Galaxy profits up
Cotai project costs also rise
Year I Number 248 MOP 6.00 Wednesday March 27, 2013 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: Vitor Quintã www.macaubusinessdaily.com
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Third time unlucky for trade union bill?
Labour shortages biggest headache for manufacturers A
survey released by the Macau Economic Service shows that of Macau manufacturers interviewed, nearly a quarter identified labour shortages as the most difficult business issue. Two-thirds of manufacturing companies said they faced some degree of labour crunch. The gaps have so far been plugged by importing skilled workers from mainland China. Such staff
already account for about 80 percent of the workforce in the sector, the president of the Macau Textile Merchants Association told Business Daily. But with salaries increasing on the mainland, nowadays many such workers do not want to come to Macau in search of employment, Wong Wa Keong said.
The Legislative Assembly is today likely to reject a draft law on trade unions put forward by legislator José Pereira Coutinho. If it does, it will be the third time in six years. “The assembly is mostly made up of businessmen and this law goes against their interest. Let us see what are the reasons they come up with for why it is not yet the right time,” Mr Coutinho told Business Daily. On the other hand legislators are set to approve changes to the law on hiring non-resident labour, allowing a worker that is voluntarily laid off to look for a new job.
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New media looms over assembly campaign
Brought to you by
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2013-03-29
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HANG SENG INDEX
Macau’s electoral rules are lagging behind developments in social media, Vasco Fong Man Chong, head of the Commission Against Corruption, admitted yesterday. Campaigning proper is allowed only between August 31 and September 13, but digital media are never ‘offline’. The commission also expressed concerns about the way the Association for the Promotion of Macau’s Development, headed by David Chow Kam Fai, has so far interpreted the rules.
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Slap on the wrist for Wynn’s privacy breach Wynn Macau Ltd has paid 20,000 patacas (US$2,500) for breaching the data protection law by publicly disclosing personal information on hotel guests as part of a report on its ousted director Kazuo Okada, the Personal Data Protection Office said. A data protection probe into Venetian Macau Ltd relating to former executive Steve Jacobs has also been concluded. Whatever the findings there, Venetian will have right of appeal.
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March 26
HSI - MOVERS Name
%Day
HENDERSON LAND
5.50
SANDS CHINA LTD
3.77
CHINA RES POWER
3.67
TINGYI HLDG CO
3.37
TENCENT HOLDINGS
3.16
HENGAN INTL
-1.22
CHINA LIFE INS-H
-1.43
CHINA RES ENTERP
-1.72
CHINA UNICOM HON
-1.85
LENOVO GROUP LTD
-2.47
Source: Bloomberg
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business daily March 27, 2013
macau
Galaxy net profits rise 146 pct year-on-year No dividends for now – cash ploughed back into Galaxy Macau expansion Michael Grimes
michael.grimes@macaubusinessdaily
C
asino developer and operator Galaxy Entertainment Group Ltd saw its net profit attributable to shareholders jump 146 percent to HK$7.4 billion (US$954 million) in 2012, it reported to the Hong Kong Stock Exchange yesterday. But Francis Lui Yiu Tung, the company’s vice chairman, told the media at a Hong Kong press conference it would not be issuing a dividend, thinking it best to offer investors long-term value by
reinvesting its strong cash balances into Phase 3 and 4 of Galaxy Macau, its casino resort on Cotai. “I do not for the time being believe that returning capital in dividends is the best approach,” he told journalists. The company said during the meeting to discuss the annual and fourth quarter earnings, that the cost estimates on Phase 2 of Galaxy Macau – likely to be the next major casino opening in Macau in mid-2015 – had risen by 22.5 percent from HK$16
billion to HK$19.6 billion. In the earnings filing it attributed most of the rise to “enhancements and scope adjustments” on the project. In this month’s edition of our sister publication Macau Business magazine, Mr Lui conceded in an interview that market-wide, construction costs on Cotai had risen nearly 30 percent in three years. Union Gaming Research Macau said in reaction to the Phase 2 cost increase: “Like [Galaxy Macau] Phase 1, we believe the company
gets a little more bang for its buck given its wholly owned construction materials business. The increase in cost is primarily attributable to an increased scope, as well as cost inflation.” Yesterday in its 2012 earnings statement, Galaxy stressed that with net cash of HK$4.6 billion as of December 31, its gearing ratio (equity or capital to borrowed funds) had been reduced to zero, compared to 19 percent in 2011. That put it in a very strong position in helping to fund the HK$50 billion to HK$60 billion needed for Galaxy Macau Phases 3 and 4. The hope is to start construction on those portions in late 2013 or early 2014, said the firm. Robert Drake, group chief financial officer, added that the expansion of Galaxy Macau would help guarantee earnings for the company in the “short, medium and long-term”.
No new IPO In response to questions from Chinese-language press, Francis Lui said Galaxy was not under any pressure to raise fresh capital on the markets to fund its expansion, nor were there any plans to launch an initial public offering of shares in Galaxy’s wholly-owned building industry supplies unit K. Wah Construction Materials Ltd.
22.5%
Cost increase for Galaxy Macau Phase 2
Galaxy Macau Phases 2, 3 and 4 – future earnings driver
VIP recovery fuels gaming record hopes
M
acau casinos could see a record-breaking month in March, mostly thanks to a pick up in the still-dominant VIP gaming segment, analysts say. David Bain, an analyst with United States brokerage Sterne Agee forecasts the Macau gaming industry to post revenues of 30.5 billion patacas (US$3.8 billion) this month. “According to our checks, Macau table-only gross gaming revenue is 23.9 billion patacas through March 24,” Mr Bain wrote in a note to investors released on Monday. Up to Sunday the Macau casinos were making an average of 1.05 billion patacas a day, J.P. Morgan’s Kenneth Fong in Hong Kong said in another investor note. If the pace were to remain unchanged during the rest of the
month, then the industry would reach revenues of 31.9 billion – including slot machines –, up by 27 percent year-on-year.
A new monthly record is in sight for Macau gaming winnings
The company inched up its March year-on-year estimate to plus 22 percent or 30.5 billion patacas, seven percent higher that Macau’s alltime monthly record of 28.2 billion patacas set last December. Better house luck on VIP baccarat – the game of choice for Chinese gamblers – has been a factor, Mr Bain wrote. In March 2012 casinos won 2.98 percent of all the money gambled by high rollers, “the second lowest hold rate” of last year, the analyst stressed. “As such, we believe the first 24 days [of March 2013] likely held a healthy hold comparison year-onyear,” Sterne Agee’s Mr Bain added. J.P. Morgan’s Mr Fong said another factor has been a 20 percent growth in VIP revenue, “the strongest since the first quarter of 2012”. “The underlying demand for VIP has been strong so far,” he wrote. And both Mr Bain and Cameron McKnight, senior analyst at Wells Fargo, believe the picture will only get better thanks to “an improving China macro environment” and easier year-on-year comparisons. V.Q.
“We do not have such a plan to hive off the construction business as a separate entity,” said Mr Lui. He added that despite some softening seen in the fourth quarter in the firm’s VIP business – a segment mainly driven by China’s most wealthy – the growth of China’s middle income segment, via so-called ‘premium mass’ table gaming, would more than compensate for increased competition in the VIP market and a high baseline in terms of VIP revenue, which makes it harder to grow on a year-on-year basis. “In 2010 there were 50 million in the [Chinese] middle class. In 10 years there will be 400 million,” he said. “In future that market will be more and more important,” he stated, adding that even capturing a fraction of that 400 million would hugely benefit Galaxy and Macau in general. Union Gaming said in its commentary to Galaxy’s fourth quarter earnings: “VIP volume of HK$315 billion was down eight percent year-on-year and down two percent sequentially. This compares to estimated market-wide same-store VIP volume, which declined one percent year-on-year but was up seven percent yearon-year sequentially. We would attribute the declines in Galaxy’s VIP volume to the impact of new supply in Cotai, in addition to various VIP room expansions at many of the company’s peer’s flagship properties.” Michael Mecca, Galaxy’s president and chief operating officer, told Business Daily: “With an extra 6,000 rooms just at Sands Cotai Central in the past year, there are more opportunities for [VIP] competition in Macau.”
March 27, 2013 business daily | 3
MACAU
Labour biggest headache for factories, survey says The textiles industry estimates that 80 percent of its workers are imported from mainland China Tony Lai
tony.lai@macaubusinessdaily.com
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anufacturers say they cannot find enough workers to sustain their business, relying as they do on imported labour. The results of a survey by the Macau Economic Service, released yesterday, indicate that nearly onequarter of manufacturers thought the shortage of labour was the most difficult problem they faced in the fourth quarter of last year. The next most difficult problems manufacturers faced were a lack of orders and rises in the cost of raw materials. Two-thirds of manufacturers said they were short of labour in the fourth quarter of last year. In the preceding quarter, 62.5 percent had said they were short of labour and a year earlier 59.6 percent had said they were short of labour. The Macau Textile Merchants Association is not surprised by the survey results. “The productivity of the Macau textiles industry mainly relies on imported skilled workers from the mainland,” association president Wong Wa Keong told Business Daily. “But nowadays many of them do not want to come here as they can get similar earnings and job conditions in the mainland,” he said. Human Resources Office data show 4,538 mainland Chinese were
working in manufacturing here last month, 5.2 percent fewer than a year earlier. The bureau’s survey showed 13 percent fewer people were working in manufacturing in the fourth quarter of last year than a year earlier. Mr Wong, who owns New World Knitting Factory Ltd, estimates that mainland Chinese make up about 80 percent of the workforce in the textiles industry. “Mainland workers are responsible mainly for the production process, while Macau employees serve as clerks or supervisors,” he said.
Golden age Over 4,500 mainland Chinese were working in manufacturing here last month
“The government has already fully supported the growth of the textiles industry by any means it could,” Mr Wong said. Manufacturing in general and textiles in particular once dominated the economy, but they have been in decline since the system of preferential tariffs for international trade in textiles and clothing was abolished in 2005. The survey found that despite their difficulties manufacturers were more optimistic in the fourth quarter than at any other time in the preceding 18 months. Over one-third of manufacturers
felt the prospects for business in the subsequent six months were bright, half as many again as a year earlier. However, almost all thought they would see only “slight growth” in their business. “I also expect there will be very little growth in this year’s business as Macau’s exports are not as good as in the past golden age,” said Mr Wong. Statistics and Census Service data show the value of exports grew by 17.1 percent last year to 8.2 billion patacas (US$1 billion), growing at the fastest rate since 1999.
But the value of exports was less than half the 20.7 billion patacas recorded in 2003. And the value of textiles exports continued to shrink last year, tumbling by 21.3 percent to 1 billion patacas. Mr Wong said the city’s textiles were now meant mainly for the U.S. and European markets. “Macau factories can make more complicated items using better materials, so such markets will place orders from here if they are looking for high-quality products,” he said.
CEM to set more substations in place Macau’s sole power distributor posted a five-year-high investment last year, mainly for new substations Stephanie Lai
sw.lai@macaubusinessdaily.com
T
he city’s electricity distributor Companhia de Electricidade de Macau SA (CEM) posted a net profit of 548 million patacas
(US$68.5 million) for 2012, the company confirmed yesterday. But CEM also made a total investment of 980 million patacas last
CEM’s infrastructure investment was higher than profit last year (Photo by: Manuel Cardoso)
year, which was 79 percent higher than the profit, the operator noted in a statement. The company stressed that the high investment in expanding its operational capacity is needed in order to cope with growing demand. The investment mainly covered the construction project of the Lotus substation, which is the second 220kV interconnection between Guangdong province and Macau. Most of the city’s energy is imported from the neighbouring province. Another core project was the construction of an 110kV substation at the University of Macau’s new campus on Hengqin Island, and the corresponding distribution network and interconnection with Macau. The Hengqin substation should be completed by the second quarter of this year.
CEM chairman Franklin Willemyns told media in a January luncheon that the total investment made in 2012 was the highest in five years. The company has planned a 900-million-pataca investment in four new substations over three years to serve the Light Rapid Transit system. The substations should be ready by 2014, the company’s spokeswoman told Business Daily. CEM’s shareholders met yesterday to review the annual results but they have not yet discussed if any tariff changes will take place this year. Last year, due to “unfavourable fuel prices” and “unavailability of natural gas”, the company had to import a record-high 88.8 percent of the city’s power supply from mainland China The remaining power was generated here from fuel oil.
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business daily March 27, 2013
MACAU Brought to you by
HOSPITALITY Employment trends Retail trade, transport by sea and air transportation depend to a large degree on tourism, so employment in these industries is usually sensitive to tourist flows. The latest data on manpower needs and wages show-retailing accounts for a growing proportion of employment. At the end of last year 6.8 percent of all employees worked in retailing. At the end of 2009 only 5.7 percent did. Together, maritime transport and aviation employed about 2,000 people at the end of last year. The chart below shows the variations in employment in these three industries in the past three years. The recovery from the crisis period in 2008-2009 was not the same for all of them.
In 2010, when total employment barely changed, the number of people working in retailing and shipping increased appreciably. The number working in retailing rose by 6.4 percent and the number working in shipping rose by 10.7 percent. In contrast, the number working in aviation fell by 17.6 percent. The following year, employment in aviation recovered somewhat, but employment in shipping fell slightly. Last year employment in both industries grew. But while the number working in aviation inched up by 6.1 percent, the number working in maritime transport leapt by 51.4 percent. This suggests that tourist flows are changing, and that there is some degree of substitutability between the two modes of transportation. Annual growth in the number of people working in retailing accelerated to 14.8 percent last year from 7.6 percent in 2011. Growth in employment in all three industries was faster than the average rate of growth in employment generally, which was 4.72 percent.
Loophole allows early campaigning online The law seems powerless to stop the use of social media for campaigning for the Legislative Assembly elections Stephanie Lai
sw.lai@macaubusinessdaily.com
T
he head of the Commission against Corruption doubts that the law can prevent campaigning via online social media outside the permitted campaign period for this year’s elections to the Legislative Assembly. “We are still using a legal system dating from 2009 to deal with the 2013 election,” the head of the commission, Vasco Fong Man Chong said yesterday. “Unlike four years ago, now we have Wechat, Whatsapp, Viber and Facebook, which all are media that the existing laws cannot directly regulate when it comes to any illegal electoral campaign,” Mr Fong told reporters after a meeting with the Election Commission. Polling day is September 15. Campaigning is allowed only between August 31 and September 13. Any form of campaigning before or after is illegal. Mr Fong expressed his hope that the electoral process will be transparent and just. He urged the public to be on the alert for any breaches of election laws. “Probably, this year’s legislative election will be like today’s weather, which is overcast and raining,” Mr Fong said, “but, as the saying goes, there will be sun after the storm.” Mr Fong said the Election Commission, chaired by Judge Ip Son Sang, would not be idle. “We will strive to make the electoral process fair, transparent and ethical,” he said. Mr Fong said the Commission against Corruption would look into the behaviour of the Association
for the Promotion of Macau’s Development. The head of the association, David Chow Kam Fai, urged its members at a meeting on Monday to support the bid of his wife, Melinda Chan Mei Yi, for reelection to the assembly.
Normal and conventional Ms Chan will lead the association’s Alliance for Change ticket of candidates for directly-elected seats in the assembly. The association’s vice-president, Wu Kam Hon, and vice-director, Andy Wu Keng Kuong, are also on the ticket. Mr Chow called for members to subscribe to the nomination of the electoral ticket containing his wife’s name. He said those that did so could bring up to three companions to a party he would throw this summer. The law says at least 300 residents must subscribe to the nomination of a ticket of candidates for directlyelected seats in the assembly. The association, which provides community services, says it has over 4,700 members, over 3,000 of them active. “At the moment we cannot say they have or have not violated the electoral laws,” Mr Fong said. “It is normal and conventional that at the current stage candidates will try to seek supporters for the upcoming election,” he said.
J.I.D.
31.5 %
RISE IN EMPLOYMENT IN RETAILING SINCE 2009
The Commission against Corruption and the Election Commission will strive to make this year’s elections ethical, Vasco Fong says
“But any campaign strategies that involve threatening, fraudulent means or abusing work relations to affect the will of voters are all illegal, which we will not tolerate.” The Commission against Corruption has set up a round-theclock hotline for the public to use to report any suspicions they have about electoral corruption. The authorities will open soon a special website on the Legislative Assembly elections, which will describe election problems encountered before and contain the answers to questions about the election rules.
March 27, 2013 business daily | 5
MACAU
Third strike in sight for trade union bill Busy afternoon at the assembly with rules for hiring non-residents also in discussion Vítor Quintã
vitorquinta@macaubusinessdaily.com
T
he Legislative Assembly will today vote on the draft for a new trade union bill put forward by legislator José Pereira Coutinho, for the third time in six years. The six assembly members affiliated with the New Macau Association and the Macau Federation of Trade Unions have already confirmed they will support the law. But Mr Coutinho admitted the assembly is likely to reject his third bid to introduce legislation to govern unions, just like his previous efforts in 2007 and 2009. “The assembly is mostly made up of businessmen and this law goes against their interest. Let us see what are the reasons they come up with for why it is not yet the right time,” he told Business Daily. Another effort launched by former Macau Civil Servants Association head Jorge Fão in 1992 was also rejected. Mr Coutinho is the current president of the association. The draft would give trade unions the power to call for a strike and to legally represent workers while benefitting from an exemption in court fees.
Any employer found guilty of hindering workers’ trade union freedom could face a fine of up to 50,000 patacas (US$6,250) per worker. Non-resident workers would also be allowed to form unions and have a representative at the Standing Committee for the Coordination of Social Affairs.
Food safety On the other hand the assembly is likely to approve changes to the law on hiring non-resident labour, allowing a worker that is voluntarily laid off to stay in Macau and look for a new job. However the outside worker would be limited to a job of the same kind as his or her old one. The government has rejected claims that the limits on changing jobs are discriminatory. The legislators could also approve today the food safety law, which grants all the power related to food safety supervision to the Civic and Municipal Affairs Bureau. The law will only be enacted 180 days after it is published in the
There are five draft bills on the Legislative Assembly agenda this afternoon
Official Gazette, in order to give the food and beverage sector more time to prepare for the new rules. The assembly is also set to take a first look at a bill seeking to increase the pay of civil servants by 6.06 percent. It will not be backdated to the beginning of this year, though. Both Mr Coutinho’s association and the Chinese Civil Servants
Association have expressed disappointment with the increase, stressing it was lower than last year’s 6.11-percent inflation. Nonetheless the legislator will vote in favour of the wage hike, while admitting that it would be hopeless to try to change the draft later on, within one of the assembly’s standing committees.
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business daily March 27, 2013
macau
Wynn fined for privacy breach
Brought to you by
Sands personal data probe in final stage, waiting for the end of appeal period
Festive prices
Tony Lai
The annual rate of inflation slowed slightly in January, pointing to a consolidation of the easing in price increases in the latter part of last year. January was the fifth month in a row with homologous rates under 6 percent. That represented a neat decrease compared to the figures from early 2012. Then, the rate stood at about 6.75 percent. But annual inflation last month was 6.16 percent, apparently reversing the trend towards easing. But we must be careful here. The monthly values for several economic variables are sensitive, in this part of the year, due to the Lunar New Year holidays. The holiday period fell this year in February but last year in January. Hence, the values for January and February must be read with caution, having the possible effects of that festivity in mind.
tony.lai@macaubusinessdaily.com
Wynn Macau disclosed ‘sensitive data’ of its hotel customers to a third party
G If we select the sub-indices more likely to be affected by the inflow of tourists and the festive mood, what do we see? Food and beverages, recreation and culture, and transport all have risen neatly last month. In February, food cost 7.14 percent more than a year earlier, remaining the main driver of inflation. Transportation prices reverted a downward trend and rose by 2.1 percent. Recreation and culture cost 11.7 percent more. Exceptionally, the cost of clothes and shoes fell. But it displays such sharp seasonal oscillations that any other effects may be easily masked. All-in-all, consumer prices over the past two years does not yet make clearly evident a sustained change in trend in the long run. J.I.D. The content of this column is the work of Business Daily’s journalists.
12.3 % Average rise in consumer prices since 2011
aming operator Wynn Macau Ltd was fined 20,000 patacas (US$2,500) for breaching the privacy law by publicly disclosing personal information of hotel guests as part of a report on removed director Kazuo Okada. The Personal Data Protection Office said Wynn Macau has already paid two 10,000-patacas fines for breaching two principles regarding the handling of personal data. Wynn Macau disclosed “sensitive data” of its hotel customers to a third party, which was “already beyond the reasonable expectation of the hotel customers”, the office said in its annual report. The gaming operator also failed to get the regulator’s approval before transferring data outside Macau, to the United States where its parent company is based, the office added yesterday. Wynn Macau declined to comment. The watchdog’s case refers to an investigation launched by Wynn Resorts Ltd in late 2011 on its former shareholder Mr Okada. Wynn said the Japanese pachinko tycoon gave gifts and pay-offs to Philippines gaming regulators and South Korean officials for establishing business there. The data office said Wynn Resorts
demanded from its subsidiary here “the personal data of a number of individuals, including those officials” contacting Mr Okada and staying at Wynn Macau hotel. The data includes “the people’s period of stay in the hotel, expenses and payment of their purchases and entertainment in tandem with their travel arrangement in Macau,” the report said. Chan Hoi Fan, the data office coordinator, declined to reveal any further details of the case.
Sands probe “We will not disclose the name of the company and the [case] details as… this would serve as another kind of punishment to the company,” said Ms Chan, who first refused even to identify Wynn Macau. When asked whether the fine was too light, she said: “The penalty was made in consideration of factors, namely [that it was a] first-time offence and their [Wynn’s] cooperative attitude during investigation.” “This case also does not involve any serious violation, the fine is not the lowest amount [stated in law] and the impact was limited as it only involved a few individuals,” she continued. According to the law, any breach
on data protection could lead to fines between 10,000 and 100,000 patacas. Venetian Macau Ltd, a subsidiary of rival gaming operator Sands China Ltd, was also caught in a similar case related to Steve Jacobs, Sands China’s former chief executive. It was reported that Sands China and its parent company Las Vegas Sands Corp moved documents from Macau to the United States in 2010 without prior authorisation from the data office. Ms Chan said the probe was completed but declined to disclose the result. “The process has entered the final stage and the company still has the chance to appeal [so] we need to wait for the appeal period [to end],” she said. “They have the right to an administrative appeal as well as a legal appeal,” said Ms Chan, adding the appeal period ends in “early April”. A spokesperson for Sands China declined to comment. The data office handled 118 investigations last year, up by 37.2 percent year-on-year, but only seven cases, or 5.9 percent of the total, led to penalties. Ms Chan said they put emphasis on education and promotion of data protection while penalties were just “additional means”.
March 27, 2013 business daily | 7
MACAU
Profit-sharing the way to go, academic says Sharing the fruits of corporate success benefits employers as well as employees, a study finds Tony Lai
tony.lai@macaubusinessdaily.com
M
ore Macau companies, even small and medium enterprises, should adopt profit-sharing, which is advantageous to bosses as well as workers, an authority on human resources says. Sharing the fruits of a company’s success – awarding bonuses linked to the company’s performance in the long run – is uncommon here, but may begin to catch on. “Many modern international corporations located in China, Macau and Hong Kong have already started this process,” Tony Fang, a visiting academic from Harvard University, said on Monday. “The local operations should follow this practice, but I don’t think it is as widespread as we would have hoped for,” Mr Fang told Business Daily at the University of Macau, where he presented the results of a study of profit-sharing by enterprises in Canada. “People often think this is a zero-sum game: either I win and you lose or vice-versa,” said Mr Fang. “But in this case not only me but lots of practitioners and academics in this field think it is a win-win
Profit-sharing could be particularly useful during an economic downturn, says Mr Fang
situation for both workers and employers.” He said profit-sharing could reduce compensation risk and running costs, particularly during an economic downturn.
Mr Fang said this was because bonuses replaced fixed pay increments. “In tough economic times you don’t need to pay for a fixed pay increase, and there is also no profit
to share,” he said. He said profit-sharing could ensure employment stability, as companies did not need to lay off large numbers of workers during downturns. Profit-sharing could “motivate the employees for greater efforts and higher productivity”, Mr Fang said. “The employers can also use that to retain and attract highly-skilled employees.” His study found profit-sharing is of greater benefit to big enterprises than small ones, as a small enterprise’s business is more likely to drop off during the early stages of a profit-sharing scheme. But Mr Fang said: “In the beginning you have to support the costs, but eventually you will benefit from it financially.” There is no official tally of small enterprises in Macau, but the commonly accepted estimate is that over 90 percent of businesses here are small ones. Mr Fang’s study found that in spite of fears that profit-sharing means lower fixed rates of pay, it actually means higher earnings for employees.
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business daily March 27, 2013
GREATER CHINA Li Ning posts first annual loss since 2004 listing Chinese sportswear group Li Ning Co Ltd reported yesterday a steeper-than-expected 1.98 billion yuan (US$318.8 million) loss for 2012, its first annual loss since it listed in 2004, hit by inventory charges and fierce competition from domestic and foreign brands. The result compared with a profit of 385.8 million yuan in 2011 and was deeper than the average forecast of analysts for a 1.09 billion yuan loss, according to Thomson Reuters Starmine SmartEstimate. China’s economic slowdown had resulted in inflated stock levels and depressed earnings for retailers, including local and foreign sportswear players – a sharp reversal of fortune after an expansion blitz that followed the 2008 Beijing Olympics. Li Ning, backed by Singapore sovereign fund GIC and U.S. private equity firm TPG Capital, had warned in December of a big loss in 2012 as it racked up as much as US$288 million in expenses by buying back inventory from distributors. The company had said it expected inventory charges to cut its fullyear earnings by up to 1.8 billion yuan. “Market and industry conditions continue to be difficult, and the Group’s financial performance is expected to remain challenging at least in the first half of 2013,” company founder and chairman Li Ning said in a statement. Li Ning, which competes with larger domestic rival ANTA Sports Products, Adidas and Nike, recorded a 2.02 billion yuan loss for the second half of 2012, deeper than market estimates of a 1.13 billion yuan loss. In the first half, it had posted an 85 percent drop in profit to 44.3 million yuan. Revenue in 2012 fell to 6.74 billion yuan from 8.93 billion yuan in the previous year.
Guangdong property crac hints at others to come Home prices in Guangzhou jumped 8.1 pct in February Xiaoyi Shao and Melanie Lee
A
plan by southern China’s Guangdong province, the first in the country to implement strict property cooling measures as directed this month by the central government, may signal at least 24 other cities could be next in line for a crackdown. Two of the four cities singled out by the provincial administration late on Monday – Guangzhou and Shenzhen – feature right at the top of the list of 70 cities that have seen some of the sharpest home price spikes so far this year, according to Reuters calculations of official home price data. The selection of those two cities, which topped and tailed a group of 26 at the end of 2012 with similar rates of appreciation, suggests there could be a wider target group in the central government’s sights than the February data alone imply. In 2012, Guangzhou’s average home prices on an unweighted index basis were tied for fastest rising
among the 70 cities tracked by the National Bureau of Statistics (NBS), gaining 2.3 percent over the year to share the top spot with Urumqi in western China’s Xinjiang province. Average home prices in Shenzhen rose 0.8 percent last year. Another 23 cities were in that 0.8-2.3 percent range. Home prices in Guangzhou jumped 8.1 percent year-on-year in February, according to official data from the NBS, while those in Shenzhen rose 5.7 percent in the same period. Of the other 68 cities the NBS tracks, only price rises in Beijing kept pace on an unweighted indexed basis, gaining 5.9 percent year-onyear in February.
Crackdown coming On a population-weighted basis as derived by Reuters from official data, Guangzhou home prices jumped 18.6 percent in February from a year ago,
Govt to resume electric car subsidies Gome swings to loss amid cost cuts Gome Electrical Appliances Holding Ltd, China’s second-largest electronics retailer, posted a narrower-than-estimated loss last year as it shuttered some of its less profitable stores and curbed expenses. The company had a net loss of 596.6 million yuan (US$96 million) in 2012, compared with a profit of 1.84 billion yuan a year earlier, it said in a filing to the Hong Kong Stock Exchange yesterday. That was smaller than the 616.3 million yuan average loss estimate of 15 analysts surveyed by Bloomberg News. Gome had warned of the loss in a January 28 statement to the exchange. The Beijing-based retailer is adding more higher margin products and upgrading its main stores as it seeks to revive results. It returned to profitability in the fourth quarter with earnings of 90 million yuan, according to a powerpoint presentation at the company’s earnings press conference. “The worst is over for the company,” president Wang Jun Zhou said at a press conference. “This year, we will see the results of changing our product mix and our cost control measures coming further through.” The company along with larger rival Suning Commerce Group Co. is expanding into e-commerce as more Chinese buyers increase their purchases online. China’s online-retail transactions are projected to more than double to 2.57 trillion yuan between 2012 to 2015, according to researcher Analysys International. Gome also faced a weaker Chinese economy and price wars with Nanjing-based Suning and 360buy Jingdong Inc. last year. Sales fell 20 percent to 47.9 billion yuan. Reuters/Bloomberg News
New standards for the industry to be out soon, says BYD chairman Alison Leung and Fang Yan
C
hina may resume subsidies for electric car buyers as early as next month, said the chairman of BYD Co Ltd, which has a partnership with Daimler AG to build a car running solely on batteries. “The previous subsidy was for 2010 to 2012, so it terminated on December 31, 2012. Now, the government is setting up standards and they should be announced in April or May,” Wang Chuanfu told reporters on the sidelines of a company event in Hong Kong, without saying where he got the information. Beijing started offering 60,000 yuan (US$9,700) handouts to buyers of electric cars three years ago in its bid to fight pollution and reduce the country’s reliance on pricy oil that’s mostly imported. But electric cars are still a rarity in China due to the lack of charging facilities and high battery costs. A renewal of the subsidy programme, which industry insiders and experts have widely anticipated, would come hand-in-hand with China’s so-called new energy policy that aims to put 500,000 such new energy cars on the road by 2015 and as many as 5 million of them by 2020. The policy was announced last July. Beijing defines new energy cars as
BYD plans to roll out a new electric car in the first half of 2014
all electric battery cars and plug-in hybrids. Conventional gasolineelectric hybrids such as Toyota Motor Corp’s Prius are not counted. China is committed to those aggressive goals to kick-start demand for electric cars and is unlikely to waver on them because it has only been less than a year since it formalised the 2015 and 2020 objectives, industry executives say. They say that for China to achieve those goals, it is likely to broaden the definition of new energy cars to include conventional gasolineelectric hybrids. BYD’s Mr Wang said that his company plans to roll out the Denza, an electric car built with Daimler, in the first half of next year.
KEY POINTS Guangdong, Shenzhen home prices among fastest rising Data shows additional 24 cities with similar yr-o-yr rises More cooling policies expected from local govts by end-March
while Shenzhen gained 11.4 percent. If those two cities provide some guide to the potential upper and lower bounds of price gains that were deemed by China’s State
Beijing appoints new top energy regulator China has appointed Wu Xinxiong, the former chairman of the State Electricity Regulatory Commission, as the chairman of its top energy regulatory body, the National Energy Administration. The appointment comes after widespread speculation in recent weeks that Liu Tienan would be replaced at the helm of the administration which is responsible for devising energy policies. The National Energy Administration replaced Mr Liu’s name with Mr Wu’s on its official website, but gave no further details on the appointment. In a government restructuring plan announced this month, China said it would dissolve the State Electricity Regulatory Commission (SERC) and pass its responsibilities over to the NEA, which is a unit of the powerful state planning agency, the National Development and Reform Commission. The move was part of China’s efforts to create a unified policymaking process for the energy sector, where responsibilities have been scattered across more than a dozen government ministries and bureaus.
The company had previously said the car would hit show rooms this year. Mr Wang would not say why the proposed launch date had been postponed. BYD, backed by U.S. billionaire Warren Buffett, said on Sunday that new and upgraded models would help boost its first-quarter profit after a plunge in 2012 earnings. Reuters
March 27, 2013 business daily | 9
GREATER CHINA
ckdown
Council, or cabinet, to be rising “too quickly” when it issued its latest property tightening guidance on March 1, up to 24 more could be in the government’s sites. “These cities, including Beijing and Shanghai, where home prices have risen faster than others, face greater pressure from the central government and they are expected to unveil stricter detailed property cooling measures,” said Liu Yuan, a head of research at China’s biggest property brokerage Centaline Property Agency Ltd. “But we still need to wait and see the effect of the cooling measures as it depends on how local governments are going to enforce them,” said Mr Liu. On a weighted basis, Chongqing prices leapt 22.4 percent in February year-on-year, the highest in the country based on NBS data of the 70 major Chinese cities its home price index tracks. Beijing was close behind, up 21.8
Average home prices in Shenzhen rose 0.8 percent last year
percent, while Shanghai home prices gained 14.6 percent. The central government said earlier this month it wanted local governments, in areas where property prices were rising too quickly, to strictly implement rules which impose a 20 percent capital gains tax and higher down payments for second-home buyers. The crackdown came after data showed China’s new home prices rose in February from a year ago for a second consecutive month.
Next Media’s Taiwan print asset sale plan falls through
Next Media going back to the print business
N
ext Media Ltd, controlled by billionaire Jimmy Lai, said a plan to sell its print business in Taiwan for NT$16 billion (US$536 million) to investors has fallen through. An option to extend the sale agreement for the assets, which include the Taipei-based Apple Daily, won’t be taken up, Next Media’s spokesman Mark Simon said yesterday in a telephone interview, without elaborating. The plan to sell its television assets in Taiwan is still ongoing, he said. Protesters against the administration of Taiwan President Ma Ying-jeou in January called on regulators to block the sale of
Next Media’s Taiwan assets to local tycoons to prevent the concentration of media interests. Mr Lai had wanted to sell his Taiwan print assets to businessmen including Tsai ShaoChung, whose family owns China Times Group, which controls the Commercial Times newspaper, Taiwan’s CtiTV and at least five other media outlets according to its website. Next Media’s shares have declined 16 percent this year, compared with the 1.8 percent decline on Hong Kong’s benchmark Hang Seng Index. The stock was suspended yesterday pending a statement. Mr Lai’s Apple Daily and the Tsai family’s China Times will have a combined newspaper market share exceeding 45 percent, according to National Chung Cheng University’s Kuang Chung-Hsiang, raising regulatory concerns. Buyers for Next Media’s print assets include William Wong of the Formosa Plastics Group, Chinatrust Charity Foundation chairman Jeffrey Koo Jr. and Lung Yen Life Service Corp. chairman Li Shih-tsung. ‘‘Next Media is going back to the print business in Taiwan,” Mr Simon said. The Taipei-based Economic Daily News yesterday reported that the deal may fall through because Want Want China Holdings Ltd chairman Tsai Eng-meng, whose son is one of Next Media’s Taiwan buyers, sought to pare the stake purchase to avoid antitrust queries into the family’s media ownership. Bloomberg News
Wealthy Chinese tend to park money in property because they have few other domestic investment options given relatively undeveloped mutual fund and bond markets and broad consumer distrust of local equity markets. Chinese home prices more than doubled in 2009 after Beijing rolled out a massive economic stimulus package to combat the global financial crisis. The central government has since been trying to rein them in
NO
MIN
with a series of campaigns that have variously curbed credit and tightened ownership rules. A lack of strict implementation has been largely to blame for patchy results, analysts say. China property stocks marginally outperformed a down market yesterday, with traders gauging that the plan from the Guangdong authorities was in line with the central government’s directive of March 1, which had sparked a property share sell-off. Reuters
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10 |
business daily March 27, 2013
ASIA Philippine imports fall in January The Philippines’ imports fell on an annual basis for the first time in five months in January, sharply slowing from December’s double-digit growth and raising worries about the country’s key electronics exports. Imports reached US$4.72 billion in January against US$5.30 billion in December. Imports were US$5.13 billion a year earlier. The fall in imports in January was the biggest drop since April 2012 when they fell 13.6 percent. “This means that the outlook for electronic exports remains subdued, as exports are dependent on electronic imports,” said Trinh Nguyen, economist at HSBC in Hong Kong.
Tycoon raises stake in Shangri-La Robert Kuok, Malaysia’s richest man according to Forbes, has increased his equity stake in locally listed Shangri-La Hotels (Malaysia) Bhd, according to stock exchange filings late on Monday. The luxury hotels chain said Kuok Brothers Sdn Bhd, a family investment vehicle of Mr Kuok, bought a 22.2 percent stake or 98 million shares in Shangri-La from Standard Chartered Private Equity Ltd on March 20. The purchase raised Mr Kuok’s interest, via Kuok Brothers and Hong Kong-listed Shangri-La Asia Ltd, in Shangri-La to 74.98 percent from 52.78 percent, raising the possibility of an offer for the outstanding shares.
Panasonic solar unit to post profit Panasonic Corp., the Japanese electronics maker forecasting an annual loss, said its solar-panel operation will probably remain profitable amid growing demand from Japanese homeowners. Shipments in February reached a record level as Japan’s feedin-tariff system for electricity triggered demand for rooftop systems, Kazuhiro Yoshida, who heads the business, said in an interview in Tokyo yesterday, declining to elaborate.
Kuroda vows to meet goals Haruhiko Kuroda said he wants to reach 2 percent inflation in two years and pledged to buy more government bonds, underscoring the new Bank of Japan chief’s efforts to accelerate an end to falling prices. “Achieving the 2 percent inflation target in two years is something that I have in my mind,” Mr Kuroda said yesterday in the lower house of parliament. He said the BOJ may scrap a rule limiting the scale of asset buying and consider purchasing more bonds with longer maturities.
S. Korea growth slows to 2 pct in 2012 Economy expands at slowest pace since global downturn Eunkyung Seo and Cynthia Kim
S
outh Korea’s economy expanded last quarter at the slowest pace since the global recession, underscoring the case for stimulus by the new government and concern that a weaker yen will curb exports. Gross domestic product rose 1.5 percent from a year ago, unchanged from January’s initial estimate, the Bank of Korea said yesterday in Seoul. GDP grew 0.3 percent from the third quarter, the second-lowest rate since 2009, which compares with the original figure of 0.4 percent expansion. The economy expanded 2 percent in 2012 after a 3.7 percent gain in 2011, the Bank of Korea said yesterday. Per capita gross national income rose to US$22,708 last year from US$22,451 in 2011. Slower growth in Asia’s fourthlargest economy strengthens the rationale for a supplementary budget that President Park Geun-hye may announce this week. It may also add
pressure for an interest-rate cut as early as April, after Finance Minister Hyun Oh Seok said last week that the yen, down 18 percent against the won in the past six months, is “flashing a red light” for South Korean exports. “A rate cut in April or within the second quarter would make sense not only because of today’s downward revision, but also because an interestrate cut then will maximise the effect of stimulus coming soon,” said Sun Yoo, a Seoul-based economist at Woori Investment & Securities Co. The yen has fallen against all 16 major currencies tracked by Bloomberg in the past six months. The won rose 0.1 percent against the dollar, poised for a second straight gain. The Kospi stock index was up 0.3 percent after advancing 1.5 percent yesterday.
Revised growth The Finance Ministry is expected to release its revised growth outlook
The market does not like the fact that the central bank and the government are giving different signals right now Huh Kwan, Korea Investment & Securities Co.
for 2013 later this week. Earlier this month, Bank of Korea Governor Kim Choong Soo and his board held the seven-day repurchase rate at 2.75 percent after a 25 basis-point
Japan court rules some election results ‘invalid’ Rulings force Abe to confront voter disparities
J
apan’s politicians were grappling with possible implications yesterday after a high court said some general election results were invalid, with other rulings expected later in the day. The Hi ro s hi m a H ig h C ou r t on Monday for the first time declared an election invalid due to gerrymandering, voiding the result in two districts. The ruling said a huge disparity in the value of votes, caused by the vastly differing sizes of constituencies, meant some voters were partially disenfranchised. Four courts this month ruled the lower house contest, in which the value of a vote in the least populous district was worth 2.43 times that in the most populous one, unconstitutional while ratifying the results. “We humbly accept the severe court ruling, and will take appropriate measures after having a close look at the verdict,” Chief Cabinet Secretary Yoshihide Suga told a news conference. Prime Minister Shinzo Abe’s government faces seven other district and high court rulings over the weight of votes in Tokyo, Osaka, and other parts of Japan. The rulings invalidating part of December’s election because of the out-sized weight of rural votes is putting pressure on Mr Abe to rectify the situation with legislation.
Several rulings this month ruled the lower house contest unconstitutional
While the rulings are subject to appeal to the Supreme Court, they raise the risk of some lawmakers being ousted from their seats. The decisions may force Mr Abe, who is enjoying record popularity over his economic policies, to address electoral reform before July’s upper house elections that could cement his hold on power. “The main thing the courts have done is tell the Diet to fix it, and I think something will be done quite rapidly,” said Steven Reed, a political science professor at Chuo University in Tokyo. “This could be an image problem for Abe, whose government is doing very well. This is a glitch he needs to fix.” While the Diet passed a bill last year aimed at reducing the maximum vote disparity, it
postponed implementation. ThenPrime Minister Yoshihiko Noda reached a deal with Mr Abe’s Liberal Democratic Party in November on legislation cutting the number of seats from rural prefectures by five, reducing the maximum disparity to below 2 to 1. The realignment wasn’t put into place for the December vote, and a legislative panel on the issue plans to release its proposal on March 28, according to the Internal Affairs Ministry. “Efforts are being made to regroup constituencies, including reducing the number of seats by five. The government, upon receiving the recommendations, would like to take legal actions promptly,” Mr Suga said. AFP
March 27, 2013 business daily | 11
ASIA
Financial reform push needs to avoid ‘overload’ Head of the RBA calls for ‘careful and sustained efforts’
A
Exports fell 8.6 percent in February from a year earlier
cut in October. “The market does not like the fact that the central bank and the government are giving different signals right now,” said Huh Kwan, a Seoul-based fixed-income trader at Korea Investment & Securities Co. “More are betting on a cut in April given that economic growth has been emphasized by the new government so much of late.” The won’s gains have be en tempered by tensions with North Korea, which has threatened pre-
emptive nuclear strikes and earlier this month renounced the 1953 armistice ending the Korean War. The Bank of Korea in January pared its forecast for this year’s economic growth to 2.8 percent from an October estimate of 3.2 percent. The country’s exports fell 8.6 percent in February from a year earlier. This year’s month had fewer working days because of the Lunar New Year holiday. Mr Hyun said March 22 that he would use “all possible measures to
speed the economic recovery” and indicated that the government support would be announced this month. The finance minister has vowed to consider the “problem” of a sliding yen as part of his “policy package”. He has indicated that the government’s plans to boost growth may include fiscal and housing-market measures. Interestrate decisions are part of the government’s policy package, he said yesterday. Bloomberg News
N. Korea threatens to strike Hawaii, U.S. mainland China urges restraint after Pyongyang threats
N
orth Korea put its artillery and “strategic” rocket units on combat ready status yesterday, with orders to prepare for strikes against the U.S. mainland, Hawaii and Guam, state media reported. A statement from the Korean People’s Army supreme command ordered “all artillery troops including strategic rocket units and long-range artillery units to be placed under class-A combat readiness”. The units should be prepared to attack “all U.S. military bases in the Asia-Pacific region, including the U.S. mainland, Hawaii and Guam”, as well as South Korea, said the statement carried by the Korean Central News Agency. China said yesterday it hopes all sides on the Korean peninsula can exercise restraint. Chinese Foreign Ministry spokesman Hong Lei made the comments to reporters at a daily briefing. Despite its successful long-range rocket launch in December, most experts believe North Korea is years from developing a genuine intercontinental ballistic missile that could strike the continental United States. Hawaii and Guam would also be outside the range of its medium-range missiles, which would be capable, however, of striking U.S. military bases in South Korea and Japan. The supreme command announcement came days after the South Korean and U.S. militaries signed a new pact, providing for a joint
military response to even low-level provocative action by North Korea. While existing agreements provide for U.S. engagement in the event of a full-scale conflict, the new protocol addresses the response to a limited provocation such as an isolated incident of cross-border shelling. It guarantees U.S. support for any South Korean retaliation and allows Seoul to request any additional U.S. military force it deems necessary.
Further sanctions Japan and Australia plan to sanction North Korea’s Foreign Trade Bank as part of U.S.-led efforts targeting Pyongyang’s main foreign exchange bank for the role
KEY POINTS N. Korean artillery, rocket units in ‘combat posture’ Seoul detects no signs of unusual activity Doubts over capability to strike continental U.S. – experts
Washington says it has in funding the country’s nuclear programme. A Japanese government source said Tokyo could act within the next two to three weeks. Australian Foreign Ministry sources said Canberra might also unveil sanctions soon. A senior U.S. official said the Obama administration was trying to convince other governments to crack down on the bank after Washington announced its own measures this month. David Cohen, the U.S. Treasury undersecretary for terrorism and financial intelligence, told reporters he raised the issue of the bank with Chinese officials in Beijing last week, although he did not say what their response was. Experts said the U.S. move was designed to make foreign banks that do business in the United States think twice about dealing with the Foreign Trade Bank, much the same way banks have become wary about having ties with financial institutions in sanctions-hit Iran. “It was obvious to us, fairly early on, that this bank is key to the North Korean ability to finance and fund” their nuclear and ballistic missile programmes, said the senior U.S. official, who spoke on condition of anonymity. “And so it was decided it would make sense to do everything we could to put pressure on their proliferation efforts and their WMD [weapons of mass destruction] efforts by putting pressure on this bank.” AFP/Reuters
ustralia should use its chairmanship of the Group of 20 next year to focus on implementing the global financial regulations already agreed upon rather than coming up with yet more new rules, the head of the country’s central bank said yesterday. Reserve Bank of Australia (RBA) Governor Glenn Stevens said the welter of reforms set in process since the global financial crisis were already having unintended consequences and adopting any more could cause regulatory “overload”. “By 2014 we will have reached a point in the financial regulatory sphere where the G20 should be looking for careful and sustained efforts at implementation of the regulatory reforms that have already been broadly agreed, but being wary of adding further reforms to the work programme,” Mr Stevens said in a speech at a regulations conference. “Lest this be considered too weak a position, let us remember how much is being attempted.” Mr Stevens said some of the early reform proposals were already running into complications and having to be “tweaked”, sometimes years before they were even due to come into effect. One contentious area was regulations for over-the-counter derivatives that extended across national borders, such as those in the United States’ Dodd-Frank Act. Authorities in the U.S. and Europe should recognise the legitimate concerns of smaller markets, such as Australia, when setting these rules, said Mr Stevens. He also said it was important that the G20 strike the right balance between more regulation and more effective enforcement of the existing rules. Reuters
Glenn Stevens, Governor of the Reserve Bank of Australia
12 |
business daily March 27, 2013
MARKETS Hang SENG INDEX NAME
NAME
PRICE
DAY %
VOLUME
AIA GROUP LTD
33.7
-0.4431315
28163395
CHINA UNICOM HON
ALUMINUM CORP-H
3.12
-1.577287
10741000
CITIC PACIFIC
BANK OF CHINA-H
3.55
-0.2808989
345717820
BANK OF COMMUN-H
5.98
-0.4991681
28194942
BANK EAST ASIA
30.9
0.8156607
1605327
BELLE INTERNATIO
13.26
-1.044776
22195700
BOC HONG KONG HO
26.75
0.7532957
9629934
CATHAY PAC AIR CHEUNG KONG CHINA COAL ENE-H CHINA CONST BA-H
DAY %
VOLUME
10.62
-1.848429
27882250
10
-0.5964215
6402397
TENCENT HOLDINGS
248.4
3.156146
7536150
HANG LUNG PROPER
29.05
0.8680556
3175000
TINGYI HLDG CO
20.55
3.370221
11146810
WANT WANT CHINA
11.68
2.45614
10149389
WHARF HLDG
64.45
2.382844
6111752
27770179
76.7
-1.223439
1794500
0.7058824
CHINA PETROLEU-H
8.92
-0.7786429
HENGAN INTL HONG KG CHINA GS
22.4
0
4046785
133.1
-0.5974608
3289977
HSBC HLDGS PLC
82.9
-0.539892
15874940
15450858
HUTCHISON WHAMPO
80.7
-0.4932182
6882800
12070001
IND & COMM BK-H
5.41
0.3710575
231858155
97540901
LI & FUNG LTD
10.94
1.296296
29290880
HONG KONG EXCHNG
MOVERS
25
22328.53
1788845
22055.56
52W (H) 23944.74
-1.724138
11007454
MTR CORP
31.15
0
0.9411765
8415200
NEW WORLD DEV
12.94
0.9360374
9378874
CHINA RES POWER
24
3.671706
11328282
PETROCHINA CO-H
10.18
0.3944773
97365650
CHINA SHENHUA-H
28.4
-1.217391
13842123
PING AN INSURA-H
59.95
-0.4979253
9926149
PRICE
DAY %
VOLUME
25.85
-0.1930502
6672800
CHINA PETROLEU-H
8.92
-0.7786429
97540901
3 22390
LOW
22.8
22
INDEX 22311.08 HIGH
21.45
CHINA RES LAND
1493147
3435081
0.141844
-0.1832621
-0.9679063
0.1055966
7.06
21.4
9270334
97.2
9.48
ESPRIT HLDGS
619153
81.7
4465301
1.153846
SWIRE PACIFIC-A
11418566
CHINA OVERSEAS
0.9287926
105.2
7601477
0
CHINA MOBILE
13.04
-0.3584229
5.5
1810262
SINO LAND CO SUN HUNG KAI PRO
11.12
52.75
-0.9345794
20226224
COSCO PAC LTD
123.9
26.5
3.771131
2390514
HENDERSON LAND D
CHINA MERCHANT
39.9
76559469
HANG SENG BK
49934654
1903951
SANDS CHINA LTD
0.9383378
2593753
348669513
VOLUME
0.0739645
6058594
0.792393
0.5617978
15.06
2.258356
-1.425178
DAY %
71.6
67.65
-0.4457652
6.36
PRICE
POWER ASSETS HOL
CLP HLDGS LTD
13.4
20.75
NAME
CNOOC LTD
113.2
CHINA LIFE INS-H
CHINA RES ENTERP
PRICE
22000
(L) 18056.4 22-March
26-March
Hang SENG CHINA ENTErPRISE INDEX NAME
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.78
-0.7874016
116763323
AIR CHINA LTD-H
6.72
-0.4444444
9060000
ALUMINUM CORP-H
3.12
-1.577287
10741000
CHINA RAIL CN-H
7.09
-1.390821
8669500
ANHUI CONCH-H
26.1
-0.5714286
7071629
CHINA RAIL GR-H
3.88
-2.267003
19824500
BANK OF CHINA-H
3.55
-0.2808989
345717820
CHINA SHENHUA-H
28.4
-1.217391
13842123
BANK OF COMMUN-H
5.98
-0.4991681
28194942
CHINA TELECOM-H
3.96
-0.5025126
39566300
BYD CO LTD-H
25.1
1.414141
2347962
DONGFENG MOTOR-H
10.26
-3.571429
18285562
CHINA CITIC BK-H
4.79
-0.2083333
27181683
GUANGZHOU AUTO-H
6.31
-1.097179
5804162
CHINA COAL ENE-H
7.06
0.141844
27770179
HUANENG POWER-H
8.12
-0.1230012
41579000
CHINA COM CONS-H
6.62
-1.046338
11462166
IND & COMM BK-H
5.41
0.3710575
231858155
CHINA CONST BA-H
6.36
0.792393
348669513
JIANGXI COPPER-H
16.92
-0.7042254
5855965
CHINA COSCO HO-H
3.81
-2.557545
12297000
PETROCHINA CO-H
10.18
0.3944773
97365650
CHINA PACIFIC-H
20.75
-1.425178
49934654
PICC PROPERTY &
10.22
-5.545287
62488311
CHINA LONGYUAN-H
7.28
-0.2739726
25697000
PING AN INSURA-H
59.95
-0.4979253
9926149
CHINA MERCH BK-H
16.92
-0.1180638
14055977
SHANDONG WEIG-H
7.11
-2.066116
22931904
CHINA LIFE INS-H
CHINA MINSHENG-H
10.4
-0.952381
24674447
SINOPHARM-H
26.05
-2.434457
2253052
CHINA NATL BDG-H
10.12
-2.316602
48711928
TSINGTAO BREW-H
47
-3.983657
1421600
CHINA OILFIELD-H
16.02
2.560819
6552740
WEICHAI POWER-H
25.85
1.372549
2367380
NAME
PRICE
DAY %
VOLUME
YANZHOU COAL-H
10.8
-0.9174312
16513800
ZIJIN MINING-H
2.58
0
17565000
ZOOMLION HEAVY-H
9.22
1.430143
16181613
13.98
1.011561
4132338
ZTE CORP-H
MOVERS
7
32
1 11040
INDEX 10925.13 HIGH
11039.18
LOW
10847.31
52W (H) 12354.22 10840
(L) 8987.76 22-March
26-March
Shanghai Shenzhen CSI 300 NAME ADVANCED TECH -A AGRICULTURAL-A
PRICE
DAY %
VOLUME
9.9
-3.508772
8651568
2.86
-1.37931
107099867
NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
CHINA BAOAN-A
10.79
-0.9182736
82054566
CHINA STATE -A
3.4
-1.734104
83887585
CHINA CITIC BK-A
5.27
-0.7532957
90882839
CHINA UNITED-A
3.61
2.556818
205137662 97241213
NAME
VOLUME
AIR CHINA LTD-A
5.71
-2.226027
8371594
CHINA CNR CORP-A
4.24
-2.304147
26293939
CHINA VANKE CO-A
11.12
-0.1795332
AISINO CO LTD-A
14.56
-1.688049
7443562
CHINA COAL ENE-A
7.3
-0.5449591
10100687
CHINA XD ELEC-A
3.42
0
8671158
4.4
-0.9009009
15649529
CHINA CONST BA-A
4.68
-2.296451
66077820
CHINA YANGTZE-A
7.37
-0.5398111
20029169
ALUMINUM CORP-A ANGANG STEEL-A
3.44
-1.994302
11060918
CHINA COSCO HO-A
4.03
0.2487562
13277286
CHONGQING BREW-A
18.4
-1.918977
10254824
ANHUI CONCH-A
17.79
-0.1683502
21822535
CHINA CSSC HOL-A
21.27
-1.618871
5266713
CHONGQING CHAN-A
8.86
1.026226
19687628
ANHUI HENGYUAN-A
11.65
-2.67335
4785250
CHINA EAST AIR-A
3.37
-1.461988
10479214
CHONGQING WATE-A
6.69
-2.902758
18312976
ANHUI JIANGHUA-A
6.18
-1.277955
31138400
CHINA ERZHONG-A
4.15
-1.658768
2743068
22.23
-3.305785
1506582
AVIC AIRCRAFT-A
10.9
-1.268116
12582729
CHINA EVERBRIG-A
3.29
-1.791045
117180197
CITIC GUOAN-A
5.92
-2.14876
7078478
BANK OF BEIJIN-A
9.31
-2.615063
33010034
CHINA FIRST HE-A
2.57
-1.532567
11498323
CITIC SECURITI-A
12.64
-2.69438
126840799
BANK OF CHINA-A
2.99
0
30573894
CHINA GEZHOUBA-A
5.14
-1.908397
17391946
COFCO TUNHE CO-A
5.75
1.232394
6018796
4.8
-2.040816
71155672
CHINA HAINAN-A
5.75
-1.709402
17081523
COMMODITIES CITY
6.17
-0.9630819
9135803
BANK OF NANJIN-A
9.41
-2.587992
31989305
CHINA INTERNAT-A
32.3
-2.121212
6230369
COSCO SHIPPING-A
4.13
0.7317073
6122849
BANK OF NINGBO-A
11.14
-2.622378
12492851
CHINA INTL MAR-A
12.72
-1.776062
5231247
CSG HOLDING CO-A
7.28
-1.621622
11313063
BANK OF COMMUN-A
CHONGYI ZHANG-A
BAODING TIANWEI
6.81
-1.589595
7465098
CHINA LIFE INS-A
17.21
-0.7497116
9512460
CSR CORP LTD -A
4.29
-2.277904
35252981
BAOJI TITANIUM-A
17.04
-0.9877978
2346023
CHINA MERCH BK-A
12.69
-2.234206
61902647
DAQIN RAILWAY -A
7.58
-1.813472
30752775
BAOSHAN IRON & S
4.77
-2.053388
26597488
CHINA MERCHANT-A
13.11
-3.956044
39513904
DASHANG GROUP -A
37.1
0
9685838
BBMG CORPORATI-A
7.1
-0.4207574
17250708
CHINA MERCHANT-A
25.36
0.3958828
19290436
DATANG INTL PO-A
4.4
-2.869757
14881439
BEIJING CAP CO-A
8.14
0.3699137
93320298
CHINA MINSHENG-A
10.5
-4.545455
287550256
DATONG COAL INDU
8.88
-3.056769
5866407
BEIJING CAPITA-A
9.94
-0.6
13856815
CHINA NATIONAL-A
9.33
-1.060445
30629495
DONGFANG ELECT-A
14.56
-1.886792
9196968
BEIJING DABEIN-A
22.4
-2.523934
8398132
CHINA NONFERRO-A
14.88
-3.751617
11074961
EVERBRIG SEC -A
13.75
-2.620397
22401661
4457647
CHINA OILFIELD-A
17.43
-0.1146132
8919943
FANGDA CARBON-A
9.19
-1.500536
14564904
18.42
-1.602564
14050138
FAW CAR CO LTD-A
8.12
-1.813785
17397925
7.44
-2.105263
48730136
BEIJING GEHUA
6.69
-1.327434
BEIJING HAOHUA-A
11.95
-3.081914
5762821
CHINA PACIFIC-A
BEIJING ORIENT-A
73.29
-0.2178353
1418075
CHINA PETROLEU-A
61.6
0.130039
1488035
CHINA RAILWAY -A
6.6
-2.654867
11017939
BEIJING TIAN-A
16.29
-2.630006
7364630
CHINA RAILWAY-A
5.05
-2.509653
23334421
BEIJING TONGRE-A
22.84
5.496536
22268622
CHINA RAILWAY-A
2.85
-2.39726
36166705
BEIJING URBAN-A
11.8
-1.666667
4922188
CHINA RAILWAY-A
6.38
-2.446483
6379286
20.66
-1.665873
2042114
CHINA RESOURCE-A
30.2
-0.9186352
4233914
25.5
0.2752654
3463636
BEIJING SL -A
BEIJING WANGFUJI
MOVERS
60
BEIJING YAN-A
6.26
-0.792393
11389036
BEIQI FOTON-A
6.56
-1.943199
13081207
CHINA SHENHUA-A
21.99
-0.811908
12728384
5.17
-0.7677543
40525765
HIGH
2630.01
LOW
2558.67
23.13
-1.616333
3023198
CHANGJIANG SEC-A
9.36
-2.803738
23400087
CHINA SHIPPING-A
2.53
-0.7843137
15263212
CHENGDU DR PEN-A
7.53
1.48248
25617460
CHINA SHIPPING-A
4.49
-0.443459
3053357
CHENZHOU MININ-A
17.46
-2.512563
6249599
CHINA SOUTH PU-A
9.46
0.6382979
4020327
CHINA AEROSPAC-A
8.93
-3.250271
12615806
CHINA SOUTHERN-A
3.78
-2.325581
21664784
22.94
0.8351648
5294926
CHINA SPACESAT-A
15.8
-1.802362
10681565
PRICE DAY %
Volume
PRICE DAY %
Volume
BYD CO LTD -A
CHINA AVIC AVI-A
12 2635
INDEX 2575.05
CHINA RESOURCE-A CHINA SHIPBUIL-A
228
52W (H) 2791.303 (L) 2102.135
2550
22-March
26-March
FTSE TAIWAN 50 INDEX NAME
NAME
ACER INC
26.6
1.140684
8551624
ADVANCED SEMICON
24.2
0
12408824
36.05
0.4178273
5058642
FUBON FINANCIAL
ASIA CEMENT CORP ASUSTEK COMPUTER
FORMOSA PLASTIC
70.7
-1.668985
7172771
FOXCONN TECHNOLO
83.2
2.463054
41.85 -0.7117438
NAME
PRICE DAY %
Volume
TAIWAN MOBILE CO
102
0.990099
14091692
TPK HOLDING CO L
600
1.010101
4459264 3357288
12553683
TSMC
99 -0.5025126
27220058
UNI-PRESIDENT
353
1.875902
3066447
HON HAI PRECISIO
83.5
1.334951
49479664
AU OPTRONICS COR
13.15
0
86906963
HOTAI MOTOR CO
239
-1.646091
182943
CATCHER TECH
246.5
1.232033
5211562
WISTRON CORP
17 -0.8746356
8763116
YUANTA FINANCIAL
3.221477
1828356
YULON MOTOR CO
52.8 -0.9380863
1767272
47.95 -0.5186722
8239080
129.5
0.7782101
8924642
CATHAY FINANCIAL
41.1
0
17131074
HUA NAN FINANCIA
HTC CORP
CHANG HWA BANK
17.6
0
10794599
LARGAN PRECISION
CHENG SHIN RUBBE
83.4
0
2058769
LITE-ON TECHNOLO
CHIMEI INNOLUX C
769
18.65
-1.842105
78728120
MEDIATEK INC
0.4431315
5177706
CHINA DEVELOPMEN
8.55
1.183432
61910178
MEGA FINANCIAL H
24.15 -0.8213552
13292753
CHINA STEEL CORP
26.1 -0.9487666
23121333
NAN YA PLASTICS
51.5 -0.9615385
3970627
CHINATRUST FINAN
17.7 -0.5617978
14215702
PRESIDENT CHAIN
166
1.529052
1282301
CHUNGHWA TELECOM
340
92.2
0.1085776
6682626
QUANTA COMPUTER
66.3
1.687117
7347897
COMPAL ELECTRON
20.95
3.20197
18121774
SILICONWARE PREC
33.2 -0.1503759
2178154
DELTA ELECT INC
121.5
0
4191490
SINOPAC FINANCIA
14.2
0.7092199
20961189
FAR EASTERN NEW
30.8 -0.1620746
4627057
SYNNEX TECH INTL
55.5 -0.3590664
2358215
FAR EASTONE TELE
67.8 -0.5865103
5442896
TAIWAN CEMENT
36.85
1.097394
5990336
FIRST FINANCIAL
18.5 -0.2695418
7764200
TAIWAN COOPERATI
16.95
0.295858
7116498
FORMOSA CHEM & F
69.6
-1.694915
2876521
TAIWAN FERTILIZE
70.5
0
2680453
FORMOSA PETROCHE
78.5 -0.1272265
1299590
TAIWAN GLASS IND
27.05 -0.9157509
801982
UNITED MICROELEC
MOVERS
21
22
58.6
-1.512605
9476637
11.25
0.896861
38920341
34.1
1.791045
10257146
14.95 -0.3333333
6205741
7 5475
INDEX 5452.17 HIGH
5470.44
LOW
5405.32
52W (H) 5639.93 5400
(L) 4719.96 22-March
26-March
March 27, 2013 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange)
Max 33.6
average 33.045
Max 39.9
average 39.2
Min 32.45
58.7
33.3
58.2
33.0
57.7
32.7
57.2
Max 58.65
average 58.206
PRICE
Min 16.76
last 16.96
19.35
20.45
39.4
19.20
20.30
39.1
19.05
20.15
Max 19.5
average 19.198
DAY %
YTD %
(H) 52W
(L) 52W
0.200400802
1.975096608
107.2099991
81
BRENT CRUDE FUTR May13
107.87
-0.277341222
-0.553148336
117.4699936
91.54999542
GASOLINE RBOB FUT Apr13
305.95
-0.101221185
5.48181348
334.4000101
238.2400036
GAS OIL FUT (ICE) May13
905.25
0.193691201
-1.146601147
1000.75
801.25
3.898
0.8538163
14.54598883
4.025000095
3.032000065
NATURAL GAS FUTR Apr13
286.43
-0.448352565
-4.383095206
324.5100021
254.189992
Gold Spot $/Oz
HEATING OIL FUTR Apr13
1602.25
-0.0368
-3.7375
1796.08
1527.21
Silver Spot $/Oz
28.8612
0.3215
-4.1475
35.365
26.1513
Platinum Spot $/Oz
1576.2
-0.2973
3.8511
1742.8
1379.05
Palladium Spot $/Oz
757.1
-0.4798
8.2097
786.5
553.75
LME ALUMINUM 3MO ($)
1929
-0.92449923
-6.946454414
2200.199951
1827.25
LME COPPER 3MO ($)
7620
-0.457217505
-3.921321397
8702.75
7219.5
LME ZINC
1944
-0.409836066
-6.538461538
2230
1745
16975
-1.020408163
-0.498241501
18920
15236
14.98
0.368509213
-3.261220536
16.95000076
14.5
731
-0.306853051
4.391288825
838
520.25
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) May13 May13
Min 18.96
last 19.44
18.90
Max 20.6
average 20.266
Min 20.1
last 20.25
COUNTRY MAJOR
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
PRICE
DAY %
1.0478 1.5186 0.9493 1.286 94.17 7.9932 7.7595 6.2118 54.3225 29.36 1.2409 29.858 41.005 9734 98.663 1.22077 0.84684 7.9868 10.2785 121.09 1.0301
0.0573 -0.1512 -0.9902 -1.0389 0.6265 0.0175 0.0258 -0.0177 -0.2623 -0.2725 0.1289 0.0134 -0.4634 0.0205 0.5747 0.0557 0.888 1.1081 1.0906 1.693 -0.0097
YTD %
(H) 52W
0.9636 -6.1202 -3.5711 -2.5019 -8.5696 -0.1251 -0.1147 0.3026 1.238 4.1553 -1.5714 -2.7631 0 0.6061 -9.4625 -1.0887 -3.7103 2.8885 2.4507 -6.2103 -0.0194
1.0625 1.6381 0.9972 1.3711 96.71 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 99.978 1.25692 0.88151 8.4957 10.9254 127.71 1.0314
0.9582 1.4832 0.9002 1.2043 77.13 7.9824 7.7498 6.2079 50.515 29.08 1.2152 28.913 40.54 9095 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029
MACAU RELATED STOCKS (H) 52W
(L) 52W
1.111111
15.55555
3.94
2.29
1461845
CROWN LTD
12.22
-1.132686
14.52671
12.59
8.06
1652326
17.67000008
AMAX HOLDINGS LT
0.047
0
-32.85714
0.098
0.045
11834959
68.18999481
BOC HONG KONG HO
26.75
0.7532957
10.99585
27.1
20.85
9629934
CENTURY LEGEND
12000
727.25
0
-7.680101555
938
665
SOYBEAN FUTURE May13
1435.75
-0.104365977
2.608540289
1639.5
1218.75
COFFEE 'C' FUTURE May13
135.6
0.22172949
-7.566462168
204.5999908
132.0500031
SUGAR #11 (WORLD) May13
17.91
-0.333889816
-8.62244898
24.56999969
COTTON NO.2 FUTR May13
87.65
1.224159834
15.5417875
93.93000031
World Stock MarketS - Indices
NAME ARISTOCRAT LEISU
PRICE
DAY % YTD %
VOLUME CRNCY
0.325
-2.985075
22.64152
0.42
0.215
CHEUK NANG HLDGS
5.94
0
-0.8347208
6.74
2.8
94000
CHINA OVERSEAS
21.4
0.7058824
-7.359309
25.6
14.124
12070001
CHINESE ESTATES
12.44
0.6472492
2.560565
12.964
7.697
344500
CHOW TAI FOOK JE
10.78
-0.7366483
-13.34405
13.4
8.4
2890200
EMPEROR ENTERTAI
2.29
-0.4347826
21.16402
2.49
1.1
745000
FUTURE BRIGHT
2.66
-0.7462687
118.0328
2.75
0.61
1542000
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
14447.75
-0.4429429
10.25333
14563.75
12035.08984
GALAXY ENTERTAIN
33.05
-0.7507508
8.89621
35.7
16.94
18216517
NASDAQ COMPOSITE INDEX
US
3235.299
-0.2989215
7.146363
3263.627
2726.68
HANG SENG BK
123.9
0
4.380795
131.5
99.2
619153
FTSE 100 INDEX
GB
6378.2
-0.002822033
8.145228
6533.99
5229.76
HOPEWELL HLDGS
31.65
-1.09375
-4.81203
35.3
19.049
757900
DAX INDEX
GE
7878.44
0.09579591
3.494957
8074.47
5914.43
HSBC HLDGS PLC
82.9
-0.539892
1.968016
88.45
59.8
15874940
NIKKEI 225
JN
12471.62
-0.5965029
19.97503
12650.26
8238.96
HUTCHISON TELE H
3.95
0
10.95506
4.05
2.98
4847628
HANG SENG INDEX
HK
22311.08
0.2693344
-1.52642
23944.74
18056.4
LUK FOOK HLDGS I
24.9
-0.9940358
2.049182
30.05
14.7
3838000
MELCO INTL DEVEL
13.44
1.972686
49.16759
13.96
5.12
4858301
CSI 300 INDEX
CH
2575.05
-1.456012
2.064968
2791.303
2102.135
MGM CHINA HOLDIN
16.96
0.7125891
27.72739
18.449
9.509
4858400
TAIWAN TAIEX INDEX
TA
7856.36
0.003054943
2.037273
8089.21
6857.35
MIDLAND HOLDINGS
3.3
0.3039514
-10.81081
5
3.249
2800000
KOSPI INDEX
SK
1983.7
0.3049043
-0.6684909
2051.8
1758.99
2930000
NEPTUNE GROUP
0.158
0
3.947372
0.226
0.084
NEW WORLD DEV
12.94
0.9360374
7.653906
15.12
7.95
9378874
SANDS CHINA LTD
39.9
3.771131
17.52577
39.95
20.65
20226224
AU
4950.246
-0.8005896
6.480945
5163.5
3985
ID
4858.282
1.221294
12.54655
4904.477
3635.283
SHUN HO RESOURCE
1.5
0.6711409
7.142859
1.67
1.03
2000
FTSE Bursa Malaysia KLCI
MA
1652.1
0.4994251
-2.181828
1699.68
1526.6
SHUN TAK HOLDING
4.27
2.644231
1.909306
4.65
2.56
10823507
NZX ALL INDEX
NZ
924.431
-0.1747208
4.804479
944.123
755.149
SJM HOLDINGS LTD
19.44
3.404255
8
22.15
12.34
8852459
PHILIPPINES ALL SHARE IX
PH
4163.71
0.6337175
12.56373
4268.160156
3238.77
SMARTONE TELECOM
12.56
-0.3174603
-10.79545
17.38
12.5
616000
WYNN MACAU LTD
20.25
-0.4914005
-3.341292
25.5
14.62
10211000
ASIA ENTERTAINME
4.12
-5.287356
34.64053
6.95
2.4
326402
BALLY TECHNOLOGI
51.86
-1.124881
15.99195
52.7
41.74
218766 45800
JAKARTA COMPOSITE INDEX
20.00
(L) 52W
3.64
WHEAT FUTURE(CBT) May13
S&P/ASX 200 INDEX
16.7
39.8
95
NAME
average 16.894
20.60
WTI CRUDE FUTURE May13
CORN FUTURE
Max 17
CURRENCY EXCHANGE RATES
NAME
METALS
56.7
last 58.2
19.50
Commodities ENERGY
Min 56.7
16.8
40.0
38.8
last 39.9
17.0
16.9
32.4
last 33.05
Min 38.8
33.6
HSBC Dragon 300 Index Singapor
SI
632.37
0.64
1.82
NA
NA
STOCK EXCH OF THAI INDEX
TH
1538.26
0.9390072
10.51274
1601.34
1099.15
HO CHI MINH STOCK INDEX
VN
489.46
-0.8327086
18.3042
500.59
372.39
BOC HONG KONG HO
3.38
-2.028986
10.09772
3.59
2.7
Laos Composite Index
LO
1397.82
0
15.06869
1455.82
962.18
GALAXY ENTERTAIN
4.32
1.647059
8.81612
4.57
2.25
8350
INTL GAME TECH
16.66
-0.059988
17.57234
17.49
10.92
3257947
JONES LANG LASAL
98.43
0.4080384
17.26233
100.33
61.39
332232
LAS VEGAS SANDS
54.52
1.263001
18.11092
58.3216
32.6127
7020465
MELCO CROWN-ADR
22.63
2.816901
34.38242
22.82
9.13
4774984
MGM CHINA HOLDIN
2.19
-4.366812
18.37838
2.44
1.36
500
MGM RESORTS INTE
13.14
0.6125574
12.88659
14.8
8.83
8112970
SHFL ENTERTAINME
16.44
-0.6045949
13.37931
18.77
11.75
184044
SJM HOLDINGS LTD
2.42
-2.419355
4.761907
2.85
1.65
1000
121.64
-0.3604194
8.134058
129.6589
84.4902
2148665
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
WYNN RESORTS LTD
AUD HKD
USD
14 |
business daily March 27, 2013
Opinion after his passing, Chávez will remain for years to come the saintly benefactor, martyr, and redeemer of the destitute in the eyes of the Venezuelan masses. Indeed, he is likely to achieve the kind of immortality that he always believed he deserved. Part of the legend is almost invariably the mystery surrounding the circumstances of the leader’s death. An ordinary, natural death does not accord with the superhero image of the patriarch fighting the nation’s enemies. Maduro’s conspiracy theory that his mentor’s cancer was the result of poisoning by “the dark forces that wanted him out of the way” is not particularly original, though it does raise the stakes. Chávez himself always maintained that his idol, Simón Bolívar, was poisoned by his enemies in Colombia in 1830.
Not a doctrine
Autumn of the Patriarchs
“H
Shlomo Ben Ami
Former Israeli foreign minister who now serves as Vice President of the Toledo International Centre for Peace
ow difficult it is to die!” Francisco Franco is reputed to have exclaimed on his deathbed. Death, it seems, is always particularly difficult for autocrats to manage, even when they succeed in dying of natural causes. A dictator’s death throes are always a form of theatre, featuring ecstatic masses, would-be successors fighting for political survival, and, behind the scenes, the dictator’s coterie locked in efforts to extend the life of their patriarch until they can secure their privileges. Franco’s sonin-law, who was also the family doctor, kept the dying despot on life-support machines for more than a month. It is not exactly clear how long Venezuela’s Hugo Chávez was actually dead before his passing was officially announced. Buying time to secure their own political future, Venezuelan officials carefully stage-managed Chávez’s illness and eventual death, even suggesting near the end, while he was undergoing complex and agonising cancer treatments, that he was still “walking and exercising”.
The information vacuum was reminiscent of the secrecy surrounding the deaths of Stalin and Mao, and the practice in the Ottoman empire of keeping the sultan’s death a secret for weeks until the succession was settled.
Chávismo, apart from its reliance on charismatic leadership, has never amounted to more than a social programme hitched to an oil bonanza
The emotional manipulation of the mise-en-scene surrounding Chávez’s death appears certain to translate into electoral support for his grey successor, Nicolás Maduro. But will this suffice to create a Chávista lineage? In Argentina, despite the disaster of Juan Perón’s return to power in 1973, after an 18-year exile, Perónism was reincarnated in the 1980’s in the presidency of Carlos Saúl Menem, and again with the arrival of President Néstor Kirchner and, later, his wife, current President Cristina Fernández de Kirchner. Fernández’s melodramatic speeches are a transparent attempt to elevate her late husband to saintly status, just as Perón elevated his wife, Evita, to sainthood. Upon taking office, she swore allegiance not only to the constitution, but to “Him” (Kirchner) as well.
Dictators’ afterlife Unlike mere mortals, dictators do have a good chance of enjoying an afterlife. In ancient Egypt, deceased Pharaohs were embalmed and deified. After Augustus,
the first Roman princeps, the Senate could vote deceased emperors into divine status. Such an apotheosis, of course, served the political interests of the emperor’s successors, who could claim a godly lineage while aspiring to be raised to godlike status themselves. Chávez excelled in ridiculing his political enemies, but he was too much of a narcissist to approach the end with the kind of humour that, according to Suetonius, inspired Emperor Vespasian’s deathbed quip: “Oh dear, I must be turning into a God.” The grotesque idea of embalming Chávez’s body was finally discarded precisely because of the damage suffered by the corpse during its display to the masses in a chaotic exercise in political manipulation. A god, certainly not, but a saint, perhaps. Indeed, what was good enough for “Santa Evita,” as the Argentine writer Tomás Eloy Martínez called her, might be good enough for Chávez. Like the dying tyrant in Gabriel García Márquez’s The Autumn of the Patriarch, who righteously lamented the fate that would befall the poor
History, more imaginary than real, offers Maduro a score of additional examples. Was Napoleon slowly poisoned by arsenic during his exile in St. Helena? Did Lenin die of syphilis, a massive stroke, or poisoning by Stalin? Given the bizarre circumstances of Stalin’s own death, was he poisoned by his secret police chief, Lavrentiy Beria, or perhaps by his archenemy, Yugoslavia’s Josip Broz Tito? Did “Dear Leader” Kim Jong-il suffer a heart attack in bed, or, more nobly, on a train trip while working for the welfare of his beloved people? Allegations of poisoning by the wicked imperialists are, of course, a feature of the official Kim death story. Maduro himself invoked the rumour that the Israelis poisoned former Palestinian President Yasser Arafat. He could just as well refer to Egypt’s Gamal Abdel Nasser, who dropped dead of a heart attack in 1970; Nasser’s confidant, the journalist Mohamed Hassanein Heikal, always maintained that the president had been poisoned by his deputy and successor, Anwar El Sadat. Although Chávez’s legend may survive, Chávismo probably will not, for it is not truly a doctrine, but a sentiment based on the rejection of the old political order and the invention of enemies. It lacks the solid foundations of, say, Perónism, an inclusive movement that relied on a traditionally well-organised working class and a nationalistic bourgeoisie. Chávismo, apart from its reliance on charismatic leadership, has never amounted to more than a social programme hitched to an oil bonanza. © Project Syndicate
editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes Newsdesk Alex Lee, Luciana Leitão, Stephanie Lai, Tony Lai Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, José I. Duarte, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
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March 27, 2013 business daily | 15
OPINION Business
wires Leading reports from Asia’s best business newspapers
Cyprus shows trust in ECB is misplaced
Asahi Shimbun Japan and the European Union agreed to launch talks in April on one of the world’s most ambitious trade deals despite opposition from European carmakers. Japanese Prime Minister Shinzo Abe, European Commission President José Manuel Barroso and European Council President Herman Van Rompuy discussed the plan by phone after Brussels postponed an EU-Japan summit scheduled in Tokyo for March 25 to hammer out a last-minute deal to resolve the Cyprus financial crisis. “The leaders decided to launch negotiations for an agreement covering political, global and sectorial cooperation,” they said in a joint statement.
Jakarta Globe Global financial institutions like the World Bank need to adapt to meet the needs of emerging economies instead of pushing one size fits all policies, former Indonesian president Megawati Sukarnoputri said. Ms Megawati called for the reform of the World Bank, International Monetary Fund and the World Trade Organisation at the 4th Asian Leadership Conference in Seoul. Countries like Indonesia don’t need to cow to policies that favour the market-based economies of the West, she said.
Straits Times March is likely to be the top month for new home sales in Singapore this year. Despite lingering unease over the January cooling measures, developers shifted another 300 units from four recent launches. Last month, only 708 units were sold, mainly because of the Chinese New Year lull. But this month’s figures stand at more than 1,700 units across just six projects. DWG senior manager Lee Sze Teck said: “We are expecting close to 2,000 units to be sold this month.” That could make March the sales pacesetter for this year, if it trumps January’s 2,016 sales.
Korea Herald South Korea’s President Park Geun-hye called for a change in the nation’s economic paradigm to foster co-prosperity between conglomerates and small- and medium-sized firms. “Our economy reliant on big companies should be transformed into an economic structure where exports and domestic consumption are boosted simultaneously, and conglomeratesandSMEsprosper together,” Ms Park said. The Commerce Ministry reported that it would come up with measures to crack down on malpractices at chaebol, or family-controlled big business groups, particularly in cash payments to their small- and mid-sized suppliers.
Megan Greene
Bloomberg View columnist and chief economist at Maverick Intelligence
E
ver since European Central Bank President Mario Draghi said last July that the bank will do whatever it takes to preserve the euro, complacency has pervaded Europe’s singlecurrency area. Markets have weathered potential crises in Italy and Spain with surprising calm, secure in the knowledge that the ECB will save the day if needed. This was always a false assumption, as events in Cyprus have made clear. There are significant limitations to the support the ECB is willing or able to offer, even to such a tiny island economy whose needs are easily affordable. The ECB relies on two primary mechanisms to help euro-area countries in crisis. The first, emergency liquidity assistance, allows a country’s banks to access cheap funding from their national central bank, even when all they have left is low-quality collateral that doesn’t meet the criteria for the ECB’s standard liquidity operations. This emergency facility has helped a number of countries make it through liquidity squeezes over the past few years, keeping banks in Belgium, Greece and Ireland on life support since the beginning of the crisis in 2008. The ECB has kept Cypriot banks alive in this way, too, providing about 9 billion euros (US$11.6 billion) of financing to date. The ECB threatened to cut Cyprus off, however, if a bailout deal wasn’t agreed on with the so-called troika of international creditors – the ECB, the International Monetary Fund and the European Commission – by March 26.
it detailed in September. This facility has yet to be used, but its mere existence has caused borrowing costs for peripheral euro-area countries to fall significantly. Consequently, these countries have already managed to sell 28 billion euros of bonds in 2013, roughly double the figure for the same period in 2012. Despite this renewed confidence in euro-area government debt, recent events in Cyprus have highlighted the bond-buying programme’s limitations – it can alleviate stress in the sovereign-bond markets, but that’s about it. Even if Cyprus met all the conditions to use the facility, that wouldn’t help the country avoid a banking and economic collapse. Investors should have seen the limitations of the ECB’s intervention tools before the Cyprus bailout disaster. Sovereign borrowing costs have fallen, but as far as the real economy is concerned, most indicators released from a euro-area country in the past six months have been worse than the last. This goes not just for the weak countries but also
Capital controls In response to the ECB’s threat, the Cypriot parliament passed a bill on March 22, allowing for capital controls. Emergency ECB funding would have plugged the gap in bank balance sheets created by deposit flight. Without this funding, deposit flight would have to be stemmed by force of law to prevent the island’s banks and economy from imploding. This is a serious line for a euro-area country to cross: Capital controls are legal under extraordinary circumstances, but they go against the notion of freedom of goods, labour and capital that is the principle tenet of the European currency union. The second mechanism the ECB can use to support euro-area countries is outright monetary transactions, the bond-buying programme that
Investors should have seen the limitations of the ECB’s intervention tools before the Cyprus bailout disaster
for core countries, such as Germany. The outright-monetarytransactions programme was meant to support the real economies of peripheral countries by allowing borrowing costs for businesses across the euro area to converge. The opposite has happened. In January, borrowing costs for small- and medium-sized enterprises in Spain and Italy – where such companies form the backbone of the economy – rose to 6 percent and 5.8 percent, respectively. At the same time, the cost of borrowing for German smalland medium-sized companies fell, to 3.5 percent.
Political risk Even if the ECB’s two special rescue mechanisms succeed in improving and stabilising the financial and economic environment of a euro country in crisis, these tools are powerless to address political risk in the euro area. That’s a significant weakness, because political risk has repeatedly come to the forefront of this crisis, as elected politicians seek to
protect their own country’s interests in negotiations over who will end up paying for the imbalances that have developed in a fundamentally flawed monetary union. Whatever happens in Cyprus is unlikely to ring the death knell for the common currency. A chaotic default and exit from the euro area by such a tiny economy would be disruptive, but the rest of the currency union would probably weather it. The Cyprus debacle has revealed, however, that the ECB isn’t a cure-all, and that investors’ trust in the willingness and ability of the central bank to “do whatever it takes” may be a big mistake. If the ECB’s toolkit can’t save a country that accounts for 0.2 percent of the euro area’s gross domestic product, then how will it provide meaningful support when financial or fiscal difficulties emerge in larger countries such as Spain and Italy? This question should be keeping investors up at night, because it’s a given that such difficulties will arise – the only question is when. Bloomberg View
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business daily March 27, 2013
CLOSING Foxconn in record quarterly profit
Boeing: 787 flight ‘went to plan’
Hon Hai Precision Industry Co Ltd, a major assembler of Apple products, has posted record quarterly profits helped by growing demand for iPhones and iPads. The Taiwanese firm, also known as Foxconn Technology, posted a net profit of NT$37 billion (US$1.2 billion) in the October to December quarter. It also reported a 16 percent jump in full year profit for 2102 to NT$94.8 billion. However, the heavy reliance on Apple has also raised concerns that Foxconn’s growth may slow in the coming months. Some analysts said the rapid rate of growth that smartphones and tablet PCs had seen in recent years could not be sustained.
Boeing Co said that the first flight test of its reworked battery system for the 787 Dreamliner went “according to plan,” enabling it to move on to formal testing. The successful mission means Boeing can conduct a second flight test that will gather data for the Federal Aviation Administration, which must approve the new system before the 787 can be used for commercial service. “During the functional check flight [on Monday], crews cycled the landing gear and operated all the backup systems, in addition to performing electrical system checks from the flight profile,” Boeing spokesman Marc Birtel said in a statement.
In the first three weeks of March, second-home transactions plunged to their lowest since the outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003, when Hong Kong’s real estate market hit an all-time low, according to data from property agent Midland Realty. “We only recorded two deals from the 10 large-scale residential estates during the past two weeks,” said Wong Leung Sing, analyst at Centaline Property Agency Ltd. “It has never been so bad.” “The market might head in two different directions: Prices stay the same with a plunge in transactions, or prices will just collapse,” Mr Wong said, adding that home prices may drop as much as 20 percent in the second quarter. Sun Hung Kai Properties Ltd, the world’s No.2 property company by market value, has also cautioned about the impact of the tightening measures and lowered its sales target for this financial year by 9 percent. Analysts say Cheung Kong has been forced to cut prices to boost sales in a lethargic market. Cheung Kong, Hong Kong’s second-largest property developer after Sun Hung Kai Properties, cut the price of a new project in the city by 6 to 17 percent, according to Macquarie Equities Research.
Profit up
Li sounds warning over volatile HK property Cheung Kong announces first annual decline in net profit in five years
A
series of tightening measures have put the brakes on Hong Kong’s overheated property sector, forcing developers to cut prices and prompting a warning from Asia’s richest man Li Ka Shing: speculators stay away. Developers say a sixth round of cooling measures imposed last month to rein in prices and to avoid an asset bubble are now having an impact on sales. “If you are speculating, I would suggest that you stay away in such a volatile market because no one knows what will happen next,” Mr Li told a news conference after his company Cheung Kong (Holdings) Ltd announced its first annual decline in net profit in five years. “Look at your pocket first and don’t take risks,” Mr Li said. In late February, Financial Secretary John Tsang imposed a new round of steps to curb prices that
have doubled since 2008, saying they were needed to keep the potential economic risk from spreading in the financial hub. The new measures included higher stamp duties and home loan curbs on property transactions.
HK$32.2 billion
Cheung Kong’s net income in 2012
Cheung Kong yesterday said 2012 profit excluding contributions from unit Hutchison Whampoa Ltd rose 6 percent as rental income growth offset a decline in home sales. Profit excluding Hutchison increased to HK$19.1 billion (US$2.5 billion) from HK$18.1 billion a year earlier, Cheung Kong said in a statement filed to Hong Kong Stock Exchange. Net income fell 30 percent to HK$32.2 billion, beating analysts’ expectations. Shares of Cheung Kong rose 2.3 percent to close at HK$113.20 yesterday, narrowing its decline this year to 4.9 percent. The earnings statement came after the market closed. The lower net income last year was also due to a lack of one-time gain in 2011 that came from Hutchison spinning off its port business. Earnings from property rentals for Cheung Kong, landlord to Goldman Sachs Group Inc. and Barclays Plc in the city, increased to HK$1.98 billion last year from HK$1.7 billion a year earlier. Rental rates for retail properties in Hong Kong also gained, reflecting rising demand from tourists and domestic spending, it said. The underlying profit was also helped by an increase in profit from its infrastructure businesses, which rose to HK$1.04 billion from HK$130 million a year ago, the statement showed. The company’s acquisitions of utilities assets in the U.K. contributed to the gains. Reuters
BRICS reach deal on bank The BRICS group of emerging powers yesterday reached a deal to establish a development bank that would rival Western-backed institutions, South Africa’s finance minister told AFP. “It’s done,” minister Pravin Gordhan said after meeting with his counterparts from Brazil, Russia, India and China. “We made very good progress, the leaders will announce the details,” he added, just hours before a summit in the South African port city of Durban. The bank is likely to focus on infrastructure financing, a direct challenge to seven decades of dominance by the World Bank. It is the first time since the inaugural BRICS summit four years ago that the group matches rhetorical demands for a more equitable global order with concrete steps. But an Indian diplomat involved in the talks told AFP many of the details are likely to be left for another day, allowing leaders to announce a deal, however tentative. The bank is not likely to be up and running for years. Brazil’s central bank chief also told AFP there was also good progress made on a deal to establish currency swap lines, which is likely to be worth in the region of US$100 billion
Fitch downgrades Cyprus lenders Ratings agency Fitch downgraded yesterday the two biggest Cypriot banks to default category and placed the third biggest on negative watch following the announcement of a financial rescue plan for the euro zone country. “Fitch Ratings has taken rating actions on the three largest Cypriot banks following the agreement the Eurogroup reached with the Cypriot authorities on Monday morning as a precondition to provide 10 billion euros (US$12.8 billion) in financial assistance to Cyprus,” a statement said. For the biggest, the Bank of Cyprus (BoC), Fitch cut its long- and short-term ratings by one notch from “B” to “Restricted Default” owing to “losses imposed on senior creditors” as part of a restructuring plan for the bank. BoC’s chairman Andreas Artemis has submitted his resignation, a source at the bank said yesterday. For number two Laiki, Fitch cut its ratings from “B” to “Default” because in addition to the planned losses, the bank is to be completely wound down, with healthy assets and insured deposits transferred to the BoC and the rest placed in a “bad bank” to be dissolved over time. Cyprus’s finance minister, Michalis Sarris, said people with more than 100,000 euros could see about 40 percent of their deposits converted into bank shares.
BoC profit beats estimates Bank of China Ltd, the nation’s fourth-largest lender, posted better-than-estimated profit growth of 12 percent last year as an expansion of its lending margin outweighed an increase in bad loans. Net income rose to 139.4 billion yuan (US$22 billion), or 0.48 yuan a share, from a restated 124.3 billion yuan, or 0.43 yuan, a year earlier, the Beijing-based lender said in a statement to the Hong Kong Stock Exchange yesterday. That beat the 132.6 billion-yuan average estimate of 31 analysts compiled by Bloomberg. Bank of China and No. 3 lender Agricultural Bank of China Ltd join China Construction Bank Corp., the second-largest, in reporting slower annual profit growth as the industry struggles to curb rising defaults after the world’s second-largest economy faltered. Chinese lenders’ profit growth may further slow in 2013, Agricultural Bank president Zhang Yun said yesterday. Agricultural Bank yesterday reported a 19 percent increase in 2012 profit to 145.1 billion yuan.