Macau Business Daily, May 30, 2013 by Business Daily

Growing contest among banks for loans issuance, deposits

Page 4

Year II

Number 294

Thursday May 30, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

Vitor Quintã

MOP 6.00

April 19, 2013

Bus operators could face legal action T

he administration will launch “legal proceedings” if it finds bus operators lied about services to receive higher payments. The Commission of Audit has raised that suspicion.

The watchdog released a report on Monday criticising the management of the Transport Bureau over the new public bus system introduced in August 2011. The report found there was

“an unusual situation” – a bus was running all day without any fare records – but the bureau still paid the unidentified operator for the service. Wong Wan, the bureau’s director, yesterday

www.macaubusinessdaily.com

Slowdown no time for Macau Pass profits alarm: watchmaker soar to record high Page 4

called a local radio talk show, saying: “At this current stage we will try to find the reasons behind [this incident].” “If it is related to a problem in the administrative management, we will

Ex-Wynn director’s new Manila setback

Page 5

More on page 5

I SSN 2226-8294

Page 6

Lack of novelty keeps HK visitors away

Hang Seng Index 22860

22796

Lack of new attractions in town has caused the drop in visitors from neighbouring Hong Kong, said Maria Helena de Senna Fernandes, director of Macau Government Tourist Office. “Pure and simple, the [Hong Kong] visitors only come to Macau when there’s something new, like a new hotel or resort,” she stated. Crowding on ferries coinciding with the expansion of the mainland’s Individual Visit Scheme wasn’t mentioned.

22732

22668

22604

Page 2

22540

May 29

New rules to stop development blight

HSI - Movers Name

The days of building sites languishing unfinished for years are generally long gone in Macau’s now red-hot property market. But the government has belatedly decided to introduce rules to stop development blight just in case. The new land law says if a concessionaire can’t go ahead and cannot pay its loans, the banks can take over the foundations and bring in another developer. Page 3

Flat sales drop, price unchanged

penalise [the operator] in accordance with the regulations in the contract. If it is related to false reporting, we will… launch legal proceedings to handle the case,” he added.

%Day

CHINA MERCHANT

1.56

CHINA RES POWER

1.22

ESPRIT HLDGS

1.18

CATHAY PAC AIR

0.27

LI & FUNG LTD

-0.18

CHINA OVERSEAS

-3.16

SINO LAND CO

-3.23

HANG LUNG PROPER

-3.55

CHINA UNICOM HON

-4.50

WHARF HLDG

-5.67

Source: Bloomberg

Brought to you by

There were fewer home transactions month-on-month and year-onyear in May. But competition among buyers for what supply there was kept prices per square metre at the record highs seen in the first quarter. The average transaction price of residential units hit a record high in the first three months of this year – 77,975 patacas (US$9,747) per sq.m. – according to government data. Page 7

2013-05-30

2013-05-31

2013-06-1

27˚ 32˚

May 30, 2013

Macau

More exhibitions Hunt on for novelties held, organisers that lure HK tourists still in the red Without headline grabbing resort openings, Macau’s tourist Companies spending more money to get events up and running

bureau says emphasis must be on culture and sports Stephanie Lai

sw.lai@macaubusinessdaily.com

Stephanie Lai

sw.lai@macaubusinessdaily.com

Professional visitors to Macau exhibitions more than doubled year-on-year

acau organised fewer meetings but slightly more exhibitions in the first quarter of this year, the Statistics and Census Service announced yesterday. A total of 230 meetings and exhibitions were held in the city, down by 15 percent year-on-year, and also a decline from the twoyear high of 294 events held in the previous quarter. About 94 percent of the events were corporate and government meetings, with the number of participants falling by 48 percent from the first quarter of last year to 29,000. On the contrary, the city’s exhibitions saw a 64 percent yearon-year rise to 175,000 attendees. A total of 13 exhibitions were held in the first three months, just one more than in the same period last year. Eight of these 13 exhibitions were repeated events. But the number of professional visitors more than doubled year-onyear to just short of 9,000. Half of the professional visitors were living in Macau, followed by 22 percent from mainland China. Despite the surge in professional visitors and the government subsidising part of the event costs, organisers are still spending much more than what they are earning. Expenses on organising exhibitions rose by 13 percent yearon-year to 34.75 million patacas (US$4.35 million), with most of the money going for promotion works, setting up and decoration of booths. The spending was higher than the total revenue of 5.3 million patacas – up by 51 percent – reported by event organisers. The revenue was generated mostly by rentals of exhibition booths, the statistics bureau said. The Economic Services Bureau told media in December that it expected to spend about 40 million patacas to subsidise organisers of meetings and exhibitions here.

Hong Kong tourist arrivals are down by 4.7 percent year on year in the first four months

drop in the number of visitors from Hong Kong is largely because of a lack of new attractions, says Maria Helena de Senna Fernandes, the director of Macau Government Tourist Office. “Pure and simple, the [Hong Kong] visitors only come to Macau when there’s something new, like a new hotel or resort. Hong Kong visitors have a love of novelty,” Ms Fernandes told a meeting hosted by the France Macau Business Association and the American Chamber of Commerce yesterday. “In the next few years we won’t have a lot of new elements in the city.” “So we’ll do some events in Macau and package them in certain ways that make them [Hong Kong visitors] feel that if they don’t come, they’ll miss out on something.” The government’s data shows a big fall in tourists from the East Asian markets of Japan and Taiwan, despite a continued rise in overall tourist numbers. “For Taiwan, the situation is more mixed. We’re losing a lot in terms of total [visitor] traffic due to the direct cross-straits flights,” she said. “But, at the same time, we also see more Taiwan visitors are staying overnight in local hotels. We are actually seeing a change in Taiwan where its transit visitors are turning into real visitors.” In the first quarter of this year, more than 96,750 Taiwanese tourists stayed overnight, a 47.7 percent jump over the same period last year.

There has also been a recent decline in tourists from long-haul destinations, such as the United States and Australia. Ms Fernandes said the same trend was taking place in Hong Kong. “It has been a trend in those markets to Hong Kong and Macau,” she said. “We are working to see how we can better our tourism promotion to appeal to those markets.”

Adjustment phase While visiting Macau earlier this week, Hong Kong Tourism Board chairman Peter Lam Kin Ngok said both cities should work to improve their promotional campaigns and attract more high-spending tourists. He proposed the creation of a “sports tourism brand” for Hong Kong and Macau. Hong Kong’s infrastructure is being upgraded, with the Kai Tak Cruise Terminal opening next month and the Hong Kong-Zhuhai-Macau Bridge to be completed by 2016. Ms Fernandes told Business Daily that Mr Lam’s proposal has not been fleshed out. “His team met with us to discuss our usual cooperation, like the ‘one trip, multiple stops’ scheme. “We hope we can use sports events as a cooperation initiative. Macau already has some programmes like the Dragon Boat Festival and marathons to attract visitors.” Ms Fernandes said renewed effort

would be invested in developing cultural tourism, but the concrete terms of this brand are yet to be laid out. Macau will also try to attract visitors from the affluent coastal cities in the mainland, the city’s biggest source of tourists. “We will try to tap into affluent coastal cities in the mainland, from where they [visitors] can come here by direct flights or high-speed rail,” she said. “Shopping will still be the major non-gaming appeal for these affluent mainland visitors. But we will also try to attract them with Macau’s cultural elements.”

Shopping will still be the major non-gaming appeal for these affluent mainland visitors. But we will also try to attract them with Macau’s cultural elements Maria Helena de Senna Fernandes, director of Macau Government Tourist Office

May 30, 2013

Macau

Land bill to ensure buildings are finished Vacant blocks and incomplete buildings in prime locations to become a thing of the past, if land law passes Tony Lai

tony.lai@macaubusinessdaily.com

Banks offering loans for construction would be better protected under the revised land law

clause in the government’s proposed new land law would ensure that building developments went ahead, even if the original land grant was revoked. “If a land grant is voided and the plot seized by the government… it

can then grant the parcel, exempted from public tender, to the bank from which the original land owner secured loans,” said Kwan Tsui Hang, the head of the First Standing Committee of the Legislative Assembly. Ms Kwan said the proposal would

better protect “the interests of the lending banks”. “But the bank does not have the right to develop the plot,” she said after the committee met government officials yesterday. “The bank would then be obliged

Consultant in pipeline to review drain network A third flood inside four weeks is ‘unacceptable’, according to secretary Lau Si Io Tony Lai tony.lai@macaubusinessdaily.com

he government will employ a “professional consultancy company” to assess the city’s underground drains and help avert flooding that could hamper development. “There are already development plans or ongoing construction projects in the peninsula, Taipa and Coloane,” said Secretary for Transport and Public Works Lau Si Io. “We expect there will be changes to the landscape in the future, particularly in Taipa.” Several casino-resorts from the city’s six gaming operators are slated for completion in 2015 and 2016. The consultancy firm – whose name Mr Lau did not disclose – would be responsible for drafting a plan to improve the system, he said yesterday.

“We hope this plan will make the city’s underground drainage system fit better with Macau’s economic and social development, as well as help solve the flooding problem,” he said. The announcement of a city-wide review comes after streets flooded three times this month. Mr Lao said the third flood, which hit Taipa on Saturday, was “unusual” and “unacceptable” because rainfall did not exceed 100 mm. Much heavier rainfall caused the first floods.

flood, last July, caused by less than 100 mm of rain. Mr Lau said high tides had contributed and flooding was restricted to the Inner Harbour. “But is this problem only related to

Flood overhaul Estrada Governador Albano de Oliveira, the street where the Macau Jockey Club is located, is now flooding more often, as are low-lying areas on the Macau peninsula. Official records show only one

Floods have hit Macau this month

to find a third party within a certain period of time to develop the land.” The proposal would also safeguard investors in housing developments as construction could be completed, she said. The new provision helps secure “the actual utilisation of the land plot”, she said, adding that the committee was “very happy” with it. But this option will only be available if the original land owners cannot settle the bank loans and the foundations of the development have been completed, the legislator said. Any development by a third party would have to meet the requirements of the original plan. “As for profits the banks make on selling the land [to a third party], they can only get back the money equivalent to the loans and related administrative charges,” Ms Kwan said. “The rest has to be returned to the government.” Asked how long the banks would be given to find a new developer, she said the government would deal with banks on a case-by-case basis. The latest version of the bill also details which land grants can be exempted from public tender using the provision for projects that “match the government policies”. Those government priorities have to be outlined in the annual Policy Address, announced during questioning after the address or at an official press conference would qualify, she said. “Some [committee] members think this can regulate how the government defines what government policies are… to prevent the administration’s discretionary power from becoming too big,” she said. “But some members think there is still room for further tweaks.” A tender would not be required if the development has a not-for-profit cultural, sporting or social service purpose, or is built on behalf of a public utility.

the draining of Estrada Governador Albano de Oliveira? We will carry out studies [on this],” Mr Lau said. Residents and shop owners near the Jockey Club say construction waste and rubble had blocked drains. Nearby works to build the Light Rapid Transit railway were also to blame, they say. Yesterday, Mr Lau did not say if he thought the works had contributed to the floods or if the government could prevent seasonal flooding. The final phase of the Taipa drainage network expansion begins next month and should be in place inside six months. More flood control points would also be installed in Taipa and the Macau peninsula. “We should understand it is irrational to expect there will be no flooding where there is rain,” he said. “We will control flooding on a reasonable scale. We hope to improve the situation.”

May 30, 2013

Macau

Banner year, but not for all banks Growing competition for loans and deposits, banks say Vítor Quintã

vitorquinta@macaubusinessdaily.com

he Macau banking sector had a banner year in 2012 but several financial institutions saw their profits tumble hard, official data published in the Official Gazette yesterday show. The worst hit was Chong Hing Bank Ltd’s branch here, which saw its 2012 profit fall by almost half from the previous year to just 705,300 patacas (US$88,200). The bank’s management gave no reasons for the decline. In fact Chong Hing saw its revenue rise by a quarter of 9.34 million patacas, mostly because lending more than tripled to 240 million patacas. The Macau branch of Standard Chartered Bank also felt the pinch of lower lending revenue and a significant batch of

bad loans. The bank posted profits of 37.36 million patacas, down by 39.6 percent from the previous year. Lending revenue fell by 15 percent to 47.79 million patacas and the institution was also forced to write impairment losses on loans and advances that were 17.8 million patacas higher than in 2011. The branch here of Bank of Communications Co Ltd posted a smaller 2012 profit as well, 75.7 million patacas, down by 14.6 percent from the previous year. Despite the decrease the bank’s management stressed it was able to access lending to “big local companies” and infrastructure developers, while offering cross-border services. But for most of the

banks that released their results yesterday last year was marked by healthy profit growth. The Macau branch of Bank of East Asia Ltd recorded the fastest increase, as its profit grew more than 14-fold from the previous year to 19.35 million patacas. The bank’s management said the margin between the interest it got from lending and the one it pay for deposits “continued to improve”. Bank of East Asia’s loans increased by 42 percent while its deposits rose much slower, by 8 percent. HongKong & Shanghai Banking Corp Ltd’s branch was the fourth most profitable financial institution here last year, as its profit rose by 29.4 percent to 281.06 million patacas. The bank benefited

For most Macau banks last year was marked by healthy profit growth (Photo: Manuel Cardoso)

from higher lending – up by 6 percent – and lower operational costs, down by 2 percent. However, its deposits fell slightly, by 0.1 percent, due to “intense competition in the local market,” the

management said. Meanwhile Banco Comercial de Macau, SA saw its profit increase by a quarter to 90.15 million patacas. BCM’s loans rose 10 percent, faster than a 6-percent growth in deposits.

by 26 percent in the first three months this year, the Federation of the Swiss Watch Industry reported. In the Hong Kong market sales dropped by 9 percent in the same period. Major watch retailer Oriental Watch Holdings Ltd, which sells Rolex, Tudor, Piaget and Omega brands in Greater China, noted in its latest filing that operating profit in the first quarter would be substantially lower than a year earlier due to the “adverse effect of the slowdown of mainland’s economy”.

Safe from rents

Matthias Stotz, Junghans managing director, was in Macau for the opening of the outlet (Photo: Manuel Cardoso)

Luxury slowdown does not scare German watchmaker Slowdown in mainland economy does not affect Junghans’ confidence in Macau market Stephanie Lai

sw.lai@macaubusinessdaily.com

unghans Uhren GmbH has seen its sales in Macau “more than triple” in just two years, said the brand’s sole agent Tic Tac Time Group director Ken Lam. And the German watchmaker remains confident, saying it “did not feel the impact” from reports of

a massive first quarter slowdown in sales of luxury goods in Greater China. The 150-year-old brand opened its first outlet in Landmark Macau yesterday. The strong sales performance has been supported by the increasingly affluent Macau consumers and strong

tourist spending from mainland China, Mr Lam said. However, the normally upbeat sales of watches in China have lost its shine in the first quarter this year amid the economic slowdown in mainland China. Mainland sales of watches declined

“We do not really feel the same impact,” said Junghans managing director Matthias Stotz. In any case, “a little bit of a cooldown” is actually “the general situation worldwide at the moment,” he added. “The big difference between long established watch brands and Junghans is that we have a really new position in the market, where we can still grow further,” he told Business Daily. In addition, Junghans watches are in a price range that is “affordable and not too expensive,” Mr Stotz said. “That’s exactly a big advantage today if the [mainland] situation has changed a little bit.” Watch retailer Oriental Watch warned in December that “escalating rental rates continued to be a major concern for Hong Kong and Macau retailers”. The Junghans shop, run by Macau retail partner Xu Xing Long Watch Ltd, is located inside Landmark hotel, saving it from high-street rental hikes, Mr Stotz said. “When you walk through the streets, sometimes you really get anxious seeing the shops,” he said. “Some of them occupy two or three floors in a shopping space; the competition is very, very strong.” “In future we have to be very clear that we are not in the luxury group,” he added. “We cannot and do not want to waste money [on rent] while marketing our brand at a reasonable position, with a good presentation.”

May 30, 2013

Macau

Next stop court, bus firms warned Any whiff of fraud by route operators will be investigated, says Transport Bureau Tony Lai

tony.lai@macaubusinessdaily.com

he government will launch “legal proceedings” if it finds bus operators lied about their services to receive higher subsidies. The Commission of Audit released a report on Monday that slammed management at the Land, Public Works and Transport Bureau that oversaw the revamp of the public bus system that was introduced in August 2011. The report highlighted at least one “unusual situation” where a bus ran all day without any record of taking a fare and the operator was paid for the service. “We will try to find the reasons behind [this incident],” said Transport Bureau director Wong Wan on a TDM radio show yesterday. “If it is related to a problem in the administrative management, we will penalise [the operator] in accordance with the regulations in the contract. “If it is related to false reporting, we will… launch legal proceedings to handle the case.” Under the current system, the city’s three bus operators collect fares and hand them to the government, which then pays each firm a subsidy that matches the number of bus runs. The three companies operating bus routes are Transportes Urbanos de Macau SARL (Transmac),

The revamped public bus system was launched in August 2011

Sociedade de Transportes Colectivos de Macau SARL (TCM) and Reolian Public Transport Co. Mr Wong said his department had upgraded its technology in order to “minimise” the possibility of such a situation happening again. Secretary for Transport and Public Works Lau Si Io reiterated

yesterday that the government would “abide by the law” if it found misconduct from bus operators. Mr Lau said he saw nothing wrong with allowing the Transport Bureau to investigate the irregularities and set up improvement goals that matched the auditor’s recommendations. “The bureau has actually invited

some professional accounting firms to give them suggestions but we do not rule out the possibility of having a new supervision mechanism in the future,” he said. The audit commission also criticised the regulator for its management of bus shifts and frequencies, and its monitoring of polluting emissions standards. Asked whether any official should be held accountable for these flaws, Mr Lau said: “I have nothing to add.” He said the current focus is “to improve the bus services”. The bureau will discuss the matter in more detail with media within the next “one or two days” before providing explanations to the Legislative Assembly on June 6. Mr Wong said they were handling “two to three cases” in which operators did not have enough bus runs on some routes and could penalise the companies. Officials were in discussion with the three operators on appropriate improvements. In the first quarter of this year, the government made a loss of 100 million patacas (US$12.5 million) on the bus services. It received about 70.5 million patacas from bus fares but paid 170 million patacas to the three companies.

Macau Pass profits soar to record high Over a million stored-value Macau Pass card issued by the end of 2012 Vítor Quintã

vitorquinta@macaubusinessdaily.com

Macau Pass cards are mostly used for fares on public transport or shopping in convenience stores (Photo: Manuel Cardoso)

he Macau Pass payment system had its best ever year in 2012, as its profits grew almost 23-times to reach 3.16 million patacas (US$395,000). Macau Pass SA published its annual results in the Official Gazette

yesterday but gave no reason for the profit boom. The company’s profits had fallen to less than 138,800 patacas in 2011, which Macau Pass claimed was due to an almost eight-fold increase in capital investment.

Macau Pass chairman Liu Hei Wan says the firm’s activities went through “a continuous development” last year, with the utilisation of its cards “growing constantly”. In 2012 the firm’s payment transactions rose by a quarter, as over a million Macau Pass stored-value cards were issued, up by 24 percent from the previous year. The cards are mostly used for fares on public transport or shopping in convenience stores. The number of outlets who accept Macau Pass payments rose by a third, with a similar increase registered in the number of spots where users can charge their cards. With real estate investments rising by 12 percent, the company’s operational profits rose by 47 percent. Mr Liu said Macau Pass would continue to develop “new applications” for its cards this year. The firm is also working on allowing people to do away with its cards altogether and use their mobile phones as a substitute to take the bus, park their cars and shop for groceries. This year, the company hopes to launch SIM cards that employ nearfield communication technology to let people make payments just by

holding their mobiles close to a Macau Pass terminal. Macau Pass deputy general manager David Lao told Business Daily last month that the company was negotiating with some of the city’s telecommunications companies about developing the SIM card for mobile phones with the functions of a Macau Pass card. “We have already developed some samples but we still need to discuss some details with the telecommunications companies,” Mr Lao said. “We hope we can launch this service within this year,” he added. “With this SIM card in a mobile, it can be used no differently from a Macau Pass card.”

MOP3.16 million Macau Pass’ 2012 profits

May 30, 2013 April 19, 2013

Macau

Ex-Wynn director suffers another Manila setback Kazuo Okada previously stripped of near-20 pct stake in Wynn Resorts over claims – strongly denied – of wrongdoing in Philippines Michael Grimes

michael.grimes@macaubusinessdaily.com

ormer Wynn Macau Ltd director Kazuo Okada has suffered a new setback in his efforts to develop a casino resort in the Philippines. Talks between Universal Entertainment Corp – a Japanese firm controlled by Mr Okada – and Robinsons Land Corp, a Philippines property developer controlled by Filipino-Chinese businessman John Gokongwei, to develop jointly a US$2 billion (16 billion patacas) gaming resort at Entertainment City, Manila Bay, have been “put on hold,” said Universal yesterday. No reason was given. In December shares in Universal had risen 6.50 percent on news that Robinsons – one of the Philippines’ biggest developers – might get involved

in a gaming venture led by Tiger Resorts, Leisure and Entertainment Inc., the operating company of the project and a wholly owned subsidiary of Universal Entertainment. Yesterday Robinsons Land shares fell as much as 3.9 percent. According to a December filing to the Philippine Stock Exchange by Robinsons, the firm was to have purchased a majority stake in unlisted Eagle I Landholdings Inc., a company that controls 30 hectares of land where Universal Entertainment is building ‘Manila Bay Resorts’. Robinsons was also to have taken a minority stake in Tiger Resorts. “We put the talks with Robinsons Land on hold,” said Nobuyuki Horiuchi, a Universal Entertainment spokesman yesterday. “We will

continue to work on the casino project in the Philippines with other partners or by ourselves,” he added. But according to information given to Business Daily, it will not be possible under the Philippines constitution for Universal – as a foreign investor – to go it alone. The constitution says a maximum 40 percent of any project can be foreign-owned.

‘Subverted constitution’ Francis Hernando, vice president of gaming licensing and development at the country’s casino regulator the Philippine Amusement and Gaming Corporation, told Business Daily regarding the Tiger Resorts project: “…our own equivalent of the district

attorney basically came up with an opinion last year to say ‘The government thinks there is a prima facie situation that the constitution was violated, and therefore we advise you, Pagcor, not to allow the casino to open until that breach is remedied’.” He added: “The constitution limits ownership [in the casino project] to 40 percent maximum. But there are allegations that in fact Universal may have some ownership in the 60 percent which was supposed to be purely Filipino. So that prompted the authorities to look at the ownership of the 60 percent.” “The government counsel said ‘Well, it looks like 40 percent of the 60 [percent] also belongs to them [Universal]. Forty percent of 60 percent is 24 percent, plus the 40 percent [Universal’s known stake] is 64 percent – therefore there could be a violation, so Pagcor, I would advise you not to open this’,” explained Mr Hernando. Last week Business Daily reported that Pagcor will “think seriously” of stripping Mr Okada of his Manila casino licence if it’s proved that bribes were paid to win the licence. Universal says it’s conducted business in the Philippines lawfully. The company stated last week it acquired the land based on the advice of a prominent Philippine law firm that “advised us that it was legal, so this should not be an obstacle to the opening of business in the Philippines”. With Reuters/Bloomberg News

Sky’s the limit at Sky 32 Galaxy Macau’s elite VIP venue requires guests to roll at least US$1.6 million per visit

Source: Bloomberg

Sky 32 at Galaxy Macau

ky 32, an elite oasis of luxury on the 32nd floor of the Galaxy Macau casino, offers commanding views, a waterfall, a bar with vintage single malt whiskies – and six sumptuous rooms where players must commit to betting at least 10 million yuan (US$1.6 million; 13.05 million patacas) per visit. Just a few months ago, even overthe-top pampering like that available in Sky 32 wasn’t enough to attract

big bettors from China, as many steered clear of Macau, the world’s top grossing gambling hub. Now, the high rollers are coming back to Macau, which raked in 304 billion patacas (US$38 billion) in revenue last year, more than six times that of the Las Vegas strip. After reining in spending for part of last year, so-called VIP players from China helped drive Macau casino revenue to a record US$3.9 billion

in March, according to data from the city’s gaming regulator. “The VIP market is gaining momentum,” said Robert Drake, chief financial officer of Galaxy Entertainment Group Ltd, which owns Galaxy Macau. The industry’s April revenue “…was second- highest in history. We are off to a great start for the year.” About two thirds of Macau’s casino revenue comes from high rollers who gamble on credit due to restrictions on taking cash out of China. Junket operators who arrange transportation, hotels and financing often bring in these people. At Galaxy Macau, some are invited to Sky 32 and a similar area called Sky 33, with nine rooms and a requirement that bettors wager at least five million yuan per visit.

Betting big Last year, the big bettors pulled back across the industry amid speculation that China’s new government might restrict junkets

and curb cash flowing from the mainland into Macau. Since Xi Jinping took over as China’s president in March, no significant restrictions have been announced. “We have not seen any evidence of a crackdown – It’s purely noise,” said Union Gaming Research Macau analyst Grant Govertsen. “VIP business is picking up nicely.” VIP revenue in Macau tends to closely track sales of luxury goods, which slowed in the second half of last year, probably related to the government transition, said Praveen Choudhary, managing director at Morgan Stanley. “People just laid low, gambled less, bought less jewellery and watches,” Mr Choudhary said. “Now the transition is completed, VIP business has come back to normalcy.” “Everyone was speculating about some negative impact, but the leadership change wasn’t an impact at all,” MGM China Holdings Ltd’s chief executive Grant Bowie said in an interview. Bloomberg News

May April30, 19,2013 2013

Macau Residents-only housing survey ready by September The survey on “Macau land for Macau residents”, a concept that would reserve land banks for housing projects exclusively targeted for residents, will be ready by the end of September, the Chinese-language newspaper Macao Daily News reported. The study commissioned to the University of Macau and Polytechnic Institute will use the example of Hong Kong, where new homes are made available only to permanent residents, to interview about 3,000 residents. The study will form the basis for the government to decide whether this policy would come into practice.

Flat sales drop, prices unchanged Tony Lai

tony.lai@macaubusinessdaily.com

here were fewer home transactions this month from April but the average price stayed put due to the lack of supply, said Centaline (Macau) Property Agency Ltd. “The transaction sentiment in May has further worsened continuing the declining trend from April,” director Jacky Shek Po Tak wrote in a statement yesterday. April, “a traditionally strong month for the property market”, saw a decline in home sales as the market was expecting new curbs from the

government, Mr Shek wrote. According to Centaline’s transaction records, there were 67 deals last month, which is only about 40 percent of the 160 deals in March and the 153 deals in April last year. Home sales in the first two weeks of this month reached 35, two fewer than in the same period of April and down by 58.3 percent from a year ago. However “there have been no signs of declines in prices,” Mr Shek said, while blaming the special stamp duty for tightening the city’s home supply.

The average transaction price of residential units hit a record high in the first quarter of this year: 77,975 patacas (US$9,747) per square metre. Mr Shek asked the government to consider whether the special stamp duty, which was introduced in June 2011, should continue. But the cabinet of the Secretary for Transport and Public Works told the latest edition of our sister publication Macau Business magazine “there is no need to halt” such rule.

MIN

Mr Shek expects the implementation of the city’s first law regulating pre-sales of unfinished flats to tighten the supply next month. However, with some flats reentering the market after making it through the two-year period during which the special stamp duty can be imposed the price “may stabilise,” he said. A tax of 20 percent is levied on re-sales of homes within one year of being purchased and 10 percent within two years.

TO THE MAJ OR 201 BUS 3 INES reco Busine S AW size gnition ss Awa ARD r s p S IN ope and fro rogram ds of th THE n to e m f REG Y o ear r pro orga all in all se ION is M c f n e d t i s o s i ! v aca sion rs. P perm ation idua u a a ’ l s s l s r s a t t p n a i h a c r n e or a a n e ip com nt basis t carry d busin ation i d busin mier on t esse n th . Yo e pan ss o h u e s y, o r no can ei eir acti , or oth award f all Nom vitie ther min er re s is inat s ate ions you nomina in Mac levant rsel ope We f, or te an in au on a n un invi d you r co ividual til J te y mpa une ou t ny. , 20 ob

ATIO

NO WO

PEN

e pa

th, 2

013

rt o

For

f it!

mor e

info w or c .awa rmation r o inqu ntact u dsmac , please iries au.c s visit @aw our o m ard w sma

cau

ORGANISED BY:

MEDIA PARTNERS

.com

ebs

ite a t

May 30, 2013 April 19, 2013

Greater China Morgan Stanley seeks US$3 bln for property fund Morgan Stanley, the biggest property investor among Wall Street banks before the financial crisis, is trying to raise US$1 billion to US$3 billion for a new global real estate fund amid appetite for higher-yielding investments, said two people with knowledge of the effort. The firm is seeking a large contribution from China Investment Corp, which owns 6.4 percent of New York-based Morgan Stanley, said one of the people, who spoke on condition of anonymity because the fundraising is private. The fund would be for the firm’s eighth for global real estate.

IMF forecasts lower growth, warns Beijing on debt Washington-based fund urges cap on social financing

he International Monetary Fund cut its growth forecast for China this year to 7.75 percent from 8 percent, citing a weak world economy and exports, adding to concerns that the world’s secondlargest economy is losing momentum. The IMF move follows a series of lowered 2013 growth estimates for China by private economists after soft factory output and investment performance data for April and weak factory activity in May. The IMF’s forecast is above the government’s target of 7.5 percent, but in line with recent revisions, including Bank of America-Merrill Lynch, which pared its forecast this month to 7.6 percent from 8 percent, and Standard Chartered Plc, which cut its estimate to 7.7 percent from 8.3 percent. ING Groep NV last month reduced its prediction to 7.8 percent from 9 percent. “The pace of [growth in] the economy should pick up moderately in the second-half of the year, as credit expansion gains traction in line with a projected mild pick-up in the global economy,” David Lipton, the first managing director of the IMF, told a media briefing in Beijing after concluding an annual review of China. “While China still has significant policy space and financial capacity to maintain stability even in the face of adverse shocks, the margins of safety are narrowing and a decisive impetus to reforms is needed to contain vulnerabilities and move the economy

to a more sustainable growth path,” Mr Lipton added. At the same time, Mr Lipton said China’s current monetary and fiscal policies are “appropriate” and the IMF isn’t suggesting China restrict credit now.

Credit supply The IMF said China’s priority should be on reining in social financing growth, which has expanded at double-digit rates in recent months, leading to concerns that the country’s fast credit supply may fuel inflation in future. “China’s economy faces important challenges. In particular, the rapid

KEY POINTS IMF sees China growth at 7.75 pct in 2013 Fund urges cap on social financing Advises govt to conduct fiscal stimulus if growth below forecast IMF calls for ‘decisive’ reforms

growth in total social financing raises concern concerns about the quality of investment and its impact on repayment capacity,” said Mr Lipton. “If growth were to slow sharply below this year’s target, then onbudget fiscal stimulus should be used, focusing on measures that support household incomes and consumption, such as reductions in social contributions, subsidies to consumption, or targeted social safety net spending,” he added. Unlike previous years when any wobble in the Chinese growth engine was countered with heavy government intervention to stabilise activity, the market consensus this time is no big-bang stimulus as policymakers have more tolerance of a slow economic growth speed to improve economic quality. China’s Premier Li Keqiang said separately yesterday that that the country’s economic recovery still faces uncertainties, but the key to maintaining stable growth is building up the service industry. “China has great potential to develop its service industry, because we have 1.3 billion people and the demand for services is huge,” Mr Li said in a speech at the opening of a trade fair in Beijing. The service industry made up only 44.6 percent of 2012 GDP and created only 36 percent of the total jobs in the country, both of which are lower than many countries. “Therefore, it is a significant

task for China to speed up the development of service industry,” said China’s premier. Mr Li, who took office in March, is planning policy changes that would open up more of the economy to private investment and alter a household-registration system that impedes urbanisation.

Yuan’s value Mr Lipton repeated the IMF’s view from last year that the yuan is “moderately” undervalued against a basket of currencies and said a stronger yuan over time is needed to

Fitch warns of credit bubble as bank lending soars Rating agency cut China’s long-term local-currency debt rating last month

Lending from financial institutions was 198 pct of gross domestic product last year

hinese banks are adding assets at the rate of an entire U.S. banking system in five years. To Charlene Chu of Fitch Ratings, that signals a crisis is brewing. Total lending from banks and other financial institutions in China was 198 percent of gross domestic product last year, compared with 125 percent four years earlier, according to calculations by Ms Chu, the company’s Beijing-based head of China financial institutions. Fitch cut the nation’s longterm local-currency debt rating last month, in the first downgrade by one of the top three rating companies in 14 years. “There is just no way to grow

out of a debt problem when credit is already twice as large as GDP and growing nearly twice as fast,” Ms Chu said in an interview. Ms Chu’s view puts her in a minority among those charting the future of the world’s biggest nation. She questions how long China can maintain the model of growth driven by bank lending that has allowed its economy to sidestep the global financial crisis. Fitch’s sovereigndebt downgrade to A+, the fifthhighest level has sparked a debate in which Ms Chu’s calculations have been called “biased” by an Australia & New Zealand Banking Group Ltd. economist and a “misinterpretation” by Everbright Securities Co.

May April30, 19,2013 2013

Greater China Zoomlion drops after denying falsified sales Zoomlion Heavy Industry Science & Technology Co., China’s second-largest maker of construction equipment, fell to a 20-month low in Hong Kong trading after denying for a second time allegations it falsified sales. Zoomlion dropped as much as 5.8 percent, before closing at HK$7.49. The company on Wednesday said an article on Sina.com saying sales were improperly accounted for was “distorted” and “misleading”. The company, 16.2 percent owned by the government of Hunan province, faces a drop in orders as China’s slowing economic growth sap demand.

Foreigners buying most Taiwan stocks …the margins of safety are narrowing and a decisive impetus to reforms is needed to contain vulnerabilities and move the economy to a more sustainable growth path David Lipton, first deputy managing director of the IMF

redress the issue. Further progress is needed on relaxing controls on interest rates and the exchange rate, he said. China disputed the assessment last year and said the yuan was “now close to equilibrium or, at most, slightly undervalued,” according to the 2012 annual report. The currency has gained about 3.6 percent against the dollar in the past year. The IMF said inflation in China would likely pick-up to 3 percent by the end of 2013 while the current account surplus is expected to equivalent to 2.5 percent of gross domestic product (GDP) this year,

compared with a 2.6 percent of surplus-to-GDP ratio in 2012. China needs a “decisive push for rebalancing toward higher household incomes and consumption,” Mr Lipton said. The nation should allow more competition in industries “currently considered strategic” and increase dividends from state-owned enterprises to “improve financial discipline and provide additional fiscal revenue,” he added. The IMF also urged deepening changes to tax policy and a “comprehensive re-ordering of local government finances”.

Her views have struck a nerve. “Everyone is talking about credit – about the credit cycle, leverage and credit-quality problems,” said Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong, adding that there’s not enough good data available. “It’s a big black box, and it’s quite scary.”

growth for every yuan of lending. China’s expansion of credit hasn’t caused a surge in the proportion of bad loans, data from the banking regulator show. While loans overdue for at least three months have grown for six straight quarters to reach 526.5 billion yuan at the end of March, the ratio of nonperforming loans declined to 0.96 percent as of March 31 from 2.42 percent at the end of 2008, according to the China Banking Regulatory Commission. Ms Chu, who has covered Chinese financial institutions at Fitch for seven years, says these figures are distorted. The ratio of nonperforming loans to total lending has declined mainly because credit has surged, she said. Moreover, the regulator’s data doesn’t reflect the real amount of debt because of the ways banks move loans off their books, she added. Ms Chu has been one of the most vocal analysts to warn about regulatory loopholes and weaknesses in China’s banking system, saying they make official lending data

Crisis response Amid the global credit crunch of 2008, China ramped up lending by state-controlled banks to prevent an economic slowdown. The assets of Chinese banks expanded by 71 trillion yuan (US$11.2 trillion) in the four years through 2012, according to government data. They may increase by as much as 20 trillion yuan this year, Ms Chu said on April 23. That will exceed the US$13.4 trillion of assets held by U.S. commercial banks at the end of last year, according to the Federal Deposit Insurance Corp. Ms Chu says companies’ ability to pay back what they owe is wearing away, as China gets less economic

Reuters/Bloomberg News

Government seen taking steps to protect companies from stronger currency

nternational investors are on course to purchase the most Taiwanese equities in any month since August as prospects of improved technology earnings overshadow the highest valuations in almost two years. Overseas funds bought a net US$2.68 billion of equities through yesterday, the most since August’s US$3.1 billion, according to data compiled by Bloomberg. The benchmark Taiex Index climbed 16 percent in the past seven months through yesterday, including a 2.1 percent gain in May. The gauge traded for 1.8 times net assets on May 21, the highest price-to-book ratio since August 2011, the data show. Stocks rallied as companies from Taiwan Semiconductor Manufacturing Co. to Hermes Microvision Inc. reported higher sales and speculation grew the government will take steps to protect exporters from a stronger currency. Morgan Stanley upgraded its rating on Taiwan’s stocks last week, citing improving profitability of computer-hardware companies. UBS AG, top-ranked for Taiwan research, says technology shares may lead a rally for the Taiex to this year’s high in June. Foreign investors “have been buying due to the improvement in relative earnings revisions versus other markets,” Jonathan Garner, Hong Kong-based chief strategist

for Asia and emerging markets at Morgan Stanley, said in an e-mail. “They will continue as long as the top- down macro environment and earnings revisions trend remain positive.”

Earnings growth

unreliable. Fitch in 2011 started calculating its own measure of total credit in the economy. Fitch’s Ms Chu calculated China’s total credit at 198 percent of GDP last year by adding off-balancesheet assets such as letters of credit, financing by non-bank institutions and offshore loans by foreign banks to figures for all forms of financing in the economy published by the central bank. The Chinese government doesn’t provide an estimate for total credit to GDP. A jump in the ratio of credit to GDP preceded banking crises in Japan, where the measure surged 45 percentage points from 1985 to 1990, and South Korea, where it gained 47 percentage points from 1994 to 1998, Fitch said in July 2011. In China, it has increased 73 percentage points in four years, according to Fitch’s estimates. “You just don’t see that magnitude of increase” in the ratio of credit to GDP, Ms Chu said. “It’s usually one of the most reliable predictors for a financial crisis.”

Mr Garner and his team upgraded Taiwan’s stocks to equal weight from underweight in a May 24 report, saying that valuations were “reasonable” given the outlook for profits. The analysts increased their year-end forecast for the Taiex to 8,650, from the previous estimate of 7,700. The stocks gauge gained 0.9 percent to 8,337.90 at the close in Taipei yesterday. Earnings in the 114-member MSCI Taiwan Index are projected to grow 32 percent in the next 12 months, up from 26 percent on April 1, data compiled by Bloomberg show. The higher forecasts have lowered the MSCI Taiwan’s price-estimated earnings ratio to 14.2 times from a three-month high of 14.6 on May 15. “We have observed earnings per-share forecast improvement from a broad range of sectors, including even tech hardware,” Mr Garner wrote. Profits of technology companies in the MSCI Taiwan Index are forecast to grow 39 percent in the next 12 months, the data show. Societe Generale SA’s privatebanking unit is cautious on Taiwanese equities on concern that slowing economic growth in China may curb demand. Exports to China, the biggest destination for Taiwanese outbound shipments, sank 2.9 percent from a year ago in April, government data show. “We have a mixed outlook on Taiwan as the economy will continue to face challenges in its export sector,” David Poh, a Singaporebased regional head of portfoliomanagement solutions at the private banking unit of Societe Generale, said by e-mail. Taiwan’s central bank cut its 2013 growth estimate on May 24 to 2.4 percent from 3.59 percent. The government announced measures to bolster the economy on Wednesday that included allowing insurers to invest in infrastructure projects and creating a NT$1 billion (US$33 million) fund to channel money to companies. The slowdown in exports has fueled speculation the government will take steps to ease the Taiwanese dollar’s appreciation. Taiwan’s central bank halved on May 23 the amount of bullish bets banks can hold on the island’s currency following the yen’s slump.

Bloomberg News

May 30, 2013

Asia

Singapore starts casino limit scheme from Saturday Aims to protect citizens and permanent residents ‘vulnerable to financial harm due to gambling’ Michael Grimes

michael.grimes@macaubusinessdaily.com

new scheme by the Singapore government to curb problem gambling among the city-state’s nationals and permanent residents comes into effect on Saturday. It’s part of a new set of social safeguards introduced following amendments to the Casino Control Act in November 2012. The government said in a statement: “To be administered by the National Council on Problem Gambling (NCPG), the Casino Visit Limit serves as an additional safeguard

for financially vulnerable locals who visit the casinos frequently.” It will set a cap on the number of times per month certain people may attend the casino floors at Singapore’s two integrated resorts – Resorts World Sentosa, operated by Genting Singapore Plc, and Marina Bay Sands, operated by Las Vegas Sands Corp. Under the system, individuals, or the family of vulnerable individuals, may apply to the NCPG to have a limit placed on their trips. People with poor credit records or those “vulnerable to financial harm due

to gambling” can also have a cap imposed by a committee of assessors appointed by the NCPG. S Iswaran, Minister in the Prime Minister’s Office and Second Minister for Home Affairs and Trade & Industry, said earlier this month that Singapore’s Casino Regulatory Authority has stepped up its presence on the gaming floors of the city’s two gambling resorts. Singapore legalised casino gambling in 2005 and opened the first venue in February 2010 after a ban dating back to British colonial

rule in the 1920s. It already has one of the toughest regulatory regimes in the world. Section 54 of the Casino Control Act as amended in late 2012 says that operators can be fined up to ten percent of annual gross gaming revenue for a “serious breach” of the act, without defining what counts as “serious”. Last year according to the annual report of parent company LVS, Marina Bay Sands’ total casino revenues were US$2.27 billion – a 3.9 percent fall from a year earlier – while according to Genting Singapore, those of Resorts World Sentosa were S$2.37 billion (US$1.88 billion) – a fall of 12 percent on 2011. Union Gaming Research Macau said in a note: “Practically speaking, we believe the new regulations could impact the frequency of visitation of some small number of Singaporean mass market gamblers.” “At this point we are not inclined to downwardly revise our current mass-market estimates for the IRs operated by Genting Singapore and Las Vegas Sands as these restrictions were already anticipated. We note that our estimates for these properties already contemplate low single-digit mass market revenue growth in 2013,” the research house added.

Resorts World Sentosa, left, and Marina Bay Sands

Fonterra boosts payout forecast As global dairy prices soar and global output slows

Fonterra is the world’s largest dairy exporter

ew Zealand’s Fonterra Cooperative Group Ltd, the world’s biggest dairy processor, plans to boost its 2013/14 payout to farmers by 21 percent, reflecting record global dairy prices due to strong demand and sluggish milk production at home and abroad. The co-operative – New Zealand’s largest company – said yesterday that milk production in the world’s biggest dairy exporting country would likely remain flat in the coming year, after volumes for this year edged lower

due to drought. Fonterra set its initial forecast payout price to shareholder farmers at NZ$7.00 per kilogram (US$5.66 per kg) of milksolids for the 2013/14 season beginning in July, well above its expected NZ$5.80 payout for this season. Benchmark global dairy prices set at Fonterra’s fortnightly auctions have soared in recent months to lifetime highs, pushed higher by rising demand from Asia, particularly China, and lower volumes. Analysts said the payout forecast was

higher than expected, and would boost New Zealand’s economy by more than 1 percent. The dairy sector generates more than 7 percent of the country’s GDP. “The change in forecast alone will add the best part of NZ$2.7 billion to the economy in the next 18 months, equivalent of about 1.25 percent of GDP,” BNZ economist Doug Steel said. The rise in the payout forecast buoyed Fonterra’s shareholder fund, an investment scheme available to outside investors, which rose 2.5 percent to NZ$7.80, not far off a record high touched last week. Fonterra said a drought in key North Island dairying regions that sapped production in New Zealand earlier this year, and a slow start to the European dairy season due to cold weather would constrain global production growth this year. “Although we are seeing modest production growth in the USA, recent cold conditions in Europe have had a negative impact on crops and dairy, and the outlook remains mixed,” chief executive Theo Spierings said in a statement. Milk production from the 15 largest exporters is forecast to grow 0.5 percent in 2013, compared with 1.8 percent growth last year, he said. Chairman John Wilson said he

expected New Zealand’s domestic production to be steady in 2013/14. “The general consensus is that dairy commodity prices have peaked but will continue at or near current levels until the fourth quarter of 2013,” Mr Wilson said in the statement. “Most external forecasts point to prices remaining relatively strong through 2014.” “Last year we were up 11 percent, this year we’re probably going to be 1.5 percent to 2 percent down on last year … Our forecast for next year, we would expect to be similar to this year,” he told Reuters in a phone interview. Higher dairy prices could squeeze margins and weigh on earnings in the first half of 2013/14, as it meant the company was paying higher ingredients costs, Fonterra added. Reuters

KEY POINTS Fonterra sets payout price at NZ$7.00 per kg Global dairy prices hit record Dairy sector generates 7 pct of NZ’s GDP NZ’s domestic production to be steady – chairman

May 30, 2013

Asia

SoftBank-Sprint deal clears security hurdle Companies reach deal with U.S. over security concerns Alina Selyukh and Nathan Layne

ZTE because it said potential Chinese state influence on the companies posed a threat to U.S. security. SoftBank uses equipment made by ZTE and Huawei in Japan. In an email, Huawei’s U.S.-based spokesman William Plummer said: “No matter who wins the bid for Sprint, the future Sprint network will be sourced, in part, from China, just as are the networks of AT&T and Verizon and every other carrier. Every telecom infrastructure vendor, regardless of geography of headquarters, conducts R&D, codes software and manufactures gear… in China. “Suggestions that networks and data will somehow be made safer by blackballing vendors based on geography of headquarters are either uninformed or dissembling,” Mr Plummer added. Industry experts say the U.S. Federal Communications Commission is unlikely to rule before Sprint makes a final choice of buyer and the inter-agency Committee on Foreign Investment in the United States (CFIUS) completes its own review. Sprint shareholders are due to vote on the SoftBank offer on June 12.

outh Korea’s National Pension Service, the nation’s biggest investor, cut its five-year target for investment returns to account for slowing economic growth. The agency, which had about US$359 billion in assets as of March, is targeting returns on its stock, bond and property investments of 6.1 percent for 2014-2018, down from 6.6 percent announced last year for 2013-2017, according to a statement released yesterday by the Ministry of Health and Welfare, which oversees the NPS. The lower objective comes after the government cut its forecast for 2013 gross domestic product on March 29 to 2.3 percent from 3 percent. The Finance Ministry unveiled a US$15 billion supplementary budget on April 16 to support exporters pressured by a weaker Japanese yen and revive an economy that grew last year at the slowest pace since 2009. “The ministry lowered the return target rate on investments for 2014-2018 because we look at the nation’s GDP and the inflation data when setting the target,” Baek Hyoung Ki, an official at the national pension finance division of the health ministry, said by phone. The NPS, which named a new chairman last Friday, has been seeking to boost its equity holdings and lower its bond investments to raise returns for its members. Its latest five- year asset allocation plan calls for the pension fund to increase stocks to more than 30 percent of assets by the end of 2018 from 26.7 percent in 2012, according to yesterday’s statement. The pension service is targeting bonds to take up less than 60 percent of assets by 2018 from 64.8 percent last year, the statement. Bonds accounted for 68.7 percent of assets at the end of 2011, while equities represented 23.5 percent. Central bank data on April 25 showed South Korea’s economy grew 0.9 percent in the first quarter, the most in two years, after the government announced its stimulus package.

Reuters

Bloomberg News

print Nextel Corp and Japan’s SoftBank Corp have reached an agreement with U.S. authorities on the national security aspects of the Japanese firm’s pending US$20.1 billion deal to win control of the U.S. wireless carrier, people familiar with the matter said. As a part of that agreement, the U.S. government will have a veto over new equipment purchases by Sprint in certain circumstances if the two companies merge, one source said. The government will also establish a four-member oversight committee to make sure the companies abide by their national security promises. A Sprint board member will sit on that committee, said the source, who did not want to be named because the information was not public. Formal announcement of the highly unusual agreement – drawn up amid fears of Chinese espionage – was likely yesterday U.S. time, four sources told Reuters. Japanese mobile operator SoftBank agreed to buy a 70 percent stake in Sprint last October. That deal faces a challenge from Dish Network Corp, a U.S. satellite TV provider which last month launched a rival US$25.5 billion bid for Sprint. “The agreement would dissolve a sense of uncertainty over SoftBank,” said Tomoaki Kawasaki, a Tokyobased analyst at Iwai Cosmo Holdings Inc. “Cross-border purchases don’t always enjoy smooth sailing.”

Dish warning Dish has taken out full-page ads in Washington newspapers warning that a SoftBank-Sprint merger would threaten U.S. national security. U.S. Senator Charles Schumer expressed strong concern last Friday about the proposed SoftBank-Sprint merger, warning it could expose the United States to Chinese cyber attacks. Sources said SoftBank agreed

S.Korea’s pension fund lowers return target

SoftBank to buy a 70 percent stake in Sprint

with U.S. authorities to remove equipment made by China’s Huawei Technologies Co Ltd from Sprint and Clearwire Corp’s networks if the Japanese company completed its deal by the end of 2016. SoftBank president Masayoshi Son has said he will pull equipment made by China’s ZTE Corp if asked by U.S. regulators. The House Intelligence Committee last year urged U.S. telecoms firms not to do business with Huawei and

The agreement would dissolve a sense of uncertainty over SoftBank Tomoaki Kawasaki, Iwai Cosmo Holdings

Kuroda urges flexible approach to capital controls

Haruhiko Kuroda, Bank of Japan Governor

lobal policymakers must allow some emerging countries to set capital controls to mitigate the impact from financial crisis such as those recently triggered by advanced economies, Bank of Japan Governor Haruhiko Kuroda said yesterday. Contrary to past currency crisis involving emerging economies, the epicentre of the recent turbulence was in the United States and euro zone which then transmitted to many emerging countries, Mr Kuroda told an annual forum of central bankers and academics hosted by the BOJ. “One of the causes of such international transmission of the crisis is deemed to be financial globalisation and the accompanying global upsurge of gross capital flows, which has led to increased attention over prudential capital controls,” said Mr Kuroda, a former head of

the Asian Development Bank. Global policymakers must therefore work to build a new financial system that comes to terms with capital controls, financial regulation and supervision, he told the forum that is debating the lessons from the global financial crisis. The International Monetary Fund has long emphasised the benefits of a free-flowing capital market and frowned upon countries setting capital controls. However, with the crisis stemming from the Lehman Brothers collapse and the euro-zone debt woes, the IMF has acknowledged the need for some emerging nations to set capital controls to mitigate the negative impact on their economies. “The global economy has not yet completely shook off the effects of the global financial crisis, even after five years since the onset of the crisis,” Mr Kuroda said.

May 30, 2013

Markets Hang Seng Index NAME

PRICE

DAY %

VOLUME

34.65

-1.702128

20455587

ALUMINUM CORP-H

3.03

-1.623377

8674011

BANK OF CHINA-H

3.73

-1.061008

308178997

BANK OF COMMUN-H

6.03

-1.147541

20142688

BANK EAST ASIA

30.4

-0.8156607

1855200

12.06

-2.11039

27.3

-1.265823

AIA GROUP LTD

BELLE INTERNATIO BOC HONG KONG HO

NAME CHINA UNICOM HON CITIC PACIFIC CLP HLDGS LTD

PRICE

DAY %

VOLUME

10.62

-4.496403

30534017

9.41

-0.7383966

4899421

NAME

PRICE

DAY %

POWER ASSETS HOL

73.2

-2.073579

2764501

SANDS CHINA LTD

39.7

-1.243781

7289009

SINO LAND CO

11.98

-3.231018

12335201

SUN HUNG KAI PRO

105.8

-2.488479

8444594

-2.941176

2596604

303.6

-0.1972387

4047035

20.1

-1.95122

3605717

11.66

-1.186441

9070283

69.9

-5.668016

14906353

69.2

-0.9305655

3277041

CNOOC LTD

13.94

-1.692525

51657006

COSCO PAC LTD

11.22

-1.405975

9814396

24473675

ESPRIT HLDGS

12.04

1.176471

17396497

12497701

HANG LUNG PROPER

28.55

-3.547297

6048733

TINGYI HLDG CO

SWIRE PACIFIC-A TENCENT HOLDINGS

14.8

0.2710027

5765731

HANG SENG BK

126.2

-1.713396

1066013

WANT WANT CHINA

111.5

-1.848592

8631387

HENDERSON LAND D

56.15

-2.347826

8618908

WHARF HLDG

CHINA COAL ENE-H

5.23

-2.425373

27621737

CHINA CONST BA-H

6.32

-1.404056

210488396

CATHAY PAC AIR CHEUNG KONG

CHINA LIFE INS-H

HENGAN INTL

86.8

-2.142052

1048689

HONG KG CHINA GS

22.85

-0.867679

7335505

HONG KONG EXCHNG

130.5

-1.211204

4812500

HSBC HLDGS PLC

85.75

-1.436782

14048237

20.7

-1.662708

35148982

1.5625

4937414

82.65

-1.136364

14294953

HUTCHISON WHAMPO

82.5

-2.019002

4273164

-3.157895

26551403

IND & COMM BK-H

5.42

-1.454545

287366109

CHINA PETROLEU-H

8.16

-1.805054

80839711

LI & FUNG LTD

10.84

-0.1841621

12755548

CHINA RES ENTERP

25.3

-1.937984

4753815

MTR CORP

31.45

-1.71875

2210016

CHINA RES LAND

23.7

-1.25

10079224

NEW WORLD DEV

12.86

-3.016591

13166714

CHINA RES POWER

20.7

1.222494

16216267

PETROCHINA CO-H

9.27

-1.214012

71044140

CHINA SHENHUA-H

25.65

-2.656546

18765601

PING AN INSURA-H

58.75

-2.164863

14386532

CHINA MERCHANT CHINA MOBILE CHINA OVERSEAS

MOVERS

VOLUME

0 22930

INDEX 22554.93 HIGH

22928.32

LOW

22546.18

52W (H) 23944.74 (L) 18056.4

22540

27-May

29-May

Hang Seng China Enterprise Index NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.67

-1.344086

79706949

AIR CHINA LTD-H

6.71

0.9022556

ALUMINUM CORP-H

3.03

ANHUI CONCH-H BANK OF CHINA-H

NAME

PRICE

DAY %

VOLUME

CHINA PACIFIC-H

26.9

-2.536232

8861380

6040680

CHINA PETROLEU-H

8.16

-1.805054

-1.623377

8674011

CHINA RAIL CN-H

7.64

26.5

-1.851852

8777376

CHINA RAIL GR-H

3.73

-1.061008

308178997

CHINA SHENHUA-H

PRICE

DAY %

VOLUME

YANZHOU COAL-H

8.13

-1.334951

13605374

80839711

ZIJIN MINING-H

2.12

-0.9345794

33947788

-1.799486

10500772

ZOOMLION HEAVY-H

7.49

-5.429293

47270929

4.11

-0.2427184

14572124

ZTE CORP-H

12.94

-0.3081664

3629831

25.65

-2.656546

18765601

6.03

-1.147541

20142688

CHINA TELECOM-H

3.78

-3.571429

87930868

34.95

4.640719

13768751

DONGFENG MOTOR-H

12.34

1.480263

21091538

CHINA CITIC BK-H

4.42

-1.339286

39587197

GUANGZHOU AUTO-H

8.63

0.1160093

43202848

CHINA COAL ENE-H

5.23

-2.425373

27621737

HUANENG POWER-H

8.31

-0.3597122

24888378

CHINA COM CONS-H

7.44

0.1345895

15739961

IND & COMM BK-H

5.42

-1.454545

287366109

CHINA CONST BA-H

6.32

-1.404056

210488396

JIANGXI COPPER-H

15.38

-1.029601

7467973

CHINA COSCO HO-H

3.39

-1.73913

9780301

PETROCHINA CO-H

9.27

-1.214012

71044140

CHINA LIFE INS-H

20.7

-1.662708

35148982

PICC PROPERTY &

9.21

-0.9677419

12618912

CHINA LONGYUAN-H

8.19

-0.3649635

12248325

PING AN INSURA-H

58.75

-2.164863

14386532

CHINA MERCH BK-H

15.88

-2.815177

31572378

SHANDONG WEIG-H

8.48

-2.974828

6405628

CHINA MINSHENG-H

9.77

-1.512097

32015442

SINOPHARM-H

20.85

-3.69515

13889384

CHINA NATL BDG-H

8.51

-2.071346

41131668

TSINGTAO BREW-H

55.45

-0.9821429

869715

CHINA OILFIELD-H

16.8

0.7194245

5417787

WEICHAI POWER-H

BANK OF COMMUN-H BYD CO LTD-H

29.9

-1.967213

NAME

MOVERS

1 10930

INDEX 10751.29 HIGH

10928.65

LOW

10685.61

52W (H) 12354.22 (L) 8987.76

10680

27-May

1786078

29-May

Shanghai Shenzhen CSI 300 NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

6.63

0.3025719

13525681

POLY REAL ESTA-A

12.8

1.265823

82981215

CITIC SECURITI-A

13.15

-0.754717

129455666

QINGDAO HAIER-A

12.93

0.3103181

13067630

13859194

CSR CORP LTD -A

4.43

-0.4494382

44634094

QINGHAI SALT-A

23.82

-0.7086286

6561456

-0.5724098

27846961

DAQIN RAILWAY -A

7.05

0.284495

28658355

RISESUN REAL -A

16.73

0.2396645

15985581

4.166667

49221940

DATANG INTL PO-A

4.88

2.521008

19182530

SAIC MOTOR-A

15.9

2.053915

90760128

14.48

-1.29516

28763720

SANY HEAVY INDUS

9.36

-1.473684

35295424

-0.6263048

9783147

SHANG PHARM -A

12.63

-0.3157064

13919461 91459014

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.74

135766490

AIR CHINA LTD-A

5.48

-0.5444646

14499303

ALUMINUM CORP-A

4.14

-0.4807692

ANHUI CONCH-A

17.37

AVIC AIRCRAFT-A

NAME CHONGQING WATE-A

BANK OF BEIJIN-A

9.16

-0.4347826

30683117

EVERBRIG SEC -A

BANK OF CHINA-A

2.97

-0.3355705

28097825

GD MIDEA HOLDI-A

14.28

NAME

BANK OF COMMUN-A

4.76

-0.8333333

63484088

GD POWER DEVEL-A

2.72

1.115242

53698084

SHANG PUDONG-A

10.52

-0.2843602

BAOSHAN IRON & S

4.84

-0.6160164

14381786

GEMDALE CORP-A

8.09

0.3722084

80490168

SHANGHAI ELECT-A

3.96

4132345

BEIJING TONGRE-A

24.17

0.2488594

6390200

GF SECURITIES-A

14.13

-1.188811

32283875

SHANXI LU'AN -A

16.58

-1.485443

16350736

BYD CO LTD -A

GREE ELECTRIC

27.08

-1.023392

15333391

SHANXI XISHAN-A

10.67

-0.744186

13782063

GUANGHUI ENERG-A

20.87

0.7239382

21073371

SHENZEN OVERSE-A

6.6

0.456621

67637394

SUNING COMMERC-A

6.31

0.6379585

70878856

37.73

8.888889

32907589

CHINA AVIC ELE-A

27.8

1.868816

7516745

CHINA CITIC BK-A

4.43

-0.4494382

25977451

HAINAN AIRLINE-A

5.1

29887478

CHINA CNR CORP-A

4.71

-0.2118644

37002236

HAITONG SECURI-A

11.91

-0.9151414

156137187

TASLY PHARMAC-A

41.52

-0.6223073

4394972

CHINA COAL ENE-A

6.64

0.1508296

9676806

HANGZHOU HIKVI-A

38.12

6883816

TSINGTAO BREW-A

39.86

2.388903

4097042

CHINA CONST BA-A

4.84

-0.4115226

25196827

HENAN SHUAN-A

39.42

1.467181

6487748

WEICHAI POWER-A

23.66

-0.5464481

9373372

CHINA COSCO HO-A

3.42

-0.5813953

7812190

HONG YUAN SEC-A

24.74

-2.444795

25882007

WULIANGYE YIBIN

24.27

21819269

CHINA EAST AIR-A

3.11

-0.3205128

13943954

HUATAI SECURIT-A

10.58

-0.750469

69613973

YANTAI WANHUA-A

CHINA EVERBRIG-A

3.16

-0.6289308

90234117

HUAXIA BANK CO

10.84

-0.8234218

30015794

YANZHOU COAL-A

CHINA LIFE INS-A

16.79

-0.4742146

12861618

IND & COMM BK-A

4.21

0.477327

49039390

YUNNAN BAIYAO-A

CHINA MERCH BK-A

13.61

-1.090116

59622733

INDUSTRIAL BAN-A

18.73

-0.05336179

98728280

CHINA MERCHANT-A

13.48

-1.533966

35775563

INNER MONG BAO-A

28.43

-0.4203152

CHINA MERCHANT-A

30.18

-0.3631562

11616949

INNER MONG YIL-A

28.62

-0.4521739

CHINA MINSHENG-A

10.63

-1.024209

118141536

INNER MONGOLIA-A

4.93

1.859504

102066259

23485424

JIANGSU HENGRU-A

30.65

-0.03261579

4753641

CHINA NATIONAL-A

18.1

0.2214839

10471472

14.64

-0.8801625

4993016

0.5586592

1434940

ZHONGJIN GOLD

12.24

-0.4878049

22103167

25982480

ZIJIN MINING-A

3.11

-0.3205128

60081347

13950005

ZOOMLION HEAVY-A

7.11

-2.469136

118817454

ZTE CORP-A

12.4

0.4862237

32910569

11.8

-0.2535926

CHINA OILFIELD-A

17.18

0.2918856

6486147

-0.4524887

4860698

CHINA PACIFIC-A

19.05

-0.987526

17755486

JIANGXI COPPER-A

21.33

0.04690432

9908888

6.8

32195841

JINDUICHENG -A

10.91

-0.09157509

7659880

18.95

2.98913

35809945

201.49

-0.3215593

3234002

CHINA PETROLEU-A

JIANGSU YANGHE-A

CHINA RAILWAY-A

5.22

0.5780347

20132204

KANGMEI PHARMA-A

CHINA RAILWAY-A

2.88

31374957

KWEICHOW MOUTA-A

CHINA SHENHUA-A

20.78

-0.2879079

8668496

LUZHOU LAOJIAO-A

27.26

-0.03667033

8482147

CHINA SHIPBUIL-A

4.52

59982923

METALLURGICAL-A

2.06

-0.4830918

32875380

CHINA SOUTHERN-A

3.53

-0.2824859

21485488

NARI TECHNOLOG-A

23.06

-0.9875483

13110072

NINGBO PORT CO-A

2.46

-0.4048583

10620275

8.32

-1.187648

35463989

CHINA STATE -A

3.86

0.2597403

162790668

CHINA UNITED-A

3.81

-1.038961

95326507

OFFSHORE OIL-A

CHINA VANKE CO-A

12.32

-0.3236246

98852007

PETROCHINA CO-A

8.58

-0.2325581

20447549

CHINA YANGTZE-A

7.64

1.058201

12938633

PING AN BANK-A

21.28

-1.481481

53259775

11.21

2.561757

57835228

PING AN INSURA-A

40.24

-1.178782

33040795

PRICE DAY %

Volume

NAME

PRICE DAY %

Volume

CHONGQING CHAN-A

MOVERS 127

153

20 2660

INDEX 2642.561 HIGH

2657.76

LOW

2589.67

52W (H) 2791.303 (L) 2102.135

2580

27-May

29-May

FTSE Taiwan 50 Index NAME

NAME

PRICE DAY %

ACER INC

24.45

0.204918

7249667

FORMOSA PLASTIC

71.1

0.1408451

4486413

TAIWAN MOBILE CO

ADVANCED SEMICON

25.85

0.5836576

8380526

FOXCONN TECHNOLO

81.3

1.625

3876492

ASIA CEMENT CORP

37.7

0.3994674

1833048

FUBON FINANCIAL

40.65

0.9937888

ASUSTEK COMPUTER

345

0.5830904

1515503

HON HAI PRECISIO

78.3

AU OPTRONICS COR

1.449275

106021783

HOTAI MOTOR CO

319.5

CATCHER TECH

Volume

115.5

0.4347826

TPK HOLDING CO L

604

-1.145663

3867889 3093103

13955092

TSMC

111

1.369863

16781832

1.688312

44824686

UNI-PRESIDENT

5.271829

584519

60.2

0.8375209

4781529

UNITED MICROELEC

13.65

0.3676471

71219366

165

2.484472

14801012

HTC CORP

279

-1.238938

9252905

WISTRON CORP

30.65

0.1633987

9883304

CATHAY FINANCIAL

39.85

0.6313131

14175246

HUA NAN FINANCIA

17.5

1.449275

6014594

YUANTA FINANCIAL

16.45

1.230769

10060758

CHANG HWA BANK

17.05

0.2941176

7609737

LARGAN PRECISION

990

-1

1026863

YULON MOTOR CO

51.1

0.9881423

2149368

CHENG SHIN RUBBE

93.6

0.6451613

5053148

LITE-ON TECHNOLO

47.9

9648208

CHIMEI INNOLUX C

20.7

3.5

66228024

MEDIATEK INC

364

0.2754821

4213972

CHINA DEVELOPMEN

8.79

1.501155

44939468

MEGA FINANCIAL H

20953870

CHINA STEEL CORP

25.75

0.7827789

13888586

NAN YA PLASTICS

63.9

2.24

8139520

CHINATRUST FINAN

18.95

2.432432

38289735

PRESIDENT CHAIN

185

0.2710027

878935

CHUNGHWA TELECOM

97.1

0.1030928

4736151

QUANTA COMPUTER

65.8

0.6116208

6333433

COMPAL ELECTRON

18.9

0.265252

22733899

SILICONWARE PREC

DELTA ELECT INC

142

0.7092199

4835141

SINOPAC FINANCIA

14.75

1.027397

10710536

FAR EASTERN NEW

32.1

1.904762

6094899

SYNNEX TECH INTL

42.75

2.39521

15832496

FAR EASTONE TELE

73.8 -0.2702703

8002455

TAIWAN CEMENT

39.85

1.399491

3925004

35.3 -0.1414427

MOVERS

3 5790

INDEX 5781.37

4772911

FIRST FINANCIAL

18.3

0.5494505

4910456

TAIWAN COOPERATI

17.3

0.5813953

5937832

FORMOSA CHEM & F

72.8

1.960784

2124989

TAIWAN FERTILIZE

76.7

1715369

FORMOSA PETROCHE

0.4962779

1174082

TAIWAN GLASS IND

29.5

1.200686

481913

HIGH

5782.98

LOW

5702.48

52W (H) 5896.71 (L) 4719.96

5690

27-May

29-May

May 30, 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 39.6

62.20

20.5

39.5

61.95

20.4

39.4

61.70

39.3

61.45

20.3 20.2

Max 39.55

average 39.418

Max 40.25

average 39.889

Min 39.2

Last 39.4

Min 39.6

39.2

average 61.618

PRICE

40.2

21.65

40.0

21.40

39.8

21.15

Max 21.85

average 21.175

DAY %

YTD %

(H) 52W

Min 20.9

Last 21

(L) 52W

WTI CRUDE FUTURE Jul13

94.39

-0.652552432

0.736392743

100.4000015

81.5

BRENT CRUDE FUTR Jul13

103.87

-0.345390003

-3.295782516

115.9300003

96.04000092

GASOLINE RBOB FUT Jun13

284.6

-0.238362311

-0.565998183

324.119997

235.9499931

872.25

-0.513259196

-4.174677286

987.5

814

4.159

-0.359367513

18.55758267

4.457000256

3.203999996

290.03

-0.216748091

-3.567628674

323.8899946

258.589983

GAS OIL FUT (ICE) Jul13 NATURAL GAS FUTR Jun13 HEATING OIL FUTR Jun13 Gold Spot $/Oz

1386.33

0.4405

-16.7099

1796.08

1322.06

Silver Spot $/Oz

22.311

-0.1383

-25.9017

35.365

20.3395

Platinum Spot $/Oz

1460.7

0.731

-3.7589

1742.8

1374.55

Palladium Spot $/Oz

751.58

2.9421

7.4207

786.5

553.75

LME ALUMINUM 3MO ($)

1852.5

0.679347826

-10.63675832

2200.199951

1809

LME COPPER 3MO ($)

7323

0.328812166

-7.666120287

8422

6762.25

LME ZINC

1871

0.835354352

-10.04807692

2230

1745

14875

0.472813239

-12.8077374

18920

14609 14.79500103

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul13

ASIA PACIFIC

CROSSES

AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP

15.17

-0.979112272

-3.651953001

17.07500076

-0.226860254

-8.336807003

665

512

689.5

-0.612612613

-13.13385827

900

664.75

SOYBEAN FUTURE Jul13

1505.75

-0.231903263

7.919727647

1605.75

1225

COFFEE 'C' FUTURE Jul13

126.25

-0.158165283

-15.58007355

202.1999969

125.7999954

NAME

16.55999947

ARISTOCRAT LEISU

69.94999695

CROWN LTD

Dec13

WHEAT FUTURE(CBT) Jul13

SUGAR #11 (WORLD) Jul13

16.66

COTTON NO.2 FUTR Jul13

81.34

-0.358851675 -0.098255957

-15.60283688 5.815012359

23.05999947 94.19999695

World Stock Markets - Indices NAME

20.90

COUNTRY MAJOR

549.75

CORN FUTURE

61.20

Max 20.45

average 20.281

Min 20

23.6

23.5

23.4

Max 23.6

average 23.472

Min 23.35

Last 23.45

23.3

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

0.9584 1.5069 0.9705 1.2888 101.62 7.997 7.7637 6.1269 56.2275 30.2 1.2694 29.987 42.485 9815 97.39 1.25085 0.85529 7.8942 10.3067 130.97 1.0301

-1.0122 -0.2581 -0.237 -0.3171 0.3739 -0.0063 -0.0039 -0.0832 -0.4669 -0.6291 -0.3781 -0.1667 -1.2946 0.4789 1.4057 0.0783 0.0596 0.0798 0.3134 0.6948 0

-7.6508 -6.8435 -5.6775 -2.2896 -15.2726 -0.1726 -0.1687 1.6925 -2.192 1.2583 -3.7813 -3.1814 -3.4836 -0.2241 -8.2791 -3.4672 -4.6616 4.0954 2.1704 -13.2855 -0.0194

1.0625 1.6381 0.9972 1.3711 103.74 8.0111 7.7676 6.3964 57.3275 32 1.2971 30.203 43.76 9928 105.433 1.265 0.88151 8.4957 10.9254 133.8 1.032

0.9528 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1203 51.3863 28.56 1.2152 28.913 40.54 9329 74.482 1.20054 0.77553 7.7018 9.6245 94.12 1.0289

Macau Related Stocks PRICE

DAY %

YTD %

(H) 52W

(L) 52W

4.3

6.17284

36.50793

4.49

2.29

VOLUME CRNCY 6442544

12.95

0.9353079

21.36832

13.75

8.06

2950040

AMAX HOLDINGS LT

0.95

13.09524

-32.14286

1.72

0.75

4472925

BOC HONG KONG HO

27.3

-1.265823

13.27801

20.85

12497701

CENTURY LEGEND

0.31

1.639344

16.98114

0.42

0.215

464000

CHEUK NANG HLDGS

5.78

-0.6872852

-3.505839

6.74

2.8

177427

CHINA OVERSEAS

-3.157895

-0.4329021

25.6

15.223

26551403

CHINESE ESTATES

13.58

-1.164483

11.9592

14.12

7.901

704500

CHOW TAI FOOK JE

9.8

-1.10999

-21.22186

13.4

8.4

5683100

EMPEROR ENTERTAI

2.65

-2.573529

40.21164

2.73

1.12

1955000

FUTURE BRIGHT

2.51

3.719008

107.0912

2.732

0.765

7036000

GALAXY ENTERTAIN

39.4

0.5102041

29.81878

40.65

16.94

6712340

126.2

-1.713396

6.318453

132.8

99.2

1066013

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

15409.39

0.6945652

17.59177

15542.4

12035.08984

NASDAQ COMPOSITE INDEX

3488.888

0.8598659

15.5447

3532.038

2726.68

FTSE 100 INDEX

6685.94

-1.124961

13.36309

6875.62

5229.76

HANG SENG BK

DAX INDEX

8416.44

-0.7597098

10.56239

8557.86

5914.43

HOPEWELL HLDGS

28.1

-3.767123

-15.48872

35.3

19.049

1780500

HSBC HLDGS PLC

85.75

-1.436782

5.473551

90.7

59.8

14048237 3145000

NIKKEI 225

14326.46

0.101174

37.8183

15942.6

8238.96

HANG SENG INDEX

22554.93

-1.611045

-0.4501505

23944.74

18056.4

CSI 300 INDEX

2642.561

-0.06799379

4.74084

2791.303

2102.135

HUTCHISON TELE H

4.42

-0.4504505

24.15731

4.66

2.98

LUK FOOK HLDGS I

20.15

-2.657005

-17.41803

30.05

14.7

1274000

MELCO INTL DEVEL

17.1

-1.724138

89.78912

18.18

5.12

2768309 3820137

TAIWAN TAIEX INDEX

8337.9

0.9058399

8.291452

8439.15

6857.35

MGM CHINA HOLDIN

20.3

1.703407

52.88125

20.85

9.509

KOSPI INDEX

2001.2

0.7541964

0.2078016

2042.48

1758.99

MIDLAND HOLDINGS

3.37

-0.8823529

-8.91892

3.25

1066000

S&P/ASX 200 INDEX

4974.728

0.08200131

7.007557

5249.6

3985

NEPTUNE GROUP

0.183

2.234637

20.39474

0.226

0.084

70812500

5207.675

0.6073913

20.64055

5251.296

3635.283

NEW WORLD DEV

12.86

-3.016591

6.988349

15.12

13166714

FTSE Bursa Malaysia KLCI

1782.75

0.3710251

5.55375

1826.22

1552.34

SANDS CHINA LTD

39.7

-1.243781

16.93667

43.7

20.65

7289009

SHUN HO RESOURCE

1.53

9.285716

1.67

1.03

32000

NZX ALL INDEX

960.787

0.196161

8.926223

998.487

755.149

SHUN TAK HOLDING

4.12

0.7334963

-1.670646

4.65

2.56

3593000

PHILIPPINES ALL SHARE IX

4432.17

1.238017

19.82141

4571.4

3279.09

SJM HOLDINGS LTD

9727000

JAKARTA COMPOSITE INDEX

20.0

Last 20.3

Currency Exchange Rates

NAME

METALS

Last 61.35

21.90

Commodities ENERGY

Min 61.3

40.4

39.6

Last 39.7

Max 62.35

20.1

SMARTONE TELECOM

-2.552204

16.66667

22.7

12.34

13.6

-0.8746356

-3.40909

17.38

12.5

886062

23.45

0.2136752

11.93317

26.5

14.62

3531350

HSBC Dragon 300 Index Singapor

646.33

-0.22

4.06

STOCK EXCH OF THAI INDEX

1611.72

-0.4846966

15.7903

1649.77

1099.15

HO CHI MINH STOCK INDEX

515.09

-0.2401565

24.49907

520.36

372.39

ASIA ENTERTAINME

4.16

-4.805492

35.94771

5.18

2.4

914981

BALLY TECHNOLOGI

56.71

1.267857

26.83964

57.17

41.74

610917

Laos Composite Index

1366.28

0.6749587

12.47232

1455.82

980.83

BOC HONG KONG HO

3.52

14.65798

3.6

2.7

15458

GALAXY ENTERTAIN

5.1

1.39165

28.46348

5.16

2.25

10650

INTL GAME TECH

18.81

3.068493

32.74524

18.81

10.92

3115892

JONES LANG LASAL

92.94

0.5408914

10.72194

101.46

61.39

325051

LAS VEGAS SANDS

58.74

2.067767

27.25303

60.54

32.6127

4838199

MELCO CROWN-ADR

23.76

2.413793

41.09264

25.15

9.13

3109007

MGM CHINA HOLDIN

2.6

40.54054

2.67

1.36

500

MGM RESORTS INTE

15.27

2.277294

31.18556

15.95

8.83

8611851

SHFL ENTERTAINME

16.95

1.801802

16.89655

17.2199

11.75

257588

SJM HOLDINGS LTD

2.82

8.461538

22.07793

2.99

1.65

8350

140.58

1.943437

24.97111

144.99

84.4902

1036358

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

WYNN MACAU LTD

WYNN RESORTS LTD

AUD HKD

USD

May 30, 2013

Opinion measures encouraging workers to telecommute. As these measures take effect, self-sufficient satellite towns will likely develop, reducing transportation-related energy consumption further, while fostering a more active civil society. Singapore is leading the way in another area as well: production and distribution of potable recycled water. Many cities worldwide are following its example, expanding their water catchment and treatment programmes.

Building communities

The Human City Parag Khanna

Senior fellow at the New America Foundation and Director of the Hybrid Reality Institute

he tangled web of international organisations that constitutes global governance has become so remote and ineffective that few count on it to deliver results anymore. Now, after decades of turf wars and self-marginalisation, international organisations must rally around an increasingly pressing global priority: sustainable urbanisation. The world is undergoing an unprecedented and irreversible wave of urbanisation, with the share of the global population living in cities set to reach 60 percent by 2030. But rapid urbanisation is driving up industrial fossil-fuel consumption and household water consumption, and is increasing demand for food in areas where arable land is scarce. In short, the current urbanisation trajectory is not sustainable. But existing efforts to alter the situation remain woefully inadequate. While the United Nations General Assembly has tasked its agency for human settlements, UN-HABITAT, with promoting sustainable urbanisation, the agency lacks the influence to ensure that this vital issue makes it onto the global agenda. Moreover, international development players – including UN agencies, NGOs, corporate citizenship programmes, and other charitable organisations – rarely

coordinate their activities, even though their interventions are increasingly concentrated in densely populated cities. Given that promoting sustainable urbanisation and improving coordination would bolster progress in other priority areas (including women’s rights, climate change, youth unemployment, and literacy), sustainable urbanisation must become a bureaucratic priority. And it must be complemented by a technological disruption, with investments channelled toward developing and distributing innovations that would make cities more liveable, efficient, and sustainable. In fact, many useful innovations, such as energy-generating building materials and zero-emissions transportation, already exist; they simply need to be made accessible to those who need them most. Devices like smallscale water-filtration systems, portable heart monitors, and low-cost tablet computers are already dramatically improving the lives of the world’s poorest citizens and helping to level the economic playing field.

increasingly diverse array of sources to urban populations worldwide. The tools needed to make urban life more sustainable are no longer flowing only from North to South and West to East. China has taken the lead in exporting solar photovoltaic cells, while clean-tech parks are arising even in the Arab world. Governments, companies, supply-chain managers, corporate-citizenship strategists,

The ‘smartest’ cities… are the places where technology and public policy support citizens’ welfare and aspirations

Using new tools The future impact of global governance rests on forging new alignments that facilitate the flow of vital knowledge and technologies from an

NGOs, and others should commit to reducing their carbon footprints and to leveraging their resources to contribute to sustainable urbanisation. Opportunities to make such

contributions are appearing constantly – and across all sectors. In construction, for example, contractors are forming partnerships with labs to test materials that better reflect heat while absorbing energy to power cooling systems, and utility companies are leveraging new software tools to deploy smart meters in homes and offices. Two U.S. cities – New York and Seattle – have raised efficiency standards for new construction to record levels. Similarly, automobile manufacturers, mobilityservices companies, and local governments are working together to advance sustainable transportation by providing incentives for efficient nonownership of vehicles. As a result, carpooling is gaining prevalence in cities like Berlin. Furthermore, MIT has developed the foldable electric CityCar, four of which can fit into a conventional parking space. At last year’s Rio+20 conference, the eight largest multilateral development banks pledged US$175 billion to develop sustainable transportation. Information technology can also reduce stress on the transportation system. For example, Singapore is harnessing its near-complete fibre-optic network to reduce urban congestion by introducing a spate of

Meanwhile, vertical farm experiments – which aim to augment urban food supplies by cultivating crops in skyscraper greenhouses – are proliferating from the American Midwest to Osaka, Japan. And India has become a leader in converting biomass and food waste into energy. Of course, the billions of farmers and villagers worldwide should not be forgotten. Interventions like rural electrification, the provision of drought-resistant seeds and agricultural technology, and the expansion of micro-insurance are vital not only to rural populations’ welfare, but also to catalyse a new “Green Revolution,” without which city dwellers will face severe food shortages. With new, innovative solutions appearing every day, the real challenge lies in bringing them to scale – and that requires international cooperation. But the “smartest” cities are not necessarily the most technologically advanced. Rather, they are the places where technology and public policy support citizens’ welfare and aspirations. This crucial fact will guide discussion at the New Cities Foundation’s second annual summit in June – the theme of which is “The Human City” – and should be at the heart of sustainable urbanisation initiatives. Making sustainable urbanisation a strategic priority might be the only way to overcome the interrelated crises of jobless growth, youth unemployment, and income inequality. While some factory jobs can be outsourced or automated, robots cannot yet retrofit buildings, install solar PV cells on rooftops, or construct vertical farms. Even the movement in some cities, such as Singapore and Tokyo, toward driverless subways or cars will demand substantial labour to build and manage the relevant systems. In the future, as in the past, the most labour-intensive jobs will involve building homes, production facilities, and, in turn, communities. © 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.

Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com

May 30, 2013

Opinion Business

wires

Leading reports from Asia’s best business newspapers

Bangkok Post

Misreading the global economy Ashoka Mody

Former mission chief for Germany and Ireland at the IMF, is currently Visiting Professor of International Economic Policy, Princeton University

Thailand’s Finance Ministry will amend one of its ministerial regulations so measures to control capital inflows and outflows can be better enforced. Deputy Prime Minister Kittiratt Na-Ranong said that the amendment is expected to be effective in the next few days. After the new rule takes effect, the government can issue measures to control capital flows once the Bank of Thailand (BoT) proposes them to the cabinet. He said a mechanism to curb capital inflows and outflows is needed because the government projected a further appreciation of the baht over the remainder of the year.

stimulus programmes wear off, new weaknesses are emerging, such as persistent inflation in India and credit misallocation in China. Given this, the notion that emerging economies will recapture the growth levels of the bubble years seems farfetched. Economic forecasts rest on the assumption that economies ultimately heal themselves. But economies’ powerful self-healing capabilities work slowly. More problematic, a misdiagnosis can lead to treatments that impair the healing process.

Taipei Times Taiwan’s Executive Yuan unveiled a package of 12 measures to boost what Premier Jiang Yi-huah has described as the nation’s “suffocated” economy to ensure that GDP growth reaches the government’s 3 percent growth target this year. “Analysts have been forecasting a turnaround in the second half of this year and we will continue to take steps to strengthen the economy and attain 3 percent GDP growth,” Mr Jiang said. The Executive Yuan is to invest NT$3.24 billion (US$108 million) to implement the 12 measures, some of which are to last for five years.

Jakarta Globe Indonesia’s emerging wealthy should shift their portfolio investment target to an equity market offering high returns rather than placing assets in conventional instruments, according to recent research. Steven Suryana, head of wealth management at HSBC Indonesia, said people with liquid assets of more than 500 million rupiah (US$51,000) in Indonesia still have 70 percent of their assets in cash and time deposits. But the high interest regime is now gone, providing less return for investors. Savings deposits at banks carry a 6 percent rate, down from 9 percent five years ago.

Asahi Shimbun The Japanese government sees enhanced economic cooperation with Myanmar as a good opportunity to lessen its heavy dependence on China. “The next member of a coalition to contain China must be Myanmar,” a senior government official was quoted as saying. Japan’s investments in Myanmar since 1989 have totalled about US$260 million, a fraction of the US$14 billion that China has pumped into the country. Mr Abe pledged Japan’s public and private support for the country’s economic development.

n April 2010, the International Monetary Fund’s World Economic Outlook offered an optimistic assessment of the global economy, describing a multispeed recovery strong enough to support roughly 4.5 percent annual GDP growth for the foreseeable future – a higher pace than during the bubble years of 2000-2007. But, since then, the IMF has steadily pared its economic projections. Indeed, this year’s expected GDP growth rate of 3.3 percent – which was revised downward in the most recent WEO – will probably not be met. Persistent optimism reflects a serious misdiagnosis of the global economy’s troubles. Most notably, economic projections have vastly underestimated the severity of the euro zone crisis, as well as its impact on the rest of the world. And recovery prospects continue to depend on the emerging economies, even as they experience a sharp slowdown. The WEO’s prediction of a strengthening recovery this year continues the misdiagnosis. European Central Bank President Mario Draghi’s announcement last summer that the ECB would do “whatever it takes” to preserve the euro reassured financial markets. But, as pressure from financial markets has eased, so has European leaders’ incentive to address problems with the euro zone’s underlying economic and political dynamics. Easy ECB liquidity is now sustaining a vast swath of Europe’s banking system. The euro zone is operating under the pretence that public and private debts will, at some point, be repaid, although, in

many countries, the distress now is greater than it was at the start of the crisis almost five years ago. As a result, banks, borrowers, and governments are dragging each other into a vicious downward spiral. Politicians have exacerbated the situation by doubling down on fiscal austerity, which has undermined GDP growth while failing to shrink government debt/GDP ratios. And no decisive policy action aimed at healing private balance sheets appears imminent. Moreover, Europe’s problems are no longer its own. Europe’s extensive regional and global trade networks mean that its internal problems are impeding world trade and, in turn, global economic growth. In 2012, world trade expanded by only 2.5 percent, while global GDP grew at a disappointing 3.2 percent rate.

Healing process Periods in which trade grows at a slower pace than output are rare, and reflect severe strain on the global economy’s health. While the trauma is no longer acute, as it was in 2009, wounds remain – and they are breeding new pathologies. Unfortunately, the damage is occurring quietly, enabling political interests to overshadow any sense of urgency about the need to redress the global economy’s intensifying problems. Against this bleak background, it is easy to celebrate the success of emerging markets. After all, emerging and developing economies are growing much faster than the advanced countries. But even the world’s most

dynamic emerging markets – including China, Brazil, and India – are experiencing a sharp deceleration that cannot be ignored. Consider India, where growth is now running at an annualised rate of 4.5 percent, down from 7.7 percent annual growth in 2011. To be sure, the IMF projects that India’s economy will rebound later in 2013, but the basis for this optimism is unclear, given that all indicators so far suggest another dismal year. The emerging economies’ supposed resilience, which has buoyed economic forecasts in recent years, needs to be reassessed. Like the advanced economies, emerging economies experienced a boom in 2000-2007. But, unlike the advanced economies, they maintained high GDP growth rates and relative stability even at the height of the crisis. This was viewed as powerful evidence of their new economic might. In fact, it was largely a result of massive fiscal stimulus and credit expansion. Indeed, as the effects of

Economies’ powerful selfhealing capabilities work slowly. More problematic, a misdiagnosis can lead to treatments that impair the healing process

Overly optimistic economic projections based on mistaken assessments of the global economy’s ailments thus threaten recovery prospects – with potentially far-reaching consequences. In Europe, the banks’ wounds must be closed – weak banks must be shut down or merged with stronger banks – before recovery can begin. This will require an extensive swap of private debts for equity. For the global economy, the malaise reflected in anaemic trade growth calls for coordinated fiscal stimulus by the world’s major economies. Otherwise, the risk of another global recession will continue to rise. © Project Syndicate

May 30, 2013

Closing Suntory unit gets nod for US$4.7 bln IPO Net firm accused of laundering US$6 bln Suntory Holdings Ltd is poised to raise as much as 476 billion yen (US$4.7 billion) by listing shares of its nonalcoholic beverage business in what would be Japan’s largest IPO this year. The company has set a tentative price of 3,800 yen a share for the July 3 Tokyo listing, according to a filing yesterday with Japan’s Finance Ministry. The drinks maker will set a price range on June 17 with final pricing expected on June 24. The Suntory Beverage & Food unit may sell as many as 125.2 million shares including over allotment, according to Bloomberg calculations.

The Liberty Reserve digital money service laundered more than US$6 billion in criminal cash, U.S. authorities have said. Police raids in 17 countries scooped up Liberty Reserve’s owners, operators and its computer hardware. The U.S. Department of Justice said it was the “largest international moneylaundering prosecution in history”. Liberty had about a million users and processed more than 55 million illegal transactions, said DoJ court papers. The service’s operators, including founder Arthur Budovsky, will face charges of money laundering and operation of an unlicensed money transmission system.

OECD slashes world growth forecast Euro zone seen mired in recession, U.S and Japan to lead recovery

into 2013 as a marked easing in inventory accumulation slows capital formation, while Beijing’s campaign targeting official extravagance cools consumption, the OECD said. “In 2014, faster world trade may also boost the economy, bringing growth to 8.4 percent. With more limited export market share gains than in the past, the current account surplus may shrink anew,” the OECD said. With economies in most countries still in recovery mode, the OECD said central banks should keep monetary policies easy while the European Central Bank should even dramatically step up its efforts to get credit flowing to the economy. The OECD called on the ECB to make banks pay for holding deposits with it and urged it to buy assets such as securitised loans from creditstarved small and medium-sized firms, two options ECB policymakers say they are currently considering. In the case of the U.S. Federal Reserve, the OECD said it may soon be justified to begin curbing its purchases of government bonds and mortgage-backed securities However, it warned that a slower pace of purchases would have to be carefully flagged to markets in order to avoid an abrupt sell-off by other investors that might cause yields to spike dangerously higher.

hailand’s central bank cut its benchmark interest rate yesterday for the first time this year as slowing economic growth bolstered government calls for easing. The Bank of Thailand lowered its one-day bond repurchase rate by a quarter of a percentage point to 2.5 percent, it said in Bangkok. The first reduction since October was a unanimous decision, it said. The Southeast Asian nation’s growth slowed more than estimated to 5.3 percent last quarter from 19 percent the previous three months, increasing scope for officials to join a global wave of monetary easing. Governor Prasarn Trairatvorakul, who has resisted repeated calls from Finance Minister Kittiratt Na-Ranong for rate cuts to tame a currency that reached a 16-year high in April, said last week policy could be loosened if the economy loses momentum. “The central bank may need to ease to ensure continuity of the economic recovery,” said Usara Wilaipich, a Bangkok-based economist at Standard Chartered Plc, who predicted the decision correctly. “It could also help reduce pressure on the baht to appreciate. But the central bank may also want to consider other macro-prudential measures to reduce concern about the risk of bubbles and other side effects from a rate cut.” The baht has retreated more than 5 percent from a level of 28.56 per dollar in April, the strongest since the 1997 Asian financial crisis, and is Asia’s best-performing currency this year after the Chinese yuan, data compiled by Bloomberg show. Thai Prime Minister Yingluck Shinawatra’s administration has raised minimum wages and handed incentives to rice farmers and first-time car buyers to spur growth after the floods of 2011, and plans to spend 2 trillion baht (US$67 billion) on highspeed rail links to major cities from Bangkok over the next seven years. Fitch Ratings raised its assessment in March, citing a resilient economy and a more stable political climate. The government last week lowered its 2013 expansion forecast to as little as 4.2 percent and cut its target for export growth to 7.6 percent from 11 percent. Thailand’s Permanent Secretary for Commerce Vatchari Vimooktayon said last week the baht’s strength had begun to affect exports.

Reuters

Bloomberg News

Euro zone warned against becoming complacent

he recession-hit euro zone w ill f all furthe r b ehin d a generally improving United States and a rebounding Japan this year, the Organization for Economic Cooperation and Development said yesterday, cutting its global growth forecasts. In its twice-yearly Economic Outlook, the OECD forecast the world economy would grow 3.1 percent this year before accelerating to 4 percent in 2014. The estimates marked a slightly more pessimistic view after in November the Paris-based think tank forecast global growth of 3.4 percent this year and 4.2 percent next year. The United States was seen driving global growth with the world’s biggest economy projected to expand 1.9 percent this year and then accelerating to 2.8 percent in 2014, which would be the country’s best rate since 2005. In contrast, the euro zone was estimated to remain in recession for a second year. The OECD sees its economy contracting 0.6 percent in 2013 and then returning to growth next year with a rate of 1.1 percent. However, the outlook diverged widely within the 17-nation bloc with regional powerhouse Germany seen achieving growth of 0.4 percent and rebounding to a rate of 1.9 percent in 2014.

After years of debt crisis testing the euro zone’s capacity to hold together, OECD chief economist Pier Paolo Padoan said that risks to the economic outlook have finally begun to recede. However, he warned that the easing in the euro zone’s debt crisis may lead to reform fatigue. “As far as Europe is considered, we are concerned that complacency could set in,” Mr Padoan told Reuters. “That is a new risk that is coming up in Europe.” Unlike the United States in the 2008-09 financial crisis, the euro zone still needed to tackle problems in its financial sector holding back the flow of credit, he said.

Economic stimulus Lifting its estimate for Japan, the OECD said that the central bank’s pledge to ramp up its monetary stimulus aggressively would help its economy grow 1.6 percent this year. The OECD took a more pessimistic view on China, forecasting that its economy would grow 7.8 percent this year, down from a previous estimate of 8.5 percent. Growth in the world’s secondlargest economy may recover to 8.4 percent in 2014 on increased policy support, it said. Weaker domestic demand has become the main drag on growth

Thailand cuts rate as economy slows T