North West docked but still kicking Ferry operator North West Express Limited suspended its trips to Hong Kong’s Tuen Mun pier as Hong Kong authorities grounded its last standing vessel. The company denies financial problems and wants to resume operations in two weeks. Authorities want a report within 10 days.
Year I - Number 67 Tuesday July 3, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00
Page 6
www.macaubusinessdaily.com
Banking on Hengqin
island could be local lenders’ base M
acau banks could be beneficiaries of the latest round of trade liberalisation between the city and mainland China. Up to three of them may be able to set up operations in Hengqin New Area – the special economic zone being set up just over the border alongside the extension to the University of Macau campus. The possibility is raised under the ninth supplement to the Closer Economic Partnership Arrangement, known as CEPA – a triangular economic initiative between Macau, the mainland and Hong Kong. The updated rules come into effect next year. Under the new terms, Hengqin lowers its capital requirement for Macau banks to open a branch there. MSAR banks now only need to
have US$4 billion (32 billion patacas) end-of-year total capital instead of US$6 billion to be able to operate on the island. Secretary for Economy and Finance, Francis Tam Pak Yuen, said there are at least three banks that fulfil the requirements to open in Hengqin. However he did not name which three. Another measure allows Macau companies to open entertainment complexes in mainland China, but “it does not include casinos”, said Vice minister of Commerce, Jiang Yaoping yesterday at the CEPA signing ceremony. More on page 3
Casino revenue rebounds in June
HANG SENG INDEX 19590
After hitting a three-year low in May, casino revenue growth picked up last month but was still below market expectations, adding fuel to forecasts of an industry slowdown. Union Gaming analyst Grant Govertsen says typhoon ‘Doksuri’ was partially to blame but he expects even slower growth in July and August, before a rebound in September.
19490 19390 19290
Page 2 19190 19090
SJM told: ‘sort’ New Century feud
18990
June 29
HSI - Movers
A
battle for control of a Taipa casino-hotel took a new twist yesterday when a spokeswoman for one of the contenders – veteran Macau junket operator Ng Wai – said the hotel is being closed to new guests. On June 24 Mr Ng was hospitalised after allegedly being attacked by six men wielding sticks and hammers as he dined with a female companion. In a chaotic press conference called in Mr Ng’s name yesterday, it was claimed the hotel operation is being suspended to protect Macau’s image as a tourist city after “some gangsters” had been sent to the property by Chen Mei Huan – described by industry sources as Mr Ng’s former companion as well as business partner. A woman, claiming to be Ms Chen’s sister, interrupted the conference and said the claims were lies. Now the Macau authorities seem to be losing patience. The Gaming Inspection and Coordination Bureau instructed casino operator SJM, that licenses the casino on the premises, to handle the matter “properly”, reported local broadcaster TDM’s Chinese-language TV news. Pages 4 & 5
Name
Taiwan dream over for Grand Waldo The biggest shareholder of Cotai casino Grand Waldo, Get Nice Holdings Limited, has terminated a deal with Shin Kong, one of the major Taiwan conglomerates, to build Macau’s first outlet mall and to market it in the island. The resort was back in the red for the year ended 31 March. Page 3
%Day
SANDS CHINA LTD
5.60
COSCO PAC LTD
5.32
WANT WANT CHINA
4.63
CHINA MERCHANT
4.22
CHINA COAL ENE-H
4.11
SWIRE PACIFIC-A
0.90
CHINA RES LAND
0.77
HSBC HLDGS PLC
0.59
HANG SENG BK
0.57
ESPRIT HLDGS
-1.00
Source: Bloomberg
2012-7-03
2012-7-04
2012-7-05
27˚ 32˚
27˚ 33˚
25˚ 32˚
2 |
business daily July 3, 2012
macau
Bounce in casino takings misses growth forecasts Casino revenue growth rebounded last month, although the improvement was less than expected Vítor Quintã
vitorquinta@macaubusinessdaily.com
Typhoon Doksuri kept visitors away, hampering casino revenue growth last month, an analyst says
C
asino revenue growth picked up last month but was still far off the pace recorded early this year, adding to fears of a slowdown in the gaming industry. Gaming revenue was 23.3 billion patacas (US$2.92 billion) last month, 12.2 percent more than a year before, according to data released yesterday by the Gaming Inspection and Coordination Bureau. Analysts had expected growth of about 15 percent. Last month’s result was the second-slowest rate recorded this year, behind the 7.3 percent rate in May. That was the slowest rate of growth in three years, back to 2009 when the economy was recovering from the Global Financial Crisis. Although June is usually a quiet month for the gaming industry, Union Gaming’s Grant Govertsen said Typhoon Doksuri was to blame. In a note to investors, Mr Govertsen said if the storm had not “negatively impacted this past Friday and Saturday, we believe June results would have been in line with expectations”. The raising of Typhoon Signal No 8 prevented ferries from sailing for several hours on Friday night and Saturday morning. Warnings had already deterred many people in Hong Kong and Guangdong from visiting. “We believe the first two days of July (typhoon-free) have rebounded nicely from the last two days of June in terms of
visitation and gaming volumes,” Mr Govertsen said.
Slow season July and August are also traditionally quiet months for the casinos, making comparisons with a year before difficult.
Union Gaming expects gaming revenue to be above 26 billion patacas in July and August, with growth “in the mid/high single digit range”. Mr Govertsen said the annual rate of growth in revenue might not rise to 20 percent or above until September.
Gaming Gross Revenue 28000 26000 24000 22000 20000 18000 16000
Investors’ appetite for gaming sector stocks with Macau exposure has waned recently, and was further dulled by speculation that Beijing would impose new visa restrictions reducing the number of inbound visitors. Gross gaming revenue in the first half of this year was 148.7 billion patacas, 19.8 percent more than a year before. Union Gaming believes annual growth will slow to between 10 percent and 12 percent in the third quarter. If the pace of growth were to remain unchanged in the second half, revenue would be 320.9 billion patacas this year. Analysts are generally bullish about the medium-term outlook for revenue, despite slower growth in the short term. Many have reduced their forecasts and warned of lower quarterly earnings for the six licensed casino operators. Some analysts have cut their growth forecasts for the year from 25 percent to 15 percent.
Market Share Per Operator (2011-2012)
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
SJM
29% 28% 27% 29% 26% 27% 26% 27% 28% 27% 25% 29% 26%
Sands China 16% 15% 14% 14% 14% 16% 17% 19% 18% 17% 18% 17% 18% Galaxy
15% 19% 20% 20% 21% 20% 19% 19% 17% 20% 21% 20% 23%
Wynn
15% 15% 13% 12% 13% 13% 14% 13% 13% 12% 13% 11% 12%
MPEL
14% 16% 15% 16% 15% 13% 14% 13% 14% 14% 14% 12% 13%
MGM
11% 8% 11% 10% 11% 11% 10% 10% 10% 10% 10% 11% 9%
Total
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
* Figures are rounded to the nearest unit, therefore they may not add exactly to the rounded total
July 3, 2012 business daily | 3
MACAU
CEPA signing signals tight economic bonds The scope of the economic partnership between the mainland and Macau is expanding Xi Chen
xi@macaubusinessdaily.com
F
urther liberalisation of trade and services and the opening of more mainland industries to Macau enterprises are envisaged by the latest supplement to the Closer Economic Partnership Arrangement, or CEPA, between Macau and the mainland. The latest supplement, the ninth, is also intended to reduce restrictions on Macau enterprises doing business in the mainland. Its provisions are due to take effect next year. The supplement is meant to open up the mainland education and railway sectors. It lowers the amount of capital that Macau banks must have if they wish to open branches on Hengqin Island to US$4 billion (32 billion patacas) from US$6 billion. Secretary for the Economy and Finance Francis Tam Pak Yuen said the city has at least three banks that meet the requirement but did
KEY POINTS Mainland education and railway sectors to be open to Macau investors Barriers for Macau banks setting up branches on Hengqin Island to be lowered Macau entertainment businesses can set up on Hengqin, but no casinos New opportunities for investment in consumer finance and supply chain financial services
Secretary Francis Tam and vice-minister Jiang Yaoping signed the ninth supplement to the CEPA yesterday
not identify them. “The new supplement reflects the long-term goal of CEPA, which is the economic integration of Macau with mainland China,” Mr Tam said. In a written joint statement, the signatories said Guangdong would continue to be a laboratory for experiments in liberalising trade and services. New measures were being taken in the fields of law, accounting, architecture, health care, telecommunications and banking. In Macau yesterday to sign the supplement, commerce viceminister Jiang Yaoping said the CEPA had made big breakthroughs in trade and service liberalisation, in fields such as education, financial services and travel. Mr Jiang said some sectors of the economy were fully liberalised. Further integration of service sectors would help improve service
MOP86.6 million Value of duty-free goods Macau exported to the mainland last year
standards in the mainland. The supplement dangles new opportunities in front of Macau companies. On Hengqin, international schools will be permitted to enrol more students, entertainment businesses will be allowed in restricted areas, cross-border database services will be promoted and publishing joint ventures will be encouraged.
Mr Tam said while the supplement allowed Macau enterprises to enter the entertainment business in the mainland, this “does not include casinos”. Further afield in Guangdong, call centres and telecommunications service operations will be set up in Zhuhai and Dongguan, urban railways will be built, and consumer finance companies and supply chain financial services companies will be established. Duty-free exports from Macau to the mainland have increased considerably since the CEPA was introduced. Macau exported 86.6 million patacas of duty-free goods last year. When the agreement came into force in 2004, the value of exports was just over 1.8 million patacas. In the same period, more than 800 Macau enterprises set up mainland offices, with a registered capital of 46 million yuan (US$7.2 million).
Grand Waldo cancels plan for Taiwan tourists’ mall Scrapped plan for shopping tailored to mass-market Taiwanese tourists drives casino into the red Vítor Quintã
vitorquinta@macaubusinessdaily.com
T
he Grand Waldo casinoresort in Cotai has dropped a plan to open the city’s first mall catering to shoppers from Taiwan, according to the resort’s major shareholder, Get Nice Holdings Ltd. In its annual report, sent to the Hong Kong Stock Exchange on Friday, Get Nice said it would end its joint venture with Shin Kong Capital Management Inc, part of a big Taiwan conglomerate, to market the Grand Waldo resort to Taiwan visitors. Get Nice said the companies struck a deal in January last year and
agreed last month to give up on it because the market had changed. Get Nice had set aside HK$200 million (US$25.8 million) to wrap up the redevelopment of the Grand Waldo, which began three years ago. The redevelopment was to have included a mall with about 200,000 square feet of retail that was due to open in the third quarter of last year. Get Nice said last year the mall was meant for “mid-level consumers” looking for off-season or discounted upmarket goods from Taiwan and Japan. It would include items such
as clothing, footwear, glasses, handbags, cosmetics and electronics. The company said the Grand Waldo would have “become the first casino-entertainment resort in Macau specifically targeting Taiwanese tourists”. The Grand Waldo made a net loss of HK$356.5 million in the 12 months ended March 31, having made a net profit of HK$78.2 million the year before. Revenue rose by 19 percent to HK$554 million. The loss was due mainly to a decrease of HK$145 million in the resort complex’s valuation.
Get Nice said the casino, run by Galaxy Entertainment Group Ltd, had concentrated on the middle of the mass market and “continued to provide stable revenue”. Get Nice said the hotel’s occupancy rate of more than 85 percent and its higher average room rate of HK$787 had been the fruits of “continuous renovation”. Grand Waldo’s losses pushed Get Nice into the red, burdening it with a net loss of HK$224.6 million. The board proposed a dividend of HK$0.01 a share, as in a year earlier. Get Nice owns 65 percent of the Grand Waldo through two subsidiaries.
4 |
business daily July 3, 2012
macau
Hotel suspends operations New Century Hotel will be closed to new guests due to the ongoing dispute between shareholders Ng Wai and Chen Mei Huan, a situation that has forced the Macau Government Tourist Office to intervene. On June 2 the Taipa hotel shut down its check-in during several hours and only reopened after the office sent staff to the facilities. The Travel Industry Council of Macau also sent representatives to the hotel. A press conference was held in the afternoon by Lei Soi Peng, who claimed to receive instructions from Ng Wai. She said the suspension is to help protecting Macau’s image as a tourist city and ensuring the safety of the tourists, as Ms Chen has sent some “gangsters” to the hotel after Mr Ng was attacked last week. Ms Lei said the hotel will not receive any new guests but the visitors who are currently staying at the hotel will not be affected. For those who have reserved rooms in the hotel, the company will receive them but only “to a certain extent,” she said. A woman, claiming to be Ms Chen’s sister, interrupted the conference and said Ms Lei made up everything. The woman claimed Ms Chen, who is currently in the United States, has purchased 80 percent of stakes in the hotel. A Ms Fong, who claimed to be Mr Ng’s secretary, also appeared at the press conference, saying last week’s attack was aimed at killing the businessman. Meanwhile the casino continued operating, the Gaming Inspection and Coordination Bureau stressed, with more security staff. The cabinet of Secretary for Economy and Finance, Francis Tam Pak Yuen, said authorities are concerned about the disputes in New Century. The Gaming Inspection and Coordination Bureau instructed casino operator SJM, who runs the casino, to handle the matter properly, local TV news TDM reported. T.L.
Ng Wai, also known as Ng Man Sun or Kai Sze Wai
Just like old times at the New A long-term junket partner of Stanley Ho Hung Sun experiences dispute resolution the way it used to be Associate Editor
I
n Macau gaming operations, no news is usually good news. There are many visitors – especially VIP gamblers – who aren’t anxious to be in the limelight. So when a junket room operator makes it to the front pages of the local press after being hospitalised in an attack involving sticks and hammers it tends to create one of two reactions locally. These are either: ‘here we go again’ among those who lived here during the 1990s; or ‘this is bad for investors’ among the recently arrived management and finance types. To understand the ‘here we go again’ reaction, you need to know a little more about the man who was attacked. Ng Wai is a 65-yearold businessman with – according to a Hong Kong Stock Exchange
filing in March 2011 – more than three decades of experience in VIP gaming operations, most of it in Macau with casinos licensed to former gaming monopolist Stanley Ho Hung Sun. In that capacity Mr Ng once had Wan Kuok Koi, also known as ‘Broken Tooth’, as a business rival. Mr Koi is currently serving the final months of a nearly 14-year prison sentence in Macau for money laundering, loan sharking and being a triad gang member and leader.
White collar On the ‘bad for business’ side of the equation is Mr Ng’s estranged longterm consort Chen Mei Huan. She apparently represents ‘new’ Macau and corporate money raising; specifically a plan for an initial public offering of shares aimed at raising US$200 million (1.6 billion patacas) on the Hong Kong Stock
Complicated shadows Traditional casino industry a complex web of interrelationships
T
he backdrop of the story is the New Century Hotel in Taipa, built in 1992. The name may sound forward-looking but on several occasions it has been emblematic of Macau’s past rather than its future. But the New Century is also symbolic of just how complex and deeply interlocked business relationships are in Chinese-owned companies in Macau. The hotel has – both directly and indirectly – links to: a person once questioned for five hours by a Macau judge investigating triad links; a former employee of the Shenzhen branch of the mainland’s National Security Agency; and Ted Chan Ying Tat, the current Chief Operating Officer of Macau gaming concessionaire
Melco Crown Entertainment Ltd. Mr Ng is the person once questioned as a suspected triad member. He is said in some reports to have ‘acquired’ the hotel in 1997. Business Daily hasn’t been able to obtain any paperwork confirming that. According to Macau government records, a company called Macau Hotel Developers Ltd owns the New Century. It in turn is owned by two British Virgin Islands shell companies, so the ultimate ownership of the hotel is not publicly available. Industry sources say the hotel is around 77 percent owned by Ms Chen. The ownership structure of the hotel and its financial engine room – Greek Mythology casino – is complicated.
What isn’t in doubt is that the New Century’s casino – Greek Mythology – was first established and licensed during the gaming monopoly of Stanley Ho’s STDM. In the 2011 interim report of SJM Holdings – the post-monopoly successor to STDM – filed with HKSE, ‘Casino Greek Mythology’ is described as a ‘satellite’ casino. On July 30 1997, three days before the New Century and its then STDM-licensed casino were due to open after refurbishment – and in a period of turf wars involving criminal gangs jockeying for control of parts of the Macau economy prior to the handover from Portuguese to Chinese administration – there was an incident of cinematic
Exchange (HKSE) from investors eager to participate in the Macau gambling growth story. The money is expected to go toward the construction of a new hotel tower at a casino-hotel that uses a gaming licence from Sociedade de Jogos de Macau – a company founded by Stanley Ho. The money may also be used to reinforce the balance sheet of a junket-focused Macau casino business in which – according to a filing to the HKSE on December 12 last year – Mr Ng had a 24 percent stake. To understand where Mr Ng’s story might be going, we need to understand the transition of Macau from a place of occasional bluecollar brute force and intimidation, to a place of white collar, smooth talking, investor-friendly, marketing people. Some argue blue-collar Macau never really went away. They say it just learned how to dress a little better.
drama. It was a drive-by shooting with the suspects using at least one automatic weapon – not a handgun, but an assault rifle firing approximately 20, seven-millimetre rounds capable of penetrating steel.
Marked man Mr Ng was apparently the target, in what was interpreted at the time as a warning rather than a serious assassination attempt. But Mr Ng reportedly spent many months afterwards cloistered in the hotel for fear the people concerned might have another go. As the Economist Intelligence Unit described it on September 2 that year: “Three maintenance workers were shot in the legs at the New Century Hotel on Taipa Island, owned by Stanley Ho, three days ahead of its official opening. A report in the Hong Kong Standard on July 31 said that the 14K triad society is in a dispute with the hotel over the access to the casinos
July 3, 2012 business daily | 5
MACAU
The MPEL connection End of the affair How Greek Mythology came to the rescue of Lawrence Ho
F
w Century KEY POINTS 77pct – amount of New Century Hotel owned by Ng Wai’s former consort Chen Mei Huan US$200 million – amount that could be raised by HK IPO for Greek Mythology Six – number of men that allegedly attacked Ng Wai and his female companion Five-and-a-half – number of hours Ng Wai spent under questioning from a Macau judge in connection with triad allegations according to HK court judgement in 1990
orward wind nearly two decades from 1990 to December 2007 and New Century made the news in connection with Melco-PBL Entertainment (now Melco Crown Entertainment) the fledgling Macau casino operation of Lawrence Ho Yau Lung and his Australian business partner James Packer. In 2007 Mr Ho junior and Mr Packer were in some difficulty. They had spent more than half a billion U.S. dollars building a sixstar casino hotel – Crown Macau (now Altira) in a suburban corner of Taipa with no foot traffic, and they needed to start making their money back quickly. That wasn’t easy given the initial management team were chiefly Westerners not plugged in to the Macau junket network. In May and June of 2007, Crown Macau’s share of total Macau gaming revenue was roughly 1.7 percent and 2.7 percent, respectively, according to Melco-PBL’s second quarter results that year. In stepped a group of ‘junket partners’ after back channel appeals by Mr Ho’s father Stanley. To start with, some high roller gamblers were moved from Greek Mythology over to Crown Macau. It was the Ho empire’s equivalent of the Spartans sacrificing themselves in battle for the sake of Ancient Greece.
Lift off The Crown Macau patient’s health picked up quickly when MelcoPBL teamed up with A-Max Holdings – a Hong Kong-listed junket aggregator incorporated in Bermuda – offering A-Max’s junket partners a commission rate of 1.35 percent on their players’ rolling bets. The effects were immediate and dramatic. Crown Macau went from a 5.7 percent share of revenue in November 2007, to an 18.1 percent share in February 2008. A-Max (now known as Amax) and Greek Mythology are connected. In March 2006, A-Max bought a 49.9 percent stake in an entity controlling the Greek Mythology casino according to an HKSE filing. Amax, Greek Mythology and MPEL also have links to each
other, as well as to SJM. In Amax’s 2011-12 interim report filed with the HKSE, Mr Ng – also known as Ng Man Sun – is listed as a 24.23 percent shareholder of Amax. Ted Chan, now chief operating officer at MPEL, spent an early part of his career at Mocha Clubs (a Macau slot parlour business originally run by only Melco); he then became chief executive of Amax Entertainment Holdings from December 2007 to November 2008, and then president of Altira before his current role. Deng Xiaomei, appointed on October 8, 2010 as a non-executive director of Amax and chair of the board, is a former official of the Shenzhen branch of China’s National Security Agency, according to an HKSE filing. Thus a former Chinese law enforcement official came to head the board of a company reportedly 24 percent owned by a man – Ng Wai – once questioned by a Macau judge on suspicion of triad involvement. On October 30, 2010 according to another filing, Amax had diluted its interest in Greek Mythology down to 24.8 percent, although the Amax interim report for 2011 says; “In the opinion of the director of the Company, the Company is still holding a 49.9 percent interest in Greek Mythology and the Company can still exercise significant influence.” This is understood to be a reference to the fact that Mr Ng – as Ms Chen’s long-term partner – had influence that extended beyond the boardroom and into the sitting room. None of this mattered very much to the outside world, as Greek Mythology on its own has a relatively small turnover by Macau VIP standards. But the stakes were raised greatly when in March this year – as reported by our sister publication Macau Business – Amax had a shareholder vote in favour of an IPO of its associate company Greek Mythology (Macau) Entertainment Group Corp Ltd – the holding vehicle for Greek Mythology casino. A filing said a new holding company – Greek Mythology Holdings Ltd – was to be listed in Hong Kong within two years. A.E.
Some time after March Mr Ng and Ms Chen became estranged. Sources says Mr Ng took up with a female hotel employee more than three decades younger than him – a Ms Feng – described by one source as a ‘former tea lady’ at the hotel. She was installed in a suite at the hotel and then – some suggest at Mr Ng’s instigation – began sacking many of the senior staff of the hotel, including the general manager of 15 years’ standing and the senior accountant. In a bizarre twist, Ms Feng’s partner, who also works at the hotel, was given a promotion. This apparently was supposed to compensate him for his public loss of face. Ms Feng also took to walking around the hotel in Ms Chen’s jewellery according to sources. Given that the hotel is reportedly in Ms Chen’s name, and that she would become the major player in the IPO, the breakdown in that relationship seems to have caused financial difficulties for Mr Ng. On at least one occasion a tour group from mainland China was allegedly barred by Mr Ng from checking in to the hotel unless the tour agents paid the accommodation fees direct to Mr Ng rather than to the hotel say sources. Yesterday the police also attended the New Century after an apparently unrelated dispute with eight Filipino tourists. It appears there’s a lengthening list of people with an interest in persuading Mr Ng to pursue more white-collar methods of business.
Uninvited guests It was not entirely a surprise therefore when two Sundays ago six men entered the New Century when Mr Ng was having dinner in a VIP room of a restaurant, and attacked him and Ms Feng with sticks and hammers. “He was knee-capped,” one source told Business Daily. Other reports suggest his feet and arms suffered fractures. He was admitted to Conde de São Januário Hospital for treatment. Ms Feng was not as badly hurt as Mr Ng and was released from hospital on the Monday night. No one has so far been arrested in connection with the attack. None of this is good news for a company hoping for a listing in Hong Kong. Hong Kong’s equity market regulator, the Securities and Futures Commission, may be a tougher prospect to deal with than the authorities in Macau.
of loan sharks and other gang representatives.” In 1990 Mr Ng – also known by the nickname Kai Sze Wai (‘Market’ Wai) from his early days working in Hong Kong wet markets – successfully sued in Hong Kong’s High Court for libel after a magazine in that city alleged he had links to organised crime. He was awarded HK$350,000 damages. The judgement noted: “At the end of 1988, one of the plaintiff’s staff in his Mahjong establishment in the Lisboa Casino was murdered” but stressed Mr Ng was not implicated in that death. The court judgement also noted that one complained-of article had been used by Macau police as prima facie evidence of Mr Ng having triad involvement. As a result he had been arrested and brought before a Macau judge for five-and-a-half hours of questioning but without any charges being brought. A.E.
Photo by Manuel Cardoso
P.R. campaign
The New Century Hotel – its Greek Mythology Casino may be part of an HK IPO
Early in June two paid-for advertisements appeared in the Chinese-language Macao Daily News in the name of Ms Chen. The first stated Mr Ng had not been a shareholder of Greek Mythology Entertainment Group Ltd since March 26, 2007, but had been involved in its administration until June 5 this year. The second advertisement said Ms Chen was the majority owner of the New Century Hotel. To whom the adverts were addressed isn’t clear. The management of SJM – which after all understands better than any of the Macau operators the advantages of white collar business methods over blue collar ones, and also understands the tide of history – is said to be backing Ms Chen in the struggle for control of New Century. Whatever the outcome, the return of old-style Macau conflict resolution will do little to convince sceptical outsiders that the city really has changed. A.E
6 |
business daily July 3, 2012
macau
InBrief North West scrambles
The Macao Water Supply Co Ltd wants the government to pay more for water, the company’s deputy general manager Oscar Chu told TDM on Saturday. The government-funded broadcaster reported that the utility’s operating costs had increased, squeezing profit. Mr Chu said water consumption would rise by 5 percent this year. He did not disclose the size of the proposed increase in the fee it wanted from the government.
Container freight at three-year high More than 22,500 tonnes of containerised freight passed through the city’s ports in May, the highest figure since December 2008. The Statistics and Census Service said more than 21,200 tonnes of freight were imports, with exports down by 39.3 percent year-on-year to less than 1,300 tonnes. The Inner Harbour was the city’s busiest port, followed by the deep-water Ka-Hó Harbour.
CAM signs pact with software company
to get back out to sea
North West Express cancels ferry services to Tuen Mun for safety reasons but will not say what makes its ships unsafe Tony Lai
tony.lai@macaubusinessdaily.com
N
orth West Express Ltd hopes to re-open the route between Hong Kong’s Tuen Mun pier and Macau’s Outer Harbour Ferry Terminal in two weeks after the ferry operator suspended its services on Sunday owing to safety problems. Chief operations officer Koji Chan told reporters yesterday that the company had spoken to a maintenance firm that could repair its two ships. He wants the safety problems solved within 14 days but said services might not resume until later as the work could drag on. Macau Maritime Administration director Susana Wong Soi Man told reporters the company would be allowed to sail only if safety requirements were met. But neither she nor the company have spelt out what is wrong with the ships. Mr Chan said North West Express had been in touch with other ferry companies about renting vessels. A charter agreement would allow
the company to operate but he said discussions were at an initial stage. North West Express made the decision to suspend services on Sunday. Mr Chan said safety issues were to blame and the company’s finances were not an issue. “At this stage, our company is still interested in continuing operating this route,” he said. He said rent in Tuen Mun of HK$2.32 million (US$300,000) a month put “much financial pressure on the company” and made up about 30 to 40 percent of operating costs. Ms Wong said officials had a clear grasp of the company’s finances from monthly operating reports and from communications with the Hong Kong Marine Department.
Refunds paid Representatives of the Maritime Administration and North West Express visited the Outer Harbour Ferry Terminal yesterday to supervise ticket refunds.
Ms Wong said about 1,300 passengers had bought tickets in advance and would be affected by cancellations. She said about 80 percent of ticket holders had been given a refund. The company had also been told to provide alternative transport for affected passengers. The company sold advance tickets for trips until July 6 prior to the service suspension. One woman, who bought a ticket to sail yesterday on June 27, said: “I am not happy with the company’s arrangement. They should not sell the tickets if they know they can’t operate.” The woman, who refused to be identified, said North West Express was trying to book her a ticket on another company’s service. Ms Wong said North West Express must submit a report of the incident within 10 days and an inquiry would follow. Ms Wong did not say when the inquiry would be complete. Photo by Manuel Cardoso
Utility flags bigger fee for water supply
Macau International Airport Co Ltd has signed a cooperation agreement with Shanghai Minhang Huadong Kaiya System Integration Co Ltd, a provider of software. Last week’s agreement promotes the airport company’s ambition to become an information platform for airports throughout Greater China and the Portuguese-speaking countries.
20,000 against light rail route Two residents’ associations delivered a petition with 20,000 signatures to the government on Friday, demanding it changes the route of the Light Rapid Transit railway in the NAPE district. Residents want the route moved to the seaside instead of its current path along Rua de Londres and Rua Cidade do Porto. Association spokesmen say they want up to 100,000 signatures.
Safety problems forced North West Express to suspend ferry services to Tuen Mun on Sunday
Weather Beijing 35/24o C Changchun 23/16o C
Harbin 24/17o C
Xian 27/21o C Shanghai 35/28o C Chengdu 27/21o C Kunming 26/18o C Haikou 30/23o C Sanya 32/25o C
Guangzhou 34/25o C
MACAU (2 July-7 July) Day
Temperature
Humidity
07/2
26/31o C
60/90 %
07/3
27/32o C
55/90 %
07/4
27/33o C
55/90 %
07/5
27/33o C
55/90 %
07/6
27/32o C
55/90 %
07/7
27/31o C
60/95 %
Shenzhen 33/26o C
ASIA (today)
Hong Kong 33/28o C
Manila
TOKYO
Jakarta
28/25o C
30/26o C
27/21o C
31/24o C
Macau 32/27o C
Bangkok
SEOUL
K. lumpur
33/26o C
SINGAPORE
27/21o C
34/25o C
taipei
34/27o C
July 3, 2012 business daily | 7
MACAU Corporate Social Responsibility
Special Olympics Golf makes history tomorrow
From left to right: Paulo A. Azevedo, tournament president, Melina Leong, from Sands China, Ada Lo, chairwoman of Special Olympics Macau, Grant Johnson, from Melco Crown Entertainment, and Stefan Kuehn, tournament director
The city hosts its first international-class tournament for mentally handicapped athletes this week
M
acau’s first Special Olympics Macau Golf International starts tomorrow, when eight teams and 32 athletes from around the Asia-Pacific region tee off. Teams from Australia, the mainland, Taiwan, Hong Kong, South Korea and Macau will take part, paired with a representative from the event’s four main sponsors: Business Daily, Caesar Golf Macau, Sands China Ltd and Melco Crown Entertainment Ltd. The event is the first of its kind for Special Olympics Macau, extending the organisation’s reach
outside the city. “The proposal received an enthusiastic response from the Special Olympics committees in many countries, as well as from our sponsors and partners,” said Paulo A. Azevedo, the tournament’s president and the publisher of Business Daily. “This is also the first time the office of the chief executive has engaged in an event.” Special Olympics Macau chairwoman Ada Lo said the organisation wanted to develop its athletes to represent Macau on the world stage. Special Olympics Macau was
founded in 1987 and has about 1,000 athletes in its programmes. Although there is no direct sponsorship from the government for this week’s event, she hopes officials might provide sponsorships or subsidies in the future. Representatives from corporate sponsors Sands China and Melco Crown Entertainment said they had supported the event from day one. Sands China vice-president of public relations and community affairs Melina Leong said the company had sponsored Special Olympics in Macau since 2007 and was pleased to see competition at an international level. “We hope to see more of these kinds of international events,” said Grant Johnson, Melco Crown Entertainment’s vice-president of sales and marketing.
The Special Olympics Golf International will be the first in a three-year deal between Special Olympics Macau and the tournament’s organiser, Macau Business SK Events. “I have high expectations of this event. I hope in the coming years we will have bigger and better sports in Macau,” Mr Azevedo said. He said the tournament would send a message that visitors from all over the world were welcome here and raise Macau’s profile as an international city. Special Olympics World Games are similar to Olympic Games and the Paralympic Games, bringing together mentally handicapped athletes. More than 180 countries or jurisdictions and thousands of athletes participate each year. X.C.
8 |
business daily July 3, 2012
GREATER CHINA
China HSBC Purchasing Managers’ Ind Index reaches a seven-month low in June, signals further growth slowdown Main findings:
*
Factories surveyed said demand was muted for both domestic and foreign markets. Demand was especially weak in Europe and North America.
*
Around 15 percent of factories polled said new export business fell in June, compared to 6 percent of respondents who said business improved.
*
Inventories of finished goods rose, and anecdotal evidence suggested the increase was a result of unexpectedly weak sales.
*
Falling commodity and crude oil prices dragged input prices down to their secondlowest level on record, behind all-time lows seen during the 2008/09 crisis.
*
Slackening demand for raw materials improved the delivery times of suppliers.
*
Purchases of raw materials fell due to weak demand, and as factories tried to run down their stocks.
C
hina’s factory activity shrank in June at the fastest pace in seven months as new export orders tumbled to depths last seen in March 2009, a private sector survey showed, underlining the risk of a lurch lower for the Chinese economy. The HSBC Purchasing Managers’ Index (PMI) fell to 48.2 after seasonal adjustments, its lowest since November 2011, and little changed from a flash, or preliminary, estimate of 48.1. The final reading in May was 48.4. June was the eighth straight month of a reading below 50, the threshold dividing expansion from contraction in the survey methodology. China’s official PMI, released on Sunday, also fell to a seven-month low in June. However, the official PMI was 50.2, indicating the sector was still expanding. The two indexes often give divergent readings as the official PMI surveys mainly big, statebacked firms, while the HSBC PMI takes the pulse of smaller, privatesector companies. But both readings underline speculation that Beijing will relax monetary and fiscal policies further to boost domestic activity to compensate for weakening foreign demand for China’s factory goods - a problem for the world’s biggest exporter.
Weakening exports The survey said export demand from Europe and North America was especially weak.
“We expect more decisive easing efforts to come through in coming months,” said Qu Hongbin, an economist at HSBC. “It is all about growth and employment,” Mr Qu said. “As external demand has weakened and domestic demand hasn’t shown a meaningful improvement in response to earlier easing measures, growth is likely to be on track for further slowdown.” Like the official PMI, the HSBC PMI showed new orders and new export orders struggling in June below the 50-point threshold, suggesting demand was shrinking. The new export orders sub-index lost a hefty 2.7 points to sink to a 39-month low of 45.8. The new orders sub-index also fell, although not as sharply as new export orders. But the combined drop in export and domestic orders was the biggest so far this year, the survey said. Sliding production cooled prices. Average production costs fell at their steepest rate since March 2009. Prices of finished goods fell at the fastest pace in 42 months, although in part due to competitive pressures between producers. Crucially, it said there were also signs that factories were saddled with excess capacity as backlogs of work fell slightly as factories received fewer new orders.
Falling employment Factory employment shrank for the fourth straight month in June,
though the employment sub-index rebounded to a three-month high from May’s 38-month low. Job creation is a key indicator for China’s government, which calibrates policy to ensure growth is fast enough for the Communist Party to make good on pledges to raise incomes for the poor and achieve social stability, thereby justifying its grip on power.
Apple pays settles for US$60 million iPad trademark fight with Proview comes to an end
A
Payment removes a hurdle for Apple on the mainland
pple Inc. paid US$60 million to settle a twoyear-old legal dispute with Proview International Holdings Ltd. regarding the iPad trademark in China. The terms of the settlement agreement were reached on June 25 and Apple has transferred the funds as agreed, the Higher People’s Court of Guangdong Province announced in a statement on its website today. The iPad case had threatened sales of the second-best selling product of Apple, which had US$110.2 billion in cash and investments on its
balance sheet at the end of March, in its largest market outside the U.S. Before the agreement, Proview had applied to Chinese customs to block shipments of Apple’s iPad tablets in and out of China, and asked local retailers to stop sales of the product. “If I’m Apple, I’m pretty happy, because this amount of money to them is nothing,” Stan Abrams, an intellectual property lawyer and a law professor at the Central University of Finance and Economics in Beijing, said in a phone interview today. “This isn’t a big amount to get this over and done with.”
Ownership The dispute had centered on whether Proview’s Taiwan unit,
China speeds up quota approval for foreign investment in June
C
hina’s foreign exchange regulator granted US$1.4 billion in combined quotas to overseas investors during the first half of June, almost equal to the amount given in the previous two months, as the government accelerates the opening of the country’s capital markets. The State Administration of Foreign
Exchange gave new quotas to seven institutions between June 1 and June 15, including City of London Investment Management Co Ltd and BlackRock Institutional Trust Company, and increased quotas for three institutions. During April and May, 12 institutions were granted combined quotas of US$1.52 billion under
the Qualified Foreign Institutional Investor (QFII) scheme. China has been stepping up efforts to expand the QFII programme, which it launched in 2003 to allow foreign investors to buy Chinese securities, as part of a broader reform of the country’s financial markets. Earlier this year, the government raised the total maximum QFII quota by
US$50 billion to US$80 billion, and has lowered the threshold for investors seeking a QFII license. China has so far granted QFII licences to 170 foreign investors and 147 of them had obtained combined quotas of US$27.36 billion from the country’s foreign exchange regulator as of June 16. Reuters
July 3, 2012 business daily | 9
GREATER CHINA
dex takes another hit Guangzhou sets annual car quotas at 120,000 Curbs in major cities push automakers shares down
S
AS PMI keeps sliding, growth worries mount
The loss of around 20 million Chinese jobs in a matter of months towards the end of 2008 during the depths of the global financial crisis, as international trade ground to a halt and factory activity tumbled, prompted Beijing to fashion a 4 trillion yuan (US$635 billion) stimulus programme in response. To shore up the economy this time around, Beijing has lowered interest
rates once and reduced banks’ reserve requirement ratio twice this year. Investors expect to see more, though few anticipate a full-blown fiscal stimulus package. A Reuters poll in May showed analysts expect China to lower banks’ reserve requirements by another 100 basis points this year to 19 percent for its biggest banks.
which Apple paid 35,000 pounds (US$54,800) in 2009 to use the iPad name in mainland China, had the right to sell it or whether that rested with Proview’s Shenzhen unit, which held the mark. Apple sued Proview Shenzhen in 2010 claiming ownership of the iPad trademark in China and lost. Its appeal of that case was heard on February 29, and the two sides had engaged in court-sponsored mediation since then. Apple revenue in China tripled to US$7.9 billion last quarter, helped by surging demand for products including the iPad tablet computer. The Cupertino, California-based company’s global sales of iPads topped 32 million units last year, earning revenue of US$20.4 billion. In less than two years, the device has become the company’s second-best selling product by revenue, behind the iPhone.
Proview’s wholly owned subsidiary, Proview Technology (Shenzhen) Co., obtained the iPad trademark in China in 2001, according to a February 3, 2010, regulatory filing with the Hong Kong stock exchange. The mark was obtained for a desktop terminal with touch-screen display called the Internet Personal Access Device, or IPAD, that the company developed starting in 1998. “I don’t think Proview Shenzhen is satisfied with the amount, but it’s very realistic,” said Roger Xie, an attorney for the company. “Proview accepted the settlement amount because it’s under great pressure from creditors.” Proview’s Shenzhen factory was shuttered in November 2010 and is being dismantled after creditor banks took over its assets when the company missed payments to suppliers and banks.
Reuters
Rising quotas for foreigners hint at faster market opening
Bloomberg
AIC Motor Corp. and Guangzhou Automobile Group Co. led Chinese automakers lower in Shanghai trading today after southern Guangzhou city imposed a quota on passenger-vehicle license plates. SAIC, the Chinese partner of General Motors Co., tumbled as much as 10 percent to 12.86 yuan (US$2.02), the biggest slump since August 2009. Guangzhou Auto, which is headquartered in the city, sank as much as 9.2 percent to 6.99 yuan for the biggest decline since it first started trading in Shanghai in March. The Guangzhou municipal government will cap the number of car license plates issued a year at 120,000 — 53 percent of total sales in the city last year — under a trial program that began July 1, according to a statement on its website dated June 30. Guangzhou follows Beijing, Shanghai and Guiyang in restricting vehicle ownership to tackle worsening traffic and air pollution. “More cities may follow what Guangzhou and Beijing did in limiting car ownership,” said Wang Yanxue, an analyst with Huachuang Securities Co. in Beijing. The state-backed auto dealership association said last month
that average inventory carried at showrooms bloated to an unsustainable level exceeding two months of sales by the end of May.
Vehicle speeds The average vehicle speed in Guangzhou dropped to about 20 kilometers per hour this year and is expected to slow further next year, the government said on its website. There were a total of 2.41 million vehicles in the city as of the end of May, 3.3 times the number of available parking spaces, it said. Traffic jams eased to an average 55 minutes during weekdays in the first quarter in Beijing, compared with 75 minutes a year earlier, the Beijing Transportation Research Center said last month. The capital has capped the number of new license plates since 2011 and awarded them through a monthly lottery. BYD Co., the Chinese automaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., fell as much as 3.7 percent to 19.13 yuan. Great Wall Motor Co., a Chinese maker of sport utility vehicles, slumped as much as 9.2 percent to 16.16 yuan. Bloomberg
10 |
business daily July 3, 2012
ASIA
Japan firms less gloomy, see upturn Confidence improves even as yen limits exports
Large Japanese businesses see their capital spending rising in the year ending March 31, 2013
J
apan’s large manufacturers became less pessimistic as declines in commodity prices aided profitability, boosting the outlook for the world’s thirdbiggest economy even as a stronger yen crimps exports. The quarterly Tankan index of sentiment was minus 1 in June from minus 4 in March, the Bank of Japan said yesterday in Tokyo. The median estimate was for a reading of minus 4. A negative number means pessimists outnumber optimists. Bank of Japan policy makers meeting on July 11 and 12 will weigh whether improved sentiment
and progress in tackling Europe’s debt crisis are enough to warrant withholding further stimulus. Yesterday’s report showed large Japanese businesses see their capital spending rising 6.2 percent in the year ending March, up from a previous forecast of no change. Service-sector sentiment improved for the fourth straight quarter to hit a four-year high of plus 8, as companies benefited from solid private consumption and spending for rebuilding from last year’s earthquake. “Today’s [yesterday’s] data won’t deliver relief to the Bank of Japan,” said Takeshi Minami,
chief economist in Tokyo at Norinchukin Research Institute Co., who correctly forecast the minus 1 reading and predicts the central bank will expand its asset purchases. “It’s increasingly unclear that global demand, which is key for Japan’s economy, can gain traction to lead the recovery.” Japan’s Nikkei average erased earlier gains to end almost flat yesterday. The Nikkei ended at 9,003.48, almost unchanged, after having hit two-month high of 9,103.79 at one point. The broader Topix index shed 0.1 percent to 769.34, after “Big companies are benefiting from
relatively firm overseas economies and post-quake reconstruction demand at home even though strength in the yen remains a concern,” said Tatsushi Shikano, senior economist at Mitsubishi UFG Morgan Stanley Securities in Tokyo. “The tankan confirmed the economy is moving in line with the BOJ’s forecasts and it is unlikely to prompt the bank to ease policy further anytime soon. I expect the BOJ to stand pat at this month’s review, unless a sudden spike in the yen threatens to hurt corporate sentiment.” But the gain in the Tankan is “a small improvement,” said Mr
Australia rates to stay put in July Economic expansion powered by resource boom
R
eserve Bank of Australia Governor Glenn Stevens will probably keep interest rates unchanged today after cutting them in each of the past two months, as the nation’s strongest economic expansion in five years reduces the need to guard against fallout from Europe’s debt crisis. Interest-rate swaps indicate a 76 percent chance the RBA will keep the overnight cash-rate target at 3.5 percent, the highest among major developed nations. Mr Stevens will drop the policy rate to 3 percent by yearend, the data show. Investors are pulling back from bets the RBA will add to its 1.25 percentage points of reductions since November after data showed Australia’s economic growth was the strongest since 2007. June’s “finely balanced” rate cut was spurred by concern
RBA Governor Glenn Stevens is expected to drop the policy rate to 3 percent by year-end
Europe’s debt crisis will slow global growth, the RBA said in the minutes of the policy meeting. Bonds declined yesterday after European leaders agreed last week to ease terms on loans to Spanish banks. “The local economy has good momentum, and we think last month’s cut put the RBA ahead of the curve on global risks,” said Paul Bloxham, chief economist for HSBC Holdings Plc in Sydney and a former central bank official. “We still expect another 25 basis-point cut in the second half in response to global concerns.” All 28 economists surveyed by Bloomberg News predicted the RBA will leave borrowing costs unchanged today. Even after last month’s rate cut, Australia has the highest borrowing costs among major developed nations as it seeks to manage an economy powered by the biggest resource boom
since prospectors in New South Wales set off a gold rush in the 1850s. The latest bonanza – for iron ore, coal and natural gas – is bringing investment projects the government estimates to be worth about A$500 billion (US$511 billion) and helped keep the unemployment rate at 5.1 percent in May. That’s lower than 8.2 percent in the U.S. and 11 percent in the euro area. Collin Crownover, head of currency management at State Street Global Advisors, said the level of RBA interestrate cuts priced into the Australian swaps curve has been “overdone”. “That’s been the consistent phenomenon,” he said in a June 25 interview in Sydney. “There seems to be more priced in, and then it comes out. This has been one of our more profitable trades: fading the easing priced into the Australian curve.” The economy “in the next 12 months is probably going to look roughly like we are today, which is a reasonable place to be,” RBA Assistant Governor Guy Debelle said last week. “But we somewhat are hostage to the world.” Bloomberg
July 3, 2012 business daily | 11
asia Big companies are benefiting from relatively firm overseas economies and post-quake reconstruction demand at home even though strength in the yen remains a concern Tatsushi Shikano, Mitsubishi UFG Morgan Stanley Securities
Minami. “Lower commodity prices probably helped sentiment inch up but it’s still in negative territory.”
Yen’s strength
KEY POINTS Big manufacturers’ sentiment index -1 vs. forecast -4 Big firms expect 6.2 percent rise in fiscal 2012/13 capex Yen trading at 79.78 per dollar BOJ seen holding off on easing on upbeat survey
The yen was Asia’s strongestperforming currency against the dollar over the past three months, appreciating about 3 percent and adding to concern that Japan’s recovery will fade as gains from earthquake reconstruction and car purchase subsidies wear off. The currency traded at 79.78 per dollar. Large manufacturers forecast on average that the yen will trade at 78.95 per dollar in the year through March, according to the report. “Manufacturers are alert to the renewed appreciation of the yen due to Europe’s turmoil, making them cautious about the economic outlook,” Kohei Okazaki, an economist at Nomura Securities Co. in Tokyo, said before the report. “Further monetary easing in July is still in the cards.” “Companies have not changed their dollar-yen rate assumptions much but they have revised up their capital spending and profit
forecasts. This shows business confidence is on an uptrend,” said Naoki Iizuka, senior economist at Mizuho Securities in Tokyo. “The BOJ may nevertheless be prompted to act this month as the European Central Bank is likely to loosen policy this week and the Federal Reserve has hinted at further easing.” Economic growth may cool to an annualised 1.9 percent in the second and third quarters, and 1.4 percent in the final three months of 2012, according to the average forecast of 40 economists in a Japan Centre for Economic Research survey released June 7. That compares with 4.7 percent in January- through-March. Subsidies for purchases of fuelefficient cars and the extra money budgeted for reconstruction of devastated northeastern regions have boosted the world’s thirdbiggest economy after it contracted last year. Confidence at motor vehicles makers rose to 32 in June, the highest since September 2010, yesterday’s report showed. Sentiment at service companies improved, with the large nonmanufacturer index climbing to 8, the highest since June 2008. Rebuilding demand and the government’s carsubsidy programme has fuelled consumer spending, with retail sales rising in May. Japan’s recovery after last year’s earthquake and tsunami could grind to a halt in 2014 when the first increase in the nation’s sales tax may take effect, according to UBS AG and Itochu Corp. Parliament’s lower house last week approved Prime Minister Yoshihiko Noda’s bill to raise the sales tax to 8 percent and then 10 percent in 2015 from 5 percent now. “The risk of further gains in the yen can’t be dispelled,” said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “There’s concern that a slowdown in Europe and China will reduce the volume of Japanese exports.” Bloomberg/Reuters
India’s factory activity ticks up Employment also expanding at a faster pace
I
ndian factories in June stepped up production and hired workers at the fastest rate in more than two years, but sagging demand abroad took a toll on growth in new export orders, a survey showed yesterday. The HSBC manufacturing Purchasing Managers’ Index (PMI) rose to 55.0 in June, a four-month high, from 54.8 in May. It has kept above the 50 mark that divides growth and contraction for more than three years. Still, the survey raised some concerns. High prices continue to weigh on manufacturers, with both input and output costs rising sharply from May. That underscored expectations the central bank is unlikely to cut key interest rates soon. Asia’s third-largest economy is grappling with slowing economic growth but high inflation at a time when the health of the global economy is deteriorating. “Activity in the manufacturing sector kept up the pace in June with output and employment expanding at a faster pace,” said Leif Eskesen,
economist at HSBC. The employment sub-index was at 52.4 in June, the highest level since May 2010. While the PMI suggested domestic demand was holding up, signs from abroad looked more ominous. New export orders grew at their slowest pace since November 2011, with demand weakening in top trading partners Europe and the United States. “New order growth decelerated slightly led by export orders while stock levels rose, suggesting a slight moderation in output growth going ahead,” HSBC’s Mr Eskesen said. Meanwhile, the Indian economy has to deal with its own woes. Growth slumped to its lowest in nine years in the quarter to March due to a slowdown in manufacturing, inflation picked up in May after showing signs of cooling in April and the rupee recently tumbled to a record low versus the dollar. The survey showed little sign of price pressures easing. Factory input and output price indexes hit their highest levels since August
Indian factories in June hired workers at the fastest rate in more than two years
2011 and March 2011, respectively. “In light of these numbers, the Reserve Bank of India does not have a strong case for further rate cuts, which could add to lingering inflation risks,” Mr Eskesen said. Reuters
S.Korea inflation eases in June South Korea’s inflation moderated in June on falling oil prices and the government expanding free school lunch and child care programmes, giving the central bank more leeway to forgo raising borrowing costs. Consumer prices increased 2.2 percent from a year earlier after a 2.5 percent gain in May, Statistics Korea said yesterday. The Finance Ministry last week lowered its forecasts for inflation and economic growth for this year, citing the European debt crisis as a “long-term threat.” The Bank of Korea, which targets inflation at between 2 percent and 4 percent, will determine borrowing costs on July 12. “Inflation is going to decelerate for months to come,” said Lim Ji Won, an economist at JPMorgan Chase & Co. in Seoul. “Prices of manufactured goods have been falling with oil prices so this is being reflected in June.” Core consumer prices, which exclude oil and agricultural products, advanced 1.5 percent in June from a year earlier. Gross domestic product may expand 3.3 percent this year, less than a December estimate of 3.7 percent, the Finance Ministry said last week. Inflation this year may be 2.8 percent rather than a past 3.2 percent prediction, it said. South Korea’s exports rose in June, snapping three months of declines, after a weaker won fuelled overseas sales, according to a separate report yesterday. Overseas shipments rose 1.3 percent from a year earlier, the Ministry of Knowledge Economy said, after a revised 0.6 percent decline in May.
Indonesia exports down 8.55 pct Indonesian exports in May fell 8.55 percent from a year ago, a second straight decline after dropping a revised 2.3 percent in April, the country’s statistics bureau said yesterday. Indonesia had a trade deficit of US$486 million in May, compared with April’s deficit of US$640 million, as imports in May increased by 16.09 percent from a year earlier, compared with April’s 11.65 percent rise. “Slowing global demand accompanied by declining global commodity prices, all led to a downward pressure on the export performance,” Anton Gunawan, chief economist at PT Bank Danamon Indonesia, said before the announcement. There has been “no significant improvement from the economies of the main trading partners, thus external demand will remain low.” Indonesian inflation unexpectedly accelerated in June as food costs climbed, exacerbating the impact of a weaker currency on prices. Consumer prices rose 4.53 percent last month from a year earlier after climbing 4.45 percent in May, the statistics bureau said in Jakarta yesterday. Bank Indonesia has held off from adding to a February rate cut, seeking to support a currency that has fallen more than 3 percent in 2012 as Europe’s debt turmoil spurred outflows from emerging markets. “Inflation is still moderate and manageable,” Eric Alexander Sugandi, an economist at Standard Chartered Bank Plc in Jakarta, said after the announcement. “BI will hold the rate this month to guard against rupiah volatility and reduce imported inflation from a weakened currency.” Standard Chartered revised its full-year inflation forecast to 4.5 percent from 6.5 percent, he said.
12 |
business daily July 3, 2012
MARKETS Hang SENG INDEX PRICE
Day %
VOLUME
PRICE
Day %
VOLUME
26.5
3.7182
33673111
CHINA UNICOM HON
9.76
2.736842
32361648
3.3
2.484472
16000283
CITIC PACIFIC
11.7
1.73913
BANK OF CHINA-H
2.94
2.439024
357954491
BANK OF COMMUN-H
5.19
3.8
28882944
BANK EAST ASIA
27.7
3.551402
4882449
13.12
1.391036
23.6
NAME AIA GROUP LTD ALUMINUM CORP-H
NAME
PRICE
Day %
POWER ASSETS HOL
58.1
1.043478
3710105
4192516
SANDS CHINA LTD
24.5
5.603448
21502739
SINO LAND CO
11.62
3.014184
7615879
SUN HUNG KAI PRO
91.15
1.165372
6158036
SWIRE PACIFIC-A
89.7
0.8998875
2031168
TENCENT HOLDINGS
226
3.10219
4645322
19.82
1.954733
8865354
9.5
4.625551
15182122
42.55
2.6538
5446874
65.75
1.231717
3953668
CNOOC LTD
15.4
3.355705
83694590
COSCO PAC LTD
10.5
5.315948
8549205
20641880
ESPRIT HLDGS
9.89
-1.001001
11856229
1.505376
17142034
HANG LUNG PROPER
26.2
1.550388
7913759
TINGYI HLDG CO
12.46
2.635914
4367833
HANG SENG BK
106
0.56926
1918770
WANT WANT CHINA
CHEUNG KONG
94.6
2.159827
4937781
HENDERSON LAND D
42.65
2.647413
4490849
WHARF HLDG
CHINA COAL ENE-H
6.34
4.10509
54056690
HENGAN INTL
74.95
1.010782
2100660
HONG KG CHINA GS
16.42
1.108374
18331854
110
2.899906
5818647
68.55
0.5869406
30881138
BELLE INTERNATIO BOC HONG KONG HO CATHAY PAC AIR
CHINA CONST BA-H
CLP HLDGS LTD
NAME
MOVERS
48
5.29
2.718447
423590756
CHINA LIFE INS-H
19.96
3.312629
47875748
CHINA MERCHANT
23.45
4.222222
4330598
CHINA MOBILE
84.75
1.924233
25162190
HUTCHISON WHAMPO
66.5
2.307692
7954594
CHINA OVERSEAS
17.98
2.508552
33468472
IND & COMM BK-H
4.29
2.631579
402897142
CHINA PETROLEU-H
6.88
2.228826
87836890
LI & FUNG LTD
14.82
2.489627
18516911
HIGH
19500.13
CHINA RES ENTERP
22.95
2.914798
4848071
MTR CORP
26.45
1.147228
2652289
LOW
18970.91
CHINA RES LAND
15.8
0.7653061
9430294
NEW WORLD DEV
9.01
1.693002
14564627
CHINA RES POWER
15.9
2.316602
11935395
52W (H) 22835.03
PETROCHINA CO-H
9.95
2.366255
80156827
CHINA SHENHUA-H
27.05
3.244275
19805874
PING AN INSURA-H
61.7
3.350084
10933575
(L) 16170.35
HONG KONG EXCHNG HSBC HLDGS PLC
1
VOLUME
0 19510
INDEX 19441.46
18970
27 -Jun
29-Jun
Hang SENG CHINA ENTErPRISE INDEX NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.09
3.691275
144261895
AIR CHINA LTD-H
4.54
1.339286
7686429
ALUMINUM CORP-H
NAME
PRICE
DAY %
VOLUME
CHINA PACIFIC-H
24.9
3.966597
9861984
CHINA PETROLEU-H
6.88
2.228826
87836890
3.3
2.484472
16000283
CHINA RAIL CN-H
6.41
2.889246
7253282
ANHUI CONCH-H
20.95
1.699029
9526399
CHINA RAIL GR-H
3.22
2.875399
20227330
BANK OF CHINA-H
2.94
2.439024
357954491
CHINA SHENHUA-H
27.05
3.244275
19805874
5.19
3.8
28882944
CHINA TELECOM-H
3.37
1.812689
62623234
14.62
0.4120879
1976660
DONGFENG MOTOR-H
11.9
-0.1677852
18886496
CHINA CITIC BK-H
3.95
3.403141
35884748
GUANGZHOU AUTO-H
6.44
-0.9230769
6536904
CHINA COAL ENE-H
6.34
4.10509
54056690
HUANENG POWER-H
5.82
2.464789
29074334
CHINA COM CONS-H
6.77
1.651652
16813078
IND & COMM BK-H
4.29
2.631579
402897142
CHINA CONST BA-H
5.29
2.718447
423590756
JIANGXI COPPER-H
16.94
2.171291
10191689
BANK OF COMMUN-H BYD CO LTD-H
3.42
1.785714
29367272
PETROCHINA CO-H
9.95
2.366255
80156827
19.96
3.312629
47875748
PICC PROPERTY &
8.67
1.048951
21972637
CHINA LONGYUAN-H
5.05
1.405622
10107704
PING AN INSURA-H
61.7
3.350084
10933575
CHINA MERCH BK-H
14.46
2.263083
19908541
SHANDONG WEIG-H
8.54
0.9456265
6350767
CHINA COSCO HO-H CHINA LIFE INS-H
CHINA MINSHENG-H
6.87
1.627219
27414982
SINOPHARM-H
21.3
5.970149
9693490
CHINA NATL BDG-H
8.29
0.241838
52654657
TSINGTAO BREW-H
44.05
-1.343785
9591846
11.08
2.973978
4764320
WEICHAI POWER-H
30.55
1.495017
2466040
CHINA OILFIELD-H
NAME YANZHOU COAL-H
PRICE
DAY %
11.98
1.697793
24927713
2.6
2.766798
26627567
9.79
0.6166495
20116227
14.94
1.356852
4121309
ZIJIN MINING-H ZOOMLION HEAVY-H ZTE CORP-H
MOVERS
37
3
VOLUME
0 9600
INDEX 9574.84 HIGH
9590.2
LOW
9314.44
52W (H) 12902.97 (L) 8058.58
9310
27-Jun
29-Jun
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.58
-0.3861004
50291950
DONGFANG ELECT-A
17.98
0.3348214
10689503
SANY HEAVY INDUS
13.86
-0.4310345
13805845
AIR CHINA LTD-A
6.19
0.6504065
15596340
EVERBRIG SEC -A
13.04
-0.9870919
6186616
SHANDONG GOLD-MI
33.3
1.400731
5763879
ALUMINUM CORP-A
6.21
0.6482982
9324966
GD MIDEA HOLDING
11.14
0.8144796
24211551
SHANG PUDONG-A
8.09
-0.4920049
43691987
14.68
-0.9446694
19589837
GD POWER DEVEL-A
2.68
-0.7407407
47819454
SHANGHAI ELECT-A
4.56
0
8812216
13614684
GEMDALE CORP-A
6.65
2.623457
59552470
SHANXI LU'AN -A
20.77
0.144648
14727474
NAME
ANHUI CONCH-A
NAME
BANK OF BEIJIN-A
9.76
BANK OF CHINA-A
2.81
-0.3546099
14521856
GF SECURITIES-A
29.92
0.3017097
6400046
SHANXI XINGHUA-A
40.39
7.163704
12099764
4.5
-0.8810573
43037480
GREE ELECTRIC
20.78
-0.3357314
11237771
SHANXI XISHAN-A
15.57
-0.1923077
12871768
4.28
-0.9259259
20206582
GUANGHUI ENERG-A
13.65
1.336303
17303802
SHENZ DVLP BK-A
15.15
-0.06596306
15564511
20.27
2.064451
4487290
GUIZHOU PANJIA-A
27.18
1.116071
8937145
SHENZEN OVERSE-A
6.52
2.194357
29583486
CHINA CITIC BK-A
3.98
-0.5
12179897
HAITONG SECURI-A
9.63
0
43211106
SUNING APPLIAN-A
8.58
2.264601
42277222
CHINA CNR CORP-A
3.96
-1.246883
30253554
HANGZHOU HIKVI-A
28.16
3.529412
6077941
TSINGTAO BREW-A
38
-0.4975124
5307162
CHINA COAL ENE-A
7.72
-0.2583979
12929783
HENAN SHUAN-A
61.64
-0.3878474
4400994
WEICHAI POWER-A
29.69
0
4603344
CHINA CONST BA-A
4.18
-0.4761905
15183073
HONG YUAN SEC-A
16.68
0.8464329
10839260
WULIANGYE YIBIN
32.95
0.5799756
29135144 6100441
BANK OF COMMUN-A BAOSHAN IRON & S BYD CO LTD -A
-0.1023541
NAME
CHINA COSCO HO-A
4.6
-0.862069
6270445
HUATAI SECURIT-A
10.48
-0.1904762
14453043
XCMG CONSTRUCT-A
14.3
-0.27894
CHINA CSSC HOL-A
23.23
1.131911
6644470
HUAXIA BANK CO
9.41
-0.6335797
21607287
XIAMEN TUNGSTEN
44.63
2.104782
9491413
CHINA EAST AIR-A
4.19
0.2392344
13608360
IND & COMM BK-A
3.94
-0.2531646
27465364
YANGQUAN COAL -A
15.39
0.5882353
19318774 1965638
2.84
0
27338941
INDUSTRIAL BAN-A
12.97
-0.0770416
25516444
YANTAI CHANGYU-A
68.81
2.30449
CHINA LIFE INS-A
18.39
0.4918033
12699836
INNER MONG BAO-A
40.9
3.649265
55861922
YANTAI WANHUA-A
13.58
1.722846
6143997
CHINA MERCH BK-A
10.85
-0.6410256
35434997
INNER MONG YIL-A
20.42
-0.7774538
36838291
YANZHOU COAL-A
19.07
0.4741834
4909442
CHINA MERCHANT-A
11.63
0.1722653
10390853
INNER MONGOLIA-A
4.97
1.844262
51981071
YUNNAN BAIYAO-A
59.9
1.045884
2829852
CHINA MERCHANT-A
24.99
1.875255
6649021
JIANGSU HENGRU-A
28.9
0.6617903
3253824
ZHONGJIN GOLD
21.59
0.3252788
7843224
CHINA MINSHENG-A
5.98
-0.1669449
59399567
JIANGSU YANGHE-A
137.99
2.55667
2192343
ZIJIN MINING-A
3.9
0.5154639
25282561
17.08
3.452453
12560708
JIANGXI COPPER-A
23.94
0.1254705
7610609
ZOOMLION HEAVY-A
10.18
1.495513
26048674
12.84
1.341752
4635851
ZTE CORP-A
13.98
0.1432665
13412388
15.45
1.178782
19878503 17302929
CHINA EVERBRIG-A
CHINA OILFIELD-A
22.52
1.532913
18493116
JINDUICHENG -A
6.25
-0.7936508
18442218
JIZHONG ENERGY-A
CHINA RAILWAY-A
4.4
-1.123596
10727045
KANGMEI PHARMA-A
15.49
0.4539559
CHINA RAILWAY-A
2.53
-1.55642
20084782
KWEICHOW MOUTA-A
241.85
1.128999
2573126
42.8
1.158119
15574411 17701709
CHINA PACIFIC-A CHINA PETROLEU-A
CHINA SHENHUA-A CHINA SHIPBUIL-A CHINA SOUTHERN-A
22.11
-1.645907
18135496
LUZHOU LAOJIAO-A
5.1
-1.734104
29489995
METALLURGICAL-A
2.46
-0.8064516
4.66
1.084599
16729074
NARI TECHNOLOG-A
18.54
-0.8025682
9883439
2.54
0.3952569
12179255
CHINA STATE -A
3.3
-1.197605
42473610
NINGBO PORT CO-A
CHINA UNITED-A
3.74
0.5376344
36820277
PANGANG GROUP -A
6.64
0.9118541
39776262
9.06
0.1104972
MOVERS
159
127
14 2475
INDEX 2465.238
CHINA VANKE CO-A
8.98
0.7856341
29145688
PETROCHINA CO-A
11491632
HIGH
2473.54
CHINA YANGTZE-A
6.61
0.9872612
10441617
PING AN INSURA-A
46.1
0.7870573
18592981
LOW
2418.86
CITIC SECURITI-A
12.57
-0.4750594
49423460
POLY REAL ESTA-A
11.6
2.292769
29689785
CSR CORP LTD -A
4.46
-2.192982
27922344
QINGDAO HAIER-A
11.66
-0.5119454
5564998
DAQIN RAILWAY -A
6.99
-0.56899
23976867
QINGHAI SALT-A
33.65
-0.355345
11181589
DATANG INTL PO-A
5.74
1.953819
6183287
SAIC MOTOR-A
13.08
-8.46746
82599458
52W (H) 3140.102 (L) 2254.567
2415
28 -Jun
2-Jul
FTSE TAIWAN 50 INDEX NAME ACER INC
PRICE DAY %
Volume
NAME
PRICE DAY %
Volume
NAME
PRICE DAY %
30.9
0.3246753
10639373
FORMOSA PLASTIC
80.2
0.5012531
4848940
TAIWAN MOBILE CO
25
2.249489
37038387
FOXCONN TECHNOLO
108
0.4651163
9112098
TPK HOLDING CO L
ASIA CEMENT CORP
37.1 -0.9345794
4441255
FUBON FINANCIAL
30.35
1.845638
21073578
ASUSTEK COMPUTER
274
0.9208103
3887444
HON HAI PRECISIO
89 -0.4474273
22939828
12 -0.4149378
17822580
HOTAI MOTOR CO
ADVANCED SEMICON
AU OPTRONICS COR CATCHER TECH
194
0.5181347
609944
Volume
99.8
1.319797
7904082
367.5
-1.737968
6132255
TSMC
83.3
2.460025
61302033
UNI-PRESIDENT
47.2 -0.8403361
UNITED MICROELEC
13.4
3.875969
71831684
5517191
201
1.259446
12471607
HTC CORP
390.5
0.2567394
6865351
WISTRON CORP
37.5
2.739726
15329894
CATHAY FINANCIAL
29.95
2.393162
42462617
HUA NAN FINANCIA
16.45
0
8150676
YUANTA FINANCIAL
13.8
1.845018
24488952
CHANG HWA BANK
15.8
0.6369427
13389474
LARGAN PRECISION
607
-1.779935
1057276
YULON MOTOR CO
52 -0.7633588
5934533
CHENG SHIN RUBBE
75.1
0.1333333
3123137
LITE-ON TECHNOLO
37.6
0.8042895
6162881
CHIMEI INNOLUX C
12.3
0
17534186
MEDIATEK INC
269
-1.465201
6332498
CHINA DEVELOPMEN
7.08
0.5681818
59790695
MEGA FINANCIAL H
22.2
1.601831
39253554
CHINA STEEL CORP
27.85 -0.5357143
10855731
NAN YA PLASTICS
53.4
0
3844740
CHINATRUST FINAN
PRESIDENT CHAIN
158 -0.3154574
QUANTA COMPUTER
79.8
0.5037783
17.45
2.647059
53102981
CHUNGHWA TELECOM
93.9
-0.106383
6011357
657222
COMPAL ELECTRON
27.4
0.1828154
7797349
SILICONWARE PREC
32.45
4.00641
11895051
DELTA ELECT INC
89.7
-1.320132
9814737
SINOPAC FINANCIA
11.55
3.125
40152183
FAR EASTERN NEW
32
1.587302
8083916
SYNNEX TECH INTL
72 -0.8264463
2987752
FAR EASTONE TELE
65.2
0.7727975
3433223
TAIWAN CEMENT
35.1 -0.7072136
9260980
FIRST FINANCIAL
17.4
0.2881844
15872473
TAIWAN COOPERATI
17.6
0
4677471
FORMOSA CHEM & F
78.9
0.6377551
5662320
TAIWAN FERTILIZE
68.3
0
2785015
FORMOSA PETROCHE
80.9
0
1185633
TAIWAN GLASS IND
25.55
1.996008
3004302
7258758
MOVERS
29
15
6 5080
INDEX 5061.38 HIGH
5073.06
LOW
4922.71
52W (H) 6026.51 (L) 4643.05
4920
28-Jun
2-Jul
July 3, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GAlAXy ENTErTAINMENT
MElco crowN ENTErTAINMENT
MGM cHINA HolDINGS 29.4
19.4
11.9
19.2
11.8 29.2
19.0
11.7
18.8
Max 19.38
Average 19.064
Min 18.66
last 19.16
18.6
SANDS cHINA lTD
Average 24.197
Max 25.05
11.6 Max 29.3
Average 29.225
Min 29.1
Min 23.55
last 24.5
25.1 24.9 24.7 24.5 24.3 24.1 23.9 23.7 23.5
Min 11.56
last 11.72
18.5
14.3
18.3
14.2
18.1
14.1
17.9
14.0
17.7
13.9 13.8 Max 14.38
Average 14.190
PRICE
WTI CRUDE FUTURE Aug12
83.23
-2.036252354
-16.05648008
111.3799973
77.27999878
BRENT CRUDE FUTR Aug12
95.34
-2.515337423
-9.467287057
124.6999969
88.48999786
GASOLINE RBOB FUT Aug12
257.29
-2.238012007
-4.246371418
326.7099857
243.0099964
GAS OIL FUT (ICE) Aug12
841.25
-0.237177587
-6.423804227
1046.5
801
2.821
-0.106232295
-13.88888889
4.921000004
2.174999952
HEATING OIL FUTR Aug12
DAY %
YTD %
(H) 52W
Min 13.88
17.5
last 14.28
Max 18.38
Average 18.029
264.96
-2.225174361
-6.825614516
332.949996
250.8399963
1591.83
-0.3518
1.7202
1921.18
1486.3
Silver Spot $/Oz
27.3744
-0.4433
-1.6548
44.2175
26.085
Platinum Spot $/Oz
1437.9
-0.6838
3.1122
1915.75
1339.25
Palladium Spot $/Oz
577.25
-0.8485
-11.6679
848.37
537.54 1832.25
LME ALUMINUM 3MO ($)
1911
3.577235772
-5.396039604
2675.25
LME COPPER 3MO ($)
7685
4.062288422
1.118421053
9905
6635
LME ZINC
1877
4.626532887
1.734417344
2539.5
1718.5
3MO ($)
LME NICKEL 3MO ($)
16730
3.176071539
-10.58257616
25195
15980
14.575
0.586611456
-3.027278776
18
13.95499992
654.75
3.15084679
11.68443497
673.5
499
WHEAT FUTURE(CBT) Sep12
769
1.551667217
9.583184895
853.5
606.75
SOYBEAN FUTURE Nov12
1442
0.998073892
19.74257837
1455.75
1115.75
172.75
1.200937317
-26.25400213
288.8500061
AGRICULTURE ROUGH RICE (CBOT) Sep12 Dec12
COFFEE 'C' FUTURE Sep12
PRICE
(L) 52W
Gold Spot $/Oz
last 18.06
Min 17.56
MAJORS
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
DAY %
1.0256 1.5666 0.952 1.2621 79.53 7.9891 7.7564 6.3486 55.625 31.6 1.2671 29.88 41.968 9382 81.567 1.20146 0.80563 8.0235 10.0841 100.38 1.03
YTD %
0.1758 -0.261 -0.3571 -0.3631 0.3395 0.02 0.0129 0.0851 0.0225 -0.1266 -0.1578 -0.0234 0.4217 0.5436 0.1606 -0.0233 0.0981 -0.4873 -0.3491 0.6575 -0.0097
(H) 52W
0.4604 0.7914 -1.4601 -2.6233 -3.2944 0.1314 0.1418 -0.8443 -4.6022 -0.1582 2.3282 1.3353 4.4605 -3.3362 -3.8435 1.2759 3.4458 1.3797 2.6567 -0.7173 0.0097
(L) 52W
1.1081 1.6618 0.9772 1.4578 84.18 8.0449 7.8113 6.4747 57.3275 31.96 1.3199 30.716 44.35 9662 88.637 1.24736 0.90677 9.4168 11.6817 117.74 1.0311
0.9388 1.5235 0.7071 1.2288 75.35 7.9823 7.7529 6.2769 43.855 29.63 1.1992 28.661 41.879 8458 72.057 1.00749 0.79505 7.8544 9.8423 95.6 1.0288
MACAU RELATED STOCKS (H) 52W
(L) 52W
ARISTOCRAT LEISU
NAME
PRICE 2.45
DAY % YTD % -11.23188
11.36363
3.25
1.88
VOLUME CRNCY 5415656
150.0999908
CROWN LTD
8.53
0.4711425
5.438811
9.29
7.45
1273055
SUGAR #11 (WORLD) Oct12
21.33
1.523084246
-6.570302234
26.03999901
19.23999977
AMAX HOLDINGS LT
0.076
1.333333
-12.64368
0.119
0.06
4819500
COTTON NO.2 FUTR Dec12
71.46
0.182251507
-18.64754098
102.25
64.61000061
BOC HONG KONG HO
23.6
1.505376
28.26087
24.45
14.24
17142034
0.238
0
3.478259
0.4
0.204
4000
3.03
1
8.214288
4.3
2.3
43000 33468472
CENTURY LEGEND CHEUK NANG HLDGS
World Stock MarketS - Indices NAME
CHINA OVERSEAS
17.98
2.508552
38.52081
18.48
9.99
CHINESE ESTATES
8.96
-0.2227171
-28.32
13.68
8.3
228500
CHOW TAI FOOK JE
9.6
0.3134796
-31.03448
15.16
8.55
7222500
EMPEROR ENTERTAI
1.37
0.7352941
23.42342
2.04
0.97
710000
FUTURE BRIGHT
0.98
3.157895
133.3333
1.09
0.3
3600000
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
12880.09
2.204605
5.422771
13338.66016
10404.49
19.16
3.121636
34.55056
24.95
8.69
17196257
NASDAQ COMPOSITE INDEX
US
2935.05
3.002643
12.66338
3134.17
2298.89
HANG SENG BK
106
0.56926
15.02984
125
84.4
1918770
FTSE 100 INDEX
GB
5600.91
0.5341806
0.5138
6084.08
4791.01
HOPEWELL HLDGS
22.1
1.144165
11.27895
24.903
18.56
2115528
DAX INDEX
GE
6470
0.8372453
9.691691
7523.53
4965.8
HSBC HLDGS PLC
68.55
0.5869406
16.18644
78.85
56
30881138
NIKKEI 225
JN
9003.48
-0.03663907
6.482652
10255.15
8135.79
HUTCHISON TELE H
3.59
0.5602241
20.06689
3.71
2.37
2329152
HANG SENG INDEX
HK
19441.46
2.187564
5.462997
22835.03
16170.35
LUK FOOK HLDGS I
16.06
2.554278
-40.73801
46.15
14.7
7314534
MELCO INTL DEVEL
6.16
2.838063
6.759099
10.76
4.3
2659090
CSI 300 INDEX
CH
2465.238
0.1473018
5.094171
3140.102
2254.567
MGM CHINA HOLDIN
11.72
0.5145798
22.1832
17.183
7.6
3631953
TAIWAN TAIEX INDEX
TA
7345.16
0.6699304
3.861382
8842.17
6609.11
MIDLAND HOLDINGS
3.73
-1.583113
-5.66627
5.217
2.887
1327887
NEPTUNE GROUP
0.089
-2.197802
-19.81982
0.151
0.08
0
NEW WORLD DEV
9.01
1.693002
43.92971
11.279
6.13
14564627
SANDS CHINA LTD
24.5
5.603448
11.61731
33.05
14.9
21502739
SHUN HO RESOURCE
1.13
0
13
1.32
0.82
0
1.520913
4.332402
4.668
2.241
2590167 7757686
GALAXY ENTERTAIN
KOSPI INDEX
SK
1851.65
-0.1272917
1.419152
2192.83
1644.11
S&P/ASX 200 INDEX
AU
4133
0.9370071
1.884341
4657.4
3765.9
ID
3991.54
0.909172
4.436119
4234.734
3217.951
FTSE Bursa Malaysia KLCI
MA
1600.85
0.1063065
4.580821
1611.5
1310.53
SHUN TAK HOLDING
2.67
NZX ALL INDEX
NZ
767.961
1.073699
5.228924
806.015
700.441
SJM HOLDINGS LTD
14.28
2.881844
14.18943
20.711
10.079
14.9
-0.4010695
10.8631
18.5
9.8
911820
18.02
2.61959
-7.589744
27.48
14.807
9076114
JAKARTA COMPOSITE INDEX
PHILIPPINES ALL SHARE IX
11.5
wyNN MAcAu lTD 14.4
NAME
CORN FUTURE
Average 11.684
CURRENCY EXCHANGE RATES
NATURAL GAS FUTR Aug12
METALS
Max 11.84
SJM HolDINGS lTD
Commodities ENERGY
29.0
last 29.2
PH
3475.53
0.6571402
14.13742
3518.96
2695.06
SMARTONE TELECOM WYNN MACAU LTD
HSBC Dragon 300 Index Singapor
SI
549.17
2.06
10.65
na
na
ASIA ENTERTAINME
4.04
2.278481
-31.29252
10.8692
3.66
92680
STOCK EXCH OF THAI INDEX
TH
1188.74
1.418809
15.93844
1247.72
843.69
BALLY TECHNOLOGI
46.66
2.055993
17.94742
49.32
24.74
433606
HO CHI MINH STOCK INDEX
VN
419.3
-0.7268509
19.2718
492.44
332.28
BOC HONG KONG HO
3
0
25.14666
3.15
1.81
1500
Laos Composite Index
LO
989.82
0
10.04603
1107.3
876.33
GALAXY ENTERTAIN
2.5
7.296137
33.68984
3.24
1.08
6950
INTL GAME TECH
15.75
2.272727
-8.430237
19.15
13.12
4400677
JONES LANG LASAL
70.37
2.850044
14.87104
99.89
46.01
421184
LAS VEGAS SANDS
43.49
2.83755
1.778611
62.09
36.08
7697057
MELCO CROWN-ADR
11.52
4.44243
19.75052
16.15
7.05
4787582
MGM CHINA HOLDIN
1.55
0
30.06704
2.2131
1.0025
1000
MGM RESORTS INTE
11.16
3.429101
6.999038
16.05
7.4
10462870
13.8
2.071006
17.74744
18.77
7.35
810338
1.8
0
11.97005
2.6037
1.2624
4600
103.72
1.676306
-6.12725
165.4931
95.82
2247741
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalization. All data supplied by Bloomberg unless otherwise indicated.
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business daily July 3, 2012
Opinion
Teach an industry how to fish and maybe it will survive James Greiff Katy Roberts Bloomberg View Editors
M
ost of the news about the world’s oceans is a litany of gloom: rising water temperatures, acidification, bleached coral reefs, tons of Japanese tsunami trash drifting toward North America’s west coast. So it is worth noting when something good is happening with the seas. Last month, the U.S. government reported that six types of fish, including Maine haddock, summer flounder in the mid-Atlantic and Chinook salmon in northern California, had fully recovered in the past year from decades of overfishing. It was the largest number in a single year. Much of the credit goes to a program overseen by the National Oceanic and Atmospheric Administration that limits how many fish can be taken annually. To date, 27 stocks of fish have been restored since 2000. This suggests that, at least along U.S. shores,
there are responsible ways to harvest fish and ensure a reliable source of food. That is good because many U.S. fisheries remain shaky. Out of 537 fisheries the government tracks, reliable data is available for less than half. Of those that are monitored, 21 percent are subject to destructive fishing practices. Sustainable catch rates for the rest are up in the air, though NOAA is required by law to gather the missing data and set annual quotas by year-end.
Catch share isn’t perfect, and it doesn’t promise that fishing stocks can be restored. But it is better than anything else fisheries managers
Reduced harvests
have tried
The fish have help. The same can’t always be said of those who catch them. Quotas mean the industry must live with reduced harvests as populations rebuild. But quotas also tend to force boat operators to haul in as many fish as possible before someone else gets them. Eight regional fisheries management councils, made
up of fleet operators, scientists and government officials, are charged with managing the quotas. They have tried various strategies such as seasonal
closings and limits on fishing permits. They often don’t work. The best alternative is a program known as catch share, which allocates guaranteed fishing rights, usually based on how much each boat or fleet caught in the past. These shares can be used to fish, or be sold or leased to other boat operators – a sort of cap-and-trade for fish. In most areas where catchshare programs have been adopted since 2010, fleets no longer need to harvest as many fish in the shortest time possible. Putting catch share in place hasn’t been easy everywhere. Opponents deny that fishing stocks are in trouble, or they simply object to government interference with anyone’s divine right to fish. Smallboat operators say the sector allocation has made it uneconomical for them to survive, leading to industry concentration. Some consolidation was inevitable: too many people
have chased too few fish for too long. But if catchshare proponents want the program to survive legal attacks, fishing rights need to be awarded equitably. The New England experience also points to a flaw in how NOAA evaluates the success of its policies by looking only at the effects on fisheries. The agency should also assess the economic impact on communities after catchshare programs are adopted. NOAA needs to work harder to gain maximum acceptance of catch share. It can do that by ensuring that those with the most at stake – people who fish for a living – have a say in how the programs are designed and carried out. Catch share isn’t perfect, and it doesn’t promise that fishing stocks can be restored. But it is better than anything else fisheries managers have tried, and it can increase the odds that we don’t end up with oceans stripped of fish. Bloomberg View
editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte 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 3, 2012 business daily | 15
OPINION
One Big Union wires Business
Howard Davies
Leading reports from Asia’s best business newspapers
Business Line Auto majors such as Maruti Suzuki, Bajaj Auto, Hero MotoCorp and Ashok Leyland will announce their June sales figures this week. Tata Motors, Mahindra & Mahindra and TVS Motor have already released theirs. Tata Motors reported a three per cent decline against the same month last year. For TVS Motor, which is struggling to retain market share, the sales figures skidded on a year-on-year basis. With an inventory pile-up forcing companies such as Tata Motors, and Bosh Ltd to shutdown productions temporarily, auto stocks will remain under pressure.
Jakarta Globe State-owned cement maker Semen Baturaja plans to float its shares on the Indonesian Stock Exchange in November, its president director Pamudji Rahardjo said. “Our target for the initial public offering date is October, so the shares can be listed in November”. Baturaja maintains its target of raising up to Rp 1.2 trillion (US$128 million) from the public offering. Semen Baturaja will use the capital from the IPO to finance its expansion. The company plans to build cement factory with projected annual production capacity at 1.5 million tons of cement this year.
Japan Times The largest mega-solar project in Kyoto Prefecture was inaugurated Sunday. It is the first of two solar power facilities, built in a joint venture between SoftBank group’s SB Energy Corp. and the Kyocera group. The second facility is scheduled to go online in September, and each is expected to generate 2.1 megawatts. When both are up and running, their combined capacity will be enough to power around 1,000 households. The company said that critics of renewable energies need to take a long-term view and weigh the future costs of conventional electricity generation.
Business Times CapitaMalls Asia Limited announced on Monday it has successfully established CapitaMalls China Development Fund III (CMCDF III) with a fund size of US$1.0 billion. The move will help enhance CapitaMalls Asia’s investment capacity to expand its footprint in China. CMCDF III, with a fund life of eight years, will focus on investment in the development of shopping malls and properties predominantly used for retail purposes in China. CapitaMalls Asia holds a 50 percent stake in the fund, while the remaining stakes are held by institutional investors from Asia and North America.
Former chairman of Britain’s Financial Services Authority, Deputy Governor of the Bank of England, and Director of the London School of Economics
I
n the last few weeks, the idea of establishing a European banking union has become the latest remedy advanced as a solution to the long-running euro crisis. But, whatever the merits of a banking union – and there are many – proposals to establish one raise more questions than can currently be answered. The motivations of those who advocate a banking union differ markedly. For some, particularly in southern Europe, it is seen as a means of shifting the burden of supporting their indigent banks to those with deeper pockets. For others, especially in the European Union’s Brussels Eurocracy, it is seen as another leap forward in the construction of a European super-state. Taking their cue from the sacred Rome Treaty’s reference to “ever closer union,” the European Commission’s theologians view every crisis as an opportunity to advance their federalist agenda. The European Central Bank has been more thoughtful, though no less enthusiastic, arguing that a banking union should have three objectives. First, stronger eurozone-wide supervision should reinforce financial integration, “mitigate macroeconomic imbalances,” and improve the conduct of monetary policy. How a single EU supervisor would address the problem of imbalances is not explained, but it is surely a worthy aim. The second objective should be to “break the link between banks and sovereigns,” which has been a particularly dangerous feature of the last year, while the third is to “minimise the risks for taxpayers through adequate contributions by the financial industry.” The third aim could be achieved country by country, but it is certainly arguable that an across-the-board banking levy, or a Europewide financial-transaction tax, would eliminate competitive distortions.
Multiple targets How might these laudable objectives be achieved? The European Commission has argued that a fully-fledged banking union would need to rest on four pillars: a single deposit protection scheme covering all EU (or eurozone) banks; a common resolution authority and common resolution fund, at least for systemically important and cross-border banks; a single European supervisor for the same banks; and a uniform rule book for prudential supervision of all banks in Europe. Anyone who has been involved in banking supervision can see at once that these four pillars will require careful construction. Many individual countries have taken a generation to develop their own do-
A banking union of some kind will be implemented, and soon. Otherwise, the eurozone banking system will collapse
mestic schemes. And, in this case, three big political issues have yet to be resolved. First, the identity of the single European banking supervisor remains undecided, and the ECB has seen an opportunity for a power grab. Central bankers in Europe have always resented the narrow monetary-policy mandate given to the ECB under the Maastricht Treaty. Banking supervision was not included among the ECB’s objectives, though one article of the treaty gives the system of European central banks as a whole the task of contributing to effective supervision. They now argue that the simplest solution would be to expand that remit and make the ECB the de facto pan-European supervisor. That is not the outcome favoured by the European Commission, which has only just set up the European Banking Authority. The EBA is closely linked to the Commission itself, and is seen as the natural candidate for a broader role. The Commission has a case, but it also has a problem. During the political horsetrading that preceded the creation of the EBA (together with two equivalent bodies
for securities and insurance), it was agreed that the new authority would be based in London. That seemed logical at the time, but not if the EBA’s role is to be broadened. How could a eurozone supervisor be based outside the eurozone?
Legal hurdles The second unresolved question is how to achieve a banking union in legal terms. Constitutional change on this scale would normally require a new European treaty. But that would take time, and Europe’s leaders have run out of it. Furthermore, there is no guarantee that voters in countries that require a referendum on treaty changes would support a further transfer of sovereignty. So the likely outcome is that, in the EU’s time-honoured fashion, the banking union will be constructed using existing powers, finessing the sovereignty question, and avoiding any reference to public opinion. That points towards reliance on the ECB. The final question is what such a eurozone banking union would mean for the single financial market, and especially for EU countries that are outside the single curren-
cy. Many of them would sign up willingly, as they intend to join as soon as possible, in spite of the euro’s difficulties. But that is not the case for the United Kingdom, and London remains the continent’s biggest financial center, by far. I fear that the French and Germans have now lost patience with the troublesome British, and are reluctant to cut a deal. And Euroskeptic British politicians see this as an opportunity to recast the UK’s relationship with the EU; indeed, for some, it means a chance to negotiate an exit. Opinion in the City of London tends to favour a middle way, which would allow the UK to cling to the benefits of the single market, without conceding unified regulation. That will be hard to pull off. I suspect that a banking union of some kind will be implemented, and soon. Otherwise, the eurozone banking system will collapse. But the consequences of such a step for Europe’s great free-trade experiment could be serious, and, if not managed carefully, could lead to Britain’s withdrawal. The political stakes are high, and the outcome is likely to reflect that. © Project Syndicate
16 |
business daily July 3, 2012
CLOSING PRI returns to power in Mexico
Ozawa leaves Japan’s ruling party
Enrique Pena Nieto claimed victory in Sunday’s Mexican presidential election, a win that would return the once-dominant Institutional Revolutionary Party to power following a 12-year hiatus, after the election authority projected he would lead the field. “The Mexican people have given our party a second opportunity,” Mr Pena Nieto told supporters in a speech at his party’s headquarters in Mexico City. Mr Pena Nieto won between 37.9 percent and 38.6 percent of the vote, topping 30.9 percent to 31.9 percent for Andres Manuel Lopez Obrador of the Democratic Revolution Party.
Former Democratic Party of Japan leader Ichiro Ozawa will leave the ruling bloc to form his own political group, complicating Prime Minister Yoshihiko Noda’s efforts to pass legislation doubling the consumption tax. Lawmaker Kenji Yamaoka submitted a letter of resignation on behalf of 50 lawmakers, 38 from the lower house of parliament and 12 from the upper chamber. Mr Ozawa, 70, and 56 other ruling party legislators voted against the sales tax bill in the lower house on June 26. Mr Ozawa’s new group lacks sufficient numbers to topple the DPJ.
Barclay’s gets record fine for rigging interest rates
that they were operating under an instruction from the Bank of England” to lower its Libor submissions, according to Britain’s Financial Services Authority. At that time, Barclays was concerned about how it was being perceived due to its higher Libor submissions relative to other banks whose reported borrowing costs helped set the rate.
Profit motive
Several major financial firms also on the regulators’ radar
What should the rate be today?
B
arclays Plc Chairman Marcus Agius resigned after the bank was fined a record 290 million pounds (US$455 million) for trying to rig interest rates in a bid to head off pressure for Chief Executive Officer Robert Diamond to quit. “I am truly sorry,” Agius, who had been chairman of Britain’s second-largest bank by assets since 2007, said in a statement today. “Last week’s events, evidencing as they do unacceptable standards of behavior within the bank, have dealt a devastating blow
to Barclays’s reputation.” He is the most senior executive to step down so far following probes by global regulators into whether lenders colluded to manipulate Libor. Lawmakers are pushing for Diamond’s resignation after U.K. and U.S. regulators found the lender “systematically” attempted to rig the London and euro interbank offered rates for profit. At least a dozen firms, including Citigroup Inc., Royal Bank of Scotland Group Plc and UBS AG,
are being probed by regulators worldwide for colluding to rig the rate, the benchmark for more than US$360 trillion of securities, including mortgages, student loans and swaps. Barclays deliberately reported artificially low borrowing costs at the height of the 2008 financial market turmoil after a senior manager discussed external perceptions about the bank’s strength with regulators at the Bank of England. Barclays “believed mistakenly
The Bank of England didn’t instruct Barclays to lower its Libor submissions, the FSA said. Instead, a “misunderstanding or miscommunication” occurred within Barclays as the substance of the conversation was relayed down the chain of command, the FSA said. Separately, Barclays traders routinely coordinated with counterparts from at least four other banks in an attempt to move interest rate benchmarks, according to documents released on June 27 by the U.S. Commodity Futures Trading Commission, the U.S. Justice Department and the U.K. Financial Services Authority. Derivatives traders requested the false submissions in the Libor and Euribor setting process, as they were “motivated by profit and sought to benefit Barclays’ trading positions,” the FSA said. There appear to have been at least two motives for the rigging of Libor. The first was to enable traders to make a profit. The second was to support share prices. The U.K. Serious Fraud Office is considering whether to open a formal investigation, its spokesman said last week. The U.S. Justice Department is conducting its own criminal probe into the attempted manipulation of interbank offered rates.
Low rates boost Asia’s home prices Home prices in China, Australia and Singapore rebounded, boosted by low interest rates
C
hina’s new home prices in June increased for the first time in 10 months, while those in Australia’s eight major cities recorded their largest monthly increase in more than two years as lower mortgage rates encouraged buyers. Singapore prices rebounded to a record in the second quarter. “The quantitative easing in the West is finding its way to Asia, which is perceived to be an engine of growth,” said Alan Cheong, a director at Savills Plc in Singapore. “If interest rates stay low for a prolonged period of time, inflation is always a certainty.” The housing data pushed property stocks higher. The Bloomberg Asia Pacific Real Estate Index climbed 0.5 percent to a two-month high. The gauge tracking property stocks on the Shanghai Composite Index rose the most in more than week, while Singapore’s real estate index increased
to the highest since April 20. China’s home prices increased 0.1 percent from May to 8,688 yuan (US$1,369) per square meter, SouFun said in an e-mailed statement yesterday, based on its survey of 100 cities. Beijing led gains among the nation’s 10 biggest cities, climbing 2.3 percent from May, followed by the southern business hub of Shenzhen, which added 0.8 percent. Prices climbed as the central bank cut lending rates for the first time since 2008. “The rate cut played a big role changing the sentiment on the market,” said Jeffrey Gao, a Shanghaibased property analyst for Macquarie Capital Securities. “The government hasn’t changed the overall direction of the property policy, but it probably will be less stringent on the easing in smaller cities.” In Australia, the median price of dwellings in capital cities was
A$460,000 (US$471,000) last month, according to data from RP Data and Rismark International, as the reserve bank reduced the overnight cash rate target in May and June. In Singapore’s private residential
property price index rose 0.4 percent to a record 206.8 points in the three months ended June, according to estimates released by the Urban Redevelopment Authority yesterday. Bloomberg
Quantitative easing in the West is pushing home prices up in Asia, an analyst says