Macau Business Daily, August 6, 2012

Mass market gamblers save casino revenue VIP baccarat revenue contracted last month but there was a slight uptick in gross gaming revenue on the strength of a more resilient mass market segment. Official data show gaming revenue in July grew by about 1.5 percent year-on-year. The mainland’s deepening slowdown, the reason why junkets are being more prudent in extending credit, could yet hit the mass market as well.

Page 2

No love lost over new taxi licences T

he first batch of 50 new taxis could hit the road next month, with the entire 200 licences potentially ready early next year, the Transport Bureau told Business Daily.

Successful bidders for the eight-year licences have to register by October 3, prepare the taxis for inspection and settle outstanding fees within 90 days.

With the number of visitor arrivals increasing by 2.5 percent year-on-year to 13.6 million in the first half, the latest official data shows there are just 980 taxis in Macau.

But the taxi drivers and companies who paid up to 1.1 million patacas (US$137,700) for each licence are not falling over themselves to register their taxis,

amid worries that return on their investment might fall short of expectations.

The General Association of Macau Taxi Owners believes many bidders will use up all 90 days before setting their new taxis free, as many are still worried over the new standards that require taxis to meet the Euro IV standards on gas emissions.

The Macau Taxi Association agrees that the investment on new licences is riskier, especially because the shortage in the number of taxi drivers might force licence holders to lower the rent from the current average of 20,000 patacas a month.

Just five of the winning bidders have given up on their new licences.

I SSN 2226-8294

HANG SENG INDEX 19710

19660

19610

19560

More on page 3

19510

19460

Money laundering charge serves Sands a new blow L

August 3

HSI - Movers Name

%Day

SANDS CHINA LTD

4.19

as Vegas Sands Corp. faces an inquiry by United States authorities over its handling of millions of US dollars wired by a Californian executive, who was later sentenced for taking kickbacks. The inquiry is focusing on a Sands’ credit system that allows high rollers to deposit money in Las Vegas and access the funds in Macau.

CHINA COAL ENE-H

4.10

CHINA OVERSEAS

1.69

HENGAN INTL

1.66

CHEUNG KONG

1.56

PETROCHINA CO-H

-1.77

Page 8

CHINA MERCHANT

-1.89

LI & FUNG LTD

-2.26

SINO LAND CO

-2.65

COSCO PAC LTD

-2.77

Source: Bloomberg

Guangdong fair grows, stays put B

y the end of the four-day Guangdong and Macau Branded Products Fair yesterday, about 120,000 visitors had been through and sales were up by about 5 percent from last year’s edition. In January, the fair will head to Guangzhou but it will likely return to Macau’s Fisherman’s Wharf later in the year, even though organisers admit the venue is becoming too small.

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News where it matters

Page 6

www.macaubusinessdaily.com

Year I - Number 91 Monday August 6, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

2 |

business daily August 6, 2012

macau

Mice keep gambling, as fat cats get cautious But if global gloom persists even mass casino market might suffer Associate Editor

million to AERL’s rolling chip turnover but wasn’t the next year.

But AERL chairman Lam Man Pou – a veteran of Macau junket operations from the days of Stanley Ho Hung Sun’s casino monopoly – said one of the factors in his company’s VIP rolling contraction had been an “internal decision to tighten credit to agents, as the slowdown in growth in China has caused us to be more prudent in extending credit”.

Another possible factor in the differing revenue growth trends in massmarket versus high stakes play is that the finances of many VIP players in Macau are tied to the macroeconomic outlook overseas. Most of the high rollers are – according to some junket operators spoken to by Business Daily – involved in manufacturing for export. Many of them have factories in neighbouring Guangdong province in mainland China.

“They typically work on six month order cycles for shipping of goods overseas to Europe and the United States,” said an industry source. “So if orders contract from key markets, the high rollers know about that

Burning their stakes – mass-market customers still gambling with gusto

M

ass market gambling on table games continued to grow strongly year-on-year in July despite the contraction in high roller baccarat revenue compared to a year ago says J.P. Morgan in Hong Kong.

“From our channel checks, the VIP segment [in July] was down approximately five to eight percent year-on-year, whereas mass is still growing healthily at 25 to 30 percent year-on-year,’ said Kenneth Fong in a note to investors.

The full breakdown on July’s figures showing the split between high roller gambling – which accounted for 70 percent of all gross revenue in the second quarter of this year – and

mass market table play, will be available this week. But it appears from J.P. Morgan’s analysis that it’s the mass-market’s resilience that allowed Macau to post even a modest 1.5 percent growth year-onyear during July.

A similar trend was seen in the financial crisis that began in autumn 2008. VIP baccarat revenue fell almost immediately year-on-year in the fourth quarter 2008 – by 7.5 percent, while mass-market baccarat revenue actually grew by nearly 11 percent.

Possible reasons for that decline in VIP include the fact most high stakes play in Macau is funded by junket

business as usual

Soul-saving decision Paulo A. Azevedo pazevedo@macaubusinessdaily.com

I

t took a long time, more than four years, but there is a decision and it shows that heritage preservation continues to be one of the best examples of governance in Macau.

The remaining 35 stilt homes in Coloane will be preserved. These are traditional fisherman’s homes built on wood piles, representing a link with the city’s wonderful past.

The government wants to maintain the fisherman’s village and upgrade some of the facilities there, including the construction of a coastal sidewalk.

If the project goes to plan, commerce will be revitalised and new industries from the creative sector will be introduced.

If the government can fix the problem of floods and the accumulation of debris during typhoons, Coloane will win back part of its soul.

And this example, if done accordingly, will show that development should – and can – go hand in hand with the preservation of the city’s tradition.

KEY POINTS issued credit. The junkets operate on thin margins even though they are high volume businesses in terms of the value ‘rolled’ in betting chips by the players. So when economic headwinds are being felt, the junkets need to be more cautious in issuing credit as they can’t afford to write business on which they cannot collect.

Credit tightening Nasdaq-listed VIP room operator Asia Entertainment & Resources Ltd made that point in a recent statement to the New York Stock Exchange.

AERL reported a 40 percent yearon-year fall in rolling chip turnover for July – to US$1.3 billion (10.4 billion patacas) – at the company’s three VIP rooms in Macau. That in part was a function of the operator’s relatively small size. Just one cash player in the equivalent quarter in 2011 had contributed US$200

Mass market grew circa 35pct y-o-y in July VIP contracted 5-8pct y-o-y: analyst Macau VIPs are mainly exporters sensitive to world economics Quick decay of VIP demand seen in financial crisis 2008-09

well in advance of their clerks and middle managers – the sort of people who make up Macau’s mass market.

Those middle level people might not face the prospect of being laid off or having a wage cut for another half a year,” the person added.

Summertime blues Although a slowdown in the VIP revenue had been seen since May, it’s the first time since the second quarter of 2009 that VIP has gone into negative territory in terms of year-on-year growth. Whether July 2012’s contraction will prove to be a one off event or part of a trend will be revealed in the next few months. A number of analysts are currently emphasising the unusual circumstances. Typhoon Vicente that struck Macau at the end of the month, was a Category Nine storm with wind gusting at 151 kilometres per hour (94 mph) bringing flooding to the Inner Harbour – the most extreme weather event seen in the city since 1999. It possibly shaved as much as 700 million patacas (US$87.6 million) off July’s tally by disrupting travel for several days.

“We believe that the typhoon that hit Macau on July 23 and the rainy weather afterwards have hurt revenue growth by two to three percent,” said Kenneth Fong of J.P. Morgan, adding: “Given that August is normally seasonally stronger, the revenue should continue to show single digit year-on-year growth moving into next month based on the current run rate. Gaming revenue of August 2011 was 24.8 billion patacas. As such, we believe that we have passed the toughest month in term of yearon-year growth comparison.”

MGM China is due to report its second quarter results tomorrow. “We expect MGM to deliver a property EBITDA of US$182 million, up three percent year-on-year on good mass [market table games] and slot revenue growth,” stated Mr Fong.

A.E

August 6, 2012 business daily | 3

MACAU

New cab licences seen as risky bet

editorial

Learning lessons

Taxi operators are uncertain whether new licences for cabs will allow for any return on their investment Tony Lai

tony.lai@macaubusinessdaily.com

W

ith as many as 200 additional taxis to hit the road early next year when new licences are issued by the government, cab operators are still unsure if the investment is worthwhile.

The Transport Bureau says it has told the successful bidders for the new licences that they must register their new cabs by October 3, ready them for inspection and pay for the licences within 90 days.

“The 200 taxi licences are expected to be all in service between the end of this year and early next year,” the bureau told Business Daily.

One problem for the operators is that the newly licensed vehicles must have 2-litre engines and meet the Euro IV emissions standard.

The vice-president of the General Association of Macau Taxi Owners, Leng Sai Vai, said: “There are still doubts about the new taxis.”

During the bidding for the new licences in April, the operators described the Euro IV standard as unrealistic. At present their cabs must meet only the less-strict Euro II or Euro III standards.

The deadline to submit bids for the licences was put back by a week to allow operators more time to find suitable vehicles.

Another concern for the operators is that the new licences last for only eight years, cannot be transferred and cannot be renewed.

The Transport Bureau received nearly 2,200 bids for the new licences.

The highest successful bid was 1.1 million patacas (US$137,700) and the lowest about 830,000 patacas.

So far, five winning bidders for the new licences had backed out of their

commitment to buy them. Even so, neither the General Association of Macau Taxi Owners nor the Macau Taxi Association believes that many more operators will back out.

the winning bidders will lease [out] the cabs instead of driving [them] by themselves.”

Unpredictable factors

In issuing the 200 new licences, the government is trying to make it easier to hail a cab.

The city had only 980 taxis in June.

The last time the government issued new taxi licences was in 2008.

The Transport Bureau is also revising the regulations for taxi drivers.

In answer to an enquiry by member of the Legislative Assembly Mak Soi Kun, the bureau said it intended to impose harsher penalties on drivers for breaking the rules, for instance by refusing to take would-be passengers where they want to go, or by overcharging passengers.

The bureau told Mr Mak that the new regulations could be ready in the first half of next year.

Mr Tai of the Macau Taxi Association agrees that the regulations should be revised.

He wants the new regulations to be clearer than the old ones on certain matters, such as exactly what constitutes refusing service to a would-be passenger.

Mr Tai said the Transport Bureau had early this year asked cab operators for their opinions on the revision of the regulations, but that the operators had not heard anything back from the bureau since then.

Mr Leng of the General Association of Macau Taxi Owners thinks revision of the regulations is unnecessary.

“The problem right now is the authorities have not done their job in enforcing the laws,” Mr Leng said.

Each new licence, on average, costs more than 894,000 patacas.

Mr Leng said he was not surprised by this price as operating a taxi was regarded as good investment, despite the misgivings about the Euro IV standard and the licences themselves.

But Mr Leng said he considered the new licences riskier investments than licences issued in the past, as there were many “unpredictable factors” about the performance of the new cars.

The chairman of Macau Taxi Association, Tai Kam Leong, said the operators could right now only guess at the operating costs of the Euro IV standard vehicles.

“We don’t know whether the Euro IV car can last as long as eight years.

We also don’t know exactly how much more it will cost for fuel and maintenance than the older taxis,” Mr Tai said.

Mr Leng said there was also a shortage of taxi drivers. “It is even riskier for the taxi owners who lease the taxis to others instead of driving them themselves.”

To attract drivers, owners had to charge a lower rent for their cabs than the going rate of 20,000 patacas a month, he said.

The additional expense would make it more difficult for owners to turn a profit.

“As far as I know, over 70 percent of

Tiago Azevedo

tiago.azevedo@macaubusinessdaily.com

Enforcement deficit

W

ith the allegations and concerns around the business dealings of Sands China Ltd and its legal adviser Leonel Alves, Macau is back in the spotlight for the wrong reasons.

The shenanigans, especially in a year of public wrangling in the United States ahead of the presidential election, are not, however, a priority for the city to discuss. The focus for Macau should instead be a debate about what must surely be concerning everyone here – the opacity of the Executive Council, one of the city’s most important institutions.

Mr Alves is, at once, Sands China’s outside legal adviser, a legislator and a member of the government’s advisory body, where the chief executive handpicks the members. The involvement of some of them in Macau’s public life could raise some eyebrows due to a potential minefield of conflict of interests.

But the swirling news involving Mr Alves and Sands China raises several questions to how far behind Macau is when it comes to the promised “sunshine government”.

Although the current state of the government is to a great extent a legacy inherited by Chief Executive Fernando Chui Sai On, Macau’s political disorder directly contradicts his pledge before he was elected to become the city’s leader in 2009.

“Continuity and innovation” was his motto, with a pledge to promote openness and transparency. Three years into his term, continuity seems the dominant theme. Dozens of public consultations, by themselves, do not promote transparency.

No-one knows when the Executive Council meets, what they discuss nor the positions adopted by the

Photo by Manuel Cardoso

council’s members

Just 980 taxis now ply the streets with no new taxi cab licences issued since 2008

Just as it happens in the Legislative Assembly, powers in the Executive Council are unevenly balanced. There are mostly businessmen in the government’s advisory body, with too many vested interests from land and construction, to transport and casinos.

Some members of this body also have seats in the assembly, where they discuss draft laws they had previously approved.

But while there are discussions in the assembly about the need for more openness, including a move by some legislators to open committee meetings to the public, there is no such talk from the government’s advisory body.

No-one knows when they meet, what they discuss nor the positions adopted by the council’s members. No records nor minutes are made public and the population is kept in the dark.

Inconsistency continues to be the very essence of this institution during Mr Chui’s term, where one would expect more transparency.

Mr Alves’ recent headlines demonstrate that Macau still has much to do in-house.

While in many other places around the world that comment would spark public debate, many residents here – minus a few exceptions – seem shackled to their own interests and do not engage in the civil society. Often their sole interface is the government indiscriminately dishing out treats in the form of cheques and subsidies.

Let us hope the government realises that the Executive Council and its members should be held accountable for their decisions. Members of the government’s advisory body should take a first step towards more openness. They do not just need to be honest, they have also to look honest and be above any suspicion.

Unfortunately, that is not yet the case.

4 |

business daily August 6, 2012

macau Brought to you by

HOSPITALITY Transport blues There is a common perception that the traffic in the city is becoming more congested. Longer queues that last longer are a feature of a few critical junctions.

This means less fluid transport for residents and visitors alike. It is feared that visitors will find that slower journeys or greater difficulty in catching a bus or taxi detract from the pleasure of their visits.

There may be more important aspects of transport, but the simple availability of taxis and buses must be kept in mind in planning for the needs of the tourism industry.

The chart shows the growth indexes of the various means of transport compared with changes in the number of visitors.

Leaving aside the small contraction of 2009, mainly due to a small loss of population, the number of visitors is growing considerably faster than the number of vehicles. The number of light and heavy coaches, which are usually employed by tour, casino or hotel operators, is not growing nearly as fast as the number of visitors. Sooner or later this will mean greater use of such vehicles and, perhaps, the need for more of them. The big increase in the number of buses from 2010 to last year is attributable to the appearance of a third bus operator. Once this year’s figures are available, they may show a flattening of the upward trend.

The number of taxis seems insensitive to change. Although new licenses are due to be issued soon, the number of taxis has lagged behind demand for a decade.

Some deterioration of transport services and of the traffic flow seems inevitable, given the physical constraints of the city and the slowness of the government to react to changes. And do not forget the effects on other economic activity and on the quality of life of residents.

China’s housing policies ‘confusing’ A doctoral student says Beijing continues to see real estate as the prime stimulator of the mainland’s economic development, despite often contradictory measures to control its development.

Li Qiang is undertaking doctoral research at the University of New South Wales, Australia.

Ms Li was in Macau for the Global Chinese Real Estate Congress recently. She presented a study on the increase in housing prices in the mainland between 1998 and 2009.

She told Business Daily that the central government had taken “confusing” action and argues for government intervention to manage prices and maintain affordability.

Luciana Leitão

leitao.luciana@macaubusiness.com

During the period of your research, housing prices in the mainland skyrocketed. Why did prices increase?

The market’s fundamental factors played a great role, because these are still the main ones to drive the house prices.

In the short term, land prices played a great role in housing prices and, in the longer term, GDP and the size of the population also played a great role.

But government policies have also really shaken the market. The government tried to decrease access to credit and to define more positive measures for homebuyers.

Also, the land transfer method reform introduced in 2002, which was very famous at that time, had a positive impact on the house prices in the following years.

Before this reform, the developer could get the land directly from the government. Actually they could just shut the door and sit together to discuss the prices.

The government thought there was just too much corruption in this area, so the executive cancelled the method of direct negotiation and just put all the land into the market.

If you want to get in the market, you can get land through three methods: bidding, listing and auction. Considering they no longer negotiate the prices, many of the competitors could then participate in this process, so the land prices went up quickly and the house prices increased as well.

J.I.D.

The government role in this market is really confusing, so a more decisive action is needed

Should the government intervene to lower prices?

Yes. This is really a confusing problem for the researchers in the mainland because our government considers the real estate industry as the main one to stimulate our economic development. So, on one hand, they want to develop positive measures to keep this industry going on. But, on the other hand, people cannot afford the house prices. The government also wants to issue negative policies to decrease the house prices.

What negative policies has the government adopted?

The most important negative measure is that government started to construct affordable housing for the low-income residents. This programme targets 36 million units of new housing by 2015.

Another one is the trial property taxation in Shanghai and Chongqing starting from January 2, last year. It

aimed to cool off the housing market by adding the cost for the people who want to buy the second or more houses in the market. The government now is discussing whether to spread the trial to the whole country or not.

Looking at current trends, do you think house prices in the mainland will continue to increase?

I think, in the long run, China is going through a rapid process of urbanisation and there are still some factors, such as the growth of population and the economic growth, that will keep house prices going up.

The population cannot afford to buy a house, so their expectations for the future may lead to a decrease of the house prices. The government role in this market is really confusing, so a more decisive action is needed.

It actually depends on how the government will control the market but I think in the long run the prices will still be going up.

August 6, 2012 business daily | 5

MACAU Market forces Ms Li Qiang’s research paper uses annual data from 29 provinces from 1998 to 2009 to decipher the reasons for the increase in housing prices in the mainland.

“The contribution of the market versus policies on house prices in the People’s Republic of China”, charts a period of rapid change: from a centrally planned economy to a market economy; in incomes; in urban population; and in policy measures to manage the price boom.

In particular, it tries to show the role of the market fundamentals of incomes, construction costs and marriages.

Having stated that the house prices in the mainland increased at an average annual nominal rate of 11 percent in the last two decades ended 2009, Ms Li concludes that market fundamentals are what principally determine house prices, mainly changes in real interest rates, the supply of land and the housing stock.

China is going through a rapid process of urbanisation and there are still some factors, such as the growth of population and the economic growth, that will keep house prices going up The economy is currently going through a slowdown. Has it had any effect on house prices?

I think, because of the crisis, China’s economy has now decreased.

However, China still has the power to maintain [an expanding] economic environment, so that will cause the

house prices to keep going up.

Banks and analysts say there is already a looming real estate bubble.

Do you agree?

Yes. Lots of researchers are now doing this housing bubble measurement. I think housing prices in urban areas

of the mainland are too high. There are actually bubbles in the housing prices now, especially in the large and prosperous provinces.

In my study I compared the prices I predicted using the model of market fundamentals and the actual prices.

It shows that before 2002 the houses

were underpriced. Since 2002, these [are] actually overpriced.

Fifty percent of the deviation will come back to the equilibrium value in the next 15 years, which is half of the speed compared to the United States, Britain and all these developed countries.

6 |

business daily August 6, 2012

macau

Fair sales see slight uptick

Brought to you by

Sales of more than 40 million patacas registered at the fourth edition of Guangdong Macau Branded Products Fair

Investing abroad

Xi Chen

xi@macaubusinessdaily.com

Since 2002, the Monetary Authority of Macau has reported annually on the international investment portfolio of Macau residents. The report concerning 2011 is just out. “The survey covers the external assets of residents, both individuals and institutions, public and private Note, however, that the region’s foreign exchange reserve is not included. The survey counts assets that are issued by non-resident entities. They fall into three broad categories: equities, long-term bonds and short-term bonds.

The market value of the combined assets amounted to 168.7 billion patacas (US$21.1 billion) at the end of last year. This sum was roughly equivalent to 58 percent of gross domestic product at current prices or the total of deposits in the banking system. These investments grew by 32.3 percent during the course of last year. The chart shows that this was largely due to an increase in investment in equities. The annual rate of growth in investment in equities accelerated to almost 50 percent in last year from 13.9 percent in 2010. Proportionately, the annual rate of growth in investment in short-term bonds was even faster, at 76.1 percent. But short-term bonds made up just 4.6 percent of the portfolio and therefore carry little weight.

Hong Kong assets made up 37.9 percent of assets issued abroad held by Macau residents at the end of 2011, and mainland Chinese assets made up 24.7 percent. United States assets made up 6.2 percent, British assets 5.3 percent and Cayman Islands assets 5 percent. Three tax havens were among the top ten issuers of assets preferred by Macau residents: the Cayman Islands, Bermuda and the British Virgin Islands. About 10 percent of the assets in the portfolio were issued in these and other tax havens.

J.I.D.

M

ore than 118,000 visitors had been through the Guangdong and Macau Branded Products Fair by yesterday afternoon. The sales from the fourday event will exceed 40.5 million patacas (US$5 million), a 5-percent increase over last year’s event.

“We are expecting the final headcount of visitors to be between 120,000 to 130,000 by the time the fair finishes,” executive director of Macau Trade and Investment Promotion Institute, Irene Lau Kuan Va told reporters.

Three more cooperation protocols were signed this year compared to last year’s 13. New deals included one contract, two agreements, 12 letters of intent and one memorandum.

The memorandum, 2013 MacauGuangzhou Famous Products Fair, was signed between the Macau Trade and Investment Promotion Institute and the Bureau of Foreign Trade and Economic Cooperation

of Guangzhou Municipality. The fair is expected to take place next January in Guangzhou.

Other protocols cover the sourcing of motorbikes and vehicle tyres, LED lighting wholesale and retail, agricultural machinery and textile imports into Macau, Mrs Lau said.

The vent included 873 businessmatching sessions, an increase of 13 per cent compared to last year.

Among them, 561 sessions were held between Macau and Guangdong companies, 105 sessions were held for Macau firms, and 144 for Guangdong companies.

In addition, 63 sessions were between Macau, Guangdong and overseas companies, an increase of 26 per cent on last year.

The organisers of the fair also set up a centre to display products from participating merchants who are interested in distributing to the territory.

Organisers invited 251 merchandis-

ers from Macau, Hong Kong, Taiwan and Portuguese-speaking countries to the centre to conduct negotiations on sourcing and purchasing.

Three agency contracts were signed and the negotiations of other contracts are still underway.

Now into the fourth year of the event, the organisers have discussed if a change of location is needed. The fair is currently based at Fisherman’s Wharf.

Mrs Lau said the investment promotion agency would consult merchants. The organisers were in talks about next year’s location but the preference was to retain the current, smaller, location because it is more easily accessible compared to Cotai.

The fair takes place annually in August and is organised by the Macau Trade and Investment Promotion Institute and Guangdong’s Department of Foreign Trade and Economic Cooperation.

The number of business-matching sessions held during the Guangdong and Macau Branded Products Fair increased by 13 percent this year

Weather Beijing 32/23o C Changchun 28/18o C

Harbin 29/18o C

Xian 33/21o C Shanghai 32/27o C Chengdu 31/23o C Kunming 26/17o C Haikou 31/23o C Sanya 32/27o C

Guangzhou 34/26o C

MACAU (6-11 August) Day

Temperature

Humidity

08/06

28/33o C

50/90 %

08/07

28/34o C

45/95 %

08/08

27/32o C

50/95 %

08/09

27/32o C

50/95 %

08/10

27/32o C

50/95%

08/11

27/31o C

55/95 %

Shenzhen 33/25o C

ASIA (today)

Hong Kong 33/27o C

Manila

TOKYO

Jakarta

29/26o C

32/26o C

29/26o C

31/24o C

Macau 33/28o C

Bangkok

SEOUL

K. lumpur

31/27o C

SINGAPORE

35/25o C

33/25o C

taipei

33/26o C

August 6, 2012 business daily | 7

MACAU

InBrief

Mahjong centre opens amid revenue boom

Payoff for Future Bright to leave Circle Square Restaurant operator Future Bright Holdings Ltd will receive HK$14.5 million (US$1.9 million) compensation to leave the ground floor shops of Circle Square building in San Ma Lou, the company announced in a filing to the Hong Kong Stock Exchange on Friday. The firm will close a Pacific Coffee Co shop and Japanese restaurant Oishii Ichiban three years into a nine-year tenancy deal. Future Bright said the group’s resources will “be deployed on other restaurants at different locations”.

W

ith mahjong revenue growth defying the overall gambling slowdown, the New Golden Mahjong Centre, a trial venture with 20 tables, opened last week at Sociedade de Jogos de Macau’s Lisboa casino.

“The casinos have now only just recognised mahjong’s potential and are starting to capitalise on it,” said Ben Lee, a Macau-based gaming consultant with IGamiX Management and Consulting.

“You’ve got to wonder, with all of these tables now coming online,

what the prospects are for taking it high-end, for instance, getting the VIP players to play for big stakes,” he told Gambling Compliance.

In the first half of this year, mahjong revenue has reached 108 million patacas (US$13.5 million), a fourfold year-on-year increase from the same period of 2011, according to the Gaming Inspection and Coordination Bureau.

If growth remains unchanged, mahjong revenue is likely to overtake that of Las Texas Hold’em Poker: 143 million patacas in the first half.

More detained in fraud probe The police increase their tally of arrests in a two-year-old investigation to 39 Xi Chen

xi@macaubusinessdaily.com

P

olice have held 17 more people for alleged casino fraud in what is already a two-yearold investigation.

It was the third wave of arrests since police opened began their inquiries into a criminal ring that is swindling casinos.

There have been 39 arrests made over the course of two years and police say there is only one member of the gang still at large.

The first three arrests were made last October and another 19 arrests came in June.

Police say the gang bribed casino employees to tape the dealing of cards during baccarat games.

The information was used at three casinos at least 12 times to win HK$90 million (US$11.6 million) fraudulently.

Of the 17 suspects recently arrested, 11 were casino employees. One is suspected of being the ringleader,

in charge of recruiting new members among casino workers, TDM news reported.

One casino employee has confessed that they received commissions of between HK$10,000 and HK$200,000 for assisting in fraud.

The suspects come mainly from mainland China, Macau and Southeast Asia, the investigation has found.

In an unrelated case, three people were arrested for allegedly stealing HK$20 million from a casino’s accountancy department to gamble at the same casino’s tables.

The arrests came when police officers raided casinos and hotels late on Friday.

Officers have questioned almost 1,300 people and detained at least 150 people for further investigation, as part of a joint operation with the Hong Kong and mainland authorities.

In both games operators get a 5 percent commission from the chip turnover.

“Mahjong makes just as much money as Texas Hold’em Poker, but mahjong does not have the operating costs of poker tables, for instance, a dealer on every table,” Mr Lee said.

The Lisboa mahjong venture is led

by Alex Lee Shiu Ming, who told media mahjong could enjoy further growth. He added that nearly 70 percent of mahjong gamblers are from mainland China.

V.Q.

Portuguese producer signs Nam Yue deal Portuguese meat product maker Grupo Montalva has signed a cooperation deal with state-owned Guangdong Nam Yue (Group) Co. Ltd that will allow its products to be sold in Macau, Hong Kong and the mainland.

Montalva chief executive officer Carlos Mota said the company had a strategy to develop internationally.

Nam Yue chief executive Cao Dahua told Portuguese news agency Lusa the deal would provide Nam Yue with “a new platform … to expand its food business”.

8 |

business daily August 6, 2012

macau

Sands in the sights of money laundering probe U.S. investigators look into how a Las Vegas Sands internal credit system was used Vítor Quintã

vitorquinta@macaubusinessdaily.com

A U.S. Democratic Party group has retracted accusations that Las Vegas Sands chairman Sheldon Adelson encouraged prostitution in Macau

U

nited States prosecutors are reportedly investigating whether casino operator Las Vegas Sands Corp. allowed a high roller to move millions of US dollars in kickbacks from Las Vegas to Macau.

The Wall Street Journal quoted sources as saying the U.S. Attorney’s Office in Los Angeles is looking into whether the company broke money laundering laws in its handling of money wired by a Californian executive.

Between 2006 and 2008, Ausaf Umar Siddiqui, then a vice-president of retailing chain Fry’s Electronics Inc, transferred more than US$100 million (798 million patacas) to two Las Vegas Sands subsidiaries from a company specifically created to receive kickbacks.

Documents quoted by the newspaper say Mr Siddiqui used a Las Vegas Sands internal credit system which allowed high rollers to deposit money in Las Vegas and get access to the funds in Macau, where a subsidiary, Sands China Ltd, operates the Sands Macao, The Venetian Macao and The Plaza casinos.

Mr Siddiqui was earning about US$200,000 a year when he was arrested in 2009. He pleased guilty to taking kickbacks and is serving a six-year prison sentence.

“Like the rest of the industry, we had absolutely no knowledge of embezzlement and our due diligence gave us no reason to believe he was anyone but the person he purported himself to be,” the newspaper Las Vegas Sands spokesperson Ron

Reese as saying.

It said US federal authorities were also examining whether Las Vegas Sands and several of its executives should have told the authorities about millions of dollars transferred to its casinos by mainland-born Mexican, Zhenli Ye Gon. Meanwhile, the Associated Press reported that a US Democratic Party group had retracted accusations that Las Vegas Sands chairman Sheldon Adelson had encouraged and profited from prostitution in the company’s casinos in Macau.

The group alleged that Mr Adelson donated “Chinese prostitution money” to Republican Party leaders.

“The statements were untrue and unfair and we retract them,” the Democratic Congressional Campaign Committee (DCCC) said on Thursday.

“The DCCC extends its sincere apology to Mr Adelson and his family for any injury we have caused.”

Mr Adelson’s lawyers had threatened to sue the committee for defamation.

Corporate

New exec chef at Four Seasons Macao Klaus Kallweit has been appointed executive chef at Four Seasons Hotel Macao. His previous roles include working at Jumeirah Beach Hotel Dubai in the United Arab Emirates, and as senior chef de partie at the Landmark Hotel London.

He began his Four Seasons career in January 2004, taking up the position of executive sous chef at Four Seasons Hotel London. He moved to Asia in March 2006 when he was transferred to Four Seasons Resort Bali at Jimbaran Bay. He was then promoted to executive chef overseeing the resort’s five food and beverage operations and the kitchen team including the resort’s cooking school.

Mr Kallweit is originally from Germany and started his career as apprentice chef at a small family hotel in that country in 1988. He spent three years developing his skill before joining the international hotel company Steinberger Hotel Axemannstein Bad Reichenhall to expand his culinary experience.

Shanghai hotel boss new GM at MGM Grand Ho Tram

A former executive for JW Marriott Hotel in Shanghai has been appointed as vice president and hotel general manager for MGM Grand Ho Tram, a casino resort under construction in Vietnam. The first wing of the resort, to open in early 2013, will feature 541 luxury rooms and suites.

British born John Webb started his international career by moving to Sydney, Australia in 1990. He stayed in Australia for nine years and worked with Renaissance/Ramada Hotels before taking his first management role in Asia.

Most recently Mr Webb was in charge of the Langham Xintiandi, Shanghai.

He oversaw the project from late in its construction phase, through preopening, soft opening, official opening and early operations.

The two-hotel wing at MGM Grand Ho Tram, 120 kilometres (75 miles) north of Ho Chi Minh City, will ultimately feature 1,100 rooms, suites and villas. Mr Webb will report to John Shigley the resort’s president and chief operating officer.

August 6, 2012 business daily | 9

greater china

Services sector maintains InBrief healthy growth Date set for Bo Xilai wife trial

The wife of ousted Chinese politician Bo Xilai will stand trial for murder on August 9 in eastern China’s Hefei city, the Associated Press reported, citing two lawyers close to the case. Two officials from the U.K. embassy in Beijing will be given access to the trial of Gu Kailai, according to an official of the mission who spoke on condition of anonymity.

Ms Gu and a family aide, Zhang Xiaojun, are accused of “intentional homicide” by poisoning British businessman Neil Heywood, the official Xinhua News Agency reported on July 26.

HK govt criticised over plastic spill Hundreds of millions of potentially toxic plastic pellets from containers knocked off a vessel during Hong Kong’s worst typhoon in 13 years have washed up on its beaches where they lay for more than a week, activists said on Saturday.

The Hong Kong government estimated that 150 tonnes of the pellets may have been spilled on its beaches, of which a third have been cleaned up so far.

Media questioned the government’s lack of public notice about the spill, almost two weeks after Typhoon Vincente, which was upgraded to signal No. 10. The Environmental Protection Department said water quality had not been affected.

China’s fast-growing services industry has so far weathered the global slowdown Lucy Hornby and Xiaoyi Shao

C

hina’s services sector expanded in July at a healthy clip, in contrast to a struggling manufacturing sector, although surveys released on Friday showed some signs of weakness in new orders and pressure from overcapacity.

China’s official purchasing managers’ index (PMI) for the services sector fell to 55.6 in July from 56.7 in June, the National Bureau of Statistics said. Growth in new orders eased, although construction services jumped.

A rival services PMI, sponsored

by HSBC, headed in the opposite direction, rising to 53.1 in July from a 10-month low of 52.3 in June. It showed new orders picking up, albeit at a below-trend pace.

Nevertheless, both headline readings were well above 50, which indicates growth in the sector’s overall activity.

Dariusz Kowalcyzk, an economist with Credit Agricole-CIB in Hong Kong, said the data underlined that services are doing much better than the manufacturing sector, which would help combat the slowdown in economic growth.

“The decline is significant and we are surprised by its scope,” he wrote in a client note, referring to the official services PMI. “However, the

55.6 points level is relatively high, and much better than in the case of manufacturing PMI. It is consistent with solid growth of the services sector, which will put a floor under the whole economy,” he said.

Stable expansion China’s fast-growing services industry has so far weathered the global slowdown much better than

KEY POINTS Official services PMI weakens to 55.6 in July HSBC services PMI ticks up to 53.1 New orders cool, construction services strong Surveys follow sluggish PMIs on manufacturing sector

Bank of Taiwan seeks yuan transactions Bank of Taiwan’s role in implementing government policy bolsters its case to be the island’s first lender allowed to clear transactions in yuan, Chairman Liu Teng Cheng said in an interview.

The central banks of Taiwan and China are discussing an agreement that would allow settlement of transactions on the island in the Chinese currency as relations warm between the former rivals. The agreement would allow banks to meet rising demand for yuan from Taiwanese companies with growing businesses, Mr Liu said in Taipei, where the lender is based.

Taiwan joins Singapore and London in seeking to become locations where companies can raise yuan to fund their investments and operations in China.

HTC sees revenue drop Taiwanese smartphone maker HTC Corp. said on Friday it sees sales growing only in China this quarter while other regions decline, forecasting as much as a 23 percent fall overall in revenue. The world’s No.5 smartphone maker, once one of the industry’s high flyers but badly hit by competition from Apple Inc and Samsung, sees third-quarter revenue at between T$70 billion and T$80 billion (US$2.3 billion and US$2.7 billion), compared with T$91 billion in the second quarter.

“China will continue to see growth in the third quarter, while other markets will have different degrees of decline,” chief financial officer Chialin Chang told an investor conference.

The construction services sub-index is growing strong, rising to 60.4 in the official PMI

China’s vast factory sector. The services PMIs have consistently signalled healthy expansion, with the official version hitting a 10-month high in March and the HSBC survey reaching a 19-month high in May. Two surveys this week on China’s manufacturing industry showed PMI readings around 50. Combined, they signalled that smaller, private-sector firms were beginning to stabilise after months of weakness, while larger, state-owned enterprises faced pressure from unsold inventories and slowing growth.

The official services PMI showed water-borne transport, hotels, and postal services all contracted, while Internet software, air transport and residential services remained in growth territory.

“The index indicates the stable economy expansion in the nonmanufacturing sector has not been changed,” said Cai Jin, a vice president at the China Federation of Logistics and Purchasing (CFLP), which conducts the official survey on behalf of China’s National Bureau of Statistics. “The sub-indexes measuring input price and sales prices all dropped below 50, which shows the upward pressure on prices has been reduced.”

Notably, the construction services sub-index rose by 2.3 points to 60.4 in the official PMI, indicating strong growth and reflecting a loosening of the tight restrictions on China’s property developers that had reined in economic growth in the first half of 2012.

“With the end of rainy season and related investment projects startup, we expect the construction activity will remain buoyant,” the CFLP said.

Still, Markit Economics, which compiles the HSBC survey, said input prices increased slightly due to higher labour costs while sales prices fell, indicating the sector is still struggling with overcapacity.

Reuters

Beijing says U.S. sending ‘wrong signal’ over dispute Tensions rising as China seeks to establish a military garrison in the Paracel Islands

C

hina said U.S. criticism of its attempt to bolster claims to gas- and oil-rich islands in the South China Sea sent “a seriously wrong signal” to nations embroiled in territorial disputes in the region.

China said U.S. criticism of its attempt to bolster claims to gas- and oil-rich islands in the South China Sea sent “a seriously wrong signal” to nations embroiled in territorial disputes in the region.

China’s recent actions “run counter to collaborative diplomatic efforts to resolve differences and risk further escalating tensions,” a State Department spokesman, Patrick Ventrell, said in an August 3 statement.

Mr Ventrell’s criticism “completely ignored the facts, deliberately

confounded right and wrong” and isn’t conducive to efforts for peace and stability in the region, a Chinese Foreign Ministry spokesman, Qin Gang, said yesterday. China also yesterday summoned Robert Wang, the acting representative of the U.S. embassy in Beijing, to complain about the U.S. statement and request that Mr Wang report Chinese concerns “to the top U.S. leadership immediately,” the ministry said in a statement on its website.

Tensions have been rising in the region as China has sought to establish a city and military garrison in the Paracel Islands and to physically block foreign access to a disputed reef off the coast of the Philippines, according to the U.S. State Department. Vietnam,

Malaysia, the Philippines, Taiwan and Brunei also claim rights to islands in the sea.

“What we’re seeing is a significant ratcheting up of Chinese pressure on the region to basically acquiesce that the South China Sea is Chinese territory,” Dean Cheng, a researcher on Chinese political and security issues at the Heritage Foundation in Washington, said in a telephone interview.

China’s assertiveness in the region coincides with preparations for a political and military transition.

Communist party leaders are believed to be meeting to select new members for the country’s Politburo and Standing Committee, the nation’s civilian leaders, and its Central Military Commission, which controls the military, Mr Cheng said. In October or November, the full party Congress will convene to select a new president to replace Hu Jintao in a once-a-decade leadership handover. “Nobody wants to look weak,” Mr Cheng said.

Bloomberg

10 |

business daily August 6, 2012

asia

Japan Airlines to raise InBrief US$8.5 bln in re-listing Nomura punished for trading flaws

Japan’s Nomura Holdings Inc. has been told to bolster internal controls after it admitted its role in an insider trading scandal. The country’s Financial Services Agency (FSA) said Nomura must give it reports on the steps it is taking. Nomura has admitted that some of its staff leaked sensitive information on planned share offerings by a number of firms. The FSA had the power to give Nomura a stronger punishment. “Nomura must push ahead with reforms to restore trust in Japan’s financial markets,” Financial Services Minister Tadahiro Matsushita told reporters on Friday.

Airline planning a share sale two years after it received a bailout in one of Japan’s biggest bankruptcies Chris Cooper and Kiyotaka Matsuda

Delayed-retirement bill advances in Japan Japan’s lower house of parliament approved legislation that would give private-sector workers the right to remain in their jobs until they are 65 years old rather than 60 as the nation struggles with welfare costs.

Lawmakers passed the bill on Friday, according to the lower house website.

It would take effect in April next year after approval in the upper chamber, where the ruling and opposition parties have expressed support for the measure. The legislation is aimed at helping workers cope with an extension in the age for drawing pensions to 65 by 2025, according to the Health Ministry.

Heineken seals Tiger beer purchase Heineken NV, the world’s thirdbiggest brewer, agreed to buy Fraser and Neave Ltd’s stake in Asia Pacific Breweries Ltd for S$5.1 billion (US$4.1 billion) to gain control of the maker of Tiger beer. F&N’s board of directors recommended Heineken NV’s offer of S$50 a share for its 40 percent stake in APB to shareholders. Heineken already owns a 42 percent stake and is seeking full control of Singapore-based APB as it attempts to protect its hold over a key emerging-market asset. Meanwhile, Thai Beverage Pcl won a S$2.8 billion loan facility from global banks to finance its proposed purchase of a 22 percent stake in F&N’s.

A strong currency has increased the spending power of Japanese consumers, boosting demand for travel

J

apan Airlines Co. will seek 663 billion yen (US$8.5 billion) in the second-biggest initial public offering this year, completing a two-year turnaround from bankruptcy into the world’s most profitable carrier.

The airline will list on the Tokyo

Stock Exchange on September 19, it said in a Ministry of Finance filing on Friday. Its government-backed owner will sell 175 million shares at a tentative price of 3,790 yen apiece.

That values the carrier at about five times projected profit, less than half All Nippon Airways Co.’s about

12-times valuation.

The biggest initial public offering since Facebook Inc.’s marks JAL’s return after former chairman Kazuo Inamori slashed jobs, cut debt and retired older, less fuel-efficient aircraft to revive profit. The proceeds will be used to return a 350 billion

North Korea’s leader makes diplomatic debut Economic development a priority, says Kim Jong-un Chris Buckley and Ju-min Park

Mongolia’s ex-leader gets jail term Former Mongolian President Nambaryn Enkhbayar was found guilty of graft charges and sentenced to four years in prison, a court spokesman in Mongolia said. He has 14 days to appeal the decision. The Sukhbaatar district court’s decision, which includes an order to confiscate more than 30 million tugriks (US$22,206) of Enkhbayar’s property including apartments, was passed late on Thursday. The trial of Mr Enkhbayar, who served as president until 2009 and earlier was Mongolia’s prime minister, has divided public opinion in the commodity-rich nation.

Mr Enkhbayar was named the nation’s most prominent politician in a June poll by the Sant Maral foundation.

Kim Jong-un (third, right) held his first top-level diplomatic meeting as North Korea seeks support

N

orth Korea’s new young leader has told chief backer China that his priority is to develop the decaying economy and improve living standards in one of the world’s poorest states, the latest sign that he may be planning

economic reforms.

Kim Jong-un, who took over the country last December, has presented a sharply contrasting image to his austere father. He was shown most recently in public at a Pyongyang theme park with his young wife on

his arm and riding a roller coaster in the company of a man reported to be a British diplomat.

“Developing the economy and improving livelihoods, so that the Korean people lead happy and civilized lives, is the goal the

August 6, 2012 business daily | 11

asia yen to the state-backed turnaround body that invested in the airline, while the government will get the remainder, a windfall of as much as 313 billion yen at the tentative price.

“The turnaround has been done extremely well,” said Peter Harbison, executive chairman at the Sydney-based Centre for Asia Pacific Aviation. “They’ve done a lot of sensible things in reducing routes and corporate complexity that dragged it down.”

JAL, which will get no money from the sale, reiterated its profit forecast of 130 billion yen for the year ending March 31, compared with 40 billion yen at larger Tokyobased rival ANA. The global average valuation for airlines worth at least US$5 billion is 10 times estimated earnings, according to data compiled by Bloomberg.

Record profit JAL will displace ANA as the world’s fourth-largest airline by market value after the offering, according to current values and the tentative share-sale price. Latam Airlines Group SA is the largest at US$11.3

US$2.4 billion Japan Air’s profit in the year ended March 31

Korean Workers’ Party is struggling towards,” he was quoted by China’s Xinhua news agency as telling Wang Jiarui, visiting head of the Chinese Communist Party’s International Department and Beijing’s key interlocutor with the North.

It appears to be the highest level diplomatic meeting Kim has held since taking power over 7 months ago.

Though the report offered no details, there has been mounting speculation that Mr Kim’s oneparty state is looking at reforms to help lift an economy dragged down by decades of mismanagement and international sanctions, and rarely far from famine.

Those economic problems have been compounded by drought and then, last month, torrential rain and widespread flooding.

North Korea said 400 people were missing and about 212,000 were left homeless following heavy rains and floods that lasted through July.

The floods killed 169 people and injured 144, while destroying more than 8,600 houses and submerging 43,770 residential buildings, the official Korean Central News Agency said yesterday. At least 65,280 hectares of farmland was damaged, KCNA said.

Planning reforms In the face of broad sanctions over its missile and nuclear weapons programmes, the North

billion, followed by Air China Ltd at US$10.9 billion and Singapore Airlines Ltd at US$10.1 billion.

“JAL is regarded pretty highly among market participants after improving its earnings,” said Ryota Himeno, an analyst at Barclays Securities Japan Ltd. “Still, with the emergence of low-cost carriers in Japan, and efforts from ANA, competition in the airline market is set to intensify.”

JAL posted a record profit of 187 billion yen, the equivalent of $2.4 billion, last fiscal year, more than twice that of Air China, the secondmost profitable, with US$1.1 billion, according to data compiled

by Bloomberg.

The Enterprise Initiative Turnaround Corp. of Japan, the governmentbacked body that funded JAL’s restructuring, will sell its 97 percent stake in the IPO. The share offering will be the largest in Japan since Dai-Ichi Life Insurance Co. raised 1 trillion yen, including the exercise of overallotment options, in March 2010.

The sale comes as JAL and ANA begin competing in the low-cost travel market because of rising demand for budget flights.

AirAsia Japan Co., a venture between ANA and AirAsia Bhd., last week became the third budget airline to start flights in the country this year.

ANA affiliate Peach Aviation Ltd started operations in March and Jetstar Japan Co., whose owners include JAL and Qantas Airways Co., began flying last month.

ANA is also selling shares. The carrier said last month it expects to raise as much as 175 billion yen by selling 1 billion new shares to pay for new aircraft and finance acquisitions.

Net income was 668 million yen in the first quarter, compared with an 8.5 billion yen loss a year earlier, the carrier said in a statement on Friday.

Sales rose 13 percent in the quarter to 343 billion yen.

Bloomberg

has been forced to rely heavily on aid from its giant neighbour China, the nearest ostracised state has to an ally.

In a sign he may be looking to emerge from isolation, he has dispatched his head of parliament, Kim Yong-nam, to Vietnam and Laos, the North Korean KCNA news agency reported.

Mr Kim, in his late twenties, has sought to impose his own stamp on the top leadership of North Korea, and recently ousted Vice Marshal Ri Yong-ho, the country’s leading military figure, who was seen as close to Kim Jong-il.

He is gearing up to experiment with agricultural and economic reforms after purging Ri Yongho for opposing change, a source with ties to both Pyongyang and Beijing told Reuters.

Analysts in Seoul said Mr Kim was probably preparing for a package of reform measures on the economy and Mr Wang’s visit could be seen as a public show of support from China.

“By emphasising the importance of food and civilised living conditions, I think he wanted to request for China’s support,” said Yang Moo-jin, professor at University of North Korean Studies in Seoul.

He said he expects Pyongyang to unveil his reforms early next year after the scheduled government changes in China, South Korea and the United States.

Reuters

Toyota reports surge in profits Boosted by strong sales and a recovery from last year’s natural disasters

Toyota sales have seen a steady rise in the past few months helping its recovery

T

oyota Motor Corp., which can expect lots of car sales.” outsold General Motors Co. In the first six months of 2012, and Volkswagen AG for two Toyota’s sales rose 34 percent to 4.97 straight quarters, may extend the million globally, leading Detroitlead after the Japanese carmaker based GM by 300,000 and VW raised its sales forecast for 2012. by 520,000 deliveries. GM global Sales – including those of its Dai- deliveries rose 2.9 percent to 4.67 hatsu Motor Co. and Hino Motors million during the first half while VW Ltd units – may rise 23 percent to sales increased 8.9 percent to 4.45 a record 9.76 million units in 2012, million, according to the companies.

Toyota said, raising an earlier tar- Toyota rose 0.7 percent to close at get of 9.58 million. It also reported 3,065 yen on Friday before the earnnet income jumped to a four-year ings announcement, extending this high last quarter, a day after GM year’s gain to 19 percent in Tokyo posted a 38 percent profit drop. trading. Still, the stock has surrenWolfsburg, Germany-based VW dered about half its gains since the end last week reported operating profit of March after the yen turned into the growth slowed. best-performing major currency from “Toyota’s got a fair lead, and it’s the worst performer within a quarter. going to be a tough act for the Net income reached 290.3 billion others to make up for it in the yen (US$3.7 billion), or 14 percent second half,” higher than the Ashvin Chotai, average of seven London-based analysts’ estimanaging dimates compiled rector at Intelliby Bloomberg. gence AutomoWhile earntive Asia, said. ings improved “This particuacross most lar year, it looks major regions like Toyota has in line with expulled ahead pectations, opVehicles sold by impressively.” erating income Toyota in the first T o y o t a , in Japan surged half of 2012 plagued by to more than natural disasdouble analysts’ ters in 2011, estimates. Revebenefited as the nue climbed 60 Prius hybrid percent to 5.5 helped sales almost double in Ja- trillion yen and the maker of the pan, while demand for the Camry Corolla compact sedan, the world’s continued to exceed that of any best-selling car, also said it plans to car in the U.S. The company, led produce a record 10.05 million veby President Akio Toyoda, is now hicles in 2012. counting on the U.S. demand to In the U.S., April-to-June deliveries help sustain earnings growth as increased 48 percent to 558,812 analysts project Japan sales to vehicles, helped by sales of the slow after government subsidies best-selling Camry sedans, Corolla run out later this year. sedans and Prius hybrids as Toyota “Toyota’s previous forecasts may led the Japanese auto industry’s have been conservative, but when recovery from last year’s production all the companies are becoming disruptions, according to data cautious with regard to the econ- compiled by Bloomberg. omy, I find it peculiar” Toyota is In Japan, Toyota’s deliveries almost raising their projection, said Yuuki doubled last quarter, led by the Sakurai, chief executive at Fukoku Prius hybrid, as pent-up demand Capital Management Inc. “If you and government subsidies for fuelthink about the global economy, efficient cars helped spur demand.

Bloomberg we’re not in a situation where you

4.97 million

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business daily August 6, 2012

MARKETS Hang SENG INDEX NAME

PRICE

Day %

VOLUME

26.75

-0.9259259

18279664

ALUMINUM CORP-H

3.17

0

5996712

BANK OF CHINA-H

2.95

0

234070956

BANK OF COMMUN-H

5.18

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14635294

26.95

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2553973

AIA GROUP LTD

BANK EAST ASIA BELLE INTERNATIO

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CHINA UNICOM HON

11.48

0.1745201

17718696

CITIC PACIFIC

11.16

-0.5347594

1760369

SANDS CHINA LTD

CLP HLDGS LTD

66.85

0.0748503

1189389

CNOOC LTD

15.34

-0.6476684

52045136

COSCO PAC LTD

10.52

-2.772643

2783368

NAME

PRICE

Day %

61.75

-0.4032258

1786981

23.6

4.19426

6666567

SINO LAND CO

13.22

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6531780

SUN HUNG KAI PRO

96.95 -0.05154639

1794414

SWIRE PACIFIC-A

92.45

-1.544196

1277010 1856701

POWER ASSETS HOL

VOLUME

13.9

-0.997151

10237929

ESPRIT HLDGS

9.37

-0.6362672

2707911

TENCENT HOLDINGS

230.4

0.173913

BOC HONG KONG HO

23.75

-0.8350731

8025189

HANG LUNG PROPER

27.3

1.298701

3600793

TINGYI HLDG CO

18.98

-1.248699

6173037

CATHAY PAC AIR

12.66

-1.55521

1729619

HANG SENG BK

108.4

-0.1841621

737098

9.37

-1.368421

6773882

CHEUNG KONG

HENDERSON LAND D

45.25

0.77951

4206796

103.9

1.564027

5259173

CHINA COAL ENE-H

7.61

4.103967

56900125

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5.27

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173155592

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21.3

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22323188

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23.35

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1157810

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88

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15502130

HUTCHISON WHAMPO

CHINA OVERSEAS

18

1.694915

18065155

IND & COMM BK-H

CHINA PETROLEU-H

7

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37887696

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21.25

-1.392111

2124723

14.9

0.5398111

13568367

CHINA RES POWER

16.84

0.8383234

CHINA SHENHUA-H

29.25

0.862069

CHINA RES LAND

45.6

0.2197802

2298909

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73.55

1.658604

1584777

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17.84

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2702658

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105.3 -0.09487666

2992375

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7997070

HSBC HLDGS PLC

WANT WANT CHINA WHARF HLDG

MOVERS

19

-0.4369993

10937431

4.5

0.4464286

184982950

14.72

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12759484

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19885.99

27.2

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929032

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19467

NEW WORLD DEV

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8368165

3285403

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9.43

-1.770833

132275735

12900788

PING AN INSURA-H

61.45

0.6552007

8294556

LI & FUNG LTD

2 19890

INDEX 19666.18

68.35

MTR CORP

34

52W (H) 21760.33984 (L) 16170.35

19460

1-Aug

3-Aug

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

25

-0.3984064

10447903

YANZHOU COAL-H

7

-0.7092199

37887696

CHINA RAIL CN-H

6.48

-3.283582

CHINA RAIL GR-H

3.34 29.25

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.14

-0.3174603

57067063

CHINA PACIFIC-H

AIR CHINA LTD-H

5.26

-2.772643

11071085

CHINA PETROLEU-H

ALUMINUM CORP-H

3.17

0

5996712

ANHUI CONCH-H

20.8

-1.187648

9030582

BANK OF CHINA-H

2.95

0

234070956

CHINA SHENHUA-H

BANK OF COMMUN-H

5.18

0.9746589

14635294

CHINA TELECOM-H

BYD CO LTD-H

13.2

-1.492537

1755089

DONGFENG MOTOR-H

CHINA CITIC BK-H

3.88

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15030044

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5.41

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2731272

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7.61

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56900125

HUANENG POWER-H

5.48

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17449843

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6.67

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14370945

IND & COMM BK-H

4.5

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184982950

CHINA CONST BA-H

5.27

0.3809524

173155592

JIANGXI COPPER-H

17.3

-2.259887

7166123

PRICE

DAY %

VOLUME

12.36

2.14876

21580250

ZIJIN MINING-H

2.46

-0.4048583

16254537

28059330

ZOOMLION HEAVY-H

9.13

0.5506608

11047262

-1.474926

12467203

ZTE CORP-H

10.42

2.357564

10906834

0.862069

12900788

4.05

2.272727

45552550

10.88

-1.981982

13704310

3.2

-0.9287926

8286401

PETROCHINA CO-H

9.43

-1.770833

132275735

CHINA LIFE INS-H

21.3

0.2352941

22323188

PICC PROPERTY &

8.68

-0.2298851

9726940

CHINA LONGYUAN-H

4.71

-1.464435

4768000

PING AN INSURA-H

61.45

0.6552007

8294556

CHINA MERCH BK-H

14.16

-0.5617978

15721831

SHANDONG WEIG-H

8.46

1.317365

3502286

CHINA COSCO HO-H

NAME

MOVERS

13

2 9810

INDEX 9660.99 HIGH

9809.88

LOW

9529.86

CHINA MINSHENG-H

7.22

-0.2762431

21435479

SINOPHARM-H

22.55

-0.4415011

3504127

52W (H) 11916.1

CHINA NATL BDG-H

8.03

-0.2484472

45814381

TSINGTAO BREW-H

44.3

-1.555556

2344670

(L) 8058.58

11.78

-1.340034

4129699

WEICHAI POWER-H

20.15

-1.707317

2872192

CHINA OILFIELD-H

25

9520

1-Aug

3-Aug

Shanghai Shenzhen CSI 300 NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

AGRICULTURAL-A

2.52

0.3984064

22008294

DAQIN RAILWAY -A

6.02

-0.1658375

27431297

QINGHAI SALT-A

34.3

2.205006

4380644

AIR CHINA LTD-A

5.94

0

5013605

DATANG INTL PO-A

5.06

0.3968254

3528300

SAIC MOTOR-A

12.38

-3.881988

41980511 10402569

ALUMINUM CORP-A

NAME

5.94

1.365188

6320614

ANHUI CONCH-A

14.99

1.147099

10561624

BANK OF BEIJIN-A

7.57

-0.2635046

6885970

BANK OF CHINA-A

2.76

0.3636364

10635974

GD POWER DEVEL-A

BANK OF COMMUN-A

4.44

0.2257336

29870493

GF SECURITIES-A

BANK OF NINGBO-A

10.15

0.09861933

13055270

GREE ELECTRIC

BAOSHAN IRON & S

4.25

0.2358491

13586292

NAME

VOLUME

DONGFANG ELECT-A

15.44

2.319417

5967133

SANY HEAVY INDUS

12.12

1

EVERBRIG SEC -A

12.37

0.4058442

8591501

SHANDONG GOLD-MI

33.14

-0.3907424

7688576

9.64

3.767492

24976036

SHANG PHARM -A

11.07

2.785515

10617456

2.69

0.3731343

22700407

SHANG PUDONG-A

7.74

-0.1290323

44045380

13.66

2.322097

15467834

SHANGHAI ELECT-A

4.32

1.647059

2939912

20.96

-0.8983452

12558865

SHANXI LU'AN -A

21.18

1.974001

10438868

GUANGHUI ENERG-A

12.42

2.729529

10662161

SHANXI XINGHUA-A

36.95

5.061132

3596764

17.1

1.725164

4079788

SHANXI XISHAN-A

14.22

-0.8368201

19128787

GD MIDEA HOLDING

14.41

0.7692308

6619794

GUIZHOU PANJIA-A

CHINA CITIC BK-A

3.94

-0.5050505

12138729

HAITONG SECURI-A

9.82

1.028807

30788559

SHENZEN OVERSE-A

5.92

0.6802721

27168608

CHINA CNR CORP-A

3.77

0.5333333

19366676

HANGZHOU HIKVI-A

28.02

1.890909

2892832

SUNING APPLIAN-A

6.43

1.419558

42479880

CHINA COAL ENE-A

7.66

1.861702

8105339

HEBEI IRON-A

2.64

0.3802281

15564269

TSINGTAO BREW-A

34.03

-1.647399

7978756

CHINA CONST BA-A

4.01

0

8230243

HENAN SHUAN-A

62.5

0

1595705

WEICHAI POWER-A

23.74

1.021277

3765815

BYD CO LTD -A

CHINA COSCO HO-A

4.26

0.7092199

3319676

HONG YUAN SEC-A

19.2

1.319261

17583394

WULIANGYE YIBIN

35.95

2.920126

22637961

CHINA CSSC HOL-A

20.45

1.589667

3269645

HUATAI SECURIT-A

9.34

1.301518

14087530

YANGQUAN COAL -A

15.59

2.836412

9878401

CHINA EAST AIR-A

4.04

-0.2469136

10619025

HUAXIA BANK CO

8.86

-0.1127396

17683919

YANTAI CHANGYU-A

60.01

-0.01666111

1707618

CHINA EVERBRIG-A

2.76

0

19668989

IND & COMM BK-A

3.79

0.2645503

16382239

YANTAI WANHUA-A

13.46

1.661631

4850254

18.79

0.6427424

9240640

INDUSTRIAL BAN-A

12.51

0.08

21868721

YANZHOU COAL-A

18.97

1.498127

3545468 2000447

CHINA LIFE INS-A

10

-0.0999001

25274255

INNER MONG BAO-A

37.91

3.18454

33893797

YUNNAN BAIYAO-A

61.83

1.227898

CHINA MERCHANT-A

10.65

1.428571

7656926

INNER MONG YIL-A

18.57

-0.96

16323592

ZHONGJIN GOLD

21.6

1.028999

4544836

CHINA MERCHANT-A

21.21

0.7122507

11046003

INNER MONGOLIA-A

5.21

2.156863

66836092

ZIJIN MINING-A

3.7

1.092896

22443861

CHINA MINSHENG-A

5.99

-0.4983389

41357627

JIANGSU HENGRU-A

29.34

0.7901065

2091036

ZOOMLION HEAVY-A

9.63

-2.332657

26640095

CHINA NATIONAL-A

6.12

0

20651683

JIANGSU YANGHE-A

141.1

1.583873

1245774

ZTE CORP-A

11.27

0.1777778

10217439

CHINA OILFIELD-A

16.71

3.78882

6061806

JIANGXI COPPER-A

20.45

1.741294

5066500

CHINA PACIFIC-A

21.51

-1.601098

11059735

JINDUICHENG -A

12.21

2.005013

3441807

6.08

2.184874

20432605

JIZHONG ENERGY-A

14.19

1.647564

8354264

CHINA MERCH BK-A

CHINA PETROLEU-A CHINA RAILWAY-A

4.73

0.2118644

14934200

KANGMEI PHARMA-A

15.84

0.3802281

8255341

CHINA RAILWAY-A

2.62

0

15470999

KWEICHOW MOUTA-A

246.96

1.982161

1647273

CHINA SHENHUA-A

22.45

1.814059

8978947

LUZHOU LAOJIAO-A

39.94

1.576806

5495574

METALLURGICAL-A

2.32

0.4329004

9893839

MOVERS

253

33

14 2370

INDEX 2353.737

CHINA SHIPBUIL-A

4.74

2.37581

17349903

CHINA SOUTHERN-A

4.13

0.486618

17228024

NINGBO PORT CO-A

2.5

0.4016064

7001401

CHINA STATE -A

3.09

1.311475

44059122

PANGANG GROUP -A

3.84

2.12766

41049887

HIGH

2365.55

CHINA UNITED-A

3.62

1.40056

34454811

PETROCHINA CO-A

9.02

1.234568

12010936

LOW

2327.77

CHINA VANKE CO-A

8.7

0

71748429

PING AN BANK-A

15.15

-0.06596306

9438713

CHINA YANGTZE-A

6.59

0

8430174

PING AN INSURA-A

44.05

-1.76182

22989002

CITIC SECURITI-A

12.01

0.4180602

32878272

POLY REAL ESTA-A

10.48

1.747573

58738732

CSR CORP LTD -A

4.35

1.162791

21342553

QINGDAO HAIER-A

11

-0.3623188

8049189

52W (H) 2932.14 (L) 2254.567

2320

1-Aug

3-Aug

FTSE TAIWAN 50 INDEX PRICE DAY %

Volume

-2.957486

24302784

FORMOSA PLASTIC

82.4 -0.7228916

6632805

ADVANCED SEMICON

23.4 -0.4255319

19475509

FOXCONN TECHNOLO

100

-6.976744

18419359

NAME ACER INC

PRICE DAY % 26.25

Volume

NAME

NAME

Volume

104.5

4.5

8184178

TPK HOLDING CO L

351.5

1.29683

5115647

79.8

-0.25

47301469

52

0.3861004

11151631

12.4

-1.195219

26427395

ASIA CEMENT CORP

38.3

0.7894737

6000186

FUBON FINANCIAL

31.25

-1.107595

10149695

TSMC

ASUSTEK COMPUTER

276

-2.473498

4765201

HON HAI PRECISIO

81.6

-3.773585

59067378

UNI-PRESIDENT

AU OPTRONICS COR

8.37

-6.896552

148158411

HOTAI MOTOR CO

203.5

-0.245098

404837

277.5

CATCHER TECH

PRICE DAY %

TAIWAN MOBILE CO

UNITED MICROELEC

137.5

1.851852

19430264

HTC CORP

-3.645833

12395460

31.2

-4.441041

18433129

CATHAY FINANCIAL

29.3

-1.180438

10953407

HUA NAN FINANCIA

16.8 -0.8849558

4696302

YUANTA FINANCIAL

13.75

-1.785714

9361264

CHANG HWA BANK

16.3

0

9065979

LARGAN PRECISION

620 -0.4815409

2260176

YULON MOTOR CO

54.5

0.3683241

9029680

CHENG SHIN RUBBE

73.5

4.55192

49975531

LITE-ON TECHNOLO

CHIMEI INNOLUX C

8.71

-6.745182

49835930

MEDIATEK INC

279

2.385321

23082316

CHINA DEVELOPMEN

6.99

-1.271186

32442191

MEGA FINANCIAL H

24

-1.030928

44977396

26.15

-1.134216

15346549

NAN YA PLASTICS

57

-1.213172

2633431

CHINATRUST FINAN

17.7 -0.8403361

23229345

PRESIDENT CHAIN

164

1.234568

3176136

CHUNGHWA TELECOM

14863921

CHINA STEEL CORP

37.85

-1.943005

4923113

89.5

0.6749156

5248168

QUANTA COMPUTER

71.1 -0.5594406

COMPAL ELECTRON

27

-2.877698

10646935

SILICONWARE PREC

32.5 -0.3067485

DELTA ELECT INC

99

-1

6223597

SINOPAC FINANCIA

12.5

-1.574803

18305306

FAR EASTERN NEW

34.1

0

8663926

SYNNEX TECH INTL

63.5

-4.223228

9558972

FAR EASTONE TELE

74.6

0.8108108

6030271

TAIWAN CEMENT

35.8

0.1398601

4694182

18.25 -0.5449591

10790082

FIRST FINANCIAL

WISTRON CORP

MOVERS

14

34

2 4990

INDEX 4933.98

8041218

TAIWAN COOPERATI

16.7

-1.474926

33759221

FORMOSA CHEM & F

79.9

-0.125

4445468

TAIWAN FERTILIZE

71.5

-1.106501

3040695

FORMOSA PETROCHE

87.4

0.6912442

2480732

TAIWAN GLASS IND

27.25

-3.368794

2118644

HIGH

4986.18

LOW

4879.88

52W (H) 5621.53 4870

(L) 4643.05 31-Jul

3-Aug

August 6, 2012 business daily | 13

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

MElco croWN ENtErtAINMENt

MGM cHINA HolDINGS 25.8

19.1

10.8

19.0

10.7 25.7

18.9

10.6

18.8

Max 19

Average 18.945

Min 18.7

18.7

last 19

Max 25.7

SANDS cHINA ltD

Average 25.7

Min 25.7

25.6

last 25.7

Max 10.76

SJM HolDINGS ltD

Average 10.639

Min 10.5

last 10.76

10.5

WyNN MAcAu ltD

23.6 23.4

14.1

16.9

14.0

16.8

13.9

16.7

23.2 22.3

Average 23.239

Max 23.6

Min 22.8

22.8

last 23.6

13.8 Max 14.02

Average 13.89

Min 13.82

Commodities PRICE

DAY %

YTD %

(H) 52W

(L) 52W

WTI CRUDE FUTURE Sep12

91.4

4.900723058

-7.555375746

110.8699951

77.69999695

BRENT CRUDE FUTR Sep12

108.94

2.870632672

3.83149066

124.1999969

88.90999603

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

293.1

2.139671034

10.3414524

320.4399824

237.3699903

922.75

1.680440771

2.670375522

1046.5

798.5

2.877

-1.47260274

-12.36673774

4.634000301

2.221999884

292.61

2.948316504

2.709817824

332.9600096

251.5599966

1603.55

0.063

2.4692

1921.18

1522.75

Silver Spot $/Oz

27.8

1.9435

-0.1257

44.2175

26.085

Platinum Spot $/Oz

1406

0.6169

0.8247

1915.75

1339.25

579.25

-0.6858

-11.3619

792.93

537.54

LME ALUMINUM 3MO ($)

1860

1.086956522

-7.920792079

2589

1832.25

LME COPPER 3MO ($)

7445

1.568894952

-2.039473684

9689.75

6635

LME ZINC

1840

1.545253863

-0.27100271

2447.25

1718.5

Gold Spot $/Oz

Palladium Spot $/Oz

3MO ($)

LME NICKEL 3MO ($)

15610

2.360655738

-16.56867985

24685

15236

15.975

0.62992126

6.28742515

18

13.95499992

807.5

1.476594408

37.73987207

820.5

499

WHEAT FUTURE(CBT) Dec12

903.75

2.757248437

25.52083333

953.25

629.5

SOYBEAN FUTURE Nov12

1628.75

0.757810084

35.2501557

1691.5

1115.75

173.8

1.252548791

-25.80576307

288.8500061

SUGAR #11 (WORLD) Oct12

22

-0.181488203

-3.635567236

COTTON NO.2 FUTR Dec12

73.94

4.184852755

-15.82422587

AGRICULTURE ROUGH RICE (CBOT) Sep12 CORN FUTURE

Dec12

COFFEE 'C' FUTURE Sep12

last 16.9

Min 16.66

MAJORS

ASIA PACIFIC

CROSSES

COUNTRY

PRICE

DAY %

YTD %

MACAU RELATED STOCKS (L) 52W

3.25

1.88

1980811

150.0999908

CROWN LTD

8.43

0.476758

4.202717

9.29

7.45

1392971

25.77999878

19.23999977

AMAX HOLDINGS LT

0.061

0

-29.88506

0.119

0.055

0

102.25

64.61000061

BOC HONG KONG HO

23.75

-0.8350731

29.07609

24.45

14.24

8025189

CENTURY LEGEND

0.234

0

1.739129

0.335

0.204

0

3.01

0.3333333

7.500002

3.62

2.3

21000 18065155

(H) 52W

(L) 52W

7.191373

13338.66016

10404.49

NASDAQ COMPOSITE INDEX

US

2967.9

1.997752

13.92434

3134.17

2298.89

FTSE 100 INDEX

GB

5787.28

2.20723

3.858385

5989.07

4791.01

DAX INDEX

GE

6865.66

3.929253

16.39967

7194.33

4965.8

NIKKEI 225

JN

8555.11

-1.133341

1.179854

10255.15

8135.79

CH

TAIWAN TAIEX INDEX

TA

KOSPI INDEX S&P/ASX 200 INDEX

0.9388 1.5235 0.7071 1.2043 75.35 7.9823 7.7526 6.2769 44.885 29.72 1.2001 28.792 41.57 8507 72.057 1.00749 0.77553 7.7018 9.6245 94.12 1.0288

(H) 52W

1.687181

CSI 300 INDEX

(L) 52W

1.0857 1.6618 0.9972 1.4549 84.18 8.0449 7.8113 6.4431 57.3275 32 1.3199 30.716 44.35 9662 88.637 1.24736 0.88861 9.2878 11.6793 112.71 1.0311

6.81818

13096.17

19666.18

(H) 52W

3.5263 0.6241 -3.2986 -4.4287 -1.988 0.1477 0.1638 -1.2162 -4.8247 0.2224 4.3961 1.0209 4.8052 -4.2951 -5.4056 1.2557 5.2433 4.5258 5.483 2.5414 0.0097

-0.8438819

US

HK

YTD %

0.5327 0.3079 0.9484 0.8057 -0.2294 0.0038 0.0103 -0.08 0.1435 0.0953 0.3543 -0.0334 -0.012 0 -0.8177 -0.0524 -0.3599 0.3084 -0.1131 -1.0186 0

2.35

DOW JONES INDUS. AVG

HANG SENG INDEX

DAY %

1.0569 1.564 0.9701 1.2387 78.47 7.9878 7.7547 6.3725 55.755 31.48 1.242 29.973 41.83 9476 82.914 1.2017 0.79187 7.782 9.8139 97.19 1.03

ARISTOCRAT LEISU

World Stock MarketS - Indices

JAKARTA COMPOSITE INDEX

Average 16.729

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

NAME

PRICE

CHEUK NANG HLDGS

NAME

Max 16.9

CURRENCY EXCHANGE RATES

NAME ENERGY

16.6

last 13.84

DAY % YTD %

VOLUME CRNCY

CHINA OVERSEAS

18

1.694915

38.67489

19.16

9.99

CHINESE ESTATES

9.06

0.8908686

-27.52

13.68

8.3

17500

CHOW TAI FOOK JE

8.89

-0.1123596

-36.13506

15.16

8.4

2480800

EMPEROR ENTERTAI

1.39

-0.7142857

25.22522

1.65

0.97

815000

FUTURE BRIGHT

1.03

0.9803922

145.2381

1.1

0.3

666000

19

0.1053741

33.42697

24.95

8.69

2895293

HANG SENG BK

108.4

-0.1841621

17.63429

118.9

84.4

737098

HOPEWELL HLDGS

22.65

-0.2202643

14.04833

24.658

18.56

844697

HSBC HLDGS PLC

65.6

-0.07616146

11.18644

73.3

56

7997070 2072004

GALAXY ENTERTAIN

3.7

0

23.74582

3.86

2.53

LUK FOOK HLDGS I

HUTCHISON TELE H

17.78

-1.331853

-34.39114

46.15

14.7

3521926

MELCO INTL DEVEL

5.6

0

-2.946274

9.94

4.3

1167873 1617599

-0.1219896

6.682017

21760.33984

16170.35

2353.737

0.8075355

0.3408353

2932.14

2254.567

MGM CHINA HOLDIN

10.76

1.701323

12.17502

15.276

7.6

7217.51

-0.6941425

2.056392

8170.72

6609.11

MIDLAND HOLDINGS

4.15

0.4842615

4.955759

5.217

2.887

2460002

SK

1848.68

-1.108377

1.25648

2057.28

1644.11

NEPTUNE GROUP

0.157

0

41.44144

0.205

0.08

29000000

AU

4221.481

-1.125602

4.065523

4448.5

3765.9

NEW WORLD DEV

10.08

-0.591716

61.02236

10.96

6.13

8368165

SANDS CHINA LTD

23.6

4.19426

7.517081

33.05

14.9

6666567

SHUN HO RESOURCE

1.13

0

13

1.28

0.82

0

SHUN TAK HOLDING

2.72

-1.090909

6.286192

4.183

2.241

8167755 2871727

ID

4099.813

0.1637141

7.269011

4234.734

3217.951

FTSE Bursa Malaysia KLCI

MA

1635.04

0.09733999

6.814399

1647.94

1310.53

NZX ALL INDEX

NZ

791.279

-0.3104279

8.424045

806.015

700.441

SJM HOLDINGS LTD

13.84

-1.28388

10.67099

18.798

10.079

PHILIPPINES ALL SHARE IX

PH

3506.01

0.04422935

15.13839

3527.48

2695.06

SMARTONE TELECOM

16.46

1.982652

22.47024

18.5

9.8

786853

HSBC Dragon 300 Index Singapor

SI

585.5

-0.93

17.97

na

na

16.9

-0.4711425

-13.33333

25.969

14.62

2899420

STOCK EXCH OF THAI INDEX

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1197.53

-0.2997178

16.79574

1247.72

843.69

ASIA ENTERTAINME

2.5

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9.45

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262217

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18.96174

492.44

332.28

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44.08

2.084298

11.42568

49.32

24.74

302163

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3.05

1.328904

27.23244

3.15

1.81

39070

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LO

1016.4

-0.8931706

13.00113

1061.86

876.33

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2.46

3.797468

31.5508

3.24

1.08

4745

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11.2

0.9009009

-34.88372

18.1701

11.01

3123205

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67.27

4.020411

9.810646

87.52

46.01

361080

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38.75

4.985099

-9.314298

62.09

34.72

12865430

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10.2

4.294479

6.029107

16.02

7.05

3715541

MGM CHINA HOLDIN

1.36

0

14.12333

1.9672

1.0025

13800

MGM RESORTS INTE

9.26

2.888889

-11.21764

14.9401

7.4

8816246 525901

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business daily August 6, 2012

Opinion To end inequality, attack poverty, not the 1 percent Stephen L. Carter

Professor of law at Yale University

I

n June, I wrote in praise of Luigi Zingales’s book, “A Capitalism for the People.” At that time, I examined his call for elevating pro-market values over pro- business values.

Now I would like to return to the book, to analyse his discussion of an issue very much at the heart of the current electoral season – economic inequality – and to explain why the way Americans talk about the problem leads us in the wrong direction.

As Zingales points out, income stratification isn’t driven by those at the far right end of the curve. If you plot the distribution of income and cut off the 1 percent with the highest incomes – if we assume that they don’t exist – the curve doesn’t really change.

The bunching is below the median. If income inequality is a problem, that is where the problem exists – not in the few that lie on the far right tail, but in the many who lie on the far left tail. Although the Gini index of income inequality has increased only slightly during the past decade, the rate of poverty has risen steadily, now standing at over 15 percent. In short, the moral dilemma of inequality arises not because some tiny number of people are too rich, but because some large number of people are too poor.

Poverty politics I was raised to the old-fashioned sort of liberalism that put the poor at the heart of politics. Nowadays, neither major political party talks much about poverty; it is difficult to find programmatic evidence that either party actually cares. As Peter Edelman puts it in his provocative new book “So Rich, So Poor,” “it is

also not clear whether the aims of ‘the 99 percent’ actually include the whole 99 percent.”

Republicans have rarely paid much attention to the issue, and Democratic Party consultants tutor their candidates not to discuss poverty because “programmes for the poor are poor programmes” – meaning the electoral market won’t pay for them with votes.

Money is relatively meaningless except in relation to what it can purchase. Thus, one way to understand poverty is that the poor can buy less than others. The Supplemental Nutritional Assistance Programme (formerly known as food stamps) tries to alleviate incomebased differences in what food can be purchased. Medicaid and, to some extent, the Affordable Care Act try to do the same with health care. (I have long believed that we should attempt to equalise buying power more directly by simply transferring cash to the poor, but such proposals tend to run afoul of worries about moral hazard, along with fears that the poor will misspend or that the bureaucratic bucket is too leaky.)

But such measures, Zingales writes, are Band-Aids. In order to repair the problem we have to know what causes it. Zingales reminds us that the principal driver of income inequality remains education. The more educated you are, the higher your earnings are likely to be.

Zingales is in many ways a fan of the American educational system.

He thinks it possesses virtues not captured in the comparative international testing that so enthrals the news media. For example, American students are more likely

than those elsewhere in the world to challenge their teachers, and to question authority generally – qualities that are useful not only for democratic governance but also for the spirit of entrepreneurship and innovation.

School choice Although there is much debate over the reasons, our educational system leaves plenty of children behind.

Here, as with other topics in the book, the principal solution for Zingales is competition, such as vouchers that would force public schools to persuade parents to send their children there and an easing of tenure for teachers, to simplify the dismissal of those who perform poorly.

Such sentiments are often dismissed on the left as demonising teachers.

This is unfortunate, and even silly – a bit like saying that if you think a smaller, nimbler military is better suited to the

The best argument for vouchers isn’t results but equality, that is, helping the poor to afford what the well-off can buy

demands of the new century you are demonising soldiers. One needn’t be a critic of public employees or their unions to recognise that they aren’t the reason government exists.

On the other hand, the claim that public education will be improved by competition is somewhat weakly anchored. Vouchers have long been understood to help the best students, but there remains considerable debate over their efficacy in helping the worst. One can admit all the troubles Zingales and others list and yet confess that we don’t really know for sure what will work to improve education for those who are suffering the most from the ravages of poverty.

Moreover, the teacher-tenure issue is more complex than reformers seem to assume. Yes, the usual three years is probably too short a period in which to earn what amounts to a lifetime of job security, and the use of tenure to protect wrongdoers can become frightening. On the other hand, there are historical reasons that tenure policies were adopted – in particular, a decided arbitrariness in the treatment of a (heavily female) workforce by (heavily male) supervisors and school boards.

Perhaps the world today is less arbitrary; perhaps the costs of tenure in its current form have become too high. But we shouldn’t pretend that tenure was invented as a nefarious plot to rip off taxpayers.

(Where tenure has been abolished or significantly limited, demand for public employment has fallen sharply.)

Undoing inequality This is not to say that school vouchers are a bad idea. There is a deep and indefensible hypocrisy in the Democratic Party’s stony opposition to programmes that would allow poor parents to make educational choices similar to those often exercised by the party’s leaders and contributors – especially given the party’s claims to believe in the importance of undoing inequality. Indeed, the best argument for vouchers isn’t results but equality, that is, helping the poor to afford what the well-off can buy. After all, parents of means are free to choose private schools that others would avoid.

The moral quandary posed by income stratification stems not from the buying power of the rich but from the buying power of the poor. Once we see that wealth inequality lies in what one is able to purchase, it follows readily that we cannot seriously promote equality as long as private elementary and secondary education remains the preserve of the rich. Among the poor, demand for private education is high: whenever voucher programmes are offered, low-income parents drown them in applications. Anyone who claims to speak for the 99 percent should take this demand seriously.

Bloomberg View

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Newsdesk Vitor Quintã (Chief Reporter) Tony Lai, Xi Chen Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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August 6, 2012 business daily | 15

OPINION Business

wires Leading reports from Asia’s best business newspapers

Love and marriage in North Korea

Katharine H S Moon

Professor of Political Science at Wellesley College, where she is Director of East Asian Studies

Jakarta Post between generals, bureaucrats, and family members. Among his older, experienced colleagues, he resembled a lost puppy, or a well-coached boy imitating a king, always in his predecessors’ shadow.

The government has issued permits to 55 mining companies to export mineral ore out of a total 78 registered export miners in accordance with a May regulation, which requires companies to obtain export permits for ore sales, a top official has said. Of the 55 companies who have obtained export permits, 32 are nickel miners, 10 are bauxite miners, six are iron ore miners, four are zircon miners, two are copper mining firms, and one mines marble.

Family power

Nikkei The number of daily purchases made through the Suica and Pasmo e-money cards, both issued by Tokyo railway operators, surpassed the 3 million mark for the first time on July 26. The number of transactions has grown to 78.77 million in July. More people are using the e-money at stores and vending machines inside train stations. About 40.2 million Suica cards had been issued as of the end of July, and 20.57 million Pasmo cards were in circulation at the end of June.

Philippine Star Low-cost carrier South East Asian Airlines Inc. (Seair) is seeking the go-signal from the Civil Aeronautics Board to reallocate additional seat entitlements to Hong Kong.

The budget airline is seeking 504 seat entitlements. Seair is the second-oldest airline in the Philippines with a firm foundation in leisure travel and has been flying passengers since 1995.

The airline has a fleet of five Airbus. It plans to expand its domestic operations to seven cities nationwide including Iloilo, Bacolod, Kalibo, Tacloban, Davao and Puerto Princesa.

Korea Herald McDonald’s Korea officially launched McCafe in the leading hamburger chain’s Cheongdam-dong store in southern Seoul last week.

As ten McCafes that testopened throughout the nation last year are running successfully, McDonald’s Korea decided to operate a full-fledged caf business.

First opened in Australia in 1993, McCafe is found in 34 countries including the U.S., New Zealand, Canada and France. In Australia, it takes up 30 percent of McDonald’s Australia’s sales.

I

magine North Korean leader Kim Jong-un in a tuxedo, waiting nervously at the altar (or shrine) of his grandfather, Kim Il-sung, and his father, Kim Jong-il. He beholds his future wife’s face, anticipating his chance to kiss the bride. Of course, such an event can only be imagined in today’s North Korea. In the photographs presented to the world of the newly public couple, they stand chastely, but contentedly, next to each other but at an appropriate distance, or she follows a few steps behind.

While observers of North Korean affairs seem both tickled and stumped by Kim Jong-un’s marriage, and the accompanying media snippets, this “new development” is not startling. It implies nothing about the young leader’s attitudes toward, say, political and economic reform; nor does it signify an effort to appeal to younger citizens for support. Instead, the true meaning of Kim’s marriage can be found in Korean tradition and dynastic practices.

For Koreans on both sides of the 38th parallel, marriage has long been a staple of social life. The Population Reference Bureau reports that in 2008, only 25 percent of North Korean women aged 25-29 – and a mere 4 percent

The true meaning of Kim’s marriage can be found in Korean tradition and dynastic practices

of women aged 30-34 – had never been married. Among the Pyongyang elite, marriage is de rigueur, with 80 percent of the city’s adult residents registered as married. Indeed, a Korean must be married with children to be considered a true adult – and that is no less true for North Korea’s First Couple.

According to the South Korean newspaper Hankyoreh Sinmun, the average North Korean man marries at age 29, and the average woman at 25.5. Thus, Kim Jongun, who is purportedly 28 years old, got to the altar right on time.

Furthermore, women are the majority in North Korea’s capital. According to one recent defector, who lived among the elite before escaping to South Korea, more than 60 percent of Pyongyang’s residents are female. A woman’s face – that of First Lady Ri Sol-ju – could therefore help to bolster support for the new regime.

Perhaps most important, marriage bestows on the young Kim social and, in turn, political legitimacy.

Before the “Great Successor” was married, he looked like a young boy, sandwiched

He was not Kim Jong-un, the new leader of North Korea, but a miniature version of “Great Leader” Kim Il-sung. And, since ascending to power after his father’s death last December, he has constantly been compared to the Kim dynasty’s progenitor. In fact, before he was “unveiled” to the North Korean public, Kim Jong-un is rumoured to have been forced to undergo plastic surgerysothathewouldresemble his grandfather more closely.

In many Western societies, marriage, sex, and children do not necessarily come in one package. But in Korean and dynastic cultures, they do – like puzzle pieces forming a perfect familial picture.

If North Korea’s First Couple already have a child, as South Korean intelligence experts believe, Kim Jong-un might be in better social and political shape than many predict. A child would prove his manhood and serve as his potential heir – raising Kim’s status from boy king and “Great Successor” to legitimate leader responsible for grooming the dynasty’s next generation. If he is not yet a father, he undoubtedly is working on it, as progeny would decrease the risk that his half-brothers or other relatives might challenge his position.

Now Kim must show that he is a real family man, like his father and grandfather, each of whom had multiple wives and children. First Lady Ri Sol-ju probably hopes to bear sons soon, to become “Supreme Wife and Mother” and to live a long and happy life – with or without Kim. If she is smart, she knows that North Korea’s future, and therefore hers, is a precarious one. Keeping the government in a family of her own will help to secure her position, as well as that of her husband. © Project Syndicate

16 |

business daily August 6, 2012

CLOSING 1,900 detained in fake drug sweep

Israel prevents FMs travel

Police in China detained more than 1,900 people in nationwide raids on suspicion of making or selling fake drugs. Fake drugs seized in the raids, which involved more than 18,000 police, were illegally advertised as treating illnesses including hypertension, diabetes, skin diseases and cancer, Xinhua said, citing an official statement. The medicines could cause heart attacks or lead to kidney and liver damage, it said. The drugs and related trademark logos, packaging and instruction manuals seized in the raids had an estimated value of 1.16 billion yuan (US$182 million).

Israel prevented the foreign ministers of Algeria, Cuba, Bangladesh, Malaysia and Indonesia from reaching the Palestinian city of Ramallah in the West Bank, leading to the cancellation of a diplomatic meeting, officials said.

The foreign ministers were planning to attend a meeting yesterday of a committee from the so-called NonAligned Movement dealing with the question of Palestinian independence.

Israel told Jordan it would not allow representatives from the five countries with which it has no diplomatic relations to cross the border. It allowed seven others to fly by helicopter from Amman to Ramallah.

New Greek reform pledges as August bond deadline approaches Risk of failed reforms, rising taxes, social unrest

G

reece’s latest fiscal and reform pledges may be enough to convince international lenders weary after years of broken promises to keep Athens hooked to a 130 billion euro (US$161 billion) lifeline, but the battle to implement it will be epic.

Few question the new coalition government’s resolve but many doubt whether the cantankerous public sector can or will implement the measures or the Greek public, reeling from years of austerity, can take much more without putting up a fight.

“The political will is strong, but so are the obstacles – red tape, a demoralized and increasingly underpaid public administration are principal among them,” said George Pagoulatos, professor of economics at Athens University.

Greek officials say 11.5 billion euros of fiscal measures roughly agreed this week – although more painful for the public – will be easier to implement than the structural changes.

Reforms such as liberalising professions and markets including lawyers and pharmacies, have stumbled on strong union protests.

Others, such as cutting red tape for setting up a business, have been stuck in a bloated and ineffective public administration incapable of change.

Since it was first bailed out two years

ago, Greece has repeatedly fallen behind on reform pledges to its partners, who have threatened to cut off funding at the risk of unravelling the euro.

Athens, which received a second bailout this year, blames a deeper than expected recession for its failures and wants to two more years to hit targets in its new bailout deal.

Lenders say slow reforms have not given the programme a chance to work and want to see action before considering any changes.

the small Democratic Left and the socialist PASOK parties, are expected to raise some objections and may even lose deputies during the debate but the cuts will ultimately be approved, analysts said.

The leader of the once powerful PASOK, Evangelos Venizelos, has resisted the most, convinced the programme won’t work unless its deadlines are extended, but gave his reluctant approval in the face of a

possible Greek bankruptcy.

The biggest obstacle may come from the streets, with the radical leftist Syriza opposition party fanning anger among the disaffected, who often stage heated protests.

“These measures lead to a dead end. People have no more tolerance and the economy can’t take this any more,” said Syriza spokesman Panos Skourletis. “We will take all initiatives in and out of parliament to stop them. Resistance and social clashes are inevitable.”

The risk of failure is mainly on the reform front. Greece has managed drastic budget cuts in two years but has had poor results in the fight against tax evasion, improving its business environment and privatisations.

Reuters

Needed reforms Prime Minister Antonis Samaras’s conservative-led government also announced the revival of a series of structural reforms to give the economy – stuck in its fifth year of recession – a much-needed boost if Greece is to ever escape a debt crisis shaking the single European currency.

Greece is scrambling to pay a 3.2 billion euro bond due in August and officials say the state will run out of cash within weeks – making the troika’s review crucial for its survival.

After finalising the proposed fiscal cuts with the troika inspectors, expected sometime this month, the government will take them through parliament in September or October.

The junior coalition partners,

As income drops, social tensions are likely to rise

Fourth rally in a month to protest over South China Sea claims Several demonstrators detained in Hanoi

Frictions keep growing among regional countries

V

ietnamese police detained at least 20 people yesterday, as they broke up a protest in Hanoi against Beijing’s territorial claims in the disputed South China Sea, witnesses said.

Demonstrators were forced into waiting buses and taken to a

rehabilitation centre usually used to detain sex workers and drug users, after attempting to gather in defiance of a heavy police presence, one detainee told AFP. “There are at least 25 people here and there are arrestees elsewhere,” the person – who requested

anonymity for security reasons – said by telephone from the Loc Ha detention centre.

Another eyewitness estimated that 20 people had been detained.

Before being forcibly dispersed, the activists shouted “Down with China’s aggression!” and waved Vietnamese flags and banners.

The protest is the fourth such rally in just over a month to be staged by activists in Hanoi. There were no arrests at the previous three.

Human Rights Watch said that at least four prominent bloggers and one elderly anti-corruption activist had been held for attending the latest rally, calling on the government to immediately release all those detained.

The arrests show Vietnam is “trampling on its commitments to respect civil and political rights guaranteed by international human rights treaties ratified by the government,” HRW’s Asia deputy director Phil Robertson said.

“Vietnam shows time and time again the yawning gap in international

human rights standards between what governments say they do and what they actually do on the ground,” he said.

The communist country “is rapidly racing to the bottom of the heap in Southeast Asia when it comes to violating human rights,” he added.

The demonstrations come at a time of rising regional tensions over the South China Sea, which is believed to contain vast oil and gas deposits.

Hanoi and Beijing have a longstanding territorial dispute over the Spratly and Paracel Islands, which both countries claim, and frequently trade diplomatic barbs over oil exploration and fishing rights.

Relations between the pair have soured recently, with Vietnam attracting China’s ire last month after it adopted a law that places the Spratlys under Hanoi’s sovereignty.

China’s state-backed China National Offshore Oil Corp. also said it was seeking bids for exploration of oil blocks in disputed waters – a move slammed by Vietnam.

AFP