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Strong yuan, cheap gold could worsen inflation domestic inflation for Macau as the purchasing power of the local money falls. That’s because the city still needs to import most of its essentials from the mainland. But the yuan’s appreciation could also
spell further gains for local retailers – especially sellers of big-ticket items such as luxury clothing, computers and gold. Mainland shoppers already like Macau because they’re not charged sales taxes and because they have
Year II
Number 280
Friday May 10, 2013
Editor-in-chief Tiago Azevedo
Deputy editor-in-chief
Vitor Quintã
MOP 6.00
April 19, 2013
confidence they’re buying g en u i ne g o o d s . B u t t h e yuan’s appreciation means the mainland’s currency buys more patacas, so prices in shops here become even more attractive to mainland shoppers. More on page 3
www.macaubusinessdaily.com
Torrential rain caught Taipa shops off guard With Macau’s tropical cyclone season just starting, Wednesday’s two-hour heavy rainfall brought back memories of 2008’s destructive Typhoon Hagupit. This time the low-lying Inner Harbour – used to dealing with regular floods caused by high tides – escaped the worst effects of the downpour, but Taipa wasn’t so lucky. Shop owners told Business Daily that the flood was “unprecedented” in the last 20 years and caught them off-guard. The 1993 and 2008 typhoon seasons, the two most serious in the past two decades, are said by other locals to have been the worst for business losses. Page 5
Hang Seng Index 23360
23314
23268
23222
23176
23130
May 9
HSI - Movers Name
%Day
CHINA LONGYUAN-H
4.17
ZIJIN MINING-H
1.29
JIANGXI COPPER-H
1.10
SHANDONG WEIG-H
1.07
CHINA TELECOM-H
0.98
CHINA LIFE INS-H
-0.90
PING AN INSURA-H
-1.25
PICC PROPERTY &
-1.34
ANHUI CONCH-H
-2.06
NEW CHINA LIFE-H
-2.07
Source: Bloomberg
Brought to you by
Philippines can ‘do right thing’: Ho Melco Crown Entertainment Ltd’s cochairman Lawrence Ho Yau Lung said this week he is “hopeful” the Philippine government “will do the right thing” regarding the recent news that private casino operators licensed by the country’s regulator will be required to pay 30 percent income tax. The firm’s Manila-listed unit Melco Crown (Philippines) Resorts Corp. will be directly affected by the changes ordered by the Philippines’ Bureau of Internal Revenue. Page 2
Telco not overcharging rivals for access: CTM
Developers waiting for land in three swap deals
Govt to take back most of old UM campus
The city’s biggest telecommunications provider – Companhia de Telecomunicações de Macau SARL (CTM) – says the fees it charges other operators to use its mobile network is “low”, despite their claims that prices are too high. SmarTone Mobile Communications (Macau) Ltd, said on Tuesday that leased line prices charged by CTM were six to eight times higher than in similar markets including Hong Kong.
Two Hong Kong developers and a group of companies are still waiting to receive land from the government in return for giving up plots that were later used for public housing or casinos. One case involves Hong Kong developer Kerry Properties Ltd, which gave up on part of the land granted for the Galaxy Macau resort in Cotai, operated by Galaxy Entertainment Group Ltd.
The City University of Macau may take over the current Taipa campus of University of Macau after the institution relocates to its new Hengqin Island campus, sources told Business Daily. The Tertiary Education Services Office said “most of the existing site of the University of Macau will be given back” to the government after it has moved to the new campus on Hengqin Island this year.
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May 10, 2013
Macau
Philippines can ‘do right thing’ over 30 pct levy: Lawrence Ho Income tax issue could be ‘neutralised’ by a reduction of payments to local regulator, says Melco Crown boss Michael Grimes
michael.grimes@macaubusinessdaily.com
Belle Grand Manila Bay
M
elco Crown Entertainment Ltd’s co-chairman Lawrence Ho Yau Lung said this week he is “hopeful” that the Philippine government “will do the right thing” regarding the recent announcement that private casino operators licensed by the country’s regulator will be required to pay 30 percent income tax. The firm’s Manila-listed unit Melco Crown (Philippines) Resorts Corp. will be directly affected by the tax change announced last month by the Philippines’ Bureau of Internal Revenue. The unit there recently raised US$325 million (2.60 billion patacas) net, excluding an over allotment of shares, via a share flotation. The money will go towards furbishing and operating the US$1 billion Belle Grande Manila Bay casino resort in a joint venture with local firm Belle
Corp, controlled by Filipino-Chinese entrepreneur Henry Sy. It’s due to open in mid-2014, says Mr Ho. In order to enter the market as a private sector casino operator, Melco Crown’s Philippine unit became a franchisee of the Philippine Amusement and Gaming Corporation. Pagcor is the country’s gaming regulator and also an operator of publicly owned casinos. Pagcor had told its new licensees that – aside from taxes on gross gaming revenue levied at 15 percent on VIP gambling and 25 percent on mass-market play (plus two percent Cultural Heritage Tax on mass table play) – they would for the time being only pay a five percent annual franchise tax on their gross gaming revenue direct to Pagcor. That latter tax is confirmed in a memo from the Philippines taxman. But there was further confusion
last week in the industry over even the precise nature of the franchise tax, with Pagcor officials telling analysts privately that the five percent levy was on non-gaming revenue but with hotel revenue excluded. The reason that the income tax row has caught international attention is that the Philippines is currently embarking on a round of resort building designed to create an internationally-competitive casino industry and capture the spending money of its increasingly prosperous neighbours in East Asia. A Las Vegas-style strip known as Entertainment City will eventually be home not only to Belle Grande and the recently-opened US$1.2 billion Solaire Resort & Casino, but also two other resorts, making a total investment of US$6 billion.
United front Lawrence Ho said in response to a question on the income tax issue during the first quarter earnings
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call for the Melco Crown parent: “…I think the four licensees in Entertainment City, together with Pagcor, are all united on this front and will be seeking a joint resolution on this front.” “We have been aware of this potential and I think we are hopeful and a bit confident that we have a legal arrangement with the government via Pagcor and that, potentially, this additional income tax issue could be neutralised by a reduction of payments to Pagcor,” stated Mr Ho. “…Pagcor understands the fact, and the Philippine government understands the fact, that there are billions of dollars of investment to be invested in Entertainment City and if there was a kind of a game change or a rule change at this stage, that would obviously impact that,” he said. “So I think, all in all, with what’s happening in the market and how positive it is, we are hopeful that the government will do the right thing,” he added.
be p art o f
it!
ORGANISED BY:
Ms Kam’s legs Pedro Cortés newsdesk@macaubusinessdaily.com
I
t seems that the hottest topic among certain sections of society is Kam Sut Leng’s legs. Ms Kam, a professor in a local school, is a member of the Macao Youth Dynamics association. It seems she showed too much leg for some people’s tastes during last week’s Labour Day demonstrations. The stir she caused tells us a lot about the attitude of some or even most members of Macau society: they think she was wrong to have exposed that much flesh. This is no more than I would have expected. But those that have such holier-thanthou attitudes would be more helpful if they gave some thought to the message she conveyed on that rainy May Day. Her message was about the daylight robbery speculators commit every day, the price of basic goods, the pollution we must put up and other real problems that burden common folk. For the sake of God – the God that I used to have greater faith in – it is time for society to refocus on what can be done to make this wonderful city better and more prosperous. In my view, society should earnestly ponder whether we have the legs – preferably legs that are easy on the eye – to carry us towards a better future.
For m plea ore in f s ww e visit o ormatio w.aw n, ur w or c onta ardsma ebsite inqu a cau c .com t iries t us @aw ards mac au.c om
MEDIA PARTNERS
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May 10, 2013
Macau
Strong yuan, cheap gold may exacerbate inflation Consumer prices could rise faster as mainland visitors are willing to spend more here Tony Lai
tony.lai@macaubusinessdaily.com
“My nephew is going to get married by the end of this year so I want to buy some necklaces and bracelets for his fiancée, as well as to stock up on some for future use,” said a tourist here from Guangdong surnamed Wang. “The gold here is also cheaper than in the mainland,” he said. He said he expected to spend 50,000 patacas on jewellery on this trip. A member of the staff of jewellery retailer O’Che 1867 told Business Daily last month: “One gram of gold here is about 30 yuan cheaper than in the mainland, considering the value-added tax there and the exchange rate.”
Faster inflation
The slump in the price of gold has caused a gold-buying rush in Macau and Hong Kong
T
wo iPhone 5s, one MacBook Air and one MacBook Pro are a mainland Chinese tourist’s trophies from her buying spree in a city-centre electronics shop here. “These cost me just about HK$36,000 [US$4,639], around 20 percent less than I would have to pay in the mainland,” Xia Mingwa, from the province of Fujian, told Business Daily. “Only one iPhone 5 is mine, while the others are orders for my family and
friends, as they knew I was coming here,” Ms Xia said. An iPhone 5 with 16 GB of memory costs about HK$5,588 in Macau, the equivalent of 4,414.60 yuan, which is about 83 percent of the 5,288 yuan it costs in the mainland, according to data on iPhone maker Apple Inc’s website. The strengthening of the yuan against the pataca has made not only Apple products but also clothes, watches and jewellery sold here more
appealing to mainlanders. Data compiled by the Bloomberg news agency shows that the yuan bought HK$1.2658 on May 9, or 1.87 percent more than at beginning of this year. The pataca is pegged to the Hong Kong dollar. “The size of capital inflows into China and onshore demand for the yuan continue to dominate,” said Khoon Goh, a strategist for Australia & New Zealand Banking Group Ltd in Singapore. The president of the Macau Association of Retailers and Tourism Services, Frederick Yip Wing Fat, told Business Daily: “So far this year we’ve noticed there are quite a lot of middle-class visitors buying gold, watches, cosmetics and electronic products here.” Mr Yip said retail sales in the first quarter had been “good”, but declined to elaborate. “The yuan appreciation and the recent slump in international gold prices can further help spike sales volume,” he said. Official data show annual retail sales rose by 22 percent last year to 52.9 billion patacas. The slump in the price of gold has caused a gold-buying rush in Macau and Hong Kong since late April.
University of Macau professor of economics Henry Lei Chun Kwok warns that the gold-buying rush and the strengthening of the yuan may reverse the easing of inflation. The annual rate of consumer price inflation fell to 4.95 percent in March, its lowest for two years. “These can possibly worsen inflation as there is a new injection of money … due to the greater willingness of visitors to shop and spend here,” Mr Lei told Business Daily yesterday. “The March easing here was due to the slowdown of mainland inflation … but the figures released today show inflation in the mainland has rebounded a little,” he said. The annual rate of consumer price inflation in the mainland rose to 2.4 percent last month from 2.1 percent in March. “In step with the rapid appreciation of the yuan in recent times, inflation here will rise again the next few months,” Mr Lei said. “Yuan appreciation has been plaguing the city these past few years as many imports here come from the mainland,” he said. He said that whether the yuan would continue to strengthen depended on central government policy. With Bloomberg News
More customers using stored-value, pre-paid cards Macau Pass working on allowing people to pay for purchase with their mobile phones
T
he number of stored-value and prepaid cards used by consumers to pay for their purchases has doubled between 2009 and 2012, the Monetary Authority of Macau told Macau Business. In 2009 there were 500,000 cards loaded with 26 million patacas (US$3.25 million) but by the end of last year they had grown to about 1 million cards loaded with 58 million patacas. It is estimated that more than 800,000 of the cards in use are Macau Pass stored-value cards, mostly used for fares on public transport or shopping in convenience stores. Last year the Macau branch of Bank of China Ltd and Industrial and Commercial Bank of China (Macau) Ltd (ICBC Macau) began issuing prepaid cards. ICBC Macau says it has issued over 11,000 prepaid cards. Many are given as gifts instead of cash vouchers that can be used only in the outlet where
they are bought. By the end of next month, the bank is planning to launch reloadable prepaid cards with radio-frequency identification technology for making contactless payments. Macau Pass SA is also working on allowing people to do away with its cards altogether and use their mobile phones as a substitute. This year, the company hopes to launch SIM cards that employ nearfield communication technology to let people make payments just by holding their mobiles close to a Macau Pass terminal. Macau Pass deputy general manager David Lao says Macau Pass is in talks with mobile telecommunications operators about launching SIM cards with this function. You can read the whole story in this month’s edition of our sister publication Macau Business magazine. V.Q.
Macau Pass stored-value cards are mostly used to pay for fares on public transport (Photo: Manuel Cardoso)
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May 10, 2013
Macau
City’s leased line charges no more expensive: CTM
Brought to you by
HOSPITALITY
The company says it cut prices in 2010 by between 10 percent and 40 percent
Flight patterns The number of flights arriving each month started declining in the middle of 2008. Arrivals in the second half of last year and the first three months of this year suggest a recovery. Flights are below what they were in 2008. But the slowdown has meant significant changes among the leading countries sending flights to Macau. The mainland, Taiwan and Thailand are the top three, together representing about 80 percent of all flights.
Tony Lai
tony.lai@macaubusinessdaily.com
SmarTone hopes a second landline provider would lead to reduced prices (Photo: Manuel Cardoso)
Until the middle of 2011, most flights to Macau came from Taiwan. The mainland was second. Early in 2010, there were about 200 more flights a month from Taiwan than the mainland. That advantage narrowed and by the end of 2010 it had been halved. In the second quarter of 2011, the numbers were similar and they have since reversed. By March, there were 163 more flights a month from the mainland. The decline in flights from Taiwan seems to have been arrested. For most of last year, flight numbers have been rising and currently they are at about the same level as in late 2010. Flights arriving from the mainland have also been rising. The third biggest market, Thailand, has seen its share increase at the expense of Malaysia. Since 2010, the number of flights from Thailand more than doubled and flights from Malaysia have declined continuously. J.I.D.
73%
Increase in the number of flights from the mainland in the past three years
T
he city’s biggest telecommunications provider says the fees it charges other operators to use its mobile network is “low”, despite their claims that prices are too high. Companhia de Telecomunicações de Macau SARL (CTM) says it has been offering “a lower-than-standard service charge” to other mobile operators for a leased line service. Pricessetbythetelecommunications provider “fully comply with government rules and regulations for public utilities,” it said. It would not release pricing details because of confidentiality agreements between it and other operators. CTM holds a monopoly on the city’s fixed landline network. Mobile telecommunications operators pay a fee to lease CTM’s network for their operations. One operator, SmarTone Mobile Communications (Macau) Ltd, said on Tuesday that leased line prices here were six to eight times higher than in similar markets including Hong Kong. “It is difficult to compare the price with other regions like Hong Kong as the market size is different,” a CTM spokeswoman told Business Daily. “But according to our benchmarking, there is no substantial difference on the charges here comparing with other places.”
SmarTone chief executive Patrick Chan Kai Lung told a media lunch that high prices would hinder the development of mobile data services. SmarTone has been making similar remarks since 2010. The city’s third mobile operator, Hutchison Telephone (Macau) Co Ltd, branded here as 3, said in March it hoped prices would fall, Chineselanguage newspaper Macao Daily News reported. CTM claims it reduced leased service charges “by 10 to 40 percent in August 2010” according to each of the operator’s contracts. CTM did not say if prices would fall further. The company constantly reviews prices, she said. Mr Chan said SmarTone hoped a second landline provider would lead to reduced prices and called on the government to play a more active role. The Telecommunications Regulation Bureau did not reply to Business Daily’s request for comment. Bureau director Lawrence Tou Veng Keong said last month a decision on the bid to open the landline market would be made before next month. Companhia de Telecomunicações de MTEL, Ltda was the sole bidder, proposing a joint venture with mainland telecommunications equipment provider ZTE Corp.
Internet slowdown cable repaired A damaged undersea telecommunications cable that has slowed load speeds on some Internet sites when accessed via Macau has been repaired, Companhia de Telecomunicações de Macau SARL (CTM) said. All affected services are resumed normal, the city’s main telecommunications provider said in a statement on Wednesday. The relevant section of cable – 108 kilometres (67 miles) off the coast of the mainland city of Shantou, Guangdong Province – had been damaged on the evening of April 13. It affected Internet customers “when accessing some international websites,” the company admitted. The repair was completed in just two days. CTM originally estimated the remedial work commissioned by the cable’s administrator would take “five to ten days”. V.Q.
5
May 10, 2013
Macau
Torrential rain caught Taipa shops off guard But Inner Harbour escaped the worst effects of Wednesday’s storm Stephanie Lai
sw.lai@macaubusinessdaily.com
Shops were forced to move products to higher ground amid heavy rainfall
big financial losses. “When we were about to close the shop on Wednesday, the rain suddenly hit and we immediately moved our products to higher racks at the back of the shop,” said Mona Leong, owner of an outlet that sells children’s wear and infant formula. “The water reached ankle-level in my shop. At Nam Sun we never [normally] got hit by any flood problem, even in typhoon season,” she added. The low-lying Old Taipa village, a popular tourist destination, was also heavily hit, particularly Rua do Cunha. Restaurants and bakeries in the area had to sacrifice Wednesday night’s business to move the products stored at ground floor or basement level to higher ground. “The Wednesday rain ruined our lifts. It took us one morning to sanitise our restaurant,” said Ana Ma, business supervisor at a Portuguese restaurant in the area. “Flooding is quite serious here. Every time heavy rain hits, the water and grease will pump out from the ditch,” Ms Ma said. “There are some problems with the drainage system.”
Softer hit
W
ith Macau’s tropical cyclone season just starting, Wednesday’s two-hour heavy rainfall brought back memories of 2008’s destructive Typhoon Hagupit. This time the low-lying Inner Harbour – used to dealing with regular floods caused by high tides – escaped the worst effects of the
downpour, but Taipa wasn’t so lucky. Ground-floor small businesses at Nam Sun Garden, Taipa, spent yesterday morning cleaning the floodwater before opening to the public. Shop owners told Business Daily that the flood was “unprecedented” in the last 20 years and caught them off-guard. However they reported no
Airport considers open aviation services model Macau International Airport operator hopeful on launch of Indonesia, India routes
T
he era of exclusive service sub-concessions at the Macau International Airport will be over at the end of this year, when contracts for general aviation, ground handling and in-flight catering expire. But the number of operators of each sort of service at the airport in the future will depend on market conditions, Grace Cheang, senior assistant to the chairman of Macau International Airport Co Ltd’s (CAM) executive committee and director of the company’s finance and administration department, told Macau Business magazine. The biggest doubt involves the
general aviation services, currently handled by Macau Business Aviation Centre Ltd. Ms Cheang says the government has hired a consultant to work out the best operating model for the future. A study is in progress and a decision should be made by next month. Menzies Macau Airport Services Ltd does ground handling and aircraft maintenance, and runs air cargo and air mail services. Ms Cheang says CAM and Menzies Macau are in talks about a new contract, but that other companies are also interested in doing this kind of work.
The rainfall did not greatly affect the retail businesses at Rua de Cinco de Outubro, another low-lying old neighbourhood. The street – located opposite Ponte 16 casino in the Inner Harbour district – is prone to floods generated by regular high tides. Tsang Chor Wai, general manager of a 40-year-old Chinese tea store,
LRT works linked to flood Shop owners at Nam Sun Garden believe Wednesday’s flood was due to obstructed drainage from Light Rapid Transit elevated railway construction waste being dumped into street ditches. A Transportation Infrastructure Office spokesperson told Business Daily: “We are still following up with the flood problem”. But the office did say the railway construction works in front of Jockey Club were in no way affecting Nam Sun’s drainage system. After an emergency meeting on the flood problem yesterday, Secretary for Transport and Public Works Lau Si Io pledged to improve Taipa’s sewage system. The government will consider building stations to monitoring rainfall in low-lying areas.
said the locals have become used to seeing flooding and most shops have equipped themselves with floodgates. “We have learnt to place our products on higher racks whenever high tide is about to come,” said Mr Tsang. “We bought steel or some harder, water-proof materials for our racks and other storage devices.” But shops in the district say water flows out of the toilets and street ditches when high tide hits. In some extreme cases, ground floor shops flood when high tide coincides with heavy rain brought by typhoons. The 1993 and 2008 typhoon seasons, the two most serious in the past two decades, are said by locals to have been the most serious for businesses. “In 2008 Typhoon Hagupit made us lose one million patacas [US$125,000] in products and delivery vans,” Mr Tsang said. “Hagupit also brought many other businesses down in the district.” “The drainage discharge network should be improved soon,” he added. “And a more accurate weather forecast could save us from a lot of trouble.”
MCS-Macau Catering Services Co Ltd (Servair Macau) handles in-flight catering. It has little to worry about. Ms Cheang says its new contract is almost a done deal, as no other company has expressed an interest.
Overseas routes The airport’s throughput of passengers rose last year after falling for four years in a row. And this year the business outlook for the company that manages the airport is for clear skies ahead. “Some of the markets are picking up, like Thailand,” says Ms Cheang. The outbreak of H7N9 bird flu has not reduced the passenger figures by much. But travel agencies report that some tour groups going to Shanghai, the city most affected by the virus, have cancelled their bookings. “We would like to have more international routes,” says Ms Cheang. She mentions in particular services to Indonesia and India. There are some clouds on the horizon however. Cargo throughput continues to drop. Annual cargo throughput peaked at over 227,000
There are other firms interested in competing with Menzies on the airport’s ground handling
tonnes in 2005, but had dropped to 27,794 tonnes by last year. Ms Cheang says the drop is due in part to greater competition in the Pearl River Delta, which has five airports, including three in the mainland. Macau airport relies on the transhipment of air freight between the mainland and elsewhere, but shippers are making increasing use of the airports in Guangzhou and Shenzhen, she says. You can read the whole story in this month’s edition of our sister publication Macau Business magazine. V.Q.
66
May 10, 2013 April 19, 2013
Macau Brought to you by
Financial Monitor Bricks and mortar
Developers waiting for land in three swap deals Negotiations still ongoing, government bureau says Vítor Quintã
vitorquinta@macaubusinessdaily.com
The price of new housing has risen considerably in the past two years. Data on the costs of labour and materials used to build housing show they are not much to blame. The chart shows the price indexes for all construction materials used in housing, and for eight of the 16 different sorts of construction material used. The indexes track prices in the first quarters of 2011, last year and this year.
The price index for all construction materials rose by 7.4 percent between the first quarter of 2011 and the first quarter of this year. The rate of increase is lower than consumer price inflation over the same period, and much lower than housing price inflation. Last year the price index for all construction materials changed little, even decreasing slightly. The prices of concrete, sand, cement, bricks, glass, sanitary ware, paint and aluminium have risen faster than the average. But only the prices of concrete and sand have risen much more steeply than the average. The price of sand has risen by almost 48 percent in the past two years and the price of concrete by about 54.5 percent. However, the prices of sand and concrete together account for less than 15 percent of the price index for all construction materials. The changes in prices of nine sorts of construction material have been within five percentage points of the average change in prices. The prices of steel and electrical wire, which together account for almost one-third of the price index for all construction materials, have decreased – the price of steel by about 10 percent and the price of electrical wire by 15 percent.
T
wo Hong Kong developers and a group of companies are still waiting to receive land from the government in return for giving up on plots that were used for public housing or casinos. Last month Legislative Assembly member Kwan Tsui Hang told media there was only one unresolved land swap case, for Ilha Verde sites where public housing was eventually built. Those plots were originally granted to Pak Lei Sun Development Ltd, a subsidiary of Hong Kong-listed developer Polytec Asset Holdings Ltd. But the Land, Public Works and Transport Bureau has confirmed to Business Daily there are two more cases of land swaps still to
be concluded. One involves Hong Kong developer Kerry Properties Ltd, which gave up on part of the land granted for the Galaxy Macau resort in Cotai, operated by Galaxy Entertainment Group Ltd. In March the company said it was expecting to receive a plot “within one of Macau’s new land reclamation projects” in return. The other involves four companies that were granted four adjacent plots in NAPE district, where casinos Wynn Macau and Encore Macau, both operated by Wynn Macau Ltd, and MGM Macau from MGM China Holdings Ltd and retail and housing project One Central were built.
Special stamp duty here to stay: govt Duty levied on just 95 home sales, with sellers still making a profit The special stamp duty had not been levied on one sale of office or commercial property
J.I.D. The content of this column is the work of Business Daily’s journalists.
“T 0.66 %
Fall in construction material costs in 2013Q1 from a year earlier
here is no need to halt” the special stamp duty on sales of homes, a spokesperson for the cabinet of the Secretary for Transport and Public Works told Macau Business magazine. Next month it will be two years since the government imposed the duty and the legislation governing it mandates a review.
Chief Executive Fernando Chui Sai On conceded last month that although the number of properties sold had fallen, the prices paid for them had continued to rise. People in the real estate business say the special stamp duty has helped push prices up, by constricting the supply of homes reaching the market. A specialist in real estate at the
Three of those four companies – all of which have similar names – had the Macau Lawyers Association president Jorge Neto Valente as one of their administrators when the concession was signed in 2000. The plots were to be used for housing and commercial buildings, as well as for two schools and a hotel, before the concessions were revoked in 2004. “There is still no final decision” on these three cases, “as the negotiations are still ongoing,” the land bureau said. The bureau did not mention whether the negotiations involved land in the new five reclamation areas.
University of Macau, Rose Lai Neng agrees. But she warns that to withdraw the measure “might create another wave of unnecessary speculation”. Since June 2011 and until March this year, the duty had been levied on just 95 of the 24,600 sales of homes. The managing director of Savills (Macau) Ltd, Franco Liu, says most owners keep their property for at least two years to avoid the special stamp duty. Still, those who decided to do it earlier are likely to have made a profit on their investment despite the duty, he adds. The stamp duty can do little to slow the rise of housing prices, Mr Liu says. Ms Lai of the University of Macau detects a tendency among investors to buy small flats, for which there is high demand. “The same logic goes for parking spaces. These two types of property in general involve less initial investment than offices and commercial buildings,” she says. The special stamp duty has had little effect on shops and offices, Ms Lai adds. By March, the special stamp duty had not even been levied on one sale of office or commercial property. It had been levied on just six sales of parking spaces. You can read the whole story in this month’s edition of our sister publication Macau Business magazine. V.Q.
77
May April10, 19,2013 2013
Macau
City University may T shift to UM campus The government is to take back most of the University of Macau’s old campus and give it to other institutions Tony Lai
tony.lai@macaubusinessdaily.com
The University of Macau’s present campus is up for grabs
he City University of Macau may take over the University of Macau’s old campus on Taipa after the University of Macau moves to its new campus on Hengqin Island this year, sources have told Business Daily. The director of the Tertiary Education Services Office, Sou Chio Fai, said in a written reply to an inquiry by Legislative Assembly member Kwan Tsui Hang: “Most of the existing site of the University of Macau will be given back.” The reply is dated April 26 but was made public only yesterday. Mr Sou said the University of Macau had asked to keep just one building on Taipa. The rest of the Taipa campus would be used to “promote areas like culture and education”, he said. “All the infrastructure on the present University of Macau site is kept in good condition and can continue to be used by any institution that gets approval from the government in the future.” Mr Sou did not say which institutions might take over the Taipa campus. He said the government “will ensure a reasonable and efficient” use of the land. University of Macau sources, who asked to not be identified, told Business Daily that the government had mentioned the possibility of reserving the land for the City University. Assembly member Chan Meng Kam, who owns the City University and chairs its university council, told Business Daily that his institution had heard nothing
welcome
about this. “We have just been in talks with the government on acquiring a land plot to build a new campus on,” Mr Chan said. He said the City University had not asked for any specific plot. He said of the Taipa campus: “If the government gives us that site, we could accept that arrangement.” The City University has premises in commercial buildings in the NAPE district and in the Sam Yuk Middle School on Taipa. It has about 3,000 students, 60 percent of them full-time students. The university aims to take in more full-time students, and had planned to build a campus for up to 6,000 students near Hac Sa beach on Coloane. But the government squashed that plan, partly because ancient artefacts were found on the intended site. The rector of the City University, Yan Zexian, told Business Daily: “A new campus is very important for us to expand our structure as we are now in a situation of having a university but no campus.” Mr Yan added: “We hope to have the government’s support on this issue.” Business Daily asked the Land, Public Works and Transport Bureau to comment, but we had received no reply by the time we went to press. Chief Executive Fernando Chui Sai On promised last month to increase support in the coming year for institutions of higher education other than the University of Macau.
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88
May 10, 2013 April 19, 2013
Greater China
Inflation rises on vegetable prices Consumer prices 2.4 percent higher in April Kevin Yao and Xiaoyi Shao
C
hina’s annual consumer inflation rose by more than expected in April while factory prices fell for a 14th consecutive month, highlighting the dilemma facing the central bank as it balances support for the economy against the threat of rising prices. With global growth sputtering, China’s central bank has limited room to move, unlike counterparts in South Korea and Australia which both made surprise rate cuts this week. Any easing could fuel property market risks, while tightening would hurt a nascent recovery after economic growth unexpectedly slowed to 7.7 percent in the first quarter from 7.9 percent in the previous three months. Instead the onus may be on the government to push structural reforms to help sustain long-term growth in the world’s second largest economy. “We cannot rely too much on the central bank to support the economy,” said Xu Hongcai, senior economist at China Centre for International Exchange (CCIEE), a top government thinktank in Beijing. The government will instead rely on fiscal policy by boosting infrastructure investment and cutting taxes to underpin the economy, said Mr Xu, a former central bank researcher. Indeed, any investors betting on easing could be disappointed after
the central bank’s sale yesterday of 10 billion yuan (US$1.63 billion) of three-month bills, the first time since 2011 it has done this. The move suggested the central bank will rely on other tools. Tightening, meanwhile, is unlikely given a series of factory and services PMIs issued earlier this month that signalled tepid economic activity in April. Chinese factories are saddled with excess capacity due to weak demand, putting downward pressure on producer prices that in turn erodes their profits. “On policy, the priority now is industrial reform to tackle the
KEY POINTS Inflation gathered pace slightly in April Consumer prices edged up to 2.4 pct Monetary policy seen steady with some fine-tuning Data show central bank policy dilemma
Sun Hung Kai ‘optimistic’ on HK Central office market S
un Hung Kai Properties Ltd, Hong Kong’s biggest developer by value, says it’s “optimistic” about the city’s Central business area office market even after rents last year dropped the most since the 2008 credit crisis. “We don’t have big renewals coming up, and we’re not seeing major tenants giving up large chunks of space,” Lo King Wai, general manager at the developer’s agency arm, said at a seminar hosted by Bloomberg in Hong Kong yesterday. “If demand comes back, then vacancy can be taken up very quickly.” Banks and brokerages, faced with slowing corporate finance activity, have since last year
Average office rents expected to rise about 5 pct this year
give n u p s p a ce i n C en tr a l fo r other districts, where rents can be two-thirds lower. As of January, financial services companies accounted for 49 percent of prime office tenants in Central, according to data compiled by CBRE Group Inc., the world’s biggest commercial realtor. Central rents fell about 15 percent in 2012, the biggest full-
Food prices rose 4 percent last month from a year earlier
problem of excess capacity. As such, the focus will be shifted away from macro policy to micro policy. We expect the monetary policy to remain intact this year,” said Dongming Xie, China economist at Oversea-Chinese Banking Corp Ltd in China. The National Bureau of Statistics said that China’s producer prices dropped 2.6 percent in April, the 14th consecutive month of year-on-year declines and sharper than a drop of 1.9 percent in March. China’s biggest listed steelmaker, Baoshan Iron & Steel Co Ltd, said yesterday it would cut its main steel product prices for June bookings, its first reduction in nine months, underscoring demand worries amid a fragile economic recovery.
Consumer prices Consumer inflation quickened to 2.4 percent in April from March’s 2.1 percent due to higher food costs,
year decline since 2008, according to figures compiled by Colliers International. Even with the departures, occupancy at Sun Hung Kai’s two biggest Central office buildings, One and Two International Finance Centre, stand at 99 percent and 93 percent respectively, Lo said. The average vacancy rate in prime offices buildings in the district is now about 5 percent, Craig Shute, senior managing director at CBRE, said at yesterday’s briefing. While banks have been shrinking, their space in the district may be taken over by expanding mainland Chinese companies and international retailers, Mr Shute said. “That’s the beauty of Central,” said Eric Wong, chairman of property investor Bricks & Mortar Management. “It’s always desirable for people who can make the biggest buck. As the banks start to shrink, you will see other people come in.” New office supply in Hong Kong will fall about a third short of total new demand by 2020, CBRE said in a report in October. Average office rents in Hong Kong will rise about 5 percent this year, said Sun Hung Kai’s Mr Lo. Bloomberg News
data from the National Bureau of Statistics, showed yesterday. Economists polled by Reuters had forecast April inflation to quicken to 2.3 percent and factory gate prices to fall 2.3 percent from a year earlier. Food prices rose 4.0 percent in April from a year earlier, quickening from the 2.7 percent rise in March. “Rising vegetable prices were the main factor pushing up the CPI,” Yu Qiumei, a senior statistician at the statistics bureau, said in a statement accompanying the data, noting bad weather and lower rainfall had reduced supplies. Consumer inflation may quicken to around 3 percent in May, partly because of the base effect, said Zhou Hao, China economist at Australia & New Zealand Banking Group Ltd in Shanghai. But he added that the central bank is widely expected to keep policy broadly neutral with some
Money Rates up as PBOC resumes bill issuance T
he mainland’s unofficial benchmark money rates rose yesterday as the central bank resumed issuing bills for the first time in nearly 17 months, signalling that it will not tolerate a flood of
99
May April10, 19,2013 2013
Greater China
EU China solar panel trade war looms Union agrees on solar panel duties as Beijing urges dialogue Robin Emmott and Francesco Guarascio
T
fine-tuning to support the economy amid the global uncertainties. “Monetary policy is likely to stay relatively accommodative as China’s economic recovery remains fragile.” But inflation running below the government’s annual goal of 3.5 percent gives new Premier Li Keqiang leeway to loosen resourcefee controls that the World Bank says encourage pollution and limit incentives for new technologies. The producer-price deflation may reflect lower commodity prices and factory overcapacity. “With inflation remaining benign, they can move faster,” said Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong. “Resource price reforms will happen faster than reforms in other areas this year” and may begin with fees for industrial use of electricity, water and gasoline, Mr Zhu said. Reuters
speculation-driven liquidity into the banking system. The weighted average of the benchmark seven-day repo rose 12 basis points to 3.11 percent yesterday. The overnight rate also rose, inching up to 2.1173 from 2.1143 percent, while the 14-day rate eased. The People’s Bank of China (PBOC) issued 10 billion yuan (US$1.63 billion) in three-month bills at a yield of 2.9089 percent yesterday morning, a rate traders said indicated the central bank’s intention to keep benchmark interest rates stable. Prior to yesterday, the PBOC had not issued any bills since late 2011, relying instead on short-term repos and reverse repos to adjust money supply in the system. Despite the tightening signal,
he European Commission agreed to impose punitive import duties on solar panels from China in a move to guard against what it sees as dumping of cheap goods in Europe, prompting a cautious response from Beijing which called for further dialogue. EU commissioners backed EU Trade Chief Karel De Gucht’s proposal to levy the provisional duties by June 6 and make Chinese solar exports less attractive, two officials said. Shares in German manufacturers SolarWorld AG, Phoenix Solar AG and Centrotherm Photovoltaics AG rose as much as 7 percent on the decision, while Frankfurt-listed shares in China’s Suntech Power Holdings Co Ltd were down more than 4 percent. The investigation into accusations of dumping is the biggest the commission has launched, but Brussels is trying to tread a careful path, knowing it needs China, the EU’s second largest trading partner, to help the bloc pull out from recession. China’s ambassador to the World Trade Organisation, Yi Xiaozhun, called the decision a mistake although he declined to comment on any possible retaliation. “It will send the wrong message to the world that protectionism is coming,” Mr Yi said. China’s Commerce Ministry yesterday called for dialogue. “We don’t want to see a trade war between the two sides and we hope the EU can cautiously make the ruling decision on China’s solar panel products,” spokesman Yao Jian told reporters. Given that Germany and France are seeking to increase exports to China, Mr De Gucht will try for a negotiated solution with new Chinese Commerce Minister Gao Hucheng before an EU deadline in December to cement the levies for up to five years. That could mean agreeing a
the PBOC permitted maturing bills and repos to inject a net 84 billion yuan into the market this week, as traders had expected, and rates remained around 3 percent, which traders consider an indicator of accommodative liquidity. Data shows heavy capital inflows from overseas markets into China since the third quarter of last year, when central banks in Europe, the United States and Japan began to take quantitative easing steps to bolster their own economies. “It’s an expectation issue,” said a dealer at a Chinese state-owned bank in Shanghai. “The market is not short of money overall, but investors are cautiously watching how the central bank will deal with the liquidity overflow.” But traders did not believe the PBOC was moving towards a monetary tightening stance given a slew of data pointing to a slowerthan-expected recovery in the world’s second-largest economy. Reuters
Chinese exports of solar panels into the EU are worth US$27 bln a year
minimum price at which all solar panels makers selling in Europe adhere to, diplomats said.
Retaliation fears The EU duties, which will come into effect once the commission publishes the decision in its Official Journal, will be set at an average of 47 percent, officials said. Trade specialists from all 27 EU countries will be consulted on May
KEY POINTS Commissioners back EU trade chief’s proposal China says decision will send wrong signal to the world SolarWorld shares rise, China’s Suntech stock falls
15 at a meeting in Brussels and are expected to back the decision, although their position is non-binding. Chinese solar panel production quadrupled between 2009 and 2011 to more than the entire global demand. EU producers say Chinese companies have captured more than 80 percent of the European market from almost zero a few years ago, exporting 21 billion euros (US$27 billion) to the European Union in 2011. As a result, Chinese-made panels are as much as 45 percent cheaper than those made in Europe, industry executives say. Europe’s stance on solar energy is complicated by the fact that some in the EU solar sector, notably importers and installers, support cheap panel imports from China. They say EU tariffs would be damaging for efforts to develop clean energy. Some fear retaliation by Beijing. “Protective duties are poisonous for the solar industry,” said Udo Mohrstedt, chief executive of Germany’s IBC Solar. “These guarding measures will endanger more than 70,000 jobs in mediumsized companies in Germany alone.” Reuters
Vehicle sales up in April C
hina’s passenger-vehicle sales rose 13 percent in April on rising demand for new models in the world’s biggest vehicle market. Wholesale deliveries of cars, multipurpose and sport-utility vehicles climbed to 1.44 million units in April, according to the state-backed China Association of Automobile Manufacturers. Automakers such as General Motors Co. and Volkswagen AG are adding new models in China on expectation that a rising urban population, which has grown an average of about 4 percent annually in the past two decades, will spur demand for
cars. Passenger-vehicle demand has surged by an average of 25 percent since 2006, according to Kevin Tynan, an auto analyst for Bloomberg Industries. Total sales of vehicles, including buses and trucks, gained 13 percent to 1.84 million units last month, the association said. Among the companies seeing the biggest increase, Ford Motor Co. deliveries gained 37 percent to 75,331 units. GM, the biggest foreign automaker in the world’s second-biggest economy, posted a 15 percent increase in China deliveries last month, helped by record Cadillac sales. Cadillac sales surged 99 percent to a record 4,077 units, helped by the recently-introduced XTS model. The Detroit-based automaker continued to woo buyers away from Japanese brands. Bloomberg News
10
May 10, 2013
Asia
South Korea cuts rates to boost growth Central bank seeks to maximise effects of government stimulus Christine Kim and Se Young Lee
S
outh Korea’s central bank cut interest rates for the first time in seven months yesterday, in a surprise move aimed at helping to maximise the government’s stimulus efforts and ease pressure on exports from a strong won, especially against the yen. The decision underscored concerns that Asia’s fourth-largest economy was not recovering as quickly as expected. Bond futures and stock prices rose, while the won edged lower. The Bank of Korea had confounded market expectations last month as well, when it held rates steady, defying political pressure for a cut in response to Japan’s bold monetary easing. This month, all but one of the seven board members voted to lower the policy rate to 2.50 percent, Bank of Korea Governor Kim Choong-soo said, adding recent policy easing by other central banks also influenced the board’s decision. South Korea’s move comes at a time when Japan’s aggressive stimulus has pushed down the yen, affecting rival exporters in the region, and after central banks in Europe and Australia lowered rates and left the door open to more cuts.
The government of President Park Geun-hye, in office for less than three months, has sharply lowered this year’s economic growth forecast and introduced stimulus measures including nearly US$5 billion of new spending plans. “We eased monetary policy to create a foundation on which the effects of the government’s extra budget can be maximised,” Mr Kim told reporters, adding that the rate cut will also help address potential fluctuations in market interest rates stemming from additional bond issuance necessary for the fiscal stimulus. Exports for the trade dependent country rose by just 0.4 percent in April from a year earlier while March’s industrial output contracted on monthly terms for the third consecutive month, underscoring weak growth momentum and bolstering the case for more stimulus.
Supporting growth Yesterday’s decision brought the 7-day policy rate to the lowest since early 2011. Only 10 out of the 26 analysts surveyed by Reuters early this week predicted a cut whereas the remaining 16 saw rates on hold. It was the fourth time in less than a
year that the Bank of Korea made a surprise decision. “This month’s rate cut means that the Bank of Korea admits that the economy is not as good as they think,” said Jun Min-kyoo, economist at Korea Investment & Securities, tipping for possibly additional rate cuts in July and September. But analysts were divided about the central bank’s next move. Some said they did not expect further cuts in the near term as the global economy was already picking up. Mr Kim said the cumulative effects of the government’s stimulus measures and yesterday’s rate cut could lift this year’s growth by 0.2 percentage points from its forecast of 2.6 percent. The government is targeting 2.8 percent growth. Though the central bank’s assessment of economic conditions remain unchanged, it continued to flag uncertainties surrounding the yen’s recent slide and future direction and geopolitical tensions stemming from North Korea Though policymakers say that the yen’s fall has yet to seriously undermine South Korea’s growth, the won is up by more than 11 percent so far this year against its Japanese counterpart. Mr Kim said that sharp
BOK governor says only one dissenter to yesterday’s easing
KEY POINTS Bank of Korea cuts rates in surprise move Base rate cut to 2.50 pct Central bank comes under pressure from govt Rate cut pushes bond prices, stocks higher
fluctuations in the yen’s value could be a destabilising factor, but reiterated that the exchange rate was not the key issue behind the central bank’s rate decision. Reuters
Sumitomo Mitsui to buy stake in Indonesia’s BTPN
S
Sumitomo Mitsui to pay US$1.5 bln for stake in BTPN
umitomo Mitsui Financial Group Inc. agreed to buy 40 percent of Indonesia’s PT Bank Tabungan Pensiunan Nasional for about US$1.5 billion, the Japanese lender’s biggest purchase of a foreign financial firm. Sumitomo Mitsui Banking Corp., the lending unit of Japan’s secondbiggest bank by market value, is buying 24.3 percent of BTPN at 6,500 rupiah a share from investors including TPG Capital and plans to increase the stake to 40 percent, the Tokyo-based company said in a statement yesterday. Japan’s three biggest banks, including Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc., are accelerating overseas takeovers as deflation discourages borrowing at home. Indonesia is the most lucrative market for loans among the world’s 20 biggest economies, while Japan is the least profitable in Asia, data compiled by Bloomberg show. “Southeast Asian countries are a must for Japanese banks’ overseas expansion,” said Toyoki Sameshima, a Tokyo-based analyst at BNP Paribas SA. “We have started to sense the possibility that Japanese banks can become global lenders.”
The Japanese bank is buying the 24.3 percent stake from May 8 to May 10 for 9.2 trillion rupiah (US$946 million), it said in the statement. It plans to purchase an additional 15.7 percent from TPG later, subject to regulatory approval. The 40 percent stake will cost about 150 billion yen (US$1.5 billion), said Sohei Nishimaki, a Tokyo-based spokesman at Sumitomo Mitsui. Shares of Sumitomo Mitsui fell 0.8 percent to 4,580 yen in Tokyo. BTPN slid 1.7 percent to 5,700 rupiah at yesterday’s close in Jakarta, giving it a market value of 33.3 trillion rupiah. Investing in BTPN will give Sumitomo Mitsui greater access to Southeast Asia’s most populous nation and fastest-growing economy. The Indonesian bank, originally a lender to retired civil servants, has rallied more than 10-fold since began trading on March 14, 2008. “BTPN has a unique business model and offers a wide range of services focusing on the mass market,” Sumitomo Mitsui said in the statement. Indonesia “is expected to record rapid and sustainable growth driven by its large population” and expanding middle class, it added. Bloomberg News
11
May 10, 2013
Asia
Aquino pledges economic revival Philippines must show it’s no more Asia sick man, president says
So long as we are very conscious that if a particular sector becomes too hot that we intervene, perhaps put incentives in other areas Benigno Aquino, Philippines President
T
he Philippines, Asia’s fastestgrowing economy after China, needs to do more to finally lose its decades-old tag as the “Sick Man of Asia,” according to the country’s president. “We’ll have to be able to prove that this is not cyclical, or a temporary aberration,” President Benigno Aquino said in an interview yesterday of the country’s economic revival. “We’ll have to be able to do it year in, year out.” His point was illustrated when the lights went out during the 90-minute meeting at the presidential compound in Manila, as the capital suffered a major power failure. Mr Aquino, 53, who is campaigning to expand his support in elections for the Senate on May 13, said more needs to be done to jail the “big fish” in his anti-corruption drive. Reducing the number of Filipinos who travel abroad
to find work is also a key benchmark of success in the three years that remain in his single six-year term, he said. In the first half of his presidency, Mr Aquino has overseen a resurgence in the economy, which expanded 6.6 percent last year. While the growth rate and a shrinking budget deficit helped earn the country a ratings upgrade, they mask an unemployment rate that is among the highest in Asia-Pacific and poverty levels unchanged since before he took office in 2010.
Biggest fish Mr Aquino “has for the right reasons focused on business climate and governance,” said Michael Wan, a Singapore-based economist at Credit Suisse Group AG. “The president has to urgently fast-track infrastructure projects to cement
investors’ confidence in his ability to deliver targets.” Mr Aquino is still focused on governance. The president, who came to power on the promise that “if there’s no corruption, there’s no poverty,” said: “I want the biggest fish to be inside, incarcerated.” Until “I bring people to Muntinlupa, it’s the national prison, I won’t be content,” he said. Mr Aquino’s predecessor, Gloria Arroyo, was arrested on graft charges, while the country’s top judge was ousted for illegally concealing his wealth. Transparency International raised the country’s ranking on its annual corruption index last year to 105 from 129. Indonesia placed 118th, the Berlin-based advocacy group said. “The person who I replaced is one of the biggest fish,” he said. Ms Arroyo is in the hospital, under arrest. “After the elections, there will be
something that will be done,” Mr Aquino said, without elaborating. “We have to fine-tune the civil service system also, so you don’t have an attitude that once you are granted civil service, it is practically impossible for you to be disciplined.”
Foreign investment Mr Aquino, who is seeking more than US$17 billion of infrastructure investments, played down the need to relax foreign ownership curbs to attract money from overseas. The Philippines limits investment from overseas in land, media and telecommunications. The Philippines draws the least amount of foreign direct investment among its Southeast Asian peers, World Bank data show. The nation received US$1.87 billion of FDI in 2011, compared with US$7.43 billion for Vietnam, according to the bank. “He is increasing efficiency in government spending, closing loopholes in tax evasion, but moving forward on more substantial things is needed,” said Trinh Nguyen, a Hong Kong-based economist at HSBC Holdings Plc. “The easiest way to absorb labour is to attract foreign direct investment into labourintensive manufacturing given the high level of unskilled labourers.” Mr Aquino, an economics graduate from Ateneo de Manila University, was rewarded for narrowing a record budget deficit with investment-grade credit scores this year for the first time by Fitch Ratings and Standard & Poor’s. The Philippine Stock Exchange Index surged to a record this month following the S&P upgrade. “We’re trying to guard against the creation of asset bubbles,” he said. “So long as we are very conscious that if a particular sector becomes too hot that we intervene, perhaps put incentives in other areas.” Bloomberg News
Thai govt urges interest rate cut Central bank resisting, worried about household debt
T
hailand’s finance minister stepped up pressure on the central bank to cut interest rates, saying it should take baht strength into account when setting policy and not just inflation, but the Bank of Thailand governor showed he remained reluctant. Finance Minister Kittirat Na Ranong told reporters yesterday he had called a meeting for next Monday with the central bank’s monetary policy committee (MPC) plus representatives of the private sector and government officials to discuss the rise in the baht, which has alarmed exporters. The baht hit a 16-year high in April and at one point had risen 7 percent against the dollar since the
start of the year. It has fallen back since then and traded around 29.45 per dollar yesterday, a rise of around 4 percent in 2013, but Mr Kittirat still wants a rate cut. “We will meet on Monday morning at Government House, with the MPC, the private sector and government units to get a good understanding of their roles on addressing price stability along with foreign exchange stability,” he told reporters. Mr Kittirat said this week four measures aimed at holding down the baht had been agreed between the central bank and government, but he made it clear he felt cutting interest rates would be simpler and have a more immediate impact. The Bank of Thailand (BOT) has
Minister has kept up pressure despite retreat in baht
left the policy rate at 2.75 percent since October. Governor Prasarn Trairatvorakul told reporters yesterday rates were just one option available to address currency strength and it was good the authorities had prepared other measures. “The policy rate is one of the tools,” Mr Prasarn said. “We agree that, overall, in order to address foreign exchange and capital movements, the
interest rate is among the variables. But interest rates already take on a big burden to keep the overall economy in balance.” The central bank has highlighted fast credit growth and high household debt as a reason not to cut rates. Mr Prasarn said the rise in the baht was now broadly in line with that of other regional currencies. Reuters
12
May 10, 2013
Markets Hang Seng Index NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
35.65
0.1404494
15973920
CHINA UNICOM HON
11.42
1.420959
30381175
POWER ASSETS HOL
ALUMINUM CORP-H
3.06
0.6578947
18422642
CITIC PACIFIC
10.04
-0.5940594
15511383
SANDS CHINA LTD
BANK OF CHINA-H
3.79
0.530504
395362126
CLP HLDGS LTD
68.8
0.2184996
1182318
BANK OF COMMUN-H
6.23
-0.32
25215667
CNOOC LTD
14.7
-0.541272
59618573
BANK EAST ASIA
31.85
0.6319115
2825567
COSCO PAC LTD
10.4
-0.5736138
6974714
SWIRE PACIFIC-A
BELLE INTERNATIO
12.68
-1.552795
10030929
ESPRIT HLDGS
10.42
0.3853565
8114423
27.6
-0.5405405
6780700
HANG LUNG PROPER
30.25
-0.3294893
2151372
CATHAY PAC AIR
14.24
-0.8356546
2303116
HANG SENG BK
129.7
-0.1539646
504216
CHEUNG KONG
118.3 -0.08445946
3472312
HENDERSON LAND D
57.3
0
2245744
84.55
4.96586
4809118
23.2
-0.2150538
2712420
AIA GROUP LTD
BOC HONG KONG HO
NAME
CHINA COAL ENE-H
5.92
-0.5042017
47614308
CHINA CONST BA-H
6.57
-0.1519757
163490055
CHINA LIFE INS-H
22.1
-0.896861
48541940
CHINA MERCHANT
25.05
0.2
2159330
CHINA MOBILE
85.95
0.1748252
11313014
HUTCHISON WHAMPO
85.2
-0.1757469
3379739
CHINA OVERSEAS
23.95
-1.237113
11926712
IND & COMM BK-H
5.59
-0.1785714
192894483
CHINA PETROLEU-H
8.65
-0.3456221
80302214
LI & FUNG LTD
10.14
-0.5882353
24363624
CHINA RES ENTERP
25.8
-4.444444
4850992
MTR CORP
32.15
0.46875
CHINA RES LAND
24.1
0.2079002
7160175
NEW WORLD DEV
14.18
CHINA RES POWER
25.4
0
0
PETROCHINA CO-H
10.24
CHINA SHENHUA-H
27.6
0
12447760
PING AN INSURA-H
63.35
-1.247077
10416767
HENGAN INTL HONG KG CHINA GS HONG KONG EXCHNG
130.7
-2.680566
9927757
HSBC HLDGS PLC
87.95
0.2850627
26417621
NAME
PRICE
DAY %
77.2
0.1297017
VOLUME 1151229
41.35
-1.547619
6116672 2366350
SINO LAND CO
12.94
-0.3081664
SUN HUNG KAI PRO
111.2
-0.6255585
2821744
99.9
0.2006018
1656526
TENCENT HOLDINGS
273.8
-0.2913328
1654648
TINGYI HLDG CO
19.98
-0.3491272
10477443
WANT WANT CHINA
11.88
-1.655629
16842500
73.7
1.028101
3305655
WHARF HLDG
MOVERS
15
31
4 23360
INDEX 23211.48 HIGH
23353.68
1786307
LOW
22884.83
0
5529804
52W (H) 23944.74
-0.1949318
67897905
22870
(L) 18056.4 7-May
9-May
Hang Seng China Enterprise Index NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.83
-0.2604167
79960831
AIR CHINA LTD-H
6.8
0.1472754
6504000
ALUMINUM CORP-H
3.06
0.6578947
ANHUI CONCH-H
28.5
BANK OF CHINA-H
3.79
BANK OF COMMUN-H BYD CO LTD-H
PRICE
DAY %
VOLUME
CHINA PACIFIC-H
28.8
-0.6896552
7553120
CHINA PETROLEU-H
8.65
-0.3456221
18422642
CHINA RAIL CN-H
8.28
-2.061856
12219749
CHINA RAIL GR-H
0.530504
395362126
CHINA SHENHUA-H
6.23
-0.32
25215667
CHINA TELECOM-H
31.2
5.227656
8597477
DONGFENG MOTOR-H
CHINA CITIC BK-H
4.54
0.4424779
23532043
GUANGZHOU AUTO-H
6.87
-0.1453488
6353908
CHINA COAL ENE-H
5.92
-0.5042017
47614308
HUANENG POWER-H
9.53
0.6335797
13307039
CHINA COM CONS-H
7.87
0.6393862
16422972
IND & COMM BK-H
5.59
-0.1785714
192894483
CHINA CONST BA-H
6.57
-0.1519757
163490055
JIANGXI COPPER-H
16.52
1.101591
19044737
CHINA COSCO HO-H
3.49
0.867052
8897250
PETROCHINA CO-H
10.24
-0.1949318
67897905
CHINA LIFE INS-H
22.1
-0.896861
48541940
PICC PROPERTY &
10.28
-1.34357
10348963
CHINA LONGYUAN-H
7.49
4.172462
17901842
PING AN INSURA-H
63.35
-1.247077
10416767
CHINA MERCH BK-H
16.88
0
10790069
SHANDONG WEIG-H
7.58
1.066667
4614286
CHINA MINSHENG-H
10.64
-0.1876173
29597436
SINOPHARM-H
9.5
-0.210084
32707989
TSINGTAO BREW-H
16.6
0.8505468
3927935
WEICHAI POWER-H
CHINA NATL BDG-H CHINA OILFIELD-H
NAME
PRICE
DAY %
VOLUME
YANZHOU COAL-H
8.23
0.2436054
20383652
80302214
ZIJIN MINING-H
2.36
1.287554
35659610
-1.311085
11029477
ZOOMLION HEAVY-H
8.31
0.1204819
18050080
4.24
-0.4694836
17272701
ZTE CORP-H
14.04
0.2857143
4640335
27.6
0
12447760
4.12
0.9803922
51952072
12.56
-0.6329114
10491140
23.55
0.856531
1997377
52.4
-0.4748338
834884
29.95
-0.3327787
NAME
MOVERS
15
22
3 11360
INDEX 11266.89 HIGH
11354.15
LOW
10963.22
52W (H) 12354.22 10960
(L) 8987.76 7-May
2503164
9-May
Shanghai Shenzhen CSI 300 NAME
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.74
-0.3636364
59961270
AIR CHINA LTD-A
5.43
-1.451906
6219147
CITIC SECURITI-A
CHONGQING WATE-A
PRICE
DAY %
VOLUME
PRICE
DAY %
6.66
4.225352
28387016
QINGHAI SALT-A
22.58
-0.4409171
7181700
12.64
-0.6289308
71207424
SAIC MOTOR-A
15.82
-3.47773
63424319
NAME
VOLUME
4.02
-0.7407407
9879485
CSR CORP LTD -A
4.09
-0.968523
40855954
SANY HEAVY INDUS
9.51
-1.857585
23279817
ANHUI CONCH-A
17.57
-3.831418
33922727
DAQIN RAILWAY -A
7.18
-1.778386
30802692
SHANDONG DONG-A
45.52
1.857239
9629554
BANK OF BEIJIN-A
8.89
-1.331853
22694887
DATANG INTL PO-A
4.57
0
14702332
SHANDONG GOLD-MI
32.13
0
4503942
BANK OF CHINA-A
2.9
-0.3436426
32188755
EVERBRIG SEC -A
13.9
-2.250352
40676649
SHANG PHARM -A
12.34
1.230517
12930375 64667334
ALUMINUM CORP-A
4.73
0
35515681
GD MIDEA HOLDI-A
14.4
-1.907357
18985780
SHANG PUDONG-A
9.97
-0.7960199
BANK OF NINGBO-A
10.33
-1.24283
9633678
GD POWER DEVEL-A
2.9
-0.6849315
37154815
SHANGHAI ELECT-A
3.82
0.5263158
3580838
BAOSHAN IRON & S
4.95
-0.2016129
30135007
GEMDALE CORP-A
7.23
-2.69179
39651006
SHANXI LU'AN -A
15.79
-3.895313
38082708
BEIJING TONGRE-A
24.78
1.22549
12717303
GF SECURITIES-A
13.45
-1.102941
25555210
SHANXI XISHAN-A
10.45
-3.061224
17260048
GREE ELECTRIC
26.82
-1.794215
15521048
SHENZEN OVERSE-A
5.84
-1.848739
42088581
66.54
0
2072278
6.16
4.940375
115870820
BANK OF COMMUN-A
BYD CO LTD -A
32.64
10.01011
33571166
CHINA AVIC AVI-A
22.02
0.04543389
3128758
GUANGHUI ENERG-A
19.15
-0.1043297
18681248
SICHUAN KELUN-A
CHINA CITIC BK-A
4.36
-0.9090909
16957731
HAITONG SECURI-A
10.93
-0.09140768
90904848
SUNING COMMERC-A
CHINA CNR CORP-A
4.22
-1.17096
22669038
HANGZHOU HIKVI-A
35.11
-3.490929
10878991
TASLY PHARMAC-A
79.71
-0.8705385
1937310
41.5
1.145503
5287200
TSINGTAO BREW-A
37.16
-1.064963
1459562
HENAN SHUAN-A
CHINA COAL ENE-A
6.73
-0.7374631
5967190
CHINA CONST BA-A
4.85
0
24310953
HONG YUAN SEC-A
22.82
2.746511
37923090
WEICHAI POWER-A
22.8
-0.2188184
7180293
CHINA COSCO HO-A
3.37
-0.295858
7406939
HUATAI SECURIT-A
9.77
-1.412714
46984659
WULIANGYE YIBIN
23.14
1.803784
37955033
CHINA EAST AIR-A
3.05
-0.3267974
7344469
HUAXIA BANK CO
10.53
-1.496726
27860745
YANTAI WANHUA-A
18.24
-2.616124
12745809
CHINA EVERBRIG-A
3.11
-0.955414
60852399
IND & COMM BK-A
4.09
-0.2439024
31639840
YANZHOU COAL-A
14.24
-1.995871
5273675
CHINA LIFE INS-A
16.85
-1.519579
14630066
INDUSTRIAL BAN-A
18.22
-1.085776
67250939
YUNNAN BAIYAO-A
90
1.08952
1479897
CHINA MERCH BK-A
12.33
-1.36
44652235
INNER MONG BAO-A
28.65
-0.7963989
27587430
ZHONGJIN GOLD
12.37
0.1619433
12159858
CHINA MERCHANT-A
12.51
-0.7930214
30526584
INNER MONG YIL-A
28.97
-2.293423
10800677
ZIJIN MINING-A
3.11
-0.6389776
30463640
CHINA MERCHANT-A
26.99
-2.351664
10885749
INNER MONGOLIA-A
4.8
-1.437372
34859911
7.4
-0.9370817
27985127
31.94
-1.083927
4717384
13.28
2.786378
44468382
60.55
2.661919
6333910 8885937
CHINA MINSHENG-A
10.35
-0.192864
127478031
JIANGSU HENGRU-A
CHINA NATIONAL-A
10.04
3.933747
53893562
JIANGSU YANGHE-A
CHINA OILFIELD-A
15.79
-0.3156566
2460869
JIANGXI COPPER-A
21.12
-0.7052186
CHINA PACIFIC-A
19.14
-1.23839
14064913
JINDUICHENG -A
10.59
0.9532888
7595810
CHINA PETROLEU-A
6.71
-2.043796
45120567
KANGMEI PHARMA-A
17.4
-2.793296
30348997
CHINA RAILWAY-A
5.37
-0.7393715
16363778
KWEICHOW MOUTA-A
197.18
4.388798
7013468
CHINA RAILWAY-A
2.91
-1.355932
22884134
LUZHOU LAOJIAO-A
25.88
1.769564
10923821
CHINA SHENHUA-A
20.54
-1.154957
7891942
METALLURGICAL-A
2.05
-0.4854369
10781769
4.3
-0.921659
33089451
NARI TECHNOLOG-A
19.92
4.731861
25681511
13137463
NINGBO PORT CO-A
2.45
-0.8097166
9442806
8.53
-0.3504673
8864866
CHINA SHIPBUIL-A CHINA SOUTHERN-A
3.44
-0.5780347
CHINA STATE -A
3.65
-2.144772
99228037
PETROCHINA CO-A
CHINA UNITED-A
3.64
-1.886792
106378761
PING AN BANK-A
20.13
-1.226693
48361312
11.59
-1.277683
61023713
PING AN INSURA-A
41.11
-1.367562
20997851
7.4
0
18700515
POLY REAL ESTA-A
11.98
-2.044154
42987140
11.06
-3.406114
42549783
QINGDAO HAIER-A
12.98
-2.259036
10842361
PRICE DAY %
Volume
NAME
PRICE DAY %
Volume
CHINA VANKE CO-A CHINA YANGTZE-A CHONGQING CHAN-A
ZOOMLION HEAVY-A ZTE CORP-A
MOVERS
85
203
12 2560
INDEX 2527.794 HIGH
2553.94
LOW
2508.05
52W (H) 2791.303 (L) 2102.135
2500
7-May
9-May
FTSE Taiwan 50 Index NAME ACER INC
24.5
-1.408451
14028615
FORMOSA PLASTIC
ADVANCED SEMICON
25.9
0.1934236
13728541
ASIA CEMENT CORP
37.6
0.2666667
ASUSTEK COMPUTER
NAME
PRICE DAY %
Volume
73.5
0.2728513
8939568
TAIWAN MOBILE CO
110
0.456621
FOXCONN TECHNOLO
82
0.1221001
8390589
TPK HOLDING CO L
590
-1.666667
2987085 2506906
4478660
FUBON FINANCIAL
41
0.3671971
13740963
TSMC
115
0.4366812
27342177
UNI-PRESIDENT
60.4
0.6666667
7260054
UNITED MICROELEC
11.9
-1.652893
189203612
349
0.2873563
1327548
HON HAI PRECISIO
81.6
2.255639
105319490
13.45
-2.181818
121129147
HOTAI MOTOR CO
277
1.094891
238218
157
0.3194888
9507789
284
2.158273
13804081
WISTRON CORP
29.55
0.3395586
11316541
39.75
0
17147552
HUA NAN FINANCIA
17.35
0.2890173
5313394
YUANTA FINANCIAL
15.55
2.302632
27392452
CHANG HWA BANK
17.1 -0.2915452
6675130
LARGAN PRECISION
850
0.9501188
1570014
YULON MOTOR CO
52
0.7751938
4370909
CHENG SHIN RUBBE
99.6
-0.4
4930336
LITE-ON TECHNOLO
52.4 -0.1904762
5830024
AU OPTRONICS COR CATCHER TECH CATHAY FINANCIAL
CHIMEI INNOLUX C
HTC CORP
19
-1.554404
77392259
MEDIATEK INC
8.39
0.4790419
42867935
MEGA FINANCIAL H
23.55
0.212766
22152198
CHINA STEEL CORP
25.95
0
13263298
NAN YA PLASTICS
63.2
-1.25
10931800
CHINATRUST FINAN
18.15 -0.5479452
35727267
PRESIDENT CHAIN
189
-1.04712
738723
CHINA DEVELOPMEN
CHUNGHWA TELECOM COMPAL ELECTRON DELTA ELECT INC
375 -0.2659574
5657307
96
0.3134796
12956456
QUANTA COMPUTER
62.5 -0.7936508
19.1
0.5263158
20125186
SILICONWARE PREC
35.5
2.011494
14943292
5714772
147
-1.342282
3715963
SINOPAC FINANCIA
15.1
-0.330033
13873190
FAR EASTERN NEW
32.25
0.624025
4495988
SYNNEX TECH INTL
50.7
1.909548
6897758
FAR EASTONE TELE
74.4
1.362398
4148002
TAIWAN CEMENT
39.15
1.162791
8582130
FIRST FINANCIAL
18.2
0
8373261
TAIWAN COOPERATI
17.1
0.2932551
6440199
FORMOSA CHEM & F
73.5
0.6849315
3840073
TAIWAN FERTILIZE
73.2
0.6877579
4857646
FORMOSA PETROCHE
82
0
1664862
TAIWAN GLASS IND
29.95
0.1672241
1215056
MOVERS
30
15
5 5850
INDEX 5823.38 HIGH
5845.93
LOW
5698.89
52W (H) 5854.36 5690
(L) 4719.96 7-May
9-May
13
May 10, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 38.4 38.2 38.0 37.8
Max 38.4
average 37.879
Max 42.45
average 41.381
Min 37.65
37.6
Last 38
Min 41.25
Max 64.5
PRICE
18.9
64.2
18.8
64.1
18.7
64.0
Max 19.04
average 18.897
Min 18.68
20.6
24.65
41.80
20.5
24.50
41.45
20.4
24.35
Max 20.65
average 20.439
Min 20.3
Last 20.5
DAY %
YTD %
(H) 52W
(L) 52W
20.3
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
2.984276393
101.4199982
BRENT CRUDE FUTR Jun13
103.97
-0.354609929
-3.677969242
116.6699982
90.91999817
GASOLINE RBOB FUT Jun13
284.76
-0.217254187
-0.510097128
324.119997
235.9499931
GAS OIL FUT (ICE) Jun13
868.25
0.230880231
-4.797149123
992.75
799.25
3.932
-1.15635998
12.08665906
4.457000256
3.203999996
291.56
0.030877963
-3.058917409
323.8899946
258.589983
Gold Spot $/Oz
1470.11
1.1372
-11.6765
1796.08
1322.06
Silver Spot $/Oz
24.0072
0.7013
-20.2683
35.365
22.0713
Platinum Spot $/Oz
1503.22
1.0568
-0.9573
1742.8
1374.55
Palladium Spot $/Oz
695.64
1.4822
-0.5746
786.5
553.75
LME ALUMINUM 3MO ($)
1908
1.381509033
-7.959479016
2200.199951
1809
LME COPPER 3MO ($)
7419
2.119752237
-6.455680242
8422
6762.25
LME ZINC
1895
1.201602136
-8.894230769
2230
1745
15405
1.382033564
-9.7010551
18920
14609
15.205
-0.164149705
-3.42966021
17.07500076
14.79500103
630.75
-0.355450237
-9.537468627
824
527
705.25
-0.106232295
-11.1496063
900
664.75
1393
0.16178321
-0.161261423
1605.75
1217.75
143.45
-0.485605272
-4.078903377
202.1999969
132.6999969
NAME
17.18000031
ARISTOCRAT LEISU
69.94999695
CROWN LTD
NATURAL GAS FUTR Jun13 HEATING OIL FUTR Jun13
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul13 Jul13
WHEAT FUTURE(CBT) Jul13 SOYBEAN FUTURE Jul13 COFFEE 'C' FUTURE Jul13 SUGAR #11 (WORLD) Jul13
17.42
COTTON NO.2 FUTR Jul13
86.95
-0.286204923 -0.832572993
-11.75278622 13.113048
23.05999947 94.19999695
81.34999847
COUNTRY MAJOR
-0.351894018
ASIA PACIFIC
CROSSES
Max 24.7
average 24.420
Min 24.25
Last 24.55
24.20
World Stock Markets - Indices
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
1.0223 1.5565 0.9349 1.3152 98.72 7.9929 7.7603 6.1309 54.245 29.46 1.2287 29.422 40.825 9718 100.928 1.22954 0.84494 8.0741 10.5125 129.84 1.03
0.2058 0.3934 0.5348 0.1904 0.2634 0.0075 0.0013 0.1696 -0.1475 -0.3055 0.0163 0.0782 -0.098 0.0926 0.0485 0.3448 0.2036 -0.3406 -0.1807 0.0616 0.0097
-1.4935 -3.7772 -2.0858 -0.2881 -12.7836 -0.1214 -0.125 1.6262 1.3826 3.8018 -0.5941 -1.3221 0.4409 0.7718 -11.4943 -1.7942 -3.4937 1.776 0.1703 -12.5308 -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 6.1307 51.3863 28.56 1.2152 28.913 40.54 9210 74.482 1.20054 0.77553 7.7018 9.6245 94.12 1.029
Macau Related Stocks PRICE
DAY %
YTD %
(H) 52W
(L) 52W
4.16
2.211302
32.06349
4.2
2.29
VOLUME CRNCY 2596513
13.11
0.8461538
22.86785
13.24
8.06
2396679
AMAX HOLDINGS LT
0.83
0
-40.71428
1.8
0.75
279000
BOC HONG KONG HO
27.6
-0.5405405
14.52282
27.9
20.85
6780700
0.305
1.666667
15.09435
0.42
0.215
48000
5.99
0.5033557
0
6.74
2.8
9022
CHINA OVERSEAS
23.95
-1.237113
3.679652
25.6
14.624
11926712
CHINESE ESTATES
13.84
0
14.10275
13.92
7.697
458608
CHOW TAI FOOK JE
10.48
0.1912046
-15.75562
13.4
8.4
4342900
EMPEROR ENTERTAI
2.36
-1.25523
24.86773
2.49
1.1
695000
FUTURE BRIGHT
2.41
-0.4132231
98.8406
2.732
0.765
8098000
CENTURY LEGEND CHEUK NANG HLDGS
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
15105.12
0.324916
15.26984
15106.81
12035.08984
NASDAQ COMPOSITE INDEX
US
3413.267
0.4899274
13.04029
3413.267
2726.68
38
0
25.20593
38.45
16.94
10814096
FTSE 100 INDEX
GB
6585.11
0.02475894
11.65347
6590.45
5229.76
HANG SENG BK
129.7
-0.1539646
9.267063
131.5
99.2
504216
DAX INDEX
GE
8250.52
0.009818527
8.382773
8258.070313
5914.43
HOPEWELL HLDGS
30.95
-0.1612903
-6.917293
35.3
19.049
975000
HSBC HLDGS PLC
87.95
0.2850627
8.179578
88.45
59.8
26417621
GALAXY ENTERTAIN
NIKKEI 225
JN
14191.48
-0.6594711
36.51982
14421.38
8238.96
HANG SENG INDEX
HK
23211.48
-0.1414107
2.447643
23944.74
18056.4
CSI 300 INDEX
CH
2527.794
-0.5900587
0.1919197
2791.303
2102.135
TAIWAN TAIEX INDEX
TA
8285.89
0.2274077
7.615945
8322.69
6857.35
MGM CHINA HOLDIN MIDLAND HOLDINGS
HUTCHISON TELE H
4.33
0
21.62922
4.45
2.98
2074762
LUK FOOK HLDGS I
21.8
-1.801802
-10.65574
30.05
14.7
1425000
MELCO INTL DEVEL
16.68
2.080783
85.12763
16.76
5.12
7802000
18.9
-1.356994
42.33772
19.3
9.509
16672512
3.49
0
-5.675677
5
3.249
2186000
NEPTUNE GROUP
0.155
-1.273885
1.973687
0.226
0.084
7140000
NEW WORLD DEV
14.18
0
17.97005
15.12
7.95
5529804
SANDS CHINA LTD
41.35
-1.547619
21.79676
43.7
20.65
6116672
SHUN HO RESOURCE
1.52
1.333333
8.57143
1.67
1.03
32000
755.149
SHUN TAK HOLDING
4.19
-0.4750594
0
4.65
2.56
3870850
3238.77
SJM HOLDINGS LTD
KOSPI INDEX
SK
1979.45
1.175599
-0.8813048
2042.48
1758.99
S&P/ASX 200 INDEX
AU
5198.381
-0.02632819
11.81838
5211.5
3985
ID
5089.335
0.923021
17.8991
5089.335
3635.283
FTSE Bursa Malaysia KLCI
MA
1766.93
-0.3985344
4.617076
1826.22
1526.6
NZX ALL INDEX
NZ
989.418
-0.004446861
12.17218
990.737
PHILIPPINES ALL SHARE IX
PH
4481.81
0.1830732
21.1634
4525.92
JAKARTA COMPOSITE INDEX
18.6
Last 18.9
42.15
96.28
NAME
64.3
24.80
WTI CRUDE FUTURE Jun13
CORN FUTURE
19.0
Currency Exchange Rates
NAME
METALS
Last 64.1
64.4
20.7
Commodities ENERGY
Min 64
19.1
42.500
41.10
Last 41.35
average 64.15
64.5
20.5
-0.4854369
13.88889
22.15
12.34
5022542
SMARTONE TELECOM
14.14
0.8559201
0.4261369
17.38
12.5
1242208
WYNN MACAU LTD
24.55
0.408998
17.18377
24.75
14.62
2944278
ASIA ENTERTAINME
4.395
-0.7878282
43.62745
5.52
2.4
119439
-0.9238311
17.53523
54.92
41.74
797036
HSBC Dragon 300 Index Singapor
SI
668.69
1.49
7.66
NA
NA
STOCK EXCH OF THAI INDEX
TH
1622.59
0.5228758
16.57123
1622.78
1099.15
HO CHI MINH STOCK INDEX
VN
486.22
0.2370792
17.52109
518.46
372.39
BALLY TECHNOLOGI
52.55
Laos Composite Index
LO
1357.12
-2.199418
11.71827
1455.82
980.83
BOC HONG KONG HO
3.56
0
15.96091
3.59
2.7
5795
GALAXY ENTERTAIN
4.93
2.708333
24.18136
4.93
2.25
54900
INTL GAME TECH
17.34
-0.1727116
22.37121
17.58
10.92
1923963
JONES LANG LASAL
99.25
-0.6804763
18.23922
101.46
61.39
533758
LAS VEGAS SANDS
57.01
0.4227585
23.5052
57.88
32.6127
3436462
MELCO CROWN-ADR
24.71
1.022077
46.73397
25.15
9.13
3338241
MGM CHINA HOLDIN
2.5
9.170306
35.13513
2.5
1.36
2019
MGM RESORTS INTE
14.7
-0.06798097
26.28866
14.9
8.83
8010868
SHFL ENTERTAINME
15.61
-1.389766
7.655172
17.2199
11.75
172305
SJM HOLDINGS LTD
2.66
0.3773585
15.15152
2.85
1.65
15043
138.84
0
23.42431
140.34
84.4902
720798
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
WYNN RESORTS LTD
AUD HKD
USD
14
May 10, 2013
Opinion
A Hacker’s market? Chris Clearfield
Principal at System Logic, an independent research and consulting firm that focuses on issues of risk and complexity
András Tilcsik
N
Assistant professor of strategic management at the Rotman School of Management at the University of Toronto
e v e r i n t h e history of written communication could 140 characters have the impact that they can have now. Two weeks ago, after gaining access to the Associated Press’s main Twitter account (@AP), the Syrian Electronic Army (SEA) posted a fake tweet reporting two explosions in the White House and the injury of President Barack Obama. Within seconds, U.S. financial markets dropped by about 1 percent. Minutes later, Twitter was abuzz with refutations. Reporters at the White House tweeted that they felt no explosion, and AP reporters and the AP Politics Twitter account announced that @AP had been hacked. At his afternoon briefing, White House press secretary Jay Carney confirmed that Obama was indeed unharmed. Financial markets returned to their pre-hoax level. The @AP Twitter hoax represents systemic risk that cannot be eliminated, for it arises from the interaction of highly integrated financial markets and increasingly democratised news delivery. Given strong incentives for malicious parties to perpetrate such hoaxes, we should expect to see an increase in incidents. Financial markets are vulnerable to manipulation, because they are not in the
business of evaluating the truth. Trading often favours first movers, so being fast but wrong can still be profitable. Imagine that a sophisticated trading firm has invested significant resources to develop an algorithm that quickly evaluates the potential market impact of news, and then automatically sends orders to trade based on that predicted impact. When that algorithm parses a tweet from the AP containing important keywords (explosion, White House, and Obama), it will send orders to sell with the expectation that the market will drop as others – first, slower algorithms, then even slower humans – start to process the same news.
Market’s vulnerability The first mover is happy to make such trades without verifying that the news is true. If it is true, the market will stay down or continue dropping, and the first mover will profit from the sales that it has made. If the story is a hoax, the market will probably return to its earlier, fairly valued level, and the first mover will break even on its sales, and possibly profit from any position purchased as a hedge when the market was down. The first mover’s algorithm worked, regardless of the story’s veracity. The likely losers in the @
AP Twitter hoax were later movers who did not react quickly to the news, but reacted instead to the market’s movement. These late movers were also likely to have been sophisticated electronic or institutional traders; some were probably using arbitragebased strategies that relied on the futures market for a calculation of the fair price.
Financial markets are vulnerable to manipulation, because they are not in the business of evaluating the truth
The market’s vulnerability to hoax stories is thus difficult to eliminate, for it is inherent in its structure. It cannot be regulated away or fixed by technology or surveillance.
Even if markets moved more slowly, there would still be a first mover who responded before such a news story was revealed as a hoax. This dynamic is similar to that of an asset bubble, albeit faster. In a bubble, valuations are based on collectively evaluated evidence, and those who enter the market earliest often benefit. Whether evaluating an assumption about the rise of house prices or whether a news story is true, the market does not provide a definitive answer instantaneously.
Obvious incentives If protecting against hoaxes is not the market’s purview, can news agencies or new media entities like Twitter prevent such deception? To be sure, they have suffered reputational damage from this fiasco and will likely try to improve. But their efforts will not be enough. Twitter’s vulnerabilities were technically understood before this event, and the service was already moving toward a more sophisticated authentication model (a password paired with a onetime key from a text message or other device). Twitter will likely implement this soon. It should also consider adding an optional “twokey” system, in which an independent signoff from a separate account is required
before a proposed tweet is broadcast. But, while such measures would increase the difficulty of hacking the system, no technological fix can make it impenetrable. What about the AP’s vulnerabilities? Attackers launched a “phishing” attempt against the AP’s emails shortly before the hoax tweet was sent. Phishing attacks, in which an employee is duped into sending a password to a third party or clicking an untrusted link that installs malicious software, represent a hybrid of cultural and technological failures. As attackers become more sophisticated, they send better-crafted emails, sometimes impersonating trusted sources that lure unwary users. Crafting a culture of security is difficult and often at odds with the dynamic and decentralised work environment of a fastmoving newsroom. As technologies change, so must awareness of vulnerabilities, and this awareness must be disseminated through means other than corporate memos that are disconnected from day-to-day business realities. Empirically, few firms get this right: America’s National Public Radio and the BBC were both recently hacked by the SEA, while McDonald’s and Burger King recently had their Twitter accounts compromised. The proliferation of security lapses means that people are more likely to shrug their shoulders than to cast the first stone at a company that is breached. Finally, the AP is unlikely to face financial penalties for this mistake. A lawsuit for losses stemming from the hoaxed tweet would face nearly insurmountable obstacles. Because few mechanisms can prevent the proliferation of hoaxed tweets, and given the high-profile response that successful hackers can expect, Twitter will remain a vehicle of malicious hoaxes, even as technological barriers make attacks more challenging. Indeed, the SEC recently approved the use of social media like Facebook and Twitter for publicly traded companies’ disclosures to investors. Imagine what might happen if @BP_America tweets: “#Explosion reported at Gulf well. Details to follow.” The incentives to try to hack such accounts are obvious: not only significant publicity for hackers, but highly lucrative profit opportunities from the almost inevitable stock-market movements that will result. On Twitter, as elsewhere, caveat emptor. © Project Syndicate
editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes 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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15
May 10, 2013
Opinion Business
wires
Leading reports from Asia’s best business newspapers
EU can only make the best of its terrible choices
Taipei Times President Ma Ying-jeou yesterday defended the nation’s sovereignty over the Diaoyutai Islands following the recent signing of a fisheries agreement with Japan, and said the government would welcome any efforts by China to negotiate a fisheries agreement with Taiwan. Mr Ma dismissed concerns that China was upset about the agreement and said the pact aimed to protect the rights of Taiwanese fishermen while setting aside sovereignty disputes.
Clive Crook
Bloomberg View columnist
Korea Herald The combined foreign ownership of shares listed on South Korea’s main bourse fell to an eight-month low this week, apparently due to the protracted economic slowdown, data has showed. Overseas investors held 34.02 percent of the total market value, marking the lowest number since 33.98 percent tallied in September last year, according to the Korea Financial Investment Association data. Market watchers said the decline came as the country’s benchmark Korea Composite Stock Price Index (KOSPI) continued to remain stagnant compared to global peers, making foreigners seek other investment destinations.
Times of India Reserve Bank Governor Duvvuri Subbarao said the central bank will soon introduce on a pilot basis plastic currency notes as they have longer shelf-life. “We are trying to introduce plastic currency. We hope to introduce it on trial basis and if that succeeds it will be replicated in the entire country,” he said. He emphasised that plastic note is environment friendly because it has longer shelf-life than the paper notes. Australia and Singapore have already introduced plastic currencies.
Jakarta Globe Sumitomo Mitsui Banking Corp (SMBC) said it agreed to acquire as much as 40 percent of Indonesian lender BTPN, giving the Japanese bank a foothold in the fastgrowing Southeast Asian economy. SMBC’s pursuit of Indonesia’s seventh-biggest bank underscores a sustained push abroad by Japanese companies to beat sluggish growth in their home market. SMBC will first buy 24.26 percent of BTPN for 6,500 rupiah per share, a 14 percent premium to BTPN’s last traded price – paying 9.12 trillion rupiah (US$937 million).
T
he European Central Bank has deployed almost the last of its depleted supply of conventional monetary stimulus, cutting its benchmark interest rate last week to 0.5 percent from 0.75 percent. Few expect this to make much difference to Europe’s flailing economy, and financial markets were unmoved. If conventional monetary policy is all but used up, what else is there? Hans-Werner Sinn, head of Germany’s Ifo Institute for Economic Research, gave a bleak answer in a recent talk at the Peterson Institute for International Economics in Washington. He said the crux of the challenge was the competitiveness gap between Greece, Portugal, Spain and the other troubled economies on one side and Germany and its successful neighbours on the other. The European Union’s problem isn’t that its economy as a whole is struggling, but that some countries are doing so much worse than others. This divergence calls for policies aimed at particular countries. Thanks to the single currency, orthodox monetary policy can’t play that role. The choices, he said, boil down to three. First, presumably by resorting to unconventional stimulus – such as quantitative easing – the ECB could try to raise prices in the core countries faster than in the periphery. That won’t happen because Germany won’t stand for it. Second, Greece and the others could let the combination of very high unemployment and structural economic reform slowly grind down wages and prices. That will be impossibly painful, he believes. Third, there could be exits – possibly temporary ones – from the euro system. That would close the competitiveness gap by allowing for devaluations; on the other hand, the short-term costs of exits are severe. All the possibilities are bad, Sinn said: “The solution set is in a sense empty for the euro zone.” All that can be done is
to muddle through using a mixture of all three terrible options. Brutal adjustment in the periphery (plus debt restructurings that bail in investors, Cyprus-style).
Terrible options A pinch of above-target inflation in Germany and the rest of the core. Temporary exits from the euro area for the worst cases. That’s what Sinn expects and, indeed, recommends. There’s a fourth option – one that Sinn disapproves of so intensely he could hardly bring himself to mention it. That’s overt fiscal transfers, in one form or another, from strong economies to weak, to help ease the pain of adjustment. Such transfers supplant private investment decisions with political investment decisions, he said. It would be the end of Europe’s capitalist market economy. “I think it would be a disaster,” he said. If you ask me, that’s ridiculous. In a situation that requires choosing the least painful mix of policies from some very unpalatable options, a degree of fiscal risk-pooling – say, through the creation of conditional euro bonds – ought to be part of the remedy. And it eventually will be, I’m willing to bet, because Germany and the core will come to see it’s in their best interests. (When the choice is between fiscal transfers and debt bail-ins for Germany’s undercapitalised banks, see what happens.) But Sinn is right that there will be no coherent strategy. That’s never how the EU does things. He’s right, too, that narrowing the price-andlabour-cost gap between core and periphery is crucial. The ECB can’t act directly on that. In a way, it’s irrelevant to the main problem. The question is what national governments such as Greece, Italy and Spain can do to ease the process.
Internal devaluation What’s needed is internal devaluation. An ordinary devaluation works by raising import prices, which reduces
real wages. Living standards fall, but so do relative labour costs, which helps restore growth. Internal devaluation – that is, “devaluation” with the exchange rate fixed – has to reduce relative labour costs in some other way. One possibility is tax reform. Raise sales taxes while cutting payroll taxes, for instance. This has already been done in several countries, though on a timid scale. Then there’s high unemployment, which eventually drives down wages – or ought to. The signature problem of countries such as Greece and Spain is that extremely high unemployment has had so little effect on labour costs. That’s the sign of a broken labour market and a promise of prolonged economic agony. But internal devaluation has worked better in Ireland, for instance, which has now closed much of its competitiveness gap. Germany, as Sinn noted, achieved internal devaluation after its labour costs got out of line during the previous decade. This was done partly through wage moderation caused by reforms to its unemployment insurance system. One approach I’m surprised
hasn’t aroused more discussion is “incomes policy” – mandatory or quasi-mandatory cuts in wages. This method of curbing inflation was popular in many countries during the 1970s, then fell into disuse. As you might expect, the countries that tried it found it ill-suited to curbing chronic inflation, because evasion, distortions and anomalies built up over time. It’s more promising as a way to cut labour costs abruptly and by a lot. Before you dismiss the idea, consider the relevant alternatives – a cruelly extended spell of high unemployment or a conventional devaluation with the huge additional costs that would attend an exit from the euro system. Despite reports to the contrary, internal devaluation can work. Ireland has shown that and so, oddly enough, has Germany. For Europe’s sake, it must be made to work in Greece and the other struggling economies – not as the only treatment, but alongside fiscal transfers and other measures. To work, internal devaluation has to hurt. Whether the pain is bearable or unbearable depends on how it’s done. Bloomberg View
16
May 10, 2013
Closing Only 270 estate licences granted
Sony returns to full-year profit
The Housing Bureau announced it has only granted licences to 270 estate agencies and sales agents from April 3 to last Wednesday. The bureau said in a statement yesterday it has so far received some 1,800 applications. But there are more than 16,000 real estate agents and 5,200 agencies eligible for the threeyear licences, the bureau estimated last month. Starting from July 1, all agents and agencies here must have a licence to work in such sector. The application period closes by the end of June.
Sony Corp reported its first full-year net profit in five years yesterday and said it expected earnings to grow by a further 16 percent this year, helped by restructuring efforts and a weaker yen. The Japanese electronics and entertainment group said net profit for the year that ended in March totalled 43 billion yen (US$435 million), a turnaround from its massive 457 billion yen loss a year earlier. For the current year, it expects to earn a profit of 50 billion yen, boosted by a weaker currency and new products.
Slovenia seeks to avoid EU bailout The government of Slovenia is due to unveil an economic action plan that it hopes will help it avoid an EU bailout. The plan, which will be presented to the European Commission, is expected to include tax increases, banking sector reforms and privatisations. Slovenia’s mostly state-owned banking sector is suffering from mounting bad debts and the government has struggled to borrow money. The country’s economy has been in recession since 2011. Analysts have cited Slovenia as the most likely country to seek help from the EU following the bailout of Cyprus earlier this year. European officials have expressed concern over the stability of the country’s banking sector. The government’s ability to borrow money was dealt a blow last week when Moody’s, a ratings agency, cut Slovenia’s bonds to “junk” status. Despite this, the government was able to raise 3.5 billion euros (US$4.6 billion) from international bond markets last week, but at relatively high rates of interest. Analysts say the funds buy Slovenia time, but do not address the underlying economic and financial problems. The plan, due to be presented by the newlyformed government of Prime Minister Alenka Bratusek, is expected to include tax increases to shore up public sector finances. The country is also planning a “bad bank” to take on the financial sector’s bad debts.
ECB to refrain from rate cuts until 2015 Economists expect to see moderate growth in second half – survey
Berlusconi fraud conviction upheld A Milan appeals court on Wednesday upheld the conviction of former Italian Prime Minister Silvio Berlusconi for tax fraud in a film-rights case involving his Mediaset SpA television company. An audio of the judge’s ruling was transmitted by SkyTG24. The verdict carried a four-year prison sentence when Mr Berlusconi was convicted by the lower court in October. Mr Berlusconi won’t face imprisonment unless the conviction is upheld on a final appeal, which must be completed before the statute of limitations expires. That deadline is in July of next year, Corriere della Sera reported. Niccolo Ghedini, Mr Berlusconi’s lawyer, said the appeals court ruling was a foregone conclusion. “We expected it,” Mr Ghedini, also a senator from Mr Berlusconi’s People of Liberty party, said in remarks broadcast by Sky. “It was totally useless giving our contribution to an appeals court that, in our opinion, had already decided what the solution was on the first day.” The ruling comes as the three-time premier and People of Liberty, or PDL, play a key role in supporting the new government led by Prime Minister Enrico Letta. Mr Berlusconi’s party is the second-biggest force in the governing coalition behind Mr Letta’s Democratic Party. Peter Ceretti, an analyst with Eurasia Group in New York, said the appeals court result could cause tension among the partners in government. “I think the ruling will have some political weight,” Mr Ceretti said. “Berlusconi has been fairly productive so far, although now we may see some noise and perhaps a harder line with the other coalition parties.”
Surveys show worse outlook for euro-area GDP
T
he European Central Bank will refrain from cutting its interest rate again until at least 2015, according to economists surveyed since president Mario Draghi’s pledge last week to deliver another reduction if needed. The Frankfurt-based central bank will leave its main refinancing rate at a record-low 0.5 percent until the end of 2014, according to the median of 18 forecasts in the monthly Bloomberg survey of economists. The same survey shows that 27 of 32 economists predict no cut in the benchmark by the end of 2013, while five see a reduction to 0.25 percent. Mr Draghi said on May 2 that the ECB remains ready to act again after it lowered its key rate by a quarterpoint the same day. While economists in the survey reduced forecasts for euro-region gross domestic product this year, data suggest the 17-nation zone may return to growth after industrial production and factory orders in Germany both jumped more than forecast.
“I don’t expect another ECB rate cut,” said Marco Valli, chief euroarea economist at UniCredit Global Research in Milan. “Inflation will move closer to 2 percent again and we will see moderate economic growth in the second half of this year.” The annual inflation rate dipped to 1.2 percent in April from 1.7 percent a month earlier. That’s the lowest since February 2010. The ECB predicts prices to rise 1.6 percent this year and 1.3 percent in 2014. Economists in the Bloomberg survey cut forecasts for inflation for the next three quarters and for 2014. Their median predictions are for inflation averaging 1.6 percent in both years. Professional forecasters in a quarterly survey by the ECB released in its monthly bulletin yesterday see inflation at 1.7 percent this year and 1.6 percent in 2014. The Bloomberg survey also showed a worse outlook for GDP this year. Economists now see a contraction of 0.5 percent instead
of 0.4 percent, according to the median prediction. Their forecasts show growth of 1 percent in 2014. In the ECB survey, economists cut their euro-area GDP outlook for this year and now see a 0.4 percent contraction instead of stagnation. While Mr Draghi expects the euro region economy to “gradually recover” in the second half of the year, he said on May 2 that the “risks surrounding the economic outlook for the euro area continue to be on the downside”. The ECB, in its monthly bulletin yesterday, reiterated that view. Such an outlook has helped fuel speculation that the ECB might cut its interest rate again. “There’s a chance for the recovery to not materialise anytime soon and for euro-area growth to be flat next year,” said Nick Matthews, senior European economist at Nomura International Plc in London. “Rates could be lowered again and this may also include a negative deposit rate.” Bloomberg News