Macau Business Daily, March 28, 2013 by Business Daily

La Scala trial returns in April

Year I Number 249 MOP 6.00 Thursday March 28, 2013 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: Vitor Quintã www.macaubusinessdaily.com

‘Reservations’ over food safety bill

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Steve Wynn’s double pay day Page 6

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Shock truth behind 3 Macau service failure T

he shocking circumstances behind one of two major service failures last year at mobile telecoms operator Hutchison Telephone (Macau) Co Ltd, branded as ‘3 Macau’ here, were described yesterday in a press briefing by the Bureau of Telecommunications Regulation (DSRT). Bureau official Brendon Sio Weng Weng revealed that a sevenhour October blackout for 3 Macau text and voice message

services was caused by a single wrong instruction keyed into the network. That caused the whole system to reboot, affecting telecoms services for around one in ten of the Macau population. There was no explanation from the Bureau as to how the system was apparently set up without failsafe mechanisms to prevent such a thing from happening. More on page 3

Amax directors complain to HK Stock Exchange

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Two independent non-executive directors of Macau junket investor Amax Holdings Ltd have written to the Hong Kong Stock Exchange objecting to the firm issuing new shares to a named individual – a “Mr Albino” – in settlement of a debt said to be owed by a subsidiary of the firm. The chairman of Amax, Ng Man Sun wants to have the two directors removed from the Amax board.

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HANG SENG INDEX

‘High-quality’ flats for long idle Patane land

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A developer has won a one-year extension on building permission for land that has been unused for five years. The investor and the government have settled a high-profile dispute. The investor is Executive Council member and local businessman Liu Chak Wan. Mr Liu is the former head of Tin Wai Investment Co Ltd. The company won an open tender for the Patane land in 2008.

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HSI - MOVERS

SMEs should do more to retain staff: agency

Name

Macau companies must create a more harmonious work environment and clearer prospects for career development, employment agency MSS Recruitment Ltd said at an employment seminar yesterday. The strategy is vital for firms, especially small- and medium-sized enterprises, to retain their staff in face of the acute challenge of tight labour supply. Smaller firms have the advantage of being able to build a closer boss-employee bond said MSS.

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%Day

WHARF HOLDINGS

6.98

CHINA OVERSEAS

2.57

HENGAN INTL

2.48

SANDS CHINA LTD

2.26

WANT WANT CHINA

2.23

CHINA COAL ENE-H

-1.56

CATHAY PAC AIR

-1.64

BELLE INTERNATIO

-1.66

KUNLUN ENERGY CO

-1.66

BOC HONG KONG HO

-2.99

Source: Bloomberg

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business daily March 28, 2013

macau

New date set for La Scala trial

he latest trial arising from the web of corruption woven by Ao Man Long while he served as a government secretary will resume at the end of next month, a court spokesperson told Business Daily. The Court of First Instance said the trial of prominent Hong Kong businessmen Joseph Lau Luen Hung and Steven Lo Kit Sing would resume at 9.45am on April 29. The trial’s start in January was postponed because six of the accused were absent, including Mr Lau, the head of property developer Chinese Estates Holdings Ltd, who was said

to be unwell. Mr Lau and Hong Kong businessman Mr Lo, the chairman of BMA Investment, are charged with bribing Mr Ao in exchange for land near the airport in 2006, where the luxury housing project La Scala was to be built. Presiding judge Mário Silvestre said he would set another date as soon as possible once he knew the accused would be available. “The court will use the format of public announcement to notify the defendants about the next hearing so that [the trial] can proceed next time, even in their absence,” said

Tender for ferry terminal revamp

Mr Silvestre. The trial was originally due to start in September but presiding judge Alice Costa was ill and had to be replaced. Mr Silvestre is expected to remain as the presiding judge, the Chineselanguage newspaper Macao Daily News reported yesterday. The report did not name the source of the information. The newspaper also said “there were several lawyers visiting Hong Kong in recent days,” which might be linked to “the discussion of the trial with Joseph Lau”.

The Land, Public Works and Transport Bureau launched a tender for renovation works at the Outer Harbour Ferry Terminal yesterday. The works were originally scheduled to begin last September, after the government resumed full control of the structure in December 2011. The proposals for the one-year contract will be open on April 25, the tender programme says. The works will be carried out mainly on the terminal’s first and second floor and they will involve adding luggage facilities and a baggage carousel. The renovation won’t affect the normal operation of the terminal, authorities have promised.

V.Q.

New Portuguese consul in town The new Portuguese consul-general in Macau, Vítor Sereno, arrived yesterday morning from Beijing, Radio Macau reported. Mr Sereno was the head of cabinet of Portugal’s Ministry of Parliamentary Affairs but has had diplomatic assignments in Guinea-Bissau and Argentina, before becoming consul in Germany and the Netherlands. The 41-year-old diplomat is replacing Manuel Cansado de Carvalho, who was in Macau since February 2009. Portugal has also recently appointed Maria Bonifácio as the new director for Macau and Hong Kong of its investment promotion body, AICEP – Trade & Investment Agency. Joseph Lau is accused of bribing former secretary Ao Man Long

business as usual

What are these youths? Larry So Associate Professor at Macau Polytechnic Institute

hat is the youth in Hong Kong that murdered his parents? What is the youth that answered a call and helped butcher his friend’s parents? What is the youth in Macau that slashed his brother’s throat with a beer bottle? Are they all psychopaths? Whether they are psychotic or neurotic or whatever, it is difficult to understand their actions, let alone their motives for brutish murder or attempted murder. What went wrong in our society? After all, Macau and Hong Kong have both enjoyed economic prosperity at one time or another. The two cities are becoming more and more congested. The once-serene ambience has been transformed by the hustle and bustle in the streets. Living standards are soaring. But people are working longer hours than before, and still find it hard to make ends meet. These changes have unleashed greed for economic returns while pushing aside traditional values and morals. Youths are brought up to believe the ends justify the means, and are motivated by the urge for instant gratification rather than the rewards of perseverance. To satisfy their sons and daughters, working parents must strive to put an iPhone on the table along with the food. In the face of these social problems, we ask who should be held responsible. Is it the government, which manages education, social welfare and the rest? Is it the family, being the basic building block of society? The lack of proper social imperatives brings deviancy into our community. But we have forgotten that the family is the victim of the rapid social change created by our tactless government, which looks for nothing but economic returns for the tycoons. It is time for the government to reconsider its strategy for change and its policy on youth development. For instance, is the present tactic of reaching out to youngsters in playgrounds, discos or karaoke bars still effective when many of the youngsters are otaku, unable to relate to reality? What are these youths? They are as impetuous as fire.

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MACAU

Hutchison Macau fined MOP370,000 for service failures One wrong computer input caused entire system to reboot, telecoms watchdog reveals in official report Stephanie Lai

sw.lai@macaubusinessdaily.com

seven-hour October blackout for text and voice message services of telecoms operator Hutchison Telephone (Macau) Co Ltd was caused by a single wrong instruction keyed into the network. That caused the whole system to reboot, affecting telecoms services for around one in ten of the Macau population, Brendon Sio Weng Weng, head of the Promotion of Competition Department of the Bureau of Telecommunications Regulation (DSRT), said yesterday. That was one of two major service failures at the mobile telecoms operator last year, branded here as ‘3 Macau’. There was no explanation from the Bureau as to how the system was apparently set up without failsafe mechanisms to prevent such a thing from happening. Nor was there any commentary from the bureau to the media on what lessons had been learned, or what mechanisms the regulator might have insisted on from the operator in order to prevent such a thing from happening again. “Human error” was also to blame for the 20-hour mobile data service interruption in June said Mr Sio. “Hutchison had not taken notice of the conflict between the new and the original technical setting when preparing to upgrade its Internet [service] on June 15 last year, which led to a mobile data service blackout that affected about 33,000 users,” Mr Sio told the media yesterday.

Hutchison will have to pay the fines by late April (Photo: Manuel Cardoso)

“And on October 17 last year, a wrong instruction was keyed in the home location register (HLR) of Hutchison’s 3G network, which caused the HLR to reboot and led to a mobile data service blackout affecting 57,000 users,” Mr Sio added. Home location register (HLR) is a central database storing details of

mobile phone subscribers that are authorised for the GSM or WCDMA core telecoms network. It includes data from every SIM card issued by the mobile phone operator. Hutchison is to be fined 150,000 patacas (US$18,760) and 220,000 patacas for the two breakdowns in June and October respectively, the

Business sector ‘reservations’ over food safety bill Legislators give nod to law putting Civic and Municipal Affairs Bureau in charge of regulation Tony Lai

tony.lai@macaubusinessdaily.com

he Legislative Assembly approved the city’s first food safety law. But some legislators in the business sector are doubtful about how it will work in practice. Legislator and businessman Kou Hoi In told the assembly yesterday: “I have some reservations on this bill but I still give nods to it considering the importance of food safety to the citizens.” “I just hope that the relevant, executable bylaws and guidelines will be released soon so that the industry will know what to follow,” he added. He did not specify his precise concerns.

The food safety bill governs all processes related to food products from manufacturing to retail, giving responsibility for oversight and enforcement to the Civic and Municipal Affairs Bureau. Mr Kou’s reservations were echoed in comments of fellow legislators Ung Choi Kun and José Pereira Coutinho. They complained the law did not state clear standards for hygiene in food products and said the administration had been given too many discretionary powers in determining fines for violations. For example, food manufacturers are subject to fines ranging from between 20,000 patacas (US$2,500)

and 250,000 patacas and even closure of business for up to a year, but it’s not clear what would be considered a serious offence and what a minor one. Government-appointed legislator Leonel Alves defended officials in the department from the criticism. The bureau reports to Secretary for Administration and Justice Florinda Chan. Mr Alves said food safety standards should be decided in the relevant guidelines and bylaws. André Cheong Weng Chon, director of the Legal Affairs Bureau, reassured legislators that the necessary guidelines would be put in

city’s regulator decided. The fines have to be paid by late April, DSRT director Lawrence Tou Veng Keong added. In the press briefing, the DSRT director also urged the company to “improve the quality of its technicians”. “Hutchison will be studying the details of DSRT’s conclusion report over the blackout, and will examine our daily network monitoring and operation,” said the company in a press statement after DSRT’s briefing. In yesterday’s press briefing, DSRT quoted data showing mobile data volume usage rose rapidly from 32 terabytes (32 trillion bytes) in 2008 to 2,583 terabytes in 2012. The difficulty in recruiting, training and most importantly retaining information technology staff in Macau’s current labour market has added to the challenges faced by mobile telecoms operators in dealing with the rapid surge in demand for mobile data services, industry professionals told Business Daily. Last year, the city suffered frequent telecommunication service blackouts. The major telecom operator Companhia de Telecomunicações de Macau SARL (CTM) had three phone service failures, two of which had to do with “human operation errors”, the company told. For the two service failures that were due to operational errors, CTM was fined 800,000 patacas and 180,000 patacas.

place. “There will be no penalties if there are no standards,” he stated. Chan Chak Mo, legislator and owner of listed restaurant company Future Bright Group, said the government should consult further with the industry before the law comes into force. The bill will become effective in 180 days after it is gazetted. It’s hoped that will give enough time for the food industry and the administration to get ready for the new safety regime. The officials did not mention when a food safety centre – including a testing laboratory and reporting to the municipal bureau – will be established. Legislator Ung worried the move was adding another layer of bureaucracy to the food business – costs that might be hard for smalland medium-sized firms to absorb. The issuing of licences to restaurants, hotels, and food product manufacturers will continue to be the responsibilities of different public bodies like Macau Economic Service, the Macau Government Tourist Office and the Health Bureau. The assembly will discuss today wage hikes for civil servants and the revision the of foreign labour law, as well as the union bill.

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business daily March 28, 2013

macau Inflation to stabilise around 5-6 pct: Tam Strong internal demand will keep this year’s inflation at a high level, around 5 to 6 percent, Secretary for Economy and Finance Francis Tam Pak Yuen told media on Tuesday. He, however, said the evolution of the consumer price index would be “more stable” comparing with last year. The official expects inflation to ease this month after reaching 6.16 percent in February, the highest level since August. Last month’s price hikes were fuelled by the Lunar New Year holidays, which are traditionally a peak season for tourism.

Amax directors complain to HK Stock Exchange Non-execs objecting to junket investor issuing new shares in settlement of a debt Michael Grimes

michael.grimes@macaubusinessdaily.com

wo independent non-executive directors of Macau junket investor Amax Holdings Ltd have written to the Hong Kong Stock Exchange objecting to the firm issuing new shares to a named individual – a “Mr Albino” – in settlement of a debt said to be owed by a subsidiary of the firm. The news is given in a filing to the bourse made by Amax Holdings. The directors raising the objections are Dingjie Wu – a mainland businessman described by Reuters as a former “director of investments for Eagle Securities” and Li Li Tang, described by the South China Morning Post as a “a 57-year-old lawyer on the mainland”. The chairman of Amax, Ng Man Sun – also known as Ng Wai or ‘Kai Tze Wai’; from his time running Hong Kong wet markets – wants to have the two directors removed from the Amax board. It’s not clear that doing so will improve Amax’s trading position. Amax filings last year mentioned HK$2.06 billion (US$265 million) in bad debts racked up by Amax. According to Amax’s annual report for the year ended March 31, 2012, the amount represented combined losses on loans made by an Amax subsidiary to another company, AMA International, an aggregator of junkets that used to be the main investor in VIP play at Melco Crown Entertainment Ltd’s Altira property in Taipa. The filing said AMA used the money to provide gambling credit to agents and casino players.

Ace High In its interim report for 201011, Amax said that on September 10, 2007, Ace High – a subsidiary of the group – had entered into a loan and profit transfer agreement with AMA, a company linked to a Francisco Albino. “On the same day, Ace High and Mr Francisco Xavier Albino, a former sole shareholder of AMA, made another profit transfer agreement whereas Ace High agreed to transfer 20 percent of the profits from AMA, under the First Profit Transfer Agreement, to Mr Albino.” Amax’s business shrank significantly in 2009 when a lucrative deal for AMA to supply Altira (previously Crown Macau) with VIP gamblers in return for a market leading 1.35 percent rolling chip commission was cancelled.

Profit transfer deals How junket investment companies guarantee VIP gambling loans made in Macau

Ng Man Sun, Amax Holdings’ chairman

That happened when the Macau government made it clear it wanted to cap commissions at 1.25 percent of rolling chip turnover after much lobbying by casino operators concerned at eroded margins on VIP gambling. Amax said in its 2010-11 interim report: “On 23 December 2009, the gaming operator [MPEL] revoked the then existing gaming promotion agreement between AMA and entered into a new agreement with AMA, whereby the commission rate for AMA was decreased from 1.35 percent to 1.20 percent, following the implementation of a 1.25 percent cap on junket commission by the Macau government.” It added: “The gaming operator unilaterally entered into separate agreements with some of AMA’s collaborators and some collaborators ceased their business in the premises of the gaming operator in December 2009. As a result, these collaborators by passed [sic] AMA and dealt directly with the gaming operator.” In other words, Amax lost a big

HK$2.06 billion Bad debts racked up by Amax according to 2012 HK filing

chunk of its revenue stream almost overnight with the cancellation of the 1.35 percent commission deal – a deal originally done to bolster the performance of Crown Macau after it opened in the spring of 2007. In May and June of 2007, Crown Macau’s share of total Macau gaming revenue was roughly 1.7 percent and 2.7 percent, respectively, according to the then Melco-PBL’s second quarter results that year.

Share denial As recently as March 13 this year, Amax said in a Hong Kong filing: “The company currently has no intention to settle any debts by way of issuing shares or fund raising. The company reserves the right to take legal action against any parties which release the public false information in relation to the company.” It was in response to a story in Hong Kong’s Apple Daily on March 11 that claimed there was a disagreement between Amax and directors Li Li Tang and Dingjie Wu over injection of capital into another company – Nanning InterJoy LOTTO Information Services Co. Ltd. A report of that Apple Daily report is also in the March 13 filing. In June 2012 Mr Ng was attacked by six hooded men reportedly armed with sticks and hammers while he dined in a private room in a restaurant at the New Century Hotel, Taipa. As a result of the attack he spent several months in hospital. Amax has an interest in junket operations at Greek Mythology Casino inside the New Century.

The principle of profit transfer agreements – a process mentioned in the Amax filing – is common for Macau junket investors, especially those that are publicly listed, a senior industry executive told Business Daily. One important reason is that stock market rules may prevent listed junket investors or listed consolidators of smaller junkets from investing directly in casino operations. There are also legal hurdles back in China for other people in the chain – those who might ultimately need to secure and liquidate a player’s fixed assets in order to clear a gambling debt incurred in Macau. “The listed junket investment company doesn’t itself have a contractual relationship with the player. It will normally have a right to a share of profits from a junket operator it works with. Sometimes that junket operator is a partially owned subsidiary, but often not,” the executive told us. “That junket operator also works with what we call a collateral holder. If the VIP player is from mainland China, then the collateral holder in effect guarantees the gambling loan that was made in Macau back over the border in China. Under Chinese law that collateral company can’t directly make profits from casino gambling. That means typically there’s a complex chain of parties,” the person said. “The system depends on trust. If for any reason there’s a problem in the chain, it can create the kind of counter-party risk we saw a few years ago among Western banks, where banks wouldn’t lend to each other via the interbank system because they were worried they might not get their capital back.” The person explained that those who capitalise the junkets – often they are high net worth people doing so via China’s informal banking system – can also be issued with shares by a listed junket investor, giving the creditor a claim on future junket room earnings. M.G.

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MACAU Cotai Water Jet passengers grow The number of passengers for the Cotai Water Jet ferry services between Macau and Hong Kong reached 7.36 million last year, up by 19.5 percent from 2011, Chu Kong Shipping Enterprises (Group) Co Ltd told the Hong Kong Stock Exchange on Tuesday. Chu Kong High-Speed Ferry Co Ltd, a unit of Chu Kong Group, has been running Cotai Water Jet since 2007 under an agreement with casino operator Sands China Ltd. In July the two sides signed a new deal, extending Chu Kong’s contract until July 2017.

High-quality flats for long idle Patane land Developer wins a one-year extension on development window for land that has been unused for five years Tony Lai

tony.lai@macaubusinessdaily.com

ork will “soon” commence on 4,600 square metres of land that has been idle for five years, after the developer and government settled their high-profile dispute. “The government will soon give us the land as all [waste] has been cleared,” said Executive Council member and businessman Liu Chak Wan. Mr Liu is the former head of Tin Wai Investment Co Ltd. The company won an open tender for the Patane land in 2008 with a bid of 1.42 billion patacas (US$177.5 million). “I believe this could happen within one or two weeks,” Mr Liu

told reporters on Tuesday. Exactly how and when the developer plans to utilise the land is unclear. A political heavyweight, Mr Liu did not say if luxury flats would be built on the site. However, the project would have 30 floors with “flats of a high quality” in 90-metre-high towers, he said. Construction might get underway before June 30. Several times last year, Mr Liu said Tin Wai could only start work on the twin pieces of land once the government removed vehicles that

were abandoned on the land. The government cleared the wrecks last week, in direct contradiction to its previous stance that the developer was responsible for removing the rubbish. Mr Liu said the government had agreed to extend the development window from three years to four years. “We really need three to four years to complete the project, particularly [because] the process may [be] delayed as the government now do not have enough human resources to approve the development proposals for so many projects.”

Land, Public Works and Transport Bureau director Jaime Carion told reporters at yesterday’s session of the Legislative Assembly that an extension was granted because the government now had “more requirements” and “higher standards” for construction. “We understand that the developer may need more time,” he said. Mr Carion said the project had also been held up by the developer’s attempts to combine the two plots into one. Mr Liu said on Tuesday the two blocks would not be merged.

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business daily March 28, 2013

macau

Steve Wynn earned US$17.7 million in 2012 Also sold a Picasso this week for US$155 mln according to New York Post Michael Grimes

michael.grimes@macaubusinessdaily.com

Dreaming big – Steve Wynn and ‘Le Reve’

teve Wynn, chairman of casino developer and operator Wynn Resorts Ltd, earned US$17.7 million (141.5 million patacas) last year according to a company filing made on Tuesday United States’ time. But it would take the 71-yearold eight years and nine months of earnings even at that elevated level to buy back at par value a Picasso painting he reportedly sold at auction this week. Hedge fund manager Steven A. Cohen paid him US$155 million for a 1932 portrait in oils of Picasso’s

mistress called ‘Le Rêve’, according to the New York Post, citing an unnamed source. In 2006, Mr Wynn put his elbow through the canvas of the masterpiece while showing it to several friends, reportedly a day after agreeing to sell it to Mr Cohen for US$139 million, several media outlets reported at the time. Le Rêve also happens to be the name of the first show to open – in May 2005 – at the Wynn Las Vegas resort. The production – created by Franco Dragone – is still running

Corporate Social Responsibility

at the property. Mr Wynn’s base salary for leading Wynn Resorts during the year was US$4 million. He also earned a US$2 million bonus and US$10 million in ‘non-equity incentive plan compensation’, plus a further US$1.7 million in ‘other compensation’, together amounting to US$17.7 million. His net worth is significantly

higher. In the same filing Mr Wynn is listed as a 9.9 percent shareholder in Wynn Resorts. His ex-wife Elaine is listed as a 9.6 percent stakeholder. Earlier this month ‘The World’s Billionaires’ list compiled by Forbes magazine placed Mr Wynn at number 503 globally with US$2.8 billion. Elaine Wynn was placed at 882 with a net worth estimated at US$1.7 billion. In Tuesday’s regulatory filing Linda Chen, chief operating officer of Wynn Macau Ltd and president of Wynn International Marketing Ltd, was listed as earning US$5.7 million in 2012 – slightly down on the US$5.8 million she earned in 2011 and 8.6 percent lower than the US$6.2 million she earned in 2010. Wynn Resorts also announced on Tuesday it would hold its annual shareholders’ meeting on May 7 at its Encore property in Las Vegas. Shareholders will be asked to vote to re-elect four directors as well as ratify the audit committee’s choice of Ernst & Young LLP as independent accountants for the company. Mr Wynn, D. Boone Wayson, Alvin Shoemaker and Ray Irani have been nominated as directors on the Wynn Resorts’ board of directors, according to the filing with the Securities and Exchange Commission.

China Star profits grow amid VIP slump Bet in higher-margin mass-market paying off for Lan Kwai Fong operator Vítor Quintã

vitorquinta@macaubusinessdaily.com

A Special Olympics Golf teeing off for sportsmanship Sheraton Hotel Macao comes on board for April’s event In addition to presenting the highest level of Special Olympics golf, this year’s Special Olympics Asia-Pacific Golf Masters (April 22-27) will again welcome Level 1 and Level 2 teams from all over the region in order to develop golf sport for athletes with mental disabilities. The 175-acre Caesars Golf Macau will host the event once again, welcoming the best Special Olympics golfers from 11 different countries and regions accompanied by some 50 local golfers and corporate representatives to its par-71 course. Starwood’s brand new 5-star Sheraton Hotel Macao comes on board for the first time this year, offering accommodation for all players and coaches. The Sheraton Macao, the city’s largest hotel, will also host the official welcome dinner to be held on the evening of April 22. “We are committed to caring for the community by sponsoring this meaningful sporting event,” said Josef Dolp, managing director of Sheraton Macao Hotel, in a statement. The golf tournament is organised by the Charity Association of Macau Business Readers and supported by Business Daily.

n improvement in the performance of a VIP gambling room in Grand Lisboa casino and better results at hotel Lan Kwai Fong have helped China Star Entertainment Ltd go back to profit last year. The Hong Kong firm posted a profit of HK$94.5 million (US$12.2 million) in 2012, compared to a loss of HK$632.7 million the year before when the VIP room’s profits had decreased thanks to “keen competition”. Last year China Star saw the revenue from its gaming promotion operations shrink by 77.4 percent to just HK$15.5 million, the company announced late on Tuesday. But the loss also decreased to HK$9 million, as the market situation was “comparatively” more stable last year, China Star said in a filing to the Hong Kong Stock Exchange. The firm also owns Macau hotelcasino Lan Kwai Fong, whose revenue rose by almost a third last year to HK$1.3 billion, despite a 40 percent drop in VIP gaming income to HK$184.3 million.

Mass-market gaming operations are more profitable than the VIP segment and thus the casino “has spent resources to expand its market share”. The strategy of targeting “highend customers” in the mass table gaming was successful, particularly during the second half of 2012, China Star said. With the mass-market revenue growing by 45.7 percent to HK$798.8 million, the hotel-casino posted profits of HK$192.8 million, up by a whopping 80 percent. Last year China Star gained full control of hotel Lan Kwai Fong after paying HK$618 million for the 49 percent stake of company director Charles Heung Wah Kueng. The operation allows the firm to “solidify its profitability and capture the full potential growth in the hotel and gaming service operations”. Meanwhile China Star is still waiting for government approval to develop four sites located near hotel Lan Kwai Fong into commercial units and residential apartments for sale.

March 28, 2013 business daily | 7

MACAU

To keep staff, SMEs must battle harder Recruitment agency says small business has distinct advantages in arm wrestle for staff Stephanie Lai

sw.lai@macaubusinessdaily.com

ompanies must do more to create enjoyable workplaces and pathways for developing their workers’ careers, employment agency MSS Recruitment Ltd said at a human resources seminar yesterday. For small and medium enterprises this is the blueprint to help them retain staff in an economy facing the acute challenges of record low unemployment and restrictive labour laws. “Business owners are aware of the principle of creating a good working environment and a fair system for promotion,” Loh Seow Yuen, managing partner of MSS Recruitment, told Business Daily. “But that is not a priority, and this is even more alarming in Macau because it [the city] is facing a greater manpower challenge.” Smaller firms have the advantage of being able to build close bonds between managers and their employees, which can be an effective retention strategy, MSS Recruitment managing director Tu Jiji told Business Daily. “From the many candidates we interviewed, they would not leave their company just for more money, as long as they found themselves happy and satisfied in a work environment,” she said. Macau Small and Medium Enterprises Association administrator Kenneth Lei Chi Leong said up to 70

Tight bonds between managers and staff give smaller firms a significant advantage in retaining staff

percent of the city’s smaller firms were micro-companies, with 10 staff or less. “The micro-companies that we see are mainly family businesses that are engaged in retail or small restaurants,” he said. “These micro-companies, usually quite short of management knowledge, do not have a very comprehensive view of a retention strategy to keep their staff.” Mr Lei said it was one area where small businesses could improve their staff retention but he is pessimistic about competing for human resources against the city’s casino-resorts and

You will remember.

welcome

the government. Higher remuneration and a better work environment are the biggest attractions for staff. Ms Tu also said outsourcing was an essential tool to plug gaps in the workforce, although it was an uncommon practice here. “The international groups that have a small operation in Macau are the ones that are outsourcing,” she said. “These international groups are already experienced in outsourcing non-core businesses and focus on its sales. For local SMEs, outsourcing is still a new experience.”

Labour force shrinks as residents leave market M

acau’s working force decreased in February, for the first time in nine months, as about 2,500 residents left the labour force, official data show. By the end of last month Macau had a labour force of 357,200 people, down by 900 from January, the Statistics and Census Service announced yesterday. Considering that the city imported a further 1,634 non-resident workers in February, it means there was a significant number of residents who gave up working. As a result the labour force participation rate stood at 72 percent, down by 0.5 percentage points, mainly because there were fewer women working last month. On the other hand, the number of people looking for a job increased by 100, for the first time since June 2012, to 6,700. Nonetheless the statistical unemployment rate held stable at 1.9 percent. The main reason for the increase in the number of unemployed was the loss of 1,200 jobs in the construction sector and a further 300 in restaurants. The overall job losses were only partially offset by 1,200 new jobs in the retail sector and 600 in hotels. The underemployment rate – those doing jobs for which they are overqualified or those that can find only part-time work – also remained unchanged at 0.6 percent. V.Q.

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Air Macau posts record-high profit T he city’s flagship carrier’s profits reached a historic high of 229 million yuan (286 million patacas) last year, according to the annual report of major shareholder Air China Ltd. Such figure represents an 8-percent growth from about 250 million patacas in 2011, said the state-owned airline which holds a stake of 66.9 percent in Air Macau Co Ltd. The annual report published on Tuesday did not lay out any further details on the growth but Air Macau’s income from air transportation increased by 12.9

percent to 2.3 billion yuan. The number of passengers last year also surged by 15.9 percent to over 1.6 million passengers whereas the average occupancy of its flights inched up 1.2 points to 66.9 percent. But the positive performance of the Macau-based company did not go as far as the cargo business. Its cargo traffic plunged by 31.5 percent to over 12,430 tonnes and the average occupancy rate of cargo dropped by 5.8 percentage points to just 32.5 percent. By the end of last year Air Macau had 13 aircrafts operating in 20

Air Macau posts profit of 286 million patacas in 2012, says filing

routes, with 13 destinations located in mainland China, the report said. The carrier has already launched two new routes to mainland China

this year with a third one to Fujian province’s Jinjiang slated to start on April 2. T.L.

COMPANHIA DE TELECOMUNICAÇÕES DE MACAU, S.A.R.L. For the year ended 31 December 2012

DIRECTORS’ REPORT TO THE SHAREHOLDERS

LEGAL RESERVES

GENERAL The Macau Economy

DIRECTORS

The Directors have pleasure in submitting their annual report on the statement of financial position of Companhia de Telecomunicações de Macau, S.A.R.L. (“CTM” or the “Company”) and the related income statement, for the year ended 31 December 2012.

In the first three quarters of 2012 Macau’s GDP growth stood at 10% which is lower than the 22% growth rate posted in the year 2011. The primary reasons for the slowdown may be attributed to the declining growth of the gaming sector revenue and lower number of visitors as a result of the Mainland China’s GDP growth decrease and the complicated economic environment in the United States and Europe. The GDP growth in 2012 continued to be mainly driven by the growth in the gaming and hospitality industries.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

According to Article 432 of the Commercial Code, the legal reserve is one fourth of the capital of the Company. No transfer to legal reserve was required in 2012.

The Directors during the year and up to the date of this report were: • • • • •

CTM has continued the operation of the Macau public telecommunications services in accordance with the Concession Agreement as revised in November 2009. According to the Concession Agreement CTM has retained the right to continue to provide fixed telecom services on a non-exclusive basis, without interruption, for a period of 5 years from 1 January 2012 until 31 December 2016, renewable for another 5-year period until 31 December 2021. The second 5-year period will be automatically granted at end of 2016, except in case of serious breach by CTM of the relevant laws and regulations or for duly justified imperative reasons of public interest.

• • • • •

Following the enactment of legislation paving the path for liberalisation of the fixed public telecommunications networks, in the beginning of 2012 the Government launched a public tender for the related operating licences. As an outcome of this licensing process the Government will soon issue a licence to one new fixed network operator, while CTM will automatically be granted similar licence. The new licences will be valid until 31 December 2021 and will cover the provision of bandwidth to duly authorised telecommunications operators, local and international leased circuits and data centre services. CTM’s remaining fixed network services – essentially the local and international fixed telephony – will continue to be provided, on a non-exclusive basis, under the terms of the Concession Agreement.

• • • • •

CTM holds a mobile licence covering GSM (2G) and WCDMA (3G) networks and services, which the Company operates in competition with three other mobile operators. The mobile licence is valid until June 2015 and is renewable. The Company also operates an internet services provider (“ISP”) licence, which is valid until April 2013. CTM has already applied for the renewal of the ISP licence, application which is being processed by the Government. The Company revenue for the year ended 31 December 2012 reached a record high at MOP4,920 million, representing a 24% increase from the preceding year of MOP3,981 million. This strong growth in revenue was mainly contributed by the sales of mobile equipment, reflecting a growth of 66% against the previous year. Excluding the mobile equipment sales, the revenue decreased by 3% in 2012, mainly driven by the decrease in business solutions to the corporate customers as a result of the cyclical nature of casino/ hotel developments. In regard to the service revenues, the mobile revenue increased by 10%, the leased circuits increased by 20%, and the internet revenue increased by 4%. On the other hand, the revenue from international fixed voice services decreased by 17% while the revenue from the local fixed voice services remained flat compared to the preceding year. Given the strong growth in mobile equipment sales, the costs of sales for the Company also increased by 40% against the previous year. As a result of inflation and upward pressure on wages arising from the tight labour market conditions, the Company’s operating expenses increased by 2% over the prior year. In light of the above, the profit for the year 2012 was MOP969 million, reflecting an increase of 4% over the preceding year. The Company invested MOP339 million in capital expenditure projects during the year, an increase of MOP52 million comparing with the previous year. The Company’s most significant projects in 2012 included the expansion of the WCDMA 3G Mobile Network, the expansion of the Leased Line Network, the expansion of the Broadband Internet Network and the opening of new retail shops.

Fixed line telephony

During the year ended 31 December 2012, CTM received a total of 13,589 (2011: 15,560) applications for new direct exchange lines. The overall number of installations during the year was 13,784 (2011: 15,511), comprising 8,367 direct exchange lines and 5,417 external removals. The number of lines decreased by 3,777 (2011: 2,064) after a cessation of 17,561 (2011: 17,575). The total system size at the end of the year was 162,533 (2011: 166,310) lines. The total outgoing international telephone minutes originating in Macau for 2012 was 133 million, representing a 6% increase compared to 2011. The total incoming international telephone minutes terminated in Macau for 2012 was 167 million, representing a 5% decrease compared to 2011.

William Anthony Rice, Chairman Poon Fuk Hei, Managing Director Timothy Lincoln Pennington, representative of Sable Holding Limited Francisco José Azevedo Padinha, representative of PT Comunicações, S.A. until 7 March 2012 Luis Filipe Saraiva Castel-Branco de Avelar, representative of PT Comunicações, S.A. from 7 March 2012 Yuen Kee Tong, representative of CITIC Telecom International Holdings Limited Lau Wai Meng, representative of Direcção dos Serviços de Correios Carlos Manuel Mendes Fidalgo Moreira da Cruz Ip Ming Wong Nicholas Ian Cooper

SUPERVISORY BOARD

The Members of the Supervisory Board during the year were: Belinda Holly Yvette Bradberry, Chairwoman Maria Teresa Jordão Pereira Neves Chong Vun Leng David Chan Tin Wai Ian James Lawson

On behalf of the Board of Directors

____________________ Poon Fuk Hei Managing Director 4 February 2013

Independent auditor’s report on the summarised financial information To the shareholders of Companhia de Telecomunicações de Macau, S.A.R.L.: We have audited the 2012 financial statements for Companhia de Telecomunicações de Macau, S.A.R.L. (the “Company”) in accordance with International Standards on Auditing and issued an auditor’s report with an unqualified opinion on the financial statements on 4 February 2013. The audited financial statements which are prepared in accordance with International Financial Reporting Standards comprise the statement of financial position as at 31 December 2012, the income statement, the statement of comprehensive income, the statement of changes in equity and the cash flow statement for the year then ended, as well as a summary of significant accounting policies and other explanatory notes. The accompanying summarised financial information prepared by the management is extracted from the audited financial statements of the Company. In our opinion, the summarised financial information are consistent with the audited financial statements in all material respects. In order to fully understand the financial position and operating results of the Company as well as the audit scope, you are advised to read the summarised financial information together with the audited financial statements and the independent auditor’s report.

KPMG Macau, 4 February 2013

Mobile

The Macau mobile penetration rate reached around 275% by the end of 2012. At the same time, the Company mobile customer base increased by 18% to 745,460 (2011: 633,936). The number of mobile broadband subscribers increased by 34% to 165,512 (2011: 123,079).

Internet

The total internet customer base grew 5% to 145,120 (2011: 138,222) in 2012, whilst 11% of the existing customers opted to upgrade to packages offering higher bandwidth.

No. 1 Hotline: 1000 www.ctm.net

COMPANHIA DE TELECOMUNICAĂ&#x2021;Ă&#x2022;ES DE MACAU, S.A.R.L.

Income Statement

For the year ended 31 December 2012 (Expressed in Macau Patacas)

Turnover Other net income Operating costs and expenses

2012 4,920,261,058 481,178 (3,561,251,517)

Profit before interest, tax and depreciation Interest income Depreciation and amortisation Profit before taxation Income tax Profit for the year

2011

3,980,726,680 375,418 (2,667,708,508)

1,359,490,719 12,134,025 (270,496,446)

1,313,393,590 5,953,184 (260,604,080)

1,101,128,298 (131,799,789)

1,058,742,694 (125,148,206)

969,328,509

933,594,488

Statement of Financial Position As at 31 December 2012 (Expressed in Macau Patacas)

2012 2011

Property, plant and equipment Intangible assets Investments in subsidiaries Deferred tax assets Other non-current assets

Share capital 150,000,000 Legal reserve 37,500,000 Capital contribution reserve 11,224,642 Retained earnings 1,583,061,264

150,000,000 37,500,000 11,224,642 1,551,831,421

TOTAL EQUITY

1,750,556,063

Non-current assets

896,347,043 6,274,317 10,324 10,790,170 750,000

827,226,244 6,871,871 10,324 10,320,526 750,000

914,171,854

845,178,965

Inventories 124,505,069 Trade debtors 243,348,875 Prepayments 45,510,348 Loan to related parties 838,133,475 Amounts due from group companies 18,774,418 Other receivables 14,857,605 Accrued revenue 86,639,737 Cash and cash equivalents 557,057,179 1,928,826,706

128,744,321 208,357,332 31,166,196 639,719,180 13,757,761 13,060,516 135,265,928 733,215,206

Current assets

Current liabilities

5,214,273 268,602,158 22,300,869 12,997,743 338,178,329 193,821,129 135,337,571

8,302,239 241,420,242 20,168,299 12,283,949 326,390,827 177,992,364 130,504,541

976,452,072

917,062,461

Net current assets

952,374,634

986,223,979

84,760,582

80,846,881

NET ASSETS 1,781,785,906

1,750,556,063

Net defined benefit retirement obligation

1,781,785,906

On behalf of the Board of Directors

1,903,286,440

Receipts in advance Trade creditors Payables to state public sector Amounts due to related parties Other payables and accruals Revenue received in advance Current taxation

Non-current liabilities

Capital and reserves

____________________ Poon Fuk Hei Managing Director

____________________ Ip Ming Wong Director

No. 1 Hotline: 1000 www.ctm.net

10 |

business daily March 28, 2013

GREATER CHINA

Chinese airlines’ profit decline on currency, fuel

China, Brazil ink US$30b swap line

Carriers expect domestic demand to rebound this year Jasmine Wang

hina’s three biggest airlines reported a second straight decline in annual profits as they struggled with currency fluctuations and fuel costs amid a slower economic growth. Air China Ltd, Asia’s biggest carrier by market value, said yesterday that net income in 2012 fell 35 percent because of higher expenses and a smaller gain from its stake in Cathay Pacific Airways Ltd. China Eastern Airlines Corp. and China Southern Airlines Co. also reported lower profits. The uncertain global economic outlook and higher fuel costs led to greater operational difficulties for the industry last year, Air China said. The carriers said they expect domestic demand to rebound in 2013 as China’s growth may accelerate under the new leadership after the weakest expansion in 13 years. “China’s big three carriers were all affected by currency last year,” Zhou Meng, a Shanghai-based analyst at Shenyin & Wanguo Securities Co., said. “But they are fortunate to count on the domestic market.” All the three airlines said their foreign exchange gains slumped more

than 90 percent in 2012 because of the yuan’s slower appreciation against the dollar compared with a year earlier. Chinese carriers benefit from a stronger local currency as it pares the repatriated value of dollardenominated debts used to buy planes and fuel overseas. Air China, based in Beijing, rose 4.2 percent to close at HK$7.0 in Hong Kong trading. China Southern was unchanged at HK$4.30 while China Eastern gained 1.2 percent.

‘Biggest potential’ “China is still the market with the biggest potential in the world,” Air China said in its statement. “At the moment, China’s economic growth is still relatively high.” The nation’s growth will probably accelerate this year and next as the world’s second-biggest economy weathers a fragile global recovery, according to the Organisation for Economic Cooperation and Development. Expansion may reach 8.5 percent this year and 8.9 percent in 2014, the OECD said on March 22. The economy expanded 7.9

percent in the final three months of last year, the first acceleration in two years. Full-year growth of 7.8 percent was the least since 1999. Air China’s net income fell to 4.64 billion yuan (US$746 million), under international accounting standards, from 7.08 billion yuan a year earlier, the carrier said. The carrier’s income from its stake of about 30 percent in Cathay plunged 91 percent to 88 million yuan after the Hong Kong carrier suffered an 83 percent plunge in annual profit. Cathay also holds about a 19.3 percent stake in the Chinese carrier. China Eastern, the nation’s secondbiggest carrier by passengers, said profit declined to 2.95 billion yuan, trailing the 3.20 billion-yuan average profit estimated by 13 analysts. Net income at China Southern was 2.62 billion yuan, compared with the average estimate of 2.78 billion yuan in a Bloomberg survey of nine analysts. The yuan reference rate climbed 0.3 percent against the dollar last year, according to the China Foreign Exchange Trade System. That compares with a 5.1 percent jump in 2011.

be fully realized, so it’s good to bring in more participants,” Zhang Yanbing, an analyst at Zheshang Securities Co. in Shanghai, said yesterday. The foreign investors approved for index futures were already allowed to trade domestic stocks and bonds through the Qualified Foreign Institutional Investor programme. China more than doubled the total amount of funds able to be invested through QFII to US$80 billion from US$30 billion in April 2012. “There had been concerns that if we let QFIIs trade stock index futures, that this may lead to more short-selling on the market but the size of the QFII funds allowed to trade stock index futures is very limited, so that shouldn’t be a problem,” said Zheshang Securities’s Mr Zhang. Bloomberg News

AFP/Reuters

Bloomberg News

Air China had a net income of US$746 million in 2012

Beijing to allow more foreign investors trade stock futures C

hina’s securities and foreign exchange regulators are preparing to allow more foreign investors to trade domestic stock index futures, said two people with direct knowledge of the matter. JPMorgan Chase & Co. is among

companies that may win approval to trade the futures as soon as this week, said one of the people. The individuals asked not to be identified because they weren’t authorised to speak publicly about the matter. The new approvals would be the latest step China has taken to give foreign investors greater access to its capital markets after the ruling Communist Party pledged in November to promote freer movement of funds in and out of the country and to make the exchange rate more market-based. China in January approved the first batch of five foreign investors to trade the index futures, including Credit Suisse Group AG and Morgan Stanley. “If the market is too small, the value of stock index futures as a hedging and price discovery tool can’t

hina and Brazil have signed a currency swap deal, designed to safeguard against future global financial crises. The pact, first announced last year, will allow their central banks to swap local currencies worth up to 190 billion yuan or 60 billion reais (US$30 billion). Officials said this will ensure smooth bilateral trade, regardless of global financial conditions. Along with being the world’s second-largest economy, China is also Brazil’s biggest trading partner. “If there were shocks to the global financial market, with credit running short, we’d have credit from our biggest international partner, so there would be no interruption of trade,” said Guido Mantega, Brazil’s economy minister. The agreement was signed on the sidelines of the fifth BRICS (Brazil, Russia, India, China and South Africa) summit being held in Durban, South Africa. Trade between China and Brazil has grown robustly over the past few years, with volumes rising from US$6.7 billion in 2003 to nearly YS$75 billion in 2012. A large chunk of this growth has been driven by growing Chinese demand for Brazil’s resources, such as iron ore and soy products. Brazil’s Central Bank Governor Alexandre Tombini said the swap agreement would ensure that trade volumes between the two nations did not suffer if a financial crisis in the future hurt global liquidity. “This is sufficiently large to guarantee normal trade operations,” he said. China has also admitted South Africa’s Reserve Bank to a growing group of central banks able to invest in the country’s interbank bond market, another step to opening up capital markets and increasing international use of the yuan currency. The People’s Bank of China (PBOC) said it signed the agreement to enable the South African central bank to invest in the Chinese local debt market, but gave no details about the size of the investment programme. “This agreement will help broaden financial cooperation between China and South Africa as well as with other BRICs countries,” the PBOC said in a statement posted on its website. China has been pushing for a more international role for its currency, the yuan. It has been trying to promote the yuan as an alternative to the U.S dollar as a global reserve currency. As part of that push, it has signed a series of swap deals with some of its key trading partners. Such agreements not only allow central banks to swap currencies, but can also be used by firms to settle trade in local currencies rather than in US dollars, as happens now, since China’s currency is not fully convertible to other currencies. Earlier this year, the Bank of England said that it was in negotiations with its Chinese counterpart to finalise a three-year swap agreement.

March 28, 2013 business daily | 11

ASIA Singapore expects slower rise in visitors Singapore expects overseas visitor arrivals to grow at a slower pace of between 2.8 and 7.6 percent this year, hurt by a tight domestic labour market that has made it harder for firms to expand, the Singapore Tourism Board said yesterday. The citystate hopes to attract 14.8 to 15.5 million visitors this year, STB said. STB is targeting tourism receipts of S$23.5 billion (US$18.9 billion) to S$24.5 billion this year, up from last year’s estimate of S$23 billion. Visitor arrivals rose by 9.1 percent in 2012 over 2011, while tourism receipts grew around 3 percent to S$23 billion.

Japan Inc cut overseas deals

Qantas, Emirates deal approved

Japanese companies have sharply curtailed overseas acquisitions in the first three months of 2013 in a sign the recent slide in the yen could be taking some of the steam out of a record boom in outbound deals. Japanese firms announced US$5.5 billion worth of overseas acquisitions between January 1 and March 20, down 63 percent from the same quarter a year earlier, while the number of deals fell by more than a third, data from Thomson Reuters shows. The slowdown overlapped with a near 20 percent tumble in the yen against the dollar since mid-November in a sell-off triggered by the elevation of Shinzo Abe, a proponent of aggressive monetary easing, to premier. “The yen is clearly a factor. It makes it more difficult to buy,” said a senior executive in charge of acquisitions at a Japanese service company. “The yen used to be 70-something to the dollar. Now suddenly it’s in the low 90’s. That has an effect.” “But the truth is a lot of Japanese companies have already completed their major deals. That buying has run its course,” the executive added, in a nod to the US$300 billion worth of overseas assets snapped up by Japanese firms since 2008.

Regulator gives approval for a period of five years, half the time the airlines had originally bid for

Vietnam GDP growth slows Vietnam’s growth slowed in the first quarter, putting pressure on the government to revive bank lending in an economy hobbled by bad debt. Gross domestic product expanded 4.89 percent in the first three months of the year from the same period a year earlier, the General Statistics Office said in Hanoi yesterday. That compares with a previously reported 5.44 percent pace in the last quarter of 2012. Growth in the first quarter of 2012 was revised to 4.75 percent, the Statistics Office said. Prime Minister Nguyen Tan Dung in February approved a master plan to revamp the economy after a credit slump damped corporate expansion and consumer spending, while a weak property market hurt construction. “The State Bank of Vietnam has been loosening monetary policy and there’s plenty of liquidity, but it’s not clear how this can adequately revive economic activity in the absence of a functioning banking system,” Johanna Chua, the Hong Kong-based head of Asian economic research at Citigroup Inc., said before the report. “It will be difficult to sustain much of a domestic recovery when bank lending is still so weak.”

Indonesia parliament backs C.bank chief Indonesia’s parliament approved Finance Minister Agus Martowardojo to become the next head of the central bank, taking over monetary policy in one of the world’s fast growing economies. President Susilo Bambang Yudhoyono named Mr Martowardojo as his only candidate for the five-year term as governor of Bank Indonesia in a surprise announcement last month. It was second time lucky for Martowardojo. Parliament had rejected his candidacy for the central bank job in 2008. He will replace the incumbent, Darmin Nasution, when his term ends in late May. The president has not announced who will replace Martowardojo, a career banker who was regarded as a fiscal conservative, to become the country’s third finance ministry in as many years. The changes come at a sensitive time for the fast-growing economy and ahead of general and presidential elections next year. Monetary policy is under pressure with inflation rising, the current account deficit widening and the rupiah continuing to weaken.

antas Airways Ltd’s bid to tie up with Emirates on international flights and shift the so-called kangaroo route to fly through Dubai was cleared by Australia’s antitrust regulator. The Australian Competition and Consumer Commission (ACCC) said it thought the benefits of the alliance outweighed the drawbacks. “The ACCC considers that the alliance is likely to result in public benefits through enhanced products and service offerings by the airlines, and improved operating efficiency,” said Rod Sims, chairman of the ACCC. However, the watchdog gave approval for a period of just five years, half the time the airlines had originally bid for and made it conditional on the two carriers maintaining their pre-alliance capacity on routes between Australia and New Zealand amid concerns about reduced competition. “The one exception is the transTasman, where Qantas and Emirates compete on four routes which accounted for around 65 percent of total passenger capacity between Australia and New Zealand in the year to 30 June 2012,” said Mr Sims. “On these routes, the ACCC is concerned that Qantas and Emirates will have the ability and incentive to reduce or limit growth in capacity in order to raise airfares.” The alliance is seen as key to Qantas’ attempts to turn around its loss-making international operations. The carrier’s international

Qantas and Emirates originally agreed to the tie-up in September

division has been hurt by slowing demand from key markets, growing competition and higher fuel costs.

Brighter future The alliance with Emirates, agreed last year, will see the two collaborate on pricing, sales and flight scheduling. The first flight to transit through Dubai leaves Sydney on Sunday, headed for London. “Qantas is an Australian icon and the future of its international business is much brighter with this partnership,” said Alan Joyce, chief executive of Qantas. “Customers are already responding very strongly to the joint network,” Mr Joyce said in a regulatory statement yesterday welcoming the decision. The regulator granted provisional approval to the tie-up on December 20 and yesterday’s announcement follows the terms

Fitch upgrades Philippines to investment grade Rewarding president Aquino for leading growth resurgence

itch Ratings raised the Philippines’ credit rating to investment grade yesterday, a first for the Southeast Asian nation, in a move expected to boost investment and lift the country’s long-term growth potential. The upgrade is a vote of confidence in the government’s efforts to achieve fiscal sustainability, curb corruption and increase infrastructure spending, and comes as a growing number of much larger economies in the West struggle to avoid credit rating downgrades. “The Philippines’ sovereign external balance sheet is considered

strong relative to ‘A’ range peers, let alone ‘BB’ and ‘BBB’ category medians,” Fitch said in its statement, adding a persistent current account surplus underpinned by remittance inflows has helped the country obtain a net external creditor position. President Benigno Aquino, who took office more than two years ago, wants to achieve economic growth of as high as 8.5 percent before he steps down in 2016 by creating more jobs and increasing income levels in a country where nearly a third of its 96 million people live below the poverty line. Investors have already been

of the earlier decision. Qantas will sell tickets to 60 new one-stop destinations in Europe, the Middle East and Africa via Emirates’ Dubai hub under the alliance. The Australian carrier sought the tieup after losing market share on international routes to Middle East and Asian rivals offering a wider range of connections and more convenient flight times. Qantas shares rose 2.3 percent to close at A$1.76 in Sydney. The stock has risen 55 percent since the deal was announced on September 6 last year. Tim Clark, president of Emirates said the alliance will help connect Australian consumers to major markets. “This is a truly game-changing partnership that brings together two of the world’s best airlines,” he said. “Dubai is a leading global hub and through it, our two airlines will connect Australia to Europe, the U.K. and Northern Africa more smoothly than ever before.” Bloomberg News

pricing Philippine bonds at levels similar to investment-grade nations. But by having it made official by Fitch, it will reduce the country’s borrowing costs and widen Manila’s base of potential investors as some funds have restrictions on holding sub-investment grade debt. Philippine sovereign bond prices jumped on the news, with the benchmark 2037 bonds rallying to 115.50 basis points from 114.625 bid as soon as the upgrade was announced. The Philippine peso edged higher versus the dollar and local stocks extended modest early gains to more than 3 percent. Once regarded as an economic basket case, the Southeast Asian nation has more recently been attracting strong capital inflows, thanks to the economy’s resilience, backed by robust domestic demand, and expectations it would be promoted to investment grade status this year. Those inflows have driven a 15 rise in the stock market so far this year, making it Asia’s second best performing bourse after Vietnam. Reuters

12 |

business daily March 28, 2013

MARKETS Hang SENG INDEX NAME

NAME

PRICE

DAY %

VOLUME

10.6

-0.1883239

17879508

4870444

SANDS CHINA LTD

CLP HLDGS LTD

67.7

0.07390983

2270511

SINO LAND CO

CNOOC LTD

15.1

0.2656042

52017958

PRICE

DAY %

VOLUME

AIA GROUP LTD

34.1

1.186944

22269630

CHINA UNICOM HON

ALUMINUM CORP-H

3.13

0.3205128

14645456

CITIC PACIFIC

BANK OF CHINA-H

3.62

1.971831

519041793

BANK OF COMMUN-H

6.05

1.170569

16570931

BANK EAST ASIA

30.85

-0.1618123

1258333

BELLE INTERNATIO

13.04

-1.659125

22846500

BOC HONG KONG HO

25.95

-2.990654

27604694

CATHAY PAC AIR

13.18

-1.641791

5392316

CHEUNG KONG

113.7

0.4416961

5158692

6.95

-1.558074

25267251

CHINA COAL ENE-H CHINA CONST BA-H

6.4

0.6289308

207020929

CHINA LIFE INS-H

20.7

-0.2409639

45428549

CHINA MERCHANT

26.6

0.3773585

1946746

CHINA MOBILE CHINA OVERSEAS CHINA PETROLEU-H

COSCO PAC LTD ESPRIT HLDGS

20.55

5090000

2.226027

15530911

WHARF HLDG

68.95

6.982157

13029132

1.706161

8487828

2.477184

2438000

HONG KG CHINA GS

22.45

0.2232143

4439215

HONG KONG EXCHNG

133.4

0.2253944

2161902

HSBC HLDGS PLC

82.85 -0.06031363

10260031

81.95

1.548947

8152154

5.45

0.7393715

181502542

LI & FUNG LTD

10.78

-1.462523

12617743

31.05

-0.3210273

164418912

3593854 10388515

11.94

78.6

2.017937

1.226994 0.3802281

WANT WANT CHINA

53.65

9.1

13.2 105.6

TINGYI HLDG CO

HENDERSON LAND D

IND & COMM BK-H

15198375

TENCENT HOLDINGS

729553

HUTCHISON WHAMPO

2.255639

SWIRE PACIFIC-A

6861853

18278403

1275972

40.8

5184540

-1.032702

24202035

VOLUME

4590164

0.5649718

2.570093

0.6284916

2.158273

28.75

0.9791922

DAY %

72.05

-0.8438819

124.6

82.5

SUN HUNG KAI PRO

PRICE

9.4

HANG LUNG PROPER

21.95

POWER ASSETS HOL

11.36

HANG SENG BK HENGAN INTL

NAME

MOVERS

22487.26

1990320

LOW

22106.97

52W (H) 23944.74

CHINA RES ENTERP

23.2

1.754386

4047435

MTR CORP

21.9

2.097902

7690704

NEW WORLD DEV

13.12

1.391036

8028880

CHINA RES POWER

23.85

-0.625

5704900

PETROCHINA CO-H

10.24

0.589391

64823025

CHINA SHENHUA-H

28.6

0.7042254

18471694

PING AN INSURA-H

60.55

1.000834

11976305

1.131687

1269000

0.8856683

5703024

2 22490

INDEX 22464.82 HIGH

CHINA RES LAND

98.3 250.6

22100

(L) 18056.4 25-March

27-March

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

CHINA PACIFIC-H

0.5802708

7159152

22788481

CHINA PETROLEU-H

9.1

2.017937

164418912

0.3205128

14645456

CHINA RAIL CN-H

7.29

2.820874

26.55

1.724138

11028428

CHINA RAIL GR-H

3.96

3.62

1.971831

519041793

CHINA SHENHUA-H CHINA TELECOM-H

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.8

0.5291005

114734752

AIR CHINA LTD-H

4.166667

3.13

ANHUI CONCH-H BANK OF CHINA-H

ALUMINUM CORP-H

NAME

PRICE

DAY %

VOLUME

YANZHOU COAL-H

10.7

-0.9259259

17298104

ZIJIN MINING-H

2.59

0.3875969

17836294

11820000

ZOOMLION HEAVY-H

9.29

0.7592191

10100763

2.061856

18519632

ZTE CORP-H

13.96

-0.1430615

5332537

28.6

0.7042254

18471694

6.05

1.170569

16570931

3.97

0.2525253

38953127

25.15

0.1992032

2566500

DONGFENG MOTOR-H

10.56

2.923977

13979863

CHINA CITIC BK-H

4.86

1.461378

23679753

GUANGZHOU AUTO-H

6.47

2.535658

5210295

CHINA COAL ENE-H

6.95

-1.558074

25267251

HUANENG POWER-H

8.19

0.862069

20521177

CHINA COM CONS-H

7.1

7.250755

61951524

IND & COMM BK-H

5.45

0.7393715

181502542

CHINA CONST BA-H

6.4

0.6289308

207020929

JIANGXI COPPER-H

17.04

0.7092199

7587926

CHINA COSCO HO-H

3.82

0.2624672

4092500

PETROCHINA CO-H

10.24

0.589391

64823025

CHINA LIFE INS-H

20.7

-0.2409639

45428549

PICC PROPERTY &

10.14

-0.7827789

33555047

CHINA LONGYUAN-H

7.01

-3.708791

19023280

PING AN INSURA-H

60.55

1.000834

11976305

CHINA MERCH BK-H

17.16

1.41844

14639742

SHANDONG WEIG-H

7.1

-0.140647

11286189

BANK OF COMMUN-H BYD CO LTD-H

CHINA MINSHENG-H

10.74

3.269231

29909784

SINOPHARM-H

3.646833

4110808

CHINA NATL BDG-H

9.95

-1.679842

63960278

TSINGTAO BREW-H

48.05

2.234043

989300

16.28

1.622971

10802287

WEICHAI POWER-H

26.05

0.7736944

3165606

CHINA OILFIELD-H

NAME

MOVERS

0 11090

INDEX 11033.61 HIGH

11086.94

LOW

10847.31

52W (H) 12354.22 10840

(L) 8987.76 25-March

27-March

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.82

-1.398601

174173086

CHONGQING CHAN-A

9.35

5.530474

42860390

SAIC MOTOR-A

14.92

0.8108108

19829580

AIR CHINA LTD-A

5.79

1.401051

11653238

CHONGQING WATE-A

6.59

-1.494768

16799609

SANY HEAVY INDUS

10.57

-1.029963

20375903

4.4

10081330

CITIC SECURITI-A

12.77

1.028481

101262210

SHANDONG DONG-A

54.59

2.961147

5266096

ANHUI CONCH-A

17.7

-0.5059022

18075409

CSR CORP LTD -A

4.29

15488600

SHANDONG GOLD-MI

33.07

-0.7205044

6419996

BANK OF BEIJIN-A

9.36

0.5370569

28713254

DAQIN RAILWAY -A

7.52

-0.7915567

26772883

SHANG PHARM -A

13.69

3.948368

20486348

BANK OF CHINA-A

2.98

-0.3344482

30009436

DATANG INTL PO-A

BANK OF COMMUN-A

4.86

1.25

65586040

EVERBRIG SEC -A

BANK OF NINGBO-A

11.49

3.141831

34941069

GD POWER DEVEL-A

BAOSHAN IRON & S

4.77

15106805

BYD CO LTD -A

23.33

0.8646779

NAME ALUMINUM CORP-A

NAME

4.38

-0.4545455

8072711

SHANG PUDONG-A

10.76

0.5607477

113814685

13.91

1.163636

10952521

SHANGHAI ELECT-A

4.1

-0.243309

6091109

2.95

0.6825939

32121818

SHANXI LU'AN -A

18.22

0.1649258

8850065

GF SECURITIES-A

14.16

0.2123142

22118522

SHANXI XISHAN-A

11.9

8590254

2733959

GREE ELECTRIC

29.03

1.788219

11616250

SHENZEN OVERSE-A

6.03

0.3327787

23984129

64.16

-1.595092

979292

6.54

-0.1526718

23239614

CHINA AVIC AVI-A

23.26

1.394943

6192786

GUANGHUI ENERG-A

21.29

3.149225

39092068

SICHUAN KELUN-A

CHINA CITIC BK-A

5.27

99355096

HAITONG SECURI-A

10.86

1.023256

96650840

SUNING COMMERC-A

CHINA CNR CORP-A

4.23

-0.2358491

21036726

HANGZHOU HIKVI-A

39.43

-1.842171

2256279

TASLY PHARMAC-A

69.76

0.08608321

1388075

0.2506266

2413196

TSINGTAO BREW-A

36.27

2.602546

2396620

CHINA COAL ENE-A

7.27

CHINA CONST BA-A CHINA COSCO HO-A

HENAN SHUAN-A

-0.4109589

5712176

4.68

46143767

HONG YUAN SEC-A

18.82

0.8574491

8136567

WEICHAI POWER-A

22.1

-0.8078995

4413796

4.01

-0.4962779

9391574

HUATAI SECURIT-A

10.27

0.6862745

40813713

WULIANGYE YIBIN

22.3

-2.789887

30934357

CHINA EAST AIR-A

3.36

-0.2967359

9983900

HUAXIA BANK CO

10.82

1.027077

31212061

YANGQUAN COAL -A

13.75

-0.4344678

7751624

CHINA EVERBRIG-A

3.28

-0.3039514

99553456

IND & COMM BK-A

4.12

-0.2421308

40676271

YANTAI WANHUA-A

18.24

1.333333

24648491 9381354

CHINA INTL MAR-A

12.85

1.022013

3784299

INDUSTRIAL BAN-A

19.86

1.48186

77895938

YANZHOU COAL-A

17.4

-0.7981756

CHINA LIFE INS-A

17.37

0.929692

13461039

INNER MONG BAO-A

31.35

0.6743738

32009042

YUNNAN BAIYAO-A

86.2

0.2558735

1101780

CHINA MERCH BK-A

12.77

0.6304177

45729310

INNER MONG YIL-A

33.01

-0.5123568

6287959

ZHONGJIN GOLD

14.3

-1.243094

16949603

CHINA MERCHANT-A

13.33

1.678108

37584418

INNER MONGOLIA-A

5.35

0.3752345

221575395

ZIJIN MINING-A

3.47

-0.2873563

35672283

11737605

JIANGSU HENGRU-A

33.27

1.278539

3580507

ZOOMLION HEAVY-A

8.39

-0.3562945

27049527

JIANGSU YANGHE-A

62.86

-6.024817

9115152

ZTE CORP-A

11.57

-0.7718696

26296564

JIANGXI COPPER-A

22.95

1.503759

13038088

CHINA MERCHANT-A

25.45

0.3548896

CHINA MINSHENG-A

10.55

0.4761905

216312846

CHINA NATIONAL-A

9.55

2.357985

38978838

CHINA OILFIELD-A

17.32

-0.6310958

7754204

JINDUICHENG -A

11.76

0.5128205

8038548

CHINA PACIFIC-A

18.69

1.465798

12472472

JIZHONG ENERGY-A

12.98

-0.6885998

16499480

CHINA PETROLEU-A

7.47

0.4032258

66584234

KANGMEI PHARMA-A

18.21

0.8864266

49025666

CHINA RAILWAY-A

5.06

0.1980198

14541307

KWEICHOW MOUTA-A

166.79

-1.818931

4766221

CHINA RAILWAY-A

2.86

0.3508772

19423618

LUZHOU LAOJIAO-A

26.2

-4.344651

21493692

2.04

14327681

MOVERS 144

CHINA RESOURCE-A

31.59

4.602649

5317132

CHINA SHENHUA-A

21.94

-0.2273761

9294812

NINGBO PORT CO-A

2.49

-0.4

13961823

8.82

-0.1132503

12888643

HIGH

2630.01

LOW

2558.67

5.12

-0.967118

24950056

CHINA SOUTHERN-A

3.8

0.5291005

22508647

PING AN BANK-A

22.15

0.04516712

38599693

CHINA STATE -A

3.4

72165967

PING AN INSURA-A

42.13

0.3095238

26231433

CHINA UNITED-A

3.58

-0.8310249

97702904

POLY REAL ESTA-A

12.06

1.174497

51652187

CHINA VANKE CO-A

11.25

1.169065

60769798

QINGDAO HAIER-A

13.17

0.2283105

8331870

CHINA YANGTZE-A

7.39

0.2713704

10999739

QINGHAI SALT-A

28.44

-2.368692

7946584

PRICE DAY %

Volume

PRICE DAY %

Volume

CHINA SHIPBUIL-A

34 2635

INDEX 2583.53

METALLURGICAL-A PETROCHINA CO-A

122

52W (H) 2791.303 (L) 2102.135

2550

25-March

27-March

FTSE TAIWAN 50 INDEX NAME

NAME

PRICE DAY %

Volume

FORMOSA PLASTIC

70.8

0.1414427

6530556

TAIWAN MOBILE CO

101 -0.9803922

4977071

FOXCONN TECHNOLO

82.8 -0.4807692

7363657

TPK HOLDING CO L

596 -0.6666667

ACER INC

26.3

-1.12782

6039141

ADVANCED SEMICON

24.2

11055566

ASIA CEMENT CORP

36.3

0.6934813

3660626

FUBON FINANCIAL

ASUSTEK COMPUTER

359.5

1.84136

2435848

HON HAI PRECISIO

AU OPTRONICS COR

13.4

1.901141

169776701

HOTAI MOTOR CO

131.5

1.544402

4701209

CATHAY FINANCIAL

41.6

1.216545

CHANG HWA BANK

17.65

CHENG SHIN RUBBE

83.9

CHIMEI INNOLUX C CHINA DEVELOPMEN

NAME

2.747909

20901147

TSMC

83.5

33550376

UNI-PRESIDENT

242

1.25523

152100

HTC CORP

248.5

0.811359

10404400

21165269

HUA NAN FINANCIA

17.25

1.470588

5933680

0.2840909

10892363

LARGAN PRECISION

782

1.690507

1879672

0.5995204

1840480

LITE-ON TECHNOLO

48.6

1.355579

3727545

18.4

-1.340483

82251161

MEDIATEK INC

342.5

0.7352941

5691520

8.61

0.7017544

28171250

MEGA FINANCIAL H

24.35

0.8281573

12770776

CHINA STEEL CORP

26.15

0.1915709

11974564

NAN YA PLASTICS

52.7

2.330097

5401786

CHINATRUST FINAN

17.9

1.129944

20858482

PRESIDENT CHAIN

165 -0.6024096

969402

CHUNGHWA TELECOM

92.1 -0.1084599

66 -0.4524887

2905160

CATCHER TECH

COMPAL ELECTRON DELTA ELECT INC

4681994

QUANTA COMPUTER

0.2386635

9064118

SILICONWARE PREC

33.95

122.5

2.259036

5253783

0.8230453

4762005

SINOPAC FINANCIA

14.4

1.408451

18556768

FAR EASTERN NEW

30.7 -0.3246753

6487198

SYNNEX TECH INTL

55.6

0.1801802

3175831

FAR EASTONE TELE

67.9

0.1474926

4092765

TAIWAN CEMENT

37.1

0.6784261

6166657

FIRST FINANCIAL

18.65

0.8108108

8421777

TAIWAN COOPERATI

17.05

0.5899705

7507100

FORMOSA CHEM & F

68.6

-1.436782

6389271

TAIWAN FERTILIZE

71.3

1.134752

4299733

FORMOSA PETROCHE

78.9

0.5095541

909269

TAIWAN GLASS IND

27.6

2.033272

725785

UNITED MICROELEC WISTRON CORP

2666423

100.5

1.515152

25741023

56.9

-2.901024

25295942

11.15 -0.8888889

27280481

33.2

-2.639296

14712343

YUANTA FINANCIAL

15.05

0.6688963

11532401

YULON MOTOR CO

52.8

2804319

MOVERS

3 5490

INDEX 5487.23 HIGH

5487.23

LOW

5451.26

52W (H) 5639.93 5450

(L) 4719.96 25-March

27-March

March 28, 2013 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 59.8

33.5

17.1

59.4

33.2

17.0 59.

32.9

Max 33.45

Average 32.877

Max 41

Average 40.337

Min 32.65

32.6

Last 32.8

Min 39.85

Last 40.8

Max 59.8

Average 59.366

40.7

19.9

40.4

19.8

40.1

19.7

Max 19.92

Average 19.849

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

WTI CRUDE FUTURE May13

95.91

-0.446335894

2.951910691

107.2099991

BRENT CRUDE FUTR May13

108.92

-0.402340892

0.414861252

117.4300003

91.54999542

GASOLINE RBOB FUT Apr13

310.73

-0.106088857

7.129805206

334.4000101

238.2400036

GAS OIL FUT (ICE) May13

909.25

0.414135837

-0.70980071

1000.75

801.25

4.001

0.250563768

15.87025775

4.050000191

3.072000027

NATURAL GAS FUTR May13 HEATING OIL FUTR Apr13 Gold Spot $/Oz Silver Spot $/Oz

287.9

-0.079825079

-3.892375484

324.5100021

254.189992

1595.39

-0.1964

-4.1497

1796.08

1527.21

28.35

-1.5669

-5.8452

35.365

26.1513

Platinum Spot $/Oz

1574.5

0.226

3.7391

1742.8

1379.05

Palladium Spot $/Oz

758.65

0.413

8.4312

786.5

553.75

LME ALUMINUM 3MO ($)

1910

-0.984966304

-7.863000482

2200.199951

1827.25

LME COPPER 3MO ($)

7625

0.065616798

-3.858277645

8702.75

7219.5

LME ZINC

1905

-2.00617284

-8.413461538

2230

1745 15236

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) May13 CORN FUTURE

Min 19.66

19.6

Last 19.9

Max 17

Average 16.894

Min 16.76

Last 16.96

May13

16780

-1.148748159

-1.64126612

18920

14.975

-0.133377793

-3.293509848

16.95000076

14.5

730.5

0.034234851

4.319885755

838

520.25

WHEAT FUTURE(CBT) May13

733

0.2050581

-6.950174548

938

665

SOYBEAN FUTURE May13

1447

-0.051804524

3.412542433

1639.5

1218.75

COFFEE 'C' FUTURE May13

137

-0.436046512

-6.612133606

204.5999908

132.0500031

20.6

20.5

20.4

Max 20.6

Average 20.464

Min 20.3

Last 20.55

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 %

1.047 1.5169 0.9497 1.2833 94.56 7.9941 7.7617 6.2138 54.365 29.28 1.2436 29.898 40.775 9722 99.002 1.21873 0.84601 7.972 10.2581 121.34 1.03

-0.0764 0 -0.1264 -0.2952 -0.2855 -0.0263 -0.0283 -0.0322 -0.3403 0.2049 -0.2091 -0.1338 0.3728 0.1646 -0.2111 0.1707 0.292 0.1856 0.2778 0.0082 0

YTD %

(H) 52W

0.8865 -6.2253 -3.6117 -2.7066 -8.9467 -0.1364 -0.143 0.2704 1.1588 4.4399 -1.7851 -2.8932 0.5641 0.7303 -9.7725 -0.9231 -3.6158 3.0795 2.6545 -6.4035 -0.0097

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 6.2078 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 NAME

(H) 52W

(L) 52W

3.64

15.55555

3.94

2.29

4786755

CROWN LTD

12.34

0.9819967

15.65136

12.59

8.06

1136942

ARISTOCRAT LEISU

PRICE

DAY % YTD %

VOLUME CRNCY

SUGAR #11 (WORLD) May13

17.79

0.05624297

-9.234693878

24.56999969

17.67000008

AMAX HOLDINGS LT

0.045

-4.255319

-35.71429

0.098

0.045

13645500

88.06

0.022716947

16.08225679

93.93000031

68.18999481

BOC HONG KONG HO

25.95

-2.990654

7.676347

27.1

20.85

27604694 360000

CENTURY LEGEND

0.3

-7.692308

13.20755

0.42

0.215

5.95

0.1683502

-0.6677758

6.74

2.8

104000

CHINA OVERSEAS

21.95

2.570093

-4.978357

25.6

14.124

24202035

CHINESE ESTATES

12.54

0.8038585

3.385007

12.964

7.697

242714

CHOW TAI FOOK JE

10.54

-2.226345

-15.27331

13.4

8.4

3969500

EMPEROR ENTERTAI

2.31

0.8733624

22.22222

2.49

1.1

225000

2.6

-2.255639

113.1147

2.75

0.64

2244000 12873063

CHEUK NANG HLDGS

World Stock MarketS - Indices COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

14559.65

0.7745151

11.10726

14563.75

12035.08984

NASDAQ COMPOSITE INDEX

3252.483

0.531141

7.715456

3263.627

2726.68

HANG SENG BK

FTSE 100 INDEX

6403.51

0.06469387

8.574365

6533.99

5229.76

DAX INDEX

7876.37

-0.04187993

3.467767

8074.47

5914.43

FUTURE BRIGHT GALAXY ENTERTAIN

32.8

-0.7564297

8.072486

35.7

16.94

124.6

0.5649718

4.970517

131.5

99.2

729553

HOPEWELL HLDGS

31.6

-0.1579779

-4.962406

35.3

19.049

1205300

HSBC HLDGS PLC

82.85

-0.06031363

1.906515

88.45

59.8

10260031

HUTCHISON TELE H

3.9

-1.265823

9.550564

4.05

2.98

3130000

LUK FOOK HLDGS I

25.2

1.204819

3.27869

30.05

14.7

1891894

MELCO INTL DEVEL

13.82

2.827381

53.38512

13.96

5.12

8911050 5004584

NIKKEI 225

12493.79

0.1777636

20.1883

12650.26

8238.96

HANG SENG INDEX

22464.82

0.6890747

-0.8478628

23944.74

18056.4

CSI 300 INDEX

2583.53

0.329314

2.401081

2791.303

2102.135

MGM CHINA HOLDIN

16.94

-0.1179245

27.57677

18.449

9.509

TAIWAN TAIEX INDEX

7894.12

0.4806297

2.527698

8089.21

6857.35

MIDLAND HOLDINGS

3.39

2.727273

-8.37838

3.249

2375000

NEPTUNE GROUP

0.155

-1.898734

1.973687

0.226

0.084

7170000

NEW WORLD DEV

13.12

1.391036

9.15141

15.12

7.95

8028880

SANDS CHINA LTD

40.8

2.255639

20.17673

41.05

20.65

15198375

KOSPI INDEX

1993.44

0.4910017

-0.180772

2051.8

1758.99

S&P/ASX 200 INDEX

4994.993

0.9039349

7.443465

5163.5

3985

4907.915

1.350454

13.69634

4923.767

3635.283

SHUN HO RESOURCE

1.49

-0.6666667

6.428573

1.67

1.03

FTSE Bursa Malaysia KLCI

1665.8

0.7847147

-1.370668

1699.68

1526.6

SHUN TAK HOLDING

4.24

-0.7025761

1.193316

4.65

2.56

5309502

NZX ALL INDEX

938.899

1.565071

6.444739

944.123

755.149

SJM HOLDINGS LTD

19.9

2.366255

10.55556

22.15

12.34

13883400

PHILIPPINES ALL SHARE IX

4234.31

1.695603

14.47237

4268.160156

3238.77

SMARTONE TELECOM

12.74

1.433121

-9.517045

17.38

12.5

822200

WYNN MACAU LTD

20.55

1.481481

-1.909311

25.5

14.62

20601800

ASIA ENTERTAINME

4.06

-1.456311

32.67974

6.9

2.4

235369

BALLY TECHNOLOGI

52.05

0.366371

16.41691

52.7

41.74

188498 45800

JAKARTA COMPOSITE INDEX

20.3

(L) 52W

COTTON NO.2 FUTR May13

NAME

16.8

CURRENCY EXCHANGE RATES

NAME

METALS

58.2

Last 59.4

20.0

Commodities ENERGY

Min 58.2

41.0

39.8

16.9

58.6

HSBC Dragon 300 Index Singapor

638.35

0.95

2.78

STOCK EXCH OF THAI INDEX

1563.66

1.271348

12.33754

1601.34

1099.15

HO CHI MINH STOCK INDEX

491.26

0.3677522

18.73927

500.59

372.39

BOC HONG KONG HO

3.38

10.09772

3.59

2.7

Laos Composite Index

1397.82

15.06869

1455.82

967.99

GALAXY ENTERTAIN

4.35

0.6944444

9.571788

4.57

2.25

300

16.72

0.3601441

17.99577

17.49

10.92

1861867

JONES LANG LASAL

100.69

2.296048

19.95473

100.86

61.39

224394

LAS VEGAS SANDS

56.56

3.741746

22.53033

58.3216

32.6127

8937139

MELCO CROWN-ADR

23.08

1.988511

37.05463

23.12

9.13

4474031

MGM CHINA HOLDIN

2.19

18.37838

2.44

1.36

500

MGM RESORTS INTE

13.14

12.88659

14.8

8.83

10282533

SHFL ENTERTAINME

16.55

0.6690998

14.13793

18.77

11.75

232672

SJM HOLDINGS LTD

2.48

2.479339

7.35931

2.85

1.65

2500

124.54

2.384084

10.71207

129.6589

84.4902

1087340

INTL GAME TECH

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

WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily March 28, 2013

Opinion

A new business model for Cyprus Javier Solana

Former EU High Representative for Foreign and Security Policy, Secretary-General of NATO, and Foreign Minister of Spain.

nce again, Europe has peered into the abyss. But the tentative agreement between Cyprus and the troika (the European Commission, the International Monetary Fund, and the European Central Bank) probably means that the worst has been avoided. Big losses for large depositors in Cypriot banks will now be imposed, and the country’s second-largest bank will be shuttered. Looking ahead, however, Cyprus has the means not only to recover, but even to heal its longstanding division with the Turkish-backed statelet in the north of the island. Cyprus, of course, is just the latest country to be hit by the economic crisis surging through the Mediterranean. For years, Cyprus had an immense banking bubble, with the sector’s assets estimated at roughly seven times the country’s GDP, as foreign money poured into a tax haven within the euro zone’s secure environment. The design of the bailout has been shaped both by domestic pressures faced by euro zone leaders and by the exceptional nature of the Cypriot banking bubble: many European leaders suspect that the island had become a money-laundering centre for Russian individuals and entities, which pumped an estimated 68 billion euros into the country’s banks. Regardless of the details of the ultimate deal, the risk is that the ghost of Russia’s bailout of Cyprus in 2011 could provoke severe side effects across Southern Europe, both for governments’ borrowing costs and for small savers.

Experts say that the reserves could provide some 100 years of energy for Cyprus – and an alternative supply source for energy-hungry Europe. In fact, in the search for an acceptable bailout package, the future revenues from these assets were at one point considered as possible guarantees. The United States Geological Survey has estimated that the Levant Basin, which extends across the Israeli, Cypriot, and Lebanese seabed, contains some 3.45 trillion cubic metres of recoverable natural gas and 1.7 billion barrels of oil. Given their geographic location, however, these incredible reserves can be uncapped, extracted, and exported only on the basis of inter-state cooperation. As with all marine gas and oil deposits, the rights to the waters and the riches below are critical. And, given such riches, competition might appear lucrative at first sight. But cooperation stands to enlarge the pie. Moreover, economic agreements may promote closer cooperation in other realms. Energy matters have already led to an unprecedented warming in relations between countries such as Israel and Cyprus in recent years, with an agreement signed in 2010 formally delimiting these

states’ respective exclusive economic zones. It is not unimaginable that this type of cooperation could be extended to include other neighbours around the Levant. The good news is that Cyprus’s newly elected president, Nicos Anastasiades, may be open to such an agenda. Naturally, much will depend on how he fares politically in the current turmoil surrounding the bailout package. Anastasiades, a member of the pro-European Dimokratikós Sinayermós (Democratic Rally) party, won 57 percent of the popular vote

Beyond today’s tempest, there is light on the horizon. Cyprus, and its neighbours, must now pull together to reach it

on a platform that emphasised economic recovery, and this will naturally be his top priority.

Grounds for optimism Nevertheless, a cautious look beyond the current turbulence – and into Anastasiades’s history – provides grounds for optimism. In 2004, Anastasiades and his party supported the Annan Plan, developed by former United Nations SecretaryGeneral Kofi Annan and supported by the European Union. Annan’s reunification proposal provided the blueprint for a “United Republic of Cyprus” comprising a federation of two states. When put to a referendum, roughly two-thirds of the island’s 250,000 Turkish Cypriots in the north supported the Annan Plan, but 76 percent of the 860,000 Greek Cypriots in the south rejected it. It is not inconceivable, however, that Anastasiades’s victory could provide impetus for reopening the dialogue between the island’s north and south – that is, once the current crisis has passed. Such an outcome would be a major breakthrough for Cyprus and the region. Resolving the island’s longstanding division would nest Cyprus more comfortably in the EU, and the economic effects would be manifold,

extending throughout the eastern Mediterranean. For example, both Turkey and Greece could reduce their military spending (though naturally to varying degrees, given their respective geopolitical environments). Greece is the second-largest defence spender, relative to GDP, in the EU; clearly, in today’s economic climate, savings here could provide hugely welcome budget relief. And the Kurdish rebel leader Abdullah Öcalan’s recent call for a ceasefire is an encouraging sign that Turkey, too, stands to benefit from a peace dividend. Greek Prime Minister Antonis Samaras’s visit to Istanbul earlier this month was a heartening sign that tensions between Greece and Turkey are already beginning to ease. A deepening of cooperation in the eastern Mediterranean would provide myriad economic opportunities, not least the many related to developing the region’s crossborder maritime gas reserves. Anastasiades has endured a perfect economic storm during his first month in office, and the current crisis is certain to continue to dominate his agenda. But, beyond today’s tempest, there is light on the horizon. Cyprus, and its neighbours, must now pull together to reach it. © Project Syndicate

Valuable assets Nevertheless, it is imperative not to lose sight of some very valuable assets that Cyprus holds – assets that could mean the country’s economic salvation. In 2011, the American energy company Noble discovered some 200 billion cubic metres of gas in the Eastern Mediterranean – the value of this block, known as the Aphrodite gas field, has been estimated at some 80 billion euros. Work has already begun on extraction, with production expected to commence in 2018.

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 28, 2013 business daily | 15

OPINION Business

wires Leading reports from Asia’s best business newspapers

Beijing is no longer a cyclist’s paradise

Economic Times India’s government plans to introduce additional safety measures for foreign investors in an attempt to attract foreign capital into the country for bridging the massive current account deficit. The Reserve Bank of India is considering making it mandatory for foreigners to route foreign direct investment into India through independent accounts with banks to ensure funds are not misused by company issuing shares. The funds will go to a bank, which will release the funds to the extent equity issued by the company as stipulated in the agreement between the two parties.

Noah Feldman

Law professor at Harvard University and a Bloomberg View columnist

Vietnam News Export turnover of agricultural, forestry and fisheries products in the first quarter of the year surged 6.2 percent against the same period last year. The total value hit US$6.56 billion, according to the Ministry of Agriculture and Rural Development. The rise in export value of forestry products was attributed to the growing demand from foreign markets, said the director of the ministry’s Information and Statistics Centre, Nguyen Viet Chien. He said that the Chinese market saw the highest rise of 63 percent.

Inquirer Business The Philippines’ Securities and Exchange Commission has drafted a new set of guidelines on foreign ownership in partly nationalised industries, a more liberal framework wherein the 40-percent foreign equity limit is prescribed on both the voting shares and total outstanding shares. Based on the new guidelines, all covered corporations must, at all times, observe the constitutional or statutory ownership requirement, referring to the 60-40 percent local-foreign ownership requirement.

The Star The Malaysian government is reviewing the operations of Islamic endowments as it seeks ways to have them run by private corporations instead of religious bodies. Facilitating corporate management of Islamic endowments is one of several initiatives announced by the government to boost the country’s Islamic finance industry. They operate social projects such as hospitals, mosques and schools with donations received from Muslims in the form of land, cash or other valuables. They hold 11,091 hectares of land valued at 1.2 billion ringgit (US$384 million), according to the government.

decade ago, Beijing seemed like a cyclist’s paradise. True, there were no dedicated bike lanes, but that was because two-wheeled, man-powered vehicles owned the road. In what seemed like a scene from an environmentalist’s (slightly socialist) fantasy, scores of bikers would wait patiently for the light to change, then embark en masse for their destinations. By contrast, biking around my hometown of Boston seemed faintly crazy – an invitation to being sideswiped by one of our famously considerate drivers. Today all that has been turned on its head. When I went to rent a bike upon my arrival in Beijing last week, people looked at me as though I were mad. As I tooled around the old neighbourhoods near the Forbidden City, I was often the only non-motorised thing in sight. There were bike lanes, all right, but they were populated only by motorbikers and the occasional fellow intrepid Westerner. On the back streets, I saw a few older Chinese cyclists, wearing expressions of thorough disgust. Meanwhile, Boston, like lots of other U.S. cities, has become a reasonable place to bicycle. I still wouldn’t recommend it to the faint of heart, but as long as you bike defensively, you feel like a member of a forward-looking tribe of change agents.

Transportation revolution The story of China’s transportation revolution is an allegory of unexpected consequences and perverse incentives. It’s also an invitation to think about what happens when markets take hold in an environment unaccustomed to them. Start with the good news: As China has gotten rich, its people (at least in the cities) have gained access to goods that their grandparents never dreamed of.

Cars are an amazing invention, which is probably why they haven’t changed much in the century since they began to be mass-produced. You can go farther, faster, drier and warmer in them than in any form of transport since the dawn of humanity. What’s more, you can go wherever you want – a terrific aid to free choice and individualism. Yet one effect of proliferating cars is that they worsen street pollution. Exhaust is far from the only contributor to Beijing’s nowlegendary smog – coal-burning steel plants and other factories on the urban periphery do their part – but on the street, it’s the output of tailpipes burping their low-quality gasoline that hits you in the face. After three hours on the road, my throat was burning with acrid smog. I felt like I had smoked a pack of cigarettes. And all this was on a day when the rate of particles smaller than 2.5 milligrams was only about 135 per million – much lower than the 600 ppm that Beijing has reached in extreme conditions. The bad air quality drives people into cars, which makes the air quality worse. And once you have a car, you can drive to work from greater distances. Commuter traffic not only kills the air but also clogs the roads. Traffic has gotten so bad that the municipality has instituted a “drive every other day only” rule. People who can’t bike without choking, and are banned from driving, throng to the subways. Riding two of the main lines, 1 and 10, at rush hour, I found them clean and efficient. And, oh yes, more crowded than any train I have ever been on in any city on Earth. Etiquette hasn’t yet solved the “how many people can fit in this car?” problem. At one point, I saw several eager customers take a running start and fling themselves into the train like special-teams blockers heading down the

football field. Or actually, I felt it. The impact rebounded through the train to the point where I momentarily wondered if someone might be crushed. Getting out wasn’t any better because no one wants to make way, knowing how hard it will be to remount. The Beijing subway will have to be drastically expanded, but I can easily imagine preferring to sit in traffic with glass and steel between me and my fellow humans.

a car and stay out of the air. Regulating the transportation market distorts individual choices. Bike lanes in Boston’s narrow streets slow down cars that are already crawling. They enrage the Boston driver because they constrain his God-given freedom to cut the line of traffic from the side like a modern Paul Revere evading British patrols on his way to Lexington. They benefit the few on bikes, not the many who drive the market. But market regulation is necessary where collective action leads to rational madness. China has made amazing progress by bringing the market and its individual choice into daily life. It needs more experiments in that direction, and more individual freedom to go with it. But it also needs to notice where the free market must be managed. Bring back Beijing’s air, and bring back its bikes. A one-party state must be good for something. Bloomberg View

Individual choice That, of course, is the point: Driving is the optimal individual choice, given the conditions created by everyone else’s individual choices. The market prefers cars. More market, more cars. And the effect of the free market in transport choices is a disaster in the making. Everyone I saw in Beijing had a smartphone (they work in the subway!). And every English speaker I met had an application that provided two numbers: the U.S. Embassy’s estimate of the air quality, and the Chinese government’s counter-estimate. Information is wonderful: the higher the number, the better advised you are to take

China has made amazing progress by bringing the market and its individual choice into daily life. But it also needs to notice where the free market must be managed

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business daily March 28, 2013

CLOSING Winnie’s lawyers out of STDM meeting

ICBC 2012 net profit up 15 pct

Lawyers representing Winnie Ho Yuen Ki, the estranged sister of tycoon Stanley Ho Hung Sun, yesterday were once again denied entry at the shareholders meeting of Sociedade de Turismo e Diversões de Macau. STDM is the major shareholder of SJM Holdings Ltd. “We were invited and we provided evidence that we are the legal representatives of Moon Valley Inc.,” a company to which Ms Ho transferred her “7.3 percent stake” in STDM, said Jonhathan Man. “But we were not allowed to take part,” the lawyer was quoted as saying by Portuguese news agency Lusa. Ms Ho has been engaged in a long-running dispute with her brother over the gaming empire.

Industrial & Commercial Bank of China Ltd, the world’s most profitable lender, said 2012 net profit rose 15 percent to 238.53 billion yuan (US$38.41 billion) from 208.27 billion yuan a year earlier, as it increased lending and reined in bad debt. The bank reported 19 percent earnings growth in the fourth quarter. Net income climbed to 52.9 billion yuan from 44.4 billion yuan a year earlier, based on the full-year figures published by the Beijing-based lender yesterday. Non-performing loans fell to 74.6 billion yuan in the last quarter of 2012 from 74.75 billion yuan three months earlier, according to the statement.

While the Dutch minister issued a clarification later that day, several governments pushed for a confirmation at European level that the controversial tapping of Cypriot bank accounts won’t be part of the standard crisis-management toolkit. Mr Dijsselbloem became Dutch finance minister in November and took on the added European coordinating role in January. His spokeswoman, Simone Boitelle, declined to comment on the document, known as “Terms of Reference” in Brussels jargon.

Banker sacked

The authorities are planning to reopen the country’s banks today

Cyprus programme isn’t template, EU says Bank of Cyprus head ousted by monetary authority

uropean governments vowed that the swoop on bank accounts to finance Cyprus’s aid package won’t set a precedent for future rescues, pushing back against the impression given by Dutch Finance Minister Jeroen Dijsselbloem, according to a confidential document obtained by Bloomberg News.

“The Cypriot programme is not a template, but measures are tailor-made to the very exceptional Cypriot situation,” according to the document, agreed on Tuesday by representatives of euro zone finance ministries and intended as a guide for explaining Monday’s decision to the public.

Mr Dijsselbloem, who chaired the meetings on the Cypriot package, triggered declines in European markets on Monday by telling Reuters and the Financial Times that future bank clean-ups should be handled nationally and questioning the need for the use of European money to recapitalise ailing lenders.

After a tumultuous week in which an initial aid plan fell apart, European governments and the International Monetary Fund agreed Monday to loan Cyprus 10 billion euros (US$13 billion) as long as the country liquidated its second-largest bank and forced losses on bank bondholders and deposits of more than 100,000 euros. Cyprus’s central bank has fired the chief executive of the Bank of Cyprus (BoC), an official at the island’s largest commercial lender said yesterday. It follows the appointment of a special administrator to run the bank, which was saved from collapse this week under the painful European Union bailout for Cyprus. The bank’s chairman, Andreas Artemis, submitted his resignation on Tuesday. An official at the bank, who declined to be named, said local media reports that CEO Yiannis Kypri had been removed from the post were “valid”. The source was unable to confirm reports that the central bank had demanded the resignation of the entire board. Bloomberg News

Spanish deficit, retail deepen economic gloom Govt expected to introduce new reforms, spending cuts by June

pain revised up its public deficit for 2012 yesterday, piling pressure on the government to scale down its budget ambitions for 2013 as data suggested economic recovery was a distant prospect. Treasury Secretary Marta Fernandez Curras said the fiscal gap was 6.98 percent last year rather than the 6.7 percent announced previously – and excluding the billions of euros Spain borrowed to recapitalise its ailing banks. Spain moved away from centre stage in the euro zone debt crisis at the end of 2012, with renewed appetite for the country’s debt among

investors backstopped by a European Central Bank bond-buying promise. But that demand could wane if market concerns the savings levy imposed under Cyprus’ bailout might set a precedent are not assuaged, or if Spain continues to show no signs of getting a grip on its finances or healing its shrinking economy. That turnaround seems even more of a distant prospect following Wednesday’s news on the deficit, as well as data showing retail sales fell 8.0 percent year-on-year in February, reflecting the impact of an unemployment rate that has pushed beyond 25 percent.

“We continue to have a fairly negative short-term view on the Spanish outlook and we’re expecting GDP to fall 2.2 percent this year and by 2.1 percent next year, considering continued falling consumption,” said Guillaume Menuet, analyst at Citi. Spain is widely expected to cut its growth forecast and widen its deficit prediction for 2013 in April, and implement a new series of structural reforms and spending cuts by June to win breathing space from the European Union on its public finances. Ms Fernandez Curras also said the central government deficit was 2.22 percent of economic output at the

end of February - a large chunk of the target of 3.8 percent of GDP the government has set for the entire year. Gross domestic product is expected to contract sharply this year while unemployment could top 27 percent and the public deficit will remain high, at around 6 percent of output, the Bank of Spain said on Tuesday. Retail sales last grew in June 2010 and their fall has accelerated since September, when the government increased consumer taxes to curb its public deficit. They fell 10.0 percent in January, according to yesterday’s revised data. Reuters