Macau Business Daily, July 4, 2012 by Business Daily

Year I - Number 68 Wednesday July 4, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00 www.macaubusinessdaily.com

New Century crisis threatens casino IPO

violent attack at a Macau casino-hotel is threatening to derail a Hong Kong initial public offering by a Macau gaming business. It’s also causing embarrassment for the territory’s single biggest casino parent company by gross revenue – SJM Holdings. In a sign of how international investment has changed the politics and management of Macau gambling, the assault on Macau junket boss Ng Wai on June 24 has set off a chain of events and level of scrutiny that

is threatening to spin out of control for those involved – and cost them a lot of money. A-Max Holdings – a Hong Konglisted Macau junket investor – wants the public to invest in a US$200 million (1.6 billion patacas) IPO for Greek Mythology Holdings Ltd. The latter has an interest in SJM-licensed Greek Mythology casino inside Taipa’s New Century Hotel. Amax’s business is difficult to understand even for trained accountants. For two years running

two different Hong Kong audit firms have declined to sign off on the annual results. Mr Ng is a shareholder in Amax and Greek Mythology and a man interested in raising a lot of money. Opinions vary on the reasons. In December 2007, Amax’s newly issued shares raised HK$1.95 billion and were worth HK$0.13 each. Yesterday its shares were worth HK$0.074. On June 15

Amax issued a profits warning to the Hong Kong Stock Exchange. Sources told Business Daily the IPO is for a new hotel tower at New Century. A spokeswoman for Mr Ng claimed yesterday the IPO was aimed at raising cash to develop Cotai plots 7 and 8, pieces of land previously linked with Sands China. More on page 3

Macau Pass eyes cross-border ties Negotiations are underway for a smart-card payment system covering Macau, Hong Kong and Guangdong, Macau Pass director Joe Liu Cheuk Yin told Business Daily. The move comes as Guangdong’s Lingnan Pass and Hong Kong’s Octopus announced they would unify their services in one card, starting July 18. “We will collaborate to be more integrated and facilitate easy payments,” Mr Liu said. Page 4

Black & white success: MCTV moves out of red

HANG SENG INDEX 19770

After being technically bankrupt and technically illegal for the past decade, Macau Cable TV is coming out fighting. Shareholders will soon inject 100 million patacas (US$12.5 million) into the home entertainment business. Its new capital will help plug an accumulated gap of 189.4 million patacas, said the firm’s annual report published yesterday. After that happens the company will be eyeing diversification into telecommunications says chief executive Angela Lam In Nie.

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Legislators want tight grip on budget

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Two legislators have urged the government to amend the budget law to give the assembly more power to oversee large public projects. In a written inquiry, Legislative Assembly member Ung Choi Kun described the law as “outdated” and criticised the legislature’s passive role. A view shared by legislator Ng Kuok Cheong, who says the government spending constantly exceeds the budget estimates.

Name

%Day

NEW WORLD DEV

4.77

CHINA COAL ENE-H

4.57

CHINA LIFE INS-H

4.46

HANG LUNG PROPER

4.39

Lau faces music over La Scala

SINO LAND CO

4.13

HONG KONG EXCHNG

-0.09

TINGYI HLDG CO

-0.10

CHINA PETROLEU-H

-0.15

Secretary for Transport and Public Works, Lau Si Io, will be in the hot seat at the Legislative Assembly today, facing questions over its decision to grant extra land to luxury residential project La Scala last year. The government, meanwhile, confirmed that the project developer, Chinese Estates Holdings, has already submitted a reply against the former’s decision to revoke the original land granted in 2006.

BOC HONG KONG HO

-0.42

CHINA RES POWER

-1.76

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business daily July 4, 2012

macau

Macau Cable TV staunches losses with shot of capital An injection of 100 million patacas will restore Macau Cable TV’s finances to relative health and the company want to break into telecommunications Vítor Quintã

vitorquinta@macaubusinessdaily.com

With accumulated losses of 189.4 million patacas, Macau Cable TV has been on its financial sickbed for a decade

hareholders will soon inject 100 million patacas (US$12.5 million) of new capital into Macau Cable Ltd TV Ltd to keep the company going, chief executive Angela Lam In Nie has told Business Daily.

The capital injection, disclosed yesterday in Macau Cable TV’s annual report, will fill some of the hole dug in the company’s finances by its accumulated losses of 189.4 million patacas.

The company’s registered capital is 100 million patacas. That Macau Cable TV has survived this long is due in large measure to the tolerance of its shareholders and creditors. Their tolerance was rewarded when the company posted a net profit of 5.8 million patacas for last year, meaning it has been profitable for the past two years. Ms Lam said the capital injection would not change the shareholding structure. She said the main shareholder was still public antenna company Kong Seng Paging Ltd. Macau Cable TV has also secured a 100-million-pataca credit facility with several banks. She did not reveal either the names of the banks or if they were located in Macau. “We would like to invest it [the loan] and continue Cable TV’s operations,” she said. She said her company was considering entering the telecommunications business. “If, in the future, we will be developing more services, maybe for a [telecommunications] network, those banks would like to support us,” she said.

Still talking In an interview with Business Daily in May, Ms Lam said Macau Cable TV had been waiting for more than a year for a government decision on its application to offer Internet access through its cable network. Yesterday she said the company had also asked to offer “different kinds of telecommunication services”, including a fixed phone service. “According to our concession contract, we could expand our service from just cable television to telecommunications services. This is the direction telecommunication companies are heading [in] worldwide,” she said. Macau Cable TV was still talking with the government about a telecommunications licence, she said. The director of the Bureau of Telecommunications Regulation, Lawrence Tou Veng Keong, said in May that the bureau was considering a revised application by Macau

Cable TV to offer Internet access. He said there was no deadline for a decision. “It all depends on whether the proposal is in accordance with the concession contract and administrative regulations,” he said. The bureau invited bids for two licences for new fixed telecommunications networks in January. The sole bid came from Companhia de Telecomunicações de MTEL Ltda, even though the bureau said at least six companies had shown interest. In Macau Cable TV’s annual report, Ms Lam wrote that “despite Macau’s breathtaking economic development, several companies with real capacity – and that are already operating here – didn’t want to bid”.

Still deciding She was referring to mobile telecommunications companies Hutchison Telecommunications International Ltd and SmarTone Mobile Communications (Macau) Ltd. “While asking for licences, the companies understood they must invest a lot in a landline network and, considering the time it takes for the construction, they calculated what their return would be,” she said. In the annual report she argues the government must change tack. “The government must, in fact, analyse whether there were problems throughout the licensing procedures and reconsider the case,” she wrote. The Bureau of Telecommunications Regulation said last week that three months after receiving MTEL’s bid, it was still deciding if it could be accepted. If all deadlines were met, then Companhia de Telecomunicações de Macau SARL (CTM) would have a competitor in the fixed-line market by September 2014. “How come they don’t think about Macau Cable TV?” Ms Lam asked. “We already have this kind of network.” Her company has said it could have an Internet-based service up and running in about six months. Ms Lam said the government could have simply taken over the fixed phone network in 2010, when CTM’s control over it ended. CTM had instead been allowed to continue operating the network as a concessionaire and that its call charges “have not dropped”. Meanwhile, she pledged to pursue her company’s suits against the public antenna companies and a claim for 500 million patacas in compensation from the government, which is up for arbitration. Macau Cable TV’s lawyer Luís Almeida Pinto said the company’s concession contract stipulated that all disputes must be sent for arbitration and that neither party could appeal to the courts against the arbitrator’s decision.

July 4, 2012 business daily | 3

MACAU

Amax auditors ‘decline opinion’ on annual results

Vítor Quintã vitorquinta@macaubusinessdaily.com

and Associate Editor

uditors for Hong Kong-listed Macau junket investor Amax Holdings Ltd have declined to give an opinion on its annual results. It’s the second consecutive year an official auditor for the firm has done so. Baker Tilly Hong Kong Ltd concludes there is insufficient information in the results for year ending March 31, 2012 on which to base its audit opinion. Baker Tilly replaced another Hong Kong-based accountancy firm, CCIF CPA Ltd, as Amax’s auditors in February. CCIF had previously declined to give an opinion on Amax’s results for the year ended March 31, 2011. Amax said in a filing it had swapped auditors because it had been unable to come to terms with CCIF on fees. The audit muddle caps several weeks of bad publicity for Amax. On June 24 Ng Wai – a man listed in Amax filings to the Hong Kong Stock Exchange (HKSE) as a Macau VIP operator and a 24.23 percent shareholder in Amax – was attacked with sticks and hammers at the New Century Hotel. Amax in turn has a 24 percent interest in the Greek Mythology casino inside the New Century, states another HKSE filing.

IPO pending The auditors’ rejection comes at an especially sensitive time for Amax. In another HKSE document in March, Amax announced a shareholder vote in favour of an initial public offering (IPO) in Hong Kong for Amax’s associate company Greek Mythology (Macau) Entertainment Group Corp Ltd, the holding vehicle for Greek Mythology casino. It was said at the time that a new holding company – Greek Mythology Holdings Ltd – was to be listed in Hong Kong within two years. Industry sources have told Business Daily the IPO hoped to raise US$200 million (1.6 billion patacas). Some of that money may go to support Amax’s balance sheet. On June 15 Amax issued a profit warning in a stock market statement: “Such decrease was mainly attributable to the decrease in the Company’s share of profit of Greek Mythology (Macau) Entertainment Group Corporation Limited, an associate of the Company…” Amax Holdings’ shares fell 2.63 percent on the day in Hong Kong trading yesterday to end at HK$0.074. According to a third source spoken to by Business Daily, the IPO application has to be signed off by

SJM Holdings Ltd, the Hong Konglisted parent of Sociedade de Jogos de Macau SA that provides the gaming licence for Greek Mythology. On Monday Macau’s gaming regulator was quoted by local broadcaster TDM’s Chineselanguage TV news saying SJM needed to handle the matter ‘properly’. That followed an incident the same day where police and Macau Government Tourist Office officials were called after a stand off between hotel staff and Filipino tourists reportedly turned away by the hotel at the insistence of people said to represent Mr Ng. At chaotic press conference that afternoon his spokeswoman said the hotel was being closed to new guests to “protect” the image of Macau.

rejected its application and later said it was keeping them in reserve. In June this year Sands China withdrew an appeal against the authorities’ decision.

Bulky debts

71% Drop in Amax’s net profit in the year ended March 31

According to a separate Amax filing, another investor bought into Greek Mythology in 2010, reducing Amax’s stake to 24.8 percent from 49.9 percent. Doubts voiced Sources have told Business Daily that Mr Ng is in dispute with his former Amax’s interim annual report for personal and business partner Chen 2012 says Baker Tilly Hong Kong has Mei Huan over the control of New reservations about the capitalisation Century Hotel. In early June two of Greek Mythology (Macau) paid-for advertisements appeared in Entertainment Group Corp Ltd. The Chinese-language newspaper Macao auditor said financial statements for Daily News in the name of Ms Chen. Greek Mythology The first stated Mr casino were Ng had not been unavailable. a shareholder of As stated in a Greek Mythology HKSE filing in ( M a c a u ) March 2011, Entertainment Amax also has Second year in row an Group Corp Ltd indirect interests Amax official auditor since March 2007 in 60 Macau VIP declines to sign off on but had been rooms. This came junket investor’s results involved in the about following administration a memorandum until June 5 this Baker Tilly Hong Kong of understanding year. The second whereby Mr Ng – said in Amax annual said Ms Chen was also known as Ng results to March 31, 2012 the majority owner Man Sun – acquired financial statements for of the New Century a 100 percent Greek Mythology casino Hotel. equity interest in ‘unavailable’ In a press Ace High Limited, conference held a wholly owned yesterday, Lei Greek Mythology Amax subsidiary. Soi Peng, who Mr Ng then injected Holdings Ltd hoping for claimed to be a into Ace High Ltd a US$200 million HK IPO representative “certain percentage of Mr Ng, said of interests” SJM Holdings Ltd must the businessman in Chong Gold sign off on Greek transferred his International Ltd, a Mythology IPO – sources shares to Ms Chen firm incorporated in as part of a plan to Macau operating as get a concession for a Macau VIP gaming table operation Cotai plots 7 and 8. and management company. “Chong Casino operator Sands China was Gold runs 60 VIP gaming rooms,” close to getting the sites but on added the filing. December 2010 the government

KEY POINTS

Amax suffered a drop of 71 percent in net profit in the year ended March 31, and said the decline to HK$161.1 million (US$20.8 million) was mainly because its stake in Greek Mythology had been cut. The company described the year-on-year profit drop as a “remarkable” result. Amax once dominated the city’s junket operations through subsidiary AMA International Ltd thanks to the latter’s ability to negotiate a 1.35 percent commission from casinos on junket players’ rolling chips. That deal was first struck with Melco-PBL (now Melco Crown Entertainment) at its Crown Macau (now Altira) property in December 2007. It led to a war for VIP market share between operators that some industry analysts said increased the bad debt rates in the Macau industry. Unlike in Las Vegas, in Macau there is no allowance against tax for gambling bad debts. Once a bet is made, the nearly 40 percent government tax it accrues must be paid regardless of whether the bet was made using credit, and regardless of whether that credit goes bad. The government’s drafting of a commission cap at 1.25 percent in 2009, the creation of alternative incentive systems such as profit share and the emergence of other junket aggregators saw Amax’s influence wane. Since then Amax Holdings has relied on its Greek Mythology investment for the bulk of its profits, but it has also invested in China’s increasingly lucrative lottery market with operations in Guangxi province, and plans to move into other provinces. Still, the company faces an uncertain future, with the annual, uncertified audit report to March 31, 2012 saying Amax’s debts exceeded its assets by almost HK$9.9 million. Amax said in a filing on Friday it would “actively collect outstanding debts due from an associate” and cut costs. Photo by Manuel Cardoso

Second year in a row an Amax official auditor washes hands of results, raising fears over Greek Mythology’s proposed Hong Kong listing

Greek Mythology casino at New Century Hotel, Taipa – Amax auditors say ‘insufficient’ information available

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HOSPITALITY Roll in, roll out For many years visitors arrived to Macau almost exclusively by sea. The variety of modes of travel and the number points of entry have since increased and the ports are no longer the main entry points, although they are still important. More than 10 million people entered the city through a port last year. The Outer Harbour handled more than 7 million arrivals and the Taipa Ferry Terminal just under 3.5 million – about double the number from three years ago. Interestingly, the number of arrivals by sea consistently exceeds the number of departures by sea.

Macau Pass in talks for delta-wide smart card Macau Pass may collaborate with Hong Kong’s Octopus and Guangdong’s Lingnan Pass, now that Octopus and Lingnan Pass have joined forces Xi Chen

xi@macaubusinessdaily.com

Photo by Manuel Cardoso

Brought to you by

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A smart-card payment system covering Macau, Hong Kong and Guangdong is being negotiated

Since 2008, when arrivals statistics began distinguishing between non-resident workers and tourists, the number of arrivals by sea has exceeded the number of departures by sea by more than 300,000 each quarter. The difference exceeded half a million in the fourth quarter of last year. This indicates that many visitors arrive by sea, most from Hong Kong, and leave some other way for their next destination. That is, they apparently use the city as a transit point for journeys to the mainland.

160 140 120 100 80

acau Pass has been in discussions with Guangdong’s Lingnan Pass and Hong Kong’s Octopus to see whether they can work together on a single method of making payments all over the Pearl River Delta, Macau Pass director Joe Liu Cheuk Yin said. Mr Liu was speaking after Lingnan Pass and Octopus announced that they would unify their services with one smart card. The new card will be issued in Hong Kong and Guangdong from July 18. It will have two chips embedded, one for a yuan account and the other for a Hong Kong dollar account. The new card can be used to pay train, bus, taxi and ferry fares, and to pay for goods and other services at outlets that currently accept Octopus or Lingnan Pass. “We are still in negotiations with

them and we are hoping to find a way to have one system that works for everyone,” Mr Liu said. He said Macau Pass had already made progress in the mainland by collaborating with UnionPay, China’s largest payment network. He said Macau Pass was trying to cement relationships with the various parties involved, so one card might be used for everything. Macau Pass is also open to collaboration with Octopus, which issues cards mainly for paying public transport in Hong Kong. “Macau is a growing market, which Octopus recognises,” Mr Liu said. “We will collaborate with them, to be more integrated and facilitate easy payments for visitors and locals in both Hong Kong and Macau.” Lingnan Pass and Octopus have reportedly said they may expand into Macau next year.

Mr Liu commented that this would be difficult if the three companies did not strike an agreement. “If they are to come in separately, they will first need to follow the financial authority’s regulation and obtain an approval from the government. Then they will also need to build a completely new system that includes both hardware and software development,” he said. Macau Pass has a software support office in Zhuhai. “We already have a mature system and we are actually in the process of re-branding ourselves to develop membership schemes as well as more functions for using the pass.” Macau Pass can be used in some of the city’s car parks, schools, universities, government buildings, supermarkets, convenience stores, bakeries and coffee shops.

Symphony wins big in One Central sale As a consequence, the average load of passengers on ferries is bigger on inward legs of voyages than on the outward legs. Comparing the number of arrivals and departures by sea in each quarter, we find that, on average, ferries bring in 15 percent more people than they take out. The greater number of arrivals than departures can also be seen in the number of inbound sailings, which in most quarters exceeds the number of outbound sailings. J.I.D.

nvestment company Symphony International Holdings Limited has sold two flats at One Central Residences development in Macau “at a gain of approximately 55 percent over” the original cost, the company announced. In a filing sent to the main market of the London Stock Exchange, the company con-

firmed it “has completed the sale of two high-end residential apartments” for US$4.1 million (32.7 million patacas). The firm, that focus on the Asia Pacific market, still owns two other flats in One Central Residences, after buying four units in August 2009. But in April, Symphony said it had “begun looking to divest

these assets” as the Macau property market remained “buoyant”. According to its website, the project managed by Mandarin Oriental Hotel Group is Symphony’s only investment in Macau. The company reported a 6.2 percent increase in net asset value during the first quarter of this year to US$413.5 million.

July 4, 2012 business daily | 5

MACAU

Legislators want more influence over budget Legislative Assembly should have more power to supervise public spending, two members say Tony Lai

tony.lai@macaubusinessdaily.com

he government should amend the budget law to give the assembly more power to oversee large public projects says Legislative Assembly member Ung Choi Kun. Mr Ung said the budget law had not been revised since being enacted in 1983. In a written inquiry made on June 22, which was posted on the assembly’s website on Sunday, Mr Ung described the law as “messy” and “outdated”. Some of the law’s provisions were revoked when Portuguese rule ended in 1999 and others were replaced by the public finance management bylaw. Mr Ung wants the law changed to provide a way for the assembly to oversee spending on public projects without having to go through the government. He said the assembly was powerless to oversee public projects or the budget, and that the government could start projects without its approval. “The Legislative Assembly has a passive role in budget planning.

It cannot carry out enough audits and reviews on budgets involving enormous amounts of public spending,” Mr Ung said in his inquiry. The assembly currently votes on the budget before the start of the fiscal year and reviews the report on the budget at the end of the fiscal year. Mr Ung also asked the government about the progress of a proposal to revise the budget law. The government said last year that it would continue to review such a proposal. A second member of the Legislative Assembly, Ng Kuok Cheong, broached similar issues in a written inquiry last month. Mr Ng wants the assembly to have the power to oversee how the money in the budget is spent since he said actual government spending constantly exceeded the budget estimates. He said 25 out of 44 projects costing more than 40 million patacas (US$5 million) in this year’s investment plan had exceeded their budgets.

The Legislative Assembly has only a passive role in overseeing the government’s budget, says Ung Choi Kun

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business daily July 4, 2012

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Welcome mat out for real estate experts

Brought to you by

Crisis and loans The world economy, in the last few years has been slowly trying to recover from the crisis initiated in early 2008. Non-performing loans are often a good indication of the level of stress suffered by economic agents. Measured by that standard, the crisis has not really touched the region. The level of non-performing loans, as measured by their share of the total value of loans, even at the height of the crisis did not exceed 1.2 percent. Although in the second half of 2008, it should be noted, it rose very noticeably, in relative terms, especially in the case of non-residents.

Non-performing loans, as percentage of total

A two-day international conference on the property market could improve city’s academic reputation and housing market Xi Chen

xi@macaubusinessdaily.com

% 1.2

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Then, it jumped from 0.05 percent, in August 2008, to more than 1 percent in December. But, again, in absolute terms, these values are of minor significance. The crisis, if there was one, was essentially over by August-September 2010, when the value of non-performing loans fell to figures around or below 0.005 percent – a drop so steep and almost simultaneous for both residents and non-residents that suggests a cleaning of the balance sheets or a re-scheduling of debt, or both. In any case, their level has persisted at negligible levels until today.

Operational results, as percentage of loans

A conference on the mainland’s property market could shed light on the market here, an expert says

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As might be expected in a period of abundant money and low interest rates, the operational results as a percentage of loans never reached very high figures. Although loans have more than doubled in volume, the relation between the two variables has been slow to improve throughout the period. As broadly measured by the ratio between the level of loans and the operational results, outcomes have improved – but only marginally. The first four years of 2012 suggest the trend has stabilised. However, strong judgements on that matter are premature, as the ratio may well improve during the remainder of the year. J.I.D.

he fourth Global Chinese Real Estate Congress will focus on the mainland’s property market but could shed light on property woes here, the conference’s chairwoman Rose Neng Lai told Business Daily. Up to 600 international experts from academia and industry will cover topics ranging from property market development, housing policies, property investment and financing, to building urban infrastructure in a series of forums and panel discussions. The conference began yesterday and finishes tomorrow. Although the event focuses on the mainland, Ms Lai says Macau’s market is so closely linked to the mainland’s that any discussion will help shed light on the market here. A handful of Macau’s academic associations are participating, including a team of 10 representatives from the Association

of Property Agents and Realty Developers led by legislator Ung Choi Kun. The event will also significantly help improve the territory’s academic profile, the associate dean of Faculty of Business Administration said. “There is not yet an international platform for scholars from mainland China to exchange ideas internationally, mainly due to the language barrier. This platform has become very successful in a very short time,” Ms Lai said. The congress was launched in Shanghai five years ago and has since visited Beijing, Taipei, Hangzhou, before coming to Macau. In the coming years, the United States cities of New York and Washington are scheduled to host the conference. “The conference is becoming bigger and bigger. We have scholars from many countries participating. This year we had

the most submission of papers.” She said this indicated the territory’s academic reputation was improving, particularly through research at the University of Macau. “Malaysia and Thailand also want to host the conference but they do not have a good enough academic platform at the moment,” she said. Keynote speakers include Cheng Siwei, dean of the School of Management of the Graduate School of the Chinese Academic Sciences, Nobel winner for economic sciences James Mirrlees, and Theodore Tozer, the president of the United States National Mortgage Association or Ginnie Mae. The event has been organised by Global Chinese Real Estate Association and is supported by Macau Economic Services, the Asia-Pacific Academy of Economics and Management at the University of Macau, and several casino operators.

Weather Beijing 30/24o C Changchun 25/16o C

Harbin 27/18o C

Xian 34/23o C Shanghai 37/28o C Chengdu 26/21o C Kunming 26/18o C Haikou 32/26o C Sanya 31/26o C

Guangzhou 34/24o C

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July 4, 2012 business daily | 7

MACAU

Legislators to tackle La Scala analysis The pros and cons of keeping the border open around the clock

Secretary Lau Si Io will be asked to explain the grant of extra land for La Scala to the assembly

Ricardo Siu

Associate Professor of Business Economics, FBA, University of Macau

An additional land grant for the La Scala development, Taipa’s wetland and public housing are up for discussion at the Legislative Assembly today Tony Lai

tony.lai@macaubusinessdaily.com

ecretary for Transport and Public Works Lau Si Io will be in the hot seat at the Legislative Assembly today, answering questions about his decision last year to grant more land for a high-end housing project, La Scala. The assembly has already turned down a proposal from members Paul Chan Wai Chi and Ng Kuok Cheong for a public hearing on the land grant. Legislator Au Kam San will read a statement expressing his doubts over Mr Lau’s decision. He argues that Mr Lau, as the most senior official responsible for the proper use of public land, should have been aware that La Scala faced legal problems because the Public Prosecutions Office and the Commission against Corruption must have asked the government for information about it.

The government said last month that it would begin the process of revoking another grant of land for La Scala, approved in 2006. That grant formed part of the corruption case against former government secretary Ao Man Long. The Land, Public Works and Transport Bureau has said that the developer of La Scala, Chinese Estates Holdings Ltd, has presented its arguments for keeping the land granted in 2006, and that the government will study them. The confirmation was first reported by Portuguese-language newspaper Ponto Final. On May 31, a legal adviser for Mr Lau said civil servants had asked the Commission Against Corruption if the extra La Scala land had anything to do with Mr Ao’s trial. It received a reply “which did not include information on any criminal case”. But the Commission Against Corruption said it had “explicitly stated that

the plots were involved in an ongoing investigation”. The assembly will also discuss the use of wetland in Taipa, a natural habitat for egrets. Member José Chui Sai Peng will ask why the government planned to turn the land, near the Taipa Museum Houses, into a traffic information centre instead of protecting it. Broadcaster TDM reported yesterday that Mr Chan and fellow-member Gabriel Tong Io Cheng would soon submit to the government proposals for keeping the wetland intact. Mr Chan and another legislator, Ho Ion Sang, will tackle public housing in today’s session. They will ask the government for a date for the re-opening of applications for public housing, and for assurances about the future supply of subsidised homes for purchase. Other issues the assembly will consider are human resources policy and social security contributions.

Macau, HK sales save Bauhaus blushes

Held up

The retailer’s turnover in the two cities grew to HK$756.2 million in the year to March

igher sales and corresponding profits in its Macau and Hong Kong outlets have shielded Hong Kong retailer Bauhaus International Holdings Ltd from the full effects of the slowdown in the mainland. The company’s annual report shows sales here and in Hong Kong accounted for two-thirds of its takings. Sales grew by 16.6 percent in the year ended March 31 to HK$756.2 million (US$94.5 million). The retailer made a combined gross profit of HK$149.4 million in its 79

shops here and in Hong Kong. Gross profit overall grew by about one-third. Chairman Wong Yui Lam said Bauhaus would “focus on nurturing the growth of existing retail stores, rather than rapidly expanding [the] sales network” in Macau and Hong Kong. Mr Wong said the company would also seek to close shops that perform poorly, and to move some to premises with lower rents. The company’s brands include Bauhaus, Tough Jeansmith, Salad and 80/20. Supported by the

n congruence with the dramatic social and economic changes here since the dawn of this new millennium, as well as the expected integration of this tiny city-state with the Pearl River Delta (PRD) region, keeping the border open around the clock has been an appealing but challenging proposal for the government and the people. With the support and coordination of the central government, realisation of this proposal is just a matter of time. Nevertheless, taking effective steps to grasp the benefits, and planning ahead to mitigate any adverse effects on society and the economy are necessary. According to official estimates made in last year, the number of people using the Gongbei crossing has surpassed the number using the Lo Wu crossing between Hong Kong and Shenzhen, making it China’s busiest border crossing for passengers. With 94 million people using the Gongbei crossing in 2011 – the equivalent of nearly half the population of Macau using it every day – it is evident that the pressure on customs needs to be relieved. Indeed, ensuring the efficiency of the flow of people between Macau and Zhuhai is an essential strategic step toward making Macau a world tourism and leisure centre. Besides, on top of the increasing number of tourists, the number of Macau people going back and forth between Macau and Zhuhai has risen, especially cross-border shoppers and commuters who live in Zhuhai and work in Macau.

performance of its outlets here and in Hong Kong, Bauhaus’s global turnover rose to HK$1.16 billion in the past financial year, 14.6 percent more than a year before. But its net profit dropped by more than one-third to HK$75.9 million, with a loss of HK$18.7 million in the mainland attributed to tighter credit controls there. Though sales in the mainland grew by onefifth to HK$135.8 million, franchised turnover there fell by 31.2 percent to about HK$40 million. T.L.

To cope with the huge and rising tide of people, the expansion of customs and longer opening hours have become necessary. While the former has been an ongoing project for a decade, including the recent expansion of customs at the Gongbei crossing and the development of the Lotus crossing to Hengqin Island to divert people away from the Gongbei crossing, the latter has been held up by discussions between the relevant authorities for a number of years. Nevertheless, given the aforementioned facts, extending the hours that the border is open from 17 hours a day now to 24 hours is indisputably an appealing and essential move. As keeping the border open around the clock is necessary to facilitate the city’s integration with the PRD, certain disadvantages which may counter the benefits should not be overlooked. Considering the differences in social and economic circumstances, adverse effects on society and the economy here are likely to be felt. For example, the way of life

of various kinds of residents, especially those living close to the crossing and the younger generation, may undergo substantial changes. Besides, owing to price differences in the consumer markets on each side of the border, pressure may be put on certain businesses here, where prices are higher. Despite the gains that the newly developed gaming and tourism sectors expect to reap, some more parochial and traditional sectors of the economy may not necessarily benefit, or even prove to be the losers – for example, small and medium enterprises in the retailing and restaurant businesses.

Necessary factor At the end of May it was announced that the Macau and Zhuhai governments had been given permission to construct a new, pedestrian-only crossing about 800 meters from the packed Gongbei crossing. It is also planned that this new crossing will be linked to the Guangzhou-Zhuhai intercity railway and Macau’s Light Rail Transit (LRT) elevated railway. It is also proposed that – along with making customs checks only on one side of the border instead of both – keeping this new crossing open around the clock should be tried out, and that the experience gained should be used to assess the feasibility of keeping the Gongbei crossing open around the clock. It is evident that Macau’s integration with the PRD will accelerate and that the border may soon be open around the clock. However, to optimise the net benefits to society and the economy, comprehensive and proactive planning must be conducted simultaneously. For example, measures should be planned strategically to divert passenger and cargo traffic to certain times of the day and night. In addition, an effective and efficient round-the-clock internal public transport system should be planned (including any necessary adjustments to the plan for the LRT). Moreover, assistance in moving and refurbishing certain SMEs in the vicinity of the crossings may help ease some of their uncertainty about their business. Last but not least, the possibility of adverse effects on the community should be evaluated carefully and preventive measures formulated. In a nutshell, keeping the border open around the clock will facilitate the integration of Macau with the PRD, hence providing a necessary factor for securing sustainable growth. In congruence with these changes, planning ahead for corresponding internal changes should not be delayed.

8 |

business daily July 4, 2012

GREATER CHINA

China’s service sector speeds up Official services PMI rises to three-month high

hina’s services sector expanded at its fastest pace in three months in June, an official survey showed yesterday, but left intact market expectations that Beijing will deliver more policy measures to support growth in the near future. The latest survey by the National Bureau of Statistics and the China Federation of Logistics and Purchasing (CFLP) showed the purchasing managers’ index for the country’s non-manufacturing sector rose to 56.7 from 55.2 in May, the best reading since a 10-month high of 58.0 recorded in March. The services sector, which includes construction, accounts for about 43 percent of the mainland’s economy output

KEY POINTS June services PMI at 56.7 vs. May’s 55.2 New orders sub-index at 53.7 is year’s highest reading PMIs indicate economy stabilising – official Market expectations remain for more pro-growth policy easing

A reading above 50 indicates expanding activity and one below 50 signals contraction, according to the survey methodology. The reading from the services sector follows two PMI surveys of China’s vast manufacturing industry showing factory activity fell to a seven-month low in June, dampened by both external and domestic weakness. China’s fast-growing services industry, which accounts for about 43 percent of output in the world’s second largest economy, has so far weathered the global slowdown much better than the factory sector.

“The index shows stable and steady growth momentum of China’s services sector. Taking the official PMI indexes under consideration, they all indicate that China’s current economic growth shows signs of stabilising,” Cai Jin, a vice president at the CFLP, said in a statement accompanying the index. China’s official manufacturing PMI for June confounded market expectations of slippage into contrationary territory and clung to an expansionary reading of 50.2 when it was published on Sunday – albeit at a seven month low. A sub-index measuring new orders

for the services sector r ose to 53.7 in June from May’s 52.5, the highest level so far this year, according to CFLP’s Mr Cai. The input price sub-index fell to 52.1 in June from 53.6 in May, while prices charged held below 50 f or the second straight month, at 48.6 versus May’s 48.5. Easing price pressures provide more room to ease monetary policy without igniting inflation – a key worry for policymakers in Beijing obsessed with managing the impact of costs on social stability. Economists and traders expect the central bank to move soon to cut the required reserve ratio for banks again, and many think another cut to borrowing rates is also possible later this year. China has lowered the required reserve ratio in three 50-basis point steps since November 2011, freeing up an estimated 1.2 trillion yuan (US$190 billion) for fresh lending. It cut benchmark interest rates by 25 bps in early June to 6.31 percent in a surprise move – its first cut since the depths of the global financial crisis. On the fiscal front, Beijing has fasttracked investment projects and rolled out new incentives to spur consumer spending on energyefficient products. Reuters

Mercedes-Benz sk Even as it offers the steepest discounts

hen shopping for a new car last year, James Zhang considered a Mercedes and a BMW, then settled on Audi’s Q7 sport-utility vehicle because he said it suited his status. “Audi makes people look mature and it’s more low-key,” said the construction-company executive from the Chinese port city of Tianjin. “If you drive a Benz or BMW, people may think you are one of those showy nouveau riche.” After opening its first Chinese factory in 2006, Mercedes charged out of the gate and quickly won 22 percent of China’s luxury market. For the past two years, the company has been in a funk. Mercedes’s share today stands at 21 percent, versus 32 percent for Audi AG and 23 percent for Bayerische Motoren Werke AG, according to researcher LMC Automotive Ltd. “I have the impression VW and BMW have put China as top priority and will for the next five to ten years,” said Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler, who has a sell rating on shares of Mercedes’ parent, Daimler AG. “It’s not the impression I get at Daimler.” In the midsize segment, China’s most popular luxury-vehicle category, deliveries of Mercedes E-Class sedans have tumbled 23 percent to 16,111 in the first five months of the year, according to data compiled by LMC. By comparison, sales of the competing Audi A6L have climbed 44 percent to 58,127 and BMW’s 5-series has

gained 44 percent to 39,973. Mercedes says the underperformance is temporary. The company is retooling its Chinese facilities for new models and a bottleneck in the production of the B-Class compact has limited deliveries.

‘Phase-out’ “Some of our current models are experiencing their phase-out periods between 2011 and 2012,” Klaus Maier, CEO of Mercedes-Benz (China), said in an e-mail. Daimler has lagged behind Audi and BMW in China because of its late entry and a limited distribution network, said Thomas Callarman, director of the Centre for Automotive Research at the China Europe International

July 4, 2012 business daily | 9

GREATER CHINA

HTC keeps imports into U.S. InBrief Authorities denied new request to have HTC phones detained HK shares close at 7-week high TC Corp. can continue to

take its newest smartphones into the U.S. while a trade agency investigates whether the phones violate an order that the Taiwanese company stop infringing an Apple Inc. patent. The U.S. International Trade Commission on Monday instituted an investigation into Apple’s claim that HTC continues to infringe a patent in violation of an order issued in December. The agency denied an emergency request to have the HTC phones, including the One X and EVO 4G LTE, detained at the U.S. border. The notice was posted on the agency’s electronic docket. HTC’s phones were held up at the border in May, delaying plans by Sprint Nextel Corp. to sell the HTC EVO 4G. The phones, made in Taiwan, were allowed into the U.S. after HTC assured U.S. Customs and Border Protection that it had worked around the Apple patent. The patent covers a system to detect telephone numbers in e-mails so, when the number on the screen is tapped, they can be stored in directories or called without dialling. Apple filed a complaint last month, accusing HTC of making inaccurate representations to customs officials to bypass the import ban, known as an exclusion order. “The commission finds that Apple has not demonstrated the propriety

Hong Kong’s benchmark bounced to a seven-week high yesterday, reopening higher after a holiday on hopes of more monetary easing by the European Central Bank to revive economic growth. The Hang Seng index closed the day up 1.5 percent at 19,735.5. The China Enterprises index rose 1.4 percent. Coal stocks, which have been hit by weaker demand and worries about oversupply, staged a sharp recovery. Auto stocks in Hong Kong were stark under performers, as offshore investors reacted to reports in local Chinese media that Guangzhou became China’s fourth city to cap annual car sales to help ease worsening traffic gridlock. HTC says it will vigorously defend its case against Apple

of temporary emergency action here,” the Washington- based agency wrote. “The commission will not direct Customs to detain all subject HTC products because the commission does not have the information necessary to determine whether the respondents are currently violating the commission’s limited exclusion order.” HTC said its mobile devices and software were redesigned, and that Apple was making legal arguments regarding infringement it hadn’t made in the original case. Apple had asked that all HTC

phones that run on Google Inc.’s Android operating system be stopped at the border. “HTC confirmed that the notice was received, as an expected matter of process, and will vigorously defend its case,” the company said in an e-mailed statement to Bloomberg News yesterday. HTC, Asia’s second-largest smartphone maker, is counting on its One series of phones to improve its share of a market that reached US$312 billion last year, according to available data. Bloomberg

kids in mainland market

Property boosts Chinese stocks China’s stocks rose for a third day as a pick-up in the property market helped the nation’s service industries expand at a faster pace and speculation grew the government will further ease monetary policy. The Shanghai Composite Index added 0.1 percent to 2,229.19 at the close. The CSI 300 Index rose 0.1 percent to 2,468.72. The central government may not introduce new measures to curb the property market as it has already placed priority on stabilising the market, the 21st Century Business Herald reported yesterday, citing Chen Guoqiang, vice chairman of the China Real Estate Society.

China reports bird flu outbreak Authorities in China’s remote northwestern region of Xinjiang reported an outbreak of bird flu, officials said. The outbreak of the H5N1 strain of avian flu initially killed 1,600 chickens and sickened about 5,500, the agriculture ministry said late on Monday. In an effort to contain the disease, agricultural authorities quarantined the area and culled 156,439 chickens, according to the ministry. The outbreak occurred on June 20 but was only confirmed as H5N1 bird flu on Monday, it said.

Mercedes E-Class 16,111 units sold in the first five months, down 23 percent

Audi A6L 58,127 units sold between January and May, climbing 44 percent

BMW’s 5-series

Mercedes-Benz opened its first Chinese factory in 2006

Business School in Shanghai. “With anything in China, the first mover gets more,” Mr Callarman said. “People are just more familiar with Audi and BMW.” Mercedes began manufacturing in

1.8 million Luxury vehicles expected to be delivered by 2015

39,973 units sold in the first five months, up 44 percent

China two years after BMW and 16 years after Audi. The company cranked up production in the first four years and by 2010 its market share had surged to 21 percent, just behind BMW’s 21.6 percent. Audi’s share that year tumbled 5.9 points to 31 percent, according to researcher IHS Automotive. By 2015, Mercedes plans to double its annual production capacity in the world’s biggest automobile market to 200,000 vehicles annually, though that won’t be enough to keep up with its rivals. BMW plans to quadruple potential output to 400,000 and Audi is seeking to more than triple capacity to 700,000 by the middle of the decade, according to the companies. Deliveries of luxury vehicles in China

are on course to surge 80 percent over four years to 1.8 million by 2015 and overtake the U.S. as the top market for premium automobiles by 2017, Goldman Sachs Group Inc. estimates. China already generates the fattest profit margins for German luxury carmakers because customers in China typically purchase higherend models than buyers in the U.S. or Europe do, Credit Suisse Group AG says. Still, mounting competition, a slowing economy and rising fuel prices have led to a glut of cars in Chinese showrooms this year, forcing dealers to cut prices. Among luxury brands, Mercedes has been offering the steepest discounts, according to cheshi.com, a car pricing website. Bloomberg

Temple plans US$118m IPO The managers of Putuo Mountain, a Buddhist shrine where worshipers go to pray for healthy children, want to raise 750 million yuan (US$118 million) in an initial public offering, China Daily reported yesterday. The Putuo Mountain Tourism Development Co., in the eastern province of Zhejiang, plans to seek the listing after “prudent considerations and a year of preparation,” the newspaper said, citing an official with the site’s management committee. Plans for the offering by one of China’s four main Buddhist mountains come as China’s State Administration for Religious Affairs has criticised local governments for seeking to turn a profit off religious sites.

10 |

business daily July 4, 2012

ASIA

ANA plunges on stock-sale report Japan’s airline seeking to raise up to US$2.6 bln All-Nippon Airways (9202 JT) share price JPY 230

220

210

200

190

8.00 am

ANA intends to raise funds to boost its finances and invest in new planes

ll Nippon Airways Co. said yesterday it is raising up to 211.1 billion yen (US$2.6 billion) in a share sale to buy new planes and to bolster its finances as it faces a resurgent rival in Japan Airlines and increased competition

from budget airlines. The sale process started yesterday and the new shares will be priced on July 18, July 19 or July 20, the company said. ANA is raising the funds before Japan Airlines (JAL) launches its

initial public offering, slated for September and estimated at around US$8 billion. JAL has emerged out of bankruptcy in 2010 with a clean balance sheet and record profits, raising pressure on ANA to bolster

2.00 pm

its financial standing. “The difference in balance sheet strength between the two companies is substantial,” Nicholas Cunningham, a transport analyst at Macquarie Capital Securities in Tokyo said before ANA confirmed the share sale. “Although we do not consider ANA’s balance sheet to be weak, the difference could impact investor sentiment towards the company relative to JAL”. ANA’s net debt/equity ratio stood at 1.6 times as of the end of March, including off balance sheet items, compared to 0.2 times for JAL, Mr

Nomura dumped from DBJ bond sale Change made to avoid ‘disruption’ to the offering

omura Holdings Inc, Japan’s biggest brokerage, was dropped as a lead underwriter for state-owned Development Bank of Japan Inc.’s bond sale this month because of its involvement in leaking insider information. Nomura was replaced by Mitsubishi UFJ Morgan Stanley Securities Co. on the deal, according to a faxed statement from Mizuho Securities Co. yesterday. DBJ, which had said in May that it had hired Tokyobased Nomura as well as Daiwa Securities Group Inc. and Mizuho Financial Group Inc., yesterday said it made the change to avoid “any disruption” to the offering. “We’ve decided to drop Nomura in order to move ahead with our bond issuance without any disruption,” Daisuke Inaba, a Tokyo-based spokesman for DBJ, said yesterday. “We need to avoid a situation where investors hesitate to buy our bonds just because a brokerage, which admitted to having internal control issues and conducted an investigation, helps manage the transaction.” Resona, Japan’s fourth-largest lender, also said Nomura was excluded from a group of underwriters announced yesterday for the issue by its regional banking unit of 25 billion yen (US$315.1 million)

in retail subordinate bonds. The move follows Nomura’s decision to temporarily suspend part of its operations, a Resona spokesman said. The state-backed DBJ said it removed Nomura, but retained Daiwa Securities, which on Monday was dropped by Kawasaki Heavy Industries Ltd as underwriter for a bond issue. Daiwa, the country’s secondranked broker was found by regulators to have leaked inside information ahead of a share offering it underwrote two years ago.

Pressure mounting The lost mandate may increase pressure on Nomura chief executive Kenichi Watanabe to take more steps to restore clients’ confidence after employees gave out information ahead of transactions managed by the bank in 2010. Nomura last week said it will cut top executives’ pay and suspend some operations amid a government crackdown on insider trading. “Nomura and the others that leaked information will see more suspensions for trading and underwriting from Japanese companies and overseas pension funds, which have stricter compliance rules,” said Fumiyuki Nakanishi, an equity strategist at

DBJ replaced Nomura by Mitsubishi UFJ Morgan Stanley Securities as lead underwriter for its bond sale

SMBC Friend Securities Co. in Tokyo. “Cutting the CEO’s pay isn’t enough, that’s what market participants think.” Financial Services Minister Tadahiro Matsushita has called on 12 Japanese brokerages to review how they handle confidential information, he said at a press conference yesterday, adding

that the measure is a response to leaks by a “major” brokerage. Regulators are yet to complete their inspection of Nomura after finding that its staff gave tips on equity offerings by Inpex Corp., Mizuho Financial and Tokyo Electric Power Co. The brokerage concluded an internal investigation on June 29, and

July 4, 2012 business daily | 11

asia Cunningham estimated. Japan’s largest carrier plunged the most in almost 11 years in Tokyo trading yesterday. The airline tumbled 14 percent to 193 yen at the close, the biggest drop since September 2001. It earlier touched 189 yen, the lowest intraday price since at least 1974. “It’s a huge amount,” said Satoshi Yuzaki, a Tokyo-based analyst at Takagi Securities Co. “It’s no surprise that the share price is plummeting.” The fall in ANA’s shares after the reports of its capital raising plan reduced the firm’s market value to around 485 billion yen. ANA issued its statement confirming the plans after the market had closed. “The capital raising buys us time, allows us to accelerate our growth strategy,” said an ANA executive, who declined to be identified because he is not authorised to talk to the media. ANA has hired Nomura Securities and the Japan securities arms of JP Morgan and Goldman Sachs to be among the underwriters for the sale, which would follow a roughly 140 billion yen stock offering in July 2009, one of the sources said. Mitsushige Akino, corporate officer at Ichiyoshi Asset Management, said the upside potential for ANA shares will be limited because investors will be aware that the JAL IPO is due. “Investors will have to be selective on their choices between the two airlines,” Akino said. “The new JAL is a competitive company.” Reuters/Bloomberg

David Jones offer probed Australian regulator examining possible trading irregularities

David Jones said yesterday a U.K. private equity fund withdrew its US$1.69 billion bid

ustralia’s markets regulator is examining possible disclosure and trading irregularities after a takeover offer for David Jones Ltd collapsed days after sending the retailer’s shares soaring. The Australian Securities & Investments Commission plans to

KEY POINTS Resona excludes Nomura from unit’s US$315 mln bond offer DBJ drops Nomura in agency bond offerings

greater, said Andrew Finch, a senior corporate partner at law firm Allens Linklaters. David Jones has become the subject of takeover speculation after a 47 percent share slump last year and as slowing consumer spending prompted it to forecast its smallest annual profit in six years. Analysts at Nomura Holdings Inc. and Macquarie Group Ltd began questioning the credibility of the offer soon after it was announced by David Jones in a June 29 regulatory filing. EB Private Equity had said it would lead a group providing US$850 million in equity, according to the filing. The offer would also include US$450 million of debt from a syndicate of banks and investors, and US$450 million in residual equity for existing David Jones shareholders. The retailer recommended that shareholders use caution and said there wasn’t enough information available about EB Private Equity for David Jones to evaluate the approach. The retailer said in a statement to the stock exchange on Monday that announcements regarding the proposed bid were made to ensure that “there was not likely to be information in the public domain that would lead to trading based on a false market.” Reuters/Bloomberg

RBA holds key rate

DBJ may drop Daiwa if regulator takes action said it had found that some staff appeared to be “willing to do anything to meet sales targets,” according to a report it issued last week. While Nomura is now “half way toward fixing” the breaches and is making progress on addressing short comings in its compliance, the company was initially slow to react to the regulator’s inspection, the minister said. Daiwa is also subject to the government probe, two people

pursue anyone who has broken the law, it said in a statement on its website yesterday. The investigation covers domestic and international markets, it said. David Jones, Australia’s secondlargest department store owner, said yesterday U.K.-based EB Private Equity withdrew a A$1.65 billion (US$1.69 billion) bid, causing the stock to reverse most of its biggest gain in 17 years. The Sydney-based company revealed the offer on June 29, saying it knew nothing about the suitor, its management or its financial capability. “ASIC’s priority is to ensure market integrity is maintained and that markets are fair, orderly and transparent and that, if there has been a breach of the law, those responsible are held to account,” the regulator said in the statement. “We’re monitoring our own share price and transactions on our register,” said Helen Karlis, a spokeswoman for David Jones, when asked to comment on the regulator’s statement. “We’ve been engaged with ASIC since Friday.” If ASIC finds evidence of market manipulation or insider trading, the penalties can include incarceration and fines of up to A$5 million for corporations and A$500,000 for individuals, or three times the value of gains from the activity, whichever is

with knowledge of the situation said last week. An employee at Japan’s second biggest brokerage provided confidential information on Nippon Sheet Glass Co.’s 2010 public share offering to a hedge fund, the people said, asking not to be identified before a public announcement. The DBJ may also drop Daiwa from its underwriting syndicate if regulators take action against the broker, a DBJ official said. Bloomberg/Reuters

Australia’s central bank kept interest rates unchanged after cuts in the previous two months as domestic employment strengthens and the local currency’s biggest gain in eight months helps contain inflation. Governor Glenn Stevens and his board left the overnight cash-rate target at a 2 1/2-year low of 3.5 percent, the Reserve Bank of Australia said in a statement in Sydney. Australia recorded its best January-to-May period of hiring in five years and a A$500 billion ($513 billion) investment pipeline is driving growth in some regions, even as export prices have slumped. Mr Stevens, who cut rates by a total of 75 basis points in May and June, held after European Union leaders agreed last week on measures to help Italy and Spain reduce the cost of servicing debt. “The RBA sat on their hands as progress in Europe coupled with some strong domestic data paint a more upbeat picture,” Katrina Ell, an economist at Moody’s Analytics in Sydney, said before the decision. “If we continue down this path, further rate cuts look more unlikely.”

12 |

business daily July 4, 2012

MARKETS Hang SENG INDEX NAME

NAME

PRICE

Day %

VOLUME

9.93

1.741803

22355066

CITIC PACIFIC

11.92

1.880342

4514000

SANDS CHINA LTD

CLP HLDGS LTD

66.45

1.064639

2071656

SINO LAND CO

CNOOC LTD

15.64

1.558442

63766763

SUN HUNG KAI PRO

COSCO PAC LTD

10.62

1.142857

10062499

SWIRE PACIFIC-A

12312459

ESPRIT HLDGS

10.08

1.921132

10913334

-0.4237288

10219461

HANG LUNG PROPER

27.35

4.389313

12.54

0.6420546

2506281

HANG SENG BK

107.2

95.85

1.321353

2956312

HENDERSON LAND D

6.63

4.574132

32388208

PRICE

Day %

VOLUME

27.35

3.207547

40200854

CHINA UNICOM HON

ALUMINUM CORP-H

3.31

0.3030303

10937817

BANK OF CHINA-H

2.96

0.6802721

197701961

BANK OF COMMUN-H

5.22

0.5780347

21665515

BANK EAST ASIA

28.4

2.527076

2572217

13.46

2.591463

23.5

CATHAY PAC AIR CHEUNG KONG

AIA GROUP LTD

BELLE INTERNATIO BOC HONG KONG HO

CHINA COAL ENE-H CHINA CONST BA-H

5.32

0.5671078

247518603

CHINA LIFE INS-H

20.85

4.458918

56668841

CHINA MERCHANT

23.8

1.492537

2641236

CHINA MOBILE

86.35

1.887906

20661725

CHINA OVERSEAS

18.16

1.001112

31077807

CHINA PETROLEU-H

6.87

-0.1453488

77266860

CHINA RES ENTERP

23.55

2.614379

4928084

CHINA RES LAND

16.26

2.911392

12167858

CHINA RES POWER

15.62

-1.761006

6397144

CHINA SHENHUA-H

28.15

4.066543

28077713

PRICE

Day %

58.6

0.8605852

2210993

24.55

0.2040816

27577795

12.1

4.130809

9675916

92.45

1.426221

4756140

90.85

1.282051

1136946

TENCENT HOLDINGS

232

2.654867

3599513

6410686

TINGYI HLDG CO

19.8

-0.1009082

7777437

1.132075

1714731

WANT WANT CHINA

9.76

2.736842

10991362

WHARF HLDG

43.35

1.880141

3845835

42.8

0.3516999

2928949

HENGAN INTL

76.65

2.268179

2922892

HONG KG CHINA GS

16.56

0.8526188

9633215

HONG KONG EXCHNG

109.9 -0.09090909

5013092

HSBC HLDGS PLC HUTCHISON WHAMPO IND & COMM BK-H LI & FUNG LTD

69.5

1.38585

14337261

67.95

2.180451

6750758

4.32

0.6993007

365504564

14.94

0.8097166

20315763

MTR CORP

26.7

NEW WORLD DEV PETROCHINA CO-H PING AN INSURA-H

NAME POWER ASSETS HOL

MOVERS

VOLUME

0 19770

INDEX 19735.53 HIGH

19765.41

LOW

18996.57

0.9451796

1136239

9.44

4.772475

17613934

52W (H) 22835.03

9.98

0.3015075

63903453

(L) 16170.35

62.35

1.053485

8428030

18990

28 -Jun

3-Jul

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

25.65

3.012048

6039687

CHINA PETROLEU-H

6.87

-0.1453488

77266860

10937817

CHINA RAIL CN-H

6.51

1.560062

6651666

1.431981

11378200

CHINA RAIL GR-H

3.27

1.552795

15921161

2.96

0.6802721

197701961

CHINA SHENHUA-H

28.15

4.066543

28077713

CHINA TELECOM-H

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.18

2.912621

194048980

AIR CHINA LTD-H

4.64

2.202643

10485299

ALUMINUM CORP-H

3.31

0.3030303

ANHUI CONCH-H

21.25

BANK OF CHINA-H

NAME CHINA PACIFIC-H

5.22

0.5780347

21665515

3.45

2.373887

46331047

14.46

-1.094391

2660000

DONGFENG MOTOR-H

11.38

-4.369748

51559556

CHINA CITIC BK-H

4.02

1.772152

35395781

GUANGZHOU AUTO-H

6.18

-4.037267

11766819

CHINA COAL ENE-H

6.63

4.574132

32388208

HUANENG POWER-H

5.67

-2.57732

28166543

CHINA COM CONS-H

6.78

0.1477105

10291015

IND & COMM BK-H

4.32

0.6993007

365504564

CHINA CONST BA-H

5.32

0.5671078

247518603

JIANGXI COPPER-H

17.7

4.486423

17546841

BANK OF COMMUN-H BYD CO LTD-H

3.45

0.877193

23113500

PETROCHINA CO-H

9.98

0.3015075

63903453

20.85

4.458918

56668841

PICC PROPERTY &

9.07

4.61361

31205797

CHINA LONGYUAN-H

5.07

0.3960396

4161228

PING AN INSURA-H

62.35

1.053485

8428030

CHINA MERCH BK-H

14.74

1.936376

22393572

SHANDONG WEIG-H

8.8

3.044496

13100000

CHINA COSCO HO-H CHINA LIFE INS-H

CHINA MINSHENG-H

7.19

4.657933

40409394

SINOPHARM-H

20.9

-1.877934

8192711

CHINA NATL BDG-H

8.15

-1.688782

45896400

TSINGTAO BREW-H

46.15

4.76731

3655307

11.42

3.068592

6179514

WEICHAI POWER-H

30.85

0.9819967

2705689

CHINA OILFIELD-H

NAME

PRICE

DAY %

VOLUME

12.68

5.843072

48923223

ZIJIN MINING-H

2.63

1.153846

22671176

ZOOMLION HEAVY-H

9.97

1.838611

18624600

15.08

0.9370817

7421558

YANZHOU COAL-H

ZTE CORP-H

MOVERS

0 9720

INDEX 9711.57 HIGH

9714.56

LOW

9314.44

52W (H) 12902.97 (L) 8058.58

9310

28-Jun

3-Jul

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.57

-0.3875969

29959284

DATANG INTL PO-A

5.66

-1.393728

2641463

AIR CHINA LTD-A

6.2

0.1615509

15343994

DONGFANG ELECT-A

17.33

-3.615128

6.21

9853636

EVERBRIG SEC -A

12.82

14.76

0.5449591

16748729

GD MIDEA HOLDING

NAME ALUMINUM CORP-A ANHUI CONCH-A

NAME

BANK OF BEIJIN-A

9.76

17584481

GD POWER DEVEL-A

BANK OF CHINA-A

2.81

10733157

GEMDALE CORP-A

PRICE

DAY %

VOLUME

SAIC MOTOR-A

13.1

0.1529052

44340195

24170514

SANY HEAVY INDUS

13.4

-3.318903

59931712

-1.687117

10467512

SHANDONG GOLD-MI

33.32

0.06006006

4759016

11.23

0.8078995

23435443

SHANG PUDONG-A

8.09

40080965

2.64

-1.492537

29296864

SHANGHAI ELECT-A

4.55

-0.2192982

8105896

6.8

2.255639

60266326

SHANXI LU'AN -A

20.79

0.09629273

11158702

30.22

1.002674

5781657

SHANXI XINGHUA-A

40.69

0.7427581

6514981

21.6

3.946102

14873774

SHANXI XISHAN-A

15.54

-0.1926782

8706820

-0.1465201

21389584

SHENZ DVLP BK-A

15.13

-0.1320132

12372795

4.5

31083821

GF SECURITIES-A

BANK OF NINGBO-A

10.02

-0.2985075

21426709

GREE ELECTRIC

BAOSHAN IRON & S

4.28

18017697

GUANGHUI ENERG-A

13.63

BANK OF COMMUN-A

NAME

19.82

-2.22003

6213109

GUIZHOU PANJIA-A

27.3

0.4415011

6282748

SHENZEN OVERSE-A

6.83

4.754601

64348986

CHINA CITIC BK-A

3.99

0.2512563

13159755

HAITONG SECURI-A

9.54

-0.9345794

33929589

SUNING APPLIAN-A

8.65

0.8158508

36311127

CHINA CNR CORP-A

3.92

0.2557545

17898954

HANGZHOU HIKVI-A

28.6

1.5625

4562734

TSINGTAO BREW-A

38.23

0.6052632

3679759

CHINA COAL ENE-A

7.67

-0.6476684

9629544

HEBEI IRON-A

2.72

17532801

WEICHAI POWER-A

28.9

-2.660829

9550211

CHINA CONST BA-A

4.18

10427227

HENAN SHUAN-A

60.83

-1.314082

3062563

WULIANGYE YIBIN

33.5

1.669196

32486267

CHINA COSCO HO-A

4.74

3.043478

16146187

HONG YUAN SEC-A

16.77

0.5395683

9258707

XCMG CONSTRUCT-A

13.81

-3.426573

11583756

CHINA CSSC HOL-A

23.54

1.334481

8990735

HUATAI SECURIT-A

10.39

-0.8587786

19644873

XIAMEN TUNGSTEN

44.96

0.739413

5790104

CHINA EAST AIR-A

4.22

0.7159905

13778655

HUAXIA BANK CO

9.45

0.4250797

16578925

YANGQUAN COAL -A

15.44

0.3248863

13289447

CHINA EVERBRIG-A

2.83

-0.3521127

29690927

IND & COMM BK-A

3.92

-0.5076142

13098961

YANTAI CHANGYU-A

68.2

-0.8864991

1283942

13.07

0.77101

32754712

YANZHOU COAL-A

19.28

1.101206

3352872

BYD CO LTD -A

CHINA LIFE INS-A

18.62

1.25068

18838225

INDUSTRIAL BAN-A

CHINA MERCH BK-A

10.89

0.3686636

31607869

INNER MONG BAO-A

40.32

-1.418093

36946037

YUNNAN BAIYAO-A

58.72

-1.96995

4250721

CHINA MERCHANT-A

11.43

-1.71969

18031378

INNER MONG YIL-A

20.16

-1.273262

29453476

ZHONGJIN GOLD

21.75

0.7410838

4858257

CHINA MERCHANT-A

25.36

1.480592

8575310

INNER MONGOLIA-A

4.87

-2.012072

44246649

ZIJIN MINING-A

3.89

-0.2564103

21654444

87509953

JIANGSU HENGRU-A

28.4

-1.730104

4809251

ZOOMLION HEAVY-A

9.85

-3.24165

64300396

141.4

2.471194

3896211

ZTE CORP-A

0.1430615

16817260

-0.3341688

5872062

CHINA MINSHENG-A

6.05

1.170569

CHINA OILFIELD-A

17.3

1.288056

15769451

JIANGSU YANGHE-A

CHINA PACIFIC-A

22.51

-0.04440497

23176497

JIANGXI COPPER-A

23.86

CHINA PETROLEU-A

6.27

0.32

15560943

JINDUICHENG -A

12.81

-0.2336449

3874914

CHINA RAILWAY-A

4.51

2.5

18342734

JIZHONG ENERGY-A

15.44

-0.06472492

13040175

CHINA RAILWAY-A

2.58

1.976285

18109682

KANGMEI PHARMA-A

15.55

0.3873467

31247538

CHINA SHENHUA-A

22.11

14160274

KWEICHOW MOUTA-A

254.94

5.412446

5015863

CHINA SHIPBUIL-A

5.08

-0.3921569

28022477

LUZHOU LAOJIAO-A

43.39

1.378505

8978519

2.47

0.4065041

10501611

CHINA SOUTHERN-A CHINA STATE -A

4.7

0.8583691

18527167

METALLURGICAL-A

3.33

0.9090909

43379906

NINGBO PORT CO-A

2.55

0.3937008

10568488

6.79

2.259036

MOVERS

133

137

30 2490

INDEX 2468.721

CHINA UNITED-A

3.74

32556938

PANGANG GROUP -A

31031154

HIGH

2488.93

CHINA VANKE CO-A

9.12

1.55902

52201423

PETROCHINA CO-A

9.12

0.6622517

10478156

LOW

2418.86

CHINA YANGTZE-A

6.62

0.1512859

5640058

PING AN INSURA-A

45.62

-1.041215

24308709

CITIC SECURITI-A

12.6

0.2386635

62683356

POLY REAL ESTA-A

11.97

3.189655

53044964

CSR CORP LTD -A

4.49

0.6726457

26924207

QINGDAO HAIER-A

11.81

1.286449

7541123

DAQIN RAILWAY -A

6.97

-0.286123

33342949

QINGHAI SALT-A

33.66

0.02971768

8984330

52W (H) 3140.102 (L) 2254.567

2410

29 -Jun

3-Jul

FTSE TAIWAN 50 INDEX NAME ACER INC

PRICE DAY %

Volume

NAME

31.15

0.8090615

16324885

FORMOSA PLASTIC

ADVANCED SEMICON

25.2

0.8

23953072

ASIA CEMENT CORP

37.6

1.347709

ASUSTEK COMPUTER

PRICE DAY %

Volume

80.5

0.3740648

9449677

FOXCONN TECHNOLO

110.5

2.314815

13647818

6355011

FUBON FINANCIAL

30.75

1.317957

NAME

PRICE DAY %

TAIWAN MOBILE CO

Volume

101.5

1.703407

TPK HOLDING CO L

362

-1.496599

11198451 6046036

17634826

TSMC

84.2

1.080432

60850415

UNI-PRESIDENT

48.6

2.966102

12801898

UNITED MICROELEC

13.4

64047158

278

1.459854

3947830

HON HAI PRECISIO

90.5

1.685393

34454544

AU OPTRONICS COR

12.15

1.25

36573968

HOTAI MOTOR CO

195.5

0.7731959

601367

CATCHER TECH

200.5 -0.2487562

8681535

395

1.152369

8685383

WISTRON CORP

37.8

0.8

11234398

29.4 -0.1697793

26381882

HUA NAN FINANCIA

16.55

0.6079027

7497482

YUANTA FINANCIAL

14.2

2.898551

38847538

YULON MOTOR CO

52.2

0.3846154

5182089

CATHAY FINANCIAL

HTC CORP

CHANG HWA BANK

15.85

0.3164557

7586905

LARGAN PRECISION

604 -0.4942339

1580589

CHENG SHIN RUBBE

75.7

0.7989348

6070442

LITE-ON TECHNOLO

38.2

1.595745

6513975

CHIMEI INNOLUX C

12.55

2.03252

33527854

MEDIATEK INC

273.5

1.672862

5576030

7.08

32402672

MEGA FINANCIAL H

22.55

1.576577

48544270

CHINA STEEL CORP

28.05

0.7181329

11851158

NAN YA PLASTICS

55.5

3.932584

7275349

CHINATRUST FINAN

17.55

0.5730659

38944840

PRESIDENT CHAIN

159.5

0.9493671

2567343

94.7

0.8519702

8300354

QUANTA COMPUTER

2.756892

7621468

CHINA DEVELOPMEN

CHUNGHWA TELECOM COMPAL ELECTRON

27.7

1.094891

8275558

SILICONWARE PREC

32.85

1.232666

13655353

DELTA ELECT INC

89.7

7663640

SINOPAC FINANCIA

11.55

17110183

FAR EASTERN NEW

32.8

2.5

11723872

SYNNEX TECH INTL

71.9 -0.1388889

4300876

FAR EASTONE TELE

65.5

0.4601227

6549515

TAIWAN CEMENT

FIRST FINANCIAL

17.5

0.5747126

11516259

TAIWAN COOPERATI

FORMOSA CHEM & F

79.1

0.2534854

13704617

TAIWAN FERTILIZE

FORMOSA PETROCHE

81.8

1.112485

2226228

25.75

TAIWAN GLASS IND

36.15

2.991453

13937161

17.6

5712570

68.5

0.2928258

2942634

0.7827789

2271085

MOVERS

5 5130

INDEX 5119.46 HIGH

5129.21

LOW

4933.06

52W (H) 6026.51 (L) 4643.05

4930

29-Jun

3-Jul

July 4, 2012 business daily | 13

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

MELCo CrowN ENtErtAINMENt

MGM CHINA HoLDINGS

19.4 19.3 19.2 19.1

29.3

11.9

29.2

11.8 11.7

29.1

11.6

18.9

11.5

18.8 Max 19.34

Average 18.827

Min 18.72

Last 18.94

18.7

SANDS CHINA LtD

Max 29.2

Average 29.041

Min 28.95

Last 29.1

Last 24.55

PRICE

18.0

14.6

24.4

14.5

24.2

14.4

17.8

17.6

14.3 14.2

23.8

14.1 Max 14.74

Average 14.245

DAY %

YTD %

(H) 52W

Min 14.16

17.4

Last 14.3

Max 18

Average 17.584

85.2

1.731343284

-14.06959153

111.3799973

77.27999878

BRENT CRUDE FUTR Aug12

99.05

1.756728991

-5.944354762

124.6999969

88.48999786

GASOLINE RBOB FUT Aug12

266.19

1.448225923

-0.934127279

326.7099857

243.0099964

GAS OIL FUT (ICE) Aug12

864.25

2.42962963

-3.865406007

1046.5

801

2.829

0.177053824

-13.64468864

4.921000004

2.174999952

HEATING OIL FUTR Aug12

271.67

1.524720655

-4.466012589

332.949996

250.8399963

Gold Spot $/Oz

1609.8

1.1969

2.8685

1921.18

1492.98

Silver Spot $/Oz

27.9757

2.3765

0.5055

44.2175

26.085

Platinum Spot $/Oz

1473.52

2.4523

5.6665

1915.75

1339.25

585.8

1.1098

-10.3596

848.37

537.54 1832.25

NATURAL GAS FUTR Aug12

Palladium Spot $/Oz LME ALUMINUM 3MO ($)

1909

-0.104657248

-5.495049505

2675.25

LME COPPER 3MO ($)

7625

-0.780741705

0.328947368

9905

6635

LME ZINC

1872

-0.266382525

1.463414634

2539.5

1718.5

3MO ($)

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

16760

0.179318589

-10.4222341

25195

15980

14.755

0.510899183

-1.829673985

13.95499992

668

1.868089973

13.9445629

673.5

499

Dec12

WHEAT FUTURE(CBT) Sep12

PRICE

(L) 52W

WTI CRUDE FUTURE Aug12

CORN FUTURE

Last 17.46

Min 17.44

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 %

1.0261 1.5677 0.9549 1.2581 79.82 7.987 7.7543 6.3525 54.685 31.48 1.2627 29.858 41.686 9379 81.903 1.20132 0.80256 7.9928 10.0491 100.43 1.03

YTD %

0.078 0.0447 -0.3037 -0.3248 -0.2255 0.0263 0.0271 -0.0614 1.3578 0.3812 0.2851 0.0737 0.6765 0.032 -0.2967 0.0191 0.3663 0.3841 0.3423 0.0797 0

(H) 52W

0.5094 0.8621 -1.7593 -2.9319 -3.6457 0.1578 0.1689 -0.9052 -2.9624 0.2224 2.6847 1.41 5.1672 -3.3053 -4.2379 1.2878 3.8415 1.7691 3.0142 -0.7667 0.0097

(L) 52W

1.1081 1.6618 0.9772 1.4554 84.18 8.0449 7.8113 6.4747 57.3275 31.96 1.3199 30.716 44.35 9662 88.637 1.24736 0.90493 9.381 11.6793 117.62 1.0311

0.9388 1.5235 0.7071 1.2288 75.35 7.9823 7.7529 6.2769 43.855 29.63 1.1992 28.705 41.651 8458 72.057 1.00749 0.79505 7.8544 9.8423 95.6 1.0288

MACAU RELATED STOCKS (H) 52W

(L) 52W

ARISTOCRAT LEISU

2.54

3.673469

15.45454

3.25

1.88

4474396

150.0999908

CROWN LTD

8.47

-0.7033998

4.697155

9.29

7.45

1494649

778

0.71197411

10.86569291

853.5

606.75

SOYBEAN FUTURE Nov12

1455.75

1.234353268

20.88436786

1463

1115.75

COFFEE 'C' FUTURE Sep12

175.95

0.773195876

-24.88794023

288.8500061

NAME

PRICE

DAY % YTD %

VOLUME CRNCY

SUGAR #11 (WORLD) Oct12

21.68

1.308411215

-5.037231713

26.03999901

19.23999977

AMAX HOLDINGS LT

0.074

-2.631579

-14.94253

0.119

0.06

16060667

COTTON NO.2 FUTR Dec12

72.49

0.652596501

-17.47495446

102.25

64.61000061

BOC HONG KONG HO

23.5

-0.4237288

27.71739

24.45

14.24

10219461

CENTURY LEGEND

0.24

0.8403361

4.347824

0.4

0.204

15509

-0.990099

7.142859

4.3

2.3

20571

CHINA OVERSEAS

18.16

1.001112

39.90756

18.48

9.99

31077807

CHINESE ESTATES

8.96

-28.32

13.68

8.3

88194

CHOW TAI FOOK JE

9.81

2.1875

-29.52586

15.16

8.55

9783800

EMPEROR ENTERTAI

1.37

23.42342

2.04

0.97

480000

FUTURE BRIGHT

0.96

-2.040816

128.5714

1.09

0.3

1206000

CHEUK NANG HLDGS

World Stock MarketS - Indices NAME

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

12871.39

-0.06754611

5.351561

13338.66016

10404.49

GALAXY ENTERTAIN

18.94

-1.148225

33.00562

24.95

8.69

19475250

NASDAQ COMPOSITE INDEX

2951.23

0.5512683

13.28446

3134.17

2298.89

HANG SENG BK

107.2

1.132075

16.33207

125

84.4

1714731

FTSE 100 INDEX

5656.28

0.2772735

1.507462

6084.08

4791.01

HOPEWELL HLDGS

22.45

1.58371

13.04129

24.903

18.56

1744326

DAX INDEX

6539.62

0.6702504

10.87202

7523.53

4965.8

HSBC HLDGS PLC

69.5

1.38585

17.79661

78.85

14337261

NIKKEI 225

9066.59

0.7009512

7.229035

10255.15

8135.79

HUTCHISON TELE H

3.61

0.5571031

20.73579

3.71

2.37

1848107

HANG SENG INDEX

19735.53

1.512592

7.058214

22835.03

16170.35

LUK FOOK HLDGS I

17.22

7.222914

-36.45757

46.15

14.7

6012000

MELCO INTL DEVEL

6.02

-2.272727

4.332756

10.76

4.3

3018291

CSI 300 INDEX

2468.721

0.1412845

5.242648

3140.102

2254.567

MGM CHINA HOLDIN

11.46

-2.21843

19.47265

17.183

7.6

2075745

TAIWAN TAIEX INDEX

7418.36

0.9965746

4.896435

8842.17

6609.11

MIDLAND HOLDINGS

3.83

2.680965

-3.137215

5.217

2.887

1130000

NEPTUNE GROUP

0.089

-19.81982

0.151

0.08

315000

NEW WORLD DEV

9.44

4.772475

50.79872

11.279

6.13

17613934

SANDS CHINA LTD

27577795

KOSPI INDEX

1867.82

0.8732752

2.304816

2192.83

1644.11

S&P/ASX 200 INDEX

4127.216

-0.1399468

1.741753

4657.4

3765.9

4049.893

1.461917

5.962889

4234.734

3217.951

FTSE Bursa Malaysia KLCI

1607.74

0.4303964

5.030934

1611.5

NZX ALL INDEX

769.192

0.1602946

5.397604

806.015

JAKARTA COMPOSITE INDEX

PHILIPPINES ALL SHARE IX

11.4

CURRENCY EXCHANGE RATES

NAME

METALS

Last 11.46

14.7

Commodities ENERGY

Min 11.46

14.8

24 Min 23.85

Average 11.538

wyNN MACAu LtD

24.6

Average 24.191

Max 11.82

SJM HoLDINGS LtD 24.8

Max 24.8

28.9

3506.34

0.8864835

15.14923

3518.96

24.55

0.2040816

11.8451

33.05

14.9

SHUN HO RESOURCE

1.13

1.32

0.82

1310.53

SHUN TAK HOLDING

2.73

2.247191

6.67695

4.668

2.241

2423875

700.441

SJM HOLDINGS LTD

8016613

2695.06

14.3

0.140056

14.34936

20.711

10.079

SMARTONE TELECOM

14.76

-0.9395973

9.821432

18.5

9.8

2157479

WYNN MACAU LTD

17.52

-2.774695

-10.15385

27.48

14.807

7232302

HSBC Dragon 300 Index Singapor

555.09

1.08

11.84

ASIA ENTERTAINME

4.17

3.217822

-29.08163

10.8692

3.66

57695

STOCK EXCH OF THAI INDEX

1198.07

0.7848646

16.8484

1247.72

843.69

BALLY TECHNOLOGI

46.29

-0.7929704

17.01213

49.32

24.74

646499

HO CHI MINH STOCK INDEX

413.09

-1.48104

17.50534

492.44

332.28

BOC HONG KONG HO

25.14666

3.15

1.81

1500

Laos Composite Index

999.94

1.022408

11.17115

1107.3

876.33

GALAXY ENTERTAIN

2.5

33.68984

3.24

1.08

6950

INTL GAME TECH

15.63

-0.7619048

-9.127911

19.15

13.12

3705376

JONES LANG LASAL

69.82

-0.7815831

13.97323

99.89

46.01

237868

LAS VEGAS SANDS

42.97

-1.195677

0.5616674

62.09

36.08

7603174

MELCO CROWN-ADR

11.08

-3.819444

15.17672

16.15

7.05

3322674

MGM CHINA HOLDIN

1.55

30.06704

2.2131

1.0025

1000

MGM RESORTS INTE

11.05

-0.9856631

5.944388

16.05

7.4

5231819

SHUFFLE MASTER

13.84

0.2898551

18.08873

18.77

7.35

561371

1.8

11.97005

2.6037

1.2624

4600

102.15

-1.513691

-7.548193

165.4931

95.82

1939087

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business daily July 4, 2012

Opinion

Eric Schmidt’s irrational optimism Jeffrey Goldberg

Bloomberg View columnist and a national correspondent for the Atlantic

he other morning, after I read on Twitter of an especially gruesome massacre of civilians by Syrian government forces, I plugged the words “Syria” and “massacre” into Google’s search engine. I wanted to read as much as possible about events in Syria, as quickly as possible, from a variety of legitimate news sources. The search engine – what Kurt Andersen describes in his new novel “True Believers” as a kind of “prosthetic cerebral cortex” – came up with thousands of matches. But the No. 1 return was not a story from Bloomberg News or the Associated Press or the New York Times. It was an article from the website of Russia Today, a governmentcontrolled propaganda organisation known for advancing the thinking of the Kremlin. The Russia Today headline: “Leaked: Shock footage allegedly shows Syrian family slain by rebels (GRAPHIC VIDEO).” The story that followed, which described the killing of four people, contained this line: “Sources say that opposition rebels committed the atrocity.” Russia Today, in a natural reflection of the Russian government’s policies, has been weighting its coverage of the Syrian intifada in favour of a regime that has killed more than 10,000 of its citizens. Undoubtedly, these “sources” are Syrian government sources, and it is fair to surmise that they often lie about the actions of Bashar al-Assad’s dictatorship.

Propaganda, facts I believe I’m a fairly sophisticated consumer of Middle East news. Or, at least, I’m sophisticated enough to distinguish obvious propaganda from depictions of observable facts. But I believe that other Internet surfers, when coming upon the work of Russia Today, might not understand its politics and motivations. Which raises the obvious question: why can’t Google do better in presenting information to the world? Eric Schmidt, the executive chairman of Google Inc., and one of the world’s most effective evangelists for technology-enhanced living, told

me in an interview last week at the Aspen Ideas Festival that Google should “rank against” disinformation. But he suggested that isn’t a task easily accomplished. So he issued this recommendation: “You all have to be aware that searching for something doesn’t mean you have to believe it.” Well, that settles it. The Internet-fuelled rise of birtherism, Sept. 11 trutherism and the wild conspiracy theories that cripple discourse in the Middle East are containable just as soon as people understand that not everything on the Internet is true. I asked Schmidt if he could cite any evidence that American democracy is better off for having the Internet. After all, there seems to be something of a correlation between the rise of the Web and the polarisation of U.S. politics, along with the mainstreaming of irrationality. “I don’t think when we built the Internet, we thought that was the problem we were solving,” he said. “I think most people would agree that more speech is better. The clear outcome of the current situation is that more speech means constant polling, etc. There is a lack of deliberative time in our political process. And our political leaders will eventually figure out that they’re going to make

better decisions if they actually take a break and spend a week thinking about them.” This last statement seemed incredible – or, as the laconic Schmidt himself might put it, unsupported by exist-

The official religion of Google is the belief that faster communication will lead to a better-informed global citizenry and the demise of top-down authoritarianism

ing data. The idea that politicians will become more thoughtful as the velocity of information, good and bad, increases seems fanciful. So what mechanism will

help politicians become more contemplative? “Well, they actually are elected, and they can actually talk to each other,” Schmidt said. And you have that much faith? I asked. “Yes. Things will get bad enough that eventually reason will prevail.” I pushed a bit more, and he said, “Well, you know, these problems will get themselves resolved.”

Google’s religion I understand that the official religion of Google is the belief that faster communication will lead to a betterinformed global citizenry and the demise of top-down authoritarianism. Not even Google’s unfortunate experience in China – where the government insisted the company follow censorship rules – seems to make Schmidt question his company’s philosophy, although he is aware that China has so far not cooperated with Google’s vision of what the future should be. “Our theory was that if we put up with the censorship, which we did not like, we would empower the citizens, and the citizens would revolt if this stuff was taken away from them,” Schmidt told me. This didn’t happen, of course, and Google moved its servers to Hong Kong,

to the other side of the Chinese government’s so-called Great Firewall. Google’s experience, he said, was that “we were wrong.” Only provisionally wrong, though. Technology will help people eventually overcome authoritarianism, especially when mobile devices are omnipresent, Schmidt said. They will help citizens publicise crimes against humanity, and shame their persecutors. Again, there isn’t a great deal of data available to support this notion. I asked Schmidt about Syria, where the Assad regime seems immune to the shaming power of Google’s YouTube service, which carries videos of the government’s atrocities. “There’s always an evil person,” Schmidt said. “But that doesn’t mean everyone’s evil. Most governments, even autocratic governments, can be embarrassed.” The Atlantic’s Alexis Madrigal has labelled Schmidt a “radical optimist” for his naive views of human nature. Certainly, radical optimism is a sound business policy for a company that seeks to change the way we gain knowledge. But here is the main irony of Schmidt’s worldview: His belief that the Internet has given humankind a radical new ability to reason its way to truth is in itself irrational. 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 4, 2012 business daily | 15

OPINION

Will Europe be willing wires but disabled? Business Leading reports from Asia’s best business newspapers

Taipei Times The Taipei District Court on Monday issued a warrant to detain former Executive Yuan secretarygeneral Lin Yi-shih for two months in connection with a corruption investigation. The former top official in Taiwan’s cabinet admitted to taking millions of dollars in bribes from a wealthy businessman. Chen Chi-hsiang, head of Ti Yung Co, a metal-recycling company, has accused Mr Lin of accepting a bribe of NT$63 million (US$2.15 million) to help him secure procurement contracts from China Steel Corp and two of its subsidiaries in 2010, and of asking for a further NT$83 million this year.

Yomiuri Shimbun Japan has taken its first step in spreading the use of renewable energy kicking off a feed-in tariff, a policy mechanism obliging utilities to purchase all the electricity generated by wind, solar and other renewable energy sources. Several companies are taking advantage of the business opportunity and are building mega solar power plants. But it is still uncertain whether the renewable power generation business will become profitable for corporations. “A renewable energy power plant’s operation rate and land costs will determine whether a company will succeed or fail,” Hidetoshi Shioda of SMBC Nikko Securities was quoted as saying.

Mohamed A. El-Erian CEO and co-CIO of PIMCO

hen it comes to describing Europe’s ever-worsening crisis, metaphors abound. For some, it is five minutes to midnight; for others, Europe is a car accelerating towards the edge of a cliff. For all, a perilous existential moment is increasingly close at hand. Optimists – fortunately, there remain a few, especially in Europe itself – believe that when the situation becomes really critical, political leaders will turn things around and put Europe back on the path of economic growth, job creation, and financial stability. But pessimists have been growing in number and influence. They see political dysfunction adding to financial turmoil, thereby amplifying the eurozone’s initial design flaws. Of course, who is ultimately proven correct is a function of eurozone governments’ willingness to make the difficult decisions that are required, and in a coordinated and timely fashion. But that is not the only determinant: governments must also be able to turn things around once the willingness to do so materialises. And here, the endless delays are making the challenges more daunting and the outcome more uncertain.

Korea Herald

Crisis-driven

South Korea’s government ministries and agencies requested a 6.5 percent hike in their budget for next year as they want to spend more on education, welfare and national defence, the Finance Ministry was quoted as saying on Monday. The request made by 51 government ministries and state agencies seek to spend a combined 346.6 trillion won (US$303.1 billion) for next year, compared with 325.4 trillion won in the 2012 budget, according to the ministry. Total money being asked for the education sector stood at 50.1 trillion won, up from 45.5 trillion won in 2012.

Experienced observers remind us that crises, rather than vision, have tended to drive progress at critical stages of Europe’s historic integration – a multi-decade journey driven by the desire to ensure longterm peace and prosperity in what previously had been one of the world’s most violent regions and the site of appalling human suffering. After all, the European Union (including the eurozone’s 17 members) remains a collective of nationstates with notable divergences in economic, financial, and social conditions. Cultural differences persist. Political cycles are far from synchronised. And too many regional governance mechanisms, with the important exception of the European Central Bank, lack sufficient influence, credibility, and, therefore, effectiveness. Left to its own devices, such a grouping is vulnerable to recurrent bickering, disruptive posturing, and disagreement over visions of the future. As a result, progress towards meaningful economic and political integration can be painfully slow during the good times. But all of this can change rapidly when a crisis looms, especially if it threatens the integrity of the European project. That is where the eurozone is today. A debt crisis that erupted in Greece, the eurozone’s outer periphery, has migrated with a vengeance towards the core, so much so that the survival of

Bangkok Post Capital inflow to Thailand may top US$3 billion this year on positive market sentiment, Tisco Securities projected. The Stock Exchange of Thailand responded positively to the European Union’s measures announced last week. The SET index rose 14.32 percent in the first half of the year. Paiboon Nalinthrangkurn, CEO of Tisco, said Thailand is now one of the most attractive markets in the region. “Thailand is now a top performer in terms of share prices, with a reasonable price-to-earnings ratio, outperforming listed companies and a strong economic foundation,” Mr Paiboon was quoted as saying.

The longer they bicker and dither, the greater the risk that what they gain in willingness will be lost to incapacity

the eurozone itself is at stake. The more the policy response has lagged, the broader the set of questions about Europe’s future has become. Maintaining a 17-member monetary union is no longer a given. Talk of countries exiting, starting with Greece (the “Grexit”), is now rampant. And only hard-core idealists dismiss altogether the mounting risk of the eurozone’s total disintegration. Nonetheless, many veterans of the European integration project see a silver lining in the dark clouds massing over their creation. For them, only a crisis can stop politicians from just kicking various cans farther down the road and, instead, catalyse the policy initiatives – greater fiscal, banking, and political union – that, together with monetary union, would ensure that the eurozone rests on a stable and sustainable four-legged platform.

Willing and able? But this view is not without its own risks. It assumes that, when push comes to shove, political leaders will indeed do what is necessary – the willingness question. It also presumes that they will have the capacity to do so – the ability question. And, over time, uncertainty concerning the latter question has risen to an uncomfortable level. Today’s eurozone is beset by

an unprecedented degree of rejection – on economic, financial, political, and social grounds – by citizens in a growing number of countries. The longer this persists, the harder it will be for politicians to maintain control of their countries’ destinies and that of Europe’s collective enterprise. Private-sector activity is slowing, and it is nearing a standstill in the eurozone’s most vulnerable economy (Greece), where a bank run is in full swing. Elsewhere, too, depositors are beginning to transfer their savings to the strongest economy (Germany) and to safe havens beyond (Switzerland and the United States). Weaker companies are shedding labor, while stronger firms are delaying investments in plant and equipment. And global investors continue to exit the eurozone in droves, shifting countries’ liabilities to taxpayers and the ECB’s balance sheet. No wonder that social unrest is evident in a growing number of countries. No wonder that fringe political movements are gaining traction throughout the eurozone. And no wonder that voters in almost two-thirds of eurozone countries have turned out the incumbents in their most recent elections. All of this serves to undermine

the effectiveness of government policies – by reducing their credibility, clogging their channels of transmission to the economy, and making it difficult to offset the withdrawal of private-sector capital and spending. As a result, the marketbased economic and financial systems that prevail in Europe, and that, not so long ago, were a source of significant strength, are losing their vibrancy. I, too, am fond of metaphors. During a trip to the continent last week, I heard one that captures very well the key dynamic in Europe today. The eurozone’s leaders are on a raft heading towards a lifethreatening waterfall. The longer they wait, the more the raft gains speed. So the outcome no longer depends only on their willingness to cooperate in order to navigate the raft to safety. It also hinges on their ability to do so in the midst of natural forces that are increasingly difficult to control and overcome. The message is clear. The current crisis might indeed eventually break eurozone leaders’ inherent resistance to compromise, collaboration, and common action. But the longer they bicker and dither, the greater the risk that what they gain in willingness will be lost to incapacity. © Project Syndicate

16 |

business daily July 4, 2012

CLOSING Air India strike to end

EU Patent deal in doubt

Hundreds of state-run Air India pilots agreed Tuesday to call off their nearly two-month strike after the airline management said it would consider their grievances “sympathetically”. More than 400 pilots went on strike in May to protest at former Indian Airlines pilots, who moved to Air India when the carriers merged in 2007, being trained for new Boeing 787 Dreamliner planes. The strikers said their career prospects were under threat. In April, the government had cleared a US$5.75 billion bailout package to help the cash-strapped carrier that has debts of US$8.3 billion.

A days-old EU breakthrough to create a single European patent after decades of dispute was thrown into question by the European parliament and the European Commission. A deal making it easier and cheaper for researchers to protect inventions was reached last week with Paris awarded a Unified Patent Court to be and London and Munich sharing out key offices. But the compromise between the three “unfortunately comes at the price of the deletion of important community elements of the original Commission proposal,” said the president of the EU executive, Jose Manuel Barroso.

Spanish banks recovery still in doubt

Bond yields lower, but not enough

Measures agreed at EU summit may not arrive soon enough to avoid collapse

panish Prime Minister Mariano Rajoy will find it tough to avoid asking for a full-scale sovereign bailout despite steps taken at an EU summit to help the country’s indebted banks and pressured borrowing costs.

Euro zone leaders agreed on Friday to let their rescue fund directly inject aid into Spanish banks from next year and buy bonds to support troubled member countries, to try and curb a regional debt crisis that threatens the single currency. But the deal lacks details and Mr Rajoy, who struggles at the EU negotiating table, will face long and difficult talks to finalise the rescue, while the recession deepens, the public deficit rises and one in four of the workforce has no job. Investors and officials say the steps

may not be in place quickly enough to stop the country needing more cash to keep the state afloat on top of up to 100 billion euros (US$125 billion) made available to fund the country’s banks. “Spain remains at risk. Its total debt, public and private, is still massive... It will be key to see if the recapitalisation can be done quickly enough,” said one senior European union official who attended the summit. At least 40 billion euros is needed in the next few weeks to stop nationalised lenders Bankia, CatalunyaCaixa,

NovaGalicia and Banco de Valencia collapsing, Spanish government sources say and it is not clear where that money will come from. Spain is due to sign a memo of understanding for the bank recapitalisation programme by July 9 but many details are vague In addition, the government must continue to carry out its regular debt financing programme, with around 100 billion euros of issues still left this year. The Treasury has around 40 billion euros in cash in its coffers thanks to better market conditions earlier in the year but a hump of 27.5 billion euros maturing in the last 10 days of October looks especially challenging. Part of Spain’s problem is that the government, which has insisted it does not need a sovereign bailout, has sent a series of confusing signals about the state of public finances and the banking system. Rajoy has lost most of his credit with fellow European leaders and may find it hard to quickly shore up confidence. Yields on Spanish bonds have edged lower since the summit but doubts about the deal have begun to creep into the market. Spanish 10-year yields slipped 4 basis points to 6.36 percent yesterday, but that is not far from the 7 percent level that has proved to be unsustainable for other euro zone countries’ finances. The 40 billion euros for the banks will push Spain’s debt as close to 84 percent of gross domestic product at year-end, while continued high bond yields could send it higher. Reuters

Barclays Bank boss Diamond resigns Still to appear before a parliamentary committee probing the rigging scandal

arclays Plc, Britain’s secondlargest bank, is under pressure to find an external candidate to distance the bank from chief executive Robert Diamond, who quit after the lender was fined for rigging Libor rates. Mr Diamond, 61, followed his chairman Marcus Agius yesterday and resigned, amid political pressure to go over the record fine of 290 million pounds (US$455 million) for attempting to manipulate the London interbank offered rate. Mr Agius will oversee the search for his successor. Mr Diamond said he was stepping down because the external pressure on the bank risked “damaging the franchise”. “The external pressure placed on Barclays has reached a level that risks damaging the franchise – I cannot let that happen,” he said. His resignation was a sudden reversal,

hours after he said it was down to him to clear up the mess at Britain’s thirdlargest bank. Mr Diamond will still appear before MPs on the Treasury Committee today to answer questions about the Libor affair. Analysts are pressing Barclays to look outside for a replacement to the banker who created its investmentbanking operation before becoming CEO last year. Finding that outsider may take time, while insiders such as securities unit head Rich Ricci and chief operating officer Jerry Del Missier, may not be sufficiently independent to appease investors. “It’s of paramount importance that an external appointment is made in order to clean up the image of the company,” Gary Greenwood, a banking analyst at Shore Capital, said by e-mail. “The question now will be who will come in to replace Mr Diamond and whether

further senior heads will roll?” The lack of a clear succession plan is a “board failure,” Simon Johnson, a professor at the Massachusetts Institute of Technology’s Sloan School of Management, said. “The board’s responsibility is to hire and fire the CEO if anything happens, and to have a succession plan. It may speak to the broader cultural problems within Barclays.” Finance minister George Osborne welcomed Mr Diamond’s departure and said he hoped it was the “first step towards a new culture of responsibility” in banking.

“It is the right decision for the country,” Mr Osborne said, saying the U.K. needed a strong Barclays concentrating on lending and contributing to economic recovery. Agencies