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
Year I Number 215 Wednesday February 6, 2013 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP 6.00
Cloudy future for yellow taxis
www.macaubusinessdaily.com
Home blues for Okada The Osaka stock exchange has launched a probe on pachinko manufacturer Universal Entertainment Corp, chaired by former Wynn Macau Ltd director Kazuo Okada. The Japanese authorities want to know more about how payments made to a politically-connected consultant advance the firm’s casino project in the Philippines.
The yellow taxi operator’s contract expires today but Vang Iek Radio Taxi Co was still uncertain whether the government would extend it for a second time. The Transport Bureau says it would discuss a long-term extension, of up to 18 months, with Vang Iek after a window for appeals against a court ruling had closed. The company general manager says Vang Iek has no intention of appealing and showed
confidence in being granted an extension soon. Bureau director Wong Wan has said he is ready to issue new 100 licences for conventional taxis should Vang Iek fail to reach the required standard. But industry representatives have doubts that black taxis could replace yellow taxis and have instead called for more transparency in the negotiations. More on page 4 I SSN 2226-8294
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HANG SENG INDEX 23406
23317
23228
First approval for urban planning Even though legislators fear the bylaws related to the urban planning law won’t be ready on time, the assembly still passed the long-awaited bill. The government says it is open to changes and that a legal framework to certify planning professionals – a key part of an advisory council – is coming soon. Page 5
Sands close to Madrid resort decision
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February 5
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Casino developer Las Vegas Sands Corp will announce on Friday its preferred site in its bid to build a US$9 billion (70.2 billion patacas) gaming leisure resort on the outskirts of Madrid. The parent of Sands China Ltd is inching towards Alcorcón, a largely commercial district to the southwest of the Spanish capital. LVS’ president and chief operating officer Michael Leven said the operator might seek to take some VIP players from its Asian casino businesses over to Spain. Page 3
Aspect buys casino games developer
Name
%Day
CHINA RES POWER
0.90
TINGYI HLDG CO
0.67
COSCO PAC LTD
0.32
WANT WANT CHINA
-
POWER ASSETS HOL
-0.22
BANK OF CHINA-H
-3.81
HENDERSON LAND D
-3.86
NEW WORLD DEV
-4.02
WHARF HLDG
-4.15
CHINA PETROLEU-H
-6.42
Source: Bloomberg
Macau-based Aspect Gaming Ltd, a supplier of casino slot machines and equipment, is trying to benefit from casino operators’ bet on electronic baccarat table games. The company has bought Longshot Interactive LLC, a Las Vegas-based Asian casino games developer that has churned out a number of baccarat variants. Page 6
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business daily February 6, 2013
macau AERL rolling chip turnover down again VIP room gaming promoter Asia Entertainment & Resources Ltd announced on Monday that its unaudited rolling chip turnover for last month dropped by 26 percent year-on-year, to US$1.26 billion (10.1 billion patacas). The Nasdaq-listed company said the decline was attributable to its self-directed tightening of credit to agents due to the slowing economy in the mainland. United States-based brokerage firm Sterne Agee says that Asia Entertainment & Resources has been more conservative than most Macau promoters in extending credit but expects it to become “more aggressive with credit loosening to agents in stages”.
Japan probes Okada’s Philippines payments Exchange probing whether pachinko manufacturer inflated profits
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he Osaka Securities Exchange is investigating how Universal Entertainment Corp accounted for millions of dollars paid in 2010 to advance the Japanese firm’s casino project on Manila Bay, people with direct knowledge of the inquiry said. Universal founder and chairman Kazuo Okada has been in a legal dispute since early 2012 with casino magnate Steve Wynn, the chairman of gaming operator Wynn Macau Ltd. Mr Okada had been an investor in Wynn Macau’s parent company Wynn Resorts Ltd before the board voted to redeem his investment at a discount after finding his company paid US$110,000 (879,00 patacas) to entertain gaming regulators from South Korea and the Philippines in Macau and in Las Vegas. Wynn said that made Mr Okada an unsuitable partner. The exchange’s involvement is the first time the payments have drawn the attention of Japanese regulators. The FBI and Philippine authorities have been investigating US$40 million in payments to a politically-
connected consultant in Manila since last year. The exchange, which oversees Universal’s Osaka stock listing, has asked the company to explain how the payments were treated in Universal’s financial statements for the fiscal year to March 2010, said people with knowledge of the request, who didn’t want to be named as the investigation is ongoing. Universal has said it carried out its business in the Philippines lawfully. In a statement last month, Universal said there was a “need to verify the suitability of accounting procedures”, and it would revise its accounting if directed to do so by a panel of three outside experts it has commissioned to look into the payments.
Wynn wins One of the issues examined by the Osaka exchange involves a US$10 million payment that was wired to Rodolfo Soriano, a former consultant to the gaming regulator in the Philippines, from a Universal affiliate in Hong Kong.
Mr Soriano is described as a “confidante” of Efraim Genuino, the former chairman of the PAGCOR, Philippine Amusement and Gaming Corporation – the regulator-cumoperator of casino gaming. The payment was immediately circulated back to Universal by a former employee in May 2010, as the company was preparing to release its financial statements that June, the people with knowledge of the investigation told Reuters. The exchange is focused on whether Universal improperly booked part of the payment as an asset on its balance sheet, inflating its profits, the people said. Universal has sued three former employees over the US$10 million transfer, claiming they made the payment without authorisation. The Philippines National Bureau of Investigation has been examining the payments to Mr Soriano as a potential bribery case. People interviewed by the Federal Bureau of Investigation have said the United States have also indicated an interest in whether the payments
violated the Foreign Corrupt Practices Act. The bureau has been involved as there is evidence that funds paid to Mr Soriano originated at an American bank account of a Universal affiliate. Mr Okada has said he was singled out after raising questions about Wynn’s operations here, namely over a US$135 million donation to the University of Macau in 2011. The Nevada Gaming Control Board has looked at the issue but “determined that [Mr] Okada’s allegations are unfounded,” Wynn Resorts told the New York stock exchange on Monday. In addition, a Nevada court dismissed a shareholder action against the company based on the university donation, saying “there was insufficient legal basis for the case to proceed,” Wynn added. Finally, proxy advisory firm Institutional Shareholder Services issued a report recommending that Wynn shareholders vote to remove Mr Okada from the board at a February 22 special meeting. Reuters/Bloomberg News
Universal Entertainment Corp is listed in the Osaka Securities Exchange
Still early days for VIP rebound: Jefferies
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he signs from mainland Chinese economy are still far from promising for a growth rebound in the VIP gaming market, investment analysts at Jefferies Group wrote in note to investors. The value registered
at art and antique auctions has been falling and China’s purchasing managers index and export orders remain “bumpy,” the note released on Monday stresses. In addition, rising overdue loans in the mainland “cast doubts on VIP outlook” for Macau’s
gaming industry, Jefferies wrote. And with a new Chinese leadership taking over, “anti-corruption risks should not be ignored,” the analysts added. The firm believes Macau’s gross gaming revenue will grow by 8 percent this year, which
would slower than the 13.5 percent recorded last year. But that increase will mostly come from massmarket gaming, Jefferies wrote. “We think it is early to call for a strong VIP growth rebound.” Macau’s casino VIP gross gaming revenue rose just 2.9 percent in
the fourth quarter of last year in comparison with the equivalent quarter a year earlier. For only the second time in the past 12 quarters, VIP revenue accounted for fewer than 70 percent of total market-wide gross gaming revenue. V.Q.
February 6, 2013 business daily | 3
MACAU
LVS to reveal preferred site for possible Spain project this week Shortlist of two, with one location out in front says Michael Leven, the firm’s president Michael Grimes in London
michael.grimes@macaubusinessdaily.com
Spain a possible draw for Asian high rollers
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asino developer Las Vegas Sands Corp. is to announce on Friday its preferred site in its bid to build a US$9 billion (70.2 billion patacas) gaming leisure resort on the outskirts of Madrid in Spain. Michael Leven, president and chief operating officer of LVS gave the news during the International Casino Conference at ICE 2013 in London. Two sites are on the company’s shortlist – Alcorcón, a largely commercial district to the southwest of the Spanish capital, and Valdecarros to the southeast – but the company is leaning toward the first. “I think Alcorcón is the leading contender at this point,” explained Mr Leven in comments to the media outside the conference hall. “The nature of topography, the location [relative] to the city, the size of the sites and the availability to purchase the sites – are good. We could work on either one of the sites,” he added. The LVS president – who’s also responsible for the firm’s global development – said he hoped the president of the Madrid regional government would make the announcement about LVS’s preferred location, although he added that even if that happened, it didn’t mean LVS was the preferred or only bidder in the view of the regional government. LVS wants the rights to as much as 750 hectares of land close to Madrid so that it can become the landlord for the proposed scheme – which could be expanded later possibly even with the help of casino operators that are actually market rivals elsewhere. Mr Leven said LVS was willing to spend US$3.6 billion in equity – up to 40 percent of the total cost for phase one – with the rest funded from debt. He expected a return on investment of around 22 percent per year, which he said was in line with the company’s expectations in other
I think we’re very optimistic we can get it, and if we don’t, I’d be interested to see who gets it, because I think we’re the best at this Michael Leven, president and COO of LVS
markets where it already invests. The company also for the first time revealed more detail about the possible concepts for the scheme – including a casino inside a tent-like structure, and a venue for live shows in an egg-shaped pod. There’s also a proposal for a replica of Times Square in New York City, complete with neon signs and the famous moving ball that marks the New Year for revellers. Mr Leven said the whole square could be under cover, although he said the proposals were only indicative at this stage and he couldn’t release copies of the artwork to the media. “A couple of those buildings have passed Mr Adelson at this point. A couple of them are still in design. The idea of showing them [today] is so you get an idea of the kind of thing we are thinking about,” said the LVS COO.
“Gaming will probably be less than five percent of the total resort – if that,” he stated. But he stressed that some issues would require clearance from the European Union. “Individual countries or regions can do things but there are competitive situations that they [the EU] are concerned about; and how fair it is. We have lawyers working on the EU stuff at the moment, to make sure that what the region of Madrid has done and what Spain has done at national government level, has approved – adequately meets EU specifications,” said Mr Leven. The COO also stressed there was not yet a done deal with the Madrid regional government. “I think we’re very optimistic we can get it, and if we don’t, I’d be interested to see who gets it, because I think we’re the best at this. And we’re financially the most capable company in the business. The only other company that has anywhere near our financial capability is Genting [Group] and I can’t imagine that Genting would even bid for it,” he said. He added it was not likely to be called ‘EuroVegas’ as previously widely reported. Another, unrelated, casino resort proposal in Hungary is said to be proposing that name. “We really haven’t named it and I’m not sure we have to name it,” stated Mr Leven. “‘Euro’ itself has some connotations and we don’t really want to be confused with a bank,” he added. Business Daily reported recently that the Madrid regional government had passed enabling legislation for the principal of a casino resort, as a way as stimulating economic growth. Mr Leven said in London it might be possible to open phase one of its proposed scheme by New Year’s Eve 2018
ichael Leven of Las Vegas Sands Corp said yesterday the firm might seek to bring some VIP players from its Asian casino businesses over to Spain if it builds there. He added that in addition to the attractively low 10 percent tax on bets wagered that has been offered by the regional government, there would be the possibility of further reductions in gaming tax depending on how many jobs were created. A figure of 48,000 construction jobs was mentioned for the phase one construction alone. He also said there would be no sales tax on bets. In Singapore, where the firm operates Marina Bay Sands, there is a two band tax rate on gross gaming revenue, and Goods and Services Tax on top of that. Referring to the agreement with the Madrid regional government, Mr Leven stated: “Attached to the legislation is 10 percent on gross gaming. That’s down from 40 [percent]. There are incentives in terms of job creation – to lower the tax rate even further.” And although he didn’t cite tax rates as a draw for Asian VIP players to go to Spain (in Macau gaming tax is nearly 40 percent of the gross) on the sidelines of the ICE 2013 conference, he told the media: “We run the largest private air force [fleet] in the gaming industry and also in any private [non-airline] industry. Only government has more planes. And we do run Asian players from Asia to Las Vegas. And we can run players from Asia to here [Europe] at the high end.” “We’ve forecast for some of that, but we don’t think it will be an enormous part of our business, but we do have a list [of players] and I undoubtedly think they will ask the company,” said Mr Leven. “It’s a very interesting destination for Asians. There’s more cash in their pockets these days and [that] will be [growing] for the next ten years at least, so I think we’ll get some of that traffic which will help the project.” Although he added: “The VIP table count in the first phase is only 56 tables we estimate, so that’s not a big part of the business. This business [in Spain] is going to be the premium [mass] and mass market in terms of the casino part of it. In [Las] Vegas 70 percent of our profit comes from non-gaming, and 30 percent from gaming. We think that Spain – and Europe – will look more like Vegas than [like] Asia. In Asia 72 percent comes from gaming, and 28 percent from non-gaming.” M.G.
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HOSPITALITY Singular cities The number of visitors from mainland China has surged since 2003, when the authorities there began allowing them visas to travel here as individuals rather than as members of tour groups, which travel on collective visas. No data about the early years of the individual visa scheme have been made public. The earliest official statistics available are from 2008. The proportion of visitors from the mainland travelling on individual visas was almost 57 percent in 2008, but declined steeply in 2009. Since then the proportion has hovered between 41 percent and 44 percent. Successive restrictions on how often an individual can get an individual visa seem to have reduced the numbers of visitors taking advantage of the scheme, but not the numbers of mainland visitors generally.
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Talks on yellow taxis hit for being opaque The yellow taxi operator’s contract expires today but the operator was still uncertain yesterday whether the government would extend it Tony Lai
tony.lai@macaubusinessdaily.com
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Since the middle of 2010 the statistics on the individual visa scheme have included the places of origin of visitors travelling as individuals. About 42 percent of mainland visitors since then came here on individual visas. Visitors from the mainland’s big cities tend to take advantage of the individual visa scheme more than those from the provinces. Just over half of all visitors travelling on individual visas come from only six places. The proportions of visitors from each of these six places that come here as individuals are above the national average. The proportion of visitors from Tianjin that travel on individual visas is the highest, followed by the proportion from Shanghai and the proportion from Beijing. In each case the proportion is over 70 percent. J.I.D.
epresentatives of the taxi industry have called for the government to be more open about granting concessions in view of the confusion over the extension of the yellow taxi operator’s contract. A spokesperson for the Transport Bureau told Business Daily yesterday that the bureau would extend its contract with Vang Iek Radio Taxi Co, which runs 100 yellow taxis, before the contract expires today. The spokesperson would not say exactly how long the contract would be extended for, saying only that it would be at least 18 months. The general manager of Vang Iek, Mário Sin Ferreira, said: “We have yet to receive any information from the government on this.” But Mr Ferreira said he thought the extension would be granted today. Vang Iek sued the government in 2011, asking the Court of Second Instance to extend its contract for longer than the extra 18 months that the Transport Bureau had given it in August that year. The court rejected the suit last month. The Transport Bureau spokesperson said the bureau would discuss a long-term extension with Vang Iek after the 10-day window
for appeals against the court’s ruling had closed. Mr Ferreira said: “The period has already ended and we have said we have no intention of appealing.” He added: “We are also confident of reaching the standards required by the government as we aim to continue running the business.” Last month the Transport Bureau said Vang Iek had to improve its oncall service in older districts of the city and its service for the disabled. Mr Ferreira declined to say exactly what his company would do to bring its service up to the standard required by the government.
Black box On Saturday Transport Bureau director Wong Wan told reporters that the bureau was ready to issue new 100 licences for conventional taxis – black taxis – should Vang Iek fail to reach the standard required by the government. The vice-president of Macau Taxi Association, Tai Kam Leong, doubts that black taxis could replace yellow taxis. “These two kinds of taxi are different. Black taxis can tour the city and find passengers in the streets,
while the yellow taxis specialise in on-call services,” Mr Tai said. He said the government should disclose more information to the public about its negotiations with Vang Iek. The chairman of the Macau Taxi Driver Mutual Association, Tony Kwok, said the negotiations “resembled a black-box operation”. Mr Kwok said: “The yellow taxi company has some 200 employees but are they aware what is going on? The authorities should make the negotiation process more transparent.” He added: “The government has pledged to discuss the longterm renewal terms with the Traffic Consultative Committee to increase transparency.” Mr Kwok is a member of the committee. He said the government should have a better programme for issuing new licences for black taxis, rather than regarding the issuance of new licences for black taxis a back-up plan in case Vang Iek failed to make the grade. He said the government should start making plans now as the licences of 230 out of the nearly 1,000 black taxis would expire in 2015.
February 6, 2013 business daily | 5
MACAU
Urban planning law gets nod amid worries Legislators are concerned over missing bylaws to complement the future blueprint Tony Lai
tony.lai@macaubusinessdaily.com
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he Legislative Assembly gave an initial approval to the two long-awaited bills yesterday, the urban planning law and the Land Law revision. But amid assembly members’ concerns the administration said they are open to introducing changes. Legislator Ng Kuok Cheong said the urban planning law left many details to be defined by bylaws at a later stage. “Supposedly we can approve the law by the summer but is the government sure it can enact the law as well as getting the relevant bylaws ready?” he asked. His fellow New Macau Association
member Au Kam San stressed that there was still no legal framework to certify urban planners and engineers, “affecting the credibility of the urban planning council”. The law will establish a council made up of professionals, residents’ representatives and government officials as an advisory body to discuss and review the city’s blueprints. This bill will also set up two types of urban plans – a master plan for setting strategic principles on the overall infrastructure and land developments in Macau, and detailed plans for specific areas. But legislator Kwan Tsui Hang was unhappy that the assembly
did not have a saying in the “key” master plan. Secretary for Transport and Public Works Lau Si Io said the master plan would be introduced to legislators like other important infrastructure projects. The legal framework to certify planning professionals was “at the final stage,” the official added. He stressed this bill would foster public participation and the public’s right to information through a mechanism of mandatory 60-day consultations for detailed plans. Francis Wong Chan Tong, head of Mr Lau’s cabinet, said this bill builds the city’s urban planning
to plug past loopholes, when the administration had relatively more discretionary power. But he stressed the importance of the flexibility of the law to “protect the rights of the public as well as the ones of investors and developers”. The assembly also gave the green light to the Land Law revision yesterday, even though some legislators worry the law grants the government too much power in granting land without public tender, as well as in the composition of the land grants committee. Both bills will now be up discussed in more detail within the assembly’s committees.
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business daily February 6, 2013
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Two markets The economic boom in recent years is associated with a rapidly expanding labour force. Never before has the labour force had so many workers. But the statistics on workers as a proportion of the population of working age – the labour force participation rate – do not paint such a simple picture. Labour force participation rates today are certainly much higher than the rates registered in the 1990s. In the 1990s they oscillated around 65 percent. In 2009 they were more than 72 percent. But this was not the case with participation rates among men only. The participation rates among men for most of the 1990s, up to 1998, were similar to and at times higher than today’s.
Labour force participation rate
%
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Aspect Gaming doubles down on baccarat bet
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Slots supplier buys casino games developer with an eye on electronic baccarat
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Vítor Quintã
vitorquinta@macaubusinessdaily.com
The high participation rates among men in the 1990s did not mean higher participation rates among all workers for the simple reason that participation rates among women were low. Participation rates among women were between 50 percent and 55 percent for most of the first half of the 1990s. Although participation rates among women have been rising most of the time since then, they did so very slowly at first and began to climb steeply only in the past decade. Participation rates among men fell for a few years after 1999, to a level almost 10 percentage points lower than before, so changes in participation rates among all workers were relatively slow. After the mid1990s participation rates among men declined for almost a decade. Only after 2009 did they reach levels comparable to those 20 years before. After the general fall in the early years of the past decade, participation rates among men and participation rates among women began rising together, pushing participation rates for all workers up to record levels. J.I.D. The content of this column is the work of Business Daily’s journalists.
79.8 %
Highest ever labour force participation rate among men, in 1993
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spect Gaming (Macau) Ltd, a supplier of casino slot machines and equipment, announced on Monday the acquisition of Longshot Interactive, LLC, a Las Vegas-based Asian casino games developer. The deal “will help take the company beyond traditional slots and into the baccarat arena,” Aspect chief executive Justin Nguyen said in an e-mail to Business Daily. The supplier is trying to benefit from casinos’ bet on electronic table games in order to deal with the restrictions on live gaming tables and the labour shortage. In 2012, 91 percent of all the revenue from casino games in Macau came from VIP and mass-market baccarat combined. By comparison slot machines accounted for just 4.4 percent, even though operators have pushed up minimum bets on their live tables in order to move lower-spending players onto electronic baccarat. The adoption of electronic tables is “growing rapidly” but it remains based on conventional baccarat, “so dependence on high wagers and/ or volume remains a problem,” Mr Nguyen said. Longshot has developed a number of baccarat variants that
give gamblers “a perceived edge and higher volatility, while increasing hold for the house,” he added. “Ultimately, we feel these baccarat variants will be the basis for the ‘video poker of Asia’,” the executive said in a press statement. Macau-based Aspect has its 65 people-strong game development operation in Shanghai because of the
good supply of university graduates in that city working at competitive rates of pay. “Gaming growth will be driven by the rising Chinese middle class” as long as suppliers are able to bring out “culturally relevant” content, said Longshot chief executive Ameesh Patel. The principals of Longshot will be joining Aspect’s advisory board.
Your voice: let casinos be
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he most commonly held opinion among respondents to a survey on Business Daily’s website is that the growth of the gaming industry does not need to be controlled. The results of the latest of our regular online surveys show that 37 percent of respondents think the casinos should be allowed to grow unhindered. Only 21 percent agreed that the government’s cap on the number of live gaming tables was a good way to control the industry. Another 21 percent agreed that limiting the number of casinos
was the best way to control the sector’s growth. And the other 21 percent think that the more money a gaming company invests in a development, the more gaming tables it should get. As Macau gets ready to vote in Legislative Assembly elections later this year, a new poll now on our website (www.macaubusinessdaily.com) seeks your opinion on political reform. Tell us how you feel about the reforms last year that added two directly-elected seats and two indirectly-elected seats to the assembly. Are these reforms too bold, too timid or just right?
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February 6, 2013 business daily | 7
MACAU Only seven fined for operating illegal inns Since the law banning the operation of illegal accommodation came into effect in August 2010, the Macau Government Tourist Office has sealed 316 alleged illegal inn units, in which 119 cases involved penalties. Operators of illegal inns could be fined between 200,000 and 800,000 patacas (US$100,000), while those soliciting business for illegal inns could be fined for 20,000 to 100,000 patacas, the law states. However, only seven out of the 119 cases have led to fines so far, the office said.
Presales drive housing market, says Ricacorp
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ousing prices rose by between 2 percent and 3 percent last month from December, but the number of homes sold in January still reached about 800, Ricacorp (Macau) Properties Ltd says. Official data show that in December 834 homes were sold, one-third fewer than in November. The average price of housing rose by 6.8 percent in December to 70,407 patacas (US$8,815) per square metre, the second-highest price last year. “In January, the trade was dominated by sales of unfinished flats,” Ricacorp regional director Jacky Wong says in an analysis. Mr Wong says sales of homes in Pearl Horizon, a project in Areia Preta by Hong Kong’s Polytec Asset Holdings Ltd, exemplified last month’s trend.
The average price of floor space in Pearl Horizon was about 7,000 patacas per square foot, he says. However, Ricacorp expects the enactment of a bill on sales of unfinished housing, which is now going through the Legislative Assembly, to curb such sales. It says stricter rules may slow the process of obtaining permits for new housing, so constricting the supply of unfinished flats, Ricacorp noted. In the fourth quarter of last year 85 private housing developments, together meant to contain some 7,200 homes, were under construction or awaiting government permits, official data show. Of those 7,200 homes, 5,220 will be built on Pearl Horizon’s plot P, according to the Land, Public Works and Transport Bureau. S.L.
Corporate
CTM launches ceiling for Sands China’s spring roaming data services cleaning for elderly The city’s biggest telecommunications operator, CTM - Macau Telecom Co Ltd, has launched an offer of unlimited daily roaming data service at 98 patacas (US$12) per day in mainland China. The service is also “a protective measure to safeguard customers when using data service abroad,” the company said in a statement released last week. CTM has implemented several measures to help customers reduce their costs when using data services. That include a charge ceiling of 220 patacas (2G network) and 500 patacas (3G network) for local data usage, and an SMS alert for roaming data charge. Moreover, the company has extended the coverage of its ‘Just One SIM’ service to a further seven mainland provinces, including Guangdong, Beijing, Shanghai, Tianjin, Jiangsu, Zhejiang, and Fujian. CTM’s roaming data packages are already available in 14 destinations, including Hong Kong, Taiwan, Japan and South Korea.
A bill going through the Legislative Assembly would regulate sales of unfinished homes (Photo: Manuel Cardoso)
A group of 45 volunteers from the Sands China Care Ambassadors programme visited 15 single-living elderly here Sunday, helping clean their homes before the arrival of the Year of the Snake. The volunteers, divided in 15 teams, also brought each household a Chinese New Year special gift pack, casino operator Sands China Ltd said in a statement. This is the fourth consecutive year the Sands China Care Ambassadors have undertaken the spring cleaning activity. The 15 homes were among the livealone elderly sponsored by Sands China to receive support from the Peng On Tung Tele-Assistance Centre. This year, the operator is donating 240,000 patacas (US$30,000) to sponsor 200 live-alone elderly to use a teleassistance device during a whole year. Sands China has donated a total of 636,000 patacas since it began its sponsorship of the programme in 2010, helping 611 elderly.
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business daily February 6, 2013
GREATER CHINA HK’s PMI shows strongest rise in 11 months Helped by increased orders from mainland China, manufacturing activity in Hong Kong rose in January after contracting for several months, according to an industry survey that showed the city state joining in a recovery in manufacturing globally. Hong Kong’s Purchasing Managers’ index (PMI) rose to 52.5 points last month, the strongest improvement in private sector business conditions since last February. Growth in the volume of new orders has been sustained for three months and the output index increased for the fourth consecutive month in January, according to the survey by HSBC Holdings Plc and Markit Group Ltd.
Chicken woes hit Yum profit KFC parent Yum Brands Inc. warned on Monday that it expects 2013 earnings to shrink as it struggles to manage a food safety scare in China, and sees no return to growth in restaurant sales there until the fourth quarter. The company’s shares fell 5.6 percent in after-hours trading, as Wall Street analysts and investors digested the disappointing news from the company. Yum reported a 6 percent drop in fourth-quarter sales at established restaurants in China due to “adverse publicity” regarding chemical residue found in some of its chicken supply. As a result, Yum forecast a “mid-single digit” percentage decline in earnings per share for 2013.
Vanke says Jan sales up 56 pct China Vanke Co Ltd, China’s largest real estate developer by turnover, boosted sales 56 percent in January from a year earlier on the back of eight new projects amid signs of recovery in China’s property market. Vanke logged January sales of 1.6 million new square metres for 19.1 billion yuan (US$3.1 billion). The pace of growth was, however, slower than a steep 142 percent climb in December. Vanke said property sales for 2012 reached a record 141.2 billion yuan, up 16 percent from the previous year.
Big Four Banks’ new loans tick up China’s four largest banks – the Industrial and Commercial Bank of China Ltd, Agricultural Bank of China Ltd, China Construction Bank Corp and Bank of China Ltd – extended 370 billion yuan (US$59.4 billion) of new loans in January, up from 320 billion yuan in the same period last year, the official China Securities Journal reported yesterday. That marked an uptick from 210 billion yuan in December, after total new bank loans had steadily declined during 2012 as loans fell as a proportion of total social financing.
Baidu revenue growth slows Baidu Inc., China’s largest search engine company, reported its slowest profit growth since 2009, as competition in the sector heats up and more users switch to mobile search. Baidu had previously warned of a soft fourth quarter as China’s economy slows. Fourth-quarter revenue of US$1.017 billion was above Wall Street targets and the company’s own forecast of US$979.3 million to US$1.010 billion. But the 41.6 percent year-on-year revenue growth rate underscored a continuing slowdown in Baidu’s revenue growth, which expanded at roughly double that pace in the year-ago period.
Services industries expand as retailing aids recovery Growth in the sector hit a four-month high in January
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hina’s services industries expanded at the fastest pace in four months in January, a private survey found, supporting a recovery in the world’s secondbiggest economy. The services Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics yesterday rose to 54 from 51.7 in December. A reading above 50 indicates expansion. A separate government-backed survey published on Sunday showed services industries expanded at the fastest pace since August. Both showed that the retailing industry saw an “obvious” improvement in January. Yesterday’s report adds to signs that growth will accelerate for a second quarter after an almost twoyear slowdown. The government is counting on expansion of services and domestic demand to become a bigger part of the economy as it tries to reduce the reliance on exports and investment spending. “China’s growth recovery is now on a firmer footing,” Qu Hongbin, chief China economist for HSBC
in Hong Kong, said in yesterday’s statement. “Still-solid job gains plus higher business expectations bode well for further improvement
Still-solid job gains plus higher business expectations bode well for further improvement of services sectors’ growth Qu Hongbin, chief China economist, HSBC Holdings
PBOC pumps record cash into market Injection expected to stabilise short-term rates – traders Pete Sweeney and Lu Jianxin
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hina’s central bank injected a whopping 450 billion yuan (US$72.20 billion) into the money markets yesterday, the largest single-day injection on record, showing Beijing’s increased confidence in its ability to use shortterm precision tools to manage the money supply. Traders told Reuters that the infusion of cash was made during ordinary open market operations, using 14-day reverse bond repurchase agreements, which will drain money back out of the system in two weeks. The People’s Bank of China (PBOC) has increasingly relied on such tools to maintain short-term liquidity and hold down interest rates, instead of making longer term adjustments such as cuts to bank reserve requirement ratios (RRR) that regulators fear could provoke inflation. Liquidity typically tightens with
the approach of the Chinese Spring Festival holiday, as individuals withdraw cash to spend on gifts, food and travel. Some analysts had speculated that the central bank might be forced to cut the RRR before the holiday to prevent a squeeze, but instead authorities leaned more heavily than ever on short-term open market operations. “With the Spring Festival drawing near, short-term liquidity in the money market is relatively tight,” said a senior trader at a Chinese state-owned bank in Beijing. The central bank has steadily been injecting cash since last week to stabilise short-term rates, he said, which often spike in the run-up to traditional festivals. Markets will be closed for a week starting on February 9 for the Lunar New Year holiday. This time around it appears the PBOC has found the right formula
of services sectors’ growth.” China’s economy expanded 7.9 percent in the final three months of 2012 from a year earlier, reversing a seven-quarter deceleration. Full-year expansion was 7.8 percent in 2012, the weakest pace in 13 years. The pace may pick up to 8.1 percent in the first quarter, according to the median estimate in a Bloomberg
to keep rates relatively stable, said Frances Cheung, strategist at Credit Agricole CIB. “We have not seen the spikes in repo rates that we usually did see ahead of the Chinese New Year, likely upon willingness from the PBOC to provide liquidity,” she wrote in a research note yesterday. The benchmark 7-day repo rate began moving upward as the Spring Festival approached, but yesterday’s massive injection has signalled to the market the bank’s determination to keep rates in check by lowering the price of money. “Now that the central bank has announced that it will more frequently use open market operations to adjust liquidity, the market widely expects that money market rates will stabilise and will not spike too much even during holidays or at the end of months or quarters,” said the senior trader in Beijing. Market participants said the PBOC’s recently announced decision to allow select institutions to bid for reverse repos on a daily basis, instead of just on Mondays and Wednesdays, shows that it is planning to intensify the tempo and precision with which it moves money in and out of the interbank market. “We believe interbank rates will only climb a little bit the rest of this week and the PBOC is unlikely to cut RRR as it avoids sending easing signals,” wrote Ting Lu and Xiaojia Zhi, economists at Bank of America Merrill Lynch, in a research note. Reuters
February 6, 2013 business daily | 9
GREATER CHINA China Southern falls on airports fees China Southern Airlines Co., the nation’s biggest carrier by passengers, fell the most in almost eight months in Hong Kong trading, leading declines among Chinese airlines, after local airports announced fee increases. China Southern, based in Guangzhou, dropped as much as 5.1 percent, before closing 4.3 percent down at HK$4.48. Beijing Capital International Airport, the world’s second busiest airport by passengers, said regulators will allow it to charge domestic carriers’ international flights the same fees as foreign carriers effective April 1. The increased charge will also apply to domestic flights that connect to international flights.
Sinopec to sell US$3.1 bln in new stock, shares tumble Company expected to buy assets outside of China from its parent
C
Nearly a third of the firms polled expect business to expand
News survey of analysts last month. A separate non-manufacturing purchasing managers’ index rose to 56.2 in January from 56.1 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said this week, the highest level in five months. The federation’s manufacturing PMI released last Friday showed a fourth month of expansion and a separate gauge from HSBC and Markit rose to the highest level in two years. Services industries, which include retailing, telecommunications and transportation, accounted for 45
percent of gross domestic product last year, up from 41 percent in 2003. The government is seeking to increase the share to 47 percent by 2015. The proportion is about 90 percent in the U.S. The HSBC-Markit survey is based on data compiled from monthly replies to questionnaires sent to purchasing executives in more than 400 private services companies, according to today’s statement. The statistics bureau said today it’s expanding the sample size for its services survey to about 8,000 companies from 1,200. Bloomberg News
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hina Petroleum & Chemical Corp (Sinopec), Asia’s largest refiner, said it plans to raise about HK$24 billion (US$3.1 billion) in a share offering to fund its business development, sending its shares sharply lower as investors fretted about the volume of new stock in the market. Sinopec agreed to sell 2.85 billion new Hong Kong-traded shares at HK$8.45 each, a 9.5 percent discount to Monday’s close and 7.4 percent below the average closing price over the past 30 days, the company said in a filing to the Hong Kong stock exchange late on Monday. The stock fell 6.42 percent yesterday to close at HK$8.74, still above the placement price. Sinopec’s Shanghai-traded shares were down 2.13 percent. The shares were sold to a group of about 10 investors that included some of the world’s largest institutional investors and global fund managers, a source familiar with the transaction told Reuters. Sinopec said in its filing that the deal would help the company “enrich its shareholder base by attracting a number of high caliber investors to participate in the placing.” It gave no further description of the buyers. Proceeds from the offering would be used “as general working capital to fund the business development of the company,” Sinopec said. The refiner has been looking to buy
overseas assets from its parent Sinopec Group to boost oil and gas production. Fu Chengyu, chairman of Sinopec Group, said last year Sinopec Corp. could raise funds from the market to help fund those acquisitions. Sinopec’s state-owned parent bought a US$2.5 billion stake in a Nigerian oil field owned by Total SA in November and is in talks to buy more than US$1 billion of African assets from Afren Plc, people familiar with the matter said this week. Adding oil-producing assets would help Sinopec offset refining losses spurred by Chinese government price controls. “Sinopec will most likely use this money to buy upstream assets from the parent, which have better margins than the refining business,” Gordon Kwan, a Hong Kong-based analyst at Mirae Asset Securities, said by phone yesterday. Sinopec has struggled under a heavy debt load and Chinese price controls that have damped profitability from processing fuel. Those factors have forced the Beijing-based company to look for oil producing assets that can offset refining losses, said Erica Downs, a fellow at the John L. Thornton China Center at the Brookings Institution, a U.S.-based research group, in Washington. “It’s always been a long-term goal of the Chinese government to reduce their holdings in the listed units of the big three oil companies,” Mirae’s Mr Kwan said. Reuters/Bloomberg News
10 |
I
ndonesia saw the slowest growth in two years in the fourth quarter of 2012, with weak exports and a lack of government infrastructure spending casting a cloud over prospects for Southeast Asia’s largest economy this year. Indonesia’s resilience to the global economic slowdown and its domestic consumption have made it a magnet for foreign investment in recent years, but the country’s first annual trade deficit in 2012 has put pressure on the rupiah currency. Fourth quarter growth in gross domestic product was 6.1 percent from a year ago, weaker than a median forecast for 6.2 percent in a Reuters poll. That took full-year growth to 6.2 percent, also just under the poll forecast and below 2011’s
pace of 6.5 percent. “We expect that Indonesia’s GDP will still be affected by slower trade performance in 2013, while the domestic economy will remain the backbone to support overall growth,” said Andry Asmoro, economist at Bank Mandiri in Jakarta. On a quarter-to-quarter basis, the economy contracted 1.45 percent in October-December, according to the statistics bureau, or more than the poll forecast of a 1.3 percent drop. In the three preceding years, Indonesia also reported a contraction in the fourth quarter on a seasonallyunadjusted basis, as a lack of harvests during the period slowed growth in agriculture. In each of the past three years, Indonesia has had annual growth
business daily February 6, 2013
of more than 6 percent, spurring global interest in the resource-rich country that is Southeast Asia’s largest economy. Investors have been drawn by its resources, a rising middle class that’s consuming more and a young population.
Investment strategy During 2012, Indonesia saw robust investment and consumption. Auto sales set a record of 1 million vehicles despite regulations requiring higher downpayments. Private consumption slowed slightly from the prior three months but still grew at 5.4 percent in the fourth quarter. Growth was led by transport and communications, and hotel and restaurant sectors, while
Third straight year in which growth topped 6 pct
service growth quickened. Domestic consumption, which accounts more than 50 percent of the economy, helped the country attract a record 221 trillion rupiah (US$22.8 billion) in foreign direct investment last year, a 26 percent increase from 2011. Economists say the government must slash costly fuel subsidies this year and re-direct the money to infrastructure, but this would be a politically risky move in a country where previous fuel hikes have led to huge protests. In 2012, Indonesia spent 211 trillion rupiah on fuel subsidies. If fuel costs are raised, inflation will rise from 2012’s tame 4.32 percent level, which was kept down after the government scrapped a plan to hike fuel prices early in the year. Low inflation has let Bank Indonesia keep its benchmark rate at a record low of 5.75 percent for 11 months. Analysts expect the central bank will hold its policy rate at a February 12 meeting, as January inflation stayed benign at 4.57 percent, while policymakers are keen to prop up domestic growth in the face of an uncertain global trade recovery. “We expect GDP growth to average a below consensus 5.6 percent in 2013, with most of the disappointment coming towards the end of the year,” wrote Robert Prior-Wandesforde, economist at Credit Suisse AG. “This mainly reflects our view that Bank Indonesia will be forced to tighten policy as current account funding problems and an associated inflation disappointment causes the rupiah to depreciate more abruptly,” he said. Reuters
Philippine inflation inches up in January Monetary policy seen on hold as risk broadly balanced
P
hilippine annual inflation quickened in January, as expected, but the central bank is likely to keep interest rates on hold in the near term as inflationary pressures stay manageable. Risks to inflation appeared broadly balanced, the central bank has said but it was closely watching strong capital inflows because they posed potential upside risks to its price outlook. The consumer price index in January rose 3.0 percent from a year earlier, the highest since October’s 3.1 percent with slight increases in food costs. A Reuters poll had forecast January inflation at 3.0 percent. Core inflation, which strips out volatile food and energy prices, was 3.6 percent from a year earlier, matching the rate in October, while month-on-month inflation was 0.5 percent, accelerating from -0.1 percent in December. Despite the slight pick-up in consumer prices, the market believes the central bank may stand pat on its monetary policy for now with expectations average inflation this
year will come in within the central bank’s 3 to 5 percent target range. A rise in rates may come later this year, some analysts said. “Overall, inflation pressures will increase more than what is implied in the central bank’s current forecast,” said Euben Paracuelles, economist at Nomura in Singapore. “At some point they will start to sound a little bit more hawkish to try and contain the impact of rising headline and core inflation on inflation expectations.” The Philippine economy’s resilience amid the global downturn has attracted an influx of foreign funds, which have driven a nearly 11 percent rise in the stock market index so far this year, making it Asia’s second best performing bourse after Vietnam. These flows have also led the peso to appreciate around 1 percent against the dollar after surging nearly 7 percent last year. The central bank, which kept its benchmark rate steady at a record low of 3.5 percent last month, has said it was ready to deploy more
macroprudential measures, if needed, to deal with capital inflows and manage market volatilities. At its January 24 policy meeting, the central bank trimmed its forecast
for average inflation in 2013 to 3.0 percent from 3.1 percent but raised its 2014 forecast to 3.2 percent from 2.9 percent. Reuters
Consumer prices increased to a three-month high
February 6, 2013 business daily | 11
RBA signals room to ease further Australia central bank holds key rate
Kingfisher Air loses US$142 mln Debt-ridden and with no customers, Kingfisher Airlines Ltd posted a 7.55 billion rupees (US$142 million) loss in the three months to December 31 as its planes sat idle, creditors circled and regulators rebuffed the Indian airline’s revival plans. Kingfisher, which has been stripped of its flying licence, owes an estimated US$2.5 billion to banks, staff, airports and oil companies, but maintained it was “a going concern” in its results statement. The airline, once India’s second-biggest, has spent the past few months negotiating with its creditors and India’s aviation authorities. The country’s civil aviation minister has said Kingfisher needs at least US$186 million to fly again. Kingfisher’s auditors, B.K. Ramadhyani & Co, said in its quarterly review report that an accounting method used by the airline to calculate costs incurred for aircraft maintenance and repairs was “not in accordance with generally accepted accounting standards prevalent in India”. Had it used generally accepted accounting standards, the loss for the quarter would have been 10.90 billion rupees, the auditor said in the report that was issued by the stock exchange.
Wayne Cole
The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand Glenn Stevens, RBA governor
Tata seeks investors for expansion
A
ustralia’s central bank held its main cash rate at a record low of 3.0 percent yesterday, as expected, but left the door wide open for further easing if necessary to support the economy. The Australian dollar dipped as the explicit easing bias surprised some. Investors had priced in only a limited chance of a cut from the Reserve Bank of Australia (RBA) so soon after its December move. Indeed, RBA governor Glenn Stevens said the central bank judged it prudent to hold rates steady as the impact of past cuts had yet to be felt. He also pointed to signs of improvement in China and the United States, and to a pick-up in global markets in general. Yet he also made it clear rates could go lower if needed. “The Board’s view is that with inflation likely to be consistent with the target, and with growth likely to
be a little below trend over the coming year, an accommodative stance of monetary policy is appropriate,” said Mr Stevens. “The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand.” Financial markets had only seen a one-in-five chance of an easing this month, while a Reuters poll of 23 analysts had found all but one expected the RBA to hold steady. “It’s clear that the easing bias is still there,” said Su-Lin Ong, a senior economist at RBC Capital Markets. “The bank remains hopeful that the amount of easing to date will see the non-resources part of the economy pick up, but we think they’re being a little optimistic on that part,” she added. “We still think they will cut in the second quarter.” Figures out earlier yesterday showed a jump in exports of iron ore
and coal in December helped shrink the country’s trade deficit. Importantly, spot prices for iron ore, Australia’s single biggest export earner, have recovered strongly from an alarming drop last year which will underpin mining profits, tax receipts and economic growth in general. Reuters
KEY POINTS RBA holds interest rates at 3 pct Sees room for further easing if economy needs it Market implies at least one more cut to all-time low of 2.75 pct
Tata Power Co., India’s second-largest generator, is seeking investors to help its renewables unit more than double capacity in five years and acquire projects at home and overseas. The unit of India’s largest business group, which plans to spend about 17.5 billion rupees (US$328 million) annually, may also consider selling shares in Tata Power Renewable Energy Ltd, Rahul Shah, chief of business development at the generator, said. The company plans to build 2,000 megawatts of wind, solar, hydro and geothermal plants from a total of 852 megawatts last year. Tata Power, part of the group led by Cyrus Mistry, is planning to boost clean-energy generation to a fourth of its capacity as coal prices increase and the costs of alternative sources decline. A shortage of fossil fuel used in thermal power projects has prompted India to grant incentives to wind and solar plants to cut chronic blackouts that the government says shaves about 1.2 percentage points off annual economic growth.
Toyota lifts profit forecast Expects deliveries to rise about 7 pct in China this year
T
oyota Motor Corp., the world’s biggest carmaker, raised its profit forecast after the yen weakened more than any other currency, raising the value of Japanese cars sold overseas. Net income in the year ending March will probably reach a five-year high of 860 billion yen (US$9.3 billion), exceeding the previous 780 billion yen forecast, Japan’s biggest manufacturer said in a statement yesterday. The company raised its estimate for operating income by 9.5 percent and revenue by 2.3 percent. After years of struggling through natural disasters, the humbling recall of millions of vehicles and a local currency that had climbed to a post-war high, Toyota is leading the revival of Japan Inc. Behind the recovery is the yen, whose 14 percent drop since November 13 is making everything from Japanese cars to vacuum cleaners more competitive in the U.S.
and Europe. “The weaker yen will allow Japanese carmakers to price their vehicles at a more competitive level, and this will help improve sales of cars in the premium segment like the Lexus,” said Koichi Sugimoto, a Tokyo-based auto analyst at BNP Paribas SA. “If things go well, Japanese carmakers may boost their market share in the U.S. to as much as 40 percent.” Toyota has gained 47 percent in Tokyo trading since the yen began tumbling in mid-November, adding more than US$50 billion in market value in that period. That’s more than General Motors Co.’s total market capitalisation. The stock dropped to close at 4,540 yen yesterday before the earnings announcement.
Quarterly earnings For the quarter ended December 31, net income rose to
99.9 billion yen. Operating profit declined to 124.8 billion yen in the quarter, missing the 196 billion yen average analyst estimate. Revenue rose to 5.32 trillion yen, compared with the 5.22 trillion yen average estimate. In Japan, Toyota generated profit from its home market for a fourth straight quarter after eight consecutive periods of losses. It earned operating income of 15.6 billion yen. In other Asian markets, Toyota’s profit climbed to 91.7 billion yen, compared with the 91.4 billion yen average estimate. Toyota’s sales in China fell 4.9 percent last year, the first annual drop for the carmaker based on company figures stretching back to 2002. The company is expecting deliveries to rise about 7 percent to 900,000 vehicles in the market this year. Bloomberg News
SK Telecom Q4 profit jumps SK Telecom Co., South Korea’s largest mobile-phone operator, said fourth-quarter profit more than doubled after selling real estate and a stake in steelmaker Posco. Net income jumped to 519.1 billion won (US$477 million) from 195.5 billion won a year earlier, the Seoul-based company said in a regulatory filing yesterday. Sales rose 6 percent to 4.2 trillion won. SK Telecom raised 727 billion won selling property and about 1 percent of Posco to help pay for new Long-Term Evolution, or LTE, networks. “LTE subscribers will continue to increase this year,” Kim Jang Won, a Seoul-based IBK Securities’ analyst, said ahead of the earnings statement. “That will eventually translate into a higher top line.” South Korean telecommunications companies may also pare marketing spending this year after the industry regulator last month ordered temporary halts to the enrolment of new subscribers, Mr Kim said. The Korea Communications Commission fined SK Telecom 6.9 billion won and banned it from signing up new customers for 22 days starting January 31.
12 |
business daily February 6, 2013
MARKETS Hang SENG INDEX PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
30.05
-1.313629
25838579
CHINA UNICOM HON
12.34
-2.063492
15545242
ALUMINUM CORP-H
3.63
-0.8196721
11796058
CITIC PACIFIC
12.08
-2.580645
5527697
BANK OF CHINA-H
3.79
-3.807107
554090525
BANK OF COMMUN-H
6.37
-3.338392
34763765
BANK EAST ASIA
31.2
-2.194357
2744714
17.32
-1.925255
11589228
ESPRIT HLDGS
NAME AIA GROUP LTD
BELLE INTERNATIO
NAME
CLP HLDGS LTD
NAME POWER ASSETS HOL SANDS CHINA LTD
65.9
-0.4531722
3078258
CNOOC LTD
15.62
-2.375
106495304
COSCO PAC LTD
12.44
0.3225806
5182073
SWIRE PACIFIC-A
10.3
-2.091255
9503753
TENCENT HOLDINGS
PRICE
DAY %
VOLUME
67.65
-0.2212389
1843862
38.3
-1.920615
10249924
SINO LAND CO
13.96
-3.055556
8137897
SUN HUNG KAI PRO
121.3
-3.192338
7419858
98.4
-1.501502
1290926
265.4
-1.264881
2658365
BOC HONG KONG HO
26.35
-2.226345
20334900
HANG LUNG PROPER
29.25
-1.015228
11948940
CATHAY PAC AIR
14.84
-1.721854
4442000
TINGYI HLDG CO
22.45
0.6726457
10290127
HANG SENG BK
124.1
-1.974724
3535490
WANT WANT CHINA
10.48
0
13296184
HENDERSON LAND D
WHARF HLDG
67
-4.148784
4929944
CHEUNG KONG
122
-2.788845
6936683
CHINA COAL ENE-H
8.39
-1.641266
29662156
CHINA CONST BA-H
53.5
-3.863432
7947220
HENGAN INTL
77.65
-1.584284
2577394
HONG KG CHINA GS
21.65
-2.696629
7631103
146
-1.284652
3902369
HSBC HLDGS PLC
85.45
-2.731929
23820787
6.5
-2.548726
266992714
CHINA LIFE INS-H
24.85
-2.165354
39347387
CHINA MERCHANT
27.4
-1.261261
3220874
CHINA MOBILE
84.55
-0.6462985
17957183
HUTCHISON WHAMPO
84.75
-2.86533
7976999
CHINA OVERSEAS
22.95
-1.077586
31638032
IND & COMM BK-H
5.72
-2.886248
379903661
8.74
-6.423983
485283476
LI & FUNG LTD
10.5
-1.500938
42850994
MTR CORP
31.3
-1.105845
1862715
CHINA PETROLEU-H
HONG KONG EXCHNG
CHINA RES ENTERP
26.9
-1.102941
2028929
CHINA RES LAND
22.4
-1.538462
12758351
NEW WORLD DEV
13.84
-4.022191
25389680
CHINA RES POWER
22.35
0.9029345
4665758
PETROCHINA CO-H
10.64
-2.74223
116332846
CHINA SHENHUA-H
31.55
-2.923077
28626187
PING AN INSURA-H
67.25
-2.394775
29154724
MOVERS
3
46
1 23927
INDEX 23148.53 HIGH
23927.05
LOW
23139.5
52W (H) 23944.74 (L) 18056.4
23139
1-February
5-February
Hang SENG CHINA ENTErPRISE INDEX PRICE
DAY %
VOLUME
CHINA PACIFIC-H
29.4
-2.970297
13514241
16180602
CHINA PETROLEU-H
8.74
-6.423983
485283476
-0.8196721
11796058
CHINA RAIL CN-H
8.43
3.182375
75097407
ZOOMLION HEAVY-H
30.8
-0.4846527
11138668
CHINA RAIL GR-H
4.42
1.609195
34882937
ZTE CORP-H
BANK OF CHINA-H
3.79
-3.807107
554090525
CHINA SHENHUA-H
31.55
-2.923077
28626187
BANK OF COMMUN-H
6.37
-3.338392
34763765
CHINA TELECOM-H
4.19
-1.179245
33291292
BYD CO LTD-H
25.9
-1.70778
3444630
DONGFENG MOTOR-H
12.24
0.1636661
20490500
CHINA CITIC BK-H
5.27
-3.302752
52513762
GUANGZHOU AUTO-H
6.33
-2.615385
6762033
CHINA COAL ENE-H
8.39
-1.641266
29662156
HUANENG POWER-H
7.73
-0.129199
16633849
CHINA COM CONS-H
7.55
-1.30719
39702525
IND & COMM BK-H
5.72
-2.886248
379903661
CHINA CONST BA-H
6.5
-2.548726
266992714
JIANGXI COPPER-H
20.35
-2.398082
10193486
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
4.21
-3.881279
214150042
AIR CHINA LTD-H
6.59
-3.088235
ALUMINUM CORP-H
3.63
ANHUI CONCH-H
NAME
3.93
-1.75
15080256
PETROCHINA CO-H
10.64
-2.74223
116332846
24.85
-2.165354
39347387
PICC PROPERTY &
11.58
-2.360877
12538235
CHINA LONGYUAN-H
6.66
-4.172662
42702515
PING AN INSURA-H
67.25
-2.394775
29154724
CHINA MERCH BK-H
18.2
-3.294368
17435018
SHANDONG WEIG-H
7.51
-1.054018
12665429
CHINA COSCO HO-H CHINA LIFE INS-H
NAME YANZHOU COAL-H ZIJIN MINING-H
MOVERS
4
PRICE
DAY %
VOLUME
12.96
-2.409639
26034495
2.93
-1.013514
39467593
10.22
-1.351351
31673336
13.9
-2.250352
13731734
36
1 12337
INDEX 11813.39 HIGH
12337.08
LOW
11809.06
52W (H) 12354.22
CHINA MINSHENG-H
11.38
-5.794702
98831813
SINOPHARM-H
23.2
-0.4291845
1594444
CHINA NATL BDG-H
12.44
-2.047244
22247446
TSINGTAO BREW-H
46.05
1.993355
3769180
CHINA OILFIELD-H
16.68
-1.534829
7742067
WEICHAI POWER-H
33.15
1.531394
5333561
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
8.4
-3.225806
45575986
QINGHAI SALT-A
28.55
0.8833922
10290211
(L) 8987.76
11809
1-February
5-February
Shanghai Shenzhen CSI 300 NAME
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
3.19
-1.23839
343187375
AIR CHINA LTD-A
6.08
1.672241
34357349
CITIC SECURITI-A
15.11
-1.17724
149183711
SAIC MOTOR-A
17.45
3.560831
40459911
ALUMINUM CORP-A
5.29
0.3795066
34656026
CSR CORP LTD -A
5.24
10.08403
240127133
SANY HEAVY INDUS
12.91
5.130293
82436518
ANHUI CONCH-A
21.5
1.895735
30985231
DAQIN RAILWAY -A
7.2
1.123596
42606823
SHANDONG DONG-A
47.3
4.207975
5374131
BANK OF BEIJIN-A
10.2
-1.923077
60916377
DATANG INTL PO-A
4.32
0.6993007
21782263
SHANDONG GOLD-MI
37.82
-0.1056524
17728787
BANK OF CHINA-A
3.16
-1.863354
118343641
EVERBRIG SEC -A
BANK OF COMMUN-A
5.38
-2.888087
186512991
GD POWER DEVEL-A
11.95
-2.845528
34834588
GEMDALE CORP-A
0.5847953
50687882
GF SECURITIES-A GREE ELECTRIC
BANK OF NINGBO-A BAOSHAN IRON & S
5.16
CHONGQING CHAN-A
NAME
15.59
-2.011314
24898825
SHANG PHARM -A
11.94
0.7594937
7521393
2.8
0.3584229
71771660
SHANG PUDONG-A
11.87
-1.657001
176944688
8.19
7.621551
198104550
SHANGHAI ELECT-A
4.21
1.445783
6236824
15.75
-0.1901141
53593915
SHANXI LU'AN -A
24.84
0.4448039
31493129
8.41
0.3579952
17794143
29.2
0.3436426
16285776
SHANXI XISHAN-A
14.81
0.4067797
40375461
23.46
-0.3398471
3987435
GUANGHUI ENERG-A
16.94
-3.640501
39012469
SHENZEN OVERSE-A
6.87
3.308271
66415705
CHINA CITIC BK-A
5.05
-2.697495
57724863
HAITONG SECURI-A
12.32
-1.202887
104438109
SICHUAN KELUN-A
64.93
4.154636
1218385
CHINA CNR CORP-A
4.97
9.955752
206173129
HANGZHOU HIKVI-A
30.14
3.219178
6254827
SUNING APPLIAN-A
7.23
0.8368201
51691254
CHINA COAL ENE-A
8.36
0.7228916
29892148
HENAN SHUAN-A
71
3.152695
2907303
TSINGTAO BREW-A
34.58
2.489627
7149371
CHINA CONST BA-A
5.01
-1.377953
77224406
HONG YUAN SEC-A
20.6
-1.951452
17678030
WEICHAI POWER-A
26.66
1.214882
19197043
CHINA COSCO HO-A
4.28
1.904762
37375283
HUATAI SECURIT-A
11.88
0.1686341
81607836
WULIANGYE YIBIN
26.36
4.354711
63305231
CHINA CSSC HOL-A
23.99
1.480541
15933211
HUAXIA BANK CO
11.89
-1.65426
56002368
YANGQUAN COAL -A
16.9
1.991551
38400073
CHINA EAST AIR-A
3.77
1.344086
35150360
IND & COMM BK-A
4.41
-1.342282
143892193
YANTAI WANHUA-A
17.2
3.552077
13148468
CHINA EVERBRIG-A
3.65
-0.5449591
237196934
INDUSTRIAL BAN-A
20.33
-1.501938
95056004
YANZHOU COAL-A
19.61
-0.2543235
26368746
CHINA INTL MAR-A
13.95
-2.242467
16321379
INNER MONG BAO-A
33.69
0.02969121
31728936
YUNNAN BAIYAO-A
75.3
1.894452
2139726
CHINA LIFE INS-A
20.36
-3.047619
41358326
INNER MONG YIL-A
28.13
4.884415
15947573
ZHONGJIN GOLD
16.66
0.3614458
38998405
14.4
-1.166781
121449786
INNER MONGOLIA-A
5.23
0.5769231
46917175
ZIJIN MINING-A
3.91
1.033592
110076544
51790186
JIANGSU HENGRU-A
31.63
1.736893
5950554
ZOOMLION HEAVY-A
10.01
5.479452
182981311
JIANGSU YANGHE-A
83.35
7.687339
8861254
ZTE CORP-A
10.11
0.8982036
32944186
JIANGXI COPPER-A
27.01
-0.9170946
20897752
BBMG CORPORATI-A BYD CO LTD -A
CHINA MERCH BK-A CHINA MERCHANT-A
13.87
-1.210826
CHINA MERCHANT-A
28.45
3.605244
28660822
CHINA MINSHENG-A
11.71
1.561145
346947217
CHINA NATIONAL-A
8.12
3.17662
72156856
JINDUICHENG -A
12.87
0.0777605
12192159
CHINA OILFIELD-A
17.5
2.159953
11729038
JIZHONG ENERGY-A
17.81
0.3945885
25523931
15.8
2.464332
25391175
184.43
5.310341
8782540
22.14
-2.380952
44841539
KANGMEI PHARMA-A
CHINA PETROLEU-A
6.9
-2.12766
111744616
KWEICHOW MOUTA-A
CHINA RAILWAY-A
6.17
4.75382
137077299
LUZHOU LAOJIAO-A
32.31
7.270916
25679552
2.25
3.211009
163432835
CHINA PACIFIC-A
MOVERS 222
CHINA RAILWAY-A
3.32
3.426791
122041333
CHINA SHENHUA-A
25.09
0.641797
31537001
NINGBO PORT CO-A
2.65
1.532567
45521849
4.17
2.70936
129022330
HIGH
2775.22
LOW
2673.92
CHINA SHIPBUIL-A
5.05
2.851324
87399101
CHINA SOUTHERN-A
4.21
0.2380952
42246513
PETROCHINA CO-A
9.32
-0.4273504
41364492
CHINA STATE -A
4.06
9.72973
654697630
PING AN BANK-A
21.78
-1.04498
42689100
CHINA UNITED-A
3.78
-0.2638522
163746676
PING AN INSURA-A
50.65
-1.631385
42794570
CHINA VANKE CO-A
12.33
3.613445
169459019
POLY REAL ESTA-A
13.42
2.208682
101958116
CHINA YANGTZE-A
7.75
2.377807
36576511
QINGDAO HAIER-A
13.68
-0.7256894
13464039
NAME
PRICE DAY %
Volume
ACER INC
25.1 -0.3968254
8198655
5 2775
INDEX 2771.675
METALLURGICAL-A PANGANG GROUP -A
73
52W (H) 2768.503906 (L) 2102.135
2672
1-February
5-February
FTSE TAIWAN 50 INDEX
ADVANCED SEMICON ASIA CEMENT CORP
23.75
NAME
PRICE DAY %
Volume
FORMOSA PLASTIC
80.9 -0.1234568
5153217
TAIWAN MOBILE CO
105
-1.408451
FOXCONN TECHNOLO
84.8
-1.509872
5266249
TPK HOLDING CO L
513
0.7858546
4343904
NAME
PRICE DAY %
Volume 11335744
-2.263374
21540198
37.2 -0.5347594
5442217
FUBON FINANCIAL
39.6
0.7633588
47394195
TSMC
103
0
17896471
UNI-PRESIDENT
51.6
-1.149425
10861717
UNITED MICROELEC
11.4
-2.145923
28816886
WISTRON CORP
33.7
-1.461988
11414028
ASUSTEK COMPUTER
347
0.872093
4816696
HON HAI PRECISIO
83.1
-1.071429
31376592
AU OPTRONICS COR
11.1
-3.896104
90047749
HOTAI MOTOR CO
237 -0.4201681
256500
132.5
0.7604563
10618684
HTC CORP
266
-6.830123
9566406
CATHAY FINANCIAL
33.8 -0.1477105
30672676
HUA NAN FINANCIA
17.2 -0.2898551
14785170
YUANTA FINANCIAL
16.3
-1.510574
27270801
CHANG HWA BANK
16.6
-1.190476
13763479
LARGAN PRECISION
814
2.261307
2869475
YULON MOTOR CO
54.3 -0.5494505
5455859
CHENG SHIN RUBBE
78.3
1.032258
9119099
LITE-ON TECHNOLO
43
-0.116144
6776645
CHIMEI INNOLUX C
CATCHER TECH
15.15
2.020202
80790010
MEDIATEK INC
326
0.3076923
9698480
CHINA DEVELOPMEN
8.96
2.634593
285114970
MEGA FINANCIAL H
25.2
-1.5625
67166891
CHINA STEEL CORP
27.8 -0.3584229
13543962
NAN YA PLASTICS
59.3
-1.166667
5163175
CHINATRUST FINAN
17.7
0
71129951
PRESIDENT CHAIN
163
0
1135394
CHUNGHWA TELECOM
93.9
0
5045215
QUANTA COMPUTER
67.8
-1.881331
8208737
20.95
COMPAL ELECTRON
-3.009259
16943187
SILICONWARE PREC
31.15
-2.044025
10467167
DELTA ELECT INC
105 -0.9433962
4709362
SINOPAC FINANCIA
13.5
1.123596
76390048
FAR EASTERN NEW
34.5 -0.7194245
9327302
SYNNEX TECH INTL
62.3
0.483871
9194121
FAR EASTONE TELE
73.9
-1.466667
4078372
TAIWAN CEMENT
39.75
-1.730532
12299585
FIRST FINANCIAL
18.6 -0.2680965
23492008
TAIWAN COOPERATI
17.05
0.2941176
14966132
FORMOSA CHEM & F
79
-1.741294
5490646
TAIWAN FERTILIZE
73.1 -0.9485095
2178133
FORMOSA PETROCHE
85 -0.3516999
9059695
TAIWAN GLASS IND
29.2
-1.683502
789112
MOVERS
12
34
4 5545
INDEX 5513.4 HIGH
5545.2
LOW
5472.43
52W (H) 5621.53 (L) 4719.96
5472
1-February
5-February
February 6, 2013 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 35.0
34.9
34.8
Max 35
Average 34.883
Min 35.1
34.7
Last 34.9
Max 54.4
Average 54.006
Min 53.6
Last 54.1
38.010
PRICE
Max 21.75
Average 21.425
DAY %
YTD %
(H) 52W
(L) 52W
WTI CRUDE FUTURE Mar13
96.44
0.280752834
4.519345399
108.9899979
80.48000336
BRENT CRUDE FUTR Mar13
115.87
0.233564014
5.441805442
118.7999954
90.58999634
GASOLINE RBOB FUT Mar13
302.37
0.405113731
9.411636995
306.6299915
222.4999905
992.5
-0.07550969
7.384365702
1026.25
800.5
3.33
0.452488688
-1.040118871
4.049000263
3.052000046
GAS OIL FUT (ICE) Mar13 NATURAL GAS FUTR Mar13
316.38
0.31071655
4.872715354
331.3199997
254.9000025
Gold Spot $/Oz
HEATING OIL FUTR Mar13
1678.11
0.7904
0.8201
1796.08
1527.21
Silver Spot $/Oz
31.9006
0.9391
5.9469
37.4775
26.1513
Platinum Spot $/Oz
1699.88
0.0812
12
1736
1379.05
754.8
-0.4353
7.881
761.99
553.75
Palladium Spot $/Oz LME ALUMINUM 3MO ($)
2112
-0.611764706
1.881331404
2361.5
1827.25
LME COPPER 3MO ($)
8305
0.180940893
4.715672677
8765
7219.5
LME ZINC
2185
0.413602941
5.048076923
2190
1745
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Mar13 CORN FUTURE
53.8
17.54
53.6
Max 17.96
Average 17.679
Min 17.4
Mar13
WHEAT FUTURE(CBT) Mar13 SOYBEAN FUTURE Mar13
18725
0.536912752
9.759671747
22150
15236
16.05
0.879949717
5.766062603
16.84000015
14.89999962
734.5
0.034048349
5.191550304
846.25
511
764.5
0.196592398
-1.735218509
948.25
652
1492.75
0.26868178
5.906349769
1728.25
1230
145
0.450294423
0.83449235
237.5
141.25
COFFEE 'C' FUTURE Mar13
21.05 21.00 20.95 20.90
Min 21.15
Last 21.2
21.15
Max 21.05
Average 20.954
Min 20.85
Last 20.85
COUNTRY MAJOR
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
PRICE
DAY %
1.0403 1.5778 0.9091 1.3534 92.92 7.9864 7.7536 6.2311 53.215 29.73 1.2369 29.509 40.635 9662 96.664 1.23033 0.85775 8.4224 10.8099 125.75 1.03
-0.2015 0.3626 0.176 -0.2506 -0.043 0.0188 0.0116 0.0257 0.1315 0.1345 0.0808 0.1999 -0.0369 0.0207 0.1572 0.4292 0.6167 0.697 0.2599 0.2068 0.0097
YTD %
(H) 52W
0.2409 -2.4604 0.693 2.608 -7.3396 -0.0401 -0.0387 -0.008 3.3449 2.8591 -1.2531 -1.6131 0.9105 1.3558 -7.5902 -1.8572 -4.935 -2.4328 -2.5856 -9.6859 -0.0097
1.0857 1.6381 0.9972 1.3711 93.18 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 97.08 1.25692 0.87169 8.4957 10.9254 126.97 1.0314
0.9582 1.5269 0.8931 1.2043 76.52 7.9823 7.7498 6.2105 48.8163 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 NAME
(H) 52W
(L) 52W
3.67
-0.2717391
16.50793
3.89
2.27
1945504
CROWN LTD
11.54
-0.5172414
8.153701
12.04
8.06
2079724
ARISTOCRAT LEISU
PRICE
DAY % YTD %
VOLUME CRNCY
SUGAR #11 (WORLD) Mar13
18.79
0.320341698
-3.690415172
25.12999916
18.05999947
AMAX HOLDINGS LT
0.077
-3.75
10
0.119
0.055
6180500
81.43
-0.379251285
8.371040724
98.5
66.84999847
BOC HONG KONG HO
26.35
-2.226345
9.336098
27.1
20.45
20334900
CENTURY LEGEND CHEUK NANG HLDGS
World Stock MarketS - Indices
0.29
0
9.433968
0.34
0.215
0
6.2
0
3.505847
6.25
2.8
240539 31638032
CHINA OVERSEAS
22.95
-1.077586
-0.6493523
25.6
14.124
CHINESE ESTATES
13.76
-0.7215007
5.198777
13.98
8.3
600000
CHOW TAI FOOK JE
12.16
-2.407705
-2.250801
13.86
8.4
4071770
EMPEROR ENTERTAI
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
13880.08
-0.9258526
5.921338
14019.78
12035.08984
NASDAQ COMPOSITE INDEX
US
3131.167
-1.507692
3.697725
3196.932
2726.68
HANG SENG BK
FTSE 100 INDEX
GB
6265.87
0.304634
6.240623
6354.46
5229.76
HOPEWELL HLDGS
DAX INDEX
GE
7629.63
-0.1125915
0.2264695
7871.79
5914.43
HSBC HLDGS PLC
NIKKEI 225
JN
11046.92
-1.895412
6.269639
11285.49
8238.96
HANG SENG INDEX
HK
23148.53
-2.265061
2.169798
23944.74
18056.4
CSI 300 INDEX
CH
2771.675
0.860508
9.858418
2779.953
2102.135
TAIWAN TAIEX INDEX
TA
7886.94
-0.4571408
2.434443
8170.72
6857.35
KOSPI INDEX
SK
1938.18
-0.7695025
-2.947848
2057.28
1758.99
S&P/ASX 200 INDEX
FUTURE BRIGHT GALAXY ENTERTAIN
2.1
-1.869159
11.11111
2.15
1.1
1700000
1.97
-1.5
61.47541
2.03
0.465
17880000
34.9
-0.5698006
14.99176
35.7
16.94
6359415
124.1
-1.974724
4.549287
127.6
99.2
3535490
32.95
-0.6033183
-0.9022556
34.4
19.049
1207508
85.45
-2.731929
5.104547
88.45
59.8
23820787 5580066
HUTCHISON TELE H
3.61
0.8379888
1.404496
3.88
2.98
LUK FOOK HLDGS I
27.4
-1.083032
12.29508
30.05
14.7
1369000
MELCO INTL DEVEL
13
-3.988183
44.28413
13.96
5.12
10077000
MGM CHINA HOLDIN
17.68
-1.668521
26.10556
18.86
10.04
5261835
MIDLAND HOLDINGS
3.78
-2.325581
2.162161
5.217
3.249
5832520
NEPTUNE GROUP
0.188
-0.5291005
23.68421
0.226
0.084
47270000
NEW WORLD DEV
13.84
-4.022191
15.14143
15.12
7.95
25389680
SANDS CHINA LTD
38.3
-1.920615
12.81296
39.95
20.65
10249924
SHUN HO RESOURCE
1.52
0
8.57143
1.59
1.03
0
-2.672606
4.295941
4.65
2.56
8329149 10024959
AU
4882.72
-0.5052455
5.028448
4951.3
3985
ID
4479.441
-0.2477194
3.770343
4519.459
3635.283
FTSE Bursa Malaysia KLCI
MA
1633.35
-0.0734147
-3.291985
1699.68
1526.03
SHUN TAK HOLDING
4.37
NZX ALL INDEX
NZ
914.706
-0.8416534
3.701933
924.705
740.345
SJM HOLDINGS LTD
21.2
-2.974828
17.77778
22.15
12.34
PHILIPPINES ALL SHARE IX
PH
4053.34
0.3073558
9.579941
4056.41
3205.43
SMARTONE TELECOM
13.8
-0.1447178
-1.988636
17.5
13.16
2236180
20.85
-0.9501188
-0.4773306
25.5
14.62
12168533
ASIA ENTERTAINME
4.4
-5.579399
43.79085
7.24
2.4
208412
BALLY TECHNOLOGI
47.34
-2.7127
5.882355
51.16
41.74
703946 39490
JAKARTA COMPOSITE INDEX
20.85
(L) 52W
COTTON NO.2 FUTR Mar13
NAME
17.40
Last 17.68
CURRENCY EXCHANGE RATES
NAME
METALS
17.68
21.27
Commodities ENERGY
54.0
21.39
38.237
Last 38.3
17.82
21.51
38.375
Min 38.1
54.2
21.63
38.512
Average 38.368
17.96
21.75
38.650
Max 38.65
54.4
WYNN MACAU LTD
HSBC Dragon 300 Index Singapor
SI
639.24
0.24
2.92
NA
NA
STOCK EXCH OF THAI INDEX
TH
1505.72
-0.04315009
8.174973
1511.95
1090.27
HO CHI MINH STOCK INDEX
VN
477.36
-1.040673
15.37959
492.44
372.39
BOC HONG KONG HO
3.35
0
9.120524
3.47
2.68
Laos Composite Index
LO
1424.28
0
17.24689
1455.82
880.65
GALAXY ENTERTAIN
4.5
-1.315789
13.35013
4.57
2.22
15075
INTL GAME TECH
15.24
-1.993569
7.551164
17.37
10.92
3064845
JONES LANG LASAL
94.62
-0.5047319
12.72337
95.46
61.39
369431
LAS VEGAS SANDS
54.35
-2.720601
17.74263
58.3216
32.6127
8675876
MELCO CROWN-ADR
20.85
-0.8559201
23.81235
21.475
9.13
5726028
MGM CHINA HOLDIN
2.2
0
18.91892
2.3
1.36
2000
MGM RESORTS INTE
12.77
-1.466049
9.707901
14.9401
8.83
7370866
SHFL ENTERTAINME
15.58
-2.503129
7.448276
18.77
11.75
475309
SJM HOLDINGS LTD
2.82
0
22.07793
2.85
1.65
140
124.76
-1.274037
10.90764
129.6589
84.4902
1434126
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
WYNN RESORTS LTD
AUD HKD
USD
14 |
business daily February 6, 2013
Opinion
Is the euro crisis over? Jean Pisani-Ferry
F
Director of Bruegel and Professor of Economics at Université Paris-Dauphine
inancial crises tend to start abruptly and end by surprise. Three years ago, the euro crisis began when Greece became a cause for concern among policymakers and a cause for excitement among money managers. Since the end of 2012, a sort of armistice has prevailed. Does that mean that the crisis is over? By the usual standards of financial crises, three years is a long time. A year after the collapse of Lehman Brothers in September 2008, confidence in the United States’ financial system had been restored, and recovery had begun. A little more than a year after the 1997 exchange-rate debacle triggered Asian economies’ worst recession in decades, they were thriving again. Has the euro zone, at long last, reached the inflection point? Many battles were fought in the last three years – over Greece, Ireland, Spain, and Italy, to name the main ones. The European Union’s financial warriors are exhausted. Hedge funds first made money betting that the crisis would worsen, but then lost money betting on a euro zone breakup. Policymakers first lost credibility by being behind
the curve, and then recouped some of it by embracing bold initiatives. Recent data suggest that capital has started returning to southern Europe. The current change in market sentiment is also motivated by two significant policy changes. First, European leaders agreed in June 2012 on a major overhaul of the euro zone. By embarking on a banking union, which will transfer to the European level responsibility for bank supervision and, ultimately, resolution and
Political upheaval in any of the southern countries would be sufficient to reignite doubts about the euro zone’s future
recapitalisation, they showed their readiness to address a systemic weakness in the monetary union’s design. Second, by launching its new “outright monetary transactions” scheme in September, the European Central Bank took responsibility for preserving the integrity of the euro zone. The OMT programme was a serious commitment, and markets interpreted it that way, especially as German Chancellor Angela Merkel backed it, despite opposition from the Bundesbank. Moreover, Merkel visited Athens and silenced the voices in her coalition government who were openly calling for Greece’s exit from the euro.
Political risk Unfortunately, however, there remain three reasons to be concerned about the future. For starters, politics lags behind economics, which in turn lags behind market developments. Sentiment on trading desks in New York or Hong Kong may have improved, but it has deteriorated on the streets of Madrid and Athens. Indeed, the economic and social situation in southern
Europe is bound to remain grim for several years. As things stand, all southern European countries are facing the prospect of a true lost decade: according to the International Monetary Fund, their per capita GDP will be lower in 2017 than it was in 2007. As long as sustained economic improvement has not materialised, political risk will remain prevalent. Political upheaval in any of the southern countries would be sufficient to reignite doubts about the euro zone’s future. Furthermore, French competitiveness, and the gap between its performance and that of Germany, is a growing cause of anxiety. The second reason to worry is that there is limited consensus in Europe on what, exactly, is needed to make the monetary union resilient and prosperous again. Banking union is a positive development, but there is no agreement on additional reforms, such as the creation of a common fiscal capacity or a common treasury. In particular, northern Europe continues to interpret the crisis as having resulted primarily from a failure to enforce existing rules,
especially the EU’s fiscalstability criteria. Southern Europe is more inclined to view the crisis as having resulted from systemic flaws. Furthermore, northern Europe regards austerity as the mother of all reforms, while southern Europe fears that governments may not have enough political capital to do everything at the same time.
Survival skills Finally, the last three years have revealed a clear pattern in the management of crises: Almost no decision results from serene deliberation, with most taken under financialmarket pressure in an attempt to avoid the worst. Each time the pressure abates, plans for policy reform are put off – an attitude best captured in Merkel’s famous ultima ratio: action is undertaken only if it is indispensable to the survival of the euro. In other words, Europe displays a strong sense of survival, but not a strong sense of common purpose. None of this means that the euro will collapse. The widely held conviction that letting the monetary union break up would amount to collective economic suicide provides a strong motivation to weather storms and overcome obstacles. Moreover, the results achieved so far may well prove sufficient to contain risks in the near future, while plans for a fiscal capacity, common bonds, and the creation of a European treasury are still being sketched. So, in practical terms, the difference between reforms that could be implemented and those that are being or will be implemented is less significant than it seems. But, by consciously eschewing discussion about which reforms would make membership in the euro zone less hazardous and more beneficial for all, European leaders are missing an opportunity to signal that the euro is a stepping stone toward a prosperous, resilient, and cohesive union; and they are missing an opportunity to signal that the harsh economic adjustment that continues to dominate the policy agenda for much of the continent is not an end in itself. © Project Syndicate
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February 6, 2013 business daily | 15
OPINION
IMF shows U.S. how to wires restrict foreign capital Business
Leading reports from Asia’s best business newspapers
The Star AirAsia Bhd group chief executive Tony Fernandes said he would, ideally, like to offer 33 percent of long-haul low-fare airline AirAsia X shares to the public when it eventually lists. “I want every one to be able to buy shares. AirAsia is essentially made up of the common man on the street,” he was quoted as saying. “The feedback I get is that they can’t get shares, but want to be involved in it. So, I would like to do 33 percent,” Mr Fernandes added. For AirAsia X’s flotation, it would be listing about 30 percent of its shares. So a 33 percent allocation for the public portion would effectively translate into 10 percent of the entire paid-up capital.
Joseph E. Gagnon
Senior fellow at the Peterson Institute for International Economics
Taipei Times Steady economic sentiment and stronger seasonal demand ahead of the Lunar New Year led Taiwan’s official purchasing managers’ index (PMI) to report faster-than-expected expansion last month, a report by the ChungHua Institution for Economic Research showed on Monday. The composite PMI jumped to 57.7 last month from 51.3 in December,risingabovethe50-point threshold for the second month in a row, the Taipei-based think tank said in its monthly report. “Following the U.S.’ ‘fiscal cliff’ issue easing, as well as Japan’s moves [to stimulate its economy], Taiwan’s PMI may show a rising trend ahead,” CIER president Wu Chung-shu said.
Korea Herald The presidential transition team and the Ministry of Foreign Affairs and Trade clashed on Monday as the plans to remove traderelated functions from the Foreign Ministry surfaced as the main sticking point for the National Assembly. Under President-elect Park Geun-hye’s government reorganisation plans, trade functions will be transferred to the new Ministry of Industry, Trade and Energy. The plan took the main stage in the National Assembly following Foreign Minister Kim Sung-hwan’scommentthatrevising the related regulations to transfer trade-related functions to the new ministry was tantamount to “shaking the foundations of the constitution”.
Economic Times India looks all set to cede the moniker of the world’s second fastest growing major economy for 2012. The latest global economic growth forecasts from the International Monetary Fund have India growing at 4.5 percent in 2012 (at market prices), much less than the big guns of ASEAN such as Indonesia and the Philippines, and even Bangladesh. “These economies look strong and would give a strong competition to India, if we do not keep performing,” noted DK Joshi, chief economist with ratings firm Crisil.
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he U.S. isn’t expected to return to full employment for at least six more years, and the consensus in Washington seems to be that President Barack Obama’s administration has no options to improve that dreary outlook. The debate over tax increases and spending cuts, as well as the latest statement from the Federal Reserve, proves that additional fiscal and monetary stimulus won’t be coming unless the economy turns even worse. But there’s one weapon the Obama administration can fire to get a more satisfactory recovery in employment: taking action to narrow the longstanding deficit in international trade. Millions of jobs are at stake. As it happens, the International Monetary Fund recently gave a green light to measures the administration could use to reduce the trade deficit in a formal statement of its “institutional view” on the management of capital flows. Capital flows directed by a number of foreign governments into the U.S. have grown to unprecedented levels in recent years. These flows keep foreign exports artificially cheap and make U.S. exports artificially expensive to foreign buyers; they are the main reason the U.S. has a large trade deficit right now. The country should take heed of the IMF’s recommendations and act forcefully to damp these distortionary capital inflows and to restore balance in international trade. For countries in the position of the U.S., the IMF doctrine recommends policy measures be taken in the following order. Each successive step should be taken only if the
previous ones have been pursued aggressively and proved insufficient.
Buy reserves First, ease monetary policy if inflation isn’t a problem. Second, use expansionary fiscal policy to sustain growth if government debt isn’t excessive. Third, accumulate more foreign-exchange reserves to weaken the currency. Fourth, impose controls on capital inflows. The U.S. has pursued the first two steps aggressively but growth has remained too weak. It’s time to move on to stage three: largescale purchases of foreigncurrency reserves. At only US$52 billion, U.S. reserves are far below the conventional metric for adequate reserves of three months of imports, which would imply reserves of almost US$700 billion.
The country [U.S.] should take heed of the IMF’s recommendations and act forcefully to damp these distortionary capital inflows and to restore balance in international trade
U.S. reserves are denominated in euros and yen. With both the euro-area and Japanese economies already stagnating, leaders of these countries would surely criticise official purchases that put upward pressure on their currencies and downward pressure on their exports. The obvious alternative is to buy the Chinese renminbi, but China forbids foreign investment in its currency except through strictly limited channels. No other single currency has markets deep enough to make purchases practicable in the amounts required. However, as I recently proposed with my colleague C. Fred Bergsten, the U.S. should purchase reserves in a range of currencies from countries that manipulate their exchange rates, namely Denmark, Hong Kong, Malaysia, Singapore, South Korea, Switzerland and Taiwan. And the U.S. should communicate clearly to Japan that any future intervention by the Japanese to weaken the yen would be fully offset by U.S. purchases of yen.
Further measures are needed, however. The country should prepare to impose taxes or restrictions on capital inflows, especially against countries such as China that manipulate exchange rates and that don’t allow reciprocal purchases of their own currencies by foreigners. And the IMF should examine whether the large purchases of foreign assets by governments in oilexporting countries exceed a reasonable level, especially in light of the negative effects of such purchases on global economic activity during a time of widespread underemployment. These policies would add millions of jobs in the U.S. As the leaders of the Group of 20 have urged, governments in countries with trade surpluses should be encouraged to boost consumption and investment at home. Returning international trade to balance would strengthen global growth and make it more sustainable, a good outcome for the whole world. Bloomberg View
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business daily February 6, 2013
CLOSING BOJ chief to step down on March 19
Boeing seeks test flights for 787
Bank of Japan Governor Masaaki Shirakawa said yesterday he would step down on March 19, three weeks earlier than the official end of his fiveyear term, to leave the central bank at the same time as his two deputies. “I told the prime minister that I will resign on March 19 so that a structure with a new governor and two deputy governors can start simultaneously,” Mr Shirakawa told reporters after notifying Prime Minister Shinzo Abe of his intention to resign at a meeting of the government’s top economic council.
Boeing Co. has sought the permission of the U.S. Federal Aviation Administration (FAA) to conduct test flights of its 787 Dreamliner passenger plane. All 50 of Boeing’s 787s were grounded last month because of an ongoing investigation into battery problems. A battery on a Japan Airlines 787 caught fire, and a malfunction forced an All Nippon Airways flight to make an emergency landing. The FAA said it is evaluating Boeing’s request. But passenger flights would still be weeks if not months away, said two sources quoted by the Seattle Times.
Barclays’ mis-selling bill rises U.S. ‘will sue’ Standard & Poor’s Bank takes another US$1.6 billion hit Steve Slater
First case against a credit agency over financial crisis
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Barclays is one of a number of banks that has been reviewing sales
B
arclays Plc set aside another 1 billion pounds (US$1.6 billion) to compensate customers for mis-selling products, dropping another British banking bombshell as the industry struggles with the scale of redress for past misdemeanors. U.K. banks are embroiled in two separate mis-selling scandals, and Barclays said yesterday it had made an extra provision of 600 million pounds to compensate customers for payment protection insurance. PPI mis-selling alone has now cost U.K. banks over 12 billion and could end up more than double that, industry sources estimate. Yesterday’s announcement marked Barclays’ fourth provision for PPI, dating back to May 2011 when the industry lost a court case on the selling of products to customers who did not need, or could not use them. It has now set aside 2.6 billion pounds to settle claims for mis-selling
of PPI – loan insurance to protect borrowers who missed repayments due to illness or redundancy, but which was often sold to people who were not eligible to claim. Later yesterday Barclays’ new chief executive Antony Jenkins and chairman David Walker were due to testify to a parliamentary inquiry into banking industry standards. This was launched after Barclays was fined US$450 million last June in a third scandal over the rigging of Libor interest rates. Mr Jenkins, who used to run retail banking at Barclays, is likely to be grilled on why the bank – and the industry – has consistently underestimated the scale of redress for PPI claims. Barclays also set aside 400 million pounds more to cover claims for misselling interest rate hedging products (IRHP), almost doubling its provision to 850 million and firing a warning
shot that other banks face big bills too. Britain’s financial regulator said last week that a pilot study showed banks had mis-sold complex interestrate hedging products to small businesses which did not need them or did not understand the risks involved, opening the door for billions of pounds in payouts. “This [Barclays’ provision] is by far the highest among U.K. banks and suggests further provisions by RBS, Lloyds and HSBC,” said Shailesh Raikundlia, analyst at Espirito Santo. Jenkins, who took over as CEO in August after his predecessor Bob Diamond was ousted after the Libor fine, is attempting to revive Barclays after the string of scandals and has promised to improve culture and standards across the bank. He has warned that his turnaround plan, to be unveiled on February 12, could take 5-10 years to fulfil. Reuters
he U.S government has launched a civil lawsuit against Standard & Poor’s and parent The McGraw-Hill Companies Inc. over mortgage bond ratings, the first federal enforcement action against a credit rating agency over alleged illegal behaviour tied to the financial crisis. The government said in a court filing it was seeking civil money penalties from S&P and McGraw Hill. “Considerations regarding fees, market share, profits, and relationships with issuers improperly influenced S&P’s rating criteria and models,” the government said. Shares of McGraw-Hill plunged 13.8 percent on Monday after the company said it was expecting the lawsuit, marking their biggest oneday percentage decline since the 1987 stock market crash, according to Reuters data. The news also caused shares of Moody’s Corp, whose Moody’s Investors Service unit is S&P’s main rival, to slide 10.7 percent. It is unclear why regulators may now be focusing on S&P rather than Moody’s or Fimalac SA’s Fitch Ratings. S&P, Moody’s and Fitch have long faced criticism from investors, politicians and regulators for assigning high ratings to thousands of subprime and other mortgage securities that quickly turned sour. “This lawsuit is significant because it could augur future government action or, even worse for the agencies, more litigation by investors,” said Jeffrey Manns, a law professor at George Washington University in Washington, D.C. A civil case involves a lower burden of proof than a criminal case would, and could make it easier for investigators to uncover potential “smoking guns” through subpoenas, he added. S&P said the expected Justice Department lawsuit focuses on its ratings in 2007 of various U.S. collateralised debt obligations. “A DOJ lawsuit would be entirely without factual or legal merit,” S&P said in a statement. “The DOJ would be wrong in contending that S&P ratings were motivated by commercial considerations and not issued in good faith.” Reuters