Macau Business Daily, July 23, 2012 by Business Daily

Catch ‘em young, sell ‘em more: expert ‘Today’s backpacker is tomorrow’s elite tourist’, says Michael Hitchcock of Macau University of Science and Technology. He suggests the city could target the youth travel market via its many festivals to widen its international appeal for decades to come. Pages 2 and 3

Ten-year plan for labour market A

new study on the city’s labour needs is to be launched soon. The findings will be used in a medium-term plan covering the next decade, says Davis Fong Ka Chio, head of the human resources policy research group of the Economic Development Council. It’s difficult in a relatively open economy such as Macau to be completely accurate in plotting labour needs years ahead. But there’s a perception among some investors that recent government policy on labour importation has been reactive rather than proactive. With the number of local jobless at only two percent, predictable and identifiable needs such as the demand for more bus drivers or the importation of builders for fresh casino projects could and should have been better managed they say. Even if Macau is successful in drawing up a ten-year plan for labour, it could all be forgotten if the local economy suffers a setback and locals start agitating once more against the use of outsiders. More on page 6

I SSN 2226-8294

HANG SENG INDEX

The other VIPs – poker’s stars roll in

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Texas Hold’em poker is Macau’s Cinderella game. It generated only 143 million patacas in the first half compared to 104.85 billion patacas for VIP baccarat alone. But poker players do tend to be better off and better educated than average visitors. The city could do with more.

19600

19550

Page 4 19500

July 20

HSI - Movers Name

Inflation slows, food still costly Macau’s consumer price inflation cooled slightly in June to 6.19 percent. The slowing was attributed by economists to a modest decline in food price inflation. Official data show 8.94 percent food price rises year-on-year in June, down from 9.9 percent in May. Page 5

www.macaubusinessdaily.com

Hengqin campus tunnel suffers partial collapse The University of Macau’s new campus on Hengqin island could face further cost increases and delays after part of the underwater tunnel that will be the only connection to Macau’s new enclave collapsed. Five construction workers, as well as monitoring staff, were on site but they left the area as soon as cracks appeared. Page 6 & 7

%Day

CHINA UNICOM HON

7.19

TENCENT HOLDINGS

1.93

CHINA PETROLEU-H

1.88

CHEUNG KONG

1.69

IND & COMM BK-H

1.69

CHINA RES POWER

-1.20

CATHAY PAC AIR

-1.66

HONG KONG EXCHNG

-1.99

CHINA OVERSEAS

-2.62

WANT WANT CHINA

-4.50

Source: Bloomberg

2012-7-23

2012-7-24

2012-7-25

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26˚ 30˚

Year I - Number 81 Monday July 23, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

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business daily July 23, 2012

macau

Telling a better tale Taking advantage of Macau’s heritage and centuries of history would help capture tomorrow’s sophisticated tourists, says Michael Hitchcock, dean of the Faculty of Hospitality and Tourism Management at the Macau University of Science and Technology. In an interview with Business Daily, Mr Hitchcock says the city needs to tell its story better and reveals that our heritage is well preserved – perhaps more so than some European destinations. While optimistic about the research being done here, Mr Hitchcock says the city must better understand the needs of the millions of tourists that visit every month. Luciana Leitão

leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

Is the government adopting the right measures to attract different types of tourists? It’s heading that way but it is still in its early days. Wherever I go in the world, whenever I say I work in Macau, people laugh and make jokes about casinos. But, actually, there are people who do come here to look at Macau’s heritage; the tangible heritage, the Portuguese and old Chinese buildings, and the intangible heritage, which is the music, food and language of Macau. It is diversifying but it could diversify even more. Macau is a little behind Western Europe in the area of interpretation, which is telling the story and the background. If you walk around Macau it’s not obvious what these buildings mean, why they are there. If you understand something about the history, then that would be more obvious. With the technology that exists today to be able to interpret signs, that’s probably something that could be usefully done in Macau to make it more accessible and understandable to visitors. People enjoy the ambience of Macau but I don’t think they fully understand it. Being a World Heritage site, it’s actually very important. I’m well aware of the UNESCO policy. I think it matters a great deal and it’s actually a very important designation. If anything, Macau should flag up much more clearly that this is a World Heritage site. I don’t think one can actually play that down. It’s much more important than people fully comprehend. We could be doing a little bit more research. We should be talking to our visitors and understanding them better. Yes, I think the government’s policies are fine.

The next step is to understand our visitors and that’s where I think we come in as a university. How could the city improve they way tourists navigate its sights? We need to do some research, in particular about Chinese visitors, so as to know what they already understand and what they care to understand. We don’t know. We have an idea but it would be much better to have fully consolidated scientific research, so we could know exactly how to reach out to them and maybe reach out to them in different ways, depending on age, for example. Younger Chinese visitors are so technological and sophisticated. Maybe that’s the way to reach them. But older Chinese visitors should have slightly more conventional forms of interpretation. The government talks about promoting events to reach its goal of diversification. Do you share this view? Events are very important. I know there are festivals here and we should be doing more to nurture those traditional festivals. I also think that playing up the Portuguese mixed heritage of Macau is pretty important as well. Diversification is the key but you don’t want to diversify too much. You want to have some key things that associate to Macau. First thing, there is food. Macau is a great food destination. It has fabulous restaurants, hundreds of restaurants to cater every single budget. You can either go grand scale or you can do local eating. It’s incredibly cheap. For 30 patacas you can have a really nice meal. Maybe we’re not doing enough for the young backpacker market. I know many places that don’t want backpackers because they are young people without much money but today’s backpacker is

tomorrow’s elite tourist. In Thailand, they’ve realised backpackers will one day grow up and have families and children and they’re welcomed back in three-, four- or five-star hotels. Maybe we should be thinking about the youth market, with festivals, and maybe we should be thinking of youth travellers in China. Macau is the kind of city where you can walk around. It’s fun. People living here should see it through the eyes of a young, Western traveller, rambling around Macau, coming across interesting temples, learning something about the culture and Chinese civilisation. How important is the UNESCO designation for the tourism industry? At the moment, it’s there. We should actually be really drawing attention to it. I don’t take the view that UNESCO is something we should take for granted. Macau has this status and I think it should be firing it up. It does do it, but it needs to do much more. Perhaps there is an opening here for publications that tell the story of Macau. We need more materials, particularly in Chinese. I just think we could do a great deal more. How would you assess heritage management? Generally speaking, there is a relationship between the way you manage people’s heritage and the impact that tourism has. I’m not saying that we fully understand this. We don’t and that’s an important part of the research. Generally speaking, one of the

biggest problems across Asia, and, indeed, the whole world, is that you have confused lines of authority. Some of the sites we’ve looked at in nearby countries, one of the problems is that you don’t have a clear line of authority. So, once you’ve got different interlocutors in there, the whole business of how you manage gets confused. Once you get a bit of confusion, people don’t really know how to behave. You need to get a clear mind about they should and they shouldn’t do. You don’t have to do this in a didactic or authoritarian fashion. You can do this in a positive and encouraging fashion, so you encourage people to behave in a “conservation way”. There are techniques of interpretation. Most of Asia fully understands these forms of management. That’s something I’m particularly interested in developing here in Macau or everywhere across Asia. Are monuments and heritage sites well preserved? Yes, I think they are. Let’s get it in perspective. You can go to other parts of Asia, where the Portuguese heritage or the Chinese heritage was actually a little bit dilapidated and still remains a little bit dilapidated. For example, the old Chinese temples are in good shape. More can be done but, still, I don’t think this is a disaster zone. The Portuguese heritage is [in good shape] as well. Yes, we need some conservation work but I can think of places both in Europe and in Asia that actually

July 23, 2012 business daily | 3

MACAU People enjoy the ambience of Macau but I don’t think they fully understand it. Being a World Heritage site, it’s actually very important

editorial

Fact-free age debate Deputy Editor-in-Chief

don’t do it as well. I think we should be reasonably proud of the way things are but there is always room for improvement. There is criticism about the buffer zones and the buildings surrounding the historical sites, with some voices expressing concern over preservation efforts. What’s your take? I wouldn’t be critical of Macau in this respect because it’s something we have only really just begun to understand. We need to be quite careful, particularly on what we call street furniture. We tend towards thinking of what we can see at ground level but we need to actually look at the whole building and think about angles and sites. I don’t find Macau problematic but with a bit of thought we can do a little bit better. It’s no worse than many parts of Europe and a lot better than some parts of Asia. We need to think more carefully about the colours, the signage lettering, what is allowed in advertising. It doesn’t have to be draconian. Actually, there are various groups of thought on this. I’m not fond of the idea “let’s create a kitsch type of area”. I’m far more pragmatic. After all, one of the things I like about Macau is the living environment and I think that’s what we need to bring out. People are living, eating and shopping in this environment. I’m not interested in having something that is fixed and not accessible. In some areas, it becomes a little bit too kitsch and I would rather it didn’t happen.

I actually quite like the fact that it is the old heart of Macau and it still is what it was always, a commercial area. I think that is nice. I would like to think we have a zone where Macau people and tourists could mingle together. Even though we have heritage and centuries of history, it still doesn’t draw tourists like casinos. Why? The Macau story is a very complex one and it’s a very difficult story to bring out to modern visitors. In Malaysia, Malacca – in many ways, the sister city of Macau – they’ve tried to make its story understandable to visitors and I

Today’s backpacker is tomorrow’s elite tourist … Maybe we should be thinking about the youth market, with festivals, and maybe we should be thinking of youth travellers in China

still don’t think they’ve got it quite there yet. These two sites are complex. There are a very complex series of actions between the Portuguese, the Catholic Church, the Chinese government and the local mandarins taking place. Where Macau does very well is the Maritime Museum. It’s a rather exciting place to go, that whole area around the A-Ma Temple. Often, when you’re trying to develop something, it’s often best to look at good practices locally and there we have some good examples of good practices. I’m pretty upbeat about Macau. It’s doing some pretty good things.

Life and career Michael John Hitchcock is a professor of tourism management at the Macau University of Science and Technology, where he researches tourism management and development, and heritage management. Before coming to Macau, Mr Hitchcock was an academic director at the International Hotel Management Institute in Switzerland and a deputy dean at the University of Chichester in England. He has written several books, including “Tourism in Southeast Asia: Challenges and New Directions” and “Heritage Tourism in South-East Asia”.

minimum age for entry to and working in casinos is on the agenda at the Legislative Assembly. It is a foregone conclusion that the legal age for entry will be set at 21 years. That much seems inevitable, taking into account the process and discussion so far. The commission dealing with the proposal has had a hard time. The issues are complex and several times it has requested the final report be postponed. The commission has raised questions and suggested several changes along the way. It has stated that it wanted to improve the writing and the technical quality of the government’s bill. The government refused, believing there was no need to introduce change. The disarray has set the tone for the bill’s second reading and that is regrettable. Once more, a law will be introduced that is based on poorly defined arguments. It also seems the law will further dent the principles and coherence of the legal system. Let us see why. The government puts forward a two-pronged “argument”. It says, on one hand, that early contact with gambling has a negative influence on the values of Macau’s youths. It also argues that the public wants the legal age raised. The conclusion is, we should do it. It seems a syllogism. It is not. Neither claim is supported by a fact-based finding nor anything that lends empirical support. Simply put, there is no support for the claim that young adults must be protected from themselves when it comes to gambling. There is no evidence that they are more susceptible to its darker side than any other demographic. After the “moral argument”, the experience of other jurisdictions is used as a second “argument” to support increasing the legal age limit. Again, it is a poorly constructed claim. The fact that others do it is a simple statement which does not amount to a justification of why Macau should follow suit. Different contexts and experiences shape unique solutions. Macau should try to learn from others’ experiences, sure, but that is no substitute for a proper consideration of how their experience would apply to our specific conditions. The fact that some jurisdictions do not clearly define the age at which a person is considered a minor, does not mean Macau is in the same position. From a legal perspective, the examples put forward are irrelevant. Cherry picking examples is not a reason. Worse still, the change seems to create a third type of citizen that is neither a minor nor a full adult.,. A “minor-adult citizen” clearly violates the principles of equality and freedom enshrined in the Basic Law and other in other laws, such as the labour statutes. The government says the principle of equality is not violated because raising the age of entry to a casino is “positive discrimination”, which is allowed under the Basic Law. This enters the realm of Orwell’s Newspeak. To be prevented from working in a casino or from spending a few coins at the Fan Tan table, how can that be considered positive discrimination for 18 to 21 year olds?

The change seems to create a third type of citizen that is neither a minor nor a full adult

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business daily July 23, 2012

macau Brought to you by

HOSPITALITY The price they pay The prices tourists pay are sensitive to developments in two of the city’s leading industries: accommodation and restaurant services. Together, they represent more than 40 percent of tourists’ expenses, according to the Tourist Price Index. Any significant changes in the prices tourists pay for either of these industries will have a noticeable impact on the index.

Welcome sight – poker tournaments have helped Macau through lean times in the past

The index has traditionally dropped in the second quarter of the year. After Chinese New year, prices measured by the index tend to fall. Last year, the drop in the index was about 1.5 percentage points. This year it rose by almost 5 percent. The main driver for any decline in the index is accommodation costs. They fell by 12 percent last year and by 25 percent in the first quarter. The magnitude of the decline hints at more than just a seasonal adjustment. It is conceivable that there is an excess supply of rooms, perhaps temporary, that is forcing hotels to sharply reduce room rates to keep their occupation rates up.

The second major component of the index, restaurant services, increased by 9 percent and 5 percent in the second quarter of this year and last year. There is a slowdown in the rate of growth. The two other major expenses for tourists are food and alcoholic beverages, and clothing and footwear. Together these costs account for more than 28 percent of tourist expenditure. Prices for food and alcoholic beverages grew about 2 percent this year and last. The prices of clothing rose notably faster than this year – 15 percent, up from 8 percent before. But that essentially made up for the big drop seen in the first half. Other tourist expenses had smaller variations but their smaller share of the expenditure means they have little impact on the index. J.I.D.

The other VIPs roll in Upmarket poker players help city during baccarat slowdown Associate Editor

espite a slowdown in VIP baccarat revenue growth and – in the mass-market segment – flagging demand for hotel rooms; poker tournaments and events are still proving a reliable source of income for the city. The Asian Poker Tour Macau 2012 holds a seven-day tournament at Galaxy’s StarWorld Hotel & Casino starting on Wednesday. It’s expected to bring in hundreds of extra – and more importantly high spending – visitors during the traditionally quieter midweek period. Players from all over the region and beyond are due to arrive one or two days before the start of the main event on Friday 27. The APT says it has sold out its complement of reserved rooms at StarWorld’s sister property Galaxy Macau on Cotai. “We are responding to demand,” says Jeff Mann, chief executive of the APT. “Our regular players throughout Asia are requesting more APT events in new locations and we have event organisers, casinos and venues worldwide now requesting to host an APT week,” he added.

Growing game APT Macau’s rival, PokerStars Macau, affiliated to the Asia Pacific

Poker Tour, last week announced commercial risk of running poker two further events at its base in the games and poker rooms – are Grand Waldo Hotel for the 2012 careful about how much precious Asia Player of the Year season. The table allocation they give to the Macau Poker Cup Championship product. Macau’s gaming regulator will take place from September 7 to DICJ – the Gaming Inspection 16, while the inaugural APPT: Asia and Coordination Bureau – has Championship of Poker is scheduled given some support to the poker for October 26 to November 11 community by allowing casinos 2012. The Macau Poker Cup offers a to count several poker tables as HK$20,000 buy-in main event with equal to one baccarat table for the the prize pool guaranteed to exceed purposes of the cap (the actual ratio HK$4.5 million. The organisers agreed varies from one operator promise the Asia to another). Championship But poker’s will be the rake model – highlight of the whereby the region’s poker casino takes year with what a percentage they say is an commission on unprecedented the money bet HK$100,000 by the players buy-in main – and the event with a lower number of Card Player HK$10 million of hands per guaranteed hour in poker magazine’s readers c o m p a r e d prize pool. Poker is however to baccarat, earn more than something of means it tends US$100,000 annually to produce a a Cinderella product for the lower yield per Macau casino table compared operators. In to even massa market currently subject to a market baccarat. Set against government cap on live tables, that, when poker tournaments are casinos – that in any case often held, they tend to attract just the pass on to outside promoters the sort of customers the casinos and

29 pct

July 23, 2012 business daily | 5

MACAU

Consumer inflation eases but food prices a worry Food prices slowed last month but an annual increase of almost 9 percent will push up inflation rate higher Tiago Azevedo

tiago.azevedo@macaubusinessdaily.com

the government say they want in spades – well-heeled ones willing to spend money on things other than gambling. Card Player magazine, a publication focusing on poker, claims a readership of 112,000 per month. It says 45 percent of them are college educated and 43 percent earn the equivalent of US$50,000 (399,500 patacas) to US$100,000 per year, with a further 29 percent making more than US$100,000.

Different ‘VIPs’ That type of visitor would be especially welcome in Macau at the moment, given the slowdown in the VIP baccarat market. Last Monday government data for the second quarter also showed the city’s tourist price index fell for the second consecutive quarter – the first time in a decade this has happened. And last Tuesday Macau Economic Services’ director Sou Tim Peng said the government was considering subsidising more MICE functions and cutting red tape to make it easier to organise them. The number of incentives events fell 17 percent year-on-year in the first quarter, although the number of total MICE events that quarter – 271 – was down only two percent on a year earlier, and those that were held generated more income for the city. The fall in the tourist price index in the second quarter was attributed to a drop in room rates. Hotel and guesthouse rates were on average a third lower than in the first quarter, when the figures are influenced by demand and pricing related to the Golden Week of the Chinese New Year Holidays. Nonetheless, the prices were still the lowest for two years. The amount of supply in the market has also increased. The first phase opening of Sands Cotai Central on April 11 added 1,800 new rooms. On June 11 Sands China started discounting up to 62 percent on the price of some rooms at Holiday Inn Macao Cotai Central in an offer running to July 12.

Beneficial slowdown Housing and fuel prices increased by 7.79 percent in the year ended June, accounting for almost 23 percent of inflation during the past 12 months. “The fact that these two sub-indexes account for more than 50 percent of the overall inflation rate, and both keep growing at a much faster pace, will not allow the annual rate to come down sharply,” Mr Martins told Business Daily. He said inflation would ease and end

the year at close to 6 percent. “Taking into account the rate last year and the fact that prices are going down in the mainland, Macau’s inflation could be somewhere from 5.9 percent to 6.1 percent in December,” Mr Martins said. The mainland economy’s annual rate of growth was 7.6 percent in the second quarter, the slowest pace in three years. Mr Martins said Macau might benefit from a slowdown but that the downtrend in inflation could be reversed next year “when the global economy starts to turn for the better”. Economists warn that not all inflation is imported from the mainland. “There is what I call the implicit exchange rate. The yuan is getting stronger while the US dollar, to which the pataca is loosely pegged, is depreciating,” said Jacky So Yuk Chow, dean of the Faculty of Business Administration at the University of Macau, speaking last month. The pataca’s loose peg to the United States dollar through the Hong Kong dollar precludes independent monetary policy, with movements in official interest rates mirroring those of the US Federal Reserve. The director of the Policy Research Office, Lao Pun Lap, wrote this month that the new driver for inflation is strengthening domestic demand. The purchasing power of residents had continued to rise and was driven by rising incomes.

and precisely the one that accounts for almost 33 percent of household budgets,” he said. He said that without more intervention there was no hope of putting the brakes on the inflation rate. “Our market is not transparent enough because food imports are an oligopoly,” he said. Suspicions that prices are being fixed has led the government to set up a task force to investigate the city’s supply chain and how prices are set. The task force will look for “potential illicit practices”, irregular weight standards, monopolies and “unreasonable price fixing”.

Tighter grip

Albano Martins, economist

Mr Martins said much of that demand came from increasing numbers of tourists, who help to drive up prices of meals in restaurants. In the first five months of this year, 11.5 million tourists visited Macau, about 3.7 percent more than at the same stage a year before. The supply of food has lagged behind growth in demand, fuelled by more hotels and restaurants and increasing tourist arrivals. Mr Martins said the government should get a tighter grip on food prices. “The government has to do more to control food prices. It’s one of the few sub-indexes that are not controlled

It is expected to report this year. “Import prices should be controlled to then check the difference to the price set by suppliers here,” said Mr Martins. “If the government doesn’t set limits to their profit margins it won’t be able to keep the inflation rate under control.” He brushes aside any idea that this would represent excessive interference in the market. “There’s no real competition here. We have a market dominated by a small number of suppliers, so we need to set adequate limits.”

Taking into account the rate last year and the fact that prices are going down in the mainland, Macau’s inflation could be somewhere from 5.9 percent to 6.1 percent in December

Photo by Manuel Cardoso

onsumer price inflation cooled slightly to 6.19 percent last month, the slowest pace since March, after economic growth moderated along with food costs. Inflation was 6.76 percent in May. The average annual rate of inflation was 6.42 percent in the first half, according to data released by the Statistics and Census Bureau on Friday. After accelerating for four consecutive months, the annual inflation rate for food and non-alcoholic drinks, which account for about one-third of household budgets, is showing signs of slowing. Food price inflation was 8.94 percent last month, slowing from 9.9 percent in May. Smaller increases in food prices in the mainland are now being reflected here. Most of the city’s meat and vegetables are imported from the mainland. The annual rate of consumer price inflation in the mainland slowed to 2.2 percent last month, from 3 percent in May, according to the National Bureau of Statistics. Beijing’s target was 4 percent. The fall was due to a big decline in food price inflation, down to 3.8 percent from 6.4 percent. But while the pace of price rises for fresh meat and vegetables eased in the mainland, it has lost only a little steam here. The prices of most vegetables increased by more than 20 percent and the price of beef rose by 23.5 percent. “A downtrend in inflation in the second half of this year, especially at the end of the third quarter, is expected, although prices of food will keep the pressure up,” said economist Albano Martins. Mr Martins said the increase in the consumer price index would not slow much because prices of food, housing and fuel were rising fast.

8.94 pct Annual increase in the price of food and non-alcoholic drinks last month

Food price inflation eased slightly last month after four consecutive months on the rise.

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business daily July 23, 2012

macau Study to be basis of 10-year labour plan

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Government to commission research on next decade’s labour needs

Currency tango Macau’s increasing prosperity has meant a continuous increase in the amount of money available in the economy. Two commonly used measures of the supply of money are M1 and M2. M1 is money that is immediately available to spend, principally cash and deposits that can be withdrawn at once. M2 also includes less liquid assets that can, however, be turned into cash at short notice at little cost, such as time deposits and the like. During the period represented here, M1 as a proportion of M2 oscillated between 12 and 14 percent, with a slight downward trend.

Money supply: growth index May 2011 = 100 120

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Tiago Azevedo tiago.azevedo@macaubusinessdaily.com

decade after the government last made a long-term study of the labour market, it is revisiting the topic. “It is the right time to investigate this issue again,” said Davis Fong Ka Chio, head of the human resources policy research group of the Economic Development Council. “Ten years ago the government conducted research but it is time to carry it out again to plan for the

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M1 and M2 both followed predictable paths. We can see an upward trend in both. M1 moved more irregularly. The upward trend is clear but it is more sensitive to the vagaries of spending. M2 follows a smoother course. Changes in the supply of the broad money it measures are relatively smaller and less frequent.

Money Supply: Currency shares

next five to 10 years.” Mr Fong was speaking to reporters on Friday after his policy research group met for the second time this year. The group has 24 members from various industries. The government plans to ask a team of academics to do the research but has not set a schedule. “First we need time to prepare the work and then to commission the study,” Mr Fong said. The research would include resident and non-resident workers to find a sustainable way to develop the labour market. “We need to rely on not just resident

workers but also on non-resident labour.” Although stable, Macau’s workforce is limited and there is an urgent need for more manpower. The import of workers has long been a bone of contention between employees and employers. At its peak, the city had more than 104,000 non-resident workers in 2008. The number fell to about 72,092 in May 2010, after the government imposed restrictions on labour imports. The size of the imported workforce has been rising, reaching 100,922 at the end of May, according to the Human Resources Office. With the unemployment rate at 2 percent, the lack of workers has led to higher pay rates across the board and competition between big employers and smaller

Campus deadline to collapse The University of Macau’s relocation to Hengqin may be delayed; budget under threat Vítor Quintã

vitorquinta@macaubusinessdaily.com 100(%) 90 80 70 60 50 40 30 20 10 May-10

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Now consider the currencies that made up the money supply, as measured by M2, in May 2010, May last year and last May. We see the persistence of a peculiarity of the financial system: the domination of the Hong Kong dollar, stubbornly fixed at 54 percent of the money supply, plus or minus a few tenths of a percentage point. The slight decline in the proportion of the money supply accounted for by the pataca is due to the increase in the proportion accounted for by other currencies, principally the yuan. All this gives Macau a curious financial system, in that it is coming to be dominated by two external currencies. One is the United States dollar – to which the Hong Kong dollar and, indirectly, the pataca, are linked – and other is the yuan. J.I.D.

art of the tunnel that will be the only link between the Macau and the University of Macau campus on Hengqin island collapsed late last week, fuelling fears that the project’s budget will increase again. A statement from the Infrastructure Development Office on Friday said pavement around the Hengqin exit of the tunnel collapsed at about 11pm last Thursday. The tunnel’s supporting infrastructure was damaged. “The collapse took place where there temporary fencing work was being done, not in the main construction area,” a spokesperson for the contractor told TDM News. There were five construction workers and monitoring staff on site at the time of the collapse. They left as soon as cracks appeared. No one was injured. “We have been conducting these kinds of drills. So, when the alarm rang, we notified the workers immediately. And, because the

Work has been suspended at the Hengqin tunnel construction site while an on-site assessment is held.

deformation took some time, we were able to evacuate in just a few minutes,” the spokesman said. An emergency plan was activated, the spokesman said. It included sealing off the area around the collapse. Work teams were withdrawn from the site and work was suspended. The Infrastructure Development Office said the incident might have been linked to recent heavy rain. The reason for the collapse would only be know after an on-

site evaluation. The contractor’s spokesman said it was too early to say if the collapse would delay construction. In May, Infrastructure Development Office deputy coordinator Chau Vai Man said construction would finish in August. The university’s new campus should be ready by the end of the year. The tunnel to Cotai will be the only connection to the campus that is located within the mainland’s

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

Harbin 27/18o C

Xian 32/22o C Shanghai 34/27o C Chengdu 26/22o C Kunming 26/18o C Haikou 33/25o C Sanya 31/25o C

Guangzhou 32/25o C

MACAU (23 July-28 July) Day

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MACAU firms, which typically cannot compete financially.

Driving a bargain Mr Fong said that while rates of pay were increasing, the quality of service was lagging behind and that some industries were feeling the pinch. Increasing salaries can harm productivity and raise production costs, as public bus companies have discovered recently. Bus operators have posted losses or sharp drops in profit since last August. Rising costs, mostly in the form of drivers’ pay, has been blamed. The arrival of the city’s third bus operator, Reolian Public Transport Co Ltd, exacerbated a driver shortage that lead to further increases in wages. Sociedade de Transportes Colectivos de Macau SARL said last week it had lost about 23.2

with tunnel Photo by Kakazi Chan

million patacas (US$2.9 million) since the government introduced a new system of subsidies last year. Reolian made a loss of 58.5 million patacas last year. Mr Fong said there was a need to intervene at once in some industries. “Some short-term solutions are needed because in a few specific industries there’s an urgent need for human resources,” he said. “We need to research and find how many drivers are working here. In 10 or 15 years’ time most drivers will retire and we don’t see young people joining this industry,” he said. “We should rely on scientific research to understand some specific industries and their needs.” The government will also seek short-

Legislators seek to mute calls for public hearings Committee believes that raising the bar to holding public hearings will increase the assembly’s credibility Tony Lai

tony.lai@macaubusinessdaily.com

borders. Any major delay in the tunnel’s construction could also lead to a delay in relocating the university. Officials have not commented on any impact the collapse may have on the scheduled opening of the campus or the project’s budget. The government said last year that the budget had increased from 6 billion patacas (US$751 million) to 9.8 billion patacas, mostly due to a four-fold growth in the cost of the seabed tunnel from 500 million patacas to 2 billion patacas. Infrastructure Development Office coordinator Chan Hon Kit said in December that the budget had increased because of a complete project revamp, tripling its length and “substantially increasing its width and depth”. Macau Construction Association head Mak Soi Kun said the collapse was “very problematic”. Mr Kun, who is also a legislator, called on the government to “strengthen observation and control over the construction process”. The new campus will be under Macau jurisdiction but, at this point, the site of the collapse is under the mainland’s jurisdiction, the Infrastructure Development Office said. The contractor “must uphold the mainland Chinese legal mechanism to follow up the incident,” the statement said. As one of the supervising bodies, the office said it had sent its staff to the site to better understand why the collapse occurred. It has demanded that the contractor hires better qualified personnel to oversee construction.

term solutions for problems in the meetings, incentives, conventions and exhibitions industry, or MICE. Government-led attempts to develop the industry have created

he Legislative Assembly will persist with a proposal to raise to five from two the number of members required to back a motion for a public hearing, despite protests by the New Macau Association. The assembly’s committee on rules and statutes discussed on Friday changes to the rules on public hearings and enquiries. The committee chairman, Fong Chi Keong, told reporters after the meeting that six of the seven members agreed with raising the bar for proposing hearings, saying it would increase the “legitimacy” and “strictness” of the procedure. He said the proportion of members required to support a motion for a hearing was too small and would be even smaller after next year’s elections, when the number of members will rise by four to 33. Another member of the committee, Ung Choi Kun, said motions for hearings could be abused by legislators that wished to raise only minor issues. Mr Fong said some people mistakenly believed the assembly could override the government. “If we, the assembly, can summon anyone to testify, it’s a judicial review. It is not fair to some businessmen [and] it’s not fair to some officials.” Mr Fong said there were other ways to oversee the government besides holding hearings. Members belonging to the New Macau Association, the pandemocrats, think the rule change will weaken the assembly. Since the handover, the association has proposed nine hearings and the assembly has rejected each proposal. At least half the assembly must support a proposal for a hearing to be held.

Political ploy “The public hearing is the most effective means for the Legislative Assembly to supervise the government,” said pan-democrat member Au Kam San. “It is not as if we try to override the government. We are just doing our

job to oversee [it].” Mr Au, the only rules committee member opposed to the rule change, thinks a minimum of five members is unreasonable. He said the change was a politically motivated ploy to make it impossible to propose a hearing. The Macau Youth Dynamics association presented a petition to

demand for skilled workers. “The MICE industry requires a lot of part-timers. There’s a huge need for this kind of short-term human resources,” said Mr Fong.

the assembly on Friday expressing its opposition to the rule change. The president of Macau Youth Dynamics, Gino Lee Chung Ho, told reporters that the change “paves the way for the government to do whatever they want”. He criticised the assembly for proposing the change without consulting the public. Mr Au said he became aware of the proposal only on Tuesday. Mr Fong said the committee had had eight meetings about rule changes during the assembly’s current session. Mr Au said the committee would discuss the rule change again tomorrow. The proposal must eventually go before the whole assembly. The proposal is part of the work that the assembly wishes to complete before its extended session is complete at the end of next month.

8 |

business daily July 23, 2012

Greater china

China to probe imported solar energy m Possible retaliation to U.S. decision to penalise Chinese manufacturers

hina will open investigations into imported U.S. and South Korean solar-grade polysilicon, the country’s trade ministry said on Friday, in the latest instance of growing tensions between major solar manufacturers. The Ministry of Commerce said that it would open anti-dumping and anti-subsidy probes on U.S. imported polysilicon, as well as an anti-dumping probe on South Korean imports of the raw materials used to make solar products. The Chinese ministry issued the decisions in two statements on its website, citing preliminary evidence from several companies - GCL Poly-Energy Holdings, LDK Solar , and Daqo New Energy. Chinese officials have threatened to impose trade duties on U.S. shipments of polysilicon if the United States moved to penalize Chinese solar companies. A spokeswoman for the U.S. Trade Representative’s office said the United States was disappointed with the Chinese move and would “vigorously defend its interests” in the case. “As we have stated with respect to similar actions by China, we are

concerned that China appears to have established a practice of using trade remedy investigations to retaliate against legitimate actions taken by its trading partners,” USTR spokeswoman Nkenge Harmon said. Western solar companies have been at odds with their Chinese counterparts for years, alleging they receive lavish credit lines to offer modules at cheaper prices, while European players struggle to refinance. China’s move came a day after Germany’s Environment Minister Peter Altmaier gave backing to German companies’ efforts to launch anti-dumping proceedings in Europe. Germany is the world’s largest solar market. Earlier this year, the United States put two new import duties totaling

about 35 percent on solar equipment from China, citing the country’s unfair support of its industry and illegal dumping of inventories in the U.S. market. The Coalition for American Solar Manufacturing, the U.S. industry group that sought duties on Chinesemade solar panels, blasted the new Chinese investigation as “an abuse of international trade rules.” “Today’s announcement by the Chinese government proves once and for all that it is intent on unfairly and illegally allowing its manufacturers to dominate the global solar industry,” Gordon Brinser, president of SolarWorld Industries America, said.China’s solar manufacturers such as Suntech Power Holdings , Yingli Green Energy and Canadian Solar

have criticized the tariffs set this year as a threat to their young industry that will slow its growth by raising costs. If punitive tariffs are adopted, it would likely impact importers such as U.S. polysilicon maker Hemlock, the world’s largest, and South Korea’s largest producer, OCI Corp. U.S.-based MEMC Electronic Materials would also be affected. Though not in a trade war, China and the United States are vocal in their criticisms over the other’s trade policies. Washington says China’s attacks are largely tit-for-tat retaliation for valid U.S. complaints, while China suggests the White House is simply “China-bashing” in an election year. Beijing on Wednesday also appealed a recent World Trade Organization

Taiwan to get new powerful rocket system

Move seen as reinforcing antilanding capabilities

aiwan is scheduled to take delivery next month of a powerful multiplelaunch rocket system aimed at neutralising former rival China’s amphibious landing capabilities, local media reported yesterday. The weapon, called Ray Ting 2000 or “Thunder 2000”, will be put into service in August, said the Taipei-based Liberty Times, as the military plans to phase out the current rocket system introduced three decades ago. “After it is armed with the new weapons, the military will see its anti-landing capability be greatly enhanced,” said an unnamed military source quoted by the newspaper. Taiwan defence ministry officials were unavailable for comment on the report. The multi-barrel system, developed by military research unit Chung-shan Institute of Science and Technology, can launch 40 rockets in a minute

with a range of 45 kilometres (28 miles), said military experts cited by the report. That longer range capability can neutralise amphibious craft before they reach the shore, they added. The truck-mounted launchers can be combat ready in eight minutes, less than half the time the current system needs to position itself, the report said. The ministry plans to produce more than 50 systems at a cost of 14.5 billion Taiwan dollars (US$483 million), local media has reported. Ties between Beijing and Taipei have improved markedly since Ma Ying-jeou of the Chinafriendly Kuomintang party became president in 2008 on a platform of beefing-up trade and tourism links. Ma was reelected in January for a second four-year term. But China still considers the island part of its territory and has vowed to take it back even if it means war. The island has governed itself for more than six decades since splitting from the mainland in 1949 at the end of a civil war, and has sought to modernise its forces to ward off external threats. AFP

July 23, 2012 business daily | 9

greater china

materials ruling against Chinese duties on U.S. “grain-oriented electrical steel,” a case that the United States says is an example of China using its trade defense laws in a retaliatory fashion. “The WTO panel in the grainoriented electrical steel (GOES) dispute upheld U.S. claims that China breached a number of substantive and procedural obligations under the WTO Agreement,” Harmon said. Research firm JI Asia analyst Felix Fok said downstream customers, such as wafer manufacturers, would struggle if China passed on the import tariffs against polysilicon imports. “China is doing this because some of its companies are basically on their knees,” Fok said, referring to more than a year of losses suffered by the sector. China’s solar companies hold more than 60 percent of the global market. The U.S. market alone accounts for about 20 percent of sales of China’s largest solar panel manufacturers. The Coalition for Affordable Solar Energy, a U.S. group that represents solar installers, urged both the United States and China to avoid duties, saying tariffs from either end cost jobs and make solar energy less competitive against fossil fuels. “Lowering, not artificially raising, the cost of solar should be a global goal,” the group’s president, Jigar Shah, said in an emailed statement Reuters

Fight against Tibetan separatism stepped up

Top official urges education campaign

hina’s propaganda chief has ordered officials to intensify the fight against separatism in Tibet, a report said yesterday, following a series of self-immolations in protest at Beijing’s rule. Li Changchun, ranked fifth in the hierarchy of the ruling Communist Party, called for the campaign during an inspection tour of Lhasa, where he visited the Jokhang Temple, the centre of Tibetan Buddhism, the People’s Daily reported. “The lifeblood of Tibet rests in ethnic unity, social harmony and stability,” the paper quoted Mr Li as saying during his visit to the Himalayan region last week. “We must guide officials and the people to continually strengthen their understanding of the great (Chinese) motherland and people and deepen and expand the fight against separatism.” Mr Li, China’s top propaganda official, also urged an education

campaign to “underscore the historic fact that Tibet is an inseparable part of China”, and which should form “the ideological basis for the fight against separatism and the maintenance of stability”. During his trip, he also visited the Potala Palace, once the home to the Dalai Lama, Tibetan Buddhism’s highest spiritual leader who fled Tibet following a failed uprising in 1959. His comments come after a teenage Tibetan Buddhist monk selfimmolated in a Tibetan-inhabited region of neighbouring southwest China last week, the 42nd Tibetan to set fire to themselves in recent months. The 18-year old monk, identified as Lobsang Lozin, set himself alight in Bharkham county in Sichuan province, which borders Tibet, as he marched towards a government office, the India-based Central Tibetan Administration said in a statement. The monk died on the spot, the

statement said. Tibetans have long chafed under China’s rule over the vast Himalayan plateau, saying that Beijing has curbed religious freedoms and their culture is being eroded by an influx of Han Chinese, the country’s main ethnic group. Beijing, however, says Tibetans enjoy religious freedom and have benefited from improved living standards brought on by China’s economic expansion. On May 27 two men set themselves on fire in front of the Jokhang Temple, the renowned centre for Buddhist pilgrimage, in the first such incident to occur in Lhasa. Lhasa was the scene of violent antiChinese government protests in 2008, which later spread to other areas inhabited by Tibetans, and authorities have kept the city under tight security ever since. AFP

Talks on five nuclear reactors for U.K. CNNC team met with British authorities

hinese nuclear firms are considering investing 35 billion pounds (US$54.7 billion) in building up to five new nuclear reactors in Britain, a newspaper reported on Saturday. A team from the Shanghai Nuclear Engineering Research and Design Institute (SNERDI), an arm of the China National Nuclear Corporation (CNNC), met senior British officials in the past week, the Guardian newspaper said on its website. The first part of the plan would involve CNNC and another stateowned firm, China Guangdong Nuclear Power Corporation, bidding in two separate groups

against each other for a stake in the Horizon project, it said. The paper, citing unnamed sources close to the Chinese, said the Chinese are also interested in other locations at Bradwell in Essex, in the southeast, Heysham in Lancashire and Hartlepool in County Durham, both in northern England. “The Chinese have the money and the experience,” the paper quoted a source close to the Chinese as saying. “They see setting up in the UK as an opportunity to show they can operate in one of the world’s toughest regulatory environments so they can then move into other markets in Africa and the Middle East.”

The French company EDF is also interested in building new reactors in Britain. CNNC would look to use an existing technology tie-up with USbased nuclear engineering group Westinghouse to potentially build three more reactors, the paper said. It would likely need to bring in a UK utility firm to operate the plants, the Guardian added. Britain was “open for business,” subject to regulatory rules, a spokeswoman at the Department of Energy and Climate Change said in a statement. “With regards to Horizon, as outlined from the start of the

process, it is in the UK’s interest that the Horizon sites continue to have the potential to be developed. “The Government continues to talk to any interested partners and investors about all aspects of the UK’s policy and commitment to new nuclear.” Horizon is one of the UK’s biggest nuclear projects. The Gloucester-based joint venture owns two nuclear sites, at Oldbury near Bristol and Wylfa on Anglesey, where it plans to build 6 gigawatts of nuclear capacity with an investment of 15 billion pounds. Reuters

Nuclear reactors in the portfolio

10 |

business daily July 23, 2012

asia

Lockout after car factory fatal riot Manager dead at Maruti Suzuki, India’s biggest automaker Karthikeyan Sundaram and Siddharth Philip

aruti Suzuki India Ltd, the country’s largest automaker, locked out workers at a factory near New Delhi and ruled out restarting production until a probe is completed into rioting that led to the death of a manager. The carmaker, majority owned by Suzuki Motor Corp., won’t import cars to make up for the loss of production at its Manesar factory, which accounts for about 40 percent of its total capacity, Chairman R.C. Bhargava told reporters in New Delhi yesterday. He didn’t say how long the investigation would take or when workers would be allowed to return to the plant. All 3,000 union workers at the plant will be charged with murder and attempted murder for the mob attack that caused the death of Awanish Kumar Dev, a human resources general manager, and at least 70 injuries, Indian police said July 19. The Federation of Indian Chambers of Commerce and Industry, one of the nation’s two largest business lobbies, said yesterday that the violence threatens India’s investment reputation. “It’s a matter of deep concern for a country that seeks to project itself

Flashpoint – Indian soldiers at wrecked gatehouse of Maruti Suzuki’s Haryana plant

as offering an environment that is business- friendly,” R.V. Kanoria, president of the lobby, said in an e- mailed statement, calling for authorities to deal “firmly” with the situation. Maruti has no plans to relocate the plant out of Manesar in northern Haryana state, Bhargava said. A factory at Gurgaon, about 12 miles northeast of Manesar, is operating

at full capacity, he said. Suzuki has said production facilities weren’t damaged by the unrest.

Rogue elements “This is bad news for Maruti as it may take as little as five days or as long as 50 days to identify the rogue elements in the workers who did this,” said Mahantesh

Sabarad, an analyst at Fortune Equity Brokers India Ltd. in Mumbai. “It also shows the trust deficit between the management and the workers. This lockout comes at a very efficient factory that produces some of Maruti’s most popular models.” Narendra Modi, chief minister of India’s Gujarat state, who’s on a visit to Japan, may meet Suzuki

Australia ‘exposed’ without carbon plan, says Treasurer

Wayne Swan, Australian Treasurer – country had to set example on carbon tax

Biggest per-capita polluter had to set example

ustralia, the developed world’s biggest per-capita polluter, would have been “increasingly exposed” without passing legislation charging companies for their carbon emissions, the country’s Treasurer Wayne Swan said. More than 90 percent of the countries in the Organization for Economic

Cooperation and Development are introducing a price on carbon emissions or already have one, Swan said yesterday in his weekly economic note. The treasurer, who visited China earlier this month, said the Asian nation has plans for cap-and-trade systems covering more than 200 million people. “Australia would have been increasingly exposed if we hadn’t acted,” Swan said. “If businesses and industries had remained locked into old practices and deferred investments in cleaner, more efficient technology, our economy

would have slipped further behind our international competitors.” Australia on July 1 imposed a fixed rate of A$23 (US$24) a metric ton on about 300 of its largest polluters under the law Prime Minister Julia Gillard pushed through parliament last year. A market-based price is scheduled to begin in 2015. Tony Abbott, the opposition leader, is vowing to repeal the levy if he wins office, calling it a “wrecking ball” for the economy. More than 850 million people by next year will live in a region where polluters must pay

for emissions, Mr Swan said yesterday. Australia burns coal to generate about 80 percent of its power and is the world’s largest exporter of thermal coal. “It’s clear we didn’t have to worry about going early,” the treasurer wrote in his note. “The focus is on keeping up.” But the climate law in Australia may be repealed in 2015 through a so-called double dissolution, a procedure for breaking deadlocks between the upper and lower houses of Australia’s parliament, Citigroup Inc. said in a July 5 report. Bloomberg

July 23, 2012 business daily | 11

asia officials at Hamamatsu, the Press Trust of India reported on July 20, citing officials it didn’t identify. Modi’s visit has fuelled speculation that he would convince Maruti Suzuki to consider a bigger plant than the 250,000-units per year facility it has announced in the state, the news agency said. Maruti’s board in October approved buying as much as 1,400 acres (567 hectares) of land for future expansion in Gujarat, where General Motors Co., Tata Motors Ltd. and Ford Motor Co. have plants.

“Following the incidents of violence and arson at the Manesar facility, the management believes that if employees are asked to report for work at the facility, their lives will be endangered,” Maruti said in an e-mailed statement yesterday. Maruti shares had their biggest drop in almost two years on July 19, falling 8.9 percent following the violence. On July 20, the stock closed up 2.7 percent at 1,147.50 rupees (US$20.74) in Mumbai.

Vietnam approves overhaul plan for state-owned firms

Bloomberg

Growing tensions Gujarat’s Minster of State for Industries Saurabh Patel said media reports that Maruti may shift parts of its Manesar plant to the state was “far from truth and a figment of imagination.” Maruti’s decision to invest in Gujarat was made long ago, he said in a statement on government’s website. Maruti and the workers’ union have blamed each other for the Manesar incident. According to Maruti, the dispute began July 18 after a worker beat up a supervisor on the shop floor. The union then prevented management from taking disciplinary action, blocking managers from leaving the factory after work, Maruti Suzuki said. Workers attacked managers after talks to resolve the dispute failed, with employees setting property on fire and ransacking offices, according to the company. The workers’ union has said it was keen to have a dialogue with the company to resolve the matter and that workers were attacked by bouncers working for Maruti while discussions were on going with guild leaders.

Nguyen Tan Dung, Vietnam’s prime minister

KEY POINTS One manager dead, at least 70 injured at Haryana plant All 3,000 union workers at site charged with murder Factory accounts for 40 pct of Maruti Suzuki India Ltd capacity Violence could deter investors – business federation

ietnamese Prime Minister Nguyen Tan Dung approved proposals to boost the competitiveness and profit margins of state companies, according to a posting on the government website. Selling shares in some state companies will be a “key task” during the period until 2015, according to the restructuring plan. Some companies, such as those classified as important to national defence or economic production, will remain under full government control, according to the proposals. State companies facing financial difficulties are to “focus resources on core business activities” and clarify management responsibilities, the plan states. Strengthening the performance of state companies would require

“decisive measures”, according to an International Monetary Fund report this month that said “the lack of information on state-owned enterprises’ financial position is posing a threat to the financial system, as well as, ultimately, the public fiscal position.” In a separate development yesterday about 150 Vietnamese protesters marched through the capital Hanoi to decry China’s claims over the disputed Spratly and Paracel islands in the South China Sea. The demonstrators, including retirees and parents with toddlers, defied police requests to disperse and circumvented barricades aimed at preventing access to a square where the Chinese embassy is located. Bloomberg

Samsung passes 10 million sales with Galaxy S III South Korean electronics giant sees heavy demand for latest smartphone

outh Korea’s Samsung Electronics, the world’s top smartphone maker, has sold more than 10 million units of its newest Galaxy S III model since its launch about two months ago, a report said yesterday. The company said earlier this month it expected a record operating profit of 6.7 trillion won (US$5.9 billion) in the second quarter, boosted by strong sales of its flagship Galaxy smartphones. The Korean firm, which is battling with Apple’s iPhone and iPad for supremacy in the lucrative smartphone and tablet market, has seen heavy demand for its new Galaxy S III phone, which was introduced in Europe in May. “It appears that it [accumulated sales] has exceeded 10 million units,” said J.K. Shin, head of Samsung’s mobile communications division, according to Yonhap news agency. Mr Shin said last month he expected the global sales of the new phone – available in more than 140 countries – would surpass 10 million by the end of July, including sales of about a million units at home. The third version of the firm’s Galaxy S series offers face-recognition technology and improved voiceactivated controls as well as a more powerful processor. It also has a 4.8-inch (12.2-centimetre) screen that is 22 percent

larger than the previous S2 version, while it can detect eye movements and override the automatic

shutdown if the user is looking at the screen. Samsung shipped 44.5 million smartphones in the first quarter, exceeding the 35.1 million of U.S. arch rival Apple, according to market researcher Strategy Analytics in April.

Samsung, embroiled in a slew of patent suits with Apple in international courts, is pinning its hopes on the S III to further erode its market share before the expected new version of Apple’s iPhone 5 this year. AFP

12 |

business daily July 23, 2012

MARKETS Hang SENG INDEX NAME

NAME

PRICE

Day %

VOLUME

CHINA UNICOM HON

10.74

7.185629

81784265

CITIC PACIFIC

11.54

-0.5172414

65.8

CNOOC LTD COSCO PAC LTD

PRICE

Day %

VOLUME

AIA GROUP LTD

27.9

0.7220217

12309159

ALUMINUM CORP-H

3.18

0.3154574

9653934

BANK OF CHINA-H

2.87

180599832

BANK OF COMMUN-H

5.04

0.5988024

14948465

BANK EAST ASIA

27.25

0.9259259

971604

BELLE INTERNATIO

13.72

-0.1455604

8901232

23.8

0.4219409

13580168

13.04

-1.659125

3250396

HANG SENG BK HENDERSON LAND D

BOC HONG KONG HO CATHAY PAC AIR CHEUNG KONG

102

1.694915

3462915

CHINA COAL ENE-H

6.97

1.161103

35060834

CHINA CONST BA-H

4.95

0.4056795

223483531

CHINA LIFE INS-H

22.05

0.4555809

33182051

CHINA MERCHANT

25.3

0.1980198

1767403

CHINA MOBILE

CLP HLDGS LTD

ESPRIT HLDGS HANG LUNG PROPER

HENGAN INTL

PRICE

Day %

VOLUME

POWER ASSETS HOL

60.45

0.75

3676697

1224036

SANDS CHINA LTD

23.45

-0.4246285

8718222

-0.3030303

2562783

SINO LAND CO

13.18

-0.9022556

5104520

15.94

0.8860759

39988876

SUN HUNG KAI PRO

97.05

0.1547988

4471346

10.38

-0.7648184

4132511

SWIRE PACIFIC-A

91.75

-0.9713977

1162798

9.15

0.5494505

4875221

TENCENT HOLDINGS

232

1.933216

3245999

-0.1848429

4860629

TINGYI HLDG CO

19.6

0.5128205

4184388

107.8

0.1858736

902561

WANT WANT CHINA

9.34

-4.498978

21698392

WHARF HLDG

43.9

1.268743

4900839

45.7

0.550055

2312346

75.95

0.1318392

1190796

HONG KG CHINA GS

17.82

3849327

HONG KONG EXCHNG

103.2

-1.994302

4453708

HSBC HLDGS PLC

66.9

9954128

NAME

MOVERS

3 19650

INDEX 19640.8

88.25

0.7420091

17899091

HUTCHISON WHAMPO

71.3

0.5641749

5019160

CHINA OVERSEAS

17.1

-2.61959

45205197

IND & COMM BK-H

4.22

1.686747

288991713

CHINA PETROLEU-H

7.06

1.875902

60451047

LI & FUNG LTD

14.06

-0.2836879

13029023

HIGH

19641.72

CHINA RES ENTERP

20.8

0.2409639

3584277

MTR CORP

27.05

0.3710575

1307439

LOW

19152.41

CHINA RES LAND

15.1

1.342282

12472928

NEW WORLD DEV

10.06

-0.5928854

10919255

CHINA RES POWER

16.42

-1.203369

3451596

52W (H) 22808.33

PETROCHINA CO-H

9.79

0.8238929

57420950

CHINA SHENHUA-H

28.5

0.3521127

11925092

PING AN INSURA-H

63.45 -0.07874016

6858102

(L) 16170.35

19150

18-Jul

20-Jul

Hang SENG CHINA ENTErPRISE INDEX PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.06

0.6578947

83963410

CHINA PACIFIC-H

26.9

-0.9208103

6223391

AIR CHINA LTD-H

5.32

0.1883239

20452400

CHINA PETROLEU-H

7.06

1.875902

60451047

NAME ALUMINUM CORP-H

NAME

PRICE

DAY %

11.56

-0.6872852

8923797

ZIJIN MINING-H

2.52

11553496

YANZHOU COAL-H

VOLUME

3.18

0.3154574

9653934

CHINA RAIL CN-H

6.98

1.601164

22812925

ZOOMLION HEAVY-H

8.77

-3.837719

22289975

ANHUI CONCH-H

20.05

-1.95599

8289894

CHINA RAIL GR-H

3.45

-0.2890173

26214490

ZTE CORP-H

10.5

3.143418

14508004

BANK OF CHINA-H

2.87

180599832

CHINA SHENHUA-H

28.5

0.3521127

11925092

CHINA TELECOM-H

5.04

0.5988024

14948465

3.75

3.59116

97477319

13.78

0.4373178

1688947

DONGFENG MOTOR-H

10.72

1.901141

11503050

CHINA CITIC BK-H

3.84

1.587302

38483261

GUANGZHOU AUTO-H

5.54

0.3623188

3839761

CHINA COAL ENE-H

6.97

1.161103

35060834

HUANENG POWER-H

5.77

1.943463

18846609

CHINA COM CONS-H

7.13

0.5641749

6678025

IND & COMM BK-H

4.22

1.686747

288991713

CHINA CONST BA-H

4.95

0.4056795

223483531

JIANGXI COPPER-H

17.48

7464229

BANK OF COMMUN-H BYD CO LTD-H

CHINA COSCO HO-H CHINA LIFE INS-H CHINA LONGYUAN-H CHINA MERCH BK-H

3.47

-1.420455

9048750

PETROCHINA CO-H

9.79

0.8238929

57420950

22.05

0.4555809

33182051

PICC PROPERTY &

8.89

-1.002227

11572057

4.9

1.030928

5732000

PING AN INSURA-H

63.45

-0.07874016

6858102

14.08

1.004304

12639926

SHANDONG WEIG-H

8.61

-1.824401

3514430

CHINA MINSHENG-H

6.96

0.5780347

14900898

SINOPHARM-H

21.3

1.428571

2901736

CHINA NATL BDG-H

7.65

-2.173913

44552486

TSINGTAO BREW-H

46.2

0.9836066

1860080

CHINA OILFIELD-H

12.2

-0.1636661

3980000

WEICHAI POWER-H

23.9

0.6315789

1608683

MOVERS

3 9580

INDEX 9570.51 HIGH

9572.96

LOW

9227.74

52W (H) 12651.92 (L) 8058.58

9220

18-Jul

20-Jul

Shanghai Shenzhen CSI 300 NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.49

29811444

DAQIN RAILWAY -A

6.07

-2.096774

70826325

SANY HEAVY INDUS

11.78

-2.725021

26740120

AIR CHINA LTD-A

6.44

-0.9230769

13971184

DATANG INTL PO-A

5.29

-1.489758

4295772

SHANDONG GOLD-MI

32.89

-1.112447

4043379

ALUMINUM CORP-A

6.13

-1.288245

5788729

DONGFANG ELECT-A

16.29

0.742115

7581214

SHANG PHARM -A

11.08

0.7272727

13172331

14.59

-2.342704

12480945

EVERBRIG SEC -A

13.6

-0.729927

8956508

SHANG PUDONG-A

7.61

-1.040312

55545514

10.03

-1.666667

17082006

SHANGHAI ELECT-A

4.32

-1.594533

3706282

2.75

0.3649635

26477372

SHANXI LU'AN -A

20.99

-1.593999

9602140

SHANXI XINGHUA-A

36.91

-0.2971367

2100784

ANHUI CONCH-A

NAME

BANK OF BEIJIN-A

7.36

-1.735648

13905863

GD MIDEA HOLDING

BANK OF CHINA-A

2.74

-0.7246377

17831699

GD POWER DEVEL-A

BANK OF COMMUN-A

4.29

-0.9237875

37408090

GF SECURITIES-A

15.14

-3.443878

22111878

BANK OF NINGBO-A

9.91

-0.8008008

13581207

GREE ELECTRIC

21.49

-1.149954

9651469

SHANXI XISHAN-A

15.1

-2.517753

9451567

BAOSHAN IRON & S

4.17

-0.2392344

13396358

GUANGHUI ENERG-A

13.44

-4

17645088

SHENZ DVLP BK-A

14.85

-1.131824

10673403

BYD CO LTD -A CHINA CITIC BK-A

16.72

-3.852789

5534076

GUIZHOU PANJIA-A

17.6

-2.058987

9548375

SHENZEN OVERSE-A

6.4

-1.081917

23931426

3.85

-0.5167959

7702550

HAITONG SECURI-A

9.92

-1.293532

29656617

SUNING APPLIAN-A

6.85

-6.164384

147627743 1381270

HANGZHOU HIKVI-A

27.15

-0.4035216

1675281

TSINGTAO BREW-A

36.55

-0.08201203

HENAN SHUAN-A

63.32

-0.9076682

937198

WEICHAI POWER-A

25.71

-3.88785

4910238

14569493

HONG YUAN SEC-A

19.28

1.741425

27030280

WULIANGYE YIBIN

35.96

-1.614227

23144568 4014234

CHINA CNR CORP-A

3.79

-0.2631579

18299384

CHINA COAL ENE-A

7.73

-0.6426735

5650673

CHINA CONST BA-A

4.01

-0.4962779

CHINA COSCO HO-A

4.55

-1.727862

8661458

HUATAI SECURIT-A

10.42

-1.232227

11034503

XIAMEN TUNGSTEN

41.83

-1.922626

CHINA CSSC HOL-A

22.28

-1.893439

3051843

HUAXIA BANK CO

8.68

-1.026226

13350751

YANGQUAN COAL -A

15.51

-1.147228

9249064

CHINA EAST AIR-A

4.36

-1.133787

13271803

IND & COMM BK-A

3.77

-0.7894737

18135824

YANTAI CHANGYU-A

62.7

-0.4761905

1091087

CHINA EVERBRIG-A

2.75

-0.3623188

17639140

INDUSTRIAL BAN-A

12.18

-1.056052

36609307

YANTAI WANHUA-A

13.46

-0.5908419

5271263

38.99

-1.788413

23217649

YANZHOU COAL-A

-1.554404

3601249 1914115

19.88

-0.6

12256725

INNER MONG BAO-A

CHINA MERCH BK-A

9.99

-1.089109

48634283

INNER MONG YIL-A

19.4

-0.9193054

12984843

YUNNAN BAIYAO-A

59.5

-0.7175038

CHINA MERCHANT-A

11.52

-1.454234

9482490

INNER MONGOLIA-A

4.94

-2.371542

32934438

ZHONGJIN GOLD

21.1

-0.752587

4441487

CHINA MERCHANT-A

23.72

-2.94599

12182532

JIANGSU HENGRU-A

30.41

1.366667

3962085

ZIJIN MINING-A

3.74

-0.5319149

26612930

CHINA MINSHENG-A

5.92

-0.5042017

40600009

JIANGSU YANGHE-A

142

-1.464159

1443446

ZOOMLION HEAVY-A

CHINA NATIONAL-A

6.18

0.1620746

24668533

JIANGXI COPPER-A

22.62

-1.394943

5585214

ZTE CORP-A

CHINA OILFIELD-A

17.69

-1.393534

10575024

JINDUICHENG -A

12.45

-1.891253

3226730

INNER MONG YIL-A

CHINA PACIFIC-A

23.31

-1.395939

15304955

JIZHONG ENERGY-A

15.08

-2.457956

11714434

6.08

-0.6535948

23825611

KANGMEI PHARMA-A

15.55

2.034121

11349688

243.08

-1.271272

2605464

41.6

-0.5736138

4814251

CHINA LIFE INS-A

CHINA PETROLEU-A CHINA RAILWAY-A

4.76

-0.6263048

20027098

KWEICHOW MOUTA-A

CHINA RAILWAY-A

2.64

-1.123596

22550962

LUZHOU LAOJIAO-A

CHINA SHENHUA-A

22.25

-1.766004

6652332

METALLURGICAL-A

2.32

-1.276596

15419051

2.55

1.190476

35692116 56987926

MOVERS

9.36

-6.4

52706187

11.28

0.5347594

22536713

21.7

0.2772643

18120731

240

10 2445

INDEX 2398.455

CHINA SHIPBUIL-A

4.76

0.4219409

26236653

NINGBO PORT CO-A

CHINA SOUTHERN-A

4.51

-2.169197

25379206

PANGANG GROUP -A

4.07

-2.631579

CHINA STATE -A

3.23

30728838

PETROCHINA CO-A

8.98

-0.2222222

9511075

HIGH

2441.48

CHINA UNITED-A

3.74

4.469274

209650822

PING AN INSURA-A

45.97

0.06530257

18708427

LOW

2375.09

CHINA VANKE CO-A

9.3

-1.483051

39410690

POLY REAL ESTA-A

11.35

-1.816609

52607235

CHINA YANGTZE-A

6.54

-1.654135

12171762

QINGDAO HAIER-A

11.11

-1.594331

8198943

CITIC SECURITI-A

12.82

-0.927357

38467007

QINGHAI SALT-A

34.18

0.4703116

5981557

CSR CORP LTD -A

4.36

0.6928406

23405614

SAIC MOTOR-A

12.68

-1.092044

12081556

52W (H) 3083.191 (L) 2254.567

2375

18-Jul

20-Jul

FTSE TAIWAN 50 INDEX NAME

PRICE DAY %

Volume

NAME

PRICE DAY %

Volume

NAME

PRICE DAY %

ACER INC

-2.173913

23722203

FORMOSA PLASTIC

80.4

1.005025

5989494

TAIWAN MOBILE CO

ADVANCED SEMICON

24 -0.2079002

12011888

FOXCONN TECHNOLO

111

5526404

TPK HOLDING CO L

0.4862237

5762005

TSMC

89.6

1.472254

17997772

192.5 -0.2590674

392619

ASIA CEMENT CORP ASUSTEK COMPUTER AU OPTRONICS COR

37.4

0.1338688

1618436

FUBON FINANCIAL

270

0.5586592

1875907

HON HAI PRECISIO

10.35

34920231

HOTAI MOTOR CO

Volume

96.5

343.5

0.2919708

4518101 4197450

76.7

-1.032258

48482861

UNI-PRESIDENT

48.75

-0.102459

5553434

UNITED MICROELEC

12.55

0.4

31339832

35.4

CATCHER TECH

172.5

-1.709402

8866711

HTC CORP

300

1.010101

5739408

WISTRON CORP

0.4255319

8951247

CATHAY FINANCIAL

29.15

0.6908463

5083632

HUA NAN FINANCIA

16.7

0.9063444

3613444

YUANTA FINANCIAL

13.65 -0.3649635

7355975

CHANG HWA BANK

16.05

0.3125

5057871

LARGAN PRECISION

590

0.5110733

1031064

YULON MOTOR CO

49.1 -0.8080808

2534478

CHENG SHIN RUBBE

79.3

3205309

LITE-ON TECHNOLO

38.15

1.059603

2602002

CHIMEI INNOLUX C

10.2

-1.923077

31612390

MEDIATEK INC

250

0.8064516

3634229

CHINA DEVELOPMEN

7.06 -0.2824859

33631199

MEGA FINANCIAL H

23.15

1.091703

13082625

CHINA STEEL CORP

27.2

0.5545287

15697655

NAN YA PLASTICS

55.4

0.9107468

2788891

PRESIDENT CHAIN

157.5

0.6389776

581817

75.6

0.265252

5920932

CHINATRUST FINAN

17.7

18571141

CHUNGHWA TELECOM

89.6

5143778

QUANTA COMPUTER

27.15

0.929368

11218445

SILICONWARE PREC

98.1

6.399132

14203358

SINOPAC FINANCIA

32.95

1.07362

4435394

SYNNEX TECH INTL

71 -0.2808989

4430050

TAIWAN CEMENT

COMPAL ELECTRON DELTA ELECT INC FAR EASTERN NEW FAR EASTONE TELE FIRST FINANCIAL

29.3 -0.6779661 11.75

9875242

69.2 -0.4316547

2548354

0.4070556

6 4910

INDEX 4908.84

2980489

0.4273504

MOVERS

6998471

0.2785515

7605816

TAIWAN COOPERATI

17.95

0.5602241

3093622

FORMOSA CHEM & F

77.8

0.7772021

2105595

TAIWAN FERTILIZE

67.3

3.379416

8533617

FORMOSA PETROCHE

83.5

0.1199041

450247

TAIWAN GLASS IND

27.7

0.7272727

1738371

HIGH

4908.84

LOW

4803.56

52W (H) 5960.61 (L) 4643.05

4800

18-Jul

20-Jul

July 23, 2012 business daily | 13

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

MElCo CrowN ENtErtAINMENt

MGM CHINA HolDINGS 27.4

19.5

11.30

27.2 11.25

27.0

19.4

26.8

11.20

26.6

19.3

11.15

26.4 Max 19.48

Average 19.322

Min 19.22

19.2

last 19.28

Max 27.4

SANDS CHINA ltD

Average 23.572

Max 23.8

Average 27.060

Min 26.25

Min 23.3

last 23.45

14.4

23.7

14.3

23.6

14.2

23.5

14.1

23.4

14.0

PRICE

Average 14.043

DAY %

YTD %

(H) 52W

(L) 52W

91.83

-1.226202001

-7.120461212

110.8699951

77.69999695

BRENT CRUDE FUTR Sep12

106.83

-0.899814471

1.820434617

124.1999969

88.90999603

GASOLINE RBOB FUT Aug12 GAS OIL FUT (ICE) Sep12 NATURAL GAS FUTR Aug12 HEATING OIL FUTR Aug12

294.3

0.139507979

9.527353926

326.7099857

243.0099964

918.75

-0.487408611

2.225312935

1046.5

798.5

3.081

2.734244748

-5.952380952

4.850000381

2.174999952

292.43

-0.770274856

2.834335549

332.949996

250.8399963

Gold Spot $/Oz

1584.53

-0.0013

1.2537

1921.18

1522.75

Silver Spot $/Oz

27.3113

-0.5191

-1.8814

44.2175

26.085

Platinum Spot $/Oz

1414

-0.5437

1.3984

1915.75

1339.25

Palladium Spot $/Oz

576

-1.104

-11.8592

848.37

537.54 1832.25

LME ALUMINUM 3MO ($)

1892

-2.674897119

-6.336633663

2675.25

LME COPPER 3MO ($)

7545

-2.393272962

-0.723684211

9905

6635

1839.5

-2.491386165

-0.298102981

2539.5

1718.5

3MO ($)

LME NICKEL 3MO ($)

Min 13.98

last 14.02

MAJORS

ASIA PACIFIC

CROSSES

15950

-0.654001869

-14.7514698

25195

15770

0.25814779

3.359946773

13.95499992

795.75

2.215799615

35.73560768

799

499

WHEAT FUTURE(CBT) Sep12

943.25

0.882352941

34.41396509

944.75

606.75

SOYBEAN FUTURE Nov12

1686.25

2.05779997

40.02491177

1691

1115.75

COFFEE 'C' FUTURE Sep12

186.95

-1.05848108

-20.19210245

288.8500061

150.0999908

CROWN LTD

16.5 16.4 16.3 16.2 Max 16.52

Average 16.446

last 16.4

Min 16.22

Dec12

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

DAY %

1.0378 1.5623 0.988 1.2157 78.49 7.9897 7.7563 6.3738 55.3275 31.67 1.256 29.966 41.863 9458 81.457 1.20106 0.77828 7.8178 9.773 95.44 1.03

YTD %

-0.5081 -0.3953 -1.1943 -1.1867 0.1529 -0.01 -0.0039 -0.0141 -0.3479 -0.0947 -0.1115 0.0167 -0.2699 0.0211 0.658 -0.0008 0.7799 0.2392 0.5812 1.3307 0

(H) 52W

1.6554 0.5147 -5.0506 -6.2032 -2.013 0.1239 0.1431 -1.2363 -4.0893 -0.3789 3.2325 1.0445 4.7225 -4.1129 -3.7136 1.3097 7.081 4.0472 5.9245 4.4216 0.0097

(L) 52W

1.1081 1.6618 0.9888 1.4549 84.18 8.0449 7.8113 6.4483 57.3275 31.96 1.3199 30.716 44.35 9662 88.637 1.24736 0.88861 9.3616 11.6793 114.18 1.0311

0.9388 1.5235 0.7071 1.2144 75.35 7.9823 7.7526 6.2769 43.855 29.63 1.1992 28.764 41.57 8458 72.057 1.00749 0.77712 7.7719 9.7216 95.35 1.0288

MACAU RELATED STOCKS NAME

PRICE

ARISTOCRAT LEISU

(H) 52W

(L) 52W

2.7

DAY % YTD % 5.882353

22.72727

3.25

1.88

VOLUME CRNCY 3155231

8.49

-1.048951

4.944374

9.29

7.45

908164

SUGAR #11 (WORLD) Oct12

23.92

2.88172043

4.774419623

26.03999901

19.23999977

AMAX HOLDINGS LT

0.068

4.615385

-21.83908

0.119

0.055

10726000

COTTON NO.2 FUTR Dec12

72.94

0.426807105

-16.96265938

102.25

64.61000061

BOC HONG KONG HO

23.8

0.4219409

29.34783

24.45

14.24

13580168

CENTURY LEGEND

World Stock MarketS - Indices NAME

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

12822.57

-0.9332198

4.951977

13338.66016

10404.49

NASDAQ COMPOSITE INDEX

2925.3

-1.368893

12.28913

3134.17

2298.89

FTSE 100 INDEX

5651.77

-1.092368

1.42653

5989.07

4791.01

DAX INDEX

6630.02

-1.899417

12.40465

7382.8

4965.8

NIKKEI 225

8669.87

-1.428904

2.537098

10255.15

8135.79

0.242

5.217389

0.38

0.204

CHEUK NANG HLDGS

3.02

-0.330033

7.857145

3.95

2.3

25000

CHINA OVERSEAS

17.1

-2.61959

31.74114

19.16

9.99

45205197

CHINESE ESTATES

8.97

-28.24

13.68

8.3

3000

CHOW TAI FOOK JE

9.2

-0.1085776

-33.90805

15.16

8.55

4717800

EMPEROR ENTERTAI

1.39

-2.112676

25.22522

1.84

0.97

825000

-1.960784

138.0952

1.09

0.3

3216000

GALAXY ENTERTAIN

19.28

0.1038422

35.39326

24.95

8.69

5340242

HANG SENG BK

107.8

0.1858736

16.98318

124.3

84.4

902561

HOPEWELL HLDGS

22.35

12.53776

24.903

18.56

645584

HSBC HLDGS PLC

66.9

13.38983

78.6

9954128

HUTCHISON TELE H

3.76

0.5347594

25.75251

3.86

2.53

828000

LUK FOOK HLDGS I

17.18

2.874251

-36.60517

46.15

14.7

2190000

FUTURE BRIGHT

HANG SENG INDEX

19640.8

0.4179651

6.544345

22808.33

16170.35

CSI 300 INDEX

2398.455

-1.066979

2.247184

3083.191

2254.567

TAIWAN TAIEX INDEX

7164.68

0.2253598

1.309376

8819.929688

6609.11

MIDLAND HOLDINGS

KOSPI INDEX

1822.93

-0.1539067

2174.73

1644.11

NEPTUNE GROUP

S&P/ASX 200 INDEX

4199.124

3.514393

4612.2

3765.9

NEW WORLD DEV SANDS CHINA LTD

JAKARTA COMPOSITE INDEX

11.10

16.6

PRICE

15.535

AGRICULTURE ROUGH RICE (CBOT) Sep12 CORN FUTURE

last 11.16

13.9 Max 14.32

WTI CRUDE FUTURE Sep12

LME ZINC

Min 11.14

wyNN MACAu ltD

23.8

23.3

Average 11.191

CURRENCY EXCHANGE RATES

NAME

METALS

Max 11.3

SJM HolDINGS ltD

Commodities ENERGY

26.2

last 27.4

-0.1799276

MELCO INTL DEVEL

5.63

-1.22807

-2.426343

10.76

4.3

605000

11.16

-0.3571429

16.34509

17.183

7.6

2009186

4.23

4.444444

6.979002

5.217

2.887

5692000

0.153

-10

37.83784

0.205

0.08

24671000

10.06

-0.5928854

60.70287

10.96

6.13

10919255

23.45

-0.4246285

6.833709

33.05

14.9

8718222

SHUN HO RESOURCE

1.13

1.32

0.82

SHUN TAK HOLDING

2.73

0.3676471

6.67695

4.668

2.241

1698715 9379225

MGM CHINA HOLDIN

4081.201

-0.3660714

6.782039

4234.734

3217.951

FTSE Bursa Malaysia KLCI

1643

-0.09728809

7.33441

1647.94

1310.53

NZX ALL INDEX

772.243

-0.5728139

5.815658

806.015

700.441

SJM HOLDINGS LTD

14.02

-2.094972

12.11035

20.711

10.079

PHILIPPINES ALL SHARE IX

3459.02

0.4116301

13.59522

3527.48

2695.06

SMARTONE TELECOM

16.12

0.6242197

19.94048

18.5

9.8

519638

HSBC Dragon 300 Index Singapor

584.24

0.98

17.71

16.5

0.7326007

-15.38462

27.48

14.807

8990439

STOCK EXCH OF THAI INDEX

1208.55

-0.3635734

17.87053

1247.72

843.69

HO CHI MINH STOCK INDEX

424.47

-0.912741

20.74243

492.44

332.28

Laos Composite Index

1005.6

0.902058

11.80041

1083.92

876.33

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

WYNN MACAU LTD ASIA ENTERTAINME

3.45

0.877193

-41.32653

10.8692

3.21

108190

BALLY TECHNOLOGI

46.75

-1.204565

18.17492

49.32

24.74

430583

BOC HONG KONG HO

3.07

6.968641

28.06675

3.15

1.81

500

GALAXY ENTERTAIN

2.4225

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business daily July 23, 2012

Opinion

Growing up in the eurozone Stefano Micossi

Director-General of Assonime, a business association and private think tank in Rome, Chairman of the board of CIR Group, and a member of the board of the Centre for European Policy Studies

ually, as Europe moves to a fullyfledged federal union. Whether the eurozone will survive in the meantime will be determined by the European Council’s capacity to establish intermediate arrangements that can halt the crisis and restore trust among its members.

German burden

rapid and large increase of government debt has been a general phenomenon in the advanced countries since the 2007-09 crisis: for the first time, the average debt/GDP ratio for OECD countries has surpassed 100%. Fiscal consolidation will weigh on growth prospects for two generations to come, and the welfare state as we have known it in Europe since World War II will have to be transformed, especially given a rapidly aging population. But the eurozone debt crisis has distinctive features. Most importantly, while the average debt/GDP ratio is no higher than it is in other advanced countries, and consolidation efforts started earlier, the eurozone has been mired in a severe crisis of confidence for the past two years. This points to a systemic dimension of the crisis that cannot be reduced to profligate behavior by fiscal sinners. Indeed, the Greek crisis exposed three main flaws in the monetary union itself. First, the system lacked effective arrangements to align fiscal and other economic policies. As long as enforcement of fiscal discipline is entrusted to an intergovernmental body, the problem is bound to reappear, limiting the credibility of common budgetary rules. Moreover, financial markets underpriced private and sovereign credit risks, in the implicit belief that no one would fail, and that all debts would somehow be made whole, implying weak market discipline on borrowers. Finally, once the crisis hit, leading to a re-pricing of risks in financial markets, the need to avoid an economic and

the trade surplus has shrunk dramatically in recent months. Over the past two years, fundamental changes in the eurozone’s economic governance have aimed at rectifying the monetary union’s founding flaws. And, along the way, an intergovernmental process has become communitarian. Key powers over the implementation Fixing flaws of common policy guidelines have That left individual eurozone mem- been entrusted to the European bers exposed to brutal pressure by Commission, and the European financial markets at a time when Council has limited its own ability excessive private debt was turned to reject Commission recommendainto unsustainable public debt. Sud- tions by requiring a qualified majordenly, the eurozone had become a ity to change them. Strong ecostraightjacket. nomic-goverAnd so it has renance rules, mained: budgets however, will are cut, growth not suffice. A falters, and periphGermany must be fully functionery countries must ing monetary engineer substan- persuaded that without union also retial real exchangequires a cenrate devaluations its contribution in tral bank that to regain competireviving growth is free to act as tiveness and close required to contheir external defifront liquidity cits. Core coun- and correcting and confidence tries, meanwhile, external imbalances, shocks, some argue that they mutualization can do little to the eurozone faces of government strengthen aggredebts, and cengate demand and prolonged depression tralized control relieve pressure over fiscal polon their partners, and certain collapse icy. Moreover, even as the peit must have riphery’s agony is centralized dragging the core banking superinto recession, owing to its dependence on peripheral visory policies, with strong powers export markets. And, indeed, recent to manage bank crises and to liquidata point to a rapidly worsening eco- date banks that cannot be rescued. nomic environment in Germany, where All of this can be achieved only gradfinancial meltdown compelled governments to support aggregate demand and make private liabilities whole. But the disconnection between centralized monetary and decentralized fiscal powers de facto impeded the full use of monetary instruments to meet monetary and financial shocks.

At their meeting at the end of June, European leaders acknowledged for the first time the multiple dimensions of the crisis, accepting that austerity – putting everyone’s house in order – will not suffice. Accordingly, new joint policy initiatives will address economic growth, banking union, and liquidity. Moreover, European leaders have placed these new policies within a coherent longer-term framework that may also include “the issuance of common debt.” Likewise, the European Council has agreed on a new “Compact for growth and jobs” that identifies a specific European dimension of growth policies, mainly integration of energy, transport, communications, and services, together with higher infrastructure investment. What is notably missing is recognition of the need for greater flexibility on fiscal-consolidation efforts. As the Commission has requested, countries with stronger fiscal positions should consider slowing their consolidation efforts in order to avoid aggravating the recession. But, in order to preserve investors’ confidence, some eurozone countries must strike a difficult balance between austerity and overkill, which would have been facilitated had the European Council issued a clear statement that letting automatic stabilizers work, while remaining on track with structural budget targets, fully complies with European Union obligations. Moreover, a greater share of the adjustment burden must fall on Germany. Recent fairly generous wage agreements in Germany will help, but are not enough; there is also a need to boost domestic demand. More aggressive liberalization of the bloated banking system, network services (especially in energy and transport), and public procurement may contribute significantly over time to raising domestic investment and incomes. The sizeable investments required to make up for the loss of nuclear energy may contribute more immediate stimulus. All of this should not be seen as a concession, but as part of the obligations undertaken by eurozone governments to address excessive imbalances. Now more than ever, Germany must be persuaded that without its contribution in reviving growth and correcting external imbalances, the eurozone faces prolonged depression and certain collapse. © Project Syndicate

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

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July 23, 2012 business daily | 15

OPINION

Roll call of unscrupulous bankers wires is unacceptably long Business Leading reports from Asia’s best business newspapers

Deborah Solomon Paula Dwyer Bloomberg View editors

Straits Times Heineken NV launched a S$5.1 billion (US$4 billion) bid for Asia Pacific Breweries on Friday, responding quickly to a surprise move on the South-east Asian beer maker by a Thai billionaire and his family. Heineken offered to buy Fraser and Neave’s stake in Asia Pacific Breweries and the ordinary shares it does not already own, putting a S$50 per share bid on the table, the Dutch brewer said in a statement. The ownership interests in one of Asia Pacific’s largest breweries and the maker of Tiger beer is a complicated mix of companies.

Nikkei The number of foreign visitors to Japan came to 686,600 in June, an increase of 1.4 percent from June 2010 — before the earthquake disaster dampened tourism — according to figures released Friday by the Japan National Tourism Organization. The figure, a record for June, marks the first time monthly tourism figures have topped pre-earthquake levels. By country, China, Thailand, Indonesia, Malaysia and Vietnam sent record numbers of visitors to Japan last month. Visitors from Thailand jumped nearly 40 percent from 2010, after the government began issuing multiple-entry visas to Thai nationals on June 1.

Jakarta Globe Indonesia’s central bank has identified 10 commercial banks that could be at risk of being acquired or merged with another, based on its new guidelines.   The governor of Bank Indonesia said on Friday that those banks — which he declined to identify — did not meet the standards of being financially sound and having corporate governance under its new ownership rules.   While the central bank is asking the owners of the small lenders to improve their standards, he said that the new rule would “by natural selection” force a degree of consolidation to the country’s banking system.

Business Standard Reeling under debts, telecom companies have approached the Reserve Bank of India (RBI), seeking relaxation in external borrowing norms. The Association of Unified Telecom Service Providers of India, an industry association representing CDMA operators, has written to the Department of Economic Affairs, saying telecom operators should be allowed to refinance the rupee loans they had secured to pay for 3G telecom spectrum with external commercial borrowings (ECBs) by extending the initial one-year window by another six months”. RBI had given a one-time relaxation to prospective auction winners to arrange ECBs within a year to refinance their rupee debts.

f the past few weeks are any indication, hubris, deception and amorality seem to permeate the financial services industry. The latest example came Tuesday when U.S. lawmakers detailed a pattern of deceit and illicit activity at HSBC Holdings Plc, Europe’s biggest bank. For years, the bank looked the other way as terrorists, drug cartels and other criminals used its far-flung operations as a conduit into the U.S. financial system, according to a Senate report. As Leopoldo Barroso, a top HSBC anti-moneylaundering official told the bank upon his departure in 2008, the institution’s standard practice was to pursue “profit and targets at all costs” and it was “only a matter of time” before it faced criminal charges. The roll call of alleged malfeasance at other banks is long. Investigators in Europe, Asia and the U.S. are piecing together a widespread conspiracy by as many as 16 banks to conceal the extent of their problems during the financial crisis — and boost traders’ profits — by manipulating the globally important London interbank offered rate, known as Libor. The probe has already snared Barclays Plc, which paid about US$450 million in fines and civil penalties. JPMorgan Chase & Co. just reported losses of at least US$5.8 billion from risky credit-derivatives trades that may have been intentionally mismarked by employees in its London office. Last week, the chairman of Peregrine Financial Group Inc. attempted suicide, leaving a note detailing two decades of embezzlement.

Too voluminous Unscrupulous behaviour during and after the financial crisis, including the marketing of dubious mortgage-backed

securities to unsuspecting investors and improper home foreclosures, is almost too voluminous to list. In each case, bankers put profits ahead of probity while regulators either ignored or failed to spot red flags. For the sake of the financial industry — not to mention the millions of people who work in it and the extent to which robust economies depend on it — banks and regulators will need finally to take some meaningful steps toward reform. If they don’t, what little confidence remains in the system will evaporate. The good news is that regulators don’t need new tools, they simply need to make better use of those already at their disposal, including new powers in the 2010 DoddFrank financial reform law. Prosecutors should dust off anti-fraud statutes. Officials who may be tempted to point to the U.K.’s light-touch method of regulation as superior to the U.S. system should take note of the lawlessness that can result. And U.S. lawmakers should stop trying to starve regulatory agencies of the money they need to hire experts and acquire new technology to put Dodd-Frank into practice faster. Perhaps most important, regulators must stop treating the companies they oversee

No one can demand morality. But lawmakers and regulators can stop enabling bad behaviour

like their buddies. A 335page report by the Senate Permanent Subcommittee on Investigations highlights a decade of compliance failures by HSBC and accuses its primary regulator, the Office of the Comptroller of the Currency, of failing to sufficiently deal with repeated violations of the bank’s money-laundering controls. Problems at the bank were no secret: a 2005 Bloomberg Markets article documented HSBC’s ties to Iran, Libya, Sudan and Syria. Last month, the OCC acknowledged it was unaware of the disastrous JPMorgan trades, even though 65 of its examiners were on-site at the bank. And the U.S. Commodity Futures Trading Commission failed to spot problems at Peregrine, despite reviewing its operations at least twice since 2006, according to a Bloomberg News report. CFTC Chairman Gary Gensler told lawmakers on Tuesday “the system failed.”

Public trust Banks should care about the

public trust. Anger toward Wall Street continues to build, leading to increasing calls to break up the big banks. If for no other reason than self-preservation, financial institutions should create zero-tolerance policies for improper behavior and begin rewarding, rather than punishing, whistle-blowers. If history is a guide, banks won’t do this voluntarily. It’s up to regulators to crack down. Criminal prosecutions would also go a long way toward deterring people from breaking laws in search of bigger profits and fatter bonuses. Shareholders, too, should demand change; they ultimately pay the cost for risky behavior that results in stiff penalties or a bank’s collapse. No one can demand morality. But lawmakers and regulators can stop enabling bad behavior. Putting in place (or not blocking) the rules required by DoddFrank, including the Volcker rule, to prevent self-dealing and abuse of taxpayer money will go a long way toward redirecting Wall Street’s moral compass. Bloomberg View

16 |

business daily July 23, 2012

CLOSING Myanmar president visits Thailand

South Korea eases mortgage lending

Myanmar’s president yesterday made his first official trip to Thailand since taking power in a visit likely to focus on economic ties between his reforming nation and its more affluent neighbour. Thein Sein arrived in Bangkok for a three-day trip that will include talks with Thai prime minister Yingluck Shinawatra today expected to cover development and infrastructure investment for impoverished Myanmar. The visit is a chance to strengthen ties, “particularly those in support of Myanmar’s ongoing economic reform and development efforts”, according to a statement from Thailand’s foreign ministry.

South Korea will ease a rule on mortgage lending to stimulate the realestate market and boost consumption as faltering global demand hurts the export-reliant economy, an adviser to president Lee Myung Bak said. “There are many irrational aspects to the debt-to-income ratio limit” banks apply to residential mortgage borrowers, Kim Dae Ki told reporters yesterday in Seoul. Home prices in greater Seoul have stalled after a 66 percent jump in 1998-2008 raised household debt to record levels and triggered government measures to cool the market.

Rupert Murdoch quits boards of British papers Departure of tycoon as empire is split reignites talks of possible sale of British newspapers

ews Corp’s Rupert Murdoch has stepped down from a string of boards overseeing the Sun, Times and Sunday Times newspapers in Britain, the company said in an internal memo on Saturday. The company described the news as a “corporate housecleaning exercise” linked to the announcement in June that News Corp would split into two separate companies: a smaller publishing division and a much larger entertainment and TV group. But the news is also likely to reignite speculation that News Corp could be preparing to sell the titles, following a phone hacking scandal at the now defunct mass-circulation News of the World that has damaged Mr Murdoch’s reputation in Britain. The revelations of sustained criminality prompted an influential parliamentary committee in May to describe Mr Murdoch as unfit to run a major company. James Murdoch, who was chairman of the British newspaper arm News International when the revelations emerged, has already quit the British newspapers and moved to the United States. “Last week, Mr. Murdoch stepped down from a number of boards, many of them small subsidiary boards, both in the UK and U.S. This is nothing more than a corporate housecleaning exercise prior to

the company split,” a spokeswoman said. As part of the plan, the US$53 billion (423.4 billion patacas) media conglomerate will be split into two publicly traded companies, with the Murdoch family retaining control of both. The publishing business will consist of newspapers in the United States, United Kingdom and Australia, as well as book, education and marketing assets. The media and entertainment company will have film and TV assets. Murdoch is slated to be chairman of both entities and chief executive officer of entertainment when the deal closes in about a year. “I wanted to let you know that Rupert Murdoch has resigned as director of a number of companies, including NI Group Limited, known to most of you as News International, and Times Newspapers Holdings Limited,” Tom Mockridge, the head of News International, said in the email, seen by Reuters. “As you may be aware, Rupert resigned from a number of UK boards, including News Group Newspapers and Times Newspapers Limited, some time ago. He has also stepped down from more than a dozen boards of companies with interests in the U.S., Australia and India.” Mockridge said Mr Murdoch remained fully committed to the

business as chairman of what would become the largest newspaper and digital publishing group in the world. Speculation had risen in the last year that News Corp could seek to sell the British papers, following pressure from shareholders over a scandal that also forced the group to cancel its planned acquisition of the whole of the lucrative payTV group BSkyB, which would have been the biggest deal in News Corp’s history.

The announcement in June to split the business was seen as a clear signal that the group was distancing itself from its newspaper roots. Operating income at News Corp.’s publishing unit dropped 32 percent from fiscal 2008 to 2011, according to data compiled by Bloomberg. A shift to the Web has cut industry advertising and circulation revenue, while News Corp.’s entertainment units increased profit by 13 percent. Reuters /Bloomberg

Super rich hold trillions in havens Estimates of money stashed offshore by world’s 100,000 wealthiest people almost tripled in five years

ich individuals and their families had as much as US$32 trillion (255.6 trillion patacas) of hidden financial assets in offshore tax havens at the

end of 2010, representing up to US$280 billion in lost income tax revenues, according to research published yesterday. The study estimating the extent of

global private financial wealth held in offshore accounts – excluding non-financial assets such as real estate, gold, yachts and racehorses - puts the sum at between US$21 and $32 trillion. The estimate is almost three times the organization’s last estimate of US$11.5 trillion in 2005. Fewer than 100,000 people own US$9.8 trillion of offshore assets, according to the research. The research was carried out for pressure group Tax Justice Network, a U.K.-based organization which campaigns against tax havens, by James Henry, former chief economist at consultants McKinsey & Co. He used data from the World Bank, International Monetary Fund, United Nations, central banks and company reports. The report also highlights the

impact on the balance sheets of 139 developing countries of money held in tax havens by private elites, putting wealth beyond the reach of local tax authorities. The research estimates that since the 1970s, the richest citizens of these 139 countries had amassed US$7.3 to $9.3 trillion of “unrecorded offshore wealth” by 2010. The amount held offshore means those countries with external debts of US$4.1 trillion at the end of 2010 would be creditors to the world, if the cross- border holdings of their wealthiest citizens were taken into account, according to the research. Private wealth held offshore represents “a huge black hole in the world economy,” Mr Henry said in a statement. “The lost tax revenue implied by our estimates is huge.” Reuters/Bloomberg