Macau Business Daily, 20 June, 2012 by Business Daily

Year I - Number 59 Thursday June 21, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

Grand Emperor finds common touch

Flaming June forecast for gaming revenue

Page 2

Asian companies more downbeat

Page 4

Pages 10 & 11

Labour costs stifling cross-border investment A

lmost a third of European companies with operations in the Pearl River Delta are considering moving out of China completely. That could have an impact on the 12,921 Macau-funded businesses registered across China since 1990. A total of US$10.5 billion (83.9 billion patacas) has been invested in mainland business ventures by Macau people and companies over the past two decades according to China’s Ministry of Commerce. Henry Lei Chun Kwok, professor of Business Economics at the University of Macau, is pessimistic about the future for some of them. “I speculate that quite a number of the firms operated

by Macau investors will shut down since most of them are concentrated in the traditional textiles and garments production with low value added,” he told Business Daily. The main reason for the Europeans’ pull out threat – cited by 75 percent of respondents – is rising labour costs as mainland standards of living rise. The sentiment is revealed in European Business in China’s Business Confidence Survey. The poll also cites a tough regulatory environment on the mainland. About 40 percent of European companies feel that Chinese government policies towards foreign enterprises are less fair than they were two years ago, the survey shows.

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Non-res workers vulnerable to trafficking: U.S. govt The Macau Government should end the six-month ban for nonresident workers who are sacked for good cause or who leave their job, the United States Department of State says on a report released on Tuesday. The Trafficking in Persons Report 2012 stresses that the territory “made no changes to the immigration regulation structure which renders foreign migrants vulnerable to forced labour”. The State department has again placed Macau on tier 2 watch list, arguing, “authorities did not demonstrate evidence of increasing efforts to address human trafficking,” namely that there were no human trafficking convictions.

www.macaubusinessdaily.com

HANG SENG INDEX 19560

The American authorities recommended that the city increase the number of prosecutors responsible for criminal cases, with one focused “specifically” on trafficking crimes, including “official complicity”. The city still “does not fully comply with the minimum standards for the elimination of trafficking,” even though “it is making significant efforts to do so,” the annual report says. For instance, Macau “lacks a clear policy in place to protect trafficking victims from future hardship”. The State department says victims should be given “legal alternatives to their removal to countries where they may face hardship and retribution”.

19540

19520

19500

19480

June 20

2G switch off delayed amid service failures

HSI - Movers Name

acau will not be making full transition to 3G mobile telephony this year, the telecom regulator has said. It follows two major service interruptions on the network of CTM – Companhia de Telecomunicações de Macau S.A.R.L and one service interruption on mobile operator 3 Macau last week. The Commission Against Corruption – which also acts as public ombudsman – has received complaints about telephone service standards. Pages 6 & 7

Air Macau profits rise 8.2pct

%Day

SANDS CHINA LTD

3.34

ALUMINUM CORP-H

2.71

ESPRIT HLDGS

2.59

HSBC HLDGS PLC

2.32

SINO LAND CO

1.96

BANK EAST ASIA

-1.11

COSCO PAC LTD

-1.37

CHINA OVERSEAS

-1.82

HENGAN INTL

-3.16

CHINA UNICOM HON

-3.88

Source: Bloomberg

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ir Macau’s profits rose 8.2 percent to 250.8-million patacas (US$31.4 million) last year. But the airline is still paying off losses accumulated previously. As a result shareholder dividends are modest. The government will receive a special dividend of 10 million patacas for its leadership in the 700-million-pataca capital injection last November that allowed the flag carrier to keep flying. Page 5

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business daily June 21, 2012

macau

Grand year for Emperor InBrief on mass-market gambling Profits boomed at Grand Emperor hotel-casino, with massmarket gaming skyrocketing at the expense of the VIP segment Citibank profits rise

Vítor Quintã

vitorquinta@macaubusinessdaily.com

The profit of Citibank’s Macau unit rose 5.4 percent last year to 15.2 million patacas (US$1.9 million), according to the bank’s annual report published in yesterday’s Official Gazette. The main reason was a drop of more than 1 million patacas in the capital set aside for the branch’s legal reserve. Citbank’s operational profits actually fell 1.8 percent to 17.1 million patacas, even though revenue rose 7.6 percent to 37.6 million patacas.

Australia tax deal in effect A deal between Macau and Australia to tackle tax evasion has come into effect a month ago, Chief Executive Fernando Chui Sai On confirmed on yesterday’s Official Gazette. The agreement was signed in July 2011, aimed at preventing offshore tax avoidance and evasion by information and intelligence sharing. Macau has so far concluded Tax Information Exchange Agreements or Double Taxation Conventions with 14 different countries or regions.

AL wants better food origin control Legislators fear that the new food safety draft bill will not be able to adequately control food products’ origin, Rádio Macau reported. After a meeting of the second standing committee of the Legislative Assembly yesterday, committee president Chan Chak Mo said it “was not enough” to have just one provision on the control of food products through importation receipts and records.

Incinerator still on hold Two years after the government announced it would launch a tender to update the Macau incinerator plant, the facility is still operating at halfcapacity, Ponto Final reports. The Environmental Protection Bureau told the Portuguese-language newspaper that the renovation plans for the three older incinerators – which no longer meet environmental criteria – have not been dropped but gave no schedule for the public tender.

The opening of a new five-storey mall in downtown Macau was pushed back one year to 2014

he operator of Macau’s Grand Emperor hotelcasino saw its profit increase by almost two-thirds in the year ended March 31, mainly due to a boom in premium massmarket gaming. Emperor Entertainment Hotel Ltd said its profit grew by 65.5 percent to HK$743.2 million (US$95.8 million) in a filing to the Hong Kong Stock Exchange on Tuesday. Revenue grew far more slowly – by about one-third to HK$1.78 billion – and 89.9 percent came from gaming operations run by Sociedade de Jogos de Macau, S.A. “The group’s revenue was derived principally in Macau,” the company said.

CORRECTIONS

Correction over Yacht Club story On Tuesday’s edition we published a story titled ‘Developer touting Yacht Club tower flats’, where we mistakenly said that six months ago developer Realgain Development Inc sent a booklet to a Macau real estate businessman over a 45-floor tower project for a plot granted to the Macau Yacht Club, quoting former legislator Jorge Fão. However, Mr Fão did not mention the name of Realgain. We apologise for this mistake.

Grand Emperor’s gaming revenue

Mass-market VIP Slots

2012* 1.17 bln 397.1 mln 51.9 mln

*For the year ended March 31 Premium mass-market gaming was the star performer, with revenue rising by a staggering 65.6 percent to HK$1.17 billion, which prompted the company to introduce four more tables. The average daily win across the year was about HK$93,000 a table. And revenue from slot machines also increased, by 15.8 percent to HK$51.9 million. Revenue from VIP tables, however, fell 3 percent to HK$397.1 million and the number of tables decreased by four.

Bullish outlook

HK$743.2 million Emperor Entertainment’s profit for the year ended March 31

2011* 1.27 bln 409.5 mln 44.8 mln

Emperor Entertainment Hotel accounted for 60 percent of the revenue of parent company Emperor International Holdings. The company is bullish about the outlook for Macau. “The development of major infrastructure projects in Macau and mainland China, such as the expansion of the immigration gates in Macau and Zhuhai and the construction of the high-speed

railway network on the mainland, will improve accessibility to Macau and boost the number of visitors,” it said. “The strong momentum behind Macau is likely to be sustained over the coming years by a series of other new projects in the pipeline.” The yuan’s appreciation is also cause for optimism. “Such appreciation increases the purchasing power of mainland visitors and, therefore, attracts more mainland visitors to go to Macau, which in turn further bolsters the entertainment expenditure,” it said. In its stock exchange filing, Emperor International confirmed the completion of demolition work at a plot in the city centre where it plans to build a new five-storey shopping complex. However, the company pushed back the opening of the “premium retail complex”, with an area of 30,000 square feet, to 2014, one year later than the schedule announced in November.

June 21, 2012 business daily | 3

MACAU

Pearl River labour costs hit Macau firms With the Pearl River Delta facing a painful evolution, Macau investors are feeling the heat but Hengqin could show the way Vítor Quintã

vitorquinta@macaubusinessdaily.com

ising labour costs in the Pearl River Delta are making European companies mull moving investments outside mainland China but economists are split on what the impact could be for Macau firms operating in the region. Almost a third of all Pearl River Delta-based European companies were considering moving, according to the European Business in China’s Business Confidence Survey, due to rising labour costs and a tough regulatory environment. South Korean media reports go even further and claims that several Korean electronics companies are already planning to move to the Philippines. The Economist Intelligence Unit says “it has become increasingly evident that the comparative advantages that turned Guangdong into a low-cost manufacturing hub are gradually disappearing”. Henry Lei Chun Kwok, professor of Business Economics at the University of Macau, is pessimistic. “I speculate that quite a number of the firms operated by Macau investors will shut down since most of them are concentrated in the traditional textiles and garments production with low value added,” he told Business Daily. Since 1990 mainland Chinese authorities have approved 12,921 Macau-funded investment projects worth US$10.5 billion (83.9 billion patacas). The economist believes investors are left with only two alternatives. “Some of these businessmen may make their new investments in the service sector, such as running restaurants, which can be regarded as structure adjustments. A smaller number of them may be able to develop new production methods to evolve to higher-value added production,” he said. Fellow economist Albano Martins is more optimistic, stressing that Macau-operated companies “are able to control labour costs much more easily, so that they will likely won’t soar as much”. Macau investors “have other ways to tackle these issues,” he told Business Daily. About 40 percent of European companies feel that Chinese government policies towards foreign enterprises are less fair than they were two years ago, the survey released last month shows. Mr Martins agrees: “In China the biggest problem is that the economy is not fully regulated and rules change quickly”.

tion technology,” Mr Lei says. But, he adds, “without government support, it may be hard for existing firms”. The economist expects an increase number of bankruptcies in the region. Mr Martins believes the services sector will be the region’s long-term alternative and that could also help the Macau economy, Mr Brockman added. “There are mainly service industries in Macau, some of them could be relocated to neighbouring cities as labour is still much scarcer here,” he says. “The challenge for companies is how to continue to deliver quality service here while outsourcing to the Pearl River Delta.” In addition, says Mr Ambrósio, “Macau can serve as a platform” between Chinese companies looking outside and the Portuguese-speaking countries, which “can provide China with both new markets and investment opportunities”.

Hengqin services

With rising labour costs in the Pearl River Delta, some companies are choosing to close doors and move elsewhere

On the other hand, the two economists agreed that labour costs will have little impact on the two economic special zones in Guangdong that are being established in cooperation with Macau. To try to attract manufacturing companies to Hengqin Island and Guangzhou’s Nansha district would be a dead-end idea, says Mr Martins. “Competitive advantages are shrinking and only technological gains might smooth higher costs.” Labour costs “may not be a big concern” of the newly developed industries in these areas, adds Mr Lei. He stressed that both Hengqin and Nansha “would specialise in those cutting edge new industries with high value-added”. Guangdong’s special zones are “very much incipient” but they are “well-located, close to world markets, and benefit from a unique range of preferential policies,” the Economist Intelligence Unit says. For instance, Hengqin “remains tiny” but government plans have outlined ambitious hopes that the island could be a thriving city of 280,000 by 2020, the unit recalled. In addition, Nansha will focus on high-end services, as well as port services, tourism, leisure and advanced manufacturing. The priority given to services investment, points to “Guangdong’s likely emergence as an advanced economy over the next decade or two,” the report adds.

Delta is the most pessimistic, with 75 percent of the companies glum on staff costs. “Since the Pearl River Delta is a traditional labour-intensive manufacturing base, it has been hit strongly by these rising costs,” the report says. And the conditions will not get any better, economists warn. “China has been trying to relocate its companies to the Western provinces but even some Chinese companies are moving their factories to other Asian countries where it is becoming easier and cheaper to invest,” Mr Martins says. “Rising labour costs not only affect foreign companies but also domestic Chinese companies,’ the head of the International Lusophone Markets Business Association, Eduardo Ambrósio, told Business Daily. The migrant workers who previously flocked to cities such as Shenzhen, Dongguan and Foshan are

increasingly finding work closer to home, squeezing labour supply and applying further upward pressure on wages, the Economist Intelligence Unit says.

There are mainly service industries in Macau, some of them could be relocated to neighbouring cities

Quite a number of the firms operated by Macau investors will shut down

Even some Chinese companies are moving their factories to other Asian countries

Henry Lei Chun Kwok, University of Macau economist

Albano Martins, economist

Service move With the country “close to full employment,” demand for workers is pushing up salaries, Mr Martins stresses. In addition, the government is demanding “more and more protection for workers, through higher minimum wages.” “As the Pearl River Delta becomes more prosperous, labour cost will rise,” the head of the British Business Association, Henry Brockman, told Business Daily. “The transformation will be enormous and continuous, eventually turning the Pearl River Delta into a production base of high-value added goods in the area of electronics and informa-

with X.C.

Changing times The Pearl River Delta is becoming less attractive for European companies, the survey says, particularly for those engaged in manufacturing. “It is only logical that they would look to lower-cost countries to stay competitive,” it adds. Rising labour costs are regarded as a significant concern by almost two-thirds of the survey respondents and are now perceived as the second biggest risk to doing business in China. The issue of rising labour costs even ranks higher than a global economic slowdown. And the Pearl River

Henry Brockman, head of British Business Association

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business daily June 21, 2012

macau

Flaming June as gaming revenue growth bounces back J.P. Morgan estimates 20pct y-on-y growth to 25 billion patacas Associate Editor

acau gross gaming revenue for June appears to be on course to bounce back to high teens or low 20s year-on-year growth after the dip to 7.3 percent seen in May suggest analysts. June revenue should reach 25 billion patacas (US$3.14 billion) based on daily run rates to June 17 says Kenneth Fong of J.P. Morgan in Hong Kong. “Mass market growth continues to be robust with year to date growth of plus 36 percent, outpacing VIP growth of plus 17 percent,” adds Jon Oh of CLSA Asia-Pacific Markets in New York. “This is the first time since 2009 that massmarket growth has exceeded VIP growth,” he states. Cameron McKnight of Wells Fargo in New York said in a note to investors this week that in the second half of 2011 Macau revenue was given an abnormal lift by the first phase opening of Galaxy Macau on Cotai. “Looking forward, we believe growth rates will moderate as comparisons become tougher in Q3 2012 as Galaxy was ramping last year,” he wrote.

Mass-market revenue growth outpacing VIP for first time since 2009

Hold rates Statisticians counsel against reading too much into a single month’s revenue results in any industry for a number of reasons, including oneoff factors that can skew monthly returns from one year to the next. Two factors that can influence gaming revenue numbers are win rates (related to the theoretical house advantage of a game) and hold rates (the percentage of money wagered that the casino actually gets to keep from one month to the next). In baccarat, which accounts for 99 percent of revenue from all table games played in Macau, wun rates are low compared to other games such as roulette and sic bo. “Based on the first 17 days of June, we estimate monthly revenue growth is trending at 19 percent year-onyear,” says Cameron McKnight. “We believe this is in line with [Wall] Street expectations, though June growth is likely to benefit [from] a low hold percentage of 2.80 percent in June 2011. We estimate [hold] normalised growth of plus or minus 15 percent year-on-year.” Ben Lee of iGamix Management & Consulting says in the latest edition of his newsletter Macau Gaming Gazette that baccarat win rates and hold percentages ideally need to be studied over years rather than quarters or months to get the most accurate

picture of casino performance.

averages to get a better picture of the trend, as any casino statistician will give you many reasons why performance has to be measured over a period of multiples of years to give a statistically accurate story on win rates,” writes Mr Lee. “Based on our recent channel checks, Macau market-wide is tracking toward 25 billion patacas or a 20 percent year on year increase for June,” states Kenneth Fong of J.P. Morgan. “We base this monthly result on what we believe to be the revenue of 14.3 billion patacas generated till June 17,” he adds. Jon Oh of CLSA Asia-Pacific Markets in New York suggests there’s likely to be more volatility in Macau revenue growth rates in coming months, and adjusts his overall annual growth rate for 2012 to 16 percent. “While we expect growth in June 2012 to rebound to the mid- to high-teens, future growth rates are likely to be choppy, especially for July and August 2012. We are trimming our 2012 Macau growth estimates to plus 16 percent (US$38.7 billion) from plus 21 percent (US$40.7 billion).”

Statistically accurate

Foot traffic

“We continue to advise our clients to focus on the rolling three month

Union Gaming Research Macau yesterday issued a note on the

KEY POINTS 25 bln patacas gaming revenue for June – J.P. Morgan estimate High teens or low 20s pct year-on-year June growth – analyst consensus Year-to-date massmarket growth of +36pct, outpacing VIP growth of +17pct – CLSA Asia-Pacific Markets Venetian Macao and Sands Cotai Central with estimated 64pct share of Cotai foot traffic in midMay to mid-June – Union Gaming Research

market shares of the Macau operators, taking account of its own field research on foot traffic to Cotai resorts conducted from midMay to mid-June. Union compares market share on tables per operator with its own foot traffic estimates to give an idea of which operators are performing well in the non-gaming segments. “….we recorded a 64 percent share (minus 100 basis points from last month) of walk-in visitation for Sands China’s Sands Cotai Central and Venetian Macao properties vis-à-vis having an approximate 55 percent share of mass-market table supply on Cotai,” says Grant Govertsen of Union Gaming. “Separately, we note that City of Dreams accounted for 29 percent of walk-in visitation (-100bps from last month), with Galaxy Macau garnering a seven percent share (+200bps from last month).” A number of analysts have pointed out that Sands Cotai Central hasn’t so far provided the lift to Sands China’s earnings they had hoped. Phase one launched on April 11 into a more challenging economic climate than that faced by Galaxy Macau phase one when it opened on May 15 last year. On June 11 Sands China started offering discounts of up to 62 percent on rooms at Holiday Inn Macao Cotai Central. That’s based on the “from HK$488” per night price quoted on the resort’s website compared to a price of HK$1,288 quoted before the opening date. The offer currently runs until July 12. The older Holiday Inn Macau on the peninsula is currently charging HK$848 per night. But J.P. Morgan’s May revenue report does show that SCC’s share of total Macau gaming revenue rose from 1.6 percent in April to 4.3 percent for May – a real terms month-on-month increase even accounting for the resort operating for only 19 days in April.

June 21, 2012 business daily | 5

MACAU

Air Macau spends profit paying off accrued losses The government gets a small dividend but most of Air Macau’s profit from last year will cover five years’ losses Vítor Quintã

vitorquinta@macaubusinessdaily.com

MOP250.8 million Air Macau’s profit last year

lag carrier Air Macau will pump most of its 250.8-million-pataca (US$31.4 million) profit from last year into paying off accumulated losses, it was announced yesterday. The airline’s annual report, published in yesterday’s edition of

the Official Gazette, shows an 8.2 percent increase in profit, mostly due to a 16.3 percent jump in service revenue to 2.98 billion patacas. After five years of consecutive losses, Air Macau has been in the black for two years in a row and the company plans to use part of last year’s profit

CSR profit falls Some 20 million patacas distributed to shareholders

The company’s net profit dropped to 40 million patacas

evenue at Macau Waste Systems Co Ltd rose by 4.2 percent to 175.3 million patacas (US$21.9 million) last year but profit slid backwards. Net profit dropped by 2.2 percent to 40 million patacas, with the company’s profit margin falling from 24.3 percent to 22.8 percent last year. The solid waste management operator published its annual report in the Official Gazette yesterday. The company said the “introduction of several cost-saving and efficiency improvement programmes” had held up profits. Some 20 million patacas was distributed to shareholders: Hong Kong’s Swire SITA Waste Services Ltd and H. Nolasco. They received

25 million patacas in 2010. The company’s contract to manage solid waste has been extended for a second time, until the end of next March, at cost of 138 million patacas. The company has already received 80.6 million patacas from the first extension. The government said last month it is preparing an international tender for the solid waste management service, originally scheduled for last year. No schedule has been announced. H. Nolasco director Frederico Marques Nolasco da Silva and two former Macau Waste Systems directors are serving jail sentences for bribing corrupt former secretary for Transport and Public Works Ao Man Long. X.C.

to “fully cover” accumulated losses of 221.7 million. The government will receive a special dividend of 10 million patacas for its leadership in the 700-million-pataca capital injection to keep the airline flying in November.

An additional 2.9 million patacas will be transferred to the company’s mandatory legal reserve, which “is not yet fully set aside”, the airline has admitted. The remaining 16.2 million patacas will be kept as accumulated profit. “Even though the global economy recovery was losing steam, the company still had a surplus this year, due to the adequate decision to remain constantly focused on restructuring and implementing aggressive marketing plans,” a statement from the board said. Air Macau’s supervisory council was more cautious. “Pre-emptive and counter measures should be strengthened (to tackle) the current high prices of aircraft fuel and limited human resources,” it said. Staff costs grew by 12.3 percent last year to 385.87 million patacas. In March, Air Macau chief executive Zhu Songyang promised to hire more pilots and cabin crew. The supervisory council emphasised the need for “an improvement of hardware and software”. The annual report does not include a plan to upgrade the fleet, a promise made by chairman Zheng Yan in March.

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business daily June 21, 2012

director said. “But I understand that some citizens may have taken this as the cause. The bureau is delaying the transition, to ease the anxiety among the public.”

end, as he felt there would be only a few 2G service users remaining. Mr Hoi said the 3G network was ready and 3G coverage would get better in the second half of year. The three operators invested 400 million patacas (US$50 million) in 2012 and 2011 to improve the network, he added. The deputy director also retail shops had been told that they could continue selling 2G mobile phones, as long as they stated clearly in the receipt that the local mobile network will not support local 2G phones after this year. He said that bureau’s initial findings held the three blackouts this year to be isolated cases. The 3 Macau Internet service crash last week was caused by errors during a software upgrade, Mr Hoi said, but it is not yet known whether it was triggered by human error. He said they still needed time to complete this investigation, but the report on the second blackout involving CTM was almost done.

macau

Full transition to 3G mobiles deferred to early next year Residents may use 2G mobiles till year-end Tony Lai

tony.lai@macaubusinessdaily.com

acau will not be making full transition to 3G mobile telephony this year, the telecom regulator has said. The postponement is in deference to the large number of residents still using 2G services and suggestions from the anti-corruption body. Mobile subscribers may continue using 2G services for six months more, Telecommunications Regulation Bureau Deputy Director Hoi Chi Leong said at a press conference on Wednesday. Under the original plan, 2G mobile services would not be provided to residents after July 8, while visitors would still be allowed to access it through roaming. The Commission Against Corruption conveyed to the telecom regulator complaints it had received from the public. In a report released on Wednesday, the commission suggested that 2G services could coexist with 3G for one to two years more. Chief Executive Fernando Chui

Sai On approved the content of the report submitted last month and urged the telecommunications regulator to follow up on its suggestions, according to the commission’s press release. Mr Hoi said: “Our stance is basically the same as the Commission Against Corruption: help citizens’ life become more convenient.” He added that the decision was also made because there were still over 30,000 2G subscribers and, after three telecommunication blackouts this year, the public was anxious about the new generation in cellular telephony. Two of these blackouts involved Companhia de Telecomunicações de Macau S.A.R.L (CTM) — one in February, affecting thousands of 3G phone and internet users for at least six hours, and a second last month. The latest instance involved mobile operator 3 Macau last week. “The three incidents that occurred this year are not related to flaws in the 3G services,” the deputy

2G mobile sales The 2G licenses to the three telecommunications operators will end on July 8, but the telecommunication regulator will allow the companies to continue providing 2G services until the end of this year in the terms of their new 3G licenses. The deputy director maintained such a move would not breach any administrative regulations. He said the government would urge CTM, 3 Macau and SmarTone Macau to directly contact the remaining 2G mobile users. However, he noted: “Residents have the freedom to choose whether to change or not.” He did not see the need for another extension of the transition at year-

Weather Beijing 32/22o C Changchun 28/18o C

Harbin 30/19o C

Xian 33/25o C Shanghai 27/22o C Chengdu 26/20o C Kunming 23/16o C Haikou 32/27o C Sanya 31/26o C

Guangzhou 30/25o C

MACAU (18 June-23 June) Day

Temperature

Humidity

06/18

24/29o C

70/95 %

06/19

25/30o C

70/95 %

06/20

26/30o C

75/95 %

06/21

25/30o C

75/95 %

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26/31o C

70/95 %

06/23

26/32o C

65/90 %

Shenzhen 33/26o C

ASIA (today)

Hong Kong 33/26o C

Manila

TOKYO

Jakarta

33/25o C

33/26o C

27/19o C

32/24o C

Macau 30/25o C

Bangkok

SEOUL

K. lumpur

34/24o C

SINGAPORE

28/19o C

33/24o C

taipei

28/25o C

June 21, 2012 business daily | 7

MACAU

Under-fire telco points to labour woes After big blackouts, technology chief at CTM says company is suffering from a brain drain to casinos Vítor Quintã

vitorquinta@macaubusinessdaily.com

apid development of the gambling sector makes it difficult for telecommunications provider Companhia de Telecomunicações de Macau to retain front-line technology staff, says a C-level executive. Speaking to electronics magazine Computerworld, CTM chief information officer Rui Marcelo said CTM was suffering from “a small talent pool”. “Macau is a relatively small place, so it was obvious local staff would jump on board the growth of the gambling industry. Salaries became inflated and it’s difficult to compete for talent,” he said. CTM’s reputation has been hit by two recent service blackouts, both of which the company says were caused by human error. The operator paid a fine of 800,000 patacas (US$100,000) for the first blackout

that occurred on February 6. Mr Marcelo said the casino boom had prompted the return to Macau of residents that were raised here but educated overseas. “So we’re gradually witnessing a re-balancing of resources,” he said. Mr Marcelo says CTM is not alone in struggling to find technical staff, with a widespread talent shortage creating problems for the entire information technology industry. “The demand for talent is now much higher than what the market can offer,” he said. “There are signs of renewed interest in IT (information technology) recently. But they are still very weak signs. However, he feels that factors such as the widespread adoption of smartphones and tablets “are likely to raise the interest among younger generations” and dispel “the conventional image of a gloomy or geeky IT industry”. A survey released by the Macau New Technologies Incubator Centre in November found that companies struggle to recruit information technology staff in the face of demand from banks and casinos. The survey said there were signs that the shortage was gradually becoming less pronounced. The centre’s executive director Gilbert Chan said recruiting talent from overseas, who would then share their experience, was one solution to fill gaps in the workforce.

Change to 3G breaks basic rights, says CCAC

he Commission Against Corruption said the termination of 2G services to subscribers “breaches Macau residents’ basic rights” to receive any service “without being discriminated against”. The graft watchdog made the comments in a report made public yesterday that isolated the problems in the transition to a full, 3G network. It was okayed by Chief Executive Fernando Chui Sai On in early May. The report concluded that scrapping the 2G network did “not conform with the public interest”. The Bureau of Telecommunications Regulation announced yesterday that subscribers could use a 2G service until the end of the year. The 2G service was originally due to be switched off after July 8 for all subscribers, except for tourists roaming on the network.

The commission opened an inquiry after it received complaints from the public describing the 3G transition as “forcing customers to change their mobiles”. It said the 2G service could be extended for a further one to two years and the telecommunications operators should provide 2G network temporarily to the public if the 3G network crashed. The watchdog slammed the telecommunications regulator for “over-interfering in the operating conditions of the market” and “affecting consumer rights of the Macau residents”. It said that providing 2G services to visitors was not backed by any legal document and had not been approved by the chief executive. The end of 2G services contradicted principles of proportionality and good faith. T.L.

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business daily June 21, 2012

Greater China

Concerns about local governments’ debt, default potential Authorities encourage companies to issue debt, to unburden state-owned banks

hina is allowing more companies to trade bonds and increasing scrutiny over issuers as the government seeks to ensure that the expansion of its nascent debt market isn’t derailed by defaults. The top economic planning agency ordered local governments to examine the ability of companies to repay bonds maturing in 2012 and 2013, two people with direct knowledge of the matter said yesterday, asking not to be identified as they weren’t authorised to speak to media. China Securities Regulatory Commission began allowing mutual funds to invest in private placements by smaller companies, according to an agency document obtained by Bloomberg News. Chinese companies sold more debt in the first five months of the year than in all of 2010 as the government encouraged companies to boost fundraising through sales of equity and bonds in a campaign to wean them off loans from stateowned banks and make their finances more transparent. The growth is spurring concern given that China has never had a domestic bond default, according to Moody’s Investors Service. “It’s kind of a dilemma because for a bond market you must face default sooner or later,” said Ivan Chung, an analyst at Moody’s in Hong Kong. Chinese officials “worry that one default may cause a confidence crisis and people will lose faith in the bond market,” he said. China’s 4.2 trillion yuan (US$659 billion) corporate bond market is about 9 percent of its gross domestic product. In the U.S., the US$7.9 trillion in fixed-income securities is equal to more than half the size of economic output.

Risk monitoring The National Development and Reform Commission ordered local officials to set up risk monitoring and forecasting mechanisms for debt maturing this year and next, the people said. Companies that violate the monitoring rules and default will be barred from selling more bonds, they said. Local branches of the NDRC that

Debt markets, a long road ahead

submitted bond-sale applications to the central commission for companies that later default won’t be allowed to submit additional applications, the people said. It wasn’t clear if the bans would be temporary or permanent, the people said. The main underwriters for defaulted debt will have their bond issuance businesses either temporarily or permanently halted as punishment, the people said. The orders, outlined in documents issued by the NDRC and dated May 15, were received by local officials this week, the people said. They were issued because the risk of defaults is increasing as the bond market expands, they said. NDRC spokesman Li Pumin couldn’t be reached by telephone at his office for comment.

‘Chain reaction’ One source of concern has been the borrowings of local government finance vehicles set up by cities and provinces to sidestep rules that barred them from directly taking bank loans or selling bonds, Lion Fund Management Co. said. China’s National Audit Office said in June 2011 that these financing

vehicles had 10.7 trillion yuan (US$1.7 trillion) of debt at the end of 2010, with 29 percent maturing in 2012 and 2013. The NDRC is responsible for approving bond sales by these financing vehicles. Local authorities set up the vehicles to fund the construction of roads, bridges and stadiums, which helped stave off the effects of the global financial crisis in 2008 and 2009. “Any default could possibly have some chain reaction in the system and I’m sure the government will take steps to pre-empt that,” James Zhou, a bond fund manager at Lion Fund in Shenzhen, said in an interview.

Innovation needed Guo Shuqing, chairman of the China Securities Regulatory Commission, said in a March interview with the official People’s Daily newspaper that the nation’s bond market needed innovation. China’s debt and equities markets still “seriously” lag behind the demands of the real economy, he said. In less than two years, China has introduced junk bonds, municipal

debt and credit default swaps. The China Securities Journal newspaper also reported in March that regulators were preparing for trading of government bond futures. The securities regulator began allowing mutual funds to buy bonds sold by smaller companies with the provision that such debt doesn’t exceed 10 percent of the fund’s net asset value, according to the document obtained yesterday. Money-market funds, which mainly invest in short-term securities, are also excluded, according to the circular. Funds that plan to invest in such debt should disclose the securities’ liquidity and credit risk in the prospectus, the CSRC file said. The rule takes effect June 15, it said. Sales of corporate bonds surged to 511 billion yuan this year through June 18 compared with 206 billion yuan for the same period of 2011, according to data compiled by Bloomberg. Local government controlled companies sold 185 billion yuan of bonds in the first five months compared with 118 billion yuan a year earlier, according to Chinabond. Bloomberg

CPPCC advises government to relax curbs on luxury homes

Relaxing rules on first tier cities suggested

hina’s top advisory body called on the government to relax property market restrictions to keep the economy growing, a newspaper said on Wednesday, the first such proposal by advisers to steady a weakening house market. The China Daily cited the Chinese People Political Consultative Conference (CPPCC), an advisory body for parliament, as saying Beijing should loosen purchase restrictions for luxury homes in the first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen. “Restrictions on purchases should be relaxed for high-end residential properties in first-tier cities,” the

newspaper cited the proposal as saying. The paper did not say how it obtained the proposal, except to say it was released on Tuesday. This is the first time a group of influential economic advisers have called on China to relax controls on the property market, a once-red hot sector that has cooled under a government campaign to make home prices more affordable. Premier Wen Jiabao has been adamant that the government will not relax its grip on the housing market even as he has called for other measures to support economic growth. Analysts say China is unlikely to heed the suggestion as home prices are still too high, but the proposal

June 21, 2012 business daily | 9

GREATER CHINA Huadian Fuxin concluded IPO in HK

hina’s Huadian Fuxin Energy Corp raised about HK$2.48 billion (US$319 million) in a Hong Kong IPO, pricing the city’s second biggest offering of the year at the bottom of the indicative range as investors remain wary of new listings. The company was among only a few to complete an IPO in Hong Kong in the past weeks, sealing the deal just days after an election in Greece that eased some of the global equities markets’ worries over the European debt crisis. Huadian Fuxin’s IPO is Hong Kong’s largest since a US$580 million deal by oil explorer Sunshine Oilsands Ltd in February. The smaller size of IPOs in 2012 underscores the difficulty bankers and companies have faced in convincing investors to buy into equity markets. Huadian Fuxin sold 1.5 billion new shares at HK$1.65 each (21

US cents), near the bottom of a HK$1.60-1.76 per share price range, according to a term sheet of the IPO seen by Reuters. Six cornerstone investors, including turbine maker Sinovel Wind Group and a unit of General Electric, bought nearly 60 percent of the IPO, as investment banks increasingly seek to make deals fool-proof by covering most of the demand before their launch. Huadian Fuxin is a diversified energy company with hydropower projects and coal-fired power plants in South China’s Fujian province and wind power and clean energy projects throughout China. The company will debut on the Hong Kong stock exchange on June 28. Bank of America Merrill Lynch, CITIC Securities and UBS acted as joint global coordinators for the offer. Reuters

Li calls for economic reforms

hinese Vice Premier Li Keqiang, widely seen as the nation’s premier-in-waiting, has urged the country to pursue economic reforms that would push factories up the value chain and reduce wasteful spending, state media reported. Xinhua quoted Mr Li as saying late on Tuesday that China needs to quicken the development of new strategic manufacturing sectors including energy conservation, environmental protection, bioindustry and high-end equipment. Mr Li, speaking on a visit to the Chinese Academy of Sciences, an influential research institute closely linked to the government, said China needs to let the market play a role in shaping reforms,

and warned against wasteful construction projects. His comments are in line with Beijing’s plan to restructure the world’s second-biggest economy to boost consumption and to reduce state investment and its reliance on a volatile export sector. Beijing lowered its official target for 2012 gross domestic product growth to 7.5 percent, which would be the weakest since 1990. But some analysts say China’s adjustment to better-quality growth may not be easy because reduced state investment and a shift toward consumption could threaten vested interests such as the giant stateowned firms that thrived under the old system.

underlines worries that the Chinese economy could sink into a deeper downturn if the property market is suppressed for too long.

time since the depths of the 2008 financial crisis. Data showed Chinese house prices fell for the eighth straight month in May, but the pace of the drop eased, fanning speculation that the market may be hitting a bottom and could rebound. “It is difficult for the government to relax control on the property market as that may cause home prices to soar again,” said Nie Wen, an analyst from Huabao Trust. Relaxing controls on luxury home transactions would also blunt the edge of Beijing’s property policy, which has been aimed at dampening speculation and investment demand for high-end homes. “Once China relaxes property curbs, it would cause inflation to spike again and there would be no end to troubles caused in the medium- and long-term,” he said.

‘Difficult to relax’ China’s government has leaned against the country’s frothy house market for over two years in the hope of taming record prices, and quelling discontent among millions of property buyers who can not afford to purchase a home. The campaign has dragged on the economy. The property market accounted for 13 percent of gross domestic product in 2011. Beijing’s property curbs included purchase restrictions that bar buyers from buying more than two properties. Mortgage rates were raised 1.1 times, although the central bank cut its policy interest rates this month for the first

Reuters

ZTE to increase purchases from the U.S.

TE Corp, the world’s No.5 telecom equipment vendor and the fourth largest handsets vendor, plans to increase its purchases from the United States by around 10 percent annually to over US$9 billion in the next three years, an executive said yesterday. The increase in purchases comes at a time when ZTE, along with bigger Chinese rival Huawei Technologies Co Ltd, is under scrutiny of U.S. lawmakers and industry executives on security and subsidy issues. “We are collaborating with many U.S. companies and based on our current development plans in the United States, our initial estimate is we’ll increase U.S. purchases to US$9 billion in 2012-2014,” said David Shu, a spokesman for ZTE. Mr Shu said the US$9 billion number included US$5 billion

worth of deals already signed in February with U.S. chip firms Qualcomm Inc and Broadcom Corp over the next 3-4 years. ZTE has purchased hardware and software worth US$13.7 billion from U.S. technology companies since 2000, executives said. China’s top telecom equipment makers Huawei, also the world’s second largest, and ZTE have made strong headway into emerging markets and Europe, but the U.S. telecoms market remains elusive on fears over possible cyber espionage. Earlier in June, U.S. telecommunications equipment company Infinera Corp charged Huawei and ZTE of obtaining unfair government support and called for a tough U.S. response on economic and security grounds. Reuters

10 |

business daily June 21, 2012

asia

Asian business sentiment slides Europe, China worries dampen sentiment in second quarter Eveline Danubrata and Aradhana Aravindan

sia’s top companies are less upbeat on their business outlook than in the first quarter, with mounting concern over the euro zone crisis and a slowdown in China’s growth, according to the latest Thomson Reuters/INSEAD Asia Business Sentiment Survey, published yesterday. The Thomson Reuters/ INSEAD Asia Business Sentiment Index (RACSI) slid to 69 in June from 74 in March, when it saw a dramatic 14-point jump from the December survey. A reading above 50 indicates an overall positive outlook. “It’s obvious there are a few macro headwinds,” said James Koh, analyst at Maybank Kim Eng in Singapore. “Companies are understandably a little worried. On one hand, you have the Greek fall-out and, on the other hand, we have already seen a mild deceleration of

growth in China.” Of the 177 Asian companies polled, 78 said their business outlook for the next six months was positive, while 87 said it was neutral, and 12 were negative. The poll was conducted by Thomson Reuters in association with INSEAD, a global management and business school in Singapore and France, between June 4-15. Asked what was the biggest risk factor they face, 111 companies said global economic uncertainty, and 28 cited rising costs. “Things are looking tougher with what’s happening in the global economy. Asia is not fully insulated but will still do relatively better given that most governments in the region still have leeway to stimulate domestic economies,” said Kristy Fong, investment manager at Aberdeen Asset Management Asia. “Cost pressures are another issue, such as rising

inflationary pressures in Singapore [and] infrastructure and logistical bottlenecks in India.” Carey Wong, analyst at OCBC Investment Research, said end-consumers were turning more cautious in placing orders. “As long as customers don’t give them very clear order indications, sentiment won’t be that good. As a business owner, you can’t plan ahead, such as planning capital expenditure.”

Global exposure Europe’s ongoing debt crisis and worries over a slowing China battered stock markets globally in the second quarter, knocking the MSCI world equity index down by more than 13 percent. Sentiment in industry sectors heavily dependent on the global economy, such as shipping and financials, deteriorated the most, the

quarterly survey showed. “Asian businesses – the big exporters – face potential weakness in essentially most of their end-markets,” said Nick Paulson-Ellis, the India head at Espirito Santo Securities. “It’s clearly not going to be an easy time. You’ve got slowdowns domestically after pretty aggressive tightening last year in a lot of developing economies and you’ve got weakness in end-markets, so it’s a very, very tough period for Asian corporates.” Shippers saw the biggest drop in sentiment from the March survey, but consumer-related sectors such as retail, drugs and food were more positive than in March. “Companies in consumer staples such as instant coffee and supermarkets seem to be slightly more bullish, especially those more concentrated in ASEAN,” said Maybank

Kim Eng’s Mr Koh. “They’re less affected by any slowdown in industrial production and higherend spending, and their exposure is more local rather than macro.” By country, Australia had

Business sentiment by sector Airlines

Autos

Building

Financial

Property

Retail

Technology

Carriers were slightly more upbeat about their outlook after jet fuel prices trended downwards recently. Rising fuel costs remained the top concern, however, with two airlines citing them as the main business risk.

A majority of the auto companies surveyed had a neutral view. Most were worried about the impact of slowing economic growth on car sales.

Sentiment in the sector has dipped. Rising costs and the global economic uncertainty, which affect profitability and construction demand, remained the major concerns for builders.

Banks and insurers were less bullish on their outlook. Indonesian banks were the most optimistic, followed by the Philippines. The global economy was the dominant concern, with 25 financial companies citing it as the key risk.

Sentiment in the sector held a neutral view. Two Chinese developers surveyed had a neutral outlook after a sharper-thanexpected slowdown in the world’s secondlargest economy and government cooling measures dragged property sales.

Companies turned more upbeat, even though more than half were concerned about the global economy, while rising costs were the secondbiggest worry.

Technology firms were less bullish this quarter. Most firms were concerned about slowing demand for electronic components, TVs, mobiles and services, as well as other technology products. Several also flagged regulatory risks and increasing competition.

Indonesia strengthens banking supervision Industry ‘still growing amid the turmoil in Europe’

I Muliaman Hadad will head the board of a financial regulator due to start operating in 2013

ndonesia will strengthen banking supervision to ensure that lenders stay insulated from fallout from Europe’s crisis, the incoming head of the country’s new financial regulator said. Commercial banks have about 154 trillion rupiah (US$16.4 billion) of exposure to Europe, through channels including trade finance and money markets, a fraction of their more than 3,000 trillion rupiah in assets, Muliaman Hadad, a

central bank deputy governor, said in an interview yesterday. Lending growth in Southeast Asia’s biggest economy was an annual 28 percent pace in May, underscoring domestic strength, he said. “While we’re facing a crisis risk from Europe, the performance of our banking industry is shining,” Mr Hadad said in his office at Bank Indonesia in Jakarta. “The industry, as the main engine for the economy, is

still growing amid the turmoil in Europe.” Mr Hadad was a senior analyst at the central bank when the Asian financial crisis forced Indonesia, Thailand and South Korea to tap International Monetary Fund bailouts totalling about US$100 billion as their currencies plummeted. As deputy governor, he has overseen lenders in an economy where foreign-exchange reserves have more than quadrupled

June 21, 2012 business daily | 11

asia Fuel imports push Japan into trade deficit

Shippers saw the biggest drop in sentiment this quarter

the lowest reading of 42 – the only score below 50 – while all Philippine companies polled were positive. Sentiment among Chinese firms fell to the lowest level since the survey began in 2009, ahead of only

Australia and Taiwan, as the world’s second-biggest economy showed signs of slowing. But Elvic Ng, Hong Kongbased head of research at UOB Kay Hian, sees a pickup in China’s economic

growth and business sentiment in the next 6-12 months, as a June 7 interest rate cut and monetary easing are signs the government has shifted to pro-growth monetary and fiscal policies. Reuters

apan’s coal and LNG imports surged by as much as a fifth in May from a year ago to replace lost nuclear energy after reactors were idled due to the Fukushima disaster and imports are expected to remain robust as peak summer demand approaches. Crude oil imports rose about 7 percent on the year, although were down from April, government data showed. The rise in energy imports helped widen Japan’s trade deficit in May to the third highest on record and more than 60 percent higher than economists had projected. An overall shortfall of 907.3 billion yen (US$11.5 billion) for May was bigger than all estimates of economists. Exports rose 10 percent from a year earlier, the most in 17 months, while imports exceeded estimates. Imports jumped 9.3 percent to 6.14-trillion-yen from a year earlier. Imports of liquefied natural gas by the world’s biggest buyer of the fuel totalled 7.06 million tonnes last month, up 16.8 percent from a year earlier, preliminary data from the Ministry of Finance showed yesterday. Imports of thermal coal for power generation rose 20.8 percent in May to 9.09 million tonnes from a year ago. Japan also reported its first trade deficit with the European Union since the Finance Ministry began tracking data in 1979 as the debt crisis roiling Spain and Greece limits a rebound in Japanese exports. The trade gap with the EU was 11.1 billion yen. The Bank of Japan should be ready to “take appropriate actions without ruling out any options in advance” should the European crisis worsen, some board members said in May, according to minutes released yesterday. Japan’s trade deficit in the first five months of 2012 has already exceed that for the whole of last year. The shortfall from January through May was 2.97 trillion yen, compared to 2.56 trillion yen in 2011, government data showed. Reuters/Bloomberg

Packer plans to cash up to expand casino business News Corp’s US$2 billion takeover offer for Consolidated Media Holdings

upert Murdoch’s News Corp made a US$2 billion takeover offer for Australia’s Consolidated Media Holdings yesterday, boosting top shareholder and billionaire James Packer’s warchest as he abandons media in favour of casinos. Mr Packer, who has built stakes in casinos in Macau,

Australia, London and Las Vegas, indicated he would accept the offer in the absence of a higher bid for the payTV stakeholder, in which he holds 50.1 percent. For News Corp, which also announced sweeping cost and job cuts in Australia yesterday, a successful bid would double its stake in

since 2008, and growth has exceeded 6 percent since 2010 as investment surged.

financial regulators to be non-politicised. Among the regulatory issues facing supervisors now is Singapore’s DBS Group Holdings Ltd.’s 66 trillionrupiah takeover offer for PT Bank Danamon Indonesia. The purchase may be affected by the central bank’s consideration of restrictions on single-entity ownership of the country’s lenders. “Due to the turmoil in Europe, business is not as usual,” Mr Hadad said. “We have to make sure there are no loopholes in the supervision, to ensure investors feel certain they can do business in Indonesia.” “Indonesia’s banking industry is still promising as we have a big market with higher economic growth potential,” Mr Hadad said. “There’s no reason for us to be pessimistic.”

’No loopholes’ Parliament late on Monday approved Mr Hadad to head the board of a national financial regulator due to start operating in January 2013. The new regulator, known in the Indonesian language as Otoritas Jasa Keuangan, or OJK, will supervise capital markets, insurers, pension funds and other nonbank institutions next year and oversee commercial lenders starting in January 2014. The creation of the agency followed a months-long tussle between lawmakers and the government over its leadership. The World Bank and Moody’s Investors Service were among those calling for Indonesian

Bloomberg

Australia’s dominant pay-TV business Foxtel to 50 percent, and give it 100 percent of content provider Fox Sports. Mr Packer recently took a 10 percent stake in Sydney casino-owner Echo Entertainment, through his Crown Ltd, amid speculation he wants to use Echo’s licence to build a new casino complex in Sydney to attract more Asian high-rollers. Crown Ltd., in which Packer holds a 48 percent stake, owns casinos in Melbourne and Perth and also has gambling interests in Macau. Mr Packer is seeking to increase his stake in Echo to tap so-called VIP gamblers who are venturing beyond Macau. “It frees up more cash and gives him a bit more flexibility,” said Paul Xiradis, managing director of Ausbil Dexia, which owns stakes in News Corp and Echo. “He’s shown his hand in Echo ... but his intentions are not well and truly understood,” he said. Shares in Consolidated Media jumped 10 percent to A$3.39, just below the A$3.50 a share offer, which was pitched at a 14 percent premium to the last close. A sale would see Mr Packer all but exit what was once a media empire, built up over

James Packer holds 50.1 percent of Consolidated Media Holdings Ltd

decades by his father Kerry Packer and grandfather Sir Frank Packer, apart from a 10 percent stake in television company Ten Network. “My family has a long history in media but I am a pragmatist. This is a good deal,” Mr Packer was quoted as saying from London by the Australian Financial Review. “This proposal would suggest that my long-term interests lie in the entertainment and gaming side of my business,” he said. News Corp, which publishes national broadsheet The Australian and tabloids The Daily Telegraph and Herald Sun, said the changes could

take up to two years, but insisted there was a future in print despite readers moving online. “Print is not dead,” said Kim Williams, Chief Executive of News Corp’s Australian operations and the former head of Foxtel. News Corp announced sweeping changes in Australia yesterday, including job cuts and shrinking the number of its divisions from 19 to five. Kim Williams, the chief executive of local arm News Ltd, said he planned to centralise sales, marketing, finance and administration, and would fold the group’s digital divisions into the new structure. Reuters/Bloomberg

12 |

business daily June 21, 2012

MARKETS Hang SENG INDEX NAME

NAME

PRICE

Day %

VOLUME

AIA GROUP LTD

26.2

-0.3802281

16854725

CHINA UNICOM HON

ALUMINUM CORP-H

3.41

2.710843

21711975

CITIC PACIFIC

BANK OF CHINA-H

2.92

0.3436426

197596476

BANK OF COMMUN-H

5.21

0.3853565

15178019

BANK EAST ASIA

26.8

-1.107011

BELLE INTERNATIO

12.4

-0.3215434

BOC HONG KONG HO

CLP HLDGS LTD

Day %

VOLUME

10.4

-3.881701

46638025

PRICE

Day %

POWER ASSETS HOL

56.6

-0.9623797

11.96

1.70068

1871448

6749524

SANDS CHINA LTD

26.3

3.339882

16157150

SINO LAND CO

11.46

1.957295

5941046

SUN HUNG KAI PRO

89.95 -0.05555556

2279123

SWIRE PACIFIC-A

89.35

0.6760563

685304

TENCENT HOLDINGS

239.4

0.4194631

2189801

TINGYI HLDG CO

19.28

2860032

9.81

0.8221994

8151375

42.75

0.5882353

4210213

0.1540832

1530976

CNOOC LTD

15.48

1.176471

34661689

1031658

COSCO PAC LTD

10.06

-1.372549

2636323

9816785

ESPRIT HLDGS

10.3

2.589641

12940224

23.5

-0.6342495

9677254

HANG LUNG PROPER

CATHAY PAC AIR

12.56

0.9646302

2780010

HANG SENG BK

CHEUNG KONG

92.95

0.3779698

2743290

HENDERSON LAND D

CHINA COAL ENE-H

6.93

0.1445087

16236317

CHINA CONST BA-H

5.31

0.1886792

156930966

CHINA LIFE INS-H

19.7

0.2034588

21780420

CHINA MERCHANT

23.1

-0.2159827

1701527

CHINA MOBILE

82.55

0.1820388

CHINA OVERSEAS

17.28

-1.818182

CHINA PETROLEU-H

7.03

-0.1420455

53365354

CHINA RES ENTERP

23.35

2571741

15.8

0.6369427

16902387

CHINA RES POWER

14.92

1.221167

CHINA SHENHUA-H

27.55

-1.077199

CHINA RES LAND

PRICE

25.7

0.390625

5257917

103.9

0.5808325

937704

41.8

1872484

HENGAN INTL

76.65

-3.15856

1210437

NAME

WANT WANT CHINA WHARF HLDG

MOVERS

HONG KG CHINA GS

16.48

0.365408

3625920

HONG KONG EXCHNG

109.7

-0.1819836

5886489

HSBC HLDGS PLC

68.45

2.316891

29868820

14789918

HUTCHISON WHAMPO

66.95

0.8283133

3847215

35764577

IND & COMM BK-H

4.43

269821434

15.76

1.940492

11563462

HIGH

19578.13

25.7

-0.3875969

1416649

LOW

19327.78

NEW WORLD DEV

9.2

0.4366812

16347810

5905673

52W (H) 22835.03

PETROCHINA CO-H

10.62

0.5681818

43365098

19621747

PING AN INSURA-H

62.45

0.8071025

8673478

(L) 16170.35

LI & FUNG LTD MTR CORP

VOLUME

4 19600

INDEX 19518.85

19320

18-Jun

20-Jun

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

0.4016064

7300750

CHINA PETROLEU-H

7.03

-0.1420455

53365354

ZIJIN MINING-H

21711975

CHINA RAIL CN-H

6.46

3.030303

19247142

-0.4338395

4962691

CHINA RAIL GR-H

3.21

2.555911

19200573

2.92

0.3436426

197596476

CHINA SHENHUA-H

27.55

-1.077199

19621747

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.06

0.3278689

91667200

AIR CHINA LTD-H

4.6

1.098901

8704774

3.41

2.710843

ANHUI CONCH-H

22.95

BANK OF CHINA-H

ALUMINUM CORP-H

NAME CHINA PACIFIC-H

5.21

0.3853565

15178019

CHINA TELECOM-H

3.51

-2.5

66828289

15.42

0.260078

2948913

DONGFENG MOTOR-H

13.3

0.3016591

9851936

-2.200489

42892364

GUANGZHOU AUTO-H

6.94

1.018923

4999607

CHINA COAL ENE-H

6.93

0.1445087

16236317

HUANENG POWER-H

5.49

-0.6354449

17334256

CHINA COM CONS-H

6.87

1.327434

14433384

IND & COMM BK-H

4.43

269821434

CHINA CONST BA-H

5.31

0.1886792

156930966

JIANGXI COPPER-H

18.16

1.679731

18834989

CHINA COSCO HO-H

3.71

12997765

PETROCHINA CO-H

10.62

0.5681818

43365098

CHINA LIFE INS-H

19.7

0.2034588

21780420

PICC PROPERTY &

9.11

0.8859358

12270642

CHINA LONGYUAN-H

5.34

0.754717

6290779

PING AN INSURA-H

62.45

0.8071025

8673478

CHINA MERCH BK-H

14.86

10061929

SHANDONG WEIG-H

8.96

6.035503

11067599

BANK OF COMMUN-H BYD CO LTD-H CHINA CITIC BK-H

NAME

PRICE

DAY %

VOLUME

12.66

0.63593

16279520

2.82

0.3558719

16459062

ZOOMLION HEAVY-H

10.84

14248806

ZTE CORP-H

15.02

1.349528

5715472

YANZHOU COAL-H

MOVERS

5 9940

INDEX 9821.22 HIGH

9933.71

LOW

9749.63

CHINA MINSHENG-H

7.21

1.264045

17407644

SINOPHARM-H

20.7

-3.044496

4073447

52W (H) 12902.97

CHINA NATL BDG-H

9.17

0.1091703

14844646

TSINGTAO BREW-H

46.6

5013693

(L) 8058.58

11.54

1.943463

5728248

WEICHAI POWER-H

33.55

2.130898

841333

CHINA OILFIELD-H

9740

18-Jun

20-Jun

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.55

0.4530234

45339877

DATANG INTL PO-A

5.74

-1.034483

5769364

SANY HEAVY INDUS

14.04

-2.160279

40259116

AIR CHINA LTD-A

6.17

1.147541

10923115

DONGFANG ELECT-A

21.39

0.1404494

3559822

SHANDONG GOLD-MI

35.69

-0.998613

5375721

ALUMINUM CORP-A

6.68

0.7541478

6258785

EVERBRIG SEC -A

13.35

-3.190718

16534673

SHANG PUDONG-A

8.5

0.1177856

50000107

16.03

-0.7430341

10684912

GD MIDEA HOLDING

11.38

-2.485004

31830602

SHANGHAI ELECT-A

5.17

0.7797271

4997147

GD POWER DEVEL-A

2.72

-0.729927

66039315

SHANXI LU'AN -A

22.7

-0.9166303

8780548

GF SECURITIES-A

31.48

-1.161695

5701425

SHANXI XINGHUA-A

37.3

1431988

NAME

ANHUI CONCH-A

NAME

BANK OF BEIJIN-A

9.61

0.7337526

14193514

BANK OF CHINA-A

2.85

9958546

BANK OF COMMUN-A

4.53

0.2212389

24092609

GREE ELECTRIC

21.55

-0.4618938

9173585

SHANXI XISHAN-A

16.18

0.872818

13050931

BAOSHAN IRON & S

4.45

0.678733

13617808

GUANGHUI ENERG-A

14.46

-0.5502063

19485797

SHENZ DVLP BK-A

15.23

-0.1311475

14370713

29.16

0.1717623

3053158

6.59

0.764526

14007322

15.83

-0.377596

2443474

8.74

0.3444317

15444669

23.17

-0.1723395

1639276

GUIZHOU PANJIA-A

CHINA CITIC BK-A

4.06

-0.2457002

15495751

HAITONG SECURI-A

10.08

-1.658537

45902281

CHINA CNR CORP-A

4.17

-0.477327

14213774

HANGZHOU HIKVI-A

26.14

-2.023988

3115145

SUNING APPLIAN-A

BYD CO LTD -A

HEBEI IRON-A

SHENZEN OVERSE-A SINOVEL WIND-A

CHINA COAL ENE-A

8.29

0.1207729

8915890

2.89

0.3472222

11082422

TSINGTAO BREW-A

38.9

-0.1283697

2387299

CHINA CONST BA-A

4.53

0.443459

23354743

HENAN SHUAN-A

63.34

-0.8763693

1058383

WEICHAI POWER-A

31.65

0.09487666

2135510

CHINA COSCO HO-A

4.86

1.039501

9635205

HUATAI SECURIT-A

11.1

-3.645833

31555426

WULIANGYE YIBIN

32.95

-0.3327284

7014400

CHINA CSSC HOL-A

-0.990099

4292170

HUAXIA BANK CO

9.5

0.5291005

36736028

XIAMEN TUNGSTEN

46.38

-1.84127

10506317 10850811

CHINA EAST AIR-A

4.07

0.9925558

9220619

IND & COMM BK-A

3.94

25961120

YANGQUAN COAL -A

17.16

1.41844

CHINA EVERBRIG-A

2.84

0.3533569

22784429

INDUSTRIAL BAN-A

12.97

0.464756

36722008

YANTAI CHANGYU-A

71.57

-0.1255931

790266

CHINA LIFE INS-A

17.96

0.7856341

6928259

INNER MONG BAO-A

43.98

0.8947006

44602835

YANTAI WANHUA-A

14.77

-0.3373819

6982232

CHINA MERCH BK-A

11.03

0.3639672

27268925

INNER MONG YIL-A

20.95

-0.9456265

23192539

YANZHOU COAL-A

21.44

0.09337068

2504941

CHINA MERCHANT-A

12.23

-2.394254

20112786

INNER MONGOLIA-A

5.7

-1.893287

59719542

YUNNAN BAIYAO-A

56.98

-2.681469

2253464

CHINA MERCHANT-A

24.53

0.9880609

11140746

JIANGSU HENGRU-A

27.94

-2.444134

2917714

ZHONGJIN GOLD

23.86

-0.707449

7193043

CHINA MINSHENG-A

6.27

0.9661836

94087364

JIANGSU YANGHE-A

138.98

0.2380094

690537

ZIJIN MINING-A

4.06

24175947

CHINA NATIONAL-A

6.26

1.294498

11827045

JIANGXI COPPER-A

25.24

0.1984915

7677882

ZOOMLION HEAVY-A

10.33

-0.5774783

20193521

JINDUICHENG -A

13.53

-0.3681885

3250689

ZTE CORP-A

15.07

1.208865

16877982

16.94

8257273

CHINA OILFIELD-A

16.97

0.7719715

4945391

CHINA PACIFIC-A

22.13

1.050228

10326902

JIZHONG ENERGY-A

CHINA PETROLEU-A

6.44

0.3115265

15121662

KANGMEI PHARMA-A

13.99

-0.4978663

15852980

CHINA RAILWAY-A

4.6

1.321586

21075861

KWEICHOW MOUTA-A

243.56

-0.05744768

1139346

41.3

-0.7211538

2949978 28148238

CHINA RAILWAY-A

2.65

17491547

LUZHOU LAOJIAO-A

CHINA SHENHUA-A

23.92

0.2514669

5900237

METALLURGICAL-A

2.54

-0.78125

CHINA SHIPBUIL-A

5.38

-0.3703704

12710508

NARI TECHNOLOG-A

19.57

0.2048131

4122883

NINGBO PORT CO-A

2.57

4884090

CHINA SOUTHERN-A

4.72

1.287554

17874058

CHINA STATE -A

3.36

-0.2967359

29205285

PANGANG GROUP -A

7.3

0.8287293

23294285

9.26

0.7616975

MOVERS

124

147

29 2595

INDEX 2552.611

CHINA UNITED-A

3.93

-0.5063291

33953570

PETROCHINA CO-A

13393507

HIGH

2590.18

CHINA VANKE CO-A

9.03

-0.3311258

27190001

PING AN INSURA-A

46.04

0.1740644

13891949

LOW

2550.83

CHINA YANGTZE-A

6.83

-0.5822416

9510049

POLY REAL ESTA-A

11.54

-1.619778

36424737

CITIC SECURITI-A

13.4

36331070

QINGDAO HAIER-A

12.07

-0.8216927

10482276

CSR CORP LTD -A

4.85

0.2066116

14080317

QINGHAI SALT-A

31.49

0.9942271

6260674

DAQIN RAILWAY -A

7.36

-0.1356852

17330067

SAIC MOTOR-A

14.6

-0.6126617

8642295

NAME

PRICE DAY %

Volume

PRICE DAY %

Volume

ACER INC

32.5 -0.6116208

15484964

FORMOSA PLASTIC

80.1

0.8816121

6024936

TAIWAN MOBILE CO

ADVANCED SEMICON

26.1

17584753

FOXCONN TECHNOLO

108

0.4651163

6739042

ASIA CEMENT CORP

37.25 -0.2677376

2711533

FUBON FINANCIAL

1.010101

ASUSTEK COMPUTER

298.5

0.1677852

3217233

HON HAI PRECISIO

AU OPTRONICS COR

12.15

1.25

27434349

HOTAI MOTOR CO

203

52W (H) 3140.102 (L) 2254.567

2550

18-Jun

20-Jun

FTSE TAIWAN 50 INDEX

CATCHER TECH

NAME

PRICE DAY %

Volume

0.5347594

TPK HOLDING CO L

478

3.463203

6837871

10480897

TSMC

81.6

1.36646

28977100

0.811124

21595265

UNI-PRESIDENT

47.3 -0.4210526

2.78481

696864

UNITED MICROELEC

12.7

2.834008

4904265

5975198 31295380

202

2.020202

16693001

HTC CORP

391

1.295337

11820711

WISTRON CORP

39.2 -0.2544529

CATHAY FINANCIAL

29.75

1.535836

8773044

HUA NAN FINANCIA

16.5

0.3039514

4633297

YUANTA FINANCIAL

13.7

2.238806

16561187

CHANG HWA BANK

15.8

0.6369427

4963344

LARGAN PRECISION

622

2.134647

2151600

YULON MOTOR CO

53.6

0.3745318

5335781

CHENG SHIN RUBBE

0.1335113

8531392

LITE-ON TECHNOLO

38.1

0.9271523

6504598

CHIMEI INNOLUX C

12.3

2.074689

28843264

MEDIATEK INC

276

0.5464481

7262292

CHINA DEVELOPMEN

7.08

0.8547009

25133288

MEGA FINANCIAL H

21.6

26294056

CHINA STEEL CORP

28.3

0.1769912

15711626

NAN YA PLASTICS

57.3

1.415929

5193548

CHINATRUST FINAN

17.7

1.724138

34970036

PRESIDENT CHAIN

CHUNGHWA TELECOM

91.5

0.660066

6721817

QUANTA COMPUTER

80.9

28.85

1.405975

7930430

SILICONWARE PREC

88 -0.9009009

5496676

SINOPAC FINANCIA

COMPAL ELECTRON DELTA ELECT INC

158.5 -0.3144654

938191

-1.100244

6765150

31.5

3.789127

10998158

11.1

0.9090909

8292112

FAR EASTERN NEW

30.95

3.166667

7365834

SYNNEX TECH INTL

73.5

1.800554

3151512

FAR EASTONE TELE

64.8

-1.669196

7425808

TAIWAN CEMENT

35.45

0.4249292

5374411

17.45

0.867052

9530288

TAIWAN COOPERATI

17.6

0.8595989

2834665

FORMOSA CHEM & F

FIRST FINANCIAL

80.2

1.262626

3767151

TAIWAN FERTILIZE

68.5

1.331361

2434450

FORMOSA PETROCHE

83.7

1.086957

2263549

TAIWAN GLASS IND

25.2

0.3984064

2217946

MOVERS

8083656

3 5060

INDEX 5057.25 HIGH

5057.25

LOW

4985.36

52W (H) 6026.51 (L) 4643.05

4980

18-Jun

20-Jun

June 21, 2012 business daily | 13

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

MElco crowN ENtErtAINMENt

MGM cHINA HolDINGS

20.4

12.4

30.55

20.2

12.3

20.0

30.35

19.8

12.2

19.6

12.1

30.15

19.4

12.0

19.2 Max 20.4

Average 19.96

Min 19.1

last 20.25

19.0

SANDS cHINA ltD

Max 30.55

Average 30.21

Min 30

29.95

last 30.55

Max 12.34

SJM HolDINGS ltD

Average 12.061

Min 11.9

last 12.34

11.9

wyNN MAcAu ltD

26.5

14.80

26.3

14.75

26.1

14.70

25.9

14.65

25.7

14.60

18.5 18.4 18.3 18.2 18.1 17.8 17.9

Max 26.45

Average 26.14

Min 25.75

last 26.3

Max 14.8

Average 14.72

Min 14.62

Commodities ENERGY

NAME

PRICE

WTI CRUDE FUTURE Jul12

84.12

0.107104605

-15.35520225

111.4899979

77.40000153

BRENT CRUDE FUTR Aug12

95.55

-0.219287826

-9.267875795

124.6999969

94.43999481

GASOLINE RBOB FUT Jul12

264.28

0.049214461

-2.648543117

332.1799994

246.4999914

843

0.237812128

-6.229143493

1046.5

811.5

2.612

2.632612967

-19.45729263

4.890000343

2.095999956

NATURAL GAS FUTR Jul12 HEATING OIL FUTR Jul12

DAY %

YTD %

(H) 52W

264.43

0.34913286

-6.979280262

331.9299936

256.3099861

1617.98

-0.7739

3.3912

1921.18

1478.78

Silver Spot $/Oz

28.4369

-1.3806

2.1624

44.2175

26.085

Platinum Spot $/Oz

1458.69

-1.9533

4.6031

1915.75

1339.25

Palladium Spot $/Oz

627.75

-0.4898

-3.9403

848.37

537.54

LME ALUMINUM 3MO ($)

1926

-0.155520995

-4.653465347

2675.25

1915.25

LME COPPER 3MO ($)

7609

1.318242344

0.118421053

9905

6635

1899.5

1.037234043

2.953929539

2539.5

1718.5

17090

2.642642643

-8.658471406

25195

15980

14.75

-1.862940785

13.95499992

561.5

-0.354924579

-4.221748401

673.5

499

WHEAT FUTURE(CBT) Dec12

695.25

0.252343187

-3.4375

871

629.5

SOYBEAN FUTURE Nov12

1390.25

0.415312387

15.4452979

1400

1115.75

COFFEE 'C' FUTURE Sep12

158.1

-0.440806045

-32.50800427

288.8500061

SUGAR #11 (WORLD) Oct12

20.61

-0.865800866

-9.724047306

COTTON NO.2 FUTR Dec12

73.01

-1.907832863

-16.88296903

3MO ($)

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

Dec12

MAJORS

ASIA PACIFIC

CROSSES

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

last 18.48

Min 17.88

DAY %

1.0205 1.5731 0.9452 1.2704 78.97 7.9913 7.759 6.3598 55.965 31.47 1.2667 29.859 42.135 9430 80.593 1.20088 0.80759 8.0641 10.152 100.33 1.0299

YTD %

0.5716 0.4277 0.7406 0.7375 -0.114 0.01 0.0039 -0.0802 0.0089 -0.286 0.0947 0.0067 0.5577 -0.2333 -0.6924 0.0025 -0.3083 -0.9028 -0.7171 -0.8472 0.0097

(H) 52W

-0.0392 1.2095 -0.7512 -1.9829 -2.6086 0.1039 0.1083 -1.0189 -5.1818 0.2542 2.3605 1.4066 4.0465 -3.8282 -2.6814 1.3249 3.1947 0.8693 1.9701 -0.6678 0.0194

(L) 52W

1.1081 1.6618 0.9772 1.4578 84.18 8.0449 7.8113 6.4909 56.515 31.96 1.3199 30.716 44.35 9662 88.637 1.24736 0.90835 9.4168 11.6817 117.74 1.0311

0.9388 1.5235 0.7071 1.2288 75.35 7.9823 7.7529 6.2769 43.855 29.63 1.1992 28.661 41.879 8458 72.057 1.00749 0.79505 7.8544 9.8423 95.6 1.0288

MACAU RELATED STOCKS (H) 52W

(L) 52W

ARISTOCRAT LEISU

NAME

PRICE 2.88

-1.030928

30.90909

3.25

1.88

1505191

150.0999908

CROWN LTD

8.64

-0.8036739

6.798515

9.29

7.45

3011579

26.03999901

19.23999977

AMAX HOLDINGS LT

0.075

-13.7931

0.124

0.06

713000

103

64.61000061

BOC HONG KONG HO

23.5

-0.6342495

27.71739

24.45

14.24

9677254

0.236

2.608696

2.608694

0.4

0.204

9000

2.98

-0.6666667

6.428573

4.36

2.3

31000 35764577

CENTURY LEGEND CHEUK NANG HLDGS

World Stock MarketS - Indices NAME

Average 18.27

PRICE

(L) 52W

Gold Spot $/Oz

LME ZINC

Max 18.48

CURRENCY EXCHANGE RATES

GAS OIL FUT (ICE) Aug12

METALS

17.8

last 14.74

DAY % YTD %

VOLUME CRNCY

CHINA OVERSEAS

17.28

-1.818182

33.12789

18.48

9.99

CHINESE ESTATES

8.97

-0.1113586

-28.24

13.68

8.3

236810

CHOW TAI FOOK JE

9.47

2.157497

-31.96839

15.16

8.55

11337575

EMPEROR ENTERTAI

1.34

13.55932

20.72072

2.04

0.97

7482000

FUTURE BRIGHT

0.86

104.7619

1.09

0.3

1518000

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

12837.33

0.7495789

5.072785

13338.66016

10404.49

GALAXY ENTERTAIN

20.25

6.578947

42.20506

24.95

8.69

24514778

NASDAQ COMPOSITE INDEX

2929.76

1.189156

12.46032

3134.17

2298.89

HANG SENG BK

103.9

0.5808325

12.75095

125

84.4

937704

FTSE 100 INDEX

5596.52

0.1827682

0.4350147

6084.08

4791.01

HOPEWELL HLDGS

20.75

2.216749

4.481366

24.903

18.56

513900

DAX INDEX

6378.55

0.2387104

8.141254

7523.53

4965.8

HSBC HLDGS PLC

68.45

2.316891

16.01695

78.85

29868820

NIKKEI 225

8752.31

1.114157

3.512096

10255.15

8135.79

HUTCHISON TELE H

3.55

0.5665722

18.7291

3.71

2.35

2700300

HANG SENG INDEX

19518.85

0.5262488

5.882804

22835.03

16170.35

LUK FOOK HLDGS I

16.14

2.411168

-40.44281

46.15

14.7

8295000

MELCO INTL DEVEL

6.37

1.27186

10.39861

10.76

4.3

3445000

CSI 300 INDEX

2552.611

-0.2348922

8.818921

3140.102

2254.567

MGM CHINA HOLDIN

12.34

4.047218

28.64681

17.183

7.6

2684339

TAIWAN TAIEX INDEX

7334.63

0.8455782

3.712483

8842.17

6609.11

MIDLAND HOLDINGS

3.88

1.570681

-1.872688

5.217

2.887

1344000

NEPTUNE GROUP

0.099

-1

-10.81081

0.153

0.08

300000

NEW WORLD DEV

9.2

0.4366812

46.96485

11.298

6.13

16347810

SANDS CHINA LTD

26.3

3.339882

19.81776

33.05

14.9

16157150

SHUN HO RESOURCE

1.15

1.32

0.82

1.086957

9.021498

4.668

2.241

3252473 5948123

KOSPI INDEX

1904.12

0.6528278

4.293054

2192.83

1644.11

S&P/ASX 200 INDEX

4132.444

0.2210106

1.870632

4657.4

3765.9

3943.897

1.625457

3.189568

4234.734

3217.951

FTSE Bursa Malaysia KLCI

1604.39

0.589976

4.812085

1609.33

1310.53

SHUN TAK HOLDING

2.79

NZX ALL INDEX

767.314

-1.186818

5.140274

806.015

700.441

SJM HOLDINGS LTD

14.74

2.21914

17.8678

20.711

10.079

SMARTONE TELECOM

15.02

0.1333333

11.75596

18.5

9.8

872941

WYNN MACAU LTD

18.48

-5.230769

27.48

14.807

12244549

JAKARTA COMPOSITE INDEX

PHILIPPINES ALL SHARE IX

3394.66

0.9036162

11.48162

3518.96

2695.06

HSBC Dragon 300 Index Singapor

542.9

1.01

9.38

ASIA ENTERTAINME

4.12

1.228501

-29.93197

10.8692

3.66

77241

STOCK EXCH OF THAI INDEX

1171.62

-0.1253101

14.26872

1247.72

843.69

BALLY TECHNOLOGI

47.66

1.210448

20.47522

49.32

24.74

479763

HO CHI MINH STOCK INDEX

432.89

0.4198757

23.13754

492.44

332.28

BOC HONG KONG HO

25.14666

3.15

1.81

2200

Laos Composite Index

1016.59

-0.8272606

13.02226

1107.3

876.33

GALAXY ENTERTAIN

2.54

5.723205

35.82888

3.24

1.08

30000 5111825

INTL GAME TECH

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

14.99

-0.596817

-12.84884

19.15

13.12

JONES LANG LASAL

73.2

2.434929

19.4907

99.89

46.01

388738

LAS VEGAS SANDS

46.28

2.59366

8.307982

62.09

36.08

8098499

MELCO CROWN-ADR

11.9

3.658537

23.70063

16.15

7.05

4602017

MGM CHINA HOLDIN

1.5

25.87132

2.2131

1.0025

1000

MGM RESORTS INTE

11.14

2.108158

6.807284

16.05

7.4

10210361

SHUFFLE MASTER

13.83

-0.1444043

18.00341

18.77

7.35

627859

1.85

2.777778

15.08033

2.6037

1.2624

3000

104.52

4.176218

-5.403202

165.4931

95.82

2136587

SJM HOLDINGS LTD WYNN RESORTS LTD

AUD HKD

USD

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CVV2/CVC2

14 |

business daily June 21, 2012

Opinion

Where are the Syrian peacemakers? Christopher Hill

Dean of the Korbel School of International Studies at the University of Denver

where they – especially the Russians – have been the dominant external players. In the absence of concerted international action, the US and Europe have largely weighed in with vocal condemnation of the party committing the overwhelming number of human-rights violations: Assad and his henchmen. They have also highlighted the loss of life in an effort to shame Russia into adopting a more amenable position.

Negotiations missing

uch has been said about the similarities between the chaos in Syria and the Balkan wars of the 1990’s. But, while the prolonged killing may indeed be reminiscent, the political and diplomatic effort that finally ended the war in Bosnia is hardly in evidence today. To date, there has been nothing similar to the Contact Group plan that was hammered out in the summer of 1994 by representatives from Britain, France, Germany, Russia, and the United States, and implemented the following year in Dayton, Ohio, after months of on-thescene diplomacy. In Syria, the only diplomatic process is in the hands of the courageous, if beleaguered, former United Nations Secretary-General Kofi Annan, who has understood – better than many analysts of this latest international outrage – that any lasting political settlement must not be a triumph of one side or the other. No one can watch the ongoing violence in Syria without a

sense of horror at the armed attacks on largely unarmed civilians, overwhelmingly by groups that support President Bashar al-Assad’s regime. But those who say that Syria is on the brink of civil war miss what has become more obvious with each passing day: Syria already is in a state of civil war, one whose battle lines were drawn months ago. On one side is Assad’s minority Alawite tribe, which over the years has attracted secular Sunnis to share in the spoils of a one-party, authoritarian state. But Assad’s coalition is broader than that, which helps to explain how he has been able to hold on to power while other regimes in the region have not. Syria’s Christians, many of its 1.5 million Kurds, and even Damascus-based, secular classes have been disinclined to join what is widely perceived in the country – though not by the rest of the world – as a sectarian Sunni opposition that might not be supportive of cultural pluralism were it to assume power. In the past, characterising as

a civil war a conflict in a complex region was a tacit warning that others should stay out. But the civil war in Syria has much broader ramifications, which could lead to a wider regional conflict. Given this looming threat, it is becoming increasingly clear that staying out of the Syrian mess may not be an acceptable choice for countries that have an interest in a calmer and more democratic Middle East.

A proxy war Ominously, the conflict looks increasingly like a proxy war between Iran and the Sunni Arab states, which regard their own minority Shia populations as a potential Iranian fifth column. Iran has sought to maintain its influence in the Levant (including in Lebanon and among some Palestinian groups) by providing material support to Assad. By contrast, many Sunni Arab states have provided varying degrees of support to the largely Sunni opposition, a hodgepodge of groups that include the Muslim Brotherhood and other

sectarian forces similar to Egypt’s ultra-conservative Salafis. Russia and China, bruised by their loss of face in the NATO-led intervention in Libya in 2011, have sought to keep the international commu-

What is really needed are serious and sustained negotiations among interested international powers on a viable political outcom

nity out of Syria. Both countries fear that intervention – whether militarily or through economic sanctions – could harm their interests in Syria,

But denouncing Assad or Russia is unlikely to produce any effect except to assure domestic audiences that the West is on the side of the angels in the conflict. Likewise, proclaimed support for disparate, barelyknown rebel groups; demands for dead-on-arrival sanctions resolutions; feckless calls for Assad’s departure (as if he plans to take the advice); and half-baked ideas about enforced “safe areas” (an utter failure in Bosnia) are unlikely to spare many lives, much less bring about the endgame that is so desperately needed. What is really needed are serious and sustained negotiations among interested international powers (let’s call them a “contact group”) on a viable political outcome. A “Contact Group Plan” should be carefully worked out with Annan and his team (the only entity at this point that seems to have access to all sides). Most importantly, all of the plan’s stakeholders then need to support Annan, publicly and privately. Publicly declaring support for Annan’s ceasefire plan, and then whispering to journalists that it is “in tatters,” as has occurred repeatedly in recent weeks, will not get the job done. Clearly, a new way forward is needed, and a good start would be a political/diplomatic plan that Annan could sell to the parties. In the Balkans, it was a US team that finally sold the Contact Group Plan to the parties directly involved. We didn’t succeed because we were geniuses. We succeeded because we had tremendous support from every country that wanted to see the horrific conflict in Bosnia brought to an end. The same unqualified support is what Annan – the best diplomat we have out there – needs and deserves. © Project Syndicate

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Chief REPORTER Vitor Quintã Newsdesk Cláudia Aranda, Kristy Chan, Kelsey Wilhelm, Cherry Lee, Terina Cao, Tony Lai Creative Director José Manuel Cardoso Designer Janne Louhikari Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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June 21, 2012 business daily | 15

OPINION

Save Europe’s marriage wires with a trial separation Business Leading reports from Asia’s best business newspapers

Japan Times The U.S. government has expanded an investigation into fires that can start in the doors of several Toyota models. The investigation now includes 1.4 million cars and sport utility vehicles from the 2007 to 2009 model years. When the probe began in February, it involved more than 800,000 Camrys and RAV4 SUVs from the 2007 model year. So far, Toyota and the U.S. government have received 161 complaints of fires involving the vehicles. Nine people have been hurt, according to government documents. All of the vehicles use the same power window switch in the driver’s door.

Business Times Singapore Airlines (SIA) reported on Wednesday that its net profit for the financial year ended in March tumbled 69 per cent to S$336 million (US$265 million), weighed down by a rare loss in the fourth quarter. It was only SIA’s third quarterly loss in its 40-year history of uninterrupted full-year profit. The first took place during the SARS health scare in 2003 and the second during the global financial crisis in 2009. SIA’s performance is regarded as an indicator of industry trends.

The Nation Holiday Inn Express, a midscale hotel brand, plans to open 12 properties in Southeast Asia over the next two years to cash in on the growing economy and tourism industry in the region. The new openings will be in Thailand, Indonesia and Malaysia, with Thailand considered the top market in terms of market size. On Tuesday the company officially opened its first Southeast Asian Holiday Inn Express, in Bangkok, with two more to follow in Phuket and Pattaya.

Business Recorder The textile sector of Pakistan is expected to grow at higher pace during the year 201213 mainly due to concessions given by the World Trade Organization (WTO) to local textile products. “It is hoped that textile products would be exported in huge quantity to European Union after approval of concessions by WTO to Pakistani textile products in February 2012”, said official sources. Exporters are expected to comply with different international obligations, namely ISO Certifications concerning production and export quality.

Robert Hockett

Professor of financial and monetary law at Cornell Law School and a fellow at the Century Foundation

he euro is not a fundamentally bad idea. It just needs a timeout while some critical kinks are worked out. Europe is at least two economies: a northern tier we might call Hanseatica and a southern one we will call Mediterranea. The Hanseatic economy is primarily commercial and industrial, and relies on exports. The Mediterranean economy remains more pastoral and agricultural, and relies on debt for its purchases of manufactured goods from the north. The divide, rooted in topography, climate and culture, is diminishing, but is still in place. This simple distinction underwrites an imbalance – one that the shared currency magnifies and worsens. The euro is undervalued EuroTraialas a Hanseatic currency and overvalued as a Mediterranean one. Northern exports to the south are therefore unnaturally cheap, as are the charges on the credit extended to southerners who are buying the goods. Hanseatic credit balances build up in parallel with Mediterranean debt. In time, the southerners seem like deadbeats to northerners, while northerners look like neo-colonialists to the south. Resentments and acrimony ensue. We have seen this before. Colonial North America was to London and south Britain much what Mediterranea is to Hanseatica today – largely pre-industrial and dependent on the credit extended by the seller. Eventually, the MasonDixon line roughly split the U.S. in a manner not unlike the division in Europe today: an agricultural south and a more commercial, industrial north.

Third, the U.S. steadily took on the attributes of a fiscaltransfer union in this period, with northern money flowing south via federal tax and spending policy. Residents of Mississippi, for example, still receive much more than one dollar back from the federal government for each dollar they pay in to the federal treasury. What is the analogue for 21st

Europe is at least two economies. The divide, rooted in topography, climate and culture, is diminishing, but is still in place. This simple distinction underwrites an imbalance – one that the shared currency magnifies and worsens

Another example Today we find a like phenomenon in “Chimerica,” the de facto currency union that makes Chinese exports to the U.S., and American borrowing from China, unnaturally cheap – with long-term consequences not unlike those seen in Europe. The makings of an answer to the problem in Europe today can be found in the late 19th and early 20th century American experience. Three points are critical. First, the U.S. did not really have a uniform currency until then. Second, once it adopted one – administered by a single central bank, the Federal Reserve, as instituted in 1913 – considerable local autonomy on credit and monetary policy remained in the form of distinct regional Fed banks, operating under board oversight, that were responsive to distinct regional market conditions.

century Europe? Take the three points in reverse order. First, a would-be united Europe must ultimately assume the attributes of a transfer union. The Dutch, Finns and Germans will in effect have to send money down south at some point as New Yorkers and New Englanders do for Alabama and Arkansas, not simply lend it, if they are serious about having one economy. One day the funds might flow in a different direction, as with some southern U.S. states today. The point is that they – funds, not merely credit – have to flow. The union’s the thing. Second, until such arrange-

ments are worked out and put into place, the European Central Bank must operate a bit more like the U.S. Fed did during much of the 20th century and even to some extent today with its regionally federated structure. At a minimum, there should be a North ECB and South ECB, operating in concert and presumably under one board – to manage two closely related, but still partly distinct, currencies.

Local control The North and South ECB branches should likewise maintain partly distinct credit and monetary policies. And like the U.S. Fed regional banks, whose boards are partly made up of local economists, bankers and other business leaders, they must be managed partly by those most affected – northern Europeans in the North ECB, southern Europeans in the South ECB. Jointly managing the intra-euro exchange rate – by adjusting the relative values of the two currencies in response to buildups of northern surpluses and southern debt – will address the imbalances that caused much of Europe’s difficulty in the first place. Excess borrowing or inflationary policies in the south, for example, would devalue its currency relative to the north’s, making it harder to borrow

and buy more imports. As for the north, an excessive reliance on exports to the south would yield a similar selfcorrecting effect: the appreciation of its currency would make its goods too expensive for Mediterranea to buy. Finally, the paired currencies could bear names that reflect their temporary separation. Call them euro 1 and euro 2 – or perhaps Hansa euro and Medi euro. The point is to preserve the north-south distinctions for the time being, while still showing to all that the two would at some point be once again joined. One Europe is still the endgame. The two euro zones’ long-term unity and mutual devotion would survive – and be better for – a needed timeout. Work would immediately begin on the full fiscal and transfer union, and a good plan and firm commitment would counteract any panic effects that a strategic retreat might have. It is said that the euro, like the European Union itself, is as much a political project as it is an economic one. If Europeans still think the political project is worthwhile, then it is worth showing some flexibility in repairing the still- developing economic substratum. The way to do that is with a federalised ECB and two euros. Bloomberg View

16 |

business daily June 21, 2012

CLOSING Greece ‘has a coalition government’

G20 extends free trade vow World leaders extended by one year their vow not to put up new trade barriers at the Group of 20 summit on Tuesday in a lastminute deal that exposed deep rifts over protectionism. The agreement to refrain from new protectionist measures until the end of 2014 was included in the final G20 communique. Mexican President Felipe Calderon said it was hard won and struck only at the very end of two-day talks. “There was resistance from some countries but beyond that we did manage to get a consensus and arrive at an agreement,” he told a news conference after the meeting.

A deal has been struck to form a new Greek coalition government, the leader of the Greek Socialists (Pasok) said. “Greece has a government,” Evangelos Venizelos said, following talks with the conservative election winner Antonis Samaras. Details were expected to be finalised later yesterday. The small Democratic Left party is confirmed to be in the ruling coalition. Democratic Left leader Fotis Kouvelis said “we decided to give a vote of confidence to the government that will be formed”. New Democracy, led by Mr Samaras, has until today to form a government, otherwise the opposition leftist bloc Syriza gets a chance.

Taiwan’s May export orders shrink – third month in a row Weaker demand from Europe and slowing China blamed

aiwan’s export orders contracted in May as expected – the third straight month of export shrinkage. It was further evidence Asia’s manufacturers still face a rough road as they wrestle with weak demand from major markets, particularly crisis-hit Europe and cooling China. The island’s overseas orders are a leading indicator of demand for Asia’s exporters. The government warned of another slow month in June, saying it sees orders contracting about 1.5 percent from a year earlier. In May, orders declined 3.04 percent. The figures reflect a sense of unease among Asia’s top companies, with the latest Thomson Reuters/INSEAD Asia Business Sentiment Survey showing they are less upbeat this quarter on their business outlook than in the previous one. Taiwanese companies in the survey were markedly less optimistic, seeing economic uncertainty as the biggest risk. The foreign orders data released on Wednesday highlight that uncertainty. “The overall picture is that even though the decline was not as bad as the market expected, the trend still remained the same, which was all industries in general were not doing very well,” said Cheng Cheng-mount, an economist at Citibank in Taiwan. May’s 3.04 percent decline in orders was smaller than economists’ expectations for a 3.55 percent fall and April’s 3.52 percent contraction. Compared with April, May’s orders

fell 0.54 percent. In April, they had declined 1.5 percent from March.

Sinking ships The government said the biggest factor in May’s contraction was a decline in orders for ships compared with a year earlier. Orders for chemicals also fell back, while those in the key communication and information sector fell 2.41 percent year-on-year. The decline in orders from China improved to 4.32 percent from the previous month’s 7.8 percent fall,

while those from Europe fell 8.17 percent, much worse than April’s 0.78 percent contraction. One bright spot was a pickup in orders from the U.S. to 5.86 percent growth from the previous month’s 0.79 percent growth. That mirrors figures from Japan earlier on Wednesday showing that its actual exports to the U.S. jumped in May. Nevertheless, all the recent signs have pointed to tough times for Asia’s exporters. Taiwan cut its full-year growth forecast for a sixth time last month, saying Europe’s financial worries had

hurt the momentum for economic growth. Some economists anticipate another cut if Europe’s woes drag on. Meanwhile, Taiwan’s actual exports fell in May for a third month, while exports from South Korea have declined for four out of the five months of 2012. Singapore’s non-oil exports also slipped in May from April. A fall in Taiwan’s machinery imports last month indicated that manufacturers were less optimistic, while the Markit/HSBC PMI survey for May showed that expansion slowed for a second month. Reuters

Japan sails around EU’s Iran oil ban Asian giant first to bypass European sanctions

Keep it coming – Japan bypasses EU’s Iran oil sanctions

apan’s parliament for the first time yesterday issued insurance guarantees for ships bringing in crude oil from Iran. It means Japan will become the first nation to get round new European Union sanctions. The law will take effect on June 27, according to a government official. A new EU move forbids EU insurance firms to cover Iran’s exports. Japan, South Korea, China and India rely on EU companies for oil cargo insurance and together buy two-thirds of Iran’s total oil exports. Iranian oil accounted for nearly nine percent of Japan’s crude imports last year. Japan has reduced the flow already to comply with U.S. sanctions requiring buyers to make sizeable cuts, but wants to avoid more drastic reductions that could drive up energy costs and hurt the world’s third-largest economy at a time when its nuclear energy network is effectively in mothballs. The United States and Europe are trying to squeeze Iran’s revenues from its oil exports to force an end

to its nuclear programme. Tehran says it is using the technology for power generation. Crude exports from OPEC’s second largest producer have already fallen by around 30 percent to around 1.5 million barrels per day – from around two to 2.2 million barrels last year – due to US sanctions. China, Japan, India and South Korea have cut purchases by about a fifth from 1.45 million barrels a year ago. Iran’s top buyer China has yet to detail how it plans to resolve the insurance problem, but industry sources said the country will find a way to keep imports flowing. India’s government, which has also won an exemption to U.S. sanctions, has been trying without success to figure out how it will get around the EU sanctions. South Korea will reduce imports to zero in July due to the insurance ban, industry sources said. Reuters