Macau Business Daily, May 25, 2012

Loan arrangers Wynn Cotai funding

UnionPay buys into JETCO

Page 9

Page 8

Year I - Number 40 - Friday May 25, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

Page 7

China PMI shows below-trend growth

Taxiing for takeoff as business aviation grows Business jet traffic in Macau is booming, growing on average about 21 percent year-on-year for the past six years. Private jet movements increased from 383 in 2005 to 1,132 last year, official data show. As new mega-projects gear up for Cotai, that could mean nothing but blue skies for Macau as private jets and gaming go hand in hand. “If Macau is able to provide quick solutions … in this part of the world it will become a serious alternative [business airport],” Carlos Gomez, chief executive of TAG Aviation Asia, told Business Daily.

Pages 2 & 3

Seizure fears grow for La Scala buyers W ith the chairman of developer Chinese Estates Holdings charged with bribery and money laundering over the acquisition of the La Scala plot, fears are growing that the government might take back the land.

If that were to happen, the people or companies who already bought 300 of the project’s 900 flats would have the right to compensation worth twice the down payment, lawyer Vítor Gomes told Business Daily.

But “buyers would be left in a rather complicated situation” if the developer would be unable to pay back all compensation, as most pre-sale buyers try to pay as much as possible in order to get a

bigger discount, he says.

On the other hand, Chinese Estates would not be able to get compensation, especially if its chairman Joseph Lau Luen Hung is sentenced in a trial linked to corruption scandal surrounding former secretary Ao Man Long, the lawyer says.

Last week the current secretary for Transport and Public Works Lau Si Io said no decision had been made on the plot but Mr Gomes does not believe the government will take back the plot.

He expects the government to invoke public interest even though “morally it would be difficult to justify not revoking the concession contract”.

Mr Lau “strenuously” denied all charg-

es and will remain as chairman of Chinese Estates but the company will create a special committee to keep an eye on the “potential impact … on the La Scala project”.

More on Page 5 www.macaubusinessdaily.com

Brought to you by

HANG SENG INDEX 18900

Ponte 16 boss eyes Hainan casino

Money rolling for Buddha relic

18840

18780

18720

18660

The Macau Foundation granted 24 million patacas (US$3 million) of public money to a five-day exhibition of a Buddhist relic. But two members of the event’s organising committee are also part of the foundation’s boards, raising doubts over a possible conflict of interest. The foundation denied any wrongdoing but it is not clear whether the exhibition received any more public money.

18600

May 24

HSI - Movers Name

Page 4

Public housing 2.0 coming next year The second phase of the public housing development will be launched in the third quarter of this year, authorities said yesterday. More than 3,000 flats will be built in three areas in the northwestern district of Ilha Verde, turning it into the biggest public housing project in the Macau peninsula. The construction works are set to begin this year.

Page 6

T

he Macau casino boss who brought Michael Jackson’s ‘moonwalk’ glove to Macau for a cool US$450,000 (3.6 million patacas) has now set his sights on an even greater prize - operating mainland China’s first casino.

Hoffman Ma Ho Man - deputy chairman of Success Universe Group, a partner with SJM in the Ponte 16 gaming resort – says

the mainland holiday island of Hainan already has approval in principle from Beijing for a gambling palace.

“I’m quite certain that if there is going to be a casino in Hainan, Macau operators are going to be prioritised,” Mr Ma told Business Daily during the final day of Global Gaming Expo Asia on Cotai.

Page 8

%Day

TENCENT HOLDINGS

2.10

CHINA RES LAND

1.95

HANG LUNG PROPER

1.66

HANG SENG BK

0.70

BOC HONG KONG HO

0.68

NEW WORLD DEV

-2.21

CHINA MOBILE

-2.32

CHINA UNICOM HON

-2.40

BELLE INTERNATIO

-2.91

WANT WANT CHINA

-4.23

Source: Bloomberg

Brought to you by

2012-5-25

2012-5-26

2012-5-27

26˚ 31˚

25˚ 30˚

24˚ 28˚

2 |

business daily May 25, 2012

macau

21%

erage annual av iness in bus increase ents jet movem 5 0 since 2 0

1,132 private jet movements last year

Sky’s the limit for private jet industry A sonic boom in jet traffic sees annual growth average about 21 percent a year for the past six years Tiago Azevedo

tiago.azevedo@macaubusinessdaily.com

M

acau could play a key role in the business aviation sector in the near future as it moves to expand the parking area for private jets and small planes.

The Civil Aviation Authority says business jet traffic at Macau International Airport “has been facing a favourable growth” since 2005, a year after the Sands Macao opened its doors, ushering in the city’s gaming boom.

“Traffic increased from 383 movements in 2005 to 1,132 movements in 2011, an average increase of about 21 percent,” the aviation regulator told Business Daily.

With new companies gearing up to start operations, that number seems destined to increase further.

The airport’s own projections for business jet traffic say 1,500 movements could be expected in three years. The Macau International Airport Master Plan predicts 2,200 movements by 2020, growing to 3,400 movements

in 2030, with 5,000 movements a longer-term goal.

“Each year, more and more private jets fly in and out of Macau but they are not home-based here,” says John Galati, chief executive of Jet Asia Ltd, a Macau-based private jet and aircraft management company.

Jet Asia and Macau Jet International Co Ltd are two of the city’s air operator certificate holders providing business jet services.

Other providers operating their own charters include Las Vegas Sands Corp, Fortuna Jet and Galasky.

Blue skies As more and more high-end tourists visit the city, the aviation authority has received “more and more applications from foreign operators to flying to Macau”.

“We have also occasionally received enquiries from investors on the procedures for Macau AOC application,” said a spokeswoman.

“There were 20 business jet

companies who operated frequent flights to Macau last year.”

To get an air operator certificate (AOC), a company must be incorporated in Macau, be in the city’s company registry and have its principal place of business here.

It is an attractive market but it could be much more, says TAG Aviation Asia chief executive Carlos Gomez.

TAG offers aircraft management, charters and brokerage services throughout the Asia-Pacific region.

“Casino and tourism business in general make it an attractive destination but its proximity to a major airline hub like Hong Kong and large cities in South China can make it even more interesting as private operations will always grow where there are significant developments,” Mr Gomez told Business Daily.

Growing pains While private aviation is expected to expand in southern China,

limited space may crimp growth here. The aviation authority recognises the airport’s capacity will not meet future growth but hopes a major redevelopment will help satisfy demand.

“The airport’s general aviation apron area will expand from the present 4,500 square metres that only houses three, normal-sized, private jets to 62,000 square metres that can house 38 normal-sized private jets,” the spokeswoman told Business Daily.

The development will also include an independent passenger terminal, three aircraft hangars and a maintenance hangar. No budget has been set aside for the planned expansion.

The city’s small customer base is still a concern.

In an interview with Macau Business magazine last year, Mr Galati said Jet Asia had no plans for expansion because the market was too small. The city would need close to 1 million people before

May 25, 2012 business daily | 3

MACAU

Air Macau’s cost cutting may hurt freight service Cherry Lee ceci-lqq@macaubusinessdaily.com

A

ir Macau has cancelled leases on two cargo aircraft in response to plummeting freight volumes, the flag carrier has told Business Daily.

An Air Macau spokesperson said the decision to cancel the leases was a cost-cutting move based purely on declining freight volumes. But the airline stressed that the outlook for belly cargo – cargo stowed under the main deck of passenger aircraft – was “quite positive”.

In the first four months of this year, the volume of freight handled at the Macau International Airport dropped by 26 percent to less than 8,900 tonnes.

International Logistics and Forwarding Association of Macau head Victor Lei Kuok Fai said one the leased planes had not been used at all last year but ending both leases may have a negative impact on the airline’s freight services.

Ending the leases would not have a significantimpactonthemarketbecause international logistics companies have alternative arrangements in place for their cargoes.

In the six years from 2005 until last year, annual freight volumes at the airport fell from almost 230,000 tonnes to less than 40,000 tonnes a year.

Mr Lei blamed the sharp drop in freight volumes on the launch of

direct flights between Taiwan and the mainland in 2008. Freight services were also affected by the Global Financial Crisis that caused European demand to fall away.

Mr Lei said the cargo business would improve soon because casino operators are expanding in Cotai, meaning increased volumes of equipment and goods would need to be moved.

A source from the Macau International Airport Co believes otherwise.

He told Business Daily that cargo trucks and ships will handle most of the goods, namely construction materials for a new resort by Wynn Macau Ltd and Galaxy Macau’s

second phase.

Mr Lei said he was hopeful the Logistics Development Committee created last year will serve as “a communication channel” between the government and the industry.

The committee is currently working on a survey of “shortmedium-long term future planning of freight services”.

The survey is expected to highlight some preliminary preparation for the opening of Hong KongZhuhai-Macau Bridge in 2016, which Mr Lei expects will be an engine of growth for the city’s logistics business.

Each year more and more private jets fly in and out of Macau but they are not homebased here.

If Macau provides more services, for example no limitations in movements, parking and maintenance facilities, it will attract more business. No doubt about it.

John Galati, chief executive of Jet Asia Ltd

Carlos Gomez, chief executive of TAG Aviation Asia

“we could have the potential to fill up the airplanes and create more destinations,” he said.

A majority of the city’s VIPs had their own jets, he told the magazine, adding that most of the company’s business originated from outside Macau.

High flyers Even with a major overhaul, the city will have to create the right conditions to attract more companies.

“We believe corporate and private aviation is a question of convenience,” said Mr Gomez.

“It is difficult, if not impossible, to attract business to a destination based on the facilities of the airport … but the contrary is true when there are limitations or difficulties in the operation.

“For example, London is an important destination where clients will choose to fly to one airport or the other based on the

KEY POINTS The airport’s general aviation apron will grow from 4,500 sqm to 62,000 sqm – from an area that can accommodate three private jets to one for 38 private jets There were 20 companies offering business jet flights into Macau last year For a company to be an air operator certificate holder it must be a Macau-incorporated company duly registered in the city’s company registry and to have its principal place of business here

services and facilities provided.

If Macau provides more services, for example no limitations in movements, parking, hangarage and maintenance facilities, it will attract more business. No doubt about it.”

The core of the city’s private aviation business is unaffected by the gaming boom, Mr Galati told Macau Business.

He said multinational companies chartered significant number of flights for executives destined for board meetings and regional appointments. The cost of a charter could range from US$20,000 (160,000 patacas) to US$120,000, depending on the destination. Most passengers were either European or North American.

Kick start But other aviation executives believe private jets and gaming go hand in hand. That could

mean nothing but blue skies, with new projects in the pipeline for the Cotai Strip, including Wynn Macau Ltd’s new resort and Macao Studio City from Melco Crown Entertainment Ltd. MGM China Holdings Ltd and SJM Holdings Ltd are still waiting for approval to commence expansion plans in Cotai.

“If Macau is able to provide quick solutions … in this part of the world it will become a serious alternative for the area where there’s little or no facilities for corporate jets or where the operations are seriously compromised due to congestion,” said Mr Gomez.

Aircraft manufacturers expect aviation will boom right across Asia, matched only by investments in infrastructure to keep the industry aloft. “There is no indication to believe that what is on the order books of the manufacturers is not going to happen,” said Mr Gomez.

4 |

business daily May 25, 2012

macau Brought to you by

HOSPITALITY Visitors’ expenditure revisited Tourism receipts provide more than just academic interest. Spending by visitors is an important element of the revenues of many small- and medium-sized companies, mainly in the retailing and restaurant businesses. That mainland visitors are the biggest spenders is, of course, something that focuses the attention of businesses. Mainland tourists are the only ones spending more than the average – that is, they are pushing the average up.

The only exception was a brief period in 2010, when Japanese visitors also spent slightly more than the average.

Grant for exhibition of relic raises eyebrows Questions are being asked about a grant of 24 million patacas of public money for the exhibition of a Buddhist relic Tony Lai

tony.lai@macaubusinessdaily.com

2500 2300 2100 1900 1700 1500 1300 1100 900 700 500

Expenditure by visitors from Hong Kong and Southeast Asia has not fluctuated greatly over the period of our analysis. However, one interesting trend is in the spending of Taiwanese visitors. As the number of flights between Macau and Taiwan decreases and many “accidental” tourists in transit to the mainland are no longer showing up, the average expenditure of those that do make it to Macau is rising.

This seems to be a result of a change in the sample composition and does not necessarily show that visitors from Taiwan suddenly have an urge to spend more.

The rise in overall spending – 33 percent since the first quarter of 2010 – must also be viewed in the light of a notable increase in tourist prices. The tourist price index rose by 26 percent in the same period.

1900 1780 1660 1540 1420 1300

With inflation from the tourist price index removed, the figures are much less impressive.

Real expenditure actually fell for most of last year, driven down by a significant decrease in spending by mainland visitors. As a result, average expenditure in the most recent quarter was only about 6 percent more than it was at the beginning of the period.

J.I.D.

T

he Macau Foundation granted 24 million patacas (US$3 million) of public money to host a recent exhibition of a Buddhist relic but two members of the exhibition’s organising committee also help steer the foundation, raising questions about a conflict of interest.

A piece of the skull of Sakyamuni, the founder of Buddhism, was enshrined for public worship at the East Asian Games Dome from April 30 to May 4, and it attracted more than 150,000 visitors.

Secretary for Social Affairs and Culture Cheong U was the chairman of the committee that organised the exhibition.

Mr Cheong’s cabinet said the final details of the income and expenses of the exhibition had not been compiled as donations were still coming in from the private sector.

“The sponsorship of the Macau Foundation is the only public expenditure on the event so far,” the office said.

A spokesperson of the Buddhist Association of Macau told Business Daily that other institutions had pledged to also help the event but did not reveal if any of those were public bodies.

Susana Chou, a former president of the Legislative Assembly, wrote in her blog last month that she was concerned that two members of the exhibition’s organising committee also sat on Macau Foundation boards.

Ho Kuai Leng sits on the foundation’s board of directors and was the exhibition’s head of

general affairs. Angela Leong On Kei, who was a vice-president of the exhibition, is a member of the foundation’s board of trustees.

Ms Chou said the arrangement might arouse suspicions of a conflict of interest.

The Macau Foundation’s rules say any sponsorship of more than 6 million patacas must be backed by the board of directors and approved by least two-thirds of the board of trustees.

The foundation told Business Daily in a written reply that it “strictly complies with the regime of impediment”.

“One of the organising members of the above activity [the exhibition], who is also one of the members of Macau Foundation’s board of directors, did not have any intervention in the approval of the sponsorship.”

The foundation said it “sponsored 24 million patacas for the exhibition of Buddha’s parietalbone relic in Macau”.

Chui wields axe Ms Chou, who is also a member of the foundation’s board of trustees, said the board of directors had proposed a grant of 34 million patacas, with 14 million patacas for a “cultural banquet”.

Ms Chou wrote on her blog that she was “very much against the idea of lavishing public expenditure in organising a luxurious banquet”.

She also received an anonymous letter saying that the organising committee applied for a further 15 million patacas to invite Hong Kong singer

Wang Fei to perform at the event.

Ms Chou said Chief Executive Fernando Chui Sai On, the president of the foundation’s board of trustees, reduced the grant by 10 million patacas after hearing the opinions of the trustees in a meeting on April 10.

Mr Chui felt that it was difficult to decline the application for a grant, as the exhibition had been approved by officials in Beijing, but that it was not necessary to organise an “over-expensive” cultural banquet, Ms Chou said.

The relic had never been displayed outside the mainland until it was put on show in Hong Kong and Macau.

The member of Mr Cheong’s staff said that spending for the exhibition had been mainly on “receiving monks, officials, and guests from other places, transportation costs, and venue decoration and security expenses”.

The staff member said: “There is no relevant information about a banquet or a singer performance.”

The Macau Foundation said it had asked the exhibition’s organising committee to submit a report which should include “a detailed income and expenditure account” and that it had told the committee that it must return any unused sponsorship money.

Most of the foundation’s assets come from a slice of indirect gaming tax revenue, corresponding to 1.6 percent of gross gaming revenue.

In the first quarter of this year the foundation spent 106 million patacas on sponsorships.

With C.L.

May 25, 2012 business daily | 5

MACAU

La Scala buyers may become Ao victims Buyers of La Scala flats will find it difficult getting compensation if the government takes land back from Chinese Estates Vítor Quintã

vitorquinta@macaubusinessdaily.com

I

f the government were to take back the plot where La Scala is being developed, buyers of flats in the residential complex could find themselves out of pocket, lawyer Vítor Gomes has said.

However Mr Gomes said the government would probably not annul the sale of the land, even if it was proved in court that the contract of sale was the spawn of corruption involving Ao Man Long.

Prosecutors accuse Ao, the imprisoned former secretary, of taking a bribe of HK$20 million (US$2.6 million) from two Hong Kong businessmen, Joseph Lau Luen Hung and Stephen Lo KitSing, to show favour to a subsidiary of the developer of La Scala, Chinese Estates Holdings Ltd. “If this situation is taken to the extreme of the contract being revoked, people who signed a promissory transaction contract would have the right to compensation worth twice the down payment, according to the law,” Mr Gomes said.

Mr Gomes specialises in commercial and administrative law, and has been licensed to practise in Macau since 2007. He works with lawyer Nuno Simões who defended Ao in his first trial in 2007.

Secretary for Transport and Public Works Lau Si Io has said the government has yet to decide whether it will revoke the contract of sale.

“After the judges’ verdict, the government will review it and make decisions on the contracts involved,” Mr Lau said last week.

But he pointed out that 16 deals called into question by Ao’s first two trials for corruption have been revoked.

Formal charge Last month, Chinese Estates general manager of the sales division, Chung Chi Lam, was quoted as saying that 300 of the project’s 900 homes had been sold in the first four days of presales, for an average price of 7,200 patacas per square foot.

Mr Gomes said that if the government confiscated the land and the developer was unable to compensate all the buyers, then the buyers “would be left in a rather complicated situation”.

He said pre-sale buyers usually tried to pay as much as possible to get as big a discount as possible.

Mr Gomes said Chinese Estates would be unlikely to be able to claim compensation, in turn, from the five companies, all controlled by the government, that had sold it the land.

Four of the five companies were wound up in 2010.

“It seems to be it would not be able to ask for compensation, especially if its chairman is tried and sentenced for active corruption,” Mr Gomes said.

Chinese Estates confirmed yesterday that the Public Prosecutor’s Office has formally accused its chairman, Joseph Lau, of bribery and money laundering “in relation to the acquisition” of the La Scala land.

“Of course the company could argue that one thing is for its executives to commit a crime and a very different one is for the company itself to bribe someone,” Mr Gomes said.

But the lawyer believes such reasoning

With Chinese Estates chairman Lau formally charged for bribery, the future of the La Scala development is under a cloud

would find little sympathy in the courts.

“It’s obvious that if the executives committed corruption, it was for the benefit of the company,” he said.

Morally difficult Mr Gomes is confident the government will not take back the land.

“I’m sure they will go down the usual path and invoke ‘public interest’ to uphold the concession, in order not to harm the buyers, as well as to protect the image of Macau,” he said.

However, the lawyer said the same argument – that it is in the public interest – could be used to take back the plot.

“Morally, it would be difficult to justify not revoking the concession contract,” he said.

Last year the government granted another 3,900 square metres to Chinese Estates’ subsidiary Moon Ocean, while nearly doubling the construction area and lowering the cost per square metre.

The government said the land grant had been made in accordance with the law.

After suspending trading in shares for the whole session at the Hong Kong Stock Exchange yesterday, Chinese Estates and Mr Joseph Lau “strenuously” denied all allegations in a filing to the Hong Kong Stock Exchange.

The billionaire will continue leading the company but a special committee will be formed “to consider and handle all matters in relation to the accusation,” including “its potential impact … on the La Scala project”.

Dow Jones Newswires quoted Castor Pang, head of research at Core-Pacific Yamaichi International Ltd, as saying: “It is quite certain the court case would hurt the reputation of Chinese Estates, putting pressure on the share price”.

“However, it’s still unknown if the court will focus on [Joseph] Lau as an individual or [as] the chairman of Chinese Estates. The impact on Chinese Estates operations should be limited.”

6 |

business daily May 25, 2012

macau Brought to you by

International Banking Compiling international statistics is always a time-consuming task. When we deal with money, international flows turn out to be a bit difficult to grasp. Normalisation of procedures, classifications and criteria isn’t easy. International banking markets are of obvious interest in these globalised times.

The Bank of International Settlements has been trying to achieve standardisation with its Locational Banking Statistics guidelines.

They aim to “provide comprehensive and consistent quarterly data on the international banking business”. These include the assets and liabilities associated with non-residents, regardless of the currency, and the assets and liabilities of residents held in another currency. The Monetary Authority of Macau has just published statistics for the first quarter of this year.

Bids will be invited in the third quarter for the construction of almost 2,400 flats in Ilha Verde.

700000

Ilha Verde housing boom on horizon

600000 500000 400000 300000

Starts will be made this year on the construction of more than 3,000 public housing flats on three plots in the northwestern district of Ilha Verde

200000 100000 0

Kristy Chan

kristyc@macaubusinessdaily.com

Assets represent claims the banking system has on non-residents or on residents if the corresponding financial instruments are denominated in a foreign currency.

Conversely, liabilities represent claims on the banking system here by non-residents, in any currency, or by residents in a foreign currency.

Overall, there is a slightly positive balance. That is, the international assets of banks here exceed their liabilities. But the composition of assets and liabilities is neatly distinct. And, in the case of residents, liabilities almost double the amount of assets.

The geographical distribution also displays a neat asymmetry.

Although assets and liabilities are geographically concentrated in two places – Hong Kong and the mainland – their proportions vary significantly.

Portugal is a case in point. It has 10.6 percent of assets and just 2.6 percent of liabilities.

J.I.D.

T

he biggest public housing project on the peninsula will be in the Ilha Verde district, and bids for the construction of the first batch of homes will be invited in the third quarter of this year, the government announced yesterday.

The development will be on three plots and yield more than 3,000 flats.

It is the first project of the second phase of the public housing programme, after the 19,000 homes that the government pledged to complete this year.

The head of the Land, Public Works and Transport Bureau’s urban planning department, Lao Iong, said that initially the complex will have five residential buildings with a combined floor area of 15,240 square meters and 2,356 flats: 345 with one bedroom, 1,577 with two bedrooms and 434 with three.

Invitations to bid are expected to go out in the third quarter and the government hopes construction work will begin this year.

The development will have a public area and be connected with Avenida do Comendador Ho Yin, Avenida do

Conselheiro Borja, Avenida General Castelo Branco and Rua de Lei Pou. Mr Lao said the project would turn the area into “the biggest public housing community on the Macau peninsula”.

The flats will be complemented by social facilities with a combined floor area of more than 28,000 square meters.

Mr Lao said the government is giving thought to the public areas and the convenience of the residents as more than 10,000 people are expected to live in the community.

Facilities such as bus stops, a fivestorey car park, a public library, a home for the elderly, a nursery, an office of the Social Affairs bureau and a traditional Chinese medical clinic are planned.

Better economy The Ilha Verde centre for disaster victims will be moved to the new complex.

Mr Lao said a green, outdoor area of 4,000 square meters, to include sports facilities, would be built in the vicinity.

He said the development would improve the urban and the business environment in the city’s north.

The government hopes to attract more residents and tourists to Ilha Verde “for a better economy”.

Preliminary work on the first Ilha Verde plot began in the third quarter of last year.

The contractor is sinking the foundations. No schedule for the work has been announced This first plot will eventually yield 700 flats.

The chief architectural officer of the Infrastructure Development Office, Luís Madeira de Carvalho, said: “The project is currently still in evaluation as the scale is big.

The government will announce the completion date to the public as soon as possible”.

The public housing complex will cover an area that used to accommodate 1,450 shacks. The last shack was demolished in January.

In December 2010, Ilha Verde residents accused a developer of assaulting three members of one of the last remaining families in the former shanty town.

Weather Beijing 27/16o C Changchun 24/11o C

Harbin 22/11o C

Xian 27/15o C Shanghai 24/18o C Chengdu 25/17o C Kunming 27/17o C Haikou 31/24o C Sanya 31/25o C

Guangzhou 32/23o C

MACAU (21 May-26 May) Day

Temperature

Humidity

05/21

24/28o C

70/95 %

05/22

24/29o C

60/90 %

05/23

24/29o C

60/90 %

05/24

25/30o C

75/95 %

05/25

26/30o C

65/95 %

05/26

25/29o C

75/95 %

Shenzhen 31/24o C

ASIA (today)

Hong Kong 30/24o C

Manila

TOKYO

Jakarta

32/25o C

31/26o C

19/15o C

32/26o C

Macau 31/26o C

Bangkok

SEOUL

K. lumpur

34/28 C o

SINGAPORE

25/17 C o

35/26 C o

taipei

32/22o C

May 25, 2012 business daily | 7

MACAU

Jetco and UnionPay sign payments truce Two leading banking networks plan a streamlined cross-border banking service for consumers

C

hina UnionPay has bought a 3-percent stake in Joint Electronic Teller Services Ltd, Jetco, mainland media reported yesterday.

The sole bankcard organisation and only interbank network provider in the mainland will also partner Jetco in providing improved crossborder payment services. UnionPay will control the payment system in the mainland and Jetco will handle payments in Macau and Hong Kong.

The alliance means each company’s networks will recognise the other’s cards and both will implement the same standard.

Until 2006, Jetco and UnionPay users could withdraw small amounts of cash from the rival network’s automatic teller machines. After 2006, the companies ended the agreement, leaving Macau’s Jetco users without access to the UnionPay network.

The new alliance will also offer consumers a digital wallet providing Internet or mobile users with a convenient way to store and use online shopping information.

Wallets will be linked to the standard-issue bankcard and are expected be in circulation by the end of the year, Jetco has said. Customers can top up their wallets in Macau, Hong Kong or the mainland.

Jetco and UnionPay also want

Cross-border electronic peace

to expand into other areas such as mobile banking. A scheme to collaborate with telecommunications providers would permit consumers make payments or shop online through a mobile phone.

The service could expand into other

areas of daily life, such as paying for public transport.

Jetco was established in 1982 and has eight member banks in Macau and another 20 in Hong Kong.

UnionPay was launched in 2002 with the backing of the People’s Bank of China.

The mainland’s four major commercial banks, Industrial and Commercial Bank of China Ltd, Agricultural Bank of China Ltd, Bank of China Ltd and China Construction Bank Corp, were the first members.

X.C.

8 |

business daily May 25, 2012

macau

Ponte 16 backer chasing mainland’s first casino licence Barriers to gaming resort in Hainan ‘technical not political’ Associate Editor

H

ainan - China’s subtropical island province and playground for Chinese and Russian tourists – has a real chance of getting a casino, a conference session at the Global Gaming Expo at The Venetian Macao heard yesterday.

Hainan has approval in principle from the central government for one, said Hoffman Ma Ho Man, an investor in Macau’s Ponte 16 casino hotel resort.

“The casino licence has actually been approved for Hainan. It was five years ago. Hainan did all the studies, all the planning,” stated Mr Ma. “Then the provincial government came out and spoke to everyone that it was going to issue a casino licence. That’s when all the property prices went up.”

An English translation of Hainan’s ten-year-plan in 2010 stated it would “explore ways to promote local lottery and gaming industries”.

The use of that phrase ‘gaming industries’ was what got some analysts and commentators excited at the time. But a few weeks later Tan Li, the vice governor of Hainan province, issued a clarification to Chinese news agency Xinhua.

“Hainan will not follow Macau’s road. Our target is to turn into an all season garden for people across the world,” Mr Tan was quoted as saying.

But Mr Ma says the barriers to a casino on Hainan are more technical than political. “A condition of getting the casino licence is that the central government will not support Hainan [financially]. It gives 30 billion to 40 billion Rmb to Hainan per year. So Hainan would need to survive by getting the tax from the gaming,’ stated Mr Ma. Even assuming a gaming tax rate of around 40 percent – the same as Macau - a Hainan casino would

need to be turning over up to 100 billion yuan (US$15.8 billion) per year to cover the central government funding gap. That’s nearly half as much as Macau achieved last year with 34 casinos.

Realistic target “It’s do-able, considering it would be the first casino in mainland China,” said Mr Ma. Traditional Fan-Tan gambling houses existed across southern China in the 19th and early 20th centuries, but it wasn’t until the early 20th century that Western casino-style games were introduced legally and commercially to China - via Macau.

“The reason the Chinese government is aggressively considering all sorts of gaming opportunities is because the government knows there’s more than one thousand billion yuan revenue from underground [illegal] gaming [in China],” explained Mr Ma. It will be better for the government if they can see it, rather than having it underground. They could easily make it [a casino] an attraction for people all over Asia.

Finding land in China has never been a problem. In Macau it has been and is.”

Mr Ma is deputy chairman of Hong Kong-listed Success Universe Group. It is 49 percent equity partner with SJM Investment Ltd in Ponte 16, using a Sociedade de Jogos de Macau S.A. gaming licence. Mr Ma admits he has a commercial interest in talking up Hainan’s gaming prospects as he would like to bid to operate a casino there if the opportunity arises.

“I’m quite certain that if there is going to be a casino in Hainan, Macau operators are going to be prioritised,” he added later on the sidelines of the seminar titled ‘A Closer Look: The Chinese

Setting his eyes on Hainan

Gaming Market’. “Hopefully we will be one of the operators to be considered.” Mr Ma added it was unlikely for political reasons that a U.S. operator would be invited to Hainan even as a minority partner in a casino operation.

But a spokesman for the Hainan government told Business Daily: “The chairman of Hainan’s People’s Congress Wei Liu Cheng reiterated that Hainan is not looking at opening casinos or other gambling activities such as horse racing.”

Deutsche, JPMorgan Chase join Wynn Cotai loan – sources Wynn Macau goes to HK markets for US$1.5bn debt

W

ynn Macau Ltd has started marketing a US$1.5 billion loan to banks, according to a person familiar with the matter. It’s understood to be project finance for Wynn Cotai, the company’s planned new Macau casino resort, which received its land gazetting on May 2. The loan is split into a US$1 billion, five-year revolving credit facility and a US$500 million, six-year term loan, the person said, asking not to be identified because the details are private at this stage.

Wynn Cotai is expected to cost between US$3.5 billion and US$4 billion on completion – possibly in 2015. But a second finance industry source told Business Daily the strong cash flow from Wynn’s existing properties in Las Vegas and Macau probably made it unnecessary to raise more debt

– at this stage at least.

Deutsche Bank AG and JPMorgan Chase & Co. joined the loan prior to syndication with commitments of US$200 million each, the first source said yesterday.

The margin on both portions of the loan starts at 250 basis points (2.5 percent) more than the London interbank offered rate for the first two quarters, after which it will be based on a leverage ratio grid, the person said.

Court action Meanwhile Wynn Resorts Ltd has asked a judge in Las Vegas to dismiss Japanese billionaire Kazuo Okada’s claims challenging the forced redemption of his 19 percent stake in the casino company at an US$800 million discount.

Wynn Resorts and its board of directors said in a filing in federal court that Mr Okada’s securities fraud claims should be thrown out because they lack the basic requirements needed to argue that U.S. securities laws were violated by the redemption of his shares.

The filing is the latest in a clash between founder and chief executive officer Steve Wynn and Mr Okada, the man who helped bankroll Wynn Resorts starting 12 years ago.

Wynn Resorts accused Mr Okada of making improper payments to Philippines gaming officials, leading the board to declare him “unsuitable” and forcing him to redeem his shares in February.

Gaming law expert I. Nelson Rose commented on the series of Wynn-Okada lawsuits at a seminar organised this week

by Jorge Godinho, associate professor at the University of Macau’s Faculty of Law. Professor Rose said: “There’s a couple of strange little quirks in this. Wynn refused to let Okada see the [Wynn corporate] books. That’s the one part of the lawsuits that I think is really easy. Of course he [Okada] had the right to see the books. He was the major shareholder. I don’t understand any argument you can make that he didn’t have the right to see the books. The other issue was that when Wynn kicked Okada out, he gave him a promissory note for less than the full value of his [Okada’s] shares. I don’t understand that at all. I think I know what the theory is, but I don’t think that’s going to work [legally] either,” added Prof. Rose.

A.E./Bloomberg

May 25, 2012 business daily | 9

GREATER CHINA

China manufacturing contracts, slowing for seventh month HSBC Flash PMI falls to 48.7, seventh straight month below 50

C

hina’s factories faltered in May as export orders fell to two month lows, a private sector survey showed yesterday, suggesting surprise weakness in April’s hard economic data persists even as policymakers seek to shore up growth.

The HSBC Flash Purchasing Managers Index, the earliest indicator of China’s industrial sector, retreated to 48.7 in May from a final reading of 49.3 in April. It marked the seventh straight month that the index has been below 50, indicating contracting economic activity.

The figures signal that the sluggish economic conditions of the first quarter are set to continue throughout the first half of the year in China’s longest slowdown since the global financial crisis.

“Policymakers have been and will step up easing efforts to stabilise growth,” HSBC’s chief economist Qu Hongbin, wrote in a statement accompanying the PMI release. “As long as the easing measures filter through, China will secure a soft landing in the coming quarters.”

Factory output hit a seven-month high, building on a rebound of new orders in April. But new orders fell back in May’s flash survey with a sharp fall in new orders from overseas.

The new export orders sub-index dropped to 47.8 from April’s final figure of 50.2 – pushing it back to within a whisker of March’s 47.7 – according to data from Markit Economics Research, which publishes the index.

More spending The Chinese data weighed moderately on financial markets, although most focus was on the euro zone’s deepening debt crisis and the risk that Greece will leave the bloc.

A euro zone flash PMI fell in May to its lowest level since June 2009. German manufacturing was shrinking in May at its fastest pace in three years, data showed.

Premier Wen Jiabao has called for efforts to support growth, which is set to slowdown in the second quarter of this year for the sixth straight quarter.

Unexpectedly weak economic data for April released earlier this month was followed quickly by the central bank’s third cut since November in the amount of cash that banks must keep in reserve, to allow more credit to flow into the economy.

China’s key money market rate hit a 13-month low yesterday, implying there is plenty of liquidity but too little demand for loans.

“The recent required reserve ratio cut will at best make a marginal difference to lending by reducing funding costs for banks, and even then the economic benefits will be felt with a lag,” wrote Mark Williams and Qinwei Wang of Capital Economics, in a note published before the data. They argued that any turnaround would not be reflected in May’s PMI data.

Comments by Mr Wen that more priority should be given to “maintaining growth” and news that Beijing intends to fast track infrastructure investment “signal stronger stimulus in coming months,” they said.

Beijing also plans to boost private investment into areas previously

reserved for the state sector, including rail, hospitals and energy transport.

Still, Beijing has not budged on one of the fundamental causes of the slowdown in growth – stringent curbs on the real estate sector, which have starved private developers of funds and limited would-be buyers’ purchases.

The funding crisis for Chinese property developers is intensifying, ratings agencies Standard & Poor’s and Moody’s said yesterday, with builders facing spiking borrowing costs and limited ability to raise cash.

Since April’s data, economists have pushed back their forecasts for a recovery in China’s growth cycle and now expect the bottom to be hit in the second quarter, which would mark the sixth successive quarter of slowing growth.

They forecast China’s annual rate of growth would slide to 7.9 percent in the second quarter, down from 8.3 percent before the data, a benchmark Reuters poll showed.

They now expect 2012 growth of 8.2 percent, the weakest since 1999 but still comfortably above the government’s 7.5 percent target.

They had forecast 8.4 percent before the April data.

Reuters

KEY POINTS The HSBC Manufacturing PMI index has not been consistently above 50 since June 2011, although it is far above readings of the low-40s reached in late 2008 and early 2009.

The HSBC PMI has provided a contrast to the Chinese government’s official PMI, which hit a 13-month high of 53.3 in April The slowdown in China’s economic growth has rattled commodity markets, prompting falls in raw materials prices.

Stocks drop on PMI woes Hong Kong Hong Kong stocks fell for a second day after manufacturing data in China and Germany signalled the debt crisis in Europe is crimping global demand. Citic Pacific Ltd, a Hong Kong-based steelmaker with operations in iron-ore mining and property development in China, slid 1.4 percent. HSBC Holdings Plc, Europe’s largest bank, lost 1 percent. Renhe Commercial Holdings Co., a developer of underground shopping centres in China, slumped 21 percent after Mizuho Securities Co. reiterated its advice to sell the shares. The Hang Seng Index fell 0.6 percent to 18,666.40 at the close of trading. The gauge is heading for its third week of declines on concern Europe’s debt crisis could worsen amid political uncertainties and signs the economic slowdown in China is deepening. The Hang Seng China Enterprises Index of mainland stocks slid 0.3 percent to 9,541.33.

Shanghai China’s stocks also fell for a second day as the HSBC Holdings Plc’s survey showed the country’s manufacturing slowing and overshadowed a government pledge to boost infrastructure spending. The Shanghai Composite Index fell 12.46 points, or 0.5 percent, to 2,350.97 at the close, reversing an earlier 0.4 percent gain. The CSI 300 Index sank 0.8 percent to 2,595.26. The Bloomberg China-US 55 Index, the measure of the mosttraded U.S.-listed Chinese companies, added 0.1 percent in New York on Wednesday.

Thirty-day volatility in the Shanghai composite was at 15.11 yesterday, near the lowest in a week. About 8.5 billion shares changed hands in the gauge yesterday, 5.5 percent lower than the daily average this year.

Taiwan Taiwan stocks retreated from early gains and ended 0.32 percent lower yesterday, as the threat of a Greek exit from the euro kept investors wary of risk, with biotech counters and electronics component makers the main drags.

The main TAIEX index fell 22.86 points to 7,124.89, after opening up 0.17 percent. Biotech stocks shed 2.17 percent while electronics component makers lost 1.94 percent.

Taiwan’s dollar fell after the HSBC Holdings Plc and Market Economics signalled manufacturing in China contracted for a seventh month, dimming the outlook for exports.

Government bonds were steady.

The currency has declined 1.4 percent this month after official reports showed exports orders and industrial production shrank in April amid waning global demand.

The currency dropped 0.2 percent to NT$29.645 against its U.S. counterpart at the close, according to Taipei Forex Inc.

Factory output hit a seven-month high in April, but new orders fell back in May’s flash survey

10 |

business daily May 25, 2012

GREATER CHINA

China sharpens LME’s focus on HKEx Only two bidders remain; geography looking like the deciding factor Susan Thomas and Melanie Burton

InBrief HK short selling surges to 13-year-high Short-selling of stocks in Hong Kong surged yesterday to the highest level since 1999 amid concern Europe’s debt crisis will escalate. The ratio of total short selling by value on Hong Kong’s mainboard versus the shares traded reached almost 1-to-7 yesterday, the highest level since February 25, 1999, according to data compiled

by Bloomberg. The benchmark Hang Seng Index declined 0.6 percent yesterday. Futures on the Hang Seng Index slid 0.4 percent to 18,512, while the gauge’s volatility index rose 2.7 percent to 29.34.

Bidders guaranteed to keep LME’s operations unchanged

A

fast track into China could be the deciding factor in the race to win backing from shareholders in the London Metal Exchange, making Hong Kong Exchanges and Clearing’s bid enticing.

The London exchange has long sought to win approval from regulators in the world’s biggest metals consumer to list its warehouses nearer customers in the country which also accounts for 40 percent of copper consumption, Asian industry sources said.

InterContinental Exchange and HKEx are the last two on an original shortlist of four to buy the world’s biggest metals market place, after the exit on Tuesday of CME Group and NYSE Euronext the week before.

Both bids are just above the 1 billion pounds (US$1.57 billion) mark that the LME has been independently valued at. Both have also guaranteed to keep the 135-year-old LME’s operations unchanged, including its open outcry trading ring and its unique prompt-date system, sources said.

Geography matters A spokesman for the LME said it would be up to the exchange’s shareholder members who use the exchange to decide on a deal, if any. A spokesman for HKEx declined to comment.

The LME intends to present just one bid to shareholders, two sources said. But even though two bidders have dropped out, they could re-enter the fray at any point.

While ICE is believed to have put in a slightly higher offer for the LME, geography is looking increasingly like the deciding factor.

“ICE is effectively a European market, so anything they do will come with a swathe of bureaucrats known as the European Commission,” said one industry source in London who is a member of a LME shareholding company.

“With the massive disasters going on in Europe at the moment, I can’t imagine the buying and selling of the exchange will be

US$1.57 bln Close value of the bids from the Hong Kong Exchanges and Clearing and the InterContinental Exchange, the last two on an original shortlist of four high on the regulators’ list.”

And after its 2001 purchase of International Petroleum Exchange, now ICE Futures Europe, ICE closed its open-outcry trading pit.

It has an office in Singapore, and customers in Asia.

The European Commission blocked a US$7.4 billion tie-up between Deutsche Boerse and NYSE Euronext in February, scotching a deal that would have created the world’s largest exchange, arguing it would have given the combined group a near-monopoly in the worldwide market for European derivatives.

It took about a year to come to that conclusion.

Registration in China The LME is one of the last bastions of open outcry trading in its building located on Leadenhall Street in the City of London financial district.

Futures in metals including copper, aluminium, zinc, lead, tin and nickel still change hands in so-called ring trading, as well as electronically and by telephone.

“You’ve got one market that closed its open outcry, and then you’ve got another market which is in Hong Kong which is attached to China,” the source said.

“That will bring more representation in the time zone, more liquidity overnight, all these things come into play.”

Just as important, HKEx could be vital in persuading regulator China Securities and Regulatory Commission (CSRC) to win approval to list metals warehouses in China.

The LME approves and licenses warehouses around the world. As a market of last resort, industry can use the LME’s delivery option to sell excess stock in times of over supply and as a source of material in times of extreme shortage.

But its lack of warehouses in China is a big gap in its delivery network.

The LME was rebuffed by Chinese regulators about three years ago.

“Three years have passed, and the leadership, regulation and the market environment have changed,” Tiger Shi, head of metals at APAC Newedge, told Reuters.

“HKEx should be able to help the LME on the warehousing registration in China because I believe HKEx has a good relationship with CSRC in Beijing.”

But industry sources say a bid that provides a real opportunity to open up LME warehousing in China will still be looked on seriously by shareholders wanting to expand their footprint there.

“I think I detect a change in the breeze among shareholders,” said the first industry source.

“If the deal is that they will not fiddle about with the ring, the warehousing, and the date structure, I think most people will say it [HKEx] will bring more backing, and it could move the exchange to the next level.”

Reuters

KEY POINTS LME will present one bid to shareholders Bid that helps with China warehousing could win support HKEx could trump ICE on location, China access

CIC eyes US$2b stake in Alibaba Sovereign wealth fund China Investment Corp (CIC) is in advanced talks to buy an up to US$2 billion stake in Alibaba Group, sources told Reuters, as the Chinese e-commerce powerhouse looks to secure the last of the funding it needs to buy back part of its stake from Yahoo Inc. Yahoo and Alibaba struck a deal last week whereby the Chinese company agreed to buy back up to half of the 40 percent stake in itself held

by Yahoo for US$7.1 billion, valuing Alibaba at US$35 billion. Alibaba is raising US$4.6 billion of that target through an issue of preferred shares, bank loans and the sale of a stake to existing shareholders.

Delays hit first passenger jet China’s first passenger jetliner, the 90-seat ARJ21, is unlikely to get regulatory approval before 2013, an executive of its producer said yesterday. The delay could also disrupt the completion of a more ambitious effort to develop a 168-seat C919 jetliner aimed at breaking the global dominance of similar-sized aircraft

by Boeing Corp. and Airbus. Tian Min, chief financial officer of the state-controlled Commercial Aircraft Corp of China Ltd, said a final certification of the ARJ21 by Chinese regulators has been pushed back to 2013 from an original schedule for completion by 2008.

Svensk Exportkredit goes into dim sum Svensk Exportkredit AB hired HSBC Holdings Plc and TD Securities Inc. to help manage a sale of three-year so-called Dim Sum bonds, according to a person familiar with the matter.

The notes are being marketed to yield 2.4 percent, the person said, asking not to be identified because the details are private. Dim Sum bonds are yuan-denominated notes sold in Hong Kong.

May 25, 2012 business daily | 11

asia FDI in Vietnam

Rubber futures

Vietnam received US$4.51 billion in foreign direct investment (FDI) in the first five months of this year, 0.2 percent less than in the same period of 2011, a government agency said on Thursday.

Foreign investment pledges in the January-May period were estimated at $5.32 billion, a decrease of 32 percent from a year earlier. FDI, overseas remittances and aid money are key sources of foreign exchange for Vietnam. The country received about $11 billion in FDI in 2011, and it aims to match that figure this year.

Vietnam received US$4.51 billion in foreign direct investment (FDI) in the first five months of this year, 0.2 percent less than in the same period of 2011, a government agency said on Thursday.

Foreign investment pledges in the JanuaryMay period were estimated at $5.32 billion, a decrease of 32 percent from a year earlier. FDI, overseas remittances and aid money are key sources of foreign exchange for Vietnam. The country received about $11 billion in FDI in 2011, and it aims to match that figure this year.

Inflation under control Phillipines prices stable even has consumption grows

P

hilippine inflation will likely remain subdued in May, which bodes well for an economy heavily reliant on domestic consumption, central bank officials said on Thursday.

Governor Amando Tetangco said he expects annual inflation in May to be between 2.5 to 3.4 percent.

The low end of the range would be the lowest since September 2009, as lower oil, transport and utility prices may offset the impact of

higher food costs.

Annual inflation quickened to 3.0 percent in April, the first time the pace has picked up in six months, but the four-month average remained below the lower half of the central bank’s 3 to 5 inflation target for the year.

“Inflation is not really putting pressure on economic activity,” Assistant Governor Cyd Amador told reporters. “Consequently, the purchasing power of businesses and

consumers will not be eroded.”

Mrs Amador also reiterated the central bank will let market forces determine the foreign exchange rate, but said it may intervene to maintain orderly market conditions.

“We continue to tolerate foreign exchange flexibility, but we will temper sharp volatilities that could be destabilising to the economy,” she said.

The Philippines, where consumption makes up two-thirds of the economy,

Ban on poultry and eggs India and US at odds about American farming products

I

ndia blocked a U.S. request for the World Trade Organization to probe curbs on American farm goods such as poultry and eggs that the Obama administration says are discriminatory. India won’t be able to thwart a second request.

India says the ban, in place since at least February 2007, is designed to prevent the spread of lowpathogenic avian influenza, or bird flu. The U.S. argues that the ban is unjustified and says India has failed to provide scientific evidence in line with global standards on bird flu control.

Trade rules permit members of the Geneva-based WTO to adopt regulations to protect human, animal or plant life or health. However, such measures can’t be imposed to safeguard domestic industry and U.S. Trade Representative Ron Kirk has called the Indian ban “clearly a case of disguising trade restrictions by invoking unjustified animal health concerns.”

The National Chicken Council, the National Turkey Federation and the USA Poultry & Egg Export Council said in a joint statement on May 11 that India’s trade barriers deny U.S. exporters a potential market worth more than US$300 million a year “by conservative estimates.”

The complaint, initially filed on March 6, is the fifth initiated by the U.S. against India since the WTO was created in 1995. India has lodged eight complaints against the U.S. Reuters

is targeting growth of 5 to 6 percent this year after a 3.7 percent expansion last year.

Economic officials believed the goal is achievable, with domestic consumption expected to stay robust due to heathly remittance inflows from Filipinos working abroad and a benign inflation outlook.

Central bank data showed yesterday that business confidence improved for the fourth consecutive quarter in the April to June period as companies expect an increase in business activity and demand, higher state spending, and favourable macroeconomic conditions, among other factors “The increased confidence of business suggest a faster pace of economic expansion can be expected this year,” said Teresita De Veza, Acting Director at the central bank’s statistics department.

Tetangco told Reuters in an interview this month there was less need to support the economy with a pick-up in exports in recent months and higher state spending.

The central bank next reviews base interest rates on June 14. They are currently at an all-time low of 4.0 percent following two cuts totalling 50 basis points in January and March.

Reuters

12 |

business daily May 25, 2012

MARKETS Hang SENG INDEX PRICE

Day %

VOLUME

PRICE

Day %

VOLUME

AIA GROUP LTD

24.9

-1.968504

52941224

CHINA UNICOM HON

11.38

-2.401372

31842057

ALUMINUM CORP-H

3.23

0.310559

19628712

CITIC PACIFIC

11.06

-1.426025

4120886

BANK OF CHINA-H

2.84

0.3533569

297328285

CLP HLDGS LTD

64.15

0.4698512

1931206

BANK OF COMMUN-H

5.04

-0.9823183

27918453

CNOOC LTD

14.26

-0.140056

32920799

BANK EAST ASIA

26.4

-1.123596

3139054

COSCO PAC LTD

9.14

0.550055

4997217

TENCENT HOLDINGS

BELLE INTERNATIO

12.68

-2.909648

20261003

ESPRIT HLDGS

12.4

0.3236246

5933303

BOC HONG KONG HO

22.05

0.6849315

9008344

HANG LUNG PROPER

24.5

1.659751

5402044

CATHAY PAC AIR

11.98

-0.6633499

2178802

HANG SENG BK

100.7

0.7

927655

CHEUNG KONG

91.15

-0.109589

2652590

HENDERSON LAND D

37.85

-1.432292

2702925

CHINA COAL ENE-H

7.23

-0.1381215

19005333

76.5

-0.5847953

1655832

CHINA CONST BA-H

5.11

-0.5836576

253204186

18.32

0

6128814

CHINA LIFE INS-H

17.96

0.6347376

28865256

CHINA MERCHANT

23.05

0.2173913

1713660

NAME

CHINA MOBILE

NAME

HENGAN INTL HONG KG CHINA GS HONG KONG EXCHNG HSBC HLDGS PLC

109

-1.178604

2967246

62.15

-0.9561753

13365918

80

-2.319902

26561667

HUTCHISON WHAMPO

66

0.1517451

5178862

CHINA OVERSEAS

15.7

0

27502833

IND & COMM BK-H

4.63

-0.2155172

252348650

CHINA PETROLEU-H

7.06

-0.5633803

52550243

LI & FUNG LTD

14.7

0.6849315

17412653

CHINA RES ENTERP

24.7

-2.178218

2495451

MTR CORP

25.2

-0.1980198

1770512

NAME

PRICE

Day %

POWER ASSETS HOL

57.75

0.08665511

3620756

SINO LAND CO

10.68

-0.5586592

15925004

SUN HUNG KAI PRO

87.55

-0.9615385

3728399

82.1

-0.9650181

1183095

214.4

2.095238

4539592

TINGYI HLDG CO

20.1

0.6006006

9392410

WANT WANT CHINA

9.28

-4.231166

23001686

39.75

-1.119403

2449177

SWIRE PACIFIC-A

WHARF HLDG

MOVERS

15

30

VOLUME

3 19200

INDEX 18666.4 HIGH

19168.26

LOW

18657.52

CHINA RES LAND

13.62

1.946108

10419694

NEW WORLD DEV

7.98

-2.205882

22210760

52W (H) 23707.94

CHINA RES POWER

13.82

-0.4322767

2697369

PETROCHINA CO-H

10.08

-0.591716

41458379

(L) 16170.35

CHINA SHENHUA-H

27.75

-1.245552

14834517

PING AN INSURA-H

57.55

0

6640705

PRICE

DAY %

VOLUME

22.15

-1.116071

3748540

18600

22-May

24-May

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.16

-1.25

115514510

NAME

AIR CHINA LTD-H

4.69

-2.898551

20112740

CHINA PETROLEU-H

7.06

-0.5633803

52550243

ZIJIN MINING-H

ALUMINUM CORP-H

3.23

0.310559

19628712

CHINA RAIL CN-H

6.14

-1.286174

30788256

ANHUI CONCH-H

22.5

2.739726

24753064

CHINA RAIL GR-H

3.02

2.372881

65195648

BANK OF CHINA-H

2.84

0.3533569

297328285

CHINA SHENHUA-H

27.75

-1.245552

14834517

BANK OF COMMUN-H

5.04

-0.9823183

27918453

CHINA TELECOM-H

3.62

-0.2754821

55590114

BYD CO LTD-H

15.2

-4.522613

3122120

DONGFENG MOTOR-H

12.58

1.125402

11416050

CHINA CITIC BK-H

4.13

-1.196172

34220146

GUANGZHOU AUTO-H

6.39

0.9478673

5384148

CHINA COAL ENE-H

7.23

-0.1381215

19005333

HUANENG POWER-H

4.83

-1.02459

17681947

CHINA PACIFIC-H

CHINA COM CONS-H

7.2

0.1390821

20752071

IND & COMM BK-H

4.63

-0.2155172

252348650

CHINA CONST BA-H

5.11

-0.5836576

253204186

JIANGXI COPPER-H

15.96

-0.1251564

7376729

3.49

3.254438

23281422

PETROCHINA CO-H

10.08

-0.591716

41458379

17.96

0.6347376

28865256

PICC PROPERTY &

8.13

-0.1228501

10942708

CHINA LONGYUAN-H

4.61

2.672606

8894029

PING AN INSURA-H

57.55

0

6640705

CHINA MERCH BK-H

14.64

-0.8130081

21455819

SHANDONG WEIG-H

7.81

0.4247995

3668725

CHINA COSCO HO-H CHINA LIFE INS-H

NAME

PRICE

DAY %

VOLUME

12.82

-0.1557632

17519461

2.42

-1.626016

21308955

ZOOMLION HEAVY-H

10.86

0.5555556

22107771

ZTE CORP-H

15.02

-0.9234828

2771357

YANZHOU COAL-H

MOVERS

14

3

INDEX 9541.33 HIGH

9761.06

LOW

9500.91

CHINA MINSHENG-H

7.13

-4.037685

42545098

SINOPHARM-H

17.48

0.1145475

2561594

52W (H) 13317.51

CHINA NATL BDG-H

9.39

3.30033

98117497

TSINGTAO BREW-H

47.9

2.350427

941800

(L) 8058.58

10.42

3.578529

9783005

WEICHAI POWER-H

31.65

0

1783029

CHINA OILFIELD-H

23

9800

22-May

24-May

9300

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.65

0

35709596

DAQIN RAILWAY -A

7.47

-0.928382

26354069

SHANG PUDONG-A

8.85

-0.4499438

49757216

AIR CHINA LTD-A

6.07

0

12626727

DATANG INTL PO-A

5.12

-2.47619

4245312

SHANGHAI ELECT-A

5.51

1.660517

9721731

ALUMINUM CORP-A

6.78

-0.4405286

8236417

DONGFANG ELECT-A

21.43

-0.8329477

8078980

SHANXI LU'AN -A

26.77

-0.9985207

7984549

ANHUI CONCH-A

16.86

1.018574

53051365

EVERBRIG SEC -A

13.91

-0.3581662

15135281

SHANXI XINGHUA-A

75.59

-3.436382

2111588

BANK OF BEIJIN-A

9.79

-0.4069176

20603568

GD MIDEA HOLDING

13.41

-1.830161

22664493

SHANXI XISHAN-A

18.16

-0.110011

24861860

SHENZ DVLP BK-A

15.71

-1.628053

19407374

7.45

-0.5340454

24336948

15.52

0.9759271

1613034

-5.527124

113466342

NAME

NAME

NAME

3

0.3344482

10696477

GD POWER DEVEL-A

2.53

-0.7843137

24206848

BANK OF COMMUN-A

4.72

0.2123142

32530380

GF SECURITIES-A

31.67

-1.645963

6299993

SHENZEN OVERSE-A

BAOSHAN IRON & S

4.82

-0.4132231

12362518

GREE ELECTRIC

21.73

-1.002278

8363306

SINOVEL WIND-A

BBMG CORPORATI-A

7.93

0

14981921

GUIZHOU PANJIA-A

32.96

0.3959793

5660268

SUNING APPLIAN-A

9.23

BANK OF CHINA-A

24.15

-2.581686

3363244

HAITONG SECURI-A

10.18

-1.832208

58243907

TONGLING NONFE-A

21.72

0.4625347

13900986

CHINA CITIC BK-A

4.25

-0.9324009

17839072

HANGZHOU HIKVI-A

46.1

1.99115

1517139

TSINGTAO BREW-A

36.89

-0.2972973

1324668

CHINA CNR CORP-A

4.36

0.9259259

77504591

HEBEI IRON-A

2.97

-1

9886279

WEICHAI POWER-A

32.82

1.641375

9836760

CHINA COAL ENE-A

9.13

0.3296703

5922380

HENAN SHUAN-A

60.11

-2.970137

4199705

WULIANGYE YIBIN

32.59

-4.707602

58385276

BYD CO LTD -A

CHINA CONST BA-A

4.49

-0.2222222

19964849

HUATAI SECURIT-A

10.92

-2.5

17249883

XIAMEN TUNGSTEN

45.84

-0.174216

3839709

CHINA COSCO HO-A

4.92

-1.006036

7899533

HUAXIA BANK CO

9.86

0.1015228

24355179

XINJIANG GUANG-A

27.07

-0.03692762

11518004 12136710

CHINA CSSC HOL-A

31.52

0.7350591

8617175

IND & COMM BK-A

4.19

0.2392344

33521059

YANGQUAN COAL -A

19.01

-0.7310705

CHINA EAST AIR-A

4.1

0

11136529

INDUSTRIAL BAN-A

13.31

-1.334322

46660111

YANTAI CHANGYU-A

95.75

-1.895492

846454

CHINA EVERBRIG-A

2.96

0

27207881

INNER MONG BAO-A

43.4

0.3700278

47667469

YANTAI WANHUA-A

14.3

0.7042254

6817629

CHINA LIFE INS-A

17.56

-0.7348785

8759501

INNER MONG YIL-A

22.94

-1.163292

9355201

YANZHOU COAL-A

22.69

-0.4387889

3452752

CHINA MERCH BK-A

11.63

-0.9369676

46652779

INNER MONGOLIA-A

6.18

-0.9615385

50722191

YUNNAN BAIYAO-A

51.73

-0.5000962

1083412

CHINA MERCHANT-A

13.11

-1.50263

13368729

JIANGSU HENGRU-A

27.69

-0.5387931

1848497

ZHONGJIN GOLD

22.33

-0.2679768

5065215

CHINA MERCHANT-A

24.1

-0.7413509

11069652

JIANGSU YANGHE-A

164.88

-3.011765

1144463

ZIJIN MINING-A

4.05

-0.7352941

33413002

CHINA MINSHENG-A

6.4

-2.290076

149143078

CHINA NATIONAL-A

JIANGXI COPPER-A

25.57

-0.07815553

6733840

ZOOMLION HEAVY-A

10.48

1.648885

105266034

JINDUICHENG -A

13.82

-1.215154

4846038

ZTE CORP-A

15.48

-0.9596929

10986462

20.25

-0.2463054

10675001

220.24

-4.438756

5374347

40.62

-6.577737

31716060

6.25

-1.419558

35083571

CHINA OILFIELD-A

18.55

-1.013874

6589385

JIZHONG ENERGY-A

CHINA PACIFIC-A

KWEICHOW MOUTA-A

21.05

-0.1896633

7343610

CHINA PETROLEU-A

6.96

-0.4291845

20359222

CHINA RAILWAY-A

2.74

1.107011

47515029

METALLURGICAL-A

2.6

-0.3831418

9641442

CHINA RAILWAY-A

4.53

1.116071

39951837

NINGBO PORT CO-A

2.64

0.7633588

40684307

CHINA SHENHUA-A

25.98

0.1928268

17466283

PANGANG GROUP -A

7.78

-1.643489

30924361

9.51

-0.5230126

14202104

LUZHOU LAOJIAO-A

MOVERS

70

215

15 2650

INDEX 2595.26

CHINA SHIPBUIL-A

5.79

-0.1724138

34802712

PETROCHINA CO-A

CHINA SOUTHERN-A

4.68

1.079914

24057281

PING AN INSURA-A

42.04

-0.4027482

12527403

13.45

-1.175606

21907345

HIGH

2631.07

11.99

-1.235585

11555503

LOW

2588.71

CHINA STATE -A

3.33

-0.2994012

35444853

POLY REAL ESTA-A

CHINA UNITED-A

4.13

0.486618

41512386

QINGDAO HAIER-A

CHINA VANKE CO-A

8.92

-1.436464

28345060

QINGHAI SALT-A

32.1

-0.9564949

3727670

CHINA YANGTZE-A

6.71

-0.5925926

5934075

SAIC MOTOR-A

15.28

0

15109828

CITIC SECURITI-A

13.44

-1.176471

84187920

SANY HEAVY INDUS

14.74

1.375516

63845216

CSR CORP LTD -A

4.92

-0.6060606

51537184

SHANDONG GOLD-MI

33.43

-0.4763322

3553290

NAME

PRICE DAY %

Volume

PRICE DAY %

Volume

ACER INC

29.5 -0.5059022

13907119

FORMOSA PLASTIC

78.9 -0.1265823

5425405

TAIWAN MOBILE CO

97.4

1.458333

FOXCONN TECHNOLO

98.1

-2.38806

7864373

TPK HOLDING CO L

403

-1.104294

4689473

-1.215278

17562145

TSMC

80.6

1.896334

40984054

UNI-PRESIDENT

45.45

-0.87241

6214870

UNITED MICROELEC

12.55

-1.568627

66087428

39.15

-1.633166

19702822

12.7

1.195219

12754473

47.95 -0.7246377

4148969

52W (H) 3140.10 (L) 2254.56

2560

22-May

24-May

FTSE TAIWAN 50 INDEX NAME

ADVANCED SEMICON

27.05

-2.34657

23744561

ASIA CEMENT CORP

33.65

1.355422

2856455

FUBON FINANCIAL

28.45

ASUSTEK COMPUTER

283.5

0

6094057

HON HAI PRECISIO

85.3

-1.954023

31909070

AU OPTRONICS COR

11.9

0.4219409

34335405

HOTAI MOTOR CO

181

0.2770083

374100

NAME

PRICE DAY %

CATCHER TECH

180.5

1.120448

14127338

HTC CORP

430

1.775148

8979263

WISTRON CORP

CATHAY FINANCIAL

28.65

0.5263158

11610480

HUA NAN FINANCIA

15.8

0.3174603

6824711

YUANTA FINANCIAL

CHANG HWA BANK

15.2 -0.6535948

9301996

LARGAN PRECISION

564

1.438849

1833160

YULON MOTOR CO

CHENG SHIN RUBBE

71.6

0.4207574

2426669

LITE-ON TECHNOLO

34

-1.449275

8395640

12.05 -0.8230453

CHIMEI INNOLUX C CHINA DEVELOPMEN CHINA STEEL CORP CHINATRUST FINAN

21084961

MEDIATEK INC

256.5

1.383399

4567683

6.96

-1.276596

54967646

MEGA FINANCIAL H

19.95

-2.682927

41224858

28

0

15320577

NAN YA PLASTICS

55.6

-1.59292

7268424

16.25

-3.560831

63006271

PRESIDENT CHAIN

155 -0.3215434

CHUNGHWA TELECOM

91.4

0.109529

6055804

QUANTA COMPUTER

77.9

0.1285347

COMPAL ELECTRON

31.4

0.6410256

5773797

SILICONWARE PREC

30.1

-2.272727

7381841

DELTA ELECT INC

83.3

-5.340909

13438269

SINOPAC FINANCIA

9.59 -0.1041667

10323142

30.95 -0.8012821

7067959

SYNNEX TECH INTL

67.8

0.1477105

2257128

1.917404

3663018

TAIWAN CEMENT

32.7 -0.6079027

6782289

16.45 -0.9036145

13515186

FAR EASTERN NEW FAR EASTONE TELE FIRST FINANCIAL

69.1

TAIWAN COOPERATI

FORMOSA CHEM & F

78.6

0.3831418

5065157

TAIWAN FERTILIZE

FORMOSA PETROCHE

83.4

1.090909

1372719

TAIWAN GLASS IND

17.25

938447 14415132

0.2906977

4092613

66.7 -0.7440476

2629106

27.65

0.3629764

928247

MOVERS

22

26

5035

LOW

4897.34

5130604

2 5050

INDEX 4924.92 HIGH

Volume

52W (H) 6247.96 (L) 4643.05

4850

22-May

24-May

May 25, 2012 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GALAXy ENTErTAINMENT

MELCO CrOWN ENTErTAINMENT

MGM CHINA HOLDINGS

19.0

12.5

31.4

18.8

12.4

18.6

12.3

31.3

18.4

12.2

18.2 Max 18.78

Average 18.43

Min 18.18

Last 18.48

18.0

31.2

SANDS CHINA LTD

Max 25.75

Average 25.59

Min 25.40

Last 25.60

Min 12.08

Last 12.28

WyNN MACAU LTD 13.70

18.70

25.72

13.58

18.58

25.64

13.46

18.46

25.56

13.34

18.34

25.48

13.22

18.22

25.40

13.10 Max 13.62

Average 13.45

PRICE

WTI CRUDE FUTURE Jul12

90.14

0.266963293

-9.297645401

111.4899979

77.40000153

BRENT CRUDE FUTR Jul12

105.24

-0.303145131

-0.369213292

125.6100006

94.34999847

GASOLINE RBOB FUT Jun12

DAY %

YTD %

(H) 52W

Min 13.18

Last 13.42

18.10 Max 18.62

Average 18.41

285.53

-0.591860182

4.170010945

336.8899822

245.539999

892.5

-0.695410292

-0.778210117

1045.75

810

NATURAL GAS FUTR Jun12

2.728

-0.328827183

-14.26775613

5.09400034

1.981999993

280.49

-0.256036414

-1.440669033

331.5699816

256.0600042

Gold Spot $/Oz

1555.15

-0.2994

-0.6237

1921.18

1478.78

Silver Spot $/Oz

27.7603

-0.1697

-0.2684

44.2175

26.085

Platinum Spot $/Oz

1416.75

-1.0477

1.5956

1915.75

1339.25

Palladium Spot $/Oz

590.52

-2.5142

-9.6373

848.37

537.54 1955.75

LME ALUMINUM 3MO ($)

2009

-0.985707245

-0.544554455

2695

LME COPPER 3MO ($)

7531

-2.687685748

-0.907894737

9905

6635

LME ZINC

1879

-1.725941423

1.842818428

2539.5

1718.5

16755

-0.857988166

-10.44895778

25195

16550

15.12

0.331785003

-1.626545218

19.375

14.07500076

604.5

0.165700083

-8.582230624

795

572.25

3MO ($)

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

PRICE

(L) 52W

GAS OIL FUT (ICE) Jul12

Last 18.50

Min 18.14

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 %

0.9721 1.5665 0.9573 1.2546 79.39 7.9968 7.7637 6.3452 56.2413 31.63 1.2781 29.61 43.76 9426 77.167 1.201 0.80087 7.9636 10.0315 99.6 1.03

YTD %

-0.3588 -0.3879 -0.9193 -0.9161 -0.0252 0.0313 0.0335 -0.1655 -0.4202 -0.3794 -0.1095 -0.2229 -0.6444 -0.7108 0.3525 0.0083 0.5407 0.447 0.968 0.9036 0

(H) 52W

-4.7801 0.7849 -2.0056 -3.2019 -3.1238 0.035 0.0477 -0.7911 -5.6476 -0.2529 1.4475 2.2594 0.1828 -3.7874 1.6393 1.3147 4.0606 2.1422 3.1949 0.0602 0.0097

(L) 52W

1.1081 1.6618 0.9596 1.4697 84.18 8.0449 7.8113 6.494 56.3875 31.96 1.3199 30.716 44.35 9438 88.637 1.24736 0.90835 9.514 11.7768 117.9 1.0311

0.9388 1.5235 0.7071 1.2516 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 7.9406 10.0111 97.04 1.0288

MACAU RELATED STOCKS

WHEAT FUTURE(CBT) Jul12

669.75

0.638617581

-2.404371585

957.5

592.25

NAME

(H) 52W

(L) 52W

SOYBEAN FUTURE Jul12

1374.5

0.880733945

12.02118989

1512.5

1125.5

ARISTOCRAT LEISU

2.94

-0.3389831

33.63636

3.25

1.88

859630

COFFEE 'C' FUTURE Jul12

168.15

0.748951468

-27.58397933

290.75

165.0999908

CROWN LTD

8.56

-0.6960557

5.80964

9.29

7.45

2208186

PRICE

DAY % YTD %

VOLUME CRNCY

SUGAR #11 (WORLD) Jul12

19.53

0.102511533

-13.43085106

27.02999878

19.3599987

AMAX HOLDINGS LT

0.079

0

-9.1954

0.131

0.06

1683500

COTTON NO.2 FUTR Jul12

73.05

2.153544959

-19.99780966

117

70.52999878

BOC HONG KONG HO

22.05

0.6849315

19.83696

24.45

14.24

9008344

CENTURY LEGEND

0

World Stock MarketS - Indices NAME

0.233

0

1.304346

0.41

0.204

CHEUK NANG HLDGS

3.02

0

7.857145

4.79

2.3

0

CHINA OVERSEAS

15.7

0

20.95532

17.86

9.99

27502833

CHINESE ESTATES

9.82

0

-21.44

14.1

9.71

0

CHOW TAI FOOK JE

9.62

-3.992016

-30.8908

15.16

9.6

7964400

EMPEROR ENTERTAI

1.16

-1.694915

4.504503

2.09

0.97

135000

FUTURE BRIGHT

0.86

0

104.7619

1.09

0.3

1917600

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

US

12496.15

-0.05326803

2.280249

13338.66016

10404.49

GALAXY ENTERTAIN

18.48

0.7633588

29.77528

24.95

8.69

20686832

NASDAQ COMPOSITE INDEX

US

2850.12

0.3888584

9.403306

3134.17

2298.89

HANG SENG BK

100.7

0.7

9.278349

125

84.4

927655

FTSE 100 INDEX

GB

5286.83

0.3877404

-5.122674

6084.08

4791.01

HOPEWELL HLDGS

20.25

-0.2463054

1.963743

24.903

18.56

530844

DAX INDEX

GE

6268.97

-0.266953

6.283454

7523.53

4965.8

HSBC HLDGS PLC

62.15

-0.9561753

5.338983

82.15

56

13365918

NIKKEI 225

JN

8563.38

0.07923708

1.277656

10255.15

8135.79

HANG SENG INDEX

HK

18666.4

-0.6376493

1.25857

23707.94922

16170.35

CSI 300 INDEX

CH

2595.26

-0.8257578

10.63706

3140.102

2254.567

TAIWAN TAIEX INDEX

TA

7124.89

-0.3198209

0.7467401

9089.47

KOSPI INDEX

SK

1814.47

0.323451

-0.617285

S&P/ASX 200 INDEX

AU

4055.848

-0.2750653

ID

3968.36

FTSE Bursa Malaysia KLCI

MA

NZX ALL INDEX

NZ

JAKARTA COMPOSITE INDEX

PHILIPPINES ALL SHARE IX

12.0

25.80

NAME

CORN FUTURE

Average 12.19

CURRENCY EXCHANGE RATES

HEATING OIL FUTR Jun12 METALS

Max 12.32

SJM HOLDINGS LTD

Commodities ENERGY

12.1

No transactions. Closing price on may 23.

PH

HUTCHISON TELE H

3.71

1.36612

24.08027

3.71

2.15

4509545

LUK FOOK HLDGS I

18.1

2.957907

-33.21033

46.15

16.56

1921001

MELCO INTL DEVEL

6.4

1.587302

10.91854

10.76

4.3

1521005

MGM CHINA HOLDIN

12.28

0.6557377

28.0213

17.183

7.6

5617000

6609.11

MIDLAND HOLDINGS

3.73

2.472527

-7.673266

5.48

2.95

2030007

2192.83

1644.11

NEPTUNE GROUP

0.096

-1.030928

-13.51351

0.157

0.08

2810000

-0.01756775

4724.8

3765.9

NEW WORLD DEV

7.98

-2.205882

27.47603

12.381

6.13

22210760

-0.3319789

3.82963

4234.734

3217.951

SANDS CHINA LTD

25.6

0.7874016

16.6287

33.05

14.9

16848023

SHUN HO RESOURCE

1.18

0

18

1.32

0.82

0

1547.48

0.5046405

1.094249

1609.33

1310.53

SHUN TAK HOLDING

2.7

-1.818182

5.504676

4.686

2.241

3746815

782.092

-0.4476782

7.165205

814.431

700.441

SJM HOLDINGS LTD

13.42

1.820941

7.312473

20.711

10.079

9651298

SMARTONE TELECOM

14.88

3.333333

10.71429

18.5

9.8

1943302

WYNN MACAU LTD

18.5

1.314348

-5.128205

27.48

14.807

6910102

3284.95

-0.2162773

7.878711

3518.96

2695.06

HSBC Dragon 300 Index Singapor

SI

525.7

-2.23

5.92

na

na

ASIA ENTERTAINME

4.37

-5

-25.68027

10.8692

4.2401

63328

STOCK EXCH OF THAI INDEX

TH

1108.31

-0.2151796

8.09407

1247.72

843.69

BALLY TECHNOLOGI

44.7

-0.8429459

12.99292

49.32

24.74

573944

HO CHI MINH STOCK INDEX

VN

426.92

-2.250716

21.43935

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

2.41

-3.6

28.87701

3.24

1.08

6540

INTL GAME TECH

13.99

-1.61744

-18.66279

19.15

13.38

4525590

JONES LANG LASAL

72.41

1.004324

18.20111

99.89

46.01

266393

LAS VEGAS SANDS

48.17

0.6477225

12.7311

62.09

36.08

10971975

MELCO CROWN-ADR

12.07

-0.9844135

25.46778

16.15

7.05

7268702

MGM CHINA HOLDIN

1.66

0

39.2976

2.21314

1.00254

4000

MGM RESORTS INTE

10.77

0.4664179

3.259824

16.05

7.4

8560138

SHUFFLE MASTER

15.45

1.112565

31.82594

18.77

7.35

295279

1.76

0

9.481823

2.60368

1.26239

7355

103.66

0.4944256

-6.181553

165.4931

98.26

1921404

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

SJM HOLDINGS LTD WYNN RESORTS LTD

AUD HKD

USD

Contact Information

ONE YEAR Suscription REGULAR 1,560 Mop 20% discount 1,150 Mop

First Name (Mr/Mrs/Ms)

Last name

Address Postal Code

Country

Phone Fax Email

Payment

Subscription Period: from

(yy)|

(mm)|

to |

(yy) |

(mm) |

I wish to pay by Cheque or Direct Deposit

Make payable to De Ficção-Projectos Multimedia

Banco Comercial de Macau (BCM) Acct# 1099732111

Make payable to De Ficção-Projectos Multimedia Limitada

Banco Nacional Ultramarino (BNU) Acct# 9008096687

Visa Master Card American Express Credit Card

Account Number

Expiration Date mm

Cardholder’s Name

yy

CVV2/CVC2

14 |

business daily May 25, 2012

Opinion

The diplomacy option

Christopher R. Hill

Former US Assistant Secretary of State for East Asia, Dean of the Korbel School of International Studies, University of Denver

A

senior Russian diplomat, in contrasting North Korea and Iran, once said to me: “The North Koreans are like neighborhood children with matches. The Iranians are who we really need to worry about.”

Whether the talks between the “P5 + 1” (the United Nations Security Council’s five permanent members and Germany) and Iran, which concluded in Istanbul on April 14 and resumed in Baghdad on May 23, have any chance of succeeding remains highly uncertain. The smart money is most likely being wagered on failure. But those of little faith need to understand a basic, but sometimes-elusive point about such negotiations: they are conducted for two purposes.

The first purpose is, of course, to persuade the country in question to come around to others’ views. But negotiation must also demonstrate that everything that could be done has in fact been done before further steps – especially the highly risky and fraught decision to take military action – are considered.

Military measures require broad international acceptance, and that condition can be met only in a context of good-faith efforts at diplomacy.

Diplomatic timing Effective diplomacy is not just about

substance; it is also about timing and sequencing. Those who support a military solution to the problem of Iran’s nuclear aspirations, without first supporting diplomacy and economic measures of the kind currently being implemented against Iranian exports, miss that point. Few serious political leaders today argue the case for war.

Those who do have succeeded only in driving up the price of oil, as markets, fearing the likely effect of military action on the region, respond to Iran’s bellicose reactions.

There has been another avenue to cutting short diplomacy with Iran: Israel, which would lie within range of a nuclear-armed Iranian missile, and therefore is most threatened

by that prospect. Being willing to fight to the last Israeli is a familiar pattern for those disinclined to take risks themselves. But to encourage Israel to do what others with far greater means are not prepared to undertake is to expect a great deal of a small country in the Middle East with problems far and wide, most notably among its neighbors.

Israel, after all, has watched the political developments in Egypt not with hope, but rather with growing alarm. The Israelis also see with greater clarity than many in the world the nature of the likely successor regime in Syria (hint: it will probably not be comprised exclusively of Facebook and Twitter users).

While it is true that many Arab states

To advocate military action out of sequence with other efforts, even if those efforts’ odds of succeeding are very long, is to ask a lot not only of the countries that are supposed to support it, but, more importantly, of the men and women who must wage it

worry night and day about a nuclear Iran, they are singularly unlikely to support military intervention by Israel. After all, this is the Middle East, where, as the old joke goes, the scorpion stings the camel carrying it across the Suez Canal, knowing that they will both drown.

War steps War is a serious means toward serious ends, as Carl von Clausewitz observed almost 200 years ago. Countries that have suffered it firsthand know better than many its painful effects on subsequent generations. It is, after all, the human endeavor most associated with unintended consequences.

To advocate military action out of sequence with other efforts, even if those efforts’ odds of succeeding are very long, is to ask a lot not only of the countries that are supposed to support it, but, more importantly, of the men and women who must wage it.

The proper sequencing of steps in dealing with world trouble spots is essential to gaining international support for further action. The air campaign that ultimately succeeded in breaking Slobodan Milošević’s grip on Kosovo (and later his grip on Serbia proper) was made possible by prolonged diplomacy on the part of the United States, the European Union, and Russia.

No one at the time tried to argue that peace was not given a chance, which is why advocating a quick end to diplomacy when it is judged unlikely to achieve anything is often a mistake. Many countries will be unlikely to support a military solution until they have seen genuine efforts at other means of persuasion (and coercion) fail.

Even if no military option is contemplated for the future, negotiations can pay other dividends.

On the eve of the start of the sixparty talks aimed at disarming North Korea, many opinion surveys in South Korea showed a substantial percentage of the public there blaming the US for the North Korean nuclear threat. While the six-party process has fallen well short of ending the threat, it has virtually eliminated efforts to blame the US as the culprit.

Iran’s nuclear aspirations are a problem that, if not resolved, could lead to dangerous escalation, as countries such as Saudi Arabia, Turkey, the US, and Israel review their options. But these options will become much clearer and more sustainable if the diplomatic track is carefully explored first. © 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.

Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com

May 25, 2012 business daily | 15

OPINION How rich economies must adapt wires to tomorrow’s job market Business Leading reports from Asia’s best business newspapers

Business Times (Singapore) The National Wages Council’s has issued yesterday its 2012/13 wage guidelines, suggesting that the pay of low-wage workers should rise by at least 5 per cent this year. “For workers earning a salary of up to US$1,000, the built-in wage increase [should] be at least $50,” it says. However, companies that are doing well are encouraged give a larger increase.

Business Times (Malaysia) AirAsia shares rose to US $1.1 yesterday after the low-cost carrier posted results for the first quarter that ended on March 31, 2012. The company’s pretax profit rose to RM212.41 million in the first quarter from RM202.87 million yearon-year while its revenue increased to RM1.17 billion from RM1.05 billion. The results were line with its expectations according to financial analysts.

India Business Review Thomas Cook will sell its stake in its India arm to the Fairbridge Capital (Mauritius), a subsidiary of Fairfax Capital Holdings.

The entire 77 percent stake has been sold for 8.2 billion rupees (US$ 145.7 million), and the shares have been valued at 50 rupees each.

Thomas Cook will allow Fairbridge to use the group’s name for 12.5 years in the countries in which the company operates.

The Japan Times Mazda Motor Corp. said yesterday it would form a business tie-up with Italy’s Fiat. The automaker has been seeking a new partner as it reduces its ties with troubled Ford Motor Co., which was once its largest shareholder.

Fiat has been seeking sought business partners outside of Europe. Under the planned cooperation, Mazda will develop and manufacture a new Mazda Roadster two-seater sports car, for its own and Fiat’s Alfa Romeo brand.

Clive Crook Paula Dwyer Bloomberg editors

T

he worsening crisis in Europe and the slow recovery in the U.S. are distracting attention from a longer-term problem.

Across the developed world, well-paid jobs in the middle of the labor market are in decline. The issue isn’t simple, nor are the remedies, but governments must start paying attention.

The name for what’s going on is job polarization. Wages at the top are still rising, and at the very top they’re rising fast. Wages in a lot of menial and low-skill occupations are at least holding their own.

But as research by David Autor, an MIT economics professor, and others has demonstrated, earnings in the middle of the labor market have been falling for years.

This issue is distinct from the heated debate over structural versus cyclical unemployment. To the extent that the U.S.’s 8.1 percent unemployment is structural — because people have the wrong skills or are living in the wrong place and can’t move — increasing demand through fiscal or other stimulus won’t work. To the extent it’s the result of cyclical changes in the economy, adding to demand is the answer.

Structural unemployment has always been lower in the U.S. than in other advanced economies, thanks to its famously flexible labor market. In this recovery, however, long-term unemployment has surged, and many workers have dropped out of the workforce altogether. If structural unemployment is rising, that’s grounds for concern.

Hollowing Out But job polarization — which began long before the recent recession — is a worry in its own right. The issues are connected: both involve matching workers’ skills and employers’ needs. But job polarization is more about the structure of employment and less about the characteristics of the unemployed.

Look at it this way: at full employment, declining earnings in the middle of the labor market will still be a problem.

The main cause of this hollowing out is technology.

Tasks such as cleaning a house or mowing a lawn aren’t easy to automate — and because that kind of manpower is cheap to begin with, there’s little incentive. At the other end of the scale, advanced human skills are still needed to design software, play professional basketball or negotiate a corporate merger. Those tasks can’t be automated either.

But in the middle is a swath

Maybe the biggest change demanded by job polarization is a rethinking of the idea of careers for life. In the future, people may need to plan and prepare for multiple careers

of tasks where automation is feasible and wages are getting squeezed.

Computers are very good at skilled-but-routine tasks, and getting better all the time.

Cheaper, too. Add the surge in high-bandwidth telecommunications, and you have what amounts to a new industrial revolution. But this time, good middle-income jobs, not muscle-power on farms or in factories, are under assault.

There are only two ways to respond. You could try to slow down the revolution, which would be a formula for economic decline, or help people adapt, which would spread the revolution’s benefits more equitably. The second is the right way to go. The catch is that the policy prescriptions aren’t simple.

A finding emphasized by Autor and others is that the labor market still rewards going to college, and in fact the so-called college premium has lately increased. Since the mid-1980s, demand for college graduates has been running ahead of supply. Getting more people through college will bridge

the gap, and equip more workers for tasks that require human talent.

College Completion Making sure people who start college finish with a degree is at least as important as getting more to start college in the first place.

Completion rates in the U.S. have fallen, especially for men — a main cause of the lagging supply of graduates.

One of the worst things you can do for your standard of living is go to college, borrowing heavily to do so, then drop out.

To improve completion rates, high schools must do a better job of preparing students for higher education. Good work habits and proficiency in reading and basic math are the sine qua non of a successful college experience.

That shouldn’t need saying, but colleges complain that high schools are failing to deliver. And here’s an issue that’s been especially neglected: better advice so that students can match themselves more skillfully to college courses and jobs.

Pushing more people through

college will help, but it has limits. A surge of college graduates in the 1970s caused relative wages to fall. And there are signs that the college premium is itself flattening in the middle, while growing steeper at the top.

College graduates do better in the labor market than those with less than a four-year degree, but not nearly as well as those with the right kind of degree. This underlines the importance of matching, both of aptitudes to disciplines and of disciplines to careers.

Maybe the biggest change demanded by job polarization is a rethinking of the idea of careers for life. In the U.S. and other countries, this is still very much the cultural norm: you train for one thing and do it for 40 years, gaining seniority through experience and on-the-job training. The pace of change, together with the fact that working lives (through choice or necessity) are lengthening, is making this model obsolete.

In the future, people may need to plan and prepare for multiple careers. Adaptability must become a frame of mind — and schools and colleges must themselves adapt to this need. The economy will continue to demand labor, and an increasingly productive economy will be able to pay better wages. But matching people to jobs will need to be done more quickly and with greater flexibility.

Education in the U.S. and other advanced economies faces a new and far-reaching challenge. The worker of the future needs to be trained to be trainable.

Bloomberg View

16 |

business daily May 25, 2012

CLOSING Poland rates up

Recapitalizing Greece

Poland raised interest rates this month because sustained high price growth and negative real interest rates could spur inflation expectations, while data suggest a limited economic slowdown this year, minutes from the Monetary Policy Council’s May 9 meeting published today on the Warsaw-based Narodowy Bank Polski’s website showed. “Some members of the Council assessed that it might be necessary to adjust the NBP interest rates again” in order to curb inflation expectations, the minutes said. A minority of the rate-setting panel opposed the May rate increase, arguing that tightening should be delayed.”

Greece’s central bank chief said 18 billion euros in recapitalization funds for the country’s banks will be disbursed over the next two working days. A return to growth depends on a successful recapitalization, state-asset sales and more effective use of European Union funds, all factors which have been delayed, George Provopoulos, the governor of the Bank of Greece, said in a meeting with President Karolos Papoulias in Athens yesterday. The banks’ funds will be received by Monday at the latest, he said. Mr Provopoulos said deposits should begin returning to Greek banks.

U.S. unemployment easing Labour market conditions expected to improve slowly

N

ew U.S. claims for unemployment benefits fell slightly last week, government data on Thursday showed, suggesting the labor market continues to expand at a moderate pace.

Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 370,000, the Labor Department said. The prior week’s figure was revised up to

372,000 from the previously reported 370,000.

Economists polled by Reuters had forecast claims unchanged last week.

The four-week moving average for new claims, considered a better measure of labor market trends, dropped 5,500 to 370,000.

Claims have barely budged in the past four weeks indicating a marginal improvement in the

pace of job creation after April’s disappointing 115,000 gain in nonfarm payrolls.

A Labor Department official said there was nothing unusual in the state-level claims data and no states had been estimated. The number of people still receiving benefits under regular state programs after an initial week of aid fell 29,000 to 3.26 million in the week ended May 12.

The so-called continuing claims data covered the week for the household survey from which the unemployment rate is derived.

The jobless rate dropped to 8.1 percent in April from 8.2 percent the prior month, but mostly as people gave up the hunt for work.

While more states are losing eligibility for extended benefits for the long-term unemployed, that is not yet being fully captured in the claims data as the figures are reported with a time lag .

Economists expect that as more people fall off the unemployment benefit rolls, that will artificially push down the jobless rate. Out-ofwork people not receiving benefits are not obliged to be actively looking for work, a key criteria to be counted as unemployed.

The number of people on extended benefits dipped 4,800 to 299,955 in the week ended May 5, the latest week for which data is available. Only 15 states and the District of Columbia were offering extended benefits during that period. There were 2.63 million Americans receiving emergency unemployment checks during that period, down 35,500 from the prior week.

A total of 6.17 million people were claiming unemployment benefits during the week ending May 5 under all programs, down 105,004 from the previous week.

Reuters

Uncertainty weakens the Euro Germany’s PMI drops on exports slowdown

T

he euro hit a 22-month low and safe-haven German bonds achieved record low yields, after data showed Europe’s economic woes worsening as business confidence is undercut by talk of a Greek exit and slow progress in tackling the debt crisis.

Private-sector factory activity in China also faltered in May as demand for exports fell, in a sign the impact of the euro zone crisis could be undermining global economic recovery. Europe is China’s largest export market.

The darkening economic outlook spurred the dollar on Thursday to a 20-month high against other major currencies, but shares staged a modest rebound after a late-day reversal in the United States encouraged some

bargain hunters.

The key reading from the latest round of Markit Purchasing Managers Indexes (PMIs) was a fall in Germany’s factory sector, which was hit by a drop both in exports and new orders for goods.

In addition, German business sentiment dropped for the first time in seven months, missing even the most conservative forecasts, according to the Munich-based Ifo think tank.

“Companies are now reacting to the increased uncertainty out there. And that’s not going to abate,” Andreas Scheuerle, an economist at DekaBank.

The PMI data for the euro area showed activity was declining at a faster pace than expected in May, which was seen as confirmation that a downturn started in smaller

periphery members is taking root in the core countries of Germany and France, whose tepid growth had been keeping the troubled bloc afloat.

“It’s a message to EU policymakers that the situation is not as good as they describe it,” Lloyds Bank strategist Achilleas Georgolopoulos said.

Reuters