Macau Business Daily, August 31, 2012 by Business Daily

GDP growth slows sharply in Q2 G

ross domestic product – an indicator of economic performance balancing output against imports – expanded by 7.3 percent in the second quarter of 2012. That was under half the first quarter’s year-on-year GDP growth of 18.6 percent. The government blamed the deceleration in the second quarter on slowing gaming revenue and slowing per-capita spend by visitors. But if that’s failure then most communities would happily swap places with Macau. The British economy shrank by 0.5 percent year-on-year in the second quarter weighed down by domestic austerity measures and the continuing European

debt crisis, while even the United States only managed a modest 1.7 percent growth from April to June. Commenting on the Macau numbers, the Statistics and Census Service said: “…with declining visitor arrivals, slower growth in gross gaming revenue and per-capita spending of visitors, exports of services increased by just 5.7 percent year-on- year, far lower than 19.2 percent in the first quarter; in particular, exports of gaming services increased by 6.2 percent and total visitor spending [net of gambling spend] rose slightly by 2.5 percent.”

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HANG SENG INDEX 19670

19620

Melco International profit up 135 pct

Provident fund – but not until 2014 Page 5

19570

Scrap dismissal payment cap: union Page 6

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19520

August 30

Fisherman’s Wharf lands govt approval

Name

Casino and hotel operator Macau Legend Development Ltd has reiterated its HK$5 billion (US$645 million) expansion for Fisherman’s Wharf. Chief executive David Chow Kam Fai says he has government approval – after a three-year wait. A subsidiary of gambling operator SJM Holdings Ltd is taking a four percent stake in Macau Legend. And the latter might go to the equity markets to finance the four-year project.

Expats face housing headache

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%Day

POWER ASSETS HOL

1.88

CHINA LIFE INS-H

0.97

CHINA COAL ENE-H

0.92

HENGAN INTL

0.13

CATHAY PAC AIR

0.00

SUN HUNG KAI PRO

-3.55

CHINA RES ENTERP

-3.85

CITIC PACIFIC

-4.13

CHINA MERCHANT

-4.60

SINO LAND CO

-4.95

Source: Bloomberg

With average rents doubling in the last few years, expatriates moving to Macau could get a nasty surprise when looking for upmarket housing. Even professionals with a sizable monthly accommodation allowance could find cheap and spacious homes a hard find, real estate agencies warned. And with housing prices still far below neighbouring Hong Kong, the most expensive options, including serviced apartments, are close to being sold out. Page 2 www.macaubusinessdaily.com

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2012-8-31

2012-9-01

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Year I - Number 110 Friday August 31, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

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business daily August 31, 2012

macau

No bargains in expat housing Expatriates face a tough time finding good housing for reasonable rents Xi Chen

xi@macaubusinessdaily.com

The rent for a standard flat at The Waterside is between 55,000 patacas and 60,000 patacas a month

xpatriates that move here hoping for cheap and spacious housing are likely to be disappointed, and employers should manage their expectations before bringing them in, says the managing director of Ambiente Macau Ltd, Suzanne Watkinson. Ambiente Macau is an estate agency that finds homes for people from abroad either to rent or buy. It has a “first look” service which gives expatriates the chance to get a feel for Macau before they decide to move. “We work with casinos and look after some of their senior executives. We try to present the best of Macau

to help them to make the relocation decision,” Ms Watkinson told Business Daily. She said there was often a mismatch between staff housing budgets and expectations, even though few expatriates turned down jobs here because of housing. “Expatriates could come in with an 18,000 pataca [US$2,253] monthly housing allowance and realise they still have to pay out of their own pocket to find a satisfactory place to live,” she said. Ms Watkinson said the average monthly rent her clients paid was between 15,000 patacas and

business as usual

Dangerous liaisons

22,000 patacas. Apart from paying more than their budget allows, expatriates may also have to deal with absentee landlords, who cannot help when the home needs maintenance or repair. Serviced apartments are an option, but the city has a limited supply, which means they often command even higher rents. The rent for a serviced flat in Lot W in Ocean Gardens on Taipa is typically about 25,000 patacas a month. Ms Watkinson said the place was nearly full.

Cheaper than Hong Kong An asset manager for Sniper Capital Ltd, Karen Lau, told Business Daily that the occupancy rate at The Waterside at One Central, containing perhaps the city’s most expensive furnished flats for long-term lease, had been almost 90 percent in the past few months. Sniper Capital bought one whole tower of One Central in 2006 for US$138 million, gave it designer furnishings and turned it

into The Waterside. The rent for a standard flat there, with an average size of about 2,300 square feet, is between 55,000 patacas and 60,000 patacas a month. Ms Lau said occupancy at The Waterside had gone up from 30 percent just two years ago to almost 90 percent today, and that rents had nearly doubled. Space in The Waterside, despite costing HK$24 a square foot, is still only about half the price of comparable space in Hong Kong, which rents for about HK$50 a square foot. Centaline (Macau) Property Agency Ltd sales agent Simon Zhou told Business Daily that rents had practically doubled in the past two years. According to a recent Jones Lang LaSalle report, rents increased by 15 percent in the first half of this year alone. Ms Lau and Ms Watkinson both expect more expatriates to come to live and work here in the next few years, in view of the number of casino resort and infrastructure projects. Their main challenge, Ms Watkinson said, would be finding a satisfactory home.

Paulo A. Azevedo pazevedo@macaubusinessdaily.com

It should be obvious that the links between the government, the business sector and the Legislative Assembly should be the most transparent in Macau. The decision to offer a job to renovate the secretary’s offices (our ministers) by a direct ruling to a company led by a member of the Legislative Assembly (our parliament) – a body that is seen as a supporter of most of the government’s decisions – is unacceptable. The government is wrong if it thinks these poor decisions are of no consequence. It is a bad signal to the public, shows weak leadership and must be stopped. Legislator Fong Chi Keong, who owns Man Kan Construction Co, is indirectly elected to the assembly by his peers in the construction sector. He too should avoid this kind of business. His company should certainly be allowed to win the contract for renovating the government office building, a job worth 44 million patacas (US$5.5 million), but only through proving the company’s quality in a public tender. Accepting the business in this fashion gives an impression to the public that he is in the assembly to maintain the company’s influence and thus be awarded with similar deals. Far worse, in my opinion, will be the damage to his image among the people that elected him. What will other developers think, now they know that their representative gets contracts directly from the government? Turning to the justification provided by the Land, Public Works and Transport Bureau, I am not surprised. The bureau was asked why the contract was handled to Man Kan Construction. They answered that it was a specialised job with interiors to be renovated, works to improve fire prevention, to upgrade security and air conditioning. This work must be important. Perhaps the bureau is concerned that the work done by other developers would put the government secretaries at risk in case of a fire or air-conditioning leak? I do not believe the government gave the job to a member of the legislature – that has the task of keeping a critical eye on the government’s projects and decisions – with bad intentions. I am sure the government acted as it did because it does not think this kind of behaviour should be avoided. That is why this case – like many others before it – is worse than it seems. The government’s ignorance about what is appropriate behaviour is so obvious that I fear what might be found if someone with know-how and guts started digging into administrative procedures.

Expatriates could come in with an 18,000 pataca monthly housing allowance and realise they still have to pay out of their own pocket to find a satisfactory place to live Suzanne Watkinson, managing director of Ambiente Macau

August 31, 2012 business daily | 3

MACAU

GDP growth slows sharply in second quarter But still four times the expansion seen in sluggish U.S. economy Associate Editor

ross domestic product for the second quarter of 2012 expanded by 7.3 percent year-on-year in real terms said the Statistics and Census Service. It’s under half the first quarter’s yearon-year GDP growth, which reached 18.6 percent according to the latest revised figures. But the second quarter figure is still impressive compared to the 1.7 percent GDP rise seen in the United States in the same period, or the 1.2 percent contraction in Portugal’s GDP during the second three months of 2012. The main reasons for the Macau economy’s relatively weaker second quarter were decelerating expansion in exports of gaming services, total visitor spending and investment, the government said. Gross revenue from casino games rose 13.4 percent in the second quarter mainly on slowing VIP gambling according to figures from the Gaming Inspection and Coordination Bureau. In the first quarter, gaming revenue expanded by 27 percent year-on-year. “…with declining visitor arrivals, slower growth in gross gaming revenue and per-capita spending of visitors, exports of services increased by just 5.7 percent year-on-year, far lower than 19.2 percent in the first quarter; in particular, exports of gaming services increased by 6.2 percent and total visitor spending [net of gambling spend] rose slightly by 2.5 percent,” said the statistics bureau.

Matching expectations In July Francis Tam Pak Yuen, Secretary for Economy and Finance, predicted GDP expansion in single digits for the latter part of 2012. In the first half year of 2012, GDP expanded by 12.6 percent in real term, yesterday’s data show. “GDP growth figures are closely correlated to gaming turnover and visitor arrivals, so there are no surprises here,” Henry Brockman, chairman of the British Business Association of Macao told Business Daily.

Gaming analysts and casino executives point out the deceleration in gambling growth is in part a function of a big denominating number – year-on-year expansion managed 60 percent in 2010 and 40 percent in 2011. But it’s also linked to macroeconomic conditions beyond Macau’s control, including a slowing in China’s exports thanks to the continuing financial crisis in the European Union and to a smaller extent the United States. But Macau residents – enjoying unprecedented job security thanks to the still booming casino industry and the government’s constraints on imported labour – are still spending strongly. Private consumption in the quarter remained robust, with a 12.8 percent hike year-on-year. The statistics bureau cited “favourable employment conditions, rising total employment and working income” as the reason. Macau’s unemployment rate for May to July receded to 2.0 percent, down by 0.1 percentage point over the consecutive April to June period.

Lingering inflation A more troublesome statistic – the city’s year-on-year inflation rate – was also down for the second consecutive month to 6.04 percent in July from 6.19 percent in June, after economic growth moderated along with food costs. But Mr Brockman suggested inflation needed to fall further. “Inflation is still worryingly high.

7.3 %

Gross domestic product growth in Q2

GDP growth in Q3 and Q4 likely to be single digits, government warns

In my opinion we could do with a period of more modest growth in order to dampen inflationary expectations,” he stated. The government said the main measure of investment – increase in gross fixed capital formation – narrowed substantially to 11.6 percent year-on-year. Private investment decreased by 6.3 percent, as construction and equipment investment shrank by 8.1 percent and 0.6 percent respectively. But government investment soared by 187.9 percent, mainly due to the contribution of the total 9.8

billion patacas (US$1.23 million) cost of construction – spread over several years – of the new Hengqin campus of the University of Macau, and the money spent on building new public housing. With the end of the month falling today business leaders are already turning their thoughts to the third quarter GDP numbers. “Third quarter GDP growth looks likely to be acceptable in isolation; the question is, where is the trend going? Will we see even lower growth in Q4? If so, that could be worrying,” says Henry Brockman of BBAM.

Polytec to start final Areia Preta projects Vítor Quintã

vitorquinta@macaubusinessdaily.com

ork on the last two housing projects of property developer Polytec Asset Holdings Ltd in Areia Preta should begin this year, the company says. Polytec told the Hong Kong stock exchange on Tuesday that the government has approved the architectural plans for its project on Pearl Horizon plot P, next to La Baie du Noble, and its smaller project on plots T and T1 near the Areia Preta health centre. Construction work on the Pearl Horizon plot is scheduled to begin in the last quarter of this year and the company is completing the formalities before starting the foundation work

on plots T and T1. The Pearl Horizon plot will be developed in phases. Several residential towers, a large shopping mall and a clubhouse, with a combined floor area of 669,700 square metres, will be built on a on a site covering 68,000 square metres. The smaller project will be on a site covering 17,900 square metres. It will have housing blocks and a few shops, with a combined floor area of 195,600 square metres. Polytec expects the first phase of the Pearl Horizon project and all of the project on plots T and T1 to be ready by late 2015 or early 2016. The company owns 80 percent of

the projects and has high expectations. It says both sites are favourably situated adjacent to the landing point of the Hong Kong-Zhuhai-Macau Bridge. The bridge is due to open by 2016. It will land on an artificial island being created to the northeast of the peninsula. Polytec’s major shareholder, Kowloon Development Co Ltd, told the Hong Kong stock exchange on Tuesday that although measures taken by the government here early last year had cooled the housing market, the inclination to buy “has appeared to improve somewhat” since the second quarter of this year.

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business daily August 31, 2012

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HOSPITALITY MICE drought The meetings, incentives, conferences and exhibitions industry, or MICE, has been singled out as one of the great hopes for economic diversification. When first made part of the diversification strategy, the industry seemed to have great potential. It was expected to build on the opportunity created by the expansion of the gaming industry, using the gaming industry’s accommodation and leisure facilities to attract more tourists to the city for purposes other than gambling. The figures for the second quarter of this year are cause for concern. The data used in this analysis have been collected by the government since 2009 only.

The initial figures correspond to the slump in the world economy in 2009. After that the results seemed promising, suggesting a rise in the number of events held here. As many events are government and corporate meetings, which were likely to happen in any case, the picture the figures paint is blurry. But 2010 certainly seemed to portray a bright future for the industry. That promise was not borne out by the figures for last year. Even allowing for seasonal fluctuations, the trend is unmistakably downwards.

Fisherman’s Wharf gets SJM funds for expansion Macau Legend could go public to secure financing for the redevelopment of Fisherman’s Wharf, even after getting investment from SJM Vítor Quintã

vitorquinta@macaubusinessdaily.com

he government has given overall approval to a HK$5 billion (US$645 million) redevelopment of the Fisherman’s Wharf theme park, Macau Legend Development Ltd announced yesterday. Macau Legend, a casino and hotel operator, also said it would sell 4 percent of its stock to a subsidiary of Stanley Ho Hung Sun’s SJM Holdings Ltd for HK$480 million. Macau Legend chief executive David Chow Kam Fai said the investment by SJM led down a road that could end with a share listing. “There are a number of options to fund our redevelopment plan, such as getting a loan, for which I think we could get the support from all commercial banks in Macau,” he said. The company could also issue bonds but Mr Chow said: “I think the better option would be to get it in the [equity] market”.

HK$5 billion Redevelopment investment in Fisherman’s Wharf

It took three years to get approval for the Fisherman’s Wharf expansion plan, owner David Chow says

He said an initial public offering in Hong Kong, New York, London or Singapore could be on the cards. “We will negotiate the best decision,” he said. SJM’s investment will leave Mr Chow and his mother, Lam Fong Ngo, with 58.3 percent of the company. Macau Jockey Club managing director Li Chi Keung will own 18.4 percent. The club belongs to SJM. Mr Ho’s third wife, Ina Chan Un Chan, will own 17.9 percent. Mr Chow said a redevelopment plan for Fisherman’s Wharf had been announced in 2009 but that it had been given government approval only now. “The overall project has already

been approved and now we are just working on the detailed plans,” he said. The park will be expanded to include a dinosaur museum with fossils lent by the state-owned China Fossil Preservation Foundation, a marina with space for 30 yachts and two hotels with a total of 650 rooms. Mr Chow said the first phase, which would include 60 percent of the new attractions, would be ready by 2015, and that the entire redevelopment would be completed the year after. Fisherman’s Wharf will lease about 169,000 square feet of retailing and restaurant space to seven companies, including Yamada-Denki Co Ltd, one of Japan’s largest consumer electronics retailers.

Mong In complex to house 346 families Social homes scheme welcomes new tenants next month A big concern is the number of events that usually bring in more people for longer periods. The second chart excludes the various institutional and corporate meetings and focuses on the three types of event that are more likely to make the tourism industry healthier: conferences, exhibitions and incentives. The number of conferences peaked toward the end of 2009 and has been declining ever since – leaving aside slight, occasional increases. The number of exhibitions has been more stable, but is only just holding on. The second quarter of this year was the worst yet for these events. Incentive travel seems to have been a fad that lasted for about one year before fading away. With about 10 events of each type held each quarter, the results are well below expectations. J.I.D.

new social housing complex Mong In, located on Rua de Francisco Xavier Pereira as part of the Mong Ha neighbourhood, is ready to receive its new tenants. The 33-storey building will provide a total of 346 two-bedroom units at an average size of around 40 to 50 square metres, the government said yesterday. The Mong In building will welcome its new tenants starting next month. The units in the complex will be allocated based on the applicant’s position on the waiting list, deputy director of the Housing Bureau Kuoc Vai Han told reporters.

Currently there are still 6,667 families waiting for social housing. Each family should be allocated a unit within four years of application, a previous government statement said. The building will have 385 parking spaces for light vehicles and motorbikes. Mong In’s third floor is an outdoor public space that includes a children’s playground, a badminton court, a table tennis area, some chessboards, and some exercise equipment. The building is also designed with energy-saving systems as well as disabled facilities. Deputy director of the Land, Public Works and Transport Bureau Shin

Chung Low Kam Hong, told Business Daily that the construction quality of the building was satisfactory and has met the government’s standard. The contractor for the project was San You Development Co. Ltd, a local property group that is behind projects such as The Residencia and The Manhattan. The construction started in the last quarter of 2010 and was finished in under two years, Mr Low said. He did not reveal if the government is planning to release more social flats in the near-term or if more social units are being planned. X.C.

August 31, 2012 business daily | 5

MACAU

Melco International profit up 135 pct Rise mainly due to 34 pct stake in casino operator MPEL Associate Editor

elco International Development Ltd – a 33.6 percent shareholder in Macau casino operator Melco Crown Entertainment Ltd (MPEL) – posted first-half profit of HK$408.4 million (US$52.6 million). It was a 135 percent increase on the HK$173.8 million profit achieved for the six months ended 30 June 2011. The growth was mainly due to the improved performance of MPEL during the period. Melco’s share of profits from MPEL in the reporting period rose 187 percent from HK$198.8 million to HK$569.6 million, even though Melco reduced its stake in the Macau casino operator by 0.1 percent during those six months. Basic earnings per share attributable to Melco International stakeholders rose 135 percent to HK$0.332 compared to HK$0.141 per share for the equivalent period in 2011. Another of Melco’s core gaming businesses is Entertainment Gaming Asia Inc., (formerly known as Elixir Gaming Technologies) a Nasdaqlisted company in which it has a 38.3 percent stake. The unit operates slot machines in the Philippines and Cambodia on a revenue participation basis with local casinos and makes casino chips and plaques under the Dolphin brand. Melco said in its first half results filed with the Hong Kong Stock Exchange that the unit’s 670 slot machines at the NagaWorld casino in Phnom Penh, Cambodia, achieved an average daily net win of approximately

US$260 (2,077 patacas) per machine. Entertainment Gaming Asia also opened its own boutique-scale gaming operation – Dreamworld Casino in Pailin, Cambodia on the border with Thailand – in May and is planning to open a second venue in the first quarter of next year.

Lottery business Melco’s other core gaming business is lottery management in China. It holds a 35.3 percent interest in MelcoLot Ltd, a supplier of lottery terminals and other equipment to the mainland’s China Sports Lottery. Melco said its revenue in this business fell 40 percent in the first half. It blamed factors including a delay in China Sports Lottery’s equipment procurement process and an operational restructuring. However Melco said China’s new tighter rules on lotteries and equipment and the move from paper to electronic lotteries would present fresh growth opportunities for companies such as MelcoLot that were already fully compliant with international and local technology and management standards. Outside the reporting period, on August 14, Melco announced it and Power Way Group Limited, a British Virgin Islands company in which Melco has an 11.7 percent stake, were underwriting a share issue for MelcoLot. Business Daily understands from sources that Power Way Group Ltd is linked to Ningbo Powerway

Lawrence Ho Yau Lung, Melco International chairman

Group, a Chinese state enterprise specialising in researching, developing and manufacturing precision copper alloy wires and bars. During the first half Melco reduced its interest in Mountain China Resorts (Holding) Ltd, to 18.9 percent from 28.7 percent following the write off of a US$23 million loan to MCR. The tourism

New loan keeps Ponte 16 in the red With its VIP gambling revenue growing, Ponte 16 resort saw its operating profit rise in the first half Vítor Quintã

vitorquinta@macaubusinessdaily.com

onte 16 casino resort remained in the red during the first half of this year even though its operating profit rose, mostly due to the costs of financing the resort’s third phase. Success Universe Group Ltd, SJM Holdings Ltd’s partner in the joint venture, told the Hong Kong Stock

Exchange on August 29 that the resort’s earnings before interest, taxes, depreciation and amortisation rose 11 percent to HK$142.7 million (US$18.4 million). Ponte 16’s business was “driven by the successful growth of the VIP gaming segment,” Success Universe said.

HK$142.7 million

Ponte 16’s operating profit in first half of 2012 At the end of June the casino had 109 gambling tables but only 18 were VIP tables, with a further 9 high-limit tables. Success Universe’s HK$0.3 million

Ponte 16 is still waiting for government approval for its third phase, a riverside commercial expansion

firm owns and operates the largest ski resort in China – Sun Mountain Yabuli Resort in Heilongjiang province. Melco said however that the total number of resort guests, including skiing only guests, increased by approximately 30 percent over the same period last year while revenue increased by approximately 28 percent.

loss from its 49 percent share in the property, was due to bank charges incurred for new loan facilities. The joint venture announced in April the signing of five-year syndicated loan facilities amounting to HK$1.9 billion and 400 million yuan (502.7 million patacas) with 11 financial institutions. Some of it is to fund the construction of the third phase of the Ponte 16 development. The riverside expansion, which will include a shopping mall, restaurants and 20 gambling tables, should be launched in the second half of this year, Success Universe said. The Hong Kong-based group is still waiting for government approval for the project. Still, the company is “confident” on the positive second half, due namely to the ‘Michael Jackson’s Wardrobe – Gorgeous 25 Years’ exhibition in Chongqing, Changsha and Wuhan, featuring over 50 items of pop singer Michael Jackson. Success Group’s overall revenue rose 11.9 percent during the first half to HK$853.7 million and its loss shrank by 23 percent to HK$30.6 million.

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business daily August 31, 2012

macau

Central provident fund start date pushed to 2014

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SMEs: concerned, not alarmed

Enabling law due in place by end of next year

One of the worries commonly voiced in the present economic climate is about the future of small and medium enterprises, particularly the independent, family-run businesses that often support extended families and are important for social resilience. These businesses can be labour-intensive and so help keep unemployment low. Some retailers are prospering, mainly those catering to visitors to a greater or lesser degree. But several traditional businesses have closed in the face of rising labour costs and increasing rents. The Monetary Authority of Macau’s latest data on credit to SMEs gives some cause for concern..

The amount of new credit offered to SMEs fell steeply in the first half. It was about 60 percent less in the first half of this year than the second half of last year, and about 30 percent lower than at the same stage last year. This suggests a contraction in both the activity of SMEs and investment in them. However, these figures must be viewed with some caution, as they follow a peak in new credit in the second half of last year. And the total amount of credit to SMEs in the first half of this year was only 7 percent below the peak it reached in the second half of last year. Other factors may be at play, such as the business cycle, expectations of slower economic growth or consolidation.

The indicators in this chart reinforce the need for caution in interpreting the data. The percentage figure for credit to SMEs as a share of all credit to the private sector is fairly typical. Although it declined a little in the first half of this year, it was not far off what it was in earlier periods. And the percentage of credit to SMEs regarded as bad debt is hardly alarming. It even declined slightly in the past two years. J.I.D.

Tony Lai

tony.lai@macaubusinessdaily.com

he Legislative Assembly gave its unanimous approval yesterday to a law establishing the principle of a central provident fund. It will mean Macau’s workers and their employers setting aside money monthly toward the cost of the employees’ retirement. But the new law doesn’t immediately set the clock ticking on the actual establishment of the fund. “Right now we do not have the methods and political conditions to establish the central provident fund,” Secretary for Social Affairs and Culture Cheong U told the assembly during the final reading of the law. “But this law acts as a legal basis for the future of the fund.” But some legislators slammed the government for lagging behind the needs of a community that will have many more elderly in the coming decades Nonetheless Mr Cheong said he expected the administration to finish drafting the law on the nonmandatory central provident fund regarding workers’ and employers’ contribution and savings investment by the end of next year. Social Security Fund president Ip Peng Kin said they would pass the proposal to the Standing Committee for the Coordination of Social Affairs

for discussion soon but no public consultation would be carried out. Whether the fund would become mandatory will depend on the experience gathered during the first few years of the non-mandatory fund operation, he said. The assembly urged the authorities to quicken their work on the fund. It will serve as the second tier of a two-tier system to fund citizens in their retirement. The government first mentioned the idea in 2007. “There’s still a long way to go,” said legislator Melinda Chan Mei Yi, adding that the government should also consider how the central provident fund connects with the first tier of Macau’s welfare system – the social security fund.

Legal aid “There is a gap between the government’s timetable [on the fund] and the public expectation… and the government should not only hang around in the stage of discussion and research,” complained legislator Ho Ion Sang. All private accounts in the central savings system founded in 2009 will be transferred to the new provident fund accounts. The new enabling

law also reduces the age at which a person can open a provident fund account from 22 to 18. But only permanent local residents aged 22 or above staying in Macau over 183 days a year can receive an injection of 10,000 patacas (US$1,250) from the government to activate the account, as well as possible injections from the public budget surplus. The secretary said the government is still open to suggestions for reviewing the law in future. Also yesterday the assembly passed a law giving citizens the right to legal aid for civil law cases – such as claims of unfair dismissal from work or other contract disputes. But some legislators are concerned it does not set up precise benchmarks for assessing an applicant’s economic difficulties. The law uses a formula to assess economic need based on the applicant’s income and assets, the minimum subsistence index and the average litigation charges. The exact amount would be determined in a later bylaw. The legal aid law will come into effect on April 1, 2013 – instead of January 1 – so that the administration can make necessary preparations, including consulting the Macau Lawyers Association.

Second tier of Macau’s new retirement welfare system now enshrined in law (Photo: Manuel Cardoso)

Weather Beijing 33/22o C Changchun 29/15o C

Harbin 27/14o C

Xian 29/17o C Shanghai 33/27o C Chengdu 28/21o C Kunming 25/17o C Haikou 33/24o C Sanya 32/26o C

Guangzhou 34/25o C

MACAU (13-18 August) Day

Temperature

Humidity

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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 34/26o C

ASIA (today)

Hong Kong 34/25o C

Manila

TOKYO

Jakarta

29/27o C

29/26o C

31/25o C

32/24o C

Macau 32/26o C

Bangkok

SEOUL

K. lumpur

32/26o C

SINGAPORE

26/21o C

33/24o C

taipei

32/26o C

August 31, 2012 business daily | 7

MACAU BNU capital up five-fold The share capital of Banco Nacional Ultramarino SA (BNU) has jumped to 2 billion patacas (US$250 million) from 400 million patacas, owner Caixa Geral de Depósitos SA announced yesterday. The goal is “to support the business expansion of BNU in the Macau SAR,” the Portuguese state-controlled banking group said. Even though BNU’s business grew 13 percent last year, the bank unveiled a growth strategy focused on increasing products and services sold to each customer and exploring new segments, including the small and medium enterprises and merchants segment.

Scrap compensation cap, trade unionists demand Almost 16,000 people sign a petition calling for the removal of the ceiling on compensation for unfair dismissal Tony Lai

tony.lai@macaubusinessdaily.com

he trade unions want the government to remove the cap on compensation for workers who are dismissed unfairly. The Macau Federation of Trade Unions presented to the government on Tuesday a petition containing more than 15,800 signatures which calls for the abolition of the cap. Federation vice-president Ella Lei Cheng I said the cap was unfair to workers as the economy had developed quickly since it was set. The law caps the amount of compensation payable to a worker who is unfairly dismissed at 168,000 patacas (US$21,029).

Trade unionist Ella Lei says the cap on compensation for unfair dismissal is itself unfair

The cap was set in 1997. Since then median monthly pay has more than doubled, from 5,221 patacas to 11,000 patacas. “The government has not taken enough initiatives so far this year to lead the Standing Committee for the Coordination of Social Affairs in discussing important labour topics like the compensation and the social security contribution,” Ms Lei told Business Daily yesterday. Chief Executive Fernando Chui Sai On told the Legislative Assembly this month that compensation for unfair dismissal was in need of review and said it would be on the

Zhuhai to improve Gongbei crossing M

ainland authorities will invest about 220 million yuan (275 million patacas) in improving the Gongbei border crossing so it can accommodate an increasing number of tourists headed to Macau. In the next two or three years, about 130 million yuan will be spent on improving public transport infrastructure on the mainland side of the border and another 90 million yuan on improving the flow of road traffic. The Chinese-language Zhujiang Evening News said the improvements were outlined in a transport plan released earlier this week by the Zhuhai city government. Gongbei is the mainland’s busiest border crossing, with an average of 260,000 people using it each day.

The plan predicts that the opening of the Zhuhai terminus of the Guangzhou-Zhuhai intercity railway and the completion of the Hong Kong-Zhuhai-Macau Bridge will make the crossing even busier. It predicts that 323,000 people a day will use the crossing within three years’ time, rising to just less than 400,000 people using it daily by 2030. The governments of Macau and Guangdong agreed in May to build a new border crossing in Ilha Verde, on land now occupied by the Nam Yuet wholesale market, to ease the pressure on the Gongbei crossing. The Land, Public Works and Transport Bureau said this month that the plan for the new crossing was awaiting Beijing’s approval. T.L.

committee’s agenda for this year. “But this has not been done yet,” Ms Lei said. “So this petition also urges the chief executive to instruct the relevant departments to proceed quickly as there are only four months left.” Ms Lei expects the Standing Committee for the Coordination of Social Affairs to meet soon because its last meeting was in May. The Macau Federation of Trade Unions began collecting signatures on its petition last month, handing it round during meetings and public activities.

The three members of the Legislative Assembly that belong to the New Macau Association proposed last month that the labour law be amended to raise the cap on compensation for unfair dismissal. But Ms Lei said at the time that the trade unions would rather that the Standing Committee for the Coordination of Social Affairs discuss any amendment first.

8 |

business daily August 31, 2012

GREATER CHINA

Wen calls for action on Europe debt Chinese Premier tells Merkel that European nations must step up overhaul

German Chancellor Angela Merkel was in Beijing for talks aimed at boosting trade with China

hinese Premier Wen Jiabao told visiting German Chancellor Angela Merkel that Spain, Italy and Greece must take “comprehensive measures” to prevent a worsening of the euro region’s sovereign-debt crisis. “The main worries are two-fold: First is whether Greece will leave the eurozone,” Mr Wen said yesterday in Beijing, according to a pool report. “The second is whether Italy and Spain will take comprehensive

rescue measures. Resolving these two problems rests with whether Greece, Spain, Italy and other countries have the determination for reform.” Europe’s slump is deepening as governments struggle to restore investor confidence and companies eliminate jobs. Economies are stalling or contracting amid concern about a possible Greek exit from the euro and the ability of Spain and Italy to service their debts. Mr Wen said he was more

confident about the euro area after meeting yesterday with Mrs Merkel. Their meeting coincided with the signing of a US$3.5 billion agreement for the leasing arm of Beijing-based Industrial & Commercial Bank of China Ltd to buy 50 Airbus SAS A320 aircraft, one of more than 10 accords signed yesterday, the official Xinhua News Agency reported. “China definitely has more leverage here,” Fredrik Erixon, head of the Brussels-based European

Centre for International Political Economy, said in a telephone interview. “Europe is really, really keen on getting more market access to China. European companies want to shift sales to growth markets.”

European debt China is willing to keep investing in euro-area debt “on condition of fully evaluating the risks,” Mr Wen said to reporters.

ICBC profit growth slips to 11pct Sluggish economy curbed lending profitability and fee income

ndustrial & Commercial Bank of China Ltd, the world’s biggest lender by market value, clocked a market-matching 11 percent rise in second-quarter earnings yesterday as a short supply of loans helped boost pricing and widened its margins. It was ICBC’s smallest quarterly profit increase since 2009 during the depths of the global financial crisis, according to Reuters’ estimates of ICBC’s quarterly profits. The results underscore the slowing profit growth for Chinese banks as Beijing liberalises interest rates to combat a cooling economy and as the bank regulator cracks down on what are seen as excessive fees. The gradual interest rate deregulation is bringing to an end easy profits from the gap between what depositors are paid and the rate banks charge borrowers. ICBC, China’s biggest lender,

made a net profit of 61.82 billion yuan (US$9.73 billion) in the AprilJune period, according to calculations from half-year results released by the company. This was higher than the 55.69 billion yuan the bank recorded a year ago, and matched expectations for 60.98 billion yuan, based on a Reuters survey of nine analysts. Net profit for January-June was 123.16 billion yuan, higher than the 109.5 billion yuan it recorded in the same period in 2011 and greater than expectations for 122.21 billion yuan, according to the same survey of analysts. Hong Kong-listed shares of ICBC, which has a market value of about US$206 billion, are down about 9 percent so far this year on fears about profit growth and a spike in bad loans. ICBC said its non-performing loan ratio stood at 0.89 percent at the end

of June, lower than the 0.95 percent it recorded at the end of March. Fears have been rising that loans doled out during the 2008-09 financial crisis could sour in large numbers as China’s economy slows. China’s banks, especially the so-called “Big Four” lenders, regularly report non-performing loan ratios that are lower than banks of developing and developed Asian economies. The country’s banks had an NPL ratio of 1.1 percent at the end of 2011, according to World Bank figures. Singapore’s NPL ratio, by comparison, was 1.8 percent, while developing countries such as Thailand reported an NPL ratio of 3.5 percent, said the World Bank. Most fund managers expect NPL ratios in China to rise to about 3-5 percent, which would make it similar to the Indian banking system.

In April, StanChart analysts said investors had priced in NPLs of up to 12 percent. ICBC is the last of the country’s major lenders to report their first-half earnings. Smaller rivals Agricultural Bank of China Ltd, China Construction Bank Corp. and Bank of China Ltd all reported in the

August 31, 2012 business daily | 9

greater china “After I heard her views, it increased my confidence,” Mr Wen said at the Great Hall of the People. “But I must honestly say, the implementation of these measures won’t be completely smooth.” The European Union is China’s secondbiggest export market after the U.S., and shipments are plunging, exacerbating the slowdown in China’s own economic growth. China’s exports to the EU fell 16.2 percent in July from a year earlier, with sales to Italy falling 35.8 percent, according to Chinese customs figures. In addition to winning contracts for German companies, Mrs Merkel is trying to convince Mr Wen and other Chinese leaders that the euro region is a good place to invest. She also met with President Hu Jintao and Vice President Xi Jinping yesterday. Gross domestic product in the 17-nation currency bloc fell 0.2 percent from the first quarter, the EU’s statistics office said on August 14. The euro has depreciated 3.2 percent against the dollar this year after Spain and Cyprus were both forced to ask for external aid in June, joining Greece, Ireland and Portugal. The European currency traded at US$1.2551 at 11.02am in Brussels,

US$3.5 bln Beijing agreed to pay for 50 planes from Europe’s Airbus

HK to accelerate home sales New rules to limit foreigner purchases

Government pledges to speed up the approval of permits for private project sales

ong Kong’s government will accelerate private and public home sales, and start drafting policies to restrict purchases by foreigners as it seeks to address public concern that housing has become unaffordable. The government will speed up the approval of permits for private

project sales and will sell public units originally intended for rental, Chief Executive Leung Chun Ying said in a briefing yesterday. It will also provide more land for public and private housing as part of a 10-point package to cool the housing market. The measures are the toughest since the government in June last

year increased down-payment requirements for some home purchases and foreign buyers. Home prices have increased 12 percent this year, bringing the gain to 47 percent since October 2009, when Mr Leung’s predecessor Donald Tsang first introduced measures to prevent the formation of an asset bubble. “These policies will help stabilise prices,” said Lee Wee Liat, a Hong Kong-based analyst at BNP Paribas. “They’re focusing on flushing out the supply to the market. Developers will try and speed up sales but will be moderate with pricing. The important thing is they’re not trying to stifle demand.” Home prices have recovered from a decline in the second half of last year even as the government lowered its growth forecast for 2012 and as the Chinese economy slows down. Mr Leung took office in July after pledging to boost housing supply to bridge a widening wealth gap. The seven-member Hang Seng Property Index, which tracks developers including Sun Hung Kai Properties Ltd and Cheung Kong (Holdings) Ltd, fell 2.8 percent yesterday, the biggest drop since May 16. Bloomberg

China’s outbound investment skids Chinese direct investment slowed to 8.5 pct in 2011

up 0.2 percent on the day. Mrs Merkel said “it’s very, very important that we regain confidence in all the countries” of the euro region and thanked China for maintaining confidence in the joint currency. Mrs Merkel said she told Mr Wen that euro-area nations are overhauling their economies “and that there is an absolute political will in the euro zone to make the euro a stable currency again”. Bloomberg

ICBC posted its weakest quarterly earnings growth in three years

preceding two weeks. Helping ICBC boost its bottom line was a widening net interest margin, which ticked up 5 basis points to 2.66 percent from 2.61 percent at the end of 2011. Bank of China and China Construction Bank also reported better-than-expected margins. Reuters

hina’s outbound direct investment rose 8.5 percent to US$74.7 billion in 2011, slowing from the year before, government data showed yesterday, but extending a decade-long expansion streak as domestic firms are officially encouraged to venture abroad. Annual growth in 2011 marked a sharp slowdown from an annual increase of 22 percent the previous year. China has been prodding local firms to invest in natural resources abroad and to acquire foreign technology, which helps reduce international payments surpluses and slows the build-up of foreign exchange reserves. Chinese outbound investment grew an annual average of 45 percent between 2002 and 2011, according to figures jointly released by the Ministry of Commerce, State Administration of Foreign Exchange and National Bureau of Statistics. Among the total outward capital flows, investment by non-financial companies reached US$68.6 billion in 2011, rising 14 percent from a year earlier, the commerce ministry said. That is up from the preliminary US$60.1 billion figure released in January. In contrast, investments by financial institutions dropped 29.7 percent to US$6.1 billion during the same period, as the festering European debt crisis exacerbated the volatility in the global financial market, official data showed. “Compared with non-financial companies, many countries have laid some restrictions on foreign investments into their financial sector,” Wang Chunking, a director of the State Administration of Foreign Exchange, told a news conference. The government is targeting a total of US$560 billion in outbound

Beijing is targeting a total of US$560 billion in outbound foreign direct investment in the five years to 2015

foreign direct investment in the five years to 2015. In 2011, developing countries were the biggest recipients of China’s investments, which attracted US$61.2 billion of Chinese capital

KEY POINTS Outbound direct investment pace slows sharply in 2011 Grew at an annual average rate of 45 pct in 2002-2011 Financial firms’ investments hurt by Europe debt crisis

and accounted for 82 percent of China’s total outbound investment. China’s direct investments to Southeast Asia climbed 34 percent to US$5.9 billion, while that to European countries rose 27 percent to US$7.6 billion. China’s outward investments in 2011 accounted for 4.4 percent of total investment by all countries and regions across the globe. China ranked the 6th largest country in new outbound investment in 2011. However, outward direct investment from China was still outstripped by inbound foreign direct investment. Total FDI by non-financial companies in 2011 was US$116 billion, signifying a net non-financial direct investment deficit of US$47.4 billion. Reuters

10 |

business daily August 31, 2012

asia Samsung unveils new Galaxy Note Samsung Electronics Co. unveiled a new version of the pen-equipped Galaxy Note smartphone as it seeks to defend its lead over Apple Inc. The model has a 5.5-inch screen, larger than its predecessor, and runs the latest version of Google Inc.’s Android operating system. The device is loaded with software that recognises handwriting from a digital pen. The updated digital pen will allow consumers to hover over the screen to preview content and will be available for third-party applications. Samsung also unveiled a 16-megapixel camera, called the Galaxy Camera, that runs the latest Android operating system and is able to access the Web via WiFi technology and mobile networks.

Philippines sees growth rate slow Fall in global demand hurts Philippine exports and industrial output

hilippine growth cooled in the second quarter as exports slumped, but strong domestic demand and an ability to increase state spending are still expected to cushion much of Southeast Asia from the worst of the global downturn in coming months. Gross domestic product increased 5.9 percent in the three months through June from a year earlier, compared with a revised 6.3 percent gain in the previous quarter, the National Statistical Coordination Board said in Manila yesterday. President Benigno Aquino has increased spending and sought higher investment to develop local industries and reduce the nation’s

US$1.81 billion The value of remittances in June

reliance on remittances, securing pledges from companies including Glencore International Plc and Gazasia Ltd. The economy also benefited from lower interest rates, as Bangko Sentral ng Pilipinas cut its benchmark to a record-low 3.75 percent this year to counter faltering global demand. “The Philippines has definitely grown stronger,” said Edward Teather, a Singapore-based economist at UBS AG. “With the economy appearing to have great momentum, we’re looking at the central bank to hold rates for the rest of the year.” The Philippines is ready to support growth and will continue to accelerate spending as the nation faces risks from a weaker global economy and a slowdown in China, Economic Planning Secretary Arsenio Balisacan said yesterday, adding that leading indicators in the third quarter remain “respectable.” Mr Aquino plans to increase state spending to a record this year as he aims to spur growth to as much as 7 percent in 2013 from a goal of 6 percent in 2012 to boost incomes. The economy expanded 6.1 percent in the first half, yesterday’s report showed.

Remittance up While exports weakened in the quarter, along with those of the rest of Asia, Philippine consumer spending actually accelerated, thanks in parts to legions of Filipinos working overseas,

dutifully sending money home. Remittances, which make up the equivalent of 10 percent of GDP, increased 4.2 percent to US$1.81 billion in June, and the central bank forecasts an increase of 5 percent this year compared to 7.2 percent in 2011. Banks’ loan growth leapt around 15 percent in June from a year earlier, indicating little softness in business or consumer confidence despite newspaper headlines warning of risks from slowdowns in Europe, the U.S. and China.

Construction climbed The Philippine government awarded contracts to build about 9,300 classrooms this month as part of efforts to draw more than US$16 billion of investment in infrastructure. Construction rose 10 percent in the second quarter from a year earlier and services expanded 7.6 percent, the report showed. Mr Aquino is also accelerating asset sales, with an aim of raising a b o u t 2 b i l l i o n p eso s ( U S $ 4 7 million) each in 2012 and 2013 from privatization. Standard & Poor’s raised the nation’s credit rating to one step below investment grade in July, citing easing fiscal vulnerability as debt is reduced. “The potential for an economic transformation in the Philippines is clearly visible,” Aninda Mitra, a Singapore-based economist at Australia & New Zealand Banking

Group Ltd, said before the report. “Domestic demand is holding up well, and it demonstrates that the economy is now less sensitive to global developments.”

Re-rating going on Riding a wave of strong domestic consumption, higher public spending and investment inflows, much of Southeast Asia was strikingly buoyant in the second quarter, with Indonesia, Malaysia and Thailand all posting stronger-than-expected economic expansions. While export data may not be pretty in coming months, economists say longer-term fundamentals remain

Noda’s job in jeopardy after splitting party Ouster plan pushes rate premium to April high

oshihiko Noda has accomplished more than Japan’s five previous prime ministers in his first year in office. He may still lose his job, after dividing his party, outraging anti-nuclear activists and raising taxes. Mr Noda split the ruling Democratic Party of Japan with legislation doubling the sales tax to address record debt, a measure policy makers had struggled to pass for a decade. Responding to power shortages that threatened economic recovery, he reactivated two atomic reactors, risking a backlash from a public still traumatised from last year’s Fukushima disaster. Now, Mr Noda must convince a weakened DPJ to keep him as its head in a party leadership contest next month. He also faces an emboldened opposition seeking elections as soon as

October amid public sentiment toward both major parties that has soured and left voters looking for alternatives to change a system that has produced six premiers since 2006. “No prime minister seems to satisfy the Japanese public for long – but the others lost popularity with bad or incompetent policies,” said Ellis Krauss, a professor of Japanese politics at the University of California, San Diego. “Noda deserves a lot of credit,” he said. “However, his party is fractured, and if it loses power it may fracture further.” Mr Noda shelved measures in his party’s campaign platform to forge a deal with the Liberal Democratic Party to approve the tax bill, raising the risk of a challenge to his leadership at the DPJ convention on September 21. The

PM Yoshihiko Noda shelved measures in his party’s campaign platform to forge a deal with the LDP to approve the tax bill

LDP, which governed for half a century until losing in 2009, gave its support in exchange for Mr Noda’s pledge to call elections “soon”. The first increase in the sales levy since 1997, the legislation doubles the tax to 10 percent by October 2015. One price of the deal was setting aside DPJ promises for minimum guaranteed pensions and revamped health-care funding for people 75 years and older. “We have to prevent his reelection,” DPJ legislator Yukio Ubukata said. “It’s unfortunate, but Mr Noda

has rapidly abandoned the DPJ to make it more like the LDP.” That sentiment already drove more than 50 DPJ lawmakers to join power broker Ichiro Ozawa in leaving the party, and Mr Ubukata leads one of two groups seeking to replace Mr Noda. While no candidates have announced, five men vied last year to replace Naoto Kan after he resigned under fire for his leadership in coping with the March 2011 earthquake, tsunami and nuclear crisis. Environment Minister Goshi Hosono,

August 31, 2012 business daily | 11

asia S.Korea rejects Tokyo proposal South Korea yesterday sent a diplomatic document rejecting Japan’s proposal that the two countries ask an international court to settle a bitter row over disputed islands, officials said. South Korea last week received a “note verbale” from Japan suggesting that both sides jointly refer the dispute to the International Court of Justice for settlement. Seoul’s reply was delivered yesterday through a Japanese diplomat in Seoul, a foreign ministry spokesman said, declining to give details. The document clarified Seoul’s stance that no territorial disputes exist about the islands in the Sea of Japan (East Sea), known as Dokdo in Korean and Takeshima in Japan, Yonhap news agency said.

Genting quarterly net profit falls

Japan Air seeks US$8.4b in IPO

As Singapore casino takings drop in the second quarter Gan Yen Kuan and Chong Pooi Koon

G Remittances make up the equivalent of 10 percent of the gross domestic product in the Philippines

strong enough in the region to continue attracting foreign investors, barring a further deterioration in global conditions or sudden capital flight. “There is a re-rating going on in Indonesia and the Philippines, with Indonesia recently upgraded to investment-grade [credit] status and the Philippines right behind. Things have really clicked in those economies,” said ING economist Tim Condon. “Unless you get a September 2008-style global panic, there is enough resilience in these countries’ domestic demand to offset export weakness,” Mr Condon said, noting he expected external demand could show signs of stabilising by the end of the year. Bloomberg/Reuters

former Foreign Minister Seiji Maehara, and ex-Transport Minister Sumio Mabuchi are possible candidates, Kyodo News reported on August 25, without citing anyone. Mr Maehara and Mr Mabuchi both ran last time.

enting Bhd., which controls Asia’s second-biggest casino operator by market value, said second-quarter profit fell 21 percent after reporting lower earnings at its Singapore gaming resort. Net income for the three months ended June 30 dropped to 534.5 million ringgit (US$171 million), or 14.4 sen a share, from 673.2 million ringgit, or 18.1 sen, a year earlier, the company said in a filing to the Kuala Lumpur stock exchange on Wednesday. Revenue was little changed at 4.5 billion ringgit. Genting controls Asia’s secondbiggest casino operator Genting Singapore Plc, which earlier this month reported a 43 percent drop in second-quarter profit to S$138.5 million (US$110 million). This offset higher contributions from the group’s gaming businesses in Malaysia, the U.K. and the U.S., where Resorts World Casino New York City began operations in October. “The global economy looks increasingly unfavourable,” Genting said in the statement. The Singapore casino resort “will continue to see similar narrower profit margins as in the current quarter,” it said. The earnings were also lower after last year’s profit was boosted by a one-time gain of 144 million ringgit, the filing showed. Genting has fallen 18 percent this year in Kuala Lumpur trading, compared with a 7.5 percent increase in the benchmark FTSE Bursa Malaysia KLCI Index.

“The volatile Singapore market is currently facing some headwinds with the ever-changing government regulations,” Hoe Lee Leng, an analyst at RHB Capital Bhd., wrote in a report yesterday. “We recommend investors switch over to Genting Malaysia, whose earnings are more defensive and has more growth leverage.”

Changing regulations Genting Malaysia Bhd., operator of the country’s only casino resort, jumped 2.4 percent, its biggest intraday gain since August 9. The stock was upgraded to the equivalent of buy today by the broking arms of Malayan Banking Bhd. and RHB. The group’s plantation division saw profit contributions drop 52 percent to 92.9 million ringgit on lower palm oil prices and higher costs. The group’s Malaysian estates are expected to boost production in the second half of this year, Genting said. Pretax profit from power generation increased 14 percent to 141.6 million ringgit, boosted by its first earnings from a wind farm in India. Going forward, energy earnings are likely to fall with the proposed sale of Malaysia’s Kuala Langat power plant to 1Malaysia Development Bhd., according to the statement. The group expects to record a onetime net gain of 1.9 billion ringgit from the disposal, it said in an Aug. 13 statement.

Bond concern Japan’s bond market is signalling concern that Mr Noda will be swept out of power in elections, ending his quest to reduce the world’s largest debt. Yields on 30-year securities exceeded two-year debt by 1.81 percentage points yesterday, the widest since April 12. Longer bonds tend to move on the fiscal outlook while shorter notes are more sensitive to monetary policy expectations. Rates on two-year notes, which the Bank of Japan buys as part of its stimulus efforts, are at 0.1 percent. The equivalent gap for U.S. Treasuries was at 2.48 percentage points yesterday. The opposition-controlled upper house on Wednesday passed a nonbinding censure motion against Mr Noda. Japan’s largest opposition group signalled this week it will block the bill to authorise the sale of bonds to finance the budget unless the premier calls new elections. Reuters

Genting Singapore Plc reported a 43 percent drop in second-quarter profit

Bloomberg

apan Airlines Co. will seek as much as 663 billion yen (US$8.4 billion) in the largest initial public offering since Facebook Inc., capping a state-backed turnaround since it filed for bankruptcy protection in 2010. Shares will be on offer at a price range of 3,500 yen to 3,790 yen, according to a statement yesterday. That’s in line with the indicative price of 3,790 yen announced earlier this month. The carrier won’t get any of the sale proceeds as the 175 million shares are being sold by its government-backed parent. JAL will be priced at about five times forecast earnings, compared with 16 times for All Nippon Airways Co., Japan’s largest carrier. The company is returning to the Tokyo stock exchange after shedding a third of its workforce, scrapping routes and retiring older planes in a restructuring that returned it to profit. “JAL is attractive compared with ANA,” said Mitsushige Akino, from Ichiyoshi Investment Management Co. “It’s come out of a turnaround and slashed debts, so it’s in a good position.” The final price for the IPO, Japan’s second-biggest in more than a decade, will be set on September 10, according to the earlier statement. The shares will begin trading on September 19. JAL will surpass ANA as Japan’s biggest carrier by market value and as the fourth largest worldwide behind Latam Airlines Group SA, Singapore Airlines Ltd and Air China Ltd. ANA fell 0.6 percent to 177 yen in Tokyo trading. The carrier, which also announced a share sale last month, has fallen 18 percent this year, compared with a 6.3 percent gain for the Nikkei 225 Stock Average. JAL is returning to the stock market after a two-year turnaround in bankruptcy protection that transformed it into the world’s most profitable airline. The government drafted in Kazuo Inamori, the founder of electronics company Kyocera Corp., to oversee the restructuring. The plan was supported by a 350 billion yen investment from state-backed Enterprise Initiative Turnaround Corp. of Japan. The fund, which can only invest in companies for three years, is selling its 97 percent stake in the IPO. It will get back more than it invested, Mr Inamori, who is now JAL’s chairman emeritus, has said. Bloomberg

12 |

business daily August 31, 2012

MARKETS Hang SENG INDEX PRICE

Day %

VOLUME

PRICE

Day %

VOLUME

26.55

-1.301115

15722201

CHINA UNICOM HON

12.82

-1.080247

20489311

POWER ASSETS HOL

ALUMINUM CORP-H

3.01

-1.954397

15563550

CITIC PACIFIC

10.22

-4.12758

14092202

SANDS CHINA LTD

BANK OF CHINA-H

2.85

-1.384083

276196032

64.6

-0.4622496

3476473

4.99

-3.481625

45912134

14.74

-0.4054054

54109536

28.15

-0.8802817

1450306

COSCO PAC LTD

9.93

-2.26378

7943748

NAME AIA GROUP LTD

BANK OF COMMUN-H BANK EAST ASIA BELLE INTERNATIO

NAME

CLP HLDGS LTD CNOOC LTD

NAME

PRICE

Day %

VOLUME

62.25

1.88216

3364677

27.5

-1.960784

5883014

12.68

-4.947526

14793945

SINO LAND CO SUN HUNG KAI PRO

99.15

-3.550584

9207257

SWIRE PACIFIC-A

91.35

-1.296596

1513212 3209495

14.4

-2.040816

7988039

ESPRIT HLDGS

12.16

-0.8156607

4080997

TENCENT HOLDINGS

238

-1.896125

BOC HONG KONG HO

24.55

-0.8080808

8440602

HANG LUNG PROPER

26.15

-2.607076

4759520

TINGYI HLDG CO

22.8

-0.2188184

3386921

CATHAY PAC AIR

12.62

2937502

HANG SENG BK

110

-0.9009009

884163

WANT WANT CHINA

9.49

-1.96281

18030308

CHEUNG KONG

WHARF HLDG

48.2

-0.4132231

5097240

103.8

-2.717901

8123817

CHINA COAL ENE-H

6.56

0.9230769

30679181

CHINA CONST BA-H

5.13

-2.471483

310848191

CHINA LIFE INS-H

20.9

0.9661836

45964191

CHINA MERCHANT

22.8

-4.60251

5100928

83.15

-0.8348241

17.7

-0.2816901

CHINA PETROLEU-H

7.41

CHINA RES ENTERP

22.45

CHINA RES LAND

HENDERSON LAND D HENGAN INTL

46.7

-3.412616

5086561

76.55

0.1308044

3451658

MOVERS

HONG KG CHINA GS

18.24

-0.9771987

4665164

HONG KONG EXCHNG

103.8

-0.7648184

3082456

HSBC HLDGS PLC

67.65

-0.8064516

6871100

11911103

HUTCHISON WHAMPO

68.05

-0.5843682

6270192

16699814

IND & COMM BK-H

4.19

-1.873536

263190205

-0.6702413

63136955

LI & FUNG LTD

12.86

26950610

HIGH

19857.61

-3.85439

4587623

MTR CORP

27.7

-0.8944544

1735518

LOW

19523.57

14.96

-0.3994674

4232185

NEW WORLD DEV

9.58

-2.443992

13368383

CHINA RES POWER

16.4

-1.796407

2178022

PETROCHINA CO-H

9.44

-0.1058201

44296647

CHINA SHENHUA-H

28.75

-0.1736111

10032022

PING AN INSURA-H

56.3

-0.7054674

12048439

CHINA MOBILE CHINA OVERSEAS

2 19860

INDEX 19552.91

52W (H) 21760.33984 19520

(L) 16170.35 28-Aug

30-Aug

Hang SENG CHINA ENTErPRISE INDEX PRICE

DAY %

VOLUME

CHINA PACIFIC-H

22.9

-1.293103

11467820

YANZHOU COAL-H

14383970

CHINA PETROLEU-H

7.41

-0.6702413

63136955

-1.954397

15563550

CHINA RAIL CN-H

5.75

-3.846154

19.4

-1.121305

13350239

CHINA RAIL GR-H

2.88

BANK OF CHINA-H

2.85

-1.384083

276196032

CHINA SHENHUA-H

BANK OF COMMUN-H

4.99

-3.481625

45912134

CHINA TELECOM-H

BYD CO LTD-H

13.8

0.877193

4934000

DONGFENG MOTOR-H

CHINA CITIC BK-H

3.67

-4.427083

91705000

GUANGZHOU AUTO-H

5.62

-1.748252

6258936

CHINA COAL ENE-H

6.56

0.9230769

30679181

HUANENG POWER-H

5.36

-0.3717472

19417074

CHINA COM CONS-H

6.23

-6.033183

44881559

IND & COMM BK-H

4.19

-1.873536

263190205

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

2.89

-2.693603

280990266

AIR CHINA LTD-H

4.7

ALUMINUM CORP-H

3.01

ANHUI CONCH-H

NAME

PRICE

DAY %

VOLUME

11.12

-0.7142857

12635945

ZIJIN MINING-H

2.43

-2.8

40599109

21476500

ZOOMLION HEAVY-H

8.27

-3.274854

12062899

-4.318937

32858488

ZTE CORP-H

10.36

-2.814259

9254840

28.75

-0.1736111

10032022

4.31

-3.146067

62254851

10.06

-2.330097

23718589

CHINA CONST BA-H

5.13

-2.471483

310848191

JIANGXI COPPER-H

16.78

-1.871345

15912991

CHINA COSCO HO-H

3.04

-3.492063

31857550

PETROCHINA CO-H

9.44

-0.1058201

44296647

CHINA LIFE INS-H

20.9

0.9661836

45964191

PICC PROPERTY &

9.24

0.4347826

21871182

CHINA LONGYUAN-H

4.91

-3.346457

7492000

PING AN INSURA-H

56.3

-0.7054674

12048439

CHINA MERCH BK-H

13.4

-1.759531

21229980

SHANDONG WEIG-H

8.39

-1.410106

5602103

NAME

MOVERS

1 9560

INDEX 9340.86 HIGH

9552.41

LOW

9314.49

CHINA MINSHENG-H

6.39

-3.61991

69663654

SINOPHARM-H

24.6

-0.2028398

2600005

52W (H) 11916.1

CHINA NATL BDG-H

7.29

-0.6811989

25064673

TSINGTAO BREW-H

42.65

0.1173709

688000

(L) 8058.58

12.52

-1.26183

5298906

WEICHAI POWER-H

20.45

-1.445783

2203740

CHINA OILFIELD-H

9310

28-Aug

30-Aug

Shanghai Shenzhen CSI 300 NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.49

-0.4

62700580

DAQIN RAILWAY -A

6.01

0.6700168

33180152

AIR CHINA LTD-A

4.83

0.625

6886435

DATANG INTL PO-A

4.44

0.4524887

ALUMINUM CORP-A

5.35

-2.014652

9374663

DONGFANG ELECT-A

14.38

ANHUI CONCH-A

13.04

-1.881114

18283698

EVERBRIG SEC -A

BANK OF BEIJIN-A

7.32

0.1367989

9211127

BANK OF CHINA-A

2.8

1.083032

4.39 9.6

BANK OF COMMUN-A BANK OF NINGBO-A BAOSHAN IRON & S BYD CO LTD -A

4.39

PRICE

DAY %

VOLUME

SAIC MOTOR-A

11.62

-0.7685739

14834287

2256905

SANY HEAVY INDUS

10.28

-1.34357

32797014

0.5594406

5314310

SHANDONG GOLD-MI

33.44

-3.825137

10830139

10.92

3.901047

17477248

SHANG PHARM -A

11.74

-1.095198

15131338

GD MIDEA HOLDING

9.18

9139999

SHANG PUDONG-A

7.61

0.794702

44804211

20993142

GD POWER DEVEL-A

2.54

16807246

SHANGHAI ELECT-A

4.07

0.2463054

3341854

0.9195402

56549359

GF SECURITIES-A

10.4

1.5625

52115443

SHANXI LU'AN -A

17.07

0.8269344

11545534

1.265823

14015268

GREE ELECTRIC

20.21

-0.6879607

5128409

SHANXI XINGHUA-A

35.74

-5.324503

4810523

71566109

GUANGHUI ENERG-A

12.28

-3.00158

21096533

SHANXI XISHAN-A

12.59

-1.099764

9568354

10978417

HAITONG SECURI-A

8.29

2.726146

51880145

SHENZEN OVERSE-A

5.49

1.478743

15709503 52237694

0.6880734

15.55

-0.8922881

CHINA CITIC BK-A

3.88

1.305483

9350064

CHINA CNR CORP-A

3.46

0.2898551

22019632

CHINA COAL ENE-A

6.88

0.8797654

8085510

NAME

HANGZHOU HIKVI-A

26.4

-3.825137

3151600

SUNING APPLIAN-A

6.08

1.164725

HEBEI IRON-A

2.49

-1.581028

27335589

TSINGTAO BREW-A

32.63

-0.3664122

996699

HENAN SHUAN-A

56.77

-5.383333

4743358

WEICHAI POWER-A

17.1

1.543943

7318759 21802468

CHINA CONST BA-A

4.05

0.9975062

18769167

HONG YUAN SEC-A

15.86

3.863785

18186382

WULIANGYE YIBIN

32.48

-1.754386

CHINA COSCO HO-A

3.98

-1.240695

9606450

HUATAI SECURIT-A

8.56

3.256936

20772755

XIAMEN TUNGSTEN

38.72

1.149425

8904425

CHINA EAST AIR-A

3.41

-1.15942

10729763

HUAXIA BANK CO

8.83

0.6841505

15879334

YANGQUAN COAL -A

14.04

-0.9873061

8239808

2.8

1.083032

34383234

IND & COMM BK-A

3.85

0.2604167

21460855

YANTAI CHANGYU-A

49.89

-1.887906

1485366

17.3

3.160405

16236127

INDUSTRIAL BAN-A

12.39

1.060359

28902520

YANTAI WANHUA-A

12.62

0.96

6038569

CHINA MERCH BK-A

10.13

1.097804

40629378

INNER MONG BAO-A

32.27

-1.944698

42359240

YANZHOU COAL-A

17.29

-1.2

2163113

CHINA MERCHANT-A

9.81

2.400835

13688408

INNER MONG YIL-A

20.13

-1.323529

7218274

YUNNAN BAIYAO-A

-4.201681

3768153

CHINA MERCHANT-A

19.07

0.686378

5902877

INNER MONGOLIA-A

5.12

-2.290076

64289808

ZHONGJIN GOLD

14.29

-3.052917

12842355

CHINA MINSHENG-A

0.3344482

86467742

JIANGSU HENGRU-A

30.36

0.09891197

4472347

ZIJIN MINING-A

3.72

-0.5347594

36976672

5.92

-0.3367003

16996923

JIANGSU YANGHE-A

120.59

-1.719641

2041097

ZOOMLION HEAVY-A

8.12

1.120797

25816367

CHINA OILFIELD-A

16.18

0.872818

3939857

JIANGXI COPPER-A

20.17

0.7996002

5794839

ZTE CORP-A

9.97

3.423237

17171067

CHINA PACIFIC-A

19.52

2.628812

16715182

JINDUICHENG -A

11.31

-1.049869

3535986

CHINA PETROLEU-A

6.08

0.6622517

18848030

JIZHONG ENERGY-A

12.41

0.2423263

8631364

CHINA RAILWAY-A

4.22

9739072

KANGMEI PHARMA-A

14.73

-6.238065

30067638

KWEICHOW MOUTA-A

CHINA EVERBRIG-A CHINA LIFE INS-A

CHINA NATIONAL-A

CHINA RAILWAY-A

2.43

0.4132231

16692026

217.88

-0.5840482

4834871

CHINA SHENHUA-A

21.54

0.5132991

6254935

LUZHOU LAOJIAO-A

35.5

-2.8196

8413984

CHINA SHIPBUIL-A

4.82

1.048218

33926537

METALLURGICAL-A

2.04

-0.9708738

18147953

2.48

9648450 33758618

MOVERS

109

18 2250

INDEX 2211.37

CHINA SOUTHERN-A

3.51

-1.955307

21643505

NINGBO PORT CO-A

CHINA STATE -A

3.03

29900202

PANGANG GROUP -A

3.8

-2.061856

CHINA UNITED-A

3.85

-0.2590674

50499173

PETROCHINA CO-A

8.87

0.6810443

7388964

HIGH

2247.03

CHINA VANKE CO-A

7.99

0.250941

31272297

PING AN BANK-A

14.28

8987322

LOW

2190.54

CHINA YANGTZE-A

6.54

8747831

PING AN INSURA-A

39.13

1.821494

22526211

5.5

-1.256732

3026506

POLY REAL ESTA-A

9.13

0.3296703

31493316

CITIC SECURITI-A

10.34

1.671583

70360813

QINGDAO HAIER-A

10.06

0.4995005

6382424

CSR CORP LTD -A

4.06

0.9950249

25906579

QINGHAI SALT-A

30.69

0.09784736

2732353

CHONGQING WATE-A

173

52W (H) 2901.733 (L) 2188.724

2190

28-Aug

30-Aug

FTSE TAIWAN 50 INDEX NAME

NAME

PRICE DAY %

Volume

ACER INC

26.15 -0.5703422

12005718

FORMOSA PLASTIC

0.4484305

15483303

ASIA CEMENT CORP

34.25 -0.7246377

4488549

ASUSTEK COMPUTER

294.5

6.896552

9.3

0.7583965

ADVANCED SEMICON

AU OPTRONICS COR

22.4

PRICE DAY %

Volume

80.5

-0.617284

8195044

FOXCONN TECHNOLO

115.5

3.587444

FUBON FINANCIAL

29.45

8838015

HON HAI PRECISIO

94259341

HOTAI MOTOR CO

NAME

PRICE DAY %

Volume

TAIWAN MOBILE CO

107

14127399

TPK HOLDING CO L

380

2.564103

5938765

-1.174497

17358514

TSMC

82.7

45683832

85.5

1.785714

56116262

210

-3.002309

809184

UNI-PRESIDENT

48 -0.2079002

UNITED MICROELEC

12.05

3444429

13991758 29658513

CATCHER TECH

148.5

1.365188

13862859

HTC CORP

253.5

8079439

WISTRON CORP

32.9 -0.7541478

7254394

CATHAY FINANCIAL

28.55

-1.381693

23867473

HUA NAN FINANCIA

16.05

-1.230769

8520663

YUANTA FINANCIAL

13.8 -0.7194245

22384080

CHANG HWA BANK

15.35 -0.9677419

12578433

LARGAN PRECISION

620 -0.4815409

792807

YULON MOTOR CO

54.4

CHENG SHIN RUBBE

72.1 -0.8253095

6027935

LITE-ON TECHNOLO

34.9 -0.1430615

5170940

CHIMEI INNOLUX C

9.67

2.328042

26114595

MEDIATEK INC

316.5

-1.09375

10881442

CHINA DEVELOPMEN

7.06 -0.2824859

32697938

MEGA FINANCIAL H

22.3

-1.545254

31545394

CHINA STEEL CORP

25.8 -0.7692308

27630370

NAN YA PLASTICS

56.2

-1.230228

6797291

CHINATRUST FINAN

17.8

0.5649718

23821650

PRESIDENT CHAIN

160

-2.140673

1550012

77.4

2.788845

14186172

CHUNGHWA TELECOM

90.5

0.3325942

8969184

QUANTA COMPUTER

COMPAL ELECTRON

25.6

-3.213611

29046473

SILICONWARE PREC

33.55 -0.4451039

8437559

DELTA ELECT INC

102

-2.392344

5044276

SINOPAC FINANCIA

11.6 -0.8547009

17272106

31.45 -0.3169572

5783013

SYNNEX TECH INTL

65.7

-1.646707

3130475

5167967

TAIWAN CEMENT

32.6

-1.361573

11096669

17.45 -0.2857143

13850222

FAR EASTERN NEW FAR EASTONE TELE FIRST FINANCIAL

73.6

TAIWAN COOPERATI

16.4 -0.6060606

9985984

FORMOSA CHEM & F

76.8

-1.285347

5770010

TAIWAN FERTILIZE

73.1

-1.216216

2786566

FORMOSA PETROCHE

85.5

-2.173913

2443683

TAIWAN GLASS IND

29.45

1.02916

2866463

MOVERS

-1.090909

3506083

5 5100

INDEX 5061.18 HIGH

5098.24

LOW

5050.94

52W (H) 5621.53 5050

(L) 4643.05 28-Aug

30-Aug

August 31, 2012 business daily | 13

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

MeLCo CroWn enTerTaInMenT

MgM CHIna HoLDIngS

22.6

30.7

22.5

30.6

22.4

22.0

Last 22.3

SanDS CHIna LTD

12.5

30.3

22.1 Min 22.05

12.6

30.4

22.2

average 22.329

12.7

30.5

22.3

Max 22.55

12.8

Max 30.65

average 30.541

Min 30.25

Last 30.25

30.2

SJM HoLDIngS LTD

Max 12.8

average 12.594

Min 12.4

Last 12.42

12.4

Wynn MaCaU LTD

27.8

16.0

27.7

15.9

27.6

15.8

18.1 18.0 17.9

average 27.670

Max 27.8

Min 27.5

Last 27.5

27.5

15.7 Max 15.96

average 15.85

Commodities PRICE

DAY %

YTD %

(H) 52W

(L) 52W

WTI CRUDE FUTURE Oct12

95.32

-0.178029113

-3.306958815

110.6499939

78.15999603

BRENT CRUDE FUTR Oct12

112.99

0.399857828

8.052022569

123.2900009

89.11000061

GASOLINE RBOB FUT Sep12 GAS OIL FUT (ICE) Oct12 NATURAL GAS FUTR Oct12 HEATING OIL FUTR Sep12 METALS

Gold Spot $/Oz Silver Spot $/Oz

311.1

0.345127891

17.11779543

320.4999924

237.3699903

983.75

0.536535514

9.548997773

1044.75

799

2.665

-0.744878957

-19.77724262

4.670000076

2.299999952

312.59

0.327374266

9.723051002

332.9600096

251.5599966

1658.95

-0.3358

6.0093

1921.18

1522.75

30.77

0.0488

10.5443

43.4088

26.085

Platinum Spot $/Oz

1527.35

0.7919

9.5267

1896.75

1339.25

Palladium Spot $/Oz

633.75

0.269

-3.0222

792.93

537.54 1827.25

LME ALUMINUM 3MO ($)

1893

-1.200417537

-6.287128713

2476

LME COPPER 3MO ($)

7575

-0.42720999

-0.328947368

9304

6635

LME ZINC

1856

-0.854700855

0.596205962

2311

1718.5

3MO ($)

LME NICKEL 3MO ($)

16300

0.307692308

-12.8808124

22450

15236

15.515

-0.032216495

2.038803025

17.5

14.15499973

813.75

0.030731407

38.80597015

849

499

WHEAT FUTURE(CBT) Dec12

903.25

-0.276014353

25.45138889

953.25

629.5

SOYBEAN FUTURE Nov12

1748.75

-0.242441529

45.21486402

1760.5

1115.75

COFFEE 'C' FUTURE Dec12

165.3

-0.810081008

-29.95762712

285.6499939

SUGAR #11 (WORLD) Oct12

19.74

-0.101214575

-13.5348226

COTTON NO.2 FUTR Dec12

76.77

0.156555773

-12.60245902

AGRICULTURE ROUGH RICE (CBOT) Nov12 CORN FUTURE

Min 15.78

Last 15.82

Dec12

PRICE MAJORS

ASIA PACIFIC

CROSSES

AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP

average 17.848

Last 17.8

Min 17.76

PRICE

DAY %

YTD %

-0.2605 0.1011 0.0314 0.0398 -0.0509 0 -0.0013 0.0346 0 -0.0956 0.1198 -0.0668 0.2012 -0.0104 0.208 -0.0008 0.0731 0.118 -0.0259 -0.081 0

YTD %

(H) 52W

1.244 1.898 -1.8826 -3.0785 -2.175 0.1327 0.1444 -0.8599 -4.6022 0.5738 3.5871 1.0782 3.7879 -5.3538 -3.4778 1.3156 5.0787 2.0961 3.1631 0.9215 0.0097

(L) 52W

1.0857 1.6335 0.9972 1.4459 84.18 8.0413 7.8077 6.406 57.3275 32 1.3199 30.716 44.35 9662 88.637 1.24736 0.88688 9.172 11.6077 111.6 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

(H) 52W

(L) 52W

ARISTOCRAT LEISU

2.65

-1.851852

20.45454

3.25

1.88

1114872

153.6999969

CROWN LTD

8.95

-0.5555556

10.63041

9.29

7.47

1407654

25.5

19.23999977

AMAX HOLDINGS LT

0.061

-29.88506

0.119

0.055

102.25

64.61000061

BOC HONG KONG HO

24.55

-0.8080808

33.42392

24.95

14.24

8440602

CENTURY LEGEND

0.225

-2.173915

0.335

0.204

3.1

10.71429

3.62

2.3

CHINA OVERSEAS

17.7

-0.2816901

36.36364

19.16

9.99

16699814

CHINESE ESTATES

9.46

1.72043

-24.32

13.68

8.3

21571

CHOW TAI FOOK JE

9.51

-0.7306889

-31.68103

15.16

8.4

3388800

EMPEROR ENTERTAI

1.42

27.92793

1.48

0.97

480000

1.1

-3.0837

161.9048

1.24

0.3

2916000 14067724

World Stock MarketS - Indices COUNTRY

DAY %

1.0336 1.5838 0.9561 1.2562 78.62 7.989 7.7562 6.3496 55.625 31.37 1.2517 29.956 42.24 9582 81.258 1.20099 0.79311 7.9672 10.0346 98.75 1.03

MACAU RELATED STOCKS NAME

CHEUK NANG HLDGS

NAME

17.7 Max 18.06

CURRENCY EXCHANGE RATES

NAME ENERGY

17.8

(H) 52W

(L) 52W

FUTURE BRIGHT

DOW JONES INDUS. AVG

13107.48

0.03426699

7.28395

13338.66016

10404.49

NASDAQ COMPOSITE INDEX

3081.185

0.1313556

18.27285

3134.17

2298.89

FTSE 100 INDEX

5733.88

-0.1680151

2.900071

5989.07

4868.6

HOPEWELL HLDGS HSBC HLDGS PLC

DAX INDEX

6967.56

-0.6135022

18.12727

7194.33

4965.8

NIKKEI 225

8983.78

-0.9485314

6.24966

10255.15

8135.79

PRICE

DAY % YTD %

VOLUME CRNCY

GALAXY ENTERTAIN

22.3

-1.545254

56.60113

24.95

8.69

HANG SENG BK

110

-0.9009009

19.37059

116.7

84.4

884163

-1.380671

25.88116

25.4

18.56

1172900

67.65

-0.8064516

14.66102

71.8

6871100

HUTCHISON TELE H

3.84

2.12766

28.42809

3.88

2.53

4823300

LUK FOOK HLDGS I

20.95

-1.411765

-22.69373

42.7

14.7

1829300

MELCO INTL DEVEL

6.22

-0.1605136

7.79896

9.17

4.3

3230900

MGM CHINA HOLDIN

12.42

-3.421462

29.48083

14.804

7.6

2127230

4.2

-1.176471

6.220286

5.217

2.887

1494000

HANG SENG INDEX

19552.91

-1.19059

6.06757

21760.33984

16170.35

CSI 300 INDEX

2211.37

-0.1554984

-5.728329

2901.733

2188.724

TAIWAN TAIEX INDEX

7371.44

-0.2666703

4.232982

8170.72

6609.11

MIDLAND HOLDINGS

KOSPI INDEX

1906.38

-1.149056

4.41684

2057.28

1644.11

NEPTUNE GROUP

0.168

0.5988024

51.35135

0.205

0.08

15355000

S&P/ASX 200 INDEX

4315.674

-0.9358778

6.387512

4448.5

3840.2

NEW WORLD DEV

9.58

-2.443992

53.03514

10.96

6.13

13368383

4025.583

-1.651214

5.326831

4234.734

3217.951

SANDS CHINA LTD

27.5

-1.960784

25.28473

33.05

14.9

5883014

FTSE Bursa Malaysia KLCI

1646.11

0.03220749

7.53758

1655.39

1310.53

SHUN HO RESOURCE

1.13

1.28

0.82

SHUN TAK HOLDING

2.85

11.36605

3.892

2.241

9801860

NZX ALL INDEX

805.71

0.1418151

10.40144

818.513

712.548

SJM HOLDINGS LTD

15.82

-0.7528231

26.50397

18.285

10.079

2834755

PHILIPPINES ALL SHARE IX

3432.29

-0.6317112

12.7174

3531.5

2695.06

SMARTONE TELECOM

16.64

-2.347418

23.80953

18.5

9.8

492400

17.8

-2.73224

-8.717949

25.5

14.62

7046335

JAKARTA COMPOSITE INDEX

HSBC Dragon 300 Index Singapor

582.64

0.02

17.39

STOCK EXCH OF THAI INDEX

1211.93

-0.6745017

18.20018

1247.72

843.69

HO CHI MINH STOCK INDEX

397.25

1.065995

12.99958

492.44

332.28

Laos Composite Index

1031.67

-0.6873249

14.69882

1064.23

876.33

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

WYNN MACAU LTD ASIA ENTERTAINME

3.57

-7.272727

-39.28572

2.4

134514

BALLY TECHNOLOGI

44.65

0.8811568

12.86653

49.32

24.74

688378

BOC HONG KONG HO

3.1

-4.615385

29.31821

3.25

1.81

500

GALAXY ENTERTAIN

2.9425

5.845324

57.35294

3.24

1.08

4336

INTL GAME TECH

12.22

0.4934211

-28.95349

18.1701

10.92

3109349

JONES LANG LASAL

71.98

1.237693

17.49919

87.52

46.01

304476

LAS VEGAS SANDS

42.52

-0.4215457

-0.4914569

62.09

34.72

6180545

MELCO CROWN-ADR

11.99

-0.08333333

24.63618

16.02

7.05

2563035

MGM CHINA HOLDIN

1.64

37.61931

1.96

1.0025

10400

MGM RESORTS INTE

10.15

1.095618

-2.684567

14.9401

7.4

5018174

SHUFFLE MASTER

15.39

4.197698

31.31399

18.77

7.55

384232

2.03

-0.4901961

26.27733

2.3177

1.2624

4000

104.92

-0.2945928

-5.041178

154.7051

90.108

1228311

SJM HOLDINGS LTD WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily August 31, 2012

Opinion

Merkel in China Sanjaya Baru

Director for Geo-economics and Strategy, International Institute for Strategic Studies

erman Chancellor Angela Merkel’s second visit to China in a year comes against the backdrop of dire forecasts of a difficult September for the eurozone. Mindful of such concerns and persistent pessimism in global financial markets, Merkel is now taking bold political initiatives at home and overseas. Indeed, her China trip should be seen as an effort to assert leadership across the eurozone. At home, Merkel recently sent out a clear message to her critics that Germany must pay a price for eurozone leadership. She cautioned her colleagues against loose talk about a “Grexit” – Greece’s exit from the eurozone – and assured visiting Greek Prime Minister Antonis Samaras that Germany remained committed to his country’s membership of the eurozone. While it required courage to take such a tough stance, doing so helped to bolster her position at home and throughout the eurozone. There is now no doubt that Merkel is willing to commit Germany to the cause of preserving both the European Union and the eurozone, and that she will work to achieve that goal. If she succeeds, she will emerge as the first great European leader of the twenty-first century. This stance suggests that Merkel appreciates the essence of the argument that François Heisbourg, the chairman of the council of the International Institute for Strategic Studies (IISS), advanced in a recent essay: a federal arrangement does not fall apart because of problems at the periphery but because of “failure

at the heart of the system.” Merkel has come to terms with Germany’s position – and that it must act to preserve the unity of the whole. The eurozone (and probably the EU) cannot be saved in Greece or Finland if it cannot be saved in Germany. Committing Germany to that objective is precisely what Merkel has defined as her political goal for the rest of her term in office. Within hours of declaring her leadership at home, Merkel announced her visit to Beijing. The timing was highly significant: Merkel goes to China, the emerging global power, after declaring her own commitment to strengthening the eurozone, if not the EU as a whole, as a credible pole of an emerging multipolar world.

China relations In recognition of Germany’s growing significance, Chinese Prime Minister Wen Jiabao welcomed a delegation of German business leaders to Beijing this May with the words: “Stronger Chinese-German cooperation is good for the two countries, good for China-EU relations, and good for world prosperity and stability. The strategic dimension of Chinese-German relations, therefore, can only be strengthened, not weakened.” There are several dimensions to the bilateral relationship. Germany needs both China’s markets and the funds that its government can deploy to purchase German and European bonds. It also has more than 7,500 enterprises operating in China, with gross investment totalling US$18.5

A federal arrangement does not fall apart because of problems at the periphery but because of ‘failure at the heart of the system’

billion. Moreover, Germany has sold US$15 billion worth of technology to China, and bilateral trade hit a high of US$169 billion in 2011, accounting for 30 percent of total China-EU trade. The two countries have set a bilateral trade target of US$280 billion for 2015. Trade, however, is not the only immediate concern. Far more important, especially for Germany, is to get China to invest in and hold its bonds. In mid-August, at the First IISS Oberoi Lecture in Mumbai, Klaus Regling, the CEO of the European Financial Stability Facility, underscored the importance of Chinese demand for EFSF bonds and China’s role in stabilising the eurozone.

Monetary triangle Regling also revealed that there is now increased and frequent coordination between monetary authorities in the United States, Germany, and China,

drawing attention to the fact that the “old Triad” of the dollar, euro, and yen may now have been replaced by a “new Triad” of the dollar, euro, and Chinese renminbi. While Regling spoke of an emerging “multipolar monetary system,” his remarks clearly indicated the functioning of a “tripolar” system. Lying at two ends of that monetary triangle, the eurozone and China have acquired a geopolitical stake in helping each other. Hans Kundnani and Jonas Parello-Plesner of the European Council on Foreign Relations view the ChinaGermany relationship as one that will shape the overall China-EU relationship. Like many strategic analysts, they worry whether Germany, in pursuit of purely short-term economic interests, might forsake long-term strategic interests and concerns about human rights, environmental problems, press freedoms, and other political and geopolitical issues. It is significant, therefore, that German political parties have emphasised the need for Merkel to raise such matters in her talks with Chinese leaders. However, Merkel’s focus may well remain on trade, investment, and currency flows. After all, unless she can turn around the eurozone, her rising profile at home and in Europe could easily wither. What this means is that to secure German leadership of Europe, and her own leadership of Germany, Merkel has to “walk on two legs,” so to speak. She needs to balance both geo-economic and geopolitical factors – both interests and values – in advancing Germany’s relations with China. © Project Syndicate

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August 31, 2012 business daily | 15

OPINION

Asia drug lockups too cruel, wires ineffective to earn U.S. Aid Business

Leading reports from Asia’s best business newspapers

Yomiuri Shimbun

Lisa Beyer James Gybney Bloomberg editors

Daikin Industries Ltd said on Wednesday it will acquire Goodman Global Inc., the leading U.S. maker of home-use air conditioners, for US$3.7 billion. Daikin will purchase all outstanding shares in Houston-based Goodman from U.S. investment fund Hellman & Friedman LLC by the end of this year. Daikin, the global industry leader, logged over 1.04 trillion yen (US$13.2 million) in air conditioner sales last year. The combined annual sales for Daikin and Goodman will to put Daikin far ahead of its rivals.

a corrupt system. Even if these institutions treated people well, they would still be based on unlawful detention. And they utterly fail at their purpose. The U.S. government estimates that 95 percent of released detainees in Vietnam return to drug use. By contrast, in Australia, a study found close to half the drug users who participated in a two- or four-session programme of motivational interviewing and cognitivebehavioural therapy remained abstinent after six months.

Closure calls

Business Times Kenanga Research cut gamingto-property conglomerate Genting Bhd’s target price after its palm oil unit Genting Plantation and gaming unit Genting Singapore posted disappointing second-quarter earnings.Keepingits“outperform” call on the counter, Kenanga cut Genting’s target price to RM11.35 (US$3.6) per share from RM11.69. Genting said on Wednesday its net profit for the second quarter ended June 30 dropped 20.6 percent year-on-year. Kenanga trimmed its earnings forecast for Genting Bhd by 1-2 percent for the financial years between 2012 and 2014.

Jakarta Globe National flag carrier Garuda Indonesia says it will invest a total of Rp 37.5 trillion (US$3.9 billion) between 2012 and 2015 to strengthen its domestic market and upgrade its fleet. The majority of the funds will be used to procure new airplanes, while a portion will be used to open two new hubs in Medan and Balikpapan. The Jakarta and Denpasar hubs are also expected to support Garuda’s international routes. The company wants to serve around 1,000 flights per day, up from the current 390 flights.

Business Standard The government will soon permit Indian entrepreneurs to explore business opportunities in Pakistan, after allowing Pakistani businessmen to invest in India. Commerce Secretary S R Rao said the Finance Ministry will soon notify guidelines allowing investment in Pakistan by Indian companies and individuals through a so-called semi-automatic route. The move comes ahead of the Commerce Secretary level talks between the countries that are likely to take place in the second week of the next month.

he accounts call to mind 18th century insane asylums: patients confined against their will in dismal conditions, abused and subjected to experiments and unscientific treatments. Today’s inmates – at least 350,000 – are locked up, in China and Southeast Asia, just for using illegal drugs, or being suspected of it. Human Rights Watch recently released a paper detailing the practice of warehousing alleged drug users in China, Cambodia, Vietnam and Laos, adding to a stack of damning reports about these centres, which also exist in Thailand and Malaysia. In March, the United Nations Office on Drugs and Crime and 12 other UN agencies called for closing all such institutions. It was a noteworthy statement, given that the UNODC, as well as the U.S. and other donor countries, has given many of them financial support. Dumped there by police or well-meaning but uninformed families, detainees are sometimes held for years. Authorities consider detention and gruelling exercise to be treatment, though there’s no evidence this is effective. Opiate addicts, whose numbers are waning in Asia, get no opiate-substitution therapy. No equivalent treatment exists for addiction to methamphetamine, the use of which exploded in Asia in the late 1990s, prompting a

Even if these institutions treated people well, they would still be based on unlawful detention. And they utterly fail at their purpose

boom in detention camps. But existing, proven interventions, such as individualised counselling, would help and aren’t made available. Former detainees have told human rights investigators about being beaten with bricks and truncheons, subjected to medical experiments, forced to crawl through excrement and swallow foul water. A centre staff member in China said female inmates were HIVtested so guards could identify whom they could rape without a condom.

Forced labour Forced labour is a feature in some countries. Sometimes it is pointless, such as being

made to repeatedly dig and fill holes. Some centres in China and Vietnam amount to slave camps because they produce goods – notably processed cashews in Vietnam – using the labour of inmates, including children. The U.S., Japan, Sweden and the UNODC have actually helped Laos build its centres. Countries including the U.S., Australia, Canada, Luxembourg, Netherlands, Sweden and the U.K. have funded programmes within facilities throughout Southeast Asia to improve, for instance, health care, vocational training or sports facilities. They argue that at least they can make life better for detainees. This support just sustains

The call by UN agencies to close the Asian centres was a good sign, though it would have been more reassuring had the UNODC not co-sponsored a fashion show that same month to raise funds for one such facility in Vientiane, the Laotian capital. The UNODC, the U.S. and other donors would do well to withhold relevant funding until the centres are closed, detainees are released and local authorities agree to respect international norms for treating drug abuse. These i n c l u d e p a ti e n t c o n s e n t. Exceptions to that principle can be made only rarely, for a short period, with judicial oversight, for the purpose of restoring a patient’s ability to make decisions autonomously. Treatment and rehabilitation services should be offered within communities – through health clinics or welfare offices, for example – so patients can access them easily and without being stigmatised. As a half-measure, some donors already support community- based programmes alongside the detention centres. Asking patients to enter voluntary programmes is risky, however, when their identification as drug users might land them in a far worse place. The drugtreatment system in China and Southeast Asia can’t be reformed. It requires a do-over. Bloomberg View

16 |

business daily August 31, 2012

CLOSING Jenkins named new CEO at Barclays

Citigroup pays US$590m settlement

Barclays Plc named Antony Jenkins as its chief executive officer, promoting the head of its consumer business as the U.K. lender recovers from the Libor scandal and considers whether to shrink its investment bank. The 51-year-old Briton will become CEO immediately, the second-largest U.K. lender said in a statement yesterday. He will lead the bank under incoming chairman David Walker, who once ran Morgan Stanley’s European investment bank. The bank was fined 290 million pounds (US$459 million) by U.S. and U.K. regulators for attempting to rig the London interbank offered rate.

U.S. banking giant Citigroup Inc. has paid US$590 million to shareholders who accused the bank of hiding its subprime exposure. The agreement resolves claims that shareholders ended up with huge losses after the bank failed to make writedowns on complex financial instruments and deliberately tried to hide the scale of the risk. Citigroup ultimately lost US$27.7 billion in 2008 and its shares trail well below the levels reached before the crash at around a tenth of their previous values. Citi denied the allegation but said it wanted to avoid further legal costs.

German growth down to 0.3 pct Unemployment rising since April

nemployment in Germany rose for the fifth month in a row in August as Europe’s biggest economy runs out of steam amidst the eurozone debt crisis, official data showed yesterday. As major companies such as carmaker Opel announced short-time work schemes to cope with slumping demand, headline unemployment rose this month, with the total number of people out of work up by 29,100 in August from July to stand at 2.91 million, the Federal Labour Agency said. The unadjusted jobless rate stood at 6.8 percent in August, unchanged from July. Unemployment tends to rise in the summer as school-leavers sign on the dole and companies close for the holidays but even adjusted for such seasonal factors, unemployment is on the rise in Europe’s top economy, the data showed. The seasonally adjusted jobless total – which has been rising since April – rose by 9,000 to 2.9 million in August, the highest level since November 2011. But here, too, the adjusted jobless rate, which measures the proportion of people registered as unemployed

EU economic driver losing steam

against the working population as a whole, was at 6.8 percent, unchanged since December. “The German economy did not grow much in the second quarter. The slower growth is making itself felt on the labour market,” the labour agency said in a statement. ING Belgium-based economist

Carsten Brzeski said the data were “a clear signal that the best times of the German labour market are over”. The strong labour market has been one of the main drivers of German growth so far this year, the analyst said. Low unemployment, record high employment and wage increases have boosted private

consumption and helped cushion the industrial slowdown. “Looking ahead, however, it is doubtful whether private consumption can really take over the baton as main growth driver for the German economy,” Mr Brzeski warned. “Today’s numbers provide further evidence that the labour market is gradually losing steam and that the positive impact on the economy should peter out towards the end of the year.” Newedge Strategy analyst Annalisa Piazza also said that although the labour market was set to moderate in the latter part of this year, “it is still benefiting from past structural reforms and solid activity”. The robust labour market “remains one of the main factors supporting consumer confidence and spending as households are confident that their disposable income is well protected despite the weaker business cycle,” she said. “As such, moderation in activity remains the baseline scenario for Germany in the second half of this year, but we rule out a full-blown recession,” Ms Piazza concluded. AFP

S.African inequality worries officials Deputy president warns of ‘ingredient for revolution’

outh Africa is at risk of revolution unless it reduces high levels of inequality and poverty, Deputy President Kgalema Motlanthe said. “The distribution of wealth is unfair, very skewed in favour of a few,” Mr Motlanthe told reporters in Cape Town late on Wednesday. “It is something to be worried about. It’s an ingredient for revolution.” The wealth gap has fuelled discontent among mainly black, jobless South Africans excluded from the gains Africa’s largest economy has made since the end of apartheid in 1994. Poor communities staged 113 protests against a lack of housing, sanitation and other services in t he f i r s t s e v e n m on t h s of this year, more than

in any other year since monitoring began in 2004, according to Municipal IQ, an independent local government research group. “As public representatives we are not covering ourselves in glory,” he also said. “In many respects we are failing our people.” Mr Motlanthe, who is also deputy president of the ruling African National Congress, is backed by the party’s youth league as a possible candidate to replace President Jacob Zuma at an ANC elective conference in December. While party nominations only open in October and he has yet to declare his candidacy for the top post, he has made several recent speeches criticizing the government’s performance. The government’s failure

in reducing the 25 percent unemployment rate has left too many people dependent on state welfare, the deputy president said. “We are already in an untenable position in the sense that we already have 15 million recipients of grants,” he said. “That is not sustainable. It does not address the totality of what is required to attain a better life for all.” Finance Minister Pravin Gordhan yesterday echoed Mr Motlanthe’s concern that high levels of inequality may add to discontent. The Gini coefficient, a measure of income inequality, is 0.68 in South Africa, one of the highest in the world and more than the 0.67 at the end of white segregationist rule. AFP

The Gini coefficient is 0.68 in South Africa, one of the highest in the world