Macau Business Daily, May 21, 2012 by Business Daily

Year I - Number 36 - Monday May 21, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

Curtain delayed on La Scala drama

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China rewards/risks for Weng Hang – Fitch Page 3

CasinoLeaks–Macau

‘YOUR PROBLEM NOW OUR PROBLEM’ T

he public voice of casinoleaks–macau. com has spoken at length – for the first time – to the Macau media about the aims of the website. “… if there were no Americans in Macau and Macau gaming did not influence regulations in the U.S., I wouldn’t care about triads, Stanley Ho and all these people. I would say it’s your problem, but it’s now our problem,” Jeff Fiedler told Business Daily in

a wide-ranging interview. Mr Fiedler of the International Union of Operating Engineers – which has thousands of members in the U.S. casino industry – admitted so far the unionbacked website had been less about leaks and more about revealing publicly-available information on Las Vegas operators’ ties with known or suspected gangsters in Macau to put pressure on U.S. regulators. “These are

powerful corporations that if left to regulate themselves won’t,” he stated. He sees the problem as triad-organised criminal influence over Macau VIP gaming rooms – putting him in direct conflict with the Macau government and Manuel Joaquim das Neves, director of the city’s Gaming Inspection and Coordination Bureau. Mr Neves told Reuters in March 2011: “I cannot say that in Macau

MGM Resorts – house wins suits

we don’t have triads, but things are under control.” But CasinoLeaks-Macau disagrees. “In Macau, unless you go to jail, you’re suitable [to run gaming]. It’s very different from regulations in the rest of the world.” But Mr Fiedler also admitted: “I don’t think we’re going to have any dramatic effect on how Macau operates. I think people exaggerate the potential of our effect.” More on pages 4 & 5

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HANG SENG INDEX

Officials make light work of idle plots

19000

The government has reiterated it won’t allow two pieces of land at Patane to be parlayed into one scheme as repeatedly requested by developers – suggesting the ‘old’ way of doing Macau business really is in the past. An official says the authorities “do not rule out” taking back the lots – which have lain idle since they were purchased in 2008 by interests linked to one of Macau’s powerbrokers and his brother.

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May 18

HSI - Movers

Taxi price hike near triple inflation

Name

The basic cost of hiring a Macau cab is likely to rise 15 percent in July – nearly triple the city’s 12-month inflation rate of 6.12 percent. The flag fall price is likely to rise two patacas (US$0.25) to 15 patacas the Transport Bureau said. But taxi companies said it’s too little, too late, pointing out the previous hike was in September 2008. Page 6

Affordable flats more so in govt slip

%Day

POWER ASSETS HOL

1.66

CLP HLDGS LTD

1.02

HENGAN INTL

0.78

CNOOC LTD

0.56

WANT WANT CHINA

0.33

HSBC HLDGS PLC

-3.12

CHINA SHENHUA-H

-3.41

CHINA RES ENTERP

-3.55

NEW WORLD DEV

-4.02

ESPRIT HLDGS

-4.12

Source: Bloomberg

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Buyers of 317 affordable flats under a government scheme each got an unscheduled 68,200 patacas (US$8,525) discount after the Housing Bureau got its sums wrong. Between 2006 and 2010, the bureau mistakenly sold the units in northern Macau for a lower price than that set in a 2005 Chief Executive order. It’s not yet clear who will pick up the bill for the 21.6 million patacas error. Page 8

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business daily May 21, 2012

macau

Fate of La Scala remains murky Future of residential development at the heart of Ao Man Long’s third corruption trial to be revealed once courts hand down verdict Tony Lai

tony.lai@macaubusinessdaily.com

Public Works secretary Lau Si Io, centre, says the government will review the La Scala deal after the judge’s verdict in Ao Man Long’s most recent trial

ixteen projects and land deals tied to the first two corruption trials of former Secretary for Transport and Public Works Ao Man Long have been revoked, but there is no indication of what will happen to La Scala, the development featured in third trial. In the Legislative Assembly on Friday, Transport and Public Works Secretary Lau Si Io said the government would review the

contracts involved once judges had reached a verdict. Court of Final Appeal president Sam Hou Fai has said the verdict would be ready once the judges had finished deliberations. The trial’s final hearing took place earlier this month. Before the trial began in April, buyers had snapped at least up 300 La Scala flats with an average pre-sale price of 7,200 patacas (US$900) per square foot.

Mr Lau said authorities would reveal details of the case to the public before the verdict but declined to make any further comment because it was still being deliberated by the judges. Prosecutors accuse the former secretary of taking a bribe worth HK$20 million (US$2.6 million) from two high-profile Hong Kong real estate businessmen, Chinese Estates Holdings Ltd chairman

Joseph Lau Luen Hung and BMA Entertainment Holdings Ltd head Stephen Lo Kit Sing. Offshore company Moon Ocean, which was later bought by Joseph Lau, was then granted a plot near the airport, where luxury housing project La Scala is currently being built. Mr Lau, the transport and public works secretary, said the decision to grant extra land to Moon Ocean in March last year was in accordance with the existing laws and regulations. Francisca Vong Iok Ip, an advisor to the secretary’s cabinet, said the bureau had repeatedly asked the government departments involved in the deal if criminal cases were associated with the 2006 La Scala deal before it approved the land grant. There was no report of any irregularities, she said. Legislator Au Kam San has criticised a deal that nearly doubled the project’s construction area from around 390,000 square metres to more than 730,000 square metres. The pan-democrat lawmaker reported the case to the Commission Against Corruption earlier this month and said he believed it involved corruption on the part of civil servants still working for the government. The transport and public works secretary rejected claims from legislator Paul Chan Wai Chi that he was aware of all the deals Mr Ao had made. The secretary said the accusation was “unacceptable”.

Law curbing smoking in casinos at final review Casino staff will have no right to compensation if they fall ill after inhaling second-hand tobacco smoke

he regulations governing smoking in casinos, which were supposed to be ready last year, are undergoing a final revision before they come into effect.They were supposed to be ready last year. The government has not set a date for their introduction. Health Bureau director Lei Chin Ion told the Legislative Assembly last Friday that the draft regulations do not consider diseases resulting from second-hand smoke an occupational hazard. He said the decision was made by the Labour Affairs Bureau. A ban on smoking indoors has been in force since January 1 but casinos are exempt until next year. Once the grace period ends, they will need to set up dedicated no-smoking zones for up to half of the casino’s floor area. “Any disease caused by working in an environment with secondhand smoke will not be treated as occupational disease,” Mr Lei said. The decision means casino employees have no avenue to seek compensation from their employers for medical complications arising from working around smokers. Pregnant women and workers

diagnosed with respiratory diseases would be exempt from working in smoking areas. Mr Lei said the Labour Affairs Bureau would soon release instructions on mandatory checks for casino workers and rules governing health insurance for hospitality workers. Legislator Angela Leong On Kei, who is the executive director of gaming operator SJM Holdings Ltd, said every casino had helped workers buy health insurance and set up regular medical checks.

Proposed standards According to the proposed rules, the air pressure in the smoking areas should be negative, controlled by a ventilation system that arrests flow to non-smoking areas. Smoking and non-smoking areas should either be on different floors, or separated by walls, air curtains or have a buffer of no fewer than five metres. “If the air quality of a smoking area does not meet the standards established after a six-month period, authorities will have the

right to cancel the smoking area,” Mr Lei said. Casinos should also ensure there is fresh air supplied to the smoking area and display at the entrance the latest test results of air quality. Gaming Inspection and Coordination Bureau deputy director Anthony Leong Man Ion said his staff would be responsible for monitoring the smoking ban. It would also help check air quality with the help of the health bureau. The proposed regulations were drafted after taking in suggestions from a leading mainland laboratory, the gaming operators and workers’ associations. Authorities have carried out more than 110,000 site inspections since the indoor smoking ban came into effect and fined more than 3,000 people. Seventy inspections were at government departments and 34 people have been fined. Mr Lei said the bureau would only pay visits to government departments and universities after receiving a complaint. Also beginning next year, graphic warnings and ingredient labels will appear on cigarette packages.

A ban on smoking indoors has been in force since January 1 but casinos are exempt until next year

May 21, 2012 business daily | 3

MACAU

Govt threatens to reclaim idle Patane land Two plots earmarked for housing have gone undeveloped as the government and developer wrangle over a road Tony Lai

tony.lai@macaubusinessdaily.com

he government might take back two plots of land in Patane that have been idle since 2008, if the developer fails to comply with the terms of their concession, Land, Public Works and Transport Bureau director Jaime Carion said. The two plots were awarded to Tin Wai Investment Co. through a public auction in January 2008. Tin Wai was owned at the time by Executive Council member and Transmac boss Liu Chak Wan. The developer was permitted to build residential towers no greater than 90 metres high, shops and car parks there, according to the contract. Answering queries in the Legislative Assembly on Friday, Mr Carion said Tin Wai insisted on uniting the two plots for development by eliminating a road that separates them. The bureau has turned down the new proposal “many times” as it is not in accordance with the urban plan for the area and the development project has stalled in the absence of an agreement, the director said. Officials would soon send the contract to the company for a reaffirmation of the conditions but

the two plots cannot be joined. “If the winning bidder does not accept this arrangement again, we do not rule out the possibility of revoking the land deal and getting back the land,” Mr Carion said. “We expect the bidder may appeal to the courts.” Mr Liu’s brother, Alfred Liu, who was the administrator of Tin Wai at the time, declined to comment, saying he was no longer in charge of the process.

Land-use review Secretary for Transport and Public Works Lau Si Io also told the assembly the government would finish an inquiry into the city’s 48 idle plots of land by the end of the year. Procedures to terminate contracts have been launched for 11 land deals. He added that the land may be used for public housing or other social development purposes. The government started tackling the question of unused land plots in 2009. Legislator Au Kam San questioned whether there was a “secret deal” between officials and developers that explained why it took “such a long time” for authorities to deal

Fitch holds steady on Banco Weng Hang Weng Hang still a good investment, says investment agency, but mainland exposure ups risks

inancial consultancy Fitch Ratings Ltd has affirmed the rating of Banco Weng Hang SA at A-minus, the third-best category, with a stable outlook. Fitch warned that the risk profile of Weng Hang, a subsidiary of Wing Hang Bank Group, was changing with increasing exposure to the mainland. The risk “has to date been sufficiently offset by buffers” but the company “views the exposure and growth relating to China as a potential negative rating trigger”. The importance of Weng Hang to the group “has further increased” due to the bank’s profits and “its ability to support the group’s China expansion”, Fitch said. The bank accounted for 11 percent of the group’s profits last year.

Weng Hang holds 3.8 percent of all assets in the city’s banking sector, according to the ratings agency. “Increased exposure to China, together with its loan concentration to property-related sectors and its small market position, acts as a constraint to the bank’s ratings,” Fitch wrote. The New York- and London-based company believes there is “an extremely high probability of support” from the group “in case of need”. But Weng Hang’s rating could go down if the group reduced its support. An A-rating means that Fitch believes the economic situation of the bank can affect its finance but that it is nonetheless a safe alternative for investment.

Fitch affirms Wing Hang Bank and Banco Weng Hang at A-

V.Q./Reuters

Two pieces of land in the Patane area are yet to be developed after being bought in 2008

with each case. Legislator José Pereira Coutinho is worried the public interest has been damaged. Tin Wai offered 555 million patacas (US$69.4 million) for a 1,704-square-metre plot and 867.9 million patacas for a 2,967-squaremetre plot in Patane. The government has received just the 10 percent down payment. The cases are “more complicated

than expected”, involving land deals and issues going back more than 10 years, Mr Lau said. He also said authorities had learned “invaluable experience” from the process and would amend the land law to prevent awarded land from going undeveloped in the future. According to the government’s legislative plan, the land law revision should be ready by the end of this year.

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business daily May 21, 2012

macau Brought to you by

Private sector credit Private sector credit has grown. The most recently published figures for the first quarter of this year underline an upwards trend. In the past two years, total private sector credit has risen by more than 60 percent. That represents an average quarterly increase of about 6 percent. By breaking down the amount of private credit into some of its most substantial components, we can analyse the evolution of its growth. The first graph is a comparison of credit held by private sector businesses and individuals.

American regulators ‘looking other way’ in Macau

From the beginning of 2010 until the end of the first quarter, personal credit has increased by 76 percent – growing about one-third annually. Personal credit is rising much faster than for businesses. The share of personal credit relative to all private sector credit has risen by four percentage points, from 43.8 percent to 47.7 percent. This is a significant increase in such a short period of time. Let us breakdown personal credit into its main components.

CasinoLeaks-Macau burst onto the city’s gaming scene by publishing a list of owners and directors behind more than 170 junket companies. It has since named more than 700 people linked to the city’s gaming industry and their corporate affiliations. The casinoleaks–macau.com has gone on to reveal a claimed connection between gang leader Wan Kuok Koi and the industry. The site advocates action against MGM China Holdings Ltd for a relationship it says one of its VIP operators, SunCity, has with organised crime. In an interview with Business Daily, Jeff Fiedler, director of special projects and initiatives for the Washington D.C.-based International Union of Operating Engineers and a four-term member of the US-China Economic and Security Review Commission, says all American operators in Macau are on the website’s radar.

Luciana Leitão

newsdesk@macaubusinessdaily.com

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Do you have any connection to WikiLeaks, other than using the same model? No connection whatsoever, except for using the same [word] ‘leaks’.

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What sources do you use? [We use] publicly available documents and news stories. We’re only using documents and reported news that may not have been widely distributed.

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Housing is by far the biggest component of personal credit, with a share of just less than 80 percent across the past two years. Growth between the first quarter of 2010 and March 31 this year reached 71 percent – a quarterly average growth rate just under 7 percent. In relative terms, its importance decreased slightly. In absolute terms, just one component of personal credit has declined in absolute value – credit cards. Between 2010 and the first quarter of this year, credit card debt rolled over by individuals fell by 10 percent. Other private loans have more than doubled. J.I.D.

Do you intend to use different sources in the future? Maybe. Meanwhile, you haven’t leaked anything. Are you planning to do so in the future? We haven’t really decided yet. Honestly, we haven’t got a lot of leaked documents. What are the goals of CasinoLeaks-Macau? To begin to educate people in the United States about the risks involved with Macau gaming. It is

a worldwide phenomenon that few people understand and it represents to us a serious regulatory risk. Macau regulation is loose and it doesn’t resemble the rigour of regulation, or the alleged rigour of regulation, in other places in the world. Now, there are American operators in Macau and there are American laws that govern their conduct, and we believe that American regulators are sort of looking the other way. That’s not healthy for gaming in the United States, when regulators start to look the other way.

Why has the International Union of Operating Engineers, based in the US, decided to investigate the ties in Macau casinos? We represent stationary engineers in casinos, in Las Vegas, in Detroit, in Atlantic City, in Mississippi, in Louisiana, in California, in New York. We represent them everywhere and we have 1,000 people in casinos alone in Las Vegas. And gaming is growing in the US. So, we are concerned about regulations. These are powerful corporations that, if left to regulate themselves, won’t.

A Macau government source quoted by the Sunday Morning Post accuses you of having “questionable” motives. Why do they say this? People who don’t like unions think that everything they do has questionable motives. People who don’t like exposure of facts about something think they have questionable motives. I’ve always thought motives are a very hard thing to attribute.

You say that you don’t want US gaming operators to be infected by the Macau gaming environment. Is the gaming environment in Macau so much different from Vegas? Quite clearly. The organised crime in the US has been, for the most part, driven out of gaming. There was an organised crime problem historically in Las Vegas. There is less of one, in the US. So, there is no comparison between

May 21, 2012 business daily | 5

MACAU how Macau operates and how gaming operates in the US. And it’s a problem. We have laws in Nevada that govern the conduct of American gaming operators who are operating overseas and we don’t think that those laws are being enforced. I don’t see how anybody can believe those laws are being enforced in Nevada. On some level, I don’t care about crime in Macau. In other words, if there were no Americans in Macau and Macau gaming did not influence regulations in the US, I wouldn’t care about triads, Stanley Ho and all these people. I would say it’s your problem but it’s now our problem. American operators have been in Macau for quite a while now. However, you chose a particularly sensitive time for US gaming interests to launch CasinoLeaks-Macau. Was the timing on purpose? I suppose the real reason is because we on my team became involved in looking into gaming in Nevada. When we started looking into American operators, it doesn’t take you long to discover Macau. There’s not much here. Stock analysts are not writing about it, other than numbers. Newspapers write occasional stories. So, we thought there was a vacuum of information and it is clearly because people do not believe yet that Macau is influencing the United States. We do, so we’re trying to educate people on what’s going on and implying US regulators should take action. So, your timing has nothing to do with the fact that Las Vegas Sands and its Macau subsidiary Sands China are under investigation by the US Securities and Exchange Commission (SEC) and the Department of Justice? Or that Wynn founder Steve Wynn is having a major dispute with one of its former shareholders, Japanese billionaire Kazuo Okada, who he accused of bribing officials in the Philippines? How can anybody know that Wynn was going to do something with Okada? That was a surprise. It was useful, because Mr Wynn raised the question of suitability. In other words, Wynn didn’t say that Okada was unsuitable. That’s a term in the United States that means you can’t get a licence. If Wynn is saying Okada is unsuitable, one can only ask about the other people Wynn is dealing with and whether they are suitable under Nevada law, not under Macau law. In Macau, unless you go to jail, you’re suitable. It’s very different from regulations in the rest of the world. In the United States, if you had a licence to run a gaming company and you were seen having dinner with a member of the mafia, you would lose your licence. That’s what the concept of suitability is all about. You don’t have to be convicted. It takes a lot of time in the US to convict anybody because we have the rule of law, and you have to gather all the evidence. But not for gaming. If you are in the files of law enforcement as having criminal connections, you’re deemed unsuitable to be involved in gaming. That’s how we cleaned out organised crime from gaming in the US. That’s not true in Macau. Now, a lot more people in the world know it. You want to expose connections between US companies and criminals. Do you think it will really have an impact on them?

Now there are American operators in Macau and there are American laws that govern their conduct, and we believe that American regulators are sort of looking the other way Jeff Fiedler

As you know, we did a couple of press releases so far and we’ve asked the Nevada Gaming Control Board to investigate in the first instance Cheung Chi Ta and Neptune. Our information is that Neptune is dealing with pretty much all of the American operators in Macau. Our real goal is to activate American regulators and to make them to investigate. Do you have that power? I don’t know yet. Maybe we haven’t created enough public pressure. You have a section on CasinoLeaks where you ask for intelligence from readers. Until now, who are the people that have sent you some information? I wouldn’t disclose the [names of] people. They are people from all over the world. People related to casinos, in high positions? Yes. Sort of medium … some high … well, high is a tough thing to define. Let’s just leave it at knowledgeable. Will this information be the leaks that you’re expecting? Potentially. I don’t know. The site is founded on factual information, even if someone leaks something to us, we don’t simply use it. What if someone fabricated something? We’re not interested in making any mistakes and we’re not interested in putting false information out. We’ve been very careful and no one has really attacked the substance of our information or analysis. Lots of people are attacking us but no one has done a substantive attack and said: “This is wrong. Cheung Chi Tai didn’t have this relation and so and so and so.” We documented all. It’s there for everyone to see. Have you had any complaints from the people who had their names published on your website, particularly junkets? No, not at all. No junkets. I don’t know what they are saying privately but the information is all documented. If we can’t document it, you don’t put it up there. People think that this is a big deal and a lot of work. It’s a lot of work but it’s not an extreme amount of work. If you were to take it up alone it would be an extreme amount of work but for three or four people it is not. We’ve also spent a fair amount of time preparing and gathering, so we have a lot of documents. You have to carefully analyse it. By using the name CasinoLeaks,

clearly inspired by WikiLeaks, it looks as though you’re doing a great deal of work. Why did you choose the name? We used the name to get attention. Clearly at this point it is not leaks. That isn’t to say that people won’t send us a bunch of documents and that maybe we will publish it but it is mostly to get attention for the site. You claim to be an independent organisation. Do you have any companies supporting you? We are a union. We don’t have any companies behind us. It is illegal in the United States to take any money from companies if you are a union. If I meet with a company and have a cup of tea, I pay for the tea. We have nothing to do with companies and governments. You have also been reappointed to the US-China Economic and Security Review Commission. Might this mean there are political intentions in CasinoLeaks? No. Those are completely separate. Because of my China commission work, I understand stuff about China that perhaps other union people don’t. But I separate those two very clearly. The US-China Economic and Security Review Commission is a policy advisory body for the US Congress, so we do studies, we write reports and there are six Republicans and six Democrats. Our reports are always unanimous, it’s bi-partisan and it is policy related: currency manipulation, foreign trade, WTO, military stuff. Nothing to do with gaming in Macau. Will the reports issued at CasinoLeaks have an impact on China-US relations? No, not really. There are a lot of things that have impact on ChinaUS relations that are much more important than this. With that being said, I suppose there could be a bi-product effect but it’s not intentional. It’s not what we’re trying to do. We’re trying to affect American gaming regulators. Considering your focus has been the shady side of casino business in Macau, aren’t you afraid of upsetting the wrong people? I’ve spent my life upsetting the wrong people. To me super wealthy people who mistreat workers are the wrong people. So, no. I don’t care about crime in Macau. I could make an argument, and some people do actually, now the triads are making so much money they won’t be shooting each other. I don’t think we’re going to have any dramatic effect on how Macau

operates. I think people exaggerate the potential of our effect. The information you’ve released is not exactly new. Why do you think, by putting it on Casino Leaks, the regulators will now act when they could have done it before? Regulators must act on specific information, not general information. You say it’s not new. I agree. In some cases, we’re using older documents. But you didn’t read those documents, did you? So, they are new to you. Everybody knows in Macau that the triads are running around all over the place, everybody knows that China doesn’t allow the collection of gambling debts. That’s the reason why triads can succeed, because they can collect the debts. But we’re just getting a little bit more specific. You didn’t know all that we’ve done in Casino Leaks. I don’t know how you would, unless you had done the extreme amount of work that you said you think we’re doing. So, it’s news. So, this puts extra pressure on gaming regulators? In the United States … I don’t think China or Macau is going to change a thing. Do you have anyone from your team working in Macau? No. Are you all based in the USA? Yes. You’ve already taken aim at MGM and Las Vegas Sands. Are you also aiming at Wynn? Yes. We reveal our stuff on the website. We let the information go where it goes. I don’t care who is involved. They are all involved. Frankly, the press is a little more focused on Wynn because of the Okada situation and the major donation to the University of Macau. So I don’t figure to try to duplicate their work. We’re trying to do things other people aren’t doing. The union represents maintenance engineers and slot mechanics at several of its properties in Las Vegas, including MGM, Wynn and Las Vegas Sands. Doesn’t the work in Casino Leaks go against your own interests? You think it is in the interest of corporations to be dealing with triads, if they are making money, and putting their licences at risk in the United States? I don’t think it’s against our interests. I think it is in the shareholder’s interests that they take money legitimately and for the long turn.

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business daily May 21, 2012

macau

Cab rides will soon cost more

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HOSPITALITY Four-star riddle

Taxi fares could rise in a few weeks’ time but cab trade warns that it will not be enough to cover their soaring costs Cherry Lee

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There were substantial declines in hotel occupancy rates in 2008 and 2009. Three-star rooms were relatively immune to the effects of economic uncertainty. This class of accommodation has typically enjoyed higher occupancy rates compared to other classes. Occupancies for all classes of rooms have bounced back since then. Five-star rooms have led the revival, thanks partially to the significant increase in supply of these rooms. Overall, occupancy rates are converging, and have increased at the same time as room rates have also increased.

Average price

ceci-lqq@macaubusinessdaily.com Photo by Manuel Cardoso

The Macau Government Tourism Office publishes hotel occupancy and revenue data every month based on information provided by the Macau Hotel Association. Comparing the most recent figures ending March 31 with data from the same time over the past five years, some trends become visible and are worth accenting. Let us start with occupancy.

axi companies have described as “too little, too late” the possibility that flagfall may increase from 13 patacas (US$1.63) to 15 patacas in July. The Transport Bureau has been quoted by Chinese-language Macau Daily News as saying a final decision on the new minimum fare would be finalised in June but the charge for each additional 230 metres would remain at 1.50 patacas. Three taxi associations and a lobby group of seven taxi associations and companies have presented the bureau with their competing proposals to increase fares. The trio of associations wants to raise flagfall to 14 patacas, with an increment of 1.50 patacas after 1,500 metres, instead of the current 1,600 metres. It wants the meter to drop every 200 metres subsequently. Mário Sin Ferreira, manager of Vang Iek Radio-Taxi Co Ltd, which runs the city’s yellow taxis, told Business Daily the price hike was “not enough” to cover increased fuel and salary costs. He agreed it was better than no increase at all. He said the increase was coming “too late” and hoped for its rapid implementation. The head of the Macau Federation

Cab flagfall may increase to 15 patacas this July – a 15 percent increase

of Taxi Services, Wong Pei Kei, said last February: “After the new fare comes into effect, we will come forward with a new proposal to increase it.” In an interview with Jornal Tribuna de Macau, he said the association had agreed with bureau’s proposal only to “speed up the process”. A fare increase has been under discussion since last year.

Mr Ferreira said the increase in the number of tourists had led to higher demand for taxis and was key to taxi companies meeting their running costs. The Transport Bureau said the proposed increase was based on purchasing power and sought to help taxi drivers cover running costs. Fares were last increased in September 2008.

Traffic safety centre threatens wetland

Environmentalists want centre moved away from last wetland and bird sanctuary

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The average price of a five-star room has more than doubled since 2007, jumping from 781 to 1,645 patacas a night. But there have been significant increases in all categories. The average cost of three- and four-star hotel rooms have increased by 60 percent and 70 percent, respectively. The cost of four-star hotel rooms has increased but not in line with the overall trend. Throughout most of the six years of this analysis, the average price for a four-star room is below the price of a three-star room. The difference varies between 25 percent in 2009 and about 12 percent this year. J.I.D.

he proposed construction of a traffic information and safety centre near the Taipa Houses-Museum will damage the city’s only wetland area and tourism, environmentalists warn. Five environmental groups have launched an online petition that had about 2,000 signatures by yesterday afternoon. “This area has a double value because it is a popular sightseeing spot for many tourists and a natural place for endangered egrets to nest,” Macau Environmental Student Union director Lam Long Kei said. The Transport Bureau recently announced plans to build a traffic

information and safety centre next to the land where the birds flock. The office will offer educational games and library corners for children. Mr Lam said the group’s studies found that tourists visited The Taipa Houses-Museum because they found it attractive and “comfortable”. The president of the Macau Environmental Student Union, Joe Chan, urged the government to find an alternative location for the centre. He said there were idle plots of land that were more suitable. He said it was unusual for the Environmental Protection Bureau to promote Macau to tourists as a “green city” and yet the government

planned to build the centre next to a natural habitat. The government took back the illegally reclaimed plot of about 9,209 square metres in March last year and said it would be “difficult” to return the wetland area to its original standard. Legislator Melinda Chan Mei Yi also criticised the relocation of the centre, stressing that “a huge sum of public money” was spent to initially build the centre in Taipa. In an enquiry, she asked whether the move would have a negative impact on the environment of Taipa’s historical district. K.C.

Weather Beijing 29/18o C Changchun 31/18o C

Harbin 31/19o C

Xian 28/14o C Shanghai 24/17o C Chengdu 28/21o C Kunming 26/16o C Haikou 30/23o C Sanya 32/26o C

Guangzhou 34/25o C

MACAU (21 May-26 May) Day

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Shenzhen 30/23o C

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May 21, 2012 business daily | 7

MACAU

Judge rejects two shareholder cases v. MGM Resorts Attorneys claimed CityCenter contributed to ‘virtual black hole’

wo shareholder lawsuits claiming some MGM Resorts International directors benefited in 2007 from selling its stock at US$90 (720 patacas) – when they knew the price was about to crash – have been dismissed by a judge in Nevada. Lawyers for the shareholders said in Clark County District Court filings that the US$9.2 billion cost of the CityCenter project in Las Vegas plus the global recession beginning in autumn 2008 created a “virtual black hole” in the company’s accounts. They added the board must have known the risks CityCenter had created for shareholders but didn’t warn them. The lawsuit attorneys said some of the board wanted to cash out during a share buy back conducted by the company ahead of the global crash in equity markets. The suits added MGM Resorts’ stock price went from US$99.75 in October 2007 to only US$1.89 in March 2009, although it has since risen 450 percent from that low. On Friday in New York the shares closed at US$10.33. Judge Mark Denton dismissed the cases because he said the parties hadn’t first approached the

Photo by Manuel Cardoso

Associate Editor

company demanding that it act in all the shareholders’ interests. “By definition, a share repurchase plan benefits both the corporation and all stockholders equally, and accordingly the board was disinterested in this transaction,” the judge’s order said. Four other lawsuits by MGM Resorts shareholders remain active in U.S. federal court. MGM Resorts has denied making misleading statements.

‘Positive’ outlook On Thursday last week a report published by the Hong Kong office of Standard & Poor’s – a ratings agency – gave MGM Resorts International a B- credit rating – three levels below the lowest investment grade. But it sweetened the pill by indicating a ‘positive’ outlook. “…the outlook revision incorporated the benefit from the over US$200 million dividend from MGM China,” stated the report. Until June 2011 MGM’s Macau operation was a 50:50 joint venture between MGM Resorts and Pansy Ho Chui King, a daughter of former Macau casino monopolist Stanley Ho

MGM Macau – helping to restore shareholder faith in parent MGM Resorts

Hung Sun, using a gaming licence bought for US$200 million from the latter’s casino company SJM. That month the joint venture’s Macau unit MGM China Holdings was floated on the Hong Kong Stock Exchange in a US$1.5 billion initial public offering. As part of the IPO deal Ms Ho reduced her JV stake to 27 percent and MGM Resorts moved to a controlling 51 percent, allowing it for the first time

to consolidate MGM China’s Macau earnings on the group’s balance sheet. In late February MGM China declared a dividend of HK$0.816 a share, or a total of HK$3.10 billion, as its first dividend since listing – a move that benefited the parent’s shareholders and that analysts said helped to reduce tax liability on repatriation of profits to the U.S. from Macau.

8 |

business daily May 21, 2012

macau

Housing Bureau admits losing MOP21m in sale Authorities sold affordable flats for less than the legal price; who will pick up the shortfall is unclear

he Housing Bureau lost 21.6 million patacas (US$2.7 million) in the sale of affordable flats at a complex in northern Macau, authorities admitted on Friday. The bureau sold 317 units between 2006 and 2010 at Sun Star Plaza’s block three for less than the price set in a Chief Executive dispatch from 2005. Each buyer was charged 68,200 patacas less than the set price, according to a press release from the bureau. The bureau claims it uncovered the problem in 2010, when it set up an inquiry to work out what went wrong. Housing Bureau president Tam Kuong Man said it was an isolated case and attributed it to poor management of internal files. He pledged it would not happen again.

Mr Tam did not say if the 21.6 million patacas would be recovered from the buyers. The bureau has pledged “to respect the spirit of the law and protect the legitimate rights and interests of the buyers”. It added the first step would be “to perform the public deed according to the price set in the precontract agreement”. Then the bureau could treat the other issues “according to the legal framework”. The government promised to have the public deed of the 364 units in block three of Sun Star Plaza concluded “within a month”. The bureau has invited an independent consulting company to help with the presale and sale procedures of the 19,000 public housing flats scheduled to be ready by the end of the year.

Macau’s Housing Bureau sold 317 units at Sun Star Plaza for 68,200 patacas less than the set price

C.L.

Corporate social responsibility

Unique golf contest inspires people to thrive Macau Special Olympics Golf International 2012 announces new sponsors: Melco Crown and Sands China

he first major sponsor of the Macau Special Olympics Golf International 2012, MBSK Events Ltd wants to change the city’s corporate social responsibility culture by bringing an event to the city that gives participants outstanding exposure to elite-level sports. “This tournament aims to celebrate Macau Special Olympics 25th anniversary but we would like to have it in the calendar every single year,” said MBSK Events director and tournament president Paulo Azevedo. “We could not be more happy with the response from international teams.” This year’s tournament will have eight teams: two each from Hong Kong and South Korea, and one entry each from Taiwan, Macau, Malaysia and the mainland. It takes place from July 4 to 7 at Caesars Golf Macau. Mr Azevedo is also the chairman of the board of directors of the nonprofit organisation responsible for promoting the tournament for the Macau Special Olympics. The Charity Association of Macau Business Readers aims to promote non-for-profit endeavours in the arts, culture, community and sports with a strong focus on social corporate responsibility. “We believe we can help to reinforce public and private will to prove that

Macau is building a more connected society,” Mr Azevedo told Business Daily, the event’s media sponsor. Mr Azevedo is the founder of De Ficção Multimedia Projects, the parent company of both Business Daily and MBSK Events Ltd. Melco Crown Entertainment Ltd and Sands China Ltd have joined MBSK Events as major sponsors of the tournament. “Both companies have again shown their continued support for our efforts to bring events to the city that build what we consider the most important qualities: a sense of caring and belonging. These companies offer few words but plenty of action. I can only wish other businesses would follow their example because it is the right thing to do,” he said. Melco Crown Entertainment “is very pleased to sponsor one of the major sports events in town,” chief executive Lawrence Ho Yau Lung told Business Daily, the official host publication. “As an integral part of our ‘Caring Culture’, within and beyond the company, we believe every person deserves an equal opportunity to cultivate their talents and to make contributions to the wider community. This tournament offers exactly that opportunity to the Special Olympics athletes. “It is truly uplifting to witness the

dedication of Special Olympics athletes in their training and their genuine enthusiasm in the actual competitions. I sincerely wish the Special Olympics Macau every success and wholeheartedly applaud all participating athletes for their unbeaten determination.” Melco Crown, which is listed on the Main Board of the Stock Exchange of Hong Kong and the NASDAQ Global Select Market, owns and operates the City of Dreams, its flagship integrated entertainment resort; Altira Macau, a Forbes-FiveStar luxury hotel; Mocha Clubs, a series of lifestyle and entertainment clubs; and the Studio City Project, an integrated entertainment and retail resort under development. Sands China Ltd president and chief executive Edward Tracy says his company shares a similar commitment to corporate social responsibility. “We are an ardent supporter of the development and enrichment of Macau culture and society in all its aspects,” said Mr Tracy. “The work of the Special Olympics organisation is particularly praiseworthy and Sands China is proud to be able to contribute to the important service it provides the community. “We have a long-standing relationship with Macau Special Olympics and have been proud to support them with annual contributions and by participating in various community outreach activities. We are particularly proud of the fact that we currently employ Special Olympics members in different departments within the company,” Mr Tracy told Business Daily. Sands China Ltd is a subsidiary of global resort developer Las Vegas Sands Corp., and a listed company on the Hong Kong Stock Exchange. Sands China is the largest operator of integrated resorts in Macau. The company owns and operates The Venetian Macao-Resort-Hotel, The Plaza Macao and Sands Cotai Central in Cotai and Sands Macao Hotel on the peninsula.

We believe we can help to reinforce public and private will to prove that Macau is building a more connected society Paulo A. Azevedo

As an integral part of our ‘Caring Culture’… we believe every person deserves an equal opportunity to cultivate their talents and to make contributions to the wider community Lawrence Ho Yau Lung

The work of the Special Olympics organisation is particularly praiseworthy and Sands China is proud to be able to contribute to the important service it provides the community

May 21, 2012 business daily | 9

GREATER CHINA

U.S. sets new tariffs on Chinese solar imports China denounces the move as unfair and damaging to both producers and consumers Google gets nod for Motorola deal

he United States imposed punitive tariffs on solar panel imports from China; the latest in a series of trade disputes between the world’s two biggest economies and sparking accusations by Beijing of protectionism. The new tariffs of 30 percent, much bigger than had been expected, were set on Thursday by the U.S. Commerce Department after it ruled in favour of local firms which said the Chinese exporters were dumping cutprice solar panels on their market. The size of the tariffs is larger than Chinese companies had expected and some analysts said it might prompt them to manufacture elsewhere or look for alternative markets. “The U.S. decision lacks fairness, and China expresses its strong displeasure,” a spokesman for China’s Ministry of Commerce, Shen Danyang, said in a statement posted on the ministry’s website. “By deliberately provoking trade friction in the clean energy sector, the U.S. is sending the world a negative signal about trade protectionism,” Mr Shen said. However, Beijing stopped short of threatening immediate retaliation. “We believe these measures by the United States damage ChinaU.S. cooperation in the renewable and clean energy sectors, and also damage U.S. interests. We hope the United States can appropriately resolve the relevant issues, and take practical steps to respond to China’s demands,” Foreign Ministry spokesman Hong Lei said. The tariffs apply to most top Chinese exporters, including Suntech Power Holdings Co Ltd and Trina Solar Ltd, at about 31 percent.

Heavy reliance The ruling follows a complaint filed last October by the U.S. subsidiary

China’s solar companies hold more than 60 percent of the global market

of Germany’s SolarWorld AG, and six other U.S. companies that alleged unfair competition and had sought duties well above 100 percent. China’s solar companies hold more than 60 percent of the global market. The U.S. market alone accounts for about 20 percent of sales of China’s largest solar panel manufacturers. Their heavy reliance on subsidised U.S. and European markets has prompted criticism that loans from Chinese state-run banks and low prices gave the companies an unfair advantage. Under the decision, 59 Chinese solar companies that petitioned Washington in the case will also face an import duty of about 31 percent, including Yingli Green Energy, LDK Solar, Canadian Solar, Hanwha solar One, JA Solar Holding and Jinko Solar.

Other Chinese companies could now face a 250 percent tariff, although those levels could be altered before the final ruling is issued by the Commerce Department in the coming months. Suntech, the world’s largest manufacturer of solar panels, which also operates a panel plant in Arizona, denied it sold below its cost of production. “All leading companies in the global solar industry want to see a trade war averted. We need more competition and innovation, not litigation,” Andrew Beebe, Suntech’s chief commercial officer, said in a statement. Yingli Energy and Trina Solar said they would actively defend their position in administrative proceedings. Reuters

Chen begins new life stateside Blind activist praised Beijing’s ‘restraint and calm’

hinese activist Chen Guangcheng has arrived in New York to begin a new life in the United States. The blind human rights lawyer caused a diplomatic crisis when he escaped house arrest to arrive at the U.S. embassy in Beijing last month. A crowd of activists, supporters and curious New Yorkers greeted Mr Chen at the university apartment block in Greenwich Village where he and his family will stay. Speaking outside New York University, where he has been offered a fellowship, Mr Chen said China had dealt with the situation with “restraint and calm”. But he raised concerns about ongoing reprisals against his family. “Acts of retribution in Shandong

have not been abated and my rights to practice law have been curbed – we hope to see a thorough investigation into this,” he said, referring to the province where he was kept under house arrest. The activist thanked U.S. officials and his supporters for their help and said he had come to the United States for “recuperation in body and spirit”. During the brief news conference, Mr Chen expressed gratitude for help from the U.S. and for encouragement from supporters around the world. He also said he appreciated the “cool heads” in the Chinese government. “I hope the Chinese government will continue the course of reform and earn the respect of its people,”

he said. Mr Chen and his family were taken from a Beijing hospital, where he was being treated for a foot injury, to the capital’s airport on Saturday. After being holed up for more than two weeks at a Beijing hospital with his fate still uncertain, Mr Chen was suddenly given notice earlier Saturday to pack up his belongings and prepare for departure. Jiang Tianyong, a lawyer and close friend, said Chen had mixed feelings about leaving China. “He seemed to be reluctant to leave and didn’t consider it the optimal solution, even though he agreed that it was the best he could do to ensure his personal safety,” Mr Jiang said. Agencies

Google said on Saturday that Chinese authorities have approved its US$12.5 billion purchase of Motorola Mobility Holdings, the last regulatory hurdle to a deal that would allow the world’s No. 1 Internet search engine to develop its own line of smart phones. Google, which will be the newest entrant to the handset market, announced plans for the acquisition last year in a bid to secure Motorola’s valuable patents and pave the way for a pairing of Google’s Android mobile software and Motorola’s handset business. U.S. and European regulators approved the deal in February, leaving only the Chinese regulators as potential spoilers. “Our stance since we agreed to acquire Motorola has not changed, and we look forward to closing the deal,” Google spokeswoman Niki Fenwick said, confirming that the Chinese had approved the deal. Google, whose Android software is the top operating system for Internet-enabled smart phones, wants phone-maker Motorola for its 17,000 patents and 7,500 patent applications, as it looks to compete with rivals such as Apple Inc. and defend itself and Android phone manufacturers in patent litigation. A main condition of the deal is that the Android system remain free and open for five years, said a source who is familiar with the Chinese approval but not authorised to discuss it. “We are pleased that the deal has received approval in all jurisdictions and we expect to close early next week,” Motorola spokeswoman Jennifer Weyrauch-Erickson said.

HK bid for LME hard to beat A 1.2 billion pound (US$1.9 billion) bid from Hong Kong for the London Metal Exchange could be hard to beat on price and carried assurances about maintaining the LME’s 135-year-old traditions, sources familiar with the matter said on Friday. The offer for the world’s largest metals marketplace from Hong Kong Exchanges and Clearing Ltd (HKEx) is up against bids from the Chicago Mercantile Exchange (CME) and InterContinental Exchange. HKEx declined to comment on the bid price. “It’ll be between CME and HKEx. CME were first in and Hong Kong put in a huge offer, which will blow some in the running out of the water,” a source close to the process told Reuters. At a recent townhall style meeting CME senior managers said the LME would be nice to have but was not a “must have”, a second source said. “It seems like it is pretty early days. It is in the hands of the LME,” the source said. No figures were mentioned for the bids from CME or ICE, but the LME has been independently valued at 1 billion pounds. A 1.2 billion pound bid would value its ordinary A shares at around 93 pounds, a nearly 20-fold premium to the 4.95 they traded at last July. “Those are crazy numbers. It shows you how much value people put on the exchange,” said one head of a metals trading unit at a commodities trading house. “I think most people will be interested in an offer like that, but it depends on the details.” LME received a second round of bidders’ proposals on May 7 and said its board would consider them before giving shareholders more information. One bidder, NYSE Euronext, fell out of the race this week, a spokesman said on Tuesday, after its reported 800 million pound bid was deemed too low.

May 21, 2012 business daily | 11

ASIA

Stocks tumble, wipe out year’s gains Assets across the board, from commodities to riskier currencies all headed for weekly losses

sian stocks fell, with a regional index posting its worst week in almost eight months, as Europe’s debt crisis worsened, U.S. economic data missed estimates and Chinese home prices and investment declined. Assets across the board, from commodities such as oil and gold to riskier currencies such as the euro and the Australian dollar all headed for their weekly losses. “Investor sentiment is at its worst,” said Masaru Hamasaki, chief strategist at Toyota Asset Management Co., which oversees the equivalent of about US$23.8 billion. “We don’t know what will happen with Greece, and when something does happen, we don’t know what impact that will have. All people can do is escape from risks, a so-called panic,” he told Bloomberg. The MSCI Asia Pacific Japan Index declined 5.1 percent to 112.58 last week, wiping out this year’s gains. That’s the steepest weekly slide since the week ended September 23, 2011. Almost US$4 trillion has been wiped from global equity markets this month as Greece’s failure to form a government rekindled Europe’s debt crisis and signs of slowing economic growth in China and U.S. dampened the outlook for global demand. “It is too difficult to accurately quantify the risks in Europe over which concerns will become reality and how much damage it will translate into,” Cho Byung-hyun, an analyst at Tong Yang Securities, told Reuters. China’s Shanghai Composite Index slipped 2.1 percent last week after the nation’s home prices fell in April from a year earlier in a record 46 of 70 cities tracked by the government. Officials pledged to keep restrictions on property purchases that have sapped buyer demand. Hong Kong’s Hang Seng Index sank 5.1 percent.

Weak demand Concerns over weak demand dragged the materials sector down

Almost US$4 trillion has been wiped from global equity markets in May

3.6 percent, while fears of slowing global economies sent growthsensitive technology and industrials sectors down 3.6 percent and 3.1 percent respectively. Korean shares plunged the most in the Asian index with a 3.3 percent drop to their lowest this year, dragged down by blue-chip heavyweights such as Samsung

KEY POINTS MSCI Asia ex-Japan slides to 2012 low Euro hits fresh four-month low vs dollar Growth worries hit materials, industrials, tech shares Japanese government bond yield hits lowest since 2003

Electronics. Samsung dropped 11 percent to 1,166,000 won in Seoul. Australia’s S&P/ASX 200 Index retreated 5.6 percent, strongly pressured by a sluggish outlook for both the commodities markets and the Chinese economy – two key factors affecting investor sentiment. Japan’s Nikkei 225 Stock Average decreased 3.8 percent last week. The broader Topix Index fell 4.3 percent, led by papermakers, capping the longest streak of weekly losses since the September 11 attacks in 2001. “There is no resolution to the [European] problem yet, and we also had very disappointing U.S. data, so overall, it’s negative and further denting market sentiment,” said Frances Cheung, senior strategist for Asia ex-Japan at Credit Agricole CIB in Hong Kong, referring to an unexpected contraction in U.S. regional manufacturing and a lacklustre jobs market data.

Stressful times As risk aversion intensified, the CBOE VIX Volatility index, a

gauge of investor anxiety that measures expected volatility in the Standard & Poor’s 500 index over the next 30 days, rose nearly 1 percent to close at a five-month high of 24.49 on Thursday. High stress levels spilled over to Asian credit markets on Friday, sharply widening the spread on the iTraxx Asia ex-Japan investment-grade index by 11 basis points to its widest level since mid-January. “It’s usually a liquidity crisis that causes an explosion in volatility, which in turn drives a second round impact through economic losses. That has not happened yet. That’s good. But that’s where the list of positives ends,” Bhanu Baweja, strategist at UBS, said in a note to clients. Concerns about growth plus Europe’s worsening financial woes have given momentum to the flight to safety, pushing the 10-year Japanese government bond yield to its lowest since July 2003 at 0.815 percent on Friday. Reuters/Bloomberg

Currencies fall most in six months Biggest weekly drop since November; more falls expected

merging Asian currencies slid again last week, led by the South Korean won, and analysts said they expect more falls due to growing worries about Europe and slowing global growth. The won, suffering its worst week in eight months, hit a five-month low as offshore funds sold it and foreign investors extended a spree of dumping South Korean shares. The Malaysian ringgit fell to its lowest in four months as leveraged funds unloaded the currency, while the Singapore dollar also touched the weakest since late January on selling by U.S. investment houses, macro accounts and model funds. The Indian rupee slid 1.5 percent to 54.4250 and Indonesia’s rupiah weakened 1.2 percent to 9,356. Most emerging Asian currencies are

MBdaily-May21.indd 11

technically seen as excessively sold with the 14-day relative strength index (RSI) of dollar/Asian units above the 70 threshold. Still, market players found momentum on Friday for pushing regional units down further, dealers and analysts said. The Reserve Bank of India and Bank Indonesia have said they would buy their currencies to counter depreciation, while Bank Negara Malaysia said the country could weather any setbacks arising from Europe’s debt crisis. “Some near-term rebound upon any piece of good news tonight and over the weekend cannot be ruled out, given the heavy sell-offs we have gone through,” said Frances Cheung, senior strategist for Credit Agricole CIB in Hong Kong on friday.

“However, any rebound will be short-lived, as there is no comprehensive resolution to the European debt problem yet. On a one-month horizon, investors should sell Asian currencies on rallies,” she added. Financial instability in Spain deepened, with Moody’s Investors Service cutting the long-term and deposit ratings of 16 Spanish banks. Fitch downgraded Greece deeper into junk territory, while U.S. jobs and factory data on Thursday prompted worrisome signs for a still-fragile economic recovery. All the negative factors slammed stocks, the euro, and commodities. “Asian currencies will fall further,” said an Asian bank dealer in Singapore.

“It does not matter how much risky assets have priced possibility of Greece’s exit in. There is no choice but to dump risky assets as investors have not seen signs of solutions yet.” “The trend move higher in USD/ Asia remains very much in place. European concerns, combined with growth fears out of U.S. and China is pushing investors towards safe haven assets classes,” said Jonathan Cavenagh, senior FX strategist at Westpac in Singapore. “With limited scope of a ‘circuit breaker’ to break the market out of this risk averse mood, higher USD/ Asia levels seem inevitable,” said Mr Cavenagh, adding the won, the Indonesian rupiah, the ringgit and the Indian rupee seem most at risk. Reuters/Bloomberg

5/20/12 10:21 PM

10 |

business daily May 21, 2012

GREATER CHINA Yahoo jumps on Alibaba deal talk Shares in Internet giant Yahoo have risen over five percent after reports that it is close to selling its stake in Alibaba Group, the Chinese e-commerce company. Yahoo is preparing to sell half its 40 percent stake back to Alibaba and the sale, which could raise about US$7 billion for Yahoo, would involve a share buy-back followed by an eventual flotation of the Chinese group. The deal may be announced as soon as today, a person with knowledge of the matter told Bloomberg. Yahoo shares were up five percent at US$15.60. The purchase may pave the way for Alibaba, China’s largest e-commerce provider, to pursue an initial public offering in the next 18 months, said the person. Alibaba, helped by shareholders Temasek Holdings Pte., Digital Sky Technologies, Silver Lake, plans to finance the purchase with cash and debt, the person added. The deal would be a welcome piece of good news for the struggling U.S. internet company. It has been losing ground to rivals Google and Facebook in the online advertising market. And on May 13, Scott Thompson quit as Yahoo chief executive after just five months in the post, following the discovery of inaccuracies in his CV.

Taiwan April exports to show slight pickup Orders for Taiwan’s exports in April rebounded slightly after a contraction in March, a Reuters poll showed, but the new figures should provide further evidence that a recovery for Asia’s exporters will be only a slow one. The April orders, to be announced today, should have improved with help from a pickup in demand for gadgets such as smartphones. Taiwan’s export orders are a leading indicator of demand for Asia’s exports and for hi-tech gadgets, and the figures will come after two months of contraction in Taiwan’s actual exports pointed to a rocky road ahead even though the economy has likely bottomed out in the first quarter. Singapore’s exports picked up in April, though its electronics sector showed weakness, while exports from South Korea, like Taiwan a big tech producer, fell in April, prompting the government to warn of a downgrade of its target for exports. All of Asia’s exports face a cloudy year as Europe’s financial woes show no sign of clearing up, while questions remain over the strength of U.S. demand and over the economy in China, Taiwan’s top export destination. The Markit/HSBC Taiwan PMI survey at the beginning of this month showed the slowest growth rate in three months in new export orders. However, demand for smartphones and tablets, particularly Apple Inc’s iPad, will provide support for Taiwan’s exporters.

Carlyle said to sell stake in Ta Chong Private equity firm Carlyle Group is in talks to sell its stake in Taiwan’s Ta Chong Bank to Yuanta Financial in a deal worth up to T$37 billion (US$1.25 billion), two sources familiar with the situation said. Carlyle is exiting its five-year investment in the small and slow-growing Taiwanese bank in a share swap deal that will also give it a 7 percent stake in the fast-expanding Yuanta, owner of the island’s biggest brokerage. The equity firm and Ta Chong’s other major shareholder, the bank’s founding Chen family, would swap their combined holding of about 70 percent for Yuanta shares, the sources said on Friday, declining to be identified because the information is confidential. Carlyle and Yuanta declined to comment. Ta Chong, which trails 20 other Taiwanese banks by assets, said in a statement to the island’s stock exchange on Friday that its board had not signed any merger agreement with any financial institution. The swap ratio has yet to be worked out. One of the sources said the deal would be based on a price of T$17 per Ta Chong share. That would be a 45 percent premium to the bank’s closing price on Friday.

MBdaily-May21.indd 10

China April home price drop Costs fell in a record 46 of 70 cities tracked by the government

hinese home prices fell in April for a second month in a row compared with year ago levels. The downtrend took hold as the government vowed to continue its more than two-year campaign to make housing more affordable. Average home prices in 70 major Chinese cities fell 1.2 percent last month from a year earlier, after a 0.7 percent fall in March, according to Reuters calculations from data published on Friday by the National Bureau of Statistics. The March decline was the first since Reuters began calculating the data in January 2011. Prices fell 0.3 percent month-on-month in April, for a seventh consecutive monthly decline. “Chinese home prices still have room to fall further. The inventory level is very high right now,” said Jian Chang, an economist with Barclays Capital in Hong Kong. A Reuters poll in April showed economists expected a further fall in home prices of 10 to 20 percent in the April-December period, after a slip of 5 percent in the first three months of the year.

China started its property tightening campaign, particularly curbing multiple home purchases, towards the end of 2009, after house prices surged in many cities and put home ownership out of reach for much of China’s burgeoning middle class. Prices had been boosted in large part by a 4 trillion yuan (US$635 billion) government stimulus package aimed at steering the economy clear of the global financial crisis. Premier Wen Jiabao has since vowed repeatedly to drive home prices back to a reasonable level, aiming to ensure social stability during this year’s once-in-a-decade reshuffle of the Communist Party’s top leadership.

Politically sensitive New home prices in April fell on a year-on-year basis in 46 of the 70 cities monitored by the bureau, indicating the falling trend was becoming widespread, while 43 cities saw declines in month-onmonth terms. Zhang Xiaohong, a senior official

at the Ministry of Housing and Urban-Rural Development, said on Thursday before the data were released that China’s real estate market would continue to correct in the next few months. He affirmed the government would keep clamping down on property speculation while supporting owner-occupier demand, dashing expectations among investors that China may be ready to relax some curbs to bolster economic growth. A recent series of economic indicators for April suggested that the economy may be slowing further in the second quarter rather than improving on the first quarter’s 8.1 percent annual growth rate – the slowest pace in almost three years. New home prices fell the steepest in Wenzhou, an eastern city plagued recently by the failure of many private businesses, dropping 12.3 percent in April from a year earlier. Prices fell 1.0 percent last month in Beijing and 1.3 percent in Shanghai from a year earlier. Reuters

Prices in Beijing fell one percent last month

Beijing to focus more on growth, says Wen Govt might take more aggressive steps to support the economy

hinese Premier Wen Jiabao said the government will focus more on bolstering growth, indicating policies may be loosened further as inflation moderates. China will “place stabilising growth at a more important position” while the government maintains active fiscal and prudent monetary policies, the Xinhua News Agency cited Mr Wen as saying recently in Hubei province. The twosentence report didn’t give details. Mr Wen’s remarks cited in the report, which didn’t mention concern about inflation, indicate the government might take more aggressive steps to support the economy after April data showed the slowdown may be sharper than expected. The central bank this

month cut banks’ reserve requirement ratio for the third time since November to boost liquidity. “Going forward, we expect a clearer easing in macro policy and a pickup in sequential growth,” Goldman Sachs Group Inc. economists said in a research note on May 18, adding liquidity conditions will probably be loosened while approvals on new infrastructure projects could be accelerated. Goldman Sachs lowered its forecast for China’s 2012 economic growth to 8.1 percent from a previously estimated 8.6 percent, joining similar moves by banks including Citigroup Inc. and UBS AG after April’s data trailed expectations. China’s exports and imports in April

expanded the least since the global financial crisis. Industrial output rose at the slowest pace since 2009, after the government tightened credit since last year to cool the property market and inflation. The country may expand at the slowest pace in 13 years in 2012, a Bloomberg News survey showed, with analysts forecasting a further 100 basis-point reduction in the reserves ratio by yearend. At the same time, the government’s concern about inflation may be eased as consumer prices climbed 3.4 percent from a year earlier in April, after surging to three-year high of 6.5 percent in July. Bloomberg

5/20/12 10:21 PM

12 |

business daily May 21, 2012

MARKETS Hang SENG INDEX PRICE

Day %

VOLUME

PRICE

Day %

VOLUME

25.85

-0.9578544

56695289

CHINA UNICOM HON

11.64

-0.6825939

42004308

ALUMINUM CORP-H

3.19

-1.54321

20667866

CITIC PACIFIC

11.54

-1.02916

4911700

BANK OF CHINA-H

2.84

-1.388889

549133896

BANK OF COMMUN-H

5.13

-2.099237

31241596

BANK EAST ASIA

26.55

3840862

BELLE INTERNATIO

13.54

-0.5873715

27920141

ESPRIT HLDGS

BOC HONG KONG HO

21.95

-0.678733

25166730

HANG LUNG PROPER

CATHAY PAC AIR

12.4

0.1615509

13911202

HANG SENG BK

CHEUNG KONG

91.7

-1.556629

8350485

CHINA COAL ENE-H

7.44

-1.06383

33392456

CHINA CONST BA-H

5.18

-1.520913

429418245

18.26

-0.6528836

50013561

-1.498929

3935072

CHINA MOBILE

83.1

-1.364985

22678847

CHINA OVERSEAS

14.8

-2.887139

46901974

CHINA PETROLEU-H

7.18

-1.101928

113542353

CHINA RES ENTERP

25.8

-3.551402

4431457

NAME AIA GROUP LTD

CHINA LIFE INS-H CHINA MERCHANT

12.92

-0.6153846

8782080

CHINA RES POWER

CHINA RES LAND

-2.912621

7486623

CHINA SHENHUA-H

28.3

-3.412969

24630300

NAME

CLP HLDGS LTD CNOOC LTD COSCO PAC LTD

64.3

1.02121

3516315

14.34

0.5610098

63978451

NAME

PRICE

Day %

58.1

1.662292

4290912

SINO LAND CO

11.38

-0.6980803

17676465

SUN HUNG KAI PRO

87.15

-0.7403189

7540166

SWIRE PACIFIC-A

82.75

-0.2411091

1709538

TENCENT HOLDINGS

224

-0.4444444

5930085

POWER ASSETS HOL

9.47

-2.270382

8353896

12.56

-4.122137

22242371

TINGYI HLDG CO

20.2

-1.222494

5823924

24.2

-2.024291

10037829

WANT WANT CHINA

9.22

0.3264418

21029952

102.1

0.09803922

3256771

WHARF HLDG

40.3

-0.6165228

4153962

3660769

HENDERSON LAND D

38.35

0.2614379

HENGAN INTL

77.35

0.781759

2549941

HONG KG CHINA GS

18.06

-0.7692308

16611800

MOVERS

HONG KONG EXCHNG

109.6

-1.083032

9414508

HSBC HLDGS PLC

63.75

-3.115502

37233675

HUTCHISON WHAMPO

66.95

-2.405248

13543652

4.64

-0.8547009

430315781

HIGH

19907.23

LI & FUNG LTD

14.26

-1.246537

32701150

MTR CORP

25.55

0.1960784

2155692

LOW

18644.18

NEW WORLD DEV

8.35

-4.022989

24567953

PETROCHINA CO-H

10.1

-0.1976285

74974928

PING AN INSURA-H

57.9

-1.362862

16904821

IND & COMM BK-H

VOLUME

1 20000

INDEX 18951.85

52W (H) 23707.94 (L) 16170.35

18600

15-May

18-May

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.65

-1.851852

86998188

DAQIN RAILWAY -A

7.45

-0.1340483

47801698

AIR CHINA LTD-A

6.11

-1.292407

15992459

DATANG INTL PO-A

5.35

0.3752345

3209846

ALUMINUM CORP-A

6.81

-0.4385965

16500972

DONGFANG ELECT-A

21.43

-0.8329477

8073512

ANHUI CONCH-A

16.1

-0.9230769

22103578

EVERBRIG SEC -A

13.69

-2.074392

16272524

BANK OF BEIJIN-A

9.82

-2.191235

30964543

GD MIDEA HOLDING

13.65

-1.727862

BANK OF CHINA-A

2.99

-0.6644518

18702284

GD POWER DEVEL-A

2.59

NAME

PRICE

DAY %

VOLUME

34.15

1.035503

12857627

SHANG PUDONG-A

8.86

-1.22631

61950167

SHANGHAI ELECT-A

5.46

-5.208333

17137891

SHANXI LU'AN -A

26.34

-0.9774436

7097693

13366079

SHANXI XINGHUA-A

73.72

937858

36645281

SHANXI XISHAN-A

17.22

-3.475336

24132042

15.72

-1.380176

15786319

7.4

-1.464714

11316555

SHANDONG GOLD-MI

BANK OF COMMUN-A

4.67

-0.8492569

53374110

GF SECURITIES-A

31.81

-3.897281

17893147

SHENZ DVLP BK-A

BAOSHAN IRON & S

4.79

-0.6224066

20705553

GREE ELECTRIC

21.63

-0.7798165

10461419

SHENZEN OVERSE-A

BYD CO LTD -A

24.2

-3.66242

3753917

GUIZHOU PANJIA-A

30.62

-1.858974

5171888

CHINA CITIC BK-A

4.27

-1.157407

12400451

HAITONG SECURI-A

10.06

-1.853659

82430773

SUNING APPLIAN-A

CHINA CNR CORP-A

4.16

-1.886792

23287483

HANGZHOU HIKVI-A

46.2

459713

TSINGTAO BREW-A

CHINA COAL ENE-A

9.05

-1.308615

6424052

HEBEI IRON-A

2.98

-0.6666667

21474159

WEICHAI POWER-A

CHINA CONST BA-A

4.5

-0.6622517

43243956

HENAN SHUAN-A

-1.083373

1347094

WULIANGYE YIBIN

CHINA COSCO HO-A

5.05

-1.559454

13053739

HUATAI SECURIT-A

10.88

-0.3663004

46409106

CHINA CSSC HOL-A

32.83

-4.229872

9929080

HUAXIA BANK CO

9.96

-4.961832

26766333

CHINA EAST AIR-A

4.03

-0.982801

10915272

IND & COMM BK-A

4.25

-1.847575

CHINA EVERBRIG-A

2.95

-0.6734007

31552857

INDUSTRIAL BAN-A

13.42

-1.25092

CHINA LIFE INS-A

17.74

-1.934771

10238872

INNER MONG BAO-A

43.59

-1.178871

CHINA MERCH BK-A

11.56

-1.950806

68483829

INNER MONG YIL-A

22.45

-1.14487

CHINA MERCHANT-A

12.81

-0.9280742

16242017

INNER MONGOLIA-A

6.26

-2.034429

CHINA MERCHANT-A

22.79

0.3080986

6786602

JIANGSU HENGRU-A

27.9

-2.1396

2917205

CHINA MINSHENG-A

6.5

-0.7633588

89305898

JIANGSU YANGHE-A

156.97

-0.01910828

1041215

CHINA NATIONAL-A

6.11

-5.855162

56441874

JIANGXI COPPER-A

25.12

-1.219033

10494946

CHINA OILFIELD-A

17.98

-1.533406

5767717

JINDUICHENG -A

13.62

-2.014388

6422935

CHINA PACIFIC-A

20.97

-1.410437

14874607

JIZHONG ENERGY-A

19.4

8596696 2627778

15.35

-0.8397933

1141924

9.82

-0.5065856

37664142

36.1

-1.79543

3137788

31.32

-1.910429

3612407

33.55

-2.043796

22490781

XIAMEN TUNGSTEN

44.98

-0.8158765

5937481

XINJIANG GUANG-A

26.27

-2.160149

5934620

55289851

YANGQUAN COAL -A

19.27

12042866

36846165

YANTAI CHANGYU-A

94.69

-0.8377841

482910

69596489

YANTAI WANHUA-A

14.08

-1.538462

8331667

6953869

YANZHOU COAL-A

22.67

-2.410676

6327663

69232691

YUNNAN BAIYAO-A

51.31

-0.2333269

1341618

ZHONGJIN GOLD

22.7

1.203745

16453868

ZIJIN MINING-A

4.12

-0.2421308

60903424

ZOOMLION HEAVY-A

9.61

-2.634245

30317569

15.99

-3.790614

19952361

CHINA PETROLEU-A

6.92

-1.564723

24699288

KWEICHOW MOUTA-A

217.92

-0.9049156

CHINA RAILWAY-A

2.6

-0.7633588

20519037

LUZHOU LAOJIAO-A

41.84

-2.128655

8780037

CHINA RAILWAY-A

4.22

-0.7058824

15863383

METALLURGICAL-A

2.6

18228366

CHINA SHENHUA-A

25.64

-1.384615

10250811

NARI TECHNOLOG-A

20.05

-1.86001

4257460

CHINA SHIPBUIL-A

5.72

-3.541315

36635263

NINGBO PORT CO-A

2.82

6.015038

189399310

CHINA SHIPPING-A

3.06

-1.290323

15231422

PANGANG GROUP -A

7.77

-4.192355

51696074

SINOVEL WIND-A

ZTE CORP-A

MOVERS

CHINA SOUTHERN-A

4.64

-0.8547009

21635307

PETROCHINA CO-A

9.51

-1.040583

21076381

3.22

-1.529052

50860130

PING AN INSURA-A

41.41

-2.334906

26236638

HIGH

2618.97

CHINA UNITED-A

4.12

-1.435407

65305612

POLY REAL ESTA-A

12.73

-1.241272

9513800

LOW

2568.75

CHINA VANKE CO-A

8.58

-1.152074

47731890

QINGDAO HAIER-A

12.1

34751156

6.75

0.148368

21988089

QINGHAI SALT-A

31.98

-2.112029

5279586

CITIC SECURITI-A

13.07

-1.803156

84234242

SAIC MOTOR-A

15.18

-1.874596

17875532

CSR CORP LTD -A

4.67

-2.096436

17592269

SANY HEAVY INDUS

13.68

-2.494654

18539363

INDEX 2573.97

CHINA STATE -A

CHINA YANGTZE-A

272

2620

52W (H) 3140.10 (L) 2254.56 15-May

18-May

2560

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.23

-2.121212

188404374

AIR CHINA LTD-H

5.03

-3.824092

ALUMINUM CORP-H

3.19

ANHUI CONCH-H

PRICE

DAY %

VOLUME

CHINA PACIFIC-H

22.3

-1.978022

13169270

17367687

CHINA PETROLEU-H

7.18

-1.101928

113542353

-1.54321

20667866

CHINA RAIL CN-H

5.6

3.703704

22.5

3.686636

28821733

CHINA RAIL GR-H

2.72

BANK OF CHINA-H

2.84

-1.388889

549133896

CHINA SHENHUA-H

BANK OF COMMUN-H

5.13

-2.099237

31241596

CHINA TELECOM-H

BYD CO LTD-H

15.4

-2.900378

4479501

DONGFENG MOTOR-H

CHINA CITIC BK-H

4.04

-3.579952

70061354

GUANGZHOU AUTO-H

CHINA COAL ENE-H

7.44

-1.06383

33392456

HUANENG POWER-H

CHINA COM CONS-H

6.51

-1.363636

19136017

CHINA CONST BA-H

5.18

-1.520913

429418245

CHINA COSCO HO-H

NAME

PRICE

DAY %

VOLUME

13.32

-1.333333

17418026

ZIJIN MINING-H

2.43

3.404255

84698894

28738751

ZOOMLION HEAVY-H

9.38

-3.893443

23205075

2.255639

27789000

ZTE CORP-H

16.14

-4.270463

6707501

28.3

-3.412969

24630300

3.64

-1.886792

84803598

12.58

-5.413534

20659888

6.4

10219086

4.83

2.765957

41425854

IND & COMM BK-H

4.64

-0.8547009

430315781

JIANGXI COPPER-H

16.08

0.5

17632930

3.37

2.743902

34277363

PETROCHINA CO-H

10.1

-0.1976285

74974928

18.26

-0.6528836

50013561

PICC PROPERTY &

8.56

-4.570792

51506856

CHINA LONGYUAN-H

4.73

-2.674897

10297000

PING AN INSURA-H

57.9

-1.362862

16904821

CHINA MERCH BK-H

14.34

-1.510989

26869394

SHANDONG WEIG-H

8.29

-0.7185629

5640000

CHINA LIFE INS-H

NAME YANZHOU COAL-H

MOVERS

1 10100

INDEX 9577.18 HIGH

10084.59

LOW

9398.4

CHINA MINSHENG-H

7.11

-1.79558

35038900

SINOPHARM-H

17.88

-0.7769145

3823520

52W (H) 13317.51

CHINA NATL BDG-H

9.04

3.078677

89337500

TSINGTAO BREW-H

46.35

-3.937824

3301300

(L) 8058.58

CHINA OILFIELD-H

10.4

-0.952381

8637032

WEICHAI POWER-H

31.15

-4.153846

3426633

NAME

PRICE DAY %

9300

15-May

18-May

FTSE TAIWAN 50 INDEX NAME

PRICE DAY %

Volume

ACER INC

30.3

-5.754277

22729790

FORMOSA PLASTIC

ADVANCED SEMICON

27.5

-2.48227

21275160

FOXCONN TECHNOLO

33.25

-2.492669

3322748

FUBON FINANCIAL

ASUSTEK COMPUTER

296

-3.109656

4508562

HON HAI PRECISIO

AU OPTRONICS COR

12.1

-5.836576

72319354

HOTAI MOTOR CO

CATCHER TECH

173.5

-6.216216

21789208

HTC CORP

CATHAY FINANCIAL

28.75

-1.372213

16466764

HUA NAN FINANCIA

CHANG HWA BANK

15.35

-2.539683

13796578

LARGAN PRECISION

CHENG SHIN RUBBE

72.6

-1.891892

5406725

LITE-ON TECHNOLO

CHIMEI INNOLUX C

12.05

-5.490196

59565033

MEDIATEK INC

262

-3.853211

7215886

7.26

-1.891892

46301905

MEGA FINANCIAL H

20.8

-3.480278

33807220

28 -0.5328597

22248995

NAN YA PLASTICS

57.2 -0.3484321

9446158

PRESIDENT CHAIN

ASIA CEMENT CORP

CHINA DEVELOPMEN CHINA STEEL CORP

NAME

77.6

-1.020408

8591533

-3.482587

10899787

TPK HOLDING CO L

29.05

-2.680067

19123025

TSMC

83.2

-2.917153

36291970

UNI-PRESIDENT

176.5

-1.944444

660116

UNITED MICROELEC

400.5

-3.26087

13057946

15.8

-1.863354

545 35.5

PRICE DAY %

Volume

95.9 -0.9297521

7586944

TAIWAN MOBILE CO

378.5

-4.298357

7469069

81.8

-3.877791

57620539

46.05

1.655629

17524362

13.25

-5.357143

60652808

WISTRON CORP

40.5

-3.341289

8450300

9885447

YUANTA FINANCIAL

12.5

-3.474903

30530950

1.113173

4649340

YULON MOTOR CO

47.2

-2.277433

5695305

-2.872777

5561907

CHINATRUST FINAN

16.8

-2.608696

41835103

157.5

0.3184713

2052070

CHUNGHWA TELECOM

90.3 -0.7692308

9235616

QUANTA COMPUTER

77.7

-6.045949

11014263

COMPAL ELECTRON

31.6

-4.242424

9327799

SILICONWARE PREC

31.15

-2.351097

8596612

DELTA ELECT INC

88.2

-2

8706601

SINOPAC FINANCIA

9.5

-2.363823

16983923

FAR EASTERN NEW

31.35

-2.336449

5359977

SYNNEX TECH INTL

67.2

-2.183406

4269322

FAR EASTONE TELE

68.1

-1.589595

4204285

TAIWAN CEMENT

-1.990812

14894306

FIRST FINANCIAL

16.8

-2.040816

14476749

TAIWAN COOPERATI

17.1

-2.005731

7468773

FORMOSA CHEM & F

-2.377972

6641409

TAIWAN FERTILIZE

68.5

-3.385049

2487798

FORMOSA PETROCHE

83.1

-3.033839

2884719

TAIWAN GLASS IND

27.95

-2.443281

1882237

MOVERS

0 5100

INDEX 4943.91 HIGH

5093.02

LOW

4943.91

52W (H) 6247.96 (L) 4643.05

4900

15-May

18-May

May 21, 2012 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GALAXY ENTERTAINMENT

Max 20.30

Average 19.51

MELCO CROWN ENTERTAINMENT

Min 19.26

20.40

31.80

13.00

20.16

31.56

12.94

19.92

31.32

12.88

19.68

31.08

12.82

19.44

30.84

12.76

19.20

Last 20.00

Max 31.75

SANDS CHINA LTD

Max 26.90

Average 26.41

Average 31.00

Min 30.60

Min 26.10

Last 26.60

Average 12.51

Min 12.38

Last 12.74

WYNN MACAU LTD 19.60

26.74

14.7

19.48

26.58

14.6

19.36

26.42

14.5

19.24

26.26

14.4

19.12

26.10

14.3 Max 14.72

Average 14.54

YTD %

(H) 52W

(L) 52W

WTI CRUDE FUTURE Jun12

91.48

-1.166810717

-8.041817451

111.3000031

76.87999725

BRENT CRUDE FUTR Jul12

107.14

-0.325611685

1.429518129

125.6100006

94.34999847

GASOLINE RBOB FUT Jun12

288.95

0.39260649

5.417730755

336.8899822

245.539999

GAS OIL FUT (ICE) Jun12

907.75

-1.1703865

0.861111111

1046.25

809.25

2.742

5.705474171

-13.82778127

5.09400034

1.981999993

HEATING OIL FUTR Jun12

283

-0.666900667

-0.558698479

331.5699816

256.0600042

1593.03

1.2

1.7969

1921.17

1478.78

Platinum Spot $/Oz

1455.5

0.1893

4.3743

1915.75

1339.25

Palladium Spot $/Oz

603.5

-7.6511

848.36

537.54

LME ALUMINUM 3MO ($)

2068

0.681596884

2.376237624

2695

1955.75

LME COPPER 3MO ($)

7650

0.013073604

0.657894737

9905

6635

CORN FUTURE

635.5

1.68

-3.894139887

795

572.25

695.25

5.701254276

1.31147541

957.5

592.25

Gold Spot $/Oz

Jul12

WHEAT FUTURE(CBT) Jul12 SOYBEAN FUTURE Jul12

1405

-2.294853964

14.50692747

1512.5

1125.5

179.15

-0.527484731

-22.84668389

290.75

172.1999969

SUGAR #11 (WORLD) Jul12

20.47

-1.869606903

-9.264184397

27.02999878

20.06999969

COTTON NO.2 FUTR Jul12

77.99

1.748206132

-14.58766838

117

76.25999451

COFFEE 'C' FUTURE Jul12

Min 14.36

Last 14.64

19.00 Max 19.42

Average 19.22

PRICE MAJORS

ASIA PACIFIC

CROSSES

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

Last 19.30

Min 19.08

NAME

PRICE

YTD %

-0.445 0.1266 0.6491 0.6458 0.329 0.0337 0.0283 -0.0474 0.1102 -0.191 -0.2274 -0.2331 -0.5884 -0.2781 0.7778 -0.0092 -0.484 0.0884 -0.6385 -0.2971 0.0097

(H) 52W

-3.5753 1.7629 -0.1703 -1.3965 -2.6702 -0.0075 0.0013 -0.5246 -2.4989 0.4457 1.6782 2.3008 1.5638 -3.0053 0.8357 1.3021 3.1717 1.2258 1.3894 -1.3072 -0.0097

(L) 52W

1.1081 1.6618 0.9596 1.4697 84.18 8.0449 7.8113 6.5069 54.91 31.96 1.3199 30.715 44.35 9398 88.637 1.26462 0.90835 9.514 11.7768 117.9 1.0311

0.9388 1.5235 0.7071 1.2624 75.35 7.9823 7.7529 6.2769 43.855 29.63 1.1992 28.562 41.879 8458 72.057 1.00749 0.79505 7.9674 10.1015 97.04 1.0288

(H) 52W

(L) 52W

2.88

-1.706485

30.90909

3.25

1.88

2663662

8.7

-1.805869

7.540171

9.29

7.45

1426256

AMAX HOLDINGS LT

0.078

-3.703704

-10.34483

0.131

0.06

1396500

BOC HONG KONG HO

21.95

-0.678733

19.29348

24.45

14.24

25166730

CENTURY LEGEND

0.233

1.304346

0.41

0.204

3.05

-1.612903

8.928573

4.79

2.3

10000

CHINA OVERSEAS

14.8

-2.887139

14.02158

17.86

9.99

46901974

CHINESE ESTATES

10.16

-3.969754

-18.72

14.1

10.04

98437

CHOW TAI FOOK JE

10.12

-3.619048

-27.29885

15.16

9.98

12342000

EMPEROR ENTERTAI

1.16

-2.521008

4.504503

2.09

0.97

1008000

FUTURE BRIGHT

0.88

2.325581

109.5238

1.09

0.3

3696000

40.44944

24.95

8.69

27623389 3256771

CROWN LTD

CHEUK NANG HLDGS

World Stock MarketS - Indices

DAY %

0.9844 1.5817 0.9397 1.278 79.02 8.0002 7.7673 6.3282 54.425 31.41 1.2752 29.598 43.165 9350 77.782 1.20115 0.80777 8.0357 10.2278 100.98 1.03

MACAU RELATED STOCKS ARISTOCRAT LEISU

DAY % YTD %

VOLUME CRNCY

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

12369.38

-0.5875834

1.24264

13338.66016

10404.49

NASDAQ COMPOSITE INDEX

2778.79

-1.240364

6.665265

3134.17

2298.89

GALAXY ENTERTAIN

FTSE 100 INDEX

5267.62

-1.325496

-5.467415

6084.08

4791.01

HANG SENG BK

102.1

0.09803922

10.79761

125

84.4

HOPEWELL HLDGS

19.98

-1.333333

0.6042265

24.903

18.56

528000

HSBC HLDGS PLC

63.75

-3.115502

8.050847

82.15

37233675

DAX INDEX

6271.22

-0.5981969

6.3216

7523.53

4965.8

NIKKEI 225

8611.31

-2.988535

1.844512

10255.15

8135.79

HUTCHISON TELE H

3.47

-1.699717

16.05351

3.6

2.13

3988562

HANG SENG INDEX

18951.85

-1.297229

2.807031

23707.94922

16170.35

LUK FOOK HLDGS I

17.08

-0.5820722

-36.97417

46.15

16.56

2618600

CSI 300 INDEX

2573.976

-1.528955

9.729721

3140.102

2254.567

MELCO INTL DEVEL

6.44

-2.865762

11.61179

10.76

4.3

6960876

TAIWAN TAIEX INDEX

7151.19

-2.794433

1.118622

9089.47

6609.11

MGM CHINA HOLDIN

12.74

-1.393189

32.81689

17.183

7.6

9294000

KOSPI INDEX

1782.46

-3.402267

-2.370547

2192.83

1644.11

MIDLAND HOLDINGS

3.53

1.146132

-12.62376

5.48

2.95

964581

S&P/ASX 200 INDEX

4046.458

-2.668847

-0.249042

4756.2

3765.9

NEPTUNE GROUP

0.101

-0.9803922

-9.00901

0.157

0.08

500000

NEW WORLD DEV

8.35

-4.022989

33.38658

12.4

6.13

24567953

3980.496

-1.610325

4.147161

4234.734

3217.951

SANDS CHINA LTD

26.6

-1.481481

21.18451

33.05

14.9

11689660

1532.46

-0.7609069

0.1130167

1609.33

1310.53

SHUN HO RESOURCE

1.18

1.32

0.82

SHUN TAK HOLDING

2.68

-2.545455

4.72316

4.686

2.241

5760576

SJM HOLDINGS LTD

14.64

-2.008032

17.06815

20.711

10.079

10042242

SMARTONE TELECOM

13.98

-0.2853067

4.01786

18.5

9.8

1927796

WYNN MACAU LTD

19.28

-0.5159959

-1.128205

27.48

14.807

10049400

JAKARTA COMPOSITE INDEX FTSE Bursa Malaysia KLCI

12.70

14.8

DAY %

NAME

Max 12.92

26.90

PRICE

NATURAL GAS FUTR Jun12

AGRICULTURE

30.60

CURRENCY EXCHANGE RATES

NAME

METALS

Last 31.15

SJM HOLDINGS LTD

Commodities ENERGY

MGM CHINA HOLDINGS

NZX ALL INDEX

781.933

-0.6117603

7.143418

814.431

700.441

PHILIPPINES ALL SHARE IX

3266.08

-2.046888

7.259019

3518.96

2695.06

HSBC Dragon 300 Index Singapor

538.44

-2.53

8.48

STOCK EXCH OF THAI INDEX

1154.44

-1.629231

12.59314

1247.72

843.69

ASIA ENTERTAINME

4.64

-6.262626

-21.08844

10.8692

4.6148

243794

HO CHI MINH STOCK INDEX

434.95

-1.723982

23.72352

492.44

332.28

BALLY TECHNOLOGI

44.27

-1.818585

11.90596

49.32

24.74

677710

Laos Composite Index

1021.07

-1.080196

13.52033

1165.57

876.33

BOC HONG KONG HO

2.78

-0.7142857

15.96924

3.15

1.81

9500

GALAXY ENTERTAIN

2.52

-0.7874016

34.75936

3.24

1.08

33000 2746239

INTL GAME TECH

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

-0.990099

-18.60465

19.15

13.38

JONES LANG LASAL

70.14

0.2859594

14.4956

99.89

46.01

394444

LAS VEGAS SANDS

46.38

-1.633086

8.542009

62.09

36.08

13749516

MELCO CROWN-ADR

12.06

1.005025

25.36383

16.15

7.05

10009393

MGM CHINA HOLDIN

1.65

38.45846

2.21314

1.00254

695

MGM RESORTS INTE

10.33

-0.6730769

-0.9587757

16.05

7.4

16396374

SHUFFLE MASTER

15.11

28.92491

18.77

7.35

464529

1.86

-1.06383

15.70238

2.60368

1.26239

7900

101.942

0.3959031

-7.736445

165.4931

101.02

3069183

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business daily May 21, 2012

Opinion The economic case for same-sex marriage Betsey Stevenson

Justin Wolfers

Professors at the University of Pennsylvania’s Wharton School

he national discussion about same-sex marriage is heating up. Just last week, North Carolina voted to prohibit the practice, and, for the first time, President Barack Obama clearly came out in favour of it. The debate, which has focused on our evolving views on sexuality, also mirrors a deeper generational shift in how we view and experience marriage. For our grandparents’ generation, marriage was about separate roles, separate spheres and specialisation. Gary Becker, an economist at the University of Chicago, won the Nobel Prize partly for describing the family as an economic institution – a bit like a small firm that employs people with different skills to produce both income and a well-run household. In Becker’s view, the joining of husband and wife yields a more productive firm, because it allows one spouse to specialise in earning income from working in the market, while the other specialises in the domestic sphere. The division of labour allows for greater productivity, just as it does in the workplace. The different skills required for these separate roles provide an economic rationale for the advice your grandmother may have offered, that “opposites attract”.

Traditional notion Naturally, couples who have bought into the traditional notion of marriage – with women taking care of the home and men financially supporting them – find the concept of same-sex marriage foreign. Same-sex relationships are less likely to involve traditional roles and separate spheres, as evidenced by the fact that the partners are more likely to both work outside the home. But heterosexual couples in more recent generations are also less likely to aspire to separate-sphere marriages. Economists describe a “second Industrial Revolution” in which washing machines, dishwashers and microwave ovens have reduced the value to the

family “firm” of employing a domestic specialist. Cheap clothes can be imported from China, rather than sewn at home. Healthy meals can be purchased from the freezer at Trader Joe’s. What’s more, legal and social changes have broken down many of the barriers keeping women out of the labour market. Explicit discrimination has declined. Women have gained more control over their fertility. All these developments have increased the opportunity cost of having a spouse stay home, because that spouse now has greater value in the marketplace. As a result, our grandparents’ marriages, in which husband and wife have separate roles and spheres, are no longer so popular. Twoearner couples have become the norm, and families spend less time on housework. One might have expected marriage to disappear as its traditional benefits faded. Instead, it has evolved. Modern marriage offers different benefits. Today, we search for a soul mate rather than a good homemaker or provider. We are more likely

to regard marriage as a forum for shared experiences and passions. Viewed through an economic frame, modern partnerships are based upon “consumption complementarities” – the joy of sharing things and experiences – rather than the production-based gains that motivated traditional marriage. Consistent with this, co-parenting has replaced the separate roles

One might have expected marriage to disappear as its traditional benefits faded. Instead, it has evolved. Modern marriage offers different benefits

of nurturer and disciplinarian. We have called this new model of sharing lives “hedonic marriage”. These are marriages of equality in which the rule “opposites attract” no longer applies in the same way, because couples with more similar interests and values can derive greater benefits. So likes are now more likely to marry each other.

Changing nature The changing nature of heterosexual marriage has made the rite more attractive to same-sex couples. In turn, the gay and lesbian community has chosen to spend political capital advocating for greater access to marriage. For heterosexuals who have embraced the modern notion of marriage, the idea of samesex marriage seems natural. These couples aren’t any different from them. They love and support each other, raise kids together and are committed to each other. They share values, desires and interests. Not allowing them to marry is as arbitrary as not allowing couples of

different races, ethnicities or religions to marry. It is no coincidence that many of the opponents of same-sex marriage are also opponents of the ongoing shift to marriages of equality. Theirs is a futile battle. The reach of markets will keep expanding, allowing individuals and families to reap greater returns by selling their specialised skills and services outside the home. Technological change will further undermine the benefits of specialisation within the family. Improvements in women’s education will continue to raise the opportunity cost of staying at home. The implication is that ultimately, traditional marriages are doomed. And indeed, countries in which gender and social norms have been the slowest to evolve have seen the biggest declines in fertility and marriage. The best way to let marriage thrive in the 21st century is to embrace the new model of equality and to welcome all couples, regardless of sexual orientation. Bloomberg View

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 21, 2012 business daily | 15

OPINION Business

Greece must exit

Leading reports from Asia’s best business newspapers

Nouriel Roubini

wires

Chairman of Roubini Global Economics and Professor of Economics at the Stern School of Business, New York University

Taipei Times

President Ma Ying-jeou on Saturday said that poor communication in explaining major policies to the public had given rise to public discontent and that he should include more public input in formulating policies. Following a protest organised by opposition parties, Mr Ma said he accepted people’s dissatisfaction with government policies and promised to improve the administration’s performance during his second term. He listed four areas where he said the government needs to do more: the number of jobs created, the unemployment rate, the low increase in average salaries and the wealth gap. Government information shows that over the past four years, unemployment has increased from 3.84 percent to 4.17 percent.

Business Inquirer

Philippine shares slid almost 3 percent, as escalating problems in Europe made investors head for the exits. The market saw its worst performance for the year this week, giving up 5.4 percent or 278.72 points at Friday’s close as all eyes were focused on fiscal contagion that threatens to break up the eurozone. The main-share Philippine Stock Exchange index lost 137.6 points or 2.74 percent to finish at 4,879.42. “What’s key is Europe. Foreigners are selling because of the redemptions overseas so because they’re losing a lot of money in Europe, they take profits here,” said Carlos Jalandoni, vice president at Bank of the Philippine Islands asset management and trust group. The fund manager said the recent correction was only a “temporary aberration” and a “necessary pain” but that the index would eventually recover and reach new heights of 5,500 to 5,800 later in the year.

Jakarta Globe

Indonesian miners decry the wider export tax scheme as the Finance Ministry expanded the list of minerals that can be taxed from 14 to 65. The levy will cripple local operators, especially small ones, said one mining association. “The government needs to consider how our mining commodities fare in the global market right now,” Poltak Sitanggang, the chairman of the Indonesian Mineral Entrepreneurs Association, said. The additional minerals that will be taxed at 20 percent include titanium quartz, jade and marble, “because all of them have the same raw shape as ore,” Finance Minister Agus Martowardojo said last week.

he Greek euro tragedy is reaching its final act: it is clear that either this year or next, Greece is highly likely to default on its debt and exit the eurozone. Postponing the exit after the June election with a new government committed to a variant of the same failed policies (recessionary austerity and structural reforms) will not restore growth and competitiveness. Greece is stuck in a vicious cycle of insolvency, lost competitiveness, external deficits, and ever-deepening depression. The only way to stop it is to begin an orderly default and exit, coordinated and financed by the European Central Bank, the European Union, and the International Monetary Fund (the “Troika”), that minimises collateral damage to Greece and the rest of the eurozone. Greece’s recent financing package, overseen by the Troika, gave the country much less debt relief than it needed. But, even with significantly more public-debt relief, Greece could not return to growth without rapidly restoring competitiveness. And, without a return to growth, its debt burden will remain unsustainable. But all of the options that might restore competitiveness require real currency depreciation. The first option, a sharp weakening of the euro, is unlikely, as Germany is strong and the ECB is not aggressively easing monetary policy. A rapid reduction in unit labour costs, through structural reforms that increased productivity growth in excess of wages, is just as unlikely. It took Germany ten years to restore its competitiveness this way; Greece cannot remain in a depression for a decade. Likewise, a rapid deflation in prices and wages, known as an “internal devaluation,” would lead to five years of

ever-deepening depression. If none of those three options is feasible, the only path left is to leave the eurozone. A return to a national currency and a sharp depreciation would quickly restore competitiveness and growth.

No painless route Of course, the process would be traumatic – and not just for Greece. The most significant problem would be capital losses for core eurozone financial institutions. Overnight, the foreign euro liabilities of Greece’s government, banks, and companies would surge. Yet these problems can be overcome. Argentina did so in 2001, when it “pesofied” its dollar debts. The United States did something similar in 1933, when it depreciated the dollar by 69 percent and abandoned the gold standard. A similar “drachmatisation” of euro debts would be necessary and unavoidable. Losses that eurozone banks would suffer would be manageable if the banks were properly and aggressively recapitalised. Avoiding a postexit implosion of the Greek

An orderly euro exit by Greece implies significant economic pain. But watching the slow, disorderly implosion of the Greek economy and society would be much worse

banking system, however, might require temporary measures, such as bank holidays and capital controls, to prevent a disorderly run on deposits. The European Financial Stability Facility/European Stability Mechanism (EFSF/ESM) should carry out the necessary recapitalisation of the Greek banks via direct capital injections. European taxpayers would effectively take over the Greek banking system, but this would be partial compensation for the losses imposed on creditors by drachmatisation. Greece would also have to restructure and reduce its public debt again. The Troika’s claims on Greece need not be reduced in face value, but their maturity would have to be lengthened by another decade, and the interest on it reduced. Further haircuts on private claims would also be needed, starting with a moratorium on interest payments. Some argue that Greece’s real GDP would be much lower in an exit scenario than it would be during the hard slog of deflation. But that is logically flawed: even with deflation, real purchasing power would fall, and the real value of debts would rise (debt deflation), as the real depreciation occurs. More importantly, the exit path would restore growth right away, via nominal and real depreciation, avoiding a decade-long depression. And trade losses imposed on the eurozone by the drachma depreciation would be modest, given that Greece accounts for only 2 percent of eurozone GDP.

Drachma ex machina Reintroducing the drachma risks exchange-rate depreciation in excess of what is necessary to restore competitiveness, which would be inflationary and impose greater losses on drachmatised external debts. To mi-

nimise that risk, the Troika reserves currently devoted to the Greek bailout should be used to limit exchange-rate overshooting; capital controls would help, too. Those who claim that contagion from a Greek exit would drag others into the crisis are also in denial. Other peripheral countries already have Greek-style problems of debt sustainability and eroded competitiveness. Portugal, for example, may eventually have to restructure its debt and exit the euro. Illiquid but potentially solvent economies, such as Italy and Spain, will need support from Europe regardless of whether Greece exits; indeed, without such liquidity support, a selffulfilling run on Italian and Spanish public debt is likely. The substantial new official resources of the IMF and ESM – and ECB liquidity – could then be used to ringfence these countries, and banks elsewhere in the eurozone’s troubled periphery. Regardless of what Greece does, eurozone banks now need to be rapidly recapitalised, which requires a new EU-wide program of direct capital injections. The experience of Iceland and many emerging markets over the past 20 years shows that nominal depreciation and orderly restructuring and reduction of foreign debts can restore debt sustainability, competitiveness, and growth. As in these cases, the collateral damage to Greece of a euro exit will be significant, but it can be contained. Like a doomed marriage, it is better to have rules for the inevitable divorce that make separation less costly to both sides. Make no mistake: an orderly euro exit by Greece implies significant economic pain. But watching the slow, disorderly implosion of the Greek economy and society would be much worse. © Project Syndicate

16 |

business daily May 21, 2012

CLOSING Manulife, Metlife bid for ING Asia

KDI cuts growth outlook

Manulife Financial Corp and Metlife are among the companies that have submitted first round bids for ING’s entire Asia life insurance business, sources said, in what could be the largest Asia M&A insurance deal ever. ING’s long awaited sale of Asian life insurance and the asset management units will help the Dutch bancassurer to partly repay the 3 billion euros (US$3.81 billion) of state aid plus the 50 percent premium it still owes the Dutch government. The bids were submitted late on Friday and the indicative offers ranged between US$7.6-US$8.9 billion, according to one source.

South Korea’s state-run think tank yesterday cut the nation’s growth forecast for this year to 3.6 percent from 3.8 percent estimated in November, citing weakening demand amid a global slowdown. The Korea Development Institute (KDI), in its twice-yearly economic forecast report, said however the global economy would likely pick up pace in 2013 to help Asia’s fourth-largest economy to expand 4.1 percent that year. The Bank of Korea in April also slashed the nation’s growth outlook for this year to 3.5 percent from 3.7 percent estimated in December. South Korea’s gross domestic product grew 3.6 percent in 2011.

Taiwan’s Ma vows trade liberalisation President signals no China change as protests mar start of second term Adela Lin and Yu-huay Sun

aiwan President Ma Yingjeou pledged to improve trade ties with neighbouring countries to bolster economic growth as he starts his second and final term amid protests from opposition supporters. “We must step up the pace of liberalisation,” he said in his inaugural speech in Taipei yesterday. “We must eliminate artificial trade and investment barriers and create a genuinely free and open economic environment for Taiwan that is more in line with international practices.” Mr Ma won a second term when he defeated challenger Tsai Ingwen, the Democratic Progressive Party chairwoman, in January. The victory was seen as affirmation of his effort to improve Taiwan’s relationship with China after decades of strained ties. He faces the task of boosting growth in an economy that expanded at the slowest pace in more than two years in the first quarter. “Ma is encouraging people to focus on long-term economic security and reminding them that Taiwan must open up,” said Alexander Huang, a professor at Tamkang University’s Institute of International Affairs and Strategic Studies in Taipei. The DPP on Saturday rallied tens of thousands to protest Mr Ma’s policies to increase taxes and prices of fuel and electricity. The Taiwan

Solidarity Union yesterday gathered supporters to throw eggs at a screening of the inauguration. Mr Ma’s speech, which included phrases in the local Taiwanese and Hakka dialects, focused on economic growth as he eschewed ideas of closer political ties with China.

Trade partners Taiwan must accelerate talks on economic cooperation with trading partners such as Singapore and New Zealand given closer ties between other economies in the region, Mr Ma said. Taiwan aims to join the Trans-Pacific Partnership trade agreement within the next eight years, he said. Mr Ma, who returned the Kuomintang party to power in 2008 after the DPP had held the presidency for eight years, said Taiwan will reap economic benefits from the 16 agreements signed with China since he took office. Cross-strait relations reached their warmest in more than six decades since he came into office. He repeated that relations will be based on the so-called 1992 consensus and there will be “no unification, no independence and no use of force” under the Republic of China constitution. There is no urgency to discuss a peace pact with China and economic ties are the priority, Mr Ma said

G-8 presses Greece to stay in euro Leaders vow to combat financial turmoil and boost growth

orld leaders backed keeping Greece in the euro zone on Saturday and vowed to take all steps necessary to combat financial turmoil while revitalising a global economy increasingly threatened by Europe’s debt crisis. A summit of the G8 leading industrialised nations came down solidly in favour of a push to balance European austerity – an approach long driven by German Chancellor Angela Merkel – with a new dose of U.S.-style stimulus seen as vital to healing ailing euro-zone economies. But it was clear that divisions remained. “We commit to take all necessary steps to strengthen and reinvigorate our economies and combat financial stresses, recognising that the right measures are not the same for each

at a press briefing. The DPP says his China policies endanger Taiwan’s sovereignty.

of us,” the leaders said in a joint statement issued at their meeting at the Camp David presidential retreat in Maryland. The overarching message from the summit hosted by President Barack Obama reflected his own concerns

Approval falls Since winning the election, the administration allowed fuel and

that the euro-zone contagion, which threatens the future of Europe’s 17-country single currency bloc, could hurt the fragile U.S. recovery and his re-election chances in November. In the first line of their final economic communique, they essentially endorsed calls to broaden Europe’s focus beyond German-backed fiscal belt-tightening, calling it “our imperative” to promote growth and job creation. Anxious to quell investor fears, the G8 said: “We reaffirm our interest in Greece remaining in the euro zone while respecting its commitments.” But leaders offered no specific

World leaders vow to push for a more growth-oriented approach

electricity prices to increase and proposed a capital gains tax. The Taiex index of stocks has lost 11 percent since the levy was proposed on March 28. Approval for Mr Ma fell to 20 percent this month, the second lowest since he took office in May 2008, a TVBS Poll Centre survey shows. The poll of 1,072 people was conducted from May 11 to May 15 with a 3 percent margin of error. The president said changes are needed for Taiwan to develop. He apologised yesterday for anxiety caused by his policies. “If we want reform, then we must bear the short-term pains of adjustment,” Mr Ma said. “We absolutely cannot leave the hot- potato issues and heavy burden to the next generation.” Bloomberg

prescription for extracting Athens from its worsening crisis. It was unusual for the oftenbland G8 communique to single out a relatively small nation. But fears that a political stalemate in Greece would lead to its departure from Europe’s monetary union at unknown costs to the financial system and global economic stability have spooked markets. Mrs Merkel, increasingly isolated by a French-led push for a more growth-oriented approach, sought to play down the differences, saying: “Solid finances and growth belong inseparably together and should not be put into contrast.” Mr Obama used his closing statement to remind euro-zone leaders that the stakes were high and there could be “enormous” costs if they failed. “Growth and jobs must be our top priority,” he said, reaffirming that Europe has the capacity to meet the challenge. In another move to shore up shaky global growth, the G8 leaders said they would monitor oil markets closely and stand ready to seek an increase in supplies if needed. Reuters