Macau Business Daily, July 9, 2012 by Business Daily

Year I - Number 71 Monday July 9, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

Disneyfication Chinese-style – to lure new visitors Macau could succeed where Las Vegas lost its nerve says a leading tourism academic. That’s in building a new market for family visitors via a theme park – in Macau’s case on neighbouring Hengqin Island. It could be a major factor in diversifying the city’s tourism economy away from its adult playground image says John Crossley, head of the Recreation and Leisure Services Program at Florida State University. Pages 4 & 5

www.macaubusinessdaily.com

Amnesty likely for pay-TV ‘pirates’ T

he city’s unusual pay-TV market whereby unlicensed public antenna companies are allowed to operate alongside the supposed exclusive licence holder Macau Cable TV is to be reformed. The government is likely to get round the legal problems simply by retrospectively legalising the ‘pirates’ when MCTV’s concession expires at the end of 2014, suggests a lawyer for MCTV.

Luís Almeida Pinto says his client isn’t opposed to such a move. “In no way do we want to terminate the public antenna companies,” he stressed. “We want them to be properly licensed in order not to infringe upon the exclusive activities of Macau Cable TV.” The basic problem is that while MCTV has itself paid TV channels in Greater China and overseas for the right to redistribute their content, the

public antennae companies have not. This puts MCTV at a major commercial disadvantage as the ‘pirates’ can undercut its prices. But a Lower Court judgement said MCTV is not the right entity to take legal action against the public antenna companies for copyright infringement. Any such suit would have to be filed by the owners of those rights, namely overseas copyright-protect channels. The company, however,

vowed to appeal against the decision, Mr Pinto told Business Daily. MCTV has previously asked for 500 million patacas (US$63 million) in government compensation in an arbitration case for the infringement on its concession and licensed rights. Public antenna companies began operating in the 1970s and were never curtailed when the 15-year MCTV concession was granted in 1999. More on page 2

Taiwan casino ‘yes’ vote – Macau ops not losing sleep

HANG SENG INDEX 19840

Residents of some outlying Taiwanese islands have voted for a casino resort. Macau operators are unlikely to be losing any sleep. Matsu is only six miles from the Chinese mainland but few Fujian tourists currently come to Macau. And Taiwan’s vocal anti-casino lobby could extend further the two-decade debate on the issue. Singapore took only five years from policy announcement to the opening of its first casino.

19790

19740

Page 3

19690

CEM sparks fresh interest from Portuguese investor

July 6

HSI - Movers

Portugal’s electricity generator and distributor would like to take a larger, controlling, stake in Macau’s power firm Companhia de Electricidade de Macau SA – known as CEM. The chief executive of the Portuguese company made the remarks on the sidelines of an investment seminar. António Mexia is in Macau as part of the delegation led by Portuguese Minister of Foreign Affairs Paulo Portas.

Name

Page 7

Record month for commercial property

%Day

WANT WANT CHINA

5.67

CHINA OVERSEAS

4.82

CATHAY PAC AIR

2.63

AIA GROUP LTD

2.58

CHINA LIFE INS-H

2.12

CNOOC LTD

-1.27

BANK OF COMMUN-H

-2.48

CHINA CONST BA-H

-2.65

BANK EAST ASIA

-3.48

ESPRIT HLDGS

-3.88

Almost 1.7 billion patacas (US$213 million) were spent in commercial unit transactions in May, the highest monthly figure since the Statistics and Census Service began collecting data in 1999. The number of shops sold rose almost a third to 237, an 11-month high, which means each store was sold for an average of 7.2 million patacas, the second-highest figure since the handover.

2012-7-09

Page 8

27˚ 33˚

Source: Bloomberg

2012-7-10

2012-7-11

27˚ 33˚

2 |

business daily July 9, 2012

macau

Public antenna firms expected to get govt nod Macau Cable TV is appealing against a court’s dismissal of its suit against public antenna companies for copyright infringement Vítor Quintã

acau Cable TV Ltd has appealed against the Lower Court’s dismissal of its suit against public antenna companies for copyright infringement, but has hinted that it expects these companies will become its legal rivals after its exclusive cable television concession ends in 2014. The Lower Court’s judgement conceded that public antenna companies “are drawing revenue from ... illegal activities”, Macau Cable TV’s lawyer, Luís Almeida Pinto, told Business Daily. “In no way do we want to terminate the public antenna companies,” he said. “We want them to be properly licensed in order not to infringe upon the exclusive activities of Macau Cable TV.” Mr Pinto said this would make the transition easier when Macau Cable TV’s 15-year exclusive concession ended in 2014. He hinted that Macau Cable TV believes the public antenna companies will then receive official licences. Even though Macau Cable TV has an exclusive concession to offer cable television, public antenna companies, which began operating in the 1970s before Macau Cable TV was established, have most of the market, mainly because they are cheaper. In a judgement handed down last month but released to the news media on Thursday, the Lower Court acknowledged that public antenna companies “continue committing acts of unfair competition, and that behaviour must be criticised”. But the court said it was not up to Macau Cable TV to take legal action

against the public antenna companies for copyright infringement. The court said it was up to the owners of the copyrights to the programmes shown. “That’s a legal view that has been widely discussed, even in Portugal. It’s a technical and legal issue on which we disagree with the court and we have already appealed to the [Court of] Second Instance,” Mr Pinto said.

Exclusivity issue The Lower Court said any suit by Macau Cable TV would have to be against the government for failing to stop illegal activities. Macau Cable TV “cannot impose its right directly on the defendants because it is up to the government to monitor and tackle illicit activities,” the judgement says. The court said the exclusivity of Macau Cable TV’s contract was being infringed. “The government cannot grant a third party the right to provide cable television services without breaching the concession contract with Macau Cable TV, unless the law is changed,” the judgement says. “Macau Cable TV should file a relevant suit against the licensor for its failure to fulfil its duties.” The Court of Second Instance declined last year to grant an injunction against public antenna companies offering cable television but criticised the government for “undermining the concession contract by failing to fulfil the duties it implies”. Mr Pinto said Macau Cable TV

business as usual

The worst taxi drivers Paulo A. Azevedo pazevedo@macaubusiness.com

Photo by Manuel Cardoso

vitorquinta@macaubusinessdaily.com

ou find them all over the world. In Prague, when it rains, in Kiev, taking advantage of the thousands trying to make their way to a European Cup game, and in Brazil, when you think it might be wise to avoid a “favela”, those immense shantytowns climbing the hills of Rio de Janeiro. With this editorial, I want to be selfish and not dwell on the others. I want to talk about our taxi drivers. I’m disgusted with many of them. They are impolite, cheat and think they are untouchable because the people in government with the responsibility to teach the bad apples a lesson basically ridicule the mere idea of being a civil servant. If bad taxi drivers are not heavily fined and their profession regulated by stiffer rules, the billions of dollars that Macau spends in campaigns to attract tourists goes down the drain. That is a pity because Macau really is a beautiful city, with centuries of history and lovely people. Those efforts will fall short, not only because of taxi drivers but also because of the blood-sucking tourist guides and agencies that try to illegally squeeze a buck from visitors to the city. Unfortunately, this is not the way forward.

Macau Cable TV is demanding 500 million patacas (US$63 million) in compensation from the government

was happy that the Lower Court had agreed that the activities of public antenna companies mean “unfair competition, copyright infringement and breach of an exclusive concession”. The ruling could give impetus to Macau Cable TV’s claim for 500

million patacas (US$63 million) in compensation from the government in a case it has sent for arbitration. Macau Cable TV’s concession contract says all contract disputes must be sent for arbitration. The contract says there can be no appeal against the decision of the arbitrators.

he government and legislators have reached consensus on a proposal to declare their assets to the public, despite opposition from several prosecutors. President of the Legislative Assembly’s first standing committee Kwan Tsui Hang said on Friday the government would extend asset disclosure requirements to lawmakers, Executive Council members and magistrates. But she revealed that the committee had received a letter from the office of Prosecutor General Ho Chio Meng saying some prosecutors were against the move to disclose their assets on the Court of Final Appeal’s website. The standing committee spoke to the Public Prosecutors’ Council, which stressed that the letter did not reflect the majority of prosecutors. The Judicial Magistrates’ Council declined to give its opinion, saying it was “a political option,” Ms Kwan said. The thrust of the prosecutors’ letter was judicial independence would be threatened if they were forced to register their assets. Legislators said the requirement would have

“no impact whatsoever” on either prosecutors or judges. Ms Kwan said the asset register would include real estate assets – minus details about their value or location – commercial or industrial companies, interests or holdings in commercial or civil firms, and positions held in nonprofit organisations. The letter from prosecutors said disclosing their assets was “disrespecting” magistrates. Ms Kwan rejected the argument, saying: “This is not about respect. It’s a political issue focusing on the public’s right to information”. “Given magistrates’ discretionary power, society should be even more keen on accessing information on their assets, to see if they could affect their decisions, which impacts people’s freedom.” Ms Kwan said the government was committed to protecting personal details from abuse and ensuring the population’s right to information. The proposal is now back with the government, which has to redraft the law. V.Q.

July 9, 2012 business daily | 3

MACAU

Taiwan outlying island group’s ‘yes’ to casino Matsu, six miles off China coast unlikely to poach trade from Macau

he recent soap opera at the New Century Hotel at Taipa – involving a junket boss, goons with hammers and ladies either scorned or raised up from obscurity – masks an important truth about Macau. This is that the things making the headlines locally or around the world are often a sideshow to the real news. A good example of what’s really important is the potential constitutional impact – for Macau, Hong Kong and mainland China – of the graft allegations against Joseph Lau Luen Hung. Mr Lau is one of Hong Kong’s most prominent businessmen and chairman and chief executive of Chinese Estates – the company that had been due to develop La Scala – a luxury housing project near Macau airport. On May 23 Mr Lau was formally accused by a Macau court of bribery and money laundering in relation to the scheme. According to lawyers spoken to by Business Daily, there is no formal extradition arrangement between Hong Kong and Macau. So if Mr Lau decided he would really rather not risk being the chicken that gets ‘chopped’ in order to scare the monkeys, could he be forced to come to Macau for the hearing? It would put Hong Kong in a very difficult position politically. It was Hong Kong that in effect triggered the downfall of Ao Man Long, a former Macau secretary for transport and public works first jailed for corruption in 2006 – who supposedly was also the beneficiary of Mr Lau’s alleged generosity over the La Scala deal.

Warming ties Taiwan’s President Ma Ying-jeou has eased restrictions on visits by Chinese tourists since he took office in 2008 as part of a process of normalisation in relations between the two former enemies. Arrivals from the mainland rose to 1.78 million last year from 1.63

The biter bit Associate Editor

Associate Editor

hree-quarters of the residents of Matsu, an archipelago of small Taiwanese islands off the coast of mainland China have voted in favour of allowing casino gaming there. A total of 1,795 people voted ‘yes while 1,341 voted ‘no’ and 28 cast invalid votes, said the Matsu county government, adding the voter turnout rate was 40 percent. But an analyst says Matsu is unlikely to have much impact on Macau gaming revenues or tourism numbers. In Taiwan – unlike in Macau – the concept of casino gaming has been a politically divisive topic. Casinos have been mooted in Taiwan for the past 20 years; but only for hard-to-reach places away from the main island. Timothy Ferry, writing in a research paper published by the American Chamber of Commerce in Taipei, says: “Matsu has significant drawbacks that might severely limit casino operators’ interest. The infrastructure is almost non-existent for a major resort, and the area is plagued by fog and bad weather that often restrict flights.” On the plus side for Matsu, it is only a half-hour ferry ride from China’s Fujian province, which has a population of 35.4 million – greater than the whole of Canada’s. “Gaming in Matsu would draw some visitors from the Fujian province as the quick 30-minute ferry ride would be much easier for residents to make than a trip to Macau,” says Grant Govertsen of Union Gaming Research Macau. “We believe that visitation from Fujian province [currently] has a very minimal impact on overall Macau GGR,” he adds.

editorial

Head office

Rustic charm to neon nightlife? Qinbi Village in Beigan, Matsu Islands

million in 2010. But remaining diplomatic tensions mean a Taiwan casino industry focused on mainland visitors could be vulnerable to visa policy tightening at short notice. The idea of Taiwan casinos gathered momentum in early 2009 when the first administration of Mr Ma amended the Offshore Islands Development Act to allow for casino development under an ‘integrated resort’ model that would also include international hotels, convention centres, and other tourist facilities. At the time a Taiwan government spokesman specifically referred to Singapore’s

Kinmen, Penghu and Matsu – candidates for Taiwan casinos

success in developing casino resorts as an inspiration both for Taiwan’s policy and for its terms of reference. A big difference between the two is that Singapore started talking about casinos in 2005 and had the first one open by February 2010. Taiwan started talking about casinos in 1993 and still doesn’t have an ounce of concrete in the ground. “In our view, the first slot machines and table games would be several years out,” says Mr Govertsen commenting on the Matsu vote. “In addition, we believe the impact on Macau gross gaming revenue would be minimal – only around five percent of overall visitation to Macau is from Taiwan, and Matsu is less conveniently located from Taipei than Macau,” he adds. Taiwan’s Council for Economic Planning and Development said in 2009 it thought a domestic casino industry could generate annual revenues of NT$100 billion (US$3 billion) though industry analysts consider this optimistic. In April last year Gary Loveman, chief executive of the U.S.based casino operator Caesars Entertainment (which as Harrah’s missed out on gaming licences in Macau and Singapore), visited Kinmen and Penghu, two other Taiwanese-controlled island chains that the gaming industry is eyeing as venues. In September 2009 residents of Penghu County voted to reject a proposal for casino resorts by a 57 percent to 43 percent margin.

According to those who claim to know, Mr Ao’s fate was in effect sealed when the recently retired Hong Kong chief executive Donald Tsang Yam Kuen appealed directly to Beijing saying Mr Ao was ‘out of control’. Hong Kong apparently only took this drastic step because it felt its appeals were being ignored by Macau. As far back as 2005, Hong Kong-based developers had been complaining publicly in investor forums that Macau lacked an open tender system for land bids and infrastructure projects.

If Hong Kong – which prides itself on having a strong rule of law – were to indicate Mr Lau is under no obligation to attend the new Macau court hearing it would look like an act of deep hypocrisy Once Beijing’s attention had been drawn to the Ao saga, it in turn raised the matter directly with Macau. This set in motion court cases that were deeply embarrassing and alarmingly close to home for then Macau chief executive Edmund Ho Hau Wah, a rising star in mainland China’s political system. So if Hong Kong – which prides itself on having a strong rule of law – were to indicate Mr Lau is under no obligation to attend the new Macau court hearing it would look like an act of deep hypocrisy. But were Hong Kong to oblige – whether through formal channels or informal ones – Mr Lau to attend the hearing, it would set a precedent. And under Hong Kong’s English common law tradition, a precedent is almost as good as a statute. Once set, how would Hong Kong or Macau resist say a request from the People’s Republic for the extradition from their respective territories of a person accused of political crimes? Thus baby step by baby step, can Macau and Hong Kong’s constitutional systems be ‘reconciled’ with the motherland well before the 50-year transition period is completed. That puts the shenanigans at the New Century in proper perspective.

4 |

business daily July 9, 2012

macau Brought to you by

HOSPITALITY Fortune or feet up? Tourists are surveyed about their motives for visiting Macau. Same-day and overnight visitors are interviewed and their answers are combined in the government’s reports, and that may hide significant differences in their answers. Interestingly, the vast majority of tourists surveyed declare they come to Macau for a vacation, although that has declined slightly. Between 2010 and last year, the number of tourists who said their main reason for visiting Macau was for a holiday, fell from 65 percent to 62 percent. Vacation as main purpose of visit, select areas of origin (%) 100 90 80 70 60 50 40 30 SE Asia

Ja pan

Taiw an

Hong Kong

China

2010

avg2010

2011

avg2011

Luciana Leitão

leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

10 0

Gambling as main purpose of visit, select areas of origin (%) China

Hong Kong

Taiw an

Ja pan

SE Asia

Hengqin Island and its theme park will be a good opportunity for Macau to diversify away from its adult playground image. So says John Crossley, head of the Recreation and Leisure Services Program at Florida State University. Mr Crossley sees great opportunities apart from the gaming industry. More events would help raise the city’s standing, promote economic diversification and appeal to a different type of traveller.

Mainland tourists make up about twothirds of arrivals and the survey sample is representative of that fact. Focusing on leading source markets for tourists, arrivals from Taiwan and Hong Kong declare they come to Macau in much lower numbers to holiday. That may be linked to their proximity to the city and, also, their use of Macau as a transit point. A majority of Japanese visitors – more than 80 percent in both 2010 and last year – vacation here. Only a minority of those surveyed – 10 and 9 percent – declares gambling as the main purpose for their visit, which may come as a surprise.

Plotting a trail to tourism stardom

2010 2011

Of the tourists that say they come to Macau to gamble, Hong Kong residents are the leading source of visitors, with figures of 22 percent and 19 percent in 2010 and last year. That is, respectively, four and three times the values for the next biggest source markets, the mainland and Japan. Besides the difference in answers by sameday and overnight visitors, it would also be interesting to have multiple choice or ranked answers. As it is formulated, the survey seems to strongly underestimate the motive “gambling”. One may be forgiven for conjecturing that a differently structured survey might lead to significantly different results. J.I.D.

How would you compare Las Vegas and Macau, in terms of tourism diversification? Las Vegas went through an evolution, where they lived under the “Sin City” image, the adult playground. Then they tried to diversify and become more of a family destination, taking away the Disney market. Some people think they failed. If you look at some of the data, it is mixed. I don’t think they failed. The fact is that only about 10 percent of the visitors are younger than 21. I don’t think they met their expectations but a lot of people go to Las Vegas for things other than gaming. They diversify with

so many different things in Las Vegas, that even though they think they might have failed to become the destination resort that Disney is, they still came a long away. Diversification here, in Macau, can help as well. But I don’t see Macau becoming a Disney destination. Hengqin Island opens up so many possibilities and that could attract a whole different market. If Macau and Hengqin can be marketed

as a destination region, that’s the best of both worlds. One can complement the other. I think in that way it can offer more than Vegas does. Is Macau on the right track to promote diversification? From what I can see and read, it looks to me Macau is making very good progress in having events and other type of non-gaming that draw tourists. But they could do more. Look at the numbers. They doubled their tourism in a short period of time. They’re obviously doing something right. Events have to be part of that. The length of stay is not very long here and that’s an area where more

July 9, 2012 business daily | 5

MACAU If Macau and Hengqin can be marketed as a destination region, that’s the best of both worlds … I think it can offer more than Vegas does

diversification might help people to stay longer. That’s where Hengqin can have a big effect. Are events the key solution? Macau is having more events. If you look at recreation opportunities as events, on one hand, that are single occurrence, big-crowd drawing, as opposed to ongoing sort of things, like kids quests, I think the events are the way to go. If you look at Salt Lake City, in Utah, when it won the Olympics it got the world’s attention and the image changed. It came up several notches. There is an image a destination can have. Las Vegas is still Sin City but Macau could be the best of both worlds. You’ve mentioned Hengqin Island. What possibilities do you foresee in developing the neighbouring island? They’re going to have the world’s largest whale and shark exhibit, they’re going to have a lot of family recreation-type activities, such as a water-theme park, and that’s going to bring people that seek benefits other than gaming, shopping and nightlife. If you look at why people come to Macau, according to research, 62 percent are saying they are coming here for a vacation and pleasure, and only 9 percent for gaming. This is a study that was done here in Macau. I wonder if it’s socially inappropriate to say ‘my main reason is gaming’. We can probably mix in gaming with the other things. That’s a broader category. It’s interesting that the primary reason for coming is only 9 percent; like in Vegas, where they say 8 percent but 77 percent of the travellers actually do gamble. And the per capita spending in Vegas for gaming is higher than the per capita spending for shopping and shows. But people will search for diversification. The typical gambler in Las Vegas only spends two and a half hours a day there. Diversification can provide a reason for people to stay longer. Was Las Vegas successful in promoting diversification through recreation and events? Now they are saying ‘What happens in Vegas, stays in Vegas’, implying you come here and do what you want and they don’t tell anybody. You go back home and you can be naughty in Vegas that no one would know. There are actually more young people under 21 now than there was before, when it was supposed to be marketed as ‘family’. So, to me, I think they’ve succeeded in diversifying. I wonder if they didn’t want their expectations to be bigger.

But they closed down the watertheme park. There’s some thought that the family thing didn’t yield the results they wanted.

Different paths Should Macau adopt the same strategy as Vegas? There’s a difference and I think the potential for Macau and Hengqin could be greater because Vegas doesn’t have theme parks, Vegas doesn’t have some of the other attractions that are being planned [for Macau]. The potential could be greater. Certainly it would increase the length of stay. How much greater I don’t know. Another think I don’t know, what’s the party size that comes here? Is it more men and women? Or men just coming out here alone to have a good time? Do they bring kids or not? I haven’t seen data on that, I don’t know if they collect data like that. It’s hard to get a handle on that. My gut feeling says that this is a bit more of an adult playground than what it can be when Hengqin is built to provide another alternative. Las Vegas was built from scratch and Macau is a city with hundreds of years of history. Do you think such cultural specificities should be used to appeal for a different type of visitor? Among the American market, I can’t speak for the world market, the increase in heritage tourism, ecotourism, and so forth, is growing. Is this a worldwide phenomenon? I don’t know how much Asians are into history. I don’t know if marketing the churches tour and so-forth would go over so good. I think it’s the events. What kind of events? I’m talking of events like the Grand Prix, the Arts Festival, the Fireworks Display, the Dragon Boat Festival, and so forth. Considering the differences, should the approach to diversification be different in Macau and Vegas? Right now, it seems its gaming, shopping and entertainment, and other things are minimal. If you look at the facilities they have here, they have lots of sports facilities and entertainment, but do they have one with the size to be a world class for a really world-class event? Could you have one of the top concerts in the world here? I see lots of smaller venues. Maybe a bigger venue would help. Looking at the entertainment offering, are these shows that hotel-casinos host, like The House of Dancing Water, effective in attracting other types of travellers?

The length of stay is not very long here and that’s an area where more diversification might help people to stay longer. That’s where Hengqin can have a big effect

Standing by itself it’s not enough. You have it but as one of the attractions of the whole package. There’s an idea called the crown jewel concept, in which there is something that draws everybody and the other things take advantage of that. Do we have a crown jewel here? I don’t know, but there are a lot of smaller jewels. In Utah, the Olympics became the crown jewel and it gained popularity worldwide, it gained immensurable visibility in the years to come. That changed for the better. Americans … Do we ever hear about Macau? No. Macau is one of the best-kept secrets of tourism. I’m impressed, just in a day, with what I’ve seen. It will be interesting to see if the new developments are done with class, clean and meet world-class standards, and, if they do, then the package will be good. A limitation is that we might have to pay for a visa to get over to Hengqin, and then even if you only stay a day, to me that is restrictive. I know the concerns are about the Chinese population but why can’t tourist visas be more open? If they were more open, you could package them much better. But it’s the hassle of it. Some people just don’t want the hassle of going through all that stuff, we’re used to travelling to places where you get visas on arrival and to go through all this other stuff is a turn-off. I think improvements need to be made there. Hopefully down the road it will.

because of the American economy? Or because Americans didn’t like the family destination orientation? I think it dropped but it has built back up from 2009 until now. Visitors and total spending is not as high per capita per day as it was back then. I think it was the economy. Vegas has been hurt by the American economy but it’s building back up. The Chinese economy has slow downed a little bit. What are the factors that might hamper diversification? A problem could be finding out what the people want to do when they come here and how to reach them, how to convince them that this is a destination with more to offer. Another problem may be the hassle of the visa and then is the transportation. It would be a shame if Macau has everything it has got, and Hengqin has everything it’s got, and the people are coming back and forth. It is shame if they developed as two separate entities. Cooperative package is the key here. It would be a shame if that doesn’t happen because of the visas and the transportation.

Twin pack Could diversification have positive effects on the gaming industry? I don’t know but I know the more people stay, the more they are going to spend. Do people come here with a budget for gambling? If they have a set budget, do they spread it out during the days? Or, if they stay more days, do they increase the budget? I think it needs more research done. I think one of the biggest needs of research isn’t about the people who come here, but the people who aren’t here. [We need to research] the people who have the means to go to vacations, from Hong Kong, mainland China, and other major markets, and choose to go other places. Why aren’t they coming here? What are the benefits they seek that maybe could be marketed better here, as a regional destination, but its easy to get research on the people who come, its harder to get research on people who don’t come. How about Las Vegas? The numbers have increased up to 2007 and that was so far the peak year in numbers of visitors and spending. It has decreased then. Is it

Do we ever hear about Macau? No. Macau is one of the best-kept secrets of tourism

6 |

business daily July 9, 2012

macau

Airport passenger growth slows

Brought to you by

Shelf conscious The Statistics and Census Department publishes a quarterly survey of the retail sector. The first quarter’s survey show growth of 28 percent in retail sales, in year-on-year terms. That seems a good result, in line with the economy’s overall growth, which was estimated at 27.5 percent at current prices in the same period. Some retailers posted much higher rates of growth. For example, poultry and meat sales jumped by 49 percent; sales of goods in department stores rose by 35 percent; adult clothing, watches and jewellery, and communication equipment all rose by more than 40 percent. Retail sales: satisfaction with results in the first quarter (%)

Thai Smile Airways launched its first flight from Bangkok to Macau on Saturday

Despite a boom in mainland passengers and new routes, passenger growth eases last month

60 50 40

Very Satisfactory

Satisfactory

Communica tion Eqt

Furniture

Electrical Goods

Cosmetics

Dried Seafood

Pou lt ry &Mea t

Motor Vehicles

To ta l

10 0

Not Satisfactory

Curiously, some of these retailers are the least happy with the results from the last quarter. The chart shows each of the categories where more than 40 percent of the respondents expressed disappointment with their first quarter sales results. In three categories, more than half of those surveyed considered results “not satisfactory”: poultry and meat products, electrical goods, and furniture and lightning. Almost none of the people surveyed considered sales “very satisfactory”. These answers seem at odds with sales. Perhaps they also reflect a significant bias in the distribution of sales, that is, total sales may be rising but only a minority is benefiting. Retail sales expectations for the current quarter 80

60 Leather Goods

50 40 30

To ta l

Adul ts' Clothing

Goods in Supermarkets

20 10 0

Improve

Same

Deteriorate

When asked about their outlook for the second quarter, few respondents expect any significant improvement. Overall, about 15 percent of retailers expect conditions to improve but just three categories are more optimistic than the average: supermarkets, adults clothing shops and retailer of leather goods. Most believe, by a wide margin, that things will get worse or, at best, stay the same. It is a gloomy picture. Perhaps the survey is more influenced by psychology than actual results. Maybe the satisfaction with recent results may be dimmed by excessive expectation. An uncertain outlook could be the consequence of overreacting to previous results that fell below those excessive expectations. J.I.D.

Vítor Quintã

vitorquinta@macaubusinessdaily.com

rowth in passenger volumes at Macau International Airport slowed last month but figures are expected to bounce back rapidly this month with three new airlines launching services. A statement released by the Macau International Airport Company Ltd on Thursday said about 356,700 passengers used the airport last month, a 4-percent increase over the same time last year. That was down from a 7 percent increase in passenger volume for the JanuaryMay period. Mainland routes provided the strongest passenger growth of 29

percent, far ahead of a 5-percent increase in Southeast Asian passengers. Passengers transferring flights increased by more than two-thirds last month, compared to the same period last year. Southeast Asia and the mainland are the airport’s most important markets for passengers, accounting for 36 percent and 33 percent of overall volume. Aircraft movements fell by 1.3 percent in year-on-year terms to less than 3,300 movements last month. Growth of 2 percent was recorded in the first five months of this year. Despite last month’s slowdown, the airport’s half yearly results showed increases in passenger volume, up by 6.7 percent, and aircraft

movements, up by 1.3 percent. More than 2 million passengers have used the airport so far this year, with new routes from Vietnam Airlines, Mandarin Airlines and Air Asia boosting traffic. The company said it was optimistic about the airport’s long-term growth and development, despite an uncertain economic outlook threatening short-term performance. Thai Smile Airways, a new lowcost subsidiary of Thai Airways International, launched its first flight from Bangkok to Macau on Saturday. The airline’s Bangkok-Macau route will be served twice a day. Two other airlines – South Korea’s Air Busan and AirAsia Philippines – plan to start services from Busan and Clark this month.

Chui pledges review but bus subsidies likely to stay

hief Executive Fernando Chui Sai On has pledged a review of the process that adjusts subsidies paid to the city’s bus companies but did not say if the current, 23-percent increase would be suspended. Mr Chui said he had instructed Secretary for Transport and Public Works Lau Si Io to propose changes to the way the city’s bus operators receive subsidies and how their services are assessed. Bus operators Transportes Urbanos de Macau S.A.R.L., Sociedade de Transportes Colectivos de Macau S.A.R.L. and Reolian Public Transport Co Ltd may currently apply once a year for an increase in

the government’s per-mile subsidy. Speaking on the sidelines of a meeting with Portuguese officials on Saturday, Mr Chui said it was most important to improve the quality and safety of bus services. He called for the public’s understanding, saying the government and bus companies had to comply with the concession contract. The Transport Bureau said last month it would increase the money paid to bus companies by 23 percent, based on a formula that accounts for inflation, average salaries of the drivers and gas prices. The magnitude of the increase and transparency in the decisionmaking process were criticised in

the Legislative Assembly. Legislators Kwan Tsui Hang and Ng Kuok Cheong told reporters last week they wanted the government to suspend the subsidy until the public understood the background. The New Macau Association is collecting signatures until Friday for a petition against the subsidy increase. Transport Bureau director Wong Wan said last week his department would review the subsidy process to increase transparency without breaching the conditions of the contract. Officials will meet with legislators on Friday to discuss the government’s decision to increase the subsidy. T.L.

Weather Beijing 32/28o C Changchun 30/21o C

Harbin 29/21o C

Xian 26/23o C Shanghai 27/25o C Chengdu 30/23o C Kunming 27/18o C Haikou 32/25o C Sanya 31/24o C

Guangzhou 34/25o C

MACAU (9 July-14 July) Day

Temperature

Humidity

07/9

27/33o C

60/90 %

07/10

27/33o C

55/90 %

07/11

27/33o C

55/90 %

07/12

27/33o C

55/90 %

07/13

27/32o C

55/90 %

07/14

27/32o C

60/95 %

Shenzhen 33/26o C

ASIA (today)

Hong Kong 33/26o C

Manila

TOKYO

Jakarta

33/25o C

30/24o C

28/20o C

32/24o C

Macau 33/27o C

Bangkok

SEOUL

K. lumpur

37/26o C

SINGAPORE

27/20o C

33/24o C

taipei

36/28o C

July 9, 2012 business daily | 7

MACAU

EDP aims to take the lead in running CEM Photo by Manuel Cardoso

Chief executive of Portugal’s EDP thinks CEM can be an important element in the company’s Asian strategy

CEM may be a further stepping stone into Asia for Portugal’s EDP

Tiago Azevedo tiago.azevedo@macaubusinessdaily.com

ower company EDP Energias de Portugal SA would like to take the lead role in running electricity supplier Companhia de Electricidade de Macau SA, EDP chief executive António Mexia said on Saturday. Mr Mexia was speaking on the

sidelines of a seminar here on investment and cooperation opportunities in Portugal. He was in Macau as a member of the party accompanying visiting Portuguese Minister of Foreign Affairs Paulo Portas. Companhia de Electricidade or CEM

is controlled by two main groups, with several minority shareholders. A Sino-Portuguese group owns 42 percent. The biggest shareholder in this group is EDP subsidiary, EDP Ásia – Investimento e Consultadoria Ltda. A Sino-French group, consisting of Suez Environnement Co SA and NWS Holdings Ltd, owns another 42 percent. The Macau government owns 8 percent, China Power International Holding Ltd has a 6-percent share and 800 Macau shareholders own the final 2 percent, according to the CEM’s website. “I think CEM has everything to gain by becoming a company that, instead of being divided – not quite because it’s 42 percent to each side – is a company where someone would take the lead,” Mr Mexia told the Portuguese news agency Lusa. “We have always showed interested in taking that role.”

Asian opportunities CEM’s annual earnings dropped for the second consecutive year last year, with the company posting a profit of 479 million patacas (US$59.9 million), 7 percent less than in 2010 and 15 percent less

than in 2009. It blamed the fall in profit on the rising cost of electricity imported from the mainland, an irregular natural gas supply and surges in fuel oil prices. A new contract with the government also pared profit by cutting CEM’s guaranteed rate of return from 12 percent to 9.5 percent. While EDP has focused on developing its business in Latin America and Africa, closer ties with China Three Gorges Corp may open more opportunities in Asia. “We have an important role in CEM,” said Mr Mexia. He said CEM, in turn, could play an important role in EDP’s Asian strategy, “not only in our strategy, but probably also for China Three Gorges and that, maybe, will make us shift our presence here so that we can shift our overall positioning in Asia”. China Three Gorges invested 2.7 billion euros (US$3.5 billion) to buy 21 percent of EDP last year. Mr Mexia said the investment gave EDP “more muscle” to follow its international strategy. He said China Three Gorges would gain “access to markets, skills, organisation and methods appropriate to their globalisation policy”.

Portugal makes its play for Chinese capital Lisbon wants mainland investors to put their money into creating jobs and into giving its property market a fillip Xi Chen

xi@macaubusinessdaily.com

acau may become a gateway for mainland investment in Portugal, now that Portugal is preparing to permit immigration for investors that inject money into the country. “Within weeks, Portugal shall have an attractive and competitive policy for those who believe in Portugal now, transferring capital to our financial system, which will make it stronger, by purchasing homes or land in Portugal, helping to stimulate the property market, or creating jobs through investments,” said Portuguese Minister of Foreign Affairs Paulo Portas during his visit to Macau. The Chinese-language Macau Daily News quoted the director of the Sino-Lusophone Forum’s permanent secretariat, Rita Botelho Santos, as saying companies in Macau could become agents to help mainland Chinese to immigrate to Portugal as they were familiar with Portuguese law and culture. Mr Portas took part in a seminar on Portugal’s investment and cooperation opportunities on Saturday. Chief Executive Fernando Chui Sai On and Mr Portas met later in the day. They discussed a range of issues,

including ways to strengthen bilateral ties, Macau’s role in Sino-Portuguese relations and its role in linking the mainland with lusophone countries. Mr Chui said Macau would continue to encourage companies in the mainland and Macau to invest in Portugal, and to act as a platform for such investment.

School chums Mr Portas said Portugal and Macau could increase cooperation in various areas, especially education and culture, with contributions from the public and private sectors. He said he hoped Macau could also become a platform to attract more mainland tourists to Portugal. Portugal wants more tourists from the Pearl River Delta and it will enlist the help of Macau’s travel and tourism associations. The Portuguese Association of Travel and Tourism Agencies signed on Saturday cooperation agreements with three local associations. Mr Portas said he cared about the development of the Portuguese School of Macau and Mr Chui said the Macau government would continue to support the school. Mr Portas invited Mr Chui to pay an official visit to Portugal. Portugal was the first foreign country that Mr Chui

Portugal’s foreign minister Paulo Portas has invited Chief Executive Fernando Chui Sai On to make another official visit to Portugal

visited after he took office. “Portugal has an interest in Macau, and Macau has an interest in Portugal. It’s necessary to cultivate this interest with a frequent and regular institutional approach,” the Portuguese news agency Lusa

quoted Mr Portas as saying. Mr Chui said representatives of Macau and Portugal would continue to hold regular meetings to enhance co-operation in trade, tourism, science, public security and the law, among others.

8 |

business daily July 9, 2012

GREATER CHINA

Smart money rushes to buy shops With rents likely to continue rising, investors spent a record sum on commercial property in May Vítor Quintã

vitorquinta@macaubusinessdaily.com

Investors can expect higher returns from commercial property, with many Hong Kong retailers setting up shop in Macau

he value of sales of commercial property rose by almost half in May to a new record as investors looked for new ways to get a return on their money, real estate agents said. Investors spent 1.69 billion patacas (US$212 million) on buying commercial premises in May, the highest figure for any month since the Statistics and Census Service began collecting data in 1999. The number of shops sold rose by almost one-third to 237, the highest for 11 months, which means each store was sold for an average of 7.2 million patacas, the second-highest figure since 1999. However, it is impossible to say for sure whether shop space is becoming more expensive because data on prices per square metre of commercial property are unavailable. With the price of housing inching above 52,000 patacas per square metre in the three months ended May 31, investors “rushed to buy any kind of property just because interest rates are low,” said Ronald Cheung Yat Fai, the managing director of estate agency Midland Realty (Macau) Ltd. The six-month Macau Interbank Offered Rate remained below 0.62 percent throughout May and annual inflation was 6.76 percent, meaning money in the bank depreciated.

Mr Cheung said shop prices would “rise and rise” because “investor sentiment and the economic environment are both quite favourable”, with high demand for commercial property. The city’s limited supply of land means there is a shortage of property for everything, including shops, according to Noel Cheung, sales director of estate agency Centaline (Macau) Property Agency Ltd. Investors are buying shops for the long term, expecting good returns from rents as “many Hong Kong branches are coming to Macau,” Ms Cheung said. “Rental is directly linked to the shop sales.” Mr Cheung expects rents will stagnate and even decrease for shops other than those in first-rate shopping streets.

MOP1.69 billion May sales of commercial propertyof July

Govt to build 700 more flats for rent in Taipa A new public housing project near the TN27 complex in Taipa will have nearly 700 flats for low-income families Tony Lai

tony.lai@macaubusinessdaily.com

he government will start this week preparatory work on a new public housing complex in Estrada Nordeste da Taipa, which will have 694 flats for lowincome families to rent. The government has said it hopes to invite bids to develop the complex before October and to start construction this year. The new complex will be close to the University of Macau. Officials told a press conference on Friday that they expected construction to take two and a half years. The new complex will consist of two buildings on a site covering 5,000 square metres. These buildings will contain 495 flats with one bedroom, 155 flats with two bedrooms, 44 with three bedrooms and a nursing home. There will be about 600 parking spaces. The government expects the new complex and the TN27 complex nearby will together house more than 10,000 people. The TN27 project, expected to be completed this quarter, will have more than 2,700 flats for sale at subsidised prices.

Housing Bureau official Chan Wa Keong said the new complex would have nearly 500 one-bedroom flats because more than 70 percent of applicants on the waiting list for public housing wanted a onebedroom flat. Official data show there were 6,815 applicants on the waiting list for public housing to rent at the end of last month. Mr Chan said the government’s immediate aim was to get on with building 19,000 homes this year to accommodate those on the waiting list for public housing. The ratio of homes for sale to homes for rent would be adjusted, if necessary, in due course. The new housing complex in Taipa is the second project in a new round of public housing construction announced by the government. The first project will be in Ilha Verde and have more than 2,350 homes. The government invited bids to develop the Ilha Verde site last month and said it will announce the result this month. The new round of public housing construction will provide 3,850 flats.

Two public housing projects close to the University of Macau will together have about 3,400 flats

July 9, 2012 business daily | 9

GREATER CHINA

Beijing to keep property curbs: Wen Premier calls for efforts to limit property speculation as the country’s housing market shows signs of a rebound

hina will intensify fine-tuning of policies as downward pressure on the economy is still “relatively large,” Premier Wen Jiabao said during a tour of Jiangsu province, the official Xinhua News Agency reported yesterday. Measures implemented since April are showing results and the economic slowdown is stabilising, he said. At the same time, the government will “unswervingly” continue its property controls and prevent prices from rebounding, Xinhua cited Mr Wen as saying. China on Thursday announced the second cut in benchmark interest rates in a month and allowed banks to offer bigger discounts on loans, stepping up efforts to reverse a slowdown in the world’s secondbiggest economy. The move, which coincided with the European Central Bank’s decision to reduce borrowing costs to a record low, underscores the risks to the global recovery as the euro area’s fiscal crisis deepens, U.S. employment gains falter and Asian expansion slows. “In April this year we announced we would put stabilising growth in a more prominent position and we intensified efforts to pre-emptively fine-tune policies,” Mr Wen said, according to Xinhua. “Currently

these measures have already seen some results and the economic slowdown has stabilised.” The pace of growth is “within the expected target zone set at the beginning of the year,” Mr Wen said. “However we still face relatively large downward pressure.” The premier set a target of 7.5 percent growth this year, down from an 8 percent goal in place since 2005.

the government’s determination to maintain restrictions on housing purchases even as it cuts interest rates and boosts infrastructure spending to reverse a slowdown in the economy. The mainland’s newhome prices rose for the first time in 10 months in June, according to SouFun Holdings Ltd, owner of the nation’s biggest real-estate website.

Property controls “We must unswervingly continue to implement all manner of controls in the property market to allow prices

Credit demand The government will “continue to intensify pre-emptive fine-tuning and implement a proactive fiscal policy, especially with a focus on improving the structural tax reduction policy,” he said. Authorities will “continue to implement a prudent monetary policy and effectively solve the structural contradiction between the supply of and demand for credit,” he said. In a report on Saturday, Xinhua said Mr Wen pledged to restrict speculative demand and investment in property and that this must be made a long-term policy. Local governments that introduced or covered up a loosening of curbs on residential real-estate must be stopped, the Premier said during a visit to Changzhou city in Jiangsu. Mr Wen’s comments underscore

We cannot allow [property] prices to rebound, or all our efforts will come to naught

to return to reasonable levels,” Mr Wen was quoted as saying when he met residents and local government officials in charge of affordable housing. “We cannot allow prices to rebound, or all our efforts will come to naught,” he said. Market expectations about property prices are changing and citizens are worried prices will rise again, he said. Signals in the market are “chaotic” and misleading and speculative information must be stopped, Mr Wen said, according to Xinhua. Shares of property developers listed in China rose the most in four months on Friday, the day after the People’s Bank of China (PBOC) announced the second cut in borrowing costs in a month. The stocks gained even as the central bank’s statement signalled property restrictions won’t be relaxed. “As long as there are no new curbs to come and it’s only the implementation of existing policies, home prices will still rise,” Jinsong Du, a Hong Kongbased property analyst at Credit Suisse Group AG, said. Mr Wen called for the government’s differentiated mortgage policy and other restrictions on purchases to be maintained. His comments add to the PBOC’s warning to banks to stick to the government’s lending curbs. “All financial institutions must continue to strictly implement a differentiated housing credit policy to continue curbing property-buying for speculation and investment purposes,” it said in its statement announcing the interest-rate cut.

Premier Wen Jiabao

Bloomberg

The mainland’s new-home prices rose for the first time in 10 months in June

U.S. files complaint over auto tariffs China will handle request for WTO action ‘appropriately’ – ministry

resident Barack Obama expanded U.S. trade complaints against China, accusing Beijing of imposing unfair taxes on American vehicles, mostly from General Motors Co. and Chrysler Group LLC. Duties on more than US$3 billion in exports cover more than 80 percent of U.S. auto shipments, including Jeep’s Wrangler and Grand Cherokee, both made by Chrysler, and GM’s Buick Enclave and Cadillac CTS, according to a White House statement on a complaint it filed on Friday at the World Trade Organisation. “Americans aren’t afraid to compete; we believe in competition,” President

Barack Obama said in Maumee, Ohio, near a Jeep factory at the start of a two-day campaign bus tour. “As long as we’re competing on a fair playing field, instead of an unfair playing field, we’ll do just fine.” The U.S. complaint adds to an expanding list of grievances between the nations. Disputes over issues such as rare-earth minerals, solar panels and wind turbines by China and the U.S. in recent months have led some analysts to speculate the nations are heading for a trade war. The U.S. has complained about lack of access in China for products including poultry, tires and music. China, the world’s biggest car

market, said on December 14 it planned to impose anti-dumping duties as high as 12.9 percent on GM autos and 8.8 percent for Chrysler vehicles. China said U.S. taxpayer support of the two carmakers amounted to a government subsidy that was illegal under WTO rules, an allegation the Obama administration rejects. The U.S., which provided aid to the companies in 2008 in return for stock, holds a 32 percent stake in GM. It sold its Chrysler holdings to Italy’s Fiat Spa a year ago. China will “appropriately” deal with the latest U.S. complaint according to the WTO’s dispute

settlement procedures, the Chinese commerce ministry said in a statement on its website. Data from the global information company IHS’s Greater China Light Vehicle Production Forecasts show that China imported only 31,898 vehicles from the Big Three U.S. automakers last year. Moreover, buyers for these relatively costly cars are more tolerant of higher prices. “Actually, the impact [of the duties] on U.S. imported cars...is insignificant,” Sa Boni, manager of IHS, said quoted by the Wall Street Journal. with Bloomberg

10 |

business daily July 9, 2012

ASIA

HK may revise growth forecast InBrief Financial secretary

Railway Materials plans Shanghai IPO

gives gloomy outlook as global growth slows down

China Railway Materials Co., a stateowned logistics firm and steel supplier, aims to raise as much as 6 billion yuan (US$943 million) selling shares in Shanghai to fund expansion. The Beijing-based company will probably sell no more than 2.77 billion shares in Shanghai, according to a prospectus posted on the China Securities Regulatory Commission’s website. It may also offer as many as 1.44 billion shares in Hong Kong, including any over-allotment, the company said.

Stephanie Tong

he Hong Kong government may revise its 2012 economic forecast next month as the outlook for global growth deteriorates, Financial Secretary John Tsang said. “We rely a great deal on our traditional markets in Europe and America” and “countries in Asia have also been slowing down,” Mr Tsang told reporters on Saturday after a radio interview, according to a government transcript. “In August, I will make an assessment whether we need to adjust our forecast.” Interest-rate cuts in China and Europe announced on Thursday and lower-than-forecast employment gains in the U.S. underscore the fragility of the global recovery. The International Monetary Fund will reduce its estimate for growth in the world economy this year, managing director Christine Lagarde said in Tokyo on Friday. Hong Kong’s economy grew 0.4 percent from a year earlier in the first quarter, the slowest pace since the global financial crisis, as Europe’s sovereign-debt woes undermined export demand and confidence. The government is due to announce second-quarter gross domestic product on August 10. The benchmark Hang Seng Index has fallen 9 percent from this year’s peak in February amid concern growth in China and developed

Angola gets loan from China Hong Kong’s economy grew 0.4 percent from a year earlier in the first quarter

economies is slowing. The city’s exports rose in May at half the pace of a year earlier as Asian demand failed to offset weakness in shipments to the U.S. and the European Union. Retail sales expanded the least since 2009 as visitors from China cut back on purchases of luxury goods.

Think carefully Mainland shoppers “are not splashing out as much,” Wong Wai Sheung, chief executive officer of Hong Kong-listed jewellery retailer Luk Fook Holdings (International) Ltd, said at a briefing on June 28. “I’m not too optimistic about the jewellery market this year.” The number of home transactions in Hong Kong fell 35 percent in June from a year earlier after a 14 percent drop in May, according to

Land Registry statistics. Mr Tsang said the public needs to “think carefully when buying properties” because interest rates “can’t be lowered any further,” meaning borrowing costs will only trend upwards, adding to the repayment burden of home buyers. Hong Kong’s residential housing prices have jumped more than 80 percent since early 2009 on the back of record-low mortgage rates and a lack of new supply. Mr Tsang estimated in his February budget speech that the city’s growth will cool in 2012, projecting a range of 1 percent to 3 percent for the full year. The rate of expansion was 5 percent in 2011 after a 7 percent increase the previous year. He said on June 4 he may reduce the forecast because of a deterioration in the euro-area economy. Bloomberg

Angola and China’s Eximbank on Saturday signed 17 loan agreements valued at more than US$500 million to finance various post-war reconstruction projects, the finance minister said. Angolan Minister of Finance, Carlos Alberto Lopes, told AFP the loan deal would be used for the construction of hospitals, energy, and drinking water treatment plants across eight of the country’s provinces.

Apple faces new legal challenge A Chinese technology firm has filed a legal challenge accusing U.S. giant Apple of infringing its patented voice recognition software with its Siri function on the iPhone, the company said on Saturday. Shanghai Zhizhen Network Technology Co Ltd patented its Xiao i Robot software in 2004, while Apple’s Siri, which made its debut with the release of the iPhone 4S last year, was first developed in 2007.

Sinopec, ENN extend China Gas offer US$2.2 billion offer stretched by one month

hinese oil giant Sinopec Corp and gas distributor ENN Energy Holdings are extending their US$2.2 billion offer for China Gas Holdings again, by one month, as they seek regulatory approvals to proceed with Hong Kong’s first unsolicited takeover bid.

Buying China Gas would give Sinopec and ENN access to the country’s largest portfolio of natural gas distribution projects. But analysts say the consortium will have to raise its offer to win the backing of China Gas shareholders. In a filing with the Hong Kong

stock exchange, the Sinopec/ENN consortium said they have decided to extend the offer until August 6 pending approvals from various Chinese authorities, including the country’s commerce ministry. The consortium, which had already extended its offer period

twice, had previously set July 6 as the “long stop date”, meaning if pre-conditions – including winning necessary regulatory approval and conducting due diligence on China Gas – set out in their indicative proposals are not met by that date, the group could

drop the offer. Sinopec and ENN also said shareholders of ENN have approved their HK$3.5 per share joint offer for rival China Gas Holdings, paving the way for them to launch a formal offer. Sinopec, Asia’s largest refiner, does not need shareholder approval as the deal value is relatively small compared its US$81 billion market value. Shareholders holding more than 86 percent stake in ENN on Friday voted in favour of the offer, ENN and Sinopec said in a statement, a move in line with market expectation. China Gas, which has piped gas operations in 151 cities, reported a 52 percent increase in net profit for the fiscal year ended March on strong sales. Sinopec and ENN made their conditional cash offer of HK$3.50 per share for China Gas in December, making it the first unsolicited takeover bid in Hong Kong. China Gas rejected the offer, saying it failed to reflect the true value of the company, and its share price has since traded consistently above the offer price as some of its key shareholders jostled to raise their stakes in the company. The stock ended unchanged at HK$3.92 apiece on Friday. Reuters

HTC smartphone profits fall 58pct Taiwanese smartphone maker HTC has reported a 58 percent fall in net profit to 7.4 billion Taiwanese dollars (US$248 million) in the three months ending in June. In June, the group cut its revenue forecast by 13 percent and warned it would make lower profits for each handset it sold. Second quarter revenue of 91 billion Taiwanese dollars was worse-thanexpected.

Tourism project planned for Tibet China yesterday started work on a 30-billion-yuan (US$4.8 billion) tourism project in Lhasa city, state media said, as it seeks to draw more travellers to the restive Tibet region. The massive development in the regional capital will include a theme park, commercial district and residential area, Lhasa Vice Mayor Ma Xinming was quoted as saying by Xinhua news agency. Construction on the first phase of the planned project, about two kilometres from downtown Lhasa, will take three to five years, it said.

July 9, 2012 business daily | 11

asia

RBI’s governor vows to keep inflation low Says it’s key for securing long-term growth Anoop Agrawal

Manila tightens rules on capital inflows The Philippines has tightened rules on capital inflows by prohibiting foreign funds from investing in the central bank’s special deposit accounts, Governor Amando Tetangco said yesterday, after the peso surged to a four-year high. Bangko Sentral ng Pilipinas will require banks to certify that investments in the special deposit accounts, or SDAs, are not sourced directly or indirectly from non-residents, Mr Tetangco told reporters at a conference in Subic, north of Manila. He didn’t say when the rule will be implemented. “While SDA is principally a tool for managing liquidity, it has also become an entry point for foreign monies to participate in price actions in the peso-dollar market,” Mr Tetangco said. “Existing regulations don’t provide restrictions on non-resident investors. It has, therefore, attracted carry trade.” The peso has risen almost 5 percent this year, the best performer among Asia’s 11-most traded currencies tracked by Bloomberg. It climbed to 41.6 per dollar on Wednesday, the highest level since April 2008. But it fell on Friday after the central bank pledged to curb excessive volatility in the currency and said it was considering measures to discourage speculative capital from overseas. The Philippines’ US$200 billion economy grew 6.4 percent in the first quarter compared with a year earlier, the fastest pace since 2010 and the highest in Southeast Asia. Standard & Poor’s raised the nation’s debt rating to the highest level since 2003 on July 5, citing the country’s easing fiscal vulnerability and strengthening external position.

Japan plans to buy disputed islands A Japanese government plan to buy uninhabited islands owned by a private investor provoked condemnation from China, which also claims it owns the rocky outcroppings, the latest flareup in a dispute over territory and resources in the East China Sea. Prime Minister Yoshihiko Noda on Saturday said the government is considering a purchase of the islands, Kyodo News reported. China’s Foreign Ministry responded with a statement that the islets belong to China and “can’t be bought or sold”. The dispute over who controls the islands, known as Senkaku in Japanese and Daioyu in Chinese, escalated in April after Tokyo Governor Shintaro Ishihara said he wanted to use public money to buy them. Sovereignty over the area, which has undersea natural gas and oil fields, has been a flash point between the world’s second- and third-largest economies. “Clearly the reason why the Senkaku Islands are a big bone of contention is the potential for resources,” said Jeff Kingston, head of the Asian Studies programme at Temple University in Tokyo. “Governor Ishihara has caused a headache for the government and what they’re trying to do is engage in damage control by getting the islands out of the grips of Ishihara, who’s trying to politicise this for his own gain.” Taiwan also claims the isles, which are located about 150 miles northeast of its capital, Taipei. A Taiwan government spokesperson yesterday said the plan to buy the islands is unacceptable, Japanese public broadcaster NHK reported.

ow inflation is key to ensuring sustained economic growth, Reserve Bank of India Governor Duvvuri Subbarao said. “You cannot control inflation without sacrificing some growth, that is inevitable,” Mr Subbarao said in a speech at Kozhikode in the southern state of Kerala yesterday. “But, to sacrifice growth to manage inflation is only in the short term. In the medium term, there is actually no tradeoff between growth and inflation. Low inflation is an essential precondition for securing growth.” Mr Subbarao unexpectedly left interest rates unchanged last month as an inflation rate exceeding 7 percent limits room to add to a cut in borrowing costs in April, which was the first reduction since 2009. Central banks from China to Europe lowered rates yesterday as the global economy falters. “It’s important for the Reserve Bank, as the guardian of price stability, to ensure inflation expectations are anchored and are not unhinged,” Mr Subbarao said. “And that is why, no matter what the driver of inflation, a monetary policy response becomes the first line of defence.” The rupee weakened 0.9 percent against the dollar to 55.455 per dollar on Friday, while the BSE India Sensitive Index ended 0.1

Bank of India Governor Duvvuri Subbarao left interest rates unchanged last month

percent lower. The currency has slumped about 20 percent in the past 12 months. The yield on the 8.15 percent bond due June 2022 fell four basis points, or 0.04 percentage point, to 8.16 percent.

Rupee policy “Whenever the rupee depreciates or appreciates, there is pressure on the Reserve Bank to manage the exchange rate,” Mr Subbarao said. “But the Reserve Bank’s policy is not to manage the exchange rate to target a precise exchange rate or an exchange-rate band. We manage the exchange rate only to

the extent of ensuring that there is no volatility and the movement is quite smooth.” The central bank has to ensure currency intervention is successful, he also said. India’s gross domestic product rose 5.3 percent in the three months through March from a year earlier, the slowest pace since 2003. Inflation was 7.55 percent in May, the fastest among the so-called BRIC group of largest emerging markets that also includes Brazil, Russia and China. Jumps in food costs have contributed to price pressures. Bloomberg

Technology stocks drag Asian markets Five shares fell for every three that rose last week

sian stocks fell for a second day on Friday, paring last week’s gain, as sales at Samsung Electronics Co. missed analysts’ estimates and interestrate cuts in Europe and China failed to boost confidence in the global economy. The MSCI Asia-Pacific slid 0.5 percent to 118.44 on Friday as about five shares fell for every three that rose, with technology shares exerting the biggest drag on the index. The gauge has lost 8.2 percent from this year’s high in February amid concern economic growth in China and the U.S. is slowing as Europe’s debt crisis deepens. The measure gained 1.1 percent last week. “We are still reasonably cautious,” said Tim Riordan, from Parker Asset Management Ltd, a hedge fund in Sydney. “All of these moves by central banks had been expected, so they were baked into the price. ECB rate cuts are getting to the point where each cut is met with diminishing returns.” South Korea’s Kospi Index dropped 0.9 percent, led by Samsung, which accounts for 16 percent of the index by weight. The largest maker of televisions and mobile phones reported sales of 47 trillion

won (US$41 billion) in the second quarter, trailing the 49.8 trillionwon average of 35 analysts’ estimates compiled by Bloomberg. The shares lost 2 percent to 1.161 million won. Japan’s Nikkei 225 Stock Average declined 0.7 percent and the broader Topix Index retreated 0.6 percent. Hong Kong’s Hang Seng Index was little changed, while China’s Shanghai Composite Index surged 1 percent as developers and industrial companies gained. Australia’s S&P/ASX 200 Index slid 0.3 percent. Singapore’s Straits Times Index gained 0.2 percent, capping eight days of gains, the longest winning streak since April 2011. The last time the index rose for more than eight straight days was in January 2006. CapitaLand Ltd jumped 10 percent this week, the most on the city state’s benchmark, on speculation Southeast Asia’s biggest developer will benefit from declining borrowing costs in China, which contributes about 22 percent of the company’s revenue. Golden AgriResources Ltd, the world’s secondbiggest palm oil grower, climbed 7.5 percent through the week as crude palm oil futures rose for a

third week in Kuala Lumpur.

Year’s gain The MSCI Asia-Pacific gained 4.5 percent this year, compared with an 8.8 percent advance by the S&P 500 and a 5.1 percent increase by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12 times estimated earnings on average, compared with 13.1 times for the S&P 500 and 10.8 times for the Stoxx 600. Canon lost 2.5 percent to 3,120 yen. Konica Minolta Holdings Inc., a film maker that depends on Europe for more than a quarter of its sales, sank 2.3 percent to 625 yen. Esprit Holdings Ltd declined 3.9 percent to HK$9.65. Chinese banks trading in Hong Kong declined as Barclays Plc analyst May Yan said the average net income for the industry in 2013 may fall as much as 54 percent following two interestrate cuts in a month. Agricultural Bank of China declined 2.5 percent to HK$3.11. Bank of Communications Ltd slid 2.5 percent to HK$5.11. Parco gained 2.5 percent to 971 yen after J Front offered 1,100 yen per share to become Parco’s majority shareholder. Bloomberg

12 |

business daily July 9, 2012

MARKETS Hang SENG INDEX PRICE

Day %

VOLUME

PRICE

Day %

VOLUME

27.85

2.578269

23005884

CHINA UNICOM HON

10.54

26112213

ALUMINUM CORP-H

3.39

1.19403

10832000

CITIC PACIFIC

11.94

-1.15894

5707213

BANK OF CHINA-H

2.88

-1.030928

296690650

BANK OF COMMUN-H

5.11

-2.480916

44035421

BANK EAST ASIA

27.7

-3.484321

BELLE INTERNATIO

13.86

BOC HONG KONG HO

23.55

NAME AIA GROUP LTD

NAME CLP HLDGS LTD

67.5

0.2971768

2384752

CNOOC LTD

15.5

-1.273885

33996627

3208450

COSCO PAC LTD

10.4

0.1926782

3927419

0.2894356

6534473

ESPRIT HLDGS

9.65

-3.884462

14752014

-0.2118644

8315090

HANG LUNG PROPER

28.25

1.073345

5327911

NAME

PRICE

Day %

POWER ASSETS HOL

58.9

0.5119454

VOLUME 2191521

SANDS CHINA LTD

23.5

-1.052632

13355021

SINO LAND CO

12.76

1.269841

15394570

SUN HUNG KAI PRO

95.55

1.325557

7965717

SWIRE PACIFIC-A

92.85

0.7049892

1010092

TENCENT HOLDINGS

235.6

-0.3384095

1650440

TINGYI HLDG CO

20.75

1.965602

8118665

CATHAY PAC AIR

13.26

2.631579

5228599

HANG SENG BK

107.1

0.2808989

1345913

WANT WANT CHINA

10.44

5.668016

26041812

CHEUNG KONG

99.45

-0.2507523

4418290

HENDERSON LAND D

45.45

0.8879023

5637204

WHARF HLDG

45.25

1.004464

5102461

6.87

-0.8658009

27117035

78.2

1.558442

1888500

17.38

1.518692

8021049

109

-0.9990917

2857793

HSBC HLDGS PLC

68.45

-0.7251632

11286616

CHINA COAL ENE-H CHINA CONST BA-H

HENGAN INTL

5.15

-2.646503

425917259

CHINA LIFE INS-H

21.65

2.122642

58159110

CHINA MERCHANT

24.35

1.458333

2469845

CHINA MOBILE

85.65

-0.1748252

11233735

HUTCHISON WHAMPO

70.65

0.1417434

6570621

CHINA OVERSEAS

19.12

4.824561

54989056

IND & COMM BK-H

4.26

-0.6993007

319172464

CHINA PETROLEU-H

6.67

-0.8915305

91118334

CHINA RES ENTERP

23.15

-0.856531

2298213

CHINA RES LAND

16.38

0.9864365

CHINA RES POWER

15.84

CHINA SHENHUA-H

29.5

HONG KG CHINA GS HONG KONG EXCHNG

MOVERS

1 19850

INDEX 19800.64

LI & FUNG LTD

15.1

0.2656042

8470560

HIGH

19847.64

MTR CORP

27.1

1.688555

3365714

LOW

19604.51

23728444

NEW WORLD DEV

9.88

1.229508

20378708

0.8917197

6003940

PETROCHINA CO-H

9.88

-0.5035247

65937907

1.549053

21501753

PING AN INSURA-H

63.3

1.523657

8254530

52W (H) 22835.03 (L) 16170.35

19600

04 -Jun

06-Jul

Hang SENG CHINA ENTErPRISE INDEX PRICE

DAY %

VOLUME

26.55

4.3222

18009800

YANZHOU COAL-H

CHINA PETROLEU-H

6.67

-0.8915305

91118334

10832000

CHINA RAIL CN-H

6.45

1.255887

6472250

0.9569378

12320610

CHINA RAIL GR-H

3.24

0.9345794

13114138

-1.030928

296690650

CHINA SHENHUA-H

29.5

1.549053

21501753

5.11

-2.480916

44035421

CHINA TELECOM-H

3.51

-1.404494

44182530

14.8

0.2710027

1733056

DONGFENG MOTOR-H

11.48

2.683363

22627359

CHINA CITIC BK-H

3.92

-3.209877

43251896

GUANGZHOU AUTO-H

6.37

0.4731861

2925903

CHINA COAL ENE-H

6.87

-0.8658009

27117035

HUANENG POWER-H

5.56

2.205882

26604000

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.11

-2.507837

153544717

AIR CHINA LTD-H

4.75

2.591793

13757908

ALUMINUM CORP-H

3.39

1.19403

ANHUI CONCH-H

21.1

BANK OF CHINA-H

2.88

BANK OF COMMUN-H BYD CO LTD-H

NAME CHINA PACIFIC-H

CHINA COM CONS-H

6.9

2.222222

14746619

IND & COMM BK-H

4.26

-0.6993007

319172464

CHINA CONST BA-H

5.15

-2.646503

425917259

JIANGXI COPPER-H

18.14

0.5543237

9753699

3.8

1.876676

20173750

PETROCHINA CO-H

9.88

-0.5035247

65937907

21.65

2.122642

58159110

PICC PROPERTY &

9.14

1.330377

22406900

CHINA LONGYUAN-H

5.12

-1.348748

5659483

PING AN INSURA-H

63.3

1.523657

8254530

CHINA MERCH BK-H

14.52

-2.550336

36295738

SHANDONG WEIG-H

8.68

-1.026226

5067340

CHINA COSCO HO-H CHINA LIFE INS-H

CHINA MINSHENG-H

7.1

-2.338377

39004710

SINOPHARM-H

20.55

0.2439024

2927343

CHINA NATL BDG-H

8.37

1.20919

33676000

TSINGTAO BREW-H

46.6

1.304348

1669000

CHINA OILFIELD-H

11.7

-1.182432

5324985

WEICHAI POWER-H

28.3

-2.413793

7309668

NAME

PRICE

DAY %

VOLUME

12.16

0.9966777

17530573

ZIJIN MINING-H

2.72

-0.3663004

23343736

ZOOMLION HEAVY-H

9.72

4.403867

26094753

14.82

-1.724138

6562948

ZTE CORP-H

MOVERS

0 9770

INDEX 9679.62 HIGH

9769.69

LOW

9598.11

52W (H) 12902.97 (L) 8058.58

9590

04-Jun

06-Jul

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.55

-0.7782101

33654474

DAQIN RAILWAY -A

6.81

-0.2928258

52964073

AIR CHINA LTD-A

6.15

0.6546645

15936354

DATANG INTL PO-A

5.65

3.479853

ALUMINUM CORP-A

6.32

2.100162

8562176

DONGFANG ELECT-A

17.08

14.57

2.317416

21184143

EVERBRIG SEC -A

NAME

ANHUI CONCH-A

NAME

PRICE

DAY %

VOLUME

SAIC MOTOR-A

13.29

3.263403

24961765

5695914

SANY HEAVY INDUS

13.14

3.301887

30797142

13760840

SHANDONG GOLD-MI

33.83

2.453059

8736133

12.92

3.858521

11326837

SHANG PUDONG-A

7.97

-1.239157

115797069

BANK OF BEIJIN-A

9.79

22028449

GD MIDEA HOLDING

10.97

0.09124088

27116896

SHANGHAI ELECT-A

BANK OF CHINA-A

2.81

-0.3546099

14069823

GD POWER DEVEL-A

2.65

1.145038

28322690

SHANXI LU'AN -A

4.64

1.089325

4529689

21.24

1.77288

12738222

BANK OF COMMUN-A

4.48

-0.4444444

37496904

GEMDALE CORP-A

6.91

5.335366

113672686

SHANXI XINGHUA-A

41.33

5.058465

6614064

BANK OF NINGBO-A

10.1

-0.9803922

24452050

GF SECURITIES-A

14.26

3.109183

17376647

SHANXI XISHAN-A

15.52

1.703801

14057716

BAOSHAN IRON & S

4.28

0.9433962

21079586

GREE ELECTRIC

21.44

-0.2790698

18329661

SHENZ DVLP BK-A

15.14

-0.3291639

16545450

13.71

3.785011

24488920

SHENZEN OVERSE-A

7.01

3.39233

74378084

19.64

2.719665

3702779

GUANGHUI ENERG-A

CHINA CITIC BK-A

4.02

19671640

GUIZHOU PANJIA-A

28.21

1.256281

5905657

SUNING APPLIAN-A

8.5

2.533172

35550849

CHINA CNR CORP-A

3.81

1.871658

26156273

HAITONG SECURI-A

9.38

2.850877

64137412

TSINGTAO BREW-A

39.43

1.807384

2351473

CHINA COAL ENE-A

7.68

0.7874016

13112071

HANGZHOU HIKVI-A

27.89

3.372869

2971986

WEICHAI POWER-A

28.05

5773883

CHINA CONST BA-A

4.16

-0.7159905

21703271

HENAN SHUAN-A

62.14

3.034323

2879210

WULIANGYE YIBIN

35.01

7.623732

82141424

CHINA COSCO HO-A

4.77

1.489362

16233709

HONG YUAN SEC-A

16.8

5.860113

13903108

XIAMEN TUNGSTEN

44.64

3.023309

6867884

CHINA CSSC HOL-A

23.34

1.434159

4368661

HUATAI SECURIT-A

9.97

2.572016

38566954

YANGQUAN COAL -A

15.48

2.178218

15732748

CHINA EAST AIR-A

4.24

1.923077

19008585

HUAXIA BANK CO

9.22

-2.019129

38313289

YANTAI CHANGYU-A

69.01

3.478782

2567328

CHINA EVERBRIG-A

2.8

-1.060071

32314888

IND & COMM BK-A

3.91

-1.012658

31327705

YANTAI WANHUA-A

13.29

3.747073

9352026

CHINA LIFE INS-A

18.77

-0.5826271

26927768

INDUSTRIAL BAN-A

12.9

-0.8455035

51941078

YANZHOU COAL-A

19.25

1.744186

4212589

CHINA MERCH BK-A

10.57

-2.580645

121860231

INNER MONG BAO-A

41.29

4.823559

54586246

YUNNAN BAIYAO-A

60.18

3.848145

3388840

CHINA MERCHANT-A

11.33

2.533937

20231207

INNER MONG YIL-A

21.27

3.958944

30791737

ZHONGJIN GOLD

22.05

2.320186

6705046

CHINA MERCHANT-A

26.29

4.992013

12796954

INNER MONGOLIA-A

4.9

5.831533

52892963

ZIJIN MINING-A

3.84

-1.030928

28558123

114176769

JIANGSU HENGRU-A

28.93

1.437588

4768708

ZOOMLION HEAVY-A

9.7

4.978355

49147964

JIANGSU YANGHE-A

149

5.539028

3568446

ZTE CORP-A

14.23

1.49786

14265045

24.19

1.766933

7295058

BYD CO LTD -A

CHINA MINSHENG-A

6.04

-0.6578947

CHINA OILFIELD-A

17.33

1.761597

7397467

CHINA PACIFIC-A

22.8

1.649576

25105842

JIANGXI COPPER-A

CHINA PETROLEU-A

6.08

-0.4909984

36986630

JINDUICHENG -A

CHINA RAILWAY-A

4.5

0.4464286

15793346

JIZHONG ENERGY-A

12.9

1.255887

5574112

15.54

2.035456

15678338

CHINA RAILWAY-A

2.59

1.171875

18728671

CHINA SHENHUA-A

22.6

1.847679

11844611

KANGMEI PHARMA-A

15.78

3.002611

21898791

KWEICHOW MOUTA-A

259.99

3.310021

3915883

CHINA SHIPBUIL-A

4.87

-0.408998

28840410

LUZHOU LAOJIAO-A METALLURGICAL-A

44.98

6.084906

22855919

2.45

0.4098361

15908806

MOVERS

258

4.77

2.141328

20181110

CHINA STATE -A

3.43

2.083333

68028451

NINGBO PORT CO-A

2.5

-1.185771

8933971

PANGANG GROUP -A

4.35

1.320662

68310022

HIGH

2476.83

LOW

2421.51

3.75

-1.055409

61482840

CHINA VANKE CO-A

9.65

3.875135

165535895

PETROCHINA CO-A

9.11

0.220022

9827491

CHINA YANGTZE-A

6.74

1.049475

31285435

PING AN INSURA-A

46.24

1.962514

33038165

CHONGQING WATE-A

5.95

9236227

POLY REAL ESTA-A

12.82

4.995905

78951465

CITIC SECURITI-A

12.57

3.20197

58326694

QINGDAO HAIER-A

11.87

4.766108

9901023

CSR CORP LTD -A

4.39

2.093023

28572086

QINGHAI SALT-A

34.42

3.239352

10893237

4 2480

INDEX 2472.61

CHINA SOUTHERN-A CHINA UNITED-A

52W (H) 3140.102 (L) 2254.567

2420

04 -Jul

06-Jul

FTSE TAIWAN 50 INDEX NAME

PRICE DAY %

Volume

NAME

PRICE DAY %

Volume

ACER INC

30.45 -0.4901961

10502293

FORMOSA PLASTIC

80.4

12479775

TAIWAN MOBILE CO

ADVANCED SEMICON

25.35

0.7952286

11745939

FOXCONN TECHNOLO

112

15219594

TPK HOLDING CO L

ASIA CEMENT CORP

37.6

0.5347594

3989755

FUBON FINANCIAL

30.8

0.1626016

9595486

ASUSTEK COMPUTER

276

-1.428571

2712081

HON HAI PRECISIO

91.4

22171831

AU OPTRONICS COR

12.1

0.4149378

32865283

HOTAI MOTOR CO

203

-1.456311

867614

CATCHER TECH

195

-3.703704

21536739

HTC CORP

322

-5.154639

22793082

CATHAY FINANCIAL

29.4 -0.1697793

13362543

HUA NAN FINANCIA

16.6

0.6060606

8245397

CHANG HWA BANK

15.9

-0.625

8019570

LARGAN PRECISION

582

-3.322259

3357810

CHENG SHIN RUBBE

76.6

0.130719

3431206

LITE-ON TECHNOLO

38.5

0.3911343

3608650

CHIMEI INNOLUX C

15968558

MEDIATEK INC

7.12

25150055

MEGA FINANCIAL H

CHINA STEEL CORP

28.05

0.1785714

20721429

NAN YA PLASTICS

CHINATRUST FINAN

17.45 -0.2857143

21940717

CHINA DEVELOPMEN

CHUNGHWA TELECOM COMPAL ELECTRON

12.35 -0.4032258

95.2

0.1051525

273 -0.3649635

5621830

22.85 -0.4357298

23979962

56.4

1.621622

9123208

PRESIDENT CHAIN

158

1088748

8100049

QUANTA COMPUTER

79.7

-2.686203

11073664

28.25

0.8928571

6815753

SILICONWARE PREC

DELTA ELECT INC

94.1

1.182796

6000195

SINOPAC FINANCIA

11.75

33.1 -0.4511278 1.293103

12908183

FAR EASTERN NEW

32.5

0.1540832

3100481

SYNNEX TECH INTL

0.2747253

3492354

FAR EASTONE TELE

66.2

0.1512859

5983264

TAIWAN CEMENT

36.3

1.114206

8956752

FIRST FINANCIAL

17.7

0.5681818

10654558

TAIWAN COOPERATI

17.8

0.2816901

3006791

FORMOSA CHEM & F

75.8

0.6640106

2930817

TAIWAN FERTILIZE

68.2

-1.15942

3187163

FORMOSA PETROCHE

82.4

1.728395

1307213

TAIWAN GLASS IND

27.6

-2.645503

3734183

NAME

PRICE DAY %

TSMC UNI-PRESIDENT

Volume

100

8274650

354.5

5830715

80.9 -0.1234568

38187671

49.85

1.218274

12435736

-1.140684

59629871

37.9

1.066667

9053806

YUANTA FINANCIAL

14.05

0.3571429

14554312

YULON MOTOR CO

53.4

1.328273

5030965

UNITED MICROELEC WISTRON CORP

MOVERS

7 5110

INDEX 5056.96

4680018

HIGH

5109.11

LOW

5024.36

52W (H) 6026.51 (L) 4643.05

5020

04-Jul

06-Jul

July 9, 2012 business daily | 13

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

MElCo CrowN ENtErtAINMENt

MGM CHINA HolDINGS 28.9

19.5

11.5

28.7

19.4

11.4 28.5

19.3

Max 19.46

Average 19.295

Min 19.2

19.2

last 19.4

SANDS CHINA ltD

11.3

28.3

Max 28.8

Average 28.508

Min 28.2

last 28.7

28.1

Max 11.48

SJM HolDINGS ltD

Average 11.372

Min 11.26

last 11.46

11.2

wyNN MACAu ltD

23.9

14.7

17.6

14.65

17.4

14.6

17.2

23.8 23.7 23.6 23.5 Average 23.654

Max 23.85

Min 23.45

23.4

last 23.5

14.55 Max 14.7

Average 14.628

Min 14.58

Commodities ENERGY

NAME

PRICE

WTI CRUDE FUTURE Aug12

84.45

-3.175877092

-14.82602118

111.3799973

77.27999878

BRENT CRUDE FUTR Aug12

98.19

-2.492562066

-6.760991359

124.6999969

88.48999786

GASOLINE RBOB FUT Aug12

271.6

-1.765046296

1.079270562

326.7099857

243.0099964

GAS OIL FUT (ICE) Aug12

862.5

-2.210884354

-4.060066741

1046.5

801

NATURAL GAS FUTR Aug12

2.776

-5.738539898

-15.26251526

4.921000004

2.174999952

DAY %

YTD %

(H) 52W

270.99

-2.11313394

-4.705137673

332.949996

250.8399963

1583.85

-2.1421

1.2103

1921.18

1522.75

Silver Spot $/Oz

27.1037

-4.1385

-2.6273

44.2175

26.085

Platinum Spot $/Oz

1444.5

-2.8117

3.5855

1915.75

1339.25

Palladium Spot $/Oz

576.45

-3.4293

-11.7904

848.37

537.54 1832.25

LME ALUMINUM 3MO ($)

1896

-2.418939784

-6.138613861

2675.25

LME COPPER 3MO ($)

7531

-2.131254061

-0.907894737

9905

6635

LME ZINC

1844

-0.539374326

-0.054200542

2539.5

1718.5

-13.68252272

3MO ($)

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

16150

-3.293413174

25195

15980

15.055

-0.627062706

13.95499992

693

-2.187720536

713

499

Dec12

last 17.48

Min 17.04

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 %

1.0213 1.5495 0.9773 1.2291 79.66 7.9871 7.754 6.3648 55.455 31.75 1.2722 29.893 41.85 9405 81.357 1.20093 0.79335 7.8923 9.8846 97.89 1.03

YTD %

-0.9984 -0.5902 -1.7804 -1.782 -0.0126 -0.0038 0.0077 -0.1383 -0.9016 -0.6614 -0.6367 -0.0836 -0.3584 -0.2552 0.9698 0.0208 1.2542 0.854 1.0673 1.8184 -0.0097

(H) 52W

0.0392 -0.3088 -4.0111 -5.1694 -3.4522 0.1565 0.1728 -1.0967 -4.3098 -0.6299 1.9179 1.2913 4.7551 -3.5726 -3.5953 1.3206 5.047 3.065 4.7286 1.8082 0.0097

(L) 52W

1.1081 1.6618 0.9795 1.4549 84.18 8.0449 7.8113 6.4747 57.3275 31.96 1.3199 30.716 44.35 9662 88.637 1.24736 0.89056 9.3616 11.6793 115.18 1.0311

0.9388 1.5235 0.7071 1.226 75.35 7.9823 7.7526 6.2769 43.855 29.63 1.1992 28.763 41.575 8458 72.057 1.00749 0.79255 7.8544 9.8423 95.6 1.0288

MACAU RELATED STOCKS (H) 52W

(L) 52W

ARISTOCRAT LEISU

2.62

-1.132075

19.09091

3.25

1.88

1683167

150.0999908

CROWN LTD

8.46

-0.3533569

4.573546

9.29

7.45

456631

26.03999901

19.23999977

AMAX HOLDINGS LT

0.071

-1.388889

-18.3908

0.119

0.06

7304000

102.25

64.61000061

BOC HONG KONG HO

23.55

-0.2118644

27.98913

24.45

14.24

8315090 200000

WHEAT FUTURE(CBT) Sep12

806.25

-3.788782816

853.5

606.75

SOYBEAN FUTURE Nov12

1505.75

-1.359318703

1529

1115.75

COFFEE 'C' FUTURE Sep12

176.45

-2.16246188

-24.67449306

288.8500061

SUGAR #11 (WORLD) Oct12

22.25

1.505474453

-2.540516864

COTTON NO.2 FUTR Dec12

70.62

0.056673279

-19.60382514

NAME

PRICE

DAY % YTD %

VOLUME CRNCY

CENTURY LEGEND

0.25

3.73444

8.69565

0.38

0.204

CHEUK NANG HLDGS

3.01

0.6688963

7.500002

4.25

2.3

31000

19.12

4.824561

47.30355

19.16

9.99

54989056

CHINA OVERSEAS

World Stock MarketS - Indices NAME

Average 17.447

PRICE

(L) 52W

Gold Spot $/Oz

CORN FUTURE

Max 17.58

CURRENCY EXCHANGE RATES

HEATING OIL FUTR Aug12 METALS

17.0

last 14.68

CHINESE ESTATES

8.97

-0.1113586

-28.24

13.68

8.3

1102319

CHOW TAI FOOK JE

10.96

2.621723

-21.26437

15.16

8.55

14577720

EMPEROR ENTERTAI

1.44

-0.6896552

29.72973

1.89

0.97

570000

FUTURE BRIGHT

0.97

1.041667

130.9524

1.09

0.3

762000

GALAXY ENTERTAIN

19.4

2.645503

36.23596

24.95

8.69

15923505 1345913

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

12772.47

-0.9630393

4.541907

13338.66016

10404.49

NASDAQ COMPOSITE INDEX

2937.33

-1.303375

12.7509

3134.17

2298.89

HANG SENG BK

107.1

0.2808989

16.22355

124.9

84.4

FTSE 100 INDEX

5662.63

-0.5269972

1.621421

6084.08

4791.01

HOPEWELL HLDGS

22.8

1.55902

14.80362

24.903

18.56

1100002

DAX INDEX

6410.11

-1.919499

8.67632

7523.53

4965.8

HSBC HLDGS PLC

68.45

-0.7251632

16.01695

78.7

11286616

NIKKEI 225

9020.75

-0.6503447

6.686895

10255.15

8135.79

HANG SENG INDEX

19800.64

-0.04285903

7.411419

22835.03

16170.35

CSI 300 INDEX

2472.614

1.738172

5.408611

3137.922

2254.567

TAIWAN TAIEX INDEX

7368.59

-0.2597533

4.192681

8839.14

HUTCHISON TELE H

3.71

24.08027

3.75

2.42

1530506

LUK FOOK HLDGS I

18.36

3.262092

-32.25092

46.15

14.7

5929356

MELCO INTL DEVEL

6.03

1.344538

4.506066

10.76

4.3

1575453

MGM CHINA HOLDIN

11.46

1.776199

19.47265

17.183

7.6

1170803

6609.11

MIDLAND HOLDINGS

3.94

-0.2531646

-0.3552554

5.217

2.887

166169

NEPTUNE GROUP

0.09

2.272727

-18.91892

0.151

0.08

1210000

KOSPI INDEX

1858.2

-0.9218924

1.777907

2192.83

1644.11

S&P/ASX 200 INDEX

4157.807

-0.2730745

2.495872

4657.4

3765.9

4055.197

-0.3596951

6.101664

4234.734

3217.951

FTSE Bursa Malaysia KLCI

1620.55

0.3790812

5.867793

1620.55

1310.53

NZX ALL INDEX

776.319

-0.1403378

6.374166

806.015

700.441

JAKARTA COMPOSITE INDEX

PHILIPPINES ALL SHARE IX

3527.48

0.2609215

15.84347

3527.48

2695.06

NEW WORLD DEV

9.88

1.229508

57.82747

11.224

6.13

20378708

SANDS CHINA LTD

23.5

-1.052632

7.0615

33.05

14.9

13355021

SHUN HO RESOURCE

1.13

1.32

0.82

30000

SHUN TAK HOLDING

2.77

1.838235

8.239982

4.668

2.241

1833838

SJM HOLDINGS LTD

4670564

14.68

1.101928

17.38801

20.711

10.079

SMARTONE TELECOM

15.2

1.876676

13.09524

18.5

9.8

611779

WYNN MACAU LTD

17.5

2.579132

-10.25641

27.48

14.807

6719897

ASIA ENTERTAINME

3.97

0.5063291

-32.48299

10.8692

3.66

84042

BALLY TECHNOLOGI

47.08

0.5338458

19.0091

49.32

24.74

222051

HSBC Dragon 300 Index Singapor

567.72

3.38

14.38

STOCK EXCH OF THAI INDEX

1200.08

-0.1431187

17.04444

1247.72

843.69

HO CHI MINH STOCK INDEX

415.44

0.3890486

18.17381

492.44

332.28

BOC HONG KONG HO

25.14666

3.15

1.81

1500

Laos Composite Index

1003.33

11.54804

1107.3

876.33

GALAXY ENTERTAIN

2.46

0.4081633

31.5508

3.24

1.08

12000 2481319

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

INTL GAME TECH

15.88

-7.674423

19.15

13.12

JONES LANG LASAL

69.18

-2.439712

12.9285

99.89

46.01

233147

LAS VEGAS SANDS

42.39

-2.708286

-0.7956928

62.09

36.08

7079511

MELCO CROWN-ADR

10.84

-1.900452

12.68191

16.15

7.05

3663922

MGM CHINA HOLDIN

1.46

-2.666667

22.51476

2.2131

1.0025

3000

MGM RESORTS INTE

10.83

-1.455869

3.835088

16.05

7.4

6100907

SHUFFLE MASTER

14.49

0.138217

23.63481

18.77

7.35

446145

1.82

-1.086957

13.21416

2.6037

1.2624

2000

100.69

-1.109802

-8.869579

165.4931

95.82

2384541

SJM HOLDINGS LTD WYNN RESORTS LTD

AUD HKD

USD

Contact Information

ONE YEAR Suscription REGULAR 1,560 Mop 20% discount 1,150 Mop

First Name (Mr/Mrs/Ms)

Last name

Address Postal Code

Country

Phone Fax Email

Payment

Subscription Period: from

(yy)|

(mm)|

to |

(yy) |

(mm) |

I wish to pay by Cheque or Direct Deposit Make payable to De Ficção-Projectos Multimedia Banco Comercial de Macau (BCM) Acct# 1099732111 Make payable to De Ficção-Projectos Multimedia Limitada Banco Nacional Ultramarino (BNU) Acct# 9008096687 Visa Master Card American Express Credit Card

Account Number

Expiration Date mm

Cardholder’s Name Cardholder’s Signature

CVV2/CVC2

14 |

business daily July 9, 2012

Opinion

’Where were the controls’ is the question for Barclays Paula Dwyer David Shipley

Bloomberg View editors

f anyone could get Robert Diamond, the former chief executive officer of Barclays Plc, to explain the Libor-fixing scandal to a British parliamentary panel on Wednesday, it was Andrea Leadsom, a Conservative member and a former Barclays banker. Although their interchange generated some heat, it didn’t yield enough light. Yes, Diamond was contrite, repeatedly condemning the conduct of the 14 traders involved. Yes, he lost his job. But not once did he let Leadsom and her fellow MPs delve into the bank’s internal operations, including its compliance process, risk-management procedures and managerial oversight to understand how Barclays staff could have falsified interest rates used to price US$800 trillion in derivatives and corporate and consumer loans, with no one noticing. Without these details, regulators and lawmakers will remain at sea over how to prevent such behaviour at Barclays and the dozen or so other banks about to get pulled into the dragnet. Now that U.K. lawmakers have voted to conduct a parliamentary probe, here’s what they should ask Diamond: “Where were the controls?” In four short words, the MPs should have demanded to know why various checks and balances, which all banks must have, failed at every level. How could bankers and traders, for almost five years, get away with rigging Libor submissions to make sure their derivative bets would pay off? As Diamond would have us believe, knowledge of the rate fixing never went beyond trading desk supervisors. If that’s true, it reveals a lack of internal controls that borders on malfeasance.

Essential questions It’s especially curious that Diamond, who more than most understood the culture of traders, having spent most of his long banking career either on trading desks or overseeing them, didn’t more closely monitor those at Barclays. For example, Barclays has a compliance operation whose

Robert Diamond, former chief executive of Barclays Plc

staff has the ability to check books and records, including e-mails and phone calls, most of which are archived for this very purpose. They can and often make surprise spot checks. What exactly did Diamond ask them to do? Other employees are similarly empowered to look behind traders’ books to avoid losses and keep liabilities in check. These include the risk-management staff, outside auditors and legal counsel. Did any of them conduct routine, or even occasional, inspections? – “When did you first learn about the falsifications?” Actually, we know the answer to this one. Diamond claimed at the hearing that he learned only in mid-June about e-mails showing that his bank had made false submissions on interest rates used to set the London interbank offered rate. (Libor is derived from banks’ own estimates of what it would cost to borrow from one another in various currencies and timeframes.) The e-mails, he said, made him “physically sick.” We have to take him at his word, though his answer

stretches credulity. The MPs could have asked more probing questions about a telephone conversation Diamond had with Paul Tucker, a senior Bank of England official, in October 2008, during the financial crisis. Diamond at the time wrote a note to himself that Tucker said it “did not always need to be the case that we appeared as high as we have recently,” referring to Barclays’ daily Libor submissions. Diamond said he thought Tucker was giving him a heads-up that the U.K.

MPs should have demanded to know why various checks and balances, which all banks must have, failed at every level

government might be thinking of nationalising Barclays if it couldn’t fund itself. He didn’t think the central bank was telling him to fudge his numbers so the bank would look healthier.

Missing answers Documents made public Tuesday, however, show that Jerry Del Missier, the then-president of Barclays’ investment bank concluded the opposite – that an instruction had come down from the central bank to get quotes in line with those of other banks. The next day, the borrowing rates submitted by Barclays fell sharply. Here’s the question Diamond should have been compelled to answer: if you knew your Libor submissions were high enough to worry the government about Barclays’ viability, didn’t you check to see what your submissions were the next day, and every day thereafter? And when they suddenly dropped, didn’t you ask why? – “Why didn’t you examine Barclays’ numbers?” After the conversation with the

Bank of England official, Diamond said he asked Barclays’ then-CEO to relay to the government that other banks were understating their borrowing costs. If he knew this, why didn’t Diamond ask to see the calculations his staff had been submitting? Or at the very least, why didn’t he ask the head of compliance about it? – “Do you think you should forfeit the 14.8 million pounds (US$23 million) in future share awards, or give back some of the 120 million pounds (US$186 million) in salary, benefits and bonuses you’ve received since 2005?” Diamond was asked about the share awards he’s due to receive once he leaves. He deflected the question by saying it was up to the board, not him. Considering the extent of what he seems to have missed, shouldn’t clawing back past compensation be on the table, too? In the end, that may be the only way regulators, lawmakers and taxpayers can ward off such behaviour. In case the board needs help with the answer, it’s “yes.” 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.

Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com

July 9, 2012 business daily | 15

OPINION

Europe’s winners and losers wires Business Leading reports from Asia’s best business newspapers

China Daily Singapore’s stock exchange plans to start listing securities denominated in the yuan as it challenges Hong Kong and Tokyo for a bigger share of equities and currency trading from the world’s second-largest economy. Singapore Exchange Ltd announced in a statement that it is ready to list, quote, trade, clear and settle securities denominated in the yuan as the city-state strives to be an offshore trading centre for yuan assets. The move is also seen by analysts as a boost to the Chinese mainland’s ambition to internationalise the yuan.

Taipei Times Taiwan’s central bank is not expected to cut interest rates in the second half of the year, economists were quoted as saying on Sunday. “Taiwan’s central bank will be happy to see these positive moves led by other countries,” Cheng Cheng-mount, chief economist at Citigroup in Taipei, said. Central banks in Europe and China cut their interest rates last week. Analysts forecast Taiwan’s economy to rebound in the second half of the year. Economists said the rate cuts by central banks in Europe and China were only the first step for them to stimulate their economy, which might help Taiwan’s outlook.

Asahi Shimbun Japan’s first test production of shale oil will begin as early as next year, raising hopes that total reserves could account for nearly 10 percent of the nation’s annual consumption, sources were quoted as saying. Japan Petroleum Exploration Co. will conduct test production at the Ayukawa oil and gas field in Yurihonjo, Akita Prefecture, with Japan Oil, Gas and Metals National Corp., the sources added. The reserve is estimated to be about 5 million barrels. Shale oil will be sold in Japan once production gets on track.

Business Inquirer Bank of America Merrill Lynch has upgraded its domestic economic growth outlook for the Philippines this year but tempered its outlook for 2013 as a challenging global environment is seen having an impact on exports. GDP forecast for this year was raised to 5.6 percent from 4.4 percent but for 2013, the outlook was trimmed to 5.7 percent from 5.9 percent. In 2012-13, a weaker export growth outlook, paired with larger import demands of a faster growing domestic economy, would tend to restrain the overall GDP growth trend, the bank said in a research commentary.

Joschka Fischer

Former Germany’s foreign minister and vice-chancellor and Green Party leader

arely is a high-flying country brought back down to earth in a single night, but that is precisely what happened to Germany recently. In both football (soccer) and politics, the country had come to embody an unseemly mixture of arrogance and denial. It thought itself the measure of all things European, in terms of both the European championship and the European Union. In both cases, it was deceiving itself. The same night that Germany was thrashed by the Italians in the championship’s semifinals, German Chancellor Angela Merkel ran up against the limits of her own powers at the eurozone leaders’ summit in Brussels. Germany’s political course since the beginning of the euro crisis two years ago had left it isolated, and she was no match for an alliance of Italy, Spain, and France. Indeed, she had no choice but to concede and agree to far-reaching changes to the EU’s new fiscal compact that will ease refinancing of the crisis countries and their banks. The German dogma of “no payments without counter-performance and control” was thus off the table, and the bargain struck in the early hours of the morning was exactly the opposite of what she had wanted. The fiscal compact had been reduced to a shambles even before Germany’s parliament, the Bundestag, approved it later that day. In terms of addressing the eurozone financial crisis, however, the agreement reached in Brussels was anything but a breakthrough, because it never transcended the logic of narrow crisis management. It offers no strategy for overcoming the crisis in the south of Europe, which means that the threat to the eurozone has not been removed.

A small revolution Politically, however, the agreement amounts to a small revolution, because it has shifted the balance of power within the eurozone: Germany is strong, but not strong enough to get away with isolating itself completely from Europe’s other major players. Decisions that go against Germany are possible. There was patent gloating about the German defeat everywhere, only thinly disguised behind strained expressions of solidarity. The full extent of the political damage that Germany’s bailout policy for the eurozone, with its austerity, mass unemployment, and economic depression, has caused in southern Europe remains to be seen. If Merkel had wanted the agreement reached in Brus-

sels, the outcome would have marked the beginning of a fundamental revision of the eurozone’s crisis policy – and thus an expression of successful statesmanship. Instead, it is a full-blown defeat for Germany, linked to its firm denial that German policy has sharply reduced the country’s influence in the EU. Yet it clearly has: German influence within the European Central Bank has declined significantly; the German finance minister will not become head of the Eurogroup; and now we have the Brussels disaster!

Matters of concern But Germany’s defeat, however widely celebrated, holds much cause for concern. First, not everything that Germany is arguing is wrong: the urgent need for mediumterm fiscal consolidation and structural reforms to increase the crisis countries’ competitiveness will not go away. Equally important, however, is the reduction of economic imbalances and European policy coordination to enable growth. Second, political paranoia is rising on the German right: everybody supposedly just wants Germany’s money; our Anglo-Saxon partners’ real aim is to weaken us; and the financial markets will not rest until Germany has invested all of its wealth and has thus endangered its economic success. Germany is being “betrayed to foreigners” by the opposition, and “good” productive capital is once again being opposed to “bad” speculative capital. In the opinion pages of some German newspapers, anti-capitalism is returning in a new form, which entails nothing less than a renunciation of Europe and even of the West. Of course, while the German right threatens to become more nationalistic, history will not repeat itself, because to-

day’s Germany has changed, and so has its political environment. Still, an increasingly Euro-sceptic Germany in the heart of the EU could, given its great economic clout, seriously endanger the European integration process. And, while that would jeopardise Germany’s own interests, practical political action is not always rational, particularly in times of serious crisis. The same, incidentally, applies to France, except that the French, unlike the Germans, find it difficult to transfer political sovereignty, whereas for us Germans, it is all about the money. Both of these mental/political blocks are threatening the European project in equal measure.

What we know for certain is that, just as one cannot be a little pregnant, the existing hybrid is not sustainable

Indeed, if the result of the recent summit means that France and Germany will henceforth each forge alliances against the other, while hiding behind verbal expressions of solidarity, we might just as well forget about Europe. Without a functioning Franco-German axis, the European project cannot succeed. Both sides will have to decide whether or not they want Europe – that is, full economic and political integration. Economically, they must choose either joint liability and a transfer union or monetary re-nationalisation. Politically, the choice is whether to empower a common government and parliament or return to full sovereignty. What we know for certain is that, just as one cannot be a little pregnant, the existing hybrid is not sustainable. Last November, Volker Kauder, the majority leader in the Bundestag, bragged that “suddenly Europe is speaking German.” He was wrong. Just as Spain (not Germany) remains the benchmark in European football, so Europe speaks broken English at best. From the standpoint of safeguarding the European project, that is all for the better. © Project Syndicate

16 |

business daily July 9, 2012

CLOSING Bombardier tempts AirAsia

China mine blast kills seven

Canada’s Bombardier is in talks with AirAsia about a more densely packed 160seat version of its CSeries jet, in a surprise bid to loosen the stranglehold on Asia’s largest low-cost carrier held by European giant Airbus. AirAsia founder and Formula One boss Tony Fernandes discussed the proposal with Bombardier’s chief executive Pierre Beaudoin during preparations for yesterday’s British Grand Prix at Silverstone, the men said on the eve of the Farnborough Airshow. Airbus sales chief John Leahy played down the reports. “I do not see how a CSeries aircraft would economically fit into the AirAsia fleet,” he told Reuters.

A gas blast at a coal mine in China’s central province of Hunan killed seven people yesterday morning state media said. It’s the latest in a string of accidents in the country’s dangerous mining industry. It happened at a facility in Lianyuan city. Another 39 workers escaped, the official Xinhua news agency said, quoting the local government. The latest accident came as rescuers in another part of the same province were racing to find eight coal miners still missing four days after their mine flooded, state media added. However, tighter safety standards appear to have been effective according to the latest official figures, which say 1,973 people died in coal mining accidents in 2011, down 19 percent on the previous year.

Rate rigging probe escalates in U.K. and Germany British MPs call for jail terms for any bank bosses convicted Jonathan Gould and Kirstin Ridley

Britain’s Serious Fraud Office part of a widening inquiry

global investigation into manipulation of interbank lending rates widened on Friday with Britain’s fraud squad taking up the case and sources telling Reuters that Germany’s markets regulator had launched a probe into Deutsche Bank. Authorities in the United States, Europe, Japan and Canada are examining more than a dozen big banks over suspected rigging of the London Interbank Offered Rate (Libor). Britain’s Barclays has so far been the only bank to admit wrongdoing, agreeing last week to pay a fine of more than US$450 million (3.59 billion patacas). The rate-fixing scandal has exploded into the front ranks of politics, especially in Britain, where politicians say the bankers responsible should end up in jail. Barclays CEO Bob Diamond was forced to resign this week and told a parliamentary committee that some of his firm’s former staff could face criminal charges. The Libor rates, compiled from estimates by large banks of how much they believe they have to pay to borrow from each other, are used to determine interest rates on trillions of dollars worth of contracts around the world.

Germany’s BaFin regulator has initiated a “special investigation” into Deutsche Bank, a process which is more severe than a routine investigation initiated by a third party, two sources said on Friday. The sources included a banker and a regulator, both of whom spoke on condition of anonymity.

Champagne toasts In Britain, the lack of criminal prosecutions of the rate fixing has been one of the issues infuriating politicians, after e-mails were published showing bankers boasting of fiddling figures and congratulating each other with

offers of champagne. Britain’s Serious Fraud Office said in a brief statement that its Director David Green had decided formally to accept the Libor case for investigation. The SFO will now assemble a case team to pursue an investigation - although it could take years. A spokesman noted that its remit would not be confined to Barclays. “We don’t mention Barclays in our statement, just Libor,” the spokesman said. A source close to the SFO and familiar with its Libor case file said: “A lot of people will be calling around to find lawyers.” The SFO considered launching an

investigation into Libor last summer but dropped the plans in September, in part for budgetary reasons, said the source, who spoke on condition he would not be identified. The SFO has been criticised in the past for failing to achieve convictions in high-profile fraud cases. It gave no further details of how it would conduct its probe. News of a “special investigation” in Germany also raises the stakes. Deutsche Bank said earlier this year it was cooperating with authorities investigating accusations of manipulation of Libor, the only German bank to make such a disclosure so far. Reuters

Greece pledges spending reforms, privatisations Opinion poll shows Greeks split on sticking with bailout George Georgiopoulos

reece’s new finance minister on Saturday pledged to carry out reforms and privatisations demanded under its latest financial rescue in an attempt to regain credibility with international partners stumping up money to keep

Long hard road for Greece

the country afloat. In his first policy speech since taking office, respected economist Yannis Stournaras reiterated the government’s plan to ask lenders for an additional two years to implement deficit-cutting measures, citing a deeper-than-expected recession. But he also warned of a tough road ahead in convincing the socalled troika of European Union,

International Monetary Fund and European Central Bank lenders to give Greece more time and money. “The negotiations will not be quick - they will be long and arduous,” he told parliament during a debate ahead of a confidence vote on the government yesterday. “Additional time is required because the recession was bigger than expected. The extension means someone will have to give us more money and this is not simple.” He warned the near-bankrupt country risked a great deal if it failed to hit the targets it had signed up to. “Greece must carry out the measures that it has already voted on as part of its 2012 budget so that it moves towards the targets it has committed to and to avoid losing more of its credibility and risk the next aid tranche,” he said. Faced with public anger and an emboldened opposition, Greece’s new conservative-led government has promised to push for changes

to a deeply unpopular 130 billion euro (US$162.6 billion) bailout deal keeping the country away from bankruptcy. But that has set it on course for a showdown with its increasingly impatient lenders, whose inspectors this week began their first visit to Athens since the government took office. Athens, due to run out of cash in weeks without further aid, has already conceded that it has fallen behind agreed targets and euro zone officials have warned the country will get no further aid until it gets back on track with reforms. Seeking to soothe some of those concerns, Stournaras said Greece was committed to carrying out an ambitious privatisation plan, albeit with a delay due the elections, as well as structural reforms including cutting red tape, liberalising the economy and improving efficiency in the justice system. Reuters