Macau Business Daily, June 19, 2013 by Business Daily

April 19, 2013 MOP 6.00

Visitors want budget jewels: Chow Tai Fook

Vitor Quintã

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Year II

Number 308

Wednesday June 19, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

Dragon Boat week sees casino revenue spike Page 3

Emperor Entertainment profits up by one fifth Page 4

Young entrepreneur loans

Applications open soon A

n important policy in Macau’s efforts to diversify its economy away from gambling becomes reality within weeks. Young entrepreneurs aged 21 to 44 could start applying for interest-free loans as early as next month, according to Macau Economic Services. Sou Tim Peng, the bureau director, told Business Daily yesterday: “We estimate that [young business people] could begin to apply for the loans in end-July or early August. That is our initial plan.” “There are some preparatory works [to be made] on the regulations, including the formation of the evaluation commission” that will assess the applications, he said on the sidelines of the first public session on the loan scheme. More on page 3

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Hang Seng Index 21230

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Sewage plant ‘below standard’ for six-year period

Asian scholars gather in city next week

The Areia Preta wastewater plant “was below standard from 2004 to 2011,” and the operator at that time was fined. But the information has only now been released to the public in an Environmental Protection Bureau reply to an inquiry from a legislator. It also emerged the bureau has yet to call for new contract tenders for operation and maintenance of the Coloane sewage treatment plant.

The 8th International Convention of Asia Scholars will be held at The Venetian Macao from June 24 to 27. The four-day meeting with a total budget of over six million patacas (US$75 million) will involve over 350 panels on Asian issues. The event includes a documentary screening, book fair and a cultural exhibition on Islamic history, all of which are free to the public.

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Florinda Chan escapes charges over cemetery row

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HSI - Movers Name

%Day

GALAXY ENTERTAIN

6.02

SANDS CHINA LTD

4.36

CATHAY PAC AIR

1.19

SWIRE PACIFIC-A

1.11

CHINA PETROLEU-H

1.07

HENGAN INTL

-1.51

CHINA OVERSEAS

-1.65

WANT WANT CHINA

-1.69

CHINA RES POWER

-2.33

BELLE INTERNATIO

-2.83

Source: Bloomberg

Secretary for Administration and Justice Florinda Chan will have a different fate from her subordinates as she was cleared of charges linked to the cemetery saga. The Court of Final Appeal ruled yesterday there was “insufficient evidence” in the pre-trial stage to show Ms Chan had “committed the crimes of forgery, disobedience and abuse of power” that were claimed by Paulina Alves dos Santos. Page 7

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June 19, 2013

Macau AERL close to junket deal at Le Royal Arc Nasdaq-listed Asia Entertainment & Resources Ltd – an investor in VIP gambling rooms in Macau – expects to finalise the acquisition of a high roller room at Casino Le Royal Arc on Macau peninsula by month-end. AERL said it has already completed due diligence work. The deal for the facility on the first floor of the Sociedede de Jogos de Macau SA-licensed casino will expand AERL’s Macau portfolio to five rooms and a total of 40 tables, split between Macau peninsula and Cotai. The other rooms are at StarWorld Macau, Galaxy Macau, Sands Cotai Central and City of Dreams.

Improperly treated sewage earns fine The ex-operator of the peninsula’s sewage plant blames rundown equipment Vítor Quintã

vitorquinta@macaubusinessdaily.com

he government has fined the former operator of the sewage treatment plant on the peninsula for releasing improperly treated water, according to the Environmental Protection Bureau. The water released from the Areia Preta plant “was below standard from 2004 to 2011”, Environmental Protection Bureau director Cheong Sio Kei said this month in a written reply to an inquiry made in April by Legislative Assembly member Kwan Tsui Hang. In the reply, made public only this week, Mr Cheong said the government had imposed a fine of 4.8 million patacas (US$600,000) on the former operator of the plant, Engenharia Hidráulica de Macau Ltda. Ms Kwan had asked how much improperly treated water had been discharged from the plant between 2009 and 2011, but the reply fails to answer this question. The controlling shareholder of Engenharia Hidráulica is Va Tech Wabag GmbH. “There were issues with the

effluents,” Va Tech Wabag’s managing director, Sean Kilker, told Business Daily. “The equipment was in a bad state of repair. The plant was overloaded for many years. It is not an ideal situation for any operator,” Mr Kilker said. CESL Asia Investments & Services Ltd leads the consortium that now operates the plant. The head of CESL Asia, António Trindade, told Business Daily in an interview in April last year that the plant was in very poor condition. The Environmental Protection Bureau said in December: “Part of the equipment is currently in a state of wear and deterioration due to having passed its usual normal length of usage.” Mr Kilker said Engenharia Hidráulica had proposed various solutions to the government between 2004 and 2007. “Unfortunately, they didn’t take any of these,” he said. He said the first solution proposed had been “expensive in both operational and capital costs”,

so the government had rejected it. “They didn’t want to spend that much money.” Mr Kilker said Engenharia Hidráulica had come back with two short-term solutions, of which the cheapest would have cost over 100 million patacas. “We were giving them a shortterm solution because we were under the impression that a new plant would be built on the reclaimed land for the new bridge,” he added. The plant is due to be modernised under a new five-year contract worth 604.9 million patacas. The deal was supposed to have been closed in October 2010, but was signed only last December. The modernisation is supposed to be completed six months after the signing of the contract. Mr Trindade warned in April last year that failure to modernise the plant’s equipment could lead to “untreated wastewater and sea pollution”. Mr Kilker said: “It is an environmental question.”

Coloane plant’s fate up in the air The Environmental Protection Bureau has yet to put out to tender the new contract to operate and maintain the Coloane sewage treatment plant, says Va Tech Wabag GmbH, the plant’s operator. Va Tech Wabag managing director Sean Kilker said his company would be interested in bidding but that the decision to do so would depend on the rules. Mr Kilker said that if the rules banned consortiums from bidding – as the rules for tendering for the new solid waste management contract did – “it will be very difficult” to bid. He said some equipment problems in the Coloane plant had to be solved, but played down the appearance of foam on water discharged from the plant, which caused a public outcry. “There was no problem. We started one of our four treatment lanes, and when that happens foaming is normal,” he said. The sewage treatment plant on the peninsula released below-standard water from 2004 to 2011 (Photo: Manuel Cardoso)

Visitors stick to cheaper jewellery: Chow Tai Fook M

ainland visitors to Macau and Hong Kong are being more cautious and shifting their views to cheaper jewellery, Chow Tai Fook Jewellery Group Ltd said. The world’s largest listed jewellery chain reported yesterday a 13 percent decline in profit for the 12 months ended in March. Revenue rose just 1.5 percent to HK$57.4 billion (US$7.4 billion). “Consumers were more cautious in spending in view of the unfavourable economic environment,” the company told the Hong Kong Stock Exchange. They changed from high-end pieces to “mass luxury jewellery products” with an average selling price from HK$2,000 to HK$100,000, the filing says. With more mainland tourists visiting Hong Kong and Macau and their disposable income rising, more than half of the retailer’s sales in the two cities were settled through China UnionPay or yuan, Chow Tai Fook stressed. Macau, Hong Kong and other Asian markets accounted for almost half of the group’s total revenue, amounting to HK$27.1 billion, up by 10.5 percent year-on-year. Chow Tai Fook saw its costs rise mainly due to the opening of new stores in “prime areas” and the renewal of rental contracts in Macau and neighbouring SAR. The retailer is confident sales growth will pick up during the new financial year, which began in April. A mid-April slump in international gold price boosted demand for gold jewellery, leading to “exceptional sales performance” for that month, the firm said. But Chow Tai Fook believes “such gold buying spree would only be a short-term” phenomenon. V.Q. with Bloomberg News

June April 19, 19, 2013 2013

Macau

Start-up loan applications accepted from end of July A viable business plan and grasp of the market are the keys to a successful application Tony Lai

tony.lai@macaubusinessdaily.com

oung entrepreneurs may begin applying for interestfree loans as soon as next month, according to Macau Economic Services. The director of Macau Economic Services, Sou Tim Peng, told Business Daily yesterday that he estimated that the government would begin accepting applications towards the end of next month or early in August. “That is our initial plan,” Mr Sou said on the sidelines of the first public briefing on the loan scheme. “There is some preparatory work to be done on the regulations, including the formation of the evaluating committee.” The evaluating committee will assess the applications. The Executive Council announced the loan scheme this month. The scheme will give any eligible permanent resident aged between 21 and 44 a loan of up to 300,000 patacas (US$37,500) to start his or her first business. The loans will last for up to eight years, but borrowers must begin repaying them after a year and a half. The Executive Council said the

Loan applicants should get a reply in two to three weeks, says Sou Tim Peng

purpose was to encourage young entrepreneurs to start businesses by making capital available. Mr Sou said the key to being granted a loan would be the applicant’s business plan.

“For a business proposal, we will first consider the viability, secondly the amount of preparation the entrepreneur has done to put the plan into action, and the entrepreneur’s grasp of the market, along with other

factors,” he said. Concern has been expressed about the criteria for granting applications.

Eligibility concerns Legislative Assembly member Melinda Chan Mei Yi urged the government last week to release details of the criteria that the evaluating committee will use to decide the amount of a loan. Mr Sou said it was up to the evaluating committee whether to release details of the criteria it would use. He said the committee would comprise experts in business and youth affairs. The committee could be set up and begin work next month, he said. “We will give briefings at the same time, so that any interested entrepreneurs can have time to digest the information.” Mr Sou expects the committee to take “about two to three weeks” to decide on each application. This is about the same amount of time the government takes to decide on an application for a loan under its loan scheme for small and medium enterprises. Borrowers can take out several loans as long as they do not all add up to more than 600,000 patacas. Many of the 60 or so people that attended yesterday’s briefing expressed concern about the rules on who is eligible for a loan. The rules say an applicant must be seeking to start a company, or must be running an enterprise that has been operating for less than two years. A holder of the majority stake in any Macau company is ineligible. Mr Sou made it clear that ownership of the majority stake in a company anywhere else would not disqualify an applicant.

Dragon Boat week sees casino revenue spike Analysts raise June estimates to MOP28 bln plus, or as much as 23 pct up year-on-year Michael Grimes

michael.grimes@macaubusinessdaily.com

aily gross gaming revenues for the period June 10 to June 16 inclusive were around 39 percent higher than in the first nine days of the month, suggest several analysts. The boost could help lift the tally for the whole month to around 28.5 billion patacas (US$3.57 billion) they suggest. The first nine days of the month produced average daily run rates of 854 million patacas, suggested Cameron McKnight of Wells Fargo in a note to investors on June 10. From that day to June 16 inclusive, the average daily run rate had risen to 1,188 million patacas including slot revenue, said the analyst in a follow up note this week. Analysts acknowledge the two periods don’t allow strict like-forlike comparisons, being of differing lengths and because the latter period includes the Dragon Boat Festival on June 12, with a public holiday that day on the mainland, in Hong Kong and in Macau. Correcting for the longer first period, the numbers in Dragon Boat week would look even more impressive. Mr McKnight said in his latest note: “Based on trends through June 16, we estimate Macau gaming

revenue growth for June is trending between 18 to 23 percent year-onyear versus our prior eight to 12 percent estimate and May’s 13.5 percent growth.” John Kempf of Canada’s RBC Royal Bank, adjusted his June growth estimates to 19 to 21 percent yearon-year, up from earlier estimates of 10 to 12 percent. Citigroup’s Anil Daswani also lifted his forecast. “By conservatively applying a run rate of 905 million patacas per day (around five percent below the year to date average) for the remainder of month, we raise our June GGR forecast from 27.5 billion patacas to 28.5 billion (up 22 percent year-on-year),” he wrote. Kenneth Fong of J.P. Morgan in Hong Kong, said the casino win rate for baccarat in the week to June 16 had been around three percent – higher than the theoretical 2.85 percent. He added in a note: “Considering that June has typically been seasonally weaker according to our experience in previous years, we assume daily revenue for the rest of the month to be 900 million, and June should end at around 28.6 billion, or 23 percent year-on-year growth.”

Racing ahead – festival has helped June numbers

June 19, 2013

Macau Brought to you by

HOSPITALITY Follow the flag A growing number of visitors are on package tours. The growth is due in part to the increase in the number of visitors of all kinds. But the proportion of visitors of all kinds that package tourists account for is also increasing. Two years ago package tourists made up under 23 percent of visitors. The proportion grew throughout 2011, and for the past four quarters it has been above 30 percent. Like visitors generally, most package tourists are Asians. Over 70 percent are mainland Chinese. The number of package tourists from mainland China has risen by 60 percent in the past two years.

Reigning cash – Grand Emperor Hotel

Emperor Entertainment profits up by fifth Taiwan is Macau’s second-biggest source of package tourists. The fall in the number of visitors of all kinds from Taiwan has been followed by rises in the number that come on package tours and the number that stay overnight. The number of package tourists has doubled since the first quarter of 2011. The next-biggest source of package tourists is South Korea. The number of South Koreans on package tours has risen by 74 percent since the first quarter of 2011, surpassing the number from Hong Kong. How long South Korea will remain the third-biggest source of package tourists is uncertain, as the numbers from Hong Kong vary considerably. The next-biggest sources of package tourists are Japan and India, which have each sent us 40 percent more in the past two years. Other countries in Asia, most of them in Southeast Asia, send us few package tourists individually, but together send us an appreciable chunk of the total. Usually under 1 percent of package tourists come from elsewhere in the world. J.I.D.

113 %

Increase in Q1 package tourists from Taiwan, 2011-2013

Mostly due to improved performance of casino at Grand Emperor Hotel Michael Grimes

michael.grimes@macaubusinessdaily.com

rofits for Emperor Entertainment Hotel Ltd rose nearly 18 percent year-on-year – mostly from gaming and mostly thanks to more business from the so-called ‘premium mass’ segment of high stakes cash gamblers. For the year ended March 31, profit reached HK$548.63 million (US$70.7 million) from HK$465.47 million a year earlier, said a filing to the Hong Kong Stock Exchange. The firm’s main asset is the Grand Emperor Hotel and its casino, on the Macau peninsula. Emperor Entertainment gets 91.5 percent of its revenue from gaming said the earnings statement. The firm recorded a 13.8 percent year-onyear growth in revenue, to HK$2.03 billion, from HK$1.78 billion a year earlier. The Grand Emperor operates its casino under the gaming licence of Sociedade de Jogos de Macau, SA. “Riding on the group’s continued efforts to expand the premium mass

segment, the group had once again delivered satisfactory performance during the year,” management said in a commentary on the results. The board declared a final dividend of HK$0.072 per share, amounting to HK$93.06 million in total, up from the HK$0.06 final dividend declared last year. The latest dividend is payable on September 6. Hong Kong and Hollywood actor Jackie Chan Kong Sang was named in a company press release as a minority shareholder in the ‘Grand Emperor Hotel & Casino’ at the time it opened in January 2006. The casino currently has 67 mass-market tables and 10 self-managed VIP tables according to the latest filing. Emperor Entertainment Hotel is a unit of Emperor Group, a conglomerate founded by Hong Kong businessman Albert Yeung Sau Shing. Other group interests include property, watch and jewellery retailing, entertainment and films,

hospitality, publishing and printing, furniture, food and restaurants. The group was one of the minority backers of American producer and director Oliver Stone’s film ‘W.’, released in 2008, about the life of the United States’ former president George W. Bush. According to this year’s ‘The World’s Billionaires’ list compiled by Forbes magazine, Mr Yeung has an estimated net worth of US$1.4 billion. Another of the group’s units – Emperor International Holdings Ltd – said in a separate filing this week that demolition work has been completed at a prime commercial site at the junction of Avenida do Infante D. Henrique and Avenida da Praia Grande on Macau peninsula. It will be redeveloped as a “multi-storey premium retail complex” with a total gross floor area of approximately 30,000 square feet (2,787 sq. metres) with a projected 2014 opening, said the Holdings unit.

June 19, 2013

June 19, 2013 April 19, 2013

Macau Brought to you by

Financial Monitor Smoke signals The sorts of goods Macau exports have been changing markedly. The amounts of exports of some goods and the proportion of all exports they make up have been increasing. Also, large amounts of some goods pass through Macau in transit. The most notable increase has been in the amount of machinery and equipment exported, but the increase has been almost exclusively in re-exports. Other big increases have been in the amount of optical equipment (including medical equipment), watches, alcoholic drink and tobacco products exported. The increases in exports of these products have little to do with re-exports. The amounts of optical equipment, watches and alcoholic drink exported are dwarfed by the amounts imported, the amounts exported being under 15 percent of the amounts imported. The amount of tobacco products exported is 65 percent of the amount imported.

City needs public convention venue Macau to host big international academic meeting for the first time next week Stephanie Lai

sw.lai@macaubusinessdaily.com

he territory needs to build a public venue if it is to fully develop its meetings, incentives, conventions and exhibitions industry, said scholar Ngo Tak Wing yesterday. Mr Ngo, a professor of political science at the University of Macau, is one of the organisers of the 8th International Convention of Asia

Scholars, which will be held at the Venetian Macao Resort-Hotel from June 24 to 27. The four-day academic meeting with a total budget of over 6 million patacas (US$75 million) will involve over 350 panels on Asian issues, he told media in a briefing yesterday. For such a big-scale event, Mr Ngo admitted that only Venetian

Venetian Macao is the only large-sized convention venue in the city

The biggest of these exports are watches. In the first four months of this year Macau exported more than 218 million patacas (US$27.3 million) worth of watches. The next-biggest are tobacco products, almost 170 million patacas worth of which were exported in the first four months. Macau has recently gained a lot of capacity for making tobacco products. The increase in exports of tobacco products is the only increase that reflects changes in the city’s manufacturing capability. Domestic production of optical equipment, watches and alcoholic drink is minimal, compared with demand here. The increases in the proportions of all exports that these products make up are due mainly to decreases in exports of other sorts of goods. Macau is also a staging post for the shipment of tobacco products and optical equipment. The amount of optical equipment in transit through the city is greater than the amount exported. J.I.D. The content of this column is the work of Business Daily’s journalists.

Stanley Ho’s firm sheds Mozambique bank stake

n investment firm owned by Macau gaming tycoon Stanley Ho Hung Sun has sold its remaining shares in a Mozambique bank for an undisclosed figure. Geocapital Holdings Ltd SA sold its 5.6 percent stake in Moza

Banco SA to BES Africa SGPS SA, a subsidiary of Portuguese BES Group, Moza Banco announced in a statement last week. The deal became official on Thursday after “the necessary authorisations were secured,” the statement adds. Moza Banco has a capital of US$45 million (359.6 million patacas), which means Geocapital’s stake in the bank would have a face value of US$2.5 million. Geocapital founded Moza Banco in June 2008 as a joint venture with

Macao has the sufficient capacity to accommodate all of the event’s components. “In most other cities that would like to develop as a convention hub, there is a [public] convention centre, but we do not have anything like that in Macau…” he said. “I think the government should think seriously about building a convention centre for Macau, to host conventions in a more neutral, professional sense,” the scholar noted. About 20 panels will focus on Macau’s economic and urban development, including the city’s ties to mainland China and Portuguesespeaking countries, cultural heritage and gaming policy. “There will be a double panel held [on June 26] on the casino development in Asia,” said Mr Ngo. “That panel will take a comparative look at the casino development in Singapore, Laos, Vietnam and other Asian countries.” The International Convention of Asia Scholars, launched in 1997, has been held in Honolulu, Daejeon in South Korea, Kuala Lumpur, Shanghai, Singapore, Berlin and Leiden in the Netherlands before. The University of Macau won the bid to host the event for the first time more than two years ago. It is a chance to “provide more impetus for local scholars to catch up with the international community,” said Mr Ngo. “There is a greater need to host serious academic activities like this one,” the professor added. “It will hopefully help boost the academic standards in Macau.” The event includes a documentary screening, book fair and a cultural exhibition on Islamic history, all of which are free admission to the public.

Moçambique Capitais SA, a society of over 370 stakeholders. But the company, whose founding shareholders are Mr Ho and Portuguese businessman Jorge Ferro Ribeiro, has gradually been reducing its presence in the African bank. Geocapital had already sold an 18.9 percent stake in Moza Banco to BES Africa in May. The Portuguese group now owns 49 percent of the bank. Moçambique Capitais remains the controlling shareholder with a 51 percent stake. V.Q.

Correction In yesterday’s edition we published an article titled ‘Auctioneer sees art trade hub in Macau’ that claimed there are currently no duties on art trade. However, for Macau-based auctions – including art auctions – a 0.5-percent stamp duty is usually imposed on buyers. The income tax mentioned in the article – at a rate of up to 12 percent on deals that turn a profit of 300,000 patacas (US$37,543) or more – is imposed on trade within an exhibition. For that inaccuracy we apologise to our readers and to Long Hei Group (Macao) Investment Ltd.

June April 19, 19, 2013 2013

Macau

Court junks burial plot charges against Chan The Court of Final Appeal finds no evidence of wrongdoing by the secretary for Administration and Justice Tony Lai

tony.lai@macaubusinessdaily.com

he Court of Final Appeal ruled yesterday that there is insufficient evidence to press charges of forgery, disobedience and abuse of power against Secretary for Administration and Justice Florinda Chan for stalling an official investigation of the suspicious lease of 10 burial plots. The court issued a written statement saying it would allow no appeal against its ruling on a petition by Paulina Alves dos Santos to have Ms Chan charged. However, Ms Santos told reporters: “The case is not yet closed.” Because it was only a pre-trial, Ms Santos argues she has the right to appeal. The court’s judgement says Ms Santos accused Ms Chan of disobedience in delaying in 2010 the delivery of documents from the Civic and Municipal Affairs Bureau to prosecutors investigating the perpetual lease in 2001 of the 10 burial plots, one of which was leased to a legal adviser of Ms Chan. Ms Santos alleged that Ms Chan

obtained the documents from the bureau, which she is in charge of, and then kept them, even though she knew the prosecutors had asked for them. Administrative action against the bureau’s president, Raymond Tam Vai Man, and its vice-president, Lei Wai Nong, has led to them being suspended for 90 days, with effect from yesterday. The Court of First Instance said last week that Mr Tam and Mr Lei had been charged with disobedience for delaying delivery of the documents to the prosecutors. The Court of Final Appeal’s judgement says Ms Chan told the court that she had asked for only some of the documents in March 2010, so she could reply to a letter Ms Santos had written her the month before.

Mr Tam testified that he did not give them to her. It says the prosecutors first asked Mr Tam’s bureau for the documents on March 15, 2010. The bureau replied to the request on April 23, but failed to send the documents pertaining to the leases. The Secretariat for Administration

and Justice received on March 29 a request from Mr Tam’s bureau to return the documents, and complied on April 8, the judgement says. The court concluded that the secretariat did not withhold or delay delivery of any documents. But presiding judge Song Man Lei noted that Mr Tam’s bureau sent Ms Chan copies of all the documents it had delivered to the prosecutors. The court ruled that, regardless of the intention of sending her copies, “which was not normal practice”, there was “no direct relation” between this action and the delay in sending the documents to the prosecutors. Judge Song also rejected charges of forgery and abuse of power against Ms Chan. The prosecutors decided in January this year against pressing any charges, saying there was insufficient evidence. Ms Santos asked the court to review the decision of the prosecutors.

Abnormal practice The judgement says there is no written evidence that Ms Chan asked for the original documents containing the leases of the burial plots, and that

Corporate UBS executive to join Las Vegas Sands Corp Grant Chum – currently managing director, head of Hong Kong Equity Research at UBS Investment Bank – is to join Las Vegas Sands Corp in August. At the casino resort developer he will take the role of senior vice president of global gaming strategy. He will report to Rob Goldstein, the company’s president of global gaming operations. “We’ve known Grant for many years and we are all big admirers of his work. To have him join our leadership team is very exciting and we expect he will contribute meaningfully from the moment he starts,” said LVS chairman Sheldon Adelson in reaction to the appointment. LVS said Mr Chum will work on corporate strategy, gaming operations optimisation, shareholder and financial relations, and new development. The Oxford University-educated banker will continue to be based in Hong Kong. He has worked for UBS since 1999, and has been responsible for research into Asian gaming markets since 2006.

Steelman designs high limit area for Galaxy Macau A high stakes gambling area designed by casino architect Paul Steelman opened on Monday at Galaxy Macau, the flagship property on Cotai of casino operator Galaxy Entertainment Group Ltd. The Pavilion Club High Limits area has a main hall of nearly 4,000 square feet (372 sq. metres), two private gaming rooms and a gourmet food and drinks menu. It’s aimed at the most valuable ‘premium mass’ customers, meaning high limit gamblers that use cash rather than credit. The opening of the area “…reflects our acknowledgement of the valuable, growing premium segment…” said Raymond Yap, the group’s director of international premium market development. Galaxy Macau also has two other Pavilion-branded areas for premium mass patrons – The Pavilion High Limits Tables and The Pavilion High Limit Slots. The casino operator recently opened another Pavilion zone – The Pavilion High Limit Area – at StarWorld Macau. It has 14 high-limit gaming tables and six high-limit slot machines.

There is insufficient evidence to charge Florinda Chan with forgery, disobedience and abuse of power

June 19, 2013 April 19, 2013

Greater China FDI eases on economic slowdown Foreign direct investment in China rose in May by the least in four months, a sign of concern that growth is slowing in the world’s second-biggest economy. Inbound non-financial investment increased 0.3 percent from a year earlier to US$9.26 billion, the Ministry of Commerce said yesterday, after a 0.4 percent gain in April. China’s outbound investment rose 20 percent in the first five months of the year to US$34.3 billion, compared with a 27.4 percent pace in January-April.

Home prices surge in May House prices rose at the fastest pace this year in May from a year earlier, though the pace of monthly gains slowed, highlighting the dilemma facing the central bank as it balances the need to support the economy against holding down housing inflation. Average new home prices in 70 major Chinese cities in May rose 6 percent from a year earlier, after a two-year high of 4.9 percent in April, according to the National Bureau of Statistics yesterday. Liu Jianwei, a senior statistician at the NBS, said however that easing month-on-month gains showed fresh signs of home price rises losing momentum.

Insiders sell most shares in 4 years Major shareholders, senior management and individuals with stakes of more than 5 percent sold a net 24.7 billion yuan (US$4 billion) of Chinese A shares in May, the most for a month since June 2009, UBS AG said. The biggest sales were in computer-related shares, media and “special equipment” sectors, UBS strategists including Qin Xia wrote in a report yesterday. Net stakes rose only in chemical raw materials and telecom operations, while the sell-off in smaller companies as a percentage of the freefloat reached new post-2008 highs, they wrote.

PBOC refrains from adding Tolerance for cash crunch signals economic confidence Gabriel Wildau and Lu Jianxin

he Chinese central bank’s decision to remain on the sidelines as a nasty liquidity squeeze has roiled interbank funding markets in recent weeks signals the government’s confidence in the economy, despite signs of a growth slowdown, money market traders say. The stance signals policy makers’ view that monetary easing isn’t necessary and also tips official willingness to accept slower growth in the near term in return for protecting against the mediumand long-term systemic risks of an excessive debt build-up. A slew of economic and credit indicators released last week showed inflation, money supply, and credit growth all missing expectations, and many analysts have cut their full-year growth forecasts in recent weeks. As recently as last month, many market watchers expected the People’s Bank of China (PBOC) to ease monetary policy in response to signs of slowing growth in the real economy. Those expectations have now been thoroughly crushed. Traders said Beijing is particularly sensitive to the way expectations about the economy could become self-fulfilling, amid growing talk that authorities have lost their grip on the economy and that a severe slowdown may be looming. “With so many people talking down the economy, there is a real threat that expectations will realise themselves via acts of panic by banks and other institutions, so the PBOC has taken the initiatives to temper market sentiment,” said a money market trader at an Asian bank in Shanghai. “The PBOC’s recent hard-line stance is not a tightening, but aims to force the market to understand that monetary policy remains neutral for now.” Traders and analysts say money market rates are likely to return gradually to normal after hitting multi-year highs last week, but they say the psychological impact of the

recent turmoil will linger. The central bank’s stance means that even if the PBOC now becomes more generous in offering cash to the market, such adjustments will be interpreted as technical fine-tuning, not as a sign of a genuine shift to looser policy. “Through the events over the past week, we think the PBOC has made it clear that overly-rapid credit expansion would not be accommodated,” Wang Tao, head of China economics at UBS AG in Hong Kong, wrote in a note to clients. “Behind all these is perhaps the central government’s increased tolerance for slower growth and increased attention to controlling financial risks,” she added.

On the sidelines For much of the year, heavy foreign capital inflows kept interbank liquidity flush, due to a rising currency, low interest rates in developed markets and optimism about a growth recovery in the world’s second-largest economy. Through early May, the PBOC mainly used its open market operations to sterilise these large inflows by withdrawing excess funds.

But conditions shifted abruptly in May, as inflows began to slow and even reverse amid global concern that the Federal Reserve will soon begin tapering its bond purchase programme. PBOC data released on Friday showed Chinese banks, including the central bank, bought 67 billion yuan (US$10.9 billion) worth of foreign exchange in May, down sharply from an average of 378 billion in the first four months of 2013. But the PBOC declined to use its open market operations to inject additional funds to compensate for the reduced inflows. On the contrary, the central bank re-started the withdrawal of funds through central bank bills, which had been suspended since December 2011. Reflecting the tightness, the Ministry of Finance failed to sell the full 15 billion yuan worth of government bills scheduled to be sold at auction last Friday, the first time that the ministry failed to auction all its debt since July 2011. Yesterday, the central bank again declined to inject funds at regularly scheduled open-market operations. Without help from the central bank, however, and with the quarterend approaching - when banks

Central bank signals monetary loosening isn’t necessary

China in carbon trading experiment Government takes cautious step towards carbon emissions trading

C EBay CEO confident on payments licence EBay Inc.’s PayPal division will become the first foreign company to secure a payments licence in China, CEO John Donahoe predicted, but the e-commerce giant is taking a cautious approach to expansion in the country. Mr Donahoe, however, said it remained next-to-impossible to guess when the PayPal unit would finally get the green light. “I am confident that PayPal will be the first non-domestic company to get a payments license in China. That could be in three months or five years,” said Mr Donahoe.

hina launched its first pilot carbon emissions exchange yesterday though plans for a nationwide roll out and efforts to apply the scheme to some polluting heavy industries could be undermined by a slowdown in the economy. High-emission industries such as aluminium and steel are likely to resist higher costs as they are already battling weak prices due to tepid demand and a persistent supply gut. “It is a very big concern for Beijing and for local governments – how to strike a balance between controlling emissions and maintaining economic growth especially amid a general slowdown in the economy,” said Shawn He, lawyer and carbon specialist at the Hualian legal practice in Beijing.

While the exchange in the southern city of Shenzhen will not immediately lead to a big cut in China’s emissions of climate-changing greenhouse gas, now the world’s highest, it does still represent a statement of intent by Beijing, campaigners said. “This is just a baby step when you look at the total quantity of emissions, but it enables China to establish institutions for carbon controls for the first time,” said Li Yan, head of environmental group Greenpeace’s climate and energy campaign in China. Under such a cap-and-trade scheme, companies must buy allowances from others if they want to exceed carbon limits. But there is still a long way to go in China, and the design of its pilot platforms – as well as the national scheme that

would eventually replace them – face economic and social pressures. “Of course, decision makers have to look at the social impact – the carbon market cannot be designed in an idealistic way and you have to make sure the design of the mechanism will address such issues as social stability,” said Wu Changhua, China director with the Londonbased Climate Group consultancy.

Pilot scheme The Shenzhen exchange is one of seven pilot schemes due to be launched this year or next, and will involve 635 local industrial enterprises accounting for more than a quarter of local GDP and more than 30 million tonnes of CO2 emissions. But that is still a drop in

June April 19, 19, 2013 2013

Greater China

g cash

Banking stress may come faster than thought: Fitch Companies calling for resumption of capital injections

Selling yuan advised as flows ebb Currency strategists from Barclays Plc to Deutsche Bank AG are advising investors to sell the yuan, this year’s best-performing emerging-market currency, as growth slows in the world’s second-largest economy and inflows wane. Policy makers will widen the yuan’s trading band, damping the one-way bet on yuan gains, Barclays analysts led by Igor Arsenin said in a June 13 report. Deutsche Bank analysts wrote two days earlier that the yuan carry trade will probably unwind as Treasury yields rise. The yuan will start weakening after the central bank set its fixing at a record high on Monday, according to Amer Bisat, a money manager at Traxis Partners LP. The yuan’s fixing was set 0.09 percent weaker at 6.1651 per dollar yesterday. “We are not far away from the point where they can take their foot off the brake,” said Mr Bisat, a former International Monetary Fund economist. “Chances are they would loosen policies. It’s tough for me to see them strengthening the fixing any further from here.”

traditionally try to boost deposit totals to prettify their financial statements to shareholders and regulators – liquidity could remain tight through end-June or early July. Such high levels, if they linger for weeks, will eventually feed through to financing costs in the real economy. Small corporates, who are the marginal borrowers in China’s financial system, will be the hardest hit. Reuters

the ocean compared to the country’s total emissions of around 8 billion tonnes last year. Other platforms due to start in 2013 include one in the business hub of Shanghai and Hubei province. While giant oil firms like Cnooc and PetroChina Co Ltd will take part in the Shenzhen scheme, few of the companies involved will be from bloated but carbon-intensive heavy industrial sectors such as steel or aluminium, and figuring out how to include them is likely to be a bigger challenge. After Shenzhen, Shanghai and Hubei, four more pilot exchanges are due to open in the capital Beijing, the sprawling industrial municipalities of Tianjin and Chongqing, and the manufacturing centre of Guangdong province on the southeast coast, probably next year. The National Development and Reform Commission said the seven pilot schemes will begin a process of integration in 2015 and that a nationwide platform will go into

hina’s worst cash crunch in at least seven years is an indicator of shadow lending gone awry and a banking crisis may appear earlier than expected if liquidity remains tight, according to Fitch Ratings. “We are starting to see some issues emerging” in liquidity, Charlene Chu, Fitch’s head of China financial institutions, said in an interview on Bloomberg Television yesterday. “It will be very important over the next month or so to see how that plays out. If that doesn’t go away, some of this may be moving ahead faster and earlier than we thought.” The seven-day repurchase rate, a gauge of interbank funding availability, has averaged 6.03 percent in June, the most since the National Interbank Funding Centre began compiling a weighted average in 2006. Agricultural Development Bank of China Co Ltd scaled back the size of two bond offerings yesterday by 31 percent as the liquidity crunch squeezes demand for the securities. Chinese finance companies are calling for the central bank to resume capital injections as the nation’s slowing growth and speculation the U.S. will rein in monetary stimulus curbs global demand for the Asian nation’s assets. Yuan positions

operation some time before 2020. But the seven regions were given considerable leeway to design their own schemes and it remains unclear how they will connect together. Reuters

at local financial institutions accumulated from sales of foreign exchange, an indication of capital flows into China, rose 66.9 billion yuan (US$10.9 billion) in May, the central bank reported on June 14. That was the smallest gain since November. The tightening is “emblematic of some of the shadow banking issues

We are going to have banking sector problems. Those can manifest either in a crisis or they can manifest in slow growth Charlene Chu, senior director, Fitch Ratings Beijing

Bloomberg News

Beijing, EU to hold talks on solar dispute

Battling to balance growth with environment

coming to the fore as well as some of the tight liquidity associated with wealth management product issuance, and the crackdown on some shadow channels,” Ms Chu said. She earlier estimated China’s total credit, including off-balance-sheet loans, swelled to 198 percent of gross domestic product in 2012 from 125 percent four years earlier, exceeding increases in the ratio before banking crises in Japan and South Korea. In Japan, the measure surged 45 percentage points from 1985 to 1990, and in South Korea, it gained 47 percentage points from 1994 to 1998, Fitch said in July 2011. “Triggers and timing is the biggest question related to China,” Ms Chu said. “We are going to have banking sector problems. Those can manifest either in a crisis or they can manifest in slow growth.” Morgan Stanley lowered China’s 2013 economic growth estimate last week to 7.6 percent from 8.2 percent, joining banks including UBS AG and Barclays Plc in cutting projections after weaker expansion in exports, industrial output and new lending last month. Ms Chu said that the outlook on the nation’s sovereign rating will be stable, while ratings for smaller financial institutions are under downward pressure.

he Chinese government said yesterday it will hold talks this week with the European Union in a bid to resolve a dispute over solar panels and other business issues, as tensions between the two risk escalating into a trade war. The two sides have “tentatively decided” to hold the annual ministeriallevel meeting of the joint economic and trade commission on Friday in Beijing, said Shen Danyang, spokesman for the Ministry of Commerce. “At this conference, the two sides will seriously review what happened over the past year in bilateral trade relations and study how to resolve [the] problems, including the dispute

over photovoltaic [solar panel] trade,” he told reporters. China’s Minister of Commerce Gao Hucheng and EU Trade Commissioner Karel De Gucht will jointly preside over the talks, Mr Shen added. “We believe both sides will cherish the chance and … in a pragmatic manner make joint efforts to reach an agreement [on the solar issue] that is acceptable to both as soon as possible,” he said. The European Commission, the EU’s executive arm, levied an initial average tariff of 11.8 percent this month on Chinese solar panels, which will rise to 47.6 percent on August 6 if there are no negotiations based on a Chinese commitment to address the problem. In addition to solar cells, Brussels and Beijing are also involved in a series of disputes covering other products, ranging from steel pipes to wine, which have sparked fears of a trade war. AFP

10 10

June 19, 2013 April 19, 2013

Asia Malaysia’s 1MDB plans US$1 bln IPO Sovereign wealth fund 1Malaysia Development Bhd plans to raise about US$1 billion through a public listing of its power assets in Malaysia next year, Dow Jones Newswires has reported. The proposed initial public offering is the latest in a string of announced or rumoured listings that could return Malaysia to the ranks of top regional IPO markets. The funds raised will help pay off some of the debts. Government-owned 1MDB has bought several power plants, including Malaysian tycoon Ananda Krishnan’s power generation business for US$2.7 billion and Genting Bhd’s domestic energy operations for 2.3 billion ringgit (US$730 million), Dow Jones said.

Indonesia approves fuel price rise Government aims to lift petrol costs by 44 percent Kanupriya Kapoor and Adriana Nina Kusuma

ndonesia’s parliament paved the way for a jump in gasoline and diesel prices after months of delay that has undermined confidence in the government and the ability of Southeast Asia’s biggest economy to continue growing rapidly. The average 33 percent price

rise will cut the government’s costly fuel subsidies and could support the struggling rupiah after the central bank scrambled last week to prop up the currency as it was caught in an emerging market selloff. Indonesia will hike petrol prices once the government has finalised the

process to compensate poor families for the rise in fuel costs, the Finance Minister Chatib Basri said yesterday. Mr Basri did not provide a specific timeline on when that may occur. After a 12-hour, often noisy session, parliament voted 65 percent in favour of a revised budget for

Parliament paved the way for a rise in petrol and diesel prices

the year, which includes cash compensation for the poor to help them cope with the higher fuel costs. President Susilo Bambang Yudhoyono, who has to formally sign off on the measures, had demanded aid for the poor. The surge in fuel prices, which will boost inflation and in turn could spark labour union wage demands, is testing Mr Yudhoyono’s already uneasy ruling coalition of political parties, which are increasingly focused on next year’s general and presidential elections. Outside parliament police used water cannons to disperse demonstrators, among thousands holding protests in cities across the giant archipelago. There were scattered reports of violence. “We reject the proposed cash handouts because it doesn’t address the real issue of poverty. Instead, they’re trying to be like Santa Claus before next year’s general election,” the head of the largest labour union, Said Iqbal, told reporters. About 20,000 security officials had been placed on alert in the capital, police said. Protests have marked previous attempts to raise fuel prices. Mr Yudhoyono had agonised for months over whether to lift the price of fuel and risk a public outcry. In

Thai govt set to cut rice intervention price Farmers may accept changes if broad scheme continues

hailand plans to cut prices and limit the amount of rice bought in a controversial support scheme for the grain as it attempts to retain vital political support from farmers and sustain a budget-draining programme. Commerce Minister Boonsong Teriyapirom told reporters a proposal will be put to the cabinet under which the price to be paid to farmers for their paddy could be cut to between 12,000 baht (US$390) and 13,500 baht per tonne in the 2013/14 crop from the current 15,000 baht. The cabinet will also discuss a proposal to limit the amount of rice the government will buy in the crop year from October to around 14 million to 15 million tonnes, Mr Boonsong told reporters. The move could help lift rice exports from the world’s third-largest

exporter of the grain by regaining some price competitiveness. The current support price is estimated by exporters to be as much as 50 percent above the market level. “We plan to cut the intervention price and limit the amount of rice we will buy because we want to maintain fiscal discipline. We don’t want to put a huge burden on the country’s budget,” Mr Boonsong said. On Monday the National Rice Committee estimated losses in the crop year from October 2011 at 136 billion baht (US$4.4 billion), the first real estimate announced by a government body since the present scheme began in October 2011. Moody’s rating agency warned earlier this month that losses from the scheme threatened the government’s goal of a balanced budget and were therefore “credit negative”, adding fuel

to a political row over a programme that critics say is wasteful and corrupt.

‘Soft landing’ In 2011/12 the government said it would buy all the grain offered to it. In the current crop year, it started by offering to buy an unlimited amount but later excluded some low-grade varieties. Thailand is forecast to produce 27.5 million tonnes of paddy from the 2013/14 crop, up 2.2 percent from the previous crop as the high intervention price has encouraged farmers to grow more rice, according to the Agriculture Ministry. Farmers have said they would accept some restrictions to the intervention and even a lower price if that helped the government maintain the scheme and support their income.

US$4.4 bln

Estimated losses in the crop year from October 2011, according to the National Rice Committee Traders and industry officials said the cut in the intervention price was the best option for the government, which needed to retain the political support of millions of rural voters but also had to contend with the financial strains caused by the scheme. “This is the only way for the government to survive as it can’t stop the scheme, which brought it to power for sure. It needs a soft

11 11

June April 19, 19, 2013 2013

Asia India can curb gold imports: Mayaram India, the world’s biggest consumer of gold, could implement more measures to curb imports, a top economic official said as the country seeks to narrow a record current-account deficit and check the currency’s drop. “We are not at the end of our wits as far as gold imports are concerned,” Economic Affairs Secretary Arvind Mayaram (pictured) told Bloomberg Television. “If required, there are other measures that can be taken and they will be considered at the appropriate time.” India this month increased a tax on gold imports as it tries to curb demand for the metal that’s contributed to the current-account gap and hurt the currency.

the end, he thrust the problem on parliament’s shoulders by making MPs first agree to come up with help for the poor. The revised budget sets aside about 9 trillion rupiah (US$910 million) in cash compensation for more than 15 million families, which will be paid over four months.

Reform test Under the government’s proposal, ordinary gasoline would rise 44 percent and diesel by 22 percent. The government is proposing to increase the gasoline price to 6,500 rupiah a litre from 4,500 rupiah and the diesel price to 5,500 rupiah a litre from 4,500 rupiah, Mr Basri said last month. Indonesia recorded a trade deficit of US$1.6 billion in April, official data show. Raising fuel prices has been seen as a key test of Mr Yudhoyono’s

KEY POINTS Parliament agrees to budget revisions Not clear when price rises will occur Fuel hike could take some selling pressure off rupiah Thousands protest across the country

commitment to economic reform in the final 1-1/2 years of his term as prospects for rapid economic growth soften. Fuel subsidies last year cost the former OPEC member some US$20 billion and is putting pressure on the current account deficit. The finance ministry has said the price rises could save the state about US$4 billion if they are implemented this month. Rumours late last week that Jakarta was about to raise fuel prices helped lift the rupiah off its lowest level against the dollar in almost four years as the currency came under fire from investors cutting their emerging market exposure over uncertainty in the future of U.S. monetary policy. The pressure on the rupiah and concerns of the inflationary impact of costlier fuel, prompted surprise increases in two of the central bank’s key interest rates last week. It expects inflation to top 7 percent after fuel prices rise from the current level of around 5.5 percent. The finance minister told MPs that if fuel subsidies were not cut, the budget deficit could reach close to 4 percent of GDP. The initial budget had put the deficit at just 1.6 percent. Pointing to concerns that the momentum of reform was stalling, ratings agency Standard & Poor’s early last month downgraded its outlook for Indonesia’s sovereign credit to stable from positive. The move was especially galling for the Indonesian government because at the same time S&P upgraded its rating for the neighbouring Philippines. While Indonesia’s technocrats have been shouting for fuel prices to rise, the issue has become largely hostage to politics ahead of next year’s elections. Reuters

Govt to limit the amount of rice it buys from farmers

landing,” said Niphond Wongtrangarn, a former head of the Thai Rice Millers Association who is now an adviser to a parliamentary agricultural committee. The government has not yet given details of the cost of the scheme in the current crop year or the volume

it has sold. It has put the amount of rice left in stockpiles at 17 million tonnes. As a comparison, before the intervention price made Thai rice uncompetitive on world markets, the country exported a record 10.6 million tonnes in 2011. Reuters

Sony appears to be regaining its competitive edge Daniel Loeb, Third Point LLC

Third Point boosts stake, presses for Sony spin-off Loeb suggests flotation of company’s entertainment division

hird Point LLC, the hedge fund controlled by billionaire Daniel Loeb, increased its stake in Sony Corp by 9.4 percent while seeking talks with the board on a proposed spinoff of part of its entertainment business. Funds controlled by Third Point now own 70 million shares through director ownership and cash-settled swaps, according to a June 17 letter from the investor to Sony chief executive Kazuo Hirai obtained by Bloomberg News. That equals about 6.9 percent of the Tokyo-based company’s shares on issue. “Given our large stake, we reiterate our offer to serve on Sony’s board of directors,” the fund said in its letter also reviewed by Reuters. Mr Hirai and Sony’s board are discussing Third Point’s proposal to sell as much as 20 percent of its music and movie assets in an initial public offering to focus on reviving its consumer electronics earnings. Mr Loeb offered to meet with Sony directors and bankers and said the company is regaining its edge, citing the new PlayStation 4 game console and Xperia smartphones. “It’s positive for Sony; Loeb is acknowledging Sony’s potential,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co in Tokyo. “It would be good for shareholders if Sony spins off its entertainment unit as it would boost its value.” Sony shares rose as much as 4.41

percent closing at 2,036 yen in Tokyo trading and the stock has more than doubled this year. The Topix index, Japan’s broadest equity measure, closed up 0.2 percent. Sony’s share of Japan’s smartphone market rose to a threeyear high this month, widening its lead over Apple Inc., as new Xperia models and a discount programme from the nation’s largest wireless carrier, NTT DoCoMo Inc., helped stoke sales. The company unveiled its new PS4 this month, with orders for the new console running ahead of internal projections, Andrew House, president and group chief executive of Sony Computer Entertainment, said last week in an interview. Earlier this month, in a face-off between Microsoft Corp’s Xbox One and the PlayStation at the annual E3 video-game conference in Los Angeles, Sony won the first round by pricing its machine US$100 below Microsoft’s and offering more flexibility about how to play, trade and sell games. “Sony appears to be regaining its competitive edge,” Mr Loeb said in the letter. “Given our large stake, we reiterate our offer to serve on Sony’s board of directors.” Mr Loeb said a spinoff of the entertainment assets should include a “semi-independent governance structure” with Mr Hirai serving as chairman of both companies. Bloomberg News/Reuters

June 19, 2013

Markets Hang Seng Index NAME

PRICE

DAY %

VOLUME

33.1

-0.3012048

20600110

CHINA UNICOM HON

2.6

-0.7633588

19737392

CITIC PACIFIC

BANK OF CHINA-H

3.23

-0.308642

271288928

BANK OF COMMUN-H

5.58

28484977

BANK EAST ASIA

28.25

-0.528169

5673904

BELLE INTERNATIO

10.98

-2.831858

22142745

24.9

0.6060606

9201664

HANG LUNG PROPER

13.6

1.190476

3407112

HANG SENG BK

118.5

-1.002506

951115

108.5 -0.09208103

5912268

HENDERSON LAND D

46.75

0.3218884

2174625

78.5

-1.505646

1622184

19.08

-0.9345794

9315791

AIA GROUP LTD ALUMINUM CORP-H

BOC HONG KONG HO CATHAY PAC AIR CHEUNG KONG CHINA COAL ENE-H

4.68

-0.2132196

67239906

CHINA CONST BA-H

5.57

-0.5357143

242103211

19.16

-0.2083333

24984586

0.2087683

3698617

CHINA MOBILE

77.4

0.5194805

CHINA OVERSEAS

20.8

-1.654846

CHINA PETROLEU-H

5.69

1.065719

139994884

CHINA RES ENTERP

24.4

-1.214575

1862520

CHINA RES LAND

21.45

-1.152074

10547056

CHINA RES POWER

18.42

-2.33298

6504991

CHINA SHENHUA-H

23.55

-0.422833

18072355

CHINA LIFE INS-H CHINA MERCHANT

NAME

PRICE

DAY %

VOLUME

10.62

0.3780718

13871541

8.54

0.3525264

4728842

SANDS CHINA LTD

CLP HLDGS LTD

63.45

-0.2358491

3832850

SINO LAND CO

CNOOC LTD

13.62

0.2945508

61486137

COSCO PAC LTD

10.48

-0.1904762

ESPRIT HLDGS

11.46 27.5

HENGAN INTL HONG KG CHINA GS

PRICE

DAY %

68.8

-1.078361

3102022

40.65

4.36457

17353972

POWER ASSETS HOL

VOLUME

11.2

0.5385996

5299896

SUN HUNG KAI PRO

100.6

0.4995005

5533068

9350911

SWIRE PACIFIC-A

95.45

1.112288

2199076

0.8802817

5023464

TENCENT HOLDINGS

300.6

-0.1328904

3255819

-0.7220217

10389660

20.1

-0.248139

3935345

10.46

-1.691729

17005018

69.2

-1.354241

3554879

HONG KONG EXCHNG

124.1

-0.3212851

1648553

HSBC HLDGS PLC

84.05

0.2385212

14792815

18262926

HUTCHISON WHAMPO

81.45

4844741

14155588

IND & COMM BK-H

4.82

-0.2070393

285801342

11.18

-0.8865248

11597601

MTR CORP

29.2

0.1715266

NEW WORLD DEV

11.4

PETROCHINA CO-H

8.59

PING AN INSURA-H

55.35

LI & FUNG LTD

NAME

TINGYI HLDG CO WANT WANT CHINA WHARF HLDG

MOVERS

2 21270

INDEX 21225.88 HIGH

21265.53

2731324

LOW

20969.14

-0.5235602

9131070

52W (H) 23944.74

0.8215962

86185109

-0.1803427

10452573

PRICE

DAY %

VOLUME

25.35

-0.7827789

6803958

(L) 18710.58984

20960

14-June

18-June

Hang Seng China Enterprise Index NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.43

101716009

AIR CHINA LTD-H

5.58

-1.413428

20037598

CHINA PETROLEU-H

5.69

1.065719

139994884

2.6

-0.7633588

19737392

CHINA RAIL CN-H

7.05

-0.7042254

5882714

ANHUI CONCH-H

21.95

16176819

CHINA RAIL GR-H

3.75

-1.315789

21485449

BANK OF CHINA-H

3.23

-0.308642

271288928

CHINA SHENHUA-H

23.55

-0.422833

18072355

CHINA TELECOM-H

ALUMINUM CORP-H

NAME CHINA PACIFIC-H

5.58

28484977

3.79

0.530504

50216352

32.95

2.96875

1839268

DONGFENG MOTOR-H

11.44

0.1751313

9975948

CHINA CITIC BK-H

3.85

0.2604167

24922603

GUANGZHOU AUTO-H

7.79

-2.86783

6836350

CHINA COAL ENE-H

4.68

-0.2132196

67239906

HUANENG POWER-H

7.26

0.8333333

28822525

CHINA COM CONS-H

6.77

-0.4411765

11788863

IND & COMM BK-H

4.82

-0.2070393

285801342

CHINA CONST BA-H

5.57

-0.5357143

242103211

JIANGXI COPPER-H

14.82

0.7682405

14535745 86185109

BANK OF COMMUN-H BYD CO LTD-H

3.45

6.153846

23119015

PETROCHINA CO-H

8.59

0.8215962

19.16

-0.2083333

24984586

PICC PROPERTY &

8.75

9435968

CHINA LONGYUAN-H

7.96

-0.6242197

13928967

PING AN INSURA-H

55.35

-0.1803427

10452573

CHINA MERCH BK-H

13.92

0.2881844

15651360

SHANDONG WEIG-H

9.99

-2.058824

5678563

CHINA MINSHENG-H

8.69

-0.6857143

52202152

SINOPHARM-H

20.6

0.7334963

2823076

CHINA NATL BDG-H

7.3

-0.9497965

46618248

TSINGTAO BREW-H

53.7

-3.155996

1353005

15.06

-1.953125

5659416

WEICHAI POWER-H

CHINA COSCO HO-H CHINA LIFE INS-H

CHINA OILFIELD-H

25.85

0.3883495

NAME

PRICE

DAY %

VOLUME

YANZHOU COAL-H

6.58

-2.518519

32675368

ZIJIN MINING-H

1.76

-0.5649718

35763990

ZOOMLION HEAVY-H

6.17

-1.594896

16030513

12.58

2.777778

6058912

ZTE CORP-H

MOVERS

5 9820

INDEX 9733.54 HIGH

9814.53

LOW

9628.04

52W (H) 12354.22 (L) 8987.76

9620

14-June

2354731

18-June

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.69

0.7490637

66292716

CHONGQING CHAN-A

9.58

2.459893

29396052

POLY REAL ESTA-A

11.12

1.367366

40244473

AIR CHINA LTD-A

4.81

-0.8247423

10188294

CHONGQING WATE-A

6.05

2.195946

7743366

QINGDAO HAIER-A

11.64

2.555066

9049907

ALUMINUM CORP-A

3.74

0.2680965

13010599

CITIC SECURITI-A

11.22

0.8992806

51980650

QINGHAI SALT-A

20.39

0.8906482

4798835

ANHUI CONCH-A

14.03

-1.197183

30148930

CSR CORP LTD -A

4.07

22853261

SAIC MOTOR-A

14.18

0.07057163

20649521

AVIC AIRCRAFT-A

10.83

0.9319664

14046696

DAQIN RAILWAY -A

6.18

-0.4830918

24158345

SANAN OPTOELEC-A

20.25

-2.173913

15922998

2.459016

21508088

SANY HEAVY INDUS

8.14

-0.245098

22712752

NAME

BANK OF BEIJIN-A

8.48

0.7125891

16716561

DATANG INTL PO-A

BANK OF CHINA-A

2.73

-0.5464481

52072308

EVERBRIG SEC -A

12.63

1.201923

13948856

SHANG PHARM -A

11.55

0.3475239

4605772

BANK OF COMMUN-A

4.46

-0.2237136

64550618

GD MIDEA HOLDI-A

12.85

2.146264

13313425

SHANG PUDONG-A

9.07

0.6659267

40358845

BAOSHAN IRON & S

4.33

-0.9534092

10206755

GD POWER DEVEL-A

2.41

50312969

SHANGHAI ELECT-A

3.73

2573324

BEIJING TONGRE-A

23.35

-0.511291

4557552

GEMDALE CORP-A

6.73

2.591463

24816857

SHANXI LU'AN -A

14.51

0.5544006

8111836

BYD CO LTD -A

34.74

2.720284

10000629

GF SECURITIES-A

12.2

0.660066

15415539

SHANXI XISHAN-A

9.63

-1.129363

8360066

24.5

-1.448109

8237530

GREE ELECTRIC

25.31

5.458333

22301461

SHENZEN OVERSE-A

5.89

1.376936

20543046

CHINA AVIC ELE-A CHINA CITIC BK-A

3.99

0.7575758

9681642

GUANGHUI ENERG-A

20.35

4.092072

15274629

SUNING COMMERC-A

5.54

-0.8944544

41129555

CHINA CNR CORP-A

4.29

0.2336449

21340162

HAITONG SECURI-A

10.81

1.31209

70545269

TASLY PHARMAC-A

40.94

-0.8956669

3555894

CHINA COAL ENE-A

6.06

5840513

HANGZHOU HIKVI-A

37.65

-3.287953

7313140

TSINGTAO BREW-A

37.55

-0.4770739

1346153

CHINA CONST BA-A

4.65

0.4319654

24145518

HENAN SHUAN-A

41.06

-0.04868549

5181216

WANHUA CHEMIC-A

16.23

1.058531

6206464

CHINA COSCO HO-A

3.31

-0.3012048

12314307

HONG YUAN SEC-A

22.32

-2.404897

24321297

WEICHAI POWER-A

20.15

0.5489022

10526940

CHINA EAST AIR-A

2.89

-0.3448276

8665293

HUATAI SECURIT-A

9.18

1.101322

21364096

WULIANGYE YIBIN

21.3

0.7092199

10891730

CHINA EVERBRIG-A

0.3344482

61099935

HUAXIA BANK CO

10.1

0.6979063

11160821

YANZHOU COAL-A

12.37

-0.8814103

3422775

14.97

0.06684492

9056501

IND & COMM BK-A

4.16

0.9708738

39691835

YUNNAN BAIYAO-A

86.91

-1.462585

1543898

CHINA MERCH BK-A

12.2

0.8264463

34491029

INDUSTRIAL BAN-A

16.64

1.898347

62582027

ZHONGJIN GOLD

11.16

-0.9760426

9884984

CHINA MERCHANT-A

11.44

1.869991

17924682

INNER MONG BAO-A

24.59

0.3673469

13411689

ZIJIN MINING-A

CHINA MERCHANT-A

25.27

2.349129

11945655

INNER MONG YIL-A

30.24

8.89449

64549862

ZOOMLION HEAVY-A

CHINA MINSHENG-A

9.95

0.4036327

93114498

INNER MONGOLIA-A

4.59

-0.6493506

43663560

ZTE CORP-A

CHINA NATIONAL-A

10.68

1.908397

27130206

JIANGSU HENGRU-A

28.84

-0.6887052

6358175

JIANGSU YANGHE-A

1924692

CHINA LIFE INS-A

CHINA OILFIELD-A

15.61

2.697368

4091292

56.18

1.389641

CHINA PACIFIC-A

17.49

-0.2281803

11578630

JIANGXI COPPER-A

18.7

-1.215003

7765705

CHINA PETROLEU-A

6.35

23417536

JINDUICHENG -A

9.55

-0.2089864

4220449

CHINA RAILWAY-A

4.59

-1.713062

24217723

KANGMEI PHARMA-A

19.1

0.473435

19766156

CHINA RAILWAY-A

2.63

-1.12782

18186280

KWEICHOW MOUTA-A

CHINA RESOURCE-A

29.6

6437890

CHINA SHENHUA-A

18.66

-1.374207

CHINA SHIPBUIL-A CHINA SOUTHERN-A CHINA STATE -A CHINA UNITED-A CHINA VANKE CO-A CHINA YANGTZE-A

4.52

191.65

1.14524

2737772

LUZHOU LAOJIAO-A

24.67

0.7761438

8039025

12465487

METALLURGICAL-A

1.87

-0.5319149

42801127

59982923

NARI TECHNOLOG-A

15.9

0.1259446

9125864

2.35

-0.4237288

9141783

7.49

1.628223

25268585

3.3

0.9174312

12461246

NINGBO PORT CO-A

3.56

0.2816901

54288785

OFFSHORE OIL-A

3.55

39238608

PETROCHINA CO-A

8.12

-0.1230012

13589955

10.44

1.06486

70590357

PING AN BANK-A

19.73

2.546778

38959938

0.2808989

13549536

PING AN INSURA-A

38.18

1.596594

39695453

PRICE DAY %

Volume

NAME

PRICE DAY %

Volume

7.14

MOVERS 164

2.9

-0.3436426

29504409

6.47

-2.118003

58893786

12.62

6.677937

63680092

111

25 2430

INDEX 2418.745 HIGH

2423.69

LOW

2397.46

52W (H) 2791.303 (L) 2102.135

2389

14-June

18-June

FTSE Taiwan 50 Index NAME ACER INC

22.5

1.351351

7442877

ADVANCED SEMICON

25.3

1.606426

12276070

ASIA CEMENT CORP

36.5

0.2747253

ASUSTEK COMPUTER

FORMOSA PLASTIC

NAME

PRICE DAY %

Volume

-1.004304

6166905

TAIWAN MOBILE CO

112

0.9009009

FOXCONN TECHNOLO

73.8

2788770

TPK HOLDING CO L

578

0.6968641

2486945

1803701

FUBON FINANCIAL

39.8 -0.3754693

10073047

TSMC

106.5

0.4716981

30026097

UNI-PRESIDENT

302

2.027027

5214425

HON HAI PRECISIO

71.5

0.5625879

34623995

AU OPTRONICS COR

12.25

0.8230453

75051179

HOTAI MOTOR CO

300

-1.960784

401974

CATCHER TECH

58.6 -0.3401361

UNITED MICROELEC

13.55

1.879699

7100912

6029515 65545211

162.5

1.5625

5776616

HTC CORP

266.5

0.1879699

5269873

WISTRON CORP

29.75 -0.5016722

7634878

CATHAY FINANCIAL

39.7

-1.243781

21409241

HUA NAN FINANCIA

16.75

0.2994012

4952648

YUANTA FINANCIAL

15.5 -0.3215434

13010059

CHANG HWA BANK

16.3 -0.6097561

10697071

LARGAN PRECISION

985

-1.5

1216463

YULON MOTOR CO

48.5

CHENG SHIN RUBBE

93.8

0.8602151

9911003

LITE-ON TECHNOLO

49.2

0.203666

4842889

CHIMEI INNOLUX C

18.7

0.5376344

31203073

MEDIATEK INC

355.5

0.4237288

4709518

CHINA DEVELOPMEN

8.44 -0.4716981

30608639

MEGA FINANCIAL H

22.65

15612109

CHINA STEEL CORP

24.2

-1.022495

13705146

NAN YA PLASTICS

58.5 -0.5102041

7334538

CHINATRUST FINAN

18.85

0.2659574

23855892

PRESIDENT CHAIN

186

935053

0.8403361

5796308

QUANTA COMPUTER

60.5

-2.733119

6178481

17 -0.5847953

CHUNGHWA TELECOM COMPAL ELECTRON

16672859

SILICONWARE PREC

3.496503

17510473

138.5

2.973978

6843877

SINOPAC FINANCIA

14.45

1.048951

8586069

FAR EASTERN NEW

31.2

3210224

SYNNEX TECH INTL

43.2

2688599

FAR EASTONE TELE

73.5

0.6849315

4947843

TAIWAN CEMENT

37.55 -0.6613757

9071268

16.85

0.8982036

5849099

1387540

27.6 -0.7194245

879578

DELTA ELECT INC

FIRST FINANCIAL FORMOSA CHEM & F FORMOSA PETROCHE

17.65

0.2840909

7033604

TAIWAN COOPERATI

69.1

-2.124646

4945447

TAIWAN FERTILIZE

76 -0.5235602

1625660

TAIWAN GLASS IND

MOVERS

5538.36

LOW

5478.67

2394376

6 5540

INDEX 5535.75 HIGH

0.2066116

52W (H) 5896.71 (L) 4719.96

5470

14-June

18-June

June 19, 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange)

44.5

64.6

43.7

64.1 21.0

42.9

63.6

42.1

average 43.243

Max 40.9

average 40.141

Min 40.65

40.5

Last 44

Min 38.75

Max 64.5

average 63.712

PRICE

Min 19.8

20.4

23.46

39.8

20.2

39.2

20.0

23.32 23.18

Max 20.5

average 20.163

DAY %

YTD %

(H) 52W

Min 19.8

Last 20.35

(L) 52W

-0.184105554

4.151547492

100.4000015

81.5

BRENT CRUDE FUTR Aug13

105.28

-0.180146013

-1.487788902

115.1699982

91.76999664

GASOLINE RBOB FUT Jul13

285.6

-0.003501278

1.140307387

318.0399895

235.0999832

GAS OIL FUT (ICE) Aug13

888.5

-0.642996925

-2.255225523

983.5

816

NATURAL GAS FUTR Jul13

3.899

0.619354839

9.460976979

4.499000072

3.329999924

294.16

-0.294885266

-2.002198754

322.0499992

259.5000029

Gold Spot $/Oz

1378.14

-0.5269

-17.202

1796.08

1322.06

Silver Spot $/Oz

21.8103

-0.3299

-27.5646

35.365

20.3395

Platinum Spot $/Oz

1428.82

-1.4131

-5.8593

1742.8

1374.55

Palladium Spot $/Oz

704.53

-3.4097

0.6961

786.5

553.75

1844

-0.37817396

-11.04679209

2200.199951

1809 6762.25

NY Harb ULSD Fut Jul13

LME ALUMINUM 3MO ($)

19.8

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

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

LME COPPER 3MO ($)

7083

-0.098730606

-10.6922204

8422

LME ZINC

1858

-0.107526882

-10.67307692

2230

1745

14290

-0.244328098

-16.23681125

18920

14052

16.345

0.122511485

3.810733566

17.07500076

14.79500103

539.5

0.185701021

-10.04585244

665

512

693

0.763358779

-14.12639405

905.75

673.75

1288

0.194476857

-1.132220303

1409.75

1186.5

123.05

-0.162271805

-19.28501148

203.8499908

122.7999954

NAME

16.47999954

ARISTOCRAT LEISU

72.62999725

CROWN LTD

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul13 Dec13

WHEAT FUTURE(CBT) Sep13 SOYBEAN FUTURE Nov13 COFFEE 'C' FUTURE Sep13 SUGAR #11 (WORLD) Oct13

17.06

COTTON NO.2 FUTR Dec13

87.79

-1.101449275

-14.9551346

-1.34846612

11.49352299

22.8599987 89.55999756

World Stock Markets - Indices

23.04 Max 23.55

average 23.191

Min 22.9

Last 23.1

22.90

20.75472

0.42

0.216

-7.345572

6.74

2.88

CHINA OVERSEAS

20.8

-1.654846

-9.956711

25.6

16.362

14155588

CHINESE ESTATES

13.46

0.5979073

10.96987

14.12

8.012

557000

CHOW TAI FOOK JE

8.66

-1.702611

-30.38585

13.4

8.4

3480800

2.9

-3.654485

53.43915

3.07

1.16

3775000

2.45

102.1409

2.76

0.805

3382000

2810.8

FTSE 100 INDEX

6355.73

0.3987053

7.764236

6875.62

5435.46

HANG SENG BK

DAX INDEX

8203.39

-0.1501997

7.763652

8557.86

6096.94

-4.130352

2791.303

2102.135

1440516

0.32

3532.038

0.6200914

8.28

5.55

14.32739

2418.745

13.75

CENTURY LEGEND

0.8346879

16.11996

CHEUK NANG HLDGS

3452.131

CSI 300 INDEX

-0.6415397

974375

8328.019531

2903807

12.39

9201664

NASDAQ COMPOSITE INDEX

18710.58984

VOLUME CRNCY

0.75

12450.17

15942.6

2.29

22.6

(L) 52W

23944.74

(L) 52W

4.49

15542.4

25.128

(H) 52W

29.52381

1.72

(H) 52W

-6.316124

YTD %

0.2457002

3.3195

15.84011

-0.1982641

DAY %

4.08

-22.14286

YTD %

-9.42245E-05

PRICE

-1.801802

0.7277285

21225.88

0.9326 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1203 51.3863 28.56 1.2152 28.913 40.54 9338 79.316 1.20054 0.77553 7.7018 9.6245 94.12 1.0289

0.6060606

DAY %

13007.28

(L) 52W

1.0625 1.6381 0.9972 1.3711 103.74 8.0111 7.7664 6.3964 58.985 32 1.2847 30.203 43.315 10174 105.433 1.265 0.88151 8.4957 10.9254 133.8 1.032

1.09

PRICE

(H) 52W

-8.6818 -3.0415 -0.4675 1.4936 -9.4828 -0.1039 -0.1018 1.6627 -5.911 -0.6498 -2.9942 -2.8542 -4.8939 -1.1607 -0.9041 -1.9218 -4.4683 0.1609 -1.5666 -10.8136 -0.0194

24.9

15179.85

YTD %

-1.4865 -0.1591 0.3914 0.3448 -0.2839 0.0188 0.0155 -0.0702 -0.9986 -0.3899 -0.4368 -0.0468 -0.5335 -0.2019 1.2203 0.0528 -0.5049 -0.4034 -0.3431 -0.6361 0

AMAX HOLDINGS LT

HANG SENG INDEX

DAY %

0.9477 1.5684 0.9197 1.3387 95.12 7.9915 7.7585 6.1287 58.45 30.78 1.2591 29.886 43.115 9908 90.142 1.23114 0.85356 8.2043 10.698 127.34 1.0301

BOC HONG KONG HO

COUNTRY

NIKKEI 225

PRICE

Macau Related Stocks

DOW JONES INDUS. AVG

EMPEROR ENTERTAI FUTURE BRIGHT GALAXY ENTERTAIN

6.024096

44.97529

44.4

16.98

24530667

118.5

-1.002506

-0.1684894

132.8

102.6

951115

HOPEWELL HLDGS

26.3

0.5736138

-20.90226

35.3

19.74

782392

HSBC HLDGS PLC

84.05

0.2385212

3.38253

90.7

61.1

14792815 2180700

HUTCHISON TELE H

4.2

0.7194245

17.97753

4.66

2.98

LUK FOOK HLDGS I

18.56

-0.1076426

-23.93443

30.05

15.12

1811000

MELCO INTL DEVEL

16.98

4.267731

88.45726

18.18

5.12

7148046 5964755

TAIWAN TAIEX INDEX

8011.02

0.2268266

4.045978

8439.15

6922.73

MGM CHINA HOLDIN

21.2

7.287449

59.65924

21.6

9.509

KOSPI INDEX

1900.62

0.9303808

-4.828625

2042.48

1758.99

MIDLAND HOLDINGS

2.94

-0.6756757

-20.54054

2.8

912000

S&P/ASX 200 INDEX

4814.35

-0.2389615

3.557791

5249.6

3993.8

NEPTUNE GROUP

0.189

6.179775

24.34211

0.23

0.084

49430000

4854.757

1.680866

12.46488

5251.296

3843.022

NEW WORLD DEV

11.4

-0.5235602

-5.158073

15.12

8.66

9131070

SANDS CHINA LTD

40.65

4.36457

19.7349

43.7

20.65

17353972

JAKARTA COMPOSITE INDEX

19.8

Last 21.2

40.4

97.59

NAME

average 20.945

23.60

WTI CRUDE FUTURE Jul13

CORN FUTURE

Max 21.5

Currency Exchange Rates

NAME

METALS

62.6

Last 64.1

20.6

Commodities ENERGY

Min 62.8

41.0

38.6

Last 40.65

20.4

63.1

41.3 Max 44.35

21.6

FTSE Bursa Malaysia KLCI

1774.3

0.1201916

5.053442

1826.22

1581.27

SHUN HO RESOURCE

1.42

1.428573

1.67

1.03

NZX ALL INDEX

954.194

0.400468

8.17876

998.487

755.149

SHUN TAK HOLDING

3.87

1.842105

-7.637233

4.65

2.56

5370751

PHILIPPINES ALL SHARE IX

4031.42

2.257237

8.987341

4571.4

3295.86

SJM HOLDINGS LTD

20.35

2.777778

14.66302

22.382

12.995

14780544

SMARTONE TELECOM

13.26

-1.044776

-5.823863

17.38

12.5

1377500

WYNN MACAU LTD

23.1

1.315789

10.26253

26.5

14.62

5611048

ASIA ENTERTAINME

3.55

-5.333333

26.12433

4.7647

2.2076

475425

0.969163

28.15925

57.83

41.74

437140 12000

HSBC Dragon 300 Index Singapor

613.03

0.54

-1.3

STOCK EXCH OF THAI INDEX

1470.88

-0.01087666

5.671977

1649.77

1144.44

HO CHI MINH STOCK INDEX

498.88

0.07221375

20.58105

533.15

372.39

BALLY TECHNOLOGI

57.3

Laos Composite Index

1338.82

10.2118

1455.82

980.83

BOC HONG KONG HO

3.24

1.25

5.537462

3.6

2.85

GALAXY ENTERTAIN

5.41

-0.1845018

36.27204

5.43

2.25

1000

INTL GAME TECH

17.38

0.7536232

22.65349

18.81

10.92

3621762

JONES LANG LASAL

89.03

0.6785028

6.063852

101.46

61.39

252057

LAS VEGAS SANDS

57.11

1.187101

23.72184

60.54

32.6127

5189801

MELCO CROWN-ADR

24.64

2.240664

46.31829

25.15

9.13

3084579

MGM CHINA HOLDIN

2.52

36.21621

2.71

1.36

2550

MGM RESORTS INTE

14.94

1.288136

28.35051

15.95

8.83

7795954

SHFL ENTERTAINME

17.97

0.1114206

23.93103

18.57

12.35

470668

SJM HOLDINGS LTD

2.54

0.3952569

11.52011

2.9481

1.7255

2000

138.39

2.404913

23.02427

144.99

84.4902

2189504

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

WYNN RESORTS LTD

AUD HKD

USD

14 14

June 19, 2013 April 19, 2013

Opinion

Only the poor die young Johan P. Mackenbach Professor of Public Health and chair of the Department of Public Health at Erasmus MC, University Medical Center Rotterdam

eople who are lower on the socioeconomic ladder (indicated by their level of education, occupation, or income) have shorter and less healthy lives, on average, than those on higher rungs. Indeed, life expectancy at birth often varies by 5-10 years, depending on social and economic well-being, with poorer people spending 10-20 more years of life suffering from illness or disability than their wealthier counterparts. In the nineteenth century, this situation would not have been surprising, given low average income, widespread poverty, and lack of social security. But such data are commonly reported for highincome countries today, including those ranking high on indices of economic prosperity

and human development – even Western Europe’s highly developed welfare states. Since the end of World War II, Western European countries have tried to reduce socioeconomic inequality, or offset its consequences, through progressive taxation, social security programmes, and a wide range of collectively financed provisions, such as public housing, education, health care, and cultural and leisure facilities. But, while these policies have reduced inequalities in some social and economic outcomes, including income, housing quality, and healthcare access, they have been insufficient to eliminate health inequalities. Long-term time-series data indicate that the socioeconomic mortality

gap narrowed before the 1950’s, but has grown substantially since then. More puzzling is the fact that more generous welfare policies do not translate into smaller health disparities. Even the Nordic countries – world leaders when it comes to creating universal and well-designed welfare policies that cover citizens from cradle to grave – face significant health disparities, despite their relatively low income inequality.

Modest results To be sure, modern welfare states have far from abolished social inequality, with disparities in access to material and human resources continuing to generate highly unequal lives

among their citizens. But the welfare state’s aim has never been radical redistribution of wealth. Rather, welfare policies are intended to create a compromise between the interests of employees and employers, labourers and the middle classes. As a result, their redistributive effects are modest. So, while a partial failure of the welfare state may help to explain the persistence of health inequalities, one must look elsewhere to understand – and reverse – their rise. Two possible explanations have emerged from the rapidly growing scientific literature on the subject: selective upward social mobility and delayed diffusion of behavioural change. In reality, both factors are at work. During the twentieth century, social mobility increased slowly but steadily in all high-income countries, with educational achievement and occupational status depending less on family background and more on cognitive ability and other personal characteristics. As a result, the lower socioeconomic groups have not only shrunk in size, but have probably also become more homogeneous in terms of personal characteristics that increase the risk of health problems. Moreover, people with a higher socioeconomic position tend to adopt new behaviours first, and to abandon more

More, bettertargeted redistributive policies … are crucial to improving health outcomes in lower socioeconomic groups

readily behaviours that are found to damage health, such as smoking and high-fat diets. Given this, new behavioural recommendations by health authorities tend to exacerbate health inequalities, at least temporarily. Significant disparities in smoking, physical exercise, diet, and alcohol consumption afflict many of Western Europe’s welfare states. The welfare system, which was created to combat poverty, has been less effective against “diseases of affluence” like heart disease and lung cancer.

Western mistake All of this highlights the need for creative solutions to disparities that unnecessarily and unfairly blight the lives of those who have the least, generate massive health-care costs, and pose a barrier to increased labour-force participation (impeding efforts in some countries to raise the retirement age). In the last few decades, social policy in most Western European countries has moved away from redistribution. This is a mistake, given that the consequences of this shift – rising income inequality, weaker social safety nets, and reduced health-care access – will aggravate health inequalities in the long run. In fact, more, bettertargeted redistributive policies, which account for the effects of selective upward social mobility and different rates of diffusion of behavioural change, are crucial to improving health outcomes in lower socioeconomic groups. Income support should be complemented by preventive health programmes, while health literacy programmes could help to diminish the link between low cognitive ability and bad health. Equal access to health care is not enough. Reducing inequalities in health outcomes requires more intensive health care for patients in lower socioeconomic brackets, tailored to their specific needs and challenges. For example, revenues from tobacco taxation, which disproportionately affects lower income groups, should be used to fund cessationsupport programmes that target disadvantaged smokers. Significant and persistent health inequality indicates that, by raising the health levels of those with lower incomes or less education, massive strides could be made in improving populations’ overall health. This may require reshaping the welfare system to some extent, but the payoff would be well worth the effort. © Project Syndicate

editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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June April 19, 19, 2013 2013

Opinion Business

wires

Leading reports from Asia’s best business newspapers

Abenomics races against the clock William Pesek

Bloomberg View columnist

Inquirer Business Money sent home by overseas Filipino workers reached US$2 billion in April amid the sustained demand for high-skilled workers in other countries. The Bangko Sentral ng Pilipinas reported that personal remittances, which support the domestic spending that has fuelled the country’s economic rise, rose 7 percent year-on-year. This brought the year-to-date total to US$7.7 billion, higher by 6.4 percent over the same four-month period last year.

Straits Times Salary increases and bonuses in Singapore are set to fall for the rest of this year, according to a Tower Watson survey of 101 companies. The findings of the 2013 Singapore HR Trends Survey showed that salary increases from April to December this year are expected to fall to 4.6 percent including promotion and to 3.8 percent excluding promotion. Companies are expected to pay variable bonuses of 2.1 months of base pay during the nine-month period.

Korea Herald North Korea’s surprise offer of dialogue with the U.S. was met with a frosty reaction by Seoul and Washington, which both call on Pyongyang to prove sincerity with its actions before resuming talks. Pyongyang proposed a high-level meeting with Washington to defuse military tensions and discuss a peace treaty and the U.S. campaign for a nuclear-free world. South Korea’s President Park Geun-hye expressed her misgivings about the North’s intention during a telephone conversation with U.S. President Barack Obama. Unification Minister Ryoo Kihl-jae said he sees “little possibility” for talks between the North and the U.S.

Thanh Nien Daily Vietnam is considering making significant cuts to car taxes to boost domestic production, especially when import tariffs are scrapped on cars from Southeast Asia in 2018 under a regional treaty. The agreement requires Vietnam to cut import taxes gradually to zero in 2018 for vehicles imported from Asean members. The Vietnamese Ministry of Industry and Trade is considering cutting special consumption tax on automobiles by 30 to 70 percentage points and registration fees by 50 to 70 percentage points.

re Shinzo Abe’s days as Japan’s prime minister numbered? Many will dismiss this question as premature or naive – perhaps both. The architect of “Abenomics” boasts a higher approval rating than any of the eight previous Japanese prime ministers. Abe’s Liberal Democratic Party is heading to a big victory in next month’s upper-house election. Supporters are convinced he will use that mandate to end Japan’s 20-year deflationary funk with boldness, creativity and panache. There’s just one problem with their thesis: The batteries that have powered support for Abe’s revival plan – surging stocks – are running out. Given how quickly the Japanese electorate tends to sour on politicians, the prime minister and his most ardent fans should be worried. Six months into Abe’s shock-therapy experiment of massive monetary and fiscal stimulus as well as sweeping structural reforms, Japan faces record trade deficits, extreme volatility in the bond market and rising energy and food costs as a weaker yen makes imports more expensive. The capital-spending and household-wage increases that are needed to halt deflation have yet to materialise. Punters could ignore all this data when Japanese stocks were locked into an upward trajectory. Abe’s hope was that the equity boom would spark a positive domino effect. Optimistic companies

would hire more and fatten paychecks. Households would open their newly flush wallets. Increased output would swell government coffers and help pay down Japan’s massive debt. Buoyant corporate profits would draw ever more investors into markets and keep the whole virtuous cycle going until gross domestic product soared.

Pulling a Koizumi In effect, Abe hoped to pull a Koizumi on the political establishment. Former Prime Minister Junichiro Koizumi was able to outmanoeuvre Japan’s parliament and bureaucracy, privatise the vast postal-savings system, and

cut public-works spending by appealing directly to the public and investors. That’s why Abenomics began with the Bank of Japan doubling the monetary base, bolstering consumer confidence. Already, though, the strategy is beginning to fray, as evidenced by recent stock swoons. Huge gains in the Nikkei 225 Stock Average and broader Topix Index bought Abe time to articulate how he planned to deregulate the economy, liberalise trade, cut corporate-tax rates and encourage entrepreneurship. He has failed to do so, and his lack of a clear blueprint is now eroding any goodwill he had earned in the markets.

Public trust

Instead of offering strategic thinking that breeds confidence, Abe & Co are following markets that they should be leading

As with Koizumi, Abe will need several years to see through his reforms. Yet the median tenure of the last 10 Japanese prime ministers is only 419 days. If public trust slides along with markets, the odds of Abe sticking around will drop, too. Even if he hangs on, his chances of ramming big changes past Tokyo’s vested interests decrease. Yes, it may be too soon to judge. But it hardly seems promising that consumergoods makers and retailers aren’t buying into Abenomics. Executives from Asahi Breweries Ltd to clothier Fast Retailing Co to skin-careproducts maker Shiseido Co have no plans to raise prices. What about Japan’s fickle populace? Polls show

Abe’s previously bulletproof support is starting to crack. The approval rating for his Cabinet dropped 2.8 points to 57.4 percent, according to a Jiji Press poll conducted from June 7 to June 10 (even before a series of big drops in the market last week). It’s the second straight month of declines. Other polls show the Cabinet’s standing has also begun to slide with stocks. For all the supposed excitement about Abe’s saving Japan, only 44 percent of respondents to a recent Yomiuri newspaper poll said they would vote for the LDP next month.

Bag of goods Stock gyrations are merely a symptom of what ails Abenomics. Voters, like foreign investors, are sensing they have been sold an alltoo-familiar bag of goods. Abe’s team appears to be making things up as it goes along, promising additional tweaks after every zig and zag in markets. Instead of offering strategic thinking that breeds confidence, Abe & Co are following markets that they should be leading. Creating a bubble in expectations, along with a bubble in stocks, is no way to heal the world’s thirdbiggest economy. Abe must get a handle on these violent market swings, and now. Otherwise, mass disillusionment may drive him out of office – and Japan’s big opportunity for change with him. Bloomberg View

June 19, 2013

Closing IPIM opens new liaison office in Fuzhou

Galaxy management participative says Lui

The Macau Trade and Investment Promotion Institute (IPIM) opened a new liaison office yesterday in Fuzhou, capital of Fujian province. It is the institute’s fifth office in mainland China. Jackson Chan, president of the institute, said this could strengthen bilateral ties, as well as “provide consultation and relevant support” for Macau businesses to develop in Fujian and the province’s West Coast Economic Zone, according to a press statement. The trade between Fujian and Macau reached US$71.68 million (573.4 million patacas) last year while Macau-backed investments there totalled US$54.1 million.

Galaxy Entertainment Group Ltd is not a “pure local Chinese company who does the Chinese way” the casino firm’s vice chairman Francis Lui Yiu Tung told Reuters. The management style is participative and relies on a large team of expatriates, he added. Being a Chinese-led business has however helped Galaxy understand the preferences of Chinese customers. He cited the decision to stock some rooms with a hot pot and instant noodles rather than a coffee machine. “We felt the customers in Macau would want something very different [from the Las Vegas model],” explained Mr Lui.

HK adds banks in rate rigging probe Hong Kong’s de facto central bank said yesterday that its investigation into possible benchmark rate manipulation has been extended to include HSBC Holdings Plc and a number of other banks. The Hong Kong Monetary Authority (HKMA) announced in December that it was investigating UBS AG about possible misconduct relating to its submissions for the Hong Kong Interbank Offered Rate (Hibor). “Apart from UBS, the HKMA have since December 2012 followed up with a number of banks including HSBC (both local and international banks) to ascertain whether there have been any inappropriate market conducts in their benchmark rate submissions,” HKMA said in a statement, adding that the investigation was ongoing. The move is the latest announcement in a series of global investigations going on into benchmark rates following the discovery that some had been rigged, most notably Libor, the London interbank Offered Rate. HSBC said it cannot comment on specific regulatory matters. In its annual report released in March, the bank noted that it was subject to a number of regulatory proceedings on benchmark rate submissions in the U.K., United States, Canada, the European Union, Switzerland and Asia. Last week the Monetary Authority of Singapore (MAS) announced that traders from 20 banks, including HSBC, had tried to inappropriately influence benchmark rates in the Southeast Asian city-state. “As home regulator of HSBC in Hong Kong, the HKMA has asked HSBC to promptly implement remedial measures and actions as required by the MAS,” HKMA said.

China likely to end IPO freeze in July New rules pave the way for resumption as more than 600 applicants on the waiting list

hina is likely to resume approving initial public offerings at the end of July, sources quoted a senior regulator as saying yesterday, after a freeze since October as part of efforts to crack down on wrongdoing and restore investor confidence. The resumption, which had been expected around midyear, follows the release of draft rules early this month to reform IPO mechanisms, including greater freedom on the timing of listings and strict penalties for underwriters that give misleading information. Given recent market weakness, analysts do not expect a rush of companies to market despite a long

backlog of applications, although the resumption will be a boon for the mainland’s brokerages. Yao Gang, vice chairman of the China Securities Regulatory Commission (CSRC), told brokerages at a meeting yesterday that “it is almost certain” that IPOs will resume at the end of next month, people who were present at the meeting said. They declined to be identified because they are not authorised to speak to the media. Officials at the CSRC, which has never publicly indicated how long its IPO freeze would last, did not respond to requests for comment. The number of IPO applicants in China has shrunk 17 percent to 666

from more than 800 last November, as companies dropped their listing plans due to accounting issues or a slump in profits. The CSRC ordered underwriters to audit all applicants’ books and is conducting inspections on randomly selected cases to confirm their accuracy. “It shows the CSRC’s determination to ensure that good companies go to the market,” said Edmond Chan, a partner at PricewaterhouseCoopers’ capital market services group in Hong Kong. The IPO resumption would benefit Haitong Securities Co Ltd, China Merchants Securities Co Ltd and other mainland brokerages whose earnings have been hit by a slump in investment banking revenue over the past year. It would also give applicants, many of which are not state-owned, badly needed access to the capital markets and boost the private sector as it struggles with slowing economic growth. A number of Chinese companies have decided to turn to the Hong Kong market for fundraising after getting impatient waiting for a mainland IPO. Reuters

EU, U.S. launch trade talks Deal overshadowed by French row

Mengniu to acquire Yashili in US$1.6b deal China Mengniu Dairy Co Ltd, the country’s largest dairy producer, offered to buy a local infant formula maker in a deal valued at about HK$12.5 billion (US$1.6 billion) as baby food demand surges and the government pushes for safer products. Mengniu is buying a 75 percent stake in Yashili International Holdings Ltd from chairman Zhang Lidian’s family and Carlyle Group, it said in a statement yesterday. It will also offer to buy the rest of the company, giving shareholders the option to sell at HK$3.50 a share in cash, or about 5 percent more than Yashili’s last trading price. The investment helps Mengniu build a bigger presence in China’s baby formula market that is projected to expand more than 70 percent to 133.5 billion yuan (US$21.8 billion) by 2015, according to Euromonitor International. The company is making its third deal in two months after food scandals including contaminated milk powder and rat meat sold as mutton have fuelled demand in the second-largest economy for better quality and products sourced from overseas. “The government is trying to consolidate the industry by backing Mengniu to take control of smaller ones so it can better monitor both upstream and downstream food quality,” Todd Yang, an analyst at Guosen Securities Co Ltd, said.

alks on a trade deal between the U.S. and the European Union, which could be the biggest bilateral deal ever, will begin in Washington next month. “We intend to move forward fast,” European Commission President José Manuel Barroso told reporters yesterday at the start of the Group of Eight summit in Lough Erne, Northern Ireland. He was standing alongside President Barack Obama, EU President Herman Van Rompuy and their host, U.K. Prime Minister David Cameron. “We’re talking about what could be the biggest bilateral trade deal in history, which would have an impact bigger than all the other trade deals put together,” Mr Cameron said. Both sides already have goods and services trade valued at US$2 billion a day. For E u r o p ea n n a ti o n s h el d back by the three-year-old debt crisis, which has sent euro-area unemployment to a record and helped push the U.K. into a double-dip recession, a trade deal offers one way of spurring growth without increasing debt. A deal may take two years to

put together. The European Commission estimates an agreement could generate annual economic benefits of 119 billion euros (US$159 billion) for Europe and US$126 billion (95 billion euros) to the U.S. EU negotiations over the last few weeks have exposed internal differences that may end up threatening a deal. The French government vowed to wield its veto power unless audiovisual policies were fully excluded from the commission’s mandate, saying culture can’t be treated as a commercial item. The commission and most EU nations including the U.K. and Germany opposed that stance and pressed France to show flexibility. They proposed to fix so-called “red lines” for the talks to ensure European policies to promote cultural works wouldn’t be jeopardised, while allowing some possible concessions to the U.S. so the EU would have greater leverage over other matters, such as American public procurement. EU ministers carved the audiovisual industry out of the mandate to win French support,

José Manuel Barroso, European Commission president

while leaving the commission the right to request permission to negotiate on this issue later. Other potential areas of discord are public procurement, where socalled Buy America rules represent barriers for Europe, and agriculture, including genetically modified foods that the EU regards more sceptically than the U.S. The idea for the agreement “has been warmly received in the United States,” Mr Obama said. Reaching a deal “is going to be a priority of mine and my administration.” Bloomberg News