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Year II
Number 286
Monday May 20, 2013
Editor-in-chief Tiago Azevedo
Deputy editor-in-chief
Vitor Quintã
MOP 6.00
April 19, 2013
Better bait needed for MICE industry
No budget hotel on SJM’s Cotai plot S
JM Holdings Ltd appears to have dropped plans for budget hotel accommodation on its 70,468-square metre Cotai land plot gazetted a fortnight ago. It’s aiming instead for five-star rooms, said Angela Leong On Kei, an executive director of the firm, speaking on the sidelines of an event in Shenzhen. In November her fellow director
Ambrose So Shu Fai, the firm’s chief executive, mentioned the budget rooms plan. But that was at a time when it appeared Ms Leong – fourth consort of SJM’s founder Stanley Ho Hung Sun – was going to be developing her own non-gaming resort independently of SJM, next door on a 180,000-sq. m. plot. More on page 5
Macau’s events industry needs support via improved direct air links and backing from the city’s nongaming sectors says Alan Ho Hoi Ming, vice chairman of the Macau Convention and Exhibition Association. In an interview with Business Daily, Mr Ho said the meetings, incentives, conventions and exhibitions (MICE) industry was developing, but more could be done to help it thrive – especially in the exhibitions segment. Pages 6 & 7
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Creatives dip toes in mainland markets
Oriental Watch sounds sales and profit alarm Page 2
Page 4
Macau, HK ‘must boycott Philippines’ – newspaper
22970
May 16
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HSI - Movers
Builders might pay for waste: govt Environmentalists and developers are divided on the government’s suggestion to charge builders for construction waste. The Environmental Protection Bureau said the designated landfill site on Taipa would be full within a year. Chan Kwok Ho, head of the bureau’s infrastructure management centre, said it had commissioned an academic study on a polluter-pays scheme. The government believes it could encourage builders to produce less waste. But real estate developer Chong Sio Kin told Business Daily he “currently sees no need” for such a measure. Page 3
Name
%Day
TENCENT HOLDINGS
6.49
HENGAN INTL
3.49
LENOVO GROUP LTD
3.28
CATHAY PAC AIR
2.55
TINGYI HLDG CO
2.24
CHINA RES ENTERP
-1.37
CNOOC LTD
-1.39
CHINA SHENHUA-H
-1.49
PETROCHINA CO-H
-2.10
ESPRIT HLDGS
-3.01
Source: Bloomberg
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May 20, 2013
Macau Lift safety guidelines in effect The city’s first-ever guidelines for safety inspections of lifts and escalators came into effect yesterday. Maintenance companies will have 20 days to register with the Land, Public Works and Transport Bureau and two months to inform the bureau on their inspection programmes. Each lift or escalator should be checked at least once a year each. Restaurants, hotels, casinos and industrial buildings must have safety certificates for their lifts and escalators to renew their business licences. Every year the bureau will do spot checks on 5 percent of Macau’s 5,000 lifts.
Creative firms dip toes in mainland’s markets Macau enterprises look for mainland manufacturers and distributors at a fair in Shenzhen Stephanie Lai
sw.lai@macaubusinessdaily.com
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mall enterprises in Macau’s creative industries are tentatively feeling for footholds in mainland Chinese markets, beginning by looking for mainland manufacturers and distributors of their products. Eight design or publishing companies and two cultural associations from Macau took part in the four-day China (Shenzhen) International Cultural Industries Fair at the Shenzhen Convention and Exhibition Centre, which ends today. The Macau Pavilion at the staterun fair took the city’s cultural heritage as its theme. The deputy director of Macau’s Cultural Affairs Bureau, Yao Jing Ming, said on Friday that the Shenzhen fair was important for Macau because the fair could “promote the city’s image and its own designer brands”. Macau first took part in the fair in 2006. The fair has a wide array of cultural and creative products, ranging from provincial arts and crafts to animation productions to gold and jade items. Macau fashion design and event company Lines Lab’s main purpose there is to search for one or two new
mainland buyers or distributors of its products, and for an event partner. Lines Lab founder and creative director Clara Brito told Business Daily that taking part in the fair in years gone by had helped her company find a distributor for its products in Shenzhen. But Ms Brito said the fair itself did not necessarily bring the company a lot of new business, because so wide a range of products was on show there. “We’re a small business, but then there’s a big variety of products surrounding you,” she said. “The fair is not like Maison et Objet in Paris or the 100% Design show in Japan, where people are really looking for contemporary designs,” she said.
necessary for the promotion of his company’s products. “Because Macau’s creative companies are still in the early stages of doing business, an exhibition like this is needed to promote our products overseas and in the mainland,” Mr Chao said. His shop sells designer stationery
and household items, and souvenirs on the theme of Macau’s heritage. He said his designers had recently done deals to cooperate with enterprises in Hong Kong and Japan in making crossover designer products. This collaboration is due to MOD Design Store having taken part in last year’s Tokyo Designer Week. “We would like to seek cooperative ties in the mainland market, with cities like neighbouring Zhuhai,” Mr Chao said. “Because of our production volume, which is only 1,000 pieces per item, it is not easy to find a manufacturing partner in the mainland, as they usually produce in greater quantities,” he said. “We used to encounter technical and raw material problems with our mainland manufacturing base, with which we communicated via a Macau agent,” he said. “So we came here to see if we could gain more knowledge of mainland manufacturers.”
Small runs “We’re here mainly as we were invited by the Cultural Affairs Bureau,” Ms Brito said. “Honestly, I don’t think we can do a lot of business in this particular fair.” Macau shop MOD Design Store is taking part in the fair for the first time. MOD Design Store creative director Chao Sio Leong told Business Daily that the fair was
Creative minds needed M
OD Design Store and Lines Lab both reckon there is still room for the product design business to grow in Macau, but creativity and a better human resource policy are important. “The Macau administration is showing more support for the cultural and creative industries,” said Chao Sio Leong, creative director of MOD Design Store. “But the key is that designers ought to raise the quality of their products so that they can remain competitive here and in overseas markets,” he added. Mr Chao mentioned the 200-million-pataca (US$25 million) cultural and creative industries fund, which Secretary of Social Affairs and Culture Cheong U announced
in October last year. The fund regulation is still in its legislative process and it is expected to be up and running later this year. For Lines Lab, though, a prominent problem that more money cannot solve is the lack of human resources that might hinder the industry’s growth, creative director Clara Brito remarked. “It’s very difficult for small companies like us to hire and keep the team as our manpower can be easily absorbed by casinos,” said Ms Brito. “Either people have a strong passion [for creative industries], or the government should support a better human resource policy,” she said. A plan to attract imported talents could help, Ms Brito added. S.L.
The China (Shenzhen) International Cultural Industries Fair ends today
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May 20, 2013
Macau
Building waste fee sparks row editorial Environmentalists and builders are at odds over a proposal to charge for disposing of construction waste
Reluctant housemates
Tony Lai
tony.lai@macaubusinessdaily.com
Vítor Quintã vitorquinta@macaubusinessdaily.com
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The construction waste landfill took in 2.4 million square metres of waste last year
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he government has divided environmentalists and the construction industry by proposing to charge for disposing of building waste because the dump for building waste is almost full. The Environmental Protection Bureau says the landfill for construction waste on Taipa could be full within a year. The head of the bureau’s infrastructure management centre, Chan Kwok Ho, said on Saturday that the bureau had commissioned an academic study of a scheme for making polluters pay. The government believes that a sufficiently strong financial disincentive to produce waste could make the construction industry generate less of it. “If the industry has to pay for handling its waste, it will surely explore all means to reduce generation,” Mr Chan said in an interview aired by public broadcaster TDM. The construction waste landfill took in about 2.4 million square metres of waste last year, according
to the government. Mr Chan said his bureau would consult the construction industry as soon as it had more details of its proposal. The honorary president of the Macau Construction Association, property developer Chong Sio Kin, told Business Daily he saw no need for such a measure. “Some of the waste, like sand and gravel, could be used for reclamation,” Mr Chong said. “Macau still has much ongoing reclamation work, like the five new reclamation zones.”
Woodland fly-tip The reclamation of the first of five tracts of land that the government intends to reclaim from the sea is due to be completed by 2015. The Chinese-language Macao Daily News quoted builder and Legislative Assembly member Mak Soi Kun as saying that charging for disposing of construction waste might eventually make housing more expensive. The newspaper quoted Mr Mak
Mainland market to support slight tourist growth: industry T he head of the Macau Travel Industry Council expects the number of tourists to rise by “2 to 3 percent” this year, spurred by a continuous growth in the mainland China market. If the industry forecast proves to be accurate, then it would push tourist arrivals to as many as 28.84 million, up from 28 million last year. “As there are more new hotels this year in the market, the operators will definitely carry out more promotions to drive tourists to
come here,” said council president Andy Wu Keng Kuong. He believes the opening of Chimelong International Ocean Resort on nearby Hengqin Island in the second half of this year could help sustain the growth in mainland tourists. But the growth would be limited as the individual visit scheme is not being applying to any new mainland cities, Mr Wu told Business Daily. Official data shows the number of visitors went up by 1.9 percent year-
as saying such a measure would fail to reduce the amount of construction waste as it would add only marginally to building costs. The Macau Green Students Union thinks charging for disposing of construction waste is necessary, but that the measure may come too late. “The government still needs time to carry out studies and consultations, but the saturation of the landfill is already a very imminent issue,” the president of the union, Joe Chan Chon Meng, told Business Daily. “The government should also strengthen its supervision as we are worried this scheme will worsen illegal disposal of waste by contractors,” Mr Chan said. “The illegal disposal of construction waste in the city’s woods is actually a very severe problem, but no one pays attention to it.” The Environmental Protection Bureau says that its efforts to solve the problem of the construction waste landfill filling up will also include looking for a new landfill and seeking cooperation with mainland China.
on-year to over 7 million travellers in the first quarter of this year. The mainland market shot up by 4.4 percent to 4.4 million. Mr Wu also expects to see “a double-digit growth” on tourists from South Korea, a market the Macau Government Tourist Office aims to develop. The council head also thinks Macau should establish a travel alert mechanism similar to the one in Hong Kong. It could help reduce discrepancies among residents, travel agencies and airlines when crises occur overseas, he added. Mr Wu said the tourism regulator is in discussions with airlines and insurers over compensation for consumers when an alert signal is issued. T.L.
t all looked so promising in July 28, 2009 when the six gaming operators officially established the Chamber of Macau Casino Gaming Concessionaires and Subconcessionaires, led by Stanley Ho Hung Sun. A day later, the patriarch of the Macau gaming industry fell at his home and has never fully recovered. The chamber has also had its problems. Despite ambitious goals, such as promoting “the healthy development” of the gaming market and defending “the common interests” of the operators, the organisation was never really active. Perhaps it was because those ‘common interests’ were never really big enough to compensate for diverging goals. The most obvious example is the partial smoking ban inside casinos, which came into effect in January. When the Legislative Assembly discussed the proposal in 2011, the gaming operators made an – almost – joint request to be heard. Alas, Sands China failed to sign the request sent by fax, even though it quickly announced it was “in the loop”. Two years later, the thin veil of consensus has fallen away. With its old casinos longexpected to struggle to meet air quality requirements, SJM Holdings Ltd executive director Angela Leong On Kei did not take long to call for a full smoking ban inside casinos. Such a measure would seemingly level the playing field between old and new casinos and save the company from a big investment in revamping gaming floor ventilation. The fact that the plea for a total ban on casino floor smoking might help Ms Leong ensure the loyalty of SJM’s employees during the upcoming assembly election is surely a happy bonus. Cotai’s second phase of resort building will again test how far the operators can keep their smiling, compliment-issuing faces on display at rivals’ opening events. At this point the odds don’t look good. As Business Daily reported last week, Melco Crown Entertainment Ltd and Las Vegas Sands Corp. have been engaged in a backstage war over the ‘Cotai Strip’ trademark. It is no secret that Sands chairman Sheldon Adelson believes that Cotai’s development into a punter’s paradise owes a lot to his vision – and investment. The company’s attempt to brand its resorts in Cotai collectively as ‘Cotai Strip Macao’ shows how unwilling Mr Adelson is to loosen the grip on his creation. There have been a few isolated cases of cooperation between gaming operators, namely a joint shuttle bus route for a couple of Cotai resorts and Sands offering packages that include House of Dancing Water tickets. We are thankfully far from the cut-throat war that led to the government setting a junket commission cap and eventually to the setting up of the chamber of gaming operators. Macau’s gaming industry has grown on a ‘build it and they will come’ premise. But if for any reason they don’t flock to the four new resorts set to open starting from 2015, competition in Macau could once again grow fierce. Before the knives come out, the casino operators would do well to sit down and talk shop, perhaps starting with easier issues like responsible gambling and shuttle buses. And with the government relying on gaming taxes, a nudge in the right direction would be a smart bet.
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May 20, 2013
Macau
Oriental Watch warns on sales and profit
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Watch retailer expects operating profit ‘substantially lower’
Steady rise
Tiago Azevedo
Although the total number of hotels has not changed in the first quarter of this year, the number of rooms and available bed places kept increasing at a sustained pace. For the last three full quarters the number of hotel units has stood steady at 67. The majority, 28 units, corresponding to 42 percent of the total, were classified as five-star hotels. If we add the four-star hotels, they make up two thirds of the total number of hotels. As most of them are big units, their dominance is even more pronounced when we look at the number of rooms and bed places. Their combined share rises to 88 percent and 90 percent, respectively.
W
tiago.azevedo@macaubusinessdaily.com
The number of rooms increased noticeably in the first quarter, when compared with either the first quarter last year or the previous quarter. Both categories of hotels had their room tally increased by more than 30 percent, compared to last year. In the case of bed places in four-star hotels the rise was even bigger, reaching 42 percent. Compared with the last quarter, the figures did not change much in the case of four stars. But five-stars had the number of beds increased by more than 14 percent, reaching now a total in excess of 51,200 bed places. With this changes, the average size, in terms of rooms, went up noticeably. In the last two years it went up by 28 percent to 667 rooms, in the case of five-stars; and rose by almost 20 percent, to 396 rooms, in the case of four-stars. Overall, all categories considered, the number of bed places in the city rose by 9.5 percent.
atch retailer Oriental Watch Holdings Ltd underlined the challenge facing the company amid an economic slowdown in mainland China with a sales and profit warning on May 16. In the filing to the Hong Kong Stock Exchange, the retailer said that based on the unaudited consolidated results for the year ended March 31, “it is expected that the group’s operating profit for such year will be substantially lower than that for the year ended March 31, 2012”. Oriental Watch sells several renowned brands in Greater China, including Swiss brands like Rolex, Tudor, Piaget and Omega. In the interim report filed in December, Oriental Watch had said turnover for the six months ended September 30 was HK$1.8 billion, with net income dropping 17.3 percent from a year earlier to HK$52 million. Sales in Macau and mainland China dropped by 8.6 percent from the same period a year earlier to HK$613 million. Turnover for the previous fiscal year was HK$3.9 billion (US$502.3 million). The company raked in HK$164 million in net profit in the year ended March 31, 2012. The watch retailer issued Thursday’s profit warning “as a result of a decrease in turnover and drop in gross profit margin due to the adverse effect of the slow down of mainland China’s economy, keen
competition and increase in general stock provision”. The warning was issued after the market closed and the retailer said the annual results are still under review by the company’s auditors. The final results should be out on June 20.
Weak demand Economic growth in the mainland dropped to 7.7 percent in the first quarter trailing the fourth-quarter expansion of 7.9 percent. Beijing in March set a 2013 goal of 7.5 percent, the same target as in 2012. Sales of luxury items have been hit by president Xi Jinping’s
HK$164 mln Oriental Watch’s net profit in the 12 months to March 31, 2012
J.I.D.
23,708
number of bed places available at the end of the first quarter
The watch retailer has two outlets in Macau (Photo: Manuel Cardoso)
crackdown on Chinese government extravagance, putting downward pressure on the world’s second largest economy. In the interim report, the company attributed the decline in net profit to lower gross profit margin due to the absence of price hikes by watch suppliers and rising rental expenses in Hong Kong. The retailer had said consumer appetite for luxury watch items remained relatively weak, “particularly evident amongst visiting mainland consumers who have curbed their spending considerably”. In February, financial services company Guosen Securities (Hong Kong) Financial Holdings Co Ltd said Oriental Watch had plans to open one more shop in Macau, along with one outlet in mainland China and two more in Taiwan. The company has two outlets here, which accounted for 4 percent of the retailer’s revenue in the six months ended September 30. In the December filing, however, the retailer said, “escalating rental rates continued to be a major concern for Hong Kong and Macau retailers”. Business Daily tried to get more information about Oriental Watch’s expansion plans, but we received no reply before press time. The watch retailer fell 4.17 percent to HK$2.30 in Hong Kong trading on Thursday. The market was closed on Friday.
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May 20, 2013
Macau
Leong rules out SJM Cotai low-cost hotel SJM’s executive director contradicts SJM’s chief executive Stephanie Lai
sw.lai@macaubusinessdaily.com
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Angela Leong says a transport link between her theme park and SJM’s casino resort in Cotai will be needed
Corporate Bollywood awards return to Venetian Bollywood is returning to The Venetian Macao with the International Indian Film Academy’s IIFA Weekend and Awards to be held from July 4 to 6. It will be the second time the awards have been held at Las Vegas Sands’ flagship Cotai casino resort. The first time was in 2009 and produced a surge in Indian tourists to The Venetian coinciding with improved air links to the city. The sub-continent’s film industry originated in Mumbai and celebrates its 100th anniversary this year. Bollywood films make modest amounts of money compared to Hollywood’s but are generally more profitable. The highest grossing Indian film 3 Idiots, released in 2009, became a crossover hit in international markets. It made US$70 million (560 million patacas) on a budget of about US$1.82 million. The highest grossing Hollywood production was Avatar the same year, generating US$2.78 billion, but costing up to US$310 million for production and US$150 million for promotion.
Interblock’s fourth generation multiplayers Slovenian firm Interblock – a specialist in electronic table games for casinos – is to launch its fourth generation of multiplayer products at Global Gaming Expo Asia 2013 this week. The G4D Diamond range promises technical improvements. It includes the G4D Wheel with a game called Big 3 Six. It’s an updated and upgraded version of ‘big wheel’ products popular with Asian massmarket gamblers in some jurisdictions and favoured by casino marketing teams as an introductory free play offer when signing up new members. Interblock’s new game uses not one mechanical wheel as is common on rival makers’ products, but three. Game results are generated by a random number generator. At the ICE Totally Gaming 2013 casino industry trade show in London in February, Interblock also publicly launched its Hologram Gaming Lounge, featuring technology with modern digital holographic projection of human figures. It has practical casino floor applications including marketing and perhaps in future, casino table dealing.
he Macau Theme Park will have a budget hotel but SJM Holdings Ltd’s Cotai casino resort will not, according to SJM executive director Angela Leong On Kei. Ms Leong told reporters on Friday that the theme park, planned for a site near the Macau Dome, will be an amusement resort for families. She said her company Macau Theme Park and Resort Ltd would invest over 10 billion patacas (US$125 million) in the project. The company itself has said it will spend 10.4 billion patacas on building 6,000 hotel rooms, an indoor beach, two theme parks and a “4-D theatre”. Ms Leong, speaking after the opening ceremony of the Macau Pavilion at the China (Shenzhen) International Cultural Industries Fair, said: “The theme park will include a budget hotel and a familythemed resort, along with amusement facilities for children.” The room rates and number of rooms in the hotel were “still under study”, she said. “SJM’s casino resort plan will
include a five-star hotel, but no budget hotel,” Ms Leong said. Her remarks contradict statements made by SJM chief executive Ambrose So Shu Fai. Mr So said in November that his company would put “more affordable accommodation” in its Cotai resort. He said on May 10 that SJM and Ms Leong would combine their land and other resources in building a Cotai casino resort more than three times the size his company had originally planned. Ms Leong said: “We will need a transport link between the theme park and SJM’s casino resort site, which are separated by a road.” She added: “We are still discussing how to form that link.” She said the theme park could be completed by 2017, about the same time as SJM’s casino resort. Ms Leong would not say how Macau Theme Park and Resort would finance the project. The government granted SJM Holdings last week a 25-year lease on 70,468 square metres of land, opposite the site of the theme park, for its Cotai casino resort.
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May 20, 2013 April 19, 2013
Macau Brought to you by
Financial Monitor What a crowd The official estimate is that at the end of the first quarter the population of Macau was 586,300. The number of non-resident workers was 114,716, meaning they made up one-fifth of the population. Non-resident workers used to make up a much lower proportion. The number of non-resident workers began to grow again in the second quarter of last year, having been declining for a while before then. In the second quarter of last year non-resident workers made up 13.5 percent of the population.
Tweak strategy, says MICE boss The conventions and incentives businesses here are in good shape, but the exhibitions business has a weak pulse, says the vice-chairman of the Macau Convention and Exhibition Association, Alan Ho Hoi Ming. In an interview with Business Daily, Mr Ho said the meetings, incentives, conventions and exhibitions (MICE) industry was developing, but that more could be done to help it thrive. He said industries other than gaming should plough more money into events here, and that airlines should put on more direct flights to Macau. And the government should consider building a MICE venue, Mr Ho said Luciana Leitão
leitao.luciana@macaubusiness.com
Photo by Manuel Cardoso
Is the MICE industry here going through a good phase of its development? We still call it the development stage. After the completion of the Venetian Macao resort hotel in 2007, its convention and exhibition centre gave a boost to the industry. That opening phase lasted about three years. In 2010 the Committee for the Development of Conventions and Exhibitions was created and we moved into the development stage. Between 2010 and 2010 the population grew by about 9.6 percent, which is fast – the equivalent of average annual growth of over 4 percent. The number of non-resident workers grew by almost 57.5 percent – the equivalent of average annual growth of over 22 percent. The quarterly rates of growth make the contrast between the growth in the population and the number of non-residents even starker. The quarterly rate of growth of the population was under 1 percent for most of the period under review. The quarterly rate of growth in the number of non-resident workers was over 2 percent most of the time. It was 7.4 percent in the second quarter of 2010 and 6.3 percent in the second quarter of last year. These are extremely fast rates of growth. The influx of non-resident workers at such rates is bound to shake up the markets for housing and consumer goods.
J.I.D. The content of this column is the work of Business Daily’s journalists.
4.16 %
Annual rate of population growth in year ended March 31
There were more people taking part in events here last year than in 2011, even though there were fewer events. Aren’t these contradictory signs? Every year the total number of conventions and exhibitions is more than 1,000. According to data from the Statistics and Census Service, the total number of [MICE] visitors was about 1.6 million in 2012, which is a 26 percent increase on the year before. Our bet is to maintain the quantity while promoting quality. Every year, both the scale and the visitors are increasing. Still, it looks like a very timid increase. Why? It all has to do with the base for comparison. In 2007 there was a big increase when compared to 2001, when only 245 events were held in Macau. Now we have five times that number compared to 10 years ago. Right now, we call it steady development. Since the number has climbed steadily, the increase won’t be so noticeable. Why is it not growing faster? In Macau, the industry needs support. Macau’s main industry is the gaming industry, so the Global Gaming Expo Asia (G2E Asia)
a long time for them to get here. We have very few airlines plying long-distance routes. Statistics show more people from Japan and South Korea are visiting Macau. Why? Because we have airlines flying there direct. We need to open up more long-distance air routes.
Our bet is to maintain the quantity while promoting quality
right now is in the top three in the world, and more than 50 percent of the buyers are from Macau and the others are from mainland China, Southeast Asia or elsewhere. So the industry needs support to help sectoral exhibitions grow. The second hurdle is that Macau, compared to neighbouring Guangzhou or Hong Kong, is a late starter. We’ve developed our MICE industry only in recent years, but in Guangzhou they developed theirs more than 50 years ago. For instance, the Canton Fair is the biggest fair in Asia. We need to do more to promote Macau as a MICE destination. The third thing is long-haul flights. Many people are interested in coming to visit Macau, but it takes
At the end of last year the government decided to inject more money into the MICE sector. Is that what the industry needs? Injecting money is just one of the strategies. We need to do more. Macau Economic Services has a convention and exhibition stimulation programme, so they inject more money into attracting sectoral exhibitions and conferences. But we don’t need to inject money into public fairs, like sales exhibitions, wedding fairs or book fairs. We don’t encourage those fairs, because we need to focus more on sectoral exhibitions and conferences. Last year the Macau Trade and Investment Promotion Institute set up a one-stop service and an international bidding centre. We need to inject more money into helping promote Macau as a MICE destination, and to have industry players bidding for events from abroad. That’s why we need money. We need the government to support industry players to bid for bigger events. What would be the right event to pitch for? Macau is a world tourism and leisure centre, so we need to attract projects that include Chinese medicine, tourism and creative industries, which are light industries making things for consumers. Those projects are suitable for Macau, so we try to bid for them.
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Macau
Which kind of events that the city already hosts can help promote Macau outside? We have some branded exhibitions. We had the Global Tourism Economy Forum and the Ministerial Conference of China and the Portuguesespeaking countries of the Forum for Economic and Commercial Cooperation between China and the Portuguese-speaking Countries, which is celebrating its 10th anniversary. As for exhibitions, the Macao International Environmental Cooperation Forum and Exhibition and, also, G2E Asia – organised by Reed Exhibitions Ltd – are good examples. G2E Asia has a very good network, since we have many casinos in Macau. G2E Asia is always very successful. The Macau Convention and Exhibition Association organises a Macau trade fair in mainland China. Every year we choose three cities to organise this event in to help promote Macau’s image and small and medium enterprises, so that they can more easily sell their products in mainland China. Which events are not that suitable for Macau? They have organised a tobacco event, which we don’t think is suitable for Macau, as we need to live healthily. Machinery exhibitions are not suitable for Macau, since the city is more suitable for light industry. Last year they tried to organise some exhibition of electronic machinery, but when they did the research, they found out it was not appropriate because, bringing it in from mainland China in Macau, they would need to pay customs and they would need to pay for the paperwork, so heavy machinery is not suitable. Meetings, incentives, conventions or exhibitions: which business is in better shape? Right now, for conventions and
For conventions and incentives, Macau is a very good destination
incentives, Macau is a very good destination. A fortnight ago, the Chinese-language Macao Daily News quoted the director of the Sheraton Macao Hotel as saying that since September last year the hotel had welcomed 140,000 visitors, including some who were taking incentives or were attending corporate meetings or conventions. Macau is the ideal place for such incentives and corporate meetings. In contrast, the exhibition segment is weaker; we need to do more promotion. It’s not easy in Macau, because we have a population of just 550,000.
The exhibition segment is weaker; we need to do more promotion
Are the existing venues enough? Are they too concentrated in the casinos? So far, the venues are enough, but in a while we will need to build a new venue, which should be built by the government. Some organisations don’t want events or conventions in a venue connected to casinos. For instance, not all ministers from the Portuguese-speaking countries will want to enter premises that have casinos. We need to build a 30,000 square metre venue and include a meetings facility. We need a fiveyear programme to build a new venue owned by the government. You have mentioned that Macau needs to be marketed as a MICE destination. How can we do that? Right now, we have several ways. We have the Macau Government Tourist Office and its many branch offices abroad. We publish many brochures and put up posters in their offices. We are also willing to participate in various meetings. We try to cooperate with some partners abroad. Last year, we went to England and visited a great exhibition company and asked them to do some promotion. The important thing is to let
people know Macau right now is diversifying its industry, and it’s not only about the gaming industry. You will be submitting a report to the government with a new strategy for the industry. What are your findings? We need to promote sectoral exhibitions and conferences, so more money needs to be injected into attracting sectoral visitors to Macau. We will provide 50 percent of transport for trade visitors from Hong Kong and abroad to come to Macau, and three nights’ accommodation, so they will be more interested in coming here. The response was positive. We will complete it by the end of this
year. We need trade visitors and trade visitors are also high-end consumers, so they will spend more money in shops and hotels.
We need a five-year programme to build a new venue owned by the government
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May 20, 2013 April 19, 2013
Macau
Fisherman’s killing not hurting Manila casinos: executive Mainland calls for trade and tourism boycott of Philippines after Taiwan incident Michael Grimes
michael.grimes@macaubusinessdaily.com
Flashpoint – protests in Taiwan over fisherman’s death
A
call by a hawkish mainland newspaper for a Chinese boycott of trade and tourism links with the Philippines following the killing of a Taiwanese fisherman is unlikely to throw Manila’s growing casino industry off course, says a senior executive. Chinese high roller gamblers have been identified as a target customer group by developers of four new casino resorts planned for Entertainment City, Manila Bay in the Philippines capital. Total investment in the Las Vegas-style strip is likely to be at least US$6 billion (48 billion patacas). The first of those resorts – the US$1.2 billion
Solaire Resort & Casino – had its first phase opening on March 16. Macau casino developer Melco Crown Entertainment Ltd is also involved in one of the projects – a joint venture for the US$1 billion Belle Grande Manila Bay resort due to open in mid-2014. Business Daily understands from industry sources that two of Macau’s biggest junket operators – Suncity Group and Tak Chun – have both signed agreements with Solaire to supply the resort with players, and that a third, Neptune Group, has had talks about doing so. Dennis Andreaci, formerly a leading casino executive in Macau
and now Solaire’s senior vice president, gaming, declined to comment on those reports. But he told Business Daily yesterday: “We don’t think the issue concerning Taiwan will have a negative impact on our business. We have VIP players with us as we speak.” The Global Times – a sister publication on the mainland of People’s Daily – had called on the mainland, Hong Kong and Macau to join a Taiwanese boycott of the Philippines. Taiwan investigators, led by a senior justice ministry official, returned to Taipei on Saturday after an abortive attempt at a joint investigation with Philippines
officials over the May 9 incident. The inquiry was to have centred on whether the Philippines coastguard intentionally killed a fisherman aboard a Taiwanese fishing boat in waters disputed by the two jurisdictions. Sino-Japanese diplomatic ties were damaged last autumn over disputed islands known in China as the Diaoyu chain and in Japan as the Senkaku Islands. A call in China for a boycott of Japanese goods led to a fall of at least 35 percent year-on-year in September for orders of Japanese cars reported Bloomberg News. It’s possible that if the relationship between Taiwan – supported by the mainland – and the Philippines deteriorates, it could have some impact on mass-market tourism from Greater China to the Philippines. Hong Kong’s Security Bureau has maintained a ‘black’ Outbound Travel Alert warning on the Philippines since the August 2010 killing of eight Hong Kong residents aboard a tour bus in Manila. It followed the vehicle’s hijacking by a disaffected former police officer. Hong Kong’s travel warning indicates ‘severe threat’ and citizens are warned to avoid all travel. The only other country for which there is such a warning is Syria. In August 2011, a year after the Manila hijacking incident, visitor numbers from Hong Kong were down 29.2 percent year-onyear according to figures from the Philippines Department of Tourism. Visitors from mainland China were up a modest 2.1 percent year-on-year during the period, compared to the 8.93 percent year-on year expansion in August 2010. The latest diplomatic incident comes as visitor numbers from Hong Kong to the Philippines showed signs of recovery. In the first quarter of this year, visitors from Hong Kong were up 25 percent year-on-year according to the tourism department.
City more competitive last year: report
M
acau’s competitiveness ranking among 293 cities in the Greater China region went up by 3 places last year, the Chinese Academy of Social Sciences said. The report published yesterday by the Chinese State Council’s think-tank shows Macau placed 10th in last year’s ranking of overall competitiveness, up from 13th place in 2011. It also means Macau is once again among the top 10 most competitive Chinese cities, for the first time since 2007. The city ranked the highest in 2006 – eighth place – when the academy first included Macau, Hong Kong and Taiwan in the report.
The ranking is compiled using several indices such as growth and size of the cities’ economy, industry levels, quality of life and the negative costs of development. Hong Kong remained at the top of last year’s ranking, as it has been since 2006, followed by Shenzhen and Shanghai. In the sustainable development index, Macau’s ranking was even higher at the 6th place last year while Hong Kong topped all Chinese cities. The academy picked the two special administrative regions as the cities with the best quality of life. Macau was also considered the most ecological Chinese city. But the two cities had different
Macau was considered the most ecological among 293 Greater China cities
fates in the index for the cities most suitable for running a business. Hong Kong was crowned as the best while Macau could not enter the top 10.
The state think-tank has released data on the competitiveness of the Chinese cities annually since 2002. T.L.
99
May April20, 19,2013 2013
Greater China
Fiji turns to China amid strained regional ties Fiji’s military ruler said yesterday he would meet Beijing’s leaders in China this month, a week after unveiling an official trip to Russia, as he looks beyond strained regional ties in the South Pacific. Voreqe Bainimarama has been banned from Australia and New Zealand since seizing control in a 2006 coup. “I have been invited to visit China late this month to meet with the Chinese premier, Li Keqiang, and president Xi Jinping,” Mr Bainimarama told the Fiji Sun from France. The prime minister has previously said he wants to ditch ties with Australia and New Zealand. He said the Chinese understood the reforms he has been trying to implement before a return to democratic elections scheduled for next year.
Home prices climb as buyers defy curbs
Bidding nears for Congo hydropower plant
China’s new home prices rose in all but two cities in April Xiaoyi Shao and Michael Martina
C
hina’s housing inflation accelerated to its fastest pace in April in two years, driven by a jump in prices in Beijing and Shanghai, complicating the task of policymakers trying to cool the property sector while supporting economic expansion. Average new home prices rose 4.9 percent last month from a year ago, after a year-on-year increase of 3.6 percent in March, according to Reuters calculations from data released by the National Bureau of Statistics (NBS) on Saturday. The rise was the sharpest since April 2011. Rising home prices have reignited concerns about property inflation, adding to pressure on policymakers who are struggling to curb house prices and still spur a strong economic recovery. “The market expectations on rising home prices have not changed thoroughly and the property tightening campaign is still at a critical stage to strictly enforce (curbing measures),” Liu Jianwei, a senior statistician at the NBS, said in a statement. Worried about a rebound in home prices, China’s government unveiled a fresh round of measures in March to try to cool the sector, though those measures were less stringent than market expectations. New home prices in Beijing rose 10.3 percent in April from a year
earlier and Shanghai’s prices were up 8.5 percent in April from a year ago. Both marked the fastest yearon-year gains since January 2011 when NBS changed the way it calculated data.
Biting moves China’s fight against property speculation has headed into its third year but many middle-class Chinese are still priced out of the urban housing market. However, on a monthly basis, new home prices rose 1 percent in
KEY POINTS April home prices hit fastest gains since April 2011 Month-on-month gains ease on govt curbs New home prices rise in 67 of 70 cities Property tightening campaign still at critical stage: official
April, easing from March’s gain of 1.2 percent, the NBS data showed, providing tentative signs that recent government moves to ward off property bubbles are biting. Home prices rose month-onmonth in 67 of 70 major cities monitored by the NBS in April, down from 68 in March. The accelerating year-on-year home price gains were mainly caused by low bases last year as over 60 percent of 70 cities saw month-on-month price drops last April, said Mr Liu. China’s home prices began their latest climb in mid-2012 when the central bank started expanding monetary easing as part of Beijing’s growth-supporting policies. “ G o i n g fo r wa r d , w e e x p e c t property sector policy to stabilize in the coming months and see a modest property recovery to continue,” Wang Tao, an economist at UBS, said in a note to clients before the data was released. “Meanwhile, the recent property tightening, including administrative price controls, may keep property prices from rising too rapidly in a few large cities,” Ms Wang added. Reuters started its weighted China home price index in January 2011 when the NBS stopped providing nationwide data, only giving home price changes in each of 70 major cities. Reuters
Chinese, South Korean and Spanish firms are vying to develop a hydropower project likely to cost between US$9 billion and US$14 billion on the Congo River, Congolese officials said on Saturday. The planned Inga 3 scheme, which aims to overcome power shortages that have curtailed economic growth in Africa, would produce some 4,800 megawatts of electricity and is one of the largest proposed power projects in Africa. It would be sited about 230 km southwest of the Democratic Republic of Congo’s capital Kinshasa. The project has been dogged by problems since the 1980s, ranging from political instability to local objections and massive costs. Three consortiums are in the running, including one led by China Three Gorges Corp and Sinohydro.
Hong Kong launches first electric taxis Hong Kong saw its first electric taxis hit the streets on Saturday in a step towards reducing the city’s high levels of roadside pollution. The 45 bright red cars were launched by Chinese electric vehicle producer BYD. Called the BYD e6, the five-door crossover sedans are powered by iron phosphate batteries and take two hours to charge, a statement from BYD said, adding that they can then travel for 300 kilometres. The cars have been rented by the Hong Kong Taxi and Public Light Bus Association, which is testing them over the next six months. “An electric car saves the cost of fuel and will allow our taxi drivers to earn more,” said Wong Chung Keung, president and chairman of the association.
10
May 20, 2013
Greater China
EU cites Chinese telecoms for trade violations Anti-dumping charges laid against Huawei and ZTE Corp Daniel Bases
E
urope’s top trade official for the first time late on Friday officially cited Chinese mobile telecommunications equipment makers Huawei and ZTE Corp for violating anti-dumping and antisubsidy guidelines. European Union (EU) Trade commissioner Karel De Gucht said he was prepared to launch a formal investigation into anti-competitive behavior by these Chinese companies in order to protect a “strategic” sector of Europe’s economy. “Huawei and ZTE are dumping their products on the European market,” Mr De Gucht told Reuters
in an exclusive interview before engaging with United States businesses as part of his preparations for negotiating a Transatlantic free trade pact with the United States. Those talks are expected to begin in July. An investigation now into sales practices of Chinese telecoms equipment companies would open up a new front in a multibillion-euro trade offensive against a critical partner. The EU is China’s most important trading partner, while for the EU, China is second only to the United States. Chinese exports of goods to the
Beijing probes N. Korea boat hijack
C
hinese authorities were yesterday investigating claims that unidentified North Koreans hijacked a Chinese fishing boat, kidnapping 16 sailors and demanding a ransom, local media and an official said. Tensions between North Korea and China, seen as its sole major ally, have been high in recent months after North Korea carried out a nuclear test in February, a move Beijing said it “firmly opposed.” Armed North Koreans on May 6 hijacked the boat and escorted it towards North Korea while it was sailing in waters around 70 kilometres from North Korea’s western coast, reports and the boat’s owner Yu Xuejun said. “The crew were taken away by a North Korean patrol boat after an armed hijacking,” Mr Yu told AFP, adding that the kidnappers had
contacted him to demand a ransom of 600,000 yuan (US$98,000). “We are currently investigating (the boat owner’s claims),” a section chief for the state border detachment, which is responsible for border security, in Dalian, surnamed Zhang, told AFP. The Southern Metropolis Daily said the Chinese embassy in North Korea told Mr Yu it was “dealing with the matter”. He had reported the incident to Chinese authorities, he said, but later posted details of the hijacking on the Internet out of frustration with an apparent lack of official action. The Global Times newspaper last year quoted Dalian residents as saying that official North Korean coastguards had in the past captured fishing boats and stolen fuel and other items on board. AFP
27-member bloc totaled 290 billion euros (US$372 billion) last year, with 144 billion euros going the other way. Cheap capital for these Chinese companies “creates a distorted playing field and that is what this is about,” Mr De Gucht said, referring to Huawei and ZTE, respectively the world’s No. 2 and No. 5 telecom equipment makers. Huawei denied it had broken any rules. “In Europe and in all markets, Huawei always plays fair and we win business and trust from our customers through our innovative technology and quality service, rather than via pricing or subsidies,” the company said in a statement e-mailed to Reuters. Separately, the official China Daily quoted Huawei’s Western Europe president Tao Jingwen as saying that the firm’s rivals were blaming the company for their own failures. “Some European companies have blamed Chinese companies for their losses, but sometimes they were caused by their own laziness,” Mr Tao said in a report carried before the publication of Mr De Gucht’s remarks. ZTE could not be reached immediately for comment, but the company has also in the past denied benefiting from illegal state support.
At the movies While Europe battles with China over trade, given 18 out of 31 ongoing trade investigations are with Beijing, Mr De Gucht said he is eager for talks to start with Washington on a trade pact focused on making each other’s regulations more compatible. “The most important part of that agreement, because it would be a real game-changer, is the regulatory [component],” he said. The EU and the United States account for nearly half of the world’s economic output and 30 percent of trade, with goods and services worth
KEY POINTS Chinese players a threat to strategic industry: EU Talks with Chinese for over a year come up empty Trade talks with U.S. are potential ‘game changer’
US$2.7 billion traded bilaterally every day. Those figures were released in February when the two sides announced they would launch bilateral trade talks. Ahead of the talks France has already pushed to exclude from negotiation the movie and television industries. France has long defended a “cultural exception” in trade affairs in what it sees is a need to protect European arts from Hollywooddriven market forces. According to the latest data from the Motion Picture Association of America, United States film and television services exports in 2010 were US$13.5 billion, down 2 percent from 2009 but up 6 percent over 2006. Mr De Gucht said the EU would not put on the table “a cut to the subsidies for European film producers.” Instead, for the first time, he is arguing the audiovisual sector should be included so European businesses could benefit from developments in the digital media sphere. “What we would prefer not to have is a carve out of the whole sector and I hope that we can manage to do so.” Reuters
11
May 20, 2013
Asia Indonesia offers oil, gas blocks in tender Indonesia opened a rights tender for 21 oil and gas exploration blocks on Friday, two of which are for unconventional gas concessions on the islands of Borneo and Sumatra, as Southeast Asia’s largest economy moves to shore up its energy security. Besides two shale gas blocks, the tender includes 17 offshore blocks that are mostly in the eastern half of the archipelago, according to a release from the Energy and Mineral Resources Ministry. Indonesia is struggling to reverse declining oil and gas output to meet expanding energy needs amid uncertainty over regulatory issues that have put off investors in the sector. The areas being offered are estimated to contain up to 3.1 billion barrels of oil and 57.6 trillion cubic feet of gas.
Bangladesh defends trade status in Washington Officials from Bangladesh are lobbying United States president Barack Obama’s administration not to revoke trade preferences as it reviews worker-safety conditions in the Asian nation. A delegation from Bangladesh met with officials from the United States Trade Representative’s office last week to discuss the agency’s study of the trade benefits, agency spokeswoman Kate Villarreal told Bloomberg on Saturday in an e-mail. The April 24 collapse of a garment factory in Bangladesh, which killed more than 1,000 people, has highlighted the nation’s workersafety conditions. The trade representative’s office said in a January 8 notice that “the lack of progress by the government of Bangladesh in addressing worker rights issues in the country warrants consideration of possible withdrawal, suspension or limitation [of] Bangladesh’s trade benefits.”
Weak yen helps drive Japan earnings, but no cure-all Carmakers and technology giants post improving results amid monetary easing Peter Brieger
J
apan’s earnings season has drawn to a close with the sharply weaker yen helping inflate profits at some of the nation’s top exporters, but, warn some commentators, the drop is not all good news. Sony booked its first annual profit in five years, Toyota more than tripled its earnings in the fiscal year to March and the head of rival automaker Nissan hailed the taming of the currency. “I have been talking about the unbelievable strength of the yen for many years,” Carlos Ghosn said after the firm released its earnings this month. “I’m very happy to see that finally we are getting in neutral territory by having the yen at 100 yen to the dollar.” In late 2011, the dollar hit a low around 75 yen, partially as a result of its safe-haven status when the euro area crisis and global uncertainty sent investors piling into the currency. Japanese firms wailed, bemoaning the rocketing cost of their products overseas and the shrinking value of their repatriated profits. Many scrambled to cut costs and shifted ever more production away
from high-cost Japan. But things changed with the election last December of toughtalking prime minister Shinzo Abe, who promised a flood of government spending as he harangued the central bank, then replaced its head with a man who unleashed massive monetary easing. The yen has since dropped like a stone. On Friday the dollar was buying around 102.50 yen. The plunge has sparked criticism, particularly in Europe, that Tokyo engineered the unit’s decline to gain a trade advantage.
Stocks surging Mr Ghosn applauded the Japanese premier’s policy moves, dubbed “Abenomics”, saying Nissan had been “begging” for a cheaper yen for years. “Companies are starting to build up more production, people are starting to invest again, the stock market is up, foreign companies are more interested in Japan,” the auto executive said. The Tokyo stock market has been surging as foreign investors pile into
North Korea test-fires 3 missiles North Korea fired three short-range missiles on Saturday as it showcased its military ambitions in defiance of international sanctions and diplomatic efforts to convince the state to return to talks. Kim Jong Un’s regime launched two guided missiles in the morning and a third in the afternoon, into waters off the country’s east coast, a South Korean Defense Ministry spokesman said. The reason for the action wasn’t clear, he said. South Korea urged the North to stop provocations, a Unification Ministry spokesman said in a briefing. “North Korea will achieve nothing by threats or provocations, which only further isolate” the nation and “undermine international efforts to ensure peace and stability in Northeast Asia,” a spokeswoman for the White House said.
Nissan Motor president and chief executive officer Carlos Ghosn
Japanese stocks in anticipation of brighter times ahead, pushing the benchmark Nikkei 225 index up about 50 percent since late December. And companies have been obliging with many lifting their profit forecasts for the current fiscal year through March. “The weaker yen certainly has a positive impact on Japanese companies, although it may not be enough for the Japanese economy to take off,” said Nomura Securities strategist Hisao Matsuura. “And for individuals, rising import prices – including petrol and imported food – are harmful.” That could dig into overall consumer spending at a time when Tokyo and the business sector want just the opposite, while the weak yen is sending some companies’ input costs soaring, including technology giant Toshiba, whose quarterly net profit fell 62 percent. The company said this month that yen depreciation hurt its flat-panel television and personal computer businesses because it imports many dollar-denominated parts to make those goods, boosting production costs. AFP
12
May 20, 2013
Markets Hang Seng Index NAME
PRICE
DAY %
VOLUME
AIA GROUP LTD
35.1
-0.5665722
16440543
CHINA UNICOM HON
ALUMINUM CORP-H
3.13
0.6430868
14146846
CITIC PACIFIC
BANK OF CHINA-H
3.76
-0.5291005
185308119
BANK OF COMMUN-H
6.16
-0.3236246
18819408
BANK EAST ASIA
31.05
-0.3210273
3509941
BELLE INTERNATIO
12.96
0
BOC HONG KONG HO
NAME
CLP HLDGS LTD
PRICE
DAY %
VOLUME
PRICE
DAY %
11.44
0.7042254
23450935
POWER ASSETS HOL
78.4
0.7064868
2615684
9.84
0
10410619
SANDS CHINA LTD
40.6
0.3708282
9986187
68.5
-0.4360465
1775265
CNOOC LTD
14.24
-1.385042
72173494
COSCO PAC LTD
10.42
-0.1915709
4874319
19185333
ESPRIT HLDGS
10.94
-3.014184
12257612
HANG LUNG PROPER
NAME
VOLUME
SINO LAND CO
12.32
1.315789
7936106
SUN HUNG KAI PRO
109.8
0.0911577
2260826
SWIRE PACIFIC-A
100.3
0.4004004
731217
TENCENT HOLDINGS
292.2
6.48688
12734719
27.5
-0.9009009
10321987
29.9
-1.320132
3633669
TINGYI HLDG CO
20.55
2.238806
5987104
CATHAY PAC AIR
14.46
2.553191
5889027
HANG SENG BK
130.2
0.462963
1150439
WANT WANT CHINA
12.04
0.3333333
11571939
CHEUNG KONG
HENDERSON LAND D
55.95
-0.1784121
2345507
WHARF HLDG
75
-0.6622517
2484344
HENGAN INTL
87.45
3.491124
2836530
23.3
0.2150538
7255483
115.8
0.1730104
2417108
CHINA COAL ENE-H
5.22
0
64133211
CHINA CONST BA-H
6.45
-0.462963
175986017
CHINA LIFE INS-H
21.35
-1.157407
28354331
CHINA MERCHANT
25.2
0.1988072
2179997
CHINA MOBILE
HONG KG CHINA GS HONG KONG EXCHNG HSBC HLDGS PLC
85.7
-0.8101852
12676375
HUTCHISON WHAMPO
22.85
-0.4357298
20400491
IND & COMM BK-H
CHINA PETROLEU-H
8.53
-0.8139535
49634193
CHINA RES ENTERP
25.15
-1.372549
5119784
CHINA RES LAND
22.8
-0.6535948
9087965
CHINA RES POWER
22.8
0.2197802
9552560
CHINA SHENHUA-H
26.45
-1.489758
18231069
PING AN INSURA-H
CHINA OVERSEAS
130.7
0
2182041
88.8
0.9664582
21334623
86.05
1.294879
7087202
5.56
0.1801802
210414145
LI & FUNG LTD
11.12
1.090909
55007639
MTR CORP
31.85
1.433121
5025797
NEW WORLD DEV
13.42
-0.8862629
10197078
PETROCHINA CO-H
9.81
-2.095808
87160277
59.9
-1.073493
11323587
PRICE
DAY %
VOLUME
27.75
-1.069519
4237447
CHINA PETROLEU-H
8.53
-0.8139535
MOVERS
21
25
4 23140
INDEX 23082.68 HIGH
23131.63
LOW
22895.13
52W (H) 23944.74 22890
(L) 18056.4 14-May
16-May
Hang Seng China Enterprise Index NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.75
-1.055409
77537796
AIR CHINA LTD-H
6.65
-1.041667
3100559
ALUMINUM CORP-H
3.13
0.6430868
14146846
CHINA RAIL CN-H
8.09
27
-1.279707
7711978
CHINA RAIL GR-H
BANK OF CHINA-H
3.76
-0.5291005
185308119
CHINA SHENHUA-H
BANK OF COMMUN-H
6.16
-0.3236246
18819408
CHINA TELECOM-H
BYD CO LTD-H
34.4
3.458647
9431199
DONGFENG MOTOR-H
CHINA CITIC BK-H
4.45
0.678733
29623218
GUANGZHOU AUTO-H
CHINA COAL ENE-H
5.22
0
64133211
CHINA COM CONS-H
7.58
-1.430429
CHINA CONST BA-H
6.45
CHINA COSCO HO-H
3.33 21.35
CHINA LONGYUAN-H
PRICE
DAY %
VOLUME
YANZHOU COAL-H
7.87
0.2547771
22323582
49634193
ZIJIN MINING-H
2.21
-1.339286
40520713
-0.4920049
10783166
ZOOMLION HEAVY-H
8.08
-1.8226
11115393
4.13
-2.364066
13956191
ZTE CORP-H
13.62
1.038576
5753370
26.45
-1.489758
18231069
4.12
-0.4830918
39525982
12.66
0
8179083
7.54
2.02977
8566201
HUANENG POWER-H
9.64
0.4166667
9139572
14987003
IND & COMM BK-H
5.56
0.1801802
210414145
-0.462963
175986017
JIANGXI COPPER-H
15.54
0.3875969
12963000
0.6042296
5488750
PETROCHINA CO-H
9.81
-2.095808
87160277
-1.157407
28354331
PICC PROPERTY &
10.08
-0.591716
5197083
7.99
2.304738
36249523
PING AN INSURA-H
59.9
-1.073493
11323587
CHINA MERCH BK-H
16.66
-0.5966587
13225504
SHANDONG WEIG-H
7.7
1.049869
6575400
CHINA MINSHENG-H
10.02
-0.3976143
29376200
SINOPHARM-H
23.35
0.8639309
5034678
CHINA NATL BDG-H
9.09
-0.4381161
25106484
TSINGTAO BREW-H
52.1
0.6763285
1446521
16.32
0.7407407
5690208
WEICHAI POWER-H
28.95
0.3466205
1534099
ANHUI CONCH-H
CHINA LIFE INS-H
CHINA OILFIELD-H
NAME CHINA PACIFIC-H
NAME
MOVERS
16
22
2 11180
INDEX 11019.48 HIGH
11171.25
LOW
10961.63
52W (H) 12354.22 10960
(L) 8987.76 14-May
16-May
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.75
1.102941
166120263
CHONGQING CHAN-A
10.35
-2.816901
62173683
POLY REAL ESTA-A
12.38
2.568351
85123807
AIR CHINA LTD-A
5.52
2.60223
10040805
CHONGQING WATE-A
6.79
0
12373789
QINGDAO HAIER-A
12.96
0.07722008
21330749
ALUMINUM CORP-A
4.14
1.470588
20566244
CITIC SECURITI-A
12.79
1.507937
111759907
QINGHAI SALT-A
23.44
2.716915
9895287
ANHUI CONCH-A
17.7
2.668213
34212161
CSR CORP LTD -A
4.26
1.187648
49808717
SAIC MOTOR-A
15.44
0.390117
49991268
BANK OF BEIJIN-A
9.05
0.6674082
52944694
DAQIN RAILWAY -A
7.16
2.578797
51621824
SANY HEAVY INDUS
9.48
2.597403
34566572
4.97
0.811359
12970240
SHANG PHARM -A
12.33
1.148482
14361728
SHANG PUDONG-A
10.24
0.8866995
122955149
NAME
NAME
NAME
BANK OF CHINA-A
2.93
0.6872852
47558171
DATANG INTL PO-A
BANK OF COMMUN-A
4.73
1.502146
81894885
EVERBRIG SEC -A
13.43
1.742424
45924035
BANK OF NINGBO-A
10.56
1.246405
20241323
GD MIDEA HOLDI-A
14.78
-0.06761325
12385344
SHANGHAI ELECT-A
3.92
0.5128205
6285541
BAOSHAN IRON & S
4.96
0
33521173
GD POWER DEVEL-A
2.96
3.135889
78704995
SHANXI LU'AN -A
17.08
7.556675
39641265
BEIJING TONGRE-A
24.48
0.4513746
11807663
GEMDALE CORP-A
7.71
3.489933
101222412
SHANXI XISHAN-A
10.94
5.496625
30068967
21041819
GF SECURITIES-A
13.71
1.031688
31639937
6.54
3.645008
110208096
-2.229385
SHENZEN OVERSE-A
BYD CO LTD -A
36.4
CHINA AVIC AVI-A
26.4
3.977944
10623743
GREE ELECTRIC
25.89
1.132812
21569621
SICHUAN KELUN-A
CHINA CITIC BK-A
4.43
0.9111617
38232712
GUANGHUI ENERG-A
19.18
1.858736
18123689
SUNING COMMERC-A
CHINA CNR CORP-A
4.48
1.818182
50514942
HAITONG SECURI-A
11.37
3.082502
157003777
39.08
0.5920206
7020067
40.1
1.621896
23.35
65
0.5258274
2194304
6.08
1.333333
45031084
TASLY PHARMAC-A
80.36
0.0248942
2601861
TSINGTAO BREW-A
37.94
3.661202
3183107
4309242
WEICHAI POWER-A
22.67
1.522615
9263494
0.8639309
31787555
WULIANGYE YIBIN
23.4
2.183406
26848255
CHINA COAL ENE-A
6.86
2.848576
17463912
HANGZHOU HIKVI-A
CHINA CONST BA-A
4.9
1.871102
33193850
HENAN SHUAN-A
CHINA COSCO HO-A
3.33
1.215805
9475919
HONG YUAN SEC-A
CHINA EAST AIR-A
3.05
1.328904
21043876
HUATAI SECURIT-A
9.95
1.530612
36550813
YANTAI WANHUA-A
18.47
1.59516
14261073
CHINA EVERBRIG-A
3.18
0.952381
91393442
HUAXIA BANK CO
10.86
0.4625347
49385048
YANZHOU COAL-A
15.12
5.072967
15859416
CHINA INTL MAR-A
12.52
3.728252
12016279
IND & COMM BK-A
4.16
1.711491
69448437
YUNNAN BAIYAO-A
88.5
0.7055075
1704881
CHINA LIFE INS-A
16.78
1.267351
20778174
INDUSTRIAL BAN-A
18.02
-0.496963
110888202
ZHONGJIN GOLD
11.88
0.7633588
25407251
CHINA MERCH BK-A
13.86
-0.07209805
101619270
INDUSTRIAL-A
11.76
0.7712082
26842346
ZIJIN MINING-A
3.07
1.320132
49884079
CHINA MERCHANT-A
12.98
2.365931
43151571
INNER MONG BAO-A
28.49
2.445164
27411707
ZOOMLION HEAVY-A
7.42
1.643836
45410220
CHINA MERCHANT-A
29.03
2.579505
20187928
INNER MONG YIL-A
29.99
0.2339572
15089246
ZTE CORP-A
13.33
1.368821
36832563
CHINA MINSHENG-A
10.48
0.2870813
179853824
INNER MONGOLIA-A
4.85
1.041667
42337083
CHINA NATIONAL-A
11.12
9.990109
67640488
JIANGSU HENGRU-A
32.46
2.819132
7330341
CHINA OILFIELD-A
16.39
3.01697
8049433
JIANGSU YANGHE-A
61.96
2.667771
5029991
CHINA PACIFIC-A
19.21
1.801802
25654978
JIANGXI COPPER-A
21.25
2.85576
12488034
CHINA PETROLEU-A
6.78
1.649175
38856570
JINDUICHENG -A
10.51
1.939864
10120755
CHINA RAILWAY-A
5.33
1.330798
44596983
KANGMEI PHARMA-A
17
-0.4100762
36637135
CHINA RAILWAY-A
2.91
1.393728
39635154
KWEICHOW MOUTA-A
195.91
0.5440082
3355672
CHINA SHENHUA-A
21.15
2.520601
20117719
LUZHOU LAOJIAO-A
26.2
1.550388
10417560
CHINA SHIPBUIL-A
4.52
0
59982923
METALLURGICAL-A
2.06
0.9803922
37763662
22.16
4.33145
23897399
2.46
0.8196721
14271908
CHINA SOUTHERN-A
3.46
1.466276
24398237
NARI TECHNOLOG-A
CHINA STATE -A
3.88
2.917772
177293566
NINGBO PORT CO-A
3.71
0.5420054
102830853
PETROCHINA CO-A
8.59
0.9400705
24250008
CHINA VANKE CO-A
12.16
3.931624
151364129
PING AN BANK-A
20.39
0.3938946
59580700
CHINA YANGTZE-A
7.57
1.338688
20522438
PRICE DAY %
Volume
CHINA UNITED-A
PING AN INSURA-A
40.45
1.480181
33990636
NAME
PRICE DAY %
Volume
MOVERS 267
21
12 2600
INDEX 2592.048 HIGH
2596.63
LOW
2488.63
52W (H) 2791.303 (L) 2102.135
2480
15-May
17-May
FTSE Taiwan 50 Index NAME ACER INC ADVANCED SEMICON ASIA CEMENT CORP
NAME
PRICE DAY %
24.55
1.656315
18985008
FORMOSA PLASTIC
73.6
-1.340483
3753949
TAIWAN MOBILE CO
26
1.167315
18467735
FOXCONN TECHNOLO
80.5 -0.9840098
4500503
TPK HOLDING CO L
37.9
0
2758960
FUBON FINANCIAL
42.75 -0.9269988
13257904
TSMC UNI-PRESIDENT
ASUSTEK COMPUTER
353
1.729107
3545228
HON HAI PRECISIO
77.6
-1.397713
70901721
AU OPTRONICS COR
13.5
-1.459854
68470063
HOTAI MOTOR CO
308
1.315789
317822
CATCHER TECH
163
0.9287926
19180446
HTC CORP
285
-1.724138
13059745
CATHAY FINANCIAL
40.6
-1.694915
16762875
HUA NAN FINANCIA
17.5
0
3702719
YULON MOTOR CO
CHANG HWA BANK
17.45
0
4988005
LARGAN PRECISION
949 -0.8359457
1664896
CHENG SHIN RUBBE
93.4
-1.787592
8333514
LITE-ON TECHNOLO
49.4
1.125896
9375577
CHIMEI INNOLUX C
20.1
0.7518797
62086208
MEDIATEK INC
379
1.336898
9466982
CHINA DEVELOPMEN
8.81
-2.111111
105078058
MEGA FINANCIAL H
24.2 -0.4115226
19435011
CHINA STEEL CORP
26.2
0.1912046
9493440
NAN YA PLASTICS
64.6 -0.4622496
6556767
CHINATRUST FINAN
18.55
0.2702703
30362327
PRESIDENT CHAIN
193
-1.530612
CHUNGHWA TELECOM
718664
97.5
0
6964819
QUANTA COMPUTER
64.2
0.3125
8006788
18.45
0.8196721
21601316
SILICONWARE PREC
35.5 -0.8379888
11093540
DELTA ELECT INC
147
-1.010101
3134478
SINOPAC FINANCIA
15.1
-0.330033
9302153
FAR EASTERN NEW
32.6
-1.659125
3267171
SYNNEX TECH INTL
44.2
-5.150215
29615015
FAR EASTONE TELE
75.3
-1.953125
3977626
TAIWAN CEMENT
39.5 -0.5037783
6870204
TAIWAN COOPERATI
COMPAL ELECTRON
18.65
0
10167861
17.3
0
11526727
FORMOSA CHEM & F
FIRST FINANCIAL
74.8
-1.319261
3159019
TAIWAN FERTILIZE
76
0.6622517
6421120
FORMOSA PETROCHE
86
1.057579
2805664
TAIWAN GLASS IND
30
0
601169
Volume
115.5
-1.282051
595
-2.459016
3439185 6101188
113.5
0
19316452
60.1
0.5016722
3728274
UNITED MICROELEC
13.15
-1.498127
74653699
WISTRON CORP
29.45 -0.1694915
YUANTA FINANCIAL
16.35
MOVERS
15
28
7498056
-1.208459
31045937
51.8 -0.5758157
1981379
7 5890
INDEX 5850.29 HIGH
5888.92
LOW
5783.64
52W (H) 5896.71 5780
(L) 4719.96 15-May
17-May
13
May 20, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 63.8
39.0
20.4
63.6 38.8
20.3
63.4 20.2
63.2
38.6
20.1
63.0 Max 38.95
average 38.741
Min 38.45
38.4
Last 38.75
Max 63.6
average 63.45
Min 62.95
62.8
Last 62.95
Max 20.35
average 20.218
Min 20.1
Last 20.3
22.0
41.0
25.0
21.9 40.6
24.9
21.8 24.8
21.7
40.2
24.7
21.6 Max 40.95
average 40.495
Min 39.95
39.8
Last 40.6
Max 21.9
average 21.789
Commodities PRICE
DAY %
YTD %
(H) 52W
95.52
0.378310214
2.171355225
101.4199982
81.34999847
BRENT CRUDE FUTR Jul13
104.27
0.472152631
-2.923377712
115.9300003
96.04000092
GASOLINE RBOB FUT Jun13
290.15
0.669627368
1.373069667
324.119997
235.9499931
GAS OIL FUT (ICE) Jul13
878.25
0.543789353
-3.515517715
987.5
814
3.939
0.17802645
12.28620296
4.457000256
3.203999996
292.52
0.567263726
-2.739726027
323.8899946
258.589983
Gold Spot $/Oz
1381.53
0.5166
-16.9983
1796.08
1322.06
Silver Spot $/Oz
22.5913
1.6596
-24.9708
35.365
22.0713
Platinum Spot $/Oz
1478.54
0.5126
-2.5834
1742.8
1374.55
Palladium Spot $/Oz
735.75
2.0033
5.1582
786.5
553.75
1852
0.679532482
-10.66087795
2200.199951
1809 6762.25
HEATING OIL FUTR Jun13
LME ALUMINUM 3MO ($) LME COPPER 3MO ($) LME ZINC
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul13
7280
1.139205335
-8.208296558
8422
1832.5
0.521119035
-11.89903846
2230
1745
14900
-0.03354579
-12.66119578
18920
14609 14.79500103
COUNTRY MAJOR
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
15.27
-0.065445026
-3.01683074
17.07500076
643.75
0.350740452
-7.673001076
824
534
WHEAT FUTURE(CBT) Jul13
685.75
-0.290803344
-13.60629921
900
664.75
SOYBEAN FUTURE Jul13
1437.5
0.700525394
3.028131159
1605.75
1217.75
COFFEE 'C' FUTURE Jul13
140.85
0.715051841
-5.817452357
202.1999969
132.6999969
NAME
16.80999947
ARISTOCRAT LEISU
69.94999695
CROWN LTD
CORN FUTURE
Jul13
SUGAR #11 (WORLD) Jul13
16.98
COTTON NO.2 FUTR Jul13
86.09
0.891265597 0.069743113
-13.98176292 11.99427605
23.05999947 94.19999695
World Stock Markets - Indices NAME
21.5
Last 21.55
(L) 52W
WTI CRUDE FUTURE Jun13
NATURAL GAS FUTR Jun13
METALS
Min 21.55
Max 25
average 24.795
Min 24.6
Last 24.8
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
15233.22
-0.2780234
16.24739
15302.49
12035.08984
NASDAQ COMPOSITE INDEX
US
3465.243
-0.1835745
14.76162
3485.955
2726.68
FTSE 100 INDEX
GB
6701.05
0.198122
13.61929
6714.48
DAX INDEX
GE
8386.41
0.1976136
10.1679
8401.28
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
0.9759 1.5241 0.9645 1.2883 102.43 7.996 7.7639 6.1412 54.865 29.76 1.2538 29.971 41.195 9757 99.962 1.24241 0.84528 7.899 10.3012 131.96 1.0299
-0.459 0.1972 0.2799 0.1321 0.2343 0 -0.0064 0.127 -0.1458 0.1008 -0.0638 -0.0868 0.2185 -0.0512 0.6883 0.1545 0.0639 0.0443 -0.1262 0.0985 0.0097
-5.9645 -5.7802 -5.0907 -2.3275 -15.9426 -0.1601 -0.1713 1.4557 0.2369 2.7554 -2.5841 -3.1297 -0.4612 0.369 -10.639 -2.8115 -3.5326 4.0322 2.225 -13.936 0
1.0625 1.6381 0.9972 1.3711 102.76 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 132.77 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 9301 74.482 1.20054 0.77553 7.7018 9.6245 94.12 1.029
Macau Related Stocks PRICE
DAY %
YTD %
(H) 52W
(L) 52W
4.1
-2.147971
30.15873
4.37
2.29
VOLUME CRNCY 2058477
13.35
-1.111111
25.11715
13.75
8.06
852069
AMAX HOLDINGS LT
0.81
1.25
-42.14286
1.72
0.75
418000
BOC HONG KONG HO
27.5
-0.9009009
14.10788
28
20.85
10321987
CENTURY LEGEND
0.31
-3.125
16.98114
0.42
0.215
244000
CHEUK NANG HLDGS
5.86
1.034483
-2.17028
6.74
2.8
85419
CHINA OVERSEAS
22.85
-0.4357298
-1.082253
25.6
14.624
20400491
CHINESE ESTATES
13.88
0
14.43253
13.92
7.697
353000
CHOW TAI FOOK JE
9.88
-2.178218
-20.57878
13.4
8.4
6177775
EMPEROR ENTERTAI
2.4
0
26.98413
2.49
1.12
1952500
FUTURE BRIGHT
2.4
0.41841
98.01553
2.732
0.765
2004000
GALAXY ENTERTAIN
38.75
0.6493506
27.6771
39.15
16.94
9692673
5229.76
HANG SENG BK
130.2
0.462963
9.688293
131.5
99.2
1150439
5914.43
HOPEWELL HLDGS
29.95
0.3350084
-9.924812
35.3
19.049
1236441
HSBC HLDGS PLC
88.8
0.9664582
9.225088
88.9
59.8
21334623 7445000
NIKKEI 225
JN
15138.12
0.6708678
45.62635
15157.32031
8238.96
HANG SENG INDEX
HK
23082.68
0.1668096
1.87916
23944.74
18056.4
CSI 300 INDEX
CH
2592.048
1.541069
2.738704
2791.303
2102.135
HUTCHISON TELE H
4.6
3.139013
29.21349
4.66
2.98
LUK FOOK HLDGS I
20.4
-2.392344
-16.39344
30.05
14.7
1586000
MELCO INTL DEVEL
16.82
-1.752336
86.68146
18.18
5.12
12299700 4539929
TAIWAN TAIEX INDEX
TA
8368.19
-0.2605467
8.684855
8414.88
6857.35
MGM CHINA HOLDIN
20.3
-0.2457002
52.88125
20.4
9.509
KOSPI INDEX
SK
1986.81
0.7888356
-0.5127558
2042.48
1758.99
MIDLAND HOLDINGS
3.47
-1.139601
-6.216217
5
3.249
3452000
S&P/ASX 200 INDEX
AU
5180.774
0.292586
11.43965
5249.6
3985
NEPTUNE GROUP
0.169
-1.169591
11.18421
0.226
0.084
21000000
ID
5145.683
1.319339
19.20445
5162.381
3635.283
NEW WORLD DEV
13.42
-0.8862629
11.64725
15.12
7.95
10197078
FTSE Bursa Malaysia KLCI
MA
1769.16
0.138109
4.74911
1826.22
1526.6
SANDS CHINA LTD
40.6
0.3708282
19.58763
43.7
20.65
9986187
SHUN HO RESOURCE
1.5
-1.315789
7.142859
1.67
1.03
0
NZX ALL INDEX
NZ
981.825
-0.9189338
11.31134
998.487
755.149
SHUN TAK HOLDING
4.14
0.729927
-1.193319
4.65
2.56
1436755
PHILIPPINES ALL SHARE IX
PH
4496.21
-0.3603348
21.5527
4571.4
3244.8
SJM HOLDINGS LTD
21.55
-4.222222
19.72222
22.7
12.34
40683976
SMARTONE TELECOM
13.94
-0.1432665
-0.9943176
17.38
12.5
2340212
WYNN MACAU LTD
24.8
-0.2012072
18.37708
25.3
14.62
6245569
ASIA ENTERTAINME
4.1
0.9852217
33.98693
5.1999
2.4
232735
BALLY TECHNOLOGI
52.52
-1.352367
17.46813
54.92
41.74
493616
JAKARTA COMPOSITE INDEX
24.6
Currency Exchange Rates
NAME ENERGY
20.0
HSBC Dragon 300 Index Singapor
SI
664.07
0.1
6.92
NA
NA
STOCK EXCH OF THAI INDEX
TH
1627.96
0.6224156
16.95702
1635.42
1099.15
HO CHI MINH STOCK INDEX
VN
487.6
-0.5587959
17.85464
518.46
372.39
Laos Composite Index
LO
1366.28
-0.7388572
12.47232
1455.82
980.83
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
BOC HONG KONG HO
3.6
0
17.26385
3.6
2.7
1662
GALAXY ENTERTAIN
5
0.4016064
25.94458
5.05
2.25
17950
INTL GAME TECH
18.02
0.1667593
27.17008
18.18
10.92
3367845
JONES LANG LASAL
96.99
-0.133855
15.54682
101.46
61.39
435660
LAS VEGAS SANDS
58.43
-1.781812
26.58146
59.97
32.6127
4770015
MELCO CROWN-ADR
24.07
-1.755102
42.93349
25.15
9.13
2781067
MGM CHINA HOLDIN
2.65
2.713178
43.24324
2.65
1.36
10000
MGM RESORTS INTE
15.44
-2.648172
32.64604
15.95
8.83
13440170
SHFL ENTERTAINME
16.65
1.52439
14.82759
17.2199
11.75
421319
SJM HOLDINGS LTD
2.9
3.571429
25.54113
2.99
1.65
35500
139.76
-1.674406
24.24216
142.65
84.4902
1328404
WYNN RESORTS LTD
AUD HKD
USD
14
May 20, 2013
Opinion
The importance of Doing Business Ana Palacio
T
Former Spanish foreign minister and former Senior Vice President of the World Bank, is a member of the Spanish Council of State
his month, an independent review panel is expected to release its findings regarding the World Bank’s Doing Business report. Speculation abounds that the panel might recommend outsourcing Doing Business, removing its rankings of countries for the ease of doing business in them, or even eliminating the report altogether. This challenge is not a new one, as powerful World Bank shareholders have been trying to sink the project since its inception in 2002. Now China, the world’s second-largest economy and increasingly influential within the Bank, is seeking to water down the report by eliminating, among other things, its country rankings. (This year, Doing Business ranked China 91st out of the 185 national economies it examined.) But gutting or cutting Doing Business would be a grave error and would essentially result in throwing a healthy baby out with the bathwater. Its methodology is largely sound, its purposes are valid, and its findings are useful. The 2013 report includes quantitative data grouped in 11 sets of indicators, ranging from the ease of starting a business to the availability of credit. The data are compared across economies and over time to rank 185 countries in ten categories of business regulation, such as “Resolving Insolvency” and
“Trading Across Borders.” Input from respondents around the world – more than 9,600 this year – influences the report’s conclusions. Doing Business is not intended to be a comprehensive review of each country’s economy. Rather, it seeks to provide policymakers with benchmarks that can serve as a starting point for discussion of beneficial reforms. In fact, the report’s simplicity is the key to its effectiveness. Doing Business has been a leader in synthesising subjective and quantitative data to create understandable metrics. By limiting the total number of indicators studied and producing clear benchmarks, it helps policymakers to define their objectives and to improve the efficiency of regulation in crucial areas.
Breaking barriers Moreover, Doing Business helps to break down barriers – particularly in developing countries – that can discourage the establishment of small and medium-size enterprises, provide opportunities for corruption, and drive small business owners to the informal sector. For example, the data that Doing Business provides can help to generate the political will and public support needed to overcome opposition to competition-boosting measures from entrenched
actors that have an interest in maintaining high entry barriers or procedural bottlenecks. The project has been a rare World Bank success, recording almost 2,000 reforms over the past decade, and has proved to be a valuable tool for policymakers in developing economies to spur reform and enhance investment. Rwanda, for example, has skyrocketed in the rankings, from 143rd in 2009 to 52nd in 2013. Similarly, as Georgia has climbed to ninth in the
Given that the project’s methodological flaws can be addressed with targeted review and reform, doing away with Doing Business altogether would be extreme and unnecessary
rankings, its GDP has risen by more than 200 percent and foreign investment inflows have increased by nearly 300 percent since 2003. Of all of the economies included in the report, only Zimbabwe and Venezuela have failed to maintain or improve their indicators since 2005. But such success stories have not deterred the project’s critics. Early criticism came from France, which vigorously objected to the 2004 and 2006 editions’ endorsement of the “legal origins” theory, which suggests that common-law countries benefit from greater regulatory efficiency than civillaw countries. China, like France in the past, objects to the perceived Anglo-American bias of Doing Business. Others criticise the report’s methodology, claiming that the indicators are not inclusive or that they improperly measure countries’ regulatory environments. Still others have argued that Doing Business contains builtin biases against regulation and taxation, which may create incentives for countries to enact reforms that game the system rather than produce meaningful results.
Credible data To be sure, not all of these objections are without merit; there is certainly room for methodological improvement. That is why Doing Business
adjusts its indicators every year based on feedback and review. For example, following criticism of the “Employing Workers” indicator, the International Finance Corporation (the World Bank’s private-sector lending arm) conducted a review and removed it as a contributing factor to the rankings. A similar review should be carried out on other indicators, such as “Paying Taxes,” with any changes tailored to enable continued comparison across time, one of the project’s main benefits. Given that the project’s methodological flaws can be addressed with targeted review and reform, doing away with Doing Business altogether would be extreme and unnecessary. Countries like France, China, and India, dissatisfied with their low rankings, should not be allowed to eliminate or cripple the project. Indeed, outsourcing or cutting Doing Business could damage the World Bank’s standing. Just last month, U.S. Treasury Secretary Jack Lew trumpeted Doing Business in congressional testimony justifying American support for multilateral development banks. More broadly, backing away from such a project would undermine the Bank’s promotion of rule-based systems and legal certainty – and would weaken the reformers in developing and emerging economies who seek to transform clientilist and patronage-based economies. Finally, while Doing Business focuses on helping the poorest countries to improve their economic performance, it also influences advanced-country policymaking and business practices. If the project is eliminated, European policymakers will be denied important information that could help to guide discussions about enhancing competitiveness. For example, registering property in Greece is more difficult than in Djibouti; enforcing a contract in Italy takes roughly three times as long as it does in Vietnam; and starting a business in Spain takes roughly 3.5 times longer than in Azerbaijan. Doing Business does not provide policy solutions. But it does provide a rigorous, credible framework for policy debate – and thus an opportunity that no economy can afford to lose. © 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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May 20, 2013
Opinion Business
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Leading reports from Asia’s best business newspapers
Korea Herald South Korea’s president Park Geun-hye called for the government to achieve a fiscal balance within her five-year term, stressing the need to promote efficient yet sound fiscal spending and management. Ms Park said the government needs to make fiscal reforms by first redesigning its spending so that the government can bring the national debt ratio under the mid-30 percent level of the gross domestic product. The nation’s debt-to-GDP ratio reached 34.8 percent in 2012.
Asahi Shimbun Japan’s Diet passed a 92.6 trillion-yen (US$926 billion) budget plan for fiscal 2013 last week that will further bloat the government’s debt and fuel doubts over its promises of fiscal soundness. Under the initial budget plan, which passed without the support of the Upper House, the government will issue about 43 trillion yen in new bonds, bringing the total government debt to more than 1,000 trillion yen by the end of fiscal 2013.
Jakarta Post Indonesia’s government will this year loosen the criteria for foreign investors to enjoy tax incentives and open new areas of investment in a bid to attract more ventures and sustain growth in the economy. The government would amend rules on tax incentives and tax allowance and revise the current negative investment list, last amended in 2010, said Coordinating Economic Minister Hatta Rajasa. This revision aims to make Indonesia more investorfriendly and will be introduced in the second half of this year.
Inquirer Business After consolidating power during the recent mid-term elections, now is the time for President Aquino to “sink his teeth” into substantial reforms to raise the productivity and efficiency of the economy, according to a research report by HSBC Holdings Plc. HSBC said the outcome of the recent elections raised expectations that the president would push forward with its reforms. “Raising public investment, loosening of FDI restrictions on foreign ownership and improving the business environment are all required reforms to address the economy’s structural weakness,” said the report.
Three Asian democracies, one lame-duck problem William Pesek
Bloomberg View columnist
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oters in the Philippines appear to have delivered a resounding victory to President Benigno Aquino in mid-term elections. The son of former President Corazon Aquino looks set to control both houses of Congress, giving him a mandate to continue his reform policies. His biggest worry now is making them stick. In the first half of his six-year term, Aquino arrested his predecessor on corruption charges, faced down the business lobby to pass revenue-raising taxes on cigarettes and liquor, and challenged the powerful Catholic Church by providing free contraceptives to slow population growth. His payoff: investment-grade credit scores for the first time, the support of almost three-quarters of the electorate and even a place on Time magazine’s list of 100 most influential people. It may seem odd, then, that with three years left in his term, some pundits are already calling Aquino a lame duck. Rivals know the president can’t run again; all that Aquino has accomplished could easily be undone by a successor more interested in self-enrichment than good governance. He not only needs to push forward with his reforms now, while he has a popular tailwind, but also must make sure that his foes can’t easily roll them back once he’s gone.
Fragile trajectories Several nations that used to be among Asia’s most troubled are about to confront similar end-of-tenure dramas. Take Indonesia and Myanmar, where former generals have presided over incredible transitions to democracy. In both geopolitically vital nations, the trajectory remains fragile and uncertain. Gains could easily be reversed by corrupt or simply ineffective successors. In Jakarta, President Susilo Bambang Yudhoyono has righted a nation that many feared would collapse into post-Soviet-style chaos after the fall of former dictator Suharto. Taking over in 2004 after a string of ineffectual post-crisis leaders, Yudhoyono surrounded himself with competent deputies, modernised the economy, reduced terrorism, rolled back the military’s role in society and attacked epic levels of corruption. Yet Yudhoyono, who must step down next year, has only just introduced a plan to spend US$125 billion on infrastructure by 2025. The opportunities for corruption are immense – almost an invitation
for a successor to return to the days of crony capitalism. The challenge in Myanmar is somewhat different. Former general Thein Sein has presided over a stunning transformation in just the last two years, opening up a country that was once almost as closed as North Korea. Now, Ford Motor Co. is establishing showrooms in Yangon and companies are angling for a piece of Myanmar’s 64 millionperson consumer market. The Davos set will gather in the capital Naypyidaw next month for a summit heralding Myanmar’s re-entry into the global economy. Yet Thein Sein has said he won’t run in presidential elections scheduled for 2015.
Focusing too much on individual personalities has traditionally been part of the problem in Asia
Instead the charismatic Aung San Suu Kyi, whom the former general freed from her long house arrest, may seek the presidency. She’s almost certain to win if she does. No one knows how the Nobel laureate will do as a national leader. There’s broad recognition that Myanmar’s military must work for the country, not the other way around. But will the generals take marching orders from their one-time political prisoner? Moves to further liberalise basic freedoms – not to mention to open up the economy – could well provoke stiffer resistance if they come from Suu Kyi than from one of their own.
People power All of these Asian leaders face the same problem: how to ensure that reforms outlive their tenure. One way is to leverage their popularity, as Aquino has done. If voters are sold on the benefits to be had from a more efficient economy, they will police the government at the ballot box. Just as important is forging a consensus among business leaders in favour of economic and political progress and creating independent judiciaries and other institutions. At the same time, focusing too much on individual
personalities has traditionally been part of the problem in Asia. Current leaders need to groom a crop of potential successors who share their ideals and integrity. That means remaking political parties, too, so that they’re not personal vehicles but truly meritocratic organisations. The allies that Aquino helped elect to the Philippines Senate are considered serious, reformist lawmakers, not yes men. They’ll be judged less on their personal loyalty to Aquino than their ability to sustain progressive policies. These are, in one sense, enviable problems to face. In the past Asian voters had to worry far more about how to get rid of wayward leaders, whether dictators like Suharto in Indonesia, entrenched and overly dominant parties like the Liberal Democratic Party in Japan, or allegedly corrupt executives like Aquino’s predecessor Gloria Arroyo in the Philippines. The fact that many countries are now fretting about losing good leaders is a sign of maturity. The next step is to detach these issues from individuals and to cement the constituency for change across the population. That’s the campaign these lame ducks need to wage next. Bloomberg View
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May 20, 2013
Closing SAC cuts down on U.S. probe cooperation Yahoo said to discuss acquiring Tumblr SAC Capital Advisors LP, in a sign it’s bracing for new developments in the federal insider-trading investigation of the US$15 billion hedge-fund firm, told clients it will no longer cooperate unconditionally with the government. SAC, in a letter sent to investors, said for reasons of confidentially there would be limited disclosure on the progress of the civil and criminal probes. The firm, run by billionaire Steven Cohen, expects “substantially more clarity” in coming months. SAC reached a US$602 million settlement in March over claims it profited from illegal tips about a drug trial.
Yahoo! Inc. is in talks to buy Tumblr Inc, a service that hosts 108 million blogs, a person with knowledge of the matter said, a deal that could help the biggest United States web portal lure users and advertisers. Tumblr, founded in 2007 by entrepreneur David Karp, has contacted bigger technology companies seeking to be bought, or form a partnership, according to sources. Under chief executive officer Marissa Mayer, Yahoo has been adding features designed to win back users who have fled the Web portal in favor of competing sites.
More must be done to spur Britain’s recovery: King UK’s economic growth may accelerate to 0.5 percent this quarter
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ank of England governor Mervyn King said he is not satisfied with the pace of the United Kingdom’s recovery and that more needs to be done to boost growth. “It’s only a modest recovery, and we certainly can’t be satisfied with it,” Mr King said in a television interview with Sky News, aired yesterday. “We will need to do more to use up the spare capacity, and to get back to a healthy, growing economy.” Mr King’s comments came after the
Bank of England upgraded its United Kingdom’s growth assessment at its May 15 quarterly inflation report. The economy may accelerate to 0.5 percent this quarter from 0.3 percent in the first three months of the year, the report said, also raising projections for the next three years. That followed the Monetary Policy Committee’s decision to leave its bond-purchase program unchanged at 375 billion pounds (US$571 billion) at its May meeting. Mr King is due to retire in July and will be replaced by current Bank of Canada governor Mark Carney. The outgoing Bank of England governor also told Sky News the government’s program to give taxpayer support to United Kingdom homebuyers would have to be phased out in the long run. “This scheme is a little too close for comfort to a general scheme to guarantee mortgages,” Mr King said. “We do not want what the United States have, which is a governmentguaranteed mortgage market, and they are desperately trying to find a way out of that position. So, we mustn’t let this scheme turn into a permanent scheme.” Bloomberg News
Bank of England governor Mervyn King is due to retire in July
Bundesbank chief says France must take deficit cuts seriously Credibility on new euro zone rules in danger, says Jens Weidmann
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rance has a special responsibility as a euro zone heavyweight to take deficit reduction rules seriously, even though its budget deficit is above target, Bundesbank president Jens Weidmann said in an interview published yesterday. Mr Weidmann told the Bild am Sonntag newspaper that the credibility of the new euro zone rules would be hurt if their flexibility were pushed to the limit right at the start. “The economic developments in some countries have indeed been weaker than expected and the European rules offer in such cases a certain amount of flexibility,” Mr Weidmann said when asked about Italy, France and Slovenia getting more time to fulfill the stability criteria. “France, but also Germany, have a special responsibility, as heavyweights in the euro zone, to take seriously the new deficit reduction
rules created last year to reduce budget deficits.” Mr Weidmann noted that France’s budget deficit was still “far above 3 percent.” “The credibility of the new rules certainly won’t be enhanced if one were to exhaust and use up to a maximum the flexibility right at the start,” Mr Weidmann told the newspaper. “We definitely cannot allow the expectation to rise that at the end of the day the monetary policy will be able to resolve the problems.” The European Commission decided last week to give France two more years to slash its deficit to below 3 percent of gross domestic product because of the country’s poor economic outlook within the recession-hit euro zone. German Finance minister Wolfgang Schaeuble praised France’s reform efforts and said the decision to give France an additional two years
to cut its deficit was “acceptable,” German regional newspaper Rheinische Post said. “If a worsened situation means it is
appropriate to extend the deadline to cut deficit to a maximum of 3 percent, that is acceptable,” Mr Schaeuble said, according to the paper. Mr Schaeuble said the French government knew what it had to do and added that France was “on the right track.” “On some points it will perhaps take longer than elsewhere,” he said, adding it should not, however, be forgotten that France’s economic structure was different from those of other countries like Germany.
Bundesbank president says new rules offer enough flexibility
Reuters