Year I - Number 73 Wednesday July 11, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00 www.macaubusinessdaily.com
Piled high sold cheap: new rail link fares Last Friday Business Daily asked if the new rail link from Guangzhou to Zhuhai would bring high spending visitors or yet more tourists with little cash. It looks like the latter. A single ticket will be 36 yuan (45 patacas) for a normal seat and 44 yuan for a first-class one – cheaper than some bus fares. Page 6
Greek’s myth busted in Amax court move T
he polite fiction that Hong Kong-listed Macau junket investor Amax Holdings and Taipa casino Greek Mythology are somehow separate operations has been swept away in a legal move by Amax in the Macau courts. Even though Amax is technically only a minority shareholder in the Greek Mythology operation, Amax has
taken upon itself the task of requesting all “unknown interested parties” who own shares of Greek Mythology (Macau) Entertainment Group Corporation Ltd to come forward. That’s according to court notices published in local media in the last two days. The notices say records of some shares “have been misplaced,” which led Amax to ask for the
shareholder registry to be replaced by a new one. A court hearing will be held at the Lower Court in September to try to reach a consensus between shareholders. In 2010, Greek Mythology turned a loan from a shareholder into new shares, thus reducing Amax’s stake to 24.8 percent. But, “with advice from professional legal advisers,”
Amax continued to claim it held a 49.9 percent stake. The dispute over shareholdings took a new twist after a recent “Triad-style” attack on Amax and Greek Mythology shareholder Ng Wai – and preparations to launch a US$200 million initial public offering in Hong Kong for an entity related to Greek Mythology. More on page 3
Tug-of-war over Lan Kwai Fong
HANG SENG INDEX 19550
The board of China Star Entertainment Limited, the owner of Macau hotel-casino Lan Kwai Fong, wants to reduce the company shares by almost half to enhance the assets per share ratio. China Star’s major shareholder, cinema producer Charles Heung Wah Kueng, has put forward an alternative bid. But it could require him to launch a takeover of the other investors.
19500
19450
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19400
19350
Gamblers’ tax to boost elderly pension?
July 10
HSI - Movers
Money from the city’s tax take on gamblers should be diverted to pay for an increase in the old age pension, a legislator said in a written enquiry. The idea is to use money from the 1.6 percent tax on behalf of the Macau Foundation that is levied on all bets. The plan comes from pan-democrat Ng Kuok Cheong.
Airline pays passengers
Name AIA GROUP LTD
1.11
CHINA MOBILE
1.00
COSCO PAC LTD
0.90
BOC HONG KONG HO
0.86
BANK OF CHINA-H
0.70
Matsu casino – blip on Macau chart
MTR CORP
-1.86
CATHAY PAC AIR
-2.00
CHINA COAL ENE-H
-2.43
CLP HLDGS LTD
-2.60
A single Taiwan casino resort built off the coast of China’s Fujian province is likely to shave at most only a few percent off Macau’s annual gross gaming revenue suggests an analyst. Another note to investors suggests however that Macau will need increasingly to appeal to visitors from beyond Guangdong, adding that increased regional competition could lower longterm rates of return.
CHINA RES ENTERP
-2.81
Page 4
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. Page 6
%Day
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Source: Bloomberg
2012-7-11
27˚ 33˚
2012-7-12
2012-7-13
27˚ 33˚
27˚ 31˚
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business daily July 11, 2012
macau
Buy-back offer splits Lan Kwai Fong owners China Star Entertainment wants to buy back shares but former film star Charles Heung counters, saying he wants ownership of the company he founded Vítor Quintã
vitorquinta@macaubusinessdaily.com
Photo by Manuel Cardoso
The company said it had made the offer last month because the trading price of its stock were “well below” its net asset value (NAV) per share and did not “reflect the profitability of the group”. It said its NAV per share
HK$344 million
Amount China Star Entertainment may pay to buy back 45.55 percent of its stock
Hong Kong film producer Charles Heung Wah Kueng wants to buy China Star Entertainment
T
he company that controls hotel-casino Lan Kwai Fong, Hong Kong’s China Star Entertainment Ltd wants to buy back almost half its outstanding shares, but an important shareholder, Hong Kong film producer Charles Heung Wah Kueng, is adamantly opposed. Mr Heung founded China Star Entertainment and wants to take control of the company instead.
China Star Entertainment told the Hong Kong stock exchange on Friday that it aims to buy back 982.9 million shares for HK$0.35 (US$0.05) each – more than yesterday’s closing price of HK$0.345. China Star Entertainment could end up paying as much as HK$344 million to cancel 45.55 percent of its stock, if enough shareholders take up the offer.
Airline sees success where others failed Thai Smile confident of Bangkok-Macau route
T
hai Airways International Co Ltd says its new Thai Smile Air brand holds a competitive advantage over its rivals, filling the gap between fullservice and budget airlines. Thai Smile Air managing director Woranate Laprabang said the airline, whose maiden flight was on Saturday, would have 174 seats a flight and offer business-class seats. The airline would collaborate with Thai Airways, permitting passengers to share Thai Airway facilities and collect air miles on the same membership card. There are now eight daily flights between Bangkok and Macau with
Thai Smile entering the route. Four are operated by AirAsia, two by Air Macau, and two by Thai Smile. Mr Woranate said the number of seats from the three airlines could exceed current demand but the industry would continue to develop, driven by more low-cost operators. The average cabin load factor on the Bangkok-Macau route would reach about 75 percent, he said quoted by The Nation newspaper. Thailand is one of Macau’s top tourist markets, with almost 200,000 Thai visitors arriving here last year. About 87,500 have visited in the first five months of this year. X.C.
reached HK$1 in the past year. China Star Entertainment said the buy-back would enhance “NAV per share and/or earnings per share”. It said the terms of the offer were fair and reasonable and aligned with the interests of the company and its shareholders. But Mr Heung “irrevocably and unconditionally” rejected the offer, saying the offer price was below the value of the shares. Mr Heung said so before China Star Entertainment paid him HK$618 million for his 49-percent stake in the Lan Kwai Fong hotel, which gave China Star control of the property. Mr Heung has made a counter-offer for up to 59.79 percent of China Star Entertainment, which would increase his stake to 76.5 percent. If that were to happen, Mr Heung could be obliged to make an unconditional mandatory offer for the shares he does not already own.
July 11, 2012 business daily | 3
MACAU
Amax says casino share records lost
InBrief
A court will decide if the company that runs the Greek Mythology casino should compile a new register of shareholders Vítor Quintã
vitorquinta@macaubusinessdaily.com
T
he company that operates the Greek Mythology casino, Greek Mythology (Macau) Entertainment Group Corp Ltd, has lost track of some of its shares, an important shareholder has alleged. In court notices published in the past two days, the shareholder – gambling operator Amax Holdings Ltd – has asked all “unknown interested parties” that own shares in the company to come forward. The notices say records of some shares “have been misplaced”, so Amax is asking for the old register to be replaced. A Lower Court hearing in September will to try to get shareholders to agree to accept a new register. If they cannot agree, dissenting shareholders will have 20 days to press their arguments, failing which the old register will be replaced according to Amax’s “initial request”. A spokesperson for Amax declined to comment on whether the forthcoming hearing was linked to questions Amax has raised about an infusion of capital into Greek Mythology (Macau) Entertainment in 2010. In 2010 Greek Mythology turned a loan from a shareholder into new shares, thus reducing Amax’s stake to 24.8 percent from. But, “with advice from professional legal advisers,” Amax continued to claim it held a 49.9 percent stake.
Lucrative sale
KEY POINTS Amax wants new register of shares in Greek Mythology Lower Court to seek agreement among shareholders on new register Shadow cast over listing of Greek Mythology holding company
A source told Business Daily the listing application must be approved by Stanley Ho Hung Sun’s SJM Holdings Ltd, the Hong Kong-listed parent of Sociedade de Jogos de Macau SA (SJM), which holds the gaming licence for the Greek Mythology casino. Gambling industry sources have said the IPO was meant to raise US$200 million (1.6 billion patacas). The proceeds are expected to go towards a new hotel on the same property on Taipa occupied by the casino. The IPO could also shore up Amax’s balance sheet. In March Amax’s debts exceeded its assets by almost HK$9.9 million (US$1.3 million), and Baker Tilly said this “may cast significant doubt about the group’s ability to continue”. But Hong Kong’s Securities and Futures Commission is likely to be wary of an IPO if Greek Mythology (Macau) Entertainment has, indeed, misplaced records of some of its shareholders. Greek Mythology (Macau) Entertainment is not the only casino operator to have had trouble keeping track of its shares. SJM’s parent company, Sociedade de Turismo e Diversões de Macau (STDM) announced in November 2001 that it had lost its register of shareholders. The process of replacing the register has yet to be completed because Mr Ho’s sister, Winnie Ho Yuen Ki, is pursuing more than 30 lawsuits against STDM in which she alleges that the loss of the records of her shareholdings reduced her stake in the company to 7.3 percent.
Photo by Manuel Cardoso
Amax reached an agreement in March with Greek Mythology
(Macau) Entertainment and other shareholders which was meant to settle the dispute. But Amax’s auditors, Baker Tilly Hong Kong Ltd, said financial results were unavailable and declined to give an opinion on results for the year ended March 31. The 2010 infusion of capital was meant to prepare the ground for an initial public offering in Hong Kong within two years of a new holding company called Greek Mythology Holdings Ltd.
Chui to Beijing for border crossing talks Chief Executive Fernando Chui Sai On will discuss the new border crossing when he meets with officials in Beijing during a three-day visit from Sunday. The new checkpoint is located on the site of Nam Yuet wholesale market. The crossing will stay open all day and handle about 250,000 visitors, easing the strain on existing facilities at the Border Gate.
Kam Pek owner profit to boom Paradise Entertainment Ltd, owner of Casino Kam Pek Paradise, said in a filing to the Hong Kong stock exchange it expects “to record a significant [year-on-year] increase in profit” for the first half of 2012. The improvement is mainly due to “the continued strong performance” of its gaming machine and equipment supplier LT Game, it said in the statement, but also to the sale of loss-making subsidiary LifeTec Pharmaceutical.
More jobseekers in second quarter There were 2,138-registered jobseekers in the second quarter of this year, an 8-percent rise from the previous quarter, the Labour Affairs Bureau said. The five most sought after jobs were security guard, construction worker, salesperson, secretary and cleaner. Among jobseekers, 52 percent were aged between 45 and 59, a similar percentage were educated to middle school, and half were fired from their previous job.
Casino revenue down early in July: analysts Gaming revenue will miss market expectations this month, according to United States bank Wells Fargo & Co. The bank’s analysts said casino revenue was HK$739 million (US$92.4million) a day in the first eight days of this month. The report said that represented a 2 percent increase after a “disappointing June result” and was 3 percent below the year-to-date average. Greek Mythology shareholders will meet at the Lower Court in September to try to reach an agreement over missing records
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business daily July 11, 2012
macau Brought to you by
HOSPITALITY
Lawmakers demand less miserly old age pension
Deep dependency The tourism arrival figures for the first five months of the year have defined trends that are likely to develop throughout the rest of the year. Macau’s extreme dependence on mainland tourists is well known. The data made available so far this year only underline that characteristic. Tourism here is exposed, so to speak, to three main dependencies. More than 97 percent of arrivals are from Asia. Of these, 86 percent come from the mainland and Hong Kong. Mainland arrivals represent about 71 percent of this group. Visitors, by origin (Jan -May 2012, homologous variation) -25- 20 -15- 10 -5
05
(%)
10 15 20 25 30 35
Taiwan
The Macau Foundation receives 1.6 percent of the gross revenue of the gaming industry
A legislator says some of the money the Macau Foundation gets could be used to pay for a more generous old age pension Tony Lai
tony.lai@macaubusinessdaily.com
Singapore Hong Kong Thailand
M
Japan China Korea Vietnam Philippines Others Tourists
Same-day
Comparing the changes in arrivals so far this year with last year, there appears to be little change. There is more variation apparent if we break down the figures according to tourists’ length of stay, same-day tourists and those who stay overnight.
Visitors, select origins Jan-May 2012 6000000
embers of the Legislative Assembly are calling for an increase in the old age pension, to be paid for by diverting gaming tax revenue from the Macau Foundation to the Social Security Fund. Pan-democrat Ng Kuok Cheong said in a written enquiry on Monday that the government should divert some of the money going into the Macau Foundation – 1.6 percent of the gross revenue of the gaming industry – to the Social Security Fund. Mr Ng said this would be “a more reasonable way to utilise the public resources” as there were problems with what the foundation did with its money. The Commission of Audit released last month a report saying the foundation failed to supervise properly the
institutions it supported, overpaying some of them. The Social Security Fund is not topped up automatically but the government put in 4 billion patacas (US$500 million) this year and will begin putting in another 10 billion patacas in the next two years. Mr Ng said extra money to sustain the fund could come from the “unnecessary” fiscal reserve. He called for an increase in the old age pension to “a reasonable level to ensure the livelihood of the elderly” – particularly during periods of high inflation. The annual inflation rate was 6.76 percent in May. Fellow-legislator José Pereira Coutinho supported Mr Ng, calling for an instant increase to 4,000 patacas (US$$500), to be paid by topping up the fund. Mr Coutinho said in a written enquiry on Monday that the government should keep its promise to shoulder the burden of financing
the fund until the central provident fund scheme reaches maturity. At present the elderly are eligible for a pension of 2,000 patacas per month. Mr Ng asked what gauge the government used to determine what constitutes a reasonable standard of living for the elderly. He pointed out that the subsistence income for an individual is now officially 3,360 patacas per month. The president of the Social Security Fund, Ip Peng Kin, hinted to the Legislative Assembly last week that the old age pension will not be pegged to the official subsistence income. “There are other measures which help the residents improve their life after retirement beside the pension,” Mr Ip said. He said the Standing Committee for Coordination of Social Affairs would probably discuss increases in the old age pension and social security contributions this month.
5000000
4000000
3000000
2000000
1000000
Bus firms’ pay rise irks legislators Mak Soi Kun and José Pereira Coutinho demand better bus services for higher subsidies
0 Total
Asia
China
HK
Xi Chen Those countries providing rapid growth in arrivals – faster than the growth in mainland visitors – are mostly minor ones: Vietnam, the Philippines, South Korea and the “others”. Arrivals from Hong Kong and Taiwan, which represent more sizeable numbers, both decrease. The number of Hong Kong visitors decreases in the same-day tourist category by 7 percent and by 4.5 percent for overnight stays. The slight increase in overnight tourist arrivals from Taiwan, 0.8 percent, is no match for the 22-percent decrease in sameday visitors. Based on May’s figures, the final arrivals tally for this year will suggest that diversification of tourism source markets still has a long way to go. J.I.D.
xi@macaubusinessdaily.com
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awmakers Mak Soi Kun and José Pereira Coutinho have called into question the government’s decision to increase the subsidies it pays the bus companies to run the city’s bus services. In official enquiries, both said the bus operators should improve their services before getting any more money out of the government. Mr Pereira Coutinho said the newest bus operator, Reolian Public Transport Co Ltd, had no right to ask for more money after failing to improve its services or pay a
50,000 pataca (US$6,260) fine the government imposed because its services did not meet minimum service standards. The government announced last month that Reolian and the other bus operators, Transportes Urbanos de Macau SARL and Sociedade de Transportes Colectivos de Macau SARL, would receive a 23 percent increase in their annual subsidies. Mr Mak and Mr Pereira Coutinho demanded that the government explain clearly how it had calculated the increase of 23 percent. The Transport Bureau has
previously said it used a formula that takes into account inflation, the average pay of bus drivers and fuel prices. The government sets bus fares, and the bus operators give the fares they collect to the government in exchange for an agreed amount per kilometre of bus route served. The increase in the amount the government pays the bus operators will not directly affect the public but it will affect the public finances. Government officials and members of the Legislative Assembly are due to meet on Friday to discuss the increase.
July 11, 2012 business daily | 5
MACAU
Taiwan project value ‘few hundred basis points’ of Macau gaming rev Impact of mooted Matsu resort from Bill Weidner likely to be muted: analyst Associate Editor
A
ny casino resort built on Matsu in Taiwan is likely to shave at most only a few percent off Macau’s annual gross gaming revenue suggests a note from Union Gaming Research Macau. Grant Govertsen said in Union’s note: “On a year-to-date basis, Guangdong has accounted for 49 percent of mainland visitation to Macau versus Fujian at just five percent. With a casino in Fujian’s backyard, we would expect Macau to lose some visitation to a Matsu integrated resort, while the same Matsu IR should grow the total Fujian outbound GGR pie. We believe a few hundred basis points of GGR risk represents the most significant exposure Macau faces.” Macquarie Equities Research in Hong Kong issued a note to investors on Monday saying the advent of one or more casinos in Taiwan might have an impact on long-term returns from future Macau casino projects on Cotai. The document from Gary Pinge and Elaine Lai said Macau had “significantly penetrated Guangdong’s (its immediate bordering province) gaming appetite and hence reaching into other provinces was critically important for longer term growth.” It added: “However, we think that over time, the entry of jurisdictions surrounding China into gaming will lower the rate of return that Macau’s casinos generate. On a positive note, some of the operators in Macau may also have the opportunity to invest in Taiwan.”
Opportunities knock Union Gaming said it didn’t rule out opportunities for Macau operators to invest in any Taiwan casino industry if it’s legalised, but added, “we would think any Macau operator is likely to seek Beijing’s approval before participating in any request for proposal in Taiwan”. Union Gaming stated that what it called “convenience gambling”
Island race – Matsu islands could be site for Taiwan’s first casino resort
offered by Matsu was likely to expand the market for casino visits among Fujian residents – the mainland Chinese province next door to Matsu. Fujian has a population of 35.4 million and Fuzhou, capital and nearest big city to Matsu has seven million people. But Union added that Matsu was unlikely to have a big negative impact on Macau. Union Gaming adds that on a yearto-date basis visitors from Taiwan accounted for only 3.6 percent of tourist arrivals – down 15.2 percent year-to-date compared to 2011. Former Las Vegas Sands Corp. executive Bill Weidner said at a press conference in Taiwan’s capital Taipei on Monday he intended to spend NT$60 billion (US$2 billion) to build a casino resort on the Matsu archipelago, construct an international airport and a 2.5-kilometre bridge and create up to 5,000 permanent jobs. Before that can happen, Taiwan’s
Further education grants near MOP200m
T
sources familiar with the political system. When a three-year building programme is added, it might mean a Matsu resort wouldn’t open until 2017 at the earliest.
Macau at your breakfast table. With Business Dail y. Find us in the following newsstands Pacapio at San Ma Lo Opposite HKSB (Nam Van) Beside Luso Bank Building Wen Hang Bank at San Ma Lo
More than 60,000 people have enrolled in continuing education programmes he government has spent more than 186 million patacas (US$23.3 million) this year on subsidies for residents taking continuing education courses and job retraining. The Education and Youth Affairs Bureau on Monday said more than 62,000 people were involved in continuing education programmes at the end of last month. Another 6,800 courses with more than 17,000 places will be offered in the second half of this year. Almost 200 education institutions, schools, associations and training
parliament needs to pass two separate bills: a casino bill to legalise such establishments; and an integrated resorts bill. That could take 18 months to two years say
In front of Portuguese Bookshop In front CTM at San Ma Lo In front Daiso shop at San Ma Lo Next to S. Lourenço market
centres will offer courses in commerce and management, languages, financial services, design, science, driving and sport. Examination courses are offered in cookery, languages, hotel service and accounting. The government launched the programme last year, offering to pay up to 5,000 patacas to each resident aged 15 or older who took a certified course before the end of next year. The bureau is surveying participants to find out more about their level of satisfaction with the programme. T.L.
Next to Human Resources Dpt Next BNU at Av. Sidonio Pais San Miu,Av. Horta e Costa Next to Metro Park Hotel
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business daily July 11, 2012
macau
Gongbei’s first Intercity train to arrive in October
Brought to you by
Swing shift The size and composition of the workforce have oscillated noticeably since 2008, the result of the dynamics of the economy and, mostly, the vagaries of the government’s labour policies. It has created uncertainties that have probably had a negative effect on investment. In particular, because the supply and cost of workers is irregular and labour shortages put pressure on wages that are unrelated to performance or productivity. In this analysis, the monthly figures are the midpoint of an average of three consecutive months’ results. Also of note, is that before 2008 the legal working age was lower, making the size of the workforce bigger. Labour force unit:103 340
330
320
Tourists could soon reach Gongbei from Guangzhou in less than an hour 310
Feb-08
Apr-12
The first half of 2008 shows strong growth. In just five months, the labour force grows by almost 10,000 workers or the equivalent of about a 3-percent increase. The workforce then drops sharply. In one month, between December and January, 6,000 workers are lost. The contraction goes on until the end of the 2009, when the labour force bottoms out at less than 312,000 workers. This is a 5-percent contraction in about 12 months. Growth then continues; slower in 2010, faster last year. The latest figures are close to the all-time high of about 340,000 workers, representing a 9 percent increase since the end of 2009. These swings are significant and abrupt. Whether by natural growth or migration, changes of this size represent instability for business. But they would also translate into broader changes in critical parts of the economy: food consumption, retail figures, in real estate and the provision of public services, among others. J.I.D.
The journey time from Guangzhou to Gongbei will to be shortened to 46 minutes when the Gongbei railway station opens Xi Chen
xi@macaubusinessdaily.com
T
rial runs of trains on the Zhuhai section of the Guangzhou Intercity Mass Rapid Transit railway could begin as soon as October, according to mainland Chinese officials. Reports in the mainland press have quoted officials across the border as saying they hope trains will be will be running on the Zhuhai section before the international air show in Zhuhai in November, and that the railway will be fully operational by the end of this year. Zhuhai is the main gateway to Macau for mainland visitors, most using the Gongbei border crossing. The new railway from Guangzhou to Zhuhai began operating in January last year but trains run only as far as Zhuhai North station. The opening of the city’s other four stations, including the Gongbei station, was delayed. When the line is complete, passengers from Guangzhou South station to Gongbei will be able to take either a non-stop train that
takes 46 minutes or a slow train that takes 76 minutes. An ordinary single ticket will cost 36 yuan (45 patacas) and a firstclass single ticket 44 yuan. At present, the journey from Guangzhou South to Zhuhai North takes 49 minutes. Passengers for Macau then have to take an express
36 yuan Ordinary single fare from Guangzhou South to Gongbei
bus which gets them to the Gongbei border crossing in half an hour. Another option is to take the intercity bus from Guangzhou to Zhuhai, which takes about two hours and costs about 65 yuan. Once the new railway is fully operational the travel time between Gongbei and Zhuhai Airport will also be cut to 25 minutes. The same journey currently takes 50 minutes by car. The main line between Guangzhou and Zhuhai will eventually be 117 km long, with 17 stations, and its trains will run at up to 200 km per hour. The branch line to Zhuhai Airport will be 35.3 km long, with seven stations, and the trains will run at up to 160 km per hour. The consensus from experts is the railway will bring more mainland tourists to the city, in particular visitors with interests other than gambling and from parts of the mainland other than Guangdong. The extra visitors will put the border crossings and Macau’s public transport under additional strain. Another railway project, a freight line between Guangzhou and Zhuhai, is due to be completed in October.
Weather Beijing 34/23o C Changchun 24/20o C
Harbin 27/21o C
Xian 37/22o C Shanghai 34/28o C Chengdu 30/23o C Kunming 27/19o C Haikou 34/26o C Sanya 31/25o 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
27/33o C
55/90 %
07/13
27/31o C
60/95 %
07/14
27/31o C
65/95 %
Shenzhen 33/26o C
ASIA (today)
Hong Kong 33/26o C
Manila
TOKYO
Jakarta
33/25o C
31/25o C
27/23o C
33/23o C
Macau 33/27o C
Bangkok
SEOUL
K. lumpur
33/25o C
SINGAPORE
24/21o C
33/25o C
taipei
33/26o C
Australia
China
Chinese Taipei
Hong Kong
Korea
Thank you! MAJOR SPONSORS
SPONSORS
Chief Executive Office
PARTNERS
Macau
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business daily July 11, 2012
Greater china
China trade surplus jumps on falter Below-forecast imports add pressure for growth measures Kevin Yao
C
hina’s June trade data yesterday stoked anxiety about the strength of domestic demand in the world’s second biggest economy as imports rose at only half the pace expected, signalling a need for Beijing to do more to bolster growth. Officials singled out the debt crisis in the European Union – China’s biggest trading partner – as key to Beijing’s ability to meet its 10 percent target for trade growth this year, with softening sales to the EU in the first half of 2012 seeing the United States overtake it as China’s top export destination. Annual import growth of 6.3 percent in June fell far short of the 12.7 percent forecast by economists and the 12.7 percent achieved in May, indicating both a drop-off in domestic demand and the running down of inventories by exporters worried about the weakness of new order growth. “In today’s ‘accentuate the negative’ world, this is going to put the focus on the domestic demand angle and the hard landing story,” Tim Condon, chief economist and head of Asian economic research at ING in Singapore, told Reuters. Import data eclipsed an
upside surprise in June export growth to 11.3 percent versus the 9.9 percent expected, leaving a trade surplus of US$31.7 billion against May’s US$18.7 billion. Brent crude oil sank 1.7 percent after the data, falling below US$99 a barrel, while Asian shares gave up gains to trade 0.5 percent down on the day and U.S. stock futures extended losses. “Exports are better than expected, but I don’t [think] this means that we shouldn’t be concerned about exports,” Sun Junwei, Beijing-based China economist with HSBC, said. Customs spokesman, Zheng Yuesheng, said as much in a news conference to release the data. “China’s exports to the European Union actually fell in the first half. Our exports to Germany have been falling for four consecutive months and exports to France have been on decline for three straight months, too. Our exports to Italy have been falling for 10 straight months since September,” Mr Zheng said. “The United States replaced Europe to become our largest exporting market in the first half.
Stocks turn lower Hong Kong Hong Kong stocks fell yesterday, with the benchmark index declining for a third day, after China’s imports missed estimates. The Hang Seng Index slipped 0.2 percent to 19,396.36 at the close in Hong Kong, with more than two stocks falling for each that rose. The gauge gained as much as 0.5 percent earlier after euro-area governments pledged to jump-start as much as 100 billion euros (US$123 billion) in loans to shore up Spain’s banks. The Hang Seng China Enterprises Index of mainland shares slid 0.6 percent to 9,386.66.
Shanghai China’s main stock index ended down 0.3 percent at a six-month low yesterday, partially led by property shares, after weak import figures for June highlighted worries over domestic demand. The benchmark Shanghai Composite Index closed at 2,164.4 points after diving 2.4 percent on Monday, its biggest daily percentage fall in more than a month. The main property index ended down 2.1 percent, with top property developer, China Vanke Co. Ltd, falling 1.24 percent.
Taiwan Taiwan stocks dropped 0.8 percent yesterday to extend losses to four straight sessions, dragged down by chip makers such as TSMC after Advanced Micro Devices slashed its outlook for second-quarter revenue. Market sentiment was also hurt by the island’s sluggish export orders data in June. The main TAIEX index dropped 58.61 points to 7,251.35, its lowest closing level since June 28. Among the top losing sectors, chipmakers fell 1.6 percent and panel makers 2.2 percent, while electronics and machinery both lost over 1 percent.
US$31.7 billion China trade surplus in June
However, U.S. economic recovery is not stable yet, and its demand for our goods has not returned to the level seen before.” China’s exports to the EU fell 0.8 percent in the first half of 2012 to US$163.1 billion, while to the United States they rose 13.6 percent to US$165.3 billion. China imported US$65.8 billion worth of U.S. goods in the first six months, up 7.9 percent.
Trade tensions That rise in exports to the United States is likely to
inflame critics of Beijing’s trade policies among Washington lawmakers who believe China manipulates its currency to give its exporters an unfair advantage. So too will news that China’s total trade surplus of US$68.9 billion in the first half was a 56.4 percent year-on-year increase. Trade tensions between the globe’s two biggest economies have risen recently, with the United States last week filing a complaint with the World Trade Organization in a row over Chinese import duties
HK property a risky investment Bubble threat remains despite slower growth – Tsang
P
roperty prices in Hong Kong grew at a slower pace and sales fell in the second quarter as global stock markets weakened, but the city’s financial chief warned yesterday that risk of a bubble will remain as long as interest rates stay low. John Tsang Chun Wah told legislators that market sentiment had moderated in the past two months after a sharp rebound in February. In May, prices grew by less
than 1 percent and in June registered transactions fell by 30 percent to 5,890, but Mr Tsang said the direction of the real estate sector was still unclear. “The property market...is under the influence of the weak external economic environment and ultralow interest rates and it’s difficult to predict its future direction,” Mr Tsang said. “But as long as the low-interest rate regime remains unchanged, the risk of the
property bubble remains.” Low interest rates and a flood of buyers from mainland China have pushed up Hong Kong real estate prices in recent years, fuelling broader inflationary pressures in the territory. Prices soared 94 percent over the last five years to end2011, according to brokerage Knight Frank. In answer to widespread local anger at being priced out of the market, Hong Kong’s new
As long as the low-interest rate regime remains unchanged, the risk of the property bubble remains John Tsang, Hong Kong’s financial secretary
July 11, 2012 business daily | 9
greater china
ring demand the United States. But Vice Commerce Minister Wang Chao said yesterday his ministry would continue open the fledging service sector more widely to foreign firms. “The Chinese government has done a lot of work in creating a fair investment environment in the country and we use the same rules when dealing with foreign firms and domestic ones,” Mr Wang said.
Falling demand
China’s exports to the European Union fell in the first half
on US$3 billion worth of U.S.-made autos. China’s exporters face rising risks of trade protectionism abroad even as Beijing makes fresh efforts to treat foreign and domestic investors equally, officials said yesterday. “Currently the world economy is still grim and there are rising uncertainties and unstable factors,” Mr Zheng said. “Chinese exporters face trade protectionism and the situation is very grim,” he said, noting the largest number of Beijing’s trade disputes last year were with leader Leung Chun Ying has proposed a number of countermeasures, including selling land for developments that would be restricted to Hong Kong residents only. The risk of a sharp correction in the city’s property market has grown as Europe’s debt crisis deepens and as the global economy sputters, reducing demand for goods from China and Hong Kong. Hong Kong’s private sector output fell for the second straight month in June, with new business from mainland China declining for the third consecutive month and at the sharpest rate since last November, according to a purchasing managers survey released last week. Hong Kong’s domestic exports fell 26 percent in January-April compared to the same period in 2011. For the month of April alone, domestic exports fell 23.4 percent compared to a year earlier. The uncertain economic environment may have also dampened developers’ appetite for new projects. Reuters
The government’s official annual target for growth in both imports and exports in 2012 is 10 percent, a level that Vice Premier Wang Qishan said just last week Beijing would achieve only with difficulty. Surveys of thousands of purchasing managers in big and small firms across China already suggest that gathering deflationary pressure is a function of falling demand in an economy in need of more policy easing to turn the tide. “Our house view remains cautious on the outlook for the U.S. and the European economies in the second half. We see some further deterioration of global PMIs and this means there are still strong headwinds for China’s export sector,” HSBC’s Mr Sun said. “This to me says more easing should be done to support domestic demand and that it will take more time for these measures to really take effect.” Data on Monday showed
analysis
KEY POINTS China imports up 6.3 pct in June from year ago June exports up 11.3 pct year-on-year United States overtakes EU as top export destination Rising exports to U.S. could inflame trade tensions
China’s consumer and producer prices eased more than expected in June, signalling falling demand for goods from the manufacturing capital of the world and the likelihood of more policy moves to support the slowing economy. Analysts polled by Reuters last week forecast China’s annual rate of GDP growth will have eased to 7.6 percent in the second quarter of the year versus 8.1 percent in Q1. GDP data is due on Friday. Reuters
Alibaba to get US$1b loan for Yahoo stake buyback Wendy Mock
A
libaba Group Holding Ltd will sign a US$1 billion four-year term loan with about seven banks on a club basis to fund a buyback of a stake of about 20 percent from Yahoo! Inc., a person familiar with the matter said. China Development Bank Corp. is also providing a US$1 billion four-year loan separately to help the country’s biggest e-commerce company repurchase the stake, the person said. Of the original underwriters and lead arrangers on a US$3 billion syndicated facility signed by the company earlier this year, HSBC Holdings Plc is not joining the new club, according to the person. The original members were Australia & New Zealand Banking Group Ltd, Credit Suisse Group AG, DBS Bank Ltd, Deutsche Bank AG, HSBC, and Mizuho Corporate Bank Ltd,
China June commodity import weakness is payback
according to data compiled by Bloomberg. Alibaba’s revenue exceeded US$1.8 billion in the first half, increasing more than 60 percent from the same period last year, the person said. Earnings before interest, tax, depreciation and amortization accounted for more than 40 percent of revenue in the first six months compared with 35 percent in the same period last year, according to the person. The company signed a US$3 billion facility, comprising US$2 billion in a bridge loan and US$1 billion in a three-year term loan, in February, the person said. The US$2 billion bridge portion was replaced by a US$1 billion three-year loan from CDB completed last month and the new US$1 billion four-year loan from CDB, according to the person. Bloomberg
Clyde Russell Reuters market analyst
I
f you take China’s June The key for future crude import commodity imports in isolation, volumes is whether stockpiling they look very bad indeed with continues. sharp declines in crude oil, iron If it does, then June’s soft number ore and copper. will be an aberration; if it doesn’t But one month of poor numbers then the record monthly imports doesn’t mean the world’s largest seen in the first five months won’t commodity consumer is in the be repeated for the rest of the midst of an economic hard landing, year. nor does it necessarily signal the That doesn’t mean growth will start of sustained weakness. collapse, but outcomes in the 21And they were poor numbers. 23 million tonne range could be Crude imports fell 14.8 percent expected. from May to 21.72 million tonnes, What’s surprising with iron ore is iron ore dropped 8.7 percent to that the weakness didn’t show up 58.31 million tonnes, while copper earlier, given the anecdotal reports slumped 17.5 percent to 346,223 of increasing hardship for China’s tonnes. steel mills and of traders deferring However, there is a grave risk in cargoes due to a lack of buyers. reading too much into the June Iron ore imports for the first five figures. Context is necessary. months of 2012 averaged 61.7 There is no doubt that China’s million tonnes a month, so June’s economy has lost momentum, outcome is about 5.5 percent which is after all what the below the average so far this year. authorities wanted to achieve to But the first six months saw prevent asset bubbles and tame imports gain 9.7 percent on the inflation. same period last year, more than The risk was always that the 50 percent above the 6 percent measures to cool growth would gain forecast for the full year in be too effective, and those risks a Reuters survey of analysts in mounted when the European debt December. crisis weakened one of China’s key This means that to achieve the export markets. 6 percent growth target, imports But through all the economic will have to be more like June for softening so far this year, the rest of the year, which means commodity imports have remained you would have to believe that robust – in fact, far more robust the authorities’ measures to boost than the economic fundamentals infrastructure spending won’t appeared to justify. work, or at least won’t have much Looking at crude oil first, imports impact before the end of 2012. for the first half were 11 percent With copper, the argument could higher than the same period in be made that the sharp drop in 2011, a pace almost three times June’s imports is finally proof of greater than the 4.1 percent sluggish demand not only in China, growth the International Energy but also for manufactured goods Agency forecasts for China’s 2012 globally. oil product consumption. Certainly May’s imports looked Of course, much of the boost in like an outlier and were largely crude imports was because of attributed to shifting stockpiles stockpiling, from London both Metal strategic and Exchange Through all the commercial, as warehouses economic softening new refining to cheaper units were storage in so far this year, commissioned. China. commodity imports The inventory It’s also building reasonable to have remained masked the assume that robust – in fact, softening July imports in actual will be sluggish far more robust demand, so as well than the economic the June because of the number is summer lull, fundamentals perhaps but again, if appeared to justify a better policy stimulus reflection of starts to kick the true state in by the fourth of China’s oil quarter, copper use. imports should However, at 21.72 million tonnes, start to accelerate again. even June’s crude imports were Overall, June appears to be the above the 2011 monthly average long-awaited payback after several of 21 million tonnes, meaning that unexpectedly strong months of even the weakest month so far in commodity imports. 2012 is beating what was achieved By itself, June’s weakness isn’t over the whole of last year. indicative of much. The key will be It’s also known that major refiner whether the poor outcome repeats Sinopec reduced crude runs itself or whether commodity imports and imports in June to cut high resume growth, albeit at a slower inventories. pace, in the next few months.
10 |
business daily July 11, 2012
asia
Tokyo exchange launching bid for Osaka bourse Merged stock exchange would be the third largest in the world
T
okyo Stock Exchange Group Inc. will begin its tender offer for Osaka Securities Exchange Co. today even as JO Hambro Capital Management Ltd., the OSE’s third-largest shareholder, said the bourses must ensure price concerns don’t derail the deal. JO Hambro wants to convert its 5.1 percent stake into equity in the merged exchange and doesn’t want disagreement over price to jeopardise the deal, Nudgem Richyal, a Singapore-based portfolio manager at JO Hambro, said in a telephone interview yesterday. Shares of Osaka Securities were unchanged at 459,000 yen (US$5,790) yesterday after gaining 1 percent since July 4, the day before Japan’s antitrust regulator approved the merger of the country’s biggest bourses. The Nikkei 225 Stock Average fell 2.3 percent in the period through yesterday. TSE’s tender offer for the OSE will run from today until August 22, OSE said in a statement yesterday. The TSE, which offered 480,000 yen a share for Osaka, has no plans
to change the merger conditions, Kazuhiko Yoshimatsu, head of corporate strategy, said yesterday. OSE shareholders plan to hold out for better terms from Tokyo, the Financial Times reported July 8, citing unnamed people familiar with the deal. “We’re very aware that there are some international money managers out there who want a better price,” said Mr Richyal. “My hope is that management will pay attention to that reality.” He wouldn’t comment on whether JO Hambro was satisfied with the current offer or on how it will vote. TSE’s bid, which values the Osaka bourse at 129.6 billion yen (US$1.63 billion), would create the world’s third-largest exchange based on turnover, according to data compiled by Deutsche Bank AG.
Fidelity Investments
support the merger, President Michio Yoneda said at a June 21 shareholders meeting. The Tokyo bourse needs to buy between 50 percent and 67 percent of Osaka’s 270,000 outstanding shares for the merger to be executed. Fidelity Investments is the biggest shareholder of the OSE, owning about 14 percent of outstanding shares, according to data compiled by Bloomberg. Fidelity declined to comment on the merger. Given the large holding by JO
US$1.63 billion
Bid for Osaka stock exchange
Masahiro Yada, a spokesman for Osaka, declined to comment. Owners of Osaka Securities’ shares
Hambro, “if this spreads to other shareholders it would probably impact the tender,” said Hiroshi Torii, an analyst at Deutsche Bank AG. “Raising the offer price would seem like a reasonable solution.” While the TSE’s share of domestic stock trading value is about 96 percent, it was 6.3 percent of the global total in 2011, according to a May 24 report from Deutsche Bank. OSE’s global share was 0.3 percent, making the combined trading value the third-highest after NYSE Euronext and Nasdaq OMX. For derivatives transactions, TSE and OSE combined made up 0.9 percent of global trading value, according to the report. “The potential benefits of the merger for all parties are large, and therefore I think ultimately all sides will take a pragmatic approach to ensure the deal succeeds,” said Jonathan Foster, Singapore-based director of Global Special Situations at Religare Capital Markets Ltd, who advises OSE shareholders in connection
India needs expansionary policy: business confederation Worries mount that delayed reforms will drag further already slowing economy
Concerns grow on growth slowdown
I
ndia urgently needs an “economic revival package”, a leading Indian business group said on Monday, adding the government was running out of time to spur growth.
The Confederation of Indian Industry’s call, which was echoed by other business groups, came after India recently posted 5.3 percent quarterly growth - the slowest in
New Zealand demand picks up Retail and house sales signal slim recovery
N
ew Zealand house prices rose for a second month to a record in June while spending on debit, credit and store cards gained for a fourth month, adding to signs of a recovery in domestic demand. Prices gained 0.3 percent from May, when they increased 1.7 percent, according to an index published by the Real Estate Institute of New Zealand yesterday.
The value of transactions on electronic cards rose 0.4 percent from May, when it increased a revised 1 percent, Statistics New Zealand said in Wellington. Rising house prices and consumer spending last month indicate modest economic growth at the end of the second quarter after gross domestic product jumped 1.1 percent in the three months through March. Reserve Bank
nine years - down from scorching nine percent-plus expansion a few years ago. “Macroeconomic conditions are worsening at a faster pace than anticipated and we need to stem this,” said CII president Adi Godrej, in a stark warning to the Congress party-led government about the state of Asia’s third-largest economy. “I am requesting that an economic revival package be announced” by the government and the central bank, Mr Godrej said in a meeting with C. Rangarajan, chairman of Prime Minister Manmohan Singh’s Economic Advisory Council. Mr Singh, a former World Bank economist lauded as architect of India’s reform process two decades ago, recently took personal charge of the finance ministry after Pranab Mukherjee quit to run for the mainly ceremonial role of president. The CII chief’s statements coincided with a report by the Paris-based Organisation for Economic Cooperation and Development that said India and China were slowing
faster than advanced economies. While the West would envy India’s five percent-plus expansion, experts say the nation needs to grow much faster to lift hundreds of millions of Indians out of poverty.
of New Zealand Governor Alan Bollard last month left the official cash rate unchanged at a recordlow 2.5 percent and signalled interest rates may not change until next year, citing tame inflation and a weakened global outlook. “The recovery in retail spending is likely to remain gradual,” Christina Leung, economist at ASB Bank Ltd in Auckland, said in an e-mailed note. “We continue to expect the RBNZ will hold off raising the cash rate until at least March.” The house price recovery is a sign of increased property demand, led by buyers in Auckland, home to
a third of the nation’s 4.4 million people, as new listings decline. “The constraint across the country appears to be shortage of properties to meet buyer demand,” REINZ Chief Executive Helen O’Sullivan said in an e-mailed statement. “This is most acute in Auckland.” House prices rose 1.7 percent in the past three months and were 5.3 percent higher than a year earlier, today’s report showed. The number of sales rose 17 percent from a year earlier, the institute said. The time needed to sell a house dropped to 37 days from 38 days in May and 44 days in June last year.
Limited room Mr Godrej, a billionaire who heads Indian consumer goods giant Godrej Group, said he knew the government’s room for manoeuvre was limited with India battling to curb gaping fiscal and current account deficits. But unless the government and central bank act now, he said, “a few months down the line the economy would probably go beyond the threshold where any credible intervention could salvage it.” The government must implement long-delayed reforms such as opening up India’s retail sector to more foreign investment, he added. It also needs to overhaul its tax system to bring in more revenue
Bloomberg
July 11, 2012 business daily | 11
asia with the merger. “There’s an awful lot of political capital that’s gone in to getting this deal to where we are today.”
Two steps Japan’s government wants the marriage of the country’s two largest bourses as a first step to creating a “comprehensive exchange” as it seeks to revive the nation’s standing as a financial hub. The country has three other stock exchanges, in the cities of Sapporo, Nagoya and Fukuoka, two commodities exchanges and a grain exchange. “The companies have reached a common recognition that a firm position within the domestic cash equities market and derivatives markets will be established and significant synergies will be created by combining the business of the companies,” Osaka’s board said in a statement yesterday. “The company believes that a purchase price of 480,000 yen per share for the company’s common shares in the tender offer is appropriate for the company’s shareholders.” The transaction will be conducted in two steps, with TSE bidding for as much as 67 percent of Osaka. Once that purchase is complete, Osaka’s shares will be swapped for those of the unlisted TSE, so
and boost business confidence. Even with India’s stubbornly strong inflation, the central bank should ease high interest rates, Godrej added, noting China had reversed its tight credit policy to spur growth and investment. “I can hardly overemphasize the importance (of such moves) at this juncture,” said Mr Godrej. However, the prime minister’s economic advisor Mr Rangarajan said India’s deficit woes meant the government has “no scope” to provide the massive stimulus it gave in 2008-09 when the global financial crisis erupted. The meeting with Mr Rangarajan followed a cover article by U.S. magazine Time that said India’s economy “needs a reboot” and branded Mr Singh, 79, “The Underachiever”. His reputation has taken a beating during his second term as premier amid a string of corruption scandals and charges of policy drift. But since taking over the finance ministry he has vowed to revive the economy’s “animal spirit”. The Time article drew a strong response from the Minister for Overseas Indian Affairs, Vayalar Ravi, who called it a “a frontal attack” on the prime minister and said the “criticisms are not acceptable to the government of India”. AFP
Japan eyes return to financial prominence
the new exchange remains publicly traded. The companies project the acquisition will close in January. “Shareholders are justifiably unhappy with the terms they are being offered, both the cash tender offer price and the shareswap,” said Mr Foster. “I do not think it is an attractive price.”
About US$32 billion in exchange takeovers have been scuttled since Singapore Exchange Ltd. made a bid for ASX Ltd in October 2010, according to data compiled by Bloomberg. Singapore’s deal fell through amid calls from the Australian public to maintain domestic control of stock trading.
R
Bloomberg
Singapore residents pay US$73 million to visit casinos, first half 2012 Government collects US$2 billion in casino’s tax revenue, past two years
S
ingapore collected S$93 million (US$73 million) from entry levies placed on locals visiting the city’s two casinos in the first half, according to Josephine Teo, minister of state for the Finance Ministry. The entrance fee of S$100 a day or S$2,000 annually from citizens and permanent residents amounted to S$195 million in 2011, Ms Teo said in Parliament. The government also collected more from the two casinoresort operators, Las Vegas Sands Corp. and Genting Singapore Plc, with the net gain in tax revenue amounting to S$900 million in fiscal 2010 and S$1.1 billion the following year, she said. “The casino operators have made more money, but at the same time it contributed to our tax revenues,” Ms Teo said. “Through these tax revenues, the government is able to provide support to Singaporeans in many areas and expand our resources.” Ms Teo’s comments,
in response to a query from a lawmaker, comes as the government is seeking public feedback to strengthen its Casino Control Act to further control criminal activities, improve social safeguards and tax administration. The proposed changes include limiting visits by “local, financially vulnerable patrons who visit the casinos frequently” and raising the maximum penalty imposed on casinos that flout the law to 10 percent of gaming revenue from the existing limit of S$1 million, according to a document posted on the government’s public consultation website.
Problem gambling The government has more than doubled its spending in the past two years to contain problem gambling, Ms Teo said yesterday. The levies aren’t directly “ring-fenced” to finance such programs, she said.
Rising tin exports, Indonesia efined-tin exports from Indonesia, the world’s largest supplier, surged 23 percent in June to the highest level in six months as smelters boosted sales on concern that prices may extend declines. Exports rose to 9,647 metric tonnes from 7,866 tons in May, according to data from the Trade Ministry yesterday. That’s the most shipped since 15,103 tonnes in December and higher than the median estimate of 7,300 tons in a Bloomberg survey
Hong Kong Exchanges & Clearing Ltd, Asia’s largest bourse by market value, said on Monday that shareholders of London Metal Exchange Ltd will vote July 25 on its US$2.2 billion bid for the world’s biggest venue for base metals futures trading.
published last week. Shipments were 10,875 tons in June 2011. Prices have plunged 28 percent from a six-month high in February on concern that the debt crisis in Europe and a slowdown in China, the world’s biggest consumer of metals, will cut demand. That will potentially hurt revenues at companies including Malaysia Smelting Corp. and PT Timah, the world’s second and thirdlargest producers. The metal, used in soldering and packaging, was shipped to 11
countries, with Singapore taking 7,328 tonnes, or 76 percent of the total, showed data, which is based on reports from surveyors prior to shipments. The country represents about 40 percent of global tin exports, according to St. Albans, England-based ITRI Ltd, an industry researcher. It has 39 registered exporters, mostly based in Bangka Belitung province, the main producing region, including PT Koba Tin, unit of Malaysia Smelting. Bloomberg
About 93,000 people are on a socalled exclusion list where they’re prevented from entering the two casinos, she said. Punters who make six to 10 casino visits a month are considered “high frequency gamblers” and are estimated to number 4,000 to 6,000, the Sunday Times reported, citing Chan Chun Sing, acting community development minister. Singapore added 15,000 citizens and residents to its list of 28,000 people banned from the city-state’s two casinos in June amid concerns that low-income gamblers are betting larger amounts at the gaming resorts. The island-city dropped its fourdecade ban on casinos to boost tourism, with Las Vegas Sands and Genting Singapore spending more than US$10 billion on two gaming resorts that opened in 2010. Gross domestic product growth, visitor arrivals and visitor spending reached record highs that year. Bloomberg
12 |
business daily July 11, 2012
MARKETS Hang SENG INDEX NAME AIA GROUP LTD ALUMINUM CORP-H
PRICE
Day %
VOLUME
27.35
1.109057
14448121
3.2
-1.538462
8707529
NAME
PRICE
Day %
VOLUME
CHINA UNICOM HON
10.12
-0.7843137
12919032
CITIC PACIFIC
11.78
-0.1694915
BANK OF CHINA-H
2.87
0.7017544
192643406
BANK OF COMMUN-H
5.02
-0.5940594
14804302
BANK EAST ASIA
26.85
-0.3710575
1765164
BELLE INTERNATIO
13.28
-1.775148
12862310
ESPRIT HLDGS
BOC HONG KONG HO
23.35
0.8639309
10323004
CATHAY PAC AIR
12.72
-2.003082
NAME
PRICE
Day %
POWER ASSETS HOL
58.75
-0.2546689
2792777
1305240
SANDS CHINA LTD
22.45
0.4474273
18553645
SINO LAND CO
12.2
-0.974026
2972044
92.85
-0.4823151
3176215
90.9
-0.547046
1003791
230.4
0.6113537
1464567
19.8
-0.5025126
9080142
WANT WANT CHINA
10.06
-0.984252
17758845
WHARF HLDG
42.55
-1.845444
4633301
CLP HLDGS LTD
65.45
-2.604167
3577338
CNOOC LTD
15.18
0.5298013
47279796
COSCO PAC LTD
10.04
0.9045226
5313267
SWIRE PACIFIC-A
9.42
-0.7376185
6091693
TENCENT HOLDINGS
HANG LUNG PROPER
26.75
-1.291513
4205824
TINGYI HLDG CO
3761948
HANG SENG BK
107.1
-0.1863933
1624673
HENDERSON LAND D
43.95
-0.4530011
2280128
77
-0.3880983
1444300
CHEUNG KONG
96.8
-1.626016
3896631
CHINA COAL ENE-H
6.43
-2.427921
30837053
CHINA CONST BA-H
5.08
-0.1964637
210061986
CHINA LIFE INS-H
20.8
-0.4784689
21683050
CHINA MERCHANT
24.15
0.4158004
2914478
CHINA MOBILE
85.95
0.9988249
8773620
CHINA OVERSEAS
18.44
-0.2164502
25024607
CHINA PETROLEU-H
6.43
-1.228879
62695216
CHINA RES ENTERP
22.5
-2.807775
1743053
CHINA RES LAND
16.02
0.6281407
10831985
CHINA RES POWER
15.86
0
CHINA SHENHUA-H
28.35
-1.391304
HENGAN INTL HONG KG CHINA GS
17.38
0.1152074
4445379
107
-0.6499536
2384776
HSBC HLDGS PLC
67.75
0.07385524
7151796
HUTCHISON WHAMPO
68.65
-1.009373
4406021
4.17
-0.2392344
248625828
HONG KONG EXCHNG
IND & COMM BK-H
VOLUME
SUN HUNG KAI PRO
MOVERS
14
34
1 19820
INDEX 19396.36
LI & FUNG LTD
14.24
-1.657459
16699992
HIGH
19818.9
MTR CORP
26.45
-1.855288
1218552
LOW
19355.99
NEW WORLD DEV
9.68
0.4149378
8919306
2928520
52W (H) 22835.03
PETROCHINA CO-H
9.49
0.1054852
75212540
15744650
PING AN INSURA-H
61.15
-0.9716599
6222744
(L) 16170.35
19350
06 -Jul
10-Jul
Hang SENG CHINA ENTErPRISE INDEX NAME
PRICE
DAY %
VOLUME
CHINA PACIFIC-H
24.8
-2.554028
8743600
6948800
CHINA PETROLEU-H
6.43
-1.228879
62695216
-1.538462
8707529
CHINA RAIL CN-H
6.32
0.1584786
8632596
19.9
-2.926829
15853226
CHINA RAIL GR-H
3.08
-2.531646
12906162
2.87
0.7017544
192643406
CHINA SHENHUA-H
28.35
-1.391304
15744650
CHINA TELECOM-H
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.04
0
87816884
AIR CHINA LTD-H
4.72
1.724138
3.2
ANHUI CONCH-H BANK OF CHINA-H
ALUMINUM CORP-H
NAME
5.02
-0.5940594
14804302
3.42
-0.2915452
46639289
14.22
-0.4201681
1614738
DONGFENG MOTOR-H
10.94
-1.618705
15639000
3.8
-1.298701
37075652
GUANGZHOU AUTO-H
6.16
-2.531646
5369636
CHINA COAL ENE-H
6.43
-2.427921
30837053
HUANENG POWER-H
5.66
0.5328597
29135331
CHINA COM CONS-H
6.75
-0.7352941
10974389
IND & COMM BK-H
4.17
-0.2392344
248625828
CHINA CONST BA-H
5.08
-0.1964637
210061986
JIANGXI COPPER-H
17.18
-1.490826
7665259
CHINA COSCO HO-H
3.55
-1.388889
10463384
PETROCHINA CO-H
9.49
0.1054852
75212540
CHINA LIFE INS-H
20.8
-0.4784689
21683050
PICC PROPERTY &
8.7
-2.027027
15384991
CHINA LONGYUAN-H
5.08
-0.1964637
3113000
PING AN INSURA-H
61.15
-0.9716599
6222744
CHINA MERCH BK-H
13.94
-1.274788
22317731
SHANDONG WEIG-H
8.58
-1.830664
3552000
BANK OF COMMUN-H BYD CO LTD-H CHINA CITIC BK-H
CHINA MINSHENG-H
6.88
-0.5780347
15021100
SINOPHARM-H
20.2
-0.7371007
2199618
CHINA NATL BDG-H
8.1
-1.339829
34202343
TSINGTAO BREW-H
46.2
1.538462
1887860
11.66
1.039861
6606089
WEICHAI POWER-H
26.3
-3.663004
3331718
CHINA OILFIELD-H
NAME
PRICE
DAY %
VOLUME
11.34
-2.072539
22159867
ZIJIN MINING-H
2.64
-1.492537
19307722
ZOOMLION HEAVY-H
9.26
-1.068376
13286519
ZTE CORP-H
12.9
-8.769448
16242757
YANZHOU COAL-H
MOVERS
6
33
1 9770
INDEX 9386.66 HIGH
9719.22
LOW
9359.35
52W (H) 12823.58 (L) 8058.58
9340
06-Jul
10-Jul
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.5
-0.3984064
45583100
DATANG INTL PO-A
5.55
-2.802102
9097214
SANY HEAVY INDUS
12.73
0.6324111
16743547
AIR CHINA LTD-A
6.35
2.419355
22778073
DONGFANG ELECT-A
16.14
-1.22399
7563414
SHANDONG GOLD-MI
31.98
-1.448382
6247214
6.2
0.6493506
5970768
EVERBRIG SEC -A
12.55
0.4803843
7539939
SHANG PUDONG-A
7.7
0.3911343
45089773
14.13
0.9285714
15837171
GD MIDEA HOLDING
9.98
0.8080808
32608917
SHANGHAI ELECT-A
4.42
-1.777778
4158387
15944097
GD POWER DEVEL-A
2.74
1.107011
126400533
19.32
-3.157895
21636373
NAME ALUMINUM CORP-A ANHUI CONCH-A BANK OF BEIJIN-A
9.36
-0.4255319
NAME
NAME
SHANXI LU'AN -A
BANK OF CHINA-A
2.79
-0.7117438
11888752
GEMDALE CORP-A
6.84
-1.582734
63199170
SHANXI XINGHUA-A
39.7
-2.361043
2510966
BANK OF COMMUN-A
4.36
0
35433019
GF SECURITIES-A
13.58
0.7418398
10607283
SHANXI XISHAN-A
14.59
-0.06849315
11566277
BANK OF NINGBO-A
9.61
-0.1039501
11496238
GREE ELECTRIC
21.44
0.327562
11325882
SHENZ DVLP BK-A
14.91
1.359619
12370989
13.89
-1.90678
21568562
SHENZEN OVERSE-A
7.02
-1.126761
36854604
27.73
1.873622
4131997
SUNING APPLIAN-A
8.5
1.190476
29276540 1321823
BAOSHAN IRON & S BYD CO LTD -A
4.15
-0.4796163
18674238
GUANGHUI ENERG-A
19.07
0.157563
3381702
GUIZHOU PANJIA-A
CHINA CITIC BK-A
3.92
0.2557545
9938603
HAITONG SECURI-A
9.23
1.09529
33171531
TSINGTAO BREW-A
38.73
-0.462606
CHINA CNR CORP-A
3.67
-0.8108108
19736838
HANGZHOU HIKVI-A
27.35
-2.041547
3558182
WEICHAI POWER-A
26.91
-0.6277696
3622262
CHINA COAL ENE-A
7.4
-0.2695418
6425292
HENAN SHUAN-A
63.65
2.827141
2705668
WULIANGYE YIBIN
35.31
-0.8146067
44808750
CHINA CONST BA-A
4.1
-0.243309
9666895
HONG YUAN SEC-A
16.56
1.532802
9742689
XCMG CONSTRUCT-A
13.35
1.830664
5354261
CHINA COSCO HO-A
4.6
0
4571052
HUATAI SECURIT-A
9.7
-0.6147541
12127720
XIAMEN TUNGSTEN
43.28
-0.7567072
3436462
CHINA CSSC HOL-A
22.31
-3.042156
5058821
HUAXIA BANK CO
8.89
0.3386005
13189614
YANGQUAN COAL -A
14.57
-0.3419973
9048836
CHINA EAST AIR-A
4.35
2.59434
23159504
IND & COMM BK-A
3.79
-0.2631579
27538311
YANTAI CHANGYU-A
71.17
1.540876
2314645
CHINA EVERBRIG-A
2.77
0.3623188
18779541
INDUSTRIAL BAN-A
12.44
-0.2405774
27884052
YANTAI WANHUA-A
12.95
-0.3846154
6736484
CHINA LIFE INS-A
18.64
0.2150538
11651365
INNER MONG BAO-A
40.91
0.392638
36978559
YANZHOU COAL-A
18.65
0.8108108
2644095
CHINA MERCH BK-A
10.16
0.09852217
47869636
INNER MONG YIL-A
21.7
0.2772643
18120731
YUNNAN BAIYAO-A
59.6
-2.295082
1862718
CHINA MERCHANT-A
10.91
0.09174312
7312767
INNER MONGOLIA-A
4.81
0
29812102
ZHONGJIN GOLD
21.18
-1.120448
6331079
CHINA MERCHANT-A
25.03
-3.433642
8940856
JIANGSU HENGRU-A
28.31
-1.290098
3209558
ZIJIN MINING-A
3.71
-1.329787
32412116
CHINA MINSHENG-A
5.87
0.3418803
55235954
JIANGSU YANGHE-A
146.5
0.1161758
1771629
ZOOMLION HEAVY-A
33388552
JIANGXI COPPER-A
23.15
-0.2585093
3278876
ZTE CORP-A INNER MONG YIL-A
CHINA OILFIELD-A
17.03
0.8288928
9242887
CHINA PACIFIC-A
22.51
1.487827
17058560
JINDUICHENG -A
12.77
0.8688784
3263873
CHINA PETROLEU-A
5.84
0.6896552
40740426
JIZHONG ENERGY-A
14.25
-2.995235
19333104
CHINA RAILWAY-A
4.39
0
10742168
KANGMEI PHARMA-A
15.53
-3.600248
22978781
KWEICHOW MOUTA-A
250.4
-1.699839
2698710
43.58
-3.155556
10460528
CHINA RAILWAY-A
2.51
-0.3968254
13805701
CHINA SHENHUA-A
21.84
-0.09149131
7958599
LUZHOU LAOJIAO-A
4.7
-0.6342495
25988946
METALLURGICAL-A
2.38
-0.8333333
12329729
2.48
1.22449
9823383
CHINA SHIPBUIL-A CHINA SOUTHERN-A
4.64
2.202643
18077529
NINGBO PORT CO-A
CHINA STATE -A
3.35
-0.887574
47408546
PANGANG GROUP -A
4.16
0.2409639
29485928
8.96
1.128668
MOVERS
119
9.7
1.890756
13.05
-5.503259
33360659
21.7
0.2772643
18120731
169
12 2480
INDEX 2406.71
CHINA UNITED-A
3.62
0.2770083
35898075
PETROCHINA CO-A
17642458
HIGH
2476.07
CHINA VANKE CO-A
9.54
-1.242236
59447305
PING AN INSURA-A
45.52
-0.1754386
16102497
LOW
2405.16
CHINA YANGTZE-A
6.68
-0.8902077
8651480
POLY REAL ESTA-A
12.53
-3.615385
54116946
CITIC SECURITI-A
12.15
0.4132231
46516814
QINGDAO HAIER-A
10.98
-3.684211
12284204
CSR CORP LTD -A
4.19
0.4796163
17757745
QINGHAI SALT-A
33.2
1.034693
6269859
DAQIN RAILWAY -A
6.41
-3.025719
80722181
SAIC MOTOR-A
13.09
1.003086
16905962
52W (H) 3137.92 (L) 2254.57
2400
06 -Jul
10-Jul
FTSE TAIWAN 50 INDEX NAME
PRICE DAY %
Volume
ACER INC
29.85 -0.8305648
12983615
ADVANCED SEMICON ASIA CEMENT CORP
24 37.9
-3.807615 0.7978723
FORMOSA PLASTIC FOXCONN TECHNOLO
77.9
0.9067358
5749455
111.5
-2.192982
20965361
62961274
FUBON FINANCIAL
30.5 -0.6514658
4764487
HON HAI PRECISIO
90.1
-1.958651
37580356
8828371
HOTAI MOTOR CO
201
-0.248139
362154
TPK HOLDING CO L
330
-6.911142
9651561
TSMC
79.1
-1.125
33470829
UNI-PRESIDENT
50.3
1.616162
13700889
UNITED MICROELEC
12.4
0.8130081
39317950
36.95
-2.119205
10739674
WISTRON CORP
ASUSTEK COMPUTER
265
0
6010377
AU OPTRONICS COR
11.4
-2.978723
50000863
HTC CORP
305
0.3289474
18892187
YUANTA FINANCIAL
13.9
0
11514636
182.5
-1.617251
16271344
HUA NAN FINANCIA
16.5
0
3929145
YULON MOTOR CO
51.9 -0.9541985
4285791
CATHAY FINANCIAL
29 -0.5145798
10563316
LARGAN PRECISION
571 -0.6956522
1733377
CHANG HWA BANK
15.7 -0.6329114
6377071
LITE-ON TECHNOLO
38.4
0.3921569
3429648
265
-3.636364
7651960
CATCHER TECH
77
1.851852
13174071
MEDIATEK INC
11.9
-2.057613
18686473
MEGA FINANCIAL H
22.4 -0.8849558
22991864
7
-0.990099
18464707
NAN YA PLASTICS
54.6
-2.673797
10990916
0
15252279
PRESIDENT CHAIN
159
0
861263
CHINATRUST FINAN
17.3 -0.5747126
21104702
QUANTA COMPUTER
77
-1.910828
22608078
CHUNGHWA TELECOM
95.6
12779000
SILICONWARE PREC
30.55
-3.62776
7963720 23509230
CHENG SHIN RUBBE CHIMEI INNOLUX C CHINA DEVELOPMEN CHINA STEEL CORP
28
0.2096436
6977794
SINOPAC FINANCIA
11.45
2.232143
94.6
0.6382979
6240743
SYNNEX TECH INTL
70.9
-1.253482
4143516
FAR EASTERN NEW
32.25
0.311042
3140124
TAIWAN CEMENT
36 -0.8264463
7577871
FAR EASTONE TELE
68.8
2.686567
6486999
TAIWAN COOPERATI
17.7
FIRST FINANCIAL
17.7
0
11496898
TAIWAN FERTILIZE
65.7 -0.9049774
5089941
FORMOSA CHEM & F
74.6 -0.5333333
4370937
TAIWAN GLASS IND
28.5
0
4412089
1115675
TAIWAN MOBILE CO
94.4
-1.564129
4180600
COMPAL ELECTRON DELTA ELECT INC
FORMOSA PETROCHE
28 -0.1782531
83
0.1206273
0
2339040
MOVERS
13
30
7 5080
INDEX 4952.20 HIGH
5077.46
LOW
4933.85
52W (H) 5979.37 (L) 4643.05
4930
06-Jul
10-Jul
July 11, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GAlAXy ENtErtAINMENt
MElco crowN ENtErtAINMENt
MGM cHINA HolDINGS
19.0 18.9 18.8 18.7
Max 18.98
Average 18.788
Min 18.64
last 18.92
18.6
SANDS cHINA ltD
Max 27.9
Average 27.270
Min 26.45
last 26.9
28.0 27.8 27.6 27.4 27.2 27.0 26.8 26.6 26.4
SJM HolDINGS ltD
11.30
11.25
Max 11.3
Average 11.257
Min 11.2
last 11.3
11.20
wyNN MAcAu ltD
22.7 22.5
14.8
17.1
14.7
17.0
14.6
16.9
22.3 22.1
Average 22.243
Max 22.65
Min 21.9
last 22.45
21.9
14.5 Max 14.76
Average 14.57
Min 14.52
Commodities ENERGY
NAME
PRICE
WTI CRUDE FUTURE Aug12
85.66
-0.383765554
-13.60564801
111.3799973
77.27999878
BRENT CRUDE FUTR Aug12
99.36
-0.956937799
-5.649985756
124.6999969
88.48999786
GASOLINE RBOB FUT Aug12
275.82
-0.043487715
2.649795311
326.7099857
243.0099964
870
0.201554852
-3.225806452
1046.5
801
2.894
0.381547
-11.66056166
4.921000004
2.174999952
NATURAL GAS FUTR Aug12 HEATING OIL FUTR Aug12
DAY %
YTD %
(H) 52W
Average 16.915
273.78
-0.40742088
-3.724021521
332.949996
250.8399963
1593.35
0.4964
1.8174
1921.18
1522.75
Silver Spot $/Oz
27.4525
0.7246
-1.3742
44.2175
26.085
Platinum Spot $/Oz
1445.04
-0.0318
3.6242
1915.75
1339.25
Palladium Spot $/Oz
586.26
0.5299
-10.2892
848.37
537.54 1832.25
LME ALUMINUM 3MO ($)
1925
1.529535865
-4.702970297
2675.25
LME COPPER 3MO ($)
7560
0.385075023
-0.526315789
9905
6635
LME ZINC
1854
0.542299349
0.487804878
2539.5
1718.5
16400
1.547987616
-12.34633886
25195
15980
15.23
-0.131147541
1.330671989
18
13.95499992
717.75
-1.678082192
22.43070362
733
499
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Sep12 Dec12
WHEAT FUTURE(CBT) Sep12
PRICE
(L) 52W
Gold Spot $/Oz
CORN FUTURE
16.8 Max 17.06
last 17
Min 16.82
CURRENCY EXCHANGE RATES
GAS OIL FUT (ICE) Aug12
METALS
last 14.56
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 %
1.0236 1.5537 0.9747 1.2321 79.4 7.9871 7.7544 6.3657 55.5 31.66 1.267 29.958 41.835 9433 81.28 1.20101 0.79304 7.8322 9.841 97.83 1.03
YTD %
0.5303 0.3034 0.1539 0.1463 0.1763 0.0013 0.0077 0.0864 0.7838 0.2843 0.3552 -0.0668 0.4327 0.1696 -0.3629 0.0058 0.1627 -0.129 -0.1402 0.0307 -0.0097
(H) 52W
0.2645 -0.0386 -3.755 -4.9379 -3.136 0.1565 0.1676 -1.1106 -4.3874 -0.3474 2.3362 1.0715 4.7926 -3.8588 -3.5039 1.3139 5.088 3.8559 5.1926 1.8706 0.0097
(L) 52W
1.1081 1.6618 0.9839 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 0.88861 9.3616 11.6793 114.18 1.0311
0.9388 1.5235 0.7071 1.2251 75.35 7.9823 7.7526 6.2769 43.855 29.63 1.1992 28.764 41.575 8458 72.057 1.00749 0.79045 7.8172 9.79 95.6 1.0288
MACAU RELATED STOCKS (H) 52W
(L) 52W
ARISTOCRAT LEISU
2.58
-1.149425
17.27272
3.25
1.88
801470
150.0999908
CROWN LTD
8.52
-1.274623
5.315202
9.29
7.45
1397083
815.5
-1.539390281
16.20947631
853.5
606.75
SOYBEAN FUTURE Nov12
1539.75
-0.516879341
27.85966369
1571.25
1115.75
COFFEE 'C' FUTURE Sep12
181.15
-0.65807513
-22.66808965
288.8500061
NAME
PRICE
DAY % YTD %
VOLUME CRNCY
SUGAR #11 (WORLD) Oct12
22.78
0.352422907
-0.219010074
26.03999901
19.23999977
AMAX HOLDINGS LT
0.069
-1.428571
-20.68965
0.119
0.06
6502000
COTTON NO.2 FUTR Dec12
71.1
0.580011399
-19.05737705
102.25
64.61000061
BOC HONG KONG HO
23.35
0.8639309
26.90218
24.45
14.24
10323004
World Stock MarketS - Indices NAME
CENTURY LEGEND
0.25
0
8.69565
0.38
0.204
0
CHEUK NANG HLDGS
2.93
-2.006689
4.642859
4.19
2.3
10050
CHINA OVERSEAS
18.44
-0.2164502
42.06472
19.16
9.99
25024607
CHINESE ESTATES
8.97
-0.2224694
-28.24
13.68
8.3
51500
CHOW TAI FOOK JE
10.28
-4.283054
-26.14943
15.16
8.55
8041800
EMPEROR ENTERTAI
1.41
0.7142857
27.02703
1.89
0.97
1200000
1
3.092784
138.0952
1.09
0.3
1986000
GALAXY ENTERTAIN
18.92
0.5313496
32.86517
24.95
8.69
7367083
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
12736.29
-0.2832655
4.245778
13338.66016
10404.49
NASDAQ COMPOSITE INDEX
US
2931.77
-0.1892876
12.53748
3134.17
2298.89
HANG SENG BK
107.1
-0.1863933
16.22355
124.3
84.4
1624673
FTSE 100 INDEX
GB
5669.68
0.7525772
1.747945
6084.08
4791.01
HOPEWELL HLDGS
22.35
-1.324503
12.53776
24.903
18.56
1990800
DAX INDEX
GE
6466.13
1.229889
9.626078
7523.53
4965.8
HSBC HLDGS PLC
67.75
0.07385524
14.83051
78.6
56
7151796
HUTCHISON TELE H
3.83
3.794038
28.09365
3.86
2.42
7035035
LUK FOOK HLDGS I
17.1
-4.040404
-36.90037
46.15
14.7
5697850
MELCO INTL DEVEL
5.8
-1.023891
0.519931
10.76
4.3
2518815
FUTURE BRIGHT
NIKKEI 225
JN
8857.73
-0.4400419
4.758891
10255.15
8135.79
HANG SENG INDEX
HK
19396.36
-0.1633202
5.218338
22835.03
16170.35
CSI 300 INDEX
CH
2406.706
-0.3861697
2.598927
3137.922
2254.567
MGM CHINA HOLDIN
11.3
1.073345
17.80462
17.183
7.6
997199
TAIWAN TAIEX INDEX
TA
7251.35
-0.8017828
2.534898
8839.14
6609.11
MIDLAND HOLDINGS
3.93
-1.007557
-0.6081608
5.217
2.887
514000
NEPTUNE GROUP
0.094
2.173913
-15.31532
0.151
0.08
100000
NEW WORLD DEV
9.68
0.4149378
54.63258
10.96
6.13
8919306
SANDS CHINA LTD
18553645
KOSPI INDEX
SK
1829.45
-0.3638087
0.2032031
2192.83
1644.11
S&P/ASX 200 INDEX
AU
4098.02
-0.4916388
1.022035
4657.4
3765.9
ID
4009.678
0.6181361
4.910686
4234.734
3217.951
FTSE Bursa Malaysia KLCI
MA
1624.29
0.245632
6.11212
1625.04
1310.53
NZX ALL INDEX
NZ
774.636
-0.335801
6.143557
806.015
700.441
JAKARTA COMPOSITE INDEX
PHILIPPINES ALL SHARE IX
PH
3482.82
-0.2200258
14.37682
3527.48
2695.06
22.45
0.4474273
2.277901
33.05
14.9
SHUN HO RESOURCE
1.13
0
13
1.32
0.82
0
SHUN TAK HOLDING
2.72
0
6.286192
4.668
2.241
325956
SJM HOLDINGS LTD
14.56
0.1375516
16.42844
20.711
10.079
6364999
SMARTONE TELECOM
15.56
3.183024
15.77381
18.5
9.8
3110000
16.9
-0.4711425
-13.33333
27.48
14.807
6481791
ASIA ENTERTAINME
3.95
-0.5037783
-32.82313
10.8692
3.66
48412
BALLY TECHNOLOGI
46.34
-1.571793
17.13852
49.32
24.74
562972 1500
WYNN MACAU LTD
HSBC Dragon 300 Index Singapor
SI
556.47
-1.6
12.12
na
na
STOCK EXCH OF THAI INDEX
TH
1204.42
1.47184
17.46773
1247.72
843.69
HO CHI MINH STOCK INDEX
VN
405.39
-0.6689209
15.31504
492.44
332.28
BOC HONG KONG HO
3
0
25.14666
3.15
1.81
Laos Composite Index
LO
995.48
0.1136421
10.67529
1107.3
876.33
GALAXY ENTERTAIN
2.5
1.626016
33.68984
3.24
1.08
2250
INTL GAME TECH
15.84
-0.2518892
-7.906981
19.15
13.12
2127576
JONES LANG LASAL
69.34
0.2312807
13.18969
96.05
46.01
318302
LAS VEGAS SANDS
41.56
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business daily July 11, 2012
Opinion
Will governmental folly now allow for a cyber crisis? Kenneth Rogoff
W
Professor of Economics and Public Policy at Harvard University and formerly chief economist at the IMF
hen the financial crisis of 2008 hit, many shocked critics asked why markets, regulators, and financial experts failed to see it coming. Today, one might ask the same question about the global economy’s vulnerability to cyber-attack. Indeed, the parallels between financial crises and the threat of cyber meltdowns are striking. Although the greatest cyber threat comes from rogue states with the capacity to develop extremely sophisticated computer viruses, risks can also come from anarchistic hackers and terrorists, or even from computer glitches compounded by natural catastrophe. A few security experts have voiced great alarm, including, most recently, Jonathan Evans, the head of the British Security Service (MI5). By and large, however, few leaders are willing to compromise growth in the tech sector or the Internet in any significant way in the name of a threat that is so amorphous. Instead, they prefer to establish relatively innocuous working groups and task forces. It is difficult to overstate the dependence of modern economies on large-scale computer systems. But
imagine if one day a host of key communications satellites were incapacitated, or the databases of major financial systems were erased. Experts have long identified the electricity grid as the most acute vulnerability, since any modern economy would collapse without power. True, many sceptics argue that with reasonable low-cost prophylactic measures, large scale cyber-meltdowns are highly implausible, and that doommongers overstate the worst-case scenarios. They say that the ability of cyberterrorists and blackmailers to take the global economy to the brink, as in the 2007 Bruce Willis movie Die Hard 4, is utterly fictional.
Regulation parallels It is difficult to judge who is right, and there are important experts on both sides of the debate. But there do seem to be an uncomfortable number of similarities between the political economy of cyberspace regulation and of financial regulation. First, both cyber-security and financial stability are extremely complex topics with which government regulators can hardly keep up. Industry remuneration for ex-
perts is far in excess of any public-sector salary, and the best minds are continually bid away. As a result, some argue that the only solution is reliance on self-regulation by the software industry. One hears this argument for many modern industries, from big food to big pharma to big finance. Second, like the financial sector, the tech industry is enormously influential politically through contributions and lobbying. In the United States, all presidential candidates must make pilgrimages to Silicon Valley and other tech centres to raise money. Excessive financialsector influence was, of course, a root cause of the 2008 meltdown and remains deeply implicated in today’s continuing eurozone mess. Third, with slowing growth in advanced economies, information technology seems to hold the moral high ground, just as finance did until five years ago. And crude attempts by governments to enforce regulation are likely to prove ineffective in protecting against catastrophe, while all too effective in strangling growth. In both cases – financial stability and cyber security – the risk of contagion creates a situation in which a
wedge can form between private incentives and social risks. Admittedly, progress in the technology sector overall often produces huge social-welfare gains, which arguably outstrip those produced by all other sectors in recent decades. But, just as with nuclear power plants, progress can go awry in the absence of good regulation. Finally, the greatest risks
But there do seem to be an uncomfortable number of similarities between the political economy of cyberspace regulation and of financial regulation
come from arrogance and ignorance, two human characteristics at the heart of most financial crises. Recent revelations about the super-viruses “Stuxnet” and “Flame” are particularly disconcerting. These viruses, apparently developed by the US and Israel to disrupt Iran’s nuclear programme, embody a level of sophistication far beyond anything previously seen. Both are deeply encrypted and difficult to detect once inside a computer. The Flame virus has the capacity to take over a computer’s peripherals, record Skype conversations, take pictures through a computer’s camera, and transmit information via Bluetooth to any nearby device.
Vulnerabilities ignored If the world’s most sophisticated governments are developing computer viruses, what guarantee is there that something won’t go awry? How can we be sure that they won’t “escape” and infect a much broader class of systems, or be adopted for other uses, or that future rogue states or terrorists won’t find a way to turn them on their creators? No economy is more vulnerable than the US, and it is arrogance to believe that US cyber superiority (to all except perhaps China) provides it with impenetrable security from attack. Unfortunately the solution is not so simple as just building better anti-virus programmes. Virus protection and virus development constitute an uneven arms race. A virus can be just a couple hundred lines of computer code, compared to hundreds of thousands of lines for antivirus programmes, which must be designed to detect wide classes of enemies. We are told not to worry about large-scale cyber meltdowns, because none has occurred, and governments are being vigilant. Unfortunately, another lesson of the financial crisis is that most politicians are congenitally incapable of making difficult choices until risks actually materialize. Let us hope that we are lucky for a while longer. © Project Syndicate
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July 11, 2012 business daily | 15
OPINION How to stop the fast march wires of drug-resistant tuberculosis Business Leading reports from Asia’s best business newspapers
Daily FT
Lisa Beyer Mary Duenwald
Bloomberg View Editors
Just In Time Technologies, a systems integrator in Sri Lanka specialising in software and IT solutions, announced that the company has formed a strategic alliance with the Virtual Computing Company (VCE), USA. VCE develops platforms for cloud computing. Under the strategic alliance, Just In Time Technologies will license and purchase products and services from VCE that will be marketed in Sri Lanka where a growing cloud based market is emerging. VCE’s delivers the industry’s first completely-integrated IT offering.
Korea Times Korean workers’ wages surged in the first four months of this year, sparking concerns that inflation expectations could build down the road, data showed yesterday. South Korean workers’ real wage grew an average of 3.83 percent in the January-April period from a year earlier, larger than an average 2.9 percent growth in consumer prices, according to calculation based data from the labour ministry and the state-run statistics agency. Last year, the country’s real wage declined 2.74 percent on-year as consumer inflation shot up to 4 percent.
Japan Times Core private-sector machinery orders fell a seasonally adjusted 14.8 percent in May from the previous month, the largest drop in more than seven years, underscoring weakness in capital investment amid lingering worries over the eurozone debt crisis and strong yen, the government said Monday. The core orders, which exclude those normally seen as volatile such as orders for ships as well as from electric utilities, were valued at ¥671.9 billion (US$8.5 billion), the Cabinet Office said. The figure marked the sharpest drop since April 2005, when officials started compiling comparable data.
Jakarta Globe Indonesia is asking Japan to drop the import tax it imposes on the nation’s plywood products, amid a planned revision on the two countries’ economic partnership agreement. Plywood is one of the country’s key exports and scrapping Japanese import duties could boost Indonesia’s exports and help plug its trade deficit. The Indonesian government said that since the 2007 signing of the economic pact Indonesia routinely registered a trade surplus, but that in April and May the country suffered deficits of US$879.3 million and US$336.7 million, respectively.
P
ublic health professionals have warned about drug-resistant tuberculosis for years. Now comes news out of India and China to feed the concern. Doctors in India have documented more than a dozen cases of TB so tenacious, it responds to no known drug. This is a scary proposition in a country where 2 million of the world’s 9 million annual TB cases occur and where malnutrition, overcrowding and a weak health system create a hotbed for the often-fatal disease. Conventional drug resistance is also turning out to be a problem in China, which has a million TB cases a year. In a study published this month in the New England Journal of Medicine, 1 of 10 TB patients there had multidrug resistance, and 1 in 120 had extensive drug resistance. Previously, resistance was thought to exist mainly in patients who’d had regular TB and didn’t complete the required six months of treatment or didn’t get sufficiently strong drugs, enabling the bacteria to develop resistance. But in the China study, most cases were in new patients. This means that resilient bacteria are being passed from person to person.
New approach needed This calls for a new approach to TB in the developing world. In wealthy countries, people who are suspected of having TB are immediately tested for drug-resistant strains. In poor ones, that test is done, at best, only after patients fail to recover on first-line medications, which provide them no benefit and only teach more bacteria to
become elusive. Screening all TB cases for resistance is an enormous challenge. The most common method for testing TB in the developing world is to examine sputum smears under a microscope; this misses about half of all cases and provides no information on resistance. Culture-based resistance tests take weeks to produce results. And conventional rapid tests that recognize the DNA of TB bacteria require sophisticated labs that are rare outside of developed countries. However, a recent innovation makes mass screening feasible. A breakthrough test, which detects resistance to the popular TB drug rifampicin – a strong indicator of multidrug resistance – provides results in two hours and can be conducted without an advanced lab. Called Xpert MTB/RIF, it was designed by California-based Cephied Inc. in collaboration with the nonprofit Foundation for Innovative Diagnostics with funding from the Bill and Melinda Gates Foundation. In mid-June, Unitaid, a global health organization housed at the World Health Organization and financed mainly by airline ticket taxes, and the Stop TB Partnership, a public-private umbrella group also housed at the WHO, allocated US$40 million to deploy the test in 20 countries. This is an important step to making it universally available.
Public health issue Ideally, TB patients found to have mutant strains would then receive the right treatment. Because advanced regimens can cost 50 to 200
times the US$20 it typically costs to treat ordinary TB, a significant investment by donors and governments in affected countries is needed. The Stop TB Partnership estimates it will take US$7.1 billion to monitor, diagnose and treat drug-resistant TB
Controlling drug-resistant TB is expensive, but so is inaction. Attacking drugresistant TB is not so much a cost as an investment
in the developing world. As relatively prosperous countries, India and China, which fund just 59 percent and 67 percent of their TB budgets respectively, should become self-sufficient and, with other emerging economies, contribute to the global effort. Controlling drug-resistant TB is expensive, but so is inaction. TB spreads easily through the air when an infected person coughs, sneezes or even speaks. It respects no borders, particularly in a world of increasing international travel. All three Indian cities where the untreatable strain has been identified – New Delhi, Mumbai and Bangalore – are popular business destinations. The last time the U.S. faced a serious outbreak of multidrugresistant TB, in the late 1980s, New York City alone spent more than US$1 billion controlling it. Attacking drug-resistant TB is not so much a cost as an investment. Bloomberg View
16 |
business daily July 11, 2012
CLOSING Diamond gets 2 million pounds
IMF chief ‘alarmed’
Barclays will give former Chief Executive Officer Robert Diamond a 2 millionpound (US$3.1 million) payoff, about a tenth of his full entitlement, after politicians protested his role in the Libor-fixing scandal. The CEO voluntarily agreed to forgo deferred bonuses valued at as much as 20 million pounds, Chairman Marcus Agius told lawmakers at a hearing in London yesterday. Barclays had been under pressure to limit Mr. Diamond’s severance after the lender was fined a record 290 million pounds last month for attempting to rig the London interbank offered rate.
IMF chief Christine Lagarde said yesterday that signs of increased protectionism amid deteriorating global economic conditions were “alarming”, and warned such measures affect everyone. “The latest report by the WTO is quite alarming because there is a rise of protectionism,” she said at a business forum in Jakarta. She also warned that “no country is immune” from the effects of protectionism. WTO Director General Pascal Lamy warned late in May that an increase in protectionist policies across the world’s 20 major economies had hit 4.0 percent of the group’s trade.
LIBOR issues first signalled in 2007 Onset of financial crisis may have sent the issue offstage
T
he Federal Reserve Bank of New York may have known as early as August 2007 that the setting of global benchmark interest rates was flawed. Following an inquiry with British banking group Barclays Plc in the spring of 2008, it shared proposals for reform of the system with British authorities. The role of the Fed is likely to raise questions about whether it and other authorities took enough action to address concerns they had about the way Libor rates were set, or whether their struggle to keep the banking system afloat through the financial crisis meant the issue took a backseat. A New York Fed spokesperson said in a statement that “in the context of our market monitoring following the onset of the financial crisis in late 2007, involving thousands of calls and emails with market participants over a period of many months, we received occasional anecdotal reports from Barclays of problems with Libor. “In the Spring of 2008, following the failure of Bear Stearns and shortly before the first media report on the subject, we made further inquiry of Barclays as to how Libor submissions were being conducted. We subsequently shared our analysis and suggestions for reform of Libor with the relevant authorities in the UK.”
Riding on fixed rates
The Fed statement did not provide the precise timing of the communication with the British authorities. Bear Stearns collapsed in early March 2008 and was then acquired by JPMorgan. Barclays last month agreed to pay US$453 million to British and U.S. authorities to settle allegations that it manipulated Libor, a series of rates set daily by a group of international banks in London across various currencies. The rates are an integral part of the world financial system and have an impact on borrowing costs for many
people and companies as they are used to price some US$550 trillion in loans, securities and derivatives. By manipulating Libor, banks could have made profits or avoided losses by wagering on the direction of interest rates. During the enormous liquidity problems in the financial crisis they could, by reporting lower than actual borrowing costs, have signalled that they were in better financial health than they really were. So far, the scandal has been more of a British affair, prompting the resignation of Barclays top three
executives, condemnation from the British government amid a public outcry, and questions about the lack of oversight from British regulators. But the deepening investigation by regulators in Britain, the United States, and other countries is expected to uncover problems well beyond Barclays and British banks. More than a dozen banks are being investigated for their roles in setting Libor, including Citigroup, JPMorgan Chase & Co, Deutsche Bank, HSBC Holdings, UBS and Royal Bank of Scotland. Reuters
OECD sees job crisis to stay, weak recovery Youngsters and low-skilled to suffer the most
U
nemployment in advanced economies will remain high until at least the end of 2013, with young people and the low-skilled bearing the brunt of
The line will not go away anytime soon
what is by far the weakest economic recovery in the past four decades, the OECD said yesterday. The jobless rate in the 34-country OECD area will still be stuck at
7.7 percent at the end of next year, close to this May’s 7.9 percent rate and leaving 48 million people out of work, the Organisation for Economic Cooperation and Development said in 2012 Employment Outlook. The recent deterioration in the economic outlook was very bad news for the labour market, OECD Secretary-General Angel Gurria said. “It is imperative that governments use every possible means at their disposal to help jobseekers, especially young people, by removing barriers to job creation and investing in their education and skills,” said Mr. Gurria. He presented the report in Paris, where the think tank is headquartered. Countries needed to tackle the jobs crisis with appropriate macroeconomic policy measures, including immediate steps to stabilise Europe’s banking system. There was also a case for some easing of fiscal policy if governments retain room for budgetary manouevre, the OECD said. The challenges facing policymakers were in some respects unprecedented, according to the report:
- Almost three years into the recovery from the trough of the global financial crisis, the May jobless rate was just 0.6 percentage points below the post-war high of 8.5 percent touched in October 2009. - Youth employment has declined by almost seven percentage points, relative to overall employment, since the start of the crisis, while lowskilled employment has dropped almost five percentage points. - Temporary employment has picked up strongly because of firms’ reluctance to rehire workers on open-ended contracts. - Long-term unemployment has jumped to 35 percent of the jobless total from 27 percent before the crisis, raising the spectre that the increase becomes structural as skills erode. Despite the grim environment, the OECD called for bold structural reforms in labour and product markets. For example, governments could tap a rich seam of job growth by opening the retail trade and professional services to greater competition. Reuters