Macau Business Daily, April 8, 2013 by Business Daily

Labour flexibility a must for Macau employers

Year II Number 256 MOP 6.00 Monday April 8, 2013 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: Vitor Quintã www.macaubusinessdaily.com

With the government readying a labour law revision, employers are eager to get more flexibility in dealing with overtime compensation, mandatory holidays, annual leave and imported labour, says Vong Kok Seng. In an interview with Business Daily, the vice-president of the Macau Chamber of Commerce says he sees no need for a trade union bill.

Pages 6 & 7

Bird flu outbreak still ‘no threat’ for Macau

he number of cases of a deadly bird ‘flu strain better known as H7N9 in mainland China continues to rise but the outbreak poses no imminent danger to the city’s public health, the government says. Thermal infrared detectors were installed at the Macau International

Airport on Saturday to check the body temperature of visitors. Chief Executive Fernando Chui Sai On said the city had enough experience in dealing with infectious diseases and pledged “high transparency” in releasing information. Andy Wu Keng Kuong, president of the Macau Travel Industry Council, says the

impact on tourism “is not big” but it could grow if the situation worsens. News about the bird ‘flu sent the Hong Kong shares tumbling to the lowest level since November 28 last Friday with the Hang Seng Index dropping by 2.7 percent. Chinese airlines were the hardest hit. More on page 3

I SSN 2226-8294

Grand Prix jubilee good for tourism

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The organising committee will spend a whooping 230 million patacas (US$28.8 million) on this year’s Diamond Jubilee Grand Prix, up by 43.8 percent from last year’s edition, including on a revamp of the race control tower. But top organiser João Manuel Costa Antunes says the city will earn six times the investment on the double racing weekend in direct revenue, tourism spending and promotion. A new University of Macau study - still to be released - shows that the event now marking its 60th edition has helped turn the city into a tourism destination, the former head of the Macau Government Tourist Office said. Page 4

2013-04-08

2013-04-09

2013-04-10

17˚ 21˚

19˚ 22˚

17˚ 20˚

HANG SENG INDEX 22250

22140

22030

21920

21810

21700

April 5

HSI - MOVERS Name

Mass market fuels MGM profit growth

Assembly cries foul over poorly paid civil servants Page 2

Page 2

Sands sole player in casino licence, Adelson says Page 5

%Day

CHINA RES ENTERP

0.85

TINGYI HLDG CO

-0.74

CHINA MOBILE

-0.85

CHINA RES POWER

-1.28

SWIRE PACIFIC-A

-1.37

AIA GROUP LTD

-4.22

SINO LAND CO

-4.35

SANDS CHINA LTD

-4.94

CHINA MERCHANT

-4.99

WHARF HLDG

-5.05

Source: Bloomberg

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business daily April 8, 2013

macau ‘Macao Ideas’ reaches Taipei ‘Macao Ideas - Taipei’, a display centre to promote local brands and products made in Macau, opened in the capital of Taiwan last week, the Macao Trade and Investment Promotion Institute (IPM) announced. The display area with almost 16 square metres will showcase coffee and food products, fashion and accessories, arts and crafts, as well as QR Code cards for more than 100 individual exhibitors. The centre is part of the Macau Economic, Trade and Cultural Office, the first official Macau government representation in Taiwan, located in the Taipei 101 building.

MGM China profits up 38pct in 2012 VIP gambling turnover flat, but strong mass market helps to improve margins Michael Grimes

michael.grimes@macaubusinessdaily.com

GM China Holdings Ltd made HK$4.53 billion (US$583.3 million) in profit attributable to shareholders in 2012 – a year-on-year increase of 38.2 percent – said the firm in a Hong Kong filing. It allocated HK$3.10 billion for dividend payments to shareholders during the year ended December 31. That accounted for 87 percent of the net cash used in financing activities during the period. MGM China operates the MGM Macau casino resort. In late February the company had a ground breaking ceremony for its new US$2.6 billion MGM Cotai resort, due to open in mid-2016. From its existing single property, MGM China generated HK$21.77 billion in operating revenue during the 12 months, an increase of 7.3 percent from a year earlier. Its adjusted EBITDA (earnings before interest, taxation, depreciation and amortisation) was up 7.7 percent year-on-year, to HK$5.31 billion. VIP gambling turnover for the company during the year was virtually flat, showing only a 0.1 percent rise from 2011. But the firm added: “The expansion of the VIP gaming areas on Level Two at MGM Macau has resulted in a meaningful VIP business growth since its launch in October 2012.” MGM China said that “in spite of increased competition,” revenue from higher margin mass table games increased 24.4 percent year-on-year to HK$5.69 billion. Referring to mass-market table

games, the company stated: “The growth is in part attributable to the overall market growth, but more importantly due to our successful customer segmentation approach with a product and service focus on the mid- to premium- main floor business.” The casino firm added that slot revenue was up 32.1 percent from a year earlier, to HK$2.09 billion. Grant Bowie, chief executive of MGM China, told analysts in February – during parent company MGM Resorts International’s fourth quarter earnings call – that main floor

table games and slot business now accounted for “approximately 60 percent” of MGM Macau’s EBITDA, up from 50 percent in 2011.

Cotai enhancement Commenting on the pending addition of MGM Cotai to the Macau operation, Pansy Ho Chiu King, the company’s chairperson [sic] said in a preface to the 2012 annual report: “We are very excited about our Cotai project and look forward to delivering a facility that will enhance our competitive position and deliver

growth opportunities for all of our stakeholders.” The annual report confirmed Ms Ho has an effective 27 percent holding in MGM China. MGM Resorts, based in Las Vegas Nevada, has a controlling 51 percent interest. Referring to future expansion via MGM Cotai, Ms Ho said: “The hard work of our 5,670 team members has taken us to this point and it will be with their efforts and the 8,000 individuals we will add to the team over the next three years who will share in our commitment to growing our business.”

MGM Macau

Calls for bigger wage rise for poorly paid civil servants Legislators want more data on why hike is lower than for private sector Stephanie Lai

sw.lai@macaubusinessdaily.com

ower-pay civil servants should get a higher wage increase than the 6.06 percent hike proposed by the government, legislators proposed on Friday. The Legislative Assembly’s third standing committee began discussing a draft law calling for an increase to 70 patacas (US$8.75) on the standardised civil service pay index, up from 66 patacas currently. This means, for instance, that the

monthly earnings of a civil servant rated at 240 on the index will rise from 15,840 patacas to 16,800 patacas. Legislators have suggested that civil servants of “some certain grades” should be able to receive a higher hike in salary, committee chairman Cheang Chi Keong told media after the meeting. The proposal received an initial approval from the assembly earlier last week, but not without some criticism.

José Pereira Coutinho, legislator and president of the Macau Civil Servants’ Association, had called for bigger pay rises for poorly paid civil servants. The committee will ask the government for more data on why it chose such an increase and why it would not be backdated to the beginning of this year. According to data supplied by the Public Administration and Civil

Service Bureau the average salary hike in the private sector will be 9 percent this year, committee member Mr Coutinho said. “That figure stirred quite a response from the committee. But actually the definition of private sector is to be better explained in the next meeting,” he added. The wage hike will be voted again by the assembly at April-end, and gazetted on May 1, Mr Coutinho confirmed.

April 8, 2013 business daily | 3

MACAU

H7N9 still ‘low-risk’ to Macau: govt

editorial

A crying waste

Tourism industry pledged to work with government on preventive measures Tony Lai

tony.lai@macaubusinessdaily.com

Vítor Quintã

vitorquinta@macaubusinessdaily.com

Thermal infrared detectors were installed at the Macau airport

he outbreak of a deadly bird ‘flu strain better known as H7N9 in mainland China currently poses no imminent danger to the city’s public health, says the government. The tourism industry expects the impact of the ‘flu to be marginal and pledged to work closely with the administration in preventive measures. Lam Chong, coordinator for control and surveillance of communicable diseases at the Health Bureau, said they did not rule out the possibility that H7N9 cases would be found in Macau in the future. But he said yesterday in public broadcaster TDM’s debate programme Macau Forum that the bird ‘flu currently represents “low risk” to Macau, as there is no sign of human-to-human transmission. “The present situation is different from 10 years ago in which SARS [severe acute respiratory syndrome] could already spread through humans in the early stage and a lot of doctors and nurses became infected,” he said. He added his bureau remained on a level 3 alert over the H7N9 virus. The World Health Organization uses an alert scale of 1 to 6 with level 6 being the most serious – a pandemic outbreak across the globe.

KEY POINTS Govt ready to cope with infectious diseases Bird ‘flu represents ‘low risk’ – govt official Hong Kong shares tumble Flights from Macau to the mainland unaffected

Chief Executive Fernando Chui Sai On said the city had “accumulated certain experience in personnel training and equipment” in the past decade in coping with infectious diseases. He called for residents to mind their personal hygiene and promised “high transparency” in releasing information, according to a statement released by his cabinet yesterday. China confirmed two more cases of bird ‘flu in Shanghai yesterday, bringing the number of recorded cases to 20 since announcing a week ago that the virus had been found in humans for the first time. Six people have died.

Limited impact The government is yet to talk to the industry over any preventive measures due to the Ching Ming holidays, said Andy Wu Keng Kuong, president of the Macau Travel Industry Council. “I believe there will be more messages from the administration tomorrow [today] and we will cooperate with the government as we did in the SARS outbreak 10 years ago,” he told Business Daily. He estimates there are “dozens of tour groups from East China visiting Macau each week”. “We cannot ban travellers from a particular region but we will communicate with the travel agencies to carry out more promotion on personal hygiene,” said Mr Wu, adding they would sterilise tourism buses every day. Casino sources told Business Daily the government is yet to call on the operators for special measures over the H7N9 outbreak. Some have considered putting mats at the entrances to their properties. “The present impact of the ‘flu on the tourism market is not big but it is difficult to say in the near future if the situation worsens,” Mr Wu said. “There would surely be an impact on tourism if there is a disease outbreak, regardless of the scale.”

The bird ‘flu sent the Hong Kong shares tumbling to the lowest level since November 28 last Friday with the Hang Seng Index dropping by 2.7 percent.

Airport screens Chinese airlines were the hardest hit with Air China Ltd slumping by 9.8 percent, its worst single-day loss in nearly four years. Local flag carrier Air Macau Co Ltd – whose major shareholder is Air China – and low-cost Air Asia Co Ltd said there were no flights between Macau and the mainland cancelled or customers asking for ticket refund, the Chinese-language newspaper Macao Daily News reported. The Macau government installed thermal infrared detectors at the Macau International Airport on Saturday to check the body temperature of visitors. Lei Chin Ion, Health Bureau director, told media on Saturday that this measure could extend to other border crossings, depending on the development of the disease. The airport served as the main gateway for eastern Chinese, the official added. He expressed confidence that Macau was “capable” of coping with the bird ‘flu, with influenza medicine reserves for over 197,000 people. Agencies reported that three mainland cities – Shanghai, Hangzhou and Nanjing – had suspended live poultry trade and culled birds. The Civic and Municipal Affairs Bureau says Macau imported no live birds from the infected areas. Most poultry come from Zhongshan and Zhuhai in nearby Guangdong province. Ung Sau Hong, head of the bureau’s Department of Food and Animal Inspection and Control, said during the Macau Forum debate that they would remain in close contact with the mainland on poultry inspection. With M.G./S.L. and news agencies

he government has at last confirmed media reports of hazardous electronic waste being sent all the way from Canada to Macau, but only after an awkward, week-long silence. Canadian officials detected the illegal export of hazardous waste and the case has reached the courts in the province of British Columbia. Had it not been for the media, the Macau government would have gladly kept its silence about the 15 shipments made between August and December 2011. The director of the Basel Action Network, Jim Puckett, told Canadian media that exports of hazardous electronic waste to Macau may have been happening since 2001. When he took office in 2009, Chief Executive Fernando Chui Sai On promised more transparency. This kind of concealment was not what we had in mind. News of these shipments should have been made available as soon as the authorities knew about it. People have the right to know when it comes to public health issues. Openness, instead of running for cover when the case was unearthed, would have allowed the government to present a proactive image. “Since 2011 we have not received any further notice that electronic waste was imported to Macau,” the Environmental Protection Bureau said. Sadly, this statement is too little, too late. It does nothing to restore the public’s confidence, especially because it makes no mention of the final destination of the waste. It may have made its way into the mainland, adding a dark, ironic undertone to Macau’s attempts to become a platform for trade. Across the border, impoverished workers will risk their health to separate electronic components, while being exposed to insidious poisons. It is always easy to shrug off other people’s misery, even when it is only 400 kilometres away. Guiyu, in Guangdong, is the not-so-proud owner of the biggest electronic waste site on Earth. Lead has poisoned its children’s blood, as well as its fields and water, turning what was once a rice farming village into the preview of an apocalyptic future. This case should certainly lead to reconsideration of the policy of charging no fees for disposal of solid waste in Macau, whether the waste is domestic or from construction. Some companies try to take advantage of this by sending waste here, the Environmental Protection Bureau conceded two years ago. At the time it was found that every single day 10 tonnes of sheep hides was being dumped in the incinerator here or used as landfill on construction sites. Nothing has changed.

Openness, instead of running for cover when the case was unearthed, would have allowed the government to present a proactive image

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business daily April 8, 2013

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HOSPITALITY Wanted: guests The latest tourist statistics show the average length of stay remains unchanged at about one day, give or take a few hours. Day-trippers are staying for just 0.2 day. Most of the variations in the average length of stay are due to changes in the number of days that overnight visitors stay, which is stabilising at 1.8. That has been the statistic in 13 of the past 18 months. At the start of this analysis, the typical tourist stayed between 2 and 2.2 days. The data now suggests shorter average stays are the norm. However, data for average overnight stays recorded by origin have been available only since January 2011, and that shortcoming means an absolute conclusion cannot be drawn.

As it is often the case with tourism statistics, average figures are determined mainly by the arrivals form the mainland. Among tourist arrivals from the top three source markets, mainlanders tend to stay for two or more days, increasing the average length of stay. Overnight visitors from Taiwan tend to stay longer than the average but their stays are highly variable in length. Overnight visitors from Hong Kong stay for less time, between 1.3 days and 1.4 days. Last year there was a noticeable peak in the average length of overnight stay in April, possibly because Easter and the Ching Ming holidays permitted tourists to take a longer break than usual. Expect to see the same jump this year, as Easter and Ching Ming were again only a few days apart.

Macau banks better return on grand prix investment Race organisers will invest 230 million patacas in the 60th Macau Grand Prix with more money for rebuilding infrastructure Stephanie Lai

sw.lai@macaubusinessdaily.com

acau is reaping greater returns on the government’s investment in the Macau Grand Prix, according to the head of the event’s organising committee, João Manuel Costa Antunes. “For every single pataca of investment we put into the race last year, we get four patacas back in terms of the direct revenue generated from our ticket sales, sponsorship and the spectators’ expenditures in Macau,” Mr Antunes told a press conference on Friday to announce this year’s grand prix programme. The organisers said the event had been worth 39 million patacas (US$4.9 million) in direct spending last year, 11 percent more than in 2011. The grand prix cost 160 million patacas to hold last year, although much of that money came from sponsorship. “If we are to count in the more intangible returns from the media broadcast and promotion over the Grand Prix, the return ratio will stand at one to six,” Mr Antunes said. This figure came from University of Macau research into the spectator satisfaction at the grand prix and the event’s value to the city. The final version of the report should be ready in two months,

although no date has been set for its release. A study commissioned by the government in 2003 found that the grand prix generated returns from television coverage and visitor spending five times greater than the investment in the event. Mr Antunes said the race was important as it had enhanced Macau’s international image. “The Macau Grand Prix has helped make Macau a world tourism and leisure centre. And sports tourism is one key priority in Macau,” he said.

Diamond celebration The 60th edition of the grand prix takes place this year. The event will have 13 races, held between November 9 and 10 and between November 14 and 17. About 230 million patacas will be invested in the event. Some will be spent on rebuilding the race control tower and some on putting on more races. Apart from the customary Formula One and FIA World Touring Car Championship races, this year’s programme includes Lamborghini Super Trofeo Asia Series, Lotus Greater China Race and Master Challenge events.

The ticket prices are unchanged from last year, ranging from 900 patacas for seats in the Lisboa stand to 350 patacas for seats in the reservoir stand. A crucial piece of grand prix infrastructure is the race control tower, between the Outer Harbour Ferry Terminal and peninsula reservoir in Avenida da Amizade, which is due for rebuilding and expansion, giving it more space for race staff, the sports media and sponsors. The organising committee plans to spend 70 million patacas on the race control tower this year. “It is impossible to demolish and rebuild the Race Control Tower within one year, so we have to break it into two phases,” said Mr Antunes. “The first phase is to remodel the tower and the second phase, starting next year, is to build an auxiliary wing to it,” he said. “For the second phase, we intend to start at the beginning of next year. The second phase will ensure good facilities for the press and the race technical support, and that we can have better pits and a larger space for organisers to bring their teams in.” Mr Antunes said the first phase would be completed before this year’s first race.

J.I.D.

1 day A tourist’s average length of stay

Work to rebuild the race control tower for the Macau Grand Prix will start this year (Photo: Jornal Tribuna de Macau)

news where it matters

April 8, 2013 business daily | 5

MACAU

‘Slum kid’ turned billionaire says casino licence won on merit LVS boss Adelson giving evidence in civil lawsuit about how he got Macau gaming permit Michael Grimes

michael.grimes@macaubusinessdaily.com

hen the Macau government in 2001 created a public tender process for gaming concessions, the ability of Hong Kong businessman Richard Suen personally to act as ‘fixer’ to get Las Vegas Sands Corp. (LVS) a licence was “completely cut off”, said company chairman Sheldon Adelson on Thursday United States time. The tender policy turned the situation into a “beauty contest,” said Mr Adelson. “He couldn’t give us anything that wasn’t available to us,” added the LVS founder. Mr Adelson was giving testimony in open court in a retrial of a 2008 civil case. Mr Suen alleges in his complaint to a Nevada state court that LVS breached a 2001 agreement to pay him and his associates US$5 million (40 million patacas) and two percent of the net income from the company’s Macau casinos if it were awarded a permit. The firm’s 70 percent-owned local unit Sands China Ltd made a profit of US$1.24 billion in 2012 said a filing to the Hong Kong Stock Exchange on March 21. “I would not have approved this,” Mr Adelson said on Friday under questioning from Mr Suen’s lawyer, John O’Malley, about a June 2001 fax former LVS president William Weidner sent to Mr Suen outlining the terms of an agreement. “I had nothing to do with it.” Mr Adelson said he was too ill in the fall of 2001, suffering from a nerve disease that left him in severe pain and unable to be involved in daily operations of his company. He said Mr Weidner, who is scheduled to testify next week, was filling in for him about half of the time during that period and made the offer to Mr Suen

without his authority. “If he could deliver a license without us having to compete for it, then of course I would have been happy to pay him,” Mr Adelson said of Mr Suen. But Mr Adelson in his evidence dismissed the idea Mr Suen was central to the creation of the highly successful Macau operation, which supplied 53 percent of LVS’s US$3.79 billion global adjusted property earnings before interest, taxation, depreciation and amortisation last year according to the Hong Kong filing. Mr Adelson told the hearing: “He [Mr Suen] couldn’t deliver and he wanted to keep his fingers in the pie”. “Once he couldn’t, he wanted to get his fee and offered other services,” such as public relations and arranging financing, added Mr Adelson. Mr Suen is seeking up to US$328 million in compensation for his claimed role in helping to get a Macau licence – or more precisely, a Macau gaming sub-concession spun from Galaxy Entertainment Group Ltd’s concession. LVS was originally to have been paired – at the suggestion of Macau government officials – with Galaxy, but later asked to be allowed to pursue its own independent operation. In a 2005 recorded deposition played in court on Thursday, Mr Adelson was heard to say that Mr Suen or his associates had set up meetings with senior officials in mainland China. They included China’s then vice premier Qian Qichen and Beijing mayor Liu Qi.

‘Slum kid’ But in live court testimony, Mr Adelson said he attended those meetings at the urgings of his brother

Success the hard way – Sheldon Adelson says got Macau licence through own efforts

Lenny Adelson, who had told him it would be good to show Chinese officials that he was interested in their interests. Mr Adelson said the meetings were organised by a Chinese committee to promote international trade rather than by Mr Suen and his associates, as he had earlier believed. The Chinese officials only cared about whether he would make an investment in China, Mr Adelson said on Thursday. The idea – raised by Mr Suen’s lawyers – that he had himself in effect acted as a fixer for China in its pursuit of the 2008 Summer Olympics in the face of political opposition in the U.S. was “ludicrous,” he said. “The idea that me, a kid from the

Zou Shiming victorious C on pro debut

hina’s Zou Shiming said he was eyeing up a world title after he won his debut professional fight on Saturday, defeating little-known Mexican Eleazar Valenzuela on a unanimous points decision here. The two-time Olympic gold medallist and three-time amateur world champion emerged from a tight contest over four rounds, all three judges giving him victory 40-36. Mr Zou reportedly pocketed US$300,000 (2.4 million patacas) for his eagerly anticipated professional debut, which was expected to draw 300 million television viewers in China. The “Fists of Gold” night at the 15,000-seater Cotai Arena at The Venetian Macao, which was two-thirds full, saw United States promoter Bob Arum bring the razzmatazz of U.S. boxing to China. “I think if it’s done right, this [China] will be the premier audience

slums, could help China, the largest country in the world, as if it had no lobbyists of its own, is ludicrous,” Mr Adelson said from the witness stand. Clark County District Court judge Rob Bare denied a request on Thursday by Mr Suen’s lawyers to declare a mistrial after Mr Adelson brought out brochures in court. He used them to demonstrate that he didn’t need Mr Suen to lobby for him with the Macau government about Las Vegas Sands’ ability to bring convention business in addition to gambling to Macau. “The government wanted our expertise to change Macau, and that’s what we did,” Mr Adelson said. “We changed Macau.” With V. Q. and Bloomberg News/Reuters

for the sport of boxing in the world,” Mr Arum, whose fighters include Manny Pacquiao, told reporters. The Philippines boxing hero wants his next fight – a rematch with Juan Manuel Marquez, who knocked Mr Pacquiao out in December – to be in Macau, according to Mr Arum, who says they are working on an autumn showdown here. The Saturday event also featured two-time WBO junior lightweight champion Roman Martinez successfully defending his title against undefeated contender Diego Magdaleno and WBA/WBO flyweight champion Brian Viloria losing his unified titles against Juan Francisco Estrada. “Fists of Gold was a spectacular success,” said Sands China Ltd president Edward Tracy. “It was a must-see night of superstar sports action not soon forgotten.” V. Q. with AFP

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business daily April 8, 2013

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Keeping track Macau recorded a trade deficit in excess of 11 billion patacas (US$1.38 billion) for the first two months of this year. Imports in January and February were 16.7 percent higher and exports 24.5 percent higher than they were at the same time last year. A recent upswing in exports would, if sustained, moderate increases in the deficit. But any trend should be interpreted with caution because most exports are re-exports rather than domestic exports, so do not reflect any fundamental uptick in industrial production. Industrial production has been declining for the past couple of years and it seems this decline will continue this year. Re-exports are also volatile.

Imports and exports are essentially unchanged, tracking the trends that have been established in recent years. In 2009, the annual value of exports stopped declining and has been relatively stable for three years at about 7 billion patacas. The subsequent increase is mainly the result of rising re-exports. Imports fell in 2009, in what was one of the most obvious signs of the global financial crisis. Since then they have been rising at annual rates of more than 10 percent. If exports and imports follow last year’s trends, the city will register a deficit in excess of 70 billion patacas this year, which is almost double the deficit in 2010. This is a rough estimate but it offers a glimpse of the future if the trends from the first months of this year continue. J.I.D. The content of this column is the work of Business Daily’s journalists.

MOP11.4 bln Increase in trade deficit in the first two months of 2013

Finding the balance in workers’ wants and needs It has been five years since the labour law was last amended and employers want another revision. The senior representative of employers on the Standing Committee for the Coordination of Social Affairs, Vong Kok Seng, says the law should provide more room for direct negotiations between management and workers. Mr Vong, who is a vice-president of the Macau Chamber of Commerce, told Business Daily that employers needed more flexible regulations on overtime, mandatory public holidays and annual leave. He said workers were adequately represented, making a law on trade unions unnecessary Luciana Leitão

leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

What’s your take on the government’s human resources policy? Currently, the policy adopted here by the government is mainly targeted at supplying the market with enough labour. This has been okay but there is room for improvement. In the past couple of years we have been noticing that small and medium enterprises are getting permission to hire more imported workers, so this helps them fight the scarcity of local manpower. Of course, we still expect further

flexibility in granting applications and further shortening of the time it takes to complete the procedure. SMEs have weaknesses, as they don’t have organised human resources departments as big enterprises do. They don’t have people to take care of human resources. Also, they may not be able to organise the paperwork or the requirements for applications in the same way as big enterprises do. This is their weakness and we have to pay attention to that.

Should there be greater flexibility to hire imported labour? As a whole, Macau is growing quite fast. Obviously the demand for manpower is still big. So it is natural that more and more imported workers will be needed. The local workforce cannot satisfy demand. The SMEs are the ones facing more problems from the shortage of manpower in times of fast economic growth because people prefer to work in bigger enterprises, like in the gaming industry and large hotels.

April 8, 2013 business daily | 7

MACAU Even if people work in the food and beverage industry, they would rather work in bigger restaurants. That is why we always request the government to, as much as they can, simplify the application process. The new amendments to the nonresident workers law prevent workers exempt from the six-month ban from taking another job in a different industry. How do you see these changes? Actually, this amendment was primarily meant to prevent problems where some imported workers would eventually be dismissed. Before the amendment, dismissed workers did not have to wait six months for a new job. They could get one right away. Then you were encouraging some imported workers to start problems in such a way that employers could not tolerate them and would dismiss them. Then they could change employer and even change to another industry. It is not a natural evolution and it is kind of manipulative. Eventually these situations could cause more workload for the government because there would be more job changes and more job applications, and this is not fair to anybody. You have said you want to see the labour law revised. What are you proposing? The labour law is not flexible enough, considering that Macau is mainly a service economy. We are a tourism city. We have service industries providing these services around the clock. So fixed working hours, overtime pay, holidays – weekly days off or annual leave, even the mandatory labour holidays – really pose obstacles to the development of service industries, causing a lot of arguments between employers and employees. For instance, if you have workers that are quite hardworking, responsible and loyal to the enterprise, eventually, at the end of the day, they may not have finished their tasks for the day and may want to stay on at their post. They may want to do that in good faith. They may not be thinking of overtime compensation. There wouldn’t be any problem before this law was enforced. The employer might appreciate it and reward it in some other way. But now, even if the worker doesn’t want overtime pay, the employer is obliged to pay right away. Do you consider that unfair to employers? It is not a matter of unfairness. It is a kind of law that tells employer and employees, “No, you have no need to be kind to me.” One very good solution we suggest for the labour law would be to allow the employer and employee to freely agree on employment conditions. Of course this is better done in writing, to have evidence of those conditions. If there is a mutual agreement, then this agreement must be respected. If there is no agreement, then the law applies. The agreements you have mentioned were in the first draft of the labour law but were not approved by the Legislative Assembly. Why do you think they would get the green light now? The first draft, I was actually much involved in the preliminary drafts in our committee, and in some controversial areas, we added clauses like that. The final draft that left our hands and went to the Legislative Assembly did not contain our suggestions.

First, we have to get agreement in the committee. If not, the government will make the decision before presenting the final draft to the Legislative Assembly. I hope these essential clauses will be there. For example, mandatory holidays: you have to compensate with one day off and two days’ pay, and the result is that so many food and beverage outlets just close up. We have to create enough flexibility, if they agree freely and voluntarily. This can be controlled. You cannot force them to accept conditions like that, because they can accuse you of taking advantage.

The voices of the workers are very well heard and they already have louder voices than employers

The UN Human Rights Council in Geneva recently made some recommendations involving Macau. For instance, it complained about pay differences between men and women. Do they exist? I don’t agree with that. In Macau, generally speaking, we have no wage difference between genders, not only now but as far back as I can remember, even in the days of manufacturing. When manufacturing was the major industry here, from the end of the 1960s until the 1990s, the workers were mainly paid per piece, according to their output, regardless of their sex. I was in manufacturing in those times, and I am a witness to that. The only difference is that there were some jobs that were better performed by women than men, and vice-versa. For example, in the fabric-cutting department, because this requires physical strength, more men were engaged. In the sewing section, there were far more women than men. But if there were men in the same sewing section, they were paid the same. Nowadays, in the service industry it is the same. Even in the construction industry it is the same. Yet there are still few women in positions of power in Macau. Why is that? You have to look to the historical situation. In the manufacturing era, women were engaged more in production. They worked for some time, they got married and then they left their jobs. The same happened in offices. Women may have had less inclination to carry on than men. When they got married and had children, they get less interested, traditionally, in continuing. Nowadays, I think the situation may be changing in such a way that there are more women deciding to have lifelong careers. Opportunities are equal. We had a chairwoman of the assembly, we have a secretary in the government and we have women as heads of many departments of the government. There’s another UN recommendation, concerning non-resident workers. They don’t have formal contracts and must pay excessive fees to recruiting agencies. What’s your take?

Imported workers in Macau enjoy the same working conditions as local workers. The only difference is that the employer has to pay a kind of employment fee for each imported worker it employs. But this is the responsibility of the employer and it has nothing to do with the employee. It doesn’t affect, at all, the income of the employee. For non-Chinese imported workers, the law doesn’t allow any agency to charge commission. This is very clear. So no imported workers should be exploited by recruitment agencies. But before they come, if there is any kind of recruitment fee, that is something the government cannot control. Are wages for resident and nonresident workers different? In other parts of the world this could be discussed, but in Macau people don’t even have to discuss it. Let’s be frank, job opportunities in Macau are so good that we have practically no unemployment. If there were any people fit enough to be a domestic helper, would they be interested in doing a job like that? They have vast opportunities in other job areas where they may think it is more comfortable and more respectable. In other job areas other than domestic help, the law requires equal pay. If you don’t pay equally, you can’t have imported workers work for you. This is the spirit of the law. When you renew your permission to hire non-resident workers, the government screens you carefully. That is why it takes

MIN

so long to assess applications. I can assure you that job opportunities are equal. There is equal pay for equal work. If you have a new worker coming in, and he or she is less experienced and less productive, then obviously he may receive less pay. In fact, I see many cases in which imported workers are even better paid because they are more efficient, they have better service manners, and this has an impact on local workers. If the position of the imported worker who is getting a better wage is the same as that of other, resident workers, the employer may find it difficult because he may have to raise the wage of the local workers only to reduce the difference. The trade union bill was rejected recently. Does Macau need such a law? In Macau, workers are sufficiently and adequately represented. They already have enough opportunities and conditions to voice their demands. You can see it in the past. And, even now, they are very well respected. The voices of the workers are very well heard and they already have louder voices than employers. You don’t really need such a law. What for? It is only to scare people, investors, and will eventually only create more conflicts. I don’t mean that this kind of law is useless in other places but when we look at Macau today, we have generally a harmonious situation. We are not going to create something that will upset our harmony. Legislators are doing a good job by not passing this bill.

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8 |

business daily April 8, 2013

GREATER CHINA Chinese tourists world’s top spenders The Chinese have become the single biggest source of global tourism income after spending US$102 billion while travelling abroad in 2012, data from the UN World Tourism Organisation show. The total is 40 percent higher than the year before, and puts them well above the next two highest-spending countries, Germany and the United States. The UN body says higher incomes, looser travel restrictions and a strengthening currency are behind the surge. Other emerging market countries saw their tourism numbers jump, too. “Emerging economies continue to lead growth in tourism demand,” said the organisation’s secretary general, Taleb Rifai.

Global economic recovery remains elusive, says Xi President ‘full of confidence’ in China’s future

hina’s President Xi Jinping said the global economy has entered a period of “profound readjustment” and recovery remains elusive. The international financial industry is fraught with risks and protectionism is on the rise, Mr Xi said in a speech at the Boao Forum for Asia in the southern Chinese province of Hainan yesterday. Countries are still facing difficulties in adjusting their economic structure and the global-governance mechanism needs improvement, he said. Policy makers around the world face growing risks of stagnant or slowing growth. Last week alone, the Bank of Japan said it will start unprecedented stimulus to counter 15 years of deflation, data showed U.S. employers added the fewest workers in nine months and European Central Bank President Mario Draghi said the institution is prepared to cut interest rates if the economy deteriorates further. “Achieving common development for all countries remains an uphill battle,” Mr Xi said. “Rather than undercutting each other’s efforts,

countries should complement each other and work for joint progress.” Speaking at the same forum yesterday, Christine Lagarde, managing director of the International Monetary Fund, said countries need to “reaccelerate” the process of cooperation that was evident at the beginning of the financial crisis. “There was a very strong sense of urgency and a massive desire to cooperate,” Ms Lagarde said. “But let’s be honest about it: That sense of urgency has clearly abated as the crisis has tempered and as recovery has been a bit more patchy.”

Full confidence The spillover effects of monetary and fiscal policies “have significantly accelerated and heightened,” she said, without naming any countries. “This means that all countries and regions need to act with an even greater sense of responsibility – responsibility not solely for the consequences of their policy for their own nation, for their own regions, but also for the rest of the world.”

Mr Xi said he is “full of confidence in China’s future” and that the nation will maintain “robust growth momentum”. Domestic demand, particularly consumption-driven demand, will continue to grow and outbound investment will increase “substantially,” he said. China’s economy expanded at an annual average 10.5 percent pace over the past decade and new Premier Li Keqiang said last month that the country needs to achieve growth of 7.5 percent a year to meet the country’s targets for 2020, which include doubling per capita income. Gross domestic product rose 7.8 percent last year, the least since 1999.

Everyone benefits “The more China grows, the more development opportunities it will create for the rest of Asia and the world,” Mr Xi said yesterday. Since the beginning of the century, China’s trade with its neighbours has grown from US$100 billion to more than US$1.3 trillion, and China has become the biggest trading partner

Chinese leader warns against regional chaos Says Asia faces ‘new challenges’ to stability

Pyongyang told South Korean companies in the jointly run Gaeseong industrial complex to leave by April 10

hinese President Xi Jinping said that Asia faced “new challenges” to its stability and that no country should be allowed to instigate regional chaos

after North Korea’s mounting threats to attack the U.S. and South Korea included warnings of preemptive nuclear strikes. “No one should be allowed to

throw a region and even the whole world into chaos for selfish gains,” Mr Xi said yesterday in a speech at the Boao Forum for Asia in Hainan. “While pursuing its own interests, a country should accommodate the legitimate interests of others.” China, North Korea’s biggest trading partner, has advocated talks to ease tensions escalated after Kim Jong Un’s regime detonated a nuclear device in February in defiance of tightened United Nations sanctions. UN envoy Susan Rice last week said the U.S. is pushing Mr Xi’s government to “do more” to rein in its ally. In an effort to reduce strains, the U.S. delayed a test of an intercontinental ballistic missile. “While President Xi didn’t refer to North Korea, it is fair” to interpret his comments as directed toward the Korean situation, said Fang Xiuyu, a professor of Korean studies at Fudan University. “Xi’s remarks are the most decisive comments so far from

Mr Xi delivered a speech at the Boao Forum for Asia

and export market and a major source of investment for many of these nations, Mr Xi said. Trade within Asia has increased to US$3 trillion from US$800 billion in

No one should be allowed to throw a region and even the whole world into chaos for selfish gains Xi Jinping, Chinese president

the Chinese side of the issue.” South Korea’s Kospi index fell more than 3 percent last week and the won dropped about 1.5 percent as North Korea said it was poised to conduct a “smaller, lighter and diversified nuclear strike”. Mr Kim’s regime maintains that joint South Korean-U.S. military drills that go on until the end of April

April 8, 2013 business daily | 9

GREATER CHINA China Mobile, Vodafone team up China Mobile Ltd and Vodafone Group PLC have created a consortium to bid for mobile licences in Myanmar. The licence, which is expected to be awarded in June, is to operate a nationwide network for 15 years. The country has taken steps to reform its economy, but mobile phones remain too expensive for most people. There is only 10 percent mobile penetration in Myanmar, which has a population of more than 60 million. The government has said it wants to boost coverage to 80 percent by 2016. “Myanmar will be an important new market for the global mobile industry,” Vodafone and China Mobile said in their statement.

Local govt debt may top 20 trl yuan

a yesterday

the last 10 years, and trade with other regions has grown to US$4.8 trillion USfrom $1.5 trillion, he said, according to the official Xinhua News Agency. “This shows that cooperation in

Asia is open and it goes hand in hand with Asia’s cooperation with other regions, and everyone has benefited from such cooperation,” he said.

are a rehearsal for a nuclear attack against it. The U.S. has decided to postpone a test of a Minuteman III intercontinental missile from Vandenberg Air Force Base in California to avoid exacerbating the situation, according to a Defence Department official who asked not to be named. Defence Secretary Chuck Hagel made the decision to re-schedule the test, which will probably be next month, the official said. China is “seriously concerned” about the rising tensions, and will safeguard the rights and safety of its citizens in North Korea, Foreign Ministry spokesman Hong Lei said in a statement on the ministry’s website. The Chinese embassy in Pyongyang is under normal operations, he added. His statement came after North Korea last week asked countries including Russia and the U.K. to consider evacuating their embassies from the capital, warning that they can’t be protected. North Korea told South Korean companies in the jointly run Gaeseong industrial complex to leave by April 10.

Kim Jang-soo. While China and the U.S. last month agreed on tougher UN Security Council sanctions against North Korea after its nuclear test, American officials have travelled to Beijing to seek commitment on implementation. “Clearly, with the border that they have, with the economic relationship that they have, they can do more,” Ms Rice said in an April 5 interview with MSNBC. The Obama administration is seeking “a de-escalation of these tensions,” she said, adding the U.S. wants to convey the message that it can defend itself and its allies without “getting too jumpy”. In his speech yesterday, Mr Xi also said that the right of countries to independently choose their social systems and development paths should be respected and that nonAsian countries should respect Asian diversity. Countries from outside Asia are welcome to play a constructive role in regional stability and development, he added. His admonition against regional disorder “is a tough warning to the Kim regime not to escalate tensions,” said Willy Lam, an adjunct professor of history at the Chinese University of Hong Kong. “I think this warning also has implications for the U.S. and South Korea to cool it a little bit and not to provoke the Kim regime.”

Missile threat South Korea yesterday said Mr Kim’s regime may fire a missile on or around that date. President Park Geun-hye is ready for any provocation, according to the statement from spokesman Kim Haeng, citing national security chief

Bloomberg News

ocal governments may have more than 20 trillion yuan (US$3.2 trillion) of debt, exceeding the official estimates, former Finance Minister Xiang Huaicheng (pictured) said at the Boao Forum. Mr Xiang’s estimate for provincial and city government borrowings is almost double the 10.7 trillion-yuan figure that the National Audit Office gave for such debt in a 2011 report. The combined debt of China’s central and local governments may currently be more than 30 trillion yuan, said Mr Xiang, who served as finance minister from 1998 to 2003. “It seems the central government’s debt level is quite transparent, while local government debt isn’t, and therefore it’s not easy to get a clear picture,” Mr Xiang said yesterday. He added that since he retired, he’s no longer “within the system” and that his comments on government debt are based on his own personal estimates. China has sought to curtail borrowing by local governments because of concerns that banks will be saddled with bad debts. The nation’s central bank estimated in 2011 that local governments, which are barred from directly taking bank loans or selling debt, had set up more than 10,000 financing arms to fund the construction of

Big banks ‘faking’ micro loans: researcher

hina’s big banks are not delivering on their promise to lend more to the smallest firms and are instead “faking” their micro loans, a researcher said on Saturday, suggesting a government drive to increase micro-lending is struggling. Ba Shusong, a researcher from the Development Research Centre, a think-tank that advises China’s cabinet, said the biggest Chinese banks are still setting tough collateral standards for small firms, who often cannot meet the demands. This leaves 60 percent of small Chinese firms without bank financing, Mr Ba said, citing a study that he led on funding conditions for small and micro-sized firms. China wants to increase financing for its small businesses and has ordered its state-controlled banks to step up lending to them to avoid a repeat of a 2011 cash crunch, which some analysts had worried could destabilise the banking system. “Everyone right now talks about financing for small and micro sized

roads, bridges and sewage plants. Former Premier Wen Jiabao said on March 5 in his annual work report to the National People’s Congress that China will strengthen management of provinces’ and municipalities’ debt. Loans to China’s local government finance vehicles, or LGFVs, currently total about 9.3 trillion yuan, an increase of 2 percent in two years, China Securities Journal reported on March 8, citing Banking Regulatory Commission Chairman Shang Fulin. The public doesn’t need to be alarmed by the level of government debt because as a ratio of China’s gross domestic product it is “not particularly high” and because the borrowings are mostly domestic, Mr Xiang said at the forum. There’s also no sign of lending going to “very, very bad” projects or work with “very, very low efficiency,” he added. Mr Xiang also applauded efforts by new Finance Minister Lou Jiwei in overseeing a study on local government debt levels, saying the review signals that China is taking the issue “very seriously”. Bloomberg News

firms,” Mr Ba said. “There is a portion of big banks who are faking their lending to small and micro-sized firms,” he told a forum in Boao in southern China, without further details. The study that surveyed 1,000 small and micro-sized Chinese firms across a dozen sectors showed only 40 percent of companies have loans from banks right now. And despite China’s central bank cutting interest rates twice by a total of 50 basis points last year to spur a domestic economy trapped in its worst downturn in 13 years, the study said 66 percent of firms have not seen their funding costs fall. Instead, 40 percent of firms said they pay interest rates of over 10 percent, while the rest have financing costs of between 6 percent and 10 percent. A third of companies said financing costs are their biggest cost “The lack of appropriate collateral is one of the basic sources of financial difficulty for small and micro businesses,” the study said. Banks often demand companies to stump up property as a collateral or a guarantee before they get a loan, it said, even though the survey showed 83 percent of businesses do not own their own factory space. The study recommended that banks expand their pool of acceptable collateral to include orders, warehouse warrants, equity and intellectual property. Reuters

10 |

business daily April 8, 2013

ASIA Nikkei hits highest level since 2008 Japanese shares jumped to near five-year highs and government bond prices rose sharply on Friday, with the long-end of the yield curve inverting, a day after the Bank of Japan announced extraordinary stimulus steps to revive the world’s third-largest economy. The main Nikkei 225 stock index climbed as much as 4.7 percent to 13,225.62, its highest since August 2008. After a day of heavy trading, the Nikkei closed up 1.58 percent, or 199.10 points, at 12,833.64. Credit ratings agency Moody’s Investors Service said the stimulus was likely to keep the Japanese government’s borrowing costs low over the next two years, but longer-term risks to the country’s fiscal stability remain. The benchmark Nikkei has surged some 48 percent since midNovember when Prime Minister Shinzo Abe unveiled in his election campaign expansionary fiscal and monetary policies to pull Japan out of deflation. During the same period, the 10-year yield has fallen 21.5 basis points.

Japan stimulus to help revive regional growth Asian policymakers optimistic over BOJ’s effort to reboot economy

sian policymakers braced for a flood of capital unleashed by the Bank of Japan’s huge monetary stimulus, but some conceded the impact on global money flows and currencies might prove to be a necessary side-effect to get the region’s No.2 economy growing. New BOJ Governor Haruhiko Kuroda on Thursday promised to inject about US$1.4 trillion into the Japanese economy in less than two years and committed the bank to open-ended asset buying, a dose of shock therapy officials hope will end two decades of stagnation. The stronger-than-expected measures, which appeared to catch other regional officials by surprise, spurred a sharp sell-off in the yen across the board and risked upsetting other Asian exporters who may lose competitiveness. A resurgence of the carry trade – borrowing cheap yen to invest in other

higher yielding assets – has also been a sore point around the region, but policymakers played down concerns about damaging and distorting impacts on asset prices and currencies. “We can’t say for sure whether this policy will lead to a yen carry trade and flooding in cheap foreign funds [on the local markets] because there are a lot of stages that such a policy has to go through before leading to actual carry trades,” senior official at the Bank of Korea said, adding that officials there had not been informed in advance of the BOJ’s plans. “Even if the BOJ succeeds in expanding the base money liquidity, you can’t say for sure the extra money will flow out of Japan in the form of short-term money.”

Common interest The Hong Kong Monetary Authority echoed South Korea’s wait-

and-see approach, while Singapore highlighted the importance of rebooting the dormant Japan economy. “It is in everyone’s interest that Japan is able to reflate its economy, it is a challenge and they are attempting a new approach. But it is in the interests of the rest of Asia that they succeed,” Tharman Shanmugaratnam, Singapore Deputy Prime Minister and Finance minister, said on the sidelines of an ASEAN meeting after Thursday’s announcement. “I think that capital flows are a corollary rather than an objective of their policies, likewise exchange rates are a corollary. The fundamental policy is one of domestic monetary policy rather than capital flows and exchange rates.” Currencies such as the Thai baht and the Australian and New Zealand dollars – traditional favourites of the other side of carry

India’s record deficit unsustainable: Subbarao Central bank chief says 1991 crisis rerun unlikely

Duvvuri Subbarao, governor of the Reserve Bank of India

ndia probably won’t suffer a repeat of its 1991 financing crisis even as it faces a record current-account deficit, central bank Governor Duvvuri Subbarao said. “We are unlikely to have a balanceof-payments crisis,” Mr Subbarao said in a speech in the southern Indian city of Bangalore yesterday. “India is a much more liberalised economy. We’ve integrated into the world. Our exchange rate is largely market-determined. Our financial markets are deeper.” The deficit swelled to US$32.6 billion in the quarter ended December 31, or 6.7 percent of gross domestic product, stoked by gold and oil imports and subdued exports. Mr Subbarao said the imbalance in the widest measure of trade isn’t “sustainable,” exceeds the desired level of 2.5 percent of GDP and is “worrying” as it comes amid slowing economic growth.

The current-account gap was probably “significantly” narrower in January to March as overseas sales recovered, Raghuram Rajan, the chief economic adviser in India’s Finance Ministry, said separately in Singapore yesterday. The shortfall has weighed on the rupee, which has depreciated about 6.8 percent against the dollar in the past year, the second biggest decline in a basket of 11 Asian currencies tracked by Bloomberg. The deficit has triggered memories of the 1990s crisis, when India airlifted gold to pledge as collateral for a loan from the International Monetary Fund after foreign reserves slid. The nation at the time devalued the rupee, tackled government monopolies, cut tax rates and let foreign companies take majority stakes in sectors including automobiles and pharmaceuticals to rescue the economy.

Mr Subbarao also said inflation remains stubborn and elevated. Consumer prices climbed almost 11 percent in February from a year earlier, the fastest in the Group of 20 major economies. Finance Minister Palaniappan Chidambaram said in a briefing in New Delhi on Friday that Asia’s No. 3 economy needs to contain inflation. Mr Chidambaram has pledged to narrow the nation’s fiscal deficit further to help restrain the climb in the cost of living. He has also spearheaded policy changes designed to attract capital inflows to narrow the current-account gap. India’s GDP rose 5 percent in the fiscal year ended March 2013, the weakest pace in a decade, hampered in part by a moderation in investment, its statistics agency estimates. Subbarao has cut interest rates 50 basis points to 7.5 percent so far in 2013 to support economic expansion. The next policy review is due May 3. Bloomberg News

US$32.6 billion India’s currentaccount deficit in the quarter ended Dec. 31

Tension weighs down on already faltering domestic economy

April 8, 2013 business daily | 11

ASIA trade – gained sharply. However, Bank of Thailand Deputy Governor Pongpen Ruengvirayudh, said capital flows into Thailand were still normal and the baht’s moves were in line with regional currencies. “Japan is not our competitor and Thai exports to Japan are mainly food and necessities,” Mr Pongpen said. “If Japan has more confidence, consumption will increase and that will benefit us … The injected money will be in their country first but some will come to us.”

Currencies end worst week since January

Flowing capital Tim Jagger, fund manager with Aviva Investors in Singapore, said the BOJ move was good for Asian rates and spread products. “We see a lot of people looking to chase local rates lower - Philippines, South Korea, Thailand could be some of these rate markets that will benefit,” Mr Jagger said. “QE is creating strong demand for risky products as the world increasingly has a yield problem – where will you get it from as you have liabilities which need to be paid for by borrowers.” Australia and New Zealand are particularly well-placed to benefit from yen carry trades as their triple A-rated government bonds pay some of the highest yields in the developed world. “Institutional investors in Japan will be forced to move away from JGBs

After a day of heavy trading, the Nikkei closed up 1.58 percent

into other fixed income products. Given the relatively small amount of non-JGB Japanese fixed income product, we can see significant flows into offshore fixed income with global credit also benefiting,” said Krishna Hegde, Barclays credit strategist. India, which relies on significant funding for much needed infrastructure

from Japan, welcomed the prospect of more capital flowing in. “In India, because of our current account deficit, we welcome capital flows because it helps to finance our current account deficit,” said an Indian policymaker who asked not to be identified. Reuters/Bloomberg News

Seoul warns of prolonged N. Korea impact on markets

Bank Indonesia studies rate hike

with the South while denying entry to the complex by South Korean workers last week. Pyongyang also warned it could not guarantee the safety of diplomats after Wednesday and has asked embassies to consider moving staff out of the country, European diplomats said, amid high tension on the Korean peninsula. The new threats, though not unusual from the reclusive state, have been issued following the imposition of new U.N. sanctions in response to North Korea’s third nuclear test in February. Up until now, reaction to them in markets has been muted. The increasingly tense standoff with North Korea, which has said a nuclear war could break out at any time, could not happen at a worse time for the government of new President Park Geun-hye, whose first steps in office included a sharp cut in growth forecasts. “The market usually doesn’t get jittery over North Korea threats. But this time is different, because they look willing to sacrifice Gaesong, which has never happened before,” said Park Hyung-joon, macroeconomics team leader at Meritz Securities.

ank Indonesia is studying a possible policy rate hike to deal with rising inflation, the governor said, in hawkish comments for a pro-growth central bank that has kept rates at a record low for more than a year. In March, the country’s annual inflation surged to a near two-year high of 5.9 percent, above the 5.5 percent top end of the central bank’s target range for the year. The increase, from February’s 5.31 percent, was due mainly to higher food prices. “Together with the government, we are studying the possibility,” said Governor Darmin Nasution, when asked about a rate hike. “BI will not be hasty to increase its benchmark rate. But if we have to do it, then what can we do?” he told reporters. Bank Indonesia (BI), which next meets to decide policy on Thursday, has previously said a rate hike is a policy of last resort, but the unexpected spike in inflation in recent months appears to be changing its thinking. March’s inflation rocketed after the government imposed certain food import restrictions. Destry Damayanti, economist at Bank Mandiri in Jakarta, said the comments showed the central bank was “upset” with inflation breaking out of its target range, especially as weak exports mean this not a good time to hike rates. BI has kept its policy rate at 5.75 percent since February 2012, as it seeks to maintain annual growth of more over 6 percent for Southeast Asia’s largest economy. Elsewhere, central banks from Japan to the United States are keeping policy loose.

Reuters

Finance ministry vows to take swift action if needed

outh Korea’s top finance officials warned that tensions with North Korea could have a prolonged impact on markets and vowed to ensure stability, as the standoff threatened to put an additional drag on Asia’s fourthlargest economy. At an emergency meeting to tackle the effects of the crisis, they promised to take swift and strong action should the markets lose stability. Reports of another meeting with the central bank chief attending boosted investors’ expectations of an interest rate cut next week. The Seoul stock market’s benchmark KOSPI fell 1.7 percent to a 2-month low while the won edged down 0.3 percent to a fresh 7-month low against the dollar as investors reduced holdings ahead of the weekend. “In the past, [markets] recovered quickly from the impact from any North Korea-related event, but recent threats from North Korea are stronger and the impact may therefore not disappear quickly,” Vice Finance Minister Choo Kyungho told the meeting. North Korea threatened to strike U.S. military bases, including those on the American mainland, and to shut down a joint industrial complex

Asian currencies fell the most this week since January as policymakers from the Philippines to Japan proposed measures that tend to weaken their exchange rates. The yen slumped to a June 2009 low on Friday, making its exports cheaper than those from South Korea and Taiwan. The Philippine central bank is considering steps to spur capital outflows, Governor Amando Tetangco said last week, while data signalled the U.S. economy is starting to cool. The Bloomberg-JPMorgan Asia Dollar Index declined 0.3 percent since March 29, the most since the week ending January 25. South Korea’s won slumped 1.8 percent to a seven-month low of 1,131.69 per dollar, according to data compiled by Bloomberg. The Philippine peso dropped 0.9 percent to 41.18 and India’s rupee depreciated 1 percent to 54.8125, the most in a month. “Japan’s surprisingly big size of stimulus sparked a strong bout of dollar buying,” said Jeon Seung Ji, currency analyst at Samsung Futures Inc.

12 |

business daily April 8, 2013

MARKETS Hang SENG INDEX PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

32.95

-4.215116

55993793

CHINA UNICOM HON

9.95

-2.832031

37620607

POWER ASSETS HOL

73.35

-1.609658

4343063

ALUMINUM CORP-H

2.79

-5.423729

27082167

CITIC PACIFIC

9.47

-3.857868

14978219

SANDS CHINA LTD

37.55

-4.936709

18904181

BANK OF CHINA-H

3.47

-2.52809

479247627

BANK OF COMMUN-H

5.69

-1.896552

34122714

30.05

-3.5313

2531599

12.1

-3.2

28849213

ESPRIT HLDGS

NAME AIA GROUP LTD

BANK EAST ASIA BELLE INTERNATIO BOC HONG KONG HO

NAME

CLP HLDGS LTD

66.95

-2.688953

5148738

SINO LAND CO

12.74

-4.354354

11503247

14.36

-3.882195

78299260

SUN HUNG KAI PRO

103.9

-1.609848

11521211

COSCO PAC LTD

10.68

-3.956835

13345855

SWIRE PACIFIC-A

-1.372649

3517159

9.37

-1.472135

10403918

TENCENT HOLDINGS

237.2

-2.306425

4984423

-3.814262

11421304

TINGYI HLDG CO

20.1

-0.7407407

7370844

123.5

-1.593625

1595163

WANT WANT CHINA

11.58

-2.525253

10625813

WHARF HLDG

66.75

-5.049787

10843122

25.4

-1.930502

17566775

HANG LUNG PROPER

12.28

-4.0625

16599871

HANG SENG BK

CHEUNG KONG

112.8

-1.570681

6076701

6.43

-3.886398

40825740

CHINA CONST BA-H

6.07

-3.650794

479999106

CHINA LIFE INS-H

19.36

-3.441397

53933940

CHINA MERCHANT

23.8

-4.99002

3803867

CHINA MOBILE

HENDERSON LAND D

53.05

-1.850139

6591101

HENGAN INTL

75.55

-1.883117

3649418

HONG KG CHINA GS

22.4

-2.608696

11277925

HONG KONG EXCHNG

127.8

-2.961276

7485681

HSBC HLDGS PLC

81.35

-1.928873

17638093

79.55

-2.987805

9390081

5.2

-2.621723

324691738

10.14

-3.977273

25169847

30.3

-3.04

3116821

-0.8464329

19673777

HUTCHISON WHAMPO

CHINA OVERSEAS

20.8

-3.703704

24813926

IND & COMM BK-H

CHINA PETROLEU-H

8.75

-3.528115

130209677

CHINA RES ENTERP

LI & FUNG LTD

23.8

0.8474576

5933782

MTR CORP

-4.109589

7289647

NEW WORLD DEV

12.82

-3.172205

16534839

CHINA RES POWER

23.2

-1.276596

5916500

PETROCHINA CO-H

9.85

-4.182879

104865897

CHINA SHENHUA-H

27.35

-2.841918

16930484

PING AN INSURA-H

57.9

-3.096234

14789282

PRICE

DAY %

VOLUME

25.15

-1.949318

13268600

CHINA RES LAND

VOLUME

CNOOC LTD

CATHAY PAC AIR CHINA COAL ENE-H

NAME

MOVERS

0 22530

INDEX 21726.9 HIGH

22527.12

LOW

21724.18

52W (H) 23944.74 (L) 18056.4

21720

2-April

5-April

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.51

-2.5

148804060

AIR CHINA LTD-H

6.05

-9.836066

44286000

CHINA PETROLEU-H

8.75

-3.528115

130209677

ALUMINUM CORP-H

2.79

-5.423729

27082167

CHINA RAIL CN-H

6.69

-3.741007

17279818

ZOOMLION HEAVY-H

ANHUI CONCH-H

25.9

-0.9560229

18527948

CHINA RAIL GR-H

3.6

-3.743316

31908402

ZTE CORP-H

BANK OF CHINA-H

3.47

-2.52809

479247627

CHINA SHENHUA-H

27.35

-2.841918

16930484

CHINA TELECOM-H

CHINA PACIFIC-H

5.69

-1.896552

34122714

3.82

-2.051282

42186129

21.65

-7.478632

5785450

DONGFENG MOTOR-H

10.86

-0.5494505

15199707

CHINA CITIC BK-H

4.13

-2.132701

63794281

GUANGZHOU AUTO-H

5.94

-3.414634

7824248

CHINA COAL ENE-H

6.43

-3.886398

40825740

HUANENG POWER-H

8.2

-2.380952

13611539

CHINA COM CONS-H

7.02

-3.172414

31368726

IND & COMM BK-H

5.2

-2.621723

324691738

CHINA CONST BA-H

6.07

-3.650794

479999106

JIANGXI COPPER-H

16.18

-2.647413

10760775

BANK OF COMMUN-H BYD CO LTD-H

3.41

-2.849003

17767875

PETROCHINA CO-H

9.85

-4.182879

104865897

19.36

-3.441397

53933940

PICC PROPERTY &

9.21

-3.862213

40579500

CHINA LONGYUAN-H

6.66

-4.172662

25630033

PING AN INSURA-H

57.9

-3.096234

14789282

CHINA MERCH BK-H

15.3

-3.164557

35073642

SHANDONG WEIG-H

7.05

-1.260504

8700000

CHINA COSCO HO-H CHINA LIFE INS-H

CHINA MINSHENG-H

9.1

-1.939655

58012224

SINOPHARM-H

24.7

-1.397206

9101592

CHINA NATL BDG-H

9.02

-5.052632

88186144

TSINGTAO BREW-H

47.35

-1.966874

1326898

15.44

-5.392157

7557598

WEICHAI POWER-H

24.7

-1.397206

2595625

CHINA OILFIELD-H

NAME

PRICE

DAY %

VOLUME

YANZHOU COAL-H

9.68

-5.098039

33502594

ZIJIN MINING-H

2.41

-3.984064

55006186

8.1

-1.579587

30950304

12.1

-1.944895

5570656

MOVERS

0 10980

INDEX 10429.31 HIGH

10973.38

LOW

10421.79

52W (H) 12354.22 (L) 8987.76

10410

2-April

5-April

Shanghai Shenzhen CSI 300 NAME AIA GROUP LTD ALUMINUM CORP-H

PRICE

DAY %

VOLUME

32.95

-4.215116

55993793

2.79

-5.423729

27082167

BANK OF CHINA-H

3.47

-2.52809

479247627

BANK OF COMMUN-H

5.69

-1.896552

34122714

NAME PETROCHINA CO-H PING AN INSURA-H

PRICE

DAY %

VOLUME

14.7

0.5471956

16194456

9.85

-4.182879

104865897

SANY HEAVY INDUS

10.23

0.2941176

18420786

14789282

SHANDONG DONG-A

49.6

-0.7007007

4586254

SHANDONG GOLD-MI

32.13

4503942

3.322785

36419665 88765772

57.9

-3.096234

SAIC MOTOR-A

POWER ASSETS HOL

73.35

-1.609658

4343063

SANDS CHINA LTD

37.55

-4.936709

18904181

SHANG PHARM -A

13.06

30.05

-3.5313

2531599

SINO LAND CO

12.74

-4.354354

11503247

SHANG PUDONG-A

10.06

0.2991027

BELLE INTERNATIO

12.1

-3.2

28849213

SUN HUNG KAI PRO

103.9

-1.609848

11521211

SHANGHAI ELECT-A

3.9

-0.2557545

2786662

BOC HONG KONG HO

25.4

-1.930502

17566775

SWIRE PACIFIC-A

-1.372649

3517159

SHANXI LU'AN -A

17.19

0.2917153

11223085

12.28

-4.0625

16599871

TENCENT HOLDINGS

BANK EAST ASIA

CATHAY PAC AIR CHEUNG KONG

237.2

-2.306425

4984423

SHANXI XISHAN-A

11.53

0.6108202

7962881

20.1

-0.7407407

7370844

SHENZEN OVERSE-A

5.87

-1.011804

29163533

WANT WANT CHINA

11.58

-2.525253

10625813

SICHUAN KELUN-A

61.12

0.01636393

858950

WHARF HLDG

66.75

-5.049787

10843122

SUNING COMMERC-A

6.19

-0.1612903

25218479

TINGYI HLDG CO

112.8

-1.570681

6076701

CHINA COAL ENE-H

6.43

-3.886398

40825740

CHINA CONST BA-H

6.07

-3.650794

479999106

19.36

-3.441397

53933940

GUANGHUI ENERG-A

20.01

-2.722411

29473178

TASLY PHARMAC-A

65.75

-1.836369

3638694

HAITONG SECURI-A

10.1

-1.463415

69175272

TSINGTAO BREW-A

36.53

-2.819899

1575155

37.15

-0.6684492

4188126

WEICHAI POWER-A

20.9

0.1917546

5519787

72.6

-5.714286

7334419

WULIANGYE YIBIN

21.95

-0.3178928

13639640

17.57

-1.458216

8669357

YANGQUAN COAL -A

13.58

-0.4398827

5506977

17.99

1.010668

10355505 5094150

CHINA LIFE INS-H CHINA MERCHANT

23.8

-4.99002

3803867

-0.8464329

19673777

HANGZHOU HIKVI-A

CHINA OVERSEAS

20.8

-3.703704

24813926

HENAN SHUAN-A

CHINA PETROLEU-H

8.75

-3.528115

130209677

HONG YUAN SEC-A

CHINA RES ENTERP

23.8

0.8474576

5933782

HUATAI SECURIT-A

9.61

-0.4145078

23949469

YANTAI WANHUA-A

-4.109589

7289647

HUAXIA BANK CO

10.4

0.8729389

23497537

YANZHOU COAL-A

16.85

-1.23095

4.09

0.7389163

49636363

YUNNAN BAIYAO-A

80.83

-1.426829

2017476

13.77

-1.077586

11145127 36541275

CHINA MOBILE

CHINA RES LAND CHINA RES POWER

23.2

-1.276596

5916500

IND & COMM BK-A

CHINA SHENHUA-H

27.35

-2.841918

16930484

INDUSTRIAL BAN-A

17.15

1.780415

99152211

ZHONGJIN GOLD

CHINA UNICOM HON

9.95

-2.832031

37620607

INNER MONG BAO-A

28.99

-0.4464286

13498865

ZIJIN MINING-A

3.4

-0.5847953

14978219

INNER MONG YIL-A

30.18

-0.5273566

11270966

ZOOMLION HEAVY-A

8.24

0.4878049

37953545

INNER MONGOLIA-A

5.19

-0.7648184

142233487

ZTE CORP-A

11.1

-1.245552

19203422

CITIC PACIFIC

9.47

-3.857868

CLP HLDGS LTD

66.95

-2.688953

5148738

CNOOC LTD

14.36

-3.882195

78299260

JIANGSU HENGRU-A

30.89

-1.655524

6730243

COSCO PAC LTD

10.68

-3.956835

13345855

JIANGSU YANGHE-A

61.05

-0.245098

2894117

9.37

-1.472135

10403918

JIANGXI COPPER-A

22.12

1.189387

8946948

-3.814262

11421304

JINDUICHENG -A

11.33

0.1768347

4857197

16.86

-0.9400705

18974156

163.85

0.08551707

2199050

ESPRIT HLDGS HANG LUNG PROPER HANG SENG BK

123.5

-1.593625

1595163

KANGMEI PHARMA-A

HENDERSON LAND D

53.05

-1.850139

6591101

KWEICHOW MOUTA-A

HENGAN INTL

75.55

-1.883117

3649418

LUZHOU LAOJIAO-A

25.88

1.490196

11226142

METALLURGICAL-A

2.04

-0.4878049

12303197 11116551

HONG KG CHINA GS HONG KONG EXCHNG

22.4

-2.608696

11277925

127.8

-2.961276

7485681

NINGBO PORT CO-A

2.46

-0.8064516

8.72

-0.1145475

MOVERS 107

171

22 2530

INDEX 2483.547

HSBC HLDGS PLC

81.35

-1.928873

17638093

PETROCHINA CO-A

9345109

HIGH

2520.92

HUTCHISON WHAMPO

79.55

-2.987805

9390081

PING AN BANK-A

20.45

0.04892368

22458964

LOW

2476.97

5.2

-2.621723

324691738

PING AN INSURA-A

40.76

0.5674809

20246771

10.14

-3.977273

25169847

POLY REAL ESTA-A

11.84

-1.251043

34024322

30.3

-3.04

3116821

QINGDAO HAIER-A

12.95

-0.7662835

5816462

12.82

-3.172205

16534839

QINGHAI SALT-A

29.31

0.9993108

10685941

PRICE DAY %

Volume

PRICE DAY %

Volume

71.1 -0.5594406

2755791

TAIWAN MOBILE CO

102

-1.923077

82 -0.6060606

4162208

TPK HOLDING CO L

609

1.162791

2938290

100.5

26347381

IND & COMM BK-H LI & FUNG LTD MTR CORP NEW WORLD DEV

52W (H) 2791.303 (L) 2102.135

2470

1-April

3-April

FTSE TAIWAN 50 INDEX NAME

NAME

ACER INC

25.85

0.5836576

4907457

FORMOSA PLASTIC

ADVANCED SEMICON

24.55

0.2040816

6154521

FOXCONN TECHNOLO

ASIA CEMENT CORP

36.5 -0.4092769

2169546

FUBON FINANCIAL

40.9

ASUSTEK COMPUTER

349.5 -0.1428571

AU OPTRONICS COR CATCHER TECH

13.2

NAME

PRICE DAY %

0.122399

21772481

TSMC UNI-PRESIDENT

1727415

HON HAI PRECISIO

83.1

16366062

0.7633588

34544443

HOTAI MOTOR CO

247

1.229508

231470

UNITED MICROELEC

Volume 3011385

8775565

11.3

0.4444444

31841897

144

2.491103

15452208

HTC CORP

246.5

1.440329

7821108

WISTRON CORP

33.15

0.1510574

6480167

CATHAY FINANCIAL

40.15

0.879397

20209792

HUA NAN FINANCIA

17.3

0.5813953

4777116

YUANTA FINANCIAL

15.05

1.346801

12330618

CHANG HWA BANK

17.4

0.2881844

6482723

LARGAN PRECISION

778

1.965924

830535

YULON MOTOR CO

52.8

1.34357

3907452

CHENG SHIN RUBBE

92.8

3.571429

12490376

LITE-ON TECHNOLO

3.343465

12855541

CHIMEI INNOLUX C

18.85

0.802139

48074435

MEDIATEK INC

356

2.298851

12160599

CHINA DEVELOPMEN

8.56

1.542112

43505757

MEGA FINANCIAL H

24.15

0.8350731

20010072

CHINA STEEL CORP

26.1 -0.1912046

16017020

NAN YA PLASTICS

52.8

-1.675978

3129690

3.089888

93505585

PRESIDENT CHAIN

169.5

0.8928571

922623

CHINATRUST FINAN

18.35

CHUNGHWA TELECOM

93.1

4429687

QUANTA COMPUTER

64.5

-1.225115

8660148

COMPAL ELECTRON

21.2

0.2364066

7592825

SILICONWARE PREC

0.1472754

3101669

DELTA ELECT INC

130.5

4417418

SINOPAC FINANCIA

14.7

2.797203

114631536

FAR EASTERN NEW

30.85 -0.1618123

4129244

SYNNEX TECH INTL

53.8 -0.5545287

4940472

FAR EASTONE TELE

68 -0.8746356

5564175

TAIWAN CEMENT

38.4

1.453104

4703491

FIRST FINANCIAL

18.65

0.2688172

7807238

TAIWAN COOPERATI

0.2949853

4661149

FORMOSA CHEM & F

68.8

-2.272727

3981534

TAIWAN FERTILIZE

0.9817672

1597480

FORMOSA PETROCHE

78.7

-1.130653

1258744

TAIWAN GLASS IND

28.3

1.071429

582385

MOVERS

5 5520

INDEX 5512.96 HIGH

5514.41

LOW

5476.85

52W (H) 5639.93 5470

(L) 4719.96 1-April

3-April

April 8, 2013 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 60

32.40 31.95

17.0 16.7

31.50

16.4 58

31.05

Max 32.35

average 31.120

Max 38.65

average 38.029

Min 30.75

Last 30.8

Min 37.55

Last 37.55

30.60

16.1 Max 59.2

average 57.989

PRICE

Min 15.86

Last 16.28

38.4

19.4

20.7

38.1

19.2

20.4

37.8

19.0

20.1

37.5

Max 19.5

average 19.005

DAY %

YTD %

(H) 52W

(L) 52W

-0.600461141

-0.493774152

106.0899963

BRENT CRUDE FUTR May13

104.12

-2.087643408

-4.010325436

117.4300003

91.54999542

GASOLINE RBOB FUT May13

286.36

-1.210887639

-1.050449205

330.369997

237.7199888

GAS OIL FUT (ICE) May13

883.75

-0.869321368

-3.494403494

1000.75

801.25

4.125

4.509754244

19.46133797

4.146000385

3.072000027

NATURAL GAS FUTR May13

290.98

-1.815359698

-3.770090614

327.1399975

258.5000038

Gold Spot $/Oz

HEATING OIL FUTR May13

1581.25

2.3761

-4.9992

1796.08

1527.21

Silver Spot $/Oz

27.3275

2.0063

-9.2411

35.365

26.1513

Platinum Spot $/Oz

1537.75

1.209

1.3177

1742.8

1379.05

Palladium Spot $/Oz

728.05

-1.0533

4.0577

786.5

553.75

LME ALUMINUM 3MO ($)

1886.5

0.079575597

-8.996623251

2200.199951

1827.25

LME COPPER 3MO ($)

7407

-0.456927832

-6.606985248

8496.75

7219.5

LME ZINC

1884

-0.317460317

-9.423076923

2230

1745 15236

3MO ($)

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

15950

-0.931677019

-6.506447831

18920

15.495

-1.085221832

0.064578624

16.95000076

14.5

629

-0.158730159

-10.17493752

838

520.25

May13

Min 18.82

18.8

Last 18.82

Max 20.95

average 20.196

Min 19.92

Last 20

WHEAT FUTURE(CBT) May13

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 %

1.0383 1.5336 0.9344 1.2991 97.57 7.9973 7.7651 6.206 54.8125 29.25 1.2401 29.948 41.18 9753 101.294 1.21433 0.84725 8.0171 10.3329 126.79 1.0299

YTD %

-0.2306 1.8597 1.6481 1.4446 -2.1216 -0.0138 -0.0193 0 0.1323 0.4103 0.1855 -0.0134 0.1263 -0.041 -1.8905 0.1622 0.4037 -0.9654 -0.9213 -3.5413 0.0097

(H) 52W

19.8

0.0482 -5.1929 -2.0334 -1.5087 -11.7557 -0.1763 -0.1867 0.3964 0.333 4.547 -1.5079 -3.0553 -0.425 0.4101 -11.8141 -0.5641 -3.7569 2.4997 1.9114 -10.4267 0

(L) 52W

1.0625 1.6381 0.9972 1.3711 97.83 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 101.74 1.25692 0.88151 8.4957 10.9254 127.71 1.0314

0.9582 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1974 51.06 29.08 1.2152 28.913 40.54 9113 74.482 1.20037 0.77553 7.7018 9.6245 94.12 1.029

MACAU RELATED STOCKS (H) 52W

(L) 52W

ARISTOCRAT LEISU

3.68

0.2724796

16.82539

3.94

2.29

1712945

132.0500031

CROWN LTD

12.6

2.439024

18.0881

12.64

8.06

2173752

24.56999969

17.46999931

AMAX HOLDINGS LT

0.045

#N/A N/A

13645500

93.93000031

68.18999481

BOC HONG KONG HO

25.4

-1.930502

5.394189

27.1

20.85

17566775

CENTURY LEGEND

0.29

5.454545

9.433968

0.42

0.215

724000

CHEUK NANG HLDGS

5.66

-3.082192

-5.509178

6.74

2.8

128350

CHINA OVERSEAS

20.8

-3.703704

-9.956711

25.6

14.624

24813926

CHINESE ESTATES

13.1

0.7692308

8.001881

13.12

7.697

475046

CHOW TAI FOOK JE

10.2

-3.773585

-18.00643

13.4

8.4

7692408

EMPEROR ENTERTAI

2.15

-6.521739

13.75661

2.49

1.1

1655000

FUTURE BRIGHT

2.27

-5.416667

86.06557

2.75

0.65

8172000

GALAXY ENTERTAIN

30.8

-4.791345

1.482701

35.7

16.94

15190831 1595163

699

0.720461095

-11.26626468

938

659.75

SOYBEAN FUTURE May13

1361.75

-0.747084548

-2.680007147

1639.5

1218.75

COFFEE 'C' FUTURE May13

140.15

0.465949821

-4.464894342

201.5

SUGAR #11 (WORLD) May13

17.65

-0.113186191

-9.948979592

COTTON NO.2 FUTR May13

86.79

-1.743462017

14.40812022

World Stock MarketS - Indices

NAME

PRICE

DAY % YTD %

VOLUME CRNCY

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

14565.25

-0.2797459

11.14999

14684.49

12035.08984

NASDAQ COMPOSITE INDEX

3203.859

-0.6550112

6.105129

3270.296875

2726.68

HANG SENG BK

123.5

-1.593625

4.043811

131.5

99.2

FTSE 100 INDEX

6249.78

-1.487046

5.967803

6533.99

5229.76

HOPEWELL HLDGS

30.8

-2.992126

-7.368421

35.3

19.049

1313000

DAX INDEX

7658.75

-2.029322

0.6090053

8074.47

5914.43

HSBC HLDGS PLC

81.35

-1.928873 0.06149686

88.45

59.8

17638093

NIKKEI 225

12833.64

1.575839

23.4576

13225.62

8238.96

HANG SENG INDEX

21726.9

-2.733476

-4.104792

23944.74

18056.4

CSI 300 INDEX

2483.547

-0.1143827

-1.561852

2791.303

2102.135

TAIWAN TAIEX INDEX

7942.35

0.3686255

3.154102

8089.21

6857.35

HUTCHISON TELE H

3.72

-2.362205

4.494384

4.05

2.98

4500000

LUK FOOK HLDGS I

22.3

-4.700855

-8.606556

30.05

14.7

4249265

MELCO INTL DEVEL

12.86

-4.881657

42.7303

13.96

5.12

6579053

MGM CHINA HOLDIN

16.28

-2.280912

22.60625

18.449

9.509

8979986

3.37

-0.8823529

-8.91892

3.249

4014000

NEPTUNE GROUP

MIDLAND HOLDINGS

0.136

-5.555556

-10.52631

0.226

0.084

20860000

NEW WORLD DEV

12.82

-3.172205

6.65557

15.12

7.95

16534839

SANDS CHINA LTD

37.55

-4.936709

10.60383

41.05

20.65

18904181

SHUN HO RESOURCE

1.44

-1.369863

2.857145

1.67

1.03

-3.102627

4.65

2.56

6105232 7698512

KOSPI INDEX

1927.23

-1.644339

-3.49616

2042.48

1758.99

S&P/ASX 200 INDEX

4891.425

-0.4488875

5.215685

5163.5

3985

4926.068

0.07022696

14.11686

4985.852

3635.283

FTSE Bursa Malaysia KLCI

1688.65

0.01125286

-0.01775818

1700.55

1526.6

SHUN TAK HOLDING

4.06

-1.216545

NZX ALL INDEX

945.638

0.1241973

7.208754

945.673

755.149

SJM HOLDINGS LTD

18.82

-3.288798

4.555556

22.15

12.34

PHILIPPINES ALL SHARE IX

4195.96

-0.498225

13.43559

4290.5

3238.77

SMARTONE TELECOM

12.96

-2.994012

-7.954545

17.38

12.5

1533064

-3.846154

-4.53461

25.5

14.62

13376100

JAKARTA COMPOSITE INDEX

15.8

21.0

92.7

NAME

average 16.23

19.6

WTI CRUDE FUTURE May13

CORN FUTURE

Max 16.98

CURRENCY EXCHANGE RATES

NAME

METALS

Last 57.5

38.7

Commodities ENERGY

Min 57.15

HSBC Dragon 300 Index Singapor

642.17

-0.67

3.39

STOCK EXCH OF THAI INDEX

1489.53

-2.547008

7.011845

1601.34

1099.15

HO CHI MINH STOCK INDEX

502.58

1.051573

21.47535

514.1

372.39

Laos Composite Index

1385.6

-0.1470122

14.06274

1455.82

980.83

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

WYNN MACAU LTD ASIA ENTERTAINME

4.47

3.712297

46.07843

6.25

2.4

135245

BALLY TECHNOLOGI

50.01

-0.8721506

11.85417

52.7

41.74

195207

BOC HONG KONG HO

3.34

1.212121

8.794791

3.59

2.7

3500

GALAXY ENTERTAIN

4.1275

3.967254

4.57

2.25

600

INTL GAME TECH

16.11

-0.8615385

13.6909

17.49

10.92

3097377

JONES LANG LASAL

94.34

-1.142198

12.3898

100.86

61.39

347584

LAS VEGAS SANDS

52.72

-1.439521

14.21144

58.3216

32.6127

7549007

MELCO CROWN-ADR

21.81

-2.372426

29.51306

23.39

9.13

8547636

MGM CHINA HOLDIN

2.17

17.2973

2.44

1.36

100

MGM RESORTS INTE

11.99

-2.281989

3.00687

14.11

8.83

13619268

SHFL ENTERTAINME

15.07

-1.696021

3.931034

18.37

11.75

293734

SJM HOLDINGS LTD

2.5

8.225111

2.85

1.65

100

118.04

-0.6397306

4.933774

129.6589

84.4902

2383506

WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily April 8, 2013

Opinion

The long mystery of low interest rates Kenneth Rogoff

Former chief economist of the IMF, is Professor of Economics and Public Policy at Harvard University

s policymakers and investors continue to fret over the risks posed by today’s ultra-low global interest rates, academic economists continue to debate the underlying causes. By now, everyone accepts some version of U.S. Federal Reserve chairman Ben Bernanke’s statement in 2005 that a “global savings glut” is at the root of the problem. But economists disagree on why we have the glut, how long it will last, and, most fundamentally, on whether it is a good thing. Bernanke’s original speech emphasised several factors – some that decreased the demand for global savings, and some that increased supply. Either way, interest rates would have to fall in order for world bond markets to clear. He pointed to how the Asian financial crisis in the late 1990’s caused the region’s voracious investment demand to collapse, while simultaneously inducing Asian governments to stockpile liquid assets as a hedge against another crisis. Bernanke also pointed to increased retirement saving by ageing populations in Germany and Japan, as well as to saving by oil-exporting countries, with their rapidly growing populations and concerns about oil revenues in the long term. Monetary policy, incidentally, did not feature prominently in Bernanke’s diagnosis. Like most economists, he believes that if policymakers try to keep interest rates at artificially low levels for too long, eventually demand will soar and inflation will jump. So, if inflation is low and stable, central banks cannot be blamed for low long-term rates. In fact, I strongly suspect that if one polled investors, monetary policy would be at the top of the list, not absent from it, as an explanation of low global long-term interest rates. The fact that so many investors hold this view ought to make one think twice before absolving monetary policy of all responsibility. Nevertheless, I share Bernanke’s instinct that, while central banks do set very shortterm interest rates, they have virtually no influence over longterm real (inflation-adjusted)

economies, but with the major emphasis on private savings rather than public savings. Because emerging economies have relatively weak asset markets, their citizens seek safe haven in advanced-country government bonds. A related theory is that emerging economies’ citizens find it difficult to diversify the huge risk inherent in their fast-growing but volatile environments, and feel particularly vulnerable as a result of weak social safety nets. So they save massively.

Downward pressure

rates, other than a modest effect through portfolio management policies (for example, “quantitative easing”).

Competing theories A lot has changed since 2005. We had the financial crisis, and some of the factors cited by Bernanke have substantially reversed. For example, Asian investment is booming again, led by China. And yet global interest rates are even lower now than they were then. Why? There are several competing theories, most of them quite elegant, but none of them entirely satisfactory. One view holds that long-term growth risks have been on the rise, raising the premium on assets that are perceived to be relatively safe, and raising precautionary saving in general. (Of

The puzzle of the global savings glut may live on for several years to come

course, no one should think that any government bonds are completely safe, particularly from inflation and financial repression). Certainly, the 2008 financial crisis should have been a wakeup call to proponents of the “Great Moderation” view that long-term volatility has fallen. Many studies suggest that it is becoming more difficult than ever to anchor expectations about long-term growth trends. Witness, for example, the active debate about whether technological progress is accelerating or decelerating. Shifting geopolitical power also breeds uncertainty. Another class of academic theories follows Bernanke (and, even earlier, Michael Dooley, David FolkertsLandau, and Peter Garber) in attributing low long-term interest rates to the growing importance of emerging

These explanations have some merit, but one should recognise that central banks and sovereign wealth funds, not private citizens, are the players most directly responsible for the big savings surpluses. It is a strain to think that governments have the same motivations as private citizens. Besides, on closer inspection, the emergingmarket explanation, though convenient, is not quite as compelling as it might seem. Emerging economies are growing much faster than the advanced countries, which neoclassical growth models suggest should push global interest rates up, not down. Similarly, the integration of emerging-market countries into the global economy has brought with it a flood of labour. According to standard trade theory, a global labour glut ought to imply an increased rate of return on capital, which again pushes interest rates up, not down. Surely, any explanation must include the global constriction of credit, especially for small and medium-size businesses. Tighter regulation of lending standards has shut out an important source of global investment demand, putting downward pressure on interest rates. My best guess is that when global uncertainty fades and global growth picks up, global interest rates will start to rise, too. But predicting the timing of this transition is difficult. The puzzle of the global savings glut may live on for several years to come. © Project Syndicate

editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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April 8, 2013 business daily | 15

OPINION Business

wires

Japan’s brave new monetary era Bloomberg Editors

Leading reports from Asia’s best business newspapers

Jakarta Globe State lenders Bank Mandiri, Bank Negara Indonesia and Bank Rakyat Indonesia have applied to Bank Indonesia to obtain a trustee licence in an apparent move to entice foreign companies to put their foreign earnings in the domestic banking system. Central bank spokesman Difi A. Johansyah confirmed the news, but added, “I cannot say when the licence will be granted.” Bank Indonesia last year said that local banks could establish a trust fund service to reduce demand for US dollars, easing pressure on the rupiah. That followed a prior regulation requiring companies to place their export earnings in the domestic market.

Korea Herald North Korea has asked all embassies in Pyongyang to move out staff for their security amid sharp military tensions, but the United States said Friday it has no plans yet to take extraordinary steps with regard to Americans in the communist nation. The U.S. has no embassy or consulate in North Korea since they have no diplomatic ties. The Swedish Embassy in Pyongyang serves as interim protecting power for the U.S. and provides basic consular services to American citizens. In the notice, the ministry said a war could break out anytime soon and the safety of foreigners is not guaranteed, according to China’s official Xinhua News Agency.

Bangkok Post Somsak Pureesrisak, Thailand’s new tourism and sports minister, has officially assumed his position, announcing that tourist safety will take priority under his watch. “If Thailand is not a safe destination in the eyes of foreign tourists, it would be useless to invest many hundreds of billions of baht to boost Thai tourism,” he was quoted as saying. “So I will seriously focus on this point. This will bring sustainable tourism growth to Thailand and drive tourism revenue to meet the 2-trillion-baht target by 2015.”

Asahi Shimbun Mitsubishi Heavy Industries Ltd unveiled a new device that removes living organisms from ships’ ballast water. Ballast water refers to seawater pumped into tanks aboard a ship to serve as a weight that keeps it stabilised after unloading. Foreign organisms contained in ballast water are recognised as a threat to native ecosystems. Mitsubishi’s device comprises a 12-metre-long container that houses filters to remove living organisms, an ultraviolet apparatus to sterilise bacteria, and other equipment. The new device makes installation simpler and less time-consuming than traditional models that have to be installed in engine rooms.

Haruhiko Kuroda, Bank of Japan’s Governor

he Bank of Japan’s new governor, Haruhiko Kuroda, didn’t disappoint investors with his announcement last week: He laid out plans for the biggest, fastest unconventional monetary stimulus any large economy has ever seen. By definition, financial markets never expect “shock and awe,” but they expect it least of all from the hyper-cautious BOJ. For once, for the first time anybody can recall, “shock and awe” is what they got. On balance, this bold move is the right one. Prime Minister Shinzo Abe and his government now need to do their part. There’s no risk-free exit from Japan’s economic woes. Nonetheless, with a combination of long-term fiscal control, supply-side reform and an end to deflation – Kuroda can deal only with the third piece – Japan’s prospects can finally improve. Kuroda’s programme of additional quantitative easing is enormous. The BOJ’s balance sheet is scheduled to expand by 30 percent of gross domestic product between now and the end of 2014. For comparison, since the U.S. Federal Reserve embarked on QE, its balance sheet has grown by less than 15 percent of GDP – and it took almost five years, rather than less than two, to do so. No less important is the announced shift toward buying long-term debt. Up to now, the BOJ’s bond buying has been not just small but also confined to short maturities. Short-term public debt isn’t much different from money, and swapping one kind of money (short-term bonds) for another (reserves at the central bank) is mostly pointless. The new bond-buying programme, like the Fed’s, will focus on longer-term debt – raising long-term bond

prices and suppressing longterm yields, thus encouraging investors to buy other longlived assets instead, including equities. That way, the stimulus is much stronger. This reasoning, of course, exposes the main risk. Kuroda wants to shatter Japan’s deflationary mindset, and cause investors to expect a modest increase in inflation to 2 percent – an outcome devoutly to be wished. But what if investors think the BOJ has simply lost its grip and that much higher inflation is on the way? Then long-term yields would probably surge, not fall, in both nominal and inflationadjusted terms. For Japan, whose public debts stand at more than 200 percent of GDP, the consequence could be an outright fiscal collapse.

Inflation expectations Kuroda has drawn two lines to lessen this danger and keep inflation expectations in check. He has ruled out permanent monetisation of public debt – the most inflationary form of monetary stimulus. In other words, like the Fed, he’s

Japan’s calcified and overregulated economy needs supply-side radicalism as much as it needs Kuroda’s monetary kind

promising to reverse the QE in due course. Second, for now at least, the BOJ won’t be buying foreign-currency securities, signalling it has no intention to drive the yen much lower (though the central bank doubtless won’t be too upset by a moderate decline). Over the coming weeks and months, Kuroda (and everybody else) will be watching the currency and long-term yields to see whether the mix he’s proposing – massive unconventional easing but with significant gestures of restraint – will move inflation expectations to 2 percent, but no higher. For now, we think he has got the balance right. When Abe, the new prime minister, began pressuring the BOJ to raise the inflation rate, he said this was just one of three “arrows”. Abenomics was also to include further fiscal expansion and a programme of supply-side reforms to spur private investment and growth. He needs to think again about the second and get moving on the third. Abrupt fiscal contraction would be unwise but Abe

should put much greater emphasis on medium- and longer-term restraint. After years of indecisive and ill-timed fiscal stimulus, Japan has become far too vulnerable to a fiscal calamity, and even now rising debt-service costs are a threat to more productive forms of government spending. Abe has said fiscal expansion isn’t forever, but he should signal greater resolve to address the debt issue. An increase in the sales tax due later this year should go ahead, and plans for longerterm spending cuts should be announced and, so far as possible, enacted promptly. Abe has promised to say more about the third arrow – supply-side reform – in a few months, when several bodies that are charged to come up with proposals are due to report. This exercise may well produce a lot of talk and no action. Japan’s calcified and overregulated economy needs supply-side radicalism as much as it needs Kuroda’s monetary kind. For the first time, the BOJ is doing its part. Abe and the rest of his government must now do theirs. Bloomberg View

16 |

business daily April 8, 2013

CLOSING Samsung posts 53 pct jump in profit

British music retailer HMV handed lifeline

Even without Christmas or the benefit of a new hit device, Samsung Electronics Co. posted near-record earnings in the first quarter. Profit is set to surge when the Galaxy S4 smartphone goes on sale this month. The mobile-phone business again was the company’s biggest earnings driver, with sales of cheaper handsets in emerging markets supplementing growth by high-end Galaxy models. Operating profit rose to about 8.7 trillion won (US$7.7 billion) in the three months ended March 31 from 5.69 trillion won a year earlier, it said. Analysts estimate the current quarter could reach 9.3 trillion won as Samsung releases the S4 in the U.S. on April 26.

Britain’s most high-profile entertainment retailer HMV was handed a lifeline when a turnaround group bought it, ensuring a future for a firm which gave the Beatles one of their first big breaks. HMV was bought by restructuring specialist Hilco U.K. Ltd in a deal worth about 50 million pounds (US$76 million). Hilco, which already owns HMV Canada, said it had acquired the business and certain HMV assets, including 141 stores across the country, from administrators Deloitte. The deal safeguards at least 2,500 jobs and the new owner plans to concentrate on selling music and film and step away from selling consumer electronics.

Mr Passos Coelho – seeking replacement measures

Growth strengthening but risks remain, Lagarde says International Monetary Fund managing director Christine Lagarde said that while a “substantial portion” of the global economy appears better now than a year ago, some risks persist. “Growth continues to strengthen and broaden among the emerging and developing economies,” and momentum is starting to pick up in the U.S., Ms Lagarde said yesterday in remarks at the Boao Forum for Asia, in the southern Chinese province of Hainan. Ms Lagarde said she was giving a preview of the IMF’s World Economic Outlook report due next week, without providing numbers. The IMF in January cut its 2013 global growth forecast to 3.5 percent and predicted a second year of contraction in the 17- country euro area. Risks include a “patchy recovery” with concerns that “naturally centre on Europe,” Ms Lagarde said. “While there has been progress on a number of fronts, policy solutions will take time to be completed and effective,” she added. Fiscal risks are also weighing on growth, she said, citing spending cuts in the U.S. and a “medium-term challenge” in Japan. Monetary policies have limits in their effectiveness and may include unintended consequences, the IMF head said, while praising last week’s expanded stimulus from the Bank of Japan as “another welcome step in this direction”. “Monetary policies – including unconventional measures – have helped prop up the advanced economies, and in turn, global growth,” Ms Lagarde told the forum in south China.

Boeing finishes 787 testing With a successful flight on Friday, Boeing Co. moved closer to proving that a revamped safety system can prevent batteries on its new 787 Dreamliner from catching fire or overheating, and getting back the plane into service. Friday’s test flight concludes testing after little more than three weeks, and moves the Dreamliner closer to resuming passenger flights, restarting jet deliveries, and stemming millions of dollars in losses that have piled up at airlines and Boeing since the jet was grounded more than two months ago. The end of testing also turns attention from Boeing to regulators in the United States, Japan and Europe, who must decide whether the fix for the high-tech plane’s lithium-ion batteries is safe. Boeing pronounced the flight “straightforward” and “uneventful” after the jet returned to earth safely. “Boeing will now gather and analyse the data and submit the required materials to the FAA … in coming days,” the company said in a statement. “Once we deliver the materials we stand ready to reply to additional requests and continue in dialog with the FAA to ensure we have met all of their expectations.” Industry officials and airlines that operate the fuel-efficient plane have said they expect it could be flying again as early as April or May. Boeing has said it should happen in weeks, not months. Attention now shifts to politicians and regulators as aviation agencies weigh the competing demands of ensuring safety while not letting the costly grounding drag on too long.

Urgent budget talks for Portugal Court ruling poses difficulties for bailout goals, government says

ortugal’s prime minister has criticised the top court’s ruling that parts of the 2013 budget are unconstitutional, and has held urgent talks with the president. Pedro Passos Coelho held an extraordinary cabinet meeting on Saturday and said the Constitutional Court had made meeting commitments to international lenders difficult. The prime minister also met the president late on Saturday to discuss the next steps. President Aníbal Cavaco Silva said after the talks that the coalition government should remain in office and that the country should honour its international commitments. The government said it respected the court’s ruling but did not agree with it, suggesting that the judges had failed to take into account steps taken by the government to make its austerity measures fair to all citizens. The government said the Constitutional Court’s rejection of these key austerity measures creates “serious difficulties” in meeting international commitments under the bailout. State Secretary for Cabinet Affairs Luís Marques Guedes told reporters

the decision “jeopardises the country’s hard-earned credibility” gained with its European partners and lenders. The Constitutional Court on Friday rejected four out of nine contested austerity measures in this year’s budget in a ruling that deals a heavy blow to government finances. Mr Passos Coelho was due to make a public statement late yesterday.

Budget shortfall Still, analysts say the rejection should not provoke a governability crisis and expect replacement measures to be found with the European Union and International Monetary Fund. Th e g o v er n m en t w o u l d n o t provide estimates for how much the rejected measures are worth, but analysts have said at least around 900 million euros (US$1.17 billion) in net revenues and savings are compromised. Some Portuguese media have put the figure as high as 1.3 billion euros. The entire package of austerity measures in the 2013 budget is worth about 5 billion euros and includes the

largest tax hikes in living memory, which were mostly upheld. The court’s decision came before an informal meeting of euro zone finance ministers this week in Dublin where they were expected to approve extensions of loan maturities for Portugal and Ireland. “Portugal has been fighting to reach, at this meeting, agreement with European partners for the extension of its bailout loan maturities, which is essential for our successful exit from the bailout programme in 2014,” Mr Marques Guedes said. Lisbon has to cut the budget deficit to 5.5 percent of GDP this year from 6.4 percent in 2012, when it missed the goal but was still lauded by its EU and IMF lenders for its austerity efforts. The lenders have already eased Portugal’s deficit goals twice since the rescue package was agreed, recognising the country’s consolidation efforts. Portugal returned to the bond market for the first time since its 2011 EU/IMF bailout in January, selling debt due in 2017, and has been preparing a longer-maturity bond issue for the coming months. Reuters