Jobs – but no workers
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Help the aged: near to home
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Bus subsidy hike efficiency-linked
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Ao’s shadow lingers as HK group drops lakeside plan H
ong Kong developer China Star Entertainment Ltd has dropped its interest in developing a plot linked to jailed Ao Man Long, a former secretary for Transport and Public Works. It comes only weeks after another Hong Kong developer, Chinese Estates Holdings Ltd, saw its La Scala scheme for luxury flats near Macau International Airport collapse in the wake of Ao’s third and final trial for corruption. The latest case involves a project originally approved by Mr Ao in 2005 – against expert advice and in return for a bribe – for a 122-metre high (400 feet) building next to Nam Van Lake. Mr Ao was arrested for corruption a year later. Two administrators of the land concessionaire in that case – Legstrong Construction and Investment Co Ltd – were
also found guilty. China Star says the reason for dropping the scheme is because the area still has no urban planning that could allow for an upgrade from the original 30-metre-high project. But it hinted it was still hoping to get approval for a skyscraper. China Star had agreed to buy the plot for HK$900 million (US$116 million) from Legstrong, now controlled by China Star company executive director Tiffany Chen Ming Yin. Ms Chen is the wife of Hong Kong film producer Charles Heung Wah Kueng, also a China Star director and whose family reportedly has links to Chinese triads. The earmarked cash was instead used to gain full control of Macau hotel-casino Lan Kwai Fong, with China Star buying a 49 percent stake controlled by Mr Heung. More on page 3
I SSN 2226-8294
Brought to you by
HANG SENG INDEX 19840
Portugal choses Beijing over Macau
19810
Portugal intends to build a logistics and distribution centre in Beijng for its China exports. An earlier plan, signed more than five years ago proposed putting the same facility in the Zhuhai-Macau Cross-Border Industrial Park, but that facility has since been a commercial flop. Portugal and China grew closer in their commercial relationships recently as the former seeks investment to revive its debt-ridden economy. Page 2
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HSI - Movers
Super Wednesday looms for AL
Name
The Legislative Assembly will vote on a bumper crop of new laws today in an effort to complete its business before the summer recess. They include political reform, legal aid and central savings scheme accounts. The governmentbacked political reform bills will need the votes of at least two-thirds of the 29 members. The assembly postponed its original summer break by two weeks. Page 2
Some public servants more equal than others
%Day
WANT WANT CHINA
2.94
SANDS CHINA LTD
2.21
ESPRIT HLDGS
1.81
BANK OF COMMUN-H
1.75
HENGAN INTL
1.16
HENDERSON LAND D
-1.33
WHARF HLDG
-1.41
CHINA OVERSEAS
-1.65
CITIC PACIFIC
-2.19
CHINA MERCHANT
-2.29
Source: Bloomberg
Macau’s 26,000 civil servants – that’s one administrator for every 21 inhabitants – are to have their employment terms reviewed. The aim is to level the distinction between appointed and contracted staff. The latter get better terms. The public service payroll soared by onethird from 9.28 billion patacas (US$1.16 billion) in 2010 to 12.59 billion patacas this year. Page 3
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Year I - Number 108 Wednesday August 29, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00
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business daily August 29, 2012
macau
Portugal prefers Beijing over Macau Lisbon’s trade agency plans logistics centre for Portuguese goods in Beijng, casting long shadow over a similar project planned here Xi Chen
xi@macaubusinessdaily.com
P
ortugal’s investment and trade agency has signed an agreement with state-owned conglomerate Nam Kwong (Group) Co Ltd that could see a logistics and distribution centre planned for Macau, shift to Beijing. Portugal’s AICEP – Trade & Investment Agency confirmed yesterday it reached a deal with Macaubased Nam Kwong on July 23 to create a business plan and feasibility study for a logistics and distribution centre in Beijing for Portuguese products. “The agreement signed was for a new project in Beijing. It was proposed by Nam Kwong, and gladly accepted by AICEP,” AICEP’s director for Macau and Hong Kong Mariana Oom, told Business Daily yesterday. More than five years ago, the two
parties proposed a similar project for the Zhuhai-Macau Cross-Border Industrial Park. The plan has stalled, with the two parties unable to agree on a workable business plan, according to news reports. Ms Oom did not clarify if the Portuguese trade body was still involved or interested in the plan for the cross-border zone or if it had been scrapped, opting instead for Beijing. The cross-border industrial zone has performed badly since its inception and is currently in the process of being revamped into a duty-free zone for imported goods. Portugal and the mainland have grown much closer over the past 12 months, as Lisbon seeks to breathe life into its debt-ridden economy with mainland investment.
At the end of last year, China Three Gorges Corp bought a 21 percent stake in Energias de Portugal SA (EDP) for 2.69 billion euros (27 billion patacas). A few months later, State Grid Corp of China bought a 25 percent stake in Redes Energeticas Nacionais SA (REN) for 387.2 million euros. EDP is a top provider of power and REN is Portugal’s leading operator of power and gas networks. “The recent participation of Chinese companies in the privatisation of EDP and REN are a good sign of mutual trust and openness of both nations to do business together,” Ms Oom said. “We hope to keep this pace, and further strengthen our friendship and economic relations.”
The agreement signed was for a new project in Beijing. It was proposed by Nam Kwong, and gladly accepted by AICEP Mariana Oom, AICEP’s director for Macau and Hong Kong
Assembly set to pass political reform bills Legislators are due to give their final approval to government-backed political reforms today Vítor Quintã
vitorquinta@macaubusinessdaily.com
W
ith its summer break looming, the Legislative Assembly will vote today on political reform, legal aid and central savings scheme accounts. The government-backed political reform bills will need the votes of at least two-thirds of the 29 members of the assembly. The reforms were announced by Chief Executive Fernando Chui Sai On just nine months ago. Once enacted, they will give the assembly two more directly-elected seats and two more indirectly-elected seats after the elections next year, and increase the number of members of the committee that elects the chief executive to 400 from 300. The limited scope of the reforms has disappointed some people but the government has amended the bills to make it clear that further revision of the assembly’s make up is possible after next year’s polls. The government has promised to set up “a specialised working group” to follow up a suggestion by a member of the assembly to allow the public to vote
KEY POINTS Government to form working group on further political reform Non-residents could receive central provident fund accounts Already small legal aid budget to shrink
account only when they reached the age of 22. The committee failed to lower the qualifying age to 18.
Lagging behind
The Legislative Assembly will fail to finish all the work on its agenda in this current session
directly for members of the committee that elects the chief executive. Legislators belonging to the New Macau Association, the pandemocrats, interrupted voting on the reform bills last month but seem intent on taking another tack this time. The association has called for the public to send in their views on political reform and will display their messages on the façade of the old Nam Van court building this evening.
Catch up The assembly postponed its summer recess for two weeks to work through a backlog of bills. Part of the backlog is a bill on personal accounts in the central provident fund. If enacted, its provisions will form the basis of the savings scheme, which is part of a two-tier social security system envisaged by the
government to provide for residents in their retirement. The social security system would be voluntary, and open only to residents aged 18 or older, but a more comprehensive proposal being prepared by the government could include nonresident workers in the fund. In its report on the bill, the assembly’s third standing committee says the law does “not prevent other groups of people, namely nonresident workers, from being allowed to open individual accounts, when the central provident framework is written down”. Members of the assembly warned the government that denying residents eligibility for government contributions to their accounts if they stayed in Macau for fewer than 183 days in the preceding year could violate the Basic Law. Members also said it was discriminatory to activate a resident’s
Once the system is approved, the deposit protection scheme coming into effect in October must be revised to ensure that the full amount of central provident fund money deposited in banks is covered, not just the first 500,000 patacas (US$62,600). The third piece of legislation up for a vote today would limit the circumstances that qualify individuals and institutions for legal aid. The legal aid amendment bill would make commercial companies and private firms involved in any kind of case and individuals involved in criminal cases ineligible for aid. The bill would bring the scale of fees paid to lawyers up to date, but the assembly’s second standing committee said it could reduce the already small amount the government spends on legal aid. The government has not told the assembly how much it spends on legal aid. Business Daily sought comment from the Legal Affairs Bureau but did not receive a reply before going to press last night. Despite the postponement of the summer recess for two weeks, the assembly will fail to finish all the work it was meant to complete in this session. The bill on estate agencies and a bill mandating that senior officials make declarations of their assets will have to wait for the new session in October.
August 29, 2012 business daily | 3
MACAU
China Star gives up on Ao-related plot Ao Man Long casts lengthy shadow as Hong Kong firm drops Nam Van Lake plan Vítor Quintã
vitorquinta@macaubusinessdaily.com
Former secretary Ao Man Long approved the construction of a 122-metre high building in a Nam Van Lake plot
H
ong Kong company China Star Entertainment Ltd has dropped out of a deal to develop a Nam Van Lake plot linked to the Ao Man Long corruption scandal. It said the reason is the government still has no urban plan for the area. China Star told the Hong Kong Stock Exchange last week it had agreed on February 15 to cancel an agreement to buy the land from company executive director Tiffany Chen Ming Yin. In the agreement signed in 2009 the group pledged to pay Ms Chen a total of HK$900 million (US$116 million) for two companies that indirectly own 75 percent of the Nam Van land parcel. But one of the conditions to complete the deal was the publication by the government of a master zoning guideline for the lake area. The guideline would then determine whether an amendment to the 2001 land grand requested
by the developer, Legstrong Construction and Investment Co. Ltd, would be approved. In the third quarter of 2010, the administration invited Macau citizens to submit their conceptual planning proposals for the Nam Van area as a whole. “Afterwards, the Macau government has not yet issued any update on the master zoning guideline,” China Star bemoaned. And “it did not appear that the master zoning guideline for the Macau land would be issued anytime soon,” the company added. China Star had already extended the deadline to complete the purchase to the end of this year but eventually decided to terminate the deal The money was instead used to gain full control of Macau hotel-casino Lan Kwai Fong, by paying HK$618 million for the 49 percent stake of company director Charles Heung Wah Kueng, Mrs Chen’s husband.
Civil servants await equal rights pledge The government has drafted a vague set of rules for employing civil servants Tony Lai
tony.lai@macaubusinessdaily.com
D
raft rules for the employment of civil servants will be circulated to government departments and associations later this year, the Public Administration and Civil Service Bureau has said. The bureau’s director, José Chu, said in a written reply this month to an inquiry by Legislative Assembly member Kwan Tsui Hang that a draft had been completed and it was under revision after collecting feedback. The government expects the new
rules to level the playing field for civil servants. Civil servants now fall into one of two categories: they are either appointed or contracted. The government says there were more than 26,000 civil servants on the books in March. About 12,200 were appointed and the rest contracted. Ms Kwan said in her inquiry that a common set of standards was lacking in the public sector as all civil servants had the same obligations but some
Mr Heung is a former Hong Kong actor who later became a film producer.
Corruption focus The Nam Van plot known as C7, located close to the Legislative Assembly, was part of a land swap deal that allowed the government to acquire and later restore the Mandarin’s House; an historically important building thought to have been built in the reign of the Emperor Tongzhi in the 19th century. According to the 2001 Nam Van concession contract, Legstrong was allowed to build a residential and commercial building with a total area of almost 30,000 squares meters on the 4,669-square-metre plot. The company would have paid an annual rent of 140,000 patacas during the development of the plot, which should have been completed in 2006. But in 2010 Macau’s top court
had different rights and benefits. Mr Chu’s reply made no mention of common standards in the draft rules and gave no details. Ms Kwan’s view is similar to that of another Legislative Assembly member, José Pereira Coutinho, who heads the Macau Civil Servants Association.
Too much money “It is unfair to treat civil servants under appointment and under contract differently,” Mr Coutinho told Business Daily. “They work in the same way but people under contract just have fewer benefits like housing subsidies and insurance.” He said his association had not been informed about the new rules. The number of civil servants has grown by 22.7 percent from roughly 21,500 in 2007. But the amount the government spends on their salaries has risen faster. The budget for civil service pay jumped to 12.59 billion patacas (US$1.58 billion) this year from 9.28 billion patacas in 2010.
linked the plot to the corruption scandal surrounding former secretary for Transport and Public Works, Ao Man Long. According to the judgement of Mr Ao’s second trial for corruption and money laundering, in 2004 Legstrong administrators asked to build a 122-metre high building, up from the 35-metre limit in the original contract. The former secretary approved the change, even against the opinion of the Land, Public Works and Transport Bureau, after being promised a duplex apartment in the building as bribe. Among the company administrators were Pedro Chiang and Miguel Wu Ka I, both of which were found guilty of corruption in a related trial. Mr Chiang remains at large. Business Daily tried to get a comment from China Star but received no reply by the closing of this edition.
MOP12.59 billion Budget for civil service pay in 2012
“The government has just too much money and they don’t know what to do with it,” said Mr Coutinho. He said a lack of public supervision had caused layoffs in the public sector. Plans for a new office to handle external affairs and protocol, announced in the Official Gazette on Monday, were a good example of government profligacy. “I have not heard anything about that before and I do not see such need, with public relations staff in different government departments,” he said. The government said the new office would draw up the itineraries for official delegations visiting Macau and for the chief executive’s official trips.
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business daily August 29, 2012
macau Brought to you by
HOSPITALITY Choked by success Tourist arrivals to Macau are placing border-crossing facilities under great strain and imposing ever-increasing demands on transport, which affects traffic conditions. More than half of all arrivals come by land and a further 40 percent by sea. Arrivals by air amount to just a little more than 6 percent. Compared with the same time last year, the first seven months of this year suggest changes in arrival patterns.
The majority of the city’s tourists are from the mainland and arrive at a border crossing by land, but the growth in arrivals by land trails well behind the overall rate of growth. Arrivals overall grew by 7.1 percent, but the number of arrivals by land grew by just 3.1 percent. Mainland arrivals by sea and air, however, both grew by about 20 percent. Arrivals from Hong Kong and Taiwan, the next biggest source markets for tourists, have shrunk across all modes of entry but the decline in arrivals by land is the biggest fall for both of these markets. Could these figures indicate that congestion, mainly at the Gongbei border, is prompting visitors and, very possibly, transit passengers, to choose alternative methods of travel?
Booming retailers run short of staff The scarcity of suitable workers is hampering the retailing boom and stuffing the pockets of bus drivers Vítor Quintã
vitorquinta@macaubusinessdaily.com
A
lmost one in seven jobs in retailing were vacant at the end of June, even though the industry hired more than 2,300 people in first half of this year. Statistics and Census Service data released yesterday show that at the end of June retailing businesses had 22,685 employees, 11.5 percent more than at the end of December. Wholesaling and retailing together had 35,551 full-time employees, the most since the Statistics and Census Service began collecting data, after the handover in 1999. Booming retail sales, which have grown at an annual rate of more than 30 percent in every quarter since early 2010, have fuelled the hiring spree. But shops could easily have far more workers if they were able to fill all their vacant positions. Retailers had 3,485 vacancies at the end of June, a record, which meant that 15.4 percent of all positions went unfilled. It is not because the job requirements are strict. No vocational qualification is required for 90.5 percent of vacant positions in wholesaling and retailing. Junior secondary education is all that is required for 68.2 percent of vacant positions. One reason for the number of vacancies may be the pay, which remains below the median for all
occupations of 11,000 patacas (US$1,375) a month. The average pay of employees in retailing rose by just 3.7 percent in the year ended June to 10,310 patacas a month – an increase far slower than the inflation rate of 6.19 percent in the same period. Salespersons earned only 9,520 patacas a month, on average. In the first half of this year average pay fell by 0.9 percent and the average pay of non-resident employees dropped by 2.2 percent to 8,700 patacas. It is no wonder, then, that retailing has an employee turnover rate of 9
34.1 %
Increase in the average pay of bus drivers
If we group together visitors by their home continent, the general patterns are as we might expect. The weight of numbers arriving from the mainland sway the results for Asia, creating the situation where most Asian tourists arrive by land. For the Americas, Oceania and Europe, arrivals by sea account for at least two-thirds of their total arrivals. In the case of arrivals from Europe, that figure reaches 82.5 percent. The most surprising result involves African arrivals: almost 60 percent arrive by land. In fact, in percentage terms, more Africans arrive by land than anyone else. This may reflect visa procedures applied to the African community in Guangzhou. J.I.D.
Almost 3,500 workers were needed to fill vacancies in retailing at the end of June
percent, “signifying a continual high demand of human resources”, the Statistics and Census Service said. The turnover rate in retailing is the highest in all industries surveyed. The Statistics and Census Service data show that the transport, storage and communications industry had 8,291 employees at the end of June, 2.2 percent more than at the end of December. But the land transport business bucked this trend, losing 117 employees, even though the introduction of the new public bus system made the pay of bus drivers jump by 34.1 percent to an average of 17,800 patacas a month. The air transport businesses still pays best, even though the average pay fell by 0.6 percent in the first half to 28,600 patacas a month. In contrast, the average monthly pay of a security guard was just 7,980 patacas at the end of June, 10.4 percent more than a year before. Security and cleaning staff working for companies contracted by the government are entitled by law to minimum monthly pay of 4,784 patacas. This month the Standing Committee for the Coordination of Social Affairs agreed to commission a study on the expansion of the statutory minimum wage to cover all cleaning and security staff.
August 29, 2012 business daily | 5
Macau firm boosts Mozambique bank
Midland profit tumbles as market cools off
E
A Stanley Ho company to inject more than US$1.2 million
state realtor Midland Holdings Ltd has seen its profit drop by almost a third year-on-year during the first half of 2012, mostly due to a slowdown in the Hong Kong property market. Th e g r o u p a l s o ha s a l o c a l subsidiary, Midland Macau Ltd, which opened its first agency in 2004 and now runs seven branches in Macau and Taipa. Midland’s revenue fell by 2.4 percent from the first half of last year to HK$1.9 billion (US$245 million). Most of that revenue, around HK$1.5 billion, came from
Stanley Ho’s Geocapital holds a 24.5 percent stake in Moza Banco
T
he share capital of Moza Banco SA – a Mozambican bank partly owned by Macau gaming entrepreneur Stanley Ho Hung Sun – is being increased by 12.5 percent to keep pace with the economic growth of the East African country. Geocapital Holdings Ltd SA, whose founding shareholders are Mr Ho and Portuguese businessman Jorge Ferro Ribeiro, holds a 24.5 percent stake in Moza Banco. The share capital increase was due to the bank’s rapid expansion in the Lusophone country, the bank’s chairman Prakash Ratilal said on Monday, quoted by the Portuguese news agency Lusa. The move is also meant to ensure the institution can keep pace with the growth the country has experienced in recent years, he added. The bank’s capital will be raised from US$40 million (319 million patacas) to US$45 million “in midOctober,” Mr Ratilal said. The chairman was speaking in Maputo on the sidelines of the
inauguration of the bank’s 12th branch in Mozambique’s capital city. The new outlet means there are now 22 branches operating in the cities of Maputo, Matola, Tete, Beira, Nacala and Nampula. Macau-based Geocapital has again been called to contribute financially, Mr Ratilal confirmed. The company will plough more than US$1.22 million to help boost the bank’s capital. Geocapital cooperated with Moçambique Capitais SA, a society of over 370 stakeholders, to found Moza Banco in June 2008. Moçambique Capitais SA, a local investment company, owns 50.4 percent of the bank, while a third partner, BES Africa, a subsidiary of Portuguese BES Group, has a 25.1 percent stake. This is the second time in a little more than a year that shareholders have been called to boost Moza Banco’s capital. The first time was in June last year, when the bank’s share capital was raised from US$10 million to US$40 million. T.A.
residential properties, which registered a drop of 5 percent. The decline “was principally a result of the drop in transaction volume in the Hong Kong property market,” the company told the Hong Kong stock exchange last Friday. But Midland’s profit fell much faster, by 32.7 percent to HK$147.3 million (US$18.4 million) and the company says another factor was a rise in costs. However, the realtor stresses that, compared with the second half of 2011, its results “recovered alongside with the market in general”. V.Q.
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business daily August 29, 2012
macau Brought to you by
Housing policy questioned The real estate market is headed through a peculiar phase. The policy measures introduced in the third quarter of last year, the government said, were aimed at cooling the market and, primarily, increasing the number of affordable homes for residents to buy. The government introduced a special stamp duty and restrictive conditions on mortgages as part of its policy. In a market where more than 70 percent of residents own and live in their own homes, the targets of the policy had to be people starting a family or recent arrivals to Macau. A year has since passed. It is time to compare the figures for the second quarter of this year with the same time last year.
Transactions in the second quarter of this year were down by almost 40 percent compared to last year. The number of transactions on the Macau peninsula and in Taipa both this year and last were comparable. In percentage terms, the contraction in Coloane was even bigger, 50 percent, but a small number of transactions there makes it hard to draw any firm conclusions. Of course, there might be other reasons behind the fall in transactions but the trend suggests that the first part of the government’s aims may have been achieved: the market has cooled. That does not mean the government’s objectives have been achieved fully, the main policy aim was to improve people’s access to an affordable flat.
Cross-border retirement homes planned Legislator, social worker, revive idea of mainland venues Xi Chen
xi@macaubusinessdaily.com
L
egislator Chan Meng Kam told Business Daily the government should consider collaborating with mainland Chinese authorities to build homes in Hengqin for Macau’s elderly. Mr Chan originally raised the issue during the March meeting of the Chinese People’s Political Consultative Conference. AccordingtoareportbyPortugueselanguage newspaper Tribuna de Macau, the Beijing government has said that the Guangdong authorities were launching measures to tackle the problem. But Guangdong has not specifically mentioned the construction of mainland elderly homes for MSAR residents. The Macau government dropped a similar plan two years ago. But Mr Chan said Hengqin would be easily accessible once the Lotus Bridge border crossing is open 24 hours. In addition, the planned Traditional Chinese Medicine Scientific and Industrial Park would also create a supporting environment on the island for people who need immediate medical services. Mr Chan suggested that using Hengqin’s resources is a good solution as Macau has very limited space. Other locations in mainland China are not appropriate, as the elderly cannot travel back and forth as easily, he said. Macao Polytechnic Institute social work professor Larry So Man Yum
Retirement The second graph breaks down residential transactions according to prices. The number of transactions in each of the four categories between 500,000 patacas and 3 million patacas have dropped significantly, with falls between 52 percent and 62 percent in each category. The drop in transactions for properties cheaper than 500,000 patacas is not as big but it is difficult to imagine what kind of home that sort of money would buy in the current market. The only category that has seen an increase in transactions is for properties costing more than 4 million patacas, where deals have grown by about one-third. These results seem hardly a vindication of the major objectives of the policy from one year ago. J.I.D.
homes far away from their own community can have very a
The number of beds in public elderly homes is expected to double by 2015 but could still fall short of demand
partly agreed with Mr Chan. He told Business Daily that for the elderly who have very low mobility and need 24-hour care, Hengqin could be a good choice. However he doesn’t support building normal retirement homes for able-bodied elderly in Hengqin or anywhere else in Zhuhai. “Retirement homes, particularly if far away from their own community, can have very a negative impact on the psychological state of the elderly,” he said. Secretary general of Catholic charity Caritas, Paul Pun Chi Meng, concurred, saying elderly homes are “100 percent more suitable to be built in Macau compared to mainland China”. He said that Macau and mainland China still have very different systems to manage elderly homes and it is not the right time to set up retirement homes across the border, not even in Hengqin. However, he recognised that the neighbouring island could provide some supporting services to Macau’s elderly.
negative impact on the
Other solutions
psychological state of
Mr Pun added that if the private market wants to satisfy the demands for high-end retirement homes, then Hengqin could have a temporary role until the territory has more land in a few years’ time to build more facilities
the elderly Larry So Man Yum, Macao Polytechnic Institute
for the elderly. Mr So also agreed that there is definitely a market for quality retirement homes in Macau, as normal retirement homes cannot satisfy older people’s emotional needs. “The average retirement homes have rigid schedules and lack individual privacy. They do not help the elderly face their last years in life with dignity,” he said. He proposed community care as an alternative and suggested the government to lend more support to non-governmental organisations to help the elderly in their communities. Mr Pun, who runs such an organisation, said that the city currently has over 1,000 public beds for the elderly, a number that will double by 2015. However he believes the number still falls short of the existing demand. Moreover, the territory does not have enough care workers. “The government needs to set up an incentive system to encourage people to become nurses other than relying on an individual’s goodwill to volunteer,” he said. Both Mr Pun and Mr So believe that the government has not done enough to support the elderly in the city and it should provide more senior housing facilities in general and make caring for the elderly a priority task.
Weather Beijing 34/23o C Changchun 21/16o C
Harbin 23/15o C
Xian 33/21o C Shanghai 30/26o C Chengdu 33/23o C Kunming 25/17o C Haikou 32/24o C Sanya 32/26o C
Guangzhou 35/25o C
MACAU (13-18 August) Day
Temperature
Humidity
08/13
25/29o C
75/95 %
08/14
26/31o C
60/95 %
08/15
27/32o C
55/90 %
08/16
27/31o C
60/95 %
08/17
27/31o C
60/95%
08/18
27/32o C
60/95 %
Shenzhen 35/26o C
ASIA (today)
Hong Kong 31/27o C
Manila
TOKYO
Jakarta
30/26o C
30/26o C
28/22o C
29/23o C
Macau 32/27o C
Bangkok
SEOUL
K. lumpur
34/24o C
SINGAPORE
29/22o C
29/26o C
taipei
32/26o C
August 29, 2012 business daily | 7
MACAU
Bus operators face school test Bus operators must show their mettle next month before the government will discuss paying them more Tony Lai
tony.lai@macaubusinessdaily.com
T
he three bus operators must provide dependable services next month, when the new school year begins, before the government will resume discussions about paying them more. The head of the Transport Bureau’s traffic management department, Lo Seng Chi, told a press conference yesterday that it was still too early to talk again about increasing the amount the government pays the operators to run the buses. “Right now, we and the three bus companies should focus on how to improve traffic on September 1. And the public can then look at how the companies implement their measures to raise the service standard,” said Mr Lo. The beginning of a new school year is expected to make the city’s traffic congestion worse. The three bus companies asked the government in June for an increase in what it pays them. The government said it would pay them 23 percent more but went
back on its word after members of the Legislative Assembly criticised the bus services. The government told the bus operators to improve their services first. The three bus companies are Reolian Public Transport Co. Ltd, Transportes Urbanos de Macau SARL (Transmac) and Sociedade de Transportes Colectivos de Macau SARL (TCM). Mr Lo said the introduction of new types of buses, which is envisaged by the service improvement plans of some of the bus operators, might require “a reasonable time”.
Threat of punishment But Mr Lo said he hoped othe r el em en ts o f th e s er v i ce improvement plans could be put into action as soon as possible. “The three companies have different plans and different timetables they need to follow,” he said. Mr Lo said the Transport Bureau
Chinese industrial profit slides Macau companies see net income drop
C
hina’s industrial sector posted a sharp profit drop in July, offering a fresh sign that slackening domestic and external demand has further weighed on corporate earnings and reinforcing calls for more policy easing to underpin the slowing economy. Combined industrial profits dropped 5.4 percent in July from a year ago, quickening from June’s 1.7 percent decline and extending a slide into a fourth month, the National Bureau of Statistics said on Monday. July’s profits alone were down to 366.8 billion yuan (460 billion patacas). In the first seven months of the year, industrial profits fell 2.7 percent from a year ago to 2.7 trillion yuan. In the January-July period, enterprises backed by Macau, Hong Kong and Taiwan investment saw
profits drop 12.6 percent from a year earlier to 609 billion yuan. Among the 41 industries tracked by the statistics bureau, 25 sectors posted profit growth and 15 reported a profit drop in the first seven months compared with the year-earlier period. The NBS indicator of year-todate profit covers industrial firms with annual revenue of more than 20 million yuan. As China’s economic growth cooled to a three-year low, inventories swelled at consumer firms such as auto dealers, food makers, liquor companies and department stores, according to a Reuters analysis of balance sheets from 350 Chinese companies. Macau’s foreign direct investment in the mainland has been slowing down across all sectors. The city’s FDI in mainland China dropped by more than onethird in the first four months of 2012, according to the most recent data. Between January and April the mainland authorities approved 82 investment projects by Macau companies and institutions, down by 8.9 percent from the same period of last year. The city’s investment during that period dropped much more, by 34.7 percent, to just US$130 million (1 billion patacas). Macau’s investment accounted for just 0.3 percent of foreign investment inflows into the mainland, Ministry of Commerce data show. T.A.
Some bus operators have included the introduction of new buses in their service improvement plans (Photo: Manuel Cardoso)
had received no word from Reolian about securing long-term insurance cover for its drivers. Reports in other news media have said Reolian must renew its insurance policy every month because of its accident rate. The Transport Bureau announced that the number of buses plying their routes during peak hours would be increased by 10 percent to meet demand at the beginning of next month. The bureau is also preparing to increase the number of ways it
uses to notify the public about road conditions, and to deploy more staff at bus stops to assist passengers and keep an eye on the buses. Mr Lo said his bureau may punish bus operators if they fail to put enough buses on the road next month. He said the only punishment the bureau had meted out so far, a penalty of 50,000 patacas (US$6,250) imposed on Reolian, was still being reviewed by the Court of Second Instance after the bus operator appealed against it.
8 |
business daily August 29, 2012
greater china
China Southern half-year profit sinks 85pct Airline tumbles in Hong Kong trading Jasmine Wang
C
hina Southern Airlines Co., Asia’s biggest carrier by passenger numbers, slumped the most in more than two months in Hong Kong trading after reporting a larger-than-expected 85 percent drop in first-half profit. The airline, China’s biggest on domestic routes, fell as much as 6.1 percent, the biggest decline since June 8. It closed 2.8 percent down at HK$3.5. China Southern’s net income fell to 424 million yuan (US$67 million), under international accounting standards, because of an economic slowdown sapping travel demand and higher fuel costs. The Guangzhou-based carrier also posted a currency-exchange loss, compared with a year-earlier gain, after the yuan weakened against the dollar for the first half-year decline since 2009. “Business travel demand in China was dragged by the economic slowdown, which was worse than expected,” said Li Lei, a Beijingbased analyst at China Securities Co. “The carrier’s plans to add more overseas flights will be good in the long term, but may pressure profitability in the short term.” The airline, China’s only operator of Airbus SAS A380s, has also suffered from only flying the superjumbos on domestic routes, he said. The planes will be introduced on the carrier’s Guangzhou-Los Angeles route in October, ending a yearlong wait caused by regulatory delays.
China Southern’s sales rose to 47 billion yuan
The airline booked a net exchange loss of 314 million yuan, compared with a 1.24 billion yuan gain a year earlier. The Chinese currency weakened 0.95 percent against the dollar in the first six months, according to the China Foreign
Higher sales The carrier’s sales rose 13 percent to 47 billion yuan, according to a filing to the Hong Kong stock exchange late on Monday. The carrier was expected to report a first-half profit of 570 million yuan based on the median of three analyst estimates compiled by Bloomberg News. Under domestic accounting standards, firsthalf profit slumped 84 percent to 449 million yuan. The airline didn’t propose to pay an interim dividend.
Exchange Trade System. Chinese carriers benefit from a stronger yuan as it pares the repatriated value of dollar-denominated debts used to buy planes and fuel overseas. It is “hard” to see material gains in the yuan happening against the dollar again, the airline said. “Looking into the second half of 2012, the international economic situation will be more complicated with weak growth of the global economy.”
Empty seats The carrier’s load factor, or the percentage of seats filled, dropped 1.1 percentage points to 79.5 percent as expansion outpaced demand. Passenger yields, a measure of average airfare, increased 3 percent in the first half from a year earlier. The carrier flew 41.2 million passengers during the period, 7.2
percent more than a year earlier. Fuel costs rose 27 percent to 18.5 billion yuan on higher fuel prices and greater consumption. China Southern has unveiled plans to challenge Singapore Airlines Ltd and Emirates on Australia-Europe routes using its hub in Guangzhou. It started flights to London in June, building on existing services to Paris and Amsterdam. Australian services are due to climb to as many as 110 a week by 2015 from 42. “Their aggressive capacity expansion and pricing strategy mean that yields should remain under pressure,” said Credit Suisse analysts Davin Wu and Timothy Ross in a note to clients yesterday. “We expect the poor outlook on yields and the company’s inability to operate their five A380s profitably should continue to impact its earnings.” Bloomberg
HK regulator takes Ernst & Young to court ‘Failure’ to produce documents is a ‘serious concern’, SFC says Anne Marie Roantree and Rachel Armstrong
H
ong Kong’s securities regulator took Ernst & Young Hong Kong to court after the audit giant failed to turn over accounting records related to a China-based company. The auditor now faces the dilemma of whether to comply with the order by the regulator and risk a possible breach of China’s state secrecy laws or face regulatory sanctions in Hong Kong. The case is the first of its kind in Hong Kong and mirrors one in the United States where Ernst & Young’s rival Deloitte Touche Tohmatsu is fighting a request from U.S. regulators to hand over its audit work papers of Chinese computer company Longtop Financial
Ernst & Young says it is restricted by Chinese secrecy laws
Technologies Ltd. The security watchdog said Ernst & Young’s “failure” to produce the documents is a “serious concern”. “This risks throwing H-share and red chip companies into the same mess that all the U.S.-listed Chinese companies are in,” Paul Gillis, professor of accounting at Peking University and author of the China Accounting Blog, said by phone yesterday. Red chip and H-shares refers to companies operating in mainland China but listed in Hong Kong. Between them, they make up more than half of the city’s stock market. In this case, the Securities and Futures Commission (SFC) wants Ernst & Young to hand over its records from its audit work for water
provider Standard Water Ltd. The SFC said the audit firm has claimed it does not have the relevant records, as they are held in mainland China by its joint venture partner, Ernst & Young Hua Ming, and could not be produced due to restrictions under China’s state secrecy laws. Ernst & Young in Hong Kong did not immediately respond to calls seeking comment. Peking University’s Mr Gillis said the fact that the Hong Kong firm was acting as Standard Water’s main auditor means it is in a difficult position to defy the SFC’s request. “If the Hong Kong firm is signing the reports, that are to be used in Hong Kong, then under auditing standards the majority of the work
should have been done in Hong Kong and they should have evidence of that work,” he said. Accounting records held in Hong Kong would not be subject to the same secrecy laws as those held in mainland China. The SFC said it has also got the support of the relevant mainland authorities in the investigation. Under the action taken by the SFC, the Hong Kong court will inquire into why Ernst & Young has not complied with the regulator’s request. It can order the auditor to hand the papers over if it is satisfied it does not have a reasonable excuse. Reuters
August 29, 2012 business daily | 9
greater china Ford readies Lincoln launch in China Ford Motor Co. will launch its Lincoln brand in China within two years. The additional investment to launch Lincoln, which Ford did not disclose, comes on top of around US$5 billion that the U.S. automaker has spent since 2006 in a market where it lags some way behind General Motors Co. and Volkswagen. The U.S. automaker is building its dealership network from scratch and will begin selling Lincoln vehicles in the second half of 2014. “The brand in China could be a bright spot for Lincoln globally,” Ford’s global marketing chief Jim Farley said yesterday.
Ferretti plans Chinese plant Superyacht-maker to customise vessels for the mainland market
F
erretti Group, whose Riva unit made boats for Brigitte Bardot and Sean Connery, intends to open an assembly plant in China as its new Chinese parent seeks to drive up sales in the world’s most-populous country. The Italian yachtmaker is considering plans for the facility in Qingdao, Shandong province, Tan Xuguang, chairman of the company and of its majority-owner Shandong Heavy Industry Group-Weichai Group, told reporters in Beijing yesterday. The plant will customise vessels for the local market, he said. Ferretti plans to boost sales in emerging markets led by China, Brazil and Russia, Mr Tan said, as the eurozone debt crisis saps demand in Europe. Shandong Heavy, China’s biggest maker of bulldozers, agreed to buy 75 percent of the yachtmaker from creditors in January for 178 million euros (US$222 million). The new ownership “will give us unbelievable access to emerging markets such as China, where the potential is the highest in the world,” Ferretti chief executive Ferruccio Rossi said in Beijing. The company will also continue to focus on Europe and the U.S., he said. The boat-builder, which also makes Ferretti, Pershing and Bertram brand yachts, will retain its existing management as well as its headquarters and production
Italian yachtmaker sold about 17 vessels in China last year
facilities in Italy, the two companies said in January. Its yachts can cost more than US$100 million. The yachtmaker’s bank liabilities have fallen to 116 million euros from 760 million euros following a restructuring, Mr Tan said. The company almost collapsed into bankruptcy in 2009 before creditors led by Royal Bank of Scotland Group Plc agreed to a debt-for-equity swap. RBS and Strategic Value Partners LLC both own 12.5 percent stakes in Ferretti following the January deal. Ferretti may buy parts for its Chinese-made yachts from suppliers
Profit squeeze causes first bond losses
C
hina’s corporate bonds are set for their first monthly loss this year as more than half of issuers reported profit growth slowed. Company debt in the world’s second-biggest economy has lost 0.8 percent in August, paring gains for the year to 3.6 percent compared with 6.4 percent in 2011, Bank of America Merrill Lynch indexes show. Issuance has increased 53 percent in 2012 from the year earlier, weighing on demand. Globally, corporate notes returned 0.2 percent this month. Yields on AAA company debt are at the highest relative to government securities in almost three months as the economy grows at its slowest pace since 2009. Among listed issuers, 55 percent said profit fell from a year earlier and 9 percent reported losses, according to China International Capital Corp. “The whole economy is slowing, which is obviously leading to a decline in company profits,” and putting pressure on bond returns, said Fan Wei, a fixed-income analyst
at Hongyuan Securities Co. “It’s still not quite clear how the economy will fare the rest of this year.” Medium-term notes, which account for the largest group of Chinese corporate debt financing, lost 0.55 percent in August, according to Chinabond, the nation’s bond clearinghouse. “The earnings are not good and some of the outlooks are pretty bad,” said James Zhao, chief investment officer in Beijing at the international department of CCB Principal Asset Management Co., which is 65 percent owned by China Construction Bank, China’s second-largest lender by assets. “We can see that from industrial material companies, cement companies, machinery companies, even the consumer and department store companies.” Industrial companies’ profits declined for the fourth-straight mon th i n J u l y , a g o v er n m en t report showed yesterday, adding to evidence the nation’s economic slowdown is worsening. Bloomberg
in Guangdong and Fujian provinces as well as Taiwan, provided they can meet quality standards, Mr Tan said Ferretti sold about 17 vessels in the country last year, Mr Tan said in
January. The number of ultra-highnet-worth households in China rose 20 percent in the period, according to Boston Consulting Group. Bloomberg
Japan cuts economic assessment Slowing global growth weighing on exports and factory output Andy Sharp and Keiko Ujikane
J
apan’s government downgraded its assessment of the world’s third-biggest economy for the first time in 10 months as some analysts forecast that gross domestic product will shrink this quarter. Risks include a “further slowing down of overseas economies and sharp fluctuations in the financial and capital markets,” the Cabinet Office said in a monthly report released in Tokyo yesterday. It cut an evaluation of the global economy. The government cut its view on personal consumption, homebuilding, exports, imports and industrial production, while raising its assessment of the labour market. The Bank of Japan next meets on September 18 and 19 to review monetary policy, while global investors are awaiting an August 31 speech by Federal Reserve Chairman Ben S. Bernanke to gauge the outlook for stimulus in the world’s biggest economy. “Europe’s debt crisis is having the effect of a body blow to Japan’s economy,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo. “Concerns over Japan’s economic outlook will probably build pressure on the BOJ
to apply more monetary stimulus,” said Mr Maruyama, who says the central bank could move in October. JPMorgan Securities Japan Co. forecasts a 0.3 percent annualised decline in gross domestic product in the three months through September, while BNP Paribas SA estimates a 0.9 percent fall. The median estimate in a Bloomerg News survey compiled this month was for 1 percent growth, partly supported by earthquake reconstruction work.
We’d have to consider how to save money while trying to avoid affecting Japanese people’s lives as much as possible Jun Azumi, Finance Minister
The Nikkei average fell to a twoweek closing low yesterday. The index lost 0.6 percent to 9,033.29, while the Nikkei China 50 index, made up of Japanese companies with significant exposure to China, shed 1.2 percent.
Global weakness Grappling with the world’s biggest public debt burden, Japan’s government is also at risk of a financing crunch. Finance Minister Jun Azumi said yesterday that government funds may “dry up” up if a financing bill fails to pass in the upper house of parliament. “We’d have to consider how to save money while trying to avoid affecting Japanese people’s lives as much as possible,” he said. “The Japanese economy is on the way to recovery at a moderate pace, partly due to reconstruction demand, while some weak movements are seen recently,” the Cabinet Office said. The government lowered its economic evaluation of the U.S., Europe, China, the rest of Asia except India, and said Japan’s overseas shipments are “growing weaker”. European austerity measures,
Myanmar President Thein Sein replaced several ministers in his team
M
Global slowdown threatens Japan’s export-reliant recovery Consumption may lose momentum as rebuilding demand peaks out
Economic zone
Govt signs industrial zone pact with Japan consortium
talks with rebels, is seeking to create jobs before elections in 2015. “It shows very clearly a strengthening of the president’s reformist agenda,” Thant Myint-U, an author of two books on Myanmar, said yesterday. “It’s also notable that a lot of the reshuffle has been around economic positions. That shows the focus the president has on reforming the economy.” Myanmar dismantled a fixed exchange-rate in April and parliamentarians are revamping laws to attract investors to the country of 64 million people, attracting companies such as Coca- Cola Co. and Visa Inc. The nation’s economy may grow as much as 8 percent a year over the next decade as inflation remains low and the government increases trade ties with neighbours China and India, the Asian Development Bank said in an
China, U.S. slowdown, Europe’s debt crisis hurt exports
will be moved to the ministry for cooperatives, according to the statement. Sat Aung, an adviser to the president, will become a deputy minister for economic planning. “The fact that four ministries that are key to reforms are becoming key posts in the presidential office is a positive sign for the country’s democratic transition,” Min Thu, a lawmaker from former political prisoner Aung San Suu Kyi’s National League for Democracy, said.
Myanmar president reshuffles cabinet
yanmar’s President Thein Sein replaced nine cabinet members in the largest shake up of his administration since embarking on political reforms after taking power last year. Thein Sein replaced ministers responsible for information and economic development, finance, industry and railways, and will transfer oversight of those ministries to the office of the president, according to a statement on his official website. Democratic reforms since Thein Sein took power last year have prompted Western nations to ease sanctions and galvanised lawmakers to focus on economic growth after about five decades of military rule left Myanmar disconnected from the global financial system. The president, who has freed political prisoners, allowed greater media freedom and held peace
KEY POINTS
August 20 report.
‘Upbeat’ outlook The near-term outlook for the economy, which is 1/10th the size of neighbouring Thailand, is “relatively upbeat” because of higher foreign investment and commodity sales, the ADB said. Annual growth of 8 percent may triple per capita gross domestic product to US$3,000 by 2030, it said. Thein Sein replaced Finance Minister Hla Tun, Industry Minister Soe Thein, Railays Minister Aung Min and Minister for Economic Planning Tin Naing Thein, according to the statement on his website, which didn’t name all of the successors. Aung Kyi, the former labour minister, will head the information ministry, replacing Kyaw Hsan, who
Myanmar’s government has agreed a deal with a Japanese consortium to develop jointly a special economic zone on the edge of the commercial capital, Yangon, as part of moves to expand industry and bring in muchneeded investment. Mitsubishi Corp., Marubeni Corp. and Sumitomo Corp. will team up for a 49 percent share in the 2,400-hectare (5,900-acre) estate in Thilawa, close to a deep-sea port, with the government set to invite private domestic firms to get involved, an industry official said. “From the Myanmar side, we will set up a public consortium so that the general public can invest there,” Win Aung, chairman of the Union of Myanmar Federation of Chambers of Commerce and Industry, said in an interview. Win Aung said the Japanese government would provide financial assistance to support the development of infrastructure for the industrial zone, which will include factories and a gas-fired power plant. “It will relieve the developers of the burden of huge costs,” he said. Japan is expected to invest in some of Myanmar’s other planned economic zones, such as Kyaukphyu on the Bay of Bengal and Dawei, a US$50 billion project on the southern peninsula with access to the Indian Ocean and mainland Southeast Asia. Bloomberg/Reuters
August 29, 2012 business daily | 11
asia
Singapore should allow brief rise in inflation: IMF Economy slowing because of weaker global demand
S
Personal consumption accounts for about 60 percent of Japan’s economy
U.S. unemployment and China’s slowdown are weakening global demand. Japan’s bigger-thanforecast trade deficit in July and slowing economic growth in the second quarter highlighted pressure on the Bank of Japan and the government to add stimulus. In the labour market, there are “signs of improvement, although
some severe aspects still remain,” the government said. Japan’s unemployment rate fell 0.1 percentage point to 4.3 percent in June, while the jobless rate for people aged 15 to 24 dropped 0.9 point to 7.4 percent. The government will work with the central bank to counter deflation, it said. Bloomberg
Australia scraps carbon floor price
2.9 %
CO2 trading scheme to fully join EU programme by 2018
A
ustralia and the European Union yesterday agreed to link their carbon trade schemes by 2018, allowing Australian firms to immediately buy cheaper EU carbon credits in a move expected to boost demand for EU carbon allowances. Australia will also scrap its planned A$15/tonne (US$15.58) carbon floor price when its emissions trading scheme starts in July 2015. Currently, Australia’s carbon tax is fixed at A$23 a tonne. Ditching the floor price is the first major change to Australia’s controversial plan to price carbon following concerns from businesses facing higher costs than European competitors. The move means business in Australia will be able to use EU allowances, which they can buy now, to cover up to 50 percent of Australian liabilities from July 2015 but European companies will have to wait until 2018 to use Australian allowances. Carbon permits in the European Union are currently trading around 8.16 euros a tonne (US$10), although Climate Change Minister Greg Combet said he remained confident the price would recover by 2018, when the full linkage would start. Mr Combet said he stood by government budget forecasts for a carbon price of around A$29/tonne by 2015/16. Australia is one of the world’s
ingapore should let its infla- the increase in relative prices of tion rate rise temporarily to labour-intensive products resulting accommodate price gains from from the tighter labour market tighter labour markets even as those conditions,” the IMF said. “Other stemming from credit growth should sources of inflation – including from be “forcefully tackled,” the Interna- transport costs, credit growth and tional Monetary Fund said. asset prices – should be forcefully Gross domestic product growth is tackled, including through continued forecast to weaken this year to 2.9 recourse to macro prudential tools. percent, before accelerating to 3.4 Consideration could also be given to percent in 2013, the Washington- further absorbing liquidity.” based lender said in a report The monetary authority estimated yesterday known as an Article IV last month consumer-price gains will Consultation. A low unemployment average 4 percent to 4.5 percent this rate will spur domestic demand and year, compared with the 3.5 percent to inflation will remain elevated, it said. 4.5 percent range it forecast previously. The Singapore government this The inflation rate was 4 percent in July, month trimmed its prediction for after holding at 5 percent or more in 2012 growth to 1.5 percent to 2.5 the previous four months. percent, from an earlier forecast for “Inflation is expected to remain an expansion of as much as 3 percent. under pressure from the tight labor Policy makers across the world are market and lagged effects of higher girding for a deeper impact from prices for vehicle permits and real Europe’s sovereign-debt turmoil, estate,” the IMF said. with Asian central banks from China to South Korea and the Philippines Productivity growth cutting interest rates last month, putting pressure on Singapore to ease Singapore’s government said in monetary policy. 2010 that it aims to at least double “Singapore has ample policy space its productivity growth to between and large buffers to mitigate the effects 2 percent and 3 percent annually of a steeper global growth slowdown in the next 10 years, as it tries to or financial turmoil,” the IMF said. reduce the island’s dependence “Given Singapore’s pronounced trade on exports. Policy makers have and financial openness, the impact of c i t e d s o m e i n d u s t r i e s ’ u s e o f further euro-area cheaper, lowturmoil, abrupt skilled foreign fiscal tightening labour as a reason for low in the United productivity States, and/or a in the prior severe slowdown decade, and in China would Singapore’s GDP have tightened be substantial.” rules on hiring The Monetary growth forecast o v e r s e a s Authority of for 2012 workers. Singapore, “Slower which uses the foreign worker exchange rate to manage inflation, said in April it would inflows will boost real wages allow faster gains in the currency to and, if complemented with welldamp price pressures, diverging from targeted incentives for technology most other regional economies that a n d s k i l l s u p g r a d i n g , s h o u l d had left borrowing costs unchanged with time support productivity growth,” the IMF said. “In or eased monetary policy. The tightening was appropriate, the near term, the strategy is the IMF said yesterday. The central e x p e c t e d t o r e d u c e p o t e n t i a l bank releases its next policy review growth and increase frictional unemployment. It will also push in October. up inflation and contribute to a Under pressure permanently more appreciated real exchange rate and narrower “Inflation should be permitted current-account surplus.” to rise temporarily to accommodate Reuters
highest per capita emitters of pollutants blamed for causing global warming, due largely to its reliance on coal-fired power stations. Putting a price on carbon is Prime Minister Julia Gillard’s key policy to fight greenhouse gas emissions and to help cut emissions by 5 percent of year 2000 levels by 2020. Mr Combet said the link with 30 nations in the European scheme would provide more business certainty and would eventually see a levelling in the price of carbon permits between Australia and Europe. “This means that from July 1, 2015 Australia’s carbon price will effectively be the same as that that operates in our second largest trading bloc,” he said. “The same carbon price will cover 530 million people.” Reuters
Singapore seen as having ample policy room to deal with a slowing economy
12 |
business daily August 29, 2012
MARKETS Hang SENG INDEX NAME
NAME
PRICE
Day %
VOLUME
CHINA UNICOM HON
13.02
0.1538462
18385323
CITIC PACIFIC
10.74
-2.185792
4092720
SANDS CHINA LTD
65
-0.1536098
2312085
14.84
0.6784261
38775010
COSCO PAC LTD
10.4
-0.3831418
ESPRIT HLDGS
12.4
PRICE
Day %
VOLUME
26.85
-0.1858736
12442768
ALUMINUM CORP-H
3.13
-0.3184713
5901377
BANK OF CHINA-H
2.91
-0.6825939
254449161
BANK OF COMMUN-H
5.24
1.747573
38483654
BANK EAST ASIA
28.45
-0.3502627
783944
BELLE INTERNATIO
14.72
0.8219178
11561203
BOC HONG KONG HO
24.65
1.02459
8829434
HANG LUNG PROPER
12.8
-1.081917
2229346
HANG SENG BK
AIA GROUP LTD
CATHAY PAC AIR CHEUNG KONG
CLP HLDGS LTD CNOOC LTD
PRICE
Day %
VOLUME
61.15
-0.4882018
1695410
27.7
2.214022
7460298
SINO LAND CO
13.36
-0.1494768
1963472
SUN HUNG KAI PRO
101.6
-0.2944063
1586991
3759332
SWIRE PACIFIC-A
92.45
0.1082837
933279
1.80624
7282295
TENCENT HOLDINGS
242.6
-0.9795918
2087940
TINGYI HLDG CO
26.8
0.1869159
1867437
110.5
-0.4504505
400232
HENDERSON LAND D
48.3
-1.327886
3003073
HENGAN INTL
74.2
1.158828
1055170
HONG KG CHINA GS
18.44
0.3264418
5285754
HONG KONG EXCHNG
104.8
-1.225259
2774955
HSBC HLDGS PLC
68.4
0.5143277
5650404
NAME POWER ASSETS HOL
22.7
0.4424779
2242694
WANT WANT CHINA
10.14
2.944162
10383735
WHARF HLDG
48.95
-1.409869
5096339
107.4
0.280112
2233996
CHINA COAL ENE-H
6.67
-1.038576
25841610
CHINA CONST BA-H
5.24
0.3831418
208622282
CHINA LIFE INS-H
20.3
-1.216545
28697914
CHINA MERCHANT
23.45
-2.291667
3996615
CHINA MOBILE
84.05
0.598444
12910348
HUTCHISON WHAMPO
68.2
-0.5830904
3879568
17.9
-1.648352
20695150
IND & COMM BK-H
4.33
0.4640371
145497440
CHINA PETROLEU-H
7.4
-0.1349528
46018043
LI & FUNG LTD
12.82
0
16033605
HIGH
19939.54
CHINA RES ENTERP
22.7
-1.304348
3103811
MTR CORP
27.95
0.5395683
1553215
LOW
19723.3
15.14
-0.9162304
4623300
NEW WORLD DEV
9.95
-0.1004016
5012566
CHINA RES POWER
16.7
0.7237636
3401027
52W (H) 21760.33984
PETROCHINA CO-H
9.44
-0.6315789
58555657
CHINA SHENHUA-H
29.1
0.5181347
11391612
PING AN INSURA-H
57.2
-0.6081668
12487551
CHINA OVERSEAS
CHINA RES LAND
MOVERS
21
27
1 19940
INDEX 19811.8
(L) 16170.35
19720
24-Aug
28-Aug
Hang SENG CHINA ENTErPRISE INDEX NAME
NAME
PRICE
DAY %
VOLUME
23.3
-0.6396588
9651120
7.4
-0.1349528
46018043
CHINA RAIL CN-H
6.27
2.45098
CHINA RAIL GR-H
3.06
254449161
CHINA SHENHUA-H
1.747573
38483654
0.2994012
3404000
0 -1.038576
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3
-0.6622517
80529550
CHINA PACIFIC-H
AIR CHINA LTD-H
4.84
-3.585657
12812000
CHINA PETROLEU-H
ALUMINUM CORP-H
3.13
-0.3184713
5901377
ANHUI CONCH-H
20.05
-0.9876543
10768524
BANK OF CHINA-H
2.91
-0.6825939
BANK OF COMMUN-H
5.24
BYD CO LTD-H
13.4
CHINA CITIC BK-H
3.91
CHINA COAL ENE-H
6.67
CHINA COM CONS-H
6.67
CHINA CONST BA-H
5.24
PRICE
DAY %
VOLUME
11.32
-0.7017544
14538673
ZIJIN MINING-H
2.53
-2.316602
45018800
8475950
ZOOMLION HEAVY-H
8.77
1.387283
10222884
0.6578947
8673748
ZTE CORP-H
10.98
-0.9025271
5446210
29.1
0.5181347
11391612
CHINA TELECOM-H
4.39
-0.4535147
44643810
DONGFENG MOTOR-H
10.4
1.761252
32047901
9257000
GUANGZHOU AUTO-H
5.77
0.1736111
2934860
25841610
HUANENG POWER-H
5.39
-0.3696858
8046488
-1.038576
20425202
IND & COMM BK-H
4.33
0.4640371
145497440
0.3831418
208622282
JIANGXI COPPER-H
18.02
-0.880088
5452660
3.2
-0.9287926
5923000
PETROCHINA CO-H
9.44
-0.6315789
58555657
CHINA LIFE INS-H
20.3
-1.216545
28697914
PICC PROPERTY &
9.35
1.851852
11663460
CHINA LONGYUAN-H
5.12
0.9861933
4707900
PING AN INSURA-H
57.2
-0.6081668
12487551
CHINA MERCH BK-H
13.82
0
9891207
SHANDONG WEIG-H
8.5
-1.162791
3121600
CHINA COSCO HO-H
NAME YANZHOU COAL-H
MOVERS
15
2 9730
INDEX 9521.77 HIGH
9728.09
LOW
9478.3
CHINA MINSHENG-H
6.93
0.4347826
43476050
SINOPHARM-H
24.6
-1.6
2127821
52W (H) 11916.1
CHINA NATL BDG-H
7.59
0.7968127
29444800
TSINGTAO BREW-H
42.8
0.3516999
868200
(L) 8058.58
12.74
-2
6196300
WEICHAI POWER-H
21.15
-1.168224
821230
CHINA OILFIELD-H
23
9470
24-Aug
28-Aug
Shanghai Shenzhen CSI 300 NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.49
0
30847823
NAME CSR CORP LTD -A
AIR CHINA LTD-A
4.89
0.204918
11070615
DAQIN RAILWAY -A
PRICE
DAY %
VOLUME
PRICE
DAY %
4.03
0.75
12971512
NAME SAIC MOTOR-A
11.54
0.2606429
VOLUME 9819960
5.9
0.8547009
18141264
SANY HEAVY INDUS
10.85
0.1846722
15538185
ALUMINUM CORP-A
5.56
0
6191503
DATANG INTL PO-A
4.47
-0.2232143
2792745
SHANDONG GOLD-MI
35.2
-1.840491
10633963
ANHUI CONCH-A
13.5
-1.315789
12560190
DONGFANG ELECT-A
14.59
-1.485483
8897467
SHANG PHARM -A
11.86
1.022147
11046486
BANK OF BEIJIN-A
7.36
1.798064
13284806
EVERBRIG SEC -A
10.6
1.145038
6143765
SHANG PUDONG-A
7.6
2.702703
54763743
BANK OF CHINA-A
2.77
0
14180716
GD MIDEA HOLDING
9.18
0
9139999
SHANGHAI ELECT-A
4.1
-1.204819
4308104
4.4
0.6864989
33305230
GD POWER DEVEL-A
2.59
-1.145038
27604526
SHANXI LU'AN -A
17.8
-1.220866
12061205
9.53
1.490948
8320666
GF SECURITIES-A
10.54
-4.528986
82669293
SHANXI XINGHUA-A
37.68
-0.6591089
1818791
GREE ELECTRIC
20.58
1.429276
9050778
SHANXI XISHAN-A
13.15
0.9209517
8201094
13.01
0.9309542
12985264
SHENZEN OVERSE-A
5.41
-1.457195
15262856 57728007
BANK OF COMMUN-A BANK OF NINGBO-A BAOSHAN IRON & S
4.48
10.07371
154930938
15.13
0.331565
8493753
GUANGHUI ENERG-A
CHINA CITIC BK-A
3.86
1.312336
9252391
HAITONG SECURI-A
8.18
1.363073
35792731
SUNING APPLIAN-A
5.93
2.241379
CHINA CNR CORP-A
3.46
1.169591
23285424
HANGZHOU HIKVI-A
27.5
-1.785714
3642741
TSINGTAO BREW-A
32.64
-0.4878049
708214
CHINA COAL ENE-A
7.04
0.8595989
6698540
HEBEI IRON-A
2.57
1.581028
23086112
WEICHAI POWER-A
17.25
-0.3466205
4855183
CHINA CONST BA-A
4.02
1.005025
11746923
63
-0.7874016
1378074
WULIANGYE YIBIN
33.91
-0.905903
14134711
CHINA COSCO HO-A
4.05
0.7462687
5698181
HONG YUAN SEC-A
15.67
3.364116
10545609
XIAMEN TUNGSTEN
39.57
-0.05051781
10442837
CHINA CSSC HOL-A
19.38
-0.05157298
2687925
HUATAI SECURIT-A
8.45
2.424242
10817900
YANGQUAN COAL -A
14.49
1.328671
6136244
CHINA EAST AIR-A
3.58
-1.37741
10969738
HUAXIA BANK CO
8.83
2.793946
22373217
YANTAI CHANGYU-A
52.56
-2.213953
1226380
CHINA EVERBRIG-A
2.77
0.7272727
25908371
IND & COMM BK-A
3.85
0.7853403
31798480
YANTAI WANHUA-A
12.64
-0.2367798
6775878 1683690
BYD CO LTD -A
HENAN SHUAN-A
CHINA LIFE INS-A
16.72
0.9661836
6200696
INDUSTRIAL BAN-A
12.28
1.908714
29393552
YANZHOU COAL-A
18.03
0.8389262
CHINA MERCH BK-A
10.01
1.521298
33101509
INNER MONG BAO-A
35.25
0.5706134
29020423
YUNNAN BAIYAO-A
60.3
-1.082677
1387737
CHINA MERCHANT-A
9.73
1.884817
5438609
INNER MONG YIL-A
20.26
-2.030948
10081714
ZHONGJIN GOLD
15.09
-0.330251
12884398
CHINA MERCHANT-A
19.11
-2.994924
9652933
INNER MONGOLIA-A
5.35
1.134216
61691916
ZIJIN MINING-A
3.78
-0.7874016
39883345
30
-0.8592201
2143162
ZOOMLION HEAVY-A
8.12
0.6195787
22844362
ZTE CORP-A
9.78
-2.297702
25123889
CHINA MINSHENG-A
5.96
1.880342
59997586
JIANGSU HENGRU-A
CHINA NATIONAL-A
5.98
3.28152
32233033
JIANGSU YANGHE-A
125.6
-1.867333
1943471
CHINA OILFIELD-A
16.34
0.8641975
3619162
JIANGXI COPPER-A
20.45
0.2942619
3859694
CHINA PACIFIC-A
19.06
0.4214963
7661842
JINDUICHENG -A
11.88
0.4226543
2846489
CHINA PETROLEU-A
6.23
5.414552
51496761
JIZHONG ENERGY-A
12.74
0.3149606
8989996
CHINA RAILWAY-A
4.27
1.666667
11553092
KANGMEI PHARMA-A
15.53
0.9752926
7387006
CHINA RAILWAY-A
2.45
2.083333
24453906
KWEICHOW MOUTA-A
225.53
-1.299781
2029476
CHINA SHENHUA-A
21.52
0.7490637
6273851
LUZHOU LAOJIAO-A
37.45
-1.989008
7027804
METALLURGICAL-A
2.09
-3.686636
67065164
MOVERS
196
4.94
1.229508
27865432
CHINA SOUTHERN-A
3.69
0.2717391
12982804
NINGBO PORT CO-A
2.49
0.4032258
17177092
CHINA STATE -A
3.05
0
33011672
PANGANG GROUP -A
3.96
1.278772
35755400
HIGH
2295.68
CHINA UNITED-A
3.86
2.387268
92446910
PETROCHINA CO-A
8.95
2.052452
26220503
LOW
-0.990099
36009463
PING AN BANK-A
14.37
1.842665
15910898
2223.8
8
CHINA YANGTZE-A
6.53
0.3072197
8238984
PING AN INSURA-A
38.88
0.02572678
12779813
CHONGQING WATE-A
5.65
0.5338078
3593094
POLY REAL ESTA-A
9.24
-1.910828
42432191
10.24
0.4906771
71606885
31.18
0.5806452
2771490
CITIC SECURITI-A
QINGHAI SALT-A
12 2300
INDEX 2238.411
CHINA SHIPBUIL-A
CHINA VANKE CO-A
92
52W (H) 2907.398 (L) 2222.001
2220
24-Aug
28-Aug
FTSE TAIWAN 50 INDEX NAME
PRICE DAY %
Volume
NAME
ACER INC
26.1
-1.323251
13601862
FORMOSA PLASTIC
ADVANCED SEMICON
22.3
-1.108647
12932902
FOXCONN TECHNOLO
ASIA CEMENT CORP
34.6 -0.7173601
2374539
ASUSTEK COMPUTER
272
-2.683363
3269897
HOTAI MOTOR CO
AU OPTRONICS COR
16644980
TSMC
52284149
UNI-PRESIDENT
48.25
UNITED MICROELEC
-1.858108
13950543
HUA NAN FINANCIA
CHANG HWA BANK
15.35 -0.6472492
HTC CORP
-1.193317
316415
-3.495146
20027194
16.2 -0.3076923
8604974
2907327
YUANTA FINANCIAL
13.9
-2.112676
16146641
YULON MOTOR CO
53.9
-1.642336
4578683
619
-2.825746
1915929
35.05
-1.267606
2916778
-5.9
35969166
MEDIATEK INC
-0.979021
23445160
MEGA FINANCIAL H
26
0
13949504
17.7
-1.392758
15280219
315
-1.253918
10393917
22.45
-1.535088
17109154
NAN YA PLASTICS
57.2 -0.3484321
2422655
PRESIDENT CHAIN
161
-2.424242
799691
4183189
QUANTA COMPUTER
74.4
0.2695418
7683440
4983033
SILICONWARE PREC
33.95
1.494768
11355143
101.5 -0.9756098
2713792
SINOPAC FINANCIA
11.7
-4.098361
20177211
FAR EASTERN NEW
31.4 -0.4754358
6124518
SYNNEX TECH INTL
66.3
-1.485884
1659253
FAR EASTONE TELE
73.9
3531493
TAIWAN CEMENT
33.45
-1.181684
5039017
FIRST FINANCIAL
-1.335113
17.45 -0.8522727
8094954
TAIWAN COOPERATI
16.5 -0.6024096
7011316
FORMOSA CHEM & F
78
-1.886792
2978321
TAIWAN FERTILIZE
73.8 -0.2702703
2736122
FORMOSA PETROCHE
88.3
-1.008969
907573
28.85 -0.5172414
2589696
TAIWAN GLASS IND
15395850
0 0.5988024
LITE-ON TECHNOLO
9.41
12042796
33.6
LARGAN PRECISION
7.08
31797911
-3.209629
12.05
4977432
CHIMEI INNOLUX C
82.4 -0.7228916
WISTRON CORP
3851992
CHINA DEVELOPMEN
DELTA ELECT INC
207 248.5
-1.37931
0.1872659
11127280
-3.771429
29.05
90 -0.1109878
-6.970849
-1.324503
CATHAY FINANCIAL
26.75
4029797
367
84.2
8916055
CHUNGHWA TELECOM
-1.388889
29.8
46418718
Volume
106.5
HON HAI PRECISIO
-1.72973
COMPAL ELECTRON
TPK HOLDING CO L
PRICE DAY %
FUBON FINANCIAL
-2.24359
CHINATRUST FINAN
TAIWAN MOBILE CO
NAME
9860989
9.09
CHINA STEEL CORP
4166370
-2.620087
152.5
71.5
Volume
80.9 -0.8578431 111.5
CATCHER TECH
CHENG SHIN RUBBE
PRICE DAY %
MOVERS
4
44
2 5160
INDEX 5050.94 HIGH
5150.31
LOW
5050.94
52W (H) 5621.53 5050
(L) 4643.05 24-Aug
28-Aug
August 29, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) gaLaXy enTerTaInMenT
MeLCo CroWn enTerTaInMenT
MgM CHIna HoLDIngS 30.6
22.4
13.00
22.3
12.95
30.4
22.2 22.1
12.90 30.2
22.0
12.85
21.9 Max 22.4
average 22.085
Min 21.9
21.8
Last 21.9
SanDS CHIna LTD
Max 30.5
average 30.15
Min 30.05
Last 30.2
30.0
SJM HoLDIngS LTD
Max 12.96
average 12.891
Min 12.86
Last 12.88
Wynn MaCaU LTD 16.1
27.9
19.0 18.9
27.7
18.8
16.0
27.5
18.7
27.3
18.6
15.9
27.1
18.5
26.9 average 27.464
Max 27.85
Min 26.75
Last 27.7
26.7
18.4 15.8 Max 16.06
average 15.948
Commodities PRICE
DAY %
YTD %
(H) 52W
(L) 52W
WTI CRUDE FUTURE Oct12
96.18
0.743689117
-2.434570907
110.6499939
78.15999603
BRENT CRUDE FUTR Oct12
112.49
0.204881525
7.57387396
123.2900009
89.11000061
GASOLINE RBOB FUT Sep12
314.24
-0.393051857
18.29989083
320.4999924
237.3699903
GAS OIL FUT (ICE) Oct12
983.25
0.02543235
9.493318486
1044.75
799
2.619
-1.281568036
-20.22540359
4.630000114
2.221999884
NATURAL GAS FUTR Sep12 HEATING OIL FUTR Sep12 METALS
312.75
0.50453114
9.77921303
332.9600096
251.5599966
Gold Spot $/Oz
1665.68
-0.2844
6.4393
1921.18
1522.75
Silver Spot $/Oz
30.875
0.0687
10.9215
43.4088
26.085
1525
-1.2146
9.3582
1896.75
1339.25
643.75
-0.9356
-1.492
792.93
537.54 1827.25
Platinum Spot $/Oz Palladium Spot $/Oz LME ALUMINUM 3MO ($)
1918
0.708847467
-5.04950495
2476
LME COPPER 3MO ($)
7640
-0.579087774
0.526315789
9304
6635
LME ZINC
1879
0.912996778
1.842818428
2311
1718.5
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Nov12 CORN FUTURE
Min 15.8
Last 16.02
Dec12
16475
0
-11.9454837
22450
15236
15.59
-0.032061558
2.532061822
17.5
14.15499973
797.75
-0.374648767
36.07675906
849
499
WHEAT FUTURE(CBT) Dec12
average 18.7
Last 18.72
Min 18.32
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
(L) 52W
1.0857 1.6455 0.9972 1.4547 84.18 8.0413 7.8077 6.406 57.3275 32 1.3199 30.716 44.35 9662 88.637 1.24736 0.88845 9.2718 11.678 111.94 1.0311
0.9388 1.5235 0.7712 1.2043 75.35 7.9823 7.7526 6.2769 45.785 29.87 1.2021 28.911 41.57 8507 72.057 1.1002 0.77553 7.7018 9.6245 94.12 1.0288
MACAU RELATED STOCKS (H) 52W
(L) 52W
3.25
1.88
6942359
153.6999969
CROWN LTD
9.08
-0.3293085
12.23733
9.29
7.47
915927
25.5
19.23999977
AMAX HOLDINGS LT
0.061
0
-29.88506
0.119
0.055
0
102.25
64.61000061
BOC HONG KONG HO
24.65
1.02459
33.96739
24.95
14.24
8829434
CENTURY LEGEND
0.227
0
-1.30435
0.335
0.204
0
3.1
-2.515723
10.71429
3.62
2.3
9000 20695150
629.5
1760.5
1115.75
COFFEE 'C' FUTURE Dec12
166.7
-0.388407529
-29.36440678
285.6499939
SUGAR #11 (WORLD) Oct12
19.62
0.306748466
-14.06044678
COTTON NO.2 FUTR Dec12
76.13
-0.013133701
-13.33105647
NAME
CHEUK NANG HLDGS
World Stock MarketS - Indices YTD %
(H) 52W
1.6456 1.5827 -2.0363 -3.2251 -2.1128 0.1377 0.1483 -0.9145 -4.7543 0.8309 3.4962 1.0513 3.7609 -5.0267 -3.8093 1.3063 4.9094 2.317 3.3154 1.1263 0.0097
25.45454
953.25
42.43304962
DAY %
YTD %
7.392996
21.94444444
-0.203636364
PRICE
-0.2116 -0.1581 0.1149 0.1277 0.1909 0.0038 0.0026 0.0598 -0.0449 -0.0959 -0.1437 -0.03 -0.0497 -0.1571 0.3851 -0.0042 -0.2832 0.1723 -0.1188 0.0609 0
2.76
-0.368794326
COUNTRY
DAY %
1.0377 1.5789 0.9576 1.2543 78.57 7.9886 7.7559 6.3531 55.7138 31.29 1.2528 29.964 42.251 9549 81.538 1.2011 0.79439 7.95 10.0198 98.55 1.03
ARISTOCRAT LEISU
878 1715.25
SOYBEAN FUTURE Nov12
NAME
18.3 Max 18.94
CURRENCY EXCHANGE RATES
NAME ENERGY
(H) 52W
(L) 52W
PRICE
DAY % YTD %
VOLUME CRNCY
CHINA OVERSEAS
17.9
-1.648352
37.90447
19.16
9.99
CHINESE ESTATES
9.4
-0.8438819
-24.8
13.68
8.3
0
CHOW TAI FOOK JE
9.6
-2.439024
-31.03448
15.16
8.4
3770200 385000
EMPEROR ENTERTAI
1.4
0
26.12612
1.48
0.97
FUTURE BRIGHT
1.16
0
176.1905
1.24
0.3
534000
GALAXY ENTERTAIN
21.9
0.6896552
53.79214
24.95
8.69
19371920
DOW JONES INDUS. AVG
US
13124.67
-0.2530786
7.424644
13338.66016
10404.49
NASDAQ COMPOSITE INDEX
US
3073.192
0.1109524
17.96603
3134.17
2298.89
HANG SENG BK
110.5
-0.4504505
19.91318
116.7
84.4
400232
FTSE 100 INDEX
GB
5762.72
-0.2402797
3.417639
5989.07
4868.6
HOPEWELL HLDGS
25.15
-0.5928854
26.63645
25.4
18.56
2580103
HSBC HLDGS PLC
68.4
0.5143277
15.9322
71.8
56
5650404
HUTCHISON TELE H
3.77
-0.2645503
26.08696
3.88
2.53
1889000
LUK FOOK HLDGS I
21.65
0.9324009
-20.1107
42.7
14.7
2140000
MELCO INTL DEVEL
6.18
0
7.10572
9.17
4.3
1280000
MGM CHINA HOLDIN
12.88
0.155521
34.27642
14.804
7.6
428665
4.2
0.4784689
6.220286
5.217
2.887
1300000
DAX INDEX
GE
7007.33
-0.5692839
18.80153
7194.33
4965.8
NIKKEI 225
JN
9033.29
-0.5734481
6.835204
10255.15
8135.79
HANG SENG INDEX
HK
19811.8
0.06631759
7.471959
21760.33984
16170.35
CSI 300 INDEX
CH
2238.411
0.4580819
-4.57557
2907.398
2222.001
TAIWAN TAIEX INDEX
TA
7361.94
-1.423097
4.098651
8170.72
6609.11
MIDLAND HOLDINGS
KOSPI INDEX
SK
1916.33
-0.08029741
4.961822
2057.28
1644.11
NEPTUNE GROUP
0.165
1.851852
48.64865
0.205
0.08
18475000
S&P/ASX 200 INDEX
AU
4359.378
0.3609596
7.46488
4448.5
3840.2
NEW WORLD DEV
9.95
-0.1004016
58.94568
10.96
6.13
5012566
ID
4142.848
-0.07308464
8.395
4234.734
3217.951
SANDS CHINA LTD
27.7
2.214022
26.1959
33.05
14.9
7460298
FTSE Bursa Malaysia KLCI
MA
1647.11
-0.06188832
7.602909
1655.39
1310.53
SHUN HO RESOURCE
1.15
1.769912
15
1.28
0.82
0
SHUN TAK HOLDING
2.82
0.7142857
10.19377
3.892
2.241
5207832
NZX ALL INDEX
NZ
804.59
0.1598395
10.24797
818.513
712.548
SJM HOLDINGS LTD
16.02
0.125
28.10326
18.285
10.079
4903022
PHILIPPINES ALL SHARE IX
PH
3442.97
0.3989164
13.06814
3531.5
2695.06
SMARTONE TELECOM
16.48
-1.199041
22.61905
18.5
9.8
1192101
WYNN MACAU LTD
18.78
0
-3.692308
25.5
14.62
3304433
ASIA ENTERTAINME
4.01
-5.200946
-31.80272
8
2.4
138459
BALLY TECHNOLOGI
44.53
0.3379901
12.56319
49.32
24.74
479061
JAKARTA COMPOSITE INDEX
12.80
HSBC Dragon 300 Index Singapor
SI
583.78
-0.28
17.62
NA
NA
STOCK EXCH OF THAI INDEX
TH
1234.21
0.03890641
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business daily August 29, 2012
Opinion
Japan’s fiscal crisis comes of age Yuriko Koike
Japan’s former Minister of Defence and National Security Adviser and a former chairwoman of Japan’s Liberal Democrat Party
National Diet
H
as Japan’s political paralysis finally lifted? The recent agreement, after a long debate, between the government and leading opposition parties to double the consumption tax – from 5 percent to 8 percent in 2014, and then to 10 percent in 2015 – suggests that it has. But there is aEmbassy real riskofthat the government Ecuador in London will mistake this measure for the end of the reform process. In fact, it is – or should be – only the beginning. By virtually any measure, official Japanese debt is the highest in the world. The total outstanding volume of Japanese Government Bonds (JGBs) is an almost unfathomable US$9 trillion, only just below the US$10.5 trillion in outstanding debt for the full 17-country eurozone, which has more than triple the population. So grim has Japan’s fiscal position become that bond issuance has exceeded tax revenue since 2009. Taxes cover less than half of government spending. And last year’s earthquake, tsunami, and nuclear disaster only made a grim fiscal picture worse by requiring huge new spending on reconstruction. Japan issued a record 55.8 trillion yen (US$693.5 billion), or 12 percent of nominal GDP, in government bonds during the last fiscal year. Of course, Japan’s fiscal problems have been mounting for decades. Annual tax revenue has fallen 30 percent since the country’s property bubble burst in 1989, owing to slow growth and deflation, with tax cuts implemented as stimulus measures during the 1990’s recession playing a subsidiary role. The only reason that Japan has been able to sustain its fiscal position is that 93 percent of its debt is domestically held (with the Bank of Japan now buying close to one-third of the JGBs issued each year). Indeed, in contrast to the foreign capital flight that has so
damaged Europe, willing foreign buyers of JGBs are currently plentiful, pushing interest rates to their lowest levels ever. Moreover, Japan’s private sector – its households and companies – sits atop a mountain of savings, which is mostly used to purchase JGBs. Because the government can still borrow mainly from the Japanese people, its balance sheet remains stable. But, given
Growth presupposes a credible strategy to pare the deficit, which means a plan that recognises the reality of the growing cohort of pensioners
Japan’s aging population, how long can that continue?
Unsustainable debt Most leading Japanese economists believe that the situation cannot be sustained, given that the large number of households formed by pensioners is increasingly drawing down savings. The share of those aged 65 or over has nearly doubled over the past two decades, to 23 percent, compared to 13 percent for the United States and 16 percent for Europe. If this trend continues, as seems likely, the captured market that JGBs have had for decades will begin to shrink dangerously. At that
point, foreign purchasers are unlikely to pick up the slack. In reaching the agreement to raise the consumption tax, the opposition Liberal Democratic Party insisted that the main squeeze on the budget deficit – the amount spent on social-security benefits for Japan’s retirees – begin to be addressed. But the agreement actually does nothing to fix that problem. The large number of elderly and retired people means that spending on health care and social security now consumes 29.2 percent of the budget, a one-third increase since 2000. To meet these demands, Japan’s government has been slashing spending on education and research, the two areas in which the country’s post-war economic rise was forged. And the old jibe that Japan cannot resist building bridges to nowhere if the government is paying rings less true nowadays. Public works and pork-barrel spending fell to 5.1 percent of the budget this year, from 13 percent in 2000. Of course, the tax system will also need to be addressed. Just as Japan’s deficit is monumental by any measure, Japanese income earners are clearly under-taxed. Even after the proposed doubling of the consumption tax, the rate will remain half the 20 percent (or more) that almost all European countries levy. Overall tax revenue is roughly 27 percent of GDP, putting Japan in 28th place among the 35 OECD countries.
Growth needed The government must not overestimate how much revenue can be gained by the consumption-tax increase, and thus how much of the budget hole can be closed. Moreover, it has so far shrugged off any concern that the tax increase might have a chilling effect on consumption, and thus on
economic growth. Hiromichi Shirakawa, the chief economist at Credit Suisse AG in Tokyo, suggests that the revenue increase from the consumption-tax hike will soon begin to evaporate – and disappear completely in 5-7 years. If he is right, the increase will turn out to be little more than a finger in the dyke of Japan’s budget problems. Despite its two decades of economic malaise, Japan remains the world’s third-largest economy, and will grow by about 2 percent this year and 1.5 percent in 2013. Given the economic doldrums in which the world finds itself, that may not seem so bad. But, if Japan is ever to address its fiscal dilemma effectively, it will need to sustain faster growth than that. Such growth presupposes a credible strategy to pare the deficit, which means a plan that recognises the reality of the growing cohort of pensioners. Japanese authorities will also need to launch bold liberalising reforms to unshackle the many areas of the economy that are shielded from competition. These reforms must aim to boost greater workforce participation by women; induce corporations to invest more at home; and increase competition in cosseted sectors of the economy. If any country has the political tools to undertake a programme of comprehensive reform, it is Japan. The unity with which the Japanese population met last year’s disaster demonstrated once again that, when called upon, the national spirit can work miracles. And Japan’s “greatest generation” – the men and women who rebuilt a war-shattered country into an economic powerhouse – should not be deemed unwilling to sacrifice for the greater good. After all, they saved their country once; they are more than capable of doing it again. © 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 29, 2012 business daily | 15
OPINION
Murder case illuminates wires China’s communist problem Business
Leading reports from Asia’s best business newspapers
Jakarta Post
William Pesek Bloomberg columnist
Sharia banks operating in the country will soon be subject to Bank Indonesia’s (BI) new policy regulating minimum down payments for housing and automotive loans, but they may see different limits than those imposed on commercial banks. BI announced it would include sharia banks in its policy to restrict loans, which had entered into effect for commercial banks in June. Housing and automotive loans are limited to a maximum of 70 percent of their total value, while the limit set for motorcycle is 75 percent.
Korea Times Major Korean banks have expanded their presence in Japan by attracting more Japanese companies and individual customers. Total assets at their Japanese branches have risen fast over the past few years since they shifted the focus of their businesses to ethnic Japanese and Japanese firms from Korean firms operating there. They have secured Japanese customers by simplifying lending practices. The rapid growth has gained attention because it came during a prolonged economic slump in Japan and lingering global market uncertainties.
Daily Tribune Philippines’ EastWest Bank has declared a payment holiday to its credit cardholders in calamitystricken areas. Cardholders are given a 30-day extension from their latest payment due date to settle their credit card balances. Aside from the 30day grace period, EastWest shall waive the late payment fees of affected cardholders. This is not the first time that the bank has given a reprieve to flood-hit clients, the first one being in September 2009, when severe flooding affected several areas in Metro Manila.
Bangkok Post The Thai cabinet approved the Finance Ministry’s proposal to raise the excise tax on liquor and tobacco, meaning an immediate increase in the retail price of liquor and cigarettes. The excise tax hike is effective immediately. The alcohol excise tax was increased for rice whiskeys, blended liquors and brandies. The new rate does not apply to beer or wine, which already face maximum taxes. The government expects to get 12 billion baht (US$383.6 million) additional annual revenue.
M
aybe China’s Communist Party needs to think about a name change. Two news items last week remind us that there is nothing classless or egalitarian about the political machine ruling the most populous nation: the sentencing of Bo Xilai’s wife, and hints that China’s wealth gap is bigger than anyone thought. Both are more intertwined than meets the eye and show China has a 1 percent problem that is holding back the other 99 percent. The Bo scandal isn’t often viewed in economic terms. When his wife, Gu Kailai, received a suspended death sentence for killing British businessman Neil Heywood, attention turned to the political fortunes of the former Chongqing Communist Party boss. Instead, it should be on the institutional rot that has befallen the party and the precarious standing of China’s political system after 10 years under departing President Hu Jintao. Bo’s tale is symptomatic of the official corruption and how it stymies much-needed economic and political reform. It cast a bright and unsparing spotlight on the obscene wealth amassed by politicians in a party that is communist in name only. How did Bo, with his modest government salary and a wife he claims didn’t work, live so well and send his son to such pricey schools in the U.K. and U.S.? How did his wife’s sisters come to control a web of businesses valued at more than US$126 million?
Vast financial empires The problem is, politics is proving to be an extremely lucrative field. The Communist Party is the largest political party in the world, claiming some 80 million members. At its core is the 25-member Politburo that includes the allpowerful Politburo Standing Committee. Corruption may not taint every member of China’s inner circle. Yet the vast financial empires being amassed by some and the lack of transparency about wealth among politicians require attention and, where needed, legal action. American lawmakers are paupers compared with China’s. In a February column, I mentioned an eye-popping figure from the Hurun Report, which tracks China’s wealth, that’s worth repeating. The wealthiest 70 members of China’s legislature added almost US$90 billion to their bank accounts in 2011. That increase is greater than the combined net worth of all 535 members of the U.S. Congress, the president and his Cabinet and the nine
Supreme Court justices. Why start a technology company, study science or work in finance when the riches are to be found by rising within the party? As more and more politicians get rich through questionable land grabs, insider trading and oldfashioned rent seeking, there is less incentive to retool the economy. Political will shrinks as overseas bank accounts swell. All that money sloshing around conspires to widen China’s rich-poor divide. Bo was ousted from his post as Chongqing Communist Party secretary in March. Yet here’s a twist: just weeks before, Bo warned that China’s wealth gap had reached the danger zone. He was right. On August 21, we learned that the wealth gap in rural China approached a United Nations warning level for social unrest last year. China’s rural Gini coefficient was 0.3949, slightly less than the UN’s 0.4 warning level, the Xinhua News Agency said, citing a survey by Central China Normal University’s Center for China Rural Studies. A reading of zero suggests absolute equality of income distribution. The further you move toward one, the closer you are to complete inequality. As economic indicators go, this is a bad one for Hu as he prepares to step down.
Hu’s decade Hu’s decade in power has delivered rapid economic growth, but few of the reforms needed to elevate enough of China’s masses from subsistence wages. China hasn’t figured out how to be more than a one-trick economy driven by exports, cheap labour and unsustainable levels of investment. It hasn’t loosened
There is nothing classless or egalitarian about the political machine ruling the most populous nation
up on the Internet or press freedom, raising questions about how a nation innovates while limiting access to Google. It hasn’t devised a strategy to reduce pollution and avoid choking on its economic success. It hasn’t made its leaders more accountable. To China bulls, the Bo case suggests progress on this last front. Bo committed
unspecified economic crimes for which he has been humiliated; his wife was punished, so all is well, they argue. The truth is far more complicated, of course. Many believe Bo’s real crime was his ambition. Until the story broke, Bo was the closest thing China had to a political rock star and a spoiler for its plans to replace Hu with Xi Jinping later this year. Purging Bo, it might be argued, was all about reinforcing discipline and loyalty and maintaining the status quo in a pivotal year. That is part of the problem, especially as the world economy deteriorates. China, understandably, is focused on sustaining growth at 8 percent or more. That seems to mean giving short shrift to recalibrating a lopsided economy. The same could be said of making the political system more responsive to the needs and aspirations of the 99 percent. If the rich keep getting richer at the expense of the poor, China may actually need to go communist. Bloomberg View
16 |
business daily August 29, 2012
CLOSING China to auction cotton reserves
Romanian President resumes duties
The Chinese government will soon auction cotton from its state reserves to meet local demand, but the market impact will be limited as the volume is much smaller than earlier expected, traders said yesterday. The government plans to offer an initial 200,000300,000 tonnes of the crop at a base price of 18,500 yuan (US$2,900) per tonne, traders said, citing a meeting held by the National Development and Reform Commission on Monday. The government holds about 4.4 million tonnes of cotton reserves, including 3.13 million tonnes stockpiled from the 2011 harvest, according to estimates by some analysts.
Romanian President Traian Basescu resumed his duties yesterday, ending a months-long political saga that raised concerns over the rule of law in the ex-Communist country. Mr Basescu returned to his office in presidential palace a day after Romania’s top court’s decision to invalidate an impeachment referendum was published in the official gazette, becoming final. Although 87 percent of those voting in the referendum wanted Mr Basescu removed, he survived the vote as turnout failed to cross the required threshold. The court closed the case in its ruling that results were invalid because of the low turnout.
Apple seeks court ban on Samsung To bar sale of eight Samsung phones in the U.S.
A
pple Inc., following a trial win against Samsung Electronics Co., is seeking a U.S. sales ban on eight models of the South Korean company’s smartphones, including several in its Galaxy line, as well as the extension of a preliminary ban on a Samsung tablet computer. Apple, which won more than US$1 billion after a jury found Samsung infringed six of seven patents at stake in the trial, Tuesday identified the phones it wants barred in a filing with U.S. District Judge Lucy Koh in San Jose, California. Mark Newman, an analyst with Sanford C. Bernstein who used to work at Samsung, said the effect on Samsung’s sales will be negligible because the company’s newest smartphones aren’t on Apple’s list of devices, which he said will account for less than 1.4 percent of Samsung’s profits next year. The impact would be 6.3 percent if Apple manages to
broaden a ban to newer devices and block 80 percent of all Samsung phones, he said. “Samsung can live to fight another day,” Mr Newman said in a phone interview.
‘A positive’ Not including the S III in any sales ban is “a positive for Samsung,” Mr Newman noted. In a related case in San Jose, Apple is seeking to block sales of the S III. In that case, also before Ms Koh and scheduled to go to trial in 2014, Apple has won a preliminary order blocking U.S. sales of Samsung’s Nexus smartphone. Samsung has asked the U.S. Court of Appeals for the Federal Circuit in Washington to overturn the Nexus ban. With Apple asking for Samsung to pay a US$30 licensing fee for each handset the company sells, losing the sales of the handsets Apple is trying to get banned would be less harmful to
the company’s financial performance than paying the licensing fee, he said. “If that was applied globally, it would have a massive impact on Samsung.” A royalty of US$5 per device would cost Samsung about US$1.2 billion a year, he added.
Monetary damages The injunction will probably be more important than the monetary damages award, Mark Lemley, a Stanford Law School professor, said in an e-mail after the verdict. “The real question is whether this is enough to derail the momentum the Android ecosystem has gained in the marketplace,” he said. Samsung has used Google Inc.’s free Android operating system to build phones that propelled it to the No. 1 spot in the phone market. Samsung, which also counts Apple as its biggest customer for phone components, began selling its first
Android-based smartphone in 2009. The nine-member jury rejected Samsung’s patent counterclaims against Apple, the world’s largest company by market capitalization, and its request for damages. The jury also determined that all of Apple’s patents at stake in the trial were valid. Apple also won findings that Samsung devices diluted the value of its so-called trade dress, or how a product looks. Samsung said in an August 24 e-mailed statement it will ask the judge to reverse the verdict. If Ms Koh doesn’t overturn the award, Samsung said it will appeal. Samsung yesterday asked Ms Koh to suspend final judgment in the case – which is required before any sales ban can take effect – until she rules on the company’s filings challenging the verdict. The “verdict should not be viewed as a win for Apple, but as a loss for the American consumer,” Samsung said. “It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies.” Bloomberg
G20 concerns grow on surging food prices Emergency measures pending September U.S. crop report
Anxiety rising after poor crops in Russia and Black Sea
G
20 nations taking stock of the third global food price surge in four years will wait for September’s crop report from the U.S. Department of Agriculture before deciding whether to take joint action on the issue, France’s farm minister said yesterday. Senior officials held a conference call on Monday on rising prices after drought in the United States and poor crops from Russia and the Black Sea breadbasket stirred new fears about food supply and inflation. “There will be a communication at the end of September. I will wait
for the results given by the United States around September 12 on the latest estimates for corn supplies,” French Agriculture and Food Minister Stephane Le Foll told BFM TV. The decision to wait for the USDA report was taken at a conference call between senior officials of France, the United States and G20 president Mexico on Monday. Representatives from the United Nation’s Food and Agriculture Organization (FAO) and the World Bank were also on the call, the minister’s spokesman said. The head of the FAO called the G20 on Monday for coordinated action to
ease worries about food prices. If G20 leaders decide the situation needed international intervention, France could trigger an emergency meeting of the socalled Rapid Response Forum created by the G20 last year to deal with surging world prices. However, its main tool would be limited to talks to avoid unilateral trade restrictions by large producing countries that could lead to surge in prices, such as the one seen after Russia banned exports after a drought slashed its crops in 2010. Le Foll also blamed speculation
for the surge in prices and reiterated calls for taxes on financial transactions. “There have been transfers, speculators leaving other markets to come to food markets. We need to stop this,” he said. “We need to tax financial transactions in any case,” he said, also calling for position limits on derivative markets. France had already called for similar moves when negotiating over G20 agriculture last year but G20 members had failed to reach an agreement. Reuters