Macau Business Daily, 2 July, 2012 by Business Daily

CY Leung takes charge in Hong Kong Chinese President Hu Jintao yesterday swore in Leung Chun Ying as Hong Kong’s new leader. Mr Leung takes over the city of seven million people amid falling popularity ratings, a series of setbacks and protests over his leadership. Small groups of protesters have also tried to disrupt Mr Hu’s visit, as Hong Kong marked 15 years since the handover.

Year I - Number 66 Monday July 2, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

Pages 10, 16

www.macaubusinessdaily.com

Small businesses squeezed out S

mall- and medium-sized enterprises are finding it more difficult to survive as Macau develops into a leisure and entertainment centre, says the chairman of Macau’s SME Association. “Our biggest problem is we’re being squeezed out by the gaming industry,” Stanley Au Chong Kit says in an interview with Business Daily. Macau’s SMEs are illequipped to make the best use of assistance. “They [SMEs] don’t have accounting to present to lending agencies. They lack knowledge and lack the business structure to apply for these loans,” he says.

The solution would be to provide more training to Macau businessmen, for them to be able to cope with a new and more challenging environment. Mr Au, the chairman of Delta Asia Bank, also criticises the communication gap with the administration, saying more research is needed to find what the actual needs of SMEs are. “They don’t talk often to us … I think the government talks more with the real estate developers, because these are the people who can bring big money to the government,” he says. More on pages 4 & 5

Guangdong gunning for services sector

HANG SENG INDEX 19590

With Macau signing a ninth supplement to the Closer Economic Partnership Arrangement with the mainland today, Guangdong province has announced it wants to liberalise trade in services with Macau by 2014, one year ahead of the rest of the mainland.

19490 19390

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Long plan needed for human resources

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Labour disputes are down and so is unemployment, while wages are up, but Macau must think ahead to improve its labour market, namely through the experience and expertise of expatriate workers, the head of a think tank says. Page 3

June 29

HSI - Movers Name

%Day

SANDS CHINA LTD

5.60

Inflation driven by domestic demand, not imports

COSCO PAC LTD

5.32

WANT WANT CHINA

4.63

CHINA MERCHANT

4.22

CHINA COAL ENE-H

4.11

SWIRE PACIFIC-A

0.90

CHINA RES LAND

0.77

HSBC HLDGS PLC

0.59

HANG SENG BK

0.57

ESPRIT HLDGS

-1.00

ncreasing domestic demand and not imported inflation is keeping the city’s rate of inflation elevated, the director of Policy Research Office Lao Pun Lap said. Inflation stood at 6.67 percent at the end of May, half of which can be attributed to rising prices in food and non-alcoholic drinks, official data shows. Mr Lao says imported inflation was the main contributor towards inflation in the past, with high prices for consumer goods from the mainland. High inflation in the mainland and a strengthening currency meant higher prices in Macau. However, mainland inflation has been below 4 percent since

February and the yuan’s value has stabilised significantly, leading to relatively stable prices in imported products. The new driver for inflation is strengthening domestic demand, Mr Lao’s research indicates. Purchasing powers of residents continue to rise, driven by rising income. According to official data, private consumption grew 10.2 percent last year and rose to 5.4 percent year-on-year in the first quarter of this year. Mr Lao said the government needs to pay special attention to underprivileged groups and provide subsidies to sooth the pressure from inflation. X.C.

Source: Bloomberg

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business daily July 2, 2012

macau

Guangdong opens service sector ahead of schedule Guangdong plans to complete trade liberalisation in services with Macau and Hong Kong by 2014 Xi Chen

xi@macaubusinessdaily.com

and investment through greater transparency, improving standards and better exchanges of information. Improvements are planned in trade and investment promotion, customs clearance facilitation, commodities inspection, food safety, electronic business, transparency in laws and regulations, small and medium enterprises, manufacturing, protection of intellectual property rights, brand promotion and education. The CEPA free trade agreement was signed in 2003 between Macau, Hong Kong and the mainland. The agreement connects businesses with the huge mainland market and allows mainland enterprises to reach out to international markets.

Photo by Manuel Cardoso

uangdong wants to liberalise trade in services with Hong Kong and Macau by 2014, one year ahead of the mainland’s other provinces and autonomous regions. Governor Zhu Xiaodan said on Saturday the province would soon

work out an action plan and unveil detailed measures to realise the goal. Last August, vice-premier Li Keqiang said implementing the Closer Economic Partnership Arrangement or CEPA, liberalisation of trade in services would be achieved between the two SARs and the mainland by the end of the 12th five-year plan ending in 2015. Secretary for Economy and Finance Francis Tam Pak Yuen

and vice-minister for commerce Jiang Yaoping will sign the ninth supplement to CEPA today. A similar supplement was signed with Hong Kong on Friday. It included 17 policies enhancing cooperation with Guangdong, providing Hong Kong’s service industries with competitive advantages in areas including legal services, accounting, construction, medicine and education. Mr Zhu also announced new policies covering environmental protection, medical care and social welfare. These policies will be detailed and implemented step by step, he added. Under the CEPA framework, Macau and the mainland plan to boost trade

Bigger handouts for bus operators business as usual

Don’t be a sleepy watchdog

The government has given the green light to a 23-percent increase in fees paid to the city’s three bus operators Tony Lai

tony.lai@macaubusinessdaily.com

T Paulo A. Azevedo pazevedo@macaubusiness.com

he Commission against Corruption must be all too familiar with the charge that it is a sleeping watchdog. Not so long ago the anti-corruption body requested and was granted more powers, and there seems little need to wait for anonymous accusations – some of them far too public to be ignored – before starting investigations. Take the Macau Yacht Club deal, for example. The reports are that the club, to have its clubhouse erected, wants to allow a developer the right to build a 45-storey residentialcum-commercial tower on land granted by the government. The matter needs to be investigated in detail. Probably everything is fine. We all know that non-profit associations tend to be a bit lazy because they depend on the work of their members and sometimes those unpaid members are too busy and neglect their responsibilities. However, the critics of the club’s management are too loud to be ignored and, if they say there is evidence of wrongdoing, the case must be probed. Failure do to so would be to betray the purpose of the graft buster and the extra powers it has been given. How can the commission’s top officials keep their jobs if they fail to leave any stone unturned in their efforts either to restore the reputation of the yacht club’s board of directors or to punish any wrongdoing?

he bus service charge will be raised by 23 percent after all three operators requested an increase in April, the Transport Bureau announced on Friday. The increase is “undergoing the relevant administrative procedures and will then be published in the Official Gazette”. The move will not affect bus fares. The administration sets bus fares and in turn distributes the revenues it collects to the bus operators based on a per mile service charge. The adjustment is based on a formula that includes the consumer price index, the average salary of employees in land transportation – which accounts for half of the weight in the formula – and fuel prices. The three indexes were increased by about 9.8 percent, 33 percent and 21 percent in February this year or the end of last year, relative to the 2010 indexes. After analysing the applications submitted in April, the bureau

approved an increase of 23 percent, although one operator requested for an increase of 50 percent. The bureau said it had the right to change prices again if the three indexes drop. According to the concession contracts between the government and the operators, Sociedade de Transportes Colectivos de Macau (TCM), Transportes Urbanos de Macau S.A.R.L. (Transmac) and Reolian have the right to request an increase once a year. Reolian recorded a loss of 58.5 million patacas (US$7.3 million) last year due to an unexpected increase of operating costs, including a 90-percent increase in salaries for drivers of 63.2 million patacas. The company commenced services in August last year. TCM and Transmac have not yet released their results for last year but they earned 29 million patacas and 14.7 million patacas respectively in 2010.

July 2, 2012 business daily | 3

MACAU

Call for human resources plan Long-term strategies to develop the workforce are needed if Macau is to become a global centre for leisure, says study group

editorial

Corrected, not explained

Tony Lai tony.lai@macaubusinessdaily.com

Deputy Editor-in-Chief

MOP11,000 Median monthly wage for workers in the first quarter

abour disputes have de- a record low of 2 percent last month. creased over the past de- The tourism and gaming industries cade but Macau has to set had created jobs for unskilled and up long-term strategies for sus- imported labour, Mr Fong said. tainable development that include “We [the committee members] resident and non-resident workers, don’t have any short-term concerns the head of a study group said on but we need to consider the sustainFriday. The study group is part of ability of human resources developthe Committee for Economic De- ment in the future.” velopment. Macau has to Davis Fong Ka develop longChio told reterm strategies porters after that will enable We don’t have the group’s first its labour marmeeting this any short-term ket to become year that labour a world leisure relations in Ma- concerns but we and tourism cau were “quite centre amid need to consider stable”. challenges and He said there regional compehave been fewer the sustainability tition, he said. conflicts be“We need to tween employ- of human resources rely on not just ers and workers resident workdevelopment in the compared to 10 ers but also on years ago. Low future the experience levels of unemas well as exployment and Davis Fong Ka Chio, pertise from the rising median Economic Development Council non-resident earnings had labour,” said demonstrated Mr Fong, who the effectiveness admitted that of the government policy. human resources was a “compliOfficial data shows that median cated issue”. monthly earnings reached a new He told Business Daily last week high of 11,000 patacas (US$1,375) the government has to find other in the first quarter of this year while measures, including increasing the unemployment rate remained at the city’s population, to work

around tackle the tight human resources rather than only importing workers. “We need to train up the local people to let them to have a chance to be promoted and contribute in the middle- or high-level positions,” he said. The study group did not come up with any direction forward in last week’s meeting but Mr Fong said each member would submit suggestions for their own industries before July 10, which would be discussed in the next meeting. A this point the group has no preference for action, namely for tackling the unbalanced distribution of labour force between gaming and the non-gaming sectors, he said, adding that they will set up strategies depending on the urgency of the issues. The study group, includes 24 members from Macau industry, was set up under the Economic Development Council.

Engineering executive charged over Ao bribes A

n executive from Hong Kong-based ATAL Engineering Ltd is one of the eight defendants named in the final trial of the corruption scandal surrounding former secretary Ao Man Long, the Portugueselanguage newspaper Tribuna de Macau reported. ATAL was part of a consortium that won the tender to build a wastewater treatment plant at the Zhuhai-Macau Cross-Border Industrial Park.

Luc Vriens, the head of Belgium company Waterleau Global Water Technology, and Chan Ying Lun, an executive from China State Construction Engineering (Hong Kong) Ltd – representing the other two members of the winning consortium – have also been charged. The trial which is set to start on September 17 will also include Hong Kong tycoons Joseph Lau Luen Hung, the head of developer Chinese Estates Holdings Ltd and entertainment businessman Steven

Lo Kit Sing. Chinese Estates has confirmed in a filing to the Hong Kong Stock Exchange that Mr Lau was “served a notification” over the prosecution “for committing offences of bribery and money laundering” in regards to the plot where La Scala is under construction. But the difficulty in notifying all the defendants and ongoing appeals could push back the start of the trial, lawyers told Tribuna de Macau. V.Q.

he past week brought an unexpected decision by the government. From now on, all requests for residence should be conveyed to the Macau Trade and Investment Promotion Institute. This seems an anodyne administrative matter. In practice, it was very significant, and that is why it became news. It changed the rules for applicants that hold Portuguese nationality. This subset of foreigners is subject to specific regulations and follows different procedures. As we now know, the proposed changes were abandoned over the weekend. It is pleasing that the administration backtracked so rapidly. Not because one cannot debate if, why and how applications for residence by Portuguese nationals would be dealt with but because it happens that the decision was marred by an unqualified illegality. The proposed changes went against the political will expressed by the mainland and Portugal in the agreements that led to the handover, disregarded the Basic Law and plainly violated the applicable regulations. So, the episode raises important issues that are still to be answered and that the retraction of the proposal does not clarify. Why was the initiative taken in the first place? Any legal adviser in the public administration, not to mention anyone with a modest mastery of the language, would realise the decision plainly contradicted applicable legal norms. No one involved in the decision could ignore that. Why was such an obvious violation of legal norms decided and announced publically? These are important questions because they bring us to the matter of the preservation and consolidation of the rule of law. Maybe, the initial motivation was only some perceived convenience underpinned by some superficiality of approach. But the episode may also suggest an approach to the extant laws that bodes ill for the strengthening of our legal foundations. It is not the first time we have had this feeling, that some in the public service still look at the compliance of laws with a nonchalance that we could do without. If for some reason someone wants to change something, and bumps on to “annoying” legal obstacles, then the way forward is to find a smart shortcut. We can pretend that things are what they are not, sometimes as easy as misnaming them, or invent a different procedure that makes a mockery of the principles and intentions underpinning a rule, or invoke a reasonable principle or objective, preferably of purely technical nature, that may bear a superficial relationship to the subject but is ultimately irrelevant. The later, combined with operational assurances that were plainly unenforceable, was in part the case in this incident. If that approach was generalised, it would result in a praxis that weakens the legal system. If the law were to comply with only when it was convenient or immaterial for the purpose, to sideline if it is inconvenient, and to remove or change, regardless of the consequences on the coherence of the legal system, if no other alternative is available, then the assurances it provides to the citizens would be empty. If this became a broadly followed approach and that would herald the end the rule of law. No system of laws can survive if those who have the highest responsibilities to protect and enforce them do not feel really bound or are all too often looking for ways to circumvent them. The retraction of the decision about residence requests by Portuguese nationals shows we are not there. But the fact that it happened at all signals that we may not be far enough. We assume the changes were proposed in good faith. That is an additional reason why a clarification about this episode should be forthcoming.

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business daily July 2, 2012

macau Brought to you by

HOSPITALITY

More trained businessmen needed, says Au Luciana Leitão

leitao.luciana@macaubusiness.com

Photos by Manuel Cardoso

Tourism flows There is a perception that the number of visitors has risen steadily since 2004. That is the overall trend for the period but there have been notable oscillations. The last part of 2008 and the first half of 2009 actually saw a decrease in arrivals.

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The majority of visitors arrive by land: more than half, as a rule. The average value for the period considered in the tables – January 2088 to May 2012 - of slightly over 53 percent. The equivalent value for seaborne arrivals is 40 percent and the remainder of the travellers, a tad below 7 percent, arrive by air. The actual monthly values have, in relative terms, been mostly stable, with standard deviations of about 2 percentage points for the arrivals by land and sea, and less than 1 percentage points for arrivals by air. Without surprise, the number of entries rises usually in summer and peaks in August, with smaller peaks around the Christmas and New Year festivities. A curious feature of the various types of arrival points is that there are very significant differences between the number of arrivals and the number of departures.

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It is apparent that in a much sustained way, more people enter by sea than leave; conversely, more people leave by land than arrive. This suggests a permanent flow of visitors that use the territory as the entry point to the mainland. Similarly, the airport reveals a net flow that suggests that is used as a departure gate from the mainland by people arriving by other means of transportation. On average, the net balance in the period exceeds 5,500 people and shows a slowly rising linear trend. Overall that represents less than 0.2 percent of the average number of arrivals. J.I.D.

The chairman of the Macau Association of Small and Medium Enterprises, Stanley Au Chong Kit, says the economy depends solely on the gaming industry, posing problems for development of SMEs. Mr Au, the chairman of Delta Asia Bank, says the lack of trained businessmen at the helm of SMEs does not help. He believes poor education is the main problem. Times are hard for small and medium enterprises. Why? Not only in Macau, but also worldwide. It’s difficult. We have been through economic slowdown and also we have a lot of crises going on, like the European crisis. Some of the emerging country currencies are now devaluating. What are their main problems in Macau? Macau is different, since it depends entirely on gaming. And gaming depends entirely on tourism from China. In the course of the next few months, the number of visitors to Macau will come down ... the per capita spending is already coming down. To sum it up, our biggest problem is we’re being squeezed out by the gaming industry. Rental has increased tremendously because of the gaming industry. The labour shortage is also because of the gaming industry. They have so many attractions that the other shops cannot compete. For example, some of the restaurants in casinos offer very cheap food. The people cannot compete with them at all. The government constantly talks about the need to diversify the economy. Why hasn’t this occurred? I think it is necessary but it’s easier to talk about it than to do it. The government has to do something. It must be a government initiative. That’s why most countries have special counsels or special committees for small and medium enterprises, but we don’t have this in Macau. In previous interviews, you’ve said small and medium

enterprises suffered from the lack of knowledge of the people in charge. How can that change? Yes, I still insist on that. I think we have to raise the general education level of the Macau people, from every level. Could we promote diversification through education development? Yes, but it would take time. I don’t think this can be done in one-two years. It’s a long-term project, I mean five to ten years.

services. As a citizen you experience it. Five years ago, the quality of service and the restaurants were much better than today. The current government policy is to restrict imported labour. Will the administration have to change this? Yes. Small and medium enterprises can never compete with big businesses in attracting local workers and also foreign workers.

Considering the work the government has been developing to promote diversification, do you think it is on the right track? It all depends on the attitude of our chief executive. If our chief executive really were to put his heart to changing the spectrum of business activity, he could do it. If he thinks life would be easier if we continue to depend on the gaming industry income, then, of course, that will never happen.

Hengqin Island could be a solution to promote the development of small and medium enterprises? The central government has the right intentions to let us use the Hengqin Island to help us to diversify our business activities, but I think they are having some problems. Now, there is a lack of capital and investment. Also, I think a lot of the central government’s intentions are not yet implemented. There is not much going on at the moment. We talked about it a couple of years ago, but now the whole topic has been quiet.

Increase of inflation and human resources are problems that result from the fact that Macau solely depends on the gaming industry. What are the other consequences? There is a decrease in the quality of service provided by all the private

Will it take a lot of time before you can see developments? Yes, a lot of time. The reason is the central government must be preoccupied with the economic slowdown there, so it has no time to take care of Hengqin Island. It’s a small matter.

Pressing issues

July 2, 2012 business daily | 5

MACAU In the course of the next few months, the number of visitors to Macau will come down ... the per capita spending is already coming down. To sum it up, our biggest problem is we’re being squeezed out by the gaming industry

But could Hengqin Island be a good opportunity for Macau? If the policies are properly coordinated between the central government, the Zhuhai government, the Guangdong government, Macau and Hong Kong, sure. But it needs very good coordination.

Ill-prepared The small and medium enterprises have several problems, as you pointed out. Are the current public and private funding schemes enough for their needs? The current funding schemes are good. The intentions are very good, but unfortunately the small and medium entrepreneurs are not prepared. They are not equipped to make best use of them, because they don’t even have proper accounting. They don’t have accounting to present to lending agencies. They lack knowledge and lack the business structure to apply for these loans. How about banking schemes such as the one from Bank of China, dubbed Bank of China SME Easy money. Is it a good scheme? We’ve been doing it for ages but it’s nothing substantial. Could banks have better funding schemes? We have been doing them for ages but many of the businessmen are not qualified for the loans. How can we give them a loan? If there are good projects, of course, the banks are eager to lend the money. If they don’t have good projects, if the business environment is difficult, the businessmen have no use for the money. You are preparing a white paper, together with University of Macau, that you will release

early October. Can you disclose some of the conclusions? We haven’t arrived at any conclusions yet, but, of course, the most important chapter is to give suggestions and proposals to the government on SME policies. What’s the method you’ve been using for research? We have been doing a lot of work, we have been writing a lot of papers but we have not yet arrived at the large chapter of recommendations.

The current funding schemes are good … but unfortunately the small and medium entrepreneurs are not prepared … because they don’t even have proper accounting

Why did you decide to do this project? I want to help the small and medium enterprises. Also, in every developed country, they have SME white papers, except Macau. So, I want to take the initiative to do it to show the people, to show the government, that there are competent people who can do a lot of things for Macau. Unfortunately they have not been noticed. In your opinion, should there be better management of human

resources? Of course, that’s the most important part, if we want to enhance our development.

Communication gap You claimed in previous interviews that a good area for the development of the SME would be luxury goods. Do you still believe that? Now, that is more or less over, because there will be less people coming in. We have a global recession, so the consuming powers coming here are less, such as people from the mainland, Europe and America. For the time being, the number of tourists is still high. Will that change soon? These numbers are now starting to come down. And these are still high but tourists’ spending power becomes smaller. It all comes down to our dependence on the mainland? Yes, we are too dependent on China. Around 85 percent of our inbound tourists are from China. How could the government change the current scenario for SMEs? What they need to do is research and find what the actual needs are, to talk more to people like us. But they don’t talk often to us. Is there a lack of communication between government and SME businessmen? I think the government talks more with the real estate developers, because these are the people who can bring big money to the government. What areas can be developed within the SME sector? If the government has a very good funding scheme, it can encourage

small and medium entrepreneurs to look into some innovative industries. For instance, they can encourage our businessmen to work together with the universities and to see whether some of their inventions can be applied to commercial use. If so, Macau businessmen can help transform them into business products and market them to mainland China and other parts of the world. This is one way. What role would small and medium enterprises play in promoting the diversification of the economy? They [businessmen] have lack of knowledge. If the government is not devoting time and money to help them, to be better educated, there is nothing they can do to improve their own living. One of the problems for the SME is the increase in rents. Should the government intervene to control this? Definitely, I am not in favour of these high property prices; this is not good for the harmony of the Macau society. Also, I think at the moment we have too many tourists and Macau should have smaller number of tourists but higher quality of tourists. Too many tourists are not good for Macau. That’s why the new Chief Executive of Hong Kong is talking to China to restrain the number of tourists coming to Hong Kong. Is it unsustainable to continue with such numbers? Sure. Our infrastructure cannot afford to support it. What if we improve infrastructure? It will take time. The economy in Macau has been expanding very rapidly in the past 12 years.

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business daily July 2, 2012

macau Photo by Manuel Cardoso

Brought to you by

Proxies for activity There are some types of resources or production inputs that often act as proxies for other economic variables. If they are relatively easy to monitor, they can prove very useful, especially when the variable we want to measure is difficult or time-consuming to compute. One can still make educated guesses or estimates by looking into variables that are strongly correlated.

Home sales heat up again

GDP, electricity and water consumption: Growth index 100 = 2008 Q1 200

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Residential housing sales have been on the rise since January and prices peaked in May Vítor Quintã

vitorquinta@macaubusinessdaily.com 100

GDP (million MOP) Electricity (million kWh)

The interesting element in this chart is that the expected and reasonable correlation between the consumption of either water or electricity, which are widely used by all economic agents in their activities and Gross Domestic Product. The consumption of both goods is subject to seasonality, which is extreme in the case of electricity. But no trend line we can use to smooth either of the plots provides an obvious graphical relationship with the evolution of GDP. Water consumption displays a very modest upward trend in the period and does not seem strongly correlated with GDP changes. Electricity consumption shows a more perceptible growth, but noticeably slower than the growth in production of goods and services. These features suggest that the specific nature of the Macau economy reduces the usefulness of those inputs as gauges of the overall economic activity. The figures point to an increase in the efficiency of energy usage. If we use a moving average to smooth and remove seasonality from the data plot, we see GDP rising noticeably faster than electricity consumption. That is, the ratio between the production of goods and services and the amount of electricity used is rising, indicating an increasing volume of goods and services per kilowatt. J.I.D.

acau’s residential market seems to be picking up steam again, as home sales rose for a fourth consecutive month to hit a one-year high in May, with average prices also showing signs of taking off. According to data released by the Financial Services Bureau on Friday, the total number of homes and flats sold last month reached 1,863, an increase of 16 percent

compared to April. The Macau peninsula was the most active part of the city, with 1,384 transactions, up by 21 percent. Sales in Taipa also rose 16.9 percent from the previous month to 388. On both sides the figures were the highest since June last year. Residential transactions in Coloane dropped for a third consecutive month to just 91 in May, which is likely due to a break in transactions of apartments at the luxury residential project One Oasis. Meanwhile residential space prices stayed mostly steady last month with the average transaction price of residential units reaching 53,083 patacas (US$6,635), up by just 0.8 percent compared to April. The May figure is the highest recorded this year and is up by 19.6 percent year-on-year. The average transaction price of

residential units has stayed above the 52,000-pataca mark for three consecutive months. Prices were highest in Coloane, at 71,216 patacas per square metre, even though they dropped 3.8 percent from April. Prices in the Macau peninsula prices rose by 2.2 percent to hit a oneyear high of 50,973 patacas and in Taipa they increased 3.3 percent to 54,359 patacas, the highest figure so far this year. In April, Midland Macau managing director Ronald Cheung told Business Daily that he expected the “positive trend” from what is usually a seasonal peak for the real estate market to flatten by May. The realtor believes residents are taking advantage of low interest rates, as the benchmark Macau Interbank Offered Rate at sixmonths remained below 0.6 percent throughout March.

Online applications for Macau Foundation Facing criticism, foundation vows to implement tighter supervision

he Macau Foundation met 200 representatives from around 100 associations on Friday to implement suggestions made by the Audit Commission. It pledged to introduce a series of measures to improve the supervision process of associations. The measures include sending teams to monitor an association’s project, requiring audit reports from grantees on their spending, taking actions when the association is not fulfilling its responsibilities, as well as asking for detailed and timely

information and updates. The foundation says it wants to set up an electronic system for grant application and follow-up management. It is designing a new grant application form and asked the associations for feedbacks. It is also consulting academic institutions to establish a benchmark to evaluate associations’ social impact. The representatives of associations in attendance said they would act accordingly to implement the measures and will improve selfmonitoring to better serve the society. In a recent report, the Audit

Commission criticised the Macau Foundation for breaching its own internal rules by failing to adequately monitor the associations it granted subsidies to. Between January 2010 and July last year the foundation led by Wu Zhiliang granted about 1.3 billion patacas (US$163 million) for 1,217 initiatives. But, even though many associations failed to present their activity report, the institution took no measures to ensure public money “is well spent,” the audit report showed. X.C.

Weather Beijing 33/22o C Changchun 26/18o C

Harbin 26/17o C

Xian 27/21o C Shanghai 33/26o C Chengdu 27/21o C Kunming 26/18o C Haikou 31/26o C Sanya 30/25o C

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MACAU (2 July-7 July) Day

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July 2, 2012 business daily | 7

MACAU

Political reform gets nod from Beijing Top legislators rubber stamp changes to the election of chief executive and Legislative Assembly Xi Chen

xi@macaubusinessdaily.com

n amendment to an annex of the city’s Basic Law that deals with political reform was approved at the bimonthly meeting of the Standing Committee of the National People’s Congress on Saturday. The approval was another step forward in the political reform process. The government will now submit bills to the legislature to revise the laws to elect the chief executive and the Legislative Assembly. The amendment says the election committee will be composed of 400 members from multiple industry sectors. The original statute set the number at 300. It also raises the minimum number of committee members eligible to nominate candidates for the office of chief executive from 50 to 66. The Standing Committee of the National People’s Conference also approved a report on a separate amendment to another annex of the Basic Law concerning the formation of the region’s Legislative Assembly. The amendment adds four seats to the Legislative Assembly, which currently has 29 members. This is the first time that the government has revised the way the chief executive and Legislative Assembly are elected. Top legislator Wu Bangguo said the amendments responded to appeals

from all social circles and will increase the opportunities for people to participate in politics. By implementing the “one country, two systems” policy and abiding to the Basic Law, Macau will maintain long-term stability, prosperity and development. Chief Executive Fernando Chui Sai On said the amendment represented an important step for Macau’s political reform and would be executed as soon as possible. The only Macau member of the Standing Committee, Ho Iat Seng, told TDM News “the schedule is tight” to introduce the reforms. “But since it’s only a ‘2+2’ proposal being applied to the Legislative Assembly election, nothing much is changed in principle,” he said. Macau will form its fifth Legislative Assembly next year and select its fourth chief executive in 2014. Mr Chui met President Hu Jintao in Hong Kong at the 15th anniversary celebration of Hong Kong’s handover. Mr Hu praised development of the territory and asked Macau’s government to prioritise its focus on improving people’s livelihood. Mr Chui said the government would continue to focus on economic development, improving people’s livelihood and use the city’s advantages.

More residents will be able to take part in political debate, says China’s top legislator Wu Bangguo

8 |

business daily July 2, 2012

macau

Jacobs demands ‘missing’ documents on Leonel Alves Includes investigation into Sands’ external legal advisor: court filing lawsuit from a former Taiwanese business partner of LVS in Macau. Mr Jacobs’ filing claimed the e-mail added the intermediary was asking for US$300 million for his efforts. LVS said in a regulatory filing last year it believes Mr Jacobs’ lawsuit prompted investigations into the company by the U.S. Securities and Exchange Commission and by the U.S. Department of Justice into possible violations of the Foreign Corrupt Practices Act. The company says it is cooperating with the federal investigations.

Steve Jacobs (left) wants LVS to give him ‘investigative report’ into Leonel Alves (right)

Associate Editor

awyers for sacked former Sands China chief executive Steve Jacobs have complained to a Nevada court that Sands’ parent company Las Vegas Sands Corp. is selectively employing Macau data protection laws – possibly to avoid supplying documents to the hearings. Mr Jacobs says in a memorandum on ‘jurisdictional discovery’ that the missing documents include an investigative report into Macau lawyer Leonel Alves – an external

advisor to Sands China – that Mr Jacobs says was “shared with the LVSC audit committee” in early 2010. He also requested “e-mails and communications with the Nevada Gaming Control Board relating to Alves”. Mr Jacobs’ legal counsel adds that information downloaded from Sands China’s employees’ and consultants’ computers as part of an internal company investigation has been transported to the United States without the plaintiff’s side being informed of the fact. The memo filed with the District Court in Clark County last Thursday U.S.

time, says LVS had previously cited Macau’s personal data protection law as a reason for not providing such data to the Nevada hearings.

Selective use “Sands China cannot selectively choose to employ the Macau Personal Data Protection Act to preclude the discovery of documents that it does not want to disclose or produce in this Nevada action. If this is not Sands China’s intent, there must be some explanation for the Macau to United States data transfer, and it cannot be concealed from Jacobs or this Court,” says the memo. It adds there’s “cause for alarm” that electronic evidence may either not have been properly preserved, or have been misplaced. The memo says: “Further, whatever relevant and/or discoverable data exists in Las Vegas and/or Macau must be preserved. While representations have been previously made, there seems to be categories of data of which even Defendant’s counsel is unaware. Jacobs must be given the same preservation assurances that LVSC, Sands China and this Court demanded of him. That is, Sands China and LVSC must be directed to image and preserve their possibly relevant/discoverable data and place it in the custody of this Court’s appointed ESI [electronically stored information] vendor, Advanced Discovery. Not only should Defendants be held to the same standard with regard to preservation, but Defendants’ lack of knowledge and/or awareness at any given time about the location of potentially relevant documents is cause for alarm.”

Big bill Industry sources told Business Daily that LVS has so far spent around US$50 million on its own investigations into allegations contained in Mr Jacobs’ lawsuit for wrongful termination first filed in 2010 following his dismissal in July that year. Those allegations included the suggestion LVS had asked him to conduct investigations into the business dealings of members of the Macau government; and that Mr Alves, a member of Macau’s Executive Council as well as a legal advisor to Sands China, had sent Mr Jacobs an e-mail with a proposal from someone in Beijing to help resolve the issue of the stalled sale of apartments in the Four Seasons Macao, and to settle a US$375 million

Missing documents Thursday’s filing to the Clark County court also asks LVS to provide a wide range of documents to Mr Jacobs’ lawyers relating to Leonel Alves’ role in the company. The memo says: “Other documents missing from Defendants’ production to date include multiple e-mail requests from [LVS chairman Sheldon] Adelson to Alves to arrange private meetings with high ranking Chinese Officials and/or to “hand deliver” personal correspondence to the same; an investigative report on Ng Lapseng; e-mails from Alves requesting $300M USD for obtaining StrataTitle to the Four Seasons Hotel and resolution of the Taiwanese law suit, e-mails from me to LVSC executives stating that I would not participate; e-mails relating to issues regarding overbilling by Alves’ firm; the investigative report conducted on Alves which was shared with the LVSC audit committee in early 2010 (referred to within LVSC as the “Alves Report”); e-mails concerning the wind down and termination of Alves’ services by me; e-mails and communications with the Nevada Gaming Control Board relating to Alves, the Alves Report, e-mails and communications between Alves, [Michael] Leven [president of LVS] and/or Adelson concerning his offer to take over the entire Sands China legal department at no cost provided existing employees were terminated; e-mails and communications between Adelson, Leven and/or Betty Yurich (on behalf of Adelson) regarding the services provided following the termination of Alves’ services Sands China [sic]; and communications and e-mails between LVSC and Sands China Board members regarding Alves’ rehire as outside counsel following my departure.” “Ng Lapseng” is a reference to Ng Lap Seng, a shareholder in the SJM satellite casino Hotel Fortuna and named in a 1998 U.S. Senate report for allegedly laundering money later donated as campaign funds to the Democratic National Committee during the Bill Clinton era. No comment was available from Mr Alves prior to press time. Ron Reese, vice president of communications for LVS in Las Vegas, said in a statement issued on the day of the memorandum filing: “We consistently strive to comply with all applicable law—here and in the other jurisdictions in which we operate.”

July 2, 2012 business daily | 9

MACAU

Exports see biggest InBrief pick up in four years

3G transition in Dec: regulator

The 2G mobile network will be shut down by the end of 2012, the Telecommunication Regulation Bureau director pledged on Friday, quoted by TDM News. Questioned about criticism from the Commission Against Corruption (CCAC), Lawrence Tou Veng Keong denied having broken any law: “CCAC has its opinion. We also have our own standing.” He said a report on Hutchison’s June 15 blackout would be ready in two months.

Exports continue to grow and trade improved but Macau’s deficit widened in May Vítor Quintã

vitorquinta@macaubusinessdaily.com

patacas in tobacco alone. With imports growing faster than exports – up by 23.5 percent yearon-year to 5.97 billion patacas – Macau’s trade deficit widened further to 5.29 billion patacas in May, up by almost one quarter. Imports of gold jewellery and watches, fuelling the city’s booming

MOP5.29 billion

TurboJet starts Taipa route Shun Tak-owned Turbojet started the new route between Taipa Ferry Terminal and Hong Kong on Thursday, with six sailings per day. The company, controlled by Pansy Ho Chiu King, also announced that all ferries run by New World First Ferry (Macau), which was acquired by Ms Ho’s company last year between Macau and Kowloon, would be operated by TurboJet. The Maritime Administration approved in April three new routes for the Taipa terminal to Shun Tak, Yuet Tung Shipping Co. and the Far East Hydrofoil Shipping Co.

New countries join 2012 MIF Nepal, Indonesia and Vietnam will for the first time join the 17th Macau International Trade and Investment Fair (MIF) on October 18-21, the Trade and Investment Promotion Institute announced. Authorities expect the number of booths to jump from over 1,400 to 1,600 this year. The exhibition area of the Portuguese-speaking countries will be further expanded, and several Brazilian trade promotion organisations will join the fair.

Qianhai open to telecom operators Telecommunications operators in Hong Kong and Macau are encouraged to start joint ventures in Qianhai, part of the Shenzhen economic zone, Zhang Xiaoqiang, the vice chairman of China’s national planner said on Friday, paving the way for operators such as Hutchison Whampoa to offer services on mainland China. The National Development and Reform Commission wants to make Qianhai a test ground for freer yuan usage and capital account convertibility.

Macau’s trade deficit in May

Sales of wine and tobacco grew to 108.6 million patacas in May, with exports largely destined for Hong Kong

xports grew year-on-year for the fourth consecutive month in May – the best result since early 2008 – thanks to soaring sales of machinery, tobacco and wine. The Statistics and Census Service reported that exports grew 15.9 percent year-on-year to 682.8 million patacas (US$85.5 million). Re-exports (up by 20.2 percent) have strengthened their lead over domestic exports (up by 7.5 percent). There was a 83.6-percent surge in exports of machinery to 106.3 million patacas, with most of it telecommunications equipment. Sales of tobacco and wine grew by

more than two-thirds compared to the same time last year to 108.6 million patacas. In both cases, the exports were largely destined for Hong Kong. The once-dominant textile and garment manufacturing sector continued its decline, with exports down by almost 30 percent to just 91.9 million patacas. Sales of watches dropped 11.5 percent yearon-year to 22.7 million patacas. Hong Kong strengthened its position as the city’s main market with 367.5 million patacas but the biggest growth came in exports to Panama, which jumped from about 100,000 patacas to 5.9 million

trade in luxury retailing, rose by 43 percent to 1.5 billion patacas. Purchases of motor cars and motorcycles more than doubled to 359.5 million patacas. After two months of slowdown, the territory’s bilateral trade picked up speed again in May, growing by 21.2 percent to 6.65 billion patacas. But this figure is still smaller than the 25 percent growth registered in March. The mainland is the city’s main supplier, with imports of 1.98 billion patacas, up by 18.9 percent, but the European Union made up some ground with a 25 percent growth to 1.3 billion patacas.

Better financial links inked between city, Shanghai Agreement sees tighter cooperation to improve the financial services offering of both cities Xi Chen

xi@macaubusinessdaily.com

he Monetary Authority of Macau has signed a cooperation agreement with the Financial Services Office of the Shanghai Municipal Government to strengthen financial cooperation between the two cities. The two cities will set up liaison groups, meet regularly, and share financial information, Shanghai’s vice-mayor Tu Guangshao said at the signing ceremony. Mr Tu was pleased that topics he had discussed with the Macau government during a visit earlier this year had been included in the memorandum. The new agreement will inject vitality into Shanghai’s ambition to become an international financial centre. “To strengthen financial cooperation between the two cities has great significance. After the global

financial crisis, the global financial structure is experiencing profound adjustments and more intensive competition,” he said. Secretary for Economy and Finance Francis Tam Pak Yuen said Macau would offer economic and commercial liaison between Shanghai businesses and the Portuguese-speaking countries. The city would make use of Shanghai’s successful experience to enhance its finance industry. “Shanghai is among the most financially advanced cities in China. This agreement allows Macau to participate in the process of Shanghai becoming a global financial centre,” Mr Tam said. The government would support the collective financial endeavours of the cities and promote financial and commercial cooperation with a view

Shanghai’s experience as a financial centre should be an example for Macau to follow, Francis Tam said

to achieve common goals, he said. The memorandum was signed at the Lujiazui Forum in Shanghai on Friday. Beijing has pledged to increase the use of the yuan as an international currency and to encourage foreign investment in Shanghai, as it builds the city into a global financial centre. In November, a delegation from the Monetary Authority of Macau met with leaders from the People’s Bank of China to discuss Macau’s potential as a yuan settlement platform for trade with the Portuguese-speaking countries.

10 |

business daily July 2, 2012

GREATER CHINA SMEs get boost to list on HKEx China will relax conditions for mainland firms, especially small and medium-sized enterprises, to list in Hong Kong, the country’s securities regulator said on Saturday, in a move that could encourage privately owned Chinese companies to tap funds in the city. The regulator also said it would encourage qualified Hong Kong financial institutions to form joint ventures with mainland partners in stock and futures brokerages, fund management firms and stock investment consulting firms, capping a week of news on co-operation between the mainland and Hong Kong. “Currently, the conditions on domestic firms to issue H-shares in terms of companies’ size is still high and many medium- and small-sized companies cannot meet such requirements,” China’s Securities and Regulatory Commission (CSRC) said. “To support more domestic firms to list shares in Hong Kong, the CSRC will revise the relevant rules to relax the conditions on finance and size of companies under the premise of strengthening corporate governance and information disclosure.” The China securities regulator also said Beijing would increase quotas on the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme, which allows foreign investors to buy into Chinese mutual funds using offshore yuan. “We will draw experiences from the pilot scheme and further increase the quota on RQFII and expand the scope of institutions involved in the pilot scheme, enrich products and relax restrictions on investment ratios,” the regulator said. In April, China raised the RQFII quota to 70 billion yuan (US$10.99 billion) from 20 billion yuan. Reuters

HK’s new chief vows to help low-income groups CY Leung sworn in as the city marks 15 years since handover

Hong Kong’s new leader Leung Chun Ying (left) was yesterday sworn in by Chinese President Hu Jintao

eung Chun Ying, the former property surveyor who was a surprise choice to be Hong Kong’s new leader, vowed to boost public housing and build a “more equitable society” as he was sworn in yesterday. Mr Leung, 57, took office in a ceremony attended by Chinese President Hu Jintao, who said Hong Kong should expand cooperation with China and develop a harmonious society. The leaders were also celebrating the 15th anniversary of the former British colony’s return to Beijing’s control.

25 and 26 said perception of Mr Leung’s integrity was negatively impacted by the findings. “C.Y. does have the ears of central government, but even central government is going to find it difficult to support a chief executive whose credibility in the eyes of the Hong Kong community is tarnished even before he takes office,” said Anson Chan, former chief secretary under Tung Chee Hwa.

Conflicts remain During his speech, Mr Leung said he will seek to develop

Qianhai to test freer yuan China will make Qianhai, part of the Shenzhen economic zone, a test ground for freer yuan usage and capital account convertibility, the National Development and Reform Commission said on Saturday. Companies in Qianhai will be encouraged to sell yuan-denominated bonds in Hong Kong and to experiment with cross-border loans in the Chinese currency, Zhang Xiaoqiang, the vice chairman of the national planner, said at a press conference. Qianhai is a 15-square kilometre special zone on the west side of Shenzhen, that officials are seeking to develop into a financial service hub. The world’s second-biggest economy widened the yuan trading band for the first time since 2007 in April, a move that may mark an early stage of a capital account opening. “It lacks many details and seems to be a smallscale move, but highlights the determination of Chinese policy makers to open the capital account,” Dariusz Kowalczyk, a Hong Kongbased strategist at Credit Agricole CIB, wrote in a note. “We expect convertibility within five to 10 years, but the new zone means it may happen sooner rather than later.” Chinese officials told European Union business executives that the yuan will achieve “full convertibility” by 2015, EU Chamber of Commerce in China President Davide Cucino said last September. There are 21 companies registered and 170 projects ready to start in the special zone, Xu Qin, mayor of Shenzhen, said on Saturday. The government aims for 150 billion yuan (US$23.6 billion) worth of gross domestic product by 2020 in Qianhai, NDRC said. Bloomberg

The challenges facing the new Hong Kong’s economy, chief executive include tackling promote democracy and build Asia’s biggest wealth gap, now a “more equitable society”. the worst in Hong Kong since Hours after the ceremony, records started being kept in protesters began to gather in 1971, and demands for direct central Hong Kong for a march leadership elections by 2017. held on the handover anniversary “Housing tops the list of each year. As Mr Hu delivered livelihood issues that are of his speech at the ceremony, a public concern,” Mr Leung said heckler shouted that China must in Mandarin, adding that he’d end one party rule. Security seek to meet the expectations guards removed the man from of both the central government the event and the president and the people. “We need to didn’t acknowledge him. we recognise provide more public housing “While Kong’s tremendous and assist low-income groups Hong achievement to secure flats.” in the 15 With his term years since only beginning, We need to the handover, Mr Leung still exists already faces a provide more public there much deepchallenge to his housing and assist rooted conflict authority. The issues in Democratic Party low-income groups and the society,” Mr says he misled Hu said in his the public about to secure flats speech. “Hong illegal structures built at his home, Kong needs to take part in the and is seeking Leung Chun Ying, to overturn his Hong Kong’s chief executive rapid economic development of election in March. the motherland, About 70 percent of 529 people surveyed by the to deepen and widen mutual University of Hong Kong on June cooperation and interaction.”

Donald Tsang, 67, leaves office after serving as chief executive for seven years. While gross domestic product grew 28 percent since then, he wasn’t able to prevent the wealth gap from widening even with the introduction of a minimum wage last May.

Promises made While Mr Leung was elected by a 1,193-member panel comprised of billionaires, lawmakers and professionals, he campaigned on a promise to deliver change for regular people. “During my term, I will implement policies that meet the expectation of me of both the central government and the people of Hong Kong,” he said in his speech yesterday. “I will do my best to fulfil my promises.” Macau’s Chief Executive Fernando Chui Sai On attended the inauguration ceremony yesterday. On Saturday, Mr Chui met Chinese President Hu Jintao. Mr Hu expressed the recognition of the current situation of Macau as well as the work of the government here, Xinhua new agency reported. As in Hong Kong, Mr Hu also urged the Macau government to attach great importance to the work related to local residents’ livelihood.

Income inequality Hong Kong’s Gini coefficient, which measures income inequality, has gained from 0.43 in 1971 to 0.537 in 2011, according to government statistics. A reading of zero means income equality and one complete inequality. The average gross household income of the poorest 10 percent of Hong Kong’s population fell to HK$2,170 (US$280) in 2011 from HK$2,590 in 2001, according to a June 18 report from the Census and Statistics Department. The comparable income for the richest 10 percent advanced to HK$137,480 a month from HK$122,740. Bloomberg

July 2, 2012 business daily | 11

asia

Australia enacts carbon-tax law Highly controversial law kicks off after years of bitter political wrangling

ustralia yesterday joined a growing number of nations to impose a price on carbon emissions across its US$1.4 trillion economy in a bitterly contested reform that offers trading opportunities for banks and polluters but may cost the prime minister her job. Australia’s biggest polluters, from coal-fired power stations to smelters, will initially pay A$23 (US$23.55) per tonne of carbon dioxide emitted, more than twice the cost of carbon pollution in the European Union, currently trading around 8.15 euros (US$10) a tonne. The economic pain will be dulled by billions of dollars in sweeteners for businesses and voters to minimise the impact on costs, with the consumer price index forecast to rise by an extra 0.7 percentage point in the 2012-13 fiscal year. Australia expects to raise A$24.7 billion over four years from the carbon levy, the government said in budget documents. Electricity prices will climb by as much as 10 percent, or an average of A$3.30 a week per household, according to Climate Minister Greg Combet, who cited Treasury modelling. The government will provide A$9.2 billion over three years in the form of free permits to help businesses such as aluminum smelters, steelmakers and pulp manufacturers. Power generators will get A$5.5 billion, while consumers will receive A$14.9 billion through tax changes and benefits. The scheme allows emissions trading from 2015, when polluters and investors will be able to buy overseas carbon offsets, or ultimately trade with schemes in Europe, New Zealand and possibly those planned in South Korea and China. Prime Minister Julia Gillard’s minority government says the plan

KEY POINTS Australia joins the EU and New Zealand in pricing carbon emissions Banks, polluters to remain sidelined due to uncertainty A$23/tonne starting price, carbon trading begins 2015

Australia’s biggest polluters will initially pay more than twice the cost of carbon pollution in the European Union

is needed to fight climate change and curb greenhouse gas pollution. Australia has amongst the world’s highest per capita CO2 emissions due to its reliance on coal-fired power stations.

Repeal woes Yet even as it starts, the scheme’s future is in doubt. The conservative opposition has vowed to repeal it if they win power in elections due by late next year and have whipped up a scare campaign saying the tax will cost jobs and hurt the economy. Ms Gillard, her poll ratings near record lows and her Labor party heading for a heavy election defeat, hopes that the campaign will quickly run out of steam once the scheme starts. “Cats will still purr, dogs will

still bark,” Ms Gillard said after opposition leader Tony Abbott’s visit to an animal shelter to warn of higher electricity prices on charities. “The leader of the opposition’s fear campaign will collide with the truth.” But voters remain angry that Gillard broke a 2010 election promise not to introduce a carbon tax and many observers think government hopes of a resurgence after July 1 are unlikely. “The damage is already done,” political analyst Nick Economou at Monash University said. “What will be interesting is whether Labor takes the lemming option and follows her over the cliff, or whether it decides that she is the cause of their problems and has to go.” A poll by the Lowy Institute thinktank found 63 percent of voters oppose the carbon scheme. Many big polluters, such as miners,

South Korea exports rebound

also remain vehemently opposed and uncertainty over its future is crimping investment in the power sector. Mining companies including BHP Billiton Ltd, Rio Tinto Ltd and Fortescue Metals Group Ltd face a separate levy on 30 percent of earnings from iron ore and coal. The Australian carbon scheme is the product of years of fierce bargaining with business and political parties. For now, repeal remains a real possibility because of the way it has polarised the country, Australian National University climate policy analyst Frank Jotzo wrote in a recent commentary. “Australia’s carbon pricing mechanism might enter history as one of the best-designed yet shortest-lived policies for climate change mitigation.” Reuters/Bloomberg

But Seoul cuts trade outlook for the year

from China around their leadership change later this year,” said Park Sang-hyun, chief economist at HI Investment & Securities.

Se Young Lee and Choonsik Yoo

Slight improvement

KEY POINTS June exports up 1.3 pct year-on-year Growth forecast cut to 3.5 pct from 6.7 pct Trade surplus seen at US$23.5 billion in 2012

Exports in the July-December period seen growing 6.2 percent over a year earlier

outh Korea yesterday predicted a gradual recovery in exports in the second half of 2012 as June data showed demand for products from the country growing globally, but revised down its overall trade outlook for the year. Exports by Asia’s fourth-largest economy are now seen growing only 3.5 percent this year and im-

ports by 5.0 percent, the Ministry of Knowledge Economy said in a statement, down from 6.7 percent and 8.7 percent forecast in January, respectively. But in June, overseas shipments rose 1.3 percent from a year ago, beating a median 0.5 percent gain forecast in a Reuters survey and marking the first growth in four months of year-

on-year comparisons, the ministry’s data showed. An analyst said June export data showed world trade was passing through a trough after taking a hit from fears the eurozone’s fiscal crisis and that efforts by China and the other big economies to draw up measures to boost spending boded well. “It’s good to see the global trade is not deteriorating any further and we may see some improvement or at least efforts to make things better

The South Korean economy ministry’s latest forecasts mean exports in the July-December period would grow 6.2 percent over a year earlier, compared with a 0.7 percent gain scored during the first six months. The latest export and import projections would now bring this year’s trade surplus at US$23.5 billion, down slightly from US$25 billion seen before and smaller than an actual US$31 billion surplus set in 2011. The revisions reflect a sharp decline in demand from such key markets as Europe and China earlier in the 2012 first half and have fuelled expectations that South Korea’s central bank may lower interest rates to partner with fiscal stimulus to avoid a repeat in the second half of the year. On Thursday, the South Korea’s finance ministry cut its 2012 economic growth forecast to 3.3 percent from 3.7 percent previously due largely to the weak external demand and pledged to spend more than US$7 billion to boost the economy. Reuters

12 |

business daily July 2, 2012

MARKETS Hang SENG INDEX PRICE

Day %

VOLUME

PRICE

Day %

VOLUME

26.5

3.7182

33673111

CHINA UNICOM HON

9.76

2.736842

32361648

3.3

2.484472

16000283

CITIC PACIFIC

11.7

1.73913

BANK OF CHINA-H

2.94

2.439024

357954491

BANK OF COMMUN-H

5.19

3.8

28882944

BANK EAST ASIA

27.7

3.551402

4882449

13.12

1.391036

23.6

NAME AIA GROUP LTD ALUMINUM CORP-H

NAME

PRICE

Day %

POWER ASSETS HOL

58.1

1.043478

3710105

4192516

SANDS CHINA LTD

24.5

5.603448

21502739

SINO LAND CO

11.62

3.014184

7615879

SUN HUNG KAI PRO

91.15

1.165372

6158036

SWIRE PACIFIC-A

89.7

0.8998875

2031168

TENCENT HOLDINGS

226

3.10219

4645322

19.82

1.954733

8865354

9.5

4.625551

15182122

42.55

2.6538

5446874

65.75

1.231717

3953668

CNOOC LTD

15.4

3.355705

83694590

COSCO PAC LTD

10.5

5.315948

8549205

20641880

ESPRIT HLDGS

9.89

-1.001001

11856229

1.505376

17142034

HANG LUNG PROPER

26.2

1.550388

7913759

TINGYI HLDG CO

12.46

2.635914

4367833

HANG SENG BK

106

0.56926

1918770

WANT WANT CHINA

CHEUNG KONG

94.6

2.159827

4937781

HENDERSON LAND D

42.65

2.647413

4490849

WHARF HLDG

CHINA COAL ENE-H

6.34

4.10509

54056690

HENGAN INTL

74.95

1.010782

2100660

HONG KG CHINA GS

16.42

1.108374

18331854

110

2.899906

5818647

68.55

0.5869406

30881138

BELLE INTERNATIO BOC HONG KONG HO CATHAY PAC AIR

CHINA CONST BA-H

CLP HLDGS LTD

NAME

MOVERS

5.29

2.718447

423590756

CHINA LIFE INS-H

19.96

3.312629

47875748

CHINA MERCHANT

23.45

4.222222

4330598

CHINA MOBILE

84.75

1.924233

25162190

HUTCHISON WHAMPO

66.5

2.307692

7954594

CHINA OVERSEAS

17.98

2.508552

33468472

IND & COMM BK-H

4.29

2.631579

402897142

CHINA PETROLEU-H

6.88

2.228826

87836890

LI & FUNG LTD

14.82

2.489627

18516911

HIGH

19500.13

CHINA RES ENTERP

22.95

2.914798

4848071

MTR CORP

26.45

1.147228

2652289

LOW

18970.91

CHINA RES LAND

15.8

0.7653061

9430294

NEW WORLD DEV

9.01

1.693002

14564627

CHINA RES POWER

15.9

2.316602

11935395

52W (H) 22835.03

PETROCHINA CO-H

9.95

2.366255

80156827

CHINA SHENHUA-H

27.05

3.244275

19805874

PING AN INSURA-H

61.7

3.350084

10933575

(L) 16170.35

HONG KONG EXCHNG HSBC HLDGS PLC

VOLUME

0 19519

INDEX 19441.46

18970

27 -Jun

28-Jun

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.09

3.691275

144261895

AIR CHINA LTD-H

4.54

1.339286

7686429

ALUMINUM CORP-H

NAME

PRICE

DAY %

VOLUME

CHINA PACIFIC-H

24.9

3.966597

9861984

CHINA PETROLEU-H

6.88

2.228826

87836890

3.3

2.484472

16000283

CHINA RAIL CN-H

6.41

2.889246

7253282

ANHUI CONCH-H

20.95

1.699029

9526399

CHINA RAIL GR-H

3.22

2.875399

20227330

BANK OF CHINA-H

2.94

2.439024

357954491

CHINA SHENHUA-H

27.05

3.244275

19805874

5.19

3.8

28882944

CHINA TELECOM-H

3.37

1.812689

62623234

14.62

0.4120879

1976660

DONGFENG MOTOR-H

11.9

-0.1677852

18886496

CHINA CITIC BK-H

3.95

3.403141

35884748

GUANGZHOU AUTO-H

6.44

-0.9230769

6536904

CHINA COAL ENE-H

6.34

4.10509

54056690

HUANENG POWER-H

5.82

2.464789

29074334

CHINA COM CONS-H

6.77

1.651652

16813078

IND & COMM BK-H

4.29

2.631579

402897142

CHINA CONST BA-H

5.29

2.718447

423590756

JIANGXI COPPER-H

16.94

2.171291

10191689

BANK OF COMMUN-H BYD CO LTD-H

3.42

1.785714

29367272

PETROCHINA CO-H

9.95

2.366255

80156827

19.96

3.312629

47875748

PICC PROPERTY &

8.67

1.048951

21972637

CHINA LONGYUAN-H

5.05

1.405622

10107704

PING AN INSURA-H

61.7

3.350084

10933575

CHINA MERCH BK-H

14.46

2.263083

19908541

SHANDONG WEIG-H

8.54

0.9456265

6350767

CHINA COSCO HO-H CHINA LIFE INS-H

CHINA MINSHENG-H

6.87

1.627219

27414982

SINOPHARM-H

21.3

5.970149

9693490

CHINA NATL BDG-H

8.29

0.241838

52654657

TSINGTAO BREW-H

44.05

-1.343785

9591846

11.08

2.973978

4764320

WEICHAI POWER-H

30.55

1.495017

2466040

CHINA OILFIELD-H

NAME YANZHOU COAL-H

PRICE

DAY %

11.98

1.697793

24927713

2.6

2.766798

26627567

9.79

0.6166495

20116227

14.94

1.356852

4121309

ZIJIN MINING-H ZOOMLION HEAVY-H ZTE CORP-H

MOVERS

VOLUME

0 9600

INDEX 9574.84 HIGH

9590.2

LOW

9314.44

52W (H) 12902.97 (L) 8058.58

9310

27-Jun

28-Jun

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.59

1.568627

66279119

DONGFANG ELECT-A

17.92

1.644923

13815416

SAIC MOTOR-A

14.29

1.347518

13142216

AIR CHINA LTD-A

6.15

2.5

24298664

EVERBRIG SEC -A

13.17

5.613472

13669671

SANY HEAVY INDUS

13.92

1.680058

13514985

ALUMINUM CORP-A

6.17

10227101

GD MIDEA HOLDING

11.05

0.4545455

21206553

SHANDONG GOLD-MI

32.84

0.1219512

8687658

ANHUI CONCH-A

14.82

1.506849

20987100

GD POWER DEVEL-A

2.7

29103361

SHANG PUDONG-A

8.13

1.498127

50974236

BANK OF BEIJIN-A

9.77

1.243523

18732401

GEMDALE CORP-A

6.48

-0.9174312

50826635

SHANGHAI ELECT-A

BANK OF CHINA-A

2.82

0.3558719

15697581

GF SECURITIES-A

29.83

3.937282

7268324

BANK OF COMMUN-A

4.54

0.8888889

49933048

GREE ELECTRIC

20.85

0.2886003

BAOSHAN IRON & S

4.32

0.2320186

14377390

GUANGHUI ENERG-A

13.47

19.86

-2.647059

3447807

GUIZHOU PANJIA-A

NAME

BYD CO LTD -A

NAME

4.56

-1.084599

23268866

SHANXI LU'AN -A

20.74

1.418093

8810678

17985446

SHANXI XINGHUA-A

37.69

4.058531

5621130

1.73716

20439640

SHANXI XISHAN-A

15.6

1.298701

9764728

26.88

3.146585

5649483

SHENZ DVLP BK-A

15.16

2.919212

18455457

1.522843

15165100

HAITONG SECURI-A

9.63

2.774813

46937313

SHENZEN OVERSE-A

6.38

1.754386

24186271

CHINA CNR CORP-A

4.01

0.5012531

22421056

HANGZHOU HIKVI-A

27.2

1.002599

3978606

SUNING APPLIAN-A

8.39

1.328502

23524140

CHINA COAL ENE-A

7.74

0.5194805

10012544

HEBEI IRON-A

2.73

-0.3649635

34663017

TSINGTAO BREW-A

38.19

3.355886

6230721

CHINA CONST BA-A

4.2

0.7194245

19564039

HENAN SHUAN-A

61.88

-1.590331

1306522

WEICHAI POWER-A

29.69

3392134

CHINA CITIC BK-A

CHINA COSCO HO-A

4.64

0.8695652

5221197

HONG YUAN SEC-A

16.54

4.949239

11993226

WULIANGYE YIBIN

32.76

2.407002

17769306

CHINA CSSC HOL-A

22.97

1.234024

6230607

HUATAI SECURIT-A

10.5

4.063429

24478636

XCMG CONSTRUCT-A

14.34

2.282454

9268331

CHINA EAST AIR-A

4.18

0.4807692

14807910

HUAXIA BANK CO

9.47

2.489177

30479213

XIAMEN TUNGSTEN

43.91

4.697186

7559241

CHINA EVERBRIG-A

2.84

1.067616

26699477

IND & COMM BK-A

3.95

0.7653061

34003940

YANGQUAN COAL -A

15.3

1.864181

16422441

CHINA LIFE INS-A

18.3

3.859251

16029352

INDUSTRIAL BAN-A

12.98

2.608696

39400406

YANTAI CHANGYU-A

67.26

-1.795883

1674903

0.9242144

38125964

INNER MONG BAO-A

39.46

3.97892

60523763

YANZHOU COAL-A

18.98

-1.556017

6652927

CHINA MERCH BK-A

10.92

CHINA MERCHANT-A

11.61

2.561837

21886632

INNER MONG YIL-A

20.58

-0.3389831

26703058

YUNNAN BAIYAO-A

59.28

1.785714

2993860

CHINA MERCHANT-A

24.53

0.5327869

7280716

INNER MONGOLIA-A

4.88

1.666667

61194190

ZHONGJIN GOLD

21.52

1.032864

10325054

CHINA MINSHENG-A

5.99

2.044293

101744092

JIANGSU HENGRU-A

28.71

0.03484321

3082410

ZIJIN MINING-A

3.88

1.305483

28728615

13216988

JIANGSU YANGHE-A

134.55

0.6282253

1735961

ZOOMLION HEAVY-A

10.03

20848770

ZTE CORP-A

13.96

-2.785515

35413460

CHINA OILFIELD-A

16.51

CHINA PACIFIC-A

3.70603

22.18

4.425612

21665440

JIANGXI COPPER-A

23.91

2.574003

7116334

CHINA PETROLEU-A

6.3

0.1589825

22508170

JINDUICHENG -A

12.67

1.685393

3893249

CHINA RAILWAY-A

4.45

0.4514673

11831876

JIZHONG ENERGY-A

15.27

1.8

11924939

CHINA RAILWAY-A

2.57

2.390438

26380497

KANGMEI PHARMA-A

15.42

0.4560261

19957107

239.15

1.274668

2322419

42.31

2.818955

8855634

CHINA SHENHUA-A

22.48

1.950113

11188512

KWEICHOW MOUTA-A

CHINA SHIPBUIL-A

5.19

-0.1923077

14865800

LUZHOU LAOJIAO-A

CHINA SOUTHERN-A

4.61

2.217295

20277609

METALLURGICAL-A

2.48

0.4048583

19218980

18.69

1.027027

13303247

CHINA STATE -A

3.34

0.6024096

36346596

NARI TECHNOLOG-A

CHINA UNITED-A

3.72

0.8130081

45766407

NINGBO PORT CO-A

2.53

2.016129

20554494

6.58

4.113924

MOVERS

244

3 2470

INDEX 2461.612

CHINA VANKE CO-A

8.91

0.6779661

28620509

PANGANG GROUP -A

36115237

HIGH

2466.89

CHINA YANGTZE-A

6.8

14223677

PETROCHINA CO-A

9.05

0.77951

12612790

LOW

2418.86

CITIC SECURITI-A

12.63

4.726368

75498851

PING AN INSURA-A

45.74

2.441209

33290737

CSR CORP LTD -A

4.56

-1.084599

34413583

POLY REAL ESTA-A

11.34

0.3539823

32661283

DAQIN RAILWAY -A

7.03

-0.1420455

48031300

QINGDAO HAIER-A

11.72

1.8245

9258251

DATANG INTL PO-A

5.63

-0.7054674

5815619

QINGHAI SALT-A

33.77

-1.112738

8176892

PRICE DAY %

Volume

52W (H) 3140.102 (L) 2254.567

2410

27 -Jun

28-Jun

FTSE TAIWAN 50 INDEX NAME ACER INC ADVANCED SEMICON

PRICE DAY %

Volume

NAME

30.8

1.650165

11176617

FORMOSA PLASTIC

24.45

1.452282

35981928

FOXCONN TECHNOLO

NAME

PRICE DAY %

Volume

79.8

2.967742

8227486

TAIWAN MOBILE CO

98.5

2.390852

7497038

107.5

3.864734

7103247

TPK HOLDING CO L

374

2.60631

6740247

ASIA CEMENT CORP

37.45

1.35318

4422215

FUBON FINANCIAL

29.8

2.581756

14200086

TSMC

81.3

1.75219

47939122

ASUSTEK COMPUTER

271.5

0.5555556

6505488

HON HAI PRECISIO

89.4

1.706485

34187647

UNI-PRESIDENT

47.6

4.615385

10188574

AU OPTRONICS COR

12.05

2.118644

31122648

CATCHER TECH

198.5

2.319588

7349296

193

3.208556

842535

HTC CORP

HOTAI MOTOR CO

389.5

3.866667

8675478

UNITED MICROELEC

12.9

6.61157

70137894

WISTRON CORP

36.5

1.388889

13105055

CATHAY FINANCIAL

29.25

2.094241

18275746

HUA NAN FINANCIA

16.45

2.492212

9487353

YUANTA FINANCIAL

13.55

2.651515

19925261

CHANG HWA BANK

15.7

2.95082

10764560

LARGAN PRECISION

618

2.14876

1361451

YULON MOTOR CO

52.4

1.158301

2983611

CHENG SHIN RUBBE

2.880658

6495601

LITE-ON TECHNOLO

37.3

4.04463

3821213

CHIMEI INNOLUX C

12.3

18589330

MEDIATEK INC

273

0.3676471

6547172

CHINA DEVELOPMEN

7.04

1.881331

33228631

MEGA FINANCIAL H

21.85

1.627907

24173089

1.449275

15454367

NAN YA PLASTICS

53.4

1.714286

8352097

PRESIDENT CHAIN

158.5

1.602564

1802378

79.4

0.5063291

7427682

CHINA STEEL CORP CHINATRUST FINAN

2.409639

24987558

CHUNGHWA TELECOM

1.293103

9815629

COMPAL ELECTRON

QUANTA COMPUTER

27.35

0.3669725

11327302

SILICONWARE PREC

31.2

2.295082

7271951

DELTA ELECT INC

90.9

2.134831

11415942

SINOPAC FINANCIA

11.2

3.225806

24523273

FAR EASTERN NEW

31.5

1.612903

8259965

SYNNEX TECH INTL

72.6

0.6934813

3591584

FAR EASTONE TELE

64.7

0.1547988

6117952

TAIWAN CEMENT

35.35

0.4261364

7372756

17.35

2.359882

12891646

TAIWAN COOPERATI

17.6

2.923977

6978411

FORMOSA CHEM & F

FIRST FINANCIAL

78.4

2.216428

5679861

TAIWAN FERTILIZE

68.3

1.335312

1737840

FORMOSA PETROCHE

80.9

2.405063

2457991

TAIWAN GLASS IND

25.05

2.244898

2823891

MOVERS

1 5030

INDEX 5021.19 HIGH

5021.19

LOW

4902.05

52W (H)6026.51 (L) 4643.05

4900

27-Jun

29-Jun

July 2, 2012 business daily | 13

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

MElco croWN ENtErtAINMENt

MGM cHINA HolDINGS 29.4

19.4

11.9

19.2

11.8 29.2

19.0

11.7

18.8

Max 19.38

Average 19.064

Min 18.66

last 19.16

18.6

SANDS cHINA ltD

Max 29.3

Average 29.225

Min 29.1

Min 23.55

last 24.5

25.1 24.9 24.7 24.5 24.3 24.1 23.9 23.7 23.5

Min 11.56

last 11.72

14.4

18.3

14.2

18.1

14.1

17.9

14.0

17.7

13.9 13.8 Max 14.38

Average 14.190

PRICE

WTI CRUDE FUTURE Aug12

84.96

9.35771777

-14.31164902

111.3799973

77.27999878

BRENT CRUDE FUTR Aug12

97.8

7.049036778

-7.13132656

124.6999969

88.48999786

GASOLINE RBOB FUT Aug12

263.18

6.236628588

-2.05433569

326.7099857

243.0099964

GAS OIL FUT (ICE) Aug12

843.25

3.276178812

-6.201334816

1046.5

801

2.824

3.747244673

-13.7973138

4.921000004

2.174999952

HEATING OIL FUTR Aug12

DAY %

YTD %

(H) 52W

Min 13.88

17.5

last 14.28

Max 18.38

Average 18.029

270.99

6.387405779

-4.705137673

332.949996

250.8399963

1597.45

1.8977

2.0794

1921.18

1486.3

Silver Spot $/Oz

27.4963

2.5025

-1.2168

44.2175

26.085

Platinum Spot $/Oz

1447.8

3.2115

3.8222

1915.75

1339.25

Palladium Spot $/Oz

582.19

1.0133

-10.912

848.37

537.54 1832.25

LME ALUMINUM 3MO ($)

1911

3.577235772

-5.396039604

2675.25

LME COPPER 3MO ($)

7685

4.062288422

1.118421053

9905

6635

LME ZINC

1877

4.626532887

1.734417344

2539.5

1718.5

16730

3.176071539

-10.58257616

25195

15980

14.49

-2.78430057

-3.592814371

13.95499992

634.75

0.395413207

8.272921109

673.5

499

WHEAT FUTURE(CBT) Sep12

757.25

1.508042895

7.90879943

853.5

606.75

SOYBEAN FUTURE Nov12

1427.75

1.727823299

18.55926925

1439.75

1115.75

170.7

4.691812328

-27.12913554

288.8500061

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Sep12 Dec12

COFFEE 'C' FUTURE Sep12

PRICE

(L) 52W

Gold Spot $/Oz

last 18.06

Min 17.56

MAJORS

ASIA PACIFIC

CROSSES

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

DAY %

1.0238 1.5707 0.9486 1.2667 79.8 7.9907 7.7574 6.354 55.6375 31.56 1.2651 29.873 42.145 9433 81.698 1.20118 0.80642 7.9844 10.0489 101.04 1.0299

YTD %

1.7795 1.0551 1.887 1.9313 -0.5138 0.0063 0.0142 0.0535 2.1029 1.0139 1.0829 0.164 0.5718 0.6467 -2.2534 -0.0133 -0.8581 -1.0821 -1.1792 -2.3555 0.0097

(H) 52W

0.2841 1.0551 -1.1069 -2.2683 -3.6216 0.1114 0.1289 -0.9285 -4.6237 -0.0317 2.4899 1.3591 4.0218 -3.8588 -3.9976 1.2996 3.3444 1.8762 3.0163 -1.3658 0.0194

(L) 52W

1.1081 1.6618 0.9772 1.4578 84.18 8.0449 7.8113 6.4747 57.3275 31.96 1.3199 30.716 44.35 9662 88.637 1.24736 0.90677 9.4168 11.6817 117.74 1.0311

0.9388 1.5235 0.7071 1.2288 75.35 7.9823 7.7529 6.2769 43.855 29.63 1.1992 28.661 41.879 8458 72.057 1.00749 0.79505 7.8544 9.8423 95.6 1.0288

MACAU RELATED STOCKS (H) 52W

(L) 52W

ARISTOCRAT LEISU

NAME

PRICE 2.76

DAY % YTD % 0.3636364

25.45454

3.25

1.88

VOLUME CRNCY 1428138

150.0999908

CROWN LTD

8.49

0.1179245

4.944374

9.29

7.45

2944253

SUGAR #11 (WORLD) Oct12

21.01

2.33804189

-7.97196671

26.03999901

19.23999977

AMAX HOLDINGS LT

0.076

1.333333

-12.64368

0.119

0.06

4819500

COTTON NO.2 FUTR Dec12

71.33

2.618328298

-18.79553734

102.25

64.61000061

BOC HONG KONG HO

23.6

1.505376

28.26087

24.45

14.24

17142034

0.238

3.478259

0.4

0.204

4000

3.03

8.214288

4.3

2.3

43000 33468472

CENTURY LEGEND CHEUK NANG HLDGS

World Stock MarketS - Indices NAME

CHINA OVERSEAS

17.98

2.508552

38.52081

18.48

9.99

CHINESE ESTATES

8.96

-0.2227171

-28.32

13.68

8.3

228500

CHOW TAI FOOK JE

9.6

0.3134796

-31.03448

15.16

8.55

7222500

EMPEROR ENTERTAI

1.37

0.7352941

23.42342

2.04

0.97

710000

FUTURE BRIGHT

0.98

3.157895

133.3333

1.09

0.3

3600000

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

12880.09

2.204605

5.422771

13338.66016

10404.49

19.16

3.121636

34.55056

24.95

8.69

17196257

NASDAQ COMPOSITE INDEX

2935.05

3.002643

12.66338

3134.17

2298.89

HANG SENG BK

106

0.56926

15.02984

125

84.4

1918770

FTSE 100 INDEX

5571.15

1.421612

-0.02027685

6084.08

4791.01

HOPEWELL HLDGS

22.1

1.144165

11.27895

24.903

18.56

2115528

DAX INDEX

6416.28

4.331283

8.780925

7523.53

4965.8

HSBC HLDGS PLC

68.55

0.5869406

16.18644

78.85

30881138

NIKKEI 225

9006.78

1.495023

6.521678

10255.15

8135.79

HUTCHISON TELE H

3.59

0.5602241

20.06689

3.71

2.37

2329152

HANG SENG INDEX

19441.46

2.187564

5.462997

22835.03

16170.35

LUK FOOK HLDGS I

16.06

2.554278

-40.73801

46.15

14.7

7314534

MELCO INTL DEVEL

6.16

2.838063

6.759099

10.76

4.3

2659090

CSI 300 INDEX

2461.612

1.479267

4.939593

3140.102

2254.567

MGM CHINA HOLDIN

11.72

0.5145798

22.1832

17.183

7.6

3631953

TAIWAN TAIEX INDEX

7296.28

1.766763

3.170209

8842.17

6609.11

MIDLAND HOLDINGS

3.73

-1.583113

-5.66627

5.217

2.887

1327887

NEPTUNE GROUP

0.089

-2.197802

-19.81982

0.151

0.08

NEW WORLD DEV

9.01

1.693002

43.92971

11.279

6.13

14564627

SANDS CHINA LTD

24.5

5.603448

11.61731

33.05

14.9

21502739

SHUN HO RESOURCE

1.13

1.32

0.82

1.520913

4.332402

4.668

2.241

2590167 7757686

GALAXY ENTERTAIN

KOSPI INDEX

1854.01

1.914599

1.548414

2192.83

1644.11

S&P/ASX 200 INDEX

4094.633

1.2311

0.9385417

4657.4

3765.9

3955.577

1.749214

3.495166

4234.734

3217.951

FTSE Bursa Malaysia KLCI

1599.15

0.3079837

4.469766

1611.5

1310.53

SHUN TAK HOLDING

2.67

NZX ALL INDEX

759.803

-0.136953

4.111082

806.015

700.441

SJM HOLDINGS LTD

14.28

2.881844

14.18943

20.711

10.079

14.9

-0.4010695

10.8631

18.5

9.8

911820

18.02

2.61959

-7.589744

27.48

14.807

9076114

JAKARTA COMPOSITE INDEX

PHILIPPINES ALL SHARE IX

11.5

18.5

14.3

NAME

CORN FUTURE

Average 11.684

CURRENCY EXCHANGE RATES

NATURAL GAS FUTR Aug12

METALS

Max 11.84

WyNN MAcAu ltD

Commodities ENERGY

29.0

last 29.2

SJM HolDINGS ltD

Average 24.197

Max 25.05

11.6

3452.84

0.0553474

13.39227

3518.96

2695.06

SMARTONE TELECOM WYNN MACAU LTD

HSBC Dragon 300 Index Singapor

537.22

-0.16

8.24

ASIA ENTERTAINME

4.04

2.278481

-31.29252

10.8692

3.66

92680

STOCK EXCH OF THAI INDEX

1172.11

0.06744528

14.31651

1247.72

843.69

BALLY TECHNOLOGI

46.66

2.055993

17.94742

49.32

24.74

433606

HO CHI MINH STOCK INDEX

422.37

1.006792

20.14507

492.44

332.28

BOC HONG KONG HO

25.14666

3.15

1.81

1500

Laos Composite Index

989.82

-0.9000711

10.04603

1107.3

876.33

GALAXY ENTERTAIN

2.5

7.296137

33.68984

3.24

1.08

6950

INTL GAME TECH

15.75

2.272727

-8.430237

19.15

13.12

4400677

JONES LANG LASAL

70.37

2.850044

14.87104

99.89

46.01

421184

LAS VEGAS SANDS

43.49

2.83755

1.778611

62.09

36.08

7697057

MELCO CROWN-ADR

11.52

4.44243

19.75052

16.15

7.05

4787582

MGM CHINA HOLDIN

1.55

30.06704

2.2131

1.0025

1000

MGM RESORTS INTE

11.16

3.429101

6.999038

16.05

7.4

10462870

13.8

2.071006

17.74744

18.77

7.35

810338

1.8

11.97005

2.6037

1.2624

4600

103.72

1.676306

-6.12725

165.4931

95.82

2247741

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

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business daily July 2, 2012

Opinion Merkel’s compromise means currency union might yet survive Mark Whitehouse Paula Dwyer Bloomberg View Editors

minor miracle has occurred in Brussels: Germany has signaled that it may be willing to do what it takes to save the euro. Now the question is whether Europe’s leaders can show enough money to back their words. In negotiations that lasted through the night, German Chancellor Angela Merkel agreed to allow Europe’s permanent bailout fund — the European Stability Mechanism — to provide capital directly to troubled banks anywhere in the euro area. If the deal sticks, Germany and the other governments of the currency union will accept joint liability for rescuing one another’s banks — an option that, on the eve of the meeting, Merkel had vowed not to consider. In return, as part of a broader banking union, governments will cede to European authorities, probably including the European Central Bank, the power to oversee,

punish and dismantle banks. The agreement also eases austerity measures and allows for direct bond purchases to reduce the borrowing costs of struggling governments, including Italy and Spain. It’s hard to overstate the significance of what happened in Brussels. By providing an added backstop for banks whose assets often dwarf the economies of individual sovereigns, and by offering financial support for those sovereigns, the deal has the potential to break the debilitating link between the troubles of banks and the solvency of governments. By pooling resources and authority, it represents an important step toward the kind of political union needed to make the euro area viable.

approaching 7 percent, fell to less than 6.5 percent. Italian bond yields crossed back below 6 percent. The deal could yet run into snags, and remains a far cry from what’s needed to end

Markets rallying

allegiance to

Markets are rallying on the news. Spanish 10-year bond yields, which had been

Europe’s leaders will need to display more firepower if they want markets to trust in their the common currency

the crisis. For one, Europe’s leaders still seem to think they have plenty of time. They’re aiming to complete the supervisory part of the banking union by the end of this year. Until they achieve that, direct recapitalizations of banks can’t happen, and Spain will remain on the hook for a banking bailout that could cost 100 (US$1.26) billion euros or more. If negotiations on details get bogged down, a paralyzed banking system will undermine economic growth and political stability, making the sovereigns’ predicament even more precarious. More important, European governments’ commitment to mutual aid is limited to the capacity of its two bailout funds. Taken together, the funds have no more than 500 billion euros available to buy bonds and recapitalise banks, according to Bloomberg. That may be enough to cover banks’ capital needs, but falls far short of the 2.4 trillion euros in Spanish and

Italian debt outstanding. Europe’s leaders will need to display more firepower if they want markets to trust in their allegiance to the common currency. The least bad approach, as Bloomberg View has advocated, would be for the ECB to pledge whatever resources are needed to support recapitalisations and the financing of solvent governments. If the commitment is large enough to restore confidence, the money probably won’t need to be deployed: markets will provide financing on their own, and governments can get on with fixing their finances, restoring competitiveness and crafting the kinds of risksharing mechanisms — such as jointly backed euro bonds — required to complete the currency union. Success still depends on Merkel and Germany. They’ve taken a crucial step in the right direction. Lest the effort be wasted, they’ll have to take the plunge. Bloomberg View

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Chief REPORTER Vitor Quintã Newsdesk Cláudia Aranda, Kristy Chan, Kelsey Wilhelm, Cherry Lee, Terina Cao, Tony Lai Creative Director José Manuel Cardoso Designer Janne Louhikari Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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July 2, 2012 business daily | 15

OPINION

How to make trade easier wires Business Leading reports from Asia’s best business newspapers

Yomiuri Shimbun A report on an in-house investigation by Nomura Holdings Inc. shows that Nomura Securities Co. leaked important information to clients in an organised manner on a regular basis until its recent insider trading scandal came to light. The report was made public in the wake of revelations Nomura Securities officials had leaked information about the planned capital increases of listed companies before they were officially announced. The Securities and Exchange Surveillance Commission is set to recommend an administrative penalty on Nomura Securities, according to sources.

Korea Herald South Korea’s finance ministry has decided to allocate 8.5 trillion won (US$7.4 billion) in additional spending as fiscal stimulus. The government plans to increase fiscal spending by 4.5 trillion won through a state budget while public funds and corporations will raise another 4 trillion won for spending. The additional spending should pull up GDP growth by 0.25 percentage point per year, officials said. The ministry, however, revised its projection for Korea’s economic growth for this year down to 3.3 percent, from its earlier forecast of 3.7 percent.

Taipei Times The U.S. should “quickly” resume the Trade and Investment Framework Agreement talks with Taiwan, three members of the U.S. Congress have written in a letter to President Barack Obama. The talks have been stalled since 2007 as a result of the beef import issue. “While we recognise that Taiwan must take steps to open its market to U.S. agricultural exports, many in the US would like to see a vigorous trade and investment dialogue with Taiwan as early as possible,” the letter said.

Bangkok Post Thailand’s red shirt leaders have backed off from demands for immediate House deliberation of the four national reconciliation bills. They announced the change in position on Saturday at a rally in Bangkok. Korkaew Pikulthong, from the United Front for Democracy against Dictatorship, said he supported a delay in the deliberation of the reconciliation bills because doing so would help stave off confrontation. Mr Korkaew called on red shirt supporters to wait until the political climate calms down before resuming their push for the bills to go before the House.

Ahmad Mohamed Ali Al-Madani, President of the Islamic Development Bank Donald Kaberuka, President of the African Development Bank Haruhiko Kuroda, President of the Asian Development Bank Thomas Mirow, President of the European Bank for Reconstruction and Development Luis Alberto Moreno, President of the Inter-American Development Bank Robert B. Zoellick, President of the World Bank Group

he world is now in the fourth year of the Great Recession. So far, the economies belonging to the World Trade Organization have resisted the kind of widespread protectionism that would make a bad situation much worse. But protectionist pressures are building as weary politicians hear more and more calls for economic nationalism. The WTO’s best defense of open trade is a good offense. A new WTO Trade Facilitation Agreement would benefit all by increasing developing countries’ capacity to trade, strengthening the WTO’s development mandate, and boosting global economic growth. More than a decade after the launch of the Doha Round of global freetrade talks, this agreement could be a down payment on the commitment that WTO members have made to linking trade and development. Developing countries stand to gain the most from improving trade facilitation. The right support would help traders in poorer countries to compete and integrate into global supply chains. There are rich opportunities for gains. Inefficiencies in processing and clearing goods put traders in developing countries at a competitive disadvantage. Outdated and inefficient border procedures and inadequate infrastructure often mean high transaction costs, long delays, opportunities for corruption, and an additional 10-15 percent in the cost of getting goods to market – even more in landlocked countries.

Gains from easier trading Research by the World Bank suggests that every dollar of assistance provided to support trade-facilitation reform in developing countries yields a return of up to US$70 in economic benefits. When funds are directed at improving border-management systems and procedures – the very issues covered by the trade-facilitation negotiations – the impact is particularly significant. Projects aimed at boosting efficiency and transparency, supported by development banks and bilateral donors, have made a dramatic difference. In East Africa, procedural improvements

have reduced the average clearance time for cargo crossing the Kenya-Uganda border from almost two days to only seven hours. In Cameroon, some of our organizations have worked with the World Customs Organization to help the customs authority reduce corruption and increase collection of revenues – estimated to be more than US$25 million a year. On the Laos-Vietnam border, a sub-regional cross-border transport agreement has cut cargo transit times from four hours to just over one hour. A new customs component to a highway project between Phnom Penh and Ho Chi Minh City helped increase the total value of trade through the Moc Bai-Bavet border by 40 percent over three years. In Peru, some of our banks have worked with international freight forwarders to connect remote villages and small businesses to export markets through national postal services, turning more than 300 small firms into exporters, most for the first time.

Modest costs The outlines of a new WTO Trade Facilitation Agreement are already clear, but some

In international negotiations, there is always a way forward if the benefits of an agreement are shared by all.Trade facilitation offers a development dividend for all countries

technical differences remain on specific provisions. Developing countries want a credible commitment to support implementation, such as technical assistance and capacity-building. A World Bank study estimates that the costs of implementing the measures likely to be covered by a Trade Facilitation agreement would be relatively modest – US$7-11 million in the countries studied, spread out over a number of years – especially when compared to the expected benefits. Capacity-building and financing programs for governments that want to improve their trade facilitation are available already. Major donor countries and international development organizations have put a priority on, and increased investment in, trade facilitation. According to the OECD, from 2002 to 2010, trade facilitation-related assistance increased ten-fold in real terms, from almost US$40 million to nearly US$400 million. The African Development Bank, the Asian Development

Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, the Islamic Development Bank, and the World Bank stand ready – alongside the WTO – to assist developing countries through the process of full and effective implementation of the agreement. That means helping countries to assess their tradefacilitation needs on a case-bycase basis, match those needs with the resources required, and broker partnerships between recipient countries and development allies to ensure that support is provided quickly and efficiently. In international negotiations, there is always a way forward if the benefits of an agreement are shared by all. Trade facilitation offers a development dividend for all countries. It is time for WTO members to make progress on issues where there is room to do so. It will be a down payment on a solid investment. © Project Syndicate

16 |

business daily July 2, 2012

CLOSING Germany says ‘ja’ to bailout fund

World powers agree Syria deal

Germany’s parliament approved the European Union’s fiscal pact and the permanent euro bailout fund with clear majorities as Chancellor Angela Merkel pledged solidarity and vowed to overcome the debt crisis. Returning from Brussels, where Ms Merkel conceded to demands to offer relief to Spain and Italy at an EU summit, the German leader called the fiscal pact for budget discipline and the European Stability Mechanism “necessary” to overcome the crisis. “This is a signal of solidarity and determination, domestically as well as abroad,” Ms Merkel told lawmakers before the vote in Berlin.

World powers on Saturday agreed a plan for a transition in Syria that could include current regime members, but the West did not see any role for President Bashar al-Assad in a new unity government. Russia and China insisted that Syrians must decide how the transition should be carried out rather than allow others to dictate their fate, as the two powers signed up to the final agreement that did not make any explicit call for Mr Assad to cede power. UN special envoy Kofi Annan condemned the violence in Syria and said “time is running out” for the Middle Eastern country.

China June PMI hits 7-month low Manufacturing growth weakens as new orders decline

China’s PMI fell to 50.2, increasing the likelihood of another stimulus package

hina’s manufacturing expanded at the weakest pace this year as new orders and export demand dropped, showing the government has yet to arrest an economic slowdown. The Purchasing Managers’ Index fell to 50.2 in June from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. That compares with the 49.9 median estimate in a Bloomberg News survey of 24 economists. A reading above 50 indicates expansion.

Yesterday’s data increase the odds Premier Wen Jiabao will introduce more stimulus to stem a deceleration in the world’s second-biggest economy that may have extended into a sixth quarter. The central bank will finetune economic policies in a “timely and appropriate” manner, central bank Governor Zhou Xiaochuan said on Friday. “Although the PMI is slightly better than consensus, the underlying trend still indicates a deterioration in economic activity,” said Shen Jianguang, Hong Kong-based chief Asia economist for

Mizuho Securities Asia Ltd. “Further monetary easing is warranted, with two interest-rate cuts and reserve ratio cuts in the second half increasingly likely.” The People’s Bank of China lowered interest rates last month for the first time in more than three years and reduced the amount of cash banks must set aside as reserves three times starting in November.

Slower growth Mr Shen estimates economic growth slid to 7.2 percent in the second

quarter from a year earlier and last month reduced his full-year estimate to 8.1 percent from 8.3 percent. Gross domestic product grew 8.1 percent in the first quarter, the least in almost three years. The federation’s index is based on responses from managers at 820 companies in 31 industries. The gauge for large companies fell to 50.6 from 51.1 in May, while that for small companies contracted for the third month, the data show. A separate purchasing managers’ index released by HSBC Holdings Plc and Markit Economics indicated that manufacturing may have contracted for an eighth month in June, according to a preliminary reading on June 21. The final reading of the survey, which covers more than 420 companies and is weighted more toward smaller businesses, is released today. Gains in China’s currency against the U.S. dollar have stalled as growth in Asia’s biggest economy has slowed and Europe’s debt crisis curbed demand for exports. The yuan weakened 0.88 percent in the second quarter, according to the China Foreign Exchange Trade System. The gauge of new export orders in the federation’s index contracted for the first time since January, yesterday’s data showed. The scale of the drop was the biggest since December, the federation said. “Tumbling export orders point to headwinds to exports in the third quarter, suggesting domestic demand needs to pick up to stabilise growth,” said Chang Jian, a Hong Kong-based economist at Barclays Capital. Bloomberg

Mass HK demo as Leung takes over More than 50,000 people protested in Hong Kong yesterday over the inauguration of CY Leung

ens of thousands of protestors took to the streets of Hong Kong yesterday, adamant there was nothing to cheer as the city marked 15 years of Chinese rule and swore in a new leader. The rally came after Chief Executive Leung Chun Ying, a millionaire property consultant seen as close to China’s communist rulers, took his oath before Chinese President Hu Jintao. The crowd ranged from engineers and civil servants to maids and students, and represented groups from the Falun Gong spiritual movement to trade unions, as well as ordinary citizens young and old. In sweltering heat it took them nearly three hours to file out of Victoria Park, organisers said, and they blocked streets far across the city, stranding buses and trams. Mostly clad in the mourning colours

of black and white, they carried placards calling for ‘One person one vote’ and chanted ‘Power to the people’, sometimes in more of a carnival atmosphere, complete with drums and songs. Organiser estimates of crowd size were not immediately available, while police gave a preliminary figure of 55,000 that was likely to rise. “Hong Kong has become much worse off,” Eric Lai of the Civil Human Rights Front told the protestors. “Our rights are under serious threat.” But marcher Jacky Lim, 37, who carried Hong Kong’s former colonial flag bearing the British union jack, said: “There is nothing worth celebrating today. Hong Kong is being gradually destroyed by the Communist Party”. Ahead of Mr Leung’s swearing-in, a group of demonstrators burned his portrait, shouting: “Battle the

HK police used pepper spray on Saturday to push back demonstrators who tried to get past barricades near Hu Jintao’s hotel

Communist Party! We will battle to the end!” Mr Hu left for Beijing before the march began and China’s outspoken web users accused him of “hiding” from protesters in Hong Kong. On Saturday police used pepper spray

to push back a few dozen protestors who tried to get past barricades near Mr Hu’s hotel, and a Hong Kong reporter was briefly detained by police after shouting a question about Tiananmen at Mr Hu. AFP/Bloomberg