Macau Business Daily, 10 July, 2012

Year I - Number 72 Tuesday July 10, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

www.macaubusinessdaily.com

Political reform hits home stretch Draft bills on Macau’s political reform reached the Legislative Assembly the same day they were presented by the Executive Council. Leong Heng Teng, spokesman for the Executive Council spokesperson said yesterday he hoped legislators “can coordinate and give priority to these draft bills”.

But he did not say whether the bills would be submitted to the assembly as a matter of urgency.

October start for deposit protection

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he bank deposit protection scheme was published in yesterday’s Official Gazette and it will come into effect in October.

Until then, the government will have to create a temporary fund with 150 million patacas (US$18.8 million) to protect Macau savers.

The Macau Monetary Authority is confident that the permanent structure will be ready on time. The financial regulator told Business Daily that

the government “has already embarked on the drafting of the bylaw” of the fund.

The bylaw will govern the fund’s organisation, management and operation as well as introduce a cap for the compensation payable for each account at a failed bank.

The original bill would have set the cap at 500,000 patacas but the assembly removed this cap in case it contradicted other legislation.

The scheme will come into effect one month late because of a delay in publishing the law to create it. The Legislative Assembly approved the bill creating the deposit protection mechanism on June 5, but the government published the law only yesterday.

It is the second time this year there has been an unexpected delay between the Legislative Assembly passing a bill and its publication in the Official Gazette.

More on page 3

June boom for govt investment

HANG SENG INDEX

The government has invested more in public projects in June than in the first five months of this year, official data released yesterday show.

With gambling tax revenue slowing, Macau’s budget surplus in June was smaller but it pushed the accumulated surplus above the 36 billion patacas forecasted by the government for the whole of 2012.

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July 9

HSI - Movers

‘Mr Sands’ helps Taiwan casino plan take off Airline pays passengers What should have been short hops by ‘plane from Taiwan to Macau turned into two cases of passenger stranding that cost Air Macau NT$220,000 (58,695 patacas) in customer compensation alone.

Two Air Macau flights from Taoyuan in Taiwan to Macau were delayed on Saturday – one for six hours because the airline did not have pilots to fly the plane.

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A major name in the casino industry has finally emerged as a firm contender for a Taiwan casino licence. Bill Weidner, a former Las Vegas Sands executive who played a key role in the building of Sands Macao and The Venetian Macao, wants to construct a multi-billion dollar casino resort in Taiwan. And like his former boss Sheldon Adelson’s vision for Cotai, Mr Weidner has a vision for the outlying Taiwanese island chain of Matsu that would see it transformed from a sleepy community into a top gaming destination with internationalstandard transport links.

Matsu, just six miles from the coast of China’s Fujian province, could draw a distinctly

Name

different crowd from Guangdong- and Hong Kong-focused Macau.

But a note from Macquarie Equities Research in Hong Kong yesterday said the likelihood of one or more casinos in Taiwan might have an impact on long-term returns from future Macau casino projects on Cotai.

Gary Pinge and Elaine Lai said: “While there is still a lengthy process to undergo and the construction of a casino will not happen for four to five years…this may bring a risk to long-term returns on future Cotai projects.”

Mr Weidner is also part of a consortium that has signed a deal to manage the US$1 billion Solaire Resort & Casino Manila.

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HANG SENG BK

0.19

CHINA RES POWER

0.13

POWER ASSETS HOL

0.00

CHINA RES ENTERP

0.00

HONG KG CHINA GS

-0.12

LI & FUNG LTD

-4.11

ALUMINUM CORP-H

-4.13

WHARF HLDG

-4.20

COSCO PAC LTD

-4.33

SANDS CHINA LTD

-4.89

Source: Bloomberg

2012-7-10

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business daily July 10, 2012

macau

Govt capital spending surges in June The amount the government spent on infrastructure last month outstrips its spending between January and May Vítor Quintã

vitorquinta@macaubusinessdaily.com

MOP1.5 billion

Spent on infrastructure last month

Photo by Manuel Cardoso

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he government invested 1.5 billion patacas (US$191.3 billion) in infrastructure projects last month, more than its entire capital expenditure in the first five months of the year.

According to provisional data released by the Financial Services Bureau yesterday, in the first half of the year the government spent 2.96 billion patacas of the 19.8 billion patacas earmarked in the public investment plan.

Business Daily asked the bureau for more information on the sharp increase in spending but did not receive a reply before going to press.

This year’s investment plan contains reclamation work to create an island where the immigration checkpoint for the Hong KongZhuhai-Macau Bridge will be built, the construction of several public housing projects and work on the Light Rail Transit railway.

Government capital spending in the first half of the year was six times what it was a year before, but accounted for just 14.9 percent of the allotted budget.

Government data show that public

Housing projects soaked up some of the huge increase in government capital spending last month

spending usually increases in the second half of the year, but for public spending to reach 19.8 billion patacas this year the government will have to spend more than 16.8 billion patacas before December 31.

The government’s current expenditure has been 16.8 billion patacas so far this year. This includes spending on the salaries and benefits of civil servants, who had a 6.5 percent pay increase in May. The government has spent more than 39 percent of its budget for

current expenditure so far this year.

It has not spent nearly as big a proportion of its capital budget.

Most experts say public infrastructure projects have a longer-lasting effect on the economy by making it more efficient and productive.

The budget surplus has already exceeded the 36 billion patacas forecast for the year. The cumulative surplus for the year was 39.9 million patacas at the end of last month.

At this rate the government will end

the year with a surplus of 79.9 billion patacas, 2.2 times what it forecast.

Revenue in the first half was 61.6 million patacas, 19.8 percent more than a year before and 60 percent what the government expects for the whole year.

The government was slightly less reliant on gaming taxes, with direct taxes – 35 percent of gross gaming revenue – jumping by more than one-a fifth to 53.3 billion patacas, accounting for 86.5 percent of government revenue.

Political reform bills return to assembly Executive Council’s spokesperson wants Legislative Assembly to give political reform bills final approval Xi Chen

xi@macaubusinessdaily.com

T

he bills on political reform are back at the Legislative Assembly for final approval, now that the Executive Council has finished reviewing them, Executive Council spokesperson Leong Heng Teng said yesterday.

Mr Leong did not say when he expected the bills to be passed.

“The Legislative Assembly has a lot of work to do. I hope it can coordinate and give priority to these draft laws,” he said.

He did not say if the bills would be classed as urgent, allowing the assembly to pass them in one session.

The bills must be passed this year because one of them stipulates how the next Legislative Assembly will be formed.

Mr Leong said the bills represent “the maturing process of a civil society” and that “going forward there will be more democratic elements in political discussions”.

When, if as expected, the bills become law, the number of members of the committee that elects the chief executive will increase to 400 from 300, and the minimum number of members required to nominate a candidate for chief executive increases to 66 from 50.

The bills give the committee 120 members from the business and finance sectors, 115 from the culture, education, professional and

sports sectors, 115 from the trade union, social services and religious sectors, and 50 government representatives.

The bills would add two more directly elected seats and two more indirectly elected seats to the Legislative Assembly, bringing the total number of seats to 29.

The fifth Legislative Assembly will be part-elected, part-appointed next year and the committee will elect a chief executive in 2014.

July 10, 2012 business daily | 3

MACAU Three months and counting for deposit protection fund Bank deposit protection fund should come into effect along with the overall scheme, in October, financial regulator says Vítor Quintã

vitorquinta@macaubusinessdaily.com

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he fund that will backup Macau’s bank deposits should come into effect in October, the financial regulator told Business Daily, at the same time as the deposit protection scheme, which comes one month late because of a delay in publishing the law to create it.

The Legislative Assembly approved the bill to create the deposit protection scheme on June 5, but the government published the law in the Official Gazette only yesterday.

The law comes into force 90 days after publication.

The government has not explained the delay in publishing the law.

Typically it would have published the announcement on June 11.

It is the second time this year there has been an unexpected delay between the Legislative Assembly passing a bill and its publication on the Official Gazette.

The assembly passed a bill amending the copyright law on February 28 but the government failed to publish the amendments in the Official Gazette until six weeks later.

A temporary deposit protection scheme has been in place since October 2008, at the beginning of the global financial crisis, when rumours circulating on the Internet started a

run on Wing Hang Bank Ltd. Last September, the International Monetary Fund called for a formal scheme to compensate depositors of banks that fail.

Compensation will be paid from a 300-million-pataca (US$37.6 million) deposit protection fund. The government will put up the first 150 million patacas.

Beginning in 2014, all 25 of the city’s licensed banks, except offshore institutions, will pay into the fund every January an annual contribution of 0.05 percent of the amount of protected deposits they hold.

A temporary deposit protection scheme has been in place since rumours started a run on Wing Hang Bank in 2008

MOP300 million

Initial deposit protection fund capital

The financial regulator expects the first combined annual contribution of the banks to be about 44 million patacas.

The law published yesterday says subsidiary legislation will govern the fund’s organisation, management and operation as well as introduce a cap for the compensation payable for each account at a failed bank.

The original bill would have set the cap at 500,000 patacas but the assembly removed this cap in case it

contradicted other legislation.

The fund is “also ready to be reviewed,” Executive Council spokesperson Leong Heng Teng said last October while presenting the deposit protection scheme, and it will be run under the Monetary Authority.

The regulator told Business Daily that the government “has already embarked on the drafting of the bylaw” of the fund and it is “to come into effect on the same effective date” of the overall scheme.

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business daily July 10, 2012

macau

‘Mr Sands’ has big plans for Taiwan casino Ex-LVS executive Weidner wants to transform Matsu islands Associate editor

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ill Weidner, a former Las Vegas Sands executive who played a key role in the building of Sands Macao and The Venetian Macao, wants to construct a multi-billion dollar casino resort in Taiwan.

His plans for the outlying island chain of Matsu, just six miles from the coast of China’s Fujian province, include a complete modernisation of the transport infrastructure. Julia Lee, vice president of Weidner Resorts’ Taiwan development office, said the company will develop Matsu into the “Mediterranean Sea in Asia” and will do its best to bring prosperity to the area. Residents of Matsu voted at the weekend to say ‘yes’ to casino resorts – although the turnout was low at only 40 percent of the 7,762 eligible electorate.

The scheme outlined by the company at a press conference in Taipei yesterday is likely to cost several billion U.S. dollars. But one analyst told Business Daily: “If Bill Weidner, who helped to build Sands and The Venetian in Macau sits down in front of bankers with a new Asian casino project, they will definitely listen.”

a special body to dovetail all the permissions, then objections or hold ups from one ministry could threaten the whole scheme.”

There are many unresolved issues on the regulatory side of the equation according to the second analyst. It’s possible that a second gaming resort will be allowed on Matsu, meaning that even if Weidner Resorts builds transport infrastructure, it could actually be helping to send tourists to a rival facility. Two resorts may also be allowed on the outlying island chain of Kinmen and two on Penghu, if those communities also vote in favour of casinos – an option allowed for consideration by the Taiwan government under an amendment in 2009 to the country’s Offshore Islands Development Act. A draft casino bill has now been prepared, according to Business Daily sources, but draft legislation dealing with integrated resorts isn’t yet complete. “That means there’s no clarity yet on what the bidders will need to commit to building, and therefore what capital commitments will be required,” added one source.

Aggressive programme

Philippines project

Another analyst with close knowledge of Taiwan added however: “The approach of Weidner Resorts appears to be very aggressive with regard to building the infrastructure on Matsu. But Taiwan is not Singapore – or even Macau – when it comes to coordinating project permissions.

Even assuming the Taiwan parliament approves casinos; the company will have to deal with multiple ministries. So unless the enabling legislation creates

Mr Weidner is already involved in another casino project in Asia. He is one of the principals in Global Gaming Philippines LLC, along with his former LVS colleague Bradley Stone (ex-president of global operations for LVS) and Garry W. Saunders (former COO of Melco Crown Entertainment). The company has signed an agreement to manage Solaire Resort & Casino Manila, a new US$1 billion gaming resort in the Philippines’ capital developed by Bloomberry

House that Bill built – ex-LVS man Bill Weidner has grand vision for Taiwan

Resorts Corp. and owned through Bloomberry subsidiary Sureste Properties Inc. Macquarie Equities Research in Hong Kong issued a note yesterday saying the likelihood of one or more casinos in Taiwan might have an impact on longterm returns from future Macau casino projects on Cotai.

The note from Gary Pinge and Elaine Lai said: “While there is still

a lengthy process to undergo and the construction of a casino will not happen for four to five years, we believe that the occurrence on Matsu is an example of regional competition as jurisdictions with Macau style proximity to China try and compete for mainland Chinese gamblers (after seeing Macau’s success). This may bring a risk to long-term returns on future Cotai projects.”

New Sino-Portuguese association eyes Macau A youth association looks forward to forging stronger links between enterprises in Portugal and China Tony Lai

tony.lai@macaubusinessdaily.com

A

new association for young businessmen in Macau, the mainland and Portugal wants to improve cooperation in business and trade among the three, according to the group’s president, Alberto Carvalho Neto.

Mr Neto said the Portugal-China Young Entrepreneurs Association was established two weeks ago and planned to set up a Macau office in October.

“Macau can act as an open door for Portuguese enterprises to enter the Chinese and other Asian markets,” he told reporters yesterday.

“It also serves as a way for Chinese businesses to strengthen their ties with Portugal, other Portuguese-speaking countries and the European Union.”

Mr Neto’s company, Branco Carvalho Neto, and Huajin Culture Communication (Macau) Co agreed last month to promote Portuguese agricultural products in northeastern China.

He said entrepreneurs were not only producing agricultural products that Portugal is known for, such as wine and olive oil, but also in businesses such as clean energy and technology.

The association will help some of its members open offices in Macau and plans to take 20 Portuguese entrepreneurs to the Macau International Trade and Investment Fair in October, ahead of a mainland tour.

It will similarly help mainland businessmen visit Portugal and

take part in the International Trade Fair for Wines, Seafood and Agricultural Products next year.

Mr Neto said the most promising area for investment in Portugal and with the greatest appeal for mainland companies was real estate.

The Portuguese government will announce in two or three weeks’ time new measures to allow investors that invest in Portugal to immigrate there.

Investors will have the right to reside in Portugal through direct investment, buying real estate or putting capital into Portuguese companies.

The new association has 70 members, 20 are from Macau and the mainland and the remainder

are from Portugal.

Mr Neto is confident that membership will more than double to 200 this year.

The deputy secretary-general of the permanent secretariat of the Forum for Economic and Trade Cooperation between China and Portuguese-speaking Countries, Rita Santos, said the association could help Portuguese enterprises better understand how Macau can help their businesses.

She said last week’s visit by Portuguese Foreign Affairs Minster Paulo Portas had “positive impacts” on Macau and that the city should continue to make use of its advantages as a link between the mainland and Portuguese-speaking countries.

July 10, 2012 business daily | 5

MACAU

Rolling down but VIP gross revenue still up in June Further consolidation of junket industry likely in 2012 Associate Editor

Macau junket market may have fewer operators in the future

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onthly rolling casino chip turnover ascribed to China’s super-wealthy VIP gamblers in Macau contracted year-on-year in June for the first time since 2008. It fell from 495.93 billion patacas (US$62.1 billion) in June 2011 to 485.41 billion. But gross gaming revenue from VIP baccarat still rose 6.7 percent yearon-year in June to 15.66 billion patacas from 14.67 billion patacas in June 2011.

Rolling chip turnover is important however for the junkets that supply most of Macau’s high value gamblers. That’s because they earn commission on the volume of nonnegotiable chips that are put back into play. The longer the VIPs ‘roll’, the more commission the junkets get.

When the Chinese economy weakens, rich Chinese players may find it harder to raise cash against the value of their assets. The junkets in turn may find it harder to get players to

keep rolling or to roll in the highest value chips – and to collect debts from those players when they lose and thus maintain the junkets’ own pool of capital so they can advance further credit.

“On average, [the] repayment period is around 15 days,” says Kenny Leong of Nasdaq-listed Asia Entertainment & Resources Ltd, one of Macau’s VIP gambling room promoters. “Now some gamblers are asking for two to three days longer. Only if it is a very special situation will we consider it,” he adds.

“It will more likely be the big guys dominating,” Mr Ma said.

Neptune Group Ltd, the listed arm

KEY POINTS Rolling chip turnover down y-o-y for first time since 2008 But VIP gross revenue still up 6.7 pct y-o-y in June

Further consolidation

Some junkets noticing players seeking longer pay back terms

Hoffman Ma, deputy chairman of Success Universe Group which has a joint venture with SJM Holdings (founded by Stanley Ho Hung Sun) to operate Macau casino resort Ponte 16, said smaller junkets would get swallowed into larger junkets rather than stop operations.

Amax Holdings chasing HK$1.9 billion bad debt from junket play at Crown Macau (now Altira)

Amax in the spotlight Photo by Manuel Cardoso

Junket investor chasing HK$1.9 billion bad debts

New Century Hotel, Taipa – scene of the attack on Amax investor Ng Wai

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he junket investor most heavily under the media spotlight is Hong Kong-listed Amax Holdings. One of its main shareholders – a 30-year veteran of junket operations called Ng Wai,

also known as Ng Man Sun – was savagely beaten with hammers and sticks a fortnight ago while dining at the New Century Hotel Taipa. The establishment has an SJM-licensed casino in which Amax in turn has an

indirect 25 percent interest via Mr Ng. Amax is facing some financial pressures, but it is atypical of the rest of the Macau junket market, Macau insiders say. It rose from nowhere quickly – the insiders say sent on behalf of the Ho family to save Lawrence Ho Yau Lung’s Macau joint venture Melco-PBL (now Melco Crown Entertainment) with James Packer back in 2007. It achieved that by supplying Melco-PBL with a lot of VIP players very quickly. Once the joint venture was on its feet and operating successfully, the rationale for Amax went away, they add.

Amax’s position wasn’t helped by in effect the government abolition of its unique selling point – its ability to negotiate a 1.35 percent rolling chip commission on behalf of its participating junkets, at a time in 2007-08 when the market average commission was around 1 percent to 1.1 percent. The government stopped that by drafting in 2009 a regulation for a 1.25 percent commission cap.

Aged accounts It is still battling say insiders to reclaim HK$1.9 billion (US$245 million) it advanced in credit to high

of one of Macau’s biggest junkets investors, said in February it was looking to buy more VIP room operators in Macau and in other Asian countries.

Mr Leong of AERL said his company was hoping to take advantage of the deteriorating economic environment to acquire smaller junket operators within the coming year.

Some junkets are eyeing capital markets to fund expansion, although that will entail shining a brighter spotlight on companies used to operating away from the public sphere.

AERL said in May it was considering a listing in Hong Kong alongside its Nasdaq-traded shares. Other firms including Tak Chung Finance, an affiliate of one of Macau’s biggest junket operators, and Sun Finance, tied to Macau junket investor Suncity Group, are also considering public offerings. with Farah Master, Reuters

rollers at MPEL’s Crown Macau (now Altira) casino.

Baker Tilly Hong Kong, an auditor for Amax Holdings, warned in the company’s annual report for year ending March 31 2012 that: “…the Group’s current liabilities exceeded its current assets by HK$9,858,000.

This condition indicates the existence of an uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern”.

It has not escaped the notice of Macau insiders that the US$200 million that New Century’s casino – Greek Mythology – was seeking to raise in an initial public offering in Hong Kong, was roughly equivalent to the amount of Amax’s bad debt.

A spokeswoman for Mr Ng recently told the Macau media that the assault on him was a “Triad-style attack and an attempt to kill him”. But as one political source put it to Business Daily: “Killing people isn’t good business. You can’t collect money from a dead man – especially not if you’re the one that killed him. There are other ways out of this situation for Mr Ng, but he needs to be a bit cleverer about how he does things.”

A.E.

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business daily July 10, 2012

macau Photo by Manuel Cardoso

Plane without crew grounds Air Macau service

A suspected technical problem has become a big embarrassment for Air Macau

A suspected problem with an Air Macau plane’s fuel tank led to a six-hour delay for passengers in Taiwan Xi Chen

xi@macaubusinessdaily.com

T

wo Air Macau flights from Taoyuan in Taiwan to Macau were delayed on Saturday – one for six hours because the airline did not have pilots to fly the plane.

The 171 passengers on board flight NX605 took off nearly two hours late on Saturday morning, the plane having been held on the ground while the airline attended to what it suspected was a problem with a fuel tank.

But the delay meant the pilots scheduled to fly had worked more than the permissible number of hours.

The airline replaced them with the flight deck crew of its next flight to Macau, flight NX619. Unfortunately there were no more pilots standing by to replace that crew. The 110 passengers on NX619, scheduled to depart at 9.25am, were stranded.

Pictures broadcast on television in Taiwan showed scenes of mounting anger among passengers.

Air Macau paid each passenger NT$2,000 (533 patacas) in compensation. Nineteen opted to fly to Hong Kong on Cathay Pacific

Airways and the remaining 92 eventually took off for Macau six hours late – once the airline had rustled up some pilots.

Air Macau’s spokesperson Joy Gong said that the airline had to arrange a new crew to go to Taipei to fly NX619 as the airline’s base in Taiwan is not Taipei, which led to the six hour delay.

countries. Just eight are from Macau.

The airline’s chief executive, Zhu Song Yan, announced this year that it wants to rejuvenate its fleet of 14 aircraft by 2018.

More investment The Macau Civil Aviation Authority suspended Air Macau’s right to promote its pilots in October after the flight deck crew of one of its aircraft, on lease to Air China, lost contact with air traffic control.

An investigation found that the airline failed to follow its own procedures for promoting first officers to captain.

The authority subsequently allowed Air Macau to resume promoting its own pilots for a trial period of six months, but only under the supervision of the authority.

The Chinese-language Macau Daily News reported that the airline is recruiting and training more pilots and engineers from Macau.

Air Macau says it has pilots from 37

NT$2,000 each Compensation paid by Air Macau to 110 passengers

The airline raised 700 million patacas (US$88 million) in cash in November by issuing new shares to the government, making it the airline’s second-biggest shareholder.

The government said the money was for the carrier to improve the quality of its service, with better aircraft, better ground facilities and more staff training.

But in an interview published in last month’s edition of Macau Business magazine, Air Macau chairman Zheng Yan said 700 million patacas was enough to buy only two new aircraft.

An Airbus A321 can cost around 480 million patacas. “We still have to use our own funds,” Mr Zheng said.

Mr Zhu said the airline will buy two new aircraft each year from next year until 2015.

He said the airline had considered introducing aircraft for long-haul flights but that there were limits on the profitability of long-haul flights.

The Pacific Asia Travel Association said recently that Macau had too few international flights to tap tourist markets outside Greater China.

Mr Zhu expects the airline to give priority to improving its operations and management in the next two to three years.

Weather Beijing 32/22o C Changchun 28/22o C

Harbin 30/22o C

Xian 30/22o C Shanghai 37/28o C Chengdu 28/23o C Kunming 27/19o C Haikou 33/25o C Sanya 31/23o C

Guangzhou 35/26o C

MACAU (9 July-14 July) Day

Temperature

Humidity

07/9

27/33o C

60/90 %

07/10

27/33o C

55/90 %

07/11

27/33o C

55/90 %

07/12

27/32o C

55/90 %

07/13

27/32o C

55/90 %

07/14

27/31o C

60/95 %

Shenzhen 33/26o C

ASIA (today)

Hong Kong 33/26o C

Manila

TOKYO

Jakarta

33/25o C

31/25o C

29/23o C

32/23o C

Macau 33/27o C

Bangkok

SEOUL

K. lumpur

34/27o C

SINGAPORE

29/23o C

33/25o C

taipei

36/27o C

July 10, 2012 business daily | 7

MACAU

Diversify now while going is good: Chou Photo by Manuel Cardoso

Use the money rolling into the coffers to turn the city’s focus away from gaming, former top legislator says Tony Lai

tony.lai@macaubusinessdaily.com

F

ormer Legislative Assembly president Susana Chou wants the government to speed up economic diversification while Macau enjoys the good times.

Ms Chou wrote in her blog on Sunday that she was worried about “the severe lack of diversification in Macau’s economy” and “the uncontrollable increase of staff and public spending by the government”.

She quoted recent reports about visa limitations for mainland tourists headed for Macau, saying “any minor problem in the gambling industry can put Macau in a difficult situation, or even worse”.

Authorities should be alert and work towards economic diversification while it still had the financial power to do so, before negative situations emerged, she said.

The rumours about visa limitations reported by Chinese-language newspaper Macau Daily News last month dragged down each of the casino concessionaire stocks listed in Hong Kong and sent jitters through Macau’s tourism and retail sectors.

The office of Secretary for Economy

Wild public spending by the government is a concern, says former president of the Legislative Assembly Susana Chou

and Finance, Francis Tam Pak Yuen, was forced to clarify that they had not received official word of new visa limits.

In her widely read blog, Ms Chou wrote it was “ironic” that officials had boasted about turning Macau into a global tourism centre but

City University strikes tourism training deal Bid to increase choices for professionals and executives

T

he City University of Macau and Switzerland’s Laureate Hospitality Education have agreed to advance education and training in tourism and hotel management here.

In a joint announcement they expressed their belief that Macau has the right environment for developing tourism education and training.

Deeper collaboration would mean more ways for students to obtain highquality education with an international and domestic perspective. City University’s faculty of international tourism and management hopes to introduce more training courses to increase choices for professionals and executives.

Laureate

Hospitality is an international hotel management educator that offers courses in hotel management, conference management, and sports and entertainment management to students from more than 100 countries.

The group co-founded an international hotel management college in Shanghai in 2004 with Jin Jiang International Hotels (Group) Co Ltd, the biggest Asian-owned hotel group in the mainland.

Laureate Hospitality has schools in Australia, Spain, Switzerland and the United States, making it possible for a student to pursue a course in more than one country.

X.C.

residents were unable to see any work to make that happen.

She also criticised government-led reform of the administration since the handover in 1999, including recruitment policies, saying the changes had produced “more redundancies and overlaps” in the

civil service. She said urgent legal reforms had been put aside or aborted mid-process.

The cost was a bloated civil service more than 25,000-strong, according to the latest government data, for a city with a population of about 550,000.

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business daily July 10, 2012

SPECIAL OLYMPICS

Golf Special Olympics hits the mark

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ight teams from around the Asia-Pacific region, 32 players, 16 coaches and 32 guardians gave their thumbs-up to the Special Olympics Macau Golf International, an event that aspires to be the world’s biggest Special Olympics golf tournament.

The first event, on the immaculate fairways and greens of Caesars

Macau, produced 32 winners, from Australia, the mainland, Hong Kong, Macau, South Korea and Taiwan.

The event was organised by the Charity Association of Macau Business Readers and co-produced

by Macau Business SK Events and Macau Special Olympics.

It found support from some of the city’s biggest and most responsible

companies, numerous volunteers and anonymous benefactors.

Lead sponsors Melco Crown Entertainment Ltd and Sands China Ltd were joined by another 24 sponsors and the Office of the Chief Executive in putting their weight behind the event.

“This first event was a trial. After October’s Macau Business Charity

Golf Tournament, which is in its sixth edition, we will work even harder to bring the second edition of the Special Olympics Macau Golf International, with more countries, athletes and guardians, in 2013,” said Paulo A. Azevedo, the tournament president.

“The idea is to put Macau on the map for caring and sharing.”

July 10, 2012 business daily | 9

SPECIAL OLYMPICS

Golfers from South Korea and Sands China were the event’s overall winners

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business daily July 10, 2012

greater china

InBrief China’s inflation eased to 29-month low Shares tumble to 6-month low

China’s main stock index ended down 2.4 percent at a six-month low yesterday after the latest data showed that the world’s second-largest economy is slowing down more rapidly than forecast. The benchmark Shanghai Composite Index closed at 2,170.8 points, wiping out a one-percent rise last Friday when the market was temporarily boosted by the central bank’s second cut in official interest rate this year to boost the economy. Banks, which tend to be more vulnerable amid an economic slowdown, were among the bigger losers. Top lender the Industrial and Commercial Bank of China dropped 2.8 percent.

Aids policymakers in intensifying growth efforts

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hina’s inflation eased to a 29-month low and Premier Wen Jiabao said the government will intensify its response to the economy’s slowdown as growth wanes in Asian neighbours from Japan to Vietnam.

The consumer price index rose 2.2 percent in June from a year earlier, the government said yesterday in Beijing. Japan’s May machinery orders fell the most in more than five years, while Hong Kong and Vietnam signalled growth may fall short of official forecasts.

Nomura Holdings Inc. said China will boost public investment and Credit Agricole CIB forecast cuts in taxes and banks’ reserve requirements after Mr Wen was reported as saying downward pressure on the economy is still “relatively large”. Asian nations are becoming increasingly dependent on China to drive growth as Europe’s deepening debt turmoil crimps exports and the U.S. labour market slows.

3.8 % Rise in food prices from a year earlier “Inflation is no longer an imminent threat to China,” said Dongming Xie, an economist at OCBC Bank in Singapore. “We expect July CPI to fall below 2 percent.

August and September will be important months to monitor from an inflation perspective. If prices fall too fast, fuelling deflationary expectations, China is likely to cut interest rates further.”

Policymakers should now focus on stimulating growth.

“Inflation is dead and growth is by far the main concern in Asia,” said Tim Condon, chief Asia economist at ING Financial Markets in Singapore, who previously worked at the World Bank.

China’s inflation compared with the 2.3 percent median estimate in surveys from both Bloomberg and Reuters. Producer prices dropped 2.1 percent, versus the median forecast for a 2 percent fall.

Consumer-price gains have now stayed below Mr Wen’s 4 percent target for five months.

Railway Materials cuts IPO target China’s annual consumer inflation cooled to 2.2 percent in June

from rebounding, the official Xinhua News Agency reported on Sunday.

“China’s current economic situation is generally stable, but it still faces relatively huge downward pressure.

We should increase the strength of policy fine-tuning,” Mr Wen was quoted as saying during a trip to the eastern province of Jiangsu.

“China should maintain its proactive fiscal policy, focusing particularly on improving the structural tax cut policies, while continuing to implement prudent monetary policy to effectively settle the structural contradiction between the supply and demand of credit,” Mr Wen said.

China’s economy may have expanded 7.7 percent in the second quarter from a year earlier, down from 8.1 percent in the prior three months, analysts estimated ahead of government data due on Friday.

Yesterday’s reports showed the CPI in June fell 0.6 percent from May, the biggest drop in two years, while producer prices declined 0.7 percent from the previous month.

The data “show that deflation could become a larger concern for China than inflation,” Ren Xianfang, a Beijing-based economist with IHS Global Insight Ltd, said in a research note. “While an economywide generalised deflation is yet to be seen, the deflationary spiral looks to have started in some industrial sectors, attesting to considerable stress with the economy.”

Inflation is dead and growth is by far the main concern in Asia

Deflation woes The government lowered benchmark interest rates last Thursday for the second time in a month, adding to the first reduction since 2008 and three cuts in banks’ reserve requirements starting in November. At the same time, Mr Wen said officials will “unswervingly” continue property controls and prevent home prices

Tim Condon, ING Financial Markets

Food, which accounts for about a third of the consumer-price basket, rose 3.8 percent from a year earlier, the least in two and a half years.

Commodities drop The inflation slowdown reflects in part a decline in commodity prices.

The S&P GSCI Spot Index of 24 raw materials has dropped about 11 percent in the past year.

August and September will be important months to monitor from an inflation perspective.

If prices fall too fast, fuelling deflationary expectations, China is likely to cut interest rates further Dongming Xie, OCBC Bank in Singapore

The last time consumer-price increases slowed to this level in 2008, the People’s Bank of China was in the midst of five lending-rate cuts totalling 216 basis points.

Yesterday’s report “should provide room for another rate cut” later in the quarter if the government wants to, said Wang Tao, chief China economist for UBS AG in Hong Kong.

Last week’s action by the central bank reduced the one-year lending rate by 31 basis points to 6 percent and one-year deposit rate by 25 basis points to 3 percent. The nation moved in tandem with the European Central Bank and the Bank of England, which also boosted monetary stimulus to support growth.

The PBOC also allowed banks to offer loans at as much as 30 percent less than the benchmark rate, the second widening of the range in a month.

Bloomberg/Reuters

China Railway Materials Commercial Corp plans to raise up to 6 billion yuan (US$943 million) through the Shanghai leg of its proposed Shanghai-Hong Kong dual-listing, down 60 percent from its initial target, its draft prospectus showed. The state-owned company, which provides supply chain services for railway materials and steel products, said it aims to issue up to 2.77 billion A-shares in Shanghai and up to about 960 million shares in Hong Kong. The firm said in a filing to the environment ministry in November that it planned to raise 14.7 billion yuan via the Shanghai IPO.

Shanghai Port may set up cruise-line Shanghai International Port (Group) Co., operator of the world’s busiest harbour, plans to start a cruise line to pare reliance on overseas operators and secure traffic at its passenger terminal. Talks are currently on with cruise line operators to form a venture, Henry Hwang, general manager of unit Shanghai Port International Cruise Terminal Development Co., said. An announcement could be made in the second half of the year, he said. “All cruise liners presently are foreign companies,” Mr Hwang said. Royal Caribbean Cruises Ltd and Costa Cruises are the lines currently operating from the terminal.

China invests to develop Iran oil fields China has invested some US$20 billion to help develop Iran’s North Azadegan, South Azadegan, and Yadavaran oil fields with a view to producing almost 700,000 barrels of crude oil a day, the official Islamic Republic News Agency reported, citing Oil Minister, Rostam Qasemi. “After over a decade of negotiations, agreements have been reached to develop these fields and the Chinese have started operations,” Mr Qasemi was quoted as saying. Iran is under international trade, banking and energy sanctions restricting international companies’ involvement in Iran’s oil projects.

July 10, 2012 business daily | 11

asia

Tokyo checking possible insider trading of ANA

InBrief

Regulator to probe if underwriters leaked information

J

apan’s securities watchdog is examining possible insider trading of All Nippon Airways Co. shares before last week’s announcement of a public offering, a government official with direct knowledge of the matter said.

The Securities and Exchange Surveillance Commission is studying share movements before the July 3 announcement and will conduct hearings to determine whether underwriters leaked information, said the official, who requested anonymity as the investigation is private.

Japanese regulators are cracking down on insider trading after finding that employees of firms including Nomura Holdings Inc. tipped off clients about share sales they managed in 2010.

Moody’s Investors Service said yesterday that such leaks may be “more than a rare occurrence”.

Trading volume of All Nippon Airways shares reached a three-month high the day before news of the 211 billion yen (US$2.6 billion) issuance became public, led by short-selling, according to data compiled by Bloomberg. The moves were “unnatural,” ANA spokesman Ryosei

Nomura said last Friday.

The airline currently has no plan to take action after receiving assurances from the four underwriters – Nomura Holdings, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Deutsche Bank AG – that they didn’t leak information.

Spokesmen at the four banks declined to comment.

ANA spokeswoman Megumi Tezuka said the carrier is unaware of the regulator’s examination.

Credit negative Nomura and Daiwa Securities Group Inc.’s exclusion from bond underwriting amid the regulatory crackdown on information breaches is credit negative, Moody’s said yesterday.

“It points to leakages of confidential information exacting tangible damage on their businesses,” Moody’s analysts led

by Senior Credit Officer Maki Hanatate wrote in a weekly note.

Nomura, Japan’s biggest brokerage, was dropped as a lead underwriter for state-owned Development Bank of Japan Inc.’s bond sale because of its involvement in leaking non-public information used for insider trading.

CapitaLand to buy Ascott’s property

Nomura was also excluded from Japan Housing Finance Agency bond underwriting

Daiwa, the country’s second-biggest brokerage, was excluded from a bond sale being conducted by Kawasaki Heavy Industries Ltd. Regulators are attempting to restore confidence in the country’s financial markets by investigating short-selling based on tips from underwriters of public offerings.

Japan Housing Finance Agency dropped Nomura as underwriter of residential mortgagebacked securities, replaced

by Mitsubishi UFJ Morgan Stanley Securities Co., the

government agency said in an e-mailed statement yesterday, without elaborating on the reason.

“We expect a mounting loss of confidence from this scandal will have a lasting impact on all players in the Japanese market,” Moody’s said. For large Japanese companies seeking advice on takeovers, the crackdown gives them “a reason to use international brokers that have not been implicated in the insider trading scandal,” the credit-rating company said.

Bloomberg/Reuters

Samsung Electronics (KS 005930) last

1126000

max 1137000

min

1126000 1140000 1137500 1135000

Southeast Asia’s largest developer CapitaLand Ltd said yesterday it will buy a property in Singapore for S$359 million (US$282 million) from associate Ascott Residence Trust. CapitaLand will also sell Ascott Raffles Place Singapore and Ascott Guangzhou to Ascott Residence for S$283.3 million. The property, Somerset Grand Cairnhill, will be jointly developed by Ascott Ltd and CapitaLand Residential Singapore Pte Ltd into a serviced residence with a hotel licence and a high-end residential development, CapitaLand said in a statement. CapitaLand is expected to sell the redeveloped property back to Ascott Residence for S$405 million in 2017.

Japan’s surplus shrinks 63 pct Japan’s current-account surplus was the smallest in May since at least 1985 and machinery orders fell the most in more than five years, adding to signs a slump in demand is threatening the nation’s rebound. The excess in the widest measure of the nation’s trade shrank 63 percent from a year earlier to 215.1 billion yen (US$2.7 billion), the Ministry of Finance said in Tokyo yesterday.

Japan’s trade position has weakened due to growing energy imports after last year’s earthquake and nuclear meltdown and also the yen’s gain of 4.9 percent against the dollar since mid-March.

1132500 1130000 1127500

9-Jul, 8:00 AM

2:00 PM

1125000

Samsung falls on slowdown concern

Suu Kyi makes parliamentary debut

Company declined for a third straight day in Seoul trading

Myanmar opposition leader Aung San Suu Kyi made her historic parliamentary debut yesterday, marking a new phase in her near quarter century struggle to bring democracy her country. Ms Suu Kyi will join fellow members of her National League for Democracy (NLD), as both the party and its iconic leader transform from dissident outsiders to mainstream political players in the wake of landmark April by-elections. “I will try my best for the country,” Ms Suu Kyi told AFP.

Jun Yang and Saeromi Shin

S

amsung Electronics Co., the world’s largest maker of televisions and mobile phones, dropped for a third day in Seoul trading amid concern that a global economic slowdown may crimp sales.

Samsung fell 3 percent to 1,126,000 won (US$984), the lowest closing price since February 14, while the benchmark Kospi index declined 1.2 percent. The stock has gained 6.4 percent this year.

The MSCI Asia Pacific Index declined for a third straight day after Premier Wen Jiabao said China’s economy faces “relatively large” downward pressure, while Japanese machinery orders fell more than expected, adding to a disappointing U.S. jobs report. Suwon, South Korea-based Samsung last week reported second-quarter sales that missed estimates.

“There are worries about the macro economy,” Lim Dori, a Seoul-based

analyst at Shinyoung Securities Co., said by phone. “European financial institutions are cutting risky holdings, and as part of that, they’re selling off Korea’s representative stock Samsung.”

Samsung posted second-quarter sales of 47 trillion won (US$41 billion), trailing the 49.8 trillionwon average of 35 analyst estimates compiled by Bloomberg. Operating profit rose 79 percent from a year earlier to a record 6.7 trillion won.

A recovery in Samsung’s chip and display businesses is more gradual than expected, Mr Lim said.

The electronics maker also faces patent disputes with Apple Inc., a competitor that’s also its biggest customer, which have led to sales of its tablets and smartphones being blocked in some markets.

Samsung lost an emergency bid on Friday to resume selling its Galaxy Tab 10.1 tablet computer in the U.S., while a ban on sales of its Galaxy Nexus smartphone in the market was put on hold for a least a week, according to an appeals court ruling.

Bloomberg

Singapore changes death penalty rules

Samsung fell to the lowest closing price since February 14

Singapore is to end the mandatory death sentence previously imposed on certain types of drug traffickers.

Under Singapore’s Misuse of Drugs Act 1973, the penalty for unauthorised traffic of more than 30 grammes of morphine or of cocaine is death by hanging. The Lion City has executed at least 850 people for a range of capital offences since 1959. But Singapore’s Minister for Law K Shanmugam said in parliament yesterday that apart from certain types of homicides, the death sentence will no longer be mandatory but be at the discretion of the courts.

12 |

business daily July 10, 2012

MARKETS Hang SENG INDEX PRICE

Day %

VOLUME

PRICE

Day %

VOLUME

27.05

-2.872531

20624198

CHINA UNICOM HON

10.2

-3.225806

19038042

ALUMINUM CORP-H

3.25

-4.129794

14537691

CITIC PACIFIC

11.8

-1.172529

2940296

BANK OF CHINA-H

2.85

-1.041667

200755592

CLP HLDGS LTD

67.2

-0.4444444

2489223

BANK OF COMMUN-H

5.05

-1.174168

22346078

CNOOC LTD

15.1

-2.580645

56727735

26.95

-2.707581

2861207

COSCO PAC LTD

9.95

-4.326923

3647900

NAME AIA GROUP LTD

BANK EAST ASIA

NAME

NAME

PRICE

Day %

58.9

0

3140750

SANDS CHINA LTD

22.35

-4.893617

20694723

SINO LAND CO

4297514

POWER ASSETS HOL

VOLUME

12.32

-3.448276

SUN HUNG KAI PRO

93.3

-2.354788

5596973

SWIRE PACIFIC-A

91.4

-1.561659

1071821 2053362

BELLE INTERNATIO

13.52

-2.453102

16021906

ESPRIT HLDGS

9.49

-1.658031

6958173

TENCENT HOLDINGS

229

-2.801358

BOC HONG KONG HO

23.15

-1.698514

10426248

HANG LUNG PROPER

27.1

-4.070796

5195710

TINGYI HLDG CO

19.9

-4.096386

6846000

CATHAY PAC AIR

12.98

-2.111614

2476233

HANG SENG BK

107.3

0.1867414

2667607

WANT WANT CHINA

10.16

-2.681992

26235045

HENDERSON LAND D

44.15

-2.860286

2467338

WHARF HLDG

43.35

-4.198895

5080203

77.3

-1.150895

1557500

HONG KG CHINA GS

17.36

-0.1150748

5454709

HONG KONG EXCHNG

107.7

-1.192661

3058475

67.7

-1.09569

7175613

69.35

-1.840057

6880835

4.18

-1.877934

287319149

CHEUNG KONG

98.4

-1.055807

4157627

CHINA COAL ENE-H

6.59

-4.075691

17385776

CHINA CONST BA-H

5.09

-1.165049

297585330

CHINA LIFE INS-H

20.9

-3.464203

28952488

CHINA MERCHANT

24.05

-1.232033

3936415

CHINA MOBILE

HENGAN INTL

HSBC HLDGS PLC

85.1

-0.6421483

11765122

HUTCHISON WHAMPO

18.48

-3.34728

26879764

IND & COMM BK-H

CHINA PETROLEU-H

6.51

-2.398801

64039527

CHINA RES ENTERP

23.15

0

1542402

CHINA RES LAND

15.92

-2.808303

11859800

CHINA RES POWER

15.86

0.1262626

CHINA SHENHUA-H

28.75

-2.542373

CHINA OVERSEAS

MOVERS

2

45

2 19850

INDEX 19428.09

LI & FUNG LTD

14.48

-4.10596

25465835

HIGH

19847.64

MTR CORP

26.95

-0.5535055

2488508

LOW

19421.75

NEW WORLD DEV

9.64

-2.42915

15847439

4495440

52W (H) 22835.03

PETROCHINA CO-H

9.48

-4.048583

118600702

18163252

PING AN INSURA-H

61.75

-2.448657

8637652

(L) 16170.35

19420

05 -Jun

09-Jul

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

25.45

-4.143126

11403142

YANZHOU COAL-H

CHINA PETROLEU-H

6.51

-2.398801

64039527

14537691

CHINA RAIL CN-H

6.31

-2.170543

6957160

-2.843602

10735500

CHINA RAIL GR-H

3.16

-2.469136

14960572

2.85

-1.041667

200755592

CHINA SHENHUA-H

28.75

-2.542373

18163252

CHINA TELECOM-H

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.04

-2.250804

123358884

AIR CHINA LTD-H

4.64

-2.315789

10880000

ALUMINUM CORP-H

3.25

-4.129794

ANHUI CONCH-H

20.5

BANK OF CHINA-H

NAME CHINA PACIFIC-H

5.05

-1.174168

22346078

3.43

-2.279202

45877969

14.28

-3.513514

1785123

DONGFENG MOTOR-H

11.12

-3.135889

14095028

CHINA CITIC BK-H

3.85

-1.785714

25612906

GUANGZHOU AUTO-H

6.32

-0.7849294

6186440

CHINA COAL ENE-H

6.59

-4.075691

17385776

HUANENG POWER-H

5.63

1.258993

32445000

CHINA COM CONS-H

6.8

-1.449275

18886605

IND & COMM BK-H

4.18

-1.877934

287319149

CHINA CONST BA-H

5.09

-1.165049

297585330

JIANGXI COPPER-H

17.44

-3.858875

7253972

CHINA COSCO HO-H

3.6

-5.263158

15226526

PETROCHINA CO-H

9.48

-4.048583

118600702

PICC PROPERTY &

BANK OF COMMUN-H BYD CO LTD-H

CHINA LIFE INS-H

20.9

-3.464203

28952488

8.88

-2.844639

13698603

CHINA LONGYUAN-H

5.09

-0.5859375

5519000

PING AN INSURA-H

61.75

-2.448657

8637652

CHINA MERCH BK-H

14.12

-2.754821

36739712

SHANDONG WEIG-H

8.74

0.6912442

3492000

CHINA MINSHENG-H

6.92

-2.535211

40106973

SINOPHARM-H

20.35

-0.973236

3690800

CHINA NATL BDG-H

8.21

-1.911589

32361849

TSINGTAO BREW-H

45.5

-2.360515

1384210

11.54

-1.367521

5248000

WEICHAI POWER-H

27.3

-3.533569

4341292

CHINA OILFIELD-H

NAME

PRICE

DAY %

VOLUME

11.58

-4.769737

27354348

ZIJIN MINING-H

2.68

-1.470588

23404000

ZOOMLION HEAVY-H

9.36

-3.703704

16150752

14.14

-4.588394

5820340

ZTE CORP-H

MOVERS

2

38

0 9730

INDEX 9447.24 HIGH

9726.14

LOW

9442.31

52W (H) 12823.58 9440

(L) 8058.58 05-Jun

09-Jul

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.51

-1.568627

77200225

DAQIN RAILWAY -A

6.61

-2.936858

52583385

SAIC MOTOR-A

12.96

-2.48307

16666642

AIR CHINA LTD-A

6.2

0.8130081

24555416

DATANG INTL PO-A

5.71

1.061947

14750219

SANY HEAVY INDUS

12.65

-3.729072

26454720

6.16

-2.531646

7246780

DONGFANG ELECT-A

16.5

-3.395785

10472641

SHANDONG GOLD-MI

32.45

-4.07922

9959829

14

-3.912148

28446568

12.49

-3.328173

11644798

SHANG PUDONG-A

7.67

-3.764115

106535413

BANK OF BEIJIN-A

9.4

-3.983657

24105129

GD MIDEA HOLDING

9.9

-9.753874

94190901

SHANGHAI ELECT-A

BANK OF CHINA-A

2.81

0

21249012

GD POWER DEVEL-A

2.71

2.264151

112169024

NAME ALUMINUM CORP-A ANHUI CONCH-A

NAME

EVERBRIG SEC -A

NAME

4.5

-3.017241

4714821

SHANXI LU'AN -A

19.95

-6.073446

19363850

BANK OF COMMUN-A

4.36

-2.678571

59548724

GEMDALE CORP-A

6.95

0.5788712

90357488

SHANXI XINGHUA-A

40.66

-1.621098

3720270

BANK OF NINGBO-A

9.62

-4.752475

19466110

GF SECURITIES-A

13.48

-5.469846

17442257

SHANXI XISHAN-A

14.6

-5.927835

21399998

BAOSHAN IRON & S

4.17

-2.570093

19522307

GREE ELECTRIC

21.37

-0.3264925

24337337

SHENZ DVLP BK-A

14.71

-2.840159

16095224

4778069

GUANGHUI ENERG-A

14.16

3.282276

33451250

SHENZEN OVERSE-A

7.1

1.28388

79432763 65422982

BYD CO LTD -A

19.04

-3.05499

3.91

-2.736318

14996618

GUIZHOU PANJIA-A

27.22

-3.509394

5064369

SUNING APPLIAN-A

8.4

-1.176471

CHINA CNR CORP-A

3.7

-2.887139

21059316

HAITONG SECURI-A

9.13

-2.665245

38460521

TSINGTAO BREW-A

38.91

-1.318793

2303033

CHINA COAL ENE-A

7.42

-3.385417

12489095

HANGZHOU HIKVI-A

27.92

0.1075654

3653003

WEICHAI POWER-A

27.08

-3.458111

6325531

CHINA CONST BA-A

4.11

-1.201923

19301757

HENAN SHUAN-A

61.9

-0.3862247

2212275

WULIANGYE YIBIN

35.6

1.685233

93394724

CHINA COSCO HO-A

4.6

-3.563941

7449037

HONG YUAN SEC-A

16.31

-2.916667

14403591

XIAMEN TUNGSTEN

43.61

-2.307348

6336853

CHINA CSSC HOL-A

23.01

-1.413882

6805900

HUATAI SECURIT-A

9.76

-2.106319

24682497

YANGQUAN COAL -A

14.62

-5.555556

18204593

CHINA EAST AIR-A

4.24

0

18434046

HUAXIA BANK CO

8.86

-3.904555

32715866

YANTAI CHANGYU-A

70.09

1.564991

3005759

CHINA EVERBRIG-A

2.76

-1.428571

30490552

IND & COMM BK-A

3.8

-2.813299

40458726

YANTAI WANHUA-A

13

-2.182092

7780336

CHINA INTERNAT-A

31.81

3.818538

8970899

INDUSTRIAL BAN-A

12.47

-3.333333

44707094

YANZHOU COAL-A

18.5

-3.896104

4371293 3427528

CHINA CITIC BK-A

18.6

-0.9057006

14536559

INNER MONG BAO-A

40.75

-1.307823

54163400

YUNNAN BAIYAO-A

61

1.362579

CHINA MERCH BK-A

10.15

-3.97351

134789522

INNER MONG YIL-A

21.64

1.739539

25834050

ZHONGJIN GOLD

21.42

-2.857143

6798931

CHINA MERCHANT-A

10.9

-3.795234

13985079

INNER MONGOLIA-A

4.81

-1.836735

40869073

ZIJIN MINING-A

3.76

-2.083333

28370467

CHINA MERCHANT-A

25.92

-1.407379

7224440

JIANGSU HENGRU-A

28.68

-0.8641549

6962342

ZOOMLION HEAVY-A

9.52

-1.85567

41322707

JIANGSU YANGHE-A

146.33

-1.791946

1943809

ZTE CORP-A

13.81

-2.951511

15279303

23.71

-1.984291

6716075

CHINA LIFE INS-A

CHINA MINSHENG-A

5.85

-3.145695

120380677

CHINA OILFIELD-A

16.89

-2.53895

6969564

CHINA PACIFIC-A

22.18

-2.719298

16652966

JINDUICHENG -A

12.66

-1.860465

5258494

5.8

-4.605263

58625790

JIZHONG ENERGY-A

14.69

-5.469755

21527585

CHINA PETROLEU-A

JIANGXI COPPER-A

CHINA RAILWAY-A

4.39

-2.444444

17557135

KANGMEI PHARMA-A

16.11

2.091255

30229584

CHINA RAILWAY-A

2.52

-2.702703

17388881

KWEICHOW MOUTA-A

254.73

-2.023155

2852711

CHINA SHENHUA-A

21.86

-3.274336

15979609

LUZHOU LAOJIAO-A

45

0.04446421

16630785

METALLURGICAL-A

2.4

-2.040816

16339119

MOVERS

36

4.73

-2.874743

27521612

CHINA SOUTHERN-A

4.54

-0.6564551

32360348

NINGBO PORT CO-A

2.45

-2

8758382

4.15

-4.597701

48001628

HIGH

2476.07

LOW

2416.04

CHINA STATE -A

3.38

-1.457726

49456826

CHINA UNITED-A

3.61

-3.733333

69987621

PETROCHINA CO-A

8.86

-2.744237

17979019

CHINA VANKE CO-A

9.66

0.1036269

104794057

PING AN INSURA-A

45.6

-1.384083

20836703

CHINA YANGTZE-A

6.74

0

14520626

POLY REAL ESTA-A

13

1.404056

62614314

CITIC SECURITI-A

12.1

-3.739061

46764419

QINGDAO HAIER-A

11.4

-3.959562

16147122

CSR CORP LTD -A

4.17

-0.9501188

28171318

QINGHAI SALT-A

32.86

-4.532249

7685373

7 2480

INDEX 2416.036

CHINA SHIPBUIL-A

PANGANG GROUP -A

257

52W (H) 3137.922 (L) 2254.567

2410

05 -Jul

09-Jul

FTSE TAIWAN 50 INDEX NAME ACER INC ADVANCED SEMICON

PRICE DAY %

Volume

NAME

PRICE DAY %

NAME

PRICE DAY %

-1.149425

11785316

FORMOSA PLASTIC

77.2

1.04712

10083619

TAIWAN MOBILE CO

24.95

-1.577909

11958631

FOXCONN TECHNOLO

114

1.785714

12009920

TPK HOLDING CO L

ASIA CEMENT CORP

37.6

0

3243748

FUBON FINANCIAL

30.7 -0.3246753

ASUSTEK COMPUTER

265

-3.985507

6332675

HON HAI PRECISIO

91.9

11.75

-2.892562

35421998

HOTAI MOTOR CO

AU OPTRONICS COR

Volume

30.1

4953314

0.547046

17953357

201.5 -0.7389163

361183

TSMC

Volume

95.9

1.160338

4747388

354.5

0

4301008

80

-1.112485

45060759

UNI-PRESIDENT

49.5 -0.7021063

UNITED MICROELEC

12.3

3834458

-1.6

43637809

37.75 -0.3957784

7063541

CATCHER TECH

185.5

-4.871795

22777661

HTC CORP

304

-5.590062

22432370

CATHAY FINANCIAL

29.15 -0.8503401

5310003

HUA NAN FINANCIA

16.5 -0.6024096

3121025

YUANTA FINANCIAL

13.9

-1.067616

8799198

CHANG HWA BANK

15.8 -0.6289308

5509525

LARGAN PRECISION

575

-1.202749

1637973

YULON MOTOR CO

52.4

-1.872659

1616472

LITE-ON TECHNOLO

38.25 -0.6493506

1789081

CHENG SHIN RUBBE

75.6

-1.305483

4527977

CHIMEI INNOLUX C

12.15

-1.619433

12877060

MEDIATEK INC

275

0.7326007

3601320

7.07 -0.7022472

12464231

MEGA FINANCIAL H

22.6

-1.094092

13458633

28 -0.1782531

13210000

NAN YA PLASTICS

56.1 -0.5319149

4164663

CHINA DEVELOPMEN CHINA STEEL CORP CHINATRUST FINAN

17.4

-0.286533

14007404

PRESIDENT CHAIN

159

0.6329114

1069120

CHUNGHWA TELECOM

95.4

0.210084

7581759

QUANTA COMPUTER

78.5

-1.505646

12993746

28.05 -0.7079646

3764309

SILICONWARE PREC

31.7

-4.229607

8010322

94 -0.1062699

4558829

SINOPAC FINANCIA

11.35

-3.404255

27494900

COMPAL ELECTRON DELTA ELECT INC FAR EASTERN NEW

32.15

-1.076923

2059088

SYNNEX TECH INTL

71.8

-1.643836

3720089

FAR EASTONE TELE

67

1.208459

2846112

TAIWAN CEMENT

36.3

0

6223631

17.7

0

8016353

TAIWAN COOPERATI

17.7 -0.5617978

1848838

FORMOSA CHEM & F

FIRST FINANCIAL

75

-1.055409

3499177

TAIWAN FERTILIZE

66.3

-2.785924

4716269

FORMOSA PETROCHE

82.9

0.6067961

935063

TAIWAN GLASS IND

28.5

3.26087

3822494

WISTRON CORP

MOVERS

9

37

4 5090

INDEX 4997.36 HIGH

5086.9

LOW

4988.87

52W (H) 5979.37 (L) 4643.05

4980

05-Jul

09-Jul

July 10, 2012 business daily | 13

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

MElco crowN ENtErtAINMENt

MGM cHINA HolDINGS

19.3

28.8

19.2

28.6

19.1

28.4

19

28

18.8

Min 18.7

18.6

last 18.82

SANDS cHINA ltD

11.25

27.8

18.7 Average 18.904

11.35

28.2

18.9

Max 19.26

11.45

Max 28.7

Average 28.404

Min 27.65

last 27.9

27.6

Max 11.4

SJM HolDINGS ltD

Average 11.209

Min 11.16

last 11.18

wyNN MAcAu ltD 14.6

23.5

17.3

23.3

17.2

23.1 14.55

22.9

17.1

22.7

17.0

22.5 Average 22.735

Max 23.45

Min 22.35

last 22.35

22.3

14.5 Max 14.6

Average 14.530

Min 14.5

Commodities ENERGY

NAME

PRICE

WTI CRUDE FUTURE Aug12

84.69

0.284191829

-14.58396369

111.3799973

77.27999878

BRENT CRUDE FUTR Aug12

98.43

0.244434285

-6.533092774

124.6999969

88.48999786

GASOLINE RBOB FUT Aug12

DAY %

YTD %

(H) 52W

Max 17.3

Average 17.042

272.27

0.246686303

1.328619278

326.7099857

243.0099964

863

0.057971014

-4.004449388

1046.5

801

NATURAL GAS FUTR Aug12

2.82

1.585014409

-13.91941392

4.921000004

2.174999952

271.6

0.225100557

-4.490628407

332.949996

250.8399963

Gold Spot $/Oz

1582.5

-0.0852

1.124

1921.18

1522.75

Silver Spot $/Oz

27.1775

0.2723

-2.3621

44.2175

26.085

Platinum Spot $/Oz

1442.1

-0.1661

3.4134

1915.75

1339.25

Palladium Spot $/Oz

580.92

0.7754

-11.1064

848.37

537.54 1832.25

LME ALUMINUM 3MO ($)

1896

-2.418939784

-6.138613861

2675.25

LME COPPER 3MO ($)

7531

-2.131254061

-0.907894737

9905

6635

LME ZINC

1844

-0.539374326

-0.054200542

2539.5

1718.5

3MO ($)

LME NICKEL 3MO ($)

16150

-3.293413174

-13.68252272

25195

15980

15.225

1.129192959

1.30

18

13.95499992

718.25

3.643578644

22.52

719.25

499

WHEAT FUTURE(CBT) Sep12

825.75

2.418604651

17.67

853.5

606.75

SOYBEAN FUTURE Nov12

1541.5

2.37423211

28.00

1545.75

1115.75

COFFEE 'C' FUTURE Sep12

175.95

-0.283366393

-24.88794023

288.8500061

AGRICULTURE ROUGH RICE (CBOT) Sep12 Dec12

PRICE

(L) 52W

GAS OIL FUT (ICE) Aug12

CORN FUTURE

16.9

last 14.54

last 16.98

Min 16.94

CURRENCY EXCHANGE RATES

HEATING OIL FUTR Aug12 METALS

MAJORS

ASIA PACIFIC

CROSSES

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

DAY %

1.0163 1.5487 0.9781 1.2279 79.6 7.987 7.7546 6.3712 55.8938 31.79 1.2726 29.938 42.016 9449 80.901 1.20111 0.79289 7.8221 9.8092 97.74 1.03

YTD %

-0.4896 -0.0516 -0.0818 -0.0976 0.0754 0.0013 -0.0077 -0.1005 -0.7851 -0.1258 -0.0314 -0.1503 -0.3951 -0.4657 0.5637 -0.015 0.058 0.8975 0.7687 0.1535 0

(H) 52W

-0.4506 -0.3603 -4.0896 -5.2619 -3.3794 0.1578 0.1651 -1.196 -5.061 -0.755 1.8859 1.139 4.3412 -4.0216 -3.0519 1.3055 5.1079 3.99 5.5336 1.9644 0.0097

(L) 52W

1.1081 1.6618 0.9823 1.4549 84.18 8.0449 7.8113 6.4747 57.3275 31.96 1.3199 30.716 44.35 9662 88.637 1.24736 0.89056 9.3616 11.6793 115.18 1.0311

0.9388 1.5235 0.7071 1.2251 75.35 7.9823 7.7526 6.2769 43.855 29.63 1.1992 28.763 41.575 8458 72.057 1.00749 0.79044 7.8172 9.79 95.6 1.0288

MACAU RELATED STOCKS (H) 52W

(L) 52W

ARISTOCRAT LEISU

NAME

PRICE 2.61

-0.3816794

DAY % YTD % 18.63636

3.25

1.88

VOLUME CRNCY 865254

150.0999908

CROWN LTD

8.63

2.009456

6.674905

9.29

7.45

2073417

SUGAR #11 (WORLD) Oct12

22.42

0.764044944

-1.795882611

26.03999901

19.23999977

AMAX HOLDINGS LT

0.07

-1.408451

-19.54023

0.119

0.06

2675500

COTTON NO.2 FUTR Dec12

71.28

0.934579439

-18.85245902

102.25

64.61000061

BOC HONG KONG HO

23.15

-1.698514

25.81522

24.45

14.24

10426248 0

CENTURY LEGEND

0.25

0

8.69565

0.38

0.204

CHEUK NANG HLDGS

2.99

-0.6644518

6.785716

4.19

2.3

0

18.48

-3.34728

42.37289

19.16

9.99

26879764

CHINESE ESTATES

8.99

0.2229654

-28.08

13.68

8.3

2225212

CHOW TAI FOOK JE

10.74

-2.007299

-22.84483

15.16

8.55

9495600

1.4

-2.777778

26.12612

1.89

0.97

1170000

0.97

0

130.9524

1.09

0.3

2220000

CHINA OVERSEAS

World Stock MarketS - Indices NAME

EMPEROR ENTERTAI

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

US

12772.47

-0.9630393

4.541907

13338.66016

10404.49

GALAXY ENTERTAIN

18.82

-2.989691

32.16292

24.95

8.69

8978414

NASDAQ COMPOSITE INDEX

US

2937.33

-1.303375

12.7509

3134.17

2298.89

HANG SENG BK

107.3

0.1867414

16.44058

124.3

84.4

2667607

FTSE 100 INDEX

GB

5639.43

-0.4097036

1.205079

6084.08

4791.01

HOPEWELL HLDGS

22.65

-0.6578947

14.04833

24.903

18.56

636044

DAX INDEX

GE

6394.46

-0.2441456

8.410994

7523.53

4965.8

HSBC HLDGS PLC

67.7

-1.09569

14.74576

78.6

56

7175613

NIKKEI 225

JN

8896.88

-1.373167

5.221904

10255.15

8135.79

HUTCHISON TELE H

3.69

-0.5390836

23.41137

3.75

2.42

527088

HANG SENG INDEX

HK

19428.09

-1.881505

5.390464

22835.03

16170.35

LUK FOOK HLDGS I

17.82

-2.941176

-34.24354

46.15

14.7

4214020

5.86

-2.819237

1.559792

10.76

4.3

1977073

CSI 300 INDEX

CH

2416.036

-2.288186

2.996661

3137.922

2254.567

MGM CHINA HOLDIN

11.18

-2.443281

16.5536

17.183

7.6

1033849

TAIWAN TAIEX INDEX

TA

7309.96

-0.7956746

3.363648

8839.14

6609.11

MIDLAND HOLDINGS

3.97

0.7614213

0.4034609

5.217

2.887

846041

NEPTUNE GROUP

0.092

2.222222

-17.11712

0.151

0.08

350000

NEW WORLD DEV

9.64

-2.42915

53.9936

10.96

6.13

15847439

SANDS CHINA LTD

20694723

KOSPI INDEX

SK

1836.13

-1.187709

0.5690851

2192.83

1644.11

S&P/ASX 200 INDEX

AU

4118.267

-0.9509821

1.521154

4657.4

3765.9

ID

3985.045

-1.729928

4.266178

4234.734

3217.951

FTSE Bursa Malaysia KLCI

MA

1620.31

-0.01480979

5.852115

1620.55

1310.53

NZX ALL INDEX

NZ

777.246

0.1194097

6.501187

806.015

700.441

JAKARTA COMPOSITE INDEX

PHILIPPINES ALL SHARE IX

11.15

PH

3490.5

-1.04834

14.62903

3527.48

2695.06

FUTURE BRIGHT

MELCO INTL DEVEL

22.35

-4.893617

1.82232

33.05

14.9

SHUN HO RESOURCE

1.13

0

13

1.32

0.82

0

SHUN TAK HOLDING

2.72

-1.805054

6.286192

4.668

2.241

544593 3996640

SJM HOLDINGS LTD

14.54

-0.9536785

16.26851

20.711

10.079

SMARTONE TELECOM

15.08

-0.7894737

12.20238

18.5

9.8

396522

WYNN MACAU LTD

16.98

-2.971429

-12.92308

27.48

14.807

9098921

ASIA ENTERTAINME

3.97

0.5063291

-32.48299

10.8692

3.66

84042

BALLY TECHNOLOGI

47.08

0.5338458

19.0091

49.32

24.74

222051

HSBC Dragon 300 Index Singapor

SI

565.52

2.98

13.94

na

na

STOCK EXCH OF THAI INDEX

TH

1187.06

-1.084928

15.7746

1247.72

843.69

HO CHI MINH STOCK INDEX

VN

408.12

-1.761987

16.0916

492.44

332.28

BOC HONG KONG HO

3

0

25.14666

3.15

1.81

1500

Laos Composite Index

LO

994.35

-0.8950196

10.54966

1107.3

876.33

GALAXY ENTERTAIN

2.46

0.4081633

31.5508

3.24

1.08

12000 2481319

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

INTL GAME TECH

15.88

0

-7.674423

19.15

13.12

JONES LANG LASAL

69.18

-2.439712

12.9285

96.05

46.01

233147

LAS VEGAS SANDS

42.39

-2.708286

-0.7956928

62.09

36.08

7079511

MELCO CROWN-ADR

10.84

-1.900452

12.68191

16.15

7.05

3663922

MGM CHINA HOLDIN

1.46

-2.666667

22.51476

2.2131

1.0025

3000

MGM RESORTS INTE

10.83

-1.455869

3.835088

16.05

7.4

6100907

SHUFFLE MASTER

14.49

0.138217

23.63481

18.77

7.35

446145

1.82

-1.086957

13.21416

2.6037

1.2624

2000

100.69

-1.109802

-8.869579

165.4931

95.82

2384541

SJM HOLDINGS LTD WYNN RESORTS LTD

AUD HKD

USD

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14 |

business daily July 10, 2012

Opinion

What euro crisis?

Norbert Walter

W

Former chief economist of Deutsche Bank Group and head of Deutsche Bank Research

hat constitutes a crisis? Is it sustained economic decline, high and long-term unemployment, poverty, rampant inflation, a precipitous fall in the exchange rate, fiscal deficits, high borrowing costs, and political dysfunction? Most would agree that a crisis exists if just some of these “misery indices” are present. But, while Europe is widely perceived to be in the grip of crisis, only a handful of them are present, and in only a few eurozone countries.

So, why is there a eurozone crisis, and what defines it?

Time and again, it is argued that the single currency does not fit the different needs of its member countries, and that unsustainable economic divergence will ultimately require that the euro be abandoned.

The fatal divergences that are most frequently cited include differences in growth rates, job-creation, and unemployment rates, as well as dramatic disparities in current-account balances, all of which may be traceable to wide deviations in unit labour costs. Perceptions of such divergences force considerable risk premiums on problem countries, inevitably resulting in accelerating capital flight to safe havens.

All of these developments

are now visible in the eurozone, particularly in its peripheral countries. Risk premiums started rising above benign levels in 2009, and then more strongly in 2011-2012, while capital flight became rampant in 2011.

But, if one considers what might underlie capital movements of this sort, suspicion must also fall on unsustainable policies that extend to countries well outside the eurozone. In the wider European Union, countries like the United Kingdom or Hungary are as much afflicted by structural deficiencies as some peripheral eurozone countries are. Exchangerate flexibility has not helped them much, or at least they have chosen not to exploit it.

Assorted states Moreover, there are countries with government-debt burdens that are as large, if not larger, than those on Europe’s periphery – the United States and Japan being prime examples. Other countries, like Norway and Switzerland, are running current-account surpluses that exceed 10 percent of their GDP, but are resisting currency revaluation.

It is worth remembering that, for the decade until 2005, Germany was labelled the “sick man of Europe.” Germany

was uncompetitive when it entered the eurozone, owing to excessive wage and price increases following the country’s reunification – a problem that has since been overcome by structural reforms that the country undertook within the single currency. The same is true for the most recent eurozone member, Estonia, whose rigorous wage restraint ensured competitiveness in the single market in a short period of time.

Why, then, is there such strong doubt that the euro can survive? Some say that the current efforts to enforce sound policies in the peripheral countries are bound to fail, and that sacrificing democracy in these countries to keep the monetary union intact is too high a price to pay.

In fact, the efforts of governments and international insti-

All of this amounts to a much-needed and often-advocated Marshall Plan for the periphery

tutions point the way toward more sustainable solutions.

Who would have believed at this time last year that the fiscal pact adopted in March would have been possible?

And, despite fluctuations, has there not been a considerable reduction in risk premiums for problem countries, without adding to the financing costs of donor countries?

Much remains unknown. Are we seeing tentative signs of escape from the eurozone’s malaise? Will debtor countries be able to stick to tough reform programmes, or will their citizens reject austerity? And will donor countries avoid the sort of populist backlash at home that might push them in a protectionist direction?

Swiss model Intelligent cooperation that avoids moral hazard should be able to prevent panic, reduce risk premiums, and permit fuller use of resources.

For example, transnational migration flows should certainly be made easier and more attractive. High levels of unemployment, particularly among young skilled workers, could be avoided if donor countries that need migrants to invigorate their own workforces were able to attract them.

More immigration would strengthen skills and raise income levels, while reducing distressed countries’ expenditure on unemployment benefits. Greater labour mobility within the EU would also help to create a more open European mindset, and thus weaken old nationalist prejudices.

So, will Europe commit to moving toward political union, and thereby address what has remained missing, despite the single market, the euro, and the Schengen Agreement’s elimination of internal borders?

The model for a future United States of Europe is Switzerland, a country with four languages and ethnicities, fiscally strong sub-national units (cantons), a single firstrate currency, and a federal government and a parliament that exercises genuine, if limited, fiscal authority.

If the EU made the most of the competencies that it already has, and governed more effectively, the Union as a whole could achieve faster economic growth for at least the next decade, with a 2.5 percent annual rate not out of reach. More generous support for countries in trouble is essential, because the euro must be preserved (albeit not necessarily on the base of a larger eurozone).

Financial markets would be more easily convinced if such support were complemented by the recipient countries’ acceptance of the fiscal pact, together with technical help to strengthen their governance. In Greece, anti-corruption officers from the US, Italian tax-efficiency specialists, German privatisation experts, and Spanish tourism professionals should be made available to accelerate the pace of modernisation.

All of this amounts to a much-needed and often-advocated Marshall Plan for the periphery. But it recognises that what Europe’s troubled countries need most is not money, but the planning and administrative capacity to spend it effectively. Over the last decade, Greece could absorb only a fifth of the EU modernisation funds available to it. It didn’t have to be that way then, and Europe cannot afford to let it remain that way now. © Project Syndicate

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Newsdesk Vitor Quintã (Chief Reporter) Tony Lai, Xi Chen Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com

July 10, 2012 business daily | 15

OPINION Business

Is Google a monopoly?

Wrong question wires Leading reports from Asia’s best business newspapers

Japan Times By drafting drastic restructuring measures, ailing chipmaker Renesas Electronics Corp. has for the time being avoided the fate of Elpida Memory Inc., which filed for bankruptcy protection in February. But merely implementing the measures, which include a reduction in the number of domestic plants and personnel cuts, may not be enough to eliminate all the concerns surrounding its struggling business, given the harsh business environment.

The manufacturer was formed through the April 2010 merger of Renesas Technology Corp. and NEC Corp.’s semiconductor unit.

New Straits Times Danainfra Nasional, a Malaysian state-owned company, started marketing RM2.4 billion (US$753 million) of Islamic bonds to yield 20 to 33 basis points over similar-maturity local government bonds. The Kuala Lumpur-based firm, formed to fund development projects, is offering the syariah-compliant securities. Proceeds will be used to help finance construction of a subway in the country’s capital.

Stretching 156 kilometres, the subway is Malaysia’s biggest infrastructure project. The first line is estimated to cost RM30 billion and scheduled to be operational by July 2017.

Business Standard Automobile makers in India seem to be rationalising production plans and rolling out incentives to push sales of most of their vehicles. However, a handful of models have sustained demand and managed to beat the blues The Swift Dzire premium hatchback and utility vehicle Ertiga from the Maruti Suzuki stable, and the Mahindra XUV 500, have had a waiting list for months, in a market where most models are available off the shelf.

Experts attribute success for these models to the availability of diesel variants.

Business Times Since they were launched 10 years ago, real estate investment trusts (Reits) in Singapore have earned a reputation as a defensive asset that pays out regular dividends. Data compiled

by BT show that despite market volatility over the years, investors who put their money in Singapore’s 22 Reits since day one would have lost money only in four. On average, annual compounded returns for Reits were 8 percent a year – beating the 10-year returns of the Straits Times Index (5 percent), property (6 percent) and government bonds (4 percent).

Susan P Crawford

Visiting professor at Harvard’s Kennedy School of Government and at Harvard Law School and a columnist for Bloomberg View

G

oogle responded last week to European antitrust regulators investigating a long list of claims against the world’s largest search engine. Whether or not the complaints against Google are valid, they may be looking backward.

Increasingly, Google is not a search engine.

Yes, Google accounts for 80 percent of all Web searches in Europe. It is facing criticism (some of it prompted by Microsoft) for favouritism toward Google’s own specialty search products – travel, finance, hotels, restaurants, maps – that may put its competitors at a disadvantage. In the U.S., the Federal Trade Commission has also been investigating Google for the past year.

As pressure mounts on Google to change its practices, it’s not clear whether antitrust regulators are asking the right questions. Although European Commission authorities are focused on Google’s familiar Web pages of blue links, and the prominence of Google products on those pages, Google seems to be heading in a different direction. It wants to be whispering to individual users by way of its Google devices.

Whether competition law has anything to say about this is an open question. Do we require Chevrolet to allow all car-radio manufacturers to install their devices in its vehicles? (No, we don’t.)

Perfect search In November 2009, Google’s vice president of search products and user experience, Marissa Mayer, described the perfect search engine: “It would be one that could understand speech, questions, phrases, what entities you’re talking about, concepts. It would be able to search all of the world’s information, [find] different ideas and concepts, and bring them back to you in a presentation that was really informative and coherent.”

Two years later, Apple introduced its voice-recognition software, Siri, for the iPhone.

It seemed to fit that job description. Except for one detail: Siri is inaccurate almost a third of the time.

Last month Google made a series of intriguing announcements signalling that deeply contextualised, personalised information services aimed right at Siri will be rolled out this month in an update to Android phones. Users won’t have to ask specific questions because their device will already know where they are – and even what their calendar says they’re doing. Google Now will display transportation information, weather, sports scores, restaurant locations and pre-

sumably any other contextually relevant information. A soothing Siri-like voice will answer a murmured query if Google Now hasn’t already figured out the user’s needs.

Just as the term “horseless carriage” was overtaken by “automobile,” “search engine” will soon sound primitive to our 21st-century ears.

Instead, you will have a digital deputy that travels with you and is simpler to use and tailored to your wants and needs.

Because Android phones already command more than 50 percent of the U.S. market for handheld devices, all Google has to do is hang on to its Android customers in order to have the scale and scope it needs to be successful. If its pilot fiber optic installation in Kansas City, Kansas, and Kansas City, Missouri, works and can be replicated, Google can also avoid dependence on any wireless carrier: unlicensed wifi hotspots connected to fiber nodes will provide users with mobile connectivity, and Google won’t have to ask permission from AT&T or Verizon to introduce a new device or service.

Vertical integration Google is not alone in climbing the heights of vertical integration. Apple and Facebook are working together more closely, with Facebook the default calendar and contact app in Apple’s latest operating system. And Facebook is supposedly planning

its own phone.

What competition law has to say about the personalised, vertically integrated ecosystems now being built by Apple, Facebook and Google

As ‘search’ becomes an anachronism and personalisation the new normal, we’ll have deeper issues to deal with

is far from clear. Consumers will have a choice of competing handsets, as they do now. But their subsequent options (what calendar, what map, what apps) may be sharply limited. Signing up with a particular brand of personal assistant will lead to a cascade of path-dependent filters, as software learns more about its users and serves them more directly.

In response to European and U.S. competition authorities, Google is likely to agree to better labelling of its search results to more clearly show Google’s commercial relationships to particular links.

This may be a solution to a fading problem. As “search” becomes an anachronism and personalisation the new normal, we’ll have deeper issues to deal with.

Bloomberg View

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business daily July 10, 2012

CLOSING IPO valuing Fender at US$395m

EU to take action over Libor scandal

Fender Musical Instruments Corp., the largest seller of guitars in the U.S., filed to raise as much as US$160.7 million in an initial public offering to expand overseas, potentially valuing the company at about US$395 million. The company is offering 7.14 million shares at US$13 to US$15 each, according to a regulatory filing yesterday. Fender estimates net proceeds to be about US$88.2 million and didn’t disclose a date for the IPO. The company, which increased sales 13 percent to US$700.6 million last year, sees growth coming from emerging markets such as China and India as guitar-based music becomes more popular.

Michel Barnier, the European commissioner in charge of financial regulation, is expected to bring forward changes to the market abuse directive and regulation within in the next weeks, the Financial Times reported yesterday. In response to the Libor rigging scandal, Mr Barnier will amend reforms to European Union market so that potential “loopholes” are closed and criminal sanctions specifically cover tampering with indices such as Libor and Euribor. He is cited as calling the falsification of such benchmark rates a “betrayal” with potentially “systemic consequences”. “I have never believed in self-regulation for a public good,” he was quoted as saying.

Spanish borrowing costs rising Madrid to get more time to reach budget goal

S

panish and Italian 10-year bond yields have been rising ahead of a summit of finance ministers. The yield on Spanish 10-year bonds, which are taken as a strong indicator of the interest rate the government would have to pay to borrow money, rose above 7 percent, while Italian bond yields rose to 6.1 percent.

Yields above 7 percent are considered to be unsustainable in the long-term.

Eurozone finance ministers were meeting yesterday while those from the 27-nation EU will meet today.

Europe is expected to grant Spain an extra year to reach its deficit targets after it outlines further budget savings, diplomats said yesterday.

Although no final decision was expected at a Eurogroup meeting of eurozone finance ministers for a bailout of Spain’s banks, the wider gathering of EU finance chiefs today is set to ease a debt goal that has pressured Madrid to make punishing cuts that are exacerbating a recession.

“Spain’s budget consolidation targets will be adjusted to give it an extra year,” said one of the diplomats.

“This is not a unilateral move. Spain needs to make the necessary cuts to reach that goal and this will be discussed on Tuesday (today) at the Ecofin [meeting of ministers]. I expect the extra year to be granted.”

Spain to outline new package at Eurogroup meeting

The European Commission will propose easing Madrid’s deficit goal for this year to 6.3 percent of economic output, 4.5 percent for 2013 and 2.8 percent for 2014, officials said.

New goals The new figures highlighted Spain’s dramatic fiscal slippage. Madrid was originally supposed to cut its budget shortfall to 4.4 percent this year. Prime Minister Mariano Rajoy unilaterally changed the target to 5.8 percent in March before eventually accepting an agreed goal of 5.3 percent.

The Commission will make the new

proposal today to the EU’s finance ministers, who would have to agree for the targets to become binding, two officials told Reuters.

Spanish Economy Minister Luis de Guindos will spell out at the meeting his government’s plan for a package of up to 30 billion euros (US$36.9 billion) over several years through spending cuts and tax hikes that are due to be announced tomorrow.

A source close to the Spanish government said 10 billion euros of cuts would come this year and that the measures would include a VAT hike, reduced social security payments, reduced unemployment benefits and changes to pensions calculations.

Madrid had been due to reduce its national deficit to 3 percent of gross domestic product by the end of 2013. But a deep recession has put that beyond reach.

A decision on the full details of a crucial rescue for the country’s banks is also due.

Spain has requested a bailout of up to 100 billion euros (US$125 billion).

A Spanish government source said it would sign a memorandum of understanding in Brussels regarding the rescue, which would be followed on July 20 by a full loan agreement.

As part of that, it will agree to create a single bad bank to house toxic assets from its banking sector.

Reuters

LME shareholders to vote on HKEx takeover JP Morgan reluctant to approve – sources London Metal Exchange (LME) shareholders will vote on July 25 on a 1.4 billion pound (US$2.2 billion) takeover offer by the Hong Kong stock exchange, which could deliver

a payout of 7.4 million pounds for the LME’s chief executive.

The LME, the world’s largest marketplace for metals including copper and aluminium, said in a

LME executives would receive up to 19.65 million pounds if the deal gets shareholders nod

statement yesterday it had set the date for the vote and sent documents to its shareholders on the takeover plan, including details of potential payouts for its executives.

Hong Kong Exchanges and Clearing Ltd (HKEx) and the LME announced on June 15 they had agreed on an acquisition that would give LME members a gateway to China, the world’s biggest metals buyer.

Some smaller shareholders have voiced opposition to a takeover and top shareholder JP Morgan is also reluctant to vote in favour, sources familiar with the matter have said.

If shareholders approve the deal, LME executives would receive up to 19.65 million pounds from a shadow equity incentive scheme, including as much as 7.36 million pounds for chief executive Martin Abbott, according to the shareholder documents.

The largest shareholders of the LME, which still uses open outcry

trading, are banks.

Due to a voting structure designed to preserve the influence of smaller shareholders – often industrial users and producers of metal – the deal could fail if many of them oppose the bid, which has to be approved by 75 percent of shares and 50 percent of shareholders.

Many shareholder members who own and use the 135-year-old exchange fear a sale might alter its unique, complex structure of futures trading and end its system of low fees.

HKEx chief executive Charles Li has promised that until at least January 1, 2015, his exchange will preserve the LME brand, its open-outcry trading and unique structure.

Romnesh Lamba, HKEx head of market development has said the exchange is “reasonably confident” of success in the LME shareholder vote. If approved, the deal would close in the fourth quarter.

Reuters