Macau Business Daily, April 16, 2013 by Business Daily

Year II Number 262 MOP 6.00 Tuesday April 16, 2013 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: Vitor Quintã www.macaubusinessdaily.com

Bus firms get payment hike, except for Reolian

Govt helpless over home pre-sales rush

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Solution in pipeline for gas firm A

no-win situation that is forcing the city’s only importer of natural gas to sell it for less than it pays could be resolved this month, Business Daily has learned. A key part of the problem is that the importer – Sinosky Energy (Holdings) Co Ltd – can’t currently get hold of much. A big offshore field is nearby, but Macau has been unable to import the stuff in any meaningful amounts since the middle of 2011. Construction work on Hengqin Island – where the undersea supply line makes landfall – has forced the pipe to close. With no access to proper supplies, Sinosky Energy can’t fulfil its contractual obligations to customers, making it hard to negotiate a new price with the government. More on page 3

I SSN 2226-8294

Clothing, hotel room hikes fuel tourist prices

Tour ops warned off charging for gambling Mainland authorities have issued a reminder to Chinese tour operators active in Macau not to charge commission for taking their clients to casinos. “When you organise more than 10 [PRC] residents to go to Macau to gamble, if you take commissions or so-called ‘introduction fees’ from there, you would be charged with gaming crime,” said the legal department of the mainland’s Public Security Bureau in a written reply to an online question put to an officially sanctioned forum.

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Brought to you by

The price of clothing and footwear increased faster than ever in the first quarter, making shopping trips more expensive for tourists. Those items were 20.9 percent more expensive in the first three months of 2013 than the same period a year earlier, the Statistics and Census Service announced yesterday. Overall the tourist price index increased by 7.9 percent year-onyear, the highest level since the first quarter of 2012. The price of travelling to Macau rose by 15.3 percent year-on-year, mostly due to costlier airline tickets, the bureau added.

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Air pollution worst in three years

2013-04-16

2013-04-17

2013-04-18

20˚ 25˚

21˚ 25˚

22˚ 26˚

HANG SENG INDEX 22000

21948

21896

21844

21792

21740

April 15

Macau’s air pollution index reached the worst level in over two years. The problem is pollutants from mainland China trapped by lack of air flow, the Meteorological and Geophysical Bureau said. The air pollution index reached 183 in the territory’s roadside stations and 162 in northern Macau, which is classified as ‘bad’ according to the bureau’s website. The authorities advise people with cardiac and respiratory diseases to reduce physical exercise and outdoor activities when the air pollution levels are ‘bad’.

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HSI - MOVERS Name

%Day

HUTCHISON WHAMPO

0.74

CHINA MERCHANT

0.61

COSCO PAC LTD

0.20

SWIRE PACIFIC-A

-0.11

HENGAN INTL

-0.13

WANT WANT CHINA

-2.63

CHINA PETROLEU-H

-2.93

CNOOC LTD

-3.10

TINGYI HLDG CO

-3.33

CHINA RES POWER

-5.99

Source: Bloomberg

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business daily April 16, 2013

macau

Tour ops warned off charging mainlanders for gambling Technically a crime to charge commission to PRC citizens for taking them to a casino Michael Grimes

michael.grimes@macaubusinessdaily.com

ainland authorities have issued a reminder to Chinese tour operators active in Macau not to charge commission for taking their clients to casinos. “When you organise more than 10 [PRC] residents to go to Macau to gamble, if you take commissions or so-called ‘introduction fees’ from there, you would be charged with gaming crime,” said the legal department of the mainland’s Public Security Bureau in a written reply to an online question put to an officially sanctioned forum. The answer was supposedly in response to a citizen’s question on www.people.com.cn, a Chineselanguage website run by The People’s Daily, an official government newspaper. The timing of the statement has led some commentators to wonder whether it’s linked to any tightening of controls on Chinese people gambling in Macau. But an industry source told

Macau visas easier to come by for escorted groups

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ORGANISED BY:

LVS ‘no comment’ on special dividend

as Vegas Sands Corp. declined to comment yesterday on a Bloomberg News report that the casino investor and operator is to discuss at its next board meeting due later this month returning more cash to shareholders. But a person familiar with the situation told Business Daily: “I think it’s premature to be talking about that.” The firm’s chairman and founder Sheldon Adelson – a controller of 52 percent of the stock according

Melco Crown Manila shares on private offer

elco Crown Entertainment Ltd’s funding of its Philippines casino venture will be by private placement rather than public offering, according to a term sheet seen by Dow Jones Newswires. It says the exercise seeks to raise US$377 million by selling about 1.1 billion shares. The money will go toward the fitting out and management of the Belle Grande Manila Bay casino resort

Business Daily yesterday: “I don’t think it’s anything to panic about. It’s housekeeping by the mainland authorities and reminding everyone who’s in charge.” The person added: “The problem is that escorted tours are supposed to be for less welloff tourists and with an emphasis on culture and shopping. But some visitors are using them to go gambling.” The question ‘Is it illegal [for PRC residents] to gamble in Macau?’ was put online on January 2 as part of what was billed as a regular series of question and answer sessions between so-called netizens and China’s Public Security Bureau.

Question answer The question was answered by the bureau’s legal department on April 11. The reply was also republished on a website of China Daily – another official newspaper – and on www. legal.china.com.cn. The latter is a site authorised by the State Council – the chief administrative body of the People’s Republic of China. The answer added that seeking commissions to take people gambling involved breaches of the mainland’s criminal law, laws governing financial securities transactions, and administrative notices issued to the Public Security Bureau. The answer also stressed that the offence related to PRC citizens and PRC law, and that Macau had its own legal system. “According to the Basic Law, Macau has its own independent judicial rights,” stated the bureau’s answer. With Stephanie Lai

to regulatory filings – has made no secret however of his desire to return money to stockholders. It paid US$3.09 billion (24.7 billion patacas) in dividends last year, including a US$2.75-a-share special payment in December, according to its annual report. “As the company’s largest shareholder, I naturally have a vested interest of pursuing only projects that will maximise shareholder returns. Your interests and my interests are aligned,” Mr Adelson told the market via a conference call with analysts in January. Bloomberg suggested the firm would announce either a special dividend or stock buy back. The latter would concentrate value for existing investors. M.G.

being developed jointly with Filipino Chinese businessman Henry Sy. Private placements of stock – usually to sophisticated investors such as fund managers and high net worth individuals – typically have a lock up period preventing investors from taking short-term profits. Disclosures about risk are fewer than in a public offering. A finance industry source told Business Daily: “This suggests Melco Crown has had very strong interest.” Melco Crown (Philippines) Resorts Corp. – an off the shelf Manila-listed entity formerly known as Manchester International Holdings Unlimited Corp. – will use the cash toward the US$1 billion cost of the already partbuilt scheme. M.G.

April 16, 2013 business daily | 3

MACAU

Sinosky aiming for deal on gas from mainland The city’s only supplier of natural gas is uncertain whether it can fully restore supplies this year Tony Lai

tony.lai@macaubusinessdaily.com

We believe in the Macau government and we hope to settle the issue in a peaceful manner Stella Bai, deputy general manager, Sinosky Energy

Sinosky Energy has accumulated losses of 119.5 million patacas since early 2008

acau’s only importer of natural gas, Sinosky Energy (Holdings) Co Ltd, is hoping to agree this month a long-term deal to secure its supply from the mainland, although the price it would pay has yet to be decided. “The government has always hoped for a stable gas supply to Macau, so we are following their requests and discussing a longterm contract with the upstream company,” Sinosky Energy deputy general manager Stella Bai told Business Daily. Ms Bai said the contract would ensure a stable supply of gas from fields in the South China Sea for at least four years. Sinosky Energy is a joint venture between Macau Natural Gas Co Ltd and China Petroleum & Chemical Corp (Sinopec). The natural gas importer and the supplier could reach a preliminary agreement “before the end of this month”, she said. The price had yet to be set but Sinosky intends on approaching the government to increase the price consumers pay. Sinosky Energy said in its annual report, published last week, that the present import price was 4.60 patacas (US$0.58) a cubic metre. “Around 4.60 patacas is only the initial estimate and we will surely try our best to lower the price to suit the interests of Macau,” said Ms Bai. She said her company would submit to the government all information relevant to the negotiation of an increase in the price Sinosky Energy charges for its gas. The company reported a loss of 28.63 million patacas last year,

bringing its accumulated losses since it began importing gas in 2008 to 119.5 million patacas. Ms Bai said the company had suffered financial strain caused by increases in the import price since 2010 – increases due to the higher cost of gas in the international market and the strengthening of the yuan.

Deserved return The price Sinosky Energy is allowed to charge for its gas under its 15-year concession contract with the government is 2.74 patacas a cubic metre, less than it pays for it. Ms Bai declined to say what price her company would like to charge. “If we import the gas at 4.60

KEY POINTS Long-term natural gas supply contract in the works Sinosky Energy eyes ‘win-win’ agreement on gas price rise CEM’s gas reconnection could be postponed to next year Leak in underwater pipeline yet to be plugged

patacas, we surely have to earn money,” she said. “We also hope, through a review with the government, to get back our deserved return of 9 percent.” Sinosky Energy’s concession contract says the maximum annual return on investment it is allowed is 9 percent. Ms Bai said the company hoped to reach by the middle of this year a “win-win agreement” with the government on price. The head of the Office for the Development of the Energy Sector, Arnaldo Santos, said last month: “There is no information at the current stage about a new natural gas price.” Asked whether Sinosky Energy would take legal action if the government declined its request for a price increase, Ms Bai said: “We believe in the Macau government and we hope to settle the issue in a peaceful manner.” Sinosky Energy’s chairman and executive director, Michael Tong Seak Kan, had previously said his company might take its case for a higher price to court. Ms Bai said: “We understand we have our own obligation as a concessionaire, so we will strive for a better import price for Macau in negotiating with the upstream supplier.”

Question of supply Electricity distributor Companhia de Electricidade de Macau SA (CEM) said last week the government should be “cautious”, because more expensive natural gas could mean more expensive electricity.

CEM can generate electricity more cheaply by burning Sinosky Energy natural gas than by burning diesel. Another Sinosky Energy customer is state-owned Companhia de Gás Natural Nam Kwong Ltd, which will supply natural gas to homes and businesses. Ms Bai said her company was able to supply Nam Kwong through temporary connections but could not ensure that its supply to CEM would be resumed this year. Macau has been unable to import natural gas since the middle of 2011 because of construction work on Hengqin Island and a leak in the undersea section of the gas pipeline. Ms Bai is uncertain whether the supply will be restored this year. The state-run news agency Xinhua reported in January than a new gas pipeline between Zhuhai and Macau, 7.7-km long, would be ready by June. Ms Bai added the new pipeline would not solve the problem of the leak in the undersea section of the pipeline. She said plugging the leak posed huge technical challenges. “If the challenges were not big, they could have immediately repaired the section at the time of the leak,” she said. “We have not heard of a detailed timetable for repairing it.” Ms Bai said her company was “very optimistic” about the future. The government’s endorsement of natural gas would help turn around Sinosky Energy’s business “soon”, she said. Nam Kwong is set to build over the next few years a pipe network to supply the city with gas.

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business daily April 16, 2013

macau Wynn Macau confirms 2012 dividend Wynn Macau Ltd has confirmed it’s to declare a final dividend of HK1.24 (US$0.16) per share for 2012 at the annual general meeting in Macau on May 16. It said so in a Hong Kong Stock Exchange filing. The Macau casino operator’s profits attributable to shareholders rose 8.8 percent last year on casino revenues that actually fell 3.8 percent year-on-year. In 2011 it gave a special dividend of HK$1.20 per share. The meeting will also confirm Linda Chen – chief operating officer of Wynn Macau and president of Wynn International Marketing Ltd – as an executive director of Wynn Macau.

Venetian fined for U.S. file transfer

Clothes and shoes were 20.9 percent more expensive in the first quarter than a year earlier

Gaming operator declined to appeal from case linked to former executive Vítor Quintã

vitorquinta@macaubusinessdaily.com

Costlier clothes, hotels boost tourist inflation Prices paid by tourists rise at the fastest annual rate seen for a year Vítor Quintã

vitorquinta@macaubusinessdaily.com

rices of clothes and shoes increased faster than ever in the past 12 months, meaning tourists found their money did not go so far, the latest official data show. Clothes and shoes were 20.9 percent more expensive in the first quarter of this year than a year earlier, the Statistics and Census Service announced yesterday. The statistics service said the increase had been due mostly to dearer handbags and men’s clothes. Handbags became 26.8 percent more expensive in the past 12 months, while prices of men’s jackets rose by 38.9 percent. The rates charged for hotel rooms – the biggest single expense for most visitors – increased by 6.3 percent. It became more expensive to get here, the cost of cross-border travel rising by 15.3 percent, mostly because of costlier airline tickets. In contrast, prices of telecommunications equipment – purchases popular among mainland Chinese visitors – fell by 13.3 percent.

Last year Macau imported about 1.01 billion patacas (US$126.6 million) worth of mobile phones, official data show. The Statistics and Census Service said all this meant the annual rate of tourist price inflation was 7.9 percent in the 12 months ended March 31, the highest annual rate since the first

13.3 %

Drop in prices of telecommunications equipment

quarter of last year. The statistics service said tourist price inflation had been influenced by price rises in general during the Lunar New Year holidays and by an increase of 6.1 percent in the cost of meals in restaurants. The consumer price index for March, showing inflation as it affects everybody, will be published next week. The annual rate of consumer price inflation was 5.6 percent in January and February. The annual rate of tourist price inflation in the first quarter was probably faster than consumer price inflation. Despite increases during the Lunar New Year, tourist prices were just 0.28 percent higher in the first quarter than in the preceding quarter. In the fourth quarter of last year tourist prices were 11 percent higher in the preceding quarter, the highest quarterly rate of inflation since the statistics service began publishing tourist price data in 2000.

aming concessionaire Venetian Macau Ltd has paid a fine of 40,000 patacas (US$5,000) for breaching the privacy law in a case linked to the company’s former chief executive Steve Jacobs. The Personal Data Protection Office confirmed to Business Daily that Venetian decided not to appeal from the decision and has already paid the fine. An investigation concluded that Venetian made an ‘illegitimate’ transfer of documents from a computer used by Mr Jacobs to the United States in 2010 without prior authorisation from the local watchdog. According to a press statement from the data office, the concessionaire admitted it made the transfer “to prepare for the counter argument of a possible lawsuit” to be initiated by Mr Jacobs. The watchdog criticised the company for this move, stressing any data “should be provided to a judicial authority instead of another private entity”. On the other hand, Venetian said it is also preparing to sue the former executive for “theft of confidential information and violation of professional secrecy”. There is no “reasonable basis” for Venetian to file a lawsuit in the United States, the data office added, considering that the company is Macau-based and that the alleged crimes happened in Macau. Mr Jacobs sued Venetian’s parent company Las Vegas Sands Corp in a Nevada court in October 2010 for wrongful termination. The company says he was dismissed for “cause”. Venetian disregarded the interests and safeguards of third parties whose data was included in the “unselected or unfiltered” documents transferred from Macau, the data office said. Venetian was “only trying to achieve and maintain its own interests,” the watchdog wrote. Business Daily asked for a comment from Venetian but received no reply before press time. Last month the data office revealed that another gaming operator, Wynn Macau Ltd, was fined 20,000 patacas for publicly disclosing personal information of hotel guests as part of a report on removed director Kazuo Okada.

April 16, 2013 business daily | 5

MACAU

Govt to pay just two bus operators more Reolian has yet to get any increase in what it is paid to run its services Stephanie Lai

sw.lai@macaubusinessdaily.com

he government announced yesterday that it will increase what it pays two of the three bus operators by 23.3 percent or 645.5 million patacas (US$80.7 million). Transportes Urbanos de Macau SARL (Transmac) will get an extra 474.8 million patacas to run its buses from this year until 2018, and Sociedade de Transportes Colectivos de Macau SARL (TCM) will get an extra 166.7 million patacas. Transmac, TCM and the third bus operator, Reolian Public Transport Co Ltd, asked for more money last June, and the government granted their request. But in the face of a public outcry the government froze the increase. The Transport Bureau has said the increase for Transmac and TCM will be backdated only to January 1. Transport Bureau head Wong Wang told reporters on the sidelines of a Legislative Assembly meeting that the quality of bus services between June and December and feedback from the public were important influences on his bureau’s decision. The concession contracts say that what the operators are paid to run the buses depends on prices in general and fuel and labour costs in particular,

but do not count the quality of the bus services as a factor. The bus operators have told Business Daily that the terms of their contracts have not changed in the past 12 months. Asked if backdating the increase to January instead of June could lead to the operators suing the government, Mr Wong said: “We will face what we have to face”.

Different treatment The deputy general manager of Reolian, Abel Kuok Tong Cheong, told Business Daily after a meeting with the Transport Bureau yesterday that his company did not know when it might receive any increase. “We are aware of the service quality issue, but we also hope to receive the same treatment as the other companies do, because we do provide the same bus service,” Mr Kuok said. “And we have to stress that the payment adjustment mechanism is not to boost profits, but to compensate for the increase in our operating costs.” Reolian and Transmac have told Business Daily that they have received no word on how the government may make any future changes in what it

Transmac and TCM will together receive a further 645.5 million patacas to run their buses

pays them dependent the quality of their services. Mr Wong said a service quality assessment system was still being devised. His bureau would use service quality assessments as an important reference in deciding in future whether to pay the operators more or to give them more routes to serve, he said. Legislative Assembly member Vitor Cheung Lup Kwan urged the government to be more open about the financial performance of the bus companies. “If an operator still loses money even if the government subsidises it

so much, then the company deserves a payment increase,” Mr Cheung told the assembly. Mr Kuok said the government’s delay in increasing the amount it pays Reolian had aggravated the pressure on his company. Reolian made a loss of 58.5 million patacas in 2011 due to higher fuel prices and an increase of 90 percent in the wages of its drivers. Last year’s results were similar, Mr Kuok said. “If the payment increase is not granted, our loss will definitely widen,” he said. With Tony Lai

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business daily April 16, 2013

macau

Govt toothless on pre-sales rush Areia Preta developer said to have started pre-sales without official approval for the land plot Tony Lai

tony.lai@macaubusinessdaily.com

he government admitted it can do nothing more to prevent the pre-selling of unfinished flats before a bill regulating such activity becomes law. Such marketing of a housing project in Areia Preta – before the ground is even been broken for construction – has highlighted the issue. The government claimed the developer had started pre-sales without the land plot being officially approved. According to real estate agencies spoken to by Business Daily, the developer Polytex Corp Ltd has not halted pre-sales of its high-end residential project Pearl Horizon. The government had said it is yet to approve the floor plan. A spokesperson for real estate agency Anzac Realty said, “Right now we have received no information on any change on the sales relating to Pearl Horizon.” Jaime Carion, director of the Land, Public Works and Transport Bureau, on Friday urged developers to exercise “self-discipline” on sales of unfinished

MTEL to get licence by June

ompanhia de Telecomunicações de MTEL, Ltda, the sole bidder for opening up the landline telecommunications market, can possibly get the licence by June, said Lawrence Tou Veng Keong, head of the Telecommunications Regulation Bureau.

projects prior to the bill regulating pre-sales coming into force. The law is expected to have a final reading at the Legislative Assembly next month. “We have received some calls from customers concerned about the project but they were all reassured after our explanations,” Marco Wong, district sales director of HKP Estate Agency (Macau) Ltd, said. “No one asked for a refund.” Mr Wong said buyers could still get a mortgage from the banks here, adding that buyers have shown trust in the developer. It has been building homes here for more than a decade.

Jaime Carion urges developers to exercise ‘self-discipline’ in presales

High demand A c co r d i n g to d a ta fr o m Mr Carion’s department, more than 2,000 apartments – of some 5,000 flats in that project – have been sold. “Our company will not sell any flats without the government’s approval,” a Polytex spokesperson told Business Daily without providing

more details. But Mr Carion yesterday disputed that claim. “The review of the [Pearl Horizon] development proposal is in its final stage after several revisions and it will be approved soon,” he said. He urged developers to keep to previous good practice – only

A decision on MTEL’s bid will be “ready in this first half,” Mr Tou told reporters yesterday on the sidelines of a Legislative Assembly session. He did not comment on the result but hinted that MTEL’s proposal was “good”, fulfilling all the requirements. Companhia de Telecomunicações de Macau SARL (CTM) currently holds a monopoly in the landline services. Mr Tou said the review of the bid was taking so much time because the company had to submit additional documents to the regulator. The

government also had to have a full grasp of the financial situation and capability of the company, he added. MTEL’s bid was submitted on March 28, 2012. MTEL is to set up a joint venture with Chinese telecommunication equipment and network solutions provider ZTE Corp. and invest up to one billion patacas (US$125 million), the company said last year. Assembly members yesterday slammed the administration for being slow in handling the process, accusing the regulator of being “unprepared”.

Two years ago Essential Macau was first published, defining what is luxury in town. In the same month but one year later, in 2012, Business Daily the group’s first newspaper was launched. From then on we gave luxury a name and we defined business with a colour!

T.L.

beginning sales after the floor plan is approved. Mr Carion was speaking on the sidelines of an assembly session. Apart from the Pearl Horizon project, the same developer has also started pre-sales of an unnamed project in the same district, estate agents told Business Daily. “That project consists of six blocks up to some 40 floors,” said Mr Wong. “The developer has already put out one block for sale and 95 percent of those flats were sold.” Mr Carion said the land plot has not yet been officially granted, since it was not yet published in the Official Gazette. “But it is in the final stage and what is lacking now is a confirmation from the developer on the final version of the land concession,” the government official said. “We can do nothing without the law,” he stressed. “Even if we now find out what is being done, is it illegal?” But Mr Carion declined to say whether the warning came too late as Polytex had started pre-sales on those two projects in November last year.

April 16, 2013 business daily | 7

MACAU

Air pollution worst for three years Air of ‘bad’ quality that has wafted in from mainland China will remain a problem Vítor Quintã

vitorquinta@macaubusinessdaily.com

acau’s air pollution index has reached its highest level for over two years as pollutants from mainland China linger here in the absence of sufficient wind to disperse them, the Meteorological and Geophysical Bureau has said. The air pollution index has reached 183 at roadside stations and 162 in the north of the city, both levels being classified as “bad”, according to the bureau’s website. The authorities advise people with cardiac or respiratory conditions to reduce physical exercise and activity outdoors when the air pollution levels are bad. Air pollution is now at its worst since March 2010, when the index reached 329 in the north of the city, a level classified as “severe”. A spokesperson for the Meteorological and Geophysical Bureau told Business Daily that the deterioration in the quality of the air was due mostly to a spike in the concentration of fine particles, smaller than 2.5 micrometres. The bureau measured the concentration at roadside stations at almost 180 micrograms per cubic metre at 10am yesterday and again at 4pm. World Health Organisation’s air quality guidelines say a safe concentration is an average of 10 micrograms of fine particles per cubic metre in any one year.

“Northerly winds have brought pollution from China, which has accumulated over Macau due to a lack of air flow,” the spokesperson said. The bureau expects air pollution to remain “almost the same” today. “It all depends on the wind speed. When the wind speed picks up the air quality will improve,” the spokesperson said. He said steady rain forecast for the rest of the week would also help to clear the air. Hong Kong’s air pollution index reached the severe level for the third time this year, prompting the government to issue warnings. The air pollution index was 207 at the Central roadside monitoring station at 2pm yesterday and 203 at the Mong Kok roadside monitoring station, according to the Hong Kong Environment Protection Department. “Poor dispersion of air pollutants and a high regional background air pollution level” was the cause, the department said on its website. The Hong Kong government said the public should avoid prolonged stays in areas with heavy traffic and reduce physical exertion. The Education Bureau there asked schools to cut down on physical activities in the next few days, and the Labour Department said employers should assess the risk of outdoor work. With Bloomberg News

Pataca continues to recover T he pataca has appreciated against the currencies of the city’s main trading partners for the third consecutive month, the Monetary Authority of Macau revealed yesterday. The pataca’s trade-weighted effective exchange rate index rose by 0.89 points from February to 98.25 points in March, the highest since August. In September the U.S. Federal Reserve put out a third round of money printing to boost its economy, better known as quantitative easing. The city’s currency, indirectlypegged to the U.S. dollar through the Hong Kong dollar, was hit then by a depreciating trend. Despite the first quarter recover the index remains far from the 105-point

mark it reached in June 2010. The yuan has appreciated by 9.9 percent since June 2010, data from the Monetary Authority show. Because mainland China is the city’s biggest trading partner, imports have become more expensive, fuelling high inflation. The pataca has also lost ground in the last three years against the currencies of Macau’s other main trading partners, including the European Union. Macau’s foreign exchange reserves fell for a second consecutive month to 129.9 billion patacas (US$16.2 billion) at the end of March. The territory’s foreign exchange reserves at end-March represented 16 times the currency in circulation. V.Q.

Correction No free-trade deal with Chile In yesterday’s edition we published an article titled ‘Chile eyes free-trade deal’, according to which Mario Artaza, the consul of Chile in Hong Kong and Macau, had said the country would like to sign a free trade deal with Macau. But Mr Artaza made no direct mention of such an intention when speaking to Business Daily. Chile has signed a free trade deal with Hong Kong in order to improve bilateral ties. Mr Artaza said it would like “to move in the same direction”, which meant enhancing bilateral trade with Macau. For the inaccuracy we apologise to our readers and to Mr Artaza.

A high concentration of fine particles has worsened air quality in Macau and Hong Kong

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business daily April 16, 2013

GREATER CHINA

Growth loses momentum in blow to global expansion Chinese economy performed worse than analysts expected in first quarter

hina’s economic growth unexpectedly lost momentum in the first quarter as gains in factory output and consumption weakened, driving stocks and commodities lower on concern global expansion will slow. Gross domestic product rose 7.7 percent from a year earlier, the National Bureau of Statistics said in Beijing yesterday. That compares with the 8 percent median forecast in a Bloomberg News survey of 41 analysts and 7.9 percent in the fourth quarter. March industrial production increased less than estimated while retail-sales growth matched forecasts. Yesterday’s data add to concerns the global recovery is struggling, with the International Monetary Fund set to lower its forecast for U.S. growth and investor George Soros warning that Germany will probably be in recession by the end of September. Moderating inflation may give new Premier Li Keqiang more room to boost domestic demand as the euroarea debt crisis clouds the outlook for exports.

The disappointing data show the recovery is much weaker and bumpier than expected, dragged down by soft domestic demand Zhu Haibin, JPMorgan Chase & Co.

Retail sales saw a gentle uptick of 12.6 percent year-on-year

“The disappointing data show the recovery is much weaker and bumpier than expected, dragged down by soft domestic demand,” said Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong. The expansion in credit so far this year may help growth pick up in the second quarter, and authorities may ease efforts to rein in so-called shadow banking while boosting spending in areas including health care and environmental protection, Mr Zhu said.

‘Stable’ economy First-quarter expansion was lower than all except two analyst estimates out of 41 ranging from 7.5 percent to 8.3 percent. October-December growth showed the first acceleration in two years, up from the third quarter’s 7.4 percent rate. For 2012,

expansion was 7.8 percent, the least since 1999. The statistics bureau characterised the economy in the first quarter as “stable,” with Sheng Laiyun, a spokesman, saying the expansion rate isn’t low compared with other nations. China’s new leadership is putting more emphasis on quality of growth, and urbanisation will continue to create demand, Mr Sheng said at a briefing in Beijing.

March output While the economy has had a smooth start to the year, China still faces a complex situation due to instability and uncertainty domestically and abroad, Premier Li said in comments published on Sunday by the official Xinhua news agency. China’s industrial output in

March rose 8.9 percent, yesterday’s report showed. That compares to a 9.9 percent pace in the first two months combined. Retail sales grew 12.6 percent, matching the median forecast. Fixed-asset investment excluding rural households in the first quarter increased 20.9 percent, against a median estimate of 21.3 percent and a 21.2 percent pace in the first two months. The data reflect a slowdown in light industrial production, “weak” consumption partly affected by a government frugality campaign and export gains that aren’t as strong as customs figures suggest, said Wang Tao, chief China economist at UBS AG in Hong Kong. Even so, “we do not think the government should ease monetary policy further” because of “very rapid” credit growth and low interest rates, Ms Wang said.

March property investment slows Strong sales likely to ease on new tightening curbs

hina’s real estate investment growth slowed in the first quarter, dragging down the broad economic recovery, though property sales remained strong, pushing up home prices and prompting policymakers to tighten property policies. Real estate investment, which was worth 11 percent of GDP in first quarter of 2013 and directly impacts around 40 other business sectors, rose 20.2 percent in the first three months of 2013 from a year earlier, the National Bureau of Statistics said yesterday. That was slower than an annual increase of 22.8 percent in JanuaryFebruary. Revenues from property sales in March rose 46.5 percent from a year earlier, marking the second highest monthly gain since July 2011, though

cooling from annual growth of 77.6 percent in the first two months, according to Reuters calculations based on official data. Strong property sales, alongside with rising home prices, have sparked concerns that home costs could start to spiral out of control and have forced the government to launch a fresh round of measures last month to try to cool them. Some economists are worried that the new tighter property policies could drag down the overall economy, which grew 7.7 percent in the first quarter from a year earlier. “The slowing property investment has some effect on dragging down the broader economic growth, especially when the government has already taken tightening measures to cool this sector,” said Li Huiyong, econmist

at Shenyin & Wanguo Securities Co. Ltd in Shanghai. China’s central government said last month that it planned to introduce a 20 percent capital gains tax and higher down payments and mortgage rates for second-time home buyers in cities where prices were deemed to be rising too fast. China’s major cities have unveiled strict property controls, including Beijing raising minimum down payments on second home purchases to 70 percent of valuation from 60 percent. Analysts say the revival in home sales might be short-lived after local governments unveiled detailed plans for implementing new curbs as home buyers rush to finalise deals to avoid the new capital gain tax. China’s home prices have seen

a gentle upswing since around the middle of last year when the central bank began to expand monetary easing as part of Beijing’s growthsupporting policies. Average new home prices in 70 major cities climbed 2.1 percent year on year in February despite the government having tried to calm the house market over the last three years. Reuters

April 16, 2013 business daily | 9

GREATER CHINA

Glencore concessions expected for Xstrata deal Ministry of Commerce likely to make a decision this week

US$32 billion

Glencore will pay to acquire the miner

Industrial-production growth of 9.5 percent for the first quarter compared with the previous period’s 10 percent, while retailsales expansion of 12.6 percent was lower than 14.5 percent in the fourth quarter.

Service industries Services accounted for 47.8 percent of the economy in the first period, generating more of GDP than the “secondary” industries that include manufacturing, mining and construction, which accounted for 45.9 percent. Louis Kuijs, chief China economist at Royal Bank of Scotland Plc in Hong Kong, cut his estimate for 2013 growth after the data to 7.8 percent from 8.4 percent. The government last month set a 7.5 percent growth target for this year and Mr Li said last month that the nation must maintain that pace through 2020 as the country seeks to double per capita income this decade. Mr Sheng said he’s optimistic China will achieve the goal this year, as the nation’s economic fundamentals remain sound. Separately yesterday, the World Bank cut its forecast for China’s growth this year to 8.3 percent from 8.4 percent, as it updated projections for the East Asia and Pacific region. The IMF may lower its U.S. expansion outlook to 1.7 percent from 2 percent, according to a draft report obtained by Bloomberg News ahead of today’s release. Bloomberg News

Xstrata deal might include asset sales

rader Glencore International Plc is expected to agree to concessions this week to ease Chinese worries over its grip on the supply of copper, clearing the final regulatory hurdle in its US$32 billion acquisition of miner Xstrata Plc. After months of negotiations, Glencore is expected to have agreed to yield some ground, with analysts and market sources pointing to a likely sale from among Xstrata’s promising – though challenging – greenfield copper projects, which could include Las Bambas in Peru, due to begin production in 2015. Industry sources said a solution might also involve giving China a guaranteed slice of the group’s copper production. Xstrata is already the world’s fourth-largest producer of copper and aims to increase output by more than 50 percent from 2011 levels by

2015, as projects like the US$5.2 billion Las Bambas mine ramp up. Xstrata and Glencore combined account for around 7 percent of global copper supply, a percentage expected to rise, with mines in Chile, Peru, Australia and in emerging regions like Africa’s copper belt. As a result, Chinese regulators reviewing the biggest ever mining tie-up have focused on the new group’s presence in the red metal, and specifically copper concentrate, the intermediate product that feeds smelters and refineries. Though China’s Ministry of Commerce (MOFCOM) has only rarely imposed conditions on deals, China is the biggest buyer of the minerals Glencore and Xstrata trade and mine. Its regulator – the only major global watchdog with an overtly political brief – is not deaf to the country’s hunger for copper, or

to its ambition to process more of the metal at home. If China reaches a deal with Glencore and makes its verdict known this week, Glencore will be able to meet its revised completion deadline of May 2. Glencore declined to comment. “It is about value and political capital, rather than about just repairing the market,” said analyst Paul Gait at Sanford Bernstein in London. “Clearly the Chinese are short of copper and iron ore – and those they care a lot about, and iron ore is not an issue for Glencore Xstrata.” The European Union’s decision to require action is also said to have emboldened China. Regulators in Brussels demanded Glencore scrap an exclusive European zinc sales agreement with producer Nyrstar and sell its equity stake. Reuters

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business daily April 16, 2013

ASIA

World Bank cuts Asia growth estimate Strong growth expected but overheating a risk, lender says

ast Asian and Pacific economies will grow 7.8 percent this year on robust domestic demand, the World Bank said yesterday, but it warned countries to guard against overheating in credit and asset prices. The forecast is below its December estimate of 7.9 percent but faster than last year’s 7.5 percent, but the bank said in its latest East Asia and Pacific Update report that expansion would then drop to 7.6 percent next year. Domestic demand will underpin the rise after the region contributed 40 percent of global growth last year. Global risks arising from the euro zone debt crisis and U.S. fiscal showdown have abated and there are signs of an economic turnaround in advanced economies, which bodes well for Asia’s exports, the bank added. However, one emerging issue is “the risk of overheating” in some of the region’s larger economies, it said. Near-zero interest rates and easy monetary policies in the U.S., the European Union and Japan have led to a massive exodus of money from these countries into emerging markets, including those in Asia, where they can get higher returns. The inflow has boosted property and stock prices but there are fears of an asset bubble that could collapse once the funds are withdrawn as quickly as they came in. Combined with the funds influx, domestic stimulus measures – including low interest rates – implemented by governments to boost demand as exports waned have led to higher levels of debt and inflation. “Continued demand-boosting measures may now be counter-

productive as it could add to inflationary pressure,” said Bert Hofman, the bank’s chief regional economist. “A strong rebound in capital inflows to the region induced by protracted rounds of quantitative easing in the U.S., EU and Japan, may amplify credit and asset price risks,” he added.

Asset boom

the amount of cash that found its way into Asian stock markets more than doubled year-on-year to US$13.2 billion from US$5.6 billion. “The risk of an asset boom in the markets in which global liquidity spills over is emerging, with asset valuations moving ahead of fundamentals and possibly a correction down the road,” the bank said. “Stock market indices have surged

by 56 percent in the Philippines and 48 percent in Thailand in the past 14 months alone,” it noted. Debt accumulation by governments, companies and households has also increased, the bank said. In its latest East Asia and Pacific Update, the bank cut its GDP growth projection for China by 0.1 percentage point to 8.3 percent for

Gross capital flows into the region amounted to US$46.8 billion in the first three months of this year, up 86.3 percent from a year ago, the bank said. It also said that in the same period

Continued demandboosting measures may now be counterproductive as it could add to inflationary pressure Bert Hofman, East Asia and Pacific Region Chief Economist, World Bank

Indonesia – investment growth to moderate, says World Bank

India inflation rate eases to 3-year low Boosts case for central bank to cut rates to help revive economy

ndian inflation eased in March by more than economists estimated to a 40-month low, boosting the case for an interest-rate cut to revive a struggling economy. The wholesale-price index rose 5.96 percent from a year earlier, after climbing 6.84 percent in February, the Commerce Ministry said in a statement in New Delhi yesterday. The median of 29 estimates in a Bloomberg News survey was 6.27 percent. India’s central bank has lowered borrowing costs twice in 2013 to spur investment, after the government pared the budget deficit to help curb price increases and eased caps on capital inflows to fund a record current-account gap. The risk of stoking imports as exports struggle, and consumer inflation exceeding 10 percent, limited each rate cut to 25 basis points. “Moderating price gains may encourage the Reserve Bank of India to extend limited monetary easing,” Rupa Rege Nitsure, an economist at Bank of Baroda in Mumbai, said before the data. Inflation remains stubborn and elevated, Reserve Bank Governor Duvvuri Subbarao said this month. The shortfall in the current account is above sustainable levels, he added.

Finance Minister Palaniappan Chidambaram is touring Canada and the U.S. to woo foreign investors, after estimating Asia’s No. 3 economy may need more than US$75 billion annually to fund the imbalance in the widest measure of trade. Inward shipments of gold and oil have contributed to the deficit. Food and fuel prices have stoked inflation. Imports have also fanned the cost of living following a drop of about 6 percent in the rupee in the past year. Still, Mr Subbarao has lowered the repurchase rate to 7.5 percent this year to aid growth. The statistics agency estimates the economy expanded 5 percent in the year ended March, the least since 2003, amid an uneven global recovery. India’s government changed policies in September to stem the slowdown ahead of a general election due by May 2014. The steps have included opening retail and aviation to more foreign investment, allowing higher diesel prices to curb energy subsidies, lowering levies on overseas borrowing, easing restrictions on bond purchases by investors abroad and setting up a panel to speed up infrastructure projects. Bloomberg News

Wholesale inflation rate slipped below 6 pct as prices of primary articles eased

April 16, 2013 business daily | 11

ASIA 2013. The international lender also lowered its forecast for Indonesia to 6.2 percent from 6.3 percent due to an expected moderation in investment growth, but raised its growth outlook for Thailand and Malaysia. The bank urged governments in the region to channel the funds to productive activities by investing the money in infrastructure and human capital to sustain high growth. “Beyond raising the level and quality of investment, the region must regain its focus on improving productivity,” the bank said. It urged policymakers to be prepared to withdraw the domestic stimulus measures as the global economy recovers. AFP

Woori chairman BOJ’s easing to to step down backfire: Fujimaki

oori Finance Holdings Co. chairman Lee Pal-seung plans to step down ahead of the South Korean government’s fourth attempt to find a buyer for its stake in the country’s biggest financial services group. Mr Lee, who has been chairman and chief executive since June 2008, announced his resignation on Sunday without giving a reason for the decision, according to an e-mailed statement from the Seoul-based company. The 69-year-old will continue with his duties until a successor is found, according to a spokesman who asked not to named due to company policy. Shares of Woori fell yesterday, valuing the government’s stake in the lender at about US$4.8 billion. South Korea is preparing a plan to sell its 57 percent holding by June, Financial Services Commission chairman Shin Je-yoon told lawmakers last month. The government’s three previous attempts to sell Woori Finance starting in 2010 have failed due to lack of buyer interest. “They will have a new chairman who can get along well with the new administration, which will clearly show the new government’s will for privatisation,” Sohn Joon Beom, an analyst with LIG Investment & Securities Co., said. “Still, there’s a bumpy road ahead for privatising Woori Finance.” Shares of Woori declined 0.4 percent to 11,700 won in Seoul trading, compared with the benchmark Kospi index’s 0.2 percent drop. The stock has fallen 5.7 percent in the past year.

he Bank of Japan’s “huge bet” by boosting quantitative easing won’t turn the economy around and is instead sending the nation toward default, said Takeshi Fujimaki, former adviser to billionaire investor George Soros. The BOJ said on April 4 it will double monthly debt purchases to 7.5 trillion yen (US$76 billion). That’s about 70 percent of planned bond issuance from the world’s most heavily indebted government. Governor Haruhiko Kuroda set a two-year horizon for achieving the 2 percent annual inflation target adopted in January at Prime Minister Shinzo Abe’s urging and said the monetary base will grow to 270 trillion yen by the end of 2014. “By expanding the monetary base to 270 trillion yen, the BOJ is making a huge bet which I think it will ultimately lose,” Mr Fujimaki said in an interview. “Kuroda’s QE announcement is declaring double suicide with the government. The BOJ will have to share the country’s fate and default together.” “The volatility in the JGB market as well as the fact that there is large selling represent fear among investors,” he said. “They are early signs of a larger selloff and we should continue to monitor the moves in the long-term bonds.” Japan’s outstanding government bonds, bills and borrowings increased to a record 997.2 trillion yen at the end of 2012. “Japan’s finance is sinking into the ocean,” Mr Fujimaki said. “There’s no escape from a market crash in the future when you have such enormous debt.” Bloomberg News

Bloomberg News

ING targets May launch of Thai Bank stake sale Southeast Asia seen as a hot market for financial services deals

NG Groep NV is aiming for May to launch the sale of its US$1.2 billion stake in Thailand’s TMB Bank, as the Dutch financial services company awaits the end of Malaysia’s election to include more bidders, sources familiar with the matter told Reuters. The planned sale of the 31 percent stake comes as ING sheds assets to repay a 2008 bailout by the Dutch government. It also comes at a time when mergers and acquisition activity in Southeast Asia’s banking sector is expected to hit a record level this year. Targeting a May launch is meant to encourage Malaysia’s two dominant banks – CIMB Group Holdings Bhd and Malayan Banking Bhd – to join the auction, the sources said. The two banks, and any other potential bidders from Southeast Asia’s thirdlargest economy, are expected to hold off on any major moves until a new government is determined. Malaysia has set national elections for May 5. The sources said the auction was also likely to attract interest from Japanese, Chinese and South Korean lenders. The sale could also spark a takeover battle for TMB, which has a market value of US$3.8 billion, as the

S.Korea hints at US$4.4 bln extra spending South Korea’s president yesterday hinted that the administration is preparing for extra spending worth around 5 trillion won (US$4.43 billion) to help pull Asia’s fourth-largest economy out of its prolonged slump. “Listed companies currently own cashable assets worth about 52 trillion won, and if they invest only 10 percent of it, it would be similar to the expanded budget spending that the government is working on,” a presidential statement quoted her as telling policy secretaries at a meeting yesterday. Finance Minister Hyun Oh-seok told lawmakers at a parliament committee hearing that the government’s planned extra budget would be financed via roughly 16 trillion won worth of bond sales. “I believe it is possible to reach 2.7 percent or 2.8 percent economic growth if the government’s policies are implemented,” Mr Hyun said, adding that the government’s current forecast of 2.3 percent growth did not factor in policy effects. The comments come as the government prepares to submit a bill for a supplementary budget, the centrepiece of its stimulus package, to parliament later this week. The government has said it will use the supplementary budget to boost employment, support smaller firms and provide additional support for the working class.

Danamon decision by early May Bank Indonesia will probably have a decision by early May on the proposed acquisition of PT Bank Danamon Indonesia by DBS Group Holdings Ltd, the governor of the central bank said. Bank Indonesia hasn’t approved the bid yet, Governor Darmin Nasution said in Jakarta yesterday, denying a Wall Street Journal report. The newspaper said on Saturday that Southeast Asia’s largest lender got approval to buy as much as 40 percent of Danamon and will be allowed to build a majority stake later if it meets corporate governance and financial health standards. DBS is seeking to acquire 99 percent of Danamon for 66.4 trillion rupiah (US$6.8 billion) in a transaction that would give it access to more profitable lending opportunities and a faster-growing economy. The sale, announced a year ago, has stalled as Indonesia’s central bank considers approval while seeking greater opportunities for its own lenders in Singapore. “We have a rule, and they have their intention, so we’re looking for a solution because we also have banks that want to operate there,” Mr Nasution said. “After it’s clear what both sides are willing to commit to, we’ll make our decision.” The sale price would include the equivalent of 45.2 trillion rupiah to be paid to Temasek Holdings Pte, Singapore’s state-owned investment company, for its 67.4 percent stake.

Sharp jumps in Tokyo trading

ING plans to sell its 31 percent stake in TMB Bank

potential buyer would be required to make a mandatory offer for the rest of the bank under Thai law. Foreign banks can buy up to 25 percent of a Thai bank without central bank approval, but a stake of up to 49 percent requires approval from the Thai central bank and more than 49 percent requires approval from the Thai government. ING has picked J.P. Morgan to find a buyer for the stake in TMB Bank, Thailand’s seventh-largest lender, the sources said. The sources declined to be identified because the sale plan is not public. ING and J.P. Morgan declined

to comment. “ING has informed us they will appoint a financial adviser to look into the TMB stake,” TMB’s chairwoman, Saowanee Kamolbutr, said without elaborating. ING, which has been selling assets worldwide to repay a 10 billion euro (US$13 billion) state bailout, has raised US$3.9 billion by shedding parts of its Asian insurance and asset management businesses. In October last year, the company sold ING Life Insurance Co. (Macau) Ltd and its Hong Kong insurance business as a job lot. Reuters

Shares in struggling Japanese electronics maker Sharp Corp. rocketed more than 14 percent yesterday after a weekend report that it plans to sell its entire 9.2 percent stake in rival Pioneer Corp. Sharp shares closed up 10.45 percent at 370 yen (US$3.8) on the Tokyo Stock Exchange while Pioneer climbed 4.29 percent to 219 yen. Sharp, the largest shareholder in Pioneer, aims to sell the 30 million shares in a lump-sum deal as early as this month to companies that can expect synergies with Pioneer’s operations, the Nikkei newspaper reported. It has been holding negotiations with potential buyers – manufacturers in the automobile and medical device industries – and is believed to have narrowed down the list to just a few, the business daily said. The shares were worth 6.3 billion yen (US$64 million) based on Pioneer’s stock price as of Friday. Sharp plans to use gains on the sale to help repay debts, the Nikkei said. “The sale will obviously be a boon to Sharp in its cash-raising quest,” said Toshiyuki Kanayama, market analyst at Monex Inc., noting that news on Sharp have been more positive of late.

12 |

business daily April 16, 2013

MARKETS Hang SENG INDEX NAME

NAME

PRICE

DAY %

VOLUME

AIA GROUP LTD

32.7

-1.506024

16486175

CHINA UNICOM HON

ALUMINUM CORP-H

2.91

-3.322259

11901216

CITIC PACIFIC

BANK OF CHINA-H

3.48

-1.694915

290211365

BANK OF COMMUN-H

5.76

-1.200686

24127334

29.75

-0.9983361

2414844

13.1

-2.238806

18391055

BANK EAST ASIA BELLE INTERNATIO

PRICE

DAY %

Volume

9.77

-2.104208

19751751

9.5

-2.363823

4903228

NAME

PRICE

DAY %

73.6

-1.075269

1736241

SANDS CHINA LTD

38.55

-1.40665

5015271

SINO LAND CO

POWER ASSETS HOL

Volume

67.1

-1.25092

2018547

12.42

-2.358491

6887891

CNOOC LTD

13.74

-3.102962

90768832

SUN HUNG KAI PRO

107

-0.4651163

4024815

COSCO PAC LTD

10.24

0.1956947

16446891

SWIRE PACIFIC-A

94.5

-0.1057082

817365

9.91

-0.8008008

7608176

TENCENT HOLDINGS

246

-1.6

2678105

CLP HLDGS LTD

ESPRIT HLDGS

BOC HONG KONG HO

25.75

-0.1937984

11662525

HANG LUNG PROPER

29.35

-1.011804

4178568

TINGYI HLDG CO

20.35

-3.325416

6516532

CATHAY PAC AIR

12.62

-0.4731861

9246347

HANG SENG BK

123.6

-1.199041

1455817

WANT WANT CHINA

11.12

-2.62697

8942982

CHEUNG KONG

114.5

-0.3481288

2168038

HENDERSON LAND D

54.8

-0.4541326

5084833

WHARF HLDG

67.05

-1.830161

3456450

6.3

-2.325581

16662030

77.35

-0.1291156

1600024

CHINA COAL ENE-H CHINA CONST BA-H

6.11

-1.451613

250886298

CHINA LIFE INS-H

20.15

-1.466993

34504271

CHINA MERCHANT

24.8

0.6085193

3761317

CHINA MOBILE

HENGAN INTL HONG KG CHINA GS

22.6

-1.094092

5107691

HONG KONG EXCHNG

128.2

-1.762452

2885729

HSBC HLDGS PLC

81.05

-1.218769

9073153

81.85

0.7384615

7664491

5.17

-1.52381

235327203

LI & FUNG LTD

10.28

-2.281369

13044662

MTR CORP

30.55

-0.9724473

81.95

-1.205546

10833637

HUTCHISON WHAMPO

CHINA OVERSEAS

21.6

-1.144165

16444022

IND & COMM BK-H

CHINA PETROLEU-H

8.61

-2.931229

112813497

CHINA RES ENTERP

22232.74

1630712

LOW

21747.22

52W (H) 23944.74

-1.417004

2062254

21.7

-0.2298851

4875128

NEW WORLD DEV

12.7

-1.397516

7240088

CHINA RES POWER

22.75

-5.991736

11974311

PETROCHINA CO-H

9.67

-2.323232

66797563

CHINA SHENHUA-H

26.65

-2.380952

18683309

PING AN INSURA-H

58.4

-1.351351

9777437

PRICE

DAY %

Volume

26.15

-3.505535

17466724

-2.931229

112813497

0 22240

INDEX 21772.67 HIGH

24.35

CHINA RES LAND

MOVERS

21740

(L) 18056.4 11-April

15-April

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.47

-1.420455

109055338

AIR CHINA LTD-H

6.01

-2.593193

18166849

CHINA PETROLEU-H

8.61

ALUMINUM CORP-H

2.91

-3.322259

11901216

CHINA RAIL CN-H

6.94

0.4341534

12371500

ZOOMLION HEAVY-H

ANHUI CONCH-H

26.7

-2.554745

14584504

CHINA RAIL GR-H

3.67

-0.8108108

17997967

ZTE CORP-H

BANK OF CHINA-H

3.48

-1.694915

290211365

CHINA SHENHUA-H

26.65

-2.380952

18683309

BANK OF COMMUN-H

5.76

-1.200686

24127334

CHINA TELECOM-H

3.67

-2.133333

67575592

BYD CO LTD-H

22.1

-3.070175

1627100

DONGFENG MOTOR-H

11.06

-2.29682

17857200

CHINA CITIC BK-H

4.02

-2.898551

62792679

GUANGZHOU AUTO-H

5.77

-1.703578

5490712

CHINA COAL ENE-H

6.3

-2.325581

16662030

HUANENG POWER-H

8.16

0.3690037

21312436

CHINA COM CONS-H

7.24

-0.5494505

14506560

IND & COMM BK-H

5.17

-1.52381

235327203

CHINA CONST BA-H

6.11

-1.451613

250886298

JIANGXI COPPER-H

15.66

-4.860267

21100671

CHINA COSCO HO-H

3.42

-2.005731

7176333

PETROCHINA CO-H

9.67

-2.323232

66797563

20.15

-1.466993

34504271

PICC PROPERTY &

9.34

-2.096436

13109800

CHINA LONGYUAN-H

7.2

-2.439024

8382000

PING AN INSURA-H

58.4

-1.351351

9777437

CHINA MERCH BK-H

15.3

-1.162791

10359336

SHANDONG WEIG-H

6.74

-3.16092

6148922

CHINA LIFE INS-H

CHINA PACIFIC-H

CHINA MINSHENG-H

9.09

-0.219539

28708582

SINOPHARM-H

25.35

0.7952286

14741439

CHINA NATL BDG-H

9.16

-3.477345

50413595

TSINGTAO BREW-H

51.45

1.47929

2196636

CHINA OILFIELD-H

15.4

-3.508772

8634000

WEICHAI POWER-H

26.65

-4.991087

5621610

NAME

PRICE

DAY %

YANZHOU COAL-H

8.98

-4.468085

36858285

ZIJIN MINING-H

2.33

-7.171315

117319981

7.61

-8.313253

63408060

11.42

-4.674457

4713321

MOVERS

Volume

0 10830

INDEX 10440.76 HIGH

10828.16

LOW

10404.79

52W (H) 12354.22 10400

(L) 8987.76 11-April

15-April

Shanghai Shenzhen CSI 300 PRICE

DAY %

Volume

6.14

-2.539683

6173983

CITIC SECURITI-A

11.68

-0.3412969

61124438

17185293

CSR CORP LTD -A

4.03

-0.982801

-0.3759398

20823939

DAQIN RAILWAY -A

7.01

8.58

-0.6944444

19477715

DATANG INTL PO-A

BANK OF CHINA-A

2.91

-0.3424658

35786383

BANK OF COMMUN-A

4.67

0.4301075

62836217

BANK OF NINGBO-A

10.45

-0.09560229

5075991

GD POWER DEVEL-A

BAOSHAN IRON & S

4.81

-0.8247423

13595957

GEMDALE CORP-A

3365415

GF SECURITIES-A

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.72

0.3690037

98561691

AIR CHINA LTD-A

5.13

0.1953125

7748941

ALUMINUM CORP-A

4.08

-2.857143

ANHUI CONCH-A

18.55

BANK OF BEIJIN-A

BYD CO LTD -A

20.53

-3.615023

NAME

PRICE

DAY %

Volume

14.93

-2.35448

25555512

SANY HEAVY INDUS

9.88

-2.371542

25551834

23764308

SHANDONG DONG-A

45.55

0.1098901

7022298

-1.12835

20411237

SHANDONG GOLD-MI

32.13

4503942

4.5

-1.531729

7169163

SHANG PHARM -A

12.51

0.7246377

15757408

EVERBRIG SEC -A

12.99

0.154202

9154809

SHANG PUDONG-A

9.83

-1.10664

75763623

GD MIDEA HOLDI-A

13.72

2.464526

52302923

SHANGHAI ELECT-A

3.8

-2.061856

2518363

2.83

-2.749141

81606252

SHANXI LU'AN -A

16.5

-2.884049

12183821

6.95

3.886398

82319193

SHANXI XISHAN-A

10.93

-2.410714

12814827

12.76

-0.4680187

18137025

SHENZEN OVERSE-A

5.8

-0.6849315

33395372

CHONGQING WATE-A

NAME SAIC MOTOR-A

CHINA AVIC AVI-A

21.69

-3.557137

2780015

GREE ELECTRIC

26.62

1.603053

19098575

SICHUAN KELUN-A

CHINA CITIC BK-A

4.25

-0.7009346

22947018

GUANGHUI ENERG-A

19.09

-0.5729167

20276114

SUNING COMMERC-A

CHINA CNR CORP-A

4.05

-2.409639

21076274

HAITONG SECURI-A

0.4016064

68087505

7270255

HANGZHOU HIKVI-A

36.1

-3.34672

3277984

CHINA COAL ENE-A

6.78

-1.596517

CHINA CONST BA-A

4.7

0.2132196

45925799

HENAN SHUAN-A

CHINA COSCO HO-A

3.61

0.5571031

10185187

HONG YUAN SEC-A

CHINA EAST AIR-A

3.05

-0.3267974

9607684

CHINA EVERBRIG-A

3.04

0.6622517

57192153

CHINA LIFE INS-A

17.04

-1.445922

CHINA MERCH BK-A

12.25

CHINA MERCHANT-A CHINA MERCHANT-A CHINA MINSHENG-A

65.41

0.1684533

1302081

TSINGTAO BREW-A

37.59

2.174504

3553762

2194427

WEICHAI POWER-A

22.64

-2.076125

8237519

8743452

WULIANGYE YIBIN

22.18

-1.33452

14328190

HUATAI SECURIT-A

9.27

-0.2152853

21593186

YANGQUAN COAL -A

12.65

-4.021244

8399701

HUAXIA BANK CO

10.16

-0.2944063

16866437

YANTAI WANHUA-A

18.07

-0.8776742

8937682

12620382

IND & COMM BK-A

4.04

-0.7371007

43407375

YANZHOU COAL-A

15.84

-3.23763

4457669

-0.2442997

33325316

INDUSTRIAL BAN-A

17.58

-0.5656109

45511857

YUNNAN BAIYAO-A

1.466993

1176499

11.43

0.08756567

30546316

INNER MONG BAO-A

27.79

-1.173542

17029704

ZHONGJIN GOLD

12.93

-6.709957

38178609

26.27

3.506698

12344972

INNER MONG YIL-A

29.96

-2.187398

9591254

ZIJIN MINING-A

121961588

INNER MONGOLIA-A

4.78

-1.848049

42827455

29.96

-1.576873

5584930

9.65

0.5208333 -3.359462

29465516

-3.329146

6039020

JIANGSU YANGHE-A

60.63

-2.929875

3582063

CHINA PACIFIC-A

19.12

-1.595471

13181422

JIANGXI COPPER-A

20.89

-4.698905

13168427

6.86

-2.970297

48541085

JINDUICHENG -A

10.41

-4.407713

6647720

16.66

-1.303318

10417767

172.74

0.2961157

2833673

CHINA RAILWAY-A

4.92

-1.006036

12257521

KANGMEI PHARMA-A

CHINA RAILWAY-A

2.75

-0.7220217

23455296

KWEICHOW MOUTA-A

CHINA RESOURCE-A

29.08

1.18302

4750345

LUZHOU LAOJIAO-A

25.58

-2.81155

6987580

2.01

-0.9852217

15097453

ZOOMLION HEAVY-A ZTE CORP-A

MOVERS

21.19

-1.212121

9552234

4.4

-5.172414

51674454

NINGBO PORT CO-A

2.47

-1.2

8561860

8.52

-1.274623

17823448

HIGH

2504.13

LOW

2431.22

3.4

-0.8746356

11045569

CHINA STATE -A

3.42

-1.156069

89630192

PING AN BANK-A

18.56

-1.798942

57095699

CHINA UNITED-A

3.45

-1.146132

61949411

PING AN INSURA-A

40.51

-1.555286

16532950

CHINA VANKE CO-A

11.03

1.007326

65294367

POLY REAL ESTA-A

11.76

2.26087

48366614

CHINA YANGTZE-A

7.08

0.1414427

10760041

QINGDAO HAIER-A

12.68

-0.2360346

6325824

CHONGQING CHAN-A

9.91

-3.972868

27052497

QINGHAI SALT-A

26.88

-2.218989

4268058

PRICE DAY %

Volume

PRICE DAY %

Volume

227

3.2

-5.60472

115542392

7.63

-5.452292

70620002

10.56

-4

20868451

11 2510

INDEX 2436.818

METALLURGICAL-A PETROCHINA CO-A

CHINA SOUTHERN-A

TASLY PHARMAC-A

1.440922

8.63

CHINA SHENHUA-A

21836640

-0.6622517

15.39

CHINA SHIPBUIL-A

692575

-0.4901961

CHINA OILFIELD-A CHINA PETROLEU-A

-1.88037

6.09

17.6

JIANGSU HENGRU-A

CHINA NATIONAL-A

60.53

52W (H) 2791.303 (L) 2102.135

2420

11-April

15-April

FTSE TAIWAN 50 INDEX NAME ACER INC ADVANCED SEMICON ASIA CEMENT CORP ASUSTEK COMPUTER

NAME

23.25

-4.517454

13696888

FORMOSA PLASTIC

2.880658

36125178

FOXCONN TECHNOLO

36.7

0.8241758

2660811

FUBON FINANCIAL

310

-4.615385

10967318

HON HAI PRECISIO

12.85

-2.281369

27894086

HOTAI MOTOR CO

144

0.6993007

6161645

CATHAY FINANCIAL

38.05

-1.42487

15405715

CHANG HWA BANK

16.75

-1.470588

CHENG SHIN RUBBE

AU OPTRONICS COR CATCHER TECH

CHIMEI INNOLUX C

HTC CORP

TAIWAN MOBILE CO

102

1.492537

77.9

-1.142132

6792941

TPK HOLDING CO L

628

-1.102362

2710593

40.45

-1.581509

9702691

TSMC

99.4

-1.094527

23289616

77.1

-1.908397

79579921

240.5 -0.2074689

93974

258

UNI-PRESIDENT UNITED MICROELEC

-1.338432

13715577

HUA NAN FINANCIA

16.95 -0.2941176

5546951

YUANTA FINANCIAL

7630732

LARGAN PRECISION

765 -0.9067358

1441806

YULON MOTOR CO

-1.639344

6451344

LITE-ON TECHNOLO

51.1 -0.3898635

4528018

-3.651685

41743228

MEDIATEK INC

-2.315485

6110010

7.88

-1.867995

50350672

MEGA FINANCIAL H

23.2 -0.8547009

21110124

CHINA STEEL CORP

25.5

-0.390625

9413364

NAN YA PLASTICS

53.7

1.704545

CHINATRUST FINAN

17.85

-1.652893

31430083

PRESIDENT CHAIN

184

0.8219178

1963830

93.3

0.1072961

3637040

QUANTA COMPUTER

58.6

-2.170284

10370471

19.15

-3.282828

14259790

SILICONWARE PREC

32.75

1.236476

13513660

135

2.661597

6145252

SINOPAC FINANCIA

14.15

-1.393728

13729714

FAR EASTERN NEW

30.95

0.1618123

4716086

SYNNEX TECH INTL

50.7

-2.123552

3843128

FAR EASTONE TELE

68.6

990534

TAIWAN CEMENT

38.4

1.052632

5802736

FIRST FINANCIAL

17.6 -0.8450704

14063864

FORMOSA CHEM & F

67.4 -0.8823529

2150582

FORMOSA PETROCHE

75.5 -0.5270092

718531

COMPAL ELECTRON

TAIWAN COOPERATI

Volume

3330755

17.15

DELTA ELECT INC

PRICE DAY %

CHINA DEVELOPMEN

CHUNGHWA TELECOM

NAME

337.5

6591169

16.85

5538752

TAIWAN FERTILIZE

70.3

0.4285714

1754199

TAIWAN GLASS IND

27.4

1.107011

831162

WISTRON CORP

MOVERS

59.1

0.1694915

11256441

11.05

25573043

29.2

-4.262295

16202206

14.35 -0.6920415

8770705

49.7

3011416

-0.6

5438393

4 5480

INDEX 5386.14 HIGH

5471.32

LOW

5383.24

52W (H) 5639.93 5370

(L) 4719.96 11-April

15-April

April 16, 2013 business daily | 13

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

Max 31.6

Average 31.310

Min 31.15

Last 31.35

31.60

60.8

16.7

31.45

60.6

16.6

31.30

60.4

16.5

31.15

60.2

16.4

31.00

Max 60.8

Average 60.360

Min 60.15

60.0

Last 60.35

38.7

19.2

38.5

19.1

Max 16.68

Average 16.437

Min 16.34

Last 16.48

16.3

21.7 21.6 21.5

19.0

38.3

Max 38.7

Average 38.527

Min 38.15

Last 38.55

38.1

Max 19.16

Average 18.997

Commodities PRICE

DAY %

YTD %

(H) 52W

(L) 52W

WTI CRUDE FUTURE May13

-2.508489429

-4.465435809

106.0899963

BRENT CRUDE FUTR May13

100.87

-2.172437203

-7.006545589

117.4300003

91.54999542

GASOLINE RBOB FUT May13

276.67

-1.252766079

-4.398756047

330.369997

237.7199888

852.5

-0.408878505

-6.906906907

1000.75

801.25

4.25

0.6631928

23.08137851

4.290000439

3.072000027

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

Gold Spot $/Oz Silver Spot $/Oz Platinum Spot $/Oz Palladium Spot $/Oz

284.03

-1.096873041

-6.06852305

327.1399975

258.5000038

1436.45

-3.1226

-13.6987

1796.08

1426.68

24.365

-6.2931

-19.08

35.365

24.2388

1451.69

-2.3582

-4.3525

1742.8

1379.05

676.2

-4.3564

-3.3531

786.5

553.75

LME ALUMINUM 3MO ($)

1853.5

-2.344573235

-10.58851905

2200.199951

1827.25

LME COPPER 3MO ($)

7406.5

-2.674113009

-6.613289623

8496.75

7219.5

1875

-2.037617555

-9.855769231

2230

1745

LME ZINC

3MO ($)

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

18.9

Last 18.98

Max 21.65

Average 21.447

Min 21.3

Last 21.6

Jul13

15850

-2.58143823

-7.092614302

18920

15236

15.745

-0.474083439

1.679044236

16.95000076

14.5

633.25

-1.247563353

-9.178917175

824

527

WHEAT FUTURE(CBT) Jul13

711

-1.181375956

-10.42519685

900

664.75

SOYBEAN FUTURE Jul13

1374.5

-0.344390067

-1.487188676

1605.75

1217.75

COFFEE 'C' FUTURE Jul13

135.85

-0.947867299

-9.160815781

202.1999969

134.8000031

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 %

1.0424 1.5317 0.9301 1.3062 98.1 7.9948 7.7623 6.1869 54.6387 29.05 1.2373 29.878 41.265 9711 102.254 1.2149 0.85273 8.0776 10.4431 128.13 1.03

-0.7994 -0.1695 -0.301 -0.3889 0.2752 0.0088 -0.0039 0.084 -0.2081 0 -0.0404 0.2644 0.1212 0.0309 1.0826 0.1004 0.2193 0.1708 0.0402 0.6946 0

YTD %

(H) 52W

0.4432 -5.3103 -1.5805 -0.9704 -12.2324 -0.1451 -0.1507 0.7063 0.6521 5.2668 -1.2851 -2.8282 -0.6301 0.8444 -12.642 -0.6107 -4.3754 1.732 0.836 -11.3635 -0.0097

(L) 52W

1.0625 1.6381 0.9972 1.3711 99.95 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 105.433 1.25692 0.88151 8.4957 10.9254 131.12 1.0314

0.9582 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1844 51.3675 28.87 1.2152 28.913 40.54 9169 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

3.67

1.101928

16.50793

3.94

2.29

2374512

CROWN LTD

12.73

0.4735596

19.30647

12.9

8.06

2237540

ARISTOCRAT LEISU

VOLUME CRNCY

SUGAR #11 (WORLD) Jul13

17.84

-9.625126646

23.59000015

17.54999924

AMAX HOLDINGS LT

0.045

#N/A N/A

13645500

COTTON NO.2 FUTR Jul13

87.51

-0.125542114

13.84155067

94.19999695

69.94999695

BOC HONG KONG HO

25.75

-0.1937984

6.846471

27.1

20.85

11662525

CENTURY LEGEND CHEUK NANG HLDGS

World Stock MarketS - Indices NAME

0.3

13.20755

0.42

0.215

5.78

2.300885

-3.505839

6.74

2.8

188000 16444022

CHINA OVERSEAS

21.6

-1.144165

-6.493508

25.6

14.624

CHINESE ESTATES

13.38

-0.2980626

10.31032

13.68

7.697

656000

CHOW TAI FOOK JE

9.98

-4.40613

-19.77492

13.4

8.4

12525400

EMPEROR ENTERTAI

2.27

2.714932

20.10582

2.49

1.1

1055000

FUTURE BRIGHT

2.07

-5.479452

69.67213

2.75

0.7

5586000

31.35

-2.03125

3.294892

35.7

16.94

6814003

123.6

-1.199041

4.128057

131.5

99.2

1455817

HOPEWELL HLDGS

30.1

-1.149425

-9.473684

35.3

19.049

551600

HSBC HLDGS PLC

81.05

-1.218769

-0.3075068

88.45

59.8

9073153

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

14865.06

-0.000538172

13.43789

14887.51

12035.08984

GALAXY ENTERTAIN

NASDAQ COMPOSITE INDEX

3294.945

-0.1579016

9.121714

3306.95

2726.68

HANG SENG BK

FTSE 100 INDEX

6320.23

-1.004951

7.162318

6533.99

5229.76

DAX INDEX

7677.05

-0.8743965

0.8494003

8074.47

5914.43

NIKKEI 225

13275.66

-1.553414

27.70977

13568.25

8238.96

HANG SENG INDEX

21772.67

-1.432293

-3.902781

23944.74

18056.4

CSI 300 INDEX

2436.818

-1.027329

-3.414008

2791.303

2102.135

TAIWAN TAIEX INDEX

7763.53

-0.7428119

0.8316097

8089.21

6857.35

HUTCHISON TELE H

3.73

-1.322751

4.775283

4.05

2.98

1464000

LUK FOOK HLDGS I

21.7

-7.462687

-11.06557

30.05

14.7

3364000

MELCO INTL DEVEL

13.42

0.2989537

48.94561

13.96

5.12

3084200

MGM CHINA HOLDIN

16.48

-1.199041

24.11247

18.449

9.509

1655981

MIDLAND HOLDINGS

3.45

0.5830904

-6.756758

3.249

1332000

0.136

-2.158273

-10.52631

0.226

0.084

15030000

NEW WORLD DEV

12.7

-1.397516

5.657234

15.12

7.95

7240088

SANDS CHINA LTD

38.55

-1.40665

13.54933

41.05

20.65

5015271

SHUN HO RESOURCE

1.44

2.857145

1.67

1.03

-6.205252

4.65

2.56

3655600 6739000

NEPTUNE GROUP

KOSPI INDEX

1920.45

-0.1964422

-3.835662

2042.48

1758.99

S&P/ASX 200 INDEX

4967.908

-0.9100764

6.860861

5163.5

3985

4905.932

-0.6335157

13.6504

4985.852

3635.283

FTSE Bursa Malaysia KLCI

1700.62

0.1230476

0.6909645

1716.47

1526.6

SHUN TAK HOLDING

3.93

-1.995012

NZX ALL INDEX

948.797

0.4699484

7.566895

948.797

755.149

SJM HOLDINGS LTD

18.98

-0.7322176

5.444444

22.15

12.34

PHILIPPINES ALL SHARE IX

4278.93

-0.4714831

15.67865

4299.39

3238.77

SMARTONE TELECOM

12.78

-1.388889

-9.232954

17.38

12.5

1356000

WYNN MACAU LTD

21.6

1.17096

3.102622

25.5

14.62

7056792

ASIA ENTERTAINME

5.085

7.733051

66.17647

6.127

2.4

649231

BALLY TECHNOLOGI

49.83

0.1406752

11.45158

52.7

41.74

330184 1500

JAKARTA COMPOSITE INDEX

21.3

CURRENCY EXCHANGE RATES

NAME ENERGY

Min 18.9

21.4

HSBC Dragon 300 Index Singapor

640.82

-0.03

3.18

STOCK EXCH OF THAI INDEX

1527.32

0.6929015

9.726774

1601.34

1099.15

HO CHI MINH STOCK INDEX

480.02

-2.88304

16.02252

518.46

372.39

BOC HONG KONG HO

3.34

8.794791

3.59

2.7

Laos Composite Index

1330.68

-0.22943

9.541727

1455.82

980.83

GALAXY ENTERTAIN

4.18

5.289672

4.57

2.25

4640

INTL GAME TECH

16.94

-0.2355713

19.54834

17.49

10.92

3962710

JONES LANG LASAL

99.66

-0.359928

18.72766

100.91

61.39

218054

LAS VEGAS SANDS

55.99

1.855558

21.29549

56.83

32.6127

5209168 2783300

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

MELCO CROWN-ADR

23.6

1.68031

40.14252

23.69

9.13

MGM CHINA HOLDIN

8.108107

2.44

1.36

5000

MGM RESORTS INTE

13.04

1.399689

12.02749

14.08

8.83

5516308

SHFL ENTERTAINME

15.59

0.9061489

7.517241

18.37

11.75

218519

SJM HOLDINGS LTD

2.4711

-1.940476

6.974029

2.85

1.65

6500

WYNN RESORTS LTD

128.54

1.085247

14.26794

129.6589

84.4902

1248726

AUD HKD

USD

14 |

business daily April 16, 2013

Opinion

Fairness and climate change Peter Singer Teng Fei

Professor of Bioethics at Princeton University and Laureate Professor at the University of Melbourne

sense of fairness is universal among humans, but people often differ about exactly what fairness requires in a specific situation. Nowhere is this more apparent than in the debate over the need to reduce emissions of greenhouse gases (GHGs) in order to avoid dangerous climate change. China and the United States are the two largest GHG emitters, and it seems unlikely that any global agreement to reduce emissions will be effective unless both participate. Yet, in international climate negotiations, their views of what each should do seem to be far apart. As professors interested in the issue of climate change – one from a leading university in China, and one from a leading university in the U.S.

– we thought that it would be interesting to see if we could agree on a fair principle for regulating GHG emissions. We decided to use the Gini coefficient, a common measure of income inequality, to measure inequality in carbon emissions. The lowestpossible Gini coefficient is 0, which indicates that everyone has exactly the same income; the highestpossible coefficient is 1, which indicates that a single person has all of the income and no one else has any. Naturally, all existing societies fall somewhere between these two extremes, with relatively egalitarian countries like Denmark at around 0.25, and less egalitarian countries like the U.S. and Turkey closer to 0.4.

Different principles of fairness will generate different emission distributions for each population and different “carbon Gini coefficients”. By using the 1850-2050 timespan to calculate the carbon Gini coefficient, we can analyse the principle of historical accountability, advocated by countries like China, India, and Brazil, which takes into account past emissions that have had an impact on the atmosphere.

Emission quotas We have selected three widely discussed methods of allocating GHG emission quotas to different countries: The equal per capita emission rights approach allocates emission rights to countries in proportion to their population, but only for

Professor at the Institute of Energy, Environment, and Economy, Tsinghua University

the remaining portion of the global “carbon budget” – that is, for the amount that can still be emitted, between now and 2050, without causing dangerous, irreversible climate change. (This limit is usually stated as a 2oC rise in global temperature). The equal per capita cumulative emission approach seeks equality over time. Thus, it combines responsibility for past emissions and equal per capita rights. It allocates an equal share of the overall global carbon budget, taking into account the portion that has already been consumed. The grandfathering approach bases emission rights on existing patterns. This scheme has become the de facto approach applied to developed countries in the Kyoto Protocol, which requires them to reduce emissions relative to their levels in 1990. Thus, countries that emitted more in 1990 are entitled to emit more in the future than countries that emitted less in 1990. The second approach – equal per capita cumulative emissions – is, by definition, a way to produce perfect equality among all countries in the contribution that they will have made, over time, to climate change. It thus leads to a carbon Gini coefficient of 0. The first approach – equal per capita emission rights from now on – results in a carbon Gini coefficient of about 0.4. The difference shows that

These widely different carbon Gini coefficients indicate that the world lacks a common understanding of what would be a fair approach to addressing global climate change

the dispute between developed and developing countries over the principle of historical responsibility accounts for about 40 percent of the global GHG emissions that can occur from 1850 to 2050 without exceeding the carbon budget. The prevailing approach – the grandfathering principle – leads to the largest carbon Gini coefficient, roughly 0.7.

Finding consensus These widely different carbon Gini coefficients indicate that the world lacks a common understanding of what would be a fair approach to addressing global climate change. Success in international negotiations will hinge on how parties – and the citizens they represent – consider a few vital equity principles, especially historical responsibility and equal per capita rights. In the negotiations so far, it is already clear that long-term equity concerns are not being adequately addressed. When the de facto grandfathering principle is included, our carbon Gini coefficient indicates that as much as 70 percent of the global carbon budget is still in dispute between rich and poor countries. If it proves too difficult to reach agreement on a substantive equity principle, then an agreement that some carbon Gini coefficients are simply too extreme to be fair could form the basis of a minimum consensus. For example, we can compare the grandfathering principle’s carbon Gini coefficient of 0.7 with the Gini coefficient of the U.S., which most people regard as highly inegalitarian, and yet is much lower, at about 0.38. On the other hand, equal per capita annual emissions is based on a principle that at least has a claim to be considered fair, and has a Gini coefficient of less than 0.4. We therefore propose that any fair solution should have a carbon Gini coefficient of 0.0-0.4. Although the choice of a precise number is somewhat arbitrary, this “fair range” should establish the boundaries for those committed to an equitable solution to the problem of climate change. © Project Syndicate

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.

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April 16, 2013 business daily | 15

OPINION

José Barroso’s implausibly wires upbeat take on Europe Business

Leading reports from Asia’s best business newspapers

Inquirer Business

Clive Crook

Bloomberg View columnist

The merge of the Philippines’ stock and fixed-income exchanges is finally taking shape as the two bourses, with much prodding from financial regulators, have agreed to restart discussions with the aim of formalising an engagement within a 90day period. The Philippine Stock Exchange and the Philippine Dealing System Holdings Corp. (PDS Group) are back in “serious” talks and this time, their leaders have committed to the government that they would come up with a workable framework and sign a memorandum of understanding within 90 days, several sources have said.

the U.S. takes more seriously than Europe. Barroso’s optimism on Europe’s economic recovery, if you can call it a recovery, was harder to understand. This week the IMF’s Christine Lagarde talked of a threespeed world: “countries that are doing well, those that are on the mend, and those that still have some distance to travel.” (In other words, fast growth in many emerging economies, slow growth in the U.S., and no growth in Europe.) The euro area’s economy is still shrinking. Yet Barroso still thinks (or says he thinks) that policy has been mostly well-judged and the union will emerge stronger from its ordeal.

China Daily China and the European Union held trade consultations over cases concerning solar panels and telecoms, with Beijing calling for dialogue, rather than confrontation, to deal with trade friction, a source from the Ministry of Commerce said. The EU last year announced that it would launch antidumping and anti-subsidy investigations into Chinese solar panel manufacturers. “China believes that trade problems and conflicts should be dealt with in a positive and mutually beneficial manner,” the source said. “If the two sides get involved in a trade war, it would harm both sides, weakening each other’s competitiveness in the global market.”

Taipei Times Taiwan’s two oil refiners said they would lower gasoline and diesel prices by NT$0.6 per litre this week, the first cut in prices after two consecutive weeks of increases, after global oil prices declined last week. CPC Corp said in a statement that oil market sentiment turned sour last week on news of rising US oil inventories and increased production from non-OPEC countries. The company’s average oil costs decreased by 2.42 percent last week. Formosa Petrochemical Corp decided to match CPC’s price cuts.

Economic Times In a crucial decision that will go a long way in determining the taxability of online advertisements, a Calcutta Income-tax Appellate Tribunal (ITAT) held that payments to websites such as Google and Yahoo for online advertisement are not liable to tax in India. The websites’ presence in a location cannot be construed as fixed place constituting a Permanent Establishment (PE), the ITAT order held. The court observed that the web server located in the tax jurisdiction can be construed as PE, but in this case the servers are outside India and therefore the tax claim based on having a PE in India could not be made.

Still manageable

José Barroso, head of the European Commission

osé Barroso, president of the European Commission, gave a presentation at Bloomberg headquarters in New York Friday afternoon, dividing his time about equally between the outlook for the proposed U.S.-EU trade agreement and the state of the European economy. He was pretty optimistic about both. The trade pact was a big deal, he said. Conventional trade barriers such as tariffs and tariff-rate quotas between Europe and the U.S. are already low (5.2 percent on average for the EU and 3.5 percent for the U.S.), but the volume of trade between the two economies is so huge that eliminating them altogether would still have a big effect, he said. The gains from removing behindthe-border barriers (such as regulatory differences that discourage imports, accidentally or otherwise) would be great as well. Some areas weren’t going to see much progress, he said – Europe and the U.S. just don’t see eye to eye on genetically modified food, for instance. Nonetheless, Europe was ambitious for what might be achieved. He foresees a “living agreement” that will avoid backsliding and promote further liberalisation in future. Carter Keithley, president of the U.S. Toy Industry Association, asked what I thought was a good question.

The U.S. and Europe both have complex rules to ensure that toys are safe – but the details are different. Combining them into a single safety code will be difficult. Why not just agree that the regulations ensure toys are safe in both places and leave both standards in place, with the U.S. agreeing to accept the EU code as sufficient and vice versa?

Mutual recognition This principle of “mutual recognition” was crucial

The failure to create effective burden-sharing arrangements has been the euro area’s biggest error, not counting the creation of the euro itself

in creating Europe’s single market in the first place. If the U.S. and the EU could embrace it, the forthcoming agreement could indeed be a big deal. Barroso didn’t say he was against this approach, but I thought he equivocated. Yes, he said, we need either a common standard or mutual recognition. Well, that’s obvious. The question is how far either the U.S. or Europe might go in accepting the more effective tradeexpanding principle. My guess would be, not far. I think the resistance on both sides will be strong – and especially, in fact, in the U.S. Mutual recognition is an erosion of sovereignty, which

He noted early on that Europe’s public debts still aren’t high by U.S or Japanese standards. True – and that’s the point. The EU is insisting on austerity in its weakest economies even though, in the aggregate, its fiscal problem is manageable. The failure to create effective burden-sharing arrangements – some form of limited fiscal union to work alongside its monetary union – has been the euro area’s biggest error, not counting the creation of the euro itself. And the consequences are crushing countries such as Spain and Barroso’s own Portugal. At their meeting in Dublin, EU finance ministers agreed to extend repayment of the emergency loans given to Ireland and Portugal by an extra seven years. (To qualify, Portugal will have to find new budget savings to replace the ones thrown out by its constitutional court). National parliaments in some of the creditor countries will have to endorse the change. If it goes ahead, it’s a welcome gesture of flexibility – but far too little and far too late. Bloomberg View

16 |

business daily April 16, 2013

CLOSING Maduro wins Venezuela election

HK shares unwind last week’s gains

Nicolas Maduro (pictured), political heir to the late Hugo Chavez, was declared the winner of Venezuela’s presidential election late on Sunday in a result that was immediately challenged by the opposition. The 50-year-old former bus driver received 50.7 percent of the votes, the national electoral council said after about 99 percent of ballots were counted. Henrique Capriles Radonski had 49.1 percent and vowed to contest the results. The margin of victory was the narrowest since the 1968 presidential election and may lead to political unrest as almost half the country questions the government’s legitimacy, said Russell Dallen, a bond trader at Caracas Capital Markets.

China shares posted their worst loss in more than two weeks yesterday, while Hong Kong nearly erased most of last week’s gains after weaker-thanexpected China GDP data aggravated the gloom from several Chinese corporate profit warnings. The Hang Seng Index declined 1.4 percent to 21,772.7, almost paring last week’s gains that came in low turnover. The China Enterprises Index of the leading Chinese listings in Hong Kong sank 2 percent. The Shanghai Composite Index shed 1.1 percent and the CSI300 of the top Shanghai and Shenzhen A-share listings lost 1 percent. Both closed at their lowest since March 28.

Consumer confidence index falls Faith in stocks also weakens in Q1, suggests survey Stephanie Lai

sw.lai@macaubusinessdaily.com

he Macau consumer confidence index dropped slightly in the first quarter of this year to 87.9 out of 200 points, according to the Macau University of Science and Technology, which compiles the data for the index. Scores below 100 points suggest a lack or drop in confidence. Scores above 100 suggest a degree of positive outlook. The university said it conducted interviews with 1,013 residents. The index fell 0.5 percentage points compared to the 88.4 points in the final quarter of 2012. That latter performance was the most upbeat those polled have been since the university launched the quarterly research in 2008. The latest data show that consumers lack confidence in the overall economy, consumer price levels and home purchase market. Declining faith in the stock market and increases in household expenditure also depressed the overall confidence indicators, the survey showed.

Consumers putting less faith in equities

Greece reaches deal to unlock rescue fund Creditors said Greek debt was containable

reece and its troika of international creditors have reached agreement on its economic recovery efforts, opening the way for the disbursement of 8.8 billion euros (US$11.5 billion) in bailout loans, officials said yesterday. “The deal was sealed late last night,” Prime Minister Antonis Samaras said in a nationally televised address yesterday. “Our society has reached its limits. But finally we are meeting our targets and the [recovery] programme is being improved,” Mr Samaras said. The prime minister said the deal translated into 2.8 billion euros

(US$3.7 billion) in bailout loans pending since March and “opened the way” for another 6.0 billion scheduled in May. The loans were suspended by the troika of the European Commission, International Monetary Fund and European Central Bank pending their review of Greek finances and policy. A joint statement issued by the EU, IMF and ECB said their mission had “reached staff-level agreement with the authorities on the economic and financial policies needed to ensure the programme remains on track to achieve its objectives.” The statement said recent steps

taken by the authorities suggest that Greece was likely to achieve its March fiscal targets soon “and hence the disbursement” of 2.8 billion in European loans held from previous round “could be agreed soon by the euro area member states”. The next slice of 6.0 billion euros in loans was originally scheduled for the first quarter of 2013. The creditor mission said both the Eurogroup of euro zone finance ministers and the IMF would likely formally sign off on the review conducted by their auditors in May, which would clear disbursement of the loans.

Confidence indicators for the stock market – often regarded as a hedge against consumer inflation – fell to 85.5 points in the first quarter, down from the 88.9 points reached in the final three months of 2012. The sub-index for confidence on household expenditure registered 94.3, a drop of 1.15 percent quarter-on-quarter, suggesting local families are still concerned over inflationary pressures. In contrast, the sub-index for home purchase slightly rebounded in the first quarter by 4.49 percent to 50.0 compared to the OctoberDecember period. Although the sub-index in home purchase remains the lowest scoring item in the survey, the latest rebound may indicate that consumers are now more willing to buy a home here, the survey concluded. Survey participants showed more confidence in the employment market, which reached 126.27 points in the first quarter, up by 0.45 percentage points from the previous quarter.

The EU and the IMF have committed a total of 240 billion euros in rescue loans to Greece since 2010, with the heavily-indebted country obliged to pursue austerity measures in exchange for the international aid it needs to avoid bankruptcy. The troika statement said that Greek “fiscal performance is on track to meet the programme targets, and the government is committed to fully implement all agreed fiscal measures for 2013-14 that are not yet in place…” It said this includes the adoption of legislation to extend collection of the real estate tax through 2013 via the electricity company, an efficient way to collect the new tax but which has provoked ire among Greeks. It added the country’s economy will start growing again next year and it will be able to contain its debts. Mr Samaras said Athens had also pledged to cut 4,000 state sector jobs this year and 11,000 in 2014. “The dismissal of 15,000 civil servants is foreseen by the end of 2014, including 4,000 by the end of this year,” the prime minister said. AFP