Macau Business Daily, April 25, 2013 by Business Daily

Sovereign funds ‘take wealth’ says economist T

he government’s fiscal reserve has managed to squeeze a return of under 1.75 percent out of its billion-dollar investments in its first year – a performance eclipsed by inflation. A public economics professor believes the territory should establish a sovereign wealth fund similar to Singapore’s Temasek Holdings (Private) Ltd.

Such a fund would have the power to invest in the local economy but also in international companies and projects, including high-risk ventures. But a sovereign wealth fund expert warns that in other jurisdictions these entities have not been proven good investors and are “implicitly taking wealth from citizens”. More on page 4

www.macaubusinessdaily.com

Year II

Number 269 Thursday April 25, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief Vitor Quintã

MOP 6.00

April 19, 2013

I SSN 2226-8294

Hang Seng Index 22200

22158

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Ponte 16 part owner narrows its losses

Land law revision to plug share transfer loophole

Success Universe Group Ltd – a 49 percent owner of the Ponte 16 casino resort on the edge of Macau’s old town – saw its losses attributable to shareholders narrow by nearly 60 percent in the 12 months to December 31. The loss fell to HK$33 million (US$4.25 million) from HK$77.7 million a year earlier. Earnings before interest, taxation, depreciation and amortisation rose five percent year-on-year to HK$331.5 million.

The new land law will regard any changes to the share structure of entities holding government land concessions as in effect land transfers. The goal is to close a loophole whereby companies could previously transfer land to third parties after being granted concessions. The administration will also be empowered to prevent the automatic renewal of land grants by invoking “vital public interest”.

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April 24

HSI - Movers Name

%Day

BELLE INTERNATIO

6.11

WANT WANT CHINA

3.79

SINO LAND CO

3.77

HUTCHISON WHAMPO

3.69

CHINA RES POWER

3.16

TINGYI HLDG CO

0.25

HENGAN INTL

0.19

POWER ASSETS HOL

0.14

CLP HLDGS LTD

LI & FUNG LTD

Source: Bloomberg

Brought to you by

Melco Crown US$377 mln share float for Manila

HK firm wants out of Grand Waldo Page 5

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Taiwan: first case of mainland-linked bird ‘flu Page 16

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April 25, 2013

Macau opinion

Poor optics

Ponte 16’s part owner narrows losses Success Universe and JV partner SJM awaiting approval on 20 pct more gaming tables Michael Grimes

michael.grimes@macaubusinessdaily.com

José I. Duarte Economist

vents sometimes develop in ways beyond the grasp of the people involved. It is as if the facts and circumstances deviously grow of their own accord. Minor issues grow out of proportion to their true worth, only to reveal, sometimes disastrously, the hidden reality or character flaws. That is the stuff of tragedy. Tragedies can occasionally become mockeries when the unexpectedly comedic occurs. I am not talking about the arts, just politics – the politics of optic fibre. The recent uproar stems from a simple question: who authorised the installation, paid with public money, of a fibre optic connection to the private homes of a government department director – none other than the head of the public service – and his two deputies? The issue does not seem particularly weighty or a likely source for excessive concern, but it has become a test of the government’s sincerity. There are at least two situations that might justify the cost being borne by the public purse. The government may have determined, and the Legislative Assembly agreed, that the holders of well-defined types of public jobs should be entitled to have fibre access at home as part of their benefits package. That is not the case here, since there is no such regulation. A second hypothesis might be that exceptionally high-speed Internet access at home was advantageous or necessary to discharge public duties. A request might be made to a superior with a list of exceptional and explicit reasons to justify the need – as should the process in this case. When the question about who authorised the fibre to the home was raised, the answer was less than straightforward. The press release offered no answers. The public was treated, maybe with a didactical purpose, to a list of the people that might have signed it. Just might! That list includes the Secretary for Justice, the director himself and his deputies.

Question time Suddenly, the affair becomes a mystery, a game, a riddle. Further efforts to fully clarify what went on were no help, with further information reiterating the initial details. At this point, the plot takes its farcical turn. Secretary for Justice Florinda Chan denied having authorised the expenditure, leaving the public to guess between two alternatives. Maybe the director signed the request himself. Perhaps he did not want it to be known. Perhaps he thought that because it involved his home, it was a private matter. He might have been feeling a bit guilty. Alternatively, one of his deputies signed for it, using powers delegated to them by the director. This would be a situation, I presume, without precedent. To delegate power to a subordinate so they can decide on matters of one’s personal interest would involve such twisted reasoning that the possibility must be refused without delay. The public was left with one reasonable explanation. Unfortunately, it raises concerns of gross irregularity or even abuse of power. Were any lessons taken from this episode? “Some workers have not yet understood what the duty of secrecy means” and the “management of government documents needs perfecting”. The threat and implications of these statements needs no elaboration. I do not want to delve into what might be deduced from this affair in terms of political skill or sensitiveness. The point is that none of the conclusions that can be drawn from the episode is positive or kindly. The final message is absolutely clear: officials have only one duty that must be abided by. It is not the law, due process or the public interest – it is secrecy. That conclusion, drawn from statements by the head of the public service, of a government that has so often invoked the need for and commitment to transparency and good governance, leaves the public undecided between conflicting sentiments.

uccess Universe Group Ltd – a 49 percent owner of the Ponte 16 casino resort on the edge of Macau’s old town – saw its losses attributable to shareholders narrow by nearly 60 percent in the 12 months to December 31. The loss fell to HK$33 million (US$4.25 million) from HK$77.7 million a year earlier. Earnings before interest, taxation, depreciation and amortisation rose five percent yearon-year to HK$331.5 million from HK$316.8 million. Nonetheless because the firm’s current liabilities – mainly in the form of loans – exceeded its current assets by approximately HK$175.07 million, the external auditors HLB Hodgson Impey Cheng Ltd, were required to issue a technical warning of “the existence of a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern”. The same warning was issued for the 2011 report. One of the factors currently limiting Success Universe’s development is that it has not yet been able to build the third phase of Ponte 16. The original permission agreed by now-jailed former secretary Ao Man Long was voided by the administration, although there is no suggestion of improper conduct on the part of Ponte 16’s investors or managers. In its 2012 results filed this week, Success Universe described the results from casino operations as “satisfying”. But Hoffman Ma Ho Man, deputy chairman of the company, confirmed in an interview with Business Daily in early March

that Ponte 16 would like to add 20 percent more gaming tables as part of an expansion. As at December 31, 2012, the casino of Ponte 16 had 109 gaming tables, 82 of which were mass gaming tables, nine were high-limit tables and 18 were VIP tables according to this week’s filing. Success Universe’s stake in Ponte 16 is the firm’s main asset. The rest of Ponte 16 is controlled by Sociedade de Jogos de Macau SA, which also supplies the gaming licence for the property. In April last year, the joint venture said it had signed bank loans worth more than 2.4 billion patacas to fund phase three of the resort’s development, refinance existing credit facilities and repay shareholders’ loans. The aim of the resort’s new phase says the management, is to boost the appeal of Ponte 16 as a destination resort in the manner of those on Cotai. Ponte 16, located at the Inner Harbour, is the nearest casino to the tourist hotspot of Macau’s UNESCO World Heritagelisted old town.

Mass appeal Ponte 16 currently has a casino popular with mass-market customers from neighbouring Zhuhai on the Chinese mainland. It offers a five-star hotel under the Sofitel brand and also the MJ Gallery, displaying props and costumes once used by the singer Michael Jackson; in mainland China a popular and well-recognised artist. But Ponte 16 has been looking to develop other

Ponte 16 – awaiting permission for phase three

drivers of foot traffic including mid-range restaurants and shops. Success Universe says it hopes in the interim this year to open a spa facility at Ponte 16. “We have submitted the applications for the operating licence of the spa, and we are in the queue for the government to come and do the site inspection,” Mr Ma told Business Daily. “We have been focused on developing our own niche, and a key part of that is developing tourism in the old town area in partnership with the government. I believe we’ll have some advantages in the future with all the transport infrastructure being built in Macau and also Zhuhai,” stated Mr Ma. “We’re happy with progress so far, but we’re always looking to work harder for the betterment of the business.” He added: “The government is seeking more transparency in the operation of its gaming industry. That’s similar to the exercise that Las Vegas went through in the 1980s. That will all benefit the image of Macau in the long term. It will build it into more of an international gaming destination.” Success Universe has several other businesses. Jade Travel Ltd, a travel agency incorporated in Canada, saw its turnover grow 10 percent yearon-year in 2012 to HK$1.54 billion. M.V. Macau Success, a cruise ship operated by the company, recorded a 16 percent rise in turnover, to HK$80.4 million. Success Universe also has a sales agency service for the mainland’s Sports Lottery in Jiangxi and Qinghai provinces.

April 25, 2013

Macau

Legal revision to plug land ownership loophole

editorial

A low blow to dignity

Land law revision to better police developers swapping control of land grants Tony Lai

tony.lai@macaubusinessdaily.com

Sands China Ltd planned to sell serviced apartments in a Four Seasons tower through a cooperative scheme and avoid restrictions in the land lease that ban developers selling flats. Under a cooperative or “coop” scheme, buyers hold shares in a legal entity that controls the property and land. The government has yet to authorise the Four Seasons deal.

Vague interest

Sands China Ltd had intended to sell serviced apartments in a tower at the Four Seasons tower through a co-op scheme (Photo: Manuel Cardoso)

and concessionaires that exploit land grants would be better policed by the government in the latest proposed change to the land law. Kwan Tsui Hang, the president of the Legislative Assembly’s first standing committee, said yesterday the changes would introduce “more rules to restrict the transfer of land plots as the society is quite concerned some are profiteering from transferring plots to other [parties] right after acquiring the land”. The proposal regards any company holding a land grant as having transferred the land if more than 50 percent of the company changes hands.

The company would have to follow the same procedures, including winning the government’s approval, if they authorised a third party to develop or manage land. “In the past, these [two cases] were not governed and there were loopholes,” said Ms Kwan. Ms Kwan spoke to reporters after a closed-door meeting with officials yesterday. Asked if the amendment was prompted by the attempted sale of Four Seasons apartments in 2010, she said: “I can’t answer this as we have not discussed this case with the government.” The new rules were meant to tackle situations happening in the market, she said.

The revision discussed yesterday also restricts companies with a temporary land grant or direct land grant, where no land premium was paid, from transferring ownership of the land without the chief executive’s approval. The meeting also discussed automatic renewals for land leases. Land grants may be renewed automatically for 10 years after the original 25-year lease expires. Ms Kwan said the government could defuse the problem by invoking “vital public interest”. “It is true that the concept of public interest is vague… it will differ in different times so the law will not have a concrete definition,” she said. “Whether something is considered as of vital public interest can only be decided by the public at that particular moment.” But she stressed the word “vital” could helped restrict the government’s discretionary powers. “We cannot deprive the government from such power as a lessor is entitled to the right of not renewing any lease,” she said. Ms Kwan said the committee wants the government to compensate concessionaires that do not renew a lease as this might involve “thousands of households [living] on the site”. She said the law did not define the conditions to calculate compensation.

Tiago Azevedo

tiago.azevedo@macaubusinessdaily.com

embers of the Legislative Assembly set a bad example on Monday when they rejected a bill that would have ended a cruel but common practice by the police. For years now, the authorities have been parading suspects at press conferences with their faces covered by black hoods. I have always wondered what the purpose of this ritual is. Is it not enough for the police to announce that they have arrested a thief or a drug trafficker and to put on display what they have seized from the suspect? What is to be gained by bringing the suspect out? Let us remember that suspects are simply suspects until convicted. Everyone charged with a crime must be presumed innocent until proven guilty. Legislative Assembly member José Pereira Coutinho came up with the bill to end this practice in a bid to preserve the dignity of suspects and protect them from public opprobrium. Only one of Mr Coutinho’s fellow-members, Leonel Alves, backed the bill. However, Mr Alves’s backing was a strong endorsement, considering that he is one of the few members with a background in law. As a lawyer, he probably knows better than all the other legislators whether this circus act tramples on a suspect’s rights. There is absolutely no need to expose detainees to the glare of media attention. The authorities would not – as one legislator argued – be restricting press freedom by not bringing them out. It is hard to see how this practice could be a deterrent to crime. I doubt that anyone on the verge of committing an offence would stop and think twice just because he or she feared being paraded at a press conference. The practice should be scrapped once and for all. Mr Alves, who holds the chair of the committee that oversees the security forces, could push for the practice to be abolished if he saw no need for it. Human rights must be safeguarded, and the police, as a law enforcement agency, should lead by example. Unfortunately, they are setting a poor example.

Sin Fong Garden report out this month

technical report analysing the troubled residential project Sin Fong Garden will be released this month, government officials said yesterday. The document was originally slated to come out in the first quarter but that was postponed because the government had to be “cautious” in tackling the public safety issue and helping the households who were evacuated from the Patane project since last October, Secretary for Transport and Public Works Lau Si Io said. Weng Fok Engineering and Construction Ltd, developer of the

Sin Fong Garden housing project, published an advertisement in Chinese-language newspaper Macao Daily News on Monday saying the building was in danger of collapsing due to an adjacent construction site. Weng Fok slammed the government for not taking actions against that site. “We have kept in touch with them [Weng Fok] and we have studied the reasons they have suggested” as the cause for the building’s structural problems, said the secretary. “It is ‘okay’ if in the end we have different opinions,” Mr Lau told

media on the sidelines of a Legislative Assembly meeting. “We can still have discussions on the technical aspect after the release of the report.” Jaime Carion, director of the Land and Public Works and Transport Bureau, told reporters on the same occasion they are not being pressured by Weng Fok to compile the report. He added they hope Sin Fong Garden flat owners and Weng Fok could reach a consensus on whether the complex should be demolished and rebuilt rather than letting the matter reach the courts. T.L.

Human rights must be safeguarded, and the police, as a law enforcement agency, should lead by example

April 25, 2013

Macau

Sovereign fund would supply big investment return: expert First year’s return for the city’s fiscal reserve is well below the rate of inflation Vítor Quintã

vitorquinta@macaubusinessdaily.com

Could Singapore’s sovereign wealth fund, Temasek Holdings, be a model for Macau?

he government’s fiscal reserve has managed to squeeze a return of less than 1.75 percent out of its billion-dollar investments in its first year. University of Macau public economics professor Jenny Huang Bihong said the return was “too low, much lower than inflation”. “As such its value is essentially declining.” The average rate of inflation for same period, the 12 months ending February 28, was 6.16 percent. Ms Huang told Business Daily that Macau should establish a sovereign wealth fund similar to Singapore’s Temasek Holdings (Private) Ltd. But another scholar disagrees, warning that such a move might not improve return on investment. About 68 percent of the fiscal reserve fund at the end of last year was invested in bonds, mainly top-rated Asian bonds and yuan-denominated bonds. The remainder was held in cash at banks and paid little interest, she said. Official data shows the sixmonth interest-rate benchmark fell below 0.54 percent this week for the first time since December 2011.

Ms Huang studied in Singapore and reviews articles for the academic journal Singapore Economic Review. She said a Singapore-style sovereign fund would have the power to “make different types of investments”. “It could invest in the local economy, for instance in the railway [Light Rapid Transit] project. That’s something that Temasek has done in Singapore.” A fund could also invest in international companies and projects, allowing it to have “a more diversified investment portfolio: a mix of safe vehicles and a few risky but high-return projects”. Christopher Balding, a political economics professor at Peking University, disagrees. “Sovereign wealth funds have not proven to be good investors. (…) They should not be in the business of operating asset management businesses,” he told Business Daily. “Evidence indicates that this investment role is much better suited for citizens and business than the government,” the economist explained. “By creating national wealth that is captured by the government, they [sovereign funds] are implicitly taking wealth from its citizens,” he said.

Trickle down

MOP1.73 billion

Fiscal reserve’s investment return in first year

The fiscal reserve contained 164.33 billion patacas (US$20.55 billion) at the end of February, according to a summary published by the Monetary Authority of Macau in the Official Gazette yesterday. That amount is almost 65.5 billion patacas higher than when the reserve was set up in the middle of February last year. But most of that money – 63.75 billion patacas – came from the 2011 government budget surplus that was

transferred to the reserve in January. The reserve’s return on its own investments was 1.73 billion patacas, resulting in an annual growth rate of less than 1.75 percent, according to Business Daily calculations. The result was “within our expectations,” the monetary authority told Business Daily yesterday. The predecessor of the fiscal reserve, the MSAR Reserve Fund, enjoyed a better performance, achieving an average annual return of 2.21 percent between 2001 and 2009. The monetary authority told Business Daily last week it would “adopt an investment strategy that aims to achieve a higher return in the long term”. In the first annual review of the fiscal reserve published last month, the authority said that only when the value of the special reserve had grown to 10 percent of the value of the basic reserve would it be safe to make higher-risk investments.

strategy might not have a positive effect on the fund’s return with the same fund managers in place, Ms Huang said. The authority runs the fiscal reserve but an advisory committee suggests investment strategies for the new fund and a second committee monitors its management. “There are not enough financial experts to manage the fund, as Macau is small and not a financial centre,” Ms Huang said. The government should look into the possibility of bringing in experts from overseas, “especially in the early stage” of the reserve system. But Mr Balding believes “most countries would benefit from an extremely simple, defined, and low cost investment strategy,” be it “holding primarily broad market ETFs [exchange-traded funds] or overweighting to a basket of high credit quality government and corporate debt”.

Skill deficit The special reserve is set aside for investment. Its value has grown to 53 billion patacas – almost half the size of the basic reserve. The basic reserve is set aside with the aim of securing the government’s ability to fulfil its commitments if there was a drastic reduction in revenue. It must cover 150 percent of the annual expenditure in the government’s budget. Ms Huang said the current investment strategy “may be too conservative” with too little investment offshore. Mr Balding goes even further, saying there should be “no local investment,” in order to prevent conflicts of interests and improve transparency. Any revamped investment

KEY POINTS Fiscal reserve returns 1.75 pct in first year of operation Proposed sovereign fund could invest in companies, projects Funds have not proven to be good investors, says economist International experts needed to guide reserve managers, says academic

April 25, 2013

Macau Govt closer to Hengqin UM campus takeover

HK firm wants to sell Grand Waldo stake

The government is inching closer to taking full control over the new campus of the University of Macau on Hengqin Island. Wei Zhao, the university’s rector, has been given the green light to sign a contract for the management of the campus delivery procedures. The Macau unit of U.S.-based engineering and construction management firm Parsons Brinckerhoff Pte Ltd will be in charge of the procedures, according to a notice published in yesterday’s Official Gazette. Asked by Business Daily when it might take over the site, the Infrastructure Development Office said the construction project was “now getting into the process of testing and commissioning”. “Partial delivery would be taken upon the schedule, starting from April,” the office added in an e-mail reply. Chief Executive Fernando Chui Sai On had said in February that the new campus should be ready to be “transferred to the Macau side by the end of March”. The office gave no reason for the delay nor did it say whether the contractor, Guangdong-based state-owned Nam Yue Group Corp Ltd, would be penalised for it. The university is planning to start trial operations in the new campus by June and have it operating fully in September, in time for the new academic year.

Vítor Quintã

V.Q.

Macau Bisiness Daily_25 Apr.pdf

vitorquinta@macaubusinessdaily.com

ong Kong logistics company Daido Group Ltd wants to sell its minority stake in Grand Waldo despite an improving outlook for the Cotai casino. In its 2012 annual report, sent to the Hong Kong Stock Exchange on Tuesday, the group says its 6 percent stake in Grand Waldo “is available for sale”. Daido Group believes the performance of the hotel-casino will “continue to improve as the tourism industry there [in Macau] maintains a boom”. Grand Waldo “saw favourable improvement” last year with room occupancy rate rising, the report adds. The property is “particularly in a favourable position to benefit” from increased visitation brought by the opening of more resorts in Cotai, the company wrote. The value of Daido Group’s investment in Grand Waldo decreased by a further HK$10 million (US$1.3 million) last year, which was still a smaller loss than the HK$35 million posted in 2011. After paying HK$336 million for a 12 percent stake in 2006, the

23/4/13

2:42 PM

Daido Group has a 6 percent stake in Grand Waldo (Photo: Manuel Cardoso)

company now estimates that its remaining shares have already lost over 70 percent of its value. Get Nice Holdings Ltd, the major shareholder of Grand Waldo, announced in October it

had failed to sell its controlling stake in the property. At the time Get Nice hinted that it still wished to sell the casino hotel, but the Hong Kong-listed firm has made no mention of any sale in the offing.

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Macau Chui Sai On to meet legislators today Chief Executive Fernando Chui Sai On will be in the hot seat at the Legislative Assembly today answering questions from legislators during a three-hour session. Mr Chui is expected to reply to inquiries over various topics, ranging from this year’s cash handout and social welfare programme to housing and economic policies. Today’s session also marks the first time Mr Chui goes to the assembly this year. The chief executive attends question and answer sessions three times a year – April, August and at the end of the year, as part of the government’s Policy Address.

Melco Crown US$377 mln share sale for Manila casino

ownership of 10.01 percent. The company earlier asked the Philippine Stock Exchange to suspend trading in its shares while the price for the share offering was being determined. Earlier this month, Melco Crown (Philippines) also raised 2.13 billion pesos from the sale of 150.43 million treasury shares, priced at 14.20 pesos apiece. Melco Crown (Philippines) Resorts Corp. is an off the shelf Manila-listed entity formerly known as Manchester International Holdings Unlimited Corp. Belle is part-owned by Sy family conglomerate SM Investments Corp. SM and Belle are supplying the land and constructing the shell of the Belle Grande complex. Melco Crown (Philippines) will fit out the building and provide the gaming equipment.

JV partner Belle has also asked Philippines govt for more land for further expansion Michael Grimes

michael.grimes@macaubusinessdaily.com

EBITDA deal It will also have exclusive operating rates for the venue, and receive 50 percent of gaming earnings before interest, taxation, depreciation and amortisation (EBITDA) and 100 percent of non-gaming EBITDA. Just under seven percent of the 250,000 square metres (2.69 million sq. feet) of gross floor area is expected to be for gaming. In its filings to the Manila exchange, Belle Corp. has described Belle Grande Manila Bay as a US$1 billion project. It’s likely to have more than that spent on it eventually. On Monday – probably encouraged by the strong response of investors to the Melco Crown share placement – Belle said it had asked the country’s government to let it lease an additional 10 hectares (24.7 acres) of land for expansion. Manuel Gana, Belle’s executive vice president and chief financial officer, wasn’t specific on how the extra land would be used.

MCE’s unit is traded on the Philippine Stock Exchange

unit of Macau casino investor Melco Crown Entertainment Ltd confirmed in a filing to the Philippine Stock Exchange it has raised US$377 million (3.02 billion patacas) for a Manila casino joint venture. Melco Crown (Philippines) Resorts Corp. did so via a private placement, as previewed by Business Daily on April 16. The money will go toward the fitting out and management of the US$1 billion Belle Grande Manila Bay casino resort. The facility – part of a Las Vegas-style strip of multibillion U.S. dollar casino resorts planned for an area of Manila Bay known as Entertainment City – is being developed jointly with Filipino

Chinese businessman Henry Sy. The Melco Crown share placement for Belle Grande was completed yesterday and was heavily oversubscribed. The share sale was priced at 14 pesos (33.88 U.S. cents) per share, or at the top end of the 11 pesos to 14 pesos price range, said UBS Philippines managing director Lauro Baja. UBS and Citigroup are jointly managing the sale. “The order book was over six times oversubscribed with 140 investors,” stated Mr Baja. According to the filing by Melco Crown (Philippines), it sold 981.183 million shares and another 117.075 million in overallotment shares. FinanceAsia reported that interest

was particularly strong among U.S. investors, with good backing from existing shareholders of the Melco Crown parent. The parent will retain a near 70 percent interest in Melco Crown (Philippines). 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. Melco Crown (Philippines) said in a statement to the local media that the transaction will broaden its investor base and widen its public float to 30.42 percent from the current public

KEY POINTS Share sale six times oversubscribed Greenshoe also sold Melco Crown parent to retain 70 pct stake JV partner wants 10 hectares more land

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April April 25, 19, 2013 2013

Greater China Regulator clears Marubeni deal Chinese regulators gave a qualified green light to Japanese trading house Marubeni Corp’s US$5.6 billion purchase of U.S. grain merchant Gavilon Group LLC, imposing stiff conditions that underscore Beijing’s anxiety over food security. The deal was announced almost a year ago but has been held up for months by Beijing’s close scrutiny of the combined group, which would have a leading role in supplying soybeans and other grains to China. U.S. and European antitrust authorities had already cleared the transaction. In a posting on its website, the Anti-Monopoly Bureau within the Ministry of Commerce said that the merger may “eliminate or limit competition in China’s soybean importing market”. As a result, the ministry said Gavilon and Marubeni would be required to maintain separate, independent trading units when selling soybeans to China, with strict firewalls to prevent any exchange of market information. Marubeni would have to buy beans from Gavilon’s vast U.S. network at arm’s length. China’s expected imports this year represent nearly a quarter of global soybean production.

Yum’s China profit drops 40pct KFC parent Yum Brands Inc reported that quarterly profit fell less than Wall Street expected, despite a sharp drop in sales in its top China market, sending the company’s shares up nearly 6 percent. The Kentucky-based fast-food company also repeated its earnings forecast for the year, based on the better-than-expected first-quarter results. Sales at established restaurants in China fell an expected 20 percent during the first quarter and Yum warned that fears surrounding a bird flu outbreak were continuing to depress sales already struggling to recover from a previous food safety scare. The fast-food operator reaps more than half of its overall sales in China, where most of its nearly 5,300 restaurants are KFCs. Still, Yum expects sales to recover in China, where it is on track to add 700 new restaurants this year. “Historically, the sales impact of Avian flu publicity has initially been dramatic at KFC, but relatively short-lived,” chief executive David Novak said in a statement. Yum’s first-quarter net income fell to US$337 million from US$458 million a year earlier.

Beijing to build new carriers China unveiled plans to build more aircraft carriers after commissioning its first last year, as the country extends its influence amid territorial disputes with neighbours including Japan and Vietnam. Future aircraft carriers will carry more fighter jets than the Liaoning, Rear Admiral Song Xue told foreign military attaches in Beijing, according to the official Xinhua New Agency. The carrier was built around a Sovietera hull and began trials at sea last year. The remarks signal that the People’s Liberation Army will push ahead with a modernisation plan under which defence spending has more than doubled since 2006. China has been more assertive in pressing sovereignty claims against Japan as well as Vietnam and the Philippines in the South China Sea. Tensions between China and Japan have escalated over islands in the East China Sea claimed by both sides. On Tuesday, Japanese Prime Minister Shinzo Abe vowed to use force if necessary to defend the islands, called Diaoyu in China and Senkaku in Japan. Both governments issued formal protests over the presence of each other’s vessels in waters around the islands, which lie in an area rich in fish and natural gas. Reuters/AFP

Banks’ profit growth slowed in 2012 Net income grew 20 percent as economy weakened

rofit growth at China’s banks slowed and bad loans climbed in 2012 as the world’s secondlargest economy expanded at the weakest pace in 13 years. Combined profit at Chinese lenders, including policy and commercial banks, and their foreign competitors in the country grew 20 percent to 1.5 trillion yuan (US$243 billion) last year, the China Banking Regulatory Commission said in its annual report yesterday. That compares with 39 percent growth in 2011. Government controls on interest rates and limits on foreign banks’ operations helped buoy profits at state-owned lenders last year even as economic growth slowed to 7.8 percent. Industrial & Commercial Bank of China Ltd, the world’s largest by market value, and its closest domestic competitors will publish first-quarter earnings this week. In 2013, the CBRC will guard against rising defaults and risks associated with lending outside the banking system, it said in the annual report. The regulator will continue to limit loans to local government financing vehicles and the real estate industry, it said. Bad loans in the banking industry rose to 1.07 trillion yuan last year from 1.05 trillion yuan in 2011, the regulator said. Non-performing loans accounted for 1.6 percent of banks’ total advances in 2012, compared

with 1.8 percent in 2011, according to the CBRC report. Profits at foreign lenders, which accounted for less than 2 percent of China’s banking assets, declined 2.4 percent last year to 16.3 billion yuan, the regulator said. The global banks ran 412 branches in China as of December, compared with about 65,000 operated by the four largest local lenders at the end of 2011, according to the CBRC. Reuters

US$243 billion

Combined profit of Chinese lenders in 2012

Chinese stocks appealing as valuations to bottom Ye Xie

hinese stocks are becoming attractive with the decline in equity valuations and corporate profit growth poised to level out, according to Goldman Sachs Asset Management. “We are probably at the trough of the earnings and valuation cycle,” Alina Chiew, head of Greater China equity at the New York-based bank’s asset management arm, told reporters in the city yesterday. “It’s a very interesting time to get into it.” While the Hang Seng China Enterprises Index, which tracks stocks trading in Hong Kong, slumped 8.8 percent this year to yesterday, member company earnings rose 1.7 percent in the three months through March 29, the first uptick since June, data compiled by Bloomberg show. The Bloomberg China-U.S. Equity Index of 55 Chinese stocks in the U.S. has dropped to 12 times estimated earnings, almost 50 percent below its valuation in March 2012. Profit growth will probably retreat to about 15 percent to 20 percent, from around 20 percent to 30 percent, Ms Chiew said. The Shanghai gauge has lost

2.1 percent this month after the government reported economic growth slowed to 7.7 percent in the first quarter, after rising to 7.9 percent in the last three months of 2012. Quarterly expansion is down from as high as 12.4 percent in 2006, before the global financial crisis. “The market needs to wean itself off expectations of double-digit growth out of China,” Mr Chiew said. “Investors should adjust the fair valuation that they are willing to pay. The key to investing in China is being able to ride out the cycle over the medium term and forget the bumpy ride in between.” Raw materials producers may be negatively affected as the government reorients China’s economy away from investment and exports and toward domestic consumption, she said. The Shanghai Composite trades at nine times estimated earnings, from a valuation as high as 33 in September 2007, show data compiled by Bloomberg. The MSCI Emerging Markets Index has a multiple of 10 times forward profit, and has retreated 2.1 percent in April. Bloomberg News

The key to investing in China is being able to ride out the cycle over the medium term and forget the bumpy ride in between Alina Chiew, Goldman Sachs Asset Management

April April 25, 19, 2013 2013

Greater China

ZTE, Microsoft sign smartphones deal Mobile-phone maker gains access to Microsoft technology Susan Decker

TE Corp., China’s secondbiggest maker of mobilephone equipment, signed a patent-licensing agreement with Microsoft Corp. for technology used

in smartphones and tablet computers. Financial terms weren’t disclosed, Microsoft said in a blog posting announcing the deal. The agreement gives Shenzhen,

China-based ZTE access to Microsoft technology for use in its phones, tablets, computers and other devices that run on Google Inc.’s Android and Chrome OS operating systems. With ZTE and other licensees, Microsoft gets royalties from 80 percent of the Android smartphones sold in the U.S. and more than half of those sold worldwide, Horacio Gutierrez, deputy general counsel at Redmond, Washington-based Microsoft, said in the blog posting. Google’s Motorola Mobility and ZTE’s crosstown competitor Huawei Technologies Inc. are the two largest holdouts. “There’s no one that can build a great product these days without using the ideas of other companies,” David Kaefer, general manager of Microsoft’s intellectual property licensing, said in an interview. “ZTE and Huawei look at each other as competitors. Having ZTE licensed only convinces others there is good value there.”

Smartphone market Microsoft has been embroiled in patent litigation with Motorola Mobility for more than two years. It

ZTE is the fourth-biggest manufacturer of smartphones

MIN

Bond traders urged to check histories Number of illegal trading cases seen rising

he People’s Bank of China asked participants in the nation’s US$3.7 trillion interbank bond market to examine trading histories, said two people with knowledge of the matter, amid reports of a probe into illegal transactions. The central bank held a meeting last week with the China Foreign Exchange Trade System, the National Association of Financial Market Institutional Investors and other market participants to discuss possible measures for boosting control over trading, said the people, who asked not to be identified because they weren’t authorised to speak publicly about the matter. The central bank said revelations of illegal trading had recently surfaced, according to the people. Chinese regulators are investigating illegal fixed-income transactions in accounts typically used by senior traders at financial institutions, the Shanghai Securities News reported last week. The government has sent teams to inspect trading records at companies in Shanghai, Beijing and Jiangsu province, the newspaper reported, without citing anyone. The People’s Bank of China didn’t immediately respond to questions

seeking comment. The central bank was due to meet with large lenders yesterday and will listen to their suggestions on improving the market, China Business News reported, citing people it didn’t identify. The meeting may include topics about “deep” reform of bond sales and trading, according to the report. “A lot of illegal trading cases have been reported in China. It’s becoming a trend rather than isolated incidents,” said Zhang Zhiwei, the chief China economist at Nomura Holdings Inc. in Hong Kong. “The PBOC is probing as part of the government’s broader efforts in clamping down on corruption and controlling escalating credit risk. It may have a negative impact on the economy in the short run, but setting the rules straight is necessary if China wants to expand the market.” China’s interbank market had 23.1 trillion yuan (US$3.7 trillion) of outstanding bonds at the end of March, according to Chinabond, the nation’s bond clearinghouse. That compared with 522 billion yuan on stock exchanges, where retail investors are allowed to trade, according to the clearinghouse. Bloomberg news

won a ruling that limited U.S. imports of Motorola Mobility phones that have a feature for syncing schedules between phones and personal computers, and is awaiting a final decision in a case that targets the Xbox video-gaming system. ZTE and Huawei have their own fight going on, with patentinfringement suits against each other in Europe. ZTE had 4.4 percent of the global smartphone market in the fourth quarter of 2012, making it the fourth-biggest manufacturer of smartphones, just behind Huawei. The field is dominated by Cupertino, California-based Apple Inc. and Samsung Electronics Co., based in Suwon, South Korea, which together made half the smartphones sold in the world during the last three months of the year, according to Bloomberg Industries data from researcher IDC. Last week, Microsoft announced it had reached a similar licensing agreement with Hon Hai Precision Industry Co., the world’s largest contract manufacturer of electronics, and its Foxconn unit. Microsoft also has agreements with LG Electronics Inc. and Samsung. Bloomberg News

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10 10

April April 25, 19, 2013 2013

Asia Vietnam’s inflation at 7-month low Vietnamese inflation slowed to the weakest pace in seven months in April, official data showed yesterday, in the latest sign that the communist-run economy is losing steam. Consumer prices rose 6.61 percent year-on-year in April, the Government Statistics Office said, slightly less than the 6.64 percent increase reported in March. Economists say the slowdown in inflation is the result of past monetary policy tightening as well as cooling domestic consumer demand. “The risk of another cut remains” if inflation continues to fall and the economy shows no sign of improvement, ANZ bank said in a research note.

CP All slumps most in 4 years Billionaire Dhanin Chearavanont’s CP All Pcl plunged the most in more than four years after offering to pay US$6.6 billion for Siam Makro Pcl on investor concern the price was too high. Thailand’s 7-Eleven operator fell as much as 11 percent to 38.5 baht (US$1.33) before closing at 39.25, down 9.7 percent. Siam Makro rose as much as 13 percent to a record. CP All offered 787 baht a share for Siam Makro, the Bangkok-based retailer said yesterday. The bid is 15 percent more than Siam Makro’s price on April 22 before the shares were suspended.

Billabong takeover talks extended Billabong International Ltd, Australia’s largest surfwear company, agreed to extend exclusive talks with a group led by a former director and Sycamore Partners Management for a A$287 million (US$295 million) takeover for a further 10 days. The parties will continue talks until May 8 for a 60 cents-a-share offer after Sycamore asked for more time to complete a report on the quality of the company’s earnings, Gold Coast, Australiabased Billabong said in a regulatory statement. There is no guarantee the transaction will proceed.

India’s Jet Airways to sell stake to Etihad Becomes the first Indian airline to sell shares to an overseas carrier

et Airways (India) Ltd, the nation’s biggest listed carrier, agreed to sell a stake to Etihad Airways PJSC, worth 20.6 billion rupees (US$ 379 million). Jet Airways agreed to sell 27.26 million shares to Etihad at 754.74 rupees apiece, the Mumbai-based carrier said in a stock exchange statement yesterday. That’s 32 percent higher than the stock’s closing price in Mumbai on Tuesday. The deal is subject to shareholders’ approval. A stake in Jet Airways will help Etihad tap into one of the fastestgrowing aviation markets in the world, where air travel is forecast to triple by 2021. Indian airlines are seeking global equity alliances after Prime Minister Manmohan Singh’s government in September allowed

foreign carriers to buy as much as 49 percent of local operators. “India is a high-priority market and Jet is a valuable partner,” Kapil Kaul, head of the Indian unit of CAPA Centre for Aviation said before the deal was announced. “Etihad’s strategy is to develop powerful and very structured alliances with carriers from regions which have strategic importance.” State-owned Etihad has invested in smaller operators to help feed long-haul flights and turn its home emirate into a hub for intercontinental travel. It has a 29 percent holding in Air Berlin Plc and also owns stakes in Air Seychelles Ltd, Virgin Australia Holdings Ltd and Aer Lingus Group Plc. Shares of Jet rose 4.5 percent to 573.15 rupees in Mumbai yesterday.

Asia-Pacific countries eye free-trade talks Martin Abbugao

C.banks watching yen effects: Kim South Korea’s central bank chief said yesterday that authorities were keeping a close eye on the effects from the yen’s slide, saying the weakness would likely persist for a long time. The yen’s weakness “is still at its beginning stage,” Bank of Korea Governor Kim Choong-soo told a lecture session for provincial government officials. He said electronics, automobile and steel makers would be vulnerable to the weak yen. Mr Kim also said central banks need to be prepared for possible market turmoil when the advanced countries begin unwinding their ultraloose monetary policy.

ixteen Asia-Pacific countries are set to start talks next month on a free-trade zone that would cover over half the world’s population, according to a document obtained by AFP. The start of negotiations for the Regional Comprehensive Economic Partnership (RCEP) is poised to go ahead despite bitter territorial rifts among planned members, including China, Japan and some Southeast Asian nations. Leaders of the Association of Southeast Asian Nations (ASEAN), who yesterday began a meeting in Brunei are expected to focus on kickstarting the talks after launching the process last year at a summit in

Phnom Penh. The leaders will agree that “the negotiations will commence in May 2013 in Brunei … with a view to completing them by 2015,” according to the latest draft of the chairman’s end-of-meeting statement that was obtained by AFP. “We looked forward to the broadening and deepening of existing [free-trade agreements] and envisioned the RCEP to be a platform for future trade and investment integration in Asia and the rest of the world,” the draft stated, which is prepared by senior officials and could be changed. A senior Southeast Asian trade official told AFP the first round of

The local stock market was closed yesterday for a public holiday. Jet, which had 116 aircraft, including Boeing Co. and Airbus SAS planes as of Septemebr 30, is selling and leasing back planes to free up cash and repay US$600 million of its US$2.3 billion debt by March 31. In December, Jet agreed to expand a codeshare pact with Etihad, which operates services to nine Indian cities, including New Delhi and Mumbai. The Indian carrier flies to 125 destinations, including Abu Dhabi, Bahrain, Doha, Dubai, Jeddah, Kuwait and Muscat. “Indian carriers need funds for expansion, to reduce debt and have enough liquidity to be able to manage operations in a tight economic environment,” CAPA’s Mr Kaul said. Reuters

RCEP negotiations is expected to start on May 9. The RCEP covers ASEAN’s 10 member countries – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – as well as Australia, China, India, Japan, New Zealand and South Korea. Together, the negotiating countries encompass more than three billion people and generate about one-third of global economic output. The pact aims to tie together ASEAN’s bilateral free-trade agreements with each trading partner, but excludes the United States which is leading talks for a rival trade agreement called the Trans-Pacific Partnership. “The RCEP provides an important platform for building trade liberalisation within the Asia-Pacific, which is the world’s fastest growing region,” Rajiv Biswas, chief regional economist at IHS Global Insight, said. “The initiative is very important as it includes the three major drivers of emerging markets growth – China, India and ASEAN.” AFP

11 11

April April 25, 19, 2013 2013

Asia

LG Electronics profit plunges 91 pct Net income at the TV-making unit falls in first quarter Jungah Lee

G Electronics Inc., the world’s second-largest television maker, posted a 91 percent drop in first-quarter profit as a stagnant market hurt TV sales. Net income fell to 22.1 billion won (US$20 million) in the three months ended March 31 from 247.5 billion won a year earlier, Seoul-based LG said in a statement yesterday. Sales increased to 14.1 trillion won from 13.2 trillion won. Profit at the TV-making unit declined from a year earlier as demand for plasma-display sets decreased, LG said in the statement. The company, which trails Samsung Electronics Co. in TV shipments, has said it plans to increase deliveries 15 percent this year by offering sets with new display technologies and more advanced functions. “LG lagged behind Samsung in the high-end TV race while it also was pressured by some players like Vizio in the lower-end category, forcing it to cut prices,” Kwon Sung Ryul, a Seoul-based analyst at Dongbu Securities Co., said before the earnings release. “A strong TV rebound isn’t likely this year. Only about a low-single percentage growth

is expected at best.” LG fell 0.4 percent to 90,000 won in Seoul trading, compared with a 0.9 percent gain in South Korea’s benchmark Kospi index. The shares have gained 22 percent this year.

OLED TVs Operating profit fell to 349.5 billion won from 401.7 billion won a year earlier, LG said. Revenue increased mainly because of improved earnings at the company’s mobile business, the company said. Sales of LCD TVs increased in Europe and emerging markets including China, LG said. LG said earlier this year it started selling a 55-inch TV set with a display using organic light-emitting diodes, or OLEDs, in South Korea for 11 million won, giving the company a head start in mass-marketing the technology. The company will expand OLED TV sales to North America, Europe and other Asian markets in the first quarter, it said at the time. Suwon, South Korea-based Samsung said a month later that it aimed to start selling OLED TVs in the first half of this year.

Sales of LCD TVs increased in emerging markets

TVs with OLED screens offer sharper and brighter images than current liquid-crystal-display models and consume less power. They are also thinner as they don’t require the use of a backlight. Worldwide shipments of LCD

sets, the biggest TV segment, fell for the first time in 2012, NPD Group Inc.’s DisplaySearch said on March 21. The global average selling price for flat-panel TVs declined 2 percent, the researcher said. Bloomberg News

April 25, 2013

Markets Hang Seng Index NAME

PRICE

DAY %

VOLUME

33.25

0.3016591

21532311

CHINA UNICOM HON

ALUMINUM CORP-H

2.89

2.120141

11564113

CITIC PACIFIC

BANK OF CHINA-H

3.51

2.034884

460978120

BANK OF COMMUN-H

5.91

2.426343

28605853

BANK EAST ASIA

30.65

2.508361

2708551

BELLE INTERNATIO

12.86

6.105611

26.1

CATHAY PAC AIR CHEUNG KONG

AIA GROUP LTD

BOC HONG KONG HO

NAME

DAY %

VOLUME

10.82

2.656546

27858056

9.35

1.081081

6064247

PRICE

DAY %

73.5

0.1362398

1276671

SANDS CHINA LTD

40.55

1.756587

5279705

SINO LAND CO

13.22

3.767661

11686640

SUN HUNG KAI PRO

113.7

1.336898

4643644

97.1

1.198541

1388281 3139302

POWER ASSETS HOL

VOLUME

67.3

2338800

14.04

1.886792

55171125

COSCO PAC LTD

10.56

1.538462

3583395

SWIRE PACIFIC-A

27406640

ESPRIT HLDGS

10.08

0.5988024

3350291

TENCENT HOLDINGS

254.4

1.112878

1.953125

18292719

HANG LUNG PROPER

2.739726

4323624

TINGYI HLDG CO

20.05

0.25

6006852

13.28

0.9118541

1956000

HANG SENG BK

127.4

2.411576

1931792

WANT WANT CHINA

12.04

3.793103

6250630

WHARF HLDG

69.9

1.304348

4025987

118.1

1.722653

3941172

6.32

1.607717

20521419

CHINA CONST BA-H

6.27

2.117264

244665874

CHINA LIFE INS-H

20.45

1.741294

31206867

CHINA MERCHANT

24.35

1.247401

2713708

CHINA MOBILE

HENDERSON LAND D

57.05

0.5286344

4040687

HENGAN INTL

77.55

0.1937984

3654500

HONG KG CHINA GS

23.25

1.30719

6233621

HONG KONG EXCHNG

129.4

2.131018

3788923

HSBC HLDGS PLC

81.95

2.373517

12850917

82.95

1.343922

10559660

HUTCHISON WHAMPO

82.95

3.6875

12879792

CHINA OVERSEAS

23.2

1.310044

17587958

IND & COMM BK-H

5.28

1.34357

342136499

CHINA PETROLEU-H

8.36

1.210654

109433562

LI & FUNG LTD

9.95

24056594

CHINA RES ENTERP

25.8

0.9784736

3534266

MTR CORP

31.2

1.463415

2342418

2.678571

5823939

NEW WORLD DEV

13.68

2.39521

17241311

CHINA RES POWER

24.45

3.164557

5817482

PETROCHINA CO-H

9.56

1.594049

61150199

CHINA SHENHUA-H

25.85

1.571709

17427386

PING AN INSURA-H

59.6

1.706485

9617064

PRICE

DAY %

VOLUME

27.25

2.443609

11702000

CHINA RES LAND

NAME

CNOOC LTD

CHINA COAL ENE-H

CLP HLDGS LTD

PRICE

MOVERS

2 22200

INDEX 22183.05 HIGH

22195.93

LOW

21768.11

52W (H) 23944.74 (L) 18056.4

21700

22-April

24-April

Hang Seng China Enterprise Index NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.56

3.188406

170442310

AIR CHINA LTD-H

6.23

1.797386

11060000

CHINA PETROLEU-H

8.36

1.210654

109433562

ALUMINUM CORP-H

2.89

2.120141

11564113

CHINA RAIL CN-H

7.56

4.854369

ANHUI CONCH-H

28.35

1.25

9830500

CHINA RAIL GR-H

3.87

BANK OF CHINA-H

3.51

2.034884

460978120

CHINA SHENHUA-H CHINA TELECOM-H

NAME CHINA PACIFIC-H

PRICE

DAY %

VOLUME

YANZHOU COAL-H

8.72

1.277584

22410486

ZIJIN MINING-H

2.27

1.339286

35626750

18671009

ZOOMLION HEAVY-H

8.26

1.349693

10789039

3.2

24181600

ZTE CORP-H

12.68

5.490849

9324426

25.85

1.571709

17427386

5.91

2.426343

28605853

3.87

2.110818

55808100

26.25

3.550296

4205780

DONGFENG MOTOR-H

11.94

4.006969

17688042

CHINA CITIC BK-H

4.13

2.992519

44928275

GUANGZHOU AUTO-H

6.43

2.063492

8309817

CHINA COAL ENE-H

6.32

1.607717

20521419

HUANENG POWER-H

8.8

6.024096

40423717

CHINA COM CONS-H

7.62

1.871658

17239822

IND & COMM BK-H

5.28

1.34357

342136499

CHINA CONST BA-H

6.27

2.117264

244665874

JIANGXI COPPER-H

15.1

1.478495

15735804

CHINA COSCO HO-H

3.38

1.197605

14446100

PETROCHINA CO-H

9.56

1.594049

61150199

20.45

1.741294

31206867

PICC PROPERTY &

9.52

1.600854

14930203

CHINA LONGYUAN-H

7.19

0.27894

15370000

PING AN INSURA-H

59.6

1.706485

9617064

CHINA MERCH BK-H

15.6

3.861518

17519833

SHANDONG WEIG-H

7.43

11.06129

28894000

CHINA MINSHENG-H

9.37

2.854007

60673136

SINOPHARM-H

23.95

2.569593

8748000

CHINA NATL BDG-H

9.81

1.447777

27702000

TSINGTAO BREW-H

52.65

-0.1895735

1304000

15.56

7.162534

12582197

WEICHAI POWER-H

BANK OF COMMUN-H BYD CO LTD-H

CHINA LIFE INS-H

CHINA OILFIELD-H

-0.1782531

NAME

MOVERS

0 10700

INDEX 10634.37 HIGH

10647.69

LOW

10379.69

52W (H) 12354.22 10350

(L) 8987.76 22-April

3461640

24-April

Shanghai Shenzhen CSI 300 NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.74

1.858736

114833392

AIR CHINA LTD-A

5.39

2.083333

10735209

NAME

PRICE

DAY %

VOLUME

6.45

2.707006

9435637

CITIC SECURITI-A

12.61

3.700658

108468878

CHONGQING WATE-A

NAME

PRICE

DAY %

QINGHAI SALT-A

24.87

1.097561

VOLUME 7516426

SAIC MOTOR-A

15.05

-0.3311258

36652391 25862099

4.09

0.7389163

12269592

CSR CORP LTD -A

4.03

1.002506

26286783

SANY HEAVY INDUS

10.14

1.197605

ANHUI CONCH-A

18.31

1.160221

25072676

DAQIN RAILWAY -A

7.18

1.988636

34118807

SHANDONG GOLD-MI

32.13

4503942

BANK OF BEIJIN-A

8.59

1.656805

18404405

DATANG INTL PO-A

4.38

1.154734

4368699

SHANG PHARM -A

12.36

2.14876

10549484 105005043

ALUMINUM CORP-A

2.9

1.045296

35225451

EVERBRIG SEC -A

13.95

3.717472

26918032

SHANG PUDONG-A

10.03

1.930894

4.65

1.30719

48330955

GD MIDEA HOLDI-A

13.78

-0.7919366

25402405

SHANGHAI ELECT-A

3.86

1.312336

2255185

10.43

1.65692

20570686

GD POWER DEVEL-A

2.79

1.086957

36160529

SHANXI LU'AN -A

16.42

1.483313

11138698

BAOSHAN IRON & S

4.79

0.8421053

19454521

GEMDALE CORP-A

7.11

1.716738

50374461

SHANXI XISHAN-A

10.71

1.420455

9758152

BEIJING TONGRE-A

23.08

2.259637

10341336

GF SECURITIES-A

13.4

3.156274

24907648

SHENZEN OVERSE-A

5.83

0.6908463

50416518

62.85

2.112104

896022

6.02

-0.660066

72630780

BANK OF CHINA-A BANK OF COMMUN-A BANK OF NINGBO-A

BYD CO LTD -A

24.38

4.815133

6940412

GREE ELECTRIC

CHINA AVIC AVI-A

23.22

1.797457

2935228

GUANGHUI ENERG-A

26.1

2.032838

26525155

SICHUAN KELUN-A

19.04

0.7407407

18503284

SUNING COMMERC-A

CHINA CITIC BK-A

4.33

2.122642

33092785

CHINA CNR CORP-A

4.07

1.496259

25473808

HAINAN AIRLINE-A

5.04

6.329114

51815179

TASLY PHARMAC-A

73.35

5.585145

2963826

HAITONG SECURI-A

10.61

3.613281

122062783

TSINGTAO BREW-A

38.19

1.111994

CHINA COAL ENE-A

6.88

1.325479

4933453

1812851

HANGZHOU HIKVI-A

39.2

0.8230453

12114386

WEICHAI POWER-A

23.33

1.214751

CHINA CONST BA-A

4.65

6456328

18385703

HENAN SHUAN-A

80.8

-1.953646

4381132

WULIANGYE YIBIN

22.16

-0.09017133

21298156

CHINA COSCO HO-A

3.47

CHINA EAST AIR-A

3.21

1.461988

10657408

HONG YUAN SEC-A

22.17

10.02481

67749270

YANGQUAN COAL -A

1.483216

6801388

2.555911

16512427

HUATAI SECURIT-A

9.89

2.806653

44420283

YANTAI WANHUA-A

19.42

1.781971

11832147

CHINA EVERBRIG-A

3.04

1.333333

109282454

HUAXIA BANK CO

10.38

2.366864

32544777

YANZHOU COAL-A

15.9

1.597444

2984753

4.1

0.7371007

40251291

YUNNAN BAIYAO-A

85.25

2.120268

1164025

ZHONGJIN GOLD

12.31

0.9844135

12742570

17.05

0.8279125

15624770

IND & COMM BK-A

CHINA MERCH BK-A

12.3

1.317957

50028546

INDUSTRIAL BAN-A

18.6

2.08562

135222796

CHINA MERCHANT-A

12.25

3.550296

39163862

INNER MONG BAO-A

27.84

1.310044

17398692

ZIJIN MINING-A

3.13

0.9677419

39400312

CHINA MERCHANT-A

12895480

INNER MONG YIL-A

30.06

1.314459

10536241

ZOOMLION HEAVY-A

7.73

1.17801

31263599

CHINA MINSHENG-A

10.13

3.790984

181914084

INNER MONGOLIA-A

4.84

1.043841

27018112

ZTE CORP-A

11.83

6.865402

40938041

CHINA NATIONAL-A

9.71

4.072883

38511531

JIANGSU HENGRU-A

30.99

0.2912621

4327655 5063556

CHINA LIFE INS-A

CHINA OILFIELD-A

15.44

1.914191

4556949

JIANGSU YANGHE-A

62.74

0.7547776

CHINA PACIFIC-A

19.36

2.923977

17015179

JIANGXI COPPER-A

20.83

3.580308

8759134

CHINA PETROLEU-A

6.74

1.659125

28374411

JINDUICHENG -A

10.38

2.165354

7628216

CHINA RAILWAY-A

5.1

2.409639

15709499

KANGMEI PHARMA-A

17.27

1.887906

15008156

CHINA RAILWAY-A

2.81

1.444043

31253685

KWEICHOW MOUTA-A

174.87

1.781037

3040261

CHINA SHENHUA-A

20.8

0.7751938

9799712

LUZHOU LAOJIAO-A

24.97

-0.8339952

13845294

CHINA SHIPBUIL-A

4.42

0.913242

31194648

METALLURGICAL-A

2.04

0.990099

22902652

17159981

NINGBO PORT CO-A

2.47

12101031

8.51

0.472255

12959515

19.4

1.677149

73338046

CHINA SOUTHERN-A

3.59

2.279202

CHINA STATE -A

3.5

0.8645533

86702772

PETROCHINA CO-A

CHINA UNITED-A

3.64

3.409091

157492423

PING AN BANK-A

CHINA VANKE CO-A

11.3

0.177305

100774305

PING AN INSURA-A

40.38

1.152305

33627614

CHINA YANGTZE-A

7.04

0.7153076

12684081

POLY REAL ESTA-A

11.97

1.87234

49972741

11.33

5.88785

44150824

QINGDAO HAIER-A

13.13

1.782946

18537253

PRICE DAY %

Volume

NAME

PRICE DAY %

Volume

CHONGQING CHAN-A

MOVERS 271

9 2550

INDEX 2495.579 HIGH

2532.2

LOW

2449.47

52W (H) 2791.303 (L) 2102.135

2430

22-April

24-April

FTSE Taiwan 50 Index NAME ACER INC

24.1

1.473684

5791434

ADVANCED SEMICON

26.15

1.750973

27077405

ASIA CEMENT CORP

37.15

0.1347709

ASUSTEK COMPUTER

333.5 -0.2989537

AU OPTRONICS COR

13.45

CATCHER TECH

3.461538

PRICE DAY %

Volume

TAIWAN MOBILE CO

104 -0.4784689

1751095

TPK HOLDING CO L

590

1.37457

6080859

17538455

TSMC

106

35495750

2.493438

32487420

UNI-PRESIDENT

59.2

1.718213

8915808

1.386139

224187

UNITED MICROELEC

11.4

1.785714

30072007

FORMOSA PLASTIC

72.3

4.782609

12802793

FOXCONN TECHNOLO

79.2

1.149425

3305129

3239874

FUBON FINANCIAL

42.2

1.077844

2567262

HON HAI PRECISIO

78.1

166757352

HOTAI MOTOR CO

256

NAME

145

1.398601

9704753

278.5

3.91791

14826458

WISTRON CORP

29.35

1.733102

13602640

CATHAY FINANCIAL

38.75

0.5188067

16808255

HUA NAN FINANCIA

17.1

0.8849558

5334907

YUANTA FINANCIAL

14.95

2.749141

16335503

CHANG HWA BANK

0.591716

6479671

LARGAN PRECISION

706

1.436782

1673737

YULON MOTOR CO

51.2

1147988

CHENG SHIN RUBBE

100

1.010101

4739912

LITE-ON TECHNOLO

51.4

6105620

CHIMEI INNOLUX C

18.5

6.936416

182888787

365

6386628

CHINA DEVELOPMEN

8.44

0.9569378

63120399

MEGA FINANCIAL H

23.35

0.6465517

28506464

CHINA STEEL CORP

25.95

0.5813953

10730920

NAN YA PLASTICS

58.4

4.847397

16340386

CHINATRUST FINAN

17.85

0.5633803

34075385

PRESIDENT CHAIN

185

2.777778

1015487

93.8 -0.1064963

5741922

QUANTA COMPUTER

59.6

1.016949

11034192

CHUNGHWA TELECOM

HTC CORP

MEDIATEK INC

COMPAL ELECTRON

18.85

1.617251

19957605

SILICONWARE PREC

34.45

1.923077

26640344

DELTA ELECT INC

135.5

0.3703704

2447190

SINOPAC FINANCIA

14.75

0.6825939

26157414

FAR EASTERN NEW

31.85 -0.1567398

5531805

SYNNEX TECH INTL

49.2

0.4081633

5912958

4666133

TAIWAN CEMENT

39.3

1.419355

4731532

FAR EASTONE TELE FIRST FINANCIAL

-0.140647

17.95

0.2793296

6839568

TAIWAN COOPERATI

16.8

5373565

FORMOSA CHEM & F

69.6

2.352941

5381164

TAIWAN FERTILIZE

70.6

0.8571429

1588453

FORMOSA PETROCHE

77.6

1.041667

1491062

TAIWAN GLASS IND

28.45

2.338129

1314298

MOVERS

5 5590

INDEX 5582.17 HIGH

5582.17

LOW

5501.45

52W (H) 5639.93 (L) 4719.96

5500

22-April

24-April

April 25, 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange)

Max 32.9

average 32.512

Max 40.65

average 40.441

Min 32.15

Last 32.9

Min 40.15

33.00

61.20

18.2

32.75

60.65

18.0

32.50

60.10

17.8

32.25

59.55

17.6

32.00

average 60.725

PRICE

average 17.891

Min 17.68

Last 17.72

18.95

22.15

40.4

18.90

22.00

40.2

18.85

21.85

Max 19

average 18.878

DAY %

YTD %

(H) 52W

Min 18.8

Last 19

(L) 52W

0.381251402

-4.24644347

105.6800003

81.34999847

BRENT CRUDE FUTR Jun13

100.6

0.289103778

-6.800074115

116.6699982

90.91999817

GASOLINE RBOB FUT May13

272.9

0.367782273

-5.701451279

330.369997

237.7199888

846.75

0.444839858

-7.154605263

992.75

799.25

4.231

-0.165172251

22.53113235

4.429000378

3.124000072

282

0.295195078

-6.739863748

327.1399975

258.5000038

GAS OIL FUT (ICE) Jun13 NATURAL GAS FUTR May13 HEATING OIL FUTR May13 Gold Spot $/Oz

1426.29

0.2953

-14.3091

1796.08

1322.06

Silver Spot $/Oz

23.078

0.6432

-23.3544

35.365

22.0713

Platinum Spot $/Oz

1428.8

0.4443

-5.8606

1742.8

1374.55

Palladium Spot $/Oz

681.3

0.9662

-2.6241

786.5

553.75

LME ALUMINUM 3MO ($)

1896

0.158478605

-8.538350217

2200.199951

1818

18.80

6762.25

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

LME COPPER 3MO ($)

6870

-0.937274694

-13.37788425

8496.75

LME ZINC

1879

-0.159404888

-9.663461538

2230

1745

15130

-1.111111111

-11.3130129

18920

15092

15.275

-0.293733681

-2.985074627

17.07500076

14.79500103

610.5

-0.570032573

-12.44173539

824

527

WHEAT FUTURE(CBT) Jul13

691.25

-0.611071172

-12.91338583

900

664.75

SOYBEAN FUTURE Jul13

1356.5

-0.1472212

-2.777280057

1605.75

1217.75

COFFEE 'C' FUTURE Jul13

138.25

0.508905852

-7.556001337

202.1999969

133.5500031

NAME

17.43000031

ARISTOCRAT LEISU

69.94999695

CROWN LTD

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul13 Jul13

SUGAR #11 (WORLD) Jul13

17.66

COTTON NO.2 FUTR Jul13

84.34

-0.056593096 -0.89306698

-10.53698075 9.717705217

23.05999947 94.19999695

World Stock Markets - Indices

Max 22.25

average 21.995

Min 21.75

Last 21.95

21.70

COUNTRY

PRICE

DAY %

(H) 52W

(L) 52W

DAY %

YTD %

(H) 52W

(L) 52W

1.0277 1.5268 0.9462 1.2991 99.55 7.997 7.7642 6.1781 54.385 28.89 1.2409 29.782 41.3 9718 102.294 1.22921 0.85083 8.0179 10.3891 129.32 1.03

0.2145 0.1903 -0.5707 0.0616 -0.9844 0.0088 0.0052 0.0146 -0.4389 -0.2423 -0.0403 0.131 0.1816 0.1338 -1.1809 -0.6337 0.1281 0.0524 -0.0578 -1.0439 0

-0.9732 -5.6133 -3.2551 -1.5087 -13.5108 -0.1726 -0.1752 0.8498 1.1216 5.8498 -1.5714 -2.5149 -0.7143 0.7718 -12.6762 -1.7678 -4.1618 2.4894 1.3601 -12.1791 -0.0097

1.0625 1.6381 0.9972 1.3711 99.95 8.0111 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 1.032

0.9582 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1699 51.3863 28.56 1.2152 28.913 40.54 9175 74.482 1.20051 0.77553 7.7018 9.6245 94.12 1.029

Macau Related Stocks PRICE

DAY %

YTD %

(H) 52W

(L) 52W

3.76

1.347709

19.36508

3.94

2.29

VOLUME CRNCY 932635

12.85

0.390625

20.43111

12.98

8.06

1402430

AMAX HOLDINGS LT

0.85

3.658537

-39.28571

1.9

0.75

466350

BOC HONG KONG HO

26.1

1.953125

8.298753

27.1

20.85

18292719

CENTURY LEGEND

0.32

6.666667

20.75472

0.42

0.215

396000

6.2

-0.3215434

3.505847

6.74

2.8

8285

CHINA OVERSEAS

23.2

1.310044

0.4328988

25.6

14.624

17587958

CHINESE ESTATES

13.66

1.940299

12.61876

13.8

7.697

1306000

CHOW TAI FOOK JE

10.34

1.972387

-16.88103

13.4

8.4

6433668

EMPEROR ENTERTAI

2.37

3.49345

25.39683

2.49

1.1

1042500

FUTURE BRIGHT

2.35

9.813084

92.62295

2.75

0.77

20731400

GALAXY ENTERTAIN

32.9

3.134796

8.401976

35.7

16.94

12212261 1931792

CHEUK NANG HLDGS

YTD %

PRICE

DOW JONES INDUS. AVG

14719.46

1.045433

12.32679

14887.51

12035.08984

NASDAQ COMPOSITE INDEX

3269.333

1.106491

8.273496

3306.95

2726.68

FTSE 100 INDEX

6421.62

0.2419561

8.881433

6533.99

5229.76

HANG SENG BK

127.4

2.411576

7.329405

131.5

99.2

DAX INDEX

7678.11

0.2598518

0.8633258

8074.47

5914.43

HOPEWELL HLDGS

29.75

-0.6677796

-10.52632

35.3

19.049

940400

HSBC HLDGS PLC

81.95

2.373517

0.7995042

88.45

59.8

12850917 8357387

NIKKEI 225

13843.46

2.319424

33.17192

13843.46

8238.96

HANG SENG INDEX

22183.05

1.726266

-2.091498

23944.74

18056.4

CSI 300 INDEX

2495.579

1.882366

-1.084951

2791.303

2102.135

TAIWAN TAIEX INDEX

8023.71

1.01904

4.210793

8089.21

KOSPI INDEX

1935.31

0.8693703

-3.09156

2042.48

S&P/ASX 200 INDEX

5102.43

1.718361

9.754459

5163.5

3985

4999.358

0.4829428

15.81469

5026.919

3635.283

FTSE Bursa Malaysia KLCI

1705.24

0.2852287

0.9645069

1716.47

1526.6

NZX ALL INDEX

967.934

0.4150703

9.736495

970.696

PHILIPPINES ALL SHARE IX

4351.17

-0.3118141

17.63162

4422.22

JAKARTA COMPOSITE INDEX

17.4

40.6

89.52

NAME

Max 18.02

22.30

WTI CRUDE FUTURE Jun13

CORN FUTURE

59.00

Currency Exchange Rates

NAME

METALS

Last 60.75

19.00

Commodities ENERGY

Min 59.5

40.8

40.0

Last 40.55

Max 61.05

3.8

1.333333

6.741575

4.05

2.98

LUK FOOK HLDGS I

HUTCHISON TELE H

21.95

4.275534

-10.04098

30.05

14.7

4112909

MELCO INTL DEVEL

14.76

3.797468

63.81798

15.08

5.12

12266150

6857.35

MGM CHINA HOLDIN

17.72

-0.3374578

33.45103

18.449

9.509

10149267

1758.99

MIDLAND HOLDINGS

3.57

4.385965

-3.513515

3.249

4322000

NEPTUNE GROUP

0.156

13.86861

2.631582

0.226

0.084

29379500

NEW WORLD DEV

13.68

2.39521

13.81031

15.12

7.95

17241311

SANDS CHINA LTD

40.55

1.756587

19.44035

41.05

20.65

5279705

SHUN HO RESOURCE

1.49

6.428573

1.67

1.03

755.149

SHUN TAK HOLDING

4.1

2.756892

-2.147973

4.65

2.56

5120290

3238.77

SJM HOLDINGS LTD

8645100

1.822079

5.555556

22.15

12.34

SMARTONE TELECOM

13.06

-7.244318

17.38

12.5

681566

WYNN MACAU LTD

21.95

2.810304

4.773266

25.5

14.62

24732406

HSBC Dragon 300 Index Singapor

637.35

-0.76

2.62

STOCK EXCH OF THAI INDEX

1553.43

0.2633362

11.60259

1601.34

1099.15

HO CHI MINH STOCK INDEX

472.89

-0.1688868

14.29918

518.46

372.39

ASIA ENTERTAINME

4.59

0.2183406

2.4

135438

BALLY TECHNOLOGI

48.89

0.6588429

9.349141

52.7

41.74

495122

Laos Composite Index

1330.68

0.07671134

9.541727

1455.82

980.83

BOC HONG KONG HO

3.28

1.863354

6.840393

3.59

2.7

9120

GALAXY ENTERTAIN

4.18

0.7228916

5.289672

4.93

2.25

19700 4468189

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

INTL GAME TECH

16.72

3.0191

17.99577

17.49

10.92

JONES LANG LASAL

94.52

1.285898

12.60424

100.91

61.39

184604

LAS VEGAS SANDS

53.84

0.8050927

16.63778

56.83

32.6127

3458471

MELCO CROWN-ADR

23.32

1.171367

38.47981

23.69

9.13

2875046

MGM CHINA HOLDIN

2.1

13.51351

2.44

1.36

10000

MGM RESORTS INTE

12.75

3.406326

9.536079

13.89

8.83

7988088

SHFL ENTERTAINME

15.34

2.33489

5.793103

18.37

11.75

722892

SJM HOLDINGS LTD

2.46

0.4081633

6.493509

2.85

1.65

500

129.37

0.7554517

15.00578

129.91

84.4902

1434795

WYNN RESORTS LTD

AUD HKD

USD

April 25, 2013

Opinion

The Sino-American test in North Korea Javier Solana

Former EU High Representative for Foreign and Security Policy, Secretary-General of NATO, and Foreign Minister of Spain

epeated threats from North Korea have turned the Korean Peninsula into one of the world’s most dangerous hotspots. But the situation also offers an important opportunity: a gain in strategic trust between China and the United States, the two countries with the capacity to resolve the tensions once and for all. If they manage to cooperate constructively in order to shape a peace acceptable to all sides, this would make not only Korea, but also the region and the world, a safer place. Ten years after opting out of the Nuclear Non-Proliferation Treaty, North Korea clearly possesses nuclear weapons. The regime’s nuclear test in February – its third since 2006 – was likely a miniaturised device, which makes the situation even more worrying, given that successful miniaturisation is critical for using nuclear weapons in ballistic missiles. February’s test provoked another round of United Nations sanctions, drafted by the U.S. and China, triggering an escalation of threats and provocations from the North.

The tension on the peninsula increased further with the annual joint military exercises conducted by the U.S. and South Korea – especially when American nuclear-capable B-52 and B-2 bombers were added to the drills. Nobody wants war on the Korean Peninsula. For the North, it would be suicide; for the South, with its vibrant economy and widening free-trade agreements, the opportunity cost would be particularly high. Likewise, regional stability is a prerequisite of China’s stellar economic growth, and military conflict would be a setback for U.S. economic rebirth as well. Indeed, with U.S. defence spending finally set to decline after a decade of debt-financed war in Iraq and Afghanistan, America has little fiscal room for an unforeseen military entanglement. The U.S. “pivot” to Asia is built on economic opportunities there; a conflict with unpredictable fallout does not fit the scheme.

Key player China is the key geostrategic player in resolving the conflict, because it provides North

Korea with 90 percent of its energy, 80 percent of its consumer goods, and 40 percent of its food. But it is unclear how much influence China’s government holds over Kim Jong-un’s regime. Sino-North Korean relations have borne a significant scar since 1991, when China recognised South Korea without insisting that the U.S. formally recognise the North. The North Koreans believe that China sacrificed them for commercial interests, and bilateral relations

It is essential that China and the U.S. work together to resolve the current crisis

have yet to recover. Nonetheless, China continues to regard North Korea as an important strategic asset, because it serves as a buffer state shielding China’s border from American troops on the peninsula – which has historically been used as an entry point by invading troops. China’s ideal solution would therefore be to maintain the status quo while persuading the North to open up – a path of gradual change that avoids open conflict or the regime’s collapse. Either of these traumatic outcomes would spell disaster, for both the region and the world. First, the regime’s implosion would unleash a massive refugee flow, implying enormous social and economic costs. Moreover, Asia remains a continent defined by balance-of-power diplomacy, border conflicts, and historic mistrust, with no multilateral security structures to soften regional tensions. Given these conditions, even a small spark could ignite a wildfire.

Strategic trust In this environment, mistrust of China’s rise as a

regional hegemon in much of East Asia only intensifies the need for active Chinese participation in promoting regional stability and peace – a peace framework with Asian roots, acceptable to all parties. Only through such efforts will China be able to increase its international legitimacy, thereby minimising the risk of future conflict. It is essential that China and the U.S. work together to resolve the current crisis. The U.S. must reiterate clearly that indefinitely prolonging the status quo on the Korean Peninsula would imply a strategic loss for China, and that China must join the international community in its efforts to halt North Korea’s nuclear programme. This cooperation is the only way to force the North’s hand and put an end to the incessant cycle of crisis and mounting risk. The current crisis offers a unique test case for joint handling of international affairs – or, in this case, regional affairs with global consequences – by the world’s two biggest powers. During U.S. Secretary of State John Kerry’s trip to China this month, the two countries pronounced their shared goals: denuclearisation of the Korean Peninsula and durable peace in the region. This is a good starting point. Sino-U.S. cooperation on this flashpoint could be a huge step forward in building muchneeded bilateral strategic trust. But the two countries’ markedly different foreignpolicy approaches will not facilitate matters. While the U.S. tends to segment problems in order to find solutions to each part within a finite period of time, China relies on broad, long-term perspective and views issues as extended, relative processes. That is why, in dealing with impoverished, isolated, nuclearized North Korea, where Sino-U.S. cooperation is the only option, the U.S. and China face both a challenge and an opportunity. To make the most of it requires a significant boost in mutual strategic trust. © 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.

Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com

April 25, 2013

Opinion Business

wires

Toward an immunised world

Leading reports from Asia’s best business newspapers

Jakarta Globe Indonesia business groups and economists called on the government to raise the price of subsidised fuel outright, in an effort to shrink the state budget’s ballooning subsidy bill. “If it [the fuel price] is going to be raised, then so be it. If it is not going to be raised, then let us know about it as well. Don’t politicise it too much and make market speculation way harder than it is supposed to be,” said Sofjan Wanandi, chairman of Indonesian Employers Association (Apindo). President Susilo Bambang Yudhoyono on Tuesday said he intended to cut the fuel subsidy next month.

Inquirer Business The Bangko Sentral ng Pilipinas has tightened its watch on the loan exposures of conglomerateowned banks to sister companies in the property sector on concerns that this could threaten the stability of the banking industry. BSP Deputy Governor Nestor Espenilla Jr. said the regulator was mindful of risks associated witharobustlygrowingeconomy, including a sudden rise in demand for properties and the corresponding growth in bank lending. “We are monitoring this matter closely,” the central bank official said, adding that concerns that the country’s banking sector was starting to become overly exposed to property developers were unfounded.

The Age SingaporeAirlinesLtdhasincreased itsstakeinVirginAustraliaHoldings Ltd to 19.9 percent to become the single largest shareholder. Singapore Airlines paid about US$122 million for 255 million sharesinanoff-marketagreement on Tuesday, according to an announcement to the securities exchange. Singapore Airlines purchased the shares directly from Richard Branson’s Virgin Group, based in Europe. “Our partnership with Virgin Australia has been going from strength to strength, offering a wide range of consumer benefits,” Singapore Airlines chief executive, Goh Choon Phong, said.

Bangkok Post CP All Plc, the operator of 7-Eleven convenience stores in Thailand, is extending its market dominance in the 2.2-trillion-baht (US$76.3 billion) retail market with the acquisition of Siam Makro Plc’s cash-and-carry chain for 188.88 billion baht. The acquisition will not only allow CP All sales to reach 300 billion baht but also add new customer groups. “We can open Makro in every country in Asean as well as China and other Asian countries except India. Laos and Vietnam are the top two priority markets for Makro stores,” the chief executive of CP All, Korsak Chairasmisak, said.

Ban Ki-moon Bill Gates

Secretary-General of the United Nations

Co-Chair of the Bill & Melinda Gates Foundation

or a child, receiving a vaccine takes just a moment (and perhaps a few tears). But such moments are crucial for getting children off to a healthy start in life, and for advancing progress on global health and development goals. Along with Mohamed bin Zayed bin Sultan Al Nahyan, Crown Prince of Abu Dhabi, we attach great importance to the world’s first global summit, being held this week in Abu Dhabi, aimed at ensuring that all children have access to the full benefits of vaccines. Vaccines protect people for a lifetime. They are one of the most cost-effective investments we can make to improve our world. Vaccines have eradicated smallpox, pushed polio to the verge of eradication, and saved millions of children from measles, diphtheria, tetanus, and other deadly and disabling diseases. Thanks in large part to the power of vaccines, the number of children dying before the age of five has fallen from 20 million in 1960 to 6.9 million in 2011, despite a large increase in global population. Disease saps the greatest asset that any country possesses: the energy and talent of its people. This is an especially harsh loss for poor countries seeking to gain a foothold in the global economy. But when children are healthy, families are freed from the burden of costly medical care, allowing them to spend more on food and education. Healthy children attend school more regularly, are better able to learn, and become more productive adults. New research shows that vaccines improve cognitive development in children, raise labour productivity, and contribute to a country’s overall economic growth.

Looming deadline Yet more than 22 million children lack access to the basic vaccines that people in high-income countries take for granted. These children live in the poorest and most remote communities, where the risk of disease is highest. A child born in a low-income country is 18 times more likely to die before reaching the age of five than a child in a highincome country. Ending this inequity is at the heart of history’s largest and most successful antipoverty push – the Millennium Development Goals. The eight MDGs were adopted in the year 2000, when leaders meeting at the United Nations agreed to cut extreme poverty and hunger by half, fight disease, improve water safety and sanitation, expand education, and empower girls and women. There have been

remarkable gains, but there is still much to do – and fewer than 1,000 days of action left until the 2015 deadline. Raising global immunisation coverage will speed progress toward the MDGs and generate momentum toward a successful post-2015 development agenda. The World Health Assembly, representing the World Health Organization’s 194 member countries, has endorsed a shared vision – known as the Decade of Vaccines – of a world free from vaccine-preventable diseases, with the full benefits of immunisation reaching all people, regardless of who they are or where they live.

Human potential Eradicating polio will be a milestone on our path to realising this vision. With a new, comprehensive plan to be introduced at the Summit, the world will have a clear roadmap for creating a poliofree world by 2018. The plan works hand in hand with our overall efforts to raise immunisation coverage against other diseases like measles, pneumonia, and rotavirus. Indeed, we are seeing how strong immunisation systems protect our gains against polio and provide a platform for reaching the world’s most vulnerable mothers and children with new vaccines and primary health care. If we are successful, by the end of the decade we will save more than 20 million lives, prevent nearly one billion cases of illness, and save almost US$12 billion in treatment costs

alone. And, in the process of freeing people from the burden of disease, we will unlock immeasurable human potential. The MDGs and the Decade of Vaccines prove that focused global development objectives can make a profound difference. They show the power of partnerships that bring together the United Nations, governments, development agencies, civil society, foundations, and the private sector. Over the next 1,000 days and beyond, our progress will be measured by what we have done to improve the lives of the poorest and most vulnerable members of the human family. Let us start by recommitting ourselves to realising the shared vision of a world in which all children get a fair start in life with the protection of vaccines. This generation will thank us – and so will many generations to come. © Project Syndicate

In the process of freeing people from the burden of disease, we will unlock immeasurable human potential

April 25, 2013

Closing HK lawmakers protest quake donation

Letta set to become Italy’s next PM

Hong Kong lawmakers yesterday protested against a plan to donate HK$100 million (US$13 million) to a Chinese earthquake disaster fund, claiming the money would go to corrupt officials. The 6.6-magnitude quake which hit Sichuan province Saturday has left at least 193 dead and more than 12,000 injured. “To donate money is not to help the victims, but it is to award corrupt officials,” prodemocracy lawmaker Raymond Chan told a legislative meeting yesterday, which failed to approve the donation after it ran out of time to vote. Macau donated 100 million patacas to support relief works in Sichuan.

Enrico Letta is set to become Italy’s new prime minister, after being asked by President Giorgio Napolitano to form a broad coalition government. The appointment of Mr Letta, currently deputy leader of the centre-left Democratic Party, could see the end of two months of parliamentary deadlock. An inconclusive general election in February has left the country in flux. In a statement, Mr Letta said as prime minister he would aim to change the course in Europe on austerity. “European policies are too focused on austerity which is no longer enough,” he said, following the closed-door meeting with the president in Rome.

Taiwan finds first bird ‘flu infection Virus also found in new mainland province

aiwan confirmed an H7N9 bird ‘flu infection in a Taiwanese traveller from China, demonstrating the risk of the killer virus entering cities outside the mainland. A 53-year-old man tested positive for the latest strain of avian ‘flu after a trip to the eastern city of Suzhou, returning to Taiwan via Shanghai, the island’s Centres for Disease Control said yesterday in a statement. The patient didn’t come into contact with birds and poultry, and is in critical condition at an unspecific medical facility, Minister of Health Chiu Wen-ta said at a briefing. The first discovery of the virus outside China may lead to increased scrutiny on travellers into and out of China, where the new strain was discovered in March. Taiwan’s largest trade partner is battling to

control the its spread, which so far has killed 22, according to reports released by the national and local governments, and the World Health Organization. “I think that with any new influenza virus that emerges, the concern is that it could genetically mutate to become easily transmissible between human beings,” Raina MacIntyre, a professor of infectious diseases at the University of New South Wales said in an interview before the announcement of Taiwan’s confirmed case. “ W i t h a l l p a s t pandemics and even with SARS, they were spread around the world by travel.” There’s no evidence that H7N9 is easily transmitted among people, the World Health Organization says, and the virus doesn’t appear to make birds sick, making it difficult to detect

in poultry flocks. The Severe Acute Respiratory Syndrome virus, which killed more than 770 worldwide, arrived in Taiwan from China in February 2003 before infecting 346 people locally.

Growing numbers China said the H7N9 bird ‘flu had spread to a new area as it confirmed the first case in the eastern province of Shandong late on Tuesday. Since China announced on March 31 that the virus had been discovered in humans for the first time, most cases have been confined to the commercial hub Shanghai and three nearby provinces, Jiangsu, Zhejiang and Anhui. Beijing and the central province of Henan have also reported cases.

The health ministry said a 36-year-old man living in Shandong’s Zaozhuang city was confirmed to have the virus, according to a statement on its website. That case and three other new ones bring the total number of confirmed infections to 108, according to official figures. “Given how infectious diseases are, and how diseases move around the world now, I don’t think it’ll be so surprising if we find a case somewhere else,” Keiji Fukuda, assistant director general of the WHO said in Beijing before yesterday’s announcement in Taipei. Bloomberg News/AFP

New cases may lead to increased scrutiny

Apple reports rare fall in profits CEO seeks to blunt growth concerns by returning cash

pple Inc. chief executive Tim Cook is seeking to reassure investors dismayed by the company’s falling stock price and first profit drop in a decade by unveiling the largest buyback plan in corporate history. The iPhone maker on Tuesday boosted its quarterly dividend and allotted more cash to buybacks, adding US$55 billion to its plan to return cash to shareholders – bringing the total to US$100 billion through 2015. Mr Cook made the announcements as Apple reported an 18 percent decline in earnings and acknowledged that growth will continue to slow. Although Apple continues to

remain a dominant player in the tablet computer and smartphone markets, investors have been worried that its market share is being eroded. Apple has come under pressure to release a new hit product that can live up to the success of the iPhone and iPad, sending the shares down more than 40 percent since September and wiping out about US$280 billion in market value. To allay the concerns, Mr Cook also took the unusual step of using a conference call with analysts to say that new products are in the works for later this year and through 2014, without giving details. “There are a lot of unanswered questions, and that will persist for

a while,” said David Walker, a technology analyst at Boston-based Trillium Asset Management LLC. “This report didn’t give one reason to think this is the floor.” The results underscore speculation that Apple’s era of rapid growth, fuelled by the 2007 debut of the iPhone, may be over. Instead, the company is taking on more of the characteristics of a value stock, with steadier earnings and a recurring dividend, said Abhey Lamba, an analyst at Mizuho Securities USA Inc. based in New York. “This plan will make value investors more aggressive,” he said. Apple reported lower fiscal second-quarter net income amid

shrinking profit margins and accelerating competition from Samsung Electronics Co. Earnings fell to US$9.55 billion, Apple said. The company sold 37.4 million units of the iPhone, compared with 35.1 million a year earlier, when iPhone revenue surged 85 percent. Apple sold 19.5 million iPads, up from 11.8 million. It also sold 4 million Mac computers. Mr Cook said on the conference call that while growth is slowing, it’s not the only metric Apple uses to judge success. “We do want to grow faster,” he said. “But we don’t view it as the only measure of our health.” Reuters