Macau Business Daily, February 28, 2013 by Business Daily

Year I Number 229 MOP 6.00 Thursday February 28, 2013 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã www.macaubusinessdaily.com

Ferry operators cash in on lack of competition

Ferry operators TurboJet and Cotai Water Jet applied for a hike in their ticket fares last year, just months after the demise of ferry operator Hong Kong North West Express Ltd eliminated their competition, the government revealed yesterday. The rivals are seeking an average increase of 13 percent on routes to Hong Kong and Shenzhen, claiming their costs are rising thanks to an increase in fuel prices and Hong Kong’s minimum wage. The Maritime Administration did not say when it might reply to the requests. But the regulator pledged to consider the residents’ purchasing power, inflation and the ferry sector’s “actual business situation” before making a decision. More on page 5

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HANG SENG INDEX

Sieve-like border MGM Cotai to hurting sales: bring 5,000-plus tobacco industry new jobs

igarette imports plunged by half in the first 11 months of last year, after the government more than doubled the tobacco levy. The slump has hit tobacco wholesalers and retailers hard, with some claiming they lost 70 percent of their business. The industry blames lax checks at the border terminals for allowing residents to bring cheaper cigarette packs from neighbouring Zhuhai. But the customs say the focus is on those trying to smuggle cigarettes for sale in Macau.

GM Cotai is likely to create at least 5,000 postconstruction jobs said Pansy Ho Chiu King, chairperson of MGM China Holdings Ltd, at a ground breaking ceremony for the scheme yesterday. She promised new entertainment elements at the US$2.6 billion casino resort as part of the firm’s effort to diversify the local tourist economy. Ms Ho also said in her “personal opinion” it would be helpful to have a 24-hour border crossing between the mainland and Macau. In January Beijing officials appeared non-committal on the idea.

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Macao Water steaming over govt silence

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Govt ready to print money for booming economy Page 4

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SJM ups year dividends after 27 pct profit hike Page 16

22670

22615

22560

22505

22450

February 27

HSI - MOVERS Name

%Day

AIA GROUP LTD

4.12

NEW WORLD DEV

3.77

SINO LAND CO

2.87

WHARF HLDG

2.80

SANDS CHINA LTD

2.11

ALUMINUM CORP-H

-0.90

CHINA UNICOM HON

-0.90

TENCENT HOLDINGS

-1.05

TINGYI HLDG CO

-1.21

POWER ASSETS HOL

-3.24

Source: Bloomberg

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business daily February 28, 2013

macau

Tobacco smugglers killing profit margins, says industry Tobacco wholesalers and retailers say higher tobacco tax has boosted illegal trade, helping cut cigarette imports by half Tony Lai

tony.lai@macaubusinessdaily.com

Cigarettes are up to two-thirds cheaper in Zhuhai than they are here (Photo: Manuel Cardoso)

ax customs checks at the city’s borders are helping to harm profits among the city’s tobacco businesses, as smokers turn

opinion

Saga without end

José I. Duarte Economist

ome prejudices and misconceptions seem to have a life of their own. Through belief or convenience, certain words, sentences and ideas are repeated until they seem to become unquestionable truth, give access to a deeper understanding of what is going on or provide definitive answers to a problem’s causes and solution. So real estate prices keep going up. It must be speculators, mostly foreigners and nonresidents too. Successive measures to tame the market have failed to produce the expected results. Clearly the government must do more – of the same. There can be no doubt. The present situation was and is caused by speculators who

to cheaper black market cigarettes smuggled from the mainland, according to business leaders. Macau imported 603 million

– horror – buy flats as investments and do not live in them, and hope – renewed horror – that the value of their investments will maintain value better than a poorly remunerated bank deposit. The economy has been booming for years. Average incomes are rising, the population has grown, credit is cheap and demand has increased. It was to be expected and could have been easily anticipated. The city needed to plan for an increasing supply of residential space for those who live and work here. The government approved new luxury condos marketed to – readers may be surprised – non-residents and the occasional visitor, even institutional investors. The government then encouraged investors to buy. By the way, what is the profile of the beneficiaries of theses sales? Do the government departments in charge of the city’s construction policies have data they want to share with the public? Housing prices started to rise and a scarcity of housing for Macau residents became increasingly apparent. Inflated expectations fed a price boom. The public became increasingly restless. Something had to be done. The so-called scheme of residence acquisition by investment (this is a misnomer but put that to one side) at sale prices was suspended. There were still thousands of buyers in the queue.

Seeking solutions Something else had to be done. Perhaps restrictions on credit. That would force speculators out of the market (by the way,

cigarettes in the first 11 months of last year, a 48.9-percent fall over the same time a year before, Economic Services Bureau director Sou Tim Peng said earlier this month. In a written reply to an inquiry from Legislative Assembly member Lee Chong Cheng, Mr Tim attributed the decline to a December 2011 increase in the tobacco tax from 20 cents (25 US cents) a cigarette to 50 cents. Tobacco importers and retailers told Business Daily their revenues had slumped by more than half in the past 12 months, but say the levy is not the only reason. Companhia de Tabaco Wai Tai Ldta, the city’s biggest tobacco importer and the distributor of the Marlboro brand, said the indoor smoking ban introduced last year, tax increase and ineffective cu s to m s i n s p ecti o n s h a d h u r t business. “As the tobacco levy has been raised here, more local smokers have turned to cigarettes imported from Zhuhai, which are cheaper,” a spokesperson said. “We do not see there are many inspections carried out at the border terminals ever since a new limit of bringing five packs into the city was imposed by the government.” Last April, the maximum allowance of duty-free cigarettes for people entering Macau was cut from 200 cigarettes a day – equivalent to 10 packs – to 100 cigarettes. Industry leaders say a pack of cigarettes costs less than 10 yuan

just how are they defined and identified?) and things would cool down. The market got hotter and more voices joined the choir of complainers. Introduce punitive taxes on transactions, although it will penalise perfectly legitimate and sincere buyers. This time the speculators will be forced out of the market.

Should the government keep increasing the poverty threshold and therefore eligibility, until the definition includes enough residents to fill all of the social houses being built?

(12.50 patacas) in Zhuhai, about one-third of the price of the most popular brands here.

Tighter limit Another importer, Companhia Tabacos Man Veng Hong Lda echoed Wai Tai’s view, but defended customs. “I understand there are difficulties in carrying out such inspections as so many people use the Border Gate every day,” Man Veng Hong manager Lam Kok Meng said. Macau Customs told Business Daily that more than 810,000 smuggled cigarettes in 1,400 cases were seized at border checkpoints last year. Seizures were almost twice as great as the 440,000 smuggled cigarettes detected in 793 cases the year before. “The increase is due to the new five-pack limit as many travellers are unaware of this. We did not carry out more inspections,” said a customs spokesperson. “Our main focus is to fight against those trying to smuggle cigarettes and sell them here without paying the taxes.” Mr Lam says stricter rules, such as Hong Kong’s, are needed. Hong Kong allows arrivals to enter the city with 19 cigarettes, one short of a full pack. “The current limit of five packs is a very lenient cap. It is rare for people to consume more than five packs a day,” he said. “We have no problem with tobacco control here as it is a global trend. But if they impose such strict rules within the city, why don’t they also do this at the border?” The owner of cigarette retailer Fok Cheong Tobacco Co said current border measures and inspections were adequate. “The smokers have fewer chances to smoke due to the indoor ban enforced last year… [so] our business went down by over 70 percent,” owner Tang Iu Seng said. “The [partial] casino smoking ban starting last month has further worsened our revenue as mainland Chinese tourists account for over 60 percent of the sales.”

Prices kept rising, apparently against the tide of the changes, but now the middle class was being squeezed. A magical solution was proposed: massive doses of social housing. That will solve the problem. Wait. There is something in that argument that is puzzling. How can providing cheap houses to people too poor to buy a house, no matter the circumstances, cool prices? And rising incomes mean poverty has been reduced. That is an achievement many proudly claim. There are several mysterious elements here. Should the government keep increasing the poverty threshold and therefore eligibility, until the definition includes enough residents to fill all of the social houses being built? That would also make a mockery of the social housing policy and not all of those flats are likely to be used by their actual owners. In turn, that would also add vast sections of the public to the hated army of speculators. Flat prices continue to rise. The government has just announced it is considering carefully – as the public would always expect – new measures to cool the overheated market. The idea is to protect those that actually need the flat to live in. The commitment to defeat the speculators is unwavering. Sooner or later that will happen. A doubt eventually insinuates itself. Is it not true that speculators only make money when they are right about what it is they are speculating on? It seems that nothing the government has done so far has proved speculators’ hunches wrong. Does not that mean it is time to find another narrative, one hopefully grounded in hard facts?

February 28, 2013 business daily | 3

MACAU Venetian gaming floor ‘too small’: Leven The Venetian Macao opened in 2007 but its gaming floor “is now too small,” Michael Leven, president of Las Vegas Sands Corp, said in an interview with Hotel Interactive. “If we were building it again we would have built a bigger one,” he said. When it comes to casinos size matters, the executive stressed. “There’s a lot of human energy on a casino floor … The smaller you get, the more boutique you get, there’s not that excitement,” he explained. The company received government approval for 200 extra gaming tables, Edward Tracy, the president of the Macau unit Sands China Ltd, said last month.

How the site looked yesterday (Photo: Manuel Cardoso)

MGM Cotai project gets rocking New casino resort due for 2016 will provide at least 5,000 jobs Michael Grimes

michael.grimes@macaubusinessdaily.com

he predominating image at yesterday’s ceremony for the symbolic start of the construction of the US$2.6 billion MGM Cotai casino resort was rock; not the rock played by former Betty Ford Center in-patients and commemorated in memorabilia on the walls of hamburger restaurants around the world, but the real hard stuff. “This very ground where we are standing, is actually built on a bedrock that is 288 million years old. It is on this bedrock 100 metres below us that the foundation of MGM Cotai is anchored,” Pansy Ho Chiu King, chairperson of resort developer MGM China Holdings Ltd told the assembled dignitaries, analysts and media. “This epitomises our commitment to assimilate into the core strata of the Macau community, and to foster Macau’s growth into one of the world’s leading tourism, leisure and entertainment destinations,” she added. If that appeared to be applying a certain amount of gravitational pressure to the metaphor, it was understandable. The joint venture between Ms Ho and MGM Resorts International has had to wait a long time for its Cotai opportunity. It first applied for a land plot there in August 2007, according to Macau’s Official Gazette. Jim Murren, chairman and chief executive of MGM Resorts expressed – via a pre-recorded message from Las Vegas beamed onto the stage in a giant marquee specially set up for the occasion – his thanks to the Macau government for the opportunity. He also thanked MGM China’s chief executive Grant Bowie

and his “high performing team” for providing “a strong foundation for further growth”. There was the rock imagery again. Guests at yesterday’s event were even given a souvenir sample of the earth deep beneath their feet housed in an hourglass. But Ms Ho was firmly grounded on some of the practical benefits to the Macau economy of the new project. She said it would provide “5,000 to 6,000” new jobs once completed. “In order to run a hotel consisting of 1,600 to 1,800 rooms, casino, and other shopping and restaurant

Impression of MGM Cotai

facilities, we basically need [workers] in a similar scale like our resort in the Macau peninsula – about 5,000 to 6,000 people,” she told the media after the ceremony. She added: “It is not a confirmed figure as we want to have more entertainment elements in this project such as some art performances, exhibitions. We are still exploring these elements in the current stage so maybe there will be a different figure [on staff numbers in the future].” “The present design proposal already includes a theatre. The key right now is not about the venue but

what kind of shows [or] themes are we able to find,” she explained.

Bo diddlings As Ms Ho was speaking, news was emerging – via a report in the mainland publication Caijing magazine – of possible links between now disgraced Communist Party of China official Bo Xilai, former party boss in Chongqing, and the Macau junket investor Neptune Group. Ms Ho was asked in general terms about the rumours of a further central government crackdown on junkets. A number of Macau junket executives were briefly arrested late last year in a move linked by some analysts with a general crackdown on corruption and the change of leadership at central government level. “So far it [speculation on a further crackdown] has only been arising from amongst the media,” Ms Ho told reporters yesterday. “There has never been really any real concrete and clear indication that there were to be a direction from the government [on that],” she added. MGM Cotai will have 2,500 slot machines and up to 500 gaming tables, MGM China said in a statement, adding that 85 percent of the gross floor area will be for non-gaming including restaurants, shops and entertainment. Bill Hornbuckle, president of MGM Resorts told Business Daily yesterday the site had “potential of additional space if we’re given the opportunity to do so”. “Obviously as we’re spending US$2.5 billion plus, we have a lot of optimism for the future,” he added. “We see this thing opening in the spring – or summer at the latest – of 2016.”

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business daily February 28, 2013

macau Citic Telecom clinches U.S. bonds Citic Telecom International Holdings Ltd has reached an agreement with four financial institutions to issue US$450 million (3.6 billion patacas) of senior 12-year bonds on March 5. It is “the longest tenor U.S. dollar unrated public senior bond offering ever issued out of Asia,” the company stressed in a statement yesterday. Citic will pay an annual interest rate of 6.1 percent. The money will be used to replace part of the US$1.16 billion loan the company secured to fund the acquisition of local operator CTM, Companhia de Telecomunicações de Macau SARL.

Macao Water under operational pressure Water supplier feeling ‘helpless’ over government’s delay to approve service fee hike Stephanie Lai

sw.lai@macaubusinessdaily.com

acao Water Supply Co Ltd feels “helpless” over the government’s lack of reply to their request for raising the service fees, executive director Felix Fan Xiao Jun said yesterday. The company requested a hike of 26.2 percent in the water supply service fees in May last year, which the government has not yet approved. “The government has been delaying its decision, and it is no way to solve any problems,” Mr Fan remarked yesterday on the sidelines of a media luncheon. “Last year we had a tough time operating: we saw a surge in every operational cost factors, plus the staff turnover problem,” he said. “Our company’s financial capacity is weak.” In 2009, Macao Water recorded a profit of about 72.5 million patacas (US$9 million) but its profitability has been declining ever since, hitting 56.6 million patacas in 2011.

Macao Water requested a 26.2-percent lift in water supply service fees in May 2012

The 2012 operational figures can only be disclosed by the end of March, following the annual shareholders’ meeting, Mr Fan said. Susana Wong Soi Man, head of the Maritime Administration, told media

last week that the government had not approved Macao Water’s request. If a service fee hike was approved, it would not be backdated, even though the company filed the request in May 2012, she added.

Unemployment at 15-year low E

ven though in the last 15 years the labour force has increased by over two-thirds, the number of people without a job in Macau last month was as low as in February 1998, official data show. The number of unemployed fell by 0.1 percent to 6,600 in the November-January period, the Statistics and Census Service announced yesterday. Fresh labour force entrants searching for their first job accounted for 11.6 percent of the total unemployed, down by 4.5 percentage points. The labour force increased once again, by 1,400, to 358,100. A similar number of new jobs were created, taking the total employment to 351,400. Even though the construction sector fired about 1,000 workers – 750 of

The government expects an increase of 15 percent in the cost of imported water next year but Ms Wong said the water rate would not be increased thanks to higher government subsidies.

The police has opened an internal probe into the arrest of two grass-roots activists, said Mr Cheong

which imported staff –, that was easily offset by 1,200 new jobs in retail trade. There was also an increase in employment in real estate and business activities, the bureau said in a statement. With the unemployment rate at a measly 1.9 percent – the third lowest in the world – most of those jobs (1,090) went to non-resident workers. Imported labour accounted for 31.2 percent of the total work force in January. The new jobs went mainly to women, as the rate of female participation in the labour force rose by 0.3 percentage point to 67.2 percent. The underemployment rate – the percentage of people working in jobs they are overqualified for, or who work only part-time and want full-time work – fell by 0.1 percentage point to 0.6 percent, the lowest since December 1997. V.Q.

Fraud and car theft growing fast M

acau saw a slight rise in criminality last year, with over half of the cases reported linked to property, Secretary for Security Cheong Kuoc Va announced in a press briefing yesterday. A total of 12,685 crime cases were reported in 2012,

a slight rise by 1.4 percent from the previous year. Property crimes alone represented 57.4 percent of those cases, while physical assaults took up 19.5 percent. Even though the police recorded a fall of nearly 20 percent in pick-pocketing and burglary, cases of car

theft have seen a sharp rise by 88.9 percent to 34 cases last year, the secretary said. Of the 7,283 property crimes reported last year, 590 cases were of fraud, up by a significant 45.3 percent when compared to 2011. The police also caught a total of 38,231 illegal immigrants and visitors who overstayed their visa in the city, up by 13.2 percent from to the previous year. The majority of the overstayers and illegal immigrants were from mainland China, police figures show. In 2012 over 29,50 overstayers with mainland identification documents were detected by the police, 13 percent of which were holders of individual travel permit. However, the police found only 447 cases of ‘sheltering, assisting or employing illegal immigrants’ in 2012, down by 10.6 percent compared to the previous year. During the press conference, Mr Cheong said the Judiciary Police has opened an internal probe into last week’s incident in which three grass-roots activists were arrested during the visit of Wu Bangguo, chairman of the National People’s Congress. S.L.

February 28, 2013 business daily | 5

MACAU

TurboJet, CotaiJet eye 13-percent fare hike Rising fuel costs, labour expenses and soaring inflation are the main reasons for the request Tony Lai

tony.lai@macaubusinessdaily.com

he city’s two major ferry operators – TurboJet and Cotai Water Jet – applied last year to the Macau Maritime Administration for a hike in their ticket fares due to rising operating costs. “The increase in the ticket fares the two ferry companies applied for their routes is about 13 percent in average, mostly involving routes from Macau to Hong Kong and Shenzhen,” the regulator said in a statement yesterday. The operators explained such move was due to “the increase in the operating costs caused by the soaring fuel prices, the rising consumer price index and the implementation of minimum wage in Hong Kong”, the bureau said. The government is “analysing th e applicat ions an d [it] will consider factors like the residents purchasing power, the consumer price index and the actual business situation of the marine industry,” the statement adds. The authorities did not say when there might be a reply for the requests. The government received applications from TurboJet and Cotai Water Jet in September and October

TurboJet and CotaiJet are waiting for a government reply on a fare increase

respectively. TurboJet operates routes connecting Macau to Sheung Wan, Kowloon and Hong Kong International Airport, as well as connections to mainland destinations such as Guangzhou,

Shekou and Shenzhen Bao’an International Airport. Currently, a ticket from Macau to Hong Kong on a weekday costs HK$140 (US$18). A 13-percent increase would see this increase to

HK$158. A possible hike for Cotai Water Jet run by Cotai Ferry Co Ltd would raise its ticket price in weekday from HK$141 to HK$159. Business Daily asked Shun Tak and Sands China Ltd, Cotai Ferry Co. Ltd’s parent company, for comments but did not receive a reply before press time. But Shun Tak deputy general manager Anna Hong has told the Chinese-language newspaper Shimin Daily an adjustment in fares, Shun Tak’s sole source of income, was the only means to maintain the operational level and quality of service. The company hopes for swift approval from the Maritime Administration. Ms Hong told the newspaper that fuel prices have accounted for more than half of the company’s outlay in the past two years. Workers’ salaries and benefits “have been increasing by 15 percent [annually] in recent years,” she added. Shun Tak expects wage costs to grow further, with the Hong Kong government set to raise the minimum salary to HK$30 an hour in May, up from HK$28 an hour currently.

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business daily February 28, 2013

macau

Oriental Watch eyes Macau expansion Rent surge in Hong Kong is becoming unbearable, watch retailer says Stephanie Lai

sw.lai@macaubusinessdaily.com

atch retailer Oriental Watch Holdings Ltd intends to open one more shop in Macau by March, along with one outlet in mainland China and two more in Taiwan. Due to rental pressure, however, the firm has no plans to expand shops in Hong Kong, financial services company Guosen Securities (Hong Kong) Financial Holdings Co Ltd wrote in a note to investors. “Escalating rental rates continued to be a major concern for Hong Kong and Macau retailers”, the company said in December. The watch retailer notes that their rent costs in Hong Kong will reach HK$133 million (US$17 million)

Wholesale hub of apparel seller thrives Macau wholesale operations one of the few upbeat signs for Esprit Vítor Quintã

vitorquinta@macaubusinessdaily.com

acau was the fastest growing segment for Hong Kongbased apparel seller Esprit Holdings Ltd in the second half of 2012, which uses the territory as a wholesale hub. Esprit recorded “robust” 35.2 percent wholesale turnover growth in Macau to HK$267 million (US$34.4 million), the company told the Hong Kong Stock Exchange yesterday. The city serves as a wholesale hub for the brand’s franchisees in Asia Pacific as well as in Colombia, Chile and the Middle East, where sales grew more than fourfold.

during the first half of 2013, up by 90 percent year-on-year. The board of Oriental Watch did not rule out the possibility of selling existing property to finance its shop expansion plan. At the end of 2012 Oriental Watch had 110 sales points in Greater China, including two outlets in Macau, which accounted for 4 percent of the retailer’s revenue in the six months ended September 30. During that period, the company’s total turnover reached HK$1.8 billion, down by 9 percent year-on-year. Sales in Macau and mainland China dropped by 8.6 percent from the same period a year earlier to

In the second half of 2012, Macau accounted for 5 percent of the group’s wholesale turnover, up from 3.2 percent a year earlier. Esprit also saw positive results in its retail business in the city, which grew by 6.9 percent to HK$58 million. However, this represents just 0.7 percent of the group’s retail turnover. Still, the growth was enough the persuade the firm to open a fourth store in Macau, taking its total sales area in the territory up to 2,187 square meters. Esprit’s local operations were one of the few upbeat signs in the seller’s results, which show a HK$465 million second-half loss after sales fell on weaker European consumer sentiment. Revenue dropped 19 percent to HK$13.6 billion, said the group, which raised more than HK$5 billion in a rights offer in November to fund efforts to revive its brand. “We still doubt whether it is the right time to make such heavy investment, when economic conditions in Europe remain sluggish,” said Gabriel Chan, a Hong Kong-based analyst at Credit Suisse Group AG. Esprit dropped 0.79 percent to HK$10.1 in Hong Kong trading while the benchmark Hang Seng Index climbed 0.25 percent. The shares have lost over a third of its value over the past year. The company said in 2011 that it planned to spend more than HK$18 billion over four years on efforts to transform the company through more marketing and a larger presence in China. With Bloomberg News

HK$613 million. The retailer’s gross profit also declined by 20.7 percent to HK$339 million, slicing the gross profit margin to 18.9 percent from 21.7 percent a year earlier.

Raising retail price Watch suppliers are planning to increase prices by 4 to 5 percent by July and August, which Oriental Watch will pass on to customers, Guosen Securities wrote. Last year, the price of Swiss watches supplied to Hong Kong was not updated and therefore contributed to relatively lower inventory costs for Oriental Watch.

Bossini profit falls on ‘fierce’ competition S

ales of clothing distributor and retailer Bossini International Holdings Ltd in its Hong Kong segment, which includes franchised stores in Macau, hit a new record high in the second half of last year. Turnover in the two cities rose by 3 percent year-on-year to HK$842 million (US$108.5 million) but the operating profit tumbled 19 percent to HK$122 million, the company told the Hong Kong Stock Exchange. Nevertheless, the company climbed 8.75 percent in Hong Kong trading yesterday to 0.44 cents of Hong Kong dollar. Bossini said in a filing on Tuesday the drop was due to “dampened export franchising markets” but also to “exorbitant rentals fuelled by fierce competition for prime shopping locations in Hong Kong”. In addition, “considerable

Before the retailers’ intended price hike, “the short-term demand for watches will be stimulated and hence pull up the sales,” Guosen Securities noted. “This will, to a certain extent, enhance the gross profit margin” for the second half of the year, the Chinese state-owned firm wrote. Oriental Watch saw an annual 7 percent increase in its inventory to HK$2.1 billion at the end of September, 63 percent of which for core brands. The watch retailer says the inventory level is too high and intends to lower it by 10 percent by September this year, Guosen Securities added.

discounting and sales promotion activity are frequently offered as international brands joined the league of their local counterparts afflicted with high inventory predicament,” the firm said. Due to “substantial losses” recorded in the mainland China and Taiwan markets, the retailer’s overall profit fell by 42.4 percent to just HK$34 million. The revenue also shrank by 8 percent year-on-year to HK$1.3 billion. Still, the group, which has operations in 36 countries and territories, says it kept “a healthy financial position” with positive net cash and inventory level “much better” than that of last year. Bossini currently has three outlets in Macau. V.Q.

February 28, 2013 business daily | 7

MACAU

Regulator to print more money as demand soars AMCM pledges to work on easier conditions for Macau banks to enter Hengqin Vítor Quintã

vitorquinta@macaubusinessdaily.com

ith currency circulation growing fast, the city’s two note-issuing banks are preparing to issue more pataca banknotes in the near future, said Anselmo Teng Lin Seng. But the chairman of the Monetary Authority of Macau (AMCM) said “it takes a long time to prepare to issue banknotes because it has to go through a legal procedure”. “We have coordinated with the printing company and already made plans and having fully considered the actual needs of residents, we made a forecast and it is currently going through the procedures, so more banknotes will be printed,” he added. Speaking on the sidelines of a Chinese New Year luncheon hosted by the Macau Association of Banks, Mr Teng declined to reveal how many notes would be issued and when they would be put into circulation. “The amount will be known when the by-law comes out. It will be announced this year,” he said.

More banknotes will be printed considering ‘the actual needs of residents’, said Anselmo Teng

Corporate

Encore Macau named PATA Gold Awards as Forbes award winner open for submissions Forbes Travel Guide announced on Tuesday its 55th annual listing of FiveStar hospitality establishments, which for the first time includes Encore Macau and the Spa at Encore Macau. Wynn Macau and The Spa at Wynn Macau were also bestowed Five-Star awards again this year. In total, there were five casino resorts receiving Five-Stars in the territory, including Melco’s Crown Towers and Mandarin Oriental Macau. With Encore Macau making its debut on the list, Wynn Resorts now holds more Five-Star awards than any other brand in the Las Vegas and Macau markets. “Our new awards … create a clean sweep for our Macau hotels,” said Steve Wynn, chairman and chief executive of Wynn Resorts Ltd, in a statement. “We are establishing a global benchmark for the highest standards in hospitality service and facilities,” said Michael Cascone, president and chief operating officer of Forbes Travel Guide.

Travel industry organisations and individuals can now submit entries to the 2013 Pacific Asia Travel Association (PATA) Gold Awards until April 30, 2013, the association said on Tuesday. The awards sponsored by the Macau Government Tourist Office (MGTO) put the spotlight on those who have made outstanding contributions to successfully develop and promote travel and tourism in Asia Pacific. “The awards allow us to learn from those who have excelled. These ‘stars’ help keep travel and tourism industry in the Asia Pacific region on track,” said Maria Helena de Senna Fernandes (pictured), MGTO director, in a statement. The winning entries will be showcased at the PATA Travel Mart, September 15-17, 2013, in Chengdu, capital of Sichuan province. Judged by panels of experts, the Gold Awards recognise exceptional achievement in six categories: Marketing, Environment, Heritage and Culture, Education and Training, Marketing Media and Travel Journalism.

Currency in circulation rose by 22.8 percent last year to reach 7.46 billion patacas (US$933.6 million) by the end of December, official data show. In the same period, the money supply ‘M1’ – a measurement that also includes bank deposits and other assets that can quickly be converted to currency – rose by 31.1 percent to 47.5 billion patacas. But the supply of pataca grew much slower, by 16 percent, to 20.7 billion patacas. Banco Nacional Ultramarino SA (BNU) and the Macau branch of Bank of China Ltd are the city’s two note-issuing banks. Also on Tuesday, Mr Teng said the authority would try to negotiate with the mainland regulators to lower the minimum assets Macau banks must have to gain a foothold on Hengqin. “We will try, but it is difficult. The current minimum threshold was not easy to start with but we got it,” he stressed. The latest supplement to the Closer Economic Partnership Arrangement with the mainland lowered the minimum assets Macau banks must have to open a Hengqin branch to US$4 billion from US$6 billion. “Some banks have expressed interest in opening offices in Hengqin,” Mr Teng confirmed. “Firstly, it is necessary to open an office so that a branch can be created, according to the mainland Chinese regulator’s requirements,” he added. Four banks have reportedly shown interest in establishing branches on the island: Tai Fung Bank Ltd, BNU, Luso International Banking Ltd, and the Industrial and Commercial Bank of China (Macau) Ltd.

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business daily February 28, 2013

GREATER CHINA HKEx annual profit hit by listings slump Hong Kong Exchanges & Clearing Ltd, the world’s largest exchange operator by market value, said full-year profit plunged 20 percent, the first drop in three years, as turnover and listings fell amid concerns of an economic slowdown in China and Europe’s debt crisis. Net income fell to HK$4.08 billion (US$526 million) for the year ended December 31, from HK$5.09 billion a year earlier, the company said in a statement yesterday. Global equity volumes plunged last year, squeezing exchanges and brokerages as slowing growth in China and the U.S., plus Europe’s sovereign-debt crisis, sapped investor confidence.

HK looks to spur growth As the government reports HK$64.9 billion fiscal surplus As he delivered his speech, elderly protestors called on the government to implement a state retirement pension scheme.

Ageing society

John Tsang said that Hong Kong can expect economic growth of up to 3.5 percent this year

ong Kong Chief Executive Leung Chun Ying increased spending on the poor and elderly in his government’s first budget, offering a growth boost to an economy burdened with record housing costs. The fiscal plan will bolster gross domestic product gains by 1.3 percentage points, Financial Secretary John Tsang said yesterday in a speech. The city’s GDP expanded 2.5 percent last quarter from a year earlier, the most in a year, a bright end to what was the weakest annual expansion since 2009. Mr Leung, whose popular support has tumbled since he took office in July, is seeking to direct public funds to fulfil campaign promises of narrowing a record wealth gap and helping the aged. The former

property surveyor increased welfare spending by about a third in the budget, handing out allowances to more than 400,000 elderly residents and pumping HK$15 billion (US$2 billion) into a poverty alleviation fund in the budget. “The overall tone of the budget shows that the government is keen to help the lower-income class,” Raymond Yeung, a Hong Kong-based senior economist at Australia & New Zealand Banking Group Ltd, said by telephone. “Infrastructure spending by the government and measures to maintain full employment in Hong Kong will help the city’s economy to improve further.” Mr Tsang also unveiled HK$33 billion (US$4.3 billion) of one-time measures, including tax rebates and electricity subsidies.

Hong Kong is increasing recurrent spending on welfare programmes, which will advance 31 percent to HK$56 billion in the fiscal year starting April 1, as the population grays. The proportion of people age 65 and older reached 14 percent last year and is expected to account for 30 percent by 2041, Mr Tsang said. “Judging from the current demographic trends, our economic growth will certainly continue to taper off in the 2020s,” Mr Tsang said. In his first policy address last month, Mr Leung promised to boost the supply of housing, tackle pollution and provide more care for the elderly. Last week, he imposed new property curbs as record-low interest rates and an influx of buyers from China fuelled a doubling in home prices since early 2009. Mr Tsang said 46 sites, including 28 new sites, would be offered for sale in the new fiscal year, that begins on April 1. Hong Kong’s Gini coefficient, a measure of income inequality, rose to 0.537 in 2011 from 0.525 in 2001, the government said last June. The score, a high for the city since records began in 1971, is above the 0.4 level used by analysts as a gauge of the potential for social unrest.

leaders are mulling plans to revamp the central government this week to bolster the economy as it emerges from a seven-quarter slowdown, the official Xinhua News Agency reported last week. Communist Party chief Xi Jinping is projected to become president during the broadest reshuffle in five years at the National People’s Congress starting March 5. Gains this year in Chinese A

Bloomberg News/Reuters

Recovering growth Fourth-quarter economic expansion of 2.5 percent is up from the third quarter’s 1.4 percent, mirroring similar acceleration in other Asian economies as global demand

China’s biggest fund sees govt policies spurring gains hinese stocks will resume this year’s rally as the government works to shore up the nation’s economic recovery, according to China Asset Management Co., the biggest fund manager. The Shanghai Composite Index dropped 1.4 percent on Tuesday, extending its February drop to 3.9 percent, after back-to-back gains in January and December. China’s new

improves. Hong Kong’s economy expanded 1.4 percent in 2012 and Mr Tsang is projecting growth of 1.5 percent to 3.5 percent this year. “Fundamentals in Asia remain strong and the mainland economy regained its growth momentum in the fourth quarter,” Mr Tsang said. “Barring an abrupt deterioration in the demand from the advanced economies, Hong Kong’s external trade should see some improvement.” Soaring land revenues and profits taxes swelled public coffers to a bumper HK$64.9 billion ($8.37 billion) fiscal surplus, bucking previous government expectations for a deficit. To bolster long-term economic growth, Mr Tsang said the government will increase infrastructure spending and look to expand the city’s logistics and fund-management industries. It is studying the building of a new container terminal and will also spend more on training workers, he said. The city will sell as much as HK$10 billion worth of inflation-linked bonds under the government’s bond programme, which will be doubled to HK$200 billion, Mr Tsang also said.

shares, stock traded in Shanghai and the southern city of Shenzhen, “didn’t fully reflect the gradual economic recovery this year,” David Lai, a portfolio manager at the Hong Kong unit of China Asset Management, said. “More projects or plans will be rolled out to support short-term growth after the government reshuffle next month.” China Asset Management is the

country’s biggest fund manager with 246 billion yuan (US$39 billion) of assets, according to fund tracker Howbuy. Mr Lai manages the ChinaAMC CSI 300 Index ETF, a Hong Kong-listed exchangetraded fund that tracks the 300 biggest publicly traded companies in Shanghai and Shenzhen. China’s economy, the world’s second largest, grew 7.8 percent last year, the least since 1999. Gross domestic product will rise about 8 percent this year as Chinese policy makers work to support private enterprise by opening up highly regulated industries including telecommunications and railways, Mr Lai said. Inflation and rising property prices pose the biggest risk to stocks this year, he said. Bloomberg News

February 28, 2013 business daily | 9

GREATER CHINA New World’s profit up New World Development Co., the Hong Kong builder controlled by billionaire Cheng Yu Tung, said underlying profit jumped 45 percent, beating estimates, after it booked more apartment sales in the city. Profit excluding property revaluations advanced to HK$4.1 billion (US$529 million) for the six months ended December 31 from HK$2.83 billion a year earlier, New World said in a statement to Hong Kong’s stock exchange yesterday. Sales rose to HK$24.5 billion from HK$19.1 billion. New World is accelerating apartment sales and the pace of replenishing its land reserves in Hong Kong as the government pledged to increase land supply to help make housing more affordable to the general public.

Beijing to ease issuance of ABS China’s market regulator issued draft rules that would make it easier for brokerages to package, securitise and resell a wide range of assets from real estate to receivables to commercial paper, opening another channel for liquidity to move into the real economy. The draft rules did not include a date for implementation and are intended to solicit feedback. China launched a pilot programme to test assetbacked securities (ABS) in 2005, but the government suspended the programme during the global credit crisis. Beijing relaunched the project in 2012 and has gradually expanded the programme since.

State agency calls for tighter monetary policy Research unit warns of excessive liquidity and credit

hina needs to lean toward a tighter monetary-policy stance as the economy faces risks from excessive liquidity and credit, according to a research unit of the nation’s top economic-planning agency. Authorities should drain more cash from the financial system to manage liquidity and regulators need to enhance oversight of banks’ off-balance-sheet business, the State Information Centre, a research arm of the National Development and Reform Commission, said in a report published yesterday in the official China Securities Journal. The report adds to signs that the central bank and other agencies will step up efforts to counter risks from rising property prices and debt as the economy recovers from the weakest growth in 13 years. The People’s Bank of China withdrew a net 910 billion yuan (US$146 billion) from the financial system last week, more than double the previous record in data compiled by Bloomberg going back to 2008. “For now, risks of overheating are bigger than those of a deep slowdown,” said Sun Mingchun, head of China research at Daiwa Capital Markets in Hong Kong. Growth in gross domestic product

PBOC withdrew a net 910 billion yuan from the market last week

will accelerate further to 8 percent in the first quarter from 7.9 percent in the final three months of 2012 thanks to strong expansion in infrastructure investment, with consumer inflation at 2.6 percent for the first quarter of 2013, according to the research agency’s report. The yen’s depreciation will drag down China’s export growth rate in the first quarter by 2 percentage points to 8 percent, according to the report by a group led by Fan Jianping, director of

welcome

the State Information Centre’s economic-forecast department. The Japanese currency has fallen 9 percent against the dollar since the December 16 election victory of Prime Minister Shinzo Abe’s Liberal Democratic Party. “The U.S. economy is in better shape than Europe and Japan,” according to the report. That indicates a “great amount of funds may flow back to the U.S.,” meaning the dollar may appreciate. Bloomberg News

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10 |

business daily February 28, 2013

ASIA

Kuroda heading for parliamentary confirmation As Japan’s prime minister prepares BOJ nominations Takashi Hirokawa and Isabel Reynolds

sian Development Bank president Haruhiko Kuroda is set for parliamentary confirmation as Japan’s next central bank chief following his nomination, ushering in a leadership team projected to step up monetary stimulus. Members of the main opposition Democratic Party of Japan said they will back Mr Kuroda, easing his passage through a split parliament. Prime Minister Shinzo Abe is aiming to present his nominations for Bank of Japan governor and two deputies today, chief cabinet secretary Yoshihide Suga said. While the DPJ signalled resistance to one anticipated deputy pick – Kikuo Iwata, an advocate of greater government oversight of the BOJ – two other opposition parties showed support, increasing the chance that Mr Abe gets approval for his full slate. Confirmations would yield him a win on his biggest agenda item since he took office in December vowing to lift Japan out of 15 years of deflation. “I’m expecting smooth sailing,” Robert Feldman, head of Japan economic research at Morgan Stanley MUFG Securities Co., said in a Bloomberg Television interview.

The new leadership of the Bank of Japan is going to have to announce some measures that amount to regime change in monetary policy Robert Feldman, Morgan Stanley MUFG Securities

“The new leadership of the Bank of Japan is going to have to announce some measures that amount to regime change in monetary policy.” Mr Kuroda is the prime minister’s pick to head the central bank, two people familiar with the discussions

said on February 25. The prime minister is also likely to name Mr Iwata, an economics professor at Tokyo’s Gakushuin University, and BOJ official Hiroshi Nakaso as deputies, the people said on condition of anonymity.

Picking their battles While the DPJ won’t formally respond until Mr Abe announces his picks, its lawmakers praised Mr Kuroda, a former Ministry of Finance official who called for an inflation target a decade before the central bank adopted a 2 percent target last month. “Taking his insight and experience together, he is all-in-all a very capable candidate,” Hirofumi Ryu, the DPJ’s deputy secretary-general, said of Mr Kuroda yesterday in an interview. At the same time, “there are some in the party who have concerns about Iwata”. Mr Iwata in an January interview advocated changing the law governing the central bank to give the government greater say in setting policy goals. The DPJ, which was ousted from power in December, last month dropped its opposition

India economy ‘looking up’ Likely to hit fiscal deficit target despite low revenue, govt says Manoj Kumar and Rajesh Kumar Singh

to former finance ministry officials leading the bank while stressing the importance of preserving its independence. “Kikuo Iwata has insisted that if the inflation target isn’t reached then the BOJ law should be changed to allow the government to fire the governor,” DPJ lawmaker Keisuke Tsumura said in an interview. “I am completely against him.” He called Mr Kuroda “a very capable person with the kind of experience and knowledge needed

KEY POINTS Annual deficit expected at 5.3 percent of GDP – report Recommends reining in gold imports to lower external deficit Fiscal consolidation to make room for monetary easing

Economy to grow 5 percent this fiscal year

ndia is likely to hit a fiscal deficit target of 5.3 percent of gross domestic product this year despite a significant shortfall in revenue, a government report said

yesterday, a day before the budget, but it conceded economic growth would be a sluggish 5 percent. The annual report on challenges facing the economy was prepared

by Raghuram Rajan, a former chief economist to the International Monetary Fund who became the top adviser in the finance ministry last year. It came a day before Finance

Minister P. Chidambaram unveils what is expected to be the most austere budget in years. Since returning to the finance ministry for his third stint in August, Mr Chidambaram has cut spending sharply in a drive to narrow the fiscal deficit. “The downturn is more or less over and the economy is looking up,” said the report. Mr Rajan had previously said that 5.3 percent was a “tough” deficit target for fiscal 2012/13 (AprilMarch), but the spending cuts in areas such as welfare, defence and road projects have convinced economists that the goal may be reachable, even though weak corporate performance and growth has hit tax receipts. However, the report said more tax income was needed. “It is better to achieve fiscal consolidation partly through a higher tax-GDP ratio than merely through reduction in the expenditure-toGDP ratio, in view of large unmet development needs,” the report said. A deficit of 5.3 percent of GDP would remain the widest spending gap among the BRICS group of

February 28, 2013 business daily | 11

ASIA

AirAsia shares surge on dividend pledge

Mr Kuroda called for an inflation target a decade before it was adopted

for Japan’s economy right now”. “Abenomics is widely supported by the public,” said Nakamura, director of research at Asian Forum Japan in Tokyo. “The Democrats are in a very weak position. If they are looking for an issue on which to do battle, the BOJ governor is probably not the top priority.” Smaller opposition parties are backing Mr Iwata, reducing the risk Mr Abe will fail to get his choices approved through the oppositioncontrolled upper house. Hiroyuki

major emerging nations, which also includes Brazil, Russia, China and South Africa. “There is no escape route in achieving the 5.3 percent fiscal deficit target and I do not expect any slippage,” said Anubhuti Sahay, an economist at Standard Chartered Plc. “Reining in expenditure is likely to remain a theme for FY14. However, this is not the way to manage the overall growth story. You have to manage the supply side in the middle to long term.”

Lowest growth The report forecast the economy will grow 5 percent this fiscal year, falling in line with a separate government forecast that Mr Rajan and Mr Chidambaram questioned earlier this month, saying it was based on old data. Such low growth is the worst in a decade and could make the deficit target harder to reach. The latest report predicted GDP growth of 6.1-6.7 percent in the financial year that starts in April, roughly in line with private economists’ recent forecasts. Prioritising expenditure and further cuts to subsidies on fuel are also key to medium-term fiscal consolidation, the report said. Mr Chidambaram has vowed to bring the deficit down to 4.8 percent in the fiscal year that begins in April. The report said further reiningin of the fiscal deficit, which hit 5.8 percent of GDP last year, would create room for “more accommodative” monetary policy. The report recommended further curbing gold imports to narrow the current account deficit, which is likely to be at a record of about 5 percent this fiscal year. Reuters

Arai of the New Renaissance Party, which has two seats in the chamber, yesterday said in an interview that the reported candidates “are well qualified” and would likely get his party’s support. The Your Party, which has 12 upper house lawmakers, this month said it would back Mr Iwata if he’s nominated. The DPJ has 87 members in the 242-seat chamber, the LDP has 83 and its coalition partner New Komeito has 19. Six seats are vacant. Bloomberg News

hares in AirAsia Bhd rose nearly 10 percent yesterday, their biggest one-day jump since last March, after the company said it will pay a dividend from this year, its first official dividend policy since listing in 2004. Shares in Asia’s largest budget airline by passengers, which have lost more than a quarter of their value in the past year, rose as high as 2.94 ringgit yesterday, while the benchmark Malaysian index rose 0.12 percent. Late on Tuesday the airline said it has adopted a dividend policy under which it will pay an annual dividend of up to 20 percent of its net operating profit, starting this year. It declared a special dividend of 18 sen per share after announcing 2012 core net income of 858.23 million ringgit (US$276.67 million), a marginal increase on the previous year. Including a one-off gain of 1.16 billion ringgit from a sale of shares in its Thai operation, full year profit was 1.88 billion ringgit. “The company has formalised the dividend policy ... as part of our plans to give more certainty every year to shareholders,” chief executive of Malaysian operations Aireen Omar said in a statement on Tuesday. Kuala Lumpur-based Kenanga Research upgraded AirAsia to outperform from market perform, and raised its target price to 3.23 ringgit per share from 3.07. Nonetheless, another Kuala

Airline adopts dividend policy, first since IPO in 2004

Lumpur-based research house, OSK Research, wasn’t too excited about the dividend. It kept a ‘buy’ rating on AirAsia with an unchanged fair value of 3.39 ringgit per share. AirAsia plans this year to set up a new airline in India, in a joint venture with Tata Sons Ltd, but will face stiffer competition in its home market of Malaysia. Malindo Air, a joint venture between Lion Air of Indonesia and Malaysia’s National Aerospace & Defence Industries Sdn Bhd, has received approval from Malaysian authorities to start operations and will offer low-cost flights from March, it said on Tuesday. Reuters

Asian markets up on Fed stand But a stronger yen sent Tokyo lower

sian stocks outside Japan gained after U.S. housing and consumer confidence data beat estimates and after the Federal Reserve head Ben Bernanke reaffirmed the central bank’s huge monetary easing scheme. Japanese shares fell as the yen rose ahead of an Italian bond sale, with yields surging after the nation’s deadlocked election stoked debt crisis concern. The MSCI Asia Pacific Excluding Japan Index gained 0.6 percent to 475.72 as of 5.14pm in Tokyo, with about two stocks rising for each that fell. The broader MSCI Asia Pacific Index fell 0.2 percent to 133.20. “You need to watch what happened to Italian bond yields and how much further they may rise,” said Andrew Pease, Sydney- based chief investment strategist at Russell Investment Group. “The markets are copying the U.S. and Europe right now. There were better data out of the U.S. and Bernanke’s somewhat reassuring comments.” Investors remained hesitant and the euro came under pressure after Italy’s election results which left no party in overall control, raising concerns that uncertainty in Rome could see the euro zone return to the dark days of crisis. Investors were awaiting Italy’s sale yesterday of as much as 4 billion euros (US$5 billion) of a 10-year bond and 2.5 billion euros of a fiveyear benchmark note. The MSCI Asia Pacific Index

Japanese exporters fell as the yen rose against most of its major counterparts

gained 9.4 percent from the end of October through yesterday as Japanese shares rallied on speculation a new government led by Prime Minister Shinzo Abe will press for more stimulus to beat deflation. Japan’s Nikkei 225 Stock Average dropped 1.3 percent, capping the biggest two-day loss since November 2011. Australia’s S&P/ASX 200 Index climbed 0.7 percent, while New Zealand’s NZX 50 added 0.9 percent. South Korea’s Kospi Index rose 0.2 percent. Hong Kong’s Hang Seng Index

added 0.3 percent. China’s Shanghai Composite Index rose 0.9 percent. Taiwan’s Taiex Index gained 0.2 percent and Singapore’s Straits Times Index rose 0.3 percent. Futures on the Standard & Poor’s 500 Index were little changed yesterday. The U.S. equity gauge added 0.6 percent yesterday, when reports showed purchases of new homes surged in January by the most in two decades and consumer confidence jumped this month. Bloomberg News

12 |

business daily February 28, 2013

MARKETS HANG SENG INDEX PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

32.85

4.120444

94653532

CHINA UNICOM HON

10.96

-0.9041591

26310334

3.3

-0.9009009

15842870

CITIC PACIFIC

11.08

-0.1801802

6771563

BANK OF CHINA-H

3.55

-0.5602241

401756054

SANDS CHINA LTD

BANK OF COMMUN-H

5.93

-0.1683502

29952460

SINO LAND CO

31.55

0.96

5168207

BELLE INTERNATIO

14.24

-0.8356546

30663090

BOC HONG KONG HO

25.35

-0.5882353

19631558

NAME AIA GROUP LTD ALUMINUM CORP-H

BANK EAST ASIA

NAME

CLP HLDGS LTD

66.55

-0.4487659

5533319

CNOOC LTD

14.98

-0.5312085

47860635

COSCO PAC LTD

12.16

-0.4909984

5701158

ESPRIT HLDGS

10.1

-0.7858546

17958513

HANG LUNG PROPER

29.4

0.5128205

6179423

NAME

PRICE

POWER ASSETS HOL

4074469

98.7

0.05068424

1231775

TENCENT HOLDINGS

264.2

-1.048689

3479798

TINGYI HLDG CO

20.45

-1.207729

11091246

10.66

0.3766478

14986051

66.1

2.799378

4124755

3594867

HANG SENG BK

123.6

0.6514658

1418541

3462783

WANT WANT CHINA

HENDERSON LAND D

53.45

1.327014

3005804

CHINA COAL ENE-H

7.32

1.385042

29142230

WHARF HLDG

HENGAN INTL

78.3

0.4490058

2093982

CHINA CONST BA-H

6.18

0.1620746

233370871

HONG KG CHINA GS

21.5

5801972

22.75

0.6637168

30833272

0.9345794

2319805

84.95 -0.05882353

CHINA MOBILE

13757144

HUTCHISON WHAMPO

CHINA OVERSEAS

22.8

1.785714

26169669

IND & COMM BK-H

CHINA PETROLEU-H

8.73

0.4602992

126478526

LI & FUNG LTD

6482534

-0.1782531

14040958

81.6

-0.5484461

9348234

5.4

-0.1848429

226480921

10.5

0.3824092

12908548

-0.4731861

2300420

CHINA RES ENTERP

24.95

-0.3992016

1997523

MTR CORP

31.55

CHINA RES LAND

21.85

1.392111

6779866

NEW WORLD DEV

13.76

3.770739

24260265

CHINA RES POWER

20.85

-0.7142857

5963983

PETROCHINA CO-H

10.56

-0.1890359

62814232

CHINA SHENHUA-H

28.35

1.25

24516418

PING AN INSURA-H

63.85

0.1568627

12060858

PRICE

DAY %

VOLUME

27.35

-0.5454545

9100300

7879129

SWIRE PACIFIC-A

1.536313

13249987

1.449275

0.6751055

137.8

5003860

2.109705 2.865762

14.54

HSBC HLDGS PLC

-3.24172

36.3 119

119.3

HONG KONG EXCHNG

68.65 13.64

CATHAY PAC AIR

CHINA LIFE INS-H

VOLUME

SUN HUNG KAI PRO

CHEUNG KONG

CHINA MERCHANT

DAY %

MOVERS

2 22860

INDEX 22577.01 HIGH

22858.07

LOW

22461.56

52W (H) 23944.74 22450

(L) 18056.4 25-February

27-February

HANG SENG CHINA ENTERPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.91

85224000

CHINA PACIFIC-H

AIR CHINA LTD-H

5.98

-0.8291874

20491500

CHINA PETROLEU-H

8.73

0.4602992

126478526

3.3

-0.9009009

15842870

CHINA RAIL CN-H

7.87

0.8974359

7178000

ANHUI CONCH-H

27.4

0.9208103

5984600

CHINA RAIL GR-H

4.12

3.517588

22534800

BANK OF CHINA-H

3.55

-0.5602241

401756054

CHINA SHENHUA-H

28.35

1.25

24516418

BANK OF COMMUN-H

5.93

-0.1683502

29952460

CHINA TELECOM-H

3.96

-0.7518797

60570100

BYD CO LTD-H

28.7

0.8787346

4583156

DONGFENG MOTOR-H

10.92

-1.265823

20068800

CHINA CITIC BK-H

4.78

25009215

GUANGZHOU AUTO-H

6.56

5.977383

13549909

CHINA COAL ENE-H

7.32

1.385042

29142230

HUANENG POWER-H

7.83

1.032258

10941928

CHINA COM CONS-H

7.21

0.8391608

17776377

IND & COMM BK-H

5.4

-0.1848429

226480921

CHINA CONST BA-H

6.18

0.1620746

233370871

JIANGXI COPPER-H

18.42

2.10643

10323000

CHINA COSCO HO-H

2.040816

8539032

PETROCHINA CO-H

10.56

-0.1890359

62814232

22.75

0.6637168

30833272

PICC PROPERTY &

10.7

-0.742115

17926000

CHINA LONGYUAN-H

6.85

1.032448

14893500

PING AN INSURA-H

63.85

0.1568627

12060858

CHINA MERCH BK-H

16.4

0.1221001

20515068

SHANDONG WEIG-H

7.18

-0.4160888

6272000

24.5

0.204499

1683900

ALUMINUM CORP-H

CHINA LIFE INS-H

CHINA MINSHENG-H

10.34

2.173913

29396533

SINOPHARM-H

CHINA NATL BDG-H

11.48

2.317291

21102840

TSINGTAO BREW-H

46.4

-2.212856

1381000

CHINA OILFIELD-H

15.66

1.820546

10057700

WEICHAI POWER-H

29.85

4.188482

3896680

NAME

PRICE

DAY %

VOLUME

YANZHOU COAL-H

11.5

1.410935

18468265

ZIJIN MINING-H

2.65

1.532567

63235989

ZOOMLION HEAVY-H

10.1

0.3976143

12897173

3.011094

6905552

ZTE CORP-H

MOVERS

2 11390

INDEX 11144.34 HIGH

11400.37

LOW

11056.71

52W (H) 12354.22 11050

(L) 8987.76 25-February

27-February

SHANGHAI SHENZHEN CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.93

2.090592

182134519

CITIC SECURITI-A

13.95

3.028065

134239039

AIR CHINA LTD-A

5.36

-0.9242144

18302096

CSR CORP LTD -A

4.69

-1.054852

ALUMINUM CORP-A

4.84

0.4149378

16425079

DAQIN RAILWAY -A

7.59

18.24

0.8849558

21357289

DATANG INTL PO-A

4.12

NAME

ANHUI CONCH-A

NAME

PRICE

DAY %

VOLUME

SAIC MOTOR-A

16.39

0.6138735

27662207

43536019

SANY HEAVY INDUS

11.28

1.713255

27750834

-0.3937008

35014513

SHANDONG GOLD-MI

35.1

1.007194

8758547

0.243309

8120620

SHANG PHARM -A

13.18

-2.658789

16422437 158815735

BANK OF BEIJIN-A

9.3

0.7583965

50727542

EVERBRIG SEC -A

14.59

4.662841

27748416

SHANG PUDONG-A

10.39

0.5808325

BANK OF CHINA-A

2.98

0.6756757

49200105

GD POWER DEVEL-A

2.68

-0.3717472

26420268

SHANGHAI ELECT-A

4.02

-0.248139

3640973

BANK OF COMMUN-A

4.88

-0.8130081

108382975

GEMDALE CORP-A

6.99

4.017857

92577075

SHANXI LU'AN -A

20.9

2.150538

12607352

11.24

1.99637

16443255

GF SECURITIES-A

15.41

3.145917

46180971

SHANXI XINGHUA-A

37.03

-0.6972379

2754027

37719665

GREE ELECTRIC

27.93

1.37931

11561668

SHANXI XISHAN-A

12.57

1.126307

13308178 40418247

BANK OF NINGBO-A BAOSHAN IRON & S

4.99

2.464066

BYD CO LTD -A

24.9

0.362757

3633154

GUANGHUI ENERG-A

18.24

2.299495

25247281

SHENZEN OVERSE-A

6.5

3.174603

CHINA CITIC BK-A

4.61

-0.2164502

22274408

HAITONG SECURI-A

11.85

3.49345

148826680

SICHUAN KELUN-A

67.29

-1.449912

1149239

CHINA CNR CORP-A

4.67

-1.684211

47842507

HANGZHOU HIKVI-A

32.67

-0.6990881

3935050

SUNING APPLIAN-A

6.55

47130787

CHINA COAL ENE-A

7.47

0.8097166

8199650

HENAN SHUAN-A

69.2

1.021898

1817362

TASLY PHARMAC-A

63.7

1.14322

1911760

19.55

3.275225

22050295

TSINGTAO BREW-A

34.03

-2.240735

2106781

CHINA CONST BA-A

4.63

1.091703

33713975

HONG YUAN SEC-A

CHINA COSCO HO-A

4.14

0.4854369

8703516

HUATAI SECURIT-A

10.52

2.434275

89749376

WEICHAI POWER-A

24.73

1.518883

5822851

CHINA CSSC HOL-A

23.98

1.224145

8669001

HUAXIA BANK CO

10.8

0.7462687

42109646

WULIANGYE YIBIN

24.54

-0.3249391

23073835

CHINA EAST AIR-A

3.34

11915690

IND & COMM BK-A

4.18

1.95122

83121377

YANGQUAN COAL -A

14.66

2.445842

12104294

INDUSTRIAL BAN-A

18.92

3.557745

116197193

YANTAI WANHUA-A

17.04

3.335355

11981538

CHINA EVERBRIG-A

3.33

1.215805

158389231

CHINA INTL MAR-A

13.02

1.639344

6768259

INNER MONG BAO-A

32.66

-0.2138711

16682166

YANZHOU COAL-A

17.3

0.6984866

4094274

CHINA LIFE INS-A

18.45

0.9299781

31480085

INNER MONG YIL-A

26.85

-0.1116071

6752834

YUNNAN BAIYAO-A

75.5

-0.6840305

2307427

CHINA MERCH BK-A

12.84

1.022817

144114992

INNER MONGOLIA-A

4.92

-0.4048583

29965390

ZHONGJIN GOLD

15.2

0.795756

14669870

CHINA MERCHANT-A

13.77

8.425197

100516725

JIANGSU HENGRU-A

32.68

-1.298701

4262979

ZIJIN MINING-A

3.67

0.8241758

38691948

CHINA MERCHANT-A

27.02

5.341131

24663583

JIANGSU YANGHE-A

80.1

-0.1744766

3521040

ZOOMLION HEAVY-A

9.08

-0.110011

47485745

CHINA MINSHENG-A

9.83

1.759834

368180600

JIANGXI COPPER-A

23.77

0.9770603

12195831

ZTE CORP-A

9.44

-0.8403361

27128164

JINDUICHENG -A

11.83

1.024765

5627986

JIZHONG ENERGY-A

14.79

2.070393

17751355

8.1

0.7462687

18240022

CHINA OILFIELD-A

CHINA NATIONAL-A

16.88

2.117362

5564387

CHINA PACIFIC-A

19.6

1.083032

21061353

KANGMEI PHARMA-A

16.63

-3.928365

29091591

176.77

-0.3382759

3415815

CHINA PETROLEU-A

7.09

-0.5610098

24736614

KWEICHOW MOUTA-A

CHINA RAILWAY-A

5.49

1.104972

19248798

LUZHOU LAOJIAO-A

31.8

0.56926

7522419

CHINA RAILWAY-A

2.95

34158237

METALLURGICAL-A

2.12

0.4739336

21739902

2.52

0.3984064

11611805

MOVERS 200

22.51

1.032316

11917385

5.3

1.145038

50019567

PANGANG GROUP -A

3.61

1.120448

41629573

CHINA SOUTHERN-A

3.71

0.5420054

20224159

PETROCHINA CO-A

8.96

0.7874016

20732116

HIGH

2628.09

CHINA STATE -A

3.76

1.347709

92005027

PING AN BANK-A

21.02

0.8153477

70067663

LOW

2567.59

CHINA UNITED-A

3.52

0.8595989

61197288

PING AN INSURA-A

45.2

0.5114521

31344636

11.32

4.621072

87903095

POLY REAL ESTA-A

12.38

3.85906

71625216

7.1

-0.8379888

25345586

QINGDAO HAIER-A

12.9

0.1552795

9049271

8.38

0.9638554

19533503

QINGHAI SALT-A

26.53

-0.2631579

4742015

PRICE DAY %

VOLUME

PRICE DAY %

VOLUME

CHINA SHIPBUIL-A

CHINA VANKE CO-A CHINA YANGTZE-A CHONGQING CHAN-A

16 2630

INDEX 2594.677

NINGBO PORT CO-A

CHINA SHENHUA-A

52W (H) 2791.303 (L) 2102.135

2560

25-February

27-February

FTSE TAIWAN 50 INDEX NAME ACER INC

NAME

10978379

TAIWAN MOBILE CO

81.5

-1.092233

11648646

TPK HOLDING CO L

FUBON FINANCIAL

1.910828

20194064

TSMC

4992287

HON HAI PRECISIO

81.7

30722955

93171519

HOTAI MOTOR CO

226

1.345291

339728

HTC CORP

277

0.1808318

9927554

WISTRON CORP

17.35

8399779

YUANTA FINANCIAL

800 -0.2493766

1315571

YULON MOTOR CO

36298616

FORMOSA PLASTIC

24.6

1.234568

19222139

FOXCONN TECHNOLO

0.5434783

8167477

ASUSTEK COMPUTER

360

3.151862

AU OPTRONICS COR

12.9

CATCHER TECH

134 -0.3717472

4475570

CATHAY FINANCIAL

37.6

ASIA CEMENT CORP

0.669344

30901584

HUA NAN FINANCIA

CHANG HWA BANK

17.35

12329499

LARGAN PRECISION

CHENG SHIN RUBBE

80.6

0.373599

7860357

LITE-ON TECHNOLO

45.75

5.293441

CHIMEI INNOLUX C

16.4

2.5

144260261

MEDIATEK INC

333.5

1.060606

6726067

CHINA DEVELOPMEN

8.83 -0.5630631

41903062

MEGA FINANCIAL H

24.45

0.204918

29608486

CHINA STEEL CORP

27.2

-0.729927

21235707

NAN YA PLASTICS

56.9

-2.568493

5497434

CHINATRUST FINAN

17.55

0.862069

20349939

PRESIDENT CHAIN

164

1.234568

2244886

92.2 -0.4319654

CHUNGHWA TELECOM

PRICE DAY %

-1.960784

2.718447

ADVANCED SEMICON

NAME

26.45

63.3 -0.1577287

10354207

QUANTA COMPUTER

20.75

1.219512

7924697

SILICONWARE PREC

31.85

1.433121

8735015

DELTA ELECT INC

7321086

110.5

-0.896861

4006147

SINOPAC FINANCIA

13.5

0.3717472

15486526

FAR EASTERN NEW

32.9 -0.1517451

4115281

SYNNEX TECH INTL

0.3344482

3591660

FAR EASTONE TELE

68.7

0.7331378

9546788

TAIWAN CEMENT

38.05

0.5284016

8088396

FIRST FINANCIAL

18.9

15325782

17 -0.8746356

7913790

FORMOSA CHEM & F

75.6

-2.072539

4949294

TAIWAN FERTILIZE

FORMOSA PETROCHE

82.5 -0.1210654

1601651

TAIWAN GLASS IND

71.9

-1.428571

562

1.811594

4962209 4874001

104.5

0.9661836

80997871

UNI-PRESIDENT

55.5

1.092896

17552142

UNITED MICROELEC

11.1

28619156

33 -0.3021148

8616641

15.35 -0.9677419

21474569

53.1

-1.301115

4526317

9910877

COMPAL ELECTRON

TAIWAN COOPERATI

VOLUME

103.5

2052787

28.05 -0.8833922

1185619

MOVERS

7 5595

INDEX 5524.13 HIGH

5591.06

LOW

5497.81

52W (H) 5639.93 5490

(L) 4719.96 23-February

26 -February

February 28, 2013 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 32.6

49.8

32.3

49.4

32.0

49.0

18.8 18.7 18.6

Max 32.5

Average 32.197

Max 36.6

Average 36.314

Min 31.8

31.7

Last 32.1

Min 35.9

Max 49.6

Average 48.920

PRICE

Min 18.4

Last 18.48

20.3

20.7

36.2

20.2

20.6

36.0

20.1

20.5

Max 20.35

Average 20.164

DAY %

YTD %

(H) 52W

(L) 52W

0.37784735

0.269599914

108.4599991

BRENT CRUDE FUTR Apr13

113.1

0.346020761

3.704382908

118.2900009

GASOLINE RBOB FUT Mar13

298.86

0.234773276

8.141554494

316.9100046

222.4999905

GAS OIL FUT (ICE) Apr13

956.5

0.052301255

3.967391304

1010.5

800.25

NATURAL GAS FUTR Apr13

3.457

0.028935185

1.586835145

3.997000217

3.032000065

304.32

0.379325131

0.875101892

331.3199997

254.9000025

Gold Spot $/Oz

HEATING OIL FUTR Mar13

1612.09

1.346

-3.1464

1796.08

1527.21

Silver Spot $/Oz

29.245

1.3516

-2.8728

37.4775

26.1513

Platinum Spot $/Oz

1620.2

1.6054

6.7501

1742.8

1379.05

Palladium Spot $/Oz

743.55

1.7196

6.273

777.38

553.75

LME ALUMINUM 3MO ($)

2023

-0.687285223

-2.411963338

2361.5

1827.25

7858.5

0.287136294

-0.914134409

8702.75

7219.5

2099

0.478697942

0.913461538

2230

1745

16645

-0.3591739

-2.432590856

20390

15236

15.69

-0.570342205

1.323861802

16.95000076

15.22999954

692.75

-0.287873336

-1.071046055

838

520.25

WHEAT FUTURE(CBT) May13

712.75

0.246132208

-9.520787052

938

665

SOYBEAN FUTURE May13

1432.25

0.034922298

2.358406289

1639.5

1218.75

143.5

0.279524808

-2.181322427

216.9499969

137.5999908

LME COPPER 3MO ($) 3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) May13 May13

COFFEE 'C' FUTURE May13

Min 20.05

Last 20.15

20.0

Max 20.8

Average 20.570

Min 20.45

Last 20.6

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 %

1.0204 1.5108 0.9313 1.3085 91.75 7.9902 7.7577 6.227 53.69 29.83 1.2396 29.658 40.722 9681 93.632 1.21862 0.86612 8.1504 10.456 120.07 1.03

-0.4973 -0.6575 -0.1289 0.0076 0.218 0.0088 0.0193 0.0418 0.7543 0.067 -0.0161 0.1012 0.081 0.2686 0.7049 -0.1436 -0.6708 0.0135 -0.0143 0.1832 -0.0097

YTD %

(H) 52W

-1.6766 -6.6024 -1.7073 -0.7961 -6.158 -0.0876 -0.0915 0.0578 2.4306 2.5142 -1.4682 -2.1074 0.695 1.1569 -4.5978 -0.9141 -5.8537 0.8233 0.7116 -5.4135 -0.0097

1.0857 1.6381 0.9972 1.3711 94.77 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 97.728 1.25692 0.88151 8.4957 10.9254 127.71 1.0314

0.9582 1.5073 0.8936 1.2043 77.13 7.9824 7.7498 6.2105 48.8525 29.63 1.2152 28.913 40.54 9020 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029

MACAU RELATED STOCKS NAME

(H) 52W

(L) 52W

3.67

-1.608579

16.50793

3.94

2.29

1945095

CROWN LTD

11.74

1.206897

10.02812

12.12

8.06

1123687

ARISTOCRAT LEISU

PRICE

DAY % YTD %

VOLUME CRNCY

SUGAR #11 (WORLD) May13

18.08

0.166204986

-7.755102041

24.56999969

17.67000008

AMAX HOLDINGS LT

0.072

1.408451

2.857142

0.105

0.055

2230000

82.73

1.099841134

9.056156077

92.62999725

68.18999481

BOC HONG KONG HO

25.35

-0.5882353

5.18672

27.1

20.8

19631558

0.36

1.408451

35.84906

0.42

0.215

118000

6.3

0.4784689

5.175296

6.74

2.8

19000

22.8

1.785714

-1.298703

25.6

14.124

26169669

CENTURY LEGEND CHEUK NANG HLDGS CHINA OVERSEAS

WORLD STOCK MARKETS - Indices

CHINESE ESTATES

11.7

1.5625

-3.540305

12.964

7.697

104084

CHOW TAI FOOK JE

11.32

-1.393728

-9.003212

13.68

8.4

6371315

EMPEROR ENTERTAI

2.01

6.349207

2.15

1.1

655000

FUTURE BRIGHT

2.14

75.40983

2.15

0.465

13668000

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

13900.13

0.8412549

6.074342

14081.58

12035.08984

NASDAQ COMPOSITE INDEX

3129.647

0.4298755

3.647386

3213.595

2726.68

HANG SENG BK

FTSE 100 INDEX

6295.35

0.3972608

6.740469

6412.44

5229.76

HOPEWELL HLDGS

DAX INDEX

7629.59

0.427531

0.2259436

7871.79

5914.43

HSBC HLDGS PLC

NIKKEI 225

11253.97

-1.270659

8.261426

11662.51953

8238.96

HANG SENG INDEX

22577.01

0.2545328

-0.3526965

23944.74

18056.4

CSI 300 INDEX

2594.677

1.054761

2.842904

2791.303

TAIWAN TAIEX INDEX

7897.98

0.2167265

2.57783

KOSPI INDEX

2004.04

0.201499

0.3500158

S&P/ASX 200 INDEX

GALAXY ENTERTAIN

32.1

5.766061

35.7

16.94

12441021

123.6

0.6514658

4.128057

129

99.2

1418541

33.8

1.501502

1.654135

35.3

19.049

1261094

-0.1782531

3.321029

88.45

59.8

14040958

HUTCHISON TELE H

3.61

1.404496

3.88

2.98

1446000

LUK FOOK HLDGS I

24.95

-0.9920635

2.2541

30.05

14.7

1667253

MELCO INTL DEVEL

12.04

1.176471

33.6293

13.96

5.12

3488000

2102.135

MGM CHINA HOLDIN

18.48

-1.387407

31.81169

10.04

6748252

8170.72

6857.35

MIDLAND HOLDINGS

3.44

0.5847953

-7.027028

3.249

2328000

2057.28

1758.99

NEPTUNE GROUP

0.161

-1.829268

5.921056

0.226

0.084

16920000

NEW WORLD DEV

13.76

3.770739

14.47587

15.12

7.95

24260265

SANDS CHINA LTD

36.3

2.109705

6.921942

39.95

20.65

13249987

SHUN HO RESOURCE

1.61

1.67

1.03

5036.592

0.6600493

8.338261

5106.6

3985

4716.391

1.14432

9.259511

4719.46

3635.283

FTSE Bursa Malaysia KLCI

1624.72

0.03324755

-3.802953

1699.68

1526.6

SHUN TAK HOLDING

4.2

0.9615385

0.2386621

4.65

2.56

2695001

NZX ALL INDEX

925.708

0.8612959

4.949253

926.991

745.911

SJM HOLDINGS LTD

20.15

1.767677

11.94444

22.15

12.34

5079000

PHILIPPINES ALL SHARE IX

4146.53

0.04004951

12.09928

4176.94

3238.77

SMARTONE TELECOM

14.26

3.034682

1.27841

17.5

13.16

5967141

20.6

0.4878049

-1.670648

25.5

14.62

3755153

JAKARTA COMPOSITE INDEX

20.4

(L) 52W

COTTON NO.2 FUTR May13

NAME

18.4

36.4

92.98

CORN FUTURE

Average 18.570

20.8

WTI CRUDE FUTURE Apr13

LME ZINC

Max 18.72

CURRENCY EXCHANGE RATES

NAME

METALS

48.6

Last 48.9

20.4

COMMODITIES ENERGY

Min 48.65

36.6

35.8

Last 36.3

18.5

HSBC Dragon 300 Index Singapor

629.65

-1.12

1.38

STOCK EXCH OF THAI INDEX

1531.74

0.09279105

10.04432

1547.33

1099.15

HO CHI MINH STOCK INDEX

465.72

0.1440705

12.56616

497.87

LAOS COMPOSITE INDEX

1445.65

0.6376654

19.00607

1455.82

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

WYNN MACAU LTD ASIA ENTERTAINME

3.77

-4.071247

23.20262

6.95

2.4

153118

BALLY TECHNOLOGI

47.64

-0.6465068

6.553346

51.16

41.74

451686

372.39

BOC HONG KONG HO

3.25

-3.846154

5.863194

3.55

2.68

6314

907.04

GALAXY ENTERTAIN

4.08

-1.686747

2.77078

4.57

2.25

50000 3408337

INTL GAME TECH

15.89

1.339286

12.13832

17.37

10.92

JONES LANG LASAL

95.19

0.5917785

13.40243

100.33

61.39

333080

LAS VEGAS SANDS

50.33

-0.1586987

9.033796

58.3216

32.6127

7428921

MELCO CROWN-ADR

18.64

-1.843075

10.68884

21.475

9.13

5323212

MGM CHINA HOLDIN

2.44

6.086957

31.89189

2.44

1.36

392

MGM RESORTS INTE

12.11

-0.6562756

4.037798

14.8

8.83

10202941

SHFL ENTERTAINME

15.75

0.3824092

8.62069

18.77

11.75

177322

SJM HOLDINGS LTD

2.56

10.82251

2.85

1.65

1020

WYNN RESORTS LTD

115.5

-0.05192108

2.675795

129.6589

84.4902

1387543

AUD HKD

USD

14 |

business daily February 28, 2013

Opinion

The cacophony of the world Dominique Moisi

Professor at L’Institut d’études politiques de Paris, is Senior Adviser at the French Institute for International Affairs

n his masterpiece Diplomacy, Henry Kissinger describes, probably too idyllically, the international balance-of-power system that, following the Congress of Vienna in 1814-1815, produced what came to be called the “Concert of Europe”. As Kissinger describes it, after the Napoleonic Wars, “There was not only a physical equilibrium, but a moral one. Power and justice were in substantial harmony.” Of course, the concert ended in cacophony with the outbreak of World War I in the summer of 1914. Today, after the brutality of the first half of the twentieth century, the temporary bipolarity of the Cold War, and America’s brief post-1989 hyperpower status, the world is once again searching for a new international order. Can something like the Concert of Europe be globalided? Unfortunately, global cacophony seems more probable. One obvious reason is the absence of a recognised and accepted international referee. The United States, which best embodies ultimate power, is less willing – and less able – to exercise it. And the United Nations, which best embodies the principles of international order, is as divided and impotent as ever. But, beyond the absence of

a referee, another issue looms: the wave of globalisation that followed the end of the Cold War has, paradoxically, accelerated fragmentation, affecting democratic and nondemocratic countries alike. From the collapse of the Soviet Union, Yugoslavia’s violent self-destruction, and Czechoslovakia’s peaceful divorce to today’s centrifugal pressures in Europe, the West, and the major emerging countries, fragmentation has been fundamental to international relations in recent decades.

forces, states, and non-state actors are all involved, and their goals are complex and sometimes contradictory, with no universal commitment to preserving the status quo. The U.S. may be intent on creating a transatlantic trade-and-investment pact with Europe, which would make a political statement to

Growing fragmentation The information revolution has created a more global, interdependent, and transparent world than ever. But this has led, in turn, to an anxious, balkanizing quest for identity. This effort to recover uniqueness is largely the cause of the international system’s growing fragmentation. In the Concert of Europe, the number of actors was limited, and they were mostly states, whether national or imperial. Essential values were widely shared, and most actors favoured protecting the existing order. In today’s world, by contrast, the nature of the actors involved is no longer so clear. Transnational

The cacophony of the world has replaced the concert of Europe. And this may very well be the case for the foreseeable future

the world that the West writ large constitutes the universal normative reference point. But does such a West exist? In our era of fragmentation, there is a more powerful and dynamic American West, a globally more problematic European West (itself fragmented between a prosperous north and an economically lagging south), and even a British West and, in Japan, an Asian West. The concept of the BRICs (Brazil, Russia, India, and China) may have been an astute branding tool. But, aside from its members’ high growth rates, has it had any real significance? Indeed, China is clearly in a category of its own, as a source of perceived (or real) risk to its regional environment. If the BRICs’ growth slows (as has begun to happen), the concept’s artificiality will become widely apparent. What unites emerging powers today is more their denial of international responsibilities than their joint diplomatic efforts. Fragmentation also affects societies internally. Deep partisan divisions – whether over the role of government or social/cultural issues – are leading to near-paralysis in democratic societies like the U.S. In non-democratic societies, they can lead to

revolution and violent power struggles. This has been the case in much of the Arab world since late 2010. Even power itself is more fragmented than ever. Indeed, Moises Naim proclaims its demise in his latest book, The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being in Charge Isn’t What It Used To Be. While Naim’s conclusion may be premature, he is right about one thing: “Power no longer buys as much as it did in the past.” It is “easier to get, harder to use – and easier to lose.” Some analysts maintain, reassuringly, that rapprochement between Asia and the West is possible, given symbiosis between Western democracy and authoritarian Confucianism. This is Kishore Mahbubani’s argument in his book The Great Convergence. But the harmony stemming from the encounter between different cultures and systems is nowhere near – and will not be as long as the rule of law has not taken hold in the emerging world and a culture of modesty has not made headway within the plural West. The cacophony of the world has replaced the concert of Europe. And this may very well be the case for the foreseeable future. © Project Syndicate

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 28, 2013 business daily | 15

OPINION

Getting rich is hard in wires age of China, Abenomics Business

Leading reports from Asia’s best business newspapers

Yomiuri Shimbun Japan’s business community has welcomed the government’s decision to nominate Asian Development Bank President Haruhiko Kuroda as the next governor of the Bank of Japan. “He [Mr Kuroda] has many contacts overseas and is the best choice to be governor of the bank. As he provided strong leadership in the ADB, I think this choice is very good,” Hiromasa Yonekura, chairman of the Japan Business Federation (Keidanren), was quoted as saying. Mr Kuroda was vice minister for international affairs in the Finance Ministry before assuming the ADB post.

Myanmar Times China Union Pay and Myanmar Payment Union began offering payment services to foreign nationals, government officials announced at a press conference thisweek,followingaMemorandum of Understanding signed on November 24. U Than Nyein, chairman of Myanmar’s Central bank, said that local banks need to upgrade payment systems in anticipation of hosting the Southeast Asian Games in December 2013. “We have to try to make our payment systems more secure in the trading sector and services sector,” he was quoted as saying.

Straits Times All eight directors of Fraser & Neave Ltd who saw through the divestment of associate Asia Pacific Breweries and the takeover of F&N by Thai tycoon Charoen Sirivadhanabhakdi have stepped down. Chairman Lee Hsien Yang and the other seven independent directors resigned from the board yesterday. They had earlier indicated they would resign en masse after the close of Mr Charoen’s offer to give the billionaire a free hand as he takes over the company. Mr Charoen’s son Thapana Sirivadhanabhakdi has been appointed to the board.

Bangkok Post Prime Minister Yingluck Shinawatra led a government roadshow to Hong Kong to try to lure more investment into Thailand. Ms Yingluck is scheduled to meet with top management of Hong Kong’s banking and investment sectors. Thailand’s economic growth for 2012 stood at 6.4 percent, and the economy is expected to grow between 5 and 6 percent this year, Ms Yingluck was quoted as saying during a meeting with businessmen. The Thai government is planning to spend 17 percent of GDP on infrastructure development projects to strengthen trade competitiveness, she added.

William Pesek

Bloomberg View columnist

he life of Park Geun Hye, South Korea’s just-inaugurated first female president, has so far been bookended by two larger-than-life men of debatable success. The first is her father, Park Chung Hee, the dictator who ruled the nation for 18 years until his assassination in 1979. The second is Lee Myung Bak, her predecessor who spent the last five years in the Blue House, Korea’s presidential residence, and a fellow member of her New Frontier Party. Park must deal with their shortcomings in reverse. The immediate challenge is to be truer to her party’s name than Lee ever was. Lee left office this week with an approval rating in the 20s, an economy burdened by record household debt, a widening income gap, a strong currency that is hurting export competitiveness, relations with Japan frayed and North Korea raising hell around the globe. Park also must eventually reckon with the legacy of her father’s era. The rapid growth of his time was fuelled by cheap exports, easy credit, protection from foreign markets and the family-led conglomerates that still dominate. Today’s voters are clamouring for a more balanced and egalitarian economy and an exit strategy from the past. They literally want a new frontier. How well Park addresses the challenges posed by these two political bookends will say much about where Korea finds itself decades from now. Meanwhile, China’s shadow is growing, Southeast Asia’s upstarts are coming into their own and even long-time rival Japan is undergoing a bit of shock therapy as new Prime Minister Shinzo Abe acts to boost growth.

Deserved praise The praise heaped Korea’s way since the 1997-1998 Asian financial crisis is well deserved. When Iceland crashed a decade later, hedge funds figured Asia’s fourth-biggest economy would be next. Bad call. Korea is also a role model for emerging nations looking to avoid the so-called middleincome trap, where per-capita income gains stall out at around the US$10,000 mark. But does Korea now face a higher-income trap? Can it revamp its model fast enough to take its economy to the next level? Korea is seeing the commoditisation of the things it has long manufactured, such as cars, electronics and ships. It harnessed growth in those industries to catch up to the developed world. Now that it has arrived, Korea must change

Park Chung Hee, South Korea president

Korea has proven its resilience and ability to write new chapters in its history time and time again. It needs to surprise the world anew. President Park, too

Monday returned to the Blue House, pledged to rein in the huge conglomerates – or “chaebol,” which were born in her father’s time – and to aid small-to-medium-size companies. Park Chung Hee’s support created a bit of a monster with the chaebol. Their tentacles spread everywhere and hogged up growth in unexpected ways. Yet on February 21, when his daughter listed her top priorities of increased welfare spending and vague platitudes about improving information-technology and science research, it sounded disturbingly like the 1960s – as if the ideas came from her father’s administration.

Surprising us its approach to raise incomes for its 50 million people.

Luxury market In the 1960s, when Park Chung Hee came to power, war- exhausted Korea was among the poorest countries anywhere, with per-capita income lower than many African nations. Today, income is on the cusp of US$30,000 per year, new skyscrapers pop up in Seoul every couple of months, and luxury brands from Prada to Rolex are chasing adherents to the swanky Gangnam lifestyle. What makes Korea special is that it has gotten where it is by combining rapid growth with democracy. It may have begun with military leader Park, whose legacy is marred by torture and censorship. But this year a Korea led by a new, popularly elected Park is likely to grow by 3.3 percent. In a region blighted by all too many authoritarian governments or one-party states parading as democracies, this is unique. But the question remains, what’s next? Park, who on

Let’s give Park some time to surprise us. Yet doing so would be to upend Lee’s policies. Park’s team has not said anything that suggests they understand that playing economic catch-up is very different from devising new ways to grow and prosper, as Korea must. In years past, Korea could watch what others did. Here, think Hyundai Motor Co. copying Toyota Motor Corp.

and Samsung Electronics Co. emulating Sony Corp. and Apple Inc. Once you join the majors, you must find your own formula for innovation and experimentation. Korea is still at the drawing board. The corporate culture must focus less on social cohesion, hire more women and tap global talent. It must instil a greater willingness to fail here and there to learn what works and what doesn’t. Park should cultivate a bigger venturecapital movement and offer tax incentives for start-ups. Championing small-to-midsize enterprises would increase productivity, lead to a more vibrant service sector and narrow the income gap, which is driving many households to take on too much debt. The education system must be less about exams, cram schools and striving for a job at one of the chaebol and more about critical thinking, questioning authority and fostering an entrepreneurial spirit. Korea has proven its resilience and ability to write new chapters in its history time and time again. It needs to surprise the world anew. President Park, too. Bloomberg View

16 |

business daily February 28, 2013

CLOSING EU chamber of commerce to open this year

China letter urges political reforms

The city could have a European Chamber of Commerce still within 2013, said Franklin Willemyns, president of the France Macau Business Association. “It is a project promoted by the seven European organisations in Macau and we hope it can come to life this year,” he said, quoted by the Portuguese news agency Lusa. The chamber would also be open for countries which do not yet have a presence in the Macau market, Mr Willemyns said. The Office of the European Union to Hong Kong and Macau has already expressed its support for the initiative.

Some of China’s most prominent scholars, journalists and activists have released an open letter urging leaders to implement political reforms. More than 140 people signed the open letter urging Beijing to ratify an international human rights treaty. Beijing signed the International Covenant on Civil and Political Rights in 1998 but the Chinese parliament has never ratified the document. The letter was posted on several prominent Chinese websites and blogs. It comes just days before Chinese leaders gather for the annual parliamentary session in Beijing, where Communist Party leader Xi Jinping will be installed as China’s president.

SJM full-year AIA earnings nearly double on Asian growth profit up 27 pct Casino operator announces special dividend Michael Grimes

michael.grimes@macaubusinessdaily.com

SJM’s flagship property Grand Lisboa

asino developer and operator SJM Holdings Ltd yesterday announced a final dividend of HK$0.50 (US$0.06) per share and a special dividend of HK$0.30 per share for the year ended December 31. The dividends were respectively 16 percent and 34 percent higher than a year earlier. That was on the strength of a 27 percent increase in full-year profit. Net income rose to HK$6.75 billion (US$870 million) from HK$5.3 billion in 2012, according to a statement to the Hong Kong Stock E x c hange yes t e rday. It beat a consensus estimate of HK$6.6 billion from 25 analysts compiled by Bloomberg. Full-year adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 10 percent to HK$7.6 billion. “SJM’s market share remained steady and was gradually improving,” in the fourth quarter, wrote Kenneth Fong, a Hong Kong-based analyst at J.P. Morgan ahead of the earnings announcement. SJM closed 1.8 percent

higher at HK$20.15 in Hong Kong yesterday. The stock climbed 12 percent this year, outperforming the benchmark Hang Seng Index. The company, founded by former Macau gaming monopolist Stanley Ho Hung Sun is now pitted against five other concessionaires and sub-concessionaires. A measure of competition was legislated in 2002 and came into practical force in 2004 when Sands Macao owned by Las Vegas Sands Corp. opened. SJM still licenses 20 of the 35 casinos in Macau but only receives the full economic benefit of such licensing from four venues: Casino Grand Lisboa, Casino Lisboa, Casino Oceanus and Casino Jai Alai. With the others it has to share the revenue with third party managements. In October last year SJM received a government land grant for a resort on Cotai. SJM said in filing at the time it plans to build up to 521,435 square metres (5.61 million sq. feet) of floor space area on its Cotai site. The company has not confirmed how much it will invest in the project. With Bloomberg News

Value of new business rose 27 percent, the insurer says

IA Group Ltd, the third-largest Asiabased insurer by market value, reported higher-than-expected 89 percent growth in net income last year, helped by market value gains in investments and product improvements. Profit rose to US$3 billion in the 12 months to November 30, from US$1.6 billion a year earlier, the Hong Kong-based company said in a statement to the stock exchange yesterday. The AIA Macau branch is the city’s biggest insurance company by market share. The value of new business rose 27 percent to a record US$1.19 billion, the first time it topped US$1 billion in at least four years. Chief executive Mark Tucker has been focusing on the indicator of projected future profitability of new policies after AIA was hurt by financial trouble at former parent American International Group Inc. and Prudential Plc’s attempted takeover in 2010. “We have built the momentum,” said Mr Tucker in yesterday’s statement. “There is a lot more to come.” Since July 2010, AIA has more than doubled its annual new business value and lifted its embedded value, used to assess the economic worth of life insurers, by 50 percent over 2009, it said yesterday. The shares have risen 67 percent over the price of AIA’s October 2010 initial public offering, beating the about 8 percent slide in the Hang Seng Finance Index.

AIA completed the US$1.8 billion purchase of ING Groep NV’s Malaysia business in December. The addition will start to contribute to AIA’s firstquarter operating numbers, Mr Tucker said. AIA, which operates in 16 Asian markets after entering Sri Lanka last year, has received provisional approval to open a Myanmar representative office later this year, one of the first foreign

companies to do so. The company also plans to expand its business here. In December, Chris Ma Chuk Ho, AIA Macau chief executive, told Business Daily the branch plans to consolidate growth by increasing the size of its sales team by more than one-third in 2013. AIA Macau currently has about 1,000 agents but plans “to employ 360 new agents to build a quality team”. T.A./With Bloomberg News

Expansion plans AIA shares rose 4.1 percent, the most since September 7, to close at HK$32.85 after the results announcement. Stocks in AIA’s six-largest markets advanced a weighted average of 12 percent in the second half, adding to the 5.5 percent gain in the previous six months, analysts led by van Veen wrote in a Feb. 20 report.

AIA reported strong growth in almost all its major markets