Macau Business Daily, May 30, 2012 by Business Daily

Year I - Number 43 - Wednesday May 30, 2012

Editor-in-chief: Tiago Azevedo

Deputy editor-in-chief: José I. Duarte

MOP 6.00

Airport investors yet to show hands In what could be a an exercise in brinkmanship, a lack of investor appetite, or a preference for secrecy, only one Macau International Airport Company Ltd (CAM), shareholder has so far expressed interest in putting an extra 1.95 billion patacas (US$244 million) into the facility. That investor is the one that could ultimately have to guarantee an airport bailout for the full amount – namely the general public in the form of the Macau government. Tourism investment company STDM is the second biggest shareholder in CAM, with a 33 percent stake. Page 7

Mainland-Macau trade rising fast Page 3

Workplace ‘spy’ cams okay – govt

Hengqin Island

nvestors will be able to apply online for a licence to run a business in the mainland’s ambitious Hengqin New Area economic project next door to Macau, Business Daily has learned. They will also receive a decision in just a few days. By contrast it takes months to process such licensing requests in other parts of China. And unlike the existing Special Economic Zones in the People’s Republic, such as Shenzhen next door to Hong

Page 4

CHINA’S NEW ‘SAR’ Kong, Hengqin will – at least as far as business is concerned - be run more along the lines of the Special Administrative Regions. “The general direction of Hengqin is to be on the same page with Hong Kong and Macau, so the company management system is closer to Hong Kong than it is to the rest of mainland China,” Yu Fang Yan, manager of the merchants’ department of the Investment Promotion Centre of Hengqin New Area told Business Daily.

Gaming slows in May Q3 likely brighter: analyst Page 5

Unlike Macau and Hong Kong, Hengqin New Area will not have its own mini-constitution or legislature. But the aim of the mainland authorities is to take as much bureaucracy as possible out of the management of the new zone’s economy. That’s been blamed for the failure of several existing China-Macau initiatives – including the Zhuhai-Macao Cross Border Industrial Zone.

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HANG SENG INDEX 19100

State Grid buying assets abroad State Grid Corp of China has agreed to buy electricity transmission assets in Brazil from Spanish builder Actividades de Construcción y Servicios SA (ACS) for US$531 million and assume debt of US$411 million, the latest in a series of overseas acquisitions by Chinese power companies. State Grid Corp’s wholly-owned subsidiary State Grid International Development Ltd will take over seven high-voltage electricity transmission assets in Brazil from ACS, according to a statement via Bank of America Merrill Lynch, which acted as exclusive financial advisor to State Grid on the deal. ACS has been seeking to cut debts by selling non-strategic assets, Reuters reported. The company had been looking for buyers of 750 megawatts of renewable energy assets, power transmission assets in Brazil, desalination plants and various motorway assets to raise an estimated 3 billion euros this year. China’s cashed up state power groups have been scooping up bargains in the past few years, with dominant power distributor State Grid - the world’s largest state utility – establishing a presence in the Philippines, Brazil and Portugal. companies in Brazil in the past year. State Grid’s latest transaction in Brazil will be its second investment in the fast-growing Latin American economy and fourth major investment outside of China, the statement said.

19020

18940

18860

18780

18700

May 29

Property agent law - CE role flashpoint A law framing Macau’s first specific regulations for real estate agents has turned into a flashpoint in the debate about the Chief Executive’s law-making role. The CE’s office wants the power to write by-laws providing sanctions for anyone who breaches the new property regulations. But the city’s legislators believe that is a competence of the Legislative Assembly. Page 3

Govt upbeat on UNESCO status The government is confident a new law protecting Macau’s architectural heritage will be in place by February 2013. That’s the date Macau must provide an update report to a United Nations’ body on the city’s built environment. The government spent 201 million patacas on restoring listed property in the last decade. Approval should guarantee the city’s coveted ‘UNESCO World Heritage’ status – thought to be worth millions of patacas per year in tourism revenue. Page 6

HSI - Movers Name

%Day

ALUMINUM CORP-H

5.61

CHINA RES LAND

5.09

NEW WORLD DEV

4.61

CITIC PACIFIC

4.55

CHINA MERCHANT

4.17

CLP HLDGS LTD

0.08

SINO LAND CO

0.00

HENGAN INTL

-0.45

CHINA RES ENTERP

-0.61

TINGYI HLDG CO

-6.15

Source: Bloomberg

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2012-5-30

2012-5-31

2012-6-01

25˚ 28˚

24˚ 28˚

25˚ 29˚

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business daily May 30, 2012

macau

Hengqin goes digital in business licences

InBrief

Hengqin introduces electronic business licensing this week and makes other reforms of procedures

coal trade logistics company became the first on Hengqin to receive an electronic business licence when the Hengqin Administration for Industry and Commerce officially opened on Monday, according to reports in the mainland news media. The administration has set up a system that allows applications for business licences to be made online, the required documents to be uploaded and the resulting licence downloaded. The electronic licence is be stored in a public database and has the same legal effect as its hard copy equivalent. Hengqin Island’s electronic business licensing system is the first in mainland China. The licensing process takes just a few days, compared with a month in other parts of the mainland. The first company licensed is a joint venture with registered capital of 100 million yuan (126 million patacas). Two other enterprises, a trade settlement company and a technology company, each with registered capital of 50 million yuan, also obtained licences on Monday. The manager of the merchants department of the Investment Promotion Centre of Hengqin New Area, Yu Fang Yan, told Business Daily that three more companies had been granted licences since then and that 30 to 40 companies had consulted the administration about setting up in business on Hengqin.

Only mainland companies are eligible to apply at the moment, according to Ms Yu. Companies elsewhere, including Hong Kong and Macau companies, will have to wait for a month before the administration is ready.

Business reform “The general direction of Hengqin is to be on the same page with Hong Kong and Macau, so the company management system is closer to Hong Kong than it is to the rest of mainland China,” Ms Yu said. The licensing process is similar to Hong Kong’s in that it does not require paid-up capital at the time of application. “However, if companies do not follow the guidelines to pay up registered capital according to the timeline and requirement, they will be blacklisted,” Ms Yu said. The minimum registered capital is 10 million yuan if the company requires an address on the island. However, for private or small enterprises that already have an operating address on Hengqin, there is no minimum requirement. Hengqin will allow several companies in different businesses to share one address. These innovations lower the bar for entrepreneurs that wish to start businesses. Over 1,000 companies on Hengqin have conventional paper licences, 172 of them with registered capital of over 10 million yuan.

Ms Yu said the number of companies was expected to grow with the new licensing system. The licensing process will also skip the pre-approval period, which can take up to six months or a year for companies such as those in energyrelated businesses. Pre-approval is required for companies with operations that might damage the environment, the law says. However, Ms Yu said that since no industrial production would be allowed on Hengqin, there was no need for pre-approval. X.C.

Shun Tak eyes China tourism joint-ventures Shun Tak Holdings Ltd is looking for joint ventures in mainland China’s tourism market, managing director Pansy Ho said on Monday. “Through Shun Tak, we definitely are in talks and now looking very close at some possibilities” in China, she said, quoted by Wall Street Journal. “We decided that maybe finding a good partner in China is the more constructive way of going about it,” she said on the sidelines of the Global Tourism Economy Forum. “In tourism, you want critical mass and economies of scale. We’re better suited to finding an existing partner in place.”

The general Environment impact direction of Hengqin is of traffic centre urged to be on the same page Environmental Protection Bureau director Cheong Sio Kei urged on with Hong Kong and Monday the Administration to invite independent body to carry out an Macau, so the company an environmental impact assessment on the relocation of the Traffic Information management system and Safety Centre to a wetland near is closer to Hong Kong the Taipa Houses-Museum, where endangered egrets birds breed. than it is to the rest of The remark comes after criticism of legislators and after an online petition mainland China calling on the government to find Yu Fang Yan, manager of the merchants department of the Investment Promotion Centre of Hengqin New Area

an alternative location has already received 1,700 signatures.

RMB10M the minimum registered capital if a company requires an address on the island

6 companies have obtained electronic licences to do business on Hengqin

Former casino owner loses assets appeal Carson Yeung Ka Shing, one of the former owners of Greek Mythology casino, has lost a bid in Hong Kong to release some of his assets that had been frozen in relation to money laundering charges. According to RTHK, the businessman and owner of Birmingham City football club had asked for the amount of assets frozen by a High Court judge to be lowered from HK$721 million (US$92.9 million) to HK$452 million. But the Appeal Court said it didn’t feel the amount should be changed.

Shampoo price gap up to 45.8 pct

Hengqin has been given one of the most innovative preferential policies among all economic zones in China

Obvious price discrepancy was revealed among same brand of shampoo and body wash in 32 different pharmacies and supermarkets in a survey carried out by the Consumer Council last week. The biggest price difference reported was of 45.8 percent for one brand of shampoo, ranging from 39.7 patacas (US$4.96) to 57.9 patacas. Meanwhile the biggest price discrepancy in body gel was 42.9 percent, from 33.6 patacas to 48 patacas in different retail outlets.

May 30, 2012 business daily | 3

MACAU Legislators, govt clash over power to set punishments Photo by Manuel Cardoso

The real estate business bill progresses, but legislators and the government fail to see eye to eye on who decides the penalties for breaking the law

More details after La Scala verdict

Tony Lai

tony.lai@macaubusinessdaily.com

he government and legislators were unable to find consensus during a protracted debate yesterday over whether penalty provisions should be included in the real estate business bill or a bylaw. However, after a two-and-ahalf-hour exchange, it did seem agreed that there would be no further discussion. Members of the Legislative Assembly’s first standing committee were meeting government officials, including Transport and Public Works Secretary Lau Si Io, to talk about the latest version of the bill. The focus was on whether the government was acting beyond its competence in deciding to leave penalty provisions for a later bylaw, thus keeping the power to set the amount. Committee president Kwan Tsui Hang said after the meeting that the bill’s latest version was similar to the one discussed in January. The legislators believe it breaches Law 13 of 2009. This legislation tries to define what should be regulated through a law, a bylaw or a chief executive’s dispatch. The government is determined to set penalties under a bylaw, while the committee thinks it should be left to the law itself, Ms Kwan said. Most of the committee members think penalties that are about “depriving or constraining a citizen’s rights” should be decided

by the law, Ms Kwan said. She added: “The legal advisers in the Legislative Assembly are strongly against this [the government proposal] and they think we [the legislators] should not approve a law that violates Law 13/2009.” But the government does not think so. The secretary told reporters: “The government has fully considered Law 13/2009 … before the decision of including the penalties in the bylaw.” Mr Lau does not think this decision is in conflict with current legislation and has declined to comment on whether this move has stripped competences from the assembly.

No room The committee is also concerned that the assembly will not be a part of the future revision of penalties, if they are included in a bylaw, Ms Kwan said. She added that they would probably not meet with government representatives again as no consensus was in sight. “The government said there is not much room for modification except minor details, but I personally think there are still a lot to improve,” she said. Once the committee receives the final version of the bill from the government, the bill will go for its second reading, along with the committee report containing the

disagreements over it. “It is up to each legislator whether he or she approves the bill,” she said. The bill on the real estate business passed on its first reading in February last year and it is the first effort by the authorities to regulate the sector. The law is aimed at enhancing the professional qualifications of agents and brokers and protect the rights of consumers with a licensing mechanism. Ms Kwan said the latest version only contained about 30 to 40 provisions, which is nearly half the number of provisions in the first draft of last June. The committee is not satisfied with the government’s claim that the reduction in provisions gives the government “more flexibility”, she said. Officials have explained that some of those provisions have already been mentioned in other laws, she said. The president, however, thinks those provisions should be reproduced for better public understanding. Legislators would also like the Housing Bureau as the body in charge of enforcing the law and the Labour Affairs Bureau as the body in charge of organising compulsory training courses for agents. But the officials said the chief executive should decide these matters, obviating the need to specify them in the proposed law, according to Ms Kwan.

Mainland-Macau trade booms Cherry Lee

ceci-lqq@macaubusinessdaily.com

ainland China’s trade with Macau is growing faster than its trade generally, but the city still accounts for a very small part of the mainland’s exports and imports, the latest official data show. The value of bilateral trade reached US$800 million (6.4 billion patacas) in the first four months of this year, 14 percent more than a year before, according to the mainland’s Ministry of Commerce. This growth is much faster than the growth of 2.7 percent in the mainland’s trade generally. The mainland is aiming for growth of 10 percent in exports and imports this year, but in the first four months its exports were only 6.9 percent higher than a year before, while imports rose by just 5.1 percent.

Macau made up just 0.07 percent of the mainland’s trade, far less than Hong Kong’s slice of 7.8 percent. The value of Hong Kong’s trade with the mainland rose by 5.5 percent to US$90.7 billion. The balance of trade between the mainland and Macau tipped further than ever in the mainland’s favour as Macau’s imports jumped by 16.6 percent to US$700 million, while its exports dropped by 17 percent to US$40 million. Last month alone, bilateral trade was worth US$210 million but Macau’s exports to the mainland accounted for only US$10 million of this. In the first four months Macau investment in the mainland totalled US$130 million, 34.7 percent less than a year before.

Secretary for Transport and Public Works Lau Sio Io said he would respond to the accusations from the New Macau Association that he and his cabinet lied at the Legislative Assembly, but only after the verdict of the third trial of Ao Man Long is released tomorrow. He told reporters that he would also give more explanations to the public about the grant of additional land in March last year to the developer of La Scala residential project, Chinese Estates Holdings Ltd. The Public Prosecutors’ Office claims the developer paid a bribe to the former secretary to get the La Scala plot near the airport. Mr Lau stressed that authorities will follow the judges’ verdict in deciding whether or not to revoke the land concession. Mr Lau’s legal advisor said earlier this month at the assembly that they had asked the relevant authority whether the land plot was related to the corruption case of Ao Man Long before the extra land grant. But the public prosecution office clarified last Friday they have not received or replied any enquiry about the land deal of the residential project. The New Macau Association accused Mr Lau’s staff of lying. T.L.

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business daily May 30, 2012

macau

CCTV allowed in workplaces

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HOSPITALITY

Companies are allowed to use surveillance cameras in workplaces to assess the performance of workers Vítor Quintã

Growing dependence

vitorquinta@macaudailytimes.com

The data on visitors for April confirm a few facts and trends, but also raise a few questions. The overall figure keeps growing, being 6.3 percent higher, for the four first months, than in 2011. And the main characteristic of the flow of visitors is confirmed. Mainland China, Hong Kong and Taiwan are together the source of just under 90 percent of visitors. Of course, the mainland is, as always, the main contributor, accounting for 60 percent. All the other sources are marginal. South Korea and Japan each send fewer than half the number of visitors that Taiwan sends. None of the remaining sources sent as many as 100,000 visitors in the period.

Visitors shares, by origin

25% 60%

Oth

The number of visitors from the mainland rose by 670,000 to more than 5.6 million. This represents, on average, almost 170 thousand more visitors per month. That rise alone compensates for the net loss of visitors from all other countries combined. The number of visitors from Hong Kong decreased by more than 113,000 and the number from Taiwan decreased by more than 50,000.

Visitors, annual percentage changes 30

-10

2010-11

The government says cameras can be used to assess the performance of workers

MY TH

-20

2011-12

Most Southeast Asian countries sent fewer visitors. The number of visitors from a few has declined in both of the past two years. Ironically, in view of the tensions between China and the Philippines, the country that breaks the pattern is the Philippines. The other countries sending more visitors are South Korea and Japan. But the number of extra visitors from these countries combined is just enough to compensate for the decline in the number from Taiwan. All this means, in essence, is that the city’s fortune is becoming more than ever tied to a single market. J.I.D.

urveillance cameras are legally allowed in work places and can be used to assess employee performance, the Office for Personal Data Protection says, but legislator José Pereira Coutinho has pledged to fight this. “The right to privacy is being constantly and systematically infringed upon” by surveillance cameras, said Mr Coutinho, who is also president of the Macau Civil Servants Association, in an enquiry to the government last month. The Office for Personal Data Protection replied this month most cameras were installed in a workplace for “security reasons or to ensure the quality of service and performance assessment of its workers”. Companies that have installed them have “legitimate interests and legitimate goals”, according to the reply, signed by the office’s coordinator, Chan Hoi Fan. The office said the law, including the personal data protection law and the labour relations law, does not

ban the introduction of surveillance systems in workplaces. Mr Coutinho thinks otherwise. “This view goes against Portuguese jurisprudence, which states that it [surveillance by camera] cannot be used for internal management or employee assessment but only for security reasons,” he told Business Daily. He said: “Many surveillance cameras have been installed at the entrance door to toilets.”

He said they were being used to check how much time employees spent inside during working hours. “Based on a good relationship between employers and employees, surveillance systems should not be installed in areas that do not require a high degree of security,” the Office for Personal Data Protection said. Ms Chan said anyone could make a complaint to the office if he or she found a potential infringement of the personal data protection law in the use of surveillance systems. But many workers in the public sector would not dare to complain for fear of losing their jobs, Mr Coutinho said. He promised not to give up and said he was assessing his next step. The story was first reported by the Portuguese-language newspaper Ponto Final.

Pearl River water safe: official Since the latest heavy metal spill a 24-hour monitoring system has been installed along the Pearl River

he water supplied to Macau from the Pearl River is safe to drink, the river’s monitoring agency said, seeking to calm fears of contamination raised in the past few years. “So far, pollutants in the Pearl River can be diluted and absorbed within certain river sections, which pose no substantial impact on the whole river,” an official of Pearl River Water Resources Commission, Liu Zhisen, told the China Daily. “The quality of river water sources to Hong Kong and Macau is up to grade II, a higher standard for drinking water,” Mr Liu said. He is likely to have been referring to the 1997 international standards for water supply, in which grade II is the second best.

The latest incident happened in January, when industrial waste from a mining company spilled into the Longjiang River, which flows into the Pearl River, taking cadmium pollutants to twice the levels considered safe. “A 24-hour monitoring system on water quality has been launched along the river, focusing on illegal discharge of waste and other pollutants,” Mr Liu said. “Therefore, any pollution can be discovered timely and controlled as soon as possible.” January’s incident was the second heavy metal spill reported in less than six months in the Pearl River basin. Over 5,200 tonnes of highly toxic chromium compound waste were dumped last August in Yunnan province, close to the river’s source.

These incidents raised concern about heavy metal contamination in mainland China, after a report last January said up to 10 percent of rice grown there was contaminated with harmful metals like cadmium. A researcher at the Guangzhou Institute of Geochemistry warned last October that the concentration of heavy metals like copper and zinc in fishing ports near Shenzhen, Zhuhai and Macau was much higher than in other domestic waters. The mainland authorities handled 542 environmental incidents last year, according to statistics from the Ministry of Environmental Protection, with nearly 60 percent of the incidents triggered by traffic and work-related accidents. V.Q.

May 30, 2012 business daily | 5

MACAU

Gaming gravy train slows again VIP players blamed for dramatic deceleration Associate Editor

nvestment analysts expect Macau’s gross gaming revenue to have risen only five to seven percent year-on-year when government figures are released on Friday. Although it’s still healthy growth, it’s a dramatic slowdown compared to May last year, when gross revenue grew 42 percent compared with the equivalent month in 2010. And the main culprit again this month is VIP gaming. Despite a new supply of 140 high roller tables in the Macau market following the opening of Sands Cotai Central on April 11 (cited in a company stock exchange filing), it hasn’t significantly boosted demand for gambling from the wealthiest players. Last year there was a strong positive correlation between increased table supply; increased junket capital supply (the money the VIP rooms use to fund the ‘rolling’ of the high stakes players) and boosted VIP player demand. “From our understanding [the] mass market is still

‘From our understanding [the] mass market is still holding up strongly at a 30 percent yearon-year increase’ , Kenneth Fong, J.P. Morgan holding up strongly at a 30 percent year-on-year increase,” said Kenneth Fong, Head of Regional Gaming and Lodging Equity Research for J.P. Morgan in Hong Kong in

a note to investors on the May numbers. “Given that mass is contributing ~30 percent of the headline revenue, a seven percent headline growth [in May] is imply-

ing a negative VIP segment growth. Before the stabilisation of the VIP revenue, we believe that the sector is likely to see some pressure near term.” By “some pressure” Mr

Fong hints at an important issue for Macau gaming operators. There are so many different styles of investor with exposure to Macau names on the back of China’s growth story that Macau gaming equities are often overbought. As a result, even a slight slacking in the city’s meteoric gaming revenue growth can lead to some stockholders heading for the exits. That can create some volatility in Macau gaming stocks. But corrections also provide opportunities for other investors, points out Mr Fong. “We see opportunities for investors to gradually accumulate over the next few months. This is especially the case for a high-beta and over-owned sector like Macau gaming, which tends to overshoot during a correction,” he stated, adding, “we expect the sector to re-rate again in late 3Q when a gradually improving China economy stimulates VIP headline revenue growth again and Sands Cotai Central phase II opens.”

6 |

business daily May 30, 2012

macau Brought to you by

Monetary base bang

The discussion about inflation has centred mostly on the issue of imported inflation: the costs of imports of food and other essential supplies from mainland China. Inevitably, these have risen, as the result of higher prices in the mainland exacerbated by the general appreciation of the yuan. Less attention has been given to other factors, such as the demand pressure created by either residents and visitors, increased consumption or the effects of the tensions in the real estate markets. Even less attention has been paid to the monetary variables. As deposits and credit have expanded, so have the monetary aggregates. Their relationship to the behaviour of domestic prices seems, in the case of Macau, to have been insufficiently analysed. However, significant changes have been happening. The most common measures of money supply have been rising steadily.

M1 nd M2 growth (106 mop)

Restoration of heritage costs 201m patacas over 10 years Macau must report to UNESCO by February 2013 on its efforts to preserve its heritage Tiago Azevedo

500 000

tiago.azevedo@macaubusinessdaily.com

50 000

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12

5000

The supply of money usually designated by M1 (the sum of money in circulation plus demand deposits) increased by 55 percent between the beginning of 2008 and the end of the first quarter of this year. In the same period, M2 (M1 plus, broadly, short-term deposits and similar assets) rose by 66 percent. These aggregate measures have risen faster than both gross domestic product and national income. Moreover, the monetary base, often also called M0 (consisting of the total value of coins, notes, and deposits by the banks at the Monetary Authority) has been also rising. It is generally accepted that, in the longer run, there is a relationship between increases in prices and the growth of the monetary base.

M0 growth (106 mop) 30000

he government spent 21.45 million patacas (US$2.68 million) on restoring listed property last year, nearly 70 percent more than in 2010, when these expenses came to 12.6 million patacas. Data from the Statistics and Census Services show 24 buildings, including churches and temples, were restored last year. Macau had 128 listed structures and sites in 2010 and 24 were brought up to scratch. About 40 percent of the budget was for the restoration of listed monuments and building complexes, Portugueselanguage newspaper Tribuna de Macau reported yesterday. The government allocated more than 201 million patacas for such work in the last decade.

The biggest tranche was spent in 2004 when it spent 32.8 million patacas on restoring monuments and other listed sites, a year before the United Nations Educational, Scientific and Cultural Organisation (UNESCO) listed Macau as a World Heritage site. UNESCO has been concerned about the “visual integrity” of Macau and its world heritage features being obscured or otherwise affected by rapid development and the want of an urban plan. The World Heritage Committee’s main concern about the historic centre of Macau stems from developments being built in or proposed for areas surrounding the buffer zones of the heritage sites. “They might have a negative impact

on its visual integrity,” Kishore Rao, director of UNESCO’s World Heritage Centre, said last year. The committee has urged Macau to develop appropriate legal and planning instruments to protect its cultural heritage, incorporating urban planning. The government is soliciting public opinion on an urban planning bill, first announced four years ago, until June 8. Macau would have an advisory urban planning council if the government’s urban planning bill is passed. The bill proposes punishing those guilty of demolishing a building listed as part of Macau’s cultural heritage with a fine of up to 15 million patacas.

Govt confident it can meet UNESCO heritage demands Kristy Chan

kristyc@macaubusinessdaily.com 22500

15000

Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12

7500

Unsurprisingly, the general M0 trend has been upwards. But highly remarkable is the sudden acceleration in the last four months, when M0 shot up by almost 65 percent. That is a development worth our attention and, maybe, an explanation from the relevant authorities. J.I.D.

The government is confident that the urban planning bill will become law before it reports to the United Nations Educational, Scientific and Cultural Organisation (UNESCO) on the city’s heritage, which it must do by February 2013. “The government and the Cultural Affairs Bureau place a great deal of importance on enacting the urban planning law,” the acting deputy director of the bureau, Leung Hio Ming, told Business Daily. “With support from lawmakers and the public, I believe it will be passed

in February,” he said. “We will go to UNESCO and report to them. Therefore, my view is a positive one.” The government has promised UNESCO that it will have a heritage protection law and an urban planning system in place before presenting its report in February 2013. The cultural heritage protection law is awaiting its first reading at the Legislative Assembly, while public consultations on the urban planning bill will end on June 8. But Mr Wong played down the idea of

any negative consequences of Macau failing to have an urban planning system before next February. “I think the most important thing is for UNESCO to see that we are doing our utmost to improve the protection of our heritage sites,” he said. China Cultural Heritage Day, observed on the second Saturday of every June, will focus this year on the culture of the Inner Mongolia Autonomous Region. The budget for all the activities will be about 800,000 patacas (US$100,000), Mr Leung said.

Weather Beijing 27/15o C Changchun 26/13o C

Harbin 26/14o C

Xian 29/17o C Shanghai 22/19o C Chengdu 29/19o C Kunming 22/16o C Haikou 30/24o C Sanya 33/27o C

Guangzhou 31/25o C

MACAU (28 May-02 June) Day

Temperature

Humidity

05/28

24/27o C

80/95 %

05/29

24/27o C

80/95 %

05/30

24/28o C

75/90 %

05/31

23/30o C

65/95 %

06/01

24/31o C

65/90 %

06/02

24/31o C

65/90 %

Shenzhen 31/25o C

ASIA (today)

Hong Kong 29/25o C

Manila

TOKYO

Jakarta

34/26o C

31/25o C

23/17o C

32/25o C

Macau 28/25o C

Bangkok

SEOUL

K. lumpur

34/27 C o

SINGAPORE

25/18 C o

34/25 C o

taipei

30/24o C

May 30, 2012 business daily | 7

MACAU

ViewPoint

Little enthusiasm for CAM injection The lack of response from private shareholders raises doubts about the capital injection planned for the airport company

José Pereira Coutinho

Legislator and chairman of the Civil Servants Association

Vítor Quintã

vitorquinta@macaubusinessdaily.com

one of the private stakeholders had taken up the offer of shares on the eve of the deadline for subscription to a capital injection of almost 2 billion patacas into Macau International Airport Co Ltd (CAM). The aviation regulator told Business Daily yesterday that the government had so far been the only shareholder to show interest in buying non-voting, redeemable preference shares worth nearly 1.95 billion patacas (US$244 million). “At this stage, the Macau SAR government will subscribe to the preference shares in accordance with the government’s share in CAM,” which is 55.24 percent, a spokesperson for the Civil Aviation Authority said. “We have not received notification about the decisions of the other shareholders at this present moment,” the spokesperson said. Tourism Investment Company STDM is the second-biggest shareholder in CAM, with a 33 percent stake. The remaining shares are held by a number of mainland Chinese and Macau businesses and institutions, including businessman Ng Fok (about 2 percent) and STDM founder Stanley Ho Hung Sun (1 percent). The airport company confirmed that the 15-day period for the shareholders to subscribe proportionately to the new shares would end today.

The spokesperson declined to comment further, saying the period had not ended. The share issue was discussed in a general meeting two weeks ago and, according to a press release of the company, the shareholders approved the measure unanimously. But the lack of response from shareholders has raised doubts about the success of the issue. A source told Business Daily two weeks ago that private stakeholders, including STDM, had expressed unwillingness to put more money into the airport. The main reason is the continuing losses of the company. It lost 15 million patacas last year. CAM attributed the loss mainly to bank loan interest payments and over 200 million patacas in depreciation costs. CAM has to repay next month the syndicated loan of 2 billion patacas that it got in 1994 for the construction of the airport, and the share issue is aimed at covering this short-term need. The government is a guarantor of the loan. The aviation regulator said recently that if minor shareholders passed on buying the new shares, the government would acquire 67 percent of the shares STDM the rest. It is unclear what would happen if STDM decided not to subscribe to the new shares. with Tiago Azevedo

The government is the only airport company shareholder that has so far shown interest in a 1.95 billion pataca capital injection

Gaming boosts use of electricity

lectricity consumption was 11.5 percent higher in the first quarter of this year than a year before, prolonging an 11year growth trend. Between January and March the city consumed 821 million kilowatt hours, the highest ever first-quarter figure. The gaming sector was the main cause of the increase, its energy consumption rising by 18.3 percent to 327 million kWh. Casinos accounted for 50.6 percent of the 646 million kWh used by all businesses. Electricity consumption by households grew much more slowly, rising by 7.8 percent to 138 million kWh. The amount of electricity generated in Macau was 110 million kWh, 6 percent more than in the fourth quarter of last year. The city imported 88.2 percent of

its electricity, 1.7 percentage points less than in the fourth quarter. CEM produced 300 million kWh here in the first quarter of 2011, because it was able to import of 53.6 million cubic metres of natural gas, and the city imported only 62.3 percent of its electricity from mainland China. Macau is now much more dependent on imported electricity, mainly because blasting work on Hengqin Island roads led to the suspension of the supply of natural gas. Work should have ended last December but the supply has yet to resume. Business Daily asked the energy regulator if there was any schedule for the resumption of the supply of natural gas, but had received no reply by the time we went to press. V.Q.

Five years of inertia

n the current government structure, the secretary for Transport and Public Works is responsible for strategy, policies and decision making in diverse sectors such as granting land concessions, public works, transport, infrastructure, environment, housing, traffic, energy and aviation. That would be unthinkable in any other region or country, especially since our government structure has no deputies or sub-secretaries in charge of specific sectors. In Hong Kong, these responsibilities are spread between four secretaries. The fact that Macau is considerably smaller does not mean its problems and issues are different. They are the same; only the scale varies. However, to add to this unlikely government structure, the secretary in charge of these key sectors, which are crucial to Macau’s development, lacks initiative. The opinion among the politicians and businessmen that I encounter is unanimous. They consider Mr Lau an inert secretary and a major contributor to the degradation of the government’s credibility. Mr Lau was appointed in March 2007. He was quick to promise a clean-up and say transparency would be a feature of his tenure. Five years later, the lack of transparency persists and, interestingly, the major projects Mr Lau leads – the Macau Light Rail Transit system, land reclamation zones A to E, public housing, the creation of the Environmental Protection Bureau and the Traffic Bureau – were thought of or launched by Ao Man Long, the man he came to substitute. There is not a single project that Mr Lau has thought up and the projects he simply picked up from Ao’s desk are stained by scandal, lack transparency, and have a complete absence of vision and integrated planning. The light rail project is delayed by more than three years and the budget has tripled. The award of tenders for the consultancy and rolling stock took 10 and 8 months, and were conducted in a shocking way, deeply affecting the city’s international credibility. The city’s development continues without urban planning and environmental policies are non-existent. The international tender process for the wastewater treatment plants was flawed and there is no decision on the necessary refurbishment to the waste incineration plant.

The transportation system has no strategy whatsoever, with hundreds of casino buses flooding the streets to take employees and business to the operators. The waste management contract awarded to Macau Waste Systems Company keeps being extended, without any indication of when a new tender will be launched. New land reclamation is going through a mock-consultation processes, without any real impact studies, and there are rumours that some plots have already been “promised”. There is no policy for the airport or for an end to the near-monopoly on routes held by Air Macau, which is strangling the aviation market. The land concessions game continues in Cotai, with no strategy or rules of which the public is aware.

Mr Lau was appointed in March 2007. He was quick to promise a clean-up and say transparency would be a feature of his tenure. Five years later, the lack of transparency persists and the major projects Mr Lau leads … were thought of or launched by Ao Man Long, the man he came to substitute

The secretary for Transport and Public Works in Macau, to be successful, would have to be a superhero, because no man can be in charge of so many crucial areas for the development of our city. We all know superheroes do not exist but the chief executive has appointed a man who is the antithesis of a superhero: he has no charisma, no energy, no ideas and no sense of what Macau should be in the future. The only solution is that he soon becomes part of our past.

8 |

business daily May 30, 2012

GREATER CHINA

InBrief Beijing ‘has tools’ to support growth China’s government has further policy tools available to counteract any significant slowdown, while uncertainty surrounding the economy may weigh on credit scores, according to Fitch Ratings. “Fitch still believes that the Chinese government still has tremendous scope for policy flexibility, and that this would sort of lean against any risks of a hard landing,” said Art Woo, a Hong Kong-based director in Fitch Ratings’ sovereign group. China has a local currency issuer default rating of AA-from Fitch with a negative outlook, while its foreign-currency rating is Aplus and stable.

Shui On to spin off China Xintiandi Chinese property developer Shui On Land Ltd said it has submitted a spinoff proposal to the Hong Kong stock exchange for a separate listing of its premier commercial property unit China Xintiandi Co Ltd. In a filing late on Monday, Shui On said a listing would help China Xintiandi raise capital to fund acquisitions and investments in Chinese commercial properties as it expands its portfolio. China Xintiandi will focus on managing, designing, leasing, marketing and redeveloping premium retail, office, entertainment and hotel properties in urban areas in China.

China to levy duty on oil shipments China’s Ministry of Finance said on Monday that receivers of oil shipments entering Chinese waters will have to pay a 0.3 yuan ($0.05) per tonne duty from July on behalf of a marine pollution fund, Xinhua news agency reported. China’s ports received about 102.5 million tonnes of crude and oil products in the year to April. Xinhua said the revenue would go to a marine pollution fund set up to compensate victims of oil spills such as those in the Penglai 19-3 oilfield in Bohai Bay in June 2011.

Richard Li may bid for ING Asia Richard Li, son of Hong Kong’s richest man, is a prospective bidder for ING Groep NV’s Asia life-insurance unit, the Wall Street Journal reported yesterday, citing sources. The interest comes four days after Li Ka-Shing said he will offer financial support to his younger son to expand outside the family’s Cheung Kong Group of companies. AIA Group Ltd, Metlife Inc., Manulife Financial Corp. and Korea Life Insurance Co. were among companies that have made offers for the ING unit, people familiar with the

China, Japan to shore up yen-yuan trade Trading currencies directly in Tokyo and Shanghai from June 1 Tetsushi Kajimoto

apan and China will start trading their currencies directly in Tokyo and Shanghai from June 1 in a move that shores up trade and financial ties between Asia’s two biggest economies and also marks another baby step to raise the yuan’s international role. The step eliminates the use of the dollar to set the exchange rate and follows an agreement struck by the leaders of the two countries in December, which also involves Japan buying Chinese government debt and efforts to forge a free trade pact between China, Japan and South Korea. “This is part of China’s broader strategy to reduce dependence on the dollar. The yen has been chosen because of large trade flows between the two countries,” said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong. “Volumes of currency trading on shore are small, but this could lead to an expansion of trading with other currencies. It would be easier for China to expand into other Asian currencies.” Japanese Finance Minister Jun Azumi, who announced the decision in Tokyo, stressed the cost benefits of the move. In both the Tokyo and Shanghai markets, “the exchange rates of the yen and the yuan will be presented on a steady basis and

of China’s total trade was settled in yuan in 2011

full-fledged direct trading of the currencies will start,” he said. “By conducting transactions without using the third country’s currency, it will bring merits of reducing transaction costs and lowering risks involved in settlements at financial institutions,” Mr Azumi told reporters after a cabinet meeting.

Trade boost The People’s Bank of China noted benefits for mutual trade, but also tied the decision to China’s drive to boost the use of the yuan as a settlement currency for trade and financial transactions. “Developing the direct yuan/yen trading will help form the direct yuan/yen exchange rate and reduce

the trading cost for entities and promote the use of the yuan and yen in bilateral trade and investment as well as help strengthen financial cooperation between the two countries,” it said in a statement. A separate statement issued by the China Foreign Exchange Trade System said it will provide a market-making system for direct yuan/yen trading. Until now yen-yuan rates were calculated on the basis of their respective rates against the dollar, so the move is expected to narrow trading spreads, lower transaction costs and allow more trade deals to be settled directly. Total trade between Japan and China was 27.5 trillion yen (US$346 billion) in 2011, and has increased 2.5 times since 2001, according to data from the Japanese finance ministry. The number of Japanese companies that have businesses in China grew 1.5 times to 22,307 in 2010 from 2001.

Strengthening ties For Japan, which in March pledged to buy about US$10 billion of Chinese government debt, becoming the first major economy to do so, the move could strengthen ties with its biggest trading partner. Despite sometimes rancorous political ties between the two

May 30, 2012 business daily | 9

GREATER CHINA

Taiwanese shares climb on KMT’s tax proposal New tax favours investors more than an earlier proposal

aiwan stocks climbed 2.89 percent to their best percentage gain in more than five months yesterday, boosted by a plan for a capital gains tax by the ruling KMT party that favours investors more than an earlier proposal put forward by cabinet. T h e main TAIEX index ended up 206.29 points or 2.89 percent at 7,342.29, its biggest one-day percentage rally since December 21. “Investors are obviously much happier with this proposal, compared with the previous capital-gains tax plan,” Robyn Hsu, a fund manager at Capital Investment Trust, said. In late April, the cabinet revised its plan for a capital gains tax, part of broader reforms by President Ma Ying-jeou to address a growing rich-poor gap in Taiwan, adjusting the tax rate and raising taxable thresholds for individual investors. Opposition to its proposal had sent the stock market lower on concerns investors would be driven away. Under the latest proposal, which has a slight majority in the cabinet, investors have the choice of paying the tax when the market trades above 8,500 points or they can add their stock trading

profits to their annual income, a KMT lawmaker said. Individual investors would be required to pay 0.1 percent of their stock profit when the main index is between 8,500 and 9,499, and 0.2 percent when the index is at 9,500-10,499. “Our version not only offers investors flexibility, but also collects more tax than the T$10 billion (US$339 million) per year projected by the cabinet,” said KMT legislator Lai Shyh-bao. “The KMT plan is aimed at meeting the expectations of investors rather than those of the cabinet,” said Alex Hu, a vice-president of propriety trading at state-run Mega Securities. “The Taiwan market has traded at an average of 7,900 points over the last 10 years,” meaning investors could expect to pay little by way of capital gains tax under the KMT plan, he said. If approved, the tax will take effect next year. Yesterday, the auto sector was the top winner, surging 6.75 percent. The heavily weighted electronics and financials sub-indexes were both up about 3 percent.

Taiwan stocks climbed most in five months

Reuters/Bloomberg

Finance minister resigns Taiwan’s finance minister said yesterday she had resigned as the ruling party’s version of capital gains tax on stock trading was a lot different

from her original draft. “According to the KMT version, investors reaping massive profits from stocks trades won’t need to pay gains tax, which differs greatly from the ministry’s proposal,” Finance Minister Christina Liu said in a statement on the finance ministry’s website. “I am resigning

actually include any opening up of the capital account at all. It just allows a direct cross to be traded rather than actually increasing the amount of flow that can happen onshore to offshore,” Dominic Bunning, currency strategist at HSCB in Hong Kong, said. “It seems to be more of a technical issue rather than a major development.”

as I can’t accept the thinking behind the proposed plan.” Ms Liu, formerly the economic planning head, was appointed Finance Minister in January after President Ma Ying-jeou won a second term. Premier Sean Chen, who has to approve the resignation, has yet to meet with Ms Liu.

the yuan will one day become a reserve currency, given World Bank predictions that China will overtake the United States as the world’s top economy before 2030. But to achieve that the yuan would need to become fully convertible and Beijing has yet to indicate any timetable for reaching that stage. Reuters

Promoting currency

The decision will reduce transaction costs and lower risks, says Japanese Finance Minister Jun Azumi

neighbours, Japan’s economic fortunes are increasingly tied to China’s economic growth and consumer demand. Dealers in Shanghai said the nearterm effect would be probably higher trading volumes and lower costs. “Direct yuan-yen trading is likely to cut trading costs, boosting yuan-

yen trading liquidity,” said a dealer at a foreign bank. “Most yuan trading against the yen now goes through the dollar, because traders refer to dollar-yuan value to price yen-yuan.” But some played down the broader impact. “From what I can see, it doesn’t

But Xu Zhong, deputy director of the financial markets department at the PBOC, was quoted by the Financial News on May 22 saying now is a good time to open up the capital account to speed up the internationalisation of the yuan. The central bank widened the yuan’s trading band last month and regulators raised quotas for global funds investing in China’s stocks and bonds to US$80 billion from US$30 billion. The move to facilitate yen-yuan trading and the debt deal are part of Beijing’s long-term efforts to elevate the yuan’s status as an international currency, which so far have mainly centred on China’s promotion of the yuan to settle trade. Beijing has struck agreements with several nations from Malaysia to Belarus and Argentina on the use of the yuan in trade and other transactions. It has expanded a pilot programme started in 2009 into a nationwide one allowing firms to settle their trade in yuan. The result has been a relative surge in the use of the currency. More than 9 percent of China’s total trade was settled in yuan in 2011, up from just 0.7 percent in 2010. Few argue against the idea that

US$346 billion total trade between Japan and China in 2011

KEY POINTS Move aimed at facilitating trade, financial transactions Deal is part of December bilateral summit agreement Marks another step to boost yuan’s international role Lower transaction costs, higher trade volumes expected

10 |

business daily May 30, 2012

ASIA

Spanish fly in the ointment for Asian investors Regional markets rise for 2nd day but Iberian nation a worry Danny McCord

asked for US$24 billion (191.8 billion patacas) in state aid. In Madrid Prime Minister Mariano Rajoy said on Monday the country was struggling to borrow as the yields on benchmark Spanish bonds soared to 6.479 percent, considered too high for governments to keep servicing their debts. However, he tried to soothe investors by saying that his government would not have to follow Greece, Ireland and Portugal in asking for a bailout to help pay its bills. “Systemic risk is on the rise, and the problems have increasingly become circular, with banks themselves large holders of government debt,” ANZ Research analysts said in a note. “Spain has become another problem child for the (European Union),” it said. The euro bought US$1.2534 in Asian trade, against US$1.2543 in London, while it was at 99.67 yen compared with 99.95 yen. U.S. markets were closed on Monday for a holiday. The U.S. dollar was at 79.50 yen Tuesday, from 79.52 yen in London. Shares in Shanghai and Hong Kong were given an added lift by a report in the state-run Shanghai Securities News that Beijing would introduce measures to jumpstart demand for automobiles. AFP

A run on Spain – eurozone woes continue despite greater calm over Greece

sian markets rose for a second straight day on Tuesday as dealers picked up bargains after heavy selling through May, with confidence boosted by hopes that Greece will avoid exiting the eurozone. Shares also received a lift on hopes that China will implement new stimulus measures to raise domestic demand and fast track some major construction projects. Investors, however, remained nervous by eurozone woes as attention turned to Spain, where a growing banking and borrowing crisis has raised fears the country could be forced to ask for a bailout.

Tokyo rose 0.74 percent, or 63.93 points, to 8,657.08, Seoul added 1.41 percent, or 25.74 points, to close at 1,849.91 while Sydney gained 1.14 percent, or 46.4 points, at 4,114,4. In afternoon trade Hong Kong was up 0.78 percent and Shanghai rose 1.18 percent. Global markets have been in a downward spiral since May 6 elections in Greece saw anti-austerity parties - who have promised to tear up terms of a bailout package - post huge gains. With no clear winner the country has been hit by political uncertainty until another election on June 17,

with analysts warning anti-bailout groups would win and in turn see Athens leave the euro. However, weekend opinion polls showed the pro-austerity conservatives in front, fuelling hopes Athens will eventually comply with the terms of the European Union-International Monetary Fund rescue deal.

Spain next? While concerns that Greece could exit the eurozone remain high, Spain’s struggles have come to the fore in the past week after Bankia, one of the country’s biggest lenders,

KEY POINTS Asian markets rise for second straight day Stocks lift on hope of new China stimulus Investors fear Spain facing IMF bailout Cheer Greek polls accepting austerity moves

Moody’s raises Philippine rating outlook

Japan unemployment, household spending up in April

‘Positive’ but no upgrade until Euro crisis clearer

Highest debt to GDP ratio among industrialised nations

he Philippines’ sovereign rating outlook was raised by Moody’s Investors Service, which cited the country’s improving debt levels. The outlook on the long-term foreign-currency Ba2 rating is now positive from stable, Moody’s said in a statement yesterday. The Philippines is rated two levels below investment grade. Emerging nations from Brazil to Indonesia have won creditrating upgrades in the past year as governments contained budget deficits and bolstered growth. The higher rating will aid President Benigno Aquino as he increases spending to a record and seeks investment in roads, bridges and airports in an effort to shield the economy from Europe’s sovereign-debt crisis. “The Philippine government is on the right track and we have seen strength in investment,” said Tetsuo Yoshikoshi, a senior economist at Sumitomo Mitsui Banking Corp. in

Singapore. “However, even with domestic factors in the Philippines more favourable than before, in this climate, Moody’s may wait and see the fallout from the European crisis before upgrading the sovereign rating.” The Philippine Stock Exchange Index advanced 1.8 percent yesterday. The peso climbed 0.3 percent to 43.41 per U.S. dollar, according to Tullett Prebon Plc. Analysts have previously warned that some Asian emerging markets remain more vulnerable to capital flight than others. President Aquino has been waging an anti-graft campaign since his election on a reform ticket two years ago. As part of that on going struggle a verdict was due yesterday on whether the Philippines’ top judge should be sacked for allegedly blocking efforts to hold expresident Gloria Arroyo account for corruption. Bloomberg

apan’s unemployment rate rose slightly in April, official data showed on Tuesday, with analysts highlighting the struggling electronics sector as contributing to job losses. The nation’s jobless rate edged up to 4.6 percent from 4.5 percent in March, the internal affairs ministry said, defying economists’ expectations that it would remain flat according to Dow Jones Newswires. However, positive data showing household spending on the rise gave hope amid a lumbering economic recovery. The news came as reports said Tuesday Panasonic may halve its 7,000-strong Osaka headquarters as part of a bid to streamline the Japanese electronics giant and turn a profit following a record US$9.7 billion annual loss. “Japan’s job market is expected to stay at the current level for now but may make progress in line with an

expected gradual recovery of the Japanese economy,” said Hideki Matsumura, senior economist at Japan Research Institute. “Japan’s job situation is divided over business sectors. The electronics sector is, for example, on the negative side as they are still struggling to find a cue to pick up,” he added. Japan’s electronics sector has been hit by the appreciation of the yen, which makes exporters’ products less competitive overseas, while falling prices in the face of tough competition and slow demand at home have also eaten into profits. The government also said Tuesday that household spending rose an inflation-adjusted 2.6 percent from a year earlier in April, higher than an average 2.2 percent growth forecast by economists. Average spending per household came to 301,948 yen (US$3,790) in the month. AFP

May 30, 2012 business daily | 11

asia

InBrief

Aussie coal mine for India investor

India’s GVK Power & Infrastructure has cleared a key hurdle toward developing its A$6.4 billion (50.5 billion patacas) Alpha coal project in the Australian state of Queensland, winning local environmental approval for what would be one of the country’s biggest coal mines. GVK’s Alpha project has made the most progress towards development approval among several in the untapped Galilee Basin in Queensland, where rival Indian group Adani Enterprises is planning a A$10.9 billion coal and rail project.

Japan stocks rise on China stimulus optimism Signs market may have been oversold in past weeks

apanese stocks rose, sending the Nikkei 225 Stock Average to a four-day advance, as China introduced measures to stimulate consumer demand and on speculation that shares were oversold. Komatsu Ltd., a construction machinery maker that gets 14 percent of sales from China, rose 3.2 percent. Nippon Yusen K.K., Japan’s largest shipping line by sales, jumped 4.4 percent after its equity rating was raised to “outperform” by Credit Suisse Group AG. Panasonic Corp. climbed 3.9 percent after the electronics maker said it’s considering restructuring, including cutting jobs. “China’s stimulus steps are moving closer to market expectations,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. “Shares that were oversold are now being bought as China’s economic measures are coming into view.” The Nikkei 225 rose 0.7 percent to 8,657.08 at the 3 p.m. close in Tokyo, with volume about the same as the 30-day average. The broader Topix Index added 0.8 percent to 727.03, reversing losses of as much as 0.8 percent. Stocks linked to China gained after the cabinet agreed to revive financial incentives for consumers to trade in used passenger cars for cash to raise demand in the

world’s biggest vehicle market, a government official said. China’s finance ministry said separately it will allocate as much as 2 billion yuan (US$317 million) every year to support purchases of energyefficient cars. Komatsu gained 3.2 percent to 1,952 yen. Fanuc Corp., a producer of robotics for Chinese factories, climbed 1.8 percent to 13,880 yen. Shipping lines gained the most among the Topix’s 33 industry groups after Credit Suisse boosted the

KEY POINTS Nikkei reverses losses, rises on China stimulus talk Shippers sail higher on Credit Suisse upgrade Panasonic climbs 3.9 percent on restructure reports Renesas tumbles 16.4 pct to record low

sector rating to “overweight” from “market weight,” saying it was “time to sow seeds” for investment returns in a year. The investment bank also raised ratings on the nation’s three biggest companies in the sector to “outperform” from “neutral.” Nippon Yusen K.K. jumped 4.4 percent to 212 yen. Mitsui O.S.K. Lines Ltd. climbed 4.8 percent to 282 yen. Kawasaki Kisen Kaisha Ltd. soared 5.8 percent to 147 yen. Panasonic climbed 3.9 percent to 536 yen. The biggest employer among companies on the Tokyo bourse may cut jobs after streamlining operations at production units, spokesman Yuko Hosaka said today. Panasonic’s headquarters staff of about 7,000 will be cut by 3,000 to 4,000 through attrition and transfers to subsidiaries, according to a Nikkei newspaper report. Troubled Renesas Electronics Corp was the biggest loser on the main board; however, slumping 16.4 percent to a record low after news that the chipmaker plans to raise more than 100 billion yen to pay for a proposed restructuring. Bank of America Merrill Lynch cut its price target on the chipmaker, citing concerns over deterioration in its profit margins under the strategic alliance with Taiwan Semiconductor Manufacturing Co. Bloomberg/Reuters

Samsung aims to upset Apple smartphone cart

Sino-Japan plastics plant for car sector Japan’s Mitsui Chemicals Inc. said on Tuesday it and China Petroleum & Chemical Corp have set up a 50-50 joint venture in China to build a two billion yuan (US$315 million) plant to make ethylene-propylene-diene terpolymer (EPT). A sharp rise in demand for EPT has been projected in China due to a rapid expansion of the auto industry and the development of infrastructure such as railways, Mitsui said.

Tuna ‘link’ to Japan quake radiation Bluefin tuna may have transported radioactive material from Japan’s quake-struck Fukushima nuclear plant across the Pacific Ocean to U.S. shores, a study has found. Researchers found “modestly elevated levels” of two radioactive isotopes in 15 bluefin tuna caught off the coast of San Diego, California in August 2011, according to the study published online on Monday by the Proceedings of the National Academy of Sciences.

Galaxy S3 gets jump on rival iPhone Miyoung Kim

outh Korea’s Samsung Electronics Co launched its latest Galaxy S smartphone in Europe yesterday. The third generation model is expected to be even more successful than its predecessor, which helped the company topple Apple Inc. as the world’s top smartphone maker. The S3, which tracks the user’s eye movements to keep the screen from dimming or turning off while in use, hits stores in 28 European and Middle East countries, including Germany and Britain, as Samsung aims to widen the gap with Apple months ahead of its rival’s new iPhone, expected in the third

quarter. The Galaxy S3, running on Google’s Android operating system, boasts a 4.8-inch (12.2 cm) screen, bigger than the 3.5-inch display on the iPhone 4S and the 4.7-inch screen on HTC’s One X model. Customers began queuing outside an electronics retail store in Berlin on Monday night eager to be the first to lay their hands on the S3. Major global carriers - from Vodafone to Singapore’s SingTel have been aggressively promoting the S3, fuelling speculation the smartphone could top the Galaxy S2’s 20 million unit sales worldwide. Samsung introduced its first Galaxy

The new Samsung Galaxy S3

in 2010, three years after the iPhone’s debut, to counter Apple’s roaring success in smartphones at a time when other rivals such as Nokia were struggling to make much impact. Samsung sold 44.5 million smartphones in January-March equal to nearly 21,000 every hour giving it 30.6 percent market share. Apple sold 35.1 million iPhones, taking 24.1 percent market share. Reuters

Criminals hit flights to Singapore - police Singapore police warned on Tuesday that members of a Chinese crime syndicate were believed to be stealing money from the bags of passengers while they slept or used toilets on flights to and from the country. The thefts were confined to some carriers on regional flights. Eighteen reports have been filed so far this year, up from only one in 2011, said Assistant Commissioner of Police Sam Tee, head of the airport police division.

12 |

business daily May 30, 2012

MARKETS Hang SENG INDEX NAME

PRICE

Day %

VOLUME

24.65

-0.2024291

27747124

ALUMINUM CORP-H

3.21

0.9433962

6975968

BANK OF CHINA-H

2.93

2.447552

389843053

AIA GROUP LTD

BANK OF COMMUN-H BANK EAST ASIA BELLE INTERNATIO BOC HONG KONG HO CATHAY PAC AIR CHEUNG KONG

5.05

12754025

26.05

-0.9505703

1366987

1.5625

10642296

PRICE

Day %

VOLUME

CHINA UNICOM HON

11.08

-0.5385996

19470468

CITIC PACIFIC

11.44

2.877698

3280740

SINO LAND CO

CLP HLDGS LTD

63.8

-0.1564945

1797612

SUN HUNG KAI PRO

CNOOC LTD

14.5

0.4155125

43751516

COSCO PAC LTD

9.22

1.096491

7027447

TENCENT HOLDINGS

ESPRIT HLDGS

12.5

1.957586

4827387

TINGYI HLDG CO WANT WANT CHINA

22.1

2.078522

8501579

HANG LUNG PROPER

12.02

-0.4966887

1937778

HANG SENG BK

92.5

1.092896

2571633

HENDERSON LAND D

CHINA COAL ENE-H

7.23

1.402525

18024088

CHINA CONST BA-H

5.21

1.165049

227493277

CHINA LIFE INS-H

18.2

0.7751938

17874467

CHINA MERCHANT

22.8

-0.4366812

1168782

CHINA MOBILE

NAME

HENGAN INTL

24.9

-0.5988024

4056980

101.2

-0.1972387

591066

39.2

1.950585

2908796

77.1

-0.3232062

596251

HONG KG CHINA GS

18.32

4369097

HONG KONG EXCHNG

109.5

-0.7252947

1550659

62.8

0.1594896

10270540

66.95

0.6010518

2853870

4.67

1.082251

260319980

14.96

-0.1335113

10051315

MTR CORP

25.2

-0.3952569

1140514

HSBC HLDGS PLC

79.65

0.1257071

6897416

CHINA OVERSEAS

16.4

4.060914

27378364

IND & COMM BK-H

CHINA PETROLEU-H

7.09

-0.1408451

31039338

LI & FUNG LTD

CHINA RES ENTERP

24.7

1.229508

2253020

HUTCHISON WHAMPO

NAME

PRICE

Day %

VOLUME

54.6

-1.176471

2868750

10.88

1.682243

4161202

88.2

0.5128205

2518046

84.9

2.412545

2359498

213.6

-1.56682

2083035

19.18

-1.438849

4138527

9.11

-0.9782609

5303535

41.25

2.86783

2720877

POWER ASSETS HOL

SWIRE PACIFIC-A

WHARF HLDG

MOVERS

1 18850

INDEX 18800.99 HIGH

18833.79

LOW

18587.49

CHINA RES LAND

14.14

3.362573

12422550

NEW WORLD DEV

8.24

1.602959

5987412

52W (H) 23707.94

CHINA RES POWER

13.72

0.8823529

2669766

PETROCHINA CO-H

10.2

0.1964637

31650019

(L) 16170.35

CHINA SHENHUA-H

27.85

1.272727

9273746

PING AN INSURA-H

56.7

0.4428698

6430028

PRICE

DAY %

VOLUME

22.45

1.354402

4604800

-0.1408451

31039338

ZIJIN MINING-H

24-May

28-May

18550

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.17

1.92926

79098709

AIR CHINA LTD-H

4.75

-1.452282

5118000

CHINA PETROLEU-H

7.09

ALUMINUM CORP-H

CHINA PACIFIC-H

NAME YANZHOU COAL-H

PRICE

DAY %

12.76

0.9493671

VOLUME 9464868

2.41

17049136

3.21

0.9433962

6975968

CHINA RAIL CN-H

6.24

-1.265823

19223000

ZOOMLION HEAVY-H

11.54

6.654344

29164120

ANHUI CONCH-H

23.75

3.938731

20401882

CHINA RAIL GR-H

3.07

0.3267974

20591000

ZTE CORP-H

15.04

0.669344

6730935

BANK OF CHINA-H

2.93

2.447552

389843053

CHINA SHENHUA-H

27.85

1.272727

9273746

5.05

12754025

CHINA TELECOM-H

3.63

0.5540166

29684000

15.24

-5.925926

12577500

DONGFENG MOTOR-H

13.48

8.012821

20906528

CHINA CITIC BK-H

3.98

0.2518892

47624006

GUANGZHOU AUTO-H

6.68

2.769231

6689701

CHINA COAL ENE-H

7.23

1.402525

18024088

HUANENG POWER-H

4.89

1.242236

9826000

CHINA COM CONS-H

7.32

1.244813

21550789

IND & COMM BK-H

4.67

1.082251

260319980

CHINA CONST BA-H

5.21

1.165049

227493277

JIANGXI COPPER-H

16.26

0.8684864

7358345

BANK OF COMMUN-H BYD CO LTD-H

3.5

-1.408451

9866000

PETROCHINA CO-H

10.2

0.1964637

31650019

CHINA LIFE INS-H

18.2

0.7751938

17874467

PICC PROPERTY &

8.18

2.122347

14181021

CHINA LONGYUAN-H

4.49

-2.391304

5595164

PING AN INSURA-H

56.7

0.4428698

6430028

CHINA MERCH BK-H

14.64

1.385042

10070351

SHANDONG WEIG-H

7.94

-0.2512563

1144000

CHINA COSCO HO-H

MOVERS

INDEX 9647.79 HIGH

9668.22

LOW

9433.07

CHINA MINSHENG-H

7.01

0.1428571

25184000

SINOPHARM-H

17.66

-1.450893

971312

52W (H) 13317.51

CHINA NATL BDG-H

9.47

3.04679

46809000

TSINGTAO BREW-H

46.65

-1.269841

207417

(L) 8058.58

10.88

1.872659

10960000

WEICHAI POWER-H

32.5

2.362205

1967864

CHINA OILFIELD-H

9700

24-May

28-May

9400

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.65

60731201

DATANG INTL PO-A

5.32

-0.5607477

1875676

SHANG PUDONG-A

8.87

0.1128668

46679612

AIR CHINA LTD-A

6.04

-1.145663

11547270

DONGFANG ELECT-A

21.52

0.419972

3804885

SHANGHAI ELECT-A

5.48

0.3663004

5113409

ALUMINUM CORP-A

6.95

2.0558

18421977

EVERBRIG SEC -A

13.39

-2.191381

10875327

SHANXI LU'AN -A

26.86

1.974184

12251316

16.13

0.1863354

17298950

GD MIDEA HOLDING

13.81

1.172161

16250599

SHANXI XINGHUA-A

75.96

3.038524

1787123

31433990

GD POWER DEVEL-A

2.58

-0.3861004

15008325

SHANXI XISHAN-A

17.81

3.426249

33893608

SHENZ DVLP BK-A

15.77

0.3180662

8569485

7.35

-0.6756757

12346259

NAME

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

9.77

-0.509165

NAME

0.3344482

8714988

30.5

-4.118202

12067944

4.71

0.856531

34425311

GREE ELECTRIC

21.73

0.4623209

8814415

SHENZEN OVERSE-A

4.8

0.2087683

12340018

GUIZHOU PANJIA-A

31.98

4.441541

8177901

SINOVEL WIND-A

15.38

0.1954397

716214

2995104

HAITONG SECURI-A

9.93

-1.292247

55031525

SUNING APPLIAN-A

9.8

-0.203666

26464092

HANGZHOU HIKVI-A

44.95

-2.705628

1569986

TONGLING NONFE-A

21.45

3.623188

22651820

0.6711409

14588830

TSINGTAO BREW-A

36.76

1.828255

1131292

24.58

1.570248

GF SECURITIES-A

NAME

CHINA CITIC BK-A

4.29

0.4683841

8097510

CHINA CNR CORP-A

4.28

2.884615

100172309

CHINA COAL ENE-A

9.17

1.325967

7127281

HENAN SHUAN-A

62.63

-0.5873016

951027

WEICHAI POWER-A

31.36

0.1277139

3212670

CHINA CONST BA-A

4.52

0.4444444

18576626

HUATAI SECURIT-A

10.51

-3.400735

22392037

WULIANGYE YIBIN

33.96

1.222057

22024196

9.79

-1.706827

40200242

XIAMEN TUNGSTEN

46.6

3.601601

10366391

HEBEI IRON-A

CHINA COSCO HO-A

-0.990099

10694933

HUAXIA BANK CO

CHINA CSSC HOL-A

31.59

-3.777033

13856811

IND & COMM BK-A

4.23

-0.4705882

39166846

XINJIANG GUANG-A

26.98

2.702703

10178311

CHINA EAST AIR-A

4.05

0.4962779

9875131

INDUSTRIAL BAN-A

13.48

0.4470939

26813155

YANGQUAN COAL -A

19.24

-0.1556824

16741889

CHINA EVERBRIG-A

2.95

23754270

INNER MONG BAO-A

44.8

2.775866

92709863

YANTAI CHANGYU-A

96.65

2.069912

743013

CHINA LIFE INS-A

17.78

0.2254791

5427391

INNER MONG YIL-A

22.95

2.227171

8238891

YANTAI WANHUA-A

14.31

1.633523

6300389

CHINA MERCH BK-A

11.64

0.6920415

46862803

INNER MONGOLIA-A

6.36

1.597444

74687876

YANZHOU COAL-A

22.84

0.7498897

6334750

CHINA MERCHANT-A

12.74

-0.5464481

12936709

JIANGSU HENGRU-A

0.3584229

1550090

YUNNAN BAIYAO-A

1.344767

1311673

JIANGSU YANGHE-A

168.08

7.077786

1645242

ZHONGJIN GOLD

22.91

0.9251101

10800754

25.61

1.950637

11486669

ZIJIN MINING-A

4.13

0.2427184

37168755

9.61

35892712

15.59

-2.501563

21029027

CHINA MERCHANT-A

0.9214568

2941985

CHINA MINSHENG-A

6.56

0.9230769

66183957

CHINA OILFIELD-A

18.3

1.779755

5328928

JINDUICHENG -A

13.83

1.54185

6861501

JIZHONG ENERGY-A

19.81

2.113402

15796424

223.19

2.418319

2884345

JIANGXI COPPER-A

CHINA PACIFIC-A

21.1

0.6199332

8143990

CHINA PETROLEU-A

6.98

0.867052

25821767

KWEICHOW MOUTA-A

CHINA RAILWAY-A

2.68

3.076923

55051692

LUZHOU LAOJIAO-A

42.78

2.246654

8739804

CHINA RAILWAY-A

4.36

3.317536

31944565

METALLURGICAL-A

2.64

1.538462

20553122

1.404056

13227933

NARI TECHNOLOG-A

19.79

-1.296758

6041703

CHINA SHIPBUIL-A

5.71

-0.1748252

18714512

NINGBO PORT CO-A

2.66

-5.673759

86235795

CHINA SOUTHERN-A

4.62

-0.4310345

15568024

PANGANG GROUP -A

8.01

3.088803

50760122

9.52

0.1051525

13367933

CHINA SHENHUA-A

CHINA STATE -A

3.25

0.931677

33058259

PETROCHINA CO-A

CHINA UNITED-A

4.1

-0.4854369

43473917

PING AN INSURA-A

41.62

0.5071239

15580665

12.72

-0.0785546

ZOOMLION HEAVY-A ZTE CORP-A

MOVERS

258

8 2630

INDEX 2614.68

CHINA VANKE CO-A

8.67

1.048951

29233305

POLY REAL ESTA-A

11601583

HIGH

2627.52

CHINA YANGTZE-A

6.72

-0.4444444

14121444

QINGDAO HAIER-A

12.03

-0.5785124

18830631

LOW

2551.46

CHONGQING WATE-A

6.31

1.610306

13894499

QINGHAI SALT-A

32.41

1.34459

3221441

CITIC SECURITI-A

12.94

-0.9946442

59987514

SAIC MOTOR-A

15.12

-0.3952569

11857754

CSR CORP LTD -A

4.83

3.426124

60371912

SANY HEAVY INDUS

13.71

0.2192982

17589018

7.5

0.6711409

61296772

SHANDONG GOLD-MI

34.34

0.556369

5819114

PRICE DAY %

Volume

PRICE DAY %

Volume

DAQIN RAILWAY -A

52W (H) 3140.10 (L) 2254.56

2550

24-May

28-May

FTSE TAIWAN 50 INDEX NAME ACER INC

1.694915

8033285

ADVANCED SEMICON

27.6

2.60223

13401741

ASIA CEMENT CORP

34.4

1.176471

2411514

ASUSTEK COMPUTER

286.5

0.1748252

AU OPTRONICS COR

12.1

2.109705

CATCHER TECH

NAME

PRICE DAY %

FORMOSA PLASTIC

79.2

0.7633588

4924205

TAIWAN MOBILE CO

FOXCONN TECHNOLO

100

2.669405

4951806

FUBON FINANCIAL

28.65

0.7029877

2044343

HON HAI PRECISIO

85.4

19331243

HOTAI MOTOR CO

182

-1.030928

TPK HOLDING CO L

403

1.639344

3475084

11086989

TSMC

81.6

28897768

1.545779

15615623

UNI-PRESIDENT

45.5

0.7751938

3628002

0.5524862

211000

UNITED MICROELEC

12.7

0.7936508

20983633

37.1

-0.669344

16678096

13.25

3.11284

21137633

47.5 -0.6276151

3251400

181

2.549575

7413801

HTC CORP

415

0.4842615

5220362

WISTRON CORP

CATHAY FINANCIAL

1.045296

6037134

HUA NAN FINANCIA

15.9

1.273885

3211189

YUANTA FINANCIAL

CHANG HWA BANK

15.3

1.324503

5062189

LARGAN PRECISION

557

-1.763668

1699624

YULON MOTOR CO

CHENG SHIN RUBBE

71.4 -0.1398601

1530596

LITE-ON TECHNOLO

34.6

1.615272

1205685

CHIMEI INNOLUX C CHINA DEVELOPMEN CHINA STEEL CORP

0.8403361

14643008

MEDIATEK INC

259

1.768173

6374458

7.05

2.173913

48787985

MEGA FINANCIAL H

20.3

2.267003

20534114

27.85 -0.1792115

13449559

NAN YA PLASTICS

55.5

1.092896

3132069

PRESIDENT CHAIN

155

1.639344

378754

QUANTA COMPUTER

75.2

-0.397351

17436399

CHINATRUST FINAN

16.3

1.242236

31855136

CHUNGHWA TELECOM

90.9 -0.3289474

6866386

COMPAL ELECTRON

30.95

-1.433121

5921422

SILICONWARE PREC

30.05

3.264605

5203867

82.5

-0.241838

6002838

SINOPAC FINANCIA

9.58

1.590668

9243472

FAR EASTERN NEW

29.25

0.5154639

4731465

SYNNEX TECH INTL

67.6 -0.1477105

2361233

FAR EASTONE TELE

69.5

0.5788712

2540344

TAIWAN CEMENT

32.55

0.1538462

4002190

17.35

1.166181

2251757

66.7

1.832061

1490246

27.35

0.7366483

829965

DELTA ELECT INC

16.75

1.823708

8749191

TAIWAN COOPERATI

FORMOSA CHEM & F

FIRST FINANCIAL

79.7

1.013942

2945574

TAIWAN FERTILIZE

FORMOSA PETROCHE

83.9 -0.1190476

688578

TAIWAN GLASS IND

Volume

MOVERS

0 2630

INDEX 4937.71 HIGH

4948.62

LOW

4874.04

4877091

52W (H) 6247.96 (L) 4643.05

2550

24-May

28-May

May 30, 2012 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) galaXy ENtErtaINMENt

Max 19.16

average 19.03

MElCO CrOWN ENtErtaINMENt

Min 18.70

19.2

32.00

12.45

19.1

31.88

12.39

19.0

31.76

12.33

18.9

31.64

12.27

18.8

31.52

12.21

18.7

last 19.06

Max 31.85

SaNDS CHINa ltD

Max 26.55

average 26.22

average 31.80

Min 31.45

Min 25.90

last 26.20

average 12.26

Min 12.18

last 12.26

WyNN MaCaU ltD 18.80

26.44

13.94

18.66

26.28

13.88

18.52

26.12

13.82

18.38

25.96

13.76

18.24

25.80

13.70 Max 13.98

average 13.88

WTI CRUDE FUTURE Jul12

91.93

1.177635923

-7.496478165

111.4899979

77.40000153

BRENT CRUDE FUTR Jul12

107.93

1.029673313

2.17741172

125.6100006

94.34999847

GASOLINE RBOB FUT Jun12

292.54

1.123440147

6.727471726

336.8899822

245.539999

GAS OIL FUT (ICE) Jul12

908.75

0.608912261

1.028349083

1045.75

810

2.485

-3.232087227

-21.9044626

5.09400034

1.981999993

HEATING OIL FUTR Jun12

284.77

0.668127828

0.063248884

331.5699816

256.0600042

Gold Spot $/Oz

1581.6

0.5467

1.0665

1921.18

1478.78

Silver Spot $/Oz

28.6788

0.5568

3.0314

44.2175

26.085

Platinum Spot $/Oz

1441.37

0.7247

3.3611

1915.75

1339.25

Palladium Spot $/Oz

597.04

1.1984

-8.6396

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 ($) AGRICULTURE ROUGH RICE (CBOT) Jul12

Min 13.72

last 13.82

18.10 Max 18.74

average 18.56

last 18.40

Min 18.14

Jul12

DAY %

YTD %

(H) 52W

PRICE

(L) 52W

17050

-0.292397661

-8.872260823

25195

16550

14.505

-2.618328298

-5.627846454

19.375

14.07500076

578.5

-12.51417769

795

572.25

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 %

0.9879 1.5707 0.9545 1.2595 79.35 7.9951 7.7621 6.3453 55.1375 31.61 1.2744 29.613 43.54 9333 78.391 1.20213 0.80187 7.9793 10.07 99.95 1.03

YTD %

1.24 0.2553 0.5238 0.6232 0.4159 0.01 0.0193 -0.0142 0.4307 0.1898 0.565 0.027 0.5466 1.2965 -0.81 -0.0774 -0.3429 0.094 -0.1688 -0.2001 -0.0097

(H) 52W

-3.2324 1.0551 -1.7182 -2.8239 -3.075 0.0563 0.0683 -0.7927 -3.7588 -0.1898 1.742 2.249 0.689 -2.8287 0.0523 1.2195 3.9308 1.9413 2.8004 -0.2901 0.0097

(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

MACAU RELATED STOCKS

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

32.27272

3.25

1.88

860057

COFFEE 'C' FUTURE Jul12

167.8

0.539245057

-27.73471146

290.75

165.0999908

CROWN LTD

8.45

-1.053864

4.449936

9.29

7.45

2176084

SUGAR #11 (WORLD) Jul12

19.62

0.204290092

-13.03191489

27.02999878

19.3599987

AMAX HOLDINGS LT

0.084

3.703704

-3.448273

0.131

0.06

3193000

COTTON NO.2 FUTR Jul12

73.62

-0.432769872

-19.37356259

117

70.52999878

BOC HONG KONG HO

22.1

2.078522

20.1087

24.45

14.24

8501579

PRICE

CENTURY LEGEND

World Stock MarketS - Indices NAME

DAY % YTD %

VOLUME CRNCY

0.233

1.304346

0.41

0.204

CHEUK NANG HLDGS

2.97

-1.655629

6.07143

4.79

2.3

44713

CHINA OVERSEAS

16.4

4.060914

26.34823

17.86

9.99

27378364

CHINESE ESTATES

8.99

-1.10011

-28.08

14.1

8.3

1247050

CHOW TAI FOOK JE

9.64

0.6263048

-30.74713

15.16

9.46

2716400

EMPEROR ENTERTAI

1.17

-0.8474576

5.405404

2.09

0.97

360000

FUTURE BRIGHT

0.83

-2.352941

97.61905

1.09

0.3

366000

GALAXY ENTERTAIN

19.06

1.167728

33.84832

24.95

8.69

9798988 591066

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

101.2

-0.1972387

9.820942

125

84.4

FTSE 100 INDEX

5410.08

1.09408

-2.910832

6084.08

4791.01

HOPEWELL HLDGS

20.55

1.231527

3.474317

24.903

18.56

418000

DAX INDEX

6398.26

0.9198825

8.475415

7523.53

4965.8

HSBC HLDGS PLC

62.8

0.1594896

6.440678

82.15

10270540

NIKKEI 225

8593.15

0.1487112

1.629747

10255.15

8135.79

4190974

HANG SENG INDEX

18800.99

0.4680066

1.988672

23707.94922

16170.35

CSI 300 INDEX

2614.689

1.616181

11.46533

3140.102

2254.567

TAIWAN TAIEX INDEX

7136

0.9102569

0.9038348

9089.47

6609.11

HUTCHISON TELE H

3.4

-2.017291

13.71237

3.71

2.33

LUK FOOK HLDGS I

18.08

-1.632209

-33.28413

46.15

16.56

1681000

MELCO INTL DEVEL

6.51

0.462963

12.82496

10.76

4.3

1598000

MGM CHINA HOLDIN

12.26

-1.288245

27.8128

17.183

7.6

7762200

MIDLAND HOLDINGS

3.79

1.88172

-6.188118

5.48

2.95

798000

NEPTUNE GROUP

0.101

5.208333

-9.00901

0.157

0.08

150000

NEW WORLD DEV

8.24

1.602959

31.62939

12.381

6.13

5987412

SANDS CHINA LTD

26.2

0.9633911

19.36218

33.05

14.9

14223231

SHUN HO RESOURCE

1.18

1.32

0.82

2.8

0.7194245

9.412256

4.686

2.241

2200265 6775000

KOSPI INDEX

1824.17

0.5345914

-0.08598959

2192.83

1644.11

S&P/ASX 200 INDEX

4068.025

0.9624381

0.2826127

4724.8

3765.9

3918.685

0.4145283

2.529914

4234.734

3217.951

FTSE Bursa Malaysia KLCI

1554.94

0.2462737

1.581596

1609.33

1310.53

SHUN TAK HOLDING

NZX ALL INDEX

774.756

-0.6061726

6.159999

806.015

700.441

SJM HOLDINGS LTD

13.82

0.4360465

10.51106

20.711

10.079

SMARTONE TELECOM

14.64

8.928575

18.5

9.8

278500

18.4

0.2178649

-5.641026

27.48

14.807

4365832

JAKARTA COMPOSITE INDEX

PHILIPPINES ALL SHARE IX

12.15

14.00

PRICE

CORN FUTURE

Max 12.42

26.60

NAME

LME ZINC

31.40

CURRENCY EXCHANGE RATES

NATURAL GAS FUTR Jun12

METALS

last 31.85

SJM HOlDINgS ltD

Commodities ENERGY

MgM CHINa HOlDINgS

3312.18

0.5625977

8.772951

3518.96

2695.06

WYNN MACAU LTD

HSBC Dragon 300 Index Singapor

524.73

-0.53

5.72

ASIA ENTERTAINME

4.17

2.962963

-29.08163

10.8692

3.66

142316

STOCK EXCH OF THAI INDEX

1139.93

0.6267489

11.17798

1247.72

843.69

BALLY TECHNOLOGI

45.38

-0.4824561

14.71183

49.32

24.74

357323

HO CHI MINH STOCK INDEX

435.48

-0.4344049

23.87428

492.44

332.28

BOC HONG KONG HO

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

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

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business daily May 30, 2012

Opinion College crackup and the online future (part I)

Mark C. Taylor

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

n the coming decade, emerging technologies will thoroughly transform higher education. Although distance learning and computer-assisted education have been around since the 1960s, financial pressures are forcing institutions to develop aggressive online programmes. When education goes online, how professors teach, what students learn and how institutions are structured will change significantly. Some changes are well under way. In 2009, about 29 percent of college students took at least one course online; by 2014, that number is projected to increase to 50 percent. Much of this growth has been driven by for-profit schools, but in the past couple of years, traditional colleges and universities have designed their own programmes in an effort to increase tuition income without expanding the physical plant. It remains to be seen whether this financial bet will pay off. The most promising initiatives involve cooperation between and among schools. Massachusetts Institute of Technology and Harvard University recently announced a US$60 million initiative to create edX, described as “a transformational partnership in online education” that will “enhance campus-based teaching and learning and build a global community of online learners.” Through video and immediate feedback, students will be able to take online versions of MIT and Harvard courses that include exams, papers and even laboratories.

Courses take off Two Stanford University computer scientists secured US$16 million in venture capital to create a new company named Coursera, which will distribute online interactive courses in the humanities, social sciences and engineering. They were inspired by the wildly popular Khan Academy, which offers more than 3,100 microlectures on a broad range of subjects, and by the extraordinary success of a class taught by their Stanford colleague Sebastian Thrun that attracted 160,000 students from 190 countries. The new venture will include Stanford, the University of Michigan, the University of Pennsylvania and Princeton University. Thrun himself cofounded the online university Udacity. Many people within and beyond the academy are sceptical about distance learning and online education. The resistance of faculty members has been the greatest obstacle to the development of effective Web-based learning. While it is true that seminars and small discussion classes can’t be taught online, they can be taught effectively using teleconferencing. Two of the most successful courses I have taught were teleseminars with the University of Helsinki in 1992 –

with incoming and outgoing images of the class and myself projected onto a small television screen – and the University of Melbourne in 1996. However effective face-to-face classes might be, the reality is that this traditional model is simply unaffordable for most students. In addition, more and more students are working and don’t have time for place-based education. Only 15 percent to 18 percent of students in post-secondary education fit the profile of 18- to 22-year-olds residing on campus. For the 85 percent so-called non-traditional students, it is necessary to develop effective alternatives. The move from the real to the virtual classroom involves fundamental changes. Education is shifting from a mass-production model to one based on what business calls mass customisation. This transformation raises rarely asked questions: Why is college duration four years? Why is every course the same length? Why does graduation depend on the completion of a specified number of courses or credits?

Modules, Not Classes The format of courses in most colleges and universities has changed relatively little over the years. Classes come in three sizes: large (lectures), medium (discussions) and small (seminars). All are roughly the same duration, running from 12 to 16 weeks in sessions of one to three hours at a time. Most courses are numbered sequentially and ordered hierarchically according to the degree of specialisation and level of difficulty.

Education is shifting from a mass production model to one based on what business calls mass customisation

The professor controls the structure and content. In the new model that is emerging, classes will be delivered in modules that can be downloaded as individual lectures or as an entire class and will be accessible in the data cloud. Rather than a uniformly prescribed programme, students will create a diversified portfolio tailored to their interests and needs. In contrast to the standardised format, they will be able to take the whole course or, customising, select parts of different courses and combine them in various ways. For example, a class on contemporary art might be linked to one on current literature and another on financial markets. By connecting and layering other courses, or parts that are

embedded in a constantly expanding and changing network, new insights that can’t be discovered in today’s siloed curriculum will emerge. As distribution systems change, courses will no longer be limited to the oneto-many model, where hundreds of students gather in university halls at a specified time to watch a “real” professor, but will become many-tomany conversations that allow for more interactivity. Students will still need guidance. For this system to work, the role of faculty members will change. They will still teach, but they will increasingly serve as academic counsellors who advise students on designing classes and integrating programmes at different institutions. This reconfiguration of courses gives students more freedom and creates the possibility of decreasing the time necessary to complete a degree, thereby lowering the cost of a college education. Just as it isn’t reasonable for every course to be the same length, it isn’t necessary to make every student spend four years in college to receive a degree. The principle of evaluation should always be the quality of knowledge acquired rather than the quantity of courses completed. Bloomberg View

(This is the third and last of a series of articles on how online education may revolutionise learning and college life. It follows the articles ‘How competition is killing higher education’ and ‘Is college’s stone age about to end?’ For editorial reasons, this last article is published in two parts. Part II will be published in tomorrow’s edition)

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

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May 30, 2012 business daily | 15

OPINION Business

Why do economies stop growing?

Leading reports from Asia’s best business newspapers

Michael Spence

wires Taipei Times Taiwan’s government is set to relax penalties for the illegal export of strategic hightech commodities to China by removing criminal liability imposed for illegal trade in controlled items, with the exception of 12 types of items related to semiconductor manufacturing equipment. The removal of criminal liability – up to five years in prison – comes as the government proposes to revise the types of specific and strategic high-tech commodities that may be exported to restricted regions. Iran, Iraq, North Korea, Cuba, Sudan, Syria and China are classified as “restricted areas”.

Bangkok Post Thailand’s export growth projection for industrial products to the European Union this year has been cut by half to 5 percent due to uncertainty in Greece and its impact on the whole region. Pimchanok Vonkhorporn, commercial affairs minister to Brussels, was quoted as saying the new target is US$25.4 billion or 60 to 70 percent of total EU shipments, as lower purchasing power in Europe and declining supplies from Thailand due to industries recovering from the floods hamper figures.

Jakarta Globe The Indonesian economy is heading in a positive direction to long-term growth, but still needs improvement, economists said on Monday. “The direction is positive but on the other hand there is a lot to do,” Christopher Eoyang, Goldman Sach’s managing director, was quoted as saying at the Globe Asia Business Summit in Jakarta. The overall picture shows that the country could grow for a long period of time, he said. However, Mr Eoyang warned that the type of FDI going into Indonesia does not translate in a transfer of technology.

Inquirer Business Supermarket chain Puregold Price Club Inc. on Monday said it had acquired all the stores of the Gant Group of Companies, which operates smaller retail rival Parco supermarkets. Puregold did not reveal the exact acquisition price, saying that it was worth “less than 10 percent of the book value of Puregold”. At the end of 2011, Puregold’s stockholders’ equity – an approximation of a firm’s book value – stood at P9.3 billion (US$212.9 million), indicating that the acquisition price would be in the vicinity of P900 million.

Nobel laureate in economics and Professor of Economics at New York University’s Stern School of Business

ver the years, advanced and developing countries have experimented, sometimes deliberately and frequently inadvertently, with a variety of approaches to growth. Unfortunately, many of these strategies have turned out to have built-in limitations or decelerators – what one might call elements of unsustainability. And avoiding serious damage and difficult recoveries requires us to get a lot better at recognising these self-limiting growth patterns early on. Here are some of the items in a growing library of decelerating growth models. In developing countries, import substitution as a way to jump-start economic diversification can work for a while; but, over time, as productivity growth lags and comparative advantage is over-ridden, growth grinds to a halt. Small, open economies are naturally somewhat specialised, which leaves them vulnerable to shocks and volatility. But, in terms of growth and living standards, the cost of economic diversification, when implemented by protecting domestic industries from foreign competition, eventually outweighs the benefits. It is better to allow specialisation, and build effective social safety nets and support systems to protect people and families during economic transitions. Such “structural flexibility” is better adapted to enabling the broad changes that rapidly evolving technological and global economic forces require. Mismanagement of naturalresource wealth underpins an especially potent self-limiting pattern of growth and development. If invested in infrastructure, education, and external financial assets, natural-resource revenues can accelerate growth. But, too often, such revenues distort economic incentives, which come to favor rentseeking and interfere with the diversification that is essential for growth.

Unsustainable paths More recently, many advanced countries have discovered a “new” set of growth models with built-in structural limitations: excessive private or public consumption, or both, usually accompanied and enabled by rising debt and inflated asset prices, and a corresponding decline in investment. This approach appears to work until domestic aggregate demand can no longer sustain growth and employment, at which point it ends in either gradual stagnation or a violent financial and economic crisis. (In fact, many developing countries have learned this the hard way, but the

lessons seem not to have crossed over to advanced countries.) But the opposite of the excessive-consumption model – excessive reliance on investment to generate aggregate demand – is also a self-limiting growth pattern. When the private and social returns of investment diminish too much, growth cannot be sustained indefinitely, even though rising investment rates can sustain aggregate demand for a while. Altering this growth pattern is a significant part of the challenge that China now faces. Rising inequality in either opportunity or outcomes (and often both) also poses threats to the sustainability of growth patterns. While people in a wide range of countries accept some degree of market-determined income variation, based on differential talents and personal preferences, there are limits. When they are breached, the typical result is a sense of unfairness, followed by resistance and, ultimately, political choices that address the inequality, though sometimes in counter-productive, growthimpeding ways.

Wealth and resources Perhaps the largest long-run sustainability issue concerns the adequacy of the global economy’s natural-resource base: output will more than triple over the coming two or three decades, as highgrowth developing economies’ four billion people converge toward advancedcountry income levels and consumption patterns. Existing economic-development strategies will require significant adaption to accommodate this kind of growth.

Some adaptation will occur naturally, as rising energy and other commodity prices generate incentives to economise or seek alternatives. But the un-priced environmental externalities – global warming and water depletion, for example – will require serious attention, not myopic, reactive mindsets and approaches. All of these self-limiting growth patterns tend to have three things in common. First, in one or several dimensions, some part of the economy’s base of tangible, intangible, and naturalresource assets is being run down. I would include social cohesion as part of the asset base: it is the one that

Perhaps the largest long-run sustainability issue concerns the adequacy of the global economy’s natural-resource base: output will more than triple over the coming two or three decades

is depreciated by excessive inequality. Measurement issues play an important role here. It is easier to run down something that is partly invisible because it is not regularly or effectively measured. Expanded measurement of the dimensions of economic, social, and environmental performance is necessary to broaden awareness of sustainability issues. Second, unidentified selflimiting growth patterns produce very bad results. Expectations come to exceed reality, and resetting the system to a sustainable growth pattern is difficult. After all, past investment shortfalls have to be made up and future-oriented investments undertaken simultaneously – a double burden that must be borne by the current generation. An inability to resolve the distributional and fairness problem can produce gridlock, paralysis, and prolonged stagnation. Finally, many of these flawed growth patterns involve fiscal distress. Contrary to the prevailing wisdom nowadays, some degree of Keynesian demand management in the transition to a more sustainable growth pattern is not in conflict with restoring fiscal balance over a sensible time period. On the contrary, applied both individually and together, fiscal stimulus and consolidation are necessary parts of the adjustment process. But they are not sufficient. The crucial missing pieces are a shift in the structure of accessible aggregate demand and restoration of those parts of the economy’s asset base that have been run down, implying the need for structural change and investment. © Project Syndicate

16 |

business daily May 30, 2012

CLOSING Spain issues bonds

Inflation down

Spain’s government will on Friday approve the issuing of joint bonds by regional governments to make it easier for them to raise capital, a spokeswoman for the economy ministry said. The government hopes the creation of the socalled “hispanobonos”, to be guaranteed by the state, will help reduce financing costs for Spain’s 17 autonomous communities, which now vary sharply. The goal is to reduce the pressure on the regions, which is often greater than the pressure on the state in general, with some regions not able to borrow on the market.

A recent weakness in energy prices reduced 12-month inflation in advanced economies to 2.5 percent overall in April, the Organisation for Economic Cooperation and Development said yesterday. Inflation in the 12 months to March in the 34 members of the organisation was 2.7 percent. Inflation slowed markedly in the United States, Britain and China. Another factor was a slowing of the rise of food prices, which had increased by 3.1 percent from 3.5 percent. “Excluding food and energy, the annual inflation rate was broadly stable at 2.0 percent in April,” the OECD said.

Lukoil sets its eyes on HKEx Russian oil producer expects to attract Asian investors with secondary listing

ussia’s No.2 oil producer Lukoil plans a secondary listing in Hong Kong within a year, a company executive yesterday, as it seeks to attract Asian investors. The listing will be of existing shares worth more than US$1 billion obtained through buybacks, Leonid Fedun, vice president of the company, told a media briefing in Hong Kong on the company’s global strategy. “Our aim going forward is to obtain a listing on the Hong Kong stock exchange. They will be existing shares,” Fedun said, adding that the secondary listing was aimed at raising Lukoil’s profile in Asia where investors might give its shares a higher valuation. “Regarding the volume I would think it would depend on demand but it is going to be in excess of one billion U.S. dollars,” he said. Moscow-listed Lukoil, which already has secondary listing in London, was in final talks to hire China International Capital Corp (CICC) and Renaissance Capital to handle the deal, although there was no plan to issue any new shares initially, he said. The company was also considering listing in Shanghai

when conditions matured, he added. China has said that it planned to set up an international board in Shanghai to attract foreign listings, but the plan has been delayed repeatedly for years. Lukoil would follow in the footsteps of U.S. luxury handbag maker Coach Inc, casino operator Melco Crown Entertainment Ltd and Brazilian mining giant Vale in choosing a rare method called “listing by introduction” to tap Hong Kong investors. Some bankers have dubbed listing without issuance of new shares an expensive marketing exercise. For companies looking to increase their profile among Asian investors a secondary listing or listing by introduction in Hong Kong may be less expensive than an IPO, but because there is no new issuance of stock, trading volumes tend to be thin, limiting their appeal.

New offerings down This year has been marked by a slump in stock issuances as investors flee equity markets on increased volatility caused by Europe’s debt troubles. IPOs had their worst start in about

Russian oil producer expects to attract Asian investors with secondary listing

four years in the Asia-Pacific region in 2012, with overall equity market activity down about a fifth from 2011. Volumes for initial offerings in Hong Kong plunged about 82 percent through early May from the same time last year. Lukoil, which has operations in 37 countries, currently has no plans to invest in Myanmar’s oil and gas sector as “there are many opportunities elsewhere,” he said. Lukoil also has no plans to invest in Australia’s natural

gas sector because assets there are “very expensive.” Lukoil reported on Monday a forecast-beating 7.7 percent increase in first-quarter earnings to US$3.79 billion, with higher oil prices helping to offset a slight fall in production. The company said its first-quarter sales grew 19 percent to US$35.26 billion from US$29.63 billion in the year-earlier period, while analysts had expected sales to rise to US$35.21 billion. Reuters

European firms bullish on China’s growth But cloudy reform outlook still a worry – survey

Most European companies are optimistic about China growth

uropean businesses operating in an increasingly competitive China are less confident that regulatory reforms will give them equal access to markets, the European Chamber of Commerce said in its annual business survey released yesterday. Still, the 557 European investors surveyed are bullish about China’s growth prospects and are unlikely to pull up stakes anytime soon. China was “increasingly important” for 74 percent of respondents’ global strategy, while only 3 percent said the world’s second-largest economy was declining in importance. The European companies in the survey generally credited their privately owned Chinese competitors with having achieved improved sales and marketing, and noted that Chinese companies as a whole enjoy better brand recognition. State-owned competitors, on the other hand, are expected to continue working on their own government relations, with little improvement seen in the quality

or pricing of their products – an indicator that those firms still rely on patronage for success, according to the survey. “Although the 12th Five Year Plan is generally regarded as positive, the fact that it is increasingly viewed as having little impact on companies’ business prospects is reflective of a lack of optimism regarding reform,” the chamber said. A large majority – 78 percent – of European firms said they were optimistic about growth in the mainland over the next two years. “Almost without exception, European companies are bullish about their sector’s growth prospects in China,” the report said. Nearly three-quarters were providing goods for the Chinese market, up from 56 percent in 2011 and 63 percent in 2010. Despite the concerns about market access, 42 percent said their profits were higher in China than their global average. Over the next two years, 63 percent said they would increase investment in China. Reuters