1
MOP 6.00
April 19, 2013
Vitor Quintã
Inflation cuts construction workers’ buying power
Deputy editor-in-chief
Private hospital got 10 pct of govt health budget
www.macaubusinessdaily.com
Year II
Number 275
Friday May 3, 2013
Attractive dealing salaries lure low-income women
Editor-in-chief Tiago Azevedo
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Page 7
Labour Day brought uneven retail sales S
ouvenir sellers and restaurants saw at least 10 percent year-on-year sales growth during the Labour Day holiday enjoyed by mainland Chinese visitors, sector representatives told Business Daily. The spring break – dubbed by locals as ‘Little Golden Week’ – lasted from April 29 to May 1. The boss of Koi Kei Bakery reported to Business Daily
“a 15 percent growth” in Little Golden Week business. A total 549,000 people were recorded entering and exiting Macau during the spring break according to the Public Security Police. Of those, 383,000 were tourists. The total number of travellers rose 9.35 percent yearon-year during the period said PSP. More on page 3
I SSN 2226-8294
Hang Seng Index 22700
22676
22652
22628
22604
22580
May 2
HSI - Movers
Air Macau hit by China crackdown and H7N9
Name
Beijing’s anti-corruption measures and the H7N9 bird ‘flu outbreak have dampened Air Macau Co Ltd’s performance, particularly last month, said chairman Zheng Yan. “This year our goal is to further boost profits but we have already felt the pinch, particularly in the first quarter,” the chairman of the city’s sole flagship carrier said. “We have been affected by the H7N9 [outbreak], especially in the eastern mainland market, and the increased efforts from the [central] government against corruption and money laundering,” Mr Zheng told reporters after a shareholder meeting. He added the airline had launched its first new service of 2013 – to Da Nang, Vietnam – on Monday. Page 2
%Day
TENCENT HOLDINGS
2.70
HANG LUNG PROPER
1.82
WHARF HLDG
1.52
CHINA OVERSEAS
1.05
HSBC HLDGS PLC
0.77
CNOOC LTD
-2.21
CHINA MERCHANT
-2.44
LENOVO GROUP LTD
-2.68
BANK EAST ASIA
-2.82
TINGYI HLDG CO
-3.73
Source: Bloomberg
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April casino revenue up 13.2 pct y-o-y
New gaming zone at Sands Cotai Central
Gaming revenue grew by 13.2 percent year-on-year in April, and by 14.4 percent year-on-year for the first four months of 2013. The final April tally for Macau released by the government yesterday was for 28.3 billion patacas (US$3.54 billion) – equivalent to 943.5 million patacas per day. In the first quarter Macau generated more revenue than the state of Nevada in the United States did in all of 2012. Page 4
Sands China Ltd is to develop a 40,000 square feet (3,716 sq. metre) area of Sands Cotai Central previously earmarked for a theatre and use it for gaming. The new area is likely to open within 12 months said Sheldon Adelson, the LVS chairman. It will be populated by around 100 tables, he added. In January the government confirmed Sands would get 200 new tables this year. Page 5
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May 3, 2013
Macau
Political omens, bird ‘flu clip Air Macau’s wings April was a slow month for Air Macau but its chairman hopes it will make more profit this year Tony Lai
tony.lai@macaubusinessdaily.com
S
igns that the central government may crack down on corruption and the outbreak of the H7N9 bird ‘flu virus in mainland China have hampered Air Macau Co Ltd’s performance, especially last month, according to the airline’s chairman, Zheng Yan. “This year our goal is to further boost profits, but we have already felt the pinch, particularly in the first quarter,” Mr Zheng told reporters yesterday after a meeting of the flag carrier’s shareholders. “We have been affected by H7N9, especially in the eastern mainland market, and the increased efforts by the central government against corruption and money laundering,” he said. The H7N9 virus, first found in humans in Shanghai at the end of March, is spreading to southern China. By Wednesday it had infected 128 people and killed 24. But Mr Zheng said bird ‘flu was not “a significantly big” problem for Air Macau. The airline was even making plans to fly to Shanghai twice a day instead
the mainland, the authorities there “have imposed visa limitations on some passengers flying to Macau”, Mr Zheng said. “So this has had some impact on our operations, particularly in April,” he said. “There is no problem for normal Zheng Yan, Air Macau chairman passengers travelling here, but only for some people.” Mr Zheng declined to elaborate. But he added: “There of once, he said. Since becoming head will be no big problem for of the Chinese Communist profits.” Party in November and president of China in March, Boarding now Xi Jinping has vowed to tackle official corruption. Air Macau’s annual profit The appointment of Li rose by 11.4 percent last year Gang – an official with a to a record 279.8 million reputation for toughness – as patacas (US$35 million). head of the Liaison Office The airline’s revenue rose of the Central People’s by 19 percent to 3.03 billion Government here is seen as a patacas. sign of that measures against Mr Zheng said the money laundering may be improvement in the airline’s tightened, the Reuters news results was due to more agency reported this week. flights and more passengers. In a further sign The number of flights Air t h a t a c r a c k d o w n o n Macau put on rose by 12 corruption is looming in percent last year to 16,309
There is no problem for normal passengers travelling here, but only for some people
Corporate
Addams Family creeping in After grossing over US$62 million (500 million patacas) during a two-year stint in Broadway, ‘The Addams Family’ musical is coming to Macau this summer. For the very first time in Asia, ‘The Addams Family’ will tour Singapore, Guangzhou and Macau over a two month period, before resuming their schedule in the United States. The Broadway musical will stay at the Macau Cultural Centre’s Grand Auditorium during a 12 show-run from August 23 through September 5. Macau will mark the finale of the show’s Asian debut. After a nearly two-year season on the Broadway ‘The Addams Family’ went on tour across North America. Two branch productions were also launched in Rio de Janeiro and Sidney. Tickets will be on sale this Sunday, May 5, at the Cultural Centre’s box office and Kong Seng outlets. The early bird 20-percent discount will last until June 1. ‘The Addams Family’ was originally created for a 1964 cartoon series and later brought to the television screens in numerous adaptations. The series’ characters became popular worldwide when a blockbuster film was released in the 1990s.
Air Macau made a profit of 279.8 million patacas last year, its biggest ever
and the number of passengers it carried rose by 15.8 percent to over 1.61 million. Mainland Chinese made up 59 percent of the airline’s passengers. Mr Zheng said Air Macau continued to concentrate on the mainland market. The airline has now made a profit for the past three years, having made losses in the preceding five years. When the financial crisis of 2008 and 2009 dealt Air Macau a blow, its parent company, state-owned Air China Ltd, put another US$63 million into the airline. Air Macau also sold the Macau government 2 million non-voting redeemable preference shares together worth 200 million patacas. That means Air China owns 66.9 percent of Air Macau and the government 21.5 percent. Air Macau now intends to buy back the preference shares. Mr Zheng said it would buy back 50 million patacas worth of the preference shares each year, beginning this year. “We have got approval from the shareholders,” he said.
Da Nang flights begin Flag carrier Air Macau Co Ltd has begun a new service to Da Nang in Vietnam. The airline’s chairman, Zheng Yan, said yesterday that it would fly to Da Nang three or four times per week, depending on the number of passengers. The first flight departed on Monday. Mr Zheng told reporters that the introduction by Air Macau of further international services would depend on demand. He said direct flights to Russia would be economically unviable at present. The Macau Government Tourist Office is endeavouring this year to entice more Russians and South Koreans to visit Macau. Mr Zheng said Air Macau would introduce more new services to mainland China this year, starting with flights to Zhengzhou, the provincial capital of Henan. This year the airline has already introduced new services to the mainland cities of Shenyang, Wenzhou and Jinjiang. Air Macau will also consider increasing the frequency of its flights to Tokyo, which is now four per week. This is because the passenger load factor on its flights to Tokyo has risen to 68 percent now from 30 percent last year, when political tension between China and Japan deterred travellers. T.L.
3
May 3, 2013
Macau
Labour Day brought uneven sales Three-day holiday for mainlanders helped souvenir sellers and restaurants here, but other shops missed out Stephanie Lai
sw.lai@macaubusinessdaily.com
Shop ‘til you don’t – Little Golden Week had mixed results
S
ouvenir sellers and restaurants saw at least 10 percent year-on-year sales growth during the Labour Day holiday for mainland Chinese visitors, sector representatives told Business Daily. The spring break – dubbed by locals as ‘Little Golden Week’ because of some parallels with the National Day holiday period in October – lasted from April 29 to May 1. The boss of Koi Kei Bakery reported to Business Daily “a 15 percent growth” in spring Golden Week business. He attributed that partly to “our bigger shopping space after renovation since Chinese New Year, and more new products put in line.” But he added: “The client flow is not as good as expected, and the rain during the holiday has somewhat discounted the business.” The firm has 16 outlets in Macau, mostly in the central part of Macau peninsula, including a flagship outlet in San Ma Lou. Association of Pastry and Souvenir Traders president Lam Vai Hong, who runs the chain souvenir shop Cherikoff, said that spending per head at the local biscuit shops was between 200 patacas (US$25) and 100 patacas – little changed from last year. Despite a heavy rain on the peak sales days on April 30 and May 1, souvenir shops in popular tourist destinations still earned at least 20 percent more revenue year-on-year Mr Lam said. “Though the client flow was discounted by the rain on Tuesday and Wednesday, I think the gold rush has helped stimulate the souvenir purchase in here,” he added. The ‘gold rush’ Mr Lam referred to was the influx of gold buyers from the mainland to Hong Kong and Macau since world gold prices registered a decline in mid-April. The height of
the retail rush for gold products was prior to the three-day Labour Day vacation. The United Association of Food and Beverage Merchants of Macao said restaurant business in tourist zones witnessed an annual growth of 11 to 12 percent in revenue during Little Golden Week. The association director Lei U Weng reckoned the traffic brought by the Guangzhou-Zhuhai Intercity Railway has been an important stimulator in the restaurant business during the latest national holiday.
Travellers up A total 549,000 people were recorded entering and exiting Macau during spring Little Golden Week according to the Public Security Police. Of those, 383,000 were tourists. The total number of travellers rose 9.35 percent yearon-year during the period said PSP. However, not all local retailers have benefited from the growth of tourist arrivals. Giordano, the clothing retail chain that has a shop in the popular tourist spot Largo do São Domingos said it had seen fewer visitors and lower revenue compared with the Golden Week last year. “We have seen at least a 10 percent drop in business this Golden Week as the holiday is quite short and the weather was not good,” a Giordano salesperson told Business Daily. “It used to be very packed during national holidays like the Labour Day, but this year it’s not the case. I think the gold rush is not such a stimulator in clothing business,” she added. Swatch, a branded watch retailer in the same district said its business during Little Golden Week is similar to last year.
“Usually the retail revenue will not have a very prominent annual increase during the short Labour Day vacation,” a Swatch
salesperson said, adding that better business performance is usually generated from weekends or longer national holidays.
Inflation cuts construction workers’ buying power In the first quarter the wages of construction workers reached the highest level in two years but the hike was offset by inflation. Figures released by the Statistics and Census Service yesterday show their average daily earnings reached 597 patacas (US$74.6) in the January-March period. That was up by 1.7 percent higher from the previous quarter and 6 percent higher than a year earlier. The average salary of residents was even higher at 699 patacas a day, increasing by 1.6 percent quarterto-quarter. However the wage index of all construction workers went down by 0.6 percent year-on-year in real terms, considering the city’s inflation, to 89 points in the JanuaryMarch period. This means that the purchasing power of construction staff has fallen by about 10 percent in the past two years. The bureau said this was mainly due to “the falling wage indices
The purchasing power of construction staff has fallen 10 percent in just two years
of painters and bricklayers and plasterers”. Painters were paid an average of 522 patacas a day in the first three months of this year, plunging by 10.5 percent from the previous quarter. Wages for most other types of construction jobs also suffered declines. For instance the average earning of ironworkers – the highest-paid workers – went down slightly by 0.2 percent quarter-to-quarter to 650 patacas. Electricians were one of the few exceptions as they were paid 5 percent more than in the previous quarter, 613 patacas a day. T.L.
4
May 3, 2013
Macau
April casino revenue up 13.2 pct y-o-y
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HOSPITALITY
Macau venues generated more cash in first four months 2013 than Nevada in whole of 2012
Full recovery The individual visa scheme was created to boost the number of mainland tourists coming to Macau. It offers the opportunity to visit Macau without joining a package tour and was introduced in less economically healthy times. After 2008, the number of tourists arriving on individual visas declined sharply and has been slow to recover. The scheme seemed to be losing some of its punch. But the data for the first quarter of this year suggests the recovery is complete.
Almost 6.6 million tourists arrived on an individual visa in 2008. As the financial crisis deepened, their numbers declined in each quarter of that year, in what has become an uncommon pattern in the years since. Arrivals contracted until the second quarter of 2009, when their number was almost half what it was in the same quarter one year before. There was a onequarter decline in individual visa arrivals in 2009. But the second half of that year showed some signs of a recovery. Only in 2011 did arrivals reach a level similar to 2008. Last year that upward trend had continued and exceeded 2008’s arrivals by 8 percent. The upward trend seems to be steadily continuing with arrivals in the first quarter of this year reaching 1.95 million tourists – the highest number of arrivals in any quarter from the past five years. Should the momentum continue, data from the individual visa scheme may hint at a bumper year for mainland arrivals.
Michael Grimes
michael.grimes@macaubusinessdaily.com
G
aming revenue grew by 13.2 percent year-on-year in April, and by 14.4 percent year-on-year for the first four months of 2013. The final April tally for Macau released by the Gaming Inspection and Coordination Bureau yesterday was for 28.3 billion patacas (US$3.54 billion) – equivalent to 943.5 million patacas per day. It takes 2013’s accumulated tally up to April 30 to 113.59 billion patacas. By the end of the first quarter Macau had generated more revenue than the state of Nevada in the United States – home to the Las Vegas Strip – managed in the whole of 2012 according to data compiled by the Center for Gaming Research at the University of Nevada, Las Vegas. Nevada’s total last year was US$10.9 billion (87.11 billion patacas). Four analysts quoted by Business Daily on Wednesday had estimated Macau’s year-on-year expansion in April at between 12 percent and 15 percent. Union Gaming Research Macau doesn’t publish monthly revenue previews based on unofficial figures. But it forecast in January that the full year would see Macau revenue grow by 16 percent. “With one-third of 2013 behind us, we are maintaining our full year GGR growth estimate of approximately 16 percent that we first established in January,” said the research house in a note yesterday. “This contemplates VIP growth of around 10 percent (as compared to eight percent in 2012) and mass market tables and slots growth of around 30 percent (in line with the previous three years).” On April 24, Macau gaming stocks all gained significantly in
April revenue ‘solid’
Hong Kong trading after Karen Tang, research analyst at Deutsche Bank in Hong Kong, increased to 17 percent the institution’s estimate on Macau market revenue growth for the year. “Junkets said VIP growth has finally returned to double-digit, as they start to extend more credit on [the] back of China’s GDP recovery,” stated Ms Tang at the time. Commenting on the official April revenue figures, Union Gaming said in a note yesterday: “We believe this was broadly in line with investor expectations for yet another solid month. The calendar was slightly less favourable this year with one fewer Sunday.”
J.I.D.
Market Share Per Operator (2012-2013) Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
9.7 %
Increase in mainland tourists arriving on individual visas in Q1, year-on-year
SJM
25% 29% 26% 26% 26% 27% 27% 28% 26% 26% 26% 27% 26%
Sands China 18% 17% 18% 22% 19% 18% 21% 21% 21% 20% 21% 21% 22% Galaxy
21% 20% 23% 19% 21% 18% 19% 16% 18% 19% 19% 18% 18%
Wynn
13% 11% 12% 11% 12% 13% 10% 12% 10% 11% 12% 11% *
MPEL
14% 12% 13% 13% 13% 14% 14% 14% 14% 14% 13% 14% *
MGM
10% 11% 9% 9% 10% 10% 9% 10% 11% 9% 10% 9% *
Total
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
* Not availale Figures are rounded to the nearest unit, therefore they may not add exactly to the rounded total
5
May 3, 2013
Macau
LVS creating new gaming zone Bond sale mulled at Sands Cotai Central for future
LVS dividends, share buybacks
Casino operator using 40,000 sq ft area previously earmarked for a theatre Michael Grimes
michael.grimes@macaubusinessdaily.com
S
ands China Ltd is to develop a 40,000 square feet (3,716 sq. metre) area of Sands Cotai Central previously earmarked for a theatre and use it for gaming. The news was given by the parent company Las Vegas Sands Corp. in the first quarter earnings call on Wednesday, United States time. The new area is likely to open within 12 months said Sheldon Adelson, the LVS chairman. It will be populated by around 100 tables, he said. Some of them may come from the government’s allocation of 200 new-to-market tables for Sands China announced in January. Others will probably come from the reassignment of underperforming tables from other parts of the company’s Macau operation, hinted
Mr Adelson. It’s not clear at this stage to what segments – VIP, premium mass or mass-market – and to what properties – all Sands’ new and reassigned tables will eventually be allocated. But Mr Adelson also hinted during the call that the new gaming area at Sands Cotai Central might target the so-called ‘premium mass’ segment of customers – those betting with cash rather than junket-issued credit, but with minimum bets many times those found on mass tables. “…the premium mass has grown dramatically since we originally planned the property,” he stated. “We got the CapEx [capital expenditure budget] from our board
of directors meeting yesterday and we’re moving it through. And that is going to take about 10 months or so maybe a little more, 10 or 12 months. It will be ready I think next April,” added Mr Adelson. He explained that the reason the conversion of the area couldn’t be done instantly is because it requires some foundation pilings. “…we never put in pilings underneath that space. So we’ve got to get the piling machines [where] we are already building [The Parisian] and then put them to work,” said the LVS chairman. “So there is a lot of potential upside, filling up the [hotel] rooms, getting more mass market, creating the capacity and [in] putting the tables,” he added.
Las Vegas Sands Corp. is considering a bond sale – like that undertaken by Apple Inc. – to pay for a dividend or stock buyback. Board members of the Las Vegasbased company are discussing borrowing rates as they relate to a possible buyback or dividend payment, Sheldon Adelson, the company’s founder and chief executive officer, said on the first quarter earnings conference call. “We have a very positive attitude toward doing this,” Mr Adelson said. “We’re not at the finish line, but we’re in our final stretch.” A dividend or buyback would further his goal of returning cash to investors, according to a person familiar with the matter who said last month the company was considering such a step. Apple sold US$17 billion of bonds on Wednesday in the biggest corporate bond sale ever. Las Vegas Sands finished the first quarter with US$2.38 billion (19.02 billion patacas) in unrestricted cash and total debt of US$9.83 billion, according to a statement yesterday. LVS, the largest U.S.-based casino company, paid US$3.09 billion in dividends last year, including a US$2.75-a-share special payment in December, according to its annual report. Mr Adelson, 79, who owns about 52 percent of LVS stock, collected US$1.62 billion. Bloomberg News
New standalone shopping mall planned by Sands
company’s dominant position on Cotai with significantly more supply (rooms, retail, tables, slots) than its peers – all during a period that should see exceptional growth of the mass-market and slots segment market-wide, but particularly on Cotai,” added the research house. “Over the medium term, we are bullish on The Parisian [new Cotai project] and believe its theme will resonate well with core Chinese mass customers,” said analyst Cameron McKnight of Wells Fargo in a note.
Casino operator Sands China Ltd confirmed it has applied to the Macau government to create a new two million square foot (185,807 sq. metre) shopping mall, just south of Sands Cotai Central, on the east side of The Cotai Strip. “The mall will feature over 900,000 square feet of valueoriented destination shopping and dining, targeted specifically at the mass market visitors to Macau,” stated Sheldon Adelson, chairman of the parent company Las Vegas Sands Corp. during the first quarter earnings call. The facility – likely to be called Tropical Garden – will complement a new shopping mall planned for Sands China’s new US$2.8 billion (22.4 billion patacas), French-themed The Parisian development on Cotai. Mr Adelson said the company hoped to have The Parisian open by “late 2015”. “…the Tropical Garden retail, that standalone mall, the government is very excited about because they want our non-gaming development,” added Mr Adelson. “It’s almost three times the size of the Parisian mall. So we’ll have quite a bit of retail connected without leaving an aircondition space,” he explained.
M.G. with Bloomberg News
M.G.
More gaming space at Sands Cotai Central
Sands China Q1 profit up 63 pct
S
ands China Ltd said firstquarter profit jumped 63 percent as it drew more visitors. Net income for the Hong Kong-listed unit of Las Vegas Sands Corp. rose to US$452.9 million (3.62 billion patacas) from US$277.4 million a year earlier, according to a statement from the parent company. Revenue climbed 39 percent to US$2.02 billion for the three months ended in March. Sands China, alongside rival Galaxy Entertainment Group Ltd, has been expanding on the increasingly popular Cotai Strip.
Sands China saw a record 14 million visits to its Cotai Strip properties in Macau, according to the statement. Adjusted property earnings before interest, taxes, depreciation and amortisation, (property EBITDA), climbed 39 percent to US$626.4 million. That compares with a median estimate of US$632 million from a survey of five analysts compiled by Bloomberg News. “We… expect the company to outgrow its peers over the near-, medium-, and longer-terms,” said Union Gaming Research Macau in a note to clients. “This stems from the
66
May19, 3, 2013 April 2013
Macau Macau Foundation subsidies lowest since 2010
Brought to you by
The Macau Foundation granted 80.55 million patacas (US$10.1 million) in subsidies during the first quarter of 2013, down by 24.1 percent from a year earlier, according a notice published in the Official Gazette yesterday. It was also the foundation’s stingiest period since the third quarter of 2010. The Kiang Wu Charity Association got the biggest subsidy, 8 million patacas, to buy equipment for the Kiang Wu Nursing College’s new facilities at the Macau Daily News building, the city’s main Chinese-language newspaper. The Macau New Technologies Incubator Centre got 7.9 million patacas to support its activities.
Financial Monitor Dual circumstances There are specific conclusions to be drawn from the age and gender of the unemployed. This analysis includes two age groups: under 25 years and over 55 years. Both are important segments for different reasons. The younger group includes people entering the workforce and the older group includes would-be workers who are approaching retirement.
Lucrative casino salaries lure low-income women A gaming industry trade union ponders more places on its vocational training courses to meet demand Tony Lai
tony.lai@macaubusinessdaily.com
M
Breaking down the statistics according to gender reveals that the number of unemployed women will be lower than the corresponding number of men. This is a common pattern because women have a lower participation rate and weaker attachment to the workforce, at all stages of their lives. In both age groups in this analysis, the number of unemployed women is significantly lower than the number of unemployed males. A high number of unemployed young people is another common feature. It takes time for the economy to absorb each year’s school leavers. Their lack of workplace experience puts them at a disadvantage to other workers and they may be offered jobs below their expectations. But few will face a long period of unemployment in Macau. Conversely, for most of those unemployed and aged 55 years and older, the longer their unemployment continues, the harder it will be to find a job. They become candidates for early retirement or often give up searching for a job altogether. They disappear from the unemployment statistics. J.I.D. The content of this column is the work of Business Daily’s journalists.
200
The average number of unemployed women over 55 years
iddle-aged, low-income women are packing the vocational training courses for croupiers arranged by a trade union, unable to resist the lure of the high salaries on offer. The vice-president of the Macau Gaming Industry Workers Association, Leong Sun Iok, said all 180 places on the association’s latest course, set to begin in July, had been taken only 10 minutes after the union began taking applications. “Our office opens at 11am, but when I went to the office at about 8:30am that day there were already many people queuing outside,” Mr Leong said. “Over 95 percent of our course students were females aged 35 or above with low monthly incomes and education qualifications,” he told Business Daily. “They want to work as dealers to have higher salaries and improve their livelihoods.” He said that even the prospect of working in smoking areas of casinos failed to deter them. Mr Leong said many of the students were earning less than 8,000 patacas (US$1,000) per month in their present jobs. Latest official data show that at the end of last year the average monthly pay of croupiers was 15,990 patacas, while in the first quarter the median monthly income of permanent residents was 14,500 patacas. “After taking our courses, over 80 percent – the figure probably reaches 90 percent – of the students can become dealers in casinos,” Mr Leong said. His union, a member of the Macau
All the places on a course for new croupiers were taken in just 10 minutes
Federation of Trade Unions, puts on three-month-long courses for wouldbe croupiers four times per year. The courses cost 4,500 patacas per head. Official data show the number of people employed by the gaming industry was 54,800 at the end of last year, about one-quarter more than at the end of 2008. Several large casino resorts in the Cotai Strip are set to open by 2016 and so increase demand for croupiers.
Mr Leong said his union could increase the number of places on its courses to suit demand, but had no immediate plans to do so. Increasing the number of places could have an adverse consequence, he said. “There may be too many dealers in the market, which could push down their salaries,” he said. “So any decision has to depend how the market pans out in the near future.”
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May 2013 April3,19, 2013
Macau Kiang Wu gets 10 pct of govt health budget But subsidies for the for-profit private hospital decreased last year Vítor Quintã
vitorquinta@macaubusinessdaily.com
O
ne-tenth of the government’s health budget went to the private Kiang Wu Hospital last year, even though the hospital received less in subsidies than it did the year before. The Health Bureau granted 433.9 million patacas (US$54.3 million) in subsidies to the hospital last year, according to yesterday’s Official Gazette – almost 40 percent less than in 2011. But the Kiang Wu Hospital’s subsidies accounted for nearly 10 percent of last year’s health budget of 4.46 billion patacas – and maybe an even bigger percentage. The government frequently overestimates its expenditure. Last year it spent 56.7 billion patacas, just 86.1 percent of the amount it had budgeted. The Kiang Wu Hospital got less in subsidies from the Health Bureau last year even though the bureau gave it a financial shot in the arm of 194.8 million patacas in the fourth quarter, 7.7 percent more than what
the bureau gave it in the fourth quarter of 2011. The hospital spent 94.2 million patacas of the subsidies on consultations for outpatients and treatment of inpatients. The Health Bureau gave the hospital a further 44 million patacas for unspecified investment and development. And the bureau gave the Kiang Wu Nursing College another 14 million patacas. The hospital and its associated bodies also get public money from other sources, such as the Macau Foundation and the Social Welfare Bureau. The hospital is a for-profit subsidiary of the Kiang Wu Charitable Association.
Half the burden The association was once managed by Fernando Chui Sai On, now the chief executive of Macau. It is now run by Fong Chi
The Kiang Wu Hospital is a for-profit subsidiary of a charity
Keong, who is also a Legislative Assembly member representing the business sector. In September Mr Fong said the institution “would not survive without government assistance, as the hospital is surviving on few resources while providing over half of the territory’s medical services”. He said 67 per cent of the hospital’s expenses were covered by income from medical services, and the remaining 33 per cent by what he described as “government purchases”. Mr Fong said criticism of the amount of subsidies the association got was unreasonable, as the money was for the care of the health of Macau people.
Macau has only one public hospital, the Hospital Conde S. Januário. A second was due to open in Cotai next year. But last year the government said the first phase of the new public hospital would be ready only by 2017. In 2009 the government began handing out vouchers that can be used to pay for healthcare given by private clinics, including dental clinics, and by practitioners of Chinese traditional medicine. The value of the vouchers, issued only to permanent residents, will rise in September to 600 patacas from 500 patacas. The government expects to spend 363 million patacas on the healthcare voucher scheme this year.
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May19, 3, 2013 April 2013
Greater China
Taiwan dollar vulnerable to selloff Currency has one of the biggest deviations from normal trading range Andrea Wong, Ye Xie and Yumi Teso
T
he Taiwan dollar, Asia’s second-best performing currency in April, is becoming more vulnerable to a selloff as the nation’s economic recovery loses momentum, trading patterns show. The currency’s 1 percent gain last month pushed an indicator known as the 14-day relative strength index as low as 29, below the 30 threshold that typically signals a reversal, according to data compiled by Bloomberg. China’s yuan is the only other of the 31 major currencies that’s trading in so-called overbought territory. The Bollinger band showed the Taiwan dollar had the biggest deviation from its normal trading range after Israel’s shekel and India’s rupee. Taiwan’s recovery from the slowest economic expansion since 2009 is sputtering as its dollar trades at a four-year high against the yen, making it harder for domestic electronics makers to compete against Japanese rivals. The island’s gross domestic product increased in the first quarter at less than half the pace economists estimated, putting pressure on policy makers to weaken the currency to make exports competitive. “As the economy is weaker than expected, it’s possible the central bank will try to cap the Taiwan dollar’s gains,” Koji Fukaya, chief executive and currency strategist at FPG Securities Co. in Tokyo, said in an interview. “I expect the Taiwan dollar’s appreciation to end in the near term.” Intervention by Taiwan’s central bank has helped push the island’s money-market rates lower, making it
attractive for investors to borrow the local dollar to fund the purchase of higher-yielding assets elsewhere in a strategy known as the carry trade. The Taiwanese dollar snapped four months of declines in April and strengthened the most since September, when it climbed 2.1 percent. The Central Bank of the Republic of China (Taiwan) has sold the local dollar in the run-up to the market close on most days in the past year, according to two traders, who asked not to be identified because they aren’t permitted to speak publicly. Taiwan’s monetary authority will intervene if “irregular
As the economy is weaker than expected, it’s possible the central bank will try to cap the Taiwan dollar’s gains Koji Fukaya, chief executive, FPG Securities Co.
factors,” such as large fund flows, cause “excessive” volatility, it said in a March 28 statement. Global funds poured US$1.1 billion into Taiwanese stocks last month, helping drive the Taiex index to a 13-month high and buoying the local dollar, as the Bank of Japan joined its U.S. and European counterparts in unleashing monetary stimulus. The International Monetary Fund said earlier this week that capital inflows to Asian emerging-market countries are likely to “remain buoyant,” boosting currencies, and urged policy makers to adopt “greater exchange-rate flexibility”. The Taiwan dollar will strengthen less than 0.1 percent to NT$29.6 by the end of June, according to the median estimate of 25 analysts in a Bloomberg survey. It will end the year at NT$29.2, the survey shows. Frances Cheung, a Hong Kongbased strategist at Credit Agricole SA, forecasts Taiwan’s currency will
weaken about 1 percent to NT$29.9 by the end of June as the central bank puts on the brakes to safeguard exports. Overseas sales account for about two thirds of the island’s economy.
Weaker growth Taiwanese GDP rose 1.54 percent in the three months ended March from a year earlier, after increasing 3.72 percent in the fourth quarter, the statistics bureau said on Tuesday. Last year’s 1.3 percent annual growth rate was the slowest since a 1.9 percent contraction in 2009. Overseas demand for the island’s products remains weak. Export orders, indicative of shipments in the next one to three months, slumped 6.6 percent in March from a year earlier, declining for a second straight month. The Taiwan dollar’s 1.3 percent weakening versus its U.S. counterpart this year trailed a 12 percent slump in the yen and a 3.2 percent decline
Manufacturing growth stalling: HSBC Sub-index for new export orders dipped to 48.4
Factory-sector growth easing adds to recovery risk
A
private gauge of Chinese manufacturing declined last month, adding to signs that a growth slowdown will persist in the world’s second-biggest economy. The final April reading of 50.4 for a Purchasing Managers’ Index released yesterday by HSBC
Holdings Plc and Markit Economics compares with 51.6 for March and the preliminary reading of 50.5 given April 23. A number above 50 indicates expansion. The factory-sector growth eased as new export orders fell for the first time this year, suggesting the euro
zone recession and sluggish U.S. demand may be risks to China’s economic recovery. China’s official PMI on Wednesday painted a similar picture, falling to 50.6 in April from an 11-month high of 50.9 in March as new export orders fell. The pull back in both the official and HSBC PMIs are likely to add to concerns over risks to China’s economy in the short term, although most analysts expect a steady and gentle recovery this year, aided by government support. “The slower growth of manufacturing activity in April confirmed a fragile growth recovery of the Chinese economy as external demand deteriorated and renewed destocking pressures built up,” said Qu Hongbin, chief China economist at HSBC. “The looming deflationary pressures also suggest softer overall demand conditions,” he added. “All this is likely to weigh on the labour market, which is likely to invite more policy responses in the coming months.” A string of global data,
including lower-than-expected U.S. economic growth figures and record unemployment in the euro zone, has dented optimism seen at the start of the year that the world economy was picking up.
Sluggish demand China’s economic growth unexpectedly stumbled in the first quarter, slipping to 7.7 percent versus 7.9 percent in the previous three month period, as factory output and investment slowed. Analysts polled by Reuters after the release of first quarter GDP expected China’s economic growth to accelerate to 8.0 percent in the second quarter. They forecast growth for the full-year would rise to 8.0 percent from 7.8 percent in 2012, which was the weakest pace since 1999. The HSBC survey also showed a sub-index for new export orders dipped to 48.4, the first time it has retreated below 50 this year and the lowest level since last October, reinforcing concerns about the strength of the global economy. Overall new orders rose at a slower
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May 2013 April3,19, 2013
Greater China in the South Korean won. The Taiwanese currency climbed to as high as 3.356 yen on April 26, the strongest since September 2008. “Taiwan’s officials have always been watchful of its export competitiveness,” Credit Agricole’s Ms Cheung said. “There’s not much potential for the currency to strengthen further as we’re yet to see a clear trend of improvement in exports and manufacturing.” The Taiwan dollar burst through the lower end of its Bollinger band last week for the first time since January, indicating it may have become too strong to sustain versus the greenback. When that last occurred in January, the currency lost 1.5 percent, the biggest monthly decline since May 2012. Bollinger bands, developed by analyst John Bollinger in the 1980s, are used by technical analysts to identify the turning point of a trend. The lower limit of the band represents two standard deviations from its 20day moving average, which typically means that the likelihood of the currency dropping below the band is about 2.5 percent.
Home prices up for 11th straight month As shortage in home supply persists in major cities
A
verage home prices in China’s 100 biggest cities rose in April from the previous month, the eleventh straight month-onmonth rise, a private survey showed yesterday, raising the risk of further tightening steps despite recent government measures to crack down on speculation. Average home prices in April climbed 1 percent from March to 10,098 yuan (US$1,600) per square metre, said China Real Estate Index System (CREIS), a consultancy tied to China’s largest online property firm, SouFun Holdings Ltd.
The pace, however, moderated from March’s month-on-month gain of 1.1 percent, it said. The survey also showed home prices rose 5.3 percent in April from a year ago, up from March’s 3.9 percent annual rise and marking the fifth consecutive year-on-year increase. Relentlessly rising home prices have sparked concerns that home costs could start to spiral out of control and forced local governments into a fresh round of measures in late March in heed of central government orders. Average home prices in China’s top 10 cities, including Beijing and
Shanghai, rose 1.3 percent in April from March and were up 7.9 percent from a year ago, CREIS said. “There remains upward home price pressure in tier 1 cities and some tier 2 cities as shortages in home supply persist,” it said in a statement. “Looking forward, there are still risks of further tightening policies in cities where home prices are rising too fast.” Still recent cooling measures have shown initial results as home transactions slumped in major cities in April and month-on-month gains of home prices eased slightly, it said. China’s home prices started to rebound in mid-2012 as the central bank began to expand monetary easing as part of Beijing’s growthsupporting policies. The Chinese government is due to publish data on home prices in 70 major Chinese cities for April on May 18. Home prices rose 3.6 percent in March from a year ago for a third consecutive month, the most recent official data showed. Reuters/AFP
Bloomberg News
There’s not much potential for the currency to strengthen further as we’re yet to see a clear trend of improvement in exports and manufacturing Frances Cheung, currency strategist, Credit Agricole SA
clip last month, implying softening demand growth from domestic firms. Reflecting the weakening orders growth and lower material costs, indexes for input and output prices fell in April to the lowest level since last September and August, respectively, the HSBC report showed. “The across-the-board declines in the PMI reports point to soft industrial activity as we enter the second quarter. We maintain our growth forecast of 7.9 percent (2013 annual) which we have held since last December, but see some downside risks,” Barclays Plc said in a note. “The external sector is likely to be a major headwind for Chinese growth in the coming months.” The HSBC survey showed a sub-index measuring employment dropped below 50 in April for the first time in five months, although it said job losses were marginal, partially caused by resignation and retirement. Employment is a decisive factor shaping government thinking because it is crucial for social stability. However, most economists believe China’s labour market is holding up relatively well and Beijing may refrain from a looser monetary stance or stimulus to underpin the economy, as it may tolerate slower growth to make long-delayed reforms. Reuters
The cost of a new home rose by 5.3 percent year-on-year
Alibaba to close US$8 bln loans Alibaba Group Holding Ltd, China’s biggest e-commerce company, closed US$8 billion of new loans with nine banks, a person familiar with the matter said. The lenders were Australia & New Zealand Banking Group Ltd, Citigroup Inc., Credit Suisse Group AG, DBS Bank Ltd, Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase & Co., Mizuho Corporate Bank
Galaxy Securities to weigh valuation below top rivals China Galaxy Securities Co., seeking to entice investors to a US$1.5 billion initial public offering in Hong Kong, may offer a lower valuation than those of competitors including Citic Securities Co., two people with knowledge of the matter said.
Ltd and Morgan Stanley, the person said, asking not to be identified because the details are private. Florence Shih, a spokeswoman for Alibaba in Hong Kong, declined to comment on the financing. The Hangzhou-based company will use US$4.8 billion of the loans to refinance older borrowings at lower interest rates, US$800 million to pay back preferred shares to Yahoo! Inc., and the rest for corporate purposes, the person said. Alibaba, which was formed in 1999 as an online marketplace for Chinese companies, has grown as economic liberalisation spurred a boom in manufacturing and trade.
The closely held company has expanded its workforce to more than 24,000 and added services including cloud computing, online payments and consumer auctions. Founder Jack Ma is stepping down as chief executive this month to focus on strategy, stoking speculation the company may be preparing for an initial public offering. The loans included three tranches, the largest being US$4 billion, which matures in five years, the person said. The other parts are US$2.5 billion and US$1.5 billion in size, and both have three-year tenors, the person said.
The Beijing-based brokerage, controlled by China’s sovereign wealth fund, is considering a price range that would value it at about 1.2 times estimated end-2013 book value, said the people, who asked not to be identified as the deliberations are private. A slump in Hong Kong’s IPO market is putting pressure on Galaxy Securities and Sinopec Engineering Group Co. as they seek to complete they city’s first billion-dollar offerings since November. IPO proceeds fell to a four-year low of US$1.1 billion in the first quarter, data compiled by Bloomberg show. “Appetite is still there for solid names but investors are becoming more selective,” said Binay
Chandgothia, a Hong Kong-based fund manager at Principal Global Investors, which oversees more than US$280 billion. Citic Securities, China’s biggest publicly listed brokerage, trades at 1.68 times estimated 2013 book value in Hong Kong, according to data compiled by Bloomberg. Haitong Securities Co., which raised HK$14.4 billion (US$1.9 billion) in a share sale in April last year, carries a multiple of 1.35, the data show. Galaxy Securities plans to start taking orders for its IPO within two weeks, the people said. The company is trying to raise more than US$700 million from so-called cornerstone investors, they said.
Reuters
Bloomberg News
10
May 3, 2013
Asia
Indonesia growth seen near two-year low Weak expansion may make it more difficult to reduce fuel subsidies Novrida Manurung
Indonesia is the biggest producer of palm oil, and its commodity exports include coal, rubber, tin and cocoa.
Biggest loser
Indonesia’s domestic demand remains resilient
I
ndonesia’s economy probably expanded near the slowest pace in more than two years last quarter as a decline in commodity prices hurt exports, adding to signs of easing global growth. Gross domestic product probably grew 6.12 percent in the three months through March from a year earlier, after expanding 6.11 percent the previous quarter, according to the median estimate of eight economists surveyed by Bloomberg News. The government will release
the figures next week. A weak expansion in Southeast Asia’s largest economy may make it more difficult for President Susilo Bambang Yudhoyono to reduce fuel subsidies and curb the budget deficit as he tries to allocate more funds to infrastructure. The International Monetary Fund last month lowered its forecasts for global growth in 2013, while China and the U.S. expanded less than analysts estimated last quarter. “We’ve written off a pickup in
the developed world and China is struggling as well, and the demand shortfall is impacting Indonesia and other Southeast Asian nations,” said Kevin Lai, an economist at Daiwa Capital Markets Hong Kong Ltd. “Indonesia’s domestic demand is quite resilient but the correction in commodity prices and the external situation means its growth will not be the same as before.” The Standard & Poor’s GSCI gauge of 24 commodities has retreated 5.5 percent this year.
The rupiah was the biggest loser against the dollar after the Japanese yen last year among 11 Asian currencies tracked by Bloomberg. It has gained 0.7 percent so far this year. Hundreds of thousands of demonstrators marched in capital Jakarta on May 1 to protest against the planned fuel increases and to demand higher wages, adding pressure on the government ahead of elections in 2014. Mr Yudhoyono said earlier this week he will only increase fuel prices after Parliament approves compensation programmes for the poor, a move that could delay efforts to contain a budget deficit that may be more than twice as much as estimated without subsidy cuts. Failure to reduce subsidies last year drained government finances and led to a record current-account shortfall, hurting the rupiah as foreign investors lost confidence. “The compensation programme will have to go through the midyear budget revision process, which could last until mid- or end-June,” said Helmi Arman, an economist at Citigroup Inc. in Jakarta. “Compared to 2012, negotiations with parliament will likely be on the form of the programme and how funds will be distributed. But it’s not smooth sailing yet as hiking in July may cost extra political capital” because of the
Thai govt seeks rate cut to halt baht gains
T
hai Prime Minister Yingluck Shinawatra’s administration is pushing the central bank to cut its key interest rate to slow foreign inflows that drove the baht to its strongest level in 16 years last month. Appreciation of the baht, the best performer this year among the 11 most actively-traded Asian currencies tracked by Bloomberg, is hurting exports and may slow economic growth, Commerce Minister Boonsong Teriyapirom said yesterday in an interview. The Bank of Thailand has held the policy rate at 2.75 percent for the past four meetings. “Whatever the cut will be, it will have to have an immediate effect,” Mr Boonsong said at his office in Nonthaburi outside Bangkok. “It will have to stop the baht from appreciating further. It would have to send a very strong signal psychologically so the influx of the dollars will slow down.” Ms Yingluck’s economic team has criticised central bank Governor Prasarn Trairatvorakul for failing to cut borrowing costs as loose monetary policy in the world’s biggest
economies increases fund flows to emerging markets. Consumer prices rose last month at the slowest pace in more than three years, even as the baht’s surge threatens to undermine exports of vehicles, rice and computer chips that account for two-thirds of Thailand’s economy. “We’re sort of going in circles at the moment,” said Supavud Saicheua, managing director at Phatra Securities Pcl in Bangkok. “The signals you’re getting from the Bank of Thailand – they are very, very clear that they will not yield. And unfortunately I’m not optimistic about a meeting of the minds.” The baht’s rapid appreciation and volatility haven’t always been justified by economic fundamentals, and an “appropriate policy mix” would be used accordingly, the Bank of Thailand’s Monetary Policy Committee said two days ago. The government sees 29 baht per dollar as a crucial level for the currency, Mr Boonsong said. “Once it goes below that then everybody’s going to hurt a lot,” he said. The commerce ministry may cut
its export growth target of as much as 9 percent, which was based on a baht level of 30.5 per dollar, he added. Each time the baht appreciates by
Baht’s surge threatening exports
one against the dollar, it reduces the value of exports by 250 billion baht (US$8.5 billion), he said. Bloomberg News
11
May 3, 2013
Asia fasting month of Ramadan, he said.
Wider deficit Without a reduction in fuel subsidies, the deficit may rise to 3.83 percent of gross domestic product from 1.65 percent, Mr Yudhoyono has said. Indonesia’s overseas shipments fell the most in seven months in March, while imports dropped the most since 2009, the statistics department said yesterday. Indonesia’s consumer price gains eased to 5.57 percent last month from a year earlier and the central bank has held borrowing costs for 14 meetings. Policy makers next meet on May 14. While all economists surveyed by Bloomberg News forecast Bank Indonesia will keep rates unchanged this month, some predict it may raise borrowing costs in the coming quarters as fuel price increases spur inflation. A “rate hike should not be ruled out this year and we continue to expect the possibility of 50 basis points” of increases in the second half, said Gundy Cahyadi, an economist at Oversea-Chinese Banking Corp. in Singapore. The government may lower its target for growth this year to a range of 6.3 percent to 6.5 percent, from 6.8 percent previously, Deputy Finance Minister Mahendra Siregar said last week. Bloomberg News
KEY POINTS Correction in commodity prices hindering growth GDP expected to grow by 6.12 pct Might make it difficult to reduce fuel subsidies Adds pressure to curb budget deficit
Unilever wagers billions on India’s economic revival Anglo-Dutch company paying huge premium for Indian unit
Unilever’s Indian business started more than a century ago
I
n 1888, when Queen Victoria ruled India, the company that would become Unilever decided the country was the future. More than a century on, it’s staking US$5.4 billion that it still is. The Anglo-Dutch maker of Dove shampoo and Lipton tea, successor to one of the first multinationals in India, plans to spend as much as 292 billion rupees (US$5.4 billion) to increase its control over Indian unit Hindustan Unilever Ltd. The early entry gave Unilever, based in London and Rotterdam, a lead on rivals such as Procter & Gamble Co. in the world’s secondmost populous country. The latest investment would help it gain greater influence over a business that boosted earnings by 37 percent last year selling brands tailored to Indians, such as Fair & Lovely skin lightening cream and shampoo sachets at about 3 rupees (6 U.S. cents) apiece. At stake is a US$42 billion market for beauty and home-care products and packaged foods where
competitors from P&G to ColgatePalmolive Co. are making a bigger push to win shoppers. Hindustan Unilever has so far held its ground as India’s biggest consumer-products maker by catering to local tastes and building a distribution system of 6.3 million sales outlets, more than double P&G’s 2.5 million. Unilever’s latest investment in India comes as economic growth is weakening and government bureaucracy slows the expansion of international companies from Wal-Mart Stores Inc. to Ikea. India’s economy expanded 5 percent in the year through March, the national statistics agency estimates, versus an average of about 8 percent annually for the past decade.
‘Grinding halt’ “An Indian economy growing at 5 to 6 percent is not enough,” Unilever chief executive Paul Polman said in a December interview in New York. “India’s problem is India itself. The government has come to a grinding halt on making the reforms that need to be done.” To boost its stake in Hindustan Unilever from the 52.5 percent it owns to its target of 75 percent, the Anglo-Dutch parent is offering 600 rupees a share, 21 percent above the Indian unit’s closing price on Monday, the day before the offer was made. India is now Unilever’s thirdlargest market, accounting for about 8 percent of sales, according to Bernstein Research. Shares of Hindustan Unilever, based in Mumbai, rose 17 percent to 584 rupees yesterday, extending their gain over the past 12 months to 40 percent. “We wish Unilever had done this
DBS posts record quarterly profit Net income increases on fees and trading income
DBS Group is Southeast Asia’s largest bank
D
BS Group Holdings Ltd unexpectedly posted an 11th straight increase in quarterly profit as fees, commissions and trading income rose, helping offset
narrower lending margins. Net income advanced 2 percent to S$950 million (US$770 million) in the three months ended March 31 from S$933 million a year earlier,
the Singapore-based lender said in a statement to the stock exchange yesterday. Shares of DBS rose to their highest in almost five years. Chief executive Piyush Gupta is betting on fee-generating businesses such as wealth management and growth overseas through his proposed acquisition of PT Bank Danamon Indonesia as near-zero interest rates crimp loan margins in Singapore. Smaller rival Oversea-Chinese Banking Corp. earlier this week also posted profit that beat analysts’ estimates. “No matter what business you’re in, that DBS is growing its revenues without apparently taking on a huge amount of asset risk is a positive for shareholders,” said Matthew Smith, an analyst at Macquarie Capital Securities Singapore Pte. “If they can continue to do this, it’s fantastic.” Shares of DBS rose 1.8 percent to S$17.06 in Singapore, their highest in intraday trading since July 2008. The stock has gained 15 percent this year,
deal sooner, because the share price has been a strong performer, but in our view it makes a lot of sense both strategically and financially,” Graham Jones, an analyst at Panmure Gordon in London, said in an April 30 note. If completed, the transaction will be Unilever’s biggest since its 2000 purchase of Best Foods Ltd. Nitin Mathur, an analyst at Espirito Santo Investment Bank, cautioned that even at the “obscene valuation” Unilever is putting on the Indian unit, some investors may refuse to tender their shares. A Unilever spokeswoman says the company expects to be successful, and that the offer provides a good return for its shareholders. Regardless of how fast India grows, “there are huge volumes here and that’s what they want,” said Sachin Bobade, an analyst at Brics Securities Ltd in Mumbai. “Unilever always intended to own as much of this company as possible and they’re paying a huge premium for it.” Reuters
US$5.4 billion Unilever will pay to increase control over its Indian unit
surpassing the 6.5 percent advance in the benchmark Straits Times Index.
Fees, commissions Net fees and commissions climbed 25 percent from a year earlier to S$507 million, led by investment banking, wealth management and loan-related fees, DBS said yesterday. Trading income rose 26 percent to S$410 million. DBS’s net interest income, or the difference between what it makes from lending and pays on deposits, was little changed at S$1.3 billion. Its net interest margin narrowed to 1.64 percent in the quarter from 1.77 percent a year earlier. DBS’s loan book expanded 13 percent from a year earlier to S$223.7 billion in the three months. Provisions for credit and other losses increased 55 percent to S$223 million. Mr Gupta is awaiting approval on his US$6.8 billion bid last year for Bank Danamon to tap earnings in Indonesia, where the average net interest margin for lenders is about 6.3 percent, the highest in Southeast Asia. Bank Indonesia will probably have a decision by early May on the proposed acquisition, Governor Darmin Nasution said on April 15. Reuters
12
May 3, 2013
Markets Hang Seng Index NAME
PRICE
DAY %
VOLUME
AIA GROUP LTD
34.3
-0.4354136
18625933
ALUMINUM CORP-H
2.86
-2.389078
9825600
BANK OF CHINA-H
3.62
-0.2754821
351939983
BANK OF COMMUN-H
6.09
-1.296596
24459067
31
-2.821317
2005104
BELLE INTERNATIO
12.54
-0.9478673
15834706
BOC HONG KONG HO
26.75
0.1872659
BANK EAST ASIA
NAME CHINA UNICOM HON CITIC PACIFIC
PRICE
DAY %
VOLUME
11.16
0.1795332
21468866
9.36
-0.3194888
7707756
-1.055409
2070622
40.3
-0.982801
15522734
12.66
-0.7836991
5213364
110
-1.960784
7650114 1258935
SANDS CHINA LTD
VOLUME
68.45
0.07309942
1867842
14.16
-2.209945
60505768
SUN HUNG KAI PRO
COSCO PAC LTD
10.12
-1.55642
10625585
SWIRE PACIFIC-A
98.15
-0.5068424
ESPRIT HLDGS
10.66
-2.022059
11099957
TENCENT HOLDINGS
273.4
2.704733
6859919
8238922
HANG LUNG PROPER
30.75
1.821192
5169472
TINGYI HLDG CO
20.65
-3.729604
4200642
WANT WANT CHINA
12.08
-0.5591054
5242940
70.3
1.516245
2965885
-1.026393
3559566
HANG SENG BK
128.8
-0.770416
722573
-0.5136986
2747207
HENDERSON LAND D
56.45
0.4448399
1734320
CHINA COAL ENE-H
5.85
-2.01005
34095741
80
-0.2493766
2529643
CHINA CONST BA-H
6.47
-0.4615385
227164881
HENGAN INTL HONG KG CHINA GS
23.2
-0.6423983
7066701
HONG KONG EXCHNG
130.4
-0.1531394
2474569
HSBC HLDGS PLC
85.15
0.7692308
15874881
84.75
0.5338078
6322321
5.42
-0.7326007
190629884
9.9
-1.394422
33258550
CHINA LIFE INS-H
21.15
-0.2358491
24007929
CHINA MERCHANT
23.95
-2.443992
2794352
84.7
-0.2942908
10546122
HUTCHISON WHAMPO
23.95
1.054852
17895587
IND & COMM BK-H LI & FUNG LTD
CHINA OVERSEAS
DAY %
75
CLP HLDGS LTD
13.5
CHINA MOBILE
PRICE
POWER ASSETS HOL
CNOOC LTD
116.2
CATHAY PAC AIR CHEUNG KONG
NAME
SINO LAND CO
WHARF HLDG
MOVERS
11
22800
22799.68
1195943
LOW
22515.36
4099228
52W (H) 23944.74
8.38
-1.295642
81239258
CHINA RES ENTERP
26.35
-0.9398496
5814716
MTR CORP
31.95
-0.15625
CHINA RES LAND
23.65
0.6382979
4258729
NEW WORLD DEV
13.48
-0.4431315
CHINA RES POWER
25.35
-0.1968504
3246611
PETROCHINA CO-H
9.66
-2.12766
67020152
CHINA SHENHUA-H
27
-1.639344
9454244
PING AN INSURA-H
61.25
-0.3254679
12253279
0
INDEX 22668.3 HIGH
CHINA PETROLEU-H
39
22510
(L) 18056.4 29-April
2-May
Hang Seng China Enterprise Index NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.7
-0.2695418
87709649
CHINA PACIFIC-H
27.3
-2.150538
8615783
AIR CHINA LTD-H
6.4
1.910828
12616218
CHINA PETROLEU-H
8.38
-1.295642
2.86
-2.389078
9825600
CHINA RAIL CN-H
7.79
ANHUI CONCH-H
28.15
0.1779359
12801734
CHINA RAIL GR-H
BANK OF CHINA-H
3.62
-0.2754821
351939983
CHINA SHENHUA-H
BANK OF COMMUN-H
6.09
-1.296596
24459067
CHINA TELECOM-H
BYD CO LTD-H
27.5
-0.7220217
4005300
DONGFENG MOTOR-H
CHINA CITIC BK-H
4.29
-1.830664
26158204
GUANGZHOU AUTO-H
6.26
-2.1875
5288152
CHINA COAL ENE-H
5.85
-2.01005
34095741
HUANENG POWER-H
8.97
0
17202000
CHINA COM CONS-H
7.36
-0.9421265
12887060
IND & COMM BK-H
5.42
-0.7326007
190629884
CHINA CONST BA-H
6.47
-0.4615385
227164881
JIANGXI COPPER-H
14.86
-1.196809
18782798
CHINA COSCO HO-H
3.16
-3.658537
12598625
PETROCHINA CO-H
9.66
-2.12766
67020152
21.15
-0.2358491
24007929
PICC PROPERTY &
9.88
-0.8032129
11589251
CHINA LONGYUAN-H
7.15
0.5625879
26659640
PING AN INSURA-H
61.25
-0.3254679
12253279
CHINA MERCH BK-H
16.32
-1.330109
16755500
SHANDONG WEIG-H
7.52
0.9395973
3513373
CHINA MINSHENG-H
9.92
-0.5015045
35933439
SINOPHARM-H
23.15
0.4338395
6126400
CHINA NATL BDG-H
8.97
-2.074236
67993000
TSINGTAO BREW-H
52.1
0.09606148
1220000
15.04
-1.699346
6541947
WEICHAI POWER-H
27.45
1.478743
2558819
ALUMINUM CORP-H
CHINA LIFE INS-H
CHINA OILFIELD-H
NAME
NAME
PRICE
DAY %
VOLUME
YANZHOU COAL-H
7.81
-3.341584
38573200
81239258
ZIJIN MINING-H
2.27
-0.8733624
15775665
-0.5108557
11224468
ZOOMLION HEAVY-H
7.61
-2.059202
11946863
4.1
0.2444988
20242475
ZTE CORP-H
13.56
3.669725
11682583
27
-1.639344
9454244
3.92
-1.010101
29200628
11.56
0
12547400
MOVERS
9
29
2 10950
INDEX 10825.35 HIGH
10932.07
LOW
10722.14
52W (H) 12354.22 10700
(L) 8987.76 29-April
2-May
Shanghai Shenzhen CSI 300 NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
6.11
-1.451613
7193898
QINGHAI SALT-A
21.99
-9.691992
13827242
CITIC SECURITI-A
12.48
0.4830918
67378461
SAIC MOTOR-A
14.9
0
16283943
15231961
CSR CORP LTD -A
3.94
-1.005025
19595668
SANY HEAVY INDUS
9.36
-4.098361
33884975
-0.8517888
23690210
DAQIN RAILWAY -A
7.03
-0.2836879
36116052
SHANDONG GOLD-MI
32.13
0
4503942
8.83
0.4550626
27475396
DATANG INTL PO-A
4.35
0
4924007
SHANG PHARM -A
11.76
-1.918265
9053660
2.86
-0.3484321
47336824
EVERBRIG SEC -A
13.67
2.014925
13907226
SHANG PUDONG-A
9.82
-0.6072874
80667825
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.7
0.3717472
116325999
AIR CHINA LTD-A
5.26
0.5736138
5911404
ALUMINUM CORP-A
3.89
-2.261307
ANHUI CONCH-A
17.46
BANK OF BEIJIN-A BANK OF CHINA-A
NAME CHONGQING WATE-A
NAME
4.64
0.2159827
39125852
GD MIDEA HOLDI-A
14.66
5.014327
57297617
SHANGHAI ELECT-A
3.71
-0.536193
2050851
10.13
-0.4911591
11590012
GD POWER DEVEL-A
2.87
2.135231
47075127
SHANXI LU'AN -A
15.64
-2.005013
11651195
BAOSHAN IRON & S
4.82
0.4166667
33981299
GEMDALE CORP-A
7.19
2.86123
45168872
SHANXI XISHAN-A
10.36
-1.614435
8380415
BEIJING TONGRE-A
23.24
3.565062
10950369
GF SECURITIES-A
13.23
0.608365
17223096
SHENZEN OVERSE-A
5.88
2.083333
32879421
60.75
-1.37987
1169238
5.72
-2.721088
47962805
BANK OF COMMUN-A BANK OF NINGBO-A
24.6
0.203666
6337717
GREE ELECTRIC
26.04
0.1538462
24184421
SICHUAN KELUN-A
CHINA AVIC AVI-A
21.27
-2.431193
2558444
GUANGHUI ENERG-A
17.72
-3.59086
24654537
SUNING COMMERC-A
CHINA CITIC BK-A
BYD CO LTD -A
4.23
-0.9367681
20408779
HAINAN AIRLINE-A
4.74
0.6369427
14162654
TASLY PHARMAC-A
79.88
7.207086
3989827
CHINA CNR CORP-A
4
-0.7444169
18684739
HAITONG SECURI-A
10.77
0.5602241
71543096
TSINGTAO BREW-A
36.99
-2.091053
2723493
CHINA COAL ENE-A
6.63
-2.643172
9102838
HANGZHOU HIKVI-A
37
2.153506
4889347
WEICHAI POWER-A
21.56
-1.821494
4837684
CHINA CONST BA-A
4.71
1.290323
36156119
HENAN SHUAN-A
82.41
4.874014
2353418
WULIANGYE YIBIN
21.47
-2.186788
17546991
CHINA COSCO HO-A
3.28
-2.670623
13867027
HONG YUAN SEC-A
22.05
2.797203
32588004
YANGQUAN COAL -A
12.09
-3.971406
10351287
CHINA EAST AIR-A
3.02
-1.30719
10919696
HUATAI SECURIT-A
9.81
1.763485
24792787
YANTAI WANHUA-A
18.84
1.344809
10272848
CHINA EVERBRIG-A
3.05
1.666667
81480338
HUAXIA BANK CO
10.59
1.146132
28839493
YANZHOU COAL-A
14.1
-7.053395
8894112
16.84
0.477327
9650843
IND & COMM BK-A
4.07
0.4938272
58032125
YUNNAN BAIYAO-A
86
0.9389671
1543899
CHINA MERCH BK-A
12.1
-0.4115226
46973420
INDUSTRIAL BAN-A
18.21
0.2753304
54075922
ZHONGJIN GOLD
12.21
-3.018268
15950412
CHINA MERCHANT-A
12.12
-0.08244023
21951974
INNER MONG BAO-A
26.51
-3.914462
25873205
ZIJIN MINING-A
3.07
-1.916933
39967556
CHINA MERCHANT-A
26
2.281668
10068485
INNER MONG YIL-A
28.47
-2.633379
23745273
ZOOMLION HEAVY-A
7.36
-2.774108
30934241
CHINA MINSHENG-A
10
1.832994
125145697
INNER MONGOLIA-A
4.68
-0.6369427
21120644
ZTE CORP-A
12.2
7.583774
47241551
9.09
0.7760532
28590450
JIANGSU HENGRU-A
30.43
-0.164042
5021236
CHINA LIFE INS-A
CHINA NATIONAL-A CHINA OILFIELD-A
15.25
-1.802962
3668690
JIANGSU YANGHE-A
55.48
-4.967455
6453243
CHINA PACIFIC-A
18.77
0.0533049
16333753
JIANGXI COPPER-A
20.24
-2.879079
8865579
6.68
-0.7429421
19665058
JINDUICHENG -A
10.08
-2.325581
5984139
17.84
2.64672
27077077
171.11
-1.655268
2858679
CHINA PETROLEU-A CHINA RAILWAY-A
5.17
0.5836576
15195371
KANGMEI PHARMA-A
CHINA RAILWAY-A
2.86
2.508961
45643824
KWEICHOW MOUTA-A
CHINA SHENHUA-A
20.27
-1.073694
10268245
LUZHOU LAOJIAO-A
23.77
-2.701596
8095711
CHINA SHIPBUIL-A
4.08
-2.625298
78218839
METALLURGICAL-A
2.02
-0.9803922
15865799
CHINA SOUTHERN-A
3.41
-1.15942
13623596
NINGBO PORT CO-A
2.44
-0.8130081
8673086
8.43
-0.5896226
17618490
CHINA STATE -A
3.46
0.5813953
99587632
PETROCHINA CO-A
CHINA UNITED-A
3.58
0.280112
42544705
PING AN BANK-A
18.91
1.122995
23757279
CHINA VANKE CO-A
11.34
2.810517
73106311
PING AN INSURA-A
40.03
0.552625
20910266
CHINA YANGTZE-A
7.13
0
12071809
POLY REAL ESTA-A
11.87
2.063629
36734159
CHONGQING CHAN-A
10.9
3.710752
32356505
QINGDAO HAIER-A
12.64
-1.404056
9469152
PRICE DAY %
Volume
NAME
PRICE DAY %
Volume
MOVERS 125
163
12 2510
INDEX 2449.639 HIGH
2499.83
LOW
2430.07
52W (H) 2791.303 (L) 2102.135
2419
29-April
2-May
FTSE Taiwan 50 Index NAME ACER INC
24
0.6289308
6719666
ADVANCED SEMICON
25.7
0.9823183
17551109
ASIA CEMENT CORP
37.2 -0.6675567
ASUSTEK COMPUTER
342.5 -0.2911208
AU OPTRONICS COR
NAME
PRICE DAY %
FORMOSA PLASTIC
71.8
0.2793296
7366192
TAIWAN MOBILE CO
FOXCONN TECHNOLO
79.4
1.925546
7130488
TPK HOLDING CO L
2271879
FUBON FINANCIAL
42.1
-0.118624
12032589
TSMC
2451818
HON HAI PRECISIO
76.4
0.2624672
40705915
13.6
0.3690037
228974197
HOTAI MOTOR CO
263 -0.1897533
130390
Volume
108.5
0.9302326
603
0.6677796
3886064 2467661
110.5
0.913242
37482887
UNI-PRESIDENT
58.1
0
5185148
UNITED MICROELEC
11.2 -0.4444444
23375248
CATCHER TECH
151
1.003344
11769836
HTC CORP
295
-1.993355
29789606
WISTRON CORP
29.75 -0.6677796
8250221
CATHAY FINANCIAL
40.4
1.763224
30822542
HUA NAN FINANCIA
17.1 -0.2915452
2076664
YUANTA FINANCIAL
14.95 -0.3333333
8541440
CHANG HWA BANK
17
0.8902077
5501964
LARGAN PRECISION
812
0.7444169
1778485
YULON MOTOR CO
CHENG SHIN RUBBE
100
0.1001001
4636338
LITE-ON TECHNOLO
52.1
-1.883239
5264537
CHIMEI INNOLUX C
18.85
2.168022
99183124
MEDIATEK INC
366
1.666667
7697148
CHINA DEVELOPMEN
8.22
0.7352941
32162217
MEGA FINANCIAL H
23.2
1.978022
32299591
CHINA STEEL CORP
25.8 -0.7692308
10564657
NAN YA PLASTICS
59.6
1.360544
11190706
CHINATRUST FINAN
18.1
1.117318
31807699
PRESIDENT CHAIN
183.5
0.8241758
993695
CHUNGHWA TELECOM COMPAL ELECTRON DELTA ELECT INC
95
1.279318
11208769
QUANTA COMPUTER
59.9
-1.803279
7056963
18.8
-1.570681
13497407
SILICONWARE PREC
34.5
-1.428571
27490117
147.5
4.240283
12510649
SINOPAC FINANCIA
14.95
1.355932
27069552
FAR EASTERN NEW
31.6 -0.4724409
2565469
SYNNEX TECH INTL
49.1
-1.603206
7168315
FAR EASTONE TELE
73.5
5497761
TAIWAN CEMENT
38.5
-1.785714
6069136
FIRST FINANCIAL
18.15
2.225313 0
13036135
16.95
0
4586007
FORMOSA CHEM & F
68.9 -0.2894356
4707261
TAIWAN FERTILIZE
70.6
0
2263241
FORMOSA PETROCHE
80.3
1244646
TAIWAN GLASS IND
29.8 -0.6666667
1341988
0
TAIWAN COOPERATI
MOVERS
50.8
26
19
0.3952569
1603748
5 5690
INDEX 5674.65 HIGH
5683.74
LOW
5588.36
52W (H) 5686.16 5580
(L) 4719.96 29-April
5-May
13
May 3, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 62.3
34.4
18.40
34.2
18.25
62.2
34.0
18.10
33.8
62.1 17.95
33.6 Max 34.4
average 34
Min 33.4
33.4
Last 34.4
Max 62.2
average 62.2
Min 62.2
62.0
Last 62.2
42.0
19.8
41.4
19.5
40.8
19.2
Max 18.3
average 17.980
Min 17.86
Last 17.9
17.80
24.2 24.0 23.8
Max 42
average 40.518
Min 40.2
40.2
Last 40.3
Max 19.72
average 19.245
Commodities PRICE
WTI CRUDE FUTURE Jun13
91.18
BRENT CRUDE FUTR Jun13
100.43
GASOLINE RBOB FUT Jun13
272.5
GAS OIL FUT (ICE) Jun13 NATURAL GAS FUTR Jun13 HEATING OIL FUTR Jun13 METALS
DAY %
YTD %
0.164780841
(H) 52W
(L) 52W
-2.470852498
105.1900024
81.34999847
0.48024012
-6.95756902
116.6699982
90.91999817
0.209612768
-4.793515478
324.119997
235.9499931
837
1.239794376
-8.223684211
992.75
799.25
4.349
0.531668978
23.97377423
4.457000256
3.203999996
280.33
0.516332604
-6.792791595
323.8899946
258.589983
Gold Spot $/Oz
1455.81
-0.883
-12.5356
1796.08
1322.06
Silver Spot $/Oz
23.618
-1.5301
-21.5609
35.365
22.0713
Platinum Spot $/Oz
1479.2
-0.9177
-2.5399
1742.8
1374.55
Palladium Spot $/Oz
686.13
-0.1775
-1.9338
786.5
553.75
1824
-2.459893048
-12.01157742
2200.199951
1817.5 6762.25
LME ALUMINUM 3MO ($) LME COPPER 3MO ($)
6795
-3.685329554
-14.32354054
8422.5
LME ZINC
1840
-1.498929336
-11.53846154
2230
1745
14825
-3.671215075
-13.10082063
18920
14743 14.79500103
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul13 CORN FUTURE
Jul13
15.21
-0.392927308
-3.397904097
17.07500076
650.25
0.541167375
-6.7407673
824
527
725
0.554785021
-8.661417323
900
664.75
1379.25
0.455207575
-1.146747895
1605.75
1217.75
135.4
0.519673348
-9.461718489
202.1999969
132.6999969
WHEAT FUTURE(CBT) Jul13 SOYBEAN FUTURE Jul13 COFFEE 'C' FUTURE Jul13 SUGAR #11 (WORLD) Jul13
17.31
COTTON NO.2 FUTR Jul13
84.8
-0.115406809 1.108858948
-12.3100304 10.31611812
23.05999947 94.19999695
17.25 69.94999695
World Stock Markets - Indices NAME
Last 18.94
18.9
Max 24.2
average 23.595
Min 23.4
Last 23.55
COUNTRY MAJOR
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
1.0227 1.5567 0.9281 1.3171 97.19 7.992 7.7591 6.1556 53.715 29.39 1.2339 29.553 40.96 9741 99.38 1.22237 0.84608 8.1085 10.5256 128.01 1.03
-1.2552 -0.0193 0 -0.1743 0.3601 0.0125 0.0155 0.1657 0.1746 -0.4423 -0.1945 -0.2132 0.415 -0.1745 1.616 0.1824 0.1596 0.2639 0.1786 0.539 0
-1.455 -3.7648 -1.3684 -0.144 -11.4106 -0.1101 -0.1095 1.2184 2.3829 4.049 -1.013 -1.7596 0.1099 0.5338 -10.1157 -1.2181 -3.6238 1.3443 0.0456 -11.2804 -0.0097
1.0625 1.6381 0.9972 1.3711 99.95 8.0111 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 105.433 1.25692 0.88151 8.4957 10.9254 131.12 1.032
0.9582 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1529 51.3863 28.56 1.2152 28.913 40.54 9201 74.482 1.20054 0.77553 7.7018 9.6245 94.12 1.029
Macau Related Stocks NAME
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
ARISTOCRAT LEISU
3.86
-1.025641
22.53968
3.975
2.29
992766
CROWN LTD
12.9
0.311042
20.89972
13.04
8.06
1146280
VOLUME CRNCY
AMAX HOLDINGS LT
0.83
-1.190476
-40.71428
1.9
0.75
348550
BOC HONG KONG HO
26.75
0.1872659
10.99585
27.1
20.85
8238922
CENTURY LEGEND
0.305
-3.174603
15.09435
0.42
0.215
40000
6.08
0
1.502508
6.74
2.8
0
CHINA OVERSEAS
23.95
1.054852
3.679652
25.6
14.624
17895587
CHINESE ESTATES
13.66
0
12.61876
13.8
7.697
1656300
CHOW TAI FOOK JE
10.48
0.3831418
-15.75562
13.4
8.4
10101200
EMPEROR ENTERTAI
2.33
-1.271186
23.28042
2.49
1.1
505000
FUTURE BRIGHT
2.51
-0.3968254
105.7377
2.75
0.77
4518000 17078207
CHEUK NANG HLDGS
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
14700.95
-0.9356595
12.18554
14887.51
12035.08984
NASDAQ COMPOSITE INDEX
US
3299.128
-0.8910745
9.260242
3330.022
2726.68
FTSE 100 INDEX
GB
6445.44
-0.09067954
9.285309
6533.99
5229.76
HANG SENG BK
DAX INDEX
GE
7931.35
0.2229043
4.190011
8074.47
5914.43
NIKKEI 225
JN
13694.04
-0.7631519
31.73452
13983.87
8238.96
HANG SENG INDEX
HK
22668.3
-0.3021945
0.05023127
23944.74
18056.4
CSI 300 INDEX
CH
2449.639
0.09532931
-2.905842
2791.303
2102.135
GALAXY ENTERTAIN
33.4
-3.884892
10.04942
35.7
16.94
128.8
-0.770416
8.508849
131.5
99.2
722573
HOPEWELL HLDGS
30.4
1.333333
-8.571429
35.3
19.049
1754787
HSBC HLDGS PLC
85.15
0.7692308
4.735543
88.45
59.8
15874881
HUTCHISON TELE H
4.12
-0.4830918
15.73034
4.17
2.98
2284986
LUK FOOK HLDGS I
21.55
-2.045455
-11.68033
30.05
14.7
3730000
MELCO INTL DEVEL
14.82
-1.854305
64.4839
15.58
5.12
12039639
TAIWAN TAIEX INDEX
TA
8128.51
0.4305839
5.571917
8139.49
6857.35
MGM CHINA HOLDIN
17.9
-2.185792
34.80662
18.449
9.509
4851356
KOSPI INDEX
SK
1957.21
-0.3431859
-1.994947
2042.48
1758.99
MIDLAND HOLDINGS
3.51
-1.955307
-5.135136
5
3.249
1266000
S&P/ASX 200 INDEX
AU
5129.965
-0.70104
10.34674
5195.1
3985
12280000
ID
5005.848
-1.088162
15.96505
5062.673
3635.283
FTSE Bursa Malaysia KLCI
MA
1714.11
-0.2060955
1.489685
1718.44
1526.6
NZX ALL INDEX
NZ
974.485
-0.5581889
10.47919
983.204
755.149
PHILIPPINES ALL SHARE IX
PH
4424.59
0.3369821
19.61649
4429.089844
3238.77
JAKARTA COMPOSITE INDEX
23.4
Currency Exchange Rates
NAME ENERGY
Min 18.94
23.6
HSBC Dragon 300 Index Singapor
SI
656.45
-0.16
5.69
NA
NA
STOCK EXCH OF THAI INDEX
TH
1594
-0.2415731
14.51725
1603.01
1099.15
HO CHI MINH STOCK INDEX
VN
473.02
-0.3140081
14.3306
518.46
372.39
Laos Composite Index
LO
1365.26
-0.372165
12.38835
1455.82
980.83
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
NEPTUNE GROUP
0.159
-2.453988
4.605267
0.226
0.084
NEW WORLD DEV
13.48
-0.4431315
12.14642
15.12
7.95
4099228
SANDS CHINA LTD
40.3
-0.982801
18.70397
43.7
20.65
15522734
SHUN HO RESOURCE
1.51
0
7.857145
1.67
1.03
0
SHUN TAK HOLDING
4.12
0.9803922
-1.670646
4.65
2.56
2704300
SJM HOLDINGS LTD
18.94
-3.169734
5.222222
22.15
12.34
11253864
SMARTONE TELECOM
13.52
-2.170767
-3.977272
17.38
12.5
1742400
WYNN MACAU LTD
23.55
0
12.4105
25.5
14.62
11936422
ASIA ENTERTAINME
4.4
-0.9009009
43.79085
5.7999
2.4
232976
BALLY TECHNOLOGI
53.58
0.5630631
19.83896
54.92
41.74
624526
BOC HONG KONG HO
3.47
-0.2873563
13.02932
3.59
2.7
9906
GALAXY ENTERTAIN
4.55
0.6637168
14.60957
4.93
2.25
2100
INTL GAME TECH
17.06
0.6489676
20.3952
17.53
10.92
4043456
JONES LANG LASAL
97.35
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14
May 3, 2013
Opinion
A fateful mistake
needed to stem the rise in the debt ratio and safeguard long-term growth.
Adjustment fatigue
Jean Pisani-Ferry
C
Professor of Economics at Université Paris-Dauphine and director of Economic Policy Planning for the Prime Minister of France
ontroversy is essential to the advancement of science. So the debunking of methodological flaws and a coding error in a paper by the economists Carmen Reinhart and Kenneth Rogoff is just part of everyday life in academia. Yet coverage of the controversy by the news media and the blogosphere has been astonishingly intense – and simplistic. “Growth in a Time of Debt,” the short 2010 paper in which Reinhart and Rogoff claimed that public debt starts to have a significantly detrimental effect on economic growth once it reaches 90 percent of GDP, was never a celebrated piece of economic research. As a rough empirical characterisation of stylised facts, it was received somewhat sceptically by the academic community, and both authors were known for much more noted contributions. Google Scholar, the academic search engine, records more than 3,000 academic citations of Rogoff’s most cited paper, compared to less than 500 for “Growth in a Time of Debt.” What would have normally remained a subject for post-seminar small talk has, however, become a topic for discussion by journalists, commentators, and policymakers. For all of them, what matters is that the sorry fate of the Reinhart/Rogoff paper undermines the case for fiscal austerity. A few months ago, Olivier Blanchard, the International Monetary Fund’s chief economist, had already criticised his colleagues and policymakers in advanced countries for systematically underestimating
the recessionary impact of fiscal consolidation programmes. The debacle of the Reinhart/Rogoff paper is widely regarded as another, fatal illustration of austerity’s shaky intellectual foundations.
Perfect argument But this is only partly true. Until the Reinhart/Rogoff paper, the main argument for fiscal retrenchment rested on concerns about the sustainability of public debt. The question was whether a sovereign would ultimately be able to repay its debt, given specific economic and financial conditions, long-term trends such as the ageing of the population, and uncertainty about the future course of policy. The problem w a s t h a t economists were unable to say how much is too much. There was no given threshold below which debt was innocuous and above which it was dangerous. So the message to policymakers was confusing. Economists were like doctors telling patients that, while some wine may be beneficial,
too much is certainly dangerous – without being able to tell them how many glasses per day they were allowed. They were right, but hopelessly imprecise. Confusion was especially acute in early 2010, when “Growth in a Time of Debt” was published. The global economy was just emerging from the deepest recession in the post-World War II period. A global Keynesian stimulus had prevented the worst, and the most urgent policy question was whether to continue supporting the economy or start consolidating. Some argued in favour of delaying consolidation, because the economy was still in a deep recession; too harsh an adjustment, according to this view, would have a major impact on a still-weak private economy. Some claimed the opposite, arguing that, given the scale of the task, there was no time to lose. The Reinhart/ Rogoff paper appeared to provide the perfect argument in support of rapid consolidation, which is why it was cited intensively in policy discussions. Austerity, it was argued, was
The danger is that the discrediting of hasty austerity could undermine the case for fiscal responsibility in the long run
To be sure, retrenchment could entail some short-term costs; but the longer-term benefits would be much bigger. Even though Reinhart and Rogoff themselves did not draw that conclusion explicitly in their paper, many drew it for them. It was so tempting for a minister or a senior technocrat to explain that consolidation had to start immediately, because the 90 percent threshold was approaching, that most of them did not resist it. Heavy reliance on what turns out to be disputed evidence now leaves the fiscal hawks in a weak position, to say the least, vis-à-vis their opponents. This is especially true in Europe. Having promised that rapid consolidation would be good for growth, and having delivered recession, the European Union has disappointed its citizens. Adjustment fatigue is setting in, and governments risk losing support if they go much further in their consolidation efforts. The danger is that the discrediting of hasty austerity could undermine the case for fiscal responsibility in the long run. If so, financial markets could conclude that public-debt sustainability is in serious danger – a perception that could have highly adverse effects on financing conditions. In the end, growth would indeed suffer, ironically proving Reinhart and Rogoff right. This episode once again underscores the importance of intellectual rigor. Of course, that is not always an easy credo by which to abide. Researchers are tempted by persuasive results that can attract the interest of policymakers, who are tempted by a selective reading of the evidence that can provide them with ammunition in domestic and international debate. Submitting to either temptation, as the Reinhart/Rogoff episode has shown, is never advisable. © Project Syndicate
editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
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15
May 3, 2013
Opinion Business
wires
Leading reports from Asia’s best business newspapers
Asahi Shimbun
The erosion of Europe Joschka Fischer
Germany’s foreign minister and vice-chancellor from 1998 to 2005
Eight electric power companies in Japan reported a combined loss of 1.59 trillion yen (US$16 billion) for fiscal 2012 as the aftereffects of the Fukushima nuclear disaster continued to hammer their bottom lines. With almost all of their nuclear reactors shut down, the companies’ fuel costs soared for thermal power generation to secure a stable supply of electricity. Four of the eight utilities posted record losses. Tokyo Electric Power Co., operator of the crippled Fukushima No. 1 nuclear plant, reported the biggest loss of 685.2 billion yen (US$7.02 billion).
Jakarta Globe Indonesia posted its first trade surplus in six months in March, the statistics bureau said on Wednesday. March exports dropped 13.03 percent from a year ago while imports fell 9.97 percent. The statistics bureau also revised its February trade figures to show a US$290 million deficit from US$330 million previously. ExportswererevisedtoUS$15.02 billion from US$14.99 billion, while imports changed to US$15.31 billion from US$15.32 billion. Indonesia last posted a trade surplus in September 2012. Indonesia reported twin trade and current account deficits last year.
Bangkok Post Private consumption and investment, Thailand’s two main economic driving forces, contractedinMarchaftercommercial banks tightened consumer loans and farmers’ incomes declined. The Private Consumption Index contracted by 1.1 percent from the previous month, while the Private Investment Index shrank by 0.7 percent along with a slowdown in machinery and equipment investment after a period of acceleration. “The Bank of Thailand will monitor whether the consumption slowdown will continue or if it is only temporary,” said Mathee Supapongse, the central bank’s seniordirectorformacroeconomic and monetary policy.
Inquirer Business Philippines’ big banks can withstand shocks, such as a rise in loan defaults, should global economic problems spill over to the economy, said the Bangko Sentral ng Pilipinas. The level of lenders’ capital continues to exceed domestic regulatory requirements and international standards, the central bank said. The average capital adequacy ratio of commercial banks in the country stood at 17.95 percent as of the third quarter of 2012. The latest capital adequacy ratio was above the 10-percent minimum requirement set by the central bank and more than twice the international standard of 8 percent.
J
ust weeks ago, the worst of the financial crisis in Europe seemed to be over. Stability seemed to be returning. But appearances proved to be deceptive. A minor problem (at least in scale) like Cyprus, when combined with an almost unbelievable degree of incompetence among the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund), was enough to turn a molehill into a mountainous crisis. While markets remained calm, the Cyprus crisis revealed the full extent of the political disaster that the euro zone crisis has wrought: the European Union is disintegrating at its core. Europeans’ current crisis of confidence concerning Europe is far more dangerous than renewed market anxiety, because it cannot be overcome with another liquidity injection by the ECB. Europe’s old political order was based on competition, mistrust, power rivalries, and, ultimately, war among sovereign states. It collapsed on May 8, 1945, and was replaced by a system based on mutual trust, solidarity, the rule of law, and compromise. But, with the crisis eroding these foundations, trust is giving way to mistrust, solidarity is succumbing to ancient prejudices (and even new hatred between the poor south and the rich north), and compromise is being overwhelmed by diktat. And Germany is once again at the centre of the process of disintegration. That is because Germany,
by far the EU’s strongest economy, has enforced a strategy for overcoming the euro zone crisis that worked for Germany at the beginning of the millennium, but under completely different internal and external economic conditions. For the distressed southern European states, the Germanbacked mixture of austerity and structural reforms is proving fatal, because the decisive third and fourth components – debt relief and growth – are missing.
Price of survival It is only a matter of time before one of the large European crisis countries elects a political leadership that no longer accepts the austerity diktats. Even now, come election time, national governments more or less openly promise to protect their citizens from Europe, because Germany has seen to it that austerity and structural reforms take pride of place in managing the crisis. The argument that “tough love” was necessary in southern Europe, because nothing there would ever have changed otherwise, has been settled. The love has been very tough indeed, generating rapid economic contraction, massive unemployment (upwards of 50 percent among young people), and continued fiscal deterioration, owing to rising debt-service costs. Indeed, all euro zone members are now experiencing weak economic growth, if not recession. What does Germany want? A German Europe
would never work, and the country’s political class lacks both the courage and the determination to pursue a European Germany. So, does Germany want to hold together the monetary union and thus preserve the EU, or will it allow dithering and a lack of vision to hasten the erosion of Europe’s foundations? In this crisis, intention takes a back seat to action (or lack thereof). The International Herald Tribune recently quoted Winston Churchill: “It’s not enough that we do our best; sometimes we have to do what’s required.” That is precisely the order of the day in Europe and the euro zone. What needs to be done has long been clear. The price of the monetary union’s survival, and thus that of the European project, is more community: a banking union, fiscal union, and political union. Those who oppose this because they fear common accountability, transfers from rich to poor, and a loss of national sovereignty will have to accept Europe’s renationalisation – and thus its exit from the world stage. No alternative – and certainly not the status quo – will work.
The real crisis of the EU and the monetary union is not financial but political – or, more precisely, it is a leadership crisis
It has become common knowledge in Europe that the ongoing crisis will either destroy the EU or bring about a political union, and that, without a solidarity-based solution to existing debt and a partial mutualisation of new debt, the euro cannot be saved. Such steps will make far-reaching transfers of sovereignty unavoidable. Is Germany – or France – willing to do that?
Leadership crisis The real crisis of the EU and the monetary union is not financial but political – or, more precisely, it is a leadership crisis. A lack of vision, courage, and strength of purpose is on display in all European capitals, but especially so in Berlin (and on the part of government and opposition alike). Europe’s national politicians routinely criticise the EU for its lack of democratic legitimacy, yet they bear part of the responsibility for it. Or have pro-Europeans become so faint-hearted and dejected that they prefer simply to hand over the reins to anti-European populists and nationalists? That would be a disaster, because the crisis now runs too deep to be resolved by technocratic means. Germany is preparing for a national election in which – much like in last year’s French presidential election – the European crisis is to play no part, or at least only a minor one. Both government and opposition believe that it would be better to tell the people the truth concerning the most vital question of the day only after the election (and in measured doses). Such an outcome would make a mockery of democracy. But things may turn out very differently if the dynamics of Europe’s crisis throw German politicians’ plans into disarray. An unpleasant surprise cannot be ruled out; at this point, it might be Europe’s greatest source of hope. © Project Syndicate
16
May 3, 2013
Closing Euro zone factory downturn deepens
Genting Singapore misses profit estimate
The rot spreading through euro zone manufacturers persisted through April, a business survey showed. Markit’s Eurozone Manufacturing Purchasing Managers’ Index fell to 46.7 last month from March’s 46.8, a four-month low but coming in ahead of an earlier flash reading of 46.5. An index measuring output fell to 46.5 from March’s 46.7, spending its 14th month below the 50 mark that separates growth from contraction. Factory activity in Germany, Europe’s largest economy, fell for the second month and at a faster pace than in March. France, Italy and Spain all saw continued contractions in manufacturing activity.
Casino operator Genting Singapore PLC’s core earnings fell 35 percent and missed market estimates as premium gamblers got lucky and won more of their bets. Genting Singapore’s January-March adjusted earnings before interest, tax, depreciation and amortisation fell to S$249.7 million (US$202.5 million) from S$381.4 million a year ago. “Compared to the first quarter of 2012, the first quarter’s performance was largely affected by a much weaker win percentage in the premium players’ business despite a significant increase in the premium players’ rolling volume,” the company said yesterday.
Lack of infrastructure, labour hinders Macau: EU Political reform was ‘modest but positive step’, European Union says Tony Lai
tony.lai@macaubusinessdaily.com
A
deficit in infrastructure and labour is limiting the progress of the city’s economic diversification, the European Union (EU) said. Macau’s “economic policy continued to follow market-led principles, guided by the rule of law” last year, according to a report compiled by Brussels’ High Representative of the Union for Foreign Affairs and Security Policy. But the report released yesterday said there was “limited progress” on economic diversification due to “infrastructure bottlenecks, the absence of ancillary business clusters and a shortage of human resources”. The labour shortage is the city’s “key constraint” to economic diversification as the gaming and service industries continue to seize workers from other sectors, the European Union stressed.
Workers from the gaming sector, related tourism services and construction accounted for more than 70 percent of the city’s labour force last year, the report pointed out. Chief Executive Fernando Chui Sai On predicted last week that Macau would face a more severe labour shortage in 2015-16 due to the completion of large integrated casino resorts in Cotai. He urged the public to discuss whether Macau “needs to absorb talents from elsewhere” to solve the problem. The employed population reached 351,800 in the first quarter of this year, with outside workers accounting for almost a third. Brussels also said Macau is “a growing market for EU luxury goods, gourmet food, wine and vehicles”. The European bloc has recorded trade surpluses with the city since 2009.
Philippines gets second investment grade rating S&P follows Fitch in awarding the country an investment rank
S
tandard & Poor’s raised the Philippines’ credit rating to investment grade yesterday, the second debt agency to do so in less than two months, putting the Southeast Asian country on track to attract more foreign capital flows which are vexing policymakers. S&P upgraded the Philippines’ foreign longterm debt by one notch to BBB minus, and foreign short-term debt to A-3, with a stable outlook, citing the country’s strong external profile, moderate inflation and declining reliance on
foreign currency debt. Most foreign funds are only allowed to hold investment-grade assets rated by either S&P or Moody’s Investors Service. The influential JPMorgan Asia credit index (JACI), for example, considers investment grade debt classified by the two agencies. “Inflows have already been quite strong and are likely to remain a challenge for policymakers as foreign players become more aware of the Philippines as a viable investment destination,” said Eugene Low, an economist at
The European Union hopes for more progress towards universal suffrage
The commission also vowed to push for more trade, environmental and legal cooperation with Macau this year. Brussels also thinks the political reform last year was “a modest but positive step towards strengthening the democratic basis” of Macau. The reform added two directly-
DBS Group Holdings Ltd in Singpaore. The upgrade came just a little over four months after S&P raised its rating outlook for Philippine debt to positive from stable in late December, and as the debt watcher downgraded its outlook for the country’s larger neighbour Indonesia to stable from positive. S&P kept its credit rating for Indonesia’s long-term sovereign debt at BB+ and B for short-term sovereign debt. Fitch Ratings raised the Philippines’ credit rating to investment grade in late March, a first for the Southeast Asian nation, in a move expected to boost investment and lift the country’s long-term growth potential. With investment-grade status from two of the major agencies, the sovereign now becomes eligible to be part of the Barclays U.S. InvestmentGrade and Global Aggregate and Asia Pacific IG Aggregate
elected and two indirectly-elected seats in the 29-member Legislative Assembly and increase the number of members to elect the chief executive to 400 from 300. “The EU hopes more progress will be made (…), eventually leading towards universal suffrage,” the report adds.
indices, as well as other investment-grade indices from Citigroup.
Capital inflows Foreign capital inflows are already posing challenges for many policymakers across Asia as global investors flock to the region in search of higher returns. Shielding the peso currency and the economy from the impact of large inflows has already strained the central bank’s resources. Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco said in a statement the S&P upgrade “undoubtedly cements the Philippines’ status as an economy with one of the brightest prospects globally,” adding inflows, particularly foreign direct investments, should increase the country’s productive capacity and create more jobs. He told Reuters managing capital flows and inflation
were the BSP’s key priorities, with the central bank keen to use non-interest rate tools to tackle inflows. In its statement, S&P said the current and previous governments’ improved fiscal flexibility, foreign debt reduction programmes, deeper domestic capital market and recent revenue gains were factors for the ratings upgrade. “The upgrade on the Philippines reflects a strengthening external profile, moderating inflation, and the government’s declining reliance on foreign currency debt,” said Standard & Poor’s credit analyst Agost Benard. “We expect the country to move into a nearbalanced external position because of persistent current account surpluses, in which large net transfers from Filipinos working abroad more than offset ongoing trade deficits.” Reuters