Macau Business Daily, February 5, 2013 by Business Daily

Housing price risks looming A

drastic decline in the property market here could be looming, experts warned, after former and current Hong Kong officials warned residents in the neighbouring region to be cautious. The head of the Hong Kong Monetary Authority said yesterday that many homebuyers could

Year I Number 214 Tuesday February 5, 2013 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP 6.00 www.macaubusinessdaily.com

face high risks when the currently low interest rates rebounded. This risk also exists in Macau, an economist and a realtor said, as residents have invested in property as a vehicle against high inflation, which pushed prices to grow faster than in Hong Kong.

With the United States Federal Reserve saying it will raise interest rates when the jobless outlook improves, the risk of a sharp increase in mortgage costs is rising. More measures could be necessary to cool down the market, experts said. More on page 3

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HANG SENG INDEX 23930

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Make room for more visitors

Buyers still waiting for yen decline profit

Experts do not agree on whether the new Beijing leadership will actually restrict the individual travel scheme for mainland Chinese coming to Macau. But they do believe the city is still far from saturation point. More than a magic number, the priority should be to make sure residents feel tourism has a positive impact, experts stressed.

With the Bank of Japan engaging in a new round of quantitative easing to boost inflation and economic growth, the yen has depreciated fast against the pataca. But the impact on the prices of Japanese goods here will only be felt much later, car and electronic appliance dealers warned. On the other hand, Macau residents are finding it more attractive to travel to Japan.

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CGD opens branch, Ngan seized assets Growing Parisian sticks to strategy dispute rages on dreams of tables

23780

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February 4

HSI - MOVERS Name

%Day

WANT WANT CHINA

2.54

NEW WORLD DEV

2.27

BELLE INTERNATIO

1.85

POWER ASSETS HOL

1.19

WHARF HLDG

1.16

PETROCHINA CO-H

-1.44

CHINA LIFE INS-H

-1.93

ALUMINUM CORP-H

-2.14

CHINA SHENHUA-H

-2.55

PING AN INSURA-H

-2.75

Source: Bloomberg

The decision by Caixa Geral de Depósitos SA to transform its offshore subsidiary into a new branch was just a formal change and there was no change in the Portuguese banking group’s strategy for Macau, the director said. Page 5

A court has thrown out the appeal by Ngan In Leng to retrieve assets that were seized over a deal to fund the construction of a Taipa housing project. But the prominent businessman won a case over another asset seizure attempt. Page 6

Gaming operator Las Vegas Sands Corp. will press ahead with construction of its new Cotai resort The Parisian without waiting for assurances from the government on how many gaming tables it will be given, the company’s president said. Page 7

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business daily February 5, 2013

macau

No magic number for tourist capacity City still has room for more visitors, despite talk of mainland visa restriction Vítor Quintã

vitorquinta@macaubusinessdaily.com

eijing has offered to restrict the individual travel scheme for mainland Chinese coming to Macau but experts are divided on whether any measures will actually be enforced. Even though there is no official figure for city’s maximum capacity for tourists, Macau is still far from saturation point, experts told Business Daily “If the city finds that it is having far more visitors that what it can take on, the [central] government will see to the adjustment of the flow of travellers from the mainland,” the director of the Central People’s Government Liaison Office here, Bai Zhijian, said on Saturday. Eilo Yu Wing Yat, coordinator of University of Macau’s Government and Public Administration programme, believes the new Chinese leadership might be preparing a visa policy review. Grant Govertsen of Union Gaming Research Macau disagrees: “I don’t think that they [the Beijing authorities] see any reason to restrict the visas”. The gaming analyst believes Mr Bai’s statement is likely linked to

Last year Macau welcomed over 28 million visitors, most of which from mainland China

the outcry in Hong Kong over crossborder parallel trade and the recent milk powder shortage. Mr Yu made the same connection. “The director of Liaison Office is giving the same explanation [as in

Hong Kong]. It’s a way to show that Beijing is paying attention to Macau’s problems,” the academic said. “We don’t think Macau has a visitation problem. There is no gridlock like in other major global cities,” Mr Govertsen said. Hotel occupancy rate has remained high – 82.8 percent in the first 11 months of 2012 – “but not higher than in Las Vegas for instance,” he added. “There is no magic number for tourist capacity,” Glenn McCartney, tourism management professor at the University of Macau, said. And even if there were, “the number of visitor arrivals does not tell us much on how many nights

they stay, how much money they spend,” he added. “People are the most important. Residents have to feel they are getting more benefits from a higher number of tourists or else they will become antagonistic towards visitors,” the scholar stressed. “It’s not in the city’s best interest to restrict the number of mainland visitors. They would be hurting themselves and the goal to become a world-class tourism destination,” Mr Govertsen said. Mr McCartney thinks otherwise: “Maybe we don’t need so many tourists. Mass tourism sometimes has a negative impact and is not sustainable”.

opinion

Sauce for the goose Pedro Cortés, lawyer cortes@macau.ctm.net

ome weeks ago two honourable members of the Legislative Assembly – who, by the way, were among those that got the most votes in the last elections – kicked up a fuss about what the chairman of the Macau Lawyers Association, Jorge Neto Valente, had said about qualifying to be a lawyer. I highly admire these legislators but, to be frank, the disrespectful words they used in responding to Mr Neto Valente only show that they may need to attend classes on the Basic Law to re-learn – which is quite different from reading – the general principles and get a better idea of what the second of the “two systems” is. The Macau Lawyers Association is not preventing anyone from becoming a lawyer

but, instead, regulating their profession so that those that are most competent can belong to it. In view of this, the two members of the Legislative Assembly must agree that candidates to become lawyers that fail to pass their examinations three times should accept that being a lawyer is not within their capabilities, and that they may as well try another profession. There are plenty of such people around. After a five-year wait, such people are likely to be more capable and, therefore, may again try to become a trainee lawyer and then a lawyer. This is rather similar to being elected to the Legislative Assembly: if a candidate fails in one election, he or she will have another opportunity four years later.

February 5, 2013 business daily | 3

MACAU ‘Unclear’ cultural heritage law slammed The aim and range of heritage to be protected by a new cultural heritage law remains “unclear” and “over-simplified”, legislators said during a Legislative Assembly third standing committee meeting yesterday. The bill has defined cultural heritage as property that deserves “special protection and promotion”, dividing it into movable, immovable and intangible heritage. Some assembly members suggested the protection of tangible and intangible heritage should be legislated separately, committee chairman Cheang Chi Keong told media. Government representatives have pledged to take the suggestion into consideration, he added.

Threat of rate rise hangs over real estate market A rebound in U.S. interest rates would have a calamitous impact on the property market here, observers say Tony Lai

tony.lai@macaubusinessdaily.com

ny rise in U.S. interest rates could do drastic damage to the property market here, observers say, echoing similar warnings given in Hong Kong. The chief executive of the Hong Kong Monetary Authority, Norman Chan Tak Lam, said yesterday that housing prices in Hong Kong were out of step with the city’s economy. Mr Chan warned that any rise in interest rates would threaten many people. He said he could not rule out more measures to rein in the property market. The chief executive of Midland Realty (Macau) Ltd, Ronald Cheung, told Business Daily: “This risk also exists in Macau, as the interest rate here is linked with the rate in the United States through the peg with the Hong Kong dollar.” Mr Cheung thinks the problem is that people have “false hopes” for housing prices and “blindly seek property as a vehicle against inflation” because interest rates are low. “When so many people rush into the market at the same time, the price shoots up to an extraordinary high,” he said.

If you fall down from the third floor you may not be dead, but if you fall from 60 floors you will surely be Ronald Cheung, chief executive, Midland Realty (Macau) Ltd

Growth in home prices last year was more rapid and significant here than in many other places Joey Lao Chi Ngai, chairman, Macao Association of Economic Sciences

The average price of housing rose by one-third last year

Hong Kong’s former financial secretary, Antony Leung Kam Chung, said last week that if interest rates in the United States rose, the property market in Hong Kong would implode like it did in the 1997 Asian financial crisis. The chairman of the Macao Association of Economic Sciences, Joey Lao Chi Ngai, told Business Daily: “The situation in Macau is a little bit more optimistic than in Hong Kong, as the property price here is not as high and crazy as there.” But Mr Lao warned:“Growth in home prices last year was more rapid and significant here than in many other places.” He added: “And the real estate markets in these two places remain very close, so Macau will be inevitably affected, whatever.”

More curbs sought Official data show the average price per square metre of residential space here rose by 33.4 percent last year to 60,064 patacas (US$7,508). “I don’t see [a slump in the market] happening in the short term, unless the U.S. interest rate were to climb suddenly … further raising the cost of holding property,” Mr Lao said. The U.S. Federal Reserve has kept interest rates near zero since the 2008 global financial crisis in an

attempt to breathe new life into the U.S. economy. However, in December the Fed said rates would rebound once the U.S. unemployment rate fell below 6.5 percent. Mr Cheung said the Macau government must put more effort into stabilising the real estate market here to avert any plunge in prices. “This could make a real difference. If you fall down from the third floor you may not be dead, but if you fall from 60 floors you will surely be.” Mr Lao said measures the government had taken in the past year to cool property prices had not been very effective. The average price per square metre of residential space on the peninsula rose to 71,159 patacas (US$8,894.90) in December, the most ever, despite curbs that the government imposed in October, including a levy of 10 percent on non-residents and companies buying new flats. “There are many things the government can do to rein in the market, but it depends on whether it is willing to make some sacrifices of the city’s free-market image and the privileges of the real estate sector,” Mr Lao said. He suggested that the government i n cr ea s e th e l ev y o n p r o p e r t y purchases by non-residents. With Bloomberg News

Govt raises income cap for social homes The administration announced an average increase of 3 percent on the ceiling for the monthly earnings of applicants for rent-only public homes. According to yesterday’s Official Gazette, the income cap for individuals goes up by 3.3 percent to 7,820 patacas (US$977.5) starting this month. For families of over seven members there is a 2.7 percent hike to 23,050 patacas. “This will have no impact on the private property market as the homes are targeted to two different groups of people,” said Ronald Cheung, chief executive of Midland Realty (Macau) Ltd. He added: “The increase is too small. It is even lower … than the inflation,” which reached 6.11 percent for the whole of 2012. “Even if the administration were to loosen the ceiling by a larger scale, it would only lead to more people queuing for the houses… without an increase of supply,” he told Business Daily.

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business daily February 5, 2013

macau

Weaker yen no boon for consumers – yet Prices of Japanese products such as cars are unlikely to fall for months, despite the depreciation of the yen Stephanie Lai

sw.lai@macaubusinessdaily.com

he depreciation of the yen is good for importers of Japanese goods but not immediately much good for consumers – unless they are planning a trip to Japan. The U.S. dollar – to which the pataca is indirectly pegged – has risen by 16.6 percent against the yen in the past 12 weeks, and now buys about 92 yen. The yen has been weakening since the Bank of Japan said last month that it would persist with its ultraeasy monetary policy in an effort to spur inflation and economic growth. Car dealers here that sell Japanese vehicles told Business Daily that the yen’s fall would ease pressure on them that had been due to the strength of the yen over the past two years. However, car dealers and importers alike warned that the weaker yen would not mean lower sticker prices any time soon. “We are seeing lighter purchase costs and are more optimistic on car sales this year after experiencing a tough 2012,” said the general manager of Mazda Motors (Macau) Ltd, Daniel Cheang Wing Yiu. “There is a trend for the retail price of Japanese cars to fall as the yen depreciates,” Mr Cheang said. “But there is no set date for when the price will go down, as the dealers here have to consider a surge in costs for showroom rents and human resources,” he said. The assistant general manager of Xin Kang Heng Holdings Ltd, Wilson Mok Chak Wa, predicted that the sticker prices of Japanese vehicles would not reflect the fall in the yen for at least six months. Mr Mok’s dealership sells Hondas,

The pataca has risen by 16.6 percent against the yen in the past 12 weeks

Nissans and Isuzus. “It takes eight to nine months from us placing the purchase order for cars before we can sell them to consumers,” he told Business Daily. “We can only feel the benefit of the yen depreciation after we have sold existing stock,” he said.

Blossom beckons The managing director of Hitachi Sales (Macau) Ltd, Dominic Sio Chi Wai, said the fall in the yen was unlikely to reduce prices of Japanese electronic appliances by much in the short run. “The direct benefit from the weakening yen will not emerge so

soon. I would say the retail sector will only feel it after three to six months,” Mr Sio told Business Daily. “Many of the electronic appliance makers from Japan have their manufacturing bases in Southeast Asia, and this is the case with us,” he said. He said other Japanese makers of electronic appliances had factories in mainland China. “Our purchase cost for products is denominated in the U.S. dollar, so the weakening yen will not have a sharp impact on our sales yet,” Mr Sio said. The depreciation is expected to have a more immediate effect on the outbound travel industry. The cost of package tours to Japan is set to fall by the end of this month.

EGL Tours (Macau) Co Ltd and Hong Thai Travel Services (Macau) told Business Daily that more people were arranging springtime visits to Japan this year than last. The cost of a five-day trip to Japan between February and April is now between 6,000 patacas (US$751) and 7,000 patacas. “We expect the weakened yen to be reflected in tour costs by the end of February, which we are aiming to drop by 4 percent to 5 percent,” said the general manager of Hong Thai Travel Services, Siu Chi Shing. “But such a price adjustment still depends on price quotes from Japanese hotels and flight companies,” Mr Siu said.

Land law fuels doubts over public tender exemption Despite the administration defending the bill, the Legislative Assembly will only vote on it today Tony Lai

tony.lai@macaubusinessdaily.com

ome legislators are concerned about possible loopholes in the long-awaited Land Law revision, but the administration says the latest draft has no grey areas left. Legislator Ng Kuok Cheong told the Legislative Assembly yesterday the bill still has “a huge shortcoming” in allowing the government to grand land directly without public tender. The bill allows land grants for nonprofit projects linked to education, culture, health and public utilities to be exempt from public tender while projects “that match the government policies” are also covered.

His fellow New Macau Association member Au Kam San said: “This draft has given out more details about what is public interest… But what does it mean by ‘government policies’ here?” Legislator Ho Ion Sang believes the draft “lacks concrete measures and mechanisms on increasing the transparency” for better public supervision and participation, like public hearings. Kwan Tsui Hang even warned: “The administration has to tell us clearly how this new version can plug the past loopholes … or else it is quite

difficult for the law to be approved.” Secretary for Transport and Public Works Lau Si Io defended this new revision, saying it could put an end to past misdeeds. Mr Lau stressed the importance of giving appropriate discretionary power to officials over land grants in order to “safeguard a sustainable economic and social development”. He said there were heavier penalties for squatting and undeveloped land. The administration would also have the power to take back the land if developers used land for

unauthorised purposes. The secretary also said contractors could not lease land granted without public bidding and could only re-sell it with government approval. Together with the urban planning law, which will be discussed today, the land law can better oversee land usage changes, he added. Legislators yesterday approved the law on the University of Macau’s Hengqin Island campus but they turned down a motion proposed by the New Macau Association legislators asking for better food safety in mainland China.

February 5, 2013 business daily | 5

MACAU

CGD stays on plan after offshore tweak ‘Formal change’ to have no impact on group strategy for Macau, says bank Vítor Quintã

vitorquinta@macaubusinessdaily.com

ortuguese banking group Caixa Geral de Depósitos SA has transformed its offshore subsidiary here into a new branch but its strategy for Macau has not changed, director Artur Teixeira Santos said. Eight years ago the bank opened an offshore subsidiary in the city aimed at providing investment opportunities for customers from outside of Macau. But starting February 1 all of the institution’s assets were transferred to a new offshore branch, according to a notice published in the Official Gazette last week. The decision to transform the subsidiary into a branch was “just a formal change” that was “shaped by internal reasons,” Mr Santos told Business Daily. Mr Santos was the chief executive of the subsidiary and has now become the head of the Macau branch. After the change, the branch will no longer have a legal personality here and will be based in Portugal instead. In addition it will have no equity beyond the one assigned by Caixa Geral de Depósitos. However, “there has been no change in our strategy for Macau,”

Mr Santos stressed. Caixa Geral de Depósitos, the largest Portuguese financial group, is also the only shareholder of Macaubased Banco Nacional Ultramarino SA (BNU). Fernando Faria de Oliveira, group president, said in November here that BNU could play an important role in the expansion of Caixa Geral de Depósitos in China and in Asia generally. Three years ago Banco Comercial Português, S.A. had gone even further, turning its offshore branch into a Macau-based branch, which can accept deposits from residents. The branch of Banco Português de Investimento, S.A. is now the only other offshore financial institution operating in Macau. The overall number of new offshore companies entering the local market has fallen sharply since 2005, when the number of areas in which they are allowed to operate was sliced from 20 to eight. According to data from the Monetary Authority of Macau in 2005 the government granted 83 new licences for non-financial offshore institutions But there were only two new licences approved in the second half of last year.

Caixa Geral de Depósitos is the largest Portuguese financial group

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business daily February 5, 2013

macau Air Macau to launch Wenzhou route Flagship carrier Air Macau Co Ltd will launch a new route to Wenzhou, in Zhejiang province, tomorrow, the company confirmed yesterday. According to the Macau International Airport website, Air Macau will fly to the south-eastern city three times a week: Wednesday, Saturday and Sunday. The carrier will use an Airbus A319, a model that has a maximum capacity of 124 passengers. Last month Air Macau chairman Zheng Yan said the company was keen on launching two to three new routes to mainland China this year, including to Wenzhou and Henan province capital, Zhengzhou.

Ngan loses bid to rescue seized assets Dispute over Taipa housing deal still weighing on businessman’s pockets Vítor Quintã

vitorquinta@macaubusinessdaily.com

court has thrown out the appeal by prominent businessman Ngan In Leng to retrieve assets that were seized over a deal to fund the construction of a Taipa housing project. Last June a company with ties to Fujian got several of Mr Ngan’s assets in Macau seized over an alleged debt of more than 100 million patacas (US$12.5 million). The seizure attempt was more successful than an earlier request filed by Strong Chance Development Ltd in May 2010, which was unable to retrieve any assets. Strong Chance, a company incorporated in Hong Kong, is majority owned by Fujian Enterprises (Holdings) Co Ltd, a window company of the Fujian provincial government. Mr Ngan asked for the seizure to be lifted, claiming that the May 2010 attempt had been enforced and the deadline to appeal had already expired. It was “unbearable” that the latest seizure request was “misused against the applicant, who is in a very vulnerable position,” the lawyer representing Mr Ngan wrote. His stake in 24 companies, including shares in Grupo Bao Shing, San Wa Bao Construction

Ngan In Leng is a Fujian businessman who in 1980 migrated to Macau, where he is now resident

and Investment Co Ltd, Worldwide Travel Co Ltd and First Laser Ltd, were seized as a guarantee in the value of 90.7 million patacas. Five properties under Mr Ngan’s name, comprising residential and commercial assets, were also seized. The Court of First Instance also ordered the seizure of shares in two other companies that Mr Ngan and his wife transferred to two of their children. Shares in these mainland Chinese

companies are said to be worth about 70 million yuan (89.5 million patacas).

Legal headaches Strong Chance responded by accusing the businessman of “resorting, in an absolutely unacceptable way, to purely dilatory procedural means” in order not to pay the debt. The company says it is owed more

than 100 million patacas in unsettled debts and profit, plus interest, of a joint venture created to fund the Wa Bao housing project near the Macau Stadium on Taipa. And the Court of Second Instance sided with Strong Chance, in a judgement made on January 24 but only released last week. The judges found that the Fujian company had every right to file for a new seizure, which they said was done within the legal timeframe. The court also stressed that Strong Chance “has no interest … in maintaining the seizure instead of an effective settlement of its debt”. João Valle Roxo, the lawyer representing Mr Ngan, told Business Daily the businessman is now pondering whether to post a bond to lift the seizure. But this legal dispute is far from over. Three weeks ago Mr Ngan won a Court of First Instance case over an attempt by Strong Chance to seize other assets, Mr Valle Roxo said. The businessman is also involved in legal disputes over low-cost airline Viva Macau and casinos Casa Real and Grandview Hotel. “The financial stability of Mr Ngan is unwavering. It won’t be affected by this case,” Mr Valle Roxo said.

February 5, 2013 business daily | 7

MACAU

Perfectly Seine: Parisian project starting without govt table pledge Assurances LVS treated ‘adequately’ on gaming component, says COO Michael Leven Michael Grimes

michael.grimes@macaubusinessdaily.com

facilities. It would hope therefore not to be put at any disadvantage to its market rivals on the ‘spending to tables allocated’ ratio.

Deadline extension

Site preparation – the Parisian plot (Photo: Manuel Cardoso)

as Vegas Sands Corp. is to press ahead with construction – and apparently discussions on financing – of its new Cotai resort The Parisian without waiting for specific assurances from the Macau government on how many gaming tables it will be given. The news was announced last week by Michael Leven, the firm’s president and chief operating officer during a conference call to discuss fourth quarter 2012 earnings. “I think that regarding Cotai and all of the new products that are coming on Cotai, you’re not going to see any real conclusion on distribution of new tables there for a number of months,” Mr Leven told analysts. His own firm’s new project is on land known as ‘Site 3’ near to LVS’s Four Seasons Macao property on the eastern side of the Cotai Strip. Business Daily reported on January 29 that preparation work on the site has started and Sands China Ltd hopes to get the permit for piling work before the end of this quarter, with a view to a 2015 opening. Referring to government table allocation for new Cotai projects, Mr Leven stated: “…there’s no firm commitment yet as to who is going to get what. But we’ve been told – I’ve assumed the others have been told the same thing – that in their own time, they [the government] will make up their mind and treat everybody adequately. That’s how we’re going today as we get to financing on Site 3.” The government will assign a total of 250 new-to-market live gaming tables this year, the Secretary of Economy and Finance Francis Tam Pak Yuen said last Thursday, after the conference call. Most of them, 200 tables, will be going to Sands Cotai Central’s second phase and the remaining 50 tables to Galaxy Macau resort, operated by Galaxy Entertainment Group Ltd, he added. Mr Leven said on the call the cost of the project would be US$2.6 billion

(20.3 billion patacas), including a “roughly” US$700 million cash contribution from Sands China, “with the rest financed”. A US$400 million spend on the site during 2013 was mentioned by Kenneth J. Kay, chief financial officer during the call, suggesting LVS can comfortably fund the initial stages from cash reserves before it has to call on bank loans or other finance. By that time the situation on gaming table allocation might be clearer. The project budget mentioned by Mr Leven is US$200 million lower than the estimate given by Edward Tracy, president and chief executive of Sands China just three days earlier at the opening of the second Sheraton Hotel tower at Sands Cotai Central last week.

Budget questions “The budget is about 2.8 billion U.S. to construct and complete,” said Mr Tracy during the Macau briefing, although when Business Daily asked him for clarification afterwards he said “that’s an early estimate”. Mr Leven had mentioned a figure of US$2.5 billion for The Parisian when he spoke to media in September at the Phase IIA opening of Sands Cotai Central. On Wednesday U.S. time last week he stated to analysts: “The total project costs we’re estimating, at somewhere around US$2.6 billion all-in. It could range up a little bit, but that number has actually been approved by our board as for the capital cost of the building.” While its not unusual for price estimates on such large projects to vary, a number of bankers have told Business Daily recently that the Macau government appears to be asking its casino concessionaires for increasingly greater capital spending in relation to the number of tables it’s willing to give out. “Slowly the rates of return on Macau casino projects are all getting

regulated down,” one banker told Business Daily. “When The Venetian was built, they [Las Vegas Sands Corp.] got around 770 tables and they spent US$2 billion plus. When Wynn [Resorts Ltd] announced their Cotai project, they said they would spend US$2.5 billion, then increased that to US$3.5 billion – for 600 tables. Before Christmas Galaxy [Entertainment Group Ltd] said it would spend US$6 billion on a Phase 3 of Galaxy Macau to get 1,000 tables.” By contrast the currently-under construction Phase 2 of Galaxy Macau is costing the equivalent of US$2.06 billion and is hoping to receive 500 tables. Given the growth rates seen in Macau gross gambling revenue in the past three years, it’s perhaps not unreasonable for the government to look for more real estate per gaming table from casino developers. But LVS makes the point to investors and the media that it’s the pioneer in Macau of building up non-gaming tourist

LVS has a contractual obligation to the government to develop Site 3 and has already been given extensions on the original completion deadline of April 2013. It missed that because of a range of factors including the global financial crisis of 2008 and local construction labour shortages. Now in a bullish China market and with banks apparently eager to get in on the Macau gaming story, LVS is keen to push ahead. One of the leverage points the Macau government has now on this Cotai project – and with all the casino concessionaires, even those who never previously gave a commitment to move to Cotai – is the pace at which it issues the different permits required for site preparation, pilings and foundations, and above ground construction. Regarding government assurances (or lack thereof) on tables for The Parisian, it’s not the first time that banks have been asked to discuss loans for Macau projects without any clear visibility on the gaming component. Melco Crown Entertainment Ltd has been in discussions with banks since the summer of 2011 on a US$1.4 billion syndicated loan for its 60 percent owned Studio City site on Cotai. Yet publicly Lau Si Io, Macau’s Secretary for Transport and Public Works – the department that oversees the casino permission process – had been telling the local media since July 2011 that Studio City as authorised in 2008 did not contain any “gambling elements”. The specialist project finance industry press reported last week that MCE’s loan had been sealed – only days after DICJ finally published a letter showing that “approval in principle” had been granted for gaming at the Studio City site in 2006 – but never published in the Official Gazette – by Macau’s former chief executive Edmund Ho Hau Wah.

Michael Leven, COO of Las Vegas Sands Corp.

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business daily February 5, 2013

GREATER CHINA Spring Air may halt flights to Japan Spring Airlines Co., China’s biggest carrier outside government control, is considering ending flights to Japan after a territorial dispute between the Asian countries last year emptied planes and caused losses. Spring hasn’t decided on the 12 weekly flights between China and Japan, chairman Wang Zhenghua said in an interview in Singapore, adding his “Japanese friends” are asking him to continue. Shanghai-based Spring has put on hold plans to add more Japan services as it’s filling less than 50 percent of the seats on those flights, compared with an average 92 percent occupancy on other sectors.

Beijing signals central bank changes next month New PBOC governor to be named by Chinese premier

hina signalled it’s preparing for its first new central bank chief since 2002 as an official newspaper said Zhou Xiaochuan will step down from his position next month. The China Securities Journal, published by the state-run Xinhua news agency, didn’t attribute the information to anyone in its February 2 profile of Mr Zhou, governor of the People’s Bank of China. The ruling Communist Party previously indicated in November that Mr Zhou would leave, without saying when, by omitting him from its central committee list. The successor to Mr Zhou, 65, whose decade of service makes him the longest-tenured PBOC chief, will help decide the pace of loosening controls on interest rates and capital flows. China’s benchmark stock gauge, the Shanghai Composite Index, has gained 24 percent since December 3 on optimism the

world’s second- largest economy is rebounding from growth at a 13year low last year. “The central bank governor change will be part of China’s government reshuffle in March,” with Mr Zhou reaching retirement age, said Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong. The successor “has to follow Zhou’s uncompleted reforms in liberalising China’s interest rates and opening up the capital account,” Mr Zhu said. The PBOC news office didn’t immediately respond to faxed questions from Bloomberg News about how much longer Mr Zhou will serve. Under Chinese law, China’s central bank governor must be named by the premier and endorsed by the National People’s Congress. The annual gathering of the full legislative body is in March. Mr Zhou was listed on Saturday as a member of the Chinese People’s

Political Consultative Conference, the top political advisory body, in a further sign he will depart the PBOC post soon. Potential successors include Shang Fulin, the nation’s banking regulator, and Guo Shuqing, head of the securities regulator, David Loevinger, former senior coordinator for China affairs at the U.S. Treasury Department, said last year. Bloomberg News

Zhou Xiaochuan expected to step down in March

Taiwan keeps Perng at central bank helm Analyst says it will help maintain stability in the island’s financial environment

aiwan’s re-appointment of its top central banker to a fourth term will likely mean continued stability for the island’s currency and protection for exporters. The decision came three days after Central Bank of the Republic of China (Taiwan) Governor Perng Fai-Nan reiterated the authority would intervene to offset any “disorderly movements” in the market for the local dollar. The move bolsters President Ma Ying-jeou’s efforts to strengthen an economy that grew in 2012 at the slowest pace since the 2009 global recession. Mr Perng has promoted order in the currency market as the island’s biggest companies,

including Taiwan Semiconductor Manufacturing Co. and HTC Corp., compete with Sony Corp. and Samsung Electronics Co. Exports account for around two-thirds of Taiwan’s gross domestic product. “Perng’s re-appointment is a big help in maintaining stability in Taiwan’s financial environment,” said Tsung-Sheng Liu, president of Yuanta Securities Investment Trust Co., Taiwan’s biggest money manager. “Now that the uncertainty is gone before the Lunar New Year holiday, we’re bullish about Taiwan stocks.” Taiwan’s benchmark stock index, the Taiex, rose 0.4 percent to 7,885.53 yesterday, a sixth day of gains. The dollar strengthened 0.3 percent to NT$29.593, snapping

a three-day decline. The currency has weakened 1.8 percent against its U.S. counterpart in 2013. The central bank has sold the local currency near the close on most days in the past 10 months, according to traders who asked not to be identified. Under Mr Perng’s 15 years at the helm so far, the Taiwan dollar gained about 10 percent against its U.S. counterpart, less than half the 22 percent appreciation of Asian cu r r en ci es , a cco r d in g t o d a t a compiled by Bloomberg. Taiwan’s exports rose 9 percent in December from a year earlier after falling in eight of the 12 months. Export orders, an indicator of shipments in the next one to three months, climbed 8.5 percent from

a year ago, a fourth straight month of gains, government data showed. The governor’s extension to a new five-year term from the end of February was confirmed by presidential spokesman FanChiang Tai-chi. The government late on Sunday also named former deputy transport minister Chang Chia-Juch Minister of Economic Affairs as part of an executive branch personnel shake-up as Mr Ma battles a 14 percent approval rating. Mr Chang is chairman of Taiwan-based China Airlines Ltd and succeeds Shih Yen-shiang, who has led the ministry since September 2009, the Cabinet said in a statement. Bloomberg News

February 5, 2013 business daily | 9

GREATER CHINA HTC forecasts sales decline HTC Corp. forecast its sixth consecutive decline in quarterly sales as the Taiwanese smartphone maker faces a loss of market share to Chinese rivals. First-quarter revenue will be NT$50 billion (US$1.7 billion) to NT$60 billion, the company said in a statement yesterday. HTC dropped out of the global top five by smartphone market share last quarter as Samsung Electronics Co., Huawei Technologies Co. and ZTE Corp. gained share. HTC fell 1.6 percent to NT$285.50 at the close of trading in Taipei, taking its decline to 5 percent this year following a 40 percent drop last year.

HK shares end lower, China hits multi-month highs

opinion China’s gas mask future is worry for us all

Insurers slide after HSBC’s Ping An stake sale approval Clement Tan

ong Kong shares reversed early gains to end lower in choppy trade yesterday, as investors took profit on the Chinese insurance sector after mainland regulators approved HSBC Holdings Plc’s sale of its remaining stake in Ping An Insurance Group Co of China Ltd. Investors rotated into Chinese banking stocks, giving further chase to the rally in the sector at the start of the last full week of trading before the Lunar New Year holiday. The Hang Seng Index closed down 0.2 percent at 23,685 points after failing at chart resistance at 23,900 for the second time in four days. The China Enterprises Index of the top Chinese listings in Hong Kong fell 0.5 percent. In the mainland, however, the CSI300 of the top Shanghai and Shenzhen A-share listings ended up 0.2 percent at 2,748 points, its highest close since November 2011. The Shanghai Composite Index gained 0.4 percent. Gains in Shanghai came in the highest volume since March 2012. Both onshore Chinese indexes have bounced 30 and 24 percent, respectively, from a December 3 low. “Most investors still remain very invested in the market, torn between wanting to take some profit because

they sense a short-term correction coming up and not wanting to miss the next leg up,” said Jackson Wong, Tanrich Securities’ vice-president for equity sales. Mr Wong added that infrastructure-related stocks that have recently corrected could see the next leg of rotational buying, with the market’s focus after the Lunar New Year holiday likely turning towards China’s annual parliamentary meeting starting in early March. Chinese railway counters are one example. Yesterday, shares of China Railway Group lost 0.9 percent in Hong Kong and 1 percent

But figures skewed by Chinese New Year holiday

Reuters

Gains in Shanghai came in the highest volume in 10 months

Japan carmakers sales jump in January issan Motor Co Ltd and other Japanese carmakers saw their China car sales improve in January but figures were skewed due to weak holiday-hit sales a year earlier and questions still hang over progress made since anti-Japan protests last year. Showroom traffic in the world’s largest auto market slows dramatically during China’s Lunar New Year holiday, a week-long break that fell in January last year but starts on February 9 this year. That calendar mismatch helped Nissan and Honda Motor Co join Toyota Motor Corp in reporting

in Shanghai. China Railway Group has tumbled 7 percent in Hong Kong from a January 15 peak. Chinese insurers were another source of weakness. Investors took profit on the sector after the approval late on Friday from China’s insurance regulator for HSBC’s sale of its remaining US$7.4 billion stake in Ping An Insurance. Ping An’s shares slid 2.8 percent to HK$68.90. Its larger rival, China Life Insurance slipped 1.9 percent to its lowest close since December 31 in Hong Kong. China Life’s Shanghai shares slid 2.2 percent.

double-digit climbs in January sales, the first rise since a territorial row over islands in the East China Sea sent sales tumbling in September. Nissan said sales jumped 22.2 percent in January to 115,700 vehicles, while Honda’s increased 22 percent. Toyota, which reported on Friday, logged a 23.5 percent rise. Even without the calendar impact, though, the effect of the territorial row has waned, with the pace of declines in December much less than drops of almost half seen in September and October, helped by generous incentives. “Given the difference in the

number of working days between this year and last due to the Spring Festival, there is a need to compare the January-February figure. That said, we think the situation is improving compared with a month ago,” Nissan said in an emailed statement. A Toyota executive said last month that showroom traffic in China was recovering to levels seen before the crisis and at a pace faster than expected. Other automakers have been more downbeat, with Mazda’s China chief Noriaki Yamada saying in November that he expected firstquarter sales to slide by about a fifth from year-earlier levels but that the impact of the row should fade by the end of March. After years of breakneck expansion, China vehicles sales have lost some steam, climbing 4.3 percent to 19.3 million in 2012. This year, the China Association of Automobile Manufacturers estimates growth of 7 percent. Reuters

William Pesek Bloomberg View

s it already too late for China to clean up its fast-blackening skies? For all the lip service about green growth, investments in renewable energy and sprawling windmill farms, China’s pollution woes are spiralling out of control. The nation’s capital is a case in point. Beijing’s air, which has exceeded the World Health Organisation’s healthy limit every day this year, is similar to that in an airport smoking lounge, Bloomberg News reported last week. The city’s leaders closed factories, ordered some cars off the roads and recommended that its 20 million residents stay indoors as much as possible as pollution levels stayed in the range of hazardous for at least five straight days. Mind you, this isn’t a script from some apocalyptic movie churned out by Hollywood. It’s the political centre of an economy that’s poised to surpass the U.S.’s within a couple of decades. Yet China is literally choking on its economic success. It has reached its environmental limits, and the blind pursuit of gross domestic product just isn’t possible anymore. If you think Beijing’s air is bad now, consider how China’s skies will look when 500 million people own one or more cars. That’s on top of factories maximising profits amid rising labour costs by burning more and more coal. All this will lead to increasing health risks, slower growth, less foreign investment, increased government debt and higher bond yields. It will lead to deaths, too. The issue is high concentrations of PM2.5, the airborne particulate matter that raises risks for lung and heart diseases. According to estimates by Greenpeace and Peking University’s School of Public Health, PM2.5 exposure contributed to 8,572 premature deaths in Beijing, Shanghai, Guangzhou and Xi’an in 2012. The problem is political will. China’s next president, Xi Jinping, will have his hands plenty full consolidating power, maintaining social instability, improving relations with neighbouring governments and dealing with the U.S.’s pivot toward Asia. Amid so many challenges, China’s dual needs to reduce emissions and boost domestic demand are in direct conflict as never before. Unless China acts immediately and boldly, it’s main growth industry will be gasmasks.

China has reached its environmental limits, and the blind pursuit of gross domestic product just isn’t possible anymore

10 |

business daily February 5, 2013

ASIA Panasonic jumps most in 38 years Panasonic Corp., Japan’s biggest television-maker after Sony Corp., rose the most in more than 38 years in Tokyo trading after posting an unexpected profit because of a weaker yen, asset sales and job cuts. The company surged by its daily limit of 100 yen, or 17 percent, the biggest gain since at least September 1974, to 692 yen (US$7.5) and was untraded because buy orders outnumbered sellers at 2.43pm in Tokyo. Net income was 61 billion yen (US$658 million) in the three months ended December 31, the company said on Friday.

S.Korea in no rush to cut rates: Moon Policy makers need to ‘wait and see’ before acting, says Bank of Korea board member Paul Panckhurst and Eunkyung Seo

We have good reason to be worried about rapid depreciation of the yen Moon Woo Sik, Bank of Korea board member

ank of Korea board member Moon Woo Sik sees no immediate need to alter benchmark interest rates and says it’s “too early” for any centralbank response to the yen’s slide against the won. “There are good reasons why people tend to be more optimistic this year than last year,” Mr Moon, 52, said in an interview in Seoul. There’s no “important reason to take monetary-policy actions quickly” unless the South Korean economy declines further, he said. Central bank policy makers meet on February 14 to set rates as Hyundai Motor Co. and Samsung Electronics Co. grapple with won gains and the likelihood of economic and fiscal policy shifts after the February 25 inauguration of President Park Geun Hye.

Mr Moon says business confidence and investment may gain in South Korea as risks recede from Europe’s debt crisis and the so-called fiscal cliff of spending cuts and tax increases in the U.S. Policy makers need to “wait and see” as South Korea’s economy shows signs of improving after already hitting bottom, Mr Moon said. “I don’t think we’re in a very urgent situation.” The won extended gains after Moon’s comments, rising 0.9 against the dollar to 1,088.10 in Seoul. The currency strengthened 1.2 percent to 11.74 per yen.

Currency monitoring While a rate increase is unlikely in the “very near future,” it could become possible if the economy shows

unexpected strength and inflation picks up, Mr Moon said. South Korea is likely to “coordinate to some extent” when central banks globally exit from loose monetary policies, he said. In January, Ha Sung Keun was the lone member of the seven- person monetary policy committee to call for a reduction in rates. Governor Kim Choong Soo and his officials kept the benchmark seven-day repurchase rate unchanged for a third month at 2.75 percent. Mr Moon’s view contrasts with Royal Bank of Scotland Group Plc last month forecasting an interest-rate reduction at the next meeting after the central bank pared its forecast for this year’s economic growth to 2.8 percent from an October estimate of 3.2 percent. Analysts at HSBC Holdings Plc and Barclays Capital predict no change. Japanese Prime Minister Shinzo Abe’s campaign to expand monetary easing and revive his nation’s economy is driving down the yen, aiding exports of electronics and automobiles in competition with South Korea. The won has gained about 22 percent against the yen in six months. “We have good reason to be worried about rapid depreciation of the yen,” Mr Moon said. At the same time, “it is too early” for the Bank of Korea to consider taking any action, he said, adding that policy makers will monitor currency volatility for any effects on economic and price stability. The policy maker expressed concern about the likelihood of increased welfare spending by the new president. “On the one hand, it’s necessary

Japan Air to discus 787 grounding compensation But airline raises annual earnings forecast due to strong demand

apan Airlines Co Ltd said it will talk to Boeing Co about compensation for the grounding of the 787 Dreamliner, adding that the idling of its jets would cost it nearly US$7.6 million from its earnings through to the end of March. The carrier, which operates seven of the 50 Dreamliners in service around the world, said robust demand on European, North American and Southeast Asian routes would help offset the impact of the 787’s grounding, and

it increased its annual operating profit forecast by almost 13 percent. “Rather than negotiations with Boeing, the important thing now is getting the 787 flying again safely as soon as we can,” said JAL’s president Yoshiharu Ueki. “However, when the situation has settled down we can and are preparing to begin those talks.” Rival All Nippon Airways, which has more 787s than JAL, said last week it would seek compensation from Boeing once the amount of

damages was clearer. The carrier said that its net profit in the nine months to December slipped 3.7 percent to US$1.52 billion. But itraised its operating profit forecast to 186 billion yen (US$2 billion) for the year to end-March, from a previous estimate of 165 billion yen. It predicted the impact on its earnings from the grounding of the technologically advanced Dreamliner at around 700 million yen for the rest of this fiscal year. All Boeing’s 787s are out of action

Seoul ramps up diplomacy against Pyongyang South Korea increased its diplomatic and military efforts against a possible North Korean nuclear weapons test as the totalitarian state showed signs of moving forward with its preparations. Arrangements for a test are “nearly complete” at the Punggye-ri nuclear site, about 370 kilometres (230 miles) northeast of Pyongyang, South Korean Defence Ministry spokesman Kim Min Seok told reporters yesterday in Seoul. The South’s chief nuclear negotiator Lim Sung Nam left for Beijing yesterday for a three-day visit to discuss the latest developments in North Korea with his Chinese counterpart Wu Dawei, according to the Foreign Ministry. “We are concentrating our efforts on China, which is the only country that has the power to persuade the North,” Minister Kim told lawmakers yesterday in Seoul.

but on the other hand, it’s worrisome,” he said. “Simply giving money to people does not help boost potential growth and it can jeopardise fiscal soundness.” Mr Moon joined the policy committee in April last year for a fouryear term after teaching international economics and finance at Seoul National University. Bloomberg News

US$7.6 mln

Estimated impact on earnings from the 787 grounding, according to Japan Airlines as investigators in Japan and the United States try to find the cause of two recent incidents with the plane’s lithium-ion batteries – a battery fire on a JAL 787 at a U.S. airport and an emergency landing by another plane on a domestic ANA flight after battery problems triggered a smoke alarm. Reuters

February 5, 2013 business daily | 11

ASIA Hitachi cuts operating profit forecast Japan’s Hitachi Ltd cut its full-year profit outlook by about 13 percent yesterday to 420 billion yen (US$4.5 billion), citing a weak economic recovery in Europe and a slowdown in emerging markets. The sprawling firm, which is cutting costs and trying to push into growth areas such as infrastructure, posted a 28 percent fall in its third-quarter operating profit. Hitachi logged an operating profit of 68.3 billion yen in the OctoberDecember quarter, down from 95.1 billion yen last year. “The business environment facing our company is likely to stay unclear,” the company said in a statement.

Thai tycoon reaps HK$12 bln profit

The Philippine Stock Exchange gained 33 percent last year

Thai billionaire Dhanin Chearavanont stands to make at least HK$12 billion (US$1.5 billion) profit from his purchase of a stake in Ping An Insurance (Group) Co., China’s second-largest insurer, from HSBC Holdings Plc. Ping An’s Hong Kong-quoted shares lost 2.75 percent to close at HK$68.9, compared with the HK$59 per share Dhanin’s Charoen Pokphand Group Co. agreed to pay for the 1.2 billion shares. The second instalment of the sale was approved by China Insurance Regulatory Commission on Friday. “It’s a pretty profitable trade for Charoen Pokphand,” said Olive Xia, Shanghai-based analyst at Core Pacific-Yamaichi International Ltd. “For Ping An, the approval removed uncertainty over the deal.” Hong Kong shares of Ping An, which is also listed in Shanghai, have gained more than 20 percent from the HK$57.65 closing price on December 4, the day before the sale was announced. Ping An’s stock has gained as improving global and Chinese macroeconomic outlooks lifted the Hang Seng China Enterprises Index, which tracks Chinaincorporated companies listed in Hong Kong, 17 percent since December 4.

World Sentosa gets licence extended Singapore’s Casino Regulatory Authority (CRA) renewed the casino licence of Genting Singapore Plc’s Resorts World at Sentosa Pte Ltd (RWS), GamblingCompliance.com reported yesterday. The licence was extended under the Casino Control Act after “assessing that RWS has fulfilled the matters set out” in the act, the regulator said in a statement on Friday. “The licence is renewed for another three years with effect from February 6, 2013,” it added. A spokesperson for the casino resort was quoted as saying yesterday: “Resorts World Sentosa is pleased with the renewal of the casino licence. As Singapore’s first integrated resort, we are proud to have created 13,000 jobs, and made significant economic and tourism contributions to Singapore since we opened in 2010.” The renewal comes two weeks after more fines were slapped on Singapore’s two casinos for various infringements of entry restrictions for customers.

Myanmar lures Best Western hotel Best Western International Inc., the world’s second-largest closely held hotel chain, will open its first Myanmar property this year, taking advantage of friendlier investment rules and a shortage of rooms in the country. The Phoenix-based group is considering locations including Yangon and Mandalay, the nation’s two largest cities, for the hotel, Glenn de Souza, Bangkok-based vice president of international operations for Asia and the Middle East, said in an e-mailed reply. “There are huge opportunities in the country, following new investment regulations,” Mr de Souza said. “The hotel sector is severely under-supplied, especially in the mid-scale segment, so there will be big opportunities for first movers.” International visitor arrivals to Myanmar, excluding border crossings, more than tripled to 593,381 in 2012 from 2008, figures from the nation’s ministry of hotels and tourism show. The total number of hotels in the country climbed 27 percent to 787 in the same time, the data show.

Qantas plans earlier Asia arrivals Q

Philippine Business Bank to raise US$79 mln in IPO First listing this year after a strong 2012

hilippine Business Bank, a midsize savings bank, expects to raise 3.2 billion pesos (US$79 million) through an initial public offering this month, underwriters have said, in the country’s first new listing this year after a robust 2012. The lender’s IPO follows a boom in new listings in Southeast Asian countries like Malaysia, the Philippines and Thailand in 2012 that helped investment banks weather a plunge in bigger AsiaPacific markets, including China, Hong Kong and Singapore. In the Philippines last year, companies raised a record of about 220 billion pesos (US$5.4 billion) from five IPOs and several follow-on offerings, and another buoyant year is expected on listings of companies like SMC Global Power, a unit of San Miguel Corp. The final offer price for Philippine Business Bank’s IPO was set at 31.50 pesos per share following the bookbuilding process, joint lead underwriters and bookrunners First Metro Investment Corp and SB Capital

Investment Corp said in a letter to the stock exchange dated February 1. That was 25 percent lower than the tentative maximum price of 41.94 pesos announced earlier. There was no indicative range for the offer. “I think the issue regarding PBB is that it’s too small for institutional clients. It’s really for retail investors,” said an analyst at a brokerage firm, who asked not to be identified because he was not authorised to speak to the news media. “Normally if it would be a midsized or big offering with a low price, then it would be an indication that demand is weak.” Philippine Business Bank, which caters mainly to small- and mediumsized enterprises, said it would use the proceeds to increase lending and invest in securities. The listing is scheduled for February 19. The bank – owned by Filipino businessman Alfredo Yao, who also owns juice maker Zest-O Corp and budget airline Zest Air – had a net profit of 624 million pesos (US$15.4 million) for the first nine months of 2012, up 14 percent from a year earlier. Reuters

antas Airways Ltd, Australia’s largest carrier, will fly seven Asian routes earlier in the day as a partnership with Emirates gives it more scope to run flights at times that appeal to business class passengers. The carrier will also look at whether to run direct flights from Australia to Beijing, Delhi and Mumbai from 2016, when it can exercise options to buy as many as 50 Boeing Co. 787-9 Dreamliners, it said in a regulatory statement. More 787 flights may be added to Seoul and Tokyo, Sydney-based Qantas said, where four of five direct routes are operated by its budget arm Jetstar and code-share partners. Qantas international chief Simon Hickey wants to reschedule flight times to deliver better service to Asian destinations and win major corporate customers. The airline has spent A$9 million (US$9.4 million) upgrading lounges in Hong Kong and Singapore and is considering refurbishing its Airbus SAS A330 aircraft to include lie-flat beds in business class, it said. “There’s still some work to be done on this,” Russell Shaw, an analyst at Macquarie Group Ltd in Sydney, said by phone. “I’d think this will be the first announcement of several as they ramp up these connections.” Flights into Hong Kong, Singapore and Bangkok will be brought forward by as much as about four hours using capacity freed up by the agreement with Emirates. Service to Frankfurt will stop operating April 15, six months earlier than originally announced on April 15, Qantas said. “The joint Qantas-Emirates network into Asia gives our customers a fresh set of options,” Mr Hickey said in the statement. “Through a combination of Qantas, Jetstar and our partners we aim to provide the best travel options between Australia and Asia.” The carrier is partnering with Emirates in a bid to end as much as A$450 million (US$469 million) of annual losses on international routes. AFP

12 |

business daily February 5, 2013

MARKETS Hang SENG INDEX PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

30.45

-0.8143322

48647688

CHINA UNICOM HON

12.6

0.1589825

14116936

ALUMINUM CORP-H

3.66

-2.139037

19839728

CITIC PACIFIC

12.4

0.4862237

6193260

BANK OF CHINA-H

3.94

1.025641

581428595

SANDS CHINA LTD

CLP HLDGS LTD

66.2

0.3790751

3042016

BANK OF COMMUN-H

6.59

-0.4531722

38847139

SINO LAND CO

BANK EAST ASIA

31.9

0.9493671

1109227

BELLE INTERNATIO

17.66

1.845444

11864800

BOC HONG KONG HO

26.95

0.3724395

13556690

15.1

0.8010681

2921475

125.5

-0.6334125

3626854

HENDERSON LAND D

CHINA COAL ENE-H

8.53

-0.8139535

20835806

CHINA CONST BA-H

6.67

-0.2989537

240930882

CHINA LIFE INS-H

25.4

-1.930502

45381195

CHINA MERCHANT

27.75

0.7259528

3510185

CHINA MOBILE

85.1

0.1176471

CHINA OVERSEAS

23.2

-1.276596

CHINA PETROLEU-H

9.34

-0.3201708

NAME AIA GROUP LTD

CATHAY PAC AIR CHEUNG KONG

CHINA RES ENTERP

NAME

CNOOC LTD

NAME POWER ASSETS HOL

-0.1248439

62627563

12.4

-0.1610306

3080295

SWIRE PACIFIC-A

ESPRIT HLDGS

10.52

-0.3787879

6909867

TENCENT HOLDINGS

HANG LUNG PROPER

29.55

-0.1689189

6776506

TINGYI HLDG CO

HANG SENG BK

126.6

-0.4716981

2421667

WANT WANT CHINA

55.65

0.4512635

4494760

WHARF HLDG

78.9

0.1904762

2820059

COSCO PAC LTD

HENGAN INTL HONG KG CHINA GS

22.25

0.4514673

3739463

HONG KONG EXCHNG

147.9

2795665

HSBC HLDGS PLC

87.85

-0.1704545

12209169

16383837

HUTCHISON WHAMPO

87.25 -0.05727377

23539432

IND & COMM BK-H

43584973

SUN HUNG KAI PRO

PRICE

DAY %

VOLUME 2223025

67.8

1.19403

39.05

8754961

14.4

0.9817672

8723920

125.3

-0.318218

2561430

99.9 -0.05002501

MOVERS

1543503

268.8

0.07446016

2059403

22.3

1.133787

9540138

10.48

2.544031

9225665

69.9

1.157742

3333974

2 23930

INDEX 23685.01

4460866

5.89

0.3407155

189577817

LI & FUNG LTD

10.66

-0.5597015

62472227

-0.6279435

1289162

27.2

-0.3663004

2013438

MTR CORP

31.65

CHINA RES LAND

22.75

-1.086957

8563099

NEW WORLD DEV

14.42

2.269504

19894743

CHINA RES POWER

22.15

-0.4494382

6780644

PETROCHINA CO-H

10.94

-1.441441

75379476

CHINA SHENHUA-H

32.5

-2.548726

24780450

PING AN INSURA-H

68.9

-2.752294

1030057151

HIGH

23927.05

LOW

23579.16

52W (H) 23944.74 23570

(L) 18056.4 31-January

4-February

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

CHINA PACIFIC-H

30.3

-0.3289474

15164676

YANZHOU COAL-H

12986200

CHINA PETROLEU-H

9.34

-0.3201708

43584973

ZIJIN MINING-H

-2.139037

19839728

CHINA RAIL CN-H

8.17

-1.684717

18193416

30.95

0.3241491

11106828

CHINA RAIL GR-H

4.35

-0.9111617

15526776

3.94

1.025641

581428595

CHINA SHENHUA-H

32.5

-2.548726

24780450

CHINA TELECOM-H

PRICE

DAY %

VOLUME

AGRICULTURAL-H

4.38

0.6896552

159695085

AIR CHINA LTD-H

6.8

2.874433

3.66

ANHUI CONCH-H BANK OF CHINA-H

ALUMINUM CORP-H

NAME

6.59

-0.4531722

38847139

4.24

-0.2352941

32440999

26.35

1.934236

2937983

DONGFENG MOTOR-H

12.22

-2.083333

25927333

CHINA CITIC BK-H

5.45

0.1838235

60677197

GUANGZHOU AUTO-H

6.5

-1.664145

7572814

CHINA COAL ENE-H

8.53

-0.8139535

20835806

HUANENG POWER-H

7.74

-2.149178

15874804

CHINA COM CONS-H

7.65

-2.423469

20738539

IND & COMM BK-H

5.89

0.3407155

189577817

CHINA CONST BA-H

6.67

-0.2989537

240930882

JIANGXI COPPER-H

20.85

-0.477327

5521800 75379476

BANK OF COMMUN-H BYD CO LTD-H

-0.4975124

14904860

PETROCHINA CO-H

10.94

-1.441441

CHINA LIFE INS-H

25.4

-1.930502

45381195

PICC PROPERTY &

11.86

-0.5033557

11931663

CHINA LONGYUAN-H

6.95

4.511278

41399000

PING AN INSURA-H

68.9

-2.752294

1030057151

CHINA MERCH BK-H

18.82

13818291

SHANDONG WEIG-H

7.59

0.7968127

9299455

CHINA COSCO HO-H

CHINA MINSHENG-H

12.08

2.721088

74051710

SINOPHARM-H

23.3

-1.061571

2058906

CHINA NATL BDG-H

12.7

1.762821

44678651

TSINGTAO BREW-H

45.15

1.918736

3358795

16.94

2.542373

11051251

WEICHAI POWER-H

32.65

1.397516

9884226

CHINA OILFIELD-H

NAME

PRICE

DAY %

VOLUME

13.28

31481226

2.96

-1.003344

43906090

ZOOMLION HEAVY-H

10.36

-3.358209

33327595

ZTE CORP-H

14.22

-4.819277

17310301

MOVERS

2 12340

INDEX 12156.58 HIGH

12337.08

LOW

11996.23

52W (H) 12354.22 (L) 8987.76

11990

31-January

4-February

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

3.23

2.866242

501872987

CHINA VANKE CO-A

11.9

-0.5016722

146699792

POLY REAL ESTA-A

13.13

-1.055011

139337101

AIR CHINA LTD-A

5.98

1.355932

19285793

CHINA YANGTZE-A

7.57

-1.688312

42646177

QINGDAO HAIER-A

13.78

-2.683616

24706614

ALUMINUM CORP-A

5.27

2.529183

58432949

CHONGQING CHAN-A

8.68

-0.2298851

34287183

QINGHAI SALT-A

28.3

1.433692

13737433

ANHUI CONCH-A

21.1

1.539942

39194929

CITIC SECURITI-A

15.29

-2.858958

209597425

SAIC MOTOR-A

16.85

-0.3548196

35583318

BANK OF BEIJIN-A

10.4

-0.4784689

92601084

CSR CORP LTD -A

4.76

-1.039501

54796525

SANY HEAVY INDUS

12.28

2.333333

104115527

BANK OF CHINA-A

3.22

1.577287

133728657

DAQIN RAILWAY -A

7.12

-1.657459

59178210

SHANDONG GOLD-MI

37.86

2.076031

23342346

BANK OF COMMUN-A

5.54

-0.3597122

138732469

DATANG INTL PO-A

4.29

0.2336449

23898632

SHANG PHARM -A

11.85

-1.578073

11340958

BANK OF NANJIN-A

10.56

56707259

EVERBRIG SEC -A

15.91

1.33758

44569086

SHANG PUDONG-A

12.07

1.004184

271540507

BANK OF NINGBO-A

12.3

-2.070064

37755393

GD POWER DEVEL-A

2.79

65613832

SHANGHAI ELECT-A

4.15

-1.190476

8347869

1.988072

58589960

GEMDALE CORP-A

7.61

1.466667

163699523

SHANXI LU'AN -A

24.73

7.662168

44203668

GF SECURITIES-A

15.78

-1.987578

120319493

SHANXI XISHAN-A

14.75

3.074773

48384174

29.1

-1.788728

17062256

SHENZEN OVERSE-A

6.65

-1.041667

84285668 69230546

NAME

BAOSHAN IRON & S BBMG CORPORATI-A

5.13

NAME

8.38

2.195122

37548924

BYD CO LTD -A

23.54

-0.2542373

6041058

GREE ELECTRIC

CHINA AVIC AVI-A

24.02

-1.557377

9610449

GUANGHUI ENERG-A

17.58

-1.897321

29896140

SUNING APPLIAN-A

7.17

0.2797203

12.47

-0.5582137

150510003

TSINGTAO BREW-A

33.74

2.803169

5422514

29.2

-2.308464

7262453

WEICHAI POWER-A

26.34

3.823413

30140568

CHINA CITIC BK-A

5.19

-0.9541985

65326785

HAITONG SECURI-A

CHINA CNR CORP-A

4.52

-1.525054

60930666

HANGZHOU HIKVI-A

CHINA COAL ENE-A

8.3

2.722772

40973609

HENAN SHUAN-A

68.83

-1.671429

2875993

WULIANGYE YIBIN

25.26

-1.250977

40202774

CHINA CONST BA-A

5.08

0.5940594

108381396

HONG YUAN SEC-A

21.01

-2.051282

28229646

YANGQUAN COAL -A

16.57

3.887147

45088496

CHINA COSCO HO-A

4.2

-1.408451

42828468

HUATAI SECURIT-A

11.86

4.493392

136689361

YANTAI WANHUA-A

16.61

0.2414001

18793300

CHINA CSSC HOL-A

23.64

1.285347

11922336

HUAXIA BANK CO

12.09

1.002506

95440806

YANZHOU COAL-A

19.66

6.673901

26415868

CHINA EAST AIR-A

3.72

0.5405405

27706905

IND & COMM BK-A

4.47

0.4494382

203738622

YUNNAN BAIYAO-A

73.9

-2.635046

3141633

CHINA EVERBRIG-A

3.67

2.513966

420870310

INDUSTRIAL BAN-A

20.64

-0.04842615

120252399

ZHONGJIN GOLD

16.6

2.786378

56752394

CHINA INTL MAR-A

14.27

1.062323

13262565

INNER MONG BAO-A

33.68

-1.405152

61499908

ZIJIN MINING-A

3.87

0.5194805

115398200

36312907

INNER MONG YIL-A

26.82

-0.4454343

14769069

ZOOMLION HEAVY-A

9.49

-2.265705

223781374

5.2

0.9708738

93971709

ZTE CORP-A

10.02

-8.073394

72582596

31.09

-2.263439

6895739

CHINA LIFE INS-A

-2.189101

CHINA MERCH BK-A

14.57

-1.420839

165969012

INNER MONGOLIA-A

CHINA MERCHANT-A

14.04

-0.4255319

89129213

JIANGSU HENGRU-A

CHINA MERCHANT-A

27.46

-2.555004

27952118

CHINA MINSHENG-A

11.53

2.671416

512477993

CHINA NATIONAL-A

77.4

-1.926001

5036594

JIANGXI COPPER-A

JIANGSU YANGHE-A

27.26

1.944652

31138239

JINDUICHENG -A

12.86

-0.07770008

18460011

JIZHONG ENERGY-A

17.74

4.230317

34927929

7.87

3.552632

53949130

CHINA OILFIELD-A

17.13

-1.833811

9728527

CHINA PACIFIC-A

22.68

-1.305483

54568888

KANGMEI PHARMA-A

15.42

-3.865337

36331695

175.13

-2.151078

6496402 13897206

CHINA PETROLEU-A

7.05

-0.4237288

63776266

KWEICHOW MOUTA-A

CHINA RAILWAY-A

5.89

1.551724

50206190

LUZHOU LAOJIAO-A

30.12

-1.857283

2.18

0.4608295

MOVERS 145

146

9 2765

INDEX 2748.028

CHINA RAILWAY-A

3.21

1.582278

72358007

METALLURGICAL-A

40547035

HIGH

2760.2

CHINA SHENHUA-A

24.93

1.341463

36624157

NINGBO PORT CO-A

2.61

-0.3816794

31351296

LOW

2673.92

CHINA SHIPBUIL-A

4.91

-0.6072874

50891559

PANGANG GROUP -A

4.06

2.78481

104064826

CHINA SOUTHERN-A

4.2

33783823

PETROCHINA CO-A

9.36

0.7534984

60838604

CHINA STATE -A

3.7

0.2710027

179466169

PING AN BANK-A

22.01

-1.872492

85741999

CHINA UNITED-A

3.79

4.120879

275443645

PING AN INSURA-A

51.49

1.41816

94964472

PRICE DAY %

Volume

PRICE DAY %

Volume

52W (H) 2768.503906 (L) 2102.135

2670

31-January

4-February

FTSE TAIWAN 50 INDEX NAME

NAME

ACER INC

25.2

-2.135922

15401387

FORMOSA PLASTIC

ADVANCED SEMICON

24.3

1.461378

27400505

ASIA CEMENT CORP

37.4

0.2680965

ASUSTEK COMPUTER

TAIWAN MOBILE CO

FOXCONN TECHNOLO

86.1 -0.4624277

5426705

3736683

FUBON FINANCIAL

39.3

344

1.0279

3250696

HON HAI PRECISIO

-1.702128

62949786

HOTAI MOTOR CO

CATCHER TECH

131.5 -0.3787879

5845966

CATHAY FINANCIAL

33.85

2.731411

CHANG HWA BANK

16.8

CHENG SHIN RUBBE CHIMEI INNOLUX C

TPK HOLDING CO L

509

0.7920792

4426390

103

1.477833

34122079

52.2

0.3846154

10226379

11.65

0.4310345

25603175

34.2 -0.2915452

14455651

TSMC

84 -0.7092199

31768271

UNI-PRESIDENT

1.061571

468190

HTC CORP

285.5

-1.551724

19090101

WISTRON CORP

54858663

HUA NAN FINANCIA

17.25

1.173021

40108424

YUANTA FINANCIAL

16.55

3.115265

56572423

3.067485

33758526

LARGAN PRECISION

796 -0.1254705

2011288

YULON MOTOR CO

54.6

0.1834862

4666778

77.5

-0.128866

3016447

LITE-ON TECHNOLO

43.05

0.7017544

7662801

0.6779661

61449671

MEDIATEK INC

325

0.1540832

7594890

6.985294

198645164

MEGA FINANCIAL H

25.6

6.004141

87614208

CHINA STEEL CORP

27.9

0.5405405

17577745

NAN YA PLASTICS

0.6711409

4987192

CHINATRUST FINAN

17.7

3.508772

105653097

PRESIDENT CHAIN

163

0.617284

1214230

CHUNGHWA TELECOM

93.9

0.1066098

7135329

QUANTA COMPUTER

69.1

0.2902758

6729956

COMPAL ELECTRON

21.6

1.17096

13324863

SILICONWARE PREC

31.8

0.3154574

12022300

106

3778682

SINOPAC FINANCIA

13.35

3.088803

87367934

34.75

1.906158

10925062

SYNNEX TECH INTL

2.14168

6799089

75 -0.1331558

3896331

TAIWAN CEMENT

40.45

0.9987516

11539633

18.65

3.611111

51854997

2.409639

32752701

FORMOSA CHEM & F

80.4

0.5

5430649

TAIWAN FERTILIZE

73.8

4109905

FORMOSA PETROCHE

85.3

0.1173709

1707308

TAIWAN GLASS IND

29.7

1.538462

1875435

TAIWAN COOPERATI

UNITED MICROELEC

2774146

238

8.73

FIRST FINANCIAL

1.428571

53072711

14.85

FAR EASTONE TELE

Volume

106.5

3.557312

CHINA DEVELOPMEN

FAR EASTERN NEW

PRICE DAY %

7311927

11.55

DELTA ELECT INC

NAME

1.123596

AU OPTRONICS COR

MOVERS

2 5550

INDEX 5545.2 HIGH

5545.2

LOW

5441.72

52W (H) 5621.53 5440

(L) 4719.96 31-January

4-February

February 5, 2013 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 35.6

35.4

35.2

Max 35.55

Average 35.327

Min 35.1

35.0

Last 35.1

Max 54.95

Average 54.304

Min 53.85

39.5 39.2 38.9

Max 39.6

Average 39.356

Min 38.8

38.6

Last 39.05

Max 22.1

Average 21.943

Commodities PRICE

DAY %

YTD %

(H) 52W

(L) 52W

WTI CRUDE FUTURE Mar13

97.32

-0.460263885

5.47306817

108.9899979

80.48000336

BRENT CRUDE FUTR Mar13

116.44

-0.274066461

5.960505961

118.7999954

90.58999634

GASOLINE RBOB FUT Mar13

304.49

-0.284909615

10.17875235

306.6299915

222.4999905

993.5

-0.200904068

7.492561536

1026.25

800.5

3.3

-0.03029385

-1.931649331

4.049000263

3.052000046

GAS OIL FUT (ICE) Mar13 NATURAL GAS FUTR Mar13 HEATING OIL FUTR Mar13 METALS

315.46

-0.189837373

4.56775645

331.3199997

254.9000025

Gold Spot $/Oz

1665.26

-0.1283

0.0481

1796.08

1527.21

Silver Spot $/Oz

31.6544

-0.5439

5.1292

37.4775

26.1513

Platinum Spot $/Oz

1695.68

0.7085

11.7233

1736

1379.05

755.2

-0.1124

7.9381

761.99

553.75

Palladium Spot $/Oz LME ALUMINUM 3MO ($)

2125

1.62601626

2.508441872

2361.5

1827.25

LME COPPER 3MO ($)

8290

1.530924679

4.52654142

8765

7219.5

LME ZINC

2176

1.445221445

4.615384615

2187.25

1745

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Mar13 CORN FUTURE

Last 21.85

54.7

18.4

54.4

18.2

54.1

18.0 Max 18.46

Average 18.066

Min 17.88

Mar13

18625

1.637107776

9.173505275

22150

15236

15.555

-0.032133676

2.504118616

16.84000015

14.89999962

738.5

0.339673913

5.764411028

846.25

511

WHEAT FUTURE(CBT) Mar13 SOYBEAN FUTURE Mar13 COFFEE 'C' FUTURE Mar13

22.2

21.4

22.1

21.3

22.0

21.2

21.9

21.1

21.8

21.0

21.7

Max 21.35

Average 21.145

Min 20.95

Last 21.05

767

0.261437908

-1.413881748

948.25

652

1482.75

0.576564355

5.196878326

1728.25

1230

147.3

-0.439337614

2.433936022

237.5

141.25

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

PRICE

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

DAY %

1.042 1.5712 0.9101 1.3594 92.91 7.9881 7.7556 6.2327 53.07 29.75 1.2389 29.568 40.625 9664 96.802 1.23725 0.86515 8.4811 10.8587 126.29 1.03

0.1249 0.1211 -0.2307 -0.3372 -0.1507 0.005 0.0206 -0.0866 0.2402 0.1681 0.1372 0.115 0.1231 0.6519 -0.2014 0.1301 0.4704 -0.0059 0.5415 0.293 0.0097

YTD %

(H) 52W

0.4047 -2.8684 0.5824 3.0629 -7.3297 -0.0613 -0.0645 -0.0337 3.6273 2.7899 -1.4125 -1.8094 0.9354 1.3349 -7.7219 -2.4061 -5.7481 -3.1081 -3.0234 -10.0721 -0.0097

1.0857 1.6381 0.9972 1.3711 92.97 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 96.821 1.25692 0.87169 8.4957 10.9254 126.97 1.0314

0.9582 1.5269 0.8931 1.2043 76.49 7.9823 7.7498 6.2105 48.6088 29.63 1.2152 28.913 40.54 8903 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029

MACAU RELATED STOCKS (H) 52W

(L) 52W

ARISTOCRAT LEISU

NAME

PRICE 3.68

DAY % YTD % -2.387268

16.82539

3.89

2.27

VOLUME CRNCY 5263149

CROWN LTD

11.6

-1.108269

8.716025

12.04

8.06

1764397

SUGAR #11 (WORLD) Mar13

18.9

0.052938062

-3.126601743

25.12999916

18.05999947

AMAX HOLDINGS LT

0.08

2.564103

14.28571

0.119

0.055

28240000

82.63

-0.421788383

9.968059622

98.5

66.84999847

BOC HONG KONG HO

26.95

0.3724395

11.82572

27.1

20.45

13556690

0.29

1.754386

9.433968

0.34

0.215

616000

6.2

-0.3215434

3.505847

6.25

2.8

69000

CHINA OVERSEAS

23.2

-1.276596

0.4328988

25.6

14.124

23539432

CHINESE ESTATES

13.86

3.742515

5.963303

13.88

8.3

542137

CHOW TAI FOOK JE

12.46

1.300813

0.1607751

13.86

8.4

8463200

EMPEROR ENTERTAI

2.14

4.390244

13.22751

2.14

1.1

3099253

6.951872

63.93442

2.03

0.465

18702000

CENTURY LEGEND CHEUK NANG HLDGS

World Stock MarketS - Indices COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

14009.79

1.076506

6.911178

14019.78

12035.08984

35.1

15.65074

35.7

16.94

7911650

NASDAQ COMPOSITE INDEX

3179.098

1.176462

5.285097

3196.932

2726.68

HANG SENG BK

126.6

-0.4716981

6.655437

127.6

99.2

2421667

FTSE 100 INDEX

6337.25

-0.1573912

7.4509

6354.46

5229.76

HOPEWELL HLDGS

33.15

3.11042

-0.3007519

34.4

19.049

1662184

DAX INDEX

7835.72

0.02974447

2.933771

7871.79

5914.43

HSBC HLDGS PLC

87.85

-0.1704545

8.056577

88.45

59.8

12209169

NIKKEI 225

11260.35

0.6166375

8.3228

11285.49

8238.96

HANG SENG INDEX

23685.01

-0.1552578

4.537642

23944.74

18056.4

CSI 300 INDEX

2748.028

0.1714708

8.921144

2768.503906

2102.135

TAIWAN TAIEX INDEX

7923.16

0.8552731

2.904866

8170.72

6857.35

FUTURE BRIGHT GALAXY ENTERTAIN

HUTCHISON TELE H

3.58

1.416431

0.5617994

3.88

2.98

4513469

LUK FOOK HLDGS I

27.7

-1.598579

13.52459

30.05

14.7

1305000

MELCO INTL DEVEL

13.54

50.27747

13.96

5.12

8280704

MGM CHINA HOLDIN

17.98

-1.533406

28.24536

18.86

10.04

3986400

MIDLAND HOLDINGS

3.87

0.2590674

4.594593

5.217

3.249

4724000

NEPTUNE GROUP

0.189

1.612903

24.34211

0.226

0.084

47530000

NEW WORLD DEV

14.42

2.269504

19.96672

15.12

7.95

19894743

SANDS CHINA LTD

39.05

15.02209

39.95

20.65

8754961

SHUN HO RESOURCE

1.52

2.702703

8.57143

1.59

1.03

80000

KOSPI INDEX

1953.21

-0.2339372

-2.195242

2057.28

1758.99

S&P/ASX 200 INDEX

4907.515

-0.2759751

5.561792

4951.3

3985

4488.745

0.1586698

3.985883

4519.459

3635.283

FTSE Bursa Malaysia KLCI

1632.8

0.3225707

-3.324545

1699.68

1526.03

SHUN TAK HOLDING

4.49

1.354402

7.159903

4.65

2.56

13953782

NZX ALL INDEX

922.47

0.05944104

4.58215

924.705

740.345

SJM HOLDINGS LTD

21.85

1.157407

21.38889

22.15

12.34

5319571

PHILIPPINES ALL SHARE IX

4040.92

1.605453

9.244168

4041.59

3205.43

SMARTONE TELECOM

13.82

-1.84659

17.5

13.16

1638500

WYNN MACAU LTD

21.05

-0.9411765

0.4773233

25.5

14.62

12097582

ASIA ENTERTAINME

4.66

-1.479915

52.28758

7.24

2.4

156897

BALLY TECHNOLOGI

48.66

1.038206

8.834715

51.16

41.74

1762827 39490

JAKARTA COMPOSITE INDEX

20.9

(L) 52W

COTTON NO.2 FUTR Mar13

NAME

17.8

Last 17.98

CURRENCY EXCHANGE RATES

NAME ENERGY

Min 21.75

18.6

53.8

Last 54.4

39.8

55.0

HSBC Dragon 300 Index Singapor

637.71

0.09

2.68

STOCK EXCH OF THAI INDEX

1505.65

0.4288897

8.169949

1511.95

1090.27

HO CHI MINH STOCK INDEX

482.38

-0.2151338

16.59295

492.44

372.39

BOC HONG KONG HO

3.35

9.120524

3.47

2.68

Laos Composite Index

1424.28

-0.638329

17.24689

1455.82

880.65

GALAXY ENTERTAIN

4.56

14.86146

4.57

2.22

10300

15.55

1.171113

9.738884

17.37

10.92

4240705

JONES LANG LASAL

95.1

3.212503

13.29521

95.46

61.39

614054

LAS VEGAS SANDS

55.87

1.122172

21.03553

58.3216

32.6127

10577092

MELCO CROWN-ADR

21.03

0.3339695

24.88123

21.25

9.13

7357556

MGM CHINA HOLDIN

2.2

18.91892

2.3

1.36

2000

MGM RESORTS INTE

12.96

1.487862

11.3402

14.9401

8.83

8688564

SHFL ENTERTAINME

15.98

7.972973

10.2069

18.77

11.75

999594

SJM HOLDINGS LTD

2.82

2.173913

22.07793

2.85

1.65

1500

126.37

0.9183836

12.33888

129.6589

84.4902

3616572

INTL GAME TECH

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business daily February 5, 2013

Opinion

Be very afraid when fear disappears from markets Dean Curnutt

Founder and chief executive of Macro Risk Advisors in New York

hese days, many indicators suggest we are in an extremely low-risk market environment. The Chicago Board Options Exchange Volatility Index, or VIX, sometimes known as the fear index, has reached a five-year low. European sovereign-bond yields, long a source of anxiety, have eased since their uncomfortable march higher in 2011, and the euro has risen 13 percent from its 2010 low. Options on currencies also suggest little fear in that market. In the U.S., the Standard & Poor’s 500 Index rose 13 percent last year and the average forecast among Wall Street analysts is for a 9.4 percent gain this year, supported by growing profits and investor willingness to pay more for each dollar of earnings. In Europe, bank balance sheets are still fragile, but the rally in share prices inspired by European Central Bank President Mario Draghi’s “whatever it takes” pledge last summer left financial companies in far better shape to weather turmoil. To be sure, meaningful progress has been made in escaping the abyss of systemic

risk that enveloped the U.S. in 2008 and Europe in 2011. But policy makers should avoid the trap of reading too much into this stable environment. In today’s world, the meagre level of the VIX and record-low yields on creditmarket instruments are largely linked to the Federal Reserve’s accommodative monetary policy, which is artificially damping market risk. In the wonderfully succinct words of John Burbank, the chief investment officer of Passport Management LLC in San Francisco, “price is a liar”. Perhaps no price is more dishonest than that of U.S. Treasuries, whose yields are being held down by the Fed’s quantitativeeasing programme, in which the central bank buys billions of dollars in government securities each month.

Facing reality Recent history is rife with periods when the price of risk failed to reflect obvious financial realities. In 2000, we watched technology-stock valuations reach stratospheric highs where entirely new valuation metrics were invented to

justify prices. By early 2003, tech-stock prices had plunged more than 60 percent. In January 2007, with the housing bubble at absurd proportions (home price-to-rent ratios reached levels never seen before) the VIX closed at less than 10, the lowest since December 1993. It took 18 months, but ultimately stock markets buckled and the VIX surged to 80 as credit risk and mortgage securities underwent a wrenching global repricing. Of course, most recently, the market was forced to

There is nothing safe about today’s Treasury yields in the context of the frightening debt dynamics in the U.S.

acknowledge that it had badly mispriced the risk in European sovereign debt, leading to a three-year fire drill of summits, intervention measures and bailouts. Policy makers should take caution from these recent periods of financial history. The important point is that the price of risk can sometimes stray from fundamentals. In the U.S., a yield of less than 2 percent on 10year Treasuries is entirely disconnected from the fiscal challenges in plain sight and the poisonous debt-ceiling showdown that could be in the offing. Treasuries are a bad deal for most investors, supported only by the easy-money policies of Fed Chairman Ben Bernanke. Other asset classes look like a less-bad proposition, and the need to generate returns in such a low-yield environment could lead to disastrously unsound financial decision making. In the old days, bondmarket vigilantes were around to enforce fiscal and monetary discipline. If the Fed increased the money supply too fast, bond traders were there to keep the central bank in check. When the U.S. ran big deficits,

the vigilantes either sold their holdings, or threatened to sell, raising the Treasury’s costs to issue debt.

Default rally Today, it works differently. Recall that when the U.S. was near the brink of default in 2011, the bond market rallied as stocks swooned amid the downgrade of the U.S.’s credit rating. Previously, buying or selling by the vigilantes had a counter-cyclical impact, limiting the degree to which money supply and fiscal balance sheets could expand. Today, Treasuries rally in Pavlovian fashion when uncertainty rises and investors flee from riskier assets such as stocks, commodities and other speculative holdings. Unfortunately, this behaviour serves to reinforce the mispricing of U.S. governmentbond risk and further distort investment choices. Artificially low Treasury yields also enable the complacency of policy makers who fail to act with urgency in tackling the U.S. debt problem. To wit, the various proposals for deficit reduction all assume that interest rates will remain exceptionally low well into the future. This is an unwise assumption to make. As we experienced so recently with the price and availability of mortgage credit, market prices can quickly become complicit in both bubbles and busts. One must wonder if the Fed’s campaign to suppress interest rates is abetting a similarly dangerous build-up of government debt at prices that are divorced from the true risk profile. There is nothing safe about today’s Treasury yields in the context of the frightening debt dynamics in the U.S. Although the Fed seems determined to stay the course, one must wonder what might happen to riskier assets if Treasury yields jump. Absent a credible approach to dealing with the U.S.’s fiscal challenges, at some point the bond vigilantes will re-emerge. Let’s hope our policy makers heed the recent lessons from financial history and act before the market does. Bloomberg View

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February 5, 2013 business daily | 15

OPINION Business

wires

Leading reports from Asia’s best business newspapers

Korea Herald At least 1,500 financial consumers have joined a class action suit against seven major life insurance firms in South Korea, a spokesman of the Korea Finance Consumer Federation said on Sunday. He said the lawsuit followed the allegation that the seven firms, including Samsung Life, had sought to collect more insurance premiums via price fixing. Samsung Life saw the most complaints as about 600 policyholders participated in the suit, followed by Kyobo Life Insurance Co. with about 360 and Hanwha Life Insurance with about 330.

Thanh Nien Daily The best-case scenario this year would see Vietnam’s GDP expand by 5.3 percent compared to 5.03 percent in 2012, the Vietnam Academy of Social Sciences said in a report. Vietnam government has set a GDP growth target of 5.5 percent and hopes to contain inflation at below last year’s 6.8 percent. But growth is likely to bottom this year if the Vietnamese economy follows its normal pattern of the last two decades unless the government acts decisively and fast, the think tank has warned.

Straits Times Qantas Airways Ltd will open its new passenger lounge at Changi Airport on March 31, as it moves to boost its Asian presence. A similar facility will be available to customers at Hong Kong International Airport in September, the airline said. Outlining its strategy to strengthen its international operations, the Australian flag carrier said that Singapore and Hong Kong will be its two key hubs in the region. Capacity to both destinations will be expanded and flight timings will also be adjusted to make it more convenient for customers.

Jakarta Post Indonesia’s national flag carrier Garuda Indonesia plans to open direct flights from Jakarta to London’s Gatwick Airport starting in the fourth quarter of this year. Garuda will operate its Boeing 737-ER, which can transport 314 passengers six times a week. Garuda Indonesia president director Emirsyah Satar said the new route was part of the company’s 2011-2015 Quantum Leap programme, which aimed at boosting the company’s performance in the world market. He said this route would add to the existing route that linked Jakarta with Abu Dhabi and Amsterdam.

The two rabbits of international trade Taeho Bark

Minister for Trade of the Republic of Korea and a candidate for the post of Director-General of the World Trade Organisation

f you chase two rabbits at once, the old saying goes, both will escape. And yet this is precisely what many governments are required to do: pursue both growth and distributional fairness. The two objectives, though not incompatible, are entirely different from one another, and few policy tools can simultaneously help to achieve both. This idea matters a lot in trade policy. Much theoretical and empirical research demonstrates that opening trade can spur a country’s GDP growth. But increasing a pie’s size does not guarantee that it will be shared fairly. Often, the incremental growth that comes with a trade opening is unevenly shared; moreover, in many cases, some receive a smaller share than they did before. Here is where government must intervene using its traditional tools, taxation and redistribution, as well as complementary policies such as social safety nets and adjustment assistance. Similarly, from a global perspective, opening trade can contribute to the world’s overall economic growth, but does not guarantee that the benefits will be fairly distributed among countries. Some say that no country loses, in absolute terms, from opening trade; otherwise, they would not participate in freetrade deals. Still, the uneven distribution of the benefits created by a global trade opening means that some countries, especially the least developed, gain little in comparative terms, and are possibly even hurt. This explains growing concern about the role of trade in development, despite the obvious fact that increased global trade has lifted hundreds of millions of people out of poverty in recent decades. Unlike individual countries, there is no central authority that can enforce redistribution of wealth around the globe, so the problem of fairness must be addressed through the development mandates embedded in trade negotiations.

Right balance A key aspect of these development concerns is identifying the appropriate balance in any trade agreement. “Special and differential treatment” is the technical term used in trade negotiations to indicate that the balance must be tilted toward developing countries, with the extent of this treatment to be decided by the parties to the talks. But, while the tendency in current trade negotiations to allow developing countries to open their markets less than others helps to achieve more

balance, it may undermine the original goals of enhancing efficiency and boosting growth. Furthermore, it fails to encourage more SouthSouth trade. And, in the end, this focus on the defensive side of trade liberalisation makes negotiations more difficult. For example, one of the critical issues blocking progress on the World Trade Organisation’s Doha Development Agenda of global free-trade talks centres on the extent to which major developing countries should open their markets. A better method of seeking balance is to give developing countries greater access to global markets, including those of other developing countries. Yet, as of now, there is neither the will nor the energy to adopt this approach. And, for developing countries that lack supply-side capacity, greater access to the global market is a moot point, as they remain far from even considering what size their share of it should be. This raises another concern. Because “aid for trade” – assistance for developing countries that aims to ease their trade-related constraints – takes the form of financial support, a practical issue is

A better method of seeking balance is to give developing countries greater access to global markets, including those of other developing countries

whether donors can maintain their level of funding, given today’s economic difficulties. Moreover, an intrinsic and often neglected problem is how to divide management of aid-and-trade schemes among international and domestic institutions.

Better coordination Among the major multilateral institutions, the WTO maintains jurisdiction over trade. It is the World Bank and the International Monetary Fund that are better equipped to deal with aid issues. Within member governments, relations with the WTO are usually the responsibility of the trade or foreign ministry, while multilateral financial institutions, including the regional development banks, are generally the responsibility of the finance ministry. Thus, aid for trade, one of the key tasks on the WTO agenda, has weak institutional links to trade negotiations. In fact, it might be more accurate to say that it is wholly separate. The practicable solution is more effective coordination among the relevant institutions. The Marrakesh Agreement, which established the WTO as the successor to the General Agreement on Tariffs and Trade in 1994, sets out the purpose of achieving greater coherence

between the WTO and other international agencies. One particularly noteworthy initiative is the Enhanced Integrated Framework for least-developed countries, which encompasses extensive engagement and coordination among partner agencies, including the IMF, the United Nations Conference on Trade and Development, the World Bank, and the WTO. A more ambitious approach would be to link aid and trade explicitly. A concrete funding mechanism in trade agreements warrants serious consideration, particularly in areas such as the WTO’s tradefacilitation negotiations, where capacity-building in developing countries is a key issue. Nonetheless, requiring donations from member countries would be a step in the wrong direction; the WTO is not an aid agency. Rather, WTO trade agreements could establish effective links with multilateral and regional development banks, thereby helping to realise the principle of closer international coordination set out in the Marrakesh Agreement. The two rabbits of international trade can be caught. But doing so requires innovative approaches that help to ensure that trade serves developing countries, rather than vice versa. © Project Syndicate

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business daily February 5, 2013

CLOSING Global consumer confidence dips

Football match-fixing network unearthed

Global consumer confidence dipped at the end of last year, a survey showed yesterday. Concerns about U.S. budget talks, which have since eased, and worries about the euro zone crisis weighed on consumer sentiment, according to the survey by global information and insights company Nielsen. Sixty three percent of respondents said it was not a good time to buy things over the next 12 months, with spending restraint most notable among Europeans. Consumers in the Asia Pacific were most upbeat but even there 59 percent said the next 12 months would not be a good time to spend, the survey showed.

World Cup and European Championship qualifiers were among more than 380 professional soccer matches targeted by criminals trying to fix games to generate more than 8 million euros (US$10.9 million) in profit, Europol said. An 18-month investigation found 425 match officials, club executives, players and criminals in 15 countries worked to cheat, including during international games and Champions League matches, Europol said yesterday. “Unfortunately this also now includes the world of football, where illegal profits are made on a scale and in a way that threatens the very fabric of the game,” said Rob Wainwright, director of Europol.

U.K. sets out new law to break up errant banks

Pressure on Rajoy rattles Spanish bonds

New laws will make banks ring-fence retail operations David Milliken and Matt Scuffham

Spanish and Italian yields rise as political risks grow

interest rates this week. Mr Osborne repeated his call for fines to be paid out of money that would have funded bankers’ bonuses, saying it would cause “enormous public anger” if the taxpayer footed the bill. Banks have come to accept the idea of a ring-fence, having initially resisted it. A source close to one of Britain’s biggest lenders said the industry’s main concern had been to have clarity over what future regulation will involve. The source said that, with lenders already under intense scrutiny, Mr Osborne’s decision was a longer term move designed to prevent banks letting standards drop when attention is less focused on the industry. Legislation was due to go to parliament later yesterday, and Mr Osborne said he expected it to be passed within a year. Shares in UK banks showed little reaction to the news. Barclays and HSBC was down 0.3 percent, with Lloyds down 0.2 percent and RBS down 0.6 percent ahead of its Libor settlement.

panish government bond yields rose sharply yesterday as investors grew wary that mounting political uncertainty could derail this year’s rally and the pressure of upcoming bond auctions exacerbating the selloff. In Spain, Prime Minister Mariano Rajoy was facing calls to resign over a corruption scandal in which he denies any wrongdoing. Traders also cited the growing popularity of Italian former premier Silvio Berlusconi, who stepped down in 2011 with Italy in the middle of a full-blown economic crisis, as a big worry for investors before elections this month. Spanish 10-year government bond yields rose 20 basis points to 5.42 percent while Italian yields were 9 bps higher at 4.42 percent. “It’s that worry of political instability in both Spain and Italy,” a trader said. “Rajoy is under a bit of pressure and Berlusconi seems to be making a good old comeback in the polls as well.” “A lot of people have been bullish Spain and Italy for a few months and it’s come a long way but there’s a lot of supply to get through and a lot of the early-year money has gone to work.” Peripheral debt has started the year strongly, aided by the plentiful supply of cash from central banks and the promise that the European Central Bank will step in and buy bonds of struggling states if necessary. However, Commerzbank AG strategists said the time was right to start cutting back investments in peripheral debt as current low yield levels tested technical supports and the Spanish political risks mounted. The selloff hit sovereigns right across the region’s periphery of weak states, with Irish, Greek and Portuguese bond yields also moving higher on the day, but an upcoming sale of Spanish bonds on Thursday exaggerated the selloff there. “There’s probably not enough in terms of two-way flow to absorb the selling that’s occurring, which means that yields rise and spreads widen. There’d be a reluctance from dealers to get too long given the supply that’s coming later in the week,” said Peter Chatwell, strategist at Credit Agricole SA in London.

Reuters

Mr Osborne aims to strengthen sanctions against failed bankers

ritish banks that fail to guard their day-to-day banking from risky investment activities will face being dismantled, finance minister George Osborne said yesterday. Britain is shaking up its system of bank regulation following the 2008 financial crisis, when the government poured 65 billion pounds (US$102 billion) of taxpayers’ money into rescues of Royal Bank of Scotland and Lloyds Plc. Banks were already expected to have to “ring-fence” activities such as standard bank accounts and payments from riskier investment banking, something which will hit major players such as Barclays Plc, HSBC Holdings Plc, and RBS. But Mr Osborne said he is prepared to go further. “If a bank flouts the rules, the regulator and the Treasury will have the power to break it up altogether – full separation, not just a ring-fence. In the jargon, we will ‘electrify the ring fence’,” he said in a speech. The break up of banks which fail to keep to the rules was demanded by lawmakers who reviewed government

plans late last year. Under the new rules, the Bank of England will monitor whether banks ensure that risks taken by their investment banking arms do not endanger their retail sides. If the central bank finds a breach, the government will make the final politically-sensitive decision on whether to impose a “nuclear option” of forcing banks to sell one of the two arms. Mr Osborne said the government could strengthen sanctions against directors of failed banks to prevent them from working in the industry. “I want to see how we can strengthen the sanctions regime for senior bankers – for example, should there be a presumption that the directors of failed banks do not work in the sector again?” he said. Britain’s banks have been dogged by scandals including the mis-selling of insurance and complicated hedging products, the rigging of global benchmark rates and breaches of antimoney laundering rules. RBS is expected to be fined for attempted manipulation of benchmark