Macau Business Daily, May 17,2012

Year I - Number 34 - Thursday May 17, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

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Border crossing

Green shoots for Ilha Verde

he new border crossing between Macau and Zhuhai proposed for Ilha Verde is expected to breathe a new lease of life into the largely run down district, experts told Business Daily.

When as many as 200,000 visitors are able to go through the gate every day, shop prices are likely to skyrocket say real estate agents. Currently many stores in the area are vacant and prices are at a “very low level” they say.

An Ilha Verde shop can be bought for at most 10,000 patacas per square foot or rented at most for 100 patacas per sq. ft.

Some agencies believe store rental and purchase prices could rise tenfold in anticipation of the new crossing.

However, they stressed that would only bring prices in line with other districts such as Horta e Costa.

The possibility is already worrying shop owners in the area. They fear the increase in the number of customers will not be enough to balance the increase in rental costs.

Housing prices in the district are not expected to rise so steeply. Developers are still waiting to see what plans the government has to redevelop Ilha Verde.

While the Macau and Guangdong governments are still waiting for the green light for the border crossing from the Beijing authorities, experts warned that the transportation system needs a fix to cope with more visitors.

The new crossing is expected to reduce congestion at the existing Border Gate. The president of the Association of Economic Sciences, Joey Lao Chi Ngai, has called for the new transit point to be reserved for tourists.

Non-residents target local homes Page 5

Casino margins - not volume, key to success

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Hang Seng enters correction

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HANG SENG INDEX 19700 19600 19500 19400 19300 19200 19100

May 16

Reform debate gone in 90 mins

Taiwan banks on financial ties

The political reform bill was passed in just an hour-and-a-half at the Legislative Assembly yesterday. Florinda Chan, the Secretary for Administration and Justice, turned down a request from legislator Ng Kuok Cheong to launch a third round of public consultations. She said the first two rounds were “detailed and thorough” enough. But indirectly elected legislator Lam Heong Sang called voting “a mere waste of human and financial resources”.

Taiwan’s Hua Nan Commercial Bank yesterday became the third finance house from the island to open a branch serving Macau and neighbouring Guangdong cities. It’s a sign of the increasing integration of the Taiwan and mainland China economies following the election of Taiwan’s president Ma Ying-jeou in 2008. But the ties stop short of banking in yuan. The branch will concentrate on corporate loans in Hong Kong and US dollars.

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HSI - Movers Name

Use it or lose it on land deal

%Day

COSCO PAC LTD

2.36

ESPRIT HLDGS

2.17

CATHAY PAC AIR

1.12

TINGYI HLDG CO

0.74

CHINA OVERSEAS

0.63

PING AN INSURA-H

-2.43

HANG LUNG PROPER

-2.48

CHEUNG KONG

-2.51

HENDERSON LAND D

-3.27

BELLE INTERNATIO

-4.49

Source: Bloomberg

Land idle since 2008 when it was allocated to a company then controlled by one of Macau’s power brokers should be returned to the government says a legislator. Tin Wai Investment Company – at the time owned by Executive Council member and Transmac bus boss Liu Chak Wan – bid a total of 1.42 billion patacas (US$177.4 million) for two plots at Patane totalling 4,671 square metres in January 2008, but both are still sitting unused.

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business daily May 17, 2012

macau

The capacity of the new border gate between Ilha Verde and Zhuhai will be up to 200,000 visitors a day

Ilha Verde property to profit from checkpoint New border crossing will drive up Ilha Verde property prices – particularly retail – real estate agents say Tony Lai

tony.lai@macaubusinessdaily.com

R

eal estate agents are eyeing a lucrative spike in property prices in Ilha Verde, especially among shops, amid plans for a new Macau-Zhuhai border checkpoint.

Midland Realty chief executive Ronald Cheung expects the rents and purchase prices of shops to soar and says it will be no surprise if they leap 10-fold.

“The appreciation potential of shops depends on the flow of people in the area,” Mr Cheung told Business Daily. “The new border crossing will definitely bring more visitors, namely mainland tourists, to Ilha Verde, which will in turn drive up shop prices.”

Chief Executive Fernando Chui Sai On said on Tuesday that a new crossing for pedestrians between Macau and Zhuhai would be built where the Nam Yuet wholesale market is located to ease congestion at the Border Gate.

According to a source quoted by the Chinese-language Macau Daily News, the capacity of the new gate will be up to 200,000 visitors a day.

Centaline (Macau) sales director Jacky Shek Po Tak also predicts shop rents will increase, as there is a higher demand for retail stores in

areas with more visitors.

“The rise will depend on the nature of the border gate and when it will be completed, so it is difficult to say how much it [shop prices] will increase,” he said.

Mr Chui said the details of the new border crossing would be announced to the public gradually, once the proposal submitted by the authorities of Macau and Guangdong have won Beijing’s approval.

Savills (Macau) managing director Franco Liu agrees that shop prices will reflect the nature of the new crossing. “Whether the new crossing is open for 24 hours and the actual visitor flow will highly influence shop prices in that area,” he says.

Empty spaces He forecasts a rise of at least three or four times in price but says a tenfold increase is “too optimistic”.

He believes the price for shops facing the crossing will be “more outstanding” than for other stores, similar to the case at Border Gate.

Mr Shek said there were currently many vacant stores in the area, which had brought retail prices to a “very low level”. He said shops, if

occupied, were used for either retail services or factory storage.

According to Zhao Yu Ling, owner

KEY POINTS Current retail prices at a ‘very low level’ An 800-square-foot shop costs MOP10,000 to MOP20,000 patacas New crossing to drive up shop prices Housing prices to remain stable Investors and buyers to take a wait-and-see approach

of a real estate agency, between 10,000 patacas (US$1,250) and 20,000 patacas a month will rent an 800-square-foot shop.

“The new border checkpoint will turn Ilha Verde into a prosperous area, which will undoubtedly raise property prices,” she told Business Daily.

Mr Cheung said buyers could currently purchase a shop 10,000 patacas per square foot at most in Ilha Verde or rent one for about 100 patacas per square foot.

Prices there are far more affordable than 100,000 patacas per square foot in Horta e Costa or shops worth more than 1 million patacas per square foot in areas such as San Ma Lo. An increase of 10-times current prices is not as “surreal” as it seems.

Housing stable While real estate agents are hopeful of soaring shop prices in Ilha Verde, they see housing prices remaining stable.

“I do not think there will be any increase in housing demand in the area, provided there is a new crossing between Macau and mainland China,” Mr Shek said.

May 17, 2012 business daily | 3

Photo by Manuel Cardoso

MACAU New crossing no cure for traffic blues

Before the new border crossing with the mainland opens, the government should fix public transport, experts say Kristy Chan

kristyc@macaubusinessdaily.com

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he new border crossing announced by Macau and Guangdong authorities on Tuesday, could help reduce traffic congestion at the Border Gate but the city’s transport system needs improvement too, experts told Business Daily.

Urban planner Francisco Vizeu Pinheiro says the new checkpoint will reduce the kinds of traffic jams experienced by tourists but is unlikely to solve the city’s wider transport problems. He expects the Light Rapid Transit system, due to open by 2015, may improve traffic snarls.

“The public will use public transport only when it becomes efficient,” Mr Vizeu Pinheiro said.

The University of Saint Joseph professor says faster and larger capacity transportation is critical for an international city and the convenience of “millions of visitors and the thousands of workers”.

Until the light rail system opens, its construction will hugely increase the number of traffic jams in the city, he said. The government must divert most maritime passenger services to the Taipa Ferry Terminal.

“There will not be a big impact on the housing price.”

Mr Cheung and Mr Liu also expect the housing price in Ilha Verde to increase by about 10 percent – an increase that is not exceptional.

“The new border gate can attract businessmen, who frequently travel between Macau and Zhuhai, to buy homes near the crossing,” said Mr Liu. Ms Zhao says the new crossing will encourage more cross-border travellers to invest in homes, particularly Zhuhai residents.

But Mr Liu said the positive impact will be limited to second-hand homes in the area.

Mr Cheung says the quality of flats in the area hinder the appreciation potential. “You will never expect housing prices in Ilha Verde to rise drastically, costing as much as the present luxury residential properties,” he said.

“The price is limited by the environment and views the area can provide, as well as the security issue.”

start using their land reserves for property development once the government has released the plan.

Developers aside, he says investors and buyers will take a wait-andsee approach. “It is impossible to see real estate prices climb up significantly in these months but prices will definitely shoot up when the date for the completion of the new gate approaches, which could only take place in a few years,” said Mr Liu. Ms Zhao has a client who refused to sell a flat of 1,200 square feet in the area for 4.1 million patacas earlier this week.

“He said today he would wait until next month to see if prices could rise further,” she said.

Macau will eventually need an underground railway, much like Hong Kong’s, or “a larger bus fleet that needs congestion-free roads provided by building new bridges and tunnels,” he said.

He added that the new crossing would be more convenient for many Macau people who are already living across the border.

Macau Association of Economic Sciences chairman Joey Lao Chi Ngai says the new border is made to accommodate tourists. The Border Gate should focus regular visitors and Macau residents living in Zhuhai, while the new crossing should serve tourists.

Mr Lao says he is concerned about the road network’s ability to deal with the increased visitors the new crossing will usher in.

The new border crossing will have the capacity to deal with 200,000 visitors a day, a source familiar with the Border Gate told Chinese-language newspaper Macau Daily News.

Mr Lao said better public transport, both buses and taxis, and speedier customs clearances are necessary to develop the city’s tourism industry.

The new border crossing may help reduce traffic congestion at the Border Gate

with T.C.

Retailers fret rent hike will trail checkpoint Terina Cao

tting@macaubusinessdaily.com

Wait and see Both Savills and Centaline predict the new crossing will draw more developers to invest in the area but they will have to balance that against the government’s long-term plans for the area.

“Many developers are still guessing the potential for development as the government has not yet listed out what they want to do in Ilha Verde,” said Mr Liu. The government carried out a public consultation on urban planning in Ilha Verde last year. It has not released the timetable and details of the final version of the plan.

According to a survey by the Ilha Verde neighbourhood association in February, about two-thirds of the residents were unaware of any urban planning.

Mr Liu believes developers will

S

hop owners on Macau’s border with Zhuhai look forward to the proposed new crossing with trepidation.

They are pleased with the prospect of more business opportunities in the Ilha Verde district but are worried over a possible increase in rentals.

“If the rent goes too high, I may stop my business,” says the owner of an outlet that sells soya-bean milk and light refreshments at Ilha Verde.

She pays a monthly rent of HK$7,000 (US$870) for her 130-square-foot shop. She fears the rent will increase to HK$10,000 once the new border crossing opens.

No date has been set for the opening.

The project will have to be approved by officials in Beijing before construction can begin.

“Besides the rent that I have to pay, utility bills are also a large expense,” the snack shop owner said. “I’ll have to give up my business if payments become hard to afford.”

But she remains alert to the positives.

“It can also bring more tourists here and more customers to my shop,” she said. “Maybe I will slightly increase my prices as the rent goes higher.”

Ms Vong owns a clothing shop near the Nam Yuet wholesale market, which will be moved to the ZhuhaiMacau Cross-Border Industrial Park.

Apart from worrying about a likely mark-up in rent, she fears opening a new border crossing might increase criminal activity.

In the first quarter of this year, crimes rose 12.3 percent to 3,151

incidents. The large number of tourists – 6.9 million in the first quarter – was singled out as the most likely cause.

“The government also needs to take the citizens’ safety into greater consideration when they’re doing the urban planning,” Ms Vong said.

She predicted that the opening would also create more business competition in the district.

“This area will become more active after the border opens. More people will choose Ilha Verde as a place to do business, which may take away my customers,” she said.

“Compared to the pressure of rising rent, this is also a trying problem. In general, I feel my shop will certainly not benefit from the opening of the new crossing.”

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business daily May 17, 2012

macau

‘Automatic’ election in sights as final vote on reform looms Doing away with the ’automatic’ election mechanism for direct election is one sticking point in the Legislative Assembly’s debate on electoral reform

P

roposed changes to indirect elections are still up for debate as the political reform bill moves closer to a final vote in the Legislative Assembly next month.

“We have no big problems with the draft law,” second standing committee president Chan Chak Mo said after yesterday’s second and final meeting.

The main sticking point appears to be the ‘automatic election’ mechanism dealing with candidates who run for an uncontested seat.

Mr Chan said some legislators were wary of removing a mechanism that made voting optional and of the increase to the number of votes each association might have.

“It can still be negotiated during the legislative process,” the indirectly elected legislator said of eliminating automatic election and doubling the votes of each association from 11 to 22.

The current electoral law says: “When the ... number of candidates ... approved by the electoral committee is equal to or lower than the number of seats for the electoral sector, those candidates are automatically elected, with no voting being held.”

During the public consultation, several politicians supported ending the rule.

Tina Ho Teng Iat, Macau deputy to the Chinese People’s Political Consultative Conference, said: “There

should always be a vote ... to ensure the integrity of the elections.”

But there was not unanimous support. Indirectly elected legislator Lam Heong Sang called voting “a mere waste of human and financial resources”.

Yesterday’s meeting lasted about an hour, while the first had taken less than 30 minutes. The committee expects to submit its report this month.

“We hope the draft laws can get past the assembly and [be approved by] the chief executive early next month, so that it will be available for discussion in the Standing Committee of the National People’s Congress later next month,” Mr Chan said.

The draft law, if approved, will add two directly elected and two indirectly elected seats to the

legislative assembly and expand the number of members in the chief executive election committee from 300 to 400.

Mr Chan said that Secretary for Administration and Justice Florinda Chan, who was also in yesterday’s meeting, turned down a request from legislator Ng Kuok Cheong to launch a third round of public consultations. She said the first two rounds were “detailed and thorough” enough.

Mr Ng questioned the integrity of the consultations and asked for another round during Monday’s meeting.

Pan-democrat legislators Ng, Au Kam San and Paul Chan Wai Chi and José Pereira Coutinho have been critical of the consultations, calling them “scripted and fabricated” during last week’s first reading.

T.L.

Macau’s population grew by 5,500 in the first quarter this year

Non-residents drive population growth

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he city’s population grew by 5,500 to reach 562,900 in the first quarter this year, with overseas workers accounting for much of the increase, according to the most recent data from the Statistics and Census Bureau.

There were 1,578 births in the first quarter of the year and 511 deaths. Health authorities had expected a 14 to 20 percent spike in births this year, the Year of the Dragon.

The number of overseas workers swelled by 4,636 compared to the previous quarter to reach 98,664.

In addition, 815 mainland immigrants and another 556 people from other nationalities were allowed to reside in the city.

Earlier this month, legislator Ho

Sio Kam called on the government to introduce a demographics policy as soon as possible. She said Macau had always been a city of immigrants that had fuelled economic development and filled labour shortfalls.

A government think-tank has launched a study on future demography policy and a public consultation should take place by the end of the year.

This policy will focus on human resources, population agieng and trends in population size, including “talent creation, strategic import of talents and optimising the management of non-resident workers”, the head of the thinktank, Lao Pun Lap said last month.

V.Q.

May 17, 2012 business daily | 5

MACAU Macau’s properties are still very cheap, selling at one-quarter or one-half of the Hong Kong prices, a real estate agency said

Chinese home sales stable in Macau Home sales to mainland Chinese buyers are slowing in Hong Kong but remain steady in Macau

M

ainland Chinese investors accounted for a smaller percentage of Hong Kong’s new home sales for a second quarter, but the figure is stable in Macau, real estate agency Midland says.

“There are still increasing numbers of mainland buyers coming to Macau. The figure is at least steady if not growing,” chief executive Midland Macau, Ronald Y. F. Cheung, told Business Daily.

Non-resident buyers make up about 30 to 40 percent of all new home sales, according to Midland Macau’s transaction records.

“Most of them are from mainland or Hong Kong, with more buyers from mainland,” Mr Cheung said.

He said projects recently launched have attracted many mainland buyers, which are keeping sales up.

A few brand new luxury complexes such as One Oasis, La Scala and Star River-Windsor Arch have all been on the market for sales in recent months.

However, in Hong Kong home buying by mainland Chinese is losing momentum.

Despite still making up a sizable 36.8 percent of all new home sales by value in the first quarter, based on data from Midland, it has shown a small decline from the previous quarter’s 37.9 percent.

The figure reached 53.9 percent in the third quarter last year, Midland said.

Hong Kong’s home prices have gained almost 80 percent since early 2009 on record low mortgage rates, an undersupply of new units and an influx of Chinese buyers.

The tide is changing now. China’s gross domestic product expanded 8.1 percent in the first three months of 2012 from a year earlier, the fifth straight quarterly deceleration, as Premier Wen Jiabao cracked down on property speculation and exports were hurt by Europe’s debt crisis.

“With credit tightening, Chinese homebuyers are having more difficulties borrowing to invest,” said Angela Wong, an executive director at Midland in Hong Kong. “There’s also a huge pentup demand being released among local Hong Kong buyers, who have waited on the sideline during the previous six months.”

Mr Cheung concurred that credit tightening and a badly performing stock market has led to some cash flow problems for some of the buyers, even in Macau.

However, he said most mainland buyers who venture out to buy properties abroad have significant financial resources.

“And Macau’s properties are still very cheap, selling at one-quarter or

one-half of the prices comparing to Hong Kong. They are still attractive to mainland buyers,” he added.

Transaction in numbers Hong Kong home transactions began slowing in the second half of last year, with monthly deals dropping below 5,500 for eight straight months from July 2011, as buyers became concerned over a potential slowdown in the United States economy and the European

KEY POINTS Chinese homebuyers having more difficulties borrowing China’s Hong Kong home-buying influx wanes Macau’s properties still attractive to mainland buyers New projects gaining momentum

debt crisis, Ms Wong said. Before that, more than 7,000 transactions had been recorded every month since March 2009.

The value of new home sales from mainland Chinese buyers was HK$7.9 billion (US$1 billion) in the first quarter, down from HK$9.3 billion in the previous quarter, Midland said.

In Macau, home transactions also began to slow in the second half of last year, though for different reasons, and they have picked up again last month.

There was an average of 628 transactions each month in the second half of last year, fewer than one third of last June’s figure of 2,009.

The sharp decline was mainly due to the enforcement of the special stamp duty by the government after June.

The stamp duty requires buyers to pay a tax of 20 percent if the property is resold in one year. The levy is reduced to 10 percent if the property is sold in two years.

Transactions have since increased to 1,265 in March, twice the average of previous months.

The value of new home sales also tripled in the same month alone.

The value of home transactions increased 32.6 percent in the first quarter.

X.C./Bloomberg

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business daily May 16, 2012

macau

Reclaim idle land, InBrief legislator urges

The government’s decision to call off updating the tax code prolongs an “undesirable” situation, the Macau Lawyers Association president, Jorge Neto Valente, said yesterday. “This is an almost unique situation because there is no MSAR legislation that replaced the previous legislation,” he said quoted by Rádio Macau. “Technically speaking it’s very difficult to enforce it.”After 10 years in the making and a year at the Legislative Assembly, reform of the tax code was dropped earlier this month. “I don’t believe it takes 10 years to prepare a law, no matter how difficult and technical it might be,” Mr Neto Valente said.

Four years after being sold at auction for residential towers, two land plots at Patane are sitting unused Photo by Manuel Cardoso

Tax code delays undesirable: lawyer

Over-the-counter drug prices swing by 20 pct Variations averaging about 20 percent in the prices of over-the-counter drugs have been found in a recent survey by the Consumer Council. The survey, released yesterday, tracked prices for six different treatments from 26 different drugstores, including coldand-flu remedies, cough syrup and medicine to treat stomach aches. The price difference for one cough mixture reached 81.8 percent, with prices ranging from 31.9 patacas (US$4) to 58 patacas. The cost of one stomach-ache medicine varied by about 30 patacas, a 70-percent swing. The council’s price check on non-prescription drugs was carried out last week.

‘Running millionaire’ hit the tables at Wynn A New Zealand woman whose bank account was wrongly credited with NZ$10 million (US$7.67 million) transferred HK$1.5 million to a player account at Wynn Macau while she was on the run from police. Kara Hurring faces money laundering charges after she and partner Leo Hui Cao made two transfers from a Hong Kong bank to a “players account” at Wynn, a court in New Zealand heard yesterday. Wynn’s senior vice-president Jay Schall said two withdrawals were made from a Hong Kong bank and converted into chips. Several bets were made from a player account, ranging from HK$3,000 to HK$32,500, and Hurring lost HK$101,000. “We don’t know where the other HK$1.4 million went,” Mr Schall said.

Two plots of land in the Patane area, auctioned in 2008, are yet to be developed

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egislator Ng Kuok Cheong matters can proceed. says the government should Although there is no set deadline take back idle land in the for the adjudication to become peninsula’s northeast and turn it binding, the winning bidder has traditionally paid 10 percent of the into low-cost public housing.

Mr Ng again criticised the 2008 amount quoted within 10 days. Andeal that saw two plots in the Pa- other 30 percent is paid when the tane area sold to a private compa- two sides reach an agreement over ny. He says the government has not concession conditions. The balance is paid in instalments, starting six been fully paid for the land.

Tin Wai Investment Co, owned at months after the publication of the the time by Executive Council mem- concession contract in the Official ber and Transmac boss Liu Chak Gazette.

Wan, was awarded the two plots by Off-book transaction public tender in January 2008.

The company offered 555 million patacas (US$69.4 million) for a The contract for the land in Patane 1,704-square-metre plot and 867.9 has never been published and the million patacas for a 2,967-square- government has received just 10 metre plot. The price paid was percent of the payment from Tin Wai Investment. about 10-times the asking price.

Residential towers no more than 90 Mr Ng disapproves of the deal metres high, shops and car parks because the land is yet to be developed. were planned for the site.

The result of the tender was an- “The government should take back nounced on January 8, 2008. Little the two plots, as well as other idle has been heard of the project since. land in the area, to build public After tender results are published, housing,” said Mr Ng in a written a written adjudication is provision- statement. ally sent to the chief executive, who The legislator has repeatedly deNo smooth ride? – VIP gambling could slow further in Macau gives his or her agreement so that scribed the case as “damaging to

the public interest”.

In mid-2010, Land, Public Works and Transportation Bureau chief Jaime Carion said the delay was caused by the developer’s request to review urban planning in the area.

The review was designed to unite the two plots, eliminating a road that separates them. The request was turned down and development stalled.

The bureau was not immediately available for comment.

Business Daily also attempted to contact Mr Liu’s brother, Alfred Liu, who was the administrator of Tin Wai at the time. There was not reply by press time.

Unlike the 2008 auction, Macau’s first land public auction had followed a very different path.

In February 2004, the government carried out the first public tender to adjudicate a 1,001 square-metre plot on the Lam Mau Marginal Avenue.

Son Va Tat – Real Estate Investment, Civil Construction and Development Co paid 67.29 million patacas for it in a settlement that took just six months.

T.A.

Weather Beijing 30/15o C Changchun 23/10o C

Harbin 24/12o C

Xian 28/15o C Shanghai 31/19o C Chengdu 27/19o C Kunming 27/16o C Haikou 32/26o C Sanya 32/25o C

Guangzhou 29/24o C

MACAU (14 May-19 May) Day

Temperature

Humidity

05/14

23/30o C

75/95 %

05/15

25/29o C

80/95 %

05/16

25/30o C

70/95 %

05/17

26/30o C

75/95 %

05/18

26/30o C

75/95 %

05/19

26/30o C

75/95 %

Shenzhen 31/24o C

ASIA (today)

Hong Kong 28/25o C

Manila

TOKYO

Jakarta

35/27o C

31/25o C

25/16o C

32/25o C

Macau 29/25o C

Bangkok

SEOUL

K. lumpur

35/28 C o

SINGAPORE

19/13 C o

34/26 C o

taipei

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May 16, 2012 business daily | 7

MACAU

Hua Nan opens doors, eyes Pearl River growth Taiwanese bank will use new branch as a strategic base to boost its Pearl River Delta business

T

aiwan’s Hua Nan Commercial Bank, the banking arm of Hua Nan Financial Holdings Co Ltd, opened its first Macau branch yesterday. Secretary for Economy and Finance Francis Tam Pak Yuen and Hua Nan Commercial Bank president Lin Ming Cheng attended the ceremony.

Mr Lin called the opening a strategic move for Hua Nan, given Macau’s proximity to Zhuhai, Jiangmen and other western Pearl River Delta cities.

The branch will concentrate on corporate loans in Hong Kong and US dollars, the bank’s assistant vice-president Hsin Chun Mei said. “We will use Macau as a base to provide services to Taiwanese businesses in the neighbouring cities,” she told Business Daily.

With more than 90 years of history, Taiwan’s oldest bank Hua Nan has 185 domestic branches.

Its overseas network includes branches in Hong Kong, Shenzhen and Sydney.

The bank’s efforts to commence operations in Macau began three

year, making it the first Taiwanese lender permitted to offer services in yuan.

It is also considering purchasing a stake in a mainland bank, according to reports by Asia Banking and Finance. It has targeted Fujian Haixia Bank Co Ltd and is currently weighing the options. If the deal is done, it would be the first direct investment by a Taiwanese lender in a mainland bank.

Since the Economic Cooperation Framework Agreement between Beijing and Taipei came into effect in mid-2010, the bank has also signed cooperation pacts covering information exchange and staff training with the Bank of China Ltd, Bank of Communications Co Ltd and Fujian Haixia.

Hua Nan Financial Holdings also operates in securities, asset management and insurance.

X.C.

Hua Nan bank branch in Macau will focus on corporate loans in US and Hong Kong dollars

years ago. It won the go-ahead from the Monetary Authority of Macau last August.

It becomes the third Taiwanese bank to open a Macau branch, after Bank SinoPac in 1996 and First Commercial Bank in 2009. All three banks are at the FIT Centre.

“Taiwanese banks here all have a mainland [China] focus,” Ms Hsin said. “And there are quite

a few Taiwanese companies that are in trade, manufacturing and construction business in the region. They all need to be better serviced.”

Taiwan media has reported that the bank is expanding aggressively in the mainland.

It received regulatory approval to conduct yuan-denominated business in Shenzhen earlier this

We will use Macau as a base to provide services to Taiwanese businesses in the neighbouring cities Hsin Chun Mei, Hua Nan Bank assistant vice-president

Jam today and jam tomorrow Profitable mass gaming boosts Macau in VIP slowdown

I

nvestors need to focus on margins not just revenue growth in assessing the health of the Macau casino industry says a report from J.P. Morgan in Hong Kong.

“A new casino normally targets the top line [gross sales or revenues] in the first six to nine months to boost customer traffic and increase customer recognition.

As revenue improves, the focus gradually shifts to margin and profit maximisation,” says the 80-page report by Kenneth Fong, vice president, Asia Pacific Equity Research, covering conglomerates, gaming and lodging.

The bank says that in Macau, margins on VIP gambling EBITDA (earnings before interest, taxation, depreciation and amortisation) are normally the lowest, at 1015 percent, with those on massmarket table games and slots at 30-45 percent, and non-gaming such as hotels and retail operations climbing to 40-60 percent. So even when VIP revenue growth rates slow year-on-year - as they have done during 2012; if higher margin segments see growth speeding up year-on-year that can have a compensatory effect.

“Over the past few months, there has been a diverging view in the market,” says the report. “The bears willingly focus on the VIP slowdown and argue that it is time to sell the sector. On the other hand, the bulls focus on the accelerated growth in the highmargin mass segment which they

Sweet spot – the profitable mass market gives casinos some jam

think should more than offset the slowdown in VIP when it comes to profitability.”

J.P. Morgan said in a separate note that up to May 13 this month’s Macau gaming revenue stood at 11.7 billion patacas (US$1.46 billion) suggesting a total for May of 27 billion patacas. That would mean a year-on-year increase of 11

percent compared to April’s yearon-year increase of 22 percent.

“The gaming revenue has been stabilised at around 20-30 percent growth since December 2011,” adds the main report.

“The mix continues to shift from low operating leverage and low-margin VIP (low quality) to high-operating-leverage and

high-margin mass segment (high quality).” But it also warns: “Even though faster growth from the mass market should help boost margins and profitability, the impact will not be revealed until 3Q12 [third quarter 2012] when investors see the positive impact in the financial results.”

A.E.

8 |

business daily May 17, 2012

GREATER CHINA

Chow Tai Fook leads InBrief declines among jewellers CR Gas to buy AEI Chinas

China Resources Gas Group Ltd said it had agreed to buy city gas pipeline operator and distributor AEI China Gas Ltd for US$237.72 million, as it seeks to expand its core business of downstream city gas operations in mainland China.

In a filing to the Hong Kong bourse, China Resources Gas said it would buy the entire issued share capital of AEI China from AEI Asia Ltd. AEI China operates 28 city gas projects, eight gas stations and four midstream gas transmission pipeline projects in 11 provinces in China, the statement said.

China Mobile in talks with Apple China Mobile, the world’s biggest carrier by subscribers and the only Chinese operator that does not officially carry the iPhone, is actively negotiating with Apple Inc on the issue, its chairman said yesterday. “We’ve been actively talking to Apple on how we can cooperate,” China Mobile Chairman Xi Guohua, who assumed the post in March, told a shareholders’ meeting. He made the comments in response to a question about when China Mobile would clinch a contract with Apple for the iPhone. China Mobile shares are up about 13 percent this year, outperforming the Hang Seng Index’s about 5 percent rise.

The carrier said subscribers in March rose to 667.20 million – more than twice the population of the United States – including 59.56 million 3G subscribers.

Amid gold’s slump and weaker economic expansion in China Marco Lui

C

how Tai Fook Jewellery Group Ltd, which makes more than half of its sales from gold products, plunged to a record low in Hong Kong trading as the precious metal entered a socalled bear market.

The stock dropped as much as 10 percent, the most since its December 15 debut, to close at HK$10.52, leading declines among jewellers.

Luk Fook Holdings International Ltd fell 4 percent, Tse Sui Luen Jewellery International Ltd lost as much as 5.7 percent and Chow Sang Sang Holdings International Ltd dropped as much as 7.4 percent, to close 4.07 percent lower at HK$17.44.

Immediate-delivery gold has lost more than 20 percent from its alltime high last September after Greek leaders failed to form a government. Chow Tai Fook may face slower growth amid gold’s slump and weaker economic expansion in China, said Castor Pang, head of research at CorePacific Yamaichi International Ltd. “Chow Tai Fook’s profit is very sensitive to sales of gold products,” Pang said yesterday. “It may not be able to maintain the high growth it had last year.”

The company’s profit for the year ended March 2011 jumped 65

Chow Tai Fook’s stock dropped the most since its December 15 debut

percent to HK$3.5 billion (US$450 million) from a year earlier, according to its listing document.

The company expects to post net income of at least HK$6.3 billion for the 12 months ended March 31, it said.

China, the world’s secondlargest gold jewellery market, on May 12 lowered banks’ reserve requirements for the third time in six months.

Gross domestic product of China expanded 8.1 percent in the first three months of 2012 from a year earlier in the fifth straight quarterly deceleration.

Chow Tai Fook, which has more than 1,500 watch and jewellery outlets in 320 cities in mainland as well as in Hong Kong and Macau, plans to open as many as 200 jewellery sales points a year through 2015, Alan Chan, the Hong Kong-based jeweller’s director of group branding, said in a March interview.

Chow Tai Fook’s stock has lost 23 percent since the beginning of the year, compared with a 4.4 percent gain in the Hang Seng Index. The benchmark Hang Seng Index fell as much as 3.2 percent yesterday.

Bloomberg

HTC shares tumble on U.S. patent case

Taiwan dollar reaches month low

Smartphone maker tumbling on news U.S. sales of some new phones will be delayed

Taiwan’s dollar touched a one-month low as a political impasse in Greece fuelled concern the nation will leave the euro.

Government bonds were little changed.

Global funds sold US$214 million more Taiwanese stocks than they bought yesterday, a seventh day of net sales, according to exchange data. Taiwan’s dollar fell to NT$29.514 against its U.S. counterpart at the close, from NT$29.502 on Monday, according to Taipei Forex Inc. It earlier touched NT$29.579, the weakest level since April 16. “The situation in Europe continues to damp risk-taking appetite,” said James Wang, a fixed-income trader at Yuanta Securities Co. in Taipei. “Europe will continue to be the main thing moving sentiment.”

Clare Jim

Ma Ying-jeou fined for Fb campaigning Taiwan’s President Ma Ying-jeou has been fined Tw$500,000 (US$17,000) by electoral authorities for urging his Facebook followers on polling day to vote for him, the Central Election Commission said yesterday. Taiwanese election law forbids any form of campaigning on voting day. Elected in 2008, Mr Ma won a comfortable re-election victory on January 14.

He is due to be inaugurated for his second and last four-year term on Sunday. However, his government has recently come under fire over a string of controversial policies, which saw his popularity plunge to 19.5 percent, its lowest level in nearly three years, according to a poll released last week.

U

.S. sales of two new smartphones from Taiwan’s HTC Corp will be delayed due to a patent dispute with Apple Inc, a fresh blow to the company as it tries to turn around declining sales in what was once its largest market.

Shares in HTC tumbled more than 6 percent after it said shipments of the phones were being held up by U.S. customs officials.

Taiwan stocks closed down 2.18 percent yesterday, joining regional bourses in falls as the eurozone’s woes cut appetite for risk. The main TAIEX index fell 161.07 points to 7,234.57.

Apple scored a narrow victory against HTC in a patent lawsuit in December over technology in the smartphones, one of many such disputes in the fiercely competitive smartphone market.

HTC said in a statement yesterday that “the U.S. availability of the HTC One X and HTC EVO 4G LTE has been delayed due to a standard U.S. Customs review of shipments that is required after an ITC [International Trade Commission] exclusion order”.

The two models are the first devices to be delayed since that ruling, which said that HTC phones with the disputed technology would be banned from entering the U.S. from

April 19. HTC has said that it has a workaround in its new phones to avoid the technology, but the shipments still require inspection.

HTC said it was keeping its second quarter revenue guidance unchanged at TW$105 billion (US$3.56 billion).

Fall from grace Former contract maker HTC had a fairytale ride in 2010 and early 2011, when its shares more than tripled in the 14 months to April 2011. The company’s sales grew four-fold in 1-1/2 years as consumers snapped up its innovative phones with their distinctive large clock numerals.

But it suffered an equally rapid fall from grace as its phones failed to

HTC tumbled more than 6 percent yesterday

keep up with Apple’s iPhones and Samsung’s Galaxy range.

Some shipments of the One X model had reached the U.S. before the ban date, enabling the model’s launch, but further shipments are being held up, an HTC official in Taipei said.

U.S. operator AT&T, which has been carrying the One X model in store since May 6, says the smartphone is “out of stock” on its website.

The launch of the EVO 4G LTE

by Sprint, originally scheduled for tomorrow, will be delayed.

Sprint has been taking pre-orders on its website.

In its statement, HTC said it believes it was “in compliance with the ruling and HTC is working closely with customs to secure approval”. Sprint and AT&T both declined to comment.

“It’s really hard to tell how much longer the phones will be held up at the customs because the review has already taken a month,” said Bonnie Chang, an analyst of Yuanta Securities.

She said although some HTC One X stocks were available for sale because they had already passed through customs and were with dealers, the quantity was unknown and third-quarter sales could be affected if there were not enough to meet demand.

Reuters

May 17, 2012 business daily | 9

GREATER CHINA Hang Seng Index enters correction on Europe risk The benchmark index has fallen about 11 percent from this year’s peak on February 29 Jonathan Burgos

forming a new government collapsed amid concern the country will abandon the euro. The voting will follow inconclusive May 6 polls that pushed a political party opposed to Greece’s bailout into second place. Public opinion polls say that party, Syriza, may come in first next time.

HSBC Holdings Plc, Europe’s biggest lender by market value, slipped 2.4 percent to HK$66.45.

Cosco Pacific Ltd, which operates a port in Greece, declined 3.5 percent to HK$9.65.

Banks drop

The Hang Seng Index declined 3.2 percent yesterday, the biggest drop since November 10

H

ong Kong stocks fell, with the Hang Seng Index sliding about 11 percent from its 2012 peak and entering what traders consider a correction, as Greece moved to call new elections, heightening concern it will leave the euro.

Esprit Holdings Ltd, a clothier that depends on Europe for 79 percent of its sales, declined 5.5 percent.

Industrial & Commercial Bank of China Ltd, the world’s largest lender, slid 1.9 percent after Shanghai Securities News reported almost no lending growth at the mainland’s top banks.

China Coal Energy Co. led producers of the fuel

down after UOB-Kay Hian Holdings Ltd predicted a drop in coal prices as China’s growth slows.

“It’s too early to be aggressive on accumulating stocks,” said Pauline Dan, the Hong Kongbased chief investment officer at Samsung Asset Management Co. “I continue to be quite concerned about the European situation. We haven’t come to the end game yet.”

The Hang Seng Index declined 3.2 percent to 19,259.83 as of the 4 pm close in Hong Kong, the biggest drop since November 10. All but one stock fell in the 48-member

gauge. The Hang Seng China Enterprises Index of mainland stocks, also known as the H-share index, sank 3.4 percent to 9,741.97, wiping out this year’s gains.

The benchmark Hang Seng Index has fallen about 11 percent from this year’s peak on February 29, more than the 10 percent threshold traders consider a correction, amid signs China’s economic growth is slowing and as political turmoil in Europe renewed concern the debt crisis will worsen.

Trading volumes in Hong Kong were about 15 percent higher compared to the 30-day average,

according to data compiled

by Bloomberg.

‘Mini crisis’ “As the pressure builds in Europe, you need to see another mini crisis before policy makers will step in, and we’re not there yet,” said Andrew Pease, Sydney-based chief investment strategist for the Asia-Pacific region at Russell Investment Group.

“Markets and economies in Asia are at the mercy of the export story.”

Companies that do business in Europe declined as Greek leaders seek to schedule new elections as early as June 10, after talks aimed at

Chinese lenders also slid.

The nation’s four biggest banks reported almost zero net new lending in the two weeks ended May 13, according the Shanghai Securities News, citing unidentified people familiar with the matter. Two of the four lenders increased outstanding loans by less than 20 billion yuan (US$3.2 billion), while the others recorded drops as repayments exceeded new credit, the newspaper said.

ICBC, as China’s largest bank is known, dropped 1.9 percent to HK$4.72. China Construction Bank Corp., the second-biggest, sank 2.8 percent to HK$5.31.

Futures on the Hang Seng Index slid 2.3 percent 19,177.

The HSI Volatility Index jumped 17 percent to 27.74, heading for the highest level since December 19 and indicating traders expect a swing of about 8 percent in the benchmark index during the next 30 days.

Bloomberg

C.Bank urges swift launch of new financial instruments Bank governor says China needs to quicken the pace of liberalising the market

C

hina should quicken the pace of launching new financial instruments and capital markets must be strengthened to improve their contribution to supporting economic activity, central bank governor Zhou Xiaochuan said yesterday.

“China needs to quicken the pace of liberalising financial instruments such as government bond futures, commodities options and interest rate swaps, to help companies in the real economy improve their pricing and risk management,” Mr Zhou told an audience of financial regulators and industry participants.

“China will launch cross-border exchange-traded fund (ETF) at an appropriate time, and we

will also gradually expand the Qualified Foreign Institutional Investor (QFII) and RQFII quotas, while supporting financial firms to actively explore opportunities abroad,” Mr Zhou said.

Under the Renminbi Qualified Foreign Institutional Investor (RQFII), or RQFII scheme, designated foreign investors will be allowed to buy mainland stocks and bonds with yuan they raised offshore, potentially offering a new incentive for people to hold and use yuan.

China launched silver futures trading last week to provide a hedging tool for investors and is considering launching new financial derivatives linked to the yuan’s exchange rate, foreign

Central bank governor Zhou Xiaochuan

currencies, global bonds and Chinese interest rates.

China has kicked off simulated trading in government bond futures, paving the way for the relaunch of the derivatives product, which was halted in the mid-1990s.

Beijing took a milestone step in liberalising its currency regime last month, doubling the daily onshore trading band for the yuan to one percent. The move underlined its desire for reforms designed to ease speculative pressures in the

economy and rebalance capital flows, while taking the country one step closer to its goal of a basically convertible yuan by 2015.

Sources in close, direct contact with the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC), say reforms are ready to be rushed out over the next 12 months to boost two-way capital flows, drive diversification of business finance and accelerate corporate currency hedging.

Reuters

10 |

business daily May 17, 2012

ASIA

Indonesia nickel-ore ban threatens regional iron producers

Stockpiles will reduce impact now, but production may be affected if situation persists Indonesia restrictions on mining exports may force production cuts

A

ban and 20 percent tax by Indonesia on nickel-ore exports may force Japan, the world’s third-largest producer of refined metal, to source raw material from other suppliers or reduce output, Sumitomo Metal Mining Co. said.

The company sees “little

impact” near term as it has stockpiles and other suppliers, said Toru Higo, general manager of nickel sales and raw materials, at Japan’s top producer.

Nickel, used to strengthen stainless steel, has fallen 9.9 percent this year, extending last year’s 24 percent loss on slowing demand in

China and concern over Europe’s debt crisis. Indonesia’s 20 percent tax on ore exports will boost prices in the mid-term, while large stockpiles in China will limit short- term impacts, China International Capital Corp. said.

“If the ban continues, we’ll need more ore from

the Philippines and New Caledonia,” Mr Higo said in an interview yesterday. “If it gets worse, the new rules will force some producers to cut production,” he said.

Indonesia banned exports of 14 raw minerals effective May 6, with an exception for miners that plan to build local process-

ing facilities, Energy and Mineral Resources Minister Jero Wacik said. The miners will be assessed an average tax of 20 percent on ore shipments. The restriction applies to copper, lead, nickel, gold, silver, zinc, chromium, bauxite, manganese, molybdenum, platinum, antimony, iron ore and sand iron.

China boosted imports of bauxite and nickel ore to build stockpiles before Indonesia, its largest supplier, curbed shipments, Barclays Capital said April 23. China and Russia were the biggest producers of refined metal in 2010, according to London-based metals consultant CRU. The Indonesia Mining Association estimated in March that the ban will cut nickel-ore and bauxite exports by as much as 75 percent this year. Indonesia shipped 33 million tons of nickel ore and 40 million tons of bauxite last year, according to Syahrir Abubakar, the group’s executive director.

The tax on miners is unlikely to affect prices in the near term because China has been stockpiling and will find material elsewhere in the coming months, Morgan Stanley said in a report on May 14. China’s nickel pig iron producers source just over half of their ore from Indonesia, the bank said.

Bloomberg

Church opposes copper mine in the Philippines Environment compliance certificate refused, ban on open-pit mining invoked

X

strata Plc, the world’s fourth-biggest copper producer, risks missing a 2016 target to begin extracting about US$60 billion of minerals from its project in the Philippines because of opposition from the Catholic Church.

The central government in January rejected the company’s request for an environmental compliance certificate for the US$5.9 billion Tampakan copper and gold project, citing a ban by regional lawmakers on open-pit mining. With local polls due next year, South Cotabato legislators are reluctant to amend

the law because they risk the ire of the Church, said Arthur Pingoy, the region’s governor.

“There are petitions and resolutions to amend the local law pending,” Mr Pingoy said in an interview. “No one dares touch them because they fear a backlash from the Church, with priests campaigning against their re-election next year.”

Xstrata is running short of time to bring the copper project in Mindanao on line by its 2016 target, a feat that would help ease global shortages of the metal used in power transmission, plumbing and autos, as well as boost economic growth.

Opposition from the Church and other groups on environmental grounds is compounded by threat of attack against mines and workers by armed communist and Islamic rebels. The Church has gathered 106,000 signatures calling on President Benigno Aquino not to allow Xstrata to start mining in Tampakan, he said.

“The issues that this project face are illustrative of intensifying political, social and environmental challenges that miners are facing in growing production,” Gayle Berry, a London-based metals analyst at Barclays Plc, said in an e-mailed

response to questions. “There is now a long list of projects that have been delayed or faced big increases in capital costs as a result.”

Copper futures traded on the London Metal Exchange have gained 2.9 percent this year to US$7,770 a metric ton, rebounding from a 21 percent slump in 2011 as global production failed to keep up with demand for a third straight year. Worldwide copper stockpiles have fallen to 463,617.8 metric tons as of May 15, the lowest since Sept.

10, 2009, according to data from exchanges tracked by Bloomberg.

Bloomberg

Analysts say Japan’s economic growth peaked in the first quarter Bank of Japan under domestic pressure to provide additional stimulus to the economy

G

ross domestic product rose an annualised 3.5 percent, compared with a 0.7 percent contraction in the final three months of 2011, according to the median estimate of 27 economists surveyed

by Bloomberg News.

Persistent deflation and the yen’s 5 percent climb against the dollar since mid-March may encourage politicians to keep pressing the Bank of Japan to add more stimulus to support growth in the world’s third-biggest economy. As the boost from rebuilding wanes, the nation will increasingly depend on

exports just as Europe’s sovereigndebt crisis and a slowdown in China cloud the outlook for global demand.

“The pace of a slowdown later this year will depend on how the European debt crisis will affect the yen and exports,” said Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. in Tokyo and a former BOJ official.

“The Bank of Japan may have little choice but to ease more — once every three months.”

The central bank increased its asset-purchase program for a

second time in three months on April 27. On the same day, BOJ board members predicted that consumer prices will advance 0.7 percent in the year to March 2014, compared with the central bank’s 1 percent price goal set in February.

Some lawmakers are urging more aggressive easing to offset fiscal tightening as Prime Minister Yoshihiko Noda struggles to convince lawmakers to double a 5 percent sales tax as part of efforts to contain the world’s largest public debt burden.

Noda has pledged more than 20

trillion yen (US$250 billion) to rebuild areas devastated by last year’s earthquake and tsunami.

Government incentives to buy fuelefficient cars such as tax waivers and rebates also gave a boost to consumer spending last quarter, lifting seasonally adjusted retail sales in January and February.

The government may end the subsidy program in June or July, weakening consumer spending, according to Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo.

Bloomberg

May 17, 2012 business daily | 11

ASIA

InBrief

Yen straining Japanese yards, Korea and China market share rising Exceptional Korean won depreciation relative to the yen extending the pain to other leading Japanese sectors

Philippines buying jets amid China row The Philippines may buy two squadrons of military jets for as much as US$1.6 billion, President Benigno Aquino said, as the country pushes to modernise its defences amid a territorial dispute with China.

The government could buy new training jets for between US$400 and US$800 million per squadron and upgrade the planes to fighters, Mr Aquino told yesterday. The seller would be a “progressive nation” and not the U.S., the Philippines’ main ally, he said. A squadron includes between 16 and 24 jets. “It may be from Europe, or somewhere nearer,” he told Bombo Radyo.

“That’s what the Armed Forces of the Philippines is studying to make it more economical.” Aquino’s administration has embarked on a plan to upgrade the country’s military, which currently has no viable fighter jets. The plan is part of efforts to better address external threats, which include increased tension with China over disputed waters in the South China Sea that are rich in fish, oil and gas.

Japan is loosing competitiveness to Korea and China

W Energy constraints in Japan Constraints on energy use and prospects for more gains in the yen made add to economic challenges.

Japan may impose rolling blackouts and electricity-savings targets this summer as utilities struggle to power factories and light homes with as many as 50 atomic plants offline. In Kansai, which accounts for about 20 percent of the economy and is the nation’s second-most important industrial heartland, consumers face the biggest limit on power use, the government says. The western region is home to Osaka, Kyoto and Kobe cities as well as the headquarters of Panasonic Corp., Sharp Corp. and Nintendo Co.

FDI dropping in Asia The sum of net foreign institutional equity purchases among six countries in Asia (India, Indonesia, Philippines, South Korea, Taiwan, Thailand and Vietnam) dropped in the past week by US$2.7 billion, bringing the total yearto-date net purchase down to US$23.4 billion. South Korea and Taiwan experienced the most selling, with net purchases falling

by US$1.1 billion and US$1 billion.

In the coming week, investors will likely continue to flee risky assets as confidence in the global economic recovery worsens.

ith the Japanese yen up 50 percent against the dollar in five years, shipbuilder Tsuneishi Holdings Inc. says the nation’s shipyards may find it impossible to make money as South Korean and Chinese rivals increase market share.

“Given the yen’s current level, a situation could occur in which no domestic shipyards can make a profit,” Chairman Yasuharu Fushimi said in an interview last month near Tsuneishi’s office in Hiroshima, Japan.

For Tsuneishi, Japan’s second-largest shipbuilder, the solution is to move most production to the Philippines and China, where wages are also lower. Others may have to follow to escape a yen whose increase has outpaced all other currencies against the dollar. A smaller 22 percent rise in the yuan and a 20 percent slide in the won have buoyed Chinese and South Ko-

rean shipbuilding.

South Korean shipyards received US$50.8 billion of contracts last year and those in China garnered US$21.1 billion, compared with just US$6.1 billion in Japan, according to Clarkson Plc, the world’s biggest shipbroker. Cost competitiveness is one reason why shares in South Korean shipbuilders such as Hyundai Heavy Industries Co., Samsung Heavy Industries Co. and Daewoo Shipbuilding & Marine Engineering Co. are worth buying, according to Seoul-based Tong Yang Securities Inc. “Most Asian currencies have depreciated against the yen, but the Korean won is exceptional because it has depreciated so much more,” said Robert Feldman, head of Japan economic research at Morgan Stanley in Tokyo and former International Monetary Fund economist.

“Japan basically has to work on two

fronts: to improve the productivity of the economy as a whole and to correct this misalignment of nominal exchange rates.” The won is down 47 percent against the yen in the past five years. Japanese yards make an average 15 percent loss on each ship built, while Korean companies earn a 5 percent profit, Lee Jae Won, an analyst at Tong Yang, said last week.

The pain extends beyond shipyards, hurting exporters such as Honda Motor Co. and Sony Corp. that helped spur Japan’s development following the end of World War II. The currency’s jump is adding to the nation’s struggle to escape a legacy of deflation and depressed growth after asset bubbles burst in the early 1990s. Lawmakers this year have intensified pressure on the Bank of Japan to increase the supply of yen to weaken it.

Bloomberg

Rupee sinks on Greek concerns Currency reaches a record low on risk of Greece’s exit from the Euro

I

ndia’s rupee fell to a record low as concerns about Greece leaving the euro bolstered demand for dollars and curbed appetite for emerging-market assets. The currency reached its weakest level since December. The Reserve Bank of India is closely observing the rupee’s movement and will do its best to curb volatility, central bank Deputy Governor H.R. Khan told reporters in Pokhara in Nepal yesterday. Separately, Deputy Governor K.C. Chakrabarty said

in Mumbai that the monetary authority will not intervene to protect any rupee level.

“Market pressures are pushing the rupee lower, considering the global risk-averse environment we have now,” said Ravi Ranjit, chief manager at Federal Bank Ltd. in Mumbai. “The Reserve Bank of India seems to be intervening and I think we will see regulatory measures to support the rupee.” It touched an all-time low of 54.32 yesterday and is down 6.2 percent this quarter,

Asia’s worst performance.

India’s “weak” economic fundamentals are pressuring the currency more than global factors, according to ING Vysa Bank Ltd. The trade deficit swelled to a record US$184.9 billion in the year ended March 31 and industrial output shrank 3.5 percent in March from a year earlier, government figures showed this month. Standard & Poor’s cut the outlook on the nation’s BBBsovereign debt rating to negative on April 25.

12 |

business daily May 17, 2012

PRICE

Day %

MARKETS Ticker NAME

Hang SENG INDEX Ticker NAME

PRICE

Day %

VOLUME

(H) 52W

(L) 52W

13

HUTCHISON WHAMPO

1398

IND & COMM BK-H

494

VOLUME

(H) 52W

(L) 52W 53.6

68.75

-2.48227

6393357

93.1

4.72

-1.871102

318076840

6.56

3.46

LI & FUNG LTD

14.18

-2.60989

36623578

20.15

10.82

1299

AIA GROUP LTD

26.4

-1.492537

50870728

29.9

19.84

66

MTR CORP

25.65

-0.3883495

3027504

28.8

22.45

2600

ALUMINUM CORP-H

3.22

-3.303303

22047180

6.99

3.19

17

NEW WORLD DEV

8.97

-3.444564

19195517

12.4

6.13

3988

BANK OF CHINA-H

2.89

-3.020134

485178352

4.35

2.2

857

PETROCHINA CO-H

10.12

-3.802281

74620189

11.92

8.59

3328

BANK OF COMMUN-H

5.24

-3.853211

31721709

7.409

4.15

2318

PING AN INSURA-H

59.3

-2.547247

13698751

83.8

37.35

23

BANK EAST ASIA

26.85

-5.623902

8142418

34.45

21.85

6

POWER ASSETS HOL

1880

BELLE INTERNATIO

13.34

-1.911765

25836282

17.54

11.38

83

SINO LAND CO

2388

BOC HONG KONG HO

22.45

-3.232759

21755626

24.65

14.24

16

SUN HUNG KAI PRO

293

CATHAY PAC AIR

12.06

-2.427184

9137506

19.34

11.8

19

1

CHEUNG KONG

94.3

-3.083248

7270882

122.4

79.1

1898

CHINA COAL ENE-H

7.56

-6.896552

46197376

11.66

6.59

939

CHINA CONST BA-H

5.31

-2.747253

360837947

7.36

4.41

2628

CHINA LIFE INS-H

18.58

-4.325438

44686186

28.1

17.04

144

CHINA MERCHANT

22.95

-1.923077

5203385

35

19

941

CHINA MOBILE

84.45

-3.650884

29453544

89.85

68.05

688

CHINA OVERSEAS

15.38

-3.875

21605558

17.86

9.99

386

CHINA PETROLEU-H

7.41

-2.755906

81141651

9.67

6.22

291

CHINA RES ENTERP

26.05

-6.797853

6293685

35.5

24

1109

CHINA RES LAND

13

-6.069364

11949200

15.6

7.28

836

CHINA RES POWER

13.74

1.928783

9786032

16.2

10.82

1088

CHINA SHENHUA-H

29.35

-4.084967

16606197

40.2

27.1

762

CHINA UNICOM HON

11.74

-6.528662

72848332

17.68

11.62

267

CITIC PACIFIC

11.8

-2.479339

5198952

23

10.26

2

CLP HLDGS LTD

63.95

-1.917178

5699770

75.2

62.1

883

CNOOC LTD

14.14

-3.547067

58614881

19.7

11.2

1500 1000

VOLUME

-0.7434944

73893485

CHINA YANGTZE-A

AIR CHINA LTD-A

6.01

-1.151316

16980808

ALUMINUM CORP-A

6.72

-2.749638

ANHUI CONCH-A

16.09

BANK OF BEIJIN-A BANK OF CHINA-A

NAME

NAME

CH

UN

0

MM

UR

CO

K MB OM

&C

INA

DAY %

2.67

IND

RO

PRICE

AGRICULTURAL-A

A

500

PET NAME

2500 2000

CH

Shanghai Shenzhen CSI 300

Unit: 109 HKD

OF

56

Hang Seng Chinenese Enterprises Index, , Top 10 companies by market capitalisation

NS

99.15

82.15

IN FOCUS

NK

175

25381600

INDEX 19259.83 52W (H) 23707.94 (L) 16170.35 MOVERS 1 47 0

NI

6974296

-2.424014

33.15

BA

-3.806228

66.45

59

E IN S

111.2

HSBC HLDGS PLC

4904647

GA

HONG KONG EXCHNG

5

-1.768868

LIF

388

41.65

PIN

16.68

WHARF HLDG

A

20.65

6.03

4

HU

12776846

9.78

INA

-2.029915

24153633

EN

18.34

-3.610503

CH

HONG KG CHINA GS

8.81

SH

56.8

3

WANT WANT CHINA

LEU

33.2

83.45

17.84

151

INA

52.95

2900895

139.8

26

RO

4020405

-5.615826

248.8

5594627

CH

-2.736318

73.95

5993292

-1.439206

PET

39.1

HENGAN INTL

-4.521739

19.86

INA

HENDERSON LAND D

1044

219.6

TINGYI HLDG CO

INA

12

TENCENT HOLDINGS

322

CH

84.4

700

OF

20.85

125

69.321

CH

33.55

1972556

102.199

AL

10143386

-2.182163

3819831

UR

-5.232558

103.1

-3.261503

NK

24.45

HANG SENG BK

83.05

BA

HANG LUNG PROPER

11

85.45

SWIRE PACIFIC-A

A

101

122

ULT

7.55

8148747

RIC

7.52

-1.064426

TB

16.24 31.35

8.482

88.3

NS

8752372 10168717

52.55

14.16

AG

-3.5 -5.539773

64.8

17688683

CO

9.65 13.3

2937907

-3.672788

INA

COSCO PAC LTD ESPRIT HLDGS

-1.538462

CO

1199 330

57.6 11.54

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

6.69

-0.2980626

16762834

PING AN INSURA-A

41.21

-2.322825

22180652

CITIC SECURITI-A

12.82

-1.611665

77064174

POLY REAL ESTA-A

12.66

-2.390131

16336560

20943613

CSR CORP LTD -A

4.68

-2.702703

27677615

QINGDAO HAIER-A

12.03

-1.393443

31856987

-2.425713

29818285

DAQIN RAILWAY -A

7.41

0.1351351

29741117

QINGHAI SALT-A

32.3

-1.85354

4637556

9.91

-1.588878

21275663

DATANG INTL PO-A

5.31

-2.925046

4370810

SAIC MOTOR-A

15.13

-0.5913272

13536652 28299141

3

-0.6622517

17474791

DONGFANG ELECT-A

21.61

-2.525936

9536434

SANY HEAVY INDUS

13.79

-3.633823

BANK OF COMMUN-A

4.68

-1.265823

53143724

EVERBRIG SEC -A

13.31

-1.407407

14571278

SHANDONG GOLD-MI

33.24

0.1204819

6128566

BAOSHAN IRON & S

4.79

-0.8281573

22073525

GD MIDEA HOLDING

13.64

-0.8

24803498

SHANG PHARM -A

12.17

-2.483974

10308025 75535741

BYD CO LTD -A

24.15

-0.2066116

2698947

2.53

-0.7843137

25336774

SHANG PUDONG-A

8.91

-1.438053

CHINA CITIC BK-A

4.27

-2.06422

18338147

GF SECURITIES-A

31.27

-2.918348

10770062

SHANGHAI ELECT-A

5.84

-1.517707

8205590

CHINA CNR CORP-A

4.17

-2.112676

27771891

GREE ELECTRIC

21.55

-1.643085

19922639

SHANXI LU'AN -A

26.05

-3.195838

11389103

GD POWER DEVEL-A

CHINA COAL ENE-A

9.03

-1.633987

8959588

GUIZHOU PANJIA-A

30.62

-0.6166829

6187131

SHANXI XINGHUA-A

73.31

-1.026056

1425988

CHINA CONST BA-A

4.51

-1.742919

75866306

HAITONG SECURI-A

9.81

-1.703407

73064771

SHANXI XISHAN-A

17.34

-0.6303725

20988892

CHINA COSCO HO-A

4.96

-2.362205

10509067

HANGZHOU HIKVI-A

SHENZ DVLP BK-A

15.76

-1.622971

15030511

CHINA CSSC HOL-A

34.01

-2.494266

6628120

7.4

-3.141361

13711308

CHINA EAST AIR-A

3.88

-2.267003

15.26

-3.172589

2110259

CHINA EVERBRIG-A

2.95

-1.993355

45.71

-0.9534128

1218325

HEBEI IRON-A

2.95

-1.006711

17186387

12932734

HENAN SHUAN-A

63.1

-0.5516154

1597445

50475240

HUATAI SECURIT-A

10.27

0.6862745

36187476

SUNING APPLIAN-A

9.71

-2.705411

40549264 1826712

SHENZEN OVERSE-A SINOVEL WIND-A

CHINA LIFE INS-A

17.62

-1.288515

8199080

HUAXIA BANK CO

10.36

-1.986755

29389293

TSINGTAO BREW-A

36.85

-0.9674819

CHINA MERCH BK-A

11.67

-1.435811

64746524

IND & COMM BK-A

4.3

-0.6928406

59407769

WEICHAI POWER-A

31.71

-0.1259843

5078476

CHINA MERCHANT-A

12.21

-1.927711

26038709

INDUSTRIAL BAN-A

13.4

-2.189781

46029165

WULIANGYE YIBIN

33.92

-2.163254

18926344

CHINA MERCHANT-A

22.35

-4.118404

7365460

INNER MONG BAO-A

43.78

1.624884

105902088

XINJIANG GUANG-A

26.75

-1.327923

8848588

CHINA MINSHENG-A

6.46

-1.823708

96380282

INNER MONG YIL-A

22.37

-0.9738822

8421284

YANGQUAN COAL -A

18.98

-2.366255

12090765

CHINA NATIONAL-A

6.36

-3.782148

18268420

INNER MONGOLIA-A

6.45

0.1552795

111769134

YANTAI CHANGYU-A

95.22

-2.117599

911306

CHINA OILFIELD-A

18.1

-3.053026

9928774

JIANGSU HENGRU-A

28.71

0.4197272

3027172

YANTAI WANHUA-A

13.91

-2.659202

6453373

CHINA PACIFIC-A

4653406

20.64

-1.854494

14101026

JIANGSU YANGHE-A

157

-2.211149

1371688

YANZHOU COAL-A

22.88

-1.633706

CHINA PETROLEU-A

6.94

-0.8571429

37420573

JIANGXI COPPER-A

24.97

-0.9912768

10978017

YUNNAN BAIYAO-A

51.35

-1.684855

3063739

CHINA RAILWAY-A

2.56

-1.915709

18974718

JINDUICHENG -A

13.59

-2.37069

7188069

ZHONGJIN GOLD

22.07

0.8683729

8252334

CHINA RAILWAY-A

4.17

-2.112676

14816175

JIZHONG ENERGY-A

CHINA SHENHUA-A

25.67

-1.078998

12430494

KWEICHOW MOUTA-A

CHINA SHIPBUIL-A

5.91

-1.5

27112138

CHINA SHIPPING-A

3.03

-2.258065

CHINA SOUTHERN-A

4.58

CHINA STATE -A

3.23

CHINA UNITED-A

4.15

CHINA VANKE CO-A

8.61

19.1

-1.546392

8850095

ZIJIN MINING-A

4.08

-1.449275

58878836

220.02

-1.384967

2813954

ZOOMLION HEAVY-A

9.69

-3.1

46339179

LUZHOU LAOJIAO-A

42.62

-1.570439

5779834

ZTE CORP-A

16.47

-2.659574

10699361

10273461

METALLURGICAL-A

2.57

-0.7722008

13082309

-1.505376

23406416

NARI TECHNOLOG-A

20.59

-2.739726

6083606

-0.9202454

56811384

NINGBO PORT CO-A

2.56

0.3921569

23792143

-0.7177033

65701302

PANGANG GROUP -A

7.91

0

64223204

-3.367003

44284255

PETROCHINA CO-A

9.52

-0.8333333

25384494

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

INDEX 2574.64 52W (H) 3154.935 (L) 2254.567 MOVERS 27 263 10

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

CHINA LONGYUAN-H

4.83

-2.424242

9863436

PETROCHINA CO-H

10.12

-3.802281

74620189

CHINA MERCH BK-H

14.68

-3.421053

20488693

PICC PROPERTY &

9.22

-4.554865

25894103

CHINA MINSHENG-H

7.16

-6.159895

40592287

PING AN INSURA-H

59.3

-2.547247

13698751

CHINA NATL BDG-H

8.81

-4.446855

75124876

SHANDONG WEIG-H

8.22

-3.971963

2636000

17.92

-0.9944751

4800160

47.9

-0.2083333

1578500

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.27

-1.801802

191566722

AIR CHINA LTD-H

5.17

-1.52381

21726000

CHINA OILFIELD-H

10.44

-2.61194

11400000

SINOPHARM-H

ALUMINUM CORP-H

3.22

-3.303303

22047180

CHINA PACIFIC-H

22.7

-1.943844

16181400

TSINGTAO BREW-H

CHINA PETROLEU-H

7.41

-2.755906

81141651

WEICHAI POWER-H

32.7

-2.82318

982820

5.2

-4.761905

16339000

YANZHOU COAL-H

13.66

-5.532503

31708575

ANHUI CONCH-H

22.05

-3.71179

14394475

BANK OF CHINA-H

2.89

-3.020134

485178352

CHINA RAIL CN-H CHINA RAIL GR-H

BANK OF COMMUN-H

5.24

-3.853211

31721709

2.57

-4.460967

22189079

ZIJIN MINING-H

2.31

-4.938272

66604345

15.98

-4.081633

4745000

CHINA SHENHUA-H

29.35

-4.084967

16606197

ZOOMLION HEAVY-H

9.78

-5.232558

18839070

CHINA CITIC BK-H

4.23

-5.369128

90802500

CHINA TELECOM-H

3.81

-4.75

88750082

ZTE CORP-H

16.88

-3.981797

4281892

CHINA COAL ENE-H

7.56

-6.896552

46197376

DONGFENG MOTOR-H

13

-4.411765

11333153

CHINA COM CONS-H

6.41

-5.037037

14413200

GUANGZHOU AUTO-H

6.26

-4.281346

6880708

CHINA CONST BA-H

5.31

-2.747253

360837947

HUANENG POWER-H

4.55

-1.515152

15550000

CHINA COSCO HO-H

3.42

-3.661972

34342417

IND & COMM BK-H

4.72

-1.871102

318076840

18.58

-4.325438

44686186

JIANGXI COPPER-H

15.98

-6

29467614

NAME

PRICE DAY %

Volume

32 -0.9287926

4808236

SINOPAC FINANCIA

9.39

-2.995868

0.2928258

9326577

SYNNEX TECH INTL

69

-2.542373

4485312

16.85 -0.8823529

18913749

TAIWAN CEMENT

32.3

-1.374046

13820255

BYD CO LTD-H

CHINA LIFE INS-H

FTSE TAIWAN 50 INDEX NAME

FAR EASTERN NEW FAR EASTONE TELE

PRICE DAY %

Volume

FIRST FINANCIAL

68.5

INDEX 10084.59 52W (H) 13317.51 (L) 8058.58 MOVERS 0 40 0

NAME

PRICE DAY %

Volume 13328295

FORMOSA CHEM & F

79.7

0.8860759

8476622

TAIWAN COOPERATI

17.2

-1.994302

5639472

-2.073365

16336218

FORMOSA PETROCHE

85

-4.063205

3433388

TAIWAN FERTILIZE

68.6

-1.719198

3096994

ADVANCED SEMICON

28.45 -0.6980803

26808230

FORMOSA PLASTIC

77

-1.282051

8905671

TAIWAN GLASS IND

28.4

-1.045296

1774619

ASIA CEMENT CORP

33.15

-2.643172

6269909

FOXCONN TECHNOLO

95.1

0.4223865

13614397

TAIWAN MOBILE CO

97.8

-0.102145

7526316

ASUSTEK COMPUTER

294

-5.16129

5164144

FUBON FINANCIAL

29.1

-1.188455

18728831

TPK HOLDING CO L

370 -0.9370817

AU OPTRONICS COR

12.4

-1.976285

51337355

HON HAI PRECISIO

82.8

-3.044496

58824903

TSMC

83.4

-2.45614

UNI-PRESIDENT

45.3

-1.414581

8468782

UNITED MICROELEC

13.8

-4.49827

48718612

ACER INC

CATCHER TECH

30.7

5026034 64970478

180

-5.759162

21541737

HOTAI MOTOR CO

174

-4.395604

1245700

CATHAY FINANCIAL

28.85

-2.533784

20606208

HTC CORP

411

-6.590909

13938588

CHANG HWA BANK

15.45

-2.523659

11017919

HUA NAN FINANCIA

15.85

-1.857585

9957157

WISTRON CORP

40.8

-2.857143

10100022

71.8 -0.4160888

8701186

LARGAN PRECISION

504

1.306533

4569552

YUANTA FINANCIAL

12.5 -0.7936508

25984483

2.136752

42979035

LITE-ON TECHNOLO

35.15

-2.361111

4370188

YULON MOTOR CO

46.8

7.19 -0.5532503

57234519

MEDIATEK INC

262

-2.60223

5997461

21

CHENG SHIN RUBBE CHIMEI INNOLUX C CHINA DEVELOPMEN CHINA STEEL CORP

11.95

18987977

MEGA FINANCIAL H

-3.225806

26368875

CHINATRUST FINAN

17.3

28 -0.8849558 -4.155125

43769013

NAN YA PLASTICS

56.5 -0.1766784

6082420

CHUNGHWA TELECOM

90.3

-1.203501

12265943

PRESIDENT CHAIN

156

-1.886792

1122405

COMPAL ELECTRON

31.2

-5.311077

11206926

QUANTA COMPUTER

80.6

-2.30303

7310964

DELTA ELECT INC

90.6

-4.831933

9145312

SILICONWARE PREC

31.8

-4.360902

10613347

-2.5

INDEX 4983.91 52W (H) 6247.96 (L) 4643.05 MOVERS 5 42 0

5622278

May 17, 2012 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GAlAXy ENtERtAINMENt

Max 20.35

Average 20.08

MElCo CRoWN ENtERtAINMENt

Min 19.90

20.4

34.5

13.10

20.3

34.2

12.92

20.2

33.9

12.74

20.1

33.6

12.56

20.0

33.3

12.38

19.9

last 19.90

Max 34.50

SANDS CHINA ltD

Max 26.65

Average 26.35

Average 33.38

Min 33.00

last 33.05

Min 26.00

last 26.15

26.48

14.9

19.38

26.36

14.8

19.26

26.24

14.7

19.14

26.12

14.6

19.02

26.00

14.5 Max 14.98

Average 19.03

Min 14.64

CHF

GBP

CNY

MOP

JNY

PRICE

DAY % YTD %

(H) 52W

(L) 52W

last 19.00

in

DAY %

YTD %

(H) 52W

(L) 52W

AUD

0.9915

-0.8004

-2.8798

1.1081

0.9388

5

GBP

1.5968

-0.4985

2.7343

1.6618

1.5235

4

CHF

0.9441

-1.0062

-0.6355

0.9596

0.7071

EUR

1.2721

-1.0116

-1.8517

1.4697

1.2624

JPY

80.35

-0.5352

-4.2813

84.18

75.35

MOP

8.0024

-0.0425

-0.035

8.0449

7.9823

1

HKD

7.7692

-0.0412

-0.0232

7.8113

7.7529

0

CNY

6.3218

-0.0601

-0.4239

6.5073

6.2769

INR

54.205

-0.7564

-2.1031

54.465

43.855

THB

31.49

-0.4763

0.1905

31.96

29.63

-2

SGD

1.2684

-1.017

2.2233

1.3199

1.1992

-3

TWD

VOLUME CRNCY

2.91

-2.020202

32.27272

3.25

1.88

4092947

8.86

-1.555556

9.517921

9.29

7.45

1860867

AMAX HOLDINGS LT

0.08

-2.439024

-8.045974

0.131

0.06

11742000

BOC HONG KONG HO

22.45

-3.232759

22.01087

24.65

14.24

21755626

CENTURY LEGEND

0.233

0

1.304346

0.41

0.204

0

3.1

-0.6410256

10.71429

4.79

2.3

149 21605558

CHINA OVERSEAS

15.38

-3.875

18.48999

17.86

9.99

CHINESE ESTATES

10.62

-1.666667

-15.04

14.1

10.2

196500

CHOW TAI FOOK JE

10.54

-9.605489

-24.28161

15.16

10.44

19045501

EMPEROR ENTERTAI

1.19

-3.252033

7.207206

2.09

0.97

470000

FUTURE BRIGHT

0.91

-4.210526

116.6667

1.09

0.3

3078000

19.9

-4.784689

39.74719

24.95

8.69

24341996

103.1

-2.182163

11.8828

125

84.4

1972556

HOPEWELL HLDGS

20.2

-0.2469136

1.711981

24.903

18.56

935803

HSBC HLDGS PLC

66.45

-2.424014

12.62712

82.15

56

25381600

HUTCHISON TELE H

3.42

-1.156069

14.38127

3.6

2.13

9777010

LUK FOOK HLDGS I

17.4

-3.867403

-35.79336

46.15

17.2

2462503

6.6

-4.347826

14.38475

10.76

4.3

4788806

MGM CHINA HOLDIN

12.66

-2.012384

31.98287

17.183

7.6

26888000

MIDLAND HOLDINGS

3.55

-6.332454

-12.12871

5.48

2.95

4057004

NEPTUNE GROUP

0.102

-1.923077

-8.108109

0.157

0.08

312500

NEW WORLD DEV

8.97

-3.444564

43.29073

12.4

6.13

19195517

SANDS CHINA LTD

26.15

-4.909091

19.13439

33.05

14.9

25562212

SHUN HO RESOURCE

1.18

-0.8403361

18

1.32

0.82

0

SHUN TAK HOLDING

2.78

-3.806228

8.63074

4.686

2.241

8395725

SJM HOLDINGS LTD

14.7

-2.519894

17.54794

20.711

10.079

14406835

SMARTONE TELECOM

14.2

-3.13779

5.654765

18.5

9.8

1259337

WYNN MACAU LTD

19

-4.714142

-2.564103

27.48

14.807

16529505

ASIA ENTERTAINME

5.06

-1.747573

-13.94558

10.8692

4.72

56584

BALLY TECHNOLOGI

46.47

1.021739

17.46713

49.32

24.74

306552

BOC HONG KONG HO

2.92

0

21.80941

3.15

1.81

2220

2.67

0.3759398

42.78075

3.24

1.08

7905

INTL GAME TECH

14.41

-1.972789

-16.22093

19.15

13.38

3082668

JONES LANG LASAL

75.04

-0.1330849

22.49429

99.89

46.01

423047

LAS VEGAS SANDS

48.8

-1.014199

14.20548

62.09

36.08

11300279

MACAU CAPITAL IN

N/A

N/A

N/A

0.11

0.11

0

MELCO CROWN-ADR

12.8

-1.500577

33.05613

16.15

7.05

7749045

MGM CHINA HOLDIN

1.65

0

38.45846

2.21314

1.00254

695

MGM RESORTS INTE

11.01

-1.166966

5.560879

16.05

7.4

11003947

SHUFFLE MASTER

15.92

2.051282

35.83617

18.77

7.35

371168

1.95

3.174603

21.30088

2.60368

1.26239

250

106.45

-1.517254

-3.656438

165.4931

101.02

2604899

WYNN RESORTS LTD

verageM

PRICE MAJORS

CROWN LTD

SJM HOLDINGS LTD

MaxA

CURRENCY EXCHANGE RATES

ARISTOCRAT LEISU

GALAXY ENTERTAIN

18.90

last 14.70

ASIA PACIFIC

MACAU RELATED STOCKS

MELCO INTL DEVEL

12.20

last 12.66

19.50

-1

HANG SENG BK

Min 12.38

15.0

2

GALAXY ENTERTAIN

Average 12.68

WyNN MACAU ltD

3

CHEUK NANG HLDGS

Max 13.12

26.60

Euro exchange rates with select currencies Year-to-date changes (%)

NAME

33.0

SJM HolDINGS ltD

IN FOCUS

USD

MGM CHINA HolDINGS

CROSSES

AUD HKD

29.616

-0.4558

2.2387

30.716

28.562

PHP

43

-0.7023

1.9535

44.35

41.879

IDR

9244

-0.0433

-1.8931

9398

8458

AUDJPY

79.662

0.2724

-1.544

88.637

72.057

EURCHF

1.20105

-0.0008

1.3105

1.26462

1.00749

EURGBP

0.79667

0.5247

4.6092

0.90835

0.79505

EURCNY

8.0512

0.8645

1.0309

9.514

7.9674

EURMOP

10.1812

0.9734

1.6776

11.7768

10.1031

EURJPY

102.21

0.4892

-2.4949

117.9

97.04

1.03

0

0.0097

1.0311

1.0288

HKDMOP

World Stock MarketS - Indices COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

NAME

US

12632

-0.4990016

3.39217

13338.66016

10404.49

NASDAQ COMPOSITE INDEX

US

2893.76

-0.3038676

11.07845

3134.17

2298.89 4791.01

FTSE 100 INDEX

GB

5382.87

-1.006874

-3.399142

6084.08

DAX INDEX

GE

6340.23

-0.9503114

7.491585

7523.53

4965.8

NIKKEI 225

JN

8801.17

-1.118671

4.089959

10255.15

8135.79

HANG SENG INDEX

HK

19259.83

-3.189254

4.477715

23707.94922

16170.35

CSI 300 INDEX

CH

2574.647

-1.632438

9.758321

3154.935

2254.567

TAIWAN TAIEX INDEX

TA

7234.57

-2.177905

2.297623

9089.47

6609.11

KOSPI INDEX

SK

1840.53

-3.076947

0.8100846

2192.83

1644.11

S&P/ASX 200 INDEX

AU

4165.528

-2.361497

2.686199

4763.9

3765.9 3217.951

JAKARTA COMPOSITE INDEX

USD

ID

3980.496

-1.610325

4.147161

4234.734

FTSE Bursa Malaysia KLCI

MA

1536.04

-1.603387

0.3468972

1609.33

1310.53

NZX ALL INDEX

NZ

785.124

-0.4152725

7.580667

814.431

700.441 2695.06

PHILIPPINES ALL SHARE IX

PH

3243.76

-1.619576

6.526021

3518.96

HSBC Dragon 300 Index Singapor

SI

552.42

0.34

11.3

na

na

STOCK EXCH OF THAI INDEX

TH

1168

-1.397155

13.91566

1247.72

843.69

HO CHI MINH STOCK INDEX

VN

449.91

-1.259739

27.97896

492.44

332.28

Laos Composite Index

LO

1032.22

0

14.75996

1195.56

876.33

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

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14 |

business daily May 17, 2012

Opinion

Is Europe on a cross of gold?

Barry Eichengreen

I

Professor of Economics and Political Science at the University of California, Berkeley

ncreasingly, one hears predictions that the euro will go the way of the gold standard in the 1930’s. And, increasingly, the reasoning behind such forecasts seems persuasive.

But does that mean that the euro doomsayers are right?

Following the 1929 stock market crash, Europe was hit by a massive deflationary shock. Output collapsed and unemployment soared. Unable to agree on coordinated reflationary action, governments opted to move unilaterally. One after another, they abandoned the gold standard, depreciating their currencies.

By loosening credit in this way, they recovered, one after another, from the Great Depression.

Today, Europe has been hit again by a massive deflationary shock. This time, the constraint on reflationary action is the euro. Governments lack a national currency to depreciate, and lack the power to relax credit, having delegated monetary policy to the European Central Bank. As unemployment again rises to catastrophic heights, they will have no alternative, it is said, but to abandon the euro unilaterally.

I wrote the book on Europe and the gold standard. Literally. In Golden Fetters: The Gold Standard and the Great Depression, published in 1992, I argued that the de-

flationary engine that was the gold standard was a key cause of the 1930’s depression, and that abandoning it opened the door to recovery.

Yet I am reluctant to believe that things will turn out the same way this time. Four differences lead me to believe that maybe – just maybe – the euro will survive.

The differences today First, mounting an appropriate monetary response is easier when you have a single central bank. Under the gold standard, it still would have been possible for central banks to reflate their depressed economies had they moved together. Unfortunately, getting central banks to move together is easier said than done. Central bankers speak different languages. They view economic prospects through different lenses.

By contrast, were the ECB to adopt decisive measures, it could reflate the entire eurozone and obviate the need for countries to act unilaterally. But, while the ECB has the capacity, the question remains whether it is has the will.

A second difference is that, notwithstanding recent cuts in social programs, the unemployed receive more extensive public support than in the 1930’s. This makes

populist pressure to abandon the euro correspondingly less severe – the key questions, of course, being how much less severe, and whether the political center can hold.

A third difference is that the political preconditions for a cooperative response are better today. In 1931, France refused to help stem the Central European financial crisis because it believed that Germany was rearming, in violation of the Treaty of Versailles, signed at the end

Unfortunately, there is growing evidence that the medicine on which European countries have agreed – austerity – is killing the patient

of World War I. Political tensions between France and Germany may very well grow in the coming months and years, following François Hollande’s victory in the French presidential election, but they will not begin to rise to that level.

Moreover, European countries today are prepared to go to great lengths to save the euro, fearing that its collapse would jeopardise their single market. By contrast, when countries started abandoning the gold standard in 1931, tariff barriers had already gone up. There was no longer a single market to protect.

Finally, abandoning the gold standard was less disruptive than abandoning the euro would be. Reintroducing national currencies today would take weeks, at a minimum, whereas Britain in 1931 could take sterling off gold while the markets were closed for the weekend. Back then, countries still had their national currencies; they could simply stop supporting them.

Bank deposits, along with most other private and public debts, were denominated in that national currency.

Cooperation easier Today, these assets and liabilities are all in euros. Reintroducing the national currency in order to depreciate it, but leaving the euro value

of other financial instruments untouched, would destroy balance sheets and wreak financial havoc. The alternative – converting those other instruments into the new national currency – would tie up the offending country in litigation for years.

Each of these differences casts doubt on the notion that the euro will go the way of the gold standard. But a fifth difference points in the other direction. In the 1930’s, countries could not act together because they could not agree on a diagnosis of the problem. Each attributed the Great Depression to different causes, leading them to prescribe different remedies, which they administered unilaterally.

Agreement today on the diagnosis facilitates mounting a common response. Unfortunately, there is growing evidence that the medicine on which European countries have agreed – austerity – is killing the patient. There is now talk of adjusting the dosage, but talk has not yet given way to action.

Will things turn out differently this time? There is no question that the greater scope for cooperation that exists today bodes well for the euro. But it is the precise policies on which European governments cooperate that will tell the tale. © Project Syndicate

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Chief REPORTER Vitor Quintã Newsdesk Cláudia Aranda, Kristy Chan, Kelsey Wilhelm, Cherry Lee, Terina Cao, Tony Lai Creative Director José Manuel Cardoso Designer Janne Louhikari Photography Carmo Correia, John Si, 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 17, 2012 business daily | 15

OPINION If Greece quits euro, wires its ruin will be pointless Business Leading reports from Asia’s best business newspapers

Taipei Times

Taiwan’s Agency Against Corruption on Tuesday launched an investigation into a public procurement scandal relating to Taiwan Power Co’s (Taipower) construction of the Fourth Nuclear Power Plant.

The agency said in a press statement that Taipower held a public bid for procuring some parts for construction of the plant in Gongliao District, New Taipei City, in 2007 with a budget of about NT$445 million (now US$1.5 million). It said a probe into the bidding process had uncovered possible violations of the Government Procurement Act and that Taipower was suspected of helping contractors profit from the bid. Three prosecutors led more than 40 agents in raids of five locations, including Taipower headquarters, plant offices and contractors’ offices, the agency said.

Strait Times

New private home sales in Singapore last month were the strongest in nearly three years, with 2,487 units sold.

April’s home sales were up 4 per cent from March, and were the highest monthly level since 2,772 units were sold in July 2009.

The figures do not include executive condominiums, a public-private housing hybrid. Including executive condominiums, buyers snapped up 2,660 homes last month. Analysts say the growth was due partly to the ongoing popularity of smaller, more affordable so-called shoebox apartments. The first three months of the year had recorded a robust average of more than 2,200 homes sold each month.

Business Inquirer

Bank lending continued to rise in March, posting an 18.7-percent growth to Php2.82 trillion (US$65.7 billion) from P2.37 trillion a year ago. The Philippine Central Bank said the robust growth in credit would support higher consumption and investments that the domestic economy needed to counter the adverse impact of unfavourable developments offshore. Growth in loans benefited both enterprises and individual borrowers, the central bank said.

“The sustained growth in bank lending is expected to support real estate sector activity in the months ahead,” BSP Governor Amando Tetangco Jr. said in a statement. The data showed that outstanding loans to businesses reached P2.57 trillion, up by 19.3 percent from P2.15 trillion a year ago.

Clive Crook

Bloomberg View columnist

T

he chaos in Greece has resumed and a new election that nobody expects to resolve anything looms. Exasperated European Union officials have begun openly discussing the country’s exit from the euro currency system. This is a grave mistake.

Greece’s exit would be no less catastrophic than when the EU called it unthinkable – and not just for Greece.

“Divorce is never smooth,” Luc Coene, the governor of Belgium’s central bank and a member of the European Central Bank’s governing council, told the Financial Times on May 13. “I guess an amicable divorce – if that was ever needed – would be possible but I would still regret it.”

Amicable? That’s one thing Greece’s exit from the euro couldn’t be. As the economist Barry Eichengreen, the leading authority on these matters, has argued, it would provoke “the mother of all financial crises.” The contemplation of this possibility by EU leaders is making matters even worse. Greece has no chance of recovery while this danger hangs over its economy.

Devaluation’s other side Departing a currency zone under pressure is not the same as being forced off a currency peg – which, though painful, can be better than the alternative.

Contracts would have to be redenominated and euro banknotes would have to be over-stamped before a new currency could be printed and circulated. That takes time, and since a huge devaluation is part of the formula, rigorous capital controls would have to be imposed on a country fully integrated into the wider EU economy.

Bankruptcies would cascade through the system and the Greek economy, at least for a time, would shut down.

Devaluation would restore competitiveness – but to what end? Greece has a small export sector reliant

So Greece’s exit from the euro area would demand countervailing assurances that the rot stops there. The measures that would have stopped things ever getting this bad would finally have to be taken up

on tourism. (Care for a Greek vacation under these circumstances? See the Parthenon.

Watch a society collapse.)

The other side of a devaluation – and a necessary condition for its success – is higher import prices and hence lower real wages. But resistance to the latter is why Greece is rejecting “austerity” to begin with. Once Greece has its own currency again, it can resist falling living standards by printing money. That would neutralise the gain in competitiveness and lead, in the worst case, to hyperinflation.

Advocates of an exit are saying, in effect, that if Greece were well governed, it could avoid that outcome. It could clear its debts through comprehensive default (as opposed to the partial default it has already tried); restart its banking system from scratch; eliminate its primary budget deficit through orderly spending cuts and tax increases; submit to lower real wages; and (eventually) restore its economy to health. Possibly.

But if Greece were well governed, we wouldn’t be having this conversation.

You might therefore say, tough luck on Greece. Let it collapse and see what happens. That would be a salutary experience for the Greeks, and would teach others not to go the same way. The problem is that the effects of political and economic breakdown in Greece would spread much further.

Coene and other officials have been saying that Europe’s fi-

nancial defences could withstand Greece’s exit and full default. It has been true all along that Greece is small enough to pose no systemic threat in its own right to the wider EU economy. That’s why the EU’s decision to allow this crisis to persist and worsen is such an amazing case of incompetence and irresponsibility.

Contagion’s two channels The threat to Europe was never Greece, but Europe’s mismanagement of Greece. The big problem, getting bigger all the time, is the failure to deal with that small problem.

There are two main channels of contagion from a Greek exit. One runs through Greek debts to foreigners. This is probably manageable, even though the EU’s assurances about the soundness of its banks and the adequacy of its preparations are, on the evidence to date, grounds for panic rather than confidence.

Certainly the EU’s wider financial system has had time to prepare.

The real danger is through the second channel. If Greece can exit the euro, why not Portugal? Why not Spain? Why not Italy? Even if the consequences of a Greek exit are as horrendous as I’m saying, those outcomes will no longer be “unthinkable.”

The breakup of the entire euro system will become a choice, however unattractive, rather than something that just can’t happen.

This means, among other things, faster capital flight from distressed peripheral countries to the core – compounding their difficulties and making their exit that much more likely. Investors have already started discussing how much smaller the euro system might need to be.

Here we come to the great irony in all this. The EU will surely strive to prevent the breakup of the wider euro system. Its leaders know that if the euro falls apart, the unravelling of the EU – again unthinkable, until now – becomes distinctly possible. So far, the EU’s political momentum has always pushed it toward closer union.

A splintering of the euro system would be the first time the EU had responded to a crisis by undoing earlier commitments rather than building on them. That’s a bad habit to get into.

So Greece’s exit from the euro area would demand countervailing assurances that the rot stops there. The crucial innovations that Germany and its allies in austerity have resisted so far – jointly guaranteed euro bonds, and the European Central Bank as a lender of last resort for distressed sovereign borrowers – would have to be adopted.

The measures that would have stopped things ever getting this bad would finally have to be taken up.

Greece’s ruin will have been for nothing, except to serve as an example to others. Likewise the distress in Spain and other peripheral countries.

Steps toward full fiscal union will have been taken not because Europe’s citizens want them, not as a measured response to the crisis, but far too late, out of desperation after everything else had failed, with a correspondingly increased risk of failure.

The EU will have shown that it cracks under pressure, which won’t be forgotten. And this is assuming all goes well.

Gaze on your works, Angela Merkel, and despair.

Bloomberg View

16 |

business daily May 17, 2012

CLOSING Bank of England cuts growth forecasts

China’s Sina swings into loss Sina Corp, China’s largest internet portal and media website, has swung to a loss in the first three months of the year. Its first quarter net loss was US$13.7 million compared with a profit of US$15 million in the same period last year. The company said advertising revenue jumped 9 percent, however that was outpaced by rising costs, mostly on its Twitter-like microblogging site Weibo. Sina makes most of its revenue from online advertising and analysts said the Chinese online advertising market has been softening. Sina also blamed slowing economic growth in China for its losses.

The Bank of England yesterday cut its forecast for British growth and warned that the eurozone debt crisis was the biggest threat to recovery. Gross domestic product (GDP) was predicted to grow by just under 1.0 percent this year, down from the central bank’s previous forecast of just over 1.0 percent, the Bank of England said in a quarterly report. It also slashed the 2013 growth estimate to 2.0 percent, down from previous guidance for 3.0-percent expansion. Annual inflation was forecast to remain stubbornly above the central bank’s 2.0-percent target until mid-2013.

Facebook boosts IPO size by 25pct Social network company could raise as much as US$16 billion

F

acebook Inc increased the size of its initial public offering by almost 25 percent, and could raise as much as US$16 billion as strong investor demand for a share of the No.1 social network trumps debate about its long-term potential to make money.

Facebook, founded eight years ago

by Mark Zuckerberg in a Harvard dorm room, said on Wednesday it will add about 84 million shares to its IPO, floating about 421 million shares in an offering expected to be priced today.

The additional shares will be sold by early investors including PayPal co-founder Peter Thiel, Accel Partners’ James Breyer and investment manager Tiger Global Management, the company said in a filing.

The company itself has not increased the number of shares it will sell.

Mr Zuckerberg’s voting power will be reduced to about 55.8 percent from about 57.3 percent after the IPO as a result of the issue of additional shares, the company said.

The expanded size, coupled with Facebook’s recently announced plans to raise the IPO price range, would make Facebook the third-largest initial share sale in U.S. history after Visa Inc and General Motors.

The social networking company is drumming up massive demand for the offering even as slowing revenue and user growth spur questions

about the long-term Facebook story.

Those concerns over revenue growth were underscored on Tuesday, when GM said it planned to pull out of advertising on Facebook.

“This is much more a spectacle, a media event and a cultural moment than it is an IPO,” said Max Wolff, an analyst at GreenCrest Capital.

“This is not a game of models and fundamentals at this point.”

GM’s announcement, while ill-timed for Facebook, should not seriously hurt the IPO’s reception for now as it may not be representative of advertisers’ overall attitude, said Brian Wieser, an analyst with Pivotal Research Group.

“The demand for the IPO probably won’t be affected materially by this,” he said, adding, however, there were probably a lot of calls between underwriters and investors following GM’s announcement.

The IPO, Silicon Valley’s largest, eclipses the roughly US$2 billion debut by Google Inc in 2004.

Target price up Facebook raised the target price range to US$34-US$38 per share in response to strong demand, from US$28-US$35, according to a Tuesday filing. That would value the company at US$93-US$104 billion, rivalling the market value of Internet powerhouses such as Amazon.com Inc, and exceeding

Facebook is scheduled to begin trading on the Nasdaq tomorrow that of Hewlett-Packard Co and Dell Inc combined.

The increased price range made it very unlikely that Facebook shares would double on their trading debut as they might have if the company had come out at the low end of its initial price range, Mr Wolff said.

He expects a first-day gain of about 10 percent.

“No rational person thought they were buying the stock for US$28,” said Wedbush Securities analyst Michael Patcher, noting Facebook had traded as high as US$44 in the secondary markets in recent months.

Facebook said in Tuesday’s filing that it arrived at the higher IPO price range after one week of marketing the offering – part of a cross-country roadshow in which chief executive Zuckerberg has taken the stage to lay out his vision for the company’s money-making potential and its top priorities.

Facebook is scheduled to begin trading on the Nasdaq tomorrow.

A host of Wall Street banks are underwriting the offering, with Morgan Stanley, JPMorgan and Goldman Sachs serving as leads.

Reuters

Gold attraction loosening, dollar gets a boost American currency recovers as a reserve value asset

I

nvestors are reducing gold holdings for a third month, the longest stretch since 2004, and favouring the dollar as a haven from Europe’s debt crisis, even as Goldman Sachs Group Inc. predicts record prices for the metal.

Bullion erased its gains for 2012 this week as the dollar rose against a basket of currencies for a record 12 straight days. Gold held in exchange-traded products fell 30.8 metric tons since reaching a record 2,410.2 tons on March 13, data compiled by Bloomberg show. Royal Bank of Scotland Plc, ABN Amro Bank NV and Barclays Plc cut their forecasts in May, though Goldman expects prices to rise 26 percent to US$1,940 an ounce in 12 months.

Gold rallied for 11 consecutive years and prices rose more than sevenfold, with demand accelerating in 2008 Investors again favouring the dollar as a haven amid the global recession. Now, mounting concern that Greece may for faster U.S. growth are boosting the bullion to some investors seeking to exit the 17- nation euro and prospects dollar, making it more attractive than protect their wealth. Hedge funds are

the least bullish on the metal since December 2008.

“Gold is just another risk asset,” said Michael Aronstein, the president of Marketfield Asset Management in New York, who predicted the 2008 slump that drove commodities down 66 percent in seven months and then the rebound in 2009. “It made you a lot of money if you took the risk eight or 10 years ago. A real safe haven would be a pile of highdenomination Swiss franc or dollar notes, stored in a safety deposit box.”

The Dollar Index, a gauge against six major trading partners, added 1.4 percent after retreating as much as 2.6 percent. Treasuries returned 1 percent, a Bank of America Corp. index shows. Bullion slid as much as 21 percent from its intraday record in September, the common definition of a bear market. On a closing basis, futures need to settle at US$1,513.52 an ounce to record a 20 percent drop from its August peak.