Macau Business Daily, July 11, 2013

Page 4

Vitor Quintã

MOP 6.00

Chow Tai Fook 1 shares jump on revenue boost

April 19, 2013

Deputy editor-in-chief

Galaxy pays penalty for land rent delay Page 6

Editor-in-chief Tiago Azevedo

Hackers ‘aimed at govt e-mail accounts’

P

ublic antenna companies will begin broadcasting copyrighted television channels provided by Macau Cable TV Ltd and the concessionaire will receive public money for its troubles, if the two sides agree to a government proposal, a press conference heard yesterday.

It comes almost a month after the Court of Second Instance ordered the government to stop within 90 days the public antennas from illegally relaying cable pay television channels.

Macau Cable has in theory had a monopoly of cable television services since 1999, but for all of that time the antenna firms have ignored its concession rights – and the government has not enforced them.

The Macau Cable concession expires next year.

More on page 3

I SSN 2226-8294

Home sales cooler over summer: agency

www.macaubusinessdaily.com

Year II

Number 324

Thursday July 11, 2013

Page 7

Hang Seng Index

New rules on pre-sales and on professional qualifications required for estate agents have hit the residential sales market, suggest senior industry executives.

Centaline (Macau) Property Agency Ltd estimated there were only 150 home deals last month, down by about 90 percent from May, after the law regulating the pre-sales of unfinished flats came into force.

The bill, effective since June 1, states a developer must complete the foundations of a housing development and register the flats before selling them.

Centaline said the price of shops rose by 44 percent quarter on quarter up to June 30. The price of offices could also rise further this year.

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HSI - Movers

Cash declaration idea not targeting gaming: Tam

SJM Cotai wonderland plan by Beijing group

The possibility of asking travellers to declare cash at the border is not designed to curb the gaming industry, the government stressed yesterday.

“This is absolutely not targeted at any industry. By imposing such restrictions [it is] just an improvement in our anti-money laundering measures,” stated Secretary for Economy and Finance Francis Tam Pak Yuen. Gaming operator SJM Holdings Ltd said it was “premature” to talk about any impact.

A state-owned Chinese conglomerate will design part of Sociedade de Jogos de Macau SA’s (SJM) new Cotai site, says the casino operator. Cotai Magnific View – Property Development Co Ltd, an SJM subsidiary, signed a two billion yuan (2.6 billion patacas) cooperation deal with Beijing Gehua Cultural Research and Development Centre.

‘Wonderland of Art and Literature’, will include Chinese cultural performances, exhibitions of national treasures and “fantasy amusement rides”.

Page 3

Page 4

End of the line for Viva Macau appeal The Court of Final Appeal yesterday dismissed a retrospective appeal from now-defunct low-cost airline Viva Macau – Sociedade de Aviação Ltda against its 2010 grounding. The airline had debts of about US$38 million (303.6 million patacas). It hoped a victory in the administrative hearing would allow it to seek compensation from the government. But the court declined to consider if Air Macau Co Ltd’s termination of the subconcession was valid.

Page 5

Name

%Day

CHINA RES POWER

4.73

SANDS CHINA LTD

4.67

CHINA SHENHUA-H

4.02

NEW WORLD DEV

3.01

PING AN INSURA-H

2.76

CHINA UNICOM HON

-0.76

CHINA MERCHANT

-0.88

CHINA RES ENTERP

-1.65

COSCO PAC LTD

-2.00

TINGYI HLDG CO

-2.80

Source: Bloomberg

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2

July 11, 2013

Macau

Home sales hit the wall in dog days of summer Flood of unknowns Realtor says deals at near standstill as regulation, uncertainty opinion

threatens a market correction Tony Lai

tony.lai@macaubusinessdaily.com

José I. Duarte Economist

S

ocial scientists and particularly economists are often called to make forecasts. It may concern an event, a stock’s performance or the economy.

Humans take comfort in the idea that the future is predictable and, therefore, controllable.

It helps lighten the weight on our shoulders.

If the future is already written, an individual cannot be responsible for it. One way or another, we feel safer.

Perhaps that is why many feel inclined to believe self-assured forecast sellers, in all guises and with varying degrees of technical rigour, from street fortune-tellers to econometricians armed with the most sophisticated number-crunching systems.

Unfortunately, it is faith that may be our worst adviser, leading observers to ignore the many caveats in the act of forecasting.

If the aim is to anticipate something in advance, to expect to “know” the future in advance, forecasting is a useless exercise.

People seldom realise they are asking for the impossible. There is a paradox involved: if we could predict the future, the future would be different.

But humans cannot help but think about the future and how it may be shaped.

History is proof that such a unique ability, typically blended with a level of delusion, is the source of both the most amazing achievements and most extraordinary blunders. It is better to be aware of the assumptions and limitations of forecasts.

Depending on the subject and the skills of the practitioners, it is fair to assume a reasonably good outcome can be achieved, for example, in finding the main causes of social and economic behaviour and their likely consequences.

A similar task might be in highlighting trends that shape the world and how they may evolve.

Still another task could be in outlining alternative future scenarios and their impact on day-to-day life. Perhaps analysts might gain a feeling for the zeitgeist in the future.

Beyond that, the world is too complicated.

R

ules to limit flat pre-sales and regulate estate agencies have hit the home market, with sales expected to decline drastically over the next few months, according to Centaline (Macau) Property Agency Ltd. The realtor says there were only 150 home deals last month, down by about 90 percent from May, after the law regulating the pre-sales of unfinished flats came into force.

The bill came into effect on June 1 and forces developers to complete the foundations of a housing development and register flats before selling them.

“The number of transactions will be around 150 in June and July and could recover a bit in either in August or September once the market gets used to the pre-sales law and the agent bill,” Centaline director Jacky

Shek Po Tak said yesterday.

The city’s first attempt at regulating estate agents and agencies came into force this month. It requires all agents to get licences.

A credit crunch in the mainland and a possible reduction of the United States’ quantitative easing policy has also put the skids under sales.

Mr Shek predicted home prices will be stable for the rest of the year despite the uncertainties.

“The Macau economy remains sound and the home market is [for] end-users. So there has not been a price cut-down like in Hong Kong since the U.S. news,” he said.

United States Federal Reserve chairman Ben Bernanke said the loose monetary policy conditions of the quantitative easing policy may wind down later this year.

This move would boost the city’s

Raining problems Let me offer an example. For decades, analysts have warned that Arab societies were breeding explosive imbalances that could ignite into unrest.

They identified the causes and defined, as best as possible, the likely developments and suggested the possible triggers. Not one of them was able to forecast that the selfimmolation of a Tunisian fruit-seller, driven to despair by police abuse and corruption, would set fire to the Middle East.

That may suggest humans are at the mercy of events. Quite to the contrary, judicious acts or inaction can transform everything, at any time.

That explains why humans cannot live without looking into the future, peering into what the days ahead may have in store. That is how people deal with and adapt to circumstances, both expected and unexpected.

This column was inspired by the Legislative Assembly’s debate on the floods that seem to be plaguing Macau more frequently.

For years, the city and its neighbours have re-shaped the Pearl River Delta, reclamation by reclamation. Building took off at a furious pace and wide areas of scarce land have been waterproofed.

Infrastructure designed for different circumstances, increasing population density and traffic is increasing the stress on the environment. Increasing amounts of waste pile up and clog drainage.

From time to time, fortunately rare combinations of high rainfall, strong winds and high tides occur. That much can be anticipated.

Nothing in this is new or unknowable. It is a case of hoping for the best or doing only a little, and hoping it is enough. Or, if we really care, doing a lot. Whatever the decision, there are consequences.

The point is the floods were caused by the rain. Gosh, it rained a lot. Who could have foreseen that?

Home sales tumbled by about 90 percent last month, to just 150 sales, Centaline says

Demand, stable returns to push office price T

he price of offices could rise further this year, pushed up by demand and better return on investment.

Roy Ho Sao Hang, senior regional sales director of Centaline (Macau) Property Agency Ltd, said investors favour office sales as they can yield

stable returns of 3 percent from rents, higher than other property types.

“There is also a large demand for offices, which cannot be met by the limited supply,” he said at a press conference yesterday.

The average price of offices sold in the second quarter was 5,200 patacas (US$651) a square foot, up from 4,800 patacas in the previous period, Centaline says.

Mr Ho expects the price of offices, particularly in prime locations, could go up by 10 percent until year-end.

The price of NAPE offices could also rise further as the district has been the top choice for casinos and new companies to set up headquarters.

Prices for shops in some areas of NAPE surged by 50 percent from the previous quarter to 24,000 patacas a square foot and could reach 30,000 patacas by year-end, said Mr Ho. Centaline said the price of shops

interest rate – currently near zero – as the territory’s currency is indirectly pegged to the U.S. dollar.

Mr Shek said it would be “difficult for the [home] market anywhere to escape unscathed” if the world’s biggest economy tightens monetary policy.

The consequences would introduce “pressure for home prices to go down”. He did not offer a timeline as to when that may happen.

The average price of residential units sold in May reached a record high of 98,187 patacas (US$12,289) a square metre, with 1,347 transactions recorded, the Financial Services Bureau said.

Mr Shek expects developers to release new projects at the end of this year and the number of monthly transactions “could return to the level of 1,000”.

“But the price they set up will not be as aggressive as in May or before,” he said.

“The home market this year will still be dominated by first-hand homes. We expected there would be some second-hand flats available in June after the special stamp duty lapse but it seems the owners still take a wait-and-see approach.”

The special stamp duty is an additional levy of 20 percent on the sale of a property if it is sold within a year of being purchased or 10 percent if it is sold between one and two years after its purchased.

The regime was introduced by the government in June 2011, which means homes bought that month can now be sold without paying the additional duty.

Legislator Ho Ion Sang asked the government in a written enquiry yesterday to lay out new property restrictions, including setting a price cap for flats built in private projects.

Centaline Macau managing director Stanley Poon Chi Ming said he saw no need for the government to impose new controls.

Mr Shek said the market would “correct itself naturally”.

rose by 44 percent quarter-onquarter to 28,000 patacas a square foot price in Taipa and by 10 percent to 54,700 patacas in downtown Macau peninsula.

T.L.

33

July April11, 19,2013 2013

Macau

Short-term solution to dodge cable TV blackout Public antenna firms to relay Macau Cable TV signal, company to get money from govt Stephanie Lai

sw.lai@macaubusinessdaily.com

arrangement on how this scheme can work,” he added.

A list of the participating public antennas in the cooperation plan will be announced by late July, Mr Tou stated.

“Under this solution, residents do not need to pay any extra charges and can continue to watch channels that are not involved in any copyright disputes,” the official explained.

“Also, the participating public antenna companies do not need to pay any extra charges to Macau Cable TV for using its television signal,” he added.

Only solution

P

ublic antenna companies will begin broadcasting copyrighted television channels provided

by Macau Cable TV Ltd and the concessionaire will receive public money for its troubles, if the two sides agree to a government proposal, a press conference heard yesterday.

The proposal comes almost a month after the Court of Second Instance ordered the government to stop within 90 days the public antennas from illegally relaying cable pay television channels.

The judgement created the prospect of many households facing a television blackout later this year.

Seventy percent of homes only have public antenna systems and not the private household aerials they would need to keep on receiving free-to-air channels such as the basic service of the city’s public broadcaster Teledifusão de Macau (TDM).

To prevent a blackout of the free channels as well as the pay-TV ones, the government wants the public antennas to rebroadcast Macau Cable TV under the cable firm’s branding, using the antenna firms’ existing network, Lawrence Tou Veng Keong, director of the Bureau of Telecommunications Regulation, said in a press conference yesterday. In return the government will pay Macau Cable TV for the privilege, so that it, in turn, can pay content suppliers.

Some public antenna firms disagree with proposal, telecom regulator Lawrence Tou admitted

“For these costs the government will shoulder them, though the exact amount will be discussed in another round of discussions,” said Mr Tou. In the same press conference, Legal Affairs Bureau director André Cheong Weng Chon stressed that this solution would not entail Macau Cable TV providing any extra services or sharing its concession rights with public antennas.

The proposal would be a shortterm one, though the exact duration remains undecided, Mr Tou admitted.

Macau Cable has in theory had a monopoly of cable television services since 1999, but for all of that time the antenna firms have ignored its concession rights – and the government has not enforced them. The Macau Cable concession expires next year.

“The response from a majority of the public antenna companies to this cooperation scheme has been positive,” said Mr Tou. “Hopefully by the end of July we will have completed a detailed

“Of course for Macau Cable TV, there will be inevitable administrative cost and other expenses with technicians,” said Mr Tou. The channels that Macau Cable TV will make available for public antennas will be announced later following more meetings with the companies, Mr Cheong said.

“The present solution is not ideal, but is the only solution that we can come up with in order to fulfil the court’s decision; after several rounds of discussion with Macau Cable TV and the public antenna companies,” said Mr Tou. Six public antennas that organised a press conference yesterday disagree.

The government’s solution is “childish” and would allow Macau Cable TV to “wholly own the rights to receiving television signals,” said Yeung Ka Ke, manager of Sai Kai Electronics, one of those public antennas, quoted by public broadcaster TDM. “Of course some public antenna companies have some doubts towards the present solution, but we will remain open to their opinions and communicate with them,” said Mr Tou. Business Daily asked Macau Cable TV chief executive Angela Lam In Nie for a comment but was told the executive was not available.

Ms Lam told TDM yesterday that her company had a “positive” view on the government scheme.

Cash declaration idea ‘not targeting’ gaming: Tam And casino boss So says not worried proposal will hit gambling revenues Stephanie Lai and Tony Lai

newsdesk@macaubusinessdaily.com

T

he pos s ibility of ask ing travellers to declare cash at the border is not designed to curb the gaming industry, the government stressed yesterday.

“This is absolutely not targeted at any industry. By imposing such restrictions [it is] just an improvement in our anti-money laundering measures,” stated Secretary for Economy and Finance Francis Tam Pak Yuen.

“We are also a WTO [World Trade Organization] member and there are so many aspects and international responsibilities [by which] we have to abide,” he told reporters on the sidelines of the 2nd Macau-Beijing Cooperation and Exchange Symposium.

Francis Tam

As Portuguese news agency Lusa reported last week, Macau’s Financial Intelligence Office said it is studying such a system to enforce mainland China’s rule that outbound travellers can only export 20,000 yuan (US$3,260) per trip.

The news prompted some commentators including Barclays Bank to suggest it could hit revenues for cash-only massmarket table gambling.

But Ambrose So Shu Fai, chief executive of gaming operator SJM Holdings Ltd, said yesterday at the symposium it was “premature” to talk about any impact.

“They [the government] have not mentioned any agenda for imposing such a measure,” he told reporters.

“Will it be implemented? We still don’t know.”

But he added, “I don’t think there is [will be] any special impact on the overall gaming performance.”

Mr Tam stressed yesterday the government had still to study the idea. The city’s top financial official also said such a requirement would not damage the city’s image as an open economy. He added that free flow of capital was guaranteed across the territory as long as no money laundering practices were involved.

Mainland China customs mandate passengers can only bring 20,000 yuan and only withdraw up to 10,000 yuan a day per bankcard, via cash machines.

“Despite the [mainland]

restrictions imposed on how much cash passengers can bring, we can still see Macau’s gaming revenues keep on rising in the past,” said SJM’s Mr So. Casino gross gaming revenue was 171.4 billion patacas in the first half, 15.3 percent more than a year earlier, according to data from the Gaming Inspection and Coordination Bureau.

The city’s top financial official also said such potential rule will not impact on the city’s image of free economy, guaranteeing free flow of capital across the territory as long as no money laundering practices involved.

4

July 11, 2013

Macau

SJM signs Beijing firm to build Cotai draw cards Music, dance and amusement rides to be offered by supplier to 2008 Olympics Stephanie Lai

sw.lai@macaubusinessdaily.com

A

state-owned mainland conglomerate will take over the design of a cultural project in Cotai for Sociedade de Jogos de Macau SA, the casino company said yesterday.

Cotai Magnific View – Property Development Co Ltd, a subsidiary of SJM, signed a 2-billion-yuan (2.6 billion pataca) cooperation deal with Beijing Gehua Cultural Research and Development Centre.

Gehua’s project, Wonderland of Art and Literature, will include cultural performances, exhibitions of national treasures and “fantasy amusement rides”.

The centre is a subsidiary of the state-owned Beijing Gehua Cultural Development Group, known for its involvement in staging large-scale events including the 2008 Olympics.

“Gehua Group has very rich cultural resources and [they] are experienced,” said SJM chairman Ambrose So Shu Fai. “They will be designing and organising cultural performances for

us, which is one of our non-gaming elements in the Cotai property.”

SJM said in October it had been granted a 70,500-square-metre block of land in Cotai to develop a resort-casino.

“We will have probably tens of thousands of square metres of space reserved for our theatre and exhibition area,” said Gehua’s vice-general manager Ge Lizhi.

Mr Ge told Business Daily the project was still at an initial stage “and it is not finalised at the moment”.

The gaming company approached Gehua about six months ago, he said.

Chinese cultural performances, which may feature music and dance shows from many of China’s 56 ethnic groups, will be a major part of the package.

“Nevertheless, that does not mean we will just bring out the whole Chinese traditional dance or music stuff here,” said Mr Ge. “Our performances will definitely not be like The House of Dancing Water,” he said.

Rival operator Melco Crown Entertainment Ltd has established The House of Dancing Water show as part of the entertainment at Cotai resort City of Dreams.

“We will put out various performances on a regular basis, at least once a month,” Mr Ge said.

The company’s offering would

SJM and Gehua signed a 2-billion-yuan contract yesterday to build culture-based attractions in Cotai

Chow Tai Fook shares jump on revenue boost Jewellery retailer rose most since debut on sales

Revenue up on strong gold product sales (Photo: Manuel Cardoso)

S

hares in Chow Tai Fook Jewellery Group Ltd jumped as much as 15 percent yesterday after the world’s largest jewellery retailer by market value reported strong revenue growth due to plummeting gold prices.

With gold sales booming, Chow Tai Fook said its revenue in Macau and Hong Kong has grown by 85 percent year-on-year in the first quarter of its fiscal year.

Such “remarkable” increase is

“attributable mainly to the increase in sales of gold products following a sharp decrease of gold price since April 2013,” the company told the Hong Kong Stock Exchange.

In a filing on Tuesday the world’s largest listed jewellery chain said sales of gold products in existing stores rose by 78 percent year-on-year.

The group opened 20 new outlets last quarter, including three in Macau and Hong Kong.

appeal to all tourists, he said.

“We will study the local demand and see what they would like to see.”

The deal between SJM and the Gehua Group was signed during the 2nd Beijing Macau Cooperation and Exchange Projects Promotion Symposium.

On the symposium’s first day, contracts worth almost 4.14 billion yuan were signed, a 61.1-percent increase compared to the first edition of the event.

Deals were signed in areas including tourism, the media, and the cultural and creative industries.

Those contracts include Melco Crown Entertainment appointing the Macau subsidiaries of two Beijingbased firms to handle the interior design and the curtain wall of its Studio City resort in Cotai.

Sundart Engineering Services (Macau) Ltd won the HK$788-million (US$101.6 million) interior design contract and Jangho Curtain-Wall Co Ltd will receive HK$497 million to build Studio City’s façade.

Gold posted a record quarterly fall from April-June, luring mainland Chinese buyers to Chow Tai Fook’s almost 1,800 jewellery and gold stores across China, Hong Kong and Macau.

In Tuesday’s statement the group said revenues in the first quarter of the financial year had jumped 63 percent from the same period in 2012.

The stock had pared gains to end at HK$9.16 (US$1.18) in Hong Kong trading, but that was still up

12.95 percent on the day, its biggestever daily percentage climb. The benchmark Hang Seng Index rose 1.07 percent.

Cross-selling on non-gold jewellery and replenishment orders from franchisees were also cited by analysts as driving the sales numbers.

CLSA Ltd lifted Chow Tai Fook’s sales forecasts for the full year to a 12 percent rise from 5 percent, while its full year revenues were expected to hit HK$69 billion (US$8.90 billion), implying 20 percent yearon-year growth. “We believe the Q1 results will be very well-received by the market and lead to earnings upgrades,” analyst Aaron Fischer wrote in a note yesterday.

But some analysts said the luxury retailer’s growing reliance on lower margin gold sales would not necessarily translate into sustainable profits in future.

“We are negative on jewellery stocks in the medium term on weakening gold demand, overexpansion and declining return on invested capital of new shops,” wrote analyst Edwin Fan at Jefferies & Co. Chow Tai Fook said its gross profit margin had dropped around 3 percent in the April to June period. “[The fall was] mainly due to a change in product mix as the portion of gold product increased to 69 percent of revenue,” it said.

Should gold prices fluctuate, Chinese consumer appetite for the precious metal could also be tested.

Strong physical demand from Asia has helped international gold prices recover 6 percent from a two-year low of around US$1,321 an ounce in April. Prices are still about US$300 an ounce below this year’s peak.

Shares in Chow Tai Fook’s rivals Luk Fook Holdings (International) Ltd and Chow Sang Sang Holding International Ltd were up 7.40 percent and 3.23 percent respectively.

T.A. with Reuters

5

July 11, 2013

Macau

Viva Macau appeal reaches end of line Top court says budget carrier should have opened proceedings against Air Macau – not the government Vítor Quintã

vitorquinta@macaubusinessdaily.com

T

he Court of Final Appeal has thrown out an appeal from defunct low-cost airline Viva Macau – Sociedade de Aviação Ltda against its grounding in 2010.

In a judgement handed down yesterday morning, the city’s highest court said it would not look into the decision by Air Macau Co Ltd to terminate Viva Macau’s subsidiary concession.

Viva Macau argued that Secretary for Transport and Public Works Lau Si Io issued an illegal administrative act that ordered Air Macau to revoke the budget carrier’s contract.

The court said yesterday that Viva Macau should have gone after flag carrier Air Macau and not the government if it wanted to appeal.

Viva Macau’s sub-concession was revoked in March 2010, after repeated flight cancellations left thousands of passengers stranded.

The carrier was said to be unable to pay its jet fuel bills from supplier Nam Kwong Group Co Ltd. In January, the Court of Second Instance rejected Viva Macau’s appeal, saying there was no evidence that Mr Lau had issued Air Macau an order that was legally binding.

The low-cost carrier took its

appeal to the city’s top court, arguing the lower court should have also analysed Air Macau’s role.

The Court of Final Appeal said Viva Macau’s case was “clearly groundless”.

The judgement said Air Macau’s decision had no impact on whether Mr Lau’s earlier action was legal or not.

In addition, Viva Macau “did not ask nor could it have asked” for the Court of Second Instance to declare the Air Macau decision void. The Court of First Instance would have heard that argument.

The city’s laws also make it “impossible” for Viva Macau to simultaneously appeal against Mr Lau’s alleged order and Air Macau’s decision, the judges said.

The Court of Second Instance had previously ruled that Viva Macau had two possible targets for its appeal but selected the wrong one.

Mr Lau “did not have power” to order Viva Macau’s contract be revoked because the sub-concession was granted by Air Macau, according to January’s judgement.

As such, any appeal should have focused on the role of the city’s flag carrier.

Viva Macau had earlier filed an administrative appeal against Air

Macau, the lawyer representing the low-cost airline, Henrique Saldanha, told Business Daily.

Mr Saldanha said he would consult with the court-appointed bankruptcy administrator before deciding on a next step, which could involve a civil suit against Air Macau.

Viva Macau was declared

bankrupt in September 2010 and the court-appointed administrator admitted that resuming operations “was likely not an option”.

The airline had debts of about US$38 million (303.6 million patacas) and had sought compensation from the government when it was grounded.

Viva Macau was grounded in 2010, after repeated flight cancellation left thousands of passengers stranded

66

July 11, 2013 April 19, 2013

Macau

Galaxy paid penalty for rent delay Court slams Galaxy Macau land concessionaire for ‘inertia or negligence’ Vítor Quintã

vitorquinta@macaubusinessdaily.com

A

court has confirmed a subsidiary of casino operator Galaxy Entertainment Group Ltd can be penalised for failing to pay the 2011 rent for the group’s Cotai land concession on time.

A Court of Second Instance judgement dated June 6 but only published yesterday reveals that Nova Galaxy Entretenimento Co Ltda – the unit that holds the land including the Galaxy Macau site – had to fork out 528,299 patacas (US$66,123) over the late payment.

The company is required to pay its annual rent of 13.7 million patacas in May every year but the 2011 payment was made only in June, stated the judgement. That led to the government imposing a 3 percent added penalty.

Nova Galaxy asked the Financial Services Bureau to review its decision and later called on Secretary for Economy and Finance Francis Tam Pak Yuen to overturn it. Mr Tam declined to do so.

The company then went to court, claiming it had not received the customary bill asking for the rent because it had changed its address.

The judges disagreed, stressing that this bill was sent by the bureau merely as courtesy to prevent rent non-payment “for simple oversight or negligence from the concessionaires”.

“The discussion of the appeal is only about the technical legal procedures concerning the way how the payment notice was served,” a Galaxy Entertainment Group

Galaxy was late in paying the 2011 rent for its Galaxy Macau land in Cotai

spokesperson told Business Daily.

Nova Galaxy was “aware of its obligation” to pay the rent for the Cotai land where it build its flagship resort in May each year, as was set on the land grant contract signed in 2009.

The concessionaire “did not carry out the payment of the annual rent on time due to its own inertia or negligence,” the court said.

In its original decision, quoted in the court judgement, the Financial

Services Bureau had brushed off Nova Galaxy’s claim that it did not receive the rent bill.

The company told the government it had changed its address in December 2009. But the bureau stressed that fact had not prevented the firm from paying its 2010 rent on time, in May that year.

Nova Galaxy also failed to ask the authorities to change the correspondence address for the concessionaire’s tax

Melco Crown’s Manila partner spends IPO Equity duo in Belle Grande looking for maximum leverage on casino scheme Michael Grimes

michael.grimes@macaubusinessdaily.com

B

elle Corp – a local partner with Macau casino operator Melco Crown Entertainment Ltd in the Belle Grande Manila Bay gaming resort – said in a filing yesterday it has spent the balance of the approximately 4.51 billion pesos (US$104 million) net that it raised from a share offering for the project.

Both partners in the Philippines venture have sought to leverage their corporate equity exposure to the US$1 billion scheme by share offerings to external investors.

Belle – controlled by Filipino Chinese businessman Henry Sy – raised the equivalent of US$104.4 million gross from its rights offer. A total of 99.5 percent of the money went on Belle Grande after listing fees and other expenses. Belle previously built the property’s shell but sought outsiders with casino operations experience and easy access to capital to fit out and run it.

Henry Sy – family controls Belle Corp

Melco Crown raised US$377 million gross in April for Belle Grande in a local private placement with institutional investors. It was done

via MCE (Philippines) Investments Ltd, a unit formed from an off-theshelf company already listed on the Manila bourse.

information, the bureau said.

An industry source told Business Daily: “Concessionaires usually have internal controls in place to make sure that such payments are made in a timely manner, rather than relying on an external reminder – unless there were some query or issue concerning the amount to be paid.”

The group posted profits of HK$3 billion in 2011.

With Michael Grimes

According to a Melco Crown filing to the Hong Kong Stock Exchange last October, the parent has committed to spending – via its local units – an initial US$650 million on Belle Grande, of which at least US$325 million will be for fixtures and fittings.

Melco Crown – via an indirectly held unit called MCE Leisure – has exclusive management, operation and control of the casino project according to the October filing.

The document added that MCE Leisure would be entitled to “approximately” half of the property’s earnings before interest, taxation, depreciation and amortisation “subject to overall property revenue and profitability levels”. MCE Leisure will also get all profits from nongaming operations.

Melco Crown (Philippines) said a fortnight ago it is to increase by nearly one-fifth the number of hotel rooms at the venue. Belle Grande Manila Bay will now have 950 rooms, rather than the 800 originally planned. It will also open in a single phase, said Clarence Chung Yuk Man, chairman of Melco Crown (Philippines) on the sidelines of the unit’s stockholder meeting in Manila.

On July 3 – about a year ahead of Belle Grande’s operations starting in mid-2014 – Melco Crown (Philippines) said in a local filing it was granting share options to six directors of the firm and of the MCE parent, including co-chairmen Lawrence Ho Yau Lung and James Packer, and Mr Chung.

77

July April11, 19,2013 2013

Macau

Hackers ‘targeted’ govt e-mail accounts Regulator strives to ensure cyber security, says Macau chief executive Tiago Azevedo

tiago.azevedo@macaubusinessdaily.com

T

he Macau government said the e-mail accounts of some public departments were among those suspected of being hacked, amid heightened concern about cyber-attacks.

The e-mail accounts that have been reportedly hacked “include those of some government departments,” Macau’s Chief Executive Fernando Chui Sai On said yesterday, according to an official statement.

Mr Chui said the administration is “highly concerned” over the reports and pledged to safeguard cyber security in all government departments, businesses and households.

On Monday, the Judiciary Police disclosed that the e-mail accounts of at least 34 clients of local Internet service provider Companhia de Telecomunicações de Macau SARL (CTM), the city’s largest telecoms firm, had been hacked.

The police had earlier said the IP addresses of the attackers are from Hong Kong and the U.S. Both CTM and the police declined to reveal if the attacks had targeted companies or individuals, citing the need to protect clients’ privacy.

The police and the city’s telecommunications regulator are in charge of the investigations, Mr Chui said yesterday. He was speaking to reporters before the opening of the 2nd Macau-Beijing Cooperation and Exchange Symposium.

The top official said no further details could be disclosed since the authorities are now probing the case. The police will provide more information in due course, he added.

The Telecommunications Regulation Bureau has also requested the Internet service providers to follow up on the case and to review network security.

The Personal Data Protection Office is also looking into the case to ensure the privacy of CTM’s clients has not been breached. There was no indication of loss of information or risk to customers’ personal data, the company said on Tuesday.

Citic Telecom International Holdings Ltd became CTM’s controlling shareholder last month, after paying US$1.16 billion (9.27 billion patacas) to buy out major shareholders Cable & Wireless Communications Plc and Portugal Telecom SGPS SA.

Corporate Suncity VIP club gets global nod Macau junket investor Suncity Group Ltd says it has been awarded international quality certification for its Suncity VIP Club at Galaxy Entertainment Group Ltd’s StarWorld Macau casino hotel.

“Suncity VIP Club has become the international[ly] first VIP club being awarded with such [an] honour, which definitely makes a milestone for Macau’s gaming industry,” said the firm.

The assessment was by Geneva, Switzerland-based SGS, an internationally recognised certification company. SGS’s website says its role is to “demonstrate that your products, processes, systems or services are compliant with national and international regulations and standards”.

Recently the Macau junket industry has been making efforts to stress it is part of the mainstream business community.

“With the…achievement, Suncity Group’s VIP Club should meet the requirements of about two hundred service standards,” added Suncity. Last week the firm said it was now the biggest in the Macau market, with interests in the profits of 250 gaming tables in 17 VIP rooms.

Fast Track re-hired for Macau Open golf The Macau Open golf championship has retained Hong Kong-based international sports marketing agency Fast Track as the event’s public relations consultant, reports Campaign Asia magazine.

In May The Venetian Macao-ResortHotel confirmed it was extending its sponsorship of the Macau Open for a second consecutive year. The Venetian Macau Open is jointly organised by Macau Sport Development Board and the Golf Association of Macau. The tournament is sanctioned by the association and by the Asian Tour, and is promoted by sports management company IMG. This year’s event – the 15th edition – will be held from October 17 to 20 at Macau Golf & Country Club. The prize pool will be US$800,000 (6.39 million patacas), 6.25 percent up on last year’s tally according to the event website.

Fast Track will also continue working with the Thailand Golf Championship, and has been reappointed for the Asia-Pacific Amateur Championship at Nanshan International Golf Club in the mainland’s Shandong province.

Some govt e-mail accounts reportedly hacked

Citic Telecom’s Hong Kong unit said last month its website was hacked. About 2,500 ComNet Telecom (HK) Ltd customers’ information may have been leaked and the company tightened security measures after the attack, it said.

Former National Security Agency contractor Edward Snowden

disclosed last month that the U.S. had hacked computers in Hong Kong and mainland China since 2009.

Macau’s chief executive expressed his concerns over the recent hacking reports to Stephen Young, the U.S. Consul General to Hong Kong and Macau, in a meeting last week.

With Bloomberg News

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July 11, 2013 April 19, 2013

Greater China Beijing gives nod to iron ore platform China’s first non-official physical iron ore trading platform begun operations on Tuesday, four years after it was shut down, in a further sign that the government is relaxing its tight grip over imports of the raw material.

China, which buys around two-thirds of global seaborne iron ore, already scrapped a decadeold iron ore import licensing system at the start of this month, eliminating middlemen and cutting costs for domestic steel mills.

The new platform, which will operate out of the coastal city of Rizhao, was launched on Tuesday, shareholders and traders said.

It will be the third new platform to start in just over a year to help market participants hedge increasingly volatile iron ore prices, although trading on the existing China Beijing International Mining Exchange (CBMX) and Singapore-based GlobalORE has been fairly light.

The Rizhao platform was first set up by large privately owned traders in 2009, but was closed by the China Iron & Steel Association industry body before it started operation due to concerns that it would introduce speculation and destabilise the “benchmark” mechanism then used to set annual iron ore prices.

Prospects for the platform were boosted in January when a state-owned company, China Railway Materials Group Co Ltd, a large iron ore and steel trader, took a major stake.

Trades will initially be settled mainly in yuan, helping traders to sell their inventories sitting at ports, sources with direct knowledge of the situation said.

Trade data suggest deeper slowdown Exports and imports fall in June amid economic fears

C

hina warned yesterday of a “grim” outlook for trade as the world’s second-largest economy surprised financial markets by reporting a fall in exports and imports when both had been expected to rise.

The figures, which follow a government crackdown on the use of fake invoicing that had exaggerated exports earlier this year, are likely to raise fresh concerns about the extent of the slowdown in the economy and global demand.

The June data, showing that exports fell 3.1 percent from a year earlier and imports dropped 0.7 percent, may now reflect the true trade picture, customs officials said.

“China faces relatively stern challenges in trade currently,” customs spokesman Zheng Yuesheng told a news briefing on the June trade figures. “Exports in the third quarter look grim,” said Mr Zheng.

The customs agency said exporters were losing confidence in the face of weak overseas demand, rising labour costs and a strong yuan currency.

The Australian dollar fell about a third of a cent after the China data, reflecting worries about Chinese

demand for Australia’s commodities, such as iron ore and coal.

The MSCI Asia-Pacific ex-Japan index was up 0.5 percent after gaining as much as 1.2 percent to a one-week high before the trade figures came out.

“The story of China economic growth this year has changed – it’s no longer a story about modest recovery but about where the government’s bottom line is,” Xu Gao, Beijing-based chief economist with Everbright Securities Co, said before the release. “Without government support, China’s growth will continue to slide.”

Surplus slump The exports fall was the first since January 2012. Economists had expected exports to increase 4.0 percent and imports to rise 8.0 percent.

China’s trade data is volatile and has been distorted by speculative capital flows across the country’s border. Doubts about the accuracy of the figures had abated slightly since the customs office and top foreign exchange regulator launched a campaign in May to crack down on

fake export invoices.

Fake invoicing inflated China’s official import and export totals by US$75 billion in the first four months of 2013, local media reported on June 14, citing an internal review by China’s commerce ministry.

The customs data showed that exports to the United States, China’s country’s biggest export market, fell 5.4 percent, while exports to the European Union dropped 8.3 percent.

“The surprisingly weak June exports show China’s economy is facing increasing downward pressure on lacklustre external demand,” said Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai. “Exports are facing challenges in the second half of this year. The appreciation of the U.S. dollar and the Chinese government’s recent crackdown on speculative trade activities also put pressure on exports.”

China had a trade surplus of US$27.1 billion in June, the customs administration said, down 14.0 percent from a year earlier.

China’s reform-minded new leaders have shown a tolerance of slower growth, although they still need to avoid widespread job losses that could threaten social stability.

Economists expect data next week to show that annual growth in China for the April-June quarter slowed down to 7.5 percent.

A continued slide in growth could test leaders’ resolve to tolerate a short-term slowdown in the economy while pressing ahead with efforts to revamp the economy for the longer term.

Reuters

Cash crunch sparks panic among car dealers China’s money-market squeeze, which sent interbank borrowing costs soaring last month, may prompt auto dealers to cut vehicle orders and slow expansion plans to conserve cash, according to an industry group.

“The cash crunch has led to psychological panic among dealers over access to financing,” Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said in a telephone interview from Beijin. “So far, it hasn’t caused any real damage to the industry, but if the cash crunch continues, the impact will spread to auto dealers.”

Mr Luo’s concerns add to signs that the fallout from the cash squeeze has reached nonfinancial companies. China Rongsheng Heavy Industries Group Holdings Ltd earlier this month said it sought government financial support and is in talks with financial institutions about renewing credit facilities.

“It’s just the beginning – a liquidity crunch in the interbank market is set to ripple to economic activities on the ground,” said Xu Gao, Beijingbased chief economist at Everbright Securities Co Ltd, who formerly worked at the World Bank.

“We will see more and more pain in the real economy stemming from the crunch.”

About 28 percent of dealers surveyed said they felt “anxious” about their funds last month, up from 11 percent in May, the Chinese dealer group said in a statement yesterday.

Only 21 percent of respondents said they had ease of access to financing in June, down 27 percentage points from a month earlier, the survey showed.

Dealers in China typically rely on lines of credit from banks to finance their vehicle orders. They also take out loans to pay for construction of new outlets.

Reuters/Bloomberg News

Customs says June figures may reflect true trade picture

Regulator to turn over audit documents to U.S. T he Chinese securities watchdog said it is ready to turn over audit documents of a Chinese company listed in the United States to regulators there, signalling a second breakthrough in a two-year international dispute over accounting scandals.

The U.S. Securities and Exchange Commission (SEC) has been struggling to get papers out of China to investigate possible accounting fraud at dozens of Chinese companies listed on U.S. stock exchanges. China, for years, has resisted turning over documents because of state secrets and sovereignty concerns.

The China Securities Regulatory Commission (CSRC) is now ready to transfer audit papers to the SEC and the Public Company Accounting Oversight Board (PCAOB), a CSRC spokesman said, confirming local media reports. He did not identify the company whose audit documents the CSRC is turning over, or say when the handover will take place.

The gesture indicates China’s wi l l i n g n es s to i m p r o v e c r o s s border regulatory co-operation with the United States, coinciding with high-level bilateral economic talks in Washington. It could also

help restore confidence in U.S.listed Chinese companies and make it easier for firms in China to start tapping American capital markets again.

“If the SEC and CSRC are indeed singing from the same songbook on this and have found a way to resolve their stand-off over Chinese audit work papers, the capital markets will be safer for investors and a new era of cross-border comity between the world’s leading economies may have dawned,” said William McGovern, a partner at Kobre & Kim law firm in Hong Kong.

Reuters

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July April11, 19,2013 2013

Greater China

Rongsheng faces battle to stay afloat Shipbuilder is test case of how state will handle ailing sector

C

hina Rongsheng Heavy Industries Group Holdings Ltd is in talks with two coastal cities and government departments to secure financial assistance, as the nation’s shipowners association forecast a slump in vessel orders will run through next year.

The country’s largest shipyard outside state control is in discussions with Rugao and Nantong cities and some ministry-level departments related to the shipping industry, Rongsheng spokesman William Li said. The company said on July 5 it was seeking financial assistance from the government after a plunge in orders forced it to reduce production and “restructure” its workforce.

The shipping industry has been in a downturn for at least three years Zhang Shouguo, vice president, China Shipowner’s Association

“It will be difficult to see an obvious recovery before the end of next year” in demand for ships, Zhang Shouguo, vice president of the China Shipowner’s Association, said in a telephone interview. “The shipping industry has been in a downturn for at least three years.”

Rongsheng and other Chinese shipmakers are struggling as a global vessel glut makes orders more difficult to win and pushes down prices. China has also identified shipbuilding as an industry with overcapacity, for which authorities won’t approve new projects and will limit financing as part of Premier Li Keqiang’s campaign to reduce the economy’s reliance on exports and investment for growth.

“We expect shipyard failures could become a reality in China if current conditions persist,” Barclays Plc analysts Jon Windham and Esme Pau wrote in a report to clients on July 8. “Those yards not facing such harsh financial difficulties could increase their market and pricing power.” The Hong Kong-based analysts lowered their rating on Rongsheng’s shares to “underweight” from “equalweight”.

A third of the shipyards in China, the world’s biggest shipbuilding nation, may be shut in about five years, the China Association of National Shipbuilding Industry said

Shipbuilder in talks to secure financial support

last week. The order book of Chinese shipbuilders fell 23 percent at the end of May from a year earlier, according to data from the shipbuilders’ group.

Rongsheng said last week it may post a net loss for the first half. The Shanghai-based company reported an annual loss of 573 million yuan (US$93.5 million) last year and a 50 percent drop in revenue.

Overcapacity is at the “core” of the plunge in profits for China’s shipbuilders, the shipowner association’s Mr Zhang said. The group’s membership is made of the nation’s largest shipping companies, including China Ocean Shipping Group, China Shipping Group Co and Sinotrans Ltd. Bloomberg News

10 10

July 11, 2013 April 19, 2013

Asia

Koreas meet to seal deal on Kaeseong Businessmen crossed the border to inspect industrial facilities

About 100 S. Korean delegates entered North Korea to begin formal talks

N

orth and South Korea started talks yesterday on reopening a jointly run industrial zone, Seoul’s Unification Ministry said, with the complex seen as the last remaining symbol of cross-border reconciliation.

“The weekend marked the first step, but the difficult part starts now,” a South Korean Unification Ministry official said.

South Korean businesses were also to survey their factories at an industrial park in North Korea for the first time since April.

Twenty-three government negotiators crossed the demilitarised zone yesterday morning headed to the Kaeseong zone, about 10 kilometres (six miles) north of the border, the South’s Unification Ministry said.

Sixty businessmen also went to inspect facilities for rain damage and pack up completed goods they left behind when North Korea shut the industrial complex on April 8.

Three officials from each side started talks at 10.30 am about reopening the zone and preventing future shutdowns, following dialogue earlier this week that cleared the way

for the visit.

“We’ll do our best to ensure this meeting will lead to restoration of mutual trust and larger cooperation,” South Korea’s chief delegate Suh Ho told journalists before departure.

Leader Kim Jong-un has toned down his rhetoric since North Korea withdrew its workers from Kaeseong to protest tightened United Nations sanctions over its nuclear weapons programme and U.S.-South Korean military drills.

“The biggest clash will be on the North wanting to restart Kaeseong as soon as possible and the South wanting some sort of guarantee that the North will not unilaterally shut down the complex again in the future,” said Yang Moo-jin, a professor at University of North Korean Studies in Seoul. “Neither of the two Koreas can afford to have these talks break down and see tensions and risks escalate again.”

Restart Kaeseong Thirty-six administrators from Kaeseong’s management committee, KT Corp, Korea Electric Power Corp

and Korea Water Resources Corp joined the businessmen to Kaeseong to check phone, water, electricity and other management issues, according to the ministry.

The Koreas confirmed their desire to “restart Kaeseong when ready” after a 16-hour meeting on July 7, North Korea’s official Korean Central News Agency said.

We’ll do our best to ensure this meeting will lead to restoration of mutual trust and larger cooperation Suh Ho, South Korea’s chief delegate

The South also wants a pledge to safeguard uninterrupted movement in and out of the complex, as well as compensation for losses stemming from the suspension, a demand that the North is unlikely to accept.

“We will not accept circumstances reverting back to the way they were before the crisis,” Unification Ministry spokesman Kim Hyung-suk told reporters in Seoul on Tuesday.

Thus, the agreement doesn’t mean South Korea is “simply willing to go back to the way things have been,” Unification Ministry spokesman Kim Hyung Suk told reporters.

“Conditions have to be created for the complex to be run not only on a company level but also on the government level.”

North Korea has often reneged on its commitments, test-firing a missile last year and scrapping a plan for inter-Korean dialog last month, just days after proposing talks.

Closing Kaeseong deprived Pyongyang of a key source of hard currency. According to estimates, the North earned US$100 million each year from the industrial park.

AFP/Bloomberg News

S. Korean stocks trading at cheapest since 2009 Open economy vulnerable to ‘external shock’, analysts says

T

he lowest South Korean equity valuations since 2009 are spurring JPMorgan Asset Management and Charlemagne Capital Ltd to buy as earnings projections climb to a record and a weaker won boosts exporters.

The MSCI Korea Index lost 7.2 percent last month as speculation of reduced U.S. stimulus sparked outflows from emerging-market stocks. The Korea gauge fell to 1 times net assets, the lowest valuation since March 2009, even as analysts predict profits will rise 36 percent in the next 12 months to an all-time high. That compares with 16 percent for the MSCI Emerging Markets Index, data compiled by Bloomberg show.

While international investors

sold the most South Korean shares in almost two years in June and economic growth held at the slowest pace since 2009, JPMorgan Asset Management says exporters will benefit as the won slips from a more than four-year high against the yen.

Charlemagne’s Julian Mayo bought Samsung Electronics Co Ltd shares last month as the company’s price-to-book ratio declined to an 18-month low.

“Long-term investors should be buying Korean stocks,” Mr Mayo, who oversees US$2.7 billion in emerging markets assets as Charlemagne’s London-based co-chief investment officer, said in an interview. “If companies we like become cheaper, I expect we’ll buy more.”

The last time the MSCI Korea

Index’s valuation reached these levels four years ago, the gauge advanced more than 50 percent in six months.

The emerging markets gauge tumbled 13 percent from May 22 to yesterday after U.S. Federal Reserve chairman Ben S. Bernanke said policymakers may scale back bond purchases if the U.S. labour market improves. The MSCI Korea gauge dropped 9 percent, while the nation’s Kospi index slumped 8.2 percent.

South Korea’s open economy makes it vulnerable to “external shock,” according to Yoojeong Oh, a Singapore-based money manager at Aberdeen Asset Management Plc. Client withdrawals prevented Aberdeen from making new investments in South Korean stocks, Ms Oh said.

Foreigner investors pulled US$615.4 mln from the country’s stocks this month

International investors sold a combined US$14.3 billion of equities last month in the nine Asian emerging markets tracked by Bloomberg, led

by South Korean outflows of US$4.5 billion, which were the largest since August 2011. Foreigners pulled US$615.4 million from the nation’s stocks this month as stronger-thanestimated U.S. jobs data boosted the case for the Fed to curb so-called quantitative easing.

Bloomberg News

11 11

July April11, 19,2013 2013

Asia Tata Motors eyes Indonesia hub Tata Motors Ltd will make Indonesia a hub to export vehicles to Southeast Asia as the country is set to overtake Thailand as the region’s biggest car market. Tata Motors, which plans to start sales in Indonesia in two months, aims to sell enough vehicles in the country to make a local assembly factory feasible, Biswadev Sengupta, chief executive of the Indonesian unit, said in an interview with Bloomberg TV Indonesia. The volumes would also help boost content of locally made components to 40 percent, a level that is required to sell to members of the Asean at zero duty, he said.

BOJ easing forecasts cut as economy gains Central bank governor determined to avoid incremental steps

S. Korean gambler wins U.S. appeal A South Korean businessman who lost thousands of dollars in a California casino shouldn’t be taxed for each winning pull of a slot-machine lever, a U.S. appeals court found. Sang J. Park, who visited the casino while on vacation, can calculate taxes based on the outcome of sessions of gambling rather than on individual bets, the U.S. Court of Appeals in Washington said, ruling against the U.S. Internal Revenue Service and reversing a Tax Court decision. “Now, the foreigners will be allowed to file amended tax returns and claim refunds of the tax they’ve already paid,” Denis McDevitt, a lawyer for Mr Park, said.

India state-run banks urged to raise US$25bln India’s state-run banks must decide this month on ways to raise more than 1.5 trillion rupees (US$25 billion) by March 2018 to bolster risk buffers and meet new Basel III capital standards. “Banks have to look at options other than capital infusion by the government to meet the new Basel rules,” Rajiv Takru, banking secretary at India’s Finance Ministry, told Bloomberg. The government will need to infuse as much as 910 billion rupees into its majority-owned banks to help them comply with Basel III requirements, and to maintain the state holding, Reserve Bank of India governor Duvvuri Subbarao said in October.

Suntory looks at emerging markets Suntory Beverage & Food Ltd will start internal discussion on acquisition targets as early as September as it prepares to spend up to 500 billion yen (US$4.9 billion) after Asia’s biggest initial public offering this year. The company’s five-member mergersand-acquisitions team, led by a former Bank of America Corp. banker, will begin discussing more than 100 targets with its board members, Nobuhiro Torii, the company’s chief executive and president, said. “The specific areas we are looking for is emerging markets,” Mr Torii said.

Haruhiko Kuroda to refrain from stepping up stimulus

E

conomists are ditching forecasts for the Bank of Japan to further expand its record easing this year amid signs that a recovering economy may spur inflation.

Thirteen of 20 economists in a Bloomberg News survey 8 saw no extra loosening in the next six months, a reversal from a poll in May. The board will leave the scale of its bond purchases unchanged at the two-day meeting that started yesterday, according to every economist polled in the latest survey.

G overnor Haruhiko Kuroda spurned extra steps to limit bondmarket volatility in June, convincing more analysts and investors he will

refrain from stepping up stimulus following his opening salvo in April.

Forecasts due at the end of this week’s policy meeting will give the board’s latest view on how quickly he and Prime Minister Shinzo Abe can push the nation toward a 2 percent inflation goal.

“The BOJ is very reluctant to take any small steps,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute. “They are going to hold firm for a while unless something really big happens that forces them to change their price outlook.”

Prices, excluding the effect of a planned sales tax increase, will rise 1.9 percent in the year starting

AirAsia X makes modest debut after US$310 mln IPO Carriers plans to expand network and increase frequencies Yantoultra Ngui

A

irAsia X Bhd made a modest market debut yesterday after its IPO raised US$310 million to help the long-haul budget carrier expand amid strong growth prospects for travel to and from Southeast Asia.

“I think it looks like we priced it right,” chief executive Azran OsmanRani said at a news conference. He added that the Malaysia-based carrier would use the money to increase its fleet and seek out new destinations.

“Planes, planes, planes. Bigger network, more destinations, more frequencies,” Mr Azran said.

Seeking to emulate the success of Ryanair Holdings Plc and Easyjet Plc, Asian airlines have been particularly active in tapping equity markets for capital as competition to build up routes and fleets intensifies.

“AirAsia X has just gotten out from losses, and their track record is quite short,” said Ang Kok Heng, who helps manage the equivalent of US$428 million as chief investment officer at Phillip Capital Management

Sdn Bhd. “Some fundies also don’t like airline stocks as there are many risks involved, such as exposure to jet fuel prices volatility and terrorism,” he said.

The airline, launched in 2007, reported a net profit of 33.8 million ringgit (US$10.8 million) for the year ended December 31, 2012.

Shares in AirAsia X, which flies only international routes, were at 1.27 ringgit in early trade, up 1.6 percent from their IPO price of 1.25 ringgit each while the broader market was flat.

The long-haul unit of AirAsia Bhd, which competes with Singapore Airlines’ Scoot and Qantas Airways’ Jetstar is expected to show steady but not exponential growth as competition is increasing, analysts say.

Expansion plans AirAsia X’s expansion plans are just some of many for AirAsia Bhd, founded by chief executive Tony Fernandes.

This year Southeast Asia’s biggest budget carrier by passenger traffic

April 2015, according to the median estimate of the bank’s nine-member policy board in April.

In Japan, reports in the past two weeks showed better-than- expected industrial production and retail sales, and large manufacturers turning optimistic for the first time in two years.

The economy grew 2.9 percent in the April-June quarter, according to economist forecasts, after the biggest jump in a year in the previous three months.

Mr Abe is trying to put the nation on a sustainable growth path through his so-called three arrows of Abenomics – monetary and fiscal stimulus, and lowering barriers for investment and hiring. In January, the government announced a 10.3 trillion yen (US$102 billion) stimulus package.

While the central bank focuses on inflation excluding fresh food, the government plans to switch to using a different gauge that also leaves out energy costs, Reuters reported on Tuesday, citing an unidentified official. That would raise the bar for any Japanese exit from deflation, the news agency reported.

Mr Abe’s delay in implementing plans to loosen business rules helped extend a slide in stocks from a near-five-year high in May. A forecast victory for the ruling Liberal Democratic Party-led coalition in an upper-house election on July 21 would help the prime minister push through his agenda. The grouping is set to exceed the 121-seat threshold needed for a majority in the chamber, according to a survey published by Yomiuri newspaper this week.

“The economy is proving Kuroda right,” said Takeshi Minami, chief economist at Norinchukin Research Institute Co. in Tokyo. “This is the first time in a while that the BOJ doesn’t have to boost stimulus because the economy is moving in line with their expectations” Bloomberg News

bought 49 percent of Zest Airways, seeking growth in the Philippines and announced aggressive plans to increase its presence in India’s domestic market.

Its Indonesian unit Indonesia AirAsia also plans to list this year.

Expansion in Japan, however, has faltered after it and ANA Holdings terminated their joint venture last month, with AirAsia citing disagreements over how to manage the business.

The IPOs from AirAsia’s units may also reflect a desire by Mr Fernandes to please some of his shareholders.

“It’s more to do with certain shareholders who want their investments more liquid,” said a financial source declining to be identified as he was not authorised to talk to the media. “In addition, he can now borrow against his shares that have a market value now,” the source said.

Other Asian airline IPOs in the offing include one from short-haul carrier Bangkok Airways which is seeking to raise between US$200 million and US$300 million this year, according to Thomson Reuters publication IFR. AirAsia’s main rival, Indonesia’s Lion Air, is looking to go public in 2015 while China budget carrier Spring Airlines also has its eye on a listing.

Thailand’s Nok Airlines Pcl made its market debut last month after raising around US$155 million. After jumping its first few days of trade, it has since given up gains to trade close to its IPO price. Also this year, Malaysian Airline System Bhd conducted a US$1 billion rights issue.

Reuters

12 12

July 11, 2013 April 19, 2013

Markets Hang Seng Index NAME

PRICE

DAY %

VOLUME

34.05

2.252252

28979974

ALUMINUM CORP-H

2.39

0.8438819

8712700

BANK OF CHINA-H

3.12

1.960784

253265381

4.9

2.296451

32356856

BANK EAST ASIA

27.9

1.454545

1655956

BELLE INTERNATIO

10.8

1.503759

19654453

23.75

1.713062

11437391

CATHAY PAC AIR

13.26

-0.748503

CHEUNG KONG

106.2

2.608696

CHINA COAL ENE-H

4.03

2.025316

59940200

CHINA CONST BA-H

5.35

1.904762

261376616

AIA GROUP LTD

BANK OF COMMUN-H

BOC HONG KONG HO

PRICE

DAY %

VOLUME

CHINA UNICOM HON

10.4

-0.7633588

14271633

CITIC PACIFIC

8.23

-0.6038647

5787955

PRICE

DAY %

POWER ASSETS HOL

68.8

0.2915452

VOLUME 2247432

SANDS CHINA LTD

38.1

4.67033

13455257

10.64

0.5671078

6902713

100

1.265823

3574695

94

0.8042895

1532200

CLP HLDGS LTD

62.9

0.5595524

2349630

13.1

-0.4559271

50487074

COSCO PAC LTD

9.79

-2.002002

9144591

SWIRE PACIFIC-A

ESPRIT HLDGS

11.46

-2.881356

7907085

TENCENT HOLDINGS

304.4

0.995355

3036046

HANG LUNG PROPER

25.75

0.5859375

4063873

TINGYI HLDG CO

19.44

-2.8

9811900

2596200

HANG SENG BK

114.6

0.1748252

1284395

WANT WANT CHINA

10.56

0.1897533

11366707

6108252

HENDERSON LAND D

47.7

0.845666

4043127

WHARF HLDG

66.05

1.850424

4228361

HENGAN INTL

79.8

-0.25

1261500

19.46

0.3092784

6399821

17.76

1.369863

39953776

CHINA MERCHANT

22.65

-0.8752735

2141913

HONG KG CHINA GS HONG KONG EXCHNG

116.9

0.4295533

3291902

HSBC HLDGS PLC

83.75

-0.1787843

10359343

84.15

0.1785714

6973004

4.8

1.265823

334582424

11.22

1.814882

20232403

28.6

1.060071

2351984

81.1

0.996264

16147134

HUTCHISON WHAMPO

20.25

1.656627

14719039

IND & COMM BK-H

CHINA PETROLEU-H

5.43

2.45283

89958383

LI & FUNG LTD

CHINA RES ENTERP

23.8

-1.652893

3523800

MTR CORP

CHINA OVERSEAS

NAME

CNOOC LTD

CHINA LIFE INS-H CHINA MOBILE

NAME

CHINA RES LAND

20.55

-0.2427184

6710000

NEW WORLD DEV

10.96

3.007519

24346730

CHINA RES POWER

20.15

4.72973

9134125

PETROCHINA CO-H

9.12

1.55902

99659924

CHINA SHENHUA-H

20.2

4.016478

20097175

PING AN INSURA-H

50.2

2.763562

16606251

SINO LAND CO SUN HUNG KAI PRO

MOVERS

32

12

2 21000

INDEX 20904.56 HIGH

20966.51

LOW

20318.46

52W (H) 23944.74 (L) 18710.58984

20310

8-July

10-July

Hang Seng China Enterprise Index NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.08

1.650165

116654581

AIR CHINA LTD-H

5.19

1.764706

11357700

ALUMINUM CORP-H

2.39

0.8438819

8712700

ANHUI CONCH-H

20.6

0.243309

15643300

BANK OF CHINA-H

3.12

1.960784

NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

CHINA PACIFIC-H

24.8

2.904564

10264457

YANZHOU COAL-H

5.49

5.780347

62747478

CHINA PETROLEU-H

5.43

2.45283

89958383

ZIJIN MINING-H

1.52

0.6622517

85363710

CHINA RAIL CN-H

6.1

1.497504

6868000

ZOOMLION HEAVY-H

4.98

-1.775148

22913526

CHINA RAIL GR-H

3.24

1.886792

14951230

11.68

2.276708

3632996

253265381

CHINA SHENHUA-H

20.2

4.016478

20097175

CHINA TELECOM-H

4.9

2.296451

32356856

3.8

1.876676

42125284

28.35

0.1766784

2711694

DONGFENG MOTOR-H

9.63

0.5219207

15795800

CHINA CITIC BK-H

3.48

2.654867

30002637

GUANGZHOU AUTO-H

6.94

-0.4304161

11184399

CHINA COAL ENE-H

4.03

2.025316

59940200

HUANENG POWER-H

7.75

0

17053900

CHINA COM CONS-H

5.39

0.1858736

26362542

IND & COMM BK-H

4.8

1.265823

334582424

CHINA CONST BA-H

5.35

1.904762

261376616

JIANGXI COPPER-H

12.04

-1.954397

32349124

BANK OF COMMUN-H BYD CO LTD-H

3.27

0.3067485

7316600

PETROCHINA CO-H

9.12

1.55902

99659924

17.76

1.369863

39953776

PICC PROPERTY &

8.61

1.533019

10820255

CHINA LONGYUAN-H

8.19

2.760351

19515850

PING AN INSURA-H

50.2

2.763562

16606251

CHINA MERCH BK-H

12.9

1.735016

25500535

SHANDONG WEIG-H

7.75

-1.898734

8530000

CHINA MINSHENG-H

7.62

1.329787

77159457

SINOPHARM-H

CHINA NATL BDG-H

6.37

2.907916

38054282

TSINGTAO BREW-H

15.22

2.010724

4158000

WEICHAI POWER-H

CHINA COSCO HO-H CHINA LIFE INS-H

CHINA OILFIELD-H

18.44

-0.3243243

4166107

55.8

0.0896861

1440900

22.95

1.101322

NAME

ZTE CORP-H

MOVERS

34

5

1 9240

INDEX 9215.08 HIGH

9229.45

LOW

8940.32

52W (H) 12354.22 (L) 8640.85

8930

8-July

1390000

10-July

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.51

0.8032129

73986954

CHONGQING CHAN-A

9.29

4.031355

25118412

QINGHAI SALT-A

18.14

5.772595

7635245

AIR CHINA LTD-A

3.97

2.302449

13005461

CITIC SECURITI-A

10.2

3.343465

98545671

RISESUN REAL -A

15.28

6.555091

9217632

ALUMINUM CORP-A

3.27

3.481013

21348770

CSR CORP LTD -A

3.47

3.58209

31382615

SAIC MOTOR-A

13.49

2.429765

28155824

ANHUI CONCH-A

13.39

2.135774

26726356

DAQIN RAILWAY -A

5.85

2.992958

25001209

SANAN OPTOELEC-A

18.66

9.571345

22127248

BANK OF BEIJIN-A

7.71

3.212851

17815537

DATANG INTL PO-A

5.18

-1.70778

18699039

SANY HEAVY INDUS

7.13

4.698972

25267046

BANK OF CHINA-A

2.65

0.3787879

15413089

EVERBRIG SEC -A

10.38

4.426559

20696170

SHANDONG DONG-A

41.65

-2.023053

9111306

BANK OF COMMUN-A

4.09

0.7389163

78530912

GD MIDEA HOLDI-A

12.93

1.730921

15927545

SHANDONG GOLD-MI

21.92

1.434521

24238862

GD POWER DEVEL-A

2.29

2.232143

57943816

SHANG PHARM -A

11.07

2.310536

6054330

7.2

6.038292

49551362

SHANG PUDONG-A

8.11

2.39899

60829122

NAME

BAOSHAN IRON & S

NAME

NAME

3.98

1.015228

19905829

BEIJING SL -A

61.03

2.313495

2137565

GEMDALE CORP-A

BEIJING TONGRE-A

22.58

1.11957

5574826

GF SECURITIES-A

11.54

4.813806

23214481

SHANGHAI ELECT-A

GREE ELECTRIC

25.88

1.72956

10944314

SHANXI LU'AN -A

BYD CO LTD -A

36

3.063269

14554113

3.27

2.1875

4008926

11.67

6.381039

22791419

5.26

4.572565

46880298

5

1.214575

42079578 4235824

CHINA AVIC ELE-A

24.17

0.7923269

3077008

GUANGHUI ENERG-A

10.47

4.90982

63519121

SHENZEN OVERSE-A

CHINA CITIC BK-A

3.64

2.247191

15067767

HAITONG SECURI-A

9.95

6.303419

135225348

SUNING COMMERC-A

CHINA CNR CORP-A

3.85

4.336043

42430576

HANGZHOU HIKVI-A

19

4.539202

15031094

TASLY PHARMAC-A

44.04

0.1591995

CHINA COAL ENE-A

4.87

2.959831

12214294

HENAN SHUAN-A

41.86

0.4800768

4294098

TSINGTAO BREW-A

39.56

0.05058169

1194765

CHINA CONST BA-A

4.39

-0.4535147

19284110

HONG YUAN SEC-A

8.05

6.90571

127300839

WANHUA CHEMIC-A

16.76

1.575758

11696849

CHINA COSCO HO-A

2.95

1.724138

7951797

HUATAI SECURIT-A

8.17

4.475703

29453191

WEICHAI POWER-A

17.53

3.727811

5932265

CHINA EAST AIR-A

2.46

2.074689

8018772

HUAXIA BANK CO

8.88

2.65896

16348913

WULIANGYE YIBIN

19.95

1.837672

10093552

CHINA EVERBRIG-A

2.83

1.798561

44401139

IND & COMM BK-A

3.93

-0.5063291

81234143

YANZHOU COAL-A

9.88

10.02227

17683284

9.45

3.504929

81554354

YUNNAN BAIYAO-A

94.75

0.2221282

1143001

74205211

ZHONGJIN GOLD

9.33

1.74482

22154010

ZIJIN MINING-A

2.57

1.181102

55651310

ZOOMLION HEAVY-A

5.14

3.006012

57273507

13.21

2.721617

50185346

CHINA INTERNAT-A

30.97

3.891312

5003105

INDUSTRIAL BAN-A

CHINA INTL MAR-A

10.2

3.658537

7409934

INNER MONG BAO-A

23.24

9.985802

13.3

2.307692

10137778

INNER MONG YIL-A

34.27

-0.3489386

9384668

CHINA MERCH BK-A

11.32

1.433692

41429765

INNER MONGOLIA-A

4.05

4.92228

70022877

CHINA MERCHANT-A

10.66

4.305284

29396992

JIANGSU HENGRU-A

28.2

1.84182

4941134

CHINA MERCHANT-A

26.8

8.898822

20852288

JIANGSU YANGHE-A

51.48

2.611122

3953146

CHINA MINSHENG-A

8.6

2.380952

94082229

JIANGXI COPPER-A

16.3

5.433376

13766844

CHINA NATIONAL-A

9.98

6.113769

32043392

JINDUICHENG -A

8.25

4.298357

9784446

CHINA OILFIELD-A

14.12

2.840495

6849853

KANGMEI PHARMA-A

20.54

-0.339641

18303104

CHINA PACIFIC-A

15.92

3.376623

28962927

KWEICHOW MOUTA-A

193.84

0.9320489

3324496

CHINA PETROLEU-A

4.61

6.466513

184187228

LUZHOU LAOJIAO-A

23.88

1.186441

8348534

CHINA RAILWAY-A

4.09

2.763819

15032004

METALLURGICAL-A

1.6

1.910828

42005207

CHINA RAILWAY-A

2.39

2.575107

21733804

NARI TECHNOLOG-A

14.12

2.023121

22922756

6437890

NINGBO PORT CO-A

2.04

1.492537

8979249

8.09

-0.1234568

24733297

9.4

4.444444

74724160

CHINA LIFE INS-A

CHINA RESOURCE-A CHINA SHENHUA-A CHINA STATE -A

29.6

0

16.23

2.656546

12753226

PETROCHINA CO-A

3.23

3.858521

83405982

PING AN BANK-A

3.13

2.622951

74795304

PING AN INSURA-A

34.34

1.778305

38907868

CHINA VANKE CO-A

10.28

6.418219

94910142

POLY REAL ESTA-A

10.67

5.434783

48713428

CHINA YANGTZE-A

6.96

-0.143472

11299180

QINGDAO HAIER-A

11.29

2.450091

5177108

PRICE DAY %

Volume

NAME

PRICE DAY %

Volume

CHINA UNITED-A

ZTE CORP-A

MOVERS 281

12

7 2230

INDEX 2224.065 HIGH

2224.06

LOW

2156.02

52W (H) 2791.303 (L) 2023.171

2150

8-July

10-July

FTSE Taiwan 50 Index NAME ACER INC ADVANCED SEMICON ASIA CEMENT CORP ASUSTEK COMPUTER

22.7

NAME

PRICE DAY %

Volume

1.339286

11420488

FORMOSA PLASTIC

72.7

0.5532503

9294507

TAIWAN MOBILE CO

109.5

0

25.25 -0.3944773

16874535

FOXCONN TECHNOLO

72.2

0.2777778

6298210

TPK HOLDING CO L

391.5

4.539386

8838506

38.95

1.697128

40589059

TSMC

106

0

22082402

UNI-PRESIDENT

59.4

0.5076142

7815935

UNITED MICROELEC

13.9

-2.45614

80300744

36.2

0.5555556

3311911

FUBON FINANCIAL

2925323

262

0.3831418

5685002

HON HAI PRECISIO

75.9

1.879195

47903827

AU OPTRONICS COR

10.65

1.428571

77146933

HOTAI MOTOR CO

376.5

5.462185

581524

CATCHER TECH

146.5

0.6872852

8014068

HTC CORP

191

1.32626

19115925

WISTRON CORP

27.6 -0.7194245

12817875

CATHAY FINANCIAL

41.75

0.3605769

34983948

HUA NAN FINANCIA

16.8

0.9009009

4448207

YUANTA FINANCIAL

15.5

0.9771987

19208049

CHANG HWA BANK

17.1

0.8849558

15309255

LARGAN PRECISION

950

2.260495

2348272

YULON MOTOR CO

48.75

1.77453

2729988

CHENG SHIN RUBBE

97.4

2.418507

13388011

LITE-ON TECHNOLO

50.6

-1.937984

9638298

CHIMEI INNOLUX C

14.85

0

45450413

MEDIATEK INC

8.42

0.9592326

29066266

MEGA FINANCIAL H

CHINA STEEL CORP

24.05

1.476793

14634491

NAN YA PLASTICS

CHINATRUST FINAN

CHINA DEVELOPMEN

351.5 -0.5657709 24.3

5324841

2.748414

68276337

59 -0.6734007

6174514

18.95

1.88172

89311869

PRESIDENT CHAIN

208 -0.2398082

CHUNGHWA TELECOM

99.4

0

12725924

QUANTA COMPUTER

66.8

2.611367

COMPAL ELECTRON

18.6

-1.32626

20991508

SILICONWARE PREC

37.2

-2.105263

9155810

DELTA ELECT INC

147

0.6849315

5786819

SINOPAC FINANCIA

14.7

4.626335

28908151

FAR EASTERN NEW

32.7

1.081917

4884793

SYNNEX TECH INTL

38.25

-2.048656

6762544

FAR EASTONE TELE

80

-1.840491

3855173

TAIWAN CEMENT

36.95

1.790634

9349878

961641 5732530

FIRST FINANCIAL

17.8

0.5649718

8882061

TAIWAN COOPERATI

16.6

0.3021148

11162931

FORMOSA CHEM & F

73.3

1.103448

5815102

TAIWAN FERTILIZE

72.4

0.5555556

1938495

FORMOSA PETROCHE

73.8 -0.2702703

1236602

TAIWAN GLASS IND

27.05

-1.096892

1054791

MOVERS

36

10

4 5580

INDEX 5543.01 HIGH

5571.44

LOW

5429.78

52W (H) 5896.71 (L) 4719.96

5420

8-July

10-July

13 13

July April11, 19,2013 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 36.6 36.4

58.1

20.8

57.3

20.6

56.5

20.4

36.2 36.0

Max 36.55

average 36.314

Min 35.95

Last 36.35

35.8

Max 58.1

average 56.189

Min 55.7

55.7

Last 56

38.2

18.0

38.0

17.9

37.8

Min 37.2

Last 38.1

37.2

Max 18

average 17.81

Commodities

METALS

PRICE

WTI CRUDE FUTURE Aug13

104.66

BRENT CRUDE FUTR Aug13 GASOLINE RBOB FUT Aug13 GAS OIL FUT (ICE) Aug13

DAY %

YTD %

(H) 52W

Min 17.66

Last 18

(L) 52W

1.091471071

11.62542662

104.8700027

86.29000092

108.31

0.46377887

1.347431459

115.1699982

96.70999908

296.84

1.449077239

6.70788698

311.8400097

244.7299957

913.75

0.605560143

0.522552255

983.5

829.25

NATURAL GAS FUTR Aug13

3.652

-0.136724091

1.727019499

4.525000095

3.354000092

NY Harb ULSD Fut Aug13

299.5

0.311484744

-0.070067732

320.449996

272.6999998

Gold Spot $/Oz

1254.2

0.4791

-24.6482

1796.08

1180.57

Silver Spot $/Oz

19.2155

0.4354

-36.1823

35.365

18.2208

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

1365

0.3101

-10.0642

1742.8

1294.18

701.28

1.1452

0.2315

786.5

553.75

1790

-0.721020521

-13.65171249

2200.199951

1758

LME COPPER 3MO ($)

6730

-1.464128843

-15.14310932

8422

6602

LME ZINC

1869

-0.585106383

-10.14423077

2230

1779

13325

-0.78183172

-21.8933177

18920

13205

15.185

-0.065811122

-1.428107757

16.47500038

14.60000038

522

0.047915668

-12.96373489

665

489.5

675

-0.36900369

-16.35687732

905.75

652.25

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Sep13 CORN FUTURE

Dec13

WHEAT FUTURE(CBT) Sep13

17.6

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

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

1276.5

0.019588639

-2.014968336

1409.75

1186.5

COFFEE 'C' FUTURE Sep13

122.1

-0.122699387

-19.90816661

203.8499908

117.0999985

NAME

16.23999977

ARISTOCRAT LEISU

74.34999847

CROWN LTD

SUGAR #11 (WORLD) Oct13

16.33

COTTON NO.2 FUTR Dec13

85.75

-0.06119951 -0.267504071

-18.59421735 8.902717805

22.8599987 89.55999756

World Stock Markets - Indices

20.6

20.4

20.2

Max 20.6

average 20.195

Min 20

Last 20.05

20.0

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

0.9213 1.4899 0.9687 1.2817 100.04 7.9895 7.7569 6.1345 60.1225 31.26 1.2749 30.054 43.427 9970 92.172 1.24168 0.86026 7.862 10.2392 128.22 1.03

0.6775 0.2894 -0.1136 -0.3499 1.1495 0.0013 -0.0013 -0.0766 0.0374 0.1599 0.3216 0.1863 0.0414 0.1304 0.4633 0.2344 0.6463 0.4795 0.3682 1.5052 0

-11.2257 -7.8944 -5.5022 -2.8279 -13.9344 -0.0789 -0.0812 1.5665 -8.5284 -2.1753 -4.1964 -3.3972 -5.5772 -1.7753 -3.0866 -2.7543 -5.2124 4.5218 2.844 -11.4257 -0.0097

1.0625 1.6381 0.9972 1.3711 103.74 8.0111 7.7664 6.3964 61.2125 32 1.286 30.228 44.181 10174 105.433 1.265 0.88151 8.4957 10.9254 133.8 1.032

0.9037 1.4814 0.9022 1.2043 77.13 7.9818 7.7498 6.1203 51.3863 28.56 1.2152 28.913 40.54 9433 79.408 1.20054 0.77553 7.7018 9.6245 94.12 1.0289

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

4.22

-1.860465

33.96825

4.49

2.29

VOLUME CRNCY 1376641

12.82

1.104101

20.14995

13.75

8.28

1678460

AMAX HOLDINGS LT

1.06

-1.851852

-24.28571

1.72

0.75

144750

BOC HONG KONG HO

23.75

1.713062

-1.452284

28

22.6

11437391

CENTURY LEGEND

0.305

-4.6875

15.09435

0.42

0.22

6500

5.6

3.703704

-6.510848

6.74

2.89

100611

CHINA OVERSEAS

20.25

1.656627

-12.33766

25.6

16.761

14719039

CHINESE ESTATES

13.66

0

12.61876

14.12

8.031

0

CHOW TAI FOOK JE

9.16

12.94698

-26.36656

13.4

7.44

27789900

EMPEROR ENTERTAI

2.56

-3.759398

35.44974

3.07

1.34

2725000

FUTURE BRIGHT

2.03

0.4950495

67.48814

2.76

0.954

5779000

GALAXY ENTERTAIN

36.35

2.250352

19.76936

44.95

16.98

16417484

114.6

0.1748252

-3.454083

132.8

104.2

1284395

25

1.010101

-24.81203

35.3

20.727

2713500

83.75

-0.1787843

3.013526

90.7

61.1

10359343

HUTCHISON TELE H

4.26

1.187648

19.66292

4.66

2.98

3283329

LUK FOOK HLDGS I

19.74

7.399347

-19.09836

30.05

16.16

8002079

MELCO INTL DEVEL

13.28

-0.5988024

47.39178

18.18

5.12

9455000

CHEUK NANG HLDGS

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

US

15300.34

0.4968902

16.75959

15542.4

12471.49

NASDAQ COMPOSITE INDEX

US

3504.263

0.5576167

16.05388

3532.038

2810.8

FTSE 100 INDEX

GB

6516.98

0.0598795

10.4983

6875.62

5478.02

HANG SENG BK

DAX INDEX

GE

8044.93

-0.1591015

5.682053

8557.86

6324.53

HOPEWELL HLDGS HSBC HLDGS PLC

NIKKEI 225

JN

14416.6

-0.3890029

38.68543

15942.6

8328.019531

HANG SENG INDEX

HK

20904.56

1.071169

-7.734324

23944.74

18710.58984

CSI 300 INDEX

CH

2224.065

2.8389

-11.84672

2791.303

2023.171

TAIWAN TAIEX INDEX

TA

8011.69

0.5082058

4.054678

8439.15

6922.73

MGM CHINA HOLDIN

20.7

1.970443

55.89369

21.6

9.509

4775654

KOSPI INDEX

SK

1824.16

-0.3381867

-8.657269

2042.48

1758.99

MIDLAND HOLDINGS

3.07

5.498282

-17.02703

5

2.68

13410000

S&P/ASX 200 INDEX

AU

4901.356

0.4035927

5.429307

5249.6

4062.3

ID

4483.897

1.818816

3.873572

5251.296

3963.469

FTSE Bursa Malaysia KLCI

MA

1768.03

0.08717853

4.682204

1826.22

1590.67

NZX ALL INDEX

NZ

975.646

0.6875243

10.61082

998.487

PHILIPPINES ALL SHARE IX

PH

3858.65

-0.4530198

4.316593

4571.4

JAKARTA COMPOSITE INDEX

20.2

Macau Related Stocks

SOYBEAN FUTURE Nov13

NAME

Last 20.7

Currency Exchange Rates

NAME ENERGY

Min 20.2

17.7

37.4 average 37.766

average 20.364

17.8

37.6

Max 38.15

Max 20.7

NEPTUNE GROUP

0.163

-4.117647

7.236846

0.23

0.089

20265000

NEW WORLD DEV

10.96

3.007519

-8.818639

15.12

9.38

24346730

SANDS CHINA LTD

38.1

4.67033

12.22386

43.7

20.65

13455257

SHUN HO RESOURCE

1.42

0

1.428573

1.67

1.03

0

767.748

SHUN TAK HOLDING

3.46

-0.8595989

-17.42244

4.65

2.62

2724000

3410.76

SJM HOLDINGS LTD

7209326

HSBC Dragon 300 Index Singapor

SI

594.13

-0.57

-4.34

NA

NA

STOCK EXCH OF THAI INDEX

TH

1384.69

-1.000937

-0.5201492

1649.77

1172.92

HO CHI MINH STOCK INDEX

VN

484.43

-0.2203913

17.08843

533.15

372.39

Laos Composite Index

LO

1295.07

-2.749159

6.610299

1455.82

987.62

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

18

2.622577

1.421834

22.382

12.995

SMARTONE TELECOM

12.32

-0.3236246

-12.5

17.38

12.3

1410000

WYNN MACAU LTD

20.05

-0.9876543

-4.295946

26.5

14.62

11199712

ASIA ENTERTAINME

4.13

-2.132701

46.73056

4.7647

2.2076

215171

BALLY TECHNOLOGI

58.99

0.5454236

31.93917

59.26

41.74

334626

BOC HONG KONG HO

3.09

0

0.651468

3.6

2.85

6500

GALAXY ENTERTAIN

4.67

-2.505219

17.63224

5.77

2.25

45464

INTL GAME TECH

17.21

0.2329645

21.45377

18.81

10.92

3958523

JONES LANG LASAL

93.71

2.158509

11.63926

101.46

61.39

247336

LAS VEGAS SANDS

53.11

1.200457

15.05633

60.54

32.6127

5198327

MELCO CROWN-ADR

21.54

-3.060306

27.90974

25.2

9.13

7579459

MGM CHINA HOLDIN

2.55

0

37.83784

2.71

1.36

2700

MGM RESORTS INTE

15.44

-0.834939

32.64604

15.95

8.83

8321283

SHFL ENTERTAINME

17.8

-0.9460211

22.75862

18.57

12.35

528448

SJM HOLDINGS LTD

2.3

-2.542373

0.9827809

2.9481

1.7255

300

126.59

-0.307135

12.53445

144.99

84.4902

1411964

WYNN RESORTS LTD

AUD HKD

USD

14 14

July 11, 2013 April 19, 2013

Opinion

IMF report decoded: Fed may bring doomsday Evan Soltas Contributor to the Ticker

Christine Lagarde said recently that the world can cope with a Fed stimulus withdrawal – but only if done responsibly

T

he International Monetary Fund lowered its forecasts for global growth in an update to its annual World Economic

Outlook report. It’s worried.

Growth in world output will be 0.2 percent lower in 2013 and 2014 than it had projected in April, the IMF

said. All but three countries had their growth forecasts reduced, with the sharpest rebukes going to the euro area and emerging markets.

The theme of the update is “growing pains,” and the key message is a warning to the U. S. and the Federal Reserve, in particular: Your monetary tightening, if done too quickly, could bring the world economy to its knees. And so far, we don’t like what we see.

Of course, the IMF would get in trouble if it actually wrote that. So it says it a little more politely, warning that U.S. policy is creating a new “downside risk to global growth prospects”.

The IMF is concerned about “possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the United States leads to sustained capital flow reversals.”

The problem the IMF sees is that the Fed may want to tighten monetary policy, but the rest of the world (which still faces weak demand) isn’t ready for it to do so. A tightening in the U.S. would

put those countries in a bind: if they tighten, they weaken their domestic economies; if they don’t, investment capital will depart for higher returns in dollar-denominated assets.

The IMF fears, too, that turmoil in financial markets over the past month – mostly brought on by the Fed’s changing plans – is costly in itself. What it hopes was a “one-time repricing of risk” was a setback to growth.

And if markets continue to rumble, it warned, it is prepared to lower growth forecasts even more in its next full economic outlook report in October. “If underlying vulnerabilities lead to additional portfolio shifts, further yield increases, and continued higher volatility, the result could be sustained capital flow reversals and lower growth in emerging economies,” the IMF said.

To prevent that, it wants to see two things from the Fed: sustained monetary stimulus until the recovery is “well established” and “clear communication” on the exit.

The implication is the Fed is doing neither one well.

Christine Lagarde, the IMF’s managing director, said recently that the world can cope with a Fed stimulus withdrawal – but only if done responsibly.

It’s not just financial markets that are skittish.

Bloomberg View

Libor’s new manager has its own conflicts Paula Dwyer

T

Member of the Bloomberg View editorial board

he really big news in financial markets yesterday was the U.K.’s decision to hand over administration of the London interbank offered rate to the parent of the New York Stock Exchange. The price tag: one pound. The conflicts of interest involved: countless.

The scandal-plagued benchmark sets the interest rates for mortgages, corporate loans and derivatives – more than US$300 trillion in contracts worldwide. It was mismanaged by the British Bankers’ Association, on whose watch traders rigged Libor to make their positions more profitable.

Barclays Plc, UBS AG and Royal Bank of Scotland Group Plc have been fined more than US$2.5 billion by U.S. and U.K. regulators and more than a dozen other firms are under investigation worldwide.

As of January, Libor will be run by NYSE Euronext, the owner of the iconic stock exchange and a London-based futures exchange that happens to be a dominant player in interest-rate derivatives. A new owner was essential. But one that runs one derivatives exchange and is about to be subsumed by another, IntercontinentalExchange Inc? That strikes me as problematic. NYSE Euronext operates Liffe, Europe’s secondlargest derivatives exchange. Its interest-rate futures and other derivative instruments, some of which use Libor and related benchmarks as a component, are among the most heavily traded in the world.

Handing off the benchmark to owners whose profitability depends on Libor’s continued credibility isn’t necessarily a bad idea. But it does give Libor’s

new owner a billion reasons not to upset the status quo, and the status quo isn’t right.

The rate is now calculated by a poll carried out daily by Thomson Reuters Corp for the British bankers’ group. It asks institutions to estimate how much it would cost to borrow from each other for different periods and in different currencies. The top and bottom quartiles of quotes are excluded, and those left are averaged and published for individual currencies before noon in London.

Thesystemdependedheavily on self-reported estimates from banks that had huge incentives to manipulate rates. For now, the new owners plan to keep this system, with some additional safeguards, including subjecting banks’ rate reporters to internal compliance rules.

What is needed, though, is

a whole new way of calculating Libor. As Bloomberg View has advocated, a more transparent system would have banks report actual borrowing transactions, against which the public could check the truthfulness of the banks’ estimates. (Full disclosure: Bloomberg LP, parent of Bloomberg News, proposed a Libor alternative, while Thomson Reuters proposed taking it over.

Both were rejected in favour of NYSE Euronext.)

Creating a new method would be costly, timeconsuming and controversial. If you run derivatives exchanges that trade instruments that depend on the continuation of the existing method, your resistance to change will be enormous. And that’s one reason why you shouldn’t expect to see improvements to Libor anytime soon.

If you run derivatives exchanges that trade instruments that depend on the continuation of the existing method, your resistance to change will be enormous

Bloomberg View

editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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15 15

July April11, 19,2013 2013

Opinion

Koreans find breaking up wires with chaebol hard to do Business

Leading reports from Asia’s best business newspapers

Asahi Shimbun With a pro-nuclear administration chomping at the bit, Japan is expected to bring at least one nuclear reactor back online as early as winter, after the two already running are shut down in autumn. Four electric power companies on Monday applied to the Nuclear Regulation Authority for restarting 10 reactors at five plants based on the new safety standards incorporating lessons from the 2011 Fukushima nuclear disaster. The No. 3 reactor at Shikoku Electric Power Co.’s Ikata plant in Ehime Prefecture is expected to be the first to get restarted.

William Pesek

Bloomberg View columnist

just competitiveness but also national growth prevailed.

By week’s end, even Park, the supposed conglomerate slayer, was musing publicly about the central role the chaebol must play in fuelling growth this year.

Extreme concentration

Jakarta Globe The Indonesian government gave U.S. mining giant Freeport McMoRan Copper and Gold the go-ahead of resume operations at its Grasberg mine after a deadly tunnel collapse suspended operations for nearly two months. “From everything that has been done, that has been taken into consideration, including pressure from the community and local government, [we] have decided ok, it’s safe,” Deputy Energy and Mineral Resources Minister Susilo Siswoutomo said in a statement. It will be another month before Freeport’s underground mines reach production quotas, Freeport said.

Times of India India will inject as much as 140 billion rupees (US$2.3 billion) into state-run banks by the end of September to strengthen their risk buffers and bolster credit growth as the economy slows. IDBI Bank Ltd, Bank of Maharastra, Dena Bank and Indian Overseas Bank are among the governmentcontrolled lenders that will be provided with equity capital to bring their ratios above 8 percent, Rajiv Takru, banking secretary at the Finance Ministry, said. The fresh capital will increase the ability to withstand risk at staterun banks, which account for three-fourths of India’s lending.

Taipei Times Taiwanese exports last month grew from a year earlier for the second consecutive month, mainly on the back of steady demand from Asian markets, the Ministry of Finance said.

Outbound shipments totalled US$26.48 billion last month, up 8.6 percent from a year earlier and 0.5 percent from a month earlier, the ministry said in its monthly report. Exports in the first six months totalled US$150.48 billion, an increase of 2.4 percent from a year ago, with annual growth in the second quarter also averaging 2.4 percent, the report said.

Lee Jay Hyun, chairman of CJ Group, centre

E

veryone loves a good perp walk. For South Koreans, Lee Jayhyun’s made great theatre.

The sight of Lee – chairman of the conglomerate CJ Group and grandson of Samsung Electronics Co Ltd’s legendary founder – being led away by police last week on embezzlement and taxevasion charges has been portrayed as an early victory for President Park Geun-hye’s five-month-old government.

The arrest supposedly shows that Park is serious about reining in the chaebol – family-owned behemoths that continue to dominate Asia’s fourth-biggest economy and hog much of the nation’s wealth.

The reality, of course, is far more complicated.

Past attempts to bring tycoons to heel have also been greeted with great fanfare, only to fizzle out. In April 2008, Lee’s uncle, Samsung chairman Lee Kun-hee, resigned after being charged with criminal tax evasion.

His ignominious fall was heralded as the end of the chaebol – until then-President Lee Myung-bak pardoned him eight months later, allowing Korea’s richest man to return to work.

Park won election in December by promising “economic democratisation”.

That meant dealing sternly with the tycoons her father, dictator Park Chung-hee, helped create after the Korean War. Every economy has a certain amount of innovative oxygen that sustains its dynamism and creates fresh jobs. The chaebol starve would-be entrepreneurs of air and impede the growth of a vibrant stable of small and mid-size companies.

Outsize influence The chaebol are largely exporting animals. Their outsize influence hinders the growth of a vibrant services sector, which Korea needs

to create better-paying jobs, increase productivity and develop a highly skilled workforce. Their dominance also makes it hard for small companies to attract good talent so they can grow into large, profitable and gamechanging firms.

Pundits in Korea tend to see reforming the chaebol as a separate task from Park’s effort to build a “creative economy,” but it’s not.

Innovative start-ups can’t thrive as long as the chaebol continue to rely only on their inhouse networks of suppliers.

Korea will never develop its own Steve Jobs or Bill Gates as long as getting a job at LG Electronics Inc, Samsung or Hyundai Motor Co remains the only acceptable goal for college graduates.

Koreans have much to be proud of. Their nation nimbly steered around the global crisis in 2008. A Korean helms the United Nations. Samsung’s smartphones are all that stand between Apple Inc and world domination. Pop stars and film directors are advancing Korea’s soft power in ways Japan and China are rushing to emulate.

Yet Korea is in a funk. Growth is just 1.5 percent, wages have stagnated, and costs of housing and schooling in the educationobsessed nation are surging.

That’s led to a dangerous jump in household debt to about US$847 billion from US$564 billion in mid-2008. It’s quite a debt load for a US$1.1 trillion economy, and it speaks volumes about challenges facing the middle class.

There are worrisome signs Park is making her own Faustian bargain with the chaebol. Yes, she supported the revisions to Korea’s corporate laws passed by the National Assembly on July 2. The reforms mean that subsidiaries owned by a chaebol chairman’s family

should find it harder to monopolise supply orders.

Convenience-store operations now have new protections, and the conglomerates’ influence over banks is being reduced.

But the real victors were chaebol lobbyists.

Their insistence that bolder restrictions would hurt not

Until Korea reduces the chaebol’s stranglehold over all walks of life – economic, political and social – the well-intentioned efforts will gain little traction

Such short-termism is what put Korea in this predicament. Koreans have a love-hate relationship with their behemoths: They love how they helped the nation to rise into the orbit of Organizsation of Economic Cooperation and Development members; they hate the extreme concentration of economic power.

In 2012, exports by the 30 largest chaebol accounted for 82 percent of Korea’s output, compared with 53 percent in 2002. They hire about 80 percent of new college graduates.

Why would a 22-year-old Korean roll the dice on a small or mid-size company, or start a new one, when he or she can have a stable career at a chaebol?

Park can talk all she wants about transforming young Koreans into innovators and risk-takers. She can insist that the failure of a startup is a learning experience that needn’t bring shame on an entire family (as many Koreans believe).

The new president can roll out corporate welfare programmes, play venture capitalist and pick the brains of Gates and Mark Zuckerberg all she wants. But until Korea reduces the chaebol’s stranglehold over all walks of life – economic, political and social – these well-intentioned efforts will gain little traction.

Park has one five-year term to undo her father’s legacy, and the clock is ticking. Thus far her efforts to build a more creative economy lack more than just teeth. They lack creativity.

Bloomberg View

16

July 11, 2013

Closing More passengers flying with Air Macau

Italy’s debt costs hit 4-month high

More than 426,000 passengers took an Air Macau Co Ltd flight in the first three months of the year, a 14.8 percent jump from a year earlier, the Portuguese-language newspaper Jornal Tribuna de Macau reported yesterday. The average aircraft occupancy on Air Macau flights in the first quarter was 69 percent, an increase of two percentage points from 2012. This year the airline has already introduced new services to the mainland cities of Jinjiang, Shenyang and Wenzhou. The last two routes were launched in the first quarter.

Air Macau has also begun a new service to Da Nang in Vietnam this year.

Italy’s one-year debt costs rose to their highest level since March at an auction yesterday, a day after Standard & Poor’s cut Italy’s sovereign credit rating to two notches above junk. The Treasury sold 7 billion euros (US$8.97 billion) of one-year bills, paying a yield of 1.078 percent, up from 0.96 percent at a similar sale one month ago. Demand was fairly strong with a bid-to-cover of 1.56, up from 1.49 at mid-June sale. On Tuesday S&P cut Italy’s sovereign debt to BBB from BBB-plus, citing concerns about prospects for an economy stuck in its worst recession since World War Two.

Empire East in Manila talks with Okada Empire East Land Holdings Inc has begun talks with Kazuo Okada on the possible purchase of a Manila lot where the Japanese tycoon is building a US$2 billion (16 billion patacas) casino resort complex, said the president of the Philippine real estate developer. “Talks are very preliminary,” President Anthony Charlemagne Yu told a press briefing in Manila yesterday. He declined to say whether the discussions involve the entire plot where Mr Okada is building his casino resort complex; or just part of it. A Tokyo-based spokesman for Okada’s Universal Entertainment Corp that is planning the development could not be immediately reached for comment.

A land deal with Empire East, a unit of conglomerate Alliance Global Inc through its property arm Megaworld Corp, could put back on track the Japanese billionaire’s first casino venture in Manila. Three rival casino resorts have already been allowed to operate in the 100-hectare Entertainment City near Manila Bay, including the Solaire Resort & Casino that opened in March.

Universal and another Philippine developer, Robinsons Land Corp, earlier failed to reach a deal over a planned joint development of Okada’s Manila Bay Resorts.

Single authority to be responsible for winding down banks that get into trouble

IMF slashes global growth forecasts

EU unveils bank wind-down strategy Proposals for distressed banks to spark German opposition

T

he European Union’s executive arm is heading for a showdown with Germany over its blueprint for shuttering or restructuring failing banks, a plan intended to complement the European Central Bank’s oversight of lenders.

Michel Barnier, the EU’s financialservices chief, unveiled a proposal yesterday for a single resolution mechanism that gives the European Commission the power to decide when banks need to be saved or shut, potentially resulting in the use of public funds. Germany has warned this may violate the EU’s basic laws by usurping national control over finances.

“We have to stick to the given legal basis, as otherwise we risk major turbulence,” German Finance Minister Wolfgang Schaeuble said. “I would strongly ask the commission in its proposal for an SRM to be very careful, and to stick to the limited interpretation of the given treaty.”

EU leaders last month reiterated their support for setting up the resolution mechanism as an integral part of a planned banking union, without specifying how it should work. At issue is how much authority the new European entity would possess, and what recourse national governments would have to dispute its decisions.

“From a political point of view,

the conferral of a power to wind up banks on the commission is arguably the greatest transfer of sovereignty in the history of the EU and points toward a fiscal, as well as economic and monetary, union,” Alexandria Carr, a lawyer in the London office of Mayer Brown, said by e-mail.

Public money Mr Barnier insisted that he has built safeguards into the plans to protect national governments from being railroaded into using taxpayer money.

“The text states explicitly that the resolution board would not, in any scenario, be allowed to commit a member state’s public money without its agreement,” Mr Barnier said in an interview.

Public money would only be necessary in “very exceptional cases,” as the rules are designed to protect taxpayers by writing down banks’ unsecured creditors and tapping resolution funds, he said.

Under the commission’s plan, national governments can veto any resolution decision that includes possible recourse to the public purse, according to a summary of the proposals released by the commission yesterday.

Mr Barnier also proposed the establishment of a 55 billioneuro (US$70.5 billion) common

resolution fund financed by levies on banks. As the fund is tapped to shore up banks, further levies would be imposed to top it up.

Both the commission and the ECB have urged rapid progress toward a centralised system to bolster confidence in the bloc’s banks and break the financial link between lenders and sovereigns. The project has also received support from other euro nations, including France and Italy.

The plan will address a “fragmentation” in bank oversight and an absence of effective decisionmaking processes that was revealed during the financial crisis, Mr Barnier said, citing the dismemberment of Brussels-based Dexia SA as an example of authorities having to “improvise” a solution.

The proposal, which will target the euro area and other nations that sign their banks up for ECB supervision, require approval by governments and the European Parliament before it takes effect.

Germany has repeatedly urged the EU to embark on treaty changes to ease its path to banking union, arguing that the bloc’s current rulebook limits the powers that can be handed to central authorities. It has sought to build support behind an alternative blueprint for a network of national resolution authorities.

Bloomberg News

The International Monetary Fund trimmed its global growth forecast for the fifth time since early last year due to a slowdown in emerging economies and the woes in recession-struck Europe. In its mid-year health check of the world economy, the Washington-based lender also warned global growth could slow further if the pull-back from massive monetary stimulus in the United States triggers reversals in capital flows and crimps growth in developing countries.

The IMF shaved its 2013 forecast for global growth to 3.1 percent, as fast as the economy expanded last year and below the Fund’s 3.3 percent projection in April. It also lowered its forecast for 2014 to 3.8 percent after earlier predicting a 4 percent expansion. The IMF cut its 2013 growth forecast for developing countries to 5 percent, including a lower forecast for China, Brazil, Russia, India and South Africa. The Fund said China’s slowdown was a particularly big risk, as the world’s second-largest economy navigates a shift to consumption-led growth.

“After years of strong growth, the BRICS are beginning to run into speed bumps,” said Olivier Blanchard, the IMF’s chief economist.

China to widen car purchase curbs China is poised to widen the number of cities curbing vehicle purchases to counter worsening pollution and congestion, which would undermine car deliveries, the nation’s biggest auto association said. Eight cities – Chengdu, Chongqing, Hangzhou, Qingdao, Shenzhen, Shijiazhuang, Tianjin and Wuhan – will probably introduce measures limiting auto purchases, Shi Jianhua, deputy secretary general of the China Association of Automobile Manufacturers, said in a briefing in Beijing yesterday. The state-backed group is opposed to the restrictions, Mr Shi said.

Such limitations could cut vehicle deliveries by 400,000 units, or 2 percent of nationwide sales, and undermine economic growth, he added. If introduced, the measures may triple the number of Chinese cities – Beijing and Shanghai have vehicle quotas – imposing curbs on automobiles as public anger grows over worsening congestion and air pollution.

Reuters