Year I - Number 75 Friday July 13, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00
www.macaubusinessdaily.com
New HK leader’s handpicked aide arrested Top Hong Kong officials allegedly bought flats in the same building then leased them to each other while collecting civil service rent allowances, claims Apple Daily. One, Mak Chai Kwong, has been arrested for corruption – only a fortnight after being named as development secretary by Leung Chun Ying, Hong Kong’s new chief executive. Page 16
Appreciate, accumulate
Savers want more yuan bank products C
hina’s yuan has appreciated by more than 30 percent against the pataca since 2005, when the mainland stopped fixing the exchange rate and let the currency float within a fairly tight band. The first yuan certificates of deposit first issued here last year by Bank of China were nearly 2.4 times oversubscribed. And by the end of 2011 there was 41.75 billion yuan deposited in Macau banks. But there are few other yuan-denominated savings products currently in the market. It means the ones that do exist are massively oversubscribed. “There should be more yuan banking products in the territory so that residents
can take advantage of the [appreciation] trend,” says Joey Lao Chi Ngai, chairman of the Macau Association of Economic Sciences. He believes Macau is in a good position to take advantage of the internationalisation of China’s currency. Since 2008 China has signed a series of bilateral agreements with other countries to settle trade in yuan, paving the way for the currency to be more widely used. Mr Lao says that because Macau is a small market, it should cooperate with the mainland. “Macau can also act as a yuan settlement centre for businesses from Portuguese-speaking countries,” he said. More on page 3
‘Show your books’ pan-dems tell associations
HANG SENG INDEX 19400
Political reform group New Macau Association is urging publicly funded community associations to publish their accounts. A law in the years of the Portuguese administration required groups to do so if their subsidy exceeded an amount set by the governor of the day. But that statute has not been enforced for years, says Jason Chao Teng Hei of New Macau Association.
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Control freak tendency feared by investors
July 12
Nervous investors are seeking any intelligence they can find on possible political risks to Macau gaming, several analysts tell Business Daily. They say backers worry what China gives in terms of relatively open access to Macau for its citizens and their money, China can also take away. Not everyone in the financial community is convinced that China’s macroeconomics alone account for the VIP revenue slowdown.
Airline pays passengers
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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 compenAny plans to increase subsidies offered to public bus companies sation alone. should future be discussed in the Legislative Assembly say Two AirinMacau flights from first Taoyuan Macau’s influential community associations. They welcomed the in Taiwan to Macau were delayed government’s suggestion that an already proposed 23 percent subsidy on Saturday – one for six hours berise should performance-linked, but say there’s nothing in the bus cause the be airline did not have pilots firm contracts spelling out what those performance targets should be. to fly the plane.
Performance guide needed for bus firms
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HSI - Movers Name
%Day
CHINA PETROLEU-H
2.29
CHINA COAL ENE-H
0.00
ESPRIT HLDGS
-0.21
SINO LAND CO
-0.32
CLP HLDGS LTD
-0.38
TINGYI HLDG CO
-3.37
ALUMINUM CORP-H
-3.47
CHINA CONST BA-H
-3.65
CHINA UNICOM HON
-3.76
BANK OF COMMUN-H
-3.82
Source: Bloomberg
2012-7-13
2012-7-14
2012-7-15
27˚ 32˚
27˚ 31˚
27˚ 31˚
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business daily July 13, 2012
macau
Associations should bare their accounts, pan-democrats say Forcing subsidised associations to be open about their finances is simply a matter of applying the law, the New Macau Association says Tony Lai
Photo by Manuel Cardoso
tony.lai@macaubusinessdaily.com
The New Macau Association wants to know what other associations do with the public money they are given, namely by Macau Foundation
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he New Macau Association has urged governmentsubsidised associations to publish their annual accounts to comply with a law that has fallen into disuse. The president of the association, Jason Chao Teng Hei, told reporters after delivering a petition to the chief executive’s office yesterday that the government had never enforced a provision in a 1999 ordinance that regulates associations. The provision says “associations receiving subsidies or any kind of funding from public bodies must publish their annual statements of account if the total amount of their subsidies exceeds a sum set by the governor”. Statements of account should be published in a Macau newspaper, the law says. Mr Chao said neither the last Portuguese governor, Rocha Vieira, nor the chief executives that succeeded him, Edmund Ho Hau Wah and Fernando Chui Sai On, had enforced the provision. “The Macau Foundation or other government bodies can approve enormous amounts of grants to the associations without supervision from the public,” said Mr Chao. “The implementation of the law can add transparency to such procedures.” The pan-democrats handed a
The Macau Foundation or other government bodies can approve enormous amounts of grants to the associations without supervision from the public Jason Chao Teng Hei
letter to a representative of the chief executive proposing that the government make associations publish their accounts if they receive 498,000 patacas (US$62,250) or more in subsidies in any given year. Mr Chao said they had suggested this amount after analysing the Macau Foundation’s records for last year. He said that applying the law could also improve the way the Macau Foundation disburses money. The Commission of Audit criticised the foundation last month for inadequate supervision of bodies it subsidises, which meant some were paid too much.
Mr Chao also told reporters that the New Macau Association would make a complaint to the Public Prosecutions Office about the Chinese-language Macau Daily News. The pan-democrats allege that the newspaper breached the conditions of the grant of the land on which it premises sit by leasing part of the building to the Macau Civility Development and Research Centre as an office, for which it receives “a monthly service fee of 120,000 patacas”. The association alleges that the government granted the property for the use of the newspaper only.
Publications face govt once-over
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he government will actively monitor publications before supporting them financially, the Public Administration and Civil Service Bureau has said. The bureau’s comment came in a response to an inquiry by Legislative Assembly member Chan Meng Kam. Mr Chan cited publishing industry statistics and said the city had 454 registered publications last year, of which 246 were published by government bodies and 118 by 71 associations.
Mr Chan questioned the government’s use of resources and asked for an evaluation of the purposes and contribution towards society made by many of the publications. The bureau said the government always made a thorough audit before approving grants. It had consulted the Macau Foundation, the Education and Youth Bureau and the Cultural Affairs Bureau to ensure quality and effectiveness. Any publisher applying for a Macau Foundation grant would now be
required to show a sample copy of its publication receiving sponsorship. It would also offer civil servants more courses in auditing to try and ensure that public resources were used appropriately. Last month, the Audit Commission released a report that criticised the Macau Foundation for the way it disburses grants. The foundation receives 1.6 percent of the gross revenue of the gaming industry. X.C.
July 13, 2012 business daily | 3
MACAU
Photo by Manuel Cardoso
Yuan could be better than a one-way bet
If the yuan is not rising fast enough for investors, there are ways to get an even bigger return on the currency – if you are quick Xi Chen
xi@macaubusinessdaily.com
A
stash of yuan in the bank is more than just the licence to print money that comes with holding a currency that has nowhere to go but up, experts say. They say it is also presents an opportunity to make yuandenominated investments that are equally sure bets as the currency comes to be used more widely on the world stage. The question is whether the supply of yuan-denominated investment instruments can keep up with demand.
In a paper titled “Macau’s yuan market – present and future development” he says Macau was allowed to begin doing business in yuan in 2004, and the trickle of the currency into the city has now become a flood. Between then and now the amount of yuan deposits has grown nearly tenfold and they now account for over 10 percent of all deposits here. Last year alone yuan deposits grew threefold to 41.75 billion yuan (52.3 billion patacas), Monetary Authority of Macau data show. Corporate or institutional deposits accounted for two-thirds of this sum, having grown from hardly anything in late 2009. Individual deposits accounted for 14.5 billion yuan worth.
Limited choice
41.75 billion yuan Deposits in Macau banks at the end of last year
The yuan has appreciated by more than 30 percent against the pataca since 2005, when the mainland stopped fixing the exchange rate and let the currency float within a fairly tight band, said Joey Lao Chi Ngai, chairman of the Macau Association of Economic Sciences. Mr Lao points out that the city had the chance to jump on the yuan gravy train just before it pulled out.
Not satisfied with what they make from the appreciation of the currency and the interest the banks pay, many investors have been looking for an even better return on their yuan. Bank of China Ltd’s Macau branch issued last year the city’s first yuan certificates of deposit, amounting to 1 billion yuan. They were nearly 2.4 times oversubscribed. Yuan-denominated funds have also prospered, and Bank of China also began selling last year the city’s first yuan fixed-income fund. Since then the bank has offered a range of yuan-denominated instruments, particularly fixedincome instruments, which give investors exposure for as little as US$1,000 (8,000 patacas). Bank of China also began this year offering its own structured products, in yuan and US dollars, which protect the initial investment while offering potential for good returns. Mr Lao says that as the yuan circulates more widely, demand for new ways to invest the currency are bound to grow, and the question is whether supply can keep up. “There should be more yuan banking products in the territory so that residents can take advantage of the trend,” he says.
There should be more yuan banking products in the territory so that residents can take advantage of the trend Joey Lao Chi Ngai, chairman of the Macau Association of Economic Sciences
Macau’s financial regulator has been negotiating with the mainland’s central bank about ways to make the city a place for settlement in yuan of trade between China and Portuguese-speaking countries. Investors may opt to invest in yuandenominated bonds. The mainland has been gradually opening its debt market since 2009. Foreign companies in the mainland can now issue yuan-denominated bonds there. International agencies such as the World Bank and Asian Development Bank have issued panda bonds there. And some 2 trillion yuan worth of dim sum bonds – yuan-denominated bonds issued in Hong Kong – have been sold. But another University of Macau professor, William Cheung Ming Yan, advises investors to be cautious. He and Mr Lao agree that investors need more education in finance. “Sitting on a pile of cash is still better relative to investing without any research,” Mr Cheung says.
But apart from Bank of China, the banks here offer a limited choice of yuan instruments. Most Macau investors must invest through Hong Kong accounts.
In the vault Mr Lao believes that Macau is in a good position to take advantage of the internationalisation of the yuan. The mainland has accelerated the internationalisation of its currency in recent years. Since 2008 it has signed a series of bilateral agreements with other countries to settle trade in yuan, paving the way for the currency to be more widely used. But Mr Lao says that because Macau is a small market, it should cooperate with the mainland. “Macau can also act as a yuan settlement centre for businesses from Portuguesespeaking countries,” he said.
Sitting on a pile of cash is still better relative to investing without any research William Cheung Ming Yan, University of Macau professor
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business daily July 13, 2012
macau Brought to you by
HOSPITALITY
Nervous investors seek news on political risk in Macau
A heavyweight arrives The number of Asian tourist arrivals in Macau is so overwhelming that it seems slightly irrelevant to talk about visitors from other source markets. Asian tourists alone will define the trends and patterns of tourism arrivals here. From January to May of this year, the cumulative number of Asian arrivals represented about 97 percent of all arrivals. The chart below uses a logarithmic scale to accommodate the enormous difference in arrival statistics.
Changes in visitors, by origin 1 000 000
10 000
But market currently too focused on gross revenue: analyst
AFRICA
OCEANIA
EUROPE
AMERICAS
ASIA
Associate Editor
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Comparing the first five months of this year to the same period last year, tourist arrivals from Asian nations increased by about 295,000 people or about 6 percent growth. Arrivals from the rest of the world grew by almost 8 percent. Of course it is quite meaningless to compare the two numbers since, in absolute terms, that represents an increase of about 11,000 visitors for a whole year – the same as an extra two weeks’ worth of Asian visitors.
Changes in visitors shares, by origin
ASIA
AMERICAS
EUROPE
OCEANIA
AFRICA
-0.05 -0.04- 0.03 -0.02- 0.01 -0.000 .010 .020 .030 .04
The chart shows arrivals according to their home continent. It compares this year and last year and shows the difference in arrival numbers. The share of arrivals from the Americas remains virtually unchanged, with an increase of just 0.0006 percentage points. The biggest change is registered in arrivals from Oceania – an increase of one-hundredth of a percentage point. Whatever trends Asia sets, Macau’s tourism sector will follow. Even a 2-percentage point differential increase in arrivals from the rest of the world translates into a decrease of less than 0.05 percentage points in the Asian share. J.I.D.
I
nvestors are trying to understand how much of Macau’s gaming revenue slowdown is due to macroeconomic issues in China, and how much – if at all – it’s linked to the transition in China’s political leadership say several analysts. “Almost no investors ask about whether say Sands China will get enough tables for phase two of Sands Cotai Central – but they all want to know whether the market slowdown – particularly on the VIP revenue side – is being driven by China’s domestic politics,” said one analyst who asked not to be identified. A second told Business Daily: “The likelihood is it’s mainly economics that is slowing the market. But investors know there are previous examples of political decisions having had an effect on the market – like visa rationing in 2007-08 and more recently the table cap. That’s why they wonder about China politics.” The dip in Macau gaming stocks seen on June 25 after rumours of a slowing in China’s processing of visa applications under the socalled individual visit scheme – for its citizens wishing to visit Macau – is an example of how sensitive
investors currently are in general, and to perceived China political risk in Macau gaming in particular. The central government’s leadership change is due to take place formally this year, when President Hu Jintao and Premier Wen Jiabao hand over power to a new generation of leaders. But political analysts say that in China it usually takes several years for any new leaders to consolidate their grip on power – and this can create policy roadblocks as everyone else in the system waits to see how things will play out.
GGR overplayed Meanwhile this week several analysts suggested Macau’s gross gaming revenue growth for July is likely to be in single figures of percent, although they acknowledge that the summer months tend to be the most difficult ‘comp’ (comparison) because of unusual events; typically typhoons that shut down the ferry services that bring around half of all Macau’s visitors. Anil Daswani of financial services group Citi in Hong Kong office, agrees with other analysts that gaming revenue for July is likely to be 25 billion patacas (US$3.1 billion), implying year-on-year growth of five percent, versus the 20
percent year-on-year progression achieved in the first half of the year. But he stressed that the more profitable mass market is still growing strongly. “Head counts on the mass floors and the queues at the ferry pier are as busy as we have seen in recent times,” said Mr Daswani in a note on Macau. “We again highlight the mass business has grown 36 percent year-to-date...” But he adds: “The market continues to place too much emphasis on GGR [gross gaming revenue],” he adds. In his accompanying report on the global outlook for gaming, Mr Daswani says of Macau: “Given the defensive nature of mass earnings [i.e., seen by operators and investors as a hedge against a slowdown in VIP], we believe it could take a while for the mindset shift away from top-line growth to focus on the sustainable and recurrent nature of mass earnings as well as the potential for strong dividends.” On July 6, Macquarie Equity Advisors suggested investors stay away from Macau names for the time being. On Tuesday J.P. Morgan reduced estimates on Las Vegas Sands. But by contrast Goldman Sachs has added Galaxy Entertainment Group to its ‘buy’ list and upgraded Wynn Macau last week.
MGM Grand Macau eyes HK$12 bln loan
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aming giant MGM Grand Macau is sounding for a HK$12 billion (US$1.55 billion) five-year syndicated loan for refinancing, sources told Reuters. According to sources, the company will be meeting with
banks next week when its United States personnel arrive. Thomson Reuters LPC data shows an existing US$950 million five-year loan for MGM from August 2010 that paid an interest rate around 4.99 percent. Sixteen banks joined the 2010
financing as coordinating arrangers, including several local banks: Bank of China Macau, Industrial & Commercial Bank of China Macau, Banco Nacional Ultramarino, Tai Fung Bank and Banco Comercial de Macau.
July 13, 2012 business daily | 5
MACAU
Survey finds Macau less competitive, less trustworthy Annual ranking of China’s best cities sees Macau slide down the top 100 across most categories Tony Lai
tony.lai@macaubusinessdaily.com
M
acau’s competitiveness has slipped compared to other Chinese cities, despite its strong economic performance, an annual survey indicates. The Advanced Institute for Contemporary China Studies of the Hong Kong Baptist University and the China Institute of City Competitiveness released the results on Monday. Macau is in 16th place this year in overall competitiveness, one place lower than last year, although its score improved almost by one point to 81.53 points. The survey assessed the economy, society, culture and the environment in select areas across Greater China and assigns a score between one and 100 points. Macau’s neighbours, Guangdong province and Hong Kong, are this year’s most competitive places. Macau’s urban growth score rose to 81.68 points from 78.67 points but its rank fell to 17th from 13th. Most spectacularly, the city’s government has fallen out of the top 10 most trustworthy governments. Last year it was second only to
The government’s image suffered during the third trial of former government secretary Ao Man Long
Hong Kong’s. The government’s image has been damaged by proceedings in the third trial of former Secretary for Transportation and Public Works Ao Man Long. Details of the deal to provide La Scala’s developers with additional
land, even though the initial deal was under investigation, also had an impact on the city’s image, the Chinese-language newspaper Macau Daily News reported, quoting the China Institute of City Competitiveness. Qingdao was ranked the happiest
city, based on satisfaction and belonging, quality of life, economy and social civilisation. Macau was ranked 51 out of the top 100 cities. The Hong Kong-based China Institute was founded in 1998 and has published its competitiveness rankings since 2002.
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business daily July 13, 2012
macau Brought to you by
Chow Tai Fook’s board of directors is confident next year will see a return to sustainable growth
Women at work The make up of the workforce has changed significantly since the beginning of 2008 in terms of size, age and gender. In this analysis we take a look at the gender breakdown of the labour force. Remember that in comparing statistics from before 2008 and now, the legal working age was raised only recently, which will skew direct comparisons.
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Sales slump at Chow Tai Fook
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Ratings downgrade sees shares in world’s biggest listed jeweller slump in Hong Kong
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Daniel do Rosário
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newsdesk@macaubusinessdaily.com
The initial part of the analysis shows a rise in the size of the workforce and a decrease in the share of women employed, a trend that bottomed out in the third quarter of 2008 at 45.9 percent. The period that follows is characterised by a sudden drop in the number of workers and a rapid increase in the proportion of women at work. Since the second half of 2009, the steady rise in the size of the workforce has been followed by a slow, at times uneven, increase in the number of women workers. The figures suggest that, in the long-term, the ratio of women to men in employment is rising slowly. We might conclude that in times of dramatic change, when the workforce expands, men participation rises faster. During economic contractions, women retain their jobs better.
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ales at the world’s biggest listed jewellery company, Chow Tai Fook Jewellery Group Ltd, fell by 1 percent in Macau and Hong Kong in the second quarter of this year. Same store sales growth in the mainland, a comparison of stores open for at least one year, fell to an anaemic 4 percent in year-onyear terms – down from 61 percent last year. The company’s woes were compounded yesterday when its stock price fell 8.8 percent to HK$9.45 at the close of trading. Global investment bank and asset management firm Piper Jaffray Asia Securities Ltd downgraded the
company after a “disappointing” first quarter. The jewellery company blamed slowing growth on the global economic slowdown, an “exceptionally high” basis for comparison from the same period last year, and a drop in sales of high-end gem-set jewellery. The company’s changing fortunes reflects the volatility in global markets, five consecutive quarters of declining growth in the mainland and a fall in spending on jewellery and gold products by mainland consumers. Falling visitor arrivals from the mainland to Hong Kong and Macau in the last quarter may have also played a part. Mainland visitors to Hong Kong dropped from 2.6 million in April to 2.5 million in May, while arrivals to Macau fell 4.2 percent year-on-
year to 1.2 million, according to the Statistics and Census Service. Chow Tai Fook’s board of directors said it remains confident of sustainable growth for the coming financial year. There was no comment on the company’s previously announced target to double sales in three years by opening new Greater China outlets. with Bloomberg
Chow Tai Fook (1929 HK) share price 12-Jul
HKD 11
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9
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Comparing gender and age is a more complex task. The graph above shows the number of women in the workforce in three age ranges. The proportion of women in the workforce aged 25 years or less is stabilising at about 52 percent. In the other age ranges there has been a decrease in the proportion of women since early 2010. That trend may reflect a bias towards male labourers from overseas. Workers in these age groups typically have a significant number of imported workers. In all three age ranges, more than half of the workers are women, which is compatible with a slow increase in the ratio of women to men in the labour force. J.I.D.
Information sharing The importance of the English-language media in Macau and their prospects were among the topics discussed during a visit by senior officials from the Government Information Bureau to Business Daily headquarters yesterday. The bureau’s director, Victor Chan Chi Ping (centre), and his delegation also met members from other publications produced by De Ficção-Multimedia Projects, such as Macau Business, Business Intelligence and Essential Macau.
Weather Beijing 30/22o C Changchun 25/17o C
Harbin 25/19o C
Xian 36/24o C Shanghai 34/27o C Chengdu 32/23o C Kunming 24/19o C Haikou 34/26o C Sanya 31/25o C
Guangzhou 34/26o C
MACAU (9 July-14 July) Day
Temperature
Humidity
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60/90 %
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65/95 %
Shenzhen 33/27o C
ASIA (today)
Hong Kong 34/27o C
Manila
TOKYO
Jakarta
32/25o C
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Macau 33/27o C
Bangkok
SEOUL
K. lumpur
31/25o C
SINGAPORE
26/22o C
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taipei
33/26o C
July 13, 2012 business daily | 7
MACAU
Public utility hikes should head to AL Legislators push for a say in changes to fares and tariffs, or any service granted by concession Vítor Quintã
vitorquinta@macaubusinessdaily.com
Better service The government sets fixed bus fares and distributes the revenues
Photo by Manuel Cardoso
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acau’s community associations are happy with a government decision to suspend a proposed 23-percent increase in the subsidies to public bus operators but want any change to public services, fares or tariffs approved by the Legislative Assembly. Just two weeks after announcing the increase, Transport Bureau director Wong Wan said on Wednesday the bus companies would only receive their money if they improved the quality of their services. The suspension proved “the government is listening to the public,” Ho Ion Sang, legislator and deputy director of the General Union of Neighbourhood Associations of Macau, told Business Daily. Public Utilities Concern Association of Macau vice-president Johnny Chan Veng Un said the increase was unfair and unacceptable to the public. The 23-percent increase was far above the inflation rate. The formula used to calculate the increase took into account fuel prices, inflation and the average salaries of bus company employees. The government said the current service charge was first set in September 2009. Although the charge has not changed since then, Transportes Urbanos de Macau S.A.R.L. (Transmac) made “several” millions of patacas in profit last year, Transmac managing director Chan Hio Ieong told a press conference on Wednesday. Meanwhile, Sociedade de Transportes Colectivos de Macau (TCM) recorded a profit of 600,000 patacas (US$75,100) last year but has lost about 7.6 million patacas in the first half of this year, TCM general manager Daniel Fong said at the same press conference.
The bus service charge falls between 15.30 patacas and 36.60 patacas a kilometre, according to the tender programme
it collects to the bus operators, based on a pre-agreed service charge per kilometre. According to the 2009 public tender programme, which was released by the Transport Bureau yesterday, the service charge falls between 15.30 patacas and 36.60 patacas a kilometre. New Macau Association legislator Au Kam San says officials should review the contracts and be held accountable for their execution. “It is unreasonable the contract does not include company profits and service quality as conditions for the adjustment in the charge of services,” he said. The bureau asked each of the three bus operators for a plan to improve service quality. The proposal put forward by Reolian Public Transport Co Ltd was rejected for a second time yesterday, TDM reported. The company now has a
month to present another plan. “There’s no mechanism how to evaluate the performance of the three bus companies,” Mr Chan said. He suggested the creation of a committee with members of the public could “give some comments on the overall bus service”.
Different increases Mr Ho said: “The [revised] contract should reflect the issues the residents are concerned about: safety and service quality”. He would like to see service subsidies linked to performance. Mr Au wanted the government to learn from its mistakes and send any proposal that would increase charges paid by the public or affect a service granted by concession for discussion in the Legislative Assembly. The operators have the right to
request a service hike once a year but any proposal should go to the assembly or to the Executive Council, Mr Chan said. Mr Wong said operators must significantly improve their services before the service charge increase is approved. The three operators may receive the increase at different times, according to their performance. Adjustments were unlikely to be equal across each operator because “the three companies run different routes, get paid differently, and provide different services,” Mr Ho said. He is concerned the government’s new procedure will not be enough to improve services. He said the government should review its public transportation policy as “the new bus service is indirectly proportional to the citizens’ satisfaction”.
Photo by Manuel Cardoso
Three Lamps market goes car-free next week
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Limiting traffic in the Three Lamps district could hurt business, say vendors
he Three Lamps street market district will become a pedestrian-only zone from next week onwards, the Civic and Municipal Affairs Bureau announced last week, despite opposition from some stall operators. The bureau began reorganising traffic through the area this week. Five goods loading areas have been set up to accommodate businesses and went into operation on Monday. Aside from the loading bays, streets will be closed to vehicles between 8am and 9pm daily. The bureau’s plan to make the markets more pedestrian friendly was based on a survey that gathered about 1,300 opinions from residents, shop owners and vendors.
The survey found that most respondents were worried about safety and wanted to see private vehicles banned from the street market. The five streets located between the Three Lamps roundabout and the Red Market is a popular low-budget shopping area and vendors are afraid the measures will hurt their business. Rua da Emenda will be the first street closed to traffic, from Monday. Vehicles will be banned from Rua de Tomé Pires and Rua do Rebanho on August 1 and Rua do Lu Cao will become a restricted area from August 16. The bureau is working on improvements to beautify Rua de Brás da Rosa before it is closed to traffic. X.C.
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business daily July 13, 2012
Greater china
Lower growth, policy predicaments
Property comes to the rescue, again?
Premier may be forced to ease property curbs
C
hina’s weakest growth in three years may pressure Premier Wen Jiabao to further ease the government’s crackdown on a property industry that accounts for more than a quarter of final demand. The slowdown may test Mr Wen’s pledge to sustain controls aimed at cooling home prices as he seeks to buoy growth ahead of a once-in-adecade leadership transition later
this year. China’s efforts to prevent a property bubble limit its policy options as the European debt crisis curbs exports. “It will be extremely hard to stimulate a strong rebound in the economy without involving the property sector,” said Mark Williams, Asia economist at Capital Economics Ltd in London. “They may have to look again at their property tools.” While China’s leaders probably want growth of around 8.5 percent for the world’s second-biggest economy, they may fail to exceed 8 percent without contributions from real estate, said Mr Williams, who previously worked for the U.K. Treasury. “It would only take
a shock from Europe for things to suddenly look a lot worse,” he said.
Policy dilemmas Leaders have vowed to maintain curbs on the property market even as they reduce broader borrowing costs. When cutting interest rates last week, the central bank widened discounts permitted on most loans to 30 percent of the benchmark while leaving those for mortgages unchanged, effectively ending preferential prices for homebuyers. Mr Wen has tolerated some piecemeal measures to support property. They include the introduction in May of home
subsidies in the eastern city of Yangzhou, discounts on mortgages for first-home buyers in Beijing and raising the tax threshold on purchases of some homes in Shanghai. About 30 Chinese cities have issued “fine-tuning” policies since the second half of 2011, according to Centaline Property Agency Ltd. Property-generated demand for goods including electric machinery and instruments, chemicals and metals account for more than a quarter of China’s final domestic demand, according to an estimate by UBS AG. “Significant loosening in the property market looks unavoidable in order to entice developers to
Chinese coal miner falls on Hong Kong trading debut
A
Chinese coal miner fell on its trading debut in Hong Kong yesterday, after raising more than US$900 million in the city’s second largest share sale so far this year. Shares of Inner Mongolia Yitai Coal Co. opened at HK$41.90 (US$5.4), down 2.6 percent from its initial public offering price of HK$43. Yitai, which produces thermal coal for power generation, sold nearly 163 million shares and priced its deal at the bottom end of its price range of HK$43-HK$53. The IPO has been seen as a gauge of investor sentiment amid global market volatility and China’s slowing economic growth, which has prompted several firms to cancel or
China money indicators signal possible growth ahead
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hina’s new yuan loans exceeded estimates last month, after the central bank cut interest rates for the first time in more than three years to spur demand. Banks extended 919.8 billion yuan (US$144.3 billion) of
local-currency loans in June, the People’s Bank of China said yesterday. That compares with the 880 billion yuan median forecast in a Bloomberg News survey and 793.2 billion yuan in May. M2, a measure of money supply, rose 13.6 percent. Foreign-exchange
reserves fell to US$3.24 trillion at the end of June, the central bank said, a record quarter-toquarter drop. “This shows the earlier policy easing is taking effect,” Chang Jian, a Hong Kong-based economist at Barclays Plc who formerly worked
for the World Bank, said before the release. “Those measures will produce a modest growth rebound in the current quarter.” The central bank may pause to observe the impact of its latest cut in interest rates on credit demand, property prices and inflation,
July 13, 2012 business daily | 9
greater china
s for Wen
Q2 growth at 7.5 pct Beijing criticises EU
pick up investment,” Citigroup Inc. analysts led by Hong Kongbased Oscar Choi wrote in a July 11 research note. “Potential powerful measures” include lower downpayment ratios and wider coverage for a public housing fund that provides low-interest mortgages, they said.
‘Pointless’ strategy Promoting investment growth is now the key to stabilising China’s economic expansion, Mr Wen said in a statement on July 10. The remarks followed comments he made two days earlier on an inspection tour in the eastern province of Jiangsu that the government would intensify fine-tuning of policies. China is already loosening restrictions on lending to local government financing vehicles that borrowed record amounts after the global financial crisis, confirming Mr Wen’s determination to stabilise growth through infrastructure investment, said Shen Jianguang, an economist at Mizuho Securities Asia Ltd in Hong Kong. Mr Wen is pursuing the strategy as excess capacity pervades some industries and residential developments sit empty. The risk is that the focus on building more infrastructure exacerbates China’s reliance on investment-led growth because “investment is pointless without end demand from either consumption or exports,” said Cullen Thompson, a managing partner in New York at Bienville Capital Management LLC. “The current slump is largely caused by the over-stimulus in 2009 and now they are repeating the same strategy: quench thirst by drinking poison,” said Junheng Li, founder and senior equity analyst at researcher JL Warren Capital LLC in New York. “With even more limited policy flexibility and declining returns on investment, obviously the results will be worse.” Bloomberg
postpone Hong Kong listings. Luxury London-based jeweller Graff Diamonds pulled its highlyanticipated US$1.0 billion Hong Kong IPO, originally slated for June, due to “adverse market conditions”. Chinese brokerage Haitong Securities, which raised US$1.68 billion in its IPO in April in Hong Kong’s largest share sale so far this year, also fell during its trading debut. Hong Kong retained its crown as the world’s biggest initial public offering market for the third year in a row in 2011, thanks to a slew of companies that turned to the city in a bid to tap mainland China’s explosive growth. But Hong Kong saw an 82-percent plunge in the funds raised through new listings in the first six months of 2012, to HK$30.6 billion compared to HK$174.7 billion in the same period last year.
Falling inflation seen as opportunity for further easing
C
hina’s economy may have grown around 7.5 percent in the second quarter and nearly 8 percent in the first half, and will recover steadily in the second half as policy stimulus gains traction, a senior economist at the cabinet’s think-tank said yesterday. The assessment comes a day before China reports its second quarter growth rate. The think tank’s view roughly matches a Reuters poll, which forecast that for April-June, the economy expanded 7.6 percent from a year earlier - the slowest pace since the first quarter of 2009. “The economy is likely to stabilise and even recover modestly in the second half as such policy measures show results,” Yu Bin, director of macroeconomic research department of the Development Research Centre, told a news conference.
7-8 pct expected growth rate, next 10 years “Growth in the first half was close to 8 percent,” he said. In the first quarter of 2012, China’s economy grew 8.1 percent from a year earlier. The world’s second-largest economy is entering a phase of more modest expansion relative to the 10 percent annual average rate in the past three decades, but it could still maintain a 7-8 percent annual rate in the next 10 years, Mr Yu said.
Policy options
before making any further reductions, she said. The PBOC reduced benchmark interest rates in June, then last week cut the one-year lending rate by 31 basis points to 6 percent and the deposit rate by 25 basis points to 3 percent. China’s foreign-exchange reserves, the world’s largest, fell from US$3.305 trillion at the end of March, according to yesterday’s statement.
China’s central bank unexpectedly cut interest rates last week for the second time within a month in a bid to bolster growth. The second cut sparked some fears that the economy may be slowing more sharply than earlier expected. Beijing has also lowered banks’ required reserves three times since November 2011, each time by 50 basis points, freeing an estimated 1.2 trillion yuan (US$190 billion) for lending. Data on Monday showed annual consumer inflation slowed to slightly more than expected to 2.2 percent in June, giving Beijing more scope to ease policy without stoking price pressures. “Falling consumer inflation creates room for monetary policy easing,” Mr Yu said. “But if China’s growth picks up in the third quarter and the world economy shows a modest recovery, the room for further cuts in required reserve ratio and interest rates will narrow significantly,” he added. China’s exports are likely to grow about 10 percent this year, Mr Yu said, adding that a recovery in China’s economy will point to steady strengthening of the Chinese yuan.
Bloomberg
Reuters
AFP
trade ‘discrimination’
Arms embargo and market status unchanged
C
hina has yesterday criticised Europe’s refusal to ease two longtime trade restrictions as “discrimination”, following a highlevel meeting between the two sides this week. China has repeatedly sought to end an embargo on arms sales imposed after the deadly 1989 Tiananmen crackdown on democracy protesters. It has similarly pushed to be granted full “market economy status”, a designation that would lift bans on certain Chinese exports and investments. “We believe that the two issues are actually an embodiment of the discrimination against China by the European side,” Hua Chunying, a foreign ministry councillor handling European affairs, told reporters. “The two issues reflect a lack of trust by the European side,” she said. “If the European side can take a small step forward in solving these two issues, then we can make a major step forward in enhancing mutual trust.”
China and Europe have locked horns over a series of trade issues in recent years, even as Europe has sought Chinese support in overcoming its debt crisis. Some of these issues were raised during the third annual EU-China Strategic Dialogue held in Beijing this week, although both sides emphasised at the end of the talks that they were held in good spirit and helped build ties. China is due to be granted market economy status in 2016 regardless, having agreed on a 15-year delay when it joined the World Trade Organization. Chinese Premier Wen Jiabao last year called on European nations to show their “friendship” by granting the status sooner. But some European leaders say that China does not yet qualify, since most of its biggest companies are state-owned and their leaders are selected by the government. AFP
10 |
business daily July 13, 2012
asia
South Korea in surprise rate cut, more to come Central bank adds to Asian stimulus calling it a ‘pre-emptive’ action
T
he Bank of Korea joined the global rush to ease monetary policy yesterday, cutting its benchmark rate for the first time in more than three years to shield the economy from a global slowdown, but drew criticism for boasting that its action was “pre-emptive”. Although South Korea’s exportdriven economy won’t be helped much by the 25 basis point rate cut to 3.00 percent, it could ease the burden on heavily-indebted households and help boost domestic demand which has grown more sluggishly than expected The move came seven days after China cut its benchmark rate for the second time in a matter of weeks and as inflation dipped again to well within the bank’s 2-4 percent target range. “Today’s (yesterday’s) rate decision was made in an action against the GDP gap and also to act preemptively. The effects of monetary policy decisions are long-term,” Governor Kim Choong-soo said at a news conference after the decision. “The central bank needed to uphold its monetary policy responsibility
rather than just look on,” he said. Only three of 26 economists in a Reuters poll had forecast a cut and the Bank of Korea has a track record of repeatedly wrong-footing markets. It again drew criticism for its inconsistency as until yesterday’s split decision it had stressed rate normalisation, or increases, to combat inflation. “I don’t know why the central bank emphasised the normalisation of
1,151.5
The won was quoted against the dollar, near a twoweek low
rates before if they were going to cut rates this time so easily,” said Park Jong-yeon, a researcher at Woori Investment and Securities. “The Bank of Korea has lost trust from the market. It’s not right to say ‘preemptive’ in this situation,” he added.
Not enough Mr Kim was forced to deny that he had cut in response to political pressure from the country’s president as the decision came two days after he attended a meeting with top aides to President Lee Myung-bak and other government officials. With presidential elections due in December, there will be additional pressure to cut rates, economists and political commentators say. A poll conducted after the rate decision showed 13 out of 18 analysts saw the central bank cutting at least once more, but they said it would then hold the rate. “We judge today’s (yesterday’s) move as prudent, helping to limit downside risks to growth through confidence and foreign exchange channels,” said Young Sun Kwon, an
BOJ holds off fresh easing Bank of Japan sticks to recovery view; spurs stock-market decline Leika Kihara
T
Bank of Japan Governor Masaaki Shirakawa said it would not automatically link its policy to that of other central banks
he Bank of Japan held off on further policy easing yesterday despite slowing global growth that has driven other major central banks into expanding stimulus, convinced that robust domestic demand will keep Japan’s economic recovery on track. The yen briefly fell and government bond futures rose after the central bank reshuffled the composition of its 70 trillion yen (US$879 billion) stimulus programme to buy more short-term securities and reduce the amount offered in fixed-rate market operations. The bank expanded its assetpurchase programme to 45 trillion yen (US$564 billion) from 40 trillion yen, according to a policy statement released yesterday. But the initial market reaction soon faded and the yen bounced back as the move was mainly a technical adjustment by the central bank, which is desperately trying to forcefeed money to markets already awash with excess cash. Bond futures, however, held on to initial gains, supported by the central bank decision to abolish a 0.1 percent minimum rate for its purchases of short-term securities. “The BOJ slightly tweaked the content of the asset buying scheme but this does not mean it implemented any new easing steps, and it did not increase its long-term bond buying,” said Yoshimasa Maruyama, chief economist at Itochu Economic Research Institute in Tokyo. “October is the next possible chance for a BOJ easing
economist at Nomura International. Prior to the decision Mr Kwon had assigned a 40 percent probability to a cut. “However, we do not think that rate cuts will be enough to reverse the downturn in the Korean economy, which is largely dependent on exports.”
because the central bank may lower its growth forecasts along with a downgrading of its view on overseas economies.” As widely expected, the central bank kept its policy rate at a range of zero to 0.1 percent, and held off on a further increase in its asset buying and lending programme.
Not under threat Some market players had expected the BOJ to follow up on last week’s stimulus measures by the central banks of the eurozone, Britain and China with its own monetary expansion in a coordinated move to ease the pain from the global slowdown. But with no clear signs that Japan’s recovery prospects are under threat and the yen off record highs, the BOJ likely saw little need to tap its depleted arsenal now. “While other central banks are proceeding with monetary easing and quantitative easing to battle the economic slowdown, today’s (yesterday’s) decision showed the BOJ’s determination to not follow suit,” said Junko Nishioka, chief Japan economist at RBS Securities. While Japanese central bankers are also worried about the global slowdown, they have stressed that any further easing will come only if the anticipated moderate recovery is under threat.
KEY POINTS Policy rate unchanged at 0-0.1 pct BOJ eyes 2.2 pct growth in the current fiscal year Bank fine-tunes asset buying and lending programme
July 13, 2012 business daily | 11
asia
Philippines eyes investment grade rating Government hopes for the country to be upgraded in 2013 – budget chief
T
The Bank of Korea cut borrowing costs for the first time in more than three years
The monetary policy committee was split yesterday and some economists said the decision was part of a coordinated international move by central banks, although the bank’s governor denied this. The shock move prompted a sharp jump in bond futures, with
September futures on three-year treasury bonds up 0.66 points to trade at 105.75 by the close. The won finished local trade down almost 1 percent against the dollar, while Seoul shares lost more than 2 percent.
For now, the BOJ stuck to the view that solid private consumption and spending on reconstruction after last year’s earthquake will help Japan outperform most of its Group of Seven peers with growth of around 2 percent. In a quarterly review of its forecasts, the BOJ said it now expects the economy to grow 2.2 percent in the year to March 2013 and 1.7 percent the following year, largely unchanged from its April projection. “What the BOJ is looking at is the outlook for Japan’s economy and prices,” Bank of Japan Governor Masaaki Shirakawa said yesterday at a news conference. “But the BOJ will not automatically link its policy to that of other central banks,” he said. “The balance of domestic and external demand has shifted. Compared with our outlook in April, domestic demand is slightly stronger. At the same time, external demand looks slightly weaker,” he added.
its market operations yesterday shows that there are limits to how much more it can boost the asset buying and lending programme. The BOJ has missed its targets for six-month operations over the past few weeks – a sign banks have ample cash amid tepid demand for credit. That has led the central bank to cut the size of fixed-rate operations and instead buy more short-term securities, and to scrap the minimum 1 percent interest for such purchases.
CPI revised Lower commodity prices prompted the BOJ to cut its core consumer inflation forecast to 0.2 percent for the current fiscal year from 0.3 percent. But it maintained its forecast of 0.7 percent inflation in the following year, signalling that it expects Japan to make steady progress toward a sustained end to deflation. The BOJ set the 1 percent inflation target and eased policy in February, and followed up with additional stimulus in April, to show its determination to hit that goal. Some economists expect the next easing in October, when the BOJ issues a semiannual report that will include forecasts through to March 2015. But the fact the BOJ had to fine-tune
Reuters
he Philippines has a good slowdown in China. chance of winning an in- The government plans to narrow vestment grade rating for the deficit to 2 percent of gross the first time in 2013 as it sustains domestic product by 2013 from a faster growth and cuts debt levels, target of 2.6 percent this year. The Budget Secretary Butch Abad said. shortfall last month was probably Standard & Poor’s this month raised wider than the 19.9 billion-peso the nation’s long-term foreign cur- (US$475 million) figure in May, Mr rency-denominated debt rating to Abad said. BB-plus, which is one step below in- The deficit for the first five months vestment grade, was 22.79 biland the highlion pesos, less est level since than 10 per2003. Moody’s cent of the Investors Ser2012 ceiling vice boosted of 279 billion its outlook to pesos, he said. We are positive in May, State spendand Barclays moving into a virtuous ing was “sigPlc predicts the nificantly more” cycle of sustained and country’s score in June comwill be elevated pared to May from so-called inclusive growth … when expendijunk status in they’ll have to see our ture climbed to 12 months to 18 151.3 billion months. pesos, the highperformance over the “We deserve it,” est level this Mr Abad said next two quarters year, he said. in an interview The US$200 yesterday. “We Butch Abad, billion Southare moving into Philippines’ budget secretary east Asian econa virtuous cycle omy grew 6.4 of sustained and percent in the inclusive growth. Eighteen months is first quarter, the fastest pace since too long; they’ll have to see our per- 2010. Second-quarter growth will formance over the next two quarters.” be within the 5 percent to 6 percent Emerging nations from Brazil to target for the year, Mr Abad said. Indonesia have won credit-rating Starting 2013, funds allocated for upgrades in the past year as gov- projects will be valid for only a ernments contained budget defi- year instead of two years, to force cits. A higher assessment for the agencies to speed up implementaPhilippines could help President tion, he added. Benigno Aquino as he boosts “We will be able to accelerate spending to a record this year and spending further in the second seseeks US$16 billion of investment mester,” the budget chief said. “We in roads, bridges and airports to are looking at advancing the impleshield the economy from Europe’s mentation of projects in 2013.” Bloomberg sovereign-debt crisis and a growth
Reuters
Nikkei in sixth day of decline Japan’s Nikkei share average posted its biggest fall in more than a month, dropping below major support at its 25-day moving average yesterday after the Bank of Japan only offered minor tweaks to its easing strategy. “[The BOJ’s action] wasn’t aggressive easing... this is not something that could change weak sentiment in the market,” said Ryota Sakagami, chief equity strategist at SMBC Nikko Securities. “The Nikkei could fall to around 8,500.” The Nikkei declined 1.5 percent to 8,720.01, its biggest daily fall since June 8 and the sixth consecutive day of decline – the longest such streak since early April. It also broke below its 25-day moving average at around 8,790, leading many technical analysts to think the rally since early June’s six-month low near 8,200 is over. The broader Topix index fell 1.3 percent to 747.49.
The Philippines is one step away from becoming an investment grade economy
12 |
business daily July 13, 2012
MARKETS Hang SENG INDEX NAME
NAME
PRICE
Day %
VOLUME
27.05
-1.992754
12974535
CHINA UNICOM HON
ALUMINUM CORP-H
3.06
-3.470032
19301164
CITIC PACIFIC
BANK OF CHINA-H
2.77
-2.120141
374067188
BANK OF COMMUN-H
4.78
-3.822938
40175709
26.35
-0.9398496
2450803
13.1
-0.7575758
13136344
22.85
-1.508621
9214848
AIA GROUP LTD
BANK EAST ASIA BELLE INTERNATIO BOC HONG KONG HO
PRICE
Day %
VOLUME
9.72
-3.762376
28767713
11.78
-1.669449
2506465
NAME
PRICE
Day %
VOLUME
58.1
-1.190476
1366950
SANDS CHINA LTD
22.65
-1.948052
6936231
SINO LAND CO
12.34
-0.3231018
6024711
SUN HUNG KAI PRO
95.4
-0.7800312
8607574
89.4
-2.984265
1284094
POWER ASSETS HOL
CLP HLDGS LTD
64.75
-0.3846154
1649210
CNOOC LTD
14.92
-2.990897
56213532
COSCO PAC LTD
9.93
-3.027344
5349458
SWIRE PACIFIC-A
ESPRIT HLDGS
9.41
-0.2120891
4280659
TENCENT HOLDINGS
220.4
-2.992958
4354252
HANG LUNG PROPER
26.25
-1.685393
4867390
TINGYI HLDG CO
19.52
-3.366337
10606100
9.49
-3.064351
28020343
42.25
-2.873563
4242952
CATHAY PAC AIR
12.66
-1.401869
1754147
HANG SENG BK
105.8
-0.8434864
2038379
WANT WANT CHINA
CHEUNG KONG
95.65
-2.198364
2618801
HENDERSON LAND D
44.1
-1.342282
2290853
WHARF HLDG
6.44
0
38540401
HENGAN INTL
76.8
-0.7110537
2273750
CHINA COAL ENE-H CHINA CONST BA-H
4.75
-3.651116
467934101
CHINA LIFE INS-H
20.45
-3.080569
29293446
CHINA MERCHANT
23.75
-2.061856
1012530
CHINA MOBILE
84.75
-2.249135
14124617
CHINA OVERSEAS
18.16
-1.089325
23636005
CHINA PETROLEU-H
6.7
2.290076
146485550
CHINA RES ENTERP
21.95
-1.348315
2769310
CHINA RES LAND
15.42
-0.8997429
8860308
CHINA RES POWER
15.8
-1.25
3894121
CHINA SHENHUA-H
28.25
-0.877193
15375845
17.22
-1.148106
3660140
HONG KONG EXCHNG
HONG KG CHINA GS
104
-2.439024
4605591
HSBC HLDGS PLC
67.1
-1.468429
11839167
HUTCHISON WHAMPO
67.4
-2.460203
4407335
IND & COMM BK-H
3.99
-2.444988
440095319
13.98
-3.319502
17170001
LI & FUNG LTD
1543701
MOVERS
1
47
1 19510
INDEX 19025.11 HIGH
19504.42
LOW
19009.58
MTR CORP
26.1
-2.61194
NEW WORLD DEV
9.68
-2.024291
11030619
52W (H) 22808.33
PETROCHINA CO-H
9.27
-2.21519
104252784
(L) 16170.35
PING AN INSURA-H
60.25
-2.42915
9783222
19000
10 -Jul
12-Jul
Hang SENG CHINA ENTErPRISE INDEX NAME
NAME
PRICE
DAY %
VOLUME
24.9
-2.923977
8872630
6.7
2.290076
146485550
CHINA RAIL CN-H
6.62
-0.4511278
15233919
ZOOMLION HEAVY-H
CHINA RAIL GR-H
3.2
-0.621118
16748185
ZTE CORP-H
28.25
-0.877193
15375845
PRICE
DAY %
VOLUME
AGRICULTURAL-H
2.94
-2.649007
107089500
AIR CHINA LTD-H
4.77
0
14616000
CHINA PETROLEU-H
ALUMINUM CORP-H
3.06
-3.470032
19301164
ANHUI CONCH-H
20.2
-1.222494
8068500
BANK OF CHINA-H
2.77
-2.120141
374067188
CHINA SHENHUA-H CHINA TELECOM-H
CHINA PACIFIC-H
4.78
-3.822938
40175709
3.37
-3.16092
35123271
13.62
-3.404255
4567900
DONGFENG MOTOR-H
10.28
-6.20438
31618091
CHINA CITIC BK-H
3.58
-3.504043
63156604
GUANGZHOU AUTO-H
5.77
-2.368866
7524701
CHINA COAL ENE-H
6.44
0
38540401
HUANENG POWER-H
5.55
-0.5376344
26217356
CHINA COM CONS-H
6.97
-1.830986
21012345
IND & COMM BK-H
3.99
-2.444988
440095319
CHINA CONST BA-H
4.75
-3.651116
467934101
JIANGXI COPPER-H
16.98
-2.18894
7725000
BANK OF COMMUN-H BYD CO LTD-H
CHINA COSCO HO-H CHINA LIFE INS-H CHINA LONGYUAN-H CHINA MERCH BK-H
3.45
-2.266289
11198750
PETROCHINA CO-H
9.27
-2.21519
104252784
20.45
-3.080569
29293446
PICC PROPERTY &
8.6
-3.910615
23351201
5
-0.7936508
3319000
PING AN INSURA-H
60.25
-2.42915
9783222
13.38
-2.335766
18205010
SHANDONG WEIG-H
8.51
-2.853881
3184000
CHINA MINSHENG-H
6.66
-2.489019
33558900
SINOPHARM-H
21.15
-1.398601
4643179
CHINA NATL BDG-H
7.99
-1.600985
41694800
TSINGTAO BREW-H
45.15
-1.847826
1457348
11.54
-0.5172414
5972000
WEICHAI POWER-H
26.25
-0.7561437
2354289
CHINA OILFIELD-H
NAME
PRICE
DAY %
VOLUME
11.4
0
23864440
2.5
-3.846154
28232111
9.36
-2.904564
15550356
12.32
-1.44
7777924
YANZHOU COAL-H ZIJIN MINING-H
MOVERS
1
36
3 9470
INDEX 9166.71 HIGH
9466.28
LOW
9161.07
52W (H) 12651.92 (L) 8058.58
9160
10-Jul
12-Jul
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.46
-0.8064516
77542197
DONGFANG ELECT-A
16.71
2.767528
12479014
SHANDONG GOLD-MI
32.23
0.5302558
11243934
AIR CHINA LTD-A
6.46
2.053712
22178406
EVERBRIG SEC -A
13.33
3.413499
18088547
SHANG PHARM -A
11.36
1.157614
42990352
ALUMINUM CORP-A
6.28
0
13307641
GD MIDEA HOLDING
10.12
0.6965174
32398903
SHANG PUDONG-A
7.67
-0.5188067
100909326
ANHUI CONCH-A
14.7
1.169993
22517814
GD POWER DEVEL-A
2.68
-2.189781
53559610
SHANGHAI ELECT-A
4.46
0.9049774
5776570
32615571
GEMDALE CORP-A
6.89
1.923077
64449350
SHANXI LU'AN -A
20.87
7.080554
24316381
NAME
BANK OF BEIJIN-A
7.45
-1.973684
NAME
NAME
BANK OF CHINA-A
2.76
-0.7194245
20115036
GF SECURITIES-A
14.78
6.025825
23793509
SHANXI XINGHUA-A
40.37
0
5994445
BANK OF COMMUN-A
4.33
-0.9153318
72517182
GREE ELECTRIC
21.55
0.04642526
11541810
SHANXI XISHAN-A
15.52
5.363204
29796214
BAOSHAN IRON & S
4.16
0
21382777
GUANGHUI ENERG-A
14.49
4.620939
29845732
SHENZ DVLP BK-A
14.88
0.1345895
19473086
30.03
6.113074
12905647
SHENZEN OVERSE-A
7.12
3.188406
34000199
19.65
3.366649
4747112
GUIZHOU PANJIA-A
CHINA CITIC BK-A
3.92
-0.5076142
20666132
HAITONG SECURI-A
9.76
3.389831
63799796
SUNING APPLIAN-A
8.12
-1.216545
65845421
CHINA CNR CORP-A
3.78
0
26028309
HANGZHOU HIKVI-A
28
4.438642
6038688
TONGLING NONFE-A
19.71
2.602811
17391747
CHINA COAL ENE-A
7.83
4.679144
26680959
HENAN SHUAN-A
65.65
0.1372788
3111422
TSINGTAO BREW-A
38.92
-0.05136107
2841880
CHINA CONST BA-A
4.01
-0.9876543
37308006
HONG YUAN SEC-A
17.36
4.201681
21046127
WEICHAI POWER-A
27.63
1.580882
4820876
CHINA COSCO HO-A
4.65
0.2155172
9349911
HUATAI SECURIT-A
9.99
3.309204
25629982
WULIANGYE YIBIN
37.99
3.37415
95740868
BYD CO LTD -A
CHINA CSSC HOL-A
22.8
1.423488
6048976
HUAXIA BANK CO
8.8
-0.6772009
35390541
XIAMEN TUNGSTEN
44.71
3.23251
8231035
CHINA EAST AIR-A
4.47
2.995392
34445429
IND & COMM BK-A
3.75
-0.530504
46010303
YANGQUAN COAL -A
15.76
6.630582
34515651
2.74
-0.7246377
45433310
INDUSTRIAL BAN-A
12.41
-0.4012841
87724023
YANTAI CHANGYU-A
70.63
-1.216783
3239102
CHINA LIFE INS-A
18.43
-2.589852
19957389
INNER MONG BAO-A
41.99
2.614858
64168839
YANTAI WANHUA-A
13.46
1.203008
11073646
CHINA MERCH BK-A
10.09
0.2982107
81043606
INNER MONG YIL-A
21.86
1.769088
18474446
YANZHOU COAL-A
19.46
5.30303
9521535
CHINA MERCHANT-A
11.12
1.831502
20175738
INNER MONGOLIA-A
5.11
0.5905512
56963918
YUNNAN BAIYAO-A
61.5
-2.02326
4430376
CHINA MERCHANT-A
25.82
5.387755
11245479
JIANGSU HENGRU-A
29.74
2.516374
7485750
ZHONGJIN GOLD
21.27
0.9492169
10338059
CHINA MINSHENG-A
5.89
0.170068
91654804
JIANGSU YANGHE-A
151.3
0.2983096
3125772
ZIJIN MINING-A
3.73
0.2688172
53622714
17.23
1.352941
8040590
JIANGXI COPPER-A
23.58
1.857451
11796628
ZOOMLION HEAVY-A
10.15
1.095618
40862953
13
1.325019
7121768
ZTE CORP-A
13.33
2.302379
21699505
15.37
5.781142
28085193
21.7
0.2772643
18120731
20343728
CHINA EVERBRIG-A
CHINA OILFIELD-A
22.42
0.6735519
38792393
JINDUICHENG -A
CHINA PETROLEU-A
5.85
0.5154639
61537912
JIZHONG ENERGY-A
CHINA RAILWAY-A
4.53
-0.2202643
22888462
KANGMEI PHARMA-A
16.1
-0.4329004
CHINA RAILWAY-A
2.58
0.78125
18530130
KWEICHOW MOUTA-A
256.06
-0.7557847
3727302
45.91
1.54833
21709374
2.39
-0.4166667
18661884
CHINA PACIFIC-A
CHINA SHENHUA-A
22.82
3.257919
25740410
LUZHOU LAOJIAO-A
CHINA SHIPBUIL-A
4.72
0.6396588
32653219
METALLURGICAL-A
CHINA SOUTHERN-A
4.67
2.863436
33160021
NINGBO PORT CO-A
2.52
0.8
13417733
PANGANG GROUP -A
4.34
1.165501
64144790
CHINA STATE -A
3.33
-0.5970149
57673483
CHINA UNITED-A
3.56
-1.657459
110052400
PETROCHINA CO-A
8.93
-0.4459309
23698263
45.01
-1.531394
INNER MONG YIL-A
MOVERS
225
62
13 2465
INDEX 2449.181
CHINA VANKE CO-A
9.63
2.446809
74275885
PING AN INSURA-A
35104116
HIGH
2460.04
CHINA YANGTZE-A
6.7
-0.5934718
17645133
POLY REAL ESTA-A
12.86
3.459372
56133820
LOW
2402.18
CITIC SECURITI-A
12.74
2.57649
83844319
QINGDAO HAIER-A
11.1
0.1805054
8209890
CSR CORP LTD -A
4.39
0.2283105
23866026
QINGHAI SALT-A
34.9
2.526439
14182830
DAQIN RAILWAY -A
6.65
1.837672
55998525
SAIC MOTOR-A
12.97
-0.9923664
37407227
DATANG INTL PO-A
5.26
-2.95203
10642930
SANY HEAVY INDUS
12.79
-1.539646
35135135
52W (H) 3137.922 (L) 2254.567
2400
10 -Jul
12-Jul
FTSE TAIWAN 50 INDEX NAME ACER INC
PRICE DAY %
Volume
NAME
29.8
-1.650165
11813764
FORMOSA PLASTIC
ADVANCED SEMICON
24.15
0.2074689
30428606
ASIA CEMENT CORP
37.75 -0.7884363
ASUSTEK COMPUTER
259.5
AU OPTRONICS COR
11.2
CATCHER TECH CATHAY FINANCIAL
Volume
-2.337662
7630437
FOXCONN TECHNOLO
113.5
0.4424779
13075094
TPK HOLDING CO L
4331879
FUBON FINANCIAL
30.25
-1.944895
12209738
TSMC
-2.075472
8469166
HON HAI PRECISIO
87.1
-3.114572
36874189
-2.608696
47554126
HOTAI MOTOR CO
187
-2.604167
1237021
301
-3.833866
16639221
16.35 -0.9090909
5547470
YUANTA FINANCIAL YULON MOTOR CO
-1.886792
18303919
HTC CORP
12651323
HUA NAN FINANCIA
CHANG HWA BANK
15.7 -0.6329114
8273924
LARGAN PRECISION
582
0.3448276
1477874
CHENG SHIN RUBBE
77.6
-1.772152
6952393
LITE-ON TECHNOLO
37.75
-1.948052
2624902
CHIMEI INNOLUX C
11.65
-2.916667
19552143
MEDIATEK INC
256
-3.213611
6672210
CHINA DEVELOPMEN
6.96
-1.136364
28279675
MEGA FINANCIAL H
23.15
0.2164502
34891472
CHINA STEEL CORP
27.6 -0.7194245
16941569
NAN YA PLASTICS
51.5
-2.830189
5999581
CHINATRUST FINAN
17.6 -0.5649718
33556376
PRESIDENT CHAIN
156.5
-2.1875
1678033
CHUNGHWA TELECOM
93.6
16132253
QUANTA COMPUTER
76.5
-0.520156
9327591
29.55
COMPAL ELECTRON
-1.886792
7432230
SILICONWARE PREC
-1.5
9035086
93.1
-2.513089
7264518
SINOPAC FINANCIA
11.6 -0.8547009
40824022
FAR EASTERN NEW
31.75
-2.457757
4820274
SYNNEX TECH INTL
70 -0.4267425
4355314
FAR EASTONE TELE
70.5
-2.21914
7651491
TAIWAN CEMENT
17.65 -0.8426966
11651025
DELTA ELECT INC
FIRST FINANCIAL
NAME
75.2
176.5 -0.5633803 28.6
PRICE DAY %
27 -0.7352941
TAIWAN COOPERATI
36.2
-1.897019
17.55 -0.8474576
6252890 3336028
FORMOSA CHEM & F
73.8
-1.6
3886572
TAIWAN FERTILIZE
65.2
-0.761035
2939342
FORMOSA PETROCHE
80
-3.614458
1265037
TAIWAN GLASS IND
28.9
-1.196581
3422138
PRICE DAY %
Volume
94.8 -0.2105263
3494053
TAIWAN MOBILE CO
328.5 -0.4545455 75.7
UNI-PRESIDENT
-3.072983
49.3 -0.7049345
UNITED MICROELEC
12.05
WISTRON CORP
-2.42915
36.2 -0.8219178
MOVERS
13.65
4
46
5001.11
LOW
4842.48
7925335 34221504 10541044
-1.444043
13826171
49.4 -0.2020202
8257733
0 5010
INDEX 4842.48 HIGH
5507063 68457096
52W (H) 5960.61 4840
(L) 4643.05 10-Jul
12-Jul
July 13, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GAlAXy ENtErtAINMENt
MElco crowN ENtErtAINMENt
MGM cHINA HolDINGS 27.50
22.8
11.5
22.7
11.4
22.6
11.3
27.45
22.5
11.2
22.4
11.1
22.3 Max 22.8
Average 22.477
Min 22.25
last 22.65
22.2
SANDS cHINA ltD
Max 27.5
Average 27.45
Min 27.45
last 27.45
22.6
PRICE
Average 14.602
DAY %
YTD %
(H) 52W
(L) 52W
WTI CRUDE FUTURE Aug12
84.81
-1.165365342
-14.46293495
111.3799973
77.27999878
BRENT CRUDE FUTR Aug12
99.02
-1.207223386
-5.972842085
124.6999969
88.48999786
GASOLINE RBOB FUT Aug12
274.4
-0.89927408
2.121324898
326.7099857
243.0099964
862
-0.748416811
-4.115684093
1046.5
801
2.834
-0.66596565
-13.49206349
4.921000004
2.174999952
GAS OIL FUT (ICE) Aug12 NATURAL GAS FUTR Aug12
272.49
-1.336085162
-4.177655871
332.949996
250.8399963
Gold Spot $/Oz
HEATING OIL FUTR Aug12
1567.69
-0.7062
0.1776
1921.18
1522.75
Silver Spot $/Oz
26.8336
-1.1836
-3.5976
44.2175
26.085
Platinum Spot $/Oz
1412.34
-1.1935
1.2793
1915.75
1339.25
Palladium Spot $/Oz
575.82
-0.5904
-11.8868
848.37
537.54 1832.25
LME ALUMINUM 3MO ($)
1901
-0.575313808
-5.891089109
2675.25
LME COPPER 3MO ($)
7540
0.667556742
-0.789473684
9905
6635
LME ZINC
1852
1.202185792
0.379403794
2539.5
1718.5
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Sep12 CORN FUTURE
14.65
16.85 16.80
16.70
Min 14.54
last 14.68
16.65 Max 16.9
Average 16.733
last 16.7
Min 16.68
CURRENCY EXCHANGE RATES
NAME
METALS
16.90
14.50 Max 14.7
Commodities ENERGY
Dec12
WHEAT FUTURE(CBT) Sep12 SOYBEAN FUTURE Nov12 COFFEE 'C' FUTURE Sep12
16100
0.31152648
-13.94975949
25195
15980
15.035
-0.496360026
0.0332668
18
13.95499992
715.5
1.633522727
22.04690832
748
499
PRICE 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 %
1.015 1.547 0.9827 1.2221 79.33 7.9886 7.7558 6.3737 55.735 31.79 1.2705 30.001 42.075 9448 80.509 1.20092 0.78999 7.7891 9.7629 96.95 1.03
YTD %
-1.2069 -0.5976 -0.5393 -0.5452 -0.1008 -0.0238 -0.0181 -0.08 -0.1794 -0.3146 -0.5274 -0.2 -0.4991 -0.127 1.1316 0.0083 -0.0519 0.2735 0.5121 0.4435 0
(H) 52W
-0.5779 -0.4697 -4.5385 -5.7094 -3.0505 0.1377 0.1496 -1.2348 -4.7905 -0.755 2.0543 0.9266 4.1949 -4.0114 -2.5798 1.3215 5.4937 4.4306 6.0341 2.7953 0.0097
(L) 52W
1.1081 1.6618 0.9839 1.4549 84.18 8.0449 7.8113 6.4694 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 1.2208 75.35 7.9823 7.7526 6.2769 43.855 29.63 1.1992 28.764 41.575 8458 72.057 1.00749 0.7871 7.7775 9.7529 95.6 1.0288
MACAU RELATED STOCKS (H) 52W
(L) 52W
ARISTOCRAT LEISU
2.58
0.78125
17.27272
3.25
1.88
655013
150.0999908
CROWN LTD
8.55
-0.1168224
5.68603
9.29
7.45
2422685
830.75
0.544629349
18.38261489
853.5
606.75
1519
-0.229885057
26.13659954
1575
1115.75
182.85
-1.001624256
-21.94236926
288.8500061
NAME
PRICE
DAY % YTD %
VOLUME CRNCY
SUGAR #11 (WORLD) Oct12
22.92
0.174825175
0.394218134
26.03999901
19.23999977
AMAX HOLDINGS LT
0.066
-1.492537
-24.13793
0.119
0.06
2753000
COTTON NO.2 FUTR Dec12
70.9
-0.168966488
-19.28506375
102.25
64.61000061
BOC HONG KONG HO
22.85
-1.508621
24.18479
24.45
14.24
9214848
CENTURY LEGEND
0.242
-3.2
5.217389
0.38
0.204
0
2.93
0
4.642859
4.08
2.3
0 23636005
CHEUK NANG HLDGS
World Stock MarketS - Indices NAME
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
NASDAQ COMPOSITE INDEX
US
12604.53
-0.384016
3.167332
13338.66016
10404.49
2887.98
-0.4944303
10.85658
3134.17
2298.89
FTSE 100 INDEX
GB
5619.92
-0.7866565
0.8549487
5989.07
4791.01
DAX INDEX
GE
6385.73
-1.055494
8.262987
7382.8
4965.8
NIKKEI 225
JN
8720.01
-1.479946
3.130091
10255.15
8135.79
HANG SENG INDEX
HK
19025.11
-2.032763
3.204439
22808.33
16170.35
CSI 300 INDEX
CH
2449.181
0.9733374
4.409648
3137.922
2254.567
TAIWAN TAIEX INDEX
TA
7130.93
-1.749539
0.8321469
8819.929688
KOSPI INDEX
SK
1785.39
-2.244866
-2.210062
2174.73
S&P/ASX 200 INDEX
8.3
33500
CHOW TAI FOOK JE
9.45
-8.783784
-32.11207
15.16
8.55
32856672
EMPEROR ENTERTAI
1.41
-0.7042254
27.02703
1.84
0.97
670000
FUTURE BRIGHT
0.97
-2.020202
130.9524
1.09
0.3
2688000
24.95
8.69
6268200
124.3
84.4
2038379
HOPEWELL HLDGS
22.4
-0.8849558
12.78952
24.903
18.56
1088255
HSBC HLDGS PLC
67.1
-1.468429
13.72881
78.6
56
11839167
HUTCHISON TELE H
3.74
0.5376344
25.08361
3.86
2.42
4571000
LUK FOOK HLDGS I
16.52
-2.132701
-39.04059
46.15
14.7
5306000
MELCO INTL DEVEL
5.62
-1.748252
-2.599653
10.76
4.3
1643000
MGM CHINA HOLDIN
11.22
-2.264808
16.9706
17.183
7.6
2420006
6609.11
MIDLAND HOLDINGS
3.81
-2.056555
-3.643026
5.217
2.887
742000
1644.11
NEPTUNE GROUP
0.093
0
-16.21622
0.151
0.08
0
NEW WORLD DEV
9.68
-2.024291
54.63258
10.96
6.13
11030619
SANDS CHINA LTD
6936231
ID
3984.12
-0.871158
4.241981
4234.734
3217.951
FTSE Bursa Malaysia KLCI
MA
1625.49
-0.2430268
6.190511
1632.94
NZX ALL INDEX
NZ
781.971
0.6045503
7.148629
806.015 3527.48
9.99
13.68
14.8128
3765.9
13.70261
19.16
-28.24
33.42697
4612.2
-0.2928759
39.90756
0.1116071
-2.464066
0.2812826
3462.29
-1.089325
8.97
-0.8434864
-0.6973934
PH
18.16
CHINESE ESTATES
19
4067.971
PHILIPPINES ALL SHARE IX
CHINA OVERSEAS
105.8
AU
JAKARTA COMPOSITE INDEX
11.0
14.70
14.55
22.3 22.2
last 11.22
16.75
22.4
last 22.65
Min 11.06
14.60
22.5
Min 22.25
Average 11.21666
wyNN MAcAu ltD
22.7
Average 22.477
Max 11.48
SJM HolDINGS ltD 22.8
Max 22.8
27.40
GALAXY ENTERTAIN HANG SENG BK
22.65
-1.948052
3.189062
33.05
14.9
SHUN HO RESOURCE
1.14
0.8849558
14
1.32
0.82
30000
1310.53
SHUN TAK HOLDING
2.69
-1.102941
5.113918
4.668
2.241
1654000
700.441
SJM HOLDINGS LTD
14.68
-0.1360544
17.38801
20.711
10.079
16794200
2695.06
SMARTONE TELECOM
16.08
0.7518797
19.64286
18.5
9.8
942000
16.7
-2.567095
-14.35897
27.48
14.807
5146840
HSBC Dragon 300 Index Singapor
SI
570.94
2.6
15.03
na
na
STOCK EXCH OF THAI INDEX
TH
1194.51
-1.171536
16.5012
1247.72
843.69
HO CHI MINH STOCK INDEX
VN
408.72
0.3535651
16.26227
492.44
Laos Composite Index
LO
1005.6
0.902058
11.80041
1107.3
WYNN MACAU LTD ASIA ENTERTAINME
4.08
2
-30.61225
10.8692
3.66
65942
BALLY TECHNOLOGI
46.02
-0.4757785
16.32962
49.32
24.74
245543
332.28
BOC HONG KONG HO
2.93
-2.333333
22.22657
3.15
1.81
2800
876.33
GALAXY ENTERTAIN
2.5
0
33.68984
3.24
1.08
2250 3850860
INTL GAME TECH
15.43
-1.969504
-10.2907
19.15
13.12
69.1
-0.6184381
12.79791
94.5
46.01
213862
41
-0.4854369
-4.048677
62.09
36.08
7114354
MELCO CROWN-ADR
10.39
1.663405
8.004159
16.15
7.05
5167238
MGM CHINA HOLDIN
1.46
0
22.51476
2.2131
1.0025
3000
MGM RESORTS INTE
10.21
-1.542912
-2.109303
16.05
7.4
10484314
SHUFFLE MASTER
15.02
1.281187
28.15699
18.77
7.35
569749
1.84
0
14.45827
2.6037
1.2624
400
100.64
0.4090592
-8.914832
165.4931
95.82
2214691
JONES LANG LASAL LAS VEGAS SANDS
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalization. All data supplied by Bloomberg unless otherwise indicated.
SJM HOLDINGS LTD WYNN RESORTS LTD
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CVV2/CVC2
14 |
business daily July 13, 2012
Opinion
Life after Darwin Didier Raoult
Director of the Research Unit in Infectious and Tropical Emergent Diseases, collaborating with CNRS (National Centre for the Scientific Research)
M
any Greek philosophers perceived the world to be in perpetual motion – a process of constant evolution. In Charles Darwin’s world, however, creationism set the rules for science. So, underpinning his theory of evolution is the literal interpretation of the Bible that dominated his era, combined with Aristotle’s vision of nature as definitively fixed. Darwin, together with J. B. Lamarck, promoted a vision of a changing world, while upholding the idea that organisms evolved from a single root – a position held by Adam and Eve in the creationist worldview, and taken over in the modern era by the Last Universal Common Ancestor (LUCA). And from that remnant of the Biblical story of creation sprung the notion of a tree of life, alongside major concepts such as gradualism (the view that speciation does not occur abruptly) and the idea that minor selection pressures can, over time, have a profound effect on improved fitness. Darwin’s vision of the world deeply influenced biology in the twentieth century, despite persistent questions posed by factors such as lateral gene transfer, neutral evolution, and chaotic bottlenecks in natural selection. But recent genetic research unequivocally refutes this worldview.
genes”), are commonly created by gene duplication, fusion, or other unknown mechanisms. Yet, according to Darwin’s tree of life concept, this phenomenon would be impossible. Human cells comprise genes of eukaryotic, bacterial, archaean, and viral origin. As this chimerism increases, it occasionally integrates genes from microbes that live within the human body – as happens when a human is infected by herpesvirus 6. Once integrated in a person’s genome, these genes can be transmitted from parent to child – making microbial genes their “grandfathers.” This transfer of genetic sequences from parasites to hosts could involve hundreds of genes for a bacterium in different hosts. For example, if the bacterium Wolbachia’s genes are integrated by different hosts, such as spiders, insects, or worms, the hosts’ offspring are also descendants of Wolbachia.
that of like-sized microorganisms. But the current classification of the domains of life is based on the ribosome – the production apparatus of proteins – which does not exist in these viruses. Without ribosomes, traditionalists say, viruses cannot be considered biological entities comparable to other microbes. But that is pure dogma; these viruses are akin to the other microbes. Darwin’s theory is further used to support the belief that ancient humans – Neanderthal, CroMagnon, and Denisova – did not
Chimeras galore
to find new models to
Moreover, certain viruses’ size and genetic repertoire is comparable with that of bacteria, archaea, or small eukaryotes. Indeed, the life of giant viruses is as complex as
Genetic research, in particular, must be free explain, and enhance, twenty-first-century scientific discovery
mix. In fact, based on Darwin’s assumptions, most anthropologists claim that modern humans were simply descended from CroMagnons, who had exterminated their less-fit adversaries. Given this supposition, a single name (Homo sapiens) is used for both modern humans and the preferred ancestor, Cro-Magnon. But we now know that modern humans are chimeras of these three ancient humans. This understanding also refutes the legend of “Mitochondrial Eve,” the woman from whom all humans supposedly descend on their mother’s side. Research on the human leukocyte antigen genes, which are involved in the human immune response, shows that such a common ancestor could not have existed; this group of genes derives from those of all three known ancient humans. Genetic research, in particular, must be free to find new models to explain, and enhance, twentyfirst-century scientific discovery. Today, Darwin’s theory of evolution is more a hindrance than a help, because it has become a quasitheological creed that is preventing the benefits of improved research from being fully realised. © Project Syndicate
Genetic puzzles Life is primarily the expression of the information contained in genes. All living organisms appear as mosaics of genetic tissue, or chimeras, suggesting that no two genes have the same evolutionary history. This framework is incompatible with the “tree of life” representation. Rather, it resembles a rhizome – an underground stem that sends out roots and shoots that develop into new plants. Indeed, we now know that the proportion of genetic sequences on earth that belongs to visible organisms is negligible. Furthermore, only 15 percent of the genetic sequences found in the samples from the environment and from feces analysed in metagenomic studies belong to the three domains of microbes currently recognized in the tree-oflife framework – bacteria, archaea, and eukaryotes. Viruses contain another 15-30 percent of these genetic sequences. The unidentified genetic sequences pose a problem, because it is not known whether vehicles other than viruses, bacteria, archaea, and eukaryotes exist. Conversely, we know that new genes, designated ORFans (“orphan
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July 13, 2012 business daily | 15
OPINION
China’s economy needs spending wires power, not steel factories Business Leading reports from Asia’s best business newspapers
Taipei Times Taiwanese house hunters’ interest in purchasing homes cooled this quarter, from the preceding three months, because many turned cautious as new registration requirements for housing transactions loom, a survey by Sinyi Realty In, Taiwan’s only listed broker, found. About 31 percent of the respondents reported lower buying interest, while 18 percent intended to up their stakes and the rest adopted a neutral stance, the survey indicated. This sentiment bodes ill for housing transactions in the second half of the year, with several analysts forecasting a drop of between 10 percent and 15 percent from the first six months of the year.
James Gibney Mark Whitehouse Bloomberg View editors
Asahi Shimbun Softbank Corp. group is considering doubling the number of large-scale solar farms over the next two to three years, a company executive said. “We have already decided on the 10 [initial] locations, but around double that number is conceivable,” Hiroaki Fujii, vice president of SB Energy Corp., a subsidiary of Softbank Corp., was quoted as saying. “Studies are needed because the number of candidate sites is increasing.” The company plans to relax its standards to choose more candidate sites since the new purchase system of renewable energy came into effect in Japan on July 1.
Jakarta Globe Indonesia would accept little or no export growth this year as Europe’s sovereign-debt crisis undermines an earlier target for a 12 percent increase in overseas sales, Vice Minister of Trade Bayu Krisnamurthi was quoted as saying. The government didn’t expect the problems that arose in Greece, Spain and Italy when it made the projection at the beginning of the year, Mr Krisnamurthi added. “The level of uncertainty in Europe is very high,” he said. “If we could match last year’s level of exports then we are already satisfied. Flat growth, maybe a small one.”
Business Inquirer The Philippines Central Bank will further relax the single borrower’s limit by exempting securities being underwritten by banks from the computation of their exposure to a client. The intention of the move is to allow banks to engage in more business activities with big corporate clients, which have huge demand for credit and other financial services. Under the current rules, bank’s exposure to a single client must not exceed 25 percent of the bank’s net worth. The rule is meant to prevent banks from risks, such as losses due to loan defaults, arising from heavy exposure to one entity.
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xpect some “sky is falling” headlines on Friday when China releases its most recent figures on economic growth, estimated to clock in at an annualised 7.7 percent, the slowest rate in three years. The more important issue is what China’s leaders should, or can, do about it. China has produced a tattoo beat of disquieting news since March, when Premier Wen Jiabao lowered the government’s growth target for 2012 to 7.5 percent, down from the 8 percent target in place since 2005. Real estate prices, trade growth, construction and luxury watch sales are all declining. The government has issued stern edicts for officials to cut back on flashy cars, banquets and other perks. Overseas, the global economic slump and the persistent crisis in Europe have left China’s mighty export engine revved up but with fewer places to go. Increasing exports to the U.S., which just displaced the European Union as China’s biggest foreign market, risks even greater trade tensions in a U.S. election year. As a result, Wen is focusing on homegrown methods to boost growth, such as promoting domestic investment. This strategy risks repeating the excesses of the 4 trillion yuan (US$586 billion at the time) stimulus package of 2008, which fuelled inflation, pushed credit beyond sustainable levels and led to a property bubble. It also favours large, and often inefficient, projects by stateowned enterprises over small and medium-sized companies: witness the government’s decision in May to approve an US$11 billion steel plant, for an industry in which there is already excess capacity. A better approach would be for China’s government to
A better approach would be for China’s government to help its people and their economy by putting more money into public goods help its people and their economy by putting more money into public goods.
Public goods According to World Bank data for 2008, China spent only about 1 percent of its gross domestic product on health, 3.7 percent on education, and 4.7 percent on pensions and other forms of social protection. The averages among members of the Organization for Economic Cooperation and Development are 6.3 percent, 5.4 percent and 15.2 percent, respectively. With more than US$3 trillion in foreign reserves and a relatively light public debt burden, China is in a better position than most to shoulder such expenditures. Beyond that, China needs to rely more on domestic consumption, a point Bloomberg View has argued. To some extent, this is already happening: in the first quarter of 2012, domestic consumption accounted for 43 percent of GDP growth, versus 28 percent a year earlier. Rather than trying to support this trend artificially with cheap credit, China should put in place the kind of structural reforms that will create real spending power. One promising area is labour market liberalisation. Wages
are on the rise as demographic trends shrink China’s labour force. Revising or eliminating China’s notorious residential registration system, known as hukou, would enable more rural workers to migrate legally to the cities, improving productivity, spurring consumer spending and reducing inequality. Another option is to enable ordinary Chinese savers to access investments other than low-paying bank deposits. This would allow them to achieve market returns, alleviating concerns about retirement and freeing up spending money. The government recently took a small step in this direction by slightly widening the band for deposit rates. Unfortunately, the positive effects of that step were undermined by two cuts to China’s benchmark rate over the last five weeks.
Pilot programme More broadly, the state has the power to spur competition and economic growth by liberalising the terms under which entrepreneurs and private companies can buy land and access financing. A
pilot programme started in Wenzhou this March supports the creation of various new private funding mechanisms, including village banks, small lending companies and the issuance of securities. Opening the market to foreign banks would also expand financing opportunities – according to the International Monetary Fund, they hold less than 2 percent of assets in China, the lowest share among major emerging markets. After the Bo Xilai scandal and with a changing of the guard ahead, China’s leaders are even more stability-minded than usual. Nonetheless, they’ve managed to take some important steps over the past six months toward transforming their economy, such as widening the band for the yuan’s exchange rate against the dollar and relaxing rules for foreign direct investment. Initiatives such as changing deposit rates and promoting small-business lending might not capture the public imagination like an US$11 billion steel plant, but they’ll ultimately make more of a positive difference.
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business daily July 13, 2012
CLOSING Italy’s economy to shrink 2.4 pct
Peugeot slashes 8,000 jobs
Italy’s economy will contract by 2.4 percent or more this year, the head of the employers federation Giorgio Squinzi said yesterday, doubling the official government forecast of a 1.2 percent shrinkage. “In a best case scenario, GDP will go down 2.4 percent in 2012 and probably even more,” Mr Squinzi said at a conference in Rome. “It is hard to see an improvement in the second half of the year,” he said. The head of Confindustria, who has clashed with Prime Minister Mario Monti in the past, also criticised the government by saying that a much-anticipated reform of labour laws had not gone far enough.
French carmaker PSA Peugeot Citroen shocked France yesterday with an announcement that it will cut 8,000 jobs, sparking union anger and underlining the country’s competitiveness problems. France’s biggest carmaker said it expected the European market to shrink 8 percent this year. As a result, the auto division is expected to report an operating loss of some 700 million euros (US$860 million) for the first of half of 2012. It said in a statement that it would cease production at its historic Aulnay site near Paris which employs 3,000 people. In addition, some 3,600 jobs will be cut across the corporate structure.
HK secretary held for ‘corruption’ Development chief resigns amid bribery probe
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ong Kong’s development secretary stepped down yesterday amid news of his arrest by the anti-corruption agency on suspicion of corruption, a government spokesman said, dealing a fresh blow to the city’s beleaguered new leader Leung Chun Ying. Mr Leung, who is himself ensnared in a scandal over six illegal structures at his HK$500 million (US$64 million) home in the exclusive Peak district, made Mak Chai Kwong his development minister barely two weeks ago. A spokesperson for Mr Mak confirmed he had resigned, 11 days after he took office, but declined to comment on reports of his arrest. Mr Mak has not made any comment since his arrest and the reasons for his resignation are not clear. Financial Secretary John Tsang will take over his duties, the government said in a statement on its website. The resignation came shortly before the city’s Independent Commission Against Corruption said it had arrested four unnamed people, including the head
of a government bureau and an assistant director of a government department, for “allegedly violating the Prevention of Bribery Ordinance in relation to government housing allowances”. The agency did not say if any charges had been laid. On the arrests, the Department of Justice also issued a statement, saying that it “will ensure that due and proper processes are observed in the conduct of the case” and that “the law and prosecution policy” would be followed.
Allowance scheme Mr Mak has been accused of abusing his housing allowance, Apple Daily reported on July 6. Mr Mak and Tsang King Man, the assistant highways director, allegedly bought apartments in a residential project and leased the properties to each other while collecting their rent allowances, the paper said. Mr Mak had previously denied any wrongdoing. “I gave [the civil service bureau] all the facts, and I don’t think I breached any regulation,” he told to a Hong Kong radio, according to AFP.
Mak Chai Kwong only sworn in as a secretary in the newly-installed government of CY Leung last week
“I have followed regulations and I don’t think the matter involves my personal integrity,” he said. Hong Kong has been rocked by a series of scandals involving senior government officials, including the case related to Mr Leung, which has badly hit his popularity ratings. In a city where many residents need to work their whole life to pay off a mortgage on a small home, the recent scandals and perceived cosy relations between business tycoons and government officials have
triggered a wave of condemnation. Mr Leung, who will make his first formal appearance before the city’s legislators on Monday, is expected to be grilled about the illegal structures at his home and the credibility of his two-week old administration. “His administration is only two weeks old and one of his ministers has to resign ... this means its credibility is highly questionable,” said legislator Alan Leong, who heads the Civic Party. Agencies
IHH to raise US$2b in third-biggest IPO Malaysia accounts for two of this year’s three largest first-time offerings
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HH Healthcare Bhd, Asia’s largest hospital operator, priced its US$2.1 billion initial public offering near the top of an indicative range as strong investor
interest in the third biggest IPO of 2012 reinforced Malaysia’s gloomdefying market. IHH said it had fixed the cornerstone, institutional and final retail price for
IHH has expanded its local holdings Pantai Hospitals in recent years
its concurrent listing on Malaysia and Singapore bourses at 2.80 ringgit/S$1.113 per share, at the upper end of the indicative range of 2.67-2.85 ringgit per share. “We are delighted with the response that the IHH IPO has received,” managing director Lim Cheok Peng said in a statement yesterday. “We believe it underscores the strength and quality of our offering, as well as the depth of investor interest in the opportunities we present.” IPOs in Malaysia, where the government has a heavy hand in the economy and the equity market is dominated by local investors and large domestic pension funds, have defied a trend in financial markets such as Singapore, where motor racing firm Formula One decided to postpone its near US$3 billion flotation. The world’s biggest listing this year after Facebook Inc and Felda Global Ventures Holdings Bhd, IHH has attracted investors ranging from sovereign wealth fund Kuwait Investment Authority to International Finance Corp,
the private investment arm of the World Bank. IHH will debut on the Malaysian and Singaporean bourses on July 25. At 2.80 ringgit per share IHH would have a market value of 22.5 billion ringgit (US$7.2 billion), making it the world’s secondbiggest listed healthcare provider after U.S. hospital operator HCA Holdings Inc. “The majority of the demand comes from domestic and international long-only funds,” said a source familiar with the deal. “International demand is around 60 percent and there’s little price sensitivity.” With its dual listing in Singapore, IHH joins Kuala Lumpur-listed KPJ Healthcare Bhd, Singapore’s Raffles Medical Group, Bangkok Dusit Medical Services and India’s Fortis Healthcare among major listed Asian health-service providers. IHH’s IPO consists of 2.23 billion shares with an over-allotment option of up to 170 million shares, putting the total offering at US$2.1 billion. Reuters