in debt at the end of last year, equal to about 25 percent of GDP, up from 23.4 percent at end-2011, Fitch said. “The proliferation of other forms of credit beyond bank lending is a source of growing risk from a financialstability perspective,” Fitch said.

April 11, 2013 business daily | 9

GREATER CHINA Mirae Asset to cut half of HK payrolls Mirae Asset Securities Co., the brokerage affiliate of South Korea’s second-largest money manager, will eliminate half of its 38 staff positions in Hong Kong after stock trading in the city fell. The timing of the reductions hasn’t been determined yet, Choi Jong Hyun, a Seoul-based spokesman for the brokerage, said yesterday. The move won’t affect services in Mirae’s home market, he said. Firms have been cutting jobs in Hong Kong to pare costs. Average daily turnover by value on the Hong Kong exchange fell 23 percent last year to HK$53.9 billion (US$6.9 billion), according to data compiled by Bloomberg.

government departments to do more detailed research in the future and hope to sort out various reasons behind abnormal trade growth with Hong Kong and will take regulatory measures if needed,” he said.

Internal strength

inflate invoices to boost foreign exchange earnings, though there are also legitimate reasons for routing via the special administrative region to mitigate tax bills and third-party customs duties. There’s a huge amount at stake in an economy where total trade was worth some US$3.9 trillion in 2012. March exports were worth US$182.2

billion, while imports were worth US$183.1 billion. Zheng Yuesheng, spokesman of General Administration of Customs, told a news conference on Wednesday at which the trade data was released that the issue was being investigated. “We are now looking into the issue closely and have done some initial research. We will work with related

Tokyo Star was delisted from the Tokyo Stock Exchange in 2008

Chinatrust seeks takeover of Tokyo Star Bank Acquisition may be completed in less than two months

aiwan’s Chinatrust Financial Holding Co. is seeking to acquire Tokyo Star Bank Ltd for about 50 billion yen (US$503 million) in a deal that may be struck as soon as June, according to two people with knowledge of the matter.

Chinatrust is in talks to buy closely held Tokyo Star from a group of shareholders including Dallas-based Lone Star Funds, Shinsei Bank Ltd and Aozora Bank Ltd, the people said, asking not to be identified as the information is private.

Lu Ting, chief Greater China economist at Bank of AmericaMerrill Lynch in Hong Kong, echoed concerns about the Hong Kong export surge, but was more focused on the import numbers. “Import growth in March, mainly on rising domestic demand for raw materials, was strong, implying robust FAI [fixed asset investment] growth in coming months,” Mr Lu wrote in a client note. Infrastructure spending – which grew at an annual rate of 21.3 percent in the first two months of 2013 – has provided a crucial underpinning to activity in the world’s second biggest economy and is widely credited with triggering the recovery which began in Q4 last year. But Lu pointed to growth of imports for domestic use improving to 4.8 percent year on year in March from a fall of 2.3 percent in JanuaryFebruary combined, as a clear sign of an uptick in internal demand fuelling economic output. “With the rise in import growth, which implies a rise in domestic demand as well as some other indicators, we believe GDP growth will rebound in Q2 to above 8.0 percent (we forecast 8.1 percent),” Mr Lu said. Reuters

A takeover would be the first of a Japanese bank by a foreign lender, helping Chinatrust to serve as a bridge between corporate customers in Taiwan and the world’s thirdlargest economy, the person said. Japan’s Topix Banks Index up 70 percent in the past six months as investors bet that fiscal and monetary stimulus will spur borrowing. Spokesmen for Taipei-based Chinatrust, Lone Star, Shinsei Bank and Aozora Bank declined to comment on a potential deal. Hiroki Nakano, a spokesman for Tokyo Star, said the company isn’t in position to comment on the matter. Any deal would require regulatory approvals from authorities in Taiwan and Japan, one person said. The Nikkei newspaper reported in January that Chinatrust was in talks to acquire the Japanese bank. Chinatrust, Taiwan’s largest issuer of credit cards, is considering the purchase with Japan’s property market expected to benefit from Prime Minister Shinzo Abe’s efforts to put an end to decades of deflation. Tokyo Star focuses on mortgages in addition to its corporate lending business in industries such as health care and shipping. The sale would be the fourth time ownership of Tokyo Star has changed hands since 1999, when the lender was bailed out by Japan’s government. Bloomberg News

Beijing charges former rail chief Liu Zhijun charged with corruption, abuse of power

hina formally charged former railways minister Liu Zhijun with corruption and abuse of power yesterday, state media said, the latest step in a graft investigation into the scandal-plagued railways. Mr Liu faces either a lengthy jail sentence or possibly death. How severely he is dealt with will be an indicator of how seriously new Chinese President Xi Jinping Xi takes his fight on corruption, one of the pillars of his new administration Mr Liu “practiced favouritism and carried out malpractice, misused his power and caused big losses to public property and the interests of the state and the people,” the official Xinhua news agency said. “The second intermediate Beijing court has already accepted the bribery and misuse of power case in accordance with the law and will chose a date for a trial,” the news agency said. “As a worker for the state, Liu Zhijun used his position to help others seek gain, illegally accepted wealth and assets from other people. The numbers involved were huge and the circumstances very serious,” Xinhua added. Mr Liu, who was removed from his post in 2011 and later expelled from the Communist Party, championed what he called leapfrog development of a rail network that accumulated more than 2.6 trillion yuan (US$419.8 billion) in debt as it laid almost 10,000 kilometres (6,200 miles) of track. The allegations of corruption surrounding the rail construction, along with a July 2011 bullet-train crash that killed 40 people, have come to symbolise broader concern over the quality of China’s infrastructure expansion. Mr Liu had successfully resisted a merger with the Ministry of Transport six years ago, but China’s National People Congress approved the rail ministry’s dismantling last month. It was split into two, with regulatory functions being absorbed by the Ministry of Transportation and the commercial operations made into a new company, China Railway Corp. Reuters

Liu Zhijun, former rail minister

10 |

business daily April 11, 2013

ASIA S.Korea govt to submit extra budget bill The South Korean government will submit an extra budget proposal to parliament next week aiming to have it ratified by the end of April, Finance Minister Hyun Oh-seok said yesterday. Mr Hyun, speaking at a weekly policy meeting, did not disclose the amount of the extra budget, but said the package aimed to boost jobs and encourage business start-ups by young people. It would also address pressing needs such as strengthening the country’s defences against cyberterrorism and revitalising the property market. The government will likely need to borrow more to fund the extra budget, which is expected to be somewhere between 15 trillion won (US$13 billion) and 20 trillion won. Analysts say that the South Korean government’s fiscal position is strong enough to handle additional debt. Yesterday’s announcement appeared to signal that the extra budget, centrepiece of new President Park Geun-hye’s stimulus package, would not involve massive infrastructure spending but would instead use more modest measures to shore up growth in Asia’s fourthlargest economy. But it is unclear how much of the stimulus package will lead to new spending because the government needs extra money to make up a projected 12 trillion won revenue shortfall for the year as well.

Malaysian election set for May 5 Malaysia will hold general elections on May 5, the Election Commission said yesterday, in what could be the toughest test of the ruling coalition’s 56-year grip on power in Southeast Asia’s third-largest economy. Opinion polls suggest a narrow victory for the National Front led by Prime Minister Najib Razak, who is under pressure to restore the two-thirds majority the coalition lost for the first time in 2008. Mr Najib ended months of speculation when he called for the poll last week, less than a month before the end of the parliamentary term. He says he needed time to show the impact of his economic transformation programme, but critics say the delay was a sign of indecision that kept financial markets on edge. Mr Najib faces a confident opposition led by former deputy prime minister Anwar Ibrahim, whose Peoples’ Alliance won five of Malaysia’s 13 states in 2008 and has the best chance of toppling the coalition in Malaysia’s postcolonial history. The May 5 poll could be Mr Anwar’s last chance to become premier, analysts say. His alliance wants to tap into a growing desire for faster political and economic reform. Elections Commission chairman Abdul Aziz Mohd Yusof told reporters that candidates will be nominated on April 20, meaning a two-week campaigning period.

Singapore mansion for sale at record S$300 mln Wing Tai Holdings Ltd chairman Cheng Wai Keung is seeking a record S$300 million (US$242 million) for a home near Singapore’s Orchard Road shopping belt, betting that developers may profit from dividing the site. The 85,000-square-foot site on an elevated lot at 33 Nassim Road, near the city’s Botanic Gardens, includes a two-story home, swimming pool and tennis court, according to Jones Lang LaSalle Inc., the sole marketing agent. “These kinds of assets come onto the market once in 10, 15 or even 20 years,” Karamjit Singh, head of investments and residential at Jones Lang LaSalle in Singapore, said. “The potential buyers of this league would be able to recognise the opportunity.” The site may be sold as two lots, which can yield a total of five homes, he said.

Singapore casinos chasing millions in debt High-rollers from China make operators see red Eveline Danubrata and Anshuman Daga

Marina Bay Sands has filed 84 claims since 2010, court documents show

igh-rollers get lavish treatment and hefty credit lines at Singapore’s two casinos, like any other gaming house in the world. But there, more of them skip town without paying their debt, a matter of increasing concern for investors. Three years after Singapore allowed casinos to open, Genting Singapore PLC’s Resorts World Sentosa and Las Vegas Sands Corp’s Marina Bay Sands have become some of the world’s most profitable. Chinese nationals account for around half of the VIP gaming volume at their tables. An examination of court documents by Reuters and a series of interviews with lawyers and industry executives reveal that several of the gamblers have run up millions of dollars in debt and then scampered back to China, where they are effectively untouchable. Resorts World sued Chinese gambler Kuok Sio Kun in Singapore last year to recover S$2.2 million (US$1.8 million). But more than six months on, the casino has not even managed to serve court papers to the Macau-based woman. After several letters of demand went unanswered for months, it tapped a Singapore law firm to sue the 46-year-old, court documents show. It then hired a Macau-based law firm, which advertised in a Chineselanguage newspaper, posted the court documents at Ms Kuok’s last known address and went there twice. “I have made all reasonable efforts and used all due means in my power to serve the court documents on the defendant, but have not been able to do so,” the Macau lawyer said in the documents. In Macau, junket operators, who

bring high rollers to casinos, mostly handle debts. Singapore only has three junket operators, which are heavily regulated and must renew their licences each year as the city-state seeks to maintain its image as a clean and safe business and tourist destination. So, when faced with bad debts, casinos negotiate with the gamblers, and as a last resort, file suits in court. But as gambling debt is considered a civil, not criminal, issue in Singapore, gamblers who fail to pay will not be arrested.

Write-offs risk Singapore’s two casinos had estimated combined gross gaming revenue of about US$5.9 billion last year, according to industry analysts, just below the US$6.2 billion pulled in by dozens of casinos on the Las Vegas strip. “It’s the volume and the level of play,” said Adam Weissenberg, global leader of the travel, hospitality and leisure segment at Deloitte & Touche. “The casinos are bringing in people who have million-dollar credit lines. They are bringing in people who are playing million-dollar hands.” The casinos in Macau raked in US$38 billion (304 billion patacas) in gaming revenue in 2012. But despite profit margins of more than 40 percent, far higher than in Macau and on the Las Vegas strip, Singapore’s casinos risk more write-offs. Genting Singapore’s trade and other receivables rose by nearly onethird from a year earlier to S$959.5 million as of end-2012. Impairment loss on trade receivables was 18 percent higher at S$143 million for 2012.

“The more you start to see the increase in their receivables, what you then start to see coming through in their results later on, is possible deterioration in their earnings quality and also including cash flow generation,” said Vicky Melbourne, Fitch Ratings’ Asia Pacific head of industrials. Las Vegas Sands said its overall provision for doubtful accounts rose an annual 59 percent to US$239.3 million last year, with the bulk of the increase due to receivables at the Singapore casino “related to credit extended, as well as increases to provisions for specific customers”. Other gaming company analysts said the numbers were not yet a huge worry, but they were watching the increase with concern. “The junket operators shoulder most of the credit risk and debt collection in Macau, but Singapore has a structural disadvantage of not having the junket network and presence,” said Lucius Chong, an analyst at CIMB Research. Court documents show Marina Bay Sands has filed 84 claims for at least S$250,000 each at Singapore’s top court since 2010, including 62 last year and 11 as of mid-March this year. Resorts World filed 11 cases in 2012 and one in 2010. These cases relate to all manner of claims, not just gambling debts. Marina Bay Sands did not give details of the cases. Genting Singapore declined comment. Many of the suits filed in the Singapore court are against gamblers based in the country, but there are likely to be larger claims on Chinese high-rollers that are not pursued due to the “painful” process and the potential bad publicity, lawyers said. Singapore does not have reciprocal enforcement of judgments with China, except for Hong Kong. This means that even if a casino obtains a judgment in a Singapore court, it also has to sue the gambler in China, they said. Reuters

The more you start to see the increase in their receivables, what you then start to see … is possible deterioration in their earnings quality Vicky Melbourne, Fitch Ratings’ Asia Pacific

April 11, 2013 business daily | 11

ASIA

Manulife, HDFC eye HSBC India insurance arm Winner to get access to about 5,500 bank branches

Sale is part of HSBC’s exit from noncore businesses

anada’s Manulife Financial Corp and the Indian affiliate of Standard Life Plc are among the suitors to place first-round bids for HSBC Holdings Plc’s Indian life insurance business, a stake valued

around US$200 million, people familiar with the matter told Reuters. HSBC, Europe’s biggest bank, is selling its 26 percent stake in a life insurance joint venture with two Indian state-run banks, as it sheds

noncore businesses globally. The winner of the auction will get immediate access to about 5,500 branches of the two state-run banks. Bancassurance – an arrangement in which a bank and an insurance firm

tie up so that the insurer can sell its products to the bank’s customers – is emerging as a key tool to sell insurance products across Asia as the life insurance industry matures in the region. HDFC Life, a joint venture between India’s top mortgage lender HDFC Ltd and British insurer Standard Life; Birla Sun Life, a venture between Indian conglomerate Aditya Birla Group and Canada’s Sun Life; and ICICI Prudential Life, a joint venture between India’s No. 2 lender ICICI Bank and Britain’s No. 1 insurer Prudential Plc, are among the bidders to submit first-round bids last week, the people said. HSBC’s two Indian partners in the venture – Canara Bank Ltd and Oriental Bank of Commerce Ltd – could also pare their stakes, the people said, although no final decision has been made on this. That could push the deal value to US$800 million, including a bank distribution agreement, they added. “The biggest attraction for any Indian or foreign bidder in this joint venture would be the vast distribution network, which is absolutely essential in a country like India,” said one of the sources directly involved in the process. “There are a very few good partnership opportunities available for foreign players in India, this venture is one of them.” The sale is part of HSBC’s exit from nonstrategic businesses. It has got out of about 50 businesses globally since chief executive Stuart Gulliver took over at the start of 2011, including its recent profitable sales of its US$9.4 billion stake in Ping An Insurance Group Co of China Ltd and its US$2.1 billion Panama business. Reuters

12 |

business daily April 11, 2013

MARKETS Hang SENG INDEX NAME

NAME

PRICE

DAY %

VOLUME

32.65

-0.3053435

26819813

CHINA UNICOM HON

ALUMINUM CORP-H

2.99

3.103448

32785977

CITIC PACIFIC

BANK OF CHINA-H

3.52

0.2849003

242633568

BANK OF COMMUN-H

5.78

1.581722

28476797

29.65

-0.8361204

2229130

AIA GROUP LTD

BANK EAST ASIA

CLP HLDGS LTD

PRICE

DAY %

VOLUME

10.06

-0.3960396

25215641

9.7

0.1031992

NAME

PRICE

DAY %

POWER ASSETS HOL

73.95

1.370802

2243294

7785914

SANDS CHINA LTD

39.45

2.33463

10447801

SINO LAND CO

12.66

0.1582278

6441870

SUN HUNG KAI PRO

106.4

1.915709

5620787

-1.467505

3231551 4099018

0.6661732

2245050

CNOOC LTD

14.26

-0.6963788

71468151

COSCO PAC LTD

10.84

6584932

SWIRE PACIFIC-A

VOLUME

BELLE INTERNATIO

13.14

-0.3034901

26555320

ESPRIT HLDGS

9.66

0.8350731

6615001

TENCENT HOLDINGS

249.4

0.726979

BOC HONG KONG HO

25.85

1.372549

14296866

HANG LUNG PROPER

29.1

4823249

TINGYI HLDG CO

20.85

0.968523

3811160

CATHAY PAC AIR

12.72

-2.153846

6941963

HANG SENG BK

123

0.4081633

906667

WANT WANT CHINA

11.36

-1.899827

17070638

WHARF HLDG

67.95

0.9658247

3748109

CHEUNG KONG

114

1.694915

5570396

CHINA COAL ENE-H

6.58

1.230769

17076507

CHINA CONST BA-H

6.19

0.8143322

223430417

CHINA LIFE INS-H

20.95

4.228856

62630241

CHINA MERCHANT

24.7

1.646091

5231570

CHINA MOBILE CHINA OVERSEAS CHINA PETROLEU-H

HENDERSON LAND D

53.7

1.129944

3565647

HENGAN INTL

75.5

-0.3957784

1472803

HONG KG CHINA GS HONG KONG EXCHNG HSBC HLDGS PLC

82.9

0.1207729

13092477

HUTCHISON WHAMPO

21.55

3.110048

29256480

IND & COMM BK-H

8.83

-0.3386005

80266574

LI & FUNG LTD

22.7

0.8888889

6803746

128.7

0.546875

2264449

81.9

1.236094

11700784

4.193139

11804062

5.23

291004949

10.38

1.367188

11879794

30.6

0.6578947

1263659

MOVERS

3 22050

INDEX 22034.56 HIGH

22034.56

LOW

21664.89

CHINA RES ENTERP

24.2

-3.2

5042795

MTR CORP

CHINA RES LAND

21.5

3.365385

7992087

NEW WORLD DEV

12.6

-0.4739336

14095706

CHINA RES POWER

23.85

3.921569

8674861

PETROCHINA CO-H

10.02

0.2

64631565

CHINA SHENHUA-H

27.25

0.1838235

19229800

PING AN INSURA-H

59.6

1.274427

10606546

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

27.55

5.961538

21893558

YANZHOU COAL-H

9.78

0.8247423

17402000

CHINA PETROLEU-H

8.83

-0.3386005

80266574

ZIJIN MINING-H

2.58

3.2

62520047

8.18

-0.1221001

16503672

12.16

-0.9771987

3742000

52W (H) 23944.74 21650

(L) 18056.4 8-April

10-April

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.5

-1.129944

219864760

AIR CHINA LTD-H

6.25

-3.100775

6615255

ALUMINUM CORP-H

2.99

3.103448

32785977

CHINA RAIL CN-H

6.97

0.5772006

14492526

ZOOMLION HEAVY-H

ANHUI CONCH-H

27.6

0.729927

18103201

CHINA RAIL GR-H

3.78

1.886792

18514446

ZTE CORP-H

BANK OF CHINA-H

3.52

0.2849003

242633568

CHINA SHENHUA-H

27.25

0.1838235

19229800

CHINA TELECOM-H

CHINA PACIFIC-H

5.78

1.581722

28476797

3.81

-0.78125

77708155

22.95

-0.4338395

2090600

DONGFENG MOTOR-H

11.14

2.578269

13490857

CHINA CITIC BK-H

4.21

-0.2369668

33784981

GUANGZHOU AUTO-H

5.77

-3.993344

12175146

CHINA COAL ENE-H

6.58

1.230769

17076507

HUANENG POWER-H

8.37

0.6009615

25368321

CHINA COM CONS-H

7.36

2.222222

23750530

IND & COMM BK-H

5.23

291004949

CHINA CONST BA-H

6.19

0.8143322

223430417

JIANGXI COPPER-H

16.82

1.081731

9745565

CHINA COSCO HO-H

3.6

3.746398

12205175

PETROCHINA CO-H

10.02

0.2

64631565

BANK OF COMMUN-H BYD CO LTD-H

20.95

4.228856

62630241

PICC PROPERTY &

9.68

1.787592

23760612

CHINA LONGYUAN-H

7.41

2.066116

18574676

PING AN INSURA-H

59.6

1.274427

10606546

CHINA MERCH BK-H

15.6

0.9055627

11368376

SHANDONG WEIG-H

7.09

0.7102273

3532000

CHINA LIFE INS-H

CHINA MINSHENG-H

9.26

-2.114165

45001900

SINOPHARM-H

24.8

0.4048583

7432652

CHINA NATL BDG-H

9.59

1.160338

53394500

TSINGTAO BREW-H

49.7

2.368692

1223500

16.14

2.022756

5687088

WEICHAI POWER-H

26.4

0.7633588

2211200

CHINA OILFIELD-H

NAME

MOVERS

1 10720

INDEX 10694.23 HIGH

10694.23

LOW

10429.61

52W (H) 12354.22 10400

(L) 8987.76 8-April

10-April

Shanghai Shenzhen CSI 300 NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.71

-0.3676471

74964121

AIR CHINA LTD-A

5.16

-0.5780347

5801801

NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

6.36

-2.153846

6087321

QINGHAI SALT-A

28.46

-1.794341

8822269

CITIC SECURITI-A

12.01

-0.9892828

48242091

SAIC MOTOR-A

15.6

1.694915

47080266

CHONGQING WATE-A

NAME

VOLUME

4.34

5.596107

48354941

CSR CORP LTD -A

4.17

3.217822

72405879

SANY HEAVY INDUS

10.16

-0.1964637

14550645

18.38

-1.288937

25069174

DAQIN RAILWAY -A

7.19

-1.775956

32156453

SHANDONG DONG-A

45.66

-3.119032

22151336

BANK OF BEIJIN-A

8.6

-0.3476246

12906054

DATANG INTL PO-A

4.41

5573003

SHANDONG GOLD-MI

32.13

4503942

BANK OF CHINA-A

2.91

14664254

EVERBRIG SEC -A

13.27

-0.2255639

12484799

SHANG PHARM -A

12.7

-2.232487

21126603 54586848

ALUMINUM CORP-A ANHUI CONCH-A

4.67

-0.4264392

35049799

GD MIDEA HOLDI-A

13.43

-0.6656805

60168838

SHANG PUDONG-A

-0.3984064

BANK OF NINGBO-A

10.61

-1.210428

7694266

GD POWER DEVEL-A

2.94

-1.010101

20514979

SHANGHAI ELECT-A

3.92

0.7712082

3051551

BAOSHAN IRON & S

4.88

0.2053388

32816384

GEMDALE CORP-A

6.68

0.3003003

28782716

SHANXI LU'AN -A

17.51

2.878966

17007279

BANK OF COMMUN-A

BYD CO LTD -A

21.12

-1.492537

3178659

GF SECURITIES-A

13.2

-1.271503

17301660

SHANXI XISHAN-A

11.48

1.323919

10322876

CHINA AVIC AVI-A

23.08

0.7860262

3666079

GREE ELECTRIC

27.12

-5.800625

53777817

SHENZEN OVERSE-A

5.75

-0.6908463

22771968 24822995

CHINA CITIC BK-A

4.29

-0.4640371

33786785

GUANGHUI ENERG-A

19.29

0.6259781

21124632

SUNING COMMERC-A

6.22

0.6472492

CHINA CNR CORP-A

4.17

5.30303

79568338

HAITONG SECURI-A

10.1

-0.4926108

64814759

TASLY PHARMAC-A

65.9

-2.355905

3298574

CHINA COAL ENE-A

7.02

0.5730659

7471927

HANGZHOU HIKVI-A

37.5

-1.781037

4386949

TSINGTAO BREW-A

37.34

1.660768

4110166

CHINA CONST BA-A

4.66

-0.2141328

17440664

HENAN SHUAN-A

74.29

1.226325

2643685

WEICHAI POWER-A

21.81

2.490602

9046546

CHINA COSCO HO-A

3.66

1.666667

15487097

HONG YUAN SEC-A

18.06

7575662

WULIANGYE YIBIN

22.76

4.547542

41401476

CHINA EAST AIR-A

3.03

0.3311258

14461319

HUATAI SECURIT-A

9.57

-1.340206

19361979

YANGQUAN COAL -A

13.33

1.368821

7205183

CHINA EVERBRIG-A

3.07

-0.9677419

51831691

HUAXIA BANK CO

10.14

-0.9765625

14169893

YANTAI WANHUA-A

18.45

0.874795

16896019 4273970

CHINA INTL MAR-A

12.23

-1.05178

4765926

IND & COMM BK-A

4.07

21560730

YANZHOU COAL-A

16.9

1.623572

CHINA LIFE INS-A

17.56

0.5727377

16699214

INDUSTRIAL BAN-A

17.26

-0.6332758

55599933

YUNNAN BAIYAO-A

81.5

-1.807229

2061888

CHINA MERCH BK-A

12.44

-1.191422

30295476

INNER MONG BAO-A

28.88

0.2429712

16693392

ZHONGJIN GOLD

14.2

0.4953999

13158791

CHINA MERCHANT-A

11.92

-2.931596

35046917

INNER MONG YIL-A

29.98

-1.056106

14158452

ZIJIN MINING-A

3.44

0.5847953

39689904

15123697

INNER MONGOLIA-A

5.07

-2.123552

84578490

ZOOMLION HEAVY-A

8.19

-0.8474576

26421883

30.8

-0.9646302

10921683

ZTE CORP-A

11.37

-1.302083

18540081

3.920604

9600289 13993627

CHINA MERCHANT-A

25.57

1.428005

CHINA MINSHENG-A

9.64

-0.6185567

123567418

JIANGSU HENGRU-A

CHINA NATIONAL-A

9.06

24076554

JIANGSU YANGHE-A

63.35

CHINA OILFIELD-A

16.08

6457802

JIANGXI COPPER-A

22.44

1.126634

CHINA PACIFIC-A

19.6

1.396793

24912438

JINDUICHENG -A

11.21

0.6283662

4606321

12.65

2.929211

21890431 23690845

CHINA PETROLEU-A

7.16

-0.5555556

32822755

JIZHONG ENERGY-A

CHINA RAILWAY-A

5.01

2.03666

20507742

KANGMEI PHARMA-A

16.72

-0.7125891

CHINA RAILWAY-A

2.78

1.459854

25321182

KWEICHOW MOUTA-A

169.96

3.887531

7085838

26.73

4.088785

17290741

CHINA SHENHUA-A

21.75

0.554785

9582206

LUZHOU LAOJIAO-A

CHINA SHIPBUIL-A

4.76

-0.8333333

33952538

METALLURGICAL-A

2.05

0.4901961

14275860

2.54

1.195219

MOVERS 136

145

19 2500

INDEX 2485.309

CHINA SOUTHERN-A

3.46

0.2898551

14153815

NINGBO PORT CO-A

30550447

HIGH

2499.16

CHINA STATE -A

3.46

2.670623

108185902

PETROCHINA CO-A

8.65

0.4645761

15823657

LOW

2434.47

CHINA UNITED-A

3.58

-0.2785515

56952428

PING AN BANK-A

19.4

-2.708124

50776709

CHINA VANKE CO-A

11.04

0.4549591

60813232

PING AN INSURA-A

41.18

0.09722897

37672668

CHINA YANGTZE-A

7.18

-1.237964

16269801

POLY REAL ESTA-A

11.81

0.2546689

38764253

CHONGQING CHAN-A

9.94

0.6072874

40624514

QINGDAO HAIER-A

13.02

-0.3062787

11968076

PRICE DAY %

Volume

PRICE DAY %

Volume

52W (H) 2791.303 (L) 2102.135

2430

8-April

10-April

FTSE TAIWAN 50 INDEX NAME ACER INC

25.05

2.03666

7664460

ADVANCED SEMICON

24.05

12710018

0.41841

ASIA CEMENT CORP ASUSTEK COMPUTER

NAME FORMOSA PLASTIC

68.5

-2.002861

11794477

FOXCONN TECHNOLO

79.8

0.1254705

2889039

5277719

FUBON FINANCIAL

40.9

2.25

NAME

PRICE DAY %

Volume

TAIWAN MOBILE CO

98.7

-1.791045

TPK HOLDING CO L

629

3.79538

7014308 5472872

18645156

TSMC

98.3

0.8205128

34900055

UNI-PRESIDENT

56.2

0.3571429

12199180

11 -0.9009009

40712526

341

0.2941176

4181541

HON HAI PRECISIO

80.6

0.1242236

21944478

AU OPTRONICS COR

13.05

1.953125

75418560

HOTAI MOTOR CO

237

1.282051

287200

CATCHER TECH

144.5

1.048951

6742857

247.5

1.226994

8613687

WISTRON CORP

30.35

0.1650165

9966866

CATHAY FINANCIAL

39.1

0.7731959

20866360

HUA NAN FINANCIA

16.8

5142853

YUANTA FINANCIAL

14.45

8049287

CHANG HWA BANK

8325576

LARGAN PRECISION

778

0.9079118

1123743

YULON MOTOR CO

50.9 -0.3913894

3111595

CHENG SHIN RUBBE

94.6

5.462653

12122441

LITE-ON TECHNOLO

50.3

0.6

9932498

352.5

0.8583691

7342614

23.6

0.2123142

18806879

51 -0.9708738

9147733

CHIMEI INNOLUX C

HTC CORP

4.046243

91487384

MEDIATEK INC

CHINA DEVELOPMEN

8.11

0.1234568

30495743

MEGA FINANCIAL H

CHINA STEEL CORP

25.5 -0.9708738

17615757

NAN YA PLASTICS

CHINATRUST FINAN

18.1

0.2770083

31376550

PRESIDENT CHAIN

CHUNGHWA TELECOM

92.3

6591122

COMPAL ELECTRON

20.1 -0.4950495

13657938

DELTA ELECT INC

169.5

1.497006

1066820

QUANTA COMPUTER

60.8 -0.3278689

8154161

SILICONWARE PREC

32.2

-1.075269

8279489

129

0.3891051

3130423

SINOPAC FINANCIA

14.15

1.071429

15747723

FAR EASTERN NEW

6950196

SYNNEX TECH INTL

11157428

FAR EASTONE TELE

68.6

-1.010101

4445934

TAIWAN CEMENT

37.75

6148799

FIRST FINANCIAL

17.9 -0.5555556

12284977

TAIWAN COOPERATI

16.75

0.2994012

5649370

FORMOSA CHEM & F

66.9 -0.2980626

8110425

TAIWAN FERTILIZE

70.1

2483808

FORMOSA PETROCHE

75.1

3035403

TAIWAN GLASS IND

26.9

0.5607477

767625

-2.720207

UNITED MICROELEC

MOVERS

9 5420

INDEX 5389.54 HIGH

5418.42

LOW

5368.75

52W (H) 5639.93 5360

(L) 4719.96 8-April

10-April

April 11, 2013 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 58.7

32.2 32.1

16.9 16.8

58.6

16.7

32.0

Max 32.2

average 32.025

Min 31.9

16.5

31.8

Last 32.2

16.6

58.5

31.9

Max 58.65

average 58.466

Min 58.45

58.4

Last 58.65

39.5

Max 16.82

average 16.625

Min 16.44

Last 16.78

16.4

19.6

21.3

19.4

21.2

19.2

21.1

39.4 39.3 39.2 39.1 Max 39.45

average 39.283

Min 39.05

Last 39.45

39.0

Max 19.44

average 19.189

Commodities PRICE

DAY %

YTD %

(H) 52W

(L) 52W

WTI CRUDE FUTURE May13

93.98

-0.233545648

0.880206097

106.0899963

BRENT CRUDE FUTR May13

106.09

-0.131789513

-2.194155066

117.4300003

91.54999542

GASOLINE RBOB FUT May13

291.29

-1.002582926

0.653075328

330.369997

237.7199888

892

1.133786848

-2.593502594

1000.75

801.25

4.042

0.622354991

17.05763105

4.180000305

3.072000027

GAS OIL FUT (ICE) May13 NATURAL GAS FUTR May13 HEATING OIL FUTR May13 METALS

296.59

0.155337183

-1.914809181

327.1399975

258.5000038

Gold Spot $/Oz

1581.24

0.6185

-4.9998

1796.08

1527.21

Silver Spot $/Oz

27.8488

2.1974

-7.5098

35.365

26.1513

Platinum Spot $/Oz

1538.1

0.0325

1.3408

1742.8

1379.05

Palladium Spot $/Oz

717.13

-2.0221

2.4969

786.5

553.75

LME ALUMINUM 3MO ($)

1919

1.534391534

-7.428847082

2200.199951

1827.25

LME COPPER 3MO ($)

7630

2.416107383

-3.795233892

8496.75

7219.5

1920.5

1.506342495

-7.668269231

2230

1745 15236

LME ZINC

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) May13 CORN FUTURE

Last 19.2

19.0

Max 21.3

average 21.172

Min 21

Last 21

May13

16205

0.965732087

-5.011723329

18920

15.715

0.063673989

1.485308363

16.95000076

14.5

644.25

-7.997143877

838

520.25

WHEAT FUTURE(CBT) Jul13

710

-0.56022409

-10.5511811

900

664.75

SOYBEAN FUTURE May13

1392.5

-0.214976711

-0.482401286

1639.5

1218.75

COFFEE 'C' FUTURE May13

135.9

0.369276219

-7.36196319

200.3000031

132.0500031

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

PRICE

AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP

DAY %

1.0524 1.5325 0.9308 1.3102 99.44 7.9955 7.7626 6.1939 54.465 29.01 1.2375 29.962 40.993 9692 104.647 1.21947 0.85491 8.1255 10.475 130.28 1.03

0.6119 0.1961 0.5157 0.5063 -0.4928 0.0188 0.0167 0.1356 0.2203 0.1034 0.1455 0.2203 0.4635 0.2683 -1.097 0.0148 -0.2994 -0.5218 -0.4926 -0.9902 0

YTD %

(H) 52W

1.4068 -5.2609 -1.6545 -0.6672 -13.4151 -0.1538 -0.1546 0.5925 0.9731 5.4119 -1.301 -3.1006 0.0293 1.0421 -14.6397 -0.9832 -4.6192 1.1322 0.5289 -12.8262 -0.0097

(L) 52W

1.0625 1.6381 0.9972 1.3711 99.66 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 104.693 1.25692 0.88151 8.4957 10.9254 130.51 1.0314

0.9582 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1907 51.295 28.87 1.2152 28.913 40.54 9153 74.482 1.20051 0.77553 7.7018 9.6245 94.12 1.029

MACAU RELATED STOCKS NAME

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

3.69

-2.122016

17.14285

3.94

2.29

2314251

CROWN LTD

12.35

-1.984127

15.74508

12.85

8.06

2297263

ARISTOCRAT LEISU

VOLUME CRNCY

SUGAR #11 (WORLD) Jul13

17.74

0.112866817

-10.13171226

24.06999969

17.54999924

AMAX HOLDINGS LT

0.045

#N/A N/A

13645500

COTTON NO.2 FUTR Jul13

87.41

0.923680868

13.71146091

94.19999695

69.94999695

BOC HONG KONG HO

25.85

1.372549

7.261409

27.1

20.85

14296866 126512

CENTURY LEGEND

0.3

3.448276

13.20755

0.42

0.215

5.66

-5.509178

6.74

2.8

307000

CHINA OVERSEAS

21.55

3.110048

-6.709958

25.6

14.624

29256480

CHINESE ESTATES

13.58

2.105263

11.9592

13.68

7.697

731500

CHOW TAI FOOK JE

10.2

0.7905138

-18.00643

13.4

8.4

5590000

EMPEROR ENTERTAI

2.16

-0.9174312

14.28572

2.49

1.1

810000

FUTURE BRIGHT

2.25

0.4464286

84.42623

2.75

0.65

3150000 10112673

CHEUK NANG HLDGS

World Stock MarketS - Indices NAME

COUNTRY

PRICE

DOW JONES INDUS. AVG

NASDAQ COMPOSITE INDEX

FTSE 100 INDEX DAX INDEX

DAY %

YTD %

(H) 52W

(L) 52W

14673.46

0.410443

3237.858

0.4843197

11.97576

14716.46

12035.08984

GALAXY ENTERTAIN

32.2

1.737757

6.095551

35.7

16.94

7.231106

3270.296875

2726.68

HANG SENG BK

123

0.4081633

3.622581

131.5

99.2

6347.49

906667

0.5429884

7.624528

6533.99

5229.76

HOPEWELL HLDGS

29.95

0.3350084

-9.924812

35.3

19.049

1716941

7700.04

0.8187223

1.151411

8074.47

5914.43

HSBC HLDGS PLC

81.9

1.236094

0.7380036

88.45

59.8

11700784

HUTCHISON TELE H

3.75

1.078167

5.33708

4.05

2.98

1051026

LUK FOOK HLDGS I

23.25

1.30719

-4.713113

30.05

14.7

1804685

MELCO INTL DEVEL

13.46

1.355422

49.38956

13.96

5.12

5659000

NIKKEI 225

13288.13

0.7260268

27.82973

13331.39

8238.96

HANG SENG INDEX

22034.56

0.75088

-2.746884

23944.74

18056.4

CSI 300 INDEX

2485.309

-0.1655399

-1.492015

2791.303

2102.135

MGM CHINA HOLDIN

16.78

0.4790419

26.3718

18.449

9.509

3283528

TAIWAN TAIEX INDEX

7752.8

0.3139015

0.6922502

8089.21

6857.35

MIDLAND HOLDINGS

3.48

0.8695652

-5.945947

3.249

2668000

KOSPI INDEX

1935.58

0.7726189

-3.078045

2042.48

1758.99

S&P/ASX 200 INDEX

4967.995

-0.1777032

6.862731

5163.5

3985

4877.475

-0.4513033

12.99117

4985.852

3635.283

FTSE Bursa Malaysia KLCI

1697.51

0.4283339

0.5068272

1700.55

NZX ALL INDEX

941.169

0.4872919

6.702095

PHILIPPINES ALL SHARE IX

4251.37

1.091195

14.93358

JAKARTA COMPOSITE INDEX

21.0

CURRENCY EXCHANGE RATES

NAME ENERGY

Min 19.08

NEPTUNE GROUP

0.143

-1.37931

-5.92105

0.226

0.084

7870000

NEW WORLD DEV

12.6

-0.4739336

4.825287

15.12

7.95

14095706

SANDS CHINA LTD

10447801

39.45

2.33463

16.20029

41.05

20.65

SHUN HO RESOURCE

1.44

2.857145

1.67

1.03

1526.6

SHUN TAK HOLDING

4.01

-4.295944

4.65

2.56

3213758

946.292

755.149

SJM HOLDINGS LTD

4290.5

3238.77

SMARTONE TELECOM

19.2

6.666667

22.15

12.34

4144864

12.92

0.466563

-8.238636

17.38

12.5

1369500

WYNN MACAU LTD

0.4784689

0.2386598

25.5

14.62

6754273

ASIA ENTERTAINME

4.47

2.995392

46.07843

6.25

2.4

87483

BALLY TECHNOLOGI

49.16

-0.2435065

9.953033

52.7

41.74

498860

HSBC Dragon 300 Index Singapor

640.62

0.4

3.14

STOCK EXCH OF THAI INDEX

1471.94

0.08295257

5.748126

1601.34

1099.15

HO CHI MINH STOCK INDEX

496.5

-2.740504

20.0058

518.46

372.39

BOC HONG KONG HO

3.35

9.120524

3.59

2.7

6500

Laos Composite Index

1324.59

9.04039

1455.82

980.83

GALAXY ENTERTAIN

4.1

2.5

3.274558

4.57

2.25

10200 2694588

Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.

INTL GAME TECH

16.29

0.431566

14.96118

17.49

10.92

JONES LANG LASAL

98.64

1.107011

17.51251

100.86

61.39

241682

LAS VEGAS SANDS

54.85

0.4762777

18.82582

58.3216

32.6127

4450421

MELCO CROWN-ADR

22.81

0.2196837

35.45131

23.39

9.13

3903921

MGM CHINA HOLDIN

8.108107

2.44

1.36

5000

MGM RESORTS INTE

12.64

2.265372

8.591062

14.11

8.83

10116127

SHFL ENTERTAINME

14.92

-1.518152

2.896552

18.37

11.75

141639

SJM HOLDINGS LTD

2.47

2.489627

6.92641

2.85

1.65

13000

123.53

0.6928595

9.814208

129.6589

84.4902

1046379

WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily April 11, 2013

Opinion

Why capitalism won’t change North Korea’s regime Andrei Lankov

Professor of history at Kookmin University in Seoul

o an outside observer, the behaviour of the North Korean leadership often appears shortsighted and irrational. There seems to be a tested and easy way out of their predicament – the path of Chinese-style economic reforms. While such gradual capitalist reforms might be good for the country, however, they would be far too dangerous for the current North Korean elite. As a consequence, they’re unlikely to be implemented anytime soon. The history of East Asia after World War II has been, above all, one of spectacular economic growth. From 1960 to 2000, average per-capita grossdomestic-product growth in East Asia reached 4.6 percent, while the same indicator for the world was 2.8 percent. In 1960, in terms of per-capita GDP, South Korea ranked slightly below Somalia, while Taiwan lagged behind Senegal. The remarkable economic transformation of those two Asian economies was overseen by governments that were decisively illiberal and undemocratic. These regimes are often described as “developmental dictatorships” – largely because they combined authoritarian politics with an obsessive focus on economic growth. The military regime in South Korea, and a hereditary dictatorship in Taiwan, spouted anti-Communist rhetoric and paid lip service to the principles of the “free world”, while pushing a market-driven but government-controlled development strategy. Lacking natural resources, they emphasised cheap labour and economic efficiency, and they were successful beyond anybody’s wildest expectations.

Perfect Machiavellians After the mid-1980s, this “first generation” of developmental dictatorships was emulated by Communist regimes in mainland China and Vietnam. In both countries, the party elite kept up the old slogans and quasi-Leninist decorum for the sake of domestic stability but for all

practical purposes switched to the growth strategies pioneered by Taiwan and South Korea. If anything, their version of capitalism was even more unabashed and brutal. Regardless, the model worked again: The “second generation” of developmental dictatorships also achieved spectacular results. Vietnam, which experienced a famine in the mid-1980s, had by the mid-1990s become the world’s third-largest exporter of rice. A similar course has failed to inspire the North Korean elite. And unfortunately for common citizens, this unwillingness to emulate China is neither irrational, nor ideological. On the contrary, North Korea’s leaders are rational to the extreme, being perhaps the most perfect bunch of Machiavellians currently in power anywhere. They do not want to pursue reforms because they realise that in the specific conditions produced by the division of their country, such reforms constitute the surest way of political (and, perhaps, physical) suicide. The existence of a rich and free South Korea makes North Korea’s situation vastly different from that of China or Vietnam. The regime lives next to a country whose people speak the same language and are officially described as “members of our nation,” but who enjoy a per-capita income at least 15 times (some claim 40 times) higher than that of North Koreans. Even if the lowest estimate is taken, it would still represent by far the world’s largest per-capita income difference between two countries that share a land border. To put things in perspective, the income ratio in divided Germany was merely 3-to-1, and even this was enough to prompt the East Germans to overthrow the regime as soon as they had an opportunity to do so without fear of Soviet retribution. One can only imagine the mind-blowing effect upon ordinary North Koreans that would be caused by the sight of the average Seoul street, a typical South Korean department store, or, for that

North Korean elites … stand little chance of becoming successful capitalists if the system is overthrown

matter, the flat of a humble, semiskilled manual worker in the South. Perhaps 15 years of flourishing market activities have accustomed some North Koreans to visions of consumerist abundance (after all, one can buy a lot in Pyongyang now if money is available). But picture what a previously isolated North Korean might think after he or she discovers that a South Korean worker – supposedly a slave of American neocolonialism – enjoys amenities and a lifestyle that in North Korea would be available only to successful drug smugglers or Central Committee officials.

Foreign investment and technology are necessary preconditions for any successful reform programme. If such changes were to be instigated, a large number of North Koreans would quickly be exposed to dangerous knowledge of the outside world, and above all of South Korea. A considerable relaxation of surveillance would be unavoidable, as well: Efficient market reforms cannot work in a country where a business trip to the capital city requires a weeks-long wait for travel permits and where promotion is determined not so much by labour efficiency as by demonstrated political loyalty. Information would begin to flow into the country, and the dissemination of this information, as well as of the dangerous conclusions drawn from it, would become much easier.

No future It is doubtful the North Korean population would be prepared to endure a further decade of destitution followed by a couple of decades of relative poverty and backbreaking work after they learned about another Korea – affluent, free, glamorous and attractive. Would they tolerate a reforming, but still authoritarian and repressive regime on the assumption that this regime will

on some distant day deliver a prosperity comparable to that of their Southern brothers and sisters? North Koreans are much more likely to toss out their current rulers and seek to reunify the peninsula in order to partake in the South’s fabulous prosperity. It is an open secret that many Chinese party officials have used their country’s reforms to enrich themselves: The new Chinese entrepreneurial class, to a significant extent, consists of former officials, as well as their relations and buddies. However, the situation of the North Korean elites is different. They stand little chance of becoming successful capitalists if the system is overthrown. In all probability, the important positions in any new economy would be taken by people from South Korea – executives and entrepreneurs with capital, education, experience and perhaps political support. This fact is understood by at least some North Korean bureaucrats, but the majority of them have another, greater, fear. They know how brutal their rule has been. They also know how they would have treated the South Korean elite (and their descendants) had the North won the intra-Korean feud. They are not merely afraid to lose power and access to material privileges (these privileges are quite modest, by the standards of the rich in most other countries). They are afraid of being slaughtered or sent to prisons. A few years ago, a highlevel North Korean bureaucrat told a top Western diplomat: “Human rights and the like might be a great idea, but if we start explaining it to our people, we will be killed in no time.” Perhaps one of the reasons behind the remarkable resilience of the North Korean regime is this universal assumption of its bureaucrats that they would have no future in case of regime collapse. This makes North Korea different from many other dictatorships. *This is an excerpt from his new book, ‘The Real North Korea: Life and Politics in the Failed Stalinist Utopia’ Bloomberg View

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

April 11, 2013 business daily | 15

OPINION Business

Germany’s choice

Leading reports from Asia’s best business newspapers

George Soros

wires

Chairman of Soros Fund Management and of the Open Society Foundations

Jakarta Globe The Asian Development Bank has warned Indonesia that maintaining the current national subsidy on fuel would be unsustainable and could jeopardiseeconomicdevelopment in the long term, even though the country can still afford it at present. The ADB said the fuel subsidy has been putting pressure on the country’s budget and external account. Switching from general price subsidies to targeted transfers is the best option, the report said, suggesting that fiscal resources be reallocated to spending on infrastructure, health and education, which would support future growth and make it more inclusive.

Times of India India has said that it’s ready to engage on an agreement on trade facilitation, which among other things proposes time-bound clearance of certain types of consignments, single-window approval for cargo and processing of documents even before goods reach Indian shores. A copy of the draft agreement shared by the commerce department with trade bodies is seen to be beneficial for importers, although exports are unlikely to get a major lift. But the big worry even within the government is the move to release “expedited shipments” within three hours of arrival. The proposal is being resisted as it will aid a bunch of courier companies.

Asahi Shimbun Bank of Japan Governor Haruhiko Kuroda has drawn admiration for the scale of his new monetary easing measures. Many experts believe the package will rescue the Japanese economy. There are growing expectations that the yen will decline further, which will be a boon for Japanese exports. Stock prices are also expected to rise further. But there are also concerns that foreign exchange rates and stock prices should not move too drastically. “There is a possibility that the BOJ’s policies will damage the economies of other countries as well as failing to save Japan’s own economy,” said Li Ruogu, president of Export-Import Bank of China.

Bangkok Post Tourism businesses need to understand and cover various online marketing channels to catch up with fast-moving trends in the industry, said a survey by Google Thailand. The survey found domestic tourism interest rose to 2,500 searches a minute in January compared with 1,300 searches a minute in 2011. Searching via mobile increased 10-fold from 2011, as the number of smartphone users here has jumped to 20 million. This trend has prompted budget airline Thai AirAsia to put most of its content and promotions online, with the carrier saying that 85 percent of its bookings now come from online channels, up from 40 percent in the first year of operation nine years ago.

he euro crisis has already transformed the European Union from a voluntary association of equal states into a creditordebtor relationship from which there is no easy escape. The creditors stand to lose large sums should a member state exit the monetary union, yet debtors are subjected to policies that deepen their depression, aggravate their debt burden, and perpetuate their subordinate position. As a result, the crisis is now threatening to destroy the EU itself. That would be a tragedy of historic proportions, which only German leadership can prevent. The causes of the crisis cannot be properly understood without recognising the euro’s fatal flaw: By creating an independent central bank, member countries have become indebted in a currency that they do not control. At first, both the authorities and market participants treated all government bonds as if they were riskless, creating a perverse incentive for banks to load up on the weaker bonds. When the Greek crisis raised the spectre of default, financial markets reacted with a vengeance, relegating all heavily indebted euro zone members to the status of a Third World country overextended in a foreign currency. Subsequently, the heavily indebted member countries were treated as if they were solely responsible for their misfortunes, and the structural defect of the euro remained uncorrected. Once this is understood, the solution practically suggests itself. It can be summed up in one word: Eurobonds. If countries that abide by the EU’s new Fiscal Compact were allowed to convert their entire stock of government debt into Eurobonds, the positive impact would be little short of the miraculous. The danger of default would disappear, as would risk premiums. Banks’ balance sheets would receive an immediate boost, as would the heavily indebted countries’ budgets.

Reducing risks Italy, for example, would save up to 4 percent of its GDP; its budget would move into surplus; and fiscal stimulus would replace austerity. As a result, its economy would grow, and its debt ratio would fall. Most of the seemingly intractable problems would vanish into thin air. In accordance with the Fiscal Compact, member countries would be allowed to issue new Eurobonds only to replace maturing ones; after five years, the debts outstanding would be gradually reduced to 60 percent of GDP. If a member country ran up additional debts, it could

borrow only in its own name. Admittedly, the Fiscal Compact needs some modifications to ensure that the penalties for noncompliance are automatic, prompt, and not too severe to be credible. A tighter Fiscal Compact would practically eliminate the risk of default. Thus, Eurobonds would not ruin Germany’s credit rating. On the contrary, they would compare favourably with the bonds of the United States, the United Kingdom, and Japan. To be sure, Eurobonds are not a panacea. The boost derived from Eurobonds may not be sufficient to ensure recovery; additional fiscal and/ or monetary stimulus may be needed. But having such a problem would be a luxury. More troubling, Eurobonds would not eliminate divergences in competitiveness. Individual countries would still need to undertake structural reforms. The EU would also need a banking union to make credit available on equal terms in every country. (The Cyprus rescue made the need more acute by making the field even more uneven.) But Germany’s acceptance of Eurobonds would transform the atmosphere and facilitate the needed reforms. Unfortunately, Germany remains adamantly opposed to Eurobonds. Since Chancellor Angela Merkel vetoed the idea, it has not been given any consideration. The German public does not recognise that agreeing to Eurobonds would be much less risky and costly than continuing to do only the minimum to preserve the euro. Germany has the right to reject Eurobonds. But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing them. If Germany is opposed to Eurobonds, it should consider leaving the euro. Surprisingly, Eurobonds issued by a Germany-less Eurozone would still compare favourably with those of the U.S., U.K., and

Japanese bonds. The reason is simple. Because all of the accumulated debt is denominated in euros, it makes all the difference which country leaves the euro.

Better off If Germany left, the euro would depreciate. The debtor countries would regain their competitiveness. Their debt would diminish in real terms and, if they issued Eurobonds, the threat of default would disappear. Their debt would suddenly become sustainable. At the same time, most of the burden of adjustment would fall on the countries that left the euro. Their exports would become less competitive, and they would encounter heavy competition from the rump euro zone in their home markets. They would also incur losses on their claims and investments denominated in euros. By contrast, if Italy left the euro zone, its euro-denominated debt burden would become unsustainable and would have to be restructured, plunging the global financial system into chaos. So, if anyone must leave, it should be Germany, not Italy. There is a strong case for Germany to decide whether to accept Eurobonds or leave the euro zone, but it is less

obvious which of the two alternatives would be better for the country. Only the German electorate is qualified to decide. If a referendum in Germany were held today, the supporters of a euro zone exit would win hands down. But more intensive consideration could change people’s mind. They would discover that the cost to Germany of authorising Eurobonds has been greatly exaggerated, and the cost of leaving the euro understated. The trouble is that Germany has not been forced to choose. It can continue to do no more than the minimum to preserve the euro. This is clearly Merkel’s preferred choice, at least until after the next election. Europe would be infinitely better off if Germany made a definitive choice between Eurobonds and a euro zone exit, regardless of the outcome; indeed, Germany would be better off as well. The situation is deteriorating, and, in the longer term, it is bound to become unsustainable. A disorderly disintegration resulting in mutual recriminations and unsettled claims would leave Europe worse off than it was when it embarked on the bold experiment of unification. Surely that is not in Germany’s interest. © Project Syndicate

16 |

business daily April 11, 2013

CLOSING EU probe to examine Mastercard fees

BHP expects China growth to moderate

Mastercard Inc. is being investigated by the European Commission over fees charged for card transactions made by people visiting Europe. The Commission said some of the firm’s “inter-bank fees and related practices may be anticompetitive”. The commission is already investigating rival Visa Inc. over similar practices. Mastercard, which said it would “fully co-operate” with regulators, could be fined up to US$740 million, or 10 percent of its 2012 revenue, if found guilty. The credit card firm said that it always aimed “to balance the interests of both consumers and retailers”.

BHP Billiton Ltd expects annual economic growth in China to moderate, saying prospects in its largest customer present its main business risk. “What you have seen over the last couple of years, I don’t expect the double digit growth rates to continue,” Graham Kerr, chief financial officer, said yesterday. “Their moderated growth is around the 7 to 8 percent mark for the next couple of years, then trending down toward the 6 percent mark.” “The biggest risk is clearly from our perspective what happens around the developing worlds, but predominantly China,” said Mr Kerr.

Cargo piles up as 2-week HK port strike drags on Li withstands port labour strike with Shenzhen its 14th day. The dispute, a rarity in Hong Kong’s free market economy, has caused delays of up to 60 hours at the port and is costing HIT about US$640,000 a day, according to Hong Kong media.

Shenzhen bet

triking dock workers at a port operator backed by Hong Kong’s richest man Li Ka Shing failed to reach a deal for higher pay on yesterday, prolonging a dispute that could cost the city its position as the world’s third-largest container port. Roughly 500 workers, who say they have not had a pay rise in 10 years even as the cost of living has soared, are demanding a hike of around 20 percent and better work conditions. “We raised some treatment issues, including meals, overtime and leave but hadn’t got to the issue of salaries before they said they needed to go for lunch,” said Wong Shiu Cheung, representative from the Union of Hong

Bird ‘flu outbreak tied to two viruses

hina’s deadly avian ‘flu outbreak is being driven by at least two closely-related viruses, a situation that may make it more difficult to contain in humans and birds, researchers said. The H7N9 ‘flu has shown signs of genetic diversity since the first three patients were diagnosed, said Richard Webby, director of a World Health Organization collaborating centre for the virus at St. Jude Children’s Research Hospital in

Kong Dockers, referring to talks with contractors for the port operator and labour department officials. “We told them … we would always be willing to talk to them, whenever they want, even at midnight. But there’s no response yet as to when the next meeting will be.” Port operator Hongkong International Terminals (HIT) has distanced itself from the dispute, saying it should be resolved by contractors who supply workers to the berths it operates. The Hong Kong Association of Freight Forwarding and Logistics estimates 120,000 twenty-foot equivalent units (TEUs) have stacked up during the strike, which is now in

Memphis. It already appears more infectious than the H5N1 strain of bird ‘flu that has been circulating since 2003, infecting 600 people and killing 60 percent of them, he said. “This virus might be getting more infectious to humans,” Mr Webby said. “If this is let spread from where it is now, it will evolve further. That’s what viruses do. If it isn’t contained now, that will almost certainly happen.” Scientists tracking the virus need more information about the ecosystems of birds in China, including those in live markets, feeder farms and wild populations, to better understand and tackle the virus, said Maria Zambon, director of the U.K.’s national influenza centre.

At one of the berths operated by HIT, workers waved banners denouncing Mr Li, who controls more than half of Hong Kong’s container port traffic, depicting him as an octopus snatching money from people. “It’s his fault that the strike has dragged on for so long,” said container dock worker Ng Mei-tak, 46. “As the richest man, with all those businesses, I hold him accountable for not stepping in and for the impact of this strike on the Hong Kong economy.” The strike has diverted some traffic to the neighbouring Chinese port of Shenzhen. But that won’t hurt Mr Li’s business since the billionaire controls that port as well. Terminals backed by Mr Li’s Hutchison Port Holdings Trust have a 46 percent market share in Shenzhen, helping Mr Li recoup any loss at the Pearl River Delta. “Li is smart in hedging his bets while maintaining dominance in key markets,” Lawrence Li, an analyst at UOB-Kay Hian Holdings Ltd said. “Even if more ships are diverted to neighbouring terminals or Shenzhen, he doesn’t have much to lose.” Reuters

That will provide a clearer view of how easily H7N9 spreads and how best to control it. “The distribution of the cases, which is over several hundred kilometres, without obvious epidemiological links, suggests that there are diverse sources,” she said. Local governments must collect tissue samples from birds at poultry markets nationwide in the hunt for the cause of the outbreak that’s killed nine people, Chinese officials said yesterday. While the number of cases has risen to 28, there is no evidence yet that the virus is spreading from human to human, World Health Organization officials said. Bloomberg News

OECD sees growth picking up Growth is picking up in most industrialised countries, including in the euro zone, the OECD said yesterday, with the United States leading the way. The Paris-based think tank’s composite leading indicator shows growth firming in Japan and picking up in China while the outlook is improving for Italy and France is stabilising. Growth is seen weakening in India, however, while indicators for Russia, Brazil and the United Kingdom point to growth around trend, the Organisation for Economic Cooperation and Development said. The monthly indicator for the 33 OECD member countries inched up to 100.5 in February from 100.4 in January, slightly above the long-term average of 100.0, a level last seen in October. The euro area’s indicator has been gradually increasing over the past months, now at 99.9 from 99.7 in January and 99.4 in October. France’s 99.6 reading, from 99.5 in January, suggests that there is no further decline in growth, while growth is picking up in Germany, the OECD said

Suntech may sell assets Cash-strapped Chinese solar panel maker Suntech Power Holdings Co Ltd is seeking to sell some assets and bring in a strategic investor to repay debt and revitalise the company, a person with direct knowledge of the matter told Reuters yesterday. “It is looking for buyers for some of its projects and downstream assets,” said the source, who asked not to be identified as he was not authorised to speak to the media. “It is also seeking to bring in a strategic investor to take a stake in the company.” “Suntech is in dire need of cash,” the source added. A spokesman for Suntech Power, whose shares are traded on the New York stock exchange, declined to comment. Suntech Power said last month its biggest subsidiary Wuxi Suntech was bankrupt but would undergo government-led restructuring. Suntech Power had total debts of US$2.2 billion at the end of March 2012,. The company defaulted on US$541 million of its dollar-denominated bonds due last month.

Obama budget targets millionaires The White House yesterday proposed a budget that sharply trims the U.S. deficit over three years by forcing millionaires to pay more in taxes and enacting spending cuts that replace the “sequester” reductions that went into place last month. President Barack Obama’s fiscal 2014 budget blueprint ensures that those making US$1 million a year or more would have to pay at least 30 percent of their income, after gifts to charity, in taxes, officials said. That increase, along with spending cuts and a 28 percent cap on tax deductions for high earners, would bring the U.S. budget deficit down to 2.8 percent of GDP by 2016, senior administration officials told reporters. The nonpartisan Congressional Budget Office in February projected the U.S. deficit to be 5.3 pct of GDP this year.