Wastewater tender reopening moves on
Revamp coming for empty market Page 6
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Year I - Number 39 - Thursday May 24, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00
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HK’s Joseph Lau charged with bribery
City still competitive in Greater China Macau remained in the 13th spot among 294 cities in a competitiveness ranking released by the China Academy of Social Sciences led by Hong Kong. But the territory topped the index for ‘living environment’ satisfaction. The Pearl River Delta is identified as one of the most competitive regions, with three cities in the top 10, including Shenzhen and Guangzhou. Page 3
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key backer of Global Gaming Expo Asia is to complain to the Macau government about a patent dispute that descended to near-farce on the show floor yesterday. The American Gaming Association says if companies continue to use the Macau event to fight copyright wars in public then G2E Asia could be forced to move elsewhere. In a day of comic drama, the American company Shuffle Master – in dispute with Macau firm LT Game over intellectual property rights to a multi-game
electronic casino product – first covered its Rapid games display on request from Macau customs officials, then on internal legal advice uncovered, then after another visit from customs at lunchtime covered again and then – at 5pm just before the show closed officially for the day – finally uncovered the product. Frank Fahrenkopf, president and CEO of the AGA told Business Daily: “We think this is the centre of the Asian universe just as Las Vegas is the centre of the gaming universe in the West. So we wouldn’t
want to move. But if the [Macau] government’s going to get involved and interfere over litigation, that’s not a good environment.” More on pages 2 & 3 www.macaubusinessdaily.com
Brought to you by
HANG SENG INDEX 18900
City auditors to use global standards
Tourists spend more, stay longer
18840
18780
18720
18660
Last month was the best April ever for Macau tourism, with 2.4 million visitors. Tourists are staying for longer, with overnight visitors for the first time staying for more than two days. China is more than ever the main source market but dependence on Guangdong is easing. Tourists are also forking out more, with spending soaring in the first quarter.
18600
May 23
HSI - Movers Name
Page 4
Profit boon for BOC, BNU Bank of China Macau (BOC) Branch and Banco Nacional Ultramarino (BNU) SA have posted big profits from last year’s operations and turned more than 30 percent of their revenue into profit. But BNU’s profit dropped and it will boost on services for small and medium enterprises. Meanwhile BOC says it will focus on yuan operations. Page 5
The city’s auditors will increasingly adopt international standards in their work to improve exchanges and communication with other jurisdictions, Macau Society of Registered Auditors chairman Denis Vong said yesterday. He said standards that auditors used were introduced a few years ago but standards in the other jurisdictions had been further updated. Mr Vong sees a need for the city’s auditors to use “the same language” – international standards – in financial and account statements. He also said the government was
revising the regulation on registered accountants and auditors, based on a draft the committee for the registry of auditors and accountants completed last year. The auditors’ society has signed a memorandum of cooperation with Certified Practicing Accountants Australia – a professional accounting body. Both parties will organise training courses and seminars for their members this year. The Australian body is helping with a survey of the accounting profession in Macau, which began earlier this month. T.L.
%Day
WANT WANT CHINA
0.41
CHINA OVERSEAS
0.38
CHINA UNICOM HON
0.17
POWER ASSETS HOL
0.09
PING AN INSURA-H
-0.09
CHINA RES POWER
-2.94
HANG LUNG PROPER
-3.41
NEW WORLD DEV
-3.55
COSCO PAC LTD
-4.01
SINO LAND CO
-4.79
Source: Bloomberg
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2012-5-24
2012-5-25
2012-5-26
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business daily May 24, 2012
macau
Trade war threat to G2E Asia in Macau Customs again intervene in on going LT Game and Shuffle Master patent battle Associate Editor
W
hat started as a trade dispute confined to the pages of the specialist press was threatening to boil over into a diplomatic incident in Macau last night. Two casino equipment supply companies – one from Macau and one based in the United States but with a strong presence in Asia employing scores of Macau locals - brought a previously lowkey copyright dispute to a very public head on the floor of Global Gaming Expo Asia 2012. In a day of near-comic drama, the American company Shuffle Master first covered its Rapid multigame electronic gaming machine display on request from Macau customs officials, then on internal legal advice uncovered, then after another visit from customs covered again and then – at 5pm just before the show closed officially for the day – finally uncovered the product. That’s an expensive day at a show where the larger stands cost thousands of U.S. dollars per day. The specifics of the dispute concern Shuffle Master’s Rapid electronic multi-game product. LT Game claims it has a Macau patent for multi-game products. It says this means other companies cannot show multi-game products at the show even with a ‘Not for sale in Macau’ sign on them. Shuffle Master disputes LT Game’s patent and says it has already won several court cases in Macau to that effect. But LT Game has appealed the latest decision and used that as a basis to apply for an injunction last month to stop Shuffle Master showing the Rapid product at G2E Asia. The stakes are high in Macau because copyright infringement is considered a criminal matter and people can go to jail. But the dispute is about more than intellectual property law and dry legal argument, industry sources have told Business Daily. What is at stake is the future direction of the electronic gaming portion of the Macau market. Last year electronic games brought in only 4.3 percent of gross gaming revenue. But in a market worth 267.87 billion patacas (US$33.5 billion) per year, that’s still US$1.44 billion.
would be a disaster – no matter who was running the trade show.” Another major G2E Asia exhibitor – Alfastreet – told Business Daily it would not attend G2E Asia next year after it too was threatened this year with legal action by LT Game if it showed its own multi-game product at the event. “We think that being threatened with criminal prosecution simply for wanting to exhibit our products at an international trade show is not the kind of business atmosphere we want to work in,” said a spokesman. “We won’t be coming back next year. It costs us around 100,000 euros (one million patacas) to attend G2E Asia when travel, show fees and labour are all added up. We will use that budget to visit all our customers and display products individually to them. It will take longer than if they came to us at a show, but we think we can do it and still save some money.” Further complicating the LT GameShuffle Master narrative is that each side feels it is David facing the Goliath of vested interests. Sources close to Shuffle Master indicated concern that there is one rule for locals and another for foreigners when it comes deciding what’s legal and what’s illegal in Macau. Sources close to LT Game voiced frustration that some foreign firms don’t treat Macau and Macau companies with the respect they deserve. They feel the ‘rule of law’ in relation to copyright only applies when it’s working in Western business’ favour. Jay Chun, chairman of LT Game told Business Daily: “We learned about copyright law from Western companies and we respect that. But we feel that they in turn should respect the patent we have for multi-games in Macau.” But Gavin Isaacs, chief executive of Shuffle Master told us just after 5pm: “Customs now have a [Macau] court order showing we are permitted to show our product, and that is what we will do. We are
“So upset” - Shuffle Master CEO Gavin Isaacs
permitted to sell our product, which we will do. We absolutely respect people’s intellectual property, and we would never knowingly breach that. We will now deal with this in the appropriate forum, which is a court. We pride ourselves on the way we conduct our business. That’s why we’re so upset about this.” Mr Isaacs added: “The U.S. government will get involved in this. The show will make a formal complaint to Macau. I love coming here. It’s a great show. I just think there are appropriate ways of dealing with matters and this is not the appropriate way. I have been in many many trade shows and this is
the only experience of this type I’ve ever had.”
Product seized Before Mr Isaacs joined the company several Shuffle Master executives were detained and equipment seized during G2E Asia 2009. That was a patent dispute with an LT Game sister company Paradise Entertainment Ltd over Rapid Baccarat. Frank Fahrenkopf, president and CEO of the AGA, confirmed to Business Daily last night that the show would make a formal complaint to the Macau authorities. “We will be writing to the Macau
Breakaway show The American Gaming Association and Reed Exhibitions – two bodies with a proven track record in organising world-class trade events, run G2E Asia. Some in Macau however are unhappy about a U.S.-based trade association running Asia’s main casino gaming exhibition. LT Game has been making efforts to set up a Macaubased gaming manufacturers’ association. Some think that in the medium- to long-term this body might try and vie with the AGA and Reed to create a localised trade show. But one industry source told Business Daily last night: “Smaller suppliers live on the crumbs left by the big companies like Shuffle Master. If they and a few of the other big companies decided not to show their products in Macau it
No exposure at the expo - Shuffle Master’s Rapid games under cover after a visit from Macau customs
May 24, 2012 business daily | 3
MACAU City holds down 13 in China competition list The city’s competitiveness ranking remained unchanged from last year but it scored first in ‘living environment’ satisfaction Kristy Chan
There’s no question that if every year we come here and there’s going to be this kind of confusion, then we could move the show Frank Fahrenkopf, president and CEO of the American Gaming Association
Long arm of law - Macau customs at the show stand
government as a result of what happened on the floor today.” But Betty Zhao, sales and marketing manager for LT Game told Business Daily: “We consider the uncovering of the Shuffle Master product at the show as a criminal act and a breach of our copyright.” She said the drama began on Tuesday. “The Macau customs came and sealed any games that might infringe our patent. This was Shuffle Master’s multi game with live dealer. We won an order last month in court here to stop Shuffle Master showing that product at the show. The next stage will be the court again. “But the American Gaming Association and Reed Exhibitions came to our booth and said ‘If you shut down other companies’ product, we will not let you exhibit here. We will cut the electricity to your stand’. We cannot believe that. How could the organisers threaten us like that?” Ms Zhao said.
I’m very comfortable with what we’re doing. Our legal advice is that we’ll deal with it in court. We are showing our product’ Gavin Isaacs,
chief executive of Shuffle Master
Mr Fahrenkopf told us: “Our position is you shouldn’t use the show to try to leverage in litigation. Let the courts decide that. So our position was very clear. If LT was going to try and throw Shuffle Master out of the show, we would throw them [LT Game] out of the show. So no one gets advantage. We don’t take positions,” he stated, adding “I told the folks over at LT Game ‘If you want Shuffle Master shut down then you can leave. And you leave not only this year but forever. Make up your minds, it’s a business decision.’ So they made a business decision I guess [to climb down]. “There’s no question that if every year we come here and there’s going to be this kind of confusion, then we could move the show. Singapore constantly comes to us and says ‘Move the show to Singapore’, but we love it here in Macau. “We think this is the centre of the Asian universe just as Las Vegas is the centre of the gaming universe in the West. So we wouldn’t want to move. But if the [Macau] government’s going to get involved and interfere over litigation, that’s not a good environment. But I don’t think that’s something that will happen,” he said. “The whole point of spending so much money on a trade show is that you can come and show the best and latest products to the market,” said Mr Isaacs. “We have a big operation here in Asia. But if you’re going to come and have to deal with this, you’re going to have to think about whether it’s worth it. The organisers have to deal with that. But the organisers have worked with us throughout this. And I feel very comfortable that this won’t happen again,” he added.
kristyc@macaubusinessdaily.com
M
acau is the 13th most competitive city in Greater China, according to a ranking released earlier this week by the China Academy of Social Sciences, in which Hong Kong is ranked first. The 2012 Blue Book rates the competitiveness of 294 cities in Greater China and places Macau above Sichuan’s capital Chengdu and Taiwan’s second biggest city, Kaohsiung. Hong Kong holds top spot, followed by Taipei, Beijing and Shanghai. Macau’s ranking was unchanged from last year. Competitiveness was calculated by using factors such as comprehensive urban growth, scale economy, and economic efficiency. Macau did top the index for “living environment” satisfaction, part of the urban competitiveness subcategory, followed by Beijing and Shanghai. The indices include overall growth, size and effectiveness of the economy, development costs, industry levels and quality of life. The Pearl River Delta is identified as one of the most competitive regions, along with the Bohai Bay Economic Rim, which includes Beijing and Tianjing, and the Yangtze River Delta, which covers Shanghai and Hangzhou. The Pearl River Delta has three cities in the top 10, including Shenzhen in 5th and Guangzhou ranked 6th. According to the academy, nearly 100 experts from universities in four cities, government statistical departments and research institutes spent six months researching and writing the report. The academy believes rapid urbanisation in the mainland
over the past 10 years “will not continue” because it is creating major problems, one of them being that many urban residents are still registered in the countryside. Even though half the population already lives in cities, only a third of all mainlanders hold an urban household registration. Urban areas have been growing twice as fast as the country’s urban population keeps increasing, occupying more and more land, the report said. The academy also said many people had moved to bigger cities, which were booming compared with small and medium cities. Smaller towns had stagnated, it added. It also suggested the mainland should take a “new path of urbanisation” and ensure that cities gain “sustainable competitiveness”, focusing on advance industries, eco-friendly neighbourhoods and culture. with Xinhua
294
cities
were rated in Greater China
The city topped the index for “living environment” satisfaction
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business daily May 24, 2012
macau
Tourism record built on might InBrief of mainland arrivals Tunnel to varsity likely by August The main construction work for the seabed tunnel connecting Macau to the new University of Macau campus on Hengqin Island should be complete by August, Infrastructure Development Office deputy coordinator Chau Vai Man said yesterday. The next step will be to install electricity, water, telecommunications and television services from Macau. The structure includes three tunnels, two for vehicles and one for pedestrians. Authorities believe it will be possible to cross the 1,570-metre-long tunnel by foot in about seven minutes.
More tourists, from a wider spread of mainland cities, are staying longer and spending more Vítor Quintã
vitorquinta@macaubusinessdaily.com
Plans lodged for 14 old Coloane deeds The government has received 14 land concession applications from Coloane village residents holding old land deeds – or “sa chi kai” in Cantonese – the Land, Public Works and Transport Bureau said yesterday. Authorities accepted the first requests from two residents last November and the bureau has approved both construction projects. Two other requests also “fulfil the requirements” and one of them is close to being approved. The bureau said the design plan honours the rules governing the village. The Basic Law states that sa chi kai are not valid proof of land ownership.
Voucher refunds for Mandala fliers Recently revived Indonesian low-cost carrier Mandala Airlines says it has given travel vouchers to passengers affected by its grounding. The Macau Post Daily reported that Macau passengers were offered vouchers to fly between Jakarta and the airline’s three current destinations: Medan in Sumatra, Kuala Lumpur and Singapore. The fate of money paid by the airline’s former agents remains uncertain. Mandala suspended Macau-Jakarta flights in January 2011 and the relaunched airline has not indicated if it will resume the service.
Tam stays with municipal affairs Raymond Tam Vai Man will remain head of the Civic and Municipal Affairs Bureau for two more years, according to yesterday’s edition of the Official Gazette. The dispatch signed by Chief Executive Fernando Chui Sai On says Mr Tam “has the necessary experience and professional ability” for the position. Mr Tam has headed the bureau since 2007 when he replaced Secretary for Transport and Public Works Lau Sio Io. Mr Lau, who had led the bureau since its creation in January 2002, took over the transport portfolio after the dismissal of Ao Man Long for corruption.
Mainland visitors are an increasingly important source of tourist arrivals and hard cash
A
lmost 2.4 million people visited Macau last month in what was a record for April arrivals. And the good news does not stop there. Visitors are also spending more time in the city. Arrivals increased by 1.9 percent year-on-year and, although the percentage of same-day visitors remains high at 52.8 percent, it fell by 1.4 percentage points last month to its lowest level since last August. The average length of stay increased slightly, to 1.1 days. Overnight tourists, whose average stay was 1.5 days last year, stayed 2.1 days this year, according to the Statistics and Census Service. But Macau has not proved as arresting as other tourism destinations. Visitors spent an average of 3.9 nights in Asia’s second biggest gaming hub, Singapore, and 3.6 nights both in the United States casino capital, Las Vegas, and in Hong Kong. The mainland strengthened its role as the most important source market for arrivals. Almost 1.4 million visitors came from across the border, up by 9.5 percent, accounting for 58.4 percent of all arrivals.
Hunan, up by 19.9 percent, as well as Tier 1 cities, including Beijing, up by 22.4 percent, and Chongqing, which increased by more than half. Last year, Macau received a record 28 million tourists but that record will be short-lived if the city’s tourism sector keeps this year’s pace up. In the first four months of this year, arrivals increased by 6.3 percent year-on-year to 9.3 million, a four-year high.
Cash flow Visitors are also spending more, with the total estimated at 13.1 billion patacas (US$1.6 billion) in the first quarter of 2012, a 35 percent year-on-year increase. During the first three months of this year, each visitor spent an average of 1,891 patacas, 25 percent more than in the same quarter last year, according to the Statistics and Census Service. Same-day visitors spent just 2.5 billion patacas, up by 19 percent, at
a per person average of 665 patacas. Overnight visitors spend much more. Their spending increased by more than one-third to 10.6 billion patacas. Each of these visitors spends an average of 3,358 patacas. Mainland visitors spend 4,400 patacas. Mainland tourists are biggest spenders, with an overall average of 2,435 patacas, followed by Singapore tourists, who spent about 1,500 patacas each. Shopping has become a more dominant part of tourist spending, rising by 42 percent to 6.7 billion patacas – more than half of the total. Some 22 percent is spent on food products, 19 percent on jewellery and watches, and about 17 percent on clothing. This money flow has pushed retail sales to a new high in the first quarter this year, especially of watches, jewellery and adults clothing. Chinese bakery products were the only manufacturing segment to grow so far this year.
Regional markets Tourists from Hong Kong and Taiwan fell 7.2 percent year-onyear to less than 1 million in total. The main reason was fewer visitors from both Hong Kong, a 7.7-percent decrease, and Taiwan, a drop of 22.4 percent. Emerging tourism markets saw strong increases, however. Tourists from the Philippines soared by onefifth to almost 29,000, the highest figure in three years. Visitors from South Korea increased by 8.7 percent and Japanese arrivals grew 24 percent. Long-haul visitors from the Americas and Europe also rose last month but both regions accounted for less than 30,000 visitors each. However, the city’s dependence on Guangdong seems to be easing, according to data from the Public Security police. Visitors from the neighbouring province dropped to 46.1 percent last month, the lowest ever. There were more visitors from other mainland provinces such as Zhejiang, up 7.6 percent, and
MOP1,891 per capita spending by visitors in the first quarter
May 24, 2012 business daily | 5
MACAU
Boom propels banks’ profits Banco Nacional Ultramarino and Bank of China record operating profits José I. Duarte
BNU posted a profit of 325.3 million patacas last year
jid@macaubusinessdaily.com
T
Photo by Manuel Cardoso
he Bank of China Macau Branch and Banco Nacional Ultramarino SA have published last year’s financial reports in the Official Gazette. It seems neither of the city’s money-issuing banks has cause for complaint. Bank of China recorded a net operating profit of about 1.85 billion patacas (US$231.3 million). Banco Nacional Ultramarino or BNU had an operating profit of 325 million patacas. The BNU result translates into profitability of 16.8 percent, as measured by the ratio between the operating profit and the company’s equity. The Bank of China is a branch set up without specific equity, making this profitability ratio inappropriate. Both banks posted a profit in excess of 30 percent of total revenue – 33 percent and 34 percent, respectively. However, BNU points out its annual profit fell by 12.8 percent compared to last year. The fall resulted from “increased provisions and lower financial margins”. The latter were attributed to “stronger competition” in the sector. Facing increased competition, BNU chief executive Pedro Cardoso expects to strengthen services for small- and medium-sized enterprises – where the bank is currently lacking – and services associated with the development of investment and trade flows between the mainland and Portuguese-speaking countries. The Bank of China says it will focus on the introduction of new credit mechanisms for SMEs and the growing volume of operations carried out in yuan. But the report focuses mostly on the bank’s contribution to prosperity and economic stability, by supporting government policies. The value of deposits held by the Bank of China reached 137 billion patacas by the end of last year, whereas total credit reached 130 billion patacas. At BNU those figures were 20 billion and 14 billion patacas, respectively. The main cost item for both was staff, with figures of 880 million and 160 million, respectively, representing about 50 percent of costs.
Court backs reopening of wastewater tender Vítor Quintã
vitorquinta@macaubusinessdaily.com
T
he Court of Final Appeal has upheld the reopening of the public tender for the Macau peninsula wastewater treatment plant, rejecting an appeal from Indian-Austrian company Va Tech Wabag Ltd. Last month, Chief Executive Fernando Chui Sai On readmitted bids filed by Wabag and a consortium led by Belgian company Waterleau Group NV, which will be assessed together with the two proposals that were originally accepted. However, the five-year contract, worth 604.9 million patacas (US$75.6 million), was awarded to a consortium headed by CESL Asia Investments & Services Ltd., which has been operating the plant since October. Wabag claimed it would be impossible to reopen the tender without suspending the
adjudication. To cancel or suspend the adjudication would cause “serious damage” to public interest, the government countered. The company accused the administration of carrying out “a simulated reopening of a tender that ceased to exist” to “deprive the applicant of the right to claim damage”. But the verdict released yesterday says the decision to reopen the tender is “obviously not final” and will not damage the interests of Wabag or the other bidders. Only the final outcome of the adjudication might be a valid reason for a judicial appeal, the judges wrote. Both Wabag and Waterleau were initially excluded from the tender but the Court of Final Appeal annulled the decision, claiming it was based on “merely formal and absolutely harmless” issues.
The five-year contract for the operation of the wastewater treatment plant is yet to be signed
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business daily May 24, 2012
macau
São Domingos makeover may gloss over the basics Many vendors at the almost-empty São Domingos market believe the proposed changes will not improve their businesses Photo by Manuel Cardoso
where stalls for meat and vegetables are located. Vendors say that over the years, many vendors have left because business is so bad. The few stalls that remain, all are close to elevators, are just surviving.
Lack of accessibility Labelled one of Asia’s most modern markets when it opened, it has not been accepted by vendors, who have either gone out of business or moved away. Vendors are worried that removing walls will not change the situation. “The building is like a maze. The design doesn’t suit a traditional market. There were 26 stalls in business on this floor when I started working and now there are just a few left,” a vegetable seller said. “We don’t have traffic. The most popular place in the building is the toilet,” he added, while declining to reveal his name. The internal design of the building might be part of the problem but the biggest issue is a general
lack of accessibility, some vendors said. “There are no car parks, very limited space to park motorbikes, not even enough for the people who work here, so how can people come here to buy groceries?” another vegetable seller said. She also said she no longer opens on Sundays after the government restricted traffic in San Ma Lou on weekends. “We are just surviving because there is no rent but I see little future prospects,” she said. “If I were younger, I would change jobs. I don’t want to work here any more. It is really hard work for very little money,” Ms Leung, who sells beef, said. Ms Leung was the only person working in the hallway around midday. The building was renovated in 1998. It seven levels including an underground floor and covers an area of 12,196 square feet at the heart of Senado Square. Elevators are in the middle of the building, which makes the market feel more like a shopping mall. X.C.
Though it was renovated in 1998, many vendors have left São Domingos market due to a lack of business
T
he interiors of São Domingos market will start changing by the end of the year: the idea is to increase footfall and meet the authorities’ demand for new vendors. The head of Civic and Municipal Affairs Bureau’s market division, Albino de Campos Pereira, told the Chinese-language Macau Daily News there will be changes at the market. Ahead of the restructuring,
the bureau is tendering for new vendors to move into the market, an employee at the market division told Business Daily yesterday. Mr Pereira said the government had consulted the vendors and the first phase would involve removing the walls between stalls on the second and third floors. After that the bureau will consult with vendors on the lower floors for further changes.
The changes are intended to give shoppers a better view of the retail outlets. Walls that separate the stalls block views through to the inside stalls. Each booth will also have a slightly bigger space to display their goods after the walls go. However, even if there were no walls, there would not be much to see, as most stalls are currently empty, particularly from the first to the third floor,
Weather Beijing 29/17o C Changchun 23/10o C
Harbin 21/9o C
Xian 23/12o C Shanghai 22/18o C Chengdu 25/17o C Kunming 27/17o C Haikou 31/24o C Sanya 32/26o C
Guangzhou 32/22o C
MACAU (21 May-26 May) Day
Temperature
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05/23
24/29o C
60/90 %
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65/95 %
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25/29o C
75/95 %
Shenzhen 31/24o C
ASIA (today)
Hong Kong 33/26o C
Manila
TOKYO
Jakarta
32/25o C
32/26o C
25/18o C
32/25o C
Macau 30/26o C
Bangkok
SEOUL
K. lumpur
35/28 C o
SINGAPORE
27/17 C o
34/26 C o
taipei
31/25o C
May 24, 2012 business daily | 7
MACAU
CEM profits shrink 7 pct Profits at city’s sole electricity provider wane for second year, down to 479 million patacas
A
nnual profit at Companhia de Electricidade de Macau S.A. dropped for a second consecutive year in 2011 because a new contract with the government has cut its guaranteed return to single digits, the company said. The electricity provider’s annual report says it posted a profit of 479 million patacas (US$59.9 million), down by 7 percent from 2010 and 15 percent lower than in 2009. However, the company said its operational results were “very good”,
signalling a “smooth transition” to the most recent 15-year concession contract that has seen the company’s guaranteed return fall from 12 percent to 9.5 percent. The company said it invested more than 690 million patacas on infrastructure last year, more than its profit. Much of the capital investment was on a second, 220-kilovolt high-tension connection that will feed electricity into the city from Hengqin Island “in mid-2012”. Sales were up by 8.1 percent to
CEM says it ploughed more than 690 million patacas into infrastructure last year
4.7 billion patacas and the company’s client base increased by 2 percent to almost 225,000 customers. Consumption hit a new peak of 4,003 gigawatt hours last year, up by 5.1 percent from the previous year. But electricity costs “maintained an upward trend and again hit new records”, the company said. Fuel oil prices rose 36 percent and energy imported from the mainland was 5 percent costlier. The company said last month it
was raising the tariff from 1.28 patacas to 1.32 patacas per kilowatt hour because primary energy prices have continued to rise strongly last year and this year, Cecilia Nip, the company’s communications and public affairs manager, told Business Daily. The rising cost of electricity imported from the mainland, irregular natural gas supplies and the upsurge in the price of fuel oil had put pressure on the company’s costs, she said. In the first quarter of this year, the average cost of electricity was 0.85 patacas (US$0.11) per kilowatt hour, 6.3 percent more than a year earlier. A report released by the Energy Sector Development Office on Monday said first-quarter power consumption was 844.7 gigawatts, 10.7 percent less than a year earlier. V.Q.
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business daily May 24, 2012
GREATER CHINA
InBrief Beijing to stick to fiscal policies China will stick to active fiscal and prudent monetary policies in a bid to sustain relatively fast economic growth, Vice Premier Li Keqiang was quoted as saying by the official China Securities Journal yesterday. China will create jobs, build affordable housing, conduct medical reforms and improve the social safety net in order to boost consumption, which has much room to grow, the newspaper said. The government will also support growth of micro- and small-sized private enterprises and create a level playing field for them, it added.
Beijing must act to prevent hard landing: World Bank
Grandstar Cargo to be grounded Korean Air Lines Co., the world’s second-biggest international cargo carrier, and Sinotrans Ltd plan to shutter a China air-freight venture after three straight annual losses. Grandstar Cargo International Airlines Co.’s board has authorised the closure, which now needs shareholder approval, Sinotrans said in a Hong Kong stock exchange statement yesterday. The Tianjin-based cargo carrier lost 340 million yuan (US$54 million) last year as the economic slowdown damped demand for shipments and fuel prices climbed.
Energy investment to get a boost China signalled yesterday it wants to ramp up private investment in its energy sector, in line with recently unveiled government plans to fasttrack infrastructure investment to help combat a protracted economic slowdown. The government is drafting guidelines to encourage private investment across industries, with special focus on the heavily statecontrolled electricity, oil and natural gas sectors, according to an article by the official Xinhua news agency. Government agencies are expediting the drafting of new rules for private investment and are expected to unveil them by June, the article added.
Venezuela to borrow more from China Venezuela’s Congress voted to double the amount the government can borrow from China under a deal that lets the OPEC nation repay loans with oil, potentially adding to the debt burden taken on under President Hugo Chavez. China has become the single biggest foreign source of financing for Venezuela’s socialist government, which is borrowing heavily to fund state spending on welfare and infrastructure projects ahead of an October 7 election. Tuesday’s vote amended a 2008 agreement to let Venezuela borrow as much as US$8 billion from the China Development Bank at any given time, twice the original US$4 billion.
Cuts China growth forecast to 8.2 pct; urges measured policy The World Bank says ‘there are concerns that [China’s] growth could slow too quickly’
T
he World Bank cut its economic growth forecast for China this year to 8.2 percent yesterday and urged the country to rely on easier fiscal policy that boosts consumption rather than state investment to lift activity. In a biannual East Asia and Pacific economic update, the World Bank said a slowing China will drag growth in emerging East Asia to two-year lows this year, but warned Europe’s seething debt crisis could inflict even bigger damage if it worsens. Sluggish U.S. and European demand and a softening Chinese property market would combine to weigh on the Chinese economy in the near term, it said. But if governments and central banks act in time to stabilise activity, economies should recover next year. It said countries could further loosen monetary and fiscal policies to foster activity, but noted their room for manoeuvre is constrained by inflation risks that
could spike when growth rebounds amid rising public debt now. “The region’s authorities should remain flexible to shift monetary policy gears should growth gain traction and inflationary pressures build up,” the World Bank said. As key overseas markets weaken, China will need to sustain its export-oriented economy with more fiscal spending, the bank said. “China’s near-term policy challenge is to sustain growth through a soft landing. The ongoing slowdown is partly welcome to the extent that it reflects a deceleration in growth from above-potential levels,” it said. “While the prospects for a gradual slowdown remain high, there are concerns that growth could slow too quickly. However, sufficient policy space exists to respond to downside risks.” In China, where 2012 economic growth was lowered to 8.2 percent from 8.4 percent previously, it said Beijing should only marginally tweak
Lenovo boosts net income PC maker posts 59 percent increase in the three months ended March
L
enovo Group Ltd, the world’s No.2 PC maker by sales, reported a 59 percent rise in fourth-quarter net profit, meeting analyst expectations as strong demand in emerging markets such as China offset weakness in Europe. Lenovo, which ranks just behind Hewlett Packard Co in PC sales, posted a net profit of US$472.99 million for the fiscal year ended March, it said yesterday, versus a consensus forecast of US$472.2 million from a poll of 29 analysts by Thomson Reuters I/B/E/S. The PC maker recorded a net profit of US$273.236 million a year earlier, it said in a statement posted on the Hong Kong stock exchange. That meant Lenovo, which has diversified into smartphones, tablet PCs and smart TVs, earned US$66.8 million for the fourth quarter, versus a consensus forecast of US$66 million, based on Reuters’ calculation using
Lenovo posted a net profit of US$472.99 million
unaudited nine-month financial data. The Beijing-headquartered PC maker has been grabbing market share over the past year through acquisitions
monetary policy for now by lowering banks’ reserve requirements as real interest rates are negative. That leaves the world’s No. 2 economy to lean on fiscal policy instead to fuel growth. “Fiscal stimulus would ideally be less credit-fuelled, less local government-funded, and less infrastructure-oriented,” the World Bank said. “Fiscal measures to support consumption, such as targeted tax cuts, social welfare spending and other social expenditures, should be viewed as the first priority.” The World Bank’s recommendations come just a day after a top Chinese financial paper cited unnamed sources as saying China will fast track approvals for infrastructure to combat an economic downturn. The World Bank’s lowered growth forecast for this year also comes after the International Monetary Fund kept its forecast for China unchanged at 8.2 percent in its April report. Reuters
in Europe and Japan, but Europe’s economic doldrums and a shortage of hard disks has dampened its outlook. It acquired control of Medion AG, an Essen, Germany-based computer maker, and the PC unit of Tokyobased NEC Corp. last year. “Solid revenue growth was lifted by above-industry volume growth and maiden contributions from NEC and Medion,” Jonathan Ng, a Singaporebased analyst at CIMB, said in an e-mail. “Profit is growing in line with top-line growth, reflecting that Lenovo is able maintain its margin despite increased investment in mobile devices.” The company, however, expects a slowdown in corporate spending in the United States and Europe amid deepening global economic uncertainty, Lenovo’s chairman and chief executive Yang Yuanqing said yesterday. Shares in Lenovo ended down 1.5 percent in late Hong Kong trade, compared with a 1.3 percent decline in the benchmark Hang Seng Index. Since the beginning of this year, Lenovo shares have climbed about 30 percent compared with the Hang Seng Index’s 1.6 percent gain. Reuters/Bloomberg
May 24, 2012 business daily | 9
GREATER CHINA
HK stocks drop to lowest in 2012 Shanghai also fell as Greece exit concern damps China outlook
H
ong Kong stocks fell yesterday, with the Hang Seng Index dropping to the lowest level since January, as concern mounted that Greece may exit the euro zone, damping global demand for products from China. The Hang Seng Index retreated 1.3 percent to 18,786.19 at the close of trading, as all but four stocks in the index dropped. The Hang Seng China Enterprises Index of mainland stocks dropped 1.3 percent to 9,573.94. “Conditions remain very fragile,” said Daphne Roth, the head of Asianequity research at ABN Amro Private Banking in Singapore. “There is a strong likelihood that Greece might exit the euro zone. Even if it stays, going forward there will be a lot of volatility. We are overweight in cash because of this situation that is playing out,” she said in a Bloomberg TV interview. A 12 percent slump on the Hang Seng index from this year’s highest level on February 29 limited its gain for the year to 3.3 percent through yesterday amid political gridlock in Greece and concern that China’s economic growth is slowing. The Shanghai Composite Index also retreated 9.87 points, or 0.4 percent, to 2,363.44 at the close. Thirty-day volatility was at 15 yesterday, the lowest in a week. About 7.7 billion
shares changed hands in the gauge yesterday, 14 percent lower than the daily average this year. The CSI 300 Index dropped 0.4 percent to 2,616.87. The Shanghai index has fallen 4 percent from this year’s high set on March 2 on concern a slowdown in growth at the world’s second-largest economy is deepening.
China stocks Shares on the Hang Seng traded at 9.6 times estimated earnings on average as of yesterday, compared with a multiple of 12.5 on the Standard & Poor’s 500 Index, while the average on the Stoxx Europe 600 Index was 10.2 times. Chinese-related stocks accounted for 45 percent of the market capitalisation on the Hong Kong market at the end of April, according to data compiled by the Hong Kong stock exchange. A benchmark interest-rate cut from the People’s Bank of China can’t be ruled out if economic data for May indicates that economic growth is slowing, the China Securities Journal reported, citing unidentified people. PetroChina Co. dropped 0.8 percent to HK$10.14. Cnooc Ltd lost 1 percent to HK$14.28. China Shenhua retreated 1.6 percent to
Hang Seng Index retreated 1.3 percent at the close of trading
HK$28.10. Esprit lost 2.8 percent to HK$12.36. Cosco Pacific Ltd, China’s biggest shipping company and the owner of Greece’s largest port, sank 4 percent to HK$9.09. Hutchison Whampoa Ltd, a port operator controlled by billionaire Li Ka-Shing that gets about half its sales in the debtstricken region, dropped 2.2 percent to HK$65.90.
Shanghai Pharmaceuticals, a manufacturer and retailer of pharmaceutical products, tumbled 24 percent to HK$9.11 after the 21st Century Business Herald newspaper reported the China Securities Regulatory Commission and the Hong Kong Stock Exchange are investigating the company for suspected financial fraud. Bloomberg
official rate by 0.26 percent. But at the same time, the central bank has kept the midpoint above the spot rate, which some traders interpret as a signal that it intends to keep the exchange rate relatively stable and not permit any sharp decline.
Measured depreciation
Yuan depreciation a real possibility Chinese currency may close the year slightly down – traders Lu Jianxin and Pete Sweeney
Y
uan traders are reconsidering a widely-held assumption that the currency would appreciate 2-3 percent this year as an unexpected worsening of global economic conditions and a slowdown in China drives investors toward safer havens. A debt crisis in the euro zone has of late developed into a political problem as well, with risk aversion yesterday driving the dollar index to its highest since September 2010, casting doubt on whether Beijing can afford to let the yuan to continue to
strengthen against the dollar. More significantly, China posted a stream of weak economic data for April, which caused the People’s Bank of China (PBOC) to hastily reduce banks’ reserve requirement ratios, injecting liquidity into the economy. The news and the ensuing cut exacerbated concerns over the health of the world’s second-largest economy. As a result, traders say banks and their clients started to erect yuan short positions during the dollar rally this month. “While the PBOC may not let
the yuan to depreciate sharply, moderate depreciation could increasingly be a choice for the government to deter the deterioration of China’s exports,” said a senior trader at a European bank trading at the China Foreign Exchange Trade System (CFETS) in Shanghai. The PBOC has already signalled that it will tolerate a measured relaxation of the yuan through the officially set midpoint exchange rate. Over the last eight days, the PBOC has consecutively relaxed the midpoint fixing, weakening the
In the medium run, the central bank will decide on the yuan’s direction based on economic events and thus could potentially allow the yuan to depreciate by the end of this year, according to a private survey of eight China-based traders. The yuan could fall or rise up to about 2 percent in 2012, to trade between 6.46 and 6.2 against the dollar by the end of the year, said the traders, a stark contrast to an overwhelming view for yuan appreciation seen at the beginning of this year. The traders are not authorised to have their names and organisations to be put on record according to company rules. Spot yuan was trading around 6.33 per dollar yesterday, having dropped 0.6 percent so far this year. And the currency’s real effective exchange rate (REER), which indicates its value against a tradeweighted basket after adjustments based on inflation, fell 0.53 percent for the year through April, according to the latest data issued by the Bank for International Settlements (BIS) issued last week. A sharply depreciating yuan could divert funds from China and may ended up adding pressure to growth, traders said. “There are so many surprises on the macroeconomic front recently that it will no longer be a surprise if the yuan closes the year with a slight depreciation,” said a dealer at a North American bank in Shanghai. Reuters
10 |
business daily May 24, 2012
asia
BOJ on hold, keeps powder dry as April trade gap widens Japan reported lower-than-estimated exports; analysts see more easing by July
T
he Bank of Japan kept monetary policy steady yesterday, saving ammunition for later in case Europe’s deepening debt crisis warrants further supportive action to shield the fragile economy. But it warned of risks to Japan’s recovery prospects, such as strong uncertainty over the global economy and market strains over Europe’s sovereign debt crisis, in a sign it stands ready to act again soon should markets destabilise and trigger a renewed spike in the yen. “Global financial markets have been jittery recently due to Europe’s debt problems, so we must monitor developments carefully for now,” the BOJ said in a statement issued after the meeting. Fears of a Greek exit from the euro zone and funding strains in Spain have kept Japanese central bankers on edge as they fret about the damage the relentless yen gains and slumping Tokyo share prices could inflict on the exportreliant economy. The central bank left the asset fund at 40 trillion yen (US$501 billion) and a credit-lending program at 30 trillion yen. The policy board kept the key overnight lending rate between zero and 0.1 percent. “Calls for more monetary stimulus won’t stop as politicians want to end deflation before raising the sales tax,” Daiju Aoki , a Tokyo-based economist at UBS AG, said before the monetary policy decision. “The BOJ won’t really be able to take a breather this year.”
Trade gap widens In a sign that support from global growth remains wobbly, the country reported lower-thanestimated exports and a wider trade deficit for April, underscoring risks to the economy’s recovery a day after Fitch Ratings cut the nation’s debt rating. Outbound shipments rose 7.9 percent from a year earlier, slower than a median forecast of 12.7 percent and less than the 11.8 percent median forecast in a Bloomberg News survey of 27 analysts. The deficit of 520.3
billion yen (US$6.5 billion) exceeded an 84.5 billion yen shortfall in March, the finance ministry said in Tokyo yesterday. Constraints on exports show the challenge for the government of sustaining growth without worsening the nation’s finances as a boost from earthquake rebuilding fades. Finance Minister Jun Azumi called yesterday for the Bank of Japan to “take appropriate steps in a timely manner” and Citigroup Global Markets Japan Inc. said the central bank may boost asset purchases in coming months after holding off yesterday. “If exports stay flat when the effect of the post-quake reconstruction is likely to peak out in the latter half of the year, there’s a possibility Japan’s economy will fall into a lull,” said Kiichi Murashima, an economist at the Citigroup unit in Tokyo. While the BOJ is ready to loosen policy again on any signs that Japan’s recovery is under threat, it had good reason to keep policy on hold now and save its limited options for later. Japan’s economy rebounded in the first quarter from last year’s stagnation and is seen headed for a recovery due to spending
KEY POINTS Policy rate unchanged at 0.1 pct, no easing steps April exports rise 7.9 pct, less than forecast Debt rating cut rings alarm for diet gridlocked on taxes BOJ warns of market jitters on Europe, global uncertainty
for rebuilding from last year’s earthquake, making it difficult to justify easing now. Even if the BOJ refrains from easing at its next review in June, many analysts expect it to ponder easing in July when it issues revised quarterly economic and price forecasts that may show Japan is still distant from achieving 1 percent inflation. “The BOJ stood pat as expected but is likely to ease next in July, based on recent patterns,” said Yasuhide Yajima, chief economist at NLI Research Institute.
InBrief S. Korean economy at slower pace South Korea’s economy will gather pace over the coming quarters and the country’s central bank will need to raise interest rates to keep inflation within its target, the OECD said in a report on Tuesday. Growth will slow to 3.3 percent in 2012 from 3.6 percent in 2011, but pick up to 4 percent in 2013, the Organisation for Economic Co-operation and Development said. “Following a slowdown in late 2011, output growth is projected to pick up gradually, led by a rebound in exports as world trade gains momentum,” it added. Annual average inflation is seen slowing to 3.0 percent this year from 4.0 percent last year.
Alarms ringing Japan’s sovereign-rating cut by Fitch Ratings escalated pressure on lawmakers to double the sales tax, with the Organisation for Economic Cooperation and Development warning the nation’s debt is heading into “uncharted territory”. The local-currency rating was reduced one step, and foreigncurrency grade two levels, to A-plus, the fifth-highest ranking, Fitch said in a statement on Tuesday. The Paris-based OECD said separately that boosting the 5 percent consumption levy is a “top priority”. Fitch said that Japan’s “fiscal consolidation plan looks leisurely relative even to other fiscallychallenged high-income countries, and implementation is subject to political risk”. A surge in demand for Japanese government bonds that sent 10year yields to the lowest level since 2003 this month is masking the risks from rising debt. Prime Minister Yoshihiko Noda has failed to persuade opposition lawmakers to support his legislation, leaving gross public debt poised to reach 223 percent of gross domestic product next year, the OECD said. “It’s an alarm bell for Japanese politics and the slow progress in Japan’s fiscal consolidation,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd and a former central bank official. “There’s no commitment to fiscal consolidation – in the long run, Japan’s creditworthiness and fiscal sustainability aren’t looking good.” Reuters/Bloomberg
Malaysia’s Q1 GDP growth slowing Malaysia’s economy grew at an annual pace of 4.7 percent in the first quarter of 2012, slowing from the previous three months as a struggling export sector weighed on the economy despite firm domestic demand, the central bank said yesterday. The first-quarter growth, which beat economists’ expectations of a 4.5 percent expansion, comes as Malaysia’s net exports slumped 20.8 percent from a year ago. “For the Malaysian economy, domestic demand is expected to remain resilient, supported by continued expansion in private sector economic activity and public sector expenditure,” the central bank governor Zeti Akhtar Aziz said. Inflation in April, released earlier yesterday, was 1.9 percent.
Malaysia Air mulls Islamic bond issue Malaysian Airline System Bhd., the nation’s largest long-haul carrier, plans to sell as much as 2.5 billion ringgit (US$799 million) of Islamic bonds to raise working capital after posting a fifth straight quarterly loss. The national carrier aims to draw on the first portion of 1 billion ringgit from the sukuk programme in June after obtaining regulatory approvals, it said in a statement yesterday. The company also won a bridge loan of a similar amount in March to ensure it has adequate working capital until the debt sale.
N. Korea denies nuclear test plan North Korea denied planning a nuclear weapons test while a report indicated it’s upgrading a rocket launch site, conflicting signs that underscore the challenge of gauging the intentions of new leader Kim Jong Un. The totalitarian regime is building a new launch pad for firing larger longrange rockets at its Musudan-ri site in the northeast, according to a U.S. university monitoring project on North Korea. Japan’s exports rose 7.9 percent in April from a year earlier
May 24, 2012 business daily | 11
asia
Singapore inflation quickens to 4-month high Consumer price index rose 5.4 percent from a year earlier Shamim Adam and Sarina Yoo
Singapore – inflation rate rose as housing and transport costs soared
S
ingapore said inflation will remain elevated in the next few months after accelerating to a fourth-month high in April, as a surge in carpermit costs and rising wages add to price pressures in the city state. The consumer price index rose 5.4 percent from a year earlier, after climbing 5.2 percent in March, the Department of Statistics said in a statement yesterday. The median estimate of 17 economists in a Bloomberg News survey was for a 5.2 percent increase. The core inflation rate was 2.7 percent in April. The Monetary Authority of Singapore raised its 2012 inflation
forecast last month as it diverged from most other Asian central banks that have left borrowing costs unchanged or eased monetary policy in recent weeks. Higher oil costs, rising housing rents, more expensive private transportation and unemployment near a three-year low have sustained price pressures in the Southeast Asian nation. “Inflation risk is still the biggest concern for Singapore,” Irvin Seah, an economist at DBS Group Holdings Ltd in Singapore, said before the report. “While the global outlook has turned from bad to worse in recent weeks, policy makers are still struggling
Stocks snap two-day rally As worries that Greece may leave the eurozone grow
Japan’s Nikkei 225 Stock Average fell 2 percent yesterday
A
sian stocks fell, with the regional benchmark index snapping a two-day rally, as concerns mounted that Greece may exit the euro zone and the Bank of Japan refrained from deploying further monetary stimulus, dimming the outlook for exporters. The MSCI Asia Pacific Index fell 1.7 percent to 111.87, the lowest since December 20, as of 6:31 pm in Tokyo. About six stocks declined for each that gained. All 10 industry
groups on the measure slid. “If Greece does get out of the euro, then that will be a significant event for the market,” said Andrew Pease, Sydney- based chief investment strategist for the Asia-Pacific region at Russell Investment Group, which manages about US$150 billion. The market wants to see “a political resolution out of Europe that will either prevent Greece from exiting or, if they do exit, will put in place a strong firewall to prevent
with high domestic inflation.” Singapore’s central bank, which uses the exchange rate to manage inflation, said last month it will increase “slightly” the slope of the currency trading band, and raised its forecast for consumerprice gains to 3.5 percent to 4.5 percent in 2012.
Policy stance The Monetary Authority of Singapore guides the local dollar against a basket of currencies within an undisclosed band. It adjusts the pace of appreciation or depreciation by changing the slope, width and centre of the band.
Inflation will “likely remain elevated over the next few months, before gradually easing” in the second half of the year, the central bank and trade ministry said in a monthly statement on price trends yesterday. Prices rose 0.5 percent last month from March, yesterday’s report showed. Minister for Trade and Industry Lim Hng Kiang said last week inflation is estimated to remain at about 5 percent in the next few months. Singapore controls pollution and congestion on its roads by selling a limited number of permits every year for each category of vehicles. The costs of licences have surged this year as the government seeks to reduce the vehicle growth rate, with permit prices for a category of larger cars breaching S$92,000 ($72,000) earlier this month. “Higher COE premiums will remain a key driver of inflation in Singapore in the coming quarters,” Seah said. “Even though Singaporeans who are not buying cars will not directly feel the pinch of higher COE premiums, companies will surely pass on the higher costs of commercial vehicles to consumers.” Bloomberg
Indian PM says govt must ‘do better’
I
contagion effects from going to other countries.” The Asia-Pacific gauge has dropped 13 percent from this year’s high on February 29 as the political gridlock in Greece following an inconclusive ballot this month revived concerns the nation will abandon bailout conditions and exit the euro zone. Greece is scheduled to have a second election on June 17. Japan’s Nikkei 225 Stock Average fell 2 percent, extending losses as the yen rose after the Bank of Japan refrained from further monetary easing yesterday. Trading volume was 13 percent above the 30-day average. The central bank last month increased its asset-purchase programme and extended the maximum maturity of government debt it buys in the program to three years from two. “No action was the consensus this time, yet still I heard some people expected something out of the BOJ,” said Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. in Tokyo and a former BOJ official. “If the European situation gets worse, buying longer-term debt won’t be enough. They may have to move in June depending on circumstances.” Australia’s S&P/ASX 200 fell 1.3 percent. South Korea’s Kospi Index lost 1.1 percent and Taiwan’s Taiex Index dropped 1.8 percent. Singapore’s Straits Times Index slid 1.4 percent.
ndian Prime Minister Manmohan Singh has acknowledged the “large unfinished agenda” facing his government after three years in power, and vowed to tackle corruption and fiscal mismanagement. “I will be the first to say we need to do better,” Mr Singh said late Tuesday as he presented his grafttainted coalition’s annual report card at a function in New Delhi. Mr Singh’s second term in office has been marked by slowing economic growth, accusations of policy paralysis and a series of corruption scandals that have combined to undermine optimism about India’s future development. “Some people have questioned the sustainability of our growth process. I am confident we will prove the sceptics wrong,” Mr Singh said, after listing achievements such as progress tackling poverty and improving primary education. India’s economy is predicted to have grown 6.9 percent in the last fiscal year to March 2012, the slowest pace since the 2008 global financial crisis, while widening trade and current account deficits have added to concerns. The Indian rupee has fallen to record lows against the dollar in recent days. Mr Singh said that his government must “remove implementation bottlenecks that are preventing large projects from getting off the ground... [and] quicken the pace of implementation of our policies of inclusive growth.” “I recognise that we face pressures on our balance of payments and that the fiscal situation requires careful management,” he added.
Bloomberg
Reuters
12 |
business daily May 24, 2012
MARKETS Hang SENG INDEX PRICE
Day %
VOLUME
PRICE
Day %
VOLUME
AIA GROUP LTD
25.4
-1.550388
38990440
CHINA UNICOM HON
11.66
0.1718213
36035655
ALUMINUM CORP-H
3.22
-2.719033
13732130
CITIC PACIFIC
11.22
-2.094241
3003138
BANK OF CHINA-H
2.83
-1.736111
262955446
BANK OF COMMUN-H
5.09
-0.7797271
22940748
BANK EAST ASIA
26.7
-1.657459
2558487
13.06
-1.951952
16851591
ESPRIT HLDGS
NAME
BELLE INTERNATIO BOC HONG KONG HO
NAME
CLP HLDGS LTD
63.85
-0.312256
2739168
CNOOC LTD
14.28
-0.9708738
47080902
COSCO PAC LTD
NAME
PRICE
Day %
57.7
0.08673027
3375046
10.74
-4.787234
17941277
POWER ASSETS HOL SINO LAND CO
VOLUME
SUN HUNG KAI PRO
88.4
-0.729927
3933813
SWIRE PACIFIC-A
82.9
-1.309524
1567470
210
-0.2849003
8124129
19.98
-1.576355
6998000
9.09
-4.012672
8511314
TENCENT HOLDINGS
12.36
-2.830189
8899733
TINGYI HLDG CO
21.9
-1.573034
13841409
HANG LUNG PROPER
24.1
-3.406814
6596557
WANT WANT CHINA
9.69
0.4145078
15280322
CATHAY PAC AIR
12.06
-1.95122
5493630
HANG SENG BK
100
-0.7936508
2012571
WHARF HLDG
40.2
-2.898551
3847382
CHEUNG KONG
91.25
-1.351351
3483422
HENDERSON LAND D
38.4
-2.538071
2885650
CHINA COAL ENE-H
7.24
-2.425876
26721230
HENGAN INTL
77.7
-2.017654
2174947
CHINA CONST BA-H
5.14
-2.095238
281328784
HONG KG CHINA GS
18.32
-2.136752
11354467
CHINA LIFE INS-H
18.1
-1.630435
38260533
HONG KONG EXCHNG
110.3
-2.216312
3408146
23
-1.498929
2521410
CHINA MOBILE
81.9
-0.7874016
14683412
HSBC HLDGS PLC
62.75
-1.181102
22617207
CHINA OVERSEAS
15.7
0.3836317
20596344
CHINA PETROLEU-H
7.1
-0.6993007
68384415
CHINA RES ENTERP
25.25
-2.321083
4534546
CHINA MERCHANT
CHINA RES LAND
13.36
-1.908957
10560120
CHINA RES POWER
13.88
-2.937063
4840886
CHINA SHENHUA-H
28.1
-1.576182
15586543
MOVERS
4
0 19200
INDEX 18786.19
HUTCHISON WHAMPO
65.9
-2.152932
8084672
IND & COMM BK-H
4.64
-1.4862
263246445
HIGH
19168.26
LI & FUNG LTD
14.6
-2.406417
25164968
25.25
-0.9803922
1444309
LOW
18670.67
NEW WORLD DEV
8.16
-3.546099
16632844
PETROCHINA CO-H
10.14
-0.7827789
63597668
PING AN INSURA-H
57.55 -0.08680556
12819583
MTR CORP
44
52W (H) 23707.94 (L) 16170.35
18600
21-May
23-May
Hang SENG CHINA ENTErPRISE INDEX NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.2
-0.621118
90490198
NAME CHINA PACIFIC-H
PRICE
DAY %
VOLUME
22.4
-1.103753
3890751
AIR CHINA LTD-H
4.83
-2.424242
14160784
CHINA PETROLEU-H
7.1
-0.6993007
68384415
ALUMINUM CORP-H
3.22
-2.719033
13732130
CHINA RAIL CN-H
6.22
-0.955414
ANHUI CONCH-H
21.9
-1.793722
15638935
CHINA RAIL GR-H
2.95
BANK OF CHINA-H
2.83
-1.736111
262955446
CHINA SHENHUA-H
PRICE
DAY %
VOLUME
12.84
-4.035874
25745997
ZIJIN MINING-H
2.46
-2.766798
33358745
25337902
ZOOMLION HEAVY-H
10.8
4.651163
34085311
-0.3378378
30750501
ZTE CORP-H
15.16
-2.820513
3392021
28.1
-1.576182
15586543
CHINA TELECOM-H
5.09
-0.7797271
22940748
3.63
-0.8196721
41377164
15.92
-2.331288
2175882
DONGFENG MOTOR-H
12.44
-1.737757
8248928
CHINA CITIC BK-H
4.18
-1.182033
29795903
GUANGZHOU AUTO-H
6.33
-0.9389671
6030294
CHINA COAL ENE-H
7.24
-2.425876
26721230
HUANENG POWER-H
4.88
0.2053388
13553510
CHINA COM CONS-H
7.19
-0.2773925
28043777
IND & COMM BK-H
4.64
-1.4862
263246445
CHINA CONST BA-H
5.14
-2.095238
281328784
JIANGXI COPPER-H
15.98
-1.842752
13584754
CHINA COSCO HO-H
3.38
-2.028986
23674008
PETROCHINA CO-H
10.14
-0.7827789
63597668
CHINA LIFE INS-H
18.1
-1.630435
38260533
PICC PROPERTY &
8.14
-2.979738
25456355
CHINA LONGYUAN-H
4.49
-3.023758
10404348
PING AN INSURA-H
57.55
-0.08680556
12819583
CHINA MERCH BK-H
14.76
-1.204819
24279804
SHANDONG WEIG-H
7.81
-1.884422
4200756
BANK OF COMMUN-H BYD CO LTD-H
NAME YANZHOU COAL-H
MOVERS
4
0 9900
INDEX 9573.94 HIGH
9761.06
LOW
9500.91
CHINA MINSHENG-H
7.43
1.226158
30551018
SINOPHARM-H
17.46
-3.215078
4909828
52W (H) 13317.51
CHINA NATL BDG-H
9.09
-0.4381161
44076149
TSINGTAO BREW-H
46.8
0.1069519
1623796
(L) 8058.58
10.06
-2.895753
6880576
WEICHAI POWER-H
31.65
-2.314815
3489781
CHINA OILFIELD-H
36
9300
21-May
23-May
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.65
-0.3759398
26776547
DAQIN RAILWAY -A
7.54
-0.3963012
44284668
SHANG PUDONG-A
8.89
-0.78125
61979794
AIR CHINA LTD-A
6.07
-0.6546645
12626727
DATANG INTL PO-A
5.25
0
2636948
SHANGHAI ELECT-A
5.42
-2.166065
4956814
ALUMINUM CORP-A
6.81
-1.731602
12101169
DONGFANG ELECT-A
21.61
-1.459188
5249296
SHANXI LU'AN -A
27.04
-1.02489
11071978
NAME
NAME
NAME
ANHUI CONCH-A
16.69
0.119976
38413443
EVERBRIG SEC -A
13.96
1.972243
16869524
SHANXI XINGHUA-A
78.28
3.027112
3432370
BANK OF BEIJIN-A
9.83
-0.4052685
22835161
GD MIDEA HOLDING
13.66
-2.637206
24227907
SHANXI XISHAN-A
18.18
-0.2742732
28256496
BANK OF CHINA-A
2.99
0
14310720
GD POWER DEVEL-A
2.55
-1.162791
22130989
SHENZ DVLP BK-A
15.97
0
11359898
BANK OF COMMUN-A
4.71
-0.422833
35871015
GF SECURITIES-A
32.2
2.613129
10656454
SHENZEN OVERSE-A
7.49
-0.794702
40597578
SINOVEL WIND-A
BAOSHAN IRON & S BYD CO LTD -A
4.84
-0.2061856
15179415
GREE ELECTRIC
21.95
0
13276641
15.37
-1.030264
919244
24.79
-0.3216727
3263260
GUIZHOU PANJIA-A
32.83
0.7364222
7076099
SUNING APPLIAN-A
9.77
-1.313131
32537688
TONGLING NONFE-A
12042386
CHINA CITIC BK-A
4.29
-1.152074
13164695
HAITONG SECURI-A
10.37
1.766438
111915725
21.62
-0.8256881
CHINA CNR CORP-A
4.32
0
39689553
HANGZHOU HIKVI-A
45.2
2.031603
2371616
TSINGTAO BREW-A
37
-0.3769521
2290985
CHINA COAL ENE-A
9.1
-1.301518
8156507
3
-0.3322259
14548787
WEICHAI POWER-A
32.29
0.2795031
4003711 27052186
HEBEI IRON-A
CHINA CONST BA-A
4.5
-0.8810573
20078266
HENAN SHUAN-A
61.95
-1.838061
2621763
WULIANGYE YIBIN
34.2
-1.241698
CHINA COSCO HO-A
4.97
-0.6
8608847
HUATAI SECURIT-A
11.2
2.564103
38747592
XIAMEN TUNGSTEN
45.92
-1.922255
7599126
CHINA CSSC HOL-A
31.29
-2.614379
10351240
HUAXIA BANK CO
9.85
-0.9054326
26238890
XINJIANG GUANG-A
27.08
-1.059554
8940215 13257273
CHINA EAST AIR-A
4.1
0.4901961
14065559
IND & COMM BK-A
4.18
-1.182033
40892993
YANGQUAN COAL -A
19.15
-1.945725
CHINA EVERBRIG-A
2.96
-0.3367003
34918910
INDUSTRIAL BAN-A
13.49
-1.316752
32296740
YANTAI CHANGYU-A
97.6
-0.1023541
662982
CHINA INTL MAR-A
14.9
-1.324503
6388967
INNER MONG BAO-A
43.24
-3.049327
92465437
YANTAI WANHUA-A
14.2
-2.136458
8556190
CHINA LIFE INS-A
17.69
-0.5061867
11354549
INNER MONG YIL-A
23.21
0.2158895
10913234
YANZHOU COAL-A
22.79
-1.299264
4390140
CHINA MERCH BK-A
11.74
-0.592718
38223073
INNER MONGOLIA-A
6.24
-2.5
79137083
YUNNAN BAIYAO-A
51.99
-1.1221
1772333
CHINA MERCHANT-A
13.31
0.9097801
17497813
JIANGSU HENGRU-A
27.84
-1.276596
5139451
ZHONGJIN GOLD
22.39
-2.141608
9305156
CHINA MERCHANT-A
24.28
0.746888
8738204
JIANGSU YANGHE-A
170
0.591716
1856278
ZIJIN MINING-A
4.08
-1.449275
62863269
CHINA MINSHENG-A
6.55
-1.355422
70750346
JIANGXI COPPER-A
25.59
-1.120556
10459984
ZOOMLION HEAVY-A
10.31
0.09708738
78217187
CHINA NATIONAL-A
6.34
0
43365750
JINDUICHENG -A
13.99
-0.9907997
7028765
ZTE CORP-A
15.63
-0.3824092
11815226
CHINA OILFIELD-A
18.74
0.4287245
6587833
JIZHONG ENERGY-A
20.3
1.045296
16951282
CHINA PACIFIC-A
21.09
-1.448598
9815650
KWEICHOW MOUTA-A
6.99
-0.2853067
21444230
CHINA PETROLEU-A
230.47
0.5190161
2472263
LUZHOU LAOJIAO-A
43.48
-0.2523515
10247854
CHINA RAILWAY-A
4.48
-0.4444444
27014061
METALLURGICAL-A
2.61
-1.136364
10906910
CHINA RAILWAY-A
2.71
-1.094891
27565647
NINGBO PORT CO-A
2.62
-0.7575758
31147176
CHINA SHENHUA-A
25.93
-1.256664
8620367
PANGANG GROUP -A
7.91
-1.861042
44740725
5.8
-1.192504
23290174
PETROCHINA CO-A
9.56
0
14882225
CHINA SHIPBUIL-A
MOVERS
85
196
19 2650
INDEX 2616.86
CHINA SOUTHERN-A
4.63
-0.6437768
16202925
PING AN INSURA-A
42.21
-0.845666
23472616
CHINA STATE -A
3.34
0.3003003
64116923
POLY REAL ESTA-A
13.61
1.491424
37408867
HIGH
2631.07
CHINA UNITED-A
4.11
-0.4842615
32115248
QINGDAO HAIER-A
12.14
-0.08230453
12745769
LOW
2566.86
CHINA VANKE CO-A
9.05
0.4439512
35449530
QINGHAI SALT-A
32.41
-1.45941
3463913
CHINA YANGTZE-A
6.75
-0.5891016
10014761
SAIC MOTOR-A
15.28
-0.06540222
15109828
CITIC SECURITI-A
13.6
2.255639
154785244
SANY HEAVY INDUS
14.54
0.7623008
37542173
CSR CORP LTD -A
4.95
1.020408
40887037
SHANDONG GOLD-MI
33.59
-2.184042
6389924
PRICE DAY %
Volume
PRICE DAY %
Volume
79 -0.2525253
5003522
52W (H) 3140.10 (L) 2254.56
2560
21-May
23-May
FTSE TAIWAN 50 INDEX NAME ACER INC
NAME
29.65
-3.733766
23062390
FORMOSA PLASTIC
ADVANCED SEMICON
27.7
-1.071429
11937507
FOXCONN TECHNOLO
ASIA CEMENT CORP
33.2 -0.4497751
3663757
FUBON FINANCIAL
NAME
PRICE DAY %
TAIWAN MOBILE CO
Volume
96
-1.030928
407.5
0.7416564
4778058 4898049
79.1
-3.77129
63269956
100.5
0.5
10540972
TPK HOLDING CO L
28.8
-1.369863
19914863
TSMC UNI-PRESIDENT
45.85 -0.1089325
UNITED MICROELEC
12.75
-4.494382
60055556
ASUSTEK COMPUTER
283.5
-5.342237
11714288
HON HAI PRECISIO
87 -0.2293578
32856672
AU OPTRONICS COR
11.85
-4.048583
48454133
HOTAI MOTOR CO
180.5 -0.2762431
464809
CATCHER TECH
6219304
178.5
0
16305307
HTC CORP
422.5
-2.085747
8636735
WISTRON CORP
39.8
-3.045067
13038750
CATHAY FINANCIAL
28.5
-2.39726
13719353
HUA NAN FINANCIA
15.75
-1.5625
9022305
YUANTA FINANCIAL
12.55
-1.568627
16189778
CHANG HWA BANK
15.3
-1.607717
6531727
LARGAN PRECISION
556
-1.067616
1191709
YULON MOTOR CO
48.3
-1.428571
4067347
CHENG SHIN RUBBE
71.3 -0.9722222
4888400
LITE-ON TECHNOLO
34.5
-2.404526
5529334
CHIMEI INNOLUX C CHINA DEVELOPMEN CHINA STEEL CORP CHINATRUST FINAN
12.15
-2.8
20145626
MEDIATEK INC
253
-3.619048
7698945
7.05
-4.081633
54154293
MEGA FINANCIAL H
20.5
-3.301887
22751503
28 -0.7092199
14636102
NAN YA PLASTICS
56.5
-2.417962
4097375
PRESIDENT CHAIN
-2.318841
31775102
155.5
-0.955414
527691
CHUNGHWA TELECOM
91.3 -0.1094092
8618628
QUANTA COMPUTER
77.8
-4.187192
31584957
COMPAL ELECTRON
31.2
-2.5
11318779
SILICONWARE PREC
30.8
-1.910828
6897368
88
-3.296703
6254905
SINOPAC FINANCIA
9.6
-1.940756
9305681
FAR EASTERN NEW
31.2
-2.040816
4272333
SYNNEX TECH INTL
67.7 -0.2945508
2360811
FAR EASTONE TELE
67.8
0.1477105
3984734
TAIWAN CEMENT
32.9
0.6116208
5475223
FIRST FINANCIAL
16.6
-1.775148
11591077
TAIWAN COOPERATI
17.2
-1.432665
4701298
FORMOSA CHEM & F
78.3
-1.136364
5192115
TAIWAN FERTILIZE
67.2
-3.170029
3164794
FORMOSA PETROCHE
82.5
-1.197605
2136836
TAIWAN GLASS IND
27.55
-1.957295
1212671
DELTA ELECT INC
16.85
MOVERS
4
45
1 5100
INDEX 4928.62 HIGH
5035
LOW
4927.33
52W (H) 6247.96 (L) 4643.05
4900
21-May
23-May
May 24, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GALAXy ENTERTAINMENT
Max 18.84
Average 18.30
MELCo CRoWN ENTERTAINMENT
Min 18.06
19.0
32.20
12.50
18.8
32.00
12.42
18.6
31.80
12.34
18.4
31.60
12.26
18.2
31.40
12.18
18.0
Last 18.34
Max 32.10
SANDS CHINA LTD
Max 26.50
Average 25.50
Average 31.41
Min 31.30
Min 25.10
Max 12.42
Average 12.24
Min 12.12
Last 12.20
WyNN MACAU LTD 13.70
18.60
26.22
13.58
18.48
25.94
13.46
18.36
25.66
13.34
18.24
25.38
13.22
18.12
13.10 Max 14.60
Average 14.10
DAY %
YTD %
(H) 52W
Min 13.84
Last 13.84
18.00 Max 18.60
Average 18.21
91
-0.925421884
-8.432280137
111.4899979
77.40000153
BRENT CRUDE FUTR Jul12
107.23
-1.088460474
1.514721197
125.6100006
94.34999847
GASOLINE RBOB FUT Jun12
291.62
-0.708205652
6.3918278
336.8899822
245.539999
903
-1.230516817
0.389105058
1045.75
810
2.679
-1.034355375
-15.80766813
5.09400034
1.981999993
HEATING OIL FUTR Jun12
283.28
-0.999510729
-0.460311325
331.5699816
256.0600042
Gold Spot $/Oz
1553.9
-1.5141
-0.7036
1921.18
1478.78
GAS OIL FUT (ICE) Jul12 NATURAL GAS FUTR Jun12
Silver Spot $/Oz
27.68
-1.4827
-0.5569
44.2175
26.085
Platinum Spot $/Oz
1423.25
-2.3499
2.0617
1915.75
1339.25
Palladium Spot $/Oz
604.34
-0.962
-7.5226
848.37
537.54
LME ALUMINUM 3MO ($)
2029
-0.879335613
0.445544554
2695
1955.75
LME COPPER 3MO ($)
7739
0.103479498
1.828947368
9905
6635
LME ZINC
1912
0.341117817
3.631436314
2539.5
1718.5
16900
-1.658423043
-9.673971138
25195
16550
15.31
0.426369301
-0.390370852
19.375
14.07500076
601
0.67001675
-9.111531191
795
572.25
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul12 Jul12
PRICE
(L) 52W
WTI CRUDE FUTURE Jul12
Last 18.26
Min 18.08
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 %
0.9741 1.5716 0.9504 1.2638 79.42 7.9994 7.7675 6.334 56.0975 31.53 1.2793 29.544 43.481 9374 77.363 1.20107 0.8041 8.0048 10.1096 100.37 1.0299
YTD %
-1.3969 -0.3361 -0.9154 -0.9173 0.3903 0.0025 -0.0193 -0.1737 -1.2523 -0.4757 -0.7582 -0.0982 -0.7957 -1.2161 1.8097 0.0017 0.592 1.1256 0.9338 1.3151 0.0194
(H) 52W
-4.5842 1.113 -1.2942 -2.4921 -3.1604 0.0025 -0.0013 -0.6157 -5.4058 0.0634 1.3523 2.4878 0.8256 -3.2537 1.3818 1.3088 3.6426 1.6165 2.3977 -0.7074 0.0194
(L) 52W
1.1081 1.6618 0.9596 1.4697 84.18 8.0449 7.8113 6.4986 56.1475 31.96 1.3199 30.716 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 10.1031 97.04 1.0288
MACAU RELATED STOCKS
677
-1.239970824
-1.347905282
957.5
592.25
NAME
(H) 52W
(L) 52W
SOYBEAN FUTURE Jul12
1362.75
-1.410743353
11.06356968
1512.5
1125.5
ARISTOCRAT LEISU
2.95
-1.993355
34.09091
3.25
1.88
924917
COFFEE 'C' FUTURE Jul12
171.75
-1.575931232
-26.03359173
290.75
171.1999969
CROWN LTD
8.62
-2.59887
6.551296
9.29
7.45
6565667
SUGAR #11 (WORLD) Jul12
19.64
-0.808080808
-12.94326241
27.02999878
19.53000069
AMAX HOLDINGS LT
0.079
-2.469136
-9.1954
0.131
0.06
3956500
COTTON NO.2 FUTR Jul12
72.93
-2.133655395
-20.1292301
117
72.13999939
BOC HONG KONG HO
21.9
-1.573034
19.02174
24.45
14.24
13841409
WHEAT FUTURE(CBT) Jul12
PRICE
CENTURY LEGEND
World Stock MarketS - Indices NAME
DAY % YTD %
VOLUME CRNCY
0.233
0
1.304346
0.41
0.204
0
CHEUK NANG HLDGS
3.02
-0.330033
7.857145
4.79
2.3
93000
CHINA OVERSEAS
15.7
0.3836317
20.95532
17.86
9.99
20596344
CHINESE ESTATES
9.82
-2.191235
-21.44
14.1
9.71
32000
CHOW TAI FOOK JE
10.02
-1.956947
-28.01724
15.16
9.89
4599600
EMPEROR ENTERTAI
1.18
-1.666667
6.306305
2.09
0.97
350000
FUTURE BRIGHT
0.86
-1.149425
104.7619
1.09
0.3
1278000
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
12502.81
-0.01335521
2.334754
13338.66016
10404.49
18.34
-4.479167
28.79214
24.95
8.69
40845523
NASDAQ COMPOSITE INDEX
US
2839.08
-0.2855427
8.979528
3134.17
2298.89
HANG SENG BK
100
-0.7936508
8.518718
125
84.4
2012571
FTSE 100 INDEX
GB
5312.76
-1.675279
-4.65734
6084.08
4791.01
HOPEWELL HLDGS
20.3
0.4950495
2.215505
24.903
18.56
454000
DAX INDEX
GE
6316.44
-1.851576
7.088251
7523.53
4965.8
HSBC HLDGS PLC
62.75
-1.181102
6.355932
82.15
56
22617207
NIKKEI 225
JN
8556.6
-1.978282
1.197467
10255.15
8135.79
HANG SENG INDEX
HK
18786.19
-1.328631
1.908383
23707.94922
16170.35
CSI 300 INDEX
CH
2616.869
-0.4055528
11.55826
3140.102
2254.567
MGM CHINA HOLDIN
TAIWAN TAIEX INDEX
TA
7147.75
-1.747655
1.069981
9089.47
6609.11
MIDLAND HOLDINGS NEPTUNE GROUP NEW WORLD DEV
GALAXY ENTERTAIN
HUTCHISON TELE H
3.66
1.104972
22.40803
3.68
2.13
6644287
LUK FOOK HLDGS I
17.58
-1.897321
-35.12915
46.15
16.56
2876000
MELCO INTL DEVEL
6.3
-3.522205
9.185442
10.76
4.3
1828471
12.2
-1.771337
27.18729
17.183
7.6
9032800
3.64
-1.355014
-9.900989
5.48
2.95
3362396
0.097
-3.960396
-12.61261
0.157
0.08
75000
8.16
-3.546099
30.35143
12.381
6.13
16632844
SANDS CHINA LTD
25.4
-3.969754
15.71754
33.05
14.9
23519632
SHUN HO RESOURCE
1.18
0
18
1.32
0.82
0
-1.079137
7.458466
4.686
2.241
2751063 15991772
KOSPI INDEX
SK
1808.62
-1.097507
-0.9377016
2192.83
1644.11
S&P/ASX 200 INDEX
AU
4067.035
-1.309608
0.258208
4724.8
3765.9
ID
3973.946
-1.172664
3.975783
4234.734
3217.951
FTSE Bursa Malaysia KLCI
MA
1540.14
-0.4331411
0.6147416
1609.33
1310.53
SHUN TAK HOLDING
2.75
NZX ALL INDEX
NZ
785.609
-0.5501579
7.647122
814.431
700.441
SJM HOLDINGS LTD
13.18
-4.768786
5.393323
20.711
10.079
14.4
0.5586592
7.14286
18.5
9.8
2066076
18.26
-1.510248
-6.358974
27.48
14.807
15065319
JAKARTA COMPOSITE INDEX
PHILIPPINES ALL SHARE IX
12.10
26.50
25.10
Last 25.40
PRICE
CORN FUTURE
31.20
CURRENCY EXCHANGE RATES
NAME
METALS
Last 31.30
SJM HoLDINGS LTD
Commodities ENERGY
MGM CHINA HoLDINGS
PH
3292.07
-0.6764238
8.112537
3518.96
2695.06
SMARTONE TELECOM WYNN MACAU LTD
HSBC Dragon 300 Index Singapor
SI
537.68
1.45
8.33
na
na
ASIA ENTERTAINME
4.6
-1.918977
-21.76871
10.8692
4.55
66215
STOCK EXCH OF THAI INDEX
TH
1115.83
-1.38663
8.82749
1247.72
843.69
BALLY TECHNOLOGI
45.08
0.8952551
13.95348
49.32
24.74
910178
HO CHI MINH STOCK INDEX
VN
436.75
-2.498102
24.23553
492.44
332.28
BOC HONG KONG HO
2.84
0
18.47217
3.15
1.81
12555
Laos Composite Index
LO
995.62
0
10.69086
1165.57
876.33
GALAXY ENTERTAIN
2.5
-3.846154
33.68984
3.24
1.08
4727
INTL GAME TECH
14.22
-1.863354
-17.32559
19.15
13.38
2747358
JONES LANG LASAL
71.69
0.9291849
17.02579
99.89
46.01
216614
LAS VEGAS SANDS
47.86
-0.6435541
12.00562
62.09
36.08
12277686
MELCO CROWN-ADR
12.19
-2.401922
26.71518
16.15
7.05
7358256
MGM CHINA HOLDIN
1.66
0
39.2976
2.21314
1.00254
4000
MGM RESORTS INTE
10.72
-1.379945
2.780438
16.05
7.4
14013439
SHUFFLE MASTER
15.28
-1.988454
30.37542
18.77
7.35
448809
1.76
-3.930131
9.481823
2.60368
1.26239
7355
103.15
-0.9791687
-6.643133
165.4931
98.26
2241628
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business daily May 24, 2012
Opinion Who is responsible for the Greek tragedy?
Mohamed A. El-Erian
CEO and co-CIO of PIMCO
G
reece is following the road taken by several other crisis-ridden emerging economies over the past 30 years. Indeed, as I argued earlier this year, there are stunning similarities between this onceproud eurozone member and Argentina prior to its default in 2001. With an equally traumatic implosion – economic, financial, political, and social – now taking place, we should expect heated debate about who is to blame for the deepening misery that millions of Greeks now face. There are four suspects – all of them involved in the spectacular boom that preceded what will unfortunately prove to be an even more remarkable bust. Many will be quick to blame successive Greek governments led by what used to be the two dominant political parties, New Democracy on the right and PASOK on the left. Eager to borrow their country to prosperity, they racked up enormous debts while presiding over a dramatic loss of competitiveness and, thus, growth potential. Some even sought to be highly economical with the truth, failing to disclose the true extent of their budgetary slippages and indebtedness. Having borrowed far too much after joining the eurozone in 2001, New Democracy and PASOK let their citizens down when adjustments and reforms were needed after the 2008 global financial crisis. An initial phase of denial was followed by commitments that could not be met (indeed, that some argued should not be met, owing to faulty program design). The resulting erosion in Greece’s international standing amplified the hardship that citizens were starting to feel.
Two sides to a coin Hold on, I hear you say. For every debt incurred there is a credit extended. You are right. Greece’s private lenders were more than happy to pour money into the country, only to shirk their burden-sharing responsibilities when the artificial boom could no longer be sustained. The over-lending was so widespread that at one point it drove down the yield differential between Greek and German bonds to just six basis points – a ridiculously low level for two countries that differ so fundamentally in terms of economic management and financial conditions.
Overeager creditors willingly underwrote this absurd risk premium. Yet, when it became abundantly clear that Greece’s debt burden had been taken to insolvency levels, creditors delayed the moment of truth. They dragged their feet when it came to the critical agreement on orderly burden-sharing (that is, acceptance of a “haircut” on private-sector claims on Greece). And the longer they did that, the more money left Greece without any intention of returning. But neither the Greek government nor its private creditors acted in a vacuum. Both took comfort from the political cover provided by the European unification effort – an historic initiative aimed at securing the continent’s well-being through closer economic and political
integration on the basis of credible rules and effective institutions. On both counts – rules and institutions – the eurozone fell short of what was required. Remember, the large core economies (France and Germany) were among the first members to breach the budgetary rules that were established when the euro was launched. And European institutions proved toothless when it came to enforcing compliance. All of this served to sustain the fantasy world that both Greece and its creditors happily inhabited for far too long.
Slow reaction Europe also failed to react properly when it became obvious that Greece was starting to
European government counterparts failed to converge on a common assessment of the country’s problems, let alone cooperate on a proper response. While they grudgingly loosened their purse strings to support Greece, the underlying motives were too shortsighted
teeter. European government counterparts failed to converge on a common assessment of the country’s problems, let alone cooperate on a proper response. While they grudgingly loosened their purse strings to support Greece, the underlying motives were too shortsighted, and the resulting approach was strategically flawed and abysmally coordinated. Finally, there was the International Monetary Fund, the institution charged with safeguarding global financial stability and being a trusted adviser to individual countries. It appears that the IMF succumbed too easily to political pressures during both the boom and the bust. Political expediency seems to have trumped analytical robustness, undermining both the Fund’s direct beneficial role and its function as a policy and financial catalyst. On the surface, each of the four suspects has an individual case for arguing that the finger of blame should be pointed elsewhere. They could even argue that, at worst, they were uninformed accomplices. But that is not really right. None of the four can avoid the reality that Greece’s collapse would not have occurred had they not been complacent during the boom and, subsequently, fulfilled their responsibilities during the bust so poorly. They sucked each other into a sense of false prosperity, only to trip each other up during the inevitable downturn. Now, one hopes, all four will be held properly accountable by their stakeholders and undertake serious self-evaluation. Most likely, they will end up getting off too easy, especially compared to the real victims of this historic tragedy – the most vulnerable segments of the Greek population, who will become much worse off, today and for many years to come, as jobs disappear, savings evaporate, and livelihoods are destroyed. And they may not be alone. Millions of others may experience collateral damage, as financial contagion risks spreading to other European countries and to the global economy as a whole. In a fairer world, these vulnerable citizens would be entitled to claw back the salaries, official privileges, and bonuses that the four parties to blame enjoyed for too long. In the world as it is, they are a compelling lesson for the future. © 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 24, 2012 business daily | 15
OPINION Obama’s tariffs on China’s solar wires products will cost U.S. Business Leading reports from Asia’s best business newspapers
Nikkei.com Japan’s finance minister said yesterday that he expects the Bank of Japan to act take appropriate monetary policy steps at the proper time, but he declined to comment on the BOJ’s decision to keep it policy on hold. “The BOJ made a decisive decision to ease its policy last month, and I expect that it will act appropriately at the proper time while examining economic conditions,” Jun Azumi told reporters at the Ministry of Finance.
Business Inquirer The Philippine government on Tuesday rejected all tenders for P9 billion (US$207 million) worth of 15-year treasury bonds amid what National Treasurer Roberto B. Tan described as an apparent disinterest among investors. Mr Tan said the auction committee decided to reject all bids and did not consider a partial award because the P9-billion offering was undersubscribed, with prospective buyers bidding for only P7.56 billion.“We don’t want to send any signal that [the government is] in need of cash,” he was quoted as saying.
Thai Business News Thailand tourism income jumped by 31 percent yearon-year to exceed Bt770 billion (US$24.5 billion) in 2011, said Thanitta Savetsila Maneechote, deputy secretary for Tourism and Sports. Despite problems that shook tourists’ confidence and last year’s devastating flood, Thailand still earned Bt776.2 billion in tourism, she was quoted as saying. The country also recorded 19.2 million tourists in 2011, an increase of nearly 21 percent year-on-year.
Taipei Times Cathay Life Insurance Co on Tuesday bought debt-ridden Prince Motors Group’s New Taipei City plant through an auction for NT$4.39 billion (US$148.31 million). The insurance company is seeking to invest in real-estate, but has made slow progress amid an increasingly scarce supply, said Michael Wang, an account-manager at SinyiRealty Inc’s asset department. Cathay Life issued a statement yesterday evening saying it would not turn the newly acquired property into a residential complex, but would use it as a storage facility.
Deborah Solomon Katy Roberts Bloomberg Editors
S
imple economics holds that if you want to promote mass adoption of something, you have to make it affordable and available. This week, the Obama administration is slapping potentially hefty tariffs on imports of Chinese solar products, a move that will satisfy a protectionist urge but undercut the U.S. energy agenda. It’s no secret China is aggressively subsidising its solar manufacturers, driving down prices for solar panels and components. Here’s the question: Is that a bad thing? One of the administration’s overarching goals – and one we heartily endorse – is fostering the adoption of clean, non-carbon-based energy, including solar. In a perfect world it should matter less where the technology comes from than whether affordable solar is enabling office buildings, universities and households to install the technology and cut down on fossil-fuel use. Slapping tariffs on the Chinese may make for good politics, but it will slow solar adoption and almost undoubtedly provoke retaliatory trade actions by a country with which the U.S., like it or not, is inextricably linked. It’s not lost on the Chinese that the U.S. has its own share of clean-energy subsidies. A better approach would be to try to negotiate a clean-energy trade agreement with China and other countries trying to promote renewables. Such an agreement would have to spell out the types and levels of allowable government assistance; restrict protectionist measures, such as requiring locally produced components and services; and be subject to dispute resolution by the World Trade Organisation.
China’s subsidies The lure of punitive tariffs is easy to understand: China, through the use of overly generous subsidies to do-
But rather than giving in to protectionist tendencies, we encourage the U.S. to take a more diplomatic approach and begin earnest negotiations for a cleanenergy trade agreement
mestic manufacturers, has helped drive down the price of solar panels 80 percent over the past five years and more than 40 percent in just the past 12 months. Several U.S. solar companies such as Solar Trust of America LLC, Solyndra LLC, Evergreen Solar Inc. and SpectraWatt Inc. have filed for bankruptcy protection, while others are teetering on the edge. The Coalition for American Solar Manufacturing, which has petitioned the U.S. Commerce Department for trade sanctions, says China’s tactics have cost 2,000 jobs in the photovoltaic industry alone. Yet there are other reasons for the solar shakeout. Manufacturers, racing to meet demand over the past decade, are now sitting on a glut of panels as subsidy cuts in Europe and declining naturalgas prices take their toll. As Bloomberg News recently reported, even the largest producers in China say their profits will slump this year as shipments grow. President Barack Obama has singled out trade actions against China as a hallmark of his administration, saying tariffs such as the 2009 Chinese tire duties have saved jobs. Labor groups and other important constituencies have praised his position. But a growing body of research shows tariffs might actually cost U.S. jobs, drive up prices and hurt domestic
businesses that use imported materials. The Peterson Institute for International Economics, for instance, found that Obama’s tire tariffs came at a steep price to consumers and to workers in other sectors. The analysts concluded the measure did save about 1,200 tire manufacturing jobs but raised tire costs by about US$1.1 billion in 2011. Higher-priced tires reduced spending elsewhere, indirectly lowering retail employment by as many as 3,700 jobs. The money didn’t land in the pockets of tire workers but in “the coffers of tire companies, mainly abroad but also at home,” the study said.
How duties backfire Businesses, particularly smaller companies that lack scale to negotiate bulk prices, can also face higher prices from trade sanctions, according to a Bloomberg Government analysis of 35 recent trade sanctions on Chinese goods. A 2009 decision to impose duties on Chinese imports of citric acid, which is used in everything from detergent to soda, resulted in higher prices, the analysis found. U.S. actions don’t happen without consequences. The Chinese routinely retaliate against U.S. trade sanctions by imposing tariffs on American imports such as cars and chicken parts. Energy analysts say China will
probably respond to the solar tariffs by imposing a tax on U.S.-made polysilicon, a solar component, further hurting the market. In March, the Commerce Department imposed preliminary tariffs of as much as 4.73 percent on Chinese solar panels. The move was seen mainly as a slap on the wrist, given that China sells its modules for about 12 percent less. The tariffs being imposed this week stand to be much higher which could have major ramifications, particularly for U.S. companies using Chinese materials in their products. It’s no wonder the solar industry is split on the issue. The political reality is the U.S. will probably decide in favor of tariffs, and we hope the level is low enough that the tax doesn’t hobble solar. But rather than giving in to protectionist tendencies, we encourage the U.S. to take a more diplomatic approach and begin earnest negotiations for a clean- energy trade agreement. Such an idea had been discussed as part of the stalled Doha trade talks and should be revived. One idea promoted by economists is to model an agreement on the 1996 Information Technology Agreement. The ITA, which now has 70 member countries, eliminated tariffs on hundreds of goods and products, and resulted in skilled countries like the U.S. designing technology products (think iPad) and labor-rich countries like China assembling them (think iPad). Any agreement would have to deal with government subsidies and be subject to dispute settlement by the WTO. The market is already tilted against renewable sources of energy, with fossil fuels cheap, available and benefiting from entrenched tax benefits. Rather than throwing up roadblocks, the U.S. should be encouraging clean energy, regardless of the country of origin. Bloomberg View
16 |
business daily May 24, 2012
CLOSING Thailand may raise GDP forecast
Fiat and Mazda in car alliance
Thailand’s central bank said yesterday it might raise its growth forecast for 2012 from 6.0 percent. Domestic consumption and investment remain strong, with gross domestic product growing a record 11 percent in the first quarter from the previous three months and 0.3 percent on the year. “There is a chance [that our forecast will be raised] as first-quarter data was better than we had projected, but there are also new risk factors and the situation in Europe is not calm yet,” said Bank of Thailand Assistant Governor Paiboon Kittisrikangwan.
Fiat and Mazda have formed an alliance to develop two-seater sports cars. The alliance will work on a car for Fiat’s Alfa Romeo brand and a roadster with a different engine and styling for Mazda. The cars will be built at Mazda’s plant in Hiroshima. Both will be based on a new version of Mazda’s MX 5 – the car that Mazda is best known for. Mazda is looking to cut costs after losing $1.3bn in its most recent financial year. Production of the Alfa Romeo model is planned to start in 2015.
HK’s Joseph Lau charged with bribery, money laundering Chinese Estates Holdings confirms news in filing to HKEx Tiago Azevedo
tiago.azevedo@macaubusinessdaily.com
yesterday. The Hang Seng Index retreated 1.3 percent, as all but four stocks in the index dropped.
Photo by Manuel Cardoso
M
acau’s Public Prosecutor has formally accused Joseph Lau Luen Hung, the chairman of Hong Kong-based property developer Chinese Estates Holdings Ltd, of bribery and money laundering. Mr Lau is facing charges over a case linked to the latest trial against former secretary for Transport and Public Works Ao Man Long, the company confirmed yesterday. “… the board of directors of the company announces that it was informed by Mr Joseph Lau, Luen Hung … that on May 23, 2012, the Court of Criminal Instruction of the Macau Special Administrative Region … had, in a pre-judgement process, formally accepted the accusation from the Public Prosecutor against Mr Lau of committing offences of bribery and money laundering in relation to the acquisition of the Macau Land and rejected the request of discharge of the accusation based on lack of evidence,” Chinese Estates Holdings said in a filing to the Hong Kong Stock Exchange late yesterday. “As a result, the case will be remitted to the Court of First Instance of Macau for trial in due course,” the company added after trading was close. The company dropped 2.2 percent to HK$9.82 at the close of trading
Land deal Mr Lau and another prominent Hong Kong businessman, Steven Lo Kit Sing, chairman of BMA Investment Group Ltd and South China Football Club, are facing charges over a 2006 land deal. According to the indictment in the Ao trial, Mr Lau and Mr Lo are said to have paid a bribe of HK$20 million (US$2.5 million) to secure a 78,742-square-metre piece of land near the airport, where the La Scala flats are currently being built. Mr Lo had previously told reporters he faced charges “about the same thing,” after testifying in Mr Ao’s third trial. Both businessmen denied having broken any Macau law. At a final appearance at the Court of Final Appeal earlier this month, Mr Ao said that the HK$20 million cheque paid to his offshore company Ecoline was for consultancy services requested by Ho Meng Fai, the head of San Meng Fai Engineering & Construction Co Ltd. Mr Lo also told the court last month that Mr Ho had asked for an advance payment of HK$20 million to help with the residential
HK tycoon Joseph Lau is facing charges over the land where residential project La Scala is being built
project. He said Mr Ho gave him the number of a bank account that he believed was controlled by a supplier, and did not know the account was connected to Ecoline. Mr Ho has been sentenced for corruption in another Ao-linked case and remains at large. In his last appearance in court, the jailed former secretary denied
that the two prominent Hong Kong businessmen had ever paid the bribe alleged to help secure the plot near the airport. Mr Ao is currently facing a third trial in the Court of Final Appeal, this time for passive corruption and money laundering. He is serving a sentence of 28 and a half years for fraud-related charges.
Facebook float hits more problems Facebook Inc.’s initial public offering is getting less friendly with each passing day
I
nvestors and regulators raised new concerns about the US$16 billion IPO as Facebook shares fell a second straight day, extending losses to 18 percent below the US$38 offer price. Facebook shares closed 8.9 percent lower at US$31 on Tuesday, following an 11 percent plunge on Monday. At that price the company has shed more than US$19 billion in market capitalisation. Facebook’s flotation has run into more controversy amid reports of concerns about the way advisers disclosed information to investors. As Facebook shares keep falling, regulators said they may review the disclosure process to see if some
investors got favourable access. The SEC and the Financial Industry Regulatory Authority (FINRA) both said they would look into the matter. Reuters earlier had reported that Facebook’s advisers may have revised their financial forecasts for the social networking company, but that only selected investors were told. Mary Schapiro, chairman of the Securities and Exchange Commission, said “there are issues that we need to look at”. Richard Ketchum, chief executive of the regulatory body FINRA, said there were “matters of regulatory concern”. “Morgan Stanley followed the same
procedures for the Facebook offering that it follows for all IPOs,” Morgan Stanley spokesman Pen Pendleton said in a statement. “These procedures are in compliance with all applicable regulations.” Also on Tuesday, a private investor issued a writ against the Nasdaq stock exchange over technical problems on Friday that disrupted Facebook’s first trading day. Phillip Goldberg, a Maryland resident, is seeking class-action status on behalf of all investors who say they lost money because of the technical problems. Facebook’s market debut was delayed by about half an hour, and orders to buy or sell shares were further disrupted. Mr Goldberg has
filed a writ in the southern district court of New York. Nasdaq chief executive Robert Greifeld has said that “clearly we had mistakes in the Facebook listing”. It has all taken the shine off one of the most anticipated flotations in history. It is a remarkable turnaround from recent weeks, when the social network’s share sale was oversubscribed and the eight-year-old firm was valued at US$104 billion. Much of the blame for the fall in share price is being pinned on lead underwriters Morgan Stanley and the Nasdaq exchange itself, with many commentators saying that the sale was over-priced. Reuters