Eiffel of fun for Cotai visitors What happens in Vegas certainly doesn’t stay in Vegas. Las Vegas Sands Corp. is considering building a scale replica of France’s most famous landmark the Eiffel Tower on its Lot 3 site at Cotai. The Nevada gambling city already has a smaller copy of the iconic structure at Paris Las Vegas resort. Page 7
Caution rules in fiscal reserve bets T
he government has already made one billion patacas (US$125 million) from the investment of its fiscal reserve only seven months after it was set up. The figure was disclosed yesterday by Secretary for Economy and Finance Francis Tam Pak Yuen. He was making his first ever mid-
year report on the territory’s finances at the Legislative Assembly – despite being in the job for 12 years. Half of the 99 billion patacas fiscal reserve was invested in sovereign bonds – but not those of European nations because of the continuing debt crisis on that continent said a report from Macau’s financial regulator.
The other half has remained in cash deposits, mostly of U.S. dollars. The reserve has also invested five billion in yuan bonds, after getting permission from Beijing to invest directly in mainland China’s interbank bond market. During the meeting the secretary also discussed the execution of the public budget, including the
weak implementation of the public investment plan. But legislators were left disappointed by the lack of details on several public infrastructure projects, including the Hong Kong-ZhuhaiMacau Bridge, the construction of several public housing projects and the Light Rapid Transit system. More on page 3
MGM China eyes Taiwan, deals nearer home
I SSN 2226-8294
A US$1.5 billion (11.9 billion patacas) refinancing package sought for MGM Macau is part of a strategy by parent MGM China Holdings Ltd to create a cash reserve for new opportunities. The Macau casino operator is eyeing Taiwan and takeovers in ‘supportive industries’ at home as well as putting cash toward its new Cotai project. “We’re working through the commitments as we speak, but it’s looking quite positive,” said Grant Bowie, chief Page 2 executive of MGM China.
Chui spills the beans on housing, pensions Chief Executive Fernando Chui Sai On will face legislators’ questions on public housing and the social security fund today. “Government policies have not been effective and housing prices remain too high for residents,” assembly member Ho Ion Sang told Business Daily. A second cash handout this year could be in the cards, although secretary Francis Tam said the odds are low. Page 3
Dismissal cash cap gets new enemy First the New Macau Association, now the powerful Macau Federation of Trade Unions is standing up and counting petition signatures. They’re opposing a ceiling on compensation payouts to workers unfairly dismissed from their jobs. Association vicepresident Ella Lei Cheng I said the cap on workers’ payouts, that had not changed since 1997, was “unfair and unreasonable” because the economy had grown quickly. Page 5 www.macaubusinessdaily.com
HANG SENG INDEX 20295
20245
Greek Mythology to lose tables Crisis-hit satellite operation Greek Mythology Casino will lose 40 of its gambling tables, as well as 200 employees, next month. The casino’s business “has been affected” by the recent row between the New Century Hotel shareholders, where Greek Mythology is located, Ambrose So Shu Fai, the chief executive officer of gambling operator Sociedade de Jogos de Macau SA (SJM) said yesterday. The venue uses an SJM gaming licence but is managed by other people and Mr So declined to comment on New Century’s “internal issue”. The 40 tables will be useful as the company prepares to rearrange gambling tables in its directly managed properties to raise profits and market share. SJM is still waiting for the green light to move into Cotai, but promised to have more non-gambling in its planned US$2 billion (15.9 billion patacas) resort, which could be ready by the second half of 2015. Page 2
20195
20145
August 9
HSI - Movers Name
%Day
CATHAY PAC AIR
3.88
ESPRIT HLDGS
3.39
LI & FUNG LTD
3.10
CHINA RES LAND
2.64
BANK EAST ASIA
2.49
HONG KONG EXCHNG
-0.27
CHINA SHENHUA-H
-0.66
HENGAN INTL
-0.69
CHINA RES ENTERP
-1.93
CHINA COAL ENE-H
-2.16
Source: Bloomberg
2012-8-10
2012-8-11
2012-8-12
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25˚ 30˚
Year I - Number 95 Friday August 10, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00
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business daily August 10, 2012
macau
SJM removes tables from Greek Mythology Strips 40 tables from its dispute-hit Taipa satellite casino and rejigs other properties to maximise profits Tony Lai tony.lai@macaubusinessdaily.com
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ambling operator Sociedade de Jogos de Macau, S.A. (SJM) will reallocate its gaming tables in September to optimise revenue, and claw back 40 tables from crisis-hit satellite operation Greek Mythology Casino. SJM chief executive officer Ambrose So Shu Fai said yesterday that the recent row between the New Century Hotel shareholders, where Greek Mythology is located, is “an internal issue” which has not affected SJM’s grasp its satellite. The venue uses an SJM gaming licence but is managed by other people. “But the business [of the Greek Mythology casino] has been affected, so they will now give us back 40 [gaming] tables, as well as 200 employees,” he told reporters on the sidelines of a ceremony. “This is beneficial to SJM as we can put these tables in our own casinos… to maximise our profits,” said Mr So, expecting the process will be completed in September. New Century shareholder Ng Wei, also known as Ng Man Sun, was attacked in the hotel in late June, apparently as part of a dispute with his former partner and lover Chen Meihuan for the control of the hotel. The hotel even stopped its operations last month. Apart from gaining 40 extra tables from Greek Mythology, SJM – the city’s leading casino operator – is also planning to rearrange gambling tables in its directly managed properties to raise profits and market share. “Under the condition we have now, of limited space, we plan to have a proper reallocation of our gambling
tables for… better distribution, in order to raise our profits,” said the executive, who thinks the firsthalf results Hong Kong-listed SJM Holdings Ltd posted on Wednesday is “acceptable”. The company had a 28-percent increase in its profits to HK$3.41 billion (US$440 million), driven by its mass-market table revenue, which grew by 15.1 percent year-on--year, though its market share went down from 31.1 percent to 27 percent. Mr So believes the slight drop of 0.5 percent in SJM’s VIP revenue is “probably related” to the tightening of monetary policy in mainland China.
Awaiting Cotai Besides moving around the gambling tables, a new project for Cotai can also help to boost the revenues of SJM. The executive said the company would start the construction once the government has finished the land concession procedures and calculating the land premium payment. Though the operator does not yet have a timetable or the details such as the number of gambling tables for the project, Mr So stressed there will be a higher proportion of non-gambling elements than its current facilities. SJM plans to invest US$2 billion in the 70,000-square metre Cotai plot it has requested from the government. If approved, the project is expected to be ready by the second half of 2015 at the earliest. Looking ahead, for the city’s future gambling revenue and economic growth, the executive is optimistic,
SJM seeking to maximise its profits, says SJM chief executive Ambrose So
as long as there are “no big problems” in the mainland economy. He added the city’s economy will “maintain an upward trend” as there are also numerous infrastructure projects to be completed in the next few years, including the Hong KongZhuhai-Macau Bridge. Last month the city’s gambling revenue only inched up by 1.5 percent to 24.58 billion patacas from a year earlier but Mr So said it is “too early” to cut down the industry’s growth forecast based on a single monthly figure.
Secretary for Economy and Finance Francis Tam Pak Yuen last month revised his forecast on the Macau economic growth from double-digit to high single-digit. Meanwhile Mr So said “the human resources situation in SJM is stable” and there is no need for the casino to hire a large number of employees before the new casino age restrictions, which will come into effect in November. The new law will only allow people aged 21 or above, instead of 18, to access and work in casinos.
MGM China seeks strategic fund for regional growth Macau casino op eyeing Taiwan, takeovers in ‘supportive industries’ at home Associate Editor
A
US$1.5 billion (11.9 billion patacas) refinancing package sought for MGM Macau is part of a strategy by parent MGM China Holdings Ltd to create a cash reserve for new and possibly regional opportunities beyond even its planned Cotai project the company said yesterday. The figure mentioned for the refinancing loan in an earnings conference call this week is US$1 billion shy of the US$2.5 billion headline project cost for MGM Cotai. But the new loan facility might be stretched to US$2 billion, Grant Bowie, chief executive of MGM China, told Business Daily. And with only around HK$4.1 billion (US$528.6 million) outstanding in debt on current projects – chiefly the US$1.25 billion MGM Macau – and HK$5.1 billion cash in the bank, the company has net cash of HK$1 billion added Hubert Wang, chief financial officer. That and free cash flow from existing MGM Macau operations should be enough to carry the Cotai project over the funding goal line. “We’re in the market for a refinance. We’re looking at a US$1.5 billion
proven financial structure certainly positions us for Cotai, but it’s also an objective of the board to expand into Greater China,” he explained.
Strategic cash
Grant Bowie – MGM China seeking flexible funding for further growth
facility which we’d be happy to up scale,” said Mr Bowie. “We’re working through the commitments as we speak, but it’s looking quite positive. That would give us between US$1.5 billion and US$2 billion maybe of facility on a US$2.5 billion [Cotai] project, for which we already have quite a lot of money in the bank, and for which we’re still generating cash in this property [MGM Macau]. That
“The key for us is we want to create cash resources that don’t just limit us to Cotai,” added the CEO. “We’ve got a lot more flexibility to look at other places as well. What we have done is refinance the term loan we had – that’s the US$500 million debt we mentioned. Because we’re cash positive we haven’t drawn any of the [original] revolver loan. We’ve only got term loan out. So we’ve refinanced the term [loan] and extended and significantly up scaled the revolver [loan] to give us more financial flexibility.” Mr Bowie confirmed MGM China Holdings was also looking at opportunities for a gaming resort in Taiwan. He stressed it that if pursued it would be independent of the Matsu islands scheme recently put forward by former Las Vegas Sands Corp. president Bill Weidner. “We are looking positively at Taiwan, and at other opportunities in Macau.
While that’s a challenge [Macau expansion], it’s not impossible, so we are looking at how we can add other income streams,” added Mr Bowie. He declined to say precisely what opportunities the company was considering. Mr Bowie did say they were likely to be “independent businesses and potentially supportive industries which are consistent with the business we’re in so that we actually get economies of scale from the operations.” He added the company was looking for deals that would give MGM China a “sustainable competitive advantage”. Mr Bowie added that the current deceleration of growth in the Macau market was a function not just of economic slowdown in China but also of ‘big numbers’ on the baseline against which future growth is measured. Previous reporting periods have shown year-on-year revenue expansion of 20s or even 40s of percent. He said a pause was a sign of a maturing market and – in concert with the government limit on new table supply – an opportunity for operators to reassess their businesses and make them more efficient.
August 10, 2012 business daily | 3
MACAU
Safety-first approach in investing fiscal reserve Government’s conservative investment approach outlined in first ever mid-year report to Legislative Assembly on health of city’s coffers Xi Chen xi@macaubusinessdaily.com
T
he government has generated 1 billion patacas (US$125 million) in income by investing money from the 99 billion pataca fiscal reserve since it was established in February, according to Legislative Assembly member Chan Chak Mo. Mr Chan said the details were in yesterday’s report to the chamber, the first time a mid-year report on the government’s finances had been offered. Secretary for Economy and Finance Francis Tam Pak Yuen gave the report in a closed-door session. Exactly how much of the reserve the government invested was not revealed, so its return on investment cannot be deduced precisely. Assembly member Ng Kuok Cheong said about half of the reserve had been invested in sovereign bonds but that the government had avoided bonds offered by European countries. Mr Chan said the remainder of the reserve was held as cash deposits – half in US dollars, 39 percent in Hong Kong dollars and 8.6 percent in euros. The reserve had bought 5 billion yuan (6.28 billion patacas) worth of yuandenominated bonds. The mainland’s central bank gave the Macau government permission in February to invest directly in the mainland’s interbank bond market. “The investment decisions by the fiscal reserve were reasonable, despite being on the conservative end, given
the uncertain current global economic situation,” Mr Ng said. Mr Tam also reported to the assembly on the budget, a report that Mr Ng said was a technical analysis, without much detail. He said he expected the government to elaborate further on its spending on infrastructure projects.
Super surplus In the first half of this year, the government spent just 3 billion patacas of its nearly 20 billion pataca budget for capital expenditure. However, capital spending usually picks up in the second half. There was no similar underspending of the budget for current expenditure. Mr Ng asked if the government would consider using the proceeds from the sale of subsidised housing to finance a housing foundation tasked to build more public housing. Mr Tam had replied that he would consider the proposal. Mr Chan said an education fund had already been established but that no money had been put into it so there was no schedule for the fund to get to work. Mr Ng said members of the assembly had asked the government to consider redirecting some of the Macau Foundation’s revenue into the Social Security Fund, to which the government did not have an
The government has generated 1 billion patacas in income by investing money from the fiscal reserve, secretary Francis Tam told legislators yesterday
immediate response. The government spent about 6.5 billion patacas in the first half on “social transfers” such as the cash handouts and the topping-up of the Social Security Fund. Revenue was 76.8 billion patacas in the first half, almost two-thirds of the amount budgeted for the whole year. Its expenditure was
20.8 billion patacas. The budget was 56 billion patacas in surplus by the end of June, 55 percent more than the budgeted surplus for the whole year of 36 billion patacas. The government collected 899 million patacas in special stamp duty on property transactions in the first half, 37 per cent more than its target for the whole year.
Chui fronts legislators in ‘question time’ today Chief Executive Fernando Chui Sai On will face questions from Legislative Assembly members on topics such as housing and the pension fund Xi Chen xi@macaubusinessdaily.com
Chief Executive Fernando Chui Sai On, left, last appeared in the Legislative Assembly back in April
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hief Executive Fernando Chui Sai On returns to the Legislative Assembly for the first time since the end of April to take questions from members later today. Assembly member Ho Ion Sang said Mr Chui would be asked about topics such as inflation, public
housing, education, health care and vehicle traffic. Housing is Mr Ho’s priority. He is deputy director of the Macau General Union of the Neighbourhood Associations. “Government policies have not been effective and housing prices remain too high for residents,”
Mr Ho told Business Daily. He is hopeful the government will restrict housing sales and limit purchases by overseas investors. Mr Ho said there should be more subsidised flats to supplement housing already available in the market. The legislative process and paperwork must be more efficient because legislation to regulate the property market has been discussed for years but never passed. Another assembly member, Chan Wai Chi from the New Macau Association, said he would also raise the question of administrative efficiency. Mr Chan said he would ask Mr Chui about improving the skills of the workforce. Above all, he said he most concerned about the sustainability of the pension fund, which is forecast to run out of money within 50 years if its structure does not change.
Handout doubt Social Security Fund vice-president Chan Pou Wan said the government was considering doubling the monthly contributions of employees
and employers alike. At present, employers contribute 30 patacas (US$3.80) a month and employees 15 patacas. Ms Chan also said the government was considering changing the ratio of employer contributions to employee contributions from two to one now to one to one by 2015. Mr Chui’s last appearance at the assembly was on April 26, when he said the government would put 4 billion patacas into the Social Security Fund this year and that he expected it would put in another 10 billion patacas in the next two years. The idea of a second cash handout this year has been mooted, but there is doubt about the government’s ability to amend the budget. Assembly member Kwan Tsui Hang told reporters last week that the chief executive had responded “positively” to the idea of a second cash handout this year. However, Secretary for Economy and Finance Francis Tam Pak Yuen has hinted that the odds are against a second cash handout because changing the budget would be too hard.
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business daily August 10, 2012
macau Brought to you by
HOSPITALITY Hospitality rising The number of hotels in Macau has grown substantially in recent years and there are several indicators to measure that development. In the past three years alone the number of hotels rose by more than 10 percent, to 95 at the end of the first quarter of this year from 86 at the beginning of 2009. Most of the new hotels were big and the increase in the number of rooms was even greater. Room inventory grew by 26.7 percent, to 22,270 from 17,577. The number of guests has risen quickly too, boosting the average occupancy rate by between 15 percentage points and 20 percentage points above the typical values three years ago. But there are two indicators that buck these positive trends.
Violent crime on the rise
No low-iodine milk in Macau
The number of violent crimes increased 17 percent in the first half of this year, particularly robbery and extortion cases, the Secretary for Security Cheong Kuoc Va said yesterday. Still, Mr Cheong brushed aside reports that triad activities were on the rise. “The police is keeping a very close eye on the criminal activities of organised crime groups. We have carried out many operations, both big-scale and targeted operations,” he said.
Hong Kong said yesterday it will test around 2,000 babies who have consumed two Japanese-made infant formulas found to have low levels of iodine, after the products were ordered off the city’s shelves. The move came after officials found the Wakodo and Morinaga formula brands lacked sufficient iodine, and warned they could have “potential adverse health effects” on babies’ thyroid glands and brain development. Macau authorities said the two brands are not on sale in the city.
Tam: Ours as big as theirs The government defends the size of the subsidised flats it is building, saying they are similar in size to dwellings built before 1999 Tony Lai tony.lai@macaubusinessdaily.com
90
80
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60
50
40
Most new hotels and new rooms were in the four-star and five-star categories. Catering to tourists that want to spend less on accommodation is still a marginal activity for the city’s hoteliers. In particular, the number of two-star hotels and guesthouses is small. If the demand for this kind of accommodation exists, the occupancy rates should be high. Occupancy rates for two-star hotels and guesthouses are consistently below the industry-wide average and drag it down. Assuming there is no under-reporting of occupancy, there are two possible, complementary explanations. First, the operating costs in Macau may be too high to make this type of accommodation viable. Second, visitors that wish to save money may actually stay in Zhuhai and cross the border in and out of the city.
1.55
1.50
1.45
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1.35
Another indicator that is stubbornly resistant to change is the average number of nights that guests stay. There has been some increases since 2009, which a bad year for the tourism sector. Give or take a few decimal points, it seems difficult to keep guests in Macau for much longer than 1½ nights. J.I.D.
The government has a glut of one-bedroom subsidised flats on its hands
T
he government rejected yesterday criticism that the subsidised flats it is building are too small for households on the waiting list. It also denied accusations that it is building a glut of one-bedroom flats so it can keep its promise to complete 19,000 public housing flats by the end of the year. Housing Bureau director Tam Kuong Man said the size of subsidised flats under construction now was comparable to the size of flats before the handover in 1999. “Not all the sizes of the subsidised houses built before the handover are better than what we have now,” Mr Tam told reporters during a visit to flats in Ilha Verde. “Some are similar to the present ones and some are even smaller.” Mr Tam said all 19,000 homes were being built in accordance with the new affordable housing law, which came into force last year. He said most were bigger than the minimum size set by law. It sets
Not all the sizes of the subsidised houses built before the handover are better than what we have now Tam Kuong Man, Housing Bureau director the minimum usable floor area of a one-bedroom subsidised flat at 25.5 square metres, of a two-bedroom flat at 33 square metres and of a threebedroom flat at 42.5 square metres. Mr Tam rejected accusations that the government had planned to build
an excess of one-bedroom flats as a way to keep its promise to complete 19,000 homes this year. “There are enough homes. There are problems in matching the applicants and the flats,” he said. The government said last month it would postpone the sale of more than 1,500 one-bedroom flats in the Seac Pai Van public housing complex because of weak demand. Community groups and members of the Legislative Assembly have harshly criticised the Housing Bureau for the over-abundance of single-room flats in Seac Pai Van. More than 5,750 households were on the waiting list for subsidised housing at the end of last month, but fewer than 330 had applied for a one-bedroom flat. “The government will not avoid tackling the [over-abundance of] one-room units,” Mr Tam said yesterday. “We will consider the next step for the one-room flats in the fourth quarter of this year.”
August 10, 2012 business daily | 5
MACAU
‘Scrap dismissal cap’ say trade unionists The workers federation hits the streets, seeking public support in its drive to raise compensation payouts for workers unfairly sacked Tony Lai tony.lai@macaubusinessdaily.com
T
he Macau Federation of Trade Unions is petitioning to remove the ceiling on compensation payouts to workers unfairly dismissed from their jobs. The labour relations law sets compensation at 14,000 patacas (US$1,750) and caps payouts at 12 times that amount or a maximum of 168,000 patacas. Association vice-president Ella Lei Cheng I (pictured) said the cap on workers’ payouts, that had not changed since 1997, was “unfair and unreasonable” because the economy had grown quickly. “It is not fair to people who have worked for over 20 years or more,” Ms Lei told Business Daily. “It is also not fair to workers, particularly in the gambling and transportation sectors, whose monthly salary is over 14,000 patacas. “The provision allows the government to adjust the limit according to the economy but the government has done nothing. So we are now gathering the support from the public and will present it [the signatures] to the government.” The trade union association, known as Kung Luen in Cantonese, believes the time is right to scrap the cap and Ms Lei urged the government to pay attention to “requests from society”.
Unfair and unreasonable is how the Macau Federation of Trade Unions sees the city’s compensation system for unfair dismissal
She said the Kung Luen had gathered signatures at meetings and public activities for a couple of weeks. Association members were out on the streets yesterday to collect additional signatures. There is no target for the number
of signatures it hopes to collect or deadline to submit the petition to the government. Legislative Assembly members representing the New Macau Association have submitted a revision of the law that would raise the
monthly amount to 28,000 patacas and remove the 12-times cap. Ms Lei said the union would rather the revision first be discussed in the Standing Committee for the Coordination of Social Affairs and only then proposed by the government.
Wing Hang records solid first half profit Vítor Quintã vitorquinta@macaubusinessdaily.com
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oans growth in Macau has helped Wing Hang Bank Ltd record a first half profit of 141.6 million patacas (US$17.7 million), its parent company announced yesterday. Macau-based Wing Hang delivered a “solid” 6.4 percent year-on-year increase in net profit it said in a filing to the Hong Kong Stock Exchange. First-half revenue of HK$241.1 million was down by 2.1 percent compared to the same period last year. The bank was able to turn an impressive 57 percent of income into profit. Operations in Macau accounted for 11 percent of Wing Hang Bank Group’s profit last year and 13.3 percent in the first half of this year. The bank’s 12 Macau branches increased assets held by 8.4 percent from the end of last year to HK$22.9 billion overall. The positive results reflect the city’s economic growth, which the bank said was robust, thanks to the continuous expansion of gambling and tourism. Gross Domestic Product surged by 18.4 percent in real terms in the first quarter.
Investment loan The volume of loans and mortgages have hit record levels in Macau, and loans from Wing Hang increased by 5.8 percent to HK$12.3 billion in the first six months of the year. About HK$13.8 billion was loaned to Macau ventures, 94 percent of which was backed by collateral. Loan growth in Macau helped offset
10th August 2012
the decline in loans made by the wider group. Loans destined for mainland investments declined by 9.8 percent, reflecting generally weaker demand. In May, financial consultancy Fitch Ratings affirmed Wing Hang’s Arating, the third-highest category, with a stable outlook. Fitch warned that increased mainland exposure, a reliance on mortgages and property-related businesses, as well as the bank’s relatively small market share would constrain future growth. Wing Hang has 3.8 percent of all assets in Macau’s finance sector. The group announced it has plans to expand its suite of yuan-linked investment products in Hong Kong and Macau to take advantage of “the immense and unprecedented opportunities arising from cross-border investment and business activities”.
In order to further enhance telecommunication services quality, CTM will conduct an upgrade and maintenance project to its Internet network on 11th August 2012 between 03:00 a.m to 07:00 a.m. During the aforesaid period, some customers in the districts near Ruínas de S. Paulo and Areia Preta may experience intermittent interruption on Broadband Internet service for 10 minutes. For enquires, please contact CTM No 1 Hotline: 1000. Thank you for your kind attention. We apologize for any inconvenience this may cause.
Companhia de Telecomunicações de Macau, S.A.R.L.
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business daily August 10, 2012
macau
Hengqin tempts SMEs with discounted rents
Brought to you by
Missing M1? Data published by the Monetary Authority of Macau says money supply in the economy keeps on rising. In the absence of major changes in payment patterns, that increase might be expected, given that prices are rising and nominal GDP is increasing. The most common measures of the quantity of money available in the economy, M1 and M2, however, display different trends.
A resort on Hengqin Island wants to offer small businesses attractive deals on commercial space Xi Chen xi@macaubusinessdaily.com
M1 measures the most immediate, liquid forms of payment available, including cash or demand deposits. It is sensitive to seasonal variation and sharp monthly oscillations. It has traditionally contracted in the second half of the first quarter, the period immediately after the festive season. In the two and half years shown above, monthly growth varied from minus 9 percent to 13.6 percent. A broader measure of money is M2, which includes assets that can be easily converted to cash, such as time deposits and savings deposits. It is far less sensitive to seasonal variation than M1, although February seems to be a favoured month for both to contract. It moves through a narrower growth range, from minus 2.5 percent to 6.5 percent. The overall trends are also noticeably different, with M2 growing much faster than M1. Chimelong’s theme park near Guangzhou opened in 2006
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Bearing in mind the public’s rising wealth, that difference is not surprising. What is unusual is its scale, especially when that the rate of growth of M1 is notably slower than either retail sales or private consumption, for example. Comparing the quarterly data, as monthly data is not available for all variables, we see retail sales and private consumption rising much faster. A possible explanation may lie in that Macau is becoming a de facto three-currency economy. But the data for M1 will not include the volume of Hong Kong dollars and yuan in actual circulation. J.I.D.
ore than 5,000 square metres of commercial space in the Chimelong International Ocean Resort on Hengqin Island will be offered at a discount to small and medium enterprises from Macau. The Chinese-language Macau Daily News quoted the director of the Hengqin New Area Administrative Committee, Niu Jing, as saying officials were discussing the offer and planned to release details soon. Mr Niu said commercial space would be mainly for shops, restaurants and cafes, and business services firms. The first phase of the resort, covering 4.35 square kilometres just west of Coloane’s Hac Sa beach, is due to open this year. It includes the 1,888room Dolphin Hotel, touted as the biggest hotel in China, and the Ocean Kingdom theme park. The resort will eventually have luxury hotels, business convention centres,
shopping malls and sports facilities. It will cost an estimated 20 billion yuan (US$3.1 billion) to build across three phases. The first phase alone will cost 10 billion yuan. Chimelong opened a theme park in Panyu District, Guangzhou, in 2006. Mr Niu said other parts of the Hengqin New Area had been developing rapidly since the first projects of a three-year development plan began there in 2009.
Red Bull shot He said it was an important year for the island, with the completion of the first phase of the Chimelong resort and of the new campus for the University of Macau. He made no mention of the cave-in on the construction site of the undersea tunnel that will link the new campus to Macau, which led to the suspension of construction work and may delay
the opening of the campus. Mr Niu said infrastructure development was progressing smoothly, with 13.5 billion yuan being invested. Work on the roads and buildings would be completed next year. He said a number of large companies, such as the China Communications Construction Co Ltd and Red Bull GmbH, were setting up offices on the island. Mr Niu said more than 180 companies had been registered on Hengqin since its electronic business registration system opened in May. He said the island had also attracted more than 10 billion yuan (MOP12.56 billion) in capital from 43 investment companies. The amount of cross-border yuan settlement business done there in the first five months of this year was 3.45 billion yuan, more than the amount done in the whole of last year.
Weather Beijing 33/23o C Changchun 27/16o C
Harbin 27/15o C
Xian 34/23o C Shanghai 32/27o C Chengdu 36/23o C Kunming 27/18o C Haikou 35/25o C Sanya 31/27o C
Guangzhou 33/25o C
MACAU (6-11 August) Day
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taipei
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August 10, 2012 business daily | 7
MACAU Eiffel Tower replica for Sands’ Cotai Lot 3 LVS draws up plans for scale version of famous Paris landmark Associate Editor
the top, like the original. The hotel tower at Sands’ neighbouring property The Venetian Macao is limited to 225 metres because of its proximity to the flight path of Macau International Airport.
Like Vegas
What happens in Vegas doesn’t always stay in Vegas
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as Vegas Sands Corp. is proposing to build a threequarter replica of France’s most famous landmark the Eiffel Tower, as the centrepiece of its latest Cotai project, known as Lot 3. Drawings have been prepared for the Cotai structure, and the construction materials needed have been identified. The original La Tour Eiffel in Paris, designed by French
engineer Gustave Eiffel, is made of iron, but for reasons of engineering, cost and climate, steel is considered the only practical solution for Cotai. The original tower is 324 metres (1,063 feet) tall – about the same height as the 77-storey Chrysler Building in New York City. Sands’ Eiffel replica is likely to be around 225 metres high, and is expected to house an observation deck near
Corporate
SJM awards new scholarships Sociedade de Jogos de Macau SA (SJM) awarded scholarships of 20,000 patacas (US$2,500) to 41 children of its staff in a ceremony held yesterday. Ten new scholarships were granted this year while 31 were renewed. “SJM will continue its tradition of nurturing talent for Macau, according to the principles of Dr Stanley Ho,” said SJM chief executive Ambrose So Shu Fai. The SJM Scholarship, established in 2005, is awarded annually to children of SJM’s staff to further their university studies. The awarding-winning students will receive 20,000 patacas per year until they complete their university studies. Since the establishment of the programme, SJM has offered scholarships to 79 students, of whom 38 have graduated.
Las Vegas already has its own replica of the Eiffel Tower at the Paris Las Vegas resort. Caesars Entertainment Corp., a rival to Sands China’s parent company Las Vegas Sands Corp., operates it. Nevada’s Eiffel replica and its accompanying casino opened on September 1, 1999 at a cost of US$785 million (6.3 billion patacas). The original plan there was to build a full-scale copy, but it was eventually constructed at half scale because of the proximity of McCarran International Airport. As the name suggests, the Paris Las Vegas resort also has a French theme in terms of its gaming floor, shops and restaurants. It’s not clear at this stage whether the rest of Sands’ Cotai Lot 3 would be given a French theme as a counterpoint to the Italian renaissance theming of Sands’ main Cotai property The Venetian Macao. In February an industry source told the newsletter of our sister publication Macau Business that Lot 3 would be “highly themed” but different from the neighbouring Venetian Macao. At that time it was suggested most of Lot 3’s planned 4,000 hotel rooms would be threeand four-star units. There would also be a separate tower for VIP gaming rooms and
Sheraton Macao tempts MICE Sheraton Macao is heavily promoting its meetings and conventions facilities ahead of the hotel’s official opening in September. The 3,863-room property is part of the second phase of Sands China’s latest resort Sands Cotai Central. The hotel is offering half day meeting deals starting at HK$450 per head or full day packages from HK$650 per head. In both cases there is no minimum headcount. Discounts are also being offered on the final bill for large groups providing guaranteed numbers of room check ins. Incentives are also being offered to meetings planners. The promotions all apply to events occurring between November 1, 2012 and December 31, 2013, and must be confirmed by December 31, 2012.
Autumn start Sands plans to start work on Cotai Lot 3 “by November” Mr Adelson said in a prepared statement in July. The news came only hours after the Macau government said it was imposing a 900,000 patacas (US$112,600) fine on LVS subsidiary Venetian Cotai Ltd for being unable to complete Lot 3 – also known as Parcel 3 or Cotai Plot 3 – by a previously agreed deadline of April 17, 2013. The government has given LVS an extension on the completion deadline to April 17, 2016. Paris Las Vegas in Nevada opened only months before the handover of Macau to China and the beginning of the casino market liberalisation plan in Macau that eventually led to three Las Vegas casino companies setting up business here. If Sands China’s Eiffel replica comes to fruition, it will be a further step in the process of turning Cotai – at least in terms of outward appearances – into the Las Vegas Strip. The original Eiffel Tower was built originally as a temporary structure for the World’s Fair held in Paris in 1889, and was due to be demolished after 20 years. It was kept on because of its usefulness as a telecommunications tower.
Adelson defamation claim v. Jewish political group
Strokes of genius in Venetian art show Central government officials joined Edward Tracy, chief executive of Sands China Ltd at the launch of the Masters in Ink exhibition at The Venetian Macao. It’s a selection of 90 of the most influential traditional Chinese ink paintings of the past hundred years by masters such as Qi Baishi, Wu Guanzhong and Li Kuchan, as well as influential contemporary artists including Liu Dawei, Du Ziling and Yang Lizhou. The collection has an estimated value of more than 80 million yuan. Many of the works in the exhibition have travelled with China’s cultural delegations to dozens of countries around the world. The paintings are on display free to the public in the Florence ballroom from noon to 8pm daily until August 21.
accommodation added Sheldon Adelson, LVS chairman and chief executive, in a conference call to discuss the company’s fourth quarter 2011 earnings. No comment was available from LVS on the Eiffel Tower plan at the time Business Daily went to press.
Sheldon Adelson of LVS – issued lawsuit over ‘prostitution’ claims
S
heldon Adelson, the chairman of Las Vegas Sands Corp., has filed a US$60 million defamation lawsuit against a U.S. Jewish political organisation. It accuses the group of spreading false allegations that he approved prostitution at his Macau casino resorts. The prostitution claims surfaced as part of a wrongful termination lawsuit brought in Nevada by Steve Jacobs, a former president of Sands
China Ltd, the company’s Macau subsidiary. Mr Jacobs contended in an evidentiary court filing in June that he had seen documents in which the LVS chairman “personally approved” a “prostitution strategy” at the company’s casino operation in Macau. Mr Adelson and LVS strongly deny the allegations. They were repeated in a July article posted on the National Jewish Democratic Council’s website titled “Tell Romney to Reject Adelson’s Dirty Money”. This was a reference to Mr Adelson’s financial support for Mitt Romney, the leading Republican Party contender for the U.S. presidential elections in November. Mr Adelson’s lawsuit, filed in the U.S. District Court in Manhattan, says the NJDC made “maliciously false and defamatory statements that conveyed to the public that Mr Adelson personally approved of and profited from prostitution” at his Macau properties. The NJDC, based in Washington, D.C., said in a statement that it will “not be silenced” by the lawsuit. Earlier this month, the Democratic Congressional Campaign Committee retracted statements linking Mr Adelson with funds it had said come from “Chinese prostitution money”. Mr Adelson’s attorneys had contacted the group demanding a retraction and apology. A.E./Reuters
8 |
business daily August 10, 2012
greater china Auto sales growth slows
Bo’s wife didn’t contest charges
Chinese demand for automobiles slowed further in July from the previous two. Industry-wide sales, including passenger cars and commercial vehicles, rose 8.2 percent to 1.38 million last month from a year ago, according to data released yesterday by the China Association of Automobile Manufacturers. That compares with relatively healthy gains of 9.9 percent and 16 percent in June and May, respectively. Vehicle sales in the first seven months came to 11 million, up 3.6 percent from a year earlier.
Gu Kailai, the wife of ousted Politburo member Bo Xilai, didn’t contest murder charges against her, Tang Yigan, vice president of the Hefei Intermediate People’s Court, told reporters yesterday. “The accused Gu Kailai and Zhang Xiaojun did not dispute the facts of the crime and the intentional homicide charge,” Mr Tang said. The verdict in the case of Mrs Gu, who is accused along with an orderly from her home of murdering British businessman Neil Heywood, will be announced at a later date, Mr Tang said.
China inflation at a 30-month low Unexpected factory slowdown raises pressure for easing Kevin Yao
KEY POINTS China July CPI up 1.8 pct from a year ago Consumer inflation at 30mth low, gives room for easing Industrial output +9.2 pct from year ago Fixed-asset investment at 20.4 in January to July Economic activity seen picking up modestly in July
China factory output grew at a three-year low
A
nnual growth in China’s factory output slowed to its weakest in more than three years in July, missing market forecasts and increasing expectations that Beijing will take further policy steps to support an economy that has been sliding for six straight quarters. Official data released yesterday also showed China’s annual consumer inflation fell to a 30-month low in July, suggesting that the central bank has ample scope to ease policy again after rate cuts in June and July to keep the economy on track to meet an official 2012 growth target of 7.5 percent. China’s economy faces powerful headwinds as the eurozone debt crisis and a sluggish U.S. recovery keep global growth at a low ebb, the main factor that pushed China’s new export orders in July into their steepest fall in eight months.
“The government underestimated the pace of slowdown and there needs to be more aggressive stimulating policies,” said Alistair Thornton, an economist at IHS Global Insight in Beijing. “The government has signalled that it’s taking a more aggressive line on stimulus measures ... But it’s yet to feed into the real economy, which is why we are seeing such weak activities data for July.” Hopes of further easing from China boosted riskier assets, with Asian shares rising to a threemonth high and the commoditysensitive Australian dollar testing a 4-1/2-month peak. China’s industrial output growth slowed to 9.2 percent year-on-year in July, its weakest since May 2009, down from 9.5 percent in June and below the 9.8 percent forecast in a Reuters poll. Annual growth in fixed-asset in-
vestment, in the likes of real estate, roads and bridges, came in at 20.4 in January-to-July, unchanged from the January-to-June period and just below the 20.5 percent forecast. Growth of retail sales, the biggest driver of the economy’s expansion in the first quarter, eased to 13.1 percent, short of the forecast of 13.7 percent. Economic growth has been sliding since the beginning of 2011, reaching 7.6 percent in the second quarter, the weakest pace since the global financial crisis.
Cooling prices The government is on track to ease policy to cushion the impact of the global downturn on the world’s second-largest economy, but needs to tread cautiously to avoid reigniting property sector risks and fuelling renewed consumer price rises. Annual consumer inflation eased to 1.8 percent in July from 2.2 percent in June, pulling back further from a three-year high last July of
6.5 percent, official data released yesterday showed. “This number gives more room for policy easing,” said Zhang Zhiwei, chief China economist at Nomura Inc. in Hong Kong. “It is now pretty clear that CPI will likely be below the official 4 percent target for the year, so the policy focus for the government can stay clearly on growth.” Consumer prices edged up 0.1 percent in July from the previous month, compared to expectations of a 0.1 percent drop. Still, there is little sign of inflationary pressures coming from factories. July’s data showed that producer prices fell in July by 2.9 percent from a year earlier, a sharper decline than the 2.5 percent forecast and the steepest fall since October 2009. It marked a fifth straight month of falling producer prices, reflecting the pressures eating into corporate earnings and capping capital spending. President Hu Jintao and Premier Wen Jiabao have promised to step up policy “fine tuning” in the second half of the year to support the economy. Apart from lowering interest rates, Beijing has also cut the amount of cash that banks must hold as reserves to free up an estimated 1.2 trillion yuan (US$191 billion) for lending in a series of moves since November 2011. Food prices rose 2.4 percent in July from a year earlier, cooling from 3.8 percent in June as pork prices tumbled 18.7 percent, while non-food inflation accelerated slightly to 1.5 percent in July from 1.4 percent in June. Rising global food prices will have limited impact on Chinese inflation, but volatile food prices could be a cause for concern. “Food price fluctuation could act as a drag on the further easing of China’s consumer inflation in August. But non-food prices will continue to fall on slowing growth,” said Li Wei, China economist at Standard Chartered Bank in Shanghai. “We will need to watch lending and activity data to see whether demand is recovering. If they disappoint, the possibility of another interest rate cut will increase greatly.” Reuters
Taiwan concerned Hon Hai over-paying Authorities seek more detail on Sharp deal
T
aiwan’s Economics Ministry, which vets all outbound investments, has asked Hon Hai Precision Industry Co. Ltd. for more detail on a planned tie-up with struggling Japanese TV maker Sharp Corp., saying an initial agreement looks expensive. The ministry’s investment commission said yesterday it had returned the company’s application to inject cash into Sharp, seeking more information on the deal’s likely returns. The move
could play in Hon Hai’s favour as it seeks to renegotiate better terms of a deal that was first struck in March. “We think Hon Hai has not explained enough about the investment efficiency of the deal, which is related to price ... the deal is a little pricey,” Emile Chang, deputy executive secretary of the commission, told Reuters. Hon Hai agreed in March to buy around a tenth of Sharp for US$844 million, or 550 yen per share, as part of a tie-up in liquid crystal display
(LCD) production. Both companies supply parts for Apple Inc. mobile devices. Since then, Sharp shares have tumbled to around 190 yen. Hon Hai needs the commission’s approval before it can invest in Sharp. The commission reviews all mergers and acquisitions involving foreign companies, and last year blocked a US$1.6 billion KKR-backed management buyout of electronics component firm Yageo. Reuters
Taiwan wants more detail on Sharp investment returns
August 10, 2012 business daily | 9
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10 |
business daily August 10, 2012
asia
Central banks refrain from adding stimulus BOJ cuts export, output views; Korean economy slows
Export pickup in both Korea and Japan seen moderating
T
he Bank of Japan kept monetary policy steady yesterday but cut its assessment on exports and output as companies feel the pinch from slowing global growth, signalling its readiness to expand stimulus again if risks to the outlook grow. South Korea’s central bank also kept interest rates steady yesterday to assess the impact of last month’s surprise cut, but investors continue to price in another reduction soon to shore up Asia’s fourth-largest economy. The Japanese central bank maintained its warning that the global economic outlook remained highly uncertain, with improvements in overseas growth seen limited in scope. “The pick-up in exports has moderated, while production has been relatively weak,” the BOJ said in a statement announcing its policy decision. That was a bleaker view than last month, when it said exports and output were picking up. As widely expected, the central bank kept its key policy rate in a range of zero to 0.1 percent and refrained from topping up the 70 trillion yen (US$890 billion)
target for its asset buying and loan programme. Pressure for immediate action has eased with the yen having barely moved after last week’s betterthan-expected U.S. jobs data, as well as decisions by the Federal Reserve and the European Central Bank to keep policy steady for now. Many BOJ officials likely felt that there is not enough evidence yet that slowing global demand is hitting exports hard enough to offset strength in domestic demand. “Japan’s economy has started to pick up moderately on firm domestic demand,” the central bank said, sticking to its forecast of a gradual recovery ahead.
Outlook murky Newly appointed members Takehiro Sato and Takahide Kiuchi joined the policy debate, bringing the ninemember board to full force for the first time since early April. Both of them, formerly prominent economists, have argued that the BOJ’s price forecasts are too optimistic and that there was more the bank can do, such as purchase foreign bonds.
Japan’s economy is set to outperform most other developed nations thanks to solid domestic demand, with the International Monetary Fund forecasting growth of 2.5 percent this year. Gross domestic product slowed to an annual 2.3 percent in the three months ended on June 30 from 4.7 percent in the previous quarter, according to the median estimate of 24 economists surveyed by Bloomberg News. Having loosened policy in February and April, the BOJ has stressed that it will act again only if risks heighten enough to force it to abandon its recovery forecast. It is counting on global demand for Japanese goods to pick up before the boost from spending for rebuilding from last year’s earthquake peaks. But a growing number of BOJ officials are now less convinced about the strength of the recovery. Manufacturing activity declined in July at the fastest pace since last year’s earthquake. Exports marked the first annual drop in four months and factory output unexpectedly dipped in June as slowdowns in Europe and
Noda avoids election push Japan sales tax bill may be approved as soon as today
J
apan is set to pass legislation to raise the sales tax after the main opposition party failed in a bid to force Prime Minister Yoshihiko Noda to set an election date in exchange for support on the bill. Speaking after meeting yesterday with Liberal Democratic Party head Sa-
dakazu Tanigaki and New Komeito leader Natsuo Yamaguchi, Mr Noda said the three agreed to pass the bill, which will double the tax to 10 percent by 2015, and to hold an election “soon” afterward. The LDP had demanded a more specific election commitment, which Mr Noda rejected.
“For the sake of Japan, we had to resolve this problem, so we held an earnest exchange of opinions,” Mr Noda told reporters. Mr Tanigaki confirmed the agreement, and Mr Yamaguchi said “it’s my understanding” that the LDP, the biggest opposition group, won’t follow through on a threat to submit a no-
China hurt demand. Japan’s core machinery orders rebounded in June but companies expect orders to slide in the third quarter, data showed yesterday, casting doubt on the strength of capital expenditure and adding to woes for Japan’s recovery prospects.
Rate pause
domestic demand stemming from mounting external uncertainties,” the BOK said in an English-language statement yesterday after the decision. The bank has come under pressure to shore up growth in Asia’s fourthlargest economy after gross domestic product expanded at the slowest pace in almost three years last quarter and inflation eased to a 12-year low. Finance Minister Bahk Jae Wan said this week that Europe’s woes are causing a global contraction, a view bolstered by the Bank of England paring forecasts for the economy on Wednesday and German industrial production falling more than expected. “The rate pause today raises the possibility of a cut next month,” said Sun Yoo, an economist at Woori Investment & Securities Co. in Seoul. “There is a shared understanding that the European fiscal crisis will be a lasting one and that a slowdown in the domestic economy needs some policy support.” Indonesia’s central bank also kept its policy rate unchanged yesterday, following strong second-quarter economic growth that lets it focus on how to stabilise the country’s currency. Bank Indonesia, after holding the rate at a record low 5.75 percent for a sixth straight month, said it believes the current rupiah level is “sustainable” until the end of 2012.
The Bank of Korea kept borrowing costs at a 14-month low after a surprise cut in July as policy makers await more data to gauge Reuters/Bloomberg the fallout from Europe’s sovereign debt crisis. Governor Kim Choong Soo and his board left the benchmark seven- Asian central banks keep d a y r e p u r c h a s e monetary policy steady rate unchanged at 3 percent. BOJ refrains from topping up The decision was asset-buying programme unanimous, Mr Kim told reporters. “ G r o w t h Export pickup moderating, m o m e n t u m , output weakening – BOJ as reflected in domestic economic Markets expect BOK to cut activity, appears to rate soon be slackening, on the sluggishness of Growth momentum ‘appears both exports and to be slackening’ – BOK
KEY POINTS
confidence motion against the government. Mr Tanigaki’s party, which helped push the bill through the lower house in June, has been seeking to capitalise on public discontent over Mr Noda and his Democratic Party of Japan by pushing for a snap election. The prime minister has staked his political future on the legislation, saying it must be enacted to address public debt that has swollen to more than twice the size of the economy. The bill could passed in the upper house as soon as today,
the Nikkei newspaper said. The yield on the 10-year benchmark Japanese government bond fell two basis points to 0.775 percent in early trading, after having risen to a one-month high of 0.81 percent yesterday amid concern that the bill would fail. “We think risk of a sharp yield upswing in the JGB market due to political disruptions has retreated following yesterday’s agreement,” Akito Fukunaga, chief rates strategist at RBS Securities Japan Ltd said in a report. Bloomberg
August 10, 2012 business daily | 11
asia Mitsubishi UFJ suspends third London banker
N.Z. Dollar falls as jobless rate climbs
Bank of Tokyo-Mitsubishi UFJ has suspended a third London-based banker in connection with a probe by U.K. authorities into the rigging of interbank lending rates. “One banker has been ordered to stay home,” said a bank spokesman, citing an ongoing investigation by authorities. The banker was in charge of submitting Libor rates. In July, the bank suspended two London-based traders due to the probe into the manipulation of interbank lending rates.
New Zealand’s dollar weakened for a third day after data showed the nation’s jobless rate rose to a two-year high. Statistics New Zealand said yesterday that the jobless rate increased to 6.8 percent from 6.7 percent in the first quarter. “The kiwi was already in the process of starting to correct downward over the past two days, so this will accelerate this downward correction,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp.
Australia jobless rate ticks down Market further pares probability of future rate cuts Wayne Cole
A
ustralian employment and domestically at least edged p a s t probably not in need of much expectations with a extra assistance right now,” rise of 14,000 in July while he said. the jobless rate surprised with The markets seemed to agree, a dip to 5.2 percent, leading nudging the Australian dollar investors to further pare the up to US$1.0582 while probability of more cuts in slightly widening the odds of a cut in rates from the interest rates. The rise in total employed Reserve Bank of Australia just beat forecasts of a 10,000 (RBA) anytime soon. increase, while analysts had Earlier this week, the RBA expected a jobless rate of 5.3 held rates at 3.5 percent for percent. Yesterday’s data from a second month and sounded the government also showed in no hurry to ease, saying the full-time jobs increased by full impact of past cuts was 9,200 in July, while hours still to be felt. The central worked in the economy rose bank has eased by 125 basis points since last November, a solid 0.8 percent. “The labour market has with the latest cuts in May ticked the box on the side and June. that says the glass is half full,” There have been signs the said Michael Blythe, chief economist at Commonwealth Bank Ltd. “It’s obviously generating just enough jobs, despite losses in some areas, to keep unemployment constant.” “The fact we seem to Australia’s jobless be tracking sideways rate in July just underlines the economy is in reasonable shape,
5.2 %
Full-time jobs increased by 9,200 in July
stimulus is working, with retail sales beating expectations in both May and June, house prices stabilising and home building approvals picking up. As a result the RBA is expected to revise up forecasts for economic growth this year when it releases its latest quarterly outlook on the economy today. Analysts suspect the forecast for growth over 2012 could be upgraded to around 3.5 percent, from 3.0 percent
previously, putting Australia far ahead of most of its developed peers. They have also been encouraged by a marked revival in migration, which rose to 185,000 in the year to June with most skilled workers arriving with jobs already waiting. There has also been signs of more expatriate Australians returning, perhaps to escape the gloom in Europe. The number of net permanent
and long-term arrivals to Australia hit a 29-month high of 283,330 in the year to June. “It’s clear that Australia will need to keep bringing in workers from abroad to address skill shortages,” said Savanth Sebastian, an economist at CommSec. “If population keeps lifting, courtesy of migration, then the potential growth rate of the economy will also lift.” Reuters
Nikon tumbles in Tokyo trading As it cut operating profit forecast by 5.6 percent
N
ikon Corp. shares fell as much as 12 percent yesterday, a day after the camera maker lowered its full-year operating profit forecast below market expectations to reflect a change in its foreign exchange rate assumption for the euro. Nikon, which competes with
Canon Inc. and Sony Corp. in digital cameras, cut its euro rate assumption to 100 yen from 105 yen for the year to nextMarch,causingittoreduce its annual profit projections, despite maintaining its product shipment forecasts for the period. The company, which also makes precision equipment, cut its operating profit guidance by 5.6 percent to 85 billion yen (US$1.08 billion) for its current business year, which is below an average estimate of 95.5 billion yen in a poll of 19 analysts by Thomson Reuters I/B/E/S. Shares of Nikon tumbled yesterday by as much as 11.9
percent to a six-month low of 2,001 yen, before trimming losses to close at 2,086 yen, down 8.11 percent. The euro has weakened against the yen in recent months in line with concerns over euro zone debt and is currently trading at about 97 yen. For the April-June quarter, Nikon booked an operating profit of 23.4 billion yen, a 36.7 percent year-on-year drop, due to the strong yen and sales expenses. The company maintained a sales forecast for 18 million compact cameras and 10 million interchangeable lens cameras in the business year. Last month, Canon also cut its full-year operating profit outlook citing the European recession. Reuters
Shares plunged as much as 12 percent yesterday
MARKETS Hang SENG INDEX NAME AIA GROUP LTD ALUMINUM CORP-H
PRICE
Day %
VOLUME
PRICE
Day %
VOLUME
26.85
0.6496306
14714879
CHINA UNICOM HON
12.42
1.305057
21378849
3.43
2.38806
16299783
CITIC PACIFIC
11.76
0.6849315
2536420
3
1.010101
299832327
CLP HLDGS LTD
67.45
0.8221226
2153174
5.33
1.52381
21469405
16
0.7556675
30263521
BANK OF CHINA-H BANK OF COMMUN-H BANK EAST ASIA BELLE INTERNATIO BOC HONG KONG HO
28.8
2.491103
3248262
COSCO PAC LTD
0.2739726
8213513
ESPRIT HLDGS
24.3
0.4132231
9307685
12.84
3.883495
12007331
CHEUNG KONG
111.1
1.553931
7319619
7.71
-2.15736
34899861
CHINA CONST BA-H
CNOOC LTD
14.64
CATHAY PAC AIR CHINA COAL ENE-H
NAME
5.35
0.5639098
193528938
CHINA LIFE INS-H
21.75
1.873536
34614278
CHINA MERCHANT
24.3
0.621118
1233593
Day %
60.95
0.6606111
3238376
SANDS CHINA LTD
25.45
1.8
12031191
SINO LAND CO
13.82
1.319648
7994828
SUN HUNG KAI PRO
101.9
1.696607
7530216
95.9
1.588983
1628942
1.697793
3090051
4815159
TINGYI HLDG CO
19.48
2.096436
4447522
2612029
WANT WANT CHINA
9.35
1.081081
8640520
WHARF HLDG
46.85
-0.2129925
4010818
2383722 21174799
HANG LUNG PROPER
27.7
1.838235
HANG SENG BK
112
2.096627
HENDERSON LAND D
47.75
0.844773
3452739
HENGAN INTL
71.95
-0.6901311
3040205
18
0
5546113
108.8
-0.2749771
5044601
HSBC HLDGS PLC
68.4
1.333333
17012223
HUTCHISON WHAMPO
70.1
1.520637
11896309
IND & COMM BK-H
4.58
0.4385965
178376414
SWIRE PACIFIC-A
MOVERS
41
6
2 20300
INDEX 20269.47
CHINA MOBILE
90.15
1.121705
9640526
CHINA OVERSEAS
18.08
2.262443
25365917
CHINA PETROLEU-H
7.39
0.8185539
79690791
15.98
3.096774
21585289
HIGH
20291.32
CHINA RES ENTERP
22.85
-1.93133
3139992
MTR CORP
27.7
0.9107468
1765831
LOW
19979.21
CHINA RES LAND
15.54
2.642008
9189000
NEW WORLD DEV
10.4
2.1611
12908124
CHINA RES POWER
15.62
0
4556958
PETROCHINA CO-H
9.81
0.6153846
92843750
CHINA SHENHUA-H
30.2
-0.6578947
13505245
PING AN INSURA-H
62.15
1.139138
7153865
LI & FUNG LTD
VOLUME
239.6
1.123596 3.392857
HONG KG CHINA GS
PRICE
POWER ASSETS HOL
TENCENT HOLDINGS
10.8 11.58
HONG KONG EXCHNG
NAME
52W (H) 21760.33984 (L) 16170.35
19970
7-Aug
9-Aug
Hang SENG CHINA ENTErPRISE INDEX PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.23
0.9375
79661801
CHINA PACIFIC-H
25.9
1.568627
10092215
YANZHOU COAL-H
AIR CHINA LTD-H
5.17
0.5836576
26011215
CHINA PETROLEU-H
7.39
0.8185539
79690791
ALUMINUM CORP-H
3.43
2.38806
16299783
CHINA RAIL CN-H
6.34
-1.552795
21.65
1.643192
10680566
CHINA RAIL GR-H
3.25
3
1.010101
299832327
CHINA SHENHUA-H
30.2
CHINA TELECOM-H
NAME
ANHUI CONCH-H BANK OF CHINA-H
NAME
PRICE
DAY %
VOLUME
13.32
-1.040119
19110274
ZIJIN MINING-H
2.68
1.901141
38901560
20039925
ZOOMLION HEAVY-H
9.73
4.287245
16153360
0.619195
26299293
ZTE CORP-H
12.02
4.703833
11801532
-0.6578947
13505245
5.33
1.52381
21469405
4.22
0
51266248
14.84
2.344828
2512740
DONGFENG MOTOR-H
11.56
-1.196581
17851062
4.1
1.736973
32688397
GUANGZHOU AUTO-H
5.98
3.819444
4853651
CHINA COAL ENE-H
7.71
-2.15736
34899861
HUANENG POWER-H
5.18
0.9746589
22640487
CHINA COM CONS-H
7.03
3.687316
23210089
IND & COMM BK-H
4.58
0.4385965
178376414
BANK OF COMMUN-H BYD CO LTD-H CHINA CITIC BK-H
CHINA CONST BA-H
5.35
0.5639098
193528938
JIANGXI COPPER-H
18.7
3.658537
23482361
CHINA COSCO HO-H
3.49
-0.2857143
15184429
PETROCHINA CO-H
9.81
0.6153846
92843750
21.75
1.873536
34614278
PICC PROPERTY &
8.83
2.436195
16909209
CHINA LONGYUAN-H
5.16
2.994012
7242000
PING AN INSURA-H
62.15
1.139138
7153865
CHINA MERCH BK-H
14.52
1.680672
15305226
SHANDONG WEIG-H
8.69
0.3464203
3368000
CHINA LIFE INS-H
NAME
MOVERS
33
6
1 10000
INDEX 9962.17 HIGH
9995.4
LOW
9797.32
CHINA MINSHENG-H
7.38
1.933702
25236678
SINOPHARM-H
23.8
-2.057613
3755414
52W (H) 11916.1
CHINA NATL BDG-H
8.36
2.325581
46550228
TSINGTAO BREW-H
45.6
2.242152
1611060
(L) 8058.58
CHINA OILFIELD-H
12.3
0.1628664
6468933
WEICHAI POWER-H
22.65
3.661327
2788235
9790
7-Aug
9-Aug
Shanghai Shenzhen CSI 300 NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.53
0.7968127
34423182
DAQIN RAILWAY -A
6.06
-0.1647446
20168963
AIR CHINA LTD-A
5.79
0.3466205
10220795
DATANG INTL PO-A
4.95
0.4056795
ALUMINUM CORP-A
6.17
-0.1618123
8834464
DONGFANG ELECT-A
16.66
15.16
0.7978723
12738907
EVERBRIG SEC -A
ANHUI CONCH-A
NAME
NAME
PRICE
DAY %
VOLUME
SAIC MOTOR-A
12.73
1.758593
16997251
2938523
SANY HEAVY INDUS
12.07
0.3325021
15357326
1.958384
11309844
SHANDONG GOLD-MI
35
0.6614898
7577129
12.61
-0.2373418
4733329
SHANG PHARM -A
11.28
0.7142857
13841914 32490296
BANK OF BEIJIN-A
7.56
0
8135668
GD MIDEA HOLDING
9.78
1.033058
9190725
SHANG PUDONG-A
7.75
0.2587322
BANK OF CHINA-A
2.76
-0.7194245
9235803
GD POWER DEVEL-A
2.64
0
19619833
SHANGHAI ELECT-A
4.41
0.4555809
5304490
BANK OF COMMUN-A
4.41
0.2272727
25987779
GF SECURITIES-A
14.19
0.3536068
16683113
SHANXI LU'AN -A
21.53
0.2794597
11782771
10.18
-0.4887586
15169056
GREE ELECTRIC
21.11
2.227603
8601651
SHANXI XINGHUA-A
0
11600863
GUANGHUI ENERG-A
13.29
3.263403
13348489
BANK OF NINGBO-A
39.23
3.591233
4201341
SHANXI XISHAN-A
14.8
0.135318
12325589
6791788
SHENZEN OVERSE-A
5.97
1.015228
38508365
39707853
SUNING APPLIAN-A
6.51
1.086957
44534733
2559833
TSINGTAO BREW-A
34.67
1.970588
2491877
1584017
WEICHAI POWER-A
24.04
1.008403
5659708
-1.830544
24837199
WULIANGYE YIBIN
37.46
3.911234
39202012
0.3138075
12578342
XIAMEN TUNGSTEN
47.52
3.169779
45328653
0.78125
19455126
YANGQUAN COAL -A
15.79
-0.1896334
14136638
3.76
-0.5291005
18648220
YANTAI CHANGYU-A
61.25
0.2454992
1900094
INDUSTRIAL BAN-A
12.7
0.3952569
24427646
YANTAI WANHUA-A
13.51
0.2225519
7189440
6059402
INNER MONG BAO-A
41.51
0.2899251
86256694
YANZHOU COAL-A
19.36
-0.5138746
3695783
19473829
INNER MONG YIL-A
19.52
3.664365
20440720
YUNNAN BAIYAO-A
62.54
3.184293
1947029
BAOSHAN IRON & S
4.24
BYD CO LTD -A
15.4
2.461743
12021229
GUIZHOU PANJIA-A
17.67
0.170068
CHINA CITIC BK-A
3.96
-0.2518892
6565252
HAITONG SECURI-A
9.83
-0.101626
CHINA CNR CORP-A
3.78
0.265252
16751539
HANGZHOU HIKVI-A
30.82
3.701211
CHINA COAL ENE-A
7.78
0
6654391
HENAN SHUAN-A
64.09
0.4545455
CHINA CONST BA-A
4.06
0.4950495
18851966
HONG YUAN SEC-A
18.77
CHINA COSCO HO-A
4.38
0.228833
5816707
HUATAI SECURIT-A
9.59
CHINA CSSC HOL-A
21.32
1.186521
4333145
HUAXIA BANK CO
9.03
CHINA EAST AIR-A
3.92
0.2557545
12275588
IND & COMM BK-A
CHINA EVERBRIG-A
2.78
0
17479930
CHINA LIFE INS-A
18.68
-0.2669514
CHINA MERCH BK-A
10.08
0.09930487
CHINA MERCHANT-A
10.98
0.733945
9211320
INNER MONGOLIA-A
6.06
4.482759
143966835
ZHONGJIN GOLD
22.3
0.2697842
8939961
CHINA MERCHANT-A
21.58
1.124649
17678594
JIANGSU HENGRU-A
30
3.199174
3430826
ZIJIN MINING-A
3.96
-0.2518892
47335661
CHINA MINSHENG-A
6.03
0.166113
36425324
JIANGSU YANGHE-A
147.96
4.189846
2649975
ZOOMLION HEAVY-A
9.86
1.440329
34816285
CHINA NATIONAL-A
6.62
2.795031
39460888
JIANGXI COPPER-A
22.08
0.09066183
10396965
11.77
2.526132
18590316
CHINA OILFIELD-A
17.39
2.899408
9107983
JINDUICHENG -A
12.76
-0.2345582
6320472
CHINA PACIFIC-A
21.45
-0.1396648
10657409
JIZHONG ENERGY-A
14.92
0.4037685
11875887
6.15
0.8196721
14703296
KANGMEI PHARMA-A
15.6
3.174603
13040089
KWEICHOW MOUTA-A
260.92
3.212025
3067240
5.22518
19187599
CHINA PETROLEU-A CHINA RAILWAY-A
4.71
0.4264392
8118711
CHINA RAILWAY-A
2.62
0.3831418
11621642
LUZHOU LAOJIAO-A
42.29
CHINA SHENHUA-A
22.75
0.308642
6017770
METALLURGICAL-A
2.34
0.4291845
14663837
NINGBO PORT CO-A
2.52
-0.3952569
9468490
ZTE CORP-A
MOVERS
237
CHINA SHIPBUIL-A
4.85
0.6224066
21607026
4.14
0
17444052
PANGANG GROUP -A
3.84
0
41049887
CHINA STATE -A
3.15
0.6389776
29129969
PETROCHINA CO-A
9.03
0.1108647
6573422
HIGH
2411.92
CHINA UNITED-A
3.75
0.8064516
38076191
PING AN BANK-A
15.04
0
8575072
LOW
2380.29
9
0.7838746
42220433
PING AN INSURA-A
44.66
0.6535948
14239012
6.55
-0.152439
10198114
POLY REAL ESTA-A
10.92
1.581395
39566632
CITIC SECURITI-A
12.24
0.2457002
38694047
QINGDAO HAIER-A
10.81
0.464684
9339943
CSR CORP LTD -A
4.35
0.6944444
14988782
QINGHAI SALT-A
35.4
-0.4219409
5732589
CHINA YANGTZE-A
14 2415
INDEX 2411.7
CHINA SOUTHERN-A
CHINA VANKE CO-A
49
52W (H) 2932.14 (L) 2254.567
2380
7-Aug
9-Aug
FTSE TAIWAN 50 INDEX NAME
PRICE DAY %
Volume
NAME
ACER INC
26.65
2.10728
18504021
FORMOSA PLASTIC
ADVANCED SEMICON
25.25
0.7984032
30687667
FOXCONN TECHNOLO
39.8
1.272265
9667339
ASIA CEMENT CORP
FUBON FINANCIAL
PRICE DAY %
Volume
84.5 -0.4711425
10001393
TAIWAN MOBILE CO
105
29885115
TPK HOLDING CO L
357 -0.2793296
30.8
4.40678
33627876
TSMC
82.3
UNI-PRESIDENT
277
1.094891
5963909
HON HAI PRECISIO
91
4.238259
77166257
8.92
1.594533
63779866
HOTAI MOTOR CO
220
0.6864989
1542134
CATCHER TECH
149
5.673759
29594332
HTC CORP
245
3.813559
15433435
CATHAY FINANCIAL
29.6
2.068966
26967263
HUA NAN FINANCIA
17.25
0.877193
CHANG HWA BANK
16.7
1.212121
15923545
LARGAN PRECISION
609
4.819277
CHENG SHIN RUBBE
74.9
1.490515
10123918
LITE-ON TECHNOLO
36
0.2785515
5635924
44337706
33.1
2.47678
18014541
16905785
YUANTA FINANCIAL
14.4
2.491103
32175146
3925370
YULON MOTOR CO
56.3
-0.177305
7619575
57116109
MEDIATEK INC
282
0
13266698
MEGA FINANCIAL H
23.7
1.716738
41932587
CHINA STEEL CORP
26.75
1.325758
25426718
NAN YA PLASTICS
60.9
2.352941
11073868
CHINATRUST FINAN
18.55
2.203857
39909225
PRESIDENT CHAIN
163
0.617284
2941001
89.8
1.354402
11852539
QUANTA COMPUTER
79.6
4.461942
17933011
28
6.870229
18179031
SILICONWARE PREC
33.45
0.1497006
11274201
DELTA ELECT INC
100.5
1.515152
6095307
SINOPAC FINANCIA
12.4
2.479339
30372283
FAR EASTERN NEW
34.35
0.4385965
11568520
SYNNEX TECH INTL
66.8
2.769231
8917739
71.7 -0.9668508
6443367
TAIWAN CEMENT
35.8
0.8450704
11170498
17.15
0.5865103
15476555
71.6
1.560284
6432343
28.65
2.321429
2334886
18.75
1.902174
61527963
80.5 -0.7398274
7198278
TAIWAN FERTILIZE
FORMOSA PETROCHE
88.9
4278199
TAIWAN GLASS IND
0.6795017
TAIWAN COOPERATI
20951891
WISTRON CORP
109587929
FORMOSA CHEM & F
54299876
1.996008
3.808181
FIRST FINANCIAL
8166972
2.236025 0.7843137
1.196953
FAR EASTONE TELE
7667923
51.1
9.3
COMPAL ELECTRON
Volume
12.85
7.36
CHUNGHWA TELECOM
0
6.190476
ASUSTEK COMPUTER
CHINA DEVELOPMEN
PRICE DAY %
111.5
AU OPTRONICS COR
CHIMEI INNOLUX C
NAME
UNITED MICROELEC
MOVERS
43
5
2 5110
INDEX 5106.9 HIGH
5106.9
LOW
4986.85
52W (H) 5621.53 4980
(L) 4643.05 7-Aug
9-Aug
August 10, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) galaXy eNtertaINMeNt
MelCo CroWN eNtertaINMeNt
MgM CHINa HolDINgS 27.6
20.3
12.5
27.5 20.2
12.4
27.4 27.3
20.1
12.3
27.2 Max 20.25
average 20.118
Min 20
last 20.25
20.
Max 27.5
SaNDS CHINa ltD
average 27.445
Min 27.2
27.1
last 27.2
Max 12.48
SJM HolDINgS ltD
average 12.374
Min 12.28
last 12.28
WyNN MaCau ltD 15.5
25.5
18.3
15.4
18.2
15.3
25.3
18.1
15.2
average 25.258
Max 25.5
Min 25.1
last 25.45
25.1
15.1 Max 15.46
average 15.374
Min 15.1
Commodities PRICE
DAY %
YTD %
(H) 52W
(L) 52W
WTI CRUDE FUTURE Sep12
93.75
0.428494912
-5.178517245
110.8699951
77.69999695
BRENT CRUDE FUTR Sep12
112.69
0.490458356
7.405642394
124.1999969
88.90999603
GASOLINE RBOB FUT Sep12
299.05
0.338880687
12.58141023
320.4399824
237.3699903
GAS OIL FUT (ICE) Sep12
957.5
0.078390384
6.536856745
1046.5
798.5
NATURAL GAS FUTR Sep12
2.907
-0.886464371
-11.45293938
4.630000114
2.221999884
HEATING OIL FUTR Sep12 METALS
302.7
0.368049339
6.25153568
332.9600096
251.5599966
Gold Spot $/Oz
1614.55
0.4748
3.1721
1921.18
1522.75
Silver Spot $/Oz
28.1375
0.9732
1.0868
44.2175
26.085
Platinum Spot $/Oz
1414.77
0.9483
1.4536
1915.75
1339.25
Palladium Spot $/Oz
588.34
0.5623
-9.9709
792.93
537.54 1832.25
LME ALUMINUM 3MO ($)
1915
0.288033517
-5.198019802
2476
LME COPPER 3MO ($)
7550
-0.395778364
-0.657894737
9304
6635
1869.5
-0.18686599
1.327913279
2311
1718.5
15740
-0.063492063
-15.87386424
22450
15236
15.67
-0.09563277
4.258150366
18
13.95499992
823.75
0.887936314
40.51172708
826.5
499
LME ZINC
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Sep12 CORN FUTURE
last 15.44
18.0 Max 18.26
average 18.190
last 18.26
Min 18.08
CURRENCY EXCHANGE RATES
NAME ENERGY
Dec12
WHEAT FUTURE(CBT) Dec12
PRICE MAJORS
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
DAY %
1.0589 1.5664 0.9733 1.2341 78.52 7.9895 7.7567 6.3593 55.225 31.5 1.2455 29.916 41.78 9478 83.143 1.20111 0.78785 7.8464 9.8596 96.9 1.03
YTD %
0.2746 0.0767 -0.1027 -0.1052 -0.242 -0.01 -0.0064 0.0315 0.344 0.0635 -0.0161 0.1705 -0.0981 0.0106 -0.5112 0.0067 0.1891 0.288 0.1116 -0.1342 0
(H) 52W
3.7222 0.7785 -3.6166 -4.7836 -2.0504 0.1264 0.1379 -1.0111 -3.9113 0.1587 4.1028 1.2134 4.9306 -4.3153 -5.6661 1.3055 5.7803 3.6679 4.9941 2.8483 0.0097
(L) 52W
1.0857 1.6618 0.9972 1.4549 84.18 8.0425 7.8098 6.406 57.3275 32 1.3199 30.716 44.35 9662 88.637 1.24736 0.88845 9.2841 11.6793 111.94 1.0311
0.9388 1.5235 0.723 1.2043 75.35 7.9823 7.7526 6.2769 45.1738 29.79 1.2001 28.792 41.57 8507 72.057 1.02566 0.77553 7.7018 9.6245 94.12 1.0288
MACAU RELATED STOCKS (H) 52W
(L) 52W
ARISTOCRAT LEISU
2.38
0
8.181816
3.25
1.88
1622299
153.6999969
CROWN LTD
8.53
-0.5827506
5.438811
9.29
7.45
1316917
920
0.711548987
27.77777778
953.25
629.5
SOYBEAN FUTURE Nov12
1587.75
0.411067194
31.84554702
1691.5
1115.75
COFFEE 'C' FUTURE Dec12
174.15
0.548498845
-26.20762712
285.6499939
NAME
PRICE
DAY % YTD %
VOLUME CRNCY
SUGAR #11 (WORLD) Oct12
21.21
0.568990043
-7.095926413
25.77999878
19.23999977
AMAX HOLDINGS LT
0.061
0
-29.88506
0.119
0.055
0
COTTON NO.2 FUTR Dec12
75.93
-0.092105263
-13.55874317
102.25
64.61000061
BOC HONG KONG HO
24.3
0.4132231
32.06522
24.45
14.24
9307685
0.234
0
1.739129
0.335
0.204
0
3.08
0.9836066
10
3.62
2.3
22000 25365917
CENTURY LEGEND CHEUK NANG HLDGS
World Stock MarketS - Indices NAME
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
13175.64
0.0534605
7.841828
13338.66016
10404.49
NASDAQ COMPOSITE INDEX
US
3011.25
-0.1528586
15.58836
3134.17
2298.89
FTSE 100 INDEX
GB
5846.2
0.004789665
4.915769
5989.07
4791.01
DAX INDEX
GE
6954.13
-0.1725487
17.89958
7194.33
4965.8
NIKKEI 225
JN
8978.6
1.097154
6.18839
10255.15
8135.79
CHINA OVERSEAS
18.08
2.262443
39.29122
19.16
9.99
CHINESE ESTATES
9.2
-1.287554
-26.4
13.68
8.3
882
CHOW TAI FOOK JE
9.78
-0.3058104
-29.74138
15.16
8.4
4583025
EMPEROR ENTERTAI
1.42
2.158273
27.92793
1.6
0.97
830000
FUTURE BRIGHT
1.04
0
147.6191
1.1
0.3
576000
20.25
1.351351
42.20506
24.95
8.69
8309282
112
2.096627
21.54096
116.7
84.4
2612029
24
2.12766
20.84592
24.658
18.56
1024814
68.4
1.333333
15.9322
71.8
56
17012223
HUTCHISON TELE H
3.74
0.5376344
25.08361
3.86
2.53
2748700
LUK FOOK HLDGS I
19.48
2.310924
-28.11808
46.15
14.7
2111200
MELCO INTL DEVEL
5.82
-1.020408
0.8665515
9.94
4.3
2089000
MGM CHINA HOLDIN
12.28
0.4909984
28.0213
15.276
7.6
3043023
4.27
0
7.990624
5.217
2.887
2196000
GALAXY ENTERTAIN HANG SENG BK HOPEWELL HLDGS HSBC HLDGS PLC
HANG SENG INDEX
HK
20269.47
1.01642
9.954655
21760.33984
16170.35
CSI 300 INDEX
CH
2411.7
0.9166058
2.811819
2932.14
2254.567
TAIWAN TAIEX INDEX
TA
7433.7
1.556053
5.113349
8170.72
6609.11
MIDLAND HOLDINGS
KOSPI INDEX
SK
1940.59
1.962979
6.290599
2057.28
1644.11
NEPTUNE GROUP
0.163
0
46.84684
0.205
0.08
8720000
S&P/ASX 200 INDEX
AU
4308.275
-0.0993841
6.205118
4448.5
3765.9
NEW WORLD DEV
10.4
2.1611
66.13418
10.96
6.13
12908124
ID
4131.17
0.989095
8.089446
4234.734
3217.951
SANDS CHINA LTD
12031191
FTSE Bursa Malaysia KLCI
MA
1642.52
0.4034427
7.303054
1647.94
1310.53
NZX ALL INDEX
NZ
797.743
0.07602206
9.309764
806.015
PHILIPPINES ALL SHARE IX
PH
3485
-0.9109933
14.44841
HSBC Dragon 300 Index Singapor
SI
589.7
-0.81
STOCK EXCH OF THAI INDEX
TH
1217.7
HO CHI MINH STOCK INDEX
VN
Laos Composite Index
LO
JAKARTA COMPOSITE INDEX
12.2
25.45
1.8
15.94533
33.05
14.9
SHUN HO RESOURCE
1.13
0
13
1.28
0.82
0
SHUN TAK HOLDING
2.72
2.255639
6.286192
4.148
2.241
11334201
700.441
SJM HOLDINGS LTD
15.44
2.251656
23.46532
18.798
10.079
6822425
3531.5
2695.06
SMARTONE TELECOM
16.32
0.8652658
21.42858
18.5
9.8
673257
18.81
na
na
WYNN MACAU LTD
18.34
1.438053
-5.948718
25.969
14.62
4795436
0.2940377
18.76292
1247.72
843.69
ASIA ENTERTAINME
2.93
4.270463
-50.17007
9.45
2.4
78449
426.98
0.8050617
21.45642
492.44
332.28
BALLY TECHNOLOGI
42.79
2.148484
8.164809
49.32
24.74
1080595
BOC HONG KONG HO
3.08
1.650165
28.4839
3.15
1.81
4500
1024.54
0.9021253
13.90612
1051.3
876.33
GALAXY ENTERTAIN
2.47
0
32.08556
3.24
1.08
100
INTL GAME TECH
11.23
-0.9700176
-34.70931
18.1701
10.92
5651734
JONES LANG LASAL
70.09
2.038142
14.41398
87.52
46.01
505011
LAS VEGAS SANDS
40.01
-1.11221
-6.36555
62.09
34.72
8523096
MELCO CROWN-ADR
10.47
-2.423113
8.83576
16.02
7.05
3763314
MGM CHINA HOLDIN
1.36
0
14.12333
1.9672
1.0025
13800
MGM RESORTS INTE
9.82
-2.579365
-5.848517
14.9401
7.4
12094051
14.24
-1.453287
21.5017
18.77
7.35
240884
1.91
0
18.81266
2.4557
1.2624
1000
102.71
0.06819953
-7.041359
154.7051
90.108
1353766
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business daily August 10, 2012
Opinion
America’s constrained choice
Mohamed A. El-Erian
CEO and co-CIO of PIMCO
T
he conventional wisdom about the November presidential election in the United States is only partly correct. Yes, economic issues will play a large role in determining the outcome. But the next step in the argument – that the winner of an increasingly ugly contest will have the luxury of pursuing significantly different policies from his opponent – is much more uncertain. By the time the next presidential term starts in January 2013, and contrary to the current narratives advanced by the Obama and Romney campaigns, the incumbent will find himself with limited room for manoeuvre on economic policy. Indeed, the potential differences for America are elsewhere, and have yet to be adequately understood by voters. They centre on the social policies that would accompany a broadly similar set of economic measures; and, here, the differences between the candidates are consequential. Whoever wins will face an economy growing at a sluggish 2 percent or less next year, with a nagging risk of stalling completely. Unemployment will still be far too high, and almost half of it will be hard-to-solve, longterm joblessness – and even more if we count (as we should) the millions of Americans who have dropped out of the labour force. The financial side of the economy will also be a source of concern. The fiscal deficit will continue to flirt with the 10 percent of GDP level, adding to worries about the country’s medium-term debt dynamics. The banking sector will still be “de-risking,” limiting the flow of credit to small and mediumsize companies and undermining hiring and investment in plant and equipment. And the household sector will be only partly through its painful de-leveraging phase. The policy front will be equally unsettling. Having dithered and bickered for too long, the US Congress will find it increasingly difficult to postpone action on these challenges. Meanwhile, the Federal Reserve’s unusual activism, including an ever-expanding list of experimental measures, will yield fewer benefits and entail growing costs and risks.
And, with headwinds from Europe and a synchronised global slowdown, the candidates will have no choice but to pursue, at least initially, similar economic policies to restore dynamic job creation and financial stability. In striking the right balance between immediate economic stimulus and medium-term fiscal sustainability, the most urgent step will be to counter properly the looming fiscal cliff, as temporary tax cuts expire and deep, across-the-board spending reductions kick in automatically. Failure to do so would significantly increase the risk of an outright American recession. Serious medium-term budget reforms are needed to deal with the legacy of repeated congressional failures. And, if provided with realistic numbers, the next president will soon recognise that the right mix of tax and spending reforms falls into a much narrower range than today’s competing political
Narrow economic choices The US economy will also be operating in a more difficult global environment. In the next few months, Europe’s debt crisis will most likely worsen. With emerging economies (including China) slowing, and with meaningful multilateral policy coordination remaining inadequate, protectionist pressures will mount as major trading powers compete for a stagnant pie. So, whether President Barack Obama or Mitt Romney prevails in November, the next president will be constrained by the twin need for urgent economic stabilisation and longer-term reforms.
The next president will be constrained by the twin need for urgent economic stabilisation and longer-term reforms
narratives suggest. It is certainly not an either/or proposition. Fiscal reforms work best in a dynamic economy. To this end, Obama and Romney will need to lift the impediments to growth and job creation. Here again – in areas like housing, the labour market, credit intermediation, and infrastructure – there is less room for manoeuvre than most politicians would like us to believe.
Real social choices But this does not mean that there is no scope for differences. There is, and they reflect the fact that general economic tendencies will be accompanied by multi-speed dynamics at many levels. From persistent differences in unemployment rates depending on skills and education to record-high income and wealth inequalities, each economic decision will be accompanied by the need for social judgment – whether explicit or, more likely, implicit – regarding its distributional impact. After an “age” of excessive leverage, debt creation, and credit entitlement that culminated in the 2008 global financial crisis, America still faces the tricky challenge of allocating cumulative losses that continuously inhibit investment, jobs, and competitiveness. Until now, Congress’s excessive political polarisation has translated into an approach that has pushed more of the burden of adjustment onto those who are less able to bear it. In an ideal world, America’s next president would rapidly embark on a two-step approach to restoring job dynamism and financial
soundness. First, he would devise a comprehensive set of economicpolicy initiatives that are both feasible and desirable – and, again, the scope for major differences here is limited. Second, he would accompany this with an explicit set of social policies – and here the potential differences are profound – that addresses the need for equitable burden-sharing. This is not really an election about such hotly-debated issues as outsourcing, tax increases versus entitlement reforms, government control of production versus unfettered private sector activity, or job creators versus free riders. It is much more about the accompanying concepts of social fairness, entitlement, equality and, yes, standards of behaviour for a rich and civilised society. This is an election about social responsibility – a society’s obligation to support those who are struggling, through no fault of their own, to find jobs and make ends meet. It is about protecting the most vulnerable segments of society, including by providing them access to proper health coverage. It is about reforming an education system that fails America’s young people (and about providing appropriate retraining to those who need it). Among the numerous issues of fairness and equality, it is about the rich giving back to a system that has brought them unimaginable wealth. It is here where the differences between Obama and Romney are important. The sooner the campaign debate pivots to this, the greater the probability that Americans will make a more informed choice and, thus, buy into the collective effort needed to escape national malaise. © Project Syndicate
editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Newsdesk Vitor Quintã (Chief Reporter) Tony Lai, Xi Chen Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, John Si, 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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August 10, 2012 business daily | 15
OPINION
Fixing the euro would wires be cheaper than Germans think Business
Leading reports from Asia’s best business newspapers
Jakarta Post
Bloomberg Editors
A satellite belonging to PT Telekomunikasi Indonesia (Telkom) has reportedly gone missing after a Russian-made rocket carrying the satellite malfunctioned during the launch process. The satellite, dubbed the Telkom 3, along with a Russian satellite, failed to reach orbit after jetting off from the Baikonur Cosmodrome in Kazakhstan on Monday night. Telkom is still awaiting “official confirmation” from their “Russian counterparts” on the incident. PT Telkom had spent roughly US$200 million launch the satellite. Novosti news agency reported that both of the satellites were insured.
G
Yomiuri Shimbun Fujifilm Holdings Corp. has proposed integrating its management with Olympus Corp., which is currently undergoing restructuring. The two companies are rival producers of medical endoscopes, and Fujifilm apparently intends to form one of the largest joint organisations in the high-tech medical equipment field. Terumo Corp., a major medical equipment company, has also proposed management integration with Olympus, while Sony Corp. has offered a capital and business alliance - indicating competition to do business with Olympus has intensified. Olympus has so far negotiated with several companies.
Lanka Business Sri Lanka will cut power for two hours and fifteen minutes during the daytime today owing to a breakdown in a Chinese build coal plant in the north-western region, the power ministry said in a statement released yesterday. The national grid has lost 300 megawatts of power since Wednesday morning due to the breakdown. Power cuts will be imposed in 58 key towns and villages islandwide starting from 8.30 am in the morning on Thursday. The statement didn’t specify whether the cuts would continue beyond today.
Business Times GlaxoSmithKline Consumer Healthcare (GSK) expects to attain this year more than 10 percent growth over the RM400 million (US$129 million) sales posted last year. Its two bestselling products, accounting each for more than a quarter of its revenue, are pain reliever Panadol and its fruity drink, Ribena. On Tuesday the group launched a pre-paid card for the Panadol “Be Prepared” campaign in collaboration with Touch ‘n Go. The campaign targets 50,000 consumers to take up the limited edition’s co-branded card. They will be handed out at highway toll plazas.
ermany’s leaders are loath to do what it takes to save the euro, in large part out of the not unreasonable fear it will cost their country too much. By our calculations, their concerns are misplaced. Time and again, efforts to contain Europe’s worsening debt, banking and economic crises have run into the same obstacle. Any credible solution requires a commitment by euro-area governments to back one another’s debts and help one another through hard times. Yet the wealthier countries, and Germany in particular, reject measures that hint at transfers of money – instead of loans – to struggling states such as Greece and Spain. They assume they would be dragooned into supporting weaker economies forever. It’s easy to understand why the Germans are worried. The experience of the U.S., the world’s largest currency union, suggests fiscal transfers can be very expensive for individual members of the union. The relatively affluent state of Connecticut, for example, has in some years sent as much as 8 percent of its gross domestic product to poorer states. The payments, made largely through the federal income tax system, serve both to equalise levels of income across the U.S. and to cushion regional downturns. States in recession, for example, receive transfers large enough to offset as much as 40 percent of their loss in income.
Risk sharing Like it or not, the euro area will need a similar risksharing system. Economists have long warned that the member countries’ economic cycles are too far out of sync to coexist without some kind of stabilising mechanism. Inflation and unemployment rates diverge wildly, and European workers aren’t mobile enough to compensate by moving to where the jobs are. So what would it cost to turn Europe into a better fiscal union? Let’s try a thought experiment. The first step is to figure out what kind of fiscal transfer system best suits the euro area. Equalising income levels need not be the goal – trade and investment can play that role. What matters for the currency’s viability is diverging growth rates. So, the transfers should be aimed at smoothing them out. To get a sense of how this could work, imagine a fictional European Stabilisation Fund. Countries experiencing relatively fast growth (more than 2 percent, adjusted for inflation)
would contribute to the fund. Countries in recession would receive payments equal to 40 percent of their loss in income, a cushion at least as generous as that in the U.S. If the 12 countries that have been in the euro since 2001 all participated in such a fund, how would it have worked out? Based on the economic performance of the 12 countries, it’s possible to come up with an answer. The results are surprising. From 2001 through 2012, a period that included one of the worst recessions on record, the contribution required from the fast-growing economies to keep the fund above water would have been only 0.64 percent of their gross domestic product. Germany grew fast enough to qualify as a contributor in only four of the 12 years, so its average payment would have been a meagre 0.03 percent of GDP – a total of about 11 billion euros (US$13.6 billion) for the whole period. In the recession year of 2009, Germany would have received a stimulus equal to 2 percent of GDP, more powerful than the programme the U.S. put in place that year. Spain, not Germany, would have been the biggest net contributor in euro terms, putting in more than 14 billion – a function of its real-estate boom in the first part of the decade. France would have come in second at nearly 13 billion euros. Greece would have been a contributor in most years; ultimately, it would have received a net 5 billion euros, mostly in 2011, a year it desperately needed the help.
Mitigating booms In other words, history tells us there’s no reason to believe that a deeper fiscal union would entail constant support from Germany to peripheral countries such as
Economists have long warned that the member countries’ economic cycles are too far out of sync to coexist without some kind of stabilising mechanism
Greece and Spain. Money would flow in all directions, and the transfers could go a long way toward mitigating booms and busts. Starting such a fund today would not be much more difficult than it would have been in 2001, even though harsh austerity measures have snuffed out growth in most of the euro area. Based on the International Monetary Fund’s growth forecasts, a newly created stabilisation fund would have to borrow about 10 billion euros to cover payments for this year and next. It would have enough contributions to pay the borrowed money back by 2015. The exact cost and impact, of course, would depend on how European leaders chose to design the transfer mechanism. We favor a euro-area unemploymentinsurance fund, which would make payments directly to the jobless in hard-hit countries. In return, workers could be required to sign more flexible employment contracts, encouraging the kind of labourmarket reforms needed to make the region’s struggling economies more competitive. Such a mechanism, according to one of its designers, Jacques Delpla of France’s Conseil d’Analyse Economique, might cost as much as 1 percent of GDP for contributing countries. Fiscal transfers aren’t the only form of risk-sharing
needed to make the euro area work. To get past the current crisis, euro-area nations must also take on some collective responsibility for government debts, a move that would probably require Germany to pay a higher interest rate on its portion of the debt. Here, too, Germany’s burden might not be very large. A European Commission report, for example, suggests the country’s borrowing costs could be about half a percentage point higher. On a German net debt load of about 2 trillion euros, that amounts to 10 billion euros a year, or 0.4 percent of GDP. There are signs that a shift might be taking place in Germany. The opposition Social Democratic Party signalled its support for a tighter fiscal union. The move is an acknowledgment of something that’s been too clear for too long: the euro area’s approach to solving its problems isn’t working. European governments and the ECB have lent more than 2 trillion euros to support struggling member countries, while imposing austerity measures that are serving only to make the situation worse. If the euro falls apart, they stand to lose much of that money. Doing what it takes to make the currency union viable looks like a much better option. Bloomberg View
16 |
business daily August 10, 2012
CLOSING Oil demand growth to slow – OPEC
U.S. jobless claims fall
World oil demand growth could fall short of forecasts next year, exporter group OPEC said yesterday, citing a vague and turbulent outlook for the global economy. The Organization of the Petroleum Exporting Countries said it expected world oil demand to expand by 810,000 barrels per day (bpd) next year, unchanged from its previous forecast, although the odds suggested demand could undershoot. “The gloomy picture could reduce the world oil demand growth forecast by 20 percent next year,” OPEC said in a monthly report.
Fewer Americans filed applications for unemployment benefits last week, a sign the labour market may keep improving after employment picked up in July. Jobless claims unexpectedly dropped by 6,000 to 361,000 last week, Labor Department figures showed yesterday. Meanwhile, the U.S. trade deficit in June was the smallest in 1-1/2 years, according to government data yesterday that suggested an upward revision to second-quarter growth. The shortfall on the trade balance narrowed 10.7 percent to US$42.9 billion, the smallest since December 2010, the Commerce Department said.
China, Taiwan ink investment protection pact Vowed to offer ‘just and fair treatment’ to investors
Signing of the new pact marks closer commercial ties
T
aiwan and China signed an investment protection pact and a customs cooperation agreement after the eighth round of cross-strait talks yesterday. Chiang Pin Kung, head of Taiwan’s Straits Exchange Foundation (SEF), and Chinese counterpart Chen Yunlin signed the agreement after closed-door discussions in Taipei. The two sides have signed 16
agreements since Taiwan President Ma Ying Jeou took office in 2008 and dropped his predecessor’s proindependence stance. Under the agreement, Taiwanese and Chinese companies will be able to settle disputes through an institutionalised framework and protect the safety and property rights of investors, a statement on the SEF website said.
“It’s extremely important not only for Taiwan’s investment and trade links with the mainland, but also for bilateral ties as a whole,” Mr Chiang told reporters after signing the agreement. “It will also provide different ways to protect Taiwan’s business interests in the mainland when disputes take place.” The agreement includes safeguards against sudden expropriation of property and also gives individual investors some protection in the case of legal problems with authorities. The pact covers Taiwan companies investing directly or indirectly in China, and if any Taiwan investors or their employees and dependents are detained, the Chinese authorities must notify the family members within 24 hours, according to the statement. The customs operation agreement will help to accelerate clearance and stop smuggling, according to the statement. China is Taiwan’s largest trading partner and investment destination, with Taiwanese businesses having invested an estimated US$200
billion in the mainland. But those who oppose closer ties with China fear the pacts will strengthen Beijing’s hold over the island. Protesters have been tailing Mr Chen since his arrival on Wednesday. Police estimated close to 700 people gathered in the streets of Taipei yesterday. “I oppose the deals because China is trying to control Taiwan’s economy so it can rule Taiwan,” said protester Chen Che. “The deals have political purposes and they are steps towards unification. I’m worried about Taiwan’s future if the government sells out to China like this. Without democracy we have nothing.” Tensions have eased since Mr Ma made economic relations with the mainland the government’s priority. Talks resumed in 2008 after a nineyear halt that was sparked by former Taiwan president Lee Teng Hui’s description of the talks as “state-tostate,” a term Beijing rejected. The two sides signed an Economic Cooperation Framework Agreement in June 2010, after they resumed direct flights, shipping and postal services. Bloomberg/AFP
Standard Chartered begins fightback CEO says ‘no grounds’ to revoke licence
S
tandard Chartered Plc chief executive Peter Sands hit back at a New York regulator’s claims the bank broke U.S. sanctions, and said he saw “no grounds” for revoking the lender’s licence. Standard Chartered has tumbled about 16 percent in London trading this week after New York regulator Benjamin Lawsky threatened to strip the London-based bank of its licence to operate in the state, alleging it processed US$250 billion of deals with Iranian banks subject to sanctions. “We reject the position and portrayal of facts by the Department of Financial Services,” Mr Sands said on a conference call with reporters, his first public comments since the regulator’s report on August 6. “It would be disproportionate and wholly inconsistent with the actions of other U.S. authorities in other sanctions matters” to revoke the bank’s New York licence, he said. The dispute is becoming increasingly political. Mayor of London Boris Johnson yesterday accused New York of seeking to damage its biggest
competitor as a financial centre, while Bank of England Governor Sir Mervyn King criticised the regulator for failing to co-ordinate with its counterparts. The stock rallied 3.9 percent to 1,367 pence by 9.23am in London, after gaining 7.1 percent on Wednesday. The shares fell 16.4 percent on August 7. The stock jumped 4.3 percent in Hong Kong trading yesterday, to close at HK$166. The loss of its New York licence would significantly damage Standard Chartered’s corporate banking model and could result in a 40 percent drop in earnings, said Chirantan Barua, an analyst at Sanford Bernstein Research in London. Mr Sands said the probe has been “very damaging” to the British lender’s brand and denied that there was anything wrong with the bank’s culture. He added that none of the transactions reviewed by the bank were linked to terrorist organisations. The investigation is focusing on socalled U-turn transactions, which could allow an Iranian bank to access
Standard Chartered rejected claims from New York’s banking regulator
the U.S. banking system indirectly through a third-party bank. “There are lots of matters in that order that frankly either we don’t
recognise or we don’t understand or are factually inaccurate,” Mr Sands said, referring to the report. Bloomberg