Year I Number 291 Thursday January 31, 2013 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP 6.00
www.macaubusinessdaily.com
Meat trade gets catty about border smuggling
Trade union law is back on public agenda Three years after business interests blocked him, legislator José Pereira Coutinho is back with a new bill to establish legal trade unions with the right to collective bargaining. “Certain businessmen use their advantageous position to abuse workers’ contracts,” he told Business Daily. There’s also no legal protection from dismissal for strikers here.
Page 2
E
ight percent of the city’s 120 market stalls selling pork have been found offering smuggled meat according to checks made by the Association of Fresh Meat Traders. It highlights the apparent explosion in socalled ‘parallel imports’ of meat – mostly from the mainland. This week a Macau resident was caught by customs at the Gongbei
crossing while trying to smuggle in the flesh from two sheep, 15 chickens and 15 doves, Chinese-language media reported. It also puts a spotlight on soaring meat prices here. One catty (about 600 grams) of fresh pork costs about 30 patacas (US$3.80) to 40 patacas in local wet markets, but only 15 patacas in neighbouring Zhuhai. Local importers deny profiteering. More on page 3 I SSN 2226-8294
HANG SENG INDEX
Wynn Resorts’ earnings per share likely down
23910.0
23872.5
Wynn Resorts Ltd – parent of Macau casino developer and operator Wynn Macau Ltd – is likely to announce earnings per share of US$1.26 according to a preview of fourth quarter earnings on Forbes.com quoting unnamed analysts. That would be a fall of 18.7 percent compared with the US$1.55 in EPS produced in the same quarter in 2011.
23835.0
23797.5
23760.0
January 30
Page 4
HSI - MOVERS Name
China stocks could be sold to some Macau residents China might let Macau residents living on the mainland invest directly in the stock market there using renminbi said Tong Daochi of the mainland’s securities regulatory commission. The measure would also allow residents of Taiwan and Hong Kong to invest directly in the mainland’s A-share market – usually closed to foreigners – on the Shanghai and Shenzhen stock exchanges.
Page 7
Utility boosts profits via property sales The city’s sole electricity distributor, Companhia de Electricidade de Macau SA, has produced its best results since 2009, the firm’s chairman said yesterday. Whether that’s sustainable is not clear, as selling off property boosted 2012’s profits. Since late 2010 the government has capped CEM’s return on capital at 9.5 percent as a way of keeping down prices charged to consumers. Electricity sales in 2012 brought in about 500 million patacas (US$62.5 million), but were topped up by the property disposals said Franklin Willemyns, without disclosing what had been sold. Page 6
%Day
CHINA RES POWER
2.63
CITIC PACIFIC
2.56
BELLE INTERNATIO
2.42
CHINA MERCHANT
2.23
SANDS CHINA LTD
2.23
HENDERSON LAND D
-1.12
WANT WANT CHINA
-1.15
LI & FUNG LTD
-1.39
KUNLUN ENERGY CO
-1.90
CATHAY PAC AIR
-3.69
Source: Bloomberg
Brought to you by
2013-01-31
2013-02-01
2013-02-02
16˚ 22˚
17˚ 22˚
16˚ 21˚
2 |
business daily January 31, 2013
macau
New trade union bill in front of lawmakers Legislator José Pereira Coutinho is pinning his hopes on a third attempt at creating a trade union law Vítor Quintã
vitorquinta@macaubusinessdaily.com
José Pereira Coutinho is hoping third time will prove lucky and the Legislative Assembly will pass his trade union bill (Photo: Manuel Cardoso)
Lau Cheok Va. “After the translation is ready, the president will analyse [the proposal] to see if it will be approved before it is submitted for voting at a plenary session,” the spokesperson told Business Daily. There is no timetable for bringing the bill to a vote. Mr Coutinho, who is also the head of the Macau Civil Servants Association, is unsure if this third attempt at introducing the city’s first trade union law will be approved. “It depends on my fellow legislators. I have been talking about this issue for a very long time, so I do not think they would need any more persuasion,” he said. He said the bill was likely to win support from lawmakers affiliated with the New Macau Association and the Macau Federation of Trade Unions. Pan-democrat legislator Au Kam San told Business Daily he would “definitely” support a law that “should be in place much earlier as this is a right stated in the Basic Law. Labour legislator Kwan Tsui Hang was a bit more cautious but said that “if this new version does not have any contradictions to what we have done or agree upon so far, at least for me it is an absolutely yes.” However, as many assembly members are businessmen, Mr Coutinho said the votes of seven legislators appointed by the chief executive would be pivotal.
Non-residents exempt
T
he draft of a new trade union bill was sent to the Legislative Assembly a fortnight ago, legislator José Pereira Coutinho confirmed to Business Daily yesterday – his third attempt to introduce
legislation to govern unions. The bill is yet to be published on the assembly’s website because it is being translated from Portuguese into Chinese, according to a spokesperson for Legislative Assembly president
“I guess it will be really up to the Chief Executive [Fernando Chui Sai On] himself. I am sure nobody knows the chaotic situation of the labour market better,” he said. Mr Au is “not so optimistic that the law can secure enough votes to
Jockey Club staff cry foul over salary terms change Stable workers claim their signatures were forged to erase year-end bonus Stephanie Lai
sw.lai@macaubusinessdaily.com
M
acau Jockey Club (MJC) stable workers criticised the Labour Affairs Bureau for approving the company’s decision to stop paying the end-of-year bonus, without the staff’s approval. Leong Ngai Hong and Chan Kin Kuok, two of the workers, held a press conference yesterday with over 30 former and current colleagues. In 2003, an amendment was made
to the club’s staff handbook, replacing the end-of-year bonus provision with a “discretionary bonus,” Mr Chan told media. “Accompanying the handbook is a document, with our signatures, saying we are all willing to comply with the new amendment,” he added. In a press statement, the Labour Affairs Bureau said it has received the documents send by the club.
“But the fact is we have never, ever signed the document, and we really fear the signatures were forgeries,” said the protester. Mr Leong and Mr Chan told Business Daily that they have filed a complaint over the alleged forgery case to the Public Prosecutions Office in early January. Mr Chan claimed that the bonus issue has affected over 1,000 workers
pass the first reading” because the business sector “is highly worried about such a law”. Details of the bill contained in an official statement of reasons omit any reference to non-residents, unlike a previous draft Mr Coutinho submitted to the Legislative Assembly in 2009. The draft gives trade unions the power to legally represent workers while benefitting from an exemption in court fees. Mr Coutinho did not, however, volunteer any more details from the bill. The Legislative Assembly rejected Mr Coutinho’s previous efforts in 2007 and 2009 to introduce a trade union law. Another effort launched by former Macau Civil Servants Association head Jorge Fão in 1992 was also rejected. “We have always strived for a trade union law in Macau and in the past we have given the nod to similar drafts, but unfortunately the law did not get enough votes from the assembly,” Ms Kwan recalled. Portuguese-language newspaper Tribuna de Macau broke the story of Mr Coutinho’s trade union legislation effort yesterday.
Certain businessmen use their advantageous position to abuse workers’ contracts José Pereira Coutinho, member of the Legislative Assembly
since 2002, which amounted to an average of 5,000 patacas (US$625) per staff per year. “Now we have only 300 workers trying to claim the back-pay, and 200 of them are still working at the club,” said Mr Chan. The staff also said they did not receive any end-year bonus in 2000 and 2001, contradicting the Labour Affairs Bureau’s press release. The club staff filed a complaint with the bureau over the alleged backpay as early as in 2006, and 560 of them tried to chase the issue again in March last year. “We have actually tried to forward the case to the Public Prosecutions Office before, as the workers claimed they suspected the company has forged their signatures,” said a spokeswoman from Labour Affairs Bureau. “But the Public Prosecutions Office replied saying they have not found any evidence of crime in the MJC case, and we informed the MJC staff of this.” Business Daily was unable to reach Macau Jockey Club yesterday for comment.
January 31, 2013 business daily | 3
MACAU
Consumers told to ignore cheaper grey market pork Companies controlling city’s meat monopoly say smuggled pork is being sold at most markets and some restaurants; forecasts more price rises Stephanie Lai
sw.lai@macaubusinessdaily.com
owners’ knowledge,” the spokesman said.
Price gap
Customs officers seized almost 46 tonnes of fresh pork at the border last year
M
eat suppliers and distributors have joined a retailers’ association in urging consumers to stop buying fresh pork being smuggled into Macau from the mainland, despite its lower cost. “As we have observed, about 200 butchered pigs are being smuggled across the border through various channels on a daily basis,” said Macau Fresh Meat Merchants Association president Che Su Peng.
In an open letter released yesterday, representatives from the meat industry also warned retailers against mixing cheaper frozen meat with fresh meat in wet markets. The association, the Iong Hap Tong in Cantonese, says smuggling of fresh pork across the border has risen in recent years. About 300 pig carcasses are legally imported by Macau everyday but the association suspects retailers are also using smuggled pork,
sometimes bringing it into the city themselves. “There are altogether 120 fresh pork stalls in the [wet markets] of Macau, eight to 10 of which we found selling parallel imported pork in the past two years,” said So Hoi Fai, a Iong Hap Tong director. Customs confiscated 45.7 tonnes of smuggled pork last year, about 2 tonnes more than the amount taken in 2011. “In the latter half of last year, we have confirmed that
at least 10 restaurants were using smuggled fresh meat,” a customs spokesperson said. Customs declined to name the restaurants. The Customs Service told Business Daily they recently caught one seller of fresh pork attempting to smuggle offal into the city at the Gongbei checkpoint. “Parallel import cases usually involve smugglers who are employed to carry the fresh meat directly to the restaurants, sometimes without the restaurant
One catty or about 600 grams of pork costs up to 40 patacas (US$5) in wet markets here but about 15 patacas for the equivalent weight in Zhuhai, Mr So said. Wholesale prices for pork have been hovering at about 15 patacas a catty here. Lo Pui Leong is the deputy general manager of China Products and Special Production Co, the sole authorised distributor of fresh meat in Macau. He admitted the gap in prices between the city and Zhuhai had fuelled parallel imports. The price of fresh pork and beef is set by the city’s two meat suppliers, state-owned Nam Kwong Commercial Co Ltd and Nam Yue Foodstuff and Aquatics Co Ltd, along with the distributor. Wholesale prices in the mainland and Hong Kong are used as a reference. Suppliers say retail prices will rise again after the Lunar New Year holidays, this time by up to 4 patacas, taking prices to about 44 patacas a catty. The wholesale price for pork has risen by 8.44 percent to 1,670 patacas for a 60-kg lot due to strong demand in the mainland and higher logistics costs caused by extreme weather.
Food supply from mainland safe Harsh weather is no obstacle for stable supply during busy New Year season Vítor Quintã
vitorquinta@macaubusinessdaily.com
A
n emergency plan for severe weather is in place to ensure Macau’s food supply remains stable even with increased demand, mainland Chinese authorities said. “The demand for agricultural products in Hong Kong and Macau will surge about 20 percent during Spring Festival,” said Jiang Fan, deputy directorgeneral of the Department of Foreign Trade in the
Ministry of Commerce. The Lunar New Year holidays begin on February 10 and continue until February 15. Supplies to the two regions “may face transportation challenges from bad weather. But it is no problem to ensure the supply as long as there is no extremely bad weather,” she said at a news briefing. Macau’s main supplier of meat, Nam Yue Food Stuff and Aquatics Co Ltd, warned
earlier this month that the price of fresh meat would rise during Lunar New Year. The hike is partially due to the effect of “harsher winter conditions like more rain and snow on logistics,” said the sole distributor China Product and Special Production Co. “Joint research showed that the [food products] demand in 2013 will be basically the same as that in 2012,” Ms Jiang said, quoted
Spring Festival means increased demand for food in the mainland
by China Daily. Commodity price hikes will probably affect the supply of agricultural products to the two regions, said You Anshan, head of the research centre of Hong Kong and Macau affairs under the Shanghai Academy of Social Sciences. “But mainland suppliers are still in advantageous
positions in prices and costs compared with suppliers in other regions,” he added, also quoted by China Daily. Last year the mainland sold agricultural products worth US$6.76 billion (54 billion patacas) to Hong Kong and Macau, according to China’s General Administration of Customs.
4 |
business daily January 31, 2013
macau Melco Crown refinancing ‘to free US$40 mln’ cash Melco Crown Entertainment Ltd’s just announced refinancing exercise could release up to US$40 million (320 million patacas) in free cash flow suggests a note from David Bain of independent brokerage Sterne Agee. MCE will issue US$1 billion in new three-year bonds and buy back some of its existing, higher interest debt. A term sheet referred to interest of 5.25 percent on the new bonds but MCE said yesterday the rate will actually be five percent. Mr Bain says “peer leading” quarter-on-quarter results in mass and VIP table games in the fourth quarter 2012 are likely to be catalysts for the casino operator’s stock.
Market predicts 18.7 pct slide Changing times at the top end in Wynn Resorts’ Q4 EPS But optimism remains on Wynn Macau future earnings potential Michael Grimes
michael.grimes@macaubusinessdaily.com
S
ome analysts have tempered their expectations for Wynn Resorts Ltd’s earnings per share performance in its fourth quarter results due on Thursday United States time (Friday Macau time). Market consensus is that the firm – parent of Macau casino developer and operator Wynn Macau Ltd – will deliver EPS of US$1.26 according to a Wynn Resorts earnings preview on Forbes.com. That would be a fall of 18.7 percent compared with the US$1.55 in EPS produced in the same quarter in 2011, and a slip of two cents on last month’s consensus estimate on Q4 EPS. For the fiscal year, a segment of analysts are projecting earnings of US$5.44 per share. Those research teams also expect fourth quarter revenue for Wynn Resorts to be US$1.27 billion, a fall of 5.5 percent compared to the US$1.34 billion achieved in Q4 2011. According to the Forbes.com preview however, the majority of analysts polled – 63.2 percent – still rate Wynn as a ‘buy’. They appear to be relaxed about the publicity and recent litigation – focusing on Macau operations – between the firm’s chairman and founder Steve Wynn and his former business partner Kazuo Okada. The parent firm has scheduled a shareholders’ meeting on February 22 to eject the Japanese billionaire from the board. Mr Okada has brought a lawsuit in Nevada specifically to try and stop that. In it he also called for an investigation into how Wynn Resorts acquired around half of the land for its 21-hectare (52-acre) Wynn Cotai site. Whether this will be anything more than an expensive sideshow (in terms of legal fees) remains to be seen. The Cotai project is however expected to be a key driver of earnings for Wynn Macau Ltd – and also the parent – from 2015-16 onwards.
Market share Wynn Macau – which currently operates one two-tower property, Wynn Macau, in the city’s traditional casino area on Macau peninsula – had a 10.7 percent share of Macau’s gross gaming revenue up to January 27, according to estimates from analysts at J.P. Morgan Securities (Asia Pacific) Ltd in Hong Kong and US-based brokerage Sterne Agee. That puts it in fifth place among the six operators. One of Wynn Resorts’ Las Vegas rivals, Las Vegas
Melco Crown and others challenging peninsula’s recruitment of high limit players
W
Shine coming off Wynn Resorts?
Sands Corp., has seen its Macau unit move into second place in the Macau revenue share rankings thanks to its Cotai presence. LVS opened its first Cotai property – The Venetian Macao – in August 2007. Sands China
10.7%
Wynn Macau estimated GGR share to Jan 27
Ltd has contested the second spot with Galaxy Entertainment Group Ltd since the latter opened the first phase of Galaxy Macau on Cotai in May 2011. LVS says market share is more meaningful when judged by EBITDA (earnings before interest, taxation, depreciation and amortisation) than the gross amount of bets handled, as companies have different scale, different levels of efficiency and different expenses. Mr Wynn likes to talk about “fair share”. He argues that even with a relatively modest inventory of tables and slots, his firm is efficient at delivering consistently high yields from them.
ynn Resorts Ltd chairman and founder Steve Wynn’s “fair share” proposition has been tested recently by supposedly more massmarket focused casinos encroaching on the natural recruiting grounds of the traditional junkets that Wynn Macau has served so assiduously for six years. Melco Crown Entertainment Ltd’s City of Dreams resort on Cotai is one of those aggressively courting China’s rising middle class before they get to the super rich stage and is diverting them onto cash-based premium mass tables with minimum bets of HK$2,000. If MCE can hold on to those players as they move up in life it will offer the firm a better margin than if they jumped the fence to credit-based junket play. Wynn Macau stated in its third quarter 2012 results it had 492 tables – 286 of them for VIPs –and 801 slot machines. J.P. Morgan said on Monday that Sands China Ltd currently has a total of 1,335 tables, although it’s getting 200 more from the government – some of them before Chinese New Year on February 10. A number of Asia-based analysts certainly remain bullish about the stock of Wynn Resorts’ Macau unit in terms of its current and future earnings potential. “Wynn Macau shares offer the most potential return followed by MGM China,” said Sean Monaghan of HSBC Ltd Singapore, in a note on Tuesday. For some investors however, the parent Wynn Resorts’ stock is already at something of a premium, having put on two percent in three months since October 31. Wynn Resorts shares did however close down 0.93 percent at US$122.39 at the close of Nasdaq trading on Tuesday U.S. time. M.G.
January 31, 2013 business daily | 5
MACAU
Bally to weather U.S. storms with strong fiscal quarter Casino equipment maker achieved 75 percent margins on systems management business, estimates analyst Michael Grimes
michael.grimes@macaubusinessdaily.com
B
ally Technologies Inc. – best known in Macau for building a strong market share in casino floor electronic management systems – reports its second quarter fiscal 2013 results today United States time, Friday Macau time. Union Gaming Research in Las Vegas says it expects Nevada-based Bally to report a “solid” quarter. It adds however there might be a “modest softness” in gaming operations, related to Hurricane Sandy. The firm generates much of its revenues from sales or revenue sharing deals on slot machines it supplies to U.S. casinos as well as from its casino management systems. It also ships popular slot machine titles to Macau, Singapore and other leading Asia Pacific markets. In late October a super storm battered the east coast of the U.S. – including the casino jurisdiction of Atlantic City in New Jersey. In November the city reported a 27.9 percent year-on-year fall in gross
gaming revenue – the biggest drop in 34 years of legalised casino gambling. Nonetheless Union Gaming expects Bally will generate US$78.8 million (630 million patacas) in revenue from sales of around 4,360 units in the quarter, at an estimated margin of 45 percent. “We are looking for BYI [Bally] to report F2Q13 EPS [earnings per share] of US$0.76, which is in line with [Wall] Street consensus,” states the research house. “In the systems segment, we are estimating revenue of US$56.0 million and margins of 75.3 percent. The systems business provides stability and visibility to the company’s revenue mix. Our systems revenue estimate is comprised of US$27 million from hardware and software sales and US$29 million in maintenance and service revenue,” adds the earnings preview. It’s the first earnings season for the company’s new chief executive Ramesh Srinivasan. The former boss
Seamless transition – Ramesh Srinivasan, CEO, Bally Technologies (Photo: Carmo Correia)
of Bally’s highly profitable systems business has been with the firm since 2005 and took up the CEO job in December last year. “We expect the leadership
transition to be relatively seamless and don’t expect a change in strategic direction. We maintain our ‘buy’ rating and our US$62 price target,” says Union Gaming.
6 |
business daily January 31, 2013
macau Cape Verde tax evasion deal in force Macau and Cape Verde will cooperate on fighting tax evasion, after a new agreement came into effect in November. The deal with the Portuguese-speaking African country was signed in 2010 but it was only published in yesterday’s Official Gazette. The agreement aims to prevent offshore tax avoidance and evasion by information and intelligence sharing. The treaty will provide authorities on both sides with access to information about the capital dispositions and incomes of citizens with tax arrears and could reveal assets and earnings not declared at home.
Asset sell-off generates results for power utility A return to higher profits for Companhia de Electricidade de Macau was driven by selling real-estate rather than electricity Tony Lai
tony.lai@macaubusinessdaily.com
A
n improved financial performance last year by the city’s electricity distributor, Companhia de Electricidade de Macau SA, was achieved by a once-off sale of real estate assets, the utility’s chairman Franklin Willemyns said yesterday. “In the previous two years, the profits of our company fell by about 15 percent but [in 2012] we expect this to be reversed,” Mr Willemyns told a press conference. Mr Willemyns would not confirm if electricity tariffs would change this year. “This will mainly depend on primary energy prices, which we cannot control. What I can say is that we are committed to maintaining [price] stability,” he said.
[Price rises] mainly depend on primary energy prices, which we cannot control Franklin Willemyns, chairman, Companhia de Electricidade de Macau
MOP500 mln
Estimated sales of electricity last year The utility divides its operations between concession-related and non-concession activities. Concessionrelated activities last year included electricity sales of about 500 million patacas (US$62.5 million). “In 2012, we had a special year in what we call non-concession activities, allowing us to have extraordinary profits,” he said. “These were mainly related to some properties that CEM sold during 2012.” Mr Willemyns did not give further details of the revenue generated from real estate sales, saying company results had not yet been audited or approved by management. But company sources told media that the results would show a profit of 547 million patacas, up by 14 percent from 2011. Mr Willemyns said 2012 was “a good year” but less profitable
than 2009. In 2010, the government capped the utility’s permitted rate of return at 9.5 percent, down from 12 percent. The company posted a net profit of 565.2 million patacas in 2009, with results sliding to 514.4 million patacas and 479.2 million patacas in the next two years.
Planned investment Mr Willemyns said the utility had invested 972 million patacas last year, the highest level in five years. Almost 60 percent was spent on improving the electricity transmission and distribution grid, including key projects such as the construction of two substations, one near the Lotus Bridge and another at the new University of Macau campus on Hengqin Island. The company plans to continue investing to tackle growing energy demand. Mr Willemyns said about 1 billion patacas would be invested this year, with 74 percent directed to improving transmission and distribution. The government has approved projects worth 710 million patacas. The company has planned a 900-million-pataca investment on four new substations over three years to serve the Light Rapid Transit system, which is scheduled to commence in 2015.
No confirmation on natural gas price The natural gas supply to Companhia de Electricidade de Macau S.A. (CEM) will finally be resumed this year but the chairman said the price has not yet been confirmed. Chairman Franklin Willemyns told the media in a luncheon yesterday: “In 2013 we hope to be able to have gas again but the price is still not defined.” He said the company has no timetable or details on the supply progress yet. The gas supply for the operator’s generation of electricity has been suspended since June 2011 due to works in Hengqin Island. But China’s National Energy Administration said on Tuesday that a new pipeline, designed to provide 520 million cubic meters of gas each year to Macau, would be completed by June this year. Before suspension, the city’s gas importer Sinosky Energy (Holdings) Co Ltd set the price at 2.7 patacas (US$0.34) per cubic metre.
The construction of a new substation in Ilha Verde to meet growing demand in the northern district of the peninsula will also start this year. Power consumption grew by 8.5 percent last year and the operator estimates consumption would increase by another 5.5 percent this year. “So far we have been able to cope with this demand but this requires a lot of investment,” Mr Willemyns said. Last year, imported electricity from the mainland accounted for 88.8 percent of the city’s power supply, with the remaining generated here from fuel oil.
January 31, 2013 business daily | 7
MACAU
Mainland stock market open to Macau citizens
Govt drops minimum wage for China housemaids
Macau residents living on the mainland could invest directly in A-shares
Mechanism for importation of mainland domestic helpers ready by June
Vítor Quintã
vitorquinta@macaubusinessdaily.com
H
undreds of housemaids set to be imported from mainland China within the first half of this year might not have a minimum wage after all. The salary of these domestic helpers will instead “be set by the market,” the Secretary for Economy and Finance Francis Tam Pak Yuen said on Tuesday. He stressed the wage gap between the mainland and Macau to justify the decision, Portuguese-language newspaper Ponto Final reported. Last March Mr Tam said about the monthly salary of Chinese housemaids: “Based on current standards, I think 3,000 patacas [US$375] is the minimum”. There is no formal minimum wage for domestic helpers here, around 97 percent of whom are non-residents. However, the Human Resources Office approves the hiring of nonresident domestic servants only if they are paid at least 2,500 patacas per month.
Easier access to Shanghai and Shenzhen stock exchanges mulled
C
hina’s securities regulatory body announced Tuesday that it is considering to allow Macau citizens to invest directly in the mainland’s stock market using renminbi. However, such investors should live and work in the Chinese mainland, added Tong Daochi, an official of the mainland’s securities regulatory commission. The measure would also allow citizens of Taiwan and Hong Kong to invest directly in the mainland’s A-share market – usually closed to foreigners – on the Shanghai and Shenzhen stock exchanges. Macau investors have been more willing to invest in red chip stocks – Chinese companies listed in Hong Kong – than in A-shares, trading behaviour expert William Cheung Ming Yan told Business Daily in July. In 2011, Macau residents invested 21 percent of their portfolio or 35.5 billion patacas (US$4.4 billion) in mainland securities, up by more than a third from the previous year, the Monetary Authority said in July. However, the Hong Kong securities – seen as “relatively safer,” said Mr Cheung, a University of Macau scholar – overtook mainland securities as preferred destination
for Macau investment, according to the 2011 Coordinated Portfolio Investment Survey. There is of yet no official data on Macau investors’ preferences last year. Mr Tong’s remarks, quoted by official news agency Xinhua, came in a press conference after the first-ever meeting of the cross-strait financial supervisory platform for securities and futures. Jointly held by Guo Shuqing, chairman of the mainland securities regulatory commission, and Taiwan’s top financial supervisor Chen Yuchang, the meeting discussed the opening of each side’s market. Huang Tien-mu, a senior official with Taiwan’s securities and futures regulatory body, said the qualification period for mainland financial institutions establishing offices in the island would be reduced. Instead of the current five years of engaging in international securities and futures experience, the qualification period will be adjusted to two years, he added. In addition, mainland investors’ business experiences in Macau and Hong Kong will also be considered as a qualification for carrying out business in Taiwan, Mr Huang said.
The gap has led to criticism from groups that protects the rights of outside domestic helpers, most of which come from the Philippines, Vietnam or Indonesia. The mechanism to import Chinese housemaids should be completed within the first half of this year, Mr Tam said on the sidelines of a meeting with Hu Chunhua, the new Communist Party Secretary for Guangdong. “We are looking into what is the necessary number of helpers. It is possible that the mainland China government at first is not available to make a lot of workers available,” he warned. The government has asked the Guangdong and Fujian provinces to detail how many helpers they are willing to send to the territory. At first this figure should be below the demand in Macau but it will allow employers to begin the hiring procedures with the Human Resources Office, Mr Tam said. V.Q.
8 |
business daily January 31, 2013
GREATER CHINA Chinese firm closes A123 deal China’s largest auto parts maker won U.S. government approval to buy A123 Systems Inc., a maker of electric car batteries, despite warnings by some lawmakers that the deal would transfer sensitive technology developed with U.S. government money. The sale of the lithium-ion battery maker to a U.S. unit of Wanxiang Group was approved by a U.S. government committee on foreign investment, according to a statement from the Chinese company. The companies later said the deal had been completed. Last month, Wanxiang’s U.S. unit agreed to pay US$257 million for A123’s automotive battery business and related assets in a bankruptcy auction, beating U.S. rival Johnson Controls Inc. of Milwaukee. “Wanxiang America looks forward to closing the transaction and to continuing to foster the technologies A123 has worked so hard to develop,” said Pin Ni, the president of Wanxiang America Corp, in a statement. Wanxiang tried to blunt criticism of the deal by excluding A123’s defence contracts from its bid at the auction. Those were sold separately to Illinois-based Navitas Systems for US$2.25 million.
Per capita rural net income stood at 7,917 yuan last year
Yuan breaks losing streak China’s currency strengthened for the first time in a week yesterday after the central bank set a stronger fixing, which allowed the spot rate to respond to robust corporate demand for yuan. The People’s Bank of China’s strong fixing of 6.2806 marked a return to its usual practice of setting a stronger midpoint in response to a fall in the dollar against other currencies overnight. The PBOC had surprised the market with a series of weak fixings in recent days, despite weakness in the dollar. That pulled the spot rate weaker, even as traders reported healthy client demand for yuan. But several traders had identified 6.2850 per dollar as a technical support level for the midpoint. When the fixing hit 6.2851 on Tuesday, several traders said that if it weakened further, that would indicate the PBOC’s intention to guide the yuan on an extended weakening path. Now, they say, the apparent rebound likely signals that authorities will allow the spot rate some space to appreciate over the next month, though they expect it will largely move sideways in the run-up to the Lunar New Year, which begins on February 9.
Smog prompts flight cancellations Beijing warned the city’s 20 million people to prepare for at least another day of smog, and officials closed some factories and ordered government cars off the road as pollution remained at hazardous levels. Visibility was reduced to a few hundred yards in downtown Beijing and an online merchant reported “overwhelming” interest in face masks yesterday. A U.S. Embassy pollution monitor showed that air quality reached hazardous levels for the 19th in 25 days. The smog has remained dense after hitting record levels on January 12 and Beijing officials have proposed new rules aimed at improving air quality. The concentration of PM2.5, the fine air particulates that pose the greatest human health risk, was 302 micrograms per cubic metre at 10am, according to the U.S. Embassy monitoring station. At least 23 flights were cancelled at Beijing Capital International Airport yesterday, the airport said on its website. “Low-visibility weather will continue to affect the airport” today, it said in a statement.
Five banks may soon win asset management approval C
hina’s securities regulator may soon grant five mid-sized Chinese lenders permission to launch fund management companies, in the latest push by regulators to cultivate a slate of integrated, globally competitive Chinese financial institutions. The Chinese Securities Regulatory Commission recently met with fundmanagement executives from the five banks to discuss the approval process and hear presentations about the firms’ plans, official media reported yesterday. The banks are Industrial Bank Co Ltd, Bank of Beijing Co Ltd, Bank of Shanghai Co Ltd, Bank of Ningbo Co Ltd, and Bank of Nanjing Co Ltd. The approval process was likely to achieve significant progress, the official China Securities Journal reported, citing unnamed sources. Eight large Chinese banks have
already established fund management ventures under an existing pilot project. Most are joint ventures with foreign investment banks, including ICBC Credit Suisse Asset Management Co, CCB Principal Asset Management, Bank of China Investment Management, and ABCCA Fund Management. Asset management companies linked to banks currently manage about 16 percent of the 2.87 trillion yuan (US$461 billion) in total net assets under management by China’s fund industry, according to estimates cited by the paper. But their market share is growing, thanks in part to their ability to leverage their existing branch
networks to market fund products. Assets under management at bankaffiliated fund companies grew 70 percent in 2012, compared to 30 percent growth for the industry as a whole, according to the estimate. Chinese regulators are encouraging banks to diversify their revenues away from reliance on net income, as China moves to liberalise interest rates. Under chairman Guo Shuqing, the regulatory commission has moved to develop China’s asset management industry with an eye to improving domestic capital allocation, offering Chinese investors a broader range of investment options, and building globally competitive financial institutions.
RMB2.87 trillion
Total net assets under management by China’s fund industry
A few banks have already established fund management ventures under an existing pilot project
Reuters
January 31, 2013 business daily | 9
GREATER CHINA
Rural-income gains aid economic shift More consumption would help reduce the economy’s reliance on exports
C
hinese incomes rose faster in the countryside than in cities for a third straight year in 2012 as migrant workers boosted their pay and the government strengthened the social safety net. Rural per-capita net income advanced 10.7 percent, compared with 9.6 percent for urban dwellers, partly on the rise in migrant labourers and their wages, the National Bureau of Statistics said. Rural residents’ income from benefits payments rose 21.9 percent, almost double the urban pace, as the government boosted its budget for health-care handouts. Rural spending power has been lifted by wages earned by peasants working in cities, underscoring the broader benefits of the urbanisation drive championed by incoming Premier Li Keqiang. Spreading gains in consumption would help sustain a growth rebound and reduce the economy’s reliance on exports, which rose last year at less than half 2011’s pace. “Rising rural incomes should definitely help boost consumption and aid rebalancing,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong. “Growth
will gear down a bit as rising labour costs diminish investment incentives, but such consumption-led expansion will be more sustainable.” The trend may persist for a while as a declining working-age population helps push up migrant labourers’ pay and the government keeps improving social safety-net funds including for health care in the countryside, said Mr Zhang, who previously worked for the International Monetary Fund.
Retail sales Rural per-capita net income, which includes migrant workers’ pay, rose more than that of urban residents in 2010 for the first time since 1997. Retail sales in rural regions rose 14.5 percent last year, exceeding the gain in urban areas, which increased 14.3 percent, for the first time in three years. That compares with 17.2 percent growth for urban consumption in 2011 and a 16.7 percent advance for rural dwellers. Rural spending, at 2.78 trillion yuan (US$447 billion) last year, was still less than one-fifth of what urban households spent. Urbanites account for about 52.6 percent of China’s
population of 1.35 billion, according to the statistics bureau. The central government’s transferpayment budget for rural health-care coverage in 2012 increased 36 percent to 106.3 billion yuan, according to the Ministry of Finance. “Income and wealth reallocation favouring rural households should definitely help boost consumption, as the lower-income households normally have higher propensity to consume,” said Ren Xianfang, a Beijing-based analyst with researcher IHS Inc. “This should help rebalancing.” Even with the gains, per capita rural net income last year was 7,917 yuan, less than a third of per capita urban disposable income of 24,565 yuan, statistics bureau data showed. Ma Jiantang, head of the agency, said on January 18 that China must on one hand, “make the cake bigger, and on the other hand, we must do a better job in sharing the cake”. Strengthening consumption’s role in boosting economic growth is one of the major tasks this year, the government said after the annual central economic work conference in December. The situation highlights the urgency of measures such as overhauling a household-registration system that keeps 642 million rural dwellers from permanently joining the urban workforce, limiting their ability to contribute to the economy. The State Council, or cabinet, said in February 2012 it will implement a policy of helping people register as urban residents in small and medium-sized cities and small townships and ensure equal benefits for countryside residents who have an urban registration.
Growth will gear down a bit as rising labour costs diminish investment incentives, but such consumption-led expansion will be more sustainable Zhang Zhiwei, Nomura Holdings Inc.
Income and wealth reallocation favouring rural households should definitely help boost consumption, as the lower-income households normally have higher propensity to consume Ren Xianfang, IHS Inc.
Bloomberg News
Infiniti seeks to boost Chinese sales
Infiniti plans to produce vehicles in China in 2014
N
issan Motor Co.’s head of Infiniti distanced the luxury brand’s ties to its Japanese parent as the unit seeks to gain market share in China, where a territorial dispute triggered a wave of anti-Japan protests last year. “Infiniti is an Asian brand and doesn’t belong to any nationality,” Johan de Nysschen, president for the marque, told reporters in Beijing yesterday in response to a question about the impact of anti-Japanese sentiment in China. Infiniti is “quite separate and distinct from the parent company. We are an Asian premium brand,” he said. The luxury is confident of increasing sales this year by at least 10 percent and plans to add 20 dealerships in 2013 to the 60
in operation as of the end of last year, he said. The comments reflect Japanese automakers’ lingering sensitivity over consumer sentiment in China, four months after demonstrations broke out over a territorial dispute involving a group of uninhabited islands in the East China Sea. Infiniti delayed introducing some models and cut back on marketing and promotion in the country after tensions escalated, he said. The automaker also decided to “ride the storm” and refrained from following German luxury auto brands in cutting prices, which hurt sales, he said. Infiniti had the highest inventory levels among major auto brands in China as of last month, with stockpiles at showrooms reaching 4.42 months worth of sales last month, according to China Automobile Dealers Association. “We can’t be a global player unless we become a strong player in China,” said Mr de Nysschen, a former Audi executive hired by chief executive Carlos Ghosn to revamp Nissan’s upscale brand. “China is our No. 1 strategic priority. We’re approaching this market with longterm perspective.” Nissan moved Infiniti’s global headquarters to Hong Kong last May and plans to produce vehicles in China in 2014. Reuters
Macau at your breakfast table. With Business Daily. Find us in the following newsstands Pacapio at San Ma Lo Opposite HKSB (Nam Van) Beside Luso Bank Building Wen Hang Bank at San Ma Lo In front of Portuguese Bookshop In front CTM at San Ma Lo In front Daiso shop at San Ma Lo Next to S. Lourenço Market Next to Human Resources Dpt Next BNU at Av. Sidonio Pais San Miu, Av. Horta e Costa Next to Metro Park Hotel
10 |
business daily January 31, 2013
ASIA Canon sees 2013 profit boost Canon Inc. expects a 26.6 percent rise in operating profit this year as it cuts costs and gets a boost to revenues from a weakening yen, although the rise fell short of analysts’ expectations. Canon’s operating profit for the three months ended on December 31 fell 17.9 percent to 77.7 billion yen (US$857.1 million). The company, which derives 80 percent of its revenue from overseas, was badly hit by the firmness of the Japanese currency last year. The company forecast a full-year operating profit of 410 billion yen for the current year to December.
Australian PM surprises with Sept election call Gillard signals cuts to tax benefits for wealthy
A
ustralian Prime Minister Julia Gillard set national elections for September 14, stunning voters yesterday with eight months notice of the vote in a bold move designed to end political uncertainty surrounding her struggling minority government. The election date means Ms Gillard’s government will serve a full three-year term, although analysts said the early notice meant she had started an eight-month campaign and lost her ability catch opposition leader Tony Abbott by surprise with a snap early poll. “She’s going for the strategy than an incumbent can wear out a fragile, or potentially fragile, opponent with a long campaign. The idea is for them to punch themselves out,” analyst Paul Williams from Griffith University told Reuters. “In this case, Tony Abbott and the opposition are so well entrenched it will backfire.” Opinion polls show Mr Abbott’s opposition Liberal-National party is well ahead of the government and Ms Gillard would be swept from office, losing up to 18 seats, if an election were held now. The government could lose power if it loses just one seat. The election will decide whether Australia keeps its controversial
carbon tax, and a 30 percent tax on coal and iron ore mining profits, which Mr Abbott has promised to scrap it if he wins power. But apart from these two policy differences, the government and opposition differ little on domestic issues, and both firmly support greater involvement with China, the country’s biggest trade partner, and close defence ties with the United States.
KEY POINTS Australian PM names September 14 election date Gillard kick starts eight month election campaign Signals cuts to tax breaks and welfare for the higher paid Business says election date has no impact on risk
The financial markets were unmoved by the announcement. The Australian dollar remained firm, hitting its highest level against the Japanese yen in over four years. The share market reached a fresh 21-month high and government bonds were steady. Mr Abbott said he was ready to fight the election, adding it would be decided on Ms Gillard’s credibility. “This election will be about trust,” he said, hinting he will focus on Ms Gillard’s broken promise not to introduce a carbon tax and failure to deliver a promised budget surplus this year. The opposition leader has successfully eroded government support through his constant negative attacks, but has yet to make any detailed policy announcements. He will make his first major 2013 speech today.
Little impact Business said it welcomed the early announcement of the election date, but said it would not have much of an impact on certainty given the date fell within the normal election timing. “Its real value is the knowledge that the last quarter of the year will be uninterrupted by an election,” said
Australian Chamber of Commerce and Industry chief executive Peter Anderson. Ms Gillard currently governs with support from a group of independents and the Greens, who all support the September 14 election. That means she has locked in majority support until the election, although a sudden by-election could still change the balance if a lawmaker dies. Under Australian laws, governments serve for up to three years and the prime minister decides the election date. Gillard said she wanted to end political uncertainty by setting a date. “It is not right for Australians to be forced into a guessing game, and it’s not right for Australians to not face this year with certainty and stability,” she said in a speech to the National Press club. Her speech laid the groundwork for an election year battle focused on the economy, arguing that a strong economy is necessary to ensure fairness in education and disability services – two key policies aimed at Labor heartland voters. The prime minister said the governor-general would dissolve the current parliament on August 12, giving the government two more sessions of parliament to pass laws and deliver its May budget. Ms Gillard also signalled cuts to tax breaks and welfare for the higher paid as her Labor government seeks to boost education and disability spending. “We will announce substantial new structural savings that will maintain the sustainability of the budget and make room for key Labor priorities,” Ms Gillard said in yesterday’s speech. “Our record of cutting wasteful programmes, in line
Abe shrugs off criticism over stimulus steps Fiscal, monetary steps aimed at beating deflation, Japan’s prime minister says
J The measures taken by the government and the BOJ are aimed at beating deflation and achieving sustainable economic growth Shinzo Abe, Japanese Prime Minister
apanese Prime Minister Shinzo Abe waded into the growing global debate about currency wars for the first time yesterday, shrugging off criticism that Tokyo was trying to intentionally weaken the yen with its monetary and fiscal stimulus measures. “The measures taken by the government and the BOJ are aimed at beating deflation and achieving sustainable economic growth,” Mr Abe said, when asked by an opposition party leader in parliament about criticism from some overseas policymakers that the steps were attempts by Tokyo to directly weaken the yen. It was his first public comment on the issue. German Chancellor Angela Merkel last week singled out Japan as a source of concern following recent moves by its central bank to quicken the pace of money-printing. South Korea has also been vocal
in recent days, with the governor of the central bank saying on Saturday that Japan’s latest monetary easing had “created problems”. South Korea’s deputy finance minister warned yesterday the government would consider new measures to tighten capital flow controls and curb speculation in foreign exchange markets, as economists fear the yen’s recent sharp slide against the won will make Seoul’s exports less competitive. Talk about a currency war dominated discussions at the World Economic Forum in Davos last week, with many central bankers and business executives questioning the wisdom of continuing easy money policy. Central bankers in advanced countries, notably Japan and the United States, have been pursuing aggressive action to reflate their economies. This has had the effect of
January 31, 2013 business daily | 11
ASIA LG Electronics reports wider loss LG Electronics Inc. unexpectedly reported a wider fourth-quarter loss because of European Union price-fixing fines, slumping demand and a stronger won. The company recorded a 468 billion-won (US$432 million) net loss, Seoul-based LG said in a statement yesterday. That compares with a 112 billion-won loss a year earlier. The company suffered as the nation’s stronger currency hampered efforts to compete against Japanese suppliers in the slowing global TV market. LG was also fined 491.6 million euros (US$660 million) by EU antitrust regulators in December after an industrywide probe of cathode-ray tube sales.
S. Korea posts record surplus in 2012
S
Ms Gillard said the move allowed for a ‘reasoned’ campaign
outh Korea’s current account surplus rose to a record US$43.2 billion in 2012 on growing overseas construction orders and exports that remained relatively solid despite a global slowdown. The surplus, the broadest measure of the country’s trade with the rest of the world and including investment returns, smashed a previous record of US$32.7 set in 2009, the Bank of Korea said yesterday. However, it predicted the annual surplus would fall to US$32 billion in 2013, citing lingering weakness in the euro zone and a slow recovery in the United States. Exports stood at US$552.7 billion, up 0.2 percent from 2011, while imports fell 1.1 percent to US$514.2 billion. Overseas shipments of cars rose 3.6 percent to US$42.4 billion despite sagging global demand, and shipments of petrochemical products climbed 9.0 percent to US$56.7 billion. Shipments of technology products remained nearly unchanged at US$156 billion, with overseas sales of memory chips up 0.1 percent and display panels down 0.3 percent from a year earlier. Sales to the South’s top export market of China remained flat, while exports to the United States and the Middle East rose 4.1 percent and 11.4 percent respectively. However, exports to recession-hit Europe fell 11.4 percent. The services account reported the first surplus since 1998 of US$2.7 billion, thanks to a record US$16.8
billion surplus in construction services boosted by a series of orders won in regions including the Middle East. The country’s industrial production posted its fourth consecutive monthly rise in December, while slowing sharply from the previous month, separate government data showed yesterday. Production in the mining, manufacturing, gas and electricity industries rose a seasonally adjusted 1.0 percent from a month earlier, weaker than a revised 2.6 percent gain in November, according to Statistics Korea. From a year earlier, the December reading was up 0.8 percent, compared to a revised 3.2 percent rise the previous month. The four months of expansion came after Asia’s fourth largest economy logged three consecutive months of declines in factory output from June to August. AFP
US$43.2 billion
with our Labor values and purpose, is already strong.” Ms Gillard’s minority government is backing away from a pledge to deliver a budget surplus this fiscal year as weaker growth and a strong local currency curb tax receipts.
It needs to find revenue or savings to fund its policy commitments to revamp funding for education, expected to cost about A$5 billion (US$5.23 billion) a year, and boost disability welfare.
weakening their currencies, prompting investors to move a wall of cash into more attractive markets such as South Korea and forcing their currencies higher, making their financial markets more volatile and potentially jeopardising export growth that governments are counting on to fuel economic recoveries. Mr Abe also kept up pressure on Bank of Japan to expand monetary stimulus, calling for bold measures to achieve its new 2 percent inflation target. “I strongly hope that the Bank of Japan pursues bold monetary easing to achieve [2 percent inflation] as soon as possible,” he told parliament. When asked later by another opposition lawmaker about the need to revise the law which guarantees the central bank’s independence from the government, Abe said: “I still consider revising the BOJ law as a future option.” The prime minister also said he would choose someone who shares his view on monetary policy and tackles deflation with strong determination as a successor to BOJ Governor Masaaki Shirakawa, whose term expires in April.
Japanese firms ‘changed’ 787 battery
Reuters
Reuters
South Korea’s current account surplus
ANA, JAL confirm to have changed batteries ‘on a few occasions’
J
apan’s two biggest airlines replaced below-par lithium-ion batteries on their Boeing Co 787 Dreamliners in the months before separate incidents led to the technologically advanced aircraft being grounded worldwide due to battery problems. Comments from both All Nippon Airways, the new Boeing jetliner’s biggest customer to date, and Japan Airlines Co Ltd point to reliability issues with the batteries long before a battery caught fire on a JAL 787 at Boston’s airport and a second battery was badly charred and melted on an ANA domestic flight that was forced into an emergency landing. ANA said it changed 10 batteries on its 787s last year, but did not inform accident investigators in the United States because the incidents, including five batteries that had unusually low charges, did not compromise the plane’s safety, spokesman Ryosei Nomura said yesterday. JAL also replaced batteries
on the 787 “on a few occasions”, said spokeswoman Sze Hunn Yap, declining to be more specific on when units were replaced or whether these were reported to authorities. ANA did, however, inform Boeing of the faults that began in May, and returned the batteries to their manufacturer, GS Yuasa Corp. A spokesman for the battery maker declined to comment. Shares of the company fell 1.2 percent yesterday. Boeing spokesman Marc Birtel said the airplane maker could not comment as the U.S. National Transportation Safety Board (NTSB) has indicated this is now part of their investigation. The New York Times earlier quoted an NTSB spokeswoman as saying the agency would include ANA replaced 10 Dreamliner batteries before emergency landing
these “numerous issues” with the 787 battery in its investigations. Under aviation inspection rules, airlines are required to perform detailed battery inspections once every two years. Officials are carrying out detailed tests on the batteries, chargers and monitoring units in Japan and the United States, but have so far made little headway in finding out what caused the battery failures. Japan’s transport ministry said the manufacturing process at the company which makes the 787 battery’s monitoring unit did not appear to be linked to the problem on the ANA Dreamliner that made the emergency landing. Reuters
12 |
business daily January 31, 2013
MARKETS Hang SENG INDEX PRICE
DAY %
VOLUME
PRICE
DAY %
Volume
AIA GROUP LTD
30.9
0.9803922
29816963
CHINA UNICOM HON
12.26
0.9884679
46871589
ALUMINUM CORP-H
3.76
0.2666667
29224856
CITIC PACIFIC
12.84
2.555911
9318724
SANDS CHINA LTD
BANK OF CHINA-H
3.81
0.5277045
364467254
CLP HLDGS LTD
66.05
0.2276176
3778845
BANK OF COMMUN-H
6.54
0.6153846
40474694
16.4
1.863354
88388016
BANK EAST ASIA
31.95
0.1567398
2126755
COSCO PAC LTD
12.28
1.655629
6672467
SWIRE PACIFIC-A
BELLE INTERNATIO
17.78
2.419355
17201316
ESPRIT HLDGS
10.88
0
9230329
TENCENT HOLDINGS
26.7
-0.1869159
12304585
HANG LUNG PROPER
29.55
0.5102041
7105485
TINGYI HLDG CO
HANG SENG BK
126.6
0.5559968
2309893
WANT WANT CHINA
HENDERSON LAND D
57.35
-1.12069
4905831
WHARF HLDG
77.5
-0.1931745
5249475
NAME
BOC HONG KONG HO CATHAY PAC AIR
15.12
-3.694268
11992590
CHEUNG KONG
128.5
0.2340094
3613330
8.75
0.922722
33257751
CHINA COAL ENE-H CHINA CONST BA-H
6.68
0.4511278
305790640
CHINA LIFE INS-H
26.05
1.165049
34806657
CHINA MERCHANT
27.45
2.234637
4108332
NAME
CNOOC LTD
HENGAN INTL HONG KG CHINA GS
22.1
0.6833713
7061837
HONG KONG EXCHNG
148.1
1.023192
4459793
HSBC HLDGS PLC
88.05
0.9169054
26107365
87.05
0.05747126
6479338
5.85
0.5154639
346410270
CHINA MOBILE
85.7
0.645919
21668020
HUTCHISON WHAMPO
CHINA OVERSEAS
24.6
0.8196721
26733745
IND & COMM BK-H
CHINA PETROLEU-H
9.42
0.1062699
83841734
LI & FUNG LTD
11.32
-1.393728
61846507
1.107595
3296465
NAME
PRICE
DAY %
66.75
-0.2242152
3198263
39
2.228047
12439363
SINO LAND CO
14.88
-0.2680965
12324508
SUN HUNG KAI PRO
128.1
-0.3888025
5095491
99.7
0.8598887
2495296
270.8
1.347305
3222080
22.3
2.059497
7187434
10.34
-1.147228
22323539
69.8
1.453488
6383959
POWER ASSETS HOL
MOVERS
38
8
Volume
4 23910
INDEX 23822.06 HIGH
23905.2
LOW
23621.95
CHINA RES ENTERP
27.5
0.5484461
2650582
MTR CORP
31.95
CHINA RES LAND
24.2
2.109705
9902030
NEW WORLD DEV
14.48
-1.092896
25694355
CHINA RES POWER
21.45
2.631579
5954537
PETROCHINA CO-H
11.14
0.5415162
102150324
CHINA SHENHUA-H
33.5
1.823708
20074866
PING AN INSURA-H
69.95
1.597676
13701963
PRICE
DAY %
Volume
31.05
1.636661
11366211
YANZHOU COAL-H
52W (H) 23916.16016 23620
(L) 18056.4 28-January
30-January
Hang SENG CHINA ENTErPRISE INDEX NAME
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
4.2
0.9615385
123790183
AIR CHINA LTD-H
6.66
-1.47929
22521800
CHINA PETROLEU-H
9.42
0.1062699
83841734
ZIJIN MINING-H
ALUMINUM CORP-H
3.76
0.2666667
29224856
CHINA RAIL CN-H
8.44
3.940887
18460300
ANHUI CONCH-H
30.75
1.151316
11505149
CHINA RAIL GR-H
4.48
2.988506
26532400
BANK OF CHINA-H
3.81
0.5277045
364467254
CHINA SHENHUA-H
33.5
1.823708
20074866
CHINA TELECOM-H
CHINA PACIFIC-H
6.54
0.6153846
40474694
4.22
0.9569378
66186403
26.05
0
2164600
DONGFENG MOTOR-H
12.78
-0.15625
14467081
CHINA CITIC BK-H
5.41
1.121495
44022832
GUANGZHOU AUTO-H
6.71
-0.8862629
9070636
CHINA COAL ENE-H
8.75
0.922722
33257751
HUANENG POWER-H
7.82
3.713528
44348311
CHINA COM CONS-H
7.87
-0.6313131
25776464
IND & COMM BK-H
5.85
0.5154639
346410270
CHINA CONST BA-H
6.68
0.4511278
305790640
JIANGXI COPPER-H
20.95
0.9638554
9214188
CHINA COSCO HO-H
4.11
-1.438849
21292096
PETROCHINA CO-H
11.14
0.5415162
102150324
BANK OF COMMUN-H BYD CO LTD-H
26.05
1.165049
34806657
PICC PROPERTY &
11.82
1.19863
13617244
CHINA LONGYUAN-H
6.55
4.133545
30113090
PING AN INSURA-H
69.95
1.597676
13701963
CHINA MERCH BK-H
18.62
1.195652
18920617
SHANDONG WEIG-H
7.62
-0.78125
38293301
CHINA LIFE INS-H
CHINA MINSHENG-H
11.3
-1.050788
39958104
SINOPHARM-H
24.2
0
10086310
CHINA NATL BDG-H
12.36
0.9803922
39741300
TSINGTAO BREW-H
45.1
-0.5512679
1538706
17.5
2.339181
11342408
WEICHAI POWER-H
32.7
2.028081
3623655
CHINA OILFIELD-H
NAME
PRICE
DAY %
Volume
13.36
0.4511278
14100392
2.99
-0.3333333
38149211
ZOOMLION HEAVY-H
10.42
-0.3824092
15175190
ZTE CORP-H
14.82
1.646091
5960512
MOVERS
29
10
1 12225
INDEX 12172.24 HIGH
12221.72
LOW
12001.87
52W (H) 12244.15 12000
(L) 8987.76 28-January
30-January
Shanghai Shenzhen CSI 300 NAME
NAME
PRICE
DAY %
Volume
7.28
-0.6821282
29908289
QINGDAO HAIER-A
8.5
2.781137
62463322
CITIC SECURITI-A
15.24
1.871658
175200393
CSR CORP LTD -A
4.89
0.204918
7.21
-0.8253095
4.18
PRICE
DAY %
VOLUME
AGRICULTURAL-A
3.01
3.436426
558564709
AIR CHINA LTD-A
6.02
0.3333333
17247880
CHONGQING CHAN-A
ALUMINUM CORP-A
5.14
-1.532567
35577857
20.47
-0.3892944
23961413
ANHUI CONCH-A
CHINA YANGTZE-A
NAME
PRICE
DAY %
Volume
14.15
0
8870171
QINGHAI SALT-A
26.7
0.4514673
6585138
SAIC MOTOR-A
17.15
-1.32336
30971397
37248282
SANY HEAVY INDUS
11.31
-0.5277045
44273125
28472842
SHANDONG DONG-A
47.65
0.5274262
5628165
-0.2386635
16177349
SHANDONG GOLD-MI
36.98
-1.648936
15319386
AVIC AIRCRAFT-A
12.18
1.415487
100411105
DAQIN RAILWAY -A
BANK OF BEIJIN-A
10.14
-1.648885
71154980
DATANG INTL PO-A
BANK OF CHINA-A
3.11
2.640264
190344670
EVERBRIG SEC -A
15.1
-1.048493
20134622
SHANG PHARM -A
11.89
-1.81668
15637985
BANK OF COMMUN-A
5.29
0.9541985
139976639
GD POWER DEVEL-A
2.71
-0.7326007
92987577
SHANG PUDONG-A
11.24
-0.5309735
172171454
12.29
-1.205788
27375302
GEMDALE CORP-A
7.84
9.803922
221742702
SHANGHAI ELECT-A
4.24
3.163017
16734226
15.41
-0.9640103
110028718
SHANXI LU'AN -A
22.56
0
14933821
14.15
0.4971591
22695507
BANK OF NINGBO-A BAOSHAN IRON & S
5.03
0.3992016
29245340
GF SECURITIES-A
BBMG CORPORATI-A
8.1
2.272727
28778574
GREE ELECTRIC
29.37
-0.1020408
12496448
SHANXI XISHAN-A
22.79
1.243892
5226051
GUANGHUI ENERG-A
17.67
0.1133144
24867895
SHENZEN OVERSE-A
7.01
1.741655
79637381
CHINA CITIC BK-A
5.04
-0.7874016
30426793
HAITONG SECURI-A
11.84
0.254022
130582375
SUNING APPLIAN-A
7.27
0.137741
51765562
CHINA CNR CORP-A
4.64
0.6507592
29884854
HANGZHOU HIKVI-A
31.29
1.262136
8572232
TSINGTAO BREW-A
32.47
1.46875
3990775
CHINA COAL ENE-A
8.01
0.2503129
14617937
HENAN SHUAN-A
67.3
-1.174743
2113774
WEICHAI POWER-A
24.7
2.489627
13073841
BYD CO LTD -A
CHINA CONST BA-A
4.9
2.51046
140615001
HONG YUAN SEC-A
20.72
0.9746589
29534240
WULIANGYE YIBIN
25.8
2.178218
70134653
CHINA COSCO HO-A
4.31
-0.4618938
35061946
HUATAI SECURIT-A
10.48
2.946955
92615360
YANGQUAN COAL -A
15.27
-0.908501
19155422
CHINA CSSC HOL-A
23.59
0.297619
11169523
HUAXIA BANK CO
11.54
-1.02916
48773601
YANTAI WANHUA-A
16.55
2.223595
17021393
CHINA EAST AIR-A
3.65
1.108033
19940135
IND & COMM BK-A
4.39
2.331002
225518857
YANZHOU COAL-A
18.27
0.2194185
6340728
CHINA EVERBRIG-A
3.46
-0.8595989
295539744
INDUSTRIAL BAN-A
19.9
-0.8470354
113941129
YUNNAN BAIYAO-A
76.1
-0.4708344
2703877
CHINA INTL MAR-A
14.23
0.4943503
11488768
INNER MONG BAO-A
35.14
-2.713178
54942525
ZHONGJIN GOLD
16.09
-1.288344
23811752
CHINA LIFE INS-A
20.38
2.104208
33378750
INNER MONG YIL-A
25.89
-1.521491
9967597
ZIJIN MINING-A
3.81
-0.2617801
56301703
127814353
INNER MONGOLIA-A
5.25
-2.234637
68395734
ZOOMLION HEAVY-A
9.17
-0.7575758
66373036
32.69
-1.536145
7089467
11
1.851852
18581802
-0.8069446
8604401
CHINA MERCH BK-A
14.38
-1.506849
CHINA MERCHANT-A
12.77
3.821138
113813426
JIANGSU HENGRU-A
CHINA MERCHANT-A
30.39
3.191851
20805107
JIANGSU YANGHE-A
81.13
CHINA MINSHENG-A
10.36
0.9746589
241639786
JIANGXI COPPER-A
25.31
3.011803
39962110
CHINA NATIONAL-A
7.54
0.5333333
34277661
JINDUICHENG -A
12.66
-1.860465
16686114
JIZHONG ENERGY-A
16.85
0.5970149
19947429 25798764
CHINA OILFIELD-A
17.52
-0.5110733
8794490
CHINA PACIFIC-A
21.52
1.12782
55355288
KANGMEI PHARMA-A
15.2
-0.9126467
7.11
1.716738
71111840
KWEICHOW MOUTA-A
180.12
1.100135
7137678
30.95
1.608667
19127304
CHINA PETROLEU-A CHINA RAILWAY-A
5.85
0.6884682
27612633
LUZHOU LAOJIAO-A
CHINA RAILWAY-A
3.17
0.6349206
32501011
METALLURGICAL-A
2.22
0.9090909
63362127
2.61
0.7722008
ZTE CORP-A
MOVERS 169
10 2695
INDEX 2688.711
CHINA SHENHUA-A
24.28
0.6633499
24212867
NINGBO PORT CO-A
39873817
HIGH
2689.31
CHINA SHIPBUIL-A
4.98
-0.7968127
48297344
PANGANG GROUP -A
3.98
-0.5
53431962
LOW
2577.27
CHINA SOUTHERN-A
4.13
0.9779951
35525523
PETROCHINA CO-A
9.35
3.0871
98016015
CHINA STATE -A
3.72
-0.2680965
138981381
PING AN BANK-A
21.33
-0.2338634
58362498
CHINA UNITED-A
3.55
1.428571
153576926
PING AN INSURA-A
47.58
1.840753
55516988
12.67
3.767404
127081229
POLY REAL ESTA-A
14.09
2.997076
102593144
PRICE DAY %
Volume
PRICE DAY %
Volume
CHINA VANKE CO-A
121
52W (H) 2717.825 (L) 2102.135
2575
28-January
30-January
FTSE TAIWAN 50 INDEX NAME ACER INC
NAME
25.85
0.5836576
56557578
FORMOSA PLASTIC
24.6
-1.204819
18579261
37
0.6802721
ASUSTEK COMPUTER
335.5
AU OPTRONICS COR
11.9
NAME
1.265823
4805485
FOXCONN TECHNOLO
86.9 -0.9122007
10959929
TPK HOLDING CO L
5875591
FUBON FINANCIAL
37.2
0.9497965
28661303
TSMC
-1.323529
2240444
HON HAI PRECISIO
84.9
0
21736354
UNI-PRESIDENT
-2.459016
83448742
HOTAI MOTOR CO
236
0.6396588
319807
131.5
-1.12782
7153938
HTC CORP
290
1.933216
24885308
CATHAY FINANCIAL
32.5
0
27052000
HUA NAN FINANCIA
16.85
0
CHANG HWA BANK
16.1
0.625
10971419
LARGAN PRECISION
782
CHENG SHIN RUBBE
77.5
0
7123497
LITE-ON TECHNOLO
15.35 -0.9677419
ADVANCED SEMICON ASIA CEMENT CORP
CATCHER TECH
CHIMEI INNOLUX C
80
Volume
106.5 -0.9302326
3907862
507 -0.3929273 101.5
27962623
51.7 -0.9578544
11802922 40018292
34.7 -0.5730659
15479492
7034853
YUANTA FINANCIAL
15.9
3.921569
71635869
-1.882058
2697936
YULON MOTOR CO
54.9
1.104972
6692986
40.45 -0.1234568
3290671
165267179
MEDIATEK INC
325
0
7977629
3.072983
149878288
MEGA FINANCIAL H
23.7
0.2114165
23697912
CHINA STEEL CORP
27.6
0.3636364
10737849
NAN YA PLASTICS
59.4
1.365188
5735541
CHINATRUST FINAN
16.8
0.2985075
55436197
PRESIDENT CHAIN
162
0.621118
796533
CHUNGHWA TELECOM
93.8 -0.7407407
8195063
QUANTA COMPUTER
67.4
1.049475
12340677
COMPAL ELECTRON
21.5 -0.6928406
33110998
SILICONWARE PREC
31.25
0
6791150
106.5
0
2915399
SINOPAC FINANCIA
12.85
0
39129944
FAR EASTERN NEW
34.1
0.4418262
7003680
SYNNEX TECH INTL
61
0.660066
5463403
FAR EASTONE TELE
73.9
0.6811989
3460976
TAIWAN CEMENT
39.8
0.5050505
8017680
FIRST FINANCIAL
17.9
0
13029105
16.45
0.304878
7179496
FORMOSA CHEM & F
79.7
1.658163
5616598
TAIWAN FERTILIZE
72.5 -0.6849315
2833285
FORMOSA PETROCHE
83.7
0.239521
2489147
TAIWAN GLASS IND
29
0.1727116
955403
UNITED MICROELEC
3740033
0.4950495
WISTRON CORP
8.05
TAIWAN COOPERATI
PRICE DAY %
0.8658009
CHINA DEVELOPMEN
DELTA ELECT INC
TAIWAN MOBILE CO
MOVERS
11.65
26
15
9 5490
INDEX 5474.03 HIGH
5486.91
LOW
5370.99
52W (H) 5621.53 5365
(L) 4719.96 28-January
30-January
January 31, 2013 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 52.9
35.0 34.8
18.60 18.35
52.6
34.6
18.10 52.3
34.4
Max 35
Average 34.756
Max 39.1
Average 38.793
Min 34.3
34.2
Last 34.95
Min 37.8
Max 52.85
Average 52.141
PRICE
Max 18.42
Average 18.252
Min 17.86
Last 18.42
39.4
21.4
22.0
38.8
21.2
21.8
38.2
21.0
21.6
Max 21.4
Average 21.260
DAY %
YTD %
(H) 52W
(L) 52W
97.59
0.020498104
5.765687656
108.9899979
80.48000336
BRENT CRUDE FUTR Mar13
114.35
-0.008744316
4.058604059
118.7999954
90.58999634
GASOLINE RBOB FUT Feb13
297.05
-0.097531445
7.560560524
297.6099968
220.3500032
GAS OIL FUT (ICE) Mar13
978.25
0.17921147
5.842575061
1026.25
800.5
3.299
1.258440761
-1.961367013
4.049000263
3.052000046
NATURAL GAS FUTR Mar13
311.86
0.302328573
2.862984611
333.4599972
255.6599855
Gold Spot $/Oz
HEATING OIL FUTR Feb13
1666.88
0.3752
0.1454
1796.08
1527.21
Silver Spot $/Oz
31.4162
1.2975
4.3381
37.4775
26.1513
Platinum Spot $/Oz
1687.35
1.2147
11.1744
1736
1379.05
Palladium Spot $/Oz
756.15
2.39
8.0739
758.6
553.75
LME ALUMINUM 3MO ($)
2060
0.487804878
-0.627110468
2361.5
1827.25
LME COPPER 3MO ($)
8103
0.658385093
2.168705081
8765
7219.5
LME ZINC
2095
0.672753484
0.721153846
2187.25
1745
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Mar13 Mar13
17850
1.276595745
4.630715123
22150
15236
15.525
0
2.306425041
16.84000015
14.89999962
728.25
-0.17135024
4.296455424
846.25
511
WHEAT FUTURE(CBT) Mar13 SOYBEAN FUTURE Mar13
774
-0.386100386
-0.514138817
948.25
652
1458.25
0.447735492
3.458673288
1728.25
1207.75
150
0.133511348
4.311543811
237.5
141.25
COFFEE 'C' FUTURE Mar13
Min 20.9
Last 21.35
20.8
Max 22.1
Average 21.902
Min 21.6
Last 22.1
COUNTRY MAJOR
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
PRICE
DAY %
1.0452 1.5744 0.922 1.35 91.23 7.9906 7.758 6.2204 53.455 29.8 1.2365 29.508 40.625 9768 95.357 1.24477 0.85751 8.4014 10.7879 123.15 1.03
0.0479 0.159 0.2386 0.5512 -0.844 0.0113 0.0039 0.0965 0.5986 0.1678 0.0566 0.1525 0.2388 -0.86 -0.8882 -0.3109 -0.386 -0.3654 -0.5395 -1.3723 0.0097
YTD %
(H) 52W
0.713 -2.6706 -0.7158 2.3503 -5.6232 -0.0926 -0.0954 0.164 2.8809 2.6174 -1.2212 -1.6097 0.9354 0.2559 -6.3236 -2.9957 -4.9084 -2.1889 -2.3869 -7.7791 -0.0097
1.0857 1.6381 0.9972 1.3516 91.32 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 95.468 1.25692 0.85865 8.4894 10.8 123.3 1.0314
0.9582 1.5269 0.8931 1.2043 76.03 7.9823 7.7498 6.2105 48.6088 29.63 1.2152 28.913 40.54 8878 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029
MACAU RELATED STOCKS NAME
(H) 52W
(L) 52W
3.6
0.2785515
14.28571
3.68
2.27
1538919
CROWN LTD
11.73
-1.012658
9.934395
12.04
8.06
3050598
ARISTOCRAT LEISU
PRICE
DAY % YTD %
VOLUME CRNCY
SUGAR #11 (WORLD) Mar13
18.6
1.19695321
-4.664274731
25.12999916
18.05999947
AMAX HOLDINGS LT
0.074
-2.631579
5.714285
0.119
0.055
8143500
82.18
-0.254885302
9.369177535
98.5
66.84999847
BOC HONG KONG HO
26.7
-0.1869159
10.78838
27
20.25
12304585 586000
CENTURY LEGEND
World Stock MarketS - Indices COUNTRY
PRICE
DOW JONES INDUS. AVG
US
NASDAQ COMPOSITE INDEX
US
FTSE 100 INDEX
0.285
-3.389831
7.547176
0.34
0.215
CHEUK NANG HLDGS
6.14
0.6557377
2.504178
6.25
2.8
70591
CHINA OVERSEAS
24.6
0.8196721
6.493505
25.6
14.124
26733745
CHINESE ESTATES
13.34
-1.477105
1.987768
13.7
8.3
300000
CHOW TAI FOOK JE
12.48
0.8077544
0.3215468
15.04
8.4
2353419
EMPEROR ENTERTAI
2.03
0
7.407408
2.09
0.99
625000
FUTURE BRIGHT
1.75
4.790419
43.44262
1.77
0.465
13026000
DAY %
YTD %
(H) 52W
(L) 52W
13954.42
0.5221896
6.488638
13969.99
12035.08984
GALAXY ENTERTAIN
34.95
1.895044
15.15651
35.35
16.62
5386475
3153.659
-0.02022638
4.442612
3196.932
2726.68
HANG SENG BK
126.6
0.5559968
6.655437
127
99.2
2309893
GB
6340
0.01277766
7.497528
6346.37
5229.76
HOPEWELL HLDGS
32.15
1.100629
-3.308271
34.4
19.049
800603
DAX INDEX
GE
7855.95
0.09402987
3.199522
7871.79
5914.43
HSBC HLDGS PLC
88.05
0.9169054
8.302579
88.35
59.8
26107365
NIKKEI 225
JN
11113.95
2.275112
6.91446
11113.95
8238.96
HUTCHISON TELE H
3.58
5.294118
0.5617994
3.88
2.98
10794013
HANG SENG INDEX
HK
23822.06
0.7055117
5.142538
23916.16016
18056.4
LUK FOOK HLDGS I
28.05
2.559415
14.95902
30.05
14.7
1260781
MELCO INTL DEVEL
12.96
3.184713
43.84017
13
5.12
10303000
CSI 300 INDEX
CH
2688.711
0.4800315
6.570044
2717.825
2102.135
MGM CHINA HOLDIN
18.42
4.067797
31.38373
18.44
10.04
14306417
TAIWAN TAIEX INDEX
TA
7832.98
0.3970777
1.733619
8170.72
6857.35
MIDLAND HOLDINGS
3.86
0.7832898
4.324323
5.217
3.249
2990000
NEPTUNE GROUP
0.204
0
34.21053
0.226
0.084
0
NEW WORLD DEV
14.48
-1.092896
20.46589
15.12
7.95
25694355 12439363
KOSPI INDEX
S&P/ASX 200 INDEX
SK
1964.43
0.4330354
-1.633409
2057.28
1758.99
AU
4896.693
0.1578449
5.329002
4906.2
3985
ID
4446.947
0.1783498
3.017586
4472.108
3635.283
FTSE Bursa Malaysia KLCI
MA
1627.77
-0.5844846
-3.622365
1699.68
NZX ALL INDEX
NZ
921.447
1.177415
4.466177
PHILIPPINES ALL SHARE IX
PH
3949.53
0.5158732
6.77349
JAKARTA COMPOSITE INDEX
21.4
(L) 52W
COTTON NO.2 FUTR Mar13
NAME
17.60
22.2
WTI CRUDE FUTURE Mar13
CORN FUTURE
52.0
CURRENCY EXCHANGE RATES
NAME
METALS
Last 52.2
21.6
Commodities ENERGY
Min 52.1
40.0
37.6
Last 39
17.85
SANDS CHINA LTD
39
2.228047
14.87481
39.35
20.65
SHUN HO RESOURCE
1.47
0.6849315
5.000002
1.59
1.03
52000
1509.49
SHUN TAK HOLDING
4.22
-0.2364066
0.7159891
4.65
2.56
8918077
921.736
738.153
SJM HOLDINGS LTD
21.35
3.140097
18.61111
21.9
12.34
5858200
3967.04
3132.34
SMARTONE TELECOM
13.66
1.636905
-2.982954
17.5
13.1
4779906
WYNN MACAU LTD
22.1
2.552204
5.489256
25.5
14.62
8194108
ASIA ENTERTAINME
4.77
2.141328
55.88236
7.24
2.4
492644
BALLY TECHNOLOGI
46.11
-1.305651
3.131293
51.16
41.34
428410
HSBC Dragon 300 Index Singapor
SI
633.46
-0.09
1.99
NA
NA
STOCK EXCH OF THAI INDEX
TH
1486.91
0.5504575
6.823617
1488.54
1072.71
HO CHI MINH STOCK INDEX
VN
487.6
0.7417202
17.85464
492.44
372.39
BOC HONG KONG HO
3.46
0
12.70359
3.46
2.56
1000
Laos Composite Index
LO
1435.47
0.641511
18.16805
1455.82
880.65
GALAXY ENTERTAIN
4.47
1.360544
12.59446
4.53
2.18
20730 3934422
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
INTL GAME TECH
14.99
-1.833661
5.786873
17.37
10.92
JONES LANG LASAL
91.84
0.5804403
9.411481
92.05
61.39
652394
LAS VEGAS SANDS
51.08
-3.275895
10.65858
58.3216
32.6127
10305735
MELCO CROWN-ADR
20.33
1.345962
20.72446
20.59
9.13
3271955
MGM CHINA HOLDIN
2.2
0
18.91892
2.3
1.3525
2000
MGM RESORTS INTE
12.62
-2.773498
8.419241
14.9401
8.83
17035118
SHFL ENTERTAINME
14.44
-1.163587
-0.4137931
18.77
11.75
238365
SJM HOLDINGS LTD
2.7
3.846154
16.88312
2.85
1.65
2900
122.39
-0.9308726
8.800784
129.6589
84.4902
1003673
WYNN RESORTS LTD
AUD HKD
USD
14 |
business daily January 31, 2013
Opinion
Cameron’s scepticism is good for the European Union Clive Crook
D
Bloomberg View columnist
avid Cameron’s recent speech on Britain and the European Union went down pretty well with his party at home but was coolly received across the Channel. The U.K. prime minister called for a “new settlement” to include repatriation of some powers ceded to the centre in previous treaties. At this, most other EU leaders rolled their eyes. Constant moaning and foot-dragging aren’t what you want in a partner. The trouble is, Britain has a point – one that other EU states should weigh carefully, not for Britain’s sake but for their own. Cameron’s partners need to understand that he’s sincerely pro-European. He wants Britain to remain a member of the EU, but he recognises that the country can’t get on with a one-size-fits-all EU. Britain may be uniquely truculent, and no doubt uniquely annoying as well, but its citizens aren’t alone in their reservations about the EU’s blithe commitment to “ever-closer union.” If Britain wasn’t voicing these doubts, somebody else would be. The reaction to Cameron’s speech expressed a remarkable degree of complacency alongside the justified irritation. Europe’s drive to economic and political integration hasn’t exactly been an unalloyed success. The EU’s biggest innovation of late – the creation of the euro – is a disaster for many member states. Countries such as Spain and Italy surrendered their monetary sovereignty, and with that the ability to stimulate their economies with lower interest rates and a depreciated currency. They are no longer free to use a spell of inflation to promote employment or reduce debt burdens. They tied their hands in that way knowing that complementary aspects of policy integration weren’t yet in place. Less monetary flexibility made it vital to allow for enhanced fiscal flexibility. They should have strengthened their public finances so that they could safely run big budget deficits if the need arose. They gestured in that direction but didn’t do enough. They should have
made their automatic fiscal stabilisers more potent. They didn’t. Above all, they should have designed a collective fiscal response, so that intra-EU fiscal flows would help to offset asymmetric economic shocks. They didn’t do that, either.
Half-baked plans The subsequent crisis was both predictable and widely predicted. Britain had the good sense to opt out of the arrangement. Inattention to the danger in the rest of the EU was entirely characteristic. EU leaders have taken a perverse pride in managementby- emergency. Half-baked plans for integration cause problems; the problems call forth half-baked cooperative solutions; the cycle repeats. In this way, the EU iterates toward ever-closer union, and governments call it progress. The endpoint, whatever it may be, is never examined let alone justified to citizens. Meanwhile the transitional costs, like those the EU is enduring at the moment, run out of control. Under these circumstances, why not call for a moment of deliberation about where the EU is headed? The discussion that Britain wants is in everybody’s interests. Among EU members, Sweden is more apt than most to sympathise with
Britain’s point of view. Yet as Bloomberg View’s Tim Judah reported last week, Carl Bildt, Sweden’s foreign minister, tweeted mild disapproval of Cameron’s speech: “Flexibility sounds fine, but if you open up to a 28-speed Europe, at the end of the day there is no Europe at all. Just a mess.” (He said 28 and not 27 because Croatia is expected to join soon.) That’s an odd response, first because Cameron isn’t calling for a 28-speed Europe, and second because Sweden also opted out of the euro, just as Britain did. Ten of the EU’s present 27 members retain their own currencies. In that key respect, Europe is already a two-speed enterprise. In light of experience, it’s far from unreasonable to advocate this as an indefinite arrangement and to explore the implications. One such implication is that some powers already transferred to the EU centre can be brought back. That topic shouldn’t be unmentionable.
After all, the EU formally recognises the principle of subsidiarity – which says that decisions are best made as close to the people they affect as possible. There’s no sensible rationale for the view that decisions on integration and subsidiarity, once made, can never be reversed. Euro-area countries do need to strengthen their arrangements for fiscal cooperation. Actually, this needn’t require a major new surrender of national sovereignty – use of conditional joint euro bonds might suffice. But moves to full political union make good sense if that’s what the citizens of France, Germany and other core countries really want. Non-euro countries, on the other hand, have less need of fiscal pooling and needn’t participate if their voters don’t wish to. If countries such as Britain and Sweden are content with their second-tier status, why should that be a problem? The
mutual gains from this kind of associate membership are still enormous. In a one-size-fits-all Europe, the only way for countries that don’t want full political union to stand aside from that venture is to block it for everybody else as well. Why not let the core countries pursue their ambition while staying on terms of close friendship and intimate economic cooperation with partners that wish to remain sovereign nations? The one-speed approach is a formula for endless friction and recrimination. A deliberately institutionalised core-and-periphery Europe starts by recognising that views on this subject differ and will continue to. That’s a threat to European prosperity only if Europe makes it one. The point is, so long as the subject isn’t ruled offlimits, the differences can be accommodated. That’s better, surely, for sceptics and integrators alike. Bloomberg View
A deliberately institutionalised core-andperiphery Europe starts by recognising that views on this subject differ and will continue to
editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes Newsdesk Alex Lee, Luciana Leitão, Stephanie Lai, Tony Lai Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, José I. Duarte, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com
January 31, 2013 business daily | 15
OPINION Business
China’s last soft landing?
Leading reports from Asia’s best business newspapers
wires
Business Inquirer
Stephen S. Roach
Faculty member at Yale University and former chairman of Morgan Stanley Asia
President Benigno Aquino said the growth of the Philippine economy will surpass the official target of 5 to 6 percent in 2012. “All of us will be impressed,” Mr Aquino was quoted as saying on Tuesday of the report on the full-year economic growth rate in 2012, which the government planning agency is set to release today. Mr Aquino, however, declined to disclose figures of the fourth quarter and full year growth in 2012. The economy grew 6.3 percent in the first quarter of 2012, followed by 6 percent and 7.1 percent in the second and third quarters, respectively.
Taipei Times Taiwan’s consumer confidence index rebounded this month, snapping four months of decline amid improving economic prospects at home and abroad, a survey showed on Tuesday. The survey, conducted by the National Central University on behalf of the government, showed that the index had risen to 72.82 this month, an increase of 1.76 points from the previous month that ended the continuous fall seen since September last year. The index gauges the public’s expectations of stock market performance, household finances, durable goods, job opportunities, consumer prices and the economic outlook for the next six months.
Vietnam News Vietnam’s Prime Minister Nguyen Tan Dung urged all sectors and localities to keep making efforts to stabilise macro-economy, control inflation and settle difficulties for enterprises, in spite of good results in economic growth in this first month of the year. He was speaking at the monthly government meeting. The statistics of the Ministry of Planning and Investment showed that more than 3,830 enterprises had been newly established with registered capital of more than 15.9 trillion dong (US$757 million) in the first 20 days of January.
The Star Malaysia’s central bank is expected to maintain the benchmark overnight policy rate steady at 3 percent today for the 10th time since May 2011. This is premised on the stronger domestic economic conditions despite the continued external uncertainties with an easier inflation environment, Alliance Research’s chief economist Manokaran Mottain wrote in a note to clients. “While Malaysia’s GDP growth should likely stay steady at around 5 percent, low inflation environment will prevail as reflected by the 1.2 percent growth in consumer price index for December the slowest since February 2010,” Mr Manokaran stated in his report.
O
nce again, China has defied the naysayers. Economic growth picked up in the final quarter of 2012 to 7.9 percent – half a percentage point faster than the 7.4 percent increase in GDP in the third quarter. This was a meaningful increase after ten consecutive quarters of deceleration, and it marks the Chinese economy’s second soft landing in slightly less than four years. Despite all the talk about the coming shift to internal demand, China remains heavily dependent on exports and external demand as major drivers of economic growth. It is not a coincidence that its last two slowdowns followed closely on the heels of growth slumps in its two largest foreign markets, Europe and the United States. Just as the soft landing in early 2009 occurred in the aftermath of a horrific American-made crisis, this latest one followed the European sovereign-debt crisis. China has several sources of strength that have enabled it to withstand the tough external shocks of the last four years. Large buffers of saving (53 percent of GDP) and foreignexchange reserves (US$3.3 trillion) are at the top of the list. Moreover, unlike the West, which has used up most of its traditional countercyclical policy ammunition, China has maintained ample scope for fiscal and monetarypolicy adjustments as circumstances dictate. Likewise, a powerful urbanisation dynamic continues to deliver solid support for China’s high-investment economy, while enabling relatively poor rural workers to raise their incomes by finding higher-paying jobs in the cities. Nonetheless, this may be the last time that China can escape an external shock
with its growth intact. Premier Wen Jiabao addressed this possibility nearly six years ago, arguing in March 2007 that the seemingly spectacular Chinese economy had become “unstable, unbalanced, uncoordinated, and ultimately unsustainable”.
of fabric, the longer it remains stretched, the longer it will take to return to its former resilient state – and the greater the possibility that it will not spring back the next time something goes wrong.
Mounting risks
The message to China’s new leadership is unmistakable: There has never been a more urgent time to get on with the
Since then, many of China’s inherent strengths have been sapped by all-too-frequent external shocks. The banking sector is still digging out from the bad loans extended in the aftermath of the global meltdown in 2008. Finding affordable housing has become an increasingly serious problem for those relocating to cities for the first time. And corruption scandals and the related risks of political turmoil were unsettling, to say the least, in the months prior to last year’s Communist Party leadership transition. In other words, the vulnerability implied by Wen’s “Four Uns” has increased significantly. China’s economy has certainly become more unstable, with major slowdowns in real GDP growth in 2009 and again in 2012. Its imbalances have gotten worse as well, with the investment share of GDP approaching 50 percent and private consumption falling below 35 percent of GDP. Similarly, China has become more uncoordinated, or fragmented, as its income disparities have continued to widen. And sustainability is being jeopardised by environmental degradation and pollution, which pose a growing threat to the country’s atmosphere and water supply. In short, China’s growth model has been stretched as never before. And, like a piece
Clock ticking
There has never been a more urgent time to get on with the heavy lifting of rebalancing and reform
heavy lifting of rebalancing and reform. Now is the time to implement the measures that will accelerate the transition to a more consumer-led economy. The agenda is long, but it is hardly a secret. It includes developing the services sector, funding the social safety net, liberalising an antiquated residential-permit system (hukou), reforming state-owned enterprises, and ending financial repression on households by lifting artificially low interest rates on savings. Failure to act quickly on this programme would leave China far too vulnerable to the inevitable next shock in a crisisbattered world. In the absence of rebalancing, any one of several potential tipping points could seriously compromise the economy’s ability to pull off another soft landing: deteriorating credit quality in the banking system; weakening export competitiveness as wages rise; key environmental, governance, and social problems (namely, pollution, corruption, and inequality); and, of course, foreign-policy missteps, as suggested by escalating problems with Japan. The Chinese economy has come through two major global crises in the past four years. On the surface, its resilience has been impressive – the first to recover, as Chinese leaders always want to remind the rest of the world. But, beneath the surface, an unbalanced, unstable, uncoordinated, and unsustainable economy risks losing its capacity for resilience. Without rebalancing and reforms, the days of the automatic Chinese soft landing may be over. I have been an optimist about China for 15 years. I still am. But the clock is ticking. Wen Jiabao’s critique six years ago was a powerful diagnosis of the Old China’s flaws that pointed to the Next China’s hopes and dreams. It remains a blueprint that China’s new leadership cannot ignore. Time is no longer on China’s side. It must act now. © Project Syndicate
16 |
business daily January 31, 2013
CLOSING Toyota to recall 1.1 million vehicles
Neptune share placement success
Toyota Motor Corp will recall 1.1 million cars globally for two separate defects, including 752,000 Corolla and Corolla Matrix vehicles in the United States to fix airbags that could be deployed inadvertently, the automaker said yesterday. It is the third Toyota recall since October to involve more than a million cars, and it comes as the company tries to recover from a damaged reputation following a series of recalls between 2009 and 2011. Separately, Toyota will also recall 385,000 Lexus IS and its series, including 270,000 Lexus IS vehicles in the United States over wiper problems, Toyota said.
Neptune Group Ltd, one of the biggest investors in Macau casino junkets, has successfully placed 769 million shares at a price of HK$0.173 (US$0.022) per share the firm said in a filing to the Hong Kong Stock Exchange last night. It will use the HK$128.6 million net it expects to raise in order to buy a 20 percent stake in Essence Gold Investment. The stake is expected to give Neptune a share of profits from junket operations linked to Essence Gold. The placing represents approximately 16.66 percent of Neptune’s issued share capital as enlarged.
Euro-area economic confidence ticks up Economy seen stabilising at ‘a very low level’ Stefan Riecher
E
conomic confidence in the euro area rose more than economists forecast in January, adding to signs that the 17-nation currency bloc may be emerging from a recession. An index of executive and consumer sentiment rose to 89.2 from a revised 87.8 in December, the European Commission in Brussels said yesterday. That’s the highest since June. Economists had forecast an increase to 88.2, according to the median of 30 estimates in a Bloomberg News survey. European Central Bank President Mario Draghi said last week economic activity is “stabilising at a very low level” and Germany’s Bundesbank expects Europe’s largest economy to rebound in the first quarter from a contraction at the end of 2012. At the same time, service industry output in France slumped this month and economists estimate that the euro area’s second-biggest economy will fall into a recession in the first quarter. “The improvement in financial markets is starting to show some effect on business confidence,” said Jennifer McKeown, senior economist at Capital Economics in London. “But it is a very slow process and it is too soon to suggest we are seeing a real recovery in the euro area.” The euro was little changed against the dollar after the data were
Manufacturers are less pessimistic about the economy
released and traded at US$1.3530 at 11.06am in Brussels, up 0.3 percent on the day.
First-quarter stagnation The euro-area economy shrank 0.1 percent in the third quarter after a 0.2 percent contraction in
EU antitrust body blocks UPS, TNT deal Regulator says deal would have hurt competition
E
U antitrust regulators blocked a 5.2 billion euro (US$7 billion) bid by United Parcel Service Inc. for TNT Express NV, denting the world No. 1 package delivery company’s hopes of expanding its presence in Asia and Latin America. The EU regulatory veto means
that UPS may now have to grow via smaller acquisitions or organically, while TNT could come under pressure to change management or revise its business strategy to deflect activist shareholders. The European Commission said UPS had not offered adequate concessions to ensure the deal would
the three previous months. Gross domestic product probably fell another 0.4 percent from October to December and will stagnate in the first quarter of 2013, according to another Bloomberg survey. The European Union’s statistics office in Luxembourg is due to publish GDP data for the fourth quarter on
not hurt consumers. UPS had flagged the negative decision on January 14, saying it would withdraw its bid because of opposition from the EU regulator. The deal, its biggest ever, would have given it access to Dutch peer TNT’s stronger networks in fastgrowing Asian markets and Latin America and increased its non-U.S. revenues to 36 percent of total sales from the current 26 percent. The European Commission, the EU competition watchdog, said the proposed merger would have reduced competition in 15 EU countries. “[The deal] would have drastically reduced choice between providers and probably led to price increases,” EU Competition Commissioner Joaquin Almunia said in a statement. “We worked hard with UPS on possible remedies until very late in the procedure, but what they offered
February 14. A gauge of sentiment among European manufacturers improved to minus 13.9 from minus 14.2 in December, yesterday’s report showed. An indicator of services confidence rose to minus 8.8 from minus 9.8, while consumer sentiment climbed to minus 23.9. While policy makers are cautious to call an end to the three-year-old debt crisis in the euro area, they are starting to become more optimistic. “The fire is under control,” German Deputy Finance Minister Steffen Kampeter told the BBC in a radio interview broadcast yesterday. “But we have to take care it will not start again.” Financial markets have calmed and stocks have rallied since Mr Draghi in July announced the ECB’s bond-purchase plan. While this has reduced the probability of a breakup of the common currency, the economic environment still remains “challenging,” ECB Executive Board member Peter Praet said yesterday. The Frankfurt-based central bank estimates the euro-area economy will shrink 0.3 percent this year before finding its way back to a full-year growth rate of 1.2 percent in 2014. The unemployment rate rose to a record 11.8 percent in November and economists forecast another increase in December. Bloomberg News
was simply not enough to address the serious competition problems we identified.” UPS had offered to sell TNT’s operations in 15 countries, mainly in eastern Europe, with the principal potential buyer France’s DPD, but failed to convince the Commission of the merits of its proposal. TNT is the leading postal delivery company in Europe, with an 18 percent market share against the 10 percent of UPS. Deutsche Post’s DHL unit has 15 percent while FedEx is a distant fourth player. The decision is Mr Almunia’s third veto of a takeover deal in as many years. He blocked the US$7.4 billion merger of NYSE Euronext and Deutsche Boerse about a year ago and a plan to combine Greek airlines Aegean and Olympic Air two years ago. Reuters