Macau Business Daily, January 16, 2013 by Business Daily

Year I Number 200 Wednesday January 16, 2013 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP 6.00

Gaming growth drives takeover target CTM profits www.macaubusinessdaily.com

Taiwan cash probe director faces separate U.S. lawsuit A director of MCE International Ltd – a unit of casino operator Melco Crown Entertainment Ltd being investigated in Taiwan for alleged illegal transfer of gamblers’ cash between the island and Macau – is one of those named in unrelated ongoing litigation in the United States.

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acau’s biggest telecom operator, Companhia de Telecomunicações de Macau SARL (CTM) – subject of a takeover bid on Sunday by mainland telecoms firm Citic Telecom International Holdings Ltd – will see its profit grow faster this year and in 2014, says DBS Vickers Group Research. CTM had a market share of about 50 percent of all Macau’s mobile phone subscribers in 2011; well ahead of competitors SmarTone

Mobile Communications Ltd and Hutchison Telephone (Macau) Co Ltd. Macau’s gaming revenue will grow by 10-15 percent this year and become “a growth driver” for CTM’s mobile business, DBS Vickers analyst Tam Tsz Wang wrote. DBS Vickers believes CTM’s profit grew by just two percent last year to 953 million patacas (US$119.3 million), a huge drop from the 14.7 percent increase registered in 2011. MORE ON PAGE 6

Casino shifts hurting productivity: association Local lottery’s 22-year monopoly extended Sociedade de Lotarias Wing Hing Lda will have its monopoly right to run a Chinese lottery in Macau extended until December 31, 2013 according to the Official Gazette. In June 2011 the Gazette listed SJM Holdings Ltd’s directors Angela Leong On Kei and Louis Ng Chi Sing as directors of Wing Hing.

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The shift systems in casinos are detrimental not only to the family life of employees but also to their productivity, the Macau Gaming Management Association warns. It is researching how to improve the way casinos arrange shifts and annual leave. Association president Davis Fong Ka Chio told Business Daily: “If staff don’t sleep well, if they don’t get enough rest, productivity at work is obviously affected.” Mr Fong is also head of the Institute for the Study of Commercial Gaming at the University of Macau.

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Non-resident labour rule ‘meets international law’

The value of mortgage loans handled by the Industrial and Commercial Bank of China (Macau) Ltd doubled last year with about 10 percent going for affordable housing, said chief executive Shen Xiaoqi. He added his bank was the largest lender in several public housing projects in the city selling units to residents.

A proposed change to the law on hiring non-resident labour is “not discriminatory”, says Cheang Chi Keong, the head of the Legislative Assembly’s third permanent committee. If it were approved, a nonresident worker would no longer be required to leave Macau for a six-month period if his contract was ended early. But this exemption would only be the case if both the employer and worker agreed to end the contract early, or if the employer unilaterally ended the contract early without due cause.

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ICBC doubles mortgage business during 2012

I SSN 2226-8294

HANG SENG INDEX 23470

23430

23390

23350

23310

January 15

HSI - Movers NAME

%DAY

NEW WORLD DEV

1.73

HONG KONG EXCHNG

1.36

TENCENT HOLDINGS

1.33

CHINA RES ENTERP

1.30

HENDERSON LAND D

1.21

SANDS CHINA LTD

-1. 7

CHINA MOBILE

-1.39

WANT WANT CHINA

-2.12

CHINA UNICOM HON

-2.27

ESPRIT HLDGS

-3.02

Source: Bloomberg

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business daily January 16, 2013

MACAU

‘Messy’ casino shifts reduce productivity Gaming managers acknowledge that irregular shift patterns are bad for employees and employers alike Vítor Quintã

vitorquinta@macaubusinessdaily.com

he shift systems in casinos are detrimental not only to the social and family lives of employees but also to their productivity, an association of gaming managers has warned. The Macau Gaming Management Association is preparing a research project on how to improve the way casinos arrange shifts and annual leave. Association president Davis Fong Ka Chio told Business Daily that irregular shift patterns were bad for workers and indirectly reduced their productivity. “If staff don’t sleep well, if they don’t get enough rest, productivity at work is obviously affected,” said Mr Fong, who is also head of the Institute for the Study of Commercial Gaming at the University of Macau. He said it made things worse if shift work prevented workers from spending quality time with their families, even leading to problems such as domestic quarrels and neglect of children. Shift workers have more family problems than other kinds of employee, according to the results of a survey in 2011 by the Sheng Kung Hui Gambling Counselling and Family Wellness Centre. Mr Fong said the idea of the research project had come from a forum held last month by a group representing casino workers, which had raised issues about shift arrangements in casinos. He said casinos here used more than 100 different kinds of shift schedule, changing from one to another in accordance with the numbers of gamblers they pulled in.

What a mess Mr Fong said the main problem was the irregularity of shift schedules, which time and again forced workers to adjust their lives and their habits. “Messy” is the word that the president of the Macau Gaming Industry Employees Association, João Bosco Cheong Hong Lok, uses to describe the shift arrangements. “There are shifts where you need to work six days per week but only eight hours per day, while you can also work five days a week but 10 hours a day,” Mr Cheong told Business Daily. “Right now, we have to change shifts every one or two weeks. It is like we have just adapted to a timetable but then have to change it the next day,” he said.

If staff don’t sleep well, if they don’t get enough rest, then productivity at work is obviously affected Davis Fong Ka Chio, Macau Gaming Management Association president

Many casino employees receive their work rosters only one week in advance, says the head of an association of gaming managers

“If you do not check your schedule constantly, you may go to work on the wrong shift,” he said. “We, of course, would hope that we might only change shifts once a month or even once every two months.” Mr Fong said workers understood that “someone must work at night” to keep casinos open 24 hours. But he said many staff received their work rosters only one week in advance. Mr Cheong said some staff found out only at the weekend what hours they would have to work in the following week. “We do not have much room to plan for our personal life. I think most working in this sector feel like they have little personal time,” he said.

De facto separation This feeling is greatest among employees with spouses and children. Mr Fong remarked: “Their family arrangements may face some difficulties.” He said that if a married couple worked for the same casino operator, they were usually given the same schedule. But he said such an arrangement

could not be made for couples that worked for different companies. Mr Cheong said: “These couples may never see each other if their shifts are completely opposite.” Mr Fong said casino staff were also unhappy about being allowed to take their annual leave only when their employers said they could. But Mr Cheong feels that it may be impractical to let workers choose when to take their annual leave. “If we are free to choose to holiday when we want, most will choose the Chinese New Year, and no one will work then,” he said. Mr Fong said the goal of the research project was to learn “the needs or wants of both the employees and the operators” so solutions to problems could be proposed. His association will begin by requesting information from all casino operators on their shift schedules and then analysing it. This, he said, should take at least two months. He believes that when the study is completed later this year gaming companies will be open to suggestions about how to improve their practices. With Tony Lai

Venetian fined for changing working hours A court punished casino operator Venetian Macau SA with at least three fines last year for changing the terms of employment of its staff, court judgements show. In August 2007 the company in effect added an extra hour to the working day of its employees. Previously, it had required staff to work 48 hours a week, including lunch breaks. But the company changed its terms of employment to exclude lunch breaks from the number of hours worked per week. The Court of Second Instance said this change had been made without the consent of the workers and was “negative to the interests of the employees, considering that the basic pay set in the contract remained unchanged”. In the past two months the court has rejected appeals by Venetian against three convictions for breaking the labour law which carried fines amounting to 54,500 patacas (US$6,800). The court also ordered the company to pay former employees compensation amounting to about 60,350 patacas.

January 16, 2013 business daily | 3

MACAU

Job swap rules for non-residents not discriminatory: legislator Members of the Legislative Assembly agree with the government on tighter restrictions on imported workers changing jobs Stephanie Lai

sw.lai@macaubusinessdaily.com

roposed amendments to the law on hiring non-resident labour which include limits on changing jobs are not discriminatory, the chairman of the Legislative Assembly’s third standing committee, Cheang Chi Keong, has said. The amendments would not be at odds with the international labour convention that gives workers the freedom to choose the jobs they do, Mr Cheang told reporters yesterday after a meeting of his committee. The bill to amend the law would no longer require non-resident workers whose contracts end prematurely to leave Macau for at least six months. Such workers would be allowed to stay only if they were not justifiably dismissed. However, the amendments would require them to find within six months jobs in the same industry they were working in before. “The non-resident labour law will not be undergoing a large-scale revision. After some discussion we concluded that [the proposed changes] still comply with the Basic Law, with Macau’s own employment policy and with the international labour conventions,” Mr Cheang said.

“Once hired, non-resident workers are protected by labour rights stipulated by local laws,” he said. “But they should also be subject to our re-employment rules.”

Averting chaos When the amendment bill had its first reading, on November 7, Secretary for Economy and Finance Francis Tam Pak Yuen said its purpose was to stabilise the labour market. Mr Cheang said yesterday: “There have been cases in which non-resident workers made deliberate attempts to get laid off in order to switch to a different kind of job – for instance, a construction worker switching to work as a casino security guard.” He said this could not be allowed to continue. “This trend would make the market chaotic.” Mr Cheang said the third standing committee would listen to the opinions of government officials on the bill next Tuesday. The members will also discuss ways to solve a problem the amendment may cause. At present, the permits issued to non-resident workers allowing them

There were over 110,100 imported workers in Macau last November

to stay temporarily expire as soon as their employment contracts end. Groups representing migrant workers have said the amendment would allow non-resident workers to stay on for only 10 days after their contract ended. A lecturer in social work at the

Macao Polytechnic Institute, Cecilia Ho Wing Yin, told Business Daily in November that this would leave workers vulnerable to exploitation by recruitment agencies. Mr Cheang declined to predict whether the assembly would pass the amendments by the Lunar New Year.

Campus budget haste ledto waste, says engineer A top engineer says speed took precedence over thrift in the construction of the University of Macau’s campus on Hengqin Island Tony Lai

tony.lai@macaubusinessdaily.com

he government made an incomplete budget for the University of Macau’s new campus on Hengqin Island so it could wrap up the project within three years, according to a leading engineer. A Commission of Audit report released on Monday criticised the Infrastructure Development Office for not including all the work in the budget for the project and for using inappropriate or outdated points of

reference in estimating costs. “The government did not draw up the budget for the campus with a detailed plan, as they had to hurry the project,” the president of the Macau Institution of Engineers, Eddie Joe Wu Chou Kit, told Business Daily. The initial budget for the campus, made public in April 2010, was 5.8 billion patacas (US$725 million), but the budget had ballooned to 9.8 billion patacas by November 2011. The audit commission said that by last March the cost of the project had exceeded 10.2 billion patacas. Mr Wu said different construction methods and materials would have allowed the project to keep within its budget. But he believes the government chose options that were meant to keep construction on schedule. “In this case the government gave the impression that they prioritised the construction target over everything, which is something I would not recommend,” he said.

Valuable lesson The cost of the University of Macau’s new campus exceeds 10.2 billion patacas (Photo: Manuel Cardoso)

“This case makes people think we have a lot of public revenue so we can

be negligent about the costs, in order to catch up with time,” Mr Wu said. The Infrastructure Development Office issued on Monday a written statement saying it agreed with the criticisms made by the auditors. It said the initial budget had been “based on limited design information”, and that therefore it had made a conservative estimate of the costs. It acknowledged that it had had to “overcome a lot of difficulties” in its effort to have construction finished within a three-year period that ended last month and so comply with a cooperation agreement with Zhuhai. Secretary for Transport and Public Works Lau Si Io yesterday admitted the government “did not have enough information” when it drafted the initial budget. Mr Lau also said the administration had to carry out the design work and construction simultaneously due to the “tight schedule for construction”, which affected the accuracy of the original estimates. Mr Wu said the government should closely review budgets for future projects, paying special attention to the costs of materials and labour. “There is usually a time lapse of

one to two years between finalising the overall design and putting projects out to tender in Macau,” he said. He said the government could pass budgets for big projects to an independent body for review. He hopes the Infrastructure Development Office has learnt its lesson and that it will apply what it has learned in making the budget for the tunnel that will link the peninsula to Taipa.

This case makes people think we have a lot of public revenue so we can be negligent about the costs Eddie Joe Wu Chou Kit, president of the Macau Institution of Engineers

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business daily January 16, 2013

MACAU Brought to you by

HOSPITALITY THE GREAT ESCAPE An indicator of increasing prosperity here is the rise in outbound tourism by Macau residents. In the first 11 months of last year travel agents arranged 32 percent more trips abroad than in the corresponding period of 2011. The growth was greatest in the number of trips they arranged to mainland China, which rose by 44.6 percent. However, a good deal of the growth may have been in short business trips rather than holiday travel. The figures may reflect greater integration of the Macau and mainland economies as much as growth in outbound tourism.

Greater economic integration is likely to have been a strong driver of the increase in the number of trips to Guangdong, which rose by 48.3 percent, and the number of trips to Hong Kong, which rose by 44.3 percent. Trips to Taiwan increased more slowly. The consequence seems to be that travel abroad by Macau residents is increasingly to places nearby. The mainland and Hong Kong combined were the destinations of almost threequarters of their trips. Greater China as a whole was the destination of over of 87 percent of their trips. The number of trips further afield fell. Trips to countries beyond Greater China made up 12.7 percent of all trips abroad by Macau residents in the first 11 months of last year, almost 5 percentage points fewer than in the corresponding period of 2011. J.I.D.

Taiwan cash probe firm director facing separate lawsuit in U.S. Alleged Clarence Chung and others ‘misled’ investors on slot machine revenue deal Michael Grimes

michael.grimes@macaubusinessdaily.com

director of MCE International Ltd – a unit of casino operator Melco Crown Entertainment Ltd being investigated in Taiwan for alleged illegal transfer of gamblers’ cash between the island and Macau – is one of those named in unrelated ongoing litigation in the United States. Chung Yuk Man – also known as Clarence Chung, is listed in a Companies Registry document from Hong Kong dated March 30, 2012 as a director of MCE International. According to a filing with the U.S. Securities and Exchange Commission, dated December 31 2012, Mr Chung is also chief executive of Entertainment Gaming Asia Inc. In another SEC filing dated November 14, “Melco International Development Ltd”, is described as the parent of Entertainment Gaming Asia’s principal shareholder, EGT Entertainment Holding. A civil complaint filed on March 26 2010 with the U.S. District Court for the Southern District of New York, by several institutional shareholders of Entertainment Gaming Asia – including Prime Mover Capital Partners L.P., Strata Fund L.P., Strata Fund Q.P. L.P., and Strata Offshore Fund, Ltd – alleges “false and misleading statements” made

between June 13, 2007 and August 13, 2008 about a slot business operated by the company – then known as Elixir Gaming Technology. The plaintiffs claimed the firm had breached the U.S. Securities Exchange Act of 1934 by exaggerating the financial performance of slot machines placed on a revenue participation basis in Asian markets. The November 14 SEC filing states that on September 27 2012 the U.S. District Court dismissed all of the plaintiffs’ claims except two breachof-contract counts. All claims against the current and former officers and directors were dismissed, it added. But on October 25 2012 the plaintiffs filed

US$179 million

MONEY TRANSFERS BEING INVESTIGATED BY TAIPEI PROSECUTORS

a notice of appeal seeking review by the Second Circuit Court of Appeals of the trial court’s ruling. The Companies Registry document from Hong Kong lists two other MCE International directors. They are Rowen Craigie, chief executive officer and managing director of Crown Ltd, an Australian casino operator that is a joint venture partner in Melco Crown Entertainment, and Stephanie Cheung, executive vice president and chief legal officer of Melco Crown Entertainment. MCE International was named by public prosecutors in Taiwan last week as under investigation for allegedly breaching the jurisdiction’s Banking Law. “The company has worked with several casinos from Macau, and enabled Taiwanese gamblers’ money to be remitted to Macau through its underground exchange system,” said a statement from the Taipei District Prosecutor’s office. It added that transfers involving NTD5.2 billion (US$179 million) were under scrutiny. “None of Melco Crown Entertainment’s corporate entities has been charged at the current time. If required, we will cooperate with the authorities,” MCE said in a statement on Sunday.

Total visitor arrivals close to city’s capacity

isitor arrivals at Macau reached over 28 million people in 2012, up slightly by 0.3 percent year-on-year, figures from the Macau Government Tourist Office show. Greater China remained the top source of Macau’s visitors, with an annual increase of 0.4 percent to over 25 million visitors, office head Maria Helena de Senna Fernandes said yesterday. On the other hand, the number of visitors coming from the international market has dropped by 0.5 percent to 3 million people. However, in terms of tourists’ opting to sleep in Macau, the city did

“achieve some progress”, Ms Senna Fernandes noted. “Last year we had 13.5 million visitors choosing to stay overnight in Macau, which is an annual increase of 5 percent,” accounting for 48 percent of all visitors, she said. Last year’s visitors did not reach the maximum tourist capacity of 29 million, a reference figure suggested by a report from Institute for Tourism Studies carried out in 2011. To offload the pressure on the most popular spots, the bureau will boost promotion to divert tourists to northern Macau, Taipa, Coloane and other old neighbourhoods. The official pledged to focus on

Authorities yesterday launched a campaign to encourage residents to be friendlier to tourists

working with Guangdong to better tackle the zero-fee tour groups active across the Zhuhai-Macau border that often give rise to travel fees disputes. The office also listed regular raids on illegal inns and research on tourism staff demand on its 2013 agenda. The bureau’s budget includes an investment plan of 21 million patacas (US$2.6 million) and running expenses of 243 million patacas. S.L.

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January 16, 2013 business daily | 5

MACAU

No change to Chinese lottery concession Pa Ka Pio’s 22-year monopoly extended for another 12 months Vítor Quintã

vitorquinta@macaubusinessdaily.com

ociedade de Lotarias Wing Hing Lda will have its monopoly right to run a Chinese lottery in Macau extended until December 31, 2013. There will no others changes to the contract, a spokesperson for Macau’s gaming regulator the Gaming Inspection and Coordination Bureau told Business Daily. But a notice in Monday’s Official Gazette stated there would be some “modifications” to the contract – without providing details. According to the Gazette, Secretary for Economy and Finance Francis Tam Pak Yuen will soon sign a new one-year deal with the company. A Bureau spokesperson told Business Daily “the terms and conditions in the concession of Wing Hing for the operation of Chinese lottery are similar to those of the previous year”. The premium that Wing Hing will pay to the government for the one-year extension will once again be 500,000 patacas (US$62,600). Wing Hing has been signing oneyear contracts consecutively since 2010. Its previous one expired at the end of last calendar year. But the company will be authorised to continue operating while the

The yearly revenue of the Chinese lottery, known locally as Pa Ka Pio (sometimes Westernised in lottery outlet signs as ‘Pacapio’), has remained stable at around six million patacas since 2007. The Official Gazette listed SJM Holdings’ directors Angela Leong On Kei and Louis Ng Chi Sing in June 2011 as directors of Wing Hing. The term ‘Pa Ka’ refers to pigeon races originating during the Qing Dynasty when Chinese would bet on one or more of 80 birds each with a numbered ring attached to it. In the modern lottery game players must choose 20 out of 80 drawn numbers to win the top prize.

Winning number – Wing Hing lottery monopoly extended (Photo: Manuel Cardoso)

concession renewal is being prepared, the bureau confirmed. “The assessment on the renewal of the concession for Wing Hing has already been completed before the end of 2012,” the spokesperson wrote in an e-mailed reply to Business Daily. “The promulgation of the information may take a bit of time

Slot revenue helps Macau to 19 pct growth in early Jan Monthly GGR on track for nearly MOP30 bln says Sterne Agee

evenue from slot machines – a sometimes overlooked part of Macau casinos’ inventory because of the city’s massive dependence on live dealer baccarat – helped the city’s gross gaming revenue grow by 19 percent year-on-year in the first 13 days of January, suggests a note from Sterne Agee, a privately-owned brokerage in the United States. “The slot inclusive GGR run-rate puts January MOP [patacas revenue] at ~29.7 billion, or ~+19 percent year-on-year (+5 percent monthon-month) versus our +15 percent y-o-y (+2 percent m-o-m) estimate and [market] consensus below 10 percent,” says David Bain in the note. Caution is needed when assessing the contribution of slot revenue to the city’s gaming market. Several Macau operators have previously reported privately to investors that a small number of VIP players are providing a lot of their slot revenue. If slot revenue has helped ‘move the needle’ so far in January, it could actually be a function of a modest number of high rollers being added to a market with a relatively small base, rather than a sign of a big growth in the market base. Slot revenue accounted for only 4.4 percent of all revenue from casino

games in 2012 according to data from Macau’s Gaming Inspection and Coordination Bureau. But in cash terms it still amounted to 9.74 billion patacas (US$1.22 billion). It’s not yet clear what effect if any, the partial smoking ban introduced on Macau’s casino floors on January 1, will have on slot revenue. But given slots’ relatively modest contribution to Macau’s total gaming gross, anecdotal reports from casino labour associations suggest local operators have been designating a disproportionate amount of their slot floors as ‘no smoking’ zones and keeping their higher yield live table areas as smoking areas. “When the smoking ban was introduced in Australia, slot hall operators introduced a system where players wanting a cigarette or toilet break could reserve their machine,” one Macau slot machine supplier told Business Daily yesterday. “That made sure no one could come along while they were away, play the machine and win ‘their’ jackpot. There’s no such system in Macau casinos. And from my personal observation, the smoking ban is having some negative impact on the ‘grind’ [lower] end of the slot mass market,” said the person. M.G.

due to the administrative procedures required,” the person added. The Chinese lottery concession to Wing Hing, part of Stanley Ho Hung Sun’s business interests, has remained almost unchanged since 1990. Wing Hing pays the government 23 percent of its revenue, plus five per cent to the Macao Foundation.

MOP 500,000

PREMIUM PAID BY WING HING FOR CHINESE LOTTERY CONCESSION EXTENSION

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business daily January 16, 2013

MACAU Pataca ends year on a low

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The pataca dropped to a 10-month low against the currencies of the city’s main trading partners in December, the Monetary Authority of Macau revealed yesterday. The pataca’s trade-weighted effective exchange rate index fell by 0.44 points from November to 96.85 points, making imports more expensive. The index reached 104.3 points in June 2010 but since then the pataca has depreciated, mostly because the yuan has strengthened. Macau’s foreign exchange reserves amounted to 132.5 billion patacas (US$16.6 billion) at the end of last year.

FOOD ON THE TABLE Macau is wholly dependent on imports for the food it needs to feed its growing population and its vast numbers of visitors. For supplies of some kinds of food we rely heavily on mainland China. But the picture is more complex than commonly supposed. Food, including livestock, made up just over 8 percent of all imports in the first 11 months of last year. Imports from the mainland made up less than one-third of food imports.

Faster profit growth for CTM: analyst Mobile business growth will continue to boost telecom’s profit, analysts say Vítor Quintã

vitorquinta@macaubusinessdaily.com

Unsurprisingly, we depended on the mainland most for livestock for consumption. Almost 82 percent of our imports of livestock came from the mainland. But livestock made up just 0.6 percent of all imports and under 7.9 percent of food imports. Imports from the mainland made up under 40 percent of imports of all other kinds of food. Over one-third of the vegetables and over onethird of the meat we imported came from the mainland. Roughly one-quarter of the other kinds of food we imported came from the mainland. The United States was our second-largest source of vegetables and fruit after the mainland, sending us 22 percent of our supply. We imported more meat from the United States and Brazil combined than we imported from the mainland. Thailand was our second-largest source of cereals after the mainland. By sending us 23 percent of our supply in 2011 Thailand was actually our largest source of cereals In that year. However, we must view these figures with caution, for two reasons. First, the nature and source of about onequarter of our imports are protected by statistical confidentiality. Second, Hong Kong supplies us with a considerable amount of some kinds of food but may not be the original source.

acau’s biggest telecom operator, Companhia de Telecomunicações de Macau SARL (CTM), will see its profit grow faster this year and in 2014, even though revenue will increase more slowly. DBS Vickers Group Research made the forecast in a note to investors released on Monday, which classifies the CTM acquisition a positive move for Citic Telecom International Holdings Ltd. Macau’s gaming revenue will grow by 10-15 percent this year and become “a growth driver” for CTM’s mobile business, analyst Tam Tsz Wang wrote. CTM had a market share of about 50 percent of all mobile phone subscribers in 2011, towering above competitors SmarTone Mobile Communications Ltd and Hutchison Telephone (Macau) Co Ltd.

“Fixed-line and broadband revenues will be relatively stable but provide strong cash flow to the company,” the note adds. DBS Vickers believes CTM’s profit has grown by just 2 percent last year to 953 million patacas (US$119.3

MOP953 mln ESTIMATED CTM PROFIT FOR 2012

J.I.D. The content of this column is the work of Business Daily’s journalists.

FOOD AS A PROPORTION OF ALL IMPORTS IN FIRST 11 MONTHS OF 2012

CTM had a market share of about 50 percent of all mobile phone subscribers in 2011

million), a huge drop from the 14.7 percent increase registered in 2011. The main reason was a slowdown in revenue, which rose by 17.3 percent to 4.7 billion patacas – far from the 44.4 percent hike posted in the previous year. The company’s revenue growth will cool down even further to 8.6 percent this year and 9.1 percent in 2014, the report predicts. On the other hand, profit is expected to bounce back with an 8 percent increase in 2013 and a 6 percent hike next year. The DBS Vickers report comes after Citic Telecom agreed to pay a total of US$1.16 billion to buy a 79 percent stake from CTM’s two major shareholders. The market was surprised by Citic Telecom’s decision to buy out minority shareholder Portugal Telecom along with Cable & Wireless Communications Plc, Mr Tam wrote. But the analyst believes the valuation of CTM seems fair in comparison with its Hong Kong-listed competitors. Citic Telecom described the CTM purchase as a landmark deal for the telecom unit of Chinese state-owned conglomerate Citic Group. DBS Vickers expects the company’s earnings per share ratio to grow by over 50 percent once the deal the completed, which should take six to nine months. Standard Chartered Plc analyst Steven Liu is even more optimistic and believes Citic Telecom’s earnings per share ratio could jump by as much as 74 percent. In a note to investors also released on Monday, Mr Liu says the acquisition will raise the company annual profit by over 150 percent.

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January 16, 2013 business daily | 7

MACAU The new housing curbs have been effective in tackling speculation, says ICBC Macau chief

ICBC mortgage loans doubled last year The bank is the largest Macau lender for several public housing projects, says CEO Tony Lai

tony.lai@macaubusinessdaily.com

he value of mortgage loans handled by the Industrial and Commercial Bank of China (Macau) Ltd doubled last year with about 10 percent going for affordable housing, said chief

executive Shen Xiaoqi. “There are several reasons for this increase. It reflects the prosperity in the Macau property market but it also proves ICBC Macau’s hard work in extending its business to

the community,” he said. Despite refusing to provide exact figures, he told reporters that Macau residents were the major target of the bank’s loans last year. Mr Shen was speaking after the launch of a

ON A NEWSSTAND NEAR YOU

new bankcard yesterday. The chief executive added his bank was the largest lender in several public housing projects for sale in the city. For instance, ICBC Macau lent money for over 70 percent of the households that bought the more than 800 flats in the affordable housing complex in Areia Preta. The bank has so far received over 1,600 loan applications for the TN27 project in Taipa, which will provide over 2,700 flats, said Mr Shen. The executive said the mortgage for affordable housing accounted for just 10 percent of all loans approved last year due to the small amount involved in each transaction. Mr Shen also thinks the new housing curbs introduced by the administration in October have been “very effective”. “It has obviously suppressed the speculators, affecting the transactions of the high-end flats,” he said. “The transactions for the personal-use houses, usually with lower prices, are normal.”

ICBC eyes first-half Hengqin launch

ON TIME, WHERE IT MATTERS!

ICBC Macau is “cautiously optimistic” of getting the approval to open a branch in Hengqin Island by the first half of this year, said its chief executive Shen Xiaoqi. “There will be news soon” about the bank’s application submitted last year to the China Banking Regulatory Commission, he told reporters yesterday. The latest supplement to the Closer Economic Partnership Agreement between Macau and mainland China lowers the minimum assets Macau banks must have to gain a foothold on the island to US$4 billion (32 billion patacas) from US$6 billion. ICBC Macau, very likely the city’s first bank on the island, would mainly provide services “to support the investments from Macau enterprises on Hengqin, as well as the residents’ life there,” said Mr Shen.

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business daily January 16, 2013

GREATER CHINA

CY Leung sets sights on housing HK chief executive to deliver his first policy address today Simon Lee

ong Kong Chief Executive Leung Chun Ying may address the city’s housing crunch when he gives his first policy address today, as he seeks to boost record-low popularity and move on from an opposition impeachment bid. With housing prices double what they were four years ago, the government must tackle the city’s crisis “without delay,” Mr Leung wrote in a blog post ahead of his first policy speech since he became chief executive in July. Mr Leung, who came to office on campaign promises to improve the lives of poor and middle-class citizens, may announce more measures to boost Hong Kong’s land supply. The city faces challenges that include property prices and pollution that have made it the most expensive and one of the smoggiest financial centres in the world. “He will focus on livelihood and economic issues including housing because that is the expectation of the people who supported him,” said Ma Ngok, a political scientist at the Chinese University of Hong Kong. The public will judge him on “whether he has what it takes to tackle livelihood and deep-rooted issues with effective measures,” Mr Ma said. Mr Leung must balance the demands of Hong Kong’s people and Chinese leaders including Communist Party

Leung Chun Ying is the least popular HK leader after six months in office

General Secretary Xi Jinping, who expressed his support for the chief executive last month. Mr Leung is the least popular Hong Kong leader after six months in office, according to survey data fromtheUniversityofHongKong’sPublic Opinion Programme. He has a support rating of 49.2 on a scale of 0 to 100.

Speaking to reporters before a meeting of his cabinet yesterday, Mr Leung said Hong Kong has a number of “deep-rooted” problems. He said the government is “determined to work with the people and address these problems that Hong Kong faces”. “A large part of C.Y.’s decision is

Beijing pollution lifting but still ‘unhealthy’

hina reported that pollution eased in Beijing after reaching record high levels in the past three days, as state media said the capital was becoming more famous for its smog than its culture or food. Official measures of PM2.5, fine airborne particulates that pose the largest health risk, fell in the morning after the government expanded efforts to fight the pollution and light wind that had blown the smog against mountains to Beijing’s north shifted south. The China Daily on Monday said the city was becoming better known

for “Beijing Cough” afflicting its residents than for Peking Duck or Peking Opera. With hospitals reporting more patients who complained of heart and respiratory ailments, the government shut dozens of factories and pulled government cars off the roads. The reaction reflects a growing awareness within the Communist Party that pollution is becoming a main instigator of social unrest, environmentalist Dai Qing said in an interview. “For so many years we all tried to do something and the authorities

gave us no reply,” Mr Dai said. “But once people have no water, no air, no land – something will happen. It’s very dangerous.” Levels of PM2.5 levels rose to as high as 993 micrograms per cubic metre in Beijing on Saturday, compared with World Health Organisation guidelines of no more than 25. The U.S. Embassy’s pollution monitor said overall pollution levels, including PM2.5 and larger particulates, was still at “unhealthy” levels. AFP

tied to his popularity,” said Alnwick Chan, a Hong Kong-based executive director at Knight Frank LLP, a property broker. “Curbing property prices is pretty much the only thing that can win him some applause.” Hong Kong’s benchmark Hang Seng Index has risen 20.4 percent

January 16, 2013 business daily | 9

GREATER CHINA since Mr Leung took office on July 1 last year. While he was selected by a 1,193-member panel comprised of billionaires, lawmakers and professionals, Mr Leung campaigned on a promise to ease a wealth gap that’s the worst since records started being kept in 1971. Housing is the most important issue for the government to tackle, according to a poll published on December 31 by the University of Hong Kong Public Opinion Programme. The survey of 1,019 people said 41 percent ranked housing as the top issue. Hong Kong’s economy is expected to grow 3.9 percent in 2013, according to a forecast by the Asian Development Bank published in October 2012. The city’s GDP increased 1.3 percent in the third quarter, according to government data. The city’s home prices have doubled over the past four years, surpassing their 1997 peak, and Hong Kong is now the most expensive place to buy an apartment, according to property broker Savills Plc. An 800-squarefoot apartment in the middle-class Taikoo Shing neighbourhood sold for HK$8.88 million (US$1.15 million) on January 10, according to data from the Centaline Property Agency. That’s more than six times the December U.S. median home price of US$180,600. Since Mr Leung took office, his government has introduced three sets of property measures, including a new tax for home buyers who are not permanent residents in the city. The chief executive has approved an increase of the minimum wage to HK$30 per hour, the first raise of the wage floor since it was implemented in 2011. The government also introduced a HK$6 billion subsidies programme for the elderly. Bloomberg News

CKI pays US$421 mln to buy New Zealand firm Li Ka Shing’s company keeps expanding overseas

illionaire Li Ka Shing’s Cheung Kong Infrastructure Holdings Ltd will buy New Zealand waste company EnviroWaste for NZ$501 million (US$421 million), the Hong Kongbased company’s third purchase in the past four months. Ironbridge Capital Pty Ltd will sell the company to Cheung Kong Infrastructure, known as CKI, subject to regulatory approvals, the Australian private equity firm said in a statement. Ironbridge paid NZ$259 million in 2007 for EnviroWaste, the second-largest waste services business in New Zealand, according to the buyout firm’s website. The acquisition adds to utilities and infrastructure purchases Mr Li has made in markets including Europe in the past three years. In July, he agreed to pay 645 million pounds (US$1 billion) for Wales & West Utilities Ltd in the U.K. and was involved in the acquisitions of Northumbrian Water Group Plc in 2011 and Electricite de France SA’s U.K. power networks the previous year. “Waste management provides good opportunity for future growth,” CKI Group Managing Director Kam Hing Lam said in a separate

statement. “It’s expected that New Zealand will experience long-term waste volume growth as the economy continues to expand.” CKI has about HK$5 billion (US$645 million) of cash and “will continue to explore acquisition opportunities,” Mr Kam said. It already owns New Zealand distributor Wellington Electricity Lines Ltd with Power Assets Holdings Ltd, a company also controlled by Mr Li.

Waste manager EnviroWaste serves about half a million customers in New Zealand, according to CKI. It owns and manages waste collection facilities, transfer stations and landfills, as well as ancillary services such as bulk waste haulage and landfill gas- toelectricity generation. The sale values EnviroWaste at 10 times earnings before interest, tax, depreciation and amortisation for the year through June 2012 and includes NZ$11 million of debt, according to the statement. Ironbridge has made 17 “bolton” acquisitions since its original investment in EnviroWaste, according to the release.

Li Ka Shing – investing in utilities and infrastructures

EnviroWaste is “well-placed” to “expand its operations under the ownership of CKI,” EnviroWaste chairman Kim Ellis said in the statement. Its management team will remain. Bloomberg News

10 |

business daily January 16, 2013

ASIA South Korea stands to gain

Expectations of further easing have nudged up Tokyo’s Nikkei share average to a 32-month high

Amari signals limits to campaign to weaken yen

Japan’s drive to weaken the yen poses a threat to big South Korean exporters such as Hyundai Motor Group, but the new government in Seoul may not want to do too much about it – a firming won could actually make the economy stronger. The yen tumbled against the dollar in the December quarter as the won was rising, depressing the shares of big Korean exporters, a swing in the exchange rate that traditionally set off alarm bells in Seoul over worries about the potential impact on sales to the rest of the world. However, Korean officials have signalled a new willingness to tolerate a higher won, partly to reflect a record current account surplus but also to help the economy shift away from a reliance on exports. President-elect Park Geun-hye, who takes office late next month, has said Korea’s export-led economic model was now outdated. Exporters no longer provide sufficient jobs, so she will focus on building up domestic industries.

Central bank warns economic outlook weak

apanese Economy Minister Akira Amari said the nation faces risks from any excessive decline in the yen, highlighting limits on Prime Minister Shinzo Abe’s campaign to drive down the currency. “If the yen excessively weakens, this would cause a spike in import prices,” Mr Amari told reporters in Tokyo yesterday. “It would be a benefit for exports, but would have harmful effects on people’s livelihoods.” Fiscal stimulus and the prospect of more central-bank easing drove a decline of about 10 percent in the yen against the dollar in two months, aiding Japanese exporters as the nation struggles to climb out of recession. Any strengthening of the currency could limit the stock rally that prompted Bank of America Corp. to upgrade its forecast for equities to a 39 percent gain through year-end. “Further depreciation of the yen is necessary to boost manufacturers’ profits and improve price competitiveness,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd and a former BOJ official. The Japanese currency gained 0.6 percent to 89.95 per dollar in Tokyo, its first gain in five days.

If the yen excessively weakens, this would cause a spike in import prices Akira Amari, Japanese Economy Minister

Mr Amari said yesterday that the currency is “correcting” to a level in line with economic fundamentals, while declining to comment on an appropriate value.

‘Powerful’ easing Bank of Japan Governor Masaaki Shirakawa said yesterday that the nation’s economy remains weak ahead of a Jan 21-22 meeting where the central bank will decide whether to add to stimulus for the fourth time in five months. “Exports and production are

decreasing as the global slowdown continues,” Mr Shirakawa said at a gathering of BOJ branch managers in Tokyo, adding that the bank will pursue “powerful monetary easing”. Goldman Sachs Group Inc., Bank of America and Nomura Holdings Inc. are predicting Japanese stocks will extend their longest streak of gains in 23 years. The Topix rose for nine straight weeks through January 11, the longest stretch since December 1989, when it hit a record 2,886.5. Goldman Sachs boosted its estimate to 1,000 on January 7 from 930, while Bank of America increased its 12-month estimate to 1,250 from 1,050, according to a January 11 note.

Fiscal stimulus Mr Abe announced 10.3 trillion yen (US$116 billion) in additional stimulus on Friday and is pressuring the Bank of Japan to double its inflation target to 2 percent after the third recession in five years. Goldman Sachs is buying shares of exporters, financial firms and utilities, Hiroyuki Ito, Tokyo-based head of equity investment at Goldman Sachs Asset Management Co., said last month.

Exports and production are decreasing as the global slowdown continues Masaaki Shirakawa, Bank of Japan Governor

International Monetary Fund official Zhu Min said yesterday that Japan’s debt burden is becoming “more serious” as the government takes extra steps to stimulate growth in the world’s third-biggest economy. Mr Zhu, a deputy managing director at the IMF, spoke in an interview in Hong Kong, where he’s attending the Asian Financial Forum. The risk is that the nation’s debt burden, estimated by the IMF at 237 percent of gross domestic product last year, will lead to a surge in government bond yields. Bloomberg News/Reuters

Morgan Stanley to pare investment bank jobs

organ Stanley plans to trim about 15 percent of its investment banking positions in Asia as it starts a round of job cuts this week, two people with knowledge of the matter said. Asian managing directors Saul Raccah and Leon Guo are among the investment bankers who will leave New York-based Morgan Stanley, the people said, asking not to be identified because the matter is confidential. Xu Li, a Beijing-based spokeswoman, declined to comment. The job cuts in Asia investment banking will be deeper than the 6 percent reduction to be made across the broader institutional securities group, which

includes fixed-income and equity sales and trading, research and investment banking, one of the people said. Mr Raccah, based in Hong Kong, is Asia-Pacific head of oil and gas on the investment-banking team, while Mr Guo is managing director for real estate, focusing on China. Another managing director, Zhang Jianyong, 48, who primarily advised power and utility clients in China, has already left, the people said. The 15 percent cuts will mainly affect country bankers and staff in the mergers and acquisitions and global capital market units in the Asia-Pacific region excluding Japan, one of the people said.

Globally, Morgan Stanley is eliminating about 1,600 jobs from its investment bank and support staff in coming weeks, with half the reductions in the U.S., a person with

direct knowledge of the matter said last week. The cuts will total about 6 percent of the global institutional securities group, the person said. Bloomberg News

January 16, 2013 business daily | 11

ASIA

Indian stocks may jump 14 percent in 2013

Singapore’s home sales jump in Dec Singapore’s private home sales jumped nearly 30 percent in December from the previous month, a surge that came just before the government took new measures to dampen demand in the residential market. Developers sold 1,410 housing units last month excluding executive condominiums, up from 1,087 units in November, according to data from the Urban Redevelopment Authority. On Friday, Singapore’s government unveiled sweeping measures to cool the housing market, such as raising stamp duties for buyers and limiting the amount of loans they can take.

If government and central bank sustain policies to boost economic growth, says Deutsche Bank Rajhkumar K Shaaw

ndia’s benchmark stock index may advance a further 14 percent this year if the Indian government and central bank sustain policy measures to boost economic growth, Deutsche Bank AG wrote in a report released yesterday. The BSE India Sensitive Index, or Sensex, may rise to 22,500, led by financial, energy, industrial, material and information technology stocks, according to the report by Deutsche Bank strategists Abhay Laijawala and Abhishek Saraf. The gauge climbed to more than 20,000 for the first time since January 2011 yesterday. Stocks jumped on Monday after data showed the benchmark inflation rate slowed to a three-year low in December, widening the Reserve Bank of India’s scope to reduce borrowing costs to revive the economy. The central bank signalled last month that monetary policy must shift toward aiding economic growth, predicting inflation will moderate in an economy expanding at the weakest pace in a decade. The authority meets for its next policy review on January 29. “The onus of transition from vicious to virtuous will initially lie with New Delhi and the Reserve Bank of India during the first half of 2013 before the baton is taken up by the private sector in the second half of the year,” according to the report. The Sensex had its biggest annual

Perodua plans US$770 mln investment India – trying to revive the economy

rally last year since 2009 as Prime Minister Manmohan Singh took measures to attract foreign investment to boost growth and to avert a creditrating downgrade. Overseas funds bought US$24.5 billion of local shares in 2012, the most among 10 Asian markets tracked by Bloomberg. Cyclical and rate-sensitive stocks will lead the rally in Indian shares this year, according to the report. Lenders Axis Bank Ltd., Bank of Baroda and Punjab National Bank are among Deutsche Bank’s top picks for 2013, along with Bharat Heavy Electricals Ltd., India’s

biggest power-equipment maker, and Larsen & Toubro Ltd., India’s largest engineering company. The bank also recommended Maruti Suzuki India Ltd, the biggest carmaker, Reliance Industries Ltd, owner of the world’s largest refining complex, Tata Steel Ltd, the nation’s biggest producer of the alloy, Tata Consultancy Services Ltd, India’s largest software services exporter, and cement maker Ultratech Cement Ltd. The report rated consumer staple, health-care and utility stocks underweight, the equivalent of sell. Bloomberg News

RBA seen turning from rate cuts As China rebounds and metals rally

ustralia’s central bank is at a turning point after the world’s steepest interest-rate cuts, swap markets show, as China’s economy rebounds. Contracts based on overnight borrowing costs indicate a 47 percent chance Governor Glenn Stevens and his board will keep the cash rate at a half century-low of 3 percent for the rest of this quarter, up from a 10 percent likelihood three months earlier. The yield on two-year government debt has climbed 14 basis points this year, the most among developed markets after Denmark, Sweden and Germany. UBS AG, Commonwealth Bank of Australia and Barclays Plc forecast the

Reserve Bank of Australia won’t cut benchmark borrowing costs this year, after a surge in the price of iron ore, the nation’s biggest export. The local dollar is the best performing Group of 10 currency against the greenback in 2013 as investors bet Australia will benefit from a rebound in China, its biggest trading partner. “I think it’s a turning point,” said Paul Bloxham, chief economist for HSBC Holdings Plc in Sydney and a former RBA official. “The RBA is going to say that the global environment has turned and the Asia story is picking up, commodity prices are rising and they’re going to look for more signals that you saw a reasonable turnaround

in the economy at Christmas.” Iron ore has jumped 32 percent since the RBA’s quarter percentage point cut on December 4, bringing to 1.75 percentage points the reductions in 14 months, the steepest in the developed world. Mr Stevens, who is aiming to rebalance Australia’s two-speed economy, where mining regions in the north and west thrive and manufacturers, retailers and builders in the south and east struggle, has been trying to avoid a gap in growth as policy makers predict mining investment will plateau this year. National Australia Bank Ltd predicts the central bank will lower rates by 75 basis points to a record 2.25 percent in the third quarter, forecasting slower economic growth that will push up the jobless rate to 5.75 percent by late this year, which would be the highest level since August 2009. “With the economy continuing to weaken and unemployment set to rise noticeably through 2013 the RBA will need to cut significantly further than previously expected,” NAB chief economist Alan Oster said, predicting 2013 growth will slow to 2 percent from a previous estimate of 2.5 percent. Reuters

Malaysia’s No. 2 national carmaker Perusahaan Otomobil Kedua Sdn Bhd (Perodua) plans to invest some US$770 million over four years to increase manufacturing efficiency, build more showrooms and aftersales service centres.The maker of low priced compact cars which commands nearly a third of the domestic market is seeking to increase productivity and cuts costs ahead of moves by the government to abolish or reduce duties on foreign imports of cars in the coming years. The 2.32 billion ringgit investment plan includes 790 million ringgit announced last month for a second manufacturing plant to boost production by 50 percent.

S. Korea limits giant retailers South Korea’s government approved yesterday a national law restricting the operating hours of large retailers in a bid to protect small stores who say they are being pushed out of business. The law, which will start to come into effect after three months, requires warehouse-style chains to shut stores on two Sundays a month and to limit their operating hours to 10am to midnight. The Sunday closure rule has already been adopted by many city councils, including the capital Seoul, although several top retailers have fought it in the courts, claiming discrimination.

Billabong surges after rival takeover bid Shares in struggling Australian surf and sportswear company Billabong International Ltd jumped 16 percent yesterday after it received a competing US$556 million takeover bid from U.S. clothing giant VF Corporation. The joint bid with San Francisco-based Altamont Capital Partners matches a previous bid by private equity firm Sycamore Partners and Billabong’s former U.S. head Paul Naude. “The board of Billabong announces that it has received an indicative, non-binding and conditional proposal from the Altamont/VF consortium to acquire all of the shares in the company for Aus$1.10 cash per share,” it told the Australian stock exchange after close of trade on Monday.

12 |

business daily January 16, 2013

MARKETS HANG SENG INDEX PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

30.45

0.661157

42145816

CHINA UNICOM HON

12.94

-2.265861

41681853

POWER ASSETS HOL

ALUMINUM CORP-H

3.99

-0.25

18803692

CITIC PACIFIC

13.14

-0.4545455

14144045

BANK OF CHINA-H

3.71

0.2702703

227154281

SANDS CHINA LTD

CLP HLDGS LTD

65.15

0.3079292

4326463

BANK OF COMMUN-H

6.31

0.96

36238877

16.2

-0.8567931

63757619

BANK EAST ASIA

31.1

0.6472492

2369974

11.96

0.6734007

5085947

17.28

14749934

ESPRIT HLDGS

10.9

-3.024911

15278186

HANG LUNG PROPER

30.8

2809619

TINGYI HLDG CO

HANG SENG BK

119

1508004

WANT WANT CHINA

58.55

1.210026

3916145

WHARF HLDG

64.25

74.7

-0.4

2763387

NAME AIA GROUP LTD

BELLE INTERNATIO BOC HONG KONG HO

25.9

0.5825243

25965691

CATHAY PAC AIR

14.92

0.8108108

2715563

CHEUNG KONG

127.7

0.2354788

4803224

8.79

-0.6779661

19361181

CHINA COAL ENE-H CHINA CONST BA-H

NAME

CNOOC LTD COSCO PAC LTD

HENDERSON LAND D HENGAN INTL

6.54

0.3067485

183319542

CHINA LIFE INS-H

26.95

0.7476636

29373511

CHINA MERCHANT

26.25

0.5747126

2969815

88.9

-1.386578

24520973

HUTCHISON WHAMPO

84.7

0.4149378

4348197

-1.185771

13500790

IND & COMM BK-H

5.86

0.8605852

228648562

9.18

-0.2173913

53418829

LI & FUNG LTD

11.68

-0.5110733

137667390

31.45

0.4792332

2350821

14.1

1.731602

28471026

CHINA MOBILE CHINA OVERSEAS CHINA PETROLEU-H

HONG KG CHINA GS

21.15

-0.4705882

5707460

HONG KONG EXCHNG

148.9

1.36147

9803729

HSBC HLDGS PLC

83.85

-0.9450679

10402830

NAME

PRICE

DAY %

65.65

0.2290076

2807862

36.1

-1.36612

8995477

SINO LAND CO

15.02

-0.2656042

5809479

SUN HUNG KAI PRO

123.3

3670455

98.1

0.2554931

851923

258.2

1.33438

3425203

-0.7092199

4164742

10.16

-2.119461

21845593

0.312256

3619427

SWIRE PACIFIC-A TENCENT HOLDINGS

MOVERS

VOLUME

4 23480

INDEX 23381.51 HIGH

23478.81

LOW

23218.82

CHINA RES ENTERP

27.25

1.301115

3040027

MTR CORP

CHINA RES LAND

23.15

-1.068376

4860715

NEW WORLD DEV

CHINA RES POWER

19.58

-0.305499

7877885

PETROCHINA CO-H

10.9

-0.9090909

50783232

CHINA SHENHUA-H

32.8

-1.204819

19933439

PING AN INSURA-H

69.35

0.6531205

10581841

PRICE

DAY %

VOLUME

31.35

-0.317965

11289040

YANZHOU COAL-H

9.18

-0.2173913

53418829

52W (H) 23515.85938 23210

(L) 18056.4 11-January

15-January

HANG SENG CHINA ENTERPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

4.03

0.2487562

71446908

CHINA PACIFIC-H

AIR CHINA LTD-H

-2.912621

16340000

CHINA PETROLEU-H

ALUMINUM CORP-H

3.99

-0.25

18803692

CHINA RAIL CN-H

9.4

-0.1062699

ANHUI CONCH-H

28.2

0.7142857

4518290

CHINA RAIL GR-H

4.89

BANK OF CHINA-H

3.71

0.2702703

227154281

CHINA SHENHUA-H

BANK OF COMMUN-H

6.31

0.96

36238877

CHINA TELECOM-H

BYD CO LTD-H

26.9

1.509434

4895511

DONGFENG MOTOR-H

CHINA CITIC BK-H

5.09

0.7920792

60710608

GUANGZHOU AUTO-H

CHINA COAL ENE-H

8.79

-0.6779661

19361181

CHINA COM CONS-H

7.84

0.2557545

CHINA CONST BA-H

6.54

CHINA COSCO HO-H

4.62

PRICE

DAY %

VOLUME

13.86

-1.141227

20902226

ZIJIN MINING-H

3.09

30046506

11390500

ZOOMLION HEAVY-H

10.9

0.3683241

19393617

0.204918

13950576

ZTE CORP-H

15.3

0.6578947

11145742

32.8

-1.204819

19933439

4.37

-0.6818182

78392071

12.66

-0.4716981

20765548

7.64

-2.176697

13661881

HUANENG POWER-H

6.92

-0.4316547

17529876

13495227

IND & COMM BK-H

5.86

0.8605852

228648562

0.3067485

183319542

JIANGXI COPPER-H

21.2

-0.7025761

7270970

1.315789

21879774

PETROCHINA CO-H

10.9

-0.9090909

50783232

26.95

0.7476636

29373511

PICC PROPERTY &

12.1

-0.1650165

15266991

CHINA LONGYUAN-H

6.46

1.412873

24572706

PING AN INSURA-H

69.35

0.6531205

10581841

CHINA MERCH BK-H

18.16

0.5537099

19628992

SHANDONG WEIG-H

7.59

-0.6544503

6333300

CHINA LIFE INS-H

CHINA MINSHENG-H

10.1

2.434077

48919622

SINOPHARM-H

25.3

-0.589391

2887829

CHINA NATL BDG-H

11.82

-0.5050505

26576300

TSINGTAO BREW-H

45.4

-2.887701

2017022

CHINA OILFIELD-H

15.88

0.3792668

8090000

WEICHAI POWER-H

-1.129944

2693900

NAME

MOVERS

1 12060

INDEX 12006.82 HIGH

12056.1

LOW

11813.37

52W (H) 12094.16016 11810

(L) 8987.76 11-January

15-January

SHANGHAI SHENZHEN CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

6.99

-0.1428571

39825910

QINGHAI SALT-A

27.57

3.959276

13368383

CITIC SECURITI-A

13.63

0.2943341

150333325

SAIC MOTOR-A

17.31

-0.5743825

21346900

36449628

CSR CORP LTD -A

5.13

0.5882353

86616342

SANY HEAVY INDUS

10.35

2.882704

67560522

-0.2409639

24341563

DAQIN RAILWAY -A

7.01

0.7183908

33051028

SHANDONG GOLD-MI

37.66

1.564186

24503521

18.25

-0.3820961

66323729

DATANG INTL PO-A

4.12

1.228501

28127242

SHANG PHARM -A

12.23

2.172097

26025492

BANK OF BEIJIN-A

9.36

0.1069519

54443226

EVERBRIG SEC -A

13.75

0.2186589

23374336

SHANG PUDONG-A

10.33

-0.1932367

134039003

BANK OF CHINA-A

2.97

-0.3355705

33201252

GD POWER DEVEL-A

2.63

0.3816794

79698668

SHANGHAI ELECT-A

4.26

1.428571

14982475

BANK OF COMMUN-A

5.04

101775771

GEMDALE CORP-A

-1.129944

57695967

SHANXI LU'AN -A

22.58

1.029083

24089108

BANK OF NINGBO-A

10.52

-0.2843602

20237061

GF SECURITIES-A

15.21

-0.9765625

62053530

SHANXI XINGHUA-A

42.27

-0.02365184

5472681

BAOSHAN IRON & S

5.1

0.1964637

26265606

GREE ELECTRIC

27.1

0.3332099

12943263

SHANXI XISHAN-A

13.91

0.724113

26747895 34176296

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.84

181549522

AIR CHINA LTD-A

5.79

43429538

ALUMINUM CORP-A

5.22

0.5780347

ANGANG STEEL-A

4.14

ANHUI CONCH-A

NAME CHINA YANGTZE-A

NAME

7.71

1.31406

33787181

GUANGHUI ENERG-A

17.56

3.782506

44647182

SHENZEN OVERSE-A

7.3

-0.4092769

23.85

6.047132

7738479

HAITONG SECURI-A

10.28

0.1949318

63796175

SICHUAN KELUN-A

64.1

-0.4658385

1645523

CHINA CITIC BK-A

4.31

0.9367681

32385923

HANGZHOU HIKVI-A

32.52

7.044108

11601982

SUNING APPLIAN-A

7.48

4.615385

159894722

CHINA CNR CORP-A

4.73

2.159827

70139008

HENAN SHUAN-A

64.55

0.2329193

3427128

TSINGTAO BREW-A

33.45

-1.327434

2435851

20687316

HONG YUAN SEC-A

18.93

-0.1055409

20753233

WEICHAI POWER-A

24.4

-1.214575

18763023

BBMG CORPORATI-A BYD CO LTD -A

CHINA COAL ENE-A

7.87

0.6393862

CHINA CONST BA-A

4.73

-0.4210526

58116520

HUATAI SECURIT-A

9.61

1.051525

28064389

WULIANGYE YIBIN

28.53

-0.6269592

51047361

CHINA COSCO HO-A

4.47

-0.2232143

30452369

HUAXIA BANK CO

10.52

0.5736138

41841953

YANGQUAN COAL -A

14.13

0.212766

38390954

CHINA CSSC HOL-A

24.05

-2.552674

34841780

IND & COMM BK-A

4.26

-0.6993007

75281665

YANTAI WANHUA-A

16.25

0.1232286

9727662

CHINA EAST AIR-A

3.53

2.023121

41569438

INDUSTRIAL BAN-A

17.3

0.1737116

79347796

YANZHOU COAL-A

18.13

1.228364

8327877

CHINA EVERBRIG-A

3.05

-0.6514658

175098152

INNER MONG BAO-A

36.84

1.993355

74281929

YUNNAN BAIYAO-A

70.01

2.8349

2974226

CHINA INTL MAR-A

13.1

-0.7575758

15245941

INNER MONG YIL-A

24.6

-1.24448

12511671

ZHONGJIN GOLD

16.57

1.843884

50440947

21.8

-0.09165903

12847493

INNER MONGOLIA-A

5.49

1.666667

121163552

ZIJIN MINING-A

3.87

0.78125

114981890

CHINA MERCH BK-A

13.79

-0.3612717

106719958

JIANGSU HENGRU-A

30.07

-0.26534

6856604

ZOOMLION HEAVY-A

9.12

1.55902

88821511

CHINA MERCHANT-A

29.84

-0.8637874

13480720

JIANGSU YANGHE-A

101.19

-0.481904

4490243

ZTE CORP-A

10.6

2.713178

55919075

CHINA MERCHANT-A

10.38

0.4840271

20415975

JIANGXI COPPER-A

-0.1597444

20471401

CHINA MINSHENG-A

8.6

0.5847953

140939098

JINDUICHENG -A

11.88

3.304348

28020571

CHINA NATIONAL-A

7.69

-2.534854

129566240

JIZHONG ENERGY-A

15.2

1.333333

35129043

16.63

2.149877

11873212

KANGMEI PHARMA-A

14.48

2.043693

43359962

210.85

0.6828383

5263508

CHINA LIFE INS-A

CHINA OILFIELD-A

1.7249

23749893

KWEICHOW MOUTA-A

7.07

-0.5625879

58946809

LUZHOU LAOJIAO-A

35.98

-0.9906439

19011212

CHINA RAILWAY-A

6.38

-0.1564945

33391539

METALLURGICAL-A

2.26

0.8928571

44576287

CHINA RAILWAY-A

3.38

0.8955224

55223029

NINGBO PORT CO-A

2.57

1.181102

50499455

23674687

PANGANG GROUP -A

4.14

0.4854369

104953841

9.03

25468601

3.042715

98406443

CHINA PACIFIC-A CHINA PETROLEU-A

CHINA SHENHUA-A

24.8

-0.5613472

CHINA SHIPBUIL-A

4.95

-0.8016032

124049289

PETROCHINA CO-A

CHINA SOUTHERN-A

4.02

1.515152

66659144

PING AN BANK-A

17.61

CHINA STATE -A

3.79

-0.5249344

132349704

PING AN INSURA-A

46.98

0.2346917

42006866

CHINA UNITED-A

3.56

0.8498584

113073731

POLY REAL ESTA-A

14.04

-0.4255319

54609263

10.12

166448824

QINGDAO HAIER-A

-0.3558719

10153681

PRICE DAY %

VOLUME

PRICE DAY %

VOLUME

CHINA VANKE CO-A

MOVERS 215

11 2610

INDEX 2595.856 HIGH

2601.99

LOW

2474.18

52W (H) 2717.825 (L) 2102.135

2470

10-January

14-January

FTSE TAIWAN 50 INDEX NAME

NAME

PRICE DAY %

VOLUME

TAIWAN MOBILE CO

105 -0.4739336

4108598

14159952

TPK HOLDING CO L

470

-1.467505

6601744

-2.717391

23383297

TSMC

100.5

-1.470588

35659126

84.2

-3.440367

107348143

54.1

-0.733945

5702116

231.5

-1.279318

293744

11.65

-1.271186

47248100

ACER INC

24.5

-1.606426

17101830

FORMOSA PLASTIC

80.2

0.5012531

4492767

ADVANCED SEMICON

24.8

-2.745098

17550385

FOXCONN TECHNOLO

85.8

-3.160271

ASIA CEMENT CORP

37.2

-1.06383

2001473

FUBON FINANCIAL

35.8

ASUSTEK COMPUTER

329

-1.201201

4271396

HON HAI PRECISIO

AU OPTRONICS COR

12.2

-3.174603

106817529

HOTAI MOTOR CO

NAME

UNI-PRESIDENT UNITED MICROELEC

CATCHER TECH

128.5

-3.383459

25268186

HTC CORP

287.5

-1.202749

15406651

31.3 -0.1594896

7754365

CATHAY FINANCIAL

31.85

-0.312989

17397654

HUA NAN FINANCIA

16.95 -0.2941176

3755479

YUANTA FINANCIAL

15.35 -0.9677419

12716328

CHANG HWA BANK

15.95

YULON MOTOR CO

56.2 -0.1776199

3005835

-0.623053

5839926

LARGAN PRECISION

725

0.2766252

2781249

CHENG SHIN RUBBE

74.7 -0.5326232

4868802

LITE-ON TECHNOLO

39.8

0.7594937

4753429

CHIMEI INNOLUX C

15.2

-1.935484

56999715

MEDIATEK INC

311.5 -0.1602564

4612502

CHINA DEVELOPMEN

7.61

0.2635046

63619706

MEGA FINANCIAL H

23.3 -0.8510638

17580613

28.05 -0.7079646

14433451

NAN YA PLASTICS

59.4

4077646

61327468

PRESIDENT CHAIN

161

1276456

CHINA STEEL CORP CHINATRUST FINAN CHUNGHWA TELECOM COMPAL ELECTRON DELTA ELECT INC

16.9

0.5952381

94.7

0.3177966

9208308

QUANTA COMPUTER

63.7

0.7911392

9869186

20.45

0.4914005

21916406

SILICONWARE PREC

30.5 -0.6514658

4633600

105

WISTRON CORP

MOVERS

3 5470

INDEX 5410.72

2.941176

4498057

SINOPAC FINANCIA

0.3861004

31125205

HIGH

5469.07

FAR EASTERN NEW

34.35 -0.2902758

5031752

SYNNEX TECH INTL

60.2

2.555366

16938390

FAR EASTONE TELE

72 -0.8264463

9978536

TAIWAN CEMENT

-1.265823

6009521

LOW

5389.19

FIRST FINANCIAL

17.6 -0.2832861

7283348

TAIWAN COOPERATI

16.5

5216580

FORMOSA CHEM & F

78.1

0.7741935

5453916

TAIWAN FERTILIZE

76.4 -0.7792208

3518120

FORMOSA PETROCHE

85.6 -0.6960557

1054830

TAIWAN GLASS IND

30.9

1105106

0.6514658

52W (H) 5621.53 5380

(L) 4719.96 11-January

15-January

January 16, 2013 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 33.0

51.0

16.7

32.8

50.5

16.6

50.0

16.5

49.5

16.4

32.0

49.0

16.3

37.00

21.0

22.8

20.8

22.6

20.6

22.4

20.4

22.2

32.6 32.4 32.2

36.75 36.50 36.25 36.00

COMMODITIES

CURRENCY EXCHANGE RATES

NAME ENERGY

PRICE

YTD %

(H) 52W

(L) 52W

WTI CRUDE FUTURE Feb13

94.02

-0.127469726

2.395992159

109.4300003

80.05999756

BRENT CRUDE FUTR Feb13

111.89

0.008938148

0.70200702

119.2999954

90.38999939

GASOLINE RBOB FUT Feb13

275.38

-0.010892851

-0.28605569

292.9699898

220.3500032

GAS OIL FUT (ICE) Mar13

955.75

0.870712401

3.408168786

1026.25

800.5

3.358

-0.444707975

0.208892868

4.090000153

3.049999952

307

0.244897959

1.259976514

333.4599972

255.6599855

Gold Spot $/Oz

1682.59

0.8511

1.0892

1796.08

1527.21

Silver Spot $/Oz

31.3675

2.0496

4.1764

37.4775

26.1513

Platinum Spot $/Oz

1701.15

3.5487

12.0837

1736

1379.05

Palladium Spot $/Oz

716.58

2.0842

2.4183

725.19

553.75

NATURAL GAS FUTR Feb13 HEATING OIL FUTR Feb13 METALS

DAY %

LME ALUMINUM 3MO ($)

2052

-2.169249106

-1.013024602

2361.5

1827.25

LME COPPER 3MO ($)

8000

-0.559353636

0.870003783

8765

7219.5

LME ZINC

1996

-0.91834202

-4.038461538

2220

1745

3MO ($)

LME NICKEL 3MO ($)

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

17255

-1.876599374

1.143024619

22150

15236

15.065

0.033200531

-0.724876442

16.84000015

14.89999962

725.5

0.20718232

3.902613677

846.25

511

WHEAT FUTURE(CBT) Mar13

772.25

0.684485007

-0.73907455

948.25

652

SOYBEAN FUTURE Mar13

1409.75

-0.58180536

0.017736786

1728.25

1194.5

ARISTOCRAT LEISU

COFFEE 'C' FUTURE Mar13

152.85

-0.293542074

6.293463143

240.3499908

141.25

CROWN LTD

SUGAR #11 (WORLD) Mar13

18.79

-0.582010582

-3.690415172

25.12999916

18.30999947

AMAX HOLDINGS LT

COTTON NO.2 FUTR Mar13

75.92

0.529661017

1.038062284

98.5

66.84999847

BOC HONG KONG HO

AGRICULTURE ROUGH RICE (CBOT) Mar13 CORN FUTURE

Mar13

WORLD STOCK MARKETS - Indices NAME

PRICE

DAY %

1.0567 1.6093 0.9225 1.3373 88.79 7.9854 7.7534 6.2157 54.4862 30.06 1.2248 28.959 40.585 9868 93.819 1.23365 0.831 8.3107 10.6794 118.73 1.0299

-0.0567 -0.1117 -0.542 0.0599 0.5406 -0.0013 -0.0129 0.074 0.0253 0.5655 0.0163 -0.0069 0.2341 -2.3612 0.6044 -0.6023 -0.1745 -0.0433 -0.074 0.4885 0.0097

YTD %

(H) 52W

1.8212 -0.5131 -0.7696 1.3874 -3.0296 -0.0276 -0.0361 0.2397 0.9338 1.7299 -0.2776 0.2555 1.0349 -0.76 -4.7879 -2.1213 -1.8748 -1.1214 -1.3952 -4.346 0

(L) 52W

1.0857 1.6381 0.9972 1.3487 89.67 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 94.659 1.2385 0.8506 8.4894 10.7712 120.13 1.0314

0.9582 1.5269 0.8931 1.2043 76.03 7.9823 7.7498 6.2105 48.6088 30.05 1.2152 28.913 40.54 8875 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029

MACAU RELATED STOCKS NAME

(H) 52W

(L) 52W

3.4

1.492537

7.936505

3.44

2.27

509147

11.64

-0.5128205

9.090908

11.81

7.97

3099392

0.08

1.265823

14.28571

0.119

0.055

5038500

25.9

0.5825243

7.468878

26.15

19.48

25965691

CENTURY LEGEND

0.29

-1.694915

9.433968

0.34

0.215

104000

CHEUK NANG HLDGS

5.85

1.211073

-2.337225

6.25

2.76

219994

CHINA OVERSEAS

-1.185771

8.225106

25.6

13.385

13500790

CHINESE ESTATES

12.38

-0.6420546

-5.351681

13.26

8.3

24500

CHOW TAI FOOK JE

12.84

0.7849294

3.215438

15.16

8.4

2628200 1760000

EMPEROR ENTERTAI

PRICE

DAY % YTD %

VOLUME CRNCY

-0.990099

5.820107

2.08

0.99

1.5

0.6711409

22.95082

1.58

0.41

1899600

32.15

0.3120125

5.930806

33.8

15.1

10777413

119

0.2527406

120

93.25

1508004

33.25

0.1506024

34.4

19.049

1413700

83.85

-0.9450679

3.136527

84.8

59.5

10402830

HUTCHISON TELE H

3.48

0.8695652

-2.247189

3.88

2.98

12007000

LUK FOOK HLDGS I

28.45

0.8865248

16.59836

33.2

14.7

1418000

MELCO INTL DEVEL

11.02

0.9157509

22.30854

11.84

5.12

5547000

2102.135

MGM CHINA HOLDIN

16.46

2.49066

17.40371

16.78

9.913

11918300

6857.35

MIDLAND HOLDINGS

3.93

-1.256281

6.216215

5.217

3.249

3096000

NEPTUNE GROUP

0.19

4.395604

0.222

0.084

19033000

NEW WORLD DEV

14.1

1.731602

17.30449

14.22

7.1

28471026

SANDS CHINA LTD

36.1

-1.36612

6.33284

37.8

20.65

8995477

SHUN HO RESOURCE

1.48

-0.6711409

5.714288

1.5

1.03

-1.301518

8.591884

4.65

2.559

15009862 4751333

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

13507.32

0.140046

3.076743

13661.87

12035.08984

NASDAQ COMPOSITE INDEX

3117.503

-0.2601711

3.2452

3196.932

2689.58

HANG SENG BK

FTSE 100 INDEX

6102.41

-0.08922929

3.469086

6134.17

5229.76

HOPEWELL HLDGS

DAX INDEX

7708.82

-0.2678045

1.266747

7789.94

5914.43

HSBC HLDGS PLC

NIKKEI 225

10879.08

0.7175809

4.655046

10952.31

8238.96

HANG SENG INDEX

23381.51

-0.1356069

3.198095

23515.85938

18056.4

CSI 300 INDEX

2595.856

0.7033722

2.889633

2717.825

TAIWAN TAIEX INDEX

7765.02

-0.7534538

0.8509646

8170.72

FUTURE BRIGHT GALAXY ENTERTAIN

KOSPI INDEX

1983.74

-1.160914

-0.666486

2057.28

1758.99

S&P/ASX 200 INDEX

4716.555

-0.06678381

1.454199

4750.7

3985

4400.824

0.4181633

1.949115

4427.652

3635.283

FTSE Bursa Malaysia KLCI

1684.29

-0.02018247

-0.2759059

1699.68

1509.06

SHUN TAK HOLDING

4.55

NZX ALL INDEX

906.712

0.543239

2.795637

906.775

718.56

SJM HOLDINGS LTD

20.75

0.973236

15.27778

20.95

12.34

PHILIPPINES ALL SHARE IX

3836.1

-0.02710352

3.706971

3857.79

3114.87

SMARTONE TELECOM

14.06

-1.402525

-0.1420449

17.5

12.96

2733770

WYNN MACAU LTD

22.25

-1.548673

6.205247

25.5

14.62

12037383

JAKARTA COMPOSITE INDEX

HSBC Dragon 300 Index Singapor

626.57

-0.39

0.88

STOCK EXCH OF THAI INDEX

1421.92

-0.2210418

2.154562

1432.21

1035

HO CHI MINH STOCK INDEX

461.42

0.533804

11.52684

492.44

LAOS COMPOSITE INDEX

1296.13

0.5515818

6.697563

1298.17

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

ASIA ENTERTAINME

4.13

6.994819

34.96732

7.24

2.4

480998

BALLY TECHNOLOGI

46.48

-0.9166489

3.958848

51.16

40.78

348027

349.31

BOC HONG KONG HO

3.36

3.384615

9.446256

3.36

2.56

5020

880.65

GALAXY ENTERTAIN

4.18

-0.2386635

5.289672

4.37

1.97

14550 3684315

INTL GAME TECH

14.89

-0.6008011

5.081157

17.67

10.92

JONES LANG LASAL

86.28

0.04638219

2.787703

87.62

61.39

182388

LAS VEGAS SANDS

52.17

-0.6664128

13.01993

58.3216

32.6127

3487425

MELCO CROWN-ADR

19.17

2.568218

13.8361

19.49

9.13

6853773

MGM CHINA HOLDIN

2.03

9.729728

2.09

1.2863

955

MGM RESORTS INTE

12.75

-0.390625

9.536079

14.9401

8.83

9460807

SHFL ENTERTAINME

14.44

0.2777778

-0.4137931

18.77

11.75

209007

SJM HOLDINGS LTD

2.67

3.488372

15.58442

2.67

1.6273

1750

WYNN RESORTS LTD

122.8

-0.1544841

9.165261

129.6589

84.4902

868005

AUD HKD

USD

14 |

business daily January 16, 2013

OPINION

India’s empty democracy can’t protect its people Pankaj Mishra

Bloomberg View columnist

lections make for responsive and accountable governments, or so goes the truism. But can they also achieve the opposite – that is, encourage complacency, even callousness, among elected representatives? Last month’s headlines from India and China present a disquieting contrast between elected and unelected governments for anyone committed to democratic politics. In Beijing, China’s new Communist Party general secretary, Xi Jinping, has begun a huge crackdown on corruption, official pomp and ceremony, and “empty talk” – substanceless speeches. According to the estimable China-watcher Melinda Liu, “If the changes take hold, they could have far-reaching implications both at home and abroad. Many Chinese seem heartened, even inspired, by Xi’s down-to-earth style.” Many Indians, on the other hand, are incensed with their sequestered governing class. Confronted last month with public outrage over the horrific assault on a young woman in New Delhi, it alternated abysmally between paralysis and insensitivity. Having initially failed to respond, Prime Minister Manmohan Singh muttered some perfunctory expressions of governmental resolve in his characteristically faint tone; then, turning to his handlers while the television cameras were still rolling, he asked, “Theek hai?” Hindi for “Is that all right?” India’s Home Minister Sushil Kumar Shinde said he was not obliged to meet student protesters braving the police’s water cannons and truncheons near the Indian parliament in New Delhi. After all, as he put it, “Tomorrow Maoists will come here to demonstrate with weapons.”

Force demonstrated In fact, the government responded to the spontaneous protesters as though they were militant insurgents from central India: It flooded Delhi’s streets with armed police and shut down roads and railways, revealing a formidable security apparatus

that, many argued, could be put to better use ensuring the safety of ordinary citizens. It wasn’t just the government that acted ham-handedly. Figures from all political parties seemed to vie with one another in their crass responses to an atrocious crime, and to the cultures of violence and cruelty it issued from. Not surprisingly, India these days brims with a free-floating rage against an obscenely venal and cossetted political class that zealously guards its privileges and perks.

Securing support Middle-class anger has periodically erupted in recent months, and it even appeared to solidify briefly into mass political movements. First, Baba Ramdev, a yoga practitioner, enlisted tens of thousands to his anticorruption crusade. He was followed by Anna Hazare, a quasi-Gandhian activist, who managed to attract a motley crowd of industrialists, film stars, students on Facebook and urban professionals. More recently, one of Hazare’s former lieutenants, an ex-civil servant named Arvind Kejriwal, has run a name-and-shame campaign against some of India’s most powerful politicians and businessmen. Each of these events, including last month’s protests over the gang rape, has been widely greeted as the harbinger of a politically awakened and empowered middle class. The government, however, has calculated otherwise. It unleashed the police on Ramdev, evicting him and his followers from their rally grounds in New Delhi. It was similarly ruthless with Hazare, counting successfully on the inability of the educated and the salaried to sustain mass protests or follow them up with a political programme. The government will probably have little to fear from Kejriwal, whose new political party will struggle to get many votes outside pockets of the urban middle class. And, though startled by public anger over the gang rape, the government will no doubt try to defuse it with

some hasty legislation and emollient words. With elections due in 2014, the government is trying to secure its two main sources of support: big-business men and the vast majority of poor Indians who vote. Recent economic policies, which allow greater foreign investment in multibrand retail, have somewhat mollified the corporate class, inspiring its representatives in the news media to again hail the lameduck prime minister as a reformer. An ambitious plan of cash transfers to the poorest Indians – a definite vote-getter – was also recently inaugurated. The government’s election strategy seems clear: It desperately wants to be seen as redistributing the spoils of economic growth through greater subsidies, even as it facilitates greater access for India’s networks of crony capitalism. Insomerespects,thegambit resembles that of Thailand’s populist authoritarian Thaksin Shinawatra, who cannily used his support among the rural poor to cement his status as chief crony capitalist. As events in Thailand showed, the intolerably squeezed urban middle class, the supposed avant-garde

The government … desperately wants to be seen as redistributing the spoils of economic growth through greater subsidies, even as it facilitates greater access for India’s networks of crony capitalism

Prime Minister Manmohan Singh

of democracy, can do little except turn, unhelpfully, to even more authoritarian figures in the military and the old conservative elite. In India, too, many among the relatively privileged – those, for instance, demanding public hangings and castrations of rapists – are contemptuous of democratic and legal processes and generally indifferent to the routine killings and rapes in Kashmir and the Northeastern states by security forces. With their narrow conception of civil rights, they are always vulnerable to self-proclaimed vendors of instant justice and efficiency. In fact, middle-class support has helped the rise of authoritarian figures such as Narendra Modi, the chief minister of Gujarat, who was re-elected last month despite accusations he was complicit in hundreds of deaths and rapes during an anti-Muslim pogrom in his state in 2002. Modi now hopes that the growing appeal among middleclass Indians of his apparently successful technocracy will help him unseat Singh’s government in Delhi. Modi may not succeed. Still, his ascension through a devastated moral landscape points to the radical shrinking of political choices in India.

Self-interested This lamentable situation, where elected representatives act as yet another aggressively self-interested elite, is at least partly to be blamed on the fact that the formal and proceduralist features of democracy – elections – have superseded their substantive aspects: strong, accountable and fair-minded institutions

and officials. Certainly, the importance of the latter is not lost on China’s unelected rulers. Buffeted by a series of scandals, they know that strong measures against corruption are essential to maintaining the communist regime’s legitimacy and ensuring its survival against a rising tide of discontent. Recent protests, such as the one at Southern Weekend newspaper in Guangdong, test the credibility of Xi and his commitment to reform. India’s own entrenched political class derives its legitimacy from routine elections and well-timed sops to the poor majority. These chosen people don’t have much incentive to engage with middleclass protesters on the streets of Indian cities and don’t have to think hard before dispelling them with brute force. Indeed, it is now the turn of metropolitan Indians, after political dissenters in Kashmir, the northeast, and central India, to feel the heavy hand of the state. The discontented urban middle class is a growing demographic. But it is deceptively overrepresented for now by India’s many, perennially hysterical television anchors. Politically fragmented and unorganised, the urban middle class has little to look forward to in the short term, apart from the periodic rise and fall of ineffectual demagogues such as Hazare and Ramdev. Its electoral insignificance in the world’s largest democracy has been carefully quantified by the people to be chosen in 2014. As the prime minister might put it, “Theek to hai na – that’s all right, then!” Bloomberg View

EDITORIAL COUNCIL Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça FOUNDER & PUBLISHER Paulo A. Azevedo | pazevedo@macaubusinessdaily.com EDITOR-IN-CHIEF Tiago Azevedo DEPUTY EDITOR-IN-CHIEF Vitor Quintã ASSOCIATE EDITOR Michael Grimes NEWSDESK Alex Lee, Stephanie Lai, Tony Lai CREATIVE DIRECTOR José Manuel Cardoso DESIGNER Janne Louhikari CONTRIBUTORS Frederico Rato, José I. Duarte, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani PHOTOGRAPHY Carmo Correia, John Si, Manuel Cardoso ASSISTANT TO THE PUBLISHER Laurentina da Silva | ltinas@macaubusinessdaily.com OFFICE MANAGER Elsa Vong | elsav@macaubusinessdaily.com AGENCIES Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate PRINTED in Macau by Welfare Ltd.

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January 16, 2013 business daily | 15

OPINION BUSINESS

WIRES

Ethics and agriculture

Leading reports from Asia’s best business newspapers

Singer Peter

Professor of bioethics at Princeton University and Laureate Professor at the University of Melbourne

KOREA HERALD South Korean exporters will likely continue to face growing protectionism this year as major economies struggle to create jobs and shield their local industries from a prolonged economic slowdown, a report said on Monday. According to the report compiled by the Korea Trade-Investment Promotion Agency (KOTRA), China, South Korea’s top trading partner, is imposing anti-dumping tariffs on 16 South Korean products. “South Korea becomes a target of protectionism by major trading countries as its exports post a steady growth in the face of the global economic downturn,” said an official at the KOTRA.

STRAITS TIMES The government will continue building executive condominiums (ECs) and has moved to fix loopholes in the EC policy, Singapore’s Minister for National Development Khaw Boon Wan said on Monday in Parliament. He noted that the government has capped EC unit sizes to 160 square metres to keep prices affordable and has also required dual-key units to be sold only to multi-generational families to prevent buyers from taking advantage of such units for immediate rental yield. The new measures to curb home priceswereannouncedlastFriday.

YOMIURI SHIMBUN Japan’s transport ministry plans to ease regulations on code-sharing flights to and from Tokyo’s Haneda Airport when the number of take-off and landing slots for domestic flights at the airport is boosted in March. For flights operated jointly by major and new carriers, the proportion of tickets the major carriers can sell will be raised to 50 percent from the current 25 percent, informed sources said. Haneda’s take-off and landing slots will be raised by about 20,000 a year on March 31. The proportion of tickets for seats on code-sharing flights has been kept low for major airlines to foster new carriers.

TAIPEI TIMES Taiwan’s Control Yuan on Monday impeached a former executive of the state-owned oil utility CPC Corp for negligence in handling procurement and bidding projects. Members of the Control Yuan voted 8-to-5 to impeach Yang Ching-hsi, a former deputy general manager of CPC. They referred the case to the Judicial Yuan’s Functionary Disciplinary Sanction Commission for discipline and forwarded their report to prosecutors for reference. An investigation found that Mr Yang should bear responsibility for a number of suspected irregularities related to procurement and bidding cases because he was in charge of these matters.

hould rich countries – or investors based there – be buying agricultural land in developing countries? That question is raised in Transnational Land Deals for Agriculture in the Global South, a report issued last year by the Land Matrix Partnership, a consortium of European research institutes and non-governmental organisations. The report shows that since 2000, investors or state bodies in rich or emerging countries have bought more than 83 million hectares (more than 200 million acres) of agricultural land in poorer developing countries. This amounts to 1.7 percent of the world’s agricultural land. Most of these purchases have been made in Africa, with two-thirds taking place in countries where hunger is widespread and institutions for establishing formal land ownership are often weak. The purchases in Africa alone amount to an area of agricultural land the size of Kenya. It has been claimed that foreign investors are purchasing land that has been left idle; thus, by bringing it into production, the purchases are increasing the availability of food overall. But the Land Matrix Partnership report found that this is not the case: roughly 45 percent of the purchases involved existing croplands, and almost a third of the purchased land was forested, indicating that its development may pose risks for biodiversity. The investments are both private and public (for example, by state-owned entities) and come from three different groups of countries: emerging economies like China, India, Brazil, South Africa, Malaysia, and South Korea; oil-rich Gulf states; and wealthy developed economies like the United States and several European countries. On average, per capita income in the countries that are the source of these investments is four times higher than in the target countries.

‘Land grabs’ Most of the investments are aimed at producing food or other crops for export from the countries in which the land is acquired, for the obvious reason that richer countries can pay more for the output. More than 40 percent of such projects aim to export food to the source country – suggesting that food security is a major reason for buying the land. Oxfam International calls some of these deals “land grabs.” Its own report, Our Land, Our Lives, indicates that, since 2008, communities affected by World Bank projects have brought 21 formal complaints alleging violations of their land rights.

Oxfam, drawing attention to large-scale land acquisitions that have entailed direct rights violations, has called on the Bank to freeze investments in land purchases until it can set standards ensuring that local communities are informed of them in advance, with the option of refusing them. Oxfam also wants the Bank to ensure that these land deals do not undermine either local or national food security. In response, the World Bank agreed that there are instances of abuse in land acquisition, particularly in developing countries in which governance is weak, and said that it supported more transparent and inclusive participation. At the same time, it pointed to the need to increase food production to feed the extra two billion people expected to be alive in 2050, and suggested that more investment in agriculture in developing countries is required to improve productivity. The Bank rejected the idea of a moratorium on its own work with investors in agriculture, arguing that this would target precisely those who are most likely to do the right thing.

Informed choice One may ask whether transparency and the requirement that local landholders consent to a sale is enough to protect people living in poverty. Supporters of free markets will argue that if local landowners wish to sell their land, that is their choice to make. But, given the pressures of poverty and the lure of cash, what does it take for people to be able to make a genuinely free and informed choice about selling something as significant as a right to land? After all, we do not allow poor people to sell their kidneys to the highest bidder. Of course, hardline supporters of free markets will say that we should. But, at the very least, it needs to be

explained why people should be prohibited from selling kidneys, but not from selling the land that grows their food. Most people can live without one kidney. No one can live without food. Why does the purchase of body parts give rise to international condemnation, while the purchase of agricultural land does not – even when it involves evicting local landholders and

One may ask whether transparency and the requirement that local landholders consent to a sale is enough to protect people living in poverty

producing food for export to rich countries instead of for local consumption? The World Bank may indeed be more concerned about local landholders’ rights than other foreign investors are. If so, the 21 complaints made against Bank projects are most likely the visible tip of a vast iceberg of violations of land rights by foreign investors in agricultural projects in developing countries – with the others remaining invisible because victims have no access to any complaint procedure. One such case belatedly came to the attention of the United Nations Human Rights Committee. In November, the Committee concluded that Germany had failed to police the Neumann Kaffee Gruppe regarding its complicity in the forced eviction of several villages in Uganda to make way for a large coffee plantation. But the evictions took place in 2001, and the villagers are still living in extreme poverty. They found no remedy, in either Uganda or Germany, for the violation of rights that, according to the Committee, they possess under the International Covenant on Civil and Political Rights, to which Germany is a signatory. Are we to believe that landholders fare better with Chinese or Saudi investors? © Project Syndicate

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business daily January 16, 2013

CLOSING Germany’s economy slows sharply

Pakistan court orders PM arrest

The German economy contracted by a larger-than-expected 0.5 percent in the final quarter of 2012, a preliminary estimate from the Federal Statistics office showed yesterday, as the euro zone crisis weighed on exports and corporate investment. The weak fourth quarter pushed overall growth for the year down to 0.7 percent, a sharp slowdown from the 3.0 percent registered in 2011 and a post-reunification record of 4.2 percent in 2010. German exports and imports slid in November and industry orders fell more than expected, compounding expectations that the euro zone debt crisis is hitting the German economy with full force.

Pakistan’s Supreme Court has ordered the arrest of Prime Minister Raja Pervez Ashraf and 15 others over corruption allegations. Mr Ashraf denies accepting bribes when approving power generation projects as minister for water and power in 2010. Analysts say that the move is unlikely to lead to his immediate removal. It comes as populist cleric Tahirul Qadri led thousands of protesters in Islamabad, demanding the resignation of the government. Mr Ashraf’s predecessor, Yousuf Raza Gilani, was forced out as prime minister last June after a court convicted him of contempt for failing to pursue another corruption case against the president.

HKEx to launch Asian trading on LME Offerings to be expanded by lowering barriers to trading, says chief executive

HKEx paid US$2.2 billion for the LME last year

ong Kong Exchanges and Clearing said yesterday it will introduce Asian time-zone price discovery and clearing on the London Metal Exchange (LME), in a move that could hold off competition from its Shanghai rival. The initiative was unveiled by chief executive Charles Li in the exchange’s 201315 strategic plan in Hong Kong, along with plans to establish an LME-licensed warehouse network in China

and potential to extend the LME’s production suite into the Hong Kong market. Introducing a third, earlier, round of trading sessions is the biggest shift in the way the 135-year old LME operates since the launch of its electronic platform over a decade ago, and runs counter to the global industry trend toward shutting down trading pits in favour of faster, cheaper electronic platforms. An Asian session is the most concrete effort yet to

increase business from Asian investors since the LME extended electronic Select trading hours in 2006 and introduced Asian reference prices in 2011. The LME has seen its share of the global copper futures market eroded by both the Shanghai Futures Exchange, where Chinese speculators are active, and CME Group, whose active electronic platform and familiar futures structure has attracted highfrequency traders.

Mr Li said HKEx would expand the LME’s offerings by lowering barriers to trading from Asia, extending the LME’s warehouse network in the region, particularly mainland China and developing Asian time zone clearing and possibly Asian time zone price benchmarks and developing renminbi clearing. “When China begins exporting capital, that’s when they’ll want to talk on their terms,” Mr Li told a

presentation in Hong Kong. “That’s why we need to be ahead of that by allowing for Asian trade of commodities, in an Asian time zone.” HKEx will also use the LME’s status as the world’s biggest metals marketplace to extend HKEx’s commodity platform into ferrous metals, such as iron ore, coking coal and energy, Mr Li said. “We need to extract the value that LME can bring to us,” he added. “As a metaphor, we need to extract US$10 from every US$1 we put into LME.” HKEx, the world’s No.2 exchange operator by market value, paid US$2.2 billion for the LME last year, as it seeks to expand beyond its traditional business in equities trading. Mr Li has hailed the acquisition as “transformational”, giving the Hong Kong bourse operator access to the LME, but has come under pressure to justify the high price tag. HKEx’s share price has risen almost 30 percent since mid-October last year, compared with a 10 percent rise in the Hang Seng Index. Reuters

Japan approves extra budget Finance minister says not bound by previous govt fiscal target

apan’s cabinet approved yesterday a 13.1 trillion yen (US$146.8 billion) extra budget, which includes 10.3 trillion yen in economic stimulus spending announced last week, as the government tries to boost a flagging economy. The extra budget, which also contains 2.6 trillion yen to offset a shortfall in the pensions system, takes government spending for the fiscal year ending in March to 100.5 trillion yen, a statement from the finance minister showed. Compared with previous fiscal years when the government has compiled extra budgets, government spending reached the third-highest

on record, a finance minister official told reporters at a briefing. The government will sell an additional 5.2 trillion yen in government bonds, which would raise bond issuance in fiscal 2012/2013 to 49.5 trillion yen, according to the statement. For the current fiscal year, the government will rely on bond income to fund 49.2 percent of spending, which is the second-highest ratio on record, the official said. The highest ratio of 52.1 percent was se t wh en th e go ve rn me nt compiled an extra budget in fiscal 2009/2010 due to the financial crisis. Japan’s cabinet approved an

economic stimulus package on Friday in the biggest spending boost since the financial crisis, as Prime Minister Shinzo Abe pursues an ambitious agenda to spur growth and end nagging deflation. Japanese Finance Minister Taro Aso said yesterday that he does not feel bound by the previous government’s fiscal discipline targets and that it is more important to escape an economic lull than to limit bond issuance. Mr Aso, speaking to reporters after the cabinet meeting, said fiscal discipline is important in compiling next fiscal year’s budget and the current government led by the Liberal Democratic Party could compile new fiscal discipline targets by

Japanese Finance Minister Taro Aso

the middle of the year. The previous government led by the Democratic Party had agreed to limit new bond issuance to 44 trillion yen (US$493 billion) each fiscal year. Reuters