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Wednesday May 8, 2013
Editor-in-chief Tiago Azevedo
Deputy editor-in-chief
Vitor Quintã
MOP 6.00
April 19, 2013
D
Year II
Number 278
iscussions with five international companies over possible investment in Viva Macau were ongoing before the low-cost was grounded in 2010. Documents seen by Business Daily reveal that Malaysia’s AirAsia Berhad and investment bank Goldman Sachs (Asia) LLC were among the interested parties. AirAsia and Viva Macau’s parent company signed a letter of intent that would allow the Malaysian carrier to get a 49 percent stake. Viva Macau would have become an AirAsia ‘franchise’. But AirAsia’s office in Macau downplayed the document, stressing that it drafted a report advising against the acquisition because there was ‘not much potential’ for low-costs here.
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June payout hike for Macao Water
Hang Seng Index
Macao Water Supply Co Ltd could start receiving more money from the government for its services next month, the Maritime Administration, said. But the authorities warned that the increase would be smaller than the 26.2 percent the company had asked for a year ago. Three months after Macao Water criticised the government for the delay in approving its application, the supplier has softened its stance. Executive director Felix Fan Xiaojun says any increase can help and pledged to reduce costs in the meantime.
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MICE cooperation with Premium mass Zhuhai on the table bets grow higher
HSI - Movers Name
Macau and Zhuhai are holding talks on coorganising conventions and exhibitions in order to make the best of each side’s advantages, an industry insider says. The city’s high-end convention venues and Zhuhai’s heavy industry trade show area could be a winning ticket. And the attraction will only grow higher when the exhibition and convention centre at Hengqin Island’s Shizhimen opens next year.
Mass-market gaming has been growing faster than the VIP segment in the past year, a trend that has been mentioned by casino operators as a sign of a more stable operation model. But with bets in the premium mass-market growing higher some of Grand Lisboa’s tables have been reclassified as VIP, Union Gaming Research Macau said. The move could hit the mass-market figures, the research house added.
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Mainland sports lottery firm gets investor for Macau push Page 5
Boxing dollar eyed in Pacquiao November bout Page 6
%Day
CITIC PACIFIC
2.79
PETROCHINA CO LTD
2.47
BOC HONG KONG
2.41
AIA GROUP LTD
2.16
COSCO PACIFIC
1.76
TINGYI CAYMAN
-0.98
BELLE INTERNATIONAL
-1.08
MTR CORP LTD
-1.1
CHINA RESOURCES
-1.1
HONG KG CHINA
-1.71
Source: Bloomberg
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More retail SMEs up and running in first quarter Page 16
2013-05-08
2013-05-09
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May 8, 2013
Macau
Viva Macau was in talks with five investors before grounding AirAsia appeared ready to take over the now-defunct low-cost carrier just days before its final flight Tony Lai
tony.lai@macaubusinessdaily.com
Viva Macau was grounded on March 28, 2010
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ankrupt low-cost airline Viva Macau – Sociedade de Aviação Ltda had sought investments from five international companies before its eventual grounding in 2010. Documents seen by Business Daily reveal that Malaysia’s AirAsia Berhad and investment bank Goldman Sachs (Asia) LLC were among the interested parties. A source close to Viva Macau says the airline was “close to settling a deal” with one of the potential investors before its sub-concession contract was revoked. The airline was grounded on March 28, 2010 after a series of flight cancellations left thousands of passengers stranded. It was declared bankrupt five months later. Viva Macau appealed to the Court of Second Instance claiming that Secretary for Transport and Public Works Lau Si Io issued an illegal administrative act instructing flagship carrier Air Macau Co Ltd to end Viva Macau’s sub-concession.
The intermediate court denied that appeal last January. Viva Macau’s lawyer Henrique Saldanha confirmed to Business Daily the company had appealed to the Court of Final Appeal. AirAsia and Viva Macau’s parent company Eagle Airways Holdings Ltd signed a letter of intent that would allow the Malaysian carrier to “subscribe no less than 49 percent of the shareholding in Viva Macau”. The letter, dated March 24, 2010 – four days before the grounding –, was signed by AirAsia executive vicepresident Chin Nyok San and Eagle Airways director Chris Siew Pek Tho. “AirAsia shall provide all commercial, operational and technical support in respect of the day-to-day running of Viva Macau,” the letter said. The Malaysian airline would also have been responsible “for the startup costs of the new low-cost carrier’s operations”. Eagle Airways would work “to obtain the government’s approval to change the company’s name to AirAsia Macau”.
Investors circle
KEY POINTS Viva Macau appeals to the Court of Final Appeal – lawyer Low-cost airline was close to a deal with AirAsia Bhd Budget carrier was to be renamed AirAsia Macau if deal was closed Goldman Sachs eyed Viva Macau investment – document
The letter was not “legally binding” because the investment was “subject to approval from AirAsia’s board of directors”. Another document from February 24, 2010 also shows there was possibility of “a potential investment by one or more of the principal investment affiliates of Goldman Sachs” in Viva Macau. Th e d o cu m en t i s s i g n ed b y managing director Masaaki Matsuzawa. The letter did not reveal further details of the deal. Bu s i n es s Da i l y a p p r o a ch ed Goldman Sachs for comment but had not received a reply last night. The three other investors have
last month’s auction of shares in Viva Macau, was unsuccessful. The loans were “small” compared to the potential investment that was discussed, the source said. “The administration was aware of the progress of the loans. They did not want Viva Macau to succeed and grow,” the person added. Maria Cristina Freitas Gomes da Silva, the government representative on Air Macau’s board, said at a Court of Second Instance session last year that she was not aware of any potential deal between AirAsia and Viva Macau. She was aware the airline was “trying to find solutions” to solve its economic troubles, namely by asking for another government loan.
Compensation fight
not been identified but the source close to Viva Macau said each was an international firm. The source said each was “excited” by a possible deal with Viva Macau, even though the airline was financially troubled. “They all knew they had to act quickly as Viva Macau was growing and there was potential in the [aviation] market in Macau,” the source said. Another document seen by Business Daily shows Morgan Stanley Asia Ltd was ready to underwrite securities that would be launched to close the investment in Viva Macau. Viva Macau was hit hard by the global financial crisis in 2008 and 2009. The government’s Industrial and Commercial Development Fund granted five loans worth 212 million patacas (US$26.6 million). The government has sought to recoup the loans but its latest effort,
The source said the airline “was experiencing its best period” in 2010 before March 26 when it was unable to settle jet fuel bills with supplier Nam Kwong Group Co Ltd. Viva Macau has claimed it did not owe money to Nam Kwong and stressed that the supplier did not come forward as one of the airline’s creditors. The company believes the Civil Aviation Authority of Macau told Air Macau to revoke Viva Macau’s sub-concession thanks to “a decision” from Mr Lau that was an illegal administrative act. Civil Aviation Authority president Simon Chan Weng Hong told a press conference on March 28, 2010: “Today, the government has made a decision to cancel or instruct Air Macau to terminate the subconcession contract.” A letter sent by the aviation authority to Air Macau that day said that “according to today’s decision of the Secretary for Public Works and Transport… Air Macau must terminate
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May 8, 2013
Macau Viva had ‘little’ potential: AirAsia “I’m shocked there is the existence of such documents,” Celia Lao, general manager of AirAsia Bhd in the Greater China region, told Business Daily, referring to the letter of intent over AirAsia’s investment in Viva Macau. “I have also been involved in talks with Viva Macau on and off for a year before its grounding… but I have never received any information from our headquarters [in Malaysia] we would purchase the carrier,” she said. “My office here has even drafted a report suggesting not to buying it [Viva Macau],” Ms Lao said. She explained they did “not see much potential for the low-cost carrier market in Macau” due to the limitation of its population. The aircraft model used by Viva Macau, the Boeing 767 carrying some 200 passengers, was also “too large” and not suitable for development, she added. The Malaysian-based low-cost carrier uses an aircraft model – Airbus A320 – which carries about 180 passengers. “Though they [Viva Macau] had not said they were financially troubled, the documents they submitted showed their situation was not that optimistic,” she concluded.
immediately the sub-concession contract with Viva Macau”. Air Macau sent a letter to the troubled airline the same day that said it was “instructed to terminate with immediate effect the subconcession contract”. The Court of Second Instance ruled in January that Mr Lau’s decision was merely “an opinion” with no legally binding effect. However, it noted that “within a certain culture or mentality the boss’ dream is law”. Viva Macau has appealed to the top court, arguing that Air Macau pretended it was ending its sub-concession on commercial grounds but was instead “following government orders”. The carrier’s legal moves are ultimately aimed at gaining compensation worth “hundreds of millions of US dollars”, the source told Business Daily. Viva Macau has also filed a civil suit against Air Macau.
Macau-Zhuhai MICE cooperation mooted The MICE industry is bullish about the chances of the two cities sharing large events Stephanie Lai
sw.lai@macaubusinessdaily.com
Zhuhai and Macau could join forces to hold big MICE events, Alan Ho says
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he combination of Macau’s venues for conventions and Zhuhai’s abundant space for heavy-industry trade shows could be a winner in the years to come, according to a leader of the meetings, incentives, conventions and exhibitions (MICE) industry. The Committee for the Development of Conventions and Exhibitions and Zhuhai city officials visited last month the Macau-Zhuhai Cross-border Industrial Park and the Shizhimen Central Business District (CBD), in the northeast of Hengqin Island. The vice-chairman of the Macau Convention and Exhibition Association, Alan Ho Hoi Meng, who is a member of the committee, said Zhuhai was eager to develop the MICE industry on its side of the border. Zhuhai’s 10-year plan for the MICE industry envisages the city focusing on aviation, printing materials and wine trade shows. The plan also envisages Zhuhai
cooperating with Macau and Hong Kong in arranging yacht exhibitions, film festivals, and other events for cultural and creative industries. Mr Ho told Business Daily that a body to coordinate conventions and exhibitions on each side of the border was being formed. “Macau and Zhuhai can seek complementary cooperation, each having their own, different, advantages,” he added. He said his committee and the Zhuhai city government had discussed such cooperation. “For instance, both cities could co-organise an attractive, big-scale Chinese medicine forum and expo,” Mr Ho said. “The convention could be held in Macau, as it has ready accommodation and forum space, while the exhibition could be held in Zhuhai, as visitors have easy access to the industrial park or medicine production space,” he said. “Zhuhai does not have defined
spaces for conventions, as in Macau, but it is experienced in holding exhibitions of heavy-industry products, like the annual aviation expo,” he said. “In that sense Macau could hold the forum part and Zhuhai the exhibition part.” Since last year the Macao Trade and Investment Promotion Institute has received three bids to hold international exhibitions here, and they will be held next year or after. The exhibition and convention centre in the Shizhimen CBD is due to be completed by May 1 next year. Mr Ho thinks the centre will give the organisers of international events cause to consider holding events simultaneously in Hengqin and Macau. Work on the centre began in 2010. The centre is part of the first phase of the Shizhimen CBD. It is designed by architects RMJM Ltd. Event management companies AEG Ogden and Pico of Hong Kong will manage it.
Cambodia eyes Macau investment, direct flights C
ambodia wants more Macau people to invest in the country, especially in tourism, and direct flights between the two sides, prime minister Hun Sen said. The official met with former Macau chief executive Edmund Ho Hau Wah on Monday to discuss further expansion of bilateral ties in trade and tourism. The discussion was held on the third day of Mr Ho’s four-day visit to Cambodia, which included a visit to Angkor Wat temples, a World Heritage site. Speaking at the Peace Palace,
the Cambodian premier asked Mr Ho, who is also the vice-chairman of National Committee of the Chinese People’s Political Consultative Conference, to encourage more Chinese investment in the country. He also mentioned that Cambodia wanted to see a direct flight between the country and Macau to promote all-round cooperation. Some airlines have shown interest in launching new medium-haul flights between Macau and Cambodia by the second half of this year, the Macau International Airport Co Ltd (CAM) said last Friday.
Edmund Ho, left, met with Cambodia premier, Hun Sen, on Monday
The Cambodian premier accepted Mr Ho’s invitation to deliver a speech at the Second Global Tourism Economy Forum, which is to be held in Macau in September. S.L. with Xinhua
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May 8, 2013
Macau
Decision on price govt pays for water possible in June
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HOSPITALITY
But the supplier will probably get less than it was hoping for
Go around, try again
Tony Lai
tony.lai@macaubusinessdaily.com
The number of flights arriving at Macau International Airport was 20.4 percent higher in the first quarter of this year than a year earlier, suggesting that a good year is brewing. The number of flights landing each month has risen steeply since last year. This rise contrasts with the sector’s behaviour in 2010 and 2011.
Macao Water is expanding its treatment plant in expectation of more demand from Cotai (Photo: Manuel Cardoso)
In 2010 the trend in the number of flights landing at the airport each month was slightly downward, levelling out towards the end of the year. The following year the trend was roughly the same. But slightly more arrivals in the second half meant that by the end of 2011 the number of flights landing was just over 2 percent higher than in 2010. The trend remained upward, although the beginning of last year did not look promising for business at the airport. The number of flights landing fell into a deep trough in February last year. There were 222 or almost 15 percent fewer arrivals than the month before. But last June and July many more flights landed than one year or two years earlier. Last summer the number of flights landing each month exceeded 1,700 for the first time since 2008. The number has remained above 1,700 since, except last November, when it fell to 1,673. This year the number of flights landing at the airport fell into its usual February trough, although the trough was shallower than usual. There being only about 5 percent fewer arrivals than in January. J.I.D.
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Flights into the airport in March, the most for 55 months
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he government may decide next month how much more it will pay Macao Water Supply Co Ltd for city’s water, but the increase will probably be less than the company asked for a year ago. The director of the Maritime Administration, Susana Wong Soi Man, told reporters yesterday: “We think we will allow a certain rise in the supply price of water, but we have to consider many factors to see how big a rise is appropriate.” Ms Wong, speaking on the sidelines of a meeting of Macao Water managers and customers, said the government hoped to decide by next month. “This has already been dragging for a year,” she said. Macao Water asked last May for an increase of 26.2 percent in what the government pays it to supply the city with water. At present the government pays Macao Water 4.39 patacas (US$0.55) per cubic metre. Any change in what the government pays Macao Water does not necessarily mean any change in what consumers pay the government for the water they use. Ms Wong said the increase requested by the company was “too high” but declined to say how great an increase the government would accept. She said the eventual increase would depend on inflation, Macao Water’s performance and public opinion. Macao Water executive director Felix Fan Xiaojun told reporters: “Any
decision from the government can help our operations, particularly in tackling soaring costs.” Mr Fan added: “From a business perspective we surely want more from the government, the better to help us relieve our burden.”
Not so thirsty Macao Water announced in March that its after-tax profit fell by 12.6 percent last year to 49.43 million patacas as its costs rose. In February Mr Fan said his
We think we will allow a certain rise in the supply price of water, but we have to consider many factors to see how big a rise is appropriate Susana Wong Soi Man, Maritime Administration director
company was “feeling helpless” about the government’s failure to reply to its request for more money. Yesterday he said: “We understand the government has its own concerns, such as public opinion.” He said that while the company was waiting it would try to reduce its costs to the minimum. Mr Fan said Macao Water’s firstquarter profit had fallen, against the company’s expectations. He did not say how big the fall was. He blamed the fall on water consumption growing more slowly than the company had expected and increases in costs. The company executive said consumers were using less water than expected because they were conserving it better and because the weather was cooler than usual. He said Macao Water expected “exponential growth” in 2015 and 2016 after the completion of several big resorts in Cotai. “Although Macau’s population is expanding, its water consumption does not increase much,” he said. “On the other hand, consumption by businesses is playing a larger part.” Macao Water intends to invest 100 million patacas in the third phase of the expansion of its water treatment plant near the reservoir on the peninsula, with a view to increasing its capacity by 60,000 cubic metres per day to 390,000 cubic metres per day. The work is due to be completed by 2015 to meet the increase in demand from Cotai.
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May 8, 2013
Macau China sports lottery firm eyes opportunities here AGTech gets investment from a prominent Macau businessman and legislator Vítor Quintã
vitorquinta@macaubusinessdaily.com
Legislator Vitor Cheung Lup Kwan is the managing director of Cotai’s Pousada Marina Infante
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Higher bets push tables to VIP side Grand Lisboa premium mass tables reclassified as high-stakes Vítor Quintã
vitorquinta@macaubusinessdaily.com
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ith bets in the premium mass-market growing higher, some of SJM Holdings Ltd’s tables have been reclassified as VIP tables, Union Gaming Research Macau said in a May 6 note to investors. If this change were to affect the other five gaming operators then mass-market growth, which has been faster than the VIP one, could take a hit, according to the research house. The Gaming Inspection and Coordination Bureau (DICJ) classified 28 of Grand Lisboa’s premium mass-market tables as VIP tables, up from just 3 tables the prior quarter, the note adds. “This event was triggered by maximum bets exceeding an apparent HK$300,000 threshold that the DICJ views as the cut-off between mass and VIP tables,” Union Gaming analyst Grant Govertsen wrote. This change hints at an increase in bets made in premium mass-market tables, where single wagers of HK$2,000 (US$258) are not unusual. The average mass-market minimum bet in Macau’s seven major casinos rose by 11 percent from late June to HK$1,370 in mid November, Deutsche Bank AG analyst Karen
Tang wrote in a report. Premium mass play is attractive for casinos because it requires less reinvestment’ in the players in the form of incentives or complimentary offers than the VIP market, as well as no credit. In addition it maintains profit margins in line with the rest of the mass market – higher margins than in the VIP market. The table reclassification will have no impact on SJM’s results, Mr Govertsen stressed. But it could have an influence on the distribution of VIP and mass-market revenue, he added. With more tables classified as high-stakes, VIP revenues “will appear to be growing faster than they otherwise would,” the note says. Mass revenues, conversely “will appear to be growing slower (or even declining),” the analyst warned. Mass-market gaming has been growing faster than the VIP segment in the past year, a trend that has been mentioned by casino operators as a sign of a more stable operation model. SJM climbed as much as 4.8 percent in Hong Kong trading yesterday before closing up by 3 percent to HK$20.35. It is the highest level in more than two months. With Bloomberg News
acau businessman and Legislative Assembly member Vitor Cheung Lup Kwan is to invest in AGTech Holdings Ltd, the Chinese sports lottery operator. AGTech told the Hong Kong Stock Exchange on Monday that it was striking up a partnership with Mr Cheung to “explore any entertainment, hotel and/ or leisure-related business opportunities” in Macau. The company said it expected to rake in about HK$140 million (US$18 million) from placing out 406.5 million new shares, which would represent about 9.5 percent of its issued share capital, before May 31. The placement price is HK$0.345 per share, a discount of 19.8 percent to Friday’s closing price of AGTech stock. The shares will be placed out to at least six investors, the largest being a company owned by Mr Cheung. The money will be used “for business development, including but not limited to investment opportunities in relation to any entertainment, hotel and leisurerelated business in Macau,” AGTech’s chairman and chief executive, John Sun Ho, said in the company’s disclosure to the
May revenue could again hit MOP30 bln W
ells Fargo says Macau’s gross gaming revenue could again pass the 30-billion-pataca (US$3.75 billion) mark this month. In a note to clients, senior analyst Cameron McKnight said that, based on early trends through May 5, casino gross gaming revenue growth for May is trending at between 13 and 17 percent year-on-year. This would make it the second best month ever for the city’s gaming industry. “Despite month-to-date average
stock exchange. Mr Cheung will have the opportunity to invest a further HK$85 million in AGTech by exercising an option to subscribe to another 5 percent of the company’s capital at HK$0.40 per share. In that event, Mr Cheung’s company would act as AGTech’s “strategic investor and business partner […] to jointly explore any entertainment, hotel and/or leisurerelated business opportunities in Macau”, AGTech said. “We are delighted to gain the support of a strategic investor like Mr Cheung,” Mr Sun said. He said Mr Cheung’s investment “demonstrates his vote of confidence in our group’s business prospects”. AGTech said Mr Cheung “has been working closely with the relevant commercial organisations in Macau’s leisure and entertainment industry for many years”. Business Daily tried to get further comment from AGTech, but we had received no reply by the time we went to press. Mr Cheung is the managing director of the Pousada Marina Infante in Cotai. He was also in charge of the companies that were first granted the land where the Grand Waldo and Starworld casinos were later built.
daily revenue growth of 25.6 percent, we would expect revenues to trail off given the typical post-Golden Week lull,” Mr McKnight wrote. Macau’s live gaming tables made average daily revenues of HK$1.2 billion in the first five days of this month, 24 percent higher than in the first 6 days of May 2012, said RBC Capital Markets analyst John Kempf. “Using the historical decline (…) following the first week data in May, we are projecting a 13 percent increase” in gaming revenue for the month, he wrote in a Monday note to investors. In May last year, the city’s casinos reported 26.1 billion patacas in gross gaming revenue. A 17-percent yearon-year growth rate would mean casino revenue of 30.5 billion patacas. Macau’s gaming industry has only topped 30 billion patacas once – it was in March this year, when it raked in 31.3 billion patacas. V.Q.
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May 8, 2013 April 19, 2013
Macau Junket turnover down on gloomy outlook
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VIP room promoter Asia Entertainment & Resources Ltd announced on Monday that the rolling chip turnover at its four gaming rooms here declined by 16 percent yearon-year to US$1.47 billion (11.8 billion patacas) last month. In the first four months of this year the company’s high-stakes baccarat saw bets reach US$5.5 billion, down by 22 percent year-on-year, the junket said. The drop comes as the Nasdaq-listed company decided to tighten credit to middlemen “due to its conservative view on the Chinese economy,” it said in a statement.
Financial Monitor Labour disparities The cost of construction labour influences the price of newly-built homes, shops and offices. Since 2010 the Statistics and Census Service has been making separate reckonings of the wages of construction workers that are permanent residents and the wages of all construction workers. This allows comparisons of the pay of local and imported labour. The Statistics and Census Service divides up construction workers according to their various trades, but they can be broadly separated into two categories: skilled and semi-skilled workers, and unskilled workers.
Fresh graduates value job nature Tony Lai
tony.lai@macaubusinessdaily.com
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niversity students close to graduation believe getting an interesting job where they can use the skills they learned is more important than the salary level, a survey shows. The research carried out by online human resource platform MacauHR Ltd shows that having a job related to their area of study was the most important factor for year 3 and year 4 university students. About 74 percent of over 100 surveyed students from the city’s four universities chose this reason. In
addition more than half want their future work to be interesting. The salary level ranked in fourth place as only 40 percent of interviewees stated this as most important. In fact, students believe a job with good promotion prospects is a higher priority (41 percent). “Today’s fresh graduates are a group of savvy young people who grew up with technology that enables them to have a wider view of the world,” said Alex Lu, MacauHR manager. “So they may not be as money-
November Pacquiao fight as Venetian chases boxing dollar The plots in the chart show that skilled and semi-skilled construction workers are paid roughly 60 percent more than unskilled labourers. The difference widened at the end of 2010 and beginning of 2011, but only temporarily. The wages of construction workers have been more or less stable in the past five years, except for the wages of resident skilled and semi-skilled workers. The plots for the wages of all unskilled construction workers and resident unskilled construction workers overlap almost perfectly, suggesting either that resident unskilled workers command no pay premium or that few imported construction workers are unskilled. In contrast, resident skilled or semi-skilled construction workers have commanded a noticeable pay premium in recent years. The premium has been growing since 2011. In the first quarter of this year resident skilled or semi-skilled construction workers were paid over 23 percent more than a year earlier. The wages of all skilled or semi-skilled construction workers have changed little in recent years, implying that the wages of imported skilled or semi-skilled construction workers have been decreasing. J.I.D. The content of this column is the work of Business Daily’s journalists.
After the success of Zou Shiming’s debut bout, boxing will be back to Macau Vítor Quintã
vitorquinta@macaubusinessdaily.com
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hilippine boxing hero Manny Pacquiao will battle United States fighter Brandon Rios here in November, organisers said yesterday. It will be the second boxing event at Venetian Macao’s Cotai Arena this year. “The fight is green and go,” Mr Pacquiao’s chief management adviser, Michael Koncz, told AFP, adding the arrangements had been finalised with Top Rank, the Las Vegas-based boxing promotion agency that handles the Philippine boxer. The bout will be Mr Pacquiao’s first fight outside the United States since 2006 but it is likely not to be the last. Top Rank chief executive Bob Arum told New York Times two weeks
ago that he could see Mr Pacquiao signing a contract with Venetian Macao for three to five years at US$5 million (40 million patacas) annually. Business Daily tried to get a comment from Venetian Macao’s operator, Sands China Ltd, but received no reply before press time. Last month China’s two-time Olympic gold medallist and three-time amateur world champion Zou Shiming
oriented as previous generations,” he added in a statement released on Monday. The survey carried out in March also shows most students, about 57 percent, expect salaries between 11,000 and 15,000 patacas (US$1,900). The company said that the expectations were “not far off from reality”. The median monthly salary of resident workers was 14,500 patacas at the end of the first quarter of 2013.
made his debut professional fight at the Cotai Arena, defeating little-known Mexican Eleazar Valenzuela. Venetian said it sold out the fight and estimated that 200 million to 300 million people watched on television. In addition there was a 35 to 40 percent increase in overall gross gaming revenue that weekend, the company said at the time. Mr Arum had previously said he wanted to put Mr Zou on the undercard with Mr Pacquiao to further spark interest in Greater China. Mr Koncz, who travelled to the United States for negotiations, said there was a plan to tie-up with a Chinese company so it could show the fight through smartphones to the Chinese market. With AFP
Manny Pacquiao will fight outside the United States for the first time since 2006
May 2013 April8,19, 2013
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May 8, 2013 April 19, 2013
Greater China Yuan to be fully convertible within five years, says HSBC
exchange regulator. Mr Li in March pledged to open the economy to more market forces and strip power from the government as part of efforts to restructure growth. “The general principle of the opening-up is to be gradual, starting from long-term investment to short-term capital flows and from a quota-management system to a free flow of money,” said Mr Chen, now a Beijing-based researcher with the Chinese Academy of Governance. The State Council statement didn’t give additional details on the capital-account plan.
Interest rates
Yuan convertibility plan among this year’s goals Regulator to allow individuals to make overseas investments
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hina signalled it will propose plans this year to allow freer flows of its currency in and out of the nation as part of measures to loosen control over the yuan and interest rates. The plan on yuan capital-account convertibility will also include a way to let individuals make overseas
investments, the State Council said in a statement yesterday after a meeting led by Premier Li Keqiang on the focus of economic reforms in 2013. Other measures include improving controls on risks from local- government debt, expanding trials of value-added taxes on companies and pushing forward
changes to the country’s householdregistration system. Future changes may include raising or removing quotas on foreign investment in the nation’s bond and stock markets and giving Chinese companies more freedom to borrow overseas, said Chen Bingcai, a former official with the nation’s foreign-
A March statement by the State Council also said the nation would roll out measures to promote interestrate and exchange-rate liberalisation this year. That statement didn’t mention a plan for capital-account convertibility. China needs to sacrifice shortterm economic growth for structural adjustments, central bank Governor Zhou Xiaochuan said last month after the nation reported slower-thanforecast first-quarter expansion. “It’s a positive sign that the new government under Li Keqiang is trying to boost growth by reform instead of launching fiscal stimulus,” Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd in Hong Kong, said. The goal of a feasible plan for capital-account convertibility shows that the “reform ideas promoted by Zhou Xiaochuan have received endorsement from the cabinet,” he said. People’s Bank of China Deputy Governor Yi Gang said last month there were a “lot of favourable conditions that are suitable for further liberalisation” of the capital
Banks buying HK towers as rents fail to ease Companies paying record prices for office space in the city Kelvin Wong
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eeking to hedge against rising rents and a shortage of space, banks and insurers are on a record spree of buying office buildings in Hong Kong, where occupancy costs are the second-highest in the world. Manulife Financial Corp., Canada’s biggest insurer, and Hang Seng Bank Ltd this year bought office towers in the city, joining financial firms such as AIA Group Ltd and Agricultural Bank of China Ltd in spending more than HK$18.8 billion (US$2.4 billion) on commercial properties from January 2012 to last month, according to Cushman & Wakefield Inc. That’s the most for a 16-month period on record, the broker’s data show. Companies are looking to secure space in the city where new office supply will fall a third short of demand by the end of the decade, according to Rhodri James, executive director for office services at CBRE Group Inc. The office vacancy rate in Hong Kong fell to 3.3 percent in the first quarter, the lowest in Asia behind Beijing, according to the broker. “This spate of purchases by financial institutions is
unprecedented,” said Sigrid Zialcita, Singapore-based managing director for Asia-Pacific research at Cushman & Wakefield. “It allows them to manage their costs, especially given the high rents and the propensity for continual rent increases in this supply-constrained environment.” Demand for offices in Hong Kong has been swelling as the city cemented its place as a regional hub for global banks and brokerages seeking corporate deals as China became the world’s second-biggest economy. Hong Kong was the world’s biggest market for initial public offerings in 2010, when companies raised US$58 billion through initial share sales.
Record deals Manulife said April 10 it will buy a 512,000-square-foot (47,566-square-meter) tower in the Kowloon East district from developer Wheelock & Co. for HK$4.5 billion, the second-highest price paid for an office building in the city. Upon completion in 2015, it will be used as headquarters for the insurer’s 1,200 staff and 5,500 agents.
The largest deal on record is Agricultural Bank of China’s purchase last year of 50 Connaught Road in the Central district for HK$4.9 billion. Hang Seng Bank, a unit of London-based HSBC Holdings Plc and the No. 2 Hong Kong-based bank, paid HK$2.9 billion in February for a 30-floor office building in the Mong Kok area, while AIA, the city’s second-biggest insurer, in October
HK$4.5 bln
Manulife will pay for a tower in the Kowloon East district
Office vacancy rate fell to 3.3 pct in the first quarter
bought the 300,000-square-foot Stanhope House in the Island East district for HK$2.4 billion. As of January, financial services companies accounted for 49 percent of prime office tenants in the Central district, according to data compiled by CBRE. More buildings are coming to the market that may be snapped up by financial firms, said Daniel Chow, general manager for sales and distribution for consumer banking at Standard Chartered Plc. Jones Lang LaSalle Inc. has been appointed by Wing Hang Bank Ltd to sell a 27-story office building in Wan Chai, the broker said in an April 22 statement. Last year, Jones Lang was hired by
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May 2013 April8,19, 2013
Greater China account. Mr Yi said on April 17 that China will widen the trading band for the yuan “in the near future,” after doubling it in April 2012. About 80 percent of capitalaccount items listed by the International Monetary Fund are convertible or partially convertible in China, Mr Yi said. Conditions for the opening up of the capital account include “relatively good” economic fundamentals, sound public finance and banks, and a flexible exchange rate, he said. In January, the central bank said it would proactively prepare for the trial of its qualified domestic individual investor programme, known as QDII2. The government started the QDII programme in 2006, allowing Chinese individuals to buy securities in overseas markets through asset managers and funds.
financial institutions stemming from foreign-exchange transactions, a gauge of cross-border capital flows, climbed 1.22 trillion yuan (US$198 billion) during the quarter, the thirdbiggest increase in data going back to 2000. Gains are a sign of inflows and the largest advance was 1.41 trillion yuan in the first three months of 2008, according to data compiled by Bloomberg. “The PBOC’s recent willingness to let the exchange rate strengthen is potentially in line with a planned movement toward a more flexible exchange-rate regime,” Mr Kuijs said. The Chinese currency will be fully convertible within five years, while a third of China’s trade will be settled in yuan by 2015, HSBC Holdings Plc forecast in a March report. Bloomberg News
Economic growth China reported economic growth of 7.7 percent for the first quarter, trailing the 7.9 percent pace for the last three months of 2012. Policy makers set in March a target for expansion this year of 7.5 percent. “China’s growth outlook for 2013 to 2014 is more convincing than that of most other countries and interest rates are substantially higher than in high-income countries,” Royal Bank of Scotland Group Plc economists led by Louis Kuijs wrote in a note dated yesterday. “This should keep net financial inflows positive, despite efforts by the government to stem them.” China’s financial and capital account surplus was US$101.8 billion in the first quarter, the most since 2010 and almost double the US$56.1 billion reported for the same period of 2012, official data show. Yuan positions at Chinese
The general principle of the opening-up is to be gradual, starting from long-term investment to short-term capital flows and from a quotamanagement system to a free flow of money Chen Bingcai, researcher, Chinese Academy of Governance
Billionaires double over four years T
he number of Chinese individuals with more than 10 million yuan (US$1.6 million) of investable assets rose to at least 700,000 at the end of 2012, more than double the number four years earlier, a Bain & Co. study found. The list may grow by a further 20 percent this year as the nation’s economy continues expanding, according to the China Private Wealth Report 2013, published yesterday in cooperation with China Merchants Bank Co. Individual investable assets expanded by an average of 14 percent a year since 2010 to about 80 trillion yuan last year, according to the report. Wealthy individuals are increasingly investing abroad and diversifying away from stocks into safer investments such as bonds to preserve their wealth, the report found. China Merchants and Bain said people interviewed for its report are stepping up investment in real estate and other assets in the United States, Canada, Hong Kong and Singapore to “diversify and preserve wealth”. Average investable assets of high net-worth individuals are forecast to grow to 31.8 million yuan by the end of this year, up from 29 million yuan in 2008, according to the report.
Sets grim stage for deal-starved bankers Elzio Barreto and Denny Thomas
S
Bloomberg News
T
he Chinese military has targeted U.S. government computers with intrusions that seek sensitive data, according to a report in which the Pentagon for the first time directly accuses China of a cyber espionage campaign. The incursions “appear to be attributable directly to the Chinese government and military,” the Pentagon said on Monday U.S. time in a report to lawmakers on security issues involving China. The information targeted could be used to bolster China’s defence and technology industries and to support military planning, the Defence Department report said. “China is using its computer network exploitation capability to support intelligence collection against the U.S. diplomatic, economic, and defence industrial base sectors that support U.S. national defence programmes,” the report said. The Pentagon attribution of hacker attacks to China highlights an issue that has emerged as a source of friction in relations between the two countries. It came as part of a broader annual report to Congress covering security challenges arising from China. China has always denied hacking and says it is the victim of such attacks. AFP
Bloomberg News
China Galaxy hires record underwriters for IPO
Sino Land Co. to seek buyers for the 330,000-square-foot Centrium office and retail complex in Central that the developer valued at HK$7 billion. “We’re going to see more financial companies considering to buy commercial buildings as their offices or branches,” said Chow. “This will be the trend unless there’s a sharp decline in rents.” Rents probably won’t fall significantly because Hong Kong has one of the world’s lowest office vacancy rates. Developers will probably add about 11 million square feet by 2020, compared with projected new demand of 17 million square feet over that period, according to CBRE.
U.S. says Beijing stepping up cyber war
tate-owned China Galaxy Securities Co Ltd set a record for Hong Kong’s IPO market on Monday, with a total of 21 banks working as joint bookrunners on its US$1.37 billion offering. That smashes the previous record of 17 banks set last year by state-owned insurer PICC Group for its US$3.6 billion IPO – and is a sign of lean times for Asia’s once booming stock issuance industry. The large number of banks involved in the China Galaxy Securities IPO shows just how much companies are calling the shots on bankers in stock and bond sales, and highlights the shrinking revenue pot in Asia for investment banks. The more banks that are involved in a deal, the smaller the piece of the pie they each get. “This is a bloodbath. There just isn’t enough business in the market. There’s an over-supply of bankers and an under-supply of clients,” said Keith Pogson, managing partner for Financial Services at Ernst & Young. “All the bargaining power is with the issuers and not with the banks. This is the new normal.” The China Galaxy Securities initial public offer comes at the same time
that Sinopec Engineering Group Co, part of Asia’s largest oil refiner Sinopec, is offering 1.33 billion shares in a US$2.24 billion IPO – a sign that there is still a pulse in Hong Kong’s moribund IPO market. The two deals should set the tone for IPO activity in Hong Kong, which topped global rankings for such deals in 2009 and 2010, Thomson Reuters data shows. But even if these deals trigger a series of other offerings, the outlook for equity capital market revenues in Asia Pacific remains sober in the
current climate. China Galaxy Securities initially mandated its own China Galaxy International unit, Goldman Sachs and JPMorgan to manage its IPO. In March, it added 13 banks and the list grew by another five as the deal was launched on Monday. IPOs in Hong Kong are down by a fifth so far this year to US$1.05 billion and last year’s total of US$7.72 billion worth of deals was the lowest in volume terms since the 2008 global financial crisis. For deal-starved bankers today it’s a tough balance between being on unprofitable deals and keeping clients happy. “Investment banks are all trying to get league table credit and show something to the head office,” said one Hong Kong-based investment banker, who was not authorised to speak publicly on the matter. “I suspect only half or less are making any real money out of it.”
IPOs in HK have fallen to US$1.05 billion so far this year
Reuters
10
May 8, 2013
Asia
Australia cuts rates to record low In attempt to counter slowing growth in mining sector Wayne Cole
There are fears that slowing global demand may hurt Australia’s resource boom
A
ustralia’s central bank cut interest rates to a record low yesterday and signalled there was room to ease yet further, highlighting the relentless pressure a stubbornly high currency is putting on the resource-dependent economy. Indeed, the local dollar gave ground only grudgingly after the Reserve Bank of Australia (RBA) surprised some by easing a quarter point to 2.75 percent, taking rates even below the nadir touched in the global financial crisis. With the currency still not far from 28-year peaks when measured against a basket of its counterparts, analysts suspected the new normal might be lower rates for longer. “The RBA appears to have simply grown weary of a high Aussie, while becoming more comfortable about
the high pace of domestic inflation,” said Scott Haslem, chief economist at UBS AG. “This suggests even with our outlook for better growth, the cash rate in Australia is likely to remain low for longer than has been normally the case.” Even after yesterday’s easing, Australian rates remain among the highest in the developed world. The European Central Bank cut its main rate to 0.5 percent last week, while the Federal Reserve and Bank of Japan are effectively at zero. As those major central banks pursue ever more radical easing policies, it puts downward pressure on their currencies while helping keep the Australian dollar painfully high. That could be one reason RBA Governor Glenn Stevens implicitly left the door open to further easing
when announcing the policy decision yesterday. “The Board has previously noted that the inflation outlook would afford scope to ease further, should that be necessary to support demand,” RBA Governor Glenn Stevens said. “At today’s meeting the Board decided to use some of that scope.” Mr Stevens noted inflation had been lower than expected recently and well in line with the RBA’s long term target of 2 to 3 percent. The latest reading of underlying inflation put it at 2.4 percent in the year to March.
Cheaper borrowing The central bank said it expected investment in the resources sector, one of its biggest drivers of growth
Slow reforms cloud Vietnam’s growth outlook Government should speed up banking and state-owned enterprise reforms, IMF says
S
low restructuring of Vietnam’s banks and state companies contributed to the International Monetary Fund’s decision to cut the nation’s growth forecasts. The IMF lowered its projection for Vietnam’s growth to 5.2 percent this year from 5.8 percent previously, and to 5.2 percent in 2014 from 6.4 percent in its report on April 29. The reduction of this year’s forecast is the biggest cut among Southeast Asian countries after Singapore, while the 2014 cut is the biggest downward move for any Asian country, the data showed. The cuts signal “that it will be important to carry through with the reforms the government has said it intends to,” said Sanjay Kalra, the IMF’s Hanoi-based resident representative, in a telephone interview. “Structural reforms have
Structural reforms have moved a bit slower than one might have expected or is desired Sanjay Kalra, IMF’s representative
moved a bit slower than one might have expected or is desired.” Deputy Finance Minister Truong Chi Trung said in February that the government would unveil a plan by
June to restructure the biggest stateowned companies. Prime Minister Nguyen Tan Dung’s administration has missed its earlier target for the creation of an asset management company to address bad debt in banks that has crimped consumption and slowed economic growth. Vietnam’s economy expanded 5.03 percent last year, the slowest pace since 1999. The central bank cut interest rates in March, the seventh such reduction since the start of 2012, in a bid to spur lending, even as the World Bank said the country’s issues can’t be resolved with monetary easing.
Additional steps The Vietnam government’s master plan to restructure state companies and overhaul the financial
in recent times, to peak this year. It added that a rate cut would provide a boost to other areas of the economy and help sustain longterm growth. “There has been a strengthening in consumption and a modest firming in dwelling investment, and prospects are for some increase in business investment outside the resources sector over the next year,” the central bank said in the statement. “These developments, some of which have been assisted by the reductions in interest rates that began 18 months ago, will all be helpful in sustaining growth.” Investors were certainly wagering on further stimulus in Australia. Interbank futures are almost fully priced for a cut to 2.5 percent by August, while the government was
system lacks clear action steps, with a slow pace of share sales and the banking reform lacking timelines, said Truong Dinh Tuyen, a member of the country’s National Financial Monetary Policy Advisory Council, at a conference last month in the city of Nha Trang. Credit in Vietnam grew 1.4 percent as of April 23 compared with the end of 2012, Thoi Bao Ngan Hang newspaper reported on Monday. Credit growth last year was an “anaemic” 9 percent, lower than an earlier target of 15 percent, according to the World Bank. Restoring the nation to a higher and sustainable growth path will require the acceleration of banking and state-owned enterprise reforms, with planned structural changes “implemented decisively and additional steps considered,” the IMF said, in a statement after a mission from the agency concluded an 18-day visit to the country. “There is a need not just to merge banks but to really improve governance and to recapitalise them,” Mr Kalra said. “Their balance sheets need to be improved, their depositor base needs to strengthen, and their loan portfolios need to be diversified.” The planned asset-management company has missed an endof- March deadline for beginning
11
May 8, 2013
Asia paying just 2.46 percent to borrow for two years. Lower borrowing costs will be a relief to the Labor government which is struggling with a gaping shortfall in tax revenues, not to mention a losing position in opinion polls. Treasurer Wayne Swan delivers his annual budget next week and is widely expected to announce a deficit of around A$17 billion (US$17.3 billion), even as the economy is seen growing at a relatively robust pace of 2.5 percent to 3 percent.
Indonesia may shoot own-goal with DBS decision Lenders see takeover guidelines and desire to strengthen banking system as incompatible
KEY POINTS RBA cuts key cash rate to record of 2.75 pct Says low inflation allowed it to use some easing room Points to historically high Australian dollar Govt faces A$17 bln revenue shortfall
He has also laid much of the blame for deficits on the high currency since it directly hurts earnings from resource exports that are priced in U.S. dollars. “That sustained high level is one of the factors that reflects our economic strength vis-a-vis the rest of the world, but brings with it challenges in our domestic economy,” Mr Swan told reporters yesterday. “One of those challenges is that it puts a squeeze on profitability.” The RBA’s move will also be a boon to mortgage holders as the vast majority of loans in Australia have variable rates. National Australia Bank and Commonwealth Bank of Australia both responded speedily by cutting their standard variable mortgage rate by a full quarter point. Reuters
The IMF lowered its estimate for Vietnam’s growth to 5.2 pct
operations. Setting it up “would be a good start, and an indication from the authorities that they understand that this is a big enough problem to require a system-wide approach,” Mr Kalra said. The entity “would help address the liquidity problems at some banks, but for now we don’t know how the recapitalisation issue would be addressed.” Bloomberg News
The acquisition would help DBS gain access to a faster-growing economy
I
ndonesia is expected within days to give a green light to its biggest foreign bank takeover, but sources say the deal conditions are likely to send a very different signal: foreign ownership and bank consolidation are now in the slow lane. Indonesia’s bank regulator is due this month to decide on Singapore bank DBS Group’s US$7.2 billion bid for local lender PT Bank Danamon, and sources close to the deal expect it will force DBS to complete the transaction in two steps over 18 months. That would be in accordance with the central bank’s “two-stage” guidance for bank takeovers that were issued around the same time as the DBS-Danamon deal was announced last year. However, some foreign bidders have been hoping that the guidelines would not be enforced strictly and that exceptions would be made for deals like DBS-Danamon, which is billed as one that would help modernise and strengthen the sector. Those hopes look set to be dashed, according to the sources and mergersand-acquisitions lawyers following the case closely. “The main issue for those foreign
investors with strong track records looking to acquire controlling stakes in Indonesian banks is that the twostage acquisition process seems to be illogical and unnecessary,” Jake Robson, a Singapore-based partner at law firm Norton Rose. “If this two-stage acquisition process is not waived by BI [Bank Indonesia] this will certainly be seen negatively by foreign investors and could, as a result in the short term, have the opposite effect to the stated objectives of the new regulations, including consolidation of the industry…” Under Indonesia’s two-step guidelines, there are no guarantees an acquirer – especially a foreign one – will be allowed to take the second step to control. Indonesia acknowledges that its over-crowded and stodgy banking industry needs consolidation and an infusion of expertise that experienced international lenders can bring. In return, foreign banks see a market with huge potential. Only about 40 percent of Indonesia’s 240 million people have bank accounts and most personal borrowing is done outside the banking sector. Yet the nation has more than
120 commercial lenders, most of them minnows unable to compete with the top 10 banks which control 80 percent of total bank assets. For foreign banks, the takeover guidelines and Indonesia’s desire to strengthen its banking system are incompatible. “For the acquirer, there is an uncertainty of eventual majority control… Hence before securing control, the incentive to transform [the local lender] would be somewhat diluted,” said Christopher Wong, senior investment manager at Aberdeen Asset Management Asia, which owns DBS shares. Under the guidelines, bidders cannot take control of a lender in one go. They can first take a 40 percent stake but must then undergo three financial-soundness tests, one every six months, before moving to majority ownership. The guidelines are meant to apply to all takeovers – whether by a foreign or local bidder – but advisers expect it to be policed more strictly in the case of foreign banks, which already control six of the top 15 local banks, according to central bank data.
Rio Tinto to press on with expansion plans
In spite of forecasts of a looming global supply glut, shareholders expect chief executive Sam Walsh to tell the firm’s annual general meeting in Sydney tomorrow that it’s full speed ahead with a 70 million tonnes-per-year increase that will take output to 360 million tonnes annually by 2015. The plan means that a major additional chunk of iron ore production will enter the world market in the next few years and will add to concerns about increased supply that could weigh on a recovery in prices. “They should continue to expand what is a high margin, high returning project, one of the best returning
mining projects in the world, because growth now will mean yield in the future,” said Ben Lyons, who helps manage A$400 million (US$409.42 million) at ATI Asset Management, which holds Rio shares. Rio Tinto’s board is not expected to make a final decision on the expansion plans, estimated to cost up to US$5 billion, until later this year. Mr Walsh was named chief executive in January as part of a management shake up after a string of disastrous investments – crowned by the US$38 billion acquisition of Alcan in 2007 just before aluminium prices crashed – drove Rio Tinto to its first annual loss ever in 2012.
R
io Tinto Plc, the world’s No.2 iron ore miner, is set to press on with plans to boost production at its Australian mines by a quarter in 2015, shrugging off pressure to slow spending and conserve cash as the commodity boom cools.
Reuters
Reuters
12
May 8, 2013
Markets Hang Seng Index NAME
PRICE
DAY %
VOLUME
34.65
1.315789
13454291
CHINA UNICOM HON
ALUMINUM CORP-H
2.88
0.3484321
16897180
CITIC PACIFIC
BANK OF CHINA-H
3.69
1.09589
271406695
BANK OF COMMUN-H
6.12
0.990099
20770206
BANK EAST ASIA
31.3
-0.3184713
584778
13
1.72144
15978632
AIA GROUP LTD
BELLE INTERNATIO
NAME
CLP HLDGS LTD
DAY %
VOLUME
11.12
0
16689226
9.69
1.892744
9016260
NAME
PRICE
DAY %
76.2
0.461437
1091996
SANDS CHINA LTD
41.45
2.59901
12313892
SINO LAND CO
12.96
0.777605
3572367
SUN HUNG KAI PRO
111.7
0.994575
2881536
POWER ASSETS HOL
VOLUME
68.6
0
1363858
CNOOC LTD
14.38
1.410437
49023217
COSCO PAC LTD
10.24
0.3921569
3013690
SWIRE PACIFIC-A
98.55
-0.2530364
695062
10.9
-0.1831502
6419660
TENCENT HOLDINGS
274.8
1.402214
2421961
TINGYI HLDG CO
ESPRIT HLDGS
BOC HONG KONG HO
26.95
0.3724395
9608647
HANG LUNG PROPER
CATHAY PAC AIR
13.72
1.47929
1436207
HANG SENG BK
CHEUNG KONG
117.2
0.9474591
4816603
HENDERSON LAND D
CHINA COAL ENE-H
5.81
1.043478
29898498
CHINA CONST BA-H
6.52
0.9287926
236866520
CHINA LIFE INS-H
21.3
1.187648
29871239
CHINA MERCHANT
24.25
1.041667
2740692
CHINA MOBILE
85.15
0.4127358
9609129
HUTCHISON WHAMPO
CHINA OVERSEAS
24.15
1.257862
9199760
IND & COMM BK-H
CHINA PETROLEU-H
8.45
0.9557945
84504255
CHINA RES ENTERP
27.3
1.675978
2623603
23.75
1.06383
6136898
CHINA RES POWER
25.4
0
0
CHINA SHENHUA-H
27
1.123596
11204844
PING AN INSURA-H
CHINA RES LAND
PRICE
30.9
1.812191
13711221
129.3
0.3881988
829895
56.9
1.516503
1797775
HENGAN INTL
80.65
0.3109453
582012
HONG KG CHINA GS
23.45
0.4282655
3779522
HONG KONG EXCHNG
134.4
2.361005
4168802
HSBC HLDGS PLC
86.05
0.9384164
10934483
85.6
0.5875441
6153706
5.5
1.289134
223454934
9.99
-0.1
25006520
MTR CORP
31.95
0
1722361
NEW WORLD DEV
14.12
1.436782
13107113
PETROCHINA CO-H
9.73
2.098636
81092320
62.5
1.626016
9726906
PRICE
DAY %
VOLUME
27.75
1.648352
5765425
LI & FUNG LTD
20.35
-2.863962
8155314
WANT WANT CHINA
12.2
0.8264463
5608073
WHARF HLDG
71.9
1.985816
2690495
MOVERS
40
6
4 22970
INDEX 22915.09 HIGH
22967.78
LOW
22592.93
52W (H) 23944.74 22590
(L) 18056.4 2-May
6-May
Hang Seng China Enterprise Index NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.76
1.075269
61794524
CHINA PACIFIC-H
AIR CHINA LTD-H
6.75
3.686636
14250340
CHINA PETROLEU-H
8.45
0.9557945
84504255
ALUMINUM CORP-H
2.88
0.3484321
16897180
CHINA RAIL CN-H
7.98
2.176697
11140485
ANHUI CONCH-H
29.05
3.014184
17168949
CHINA RAIL GR-H
4.09
0.4914005
9298185
BANK OF CHINA-H
3.69
1.09589
271406695
CHINA SHENHUA-H
27
1.123596
11204844
BANK OF COMMUN-H
6.12
0.990099
20770206
CHINA TELECOM-H
3.96
1.278772
28311291
BYD CO LTD-H
29.1
2.105263
6146957
DONGFENG MOTOR-H
12.14
1.845638
15250587
4.4
2.088167
24259324
GUANGZHOU AUTO-H
6.48
4.012841
6306586
CHINA COAL ENE-H
5.81
1.043478
29898498
HUANENG POWER-H
9.26
1.982379
12823232
CHINA COM CONS-H
7.49
1.35318
12530730
IND & COMM BK-H
5.5
1.289134
223454934
CHINA CONST BA-H
6.52
0.9287926
236866520
JIANGXI COPPER-H
15.86
5.172414
33209773
CHINA COSCO HO-H
3.25
0.931677
5564605
PETROCHINA CO-H
9.73
2.098636
81092320
CHINA LIFE INS-H
21.3
1.187648
29871239
PICC PROPERTY &
10
0.9081736
12290775
CHINA LONGYUAN-H
7.31
1.527778
13659222
PING AN INSURA-H
62.5
1.626016
9726906
CHINA MERCH BK-H
16.64
1.339829
8972899
SHANDONG WEIG-H
7.52
0
5578795
CHINA MINSHENG-H
10.6
3.515625
47791741
SINOPHARM-H
23.05
-0.8602151
3046794
CHINA NATL BDG-H
9.08
0.8888889
51693255
TSINGTAO BREW-H
52.15
0.3849856
948472
16.08
5.235602
8984979
WEICHAI POWER-H
29
4.693141
4643765
CHINA CITIC BK-H
CHINA OILFIELD-H
NAME
NAME
PRICE
DAY %
VOLUME
7.93
1.277139
24053892
ZIJIN MINING-H
2.3
0
34818426
ZOOMLION HEAVY-H
7.7
0.6535948
9824951
13.64
2.556391
6218471
YANZHOU COAL-H
ZTE CORP-H
MOVERS
35
2
3 11060
INDEX 11001.77 HIGH
11052.54
LOW
10762.41
52W (H) 12354.22 10760
(L) 8987.76 2-May
6-May
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
AGRICULTURAL-A
2.72
0
90823085
CITIC SECURITI-A
12.96
0.777605
91762826
QINGHAI SALT-A
22.46
1.85941
7861620
AIR CHINA LTD-A
5.48
1.481481
7001350
CSR CORP LTD -A
4.05
0.7462687
25808731
SAIC MOTOR-A
15.42
1.048493
24328450 21607013
NAME
NAME
NAME
VOLUME
4.05
2.272727
15376614
DAQIN RAILWAY -A
7.14
1.564723
24137916
SANY HEAVY INDUS
9.49
1.172708
ANHUI CONCH-A
17.98
1.410039
20661710
DATANG INTL PO-A
4.44
0.2257336
6398343
SHANDONG GOLD-MI
32.13
0
4503942
BANK OF BEIJIN-A
9.05
0.6674082
29388766
EVERBRIG SEC -A
14.76
2.713987
36146803
SHANG PHARM -A
12.06
0.5838198
11828884 87865272
ALUMINUM CORP-A
2.9
0.3460208
38918079
GD MIDEA HOLDI-A
14.74
1.028101
27044098
SHANG PUDONG-A
10.13
1.198801
4.72
0.6396588
47030430
GD POWER DEVEL-A
2.91
-0.3424658
32012969
SHANGHAI ELECT-A
3.81
1.6
2983272
10.49
1.450677
17440273
GEMDALE CORP-A
7.33
0.8253095
46380289
SHANXI LU'AN -A
16.25
2.848101
18880674
BAOSHAN IRON & S
4.91
0.6147541
31637281
GF SECURITIES-A
13.83
1.54185
32872403
SHANXI XISHAN-A
10.72
2.290076
11253750
BEIJING TONGRE-A
23.49
0.4275331
9681066
GREE ELECTRIC
26.87
0.9012392
12641295
SHENZEN OVERSE-A
5.92
0.3389831
28927797
BYD CO LTD -A
28.82
10
25601655
GUANGHUI ENERG-A
18.34
0.2733734
15556713
SICHUAN KELUN-A
63.3
-0.1577287
1244834
CHINA CITIC BK-A
4.42
2.790698
36520389
HAINAN AIRLINE-A
4.86
0.2061856
21098648
SUNING COMMERC-A
5.93
2.417962
41342571
CHINA CNR CORP-A
4.21
1.445783
41209834
HAITONG SECURI-A
11.3
0.8928571
111793027
TASLY PHARMAC-A
79.89
-0.3865337
2221559
CHINA COAL ENE-A
6.74
1.201201
6889646
HANGZHOU HIKVI-A
37.35
0.9459459
6334729
TSINGTAO BREW-A
37.43
0.1605566
1549681
CHINA CONST BA-A
4.8
0
25732134
HENAN SHUAN-A
42.49
3.836755
6808676
WEICHAI POWER-A
22.35
1.775956
6139156
CHINA COSCO HO-A
3.34
0.9063444
9333468
HONG YUAN SEC-A
22.69
1.294643
32300673
WULIANGYE YIBIN
22.29
3.098982
22143542
CHINA EAST AIR-A
3.05
0
14352680
HUATAI SECURIT-A
10.19
1.292247
37603473
YANGQUAN COAL -A
12.41
1.721311
6960408
CHINA EVERBRIG-A
3.16
1.607717
96662538
HUAXIA BANK CO
10.85
0.5560704
45325537
YANTAI WANHUA-A
18.9
0.9076348
13109845
17
0.2949853
20653808
IND & COMM BK-A
4.1
0.4901961
42808178
YANZHOU COAL-A
14.35
0.8432888
4434383
18.76
0.7518797
65602534
YUNNAN BAIYAO-A
88
-1.168014
1388727
BANK OF CHINA-A BANK OF COMMUN-A BANK OF NINGBO-A
CHINA LIFE INS-A CHINA MERCH BK-A CHINA MERCHANT-A
12.53
1.45749
50270560
INDUSTRIAL BAN-A
13
2.929533
43578345
INNER MONG BAO-A
27.91
5.003762
39824773
ZHONGJIN GOLD
12.48
1.134522
15015212
CHINA MERCHANT-A
27
0.2227171
8566644
INNER MONG YIL-A
29.84
1.704158
12543474
ZIJIN MINING-A
3.14
1.290323
38044741
CHINA MINSHENG-A
10.27
0.3910068
150602081
INNER MONGOLIA-A
4.83
2.330508
33299316
ZOOMLION HEAVY-A
7.43
0.541272
32246492
CHINA NATIONAL-A
9.24
0.7633588
22008972
JIANGSU HENGRU-A
31.64
1.96584
4222277
12.87
5.233034
62156777
CHINA OILFIELD-A
15.79
1.608752
4385762
JIANGSU YANGHE-A
57.28
2.56043
4301845
CHINA PACIFIC-A
21.33
3.644315
16659429
10.4
2.261554
6682658
19.12
0.6845708
20335318
JIANGXI COPPER-A
CHINA PETROLEU-A
6.89
1.772526
31526766
JINDUICHENG -A
CHINA RAILWAY-A
5.27
1.541426
26246071
KANGMEI PHARMA-A
18.08
0.724234
28314653
CHINA RAILWAY-A
2.93
1.736111
45716431
KWEICHOW MOUTA-A
177.8
3.102349
3019639
CHINA SHENHUA-A
20.66
0.7804878
9134287
LUZHOU LAOJIAO-A
24.58
2.759197
9447061
CHINA SHIPBUIL-A
4.18
1.210654
30893307
METALLURGICAL-A
2.05
0.9852217
19696490
CHINA SOUTHERN-A
3.48
0.5780347
16879718
NARI TECHNOLOG-A
18.78
2.73523
26280060
166452926
NINGBO PORT CO-A
2.46
0
11539307
8.54
0.4705882
11503017
2.939686
84054468
CHINA STATE -A CHINA UNITED-A CHINA VANKE CO-A
3.69
3.361345
3.72
2.197802
200843393
PETROCHINA CO-A
11.32
-0.6145742
70548375
PING AN BANK-A
20.31
7.18
-0.5540166
15963181
PING AN INSURA-A
41.53
1.07082
27369226
CHONGQING CHAN-A
11.21
0.990991
23708467
POLY REAL ESTA-A
12.09
0.4152824
38972270
CHONGQING WATE-A
6.26
1.130856
7239679
QINGDAO HAIER-A
13.36
1.288855
20981571
PRICE DAY %
Volume
NAME
PRICE DAY %
Volume
CHINA YANGTZE-A
ZTE CORP-A
MOVERS 271
19
10 2540
INDEX 2525.983 HIGH
2533.28
LOW
2430.07
52W (H) 2791.303 (L) 2102.135
2420
2-May
6-May
FTSE Taiwan 50 Index NAME ACER INC
NAME
24.2
2.542373
19984569
FORMOSA PLASTIC
71.6
1.129944
6470261
TAIWAN MOBILE CO
ADVANCED SEMICON
26.05
0.3853565
13132292
FOXCONN TECHNOLO
80.9
0.3722084
6962155
TPK HOLDING CO L
ASIA CEMENT CORP
37.75
0.8010681
3279941
FUBON FINANCIAL
40.9
-3.423849
32669684
TSMC
ASUSTEK COMPUTER
358.5
3.913043
3693662
HON HAI PRECISIO
77.9
0.516129
34762001
AU OPTRONICS COR
13.65
0
108493829
HOTAI MOTOR CO
260
0
113872
CATCHER TECH
PRICE DAY %
Volume
109.5 -0.4545455
4067065
590
0.8547009
2418344
111.5
1.363636
19393798
UNI-PRESIDENT
58.5
-1.845638
8465303
UNITED MICROELEC
11.8
3.508772
109090364
160
5.960265
25528341
HTC CORP
280.5
0.3577818
12050185
WISTRON CORP
29.3 -0.1703578
5761982
CATHAY FINANCIAL
39.65
-2.219482
39167331
HUA NAN FINANCIA
17.15
0
3635078
YUANTA FINANCIAL
14.9
-1.324503
8224626
CHANG HWA BANK
17.05 -0.2923977
5446839
LARGAN PRECISION
842
3.950617
2794742
YULON MOTOR CO
51.1
0.7889546
1816134
LITE-ON TECHNOLO
54
1.503759
3981616
CHENG SHIN RUBBE
98.4
-1.6
3444547
CHIMEI INNOLUX C
18.85
0
62980129
MEDIATEK INC
372.5
1.637108
7969214
CHINA DEVELOPMEN
8.24
0
20613589
MEGA FINANCIAL H
23.6
0.8547009
26315767
CHINA STEEL CORP
25.5 -0.9708738
14444094
NAN YA PLASTICS
59.5 -0.3350084
7756822
CHINATRUST FINAN
18.2
0.2754821
23561688
PRESIDENT CHAIN
95.1
CHUNGHWA TELECOM
188.5
-0.105042
7134617
QUANTA COMPUTER
COMPAL ELECTRON
18.65 -0.2673797
15612230
SILICONWARE PREC
35.25
DELTA ELECT INC
145.5 -0.3424658
-1.049869
60.3 -0.4950495
1085787 4807501
0.8583691
17033474
3412855
SINOPAC FINANCIA
14.95
0
10869875
FAR EASTERN NEW
31.7
0.1579779
3173087
SYNNEX TECH INTL
48.8
0.6185567
4802978
FAR EASTONE TELE
73.2 -0.1364256
3611276
TAIWAN CEMENT
38.45
0.3916449
3800977
FIRST FINANCIAL
18
-1.369863
11622939
17
0.2949853
5073376
FORMOSA CHEM & F
70
1.892285
6173879
TAIWAN FERTILIZE
73.2
1.525659
4807497
FORMOSA PETROCHE
81.4
0.9925558
1568730
TAIWAN GLASS IND
29.4 -0.8431703
1007553
TAIWAN COOPERATI
MOVERS
27
17
6 5720
INDEX 5710.09 HIGH
5715.83
LOW
5650.06
52W (H) 5726.94 5640
(L) 4719.96 2-May
6-May
13
May 8, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 37.4
64.6
37.2
64.5 19.2
37.0
64.4
36.8
average 36.997
Min 36.4
36.4
Last 36.9
Max 64.55
average 64.512
Min 64.25
64.2
Last 64.5
42.00 41.75 41.50 41.25
Max 41.95
average 41.416
Min 41
Last 41.55
41.00
Max 20.7
average 20.791
Commodities PRICE
DAY %
YTD %
(H) 52W
96.35
0.773977617
3.059150711
101.4199982
81.34999847
BRENT CRUDE FUTR Jun13
104.72
0.508686054
-2.983138781
116.6699982
90.91999817
GASOLINE RBOB FUT Jun13
283.13
0.20881999
-1.079589127
324.119997
235.9499931
GAS OIL FUT (ICE) Jun13
863
0.116009281
-5.372807018
992.75
799.25
NATURAL GAS FUTR Jun13
4.01
-0.767136847
14.31014823
4.457000256
3.203999996
289.37
0.322424074
-3.787072749
323.8899946
258.589983
Gold Spot $/Oz
1473.16
0.1639
-11.4932
1796.08
1322.06
Silver Spot $/Oz
24.1563
0.1609
-19.7732
35.365
22.0713
Platinum Spot $/Oz
1495.55
-0.2967
-1.4627
1742.8
1374.55
Palladium Spot $/Oz
691.15
-0.3805
-1.2163
786.5
553.75
LME ALUMINUM 3MO ($)
1882
3.920485919
-9.213699952
2200.199951
1809
LME COPPER 3MO ($)
7270
6.162383178
-8.334384063
8422
6762.25
LME ZINC
1885
3.628367235
-9.375
2230
1745
15225
3.71253406
-10.75615475
18920
14609 14.79500103
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul13 CORN FUTURE
Jul13
WHEAT FUTURE(CBT) Jul13 SOYBEAN FUTURE Jul13 COFFEE 'C' FUTURE Jul13 SUGAR #11 (WORLD) Jul13
average 19.156
Min 19
24.5
20.6
24.4
20.5
24.3
20.4
24.2
20.3
24.1
20.2
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
15.38
0.162813416
-2.318196253
17.07500076
-1.965973535
-7.027608462
824
527
712.5
-1.178918169
-10.23622047
900
664.75
1392.25
0.360425302
-0.21501523
1605.75
1217.75
140.9
1.039799211
-5.784018723
202.1999969
132.6999969
NAME
17.18000031
ARISTOCRAT LEISU
69.94999695
CROWN LTD
86.91
-0.397727273 0.555362721
-11.19554205 13.0610121
23.05999947 94.19999695
World Stock Markets - Indices
Max 24.45
average 24.141
Min 24
Last 24.35
24.0
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
1.0249 1.5559 0.9375 1.3108 99.37 7.9921 7.7595 6.1666 54.1138 29.63 1.2324 29.548 40.925 9736 101.837 1.22889 0.84243 8.0869 10.4709 130.24 1.03
-0.6784 -0.0963 -0.224 -0.0458 -0.3824 0.0013 -0.009 -0.1687 -0.3304 0.2362 0.1298 -0.0508 -0.1833 -0.0103 0.2966 -0.1863 -0.038 -0.2288 0.1471 -0.3071 0.0194
-1.243 -3.8143 -2.3573 -0.6217 -13.3541 -0.1114 -0.1147 1.0378 1.6284 3.2062 -0.8926 -1.7429 0.1955 0.5855 -12.2843 -1.7422 -3.2062 1.615 0.5682 -12.7994 -0.0097
1.0625 1.6381 0.9972 1.3711 99.95 8.0111 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 105.433 1.25692 0.88151 8.4957 10.9254 131.12 1.032
0.9582 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1529 51.3863 28.56 1.2152 28.913 40.54 9208 74.482 1.20054 0.77553 7.7018 9.6245 94.12 1.029
Macau Related Stocks PRICE
DAY %
YTD %
(H) 52W
(L) 52W
3.9
0.2570694
23.80952
3.99
2.29
VOLUME CRNCY 1292236
12.85
-0.3875969
20.43111
13.12
8.06
908163
AMAX HOLDINGS LT
0.81
0
-42.14286
1.9
0.75
217725
BOC HONG KONG HO
26.95
0.3724395
11.82572
27.1
20.85
9608647
CENTURY LEGEND
0.305
0
15.09435
0.42
0.215
0
6.05
-0.4934211
1.001673
6.74
2.8
26113
CHEUK NANG HLDGS CHINA OVERSEAS
24.15
1.257862
4.545453
25.6
14.624
9199760
CHINESE ESTATES
13.66
-0.2919708
12.61876
13.8
7.697
1005500
CHOW TAI FOOK JE
10.38
0.1930502
-16.55948
13.4
8.4
4088600
EMPEROR ENTERTAI
2.35
-0.8438819
24.33863
2.49
1.1
1875000
FUTURE BRIGHT
2.26
-9.6
85.2459
2.75
0.77
27102000 23909439
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
14973.96
0.9599786
14.26893
15009.58984
12035.08984
NASDAQ COMPOSITE INDEX
US
3378.633
1.137872
11.89329
3388.115
2726.68
GALAXY ENTERTAIN
36.15
5.856515
19.11038
36.2
16.94
FTSE 100 INDEX
GB
6521.46
0.9402991
10.57426
6541.69
5229.76
HANG SENG BK
129.3
0.3881988
8.930079
131.5
99.2
829895
DAX INDEX
GE
8133.17
0.1339524
6.841212
8148.14
5914.43
HOPEWELL HLDGS
31.05
2.306425
-6.616541
35.3
19.049
1167074
NIKKEI 225
JN
13694.04
-0.7631519
31.73452
13983.87
8238.96
HSBC HLDGS PLC
HANG SENG INDEX
HK
22915.09
0.992201
1.139475
23944.74
18056.4
CSI 300 INDEX
CH
2525.983
1.326601
0.1201373
2791.303
2102.135
TAIWAN TAIEX INDEX
TA
8169.05
0.4181915
6.098445
8197.519531
6857.35
MGM CHINA HOLDIN MIDLAND HOLDINGS
86.05
0.9384164
5.842554
88.45
59.8
10934483
HUTCHISON TELE H
4.35
1.162791
22.19101
4.36
2.98
5580807
LUK FOOK HLDGS I
21.85
0.6912442
-10.45082
30.05
14.7
1461362
MELCO INTL DEVEL
16.22
4.375804
80.02219
16.24
5.12
7219216
18.9
1.941748
42.33772
19.04
9.509
9585765
3.53
0.2840909
-4.594596
5
3.249
854000
NEPTUNE GROUP
0.158
1.282051
3.947372
0.226
0.084
6130000
NEW WORLD DEV
14.12
1.436782
17.47088
15.12
7.95
13107113
SANDS CHINA LTD
41.45
2.59901
22.09131
43.7
20.65
12313892
SHUN HO RESOURCE
1.51
0
7.857145
1.67
1.03
20000
755.149
SHUN TAK HOLDING
4.16
0.4830918
-0.7159918
4.65
2.56
2456188
3238.77
SJM HOLDINGS LTD
19.76
2.489627
9.777778
22.15
12.34
9366203
SMARTONE TELECOM
14.24
3.039074
1.136364
17.38
12.5
6993326
WYNN MACAU LTD
23.95
1.268499
14.3198
24.3
14.62
5436043
ASIA ENTERTAINME
4.51
-1.528384
47.38562
5.52
2.4
83026
41.74
412784
KOSPI INDEX
SK
1961.48
-0.2151894
-1.781131
2042.48
1758.99
S&P/ASX 200 INDEX
AU
5156.202
0.5205772
10.91111
5201.3
3985
ID
4991.871
1.347848
15.64126
5062.673
3635.283
FTSE Bursa Malaysia KLCI
MA
1753.66
3.474808
3.831379
1826.22
1526.6
NZX ALL INDEX
NZ
979.209
1.169347
11.01476
983.204
PHILIPPINES ALL SHARE IX
PH
4479.95
-0.2238307
21.11312
4525.92
JAKARTA COMPOSITE INDEX
19.0
Last 19.22
20.7
COUNTRY MAJOR
648.25
17.53
COTTON NO.2 FUTR Jul13
NAME
Last 20.35
(L) 52W
WTI CRUDE FUTURE Jun13
HEATING OIL FUTR Jun13 METALS
Min 20.25
Max 19.28
Currency Exchange Rates
NAME ENERGY
19.1
64.3
36.6 Max 37.35
19.3
HSBC Dragon 300 Index Singapor
SI
656.17
-0.86
5.65
NA
NA
STOCK EXCH OF THAI INDEX
TH
1578.95
-0.6443534
13.43601
1603.01
1099.15
HO CHI MINH STOCK INDEX
VN
488.32
2.752294
18.02866
518.46
372.39
BALLY TECHNOLOGI
52.55
-0.492331
17.53523
54.92
Laos Composite Index
LO
1366.28
-0.297732
12.47232
1455.82
980.83
BOC HONG KONG HO
3.52
1.440922
14.65798
3.59
2.7
6500
GALAXY ENTERTAIN
4.47
2.382043
12.59446
4.93
2.25
26150 1961554
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
INTL GAME TECH
17.45
1.04227
23.14749
17.58
10.92
JONES LANG LASAL
98.77
0.7035073
17.66738
101.46
61.39
249256
LAS VEGAS SANDS
57.11
0.2457434
23.72184
57.88
32.6127
5342112
MELCO CROWN-ADR
24.75
1.893783
46.9715
24.95
9.13
3539102
MGM CHINA HOLDIN
2.29
0
23.78378
2.44
1.36
5000
MGM RESORTS INTE
14.66
0.7560137
25.94501
14.9
8.83
12153623
SHFL ENTERTAINME
15.8
1.869761
8.965517
17.36
11.75
224615
SJM HOLDINGS LTD
2.49
0.8097166
7.79221
2.85
1.65
9613
WYNN RESORTS LTD
138.8
1.595667
23.38875
139
84.4902
1553611
AUD HKD
USD
14
May 8, 2013
Opinion
A New World’s new development bank Nicholas Stern
President of the British Academy, is Professor of Economics and Chair of the Asia Research Centre at the London School of Economics and Political Science
Joseph E. Stiglitz
Nobel laureate and Professor of Economics at Columbia University
Amar Bhattacharya
Director of the G-24
Mattia Romani
A
Deputy Director General of the Global Green Growth Institute
t the conclusion of their summit in Durban in March, the leaders of the BRICS (Brazil, Russia, India, China, and South Africa) announced their intention to establish a New Development Bank aimed at “mobilising resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries”. The significance of this decision cannot be overemphasised. For starters, it reflects the enormous successes in economic development during the last four decades (the BRICS’ aggregate GDP is now greater than that of the advanced countries when the Bretton Woods institutions were founded) and the rebalancing of global economic power that this implies. Indeed, the decision demonstrates the BRICS’ ability and willingness to work together, for their own benefit and for that of the entire world. Emerging markets and developing countries are taking the future into their own hands – at a time when rich countries are muddling through their own selfinflicted problems. A new development bank is clearly needed. The infrastructure requirements alone in emerging-market economies and low-income countries are huge – 1.4 billion people still have no reliable electricity, 900 million lack access to clean water, and 2.6 billion do not have adequate sanitation. At the same time, an estimated two billion people
will move to cities in the next quarter-century. And policymakers must ensure that the investments are environmentally sustainable. To meet these and the other challenges confronting the developing world, infrastructure spending will have to rise from around US$800 billion to at least US$2 trillion annually in the coming decades. Otherwise, it will be impossible to achieve longterm poverty reduction and inclusive growth.
Funding gap While the private sector can meet some of these needs, it can go only so far, especially given the nature of infrastructure projects’ risks, the huge upfront costs, and the high cyclical sensitivity of global financial markets. The funding gap is beyond what existing international financial institutions can meet – and the advanced countries’ malaise means that significant recapitalisation is not in the cards. Annual infrastructure financing from multilateral development banks and overseas development assistance is likely to amount to no more than US$40-60 billion, or 2-3 percent of projected needs. A development bank anchored in emerging markets and developing countries can help to address this gap and become a powerful catalyst for change, both in the developing world and – through collaboration and example – in existing institutions. The world today is markedly different from the world at the
time of the founding of the World Bank and many of the regional development banks. The BRICS’ proposed New Development Bank presents an important opportunity to reflect these changes, with modern financial instruments, strong governance, and a broad-based mandate. For example, changes in financial markets (including the large amounts of money in sovereign wealth funds and public pension funds) provide opportunities for new development partnerships, which the New Development Bank can help to catalyse and orchestrate. So, too, should its deployment of a wide range of modern instruments enable it to meet the diverse range of project needs while ensuring adequate risk management. The new bank should maximise its multiplier effects by sharing and reducing risk through collective action and “crowding in” other financing; by setting a powerful example
in adopting innovative and cost-effective approaches; and through its policy and institutional impact beyond projects that it finances.
Shared benefits While the older institutions have attempted to adapt, their governance remains out of sync with today’s economic and political realities. The new bank’s governance structure has yet to be worked out, but it promises to be more consistent with contemporary best practices. Most important, the New Development Bank will give greater voice to the perspectives and interests of those in developing countries and emerging markets. As with the outdated governance arrangements, conceptions of development that informed the existing multilateral institutions’ mandates are markedly different from modern development thinking. For example, there was no awareness of the challenge posed by climate change, and that all countries (including those in the developing world) must reduce their greenhouse-gas emissions and adapt to changes that will be particularly adverse to poor countries. Likewise, there was no comprehension of the innovation and opportunities entailed in pursuing more sustainable paths of inclusive economic growth. Of course, the World Bank and the regional development banks now recognise such imperatives, and the New Development Bank should not relieve the developed countries of their responsibilities. But, with the shortfall of assistance from developed to developing countries, the new bank can provide essential help to developing countries and emerging markets as they undertake smarter and more sustainable infrastructure investment for growth and poverty reduction.
Given the need to act quickly – and given the slowness with which the developed world has been responding – this new institution is all the more welcome. The new bank can make a major contribution to the global economy’s health by facilitating the transition to new poles of growth and demand, helping to rebalance global savings and investments, and channelling excess liquidity to productive use. It will not only be a driver for sustainable growth in the developing and emerging world, but will also foster reform in the existing multilateral financial institutions – changes from which all of us, in the developed and developing world alike, will benefit. © Project Syndicate
Given the need to act quickly – and given the slowness with which the developed world has been responding – this new institution is all the more welcome
editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
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15
May 8, 2013
Opinion Business
wires
Leading reports from Asia’s best business newspapers
Malaysia’s vote is over but drama is just beginning
Inquirer Business The Philippine government is spending 29 billion pesos (US$709 million) – 12 billion pesos this year and 17 billion pesos in 2014 – on a tourism infrastructure programme that willconnecttouristspotstomajor roadways. The programme is being implemented by the departments of tourism and of public works and highways. “DPWH will be building roads in areas identified in the national tourism plan in order to improve the travel experience for tourists. This is the first time that the government has set a dedicated budget for tourism infrastructure,” Tourism Secretary Ramon Jimenez Jr. told reporters.
Bangkok Post The Bank of Thailand plans to set a minimum period for Thai bond holding by foreigners and impose a fee for investment in the debt market to curb capital inflows and rein in the baht, Deputy Prime Minister and Finance Minister Kittiratt NaRanong said. He was referring to the plan to ease the baht’s strength the central bank had submitted to the ministry last week. However, Mr Kittiratt said such measures are too broad and no specific effective date has been set. The central bank only said the measures would be imposed at an appropriate time, he said.
Asahi Shimbun Japanese companies are looking increasingly abroad to set up manufacturing bases. Hiromasa Yonekura, the chairman of Keidanren (Japan Business Federation), Japan’s largest business organisation, acknowledged that the rules have changed and that strategic bases must be opened overseas to secure success for the business sector. “The hollowing out (of the industrial sector is the result) of a major groundswell in the world economy known as globalisation,” Mr Yonekura said. “Companies will likely continue with overseas investment based on the strategy they have established.”
Straits Times Malaysia’s Prime Minister Najib Razak took the oath of office before Malaysia’s King, a day after his Barisan Nasional (BN) survived the toughest challenge to its 56-year rule with a weakened majority. “I will serve as Prime Minister for all Malaysians,” he said after the ceremony. “We will make efforts for national reconciliation so that any form of extremism and racism that is unhealthy for Malaysia is tackled,” he said. The stock market heaved a sigh of relief as fears of instability subsided, opening at a record high yesterday morning before ending the day 3.4 percent up.
Simon Tay
Chairman of the Singapore Institute of International Affairs and associate professor at the National University of Singapore Faculty of Law
J
udging by their giddy rally on Monday, markets in Malaysia are beyond relieved that the country’s general elections are over. A win for the incumbent Barisan Nasional coalition, whose main party has led Malaysia since independence, appeared to promise continuity and stability. Prime Minister Najib Razak adopted a humble tone after the bitterly fought campaign, calling for “national reconciliation”. Elections in Asia, however, often prove less than decisive when the margin of victory is narrow and the stakes are high. Rather than settling matters, Sunday’s vote could well open up Malaysia to the kind of gridlock and endless campaigning that has plagued capitals from Bangkok to Washington. Although Barisan Nasional won 133 seats for a simple majority in the national parliament, it failed to win a two-thirds majority. This was its past benchmark and the target mentioned at party rallies last year. Indeed, the ruling coalition lost further ground – securing seven fewer seats than in the last election. Moreover, the popular vote – yet to be known – may be even narrower. The thin margin – the closest since independence – has already sparked challenges. Before the polls, election observers had raised questions about dubious voters being flown into battleground states and important constituencies. Opposition leader Anwar Ibrahim, a former deputy prime minister, has called into question the results in more than two dozen close races. His followers are angry and only too ready to reject the legitimacy of Najib’s victory.
Street protests Although Anwar has called on his followers to remain peaceful, the opposition leader knows that Malaysians are more likely than ever to take their grievances to the streets. In the past year, the country has witnessed a series of mass protests and rallies, focused on issues such as corruption and the disposal of radioactive waste. These demonstrations have been sponsored not just by Anwar’s opposition but also by a wide spectrum of citizens’ groups. It wouldn’t take much to clog the streets of Kuala Lumpur with protesters and the courts with provocative electoral challenges. Street violence can’t be ruled out. At some recent rallies, government security forces were accused of using excessive force. In particular, there’s a danger that any demonstrations could break down along racial lines. Prime Minister Najib has
Najib Razak, left, and Anwar Ibrahim
already blamed his poor showing partly on a “Chinese tsunami” – a mass exodus of ethnic Chinese voters to the opposition. Chinese-led protests could, in turn, set off a backlash among ethnic Malays, who have benefited from years of affirmative-action policies promoted by the ruling party. Neither Najib nor Anwar really wants to provoke such a confrontation. Yet both men are operating from dangerously weak positions. Surveys suggest that Najib remains more popular than his party, but insiders may not agree. After similar results in the last general election, party chieftains ousted his predecessor, Abdullah Badawi; among the first to back the coup was Najib’s current deputy. Those hard-liners looking for a figure to rally around now might well turn to Mukhriz
Neither Najib nor Anwar really wants to provoke such a confrontation. Yet both men are operating from dangerously weak positions
Mahathir, the son of long-time Malaysian leader Mahathir Mohamed. The younger man led the ruling party’s successful campaign to reclaim the state of Kedah from the opposition, and is slated to become its new chief minister. For Anwar, the personal stakes are even higher. Ever since he was dumped as deputy premier during the 1998 Asian financial crisis and jailed on questionable charges of sodomy, he has been seeking personal vindication as well as
political reform. Now 65 years old, he probably won’t have another chance to come to power through the ballot box. He has every incentive to try to destabilise Najib’s coalition by enticing minority members – in particular legislators from the eastern states of Sabah and Sarawak – to switch sides.
Market policy The irony, as several observers pointed out before the elections, is that on the questions that matter most to markets, Najib and Anwar share a great deal. In the last year, the prime minister has promised and delivered on a number of reforms to trim privileges reserved for the
Malay majority, and has begun to address corruption and state abuses. Local governments controlled by the opposition have won plaudits for their capable, pro-business attitude, with opposition-run Penang turning in the best results of any Malaysian state. Perhaps both sides will be able to return to that modus vivendi, as the markets seem to be indicating, and to improve on Malaysia’s solid 5.6 percent growth last year. Given the personalities and the political stakes involved, though, it’s far more likely that the country is headed for months of tension, gridlock and uncertainty. The election might be over, but the fight is just beginning. Bloomberg View
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May 8, 2013
Closing HSBC profits surge as bad loans fall
Lagarde calls for euro banking union
HSBC Holdings Plc said first-quarter profit almost doubled, beating analyst estimates, as bad debts declined and it cut costs. Pre-tax profit increased to US$8.43 billion from US$4.32 billion in the year-earlier period, the London-based bank said in a statement yesterday. Chief executive Stuart Gulliver has closed or sold 52 businesses since he took the top job in 2011, seeking 30,000 job losses and sacrificing revenue to improve profitability. Operating expenses declined to US$9.3 billion, from US$10.4 billion. Bad loan charges declined 51 percent to US$1.17 billion, the company said.
For European banking union to succeed, all EU member countries need to be in agreement, Christine Lagarde, managing director of the International Monetary Fund, said yesterday. “You need to have all the players at the table,” Ms Lagarde, managing director of the IMF, told students at the University of Amsterdam when asked about Germany’s concerns. The banking union is one of the key projects to improve the economy of the 17 countries sharing the euro. It would help eliminate many of the problems that now hold back the flow of credit needed to finance a recovery, she said.
More smaller firms created in first quarter Tony Lai
tony.lai@macaubusinessdaily.com
The wholesale and retail trade remains the most popular area for new businesses
T
here were more low-capital companies established in the first three months of this year, continuing last year’s trend, official data show. The Statistics and Census Service announced yesterday the number of new firms rose by 12.1 percent yearon-year to 988 in the first quarter. But the combined registered
capital of these firms went down by 22.4 percent to just 154.1 million patacas (US$19.3 million). More than 70 percent of the new firms, or 701, had capital of less than 50,000 patacas whereas only 33 companies had capital of over 1 million patacas. Thewholesaleandretailtraderemains the most popular sector for investors
Carson Yeung lost bid to dismiss ‘prejudicial’ report Hong Kong businessman in talks to sell Birmingham club to Chinese party Stephanie Lai
sw.lai@macaubusinessdaily.com
B
irmingham City football club boss Carson Yeung Ka Sing failed in a bid to dismiss an expert report against him in his HK$721.3 million money (US$93 million) laundering trial yesterday. According to Hong Kong media, Mr Yeung’s lawyer, Graham Harris, asked the court to exclude a report compiled by forensic accountant Roderick Sutton, saying it was irrelevant and “prejudicial” to his client.
Mr Yeung had earlier pleaded not guilty to five moneylaundering charges. But prosecutor John Reading said the expert report could help the court to better understand the case. Judge Douglas Yau Tak Hong agreed and refused Mr Harris’ application. Mr Yeung’s purchase of the English football club Birmingham City was partly paid with funds
starting new businesses, accounting for over 40 percent of all new firms. But it was the business services area that saw the biggest number of new big-capital companies. The total capital of such new firms doubled year-on-year to about 23 million patacas in the JanuaryMarch period. The combined capital of new estate agencies surged by more than four times in the first quarter to 30.7 million patacas. About half of the funds for new firms in the first three months came from within the city while mainland China accounted for 23.4 percent of the new capital, or 36.4 million patacas. Portugal, Hong Kong and the Netherlands trailed far behind, accounting for more than a quarter of the capital, or 42.1 million patacas. The first quarter also saw 129 firms closing doors, a similar figure to a year earlier. By the end of March there were over 40,600 registered firms in Macau, increasing by 8.6 percent year-on-year.
deposited by a Macau casino operator in bank accounts connected to his money laundering trial, Mr Reading said last Friday. Mr Yeung received HK$721.3 million in deposits from a casino operator, securities firms and “unknown parties” into five bank accounts controlled by him over a seven-year period to 2007, Mr Reading said at the beginning of Mr Yeung’s money-laundering trial. A company operating casinos in Macau, which wasn’t named in the proceedings, deposited HK$62.5 million into Mr Yeung’s accounts, the prosecutor’s submission says. The trial will resume tomorrow, with the prosecution expected to start calling witnesses. Meanwhile, Peter Pannu, acting chairman of the football club, said in a statement on the Birmingham City website that Mr Yeung is leading discussions with a Chinese party interested in taking over the club. “I would have preferred someone from the U.K. (...) but it appears we are not making as much headway as I would have wished,” said Mr Pannu.
SJM casinos could fail checks: Angela Leong
S
ome of the casinos and slot parlours operated under the licence of Sociedade de Jogos de Macau SA (SJM) will likely fail the air quality checks on smoking areas again, its executive director hinted. Angela Leong On Kei said on the sidelines of a public event that she had already seen the authorities carrying out a second round of checks in SJM’s gaming venues. The first round found problems with 16 of the company’s venues. And she admitted “having no confidence” that the air quality in the smoking areas of those venues would meet the standards. “Our venues are ‘congenitally faulty’,” she said, stressing that the ventilation systems in most casinos operated under SJM’s licence are old. The Health Bureau announced on April 10 that 28 out of the city’s 46 gaming venues, or 63.6 percent of the total, had air quality issues. The authorities gave them four weeks to improve. She added: “If there is a full smoking ban in all casinos, then there would be no such need to meet the standards.” Secretary for Social Affairs and Culture Cheong U said on Saturday that the administration was determined to reduce, or even cancel, the smoking areas in gaming venues if they failed to pass the second test. Starting January, a partial casino indoor smoking ban limits gaming venues to set up smoking areas no larger than half of their floor space. T.L.