Hotels more New deal expensive but still opens door booked up to Lao flights
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Cable TV and antenna firms can ‘co-exist’ Page 2
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Vitor Quintã
MOP 6.00
April 19, 2013
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D
espite jumps of 50 or 60 percent in parking space annual rents, drivers are reluctant to buy spaces because of the uncertain outlook for the property market says an expert. More people are opting to rent spots short-term rather than buy them. “Seven out of every 10 deals this year are parking leases
and the rest are sales,” the general manager of CarparKing Co Ltd, Chan Lik Ki, told Business Daily. Mr Chan said that last year sales had accounted for at least half of parking space deals. But in the current nervy investment climate, parking spots are seen as a marginal asset. More on page 4
Lower leased-line fees little help to phone users
www.macaubusinessdaily.com
Year II
Number 313
Wednesday June 26, 2013
Editor-in-chief Tiago Azevedo
Deputy editor-in-chief
Drivers make U-turn over parking spots
The proposed reduction in the cost of leasing Companhia de Telecomunicações de Macau SARL (CTM)’s landline telecoms network is not enough to create a truly competitive market, a person in the industry told Business Daily. On Monday CTM said it would reduce its charges for allowing companies to lease an international line – for overseas connections, namely Internet access. The change takes effect from next month. Page 3
I SSN 2226-8294
Hang Seng Index 19990
19892
19794
19696
19598
Filipinos immigrate despite South China Sea tensions
19500
June 25
HSI - Movers Name
Macau had more Filipino non-resident workers last month than ever before, despite a call here for a boycott of Philippine products and Filipino labour. At the end of last month over 17,300 Filipino blue-card holders were in Macau, 170 more than in April, data released yesterday by the Human Resources Office show. It is the highest number since publication of such data began in 2007. Page 5
Record attendance at G2E Asia says Reed Global Gaming Expo Asia had record visitor numbers this year according to co-organiser Reed Exhibitions. The event held at CotaiExpo at The Venetian Macao in May had 5,851 attendees said Reed, adding it was an increase of 16 percent on the previous year. Reed previously reported 2012 attendance as 6,161 people. It’s reduced that figure to 5,046 due to some 2012 attendees being double counted. Page 6
%Day
HENGAN INTL
5.09
WHARF HLDG
4.59
CITIC PACIFIC
3.77
HUTCHISON WHAMPO
2.66
HANG LUNG PROPER
2.55
CHINA MERCHANT
-2.06
CHINA RES POWER
-2.21
PING AN INSURA-H
-2.43
COSCO PAC LTD
-3.12
CHINA COAL ENE-H
-4.57
Source: Bloomberg
Brought to you by
2013-06-26
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2013-06-28
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June 26, 2013
Macau
Hotels more expensive but still filling up M
acau hotel rooms cost more last month than a year earlier, but that did little to slow the hospitality business, as hotel occupancy rates rose. In May the average rate for a hotel room was 1,372 patacas (US$172), or 3.7 percent more than a year earlier. But the average occupancy rate of all hotels increased by 3.7 percentage points to 84.4 percent. Data released by the Macau Hotel Association this week show the biggest increase was in the average cost of a night in a room in a fourstar hotel, which rose by 7.4 percent. But four-star hotels still have the cheapest rooms, costing an average of 852 patacas per night. Five-star hotels, which contain two-thirds of hotel rooms in Macau, charged an average of 1,634 patacas
per night, 2.4 percent more than a year earlier. Three-star hotels were almost 600 patacas cheaper. Although they were the most expensive, high-end hotels were the busiest last month, having an occupancy rate of 84.8 percent, 5.2 percentage points more than a year earlier. The average occupancy rate of all hotels increased in spite of the addition of almost 4,000 hotel rooms to market in the past 12 months. Only in three-star hotels did the average occupancy rate fall slightly, to 84.3 percent. The Macau Hotel Association gathered its data from its 42 members, comprising 22 hotels with five stars, 11 with four stars and nine with three stars. V.Q.
Five-star hotels were the busiest of all Macau hotels last month
Casino corporate tax issue ‘resolved by year-end’ Solaire shareholder hopes court action can be avoided in tussle between Pagcor and Philippines taxman Michael Grimes
michael.grimes@macaubusinessdaily.com
T
he chairman of Philippines casino investor Bloomberry Resorts Corp says he expects a tax dispute between the Bureau of Internal Revenue and industry regulator the Philippine Amusement and Gaming Corp to be “resolved before the end of the year”. Fitch Ratings said in a report last week that a 30-percent corporate income tax on casinos announced by the tax bureau in April was “potentially a notable detriment” to market growth. It suggested that tax breaks for the country’s new casinos – venues being built at Entertainment City in Manila Bay – were designed to allow operators better margins on gaming operations than rival jurisdictions such as Macau, so they could plough more money back into player incentives such as rebates for VIP gamblers. Enrique Razon – whose firm is majority shareholder in the US$1.2 billion (9.59 billion patacas) Solaire Resort & Casino that opened in Manila in March – said on the sidelines of Bloomberry’s annual stockholders’ meeting it was up to Pagcor to settle the tax issue. “I think it will be resolved before the end of the year. If it is not resolved by Pagcor, it could end up in court. Hopefully, it is resolved in the executive department,” the Manila Standard newspaper reported Mr Razon saying. Lawrence Ho Yau Lung, cochairman of Macau casino operator Melco Crown Entertainment Ltd, which itself has an investment in Belle Grande Manila Bay, a US$1 billion new casino project at Entertainment City, hinted in May that he expected
Solaire Resort & Casino, Manila
the tax bureau and Pagcor to solve the problem internally and not pass on costs to the new private sector investors. Mr Ho said in May during MCE’s first quarter earnings call: “… Pagcor understands the fact, and the Philippine government understands the fact, that there are billions of
dollars of investment to be invested in Entertainment City and if there was a kind of a game change or a rule change at this stage, that would obviously impact that. So I think, all in all, with what’s happening in the market and how positive it is, we are hopeful that the government will do the right thing.”
New deal opens door to Laos flights L
aos’ national carrier is interested in launching charter services to Macau, after the two jurisdictions agreed to open up their aviation market. LaoAirlines“haveindicatedtoustheir intention to operate charter services” to the territory, a Civil Aviation Authority spokesperson told Business Daily. A Lao Airlines representative was present yesterday at the signing of an air services agreement between Macau and Laos. Both sides agreed to set no capacity or destination restrictions on any airline interested in launching future passenger or cargo routes linking the two jurisdictions, the authority said in a press statement. There is however no timeframe for when Lao Airlines could start its charter flights to Macau. “We haven’t yet received their formal application,” the authority spokesperson said. The air services deal was signed by Secretary for Transport and Public Works Lau Si Io and Laos’ minister of Public Works and Transport, Sommad Pholsena. Before the signing the two officials met “to exchange updates about the economic development of Macau and Laos, especially the air transport markets,” the statement says. The deal “has paved favourable conditions for the operation of air services between Macau and Laos in the future,” it adds. Other regional carriers have also plans to start flying to Macau. FlyFirefly Sdn Bhd, operating as Firefly and a subsidiary of Malaysia Airlines, plans to operate charter services between Johor Bharu and Macau “commencing this August”, the regulator told Business Daily a forthnight ago. “But they have not yet filed in their formal application.” Philippine Zest Airways has also applied to the aviation authority to fly here from Manila three times a week, starting October 15. “Our assessment is underway,” the authority said. V.Q.
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June April 26, 19, 2013 2013
Macau
Share cable television profits, pan-democrats recommend The association urges settlement of the cable television dispute before it becomes an election issue Tony Lai
tony.lai@macaubusinessdaily.com
M
acau Cable TV Ltd and the public antenna companies should share the profits they make from cable television transmissions and so end their 14-year-old dispute, the New Macau Association – otherwise known as the pan-democrats – has told the government. Andrew Cheong Shu Kin was part of a New Macau Association delegation that met officials of the Bureau of Telecommunications Regulation behind closed doors yesterday. Mr Cheong told reporters after the meeting that the government still wished Macau Cable TV and the public antenna companies to find a way to supply homes with cable television that respected the law.
Macau Cable TV won a court injunction to stop public antenna companies’ illegal activities (Photo: Manuel Cardoso)
He said his association had suggested in the meeting that Macau Cable TV and the public antenna companies could share the profits they make from cable television transmissions. The Court of Second
Instance ruled on June 6 that within 90 days the public antenna companies must stop illegally relaying cable television transmissions. Macau Cable TV’s concession gives it the exclusive right to supply
homes with cable television. No appeal against the court’s ruling is allowed. The government is obliged to enforce the ruling, so many households face the prospect of a television blackout this autumn. Mr Cheong said the government had not rejected his association’s profitsharing suggestion. Government officials would soon meet representatives of 12 antenna companies to discuss solutions to the problem, he said. The director of the Bureau of Telecommunications Regulation, Lawrence Tou Veng Keong, did not speak to reporters after yesterday’s meeting. The president of the New Macau Association, Jason Chao Teng Hei, urged the
government to solve the problem quickly to prevent it becoming an issue in the Legislative Assembly elections in September. Mr Chao told reporters that the issue could lead to “social instability”. He advised the government to “safeguard the public interest”. Mr Cheong said the government had intimated that it would make public its proposal for solving the problem by the middle of July. The New Macau Association’s alternative solution is for the government to end Macau Cable TV’s concession early and compensate the company. Mr Chao accused Macau Cable TV of failing in its duty to ensure all of Macau had access to its cable network. Mr Tou has said the government will open up the cable television market when Macau Cable TV’s 15-year concession ends next year. During yesterday’s meeting the New Macau Association also urged the government to formally ask the United States whether it engaged in cyber-espionage in Macau. This month Edward Snowden, a former contractor of the U.S. National Security Agency, alleged that the United States had engaged in cyber-espionage in Hong Kong and mainland China.
Lower leased-line fees little help to phone users Cut proposed by CTM too small to make dent in costs it passes to rival telecom operators, says industry Stephanie Lai
sw.lai@macaubusinessdaily.com
T
he proposed reduction in the cost of leasing Companhia de Telecomunicações de Macau SARL (CTM)’s landline network is not enough to create a truly competitive market, a person in the industry says. And that means that customers of rival telecommunications operators will benefit little from it, he added. On Monday CTM said it would reduce its charges for allowing companies to lease an international line – for overseas connections, namely Internet access. The change would take effect from next month. CTM’s chief executive officer Vandy Poon Fuk Hei said the firm would lower the charges for existing corporate customers by 20 percent, while a 15 percent reduction was pencilled in for new commercial subscribers. Mr Poon said the company was “very close”
to reaching an agreement with the government over the tariff change. Business Daily tried to confirm this statement with the Telecommunications Regulation Bureau but received no reply at the time of going press. Banks and financial institutions are the major users of international leased line services, CTM said. The company did not disclose any details on how the tariff cut would work. It applies to services provided to rival telecommunications operators and to ticketing and booking sites run by casinos and hotel operators. CTM told Business Daily it currently has no plans to lower the charges for local leased line services. However, on Monday Mr Poon did say CTM was “working on it”.
Too little, too late The proposed reduction is “good news” but it
falls far short of the telecommunication sector’s expectation, a person who works in the industry told Business Daily. CTM last reduced its leased-line fees by between 10 percent and 40 percent in August 2010. “But it is still not a very competitive price when compared to Hong Kong and mainland China,” the telecommunications insider said. One operator of a wireless network, SmarTone Mobile Communications (Macau) Ltd, said last month that leased-line fees were six to eight times higher here than in similar markets such as Hong Kong. “So, even if the Internet leased line eventually got a 15 to 20 percent reduction in cost, it is still not quite as competitive as in other places,” the person said. Michael Choi, the head of the city’s newest telecommunications
A tariff reduction proposed by CTM will mean little to most telephone users (Photo: Manuel Cardoso)
operator Companhia de Telecomunicações de MTEL Ltda, told media on June 3 that the expensive leased line payments were one of the major burdens of Internet service providers. “In 1996 over 20 companies applied to provide Internet services but most of them eventually vanished because of the [leased line] cost factor,” noted Mr Choi. “If MTEL does not lay its own network, obviously we will be just the 24th company to gradually vanish,” he said. The tariff cut will have
a very limited impact, preventing rival operators from reducing charges to consumers, an industry insider suggested. “Though the government has positioned Macau to have a liberalised telecom market four years ago, until now there is no solid competition,” the executive said. “The telecom operators are still paying too much for the leased lines and, because of that, very limited benefits can be passed on to consumers in terms of pricing,” he added.
4
June 26, 2013
Macau
Uncertainty makes renting parking spots the fashion
Brought to you by
HOSPITALITY
An estate agent says 70 percent of parking space deals so far this year have been leases
Reach for the stars Hotel occupancy rates in the first third of this year were lower than in the equivalent period of the preceding two years. From January to April, the simple average of monthly occupancy rates was two to three percentage points below those in 2011 and last year. However, industry averages hide significant differences among different sorts of hotels.
Guesthouses are a singular case. Their average occupancy rates are lower than those of any other sort of accommodation. In the period represented in the chart, the average occupancy rate of guesthouses was just below 60 percent. Two-star hotels had the next-lowest average occupancy rate, just over 76 percent. The pattern of changes in the average occupancy rate of guesthouses as time goes by is smoother than those of other sorts of accommodation. The variations are less extreme. This may be due to the guests that stay in guesthouses being different from typical visitors, and to under-reporting. But guesthouses count for little in the hotel market. The more stars a hotel has, the greater its occupancy rate tends to be. The only exception to this tendency is four-star hotels, which have an average occupancy rate more than three percentage points higher than that of fivestar hotels. The ups and downs of occupancy rates are similar for all categories of hotel, following a mostly predictable seasonal pattern. Changes from month to month can occasionally be big, especially in the peak months. The plots show month-to-month variations of over 10 percentage points and, at times, nearly 20 percentage points. J.I.D.
26.3 pp Difference between the highest and lowest average occupancy rates by hotel category since January 2010
Tony Lai
tony.lai@macaubusinessdaily.com
The monthly rent for a parking space in Areia Preta now averages 2,600 patacas
M
ore people are opting to rent car parking spaces rather than buy them because of the uncertain outlook for the property market, an estate agent that specialises in parking spaces says. “Seven out of every 10 deals this year are parking leases and the rest are sales,” the general manager of CarparKing Co Ltd, Chan Lik Ki, told Business Daily. Mr Chan said that last year sales had accounted for 50 percent to 60 percent of parking space deals. “Buy er s a r e wa r y a b o u t a n adjustment in the property market, as they see the sluggish prospects for the Hong Kong market,” he said. The number of homes sold in Hong Kong last month was 4,276, fewer than a year earlier for the third consecutive month. The Hong Kong government took further measures to rein in the property market there in February. CarparKing says the greater proportion of parking space leases here has pushed up rents – by 50 percent to 60 percent in some cases.
The average monthly rent for a parking space in Areia Preta has risen to 2,600 patacas (US$325), from 1,600 patacas a year ago. Mr Chan said another reason for the greater proportion of parking space leases was that the owners of parking spaces were “in no hurry” to put their property up for sale. “Some owners are locked in by the latest special stamp duty, while many continue to ask for a high price as they see inelastic demand for car parking,” he said. The government expanded the special stamp duty to cover parking spaces last October. The special stamp duty is a levy of 20 percent on the sale of real estate if it is sold within a year of being purchased, or of 10 percent if it is sold between one and two years after being purchased.
Interim trend Mr Chan said the price of a parking space in the north of the city had risen to 1.8 million patacas from 1.6 million patacas a year ago.
“There is a limited number of parking spaces in Macau, but the amount of vehicles keeps going up,” he said. Official data show 220,000 motor vehicles were on the road at the end of April, 5.3 percent more than a year earlier. The increase in the number of light vehicles was 7.7 percent. Mr Chan said the city had only about 11,500 public parking spaces and 5,000 private parking spaces in January. The Transport Bureau said in December that it would consult the public in the first quarter of this year about changes in road traffic control measures, including increases in public car parking charges. But since then nothing more about this has been heard from the bureau. Mr Chan expects more car park leases than sales to remain the trend for the next few months. The trend would change only once the United States began to adjust its monetary policy, so making the outlook for the property market here clearer, he said.
5
June 26, 2013
Macau
Filipinos flood in despite S. China Sea tensions But mainland Chinese continue to fuel the boom in imported labour Vítor Quintã
vitorquinta@macaubusinessdaily.com
The number of Filipino non-resident workers here has increased every month since February 2010
M
acau had more Filipino nonresident workers last month than ever before, despite a call here for a boycott of Philippine products and Filipino labour. At the end of last month over 17,300 Filipino bluecard holders were in Macau, 170 more than in April, data released yesterday by the Human Resources Office show. It is the highest number of Filipinos since the office began releasing data on imported labour in 2007. Last month an association and four companies here took out a front-page advertisement in the Chinese-language Macao Daily News asking people not to buy Philippine goods or hire Filipino workers. The Philippin e vice consul here, Fernando Beup, told Business Daily: “I don’t think there was really any significant impact.” The ad, financed by entities linked to Alan Ho, a nephew of gaming tycoon Stanley Ho Hung Sun, was placed in the newspaper amid international tension over the killing last month of a Taiwan fisherman by the Philippine Coast Guard. The government in Taipei froze new hiring of Filipinos by employers in Taiwan. The mainland Chinese government backed
Taipei’s stance. China and the Philippines dispute ownership of territory in the South China Sea, and the dispute resulted in a maritime confrontation last year. “Generally Macau is fairly insulated from the political issues emanating from either Taiwan or mainland China,” Mr Beup said. “Macau businesses and people are very much aware that this issue is far remote from their concerns,” he said. “Macau society is very familiar with Filipinos, their culture. They have been here for a very long time.”
Need for skills The number of Filipino workers here has increased every month since February 2010. About 6,500 have been hired since then. Mr Beup is confident that there will be no Filipino exodus this year or after. “There will be no decrease,” he said. “There is still expansion going on in the gaming, hospitality industry.” Several large casino resorts are due to open in Cotai from 2015 onwards. “Macau will need more skilled workers,” Mr Beup said. Not even the opening of big casinos in Entertainment City – a cluster of four Las
Generally, Macau is fairly insulated from the political issues emanating from either Taiwan or mainland China Fernando Beup, Philippine vice-consul
Vegas-style casino resorts being built by Manila Bay – would keep Filipinos from coming to work here, he said. The first of the resorts, the Solaire Resort and Casino, opened in March. Developer Bloomberry Resorts and Hotels Inc said last July that it had hired over 400 Filipinos that had been working in Macau and Singapore. “There were a few hundred who returned,” Mr Beup acknowledged. But he said many more Filipinos would still be looking overseas for work, as the unemployment rate in the Philippines was 7.5 percent. Entertainment City “will not open overnight”, Mr Beup said. “It will take a few years
to gain enough momentum to create a significant number of new jobs.” The number of nonresident workers here continues to break records. Another 3,000 signed up for work last month – more than in any month in the past year – bringing the total to 118,600.
Building frenzy Of the new arrivals, 2,315 were from the mainland, bringing the number of non-resident mainlanders working here to 72,023, the most ever. The number of nonresident Vietnamese workers rose by 289 to a record 11,024. The number of nonresident workers from Hong Kong reached 5,620, the most for one year. In August 2008, before the global financial crisis shook Macau, Hong Kong was Macau’s second-biggest source of imported labour, with 16,445 workers here. Hong Kong is now Macau’s fourth-biggest source of imported labour. Of the non-resident workers that arrived last month, 1,223 came to work in the construction industry, i n c r e a s i n g t h e number of non-resident construction workers here to a record 17,377.
The construction industry is gearing up to build the new casino resorts in Cotai. But hotels and restaurants are still the biggest employers of non-resident workers, taking on 414 more last month and so increasing their combined imported workforce to 35,526. The number of imported domestic servants increased by 206 to a record 18,878. Only 12 of the maids were mainlanders. But an influx of domestic servants from the mainland is due soon, ab o u t 3 0 0 b e i n g s e t t o arrive here under a trial scheme. Estate agents and business services enterprises, which include building security and cleaning companies, hired 228 more nonresident workers last month, increasing their combined imported workforce to over 10,000 for the first time.
17,318 Filipino nonresident workers in May
66
June 26, 2013 April 19, 2013
Macau Brought to you by
Financial Monitor Gentle braking The rise in the consumer price index began to show signs of slowing in May last year. Annual inflation peaked in August, when it began slowing gently, falling to 5.59 percent in May this year. The behaviour of the CPI is influenced by the behaviour of its main component, the prices of food and non-alcoholic beverages. Spending on food and non-alcoholic beverages makes up almost one-third of the spending on what is in the basket of consumer goods and services used to gauge price changes. It is the component of the CPI that shows the greatest increases in prices – over 9 percent for most of last year. There are obvious parallels between the plots for food and non-alcoholic beverage prices and the CPI.
Prices of other sorts of goods or services behave quite differently. The second-most important component of the CPI is housing and fuel, accounting for 22.8 percent of typical consumer expenditure. Only prices of housing and fuel kept rising throughout the period represented in the chart. It cannot be over-emphasised how unfortunate it is that housing and fuel costs are grouped together. Grouping them is likely to lead to underestimation of their effect on the spending behaviour of consumers. The rise in transport costs has been slowing, having accelerated earlier on. The fall in transport cost inflation is the steepest among all the goods and services shown in the chart. The fall in clothing and shoe price inflation follows a similar but less pronounced path. It was steady at the outset and began to fall slowly early last year.
Record attendance at G2E Asia says Reed Co-organiser says numbers up 16 percent on a year earlier as rival show set to debut in November Michael Grimes
michael.grimes@macaubusinessdaily.com
T
he Global Gaming Expo casino industry conference and trade show in Macau had a record number of visitors this year according to co-organiser Reed Exhibitions. The event held at CotaiExpo at The Venetian Macao from May 21 to 23, had 5,851 attendees said Reed, adding it was an increase of 16 percent on the previous year. Reed had previously reported in some news releases that the 2012 attendance was 6,161 people, but has now revised that figure down to 5,046. The reason for the 22 percent difference was mainly due to some 2012 attendees being double counted, Reed told Business Daily by e-mail. “This exhibition, together with the corresponding conference program and value-enhancing networking activities, has provided a powerful platform for hundreds of local suppliers..,” said Nat Wong, president of Reed Exhibitions Greater China separately in a prepared statement. Reed’s partner for the event – now in its seventh year – is the American Gaming Association. This year’s event saw no flare up of the trade dispute between Macau-based equipment supplier LT Game and Nevada-based SHFL entertainment Inc. that had soured the mood at the 2009 and 2012 shows
J.I.D. The content of this column is the work of Business Daily’s journalists.
8.38 %
Year-on-year rise in housing and fuel prices in May
G2E Asia 2013
when customs officials intervened on the show floor. On the first day of the 2013 edition however, the Macau Gaming Equipment Manufacturers Association – chaired by LT Game chairman Jay Chun – announced it would hold its own gaming industry trade show in November, also at CotaiExpo. Mr Chun told Business Daily the new event – called the Macau Gaming Show – would include VIP junket operators as exhibitors – a segment of the industry not specifically covered by G2E Asia’s exhibition floor. “…they [junkets] produce 70 percent of the [gaming] income from Macau. And they want to stand out and show the rest of the world that we are well regulated. It’s not an underground activity,” Mr Chun told us. Reed stated that at G2E Asia 2013, a total of 19 jurisdictions and 139 companies – 33 of them first timers to G2E Asia – were represented. The events firm added there were 7,087 square metres (76,245 sq. feet) of showroom floor space in 2013. That’s a 19 percent increase year-on-year, and another record for the event said Reed. Show innovations this year included a new application for iPhone and Android users giving access to event news and information
and themed pavilions for ‘Business Solutions and iGaming’ and ‘Security & Surveillance’. The three-day conference portion of the event drew 642 participants. The Global Gaming Women breakfast and roundtable discussion highlighted the growing leadership role of women in casino operations and equipment supply companies. The educational component of the event – the one-day Gaming Management Certificate Program – was run in partnership with the University of Macau and University of Nevada, Las Vegas. The United States’ President Barack Obama this year sent a message of support to G2E Asia. It followed the granting – by the U.S. Commercial Service of the U.S. Department of Commerce – of Trade Fair Certification to Reed Exhibitions, to organise the official U.S. Pavilion. G2E Asia 2013 also marked the retirement of Frank J. Fahrenkopf Jr as president and CEO of the AGA. Mr Fahrenkopf has led the association since 1995, but officially steps down this Sunday, though will remain in a consulting role. His successor is Geoff Freeman. He joins the AGA from the U.S. Travel Association, where he served as chief operating officer.
April 19, 2013
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June 26, 2013 April 19, 2013
Greater China Moody’s cuts outlook for Hong Kong banking system The outlook for Hong Kong’s banking system was lowered to negative from stable at Moody’s Investors Service Inc. on lenders’ increasing exposure to borrowers in China. Hong Kong banks are increasingly reliant on the mainland because real interest in the city rates remain low amid surging property prices, the credit-rating company said in a statement. These circumstances “may contribute to adverse future operating conditions for Hong Kong banks,” it said. Non-performing loans at Chinese banks rose for six straight quarters through March 31, the longest deterioration in at least nine years.
Cash squeeze risks miss of growth target More banks trimmed China’s growth projections for 2013
C
hina’s biggest squeeze on credit in at least a decade is increasing the chance that Li Keqiang will be the first premier to miss an annual growth target since the Asian financial crisis in 1998. Goldman Sachs Group Inc and China International Capital Corp yesterday joined banks from Barclays Plc to HSBC Holdings Plc in paring their growth projections this year to 7.4 percent, below the government’s 7.5 percent goal. The cuts followed a tightening in central bank liquidity
that left the overnight repurchase rate more than double the year’s average. “The current leadership is trying to build its reputation in a different way than the previous administration, which felt that its target was holy and had to be met regardless of the circumstances,” said Louis Kuijs, chief China economist at Royal Bank of Scotland Group Plc in Hong Kong, who previously worked for the World Bank. The danger is that putting the growth goal aside undermines public confidence in China’s economic policy
making that’s already been shaken by limited communication on the government’s objectives behind the cash squeeze. The central bank on Monday contributed to the biggest drop in Chinese stocks in almost four years by releasing a week-old statement saying liquidity was “reasonable”. The government set the 7.5 percent target at a March conference where Mr Li became premier. Seventeen of 56 respondents to a Bloomberg News survey last week gave estimates of
HKEx to introduce new products: CEO Hong Kong Exchanges & Clearing Ltd will balance competition and cooperation with mainland exchanges and introduce new cash-settled commodity products, said Charles Li, chief executive of the company that owns the London Metal Exchange. The bourse would probably introduce monthly cash-settled metals products denominated in Chinese yuan first then move into other commodities and physical settlement, Mr Li said. “We are not seeking to change it but we look to profit from it,” Mr Li said of the business model. “We will be seeking return from our investment in a fair and reasonable way.”
Sinopec agrees US$1.5b Angola deal China Petrochemical Corp, also known as Sinopec, has agreed a deal to buy U.S. firm Marathon Oil Corporations’s stake in an Angolan oil and gas field. Under the terms of the deal, Sinopec will pay US$1.52 billion for Marathon’s 10 percent stake in the field. Sinopec had purchased a 5 percent stake in the field from France’s Total SA in 2011. Chinese firms have been buying energy sources across the globe in an attempt to meet rising domestic demand and feed its fast-growing economy.
Li Keqiang – missing growth target?
Chinese buyers turn to overseas property markets Mainland buyers of Hong Kong property at four-year low Yimou Lee and Twinnie Siu
O Guangzhou Shipyard to sell new shares Guangzhou Shipyard International Co., a unit of the nation’s biggest shipbuilder, fell in Hong Kong trading after unveiling plans to sell new shares and buy a shipyard. Guangzhou Shipyard plunged as much as 20 percent before closing at HK$5.87 in Hong Kong, down by 18 percent. The stock traded in Shanghai fell by the daily limit of 10 percent. The shipbuilder plans to sell as much as 2.5 billion yuan (US$407 million) of new shares to investors including its parent, China State Shipbuilding Corp, and buy a shipyard part-owned by the parent. The proposals come amid falling orders and rates in the shipping industry.
n the seventh floor of a luxury hotel in the heart of Hong Kong, a Chinese couple listens carefully as an agent takes them on a virtual tour of an upmarket property development for sale, not in the city but in London. Cash-rich mainland Chinese, who some in Hong Kong blame for pushing property prices to record highs, have fled the city’s real estate market, scared off by cooling measures that have sent them scouring overseas for better options. For many, the search starts in the ballrooms of Hong Kong’s luxury hotels which host overseas property fairs nearly every weekend, offering prospective buyers a glimpse of homes abroad while providing refreshments such as sparkling water and the bitesized Cantonese snack dim sum. “We can only see pictures of the project now so that’s why we have to go to London to take a look at the environment of the building,” said Christina Chen, who flew with her husband from Shanghai to Hong Kong to check out plans
of a development at London’s Olympic Park before flying there herself to see it. “The return on investment is much higher in London than in China and Hong Kong,” she said in a room at the Landmark Mandarin Oriental, a popular choice for property exhibitors. Mainland Chinese accounted for 18 percent of new luxury home sales in Hong Kong in the first quarter – the lowest level in four years – down from 43 percent in the third quarter of last year, before cooling measures were announced, according to real estate company Centaline Property Agency Ltd.
“Mainland Chinese have lost the ticket to buy properties in Hong Kong, now that tightening measures are in force,” said David Hui, overseas sales director at Centaline. “If they want to invest in property, they now need to go overseas.”
Offshore projects Hong Kong, where property prices are among the most expensive in the world, has imposed a series of tightening steps since October, including a 15 percent tax on foreigners that many industry watchers believe was targeted at mainland buyers.
18 %
Share of new luxury homes in HK sold to mainland buyers in the first quarter
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June April 26, 19, 2013 2013
Greater China 7.5 percent or less for gains in gross domestic product this year.
Estimates cut Mr Kuijs, who said the target may be at risk this year, on June 10 cut his 2013 call to 7.5 percent from 7.8 percent and projected 8.1 percent growth next year, down from 8.4 percent. “If they fail to achieve 7.5 percent, they will lose credibility with the markets, provincial leadership and financial institutions,” said Liu LiGang, Australia & New Zealand Banking Group Ltd’s head of Greater China economics in Hong Kong, who also formerly worked at the World Bank. “That means that in the future, whenever they say something, the market may interpret it differently, and the credibility issue is something very critical for them to consider,” said Mr Liu, who this month cut his 2013 growth forecast to 7.6 percent. The overnight repurchase rate was 6.47 percent yesterday, more than double this year’s average of 3.09 percent, according to a fixing compiled by the National Interbank Funding Centre. The seven-day repurchase rate declined yesterday for a third day. On Monday, a private survey showed Chinese bankers reporting increased lending this quarter while fewer companies are taking out loans. The incongruity indicates that “credit appears to be concentrated on a few borrowers,” according to the report from New York-based China Beige Book International, modelled on the U.S. Federal Reserve’s Beige Book. China last failed to exceed the government’s annual growth target as Asia grappled with its financial crisis in 1998, when Zhu Rongji became premier. That year, the economy expanded 7.8 percent, compared with an 8 percent goal.
The flight abroad has taken them increasingly to Britain and the United States, where Chinese rank alongside Canadians as the fastestgrowing group of buyers, data from the U.S. National Association of Realtors shows. In London, overseas buyers accounted for 2.2 billion pounds (US$3.4 billion) worth of new-build property in 2012, up from 1.8 billion pounds in 2011, according to estate agent Knight Frank LLP. Buyers from greater China are among the top three. The search for homes has accelerated, with Hong Kong’s overseas property transactions jumping nearly 50 percent in May from a year earlier – of which mainland Chinese made up a fifth of sales, according to two property agents in the city.
Growth averaged 9.9 percent from 1999 to 2012, when Premier Wen Jiabao was at risk of missing a 7.5 percent target before interest-rate cuts and accelerated investment approvals helped stoke a rebound late in the year. Policy makers’ willingness to allow a prolonged cash crunch this month signalled a “fundamental shift in attitude from Beijing,” analysts led by Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong, wrote in a note. “We had suspected that Premier Li would want to drive significant reforms,” the analysts said. “We underestimated, however, his apparent willingness to make policy choices that would risk putting further downside pressure on the economy.” The People’s Bank of China is treading on dangerous ground as it clamps down on the shadow banking system. As Chinese stock markets tank, and the contagion spreads, policymakers are looking to minimise regulatory arbitrage. Th e m ed i a n es ti m a te o f 5 6 economists surveyed by Bloomberg News from June 14 to 19 is for growth this year of 7.7 percent. That compares to a median forecast of 8.1 percent three months earlier. Bloomberg News
KEY POINTS Credit crunch puts 7.5 pct target at risk Tightening concerns send jitters through markets Growth averaged 9.9 pct from 1999 to 2012
More than 40 offshore projects are on offer in Hong Kong this month, most with price tags below HK$7 million (US$900,000), with lawyers and bank representatives on hand for quick sales. Cherrin Loo, director of international residential sales at property consultant Savills Plc, said she expected the number of overseas projects on show in Hong Kong this year to jump 30 percent to 50 percent from a year earlier. With a significant drop in mainland Chinese buyers, Hong Kong developers have shifted their focus back to local end-users, with some cutting prices to lure buyers. In May, the number of Hong Kong property transactions stood at its second lowest in 16 months, up 20.5 percent, according to Centaline. Reuters
Iron-ore cargoes double ship rates Vessel owners more bullish as China seen buying
T
he biggest jump in shipping rates since September is spurring speculation that demand from Chinese steelmakers is rebounding after stockpiles of the second-biggest seaborne cargo dropped to a five-year low. Rates for Capesizes, the largest iron-ore carriers, doubled in 10 days, a sign to ICAP Plc and Pareto Securities AS that more cargoes are being booked. The shipments would arrive in two to three months, boosting port stockpiles that fell to about 21 days of demand in April, the lowest level since 2007. Shares of Nippon Yusen K.K. and Kawasaki Kisen Kaisha Ltd, the biggest Capesize owners, will rally as much as 18 percent in 12 months, the averages of 29 analyst estimates compiled by Bloomberg show. While Chinese steel production expanded almost three times faster than global output last month, the advance in ore cargoes may be more about replenishing inventories than a sign the second-biggest economy is accelerating. A gauge of interbank funding in China rose the most on record last week amid a cash crunch and manufacturing is contracting. The shipments are more bullish
for vessel owners, with rates now rising for a fourth month as fleet capacity expands at its slowest pace since 2002. “Stockpile levels in China are very, very low and rising Capesize rates are the first sign that demand for iron ore is returning,” said Eirik Haavaldsen, a shipping analyst at Pareto in Oslo. “You can see how fast the market can turn around as more shipments come out of Australia and Brazil and miners take more tonnage to China.” Earnings for the 1,000-foot-long vessels will average US$10,750 a day in the third quarter, the most since the last three months of 2012, according to the average of nine analyst estimates compiled by Bloomberg. Even though that’s almost double the average this quarter, rates will still be below the US$16,000 owners need to break even, Pareto estimates. Bloomberg News
Shipment rates rising for a fourth month
10 10
June 26, 2013 April 19, 2013
Asia Vietnam FDI up 5.6 pct y-o-y The inflow of foreign direct investment into Vietnam rose an estimated 5.6 percent in the first half of this year from a year ago to US$5.7 billion, a government agency said yesterday. Foreign companies’ investment pledges into the country also increased 15.9 percent to US$10.5 billion, the Planning and Investment Ministry’s foreign investment agency said in a report. FDI inflows into the Southeast Asian nation peaked at US$11.5 billion in 2008 and since then have been around US$10 billion to US$11 billion a year.
Thai govt risks farmer ire to curb fiscal burden Mounting losses arising from rice-purchase programme a concern for foreign investors
Seoul seeks to boost investment South Korea plans to introduce new measures aimed at boosting domestic corporate investment, its finance minister said yesterday, as the recovery in Asia’s fourth-largest economy has been delayed on global uncertainties. Minister Hyun Oh-seok told reporters after a meeting with leaders of top business associations that the government was studying into possible measures, without giving more details such as when the measures will be announced.
US$4.4 bln
Losses from the ricepurchase programme last year
T Cyber attack hits S.Korea websites South Korea has issued a cyber alert after an apparent hacking attack on government websites. The website of the presidential office was one of several official and media sites hit by an apparently co-ordinated attack yesterday morning. The identity of the hackers was not known, a government statement said. “The government can confirm a cyber attack by unidentified hackers that shut down several sites including the Blue House,” the Science Ministry said in a statement, referring to the presidential office.
Sumitomo eyes stake in insurance unit Sumitomo Life Insurance Co is among companies preparing to bid for a stake in the life insurance unit of PT Bank Negara Indonesia, according to two people with knowledge of the matter. Sumitomo Life, Japan’s third-largest life insurer, is weighing an offer for a 40 percent stake that may be valued at as much as US$800 million, the people said. Bank Negara, controlled by Indonesia’s government, plans to start the sale of the insurance unit stake in the next two weeks.
Philippine imports rise in April Philippine imports in April rebounded after three months of decline, but a doubledigit contraction in electronics purchases underscores concerns about the country’s key technology exports. Philippine imports in April rose 7.4 percent from a year earlier, the first rise since December, due to an aircraft order by a local carrier, data from the statistics agency showed yesterday. The data shows continued weakness in the electronics sector, as imports of components and devices shrank 19 percent from last year.
hai Prime Minister Yingluck Shinawatra risks a backlash from farmers who helped put her in power after cutting guaranteed rice prices following criticism that the programme put the country’s finances at risk. The Cabinet last week approved a 20 percent reduction in rice-purchase prices to help stem losses from the programme that the government estimates at about 137 billion baht
(US$4.4 billion) last year. Moody’s Investors Service said on June 3 the subsidies hamper Thailand’s goal of achieving a balanced budget by 2017 and are negative for the nation’s sovereign ratings. “If the government doesn’t listen to farmers’ voices, the Pheu Thai party won’t have farmers as a shield to protect them,” said Charin Singdee, head of the farmer council from Singburi province, referring to Ms
Shinawatra’s ruling party that won a parliamentary majority in 2011 elections. “If the price is cut, it is like farmers are being bullied.” Ms Shinawatra raised minimum wages, handed incentives to firsttime car buyers and paid rice farmers as much as 50 percent more than domestic market rates since taking power two years ago with support from poorer areas in northern Thailand. The Moody’s report and
Singapore office rents down by 16.3 pct Office landlords offset fewer bankers as vacancies tumble
S
ingapore’s office landlords, long dependent on banks, are broadening their tenant base to soak up empty space as the commercial property market inches toward recovery after a three-year slump in rents. Rents in the best buildings may start to rise this year, according to brokers CBRE Group Inc. and Cushman & Wakefield Inc. Vacancies in the city-state fell to 5.1 percent in the first quarter, the lowest since September 2008, from the previous three months, CBRE said. Annual new supply will be 38 percent lower than in the past 20 years, CapitaCommercial Trust forecasts. Property owners such as CapitaCommercial and Suntec Real Estate Investment Trust are using the cheapest rents in three years to lure commodity traders, law firms and software companies. The new tenants are moving in as financialservices firms scale back expansion plans in the wake of the European debt crisis. “Singapore’s office market is getting a lot more diversified,” said Elysia Tse, senior vice president
of strategy and research at Aviva Investors Asia Pte, which has US$2.5 billion in property assets in the AsiaPacific region. “We are at the turning point where we see supply stopping, demand slightly turning positive, vacancy declining and rents have stopped falling.” Office inventory surged after the government in 2005 extended the traditional central business district with the development of Marina Bay, which sits on about 360 hectares of reclaimed land of which 80 hectares is allocated for the business district. The area is home to 10 office towers and gaming billionaire Sheldon Adelson’s landmark Marina Bay Sands hotel and casino.
of lower-priced secondary space. Prime-office lease rates declined to S$9.55 (US$7.46) per square foot per month in the first quarter, the lowest since the same period in 2010, according to CBRE, which ranks Singapore’s overall office rents the 19th highest globally. Rents
Lower costs Then came the collapse of Lehman Brothers Holdings Inc. in September 2008, a global recession and later the euro zone crisis. Vacancy rates soared to a post-crisis high of 14.5 percent in the third quarter of 2010. Singapore experienced the largest annual decrease worldwide, at 16.3 percent, due, in part, to increases in both new supply and the availability
The average monthly rent for offices built in the past three years at Marina Bay fell 1.1 percent
11 11
June April 26, 19, 2013 2013
Asia opposition attacks prompted her to establish a committee to verify losses and lower prices. “The fiscal burden arising from this programme is one of the key concerns of foreign investors,” said Santitarn Sathirathai, a Singaporebased economist at Credit Suisse AG. “But beyond the fiscal cost, the programme also distorts incentives for people. Thailand already has labour shortages in many productive sectors and this programme encourages more rice growing by many people who perhaps should not be doing so.”
Biggest loser Agricultural exports slipped 4.4 percent in April, led by an 8.4 percent decline in rice shipments. That has weighed on the baht, which is the biggest loser after the Indian rupee and Philippine peso this quarter in Asia, Bloomberg data show. The Bank of Thailand cut its policy interest rate on May 29 for the first time this year to boost growth after the Southeast Asian nation’s expansion slowed more than estimated to 5.3 percent last quarter. The government last month lowered its 2013 GDP forecast to as little as 4.2 percent and cut its target for export growth to 7.6 percent from 11 percent. Thailand has spent 588.7 billion baht since October 2011 to buy 40.47 million tons of unmilled rice from farmers. The programme has increased domestic demand and purchasing power by 2 percentage points and helped improve farmer income by about 115 billion baht a year, according to the government. The government is carrying debt of almost 160 billion baht for 20122013 from implementing the rice price-support programme, according to official estimates. By setting purchase limits, it will lose about 80 billion baht a year, calculated from
for prime space – the most stable, high-income producing properties – peaked at S$18.80 in August 2008, CBRE data show. “We are becoming more optimistic about the prospects and outlook for the office sector,” said Moray Armstrong, executive director of office services at CBRE in Singapore. Companies are being attracted by some of the lowest occupancy costs in Asia. Rents, local taxes and service charges average US$99.65 per square foot on an annual basis, according to a CBRE survey published June 21. That compares with US$235.23 in Hong Kong, the world’s most expensive office market, and US$161.16 in Tokyo. Bloomberg News
the difference between the support price and market price, including interest and storage costs. “One concern related to the rice-pledging scheme is that it has impaired fiscal transparency and hampers progress towards deficit reduction,” said Steffen Dyck, assistant vice president at Moody’s in Singapore. While potential losses are sizable, the rating company is maintaining its stable outlook on Thailand, as other macroeconomic and external factors are supportive, he said.
Rural support Trimming the purchase programme helps, “but a gradual phase-out all together and a move to other transfer programmes will be better,” Mr Santitarn said. “It will be even better if they can gradually switch to targeted cash subsidies for farmers that do not distort the incentive to produce rice and the rice market mechanisms.” Parties linked to former Prime Minister Thaksin Shinawatra have won the past five elections on support from rice-growing areas that are poorer and more populous than the rest of Thailand. “This is a policy that the Pheu Thai party announced during the election campaign and it should keep its promise,” Prasit Boonchei, president of the Thai Rice Farmers Association, said. “When benefits that farmers are supposed to get are slashed, farmers are smart enough to know who they will vote for in the next election.” Not everyone opposes the price cut. More than 400 farmers submitted a letter urging the government to continue the programme even with the revised price of 12,000 baht per ton, Sansanee Nakpong, minister to the prime minister’s office, said yesterday. Bloomberg News
Philippine stocks enter bear market As overseas investors sold the nation’s equities
P
hilippine stocks entered a bear market as the nation’s benchmark equity index slumped for a fifth day amid the biggest monthly foreign sell-off on record. The Philippine Stock Exchange Index tumbled 3.1 percent to 5,789.06 in Manila, the lowest close since December 19. The gauge has lost 22 percent from a record 7,392.20 set on May 15, wiping about US$62 billion in value from the nation’s stocks as of yesterday’s close. Valuations dropped to a sevenmonth low and volatility climbed to the highest in more than four years. Overseas funds sold a net US$344 million of Philippine stocks this month through Monday, heading for the biggest monthly outflow since Bloomberg began compiling the data in 1999. Philippine stocks have slumped from a record, wiping as overseas investors sold the nation’s equities after U.S. Federal Reserve chairman Ben S. Bernanke said on May 22 the central bank could consider paring stimulus if the country’s employment market showed sustainable improvement. Mr Bernanke said on June 19 the Fed may start reducing bond purchases this year and end the program in 2014 should risks to the U.S. economy abate. “The slump was caused by expectations the U.S. will taper monetary stimulus and not by a
deterioration in the Philippine economic and corporate outlook,” Jerome Gonzalez, who helps manage US$230 million at Philequity Management Inc., said. “This has opened a good window to come in and start buying in tranches. Our fundamentals remain intact.” The benchmark index is trading at 16.1 times projected 12-month earnings, the cheapest since November 23, from a record 20.8 times on May 15. That compares with MSCI Emerging Markets Index’s 9.2 times. The Philippine gauge’s 30-day volatility climbed to 38.5, the highest since January 2009. Ayala Corp, owner of the nation’s largest builder and biggest bank by market value, tumbled 9.2 percent, the steepest loss since October 27, 2008. It was the biggest contributor to the index’s decline yesterday. Belle Corp, which is building a Manila casino with Macau casino operator Melco Crown Entertainment Ltd, plunged 12 percent, the sharpest loss since February 28, 2007. The peso rose 0.9 percent to the dollar, paring this month’s loss to 2.8 percent, the worst performance in Asia after the Indian rupee and Malaysian ringgit. “It’s not a question of valuations anymore,” Rico Gomez, from Rizal Commercial Banking Corp, said. “It’s a matter of the level of risk that investors are willing to take.” Bloomberg News
Indonesia leader apologises for haze Malaysian PM sending protest letter, pledges support
M
alaysia Prime Minister Najib Razak will send a protest letter to his Indonesian counterpart as finger pointing continues over responsibility for the heavy haze shrouding the region. Malaysia wants Indonesia’s cooperation to enforce more effective measures and punish those responsible for setting illegal fires, Mr Najib said yesterday in Kuala Lumpur. Indonesia President Susilo Bambang Yudhoyono has apologised to his neighbours and pledged to work on solving the issue. Smog has drifted north along Malaysia’s western coast after pollution reached a record in Singapore last week. Some areas of Malaysia were classed as very unhealthy or hazardous yesterday as Kuala Lumpur’s 88-floor twin towers remained obscured. “The question of who owns the plantations is not the issue here but when something of this magnitude happens, there should be no concern of whether the plantations are owned by Indonesia, Malaysia or Singapore but rather action taken
against those responsible,” Mr Najib said, according to state news service Bernama. The premier’s comments were confirmed by his office. Singapore and Malaysia have been plagued for decades by periodic haze from forest fires on Indonesia’s Sumatra island, with regular spats over responsibility even as all three have strong economic links. The number of hotspots in Riau province increased to 154 on June 23 from 92 the day before, according to the country’s disaster management agency.
Indonesia briefing Malaysia plans to offer Indonesia aircraft that can be used as water bombers to assist in putting out fires, Mr Najib said. It is also offering to host a meeting of the sub-regional ministerial steering committee on trans-boundary haze in Kuala Lumpur next week, G. Palanivel, Malaysia’s Minister for Natural Resources and Environment, said on Monday. Indonesia plans to add ground
Kuala Lumpur’s twin towers remained obscured
forces to fight fires and increase its ability to extinguish them from the air, Mr Yudhoyono said. Fire-fighting continued on Sumatra yesterday with a third water-bombing helicopter deployed, operating alongside two planes used to create artificial rain. The airport in Sumatra’s Pekanbaru may have hourly shutdowns depending on weather conditions due to the haze, Bambang Ervan, spokesman at Indonesia’s Ministry of Transport, said yesterday. Bloomberg News/Reuters
12
June 26, 2013
Markets Hang Seng Index NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
31.85
0.6319115
41459689
CHINA UNICOM HON
9.79
-0.5081301
26794201
POWER ASSETS HOL
66.25
-0.4507889
2582113
ALUMINUM CORP-H
2.31
0.4347826
39741806
CITIC PACIFIC
8.25
3.773585
12820390
SANDS CHINA LTD
34.75
-1.697313
26461426
BANK OF CHINA-H
3.03
1.337793
603097652
SINO LAND CO
10.26
1.584158
9684118
BANK OF COMMUN-H
5.07
0.1976285
58429596
96.5
1.04712
8164408
BANK EAST ASIA
26.9
-1.284404
3767219
BELLE INTERNATIO
9.95
-1.485149
37290666
AIA GROUP LTD
BOC HONG KONG HO
23.1
-1.702128
28264315
CATHAY PAC AIR
13.12
0.9230769
5725903
CHEUNG KONG
NAME
CLP HLDGS LTD
VOLUME
61.4
0.1631321
3850716
12.28
-0.4862237
60238571
9.31
-3.121748
8688227
SWIRE PACIFIC-A
91.05
0.7747648
1972794
ESPRIT HLDGS
11.28
1.98915
8840191
TENCENT HOLDINGS
283.4
1.7229
6855212
HANG LUNG PROPER
26.15
2.54902
12645059
TINGYI HLDG CO
18.72
-1.473684
8693804
HANG SENG BK
111.4
-0.2685765
2534492
WANT WANT CHINA
10.04
-1.181102
25246846
WHARF HLDG
63.8
4.590164
11076985
CNOOC LTD COSCO PAC LTD
101.1
0.4970179
11014079
HENDERSON LAND D
45.25
1.914414
5485620
CHINA COAL ENE-H
4.18
-4.56621
65433752
HENGAN INTL
78.45
5.090422
4297297
CHINA CONST BA-H
5.08
0
555562073
HONG KG CHINA GS
18.62
1.085776
11758693
CHINA LIFE INS-H
17.72
-1.116071
88121158
HONG KONG EXCHNG
CHINA MERCHANT
21.4
-2.059497
5486517
CHINA MOBILE
75.75
-0.2633311
CHINA OVERSEAS
18.54
-0.7494647
114.1
-1.553063
7692533
HSBC HLDGS PLC
79.7
0.5678233
20363667
23140435
HUTCHISON WHAMPO
79.1
2.66061
10372526
34953473
IND & COMM BK-H
4.4
-1.785714
973069505
10.42
0
18841337 4709618
CHINA PETROLEU-H
5.16
1.574803
170289691
CHINA RES ENTERP
22.6
0.2217295
3659627
MTR CORP
27.4
-0.1821494
19.08
0.952381
18453950
NEW WORLD DEV
10.2
-0.5847953
16997535
CHINA RES POWER
16.8
-2.211874
10547045
PETROCHINA CO-H
7.86
-0.6321113
112874515
CHINA SHENHUA-H
21.55
-2.045455
34561737
PING AN INSURA-H
50.25
-2.427184
27296443
CHINA RES LAND
NAME
LI & FUNG LTD
SUN HUNG KAI PRO
MOVERS
23
25
2 20370
INDEX 19855.72 HIGH
20367.2
LOW
19510.76
52W (H) 23944.74 (L) 18710.58984
19500
21-June
25-June
Hang Seng China Enterprise Index NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.01
0.6688963
239284232
AIR CHINA LTD-H
5.08
-4.150943
ALUMINUM CORP-H
NAME
PRICE
DAY %
VOLUME
CHINA PACIFIC-H
23.3
-3.519669
26279035
27660634
CHINA PETROLEU-H
5.16
1.574803
170289691
NAME
PRICE
DAY %
YANZHOU COAL-H
5.93
-0.8361204
48662078
ZIJIN MINING-H
1.41
-5.369128
175621878
5.22
-1.879699
22611477
11.76
4.440497
7975769
2.31
0.4347826
39741806
CHINA RAIL CN-H
6.31
-0.1582278
11479724
ZOOMLION HEAVY-H
ANHUI CONCH-H
20.05
-1.95599
31124061
CHINA RAIL GR-H
3.34
-1.764706
15951839
ZTE CORP-H
BANK OF CHINA-H
3.03
1.337793
603097652
CHINA SHENHUA-H
21.55
-2.045455
34561737
BANK OF COMMUN-H
5.07
0.1976285
58429596
CHINA TELECOM-H
3.59
0.8426966
75930727
BYD CO LTD-H
24.9
-4.230769
14733965
DONGFENG MOTOR-H
10.46
1.750973
20842249
CHINA CITIC BK-H
3.43
-2
144066436
GUANGZHOU AUTO-H
6.97
-2.7894
18638654
CHINA COAL ENE-H
4.18
-4.56621
65433752
HUANENG POWER-H
6.78
-4.101839
45204107
CHINA COM CONS-H
5.92
-4.20712
44188410
IND & COMM BK-H
4.4
-1.785714
973069505
CHINA CONST BA-H
5.08
0
555562073
JIANGXI COPPER-H
13.02
-4.545455
30249488
CHINA COSCO HO-H
3.16
-3.658537
24004534
PETROCHINA CO-H
7.86
-0.6321113
112874515
17.72
-1.116071
88121158
PICC PROPERTY &
8.47
1.194743
30229698
7.2
-2.834008
21561665
PING AN INSURA-H
50.25
-2.427184
27296443
CHINA MERCH BK-H
12.42
-1.11465
78963811
SHANDONG WEIG-H
8.97
-5.578947
18588563
CHINA MINSHENG-H
7.43
2.908587
174951646
SINOPHARM-H
18.36
-1.290323
7242676
52W (H) 12354.22
CHINA NATL BDG-H
6.8
1.040119
74923928
TSINGTAO BREW-H
50.65
-1.459144
2162151
(L) 8640.85
13.98
-0.7102273
11559350
WEICHAI POWER-H
CHINA LIFE INS-H CHINA LONGYUAN-H
CHINA OILFIELD-H
23.8
-0.6263048
MOVERS
10
29
VOLUME
1 9310
INDEX 8871.28 HIGH
9300.26
LOW
8692.95 8690
21-June
5708914
25-June
Shanghai Shenzhen CSI 300 NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.51
1.209677
180370689
CITIC SECURITI-A
10
-0.8919722
155433204
AIR CHINA LTD-A
4.2
-0.7092199
23045931
CSR CORP LTD -A
3.75
0
3.22
-2.12766
24288007
DAQIN RAILWAY -A
5.9
ANHUI CONCH-A
12.85
0.390625
36482511
DATANG INTL PO-A
BANK OF BEIJIN-A
7.53
1.894452
51730366
EVERBRIG SEC -A
BANK OF CHINA-A
2.57
1.181102
62631648
BANK OF COMMUN-A
4.06
0.7444169
162959088
ALUMINUM CORP-A
NAME
NAME
PRICE
DAY %
VOLUME
QINGDAO HAIER-A
10.97
0.3659652
22930360
38501255
QINGHAI SALT-A
16.81
-2.153667
9749783
1.200686
66875474
SAIC MOTOR-A
13.36
3.405573
54737071
4.95
2.061856
17108829
SANAN OPTOELEC-A
18.69
0.483871
20331250
9.74
-4.228122
46736701
SANY HEAVY INDUS
7.54
0.802139
41476706
GD MIDEA HOLDI-A
12.8
0
13015220
SHANG PHARM -A
10.34
1.671583
18490433
GD POWER DEVEL-A
2.28
2.242152
116404275
SHANG PUDONG-A
7.8
3.723404
246601203
BAOSHAN IRON & S
4.03
-0.4938272
38652779
GEMDALE CORP-A
5.97
-2.131148
92469831
SHANGHAI ELECT-A
3.32
-1.775148
4560871
BEIJING TONGRE-A
21.55
-0.7826888
14915389
GF SECURITIES-A
11.08
-1.247772
41681034
SHANXI LU'AN -A
12.35
-1.906275
19425234
BYD CO LTD -A
29.96
2.113156
14907461
GREE ELECTRIC
23.88
-0.8305648
33493499
SHANXI XISHAN-A
8.13
-3.32937
21181022
12.2
-6.081601
68044438
SHENZEN OVERSE-A
4.91
-2.964427
60572508
SICHUAN KELUN-A
55.33
1.746966
2124797
5
0.8064516
79415360 10574891
CHINA AVIC ELE-A
21.37
-2.77525
16978212
GUANGHUI ENERG-A
CHINA CITIC BK-A
3.56
-0.5586592
49456611
HAINAN AIRLINE-A
2.06
7.853403
79902773
CHINA CNR CORP-A
3.97
0.2525253
46575718
HAITONG SECURI-A
9.38
1.405405
186908698
CHINA COAL ENE-A
5.06
-1.55642
26783400
HANGZHOU HIKVI-A
34.59
0.05785363
8031579
TASLY PHARMAC-A
37.95
-0.05267316
37.85
-1.226514
6987152
TSINGTAO BREW-A
36.51
0.7450331
3290611
83087203
WANHUA CHEMIC-A
16.64
4.391468
19673902
SUNING COMMERC-A
CHINA CONST BA-A
3.99
0.7575758
56088566
HENAN SHUAN-A
CHINA COSCO HO-A
3.04
-2.250804
17288102
HONG YUAN SEC-A
8.7
-3.333333
CHINA EAST AIR-A
2.55
0.3937008
23250487
HUATAI SECURIT-A
7.84
-2.366127
61289843
WEICHAI POWER-A
17.4
-2.575588
13742057
CHINA EVERBRIG-A
2.76
0.729927
199944425
HUAXIA BANK CO
8.69
0
70095909
WULIANGYE YIBIN
19.8
-1.980198
30114300
CHINA LIFE INS-A
13.74
-1.575931
22301770
IND & COMM BK-A
3.96
1.538462
147931273
YANZHOU COAL-A
9.69
-0.513347
12967445
CHINA MERCH BK-A
10.92
-0.09149131
128040668
INDUSTRIAL BAN-A
13.93
0.287977
200476604
YUNNAN BAIYAO-A
82.2
-1.792115
4855361
CHINA MERCHANT-A
10.13
-1.459144
37353976
INNER MONG BAO-A
21.26
-3.055176
46295438
ZHONGJIN GOLD
9.51
-3.156823
22967944
CHINA MERCHANT-A
21.72
-1.496599
22312408
INNER MONG YIL-A
32.28
5.732067
26355640
ZIJIN MINING-A
2.46
-1.992032
80169652
CHINA MINSHENG-A
8.44
-0.8225617
389102190
INNER MONGOLIA-A
3.96
-2.463054
46596267
ZOOMLION HEAVY-A
5.34
-1.657459
89746096
CHINA NATIONAL-A
9.61
5.257393
60648206
JIANGSU HENGRU-A
25.76
-1.453711
13439056
ZTE CORP-A
12.48
8.333333
86260170
CHINA OILFIELD-A
14.48
-0.137931
7457158
JIANGSU YANGHE-A
57.14
0.3688741
5438410
CHINA PACIFIC-A
16.23
0.744879
15327757
8.09
-1.341463
10556312
15.91
-2.452483
45010621
JIANGXI COPPER-A
CHINA PETROLEU-A
4.19
-0.4750594
62868124
JINDUICHENG -A
CHINA RAILWAY-A
4.12
-1.904762
32800159
KANGMEI PHARMA-A
17.95
-0.8287293
44064574
KWEICHOW MOUTA-A
189.84
2.273462
5135249
23.7
-1.414309
11645873
CHINA RAILWAY-A
2.41
-0.4132231
37567691
CHINA RESOURCE-A
29.6
0
6437890
LUZHOU LAOJIAO-A
CHINA SHENHUA-A
17.52
0.1142857
20299632
METALLURGICAL-A
1.62
-4.142012
101565081
CHINA SHIPBUIL-A
4.52
0
59982923
NARI TECHNOLOG-A
14.12
3.595011
30431850
CHINA SOUTHERN-A
2.82
-3.092784
67667247
NINGBO PORT CO-A
2.04
-0.9708738
22741542
6.71
0.2989537
48590445
7.39
-1.85923
43906534
CHINA STATE -A
3.12
0.3215434
164318122
OFFSHORE OIL-A
CHINA UNITED-A
3.15
-2.173913
177142040
PETROCHINA CO-A
CHINA VANKE CO-A
8.85
-1.993355
170938862
PING AN BANK-A
9.98
-1.674877
171716261
CHINA YANGTZE-A
6.73
0.2980626
35120596
PING AN INSURA-A
34.62
0.3478261
51536951
CHONGQING CHAN-A
9.05
4.503464
42609380
POLY REAL ESTA-A
9.3
-2.413431
147402521
PRICE DAY %
Volume
MOVERS
92
191
17 2330
INDEX 2165.421 HIGH
2323.13
LOW
2043.82
52W (H) 2791.303 (L) 2023.171
2040
21-June
25-June
FTSE Taiwan 50 Index NAME ACER INC ADVANCED SEMICON ASIA CEMENT CORP
20.95
-2.55814
9136025
24.3
-1.219512
10101374
NAME
PRICE DAY %
VOLUME
FORMOSA PLASTIC
68.2 -0.2923977
6756457
NAME TAIWAN MOBILE CO
PRICE DAY %
FOXCONN TECHNOLO
70.3 -0.9859155
3702931
TPK HOLDING CO L
111.5
VOLUME
0.4504505
7810885
488 -0.1023541
14217057 33897665
34.95
-0.56899
6012004
FUBON FINANCIAL
37.9
-2.820513
33432968
TSMC
101
0
ASUSTEK COMPUTER
287
-1.37457
6414887
HON HAI PRECISIO
70.2 -0.1422475
39994853
UNI-PRESIDENT
57.1
-1.890034
8811714
AU OPTRONICS COR
10.1
-1.941748
113032718
HOTAI MOTOR CO
281.5
-0.177305
463841
UNITED MICROELEC
12.7
-0.78125
76493390
CATCHER TECH
144
-5.263158
14552814
HTC CORP
243.5
2.310924
15363787
29
-3.333333
17235046
40
-2.912621
41064191
HUA NAN FINANCIA
16.2 -0.6134969
6629272
YUANTA FINANCIAL
15.1
-1.948052
20908157
CHANG HWA BANK
16.1 -0.9230769
10764171
LARGAN PRECISION
921
-2.021277
2454334
YULON MOTOR CO
44.8
-4.57934
5095202
CHENG SHIN RUBBE
87.4
-3.956044
10458896
LITE-ON TECHNOLO
49.1 -0.7077856
7860780
CHIMEI INNOLUX C
14.7
-2.325581
115755192
MEDIATEK INC
314
1.618123
15433235
CHINA DEVELOPMEN
8.05
-2.424242
41696831
MEGA FINANCIAL H
22.1 -0.6741573
28277548
CHINA STEEL CORP
23.1
-1.492537
19487120
NAN YA PLASTICS
58.5 -0.3407155
12113439
CHINATRUST FINAN
17.8
-1.385042
41653983
PRESIDENT CHAIN
193
0
61.3
0.8223684
6897146
36
-1.504788
20198638
CATHAY FINANCIAL
CHUNGHWA TELECOM
95.5
0.4206099
8985697
QUANTA COMPUTER
COMPAL ELECTRON
16.35
-0.304878
15050888
SILICONWARE PREC
DELTA ELECT INC
2073135
132.5
-2.930403
4368984
SINOPAC FINANCIA
13.5
-2.877698
22973557
FAR EASTERN NEW
31.4
1.290323
7227773
SYNNEX TECH INTL
38.05
-6.280788
17481903
FAR EASTONE TELE
75.1
2.176871
7273383
TAIWAN CEMENT
33.75
-2.456647
19432733
TAIWAN COOPERATI
FIRST FINANCIAL FORMOSA CHEM & F FORMOSA PETROCHE
17.15
-0.867052
12184376
16.15
-1.223242
9750101
66.9 -0.8888889
4174201
TAIWAN FERTILIZE
69.5
-2.250352
7946108
4223866
TAIWAN GLASS IND
25.7
-1.153846
758407
69
-2.266289
WISTRON CORP
MOVERS
7
41
2 5380
INDEX 5274.82 HIGH
5372.14
LOW
5274.82
52W (H) 5896.71 5270
(L) 4719.96 21-June
25-June
13
June 26, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 58.0
38.2 37.5
19.5 19.2
57.5
18.9
36.8
Max 38.1
average 37.293
Min 35.45
35.4
Last 37.85
18.6
57.0
36.1
18.3 Max 58
average 56.977
Min 56.5
56.5
Last 56.95
Max 19.5
average 18.957
Min 18.02
Last 19.28
18.0
35.4
20.4
17.8 34.8
20.2
17.6 20.0
17.4
34.2
19.8
17.2 Max 35.35
average 34.589
Min 33.65
33.6
Last 34.75
Max 17.92
average 17.53
Commodities PRICE
DAY %
YTD %
(H) 52W
Last 17.82
(L) 52W
WTI CRUDE FUTURE Aug13
95.81
0.661903761
2.186433447
99.98000336
86.29000092
BRENT CRUDE FUTR Aug13
101.84
0.672202452
-4.706652943
115.1699982
96.70999908
GASOLINE RBOB FUT Jul13
275.87
0.770748101
-2.305404065
318.0399895
238.9999866
GAS OIL FUT (ICE) Aug13
868.25
1.757984178
-4.482948295
983.5
816
3.737
-0.053490238
4.912970241
4.499000072
3.329999924
287.64
0.760149928
-4.174301229
322.0499992
259.5000029
NATURAL GAS FUTR Jul13 NY Harb ULSD Fut Jul13 METALS
Min 17.08
17.0
Max 20.4
average 20.033
Min 19.62
Last 19.92
Gold Spot $/Oz
1284.89
0.145
-22.8044
1796.08
1269.66
Silver Spot $/Oz
19.781
0.4035
-34.3042
35.365
19.3993
Platinum Spot $/Oz
1353.53
-0.3842
-10.82
1742.8
1326.08
Palladium Spot $/Oz
675.23
-0.0962
-3.4917
786.5
553.75
LME ALUMINUM 3MO ($)
1771.5
-1.199107641
-14.54413893
2200.199951
1762.5
LME COPPER 3MO ($)
6670
-2.170724553
-15.89963435
8422
6613
LME ZINC
1824
-0.950312245
-12.30769231
2230
1745
13635
-3.126110124
-20.07620164
18920
13600 14.60000038
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Sep13
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
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
0.9266 1.5447 0.9347 1.3118 97.19 7.9885 7.7559 6.1449 59.54 30.94 1.2708 30.118 43.335 9920 90.06 1.2261 0.84923 8.066 10.4786 127.5 1.03
0.827 0.5992 0.0107 0.0916 0.8026 0 0.009 -0.0065 0.2267 0.5495 0.7161 0.1826 1.2461 0.8972 -0.0355 -0.0701 0.5111 -0.1798 -0.0668 0.7059 -0.0097
-10.715 -4.5067 -2.0648 -0.5459 -11.4106 -0.0663 -0.0683 1.3947 -7.6335 -1.1635 -3.8873 -3.6025 -5.3767 -1.2802 -0.8139 -1.5186 -3.9813 1.8783 0.4943 -10.9255 -0.0097
1.0625 1.6381 0.9972 1.3711 103.74 8.0111 7.7664 6.3964 59.98 32 1.2847 30.228 44.181 10174 105.433 1.265 0.88151 8.4957 10.9254 133.8 1.032
0.9148 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
15.67
0.095816033
1.720220708
16.47500038
550.75
0.777676121
-8.170070863
665
512
694.5
0.981461287
-13.94052045
905.75
673.75
SOYBEAN FUTURE Nov13
1278.75
0.412249706
-1.842256765
1409.75
1186.5
COFFEE 'C' FUTURE Sep13
120.95
0.665834374
-20.6625123
203.8499908
117.0999985
NAME
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
16.47999954
ARISTOCRAT LEISU
4.04
-0.2469136
28.25396
4.49
2.29
2124846
CROWN LTD
11.5
-2.871622
7.778818
13.75
8.28
1920144
AMAX HOLDINGS LT
1.19
-0.8333333
-15
1.72
0.75
1987425
BOC HONG KONG HO
23.1
-1.702128
-4.149379
28
22.6
28264315
0.345
-1.428571
30.18869
0.42
0.22
0
5.3
0
-11.5192
6.74
2.89
13000
CHINA OVERSEAS
18.54
-0.7494647
-19.74026
25.6
16.661
34953473
CHINESE ESTATES
12.92
-0.7680492
6.517886
14.12
8.031
664347
CHOW TAI FOOK JE
7.76
-6.393245
-37.62058
13.4
7.44
15260090
EMPEROR ENTERTAI
2.62
3.557312
38.62434
3.07
1.32
2716822
FUTURE BRIGHT
2.19
-4.782609
80.68918
2.76
0.884
9174000
GALAXY ENTERTAIN
37.85
2.021563
24.7117
44.95
16.98
39475235 2534492
CORN FUTURE
Dec13
WHEAT FUTURE(CBT) Sep13
SUGAR #11 (WORLD) Oct13
17.27
COTTON NO.2 FUTR Dec13
83.21
0.758459743 0.036066362
-13.90827517 5.676911354
22.8599987 89.55999756
73
Macau Related Stocks
CENTURY LEGEND
World Stock Markets - Indices NAME
CHEUK NANG HLDGS
VOLUME CRNCY
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
14659.56
-0.9449032
11.86968
15542.4
12450.17
NASDAQ COMPOSITE INDEX
US
3320.757
-1.086873
9.976554
3532.038
2810.8
FTSE 100 INDEX
GB
6093.89
1.074621
3.324625
6875.62
5435.46
HANG SENG BK
111.4
-0.2685765
-6.149955
132.8
102.7
DAX INDEX
GE
7822.38
1.689059
2.758526
8557.86
6096.94
HOPEWELL HLDGS
24.6
1.026694
-26.01504
35.3
19.839
1843508
HSBC HLDGS PLC
79.7
0.5678233
-1.968023
90.7
61.1
20363667
HUTCHISON TELE H
6687000
NIKKEI 225
JN
12969.34
-0.7153148
24.76302
15942.6
8328.019531
HANG SENG INDEX
HK
19855.72
0.2106593
-12.36355
23944.74
18710.58984
CSI 300 INDEX
CH
2165.421
-0.2666255
-14.17114
2791.303
2023.171
4.22
3.431373
18.53933
4.66
2.98
LUK FOOK HLDGS I
17
-2.411022
-30.32787
30.05
15.3
2279900
MELCO INTL DEVEL
14.28
1.854494
58.49056
18.18
5.12
11635192 10480777
TAIWAN TAIEX INDEX
TA
7663.23
-1.22196
-0.4710698
8439.15
6922.73
MGM CHINA HOLDIN
19.28
5.010893
45.19954
21.6
9.509
KOSPI INDEX
SK
1780.63
-1.021673
-10.83699
2042.48
1758.99
MIDLAND HOLDINGS
2.83
-0.3521127
-23.51351
5
2.77
2649000
S&P/ASX 200 INDEX
AU
4655.96
-0.2823644
0.1507817
5249.6
3993.8
NEPTUNE GROUP
0.16
-1.234568
5.263161
0.23
0.084
24135000
ID
4418.872
-0.2390359
2.36721
5251.296
3848.853
NEW WORLD DEV
10.2
-0.5847953
-15.14143
15.12
8.66
16997535
FTSE Bursa Malaysia KLCI
MA
1728.64
-0.5494221
2.349985
1826.22
1590.67
SANDS CHINA LTD
34.75
-1.697313
2.356404
43.7
20.65
26461426
SHUN HO RESOURCE
1.4
-1.408451
0
1.67
1.03
168000
NZX ALL INDEX
NZ
924.735
-1.09236
4.838939
998.487
755.149
SHUN TAK HOLDING
3.68
1.098901
-12.17184
4.65
2.56
4767000
PHILIPPINES ALL SHARE IX
PH
3588.64
-2.656663
-2.982987
4571.4
3387.73
SJM HOLDINGS LTD
17.82
-0.1121076
0.4076156
22.382
12.995
12304073
SMARTONE TELECOM
12.64
0.7974482
-10.22727
17.38
12.3
1324298
WYNN MACAU LTD
19.92
-4
-4.916471
26.5
14.62
15780994
JAKARTA COMPOSITE INDEX
19.6
Currency Exchange Rates
NAME ENERGY
18.0
HSBC Dragon 300 Index Singapor
SI
580.1
-1.8
-6.6
NA
NA
STOCK EXCH OF THAI INDEX
TH
1384.63
1.505766
-0.5244552
1649.77
1145.79
HO CHI MINH STOCK INDEX
VN
473.02
-3.414056
14.3306
533.15
372.39
ASIA ENTERTAINME
3.75
1.351351
33.22993
4.7647
2.2076
353740
BALLY TECHNOLOGI
54.22
-1.597096
21.27041
57.86
41.74
570448
Laos Composite Index
LO
NA
NA
NA
1455.82
980.83
BOC HONG KONG HO
2.99
-0.9933775
-2.605861
3.6
2.85
65239
GALAXY ENTERTAIN
4.79
-7.170543
20.65491
5.77
2.25
20700
15.83
-2.524631
11.71489
18.81
10.92
3432616
JONES LANG LASAL
86.5
-0.5404162
3.049794
101.46
61.39
360174
LAS VEGAS SANDS
49.47
-5.393001
7.170711
60.54
32.6127
18001173
MELCO CROWN-ADR
21.36
-5.024455
26.84085
25.2
9.13
8742387
MGM CHINA HOLDIN
2.34
-13.65314
26.48648
2.71
1.36
3300
MGM RESORTS INTE
13.25
-4.055033
13.83161
15.95
8.83
17156645
SHFL ENTERTAINME
17.35
-2.964206
19.65517
18.57
12.35
555151
SJM HOLDINGS LTD
2.38
-0.8333333
4.495225
2.9481
1.7255
5801
124.12
-4.294857
10.3387
144.99
84.4902
3326278
INTL GAME TECH
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 26, 2013 April 19, 2013
Opinion
The transatlantic free-trade imperative Alfred Gusenbauer
T
Former Chancellor of Austria in 2007-2008
he confirmation of Michael Froman as the U.S. Trade Representative is a fitting moment to highlight the many opportunities that a free-trade agreement between the European Union and the United States would offer Europe, America, and the world. Today’s three-tier global economy – 6 percent growth in emerging markets, 2 percent growth in the U.S., and no growth in Europe – shows ominous signs of paralysis and nationalistic unilateralism. Many see currency wars looming. In such an economically insecure global environment, riddled with protectionist booby traps, a free-trade pact between the world’s two largest trading blocs, accounting for roughly 40 percent of global GDP, has never been more important. Historically, free trade and economic growth have gone together, as have protectionism and stagnation, and deeper trade integration of the U.S. and EU economies would strengthen growth on both sides of the Atlantic. The U.S. economy’s projected 2 percent growth this year, despite a 1.8 percentof-GDP cut in government spending, implies real privatesector growth of 3.8 percent. Although both the Federal Reserve and the European Central Bank have actively intervened to boost economic recovery, the results could not be more different.
In the U.S., the banking crisis was tackled rapidly and in a sustainable manner, while Europe is still going from one bailout to the next. Moreover, America’s stimulus programme obviously worked (notwithstanding criticism from the left for being too small, and attacks from the right for being too large). Another contributing factor may be a basic difference in mentality: many Europeans tend to over-emphasise risk when assessing opportunities.
industrial sector are currently 25 percent lower than the European average. Even more significant, however, are the differences in energy costs, which are now up to 50 percent lower in the U.S. – a gap that is likely to widen further as America’s shale-gas revolution continues. This has led energyintensive European industries – including producers of glass, steel, chemicals, and
Linking interests In any case, America is the first country in the recession-stricken part of the global economy where public stimulus has led to enough private investment and growth that fiscal consolidation has become possible. The more America and the EU grow together, the more the EU will benefit from the U.S. recovery. Demand for European goods will increase, and the EU’s member states can – and should – align their economies with U.S. growth. History suggests that the hope for a self-sustained recovery in Europe might well prove deceptive; almost always, the European economic cycle has followed and reinforced that of the U.S. Today, for example, a prolonged recession in Europe is, alongside budget cuts, generally seen as posing the greatest risk to a sustained U.S. recovery. Labour costs in the U.S.
pharmaceuticals – to invest heavily in the U.S. Often, they manufacture high-quality upstream products, which are then processed further in Europe. The Austrian steel producer Voestalpine AG, for example, will start producing steel pellets in the southern U.S. that will then be upgraded to high-quality alloys in Austria. The combination of lower production costs in the U.S. and Europe’s world-class finishing capabilities is a recipe for first-rate products at competitive prices. In this way, European investment is contributing to the reindustrialisation of the U.S. while simultaneously ensuring high-quality European jobs.
Economic challenge
An EU-U.S. freetrade zone would strengthen transatlantic political bonds and effectively refute the frequent lament that America has lost interest in Europe
But Europe must do more to reinvigorate its own manufacturing sector. The last attempt to create an EUU.S. free-trade zone, under President Bill Clinton, failed because of the EU’s rigid, antiquated agricultural policy. A new effort would help Europe to replace its agricultural policy with a research-and-development policy aimed at boosting industrial competitiveness. Despite all the lip service paid at multilateral summits to policy coordination, imbalances within the global economy are fuelling a rise in tensions. At a time when many are seeking salvation in nationalism, an EU-U.S. free-trade zone would be a powerful symbol
of cooperation in overcoming global challenges. The increasing economic weight of Asia is also a geopolitical game-changer. China’s massive arms build-up shows that economic power without military power is only a temporary phenomenon. So the focus in world politics is shifting from the Atlantic to the Pacific. Europe should know where it belongs. An EU-U.S. freetrade zone would strengthen transatlantic political bonds and effectively refute the frequent lament that America has lost interest in Europe. In his second inaugural address, President Barack Obama called an EU-U.S. free-trade zone a core project of his second term. Secretary of State John Kerry repeated this during his visit to Germany this spring. Now it is up to export-oriented EU countries like Germany, the Netherlands, Sweden, and Austria to press for action on the American offer of negotiations. Europe has engaged in navel-gazing for long enough. Its malaise has raised questions about whether its democratic capitalism will survive the economic challenge posed by authoritarian and quasiauthoritarian regimes. I, for one, prefer making political decisions to wallowing in doubt and self-pity. A transatlantic trade pact would align both economies with the fundamental interests of the West. © 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 26, 19, 2013 2013
Opinion
China loses control wires of its Frankenstein economy Business
Leading reports from Asia’s best business newspapers
Taipei Times Civic groups says Taiwan’s Premier Jiang Yi-huah should step down if he does not guarantee that the service trade agreement with China will not be validated until the legislature conducts a de facto review of it. “The premier should publicly promise that he will not validate the pact until the Legislative Yuan reviews and approves it. If he does not promise this, or unilaterally validates the agreement, we call on lawmakers to dissolve the Cabinet and boycott it by all means possible,” Cross-Strait Agreements Watch convener Lai Chung-chiang was quoted as saying.
Korea Herald South Korea’s finance minister called for businesses to expand investment and employment in order to help break the cycle of a prolonged low growth. “I expect the meeting to serve as a chance to have sincere and productive discussions that could lead to pre-emptive investment and expanded employment, eventually cutting the low growth trend,” Finance Minister Hyun Oh-seok told in a meeting with heads of the country’s major business lobby groups. The country’s gross domestic product grew less than 1 percent for the past eight straight quarters.
William Pesek
Bloomberg View columnist
T
he world has grown used to the idea that China’s leaders are masterful stewards of their gargantuan economy. They steered brilliantly around the iceberg of the 2008 financial crisis, maintaining growth of near-double-digit rates. So when People’s Bank of China chief Zhou Xiaochuan began clamping down on excessive liquidity last week, some observers viewed him as a Chinese Paul Volcker. Now that the worst was over, Zhou seemed to indicate, it was time for China to rein in lending and prevent a credit bubble from swelling. Then reality intervened. After the overnight repurchase rate zoomed to a record 13.91 percent, Zhou had to back off, hastily injecting fresh funds to stem the turmoil. The chaos traumatised money markets. Some were dismayed by signs that Zhou would end the era of easy money in China. Others feared that he couldn’t. Indeed, continuing unease this week underscores how limited Zhou’s powers actually are.
Zhou Xiaochuan, People’s Bank of China chief
The Star Datuk Seri G. Palanivel, Malaysia’s newly appointed Environment and Natural Resources Minister will be in Jakarta to meet representatives of Malaysianowned plantations there and also to hold discussion with Indonesia’s Environment Minister Balthasar Kambuaya. Mr Balthasar announced late last week that 14 companies had been identified and were being probed for open burning. Of the total, eight are Malaysia-owned, according to the government.
The central bank needs to confirm it will rein in interbank liquidity, explain the means by which it plans to do so, and indicate what the endgame is
Bangkok Post Thailand’s government has bowed to the private sector’s calls for rice auctions to speed up releasing its massive stocks. But it remains committed to going ahead with existing secret sales of rice and government-togovernment contracts despite repeated calls by businesses for the government to scrap murky and inefficient methods. Sompong Kitireanglaro, president of rice exporter Ponglarp Co, said the government should reinstate common rice auctions instead of selling its stocks to single private firms under secret deals.
Over the past decade, China’s economy has grown addicted to excessive credit growth, with state-owned banks encouraged to finance as many new skyscrapers, highways, airports, dams and ghost towns as needed to pump up gross domestic product. Free-flowing liquidity – mostly to state-owned enterprises – kept stocks and real estate buoyant, foreign investors bullish and China’s 1.3 billion people away from Tiananmen Square. Zhou can’t cut off the
money now without banks suffering from withdrawal. And the danger is that nobody really knows how healthy China’s giant, state-owned banks are, or how big its shadowfinancing system has grown. When Stephen Green of Standard Chartered Plc in Hong Kong called China’s credit system “a big black box, and it’s quite scary,” he wasn’t exaggerating.
Mystery data How can anyone trust that China is growing at a rate of 7.7 percent, as the government claims, when crucial variables in its data tabulation are a mystery? Bank of America Corp economist Lu Ting in Hong Kong risked China’s ire by alleging its trade surplus was 1/10 the US$61 billion it reported as of mid-May. The nobody-knows character of China’s credit system – quantity, quality or excesses – is even more worrisome. The U.S. shadow-banking system, with its off-balancesheet vehicles and murky dealings, helped drive world markets off the rails in 2008. Imagine the damage an entire shadow economy could cause if it unravels. China’s leaders avoided bursting one bubble in 2008 by creating new ones. Yet
China cannot forever delay its day of reckoning. Total credit may reach 200 percent of GDP this quarter, up from 130 percent in 2008. Mainland banks are currently adding assets at the rate of an entire U.S. banking system every five years. Traditionally, Beijing has viewed opacity as a powerful tool for policing the channelling of funds between banks and companies. That murkiness is now proving dangerous. The central bank needs to confirm it will rein in interbank liquidity, explain the means by which it plans to do so, and indicate what the endgame is. Its vague, boilerplate statements are only exacerbating distress in the markets. At the same time, Zhou is fundamentally helpless: He cannot be truly effective unless the country’s top political leadership decides that the Communist Party is going to get out of the banking business. China needs to allocate capital less recklessly and price it according to economic reality, not according to the dictates of officials who profit from the current arrangement. If the government really wants to reduce the role of state-run companies in China’s economy – as it should, because only a thriving private sector can
increase innovation and competitiveness – it must privatise the banks first.
Powerful creature Putting off that hard task has turned the Chinese economy into a Frankenstein monster. It’s a giant and powerful creature born of unorthodox experiments, and its makers are increasingly losing control. No one envies Chinese President Xi Jinping and Premier Li Keqiang. They must manage a slowing economy and institute critical reforms, all without panicking the markets and destabilising Chinese society. They should study the precedent set by former premier Zhu Rongji, whose efforts to modernise stateowned enterprises in the late 1990s put more than 40 million Chinese out of work but added much-needed balance to the economy. Any shock therapy will be painful. And to be effective, it must treat the underlying problem, not just the symptoms. Otherwise, Zhou’s every effort to drain credit will only send waves of panic through the markets. He’s right that China’s Frankenstein needs to be stopped. But only its creators can do that. Bloomberg View
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June 26, 2013
Closing EU delays Turkey membership talks
Monetary easing long way from over: King
European Union governments postponed the resumption of Turkey’s membership talks by at least four months, protesting Prime Minister Recep Tayyip Erdogan’s heavy-handed treatment of peaceful dissenters. Turkey got a symbolic declaration that the entry process, on hold since mid2010, will proceed once Turkey obtains a positive progress report from the EU in October. Germany floated the compromise after threatening to block the restart of the talks, which had been scheduled for today. Egemen Bagis, Turkey’s EU negotiator, had warned that an EU snub would lead Turkey to consider “other options”.
Bank of England Governor Mervyn King said the global economic recovery is at risk of further setbacks and central banks are a long way off tightening monetary policy. “Clearly the level of interest rates and the scale of asset purchases will have to be unwound and we must return to more normal conditions at some point,” Mr King said in testimony to lawmakers at the Treasury Select Committee in London yesterday. “That point is not today,” he added. “Even in the U.S., what you’ve seen there is that they’re still providing more stimulus,” Mr King said.
Rout in Asian shares continues HK-listed China shares at 20-month low on credit squeeze in China surged to records. “Global markets are taking off risk and will continue to be jittery until interbank rates in China stabilise,” said Ichiro Yamada, general manager of equities who helps oversee the equivalent of US$3 billion at Fukoku Mutual Life Insurance in Tokyo. “Japanese shares are falling along with other markets, but it’s also the most resilient market because it benefits from a stronger dollar.”
Cash Crunch
A
sian stocks fell as a gauge of the biggest Chinese shares traded in the mainland sank deeper into a bear market amid concern a cash crunch will curb growth in the world’s second-largest economy. Jiangxi Copper Co, China’s biggest producer of the metal, dropped 4.6 percent in Hong Kong. Newcrest Mining Ltd fell 2.4 percent after Australia’s No. 1 gold producer cut jobs at its Lihir mine in Papua New Guinea. Guangzhou Shipyard International Co, a unit of China’s
largest shipbuilder, plunged 17 percent after announcing plans to sell shares and buy a shipyard. The MSCI Asia Pacific Index fell 0.3 percent to 125.42 as of 5.30 pm in Tokyo, reversing gains of 0.5 percent. Almost two shares fell for each that rose on the measure. The gauge dropped 13 percent from this year’s high on May 20 through yesterday after Federal Reserve chairman Ben S. Bernanke said the U.S. central bank may start dialling down stimulus, and as money-market rates
China’s CSI 300 Index, representing the biggest companies in the Shanghai and Shenzhen stock exchange, dropped 0.3 percent, extending losses for fifth day. The measure has fallen 22 percent from this year’s high, surpassing the 20 percent threshold that some investors consider as a bear market. The benchmark Shanghai Composite Index slid 0.2 percent, paring losses of as much as 5.8 percent earlier. The overnight interbank interest rates fell for a third day, the longest run of declines in a month, as the central bank refrained from selling bills amid the worst cash crunch in at least a decade. China’s central bank said it will keep money-market rates at a “reasonable” level and seasonal forces that have driven them up will fade. The People’s Bank of China has provided liquidity to some financial
Club Med buyout secures board blessing Buyout offer brings China into the orbit of travel-services firm
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Chinese investor and a French private equity firm have won over Club Mediterranee SA with an improved 557 million euros (US$729 million) takeover bid, seeking to accelerate a shift at the holiday resorts pioneer to fastgrowing emerging markets. Gaillon Invest, the holding company created by Axa Private Equity and Fosun International Ltd to buy Club Med, said yesterday they would pay 17.5 euros a share for the stock they do not already own, up from their previous offer of 17 euros.
Club Med’s board favours the offer, and investors represented on the board pledged to tender 14.9 percent of shares outstanding, Gaillon said. That brings the stock controlled by the bidders to 34.23 percent. The offer is valid subject to acceptance by owners of 50 percent of the shares. A transaction including debt would be the biggest acquisition of a travel-services company in six years, and may end almost half a century of public listing for Parisbased Club Med, which started on
the Mediterranean island of Mallorca in 1950 in a village of used military tents. Listed since 1966, Club Med was a pioneer of the all-inclusive holiday resort. Club Med shares have closed above 17 euros every day since May 28, the day after Axa and Fosun, its largest shareholders, announced their plan to team up with management to buy the company, indicating investors may be betting on a sweetened offer. Club Med fell on hard times in the past decade because of stiff competition and an unsuccessful
institutions to stabilise money market rates and will use short-term liquidity operation and standing lending facility tools to ensure steady markets, according to a statement posted to its website yesterday. Hong Kong’s Hang Seng Index gained 0.2 percent after falling as much as 2 percent. The Hang Seng China Enterprises Index fell 0.8 percent, deepening its slide. Japan’s Topix index slid 1 percent, while the benchmark Nikkei 225 Stock Average lost 0.7 percent. South Korea’s Kospi index dropped 1 percent and Taiwan’s Taiex Index retreated 1.2 percent. Australia’s S&P/ASX 200 Index slipped 0.3 percent and New Zealand’s NZX 50 Index decreased 1.1 percent. Singapore’s Straits Times Index rose 0.4 percent. Raw-material producers led declines among the MSCI Asia Pacific Index’s 10 industry groups. Jiangxi Copper dropped 4.6 percent to HK$13.02. BHP Billiton Ltd, the world’s biggest miner, fell 1.7 percent to A$30.81 in Sydney. Glencore Xstrata Plc, the world’s largest exporter of power-station coal, sank 3.1 percent to HK$33.15 in Hong Kong, the lowest close since its May 2011 listing. The company is proposing to scale down operations at its Ravensworth mine in Australia amid difficult market conditions, Tony Galvin, general manager at the mine, said in an e-mailed statement. Bloomberg News
expansion into services. A more recent drive to recast itself as an upmarket operator has been hampered by a flagging European economy. Fosun and Axa, along with chief executive Henri Giscard d’Estaing, plan to accelerate Club Med’s expansion in markets such as China to help it cope with tough trading in Europe, where it still makes over 70 percent of its revenue. The company has said it aims to operate five villages in China by 2015, including three by the end of this year. Beyond China, Club Med is speeding up expansion in Russia and Brazil, with the goal to lift the contribution of emerging markets to sales to 33 percent by 2015 from around 25 percent. The firm, which operates around 70 resorts worldwide, competes with global hoteliers including Intercontinental Hotels Group Plc and Accor SA. Reuters