Women’s group 1 eyes paid leave for fathers
MOP 6.00
April 19, 2013
Vitor Quintã
Page 2
Deputy editor-in-chief
Licence delay scares away HK hotel firm Page 5
Casino revenue keeps up strong growth: analysts
One-way street for home prices W
ith developers seeking to push through presales before new rules come into effect, residential prices reached the highest-ever level in March. The average home price eclipsed
the previous record set in January and inched closer to 90,000 patacas (US$11,300) per square metre, with Pearl Horizon and One Oasis leading the way. ‘Unrealistic’ asking prices for second-hand homes are driving
www.macaubusinessdaily.com
Year II
Number 273
Tuesday May 1, 2013
Editor-in-chief Tiago Azevedo
Page 6
buyers to purchase unfinished flats, which require a lower down payment. But sales almost dried up in April, after the government called on developers to show restraint on pre-selling. A new law will
soon compel developers to wait for construction plan approval from the government. The April sales drought did nothing to depress asking prices however as property owners anticipated continuing high demand. More on page 3
I SSN 2226-8294
High-end goods take exports to 4-year high Macau’s exports have reached the highest level since the last quarter of 2008, mostly due to sales of luxury goods to Hong Kong, official data show. But the city’s trade deficit reached a new record as imports also grew in the first quarter. The territory is stocking up on gold jewellery and watches to feed its thriving retail sector. Page 2
Hang Seng Index 22810
22784
22758
22732
22706
22680
April 30
HSI - Movers Name
Housing, wages, Ex-envoy to N. Korea fuel Labour Day rallies to be new U.S. consul The organisers of this year’s Labour Day rallies expect about 3,000 participants to hit the streets today. Demonstrators will be calling for more government policies to tackle soaring home prices, as well as a citywide minimum wage. The organisers have pledged to avoid any conflicts as the police again banned rallies from going through the busiest downtown roads. Page 4
The United States’ special envoy to the frozen six-party talks with North Korea will become the country’s consul general in Hong Kong and Macau later this year, the consulate confirmed to Business Daily. Clifford Hart – who has had previous assignments in mainland China and Taiwan – has been chosen to succeed Stephen Young, who took over as consul in March 2010. Page 5
%Day
ESPRIT HOLDINGS
3.42
HENGAN INTERNATIONAL
3.08
PING AN INSURANCE
2.59
CATHAY PACIFIC
2.25
CHINA SHENHUA
2.23
LI & FUNG LTD
-0.79
LENOVO GROUP
-0.84
WHARF HOLDINGS
-1.07
HANG LUNG
-1.15
SANDS CHINA
-3.78
Source: Bloomberg
Brought to you by
2013-05-01
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May 1, 2013
Macau
Bling gives exports a four-year sparkle Macau sold 438.6 million patacas worth of luxury goods to its showy neighbour in the first quarter Vítor Quintã
vitorquinta@macaubusinessdaily.com
T
he value of exports in the first quarter of this year was greater than at any time since the fourth quarter of 2008, mainly because of shipments of luxury goods to Hong Kong, official data show. Exports were worth 2.34 billion patacas (US$292.7 million) in the first quarter, 18 percent more than a year earlier, the Statistics and Census Service announced yesterday. But the growth was due solely to re-exports – goods shipped in only to be shipped out, with no value added to them here. The value of re-exports rose by 34 percent to 1.88 billion patacas. The growth in re-exports more than offset a contraction of 20 percent in domestic exports to 459 million patacas. S hipment s of luxu ry good s
propelled the jump in exports. Exports of diamonds and diamond jewellery rose by 90 percent to 255.3 billion patacas and exports of clocks and watches more than doubled to 202.3 million patacas. Hong Kong was the main destination for such goods, so reinforcing its position as the main market for Macau’s exports. Exports to Hong Kong increased by 34 percent to 1.37 billion patacas. They included 228.2 million patacas worth of jewellery and 90.6 million patacas worth of watches, in both cases almost three times as much as a year earlier. Exports of handbags to Hong Kong almost doubled to 51.3 million patacas. Exports to mainland China rose by 15 percent to 327 million patacas. Despite the increase in exports,
Macau imported almost 2 billion patacas worth of gold jewellery in the first quarter
more imports meant the trade deficit widened to 16.67 billion patacas, setting a new record for the second consecutive quarter. The value of imports was 19.01 billion patacas in the first quarter, 11 percent more than a year before. Almost two-thirds of imports were consumer goods, and the increase
Association to propose longer paternity leave At least two legislators like the proposal, but cannot vouch for their colleagues Stephanie Lai
sw.lai@macaubusinessdaily.com
T
he Women’s General Association will propose to the government this month that the law be amended to increase the minimum amount of paternity leave that employees are entitled to. The association told Business Daily it had
collected in the past two weeks nearly 14,000 signatures on a petition calling for a minimum of five days of paid leave for fathers working in the private sector. The association had set out to collect 15,000 signatures. The petition will be the basis of a proposal to amend
the labour law. The government is preparing new amendments to the labour law, which was last amended in 2008. At present employees in the private sector are entitled to only two days of paternity leave, both unpaid. Civil servants are entitled to five days, all paid.
in imports was mainly due to more consumer goods coming in. The fastest-growing category of imports was luxury goods for the thriving retailing business here. Imports of gold jewellery rose by 22 percent to 1.95 billion patacas and imports of watches rose by 29 percent to 1.36 billion patacas.
A spokesperson for the association’s social service division said: “We would like to fight for equal treatment of workers in the private sector.” Th e a s s o c i a t i o n s a y s two surveys it did last year show public opinion supports its proposal. The results of one survey, conducted in April last year, show 87.8 percent of the 969 respondents supported paid paternity leave. About onethird of respondents suggested seven days of paid leave. “We conducted another survey at the end of last year among 1,049 parents at our day-care centres. The majority also supported five days of paternity leave,” the spokesperson said. Legislative Assembly members Au Kam San and Kwan Tsui Hang say getting the assembly to back the proposal is a tall order. “Setting three to five days
of paid paternity leave would be a good direction to go,” said Mr Au, who belongs to the New Macau Association. But he said the matter “requires further social discussion via a citywide consultation”. He said the proposal would have a better chance of getting through the assembly if the government submitted it. Ms Kwan, who belongs to the Macau Federation of Trade Unions, says government policy needs to be more family-friendly. “Larger companies should have the resources to support this occasional paid leave for fathers,” she said. “Smaller companies usually have an older workforce, which requires fewer paternity leaves,” she said. “So I do not think they will strongly oppose longer paid paternity leave.”
Street naming campaign for architect Manuel Vicente
A campaign is under way to have one of the city’s streets named in honour of a leading Portuguese architect. Manuel Vicente died in Portugal on March 9, aged 78. The architect left a legacy in Macau of public sector and private sector works. They include a role in the reclamation plan that created the Nam Van and Sai Van lakes, the World Trade Centre building and public housing projects in Fai Chi Kei. Anyone wishing to contribute to a petition organised by Portugueselanguage newspaper Jornal Tribuna de Macau can sign it online at www.peticaopublica.com/?pi=JTM
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May 1, 2013
Macau
Presales push home price to March record high But market grew quiet last month after govt issued warning on sales of unfinished homes Tony Lai
tony.lai@macaubusinessdaily.com
P
resales of homes – forward sales of units that are unfinished and have not yet received a government permit classifying them as housing – have pushed residential prices here to the highest-ever level for the month of March. The deals for units in two luxury projects also doubled month-onmonth the number of transactions recorded in March. Buyers seem to be in a rush because the rules on presales are soon to be changed by the government. Buying purely ‘off plan’ will be barred. In future at least the foundations will need to be in place, and developers will not be able to alter designs and specifications post-sale. The sales spurt helped send average home prices to 88,097 patacas (US$11,012) per square metre in March, rising by 18.2 percent from the previous record of over 74,500 patacas set in January The Financial Services Bureau says the price was pushed up by sales of two high-end projects. One was Pearl Horizon, in the Areia Preta district, accounting for 45 percent of the more than 1,000 flats sold in the Macau peninsula. The other, One Oasis, took up 88 percent of the 371 flat sales in Coloane. Another residential project launched by the Pearl Horizon developer also contributed to the rise, people in the industry said. “The market seemed to be very prosperous that month [March], propelled by the strong sales of first-hand flats whereas sales of
second-hand units remain sluggish,” said Ronald Cheung Yat Fai, chief executive officer of Midland Realty (Macau) Ltd. The home price in Coloane rose by 26 percent month-to-month to 112,892 patacas a square metre while there was a three percent increase to 94,221 patacas in the Areia Preta district. Marco Wong Kwok Ki, district sales director of HKP Estate Agency (Macau) Ltd, said buyers favoured unfinished projects, which “require a smaller amount of cash” as down payment than second-hand homes. “There is also a lack of supply in the second-hand market and a lowerthan-expected price evaluation from banks,” Mr Wong said. But, excluding sales of unfinished homes, home prices here were not at an “hysteric level,” he added.
Outside investors are buying fewer homes here, Mr Lau said
Govt vows to tackle housing speculation T
he administration’s goal amid soaring home prices is to minimise property speculation, said Secretary for Transport and Public Works Lau Si Io. But the official fell short of confirming the introduction of new property curbs. “The government now focuses on satisfying [residents’] first-home needs while suppressing demand from speculation or investment,” Mr Lau told media yesterday. The government “does not rule out putting out some special measures if there is such need,” the secretary said on the sidelines of a public event. Mr Lau made a similar remark in March after new property curbs were introduced in Hong Kong and in mainland China. But he again made no mention of when or how the administration may introduce further measures. Mr Lau reiterated that buyers should be “careful” as “some recent analysis show there will be changes in the [housing] markets of Macau and the neighbouring regions”. Chief Executive Fernando Chui Sai On last week said the government could impose a new levy for home purchases when the buyers own more than one house, raise the stamp duty or further tighten mortgages. Outside buyers accounted for a smaller slice of the transactions and it was mostly residents buying a second home here, Mr Lau noted yesterday. Mr Lau met with the Legislative Assembly’s first standing committee yesterday to discuss the land law revision. Landowners could have half-year to choose whether their concessions will be ruled by the current law or the new revised version, said committee president Kwan Tsui Hang. T.L.
March spurt Official data also show the number of transactions in March hit 1,569, nearly twice as much as in February and rising by 24 percent from a year ago. March is a traditionally strong month for the sector as buyers “had accumulated purchasing power since Chinese New Year or even since Christmas,” Mr Cheung added. The number of deals actually fell in April however as the developers withheld unfinished projects from the market. “After the government publicly urged buyers to be careful, the buyers or long-term investors have been
hesitant to enter the market while developers have also not launched any new sales,” said Mr Wong. Jaime Carion, director of the Land, Public Works and Transport Bureau, said last month the developers should not launch housing presales before their construction plans were approved. Pearl Horizon, which includes over 5,000 flats, and another project in Areia Preta also launched by developer Polytec Asset Holdings Ltd had not yet received officials’ blessing, Mr Carion confirmed.
Mr Wong said there were hardly any sales, apart from a few transactions in the second-hand market, in the past two weeks. The number of deals plunged below 800 in April, the Midland executive estimates. Centaline (Macau) Property Agency Ltd recorded 26 deals between April 15 and 28, decreasing by 16 percent from the April 1-14 period. But both Midland and HKP believe home prices have not been negatively affected by last month’s plunge in transactions. “Right now flat owners are not lowering their selling price,” said Mr Cheung. “They think that if those [firsthand] flats can be sold at that price, they can do it as well.” Chief Executive Fernando Chui Sai On asked the public again last week to “stay calm” before buying homes but made no mention of any policy changes aimed at cooling the market.
MOP 88,097
Few home sales recorded in past two weeks
Average price per square metre of homes sold in March
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May 1, 2013
Macau Brought to you by
HOSPITALITY Stamp of approval The figures for late March show that the number of visitors in the first quarter was almost 2 percent higher this year than last year. Much of the increase was due to more mainland Chinese visitors travelling on individual visas. Some mainlanders are allowed visas to travel here as individuals rather than as members of tour groups, which travel on collective visas. More than one-quarter of visitors were mainlanders travelling on individual visas. Over 1.9 million mainlanders travelling on individual visas visited in the first quarter, 170,000 or about 10 percent more than a year earlier. As usual, the main source of mainland Chinese visitors was the province of Guangdong. Visitors from Guangdong always set the trend. Bear in mind that year-on-year comparisons of the numbers of visitors in the opening months of the year may be skewed by Lunar New Year, a peak period for tourism, being a moveable feast. Lunar New Year fell this year in February but last year in January.
Thousands to take to the streets over homes, jobs The organisers promise that Labour Day marches and rallies will be peaceful Tony Lai
tony.lai@macaubusinessdaily.com
T The number of visitors in February this year was no higher than the number of visitors in January last year. The number of visitors from Guangdong in February this year was about 720,000, fewer than in January last year, when about 780,000 came from Guangdong. On the other hand, the number of visitors from Guangdong travelling on individual visas was about 10 percent higher in February this year than in January last year. If the pattern set in the first quarter is followed for the rest of the year, it will confirm that mainland Chinese travelling on individual visas are becoming more prominent among visitors in general. J.I.D.
1,953,532
Mainland Chinese visitors travelling on individual visas in Q1
he organisers of this year’s Labour Day demonstrations expect about 3,000 people to show up today to call for more government action on housing and employment. Six associations have said the demonstrations they are arranging will be peaceful. The Public Security Police have urged demonstrators to “express their demands rationally”. Physical confrontations and outbreaks of violence between police and Labour Day demonstrators are not uncommon. Labour Day was particularly rowdy in 2007 and 2010. In 2010 protesters tried to force their way through barricades barring access to San Ma Lou, leading to clashes that injured 41 people. The Macau Workers Self-Support Association expects over 2,000 people to join its demonstration today. The association has promised that the demonstrators will exercise selfcontrol, even though the police have denied them permission to march along Avenida Infante D. Henrique. “We will follow the route mandated by the police, as we do not want any conflicts,” the association’s president, Cheung Wing Fat, told Business Daily. The head of an ironworkers group, Wong Wai Man, said: “We will march peacefully, but it is difficult to say if there will be unreasonable actions by the police.” Mr Wong expects about 30 people
to join his group in calling for the government to give residents priority in employment and housing. The Macau Workers Self-Support Association will call for government action to curb the rise in the cost of housing, and for a universal minimum wage of 30 patacas (US$3.75) per hour.
Inducements denied Macau has a minimum wage only for employees of cleaning and security companies contracted by the government. It is due to rise to 26 patacas per hour by June. Representatives of employers and employees are discussing whether a minimum wage of 23 patacas to 28 patacas per hour should be mandated for all cleaning and security staff. Mr Cheung denied that he had offered inducements to people to join his association’s demonstration. He was accused of offering rice to lure elderly people to take to the streets on National Day on
October 1 last year. Lei Sio Kuan, who heads two associations intending to hold demonstrations today, told Business Daily: “There will be about 200 to 300 construction workers marching.” Mr Lei said: “They have been unemployed since Lunar New Year as there is not enough ongoing construction and too many illegal workers.” The Macau Youth Dynamics group, which has links to the pandemocrat New Macau Association, expects 500 demonstrators to join its march. A member of the group’s board, Lee Kuok Fu, said: “Youths face many problems nowadays and they cannot see a clear picture of their future – even the simple goals of living and working contentedly.” Mr Lee said his group would demand universal suffrage and government action to keep Coloane clear of high-rise buildings. An association of Macau parents will demand to be reunited with their children that live in mainland China.
Six associations intend to hold demonstrations today
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May 1, 2013
Macau HK operator gives up ZAPE budget hotel
Mr Hart has had three diplomatic assignments in mainland China
Rosedale says it waited ‘a number of years’ for govt to grant hotel licence Vítor Quintã
vitorquinta@macaubusinessdaily.com
A New U.S. consul ‘later this year’ Veteran diplomat in charge of North Korea nuclear talks to take over Macau, HK post Vítor Quintã
vitorquinta@macaubusinessdaily.com
C
lifford Hart, a veteran diplomat currently in charge of nuclear talks with North Korea, will take over as United States consul general in Hong Kong and Macau “later this year,” the consulate confirmed. South Korean state news agency Yonhap reported late Monday that Mr Hart would soon quit his current position job, quoting an unnamed U.S. Department of State official. “Stephen Young is the current consul general and he will remain so until his slated departure, sometime later this year,” a spokesperson for the consulate told Business Daily yesterday. He declined to say when Mr Young, who took over as consul in March 2010, would leave his post. Asked if there was any specific reason why Mr Young was leaving Hong Kong, the spokesperson said
it is “a planned departure”. Mr Hart “has been named as his successor and an official announcement will be made in due time,” he added. The diplomat has served as American special envoy to the sixparty talks with North Korea since June 2011. The negotiations, which also involve South Korea, China, Russia and Japan, have been frozen since 2009. He has also worked as a key point of contact with North Korea’s permanent mission to the United Nations. Mr Hart has had previous assignments in mainland China, Taiwan, the Soviet Union and Iraq. In fact his first diplomatic post was at the U.S. Consulate General in Guangzhou in 1984-1985. He is fluent in Mandarin and Cantonese.
Hong Kong-based operator has sold a budget hotel in ZAPE district at a loss, after giving up on waiting for the government to grant it a hotel licence. Rosedale Hotel Holdings Ltd said on Monday that it was selling subsidiary Square Inn Hotel Management Ltd to three people for HK$52 million (US$6.7 million). Square Inn, a Macau-based subsidiary, holds a lease contract for the operation of the three-star Dynasty Oriental Hotel, the firm told the Hong Kong Stock Exchange. The hotel “has been erected for a number of years” but it “has not yet been in operation, pending the grant of a hotel licence by the relevant governmental authority,” the filing says. Rosedale bought Square Inn “a few years ago to enable the group to enter into the budget hotel market in Macau”. But the company has finally given on waiting, stressing that it “has no control as to the timing of the issuance of the hotel licence”. Business Daily asked the Macau Government Tourist Office – in charge of granting hotel licences – for more information but received no reply before press time.
Even if it were to get the licence, “further substantial resources shall have to be allocated” to maintain the ZAPE district hotel “at a reasonable operating standard,” Rosedale said. Business Daily asked Rosedale if it was still interested in the Macau budget hotel market but received no reply before press time. The hotel operator estimates it will make a loss of HK$6.3 million on the sale. It did not disclose how much it originally paid for the Square Inn acquisition. But Rosedale believes that the sale “is in the best interest of the company,” providing it with “an exit opportunity”. The money raised from the deal will be used “for its hotel operating business and as general working capital of the group.” Kong Wa, a minority shareholder in Macau-based developer Companhia de Fomento Predial Chon Meng (Internacional) Ltd, is now in control of Square Inn with a stake of 59 percent. In February the tourism office told Business Daily it was reviewing six applications for budget hotel projects that would offer just 452 rooms. Currently there are only 1,400 budget hotel rooms available in Macau.
Celebration of International Labour Day
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May19, 1, 2013 April 2013
Macau Brought to you by
Financial Monitor No labour slack
April revenue MOP26 bln plus, analysts say Would imply 12 percent plus year-on-year market expansion Michael Grimes
michael.grimes@macaubusinessdaily.com
The latest data show the unemployment rate is steady at 1.9 percent, its lowest ever. The figure reflects the tightness of the labour market. It implies that any growth in the labour force will have to be in the form of more workers from abroad. The latest data show the number of permanent residents that are unemployed is under 7,000. In the present circumstances, it may be difficult to reduce this number. More and more unemployed people are unqualified for the openings in the industries that drive the economy. Look at the quarterly unemployment figures for the past few years. The number of unemployed has declined every year.
Run gamblers run – strong finish to April predicted
From 2009 to last year, unemployment in any given quarter was lower than a year earlier. The downward trend in any given year was much like the downward trend any other recent year – except 2008. The international crisis that year caused the number of unemployed here to rise. By the first quarter of 2009 the number of unemployed was one-third higher than a year earlier. The trend over the course of 2008 was different from the trend in subsequent years, when the steepest drop in the number of unemployed was always in the fourth quarter. In 2008 the number rose in second half, heralding three successive quarters of climbing unemployment. J.I.D. The content of this column is the work of Business Daily’s journalists.
48.4 % Drop in unemployment, 2009Q1-2012Q4
F
our analysts estimate Macau’s gaming revenue grew between 12 percent and 15 percent year-on-year in April. It’s based on unofficial industry returns up to and including April 28, and implies gross revenue up to that date of at least 26.3 billion patacas (US$3.29 billion). Preliminary official figures from the government for the whole month are not expected until tomorrow because of the public holiday today. The most conservative monthly growth percentage estimate is from Anil Daswani of Citi in Hong Kong. He estimates year-on-year expansion of 12 percent in April, producing a whole month tally of 28 billion patacas. It equates to 933 million patacas daily. This appears to be a higher tally on a lower average daily run rate than suggested by other analysts. It’s possibly based on the expectation of a stronger than average hold rate for the casinos on VIP live dealer baccarat – where gross revenue is calculated after the process of ‘rolling’ non-negotiable chips is completed. Cameron McKnight of Wells Fargo in New York puts April growth in the range of 13 percent to 15 percent year-on-year. The lower number – including slot revenue – suggests an average daily rate (ADR)
of 943 million patacas, he says. He adds that for the market to achieve the upper limit of 15 percent year-onyear expansion depends on whether the run-up to the Labour Day holiday today brought holiday-sized crowds. “Our 15 percent estimate is based on ADR of 1.20 billion patacas for the remainder of the month, which assumes increased play during the traditionally strong May Golden Week holiday,” states Mr McKnight. “Our checks suggest hotel occupancy for the holiday is high,” he adds.
Mixed signals Mr McKnight says purchasing manager indices (PMIs) and other macroeconomic data from the mainland – that in the past have shown a positive correlation to Macau gaming revenue growth – have been giving mixed signals. “We note both [mainland] manufacturing PMIs increased sequentially in March. However industrial profit growth slowed in March to five percent year-onyear from 17 percent for JanuaryFebruary, and the April HSBC flash manufacturing PMI slowed to 50.5,” he states. “We note macroeconomic data has been uneven since the beginning of the year, yet Macau gaming revenue
growth is still on pace to accelerate from last year,” he adds. David Bain of independent United States-based brokerage Sterne, Agee & Leach, Inc., suggests run rates improved significantly between April 22 and 28 inclusive compared to a week earlier. “As of the 21st of April, the run rate was [indicating] approximately eight percent [year-on-year growth], now it is back to approximately 14 percent plus,” Mr Bain wrote in a note to clients. He added: “This may show two things: first, the one week downtick in run rate two weeks ago was likely hold related; and second, some patrons may have gone to their Labour Day holiday early (last weekend).” Kenneth Fong of J.P. Morgan in Hong Kong, says in a note that the daily run rate for the seven days to April 28 was 957 million patacas, “slightly better” than expectations of 930 million patacas. “If we assume the daily revenue for the last two days of the month to stay higher at 1.05 billion patacas due to [the] Golden Week effect, April should end at around 28.3 billion, or 13 percent year-on-year growth,” writes Mr Fong. “Luck factor is only slightly below normal based on our discussions with junket operators,” he adds.
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May 2013 April1,19, 2013
Macau
Kung Fu Panda comes to Cotai Sands China announces new in-house entertainment following closure of ZAiA show early last year Michael Grimes
michael.grimes@macaubusinessdaily.com
H
ong Kong has Mickey Mouse. From July, Macau will have Po from Kung Fu Panda, Shrek and Alex the Lion. The three characters – or rather people dressed as them – will be seen in the nongaming areas of the Sands Cotai Central resort on Cotai. It follows a deal between the rights owner of the cartoon characters – California-based DreamWorks Animation SKG – and the resort operator Sands China Ltd. The terms of the deal have not been made public. But both sides say they are aiming at a long-term relationship that will boost the family appeal of Macau. “One of the very important goals of our company is to provide world class entertainment for families living in and visiting Macau and that will diversify the city’s tourism offering,” said Edward Tracy, chief executive of Sands China at yesterday’s launch. Maria Helena de Senna Fernandes, director of the Macau Government Tourist Office, and a guest at the launch, echoed that theme. “I believe this will bring the service level and also the product
offering of Macau to a new level,” she said. “Previously, a lot of people would say ‘What’s new in Macau’? So I think this will prove we are always rejuvenating ourselves and we are always trying to give new experiences to our visitors,” she added. Sands China has been looking for headline grabbing in-house entertainment since the closure of its Cirque du Soleil show ZAiA in February 2012. Sands and its parent Las Vegas Sands Corp. spent a lot of money on ZAiA for insufficient return. The 1,800-seat Venetian Theatre at The Venetian Macao was purposebuilt for Cirque at a cost of US$100 million (800 million patacas), LVS said in a regulatory filing in 2008. In its 2011 annual report LVS said it also expected to pay “a one-time charge of approximately US$45 million during the first quarter of 2012 related to the closure of the show” following disappointing ticket sales. With the DreamWorks deal, Sands appears to be taking a gradual approach. There will not be – at this stage in the relationship – a stage show featuring the characters, stated Sands. “This summer we will actually
launch the first phase, and within the first phase we will take some key learnings with regard to customer interaction and engagement with employees, the community and visitors,” said Brendon Elliott, Sands China’s vice president of sales & resort marketing, yesterday. Initially a total of eleven characters from three DreamWorks franchises – Kung Fu Panda, Shrek and Madagascar – will patrol Sands Cotai Central only, mingling with the guests in the manner of Mickey Mouse and Donald Duck at Hong Kong Disneyland. There will also be opportunities for hotel guests or their children at the Holiday Inn and Sheraton properties at Sands Cotai Central to
NO
MIN
meet one-on-one with the characters. “For example you can get a wake up call from Shrek,” said Mr Tracy. He didn’t say whether guests would have to pay for that privilege. “Over 50 percent of our guests over the summer period are families, and 20 percent of our guests are children,” stated Mr Elliott. Yoshi Maruyama, global head of location-based entertainment for DreamWorks, said brand recognition for the production house’s characters was very high in China. “Kung Fu Panda 2, which is our latest release of the Kung Fu Panda franchise, in China was the number one animated film of all time. So we know we have a blockbuster in that particular market,” he explained.
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May19, 1, 2013 April 2013
Greater China
Taiwan GDP growth falls to 1.5 pct Sluggish rise in gross domestic product came as a disappointment last quarter. Taiwan’s export orders and industrial output for March unexpectedly fell, while Japanese and South Korean production missed forecasts as faltering demand limits Asia’s recovery. “Taiwan’s GDP is a reflection of a sluggish global recovery and the decline of global demand, notably from China,” said Raymond Yeung, a Hong Kong-based senior economist at Australia & New Zealand Banking Group Ltd. The data suggests the monetary policy stance will be maintained, “unless there is a significant contraction of the regional economies from unforeseeable risks, including avian ‘flu”. The Taiwan dollar climbed 0.3 percent to NT$29.464 against its U.S. counterpart, according to Taipei Forex Inc. It has declined about 1 percent this year.
Lowest profit Taiwan’s first quarter stumble follows weaker-than-expected production and export figures
T
aiwan’s economy expanded at a slower pace than economists estimated in the first quarter as a faltering global recovery hurt exports, increasing pressure on the central bank to extend an interestrate pause to aid growth.
Gross domestic product rose 1.54 percent in the three months through March from a year earlier, after increasing 3.72 percent in the fourth quarter, the statistics bureau said in a preliminary report yesterday. The gain was less than all estimates
Protesters in talks to end port strike Dock workers demanding higher wages, better working conditions
H
ong Kong’s government made a renewed effort to end the longest strike at the city’s container terminal after workers at billionaire Li Ka Shing’s docks scaled back demands for a 23 percent wage increase. The labour department invited the Union of Hong Kong Dockers to talks yesterday, where contractors of Mr Li’s Hongkong International Terminals Ltd will be present, employees’ union representative Wong Yu Loy said. Earlier talks aimed at defusing the four-week dispute failed after the workers rejected a 7 percent pay raise. The terminals are operating at 90 percent of capacity and the delays faced by ships for berthing have been cut after the hiring of temporary workers, Canning Fok, chairman of Hutchison Port Holdings Trust, said in Singapore. The biggest industrial action ever faced by Mr Li, Asia’s richest man, led at least 100 ships to skip Hong Kong in favour of nearby ports, threatening the city’s reputation as a trade hub for China. “The stalemate is hurting everyone,” said Geoffrey Cheng, an analyst at Bank of Communications Co. in Hong Kong. “Yes, the workers are under pressure, but it’s also hurting the port operator as operations haven’t fully recovered.”
The industrial action was “pretty much over” after an April 1 court order prohibited workers from demonstrating at the docks, Mr Fok said on Monday. The port operator has received interest for
in a Bloomberg News survey of 17 economists, where the median was 3.1 percent. The island’s growth slowdown adds to signs of a cooling global economy after China and the U.S. expanded less than analysts estimated
jobs at terminals from outsiders, said Gerry Yim, chief executive of Hutchison Port Holdings.
Double digits Contractors at Mr Li’s terminals in the world’s third-busiest container port hired workers to cut the waiting time for ships on average to 20-to-25 hours last week, compared with about 60 hours when the strike started. Suggestions that the strike is over is “nonsense” and it’s the biggest weapon for the workers to seek a fair treatment, said Ho Wai Hong, another representative of the Union of Hong Kong Dockers.
The terminals are operating at 90 percent of capacity
Taiwan last week confirmed an H7N9 bird ‘flu infection in a traveller returning to the island from China, the first incidence of the killer virus spreading outside the mainland. The island’s economy contracted after an outbreak of severe acute respiratory syndrome, or SARS, hit Taiwan in February 2003, as companies and individuals cut back on travel, dining out and entertainment. President Ma Ying-jeou has
The workers are willing to drop an earlier demand of a 23 percent pay increase, Lee Cheuk Yan, the general secretary of the Hong Kong Confederation of Trade Unions, said. “It’s open to discussions,” Mr Lee said. Workers would still want an increase in the “double digits,” he added. About 450 dock workers, mostly crane operators and stevedores, walked out on March 28, demanding higher wages and better working conditions. Some of the strikers have also surrounded Mr Li’s 70-story Cheung Kong Center building in the city’s Central district, spurring a court battle over their right to protest. Bloomberg News
99
May 2013 April1,19, 2013
Greater China sought closer trade and investment ties with China to bolster the island’s economy. Taiwan has allowed domestic lenders to conduct yuan business and doubled the quota for mainland visitors, and this month said it will let Chinese lenders own as much as 20 percent of some financial institutions. Export orders, an indication of shipments in the next one to three months, fell for a second straight month in March. Overseas sales are equivalent to about two-thirds of the economy. HTC Corp., Taiwan’s largest smartphone maker, last month posted its lowest quarterly profit on record after the delay of its newest flagship phone. The statistics bureau in February raised its forecast for GDP growth this year to 3.59 percent, and said inflation may average 1.37 percent, with exports growth of 6.23 percent.
the risks of financial imbalances and rising asset prices fuelled by strong credit growth and easy financing conditions. Governor Perng Fai-nan has said the monetary authority will maintain order in the foreign-exchange market if needed, and asked lenders to exercise discipline while extending mortgages in areas where property prices have risen. The central bank held the benchmark discount rate on 10-day loans to banks at 1.875 percent for a seventh meeting last month. The weak worldwide demand “would worry the central bank,” said Ma Tieying, a Singapore-based economist at DBS Group Holdings Ltd. “It is most likely to keep rates on hold in coming quarters to support the economy.” Reuters/Bloomberg News
Maintain order Private consumption gained 0.35 percent in the first quarter from a year earlier, slowing from a 1.55 percent pace in the previous three-month period, yesterday’s report showed. “We may not see a strong rebound until Q3-Q4, but room for central bank to decrease rates is limited because it’s not effective in stimulating demand and there’s no inflation pressure. The central bank may lower Taiwan dollar instead,” said Andrew Tsai, an economist of KGI Securities. The International Monetary Fund earlier this month lowered its forecasts for global growth and China’s expansion this year, and said yesterday that Asian economies face
Taiwan’s GDP is a reflection of a sluggish global recovery and the decline of global demand, notably from China Raymond Yeung, economist, ANZ Banking Group
Tiger Asia loses challenge to HK regulator
T
iger Asia Management LLC, which admitted in a U.S. settlement to illegally using inside information to trade Chinese bank stocks, lost a challenge to a Hong Kong regulator’s right to pursue it for the same offence. Chief Justice Geoffrey Ma of Hong Kong’s Court of Final Appeal yesterday dismissed Tiger Asia’s bid after hearing about two hours of arguments and without calling on the city’s Securities and Futures Commission to respond. He said written reasons would be handed down later. The ruling confirms the regulator’s ability to sue parties it suspects of market misconduct independently of a criminal prosecution or a civil inquiry. The New York hedge-fund firm claimed such action by the SFC was an abuse of process and won an initial ruling in June 2011, which was overturned last year by an appeal judge. SFC Enforcement chief Mark Steward said that the decision vindicates the regulator’s position and strategy. The power is a key part of its strategy “in bringing wrongdoers face to face with the real consequences of their misconduct,” he said in a November speech.
Alibaba buys stake in Weibo E-commerce giant acquires 18 pct of China’s Twitter-like
A
libaba Group Holding Ltd agreed to buy a stake of about 18 percent in Sina Corp.’s Weibo for US$586 million, connecting China’s largest Twitterlike service with the nation’s biggest e-commerce company. Alibaba, the Hangzhou-based company founded by billionaire Jack Ma, acquired preferred and ordinary shares and has the option to increase its stake to 30 percent at “a mutually agreed valuation,” according to a statement late on Monday. The companies said they will also work on user-account connectivity, data exchange, and online payment and marketing. Sina, based in Shanghai, has boosted development spending for Weibo, which has more than 500 million users, as clients increasingly post from mobile devices rather than computers. Alibaba, operator of the Taobao and Tmall online marketplaces, is expanding into mobile devices and cloud computing
Alibaba is expanding into mobile devices
to take advantage of the increasing number of shoppers who order from smartphones and tablets. “Sina Weibo’s media platform nature and social characteristics, and Alibaba’s various e-commerce platforms, will help Sina Weibo to form a business model that is way beyond Weibo’s current large
advertisement-oriented business model,” Juan Lin, an analyst at Wedge Partners Corp., wrote in a report. Alibaba’s Mr Ma said last month that the company may use acquisitions to boost growth through apps because it hasn’t been able to keep up with Tencent Holding Ltd’s WeChat messaging service. WeChat had more than 300 million users by January. Mr Ma is focusing on strategy after Alibaba named Jonathan Lu to replace him in May as chief executive, amid speculation the company is preparing for an initial public offering.
‘Natural partners’ Shares of Sina, an Internet company, advanced 9.4 percent to US$55.03 at the close in New York on Monday, for its biggest gain since August 16. The companies said they will work on new business models for social commerce based on the “hundreds of
Alan Linning, a lawyer for Tiger Asia, declined to comment. The hedge-fund firm, which has no employees or physical presence in Hong Kong, agreed to U.S. civil and criminal settlements of more than US$60 million in December for using inside information received through private placements to sell short shares of China Construction Bank Corp. and Bank of China Ltd. The SFC in Hong Kong first accused the firm of the misconduct in 2009. Tiger Asia was seeded by billionaire Julian Robertson and started in 2001. Founder Bill Hwang said in August that the fund would return all outside capital to investors. Mr Robertson seeded a new Asiafocused fund in November, Tiger Pacific Capital LP, headed by former Tiger Asia employees, Run Ye, Junji Takegami and Hoyon Hwang. The SFC’s attempts to pursue wrongdoers are constrained by Hong Kong’s double jeopardy law, which doesn’t allow both criminal and civil proceedings for the same offence. Criminal proceedings are also hampered by the fact many offenders aren’t based in Hong Kong. About 46 percent of cash equity and 25 percent of derivative trading turnover comes from overseas investors, according to the most recent Hong Kong stock exchange data. “The market as a whole, benefits from knowing there is now a mechanism to undo the consequences of false or misleading prospectuses,” Mr Steward said in his November speech. The regulator has a string of other cases of alleged misconduct cases before the court, he added. Bloomberg News
millions” of users on Weibo and on Alibaba’s e-commerce offerings. The agreement is expected to generate about US$380 million in ad and social-commerce revenue for Weibo over the next three years, according to the statement. “E-commerce will play a vital role in building an eco-system around Weibo’s open platform,” Charles Chao, chief executive of Sina, said in the statement. “Weibo and Alibaba’s e-commerce platforms are natural partners.” Alibaba said earlier this month that it’s working with five Chinese handset makers to use its operating system as the nation’s biggest e-commerce company competes with Google Inc. and Tencent for mobile device users. AFP
US$586 million
Alibaba will pay for a stake in Weibo
Celebration of International Labour Day
10
May 1, 2013
Asia OCBC net income falls 16 pct Oversea-Chinese Banking Corp’s profit fell less than analysts estimated last quarter as an increase in fees and commissions outweighed narrowing net interest margins at Southeast Asia’s second-largest lender. Net income declined 16 percent from a year earlier to S$696 million (US$564 million), the Singapore-based bank said yesterday. Fee-generating businesses and profit growth from countries such as Malaysia and Indonesia helped the bank deliver better-than-estimated results. The bank’s net interest margin narrowed, while provisions for bad debts fell.
Indonesia mulls single subsidised-fuel price Government to raise prices after cushioning poor, president says
I
ndonesia may raise fuel prices to the same level across all categories instead of revising them by vehicle type in its bid to curb subsidies, a presidential spokesman said as an announcement on the policy nears. The government is “leaning toward” a single price for subsidised fuel, Julian Aldrin Pasha told reporters yesterday at the presidential palace. An alternative plan would require private car users to pay about 6,500 rupiah (67 U.S. cents) per litre, while the price for motorcycles and public transport vehicles would remain at 4,500 rupiah. President Susilo Bambang Yudhoyono is seeking fuel-subsidy cuts to free up funds for infrastructure and spur growth, after limiting the use of partially government-funded diesel in January. Mr Yudhoyono said yesterday parliament must provide compensation next month to the poor before he increases subsidised fuel prices that are threatening to deepen the fiscal deficit in Southeast Asia’s largest economy. He said any rise in subsidised prices, which have made fuel in
Indonesia cheaper than almost anywhere else in the region, would be “limited and measurable”. “When will subsidised fuel prices be raised? When the poverty funding is ready,” Mr Yudhoyono told a meeting of senior central government and regional officials. “Hopefully everything will be finalised in May.” Since protests derailed plans to raise prices in 2012, officials have explored a variety of options to revamp budget spending in a country where riots spurred by soaring living costs helped oust dictator Suharto in 1998.
When will subsidised fuel prices be raised? When the poverty funding is ready Susilo Bambang Yudhoyono, Indonesia president
‘Ready for it’ “The blanket increase is better in terms of implementation,” said Enrico Tanuwidjaja, a Singaporebased economist at Royal Bank of Scotland Group Plc. “Indonesia’s economy should be able to adjust to it and the central bank may raise its benchmark rate in third quarter.” Indonesians are expecting a single subsidised fuel price and are ready for it, Minister of Energy and Mineral Resources Jero Wacik told reporters in Jakarta yesterday.
Fuel prices may be raised this month
While there is “thought of responding” to this expectation, Mr Yudhoyono still wants to protect motorcycle and public transportation users, Mr Wacik said. The price for subsidised fuel wouldn’t be increased to 6,500 rupiah per litter, he said, adding the government is calculating the appropriate level. The president has said that Indonesia should review its subsidy
bill and use the savings to boost infrastructure, calling for fiscal prudence. Standard & Poor’s said this month that a delay in structural reforms, especially rationalisation of energy subsidies, is a constraint in Indonesia’s credit quality. In his annual budget announced in
S. Korea production falls as yen clouds outlook Central bank warns of high default risks in three sectors
S
outh Korea’s industrial production fell in March as the yen’s decline clouds the outlook for the nation’s exports, severely undershooting expectations and underscoring weak momentum in the trade-dependent economy. Industrial output fell by a seasonally adjusted 2.6 percent in March from the previous month, following a revised 0.9 percent fall in February, Statistics Korea said in a statement yesterday. The revised February reading was also slightly worse than a provisional 0.8 percent fall reported in late March. The median forecast in a Reuters poll of economists was for industrial output to have risen by a seasonally adjusted 0.6 percent in March from a month earlier, with forecasts ranging from a 1.0 percent fall to a 2.3 percent rise. Weakness in the yen, which aids export rivals in Japan, is likely to have a bigger impact on South Korea’s economy from this quarter, Bank of
Korea director general Kim Youngbae said on Monday. “Based on this data, the Bank of Korea may need to revise down its first-quarter growth estimates,” said HI Investment chief economist Park Sang-hyun. “This will add more weight to the case for additional stimulus.” The Bank of Korea estimated last week that Korean economy expanded by a seasonally adjusted 0.9 percent in the January-March period from the fourth quarter of 2012, well above market expectations. But the data released yesterday showed sequential contraction in capital investments in March, which Mr Park said was at odds with the central bank’s estimates for a pickup in such spending for the first quarter. On an annual basis, industrial output fell 3.0 percent in March after a revised 9.4 percent fall in February, the data showed, compared with a median 1.5 percent fall tipped in the Reuters survey.
South Korea’s industrial output closely mirrors its exports, as the country is home to some of the world’s biggest manufacturers of cars, ships and smartphones.
Default risks Th e B a n k o f Ko r e a w a r n e d yesterday that construction, shipping and shipbuilding companies were faced with sharply higher debt default risks than other sectors due to an extended slump in those industries. The central bank said the expected default frequency, which it said is a measure of chances for defaulting on debt, stood at 9.1 percent for construction companies, 8.5 percent for the shippers and 5.9 percent for shipbuilders. “A considerable number of shipbuilding and construction companies saw their operating profits fall sharply during 2012 or turn into losses, and [some of the] shipping
Shipbuilding companies facing higher debt default ris
firms posted losses for a second consecutive year,” it said in a report. These compare with the expected debt default frequency rates of between 1.2 percent and 3.2 percent for the other sectors included in the analysis, it said in the scheduled
11
May 1, 2013
Asia ANZ profit up on lower costs Australia & New Zealand Banking Group Ltd said first-half cash profit climbed 10 percent as costs dropped. Cash earnings, which exclude one-time items, jumped to A$3.18 billion (US$3.29 billion) in the six months ended March 31, according to a stock exchange filing. The Melbourne-based lender boosted its interim dividend to 73 Australian cents a share. ANZ Bank, the most Asia-focused of Australia’s four largest banks, said today it’s making “good progress” toward a target to get as much as 30 percent of its profit from the region by 2017.
Japan manufacturing slightly up in March Production misses estimates amid weakness in global demand
J
August, the president allocated 274.7 trillion rupiah for energy subsidies, compared with 184.4 trillion rupiah for capital spending. The country spent 211.9 trillion rupiah on fuel subsidies in 2012. The finance minister earlier this month warned that the rising subsidy bill, could push the budget deficit
well above the original forecast to as much as 2.4 percent of GDP. The president said the budget deficit could rise to 3.83 percent of GDP if no steps are taken to contain the growing fuel subsidy bill, estimated this year to be around 300 trillion rupiah. Reuters/Bloomberg News
All but seven workers left industrial complex
sks
report on the health of the local financial system. An official at the central bank said a company measured for an expected default frequency rate of 35 percent would most likely default on debt. Reuters
North Korea refused to allow seven South Koreans to leave the shuttered industrial park until a dispute involving unpaid wages and bills is settled, prolonging the dispute over the jointly-run project. Of the 50 managers remaining at the Gaeseong zone, 43 crossed the border overnight, South Korea’s Unification Ministry said. The seven will be able to depart once unpaid wages, corporate taxes and phone bills for the month of March are settled, according to a ministry official who declined to be named, citing government policy. The South was not able to pay after the North rejected an April 10 request for a cash truck to enter Gaeseong, the official said. The seven officials will need at least two more days to check the balance sheets of all 123 South Korean companies with North Korean claims, the official said. South Korean companies on average pay up to US$8 million per year to nearly 54,000 labourers, the official said, declining to disclose how much the North is demanding.
apanese manufacturing activity expanded in April at the fastest pace in just over a year in an encouraging sign that stabilising overseas demand and a weaker yen are helping the economy. The Markit Economics/JMMA Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 51.1 in April from 50.4 in March. The index remained above the 50 threshold that separates expansion from contraction for the second consecutive month and showed that activity grew at the fastest pace since March 2012. “This would represent a solid growth performance, maintaining the trend that was observed in the first quarter of the year and latest anecdotal evidence suggests a weaker yen is playing a part in the expansion by raising export volumes,” said Paul Smith, senior economist at Markit. The index for new export orders fell to 52.2 in April from 53.9 in the previous month. The output component of the PMI index rose to 52.1 in April from 51.3 in the previous month to also show the fastest expansion since March last year. The Japanese government’s policy mix of bold fiscal and monetary expansion pursued by Prime Minister Shinzo Abe has so far driven the yen to a four-year low against the dollar and sparked a 50 percent rally in Japanese share prices from November.
Singapore wage costs may quicken
S
ingapore’s wages will grow at a faster pace in 2013, contributing to higher labour costs and price pressures even as the economy expands at a “modest” pace, the central bank said yesterday. The island’s job market will remain “tight” this year as demand for workers outpaces supply amid the continued tightening in foreign labour, the Monetary Authority of Singapore said in a twice-yearly review. A Manpower Ministry report yesterday showed job creation in the three months through March 31 was the weakest in 10 quarters, and the unemployment rate rose from a five-year low. Singapore tightened curbs on overseas workers for a fourth straight year in February and unveiled measures that will raise wage costs for companies through 2015, as
But the industrial output was less than analysts forecast in March as weakness in global demand limits recoveries in Asian economies. Production climbed 0.2 percent from the previous month, the trade ministry said in Tokyo yesterday. The data add to signs of a cooling global economy after U.S. gross domestic product rose less than forecast and China reported an unexpected slowdown in the first quarter. A slide in the yen boosts the outlook for Japanese exporters, while adding to challenges for rivals in other Asian nations. “Manufacturers face a lot of uncertainty,” Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, formerly of Goldman Sachs Group Inc., said before the Japanese report. “The yen’s depreciation is clearly helping the profits of manufacturers but it is still unclear whether export volumes will pick up.” Reuters/Bloomberg News
the government steps up efforts to increase productivity. The central bank, which uses its exchange rate to manage inflation, stuck to a policy of allowing gradual gains in its currency even after the economy unexpectedly contracted last quarter. “Overall employment growth will moderate, as supply constraints in both the foreign and local labour forces become more binding,” the central bank said. “With more firms turning to locals to fill job vacancies, resident wages will rise at a slightly faster pace across all sectors. As a result, unit labour costs will continue to increase, despite some improvement in productivity.” Overall wage growth could average 3 percent in 2013, compared with 2.3 percent in 2012, the central bank said. The economy added 20,800 jobs last quarter, compared with 44,000 in the previous three months, the Ministry of Manpower said yesterday. The seasonally adjusted jobless rate rose to 1.9 percent from 1.8 percent, it said. Bloomberg News
12
May 1, 2013
Markets Hang Seng Index NAME
PRICE
DAY %
VOLUME
34.45
0.8784773
32691769
CHINA UNICOM HON
ALUMINUM CORP-H
2.93
1.736111
11029536
BANK OF CHINA-H
3.63
1.114206
356119091
BANK OF COMMUN-H
6.17
1.147541
33392192
BANK EAST ASIA
31.9
1.916933
2636347
12.66
-0.3149606
26.7
AIA GROUP LTD
BELLE INTERNATIO BOC HONG KONG HO
NAME
PRICE
DAY %
VOLUME
11.14
0.9057971
20409647
CITIC PACIFIC
9.39
0.5353319
CLP HLDGS LTD
68.4
0.2932551
NAME
PRICE
DAY %
POWER ASSETS HOL
75.8
0.9320905
2745325
8144569
SANDS CHINA LTD
40.7
-3.782506
15663360
2840606
SINO LAND CO
12.76
0
6891052
SUN HUNG KAI PRO
112.2
-0.3552398
4415833
SWIRE PACIFIC-A
98.65
0
1366811
TENCENT HOLDINGS
266.2
1.603053
4940443
21.45
0.9411765
6506372
12.3
0.4901961
8761589
69.25
-1.071429
6096652
CNOOC LTD
14.48
0.9762901
66687176
COSCO PAC LTD
10.28
1.581028
6363754
16862784
ESPRIT HLDGS
10.88
3.422053
19785151
0.3759398
14848473
HANG LUNG PROPER
30.2
-1.145663
5742224
TINGYI HLDG CO
129.8
0.6982157
1512002
WANT WANT CHINA
56.2
0.9883199
3654541
WHARF HLDG
CATHAY PAC AIR
13.64
2.248876
5707342
HANG SENG BK
CHEUNG KONG
116.8
0.2575107
2841201
HENDERSON LAND D
CHINA COAL ENE-H
5.97
1.015228
47416516
CHINA CONST BA-H
6.5
0.7751938
251808033
CHINA LIFE INS-H
21.2
1.193317
38035932
CHINA MERCHANT
24.55
1.028807
2896119
CHINA MOBILE
HENGAN INTL
80.2
3.084833
3033886
HONG KG CHINA GS
23.35
0
11451038
HONG KONG EXCHNG
130.6
1.005414
2637114
84.5
0.5353956
12370070
HSBC HLDGS PLC
84.95
0.9506833
15563362
HUTCHISON WHAMPO
84.3
0.7770472
5605834
CHINA OVERSEAS
23.7
0.6369427
13286925
IND & COMM BK-H
5.46
0.7380074
263219558
CHINA PETROLEU-H
8.49
1.071429
78686338
LI & FUNG LTD
10.04
-0.7905138
18629432
CHINA RES ENTERP
26.6
1.720841
3332245
32
0.9463722
2204540
CHINA RES LAND
23.5
0
5390479
NEW WORLD DEV
13.54
0.8941878
13732085
CHINA RES POWER
25.4
0
6068789
PETROCHINA CO-H
9.87
0.4069176
55776963
CHINA SHENHUA-H
27.45
2.234637
20268046
PING AN INSURA-H
61.45
2.587646
17661647
MTR CORP
MOVERS
38
7
VOLUME
5 22800
INDEX 22737.01 HIGH
22799.68
LOW
22515.36
52W (H) 23944.74 22510
(L) 18056.4 26-April
30-April
Hang Seng China Enterprise Index NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.71
1.923077
104265581
AIR CHINA LTD-H
6.28
0.8025682
8636525
ALUMINUM CORP-H
2.93
1.736111
ANHUI CONCH-H
28.1
BANK OF CHINA-H
3.63
BANK OF COMMUN-H BYD CO LTD-H
NAME
PRICE
DAY %
VOLUME
CHINA PACIFIC-H
27.9
0.5405405
6463344
CHINA PETROLEU-H
8.49
1.071429
11029536
CHINA RAIL CN-H
7.83
1.079137
6614537
CHINA RAIL GR-H
1.114206
356119091
CHINA SHENHUA-H
6.17
1.147541
33392192
CHINA TELECOM-H
27.7
-0.5385996
3425876
DONGFENG MOTOR-H
CHINA CITIC BK-H
4.37
2.102804
53125184
GUANGZHOU AUTO-H
6.4
2.073365
6344865
CHINA COAL ENE-H
5.97
1.015228
47416516
HUANENG POWER-H
8.97
1.127396
10300669
CHINA COM CONS-H
7.43
2.624309
25230631
IND & COMM BK-H
5.46
0.7380074
263219558
CHINA CONST BA-H
6.5
0.7751938
251808033
JIANGXI COPPER-H
15.04
0.8042895
11202394
CHINA COSCO HO-H
3.28
0.3058104
6759317
PETROCHINA CO-H
9.87
0.4069176
55776963
CHINA LIFE INS-H
21.2
1.193317
38035932
PICC PROPERTY &
9.96
2.363823
17177273
CHINA LONGYUAN-H
7.11
-1.25
12013626
PING AN INSURA-H
61.45
2.587646
17661647
CHINA MERCH BK-H
16.54
2.351485
21450208
SHANDONG WEIG-H
7.45
0.269179
6082980
CHINA MINSHENG-H
9.97
1.838611
30060022
SINOPHARM-H
23.05
0.6550218
3273503
CHINA NATL BDG-H
9.16
-1.611171
57226048
TSINGTAO BREW-H
52.05
-1.699717
1296837
CHINA OILFIELD-H
15.3
0.5256242
4405817
WEICHAI POWER-H
27.05
1.691729
3727700
NAME
PRICE
DAY %
VOLUME
YANZHOU COAL-H
8.08
0.1239157
17850041
78686338
ZIJIN MINING-H
2.29
1.327434
29322348
3.298153
13437001
ZOOMLION HEAVY-H
7.77
1.436031
13018000
4.09
5.412371
37351272
ZTE CORP-H
13.08
1.710731
5339875
27.45
2.234637
20268046
3.96
2.325581
44468659
11.56
0.5217391
10776386
MOVERS
37
3
0 10950
INDEX 10917.97 HIGH
10932.07
LOW
10722.14
52W (H) 12354.22 10700
(L) 8987.76 26-April
30-April
Shanghai Shenzhen CSI 300 NAME
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.69
-0.7380074
98526496
AIR CHINA LTD-A
5.23
-1.506591
5166291
CITIC SECURITI-A
CHONGQING WATE-A
PRICE
DAY %
VOLUME
PRICE
DAY %
6.2
-2.053712
6571968
QINGHAI SALT-A
24.35
-0.7742461
3860060
12.42
-0.7194245
66198652
SAIC MOTOR-A
14.9
0.1344086
20767841
NAME
VOLUME
3.98
-1.240695
15985511
CSR CORP LTD -A
3.98
-0.9950249
16381021
SANY HEAVY INDUS
9.76
-1.810865
19382466
ANHUI CONCH-A
17.61
-0.05675369
17964870
DAQIN RAILWAY -A
7.05
-2.354571
32120187
SHANDONG GOLD-MI
32.13
0
4503942
BANK OF BEIJIN-A
8.79
2.090592
43843654
DATANG INTL PO-A
4.35
1.162791
6565666
SHANG PHARM -A
11.99
-1.316872
6520537
BANK OF CHINA-A
2.87
-1.034483
34709644
EVERBRIG SEC -A
13.4
-2.75762
16616151
SHANG PUDONG-A
9.88
-0.3027245
52806428
ALUMINUM CORP-A
BANK OF COMMUN-A BANK OF NINGBO-A
4.63
-0.4301075
41941465
GD MIDEA HOLDI-A
13.96
2.271062
22844017
SHANGHAI ELECT-A
3.73
-1.842105
3581817
10.18
-0.1960784
11593667
GD POWER DEVEL-A
2.81
0.3571429
51309572
SHANXI LU'AN -A
15.96
-0.7462687
11209252
4.8
0.2087683
37907083
GEMDALE CORP-A
6.99
1.451379
41422129
SHANXI XISHAN-A
10.53
-0.7540057
7912841
BEIJING TONGRE-A
22.44
-1.578947
9744682
GF SECURITIES-A
13.15
-0.9789157
14805509
SHENZEN OVERSE-A
5.76
0.173913
30445184
BYD CO LTD -A
24.55
3.064652
7882916
GREE ELECTRIC
26
-0.3831418
11212283
SICHUAN KELUN-A
61.6
-2.56248
674648
21.8
-3.539823
3057671
GUANGHUI ENERG-A
18.38
-2.441614
18997699
SUNING COMMERC-A
5.88
-1.010101
32095456 4097690
BAOSHAN IRON & S
CHINA AVIC AVI-A CHINA CITIC BK-A
4.27
-0.6976744
20002122
HAINAN AIRLINE-A
4.71
-5.040323
43069901
TASLY PHARMAC-A
74.51
2.942802
CHINA CNR CORP-A
4.03
-0.2475248
13007525
HAITONG SECURI-A
10.71
0.4690432
88582416
TSINGTAO BREW-A
37.78
-0.07934409
2264961
CHINA COAL ENE-A
6.81
-1.161103
4342980
HANGZHOU HIKVI-A
36.22
-1.789588
5865052
WEICHAI POWER-A
21.96
-4.852686
9699258 13457108
CHINA CONST BA-A
4.65
-0.6410256
22742004
HENAN SHUAN-A
78.58
-1.775
1822880
WULIANGYE YIBIN
21.95
-0.2272727
CHINA COSCO HO-A
3.37
-2.034884
10597179
HONG YUAN SEC-A
21.45
-0.6484484
33896820
YANGQUAN COAL -A
12.59
-1.94704
6101510
CHINA EAST AIR-A
3.06
-1.923077
7822324
HUATAI SECURIT-A
9.64
-0.8230453
22112830
YANTAI WANHUA-A
18.59
-1.640212
10502752
CHINA EVERBRIG-A
3
0
55031877
HUAXIA BANK CO
10.47
2.747792
50156004
YANZHOU COAL-A
15.17
-2.943058
5920172
4.05
-0.7352941
48236100
YUNNAN BAIYAO-A
85.2
-1.010805
1077459
CHINA LIFE INS-A
16.76
0
15846304
IND & COMM BK-A
CHINA MERCH BK-A
12.15
-0.5728314
33018250
INDUSTRIAL BAN-A
18.16
-0.3839824
71264377
ZHONGJIN GOLD
12.59
1.450443
22206329
CHINA MERCHANT-A
12.13
-0.8986928
22898539
INNER MONG BAO-A
27.59
0.3637686
18292792
ZIJIN MINING-A
3.13
0.3205128
35605034
CHINA MERCHANT-A
25.42
1.194268
8856678
INNER MONG YIL-A
29.24
-3.973727
12315564
ZOOMLION HEAVY-A
7.57
-1.943005
23257399
CHINA MINSHENG-A
9.82
-1.107754
95530352
INNER MONGOLIA-A
4.71
-0.8421053
23635522
ZTE CORP-A
11.34
-1.9879
15877196
CHINA NATIONAL-A
9.02
-4.952582
48291907
JIANGSU HENGRU-A
30.48
1.464714
5679411
CHINA OILFIELD-A
15.53
-0.7667732
2799720
CHINA PACIFIC-A
18.76
-1.315097
19668526
6.73
-0.7374631
18534969
CHINA PETROLEU-A
JIANGSU YANGHE-A
58.38
-5.533981
7205043
JIANGXI COPPER-A
20.84
-0.5725191
11617515
JINDUICHENG -A
10.32
-2.457467
5964602
17.38
-0.855676
21824148
173.99
-1.533673
1630764
CHINA RAILWAY-A
5.14
0.390625
14650663
KANGMEI PHARMA-A
CHINA RAILWAY-A
2.79
-0.3571429
16720948
KWEICHOW MOUTA-A
CHINA SHENHUA-A
20.49
-0.9666506
9284215
LUZHOU LAOJIAO-A
24.43
-1.093117
5857758
CHINA SHIPBUIL-A
4.19
-4.772727
57783237
METALLURGICAL-A
2.04
0.4926108
14175798
CHINA SOUTHERN-A
3.45
-1.988636
15793098
NINGBO PORT CO-A
2.46
0.4081633
9104940
8.48
-0.4694836
14074849
18.7
-0.6903877
33673898
CHINA STATE -A
3.44
-0.5780347
48979379
PETROCHINA CO-A
CHINA UNITED-A
3.57
-1.923077
117328713
PING AN BANK-A
CHINA VANKE CO-A
11.03
0.4553734
48444343
PING AN INSURA-A
39.81
-0.8221226
18863711
CHINA YANGTZE-A
7.13
-0.140056
16584791
POLY REAL ESTA-A
11.63
0.4317789
28203451
10.51
-0.9425071
37170943
QINGDAO HAIER-A
12.82
-0.927357
6614424
PRICE DAY %
Volume
NAME
PRICE DAY %
Volume
CHONGQING CHAN-A
MOVERS
50
243
7 2510
INDEX 2447.306 HIGH
2505.24
LOW
2447.08
52W (H) 2791.303 (L) 2102.135
2440
24-April
26-April
FTSE Taiwan 50 Index NAME ACER INC
23.85
0
9937777
ADVANCED SEMICON
25.45
0.1968504
22536338
ASIA CEMENT CORP
37.45
0.2677376
4934655
FUBON FINANCIAL
NAME
PRICE DAY %
FORMOSA PLASTIC
71.6
0.8450704
8513190
TAIWAN MOBILE CO
FOXCONN TECHNOLO
77.9
1.037613
3698860
TPK HOLDING CO L
42.15
0.5966587
15565793
TSMC UNI-PRESIDENT
ASUSTEK COMPUTER
343.5
3.61991
5262576
HON HAI PRECISIO
76.2
0.9271523
51469726
AU OPTRONICS COR
13.55 -0.7326007
149453460
HOTAI MOTOR CO
263.5
1.346154
391435
CATCHER TECH
149.5
2.39726
14332272
HTC CORP
301
3.793103
36419141
CATHAY FINANCIAL
39.7
2.056555
36858934
HUA NAN FINANCIA
17.15
0.5865103
6449729
YUANTA FINANCIAL
CHANG HWA BANK
16.85
0.297619
9423573
LARGAN PRECISION
806
2.414231
3644488
YULON MOTOR CO
CHENG SHIN RUBBE
99.9
2.147239
9517558
LITE-ON TECHNOLO
53.1
0.9505703
4498460
CHIMEI INNOLUX C
18.45
2.216066
97578922
MEDIATEK INC
8.16
0
46675484
MEGA FINANCIAL H
22.75
0.2202643
30900696
26 -0.5736138
22077992
NAN YA PLASTICS
58.8
-1.672241
14453227
50604561
PRESIDENT CHAIN
182
0
1308337
CHINA DEVELOPMEN CHINA STEEL CORP
0.5617978
360 -0.4149378
17.9
CHUNGHWA TELECOM
93.8 -0.7407407
8530911
QUANTA COMPUTER
61
0.8264463
9305621
COMPAL ELECTRON
19.1
1.32626
26061438
SILICONWARE PREC
35
-1.269394
29875153
14.75 -0.3378378
24618514
DELTA ELECT INC
141.5
0
4986711
SINOPAC FINANCIA
FAR EASTERN NEW
31.75 -0.1572327
8046030
SYNNEX TECH INTL
49.9
1.525941
4940267
FAR EASTONE TELE
71.9 -0.6906077
5487017
TAIWAN CEMENT
39.2
1.29199
4661788
16.95
0.5934718
6577412
70.6
0.5698006
1876320
30
2.564103
2779058
1.114206
12967279
FORMOSA CHEM & F
18.15
69.1 -0.1445087
7612032
TAIWAN FERTILIZE
FORMOSA PETROCHE
80.3
2301112
TAIWAN GLASS IND
2.033037
TAIWAN COOPERATI
0.9389671
599
1.870748
3688548 5185126
109.5
1.388889
34467725
58.1
0.1724138
10368995
UNITED MICROELEC
11.25
1.351351
42405288
WISTRON CORP
29.95
1.011804
12488267
15
2.739726
21300536
50.6 -0.7843137
2755412
5468774
CHINATRUST FINAN
FIRST FINANCIAL
Volume
107.5
MOVERS
35
11
4 5670
INDEX 5643.19 HIGH
5665.11
LOW
5585.73
52W (H) 5666.26 5570
(L) 4719.96 26-April
30-April
13
May 1, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange)
Max 34.9
average 34.495
Min 34.2
35.0
63.2
34.8
62.9
34.6
62.6
34.4
62.3
34.2
Last 34.75
18.3
18.2
Max 63.15
average 62.404
Min 62.15
62.0
Last 62.2
18.1
Max 18.3
average 18.139
Min 18.04
Last 18.3
19.8
42.5
23.6
19.7
41.9
18.0
23.4
19.6 41.3
Max 42.5
average 41.106
Min 40.7
40.7
Last 40.7
Max 19.78
average 19.567
Commodities
METALS
PRICE
DAY %
YTD %
(H) 52W
94.49
-0.010582011
1.069633116
105.6800003
BRENT CRUDE FUTR Jun13
103.61
-0.192659667
-4.011487864
116.6699982
90.91999817
GASOLINE RBOB FUT May13
282.56
-0.067197171
-2.363510712
330.369997
237.7199888
GAS OIL FUT (ICE) Jun13
858.5
-0.348229832
-5.86622807
992.75
799.25
NATURAL GAS FUTR Jun13
4.384
-0.182149362
24.97149373
4.457000256
3.203999996
HEATING OIL FUTR May13
289.55
-0.179267073
-4.24300549
327.1399975
258.5000038
Gold Spot $/Oz
1471.33
-0.0408
-11.6032
1796.08
1322.06
Silver Spot $/Oz
24.3647
0.3241
-19.081
35.365
22.0713
Platinum Spot $/Oz
1513.15
0.5415
-0.3031
1742.8
1374.55
Palladium Spot $/Oz
700.53
1.8982
0.1243
786.5
553.75
1899
1.118210863
-8.393632417
2200.199951
1818
7153.5
1.756756757
-9.803303493
8496.75
6762.25
1907
0.527148129
-8.317307692
2230
1745
15500
1.940151266
-9.144196952
18920
15075 14.79500103
LME ALUMINUM 3MO ($) LME COPPER 3MO ($) 3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul13
81.34999847
14.98
0.402144772
-4.858685297
17.07500076
666.25
0.985221675
-4.446038006
824
527
718
0.209351012
-9.543307087
900
664.75
SOYBEAN FUTURE Jul13
1419.75
0.780834073
1.755957714
1605.75
1217.75
COFFEE 'C' FUTURE Jul13
134.15
0.299065421
-10.29755934
202.1999969
132.6999969
CORN FUTURE
Last 19.56
(L) 52W
WTI CRUDE FUTURE Jun13
LME ZINC
Min 19.44
Jul13
WHEAT FUTURE(CBT) Jul13
SUGAR #11 (WORLD) Jul13
17.55
COTTON NO.2 FUTR Jul13
85.9
0.573065903 0.186610683
-11.09422492 11.7471055
23.05999947 94.19999695
17.25 69.94999695
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
Max 23.55
average 23.343
Min 23.1
Last 23.55
World Stock Markets - Indices
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
1.0347 1.5487 0.9377 1.3063 97.72 7.9935 7.761 6.1658 53.9425 29.34 1.2343 29.54 41.19 9732 101.112 1.22513 0.84355 8.0645 10.4428 127.66 1.03
0.0967 -0.2191 0.1813 -0.1376 0.174 0.0263 0.0077 -0.013 0.5608 -0.1704 -0.0162 -0.0779 -0.1214 -0.1028 0.0762 0.3036 -0.0889 0.0707 0.1647 0.3133 0.0194
-0.2987 -4.2594 -2.3782 -0.9629 -11.8911 -0.1289 -0.134 1.051 1.9512 4.2263 -1.0451 -1.7163 -0.4491 0.6268 -11.6554 -1.4407 -3.3347 1.8972 0.8389 -11.0371 -0.0097
1.0625 1.6381 0.9972 1.3711 99.95 8.0111 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 105.433 1.25692 0.88151 8.4957 10.9254 131.12 1.032
0.9582 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1585 51.3863 28.56 1.2152 28.913 40.54 9181 74.482 1.20054 0.77553 7.7018 9.6245 94.12 1.029
NAME
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
ARISTOCRAT LEISU
3.94
3.684211
25.07936
3.975
2.29
VOLUME CRNCY 3003551
CROWN LTD
12.9
-0.07745933
20.89972
13.02
8.06
1934907
AMAX HOLDINGS LT
0.84
2.439024
-40
1.9
0.75
199250
BOC HONG KONG HO
26.7
0.3759398
10.78838
27.1
20.85
14848473
0.315
0
18.86793
0.42
0.215
0
6.08
-1.458671
1.502508
6.74
2.8
9000
CHINA OVERSEAS
23.7
0.6369427
2.597401
25.6
14.624
13286925
CHINESE ESTATES
13.66
0.5891016
12.61876
13.8
7.697
2415000
CHOW TAI FOOK JE
10.44
-0.1912046
-16.07717
13.4
8.4
3252193
EMPEROR ENTERTAI
2.36
0
24.86773
2.49
1.1
985000
FUTURE BRIGHT
2.52
-1.5625
106.5574
2.75
0.77
5992000
CHEUK NANG HLDGS
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
14818.75
0.7218327
13.08449
14887.51
12035.08984
NASDAQ COMPOSITE INDEX
US
3307.02
0.8464402
9.521611
3315.335
2726.68
GALAXY ENTERTAIN
34.75
-0.5722461
14.49753
35.7
16.94
17266029
FTSE 100 INDEX
GB
6460.23
0.03422102
9.53608
6533.99
5229.76
HANG SENG BK
129.8
0.6982157
9.351309
131.5
99.2
1512002
DAX INDEX
GE
7922.07
0.6168794
4.0681
8074.47
5914.43
HOPEWELL HLDGS
30
0.1669449
-9.774436
35.3
19.049
1940229
HSBC HLDGS PLC
84.5
0.5353956
3.936035
88.45
59.8
12370070
HUTCHISON TELE H
4280354
NIKKEI 225
JN
13860.86
-0.1676014
33.3393
13983.87
8238.96
HANG SENG INDEX
HK
22737.01
0.6919162
0.3534895
23944.74
18056.4
CSI 300 INDEX
CH
2447.306
-0.8334701
-2.998313
2791.303
2102.135
4.14
4.282116
16.29214
4.17
2.98
LUK FOOK HLDGS I
22
-1.123596
-9.836064
30.05
14.7
3630000
MELCO INTL DEVEL
15.1
-2.202073
67.59156
15.58
5.12
6556196 7121600
TAIWAN TAIEX INDEX
TA
8093.66
0.7960407
5.119296
8115.589844
6857.35
MGM CHINA HOLDIN
18.3
0.5494505
37.81906
18.449
9.509
KOSPI INDEX
SK
1963.95
1.198021
-1.65745
2042.48
1758.99
MIDLAND HOLDINGS
3.58
2.873563
-3.243244
5
3.249
2305168
S&P/ASX 200 INDEX
AU
5191.219
1.276151
11.66433
5195.1
3985
NEPTUNE GROUP
0.163
-2.97619
7.236846
0.226
0.084
39245000
ID
5003.411
0.07318363
15.90859
5026.919
3635.283
NEW WORLD DEV
13.54
0.8941878
12.64559
15.12
7.95
13732085
FTSE Bursa Malaysia KLCI
MA
1715.54
0.4432162
1.574356
1718.44
1526.6
SANDS CHINA LTD
40.7
-3.782506
19.88218
43.7
20.65
15663360
SHUN HO RESOURCE
1.51
0
7.857145
1.67
1.03
0
NZX ALL INDEX
NZ
982.675
0.6296811
11.40771
983.181
755.149
SHUN TAK HOLDING
4.08
-1.210654
-2.6253
4.65
2.56
2062727
PHILIPPINES ALL SHARE IX
PH
4409.73
0.4064319
19.21476
4422.22
3238.77
SJM HOLDINGS LTD
19.56
-0.2040816
8.666667
22.15
12.34
9385395
SMARTONE TELECOM
13.82
2.827381
-1.84659
17.38
12.5
3155132
WYNN MACAU LTD
23.55
0.856531
12.4105
25.5
14.62
8487789
ASIA ENTERTAINME
4.29
-3.378378
40.19608
5.83
2.4
203241
41.74
447243
JAKARTA COMPOSITE INDEX
23.0
Macau Related Stocks
CENTURY LEGEND
NAME
19.4
Currency Exchange Rates
NAME ENERGY
23.2
19.5
HSBC Dragon 300 Index Singapor
SI
655.61
0.57
5.56
NA
NA
STOCK EXCH OF THAI INDEX
TH
1589.14
0.2656269
14.16809
1601.34
1099.15
HO CHI MINH STOCK INDEX
VN
474.51
-0.4364338
14.69074
518.46
372.39
BALLY TECHNOLOGI
53.93
-1.335529
20.62179
54.92
Laos Composite Index
LO
1370.36
2.200081
12.80818
1455.82
980.83
BOC HONG KONG HO
3.48
1.457726
13.35505
3.59
2.7
8474
GALAXY ENTERTAIN
4.53
2.721088
14.10579
4.93
2.25
34056
INTL GAME TECH
16.95
-0.05896226
19.61891
17.53
10.92
4865776
JONES LANG LASAL
97.78
1.326425
16.48796
100.91
61.39
295725
LAS VEGAS SANDS
55.67
-0.8901549
20.60225
57.11
32.6127
6557457
MELCO CROWN-ADR
24.2
-0.2884219
43.70546
24.56
9.13
3804699
MGM CHINA HOLDIN
2.1
0
13.51351
2.44
1.36
10000
MGM RESORTS INTE
13.74
1.627219
18.04123
13.79
8.83
11317555
SHFL ENTERTAINME
15.54
0.4524887
7.172414
18.23
11.75
162010
SJM HOLDINGS LTD
2.57
0
11.25541
2.85
1.65
1250
WYNN RESORTS LTD
135.8
0.2214022
20.72184
136.51
84.4902
1214832
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
AUD HKD
USD
14
May 1, 2013
Opinion
Germany should end austerity, not Ireland Megan Greene
Bloomberg View columnist and chief economist at Maverick Intelligence
A
nti-austerity fever is sweeping Europe as policy makers decide the way to get from crisis to growth involves higher spending. Well, not so fast. The fever has already spread to the highest levels. At the International Monetary Fund’s recent spring meetings in Washington, IMF Managing Director Christine Lagarde and her deputy, David Lipton, repeatedly urged euro area countries to focus on investment rather than budget cuts. Then came the European Commission president, José Manuel Barroso, who said that austerity has reached the limits of political and social support. A day later, Italy’s prime minister designate, Enrico Letta, wasted no time declaring that “Europe’s policy of austerity is no longer sufficient”. The argument is compelling: Less retrenchment will allow more money to feed into the economy, which should support domestic investment and consumption, and so stimulate growth. That in turn should reduce budget deficits by increasing tax revenue, creating a virtuous circle. Yet easing austerity involves trade-offs that might not be worth making for the weaker euro area economies. Paradoxically, it is healthier euro area countries such as Germany, which aren’t
considering a relaxation of austerity, that should do it.
Irish pitfalls Ireland, held up as Europe’s poster child for austerity, is a good example of the pitfalls of loosening deficit targets for a country in fiscal crisis. The government has passed half a dozen austerity bills over the past four years, and in many ways the policy is working. Last week the European Commission said Ireland’s budget deficit was 7.6 percent of gross domestic product, below its 8.6 percent of GDP target. Bond markets seem to have regained confidence in Ireland’s creditworthiness, with 10year government bond yields hovering around an affordable 3.6 percent. Austerity measures have gone smoothly thanks in part to an acquiescent population. In Dublin, which during the boom had an oxygen bar where one could go to breathe different flavours of oxygen, people recognised they had partied too hard and would have to tighten their belts. But even the Irish are starting to push back against austerity. Labour unions recently rejected a motion called Croke Park 2, which the government proposed to further cut the public-sector
wages. Some government ministers have begun to say Ireland should ease up on spending cuts and use the savings from February’s restructuring of promissory notes to plug budget gaps. Loosening austerity to stimulate growth is a classic Keynesian approach and makes a lot of sense – unless you are dealing with a country that has unsustainable public finances, such as Ireland. Ireland’s budget deficit remains the third highest in the European Union, behind only Spain (10.6 percent of GDP) and Greece (10 percent of GDP). Ireland’s public debt burden rose to 118 percent of GDP in 2012, behind only Greece (157 percent), Italy (127 percent) and Portugal (124 percent).
Looser targets High government deficit and debt burdens aren’t inherently bad, and the relationship between these and growth was recently thrown open for debate when a seminal academic study by Carmen Reinhart and Kenneth Rogoff was challenged. What we do know, however, is that high deficit and debt levels can only be sustained over the medium- to long-term as long as a country’s growth model works. Unfortunately, few
countries in the developed world now meet that condition, and Ireland isn’t among them. Its economy slipped back into a technical recession – defined as two consecutive quarters of contraction – in the second half of last year. Looser deficit targets won’t fix the cause of this weakness. Many of Ireland’s nominal exports don’t add value to the economy: They are profits booked by multinational companies that have their headquarters on the island to take advantage of its low corporate tax rates, location and language. Production happens elsewhere. Some of Ireland’s more successful and productive export industries, such as pharmaceuticals and chemicals, have slowed considerably over the past six months, in part because two of their main export markets – the euro area and the U.K. – are stagnating at best. Relaxed austerity in Ireland can’t do anything to reverse this. Domestic demand is an even bigger worry. Unemployment remains stubbornly high, at 14 percent in March, and just less than half of those looking for work are long-term unemployed. Bad mortgages have left many families with negative equity, further dragging down private consumption. Non-performing loans are also undermining bank lending and investment. A new personal bankruptcy law and targets established by the Central Bank of Ireland (BKIR) will force banks to address bad property loans in a sustainable way. Worryingly, the central bank said recently that about half of all loans to small and medium enterprises are also non-performing. The news for Ireland isn’t all bad. It won important concessions on repaying its international creditors in February, and never have its
chances of exiting its bailout programme on time looked so good. Yet exiting a bailout programme is a marker, not a goal. The big question is whether Ireland can go on borrowing at affordable rates over the medium- to long-term, and not get locked out of the bond market again. Given Ireland’s fiscal trajectory, the answer to that question is probably no. If the country wants to return to debt sustainability, it will not only need to hold the course on fiscal consolidation now but also need to do so for several years to come.
Shut out And therein lies Ireland’s problem. Easing austerity is unlikely to result in the extra growth that might increase tax revenue and bring down deficits the easy way. Without either austerity or growth, Ireland’s fiscal position will get worse, shutting it out of bond markets again and forcing it back into a bailout programme. None of this applies to countries that have healthy national balance sheets and are less likely to come under threat from the bond markets. If Germany and other core euro-area economies were to shift from cutting spending to providing a stimulus, then imports from Europe’s weaker economies would grow and those countries wouldn’t be forced to do all of the adjusting. Their recessions would be shallower as a result. Regrettably, there is little sign that there is the political will for this in Germany. The risk is that by the time the euro area’s stronger economies do support a more symmetrical adjustment, they may themselves be too fiscally burdened to help. Bloomberg View
If Germany was to shift from cutting spending to providing a stimulus, then imports from Europe’s weaker economies would grow
editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
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May 1, 2013
Opinion Business
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Leading reports from Asia’s best business newspapers
Bangkok Post The Finance Ministry is set to impose fiscal measures to curb the baht’s rise if the Bank of Thailand decides not to cut the policy rate, Somchai Sujjapongse, director-general of the Fiscal Policy Office, said. “If we cannot use interest rates as a tool, we need to find other measures to slow capital inflows,” he said. The baht reached a 16-year high against the U.S. dollar a few weeks ago, as a flood of capital inflows followed the Bank of Japan’s aggressive asset-buying scheme aimed at beating deflation. Mr Somchai said the ministry is awaiting the central bank’s ideas for reining the baht.
Korea Herald SouthKoreaandChinahaveagreed on basic guidelines concerning productoriginmarkingandcustoms clearance in their latest round of freetradeagreementnegotiations that ended on Sunday, Seoul officials said on Monday. The two sides, however, have differed over the classification of sensitive items, which require an alleviated level of tariff cuts. The two will hold additional talks in the future, to decide which items are to be classified as “sensitive items,” officials said. While Seoul says agriculture and fisheries are sensitive sectors, China, on the other hand, considers the automobile, machine and oil industries as its most sensitive sectors.
Jakarta Post Indonesia received US$7.2 billion from around 6.5 million migrant workers overseas in 2012, the World Bank said in a recent report. The figure was equal to about 1 percent of the nation’s gross domestic product, making Indonesia the third-largest recipient of remittances in Southeast Asia, the report said. According to the recently released World Bank Migration and Development Brief, the Philippines was the top receiver of remittances in Southeast Asia at US$24.45 billion, placing the nation behind India (US$69.35 billion) and China (US$60.24 billion) globally.
China Daily E-commerce giant Alibaba. com Ltd has purchased 18 percent stake of China’s popular microbloggingserviceSinaWeibo for US$586 million, Sina Corp. announced on Monday. Sina said in a statement on its website that its subsidiary Weibo and Alibaba China have signed an agreementforstrategiccooperation to capitalise on their respective advantages in social networking and e-commerce. “The strategic cooperation is expected to bring Weibo about US$380 million of revenue from marketing and socialised e-commerce in the next three years,” the statement said.
The competition factor Joaquín Almunia
Vice President of the European Commission and EU Commissioner for Competition
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ince the global economic downturn began in 2008, debate has centred on the macroeconomic strategies and instruments used to address the crisis and foster recovery. But correcting imbalances and addressing short-term slowdowns or recessions, while important, should not be allowed to overshadow the need to establish long-term conditions for solid and sustainable economic growth. So far, macroeconomic policy has borne both the blame for economic malaise and the hope that it can be overcome. But we should be devoting as much attention to the microeconomic problems – such as poor incentives, market failures, and regulatory shortcomings – that led us into the crisis in the first place. Indeed,justasmicroeconomic problems in the financial sector triggered a credit crunch and fuelled a global recession, so microeconomic factors hold the key to recovery. Many economies need to fix the financial sector and restore credit, while many more need to raise productivity in order to boost growth and create jobs. Some industries suffer from counterproductive and ill-conceived regulation; others are ailing as a result of monopolistic behaviour by dominant firms, or because they face a lack of effective competition and transparency in utilities and financial services. Fixing these problems would help us to return to a path of growth and prosperity for all. To achieve this, we first must follow the Hippocratic oath and avoid doing more harm. Governments around the world should ignore the temptation to relax competition in order to provide relief to particular industries or economic groups.
Short-sighted policies The renowned American economist Mancur Olson argued that stagnation in developed economies results from cartels and lobbies becoming more numerous and powerful over time, until they eventually drain a country’s economic dynamism. Preserving a competitive environment in which markets remain open and contestable is the best tonic, because firms must constantly innovate and perform better under such conditions. This, in turn, makes our societies more creative and, ultimately, more prosperous. Efforts to relax competition have many faces. But all of them make an economy less productive and redistribute wealth to small, coordinated groups with vested interests and a strong inclination to lobby the government. The most common
approach is protectionism, which has been part of the political discourse in various countries in recent years. But official measures to help national producers at the expense of domestic business customers and consumers are always short-sighted, for they fail to help producers to address the challenges that they will have to face sooner or later anyway. Similarly, old-fashioned dirigisme – such as attempts to “pick winners,” foster national “champions,” or keep failed business models alive through state subsidies – is both harmful and doomed to fail. And misplaced regulation – for example, in the service sector – remains a barrier to healthy competition in many countries. Once we have stopped doing harm, we must start doing the right things. Economic policy is like gardening: pulling on plants will not make them grow faster, but a successful gardener can provide them with the right environment in which to flourish.
Overcoming hurdles Relying on competition can help societies to unleash well-functioning markets’ power to provide goods and services. To achieve this, policymakers must have a sound enforcement framework at their disposal, take an economy-wide approach, and attract the participation of all stakeholders. Sound enforcement implies legal tools and resources to pursue and implement an economic policy, along with an institutional design that reduces meddling by vested interests. Consider, for example, the importance of impartial and effective antitrust authorities, or subsidy schemes that are sufficiently well designed to ensure that they truly serve the public interest. An economy-wide approach is needed because markets are interconnected. Misguided regulation or
There should be a wide consensus that a pro-competitive environment is one of the keys to economic prosperity
Eduardo Pérez Motta
President of the Mexican Federal Competition Commission and Chair of the International Competition Network
market failures that harm competition anywhere can burden the entire economy. The global crisis erupted because major problems in the functioning of the banking sector had been left unaddressed. The poor functioning of input markets, such as markets for energy or intermediary products, can also do a lot of economic harm, not least because it hampers external competitiveness. Finally, strengthening competition throughout the economy requires broad support. This cannot be achieved without bridging ideological divisions and overcoming political pressures from particular economic groups. Advocacy can play a key role, by educating not only policymakers, but also citizens and businessmen, about the benefits of competition. There should be a wide consensus that a pro-competitive environment is one of the keys to economic prosperity. Australia provides a good example of how procompetitive policies deliver results. Its economy was one of the OECD’s worst in terms
of productivity growth in the 1980’s; a decade later, Australia was in third place. In the interim, all of the country’s economic regulation was examined from the standpoint of maximising competition, and a national proreform consensus was forged. Currently, significant efforts are underway in several countries, including Mexico. Structural reforms to boost productivity will also be crucial to ensure Europe’s economic recovery and the survival of its social model. The “Single Market Acts I & II” provide a comprehensive agenda to tap fully the potential of an integrated and competitive market of 500 million consumers to catalyse growth and prosperity in the European Union. We know from experience that competition works. By basing economic policy on this experience, we could not only avert Olson’s grim prophecy. We could also accelerate economic recovery, increase the pace of innovation, and raise livelihoods for millions of people worldwide. © Project Syndicate
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May 1, 2013
Closing Ford rolls into Myanmar car market
BP’s profits fall in first quarter
U.S. carmaker Ford has become the latest foreign company to announce plans to enter Myanmar, after investment sanctions against the country were suspended. Ford has signed a deal with conglomerate Capital Diamond Star Group to open a showroom in Yangon. Ford said it would offer a range of cars and trucks across various vehicles segments. “We see tremendous potential and opportunity for Ford in Myanmar, and we’re looking forward to serving customers in this exciting market,” said David Westerman, regional manager, Asia Pacific, Ford Export & Growth Operations.
Oil giant BP Plc saw profits edge lower in the first three months of the year. Underlying replacement cost profit, which strips out the effect of oil price movements, was US$4.2 billion, down from US$4.7 billion for the same period a year ago. However, the result beat analysts’ forecasts of US$3.27 billion. When the one-off gain from BP’s sale of its interest in joint venture TNK-BP is included, the firm made US$16.6bn in the quarter. “These results represent a strong start to 2013 across all of our businesses,” said BP chief executive Bob Dudley.
Sin Fong can be Portugal restored, govt suggests evading second Officials advise residents to use public fund tap of aid to repair structural flaws
Risk of capital increases at banks ‘very limited’ – analyst
Stephanie Lai
sw.lai@macaubusinessdaily.com
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Sin Fong Garden residents had to be evacuated in October (Photo: Manuel Cardoso)
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in Fong Garden residents can get interest-free home maintenance loans from the Housing Bureau to restore their damaged building, government officials told a press conference yesterday. The residents want it rebuilt from scratch. All of the 140 households from the 18-year-old high rise block in Patane had to be evacuated in October as one of the support pillars in the underground car park suddenly collapsed. The latest investigation commissioned by the government found the poor quality of the concrete pillars was to blame for the accident. On Monday, in a written petition, nearly 200 residents of the Sin Fong Garden complex called for government support to rebuild the whole residence. But in yesterday’s press briefing, the director of Land, Public Works and Transport Bureau Jaime Carion said restoration of the existing
building would be enough to repair the structural flaws, instead of doing a full-scale demolition and reconstruction. The advisor that led the team which compiled the investigation report, Albert Kwan Kwok Hung, “has pointed out that the Sin Fong Garden can be restored to its original design, one that fulfilled the safety standard according to the architectural plan,” said Mr Carion. “The bureau can assist in assessing the cost of restoring the building,” he added. The head of the Legal Affairs Bureau, Andre Cheong Weng Chon, noted that Sin Fong Garden households can apply for the interest-free home maintenance loans from the Housing Bureau to pay for the restoration. “There’s no cap for the loans,” Mr Cheong said. “But this home maintenance fund is not meant to support a reconstruction.” Th e fund h a s a to ta l
of about 200 million patacas (US$25 million) at the moment, Mr Cheong mentioned. “The maintenance fund should be sufficient to support the Sin Fong Garden residents’ use, if they decide to do a restoration,” he added. “Once the liable party is identified for the structural flaws of the building, it will have to be responsible to pay back the loans,” he explained. An administrative investigation on the developer, constructor and engineer involved in Sin Fong Garden construction will start soon, followed by a hearing, Mr Carion had said in a press conference on Friday. However, Mr Carion stressed yesterday that the bureau could not set a deadline for the hearing, though he pledged that the whole investigation procedure would be completed “as soon as possible”.
ortugal’s banks are defying a prediction by Moody’s Investors Service that the nation would need to tap bailout funds a second time to refinance lenders. The government is raising taxes and cutting spending to meet the terms of its 78 billion-euro (US$102 billion) rescue by the European Union and the International Monetary Fund. As part of the plan, Portugal injected 5.6 billion euros into banks that aren’t state-owned, helping its financial industry cope with higher capital requirements and a rise in bad loans as the economy shrinks for a third year. “With recession extending through the middle of 2014 and bad loans peaking later that year or in 2015, the risk of a series of capital increases at banks is very limited,” said André Rodrigues, an analyst at Caixa Banco de Investimento. The Portuguese government forecasts the economy will contract by 2.3 percent this year before growing 0.6 percent in 2014. The jobless rate will climb to 18.2 percent in 2013 and 18.5 percent next year. Portugal’s 10-year borrowing cost dropped to 5.73 percent last week, its lowest level in more than two years. The yield premium to German bunds has narrowed to 462 basis points from 511 at the start of the year. Bad loans rose to a record 6.7 percent of total loans in February, up from 6.5 percent the previous month, according to Bank of Portugal data, with most of the increase attributable to companies failing to pay their debts.
analyst Pepa Mori said in an interview. Moody’s estimates the country’s lenders may need an additional 8 billion euros in capital, with only about 6 billion euros left from the aid package. Portuguese businesses are among those in the euro area with the largest “debt overhang,” according to the International Monetary Fund’s Global Financial Stability Report published on April 17. This may in turn hurt bank’s asset quality, the report showed. “Even in a scenario of rising bad loans and sovereign risk, Portuguese banks look resilient compared to peers in the periphery,” analysts at Royal Bank of Scotland Group Plc in London wrote in a note to clients. “Our stress tests show Portuguese banks can manage a rise in bad loans of over 50 percent, and a widening in sovereign spreads.” Banco Espirito Santo SA, Portugal’s second-biggest non-state bank by assets, would be able to offset a 30 to 40 percent a year increase in bad loans with earnings alone, Lee Tyrell-Hendry, one of the authors of the RBS report, said. Portuguese banks had a core tier 1 capital ratio of 11.5 percent at the end of 2012, according to the Bank of Portugal, in line with that of the biggest banks in Europe by market value. Bloomberg News
Moody’s doubts “Despite the effort that has been made to improving the capital for banks, amid the deterioration of the economic environment, asset quality and profitability are going to continue to suffer,” Moody’s
Portuguese banks look resilient