Macau Business Daily, June 27, 2013 by Business Daily

End Macau Cable TV concession: legislator

eeks after a Macau court found the government broke the law for more than a decade by allowing antenna companies to distribute copyrighted pay television channels, a legislator proposes penalising the ‘winner’ in the case. Macau Cable TV theoretically has a monopoly for pay TV services issued in 1999 and expiring next year. But its belated court victory has left an administrative mess. Around 70 percent of consumers get their TV pictures from communal systems installed by the rival antenna companies. Au Kam San wants the Legislative Assembly to consider terminating Macau Cable TV’s concession early so the public antenna firms can be retrospectively legalised. But it doesn’t solve the copyright problem, says Macau Cable TV chief Angela Lam In Nie. More on page 5

Year II

Number 314

Thursday June 27, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

Vitor Quintã

MOP 6.00

April 19, 2013

I SSN 2226-8294

www.macaubusinessdaily.com

DB downgrades four Macau casino stocks Deutsche Bank analyst Karen Tang – widely considered an influential voice in the Asian casino industry – has downgraded four Macau gaming stocks to ‘hold’ from ‘buy’. The Hong Kongbased analyst cut Galaxy Entertainment Group Ltd, Melco Crown Entertainment Ltd, Sands China Ltd, and Wynn Macau Ltd. Ms Tang left recommendations on SJM Holdings Ltd and MGM China Holdings Ltd unchanged at ‘hold’.

Hang Seng Index 20350

20270

Page 3

20190

20110

Stanley Ho wanted La Scala land

20030

Casino entrepreneur Stanley Ho Hung Sun applied for land plots near the airport before they were put up for tender, the Court of First Instance heard. Hong Kong businessmen Joseph Lau Luen Hung and Steven Lo Kit Sing are accused of bribing Ao Man Long, then a government secretary, with HK$20 million (US$2.5 million) to get the land for the luxury housing scheme La Scala instead.

19950

June 26

HSI - Movers

Page 4

Name

%Day

IND & COMM BK-H

6.82

CHINA CONST BA-H

6.50

Mixed results for SJM’s non-casino gambling ops

CHINA MERCHANT

5.84

TINGYI HLDG CO

5.02

Macau Jockey Club’s losses widened in 2012 as horse racing remained in the red for a ninth year. Things were not much better for greyhound racing, which saw its profit and revenue slump. On the contrary, sports betting posted the highest profit in a decade thanks to the Euro 2012 soccer tournament. Chinese lotteries also bounced back to record a 12-fold jump in profit.

COSCO PAC LTD

4.83

HONG KG CHINA GS

0.64

LI & FUNG LTD

0.58

CHINA COAL ENE-H

0.24

HENGAN INTL

0.19

CATHAY PAC AIR

-0.46

Source: Bloomberg

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Polytec gets Macau Legend cuts Guangxi eyes approval for investment, tourism foreign investor Pearl Horizon flats cooperation offer by 60 pct Page 2

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June April 27, 19, 2013 2013

Macau

Polytec wins approval for Pearl Horizon high-end flats

under construction. Hong Kong-listed developer Polytec Asset Holdings Ltd had already opened presales of the

residential and commercial project, a move that prompted the government to caution would-be buyers. It was previously unclear if the company had approval for the development. Fok Kiu – Properties Investment Ltd, a Macau-registered indirect subsidiary of Polytec Asset, has approval to build six towers of 49 storeys, according to yesterday’s Official Gazette. The block is known as “Plot T” and is 17,969 square metres. The total gross floor area of the residential section of the development is 188,188 square metres. The project will have 1,818 units, according to the Land, Public Works and Transport Bureau website.

The developer had already sold 260 flats at the end of April. “There is a situation in the market in which they [developers] have started selling unfinished flats even though they have yet to obtain approval from the Land, Public Works and Transport Bureau for their floor plans,” director of the bureau Jaime Carion said in March. A source close to the government told Business Daily one such development was Pearl Horizon in Areia Preta. Mr Carion warned buyers to exercise extra caution when buying unfinished flats, because the government might not approve the floor plans used in selling the flats. Developers were trying to push through deals before the law to control flat preselling came into effect this month. The bill allows the sale of unfinished flats only after the building’s foundations have been completed and the developer has registered the units with the government. Fok Kiu will pay a premium of more than 78 million patacas (US$9.76 million) to the government for the land grant revision. Polytec expects its two ongoing projects on Areia Preta, branded as Pearl Horizon, to be ready by late 2015 or early 2016.

Macau’s business sector,” said Mr Peng during a visit to Macau. The territory’s actual investment in Guangxi reached US $ 3 6 1 m i l l i o n (2 . 8 8 b i l l i o n patacas), last year he added. Macau investors are mainly engaged in the southern mainland province’s manufacturing sector and property businesses, it was said during a trade promotion talk. The coming decade is an essential period for the province to seek “rapid growth” in water distribution, energy and agricultural development suggested Mr Peng. Macau investment in these sectors would be greatly welcome, he added. In 2012, bilateral trade between the province and Macau was US$ 37.78 million, up by 21.1 percent year-on-year, stated the official. The autonomous region is also interested in Macau as a platform for

trade cooperation with Portuguesespeaking countries, he added. Guangxi would like to have more passenger flights to and from Macau. Air Macau Co Ltd first launched services between Macau and Nanning, the capital of the province, in 2009. “We would like to see more frequent flights between Guangxi and Macau,” said Mr Peng. “The province is famous for its scenery and we hope that through more frequent flights more visitors can be brought in to our ecological tourism,” he added. The Guangxi authorities are building the reservoir project of Dateng Gorge, which should be completed by 2020. “The construction of the Dateng Gorge reservoir in the province will be an important project bringing mutual benefits to us and Macau in the coming

years,” the province leader said. The reservoir could serve as an additional source of water supply for Macau and alleviate the pressure caused by seasonal salt tides in Xijiang River, Macau’s most important water source, suggested Mr Peng. A total of 25 billion yuan (US$4.07 billion) will be invested in the reservoir. Total capacity could reach more than three billion cubic metres. In May the Macau government announced that it would contribute 800 million yuan for the project. Mr Peng led a provincial delegation to Macau yesterday after a brief visit to Hong Kong trade associations a day before. The Guangxi team signed 24 trade cooperation deals with Hong Kong trade institutions. Total investment in those projects reached US$16.29 billion, of which US$14.5 billion came from Hong Kong.

unavailable and consistent series can be difficult to build. I could also mention the time-consuming and annoying difficulties introduced by the formatting of data and the layout of the tables used on the downloadable spreadsheets. I might also ask why information on the territory’s land mass and the length of its public road network are the only data accessible online from the interactive database. These annoyances aside, browsing the recently published report on the environment last year gives us pause for thought. As usual, the report is mostly geophysical and climate information and largely descriptive. There are a few curious facts here and there but, as a rule, nothing of substance. The coastline was extended by almost 3 km last year, a 6-percent increase, did you know? Now you do. It is slightly puzzling that the coastline is longer but the total area is unchanged. The territory’s roads grew by an additional 1,400 metres, a mere third of a percentage point increase. That had no visible effect on vehicle density, which reached an amazing 521 vehicles per kilometre. Just try to imagine it.

common and important indicator, is not to be seen anywhere. Surprise. The structure of the report has changed in comparison to previous years and the figures for green cover have gone. Is that a sign of things to come? I will spare you the climate information, including the list of tropical storms we had to endure and their effects. Finally, the environmental quality indicators proper, starting with air quality. As always, overall air quality is good. Even the roadside measurements, made at Rua do Campo in the Macau peninsula, are “good” half of the time. Some readers may wonder if they seem to go past at the wrong moment, but there is no need to delve into that now. Note, however, that for 33 days there was no measurement, as the station was under repair. Based on air quality data, you might conclude that the best place to live is the Concordia Industrial Park. Last year, 330 days deserved the “good” tag. There is some irony here as this is probably a unique achievement anywhere in the world.

subject to only basic treatment. Last year, several biochemical indicators were above the maximum limits – not occasionally, but on average. In 2011, there was also a serious deterioration in the performance of the Coloane treatment plant. An analysis of the significance of the changes is quite technical and may be difficult for the lay reader to assess but, assuming that standards are set for a reason, these deviations are anomalous and should be a matter of concern. Worse still, looking into the data for the previous years, the plant was close to reaching its capacity in 2008 and has been operating above capacity for the last four years. Most of the indicators show the quality of the wastewater thrown into the sea in this period, post-treatment, fails the applicable standards. Yet that was not a concern for anyone nor deserving of a public explanation, it seems. Clearly, it was felt there was no need for urgent corrective measures. Anyone who can explain this, please step forward. The most worrying sign is, paradoxically, the increase of processing capacity at the Coloane plant. Last year it jumped from 20,000 cubic metres to 130,000 cubic metres, almost the current capacity of the Macau plant. I applaud the foresight and the expected improvement in service. Overall I can only guess what that means for the island and the protection of its natural environment, and shudder.

Developer started selling units before the land grant was revised Stephanie Lai sw.lai@macaubusinessdaily.com

he government has approved an amendment to the land grant for the plot where the high-end Pearl Horizon flats are

Guangxi eyes investment, tourism cooperation

uangxi wants more Macau investment and tourism cooperation, said Peng Qinghua, the province’s Communist Party chief yesterday. “A rough estimate notes that until the end of 2012, we have recorded 329 firms backed or established by

opinion

Falling foul

José I. Duarte Economist

acau’s Statistics and Census Service collects and publishes sets of data on a wide range of subjects but few data sets are as unrewarding as those on the environment. The figures published in the annual report look at times like a patchwork of information considered surplus or “not classified elsewhere”. Occasionally there are changes of criteria or methods that make long-term analysis almost impossible. For whatever reason, data is frequently

Macau

In thin air Reaching the fauna and flora section, I might rejoice at the almost 300 new trees planted by the roadside. However, that enthusiasm vanishes when an estimation of the city’s green area, a

Worrying numbers It is the results on wastewater that grab my attention. First, the sewage treatment plant on the Macau peninsula is now receiving an average daily flow that is beyond its total processing capacity. Almost 60 percent of the effluent received is

Deutsche Bank downgrades four Macau casino stocks Casinos’ growing exposure to junket VIP credit risk also queried by a commentator Michael Grimes

michael.grimes@macaubusinessdaily.com

eutsche Bank analyst Karen Tang – widely considered an influential voice in the Asian casino industry – has downgraded four Macau gaming stocks to ‘hold’ from ‘buy’. The Hong Kongbased analyst cut Galaxy Entertainment Group Ltd, Melco Crown Entertainment Ltd, Sands China Ltd, and Wynn Macau Ltd. Last Friday Kenneth Fong of J.P. Morgan in Hong Kong, also downgraded Galaxy to ‘neutral’ from ‘overweight’. Ms Tang left recommendations on SJM Holdings Ltd and MGM China Holdings Ltd unchanged at ‘hold’. Most analysts see a positive correlation between Macau’s gaming revenue growth and the economic performance of China. This week global equity markets have had jitters about

liquidity in China’s formal banking system. In that macroeconomic context, the Macau gaming name downgrades are not a huge surprise, suggest other analysts. Any liquidity issues in China’s banking system can affect both the formal and informal financial sectors, and therefore potentially the VIP gambling credit lines that drove 68 percent of Macau’s gaming

revenue in the first quarter. Ms Tang sees the problem as coming more from the consumer side of the equation. “Recently, investors were concerned that [the] SHIBOR [Shanghai Interbank Offered Rate] spike may impact junket liquidity. While we see little impact as 30 to 40 percent of junket capital now come[s] from casinos, there are rising demand risks from VIPs if China recovery

Bouncy castle – global jitters over China’s banking system

slows,” she wrote. Another aspect to the story, however, is what is actually driving the trend of casino concessionaires providing up to 40 percent of junket capital – the money used by junkets to extend credit – via a network of sub agents, to the high roller players. One suggested factor is the increasing competition for VIP business among the casinos; combined with their strong capital liquidity and low leveraging as existing projects mature, pay off capital costs and flow free cash. CLSA Asia-Pacific Markets’ research report ‘Still Raining Cash,’ stated recently that a junket can typically ‘turn’ its cage capital by 6.5 times to 8.0 times per month. So with US$100 million of cage capital at the start of a month, a junket can in likelihood achieve a rolling chip turnover of US$650

Macau Legend cuts overseas investor offer by 60 pct ‘Comfort letter’ on gaming tables question does exist, says source Michael Grimes

michael.grimes@macaubusinessdaily

aming services and hotel company Macau Legend Development Ltd has reduced the international portion of its share offer by 60 percent, according to a Hong Kong regulatory filing. The number of shares available to Hong Kong investors remains the same. A supplementary prospectus filed by the company yesterday says it plans to offer 729,995,000 new shares to international investors, compared to the 1,843,477,000 for overseas purchasers mentioned in its original offer filing on June 17. The portion marketed to Hong Kong investors will remain the same, at 204,832,000. That means, however, that overall the Hong Kong investor portion rises from the 10 percent of the original 2,048,309,000 offer, to 22 percent of the new 934,827,000-share exercise. The company had devoted considerable time and resources to marketing the offer in the United States. In the supplementary prospectus there is no reference to the Legendale Hotel – the third of three hotels

Fisherman’s Wharf – third new hotel not mentioned

that were to be have been built at a waterside site called Fisherman’s Wharf with the original offering proceeds according to the May 17 prospectus. A source with knowledge of the situation last week cited “deteriorating market conditions” in global equities markets as the reason

for an initial delay in the offering. At that stage a reduction in its size wasn’t mentioned. A term sheet seen by Reuters a fortnight ago said the firm was aiming to raise HK$6.11 billion (US$788 million) gross. Had the exercise followed the original timetable, the shares would have started trading in

million to US$800 million by the end of that month. If however a casino operator were to attempt to build VIP turnover volume and market share quickly by increasing at short notice its contribution to junkets’ capital, it could also increase that individual operator’s potential exposure to bad debt. One of the arguments advanced previously by operators in support of retaining the junket system, is that junkets absorb most of the market risk associated with letting gamblers play on credit. Ben Lee of IGamiX Management & Consulting Ltd told Business Daily a recent trend by some casino operators is pre-payments to junkets. “A creative form of credit is the pre-payment of rebates to the junket operators up to two months in advance. For example, a junket has a rolling target of HK$1 billion each month to which they would be entitled to 1.25 percent. In the past they would have received HK$12.5 million in commission at the end of the month. “However I hear some casinos are now pre-paying them two months in advance, which the junkets can in turn use to finance their players. The beauty of this second form is that it does not get recorded as credit at all but as pre-payment,” he suggests.

Hong Kong today. Now – even at the top end of the indicative price range of HK$2.98 per share, the offer would raise a maximum of HK$2.79 billion gross. Several finance industry sources on Monday told Business Daily that would definitely not be enough for the three new hotel projects and other works including a yacht marina that were mentioned in the original prospectus. Macau Legend, headed by businessman David Chow Kam Fai, said in its filing yesterday it estimated aggregate net proceeds less sponsor fee of HK$2.297 billion, assuming an offer price of HK$2.64 per share – the midpoint of the stated range. The document stated: “approximately 63.5 percent or HK$1,458.8 million will be used for construction and fitting-out of the Prague Harbor View Hotel. We commenced construction of the hotel in the second quarter of 2013 and are targeting completion by the fourth quarter of 2014. The total costs of construction of the Prague Harbor View Hotel is estimated to be approximately HK$1,591.4 million.” The supplementary prospectus makes no mention of the 350 extra gaming tables Macau Legend had said in the original prospectus it was seeking to populate its new properties. But a source with direct knowledge of the process has confirmed to Business Daily the existence of a so-called ‘comfort letter’ from the authorities on the tables question, without disclosing the precise contents of the letter. The revised offer closes on Friday, with pricing confirmed on July 2 and listing due for July 5.

June 27, 2013

Macau

Stanley Ho wanted La Scala land Gaming tycoon knew the plots would be up for sale but still lost the bid Tony Lai tony.lai@macaubusinessdaily.com

Calls for end of Macau Cable TV concession But company is waiting for government action over the court ban on public antennas Vítor Quintã

STDM – parent company of current Macau casino operator SJM Holdings Ltd – was “very interested” in “exploring opportunities” in those plots the court heard. Hong Kong businessmen Joseph Lau Luen Hung and Steven Lo Kit Sing are accused of bribing Ao Man Long, then a government secretary, with HK$20 million (US$2.5 million) to ensure the success of their bid for the land in June 2005 and their proposal for a luxury high-end residential project – La Scala. The prosecutors argue that Mr Lau, chairman of property developer Chinese Estates Holdings Ltd and Mr Lo, chairman of entertainment firm BMA Investment Group Ltd knew in advance that the government wanted to sell the five plots. Patrick Huen Wing Ming, STDM’s representative on the five companies that owned the land, testified yesterday that Mr Ho also knew about the government’s intended sale of the land before those companies voted on it. “But I do not know when he found out about that,” said Mr Huen. Stanley Ho ‘disgruntled’ when failed to win land located near the airport (Photo: Manuel Cardoso)

asino entrepreneur Stanley Ho Hung Sun wrote to apply for land plots near the airport even before they were put up for tender, the Court of First Instance heard. The land is at the centre of a corruption trial. It’s alleged rival Hong Kong businessmen got the land

by paying bribes to a public official. The court heard that in a March 2005 letter Mr Ho applied for “transfer of rights” to the five plots on behalf of his company Sociedade de Turismo e Diversões de Macau SA (STDM). Mr Ho sent the letter to the

shareholders of the five companies that owned the land. The shareholders were the government (with 88 percent), STDM and Macau International Airport Co Ltd (five percent each) and veteran businessman Ng Fok (two percent), one of Mr Ho’s original partners in STDM.

Govt ignored Joseph Lau bid for Cotai plot Chinese Estates wanted to build hotels, shopping mall, zoo in Cotai Tony Lai

tony.lai@macaubusinessdaily.com

ong Kong-listed developer Chinese Estates Holdings Ltd asked the government for a land plot in Cotai in 2004, company employees testified on the Court of First Instance. But the authorities did not approve the plan to develop hotels and shopping mall in a Cotai land plot located near the Macau East Asian Dome, they said. On Monday the court had heard that Chinese Estates was interested in two Cotai plots, aside from the corruption-hit plots where the highend housing project La Scala was being built. Chinese Estate boss Joseph Lau Luen Hung and Steven Lo Kit Sing, chairman of entertainment firm BMA Investment Group Ltd, are accused of paying Ao Man Long,

then government official, HK$20 million (US$2.5 million) to ensure the success of their bid for the La Scala plots in 2005. Kenneth Ng Yik Hei, senior project manager in Chinese Estates, told the court they carried out a feasibility study for the Cotai plan. Mr Lau’s counsel, Leong Weng Pung, also presented a document saying the company had submitted a proposal to the cabinet of the chief executive at the time, Edmund Ho Hau Wah, expressing its wish to get the Cotai plot. “The plan was not implemented as it did not succeed” in getting the approval from the government, Mr Ng said. Mr Ng also said Chinese Estates has carried out another feasibility plan over the construction of hotels

and a zoo at another Cotai plot. The senior manager also said it is “common” for developers to carry out feasibility studies on land plots even before they became available. Chinese Estates carried out a feasibility study on the La Scala land in early 2005, before Moon Ocean Ltd – a company held by Mr Lo and later bought by Chinese Estates – bid for the land in June the same year. Public prosecutors had argued the study was carried out because the company knew in advance that the government wanted to sell the plots. To Chun Fun, project manager at Chinese Estates, also said they had worked on a bid to be submitted in June based on the feasibility study. But in Monday session witnesses said Mr Lau was not involved in the bidding process.

Cashing in Mr Huen added he did not know of an earlier development plan for the land plots in the 1990s. Jorge Neto Valente, Mr Lo’s counsel, said the government wanted to sell the land plots long before 2005 and drafted a plan called “Macau International Airport Business City” in 1995. Mr Huen, however, said those plots only “served as an innovative device” to make cash available for the financially troubled airport operator. “Those were bad land [plots] at the time, being far away” from the city’s centre, said Mr Ho’s financial assistant. “They were just lying idle there.” The government granted the airport operator the land plots in the 1990s. They were immediately bought by the five companies – which were in fact entities controlled by the government – in order to provide funds for the airport operator, said Mr Huen. He also said Mr Ho had asked the government to extend the 10day bidding period but never got a direct response. STDM was one of three bidders for the five plots. Moon Ocean, a company owned by Mr Lo and later bought by Mr Lau’s Chinese Estates, was another. Public prosecutors argued Moon Ocean was able to submit a better bid within 10 days because it knew about the sales in advance. “But he [Mr Ho] did not have any big reaction before the result. He only became disgruntled when he could not get the land,” said Mr Huen, describing the STDM founder as sometimes “childlike”. Despite STDM holding a stake in the companies that owned the land, Mr Huen said as a minority shareholder it had no influence over the tender procedures or the winner. “STDM is a minority shareholder and [we] do not have a say in the airport land,” the executive said. The company followed the government’s direction, he added.

vitorquinta@macaubusinessdaily.com

he Legislative Assembly must hold a debate on whether the government should terminate Macau Cable TV’s concession early and compensate the company, New Macau Association legislator Au Kam San said. But Macau Cable TV Ltd chief executive officer Angela Lam In Nie says to simply license the satellite public antenna service providers would not ensure they stop providing television signals without breaching copyright laws. In a motion published in the assembly’s website yesterday, Mr Au says Macau Cable TV’s exclusive concession has hurt the public interest. To end the contract would ensure that residents continue to receive television signals, he added. Many households face the prospect of a television blackout later this year after the Court of Second Instance gave the government 90 days to stop public antennas from illegally relaying cable television signals.

“I don’t think this is a good solution. Unless public antennas are ready to change this is meaningless. It is just too much noise making people confused,” Ms Lam told Business Daily. Public antennas would have to build up their networks legally and pay the television channel owners for the copyrights, she stressed. “Their costs would greatly increase. Would anybody want a licence for this business?” the executive asked.

“It was a better year [than in 2011], with better results,” chief executive Angela Lam told Business Daily. This is the third consecutive year the company has recorded a profit. In 2010, it posted a profit for the first time since it started operations

in July 2000. “It has helped to reduce our accumulated losses,” Ms Lam said. Macau Cable TV still had accumulated losses of 170.4 million patacas at the end of last year. “We hope to at least have similar results this year,” she said. The New Macau Association said on Tuesday the government had intimated that it would make public its proposal for solving the problem by the middle of next month. The authorities have already met with Macau Cable TV but the public antennas’ issue was not mentioned, said Ms Lam. “That’s the problem,” she said. “The number of homes serviced by Macau Cable TV has increased” the company wrote in its report. But the operator has not seen a significant growth in customers since the court decision, Ms Lam said. “People are still waiting to see what happens,” she said.

Profit doubles With a growing customer base, Macau Cable TV announced its profit more than doubled last year, helping the operator reduce its accumulated losses. Macau Cable TV’s profit reached 13.3 million patacas (US$1.7 million) according to the company’s annual report published in yesterday’s Official Gazette.

Macau Cable TV’s exclusive concession has hurt the public interest, says Au Kam San

Corporate

Business Awards to reach 50 nominations Deadline extended to August to allow late comers to join the biggest professional recognition program The deadline to present nominations for the Business Awards of Macau has been extended until August 20, the event’s organisers announced yesterday. “We have decided to allow more time for this first nomination process, since some companies and individuals acknowledged their interest later, and wanted the chance to be in the race,” said Paulo A. Azevedo, the event’s chairman. The Business Awards of Macau are Macau’s first ever large scale recognition programme for professionals and businesses of all sizes and from all sectors. “We aim to reach at least 50 nominations, of which around half will go on to the finals,” said Mr Azevedo. From these finalists, nine will win the top awards in their categories, judged by an independent panel of jury members invited from different sectors of Macau’s society. The event organisers, De Ficção Multimedia Projects, are being advised by an Honour Commission and an Advisory Board, whose membership will be announced publicly next week. “Our aim is to launch the most prestigious event in order to recognise the best of what companies, institutions and individuals have been doing for Macau’s development. The project is not ours, we are only the start-up. The main objective is to make this a Macau event, and that is why we have been inviting not only other media, but also around 30 well-known people from the business and academic sectors of Macau to be part of it,” Mr Azevedo concluded.

June 27, 2013 April 19, 2013

Macau

Jockey Club losses hit three-year high Racing revenue keeps falling but company remains hopeful of breaking even Vítor Quintã

vitorquinta@macaubusinessdaily.com

he Macau Jockey Club Co Ltd remained in the red for a ninth year after reporting a loss yesterday that was three-times higher than in 2011. The company ran at a loss of 57.7 million patacas (US$7.2 million) last year, up from 17.8 million patacas in 2011, according to the company’s financial report, published in yesterday’s edition of the Official Gazette. This loss is the company’s

highest in three years. The report provides no reasons for the loss. Nonetheless, the auditors’ board approved a motion praising the management “for the remarkable activities undertaken” last financial year. Government data show revenue from betting on horse races dropped to 356 million patacas last year, down by 19.1 percent from 2011. Jockey Club chief executive

Macau

Thomas Li Chu Kwan said in March that the start of construction works for the Light Rail Transit railway had reduced spectator numbers, particularly during the summer months. Mr Li said there were signs that revenue was recovering. Betting volume had improved in the first two months of this year. He said betting on each race was worth between 2 million patacas and 3 million patacas. The typical race card had seven or eight races. He said the club was hopeful it would break even, if turnover held up for the rest of the year. The Jockey Club has been in the red since 2004, accumulating losses of 3.78 billion patacas. The institution has been technically bankrupt since 2006 as its losses are higher than its share capital, set at 3 billion patacas. Mr Li said in March the club was selling land adjacent to the club to Hong Kong developer GAW Capital Partners in order to keep operating. The club holds an exclusive horse racing concession that expires in August 2015.

Shoppers more satisfied here than in Zhuhai But neighbouring city catching up fast, shows survey

Chinese lottery operator rebounds

hinese lottery concessionaire Sociedade de Lotarias Wing Hing Lda saw its profit bounce back in 2012, after a downturn in the previous year. Wing Hing’s results, published in yesterday’s Official Gazette, show that profit reached 1.7 million patacas (US$216,100), almost 12-times higher than in 2011. This increase is even more impressive considering that the yearly revenue of the Chinese lottery, known locally as Pa Ka Pio (sometimes Westernised in lottery outlet signs as ‘Pacapio’), has remained stable at around 6 million patacas since 2007. But not all is well with Wing Hing, director Louis Ng Chi Sing acknowledged in the report. The company is facing “various operational difficulties,” namely an increase in costs, he wrote. “The intensifying competition” for workers within the expanding gaming industry is leading to “a continuous shortage in the human resources market” and pushing up wages, Mr Ng added. The director pledged to “launch several optimisation plans, hoping to open new markets and attract more people from different walks of life”. Wing Hing, part of gaming tycoon Stanley Ho Hung Sun’s business interests, has a monopoly right to run a Chinese lottery in Macau. It has been signing one-year contracts consecutively since 2010. V.Q.

Greyhound racing less lucrative last year

Profits grew much faster than betting, indicating that Macauslot was luckier with its odds last year. The operator pocketed 15.3 percent of its revenue last year, up from 12.3 percent the year before. Macauslot’s management board, led by Louis Ng Chi Sing, said it has been updating its website. The company is also “looking for diversified sports betting products”. Macauslot announced its annual results on time for the first time in eight years. The company is part of the business empire built by Stanley Ho Hung Sun. It has a monopoly on sport betting until 2015.

reyhound racing concessionaire Macao (Yut Yuen) Canidrome Co Ltd saw its profit slump in 2012, as the amount of bets fell for a second year. The company’s results were published in yesterday’s Official Gazette. They show a 17.7 percent year-on-year drop to 85 million patacas (US$10.6 million) in profit. In the report, managing director Angela Leong On Kei said: “The difficulties our company is facing in its operations have increased over time.” Nonetheless, the Canidrome’s profit decreased less than its income. Greyhound gambling revenue shrank by 31 percent to 205 million patacas, official data show. The operator “maintains a cautious optimism towards the future and sets as a long-term goal to achieve more positive results,” Ms Leong wrote. The Canidrome facilities, which are turning 50 this year, will be improved and the company also “hopes to launch more diverse services”. The company controlled by the family of gaming tycoon Stanley Ho Hung Sun holds an exclusive greyhound racing concession here, which will expire in August 2015. Animal rights activists have called for the end of this activity, accusing the Canidrome of putting down the greyhounds that can no longer race.

V.Q.

The Jockey Club, run by the Ho family, has been technically bankrupt since 2006 (Photo: Manuel Cardoso)

Euro 2012 bets fuel Macauslot profit

port betting concessionaire Sociedade de Lotarias e Apostas Mútuas de Macau Lda (Macauslot) posted the highest profit in a decade last year, thanks to a boost from the 2012 Euro Cup. Macauslot’s results published in yesterday’s Official Gazette show a profit of 80.9 million patacas (US$10.1 million), up by 47.1

percent year-on-year. The main reason for the increase was a 15.5 percent growth to 418 million patacas in betting on football, thanks to the Euro 2012 football tournament held in June. Revenue from betting on basketball grew even faster, by 29.1 percent, to 111 million patacas, a new record high.

June 27, April 19, 2013 2013

Stephanie Lai

sw.lai@macaubusinessdaily.com

he city still has a competitive edge over the neighbouring Zhuhai city in both outfit shopping and dining experience, say Macau residents. But the gap is closing as Zhuhai improves its offer, shows a consumer satisfaction survey conducted by the Institute for Sustainable Development of the Macau University of Science and Technology. The annual survey, which interviewed 927 Macau residents from May 30 to June 8, showed respondents have scored 71.2 points in clothes shopping experience in Macau, while Zhuhai outlets got only 64 points. The scoring was done out of a scale of 100 points, where the major indicators include product quality, service quality and costeffectiveness. When it came to shopping for clothes in Zhuhai, interviewees gave the highest score to “product quality”, with 63.7 points, followed by “service quality”, with 63 points. Those were the

Kiang Wu gets less money this year

he private Kiang Wu Hospital has received less money from the government’s Health Bureau in the first quarter of 2013 than a year earlier. According to yesterday’s Official Gazette the hospital got 54.4 million patacas (US$6.8 million), down by 19 percent from the same period of 2012. The biggest chunk of that money, 24.2 million patacas, went for unspecified investment and development. A further 17.2 million patacas were spent on consultations for outpatients, treatment of inpatients and clinical analysis.

Watch retailer sales in Macau soar

telux Holdings International Ltd, a mid-range priced watches and optical retailer, saw its sales in Macau grow fast despite lower tourist spending. The company told the Hong Kong Stock Exchange yesterday its revenue here for the year ended March 31 reached HK$231.101 million (US$29.8 million), up by 29.6 percent. Stelux’s sales in Macau grew faster than its overall turnover, which rose by 9.5 percent to HK$3.6 billion, according to a filing. As a result, the city accounted for 6.3 percent of the firm’s revenue, up from 5.4 percent a year earlier. Just 19 of Stelux’s 400 stores are located in Macau.

Sands China’s CEO has contract renewed: sources Edward Tracy – chief executive of Macau casino operator Sands China Ltd – has had his contract renewed, said two sources in the United States with knowledge of the situation. According to a Hong Kong filing in May 2012, Mr Tracy’s previous contract was due to run until August 26 this year. Under it, he received a basic salary of US$1.2 million (9.59 million patacas) per year, with the possibility of an initial performance-related incentive payment equal to 75 percent of his 2011 salary. That filing also said that if his contract were further renewed in 2013-14, he would be entitled to incentive pay up to 100 percent of his 2013 salary. Mr Tracy was appointed to the top Macau job on July 27, 2011 after originally being hired as chief operating officer in July 2010. In a separate development, Kenneth Kay, chief financial officer of Sand China’s parent Las Vegas Sands Corp, is to leave the company with effect from July 31, LVS said in a U.S. filing. In late April LVS said in another U.S. filing that PricewaterhouseCoopers LLP was stepping down as its independent auditor once it had completed the firm’s first quarter 2013 review. LVS is currently under U.S. federal investigation in relation to its Macau operations for possible breaches of the U.S. Foreign Corrupt Practices Act. LVS said the departure of Mr Kay had “nothing to do” with the ongoing probe. M.G.

highest scores since the institution started the consumer satisfaction survey in 2007. Though the overall result was still higher here, consumers were less satisfied with “product quality” and “cost-effectiveness”, which saw annual declines of 1.1 percent and 1.7 percent respectively. “Macau is lacking mid-market range brands of high product quality in the market,” said the

The bureau gave the Kiang Wu Nursing College another 8 million patacas to refurbish the institution’s new facilities, located at the building of the Chinese-language newspaper Macao Daily News. The nursing college also received 8 million patacas from the Macau Foundation last quarter for the same purpose. Last year the hospital and its associated bodies received 433.9 million patacas from the Health Bureau, accounting for one-tenth of the government’s health budget. The private hospital is a forprofit subsidiary of the Kiang Wu Charitable Association. Macau has only one public hospital, the Hospital Conde S. Januário. Fernando Chui Sai On, now the chief executive of Macau, once managed the association. V.Q.

Most of the sales growth came from 10 watch retail stores under the ‘City Chain’ brand, even though it “was affected by declining mainland [Chinese] tourist spending,” the group said. On the other hand Stelux’s ‘Optical 88’ stores in Hong Kong and Macau “posted mediocre results as competition in the industry remained intense,” the filing adds. Nonetheless, the firm says it kept its leading position among optical retailers in Hong Kong and Macau, partially thanks to measures taken “to boost operational efficiencies” in the second half of the financial year. The year was “challenging,” Stelux acknowledged. “Slowing economic growth on the mainland and the lingering global downturn dampened retail sentiment affecting customer spending.” The company posted net profit of HK$232.9 million, down by 7 percent from the previous year. V.Q.

report accompanying the survey. “Consumers’ satisfaction will be lifted if such brands were to be introduced to the market.” Regarding dinning experience, Macau’s score reached 69.8 points, still ahead of neighbouring Zhuhai with 66.4 points. The satisfaction score for Macau’s dining experience has hit the highest in six years. The gap to Zhuhai was also the highest since 2007.

Edward Tracy

June 27, 2013 April 19, 2013

June 27, April 19, 2013 2013

Greater China

Wenzhou shadow banking unscathed China’s efforts to rein in shadow banking haven’t driving up costs for borrowers in Wenzhou. On June 20, as the nation’s banks demanded a record 30 percent to lend to each other for one day, small businesses in the export hub paid 23.42 percent for one-month loans from pawn shops, small lending companies and individuals, according to data from a local government-backed agency. That’s almost unchanged from this month’s average of 23.17 percent.

Taiwanese lawmakers to examine cross-strait pact Legislators in Taiwan will deliberate on services sector agreements signed last week between negotiators from China and Taiwan in the first detailed legislative review of a cross-strait cooperation pact. Lawmakers from Taiwan’s political parties emerged from closed-door negotiations with an understanding to review and vote on each provision in the June 21 agreement, the Central News Agency reported. The pact, which allows companies to take controlling stakes in joint ventures across the Taiwan strait, can’t be put in effect until the review is complete.

Nicaragua canal project ‘not a joke’ The Chinese businessman behind a US$40 billion plan to build a canal through Nicaragua has promised transparency and insisted his project is not a joke. Wang Jing (pictured), the owner of Hong Kong-based HKND Group, told reporters he had attracted global investors and that work should start in 2014. His project has generated a lot of scepticism from industry experts and criticism from environmentalists. Mr Wang hopes to build in less than six years a 286km waterway connecting the Caribbean with the Pacific.

Beijing paying more to sell bonds in HK China’s government had to pay more to sell bonds in Hong Kong yesterday than a year ago as HSBC Holdings Plc forecasts a weaker yuan, while JPMorgan Chase & Co. sees appreciation stalling. The Ministry of Finance offered three-year notes at as much as 2.75 percent as part of a 13 billion yuan (US$2.1 billion) issuance, up from 1.85 percent last year, Citic Securities Co. wrote in a June 24 report. The yuan will end the year at 6.16 per dollar, down 0.24 percent from Tuesday’s close in Shanghai, according to Paul Mackel, a strategist at HSBC, the top Dim Sum underwriter.

Greater China

U.S. must explain hacking: Leung

Mainland to boost solar expansion

The U.S. must address claims by Edward Snowden that Hong Kong was a target for U.S. cyberspying, even though the whistleblower has left the city, the South China Morning Post reported, citing chief executive Leung Chun Ying. Mr Leung said the government wrote to the U.S. officially a few days ago asking for a full explanation on whether it had hacked Hong Kong’s networks and invaded the citizens’ privacy as claimed by Mr Snowden, and haven’t received a response, the report said.

China asked local governments to study policies supporting the development of solar energy and to explore new markets for the technology. Authorities should look closely into the guidelines for adopting the use of solar power, starting with small projects before rolling them out on a bigger scale, Wu Xinxiong, the head of the country’s National Energy Administration, said. Mr Wu said solar is an important renewable energy source and an emerging industry in which China has a global competitive advantage.

ICBC calls for clearer policy signals

Taiwan’s companies return home as China costs rise

Markets calming down by central bank’s change in tone

Government expects to lure about US$5 billion in 2013

Jason Subler and Xiaowen Bi

Yu-Huay Sun and Sharon Chen

hina’s biggest bank was uncertain of how to respond to turmoil in money markets last week because there was no clear direction from policymakers on what they wanted to achieve, according to its top executive. Jiang Jianqing, chairman of Industrial and Commercial Bank of China Ltd, stopped short of directly criticising regulators for their handling of the stand-off over money market liquidity, which saw overnight borrowing rates soar and caused panic at some smaller banks. But Mr Jiang’s comments are the clearest indication yet of frustration among senior bankers over how the central bank handled the situation, with markets only calming down after the People’s Bank of China made public comments this week. “We hope that in future, policy expectations can be clearer. That would be help us understand the overall market situation better and more deeply. Those few days, even for us, we were genuinely a bit tense,” Mr Jiang told Reuters in his office in downtown Beijing. Mr Jiang said ICBC’s own liquidity situation was sound and that it was prepared to heed the call by the PBOC for big banks to lend to their smaller counterparts should they face shortterm cash crunches to help stabilise the market. But in order to play that role, he said, ICBC – the world’s biggest commercial bank by market value – and other big banks needed a clearer sign of where things were headed. He described a harried few days in the past week, when ICBC and other banks tried to assess what was happening in money markets as the central bank apparently decided to use the opportunity of a cash crunch to try to choke off funds flowing to speculative activities and the informal lending sector, sending rates to levels normally only seen during crises. “We too needed a few days to finally become clear on the risks, and to understand the underlying reasons for the market movements,” he said “So during that process we too were a bit nervous. If we’re going to be of help, we also need policy expectations to be even clearer and more stable,” Mr Jiang said, adding the market-wide situation was now improving.

Stretch risks ICBC’s chairman said the market squeeze, which was followed by a brief interruption in ATM use and some other services at ICBC and other

We hope that in future, policy expectations can be clearer … Those few days, even for us, we were genuinely a bit tense

or eight years, the former Taroko Textile Corp factory in Hsinchu County, Taiwan, has been empty, a victim of the migration of manufacturing to the mainland. Now, as China’s supply of cheap labour wanes, work is returning. ITEQ Corp, which makes materials electronics companies need to build circuit boards, is installing equipment as part of a NT$2 billion (US$66 million) refurbishment to begin production by the end of 2014, said Eric Liu, head of investor relations. It will be the company’s first new factory in Taiwan since 1998. ITEQ began moving work to Guangdong in southern China in 2002. “People went to China because the costs were lower,” said Mr Liu. “But labour costs there have been rising over the past few years. We’re returning to Taiwan also because of the good supply of skilled workers.” ITEQ, bicycle maker Giant Manufacturing Co and contact-lens maker Ginko International Co are among companies tapping Taiwan’s pool of engineering talent as China’s labour supply tightens and rising

costs force manufacturers to make more sophisticated products. They are being encouraged by Taiwanese President Ma Ying-jeou, who has introduced tax cuts and other incentives in an effort to boost wages as his popularity slumps. “The move to make it easier and attractive for overseas Taiwan companies, especially those with higher value added, is a positive step that will ensure the economy stays on a sustainable growth path,” said Tony Phoo, a Taipei-based economist at Standard Chartered Plc. Bringing factories home is “one way to kick-start the economy,” he said. Private investment will reach a record NT$2.3 trillion (US$76.4 billion) this year, up from NT$1.6 trillion in 2009, even as a global slowdown hurts exports, the Statistics Bureau estimates. Taiwan expects to lure about US$5 billion in 2013 from companies moving back. Last year, Taiwanese governmentapproved investment in mainland China fell to US$12.8 billion, from US$14.4 billion in 2011. Mr Ma has simplified investment procedures, pursued trade

At least 34 companies have filed investment proposals in the last seven months

agreements with the U.S. and Asia and relaxed immigration rules. He has also boosted ties with the mainland by allowing domestic banks to conduct business in yuan and agreeing to lower tariffs on items from auto parts to textiles. An agreement signed on June 21 on services has been questioned by opposition lawmakers. In the seven months since the president’s tax and labour measures took effect, at least 34 companies including camera-lens maker Largan Precision Co, and tire producer Kenda Rubber Industrial Co have filed proposals to invest NT$182.6 billion on the island. That’s more than triple the amount for 2011, the Economic Affairs Ministry said. “Times have changed from 2030 years ago when manufacturers left Taiwan,” said Wang Wen Yuen, deputy chairman of Taipei-based Chinese National

Federation of Industries. “With the worsening global economy, we want the competitive companies to come back.” Bloomberg News

KEY POINTS Labour costs rising in mainland China Companies tapping Taiwan’s pool of skilled workers Govt introducing tax cuts, incentives Private investment forecast at US$76.4 bln this year

Beijing starts probe on economic data

Jiang Jianqing, chairman, ICBC Ltd

On concerns fake invoices inflated numbers banks over the weekend that rattled some savers’ nerves, had driven home the idea that banks need to respond quickly to potential crises of confidence, especially in the age of social media. At one point last week, rumours spread on China’s Twitter-like service Weibo that ICBC had received a cash injection from the PBOC, which the bank denied. ICBC also issued a statement this week saying the issue with the ATMs was a technical glitch that had been fixed. The money market crunch had subsided somewhat yesterday, aided by the central bank saying on Tuesday that it had provided emergency cash to some banks and was prepared to do so in future as well. But it also reiterated banks needed to improve their cash management and lending practices. The key rate for week-long lending

to other banks fell back towards 7 percent, after some individual quotes late last week went as high as 28 percent. Economists expect conditions to ease further in the next week or two as some of the underlying factors behind the initial cash crunch – including quarterly tax and dividend payments – pass. Overall, the recent scare had been a good lesson for banks that they needed to be on better guard against possible financial risks as they expanded credit, Mr Jiang said. “This situation has pointed out to us banks that we might need to make some changes, make some adjustments to our balance sheets so that there’s a better match between liquidity, security and return,” he added. “We can’t stretch ourselves too thin for profits.” Reuters

hina said it will start an investigation to ensure the accuracy of data filed by companies as part of efforts to improve the reliability of statistics in the world’s second-largest economy. There is an urgent need to prevent fraud in data submission, National Bureau of Statistics head Ma Jiantang was cited by China Information News yesterday as having said on June 24. Those found submitting inaccurate information for major statistics may be “severely punished,” the newspaper, published by the bureau, reported without citing anyone. China’s government is struggling to win the trust of investors and economists

for its data, with exports and imports among the latest indicators to be scrutinised on concerns fake invoices inflated numbers. Li Keqiang, who became premier this year, said in 2007 that gross domestic product figures were “manmade” and “for reference only,” according to a WikiLeaks cable published in 2010. “The problem is pretty pervasive and rather systemic,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong. “I don’t expect a dramatic change in terms of data quality. There will be improvement but it will take time.” Mr Ma, in an open letter

posted on the bureau’s website yesterday, asked companies to file data “truthfully and completely”. Some local governments were found to have intervened in companies’ filing process, and the bureau will increase penalties on those who commit fraud in statistics submission, the letter said. The statistics bureau has been improving data methodology and collection to provide more reliable figures for policy makers. In February 2012, it started using a unified system to directly collect output, retail sales and investment data from 700,000 companies to boost accuracy and reduce manipulation by local authorities. An unprecedented run of

better-than-forecast export growth published by the General Administration of Customs earlier this year spurred scepticism of the data at banks including Goldman Sachs Group Inc. Export gains last month were at a 10-month low and imports dropped after a crackdown on fake trade invoices used to disguise money inflows. The statistics bureau

exposed inflated data on industrial output in Henglan town in southern Guangdong province, according to a June 14 report by the state-run Xinhua News Agency. The bureau said in March 2012 that officials in Hejin city in northern Shanxi province gave companies “seriously untrue” numbers to submit for 2011. Bloomberg News

10 10

June 27, 2013 April 19, 2013

11 11

June 27, April 19, 2013 2013

Asia

Woori units to be split in fourth sale attempt

A failure in releasing the third arrow could turn Japan’s honeymoon into divorce

S. Korean government vows speedy sales Joyce Lee

Marina Bay Sands’ Q2 also downgraded by smog Union Gaming Research is lowering its second quarter revenue estimates for Las Vegas Sands Corp’s Marina Bay Sands resort in Singapore by four percent, because of the heavy smoke polluting the city-state’s air last week. Union Gaming earlier reduced by the same percentage quarterly revenue estimates for Marina Bay Sands’ market rival Resorts World Sentosa, run by Genting Singapore Plc. The environmental disaster seen in Singapore – not experienced on such a scale in the region since 1997-98 – has been blamed on forest clearance by burning on the Indonesian island of Sumatra. Union Gaming said in its latest note: “Based on our belief that play levels are weaker than usual across all business segments (and perhaps particularly soft at MBS’ non-gaming attractions), we are lowering our 2Q13 revenue and EBITDA [earnings before interest, taxation, depreciation and amortisation] estimates by approximately four percent each.” The research house adds: “This generally assumes that revenues are about half of their normal levels for a period of about one week. Our new 2Q13 revenue estimate is US$859.8 million (from US$894.4 million) and our EBITDA estimate goes to US$420.4 million (from US$438.3 million). We are not making any changes to our 3Q13, 4Q13 or 2014 estimates.” Yesterday more than 3,000 Indonesian soldiers, marines and air force officers were said to be fighting the forest blazes in Sumatra. They have been blamed for heavy haze over neighbouring Malaysia as well as Singapore. Indonesia’s President Susilo Bambang Yudhoyono has apologised to his neighbours and pledged to work on solving the issue. M.G.

Toshiba to restructure TV business Toshiba Corp will present a restructuring plan in July designed to turn around television operations that have lost US$1 billion in the past two years. The Japanese maker of flash-memory chips, elevators and reactors plans to make the unit profitable in the second half of this business year ending March 31, Hisao Tanaka, who became president on Tuesday, told reporters. Toshiba and Sony Corp are among Japanese companies that have been reorganising businesses for years, trying to revive TV operations hurt by falling prices and a strong yen. At the same time, they have tried to speed up development on new products to lure back customers from industry leaders Apple Inc. and Samsung Electronics Co. The maker of Regza TVs needs to offer more value-added models, while cutting fixed costs and inventories, Mr Tanaka said, adding details of the plan have yet to be decided. “Cutting fixed costs by just 10 billion yen (US$103 million) isn’t enough,” he said. The company, whose sales shrank 24 percent in the past five years, plans to set up a new division to house patents held by various companies within the Toshiba group, Mr Tanaka said. These previously tended to be used separately within each division, limiting the potential for sharing innovation, he added. “We want to widen our scope of marketing” by tailoring Toshiba solutions for the different technology requirements each industry has, said Mr Tanaka. The company ended domestic assembly of TVs in the year ended March 2012 and said in July that it consolidated quality and production control for digital products outside Japan. The company’s TV division posted a loss of 50 billion yen in each of the past two years ended March 31. Reuters

yen yesterday, and the Nikkei 225 declined 1 percent to 12,834. “If the Nikkei ends this year between 17,000 and 18,000, it’s a sign that Abenomics is successful,” said Mr Miyauchi, who headed governmental advisory panels on regulatory reform from 1996 to 2006. Mr Abe on June 5 vowed to deregulate the energy, health and infrastructure industries and double foreign investment to 35 trillion yen (US$357 billion) by 2020. “I want the government to hammer out policies that can get rid of obstacles for businesses and energize the private sector, not just provide them with subsidies,” Mr Miyauchi said. Bloomberg News

Reuters

Japan firm in record foreign takeover Investors not impressed by US$21.6 bln Sprint takeover

apan’s SoftBank Corp will become one of the world’s largest mobile operators after shareholders in Sprint Nextel Corp backed its revised bid for a 78 percent stake in the business. SoftBank will pay US$21.6 billion for the stake in Sprint, which is the U.S.’s third-largest phone carrier.

Abenomics success hangs on deregulation: Orix

Woori Bank accounted for 81 percent of Woori Finance’s profit

Sales notices would be posted starting August with deals expected in the first half of next year, the FSC said. In the final stage, the Korea Deposit Insurance Corp will then attempt to sell a controlling stake in Woori Bank Co Ltd, which accounted for 81 percent of Woori Finance’s net

KEY POINTS Govt announces 4th attempt to recoup bailout money Stake worth some US$3.9 bln Multiple potential bidders interested in units – official Bidders expected to be predominantly local, analysts say

profit in 2012. It will also sell the remaining affiliates including a credit card company. The government hopes to close these deals by the end of next year. Shares in Woori Finance Holdings rose 5.37 percent after the announcement yesterday, while brokerage unit Woori Investment and Securities gained 2.90 percent. Nam Sang-koo, chairman of the Public Funds Oversight Committee overseeing the government recouping of taxpayer funds, said the deal structure was designed to widen the field of potential bidders by bypassing prohibitive rules on financial holding firm ownership. Multiple potential bidders have expressed interest in the units, he added but declined to give names. Although the sales will be open to foreign investors, analysts said bidders are expected to be predominantly local, adding that local players such as KB Financial Group Inc. are more likely to be favoured by regulators. Reuters

In its revised bid the Japanese firm increased its offer of cash payments to Sprint shareholders. The deal is the largest overseas acquisition by a Japanese firm. “The transaction with SoftBank should enhance Sprint’s long-term value and competitive position by creating a company with greater financial flexibility,” Dan Hesse, chief executive of Sprint said in a statement. According to the deal, Sprint shareholders will have the option to receive either US$7.65 in cash or one New Sprint common stock for each share of Sprint common stock they hold. The total cash consideration available to Sprint stockholders is US$16.6 billion. U.S. satellite TV operator Dish Network Corp had also tabled a rival bid of US$25.5 billion for Sprint. However, its offer – higher than that of SoftBank – would have increased Sprint’s debt burden and was seen as more risky. After receiving an improved bid from SoftBank, Sprint had given Dish till June 18 to submit an

improved offer. But last week Dish said it would not be submitting a new bid, claiming that Sprint’s decision to cut short the time for Dish’s due diligence meant it was “impracticable” for it to act further. The news failed to impress investors yesterday. SoftBank, whose shares have almost doubled since the deal was reported in October, dropped 0.18 percent to close at 5,420 yen (US$55.6) in Tokyo trading. Sprint shares initially jumped 1.9 percent to US$6.99 on the news before finishing 0.29 percent higher in New York. The merger’s completion still requires approval from the U.S. Federal Communications Commission (FCC) but Sprint said in a statement the two firms expect it to be done in early July. “We are grateful that many Sprint shareholders supported our plan,” SoftBank said after the vote. “From now on we plan to complete procedures of the deal swiftly on approval by the FCC.” AFP

rime Minister Shinzo Abe’s success in rebuilding Japan’s economy will depend on his ability to remove regulatory hurdles, the so-called “third arrow” of Abenomics, Orix Corp’s chief executive said. “Abenomics has been good so far, and I would give almost full marks to his monetary and fiscal policies,” Yoshihiko Miyauchi, who heads the Japanese financial services firm, said in an interview. Still, “a failure in releasing the third arrow could turn Japan’s honeymoon into divorce.” Under the new prime minister, Japan is rolling out unprecedented monetary easing and spending US$105 billion to reverse more than 10 years of deflationary malaise, measures that weakened the yen

and made Japan the best-performing major stock market this year. The economic revival hinges on the deregulation of labour, medical services, education and agriculture, said Mr Miyauchi. The prime minister said this month that autumn would be the soonest his government presents a legislative growth strategy to accompany monetary and fiscal stimulus – the first two arrows of his policies dubbed Abenomics. Japan’s Nikkei 225 Stock Average has gained 23 percent this year, even after slumping since late May. Shares of Orix, which offers services ranging from leasing and insurance to real estate and private equity, have jumped 22 percent. The stock closed 0.2 percent lower at 1,180

merging market economies may be pushed to tighten monetary policy to ward off capital outflows sparked by the U.S. Federal Reserve’s plans to start winding down its massive stimulus programme, South Korea’s central bank chief said yesterday. “Emerging market economies with open capital markets will be particularly vulnerable to such negative impacts on growth of global financial uncertainty,” Bank of Korea Governor Kim Choongsoo said at an event in Seoul. The comments came as South Korean markets recently plummeted to year-lows after the Fed signalled its plans to taper back its bond-buying programme amid signs that the U.S. economy was improving. The Korean won lost more than 2 percent against the dollar last week alone after the Fed’s announcement, spurring local authorities to intervene in the market to slow the won’s fall. Seoul shares also fell 3.5 percent on a weekly basis. Mr Kim added that global economic growth may be impeded by uncertainties stemming from the withdrawal of monetary stimulus and rising global interest rates. The Bank of Korea lowered interest rates in a surprise move in May in its third rate cut since it started its easing cycle last July, and most analysts now see the central bank on hold until year-end.

Yoshihiko Miyauchi, chief executive, Orix Corp outh Korea said it would put 14 units of Woori Finance Holdings up for sale by the end of next year, stressing that its fourth attempt to privatise the country’s largest financial holding company would be speedy and buyer-friendly. As previous attempts by the government to offload its entire 57 percent stake, which is worth some US$3.9 billion, have failed amid of a dearth of bidders, the new Park Geun-hye administration has decided to offer the company up in three batches. South Korea has injected 12.8 trillion won (US$11 billion) of taxpayers’ funds to bail out Woori since the Asian financial crisis in the late 1990s. The government has recouped a little less than half of that as of April. “This privatisation plan can return [Woori Finance Holdings Co Ltd] to the market speedily, in a way the market wants,” Financial Services Commission chairman Shin Je-yoon, the country’s top regulator, told a news conference. The first stage of the planned sale would be putting the government’s 57 percent stakes in Woori’s regional affiliates Kyongnam Bank and Kwangju Bank up on the block. Those stakes are held through state-run Korea Deposit Insurance Corp. Sale notices would be posted in July, with the deals slated to close in the first half of 2014. Next, Woori Finance would attempt to sell its controlling stakes in Woori Investment and Securities Co Ltd and five other units, including an insurance joint venture with Aviva Plc and an asset manager. A final decision on whether to sell will be made next month after a new chairman recently took the helm at Woori Finance. The units could be bundled or sold individually depending on demand.

Emerging economies may need to tighten policy, says Kim

June 27, 2013

Markets

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

Hang Seng Index NAME

PRICE

DAY %

VOLUME

32.35

1.569859

48497736

CHINA UNICOM HON

ALUMINUM CORP-H

2.36

2.164502

18272708

CITIC PACIFIC

BANK OF CHINA-H

3.13

3.30033

543213164

BANK OF COMMUN-H

5.23

3.155819

80915644

27.55

2.416357

3765181

BELLE INTERNATIO

10.4

4.522613

23112712

BOC HONG KONG HO

23.5

1.731602

21807136

CATHAY PAC AIR

13.06

-0.4573171

7717806

CHEUNG KONG

102.7

1.582591

8096686

CHINA COAL ENE-H

4.19

0.2392344

50208000

CHINA CONST BA-H

5.41

6.496063

521296887

AIA GROUP LTD

BANK EAST ASIA

CHINA LIFE INS-H

1.580135

54099357

CHINA MERCHANT

22.65

5.841121

6860346

CHINA MOBILE

77.25

1.980198

CHINA OVERSEAS

19.06

2.804746

CHINA PETROLEU-H

5.24

1.550388

164251218

CHINA RES ENTERP

23.15

2.433628

4972322

NAME

PRICE

DAY %

VOLUME

10.14

3.575077

27312189

8.36

1.333333

8183385

NAME

PRICE

DAY %

66.7

0.6792453

2762879

SANDS CHINA LTD

36.05

3.741007

21734946

SINO LAND CO

10.54

2.729045

8755051

SUN HUNG KAI PRO

98.75

2.331606

7244001

POWER ASSETS HOL

VOLUME

CLP HLDGS LTD

62.05

1.058632

3904069

CNOOC LTD

12.52

1.954397

60599928

9.76

4.833512

9703400

SWIRE PACIFIC-A

92.4

1.482702

1752985

ESPRIT HLDGS

11.46

1.595745

3794203

TENCENT HOLDINGS

290.4

2.470007

5154973

HANG LUNG PROPER

26.55

1.529637

11038135

TINGYI HLDG CO

19.66

5.021368

7776900

HANG SENG BK

113.9

2.244165

2131127

WANT WANT CHINA

10.44

3.984064

35735871

WHARF HLDG

64.95

1.802508

10982079

COSCO PAC LTD

HENDERSON LAND D

46.3

2.320442

4323773

HENGAN INTL

78.6

0.1912046

3248421

HONG KG CHINA GS

18.74

0.6444683

15939368

HONG KONG EXCHNG

116.5

2.103418

6918966

HSBC HLDGS PLC

80.5

1.003764

21278368

24808706

HUTCHISON WHAMPO

80.2

1.390645

9078697

45435453

IND & COMM BK-H

4.7

6.818182

786459113

LI & FUNG LTD

10.48

0.5758157

27390654

MTR CORP

27.85

1.642336

4029470

CHINA RES LAND

19.36

1.467505

20676388

NEW WORLD DEV

10.48

2.745098

20032746

CHINA RES POWER

17.28

2.857143

9483630

PETROCHINA CO-H

7.96

1.272265

95065697

CHINA SHENHUA-H

2.088167

22479557

PING AN INSURA-H

51.15

1.791045

27534564

MOVERS

20339.94

LOW

19510.76

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.14

4.318937

335707101

AIR CHINA LTD-H

5.25

3.346457

25627400

ALUMINUM CORP-H

2.36

2.164502

18272708

ANHUI CONCH-H

20.55

2.493766

18589600

BANK OF CHINA-H

3.13

3.30033

543213164

BANK OF COMMUN-H

5.23

3.155819

(L) 18710.58984 24-June

VOLUME

1.93133

27261830

CHINA PETROLEU-H

5.24

1.550388

164251218

CHINA RAIL CN-H

6.46

2.377179

13803000

ZOOMLION HEAVY-H

CHINA RAIL GR-H

3.39

1.497006

21469752

ZTE CORP-H

CHINA SHENHUA-H

2.088167

22479557

80915644

CHINA TELECOM-H

3.69

2.785515

66728098

6.626506

10636378

DONGFENG MOTOR-H

10.56

0.9560229

17555350

4.081633

113891158

GUANGZHOU AUTO-H

7.23

3.730273

18707364

CHINA COAL ENE-H

4.19

0.2392344

50208000

HUANENG POWER-H

7.19

6.047198

42251400

CHINA COM CONS-H

6.03

1.858108

28781029

IND & COMM BK-H

4.7

6.818182

786459113

CHINA CONST BA-H

5.41

6.496063

521296887

JIANGXI COPPER-H

13.12

0.7680492

15295200

CHINA COSCO HO-H

3.22

1.898734

10516771

PETROCHINA CO-H

7.96

1.272265

95065697

1.580135

54099357

PICC PROPERTY &

8.56

1.062574

12990126

CHINA LONGYUAN-H

7.48

3.888889

12834733

PING AN INSURA-H

51.15

1.791045

27534564

CHINA MERCH BK-H

12.98

4.508857

45790697

SHANDONG WEIG-H

8.86

-1.22631

19956900

CHINA MINSHENG-H

7.9

6.325707

187020603

CHINA NATL BDG-H

6.93

1.911765

39661680

TSINGTAO BREW-H

14.02

0.286123

8347525

WEICHAI POWER-H

CHINA OILFIELD-H

SINOPHARM-H

NAME

PRICE

DAY %

VOLUME

5.91

-0.3372681

30513523

ZIJIN MINING-H

1.43

1.41844

106491365

5.4

3.448276

12184669

12.46

5.952381

5630148

Min 35.4

21.0

18.05

20.8

35.3

Last 36.05

Max 18.46

average 18.137

ENERGY

PRICE

DAY %

115.1699982

96.70999908

318.0399895

238.9999866

865.25

-0.288101412

-4.812981298

983.5

816

3.665

0.493556348

2.891633914

4.499000072

3.329999924

285.99

0.05247691

-4.723989739

322.0499992

259.5000029

Gold Spot $/Oz

1232.59

-4.0689

-25.9466

1796.08

1230.78

Silver Spot $/Oz

18.6003

-5.8927

-38.2255

35.365

18.54

9164.64

Platinum Spot $/Oz

1322.75

-2.2018

-12.848

1742.8

1318.65

8692.95

Palladium Spot $/Oz

650.28

-3.4978

-7.0577

786.5

553.75

1784

0.705616709

-13.94114809

2200.199951

1762.5 6602

1918430

(L) 8640.85

BRENT CRUDE FUTR Aug13 GASOLINE RBOB FUT Jul13 GAS OIL FUT (ICE) Aug13 NATURAL GAS FUTR Jul13

9180

NY Harb ULSD Fut Jul13 METALS

LME ALUMINUM 3MO ($) LME COPPER 3MO ($)

8690

24-June

2764350

17.90

Max 21.3

average 20.779

Min 20.6

Last 20.95

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

DAY %

YTD %

(H) 52W

(L) 52W

0.9303 1.5381 0.9393 1.3056 97.56 7.99 7.7579 6.1476 59.875 31.11 1.2712 30.106 43.425 9961 90.758 1.22639 0.84887 8.0281 10.4309 127.37 1.03

0.4427 -0.4337 -0.543 -0.5484 -0.082 -0.0188 -0.0258 -0.0439 -0.334 -0.4822 -0.1023 0.0399 -0.2073 -0.4116 -0.519 0.0016 0.1096 0.4721 0.5445 0.4711 0

-10.3585 -4.9147 -2.5444 -1.0159 -11.7466 -0.0851 -0.0941 1.3501 -8.1503 -1.7036 -3.9176 -3.5641 -5.5728 -1.6866 -1.5767 -1.5419 -3.9405 2.3592 0.9539 -10.8346 -0.0097

1.0625 1.6381 0.9972 1.3711 103.74 8.0111 7.7664 6.3964 59.98 32 1.2824 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 79.378 1.20054 0.77553 7.7018 9.6245 94.12 1.0289

6795

1.874062969

-14.32354054

8422

1.343201754

-11.12980769

2230

1745

13930

2.163549688

-18.34701055

18920

13525

15.655

0.159948816

1.622849724

16.47500038

14.60000038

544.75

0.045913682

-9.170487703

665

512

687.5

0.364963504

-14.80793061

905.75

673.75

SOYBEAN FUTURE Nov13

1269

-0.743058271

-2.590673575

1409.75

1186.5

COFFEE 'C' FUTURE Sep13

120.1

-0.373289092

-21.22007215

203.8499908

117.0999985

NAME

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

16.47999954

ARISTOCRAT LEISU

4.2

3.960396

33.33333

4.49

2.29

1070443

CROWN LTD

4.347826

12.46485

13.75

8.28

1487914

3MO ($)

Dec13

WHEAT FUTURE(CBT) Sep13

Macau Related Stocks VOLUME CRNCY

PRICE

DAY %

Volume

PRICE

DAY %

Volume

CHINA YANGTZE-A

6.72

-0.1485884

25330634

POLY REAL ESTA-A

9.31

0.1075269

75636239

16855844

CHONGQING CHAN-A

9.49

4.861878

40976163

QINGDAO HAIER-A

10.98

0.0911577

14165884

-2.173913

23088907

CITIC SECURITI-A

9.99

-0.1

88136147

QINGHAI SALT-A

16.69

-0.7138608

6586813

AMAX HOLDINGS LT

1.2

0.8403361

-14.28571

1.72

0.75

281475

12.7

-1.167315

29689497

CSR CORP LTD -A

3.73

-0.5333333

42552928

SAIC MOTOR-A

13.4

0.2994012

28444937

BOC HONG KONG HO

23.5

1.731602

-2.489628

22.6

21807136

7.5

-0.3984064

40193422

DAQIN RAILWAY -A

5.81

-1.525424

46720711

SANAN OPTOELEC-A

19.97

6.848582

25315571

CENTURY LEGEND

0.32

-7.246377

20.75472

0.42

0.22

60000

DATANG INTL PO-A

5.21

5.252525

27271493

SANY HEAVY INDUS

7.49

-0.66313

31334296

CHEUK NANG HLDGS

5.26

-0.754717

-12.18697

6.74

2.89

15000

9.9

1.64271

35268669

SHANG PHARM -A

10.54

1.934236

12531721

CHINA OVERSEAS

19.06

2.804746

-17.48918

25.6

16.661

45435453

CHINESE ESTATES

13.46

4.179567

10.96987

14.12

8.031

121500

CHOW TAI FOOK JE

8.01

3.221649

-35.61093

13.4

7.44

13962400

EMPEROR ENTERTAI

2.65

1.145038

40.21164

3.07

1.33

570000

FUTURE BRIGHT

2.27

3.652968

87.28969

2.76

0.904

3878000

PRICE

DAY %

VOLUME

2.52

0.3984064

156376937

AIR CHINA LTD-A

4.16

-0.952381

ALUMINUM CORP-A

3.15

ANHUI CONCH-A BANK OF BEIJIN-A

NAME

BANK OF CHINA-A

2.58

0.3891051

45716554

BANK OF COMMUN-A

3.99

-1.724138

114501622

BAOSHAN IRON & S

3.92

-2.729529

33360623

GD MIDEA HOLDI-A

12.8

13015220

SHANG PUDONG-A

7.77

-0.3846154

130788936

BEIJING SL -A

58.6

9.145092

5056378

GD POWER DEVEL-A

2.26

-0.877193

58969193

SHANGHAI ELECT-A

3.37

1.506024

3806484

21.68

0.6032483

9239433

GEMDALE CORP-A

6.25

4.690117

80688823

SHANXI LU'AN -A

12.05

-2.42915

19992687

30.7

2.46996

11649521

GF SECURITIES-A

11.11

0.2707581

31706708

SHENZEN OVERSE-A

4.95

0.814664

40782402

CHINA AVIC ELE-A

21.49

0.5615349

7434327

GREE ELECTRIC

24.6

3.015075

22920538

SICHUAN KELUN-A

55.99

1.192843

1782591

CHINA CITIC BK-A

3.5

-1.685393

35042956

GUANGHUI ENERG-A

12.7

4.098361

47340829

SUNING COMMERC-A

4.96

-0.8

CHINA CNR CORP-A

3.95

-0.5037783

38878596

HAITONG SECURI-A

9.21

-1.812367

115631931

TASLY PHARMAC-A

39.61

CHINA COAL ENE-A

4.94

-2.371542

16424843

HANGZHOU HIKVI-A

36.02

4.134143

10305633

TSINGTAO BREW-A

CHINA CONST BA-A

4.01

0.5012531

56156594

HENAN SHUAN-A

38.51

1.743725

5376658

CHINA COSCO HO-A

3.02

-0.6578947

7944745

HONG YUAN SEC-A

8.63

-0.8045977

CHINA EAST AIR-A

2.51

-1.568627

14477646

HUATAI SECURIT-A

7.81

-0.3826531

CHINA EVERBRIG-A

2.72

-1.449275

120964407

HUAXIA BANK CO

8.58 3.74 13.91

EVERBRIG SEC -A

SUGAR #11 (WORLD) Oct13

17.28

COTTON NO.2 FUTR Dec13

84.58

-0.346020761 -0.435550324

-13.85842473 7.416814834

22.8599987 89.55999756

World Stock Markets - Indices NAME

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

14760.31

0.6872648

12.63852

15542.4

12450.17

NASDAQ COMPOSITE INDEX

3347.888

0.8170125

10.87507

3532.038

2810.8

38.5

1.717305

26.85338

44.95

16.98

18660921

47141270

FTSE 100 INDEX

6149.41

0.7784448

4.265992

6875.62

5436.27

HANG SENG BK

113.9

2.244165

-4.043805

132.8

102.9

2131127

4.374177

10574155

DAX INDEX

7904.35

1.191223

3.835326

8557.86

6096.94

HOPEWELL HLDGS

25.15

2.235772

-24.3609

35.3

19.839

2193700

36.41

-0.2738976

3149430

HSBC HLDGS PLC

80.5

1.003764

-0.9840136

90.7

61.1

21278368

WANHUA CHEMIC-A

16.33

-1.862981

13466617

HUTCHISON TELE H

4.07

-3.554502

14.32584

4.66

2.98

4587000

62095462

WEICHAI POWER-A

17.73

1.896552

9657923

LUK FOOK HLDGS I

18.7

-23.36065

30.05

15.3

4121000

35213281

WULIANGYE YIBIN

19.69

-0.5555556

20633780

MELCO INTL DEVEL

14.66

2.661064

62.7081

18.18

5.12

10922023

-1.265823

39230665

YANZHOU COAL-A

9.51

-1.857585

4866486

0.5106154

162884487

YUNNAN BAIYAO-A

85.06

3.479319

-0.143575

123876577

ZHONGJIN GOLD

9.38

-1.366982

14477990

GALAXY ENTERTAIN

NIKKEI 225

12834.01

-1.043461

23.46116

15942.6

8328.019531

HANG SENG INDEX

20338.55

2.431692

-10.2325

23944.74

18710.58984

CSI 300 INDEX

2168.297

0.1328148

-14.05714

2791.303

2023.171

9445546

TAIWAN TAIEX INDEX

7784.8

1.586407

1.107862

8439.15

6922.73

MGM CHINA HOLDIN

20.1

4.253112

51.37504

21.6

9.509

3209577

KOSPI INDEX

1783.45

0.1583709

-10.69578

2042.48

1758.99

MIDLAND HOLDINGS

2.88

1.766784

-22.16216

2.77

1976000

S&P/ASX 200 INDEX

4731.715

1.627054

1.780287

5249.6

4002.3

NEPTUNE GROUP

0.167

4.375

9.868425

0.23

0.084

16750000

4603.384

4.175545

6.641593

5251.296

3849.063

NEW WORLD DEV

10.48

2.745098

-12.81198

15.12

8.66

20032746

FTSE Bursa Malaysia KLCI

1741.92

0.768234

3.136274

1826.22

1590.67

SANDS CHINA LTD

36.05

3.741007

6.185565

43.7

20.65

21734946

SHUN HO RESOURCE

1.38

-1.428571

-1.42857

1.67

1.03

130000

-0.8152174

-12.88783

4.65

2.56

4895250 7867000

9.71

1.675393

14397707

IND & COMM BK-A

CHINA LIFE INS-A

13.42

-2.328967

20054516

INDUSTRIAL BAN-A

CHINA MERCH BK-A

10.66

-2.380952

93892918

INNER MONG BAO-A

21.5

1.128881

28562007

ZIJIN MINING-A

2.39

-2.845528

64530798

CHINA MERCHANT-A

10.15

0.1974334

26989087

INNER MONG YIL-A

32.14

-0.4337051

19163962

ZOOMLION HEAVY-A

5.35

0.1872659

61516768

CHINA MERCHANT-A

22.26

2.486188

18345377

INNER MONGOLIA-A

3.93

-0.7575758

31520550

ZTE CORP-A

12.91

3.445513

83913410

CHINA MINSHENG-A

8.3

-1.658768

302426417

JIANGSU HENGRU-A

26.19

1.669255

6767571

NZX ALL INDEX

941.075

1.766993

6.691439

998.487

755.149

SHUN TAK HOLDING

3.65

JIANGSU YANGHE-A

56.63

-0.8925446

4262398

4.765872

1.640721

4571.4

3399.31

3.901034

22.382

12.995

10407326

3759.67

3.479237

-1.601972

18.44

15.97

PHILIPPINES ALL SHARE IX

SJM HOLDINGS LTD

JIANGXI COPPER-A

SMARTONE TELECOM

12.74

0.7911392

-9.517045

17.38

12.3

1928900

WYNN MACAU LTD

20.95

5.170683

26.5

14.62

11593041

CHINA INTL MAR-A

CHINA NATIONAL-A

9.69

0.8324662

32381749

CHINA OILFIELD-A

14.33

-1.035912

5004562

CHINA PACIFIC-A

15.47

-2.765556

46193509

JINDUICHENG -A

8.02

-0.8652658

8039747

CHINA PETROLEU-A

4.1

-2.147971

59105978

KANGMEI PHARMA-A

19.6

9.192201

46470305

CHINA RAILWAY-A

4.11

-0.2427184

26325431

KWEICHOW MOUTA-A

188.72

-0.5899705

3290348

CHINA RAILWAY-A

2.39

-0.8298755

30437560

LUZHOU LAOJIAO-A

23.7

8062382

CHINA RESOURCE-A

29.6

6437890

METALLURGICAL-A

1.6

-1.234568

50586722

CHINA SHENHUA-A

16.99

-3.025114

16899233

NARI TECHNOLOG-A

15.28

8.215297

26395149

CHINA SHIPBUIL-A

4.52

59982923

NINGBO PORT CO-A

2.02

-0.9803922

17883914

CHINA SOUTHERN-A

2.78

-1.41844

30730287

OFFSHORE OIL-A

6.76

0.7451565

32219990

CHINA STATE -A

3.1

-0.6410256

86922460

PETROCHINA CO-A

7.31

-1.082544

23174892

CHINA UNITED-A

3.08

-2.222222

180635791

PING AN BANK-A

9.76

-2.204409

101715108

CHINA VANKE CO-A

8.99

1.581921

143592186

PING AN INSURA-A

34.52

-0.2888504

37116892

MOVERS 137

145

18 2310

INDEX 2168.297 HIGH

2308.07

LOW

2043.82

PRICE DAY %

Volume

NAME

(L) 2023.171

2040

24-June

26-June

PRICE DAY %

Volume

FORMOSA PLASTIC

68.8

0.8797654

7657690

TAIWAN MOBILE CO

111 -0.4484305

7093332

FOXCONN TECHNOLO

72.2

2.702703

5229281

TPK HOLDING CO L

499

2.254098

8656447

38.65

1.978892

25854304

TSMC

101.5

0.4950495

54861189

HON HAI PRECISIO

3.988604

56917136

UNI-PRESIDENT

HOTAI MOTOR CO

301

6.927176

654417

ACER INC

21.2

1.193317

8562800

ADVANCED SEMICON

24.6

1.234568

13714790

35.75

2.288984

7807877

FUBON FINANCIAL

ASUSTEK COMPUTER

288

0.3484321

7437943

AU OPTRONICS COR

10.2

0.990099

103872513

ASIA CEMENT CORP

CATCHER TECH

PRICE DAY %

Volume

NAME

UNITED MICROELEC

58.4

2.276708

12114569

13.55

6.692913

143036877

152.5

5.902778

9376078

245.5

0.8213552

10507084

WISTRON CORP

29.6

2.068966

12767333

CATHAY FINANCIAL

40.1

0.25

33249816

HUA NAN FINANCIA

16.5

1.851852

11449937

YUANTA FINANCIAL

15.1

36498613

CHANG HWA BANK

16.4

1.863354

15203681

LARGAN PRECISION

920 -0.1085776

1718841

YULON MOTOR CO

45.3

1.116071

3601298

CHENG SHIN RUBBE

1.830664

8406386

LITE-ON TECHNOLO

14.55

-1.020408

129210515

8.2

1.863354

61069384

CHINA STEEL CORP

23.8

3.030303

26568386

CHINATRUST FINAN

17.9

0.5617978

CHUNGHWA TELECOM

95.3 -0.2094241

CHIMEI INNOLUX C CHINA DEVELOPMEN

HTC CORP

49.15

0.101833

5275248

MEDIATEK INC

328

4.458599

13450927

MEGA FINANCIAL H

22.1

32143981

NAN YA PLASTICS

58.5

12223336

54227326

PRESIDENT CHAIN

195

1.036269

2228342

13156071

QUANTA COMPUTER

2.773246

7539655

COMPAL ELECTRON

16.65

1.834862

22897027

SILICONWARE PREC

2.777778

24450635

DELTA ELECT INC

132.5

5168827

SINOPAC FINANCIA

13.7

1.481481

22956435

FAR EASTERN NEW

31.3 -0.3184713

11799304

SYNNEX TECH INTL

38.3

0.6570302

10508456

FAR EASTONE TELE

76.3

12202810

TAIWAN CEMENT

34.8

3.111111

17522324

16.35

1.23839

13636130

70.6

1.582734

6652474

26.35

2.529183

1937630

FIRST FINANCIAL

1.59787

17.35

1.166181

17828254

FORMOSA CHEM & F

67.4

0.7473842

6843303

TAIWAN FERTILIZE

FORMOSA PETROCHE

73.2

6.086957

5245122

TAIWAN GLASS IND

TAIWAN COOPERATI

HSBC Dragon 300 Index Singapor

587.4

1.26

-5.42

STOCK EXCH OF THAI INDEX

1417.69

2.387641

1.85066

1649.77

1145.79

HO CHI MINH STOCK INDEX

473.53

0.1078179

14.45387

533.15

372.39

ASIA ENTERTAINME

6.666667

42.11192

4.7647

2.2076

553979

BALLY TECHNOLOGI

54.83

1.125046

22.63476

57.86

41.74

448918

Laos Composite Index

1455.82

980.83

BOC HONG KONG HO

3.01

0.6688963

-1.954395

3.6

2.85

30108

GALAXY ENTERTAIN

5.012

4.634656

26.24685

5.77

2.25

21330

INTL GAME TECH

16.41

3.663929

15.80804

18.81

10.92

3357874

JONES LANG LASAL

87.76

1.456647

4.550867

101.46

61.39

222782

LAS VEGAS SANDS

50.71

2.50657

9.857019

60.54

32.6127

9674660

MELCO CROWN-ADR

22.4

4.868914

33.01663

25.2

9.13

5435592

MGM CHINA HOLDIN

2.34

26.48648

2.71

1.36

3300

MGM RESORTS INTE

13.7

3.396226

17.69759

15.95

8.83

8900114

SHFL ENTERTAINME

17.37

0.1152738

19.7931

18.57

12.35

876594

SJM HOLDINGS LTD

2.33

-2.10084

2.299948

2.9481

1.7255

800

WYNN RESORTS LTD

125.6

1.192394

11.65437

144.99

84.4902

2084518

52W (H) 2791.303

FTSE Taiwan 50 Index NAME

JAKARTA COMPOSITE INDEX

MOVERS

4 5390

INDEX 5356.81 HIGH

5386.5

LOW

5274.82

52W (H) 5896.71 (L) 4719.96

5270

24-June

26-June

20.6

PRICE

1848.5

LME ZINC

26-June

Last 18.44

(L) 52W

-3.293434379

7211211

95.15

(H) 52W

-5.062225133

WTI CRUDE FUTURE Aug13

YTD %

0.197511357

Min 17.9

Currency Exchange Rates

NAME

CORN FUTURE

AGRICULTURAL-A

BYD CO LTD -A

18.20

-0.241104698

3.257651

19.3

Last 20.1

21.2

273.08

4.466231

Min 19.4

18.35

101.46

52.3

average 19.845

36.1

86.29000092

INDEX 9164.64

LOW

Max 20.1

21.4

99.98000336

56.5

Last 57.6

18.50

Commodities

Shanghai Shenzhen CSI 300

BEIJING TONGRE-A

Min 56.95

36.3

1.482508532

MOVERS

HIGH

average 35.875

AGRICULTURE ROUGH RICE (CBOT) Sep13

NAME

average 57.610

35.7

LME NICKEL 3MO ($)

NAME

Max 57.85

-0.178346622

19.18

1.680672

37.8

Last 38.5

26-June

YANZHOU COAL-H

52W (H) 12354.22

24.2

Min 37.85

19.5

35.5

DAY %

3.57

CHINA LIFE INS-H

average 38.310

19500

23.75

26.55

19.7 57.0

38.1

52W (H) 23944.74

PRICE

CHINA PACIFIC-H

CHINA CITIC BK-H

BYD CO LTD-H

38.4

Max 36.25

NAME

19.9

57.5

35.9

Hang Seng China Enterprise Index NAME

20.1

20370

INDEX 20338.55 HIGH

38.7

Max 38.95

58.0

39.0

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

AUD HKD

USD

14 14

June 27, 2013 April 19, 2013

15 15

June 27, April 19, 2013 2013

Opinion

Sub-Saharan Africa’s wires subprime borrowers

Is China to blame for rising U.S. interest rates?

Business

Leading reports from Asia’s best business newspapers

Evan Soltas

Asahi Shimbun

Contributor to the Ticker

ould turmoil in Chinese financial markets be the cause of the rise in interest rates on U.S. Treasuries? Danske Bank’s chief emerging-markets analyst, Lars Christensen, explained the theory to me. Last week, China’s central bank deliberately withdrew liquidity and pushed up the short-term interest rates banks pay to borrow from each other, in an effort to shove the Chinese banking system toward less risk-taking. T h a t s q u e e z e , Christensen explained, caused Chinese banks to dump Treasuries onto the market. (China’s central

bank is famous for being the largest foreign holder of Treasuries, but its four largest banks appear to have big stakes, too, according to annual balance-sheet statements.) The influx of sellers then sent Treasury yields up. The U.S. 10-year note now yields 2.6 percent, up 45 basis points since June 1. It’s hard to disentangle the China crunch from changes in U.S. monetary policy, which is also moving towards tighter money. Christensen explains why China might be part of the story: First, the Federal Reserve didn’t tell investors anything new last week. Second, interest rates have

continued to rise well after the Fed’s policy announcement last week. I’m not much convinced by Christensen’s argument. June 19 was the worst day for Treasuries this month, and the selloff happened within minutes of the Fed’s 2 pm announcement. And I’ve made the case that the Fed did tell markets to distrust its commitment that it won’t tighten if the economy remains weak. There are three more problems. First, the capital flows we would expect to see if Chinese banks dumped Treasuries don’t seem to have occurred. Second, the acrossthe-board rise in Eurodollar futures is consistent with faster rate hikes, not a Chinese

panic. Third, past “flights-tosafety” have pushed Treasury yields down, not up. To get liquidity by dumping Treasuries, Chinese banks would also need to sell dollars and buy yuan, pushing the value of the dollar down in terms of yuan. That hasn’t happened. Instead, the value of the yuan has declined in recent days – and that’s remarkable because the Chinese central bank manages the yuan, aiming for a slow appreciation. The drop suggests capital outflow from China, not the expected inflow. As I’ve pointed out in the past, futures markets are now anticipating much more

Obama’s climate plan is vital. And undemocratic Christopher Flavelle

Bloomberg View editorial board

s soon as President Barack Obama finished outlining his plan to fight climate change by sidestepping Congress, the unblinkingly promarket Competitive Enterprise Institute issued a statement denouncing his approach as “undemocratic” and “bordering on authoritarian”. I never thought I’d write this, but CEI raises a good point: What makes it OK to sidestep Congress? Nobody’s arguing that Congress has to agree with every little thing the president does for his actions to be legitimate. But on an issue that touches almost every part of the economy and shapes the way we live, it’s hard to dismiss Congress as just one more spoiled interest group. So if unilateral executive action goes against the will of Congress, which represents the people just as much as the president does, what’s the basis on which Obama can claim popular legitimacy

for his approach? There are plenty of good arguments in favour of Obama taking unilateral action on climate change. First, environmental necessity: Every day we wait makes the problem worse and puts the planet at greater risk. Let’s call this the “we

can’t wait” argument. Second, Republicans in Congress have made clear that they won’t cooperate with the president on a plan to curb carbon emissions. We could debate the reasons for that (Rabid partisanship? Business interests run amok? Troglodyte disease?). Regardless,

Obama reasonably concluded that it’s unilateral action or nothing. Let’s call this the “no alternatives” argument. Third, Obama is using the means available to him as the head of the executive branch. He’s not doing anything illegal, and if he was, any legal challenges would eventually

aggressive rate hikes. That seems to be the explanation for rising bond yields. A selloff expected to be temporary wouldn’t drive up long-term bond futures. It also doesn’t make sense that Chinese banks would sell Treasuries in a liquidity panic. In the fall of 2008, when investors rushed for cover, they bought up Treasuries, which markets considered a risk-free asset. They still do. Is the Treasury market’s meltdown a “China Syndrome?” Maybe. But there’s a lot of evidence suggesting China’s impact on Treasuries is as fictional as the 1979 thriller movie. Bloomberg View

be decided by the courts. Let’s call this one the “legally permissible” argument. The problem is that none of those arguments address the critique that CEI is making. To do so, you need to resort to one of two points. And, if we’re being honest, neither is terribly satisfying. The first is that if voters decide they don’t like Obama’s approach to regulating carbon, they can punish whichever Democrat runs to replace him. Of course, 2016 is a long way off, and Obama will have had time to implement much of this agenda by then. The second answer is that the president’s prerogative includes the responsibility to weigh two competing bad options and choose the lesser one. By this count, he doesn’t need to contest opponents’ arguments that the will of Congress ought to be respected; he only needs to note that failing to fight climate change by whatever means possible would be the greater evil. Of course, democratic legitimacy is all about who has the power to choose between competing priorities, and establishing a process to constrain that power. You can support Obama’s proposals with all your heart and still be concerned that he’s doing an end-run around Congress to get there. Bloomberg View

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.

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

Amid deteriorated relations, Japan and South Korea decided not to extend their currency swap contract worth US$3 billion, which will expire on July 3. As the result of the governments’ decision announced on Monday, the overall size of the bilateral currency swap deal will decrease to US$10 billion from US$70 billion in one year, they said. Japan and South Korea concluded a currency swap contract for the first time in 2001 to offer currencies to each other if one of them plunges into financial crisis.

Business Inquirer Capital controls to stabilise the Philippine financial markets are off the table despite the recent crash in local share prices and the depreciation of the peso, the Bangko Sentral ng Pilipinas said on Tuesday. The BSP said it remained confident that the country’s macroeconomic fundamentals would be enough to keep the Philippine economy thriving. “We are not looking at capital controls,” BSP Governor Amando M. Tetangco Jr. told reporters.

Jakarta Globe Bank Internasional Indonesia, the country’s sixth-largest lender by assets, is seeking to raise 1.5 trillion rupiahs (US$151 million) from selling shares through a rights offering next month. Proceeds from the limited public offering will be used to boost the capital of the lender, which in turn, will allow it to boost its lending activities in Southeast Asia’s largest economy. The lender plans to sell 4.69 billion shares, or 7.7 percent of its capital, in a secondary share sale next month, the company said in a brief prospectus published on Tuesday.

Vietnam News Vietnam’s consumer price index in June inched up by 0.05 percent after a light reduction of 0.06 percent in May, the General Statistics Office announced on Tuesday. The CPI in the first half of the year increased 6.69 percent against last June. This showed that CPI growth could be kept to the 7 percent to 8 percent rate set by the National Assembly, said director of the Price Department Nguyen Duc Thang. Mr Thang stressed that June had the lowest growth rate in the past nine years and that CPI for the first six months was similarly low.

Joseph E. Stiglitz

Nobel laureate in economics and University Professor at Columbia University

2011, Côte d’Ivoire became the first country to default on its sovereign debt since Jamaica in January 2010. In June 2012, Gabon delayed the coupon payment on its US$1 billion bond, pending the outcome of a legal dispute, and was on the verge of a default. Should oil and copper prices collapse, Angola, Gabon, Congo, and Zambia may encounter difficulties in servicing their sovereign bonds.

Downside risks Hamid Rashid

Senior economic adviser at the United Nations Department of Economic and Social Affairs

n recent years, a growing number of African governments have issued Eurobonds, diversifying away from traditional sources of finance such as concessional debt and foreign direct investment. Taking the lead in October 2007, when it issued a US$750 million Eurobond with an 8.5 percent coupon rate, Ghana earned the distinction of being the first Sub-Saharan country – other than South Africa – to issue bonds in 30 years. This debut Sub-Saharan issue, which was four times oversubscribed, sparked a sovereign borrowing spree in the region. Nine other countries – Gabon, the Democratic Republic of the Congo, Côte d’Ivoire, Senegal, Angola, Nigeria, Namibia, Zambia, and Tanzania – followed suit. By February 2013, these ten African economies had collectively raised US$8.1 billion from their maiden sovereign-bond issues, with an average maturity of 11.2 years and an average coupon rate of 6.2 percent. These countries’ existing foreign debt, by contrast, carried an average interest rate of 1.6 percent with an average maturity of 28.7 years. It is no secret that sovereign bonds carry significantly higher borrowing costs than concessional debt does. So why are an increasing number of developing countries resorting to sovereign-bond issues? And why have lenders suddenly found these countries desirable? With quantitative easing having driven interest rates to record lows, one explanation is that this is just another, more obscure manifestation of investors’ search for yield. Moreover, recent analyses, carried out in conjunction with the establishment of the new BRICS bank, have demonstrated the woeful inadequacy of official assistance and concessional lending for meeting Africa’s infrastructure needs, let alone for achieving the levels of sustained growth needed to reduce poverty significantly.

Excessive borrowing M o r e o v e r , t h e conditionality and close monitoring typically associated with the multilateral institutions make

them less attractive sources of financing. What politician wouldn’t prefer money that gives him more freedom to do what he likes? It will be years before any problems become manifest – and, then, some future politician will have to resolve them. To the extent that this new lending is based on Africa’s strengthening economic fundamentals, the recent spate of sovereign-bond issues is a welcome sign. But here, as elsewhere,

Countries contemplating joining the bandwagon of sovereign-bond issuers would do well to learn the lessons of the alltoo-frequent debt crises of the past three decades

the record of private-sector credit assessments should leave one wary. So, are shortsighted financial markets, working with short-sighted governments, laying the groundwork for the world’s next debt crisis? The risks will undoubtedly grow if sub-national authorities and private-sector entities gain similar access to the international capital markets, which could result in excessive borrowing. Nigerian commercial banks have already issued international bonds; in Zambia, the power utility, railway operator, and road builder are planning to issue as much as US$4.5 billion in international bonds. Evidence of either irrational exuberance or market expectations of a bailout is already mounting. How else can one explain Zambia’s ability to lock in a rate that was lower than the yield on a Spanish bond issue, even though Spain’s credit rating is four grades higher? Indeed, except for Namibia, all of these Sub-Saharan sovereign-bond issuers have “speculative” credit ratings, putting their issues in the “junk bond” category and signalling significant default risk. Signs of default stress are already showing. In March 2009 – less than two years after the issue – Congolese bonds were trading for 20 cents on the dollar, pushing the yield to a record high. In January

To ensure that their sovereign-bond issues do not turn into a financial disaster, these countries should put in place a sound, forwardlooking, and comprehensive debt-management structure. They need not only to invest the proceeds in the right type of high-return projects, but also to ensure that they do not have to borrow further to service their debt. These countries can perhaps learn from the bitter experience of Detroit, which issued US$1.4 billion worth of municipal bonds in 2005 to ward off an impending financial crisis. Since then, the city has continued to borrow, mostly to service its outstanding bonds. In the process, four Wall Street banks that enabled Detroit to issue a total of US$3.7 billion in bonds since 2005 have reaped US$474 million in underwriting fees, insurance premiums, and swaps. Understanding the risks of excessive private-sector borrowing, the inadequacy of private lenders’ credit assessments, and the conflicts of interest that are endemic in banks, Sub-Saharan countries should impose constraints on such borrowing, especially when there are significant exchange-rate and maturity mismatches. Countries contemplating joining the bandwagon of sovereign-bond issuers would do well to learn the lessons of the all-toofrequent debt crises of the past three decades. Matters may become even worse in the future, because so-called “vulture” funds have learned how to take full advantage of countries in distress. Recent court rulings in the United States have given the vultures the upper hand, and may make debt restructuring even more difficult, while enthusiasm for bailouts is clearly waning. The international community may rightly believe that both borrowers and lenders have been forewarned. There are no easy, riskfree paths to development and prosperity. But borrowing money from international financial markets is a strategy with enormous downside risks, and only limited upside potential – except for the banks, which take their fees up front. Sub-Saharan Africa’s economies, one hopes, will not have to repeat the costly lessons that other developing countries have learned over the past three decades. © Project Syndicate

16 16

June 27, 2013 April 19, 2013

Closing Draghi says ECB ready to act

Banks forced to disclose reliance on debt

An exit from the European Central Bank’s exceptional monetary policy measures remains distant, ECB President Mario Draghi reiterated yesterday, soothing unnerved markets after the U.S. Federal Reserve laid out a plan to reel in stimulus. “Our exit remains distant. At the same time we have an open mind about all other possible instruments that we may consider proper to adopt … we stand ready to act again when needed,” Mr Draghi said. Nations should “ensure that fiscal consolidation, which is necessary to contain debt levels, is made as growth-friendly as possible,” he added.

Bank investors will be able to assess which lenders are over-reliant on debt starting in 2015, under plans from global regulators to curb financial firms’ addiction to borrowing to fuel their activities. The Basel Committee on Banking Supervision proposed revamping standards for a binding limit, or leverage ratio, on bank debt to ensure that the rule would be applied consistently by lenders across the world, Stefan Ingves, the Basel group’s chairman, said. “Investors and other stakeholders will have a comparable measure of bank leverage, regardless of domestic accounting standards,” he added.

Rudd ousts Australia PM Gillard Former prime minister beats Gillard in ballot for Labor leadership

evin Rudd beat Australian Prime Minister Julia Gillard in a ballot for the Labor leadership as the ruling party seeks to revive its fortunes ahead of an election that opinion polls show it will lose in a landslide. Mr Rudd won by 57 votes to 45 for Ms Gillard in the Labor caucus, party official Chris Hayes said. In an interview with Sky News yesterday in which she called the party-room ballot, Ms Gillard pledged to leave parliament at the election if she lost. Mr Rudd, 55, ousted by Gillard in a backroom coup three years ago, faces the task of turning around a 14 percentage point advantage in opinion polls for Tony Abbott’s opposition. While popular among voters, Mr Rudd has been criticised by colleagues including Treasurer Wayne Swan for an autocratic style, raising questions over whether Labor can unite behind him ahead of a poll currently scheduled for September 14. “A win for Rudd means Labor has a chance to save some seats at the election and avoid a wipeout,” said John Warhurst, a political analyst at the Australian National University in Canberra. “While he’s more popular with voters, the deficit Labor faces in the polls means a win for the party still seems highly unlikely.” Speculation about a challenge to Ms Gillard, 51, Australia’s first female prime minister, intensified as Mr Rudd this month made campaign

Kevin Rudd – more popular with voters

appearances in marginal seats, with news footage showing enthusiastic voters greeting him. Ms Gillard called the ballot after media reports earlier yesterday said that Mr Rudd supporters circulated a petition calling for a special meeting of Labor lawmakers to oust her. The Australian dollar traded at 92.95 U.S. cents at 8 pm in Sydney, little changed from before the leadership announcement.

Taiwan cuts tax on stock trading Move could help jump-start the stock market

aiwan lawmakers voted to roll back provisions of a capital gains tax on stock sales of more than NT$1 billion (US$33 million) and removed a n index pr ice thresh old th at depressed shares. Tax on capital gains from transactions of more than NT$1 billion was reduced to 0.1 percent from 2.25 percent under the original law. Lawmakers also removed an 8,500-point close threshold for the Taiex index before the tax

could go into effect. Legislative Yuan President Wang Jin-pyng announced the passage of revisions in a special legislative session yesterday. The benchmark Taiex index rose 1.1 percent to close at 7,746.52, the biggest advance since May 8. The new rules come after stock trading volume declined by as much as 30 percent in the first four months of the year, according to Credit Suisse Group AG. President Ma Yingjeou’s administration and legislators

Mr Rudd’s return would lift Labor by 11 percentage points in the primary vote to 40 percent, compared with the Liberal-National coalition’s 42 percent, according to a Nielsen survey published in Fairfax newspapers on June 17. It showed support for Labor under Ms Gillard slid 3 points to 29 percent, versus the opposition’s 47 percent. While polls suggest Mr Rudd would boost Labor’s popularity,

argued over about 10 versions of the tax last year, prompting thenFinance Minister Christina Liu to step down. The Taiex lost 13 percent during the period. “This would create motivation for local investors to enter the market, since the capital gains tax was always seen as a negative for the stocks,” said Parker Wu, a fund manager at the Agriculture Bank of Taiwan, who helps oversee the equivalent of US$98 million. Taiwanese residents invested more capital overseas in the last two quarters of 2012 compared with the quarter earlier, Credit Suisse analyst Christiaan Tuntono wrote in a May 20 report, citing the island’s central bank. The government’s transaction tax revenue fell by 24 percent in the first four months of the year, according to Mr Tuntono. Before passing the levy last year, Taiwan had since 1990 exempted securities transactions from capitalgains taxes, according to the stock

“whether that would last very long is questionable,” said Peter Chen, who teaches politics and public policy at the University of Sydney. “The opposition has been brewing up a lot of very aggressive advertising to deploy if that occurs. The somewhat more positive view of Labor under Rudd that the public has expressed is set to be tested because it’s always been a hypothetical.” Reuters

Trading volume declined by as much as 30 pct in the four months ended April 30

exchange’s website. Stocks fell for 19 consecutive days, tumbling 33 percent in a month, when the plan for the tax was first discussed in 1988, Schive Chi said last year when he was the chairman of Taiwan Stock Exchange Corp. The Taiex index retreated 0.5 percent this year, erasing earlier gains on concern the Federal Reserve will scale back monetary stimulus as the economy recovers. Reuters