Year I Number 222 MOP 6.00 Tuesday February 19, 2013 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã
www.macaubusinessdaily.com
Old neighbourhood law is history – for now A law allowing regeneration of old neighbourhoods faces the scrapheap. There isn’t time to approve it before the Legislative Assembly’s current term ends in August. Assembly president Lau Cheok Va told reporters yesterday legislators would “try” to complete discussions on strategic urban planning, before turning to proposals for the city’s oldest and often most run down areas.
Legislative Assembly leader to step down T
he Legislative Assembly president says he doesn’t want to run for re-election due to his age. He will retire at the end of the current assembly term in August. “In my personal view, I hope there will be somebody to take over my position, as [they did] for the National People’s Congress [seat],” Lau Cheok Va told reporters yesterday after a media luncheon. “I am not that young any more and it is time [for me] to resign,” said the legislator, who turned 68 earlier this month. Last year Mr Lau stepped down as one of the 12 Macau deputies to the NPC – mainland China’s top legislature. He was replaced by Ho Sut Heng, a fellow member of the Macau Federation of Trade Unions.
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Citic to refinance CTM loan with U.S. bonds ‘More time’ to assess casino smoking curbs
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More time is needed to evaluate the effectiveness of a partial smoking ban in casinos, says legislator Angela Leong On Kei. Ms Leong is also an executive director of casino investor SJM Holdings Ltd. Several groups representing gaming workers want an immediate total ban saying some venues lack equipment to improve the air quality in non-smoking areas.
itic Telecom International Holdings Ltd wants to issue U.S. dollar bonds to refinance part of a loan to buy Macau’s largest telecom operator Companhia de Telecomunicações de Macau SARL (CTM). Mainland-based Citic said so in a filing to the Hong Kong Stock Exchange yesterday. Citic stated last month it wanted 99 percent of CTM via the shares of Cable & Wireless Communications Plc and Portugal Telecom SGPS SA.
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HANG SENG INDEX 23480
23450
23420
23390
23360
23330
February 18
HSI - MOVERS
Legislators divided on tourism capacity limit One Oasis mulls early sale of unfinished flats
I SSN 2226-8294
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High-end housing project One Oasis on the Cotai-Coloane border might market before April the remaining 342 unbuilt and unsold flats in its latest phase, says an industry source. The developer would like to start sales ahead of new government rules to prevent builders from pre-selling homes before foundations are laid.
acau should admit to mainland authorities that the city is overloaded with tourists, legislator Ng Kuok Cheong suggests in a written inquiry to the government. The crowd trouble at Gongbei during the Lunar New Year shows the city is running out of capacity, he added. But fellow legislator businessman Ho Iat Seng said the city simply needed to redistribute tourists to more lightly frequented areas.
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Name
%Day
KUNLUN ENERGY
1.24
AIA GROUP LTD
1.13
HUTCHISON WHAMPO
1.11
SANDS CHINA LTD
1.07
BELLE INTERNATIO
1.01
CHINA RES ENTERP
-1.54
POWER ASSETS HOL
-1.54
ALUMINUM CORP-H
-1.69
CHINA SHENHUA-H
-1.79
CHINA COAL ENE-H
-1.96
Source: Bloomberg
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business daily February 19, 2013
macau
Mainland to take ‘greater role’ in casino oversight Major implications for day-to-day operations from 2013 on suggests Galaviz & Company report Michael Grimes
michael.grimes@macaubusinessdaily.com
Jonathan Galaviz of Galaviz & Company
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new report from Galaviz & Company LLC, a United States-based research house, expects more scrutiny of the Macau gaming industry from mainland China and from the U.S. authorities in 2013. “In our view, 2013 will be a year where the mainland government becomes serious about enhanced regulatory oversight over Macau,” says an abbreviated 12-page version of the report titled ‘Macau in 2013 – Casino Gaming Industry Forecast’. “This has tremendous
implications for what the future of Macau will be, from an operational perspective. In fact, a few of the large American casino gaming companies operating in Macau have announced new anti-money laundering measures recently and these announcements confirm our views (and confirm our concerns),” adds the report. Last month Las Vegas Sands Corp. said it had hired three former agents from the Federal Bureau of Investigation to strengthen the firm’s anti-money-laundering efforts and improve the background checks
Pataca starts year on a slight high T he pataca has appreciated slightly against the currencies of the city’s main trading partners last month, the Monetary Authority of Macau revealed on Friday. The pataca’s trade-weighted effective exchange rate index rose by 0.07 points from December to 96.92 points in December. Still, the index is down by 0.48 points year-on-year and far from the 105-point mark it reached in June 2010. Since then the pataca has depreciated by 7.3 percent against the currencies of our main trading partners, partially due to the U.S. Federal Reserve’s ultra-easy monetary policy. Since 2008 the Fed has printed billions of dollars, thus devaluing the currency. The pataca is loosely pegged to the US dollar through the Hong Kong dollar. In addition, the yuan has appreciated by 9.3 percent since
June 2010, data from the Monetary Authority show. Because mainland China is the city’s biggest trading partner, imports have become more expensive, fuelling high inflation. The yuan is also playing a larger role in our financial system as gamblers and other visitors brought the currency into the city. Yuan deposits in banks here have increased more than tenfold in the past two years. The pataca has also lost ground against the currencies of Macau’s other main trading partners, including the European Union. Macau’s foreign exchange reserves amounted to 137 billion patacas (US$17.1 billion) at the end of January. The reserves increased by 3.4 percent month-on-month. The territory’s foreign exchange reserves at end-January represented 18 times the currency in circulation. V.Q.
the company does on VIP gambling customers and junket operators. The former FBI agents are assigned to the company’s Las Vegas, Macau and Singapore properties. That news comes against the background of a change of leadership in China and a renewed emphasis on tackling corruption and possibly scrutinising more closely China’s infamous ‘underground banking system’. This essentially is an informal network of loan issuance and capital transfer that exists in parallel with the official banking system. Gaming industry and banking industry analysts have told Business Daily the underground system has grown up as a response to the failure of the formal, state-controlled banking system to cater fully for the financial needs of private business. Many wealthy Chinese also seek to place a portion of their assets offshore as a hedge against the risk of state confiscation or other adverse political developments. Given the currency exchange and cross-border capital
controls in China, the underground banking system that facilitates the movement of assets offshore is also utilised to move money to Macau for gambling according to those sources. Manuel Joaquim das Neves, head of Macau’s Gaming Inspection and Coordination Bureau, said last week his department is closely supervising casinos’ operations and planned to employ more on-site inspectors in addition to its current 350 inspectors. Mr Neves added however that foreign media did not have a clear grasp about what’s going on in the city. Some “selectively report negative news,” he stated. The Galaviz report suggests 2013 could be the year when the mainland starts to take a more active role in supporting Macau in its regulatory work.
Helping hand “Local authorities in Macau that oversee the casino gaming industry have so far handled the regulatory oversight of Macau exclusively. However, there are indications that various elements of the PRC want to have direct regulatory oversight of Macau’s casino industry, or at least greater visibility into it,” says the document. “We believe 2013 could be the year that [the] PRC’s central government asserts itself in Macau in a more aggressive manner than it has over the last ten years. While Macau is strategically important to the total equation of PRC, the [Macau] government will not risk its full standing in the mainland by overlooking gross violations of law and regulations that may be occurring consistently in Macau,” adds the report.
February 19, 2013 business daily | 3
MACAU
Ageing Lau Cheok Va intends to step down The Legislative Assembly president wishes to retire because of old age, but says the trade unions he represents have the final say Tony Lai
tony.lai@macaubusinessdaily.com
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he president of the Legislative Assembly, Lau Cheok Va, has said he does not wish to run for re-election to the assembly this year because of advancing age. “I am not that young anymore and it is time to resign,” Mr Lau told reporters yesterday. He turned 68 this month. “I hope there will be somebody to take over my position, as there was in the National People’s Congress,” he said. Last year Mr Lau stepped down as one of the 12 Macau deputies in the National People’s Congress. He was replaced by Ho Sut Heng, a fellow-member of the Macau Federation of Trade Unions. Mr Lau added: “The final decision on retirement lies with the Macau Federation of Trade Unions and its affiliates, because it has taken care of me and supported my work for many years.” He said the federation, the city’s largest group of unions, had yet to make up its mind about who would be its candidates in the indirect election to fill the labour constituency’s seats this summer. Mr Lau and Lam Heong San represent the labour constituency in the assembly. They hold two of the 10 indirectly elected seats. The number of indirectly elected seats will increase to 12 this year. Mr Lau has been a member of the assembly since 1984. He took over as assembly
Leong On Kei said she would run for re-election with “the same spirit” as in the last election. Ms Leong, the managing director of gaming company SJM Holdings Ltd, said her ticket aimed to win two seats, but declined to say who the second candidate on the ticket would be. In the elections in 2009, the second candidate on her ticket was Kent Wong Seng Hong, a senior adviser of SJM rival Melco Crown Entertainment Ltd. Assembly member Ng Kuok Cheong said yesterday that the New Macau Association, to which he belongs, was aiming for a fourth directly elected seat in this year’s elections. With about half a year left until the elections, the other members that have confirmed they will run for reelection are Ho Ion Sang, Kwan Tsui Hang and Melinda Chan Mei Yi.
Lau Cheok Va, right, became Legislative Assembly president in 2009, when Susana Chou Kei Jan retired
president in 2009 when Susana Chou Kei Jan stepped down after 10 years in the chair.
Unready but willing Should Mr Lau step down, Ho Iat Seng – an indirectly-elected representative of the business sector and the assembly’s vice-president –
will be a frontrunner to take over. Mr Ho declined yesterday to comment on his chances of becoming president of the assembly that will convene in October. He said only that he would run for re-election: “I am willing to continue to serve Macau but I have to acquire support from the business sector.” Directly elected member Angela
I am willing to continue to serve Macau but I have to acquire support from the business sector Ho Iat Seng, Legislative Assembly vice-president
Old neighbourhood law to be scrapped But top legislator is confident other bills will be approved before upcoming election Tony Lai
tony.lai@macaubusinessdaily.com
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The Iao Hon district regeneration will have to keep on waiting for a legal framework (Photo: Manuel Cardoso)
he long-awaited regeneration of the old neighbourhoods will take even more time, with the relevant bill unlikely to be approved before the Legislative Assembly’s current term ends in August. Assembly president Lau Cheok Va told reporters yesterday they would “try our best” to complete the discussions on all the pending laws, except the old neighbourhood regeneration proposal. “The problem of the old neighbourhood bill is that there will not be any guidance or standards unless the discussions over the urban planning law and the land law have been finished,” said Mr Lau. “We can only have a better evaluation of the old neighbourhood
law after we have passed those two bills,” he added. The city’s first-ever urban planning law and the Land Law revision are among the bills the assembly is rushing to finish before the election slated for late summer. Any pending draft bill will have to go back to start in the new assembly term starting in October. Mr Lau said they might draft a letter to the administration, asking it to withdraw the old neighbourhood law. The Land, Public Works and Transport Bureau said last August that the regeneration of the Iao Hon district could not begin without the support of a legal framework. But Mr Lau pledged “there is enough time” for the assembly to
complete the other seven pending bills as there was “a balanced work allocation” among the assembly’s three standing committees. “We can complete reviewing those bills if we focus our whole attention on them,” he said. However, the president did not rule out the possibility that the administration might still submit new bills. He also said they would keep a close eye on the quality of the bills. But an extension of the assembly’s working period is unlikely, as the election would be held shortly after the current term ends, said Mr Lau. Last year the legislators’ working period was extended for two additional weeks until August 31.
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business daily February 19, 2013
macau
Legislators divided on tourist number limits It was a challenge to squeeze in all the visitors over Lunar New Year, but the city has yet to reach its tourist capacity, some assembly members suggest Stephanie Lai
sw.lai@macaubusinessdaily.com
Macau had over 1.35 million visitors during the Lunar New Year holidays
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acau should admit to mainland China that the city is already overloaded with tourists, Legislative Assembly member Ng Kuok Cheong suggests in a written inquiry published yesterday. Mr Ng said the jostling crowds at the Gongbei border crossing at Lunar New Year showed the city was reaching its tourist capacity. Others dispute this. Macau Government Tourist Office director Maria Helena de Senna Fernandes told reporters on Thursday that the overcrowding during the holidays should not be regarded as a gauge of the city’s tourist capacity. Mr Ng, who belongs to the New
Macau Association, said: “The excessive number of tourists arriving in the city has already seriously affected the living environment of local residents.” He said Macau’s size made it wrong to ease restrictions on private vehicles crossing the border, or to allow multiple visits by mainland Chinese travelling on individual visas. According to the Macau Government Tourist Office, from February 5 to February 15 the city had over 1.35 million visitors, 13.5 percent more than in the Lunar New Year holidays last year. Legislative Assembly member Lee Chong Cheng, who belongs to the
Macau Federation of Trade Unions, said the volume of tourists was weighing down the transport system. “The road network is overloaded. Public transport can hardly cater to residents and tourists during holidays or peak hours,” said Mr Lee.
Open city In contrast, assembly members representing the business sector think Macau has yet to reach its tourist capacity. However, they believe the border should be kept open for more hours of the day and that tourists should be directed to less-visited older areas
of the city. One member, Ho Iat Seng, told reporters yesterday: “I will reflect to the National People’s Congress that we had better extend the border opening hours during the holiday season, including the hours that the new crossing to be built in Ilha Verde will be open.” Mr Ho is vice-president of the assembly and a member of the Standing Committee of National People’s Congress, which meets in March. “Extending the border opening hours during special seasons would not be a complicated administrative procedure, I think,” he said. Mr Ho echoed remarks by Ms Senna Fernandes, who said the individual travel scheme for mainlanders should not be “altered rashly”, even though the city was nearing its tourist capacity. Mr Ho commented: “Macau is an open city. I do not think it is proper to use any administrative means to pick a particular tourist source.” Another assembly member that represents the business sector, Kou Hoi In, also said the individual travel scheme should not be changed to curb the flow of tourists. The scheme allows some mainlanders visas to travel to Macau as individuals rather than as members of tour groups, which travel on collective visas. “Altering the scheme would disadvantage local businesses,” Mr Kou told reporters. “Actually, the city has yet to reach its tourist capacity, as long as we try our best to divert the tourists to the less-visited areas,” he said.
Package tour growth slower last year But still outpaced overall visitor arrivals, growing in importance for Macau’s tourism
Mainland Chinese visitors are still Macau’s biggest package tour market
Stephanie Lai
sw.lai@macaubusinessdaily.com
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ven amid a downturn in overall tourist arrivals, the number of visitors in tour groups has gone up by 21 percent to 9.1 million last year, data from the Statistics and Census Service show. The importance of package tours to the tourism industry has increased, as they accounted for almost one-third (32.5 percent) of all visitors last year. Package visitor arrivals in December grew by 8.8 percent yearon-year to about 887,300, far less impressive than the 52 percent rise achieved in the same month of 2011.
Mainland Chinese tourists still occupy the biggest portion of package tour visitors: almost 650,400 package tourists arrived to Macau in December, an annual increase of 10.6 percent. Taiwan package tours, whose size more than doubled in December 2011, saw a much more moderate 25.4 percent rise to less than 62,900 arrivals a year on. South Korean visitors travelling in package tours increased considerably by two-thirds to over 50,600 arrivals in December, making it the third biggest package tour market.
The Christmas season also witnessed a strong outbound package tour business fuelled by residents’ demand, official data indicate. In December, the number of residents joining package tours almost doubled to more than 48,200 departures. Mainland China, Taiwan and South Korea have been the three most popular destinations for residents in package tours.
Less occupancy But overnight visitors stayed less time in Macau in December, an average of 1.37 nights, down by 0.09 nights on a year-on-year basis. Still, this figure is an improvement
from the June-September period, during which the average length of stay lingered below 1.3 nights. And the pinch was felt at Macau’s 26,069 hotel and guesthouse rooms. The occupancy rate declined by 3.5 percentage points year-on-year to an average of 86.2 percent in December, with four-star hotels leading at 89.7 percent. Meanwhile, the room rates for four-star hotels went up by 9.6 percent to an average 868 patacas (US$109) in 2012, Macau Hotel Association statistics shows. The overall average for all of the city’s hotels rose by 5.9 percent last year. Three-star hotels had the sharpest rise, 12.7 percent, and charged an average of 1,016 patacas per night.
February 19, 2013 business daily | 5
MACAU
Citic to refinance CTM loan with U.S. bonds Telecom operator tries to reduce debt burden of proposed CTM acquisition Vítor Quintã
vitorquinta@macaubusinessdaily.com
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itic Telecom International Holdings Ltd is seeking to issue U.S. dollar bonds in order to refinance part of the loan it secured to fund the acquisition of Macau’s largest telecommunications operator. The company announced a “proposed issue of United States dollar-denominated guaranteed bonds” in a filing sent to the Hong Kong Stock Exchange yesterday. Deutsche Bank AG, Standard Chartered Bank Plc and UBS AG are joint bookrunners of the bond issue. Citic Telecom plans to meet bond investors in Singapore tomorrow, Hong Kong tomorrow and London on Thursday, according to a person familiar with the matter, who asked not to be identified because the details are private. Citic Telecom gave no figure for how much money it intends to raise but it did say the proceeds would be used as part of the acquisition of CTM, Companhia de Telecomunicações de Macau SARL. The firm announced last month a deal to buy up the shares of Cable & Wireless Communications Plc and Portugal Telecom SGPS SA, becoming the major shareholder of CTM with a 99 percent stake. The proceeds from the bond issue
would be used to refinance part of a syndicated loan secured for the CTM deal, a spokesperson for a public relations firm representing Citic Telecom told Business Daily yesterday. The US$1.16 billion (9.28 billion patacas) package includes a one-year US$200 million loan, while the rest were all five-year loans, with interest rates below five percent. The bond issue would be used to pay the one-year loan, the spokesperson added. Last month Citic Telecom chief financial officer David Chan Tin Wai admitted to Business Daily that the syndicated loan secured by eight banks might leave the company with too much debt. “A net gearing of over 200 percent is high. No one wants to get that much gearing,” he confirmed in a phone interview. “We will leave room to consider our refinancing later on,” Mr Chan said, while stressing that currently the interest rates for loans and bonds is “quite similar”. According to a report commissioned to Hong Kong accountancy firm KPMG LLP, the acquisition of CTM would allow Citic Telecom to more than double its turnover and increase its profit fourfold.
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CTM should have a new controlling shareholder by the second half of 2013 (Photo: Manuel Cardoso)
The transactions will only be completed once the Cable & Wireless and Citic Telecom’s shareholders approve them, as well the Macau and Beijing governments. Citic Telecom shareholders –
including Chinese state-owned conglomerate Citic Group, which has a 60 percent share – will vote on the deal “by end of March or early April,” Mr Chan said. With Bloomberg News
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business daily February 19, 2013
macau
More time needed to assess casino smoking rules: Leong SJM director says they will work with rival operators, government towards a full ban Tony Lai
tony.lai@macaubusinessdaily.com
A partial smoking ban has come into effect on casinos starting January 1
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t will take a few more months to fully evaluate how effective the partial smoking ban recently introduced for Macau’s casinos has been, says legislator Angela Leong On Kei amid criticism from workers’ groups. Ms Leong, also executive director of SJM Holdings Ltd, said
an assessment of whether the air quality in casinos’ non-smoking areas reached the government requirements had to rely on broader data. “We should not simply use the data during the Lunar New Year to evaluate [the tobacco ban] … as there are more people in this
period,” she told reporters after a media luncheon yesterday. “We can only evaluate the ban after gathering the air quality data in casinos for a few more months,” she said. Ms Leong added the Health Bureau has been in close contact with the casino operators to offer suggestions
One Oasis may sell over 340 unfinished flats
Cotai residential project One Oasis might comprise more than 12 blocks (Photo: Manuel Cardoso)
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igh-end housing project One Oasis might market before April the remaining 342 unbuilt and unsold flats in its latest
phase, says an industry source close to the developers. The developers would like to start sales ahead of new government rules
to prevent builders from pre-selling homes before foundations are laid. The source told Business Daily the management board of the development – on the border between Cotai and Coloane – was still discussing the issue and details of the pre-sales of flats remain confidential. “They do not know whether they can be that lucky” and clinch the deal before the Legislative Assembly approves the city’s first law on sales of unfinished homes, said the source. The One Oasis developer is a joint venture of several Hong Kong-listed companies: ITC Properties Group Ltd, Linkeast Investments Ltd, Nan Fung Group, ARCH Capital Management Co Ltd and Success Universe Group Ltd, the latter an investor in the Ponte 16 casino resort in downtown Macau. The source added the developer
Stanley Ho out of hospital Gaming tycoon Stanley Ho Hung Sun has already recovered from a cold, said Angela Leong On Kei yesterday. Mr Ho’s fourth wife said that he was released from a Hong Kong hospital on Saturday after being admitted at the start of Lunar New Year. The founder of Sociedade de Turismo e Diversões de Macau is “healthy now”, she stressed. Health issues have been plaguing the casino millionaire in recent years. He underwent brain surgery and remained in hospital for seven months in 2009 after falling at his home.
upon their smoking areas. Starting from January 1 this year, a partial smoking ban has taken effect on casinos, which can only have smoking areas covering up to 50 percent of their gaming floor. But legislator Kwan Tsui Hang, from the Macau Federation of Trade Unions, slammed the smoking areas in some casinos for lacking clear boundaries. Some casinos also lack equipment to improve the air quality in nonsmoking areas, she said in an inquiry sent to the government last month. Choi Kam Fu, deputy directorgeneral of Macau Gaming Enterprises Staff’s Association, urged the administration in a press conference yesterday to review the smoking ban immediately and enact a full ban in casinos. Ms Leong said she “fully supported a complete smoking ban in casinos right from the beginning”. “But how to enact it, this depends on the cooperation between the government and, we, the casinos,” she said.
would also “have to consider the market sentiment” before releasing the 342 flats. As Business Daily reported yesterday, the real estate industry expects three or four developers to put homes in their unfinished projects up for sale between March and April. Their expectations come from the possibility that the law on sales of unfinished homes might be approved in the first quarter. Real estate agents believe the developer of One Oasis and the developer of Pearl Horizon, another high-end project in Areia Preta, would possibly launch pre-sales before the second quarter. The source added the flats in the existing 11 blocks of One Oasis “have been almost sold out”. “The government has so far approved the construction permits for 12 buildings there but 12 blocks will not be the full story for One Oasis… as the land plot there is pretty large,” the source said. The developer of One Oasis and the developer of Pearl Horizon were unable to reply to Business Daily’s enquiries before press time. T.L.
February 19, 2013 business daily | 7
MACAU
Improved property EBITDA margin expected for MGM Macau
Corporate
Gala dinner relives Titanic legend
Progress despite likely five percent fall in VIP chip sales in fourth quarter Michael Grimes
House of Dancing Water reaches 1,000th show
michael.grimes@macaubusinessdaily.com
‘The House of Dancing Water’, the water-based performance at Melco Crown Entertainment Ltd’s City of Dreams, will celebrate its 1,000th show next week, on Thursday. The show created by former Cirque du Soleil creative director Franco Dragone first opened its doors to the public in September 2010. Melco Crown invested over HK$2 billion (US$258 million) in the production, according the company. As part of the 1,000th show celebrations, Hong Kong star Angelababy will join the audience. The company has launched a special promotion to celebrate the milestone, selling two B Reserve tickets for 1,000 patacas. The tickets are available for the performances until February 25. Melco Crown has repeatedly declined to say whether the show was turning a profit. But the operator is reportedly preparing to replicate the show at a 50 billion yuan (64 billion patacas) entertainment complex near Beijing’s 798 Art Zone district.
About 700 guests attended the Titanic II Gala Dinner organised by Blue Star Line chairman Clive Palmer in Macau on Saturday. Blue Star Line’s Asian Operations director Raymond Tam said Titanic II is scheduled to set sail on her maiden passenger voyage from Southampton to New York in 2016. “Design is well underway on the Titanic II, which will be every bit as luxurious as her namesake,” he said in a statement. Present on the gala dinner was Ge Biao, director of CSC Jinling Shipyard, who has been commissioned by Blue Star Line to build and coordinate the construction of Titanic II in China. The guest enjoyed the same menu as first-class Titanic passengers did on April 14, 1912, but also several musical performances, including by Australian rock singer Glenn Shorrock and South Korean guitarist and YouTube sensation Sungha Jung.
MGM Macau – performance building
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GM Macau is likely to show a further improvement in its adjusted property EBITDA margin (earnings before interest, taxation, depreciation and amortisation) in its fourth quarter 2012 results due Thursday morning Macau time, says Union Gaming Research. The Las Vegas-based research house expects a quarterly property EBITDA margin of 26 percent and for the full year 24.7 percent; compared to the 24.2 percent MGM Macau achieved in 2011. That’s despite an expected five percent fall in VIP chip sales turnover at MGM Macau – a standalone property – as market competition from multi-property rivals intensifies. Last month one rival, Sands China Ltd, announced it had been given an extra 200 gaming tables to coincide with the opening of a third hotel tower at Sands Cotai Central. Days later Francis Tam Pak Yuen, Secretary for Economy and Finance, said Galaxy Entertainment Group Ltd had also been awarded 50 more gaming tables for its Galaxy Macau resort on Cotai. “We are looking for MGM to generate US$175.8 million [1.40 billion patacas] in Macau EBITDA (MGM owns a 51 percent share),” says Union Gaming. “In Macau, fourth quarter 2012 GGR [gross gaming revenue] was up 10 percent. We think our estimate could be a little bit on the conservative side, though hold issues in Macau are always a wildcard,” the note adds.In
early January MGM Macau’s holding company, Hong Kong-listed MGM China Holdings Ltd, said the Macau government had formally gazetted its plans for a US$2.5 billion new casino resort on Cotai. MGM China hopes to open the resort by 2016 at the latest. It was reported last week that MGM Resorts International has formally petitioned New Jersey’s regulators to re-establish its casino licence in the U.S. state. MGM agreed to divest in March 2010 amid questions about its Macau business partner Pansy Ho Chiu King. That process is still pending and its 50 percent of The Borgata Hotel Casino & Spa in Atlantic City is currently held in trust. MGM Resorts has 51 percent of MGM Macau’s parent MGM China Holdings. Ms Ho’s stake is 27 percent, according to a filing on February 8. New Jersey’s Division of Gaming Enforcement had said Ms Ho was “unsuitable” as a business partner for MGM Resorts in New Jersey – despite her reportedly having no direct involvement in operations there. The division based its decision on her father’s alleged historical ties to organised crime. “MGM’s stake in Borgata should now be more lucrative with online gaming headed for passage in Atlantic City,” suggests Union Gaming. In November Atlantic City suffered its biggest monthly drop in gaming revenue in 34 years of legalised gambling following Hurricane Sandy that hit the casino destination on October 29.
Macau at your breakfast table. With Business Daily. Find us in the following newsstands Pacapio at San Ma Lo Opposite HKSB (Nam Van) Beside Luso Bank Building Wen Hang Bank at San Ma Lo In front of Portuguese Bookshop In front CTM at San Ma Lo In front Daiso shop at San Ma Lo Next to S. Lourenço Market Next to Human Resources Dpt Next BNU at Av. Sidonio Pais San Miu, Av. Horta e Costa Next to Metro Park Hotel
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business daily February 19, 2013
GREATER CHINA China to help build Iran rail project China’s State Council approved plans to take part in the building of a highspeed railway line in Iran, two people familiar with the matter said. The project will cost at least US$1 billion and the companies participating haven’t yet been set, said the two people. China and Iran have maintained “normal business cooperation,” Foreign Ministry spokesman Hong Lei told a briefing in Beijing yesterday.
Geely leading bids for car star
Carmaker has sent team to California to check out plug-in hybrid m Norihiko Shirouzu
SCMP in talks for media takeover SCMP Group Ltd, publisher of the South China Morning Post, said it was in talks to buy “a group of media companies” in Hong Kong after its shares surged the most in more than 15 years. The company so far has only entered a non-binding term sheet, it said in a statement yesterday. The Hong Kong-based publisher didn’t elaborate on the potential takeover target. The publisher was up 23 percent at HK$2.15 when it was suspended.
Alwaleed buys 360buy stake Saudi billionaire Prince Alwaleed bin Talal bought a stake in Chinese online retailer 360buy Jingdong Inc., joining a group of investors in tapping one of the world’s fastest growing e-commerce markets. 360buy raised about US$700 million from the Alwaleed-controlled Kingdom Holding Co., Canada’s Ontario Teachers Pension Plan and some existing major shareholders, the Beijing-based company said yesterday. Kingdom invested US$125 million in Beijing-based 360buy, the investment company said on February 16.
Vanke enters U.S. property market China Vanke Co., the biggest developer listed on Chinese exchanges, has entered a property venture in San Francisco, its first foray into the U.S. real estate market. The company signed the deal on February 12, chairman Wang Shi wrote on his microblog on Sina Corp.’s Twitter-like Weibo service. Vanke bought 70 percent of 201 Folsom Street, a mainly high-end residential project. The development will comprise of about 669 residential units, according to Credit Suisse.
C
hina’s Zhejiang Geely Holding Group Co. Ltd is favoured to secure a majority stake in troubled U.S. electric car maker Fisker Automotive Inc., according to two sources familiar with Fisker’s search for a strategic investor or partner. Fisker, the Anaheim-based plug-in hybrid maker, is currently weighing bids from two Chinese auto makers: Geely, the owner of Sweden’s Volvo, and state-owned Dongfeng Motor Group Co. The interest in Fisker reflects China’s strong push into alternative fuel cars as it seeks to foster the green technology sector and clear the increasingly polluted skies of its cities. The knowledgeable individuals said both offers, which Fisker received
in the last three weeks, were worth between US$200 million to US$300 million. A deal would give the suitors a majority stake in the southern Californian company, they said. The sources, who are close to Fisker, said Geely appeared to be the preferred suitor. Fisker’s corporate leaders and their advisers believe Geely is “more serious” and “passionate” about Fisker and its technology, one of the individuals said. The Hangzhou-based company also “can move fast” in making decisions – unlike Dongfeng, whose responsiveness could be hampered by its multi-layered decision-making structure typical in a Chinese stateowned enterprise, the source said.
Chinese shares close down Financials main drag as China reopens after long holiday
HK Disneyland reports first profit Hong Kong Disneyland reported its first profit seven years after the theme park opened, as visitors from mainland China spent more at the venture between Walt Disney Co. and the city’s government. The theme park, which opened in September 2005, made a profit of HK$109 million (US$14 million) in the 12 months ended October 1, compared with a loss of HK$237 million a year earlier, it said in a statement yesterday.
That quality is likely to work against Dongfeng, since Fisker is under a tight deadline to find a suitor, he added. “Most of all, with Geely we’re dealing with one decision maker,” the individual said, referring to its charismatic founder and chairman, Li Shufu. Geely’s Mr Li is also deemed a better suitor due to his experience in making cross-border acquisitions. In 2010, Geely acquired all of Volvo from its previous owner Ford Motor Co. “Overall, we think Geely is a better fit,” the knowledgeable individual said. The sources noted that Geely had already sent a team of engineers to Anaheim to evaluate Fisker and
Insurers were among the top drags on the benchmark
H
ong Kong shares fell yesterday, weighed down by Chinese insurers and banks and pressured by losses in
mainland China markets as they reopened after a long holiday break. The Hang Seng index ended down 0.3 percent at 23,381.94
points, while the China Enterprises Index of the top Chinese listings in Hong Kong shed 0.9 percent. On the mainland, where markets reopened after a one-week break for the Lunar New Year festival, the CSI300 of the top Shanghai and Shenzhen A-share listings ended down 1.2 percent at 2,737.47. The Shanghai Composite Index fell 0.5 percent to 2,421.56. Castor Pang, head of research at Core Pacific-Yamaichi International in Hong Kong, said there was no clear sign of market direction for investors in the Hang Seng Index, but said there were signs of a shift to Macau gambling stocks and shares in companies which were expected to profit from increased investment in urbanisation in mainland China. Shares in Macau gambling operator Sands China Ltd, which have climbed 73 percent since July
February 19, 2013 business daily | 9
GREATER CHINA
rtup Fisker Construction set to rebound: Komatsu CEO
maker
World’s top producer of diggers forecasts demand in China to grow up to 10 pct Masumi Suga and Yasumasa Song
its technology for battery-powered electric cars with a small gasoline engine used to extend the car’s driving range.
March deadline Victor Yang, a Geely spokesman in Hangzhou, said: “We are not in position to comment on this at the moment.” Dongfeng also declined to comment. “Dongfeng pays attention to all potential opportunities of international cooperation to cope with future market development both at home and abroad,” said spokesman Zhou Mi in an email yesterday. Fisker – the producer of the US$100,000-plus Karma which it began selling in late 2011 – fielded interest from several companies including from both South Korea and Europe. But it received only two firm bids, from Geely and Dongfeng, the sources said. Fisker is hoping to sew up a deal by mid-March, another person said. Any deal is likely to also involve another Chinese player, Wanxiang Group, an auto parts maker that has purchased bankrupt U.S. lithium-ion battery maker A123 Systems, Fisker’s primary battery supplier. A Wanxiang executive declined to comment. “The company has received detailed proposals from multiple parties in different continents which are now being evaluated by the company and its advisors,” Fisker spokesman Roger Ormisher said in an email over the weekend. He declined to comment further. A strategic pact would give Fisker the funds to start building its second and more affordable model, the Atlantic plug-in hybrid, which is expected to start at around US$55,000 and be Fisker’s high-volume vehicle. Reuters
2012, rose 1 percent. Jackson Wong, vice president for equity sales at Tanrich Securities in Hong Kong, said investors in the city had expected a stronger opening for mainland markets. “Prior to any major news before the power transition [in China] in March, we are going to be in the consolidation mode,” Mr Wong said. Chinese insurers and banks were among the top drags on the benchmark Hang Seng Index. Shares in China Life Insurance Co Ltd fell 1.2 percent, while Ping An Insurance Group Co of China Ltd dove 4.5 percent in Shanghai and 1.3 percent in Hong Kong. Energy shares were mostly down as China’s nascent economic recovery has so far failed to drive up coal prices. China Coal Energy, down 7 percent this month, dove 2 percent, while China Shenhua Energy Co Ltd fell 1.8 percent. Hong Kong tycoon Li Kashing’s property firm Cheung Kong Holdings Ltd fell 0.6 percent after the company said it had dropped a plan to list its hotel business and would instead sell part of the unit to generate cash. Reuters
The yen, which last week traded as low as 94.46 to the U.S. dollar, is about 7 percent weaker than the 88 yen the company has budgeted on for the current quarter. A drop in the currency’s value bolsters Japan’s exporters when overseas earnings are repatriated.
Unit sales
Komatsu – seeking earnings improvement
K
omatsu Ltd, the Japanese maker of construction equipment whose sales have fallen for seven consecutive quarters in China, expects demand in the mainland to recover this year, aided by stimulus spending. The world’s top producer of diggers and the second-biggest maker of bulldozers and dump trucks forecasts China demand to grow 5 percent to 10 percent in the year starting April 1, said president Kunio Noji. The yen’s slide to its lowest since May 2010 will also help boost competitiveness, he said. “Demand in China will definitely improve,” Mr Noji said in an interview at Komatsu’s Tokyo headquarters. “Our company will see an immediate earnings improvement once demand recovers because we don’t have any excess stockpiles and are able to speed production.” Total retail sales of construction equipment in China, the world’s
biggest market, slid about 19 percent in 2012 to US$32.3 billion, according to data compiled by Bloomberg. While construction may rebound after China’s Lunar New Year holidays, inventory levels may weigh on excavator production, said Karen Ubelhart, a Bloomberg Industries analyst in New York.
US$32.3 billion Total retail sales of construction equipment in China in 2012
Komatsu’s unit sales in China may match year-ago levels for the current quarter after a peak decline of 60 percent earlier in the fiscal year, Mr Noji said. China’s gross domestic product rose 7.9 percent in the final three months of 2012 from a year earlier, halting a seven-quarter deceleration. The World Bank forecasts economic growth in the Asian nation will accelerate to 8.4 percent this year, more than four times the pace of the U.S., and versus a 0.1 percent contraction in Europe. Komatsu rose 0.8 percent to 2,416 yen (US$25.7) at the close in Tokyo. The stock has climbed 11 percent this year, compared with a 6.7 percent increase for Caterpillar and a 16 percent gain for China’s Sany Heavy Industry Co. Komatsu forecasts that each one yen decline against the dollar will boost operating profit by 1.4 billion yen (US$15 million) for the current three months, while every 0.1 yen decline against the yuan will increase earnings by 100 million yen in the period. Komatsu’s exposure to China is set to decline to 8 percent of total sales of construction and mining equipment in the current fiscal year from 12 percent the previous year. Bloomberg News
Yuan ends lower after U.S. dollar rebound T
he yuan closed lower yesterday after the People’s Bank of China (PBOC) set a slightly weaker midpoint to reflect the dollar’s gains in global markets during a long Chinese holiday last week for the Lunar New Year, traders said. Spot yuan finished at 6.2427 per dollar, losing 0.16 percent from 6.2325 at the close on February 8, the last trading day before the holiday. Volume was average at US$13.72 billion yesterday, recovering from a pre-holiday thin US$6.31 billion on February 8. Before trading began, the PBOC set a weaker midpoint, down 0.04 percent from the previous trading day, reflecting but lagging behind a 0.45 percent rise in the dollar index during the Chinese holiday. At the weekend, a statement issued by G20 policymakers did not
single out Japan for its intervention to devalue the yen, although it said members should refrain from competitive devaluations and that monetary policy should be directed only at price stability and growth. “The G20’s decision not to single out Japan for adopting policies that weakened the yen may mean further softening in Asian currencies in the near term,” said a trader at a Chinese commercial bank in Shanghai. “If this is the case, the yuan may eventually succumb to pressure for depreciation from other Asian currencies.” For now, however, the yuan was supported by adequate dollar supply from China’s healthy trade in January, traders said. Right before the holiday, customs data showed China’s exports in January grew 25 percent from a year earlier, the strongest showing since
April 2011 and well ahead of market expectations for a 17 percent rise. That helped boost the country’s trade surplus to US$29.2 billion in January, compared with a forecast of US$22.0 billion and December’s US$31.6 billion. Reuters
10 |
business daily February 19, 2013
ASIA Singapore’s exports rise less than estimated Singapore’s exports rose less than estimated in January as manufacturers shipped fewer electronics and pharmaceutical goods. Non-oil domestic exports gained 0.5 percent from a year earlier, after a 16.3 percent drop in December, the trade promotion agency said in a statement yesterday. “It’s still looking a little bit subdued” outside of China, Euben Paracuelles, an economist at Nomura Holdings Inc. in Singapore, said before the report. Non-electronics shipments, which include petrochemicals and pharmaceuticals, climbed 3.8 percent last month from the previous year.
S&P leaves Japan rating unchanged Rating agency says it will take time to measure success of Abe’s policies Stanley White
R
atings agency Standard & Poor’s remained cautious about Japanese Prime Minister Shinzo Abe’s policies to stimulate growth and end deflation, and maintained its negative outlook on Japan’s debt. The ratings agency said in a statement yesterday that it will take time to determine whether Mr Abe’s policies will be effective. The measures could eventually lead to a reflation in Japan’s economy, but public finances are likely to remain weak even if the government goes ahead with its plan to raise the 5 percent sales tax, the ratings agency said. S&P reaffirmed its AA- on Japan, the fourth highest level rating, and maintained a negative outlook, meaning there is at least one-in-three chance of a downgrade in the coming fiscal year. “We believe the measures adopted by the new Abe administration at the beginning of its term will be critical if it is to arrest what we see as a prolonged decline in Japan’s sovereign credit standing,” the ratings agency said in a statement. “Even with full control of parliament, it will take time to see
PM Shinzo Abe’s task seen as critical
whether the Abe administration’s policies are effective.” Mr Abe led his Liberal Democratic Party (LDP) back to power in December with promises of aggressive monetary easing and fiscal stimulus to end nearly 20 years of deflation and stop-start growth. The ruling LDP lacks control on the upper house of parliament, which means opposition parties can still block some legislation. Since taking office in December, Abe has compiled a stimulus package
KEY POINTS S&P reaffirms Japan’s AA- rating with negative outlook PM Abe using fiscal and monetary stimulus to end deflation Worries linger that Japan debt burden to worsen further
Strong Thai GDP weakens govt case for rate cut Gross domestic product increased 18.9 pct y-on-y in the three months through December
T
hailand’s economy grew a much stronger-thanexpected 3.6 percent in the fourth quarter from the previous three months, a pace that undercuts government calls for interest rate cuts. Finance Minister Kittirat Na Ranong has put pressure on the central bank to cut rates both to help exporters and to discourage capital inflows that have pushed up the baht this year. Mr Kittirat said earlier this month that he had written to the Bank of Thailand, which last cut rates in October, to encourage another cut. Singapore-based Eugene Leow of DBS Bank said domestic demand in Thailand – which had 6.4 percent full-year growth in 2012 – was picking up and this would spill over into this year.
“The rate cut cycle is probably over despite pressure from the government. In fact, the focus will likely turn towards inflation, especially considering the robust growth number,” he said. Mr Kittirat, pressed by reporters after yesterday’s data on gross domestic product, declined to comment on his call for lower rates. The baht rose a shade after the news but then fell back to trade at 29.89 per dollar, up around 2.5 percent so far this year. On an annual basis, economic growth in the fourth quarter was a record 18.9 percent, compared with a forecast of 15.4 percent in the Reuters poll and revised growth of 3.1 percent in the third quarter. A high figure had been certain because of severe economic damage
from flooding in the final months of 2011 that slashed economic growth that year to just 0.1 percent. For 2013, the National Economic and Social Development Board (NESDB) maintained its forecast of economic growth of 4.5-5.5 percent. Economists polled by Reuters predicted 4.7 percent. After its surprise cut in October, the Bank of Thailand’s policy committee has left the benchmark rate unchanged at its last two meetings. Most economists expect it hold fire again tomorrow, despite the government pressure, because the domestic economy is strong and credit growth is becoming a concern. “Fourth-quarter GDP was not just the effect of the low base in 2011, but also government stimulus,
leading to double-digit growth in both consumption and investment,” said Kampon Adireksombat, an economist with Tisco Securities.
February 19, 2013 business daily | 11
ASIA LG unveils new full-HD smartphone LG Electronics Inc. unveiled yesterday the latest version of its flagship smartphone, boasting a higher resolution screen aimed at gaining a technical edge over bigger rivals. The Optimus G Pro – the Optimus G series and the first LG smartphone offering a full high-definition (HD) screen – will hit stores at home tomorrow, the South Korean firm said. The new handset is powered by Android software and measures 15.2 centimetres (5.98 inches) long and 7.6 centimetres wide. It goes on sale in Japan and North America in the second quarter.
that is the country’s biggest spending push since the global financial crisis in an effort to kick-start the economy. The Bank of Japan also agreed to adopt a 2 percent inflation target that Abe has been calling for and commit to “open-ended” easing from next year to help push up prices and stoke demand. Increased fiscal spending has raised concerns that Japan’s debt burden, which is already the worst among major economies at more than twice the size of its US$5 trillion economy, could deteriorate even further. Japan’s balance of payments position is still strong as it is the world’s largest net external creditor and its foreign exchange reserves are the second-largest in the world after China’s holdings, S&P said. However, Japan’s external position has weakened somewhat as it imports more energy to offset the closure of nuclear power plants, the ratings agency said. Japan’s fiscal budget deficit is likely to remain around 10 percent of gross domestic product for the fiscal year starting in April, showing that public finances will remain weak, S&P added. S&P could cut Japan’s rating if it determined that government policies to end deflation would not be effective or if the government’s real funding costs increased, the statement said. On the other hand, if Abe’s policies successfully fuel economic growth and an increase in tax revenue, Japan’s sovereign rating could stabilise this year, S&P said. Reuters
India cracks down on taxation of transfers
Muto seen as leading candidate for BOJ Former top financial bureaucrat Toshiro Muto is the leading candidate to become Japan’s next central bank governor with Prime Minister Shinzo Abe to pick a nominee as early as this week, sources close to the process told Reuters. The choice of Mr Muto, 69, would suggest the Bank of Japan will intensify stimulus efforts to reflate the economy, which has struggled with deflation for years, but refrain from the more radical measures advocated by other candidates. Some policymakers and government officials worry that radical measures could unsettle markets. “The choice of Muto appears to be gaining momentum,” said one of the sources familiar with the selection process. Still, Mr Muto’s selection is not a done deal given the political manoeuvring needed to ensure parliamentary approval. “Muto is considered as someone who would only follow the traditional approach such as expanding the BOJ’s asset buying programme. It would merely be an ‘enhanced’ version of the conventional approach,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “We cannot picture Muto going bold like buying foreign funds, a move that could accelerate yen declines.”
Govt targets multinationals for tax audits on transfer-pricing Sumeet Chatterjee
I
ndia is aggressively pursuing tax claims against multinational firms operating in the country as the government seeks to rein in its budget deficit, taking particular aim at IT and back-office functions, tax officials say. It has targeted several multinational companies in recent years for tax audits on transfer-pricing, but over the past 12 months has widened the scope of the investigations, tax officials said. Authorities are now checking deals involving more than three dozen companies, focusing on transactions worth at least 250 million rupees (US$4.7 million), officials said. Having just issued claims for the financial year to March 2009, it has shifted focus to 2009/2010. Transfer pricing is the value at which companies trade products, services or assets between units across borders, a regular part of doing business for a multinational. Revenue authorities in many countries including Britain, France, Germany and the United States are increasingly challenging efforts of companies to minimise tax liabilities by moving taxable income from higher-taxing jurisdictions to lowertax ones. In India’s case, critics worry overly aggressive tax authorities could undermine foreign investment although tax officials say they have been working overtime as Finance Minister P. Chidambaram seeks to make up a revenue shortfall and head off the threat of a credit rating downgrade. “On some days we had to work through the night to meet the deadline,” said one official. “There are so many cases that are coming to us but we don’t have an adequate number of people.”
870 million shares to parent Shell Gas BV at 10 rupees apiece in 2009 but that tax authorities valued them at 183 rupees each. Effectively, India is demanding the tax on the interest Shell would have earned on the US$2.8 billion, in the largest ever claim in an Indian transfer pricing case, tax officials said. South Korea’s LG Electronics Inc., Singapore property group Ascendas, French IT services firm Capgemini SA and chocolate maker Cadbury Ltd, are among numerous global companies involved in transfer pricing disputes in India, documents at the tax department’s appellate tribunal show. These companies have challenged the tax department’s orders. In information technology and business process outsourcing (BPO), the tax department believes many firms are taking advantage of low costs in India to develop high-end, patented services or products that are sent to overseas parent firms as low-value routine work, the tax officials said. These sectors are expected to account for more than half the total claims in transfer pricing deals in the fiscal year 2008/09, one of the officials said, up from about onethird earlier. Outsourcing makes up more than US$100 billion of India’s economy with companies such as Accenture, Bank of America Merrill Lynch, and Microsoft Corp employing thousands in functions such as customer service, risk and fraud management and finance and accounting. Reuters
Rising disputes
Minimum wage hikes supporting consumer demand
“It’s clear from the number that we have less downside risk on growth. We need to monitor price pressures because we’ve seen some cost-push
pressure from higher oil prices as well as more signs of demand-pull inflation,” Mr Kampon added. Reuters
At least 1,500 transfer pricing disputes were in litigation in India as of February 2011, compared with fewer than six in the United States and none in Taiwan or Singapore, an Ernst & Young survey showed in August 2012. One company in the cross hairs, Anglo-Dutch oil major Royal Dutch Shell Plc, said earlier this month it would challenge a claim its local unit underpriced shares transferred to the parent by US$2.8 billion. Shell said the claim is based on an “incorrect interpretation” of tax rules and “bad in law”. Shell said its India unit issued
Shell is to challenge the tax department’s claim
12 |
business daily February 19, 2013
MARKETS Hang SENG INDEX NAME
PRICE
DAY %
VOLUME
31.4
1.127214
20344144
3.5
-1.685393
8754411
BANK OF CHINA-H
3.81
-0.2617801
212440501
BANK OF COMMUN-H
6.22
-0.955414
19539478
AIA GROUP LTD ALUMINUM CORP-H
BANK EAST ASIA BELLE INTERNATIO BOC HONG KONG HO
31.6
0.3174603
617148
18.06
1.006711
16013154
NAME
PRICE
DAY %
Volume
CHINA UNICOM HON
11.54
0.1736111
24315815
CITIC PACIFIC
12.02
-0.9884679
CLP HLDGS LTD
12.86
0.1557632
10.22
0.9881423
TINGYI HLDG CO
CHEUNG KONG
123.4
-0.5640612
1520763
7.99
-1.96319
21955858
SWIRE PACIFIC-A
100.2
0.0999001
388820
TENCENT HOLDINGS
275
0.2186589
2412959
525727
HENDERSON LAND D
53.8
-0.4625347
2224724
HENGAN INTL
80.9
0.747198
1738200
HONG KG CHINA GS
21.55
-0.2314815
2592078
HONG KONG EXCHNG
147.2
-0.4732928
1644331
87.2
-0.3997716
5640443
160342886 23226863
CHINA MERCHANT
27.95
0.9025271
2391970
HSBC HLDGS PLC
CHINA MOBILE
HUTCHISON WHAMPO
CHINA RES ENTERP
3467897 6204861 5407196
-1.207243
103140444
2763641 1838354
0.9868421
-0.610687
0.4587156
0.5625879 -0.1619433
-0.4754358
6.51
8.76
14.3 123.3
30.7
24.55
86.45
1.111111
4810292
5.71
-0.6956522
118645700
LI & FUNG LTD
10.12
-0.7843137
21038937
MTR CORP
31.95
0
IND & COMM BK-H
Volume
SUN HUNG KAI PRO
125.6
CHINA LIFE INS-H
CHINA PETROLEU-H
SINO LAND CO
COSCO PAC LTD
HANG SENG BK
8427019
13591413
ESPRIT HLDGS HANG LUNG PROPER
17668961
1.066667
1871826
4358685
-1.089325
37.9
39050295
2345156
-0.1166181
SANDS CHINA LTD
0.2260739
-1.184211
22.7
2660737
5491717
-0.5012531
-0.5565863
85.65
-1.544944
66.5
26.8
CHINA OVERSEAS
DAY %
70.1
15.88
15.02
CHINA CONST BA-H
PRICE
POWER ASSETS HOL
CNOOC LTD
CATHAY PAC AIR CHINA COAL ENE-H
NAME
21.7
-0.2298851
2633800
WANT WANT CHINA
10.72
0.7518797
5706590
WHARF HLDG
67.45
-1.316752
3259364
MOVERS
20
23477.49
1900071
LOW
23315.41
52W (H) 23944.74
25.65
-1.535509
4190122
22.5
0.4464286
7911480
NEW WORLD DEV
13.88
-0.7153076
6220169
CHINA RES POWER
22.5
0.896861
3918023
PETROCHINA CO-H
10.52
-1.12782
61710767
CHINA SHENHUA-H
30.25
-1.785714
20487902
PING AN INSURA-H
67.15
-1.322557
10115797
1 23470
INDEX 23381.94 HIGH
CHINA RES LAND
29
(L) 18056.4
23310
15-February
18-February
Hang SENG CHINA ENTErPRISE INDEX NAME
PRICE
DAY %
Volume
CHINA PACIFIC-H
29.8
-1.160862
7961174
5817408
CHINA PETROLEU-H
8.76
0.4587156
103140444
PRICE
DAY %
VOLUME
AGRICULTURAL-H
4.19
-0.9456265
67445265
AIR CHINA LTD-H
6.84
0
ALUMINUM CORP-H
NAME
NAME YANZHOU COAL-H ZIJIN MINING-H
PRICE
DAY %
12.52
-2.643857
Volume 24447093
2.69
-3.928571
140648374
3.5
-1.685393
8754411
CHINA RAIL CN-H
8.27
-0.3614458
9397500
ZOOMLION HEAVY-H
10.46
-1.134216
12047240
ANHUI CONCH-H
30.65
-0.9693053
5175720
CHINA RAIL GR-H
4.3
-0.6928406
9871000
ZTE CORP-H
14.14
-0.1412429
2540342
BANK OF CHINA-H
3.81
-0.2617801
212440501
CHINA SHENHUA-H
30.25
-1.785714
20487902
CHINA TELECOM-H
6.22
-0.955414
19539478
4.08
0.990099
57371758
31.45
-2.024922
4295746
DONGFENG MOTOR-H
12.08
-2.423263
22193977
CHINA CITIC BK-H
5.12
-1.727447
22184140
GUANGZHOU AUTO-H
6.73
0
6850189
CHINA COAL ENE-H
7.99
-1.96319
21955858
HUANENG POWER-H
7.78
-0.1283697
12198791
CHINA COM CONS-H
7.56
-0.5263158
10218732
IND & COMM BK-H
5.71
-0.6956522
118645700
CHINA CONST BA-H
6.51
-0.610687
160342886
JIANGXI COPPER-H
19.7
-2.716049
10918579
BANK OF COMMUN-H BYD CO LTD-H
4.24
0
14633683
PETROCHINA CO-H
10.52
-1.12782
61710767
24.55
-1.207243
23226863
PICC PROPERTY &
11.42
-1.551724
13331420
CHINA LONGYUAN-H
7.1
-1.933702
7390183
PING AN INSURA-H
67.15
-1.322557
10115797
CHINA MERCH BK-H
18
-0.6622517
9465351
SHANDONG WEIG-H
7.17
-4.144385
13670665
CHINA COSCO HO-H CHINA LIFE INS-H
CHINA MINSHENG-H
10.96
-2.142857
27086515
SINOPHARM-H
23.3
-2.51046
2974593
CHINA NATL BDG-H
12.36
-0.8025682
11437478
TSINGTAO BREW-H
46.3
-0.9625668
2484028
CHINA OILFIELD-H
16.76
-1.988304
6054142
WEICHAI POWER-H
31.1
-2.047244
3508463
MOVERS
3
35
2 11860
INDEX 11735.22 HIGH
11857.44
LOW
11710.09
52W (H) 12354.22 (L) 8987.76
11710
15-February
18-February
Shanghai Shenzhen CSI 300 NAME
PRICE
DAY %
Volume
PRICE
DAY %
Volume
CHINA YANGTZE-A
7.63
-0.2614379
18008163
QINGDAO HAIER-A
13.94
-0.286123
9852756
23587051
CHONGQING CHAN-A
9.42
0.1062699
28205550
QINGHAI SALT-A
29.18
0.5513439
8582977
-0.9433962
20508894
CITIC SECURITI-A
14.98
-3.354839
109400408
SAIC MOTOR-A
18.7
1.300108
52087219
0.2819549
23589870
CSR CORP LTD -A
5.07
-0.1968504
35525614
SANY HEAVY INDUS
12.33
-1.752988
42122306
7.92
8.791209
170357181
SHANDONG DONG-A
49.4
0
3600041
-0.4640371
10386160
SHANDONG GOLD-MI
36.7
-4.427083
35936245
PRICE
DAY %
VOLUME
AGRICULTURAL-A
3.09
-0.3225806
253638924
AIR CHINA LTD-A
6.03
-0.4950495
ALUMINUM CORP-A
5.25 21.34
ANHUI CONCH-A
NAME
BANK OF BEIJIN-A
9.84
0.5107252
46470539
DAQIN RAILWAY -A
BANK OF CHINA-A
3.08
-0.3236246
52600713
DATANG INTL PO-A
4.29
NAME
5.28
0
98705629
EVERBRIG SEC -A
15.1
-5.506884
25839906
SHANG PHARM -A
12.99
2.768987
28023208
BANK OF NINGBO-A
11.79
0
22543875
GD POWER DEVEL-A
2.79
-0.3571429
46814371
SHANG PUDONG-A
11.26
-0.7054674
119051849
BAOSHAN IRON & S
5.13
-0.965251
26573648
GEMDALE CORP-A
7.52
-5.17024
99153308
SHANGHAI ELECT-A
4.25
0.2358491
8150214
16.1
-3.937947
57366348
SHANXI LU'AN -A
23.45
-2.656704
11755619 16803961
BANK OF COMMUN-A
8.73
-2.130045
23264223
GF SECURITIES-A
BYD CO LTD -A
27.17
6.842312
11000823
GREE ELECTRIC
29.26
-1.514642
11665667
SHANXI XISHAN-A
14.06
-1.264045
CHINA AVIC AVI-A
24.52
2.294535
6720916
GUANGHUI ENERG-A
17.46
-0.2285714
13747256
SHENZEN OVERSE-A
6.9
-1.849218
44015944
CHINA CITIC BK-A
4.88
-0.8130081
23522799
HAITONG SECURI-A
12.6
-5.048983
112754937
SUNING APPLIAN-A
7.04
-3.296703
114245436
CHINA CNR CORP-A
4.93
0
51530597
HANGZHOU HIKVI-A
31.73
1.960154
3227585
TSINGTAO BREW-A
35.19
0.5141388
3103947
CHINA COAL ENE-A
8.11
-1.45808
8788659
HENAN SHUAN-A
71.42
-1.217151
3258062
WEICHAI POWER-A
27.55
-2.512385
12123038
BBMG CORPORATI-A
CHINA CONST BA-A
4.88
-0.4081633
41367553
HONG YUAN SEC-A
20.55
-4.061625
17738290
WULIANGYE YIBIN
25.2
-2.740255
36030028
CHINA COSCO HO-A
4.31
-0.4618938
19620062
HUATAI SECURIT-A
11.37
-3.480475
45035310
YANGQUAN COAL -A
16.07
-1.832621
12825496
CHINA CSSC HOL-A
23.75
-0.2938707
11196876
HUAXIA BANK CO
11.49
-2.791878
45887539
YANTAI WANHUA-A
17.42
-1.969612
11810320
CHINA EAST AIR-A
3.65
-0.5449591
20510266
IND & COMM BK-A
4.31
-0.9195402
67637621
YANZHOU COAL-A
18.8
-2.942695
8451934
CHINA EVERBRIG-A
3.53
-1.396648
172166280
INDUSTRIAL BAN-A
19.7
0.5102041
81899621
YUNNAN BAIYAO-A
76.1
-1.920351
1594502
CHINA INTL MAR-A
14.25
-0.6276151
7901373
INNER MONG BAO-A
34.21
-0.05842828
20881933
ZHONGJIN GOLD
16.08
-3.942652
59252368
CHINA LIFE INS-A
19.84
-1.39165
20136493
INNER MONG YIL-A
28.05
-2.604167
14378160
ZIJIN MINING-A
3.81
-2.557545
131177514
86439411
INNER MONGOLIA-A
5.18
-0.7662835
40893666
ZOOMLION HEAVY-A
9.9
-2.173913
66965240
32.3
-1.464308
4123692
10.8
1.694915
24366485
CHINA MERCH BK-A
13.95
-0.6410256
CHINA MERCHANT-A
13.06
-3.970588
37053815
JIANGSU HENGRU-A
CHINA MERCHANT-A
26.87
-1.430668
19622370
JIANGSU YANGHE-A
79.07
-4.435581
5998270
CHINA MINSHENG-A
10.42
-0.9505703
351712969
JIANGXI COPPER-A
26.17
-3.751379
17935008
CHINA NATIONAL-A
8.41
-0.4733728
35300684
JINDUICHENG -A
12.79
-1.235521
11167350
17.29
-0.5178366
13045915 19200447
CHINA OILFIELD-A
17.74
2.306805
14372978
JIZHONG ENERGY-A
CHINA PACIFIC-A
21.2
-4.461469
36119647
KANGMEI PHARMA-A
17.14
0.8235294
CHINA PETROLEU-A
7.16
1.849218
82175128
KWEICHOW MOUTA-A
179.69
-4.348983
5656978
LUZHOU LAOJIAO-A
30.74
-3.242052
13839609 36772377
ZTE CORP-A
MOVERS
82
5.92
-2.14876
34742324
CHINA RAILWAY-A
3.24
-1.219512
43779581
METALLURGICAL-A
2.23
-0.4464286
2.64
-0.3773585
19794378
HIGH
2784.06
4.05
-1.937046
64043368
LOW
2737.47
CHINA SHENHUA-A
24.22
-2.495974
21102152
CHINA SHIPBUIL-A
5.39
1.890359
71916484
PANGANG GROUP -A
CHINA SOUTHERN-A
4.08
-1.449275
35019094
PETROCHINA CO-A
9.4
0.750268
45684344
CHINA STATE -A
4.14
1.970443
231990252
PING AN BANK-A
20.9
0.7228916
42181312
CHINA UNITED-A
3.69
-1.336898
98944759
PING AN INSURA-A
49.54
-4.528811
42748753
CHINA VANKE CO-A
11.7
-2.743142
78311007
POLY REAL ESTA-A
12.87
-1.227936
65912457
PRICE DAY %
Volume
PRICE DAY %
Volume
15 2790
INDEX 2737.471
CHINA RAILWAY-A
NINGBO PORT CO-A
203
52W (H) 2791.303 (L) 2102.135
2730
18-February
18-February
FTSE TAIWAN 50 INDEX NAME ACER INC
NAME
25.15
0.1992032
13616469
FORMOSA PLASTIC
ADVANCED SEMICON
23.6
-1.666667
23127496
FOXCONN TECHNOLO
ASIA CEMENT CORP
37.4
0.5376344
5947978
FUBON FINANCIAL
360
1.123596
4925898
12.05
6.637168
149029411
CATCHER TECH
134 -0.3717472
6337239
CATHAY FINANCIAL
37.1
5.09915
133103137
HUA NAN FINANCIA
CHANG HWA BANK
16.7
0.3003003
14825678
CHENG SHIN RUBBE
78.3
0.1278772
5590818
CHIMEI INNOLUX C
15.75
4.651163
114989036
8.94
1.706485
123815458
CHINA STEEL CORP
27.85
0.9057971
21702896
NAN YA PLASTICS
58
-1.360544
10089883
CHINATRUST FINAN
18.1
0.2770083
72676299
PRESIDENT CHAIN
164.5
1.230769
2042581
92.5
-1.490948
25271063
QUANTA COMPUTER
67.8 -0.2941176
13727379
20.25
-2.409639
18339078
SILICONWARE PREC
30.35
0.4966887
9641037
ASUSTEK COMPUTER AU OPTRONICS COR
CHINA DEVELOPMEN
CHUNGHWA TELECOM COMPAL ELECTRON DELTA ELECT INC
PRICE DAY %
-1.25
9852940
TAIWAN MOBILE CO
83.3
-1.420118
7345847
39.95
0.3768844
HON HAI PRECISIO
82.8 -0.9569378
HOTAI MOTOR CO
232
-2.315789
658406
HTC CORP
272
0.1841621
12705054
WISTRON CORP
17.35
0.5797101
12572815
YUANTA FINANCIAL
LARGAN PRECISION
804 -0.1242236
1356116
YULON MOTOR CO
LITE-ON TECHNOLO
42.5
0
6835293
MEDIATEK INC
325
0
5900721
MEGA FINANCIAL H
25.2 -0.7874016
30370194
Volume
104.5
0.4807692
TPK HOLDING CO L
541
4.844961
8327533
30896012
TSMC
107
1.904762
63828580
36743732
UNI-PRESIDENT
51.3 -0.3883495
10705032
110
1.851852
5629827
SINOPAC FINANCIA
13.65
0.3676471
38606154
FAR EASTERN NEW
34.15
-1.014493
6801742
SYNNEX TECH INTL
62.5
2.291326
8275705
FAR EASTONE TELE
69.9
-5.156038
28638971
TAIWAN CEMENT
38.95 -0.5108557
12911368
FIRST FINANCIAL
NAME
79
19
0.795756
27440790
TAIWAN COOPERATI
17.1
0.2932551
14004802
FORMOSA CHEM & F
77.2
-2.278481
10055059
TAIWAN FERTILIZE
73.1
0.4120879
3768380
FORMOSA PETROCHE
85.2
0.5903188
12186570
TAIWAN GLASS IND
29.4
1.37931
1445581
UNITED MICROELEC
MOVERS
28
20
9162260
11.15
-1.762115
81369644
34.4
2.84006
11629748
16
-1.234568
28112481
53.3
-0.929368
3301881
2 5600
INDEX 5569.84 HIGH
5598.1
LOW
5564.49
52W (H) 5625.53 5560
(L) 4719.96 18-February
18-February
February 19, 2013 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 35.2
57.0
35.0
56.0
34.8
55.0
17.8 17.7 17.6
Max 35.05
Average 34.829
Min 34.6
Last 34.85
17.5
34.6
Max 57
Average 54.964
Min 54.15
54.0
Last 54.9
Max 17.72
Average 17.554
Min 17.44
Last 17.66
20.8
38.2 38.1
21.0 20.9
20.6
38.0
20.8 20.4
37.9
Max 38.2
Average 37.902
Min 37.8
37.8
Last 37.9
Max 20.7
Average 20.416
Commodities PRICE
DAY %
YTD %
(H) 52W
(L) 52W
WTI CRUDE FUTURE Mar13
95.58
-0.292092635
3.587298147
108.9899979
80.48000336
BRENT CRUDE FUTR Apr13
117.82
0.135985042
8.032275811
118.2900009
91
GASOLINE RBOB FUT Mar13
314.78
0.424310097
13.90215661
316.3899899
222.4999905
GAS OIL FUT (ICE) Apr13
1004.5
0.802809834
9.184782609
1010.5
800.25
3.168
0.475737393
-5.854383358
4.049000263
3.052000046
NATURAL GAS FUTR Mar13 HEATING OIL FUTR Mar13 METALS
Gold Spot $/Oz Silver Spot $/Oz
321.18
0.043608273
6.46380529
331.3199997
254.9000025
1614.87
0.2931
-2.9793
1796.08
1527.21
30.08
0.9481
-0.0996
37.4775
26.1513
Platinum Spot $/Oz
1688.1
0.4224
11.2239
1742.8
1379.05
Palladium Spot $/Oz
752.95
-0.7317
7.6166
777.38
553.75
LME ALUMINUM 3MO ($)
2168
0.509967548
4.582730342
2361.5
1827.25
LME COPPER 3MO ($)
8206
-0.412621359
3.46740638
8702.75
7219.5
LME ZINC
2175
-0.639561444
4.567307692
2230
1745
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Mar13 CORN FUTURE
Min 20.3
18380
0.684743906
7.737397421
20519
15236
15.835
0.731552163
4.349258649
16.84000015
14.89999962
697
0.613496933
-0.464119957
838
520.25
May13
WHEAT FUTURE(CBT) May13
Max 21
Average 20.720
Min 20.6
Last 20.75
COUNTRY MAJOR
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
PRICE
DAY %
1.0299 1.546 0.9236 1.3337 94.05 7.9874 7.755 6.2425 54.2237 29.89 1.2396 29.666 40.64 9685 96.866 1.23186 0.86268 8.3231 10.6527 125.44 1.03
-0.0582 -0.3738 -0.1949 -0.1722 -0.5848 -0.005 -0.0064 -0.0849 0.0024 -0.0669 -0.2017 -0.3506 -0.0738 -0.1549 -0.5286 -0.0162 -0.2075 -0.0421 -0.062 -0.3827 0
YTD %
(H) 52W
-0.7612 -4.4263 -0.8878 1.1145 -8.453 -0.0526 -0.0567 -0.1906 1.4224 2.3085 -1.4682 -2.1338 0.8981 1.1151 -7.7829 -1.9791 -5.4783 -1.2688 -1.1481 -9.4627 -0.0097
1.0857 1.6381 0.9972 1.3711 94.46 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 97.439 1.25692 0.87169 8.4957 10.9254 127.71 1.0314
0.9582 1.5269 0.8931 1.2043 77.13 7.9824 7.7498 6.2105 48.8525 29.63 1.2152 28.913 40.54 8998 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029
MACAU RELATED STOCKS (H) 52W
(L) 52W
0.8130081
18.09523
3.89
2.29
1001863
CROWN LTD
11.94
1.44435
11.90253
12.04
8.06
1723783
17.67000008
AMAX HOLDINGS LT
0.079
1.282051
12.85714
0.108
0.055
2516000
68.18999481
BOC HONG KONG HO
26.8
-0.5565863
11.20332
27.1
20.8
4358685 17336401
1.114488349
-4.982545224
938
665
0.443734469
1.107736287
1639.5
1218.75
COFFEE 'C' FUTURE May13
140.2
-0.390763766
-4.430811179
219.1999969
139.6499939
SUGAR #11 (WORLD) May13
17.74
-0.16882386
-9.489795918
24.56999969
COTTON NO.2 FUTR May13
83.19
0.48313806
9.662536251
94.84999847
NAME ARISTOCRAT LEISU
CENTURY LEGEND
World Stock MarketS - Indices
PRICE
DAY % YTD %
VOLUME CRNCY
0.4
33.33333
50.9434
0.42
0.215
CHEUK NANG HLDGS
6.46
1.572327
7.846415
6.47
2.8
185472
CHINA OVERSEAS
22.7
-1.089325
-1.731603
25.6
14.124
17668961
CHINESE ESTATES
11.3
-1.73913
-6.838072
12.964
7.697
125280
CHOW TAI FOOK JE
11.84
-0.8375209
-4.823148
13.68
8.4
3194100
EMPEROR ENTERTAI
2.07
0
9.52381
2.15
1.1
460000
FUTURE BRIGHT
1.92
6.666667
57.37705
2.03
0.465
10000000 7973791
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
13981.76
0.05989957
6.697274
14038.97
12035.08984
GALAXY ENTERTAIN
34.85
0.2877698
14.82702
35.7
16.94
NASDAQ COMPOSITE INDEX
US
3192.03
-0.2072119
5.713382
3206.215
2726.68
HANG SENG BK
125.6
-0.4754358
5.812977
129
99.2
525727
FTSE 100 INDEX
GB
6313.32
-0.2360839
7.045154
6384.7
5229.76
HOPEWELL HLDGS
34.65
-0.8583691
4.210526
35.3
19.049
2392225
DAX INDEX
GE
7600.43
0.09113045
-0.1571118
7871.79
5914.43
HSBC HLDGS PLC
87.2
-0.3997716
7.257069
88.45
59.8
5640443
HUTCHISON TELE H
3.54
-0.8403361
-0.5617962
3.88
2.98
2434952
LUK FOOK HLDGS I
26
-1.515152
6.557379
30.05
14.7
1738000
MELCO INTL DEVEL
12.7
-1.702786
40.95449
13.96
5.12
6470500 2739300
NIKKEI 225
JN
11407.87
2.094537
9.741923
11498.42
8238.96
HANG SENG INDEX
HK
23381.94
-0.2670982
3.199992
23944.74
18056.4
CSI 300 INDEX
CH
2737.471
-1.235837
8.5027
2791.303
2102.135
MGM CHINA HOLDIN
17.66
0.4550626
25.96291
18.86
10.04
TAIWAN TAIEX INDEX
TA
7943.53
0.4664428
3.169424
8170.72
6857.35
MIDLAND HOLDINGS
3.72
0
0.5405392
5.217
3.249
4073000
NEPTUNE GROUP
0.172
-6.521739
13.1579
0.226
0.084
212430000
NEW WORLD DEV
13.88
-0.7153076
15.47421
15.12
7.95
6220169
SANDS CHINA LTD
37.9
1.066667
11.63475
39.95
20.65
13591413
SHUN HO RESOURCE
1.64
1.234568
17.14286
1.65
1.03
132000
SHUN TAK HOLDING
4.26
-0.4672897
1.670643
4.65
2.56
3455700
KOSPI INDEX
SK
1981.91
0.03684673
-0.7581189
2057.28
1758.99
S&P/ASX 200 INDEX
AU
5063.416
0.5859849
8.915256
5070.5
3985
ID
4610.674
0.01926337
6.810473
4630.401
3635.283
FTSE Bursa Malaysia KLCI
MA
1622.39
-0.3403095
-3.940906
1699.68
1526.6
JAKARTA COMPOSITE INDEX
20.6
(L) 52W
3.72
748.5 1414.75
SOYBEAN FUTURE May13
NAME
20.2
Last 20.4
20.7
CURRENCY EXCHANGE RATES
NAME ENERGY
17.4
NZX ALL INDEX
NZ
914.204
0.36382
3.645019
924.705
742.006
SJM HOLDINGS LTD
20.4
-1.449275
13.33333
22.15
12.34
8124550
PHILIPPINES ALL SHARE IX
PH
4119.95
0.4513049
11.38071
4130.02
3238.77
SMARTONE TELECOM
13.78
1.323529
-2.130681
17.5
13.16
2233014
HSBC Dragon 300 Index Singapor
SI
637.02
-0.42
2.56
NA
NA
WYNN MACAU LTD
20.75
-1.190476
-0.9546575
25.5
14.62
17389400
STOCK EXCH OF THAI INDEX
TH
1523.71
0.143935
9.467422
1528.56
1099.15
ASIA ENTERTAINME
3.9
0
27.45098
6.9799
2.4
210644
BALLY TECHNOLOGI
49.4
-0.2221773
10.48983
51.16
41.74
335261
HO CHI MINH STOCK INDEX
VN
493.95
-0.01619335
19.38946
497.87
372.39
BOC HONG KONG HO
3.43
-2
11.72639
3.55
2.68
21320
Laos Composite Index
LO
1433.43
0
18.00012
1455.82
889.39
GALAXY ENTERTAIN
4.54
0
14.35768
4.57
2.25
2200
INTL GAME TECH
16.27
-1.274272
14.82004
17.37
10.92
3215057
JONES LANG LASAL
98.44
-0.9159537
17.27424
100
61.39
225925
LAS VEGAS SANDS
52.9
-0.9363296
14.60139
58.3216
32.6127
6449562
MELCO CROWN-ADR
20.78
-0.6692161
23.39667
21.475
9.13
3856895
MGM CHINA HOLDIN
2.22
0
20
2.33
1.36
1450
MGM RESORTS INTE
12.88
-3.085026
10.65292
14.85
8.83
13288301
SHFL ENTERTAINME
16.08
-0.3717472
10.89655
18.77
11.75
260306
SJM HOLDINGS LTD
2.61
0
12.98702
2.85
1.65
19250
122.96
-0.1948052
9.307496
129.6589
84.4902
1088332
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
WYNN RESORTS LTD
AUD HKD
USD
14 |
business daily February 19, 2013
Opinion
Greece may get cruel reward for ending its deficit Megan Greene
Bloomberg View columnist and chief economist at Maverick Intelligence
G
reece reported recently that it has reached a primary budget surplus, the Holy Grail of austerity, meaning that once you exclude interest payments on the country’s massive debts, the country is finally taking in more revenue than it spends. This news should be worthy of a ticker-tape parade, after three years of Draconian retrenchment and a partial writedown of privately held Greek debt. Cruelly, however, the main beneficiary of a return to primary surplus may not be Prime Minister Antonis Samaras and his pro-bailout government, but the main opposition Syriza party, which is pushing for the country to refuse further austerity measures and declare a moratorium on its debt payments. In reality, the Finance Ministry was premature with its announcement. It said the government reached a nonconsolidated primary surplus in 2012 – but on a consolidated basis the country still ran a small deficit. Plus, the calculations exclude any IOUs the government has run up, of which there are many, particularly from the second half of last year when Greece waited for delayed bailout funding and had no other way to pay its bills.
gain from reaching a primary surplus will be unavailable, due to the nature of the debt relief that Greece has received to date. Running a primary surplus reduces the potential cost of default. A country that doesn’t pay back its debts can expect either to lose market access entirely, or to borrow at an unsustainably high cost. This is hugely problematic if the government is running a primary deficit, because it needs to borrow money to continue running the state. A government in primary surplus, by contrast, can get along without access to debt markets. Greece has very little short- or medium-term debt on which to default. A deal in March last year saw the vast majority of privately held Greek government debt swapped for bonds that start to come
due only in 2023, and official creditors agreed in December to extend maturities on the Greek debt they hold by 15 years. For a government in
If Greeks come to perceive that they are suffering purely for the benefit of creditors, they may refuse to play along any longer
power today, the possibility of default in 15 years’ time is essentially irrelevant. The only bondholders on whom Greece could default in the next decade are the European Central Bank and a small number of holdouts from the private-sector debt restructuring last March. A default on this small amount of debt isn’t in the interests of Greece or its international creditors because the risks would far outweigh any benefits. So they are unlikely to be the sticking point in any negotiation.
Syriza boon From the point of view of the current government, the net result is that a primary surplus may play into the hands of Syriza, which has long argued that Greece should declare a moratorium
True balance Still, the International Monetary Fund says Greece will probably reach a true primary balance this year, a genuine achievement made at enormous cost, if you recall that Greece started the crisis in 2009 with a primary budget deficit of 10.7 percent of gross domestic product. Bringing that figure down to zero is all the more impressive given the government’s slow progress in tackling tax evasion and that Greece is in an economic depression. As a result, the vast majority of the fiscal adjustment has had to be made through severe cuts in spending. Now Greece should be able to reap its reward. Yet one benefit that economies suffering a debt crisis normally
on its debt payments and stop implementing the austerity conditions attached to the bailout. So far, the government has been able to argue that austerity is necessary to keep the bailout loans coming, in order to fund crucial services such as health care and education. The alternative – refusing to retrench and being cut off from international loans – would involve Greece printing its own currency to afford these basic services, resulting in sovereign and bank defaults and a huge drop in living standards for Greeks. Samaras eventually won last year’s elections because playing along with the troika – the ECB, the IMF and the European Commission – and accepting further spending cuts seemed the better option. That argument becomes more difficult to make once Greece has a primary surplus and can fund itself (provided it doesn’t have to service debt). Syriza will be able to argue that the rationale for wage, pension and spending cuts would no longer be to guarantee the provision of basic services to the Greek population, but to pay bitterly resented international creditors. Of course, it is impossible to predict exactly how Greeks will respond to their success in eliminating the primary deficit. Samaras and his New Democracy party got a boost in opinion polls from their success in securing a partial debt-relief deal in November, and edged about a percentage point ahead of Syriza in two opinion polls late last month. But if Greeks come to perceive that they are suffering purely for the benefit of creditors, they may refuse to play along any longer. That would be a disastrous choice, because structural reform of the Greek economy is crucial not just to the country’s shortterm budgetary arithmetic but to its long-term growth prospects as well. And without public support, it will be impossible to implement such change, no matter what the intentions of the government and its international creditors may be. Bloomberg View
editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes Newsdesk Alex Lee, Luciana Leitão, Stephanie Lai, Tony Lai Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, José I. Duarte, 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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February 19, 2013 business daily | 15
OPINION Business
wires
Leading reports from Asia’s best business newspapers
Bangkok Post Retail investors should exercise caution when investing in newly listed stocks in Thailand, considering the last three listings on the market all saw heavy price movements due to speculative trade, the Association of Securities Companies (Asco) said. Pattera Dilokrungthirapop, Asco chairwoman,said therewas reason for concern when new stocks jump sharply on the first day of trade. “Investors have to consider the risks and whether the valuations are reasonable. If you see a stock rise sharply in price, with a price-to-earnings ratio of, say, 40 or 50 times, then you shouldn’t invest,” Mrs Pattera was quoted as saying.
Yomiuri Shimbun The Group of 20 economies wrapped up a two-day meeting Saturday with a statement strongly warning against currency wars, while giving “Abenomics” a virtual free pass. The joint statement, issued by finance ministers and central bank chiefs, cautioned G-20 members against monetary policies aimed at intervening in foreign exchange markets. It specifically called on the G-20 to avoid currency wars in which central banks effectively lower the value of their currencies to boost their countries’ competitiveness. If currency warsbecomeacommonpractice, they will cause turmoil in global markets and adversely impact the world economy, it said.
Business Inquirer Philippines’ leading food and plastic input manufacturer D&L Industries has teamed up with big Australian food ingredient companies Manildra Group and MSM Milling to introduce a new line of canola and wheat products. In a joint statement, the Australian firms announced the appointment of D&L’s wholly owned subsidiary Oleo-Fats, Inc. (OFI) as the exclusive agent for the canola derivatives and wheat products Manildra and MSM in the Philippines. The venture will have extensive applications in the snacks, dairy and food service industries.
Economic Times A deal between Abu Dhabi’s Etihad Airways and Naresh Goyal’s Jet Airways may take more time to be finalised as the Middle Eastern carrier is considering revising the deal on offer. A statement quoted Sheikh Hamed bin Zayed alNahayan, the chairman of Etihad Airways, as saying that the carrier needed to revise the deal to buy a stake in Jet Airways and that it was too soon to say when a final agreement will be signed. A source at Jet Airways said Etihad is yet to complete its due diligence of Jet. “Any offer to be put up before the board of Jet Airways will come only after Etihad completes the due diligence,” the Jet official said.
An economic agenda for Italy Paola Subacchi
Research Director of International Economics at Chatham House
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t the end of this month, Italian voters will choose their next government, from which they expect jobs and a more level economic playing field – and from which Italy’s European partners expect structural reforms and fiscal probity. What should the new government’s economic-policy agenda be? To reduce public debt, which stands above 120 percent of GDP, while minimising painful adjustments, Italy needs economic growth – something that has eluded policymakers in recent years. Indeed, Italy’s average annual GDP growth rate since joining Europe’s economic and monetary union in 1999 has been an anaemic 0.5 percent, well below the euro zone average of nearly 1.5 percent. In the four years since the global financial crisis struck, the growth rate fell to -1.2 percent, compared to the euro zone average of -0.2 percent, and it is expected to remain negative this year. The new government’s biggest challenge will be to implement reforms that enable Italy’s economic performance to catch up to that of its neighbours after years of bad policies and neglect. This requires increased investment in innovation and human capital. From 1992 to 2011, labour productivity grew at an average annual rate of 0.9 percent, the lowest in the OECD. Since 2001, unit labour costs have been growing faster than real GDP and employment, undermining the economy’s competitiveness vis-à-vis developing countries. In the last decade, Italy’s share of global exports dropped from 3.9 percent to 2.9 percent. Persistently weak labourproductivity growth has created a situation in which unit labour costs do not fall, even if real wages remain stagnant or decline. Indeed, despite a 1.3 percent drop in real wages in 2011, unit labour costs remained unchanged.
Supporting progress Italy’s new leaders must address this situation by decoupling labour’s contribution to productivity growth from that of capital and total factor productivity.
According to the OECD, lower regulatory costs and more efficient public administration (building upon measures introduced by the previous government, led by Mario Monti) could add 0.3-0.4 percent to average annual GDP growth by 2020. Likewise, labour-market reform, improved education, and enhanced human capital could contribute an additional 4 percent to GDP growth in the next decade. Moreover, Italian policymakers should strive to boost the female labour-force participation rate, which, at 49 percent, is one of the lowest in the OECD. Doing so would raise per capita income by 1 percent annually through 2030. At the same time, fiscal adjustment remains essential to Italy’s short- and long-term stability. According to the International Monetary Fund, the budget deficit is declining, and the primary surplus (net revenues minus interest payments) is growing. Italy’s new leadership must sustain this progress. Despite positive developments, the road ahead is bumpy. Navigating it will require Italy to retain its credibility with other European Union member states and international investors. The new prime minister will need to persuade Germany, financial markets, and the European Council that Italy is a reliable partner. The ability to refinance government debt and keep costs down is essential to strengthening public finances and boosting GDP growth. Furthermore, attracting more
[Italy’s] economic renewal depends on the next government’s willingness and ability to address the institutional weaknesses that have made concerted action increasingly urgent
direct investment is crucial, given that capital inflows, while recovering, remain 30 percent below their pre-crisis level; with outflows exceeding inflows, Italy has become a net capital exporter. “Selling” Italy in Europe should entail more than photo opportunities with other leaders in Brussels and the occasional road show to financial institutions in London. Italy’s leaders should engage actively in commercial diplomacy, using the country’s embassies and trade agencies to promote Italy globally, while working to build strong bilateral relations with other EU members, particularly southern countries like Spain. At the same time, the new leaders need to “sell” Europe in Italy, where Euro-scepticism is rampant. According to the Pew Research Global Attitudes Project, only 30 percent of Italians view the euro positively. In the country’s wealthier north, where average per capita income, at 30,000 euros (US$40,500), approaches that of Germany, people are questioning the rationale of EU membership. The costs are evident, they argue, but what are the benefits? Meanwhile, fears of structural decline pervade the country. The crisis has lasted for a long time, and people are tired. Unemployment has risen
to a record 11.2 percent, with 35 percent of young people jobless. And the tax burden, which has exceeded 40 percent of GDP since 1990, now stands at almost 43 percent of GDP. A Scandinavian level of taxes would be bearable if public services did not remain inferior to those offered in Scandinavia. For example, per capita health-care spending in Sweden, Denmark, and Finland exceeds US$3,000, compared to only US$2,300 in Italy, where households must contribute roughly 20 percent of total health-care spending. Moreover, Italy spends around 4.5 percent of GDP on education, while the Scandinavian countries spend more than 6 percent of GDP. As a result, Italian students’ scores in the Programme for International Student Assessment are significantly lower than those of their counterparts in many other OECD countries. Italy’s new government will have to display leadership and vision to guide the economy toward stable growth, avert a race to the bottom, and stem growing social tension. Most important, economic renewal depends on the next government’s willingness and ability to address the institutional weaknesses that have made concerted action increasingly urgent. © Project Syndicate
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business daily February 19, 2013
CLOSING Sands China reports CNY visitor record
Iberia workers begin five-day strike
Sands China Ltd says its four Macau casino resorts welcomed a record number of Chinese New Year customers. It reports 1.7 million individual visits from patrons between February 10 and 16 inclusive. Macau as a whole recorded 991,113 arrivals during that same period, according to Macau Government Tourism Office. “Sands China’s over 9,000 hotel rooms were at or near full capacity almost the entire week,” said Gunther Hatt, executive vice president of Operations, Venetian Macau Ltd. The Venetian Macao reported an all-time attendance record on the fourth day of the Lunar New Year, with almost 140,000 visits.
Workers at the Spanish airline Iberia have begun a five-day strike in protest at planned cuts to jobs and salaries. Iberia has cancelled more than 400 flights out of 1,000 scheduled for this week, with cabin crew and baggage handlers staging the walk-out. A lack of services at Spanish airports are expected to affect more than 1,000 flights from various airlines. Iberia has announced plans to cut 3,807 jobs after it reported mounting losses last year. In the first nine months of 2012 it lost 262 million euros (US$349m). Unions are planning three separate five-day strikes in February and March.
Cameron in India partnership pledge
Germany to return to growth: Bundesbank
U.K. PM leads biggest British business delegation to Asian country Gonzalo Vina
Central bank says economy will escape recession
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ermany, Europe’s biggest economy, will avoid the recession that has engulfed many of its partners in the region and return to growth in the first quarter of 2013, the Deutsche Bundesbank said yesterday “As it currently looks, a plus in economic output can be expected in the first quarter of this year,” the German central bank said in its February monthly report. German gross domestic product (GDP) shrank by 0.6 percent in the last quarter of 2012, as weak demand in other euro zone countries hurt exports. Were its economy to decline again in the current quarter, Germany would technically be in recession, defined as two quarters running of economic contraction. But the Bundesbank joins other economic experts and observers who believe last year’s dip in growth will prove short-lived. “For the rest of this year, the economy is expected to pick up gradually, even if the external economic environment will provide no trigger for a sharp surge in demand,” it wrote. Although Germany has fared much better than its euro zone partners in the long-running debt crisis, it has not been able to escape completely unscathed and growth slowed throughout 2012. German GDP grew by 0.5 percent in the first quarter of 2012 and then by 0.3 percent in the second quarter and 0.2 percent in the third quarter. With the contraction of 0.6 percent in the fourth quarter, the economy expanded by just 0.7 percent across the whole of 2012, compared with 3.0 percent in 2011, according to the latest data compiled by federal statistics office Destatis. At the same time, the 17-nation euro zone slid deeper into recession in the fourth quarter of 2012, when the region’s economy shrank by 0.6 percent after already contracting by 0.1 percent in the preceding quarter. AFP
David Cameron was speaking at the start of a three day visit to India
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.K. Prime Minister David Cameron is leading the biggest ever business delegation to India for three days of talks aimed at increasing trade. Mr Cameron arrived in Mumbai today with representatives from more than 100 U.K. companies, in a visit heralding the creation of a network of government-sponsored trade offices throughout the South Asian country by 2017. As an opening salvo, Mr Cameron said the U.K. will relax visa rules for business people, cutting the time it takes to clear the paperwork to one day from about three days currently. “Britain wants to be your partner of choice,” the prime minister said at Hindustan Unilever Ltd.’s Mumbai headquarters. “We have only just started on the partnership we can build. The sky is the limit.” Mr Cameron spoke of his desire to see a “special relationship” with India, a term usually reserved to describe ties with the U.S. “I think the basis for that special relationship and partnership is absolutely there,” he said in broadcast interviews in Mumbai. “This is going to be the third-largest
economy in the world by 2030 and I want to make sure it is British firms that are helping to build those hospitals, construct those roads, provide those universities, and we want a real exchange between our countries.”
Greater access Mr Cameron is seeking to revive Indian interest in the Eurofighter Typhoon, the next generation of jet fighters made in part by BAE Systems Plc, as authorities in New Delhi continue talks to buy 126 Dassault Aviation SA Rafale planes from France. A Rafale contract wasn’t signed during French President Francois Hollande’s Feb. 14-15 visit to India. “Typhoon is a superior aircraft,” Mr Cameron told reporters, saying that some planes could be built “within months”. The premier added that “we also have very interesting offers in terms of industrial participation, technology transfer and the company has said they can look again at price.” Intercontinental Hotels Group Plc, Brit Health Care, Ashok Leyland
Ltd and Hinduja Global Solution Ltd are among companies that will announce deals during the trip. The British government has identified eight areas where companies can make commercial inroads, including infrastructure, finance, health care, education and defence. Mr Cameron is joined by four government representatives including Universities Minister David Willetts and Trade Minister Stephen Green as well as nine lawmakers from both chambers of Parliament. With economies in Europe struggling, Mr Cameron said Britain needs to boost exports to developing nations such as India. “I am a great believer that you have got to fill up aeroplanes with business people, get out to these fast-growing countries and sell your country as hard as you can,” he said. Mr Cameron travels to New Delhi today to meet Prime Minister Manmohan Singh and President Pranab Mukherjee. He will push for greater access to the Indian market, particularly in the insurance industry and will seek to help move forward an EU-India free-trade agreement. Bloomberg News