Macau Business Daily, May 23, 2012 by Business Daily

Year I - Number 38 - Wednesday May 23, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

Jewellery, watches, clock up retail boom

Govt info sharing data protection risk

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China’s economic growth to quicken

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Disabled left workless in city short of labour I

n a city where employers constantly complain they can’t find enough workers, one in three disabled people can’t get a job. The shocking statistic was revealed in data from the Labour Affairs Bureau. Almost 1,500 people with disabilities asked the bureau for help between 2004 and 2011, but only a third were able to find a job. That’s despite the latest official unemployment rate of only 2 percent.

Now legislator Paul Chan Wai Chi has called for Macau to introduce a quota for disabled workers in public bodies and private firms. But the proposal divides social workers, employers and even people with disabilities. Albert Cheong, head of Macau People with Visual Impairment Rights Promotion Association, warns that a quota could hurt disabled people’s interests if businesses were forced to hire people lacking skills vital for

that particular sector. And Macau Chamber of Commerce vice-president Vong Kok Seng says the government already has provisions to safeguard employment opportunities for all. But Macau Special Olympics chief Hetzer Siu Yu Hong told Business Daily the city had no specific laws to safeguard job opportunities for people with handicaps. A decade ago, the Macau

Special Olympics created Sociedade de Ngai Chun Se Ltda, a social enterprise that employs mentally handicapped people to clean offices and wash cars. The Social Welfare Bureau began a special programme in 2010, offering associations a lump sum of up to 2 million patacas (US$250,000) to help with the establishment of social enterprises intending to employ handicapped people. More on page 3

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HANG SENG INDEX

Wynn Macau ‘talks’ on US$1bn Cotai loan

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Wynn Macau Ltd is today reportedly holding talks with Hong Kong banks for a loan of “about” US$1 billion for its Wynn Cotai scheme in Macau. The company has apparently wasted no time in seeking project finance since the long-awaited gazetting of its Cotai land bank on May 2. But a finance industry source expressed surprise to Business Daily that Wynn wasn’t chasing more debt for a possible US$4 billion project.

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May 22

Part time work law - pleasing no-one

HSI - Movers Name

Macau’s labour unions and employers can’t agree on a new law for part-time workers. So the government has been urged by Macau Chamber of Commerce vice-president Vong Kok Seng to let the two sides slug it out among themselves. In Macau, ‘part-time’ would be 35 hours or fewer per week, according to a government proposal. In France the working week for full-timers is set at a maximum 35 hours by law. Page 5

New Macau-mainland crossing ok’d this year Macau’s chief executive and one of his top civil servants are to have talks in Beijing about a new Macau-mainland border crossing. It might be approved before the end of the year. The new crossing will connect the Guangzhou-Zhuhai intercity railway with the future Macau Light Rapid Transit system, allowing visitors from Guangzhou to get here in less than one hour. Page 4

%Day

CHINA RES LAND

4.29

CHINA OVERSEAS

3.85

ESPRIT HLDGS

3.41

LI & FUNG LTD

2.75

WHARF HLDG

2.48

AIA GROUP LTD

-0.77

BANK OF COMMUN-H

-0.97

CHINA UNICOM HON

-1.36

CITIC PACIFIC

-2.39

TENCENT HOLDINGS

-2.68

Source: Bloomberg

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Wynn Macau talks on US$1bn Cotai loan Meetings in Hong Kong today – sources Associate Editor

ynn Macau Ltd is reported to be holding talks with banks in Hong Kong today seeking a loan of “about” US$1 billion for its Wynn Cotai scheme in Macau. International Financing Review (IFR) Asia on Monday reported that Wynn was meeting banks in the neighbouring city. Bloomberg additionally cited three sources with knowledge of the matter confirming the loan talks would take place today. If correct, the company has wasted little time in seeking project finance since the long-awaited gazetting of its 21-hectare (52-acre) Cotai land grant on May 2. Bank of America, Société Générale and Deutsche Bank arranged a previous Wynn Macau project loan – for US$729m in July 2005. The timing of the news on the Wynn Cotai project could prove beneficial

for Hong Kong-listed Wynn Macau Ltd’s share price. Scores of gaming journalists, consultants and a sprinkling of analysts have descended on Macau this week for the annual casino trade show Global Gaming Expo Asia, all eager for fresh news and business intelligence on the world’s biggest city-based gaming jurisdiction by gross revenue. Macau generated 267.87 billion patacas (US$33.5 billion) in gross gaming revenue last year, and Wynn Macau had around a 12 percent share of that with just one property. Wynn is likely to get a more enthusiastic response from the debt markets for Wynn Cotai than it did for phase one of Wynn Macau in the city’s traditional gaming district on the peninsula in 2004. Back then it was raising its first project debt in a market where Las Vegas-style

resorts were still untested.

Baby steps The company’s first Macau loan – for US$397 million – in September 2004 attracted eleven banks on a syndicated basis. But only two of them were ‘A-listers’ – Bank of China and Industrial and Commercial Bank of China. There were three local champions – Banco Nacional Ultramarino, Banco Commercial de Macau and Banco Delta Asia (later to become notorious for its connections to the North Korean regime). The rest of the syndicate were a collection of B-listers such as Ireland’s Allied Irish Bank or even C-listers such Hong Kong’s Canadian Eastern Finance. A number of international banks stayed away citing internal restrictions on lending to gaming operators or because they had no previous lending

Steve Wynn the dealmaker

G2E Asia opens on bearish note

‘Savvy’ casino boss’s smart deals

ynn Macau’s 2004 debt deal was the first example in the city of ‘nonrecourse’ casino financing. This is where a loan is repaid from cash flows originating from the project. In a market where the appeal of socalled ‘integrated resorts’ (a fancy way of saying a real estate complex with a casino as the main revenue generator and lower volume but higher margin hotel, shopping and restaurant operations alongside) was still untested, that nonrecourse deal was a testimony to company chairman Steve Wynn’s skills as a concept salesman and financial engineer. In March 2006 he managed to sell his Macau gaming concession sub-licence to Lawrence Ho Yau Lung and James Packer for a cool US$900 million. “Wynn has always been a very savvy financial engineer, so no doubt the company will explore all options on the funding of Wynn Cotai,” a financial industry source told Business Daily. The source expressed surprise however that the company had only reportedly been in talks for a US$1 billion loan for what is likely to be up to a US$4 billion project. “They’re certainly under levered at present,” said the person. “So

increasing debt levels to finance Wynn Cotai would be absolutely acceptable. I would expect more than a billion dollars ultimately in debt equity for what could be a US$4 billion project,” added the source.

Low gearing Earlier this month during Wynn Resorts’ first quarter 2012 earnings call, Matt Maddox, the company’s chief financial officer, said up to 40 percent of the eventual Wynn Cotai budget would be funded by equity – supported by cash flow from current operations. “We’re only two times leveraged right now on a net basis, so we’re in a great position to put in a good financing package down at Cotai to make sure we have a lot of flexibility,” said Mr Maddox. “A higher debt to equity mix than a billion to three billion is likely,” added the finance industry source. “You’re able to get fairly cheap debt capital relative to the expected returns.” In September 2004 Wynn paid the London (or Hong Kong) Interbank Offered Rate (LIBOR or HIBOR) plus 3.5 percent for its first Macau project loan. But by November 2009 following the 2008 financial crisis, an admittedly more heavily leveraged Las Vegas Sands Corp.

relationship with Wynn Resorts’ chairman Steve Wynn. The relatively lukewarm response of the financial community at that time meant the financial muscle of Kazuo Okada, a cash-rich Japanese slot machine entrepreneur, was important in getting Wynn Macau’s business off the ground. In a March 2005 10-K filing with the U.S. Securities and Exchange Commission, Mr Okada was listed as a 25 percent shareholder of the parent company Wynn Resorts. The company had a market capitalisation of US$9.86 billion as of December 31 that year. The two men later fell out, resulting earlier this year in Mr Okada’s now 19 percent stake – valued by the company at US$2.77 billion – being forcibly redeemed for a discounted promissory note, and his ejection from the board.

was offering LIBOR or HIBOR plus 4.5 percent for a US$1.75 billion loan facility to restart work on Cotai plots 5 & 6. Phase one of that scheme opened as Sands Cotai Central on April 11. “Wynn might take the lead of Galaxy and Melco Crown and have a renminbi-denominated debt at some point,” said the finance industry source. “Even if Rmb were only used to finance the nongaming portion of the project that wouldn’t be a problem. The reality is most of the construction cost of these resorts goes on non-gaming [facilities] anyway. There are good corporate citizen aspects to using an Rmb loan. Steve Wynn has been keen to show he’s respectful of the local and national leadership.” “The borrowing outlook has improved significantly for Macau gaming operators since 2008,” a Hong Kong-based investor in Macau gaming told Business Daily. “Banks are actually competing with each other to be involved in Macau casino projects. I don’t see Wynn having any problems getting debt for Wynn Cotai.” A request for comment from Wynn Macau on the bank loan talks had no response at the time Business Daily went to press. A.E.

Global Gaming Expo 2012 opened in CotaiExpo at The Venetian Macao yesterday with industry analysts at their most bearish for two years regarding the growth prospects of the Macau industry. Only weeks ago the most optimistic were expecting up to 25 percent year-on-year expansion of gross gaming revenues this year in a market worth 267.87 billion patacas (US$33.5 billion) last year. But a harder than expected deceleration in VIP baccarat rolling has seen several adjust their annual growth projections downward. “May’s slower than expected total market growth (we estimate 9-12 percent year-on-year growth) could signal a slowing VIP market, and the potential reallocation of tables to Sands Cotai Central from LVS’s existing properties,” said Cameron McKnight of Wells Fargo in New York in a note yesterday. “We expect below consensus 18 percent year-on-year growth in Macau in 2012,” he added. “The slowdown in VIP has been faster than our expectation,” added Kenneth Fong of J.P. Morgan in Hong Kong in another note, predicting year-on-year growth for May of only 7 percent on current daily run rates.

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MACAU

Opinions divided on disabled staff quota A legislator has called for a quota for disabled workers but the proposal divides social workers, employers and even people with disabilities Cherry Lee

ceci-lqq@macaubusinessdaily.com

egislator Paul Chan Wai Chi’s proposal earlier this month for the government to reserve a certain number of jobs in public institutions and private companies for the disabled has divided opinion. Social workers agree more measures are needed to ensure job opportunities for people with disabilities. But both employers and the disabled feel a mandated quota may not be the best answer. They take the discussion to another area of emphasis and draw attention to the lack of benefits for companies that hire such people and the need to train them better. In an enquiry sent to the government, Mr Chan suggested that the authorities should revise the labour law or legislate afresh to specify the percentage of jobs that must be set aside for the disabled. Macau Special Olympics chief Hetzer Siu Yu Hong told Business Daily that the city had no laws to safeguard job opportunities for people with handicaps. He said the government in mainland China had a system that required public and private employers to reserve 1.5 percent of jobs for the disabled. Provincial governments could go for a higher quota, he added. Paul Pun Chi Meng, head of Catholic charity Caritas Macau, draws special attention to the absence of rules and regulations obliging the private sector to hire disabled people.

Damage control Macau Chamber of Commerce vicepresident Vong Kok Seng says a quota is unnecessary. In his opinion the government already has provisions to safeguard their employment opportunities. Albert Cheong, head of Macau People with Visual Impairment Rights Promotion Association, goes a step further. He warns that a quota could do more damage than good. He believes that if a quota forces companies to hire staff with disabilities, in the event of such staff lacking the skills required, it could damage the image of the disabled and place a burden on their co-workers. Mr Vong says many employers have shown great willingness to hire disabled people because most of

A quota forcing companies to hire disabled staff even if they do not have the necessary skills would damage the image of the disabled, says Albert Cheong

them are responsible, hardworking and loyal. Most employers are willing to give them an opportunity, as long as they are capable, he says. The Jornal Tribuna de Macau cites official data as showing that almost 1,500 people with disabilities asked the Labour Affairs Bureau for help between 2004 and 2011, but only a third were able to find a job. Mr Vong believes the government should show employers the skills of disabled people rather than bind them to a quota. Mr Cheong says the government has not done enough to protect the employment rights of the disabled. He believes the authorities should take the lead in hiring such people, as long as they are qualified.

Integration subsidies Such a move could help to prove to both private companies and the public that disabled people have work-relevant abilities, the head of Caritas says. Mr Pun points out that tax concessions are one of the best ways to encourage private enterprises to hire disabled people. The government has a regulation that grants subsidies to companies with facilities to integrate staff with disabilities. But the head of the Special Olympics believes this is hard to implement. Mr Siu says big corporations are not interested in this subsidy, while small and medium enterprises do not have resources to take advantage of it. He suggests that the government should improve the employment environment for disabled people – for instance, with money incentives for employers. In addition, Mr Siu says, more social enterprises should be established to help people with disabilities. A decade ago, the Macau Special Olympics created Sociedade de Ngai Chun Se Ltda, a social enterprise that employs mentally handicapped people to clean offices and wash cars. The Social Welfare Bureau began a special programme in 2010, offering associations a lump sum of up to 2 million patacas (US$250,000) to help with the establishment of social enterprises intending to employ handicapped people. It received just three applications, only one of which

More special training courses could help people with disabilities become independent, rather than depending on government assistance, says Paul Pun

1.5 % Quota for disabled workers in all public and private establishments in mainland China was approved: a laundry staffed by mentally handicapped people, launched by the Fuhong Society of Macau, received a subsidy of 1.8 million patacas.

Independence training Mr Cheong says the government should focus on setting up more training courses for disabled people, to help them “get involved” in society. The head of Caritas agrees. Besides gaining skills that could prove valuable in the job market, people with disabilities could become independent and depend less on government assistance, Mr Pun said. The Social Affairs Bureau said last week it had processed 7,051 of the 8,500 disability assessment applications it had received. Fewer than 4,900 people had been

Many employers have shown great willingness to hire disabled people because most of them are responsible, hardworking and loyal, says Vong Kok Seng

recognised as disabled and granted a subsidy that would range between 6,000 patacas and 12,000 patacas. Last year the government estimated a budget of 240 million patacas for this subsidy between 2009 and 2012. Supporting transport facilities should be built to help the disabled to get to their workplaces more easily, Mr Siu says. Last October the Macau People with Visual Impairment Rights Promotion Association called for the authorities to eliminate the barriers that make it difficult for blind people to use public buses. The land traffic and transportation policy for 2010 to 2020, released last year, pledges to introduce barrier-free facilities for pedestrian overpasses and tunnels, apart from installing sound systems at road crossings and on pavements to help the visually impaired.

Big corporations are not interested in a subsidy for building facilities for the disabled, while smaller enterprises lack the resources to take advantage of it, says Hetzer Siu Yu Hong

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HOSPITALITY Whence they come Visitors to Macau are predominantly from mainland China. That is well known. The provinces they come from are mainly those closest to Macau. The adjacent province of Guangdong is the biggest source of mainland visitors. In the beginning, visitors from the mainland, unless they came for business, were allowed to come only as members of tour groups. Since the authorities across the border authorized mainlanders to visit as individuals, the numbers of this kind of visitor and the trends associated with them have been objects of attention. This is because, in great measure, many people seem to believe that changes in the data may reflect the policies of the various mainland authorities towards the development of Macau. Figures as detailed as these are available only for the period since July 2010.

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The first striking characteristic of the chart above is the similarity of the patterns, which suggest the operation of some kind of quota system. Whether this allows us to draw conclusions about the views of the central or mainland local governments about the evolution of the economy here is debatable. Guangdong is the source of 55 percent of visitors that come as individuals. Somewhat surprisingly, the provinces of Jiangsu and Liaoning are the next-biggest sources of visitors that travel as individuals. The figures suggest that factors other than distance are at work, perhaps the levels of income and the policies in force in the various provinces. But the most surprising sources of visitors are the big cities.

Beijing may approve new border crossing this year The central government may give the nod to a new border crossing before the end of 2012

ecretary for Transport and Public Works Lau Si Io has said he will go to Beijing with Chief Executive Fernando Chui Sai On in the coming months to get approval for a new border crossing, and that details of it are likely to be decided within the year. The authorities on both sides of the border approved the project at last week’s Guangdong-Macau Cooperation Joint Conference. Some preliminary work is already under way, namely preparations to move the Nam Yuet wholesale market, the site of the new crossing, to the Zhuhai-Macau Cross-Border Industrial Zone. A vehicle inspection centre will also be built close to the new crossing, which is due to open at the beginning of 2014. The new crossing will connect the Guangzhou-Zhuhai intercity railway with the future Macau Light Rapid Transit system, and will allow visitors from Guangzhou to get here in less than one hour. The project, which includes a 450-metre closed pedestrian path, will cover a section of Canal dos Patos. The details are still under discussion. The Canal dos Patos is heavily polluted and the government hopes to use the project to create a green belt along the waterway. “To clean up Canal dos Patos is one of the main factors for choosing the site of the project,” Mr Lau said. He said the government had been taking measures in recent years to prevent the discharging of waste into the canal, and that the project would be a good chance to clean up waste deposited over the years. The project is also meant to rejuvenate the northern part of the peninsula, where 40 percent of the city’s population lives.

Faster processing The head of the Land, Public Works and Transport Bureau’s urban

New border crossing may be open for 24 hours a day, the government said

planning department, Lao Iong, said the project would put new infrastructure near the Ilha Verde public housing project, and that he hoped this would be an engine of growth for the area. The new crossing is expected to handle around 200,000 to 250,000 travellers per day, if it is open for 24 hours a day, a possibility under study, the authorities have said. Getting through it is expected to be faster than getting through the present crossing as only pedestrians will be allowed through – no vehicles or freight. The government believes the new crossing will help lighten the heavy

traffic at the Gongbei crossing, which handles a daily average of over 260,000 travellers. Close to 97 million people crossed the border last year, and the number is projected to reach 100 million in 2013. The government will pay most of the construction costs, according to officials, as the new crossing will be of most benefit to Macau. Officials admit that the project will lead to more traffic. They said more public transport would serve the area of the new crossing, including buses, taxis and the Light Rapid Transit system. X.C.

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Micro-credit to bridge wealth gap

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Most visitors to Macau travel as individuals rather than as members of tour groups. Of the visitors from Tianjin, 85 percent travel as individuals, and of the visitors from Shanghai, 79 percent travel as individuals – far higher percentages than the proportion of visitors from Guangdong that travel as individuals. And visitors from Tianjin and Shanghai do not fall into the general pattern for visitors from the mainland. J.I.D.

The introduction of micro-credit could be a big opportunity for disadvantaged groups here and help bridge the city’s wealth gap, former Rotary International president Sushil Gupta said. Speaking to Portuguese-language Jornal Tribuna de Macau, the head of the Rotary Foundation (India) said the organisation was already working on a micro-credit project here. “Through this credit, they [low-

income people] can open their own business such as ... a small bakery, a small butcher [shop] or a grocery [shop],” he said on the sidelines of a meeting that brought to Macau Rotary club members from around the world. Mr Gupta believes the Rotary movement could have an important role in dealing with the social needs created by the city’s development. He said another project, aimed at giving youngsters occupational and leadership training, would also help reduce poverty and develop skills to suit development demands.

Rotary International president Sushil Gupta

May 23, 2012 business daily | 5

MACAU

InBrief Sands eyes imported labour ‘relaxation’ The Macau government is likely to loosen restrictions on imported labour soon, said Sands China Ltd chief executive officer Edward Tracy. “There’s a political process that has to happen,” he told Bloomberg in an article about Macau labour shortages. “My belief is, as long as we develop the next one or two projects, we’ll begin to see some relaxation.” “It’s a challenge everybody faces,” said Mr Tracy. The unemployment rate of 2.1 percent “is almost zero: those people are probably not looking for a job,” he added. The executive says a big worry is the 4,000 positions he’d like to fill at Sands China.

SJM denounces fraudulent site A suspected fraudulent website is using references to SJM Holdings Limited “to attempt to defraud people of money,” the gaming operator has announced in a stock filling on Monday. The company also warned people against taking part in a “scam” involving “gaming operations online” or “telephone or online competition or lucky draw offering prize money” purportedly organised by SJM. The Hong Kong-listed firm said it has already reported these “scams” to Macau authorities and “if appropriate, to the Hong Kong police force”. It stressed it will not accept any liability connected to those activities.

Seac Pai Van home prices ‘reasonable’ The prices of Seac Pai Van public housing are reasonable and way below market prices for private housing, the president of the Macau General Association of Real Estate, Chong Sio Kin, has said. However, Mr Chong told the Chinese-language Macau Daily News that Seac Pai Van will not be as popular as the Areia Preta and Taipa developments because of a lack of facilities such as nurseries, supermarkets or schools on Coloane. He called for more bus services to the peninsula as soon as possible. Mr Chong expects most Seac Pai Van residents to be Cotai casino workers.

Workers, employers unite against bill A bill on part-time work is scorned by employers and workers alike Tony Lai

tony.lai@macaubusinessdaily.com

The govt proposal on part-time work ‘lacks flexibility’ to deal with seasonal changes in some business sectors, employers’ representatives criticised

epresentatives of employers and workers expressed their disapproval yesterday of a bill on part-time work – for differing reasons. After a meeting of the Standing Committee for the Coordination of Social Affairs, workers said the bill would leave them with fewer rights, while employers felt it lacked flexibility. Ella Lei Cheng I, vice-president of the Macau Workers General Association, told reporters the bill was a “step backward” because it would encourage exploitation. “It is unfair for workers to have fewer rights and receive different treatment based on working hours,” Ms Lei said. She added that the bill would do nothing for those that had been with the same company for a long time. According to the bill, a worker would have to put in less than 35 hours a week to be considered a part-timer. Rights such as holidays would be derived from working hours. A person putting in 24 hours a week,

against the maximum of 48, would be entitled to only half of what a full-timer would. Labour Affairs Bureau director Wong Chi Hong did not say when the bill would be ready. The representatives of workers said the authorities should give strong reasons for legislation independent of the labour relations law to govern part-time workers. Ms Lei said part-time work was not a matter of choice and added that workers were worried that the bill would serve to provide “cheaper manpower”.

No flexibility Employers look at the matter differently. “The idea that employers only give part-time jobs to workers to cut costs does not match reality,” Macau Chamber of Commerce vicepresident Vong Kok Seng said. He noted that part-time jobs suit the circumstances of workers more than companies. He said the bill lacked flexibility,

arguing that working hours had seasonal changes in some business sectors such as retailing, conventions and exhibitions, and construction. “For a peak period in the conventions and exhibitions and construction sectors, many parttime workers have to work over 35 hours a week,” said Mr Vong. “So, do they become full-time employees, then?” He thinks the best way to solve the problem would be to allow both parties to set terms and conditions themselves, and added that they should follow the provisions of the bill only if they failed to reach agreement. The Labour Affairs Bureau director said: “There were many different opinions in the meeting.” However, he added that employers, workers and the government had agreed to move forward. Mr Wong said the present labour law did not cover part-time workers, hence the urgency to set up a mechanism like the one that was introduced for imported labour in 2010.

Food safety duties confuse legislators Legislators want greater clarity in the food safety bill to avert clashes over responsibilities Kristy Chan

kristyc@macaubusinessdaily.com

Portugal, Macau sign deal on tourism Macau will be the “favourite destination” of the Portuguese Association of Travel Agencies and Tourism in 2012, according to a first-of-its-kind cooperation deal that the association and the Macau Government Tourist Office signed yesterday. Association president Pedro Costa Ferreira told the Portuguese news agency Lusa that Macau would become a platform for the promotion of Portugal in Asian markets. He said the association and the tourist office were working on “a partnership to boost Portugal’s tourism promotion in China”. The tourist office representative in Portugal, Rodolfo Faustino, said the deal would “further boost and consolidate Macau as a tourism destination”.

rey areas remain in the bill on food safety, particularly in the way responsibilities would be divided among various public institutions, the president of the Legislative Assembly’s second standing committee, Chan Chak Mo, warned yesterday. Currently the Civic and Municipal Affairs Bureau is responsible only for the safety of food sold in markets, restaurants and hawker stalls. The bill would give it the power to inspect all food, imported or local. Mr Chan said the bill sought to introduce more “precise and comprehensive” regulations for manufacturers and sellers, but that legislators had identified several unresolved issues. Even though the Macau Government Tourist Office is not responsible for food inspection, it would be given

the power to license and inspect restaurants and bars. Legislators fear that this provision will lead to a duplication of responsibilities and waste public resources, according to Mr Chan. Committee members also wonder what would happen when irregular or harmful food products were found. Would the bureau have the power to dispose of them or would it be left to the security forces? The bill would also make the production and sale of harmful food a crime. Mr Chan said the new penalties for breaking the food safety rules should be made clear to producers and sellers. These issues will be discussed with government representatives at the committee’s next meeting on the bill. Legislators also want to explore with

Legislators want Macau to set up an independent food testing laboratory along the lines of Hong Kong’s

the administration the possibility of setting up an independent laboratory, similar to the one in Hong Kong, to analyse samples collected by the future food safety centre.

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business daily May 23, 2012

macau Brought to you by

Mortgage tides The volume of mortgage loans is an indicator of the evolution of the real estate market and is very sensitive to general economic conditions and the expectations associated with them. In places where space is limited and in times of growing population and income, it is inevitably liable to some effervescence. It is also strongly influenced by the perceptions about what the government is willing to do – or not do – about it. In parallel with the data for housing sales, the evolution of the mortgage market has been strongly influenced in the past couple of years by two main factors: the expectations of greater demand for real estate and the introduction of the Special Stamp Duty on sales of new housing. Local Residential Mortgage Loans (RML) for residents and non-residents 109 mop

Jewellery, watches extend retail boom

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Luxury goods are increasingly dominating Macau retail sales and businessmen expect business to set new records this year

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Vítor Quintã

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vitorquinta@macaubusinessdaily.com

Leaving aside the uncertainty of 2009, the rising trend up to the middle of 2011 is clear. The proposal of the Special Stamp Duty was behind a flurry of sales before it was approved, a flurry that resulted in one of the highest volumes of mortgages ever. It was not surprising that just afterwards the volume of loans dropped in line with the fall in sales. However, 2010 and 2011 were extraordinary years and the figures for the first quarter of this year suggest a recovery from the slowdown in the second half of last year.

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etail sales in the city hit a new record high for the third consecutive quarter. Watches and jewellery again fuelled the increase and they already account for almost a third of all sales. During the first three months of this year retail sales reached 12.9 billion patacas (US$1.6 billion), up by 4 percent from the previous record of 12.4 billion patacas set in the final quarter of last year. According to data released by the Statistics and Census Service, average quarterly sales have more than doubled in less than three years. In fact, retail sales in the first quarter were higher than in the whole of 2006. The local retail business is again

growing much faster than its Hong Kong competitor, which increased its sales by just 2.6 percent last quarter. But Macau figures are still only around one ninth of Hong Kong’s HK$113.5 billion. The main reason behind the boost was an 8 percent increase in the sale of watches and jewellery, which reached 4 billion patacas. With prices in Macau attractive for mainland Chinese tourists, these luxury goods accounted for 31 percent of total sales. The second most popular segment with 15 percent was goods in department stores, which grew 2 percent to 1.9 billion patacas. Next come adults’ clothing (11 percent share), which rose 19 percent to

almost 1.4 billion patacas. On the contrary, sales of motor vehicles dropped by 17 percent from the last quarter of 2011 to just 723 million patacas. And retailers are even more confident that business will remain good during the rest of the year. About 79 percent of the retailers surveyed anticipated that sales volume would increase or remain stable during the second quarter of 2012, while only 21 percent expect a decrease. Moreover, the overwhelming majority (75 percent) of the retailers expect prices to remain stable, while about 19 percent predict an increase and 6 percent actually expect a decrease in prices.

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Govt to solicit opinion on provident fund this year

The figures for new commercial real estate loans tell a mostly similar story. It is curious, however, that it they peaked in the third quarter of last year. Commercial investment decisions, construction approvals and the completion of new buildings affect the timing of this kind of loan. But investment is still considerable and nothing in these data suggests that the market has reversed its expectations about the long run. Note that loans to non-residents are comparatively small and less subject to severe oscillations. J.I.D.

ublic consultation on the central provident fund framework will be held in the second half of this year, a Social Security Fund official said on Monday. “The provident fund will first be non-mandatory. The SAR government will review the system three years after its implementation and then prepare for a mandatory provident fund system,” Chan Pou Wan told the Legislative Assembly. She also said that the government would provide benefits to encourage the 600 companies that have

private pension schemes – covering 30 percent of the population – to join the public scheme. The non-mandatory central provident fund, the second tier of the social security system, seeks to encourage residents to save for retirement through monthly contributions. Only 290,000 of the 360,000 residents eligible to open accounts in the fund are currently in the final list. Many did not meet all the requirements. The law that creates the fund passed its first reading in the assembly last December but it is still being reviewed by the third standing committee.

Weather Beijing 27/16o C Changchun 25/10o C

Harbin 22/10o C

Xian 19/14o C Shanghai 24/18o C Chengdu 25/19o C Kunming 28/17o C Haikou 31/23o C Sanya 33/26o C

Guangzhou 33/24o C

MACAU (21 May-26 May) Day

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05/26

25/29o C

75/95 %

Shenzhen 32/24o C

ASIA (today)

Hong Kong 33/26o C

Manila

TOKYO

Jakarta

35/27o C

32/26o C

23/18o C

31/25o C

Macau 30/25o C

Bangkok

SEOUL

K. lumpur

36/28 C o

SINGAPORE

29/17 C o

34/25 C o

taipei

30/22o C

May 23, 2012 business daily | 7

MACAU

Doubts remain over firms’ data protection Jurists wonder if the new Commercial Registry Code makes for data security Vítor Quintã

vitorquinta@macaubusinessdaily.com

he revised Commercial Registry Code will come into effect in July but doubts remain over the protection of data on entrepreneurs and companies, lawyer Pedro Cortés has told Business Daily. Once in force, the new code will introduce electronic documents and allow for the sharing of information between the Business and Vehicles Registry and other public bodies, including the Financial Services Bureau. The interconnection of services “necessarily entails the creation of a database accessible to public

authorities”, Mr Cortés and fellowlawyer José Filipe Salreta say in a paper published by the International Law Office website. The bureau would be required to communicate “relevant facts” to the registry, notably where they concern taxation. The revision states that all data exchange must be made in accordance with the Personal Data Protection Law, but Mr Cortés says it is not clear whether the exchange must be reported. “Up to which point will they [the bureau] have to ask for the

authorisation of the Office for Personal Data Protection? There is a grey area,” he says. “There may be some reservations regarding the use of electronic information by public bodies,” the paper warns. It advises a re-evaluation of the issue and greater scrutiny of the network. Companies and entrepreneurs might not be interested in having their personal data shared among public services and departments, Mr Cortés said. “Caution is reasonable.” He called for the authorities to inform all companies of the

introduction of data exchange, stressing that currently only lawyers and notaries could access this information. Alternatively, the government could explicitly ask companies at the point of registry if the information could be shared, the lawyer proposed. While the revision was being discussed in the Legislative Assembly, legislators and legal advisors also called for a mechanism to track users and protect personal data, and said the bill should clearly state who was allowed to access data of companies.

8 |

business daily May 23, 2012

GREATER CHINA

Taiwan export orders InBrief contract, outlook weak Taiwan’s jobless rate climbs

Taiwan’s unemployment rate remained steady in April as China’s growth slowdown and Europe’s debt woes hurt hiring by the island’s manufacturers. The seasonally adjusted rate rose to 4.19 percent from 4.14 percent in March, the statistics bureau said in Taipei yesterday. It was a sharp drop from the 4.36 percent in April 2011. That compares with the 4.13 percent median estimate of nine economists surveyed by Bloomberg News. A total of 10.82 million people had jobs in April, up by 0.11 percent from the month-earlier level, while the number of jobless fell to 463,000.

Yuan centre opens in Yunnan

China has started a cross-border yuan centre in a south-west province bordering Myanmar as that country opens up to foreign business, according to a Chinese government website. The yuan centre in the city of Ruili, in Yunnan province, will promote exchanging yuan with the Myanmar kyat, along with transporting and repatriating yuan, according to a statement on the Ruili website posted on Monday. Analysts expect an increase in trading volumes via Myanmar, and say the opening of the cross-border yuan centre Ruili will help accelerate the process.

Xstrata sees copper demand rebounding

Global miner Xstrata has plans to boost production of copper by 60 percent. Xstrata sells 30-40 percent of its copper to China. China’s implied consumption for refined copper fell 6.8 percent in April from a month earlier, according to Reuters calculations based on official customs data. “We typically see a cyclical return to demand in the second half of the year in China,” said Charlie Sartain, Xstrata’s copper division head. He said new economic stimulus plans to bolster economic growth would also filter down to higher copper consumption. Secondhalf growth in copper consumption could run as high as 6 percent, he said.

Value of orders was US$36.09 billion last month

aiwan’s export orders fell for the fourth time in five months in April, pointing to a rocky road ahead for Asia’s exporters as Europe’s woes and a slowdown in China cut demand. Orders, an indication of shipments in the next one to three months, slipped 3.52 percent from a year earlier, after a 1.58 percent decline reported earlier for March, a Ministry of Economic Affairs report in Taipei showed on Monday. The value of export orders was US$36.09 billion last month, the report showed. Taiwan’s export orders, an indication of the strength of Asian exports and of demand for tech products globally, also contracted 1.50 percent from the previous month, and the government sounded a warning note about May’s figures, saying “it would not be easy for the trend to turn positive”. “Orders from mainland China were disappointing, and echo weakening activity data there,” said Raymond Yeung, senior economist at ANZ in Hong Kong. “For Q2, we expect headwinds from Europe will have dragged down external demand,” he said. The figures come after two lean months for exporters as Asian nations are grappling with China’s growth slowdown and an uneven U.S. recovery, as well as risks stemming from Greece’s inability to form a new government, which could reverse progress made in resolving Europe’s debt turmoil.

Weak results Taiwan’s actual exports have contracted for the past two months in succession, while exports from South Korea, like Taiwan a big tech producer, fell in the first 20 days of May. A marked slowdown in global demand pushed Taiwan into a mild recession at the end of 2011, and though it emerged from that

Taiwan’s actual exports have contracted for the past two months

in the first quarter of 2012, the government cut its full-year GDP growth forecast for 2012 for a fourth time, to 3.38 percent. Taiwan is one of the most open of Asia’s exporters, with an exports-togross domestic product ratio of 74 percent, making it extra-vulnerable to declines in external demand. Orders from China in April fell by 7.8 percent, much worse that the previous month’s 2.5 percent shrinkage, while those from the U.S. grew only 0.79 percent versus March’s 6.40 rise. Orders from Europe improved a little, contracting 0.78 percent after a 9.26 percent shrinkage in March. Exports make up about twothirds of Taiwan’s economy, which probably expanded at the slowest pace in more than two years in the first quarter, according to another Bloomberg survey, limiting the scope for interest-rate increases. “European demand may deteriorate further due to the ongoing sovereign-

debt crisis,” Ma Tieying, an economist at DBS Bank in Singapore, said before the report. While orders from the U.S. should remain solid, those from China are “expected to stay at depressed levels,” she said in a note. Most private economists see a pickup in the economy from the second half, with full-year growth at 3.1 percent. However, any further poor order numbers could change that assumption. “The export order figure was really weak,” said Icy Hsu, economist at Sinopac Financial in Taipei. “I was expecting the economy to bottom out in Q1 or Q2. Now the figure proves the bottom would be Q2 and then a slow pickup in Q3,” she added. The ministry said it saw export orders in May up from April in value terms, but noted a high base that would weigh on the year-onyear comparison. Reuters/Bloomberg

Long-term corporate bond may double this year New enterprise bonds may reach US$79 billion

LNG imports to exceed forecast

Imports of liquefied natural gas into China, the world’s biggest energy consumer, are on track to reach 13 million metric tons this year, Arctic Securities ASA said, exceeding its 12 million-ton estimate. April volumes of 1.06 million tons were 24 percent higher than a year earlier, the Oslobased investment bank said in a note quoted by Bloomberg yesterday. Imports were at a record in this year’s first four months and are estimated to reach 40 million tons by 2014, according to Arctic.

hina’s top economic planner may approve twice as many enterprise bond issues this year than in 2011, in an effort to develop the country’s fledgling debt markets and wean state firms off of their excessive reliance on bank lending. The National Development and Reform Commission (NDRC) may approve 500 billion yuan (US$79 billion) in new enterprise bonds this year, giving special support to the Ministry of Railways, which is treated as a Chinese company for the purpose of bond issuance, an NDRC official told a brokerage industry seminar.

Last year, the NDRC approved a combined 249 billion yuan of enterprise bonds under its responsibility, official data shows. The NDRC also will give priority in the approval process to bonds used to finance low-cost housing, environmental protection, or small companies, according to notes on the seminar obtained by Reuters on Tuesday. The move signals fresh efforts to increase the flow of credit to the economy as growth slows. Official media reported yesterday that China will accelerate approvals for new infrastructure investment. Enterprise bonds issued by local

government financing platforms and the railways ministry are a significant source of financing for such investment. The NDRC official said it would exempt the railway ministry from the usual requirement that debt not exceed 40 percent of net assets, the notes of his remarks showed. The NDRC official also warned investors against risk in buying and trading corporate bonds, according to the document. “While the NDRC is aimed at avoiding risk, risk will emerge anyway as a normal market phenomenon,” the official said. Reuters

May 23, 2012 business daily | 9

GREATER CHINA

China’s economic growth to quicken in 2013 – OECD

Chinese growth likely to rebound to 9.3 percent in 2013, says the OECD

hinese growth is likely to slow to 8.2 percent this year, its weakest in more than a decade, before government support helps it rebound to 9.3 percent in 2013, the Organisation for Economic Co-operation and Development (OECD) said yesterday. The OECD cut its growth forecast for the world’s second-largest economy from 8.5 percent made

last November. That is still higher than a government target of 7.5 percent for 2012. “As the inventory cycle turns, and fiscal and monetary policy become more expansionary, growth should pick up in the course of 2012 and stabilise at over 9 percent in 2013,” the Paris-based body said in its biannual outlook. Increased policy support and an expected recovery in the global

economy could lead to a rebound in activity in China in the second half of 2012, it said. The OECD said the government, which has signalled a willingness to take action to halt the slowdown, was likely to step up investment in key infrastructure projects if growth weakened in the current quarter. Data for April, including factory output and fixed-asset investment,

Beijing to fast track approvals for infrastructure

To be sure, some economists say the slowdown does not warrant the mammoth 4 trillion yuan stimulus China produced at the height of the global financial crisis when firms had axed some 20 million jobs as global trade ground to a halt. The economy is stronger that it was then. Today’s labour market is tight, wages are rising and employees are struggling for staff, conditions that could fuel inflation if Beijing loosened policy aggressively. So the latest move by Beijing is another example of its “fine tuning” of policies to prevent the economy from slipping too quickly, they said.

Existing projects

hina will fast track approvals for infrastructure investment to combat a slowdown in the economy, a state-backed newspaper reported yesterday, showing how Premier Wen Jiabao’s call for policies to support growth is being put into action. The pace of investment in the likes of roads, bridges and real estate is running at its weakest in nearly a decade, April data showed, suggesting the world’s second-biggest economy is heading for a sixth straight quarter of slowing growth. To provide some support the government had asked for project proposals by the end of June, even for those initially earmarked for the end of the year, said the China Securities Journal, one of the

country’s top financial papers. Citing government sources, the article said Beijing did not rule out bringing forward next year’s projects, if it thought more investments would be needed to stimulate the economy. “This would be the first concrete evidence that Premier Wen’s comments are being put into practice,” said Dariusz Kowalczyk, an economist at Credit AgricoleCIB in Hong Kong. “Improved China growth would benefit all regional currencies, as their economies heavily depend on exports to China.” The newspaper also cited media reports saying the central government will speed up budget allocations to various construction projects, including highway construction.

Reuters

Stocks rise on govt stimulus

Measure seen as more ‘fine tuning’ to prevent economy from slipping too quickly

Investment likely to focus on highways, railways and thermal power plants

suggests growth has weakened from the first quarter, when it hit a three-year low of 8.1 percent in annual terms. The OECD expects the central bank to ease policy further and boost bank credit for first-time home buyers and sound property developers, which could help stabilise the property market. The People’s Bank of China has cut the amount of cash banks must hold as reserves three times since November to crank up lending. Analysts polled by Reuters expect further cuts in reserve requirements and more fiscal measures to support the economy. Full-year annual inflation is expected to fall to 3.3 percent in 2012 from 5.5 percent last year, the OECD said. Inflation could fall further 2.9 percent in 2013. The OECD projected China’s current-account surplus as a percentage of gross domestic product would fall to 2.3 percent in 2012 and 1.7 percent in 2013. Meanwhile, China could forge ahead with financial reforms to free up bank lending and deposit rates and allow more private investment in the banking sector, the OECD said. “Capital outflows should be liberalised with appropriate sequencing so as to help create a more balanced two-way market for renminbi [yuan],” it said.

Wang Jun, an economist at the China Centre for International Economic Exchanges, a government think-tank, said he expected the thrust of the investment to focus on highways, railways, nuclear power and thermal power plants. “But it will be fine-tuning,” Mr Wang said. Indeed, the China Securities Journal said Beijing would focus on projects already under construction or ones that were halted due to funding shortages last year. Economists also said they doubted the government would look at fresh investment projects. Instead, it would bring forward projects laid out under the national fiveyear development plan. Reuters

hina’s stocks rose for a second day on speculation the government will accelerate infrastructure spending to counter an economic slowdown and after German and French officials said they will work to keep Greece in the euro. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 1.1 percent to 2,373.31 at the close, adding to a 0.2 percent gain on Monday after Premier Wen Jiabao said the government will focus more on bolstering economic growth. The CSI 300 Index advanced 1.6 percent to 2,627.53. The Shanghai index has climbed 7.9 percent this year on expectations the government will relax monetary policy to support growth and take more measures to bolster equities. Hong Kong stocks also rose, with the benchmark index posting its first increase in five days. The Hang Seng Index climbed 0.6 percent to 19,039.15 at the close of trading in Hong Kong, with three shares rising for each that fell. China Railway Construction Ltd advanced 6.4 percent and China Overseas Land & Investment Ltd rose 3.9 percent. PetroChina Co. paced gains among oil producers as crude rose for a second day. Ports Design Ltd slumped a record 38 percent after the fashion retailer said it breached listing rules and Chairman Edward Tan resigned. Taiwan stocks ended 1.15 percent higher yesterday, joining a rally in Greater China bourses, with Hon Hai and HTC jumping 4.8 percent and 6 percent respectively. The main TAIEX index rose 82.66 points to 7,274.89, after opening up 0.91 percent. “Investors are comforted by developments in Europe and expectations of more spending and policy easing,” said Chen Liqiu, a strategist at Jianghai Securities Co. in Shanghai. Bloomberg/Reuters

10 |

business daily May 23, 2012

asia

Malaysia cuts tariffs on Australia Tariff-free entry for most Australian exports takes effect January 1

InBrief

Jason Scott and Manirajan Ramasamy

Investors buy stake in F1

Private equity firm CVC Capital has sold a US$1.6 billion stake in Formula One to three investors including BlackRock ahead of the motor racing company’s planned US$3 billion initial public offering in Singapore, sources told Reuters yesterday. The deal sets a benchmark valuation of at least US$7 billion for the company as financial advisers begin to target potential cornerstone and retail investors during the pre-marketing process of the IPO. The shares are expected to debut in June. The pre-IPO deal cuts CVC’s stake in Formula One to about 40 percent from 63.4 percent, one of the sources said. Malaysia will axe tariffs for most Australian exports by 2017

alaysia’s government signed a free-trade agreement with Australia yesterday as the Southeast Asian nation’s leaders tout their economic stewardship ahead of upcoming national elections. The accord will grant tariff-free entry for 97.6 percent of Australian exports when the deal takes effect January 1, 2013 rising to 99 percent by 2017, Australian Prime Minister Julia Gillard said in an e-mailed statement. Malaysian goods traveling to Australia will have the same dutyfree status as those from Singapore, she said. Malaysian Prime Minister Najib Razak is required to hold national elections by early next year, a vote that may take place amid an outlook for slowing growth. Malaysia’s US$238 billion economy expanded 5.2 percent in the fourth quarter from a year earlier, down from a 5.8 percent pace in the previous three months, and overseas sales unexpectedly fell in March. “We can expect to see significant

improvement in these trade figures in the years to come,” Malaysian International Trade and Industry Minister Mustapa Mohamed said in Kuala Lumpur yesterday. “This is because of the dramatic opening up of access to exporters from both sides that this agreement offers.” Negotiations began in 2005 on the agreement, which will be Malaysia’s sixth, and were postponed in 2006 as both sides focused on securing an Asean-Australia-New Zealand trade deal, before restarting in 2009. “Australia will be as well-positioned in the Malaysian market as Malaysia’s closest trading partners in Asean, and in some cases better,” Ms Gillard said.

Investment banks The agreement will allow Australians to have equity holdings of as much as 70 percent in Malaysian investment banks and up to 100 percent ownership in investment advisory companies, Malaysia’s official Bernama

news service reported, citing a government statement. Malaysia’s overseas sales unexpectedly fell 0.1 percent in March after rising 14.5 percent in February, as manufacturers such as Unisem (M) Bhd. and Malaysian Pacific Industries Bhd. shipped fewer electrical and electronics products. Bank Negara is due to release first-quarter gross domestic product data today. Malaysia is Australia’s 10th-largest trading partner, with two-way trade reaching A$12.8 billion (US$12.7 billion) in the year to June 30, 2011, according to Australian government figures. Australian exports to Malaysia rose 30 percent in that period from the year before to A$4 billion, while imports, including crude petroleum and information technology equipment, reached A$8.8 billion. Malaysian investment in Australia reached A$8.2 billion in 2010, while Australian foreign investment in Malaysia totalled A$4.4 billion, according to the government figures. Bloomberg

Seoul seeks exemption from EU Iran oil ban Full embargo on Iranian crude to start on July 1

eoul is seeking an exemption from a European Union embargo that would effectively halt shipments of Iranian oil to South Korea from July 1, officials said yesterday. The EU decided in January to enforce a full embargo on Iranian crude as part of efforts to bring Tehran back to international talks over its suspected nuclear weapons programme. It will also ban European firms from insuring or reinsuring tankers transporting Iranian oil anywhere in the world – a move that could mean Korean refiners are unable

to import supplies. South Korea and Japan have been asking the EU for an exemption from the insurance ban, said Jung Jong-Yung, a director of the Ministry of Knowledge Economy. Another government official told Dow Jones Newswires it was “very difficult” to find an alternative supply source in a short period. Iran currently supplies about 10 percent of South Korea’s crude imports. Seoul is “doing its best” to secure an exemption from US sanctions on Iran, and from the European insurance ban, the official said.

The EU is likely to decide next month after Seoul’s request, the official added. SK Energy and Hyundai Oilbank, the two Korean companies that import Iranian crude, said they had been consulting closely with government authorities to seek a South Korean exemption from the insurance ban. “The government is seeking to earn time until December at least,” a Hyundai Oil spokeswoman said. “We’re crossing our fingers and hope the negotiations with the EU turn out to be fruitful.” AFP

Toshiba ‘conspired’ to fix LCD prices

Toshiba Corp. conspired with rivals to fix the price of display screens a U.S. jury was told at the start of an antitrust trial. Attorneys for U.S. makers of digital signs, home theatre equipment and office networks told jurors in federal court in San Francisco yesterday that Tokyo-based Toshiba met with competitors and agreed to set prices for LCD panels from 1999 to 2006. Toshiba is the lone defendant on trial after at least seven Japanese, Taiwanese and South Korean panel makers settled civil claims filed on behalf of buyers. Christopher Curran, Toshiba’s lawyer, told jurors the conspiracy was between Korean and Taiwanese competitors, and Japanese makers including Toshiba didn’t participate.

Nissan’s Infiniti in China move

Nissan’s upscale car brand Infiniti has established its global headquarters in Hong Kong as it looks to increase car sales in China. Nissan boss Carlos Ghosn said the move would help Infiniti boost its share of the luxury car market to 10 percent from 3 percent currently. Last year, it sold just under 20,000 units in China, which is now the world’s largest car market. It expects Infiniti sales in China to increase by 50 percent in 2012. Nissan is embarking on an ambitious expansion of its Infiniti brand and said the marquee would soon be available in 70 countries, up from 45 currently.

Qantas splits business divisions

Embattled Australian flag carrier Qantas said yesterday it will split its lossmaking international arm from its domestic operations as part of a drive to turn around its fortunes. Each of the two entities, currently combined as Qantas Airways, will run as separate businesses from July with their own chief executives and reporting of financial results. The airline said the restructure would “enable a greater focus on the priorities of turning around the Qantas international business and enhancing the strong Qantas domestic business”. It was welcomed by the markets, with Qantas shares gaining 2.8 percent to Aus$1.47.

May 23, 2012 business daily | 11

asia

Fitch cuts Japan debt rating Fiscal consolidation top priority, tax hikes can’t wait – OECD

Japan’s economy will likely grow by about 2 percent this year, says the OECD

apan’s sovereign rating was cut by one notch by Fitch yesterday as a political stalemate dims the chance that the country can curb its snowballing debt. Fitch lowered Japan’s long-term foreign currency rating to A-plus from AA. It cut the local currency ratings to A-plus from AA minus. Both were cut with a negative outlook. Fitch warned that further downgrades are possible unless the government takes new fiscal policy measures to stabilise public finances and its ratio of debt to gross domestic product. The yen fell after the move, taking the dollar to a session high of 79.85 yen. The downgrade could serve as a chilling reminder to highly indebted countries in Europe that urgent action is needed to trim public debt and prevent concerns about sovereign debt from weighing further on the global economy. “The downgrades and negative

outlooks reflect growing risks for Japan’s sovereign credit profile as a result of high and rising public debt ratios,” Andrew Colquhoun, head of Asia-Pacific sovereigns at Fitch said in a statement. “The country’s fiscal consolidation plan looks leisurely, relative even to other fiscally challenged highincome countries, and implementation is subject to political risk.” Fitch’s A-plus rating for Japan is the lowest among the three major ratings agencies. Moody’s Investors Service rates Japan Aa3 with a stable outlook. Standard & Poor’s rating for Japan is AA minus with a negative outlook.

Fiscal consolidation At the end of March, Japan’s government submitted laws to double its sales tax by 2015 to fund swelling social security costs in the world’s fastest-ageing nation, setting up a showdown that could split the ruling party, force early elections and

deepen policy paralysis. Prime Minister Yoshihiko Noda has staked his political career on the tax plan, but the chances of success look slim. Opposition parties are unwilling to cooperate, and the government lacks the numbers to force legislation through. Japan’s debt burden, at twice the size of its US$5 trillion economy, is by far the worst among industrialised countries The Organisation for Economic Cooperation and Development yesterday said Japan should stick to its plan of raising the consumption tax from 2014 or even earlier to demonstrate budget prudence and avert a run-up in borrowing costs, adding that a credible fiscal consolidation plan must be top priority. The OECD also urged the central bank to maintain the zero rate policy and quantitative easing mainly via asset purchases until inflation returns and reaches the Bank of Japan’s target of 1 percent. Swift fiscal action was needed, as

India with limited room to cut rates Economic growth expected to pick up in 2013

Prime Minister Manmohan Singh has been under pressure over how he runs Asia’s third-largest economy

ndia’s economic growth is likely to rise to more than 7.5 percent in calendar year 2013 but continued government policy uncertainty could erode the country’s longer-term growth prospects, the Organisation for Economic Co-operation and Development said yesterday. A cyclical upturn in investment, stronger external demand and the effects of recent monetary easing will boost growth, the report said, although it warned that high inflation would dampen the investment climate.

The prediction of higher growth in the OECD’s outlook report should cheer Prime Minister Manmohan Singh’s government – which has faced an avalanche of criticism over how it has run Asia’s third-largest economy and its scant progress making key reforms. The upbeat OECD forecast stood in stark contrast to the pessimistic view offered on Monday by Morgan Stanley, which cut its growth forecasts for India, citing a high budget deficit and slowing private investment. It said it now expected

the economy to grow by 6.8 percent, instead of 7.5 percent, in 2013. India’s economic growth slowed to 6.1 percent in the three months to December, the weakest annual pace in almost three years, while the rupee slumped to record lows against the dollar yesterday. “A moderate cyclical pick-up in investment is projected in the near term,” the OECD said. “Later this year and into the next, growth is set to pick up to around trend rates, supported by the delayed effects of the recent monetary policy easing.” “However, still high inflation will limit the room for significant further relaxation,” it added.

Policy uncertainty But India’s central bank will have limited room to relax its tight monetary stance and boost a slowing economy, the OECD said. “It would be prudent to wait for clear signs that inflation is falling back to more comfortable levels, which is not expected until late 2012, before reducing interest rates,” the organisation said yesterday. The Reserve Bank of India slashed

budget deficits projected at about 10 percent of gross domestic product for 2012 and 2013 would further push Japan’s debt into uncharted territory, OECD said in its economic outlook. “A phase-in of such an increase, which may have to be followed by more, should be enacted swiftly to demonstrate commitment to longer-term fiscal goals,” the OECD said. “Indeed, given the size of the task, and the risks associated with gross public debt above 200 percent of GDP, it would be prudent to start consolidation earlier than foreseen by the government.” The OECD forecast decade-long deflation that has weighed on consumption and business investment would ease, but predicted consumer prices would creep 0.2 percent lower this year and next, even though it saw the world’s third-largest economy to grow by about 2 percent this year and 1.5 percent in 2013. Reuters

its lending rate in April by half a percentage point – the first reduction in three years – but warned of persistent inflation risks. India has had rapid economic growth after opening up its economy in 1991. But investors fret that Singh’s government is now squandering a chance to tap the country’s potential. The current account deficit is the highest since 1980. Reforms such as opening India’s supermarket sector to foreign chains like Wal-Mart stuttered as the government failed to convince powerful coalition allies. Inflation is the highest among the so-called BRICS group of major developing nations. Costly subsidies have pushed the fiscal deficit to 5.9 percent from a target of 4.6 percent of GDP in the fiscal year that ended in March 2012. The government must push consolidation to help reduce inflation and the current account deficit, the report said, warning that an expected rise in global oil prices could again force New Delhi to overshoot its spending target. Continued policy uncertainty and more fiscal slippage “would weaken investment sentiment and result in softer near-term growth and an erosion of longer-run prospects,” the OECD said, though adding that India’s pace of growth could overtake China’s by 2020. Reuters

12 |

business daily May 23, 2012

MARKETS Hang SENG INDEX PRICE

Day %

VOLUME

PRICE

Day %

VOLUME

AIA GROUP LTD

25.8

-0.7692308

26443266

CHINA UNICOM HON

11.64

-1.355932

29277921

ALUMINUM CORP-H

3.31

1.846154

16346540

CITIC PACIFIC

11.46

0.1748252

BANK OF CHINA-H

2.88

1.052632

272811532

BANK OF COMMUN-H

5.13

1.196607

22753204

BANK EAST ASIA

27.15

0.1845018

2387313

9.47

0.2116402

6562964

BELLE INTERNATIO

13.32

1.062215

21923476

ESPRIT HLDGS

12.72

3.414634

11041663

BOC HONG KONG HO

22.25

1.598174

12004139

HANG LUNG PROPER

24.95

0.8080808

6523040

CATHAY PAC AIR

12.3

-0.3241491

5730109

HANG SENG BK

100.8

-0.4935834

1671602

CHEUNG KONG

92.5

0.7076756

3819718

HENDERSON LAND D

39.4

0.7672634

2370904

CHINA COAL ENE-H

7.42

0.405954

34260980

HENGAN INTL

79.3

1.083493

1129240

CHINA CONST BA-H

5.25

0.9615385

255163726

HONG KG CHINA GS

18.72

2.407002

12089675

CHINA LIFE INS-H

18.4

0.7667032

37518085

HONG KONG EXCHNG

112.8

1.530153

4886959

CHINA MERCHANT

23.35

0.4301075

1863000

CHINA MOBILE

82.55

0.4869142

12980275

63.5

0.6339144

16571190

CHINA OVERSEAS

15.64

3.851262

51250454

CHINA PETROLEU-H

7.15

0.4213483

78663736

CHINA RES ENTERP

25.85

-0.7677543

1339777

CHINA RES LAND

NAME

13.62

4.287902

11754156

CHINA RES POWER

14.3

1.851852

6244000

CHINA SHENHUA-H

28.55

-0.3490401

18934999

NAME

PRICE

Day %

POWER ASSETS HOL

57.65

-0.5176877

3368315

2575317

SINO LAND CO

11.28

-0.7042254

9426580

SUN HUNG KAI PRO

89.05

2.12156

5674334

1426813

210.6

-2.680222

7624095

TINGYI HLDG CO

20.3

0.4950495

7230927

WANT WANT CHINA

9.65

2.224576

32697459

WHARF HLDG

41.4

2.475248

3470094

CLP HLDGS LTD

64.05

0.3132341

2182834

CNOOC LTD

14.42

0.9803922

45618358

COSCO PAC LTD

HSBC HLDGS PLC HUTCHISON WHAMPO IND & COMM BK-H

67.35 -0.07418398

NAME

SWIRE PACIFIC-A TENCENT HOLDINGS

MOVERS

2 19200

INDEX 19039.15

4750932

4.71

1.508621

241753364

HIGH

19168.26

14.96

2.747253

37557379

MTR CORP

25.5

1217158

LOW

18644.18

NEW WORLD DEV

8.46

-0.5875441

9268582

PETROCHINA CO-H

10.22

0.5905512

54930705

PING AN INSURA-H

57.6

0.6993007

13010732

PRICE

DAY %

VOLUME

22.65

1.342282

8654600

LI & FUNG LTD

VOLUME

52W (H) 23707.94 (L) 16170.35

18600

18-May

22-May

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.22

0.625

99440357

NAME CHINA PACIFIC-H

NAME

AIR CHINA LTD-H

4.95

0.814664

14403700

CHINA PETROLEU-H

7.15

0.4213483

78663736

ZIJIN MINING-H

ALUMINUM CORP-H

3.31

1.846154

16346540

CHINA RAIL CN-H

6.28

6.440678

45541010

ZOOMLION HEAVY-H

ANHUI CONCH-H

22.3

3.480278

14597027

CHINA RAIL GR-H

2.96

5.338078

44210010

ZTE CORP-H

BANK OF CHINA-H

2.88

1.052632

272811532

CHINA SHENHUA-H

28.55

-0.3490401

18934999

BANK OF COMMUN-H

5.13

1.196502

22753204

CHINA TELECOM-H

3.66

1.666667

74473565

BYD CO LTD-H

16.3

2.644836

3322900

DONGFENG MOTOR-H

12.66

4.455446

23588309

CHINA CITIC BK-H

4.23

2.421308

30380397

GUANGZHOU AUTO-H

6.39

-0.3120125

14208782

CHINA COAL ENE-H

7.42

0.405954

34260980

HUANENG POWER-H

4.87

-0.6122449

27604438

CHINA COM CONS-H

7.21

7.772795

34025938

IND & COMM BK-H

4.71

1.508621

241753364

CHINA CONST BA-H

5.25

0.9615385

255163726

JIANGXI COPPER-H

16.28

1.243781

15783746

CHINA COSCO HO-H

3.45

2.071006

12722684

PETROCHINA CO-H

10.22

0.5905512

54930705

CHINA LIFE INS-H

18.4

0.7667032

37518085

PICC PROPERTY &

8.39

0.5995204

21929235

CHINA LONGYUAN-H

4.63

-1.981978

11385000

PING AN INSURA-H

57.6

0.6993007

13010732

CHINA MERCH BK-H

14.94

2.751032

26649799

SHANDONG WEIG-H

7.96

-3.163017

5252800

YANZHOU COAL-H

MOVERS

DAY %

VOLUME

13.38

0.2998501

13091935

2.53

0.7968127

30757711

10.32

6.943005

29960451

15.6

1.960784

8201927

0 9900

INDEX 9698.6 HIGH

9761.06

LOW

9398.4

CHINA MINSHENG-H

7.34

2.945302

33986341

SINOPHARM-H

18.04

-0.4415011

4933383

52W (H) 13317.51

CHINA NATL BDG-H

9.13

3.280543

49331000

TSINGTAO BREW-H

46.75

-0.1068376

2752417

(L) 8058.58

10.36

1.768173

16491675

WEICHAI POWER-H

32.4

4.516129

2955011

CHINA OILFIELD-H

PRICE

9300

18-May

22-May

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.66

0.3773585

35815030

DATANG INTL PO-A

5.25

-1.315789

4565252

SHANG PUDONG-A

8.96

1.014656

67549651

AIR CHINA LTD-A

6.11

1.15894

11773362

DONGFANG ELECT-A

21.93

1.905204

6083511

SHANGHAI ELECT-A

5.54

1.094891

3657883

ALUMINUM CORP-A

6.93

-0.2877698

11790388

EVERBRIG SEC -A

13.69

2.240478

7022486

SHANXI LU'AN -A

27.32

1.712584

9648422

ANHUI CONCH-A

16.67

3.347799

44463646

GD MIDEA HOLDING

14.03

1.593049

22526197

SHANXI XINGHUA-A

75.98

0.02632965

1453556

BANK OF BEIJIN-A

9.87

1.023541

30253535

GD POWER DEVEL-A

2.58

11356894

SHANXI XISHAN-A

18.23

2.358226

33164091

SHENZ DVLP BK-A

15.97

1.268231

11359898

7.55

2.721088

21013749

15.53

0.9752926

986583

9.9

1.020408

37624076

NAME

BANK OF CHINA-A

2.99

-0.3333333

18690569

GF SECURITIES-A

31.38

2.885246

6913951

BANK OF COMMUN-A

4.73

0.4246285

36434275

GREE ELECTRIC

21.95

1.012425

15814768

BAOSHAN IRON & S

4.85

1.041667

16710747

GUIZHOU PANJIA-A

32.59

1.907442

6377799

24.87

1.179821

2699968

HAITONG SECURI-A

10.19

2.618328

73160135

SUNING APPLIAN-A

BYD CO LTD -A

SHENZEN OVERSE-A SINOVEL WIND-A

HANGZHOU HIKVI-A

44.3

-1.446051

4189415

TONGLING NONFE-A

21.8

1.631702

20113708

HEBEI IRON-A

3.01

0.3333333

14273392

TSINGTAO BREW-A

37.14

1.033732

3124990

HENAN SHUAN-A

63.11

0.7664059

1304283

WEICHAI POWER-A

32.2

2.678571

4342643

23584976

HUATAI SECURIT-A

10.92

3.901047

22787232

WULIANGYE YIBIN

34.63

1.972909

23973268

CHINA CITIC BK-A

4.34

1.165501

8923792

CHINA CNR CORP-A

4.32

0.9345794

39689553

CHINA COAL ENE-A

9.22

0.5452563

8804981

CHINA CONST BA-A

4.54

0.4424779

CHINA COSCO HO-A

10694933

HUAXIA BANK CO

9.94

1.532176

30180433

XIAMEN TUNGSTEN

46.82

0.472103

6909827

CHINA CSSC HOL-A

32.13

1.709402

10189229

IND & COMM BK-A

4.23

48989887

XINJIANG GUANG-A

27.37

1.445515

10256393 13671384

CHINA EAST AIR-A

4.08

0.7407407

7079985

INDUSTRIAL BAN-A

13.67

1.409496

32601361

YANGQUAN COAL -A

19.53

1.507277

CHINA EVERBRIG-A

2.97

0.6779661

34220681

INNER MONG BAO-A

44.6

-0.4464286

60122584

YANTAI CHANGYU-A

97.7

1.086394

601287

CHINA LIFE INS-A

17.78

5427391

INNER MONG YIL-A

23.16

0.9150327

9522680

YANTAI WANHUA-A

14.51

1.397624

8107775

CHINA MERCH BK-A

11.81

1.460481

41172979

INNER MONGOLIA-A

6.4

0.6289308

50742370

YANZHOU COAL-A

23.09

1.094571

5651916

CHINA MERCHANT-A

13.19

3.532182

14668185

JIANGSU HENGRU-A

28.2

0.7142857

2305907

YUNNAN BAIYAO-A

52.58

1.115385

1650475

CHINA MERCHANT-A

24.1

4.782609

10545785

JIANGSU YANGHE-A

169

0.5473584

1296229

ZHONGJIN GOLD

22.88

-0.1309472

6761582

CHINA MINSHENG-A

6.64

1.219512

69664038

JIANGXI COPPER-A

25.88

1.054276

11572022

ZIJIN MINING-A

4.14

0.2421308

37777504

JINDUICHENG -A

14.13

2.169197

7842805

10.3

7.180021

99001775

JIZHONG ENERGY-A

20.09

1.413428

12163386

15.69

0.6414368

21864655

229.28

2.728617

4145847

6.34

4.10509

43365750

CHINA OILFIELD-A

CHINA NATIONAL-A

18.66

1.967213

7617539

CHINA PACIFIC-A

21.4

1.421801

11029494

KWEICHOW MOUTA-A

CHINA PETROLEU-A

7.01

0.4297994

23398089

LUZHOU LAOJIAO-A

43.59

1.893408

9437857

CHINA RAILWAY-A

2.74

2.238806

52582133

METALLURGICAL-A

2.64

12783107

ZOOMLION HEAVY-A ZTE CORP-A

MOVERS

259

CHINA RAILWAY-A

4.5

3.211009

59956657

NARI TECHNOLOG-A

19.96

0.8590197

8169405

CHINA SHENHUA-A

26.26

18403897

NINGBO PORT CO-A

2.64

-0.7518797

55334235

CHINA SHIPBUIL-A

5.87

2.802102

63642100

PANGANG GROUP -A

8.06

0.6242197

39423781

CHINA SOUTHERN-A

4.66

0.8658009

19125063

PETROCHINA CO-A

9.56

0.4201681

14882225

CHINA STATE -A

3.33

2.461538

73891668

PING AN INSURA-A

42.57

2.282556

30048374

CHINA UNITED-A

4.13

0.7317073

40151742

POLY REAL ESTA-A

13.41

5.424528

48885712

HIGH

2627.52

CHINA VANKE CO-A

9.01

3.921569

58269085

QINGDAO HAIER-A

12.15

0.9975062

12893894

LOW

2627.52

CHINA YANGTZE-A

6.79

1.041667

14053733

QINGHAI SALT-A

32.89

1.481024

3934339

CITIC SECURITI-A

13.3

2.782071

94159173

SAIC MOTOR-A

15.29

1.124339

18515355

CSR CORP LTD -A

4.9

1.449275

47783569

SANY HEAVY INDUS

14.43

5.251641

49849773

7.57

0.9333333

109055215

SHANDONG GOLD-MI

34.34

5854109

PRICE DAY %

Volume

PRICE DAY %

Volume

DAQIN RAILWAY -A

21 2620

INDEX 2627.52

52W (H) 3140.10 (L) 2254.56

2560

18-May

22-May

FTSE TAIWAN 50 INDEX NAME ACER INC

NAME

30.8

0.6535948

18394196

FORMOSA PLASTIC

79.2

0.7633588

3810787

2.564103

14135468

FOXCONN TECHNOLO

100

2.040816

11027096

ASIA CEMENT CORP

33.35

0.3007519

2877992

FUBON FINANCIAL

29.2

0.3436426

9995064

ASUSTEK COMPUTER

299.5

0.6722689

2204138

HON HAI PRECISIO

87.2

4.807692

41933316

AU OPTRONICS COR

12.35

1.646091

27947139

HOTAI MOTOR CO

181

558606

CATCHER TECH

HTC CORP

431.5

6.019656

15733503

4193665

562

YULON MOTOR CO

ADVANCED SEMICON

178.5

4.385965

13642091

CATHAY FINANCIAL

29.2

0.6896552

9394926

HUA NAN FINANCIA

CHANG HWA BANK

15.55

0.974026

5940418

LARGAN PRECISION

0.7168459

2211794

72 -0.4149378

7155867

LITE-ON TECHNOLO

35.35 -0.4225352

3182633

CHENG SHIN RUBBE CHIMEI INNOLUX C

12.5

1.214575

37980282

MEDIATEK INC

262.5

0.1908397

5577206

CHINA DEVELOPMEN

7.35

-0.541272

37529914

MEGA FINANCIAL H

21.2

0.7125891

9676892

CHINA STEEL CORP

28.2

12633985

NAN YA PLASTICS

57.9

1.223776

2979897

CHINATRUST FINAN

17.25

1.173021

21487337

PRESIDENT CHAIN

157

0.3194888

555665

91.4

0.660793

6260818

QUANTA COMPUTER

81.2 -0.8547009

6184351

CHUNGHWA TELECOM COMPAL ELECTRON

8227651

SILICONWARE PREC

31.4

0.8025682

5340876

DELTA ELECT INC

0.9988901

6284250

SINOPAC FINANCIA

9.79

1.661475

10996865

FAR EASTERN NEW

31.85

0.4731861

2597804

SYNNEX TECH INTL

67.9

0.7418398

2000003

FAR EASTONE TELE

67.7

2485881

TAIWAN CEMENT

32.7

0.770416

3691310

FIRST FINANCIAL

16.9

6926832

TAIWAN COOPERATI

17.45

0.5763689

3623820

FORMOSA CHEM & F

79.2

1.149425

2593255

TAIWAN FERTILIZE

69.4

1.166181

793632

FORMOSA PETROCHE

83.5

0.3605769

1377956

TAIWAN GLASS IND

28.1

0.1782531

498605

PRICE DAY %

Volume

97 -0.5128205

5849639

TAIWAN MOBILE CO TPK HOLDING CO L

404.5

TSMC UNI-PRESIDENT

5.064935

7203094

82.2 -0.3636364

33977797

45.9 -0.3257329

5200921

UNITED MICROELEC

13.35

0.754717

WISTRON CORP

41.05

1.108374

7448849

YUANTA FINANCIAL

12.75

1.593625

20841898

2.725367

6660909

MOVERS

6 5100

INDEX 5031.99 HIGH

5035

LOW

4943.91

26888125

52W (H) 6247.96 (L) 4643.05

4900

18-May

22-May

May 23, 2012 business daily | 13

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

Max 20.45

Average 19.60

MElCo CroWN ENtErtAINMENt

Min 19.20

20.40

32.60

12.80

20.16

32.44

12.68

19.92

32.28

12.56

19.68

32.12

12.44

19.44

31.96

12.32

19.20

last 19.20

SANDS CHINA ltD

Max 28.05

Average 26.97

Max 32.60

Average 32.41

Min 31.80

Min 26.45

last 26.45

PRICE

Average 12.48

Min 12.24

last 12.42

WyNN MACAU ltD 19.9

27.7

14.44

19.6

27.4

14.28

19.6

27.1

14.12

19.0

26.8

13.96

18.7

26.5

13.80 Max 14.60

Average 14.10

DAY %

YTD %

(H) 52W

Min 13.84

last 13.84

18.4 Max 19.88

Average 18.89

-7.31805388

111.3000031

76.87999725

BRENT CRUDE FUTR Jul12

108.66

-0.137854977

2.868503266

125.6100006

94.34999847

GASOLINE RBOB FUT Jun12

293.96

-0.017006224

7.245530828

336.8899822

245.539999

GAS OIL FUT (ICE) Jul12

912.75

0.523127753

1.473040578

1045.75

810

2.617

0.306630893

-17.75612822

5.09400034

1.981999993

NATURAL GAS FUTR Jun12 HEATING OIL FUTR Jun12

286.55

0.181799112

0.688710074

331.5699816

256.0600042

Gold Spot $/Oz

1579.47

-0.8699

0.9304

1921.17

1478.78

Silver Spot $/Oz

28.1475

-1.1501

1.1227

44.2175

26.085

1461

-0.4178

4.7687

1915.75

1339.25

610.13

-0.7111

-6.6366

848.36

537.54

LME ALUMINUM 3MO ($)

2047

-1.015473888

1.336633663

2695

1955.75

LME COPPER 3MO ($)

7731

1.058823529

1.723684211

9905

6635

1905.5

0.60718057

3.279132791

2539.5

1718.5

17185

2.139673105

-8.150721539

25195

16550

15.38

-0.32404407

0.065061809

19.375

14.07500076

624.25

-1.382306477

-5.595463138

795

572.25

Platinum Spot $/Oz Palladium Spot $/Oz

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul12 Jul12

PRICE

(L) 52W

-0.399697526

last 18.62

Min 18.46

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

DAY %

0.9883 1.5773 0.9417 1.2755 79.78 7.999 7.7663 6.323 55.425 31.39 1.2695 29.515 43.135 9260 78.845 1.20108 0.80865 8.0949 10.2035 101.76 1.03

YTD %

-0.3227 -0.3915 -0.4779 -0.4915 -0.5891 -0.0163 -0.0258 0.0696 -0.7037 -0.1911 -0.0079 0.1762 0.0927 0.5292 -0.2689 0.0125 0.0952 -0.1248 0.4724 -0.1081 0.0097

(H) 52W

-3.1933 1.4798 -0.3823 -1.5894 -3.5974 0.0075 0.0142 -0.4428 -4.258 0.5097 2.1347 2.5885 1.6344 -2.0626 -0.5238 1.308 3.0594 0.4855 1.6308 -2.0637 -0.0097

(L) 52W

1.1081 1.6618 0.9596 1.4697 84.18 8.0449 7.8113 6.5043 55.47 31.96 1.3199 30.715 44.35 9398 88.637 1.24736 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

MACAU RELATED STOCKS

686.5

-2.485795455

0.036429872

957.5

592.25

NAME

(H) 52W

(L) 52W

SOYBEAN FUTURE Jul12

1406.25

-0.442477876

14.60880196

1512.5

1125.5

ARISTOCRAT LEISU

3.01

3.793103

36.81818

3.25

1.88

2015348

COFFEE 'C' FUTURE Jul12

176.55

0.799314873

-23.96640827

290.75

172.1999969

CROWN LTD

8.85

1.724138

9.394312

9.29

7.45

1272981

SUGAR #11 (WORLD) Jul12

20.29

-0.441609421

-10.06205674

27.02999878

20.06999969

AMAX HOLDINGS LT

0.081

2.531646

-6.896549

0.131

0.06

6842000

COTTON NO.2 FUTR Jul12

76.93

-0.761093911

-15.7485489

117

76.25999451

BOC HONG KONG HO

22.25

1.598174

20.92392

24.45

14.24

12004139

CENTURY LEGEND

0.233

1.304346

0.41

0.204

3.03

8.214288

4.79

2.3

66000 51250454

WHEAT FUTURE(CBT) Jul12

PRICE

CHEUK NANG HLDGS

World Stock MarketS - Indices NAME

15.64

3.851262

20.49307

17.86

9.99

10.04

0.1996008

-19.68

14.1

10.02

22000

CHOW TAI FOOK JE

10.22

1.188119

-26.58046

15.16

9.97

4473108 1440000

EMPEROR ENTERTAI

1.2

3.448276

8.108107

2.09

0.97

FUTURE BRIGHT

0.87

1.162791

107.1429

1.09

0.3

2232000

GALAXY ENTERTAIN

19.2

-4.950495

34.83146

24.95

8.69

38890800

100.8

-0.4935834

9.386867

125

84.4

1671602

20.2

1.711981

24.903

18.56

764597

63.5

0.6339144

7.627119

82.15

16571190

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

12504.48

1.092213

2.34843

13338.66016

10404.49

NASDAQ COMPOSITE INDEX

2847.21

2.462223

9.291598

3134.17

2298.89

HANG SENG BK

FTSE 100 INDEX

5358.54

1.019139

-3.835768

6084.08

4791.01

HOPEWELL HLDGS

DAX INDEX

6376.58

0.7193131

8.107861

7523.53

4965.8

HSBC HLDGS PLC

NIKKEI 225

8729.29

1.104948

3.239847

10255.15

8135.79

HANG SENG INDEX

19039.15

0.617419

3.280606

23707.94922

16170.35

CSI 300 INDEX

2627.525

1.557418

12.01253

3140.102

2254.567

TAIWAN TAIEX INDEX

7274.89

1.149296

2.867757

9089.47

HUTCHISON TELE H

3.62

1.685393

21.07023

3.63

2.13

5015016

LUK FOOK HLDGS I

17.92

-0.6651885

-33.87454

46.15

16.56

2413240

MELCO INTL DEVEL

6.53

1.397516

13.17158

10.76

4.3

3582001

MGM CHINA HOLDIN

12.42

-1.584786

29.48083

17.183

7.6

6850645

6609.11

MIDLAND HOLDINGS

3.69

5.730659

-8.663365

5.48

2.95

2702002

NEPTUNE GROUP

0.101

-9.00901

0.157

0.08

166000

NEW WORLD DEV

8.46

-0.5875441

35.14377

12.381

6.13

9268582

SANDS CHINA LTD

24315535

KOSPI INDEX

1828.69

1.643016

0.1615756

2192.83

1644.11

S&P/ASX 200 INDEX

4121.004

1.163117

1.588621

4756.2

3765.9

4021.1

2.055578

5.209539

4234.734

3217.951

FTSE Bursa Malaysia KLCI

1546.84

0.5152998

1.052438

1609.33

NZX ALL INDEX

789.955

1.142592

8.242628

814.431

3314.49

0.1949795

8.848815

3518.96

VOLUME CRNCY

CHINESE ESTATES

PRICE

PHILIPPINES ALL SHARE IX

DAY % YTD %

CHINA OVERSEAS

COUNTRY

JAKARTA COMPOSITE INDEX

12.20

14.60

92.2

CORN FUTURE

Max 12.80

28.0

WTI CRUDE FUTURE Jun12

LME ZINC

31.80

CURRENCY EXCHANGE RATES

NAME

METALS

last 32.10

SJM HolDINGS ltD

Commodities ENERGY

MGM CHINA HolDINGS

26.45

-3.818182

20.50113

33.05

14.9

SHUN HO RESOURCE

1.18

1.32

0.82

1310.53

SHUN TAK HOLDING

2.78

3.345725

8.63074

4.686

2.241

3405966

700.441

SJM HOLDINGS LTD

13.84

-3.48675

10.67099

20.711

10.079

17815901

SMARTONE TELECOM

14.32

2.285714

6.547622

18.5

9.8

1398460

WYNN MACAU LTD

18.54

-4.136505

-4.923077

27.48

14.807

21280093

2695.06

HSBC Dragon 300 Index Singapor

530.01

0.52

6.79

ASIA ENTERTAINME

4.69

1.077586

-20.2381

10.8692

4.61

89231

STOCK EXCH OF THAI INDEX

1131.52

-0.3206596

10.35775

1247.72

843.69

BALLY TECHNOLOGI

44.68

0.9261351

12.94236

49.32

24.74

1110152

HO CHI MINH STOCK INDEX

447.94

-0.01785635

27.41858

492.44

332.28

BOC HONG KONG HO

2.84

2.158273

18.47217

3.15

1.81

12555

Laos Composite Index

995.62

-1.804876

10.69086

1165.57

876.33

GALAXY ENTERTAIN

2.6

3.174603

39.03743

3.24

1.08

21600

INTL GAME TECH

14.49

3.5

-15.75582

19.15

13.38

2952492

JONES LANG LASAL

71.03

1.268891

15.94842

99.89

46.01

479920

LAS VEGAS SANDS

48.17

3.859422

12.7311

62.09

36.08

14413096

MELCO CROWN-ADR

12.49

3.565506

29.83368

16.15

7.05

9405854

MGM CHINA HOLDIN

1.66

0.6060606

39.2976

2.21314

1.00254

4000

MGM RESORTS INTE

10.87

5.227493

4.218597

16.05

7.4

15765960

SHUFFLE MASTER

15.59

3.176704

33.02047

18.77

7.35

505038

SJM HOLDINGS LTD

1.832

-1.505376

13.96062

2.60368

1.26239

7000

WYNN RESORTS LTD

104.17

2.185556

-5.719973

165.4931

98.26

3241284

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

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business daily May 23, 2012

Opinion

Ten reasons for Europe Dominique Moisi

Founder of the French Institute of International Affairs and a professor at Institute d’Etudes Politiques

he euro, many now believe, will not survive a failed political class in Greece or escalating levels of unemployment in Spain: just wait another few months, they say, the European Union’s irresistible collapse has started. Dark prophecies are often wrong, but they may also become self-fulfilling. Let’s be honest: playing Cassandra nowadays is not only tempting in a media world where “good news is no news”; it actually seems more justified than ever. For the EU, the situation has never appeared more serious. It is precisely at this critical moment that it is essential to re-inject hope and, above all, common sense into the equation. So here are ten good reasons to believe in Europe – ten rational arguments to convince pessimistic analysts, and worried investors alike, that it is highly premature to bury the euro and the EU altogether. The first reason for hope is that statesmanship is returning to Europe, even if in homeopathic doses. It is too early to predict the impact of François Hollande’s election as President of France. But, in Italy, one man, Mario Monti, is already making a difference. Of course, no one elected Monti, and his position is fragile and already contested, but there is a positive near-consensus that has allowed him to launch long-overdue structural reforms. It is too early to say how long this consensus will last, and what changes it will bring. But Italy, a country that under Silvio’s Berlusconi’s cavalier rule was a source of despair, has turned into a source of real, if fragile, optimism. A second reason to believe in Europe is that with statesmanship comes progress in governance. Monti and Hollande have both appointed women to key ministerial positions. Marginalised for so long, women bring an appetite for success that will benefit Europe.

to Europe’s creativity. Europe is not condemned to be a museum of its own past. Tourism is important, of course, and from that standpoint Europe’s diversity is a unique source of attractiveness. But this diversity is also a source of inventiveness. From German cars to French luxury goods, European industrial competitiveness should not be underestimated. The moment when Europe truly believes in itself, the way Germany does, and combines strategic longterm planning with well allocated R&D investments, will make all the difference. Indeed, in certain key fields, Europe possesses a globally recognised tradition of excellence linked to a very deep culture of quality. The fifth source of optimism is slightly paradoxical. Nationalist excesses have tended to lead Europe to catastrophic wars. But the return of nationalist sentiment within Europe today creates a sense of emulation and competition, which proved instrumental in the rise of Asia yesterday. Koreans, Chinese, and Taiwanese wanted to do as well as Japan. In the same way, the moment will soon come when the French want to do as well as Germany.

Investors, of course, are hedging their bets. Having ventured successfully into emerging non-democratic countries whose frailty they are starting to fear, some, out of prudence, are starting to rediscover Europe

No illusions Third, European public opinion has, at last, fully comprehended the gravity of the crisis. Nothing could be further from the truth than the claim that Europe and Europeans, with the possible exception of the Greeks, are in denial. Without lucidity born of despair, Monti would never have come to power in Italy. In France, too, citizens have no illusions. Their vote for Hollande was a vote against Sarkozy, not against austerity. They are convinced, according to recently published publicopinion polls, that their new president will not keep some of his “untenable promises,” and they seem to accept this as inevitable. The fourth reason for hope is linked

Universal message The sixth reason is linked to the very nature of Europe’s political system. Churchill’s famous adage that democracy is the worst political system, with the exception of all the others, has been borne out across the continent. More than 80 percent of French citizens voted in the presidential election. Watching on their televisions the solemn, dignified, peaceful, and transparent transfer of power from the president they had defeated to the president they had elected, French citizens could only feel good about themselves

and privileged to live in a democratic state. Europeans may be confused, inefficient, and slow to take decisions, but democracy still constitutes a wall of stability against economic and other uncertainties. The seventh reason to believe in Europe is linked to the universalism of its message and languages. Few people dream of becoming Chinese, or of learning its various languages other than Mandarin. By contrast, English, Spanish, French, and, increasingly, German transcend national boundaries. Beyond universalism comes the eighth factor supporting the EU’s

survival: multiculturalism. It is a disputed model, but multiculturalism is more a source of strength than of weakness. The continent’s fusion of culture makes its people richer rather than poorer. The ninth reason for hope stems from the EU’s new and upcoming members. Poland, a country that belongs to “New Europe,” is repaying the EU with a legitimacy that it had gained from Europe during its post-communist transition. And the entrance of Croatia, followed by Montenegro and a few other Balkan countries, could compensate for the departure of Greece (should it come to that for the Greeks). Finally, and most important, Europe and the world have no better alternative. The Greek crisis may be forcing Europe to move towards greater integration, with or without Greece. The German philosopher Jürgen Habermas speaks of a “transformational reality” – a complex word for a simple reality: divided we fall, whereas united, in our own complex manner, we may strive for “greatness” in the best sense. Investors, of course, are hedging their bets. Having ventured successfully into emerging non-democratic countries whose frailty they are starting to fear, some, out of prudence, are starting to rediscover Europe. They may well be the wise ones. © Project Syndicate

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Chief REPORTER Vitor Quintã Newsdesk Cláudia Aranda, Kristy Chan, Kelsey Wilhelm, Cherry Lee, Terina Cao, Tony Lai Creative Director José Manuel Cardoso Designer Janne Louhikari Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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May 23, 2012 business daily | 15

OPINION Business

wires Leading reports from Asia’s best business newspapers

Taipei Times

Prosecutors on Monday charged Taiwan’s jailed former president for illegally seizing confidential government documents just before he retired. Chen Shui-bian, who left office in 2008 after eight years in power, is alleged to have ordered aides to deliver more than 17,000 documents from security agencies, 3,419 of which were classified, prosecutors said. Prosecutors, however, recommended that the court give the former president a relatively light sentence because Mr Chen never released any of the documents to the public.

Business Inquirer

The Philippine currency is expected to weaken further and test the 43.50-to-a-dollar level in the coming days as the ongoing debt crisis in the eurozone heightens risk aversion globally. The peso may stay in the 43 territory in the next few days as uncertainties push fund owners to hold on to the U.S. dollar and liquidate their emerging-market assets, such as those from the Philippines, said Banco de Oro. The peso weakened to the 43-to-a-dollar territory on Friday to close at 43.25 against the U.S. dollar, a four-month low.

Straits Times

Singapore presents the lowest hiring-related risks to employers in the Asia-Pacific region, according to a report from a human resource consultancy. The study by Aon Hewitt has ranked Singapore third, behind New York and Toronto, on its list of the world’s 10 cities with the lowest employment risks. Such risks, the study pointed out, can come from not being able to find enough people for available positions or a government instituting policies that stand in the way of hiring the right talent for the job.

China Daily

The maker of the popular game Angry Birds, Finlandbased Rovio Entertainment Ltd, plans to expand its valueadded chain to capture more business opportunities in China. The company plans to build activity parks around China in the next few years and to set up official stores in large cities for people to buy licensed Angry Birds products, said co-founder Peter Vesterbacka. Angry Birds launched its first activity park in Finland in April but the company did not reveal when and where the first park will open in China. Activity park manufacturer Lappset Group was assigned to work on the new projects in China.

Building Macau as a hospitality centre Ricardo Siu

Associate Professor of Business Economics, FBA, University of Macau

onsidering the historical and economic progress of Macau, the recent endeavour to turn it from a casino-dominated economy into a moderately diversified hospitality centre is a reasonably correct decision to ensure its competitive edge and, hence, long-term growth. Indeed, several internal and external factors have emerged since the dawn of this new millennium, which set the stage for development. Nevertheless, a number of components necessary for accomplishing the goal have yet to be formulated. A crucial change in Macau’s casino industry since its monopolistic structure turned oligopolistic at the dawn of this new millennium is the rising amount of capital being invested in the construction of non-gaming hospitality facilities, as part of the large-scale casino resorts projects. In terms of the number of hotel rooms, Macau’s hospitality capacity will have tripled between the beginning of 2002 and the end of 2012. In addition, Macau possesses Asia’s largest single MICE venue and hotel building, apart from dense high-end retail chains in town. The collective power derived from the recent development of individual casino resorts has allowed the industry to benefit from external economies of scale. Compared with a decade ago, it is with little argument that the initial shape of Macau as a hospitality centre – a destination that possesses its unique features – has been formed.

Polycentric Despite the fact that unique features and the world’s big

Riding the wave of regionalisation, a strategic move to deepen Macau’s cooperation with the hospitality sectors in neighbouring PRD cities is an indispensable step along the road ahead

hamper the flow of tourists and their perception of overall service quality. Even though some landmark projects have been introduced recently, including the Light Rail System, it is still a matter of debate as to how proactive and comprehensive they are. Last but not least, the deficiency in quantity and quality of related human resources may inhibit the provision of world-class services, let alone turn Macau as a world tourism and leisure centre.

Progress ahead

brands are found in this tiny city-state, it is casino gaming and not the non-gaming hospitality segment that remains the goose that lays the golden eggs. For the sake of ensuring the industry’s long-term growth and its niche in an increasingly competitive field, a further push for interplay between the gaming and non-gaming components is inevitable. Thanks to full support from the central government in the form of the one country, two systems policy, a series of measures has been taken since the end of 2008 to push Macau’s further development as a hospitality centre in the Pearl River Delta (PRD). Indeed, the proposal of building Macau into a world tourism and leisure centre for the PRD has been stated clearly in the 12th Five Year Plan of the Central Government. Together with the national plan to construct the PRD as a polycentric megacity region – where major cities in the region will be connected with related infrastructure under the concept of a one-

hour living area – Macau is no longer on its own on the journey to achieve the desired ends. Macau has gained the necessary hardware and policy support for its progress towards being a hospitality centre.

Existing curbs Nevertheless, a number of ingredients may not be right for accomplishing related development. First, the huge and unique structure of Macau’s gaming segment may be too big to be altered, thus restricting the real functioning of the nongaming segments for Macau’s progress towards becoming a world hospitality centre. Second, the vague relationship between newly developed casino resort facilities and tourism resources could potentially constrict the capacity of tourism and leisure to lengthen the average stay of visitors. Third, the limited capacity and efficiency of the existing infrastructure (for example, customs, the transport system and connections) may

The path to making Macau a hospitality centre in the PRD is one-way. Funded by the city’s considerable gaming income, and pushed by public interest and related policies, Macau’s progress towards becoming such a centre is likely to be accelerated in the foreseeable future. Following the opening of another series of milestone properties by one of the casino resort operators in April, the government formally approved the new projects of two other operators early this month, which are expected to start operating in 2015 or 2016. It is commonly expected that the market may consolidate its existing fixtures in the coming three to four years. This is, indeed, an important period for investors and the government to further review strategies on how to more appropriately join gaming and non-gaming components. Riding the wave of regionalisation, a strategic move to deepen Macau’s cooperation with the hospitality sectors in neighbouring PRD cities is an indispensable step along the road ahead.

16 |

business daily May 23, 2012

CLOSING Hong Kong inflation slows in April

IMF tells U.K. to consider rate cut

Hong Kong’s consumer price inflation slowed to 4.7 percent in April from a year earlier as increases in food prices and private rentals eased, the city’s Census and Statistics Department said yesterday.The rise in the city’s composite consumer price index was lower than March’s 4.9 percent increase. “Inflation is likely to come down in the coming months, as domestic and external price pressures have been receding amid a more difficult economic environment as well as slower inflation in the region,” a government spokesman said in a statement. Hong Kong’s Housing Authority meanwhile said it will raise public housing rents by 10 percent on household income growth.

The International Monetary Fund yesterday said Britain may need to further slow the pace of its tough austerity measures to lift the country’s growth amid the risk of a major eurozone “shock”. Its annual look at the U.K. economy endorsed the government’s deficit cutting plan. But it said if growth failed to pick up, the government would have to consider delaying cuts and even cutting interest rates. “Fiscal easing and further use of the government’s balance sheet should be considered if downside risks materialise,” said the fund. “If growth does not build momentum... planned fiscal adjustment would need to be reconsidered,” it added.

Euro ‘threat’ to global outlook Weak eurozone the single biggest threat to global economy – OECD

he United States and Japan are leading a fragile economic recovery among developed countries that could yet be blown off course if the eurozone fails to contain the damage from its problem debtor states, the Organisation for Economic Co-operation and Development said yesterday. In its twice-yearly economic outlook, the Paris-based OECD forecast that global growth would ease to 3.4 percent this year from 3.6 percent in 2011, before accelerating to 4.2 percent in 2013, in line with its last estimates from late November. “The global economic outlook is still cloudy,” OECD Secretary General Angel Gurria told reporters. “At first sight the prospects for the global economy are somewhat brighter than six months ago. At closer inspection, the global economic recovery is weak, considerable downside risks remain and sizeable imbalances remain to be addressed.” Growth across the organisation’s 34 members, generally the wealthiest in the world, would ease this year to 1.6 percent from 1.8 percent in 2011 and then reach 2.2 percent in 2013, the OECD said, also roughly in line with previous estimates. Mr Gurria said that public finances were “fragile”, and in some cases “in dire straits”, in OECD countries.

Persistent weakness A perception that the burden of the economic crisis had not been fairly shared was fuelling a confidence crisis and European leaders should consider all possible measures to mend the bloc’s debt problems. “A bad outcome scenario in the euro area with implications for the

The global economic outlook ‘is still cloudy,’ says OECD Secretary General Angel Gurria

rest of the world cannot be ruled out,” he said. The OECD forecast that the 17-member euro zone economy would shrink 0.1 percent this year before posting growth of 0.9 percent in 2013, though regional powerhouse Germany would chalk up growth of 1.2 percent in 2012 and 2.0 percent in 2013. “We see a slow rebound of growth in the United States driven mostly by private demand, some pick-up in Japan and moderate to strong growth in emerging economies,” OECD chief economist Pier Carlo Padoan told Reuters in an interview. “We also see flat growth in the euro area which hides important differences, with northern countries growing and southern countries in recession,” he added.

Although OECD economies were on the mend, the euro crisis could still spiral out of control with Greece struggling to remain solvent and Spanish banks needing to be recapitalised, Mr Padoan said. The European Central Bank’s injection of one trillion euros (US$1.3 trillion) of liquidity into the euro zone’s banking system and an increase in European bailout funds and IMF reserves had helped keep the euro zone’s debt crisis from spiralling out of control. “Such persistent weakness reflects underlying economic, fiscal and financial imbalances within the euro area, which have been the root cause of this crisis and barely begun to unwind,” Mr Padoan said. “If the situation gets worse, there are ways to enhance the firewall

capacity which could include a stronger intervention or role of the ECB,” he added. In particular, the ECB should not rule out buying government bonds again to keep borrowing costs down, lending to the ESM European bailout fund and cutting its benchmark interest rate, which currently stands at 1.00 percent. The ECB could also consider another injection of liquidity into the banking system. In contrast to the euro zone, the United States was expected to continue to benefit from easy credit conditions and ultra-loose monetary policy, with the world’s biggest economy forecast to grow 2.4 percent this year and 2.6 percent in 2013. Reuters

HK regulator defends IPO crackdown‎ Sponsors may face up to 3 years in jail and a fine of HK$700,000

SFC chief executive Ashley Alder urges IPO sponsors to shape up‎

ong Kong’s stock market regulator yesterday urged IPO sponsors to carry out more painstaking examinations of listing companies, or run the risk of jail and heavy fines. After a series of scandals, the Securities and Futures Commission (SFC) proposed this month that sponsors of wayward initial public offerings should face up to three years in jail and a fine of HK$700,000 (US$90,000). The idea is to broaden the punishment for misleading investors beyond the actual company that is listing and target its financial sponsors, such as investment banks, which underwrite the IPO and back its prospectus. Hong Kong is the world’s IPO capital, and SFC chief executive Ashley Alder told a briefing that his agency would not allow any undermining of the stock market’s reputation. “The proposals were strongly influenced by the deficiencies we had seen in some sponsor work over the past few years,” he said, demanding greater due

diligence by banks and other sponsors before the listing company’s IPO. “Sponsors should kick the tyres hard, all four of them, before submitting an application for listing approval,” Mr Alder said. Hong Kong retained its crown as the world’s biggest IPO market for the third year in a row in 2011, thanks to a slew of companies that turned to the city in a bid to tap mainland China’s explosive growth. The SFC in April revoked the licence of local brokerage Mega Capital (Asia) and fined it a record HK$42 million (US$5.4 million) for misconduct surrounding an IPO three years ago. The SFC is holding a two-month public consultation on its proposals before deciding how to proceed. It said in outlining the measures in early May that it expected sponsoring firms to act as “key gatekeepers of market quality”. AFP