Macau Business Daily, 28 May, 2012 by Business Daily

Year I - Number 41 - Monday May 28, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

Chou wants 3rd debate on political reform PAGE 3

Austerity Portugal ‘not forgotten’ Macau PAGE 6

BAN OFF-DUTY STAFF FROM ALL CASINOS - UNION T he president of the Macau Gaming Industry Employees’ Association wants the city to follow Singapore’s example and ban local casino staff from entering any gambling hall when off duty. At present workers are

Chui awaits court’s verdict on La Scala

only barred from entering their own employer’s establishments. João Bosco Cheang Hong Lok told Business Daily that gaming workers are at higher risk than other locals of becoming problem gamblers. They’re exposed to gambling for eight hours every working day. “The gambling atmosphere and the winning atmosphere may lead them to lose their way. It is so attractive to their hearts, that they can win more money, because they spend a lot of time seeing this. It is easier for them to get into gambling problems,” said Mr Bosco. He said an important step in preventing casino staff getting into money troubles with gambling – and possibly becoming vulnerable to illegal moneylenders and pressure from criminals – was to give them

outside interests. “They are working shifts, so they cannot meet their friends and families. We should provide and help build up different interests, which is much better than having nothing to do. It’s because they have nothing to do, that they just go gambling. So, we hope that we can open some leisure courses for them,” he said. He urged the Macau government to follow Hong Kong’s example with a public awareness campaign on gambling addiction. “In Macau, we’ve got 34 casinos and we don’t have enough advertisements to remind gamblers [to be cautious when playing]. We want the government to do something more.”

Workers off menu in eatery boom PAGE 8

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Tam estimates ‘conservative’gaming growth for 2012

Macau’s Chief Executive Fernando Chui Sai On says the government will wait for a court ruling on the La Scala land swap deal before acting. He neither confirmed nor ruled out the possibility of the government taking back the land. Prosecutors allege jailed former secretary for Transport and Public Works Ao Man Long took a HK$20-million bribe from two Hong Kong businessmen before approving the site plans.

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Macau’s Secretary for Economy and Finance said yesterday the government had been deliberately cautious with its estimates on monthly gaming revenues for 2012. Speaking in Cantonese to reporters at Macau Airport before flying to Beijing for talks with the central government, Francis Tam Pak Yuen said: “In 2012, we estimate the monthly gaming revenue on average is 20 billion [patacas]. Compared to the actual growth of last year, this [figure] is a conservative estimation.” PAGE 3

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Graff upbeat on US$1b IPO Graff Diamonds is planning to expand its business in Asia in the next two years after a US$1 billion initial public offering in Hong Kong. The London-based jeweller is preparing to double the number of directly owned stores globally and plans to open the first of two stores in Macau within this year. Graff plans to start trading on June 7. Sale of watches and jewellery in the city reached 4 billion patacas in the first quarter of 2012, accounting for 31 percent of total retail sales. Page 16

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CNOOC LTD

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PING AN INSURA-H

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CHINA UNICOM HON

-2.11

TINGYI HLDG CO

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POWER ASSETS HOL

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Source: Bloomberg

Free-trade future for Hengqin

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Hengqin Island is to be a free-trade zone for the Pearl River Delta, enjoying import duty exemption in a clutch of preferential policies. A seminar sponsored by the Financial Services Bureau and the Association of Chartered Certified Accountants heard imports to the island will be duty-free as long as they do not include day-to-day consumer products, construction materials for commercial property development or other restricted goods. PAGE 7

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business daily May 28, 2012

Photo by Manuel Cardoso

macau

HK$9.09 Chinese Estates Holdings nominal price at Friday’s close

Flats at La Scala were being sold as recently as last week, although the land deal is under a legal cloud

Chinese Estates shares tumble amid probe Chief Executive Chui says government will wait for court ruling on La Scala land swap deal before acting Tiago Azevedo

tiago.azevedo@macaubusinessdaily.com

hares of Hong Kong developer Chinese Estates Holdings Ltd have slumped 15.8 percent since April 16, the day the third trial of former secretary for Transport and Public Works Ao Man Long got underway. Chinese Estates’ share price slid 7.4 percent on Friday when trading resumed after the company said its chairman and chief executive Joseph Lau Luen Hung would face prosecution over alleged bribery and money laundering linked to the most recent Ao trial. Mr Lau, ranked fifth on the Forbes Hong Kong Rich List with a fortune of US$6.5 billion (51.9 billion patacas), held 75 percent of the shares in Chinese Estates as of March 23, according to Reuters.

Joseph Lau has ‘strenuously’ denied all allegations and will continue leading Chinese Estates Holdings

Trading in Chinese Estates shares was suspended in Thursday’s session at the Hong Kong Stock Exchange. On Friday, shares fell to HK$8.97, their lowest price since March 2009. They ended the session at HK$9.09. A month ago, they were trading at HK$10.80. Prosecutors say jailed former secretary Ao took a HK$20-million bribe from two Hong Kong businessmen, Mr Lau and Stephen Lo Kit Sing, to

charged but was now looking for a lawyer, the newspaper reported.

Verdict nears

Chief Executive Fernando Chui Sai On said the government will handle the matter ‘according to the ruling’ of the court

show favour to Chinese Estates, the developer of La Scala. The land was granted to Moon Ocean, a company formerly owned by Mr Lo and now by Chinese Estates. The Hong Kong developer confirmed last Wednesday that Macau’s Public Prosecutor’s Office had formally accused its chairman of bribery and money laundering “in relation to the acquisition” of the La Scala land. It also said the case would be remitted to the Court of First Instance here “for trial in due course”. Both Chinese Estates and Mr Lau have denied any wrongdoing on Thursday in a filing to the 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”. Meanwhile, Mr Lo denied any illegal behaviour on Friday. “I deny the allegations. There is insufficient evidence,” he was quoted by the South China Morning Post as saying. He did not elaborate on the comments. Mr Lo, the chairman of BMA Investment, said he had not been formally notified by the public prosecutions office that he was

Sales of flats in La Scala continued last week even though the government could seize the land opposite the airport where the property is being built. Chief Executive Fernando Chui Sai On said on Saturday the government was waiting for the court’s verdict in Ao’s trial. He neither confirmed nor ruled out the possibility of the government taking back the land. Mr Chui said the administration would act in line with the court’s ruling. “We will firmly uphold the Court of Final Appeal’s decision,” Mr Chui said before boarding a flight to Beijing. “That’s what we have done in the past and will continue doing.” The verdict in Mr Ao’s third trial may be handed down as soon as Thursday. There have been 16 deals scrutinised and revoked in the aftermath of Mr Ao’s first two trials on corruption charges. Chinese Estates has pre-sold hundreds of flats. Last month, Chung Chi Lam, general manager (sales) for Chinese Estates, was quoted as saying that 300 of the

15.8 %

amount the shares have slid since April 16 project’s 900 homes had been sold for an average price of 7,200 patacas per square foot in the first four days of pre-sales. But buyers of La Scala flats will find it difficult getting compensation if the government takes the land back, lawyer Vítor Gomes told Business Daily on Thursday. “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. However, he added the government would probably not annul the sale of the land. Mr Gomes, who specialises in commercial and administrative law, has been licensed to practise law in Macau since 2007. He works with lawyer Nuno Simões, who defended Ao in his first trial in 2007.

Chinese Estates (127 HK) share price 11.5 PROCESS STARTS

11.0 10.5 10.0 CHARGED

9.5 TRADE SUSPENDED

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May 28, 2012 business daily | 3

MACAU

Govt estimated 9pct y-o-y fall in gaming revenue: Tam Official figures consistently underplay Macau market growth

editorial

Building trust

Associate Editor

the number will not be too big. From the financial prospective, we made enough [budget] preparation,” Mr Tam added.

Mainland correlation

Francis Tam – erring on side of caution with Macau gaming revenue

acau’s Secretary for Economy and Finance said yesterday the government had been deliberately cautious with its estimates on monthly gaming revenues for 2012. Its own figures suggest average monthly tallies nine percent lower than 2011. Speaking in Cantonese to reporters at Macau Airport before flying to Beijing for talks with the central government, Francis Tam Pak Yuen said: “In 2012, we estimate the monthly gaming revenue on average is 20 billion [patacas]. Compared to the actual growth of last year, this [figure] is a conservative estimation.”

Mr Tam added that the 20 billion patacas (US$2.5 billion) revenue average per month for the whole of 2012 was possible even though in the first five months of this year Macau achieved “24 to 25 billion patacas” [per month]. He said: “Looking back from January to May, we actually reached the level of 24 billion, 25 billion [patacas per month]. Compared to the previous two to three quarters, this is a steady performance. Compared to the average 22 billion gaming revenue [per month] for the entire last year – whether it is going to have an increase in growth – we are positive. However, we estimate

The difference between the 22 billion per month average last year and 20 billion per month official estimate this year is nine percent. That’s surprising given that Macau gaming performance is strongly linked to China’s economic performance and the mainland economy – though slowing – is still growing. And there were no data points last year when Macau was preparing its 2012 budget estimates to suggest China’s economy would actually shrink this year. Gross domestic product in the People’s Republic expanded by 8.1 percent year on year in the first quarter according to China’s central bank. But before the Macau ‘bears’ go running for cover, it’s worth pointing out the context and background to Mr Tam’s comments. The Macau government has a track record of producing budgets that underestimate direct tax from gaming. An example is 2011, where according to data from the Financial Services Bureau the government estimated a direct gaming tax harvest of 59.03 billion patacas compared to the 65 billion patacas achieved in 2010. That would have been a 9.2 percent drop year-on-year. What the government actually got in 2011 according to provisional figures from the bureau was 94.11 billion patacas in direct gaming taxes – a 45 percent increase year-on-year.

Chou’s regret in political reform debate Former legislator Susana Chou sees the need for a new round of public consultation on political reform Tony Lai

tony.lai@macaubusinessdaily.com

ormer Legislative Assembly president Susana Chou finds it “very regrettable” the government has refused to carry out another round of public consultations on political reform. The first two rounds of discussions focused on whether there should be a change and how to change but there were “few or even no” details about the political process, Ms Chou wrote in her blog last week. Secretary for Administration and Justice Florinda Chan rejected a request for a third round of consultations earlier this month during a meeting of the assembly’s second standing committee which discussed two draft laws on political reform. Ms Chan said consultations were “very detailed and thorough” and enough to preclude a third consultation.

The two rounds of consultations were carried out in January, and in March and April. The outcome was draft laws that will add two directly elected and two indirectly elected seats to the legislative assembly and expand membership of the committee to elect the chief executive from 300 to 400. Both rounds of consultations were criticised by a handful of legislators who questioned the processes’ integrity. Ms Chou said there was still “much room for improvement” in some provisions in the draft laws. The process showed there were diverse opinions over many issues and that the government sometimes overlooked the assembly. Ms Chou also said the legislative assembly should adopt a “serious and discreet” manner for discussing draft laws.

A former president of the Legislative Assembly, Ms Chou wants a third round of debate on political reform

The political reform bill was passed after a 90-minute debate by the second standing committee. The amendment is expected to move through the assembly and be approved by the chief executive next month, which means it can be discussed by the Standing Committee of the National People’s Congress later in the month.

Tiago Azevedo

he past twelve years have been years of amazing development. Unfortunately, the scope of development has been limited to the city’s economy and infrastructure. Other areas, such as democracy and accountability are lagging far behind. Many regard democracy as the only political system that enables nations to face challenges posed by the future – a view that is debatable in our part of the world. But what we do know is that democracy is more than democratic institutions alone. To create a healthy democracy, as Macau is trying to show it is doing with its political reform process, much more has to be done. There is almost unanimous agreement that trust is a decisive ingredient, but something that has to be earned. Trusting in your leaders is tough, particularly when you do not have a say in choosing the people that will lead you. Trust is not granted automatically and the public needs to develop faith in the integrity and ability of the government and its institutions. To gain the public’s trust, the government must show that it acts in a timely and appropriate way, and not just say that it upholds the rule of law. It would be strange if it did not. Avoiding mistakes is far better than correcting them. But when mistakes happen, it is important that those responsible are held to account. A fortnight ago, authorities admitted that they sold affordable flats for less than the legal price, losing more than 21 million patacas in the process. The problem was uncovered in 2010. Two years later, it is still unclear who will pick up the tab. Instead of addressing the problem, government officials opt to dodge questions and avoid the subject. We need to reform this kind of behaviour. The government has taken huge steps but the time is right to go even further. The same applies to Macau’s Legislative Assembly. Both institutions should aspire to the highest of standards desired by Macau’s citizens. We now know that the assembly will have four more seats next year, two directly elected legislators and two chosen by the associations. But, as well as increasing the number of seats, Macau should reform it too. The driving principle of reform should be the redistribution of power to the powerless. By doing so, we should boost the assembly’s power to hold the government to account. Historically, the assembly’s role was to vote on the government’s budget and to scrutinise laws, as well as propose its own draft laws whenever appropriate. The assembly hardly bothers with the first, does the second somewhat badly and never talks about the latter. If we are serious about redistributing power, then it is time to strengthen the legislature so it can hold the government to account on behalf of the public. The assembly should have greater control and its legislators should be more independent. It should be an impartial institution that effectively scrutinises the government’s role, not a body that is biased towards a small group of interests. It should be led by a strong president, someone with authority, who commands respect across the assembly, inside the government and among the public. Legislators need to understand that their first duty is to the people they serve.

If we are serious about redistributing power, then it is time to strengthen the legislature so it can hold the government to account on behalf of the public

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business daily May 28, 2012

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Betting-ban plan for

HOSPITALITY Changing arrival patterns The enormous increase in the number of tourists entering Macau has been followed by a change no less remarkable in the relative importance of the points of arrival. With the city progressively opening up to more mainland visitors, some land entry points have increased its prominence, that much is evident. But a huge change has also occurred in the patterns of arrival at other points, such as the three passenger ports at the Inner Harbour, Outer Harbour and Taipa, the airport and the heliport.

Arrivals by helicopter, always a minor source of arrivals, have decreased slowly until last year, when they rebounded slightly. The last annual figure was 7 percent below that of 2004. The fortunes of the two other modes of arrival, however, have been significantly different. The arrivals by sea have grown almost continuously since the beginning of the period. Last year, their number of arrivals by sea reached a growth of 70 percent, for all the period. Airplane arrivals, on the other hand, are lower today than in 2004 by about 8 percent. But compared with their peak year of 2007, the decrease has been almost 30 percent – a real nosedive.

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To put these figures in context, let us look to the evolution of visitor’s arrivals. We have analysed data since 2008, when the published statistics became more detailed. The number of passengers arriving by helicopter has decreased by about one-quarter. The number of passengers at the airport has been comparatively stable, within about 3 percentage points. Sea transport is the only mode of arrival that has grown significantly in this period, by more than 20 percent. J.I.D.

Luciana Leitão

newsdesk@macaubusinessdaily.com

Photos by Manuel Cardoso

The president of Macau Gaming Industry Employees Association wants casino employees banned from the gaming floor when they are off work. In an interview with Business Daily, João Bosco Cheang Hong Lok says gaming employees are more likely to become problem gamblers. And he wants the government to amend the affordable housing scheme to allow casino workers to apply.

What are the main problems currently affecting casino workers? The main problem is the housing problem. Even though casino staff earn more than 10,000 patacas per month they cannot afford the down payment on a home. So I want the government to do something to help workers to buy their own house. They cannot apply for affordable housing because their salaries are over the requirements. This affects the workers. Actually, for affordable housing I recommend maybe the government can widen the salary range, so that it can let more gaming workers to apply for a new social house. Also, not all the casinos have the Macau pension scheme policy. I hope that all the casinos have it. It protects the workers once they retire and cannot work. Furthermore, a big problem is whether the employer, the casino company, keeps their promises to employees. For example, there are currently two casino enterprises that promised workers they would increase their salaries, with a condition: don’t quit and join Sands Cotai [Central] when it opens. The workers stayed but, until now, they haven’t got any increase. As far as social problems are concerned, you’ve said previously that casino workers tend to develop gambling problems. Why? The workers have to work at least eight hours in a casino per day. Moreover, the gambling atmosphere and the winning atmosphere may lead them to lose their way. It is so attractive to their hearts, that they can win more money, because they spend a lot of time seeing this. It is easier for them to get into gambling problems. Do you agree with the draft law that proposes banning people aged under 21 from entering and working in casinos? It’s really a good thing for young people because they’re not mature

enough. It will be good for them to work a few years outside and get some experience first, rather than choose to work in a casino as their first job. They cannot control themselves. You have proposed to add a provision to the draft law that says casino workers should also be barred from entering casinos. Will that solve gambling problem among casino employees? Yes, of course. It absolutely can solve this problem, because casino workers cannot enter casinos to gamble.

Force for good Do you think the Legislative Assembly will include your suggestion? Singapore has this in its law to set some rules for their own citizens. Why we don’t have it now is because

In Macau, we’ve got 34 casinos and we don’t have enough advertisements to remind gamblers [to be cautious when playing]. We want the government to do something more

many of the legislators are owners [or have stakes in casinos]. Of course they know that Macau citizens provide just a small amount of total gaming revenue but they still don’t want this to be in a law. It is quite hard to push that kind of legislator to agree to set this law. On the other hand, if there can’t be a law like this, we hope that the government can just open, or establish, some more training courses or some courses for the gamblers to let them know how gambling can harm their lives. As you can see, there are a lot of advertisements on television in Hong Kong about preventing gambling. In comparison, in Macau, it’s not enough. Of course Hong Kong has just one Jockey Club but still there are so many advertisements. In Macau, we’ve got 34 casinos and we don’t have enough advertisements to remind gamblers [to be cautious when playing]. We want the government to do something more. Among the casino workers, are dealers the ones that suffer most? Yes, because dealers are frontline workers. They have to serve customers. They are the first ones who give the winnings to customers, so, of course, they are the ones who suffer the most. There has been alarming news about crimes increasing among dealers. What should be done?

May 28, 2012 business daily | 5

MACAU

casino workers

The law is the most important thing. If we don’t have a law, then we hope that the government and also the casinos can set some more encouraging and training courses or some leisure courses for the workers. They are working shifts, so they cannot meet their friends and families. We should provide and help build up different interests, which is much better than having nothing to do. It’s because they have nothing to do, that they just go gambling. So, we hope that we can open some leisure courses for them. One of the biggest complaints from dealers is customers’ behaviour, particularly when they lose money. Should casinos impose rules to limit that type of behaviour within casinos? It is quite impossible to do it. It is not like in the past. In the past, there was only one casino enterprise in Macau, and maybe these rude customers hit the dealers or scolded them and Lisboa could just blacklist the guy. It wasn’t a big problem to the casino enterprise because they could still earn the guy’s money but nowadays we’ve got six operators in Macau. The competition is so big, that the casinos cannot afford to lose any customers. Right now, they prefer to compensate dealers rather than lose the customer.

There’s no problem for the dealer position. But for others, like food and beverage, security or housekeeping, there will be a problem. So, starting this month, the central government introduced some new rules to people who cross the border to sell products. The government says they cannot cross the border more than three times per day. This type of people will have to really find a job. So, they can enter the gaming industry. Will the government be forced to loosen the restriction on imported labour? We think dealer and even management positions should be kept for the Macau citizens. If there are really no Macau citizens interested in working in these positions, then the Macau

government can do some research and maybe they can open up to foreign labour. But they have to know these numbers first. It is really a problem because not many Macau citizens would like to work as a cleaner or to have a housekeeping position. Should the government be developing specific policies for casino workers? Public housing is one kind of policy that only the government can deal with. We also hope the government can encourage the casino enterprises to open courses for their workers. If there is a policy set by the government, then all the casino enterprises must follow them. For example, through the arrangement of shifts for workers who want to

study. It is much more convenient for those who want to study, to do it in the casino. They can set some rules. If they join some course, it’s good for the company environment. The partial smoking ban that will be enforced next year is a good thing for casino workers? It is really a good thing for gaming workers. A whole ban would have been better. If the government wants a full ban, there is no problem. But the government has to think about the casino enterprises because it really affects a lot of their earnings. Also, Macau could be affected through [lost] taxes. Is this a good compromise solution? With no other choice, it’s really a good thing.

We need 6,000 to 7,000 employees in the coming two years and around 2,500 of these will have to be dealers

Vacancies to fill Considering future casino developments, how many workers will be needed for the next two years? We need 6,000 to 7,000 employees in the coming two years and around 2,500 of these will have to be dealers. Considering the size of the population, do you feel there are still enough people left to fill in these vacancies?

We think dealer

and even management positions should be kept for the Macau citizens

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business daily May 28, 2012

macau Delays, austerity freeze logistics plan

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Pataca exchange rate

The exchange rate of the pataca is indexed to the Hong Kong dollar. That currency is indexed to the United States dollar. In that sense, as long as the monetary authorities of both regions stick to their current policies, the Hong Kong dollar and the pataca, in a sense, US dollars. Sure, they have different names and represent unusual fractions of the currency. And, of course, they are neither issued nor guaranteed by the US Department of the Treasury. But the exchange rate against other currencies, if the peg and the oscillation band are maintained, is mostly determined by the evolution of the US dollar. Therefore, the pataca stability relies on the policies and interests of the US administration. The peg means a surrender of monetary policy autonomy and gives rise to difficult adjustments whenever the cities’ economic cycles are at odds with America’s. But it has provided both regions with stable currencies and interest rates that would otherwise be difficult to achieve in such small, open economies.

Trade official says Portugal is ‘reconsidering’ the future of a planned distribution centre in the cross-border zone but has not forgotten Macau Vítor Quintã

vitorquinta@macaubusinessdaily.com

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‘Macau is the natural ‘nest’ for Portuguese companies and Guangdong province is certainly the next step,’ says Pedro Reis, president of Portugal’s trade and investment agency

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Mainly, by sticking credibly to policy, the monetary authorities of Macau and Hong Kong have provided a level of confidence and predictability without which most foreign investors might think twice before taking risks. Note that there has never been a period of significant volatility. In the period of this analysis, the absolute variation of the exchange rate to the US dollar has been kept within one-quarter of a single US cent. More recently, a significant new variable came to the fore. With the reorientation of the economy to the mainland, a new currency gained in importance – the yuan. 1.05 1.00 0.95 0.90 0.85 0.80 0.75

Changes in mainland policies mean the yuan is appreciating significantly against the pataca. A re-evaluation of the consequences, advantages and disadvantages of the current system may be warranted. J.I.D.

he 5-million pataca Portuguese Goods’ China Distribution Centre is officially on the backburner, the head of Portugal’s investment promotion agency confirmed on Friday. Pedro Reis, the president of aicep Portugal Global – Trade and Investment Agency, confirmed that the project has been sidelined, a victim of austerity measures in Portugal. The centre had a reported capital of 5 million patacas (US$625,400) and was to have sold “made in Portugal” goods to mainland markets and the project included future branches in Guangzhou and Shanghai. Nam Kwong (Group) Co. Ltd. signed a deal more than five years ago to create a logistics base at the Zhuhai-Macau Cross-Industrial Industrial Zone. The centre was slated to open in 2007. But in September 2008, the Portuguese trade secretary at the time, Fernando Serrasqueiro, said the structure was delayed because Nam Kwong and Portugal were unable to agree on a business plan.

Speaking to media after a seminar on investment and cooperation opportunities in Portugal, Mr Reis said the re-evaluation of the project would “take into account that Portugal is living through a demanding financial situation”. Politics is also a likely factor. The centre deal was signed by previous Portuguese Prime Minister José Sócrates in September 2006. He left office last year. Mr Reis said the reassessment of the project “has nothing to do with

MOP5 million Capital initially planned for the Portuguese Goods’ China Distribution Centre

the interest or lack of it towards the market”. He emphasised that Macau “is certainly one of our priorities”, as well as the mainland. “I wanted to understand … what more we can do in terms of encouraging Portuguese companies to enter the China market and also provide more visibility to the Portuguese situation among Chinese businessmen and institutional partners,” Mr Reis said. “Macau is the natural ‘nest’ for Portuguese companies and Guangdong province is certainly the next step.” When the centre was announced, the Zhuhai-Macau Cross-Industrial Industrial Zone was nearing completion. But five years later, business is not blooming, with the zone’s trade association claiming that 77 percent of the area is vacant. The head of the Logistics Development Committee, Wong Wan, said last December that the government would study the possibility of transforming the zone into a logistics area. In addition, the Nam Yuet wholesale market will be relocated to the zone.

Weather Beijing 34/21o C Changchun 27/14o C

Harbin 22/10o C

Xian 26/14o C Shanghai 29/20o C Chengdu 25/19o C Kunming 25/17o C Haikou 31/24o C Sanya 33/26o C

Guangzhou 32/23o C

MACAU (28 May-02 June) Day

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Shenzhen 30/25o C

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Hong Kong 29/25o C

Manila

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Macau 27/24o C

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InSight

Hengqin readies for business A seminar announcing preferential policies on Hengqin Island sheds more light on the free-trade zone’s future

engqin is set to be a freetrade zone enjoying import duty exemption in a clutch of preferential policies, accountant Bolivia Cheung said at a seminar sponsored by the Financial Services Bureau and the Association of Chartered Certified Accountants last week. Imports to the island will be duty free as long as they do not include day-today consumer products, construction materials for commercial property development or other restricted goods. Goods will be subject to levies if they are destined for other parts of the mainland. Production-related commodities sold and transported from the mainland to Hengqin will be treated as exports and are eligible for an export tax refund. Trading of commodities among enterprises in Hengqin will also be exempt from Value Added Tax and Consumption Tax. The new trade zone will also enjoy preferential corporate tax policies, with qualified enterprises eligible for a corporate income tax of 15 percent, instead of the 25 percent on the mainland – a 40-percent reduction. The island is the first area in the mainland’s southeastern corner China to enjoy a reduced tax rate of 15 percent. To attract talent, Hong Kong and Macau residents working in Hengqin will receive an income tax rebate from the Guangdong government to equalise the tax difference. Employment income is taxed progressively between 3 and 45

KEY POINTS Hengqin Island has the most innovative and preferential of policies among all the mainland’s special economic zones Corporate tax will be reduced to 15 percent for select enterprises and income tax will be equalised for Hong Kong and Macau residents Preferential policies are not limited to manufacturing

Rose N. Lai

percent in mainland China but is capped at 15 percent in Hong Kong and 12 percent in Macau. On the custom end, a “two-line customs” clearance management system will be implemented to separate goods and people from entering the area. Compared to free trade zones mainly dedicated to industrial development, the island is open for commercial and residential property developments and consumerrelated businesses. According to China’s State Council, Hengqin has been granted the most innovative preferential policies among all the special economic zones.

Restricted business Not all investments are welcome from abroad, according to an industry guide published by the government last year. Seven industries – scientific research, cultural and creative innovation, tourism, financial services, commercial services, Chinese medicine and health care, and high-tech firms - have been identified as encouraged industries, Ms Cheung said. Education, entertainment and sport industries will be partially restricted. For example, movie productions are limited to crossborder collaborations. Certain types of education are forbidden if they involve military, police or politics. Media-related businesses are also prohibited, which includes publishing, broadcasting, satellite coverage as well as digital media productions. Golf courses, luxury housing, gambling, including horse racing and the adult industry, are also banned. The island, being the biggest freetrade zone in the mainland, is positioned to mainly attract tertiary and high-tech industries rather than low-end manufacturers, she said. Domestic financial institutions will be allowed to conduct offshore banking businesses. Property trusts as well as investment funds will also be welcome on the island. The University of Macau has a 40-year tenancy on a 1.09-square-kilometre piece of land for its new campus. The land will be under the administration of the Macau government and Macau law, while the rest of the island will adopt mainland laws. X.C.

Hengqin will be the first area in the mainland’s southeast to enjoy a reduced tax rate of 15 percent

Associate Professor of Finance, University of Macau

How do we explain property prices here?

ast time I ended this col- are better educated, have higher umn with “homes are for paid jobs and either want to get living in, not just invest- married or live alone. ments”. When housing cannot From an academic viewpoint, a house people anymore, it will be piece of land is a “real option”, a government problem. So, is it pretty much like the financial a problem in Macau? First, let us call option that allows one to acsee if and how the general formu- quire certain stock at the “exerla applies to Macau. cise” price stated on the option. People living in Macau all know The buyer can exercise the opthat property prices have risen tion when the stock price is higher to an astonishing level through a than the exercise price and earn very bright economy over the past the difference, or pay nothing six to seven years. This small city when the stock price goes south of used to be a place where many peo- the exercise price. ple owned homes. In the case of land, Those who did not developers exercise own a home, either this option by paycould not afford it ing the construcor simply did not tion cost and build find a reason for to sell the comowning one. Resipleted units at a dential units were property price that never a popular is higher than the investment vehicle cost. The differbecause of the very ence between this low annual rate and the “fundaof return through mentals” method renting; the deI talked about last mand for rental time is that this inWhat is units was negligicorporates uncerbly small. And the ‘unusual’ is the hot tainty, which can “newness” of the money around. be pricey. properties did not Why? Both models seem to last long. Together with the show a high profit Buildings about margin when proplow interest rates 10 years old would erty market booms! look 20. (Luckily, and bright economic What is different that applied only to is that the latter growth rate that buildings and not shows no option to humans, and that can be put in the delay development did not mean the when the market is properties had de- formulas, there not attractive. This teriorated so much flexibility, togethis no doubt that that they were not er with the scarce liveable.) property prices will land, can partly Situations changed explain why land with the news that not fall sharply in Hong Kong can The Sands Macao anymore – unless, be so expensive. Hotel was able to But land is cheaper earn back its in- of course, there are in Macau, for whatvestment on its mishaps ever reason. So premises within a what went wrong year. People from with the price in inside and outside Macau? started to reconsider what Macau The latest vacancy rate according to could do. People started to specu- the government is about 7 percent, late in the real estate market. high enough to “usually” drive down Some homeowners, particularly price. What is “unusual” is the hot Macau residents, sold their homes money around. Together with the low to reap the “profit” and rented to interest rates and bright economic wait for the price to drop again, growth rate that can be put in the forin the belief that no market would mulas, there is no doubt that property keep rising. They were mostly not prices will not fall sharply anymore – wrong, except for wrong timing! unless, of course, there are mishaps. We all know by now that they Five years ago, a friend who came are still wrong. People who have from Hong Kong twisted his anlived in Macau for more than 10 kle in the first week of his arrival. years will understand how hard Once at home, he enjoyed kicking it is to believe that an apartment his shoe all the way from the enof about 600 square feet of gross trance of his apartment for a disfloor area that used to be sold at tance of more than three metres 300,000 patacas a decade ago without knocking anything down. could be sold for more than 2.5 He said that would be impossible million patacas now — and we in Hong Kong. To do something are talking about a 40-year-old similar now in Macau and still not flat! Demand has also piled up as break anything would cost a much those in the younger generation higher rent today!

8 |

business daily May 28, 2012

macau CORPORATE

Macquarie names distribution boss Macquarie Investment Management, part of the Macquarie Funds Group, has named Axel Maier as head of Asian Distribution. He’ll work from Hong Kong and be responsible for overseeing the unit’s asset management and investment teams on behalf of institutional investors in the region. Mr Maier has 19 years of experience in that role with other companies. He joins MIM from Wellington Management where he was in charge of institutional distribution for SouthEast Asia, Korea and the Middle East, based in Singapore and more recently continental Europe, based in London. Macquarie’s Asia New Stars Fund was recently awarded ‘Best Asia Pacific Small and Mid Caps Equity Fund’ – when assessed over three years – in the 2012 Lipper Funds Hong Kong Awards.

Over 1,000 guests at Mardi Gras Ball Over 1,000 guests on Saturday attended the New Orleans Mardi Gras Costume Charity Ball, one of the highlight events of the three-day Venetian Carnival 2012 that ended yesterday. The funds raised – the total amount to be announced at a later stage – will be used by the Macau Ecological Society to set up and manage the Sands China Green Fund, with the goal to promote environmental conservation at local schools and offer scholarships to Macau students. “The Venetian Carnival is a great example of our commitment to the diversification of Macau by bringing international mega-events to the city. It’s also a testament to Sands China’s firm commitment to the Macau community,” said Edward Tracy, president and Chief Executive Officer of Sands China Ltd.

CTM to open Nam Van shop Companhia de Telecomunicações de Macau (CTM) is opening its new Nam Van shop today. The company announced a wide range of exclusive offers to mark the official opening of its second shop in the district. The new Nam Van shop is located at Avenida de D. Joao IV, 12-14, R/C, A-B. It will operate between 10:30 am to 19:30 pm, Monday to Sunday, including public holidays. To mark the opening day, several promotions will be presented to customers today and tomorrow, the company said in a press release. “The first 100 customers can enjoy a great offer of ‘$0’ for purchase of Samsung Galaxy Note, Sony XperiaTM S or Sony XperiaTM U; selected standalone handsets are available at five percent off,” CTM said.

Restaurants booming but who’s serving? With low wages, the restaurant sector is finding it hard to fill an estimated 3,400 job vacancies Vítor Quintã

vitorquinta@macaubusinessdaily.com

ore than one in 10 restaurant jobs were vacant at the end of March, the Statistics and Census Service said on Friday. Restaurants employed almost 21,500 staff by the end of the last quarter, a 14.5-percent increase over the same time last year, and had added almost 1,600 jobs in the last six months alone. More people are employed by a restaurant than at any other time in the past three years, which hints that the business has fully recovered from the impacts of the Global Financial Crisis. But the restaurant sector could easily employ far more workers if they filled all job openings. Restaurants had almost 3,400 vacancies in March, a five-year high, which meant that 15.4 percent of all positions were vacant. This is not because the hiring requirements are tough. In fact, almost all the vacancies, about 95.2 percent, in the restaurant and hotel business do not require a professional qualification. More than two-thirds of the vacancies require a junior secondary school education. The cause of the labour shortage may be low wages. Restaurant staff earn far lees than the median citywide salary of 11,000 patacas (US$1,375) a month. Even though salaries increased by 5.2 percent since the end of September, the average monthly wage was 7,710 patacas and 8,450 patacas for resident workers. At 6,480 patacas, waiters earned even less. No wonder the restaurant business reports an 8.1 percent turnover, the second highest employee turnover rate in the bureau’s survey, behind only the apparel manufacturing industry.

7,268

job vacancies in the hotel, restaurant and manufacturing sectors

There are almost 21,500 people employed by restaurants, the highest number in three years

On the other hand, the manufacturing sector, enduring a prolonged a sixyear decline, saw a decrease in staff of 10.4 percent year on year to just 11,160, the lowest since the bureau began collecting data in 2000. The only exception was the manufacturing of food products, which hired about 260 people in the past six months. This business now has just short of 3,200 workers, a record. The segment was still looking to hire another 600 employees, which meant that a whopping 16.8 percent of its job positions were vacant. Manufacturing of Chinese bakery products was the only industrial sub-sector that recorded strong production growth, most likely driven by tourism. It showed an increase of 46.1 percent year on year.

Food manufacturing

Tight times

The situation was more stable in the hotel sector. With Sands Cotai Central opening last month with an initial 1,800 hotel rooms, the number of employees in Macau hotels surged by 9.3 percent in six months to more than 41,700, a three-year high. This sector reported more than 2,450 vacancies, less than half of the number recorded in the third quarter of last year. The drop was due to a hiring spree that pushed the employee recruitment rate in hotels to 13.2 percent, the highest in the survey.

The survey also gives a glimpse of how tight the labour market has become. The hotel, restaurant and manufacturing sectors alone had about 7,300 vacancies at the end of March, when there were only 6,800 people unemployed in the city. The government seems to be gradually loosening restrictions on imported labour. In April, a further 840 nonresident workers were hired in the city, more than twice the number authorised the previous month. An overwhelming majority, 86.4 percent, of overseas employees

KEY POINTS The restaurant sector is struggling to fill about 15 percent of jobs The average monthly wage in restaurants rose 5.2 percent in half-year to 7,710 patacas The opening of Sands Cotai Central led to hiring almost 3,600 hotel workers Food products is the only segment of the manufacturing sector that is growing The number of imported workers is closing in on 100,000 people

came from the mainland, followed at some distance by the Philippines. With work gearing up on both the second phase of Galaxy Macau and Wynn Macau Ltd’s Cotai resort, the construction sector was the one that hired the most imported staff, more than 650 people, followed by hotels and restaurants with 284 new hires. The number of non-resident workers fell by almost 100 both in the manufacturing sector and in the gaming and entertainment industry. There were also fewer domestic maids, down to about 16,300 workers. Imported labour climbed above 99,500 for the first time in more than three years but it still remained below the historic 104,300 workers that were employed in September 2008.

May 28, 2012 business daily | 9

GREATER CHINA

Beijing complaint to WTO on ‘protectionist’ U.S. duties Challenges tariffs on 22 products worth US$7.3 billion yearly Tom Miles

China complaint to WTO about punitive U.S. tariffs 22 Chinese exports affected, worth US$7.3 billion Includes solar panels and steel products

hina has launched a complaint at the World Trade Organization against U.S. import duties on 22 Chinese products. The United States says the items – including solar panels and steel products - are unfairly priced or subsidised. “China firmly opposes the abuse of trade remedy measures and trade protectionism,” China’s Ministry of Commerce said in a statement. The country’s complaint counterattacks in areas where the United States has hit Chinese products with punitive tariffs, known as anti-dumping duties or countervailing duties, in recent years. In Washington, U.S. trade officials criticised Beijing for bringing the case because they said the U.S. Commerce Department was already working to address issues raised by China and which stem from an earlier WTO appellate panel ruling. “China’s resort to dispute settlement is premature and not an appropriate use of dispute settlement system resources,” said Nkenge Harmon, a spokeswoman for the U.S. Trade Representative’s office. “This step by China suggests that

KEY POINTS

China won similar dispute over U.S. duties last year

Trade war heats up – China complains to WTO over U.S. tariffs

China does not really care what the United States does; rather, China has determined without benefit of the facts that whatever the United States does will fall short of what China would like to see,” Harmon said. Beijing launched the action the same day that a WTO panel issued a confidential ruling in a high-stakes case aimed at prying open China’s huge electronic payments market

for U.S. firms like Visa, MasterCard and American Express. The U.S. Trade Representative’s office in Washington confirmed it had received the decision, but said it could not comment until it is made public in coming weeks. Visa, MasterCard and American Express also declined comment on the case, which dates to late 2010 and challenges China UnionPay’s

domestic monopoly over electronic payment services. The United States argues China failed to follow through on its commitment to allow foreign companies to offer electronic payments services by December 2006, five years after its entry into the World Trade Organization. China said its complaint covers exports worth US$7.3 billion, encompassing diverse products like citric acid, kitchen shelving and lawn groomers. It also includes wind towers, even though the U.S. Commerce Department’s preliminary decision on those wind tower imports is not due until Wednesday. Ten days ago, the U.S. Commerce Department set punitive tariffs on Chinese solar panels, which it said Chinese exporters had dumped on the U.S. market at unfairly low prices. Reuters

10 |

business daily May 28, 2012

GREATER CHINA

InBrief Yen-yuan direct trade ‘from June’ Japan and China are expected to start direct trading of their currencies as early as June as part of efforts to boost bilateral trade and investment. With the step, exchange rates between the yen and the yuan will be determined by their transactions, departing from the current “cross rate” system that involves the dollar in setting yen-yuan rates, Kyodo News said. The two governments are eyeing setting up markets in Tokyo and Shanghai, the Yomiuri Shimbun added.

Cabinet lukewarm on Wen’s comments Chinese premier Wen Jiabao’s call to focus more on growth was endorsed by China’s State Council this week with the exception of his push to expand credit. Economists said it shows tension over how to reverse the slowdown. Mr Wen said in earlier comments posted on the government´s website, that the nation should put “stabilising growth in a more important position” and increase lending to support construction; spurring speculation the government will step up stimulus.

China to share recovery burden: EU China must relax restrictions on the yuan as part of a shared global responsibility for restoring global economic health, European Union leaders said ahead of a June summit of the G20 economies. In a letter addressed to all 27 European Union nations, European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy added: “We should also call on China to continue strengthening its social safety nets, carry out further structural reforms and move to a marketdetermined exchange rate.”

Industrial firm profits down 2.2% in April Economy growth in second quarter at likely 3-yr low

hinese industrial companies’ profit growth fell in April, a government report showed yesterday, as the nation’s slowing economy curbed demand. Earnings declined 2.2 percent from a year earlier to 407.6 billion yuan (US$64.2 billion), the National Bureau of Statistics said on its website. That compared with a 4.5 percent gain in March. The deceleration in corporate profit growth underscores concerns that the slowdown in the world’s secondbiggest economy is deepening. China’s State Council said on May 23 that downside risks to growth are increasing and the government will intensify “fine-tuning” policies as needed, signalling it may take more aggressive steps to support the nation’s expansion. “China’s economy is slowing down, so profit growth will also be slower this year,” Lu Zhengwei, Shanghai-based chief economist at Industrial Bank Co., said before the release. “The pace may pick up a bit in coming months if the economy rebounds after policy easing filters through.” Industrial profit growth for the full year is likely to be in a range of 10 percent to 20 percent, compared with 25.4 percent in 2011, Lu said.

Property curbs China’s economy may expand 7.9 percent this quarter from a year earlier, the least since 2009, a Bloomberg survey this month showed, as Europe’s debt crisis crimps exports and property curbs cool domestic demand. That’s down from an 8.1 percent pace in the first three months that was the fifth quarterly deceleration. The government “must proactively take policies and measures to expand demand and to create a favourable policy environment for stable and relatively fast economic growth,” according to a government statement summarizing the State Council’s May 23 meeting. A preliminary reading of HSBC’s China purchasing managers’ index released May 24 indicated manufacturing may contract for a seventh month, adding to signs that growth is weakening. The

Harder times – China’s factories still profitable but growth slowing

report followed data that showed industrial production in April rose the least since 2009 and new lending was the lowest this year. Industrial profit for the first four

KEY POINTS China industrial firm profits down 2.2% in April Growth in second quarter at likely 3-yr low State Council says downside risks increasing Power, heating suppliers, auto makers see profits rise

months fell 1.6 percent from a year earlier to 1.45 trillion yuan, today’s statistics bureau report showed. That compared with a 1.3 percent drop in the first quarter. Sales in the period rose 12.7 percent to 27 trillion yuan, according to the data. Baoshan Iron & Steel Co., which supplies half of China’s automobile steel, reported a larger-than-estimated 60 percent drop in first-quarter profit on slowing demand, according to a statement filed to the Shanghai stock exchange on April 27. But power and heating suppliers reported a 20.1 percent rise in profit while earnings in the oil and natural gas exploitation industry grew 8.2 percent. Auto manufacturers reported an 8.7 percent rise. The agency’s year-to-date profit figures cover industrial companies with annual revenue above 20 million yuan. Bloomberg/Reuters

Private firms allowed stakes in Chinese banks – regulator Mergers and acquisitions possible under new rules Ben Blanchard

Winemakers push sales at HK fair Some of the world’s top wine producers will attend Asia’s biggest wine fair in Hong Kong this week, eyeing new consumers in the booming but still relatively untapped Chinese market. Organisers of the Vinexpo Asia-Pacific trade fair say the slowdown in Chinese economic growth, forecast to reach 7.5 percent this year compared with 9.2 percent in 2011, will not hurt demand for imported wine.

hina will give private capital the same entry standards to the banking industry as other capital, state media said on Sunday, as the government makes its hardest push in a decade to court private investors by welcoming them into a handful of sectors. Private companies would be allowed to buy into banks through private stock placements, new share subscriptions, equity transfers, mergers and acquisitions, the official China Daily said, citing the China Banking Regulatory Commission. Private investment would also be permitted in trust, financial leasing and auto-financing

companies, the report said. “The banking regulatory branches at different levels cannot set up separate restrictions or additional conditions for private capital to enter the banking sector. They are obliged to improve transparency of the banking market access constantly,” the newspaper cited the regulator as saying. In order to encourage lending to the private sector, China should let private capital play a bigger role in financial institutions, and encourage private lending companies to become commercial banks, Wu Xiaoling, a former deputy central bank governor, told the China Daily.

“The government has encouraged small lending companies to turn into rural banks,” she said. “But with a minimum shareholding requirement of the main initiator, private investors lack enthusiasm for such things.” On Friday, the powerful watchdog of China’s state-owned firms said China would allow private investment in state companies when they restructure or sell shares, but gave few details on how that would happen. But analysts have suggested deep vested interests often backed by influential politicians are the biggest obstacle dogging privatisation efforts. Reuters

May 28, 2012 business daily | 11

asia Asian stocks fall four weeks straight on China, Europe concerns

InBrief

MSCI Asia Pacific Index at lows not seen since 2008 credit crisis

Commodities slide on Greek euro fears

Jonathan Burgos and Yoshiaki Nohara

Many commodity markets sank last week to fresh multi-month lows, on mounting fears that Greece could be heading for the eurozone exit. Emerging Asian economies rely on commodity imports so it may ease pressure on their manufacturing margins – currently squeezed by rising labour costs and inflation. But net exporters of commodities such as Myanmar could see some economic losses. “The on going uncertainty over the eurozone debt crisis and contagion fears are holding markets hostage,” said Barclays Capital analyst Sudakshina Unnikrishnan.

sian stocks fell for a fourth week last week, with the regional benchmark index posting its longest streak of weekly losses in six months. It was on signs China’s economic slowdown is deepening and on concern Europe’s debt crisis will worsen The value of shares on the MSCI Asia Pacific Index fell to levels last seen during the 2008 global credit crunch, with Japan’s Topix Index posting its longest streak of weekly losses in almost 35 years. Esprit Holdings Ltd., a Hong Kong-based clothier that counts Europe as its biggest market, sank 2.4 percent. Agricultural Bank of China Ltd., the nation’s third- largest lender, declined 3.7 percent. The MSCI Asia Pacific Index fell 0.8 percent to 111.65 this week. The gauge is heading for a decline of more than 10 percent this month, the most since October 2008, amid slumping loan demand and faltering factory output in China, and as Europe’s leaders pressured Greece to honour commitments to its aid packages before next month’s elections. “The market is right now confused and obviously worried about whether Greece will end up leaving the euro or not,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages almost US$100 billion (800 billion patacas), adding “… the big difference is if their exit will be orderly or disorderly, and an orderly exit has already been priced into the market.”

‘Lehman shock’ The losses erased as much as US$4.5 trillion in global equity value this month. The value of shares on the MSCI Asia Pacific Index fell to 1.2 times book, a level last seen in October 2008, a month after Lehman Brothers Holdings Inc. collapsed, according

Heading south for summer – Asian markets react to China, Europe, worries

to data compiled by Bloomberg. “The Lehman shock continues to haunt the market,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, which oversees about US$188 billion. “Investors are vulnerable to the unknown and they worry that if they underestimate the

KEY POINTS Asian stocks fall for fourth week in row MSCI Asia Pacific Index lowest since 2008 crisis Hang Seng China Enterprises Index near to bearish Investors feeling ‘Lehman effect’ on China, Greece

Greek issue, things may fall apart. They wouldn’t feel that way if they didn’t go through the Lehman shock.” Companies that do business in Europe declined. Esprit dropped 2.4 percent to HK$12.26 in Hong Kong. HSBC Holdings Plc, Europe’s biggest lender, fell 1.7 percent to HK$62.70. Nikon Corp., a camera maker that gets about 23 percent of sales from Europe, slipped 1.3 percent to 2,095 yen in Tokyo. Japan’s Topix Index declined 0.5 percent as it fell for an eighth week, its longest losing streak since November 1977. The benchmark Nikkei 225 Stock Average lost 0.4 percent. Australia’s S&P/ASX 200 Index fell 0.4 percent. The Hang Seng China Enterprises Index dropped 0.5 percent, extending losses from its February 29 peak to 19 percent, near the 20 percent decline that traders consider a bear market. Hong Kong’s benchmark Hang Seng Index slipped 1.3 percent. Bloomberg

Renaissance for struggling Renesas Japan chipmaker to sell plant, cut costs, raise cash

apanese chipmaker Renesas Electronics Corp plans to sell off loss-making operations and cut its workforce by between 10,000 and 14,000 according to undisclosed sources reported by news agencies. Renesas, the world’s largest maker of microcontroller chips for cars, aims to raise more than 100 billion yen (US$1.3 billion) to pay for restructuring costs and will take the plan to Hitachi Ltd and its other major shareholders as early as next week. The Nikkei business daily reported on Saturday that Taiwan Semiconductor Manufacturing Co plans to buy a Renesas chip plant at Tsuruoka, in northern Japan, as part of the plan, although the sources did not confirm this. TSM declined to comment on what it

Japan’s loss-making Renesas to sell factory, cut costs

called ‘market rumours’. Renesas said last week it would form a tie-up with TSMC, which already counts Renesas as one

of its clients, but declined to give details ahead of a formal announcement due today. It has posted cumulative net losses of nearly US$6 billion over the past seven years as it struggles to keep up with South Korea’s Samsung Electronics and others in an expensive race to build ever smaller and faster chips. Hobbled by a strong yen and forced to close eight of its factories after natural disasters in Japan and Thailand last year, Renesas has said it would hammer out a restructuring scheme by July. The scope of the newly reported plan is significantly greater than reported last week by the Yomiuri Shimbun, which suggested 6,000 job cuts and 50 billion yen in fresh capital. Reuters/AFP

N. Korea drought - state media North Korea is suffering a prolonged and widespread drought, state media says, raising fears it will worsen already dire food shortages in the impoverished communist country. If the unusually dry weather persists to the end of the month, it will be the driest May in 50 years in western coastal areas, the Korean Central News Agency (KCNA) said, warning: “The drought is expected to get more serious.”

India’s fresh start on Myanmar Manmohan Singh will seek to bolster ties with Myanmar this week during the first visit by an Indian prime minister in 25 years. His official agenda includes road, rail, waterways and air links. Unofficially, he must also overcome a history of bad blood with Myanmar. A year of dramatic reforms has seen Myanmar pull back from China’s powerful economic and political orbit and won a suspension of U.S. and European sanctions.

Singapore ruling party misses comeback opp A solid by-election win on Saturday for Singapore’s opposition shows the ruling party has a long way to go before winning back voter support after its worst-ever showing in polls last year, analysts say. The People’s Action Party (PAP), which has run Singapore since 1959, was delivered a shock when the opposition made unprecedented gains last May, and has since announced a series of reforms.

12 |

business daily May 28, 2012

MARKETS Hang SENG INDEX PRICE

Day %

VOLUME

PRICE

Day %

VOLUME

26.95

0.07426662

26831129

CHINA UNICOM HON

13.08

0.6153846

19653706

ALUMINUM CORP-H

3.37

0.297619

19005464

CITIC PACIFIC

12.18

-1.456311

4927600

BANK OF CHINA-H

3.03

0.3311258

467388327

BANK OF COMMUN-H

5.53

-0.8960573

25470845

BANK EAST ASIA

28.9

3537324

BELLE INTERNATIO

14.7

-0.4065041

BOC HONG KONG HO

23.7 12.52

NAME AIA GROUP LTD

CATHAY PAC AIR

NAME

CLP HLDGS LTD

PRICE

Day %

58.4

3028302

SINO LAND CO

12.36

0.1620746

16511305

SUN HUNG KAI PRO

89.25

-0.6124722

3824024

87.2

-3.752759

4381585

223.2

-0.7117438

4863041

TINGYI HLDG CO

20.2

-0.9803922

7972815

9.41

0.4268943

8129757

43.85

0.2285714

3200478

POWER ASSETS HOL

65.7

-0.3034901

3047063

CNOOC LTD

15.22

-0.9114583

49824402

COSCO PAC LTD

10.16

-1.550388

8370992

13946845

ESPRIT HLDGS

14.78

5.420827

18171630

-1.25

14484087

HANG LUNG PROPER

26.25

-2.957486

7437411

WANT WANT CHINA

-6.287425

15553694

HANG SENG BK

105.7

-0.7511737

1514463

WHARF HLDG

HENDERSON LAND D

41.25

-0.1210654

4550559

80.9

3.452685

2677000

19.64

0.1019368

6172216

CHEUNG KONG

99.7

0.3522899

3682335

CHINA COAL ENE-H

8.28

-0.4807692

17549000

CHINA CONST BA-H

5.67

-0.5263158

242740424

CHINA LIFE INS-H

20.15

37148595

CHINA MERCHANT

23.8

4524799

CHINA MOBILE

88.6

0.05646527

-0.1248439

CHINA PETROLEU-H

7.73

-1.778907

107146222

CHINA RES ENTERP

28.8

2.12766

2173855

MTR CORP

CHINA OVERSEAS

NAME

HENGAN INTL HONG KG CHINA GS HONG KONG EXCHNG

117.2

-1.429773

5205025

HSBC HLDGS PLC

69.05

-0.647482

14140934

21254348

HUTCHISON WHAMPO

71.95

-0.6901311

4983311

12895522

IND & COMM BK-H

4.96

-0.2012072

307643789

15.72

-1.007557

14461797

26.5

-0.9345794

2606430

LI & FUNG LTD

SWIRE PACIFIC-A TENCENT HOLDINGS

MOVERS

VOLUME

1 18850

INDEX 18713.41 HIGH

18842.32

LOW

18587.49

CHINA RES LAND

13.92

1.605839

6543589

NEW WORLD DEV

9.34

1.411509

16095546

52W (H) 23707.94

CHINA RES POWER

13.76

1.176471

3076000

PETROCHINA CO-H

10.52

-2.048417

103212778

(L) 16170.35

CHINA SHENHUA-H

31.4

-1.72144

18743100

PING AN INSURA-H

61.7

-0.483871

10657117

PRICE

DAY %

VOLUME

22.15

5082610

7.1

0.5665722

49839853

ZIJIN MINING-H

23-May

25-May

18550

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.11

-1.582278

172453658

NAME

AIR CHINA LTD-H

4.82

2.771855

13438340

CHINA PETROLEU-H

ALUMINUM CORP-H

3.18

-1.547988

14195277

CHINA RAIL CN-H

6.32

2.931596

21132882

ANHUI CONCH-H

22.85

1.555556

27660506

CHINA RAIL GR-H

3.06

1.324503

38500672

BANK OF CHINA-H

2.86

0.7042254

394477549

CHINA SHENHUA-H

27.5

-0.9009009

20930674

CHINA TELECOM-H

CHINA PACIFIC-H

-0.7936508

27017686

3.61

-0.2762431

46775433

BYD CO LTD-H

16.2

6.578947

4351000

DONGFENG MOTOR-H

12.48

-0.7949126

8367504

CHINA CITIC BK-H

3.97

-3.874092

117411197

GUANGZHOU AUTO-H

6.5

1.72144

3764378

CHINA COAL ENE-H

7.13

-1.383126

27918820

HUANENG POWER-H

4.83

11854051

CHINA COM CONS-H

7.23

0.4166667

17146717

IND & COMM BK-H

4.62

-0.2159827

311991948

CHINA CONST BA-H

5.15

0.7827789

292968234

JIANGXI COPPER-H

16.12

1.002506

7788186

BANK OF COMMUN-H

CHINA COSCO HO-H CHINA LIFE INS-H CHINA LONGYUAN-H CHINA MERCH BK-H CHINA MINSHENG-H CHINA NATL BDG-H CHINA OILFIELD-H

3.55

1.719198

16493336

PETROCHINA CO-H

10.18

0.9920635

48786108

18.06

0.5567929

26270204

PICC PROPERTY &

8.01

-1.476015

36233783

4.6

-0.2169197

7761000

PING AN INSURA-H

56.45

-1.911381

13101385

14.44

-1.36612

18263654

SHANDONG WEIG-H

7.96

1.920615

1710651

NAME

PRICE

DAY %

VOLUME

12.64

-1.404056

16517877

2.41

-0.4132231

25826644

ZOOMLION HEAVY-H

10.82

-0.3683241

21053243

ZTE CORP-H

14.94

-0.5326232

7773089

YANZHOU COAL-H

MOVERS

INDEX 9539.29 HIGH

9604.89

LOW

9433.07

-1.823282

41872700

SINOPHARM-H

17.92

2.517162

1595128

52W (H) 13317.51

9.19

-2.129925

57484000

TSINGTAO BREW-H

47.25

-1.356994

898727

(L) 8058.58

10.68

2.495202

13809350

WEICHAI POWER-H

31.75

0.3159558

2002533

9650

23-May

9400

25-May

Shanghai Shenzhen CSI 300 NAME

NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

5.1

-0.390625

3670775

SHANG PUDONG-A

8.79

-0.6779661

45887776

DONGFANG ELECT-A

21.27

-0.7466169

5541125

SHANGHAI ELECT-A

5.55

0.7259528

4465110

EVERBRIG SEC -A

13.92

0.07189073

15326369

SHANXI LU'AN -A

26.49

-1.045947

6335548

28892129

GD MIDEA HOLDING

13.24

-1.267711

13642222

SHANXI XINGHUA-A

73.88

-2.262204

2572302

0.6128703

17636494

GD POWER DEVEL-A

2.53

20444407

SHANXI XISHAN-A

17.92

-1.321586

19929819

15.62

-0.5728835

9892922

7.35

-1.342282

21665685

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.64

-0.3773585

30339232

DATANG INTL PO-A

AIR CHINA LTD-A

6.03

-0.6589786

15857654

ALUMINUM CORP-A

6.74

-0.5899705

7319942

ANHUI CONCH-A

16.89

0.1779359

BANK OF BEIJIN-A

9.85

BANK OF CHINA-A BANK OF COMMUN-A BAOSHAN IRON & S BYD CO LTD -A

NAME

11131343

GF SECURITIES-A

31.18

-1.547206

7270683

SHENZ DVLP BK-A

4.72

36322303

GREE ELECTRIC

21.73

8363306

SHENZEN OVERSE-A

4.8

-0.4149378

21698802

GUIZHOU PANJIA-A

32.96

5660268

SINOVEL WIND-A

15.23

-1.868557

1454821

10.02

-1.571709

64951886

SUNING APPLIAN-A

8.9

-3.575298

133352703 12309466

24.38

0.952381

2054508

HAITONG SECURI-A

CHINA CITIC BK-A

4.22

-0.7058824

11914055

HANGZHOU HIKVI-A

45.2

-1.952278

780919

TONGLING NONFE-A

21.66

-0.2762431

CHINA CNR CORP-A

4.42

1.376147

71429111

HEBEI IRON-A

3.03

2.020202

32256621

TSINGTAO BREW-A

36.64

-0.6776904

924401

CHINA COAL ENE-A

9.13

5922380

HENAN SHUAN-A

60.75

1.064715

1728648

WEICHAI POWER-A

32.8

-0.06093845

3628038

CHINA CONST BA-A

4.48

-0.2227171

20640240

HUATAI SECURIT-A

10.62

-2.747253

26557628

WULIANGYE YIBIN

31.95

-1.963793

42005781

9.85

-0.1014199

15578064

XIAMEN TUNGSTEN

46.42

1.265271

6136748

-0.2386635

21409311

XINJIANG GUANG-A

14.87

-1.123087

22945523 10138114

CHINA COSCO HO-A

4.91

-0.203252

6477872

HUAXIA BANK CO

CHINA CSSC HOL-A

31.52

8617175

IND & COMM BK-A

4.18

CHINA EAST AIR-A

4.13

0.7317073

15217283

INDUSTRIAL BAN-A

13.29

-0.150263

28401486

YANGQUAN COAL -A

18.7

-1.630721

CHINA EVERBRIG-A

2.98

0.6756757

29233452

INNER MONG BAO-A

43.52

0.2764977

43845386

YANTAI CHANGYU-A

94.4

-1.409922

520210

CHINA LIFE INS-A

17.09

-2.676538

16761204

INNER MONG YIL-A

22.6

-1.482127

6826608

YANTAI WANHUA-A

14.18

-0.8391608

5602084

CHINA MERCH BK-A

11.61

-0.171969

30231103

INNER MONGOLIA-A

6.17

-0.1618123

69150844

YANZHOU COAL-A

22.34

-1.54253

4089691

CHINA MERCHANT-A

12.88

-1.754386

18102777

JIANGSU HENGRU-A

27.62

-0.2527988

2161412

YUNNAN BAIYAO-A

51.35

-0.7345834

943618

CHINA MERCHANT-A

24.2

0.4149378

7351469

JIANGSU YANGHE-A

163.7

-0.715672

796099

ZHONGJIN GOLD

22.33

4073092

CHINA MINSHENG-A

6.33

-1.09375

129567260

JIANGXI COPPER-A

25.48

-0.351975

8797457

ZIJIN MINING-A

4.05

32041069

JINDUICHENG -A

13.65

-1.230101

6016596

ZOOMLION HEAVY-A

10.4

-0.7633588

51193700

JIZHONG ENERGY-A

19.76

-2.419753

7201993

ZTE CORP-A

15.48

10986462

218.58

-0.7537232

3056929

CHINA NATIONAL-A

6.21

-0.64

17888574

CHINA OILFIELD-A

17.99

-3.018868

7535868

CHINA PACIFIC-A

20.49

-2.660333

16784665

KWEICHOW MOUTA-A

CHINA PETROLEU-A

6.99

0.4310345

15476493

LUZHOU LAOJIAO-A

39.63

-2.437223

17036032

CHINA RAILWAY-A

2.79

1.824818

103850539

METALLURGICAL-A

2.62

0.7692308

19199426

19.37

1.148825

11459433

2.6

-1.515152

21346203

CHINA RAILWAY-A

4.59

1.324503

54048369

NARI TECHNOLOG-A

CHINA SHENHUA-A

25.98

17466283

NINGBO PORT CO-A

5.7

-1.554404

19341790

PANGANG GROUP -A

7.7

-1.028278

38625336

9.48

-0.3154574

12536496

CHINA SHIPBUIL-A CHINA SOUTHERN-A CHINA STATE -A

MOVERS

4.67

-0.2136752

26250781

3.3

-0.9009009

22734948

PING AN INSURA-A

40.65

-3.306375

22603948

13.52

0.5204461

17272091

HIGH

2631.07

11.77

-1.834862

10024309

LOW

2567.67

CHINA UNITED-A

4.09

-0.968523

42404877

CHINA VANKE CO-A

8.85

-0.7847534

34985271

QINGDAO HAIER-A

CHINA YANGTZE-A

6.71

5934075

QINGHAI SALT-A

31.6

-1.557632

4202851

CITIC SECURITI-A

13.24

-1.488095

82939327

SAIC MOTOR-A

14.77

-3.337696

15866675

CSR CORP LTD -A

4.99

1.422764

54252867

SANY HEAVY INDUS

14.58

-1.085482

23788948

DAQIN RAILWAY -A

7.51

0.5354752

33208885

SHANDONG GOLD-MI

33.4

-0.08973975

3737953

PRICE DAY %

Volume

10 2650

INDEX 2573.10

PETROCHINA CO-A POLY REAL ESTA-A

227

52W (H) 3140.10 (L) 2254.56

2560

23-May

25-May

FTSE TAIWAN 50 INDEX NAME ACER INC

29.5

9629333

ADVANCED SEMICON

26.9 -0.5545287

15771828

ASIA CEMENT CORP ASUSTEK COMPUTER

1.040119

286

NAME

PRICE DAY %

Volume

FORMOSA PLASTIC

78.6 -0.3802281

4054245

NAME TAIWAN MOBILE CO

FOXCONN TECHNOLO

97.4 -0.7135576

3592943

TPK HOLDING CO L

1886288

FUBON FINANCIAL

28.45

12578785

TSMC UNI-PRESIDENT

0.8818342

3611124

HON HAI PRECISIO

84.1

-1.4068

26290515

AU OPTRONICS COR

11.85 -0.4201681

20641538

HOTAI MOTOR CO

181

377226

CATCHER TECH

PRICE DAY %

Volume

97 -0.4106776

5973433

396.5

UNITED MICROELEC

-1.612903

4155045

80 -0.7444169

28279141

45.15

-0.660066

3493239

12.6

0.3984064

36202403

176.5

-2.216066

10304396

HTC CORP

413

-3.953488

9471862

WISTRON CORP

37.35

-4.597701

14427612

CATHAY FINANCIAL

28.7

0.1745201

5658314

HUA NAN FINANCIA

15.7 -0.6329114

4273565

YUANTA FINANCIAL

12.85

1.181102

18963057

CHANG HWA BANK

15.1 -0.6578947

6221440

LARGAN PRECISION

567

0.5319149

2554092

YULON MOTOR CO

47.8 -0.3128259

2988043

CHENG SHIN RUBBE

71.5 -0.1396648

1354214

LITE-ON TECHNOLO

34.05

0.1470588

5820963

CHIMEI INNOLUX C

11.9

-1.244813

16971295

MEDIATEK INC

254.5 -0.7797271

4579153

6.9

-0.862069

37102071

MEGA FINANCIAL H

19.85 -0.5012531

24391071

CHINA STEEL CORP

27.9 -0.3571429

12074664

NAN YA PLASTICS

54.9

-1.258993

CHINATRUST FINAN

16.1 -0.9230769

38776091

PRESIDENT CHAIN

152.5

-1.612903

1605432

CHUNGHWA TELECOM

91.2 -0.2188184

6969693

QUANTA COMPUTER

75.5

-3.080873

14226752

COMPAL ELECTRON

31.4

4030076

SILICONWARE PREC

29.1

-3.322259

6247967

DELTA ELECT INC

82.7 -0.7202881

8623139

SINOPAC FINANCIA

9.43

-1.668405

15303365

FAR EASTERN NEW

29.1

-5.977383

14069968

SYNNEX TECH INTL

67.7 -0.1474926

2168362

FAR EASTONE TELE

69.1

2469167

TAIWAN CEMENT

32.5 -0.6116208

3825901

17.15 -0.5797101

2820534

CHINA DEVELOPMEN

16.45

9923865

TAIWAN COOPERATI

FORMOSA CHEM & F

FIRST FINANCIAL

78.9

0.3816794

4246224

TAIWAN FERTILIZE

FORMOSA PETROCHE

0.7194245

1005945

TAIWAN GLASS IND

4652875

65.5

-1.7991

3310855

27.15

-1.808318

725975

MOVERS

6 4960

INDEX 4883.43 HIGH

4957.56

LOW

4883.43

52W (H) 6247.96 (L) 4643.05

4850

23-May

25-May

May 28, 2012 business daily | 13

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

Max 18.88

Average 18.57

MELCO CROWN ENTERTAINMENT

Min 18.40

18.9

31.50

12.50

18.8

31.44

12.44

18.7

31.38

12.38

18.6

31.32

12.32

18.5

31.26

12.26

18.4

Last 18.84

Max 31.45

SANDS CHINA LTD

Max 26.00

Average 25.82

Average 31.30

Min 31.30

Min 25.65

Max 12.44

Min 12.26

Last 12.42

WYNN MACAU LTD 18.70

25.9

13.7

18.62

25.8

13.6

18.54

25.7

13.5

18.46

25.6

13.4

18.38

13.3 Max 13.76

Average 13.56

PRICE

WTI CRUDE FUTURE Jul12

90.86

0.220604456

-8.573153552

111.4899979

77.40000153

BRENT CRUDE FUTR Jul12

106.83

0.262787424

1.136040897

125.6100006

94.34999847

GASOLINE RBOB FUT Jun12

289.29

0.57013732

5.541773076

336.8899822

245.539999

GAS OIL FUT (ICE) Jul12

903.25

0.277546489

0.416898277

1045.75

810

2.568

-2.984510767

-19.29604023

5.09400034

1.981999993

HEATING OIL FUTR Jun12

DAY %

YTD %

(H) 52W

Min 13.32

Last 13.76

18.30 Max 18.64

Average 18.54

282.88

0.244516106

-0.600864401

331.5699816

256.0600042

1573

0.3906

0.517

1921.18

1478.78

Silver Spot $/Oz

28.52

1.5829

2.4609

44.2175

26.085

Platinum Spot $/Oz

1431

0.3858

2.6174

1915.75

1339.25

Palladium Spot $/Oz

589.97

-1.1842

-9.7215

848.37

537.54

LME ALUMINUM 3MO ($)

2013.5

-0.074441687

-0.321782178

2695

1955.75

7639

0.38107753

0.513157895

9905

6635

1908.5

1.19300106

3.441734417

2539.5

1718.5

LME COPPER 3MO ($) 3MO ($)

LME NICKEL 3MO ($)

PRICE

(L) 52W

Gold Spot $/Oz

Last 18.36

Min 18.32

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 %

0.9758 1.5667 0.9595 1.2517 79.68 7.9959 7.7636 6.3444 55.375 31.67 1.2816 29.621 43.778 9454 77.756 1.2012 0.79912 7.9868 10.053 99.75 1.0299

YTD %

-0.2759 -0.0447 -0.4794 -0.4771 -0.3765 0.0088 0.0039 0.0126 0.5056 -0.2526 -0.5618 -0.0371 -0.0868 -1.9674 -0.1157 -0.0142 0.4105 -0.2905 0.0477 0.0802 0.0097

(H) 52W

-4.4177 0.7978 -2.2303 -3.4257 -3.4764 0.0463 0.0489 -0.7786 -4.1716 -0.3789 1.1704 2.2214 0.1416 -4.0724 0.8694 1.2979 4.2885 1.8455 2.9742 -0.0902 0.0194

(L) 52W

1.1081 1.6618 0.9612 1.4697 84.18 8.0449 7.8113 6.4909 56.3875 31.96 1.3199 30.716 44.35 9534 88.637 1.24736 0.90835 9.514 11.7768 117.9 1.0311

0.9388 1.5235 0.7071 1.2496 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 10.0097 97.04 1.0288

17050

-0.292397661

-8.872260823

25195

16550

14.505

-2.618328298

-5.627846454

19.375

14.07500076

578.5

-12.51417769

795

572.25

WHEAT FUTURE(CBT) Jul12

680

2.564102564

-0.910746812

957.5

592.25

NAME

(H) 52W

(L) 52W

SOYBEAN FUTURE Jul12

1382

0.436046512

12.63243684

1512.5

1125.5

ARISTOCRAT LEISU

2.91

-1.020408

32.27272

3.25

1.88

291186

COFFEE 'C' FUTURE Jul12

167.8

0.539245057

-27.73471146

290.75

165.0999908

CROWN LTD

8.54

-0.2336449

5.562421

9.29

7.45

1803281

AGRICULTURE ROUGH RICE (CBOT) Jul12 CORN FUTURE

Jul12

MACAU RELATED STOCKS PRICE

DAY % YTD %

VOLUME CRNCY

SUGAR #11 (WORLD) Jul12

19.62

0.204290092

-13.03191489

27.02999878

19.3599987

AMAX HOLDINGS LT

0.081

2.531646

-6.896549

0.131

0.06

4642500

COTTON NO.2 FUTR Jul12

73.62

-0.432769872

-19.37356259

117

70.52999878

BOC HONG KONG HO

21.65

-1.814059

17.66305

24.45

14.24

14866102

CENTURY LEGEND

0.233

1.304346

0.41

0.204

3.02

7.857145

4.79

2.3

20000

CHINA OVERSEAS

15.76

0.3821656

21.41757

17.86

9.99

21417651

CHINESE ESTATES

9.09

-7.433809

-27.28

14.1

8.97

580000

CHOW TAI FOOK JE

9.58

-0.4158004

-31.17816

15.16

9.49

6950500

EMPEROR ENTERTAI

1.18

1.724138

6.306305

2.09

0.97

110000

FUTURE BRIGHT

0.85

-1.162791

102.381

1.09

0.3

852000

GALAXY ENTERTAIN

18.84

1.948052

32.30337

24.95

8.69

13432000 1102493

CHEUK NANG HLDGS

World Stock MarketS - Indices NAME

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

12454.83

-0.5979369

1.942045

13338.66016

10404.49

NASDAQ COMPOSITE INDEX

2837.53

-0.06515507

8.920029

3134.17

2298.89

HANG SENG BK

101.4

0.6951341

10.03798

125

84.4

FTSE 100 INDEX

5351.53

0.02766329

-3.961574

6084.08

4791.01

HOPEWELL HLDGS

20.3

0.2469136

2.215505

24.903

18.56

549000

DAX INDEX

6339.94

0.3807856

7.486668

7523.53

4965.8

HSBC HLDGS PLC

62.7

0.8849558

6.271186

82.15

12062912

NIKKEI 225

8580.39

0.1986365

1.478828

10255.15

8135.79

HUTCHISON TELE H

3.47

-6.469003

16.05351

3.71

2.25

6446263

HANG SENG INDEX

18713.41

0.2518429

1.513582

23707.94922

16170.35

LUK FOOK HLDGS I

18.38

1.546961

-32.17712

46.15

16.56

2042000

MELCO INTL DEVEL

6.48

1.25

12.30503

10.76

4.3

1648001

CSI 300 INDEX

2573.103

-0.8537488

9.692502

3140.102

2254.567

MGM CHINA HOLDIN

12.42

1.140065

29.48083

17.183

7.6

3683000

TAIWAN TAIEX INDEX

7071.63

-0.7475203

9089.47

6609.11

MIDLAND HOLDINGS

3.72

-0.2680965

-7.920791

5.48

2.95

712002

NEPTUNE GROUP

0.096

-13.51351

0.157

0.08

10000

NEW WORLD DEV

8.11

1.629073

29.55271

12.381

6.13

13948793

SANDS CHINA LTD

20408461

KOSPI INDEX

1824.17

0.5345914

-0.08598959

2192.83

1644.11

S&P/ASX 200 INDEX

4029.246

-0.6558924

-0.6733402

4724.8

3765.9

3902.508

-2.066942

2.106653

4234.734

3217.951

FTSE Bursa Malaysia KLCI

1551.12

0.1853706

1.332045

1609.33

1310.53

NZX ALL INDEX

779.481

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6.807441

806.015

700.441

JAKARTA COMPOSITE INDEX

PHILIPPINES ALL SHARE IX

12.20

13.8

25.5

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26.0

NAME

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SJM HOLDINGS LTD

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MGM CHINA HOLDINGS

3293.65

0.2648442

8.16442

3518.96

2695.06

25.95

1.367187

18.22323

33.05

14.9

SHUN HO RESOURCE

1.18

1.32

0.82

SHUN TAK HOLDING

2.78

2.962963

8.63074

4.686

2.241

1937135 8996101

SJM HOLDINGS LTD

13.76

2.533532

10.03127

20.711

10.079

SMARTONE TELECOM

14.64

-1.612903

8.928575

18.5

9.8

724584

WYNN MACAU LTD

18.36

-0.7567568

-5.846154

27.48

14.807

6802251

HSBC Dragon 300 Index Singapor

527.51

0.34

6.28

ASIA ENTERTAINME

4.17

2.962963

-29.08163

10.8692

3.66

142316

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1132.83

0.6262325

10.48551

1247.72

843.69

BALLY TECHNOLOGI

45.38

-0.4824561

14.71183

49.32

24.74

357323

HO CHI MINH STOCK INDEX

437.38

2.450108

24.41474

492.44

332.28

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2.83

1.798561

18.05501

3.15

1.81

1150

Laos Composite Index

995.62

10.69086

1146.63

876.33

GALAXY ENTERTAIN

2.38

0.8474576

27.27273

3.24

1.08

2000

INTL GAME TECH

14.13

0.07082153

-17.84884

19.15

13.38

1697997

JONES LANG LASAL

72.24

0.08312552

17.92361

99.89

46.01

203543

LAS VEGAS SANDS

47.92

12.14603

62.09

36.08

5655099

MELCO CROWN-ADR

12.1

-1.545972

25.77963

16.15

7.05

4072916

MGM CHINA HOLDIN

1.66

39.2976

2.21314

1.00254

4000

MGM RESORTS INTE

10.8

-0.3690037

3.547456

16.05

7.4

5139784

15.86

2.45478

35.32423

18.77

7.35

373525

1.75

8.859767

2.60368

1.26239

5500

102.04

-1.152766

-7.647749

165.4931

98.26

1382846

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Opinion How competition is killing higher education

Mark C. Taylor

Chairman of the department of religion at Columbia University and professor emeritus at Williams College

ompetition, we are constantly told, encourages individuals, institutions and companies to take the risks necessary for innovation and efficiency. But in higher education, competition often discourages risk taking, leads to overly cautious short-term decisions, produces a mediocre product for the price, and promotes excessive spending on physical plants and bureaucracies. The construction arms race on campus is the most visible example of competition run amok. To become more attractive to potential consumers, many colleges and universities undertake overly ambitious expansions. In some cases, new facilities contribute to educational programs, but too often they are tangential and trap institutions in a costly cycle: the new athletic centre, dorm or student centre starts to look faded when competing schools open theirs, and it never ends. It’s about “keeping up with the Joneses,” an official at Wright State University said in a Dayton Daily News article last fall detailing why colleges in Ohio were spending hundreds of millions of dollars on student centres and other non-academic attractions in a down economy. In Georgia, state legislators are reviewing questionable practices used to fund 173 projects to build student housing, parking garages, stadiums and recreation centres. Private universities with large endowments often start the cycle. Less affluent schools feel pressure to borrow and spend – money they do not have.

Gaming the system This is not the only cause of financial difficulties, but it makes them worse. Obsession with school rankings is another way that competition has warped higher education in the past few decades. College presidents, administrators and professors dismiss the importance of the U.S. News and World Report survey and other ratings, but they are always looking for ways to gain advantage. I’ll give an example from Williams College, where I taught for 37 years. A decade ago, the new president conducted a review of the school’s tutorial program, which was modelled on one at the University of Oxford. The tutorials consisted of eight to 10 students who met with a professor weekly in groups of two to three to discuss papers they had written. The new administration opted to expand the tutorials – a choice based on more than academics. Williams had dropped from first to third in the U.S. News rankings, a matter of concern on campus and among alumni. One way the school could reclaim its top position was by reducing overall class size and

decreasing the faculty-student ratio. When the faculty voted to increase the number of tutorials, the administration changed its accounting system without announcing it. A tutorial consisting of 10 students, for example, that met three times in groups of three or four counted as three classes. Maybe it was a coincidence, but within a couple of years Williams was again No. 1 on the U.S. News list.

Doctoral degree glut Graduate schools also try to game the ratings system, and their competition is global. Every year, leading research universities anxiously await the Academic Ranking of World Universities, the World’s Best Universities: Top 400 and the Times Higher Education World University Rankings. These lists affect the recruitment of top students and the level of financial support. Schools engage in bidding wars for so-called star faculty who are supposed to bring prestige to graduate programs and help attract lucrative private and

In every complex system – be it educational, economic, political, social or biological – competition and cooperation must be effectively balanced

government grants. Second- and third-tier universities often create unneeded doctoral programs to become eligible for additional federal support and to increase their global profile. Even this is not enough. Although severe budget shortfalls have led to cuts of as much as 90 percent for some programs, the university is adding new doctoral programs in a quest for the elusive top-tier status. This makes no educational sense and violates basic market principles. If successful, the University of North Texas will join too many other schools that are spending large amounts for unneeded programs that turn out products – doctoral graduates – for which the supply far outweighs the demand. While overestimating the value of competition can lead to less, not more, innovation, underestimating the value of cooperation tends to discourage the exploration of possibilities for creative interaction. With escalating costs, limited resources and growing political concern about student debt, institutions should be developing innovative ways to cooperate that will prove to be mutually beneficial, in the same way that companies merge and become more efficient. In the past, cooperative arrangements were limited to schools near each other, but teleconferencing, Skype and the Internet have exponentially expanded opportunities for interaction. Universities can no longer afford to teach every subject that students think they need to study.

Outsource some subjects Some subjects can be outsourced; for example, let one college have a strong French department and another a strong German department. In other cases, costs can be shared by splitting a faculty member’s time

between two or more institutions, physically and virtually. For the first half of the semester, what is taught at one college can be remotely transmitted to another, and for the second half of the term this process can be reversed. Faculty members would no longer be affiliated with a single college or university and would be required to become much more mobile. To consolidate resources without jeopardising the quality of research and teaching, universities should form consortiums to share faculty. The most effective organisational structure would be to have a core faculty of select members of the home department and from departments at participating institutions, which could be supplemented by colleagues in the undergraduate programs at related universities. Qualified faculty members would participate on a rotating basis, and courses would not be limited to offerings by resident professors but would include lectures and seminars conducted remotely. With more faculty members from different institutions involved, the quality of education would probably improve. In every complex system – be it educational, economic, political, social or biological – competition and cooperation must be effectively balanced. When competition becomes excessive, it becomes counterproductive. The recent announcement that Harvard and Massachusetts Institute of Technology are cooperating to offer free online courses is a promising development. Much more needs to be done. In coming articles, I will describe how overspecialisation renders much undergraduate schooling irrelevant, and how globalisation and online education provide opportunities for rethinking higher education. Bloomberg View

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

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OPINION Business

The threat of German amnesia

Leading reports from Asia’s best business newspapers

Joschka Fischer

wires

Germany’s foreign minister and vice-chancellor from 1998 to 2005 and was a leader in the German Green Party for almost 20 years

Jakarta Globe Banks in Indonesia will need to gain new licences as they seek to expand their operations as part of a central bank move to ensure the nation’s financial players remain healthy and wellcapitalised. The multiple-licence system will replace the existing practice of banks requiring just a single licence, after which they have widespread freedom in conducting their business, constrained only by the nation’s banking law. Assessing applications for multiple licences gives the central bank more power to guide banks.

Korea Herald Hyundai Engineering & Construction, Korea’s biggest construction company, is looking to achieve US$10 billion in orders globally this year. The builder secured a line of projects overseas including a Qatari highway construction and a Saudi Arabian alumina refinery, allowing it to reach half of its target by the end of next month. This is in line with the company’s plan to become among the top 10 construction players in the world by 2020 by diversifying its project portfolios and markets.

Japan Times Toyota Motor Corp. plans to boost compact car sales tenfold in emerging markets by 2015 by adding seven new models and boosting local production and procurement in countries where rising wages are boosting demand. The automaker is aiming to sell one million small cars a year in countries including India, Indonesia and Thailand by 2015. This effort to boost sales and production of compact cars is part of its goal to increase vehicle sales in emerging markets to half the total.

VN Economy News Indovina Bank (IVB) has launched a new service on its Internet Banking service early this month. While many commercial banks in Vietnam have popularly offered the facility, IVB customers can choose to secure their payment transactions over the Internet by digital signatures. IVB is among leading banks that apply digital signatures for Internet transactions, complying with State Bank Vietnam’s current e-banking regulations. Transaction fees for this service are said to be lower than traditional ones. IVB is a joint venture between VietinBank and Cathay United Bank from Taiwan.

urope’s situation is serious – very serious. Who would have thought that British Prime Minister David Cameron would call on eurozone governments to muster the courage to create a fiscal union (with a common budget and tax policy and jointly guaranteed public debt)? And Cameron also argues that deeper political integration is the only way to stop the breakup of the euro. A conservative British prime minister! The European house is ablaze, and Downing Street is calling for a rational and resolute response by the fire brigade. Unfortunately, the fire brigade is being led by Germany, and its chief is Chancellor Angela Merkel. As a result, Europe continues to try to quench the fire with gasoline – German-enforced austerity – with the consequence that, in a mere three years, the eurozone’s financial crisis has become a European existential crisis. Let’s not delude ourselves: if the euro falls apart, so will the European Union (the world’s largest economy), triggering a global economic crisis on a scale that most people alive today have never experienced. Europe is on the edge of an abyss, and will surely tumble into it unless Germany – and France – alters course.

Facing reality The recent elections in France and Greece, together with local elections in Italy and continuing unrest in Spain and Ireland, have shown that the public has lost faith in the strict austerity forced upon them by Germany. Merkel’s kill-to-cure remedy has run up against reality – and democracy.

It would be both tragic and ironic if a restored Germany, by peaceful means and with the best of intentions, brought about the ruin of the European order a third time

We are once again learning the hard way that this kind of austerity, when applied in the teeth of a major financial crisis, leads only to depression. This insight should have been common knowledge; it was, after all, a major lesson of the austerity policies of President Herbert Hoover in the United States and Chancellor Heinrich Brüning in Weimar Germany in the early 1930’s. Unfortunately, Germany, of all countries, seems to have forgotten it. As a consequence, chaos looms in Greece, as does the prospect of subsequent bank runs in Spain, Italy, and France – and thus a financial avalanche that would bury Europe. And then? Should we write off what more than two generations of Europeans have created – a massive investment in institution-building that has led to the longest period of peace

and prosperity in the history of the continent? One thing is certain: a breakup of the euro and the EU would entail Europe’s exit from the world stage. Germany’s current policy is all the more absurd in view of the bitter political and economic consequences that it would face. It is up to Germany and France, Merkel and President François Hollande, to decide the future of our continent. Europe’s salvation now depends on a fundamental change in Germany’s economic-policy stance, and in France’s position on political integration and structural reforms. France will have to say yes to a political union: a common government with common parliamentary control for the eurozone. The eurozone’s national governments already are acting in unison as a de facto government to address the crisis. What is becoming increasingly true in practice should be carried forward and formalised.

Fast forward! Germany, for its part, will have to opt for a fiscal union. Ultimately, that means guaranteeing the eurozone’s survival with Germany’s economic might and assets: unlimited acquisition of the crisis countries’ government bonds by the European Central Bank, Europeanization of national debts via Eurobonds, and growth programs to avoid a eurozone depression and boost recovery. One can easily imagine the ranting in Germany about this kind of program: still more debt! Loss of control over our assets! Inflation! It just doesn’t work! But it does work: Germany’s export-led growth is based

on just such programs in the emerging countries and the US. If China and America had not pumped partly debt-financed money into their economies beginning in 2009, the German economy would have taken a serious hit. Germans must now ask themselves whether they, who have profited the most from European integration, are willing to pay the price for it or would prefer to let it fail. Beyond political and fiscal unification and short-term growth policies, Europeans urgently need structural reforms aimed at restoring Europe’s competitiveness. Each of these pillars is needed if Europe is to overcome its existential crisis. Do we Germans understand our pan-European responsibility? It certainly does not look that way. Indeed, rarely has Germany been as isolated as it is now. Hardly anyone understands our dogmatic austerity policy, which goes against all experience, and we are considered largely off-course, if not heading into oncoming traffic. It is still not too late to change direction, but now we have only days and weeks, perhaps months, rather than years. Germany destroyed itself – and the European order – twice in the twentieth century, and then convinced the West that it had drawn the right conclusions. Only in this manner – reflected most vividly in its embrace of the European project – did Germany win consent for its reunification. It would be both tragic and ironic if a restored Germany, by peaceful means and with the best of intentions, brought about the ruin of the European order a third time. © Project Syndicate

16 |

business daily May 28, 2012

CLOSING Singapore’s PAP loses by-election

EU challenge to Argentina at WTO

Singapore’s ruling party lost a by-election in the opposition-controlled north-eastern Hougang district, failing to prove it can recoup support. Png Eng Huat, a 50-year-old businessman from the Workers’ Party, yesterday defeated ruling People’s Action Party candidate Desmond Choo, a trade union official. Mr Png won 62.1 percent of valid votes for the seat. Lee Hsien Loong’s People’s Action Party has struggled to reinvent itself since returning to power in May last year with the smallest victory since independence in 1965. After yesterday’s vote Prime Minister Lee reiterated a pledge to change the way the party governs the city-state.

The European Union filed a suit against Argentina’s import restrictions with the World Trade Organisation on Friday. It was the latest step in the row between the two since Argentina nationalised energy company YPF. The EU’s executive Commission said the case followed measures by Argentina that include an import licensing regime and an obligation on companies to balance imports with exports. “Argentina’s import restrictions violate international trade rules and must be removed,” said EU Trade Commissioner Karel De Gucht. “These measures are causing very real damage to EU companies – hurting jobs and our economy as a whole.”

Graff Diamonds to open two stores in Macau Plans Asian expansion after US$1 bln offer; first store here this year, second in 2013

Laurence Graff, chairman and founder of Graff Diamonds Ltd, right, stands with Francois Graff, chief executive officer

raff Diamonds Corp., the London-based jeweller founded in 1960, plans to open 11 new stores in Asia, including eight in China, in the next two years after a US$1 billion initial public offering in Hong Kong. Demand for high-end diamonds will grow in China and other Asian countries as the “super rich” increase, chief executive Francois Graff said via a video conference from London yesterday. The company is offering as many as 311.2 million shares at HK$25 to HK$37 apiece, according to a sales prospectus. Graff is pushing ahead with the offering even as investors shun

new equity in volatile markets and jewellery sales show signs of slowing down. With only US$1.4 billion raised, Hong Kong’s IPO market is set for the slowest first half since 2009, according to data compiled by Bloomberg. “We’re preparing to double the number of directly owned stores over the next three years with most new stores in Asia,” said Mr Graff, son of chairman and founder Laurence Graff. “Showcasing our jewellery and watches exhibitions in Asia will continue to be a core part of our sales and brandbuilding strategy.” The company, which has 18 directly owned stores globally,

plans to open five new stores in Hong Kong, Shanghai, Macau, Hangzhou and Tokyo this year, Francois Graff said. Another six stores will open next year in Macau, Beijing, Shenyang, Chengdu, Seoul and Singapore, he said. The company aims to raise US$850 million by selling new shares and Anne-Marie Graff, wife of Laurence Graff, plans to sell part of her existing stock for US$150 million, the prospectus shows.

Share valuations In Macau, retail sales reached 12.9 billion patacas (US$1.6 billion) in the first three months of this year,

up by 4 percent from the previous quarter. The main reason behind the boost was an 8 percent increase in the sale of watches and jewellery, which reached 4 billion patacas. With prices in Macau attractive for mainland Chinese tourists, these luxury goods accounted for 31 percent of total sales, according to data released by the city’s Statistics and Census Service. Graff plans to sell shares at a valuation similar to where Prada SpA is trading, people with knowledge of the matter said on May 18. The shares may be offered in a range of 18 times to 24 times estimated 2012 earnings, they said. “It’s more of an art than science working out its valuation,” said Andrew Sullivan, a principal trader at Piper Jaffray Asia Securities Ltd. “You can’t even compare it with Tiffany, as Tiffany tends to be more mass market-oriented.” Chow Tai Fook Jewellery Group Ltd., the world’s biggest listed jewellery chain, has dropped 36 percent from its initial offer price after raising about US$2 billion in December in Hong Kong. Graff plans to start trading on June 7, according to the prospectus. Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc. and Morgan Stanley are managing the offering, the document shows. Bloomberg/T.A.

Lagarde riles Greeks as crisis election looms France also criticises IMF chief’s view on Greeks

he French government spoke out yesterday against comments by International Monetary Fund chief Christine Lagarde suggesting that Greeks were dodging taxes. “I find [Lagarde’s comments] rather simplistic and stereotypical,” government spokeswoman Najat Vallaud-Belkacem told French television after the IMF managing director’s comments last week outraged Greece. Political leaders in Athens rounded on IMF chief Christine Lagarde yesterday for branding Greeks tax-dodgers as parties went on the campaign trail for next month’s elections. Socialist leader Evangelos Venizelos accused Lagarde of trying to “humiliate” the debt-stricken country, which is facing its second

election in six weeks seen as crucial to the future of the eurozone. Radical left-wing leader Alexis Tsipras, whose Syriza party is one of the two top contenders for the June 17 vote, insisted “Greek workers pay their taxes, which are unbearable”. The comments by the French IMF head came as parties squared off for the election that could determine whether Greece continues to receive EU-IMF funds as part of a multibillion euro bailout package and stays in the eurozone. Lagarde told Britain’s Guardian newspaper in an interview published Friday that Greeks must “help themselves collectively” by all paying taxes, saying she was more concerned about sub-Saharan Africans in poverty than Greeks hit

by the economic crisis. The IMF managing director responded to thousands of angry messages on her Facebook page, saying she was “very sympathetic to the Greek people and the challenges they are facing”. “That’s why the IMF is supporting Greece in its endeavour to overcome the current crisis,” she said. Mr Tsipras seized on her comments to assert his stance as a defender against economic cuts. “The last thing we seek in Greece is her sympathy,” he said in a statement. “For tax-evaders, she should turn to Pasok and New Democracy to explain to her why they haven’t touched the big money and have been chasing the simple worker for two years.” AFP

Christine Lagarde told the Guardian newspaper that Greeks must ‘help themselves collectively’ by all paying taxes