Macau Business Daily, May 13, 2013 by Business Daily

www.macaubusinessdaily.com

Year II

Number 281

Monday May 13, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

Vitor Quintã

MOP 6.00

Bank of China sues Macao Dragon owner 1

April 19, 2013

SJM eyes tie-up for Cotai expansion SJM Holdings Ltd plans to combine land and resources with legislator and SJM director Angela Leong On Kei to build a Cotai casino resort more than three times the size it originally planned. Ms Leong already has a land concession gazetted by the government near Macau Dome on Cotai, which was conceived as a non-gaming scheme. Ambrose So Shu Fai, SJM’s chief executive, said he expects the casino operator’s own land concession to be gazetted “very soon”, so that it could break ground this year.

ank of China Ltd, majority-owned by the mainland government, is suing David Liang Chong Hou – main shareholder in failed ferry operator Macao Dragon Co. Ltd – for unpaid loans. Macao Dragon declared bankruptcy in September 2011 after only 14 months. The company was found to be more than HK$10 million (US$1.29 million) in debt. Lawyers for Bank of China’s Macau branch previously seized two catamarans in lieu of unpaid HK$160 million loans. The vessels were sold in March 2012 for HK$80 million each. The bank’s Macau branch has now asked the city’s Court of First Instance to seize Mr Liang’s stake in Macao Dragon, which has a face value of 4.5 million patacas (US$563,000). More on page 2

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HANG SENG INDEX

Galaxy Entertainment joins Hang Seng Index Casino operator and developer Galaxy Entertainment Group Ltd will be added to Hong Kong’s benchmark Hang Seng Index from June 17. Galaxy joins market rival Sands China Ltd which entered the Hang Seng on June 4 last year. Galaxy’s shares rose to a record high last week after the firm announced a plan to buy the Grand Waldo casino hotel next door to its Cotai flagship Galaxy Macau.

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Public investment modest as govt surplus swells The government’s spending on its public investment plan reached 424.7 million patacas (US$53.1 million) in the first four months of the year, a drop of 58.3 percent from a year earlier, show data released by the Financial Services Bureau on Friday. By the end of the first quarter, the administration had only spent 21.1 million patacas of its multi-billion pataca investment programme.

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May 10

HSI - MOVERS Name

Interview

Sports betting, junkets, need rule review: Melo

Lawyer Luís Mesquita de Melo – who has advised companies interested in establishing sports and online betting in Macau – tells Business Daily there is now public as well as private interest in liberalisation of sports betting. The former general counsel for Sands China Ltd, adds that a decade after casino liberalisation it’s time to look again at the local licensing system for junkets.

Pages 6 & 7

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CHINA RES POWER

6.44

CHINA PETROLEU-H

2.27

BELLE INTERNATIO

2.24

KUNLUN ENERGY CO

1.87

HUTCHISON WHAMPO

1.44

BANK OF CHINA-H

-2.46

CHINA COAL ENE-H

-2.47

HANG LUNG PROPER

-3.16

ALUMINUM CORP-H

-4.78

CITIC PACIFIC

-5.54

Source: Bloomberg

May 13, 2013

Macau

Macao Dragon’s owner sued for unpaid loans Bank of China Macau is taking the major shareholder in the bankrupt ferry operator to court, seeking repayment of outstanding loans Vítor Quintã

vitorquinta@macaubusinessdaily.com

he matter of the settlement of Macao Dragon Co Ltd’s outstanding loans has reached the courts, almost three years after the ferry operator declared bankruptcy. Bank of China Ltd’s Macau branch is suing David Liang Chong Hou, a Hong Kong businessman and the major shareholder in Macao Dragon, seeking to recover loans that have yet to be repaid. The bank has asked the Court of First Instance to seize Mr Liang’s stake in Macao Dragon, which has a face value of 4.5 million patacas (US$563,000). In a notice published in several newspapers here last week, the court asked other creditors to come forward. The bank is unlikely to recoup any of the money it is owed, as Macao Dragon was declared bankrupt in September 2011. Contacted by Business Daily, Bank of China Macau declined to comment, saying its policy on the privacy of information about its customers

prevented it from doing so. During the process of the liquidation of Macao Dragon, a law firm acting for Bank of China Macau in its efforts to recover outstanding loans amounting to HK$160 million seized the ferry operator’s two catamarans. The vessels, the Shen Long and the Tian Long, were sold in March last year for HK$80 million each. At the time a ship broker in Hong Kong said a mainland Chinese ferry operator had bought the vessels and intended to use them to serve Hainan.

Terminal capacity Bank of China Macau did not get all the proceeds of the sale. The first creditors of Macao Dragon to be paid were its employees, who were owed about HK$7.4 million. Business Daily asked Mr Liang to comment but we had received no reply by the time we went to press. Macao Dragon declared bankruptcy after operating ferry

Corporate SHFL ups slot offer at G2E Asia SHFL entertainment, Inc. – a maker of casino equipment – is to include 16 slot machine titles at Global Gaming Expo Asia in Macau next week. The firm, formerly known as Shuffle Master, was previously best known for its card shuffling equipment and electronic table games. Recently it has had major success with its slot machines in the highly competitive Macau slot market. The Duo Fu Duo Cai progressive jackpot link slot game launched at G2E Asia 2012. This year SHFL will display the third game in the series, Diamond Eternity, joining proven performers 88 Fortunes and 5 Treasures. “As gaming in Asia continues to grow, we look forward to demonstrating our continuing commitment to our Asian customers with a compelling line-up of market-relevant products,” said Gavin Isaacs, SHFL’s chief executive. “… expanding regional offices in Macau, the Philippines, and Singapore, along with our new content studio in China, underscore our long-term focus in the region,” he added.

Taboo 2013 holds celebrity night A new cabaret at City of Dreams on Cotai held its official opening night three weeks after the show actually began. Taboo 2013 is a revamped version of a limited-run cabaret performed last year. Both shows are by Franco Dragone, the creator of City of Dreams’ highly successful motorbikes-and-swimming pools extravaganza The House of Dancing Water. The first version of Taboo was held from June to September. The 2013 version is also being held at Club Cubic inside Melco Crown Entertainment Ltd’s flagship casino resort. The new show opened on April 13. On Friday, celebrities including Carina Lau and local worthies attended a celebration dubbed as ‘Grand Opening Night’. The 70-minute show – aimed at mature audiences – includes singing; pole dancing and even a stage set resembling a sauna. It is being performed in the evening, Tuesdays to Saturdays inclusive.

services between Taipa and Hong Kong for only 14 months. The company blamed the government for its failure, saying the government had reduced the

MOP4.5 mln Face value of David Liang’s stake in Macao Dragon

number of passengers it was allowed to carry on each sailing to 750 from the intended 1,150. The Maritime Administration said in February that the limit on the number of passengers on each sailing had to be 750 in view of the capacity of the temporary ferry terminal on Taipa. The administration also said that, on average, Macao Dragon’s ferries were just 45 percent full. The administration told Business Daily that since Macao Dragon’s demise it had received no applications to run new ferry services between Hong Kong and Taipa. The director of the Maritime Administration, Susana Wong Soi Man, told Business Daily in December that construction of the permanent ferry terminal on Taipa should be finished by the middle of this year. She said the builder should hand the terminal over to the government “in the third quarter of 2013, at the earliest” and that six to nine months

May 13, 2013

Macau

Feeble capital spending by govt bloats surplus Gaming tax revenue inflates the government’s budget surplus as its spending on infrastructure remains timid

editorial

I’m a well, thank you

Stephanie Lai

sw.lai@macaubusinessdaily.com

Michael Grimes

michael.grimes@macaubusinessdaily.com

W Trials of facilities on University of Macau’s new campus due to begin next month (Photo: Manuel Cardoso)

h e government’s capital spending in the first four months of this year was 424.7 million patacas (US$53.1 million), 58.3 percent less than in the equivalent period last year, according to data released by the Financial Services Bureau on Friday. But the latest figure indicated a spurt in capital spending in April. By the end of the first quarter, the government had spent only 21.1 million patacas of the 17.9 billion patacas it plans to disburse from its capital account this year. Most of the budget for capital expenditure is for big infrastructure projects, including the Light Rapid Transit elevated railway, the artificial island where the Hong Kong-ZhuhaiMacau Bridge will land and the University of Macau’s new campus on Hengqin Island. The Infrastructure Development Office told Business Daily last month that the campus project was at the testing and commissioning stage, and that trials of the new facilities would begin by next month, with a view to the university opening the

campus in September. Government capital spending usually picks up in the second half of the year, particularly towards the end of the year, when bills for many big contracts are settled. Capital spending by the public sector as a whole was about 431 million patacas in the first four months, 57.8 percent less than a year earlier. Government current and capital spending combined was 9.2 billion patacas in the first four months, 11.6 percent less than a year earlier and only 12.4 percent of the amount budgeted for the whole of this year.

Fit to burst Government current spending was 8.5 billion patacas, much of the sum being spent on the pay and benefits of civil servants. The government approved last month an increase of 6.06 percent in the pay of the city’s 28,000 civil servants. The increase will cost the government 633 million patacas this year. By April the government had

spent 15.4 percent of its budget for current expenditure but only 2.4 percent of its budget for capital expenditure. The public purse kept swelling last month. Government revenue, most of it from gaming taxes, was 48.8 billion patacas, 21.2 percent more than a year earlier. The government relies heavily on revenue from direct taxes on gaming. These taxes brought in 40.6 billion patacas in the first four months, making up 83.2 percent of government revenue. The government takes 35 percent of gross gaming revenue in direct taxes and another 4 percent of it in indirect taxes. The government had a budget surplus of 39.6 billion patacas in the first four months, 32.7 percent more than a year earlier, as revenue grew much faster than expenditure. The surplus for the first four months is not far short of the surplus of 41.1 billion patacas budgeted for the whole year. Last year the government had a surplus of 72.8 billion patacas.

Macau cancels doctors’ trip to check on Lau’s health Health Bureau says it cannot send medical team to Hong Kong Stephanie Lai

sw.lai@macaubusinessdaily.com

eputy director of Macau’s Health Bureau Cheang Seng Ip told media yesterday that the bureau couldn’t send staff to assess the health of Hong Kong tycoon Joseph Lau Luen Hung as Mr Lau is “outside the legal jurisdiction” of the bureau. Joseph Lau and fellow Hong Kong billionaire Steven Lo Kit Shing were accused of bribing former secretary for Transport and Public Works Ao Man Long with HK$20 million (US$2.5 million) in exchange for the granting of a land plot near Macau airport for the La Scala high-end residential project. Both Mr Lau and Mr Lo have

denied the charges. Mr Lau failed for a second time to show up at a hearing session held on April 29 as he “was too ill to appear in court”, his lawyer Leong Weng Pun said. Presiding judge Mário Silvestre said that was the last time he would accept illness as an excuse for Mr Lau’s failure to appear. Judge Silvestre added the court would have Macau doctors to visit Mr Lau to determine whether he was fit to stand trial. However, Mr Cheang told media yesterday that the bureau could not send its medical team to the neighbouring city. Hong Kong’s

Sunday Morning Post reported the story yesterday. “Hong Kong has its own legal system and recognition for medical professionals, which means we cannot just conduct the health inspection there as we want to,” said Mr Cheang on the sidelines of a public event. The court would notify Mr Lau of the hearing set for June 17, Judge Silvestre said last month. The law says a trial may proceed in the absence of the accused if he or she has been duly notified. Mr Lau would accept the trial to go ahead without him, his counsel Mr Leong told reporters on April 29.

hoever thought a service monopoly a good idea has clearly never tried to make a fixed line telephone call from Macau via CTM. On a recent call to the United States, I attempted to put my office fixed line handset on the speaker function. My contact said cheerfully it sounded as if I were ‘speaking from the bottom of a well’. It’s 140 years since either Alexander Graham Bell (if you’re American) or Antonio Meucci (if you’re ItalianAmerican or just old-fashioned Italian) invented the telephone. It should not therefore be beyond humanity’s wit to have fixed line telephone services where you have a realistic expectation that the call won’t: a) disconnect spontaneously; b) drop out sporadically; or c) sound like one or more parties to the call is speaking from the bottom of a well. I would be happy to accept the possibility there might be some deficiency in our office handsets – were it not for the fact that the spontaneous disconnections, droppings out and warblings from well bottoms etc. have occurred on other fixed lines I have used here. Such problems also happen with depressing frequency on services for portable smartphones. I don’t feel quite as bad about the latter glitches, because I have no great expectations of CTM’s wireless Internet and ‘3G’ services (mobile communications to you and me). Undersea cable problems or no undersea cable problems, I have had better download speeds in Kenya – officially a developing country – than I have had in Macau. So much for ‘world class tourism destination’. CTM – in typical Macau fashion – has gone from virtual radio silence after three major mobile telephony service failures within 12 months, to frantic public relations activity, with every instalment of the progress of the undersea cable repair treated as if it were a bulletin on the arrival of a royal baby. I have serious doubts that CTM has actually laid any fibre optic cable – capable of handling the enormous bandwidth required for modern telecommunications – in the city’s fixed network for private lines and small businesses. I suspect that if I got up in the middle of the night and went out with a backhoe (no sniggering please) I would find only old-fashioned coaxial cable that would be recognisable as such to Messrs Bell and Meucci. The sketchiness of CTM’s services across several media has not stopped the company from proclaiming – with a gall that is both amusing and appalling – its intention to ‘roll out’ (a carpet-laying metaphor popular in modern business management circles) 4G services. Last time I checked, 4G services were supposed to be stronger, faster and higher (in capacity) than 3G. I’d settle for a 3G service that actually worked. There’s only one thing worse than a monopoly, and that’s a monopoly unwilling to invest properly in its infrastructure and services. That’s why in my view Citic Telecom International Holdings Ltd can’t get here quickly enough.

May 13, 2013

Macau

SJM paid HK$62 mln to Carson Yeung

Brought to you by

HOSPITALITY Tier-2 arrival trends The three top sources of flights to Macau - China, Taiwan and Thailand – represented broadly four-fifths of arrivals on the most recent months on record. Almost all the rest came from South Korea, Japan, the Philippines, Malaysia or Singapore. Other points of origin show usually negligible values. For the sake of simplicity and clarity of the plot the chart shows the fourquarter moving average of the number of flights that arrived each quarter from those five countries between 2008 and the first quarter of this year.

Casino operator declines to comment on reason as Mr Yeung’s money laundering case in Hong Kong continues Tony Lai

tony.lai@macaubusinessdaily.com

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Carson Yeung – paid money by SJM

The number of flights from Malaysia declined by more than half, a trend likely to be partly associated to the development of Air Asia’s network. So Thailand has replaced Malaysia as the origin of the third-largest number of flights to Macau. In the other cases the trends are less dramatic but varied. The number of flights from South Korea has slowly but steadily risen to over 200 flights per quarter, double the number early in 2010. South Korea replaced Japan as the origin of the seventh-largest number of flights to Macau in early 2011. After that, the number of flights from Japan kept falling, although it rebounded slightly last year. The number of flights from Singapore has been falling lately, having risen steadily for most of 2010 and 2011. The number of flights from the Philippines dived in 2009 and the first half of 2010. It then began climbing and has levelled off lately at about 250 per quarter. J.I.D.

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Growth in flights from South Korea since 2008

ank accounts linked to the money-laundering trial of businessman Carson Yeung Ka Sing showed a payment of HK$62.45 million (US$8.04 million) by casino operator SJM, reported Hong Kong media. SJM’s chief executive Ambrose So Shu Fai was asked about the report at an event in Macau on Friday. “As the case is now undergoing judicial procedures, it is not appropriate [for SJM] to make any comment,” Mr So told reporters. Asked whether any representative from the operator will be summoned to court to testify, Mr So said “I don’t know yet”. He made no further comment. Mr Yeung is chairman of Hong Kong-listed Birmingham International Holdings Ltd, which controls English football club Birmingham City. As Business Daily reported in January – from information given in an unrelated Macau lawsuit – when BIHL bought the club in 2009 it was via a share issue underwritten by Kingston Securities Ltd. The latter is a unit of Hong Kong-listed Kingston Financial Group Ltd previously called Golden Resorts Group Ltd. Kingston Financial Group is controlled by Pollyanna Chu Yuet Wah. Ms Chu’s father, Lee Sui Fok (also known as Lee Wai Man), is an operator of VIP rooms in SJMlicensed casinos.

Kingston Financial Group bought Casa Real casino hotel in Macau in 2005. The property operates on a gaming licence from Sociedade de Jogos de Macau SA, a company founded by Stanley Ho Hung Sun. Kingston also controls the SJMlicensed Grandview Hotel and its casino on Taipa.

As the case is now undergoing judicial procedures, it is not appropriate [for SJM] to make any comment Ambrose So, SJM Holdings’ chief executive

During a court hearing on May 3 in Hong Kong, a lawyer prosecuting Mr Yeung named an unidentified casino company here and other firms as the source of more than HK$721.3 million paid to five bank accounts of Mr Yeung from 2001 to 2007. On Thursday the prosecution named SJM as the source of some of the money. The prosecution lawyer read in open court written testimony of a police financial investigator. It said SJM in particular paid a total of HK$62.45 million over two months during 2004 and 2005. The money was deposited in 14 cheques to Mr Yeung’s account at Wing Lung Bank Ltd, said the evidence of Johnny Kwan Sui Lun. According to media reports in Hong Kong, the prosecution will summon 13 witnesses – mostly staff from financial securities firms. Mr Yeung’s trial was adjourned on Friday as he chaired the annual general meeting of BIHL in Hong Kong. He did not take any questions from the media after the meeting. But Peter Pannu, the company’s managing director, revealed that the football club had offloaded five senior players each earning more than 50,000 pounds (HK$600,000) a week. Mr Yeung has pleaded not guilty to five money-laundering charges against him. The trial resumes today. With Michael Grimes

May 13, 2013

Macau

SJM Cotai 3 times bigger thanks to Angela Leong Her original non-gaming plan to be combined with SJM’s casino resort Tony Lai

tony.lai@macaubusinessdaily.com

JM Holdings Ltd is to combine land and resources with legislator and SJM director Angela Leong On Kei to build a Cotai casino resort more than three times the size it originally planned. Ambrose So Shu Fai, SJM’s chief executive, gave the news on Friday. Ms Leong already has a land concession gazetted by the government for a 180,000-square metre (1.94 million sq. feet) plot near Macau Dome on Cotai. That was originally conceived as a non-gaming scheme in line with the government’s stated policy of diversification from pure gambling. In 2010 Ms Leong – fourth consort of SJM’s founder Stanley Ho Hung Sun – was reported as saying her project was completely independent of SJM. The casino operator’s own land concession for Cotai – announced in October – is for only 70,500 sq. ms. The latter has not yet been gazetted, but Mr So said he expects that to happen “very soon”. He told reporters on the sidelines of an SJM event: “I believe the [SJM] grant will be published on the Official Gazette by the first half of this year.” He added the company had already paid part of the land premium worth 2.15 billion patacas (US$268.75 million). The neighbouring plot for Ms Leong’s project is held by a firm

MOP2.15 bln SJM paid as part of land premium for Cotai plot

called Macau Theme Park and Resort Ltd. At previous press conferences Ms Leong identified herself as a controlling person in that company. In 2010 she said she planned a family-focused non-gaming resort. Macau Theme Park originally said it intended to spend 10.4 billion patacas on building 6,000 hotel rooms, an indoor beach, two theme parks and a ‘4-D theatre’. Since then there has been no news about how it would be financed. “We are now discussing how [SJM] can rent the [Macau Theme Park] land and we will make announcement in due course,” stated Mr So on Friday. “The possibility is very high that we will develop [the project] together.” “If not, SJM only has a 70,000-square-metre plot … the smallest among other operators in Cotai,” he said, compared with land grants of about 400,000 square metres each for Sands China Ltd and Galaxy Entertainment Group Ltd.

Non-gaming Combining SJM’s original Cotai allocation and Ms Leong’s concession would give an SJM-controlled land bank of about 250,000 square metres said Mr So. He noted the government has approved only non-gaming for Ms Leong’s plot. “When we develop together… we can put the non-gaming elements on [Macau Theme Park’s] parcel to support the gaming elements in the original land plot SJM was granted,” he added. Mr So said he expected SJM’s Cotai project could break ground this year and be completed by “between 2016 and 2017”. This was later than the completion forecasts of rival gaming resort projects on Cotai. They vary between mid-2015 and late 2016. SJM’s chief executive didn’t give an update on the likely budget for

the combined Cotai plan. The firm said in November the SJM standalone project could cost up to 20 billion patacas with 700 gaming tables and 1,000 slot machines. Currently SJM only has whollyowned casinos on Macau peninsula, and some satellite operations on the peninsula and Taipa. It remains however the city’s largest casino operator by market share. SJM announced last week its net profits rose by 12 percent year-onyear to HK$1.92 billion in three months ended March 31. Its gaming revenues from high rollers grew by 13 percent to HK$15.1 billion while its mass-market revenues rose only 4.7 percent year-on-year to HK$5.9 billion – significantly below market average for the quarter.

Jai Alai revamp costs rise 40 pct plus The refurbishment of the Jai Alai Palace complex near the Outer Harbour will cost nearly half as much again as originally planned. But the site should be ready by the first half of next year, said Ambrose So Shu Fai, chief executive of SJM Holdings Ltd. Mr So told reporters on Friday the budget for the revamp of one of the city’s oldest casino and entertainment venues would not exceed HK$1 billion (US$128.2 million). Work began earlier this year. Mr So originally estimated the facelift would cost “between HK$600-700 million” in November. “We will not rebuild the premises; instead we have started renovation works inside the infrastructure, as well as the façade,” he said. Mr So noted a bridge would be built on the second floor of Jai Alai to link with another SJM’s gaming venue nearby Casino Oceanus. “Apart from the casino, we will also have some department stores on the venue,” he added, noting SJM would announce more details “in due course”. T.L.

Higher return Business Daily reported last week that the Gaming Inspection and Coordination Bureau (DICJ) has reclassified some of SJM’s premium mass tables as VIP tables. That’s because they had maximum bet amounts per table per game of 300,000 patacas. The figure is considered by DICJ the cut off point between mass tables and high roller ones. However Mr So said SJM planned to persist with the policy of boosting premium mass table numbers because of the attractive margins available. “There were 21 such tables [premium mass] in the first quarter of last year compared with 80 tables we have now,” he said. “Whether we will continue to raise the maximum wager amount on other mass-market tables depends on the reception from the market, which we think has quite favoured such tables,” he added. The chief executive regards this as one of SJM’s strategies. “As the profit margin is higher in the mass floor than the VIP rooms,

this has raised our revenues and cash flow, prompting the growth in net profits as well,” said Mr So. Mr So also said it was “difficult” for all SJM’s 16 casinos and slot parlours with air quality issues to pass second checks. “It’s a historical problem as many of [SJM’s] casinos have low ceiling height so the smoke intensity is higher comparing with others,” he suggested. The Health Bureau announced on April 10 that 28 out of the city’s 46 gaming venues had air quality issues in first round check since the partial smoking ban for casinos began in January. The authorities gave them four weeks to improve. Mr So said the company would continue to deliberate with the government to see “what measures they would take on the failing venues and whether they would give more time for improvement”. The administration said earlier this month it was determined to reduce, or even cancel, the smoking areas in gaming venues if they failed to pass the second test.

SJM – still waiting for the official grant of land in Cotai (Photo: Manuel Cardoso)

May 13, 2013 April 19, 2013

Macau Brought to you by

Financial Monitor The wonder of creation In a dynamic economy new companies are continually appearing while others are continually disappearing. In the first quarter of this year 988 companies were set up and 129 wound up. By the end of the quarter Macau had 40,647 companies. At least 40 percent of the city’s companies were created in the past five years. Put another way, one company was created, on average, for every 2.5 new inhabitants the city gained. This statistic makes you wonder how many of these companies are really active.

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Sports betting – the next goal? The Macau government has shown little interest in liberalising sports or online betting in Macau. Macauslot – a monopoly provider of non-racing sports betting in Macau founded by Stanley Ho Hung Sun and – last year formally had its contract renewed until June 2015 according to the Official Gazette. Macauslot has an online portal but for use only in Macau. Lawyer Luís Mesquita de Melo – who has advised companies interested in establishing sports and online betting in Macau – tells Business Daily there seems to be now strong public as well as private interest in liberalisation of sports betting. The former executive vice president, general counsel and company secretary for Sands China Ltd, adds that a decade after casino liberalisation it’s time to look again at the local licensing system for junkets and see if improvements to the system can be made. It will also be in step with the political mood on the mainland. But he adds it will only be effective if the government has the political will to enforce whatever rules it sets.

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The trend over the past five years has been for the number of companies newly created to increase. The number newly created fell in 2009, after the international financial crisis, but the fall was only 8 percent. The number of companies created last year was almost 43 percent higher than the number created in 2009. On average, about 10 companies were created each day last year. About 60 percent of the companies created were in commerce, finance or business services. In the past five years, on average, about five of the companies created each day were in those three sectors. Not less remarkable are the figures for construction and real estate companies. On average, for the past five years, one of the companies created each day was in construction and one was in real estate,. J.I.D. The content of this column is the work of Business Daily’s journalists.

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Construction companies created, 2008-2013Q1

There was a slowdown in growth in gaming revenue last year, but now it seems to be speeding up again. What can we expect short- to mid-term? There’s been a change and – to use the government’s terminology –we can be said to be looking at a diversification in the gaming structure in Macau. What we have mainly seen is a slowdown in the VIP segment, but we’ve actually seen an increase in the mass market in the second half of last year and beginning of this year. VIP gross gaming revenue accounted for 75 percent of the entire Macau gaming revenue and these days it’s down to 68 percent. I also think that, despite the confidence I’ve seen in some of the analysts in the return of the VIP segment, there are some concerns about the flow of funds out of mainland China. We’ve seen some public statements and it’s quite clear that the central government is making an effort – at least, it is making that effort known – that it is looking at the transfer of funds [from China] and corruption linked situations that might impact the VIP market. Why is the mass gaming outgrowing the VIP gaming? There’s probably less liquidity at the gaming promoters’ level, which obviously affects credit for

gaming. There are probably more controls in place in terms of the transfer of funds out of mainland China and also there might be more internal controls from the operators regarding anti-money laundering rules. On the other hand, there are – because of the type of offer we have in Macau with big gaming floors opening up in the new properties – a bigger number of players that are mass-market players instead of VIP. There is now also a new trend, which is to create what is called the premium mass – somewhere in the middle between what the typical mass-market player will spend in gaming and what’s required to be considered a VIP player. There’s obviously more offer for the mass-market segment than we had a few years ago and all the other constraints I’ve mentioned contribute to this shift. That doesn’t mean that the VIP segment won’t still be a strong segment in terms of the total gaming revenues in Macau. It still accounts for a big portion of Macau gross gaming revenues. But if we consider that in the next three to five years, we will have another six properties opening up, I would say that most of the gaming operators will be preparing themselves for an increase in the mass market.

Considering the VIP sector is being outgrown, do you believe the junket system should be readjusted? Definitely, the junket regulations need to be updated. We now have over ten years of experience since the liberalisation of the market in 2002. I think what was a good start in 2002, definitely needs to be updated ten years on. It’s not only a problem of legislation, it’s a problem of enforcement. What I think we have now, on one hand, are regulations that are probably a little bit out of date, and the experience has shown a few loopholes and things that could be improved. On the other hand, there is the enforcement system, which means that the laws are only good if they are enforced. I would also like to point out – because there is some misunderstanding about the antimoney laundering rules and what they really mean for the gaming operators – that the gaming operators, and I would include in this broad concept the gaming promoters as well, don’t have an obligation to enforce anti-money laundering rules. They are not the enforcement agency or the criminal investigation body. They have an obligation to report and as long as they report the situations that fall under the headings ‘large sum transactions’ or ‘suspicious

May April13, 19,2013 2013

Macau It’s also interesting to note that the new administrative regulation 26/2012 on slot machines has a new section applicable to mobile devices inside the casinos. That only makes sense if you’re looking at opening up a sports betting market. It’s inapplicable as we speak, because there is only one sports betting operator, but it might be an indication that the government was thinking that, sooner or later, within the integrated resorts, it makes sense to have gaming on mobile devices as well as sports betting.

transactions’, they have basically fulfilled their legal obligation. Should there be a bigger control over the junkets that operate in Macau? The legislation that we have now could be improved, but the legal framework that we have is enough to control and monitor the activity of the gaming promoters. The licences are granted on a yearly basis, which means that every year, when they are required to renew their licences, the gaming regulator has another chance to evaluate what has been their performance. If there was any signs of misconduct, they can simply not renew their licences, so we have a gaming regime that has not been totally developed but it has a legal framework that allows for a considerable degree of control and intervention by the gaming regulator and, obviously, the government. The government is the biggest shareholder of the gaming industry and a very big portion of its expenditure comes from the special gaming tax, so the problem may be that if there is a political will to actually control and intervene in the gaming industry in Macau, it will affect, at the end of the day, public revenue. American operators based here also have to answer to regulators in the United States. What do you make of the U.S. regulatory inquiries linked to Macau faced by Las Vegas Sands Corp. and Wynn Resorts? Obviously, I’m not going to talk about The Venetian at all. It has been a decision since I left, not to talk about the company or anybody in the company, but what I can say is that the fact that we have American gaming operators in Macau that are also subject to the regulatory oversight of an American jurisdiction, namely Nevada, has increased the internal controls and the compliance effort [here] compared to the past. With a cross border industry like gaming, you cannot look at the American system and the Macau system in the same way. They are different in nature. In the last few years, there was a sudden international appetite for everything that happens in Macau. That obviously drew the attention of the media. I don’t think that the government of Macau was prepared to deal with that, in the sense that now everything that happens in Macau is obviously reflected in the international media, sooner or later. Obviously, there are some operators more high profile than others and when you

expose yourself in political terms you get more attention and people will scrutinise your business in a way that is different if you are a low profile ‘player’. I don’t agree with the idea that everything done in America, or mostly in Nevada, is done in the right way, because we know they have had problems. The gaming industry itself may attract some of the issues we see reported in the newspapers, but it all depends on how interested the government in Macau will be to upgrade itself into a cross border industry that is now exposed to the eyes of the world. That means, in my opinion, having better legislation, having better enforcement and being able to deal with everything that happens on a global scale, including the gaming operators doing business in Macau. So far, we have not seen any interest on the government side in dealing with that. We see a lot of issues reported in the media but I’m not aware on any action being taken in Macau by the government. The media have reported recently there seem to be signs of legalisation of online gaming. Is there a chance of that happening in the near future? No. I don’t think there is any interest in the local operators to operate online gaming from Macau. The land-based casinos make so much money in Macau that online gaming is simply not attractive to their businesses. On the other hand, we don’t have legislation on online gaming. We have in law nº16/2001 a definition of interactive gaming and it basically says a concession is required to operate interactive gaming, but then there are no rules on how that could be achieved. There appeared at one stage to be a trend for the government to look at liberalising the [online] market. We hoped that would happen in the sports betting sector, as there is considerable investor interest. Sociedade de Lotarias e Apostas Mutuas de Macau, Limitada [SLOT, commonly branded as Macauslot] has an exclusive concession to operate basketball and football in Macau. Although the government in 2008 started to renew the slot concession on a yearly basis, the last time it renewed, in 2012, it renewed for another three years. It was a setback in terms of expectations for many of the sports book operators that would definitely like to come to Macau. There was a window of opportunity where actually the SLOT concession agreement had

an exception to the exclusivity, and that exception was that integrated resorts could have a sports book running there. Nothing happened during that window - I know of one [casino] operator who applied for a sports betting concession, but had no reply and then that exception was taken out on the next [licence] renewal. So, now SLOT has a fully exclusive concession to operate sports betting. Do you see that changing? I think sooner or later that would probably be the first step to move to online interactive gaming. I think that will happen much sooner than online gaming.

We have a lot of markets opening up in Southeast Asia, but do you see any of these posing any risk to Macau’s gaming supremacy? I don’t think so. The gaming product in Macau is very well defined and it has a history behind it. We are still very dependent on the mainland players. I would probably see new markets being attractive to other players. But for the mainland players I don’t see why they would go somewhere else. They have the food and it is an easy city to come to and exit from. All the other gaming destinations emerging now have an accessibility problem. Taiwan is a little bit different, but there are a lot of political issues behind it and the central government has issued its position on that. [The mainland] Being against it will not help [Taiwan] develop a new market. I don’t see in the near future any threats to Macau being the number one gaming destination.

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May 13, 2013 April 19, 2013

Macau Edmund Ho meets Thai premier Thailand’s Premier Yingluck Shinawatra was invited to deliver a speech at the Second Global Tourism Economy Forum to be held in Macau in September. Ms Shinawatra met with Edmund Ho Hau Wah, Macau’s former chief executive and vice chairman of the China People’s Political Consultative Conference, last week. In the meeting, Mr Ho pledged support from China on the construction of a high-speed rail network connecting Thailand, Laos and the mainland, the National News Bureau of Thailand reported. The Cambodian Premier Hun Sen has already accepted Mr Ho’s invitation to deliver a speech in September’s event.

Galaxy Entertainment added to Hang Seng Index Announcement only days after casino operator expanded Cotai land bank via planned acquisition Michael Grimes

michael.grimes@macaubusinessdaily.com

asino operator and developer Galaxy Entertainment Group Ltd will be added to Hong Kong’s benchmark Hang Seng Index with effect from June 17, the compiler of the index said. Galaxy joins market rival Sands China Ltd which entered the Hang Seng on June 4 last year. Becoming a member of the Hang Seng ‘club’ can provide a boost to a firm’s share price. Investment funds – that mirror various indices – are required to buy positions in member firms to reallocate funds and rebalance their portfolios, Grant Govertsen of Union Gaming Research Macau told Business Daily at the time of Sands’ accession. One tracker fund, the Hang Seng Index Exchange-Traded Fund, had a total asset value of HK$35.3 billion (US$4.55 billion) as of May. Galaxy will take the place of

Esprit Holdings Ltd – a retailer and manufacturer of fashion clothing, said a statement from Hang Seng Indexes Co. Ltd, a wholly owned subsidiary of Hang Seng Bank, established in 1984. The number of index members will remain at 50, it added. Galaxy has a market capitalisation of HK$159.9 billion while Esprit is valued at only HK$19.97 billion. The Hang Seng Index has risen 0.3 percent to 23,321.22 since its last quarterly review on February 6. At that time the index compiler said Lenovo Group Ltd – the world’s second-ranked maker of personal computers – was to be added and Aluminum Corp. of China Ltd was to be removed. Lenovo has since tumbled 19 percent, while Aluminum Corp. of China slid 11 percent. Galaxy Entertainment has gained

15 percent since the Hang Seng Index’s last quarterly review. The shares rose to a record high last week after Galaxy announced a plan to buy the Grand Waldo casino hotel next door to Macau’s Cotai strip.

Grand Waldo The company has so far declined to comment on its plans for Grand Waldo. It already licences the venue – across the road from its flagship Cotai operation Galaxy Macau – as a satellite ‘City Club’. The company confirmed to Business Daily that Grand Waldo currently has a gross floor area of 1.5 million square feet (139,354 sq. metres). Some analysts have told us privately the true value of Grand Waldo is as a land bank to add to the contiguous 440,248 sq. ms of

land Galaxy already controls on Cotai through a combination of a direct government land concession and a land swap deal with Hong Kong developer Kerry Properties Ltd. Galaxy – which closed flat on Friday at HK$38.00 – is currently providing a one-year return of 76.74 percent for investors. Sands China, which closed up 0.85 percent on Friday at HK$41.70, has given a one-year return of 50.18 percent. Esprit, the Hong Kong-based clothing seller where two top executives quit last year, last week forecast a “substantial” fiscal-year loss on store closures and loss of goodwill. Its share price on Friday was HK$10.30, down 1.15 percent. Its year-return for investors amounts to a loss of 25.05 percent. With Bloomberg News

Beijing ‘no part’ in LVS’ Macau licence Jury out in second Nevada civil trial over who should get credit for lucrative gaming rights

lawyer for Las Vegas Sands Corp. said the Chinese government had no part more than 10 years ago in the award of gaming licences in Macau for the casino operator controlled by billionaire Sheldon Adelson. The attorney, Richard A. Sauber, told a Las Vegas jury on Thursday U.S. time that it was “inconceivable” that Chinese leaders violated the Macau’s Basic Law and “reached down” to make sure LVS got a gaming licence. The Basic Law is the mini-constitution drawn up by Beijing and Portugal

prior to the handover of the territory in 1999. Hong Kong has its own version negotiated between China and the British. Mr Sauber was making closing arguments in the trial of a suit in which Richard Suen, a Hong Kong businessman, seeks US$328 million (2.62 billion patacas) in damages over claims that the company didn’t honour a promise to pay him for his help with gaining a Macau gaming licence. Mr Suen says that meetings he arranged for LVS chairman Sheldon Adelson with Chinese

officials in 2001 were instrumental in LVS’s selection by the Macau government in 2002 as one of the companies that could operate casinos in the former Portuguese colony. “I’m not sure what Mr Suen’s claim is,” Sauber told the jury at the end of the five-week trial in Nevada state court. “I’m not sure how this meeting did what he signed up to do, deliver a licence.” Mr Suen, 60, claims the meetings he and his associates arranged with then Vice Premier Qian Qichen and Beijing Mayor Liu Qi created the

goodwill that led Edmund Ho Hau Wah, Macau’s first post handover chief executive, to make his decision. LVS’s lawyers say Mr Qian – one of the authors of the Basic Law, wouldn’t have violated it and undermined China’s ‘One Country Two Systems’ policy for its returned territories based merely on a 40-minute meeting with Mr Adelson. Mr Suen’s lawyers made their closing arguments earlier. Clark County District Judge Rob Bare turned the case over to the jury for deliberation. M.G. with Bloomberg News

May April13, 19,2013 2013

Greater China

New loans signal support for growth April bank lending on track as money supply jumps

hinese banks made 792.9 billion yuan (US$129.3 billion) of new loans in April, largely in line with market expectations, while money supply jumped as the central bank kept policy accommodative to support the economy. The lending figure, issued by the People’s Bank of China, was a shade lower than the median forecast of 800 billion yuan, which compared to March’s 1.06 trillion yuan. The broad M2 money supply jumped 16.1 percent in April from a year earlier, the People’s Bank of China said in a statement on its website, above a median forecast of 15.5 percent in a Reuters poll. “The M2 growth in April is much higher than expectations while the new yuan loans is in line with market consensus. It is likely a reflection of rising capital inflows, which in turn pushes up the domestic money supply,” said Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai. “We expect the M2 growth will stay at an annual growth of 15 percent in the second quarter due to

the loose global liquidity conditions.” The slowdown in April lending was widely expected as Chinese banks tend to front-load lending early in the year to book as much interest income as possible. The government has unveiled fresh measures to cool the property sector and taken steps to curb credit flows for debt-ridden local governments to ward off financial risks. The central bank is stepping up its efforts to drain additional cash from the money market to cope with a surge in capital inflows and rein in credit growth.

Spillover effects China has given no public forecast for new lending this year, but analysts widely expect a figure near 9.0 trillion yuan, up from 8.2 trillion in 2012, to help deliver an official GDP growth target of 7.5 percent in 2013. The central bank aims for annual M2 growth of 13 percent for 2013, but the latest data may cast doubt on whether the target will be hit if the central bank keeps policy relatively loose.

Outstanding yuan loans grew by 14.9 percent from a year earlier, in line with forecast. Bank lending remains the centrepiece of China’s monetary system and banks lend at Beijing’s behest, although off-balance sheet financing channels are gaining in significance as China gradually relaxes controls and makes marketoriented reforms. The total social financing, a broad measure of liquidity in the economy, totalled 1.75 trillion yuan in April, central bank data showed, down from 2.54 trillion yuan. Chinese regulators have taken some steps to rein in the rapid rise in the shadow financing activity amid growing concerns about potential financial risks. The PBOC said on Thursday that it will increase policy flexibility to support the economy while stressing the need to ward off inflationary risks. “The negative spillover effects from loose monetary policy in major economies are growing, which has helped pro- cyclical credit expansion at home,” the PBOC said.

low on April 18 on speculation that improvements in U.S. demand will counter the effects of the slowdown in China. In the global economy, the key source of risk is the euro region, “which is wrought with structural problems and mired in recession,” the government said in the statement. Hong Kong faces overheating risks as gains in consumption and personal debt outpace economic growth, Norman Chan, chief executive of the Hong Kong Monetary Authority, told lawmakers on May 3. ANZ cut its forecast for the city’s economic growth to 2.5 percent from 3.7 percent after China’s first-quarter data. Daiwa Capital Markets Hong Kong Ltd, HSBC and DBS lowered their estimates to 2 percent, 3.7 percent and 4 percent respectively. Bloomberg News

Reuters

Misses forecasts on China’s economic slowdown estimates in the first quarter. “The sluggish recovery of major economies including China and the U.S. will remain the major headwinds,” said Raymond Yeung, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd. An additional risk is any “sharp adjustment” of home prices, Mr Yeung said. The economy gained 2.8 percent from a year earlier, after a revised increase of the same size in the three months ended December, the government said, reaffirming a February projection of fullyear growth of 1.5 percent to 3.5 percent. Government economist Helen Chan said the 2 percentage point range reflected an uncertain global economic environment. The benchmark Hang Seng Index is up 8.4 percent from this year’s

China addressing asset-maturity mismatches in WMPs he mainland’s bond market regulator closed off a loophole that allowed banks that sell high-yielding wealth management products (WMPs) to evade regulatory requirements by moving money between the WMP accounts they manage and their own proprietary accounts, bond traders at four Chinese banks told Reuters. The four traders, who spoke on condition of anonymity, said the China Government Securities Depository Trust & Clearing Co Ltd (CDC) and the Shanghai Clearing House had jointly notified commercial banks they could no longer trade bonds between their own proprietary accounts and the WMPs they manage for clients. The rules went into effect Friday afternoon, the sources said. “Yesterday we could do it, today everybody has to undo it; it’s new regulation after new regulation,” said one of the traders. The CDC did not answer calls requesting comment. The traders said the new rule would prevent a common practice in which banks shift bonds back and forth between their own balance sheets and the WMP accounts they manage for clients, allowing them to deliver promised payouts to WMP investors, even if the underlying bonds have not yet matured or have declined in value. Such transactions have also enabled banks to temporarily shift WMP funds back onto bank balance sheets at quarter-end, as a way to window dress their financial statements by boosting the customer deposits they report. In other cases, a bank may use its own account to purchase a bond in the primary market before it has completed fundraising for a WMP, then sell the bonds on to the WMP account later. That allows the banks to deliver higher yields to their WMP investors, since yields are typically higher in the primary market. The China Banking Regulatory Commission (CBRC) announced a crackdown on fund pooling in January. Industry observers are concerned that the practice is akin to a Ponzi scheme because of the way such pools allow inflows from the sale of new products to deliver the promised returns on previously issued products. The complex and interlocking nature of such pools, supporting a wide variety of different WMPs with different maturity periods, also exposes banks to significant liquidity risk, analysts have warned. Standard & Poors estimated that WMPs offered by Chinese banks grew 56 percent in 2012 to 7.12 trillion yuan (US$1.16 trillion), equivalent to 7.6 percent of the system’s total deposits at the end of the year.

Hong Kong sees slight Q1 growth ong Kong’s economy grew a less-than-estimated 0.2 percent in the first three months of this year, the slowest pace in three quarters, as China’s expansion cooled. The increase from the previous three months compared with a revised 1.4 percent gain in the fourth quarter, the government said on Saturday. The median estimate of 13 economists in a Bloomberg News survey was for a 0.5 percent increase. Hong Kong’s government aims to sustain economic growth while controlling risks in a housing market where prices have more than doubled since the start of 2009. HSBC Holdings Plc and DBS Group Holdings Ltd reduced forecasts for the city’s gross domestic product this year after China’s expansion missed

Regulator tightens rules on wealth management

May 13, 2013

Greater China Cnooc to pay more for Indonesian gas China National Offshore Co. Ltd, China’s largest offshore oil and gas producer, will increase the price it pays for gas from BP’s Tannguh project in Indonesia, the head of Indonesia’s energy regulator said. The existing 25-year supply deal, under which Cnooc ships around 2.6 million tonnes of liquefied natural gas (LNG) annually from Indonesia’s West Papua province to China’s second LNG terminal in Fujian, was signed in September 2002. Under this agreement, the gas price was linked to oil prices and capped at US$25 per barrel, and came to US$2.40 per million British thermal units (mmbtu). This was increased in 2006 but remained capped at an oil price of US$38 per barrel and came to around US$3.35 per mmbtu. “The president of Cnooc told the Energy and Mineral Resources Minister directly that they were ready to increase the price,” upstream oil and gas regulator SKKMigas chief Rudi Rubiandini said in a press release, referring to a meeting between Indonesia’s energy minister Jero Wacik and Cnooc chairman Wang Yilin in Jakarta.

Regulator probes dumping of steel pipes

Alibaba Ma steps down before likely IPO Listing may be worth as much as US$100 billion

Jack Ma has announced his resignation

China has started an investigation into the dumping of seamless steel tubes and pipes in domestic markets by firms from the United States, Europe and Japan after receiving a complaint from a Chinese company. The products are mainly used in boilers and steam water pipes at power plants, according to a statement on the Ministry of Commerce website. It did not name any companies in the investigation on dumping, or the sale of goods in export markets at lower prices than in home markets. The investigation is the latest by China amid rising disputes with its trading partners as the global economy slows. It came right after the European Commission agreed to impose punitive import duties on Chinese solar panels, and the Chinese Commerce Ministry called for dialogue to solve the dispute. Chinese data showed that 21 nations launched 77 trade remedy investigations against China in 2012. In the first quarter of 2013, 12 nations launched 22 cases against China.

Beijing Auto launches Saab-based model Beijing Automotive Group Co., which makes vehicles with Daimler AG and Hyundai Motor Co., started selling its first sedan based on Saab technology yesterday as it prepares to list its BAIC Motor Corp. unit in Hong Kong. The Senova, with a 2-liter engine and a starting price of 139,800 yuan (US$22,762), is the company’s first car developed using the technology it bought from Saab Automobile in 2009, Han Yonggui, president of BAIC Motor, said in an interview. It is also the company’s first self-developed medium-tohigh-end model car, he said. Beijing Automotive, known as BAIC, has said it plans to make “world-class” cars by 2025 and hired Ferrari designer Leonardo Fiorvanati to improve its brand appeal. The company is seeking an initial public offering in Hong Kong as early as this year to help expand vehicle sales more than 70 percent by 2015 from a target of 2.1 million units this year, chairman Xu Heyi said in March. “Adding the Senova to our product line-up will boost investors’ confidence,” Mr Han said. “It will help our efforts” to sell shares in Hong Kong “in line with our schedule,” he said without giving a time frame. Reuters

illionaire Jack Ma, founder of Alibaba Group Holding Ltd, said he plans to focus on environmental protection and education as he steps down as chief executive of China’s largest e-commerce company before an initial public offering. Mr Ma won’t return as Alibaba’s CEO, he said yesterday during a company event in Hangzhou, China, as he ceded the role to successor Jonathan Lu. The company will continue supporting small and medium-sized enterprises in China, said Mr Ma, who will remain executive chairman and shape strategy. “I hope you can trust the new team and Lu just like you trusted me,” he said. “Ten years of being an entrepreneur has made me understand hardship, persistence and responsibility.” Mr Lu takes charge of a company whose sales equal 2 percent of China’s gross domestic product and is refocusing on mobile platforms to replicate its dominance with desktop computer users. Alibaba is rolling out a smartphone operating system,

buying a stake in China’s biggest Twitter-like service and getting US$8 billion in loans – steps considered a prelude to an IPO that may be worth as much as US$100 billion. However, a source familiar with the situation said an IPO was “at least a couple of years away” and insisted Mr Ma’s resignation as chief executive had little to do with listing plans, the Financial Times reported. Alibaba doesn’t sell merchandise itself. Instead, it runs platforms including Taobao Marketplace and Tmall.com that connect retail brands with consumers, a cross between Amazon.com Inc. and EBay Inc. It makes most of its sales from commissions and advertising. Goods sold on Alibaba – ranging from consumer staples to cement and aluminium – were worth US$180 billion last year, said Eric Qiu, analyst at Guosen Securities Co. in Hong Kong.

Profit doubled Mr Ma’s handover of the CEO coincides with the 10-year anniversary of Taobao, which

means “searching for treasure” in Chinese. The business is credited with generating an estimated 13 million jobs in China last year, according to a company-commissioned report. A former English teacher, Mr Ma and 17 others founded Alibaba as an online marketplace for Chinese companies in 1999. Alibaba’s profit more than doubled to US$642.2 million in the quarter ended December from US$236.9 million a year earlier, according to a Yahoo! Inc. filing. Revenue rose 80 percent to US$1.84 billion, according to the filing, which owns about 24 percent of Alibaba. Morgan Stanley estimates Alibaba’s net income could reach US$2.18 billion for the 12 months through December, more than double last year’s US$746.3 million, according to a March 6 research note. Mr Ma has an estimated net worth of US$3.5 billion, according to the Bloomberg Billionaires Index. He owns about 7.4 percent of Alibaba Group, according to a Hong Kong stock exchange filing in April 2012. Bloomberg News

ING to sublet floors in Hong Kong Dutch firm trying to keep costs low amid slow activity

NG Groep NV is seeking to sublet as much as two floors it currently leases in Hong Kong’s tallest building as the company reduces space following the sale of its insurance business in the city. The biggest Dutch financialservices firm is searching for tenants to take up as much as 70,000 square feet (6,500 square metres) at the International Commerce Centre, according to two people with knowledge of the plan, who asked not to be identified because they’re not authorised to discuss the matter publicly. Vacancies in some of Hong Kong’s prime-office buildings are rising as banks and brokerages trim staff to keep costs low amid slowing corporate-finance activities. Credit Suisse Group AG, which occupies

10 floors in the tower, also known as ICC, was looking to sublet as much as 64,000 square feet of space, people familiar with the matter said in January. Average rents at ICC have remained largely unchanged in the past year at about HK$68 (US$8.8) a square foot a month, according to broker Cushman & Wakefield Inc. Average rents in West Kowloon, where ICC is located, rose 6 percent in the first quarter from the previous three months, according to Cushman & Wakefield. Virginia Lau, a spokeswoman for ING Investment Management (Hong Kong) Ltd, declined to comment on the company’s leasing plan. Prime-office rents in the Central business area, the world’s secondmost expensive place to lease office

space, fell 14 percent in the 12 months ended March, according to the realtor. The vacancy rate in Central, where banks including Goldman Sachs Group Inc. and HSBC Holdings Plc have their regional headquarters, was 7.3 percent at the end of the first quarter, up 1 percentage point from a year earlier, according to Cushman. I NG i s s e e k i n g b u y e r s f o r insurance assets from Asia to the U.S. and cutting 7,500 jobs after receiving a 10 billion-euro (US$13 billion) government bailout in 2008. Last year it sold insurance units in Hong Kong, Macau and Thailand to Richard Li, a son of Li Ka Shing, Asia’s richest man, for 1.64 billion euros (US$2.13 billion). Bloomberg News

May 13, 2013

Asia Indonesia to extend ban on forest clearing G7 approves weaker Yen The Group of Seven finance chiefs signalled tolerance of the yen’s slide to its weakest since 2008, so long as it doesn’t get out of hand. G-7 finance ministers and central bankers reaffirmed their February commitment to “not target exchange rates” at a meeting in Aylesbury, near London, U.K. Chancellor of the Exchequer George Osborne told reporters on Saturday. “The G-7 is inclined to endorse Japanese monetary policy as long as policy makers are not overtly” pursuing a cheaper yen, said Izumi Devalier, an economist at HSBC Holdings Plc in Hong Kong. While indicating acceptance of the yen’s decline through 100 per dollar, policy makers said Japan’s recovery programme was a key focus of their talks and that they will monitor the currency’s performance. The yen has fallen 15 percent against the dollar this year and 13 percent versus the euro as the Bank of Japan stepped up monetary stimulus. “Everybody watches exchange rate developments,” German Finance Minister Wolfgang Schaeuble said. “We had a very intense discussion about Japan with our Japanese colleagues.” Canadian Finance Minister Jim Flaherty said that there were “expressions of concern” about exchange rates, although “all the countries in the G-7 consider themselves to be free- trading”. A U.S. official said there had been an in-depth discussion on Japan, a day after Treasury Secretary Jacob J. Lew told CNBC Television that he had “made it clear that we’ll keep an eye on” ensuring countries aren’t trying to devalue exchange rates.

Stocks advance on earnings Asian stocks advanced, with the regional benchmark ending the week near its highest since June 2008, as the yen’s slide past 100 against the dollar buoyed exporters in the busiest week of Japan’s earnings season. The MSCI Asia Pacific Index added 1.3 percent to 141.86. The gauge retreated the past two days from the highest since June 2008. It’s risen 9.7 percent this year as the Bank of Japan started unprecedented monetary easing and policy makers in the U.S. showed willingness to add stimulus. “The shift of money into equities is going to be an ongoing theme for a very long time,” said Peter Esho, Sydney-based investment adviser at Wilson HTM Investment Group, which manages US$11.8 billion. “Central bank money-printing is not changing any time soon. It makes equity markets look very attractive.” Japan’s Topix Index increased 5 percent last week, erasing losses from the 2008 collapse of Lehman Brothers Holdings Inc. and ending the week at its highest level since September 2008. The exporter-heavy Nikkei 225 Stock Average climbed 6.7 percent, the biggest weekly gain since December 2009. Australia’s S&P/ASX 200 Index gained 1.5 percent after the central bank cut its benchmark interest rate to a record low. South Korea’s Kospi Index dropped 1.1 percent even after the Bank of Korea cut interest rates. The Shanghai Composite Index advanced 1.9 percent as China’s exports unexpectedly accelerated. Hong Kong’s Hang Seng Index added 2.8 percent, gaining for a third week. Taiwan’s Taiex Index climbed 1.8 percent. Bloomberg News

The president of Indonesia, home to the world’s third-largest tropical forests and a powerful palm oil industry, has agreed to extend a ban on forest clearing, a government official said on Friday. The world’s biggest producer of palm oil imposed a two-year moratorium on clearing forest in May 2011 under a US$1 billion climate deal with Norway aimed at reducing emissions from deforestation, covering 65 million hectares of forests, but this is due to expire on May 20. “The president has agreed… It should be signed in one or two days. It may have been already,” an official said.

Sharif stages comeback in Pakistan election Voters deliver blow to ruling party after five years in power

oppled in a 1999 coup, jailed and exiled, Nawaz Sharif has made a triumphant election comeback and yesterday was heading for a third term as Pakistan’s prime minister. The polls were a landmark, marking the first time one elected government was to replace another in a country vulnerable to military takeovers. But Saturday’s vote failed to realise the hopes of many that dynastic politics would end after years of misrule and corruption in the strategic U.S. ally. Mr Sharif, 63, a wealthy steel magnate from the pivotal Punjab province, held off a challenge from former cricket star Imran Khan who had hoped to break decades of dominance by Mr Sharif’s Pakistan Muslim League (PML-N) and the Pakistan People’s Party (PPP), led by the Bhutto family. Mr Khan’s Tehrik-i-Insaf (PTI) put up a strong fight and he is likely to remain a force in politics. “Nawaz’s victory says two things about Pakistan: one, the people of Pakistan prefer the comfort of status quo over the uncertainty of revolutions; and two, all roads to the centre go through Punjab, and in Punjab, people are right-leaning and conservative,” said senior journalist Nusrat Javeed. “Still, for a party that only really arrived on the political scene in a serious way two years ago, PTI’s performance was remarkable, to say the least.” Mr Sharif declared victory in a jubilant speech to supporters. His party was winning 127 seats of 268 contested in the 342-member lower

Supporters of Nawaz Sharif have been celebrating on the streets

house of parliament, according to the tally by Pakistan Television. The PTI had secured 34 seats while the PPP, which led the government for the past five years, had won 32, mostly from its Sindh province bastion. Mr Sharif, a religious conservative, has said the army, which has ruled the country for more than half of its turbulent history, should stay out of politics. But he will have to work with Pakistan’s generals, who set foreign and security policy and manage the nuclear-armed country’s difficult relationship with the United States as NATO troops withdraw from neighbouring Afghanistan in 2014. Mr Sharif also believes Pakistan should reconsider its support for the U.S. war on Islamist militancy, which has earned the country billions of dollars in aid. Despite pre-poll violence and

Cyber thieves hack Indian card-processing companies T

wo companies with major operations in India were the weak links that opened the door to a US$45 million global cyber heist brought to light by U.S. authorities last week. EnStage Inc., which operates from Bangalore, and ElectraCard Services Private Ltd, which is based in Pune, processed card payments for the two Middle Eastern banks that were hit in the theft, according to several people familiar with the situation. U.S. prosecutors said that hackers broke into two card processing companies, raising the balances and withdrawal limits on accounts that were then exploited in coordinated

ATM withdrawals around the world. The prosecutors did not name the two companies but said one was based in India and the other in the United States. According to a U.S. official and a bank employee, who spoke on condition of anonymity, ElectraCard Services was the company that processed prepaid travel cards for National Bank of Ras Al Khaimah PSC (RAKBANK). RAKBANK suffered a US$5 million coordinated heist at ATMs around the world on December 21 last year, according to the U.S. indictment. Ramesh Mengawade, the chief executive of ElectraCard Services

attacks on Saturday that killed at least 17 people, millions turned out to vote. Mr Sharif’s party may not have enough seats to rule on its own and may be forced into a coalition, which could make it difficult to push reforms needed to revive the economy. Mr Sharif, who advocates free-market economics, is likely to pursue privatisation and deregulation to revive flagging growth. He has said Pakistan should stand on its own two feet but may need to seek another bailout from the International Monetary Fund to avoid a balance of payments crisis. But he will have to ease widespread discontent over endemic corruption, chronic power cuts and crumbling infrastructure. He has described Pakistan as a “mess”. Reuters

and its parent company, Opus Software Solutions Private Ltd, could not be reached. EnStage, which is incorporated in Cupertino, California, is the company that processed card payments for Bank of Muscat SAOG of Oman, according to a source close to Bank of Muscat. Bank of Muscat lost US$40 million in a coordinated heist on February 19, according to last week’s indictment. Officials at enStage could not be reached either in Bangalore or in Cupertino. In a statement in the Times of India, chief executive Govind Setlur said the company has implemented security enhancements and monitoring since the theft. “Our customers were adversely affected by this sophisticated crime,” Mr Setlur said in the statement. “We are deeply committed to information security, and we will continue to take all reasonable measures to ensure our networks are secured from criminal actors.” Reuters

May 13, 2013

Markets Hang Seng Index NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

0.9817672

20304342

CHINA UNICOM HON

11.46

0.3502627

18533160

ALUMINUM CORP-H

3.24

5.882353

58982000

CITIC PACIFIC

10.04

9450991

SANDS CHINA LTD

BANK OF CHINA-H

3.82

0.7915567

277812267

68.9

0.1453488

2183068

BANK OF COMMUN-H

6.26

0.4815409

26658224

CNOOC LTD

14.76

0.4081633

33799439

31.95

0.3139717

2542000

COSCO PAC LTD

10.42

0.1923077

7015588

SWIRE PACIFIC-A

13.2

4.100946

26642371

10.3

-1.151631

6959693

27.95

1.268116

8910114

HANG LUNG PROPER

-0.8264463

10903120

14.4

1.123596

2089101

HANG SENG BK

130.5

0.616808

1013395

AIA GROUP LTD

BANK EAST ASIA BELLE INTERNATIO BOC HONG KONG HO CATHAY PAC AIR CHEUNG KONG

NAME

CLP HLDGS LTD

ESPRIT HLDGS

118.8

0.4226543

3592674

CHINA COAL ENE-H

5.9

-0.3378378

38543660

CHINA CONST BA-H

6.64

1.065449

248173259

CHINA LIFE INS-H

22.2

0.4524887

29208173

-0.1996008

1482059

CHINA MOBILE

86.2

0.2908668

8781806

HUTCHISON WHAMPO

CHINA OVERSEAS

24.2

1.043841

11568106

IND & COMM BK-H

CHINA PETROLEU-H

8.69

0.4624277

61909427

LI & FUNG LTD

CHINA RES ENTERP

26.55

2.906977

5751902

23.9

-0.8298755

7820000

NEW WORLD DEV

13.96

-1.551481

19210269

CHINA RES POWER

22.85

-10.03937

44807157

PETROCHINA CO-H

10.26

0.1953125

62574833

CHINA SHENHUA-H

28.05

1.630435

19486766

PING AN INSURA-H

63.6

0.394633

6935694

PRICE

DAY %

VOLUME

28.95

0.5208333

9415732

8.69

0.4624277

61909427

CHINA MERCHANT

CHINA RES LAND

HENDERSON LAND D

57.6

0.5235602

2988195

0.5322295

2131065

HONG KG CHINA GS

23.55

1.508621

5580229

HONG KONG EXCHNG

132.4

1.300689

4308988

HSBC HLDGS PLC

88.05

0.113701

19165370

85.95

0.8802817

4104973

5.64

0.8944544

229318676

10.12

-0.1972387

15851327

32.5

1.088647

2469643

HENGAN INTL

MTR CORP

NAME

PRICE

DAY %

VOLUME

77.55

0.4533679

1963738

41.7

0.8464329

5668456

SINO LAND CO

12.74

-1.545595

7423544

SUN HUNG KAI PRO

111.5

0.2697842

2623190

101

1.101101

1682583

TENCENT HOLDINGS

276.8

1.09569

1713456

TINGYI HLDG CO

19.94

-0.2002002

4387447

WANT WANT CHINA

11.58

-2.525253

32711795

WHARF HLDG

73.55

-0.2035278

3833949

POWER ASSETS HOL

MOVERS

1 23353

INDEX 23321.22 HIGH

23353.68

LOW

23137.18

52W (H) 23944.74 (L) 18056.4

23137

8-May

10-May

Hang Seng China Enterprise Index NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.87

1.044386

128971338

AIR CHINA LTD-H

6.88

1.176471

8643961

ALUMINUM CORP-H

3.24

5.882353

58982000

CHINA RAIL CN-H

8.3

0.2415459

ANHUI CONCH-H

28.35

-0.5263158

10602653

CHINA RAIL GR-H

4.28

BANK OF CHINA-H

3.82

0.7915567

277812267

CHINA SHENHUA-H

28.05

NAME CHINA PACIFIC-H CHINA PETROLEU-H

PRICE

DAY %

VOLUME

YANZHOU COAL-H

8.22

-0.1215067

13496992

ZIJIN MINING-H

2.33

-1.271186

31897825

3292656

ZOOMLION HEAVY-H

8.46

1.805054

12372130

0.9433962

9940341

ZTE CORP-H

14.04

2735795

1.630435

19486766

6.26

0.4815409

26658224

CHINA TELECOM-H

4.12

51254100

31.55

1.121795

5659185

DONGFENG MOTOR-H

12.9

2.707006

22494718

4.57

0.660793

26032455

GUANGZHOU AUTO-H

7.39

7.569141

25159586

CHINA COAL ENE-H

5.9

-0.3378378

38543660

HUANENG POWER-H

9.59

0.6295908

13834000

CHINA COM CONS-H

7.89

0.2541296

14890660

IND & COMM BK-H

5.64

0.8944544

229318676

CHINA CONST BA-H

6.64

1.065449

248173259

JIANGXI COPPER-H

16.42

-0.6053269

11491662

CHINA COSCO HO-H

3.55

1.719198

7854225

PETROCHINA CO-H

10.26

0.1953125

62574833

CHINA LIFE INS-H

22.2

0.4524887

29208173

PICC PROPERTY &

10.3

0.1945525

7125842

CHINA LONGYUAN-H

7.59

1.335113

25210000

PING AN INSURA-H

63.6

0.394633

6935694

CHINA MERCH BK-H

16.9

0.1184834

15444756

SHANDONG WEIG-H

7.62

0.5277045

2824000

CHINA MINSHENG-H

10.64

31000231

SINOPHARM-H

24.05

2.123142

10288600

CHINA NATL BDG-H

9.41

-0.9473684

36868321

TSINGTAO BREW-H

52.75

0.6679389

1469300

CHINA OILFIELD-H

16.7

0.6024096

4394515

WEICHAI POWER-H

BANK OF COMMUN-H BYD CO LTD-H CHINA CITIC BK-H

30.3

1.168614

NAME

MOVERS

2 11354

INDEX 11347.41 HIGH

11354.15

LOW

11160.6

52W (H) 12354.22 11160

(L) 8987.76 8-May

1243845

10-May

Shanghai Shenzhen CSI 300 NAME

NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

6.67

0.1501502

21093858

QINGDAO HAIER-A

13.17

1.46379

11785018

CITIC SECURITI-A

12.64

53033755

QINGHAI SALT-A

22.82

1.062888

7017005

CSR CORP LTD -A

4.1

0.2444988

32335956

SAIC MOTOR-A

15.91

0.5689001

35338763

DAQIN RAILWAY -A

7.21

0.4178273

32717185

SANY HEAVY INDUS

9.55

0.4206099

21693854

DATANG INTL PO-A

4.77

4.376368

37775448

SHANDONG GOLD-MI

32.13

4503942

13.79

-0.7913669

19734363

SHANG PHARM -A

12.33

-0.08103728

6664346 63127003

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.74

102102390

AIR CHINA LTD-A

5.47

0.7366483

8340890

ALUMINUM CORP-A

4.09

1.741294

12923913

ANHUI CONCH-A

17.59

0.1138304

23657204

BANK OF BEIJIN-A

8.97

0.8998875

17706429

BANK OF CHINA-A

2.91

0.3448276

23884481

EVERBRIG SEC -A

CHONGQING WATE-A

NAME

4.74

0.2114165

41714344

GD MIDEA HOLDI-A

14.7

2.083333

10233637

SHANG PUDONG-A

10.03

0.6018054

BANK OF NINGBO-A

10.41

0.7744434

9192473

GD POWER DEVEL-A

2.9

39802914

SHANGHAI ELECT-A

3.88

1.570681

7030147

BAOSHAN IRON & S

4.96

0.2020202

23987818

GEMDALE CORP-A

7.42

2.627939

34699316

SHANXI LU'AN -A

15.96

1.076631

16755047

BEIJING TONGRE-A

24.21

-2.300242

9259539

GF SECURITIES-A

13.53

0.5947955

18402399

SHANXI XISHAN-A

10.56

1.052632

12165701

GREE ELECTRIC

26.95

0.4847129

8625617

SHENZEN OVERSE-A

5.9

1.027397

24108992

65.7

-1.262399

1391462

6.1

-0.974026

52943206 2292260

BANK OF COMMUN-A

BYD CO LTD -A

33.98

4.105392

32883024

CHINA AVIC AVI-A

22.41

1.771117

3521325

GUANGHUI ENERG-A

19.57

2.193211

22786704

SICHUAN KELUN-A

CHINA CITIC BK-A

4.4

0.9174312

18768020

HAITONG SECURI-A

10.9

-0.2744739

68872745

SUNING COMMERC-A

4.23

0.2369668

22143018

HANGZHOU HIKVI-A

35.42

0.8829393

5908816

TASLY PHARMAC-A

78.83

-1.104002

HENAN SHUAN-A

40.46

-2.506024

4186569

TSINGTAO BREW-A

37.26

0.2691066

790822

22.18

-2.804557

24280125

WEICHAI POWER-A

22.87

0.3070175

5748169

CHINA CNR CORP-A CHINA COAL ENE-A

6.8

1.040119

6711721

CHINA CONST BA-A

4.85

19933958

HONG YUAN SEC-A

CHINA COSCO HO-A

3.37

5688395

HUATAI SECURIT-A

9.8

0.3070624

19516795

WULIANGYE YIBIN

23.15

0.04321521

22105941

CHINA EAST AIR-A

3.06

0.3278689

6853694

HUAXIA BANK CO

10.61

0.7597341

18108813

YANTAI WANHUA-A

18.52

1.535088

9140205

CHINA EVERBRIG-A

3.14

0.9646302

69060724

IND & COMM BK-A

4.11

0.4889976

43099078

YANZHOU COAL-A

14.4

1.123596

3757866

CHINA LIFE INS-A

16.9

0.2967359

9898079

INDUSTRIAL BAN-A

18.26

0.219539

59999418

YUNNAN BAIYAO-A

89.4

-0.6666667

1087392

CHINA MERCH BK-A

12.75

3.406326

97604084

INDUSTRIAL-A

11.55

-0.7731959

18091778

ZHONGJIN GOLD

12.35

-0.1616815

9738009

CHINA MERCHANT-A

12.65

1.119105

26280434

INNER MONG BAO-A

28.44

-0.7329843

20132566

ZIJIN MINING-A

3.12

0.3215434

30246214

CHINA MERCHANT-A

27.07

0.2964061

7844859

INNER MONG YIL-A

7.42

0.2702703

23921276

12.97

-2.334337

26224302

CHINA MINSHENG-A

10.36

0.09661836

101803598

INNER MONGOLIA-A

CHINA NATIONAL-A

10.14

0.9960159

43124777

JIANGSU HENGRU-A

CHINA OILFIELD-A

15.84

0.3166561

2687316

CHINA PACIFIC-A

19.34

1.044932

12541459

6.68

-0.4470939

CHINA PETROLEU-A

28.96

-0.03451847

6898920

4.8

23726454

31.97

0.09392611

2636608

JIANGSU YANGHE-A

60.79

0.3963666

4702170

JIANGXI COPPER-A

21.15

0.1420455

6038800

60444661

JINDUICHENG -A

10.59

6019328

17.4

16767579

197.11

-0.03550056

4877659

CHINA RAILWAY-A

5.36

-0.1862197

11248704

KANGMEI PHARMA-A

CHINA RAILWAY-A

2.9

-0.3436426

18438369

KWEICHOW MOUTA-A

CHINA SHENHUA-A

20.9

1.752678

9810513

LUZHOU LAOJIAO-A

26.16

1.081917

8186080

CHINA SHIPBUIL-A

4.35

1.162791

26295918

METALLURGICAL-A

2.06

0.4878049

17410232

CHINA SOUTHERN-A

3.47

0.872093

10608981

NARI TECHNOLOG-A

20.06

0.7028112

16007333

2.46

0.4081633

7378566

0.2344666

12217965

CHINA STATE -A

3.75

2.739726

80649337

NINGBO PORT CO-A

CHINA UNITED-A

3.66

0.5494505

53546220

PETROCHINA CO-A

8.55

CHINA VANKE CO-A

11.75

1.3805

40236098

PING AN BANK-A

20.19

0.2980626

38624829

CHINA YANGTZE-A

7.42

0.2702703

11947708

PING AN INSURA-A

41.1

-0.02432498

19522736

0.2712477

25161838

POLY REAL ESTA-A

12.11

1.085142

39765672

PRICE DAY %

Volume

NAME

PRICE DAY %

Volume

CHONGQING CHAN-A

11.09

ZOOMLION HEAVY-A ZTE CORP-A

MOVERS

202

18 2553

INDEX 2540.836 HIGH

2553.94

LOW

2508.05

52W (H) 2791.303 (L) 2102.135

2508

8-May

10-May

FTSE Taiwan 50 Index NAME ACER INC

24.1

-1.632653

12519114

FORMOSA PLASTIC

ADVANCED SEMICON

25.9

10746325

ASIA CEMENT CORP

37.5 -0.2659574

ASUSTEK COMPUTER AU OPTRONICS COR

346 -0.8595989 13.25

Volume

5845584

TAIWAN MOBILE CO

110

FOXCONN TECHNOLO

80.8

-1.463415

4845961

TPK HOLDING CO L

586 -0.6779661

1922084

4589899

FUBON FINANCIAL

41.4

0.9756098

17771283

TSMC

114.5 -0.4347826

27536736

2607819

UNI-PRESIDENT

60.1 -0.4966887

UNITED MICROELEC

12.6

1412958

HON HAI PRECISIO

80.5

-1.348039

71981555

-1.486989

99487326

HOTAI MOTOR CO

287

3.610108

374186

279

-1.760563

9061477

WISTRON CORP

29.2

-1.184433

9745348

17.35

3673001

YUANTA FINANCIAL

15.7

0.9646302

24267230

862516

YULON MOTOR CO

2158892

160

1.910828

22729415

HTC CORP

CATHAY FINANCIAL

40.1

0.8805031

20876578

HUA NAN FINANCIA

CHANG HWA BANK

17.2

0.5847953

4003204

LARGAN PRECISION

845 -0.5882353

CHENG SHIN RUBBE

99.8

0.2008032

5916008

LITE-ON TECHNOLO

51.3

-2.099237

CHIMEI INNOLUX C

18.6

-2.105263

107504097

MEDIATEK INC

369

-1.6

7354717

CHINA DEVELOPMEN

8.41

0.238379

28374294

MEGA FINANCIAL H

23.4 -0.6369427

14786237

CHINA STEEL CORP

25.95

10040690

NAN YA PLASTICS

62.1

-1.740506

6822094

CHINATRUST FINAN

18.2

0.2754821

28598708

PRESIDENT CHAIN

194

2.645503

789457

CHUNGHWA TELECOM

PRICE DAY %

0.6802721

CATCHER TECH

8353626

QUANTA COMPUTER

63.1

0.96

8849809

-1.570681

33866155

SILICONWARE PREC

-1.408451

12102817

DELTA ELECT INC

145

-1.360544

4311094

SINOPAC FINANCIA

15.1

8094500

FAR EASTERN NEW

32.7

1.395349

10026156

SYNNEX TECH INTL

50.5 -0.3944773

6505572

FAR EASTONE TELE

73.7 -0.9408602

4522957

TAIWAN CEMENT

39.2

0.1277139

3247960

17.05 -0.2923977

6958497

FIRST FINANCIAL

18.3

0.5494505

5703936

TAIWAN COOPERATI

FORMOSA CHEM & F

73.7

0.2721088

4487660

TAIWAN FERTILIZE

FORMOSA PETROCHE

82.9

1.097561

2719599

TAIWAN GLASS IND

5.882353

4190195 232058433

4258991

18.8

COMPAL ELECTRON

NAME

74.1

1.229508

8574914

0.1669449

1146376

MOVERS

7 5845

INDEX 5807.11 HIGH

5845.93

LOW

5767.08

52W (H) 5854.36 5767

(L) 4719.96 8-May

10-May

May 13, 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 65.50

38.30

65.22

38.15

Max 41.75

Average 41.614

Min 37.7

Last 38

Min 41.5

Last 41.7

37.70

Max 65.5

Average 65.131

PRICE

Max 19.38

Average 19.27

Min 19

41.68

21.10

24.8375

41.62

20.95

24.7250

41.56

20.80

24.6125

41.50

Max 21.25

Average 20.925

DAY %

YTD %

(H) 52W

Min 20.65

Last 21.25

(L) 52W

2.727564445

101.4199982

BRENT CRUDE FUTR Jun13

103.91

-0.536039054

-3.733555679

116.6699982

90.91999817

GASOLINE RBOB FUT Jun13

286.03

-0.859588922

-0.066382503

324.119997

235.9499931

GAS OIL FUT (ICE) Jun13

851.75

-2.15393452

-6.606359649

992.75

799.25

NATURAL GAS FUTR Jun13

81.34999847

3.91

-1.832789355

11.45952109

4.457000256

3.203999996

290.62

-1.035210788

-3.371458971

323.8899946

258.589983

Gold Spot $/Oz

1448.55

-1.5536

-12.9718

1796.08

1322.06

Silver Spot $/Oz

23.8825

-0.9769

-20.6825

35.365

22.0713

Platinum Spot $/Oz

1493.25

-1.0844

-1.6142

1742.8

1374.55

707

0.8401

1.0491

786.5

553.75

LME ALUMINUM 3MO ($)

1870

-1.058201058

-9.792571153

2200.199951

1809

LME COPPER 3MO ($)

7375

0.28555888

-7.010465263

8422

6762.25

HEATING OIL FUTR Jun13

Palladium Spot $/Oz

3MO ($)

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

WHEAT FUTURE(CBT) Jul13

1859

-0.694444444

-10.625

2230

1745

15360

0.490677134

-9.964830012

18920

14609

15.25

-0.586701434

-3.143855192

17.07500076

14.79500103

636.25

-1.926782274

-8.748655432

824

527

704.25

-2.660677263

-11.27559055

900

664.75

1399

-0.692102928

0.268769038

1605.75

1217.75

144.45

-2.332657201

-3.410230692

202.1999969

132.6999969

SOYBEAN FUTURE Jul13 COFFEE 'C' FUTURE Jul13 SUGAR #11 (WORLD) Jul13

20.65

17.43

-0.228963938

-11.70212766

23.05999947

17.18000031

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

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

Max 24.95

Average 24.791

Min 24.5

Last 24.95

24.5000

NAME

(H) 52W

(L) 52W

30.79365

4.22

2.29

1732589

12.99

-0.9153318

21.7432

13.24

8.06

657686

AMAX HOLDINGS LT

0.82

-1.204819

-41.42857

1.72

0.75

25825

BOC HONG KONG HO

27.95

1.268116

15.9751

20.85

8910114 200000

-1.639344

13.20755

0.42

0.215

0.1669449

0.1669487

6.74

2.8

CHINA OVERSEAS

24.2

1.043841

4.761903

25.6

14.624

11568106

CHINESE ESTATES

13.78

-0.433526

13.60809

13.92

7.697

427500

CHOW TAI FOOK JE

10.4

-0.7633588

-16.39871

13.4

8.4

2123200

EMPEROR ENTERTAI

2.38

0.8474576

25.92593

2.49

1.1

490000

FUTURE BRIGHT

2.38

-1.244813

96.36541

2.732

0.765

2801321

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

0.2378234

15.37187

15144.83

12035.08984

NASDAQ COMPOSITE INDEX

3436.584

0.8040662

13.8125

3436.604

2726.68

FTSE 100 INDEX

6624.98

0.4890228

12.32949

6637.839844

5229.76

HANG SENG BK

DAX INDEX

8278.59

0.1941289

8.751518

8358.230469

5914.43

2.931759

40.52225

14636.81

8238.96

23321.22

0.4727833

2.932

23944.74

18056.4

CSI 300 INDEX

2540.836

0.5159439

0.7088535

2791.303

2102.135

VOLUME CRNCY

0.3

15118.49

14607.54

0.9582 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1307 51.3863 28.56 1.2152 28.913 40.54 9228 74.482 1.20054 0.77553 7.7018 9.6245 94.12 1.029

YTD %

(L) 52W

1.0625 1.6381 0.9972 1.3711 101.98 8.0111 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 105.433 1.25692 0.88151 8.4957 10.9254 132.26 1.032

DAY %

COUNTRY

(H) 52W

-3.4014 -5.0569 -4.3269 -1.5239 -15.2726 -0.1226 -0.1327 1.4475 0.3558 2.6864 -1.3648 -2.0479 -0.2797 0.5751 -12.3119 -2.8709 -3.577 2.729 1.3337 -13.9621 -0.0097

-0.9615385

DOW JONES INDUS. AVG

HANG SENG INDEX

YTD %

-1.9847 -1.3236 -2.3098 -1.2318 -2.8636 0.0013 -0.0103 -0.1758 -1.0128 -1.3096 -0.8076 -0.7355 -0.7174 -0.1951 -0.8913 -1.1173 -0.0851 0.9363 1.1827 -1.6515 0

4.12

CHEUK NANG HLDGS

NIKKEI 225

DAY %

1.0025 1.5358 0.9568 1.2989 101.62 7.993 7.7609 6.1417 54.8 29.78 1.2383 29.64 41.12 9737 101.869 1.24317 0.84567 7.9992 10.3918 132 1.03

PRICE

ARISTOCRAT LEISU

CENTURY LEGEND

World Stock Markets - Indices

PRICE

Macau Related Stocks

CROWN LTD

GALAXY ENTERTAIN

25.20593

38.45

16.94

12011168

130.5

0.616808

9.941031

131.5

99.2

1013395

HOPEWELL HLDGS

31.1

0.4846527

-6.466165

35.3

19.049

539700

HSBC HLDGS PLC

88.05

0.113701

8.302579

88.45

59.8

19165370 3282000

HUTCHISON TELE H

4.23

-2.309469

18.82023

4.45

2.98

LUK FOOK HLDGS I

21.85

0.2293578

-10.45082

30.05

14.7

966000

MELCO INTL DEVEL

17.42

4.436451

93.34073

18.18

5.12

13806364

TAIWAN TAIEX INDEX

8280.26

-0.06794683

7.542825

8322.69

6857.35

MGM CHINA HOLDIN

19.36

2.433862

45.80202

19.5

9.509

5213200

KOSPI INDEX

1944.75

-1.753012

-2.618865

2042.48

1758.99

MIDLAND HOLDINGS

3.53

1.146132

-4.594596

3.249

1666000

S&P/ASX 200 INDEX

5206.091

0.1483154

11.98422

5242.5

3985

NEPTUNE GROUP

0.152

-1.935484

0.226

0.084

6420000

NEW WORLD DEV

13.96

-1.551481

16.13976

15.12

7.95

19210269 5668456

JAKARTA COMPOSITE INDEX

19.000

Last 19.36

24.9500

-0.363108206

NAME

64.10

21.25

96.04

CORN FUTURE

Last 65.5

41.75

WTI CRUDE FUTURE Jun13

LME ZINC

Min 64.1

Currency Exchange Rates

NAME

METALS

19.095

64.38

Commodities ENERGY

19.190

64.66

37.85

Average 37.933

19.285

64.94

38.00

Max 38.3

19.380

5105.937

0.3262116

18.2837

5115.643

3635.283

FTSE Bursa Malaysia KLCI

1772.38

0.3572905

4.939759

1826.22

1526.6

SANDS CHINA LTD

41.7

0.8464329

22.82769

43.7

20.65

SHUN HO RESOURCE

1.52

8.57143

1.67

1.03

NZX ALL INDEX

992.889

0.3508123

12.56568

993.387

755.149

SHUN TAK HOLDING

4.18

-0.2386635

-0.2386648

4.65

2.56

3311285

PHILIPPINES ALL SHARE IX

4517.42

0.7945451

22.1261

4525.92

3238.77

SJM HOLDINGS LTD

21.25

3.658537

18.05556

22.15

12.34

10039599

13.8

-2.404526

-1.988636

17.38

12.5

4125147

WYNN MACAU LTD

24.95

1.629328

19.09307

24.95

14.62

5786900

ASIA ENTERTAINME

4.21

-2.771363

37.5817

5.28

2.4

77991

BALLY TECHNOLOGI

52.68

-0.5287009

17.82599

54.92

41.74

503941

BOC HONG KONG HO

3.56

-0.5586592

15.96091

3.6

2.7

8359

GALAXY ENTERTAIN

4.9

-0.4065041

23.42569

4.95

2.25

1100

INTL GAME TECH

18.14

3.420753

28.01694

18.18

10.92

5407856

JONES LANG LASAL

97.62

-0.5703809

16.29735

101.46

61.39

264217

LAS VEGAS SANDS

58.22

2.122435

26.12652

58.23

32.6127

4258163

MELCO CROWN-ADR

24.82

0.4045307

47.38717

25.15

9.13

2334635

MGM CHINA HOLDIN

2.5

35.13513

2.5

1.36

2019

MGM RESORTS INTE

15.61

3.104359

34.10653

15.8

8.83

21009616

SHFL ENTERTAINME

16.34

4.342273

12.68966

17.2199

11.75

225555

SJM HOLDINGS LTD

2.75

2.996255

19.04762

2.85

1.65

1825

WYNN RESORTS LTD

139.1

-0.3224651

23.65544

140.429

84.4902

844644

HSBC Dragon 300 Index Singapor

672.49

0.57

8.28

STOCK EXCH OF THAI INDEX

1622.48

0.08389262

16.56333

1626.99

1099.15

HO CHI MINH STOCK INDEX

486.1

-0.02468019

17.49208

518.46

372.39

Laos Composite Index

1367.3

0.7501179

12.55629

1455.82

980.83

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

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May 13, 2013

Opinion

The problem with poor countries’ GDP

and another source will show it shrinking over the same time period.

Getting it right

Bill Gates

Co-Chair of the Bill & Melinda Gates Foundation

ven in good financial times, development aid budgets are hardly overflowing. Government leaders and donors must make hard decisions about where to focus their limited resources. How do you decide which countries should get low-cost loans or cheaper vaccines, and which can afford to fund their own development programmes? The answer depends, in part, on how we measure growth and improvements in people’s lives. Traditionally, one of the guiding factors has been per capita GDP – the value of goods and services produced by a country in a year divided by the country’s population. Yet GDP may be an inaccurate indicator in the poorest countries, which is a concern not only for policymakers or people like me who read lots of World Bank reports, but also for anyone who wants to use statistics to make the case for helping the world’s poorest people. I have long believed that GDP understates growth even in rich countries, where its measurement is quite sophisticated, because it is very difficult to compare the value of baskets of goods across different time periods. In the United States, for example, a set of encyclopaedias in 1960 was expensive but held great value

for families with studious kids. (I can speak from experience, having spent many hours poring over the multi-volume World Book Encyclopaedia that my parents bought for my sisters and me.) Now, thanks to the Internet, kids have access to far more information for free. How do you factor that into GDP? The challenges of calculating GDP are particularly acute in Sub-Saharan Africa, owing to weak national statistics offices and historical biases that muddy crucial measurements. Bothered by what he regarded as problems in Zambia’s national statistics, Morten Jerven, an assistant professor at Simon Fraser University, spent four years examining how African countries obtain their data and the challenges they face in turning them into GDP estimates. His new book, ‘Poor Numbers: How We Are Misled by African Development Statistics and What to Do about It’, makes a strong case that a lot of GDP measurements that we thought were accurate are far from it.

Poor data Jerven notes that many African countries have trouble measuring the size of their relatively large subsistence economies and unrecorded

economic activity. How do you account for the production of a farmer who grows and eats his own food? If subsistence farming is systematically underestimated, some of what looks like growth as an economy moves out of subsistence may merely reflect a shift to something that is easier to capture statistically.

Donor governments and international organisations such as the World Bank need to do more to help African authorities produce a clearer picture of their economies

There are other problems with poor countries’ GDP data. For example, many countries in Sub-Saharan Africa do not update their reporting often enough, so their GDP

numbers may miss large and fast-growing economic sectors, like cell phones. When Ghana updated its reporting a few years ago, its GDP jumped by 60 percent. But many people didn’t understand that this was just a statistical anomaly, not an actual change in Ghanaians’ standard of living. In addition, there are several ways to calculate GDP, and they can produce wildly different results. Jerven mentions three: the World Development Indicators, published by the World Bank (by far the most commonly used dataset); the Penn World Table, released by the University of Pennsylvania; and the Maddison Project at the University of Groningen, which is based on work by the late economist Angus Maddison. These sources rely on the same basic data, but they modify it in different ways to account for inflation and other factors. As a result, their rankings of different countries’ economies can vary widely. Liberia is Sub-Saharan Africa’s second-poorest, seventh-poorest, or 22ndpoorest country in terms of GDP, depending on which authority you consult. It is not only the relative rankings that differ. Sometimes, one source will show a country growing by several percentage points,

Jerven cites these discrepancies to argue that we cannot be certain whether one poor country’s GDP is higher than another’s, and that we should not use GDP alone to make judgments about which economic policies lead to growth. Does that mean that we really don’t know anything about what works (and what doesn’t) in development? Not at all. Researchers have long used techniques like periodic household surveys to collect data. For example, the Demographic and Health Survey is conducted regularly to determine things like childhood and maternal death rates. Moreover, economists are using new techniques like satellite mapping of light sources to inform their estimates of economic growth. Although such methods are not perfect, they also are not susceptible to the same problems as GDP. Other ways to measure overall living standards in a country are similarly imperfect; but they nonetheless provide additional ways to understand poverty. One, called the Human Development Index, uses health and education statistics in addition to GDP. Another, the Multidimensional Poverty Index, uses ten indicators, including nutrition, sanitation, and access to cooking fuel and water. And, by using purchasing power parity, which measures the cost of the same basket of goods and services in different countries, economists can adjust GDP to gain better insight into living standards. Yet it is clear to me that we need to devote greater resources to getting basic GDP numbers right. As Jerven argues, national statistics offices across Africa need more support so that they can obtain and report timelier and more accurate data. Donor governments and international organisations such as the World Bank need to do more to help African authorities produce a clearer picture of their economies. And African policymakers need to be more consistent about demanding better statistics and using them to inform decisions. I’m a big advocate for investing in health and development around the world. The better tools we have for measuring progress, the more we can ensure that those investments reach the people who need them the most. © Project Syndicate

editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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May 13, 2013

Opinion Business

wires

Leading reports from Asia’s best business newspapers

Europe’s irrelevant austerity debate

Asahi Shimbun Japan convinced its partners in the Group of Seven leading industrial economies that it was not manipulating its currency as part of a bold attempt to get its economy out of a near twodecade period of stagnation. British Treasury chief George Osborne said there was a formal acknowledgement that each member needed to secure their own countries’ growth by balancing austerity measures with growth-enhancing policies. They also agreed on the importance of finding measures to deal with failing banks and working collectively to stop companies and individuals from dodging taxes.

China Daily Excessive rain and snow in Northeast China – the country’s main grain-growing area – has delayed spring ploughing by about 10 days, with some doubting that the country will achieve yet another increase in its grain harvest this year. By last week, 4.4 million hectares of farmland had been ploughed, accounting for only 40 percent of the planned acreage. Reduced grain production might drive up China’s food prices and increase the inflation rate in the second half of the year, analysts said.

Korea Herald The number of small and medium enterprises (SMEs) in South Korea increased by more than 10 percent over the past years, but their contribution to the nation’s exports dived, data showed yesterday. According to the data from the Korea Federation of Small and Medium Business, 296,000 SMEs were operating in the country as of 2011, up by 10.1 percent from 2006. Despite the growth, indicators of qualitative growth, such as the share of exports and productivity, have deteriorated, they found. SMEs’ contribution to the nation’s exports plunged from 31.9 percent in 2006 to 18.7 percent in 2011.

Jakarta Globe People buying and selling rupiah will soon have a clearer idea of what the Indonesian currency is worth when the central bank launches a new pricing tool later this month, in a bid to stem further depreciation against the dollar. The fixing spot rate will help the central bank better influence the rate of the currency, one of Asia’s weakest in the past year. “While the exchangetransaction efficiency will be improved, the market can actually know at what rate the [rupiah] actually traded here,” Bank Indonesia Deputy Governor Perry Warjiyo was quoted as saying.

Daniel Gros

Director of the Centre for European Policy Studies

he most visible symptom of the crisis in the euro zone has been the high and variable risk premiums that its peripheral countries now must pay on their public debt. Moreover, an influential paper by the American economists Carmen Reinhart and Kenneth Rogoff suggests that economic growth falls sharply when a country’s public debt rises above 90 percent of GDP. So the policy prescription for solving the crisis seems simple: austerity. Fiscal deficits must be cut to reduce debt levels. But the debate about austerity and the cost of high public-debt levels misses a key point: Public debt owed to foreigners is different from debt owed to residents. Foreigners cannot vote for the higher taxes or lower expenditure needed to service the debt. Plus, in the case of domestic debt, a higher interest rate or risk premium merely leads to more redistribution within the country (from taxpayers to bondholders). By contrast, in the case of debt owed to foreigners, higher interest rates lead to a welfare loss for the country as a whole, because the government must transfer resources abroad, which usually requires a combination of exchange-rate depreciation and a reduction in domestic expenditure. This distinction between foreign and domestic debt is particularly important in the context of the euro crisis, because euro zone countries cannot devalue to increase exports if this is required to service foreign debt. And the evidence confirms that the euro crisis is not really about sovereign debt, but about foreign debt. Indeed, only those countries that were running large current-account deficits before the crisis were affected by it. The case of Belgium is particularly instructive, because the risk premium on Belgian sovereign debt has remained modest throughout most of the euro crisis, although the country’s debt/GDP ratio is above the euro zone average, at around 100 percent, and it went without a government for more than a year. An even starker example of the crucial difference between foreign and domestic debt is provided by Japan, which has by far the highest debt/GDP ratio among OECD countries. So far, the country has not experienced a debt crisis, and interest rates remain exceptionally low, at around 1 percent. The reason is obvious: Japan has run sizeable current-

account surpluses for decades, giving it more than sufficient domestic savings to absorb all of its public debt at home. What does this imply for Europe’s austerity debate? If foreign debt matters more than public debt, the key variable requiring adjustment is the external deficit, not the fiscal deficit. A country that has a balanced current account does not need any additional foreign capital. That is why risk premiums are continuing to fall in the euro zone, despite high political uncertainty in Italy and continuing large fiscal deficits elsewhere. The peripheral countries’ external deficits are falling rapidly, thus diminishing the need for foreign financing.

Misleading debate The debate about austerity and the high cost of public debt is thus misleading on two accounts. First, it has often been pointed out that austerity can be self-defeating, because a reduction in the fiscal deficit can lead in the short run to

A country that has a balanced current account does not need any additional foreign capital

an increase in the debt/GDP ratio if both the debt level and the multiplier are large. But austerity can never be self-defeating for the external adjustment. On the contrary, the larger the fall in domestic demand in response to a cut in government expenditure, the more imports will fall and the stronger the improvement in the current account – and thus ultimately the reduction in the risk premium – will be. Italy’s experience is enlightening: the large tax increases implemented by former Prime Minister Mario Monti’s technocratic government in 2012 had a higher-than-expected impact on demand. The economy is contracting so much that the debt/GDP ratio is actually increasing, and the actual deficit is improving only marginally, because government revenues are falling along with GDP. But a side effect of the fall in GDP is a strong decline in imports – and thus a strong improvement in the current account, which is why the risk premium continues to fall, despite the political turmoil unleashed by the country’s inconclusive recent election.

Second, if foreign debt is the real problem, the escalating debate about the Reinhart/Rogoff results is irrelevant for the euro crisis. Countries that have their own currency, like the United Kingdom – and especially the United States, which can borrow from foreigners in dollars – do not face a direct financing constraint. For these countries, it matters whether history suggests that there is a strong threshold effect once public debt exceeds 90 percent of GDP. But the euro zone’s peripheral countries simply did not have a choice: they had to reduce their deficits, because the foreign capital on which their economies were so dependent was no longer available. But the reverse is also true: as soon as the current account swings to surplus, the pressure from financial markets abates. This is likely to happen soon. At this point, peripheral countries will regain their fiscal sovereignty – and will be able to ignore Reinhart and Rogoff’s warning at their own risk. © Project Syndicate

May 13, 2013

Closing Slovenia unveils rescue measures

ECB still considering ABS: Draghi

The government of Slovenia has announced a package of measures it hopes will help avoid an EU bailout. The measures include a tax increase, a major restructuring of Slovenia’s ailing banking sector, and a programme of mass privatisation. The European Commission will now consider the plan. It is expected to deliver its verdict by the end of the month. The measures include a 2 percent increase in VAT. A “bad bank” will also be created to allow the banking sector to offload its bad debts. A total of 15 publicly-owned businesses will also be sold off.

European Central Bank President Mario Draghi said the ECB is considering buying asset-backed securities among possible options to support lending to small and medium-sized companies. “We looked at a variety of things, one of which was this ABS,” Mr Draghi told reporters after a Group of Seven meeting of finance chiefs. “We’re still looking at that, it’s one of the many options. We don’t have a position, certainly, on that.” The ECB is keen to rally lending at banks, which account for about 80 percent of corporate financing in the euro area.

Wave of gambling crime hits in Q1 The police are swamped by a spate of gambling-related kidnappings Vítor Quintã

vitorquinta@macaubusinessdaily.com

he number of crimes committed in casinos or otherwise connected to gambling jumped in the first quarter of this year – especially kidnappings, official data show. The Secretariat for Security announced on Friday that 238 crimes in gaming establishments were reported to the police in the first quarter, 13.9 percent more than a year earlier. Another 31 crimes otherwise connected to gambling were reported, almost three times more than a year earlier. Of those crimes, 21 were kidnappings, 13 more than a year earlier. The kidnappers abducted 61 people, 43 of them mainland Chinese and nine of them Macau residents. The perpetrators of gamblingrelated kidnappings are usually acting on the orders on loan sharks trying to recover unpaid debts. Of the 33 cases of loan sharking reported in the first quarter, 31 were linked to gambling. “We are keeping a close eye on these crimes,” a spokesman for the Secretariat for Security told Business Daily. “We know how important the gaming industry is for Macau.” The secretariat’s figures show 10,061 people were caught without

Cheong Kuoc Va, centre, pledged new measures against drug-related crime

a valid visa in the first quarter, 17.3 percent more than a year earlier. Asked if this increase had anything to do with the lure of the casinos, the spokesman said: “It is not easy to draw a simple conclusion, especially from such a small sample.” The number of people caught working here illegally fell by 26.1 percent to 97. Of the people caught without a valid visa, 9,804 had overstayed. Only 268 of those that had

overstayed were caught more than 30 days after their visa expired. The number of people caught sheltering or employing people without a valid visa rose by 30 percent to 130. Secretary for Security Cheong Kuoc Va was present when the firstquarter figures for reported crime were announced. Mr Cheong made no comment on gambling-related crime, focusing instead on drug-related crime.

The number of cases of drug trafficking and drug dealing rose by over two-thirds to 63. Mr Cheong said the authorities would take new measures against drug-related crime, but gave no details. He promised to improve cooperation between the authorities here and in Southeast Asia in fighting drug-related crime. But he said Macau was “a visafree city for almost everyone”, which “makes it easier for criminals to enter”.

Taiwan threatens to halt Filipino hiring Demands Philippines apology over fisherman’s death

aiwan President Ma Yingjeou threatened to recall his representative to the Philippines and freeze work applications should its neighbour fail to respond within 72 hours to requests for an apology following the fatal shooting of a fisherman last week. Taiwan had more than 85,000 Filipino residents as of March. Mr Ma’s “four solemn requests” include compensation, investigation and punishment of perpetrators, and the commencement of talks over fishing rights, the presidential office said in a statement on its website. Taiwanese fishing vessel Kuang Ta Hsing No. 28 was hit by at least 32 bullets after a Philippine patrol boat on Thursday opened fire 164 nautical

miles (304 kilometres) southeast of Taiwan’s southern tip, in waters north of the Philippines. Tai wa n ’ s u l ti m a tu m co m es amid heightened tensions over territorial claims in East Asian waters and as the Philippines seeks to cut unemployment. Filipinos are the third-largest foreign group in Taiwan. The Philippines’ overseas workforce accounts for 10 percent of its gross domestic product. Almost 1.7 million overseas Filipinos remit approximately US$20 billion back annually, equal to about 10 percent of GDP, as they struggle to find jobs in their homeland. Philippines’ jobless rate climbed to 7.1 percent in January from 6.8 percent the previous month with

about 660,000 positions lost since October 2011. Failure to respond to Mr Ma’s requests within the timeline would result in a show of protest that includes halting worker applications, recalling his representative and sending the Philippine representative back home to deal with the issue, according to the statement. “We express our heartfelt sorrow on the unfortunate situation that occurred during one of the anti-illegal fishing patrols conducted by a Philippine fishery law enforcement vessel,” Abigail Valte, spokeswoman for Philippine President Benigno Aquino, said in an e-mail. She declined on the telephone to comment on Mr Ma’s threat. The commander and crew of

the Philippine vessel have been relieved of duty, she said in the e- mail. China, which also lays claim to waters near the Philippines, said on Friday it’s “deeply concerned about the Philippines’ repeated shooting at unarmed fishermen”. In April last year, Chinese ships blocked the Philippines from inspecting Chinese fishing boats in an area the nation claims. The Philippines asked the United Nations in January to rule on its maritime disputes with China. A five-member arbitral tribunal was appointed last month and will decide by July if it has jurisdiction, Foreign Affairs Secretary Albert del Rosario said on April 26. Bloomberg News