Inflated gold prices bring jewellers profits
Year II Number 252 MOP 6.00 Tuesday April 2, 2013 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: Vitor Quintã www.macaubusinessdaily.com
Gongbei border open longer during holidays Page 5
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bullish outlook on international gold prices could translate into better revenues for the city’s gold and jewellery retailers, according to the industry. “More people are pursuing gold as there is generally no macro-economic measures or hindrance imposed on gold sales or its price,” Lei Chi Fong, Macau Goldsmith’s Guild president, told Business
Daily, referring to the government’s recent cooling measures on the local property market. The guild president also said his association was preparing the city’s first gold testing centre. The London gold price, commonly used in Hong Kong and Macau, closed at 1,053.6 pounds sterling (12,751 patacas) an ounce on March 29, rising by 1.1 percent year-on-year.
Mainland-bound flights to rise 12 pct: regulator Page 7
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‘No request yet’ from LVS on Cotai extension
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The Land, Public Works and Transport Bureau told Business Daily it “has not yet received a request to extend the development timeframe” on Las Vegas Sands Corp.’s Sands Cotai Central. In a regulatory filing with the Hong Kong Stock Exchange on March 21, Sands China Ltd said it “expects to apply” for an extension on the May 2014 deadline to complete the fourth tower.
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Electronic waste imported Mexican ‘mall’ to open from Canada: govt in cross-border zone
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Toxic waste in the form of used electronic items was discovered in 15 batches of cargo imported to Macau from Canada in 2011, the Environmental Protection Bureau confirmed in a press statement yesterday. Electronics Recycling (Canada) Co Ltd, a firm based in British Columbia – and its president Guan Sai Feng – are facing 24 federal charges in Canada for the illegal export of hazardous electronic waste.
The Macau-Zhuhai Cross-Border Industrial Zone is to be home to a shopping centre selling Mexican products. It is due to open this summer. Mexican firm Enlace International Group announced last week it was a renting a 10-storey building with 16,000 square metres in the zone’s Zhuhai section. The deal has been organised by officials on the Zhuhai side of the border.
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HSI - MOVERS Name
%Day
POWER ASSETS
1.67
HONG KG CHINA GS
0.89
HANG LUNG PROPER
0.87
CITIC PACIFIC
0.80
CHEUNG KONG
0.79
CHINA LIFE INS-H
-2.90
LENOVO GROUP LTD
-3.14
HENGAN INTL
-3.37
BANK OF COMMUN-H
-3.97
CHINA MERCHANT
-4.32
Source: Bloomberg
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macau
‘No request yet’ from LVS on Cotai deadline extension: govt Michael Grimes
michael.grimes@macaubusinessdaily.com
Adelson wants lawsuit judge to bar cameras
Sands Cotai Central
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he Land, Public Works and Transport Bureau said in an e-mailed statement to Business Daily it “has not yet received a request to extend the development timeframe” on land being developed by Las Vegas Sands Corp. at Cotai and known as ‘Parcels 5 and 6’. In a regulatory filing with the Hong Kong Stock Exchange on March 21, LVS’s Macau unit Sands China Ltd said it “expects to apply” to the Macau government for an extension on the May 2014 deadline it was set by the administration for completing Sands Cotai Central casino resort on Cotai. Prior to the initial development of the property, the land where it stands was referred to only as Parcels 5 and 6.
The possible extension on the completion timetable relates to the as-yet-unbuilt third phase of Sands Cotai Central. The same filing says it is for a fourth tower at the property – to be shared by a St Regis branded hotel and “mixed use space”. If LVS does seek and is granted a time extension on Sands Cotai Central, it will be the third time it has successfully asked for more time on Cotai projects. LVS was first given an extension on the Cotai Parcel 3 site next door to Four Seasons in 2009. That year the deadline was pushed forward to April 2013. Parcel 3 is now known as The Parisian, after the US$2.7 billion French-themed resort planned for it. The most recent Parcel 3
business as usual
completion extension was granted in July last year. It mandated The Parisian must be finished by April 2016.
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A Nevada judge was due to speak in chambers to Las Vegas Sands Corp.’s global head of security on Monday United States time. It concerns a request from the company to bar cameras from a civil trial where LVS chairman Sheldon Adelson will be called as a witness. The case involves a retrial and is due to start on Wednesday in Las Vegas. Hong Kong businessman Richard Suen and his firm Round Square Company Ltd in 2004 claimed a success fee of US$5 million and two percent of the net profit from LVS’s Macau casino operations for allegedly helping it get a gaming licence in Macau. Five years ago a Nevada jury awarded Mr Suen US$58.6 million including interest, but the state’s Supreme Court overturned the verdict in 2010. Brian Nagel, LVS’s security boss, is expected to argue that video and still images of Mr Adelson’s testimony in the new hearing would threaten his security.
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Time for change Paulo A. Azevedo pazevedo@macaubusinessdaily.com
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t no stage, except now, has Macau ever offered a stronger message that its government – or at least part of its government – is held hostage by property developers. Damage to the government’s credibility is beyond repair when developers publicly defy it – indeed slapping its face – by refusing to progress with construction projects or by arguing they should not have to care for the environment because no one else does. It is time to renovate the city’s leadership team. A few secretaries seem to have neither the energy nor the skill to defend the public interest. A sign must be sent to a number of industries and groups. Macau is not up for sale. Macau should not be a feeble victim of developers’ voracious appetites, developers who display no concern for the welfare of the public or for the harmonious growth of this city. Since we either cannot or will not investigate the reason behind the apparent weaknesses of some officials, the least the public should demand is a leadership overhaul. Macau might get lucky and send a fair pair of decent officials into the right portfolios.
For m plea ore in form se v ww w.aw isit our ation, or c ards webs o inqu ntact u macau ite at .com iries s @aw ards mac au.c om
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April 2, 2013 business daily | 3
MACAU
Inflated gold prices bring jewellers profits Gold now accounts for 70 percent of jewellers’ sales, industry says Tony Lai
tony.lai@macaubusinessdaily.com
Imports of gold and jewellery almost doubled year-on-year in the first two months of 2013
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bullish outlook on international gold prices could translate into better revenues for the city’s gold and jewellery retailers, according to the industry. “I predict this year’s business will be better than last year – at least the amount for each transaction will rise due to the inflated gold prices even if
the number of transactions remains at the same level as last year,” said Lei Chi Fong, Macau Goldsmith’s Guild president. He declined to comment on whether jewellery shops had more customers, but told Business Daily business “was good so far” this year. The Macau Goldsmith’s Guild
is an association of more than 100 retailers, including Hong Kong-listed jewellery chains Chow Tai Fook Jewellery Co Ltd and Tse Sui Luen Jewellery (International) Ltd. Chow Tai Fook announced last month that its same-store sales in Macau and Hong Kong rose by five percent year-on-year in the first two months of this year. But the number of transactions rose by 16 percent, suggesting the new customers are spending modestly. Mr Lei also expects more customers will switch from jewellery purchases to gold. Referring to the government’s recent cooling measures on the local property market, Mr Lei added: “More people are pursuing gold as there is generally no macro-economic measures or hindrance imposed on gold sales or its price.” “The value of gold nowadays is about three times higher than what it was in the 2000s. “Sales of gold account over 70 percent of our business right now while the rest is made up by jewellery,” the guild president said. Official data show imports of gold and jewellery rose by 93 percent year-on-year to 1.54 billion patacas (US$192.5 million) in the first two months of 2013.
Testing centre Stimulus efforts by several of the world’s main central banks helped
the value of gold rise for a 12th straight year in 2012, the best run for at least nine decades. The London gold price, commonly used in Hong Kong and Macau, closed at 1,053.6 sterling pounds (12,751 patacas) an ounce on March 29, rising by 1.1 percent year-on-year. Some financial analysts, however, had been bearish on the price of the precious metal this year as there was no sign of further easing measures in monetary policies elsewhere. “Confidence in a recovering U.S. economy as well as a strong global stock market has reduced the perceived need for gold,” said Adrian Day, an analyst quoted by Bloomberg News. But Mr Lei remains bullish, regarding gold as the “best vehicle” against an environment of low interest rates. The Macau Interbank Offered Rate, which banks here use to lend to each other, was at just 0.57 percent on Thursday. The guild president also said his association was preparing the city’s first gold testing centre, which could better standardise and regulate gold sold here. This can also give tourists “more confidence” in the products, Mr Lei added. He declined to speculate on whether the centre would open this year. “All the hardware is ready but what is lacking at the moment is the software, the professionals in this field.” With Reuters/Bloomberg News
Electronic waste imported from Canada: govt Toxic imports stopped in 2011, environmental bureau says Stephanie Lai
sw.lai@macaubusinessdaily.com
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oxic waste in the form of used electronic items was discovered in 15 batches of cargo imported to Macau from Canada in 2011, the Environmental Protection Bureau confirmed in a press statement yesterday. Electronics Recycling (Canada) Co Ltd, a firm based in British Columbia – and its president Guan Sai Feng – are facing 24 federal charges in Canada for the illegal export of hazardous electronic waste to Macau between August and December 2011. Cathode ray tube monitors, nickel cadmium batteries and lead acid batteries were sent to the territory without a permit, Canadian media reported last week. Mr Guan and his company will be back in court on April 17. Jim Puckett, director of the Seattle-based Basel Action Network, told Canadian media that Electronics Recycling is a “very big player” known to export to Macau since 2001.
“Since 2011 we have not received any further notice that electronic waste was imported to Macau,” the environmental bureau said in the statement. “Macau has the responsibility to reinforce the prevention against hazardous waste imports, as the Basel Convention applies in the city,” the statement said. Both Canada and China are signatories to the Basel Convention on the Control of Transboundary Movements of Hazardous Waste, designed to reduce the movements of such material between nations, and specifically to prevent transfer from developed to less developed countries. Business Daily asked the Environmental Protection Bureau how the electronic waste was exported to Macau and if it was included among other materials but received no reply before we went to press. No fees are charged for disposal of solid waste in Macau, whether it is domestic waste or from construction.
Some companies try to take advantage of this by sending waste to the territory the bureau admitted two years ago. In February 2011 the bureau discovered that about 10 tonnes of
industrial waste were being exported to Macau’s incinerator and landfill for construction materials every day from mainland China. Most of that waste was skin from sheep and cows.
Cathode ray tube monitors, nickel cadmium batteries and lead acid batteries were sent to Macau
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business daily April 2, 2013
macau
Mexican mall to open in cross-border zone The authorities expect at least three other companies to set up in the ZhuhaiMacau Cross-Border Industrial Zone this year Vítor Quintã
vitorquinta@macaubusinessdaily.com
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shopping centre for Mexican products due to open this summer could breathe new life into the Zhuhai-Macau CrossBorder Industrial Zone. Enlace International Group of Mexico announced last week that it was renting a 10-storey building with a floor area of 16,000 square metres in the Zhuhai portion of the zone. A spokesperson for the management department of the Zhuhai portion’s administrative committee has confirmed Enlace International’s announcement. The company first enquired about doing business in the zone last year, and applied to do so this year. “The whole registration process will probably be completed by May,” the management department spokesperson said. “The soonest they can start business might be in July or August this year.” The Spanish-language magazine Expansión reported that Enlace International is looking for other Mexican companies to occupy at least 60 percent of its space in the zone. The management department spokesperson said the company “would like to have three to four floors of the building to serve as sales platforms, and another floor for them to reserve as a Mexican cultural expo area”. Enlace International predicted
that products from about 100 Mexican companies in 10 industries could be on sale at the shopping centre by the end of this year. The shopping centre will specialise in Mexican food and drink, including tequila and mescal; souvenirs such as Mexican traditional clothing; healthcare and beauty products; and household goods. “We have taken into account the brand’s influence in their home country, the origin of their products and whether they have sufficient resources to back their business. Enlace basically fulfils these conditions,” the management department spokesperson said. In August the Zhuhai authorities made public a plan to reinvigorate the struggling industrial zone by opening an area with over 5,000 square metres of space for retailing imported products. Enlace International was one of the few companies from outside Greater China to have expressed interest, the management department spokesperson said. “This year we are expecting about three to five companies to set up in business in the Zhuhai industrial zone, most from Hong Kong, Taiwan and Macau, running retail businesses,” the spokesperson said. The management department has engaged a Hong Kong business consultancy to advise it on how to
The Zhuhai-Macau Cross-Border Industrial Zone is unlikely to become a duty-free area any time soon (Photo: Manuel Cardoso)
restructure the zone. The consultants would plan “which supporting facilities can be set inside the zone, how to revamp the industrial buildings and give them a new image, so as to attract more companies”, the spokesperson said. “The revamp plan does not mean we are changing the zone’s policy any time soon,” the spokesperson said. The spokesperson said the zone was still an industrial zone that was turning itself into a retailing area for imported products, where companies could display their products without having to pay import tax and get subsidies to rent and renovate shops. Import tax will be levied on
Real estate fund cashes in on One Central penthouse The Macau Property Opportunities Fund makes a net profit of HK$47.1 million in less than a year Vítor Quintã
vitorquinta@macaubusinessdaily.com
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he Macau Property Opportunities Fund Ltd has made a return on investment of 53.1 percent by selling a penthouse in One Central Residences less than
one year after buying it. The fund announced last week that it sold The Sky House for HK$150 million (US$19.3 million). The Sky House is a penthouse
The Macau Property Opportunities Fund has sold the top three floors of Tower 3 of One Central Residences
with 8,200 square feet (761.8 square metres) of floor space that takes up the top three floors of Tower 3 of One Central Residences. The price is 23 percent more than the value put on the property at the end of last year. The fund did not say who bought it. “The Sky House acquisition proved to be an exceptional deal, with its disposal generating a significant return for our shareholders,” Macau Property Opportunities Fund chairman David Hinde said in a written statement. The fund said it had bought the penthouse for HK$98 million last April, “taking the view that demand for luxury private homes would continue to escalate”. The average price of housing in Macau reached 70,385 patacas per square metre in February, 70.8 more than a year earlier, official data show. The penthouse was sold for
products only when they are destined for mainland China. Macau representatives in the Chinese People’s Political Consultative Conference proposed last month that the zone be turned into a duty-free area. “That’s not possible now, as both the mainland and the SARs are in the middle of a sensitive process of tackling the problem of parallel imports across the border,” the management department spokesperson said. The spokesperson said it would not be easy to get approval for a duty-free area from the authorities in Beijing. With Stephanie Lai
HK$196,902 per square metre, according to Business Daily calculations. The fund said it had made a net profit of HK$47.1 million on the sale, giving a return on investment of 53.1 percent in less than one year. The fund borrowed much of the money it paid for the penthouse, so the return on the amount of its own money that it invested was 92 percent. The fund will use some of the proceeds to repay a loan of HK$48.6 million. It may use the rest to buy more property, but only in exceptional circumstances, the fund said. Mr Hinde said the deal “confirms our stance that demand for luxury private homes in Macau remains strong”. Sniper Capital Ltd manages the Macau Property Opportunities Fund, which is listed in London.
HK$ 196,902 Price of one square metre of The Sky House
April 2, 2013 business daily | 5
MACAU Not all new taxis out on the streets Only 154 of the 200 taxis for which new licences were issued by the government last summer were already in circulation in February, the Transport Bureau said in a statement. The first batch of new taxis, just 15, began operating in October, adding to the existing 980 vehicles. But in February only six new taxis began circulating, even though that month included the Chinese New Year holidays, a peak season for tourism. At the end of February there were 1,134 taxis circulating in Macau, official data show.
Gongbei border could be open longer during holidays Lack of human resources means Zhuhai border side struggles to extend entry hours, official says Stephanie Lai
sw.lai@macaubusinessdaily.com
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ainland China’s customs service welcomes the suggestion of a two-hour extension for the opening hours at the Gongbei border on national holidays, said Gongbei customs post supervisor Lao Ngai Leong. The authorities are studying ways to put the extension into practice, he added. The Gongbei border is currently open from 7 am to midnight. Under the proposal it would open from 6 am to 1 am on holidays. Macau delegates to
the National People’s Congress (NPC) suggested the extension last month. “I am not sure the two-hour extension can be readily adopted in the upcoming Ching Ming Festival [on April 4],” Mr Lao, also a Macau delegate to the NPC, told Business Daily. “That would pretty much depend on how the Gongbei border officers can arrange their work shifts, but the [extension] is what they are trying to achieve,” he added. When Business Daily made a
telephone inquiry to the Zhuhai border inspection authority yesterday, asking when the border opening hours would be extended, a spokesman said the inspection authority was “waiting for an approval from the central administration”. The Gongbei border, said to be China’s biggest single inland crossing point, has a shortage of border officers relative to the rapidly rising number of travellers – in particular for peak hours
from 10 am to 7 pm, suggested Mr Lao. “On holidays the customs officers are already assigned to work on a straining 10- to 12-hour shift due to the lack of staff,” Mr Lao said. On the Macau side of the border, however, the customs have had no particular human resource problem in responding to the huge flux of passengers, he added. The border supervisor also said that the opening hours of the Hengqin border are likely to be adjusted to 8 am to 10 pm from the current 9 am to 8 pm timings – possibly in the second half of this year. That request is now pending approval from the central government.
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business daily April 2, 2013
macau
Tech specialists in high demand Software engineers are the most sought-after workers in IT, with pay to match Stephanie Lai
sw.lai@macaubusinessdaily.com
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oftware engineers are information technology’s most wanted, and they will continue to earn more than their colleagues in IT in the short run. A survey of Macau’s information technology needs has found that corporations and public institutions find it most difficult to recruit software engineers, programmers, testers, network engineers and project managers.
The latest Macau IT Skill Set Demand Survey, conducted last year, found that software engineers would also continue to be among the most highly paid workers in IT. The annual survey is carried out by the Macau New Technologies Incubator Centre or Manetic, the Macao Polytechnic Institute and the Macau Computer Society. The survey had 115 responses from government departments, casino
operators, technology companies and the meetings, incentives, conventions and exhibitions (MICE) industry, among others. Macau’s educational institutions, gaming companies and IT industry found it hardest to get staff. About 40 percent of the respondents had difficulty in recruiting qualified IT workers last year, the most common problems being a lack of experienced applicants and the tightness of the labour market in general. About 53 percent of the respondents planned to recruit a qualified IT worker this year, 2 percentage points fewer than last year.
Pay surge About 62 percent of the respondents planned to outsource IT services in the subsequent 12 months, the MICE industry and the government having the greatest demand for outside help. Application development continued to be the sort of work most outsourced between 2009
A shortage of IT workers means some can command hefty salaries
Corporate
Brockman takes senior Conde Group has admin role at SJM SA designs on Manila Henry Brockman has been appointed as a chief administrative officer at Sociedade de Jogos de Macau SA. He will report to Frank McFadden, president, Joint Ventures and Business Developments. Mr McFadden’s office covers preparatory work for SJM Holdings Ltd’s planned casino resort on Cotai. Ambrose So Shu Fai, chief executive of SJM Holdings, said last week the Cotai scheme was still at the “exploratory” stage. SJM Holdings said in a Hong Kong filing in October last year it had accepted a draft land concession from the Macau government for a 70,468 square metre (758,500 sq. feet) plot on Cotai to build a casino resort with 700 gaming tables, 1,000 slot machines and “approximately” 2,000 hotel rooms. Mr Brockman has lived in Macau since 1995. He is a banker by profession and has worked previously for Lloyds Bank Plc (now Lloyds TSB Group Plc), Standard Chartered PLC and CITIC Bank International Ltd (now China CITIC Bank International Ltd).
Conde Group – an international design consultancy with an operation in Macau and clients in the local gaming industry – was involved in the creation of marketing materials for the new Solaire Resort & Casino in Manila. “We worked on the ‘collaterals’ for the resort,” Rebecca Choi, one of the firm’s directors, told Business Daily. “That’s pretty much anything a guest can feel or touch – from printed materials to the paper napkins used to serve drinks.” The main branding for Solaire – featuring a half sun with rays flowing from it – was the idea of Las Vegas-based firm SK+G. Conde Group’s gaming industry customers in Macau include Sociedade de Jogos de Macau; Galaxy Entertainment Group Ltd’s Galaxy Macau casino resort on Cotai; Mocha, an operator of slot clubs; and Las Vegas Sands Corp. At Sands Macao, Conde Group won a commission to design signs for the back of house areas at the resort.
and last year, followed by network and telecommunications support, management and multimedia development. Since Manetic’s first such survey in 2009, IT specialists have had the biggest surge in pay. IT specialists are the highestearning of the workers covered by the survey. The proportion of the workers covered by the survey that were earning the highest salaries, ranging from 30,001 patacas (US$3,752) to 35,000 patacas, rose to about 14 percent from about 12 percent in 2009. Last year nearly one-quarter of the employers surveyed were offering IT specialists salaries ranging from 25,001 patacas to 30,000 patacas. The percentage of the respondents willing to pay 50,000 patacas or more per month for IT workers for management posts tripled to 9 percent last year from 3 percent in 2009. Most IT workers in management posts were earning salaries of between 25,001 patacas and 30,000 patacas last year.
April 2, 2013 business daily | 7
MACAU
Flights to mainland to grow by 12 pct New air services will take the number of flights between Macau and the mainland to 560 per week Tony Lai
tony.lai@macaubusinessdaily.com
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he number of flights from Macau to mainland China and vice-versa will grow by 12 percent to 560 per week in the next seven months, according to the Civil Aviation Administration of China. This rate of growth is faster than the rate of growth of 8.2 percent that the administration envisages for the number of passenger flights in the domestic market as a whole. The administration said on its website last week that airlines would launch 106 new air services, including two to Macau, by October 26. Air Macau Ltd will operate the services to Macau. Today Air Macau begins thriceweekly flights to Jinjiang, the provincial capital of Fujian, 90 minutes flying time from here. The airline’s chairman, Zheng Yan, told reporters on Friday that it might also begin flights to Zhengzhou, provincial capital of Henan, this year. Air Macau has already launched two new services to the mainland earlier in the year. “We hope to mark out our network of destinations in the mainland first, as there are limited routes there,” Mr
Air Macau begins flying to Jinjiang today
Zheng said. “If you don’t seize the opportunities first, you may not get the chance again.” The Civil Aviation Administration of China said the new services to be launched in the next seven months would bring the number of services between the
mainland and Macau to 20. Air Macau already operates 16 of these services. Six mainland carriers – Xiamen Airlines Co Ltd, Shenzhen Airlines Co Ltd, Air China Ltd, Juneyao Airlines Co Ltd, Spring Airlines Ltd and China Eastern Airlines Corp Ltd
– operate services between Macau and seven mainland cities. Nearly 1.74 million visitors arrived at Macau International Airport last year, 5 percent more than in 2011. Of the arriving visitors, 44.2 percent were mainland Chinese.
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business daily April 2, 2013
GREATER CHINA The manufacturing sector has been one of the main drivers of growth
rise in new orders. The official PMI was more upbeat. It showed new orders and new export orders scaling 11-month peaks, pushing factory output to its highest in 10 months. Manufacturers of cars, electronics, machinery and equipment saw business improve while nonferrous metal smelters and petroleum processing and coking activity slowed, the official PMI found. The official and HSBC PMI surveys on China often do not move in tandem due to their different sampling methods. The official PMI favours big state factories while the HSBC PMI favours smaller private manufacturers.
Upcoming risks
Manufacturing activity at 11-month high March PMIs rebound as domestic demand shines Koh Gui Qing
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tronger domestic demand helped China’s factory activity to rebound in March, with new orders up sharply in a sign that the underlying economic recovery is strong enough to weather any risks from patchy export performance, two separate surveys showed yesterday. The Purchasing Managers’ Index was 50.9, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing, an 11-month high and up from 50.1 in February. It was again above the 50-point level that indicates growth on the month, but below a Reuters poll consensus forecast of 52.0. A separate survey by HSBC Holdings Plc and Markit Economics showed its final PMI climbing to 51.6 last month, roughly in line
with a flash reading of 51.7 and up from February’s 50.4. “Growth momentum has been stabilising, but headwinds remain,” Liu Li Gang and Zhou Hao, economists at Australia & New Zealand Banking Group Ltd, said in a note to clients. “The current economic rebound remains fragile, and could falter with tightened monetary policy conditions.” The twin PMI surveys suggest the speed of revival in the world’s No. 2 economy may not be as brisk as some think, as unsteady foreign demand for Chinese exports remained a constraint. Most analysts expect China’s economy to enjoy a steady but gentle recovery this year, driven internally by infrastructure investment and household consumption, after growth struck 13-year
Stocks rise as developers, drugmakers advance Shanghai index has dropped 1.5 percent this year
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ost Chinese stocks rose as gains by property developers and health-care companies offset a manufacturing data that missed economist estimates. China Vanke Co. led developers higher as home prices jumped and Credit
Suisse Group AG said property curbs announced by local governments were milder than expected. Drugmaker Guilin Layn Natural Ingredients Corp. jumped by the 10 percent daily limit after health authorities said two people died of bird flu.
lows in 2012 due to crumbling demand for Chinese exports. The strength and extent of China’s recovery hinges on when the central bank tightens monetary policy after loosening policy last year and increasing credit supply to
induce an economic rebound. Qu Hongbin, HSBC’s chief China economist, said while China’s resilient local demand would support its economy in coming months, domestic growth is not surging, not with the HSBC PMI showing factory inflation fell in March for the first time in six months. “ B e i j i n g policymakers should keep a relatively accommodative Official PMI at 50.9 misses policy stance in expectations of rise to 52.0 place,” Mr Qu said. The HSBC PMI HSBC final PMI at 51.6 vs showed factories flash reading of 51.7 struggling with stubbornly sluggish New orders sub-indexes in export orders, both surveys bounce higher weakness that was offset by firmer domestic demand Overall indications are of that a drove a big recovery gaining traction
KEY POINTS
About two stocks rose for each that fell in the Shanghai Composite Index, which lost 0.1 percent to 2,234.4 at the close. The gauge changed direction at least 10 times after the official Purchasing Managers’ Index posted a reading of 50.9 for March, trailing the 51.2 median estimate of 26 analysts surveyed by Bloomberg News. The CSI 300 Index declined less than 0.1 percent to 2,493.19. “The PMI indicates the recovery is going on but the strength is a bit weaker than expected,” said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management
Co. “Local governments’ attitude towards the property market is more lenient” than expected, he said. The Shanghai index has dropped 1.5 percent this year amid concern steps to cool property prices will drag on economic growth and as company earnings trailed estimates. It is valued at 9.1 times projected 12-month earnings, the lowest level since December and less than the seven-year average of 15.8, according to data compiled by Bloomberg. The Shanghai Property Index gained 0.9 percent even as China’s largest cities, including Beijing and Shanghai, tightened rules
Concerns that China’s economic policy may be less accommodative this year were heightened over the weekend when a host of Chinese cities, including Beijing and Shanghai, said they would enforce plans to cool property prices. The property market accounted for 17 percent of China’s economy in 2011 and while the country’s record home prices are a social problem, analysts worry a heavy-handed approach to calming prices would risk scuppering the economic recovery. Ting Lu, an economist at Bank of America-Merrill Lynch, said China’s renewed push to enact property controls come as Beijing reins in wasteful government spending and lending outside traditional financing channels, and as the debt crisis worsens in Europe, a key market for China’s exports. “We cut year-on-year quarterly gross domestic product growth to 7.9 percent and 8.1 percent for the first and second quarters respectively,” Mr Lu wrote in a note to clients. The bank had previously forecast growth of 8.3 percent in both quarters. However, Mr Lu said he expects China’s central bank to leave rates unchanged this year as the country’s economic recovery remains fragile and inflation pressures muted. Reuters
on home purchases. Vanke, the nation’s biggest publicly traded property developer, gained 2.2 percent to 11 yuan. Poly Real Estate Group Co., the second largest, climbed 3 percent to 11.82 yuan. Drugmakers also climbed yesterday as three cases of infection with H7N9 avian influenza have been diagnosed in Shanghai and Anhui provinces, and two of the victims died, the National Health and Family Planning Commission said on Sunday. Guilin Layn surged 10 percent to 16.46 yuan. Hualan Biological Engineering Inc. advanced 3.1 percent to 25.20 yuan. Bloomberg News
April 2, 2013 business daily | 9
GREATER CHINA
Home prices increase most in 26 months: survey As local governments issue new rules to rein in prices banned single-person households from buying more than one residence, while Shanghai prohibited banks from giving credit to third-home buyers, the local governments said over the weekend. Home prices rose 3.9 percent last month from a year ago, according to the SouFun statement. A gauge tracking property shares rose 1.2 percent, the most among five industry groups on the Shanghai Composite Index. The benchmark measure fell 0.1 percent.
Safe haven
see a loophole, the minute they see something, the money goes back in, so the demand is there.” The southern city of Zhanjiang in Guangdong province had the biggest gain last month from February, with prices increasing 3.7 percent, SouFun said. Home values in the capital Beijing added 2.9 percent, while those in Shanghai, the country’s financial centre, jumped 0.5 percent from February. The measures by local governments were less stringent than investors had expected, which reflect a “tug-of-war between the local and central governments,” Ting Lu, chief economist for Greater China at Bank of America Corp., wrote in a note to clients yesterday. More than two-thirds of Chinese residents, or 68 percent surveyed, find property prices too high, the most since the final quarter of 2011, the People’s Bank of China said in a quarterly release on March 19. More than a third, or 34.4 percent, said home prices will rise in the coming three months. Bloomberg News
Prices of residential units in Beijing gained 2.9 percent in March
C
hina’s March new home prices posted the biggest gain in more than two years as buyers rushed into the market ahead of property curbs by local governments, driving real estate stocks higher. Prices climbed for the 10th month, rising 1.1 percent to 9,998 yuan (US$1,610) per square metre (10.76 square feet) from February, SouFun Holdings Ltd, the country’s biggest real estate website owner, said in a statement yesterday after a survey of 100 cities. That’s the biggest increase
since January 2011. “The earlier property policy uncertainty drove quite a lot of buyers into the market, while supply, usually low in the first quarter, couldn’t catch up with the demand,” said Zhao Zhenyi, a Shanghai-based property analyst at Industrial Securities Co. “Home sales will weaken in the coming months as more local governments announce curbs for the cities.” About 17 cities have issued details of property curbs by the end of the first quarter. The capital city of Beijing
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The measures come a month after former Premier Wen Jiabao ordered the central bank during his last days in office to raise down-payment requirements for second mortgages in cities with excessive cost gains and told local governments with the biggest price pressures to tighten home-purchase limits. “Property is seen as safe haven against inflation, against all sorts of changes in economic cycle,” Pauline Loong, managing director of Asia-Analytica Research in Hong Kong, said in a Bloomberg Television interview with Rishaad Salamat. “So you have a curb, so the money stops for a while; the minute they
RMB9,998
New home prices per square metre in March
10 |
business daily April 2, 2013
ASIA
Indonesia’s trade deficit widens Inflation accelerates to 5.90 percent in March
Food prices fuelled inflation above the upper limit of the central bank’s target range
I
ndonesia had another trade deficit in February and the inflation rate last month accelerated, underlining the challenges that face a new central bank governor and whoever replaces him as finance minister of Southeast Asia’s biggest economy. The changes add to uncertainty over the management of the economy whose currency has been pressed down by record trade deficits while
worries over inflation have made the government reluctant to tackle costly fuel subsidies that are digging a growing hole in the state budget. Parliament last week approved Finance Minister Agus Martowardojo to become central bank governor in May, but there is still no word on who will replace him to become the third finance minister in as many years. Yesterday, the statistics bureau announced a trade deficit for
February of US$330 million, which was twice as large as forecast in a Reuters poll.
Pressure on rupiah The last time Indonesia had a monthly trade surplus was September. The statistics bureau revised the January trade deficit to US$70 million, from the US$170 million it initially reported.
The trade deficits have been a factor putting pressure on the rupiah, which in 2012 was emerging Asia’s weakest currency, losing about 6 percent against the dollar. Annual headline inflation in March was 5.90 percent, the highest level since May. The poll had forecast only 5.57 percent, and the figure one month earlier was 5.31 percent. The central bank has kept its benchmark policy rate steady at a record low of 5.75 percent since February 2012. Bank Indonesia policymakers next meet on April 11. “The inflation surge is worrying. And while core inflation is better behaved, the inflation spike raises the risk of a Bank Indonesia rate increase at the next meeting,” said Chua Hak Bin, economist at Bank of America Merrill Lynch in Singapore. On-month inflation was 0.63 percent, easing from 0.75 percent in February, according to the statistics office. Core inflation, which strips out volatile food prices, slowed to 4.21 percent on-year in March from 4.29 percent the previous month. Purbaya Yudhi Sadewa, an economist from Danareksa Research Institute, said there was “a mistake in policy, including the limitation of beef imports and a delay in letting in several containers filled with garlic to port”. Reuters/AFP
Japanese business mood improves But pessimism shows challenges for BOJ governor
C
onfidence among big Japanese manufacturers improved by les s t han e con omists estimated, bolstering the case for Bank of Japan Governor Haruhiko Kuroda to expand stimulus at his first policy meeting on Wednesday. The quarterly Tankan for large manufacturers was at minus 8 in March, rising from minus 12 in December, the central bank said in Tokyo yesterday, as companies said they’ll cut investment by the most since the global recession. Stocks fell, with the Topix Index dropping the most in two years. Lingering pessimism may make it harder for Mr Kuroda to achieve a 2 percent inflation target as he needs companies to boost spending and wages to help revive growth. The Tankan reading adds to scepticism he can end 15 years of deflation through expanded stimulus alone, after former BOJ Deputy Governor Kazumasa Iwata said last week that Mr Kuroda’s two-year deadline for achieving his price target wasn’t possible. “Keeping expectations high will be extremely difficult for Kuroda,” said Nobuyasu Atago, principal economist at the Japan Centre for Economic Research in Tokyo and a former BOJ official. “The new central bank leadership will probably use the Tankan result as a reason to add monetary stimulus, as they’ll argue that the BOJ shouldn’t be throwing cold water on business confidence.” T he m edian estimate of 24 economists surveyed by Bloomberg News was for a Tankan reading of minus 7. A negative figure means
Big manufacturers have seen a slowdown in demand from key markets
pessimists outnumber optimists. The Nikkei 225 Stock Average closed down 2.1 percent in Tokyo, paring its gain this year to 16.7 percent, with the Topix down 3.3 percent yesterday. Large Japanese manufacturers are more optimistic about the second quarter, with the outlook index – which gauges how firms see conditions in three months – at minus 1 in yesterday’s Tankan. “The outlook for June is rosier than the March number as companies are expected to post bigger profits,” said Takuji Okubo, chief economist at Japan Macro Advisors, who formerly worked at Goldman Sachs Group Inc. Toyota, the world’s largest carmaker, agreed this month to pay its employees in Japan the biggest
bonus in five years and Kubota Corp., a tractor maker, predicts record sales.
Slowing investment Setting a target for the size of the balance sheet as a means of easing monetary conditions is one policy shift being considered, people familiar with the central bank’s discussions said last week. They asked not to be identified as the matter was still under discussion. The bank is considering using its balance sheet to measure monetary easing, Reuters reported last week. While the yen’s decline is set to improve the outlook for exporters in coming months, it’s already swelling the import bill as nuclear-plant shutdowns force increased imports of
fossil fuels. Exports fell 2.9 percent from a year earlier in February, while imports surged 11.9 percent. “Sentiment among steelmakers worsened this time, and that’s a sign the yen’s weakness is negative for those who have to import a lot,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo. “Demand for employment seems to be picking up slightly, but we have yet to see signs that wage increases will prop up consumption.” Large Japanese companies from all industries plan to decrease capital spending 2 percent in the fiscal year through March 2014, yesterday’s Tankan showed, compared with a revised 5.2 percent increase in the year ended March 31. Rising import prices due to the weaker yen add to cost pressures for manufacturers, while exports have fallen in eight of nine months through February. Bloomberg News
KEY POINTS Big manufacturers’ sentiment at -8 Manufacturers expect improvements 3 months ahead BOJ likely to ease at Kuroda’s first rate review
April 2, 2013 business daily | 11
ASIA
S. Korea exports miss forecast Qantas Weaker Japanese yen blunts companies’ competitiveness Europe sales up S 6-fold outh Korean exports rose less than forecast last month as improving global demand for the country’s electronics and cars was tempered by a weaker yen. Overseas shipments rose 0.4 percent in March from a year earlier, after an 8.6 percent drop in February, the Ministry of Trade, Industry and Energy said yesterday. The median estimate in a Bloomberg News survey of 11 economists was for a 1.8 percent gain. Consumer prices rose 1.3 percent last month from a year ago, according to a Statistics Korea report. Yesterday’s data suggest that the won’s strength against the yen may be outweighing the benefits of a global economic pickup and the South Korean currency’s weakness against the dollar. President Park Geun Hye’s government pledged to enact new stimulus measures after cutting the 2013 growth forecast to 2.3 percent last week, a revision that may put pressure on the Bank of Korea to lower its benchmark interest rate as well. “The central bank may feel under government pressure for a rate cut as early as next week as a further weakening of the yen should hurt
As Emirates alliance cuts flight times between continents
Q
The country’s growth forecast was cut to 2.3 percent last week
South Korean exports while domestic demand stays sluggish,” said Park Sang Hyun, a Seoul-based economist at Hi Investment and Securities Co. “A combination of fiscal stimulus and monetary easing should help the economy get out of the trough much faster.” Imports fell 2 percent from a year earlier in March, the ministry said yesterday. The trade surplus widened to US$3.4 billion from US$2 billion in February.
Won falls
US$3.4 billion
South Korea’s trade surplus in March
The South Korean currency gained about 21 percent against the yen in the past six months, according to data compiled by Bloomberg. The economy expanded last year at the slowest pace since 2009. South Korean companies have complained that the weakening Japanese yen is blunting their competitiveness. The Federation of Korean Industries, the nation’s
Singapore home price growth slows in Q1 As curbs sapped some demand from the city-state’s heated property market
S
ingapore home prices climbed at the slowest pace in three quarters after the government imposed more curbs such as higher stamp duties for housing transactions, a government report showed. The island state’s private residential property price index rose
0.5 percent to a record 213.1 points in the three months ended March 31, easing from a 1.8 percent increase in the fourth quarter, according to preliminary estimates released by the Urban Redevelopment Authority yesterday. The advance was the smallest since the second
Home sales plunged 65 percent to a 14-month low in February
largest business lobby group, said in February that with Haruhiko Kuroda leading the Bank of Japan, the yen will probably decline further. “Exports will likely recover by a greater degree in the second half as the global economic and trade conditions improve,” Lee Woon Ho, director-general for trade at the Ministry of Trade, Industry and Energy, told reporters in Gwacheon yesterday. “The weak yen is hurting some sectors, especially cars and steel, but the won-dollar rate is becoming more favourable to us.” The won has declined 4.6 percent against the dollar since January 1. Samsung Electronics Co. said in January that currency gains could reduce its operating profit by 3 trillion won (US$2.8 billion) this year. Kia Motors Corp. reported a 51 percent slump in operating profit for the fourth quarter of 2012, saying a difficult year is expected with a strengthening won. Bloomberg News
quarter last year. “Measures have taken effect,” David Neubronner, national director at Jones Lang LaSalle’s residential project sales in Singapore, said in a phone interview. “It’s taken out the investors and that’s seen in the slowing prices and sales. Had it been for the curbs, homes sales in the quarter would have much higher.” Singapore’s home sales plunged 65 percent to a 14-month low in February after the government introduced its seventh round of property curbs to cool record home prices. Home sales dropped to 708 units in February from a revised 2,016 units in January, the authority said on March 15. The data for last month is expected in mid-April. Apartment prices increased 0.4 percent in prime districts in the first quarter, down from a 0.7 percent gain in the previous three months, the data showed. Those in the suburbs climbed 1.7 percent, less than half of the 3.8 percent increase in the previous quarter, according to the statement today. Record home prices amid low interest rates raised concerns of a housing bubble and prompted the government to widen a four-year campaign to curb speculation prices in Asia’s second-most expensive housing market. Mr Neubronner expects prices to remain “flat” this year. Bloomberg News
antas Airways Ltd, the Australian airline that has vowed to restore profit at its international operations, said Europe bookings rose six-fold as an alliance with Emirates reduces flight times between the continents. The agreement with the Dubai-based airline cuts average journey times by more than two hours from Melbourne and Sydney to the top 10 destinations in Europe, according to a statement from Qantas marking the partnership’s first flight. The accord allows Australia’s largest carrier to shift its planes to more profitable Asian routes while reaching European destinations with a single stop in Dubai. Qantas chief executive Alan Joyce pledged to return the carrier’s international business to profit after the company last year reported its first annual loss since at least 1993. Dubai is “the geographical centrepiece of the partnership,” Tim Clark, Emirates president, said in the statement. On the new network, passengers will be able to fly to 65 international destinations with one stop in Dubai, compared with the previous five one-stop destinations in Europe under Qantas’s previous alliance with International Consolidated Airlines Group SA’s British Airways unit. Qantas long-haul services have battled for passengers with Gulf carriers, including Emirates, while contending with fuel costs that eat away about half of revenue on a flight between Australia and London. The tie-up is probably worth about A$90 million (US$94 million) a year before tax to Qantas, as it fills more seats on combined flights to Europe, New Zealand and Southeast Asia and drops the unprofitable Frankfurt service, Andrew Gibson, an analyst at Goldman Sachs Inc., said in a note to clients last month. Qantas has gained 20 percent this year in Sydney trading, compared with a 6.8 percent jump for the benchmark S&P/ASX 200. Reuters
12 |
business daily April 2, 2013
MARKETS Hang SENG INDEX NAME AIA GROUP LTD ALUMINUM CORP-H BANK OF CHINA-H BANK OF COMMUN-H
NAME
PRICE
DAY %
VOLUME
34
-0.2932551
19269207
CHINA UNICOM HON
2.99
-4.472843
36373474
CITIC PACIFIC
3.6
-0.5524862
497026893
5.81
-3.966942
93854745
CLP HLDGS LTD CNOOC LTD
PRICE
DAY %
VOLUME
10.4
-1.886792
33545200
10.08
0.8
68 14.92
NAME
PRICE
DAY %
POWER ASSETS HOL
73.25
1.66551
VOLUME 4363670
6878548
SANDS CHINA LTD
40.25
-1.348039
8677608
0.4431315
4961564
SINO LAND CO
13.16
-0.3030303
6008305
-1.192053
50786496
SUN HUNG KAI PRO
104.6
-0.9469697
10584889 1601404
BANK EAST ASIA
30.6
-0.8103728
1253014
COSCO PAC LTD
11.2
-1.408451
12558480
SWIRE PACIFIC-A
98.95
0.6612411
BELLE INTERNATIO
12.9
-1.07362
29939484
ESPRIT HLDGS
9.34
-0.6382979
4101862
TENCENT HOLDINGS
246.8
-1.516361
5434173
BOC HONG KONG HO
25.9
-0.1926782
21412070
HANG LUNG PROPER
29
0.8695652
5513740
TINGYI HLDG CO
20.25
-1.459854
3195593
124.5 -0.08025682
CATHAY PAC AIR
13.28
0.7587253
3051851
HANG SENG BK
CHEUNG KONG
114.6
0.7915567
5702863
HENDERSON LAND D
CHINA COAL ENE-H
6.92
-0.4316547
18528340
CHINA CONST BA-H
6.34
-0.9375
358441681
CHINA LIFE INS-H
20.1
-2.898551
74071297
CHINA MERCHANT
25.45
-4.323308
5990177
CHINA MOBILE
82.2
-0.3636364
12625500
HUTCHISON WHAMPO
80.9
-1.281269
6438134
CHINA OVERSEAS
21.4
-2.505695
20286887
IND & COMM BK-H
5.44
-0.1834862
465632612
CHINA PETROLEU-H
9.14
0.4395604
134422716
LI & FUNG LTD
10.7
-0.742115
15344750
-0.6441224
2138864
CHINA RES ENTERP
HENGAN INTL
1153872
WANT WANT CHINA
11.9
-0.3350084
11294327
53.1
-1.025163
5762866
WHARF HLDG
69.2
0.3625816
8096856
75.95
-3.371501
4153320
HONG KG CHINA GS
22.65
0.8908686
6174301
HONG KONG EXCHNG
132.2
-0.8995502
3242768
82
-1.025951
14224288
HSBC HLDGS PLC
23
-0.862069
5369580
MTR CORP
30.85
21.7
-0.913242
6644261
NEW WORLD DEV
13.14
0.152439
15093649
CHINA RES POWER
23.25
-2.515723
9071574
PETROCHINA CO-H
10.18
-0.5859375
73249092
CHINA SHENHUA-H
28.2
-1.398601
22147703
PING AN INSURA-H
60.2
-0.5780347
10653542
PRICE
DAY %
VOLUME
25.55
-1.730769
11734160
CHINA RES LAND
MOVERS
11
39
0 22490
INDEX 22299.63 HIGH
22487.26
LOW
22106.97
52W (H) 23944.74 22100
(L) 18056.4 26-March
28-March
Hang SENG CHINA ENTErPRISE INDEX NAME
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.72
-2.105263
218300600
AIR CHINA LTD-H
6.9
-1.428571
13302370
CHINA PETROLEU-H
9.14
0.4395604
134422716
2.99
-4.472843
36373474
CHINA RAIL CN-H
7.36
0.9602195
25.75
-3.013183
18226733
CHINA RAIL GR-H
3.95
3.6
-0.5524862
497026893
CHINA SHENHUA-H
ALUMINUM CORP-H ANHUI CONCH-H BANK OF CHINA-H
CHINA PACIFIC-H
PRICE
DAY %
VOLUME
10.46
-2.242991
26563957
ZIJIN MINING-H
2.56
-1.158301
32276741
23664194
ZOOMLION HEAVY-H
9.37
0.861141
14815443
-0.2525253
20817742
ZTE CORP-H
13.4
-4.011461
7516766
28.2
-1.398601
22147703
5.81
-3.966942
93854745
CHINA TELECOM-H
3.91
-1.511335
73202000
24.75
-1.590457
2714172
DONGFENG MOTOR-H
10.9
3.219697
29574705
CHINA CITIC BK-H
4.66
-4.115226
103481660
GUANGZHOU AUTO-H
6.57
1.545595
8740699
CHINA COAL ENE-H
6.92
-0.4316547
18528340
HUANENG POWER-H
8.28
1.098901
22144559
CHINA COM CONS-H
7.22
1.690141
51273242
IND & COMM BK-H
5.44
-0.1834862
465632612
CHINA CONST BA-H
6.34
-0.9375
358441681
JIANGXI COPPER-H
17.14
0.5868545
10183366
CHINA COSCO HO-H
3.66
-4.188482
22399318
PETROCHINA CO-H
10.18
-0.5859375
73249092
CHINA LIFE INS-H
20.1
-2.898551
74071297
PICC PROPERTY &
9.97
-1.676529
28152420
CHINA LONGYUAN-H
7.04
0.4279601
20076477
PING AN INSURA-H
60.2
-0.5780347
10653542
CHINA MERCH BK-H
16.44
-4.195804
41939415
SHANDONG WEIG-H
7.03
-0.9859155
12068197
BANK OF COMMUN-H BYD CO LTD-H
CHINA MINSHENG-H
9.89
-7.914339
170782999
25.05
-7.222222
19947444
CHINA NATL BDG-H
9.77
-1.809045
75268023
TSINGTAO BREW-H
49.5
3.01769
3482954
16.26
-0.1228501
6474000
WEICHAI POWER-H
25.85
-0.7677543
2728084
CHINA OILFIELD-H
SINOPHARM-H
NAME YANZHOU COAL-H
MOVERS
10
30
0 11090
INDEX 10896.22 HIGH
11086.94
LOW
10778.76
52W (H) 12354.22 10770
(L) 8987.76 26-March
28-March
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.68
-0.7407407
83033786
CHONGQING CHAN-A
9.77
5.053763
39565596
AIR CHINA LTD-A
5.4
-2.877698
13570839
CHONGQING WATE-A
6.52
1.557632
ALUMINUM CORP-A
4.06
-1.456311
18140486
CITIC SECURITI-A
12.19
ANHUI CONCH-A
17.3
1.466276
14582529
CSR CORP LTD -A
BANK OF BEIJIN-A
8.7
-1.360544
23336489
DAQIN RAILWAY -A
NAME
NAME
BANK OF CHINA-A
2.91
-0.3424658
18407056
DATANG INTL PO-A
BANK OF COMMUN-A
4.69
-0.4246285
42670039
EVERBRIG SEC -A
BANK OF NINGBO-A
10.6
0.09442871
8554759
BAOSHAN IRON & S
4.8
1.479915
23.18
2.839397
BEIJING TONGRE-A
NAME
PRICE
DAY %
VOLUME
SAIC MOTOR-A
14.49
-2.094595
22828243
9934802
SANY HEAVY INDUS
10.02
-0.1992032
25090688
0.1643385
71853165
SHANDONG DONG-A
51.67
-0.8253359
6262805
4.04
-1.222494
37415621
SHANDONG GOLD-MI
32.05
-2.583587
9627023
7.44
-0.1342282
16689838
SHANG PHARM -A
13.4
1.592115
15603249
4.44
2.777778
10331919
SHANG PUDONG-A
10.05
-0.7897335
76052116
12.71
0.4743083
10471605
SHANGHAI ELECT-A
3.95
-0.5037783
3494049
GD MIDEA HOLDI-A
10.1
10.02179
942079
SHANXI LU'AN -A
17.42
0.1725129
8894742
38865686
GD POWER DEVEL-A
2.95
-0.6734007
38667027
SHANXI XISHAN-A
11.43
-0.08741259
7543924
11970083
GF SECURITIES-A
13.13
0.6130268
17990472
SHENZEN OVERSE-A
5.89
1.376936
31040433
63.23
-1.187686
821643
6.24
-2.040816
50755166
BYD CO LTD -A
21.6
-2.129588
3460953
GREE ELECTRIC
29.05
1.680084
12363223
SICHUAN KELUN-A
CHINA AVIC AVI-A
23.5
2.441151
6051132
GUANGHUI ENERG-A
21.18
-0.04719207
14231744
SUNING COMMERC-A
CHINA CITIC BK-A
4.6
-1.498929
63087612
HAITONG SECURI-A
10.14
0.2967359
69762880
TASLY PHARMAC-A
69.87
-0.1143674
1961207
HANGZHOU HIKVI-A
39.47
2.413077
3272652
TSINGTAO BREW-A
38.03
3.146189
3284081
HENAN SHUAN-A
79.65
-1.423267
1721720
WEICHAI POWER-A
20.73
-3.085554
6946690
17.55
2.332362
9667048
WULIANGYE YIBIN
21.93
-1.835273
15343038
CHINA CNR CORP-A
3.89
-2.261307
44997402
CHINA COAL ENE-A
7.08
-0.979021
6275877
CHINA CONST BA-A
4.58
0
23339958
HONG YUAN SEC-A
CHINA COSCO HO-A
3.62
-4.986877
12576300
HUATAI SECURIT-A
9.57
0.7368421
22272445
YANGQUAN COAL -A
13.53
0.0739645
5546256
CHINA EAST AIR-A
3.23
-0.308642
7127686
HUAXIA BANK CO
10.25
-2.007648
18084637
YANTAI WANHUA-A
17.94
-1.374382
10789446 4167022
3.18
-1.242236
59216404
IND & COMM BK-A
4.06
0.2469136
49566923
YANZHOU COAL-A
16.94
-0.4700353
17.18
0.1749271
6684936
INDUSTRIAL BAN-A
17.2
-0.5780347
79009896
YUNNAN BAIYAO-A
84.38
-1.309942
1795583
CHINA MERCH BK-A
12.4
-1.821061
41277653
INNER MONG BAO-A
29.05
-2.58216
24441572
ZHONGJIN GOLD
13.86
-2.531646
16491613
CHINA MERCHANT-A
12.3
1.905551
24842058
INNER MONG YIL-A
31.56
-0.3787879
7495027
ZIJIN MINING-A
3.42
-1.440922
53468655
13444869
INNER MONGOLIA-A
5.24
2.34375
114967105
ZOOMLION HEAVY-A
8.13
1.119403
31196748
32.46
-3.421601
7206166
11.35
1.339286
28992148
-2.821869
4770536 7983056
CHINA EVERBRIG-A CHINA LIFE INS-A
CHINA MERCHANT-A
24.7
4.705384
CHINA MINSHENG-A
9.68
0.4149378
190127187
JIANGSU HENGRU-A
CHINA NATIONAL-A
9.41
1.400862
21403801
JIANGSU YANGHE-A
60.61
CHINA OILFIELD-A
16.66
0.482509
3405610
JIANGXI COPPER-A
21.82
-1.667418
CHINA PACIFIC-A
18.4
0.6014215
9316337
JINDUICHENG -A
11.25
-0.1774623
4776339
17.88
1.938426
18336680
164.95
-2.315528
2912880
CHINA PETROLEU-A
7.38
-0.135318
28045610
KANGMEI PHARMA-A
CHINA RAILWAY-A
5
-1.380671
17023518
KWEICHOW MOUTA-A
CHINA RAILWAY-A
2.75
-1.785714
33985343
LUZHOU LAOJIAO-A
24.92
-2.27451
14216259
2.03
-0.4901961
15669323
ZTE CORP-A
MOVERS 159
CHINA RESOURCE-A
32.12
0.375
4290468
CHINA SHENHUA-A
21.63
-0.6887052
8901175
NINGBO PORT CO-A
2.46
-0.4048583
9583109
8.69
0
10172484
HIGH
2535.99
LOW
2485.08
CHINA SHIPBUIL-A
4.99
1.629328
34378712
CHINA SOUTHERN-A
3.65
-0.5449591
12604568
PING AN BANK-A
20.39
1.341948
38554183
CHINA STATE -A
3.36
-0.2967359
68125611
PING AN INSURA-A
40.99
-1.867369
25089494
CHINA UNITED-A
3.57
1.133144
65111696
POLY REAL ESTA-A
11.82
2.961672
55563764
11
2.230483
67843859
QINGDAO HAIER-A
12.91
1.413983
8251746
7.36
-0.9421265
10726958
QINGHAI SALT-A
28.97
-1.462585
7636331
PRICE DAY %
Volume
CHINA VANKE CO-A CHINA YANGTZE-A
18 2540
INDEX 2493.187
METALLURGICAL-A PETROCHINA CO-A
123
52W (H) 2791.303 (L) 2102.135
2480
28-March
1-April
FTSE TAIWAN 50 INDEX PRICE DAY %
Volume
ACER INC
25.75
-1.151631
5307542
FORMOSA PLASTIC
71.2 -0.9735744
2965701
TAIWAN MOBILE CO
103
ADVANCED SEMICON
24.25
-1.020408
5040614
FOXCONN TECHNOLO
83.2
0
4082564
TPK HOLDING CO L
590 -0.6734007
ASIA CEMENT CORP
36.4 -0.1371742
1853865
FUBON FINANCIAL
41.95
-1.985981
15225637
TSMC
101
0.4975124
ASUSTEK COMPUTER
355 -0.6993007
11213834
UNI-PRESIDENT
57.4
1.413428
6425803
11.15 -0.4464286
14979544
NAME
AU OPTRONICS COR CATCHER TECH
13
NAME
956925
HON HAI PRECISIO
82.8 -0.6002401
-1.515152
49772611
HOTAI MOTOR CO
244
-2.204409
234720
240.5
NAME
PRICE DAY %
UNITED MICROELEC
140
2.941176
26085516
HTC CORP
-1.635992
6110917
WISTRON CORP
CATHAY FINANCIAL
40.15
-1.953602
21248820
HUA NAN FINANCIA
17.2 -0.5780347
3060778
YUANTA FINANCIAL
CHANG HWA BANK
17.45
-1.690141
10461153
LARGAN PRECISION
772
-1.404853
620796
YULON MOTOR CO
CHENG SHIN RUBBE
89.1
1.25
7168933
LITE-ON TECHNOLO
47.8 -0.8298755
4128259
CHIMEI INNOLUX C
18.2
-1.086957
39783991
MEDIATEK INC
341 -0.2923977
CHINA DEVELOPMEN
8.45
-1.169591
26112594
MEGA FINANCIAL H
CHINA STEEL CORP
25.85 -0.7677543
11089424
CHINATRUST FINAN
17.75
0
18050065
CHUNGHWA TELECOM
-0.621118
10806619
NAN YA PLASTICS
52.9
-1.30597
2389647
PRESIDENT CHAIN
167
0.6024096
854624
65.3
-1.804511
6452049
34
0
1460422
93
0.2155172
2796870
QUANTA COMPUTER
0
10291125
SILICONWARE PREC
DELTA ELECT INC
130
1.960784
7246297
SINOPAC FINANCIA
14.25 -0.6968641
19615003
FAR EASTERN NEW
31.2
1.463415
5054081
SYNNEX TECH INTL
54.5 -0.5474453
2451441
FAR EASTONE TELE
68.1
-1.017442
2486135
TAIWAN CEMENT
18.75
0
7468527
TAIWAN COOPERATI
FORMOSA CHEM & F
FIRST FINANCIAL
69.5
1.017442
2783140
TAIWAN FERTILIZE
FORMOSA PETROCHE
78
0.5154639
790573
TAIWAN GLASS IND
37.55
Volume 1004340 1618129 16011716
-1.052632
3477138
15.05 -0.9868421
5215520
52.1
-2.434457
4434605
3358859
24
21.2
COMPAL ELECTRON
32.9
1.477833
0.1333333
3385120
17 -0.5847953
5025958
71.5
-0.27894
2081164
27.55
-2.992958
768481
MOVERS
13
32
5 5520
INDEX 5487.81 HIGH
5511.31
LOW
5441.68
52W (H) 5639.93 5440
(L) 4719.96 28-March
1-April
April 2, 2013 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange)
Max 32.65
Average 32.364
Min 32.15
32.8
59.8
17.0
32.6
59.4
16.8
32.4
59.0
16.6
32.2
58.6
16.4
32.0
Last 32.4
Max 59.45
Average 58.970
Min 58.6
58.2
Last 59.3
40.3
40.2
40.1
Max 40.3
Average 40.147
Min 40
40.0
Last 40.25
Max 20.1
Average 19.332
Commodities
METALS
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
WTI CRUDE FUTURE May13
96.84
-0.401110768
3.950193216
107.2099991
81
BRENT CRUDE FUTR May13
109.56
-0.418105799
1.004886144
117.4300003
91.54999542
GASOLINE RBOB FUT May13
309.81
-0.401851733
7.05252246
330.369997
237.7199888
GAS OIL FUT (ICE) May13
917.5
-0.081677103
0.191100191
1000.75
801.25
NATURAL GAS FUTR May13
3.994
-0.745526839
15.66753548
4.12100029
3.072000027
HEATING OIL FUTR May13
303.51
-0.39054808
0.373701964
327.1399975
258.5000038
Gold Spot $/Oz
1596.7
-0.0501
-4.071
1796.08
1527.21
Silver Spot $/Oz
27.9825
-1.1917
-7.0658
35.365
26.1513
Platinum Spot $/Oz
1577.5
0.4553
3.9367
1742.8
1379.05
Palladium Spot $/Oz
769.05
-0.3692
9.9177
786.5
553.75
LME ALUMINUM 3MO ($)
1904
-0.626304802
-8.152436083
2200.199951
1827.25
LME COPPER 3MO ($)
7540
-0.867735998
-4.930021435
8702.75
7219.5
LME ZINC
1897
-0.628601362
-8.798076923
2230
1745
16660
-1.127596439
-2.344665885
18920
15236
15.35
-0.065104167
-0.87181143
16.95000076
14.5
657
-5.501618123
-6.176365584
838
520.25
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) May13 CORN FUTURE
Min 16.28
Last 16.6
May13
20.8
19.95
20.7
19.70
20.6
19.45
20.5 Max 20.75
Average 20.568
Min 20.45
Last 20.6
COUNTRY MAJOR
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
PRICE
DAY %
1.0405 1.5199 0.9497 1.2811 93.36 7.9967 7.7637 6.208 54.28 29.32 1.2413 29.874 40.827 9739 97.139 1.21657 0.84285 7.9529 10.2444 119.6 1.03
-0.1344 0.0066 -0.0526 -0.0624 0.9212 -0.0013 -0.0013 0.0354 0.1566 -0.2046 -0.0806 -0.164 -0.0416 -0.0411 1.0717 0.0247 0.0866 0.1283 0.0449 0.9699 0
YTD %
(H) 52W
0.2602 -6.0398 -3.6117 -2.8734 -7.7763 -0.1688 -0.1687 0.364 1.3172 4.2974 -1.6032 -2.8152 0.436 0.5545 -8.0421 -0.7472 -3.2544 3.3271 2.7918 -5.0418 -0.0097
1.0625 1.6381 0.9972 1.3711 96.71 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 99.978 1.25692 0.88151 8.4957 10.9254 127.71 1.0314
0.9582 1.4832 0.9002 1.2043 77.13 7.9824 7.7498 6.2056 50.515 29.08 1.2152 28.913 40.54 9095 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029
MACAU RELATED STOCKS (H) 52W
(L) 52W
3.66
0.5494505
16.19047
3.94
2.29
5504871
132.0500031
CROWN LTD
12.3
-0.3241491
15.27648
12.59
8.06
1135325
676.25
-1.672119229
-14.15423675
938
665
SOYBEAN FUTURE May13
1394.25
-0.747463962
-0.357334286
1639.5
1218.75
COFFEE 'C' FUTURE May13
137.15
0.402635432
-6.509884117
204.5999908
NAME
PRICE
DAY % YTD %
VOLUME CRNCY
SUGAR #11 (WORLD) May13
17.66
-1.06442577
-9.897959184
24.56999969
17.55999947
AMAX HOLDINGS LT
0.045
0
-96.78571
1.96
0.9
13645500
COTTON NO.2 FUTR May13
89.15
0.780013565
17.51911416
93.93000031
68.18999481
BOC HONG KONG HO
25.9
-0.1926782
7.468878
27.1
20.85
21412070 100000
CENTURY LEGEND
World Stock MarketS - Indices
0.305
1.666667
15.09435
0.42
0.215
CHEUK NANG HLDGS
5.92
-0.5042017
-1.168611
6.74
2.8
71000
CHINA OVERSEAS
21.4
-2.505695
-7.359309
25.6
14.124
20286887
CHINESE ESTATES
12.6
0.4784689
3.879672
12.964
7.697
196500
CHOW TAI FOOK JE
10.6
0.56926
-14.79099
13.4
8.4
7029754
EMPEROR ENTERTAI
2.43
5.194805
28.57143
2.49
1.1
1115000
FUTURE BRIGHT
2.41
-7.307692
97.54098
2.75
0.64
7434000
GALAXY ENTERTAIN
32.4
-1.219512
6.754529
35.7
16.94
10391496 1153872
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
14578.54
0.3605908
11.25141
14585.1
12035.08984
NASDAQ COMPOSITE INDEX
US
3267.521
0.337753
8.213486
3270.297
2726.68
HANG SENG BK
124.5
-0.08025682
4.886271
131.5
99.2
FTSE 100 INDEX
GB
6411.74
0.3785483
8.713915
6533.99
5229.76
HOPEWELL HLDGS
31.45
-0.4746835
-5.413534
35.3
19.049
802372
DAX INDEX
GE
7795.31
0.07985528
2.402924
8074.47
5914.43
HSBC HLDGS PLC
82
-1.025951
0.8610048
88.45
59.8
14224288
NIKKEI 225
JN
12135.02
-2.120438
16.73699
12650.26
8238.96
4022000
HANG SENG INDEX
HK
22299.63
-0.7353275
-1.576953
23944.74
18056.4
CSI 300 INDEX
CH
2493.187
-0.07598946
-1.179765
2791.303
2102.135
TAIWAN TAIEX INDEX
TA
7899.24
-0.2446136
2.594198
8089.21
6857.35
KOSPI INDEX
S&P/ASX 200 INDEX
SK
1995.99
-0.4439146
-0.05308123
2051.8
1758.99
AU
4966.499
-0.5704512
6.830549
5163.5
3985
ID
4938.072
-0.05897608
14.39495
4953.399
3635.283
FTSE Bursa Malaysia KLCI
MA
1668.09
-0.2117694
-1.235086
1699.68
NZX ALL INDEX
NZ
941.44
0.2706361
6.732819
PHILIPPINES ALL SHARE IX
PH
4236.9
0.06116699
14.54239
JAKARTA COMPOSITE INDEX
20.4
(L) 52W
ARISTOCRAT LEISU
WHEAT FUTURE(CBT) May13
NAME
16.2
20.20
19.20
Last 19.38
Average 16.504
CURRENCY EXCHANGE RATES
NAME ENERGY
Min 19.22
Max 16.94
3.84
-1.538462
7.86517
4.05
2.98
24.9
-1.190476
2.049182
30.05
14.7
928000
MELCO INTL DEVEL
13.44
-2.749638
49.16759
13.96
5.12
4688250
MGM CHINA HOLDIN
16.6
-2.007084
25.0162
18.449
9.509
5667700
MIDLAND HOLDINGS
3.43
1.179941
-7.297298
5
3.249
3248000
NEPTUNE GROUP
0.152
-1.935484
0
0.226
0.084
7590000
NEW WORLD DEV
13.14
0.152439
9.317799
15.12
7.95
15093649
SANDS CHINA LTD
8677608
40.25
-1.348039
18.5567
41.05
20.65
SHUN HO RESOURCE
1.48
-0.6711409
5.714288
1.67
1.03
20000
1526.6
SHUN TAK HOLDING
4.18
-1.415094
-0.2386648
4.65
2.56
6489144
944.123
755.149
SJM HOLDINGS LTD
19.38
-2.613065
7.666667
22.15
12.34
6891500
4290.5
3238.77
SMARTONE TELECOM
12.8
0.4709576
-9.090909
17.38
12.5
850955
WYNN MACAU LTD
20.6
0.243309
-1.670648
25.5
14.62
19875348
HSBC Dragon 300 Index Singapor
SI
643.1
0.01
3.54
NA
NA
STOCK EXCH OF THAI INDEX
TH
1554.5
-0.4202273
11.67946
1601.34
1099.15
HO CHI MINH STOCK INDEX
VN
505.81
3.007902
22.25606
505.81
Laos Composite Index
LO
1388.68
-1.37286
14.31629
1455.82
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
HUTCHISON TELE H LUK FOOK HLDGS I
ASIA ENTERTAINME
4.12
1.477833
34.64053
6.8
2.4
271875
BALLY TECHNOLOGI
51.74
-0.5955812
15.72355
52.7
41.74
190263
372.39
BOC HONG KONG HO
3.38
0
10.09772
3.59
2.7
45800
973.8
GALAXY ENTERTAIN
4.27
-1.83908
7.556674
4.57
2.25
9000
INTL GAME TECH
16.5
-1.315789
16.44319
17.49
10.92
2134831
JONES LANG LASAL
99.08
-1.598967
18.03669
100.86
61.39
238498
LAS VEGAS SANDS
56.32
-0.4243281
22.0104
58.3216
32.6127
4373332
MELCO CROWN-ADR
23.165
0.3682842
37.55938
23.25
9.13
4505720
MGM CHINA HOLDIN
2.19
0
18.37838
2.44
1.36
500
MGM RESORTS INTE
12.96
-1.369863
11.3402
14.65
8.83
10274911
SHFL ENTERTAINME
16.51
-0.2416918
13.86207
18.77
11.75
338492
SJM HOLDINGS LTD
2.53
2.016129
9.523812
2.85
1.65
59969
124.13
-0.3292115
10.34759
129.6589
84.4902
800494
WYNN RESORTS LTD
AUD HKD
USD
14 |
business daily April 2, 2013
Opinion
Betray your bank before your bank betrays you Jonathan Weil
Bloomberg View columnist
W
hat’s a Slovenian with several hundred thousand euros in the bank supposed to do? Spread it out among at least a few different banks, that’s what. Or move the money out of the country, while it’s still possible. Imagine what must be on the minds of any savvy depositors still left at Nova Kreditna Banka Maribor d.d., now 79 percent-owned by Slovenia’s government. It was one of only four lenders in October that failed the European Banking Authority’s latest capital-adequacy test, a ritual best known for how lax its standards are. One that flunked was Bank of Cyprus Pcl, where uninsured depositors face 40 percent losses as part of the country’s bailout terms. Another was Cyprus Popular Bank Pcl, also known as Laiki Bank, where uninsured deposits will fare far worse and the bank is being shut. Cypriot banks’ customers were complacent after uninsured deposits went unscathed in Ireland, Greece, Spain and Portugal, the first euro-area countries to seek international rescues. Slovenians won’t have that excuse should their country be next. The former Yugoslav republic needs about 3 billion euros (US$3.8 billion) of funding this year, while its struggling banks need 1 billion euros of fresh capital, the International Monetary Fund said last week. Slovenia’s central bank this week urged the country’s new government to quickly carry out a plan to recapitalise ailing lenders. It’s a familiar pattern.
Oblivious customers The Central Bank of Cyprus warned months ago that the country’s banks
needed an infusion of 10 billion euros – which is more than half the size of the nation’s economy – largely because of heavy losses on Greek sovereign debt held by Laiki and Bank of Cyprus. It seems a lot of customers were oblivious to the banks’ deteriorating health, or were confident they would be cared for by somebody else. The country is getting a 10 billion-euro bailout, nine months after it first asked for aid, except none of the money will go to the banks. Suddenly it should be dawning on a lot of Europeans that deposit-guarantee limits matter. In Slovenia, the maximum is 100,000 euros per depositor, the same as in Cyprus. (Deposit-insurance programmes vary among the 17 countries that use the euro.) For a few days last week, it looked as if customers at Laiki and Bank of Cyprus would lose even some of their insured deposits, which would have been a sacrilege. That plan was scrapped, but could resurface elsewhere for all we know should some genius at the German Finance Ministry insist upon it. The one constant among bailouts of euro-area countries is that there is no rhyme or reason, much less fairness, in the way many details get worked out. Cypriots may bemoan the inequities of their rough treatment, as might a bunch of wealthy Russians who mistook the island for a reliable financial centre and failed to yank their money when they could. For the rest of Europe, the implications should be obvious. Anyone who leaves uninsured deposits in a euro-area bank is on notice that their money can and will be taken from them, if that is what’s demanded by the troika of the IMF, the European Commission and the European Central Bank. Uninsured deposits aren’t riskless.
Nor should they be. Still, it’s unclear why the euro area’s central planners sought to create a precedent that encourages capital flight from weak countries. This could lead to more instability, not less. So far, there have been no signs of a mass exodus in countries such as Italy or Spain. But deposit migrations can happen slowly, with lots of time passing before they appear in official statistics. Or maybe little will change and most bank customers will go on believing “it can’t happen here,” until one day it does.
Restoring normalcy Much good might come from restoring some semblance of normalcy
Anyone who leaves uninsured deposits in a euro-area bank is on notice that their money can and will be taken from them, if that is what’s demanded by the troika
to the hierarchy of creditors in banking. Even better would be to see Germany try it for a change with its own zombie lenders, such as Commerzbank AG (CBK), which is still partly governmentowned after its bailout in 2009. The way it’s supposed to work at failing banks is that shareholders get wiped out first. Next the losses go up the ladder from junior debt holders to senior bondholders, and then all the way to uninsured depositors, if need be. Taxpayers and insured depositors shouldn’t have to absorb others’ losses or put money at risk to spare them. Troubled banks should have to fend for themselves. This was the approach imposed on Cyprus. In ordinary circumstances, it would be considered fair. The best argument for why it wasn’t is that Cyprus had been lulled into believing it would be treated just as well as Europe’s other bailout recipients. The entire country got hooked on moral hazard. Now Cyprus may be the template for the future, regardless of European governments’ recent statements to the contrary. If a bankrupt euro-area country can’t afford to recapitalise its own insolvent banks, it will have to “bail in” their owners and creditors first as a condition of receiving outside aid. Or at least that’s what Dutch Finance Minister Jeroen Dijsselbloem said last week in an outburst of candour, before later retracting the statement after it triggered declines in European markets. Wealthy depositors in Spain, Italy, Greece and elsewhere should assume he was speaking the truth the first time and take measures to protect their money, rather than trusting governments to do it for them. Bloomberg View
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April 2, 2013 business daily | 15
OPINION Business
wires Leading reports from Asia’s best business newspapers
China Daily Authorities in Guangzhou announced detailed regulation to further cool the real estate market amid expectations of rising property prices this year. Those without hukou in the city are permitted to buy houses after they have continually paid tax or social security fees there for one year or longer two years before they buy a house. “The measures are aimed at better cooling down the property market by providing more land for residential use,” said Huang Wenbo, spokesman for the Guangzhou Land Resources and Housing Administrative Bureau. The regulations in Guangzhou did not mention detailed measures to limit property prices.
Yomiuri Shimbun Japan will offer Mongolia loans of 4.2 billion yen (US$446 million) to renovate thermal power plants in that country, Prime Minister Shinzo Abe told his Mongolian counterpart, Norov Altankhuyag. During the talks, the two leaders also agreed to cooperate on natural resource development projects in Mongolia, including the Tavan Tolgoi coalfield. They also confirmed the two countries would accelerate negotiations for a bilateral economic partnership agreement. Japan’s offer is incorporated in the agreedon “Erch Initiative,” a set of Japanese economic cooperation policies Mr Abe proposed during the talks.
Vietnam News Vietnam central bank’s move last week to cut the dong interest rate cap from 1-month to 12-month terms by 0.5 percent to 7.5 percent has caused economists to wonder whether it would also be a good move to lower the lending rate and help businesses to recover their sluggish production. Despite the deposit rate cut, lending interest rates remained high at roughly 15 percent, too high for many businesses to afford while consumption remained low, experts said. Financial expert Nguyen Tri Hieu said if the health of the banking system remained weak and consumption low, the lending interest rate would be difficult to cut.
Jakarta Post Indonesian property developers have performed on a par with market forecasts predicting skyscraper growth. PT Agung Podomoro Land (APLN), whose projects include upmarket residential estate Green Bay Pluit, remains one of the strongest performers. In 2012, APLN made 4.7 trillion rupiah (US$484.1 million) in revenue, a 22.6 percent growth year-onyear increase. Another strong performer was PT Summarecon Agung (SMRA) with 3.4 trillion rupiah in revenue, up by 46.8 percent from a year earlier. Thendra Crisnanda, an analyst at BNI Securities, said the 2025 percent rise in the average selling price of properties have been a positive influence to the performance of developers in the past year.
China on the move Stephen S. Roach
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Faculty member at Yale University and former chairman of Morgan Stanley Asia
he debate is over. After six years of weighing the options, China is now firmly committed to implementing a new growth strategy. At least, that’s the verdict I gleaned from the just-completed annual China Development Forum, long China’s most important dialogue with the outside world. There were no surprises in the basic thrust of the strategy – a structural shift in China’s investment- and export-led growth model toward a more balanced consumer-based and services-led economy. The transformation reflects both necessity and design. It is necessary because persistently weak global growth is unlikely to provide the solid external demand for Chinese exports that it once did. But it is also essential, because China’s new leadership seems determined to come to grips with a vast array of internal imbalances that threaten the environment, promote destabilising income inequality, and exacerbate regional disparities. The strategic shift is also a deliberate effort by Chinese policymakers to avoid the dreaded “middleincome trap” – a mid-stage slowdown that has ensnared most emerging economies when per capita income nears the US$17,000 threshold (in constant international prices). Developing economies that maintain their old growth models for too long fall into it, and China probably will hit the threshold in 3-5 years. Three insights from this year’s China Development Forum deepened my confidence that a major structural transformation is now at hand that will enable China to avoid the middle-income trap. First, a well-articulated urbanisation strategy has emerged as a key pillar of consumerled rebalancing. This was emphasised by China’s new senior leaders – Executive Vice Premier Zhang Gaoli and Premier Li Keqiang – in the Forum’s opening and closing
remarks, and considerable detail was provided in many of the working sessions.
Urban dream Urbanisation is a building block for consumption, because it provides powerful leverage to Chinese households’ purchasing power. Urban workers’ per capita income is more than three times higher than that of their counterparts in the countryside. The urban share of the Chinese population reached 52.6 percent in 2012 – up nearly three-fold from 18 percent in 1980, and is expected to rise toward 70 percent by 2030. If ongoing urbanisation can be coupled with job creation – a distinct possibility in light of China’s emphasis on developing its embryonic labour-intensive services sector – the outlook for household-income growth is quite encouraging. The pace of urbanisation should dispel Western doubts
stemming from concerns over so-called ghost cities and chronic over-investment. According to research by McKinsey & Company, with the annual influx of new urban residents totalling 15-20 million, China will need more than 220 large cities (at least one million people) by 2030, up from 125 in 2010. Moreover, because urbanisation is a capital-intensive endeavour and China’s capital stock per worker – a key driver of productivity growth – is still only 13 percent of the levels in the United States and Japan, China has good reason to remain a high-investment economy for years to come. What is new today is the focus on urbanisation’s negative externalities – especially the thorny issues of land confiscation and environmental degradation. A well-developed “eco-city” framework was presented at this year’s Forum to counter both concerns, and features incentives promoting a new urbanisation model that stresses compact land usage, mixed modes of local transportation, lighter building materials, and non-carbon energy sources.
Hukou reform
It will take courage and sheer determination to tackle what is perhaps the biggest obstacle of all – resistance from deeply entrenched local and provincial power blocs
The second insight from the 2013 China Development Forum is the new government’s focus on strengthening the social safety net as a pillar of a modern consumer society. In particular, owing to the hukou (China’s antiquated household registration system), access to public services and benefits is not portable. As a result, migrant workers – an underclass numbering roughly 160 million – remain shut out of government-supported health care, education, and social security. Holes in the social safety net have led to high and rising levels of precautionary saving – driving a wedge between increases in labour income and any impetus to discretionary purchasing
power. Significantly, there were strong hints from senior Chinese leaders at the Forum that hukou reform is now under active consideration. While that would be welcome, such efforts need to be accompanied by an expansion of benefits. China’s retirement system has only about US$430 billion of assets under management (national and local government social security and privatesector pensions). I pressed newly appointed Finance Minister Lou Jiwei on this point, suggesting that China deploy some of its excess foreign-exchange reserves to fund such an effort – the same tactic used to provide a US$200 billion start-up injection for the China Investment Corporation, the sovereign wealth fund that he ran for the previous five and a half years. Unfortunately, he did not favour this suggestion. The final – and possibly most important – insight that I took away from the Forum concerned the quality of China’s new leaders. From President Xi Jinping and Premier Li Keqiang on down, China’s new leadership team is quite sophisticated in terms of analytics, risk assessment, scenario modelling, and devising innovative solutions to tough problems. Moreover, under the organisational umbrella of the National Development and Reform Commission (NDRC) – the latter-day version of the old central planning apparatus – China has marshalled considerable resources into the formulation of a comprehensive and wellthought-out economic strategy. But, in the end, it takes more than strong policy and analytical skills to deal with tough economic challenges. We have seen unfortunate examples of that repeatedly in the West in recent years, and there are no guarantees that China’s newly installed leaders will avoid comparable pitfalls. Vision and strategy are vital for realising the “China Dream,” as the country’s new leaders are now calling it. But it will take courage and sheer determination to tackle what is perhaps the biggest obstacle of all – resistance from deeply entrenched local and provincial power blocs. On this critical front, strong words must be accompanied by bold action. © Project Syndicate
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business daily April 2, 2013
CLOSING S. Korea pledge over North threats
India rejects drug firm’s patent plea
South Korea has promised a “strong response” to North Korean aggression, amid high tensions on the peninsula. Speaking to defence officials yesterday, President Park Geun-hye said that she took the series of threats from Pyongyang “very seriously”. North Korea said on Saturday that it was entering a “state of war” with South Korea. “If there is any provocation against South Korea and its people, there should be a strong response in initial combat without any political considerations,” Ms Park said. In recent days North Korea has issued multiple warnings of attacks on U.S. and South Korean targets.
India’s Supreme Court has rejected a plea by Novartis AG to patent an updated version of its cancer drug, Glivec. The Swiss drugmaker had been denied a patent by Indian authorities on the grounds that the new version was only slightly different from the old. The decision means generic drugmakers can continue to sell copies of the drug at a lower price in India, one of the fastest growing pharmaceutical markets. Novartis said the decision “discourages future innovation in India”. Glivec, which is used to treat chronic myeloid leukaemia and other cancers, costs about US$2,600 a month.
Taiwan to ease rules on Chinese banks Banks allowed to investment more in Taiwanese peers
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aiwan will ease rules to allow Chinese banks to buy bigger stakes in local banks and permit more Chinese firms to invest in its financial industry, the island’s financial regulator said yesterday, marking a major advance in cross-strait ties. Taiwan will allow mainland banks to buy as much as 15 percent in unlisted local bank and financial holding companies, the China Banking Regulatory Commission (CBRC) and the Financial Supervisory Commission (FSC) said in a joint briefing. The stake allowed to be invested in a financial holding’s banking unit will be raised to 20 percent. The rules will take effect in 60 days. There were no specific stake limits set for either category previously, but 5 percent was seen as a cap for regulators. In exchange, CBRC will speed up the review process to allow Taiwan banks to open a second unit in the same city in the mainland, a CBRC official said. “This is a big breakthrough,” said the CBRC official. “We’ll see Chinese banks applying for buying a stake in Taiwan banks in future,” he said, without offering details. Moves to bolster ties in TaiwanChina financial sectors have lagged
Nobody immune from probe: Cyprus leader Into allegations of wrongdoing in the run-up to the bailout
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he Cypriot president pledged yesterday that not even his own family will be immune from a commission of inquiry into allegations of wrongdoing in the runup to the crippling euro zone bailout. President Nicos Anastasiades was responding to allegations traded between the pro-government and opposition press that family members of leading politicians had taken
Taiwan comes now fourth in yuan payments
similar efforts in manufacturing and other areas owing to Taiwanese concerns over Chinese influence. The higher limits are expected to be well received by some local banks and investors. Taiwan’s banking sector is crowded and highly competitive, with about 37 local banks serving the island’s 23 million population. Taiwan’s banking sector share
index has surged by more than 20 percent since November, largely on expectations that cross-straight investment rules would be eased and local banks would be allowed to expand more quickly on the mainland. Taiwan, a latecomer in developing offshore yuan business, has overtaken the United States and Australia to be ranked fourth
in payments using the Chinese currency, said global transaction services organisation SWIFT. Yuan payments made by Taiwan grew by 120 percent in the past six months and nearly 44 percent of all payments made between Taiwan and China/Hong Kong are now exchanged in yuan
advantage of privileged information to protect their assets from the swingeing hit on bank deposits imposed by international creditors last month. Mr Anastasiades said that the panel, which is to start its work today, would have explicit terms of reference to exclude nobody from their investigations, even his own extended family. “I want to emphasise that during tomorrow’s [today’s] swearing in ceremony for the three distinguished judges, they be given a mandate to investigate everything that is possibly related to me, including those relatives linked to me by marriage,” he said. The massive losses suffered by savers in the island’s two largest banks in the first euro zone rescue package to punish larger depositors has sparked huge resentment against anybody seen as having taken unfair advantage to shirk their share of the burden. Allegations have swirled of big movements of cash out of both banks in the run-up to the bailout agreement as those in the know scrambled to
protect their money. The panel, which has three months to report its findings, will also probe a list published by Greek media of Cypriot politicians who allegedly had loans forgiven during the meltdown, Justice Minister Ionas Nicolaou said last week. Bank of Cyprus, Laiki and third largest lender Hellenic Bank reportedly forgave millions of euros in loans over the past five years to lawmakers, companies and local authorities, newspapers in Greece have alleged.
lender Laiki will have to wait years to see any of their money as the bank is wound up with the loss of thousands of jobs. Such losses would be “a great shame”, First Deputy Prime Minister Igor Shuvalov said, “but the Russian government won’t take any action in that situation”. Speaking on the Russian state TV channel Rossiya 1, Mr Shuvalov said Russian money in Cyprus included some that had been taxed and some that had not. He said the Russian government would still look at cases where there were “serious losses, involving companies in which the Russian state is a shareholder”. That review would take place in Russia, and “for this it would certainly not be necessary to help the Republic of Cyprus”, he said. A 10 billion-euro bailout from the EU and IMF – required to keep the debt-laden Cypriot economy afloat – will only be granted if Cyprus itself raises 5.8 billion euros, most of which looks likely to come from depositors with more than 100,000 euros in Bank of Cyprus and Laiki.
No Russian bailout The Russian government said it will not compensate Russian savers who have lost money in the Cyprus banking crisis. Russians are believed to have billions of euros in Cypriot accounts and deposits above 100,000 euros (US$128,200) in the two biggest banks could be reduced significantly. Big depositors in largest lender Bank of Cyprus face losses of up to 60 percent, while those in second
Reuters
Reuters