Macau Business Daily, May 9, 2012 by Business Daily

Year I | Number 28 | Tuesday May 9, 2012 Editor-in-chief | Tiago Azevedo Deputy editor-in-chief | José I. Duarte MOP $ 6.00

Economy heads north - but by how much?

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Shack attack means new road

Ignite sells online property site

LAWMAKERS FACE FIRST CIVIL PROTEST I

n Taiwan they throw punches in parliament. In Macau they launch paper aeroplanes. Yesterday Macau showed signs of a new political maturity – but not in the way that lawmakers were expecting. Three members of the New Macau Association made history by holding the first citizens’ protest inside the Legislative Assembly. The ‘origami kamikaze’ launched paper darts in protest at what they

claimed was “scripted and fabricated” public consultation on a new system for electing the chief executive, as a draft law on the subject was being passed by a 24- to four-vote. Compared to the rowdy diversions of Hong Kong’s LegCo, it was tame stuff. And the trio were immediately ejected from the chamber amid sharp words from many lawmakers. Had the security staff been sharp-

eyed they might have spotted trouble coming. Prior to the incident the three were sitting on the front row of the benches reserved for the public clearly sporting black tee shirts with the slogan ‘Shame on Macau gov’. In the West that kind of display is generally a sign something’s brewing. But in Macau, where the public is often accused of being apathetic to politics, it was an unforeseen and near-

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revolutionary act and a sign that perhaps locals really are interested in the city’s future. More on page 3

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Home sales value triples in March HANG SENG INDEX 20700

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20400

May 8

Sales of luxury homes during March hit 4.8 billion patacas (US$600 million) triple the value registered in February – newly released data from the Statistics and Census Service show. But the figures are likely to be skewed by two factors the relatively light housing market activity in February immediately after Chinese New Year and the low transaction volumes so far this year relative to 2011. Page 2

HSI - Movers Name

%Day

BOC HONG KONG HO

1.89

ESPRIT HLDGS

1.69

HSBC boosted by emerging markets‎

SWIRE PACIFIC-A

1.40

BANK EAST ASIA

1.40

POWER ASSETS HOL

1.29

COSCO PAC LTD

-1.71

CHINA RES LAND

-2.10

HENDERSON LAND D

-2.44

SINO LAND CO

-2.63

ALUMINUM CORP-H

-2.75

SBC beat expectations with an underlying firstquarter profit of US$6.8 billion (54,4 billion patacas) as Europe’s biggest bank saw a rebound in investment banking, growth in Asia and a fall in U.S. bad debts. HSBC said yesterday it was making good progress with its strategic revamp, including cost savings, and had shed 14,000 jobs since last year as part of chief executive Stuart Gulliver’s drive to boost profitability. “We are pleased that the

measures that are under our control, we are getting some serious traction on,” Mr Gulliver told reporters. He pointed to Hong Kong, the rest of the Asia-Pacific region and Latin America as showing the benefit, with revenues up 16 percent, 18 percent and 7 percent on the year respectively, and highlighted strong performances by the group’s commercial bank and investment bank operations, called Global Banking and Markets (GBM). HSBC has bounced back

more strongly from the 2008 financial crisis than many competitors, helped by its presence in faster-growing emerging markets. Mr Gulliver said he did not expect the euro zone to break up. In contrast, China’s economy should have a soft landing and emerging market economies should show growth of more than 5 percent this year, HSBC predicted. Mr Gulliver is quitting areas where HSBC lacks scale and increasing its focus on Asia.

Source: Bloomberg

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Wynn’s con brillo performance Steve Wynn isn’t shy. In an earnings call the Wynn Resorts chairman covered topics ranging from the budget for Wynn Cotai (he wants savings), the depths he will go to build it (92 metres underground, about the length of a football field) to the state of mind of a former business partner. Mr Wynn says he will pursue a legal case against Kazuo Okada with “great gusto”. Page 7

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business daily May 9, 2012

Photo by Manuel Cardoso

macau

Prices of new homes on the peninsula have risen as high as 66,784 patacas per square metre

Home sales value triples in March Further sales of space in One Oasis helped the value of home sales leap to 4.8 billion patacas in March Vítor Quintã

vitorquinta@macaubusinessdaily.com

emand for homes jumped in March, pushing up prices, official data released yesterday show. But the number and value of housing sales remained far below what they were a year before. Statistics and Census Service data show sales were worth 4.8 billion patacas (US$600 million) in March, having been worth 1.6 billion patacas in February. The main reason was a rise in the number of sales of expensive flats in the high-end One Oasis development in Coloane. Data released last month by the Financial Services Bureau show a batch of 185 homes in Coloane was sold in March for an average price of 74,871 patacas per square metre. All of these flats were in the same

project, the bureau said. Prices of housing elsewhere in the city also rose. In Taipa 241 homes were sold for an average price of 49,239 patacas per square metre. Of these flats, 36 percent were in one Taipa complex, the bureau said, where prices had reached 58,577 patacas per square metre. On the peninsula 833 homes were sold for an average price of 49,374 patacas per square metre, 25.2 percent more than in February. The reason for the rise was the arrival on the market of space in several developments in areas such as Areia Preta, Lamau, Horta e Costa and Guia Hill, with prices going as high as 66,784 patacas per square metre. Real estate agencies said last month that rising demand and fewer homes

on offer meant second-hand housing prices had also risen.

Office rush The number of homes sold more than doubled in March to 1,232 from 560 in February. But the number of homes sold was 45 percent fewer than a year before and the average price per square metre was 37.2 percent lower. However, real estate agencies believe the average price was 10 percent higher in the first half of April than a year before, and that it will be a further 5 percent higher this month than a year ago, with a small number of high-end houses in Taipa to be put on sale this month. The value of office sales was just short of 300 million patacas in

March, having been 141 million patacas a year before. However, the average price of office space fell because the number of sales rose to 79 from 23. Official measures to curb speculation in the housing market, including the Special Stamp Duty on the resale of new homes within two years of purchase, has pushed some investment into the office property market. Gregory Ku, Jones Lang LaSalle’s managing director here, told Business Daily that prices would only rise as companies tried to get around higher rents for offices. “This is a trend of more sizable companies to purchase their own premises as they foresee the rents in Macau will go up in the long run, and the current prices are still reasonable to them,” he said.

Growth forecast debatable Experts say the economy is doing well despite an expected slowdown but expectations of double-digit growth may be optimistic

he forecast that the economy will grow by about 18 percent this year is beginning to simmer into a controversy. In predicting 18 percent growth, down a few notches from 20.7 percent last year, the Macroeconomic Forecast of the University of Macau has raised a few eyebrows. Some experts consider it ambitious, others “absurd”, in the face of a more conservative government approach, which at end of April predicted an increase in gross domestic product of less than ten percent for the full year. British Business Association of Macau chairman Henry Brockman says the high expectations created around the city’s capacity to maintain continuous double-digit economic growth constitute the biggest problem. As long as the city can keep balanced growth and keep inflation under control, he believes, everyone will be happy. All that is important to him is that Macau’s economy is doing well. “There is no need to worry [as the forecast] is an academic interpretation,” he says. The inflation rate in Macau was

5.81 percent in 2011, due to rises in the prices of food, clothing and fuel. The consumer price index leapt by 6.22 percent from a year earlier in March, bringing the average inflation rate for the last 12 months to 6.12 percent, the highest since early 2008, when it hit about 9 percent. Mr Brockman said that the ideal solution would be to get inflation down by two percentage points, but that as many factors would have to be considered, particularly external shocks, it may be possible to achieve only 3 or 4 percent. Economist Albano Martins claims the university forecast is “absurd” and says Chief Executive Fernando Chui Sai On’s forecast is more in line with reality. Mr Chui predicted on April 26 that the economy would grow by less than 10 percent this year. This corresponded to a “baseline scenario where the growth would be between 7.9 percent and 9.9 percent in real terms,” Mr Martins told Business Daily. The forecast released by the university’s Department of Finance and Business Economics on May 4 sets the lowest expected growth

at 11.5 percent and the highest at 24.5 percent.

Too ambitious Considering that gaming and gross physical investment — investment in construction, equipment and machinery — are the main drivers of economic growth, the University of Macau values are too ambitious, Mr Martins says. In a pessimistic scenario, where gaming growth is around 27.5 percent and gross physical investment falls, which could happen if there is no green light for new construction and investment in major private projects, the GDP growth would be between 5.5 and 7.8 percent. However, the report says, despite the expected slowdown, private investment will remain healthy. It also points to the recent launch of phase two of the Galaxy Macau resort and the government approval for Wynn Macau Ltd to build a new casino resort in Cotai. In that case, a better scenario could be expected, where the GDP could be between10 and15 percent, Mr Martins said.

That forecast was based on nominal growth of gaming revenues of about 30 percent and private investment growth of around15 percent, he added. The university report says the slowdown is due to the gloomy economic situation in the U.S. and European markets, as well as the mainland’s smaller target of 7.5 percent growth this year. The university’s forecast assumes that export services growth, which includes the gaming sector, will cool from last year’s 29.4 percent to 26.7 percent this year and 22.1 percent next year. If the growth forecast by the university is sustained over the next four to five years, the economy should double in size again. Macau’s GDP per capita last year – 531,723 patacas (US$66,519) – was close to twice that of Hong Kong at HK$267,812. The authors of the report estimate that if the present growth differential between the two regions is maintained for the next seven to ten years, that ratio may double again. C.A.

May 9, 2012 business daily | 3

MACAU

Legislative Assembly passes new CE election law Approval for increase in members of Chief Executive Election Committee Tony Lai

tony.lai@macaubusinessdaily.com

Doubts raised Lawmaker Au Kam San said the government’s method was not scientific, as there was no identity verification required from those who gave their opinions. He described the consultation as “scripted from the very beginning”.

Photo by Manuel Cardoso

mid heated debate, claim and counterclaim, a draft law to change the way Macau chooses its Chief Executive passed a first reading in the Legislative Assembly yesterday. Twenty-four legislators gave their nod but four directly elected members snubbed the government’s proposal – legislator José Pereira Coutinho and the pandemocrat trio of Au Kam San, Chan Wai Chi and Ng Kuok Cheong. The proposal to increase the number of members in the Chief Executive Election Committee by 100 to 400 got the support from most legislators. It also means that any chief executive hopeful will have to guarantee the support of at least 66 committee members, up from the current 50 nominations. The distribution of the new committee members may still be adjusted during the law’s committee stage. But as set out yesterday the voting college will have 120 delegates from commerce and finance, 115 from culture, education and professional, 115 from labour, social services and religion, and 50 from politics. While most legislators gave their green light to the bill, some voiced concerns and doubts over the public consultation process leading to the government’s reform bill.

Four directly elected members snubbed the government’s proposal

Legislator José Pereira Coutinho claimed he has evidence that some immigrant workers gave their opinions to the government in the first and second rounds of public consultation. He showed three copies of opinions submitted to the government under the names of some famous world leaders – ‘Barack Obama’, ‘Aung San Suu Kyi’ and ‘David Cameron’. “I feel ashamed that this kind of consultation was carried out in Macau,” Mr Coutinho said. But the majority of legislators, as well as government officials, did not share that view. “All the consultations were carried out in the manner that follows the government regulations,” said Ms Chan. “It’s not fair to say the government fabricated the so-called mainstream opinions.” Though she admits there is still room for improvement, she stressed

the current proposal is supported by most of the Macau citizens.

Unrepresentative Legislator Leonel Alves believes most opinions submitted to the government came from the public and the falsification of opinions only accounts for “a very small number”, which couldn’t have affected the overall outcome. “There must be room for improvement as it is the first time the government has carried out a public consultation on political reform,” said Mr Alves, acknowledging the efforts by the government. Lawmaker Chan Chak Mo went further, refuting the allegations of stage-managed consultations. He said the claims lacked evidence, adding “some parties just made this up because they are unhappy that

their own proposal was not picked up by the public.” Ng Kuok Cheong said he and his association were disappointed with the end result. He said the election committee is not representative of the Macau public, as the associations choose the electoral college candidates. “Though there cannot be universal suffrage in 2013,” said Mr Ng, “I hope that Macau citizens can elect their representatives in the chief executive election committee if the rules allow.” The legislative assembly was also due to discuss two other draft laws yesterday - the new election system for the Legislative Assembly and the food safety law, but after a five-hour debate on the CE electoral college, the chamber ran out of time. The assembly’s president Lau Cheok Va said the other measures would be discussed in debates today.

The origami kamikaze Protesting trio launch paper planes during election reform debate

few New Macau Association members made political history in the city yesterday. They disrupted the Legislative Assembly with a citizens’ protest as lawmakers debated the draft law on the chief executive election method yesterday. While Secretary for Administration and Justice Florinda Chan was answering questions from legislators, three people suddenly stood up and started throwing paper aeroplanes to the centre of the room. They also shouted that the public consultation was “scripted and fabricated” and represented “degradation for democracy”. Among the three protesters were the president and vice-president of the New Macau Association, Jason Chao and Scott Chiang. Both claimed they were not representing the New Macau Association, but were there to protest as individuals concerned over the city’s

democracy development. President of the Legislative Assembly Lau Cheok Va halted the meeting and asked the protesters to leave. The trio was escorted out by the assembly staff and the discussion was disrupted for about ten minutes. “We are unsatisfied with the government, which is shameless, as it did not collect the public opinions through scientific methods,” said Mr Chao, who wore a tee shirt saying ‘Shame on Macau gov’. In a statement released by the Government Information Bureau, Mr Lau said: “The Legislative Assembly strongly condemned the protesters [for disturbing the meeting]”. Mr Lau added that the incident “will be reported to the relevant authority”. But Mr Chao said the trio was prepared for any legal consequences, adding this was the first time a Macau citizen disrupted the Legislative Assembly meeting.

No flight risk paper planes failed to dent support for election reform

Mr Chao said he believes it was useful to show that the public is not satisfied by the way the government handled the consultation process. While the government’s proposal gained approval from most legislators, the paper planes did not. Legislator Melinda Chan Mei Yi criticised the way the protesters expressed their opinions and said she hopes this “irrational behaviour” will not take place

again in future assembly meetings. The view was also widely shared by other lawmakers like Ho Iat Seng and Ho Sio Kam, who condemned the trio of protesters. But legislator Au Kam Seng, from the New Macau Association, defended the group saying they only protested during the meeting because they couldn’t get the government attention in any other way. T.L.

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HOSPITALITY Influential visitors Macau has some 2.5 million visitors per month, so prices here are inevitably sensitive to their demand. With some kinds of goods or services (for example, lodging) visitors are the major source of demand, and with others (for example, clothing and shoes) a big source of demand. Their purchasing patterns are different from those of residents. Therefore their inflation rate, measured by the tourist price index, is different from the inflation rate for the economy as a whole, measured by the consumer price index. On average, the inflation rate for visitors is usually higher. It is also more volatile because it is more sensitive to seasonal and other factors. Note that in the chart below the two indices, which have two different base periods, are re-based to the first quarter of 2001 to make comparison easier. 115

Shacks in Taipa will be demolished for road access to a new public housing complex

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The two main components of expenditure by tourists, gambling excluded, are spending on lodging and spending in restaurants. Together these amount to 40 percent of an average visitor’s outlays. If we add spending on clothing, shoes, food and drink to this sum, it accounts for more than two-thirds of an average visitor’s expenditure. The behavior of these components tells us something about the nature of the pressure that visitor demand puts on the market here. 180 160 140 120 100

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Taipa village against eviction

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Lodging prices are the more volatile and rise more sharply. Compared with the base period of October 2009 to September 2010, the lodging subindex represents price oscillations of between 30 percent and 70 percent, give or take a few percentage points. This is not, however, what has most influence on consumption by residents. Prices of food and drink, whether bought in restaurants or shops, display more sustained growth in the past few quarters. These are the components more likely to affect residents. Only prices of clothing and shoes appear to moderate somewhat the rise in the index. J.I.D.

Residents of a village in Taipa will meet the chief executive to ask for compensation and re-housing elsewhere Kelsey Wilhelm

kelsey.wilhelm@macaubusinessdaily.com

esidents of Sam Ka village in Taipa have been granted a meeting on Friday with Chief Executive Fernando Chui Sai On to discuss the forthcoming demolition of their shacks to make way for a new road for a new public housing complex. About ten representatives of the 30-strong population will attend the meeting, to be held five days before the eviction deadline of May 16. The meeting was granted after two representatives of the village, supported by legislator Au Kam San, put in an appeal. The village, comprising wooden huts and shacks made of galvanised iron sheets, lies between Avenida Sun Yat Sen and the Macau Anglican College. “Everything is being rushed through and I think the government’s attitude is bureaucratic,” Mr Au told the Portuguese-language newspaper Ponto Final. Kwok Chi Keong, who says he has been living in Sam Ka for over 30 years, told Business Daily that the residents understood the need for demolition but were unhappy with the handling of the process. They will ask the chief executive to ensure a plan is made to re-house

the residents elsewhere and provide them with compensation. “We have no idea where to go,” said Mr Kwok. He said residents had been offered no compensation for the land, which is home to some elderly people and others that suffer from mental illness. The Housing Bureau issued an eviction notice to residents, saying that the land was illegally occupied and was needed for an access road to the new public housing complex on Estrada Coronel Nicolau de Mesquita. The complex, set to be ready by the end of this year, will have 2,703 subsidised homes, almost all of which have already been sold.

Public housing plea The villagers dispute that their shacks are illegal, saying the government implicitly recognised their legality by approving applications for renovation work. One villager, Koc Va, received approval for his residence in 1969, during the Portuguese administration, but holds only an old land deed or ”Sa Chi Kai” in Cantonese, which is not recognised

by the government. The villagers want the government to give priority to those that registered their shacks in or before 1990, as most do not own other property. They are also asking to be included in the waiting lists for affordable housing for those that can afford it, and for social housing for those that cannot. Mr Kwok said that in a meeting with Housing Bureau representatives in April residents had been told that if they were eligible for public housing, they would be included in the lists, but with no priority over other applicants. Another village in the area, Cheok Ka, came under the public spotlight last year after some residents accused a developer of trying to evict them by force on the spurious grounds that they were illegally occupying the land. Sam Ka village is just the latest in a series of communities to be bulldozed to make way for public housing. Ilha Verde residents accused a developer in December 2010 of assaulting three members of one of the last remaining families in a shanty neighbourhood that once had 1,450 shacks.

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business daily May 9, 2012

macau

Vproperty sold to Asian tech group

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Budget execution One third of the year has passed and some trends start to become apparent in the execution of the region’s budget. The level of the city’s budget in relation to the Gross Domestic Product is significantly smaller than it is the case with other more developed economies. However, the behaviour of the administration, both in what it does and what it does not do, has a strong impact on the economy. For instance, where do the taxes come from and where are they spent are perennial matters of interest. Let us, think for a moment about taxes. It is not a surprise that most of the government’s revenue is coming from direct taxes on gambling revenues. For the current year they represent nothing less than 85 percent of the expected revenues.

So dependent has the city become on this windfall that it is difficult to think for a moment where the money could come from if the gaming sector was to go through some kind of crisis. And gaming revenues have been consistently underestimated in the past years, being major contributors to the huge surplus accumulated by the government. That is likely to be case again this year. Most budget items are well above what a reference value, supposing there was a regular flow throughout the year, would indicate.

The Ignite Media group will sell its second Macau asset in the space of two months for US$300,000

acau online property portal Vproperty is being sold to Iproperty Group Ltd, owner and operator of a network of property websites across Asia. Vproperty is part of media conglomerate Ignite Media, and Iproperty has agreed to pay Ignite Media US$300,000 (2.4 million patacas) out of its cash reserve upon the completion of the acquisition. Vproperty says it receives about 50,000 visits from consumers a month, generating 500,000 page views, and has 60 registered agents as paying subscribers. The Macau portal will be managed by Iproperty Group’s Hong Kong business. “We see the Macau-based Vproperty. com as a natural extension in the region. This provides us with clear market leadership in both Hong Kong and Macau, allowing us to offer advertisers a more compelling proposition and providing us improved access to property investors from mainland China,” Iproperty Group chief executive Shaun Di Gregorio said. The group is based in Kuala Lumpur in Malaysia and is listed at

the Australian stock exchange. It operates in Malaysia, Singapore, Indonesia and Hong Kong. It reported a net loss of US$2 million for its 2011 financial year. It is considered a logical next step for Vproperty to be part of a larger international platform, according to Mark Hammons, managing director of the Ignite Media group. “We look forward to working together with Iproperty and Vproperty as partners to develop commercial initiatives, including online property marketing and cross-media advertising,” he said.

Asset sale The sale of Vproperty comes about a month after Expedia Affiliate Network in effect took over another Ignite Media company, marketing website Macau.com. Fifty people at Macau.com are said to have been laid off since the beginning of the year, according to a report in the Macau Daily Times. “[The partnership] means that a handful of Macau.com operational roles have become redundant,” the newspaper quoted Mr Hammons as

saying last month. Ignite Media is controlled by private investment company MKW Capital Management, one of the backers of budget airline Viva Macau, which went bankrupt in 2010. The company accused flag-carrier Air Macau and jet fuel supplier Nam Kwong Oil of conspiring to pull the low-cost carrier out of the skies. In February 2011 two members of the U.S. Congress sent a letter to U.S. Secretary of State Hillary Clinton and U.S. Commerce Secretary Gary Locke, saying: “Other Macau-based businesses owned by MKW Capital Management … are also being harassed on a daily basis”. The accusations led to an investigation by the U.S. Department of State into whether the Macau government expropriated property of U.S. investors. Ignite Media is continuing a flurry of activity in recent months, announcing partnerships with Tencent in mainland China to promote the iWeibo open networking system, and with Sun Mobile, JSTV, and Foursquare, a U.S. social media group. X.C.

The Macau portal will be managed by Iproperty Group’s Hong Kong business

With one-third of the year passed, the collection of taxes from gambling has reached already about 40 percent of what was estimated for the full year. And they are, at this moment, almost double what they were in the same period two years ago, in absolute terms. Overall, revenues are 25 percent above the level in the homologous period on the previous year. These figures suggest a continued and big underestimation of revenues, a feature that has characterised the budget execution for most of the past years. J.I.D.

Weather Beijing 28/17o C Changchun 24/10o C

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Xian 31/18o C Shanghai 25/17o C Chengdu 33/22o C Kunming 24/15o C Haikou 34/24o C Sanya 33/28o C

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MACAU

InBrief Regulate gambling flyers, govt urged The government has been urged to regulate leaflets advertising gaming promotions and jackpots that casino employees distribute at the main entry points to the city. Experts said on the sidelines of a forum on gambling advertising and social responsibility on Monday that these flyers go against the spirit of the advertising law. “The government should add articles [to the law] to regulate gaming advertising,” Harry Wu Kam Hon, president of the Macau Advertising Association, told reporters. Mr Wu said the leaflets are “crossing the line” and “undermine the government’s effort to promote responsible gaming”. New arrivals in the city are bombarded with text messages and flyers announcing jackpot amounts and promotions.

Wynn ‘value engineers’ price of Cotai property Casino boss hints at budget below US$4 billion ceiling previously mentioned Associate Editor

S Brazil eyes expansion of Forum Macau

Brazil wants to send more instructors to teach Portuguese for the training programmes of the Forum for Economic and Trade Cooperation between China and PortugueseSpeaking Countries, known as Forum Macau. At a meeting in Brasilia, Chinese and Brazilian representatives discussed expanding Forum Macau’s activities to include education, agriculture and Portuguese-language promotion, the Brazilian foreign ministry announced on Monday. The representatives proposed to organise a Sino-Lusophone ministerial meeting in 2013. A 55-member delegation – headed by Chinese Vice-minister of Commerce Jiang Yaoping, Macau Secretary for the Economy and Finance Francis Tam Pak Yuen – has been in Brazil since Friday.

teve Wynn appears to be rowing back on the price of his planned new Wynn Cotai resort. When he spoke to Business Daily and sister publication Macau Business magazine last week, he suggested a figure of US$3.5 billion (28 billion patacas) to US$4 billion. “I thought it was little high, so we worked to value-engineer the property,” the Wynn Resorts chairman told analysts during an earnings call yesterday. “And we have been able to do that, but I haven’t confirmed what the revised number is,” he added. Matt Maddox, Wynn’s chief financial officer indicated up to 40 percent of the eventual budget would be funded by equity – supported by cash flow from current operations – thanks to the company’s current modest borrowing levels. “We’re always conservative, so it’ll be between 25 percent to 40 percent in equity and the rest will be financing that we’ll start working on this year. We’re only two times leveraged right now on a net basis,

so we’re in a great position to put in a good financing package down at Cotai to make sure we have a lot of flexibility,” said Mr Maddox. Keeping costs down will be a challenge in a market where consumer inflation is currently running at 6.1 percent, where labour import limits are in place and where Wynn Cotai’s hotel tower will be limited to 120 metres in height – not the 150 metres the company originally asked for – because of aviation safety restrictions related to Macau International Airport next to the Wynn Cotai plot. That means the property will need a bigger footprint on the ground to deliver the 2,000 suite-sized rooms that are planned.

Deeper foundations Mr Wynn also revealed the pilings for Wynn Cotai will have to be driven up to one-third deeper than on his other Macau properties. “Wynn in Macau and Wynn Encore was also on a landfill. And [there] we went down for foundations through 60

metres of landfill to get to rock to anchor our current buildings. This time, we’re going to go down, in the high-rise portion at least, at the shallowest point to 78 metres and at the deepest point, 92 metres.” The Wynn chairman conceded that there had been a seven-month wait between land approval in principle and formal gazetting by the government. But he believed he was now in a position to move forward with construction. “If the government doesn’t want you to build a building, then they don’t give you the [land] concession,” he stated. “When they give you the land concession, that means it’s time to go, do a good job and get on with it.” Edwin Fan, an Associate Director at Bank of China International in Hong Kong, told Business Daily: “The key point is the project should take three years to build and under the terms of their Macau land concession they have five years to do it. That should be sufficient time to execute Wynn Cotai successfully.”

Wynn Macau dividend may be halted to fund Cotai – analyst First quarter profit rises 10 pct, in line with market expectations

Civil service expands The number of civil servants reached 23,936 last year, 4.1 percent more than in 2010, according to data from the Public Administration and Civil Service Bureau. The number of civil servants has grown at an average annual rate of 4.6 percent over the past six years. Civil servants now account for almost 6.9 percent of the labour force of 347,000. Nearly half of all civil servants – 12,334 to be precise – are on individual contracts.

HK LegCo approves extra bridge costs A Hong Kong Legislative Council subcommittee has approved a further HK$8.8 billion for the road linking the city to Macau and Zhuhai with the Pearl River Delta Bridge, Radio Television Hong Kong has reported. The construction costs had risen because of a judicial review of the bridge’s environmental impact assessment, which delayed the start of work on the Hong Kong section and led to a higher-than-expected risk assessment of HK$3.4 billion, the government said.

ynn Macau “could halt its special dividend” to help pay for Wynn Cotai, said Anil Daswani, an analyst at Citigroup Inc. in Hong Kong, in a note to clients yesterday. In November last year Wynn Macau said it was issuing a special dividend of HK$1.20 (US$0.154) per share, payable the following month. Yesterday Wynn Resorts chairman Steve Wynn didn’t give a specific commitment on future Macau shareholder pay outs. “Special dividends are special dividends. You

take those issues as you find them at the end of the year, and you measure all the other factors,” he stated in an earnings call. Hong Kong-listed Wynn Macau reported a 10 percent increase in first quarter profit. Net income rose to US$209.2 million (1.67 billion patacas) from US$189.7 million a year earlier, the company said in a statement to the city’s stock exchange. Wynn’s Macau net revenue rose 9.8 percent to US$950.7 million from US$865.7 million a year earlier, the company added. Gross gaming

revenue market-wide in the quarter rose 27 percent according to the city’s casino regulator the Gaming Coordination and Inspection Bureau. Wells Fargo analyst Cameron McKnight said Wynn’s Macau results were as expected. “Normalised results [accounting for baccarat hold] in Macau were essentially in line with the Street, with Las Vegas about eight percent below the Street, and corporate expense slightly higher,” stated Mr McKnight in a note to investors. A.E.

Steve Wynn pursuing former business partner ‘with gusto’ ‘Irrefutable’ facts to support company’s cancellation of Kazuo Okada’s shares

teve Wynn said yesterday he would pursue his legal complaint against his former business partner Kazuo Okada with “gusto”. In February Wynn Resorts cancelled a 19.5 percent shareholding previously held by the Japanese slot machine entrepreneur. At the time the company valued the stake at US$2.77 billion but said it would pay phased compensation at a 30 percent discount. Wynn also

threw Mr Okada off the board after alleging ‘misbehaviour’ amounting to breaches of the U.S. Foreign Corrupt Practices Act. It stemmed from Mr Okada’s investment in a Philippines casino project. Yesterday Mr Wynn told analysts: “My board of directors had no choice whatsoever, which is why the vote was so unanimous on an issue as inflammatory as doing a [share] redemption,” adding, “we will

prosecute the case here in Nevada for breach of fiduciary duty and conflict of interest with great gusto, armed with a number of facts that are documented and irrefutable.” Business Daily approached two of Mr Okada’s companies - Aruze Corp. in Japan and Aruze Gaming America – for a reply to Mr Wynn’s comments, but no response was available at the time the newspaper went to press. A.E.

8 |

business daily May 9, 2012

GREATER CHINA China seeks equality with U.S. military US and Chinese defence chiefs pledged to work together on cyber threats and forge a dialogue on security as both sides steered clear of a diplomatic dispute over a top Chinese dissident. Defence Secretary Leon Panetta and China’s Defence Minister Liang Guanglie struck a positive note at a joint press conference at the Pentagon, announcing a joint counter-piracy naval exercise in the Gulf of Aden later this year and tentative plans to cooperate in the sensitive realm of cyber security. Mr Liang’s trip marked the first visit by a Chinese defence minister to Washington in nine years. The U.S. and Chinese militaries should work as equals and avoid the “stereotype” of being confrontational superpowers, Mr Liang Guanglie said on his first visit to Washington as defence minister. Speaking to reporters on Monday following talks with Defence Secretary Leon Panetta, Mr Liang disputed a question about China’s responsibility for cyber attacks against the U.S. and said the two sides discussed ways to “build a new state-to-state relationship that’s not a stereotype of two major powers predestined for conflict.” “I proposed that the two militaries build a new relationship based on equality, mutual benefit and cooperation,” said Mr Liang. Mr Liang also confirmed that China had extended an invitation for the Pentagon chief to visit China in the second half of this year, which US officials viewed as an encouraging step.

Lenovo launches smart TV in China‎ Lenovo yesterday launched its K-series of smart TVs in China, marking the PC vendor’s entry into another hot devices market with a product that boasts Google’s Android 4.0 OS, along with access to free on-demand videos and 1,000 apps. While relatively established in other parts of the world, smart TVs have been slow to catch on in China because of restrictions on content and the concept itself is relatively new. The K-series is Lenovo’s first smart TV and the company decided to launch it on its home turf because it said it would be easier to negotiate content deals in China. The slim and stylish – and large – LED flatscreen model connects to the Internet and allows viewers to download movies, play video games and Skype their relatives around the world. “We been very busy this spring sowing seeds for the future,” Lenovo’s CEO and chairman, Yang Yuanqing, said during the launch. “Lenovo not only wants to be a leading PC vendor, it also wants to be a global leader in providing Internet consumer devices.” Smart TVs are also the latest battleground for technology giants like Apple Inc, Samsung Electronics Co Ltd and Lenovo Group Ltd, each of which is trying to capture the eyeballs and wallets of consumers hungry for content displayed in the comfort of their home in 3D on a high-definition screen. “Whatever Apple does, it sets the trend for some other PC makers,” said Vincent Chen, an analyst at Yuanta Securities in Taipei. “For Lenovo, the smart TV is a good strategy for it to consolidate its market share in China. However, content will be the biggest obstacle for Lenovo’s smart TVs to be sold outside of China.”

Beijing warns Philippines over monthlong spat China has issued fresh warnings to the Philippines over a month-long stand-off in the South China Sea

hinese Vice Foreign Minister Fu Ying summoned a Beijing-based Philippine diplomat over a disputed island in the South China Sea, telling the envoy that the Philippines is escalating the issue. “I have summoned you twice last month, urging the Philippines to calm down, and to stop any actions that will expand and complicate the issues,” Ms Fu told the Philippine charge d’affairs, according to a statement on the Foreign Ministry website. “But it’s obvious that the Philippines hasn’t realised they are committing a serious mistake.” Philippine and Chinese ships have been locked in a monthlong standoff over the island in the South China Sea, which the Philippines calls the Scarborough Shoal and China calls Huangyan. On April 10, Chinese ships blocked the Philippines from inspecting Chinese fishing boats in the area. Ms Fu also said Beijing was ready for “any escalation” of the tense maritime standoff. “The Chinese side has... made all preparations to respond to any escalation of the situation by the Philippine side,” Ms Fu told the Philippine diplomat on Monday. Currently, four Chinese surveillance ships and 10 fishing boats have anchored off the disputed shoal, facing off against

Philippine and Chinese ships have been locked in a monthlong standoff over a disputed island in the South China Sea

two Philippine coastguard ships and a fisheries bureau vessel. Ms Fu said on Monday Chinese government vessels would “continue to be on alert” near the shoal and urged the Philippines to withdraw its own ships, but she stressed Beijing still wanted to seek a diplomatic solution to the crisis. The Philippines has sought arbitration in the International Tribunal on the Law of the Sea. Chinese Foreign Ministry Spokesman Liu Weimin rejected that possibility on April 26, saying its claim is indisputable. Manila last week vowed to show

restraint in the standoff. “We do not wish to escalate any tensions right now,” President Benigno Aquino’s spokesman told reporters. “Therefore, what we’re doing for now is to just to document the situation... and consequently, raise it before the [international] tribunals.” “We are endeavouring to undertake a new diplomatic initiative which we hope will help the situation,” the Philippines foreign department spokesman Raul Hernandez reiterated yesterday. AFP/Bloomberg

Chen working on travel permits Blind activist says China promising help to get passport

Chen Guangcheng spent six days under US protection after fleeing house arrest

hen Guangcheng said yesterday he has met government officials about getting a passport, raising hopes he may soon be able to leave China, but U.S. embassy staff still cannot visit him in hospital. Mr Chen has been kept in virtual isolation at the Beijing hospital where he was taken after leaving the U.S. embassy last week, unable to leave, or to receive visits from friends and U.S. officials. The blind legal campaigner spent six days under US protection after fleeing house arrest in eastern China, putting him at the centre of a major diplomatic wrangle between Washington and Beijing. Speaking to AFP by telephone from

his hospital bed, he said government officials had visited him on Monday and said they would begin procedures to allow him to leave China. “Yesterday [Monday] they came, I told them please help me do the procedures, they mainly need to get passports,” Mr Chen said. “They said they will help me get them, but I don’t know if they are actually doing that.” China said last week that Mr Chen, 40, could apply to travel abroad. He has been offered a legal fellowship at New York University, and the United States said it had received assurances from Beijing that his travel documents would be expedited, though it remains unclear how soon he could travel.

“He’s said that he is engaged with the Chinese government on the necessary arrangements,” U.S. State Department spokesman Mark Toner said at a briefing on Monday. “We’ve been in contact with him. It appears the process is going forward.” China’s Foreign Ministry had earlier said Mr Chen, who was imprisoned for four years after representing villagers who opposed forced sterilisations and abortions, had the right to apply for travel documents like any other citizen. Mr Toner said China has indicated it will grant him and his immediate family documents, and the U.S. is “making the necessary preparations” for when the paperwork comes through. Mr Chen left the embassy last Wednesday after China agreed he could move to a safe place. Since then, U.S. embassy officials have been blocked from visiting him in the hospital, which is surrounded by heavy security, and Mr Chen said neither he nor his wife was able to leave. “They [US officials] cannot come in and see me, they have not been able to come in one time,” Mr Chen said. “What I hope is that the Chinese government can fully implement their commitments they made to me concerning my rights as a citizen and my personal freedom.” AFP/Bloomberg

May 9, 2012 business daily | 9

GREATER CHINA

InBrief U.S. appoints Marut to Taiwan Christopher Marut was appointed as the next U.S. representative to Taiwan, succeeding William Stanton, the American Institute in Taiwan said yesterday in an e-mailed statement. Mr Marut will take up the post as de facto ambassador to Taiwan in August, according to the statement from AIT, the U.S. State Department’s representative organisation. The U.S. doesn’t have formal diplomatic relations with the island. The Connecticut-born career diplomat’s most recent post was head of the State Department’s Office of Australia, New Zealand and Pacific Island Affairs. Before that, he served as deputy consul general in Hong Kong, according to the statement.

Shanghai’s container volume slows in April Shanghai Port, the world’s busiest container port, saw its container volume in April rise 2.5 percent from a year earlier, slowing a touch from growth in March, data issued by the port’s operator showed yesterday. The slowdown in activity, down from year-on-year growth of 3.4 percent in March, could foreshadow tepid growth in the country’s trade in April. Actual container throughput in April was also slightly lower than in March. Economists expect trade data due to be released on Thursday to show export growth slowed to 8.5 percent in April, compared with 8.9 percent in March.

Coal imports may reach record in July China may import a record volume of coal in July as regional prices decline and electricity generation rises to records, Commodore Research & Consultancy said. Purchases may rise to 25 million metric tons in the month, Jeffrey Landsberg, president of the New Yorkbased commodity consultancy, said in a report yesterday. Imports reached a record 22.14 million tons in November, customs data show. “We remain very bullish regarding the prospects for Chinese coal imports because regional thermal coal export prices are low and Chinese electricity demand continues to surge,” Mr Landsberg said.

Al-Jazeera closes bureau in Beijing Al-Jazeera said yesterday it has shut its English-language bureau in Beijing after Chinese authorities expelled its correspondent Melissa Chan and failed to grant visas to other journalists. AlJazeera said it had no choice but to close its English-language bureau, after China also failed to grant visas to other journalists working for it, but that it would continue to work with the government to reopen. The Foreign Correspondents’ Club of China said it was “appalled” by Beijing’s actions, calling the refusal to grant Ms Chan a new visa a “grave threat to foreign reporters’ ability to work in China”.

Most Chinese stocks slid Stocks decline on property sales slump and on machinery woes Hong Kong shares suffered a fourth consecutive loss yesterday

ost Chinese stocks fell after the nation’s biggest machinery maker said it may cut its sales forecast for this year and plunging residential land sales fuelled concern the economic slowdown will worsen. Sany Heavy Industry Co. led a drop for construction equipment stocks after saying a weak market for excavators may lead to a sales shortfall. Jiangxi Copper Co., the largest producer of the metal, retreated the most in three weeks after Phillip Securities (HK) Ltd said its growth will slow substantially. “The risk of economic fundamentals can’t be ignored and the road to the recovery might be bumpy,” said Li Jun, a strategist at Central China Securities Co. in Shanghai. “The property market will continue to be a major drag on the economy.” The Shanghai Composite Index fell 3.06 points, or 0.1 percent, to 2,448.88 at the close, with 458 stocks dropping and 420 gaining. The CSI 300 Index lost 0.3 percent to 2,709.12. The Shanghai index has climbed 11 percent this year on

expectations the government will relax monetary policies to spur economic growth. Stocks in the gauge are valued at 10.5 times estimated earnings, compared with a record low of 8.9 times on January 6, according to weekly data compiled by Bloomberg. Sany Heavy lost 0.5 percent to 14.81 yuan. The company said it may cut its unit-sales forecast for this year as government efforts to curb property speculation slow construction. “Given the weak market, I think there’s a need to adjust our sales target,” Xiang Ru’an, the company’s vice president, said in a May 5 phone interview. The company, based in Changsha, Hunan province, had expected to boost sales 41 percent from last year to 29,000 excavators, he said, without elaborating on the size of the potential target cut.

Property slump Hong Kong shares suffered a fourth consecutive loss yesterday as weakness in Chinese property developers helped reverse

early gains in the face of stiff chart resistance formed after Monday’s slump. The Hang Seng Index closed down 0.25 percent at 20,484.75. The China Enterprises Index of top mainland listings in Hong Kong finished down 0.46 percent at 10,525.75. The Hang Seng Index ended near the bottom of the session’s trading range after opening near Monday’s highs, at about 20,674.5, also the bottom of a chart gap that opened up after Monday’s 2.6 percent drop. Market watchers said it would be difficult for the benchmark to scale this gap without firm, positive catalysts that could come as soon as tomorrow, when China starts posting economic data for April. Chinese developers were broadly weaker as a sector. Chinese official media confirmed yesterday that the country’s largest lender Industrial and Commercial Bank of China Ltd had suspended mortgage discounts for first-time home buyers, exacerbating fears that a sector pivotal to the world’s secondlargest economy could tank. Bloomberg/Reuters

HK regulator to okay new rules for dark-pool trading Hong Kong’s securities regulator plans to set rules governing dark pools and electronic trading this year Eleni Himaras

ong Kong’s Securities and Futures Commission is considering whether to limit dark pools, trading platforms that don’t display prices, to professional investors, Chief Executive Officer Ashley Alder said in Hong Kong yesterday. Retail investors account for about 25 percent of trading in the Chinese city, Mr Alder said. Dark pools development has grown more slowly in Asia than in the U.S. and Europe because of regulatory hurdles. Less than two percent of transactions in the region occur through dark pools, according to Investment Technology Group Inc., a New York-based brokerage. “Alternative trading systems can enhance efficiency,” Mr Alder said at the 10th Asia Pacific Trading Summit. “We have to balance that with investor protection.”

Dark pools accounted for 13.5 percent of trading in the U.S. in January and 4.6 percent of shares changing hands in Europe, according to data compiled by Rosenblatt Securities Inc. There are 13 dark pools in Hong Kong, K.C. Chan, the city’s secretary for financial services, said April 6.

Hong Kong may soon limit dark pools to professional investors, says Ashley Alder

Private venues Dark pools are private venues for trading securities that don’t publicly display bids and offers. The platforms are attractive for mutual funds and other large investors who would rather not use public exchanges where traders may sniff out and exploit their intentions. “Our regulatory responses to what’s happening will have an impact from the same regulations happening in the U.S. and Europe,” Mr Alder said.

“I believe we will get to a roughly harmonised approach.” The rules on electronic trading would also govern high-frequency trading, and look at algorithmic trading and direct market access, Mr Alder said. The regulator is seeing signs that investors are using high-frequency trading to buy and sell warrants, where no stamp duty is imposed, Mr Alder also said. Bloomberg

10 |

business daily May 9, 2012

ASIA

Indonesia’s Telkom bids for Pacnet Telkom’s bid may mark the start of a wave of overseas acquisitions by Indonesian firms Janeman Latul and Denny Thomas

T Telekomunikasi Indonesia, the nation’s biggest telecom firm, has submitted a bid to buy Asia’s leading undersea cable operator Pacnet Ltd, in a deal that could value Pacnet at about US$1 billion including debt, sources said yesterday. Telkom’s biggest overseas bid may mark the start of a wave of overseas acquisitions by Indonesian firms as they deploy profits made on the back of a fast-growing domestic economy. Telkom submitted the bid last week after it reviewed Pacnet’s business over the past few months, said one of the sources with direct knowledge of the matter. The source declined to be identified because they were not authorised to speak to the media. State-owned Telkom, which has a market value of about US$18.2 billion, hopes the deal will be completed by the end of the second quarter, although

the valuation has not yet been agreed and could be a stumbling block, one of the sources said. Telkom, seeking to expand overseas as its home market in Southeast Asia’s biggest economy matures, last year tried to buy Cambodia’s biggest mobile operator CamGSM but the deal fell through over a valuation issue. Pacnet’s mooted sale comes at a time when the undersea cable unit of India’s Reliance Communications Ltd is planning a US$1.4 billion IPO in Singapore. Pacnet is owned by groups including Ashmore Investment Management and Clearwater Capital Partners. The company put itself for sale last year after its IPO plan was hit by choppy markets, but the sale stalled after it received lower-thanexpected offers in the initial round of bidding, sources told Reuters

State-owned Telkom hopes the deal will be completed by the end of the second quarter

earlier this year. Pacnet has appointed Credit Suisse and Goldman Sachs to advise the sale. Telkom declined to comment while Pacnet was not immediately available for comment. When bids were submitted in late November, the vendors were

looking for an enterprise value of about US$1 billion, sources told Reuters earlier in January. The company had an equity value of about US$600 million, debt of about US$300 million and US$100 in cash, sources then said. Reuters

Myanmar needs policy reform for growth: IMF

Bank of Korea Governor Kim Choong-soo says the country faces equal risks from low growth and inflation

S.Korean C.Bank poised to hold rates

outh Korea’s central bank is poised to hold rates for an 11th consecutive month, a Reuters survey said yesterday, after inflation slowed to a 21-month low last month and economic growth picked up in the first quarter. All 18 analysts surveyed forecast that the Bank of Korea will leave the policy interest rate unchanged at 3.25 percent at its meeting tomorrow. If the bank changed rates later in the year, eight out of the 18 analysts said that it would be a hike while six saw no change and four predicted a cut. Nine out of 19 analysts projected no change within the year in April’s predecision poll. “We see mixed signals,” said Bank of Korea Governor Kim Choong-soo last week, referring to recent indicators that the country faces equal risks from low growth and inflation, making it more likely for the central bank to stay its hand this month. South Korea’s annual inflation rate fell for the fourth month in a row in April to an annual 2.5 percent but inflation

expectations still remain near the higher end of the central bank’s target band. The median expected inflation rate for the next 12 months in a central bank survey in April ticked down to a 13-month low of 3.8 percent but remains near the upper threshold of the Bank of Korea’s 2-to4 percent target range for interest rates. “Some view that the downturn in headline CPI will lead to a rate cut but it’s very difficult to shake off inflation worries just now,” said Lee Jung-joon, a fixedincome analyst at HMC Investment and Securities in Seoul. “The government is certainly not giving up its wariness against inflation just yet.” Views on a future cut in the base rate were minimal as South Korea grew a seasonally adjusted 0.9 percent in the first quarter from the previous quarter, up from a 0.3 percent gain in the final quarter of 2011 and matching the market’s consensus view, although industrial production in March fell sharply to -3.1 percent from February. Reuters

yanmar is set for economic takeoff and faces an historic opportunity to launch growth that would lift living standards – if it pursues the right policy mix, the International Monetary Fund said on Monday. The country, taking tentative steps towards democracy after decades of harsh military rule, has seen the publication of its annual IMF Article IV economic consultation report for the first time under its new reformist leadership. The IMF mission chief for Myanmar, Meral Karasulu, said the Southeast Asian nation had already made progress and could see GDP growth of 5.5 percent to 6 percent over the next two years. “There is very strong momentum. I have been working with the country since 2009 ... and I think over the last couple of years the progress is really very, very tangible.” “Myanmar could see strong growth if it pursues the necessary reforms to take advantage of its rich natural resources, young labour force, and proximity to some of the world’s most dynamic economies, including China and India.” The mission chief said Myanmar had prioritised the reform of its complex exchange rate system with many restrictions that gave rise to multiple exchange rates that drove up costs, discouraged foreign direct investment and caused Myanmar’s currency, the kyat, to appreciate.

The central bank had introduced a managed exchange rate system in March after the Article IV team had left. Upon its launch, Myanmar’s central bank set a reference exchange rate of 818 kyat per dollar. On Monday, it was quoted at 824, versus the old official rate of around 6 to the dollar. “Myanmar plans to complete the process of exchange rate unification, including removing all exchange rate restrictions and eliminating multiple currency practices before their target date of end2013 when the Southeast Asian Games are due to be held,” she said. Asked in a telephone news conference if that timetable was sustainable, she said: “I don’t find it is necessarily unrealistic.” She noted that the IMF’s experience in other countries suggested that eliminating informal markets for currency exchange was a task that would typically take about one to two years.

Sole responsibility Currency reform could also not be rushed, given pent-up demand from importers for foreign exchange. Myanmar has about US$9 billion in foreign currency reserves, the IMF notes, about nine months of imports. “International reserves of the country remain quite comfortable and if anything we do expect them to get better because there are significant new natural gas projects that would increase

the foreign reserves.” Most of Myanmar’s foreign reserves were managed by three state-owned banks, in addition to the central bank, an unusual arrangement. She said the IMF has recommended to Myanmar that the central bank take over sole responsibility. She voiced confidence that the reserves, once a tightly held state secret, actually existed. “I do not see that in any way the reported numbers are not there in the banks where they are being kept,” she said. The Article IV report said unleashing Myanmar’s high growth potential would require cross-cutting reforms and substantial technical assistance to modernise the financial sector with a stronger regulatory and supervisory framework. “Currently, Myanmar’s financial sector is small and repressed, with controls on financial intermediation. Modernisation of the financial sector is essential to facilitate development and prepare the sector for membership of the ASEAN Economic Community,” the IMF said. Inflation is projected at 4.2 percent in fiscal year 2011/2012, picking up to 5.8 percent the following year, but the IMF also said the current interest rate policy “appears to be appropriate in light of the economic outlook”. The IMF estimated Myanmar’s GDP at just over US$50 billion for a population of around 55 million. Reuters

May 9, 2012 business daily | 11

ASIA Toshiba’s profit drops by nearly half

Noda ‘staking political career’ on tax bills Japan’s PM needs to win over many sceptics to have the proposed sales tax hike approved Tetsushi Kajimoto Prime Minister Noda vows to enact bills by end of parliament session in June

apan’s Prime Minister Yoshihiko Noda told parliament yesterday he had no “plan B” if it rejected a proposed sales tax hike and warned lawmakers the country could ill afford any further delay in tackling its ballooning debt. Mr Noda made the plan to double the five percent sales tax to help fund the swelling costs of providing pensions and healthcare to the world’s fastest ageing society the centrepiece of his eightmonth premiership. But he needs to win over many sceptics in his own party and the opposition that wants to leverage its control of the upper house of parliament to force an early election. “Any government must recognise the urgency of tackling social security and tax reforms given big changes to Japan’s social, economic and fiscal situation after the Lehman shock and global market movements following Europe’s debt problems,” Mr Noda said. “Social security and tax reform bills must be enacted during the current session. I’m literally

staking my political career on this,” he said at the start of the parliament debate on tax and welfare reform legislation. A newspaper poll published yesterday showed Mr Noda’s support at 27 percent, its lowest since he took office last September and 60 percent of voters opposing the tax plan. The proposed sales tax hike is seen as a badly needed first step towards bringing Japan’s mammoth debt twice the size of its US$5 trillion economy.

Seeking support Moody’s Investors Service underscored the urgency last week saying that a failure to raise the sales tax could bring closer the day of reckoning where markets would start demanding higher risk premiums for Japanese debt. Possible ratings downgrades could have a greater impact than in the past given investor concerns that Europe’s efforts to contain the euro zone debt crisis could unravel after Greek and French voters rejected fiscal austerity.

Aware that he needs opposition backing, Mr Noda has offered to hold consultations with the main opposition Liberal Democratic Party (LDP) and modify the bills where possible. But the LDP stuck to its line that the Democrats, who ousted the LDP in 2009, needed to seek renewed mandate from voters to go ahead with the tax that was not a part of their original election manifesto. “You must first apologise for breaking a promise not to raise the sales tax, then you need to revise campaign pledges and go to the people,” LDP Vice-President Tadamori Oshima told Mr Noda during the parliament debate. The LDP in principle backs a plan to raise the sales tax to 10 percent by 2015, but has criticised Noda’s social security plans and is also pressuring him to sack two ministers whom the upper house censured last month. The current parliament session ends on June 21 and the government is hoping to put the bills to a vote in the lower house early next month. Reuters

Japan urges France to stick to fiscal reform plans

apan yesterday warned French president-elect Francois Hollande to keep the nation’s fiscal discipline in place amid worries that the new leader will overspend in a bid to boost the economy. Sunday’s victory for Socialist Hollande – and the huge losses for the two main parties in Greece – came amid a backlash against the austerity measures put in place across Europe to tackle the region’s debt crisis. But Finance Minister Jun Azumi told a regular news conference in Tokyo: “Our stance is unchanged. “We want [France] to do what has been decided so far, and I’d like to tell them about that if there is the opportunity,” he added, according to Dow Jones Newswires. “I don’t know whether Mr Hollande

will immediately act on what he has said in heated debates during the election campaign. “But realistically, I think it is impossible [for European nations] to give up on fiscal-rebuilding efforts,” the finance minister said, adding that he was “convinced [Mr Hollande] will respect this movement.” Mr Hollande ousted conservative Nicolas Sarkozy from the Elysee Palace on a platform promising growth rather than further cuts, which has worried many European leaders who fear it will lead to another region-wide crisis. Azumi said Monday that France’s new leader “fully understands” the need to rebuild Europe’s finances, despite his calls to review the European Union’s fiscal pact to include measures to spur growth.

The treaty now stresses austerity efforts. “I want him to act based on understanding the schemes and thinking that we, the IMF, and the G7 have cultivated up to now,” Mr Azumi said. He also said he would respond “properly and appropriately” to any speculative-driven gains in the yen, which makes Japanese exports less competitive, and reduces the value of their foreign income. Japan has previously intervened in currency markets to tame the yen’s soaring value amid fears over its impact on the world’s third-largest economy. “We must closely watch whether there are speculative movements taking advantage of political factors,” he told reporters. AFP

Toshiba said yesterday that its full-year net profit fell by almost half to US$921 million, hit by a strong yen, weak digital product sales, and last year’s natural disasters in Japan and Thailand. The company said it booked gains on strong sales of electric devices and infrastructure products, such as street lights, said Toshiba, whose operations range from consumer electronics to nuclear power plants. But the firm’s overall profit fell “due to a fluctuation in the foreign exchange and the impact of the earthquake disaster [on March 11, 2011] and floods in Thailand as well as the deterioration of digital products,” it said. While the firm saw a huge fall in profits it fared better than its rivals. Some of Japan’s best-known corporate names – including Sony and Sharp as well as Panasonic – have announced management shakeups, layoffs, sales of various businesses and tie-ups with rivals as they struggle to save their bottom lines. The strong yen has made exporters’ products more expensive overseas while eroding the value of foreignearned profits, amid weak sagging global demand. Toshiba yesterday said its net profit in the fiscal year to March was 73.7 billion yen (US$921 million), down 46.5 percent from 137.8 billion yen a year earlier. Operating profit for the year fell 14.0 percent to 206.6 billion yen on sales of 6.1 trillion yen, down 4.7 percent, it said. However Toshiba forecast a sales and profit rise for the current fiscal year to March 2013, projecting a 45 percent jump in net profit to 135.0 billion yen on sales of 6.4 trillion yen.

Mitsubishi full-year profit down 2.3pct Japan’s largest trading house Mitsubishi Corp. said yesterday full-year net profit edged down 2.3 percent due to rising costs and a slump at its Australian unit. Mitsubishi said net profit was 453.8 billion yen (US$5.7 billion) in the fiscal year to March, down from 464.5 billion yen a year earlier although the result was better than the firm’s forecast of 450.0 billion yen. Revenue rose 4.6 percent from a year earlier to 20.12 trillion yen, while operating profit dropped 14.2 percent to 271.1 billion yen, the firm said. The profit fall was partially due to an Australian coking coal project that was faced with challenges including labour troubles and poor weather, it said. The coal mining alliance between Mitsubishi and BHP Billiton is the biggest profit-generating project for the trading house, accounting for roughly 30.0 percent of earnings. Mitsubishi also said sales and general costs grew during the period due “in part to higher expenses in line with increased transactions at consolidated subsidiaries.” Profit from the firm’s energy business rose as Japan brings fossil fuel power stations back online and turns off nuclear plants amid public fears about atomic energy following the Fukushima crisis last year. Mitsubishi also forecasted a sales and profit rise for the current fiscal year to March 2013, projecting group net profit at 500 billion yen on sales of 21.0 trillion yen. The trader is betting on higher coking coal and steel sales, as well as oil prices averaging US$120 per barrel. Mitsubishi shares rose 3.7 percent to 1,703 yen at the close in Tokyo while Mitsui gained 0.4 percent to 1,194 yen.

12 |

business daily May 9, 2012

MARKETS Ticker NAME

Hang SENG INDEX Ticker NAME

PRICE

Day %

VOLUME

(H) 52W

(L) 52W

PRICE

Day %

VOLUME

(H) 52W

(L) 52W

HUTCHISON WHAMPO

73.5

-0.4065041

4356911

93.1

53.6

1398

IND & COMM BK-H

5.02

-0.3968254

193582623

6.56

3.46

494

LI & FUNG LTD

16.46

0.8578431

14129285

20.15

10.82

1299

AIA GROUP LTD

27.1

-0.1841621

21302568

29.9

19.84

MTR CORP

26.85

-0.3710575

1822994

28.8

22.45

2600

ALUMINUM CORP-H

3.54

-2.747253

17162914

7.18

3.2

NEW WORLD DEV

9.27

-0.6430868

8227421

12.418

6.13

3988

BANK OF CHINA-H

3.05

-0.6514658

483596832

4.35

2.2

857

PETROCHINA CO-H

10.88

-0.729927

50646281

11.92

8.59

3328

BANK OF COMMUN-H

5.67

-0.1760563

35009004

7.409

4.15

2318

PING AN INSURA-H

63.7

0.3149606

6745794

84.7

37.35

58.75

1.293103

2777389

64.8

52.15

12.6

-2.627512

11114906

14.16

8.482

-1.385042

11831087

122

85.45

BANK EAST ASIA

29.05

1.396161

2481850

34.45

21.85

POWER ASSETS HOL

1880

BELLE INTERNATIO

14.76

-1.6

5931311

17.54

11.38

SINO LAND CO

2388

BOC HONG KONG HO

24.25

1.890756

19053958

24.65

14.24

SUN HUNG KAI PRO

293

CATHAY PAC AIR

13.3

0.9104704

3636111

20.05

11.8

SWIRE PACIFIC-A

90.65

1.39821

1211241

102.539

69.321

CHEUNG KONG

100.9

-0.3948667

3670900

122.4

79.1

700

TENCENT HOLDINGS

231.2

0.1733102

2745267

248.8

139.8

1898

CHINA COAL ENE-H

8.49

-1.27907

18752354

11.66

6.59

322

TINGYI HLDG CO

20.55

4844415

17.84

939

CHINA CONST BA-H

5.79

-0.6861063

228395948

7.36

4.41

151

WANT WANT CHINA

9.36

-0.952381

15742846

9.78

6.03

2628

CHINA LIFE INS-H

20.4

-0.729927

31272400

28.1

17.04

WHARF HLDG

44.4

0.7945516

3090824

33.15

144

CHINA MERCHANT

24.4

0.6185567

3326012

35.2

941

CHINA MOBILE

87.35

-0.9637188

12878844

89.45

68.05

688

CHINA OVERSEAS

16.36

-0.968523

17859382

17.86

9.99

386

CHINA PETROLEU-H

7.9

-1.373283

100350416

9.67

6.22

291

CHINA RES ENTERP

28.5

-1.041667

2566703

35.5

1109

CHINA RES LAND

13.96

-2.103787

13205030

15.6

7.28

836

CHINA RES POWER

13.68

-0.2915452

1838008

16.2

10.82

1088

CHINA SHENHUA-H

32.55

-0.3062787

8887432

40.2

27.1

762

CHINA UNICOM HON

13.4

12339301

17.68

12.6

267

CITIC PACIFIC

12.44

-0.3205128

2252334

10.26

CLP HLDGS LTD

66.3

0.4545455

1969279

75.2

62.1

883

CNOOC LTD

15.74

-0.6313131

43608813

19.7

11.2

1199

COSCO PAC LTD

10.36

-1.70778

8281972

16.3

7.52

14.42

1.692525

12664730

31.35

7.55

27.3

0.1834862

5617833

35.3

20.85

106.4

0.8530806

1221799

125

84.4 33.2

330

ESPRIT HLDGS

101

HANG LUNG PROPER

HANG SENG BK

HENDERSON LAND D

41.9

-2.444703

3661884

52.95

1044

HENGAN INTL

77.65

-0.4487179

1826526

83.45

56.8

HONG KG CHINA GS

19.82

0.3036437

5127742

20.65

16.68

388

HONG KONG EXCHNG

121.2

-0.4108463

3831063

176

99.15

HSBC HLDGS PLC

69.05

0.5094614

13994847

84.05

Shanghai Shenzhen CSI 300 NAME

INDEX 20484.75 52W (H) 23924.48 (L) 16170.35 MOVERS 16 30 2

IN FOCUS BOC Holdings (2388 HK) share performance

25 22 19 16 13

13-Apr-2011

8-May-2012

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

AGRICULTURAL-A

2.76

1.098901

104131459

CHINA VANKE CO-A

9.04

-0.3307607

63979364

PING AN INSURA-A

41.59

-0.9526078

29373266

AIR CHINA LTD-A

6.57

-1.793722

19113688

CHINA YANGTZE-A

6.68

-0.2985075

32297521

POLY REAL ESTA-A

12.99

36832919 19099074

ALUMINUM CORP-A

NAME

VOLUME

7.39

-1.466667

49425778

CITIC SECURITI-A

13.09

-2.020958

108660903

QINGDAO HAIER-A

11.99

0.08347245

ANHUI CONCH-A

17.03

0.5312869

25141195

CSR CORP LTD -A

4.95

25999185

QINGHAI SALT-A

34.93

-0.9920635

7426502

BANK OF BEIJIN-A

10.52

-0.5671078

31301775

DAQIN RAILWAY -A

7.61

0.1315789

55088042

SAIC MOTOR-A

-1.173564

30577435 32097605

BANK OF CHINA-A

3.07

-0.3246753

30495955

DATANG INTL PO-A

5.45

0.5535055

11906265

SANY HEAVY INDUS

14.81

-0.5372733

BANK OF COMMUN-A

4.89

-0.2040816

89720674

DONGFANG ELECT-A

22.32

-0.8440693

7922448

SHANDONG GOLD-MI

36.1

-1.285206

9945506

BAOSHAN IRON & S

5.03

-1.178782

39040149

EVERBRIG SEC -A

13.37

-2.479942

16999556

SHANG PUDONG-A

9.36

-0.6369427

86721348

26.67

-0.4107543

4247149

GD MIDEA HOLDING

13.94

-1.692525

26740864

SHANGHAI ELECT-A

5.75

-2.871622

11903333

4.6

0.2178649

23521588

GD POWER DEVEL-A

2.64

0.3802281

69890222

SHANXI LU'AN -A

28.73

-0.7941989

13173058

BYD CO LTD -A CHINA CITIC BK-A CHINA CNR CORP-A

4.45

-0.4474273

40238173

GF SECURITIES-A

32.22

-1.917808

15741310

SHANXI XINGHUA-A

77.99

-1.651955

1981300

CHINA COAL ENE-A

9.68

-0.2061856

14687938

GREE ELECTRIC

22.17

-0.4490346

18707374

SHANXI XISHAN-A

18.5

-1.175214

31892585

SHENZ DVLP BK-A

16.54

-0.3614458

17512997

7.78

-0.1283697

28219380

CHINA CONST BA-A

4.75

-0.210084

44472301

GUIZHOU PANJIA-A

33.05

1.31821

9413668

CHINA COSCO HO-A

5.47

0.5514706

23125918

HAITONG SECURI-A

10.01

-1.766438

102767985

CHINA CSSC HOL-A

36.94

1.067031

11266817

HANGZHOU HIKVI-A

47.71

-0.06284039

2269716

CHINA EAST AIR-A

4.3

-0.6928406

22752905

HEBEI IRON-A

3.14

-0.3174603

39991981

SHENZEN OVERSE-A SINOVEL WIND-A

16.87

3.370098

7463094

SUNING APPLIAN-A

10.25

-0.194742

53336249 21793713

CHINA EVERBRIG-A

3.08

0.3257329

99759155

HENAN SHUAN-A

67.23

-0.3557137

2676394

TONGLING NONFE-A

22.76

-2.107527

CHINA INTL MAR-A

15.64

0.9032258

14237205

HUATAI SECURIT-A

10.19

-1.735776

19693197

TSINGTAO BREW-A

36.11

0.1942286

2513497

CHINA LIFE INS-A

18.61

-0.1609442

16431388

HUAXIA BANK CO

10.88

-0.5484461

33970568

WEICHAI POWER-A

34.5

-0.862069

7583464

CHINA MERCH BK-A

12.37

-0.4025765

62407886

IND & COMM BK-A

4.42

64042338

WULIANGYE YIBIN

CHINA MERCHANT-A

13.18

-2.007435

15420582

INDUSTRIAL BAN-A

14.35

0.3496503

55618333

XINJIANG GUANG-A

CHINA MERCHANT-A

23.44

0.2137666

7063153

INNER MONG BAO-A

44.77

5.316396

131837613

CHINA MINSHENG-A

6.77

-0.7331378

143911302

INNER MONG YIL-A

23.33

-0.7234043

12873472

-2.37099

30393856

INNER MONGOLIA-A

6.59

1.540832

132552218

YANTAI WANHUA-A

CHINA NATIONAL-A

36.5

-2.039721

28738365

27.62

0.4363636

20436024

YANGQUAN COAL -A

20.6

-0.5311444

15790989

YANTAI CHANGYU-A

100.5

1.167707

1257758

15.06

-0.7905138

16992173

CHINA OILFIELD-A

18.4

0.3818876

20832601

JIANGSU YANGHE-A

167.8

-1.572032

2285909

YANZHOU COAL-A

24.46

-1.211632

8503950

CHINA PACIFIC-A

21.67

0.09237875

28010108

JIANGXI COPPER-A

26.91

-1.392451

17880437

YUNNAN BAIYAO-A

52.48

-0.3039514

2302830

CHINA PETROLEU-A

7.25

-0.5486968

42491919

JINDUICHENG -A

14.93

-0.5992011

12140453

ZHONGJIN GOLD

23.59

-0.7989907

10774226

CHINA RAILWAY-A

2.75

0.7326007

33617934

JIZHONG ENERGY-A

20.88

-1.089531

10156064

ZIJIN MINING-A

4.38

-0.2277904

62989115

234.11

-0.1705684

3666491

ZOOMLION HEAVY-A

45.3

-1.650022

9676732

ZTE CORP-A

CHINA RAILWAY-A

4.44

0.4524887

28066512

KWEICHOW MOUTA-A

CHINA SHENHUA-A

27.29

18224869

LUZHOU LAOJIAO-A

CHINA SHIPBUIL-A

6.28

-0.1589825

70871191

METALLURGICAL-A

2.7

0.3717472

25696007

CHINA SHIPPING-A

3.2

1.587302

30392684

NARI TECHNOLOG-A

21.4

-0.4187994

11292669

CHINA SOUTHERN-A

4.87

-1.616162

49688649

NINGBO PORT CO-A

2.68

24771326

CHINA STATE -A

3.46

2.366864

103075756

PANGANG GROUP -A

8.8

-1.565996

85237136

CHINA UNITED-A

4.34

-0.6864989

87786503

9.93

-0.501002

16737417

Hang SENG CHINA ENTErPRISE INDEX NAME

PETROCHINA CO-A

NAME

10.37

-0.9551098

63038272

17.4

-0.5714286

16658510

INDEX 2709.116 52W (H) 3212.05 (L) 2254.567 MOVERS 98 178 24

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

5.85

-0.1706485

5643075

PETROCHINA CO-H

10.88

-0.729927

50646281

CHINA MERCH BK-H

-0.1248439

8135721

PICC PROPERTY &

9.67

-0.9221311

17828934

CHINA MINSHENG-H

7.8

-0.6369427

30272487

PING AN INSURA-H

63.7

0.3149606

6745794

CHINA NATL BDG-H

9.65

0.5208333

31698932

SHANDONG WEIG-H

8.37

1.331719

4618762

CHINA LONGYUAN-H

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.46

-1.142857

119650573

AIR CHINA LTD-H

5.83

3.185841

22772490

CHINA OILFIELD-H

11.44

7738276

SINOPHARM-H

-0.1051525

2500135

ALUMINUM CORP-H

3.54

-2.747253

17162914

CHINA PACIFIC-H

24.6

-1.796407

8660656

TSINGTAO BREW-H

47.65

3.027027

1638001

ANHUI CONCH-H

23.7

-0.4201681

7388114

CHINA PETROLEU-H

7.9

-1.373283

100350416

WEICHAI POWER-H

36.1

0.8379888

2246782

BANK OF CHINA-H

3.05

-0.6514658

483596832

CHINA RAIL CN-H

5.6

-2.268761

14648262

YANZHOU COAL-H

15.56

-0.7653061

14890175

BANK OF COMMUN-H

5.67

-0.1760563

35009004

2.75

0.7326007

9626985

ZIJIN MINING-H

2.43

-1.619433

49048118

19.16

0.8421053

2446541

CHINA SHENHUA-H

32.55

-0.3062787

8887432

ZOOMLION HEAVY-H

10.46

1.750973

20609506

CHINA CITIC BK-H

4.74

-1.25

28232686

CHINA TELECOM-H

-0.2493766

46360703

ZTE CORP-H

18.04

2381161

CHINA COAL ENE-H

8.49

-1.27907

18752354

DONGFENG MOTOR-H

14.1

3.524229

20069503

CHINA COM CONS-H

7.02

-0.8474576

11341936

GUANGZHOU AUTO-H

7.39

2.638889

9349944

CHINA CONST BA-H

5.79

-0.6861063

228395948

HUANENG POWER-H

4.48

-0.4444444

9250155

CHINA COSCO HO-H

4.24

0.4739336

9915593

IND & COMM BK-H

5.02

-0.3968254

193582623

CHINA LIFE INS-H

20.4

-0.729927

31272400

JIANGXI COPPER-H

18.14

-0.8743169

11330348

NAME

PRICE DAY %

BYD CO LTD-H

FTSE TAIWAN 50 INDEX NAME ACER INC ADVANCED SEMICON ASIA CEMENT CORP ASUSTEK COMPUTER

PRICE DAY %

CHINA RAIL GR-H

Volume

INDEX 10525.75 52W (H) 13317.51 (L) 8058.58 MOVERS 12 26 2

NAME

PRICE DAY %

Volume

FAR EASTERN NEW

31.5

-3.963415

12399080

SINOPAC FINANCIA

10.1

4950541

FAR EASTONE TELE

64.7

1.889764

7971506

SYNNEX TECH INTL

1.744186

2559714

Volume

FIRST FINANCIAL

17.3 -0.8595989

8807807

TAIWAN CEMENT

35.05 -0.8486563

5312423

FORMOSA CHEM & F

82.6

0.6090134

3586780

TAIWAN COOPERATI

17.75 -0.8379888

2035456

FORMOSA PETROCHE

87.2

0.8092486

1842614

TAIWAN FERTILIZE

80 -0.4975124

16975682

TAIWAN GLASS IND

4213605

TAIWAN MOBILE CO

34.05

0.2945508

5421097

29.5

0.1697793

26208009

35.05 -0.4261364

4061036

FORMOSA PLASTIC FOXCONN TECHNOLO

104.5

71.3

0.8486563

29.55 -0.1689189 93.3

1401100 825926 5824402

325

4.669887

8905488

FUBON FINANCIAL

30.2 -0.6578947

17081847

TPK HOLDING CO L

373

-2.356021

4862052

13.35

-2.197802

38013082

HON HAI PRECISIO

88.5

27939762

TSMC

84.4

-1.401869

45656390

CATCHER TECH

195

1.827676

7708886

HOTAI MOTOR CO

190 -0.5235602

667293

UNI-PRESIDENT

47.45

5.210643

19331960

CATHAY FINANCIAL

31.1

0.974026

11325363

HTC CORP

450 -0.2217295

9353280

UNITED MICROELEC

14.75

1.724138

33378587

CHANG HWA BANK

16.15

-0.308642

7086381

HUA NAN FINANCIA

16.5

0.6097561

4542962

WISTRON CORP

44.55

0.6779661

11013559

CHENG SHIN RUBBE

1.23119

4529544

LARGAN PRECISION

473.5 -0.7337526

1663096

YUANTA FINANCIAL

13.65 -0.3649635

20850678

CHIMEI INNOLUX C

12.5 -0.7936508

13932999

LITE-ON TECHNOLO

36.7

1.241379

3214265

YULON MOTOR CO

CHINA DEVELOPMEN

7.65

0.7905138

56309977

MEDIATEK INC

265

-3.107861

8748186

CHINA STEEL CORP

28.7

-0.173913

10771138

MEGA FINANCIAL H

22.35

17542085

CHINATRUST FINAN

18.65

1.084011

12908394

NAN YA PLASTICS

60.4

1.512605

5895518

CHUNGHWA TELECOM

91.1

0.6629834

6017275

PRESIDENT CHAIN

159.5

-0.3125

546106

COMPAL ELECTRON

34.2

-1.156069

7502225

QUANTA COMPUTER

81.9

1.111111

10549485

DELTA ELECT INC

94.5

0.9615385

5701100

SILICONWARE PREC

34.3

1.329394

7958942

AU OPTRONICS COR

50.5

0.7984032

INDEX 5193.29 52W (H) 6247.96 (L) 4643.05 MOVERS 24 21 5

4733434

May 9, 2012 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) gaLaXy eNTerTaINMeNT

Max 23.30

average 23.00

MeLCo CroWN eNTerTaINMeNT

Min 22.80

23.3

37.10

13.90

23.2

36.94

13.84

23.1

36.78

13.78

23.0

36.62

13.72

22.9

36.46

13.66

22.8

Last 23.00

Max 37.00

SaNDS CHINa LTD

Max 29.55

average 29.43

MgM CHINa HoLDINgS

average 36.97

Min 36.35

Last 36.35

36.30

SJM HoLDINgS LTD

Min 29.25

23.5

29.52

17.3

23.3

29.44

17.1

23.1

29.36

16.9

22.9

29.28

16.7

22.7

16.5 Max 17.18

average 16.98

Min 16.74

MAJORS

1.02 0.94 ASIA PACIFIC

0.86 0.78

9-May-2011

8-May-2012

0.70

MACAU RELATED STOCKS PRICE

DAY % YTD %

(H) 52W

(L) 52W

VOLUME CRNCY

ARISTOCRAT LEISU

2.96

-0.3367003

34.54545

3.25

1.88

3171944

CROWN LTD

9.19

2.681564

13.59703

9.29

7.45

1809869

AMAX HOLDINGS LT

0.09

1.123596

3.448279

0.132

0.06

13362500

BOC HONG KONG HO

24.25

1.890756

31.79348

24.65

14.24

19053958

CENTURY LEGEND

0.255

10.86956

0.41

0.204

3.15

-0.9433962

12.5

4.79

2.3

50000

CHINA OVERSEAS

16.36

-0.968523

26.04007

17.86

9.99

17859382

CHINESE ESTATES

11.02

2.607076

-11.84

14.3

10.2

172895

CHOW TAI FOOK JE

12.26

0.9884679

-11.92529

15.16

11.46

3139190

EMPEROR ENTERTAI

1.33

-2.205882

19.81982

2.09

0.97

889000

FUTURE BRIGHT

1.04

147.6191

1.09

0.3

9408000

1.098901

61.51686

24.95

8.69

15033790

106.4

0.8530806

15.46392

125

84.4

1221799

HOPEWELL HLDGS

20.8

0.4830918

4.733129

24.903

18.56

555100

HSBC HLDGS PLC

69.05

0.5094614

17.0339

84.05

13994847

HUTCHISON TELE H

3.4

-1.162791

13.71237

3.6

2.13

6046013

LUK FOOK HLDGS I

19.6

-1.209677

-27.67528

46.15

19.2

3878000

HANG SENG BK

22.5

Last 16.74

Max 23.50

average 22.88

Last 22.90

Min 22.50

CURRENCY EXCHANGE RATES 1.10

GALAXY ENTERTAIN

13.60

Last 13.60

17.5

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

AUD

1.0142

-0.5394

-0.6563

1.1081

0.9388

GBP

1.6136

-0.3335

3.8152

1.6618

1.5235

CHF

0.9224

-0.1951

1.7021

0.9596

0.7071

EUR

1.3023

-0.2145

0.4784

1.4697

1.2624

JPY

79.86

0.0751

-3.694

84.18

75.35

MOP

7.9945

0.02

0.0638

8.0449

7.9823

HKD

7.7615

0.0232

0.076

7.8113

7.7529

CNY

6.3081

-0.0048

-0.2077

6.5098

6.2769

INR

53.115

-0.3765

-0.0941

54.305

43.855

THB

-0.0645

1.7742

31.96

29.63

SGD

1.2473

-0.1122

3.9525

1.3199

1.1992

Australian Dollar (AUD) exchange rate with the Euro (EUR) and the US dollar (USD)

CHEUK NANG HLDGS

Min 13.60

29.60

29.20

Last 29.45

average 13.69

WyNN MaCaU LTD

IN FOCUS

NAME

Max 13.82

CROSSES

AUD HKD

TWD

29.325

0.0307

3.2532

30.715

28.48

PHP

42.267

0.291

3.7216

44.35

41.879

IDR

9238

-0.1082

-1.8294

9367

8458

AUDJPY

80.993

0.6136

-3.162

88.637

72.057

EURCHF

1.20125

0.0133

1.2937

1.27019

1.00749

EURGBP

0.80706

-0.119

3.2625

0.90835

0.80358

EURCNY

8.2166

-0.0487

-1.0028

9.514

7.9674

EURMOP

10.4117

0.2286

-0.4015

11.7768

10.1015

EURJPY

104

0.2692

-4.1731

117.9

97.04

HKDMOP

1.03

-0.0097

1.0311

1.0288

World Stock MarketS - Indices COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

NAME

13008.53

-0.2280977

6.474048

13338.66016

10404.49

NASDAQ COMPOSITE INDEX

2957.76

0.04803236

13.53512

3134.17

2298.89 4791.01

FTSE 100 INDEX

5633.2

-0.3865565

1.093276

6084.08

DAX INDEX

6508.03

-0.9353861

10.33644

7566.410156

4965.8

9181.65

0.6854813

8.589838

10255.15

8135.79

MELCO INTL DEVEL

7.43

0.541272

28.7695

10.76

4.3

4683200

NIKKEI 225

MGM CHINA HOLDIN

13.6

-0.1468429

41.78255

17.183

7.6

6800000

HANG SENG INDEX

20484.75

-0.2527189

11.12247

23707.94922

16170.35

MIDLAND HOLDINGS

3.84

-0.5181347

-4.950494

5.7

2.95

696000

CSI 300 INDEX

2709.116

-0.3187162

15.49079

3164.65

2254.567

NEPTUNE GROUP

0.11

-0.9009022

0.157

0.08

NEW WORLD DEV

9.27

-0.6430868

48.08306

12.418

6.13

8227421

TAIWAN TAIEX INDEX

7545.71

0.1012194

6.697179

9089.47

6609.11

SANDS CHINA LTD

29.45

1.376936

34.16856

33.05

14.9

17077396

SHUN HO RESOURCE

1.19

1.32

0.82

SHUN TAK HOLDING

3.08

-0.9646302

20.35348

4.686

2.241

3565419

SJM HOLDINGS LTD

16.74

-0.7117438

32.01892

10.22

14566656

SMARTONE TELECOM

15.2

1.333333

13.09524

18.5

9.8

1593312

WYNN MACAU LTD

22.9

0.2188184

17.4359

27.48

14.807

9969673

ASIA ENTERTAINME

5.32

-3.096539

-9.523811

10.8692

4.72

65988

BALLY TECHNOLOGI

47.18

0.2549936

19.26188

49.32

24.74

331619

BOC HONG KONG HO

3.05

27.23244

3.15

1.81

4500

GALAXY ENTERTAIN

2.99

-1.644737

59.89305

3.24

1.08

7355

INTL GAME TECH

15.12

-1.305483

-12.09303

19.15

13.38

2083401

JONES LANG LASAL

78.97

-1.324503

28.90957

101.362

46.01

460341

LAS VEGAS SANDS

53.35

-1.440975

24.85373

62.09

36.08

8178022

MACAU CAPITAL IN

N/A

0.11

MELCO CROWN-ADR

14.2

2.158273

47.60915

16.15

7.05

8735124

MGM CHINA HOLDIN

1.78

-6.315789

49.36731

2.21314

1.00254

1100

MGM RESORTS INTE

12.16

-2.485966

16.58677

16.05

7.4

11798142

SHUFFLE MASTER

17.16

-0.1164144

46.41638

18.77

7.35

584601

2.26

2.262443

38.65031

2.64

1.28

900

125.19

-1.734694

13.30437

165.4931

101.02

2977703

SJM HOLDINGS LTD WYNN RESORTS LTD

KOSPI INDEX

1967.01

0.540267

7.737686

2192.83

1644.11

S&P/ASX 200 INDEX

4314.35

0.3035599

6.354879

4795.9

3765.9

JAKARTA COMPOSITE INDEX

USD

4181.073

0.5340644

9.395135

4234.734

3217.951

FTSE Bursa Malaysia KLCI

1590.6

0.3615438

3.911205

1609.33

1310.53

NZX ALL INDEX

791.015

0.3031863

8.387874

814.431

700.441 2695.06

PHILIPPINES ALL SHARE IX

3467.41

0.366452

13.87075

3518.96

HSBC Dragon 300 Index Singapor

568.09

-2.43

14.46

STOCK EXCH OF THAI INDEX

1229.95

0.2069398

19.95767

1247.72

843.69

HO CHI MINH STOCK INDEX

488.07

0.3619091

38.83374

492.44

332.28

Laos Composite Index

1032.22

14.75996

1318.9

876.33

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 9, 2012

Opinion

Facebook’s organ donation success needs follow-up Sally Satel Physician and a resident scholar at the American Enterprise Institute

acebook Inc. took a momentous action last week. And I don’t mean its announced intention to sell shares for US$28 to US$35 in an initial public offering later this month. Of more importance to at least one segment of the population was the company’s invitation to users to register to become organ donors. Forty-eight hours later, more than 100,000 people had indicated, on Facebook Timeline, their wish to be a donor when they die. As a result, online state donor registries experienced a remarkable 23-fold surge, according to Donate Life America, a nonprofit alliance of national donor advocate organisations. Better yet, a week later, the traffic was sustained. Typically, Web-based promotions lead to a spike of interest that dissipates within hours. For the 114,000 people waiting for a kidney, liver, heart or lung – 7,000 to 10,000 of whom die each year – Facebook has performed a great publichealth service. For more than two decades, advocates have been urging people to sign up as donors when they renew their driver’s license, yet only about 43 percent have done so. Facebook has made registering much easier. And although this impressive achievement won’t be enough to fill the great demand for transplantable organs, it may also help show the way forward to encourage live donations.

Social persuasion Facebook’s donor-registration strategy is unique in that it allows people to announce to their friends what they have done, encouraging them to become donors, too. Studies have shown how

information about people’s decisions to perform a public good can persuade others to follow suit. In 2004, for example, researchers at the University of Zurich reported that students were more likely to donate money to help financially disadvantaged students when told that more than half of their peers had given in previous years. If told that less than half of the previous students had given, they were less likely to donate. Similarly, a 2009 study of public-radio onair fundraising found that when listeners were told about a recent large donation, the amount of money promised rose 12 percent. In that same year, other researchers found that towel reuse at a hotel increased by a third when guests were told that almost 75 percent of other guests reused their towels. None of these studies involved social media, however. Given Facebook’s reach, the site might be able to amplify positive peer pressure and drive awareness more powerfully than standard public-health appeals do. “We are now in a great position to understand patterns of behaviour – what kinds of people are enthusiastic, who needs more persuasion,” said Judd Kessler, an economist at the University of Pennsylvania’s Wharton School. He plans to analyse the demographics of people who now join state organ-donor registries. Organ-donation groups are rightly thrilled with Facebook’s initiative. Yet it’s important to keep the larger picture in mind. Even if every American agreed to be an organ donor, there still wouldn’t be enough kidneys for transplantation. I specify kidneys because people with renal failure represent about 80 percent of those on the national organ waiting

list. Last year, roughly 91,000 people needed a renal transplant, but only one fifth of them received one.

Transplant math Now look more closely at the donor math: of the roughly two million Americans who die annually, it has been estimated that only 10,500 to 13,000 possess organs healthy enough for transplanting. So, if every eligible person donated his organs at death, surgeons might be able to double the number of transplant surgeries. (Last year, 7,433 deceased donors yielded an average of 1.5 kidneys each, for a total of 11,043 operations; the rest were done with

Facebook’s donor sign-up is a brilliant way to harness the power of social networks to save lives through donation after death

organs supplied by living relatives and friends.) Without doubt, a deceased-donation windfall would shorten the time some people languish on dialysis, and it would prevent the premature deaths of others. But a “shadow list” of ill people is waiting in the wings. These are patients on dialysis who could benefit from transplantation, but whose doctors have never referred them for the surgery. Jesse Schold, an epidemiologist at the Cleveland Clinic, estimates this pool to number from 80,000 to 130,000 people. Thus, the true waiting list may be double its current size. And with enhanced public awareness of efforts to generate more donations, people who are not currently listed (perhaps their physician never enrolled them; perhaps they thought their chance for a transplant was too slim to bother) might now come forward. Their family and friends may now be more likely to urge them to do so. In other words, paradoxically, more awareness will bring new donors but also greater demand. The supply of organs from the deceased will not be able to keep up. More living donors are needed, as well. Can the Facebook initiative be leveraged to increase living donation? Deciding to give a kidney while alive to a loved one, let alone a stranger, is very different from checking a box that instructs medical professionals to take your organs when you are gone. (I myself received a kidney transplant from a living donor.)

Donor rewards What’s needed to complement Facebook’s breakthrough are rewards for living donors. These could take many forms – perhaps a contribution to a retirement fund, an offer of lifetime health insurance, a tuition voucher or a large charitable contribution in the donor’s name. In-kind rewards such as these would not attract desperate people who might otherwise rush to donate for a large sum of instant cash. Living kidney donors would be carefully screened for physical and emotional impediments to safe donation and be guaranteed followup medical care for any complications. Right now, such incentives are illegal. The 1984 National Organ Transplant Act considers any kind of donor enrichment a felony punishable by a maximum of five years in prison and/or a fine of as much as US$50,000. With ample public support, that law could be changed to allow pilot trials of incentives. Facebook’s donor sign-up is a brilliant way to harness the power of social networks to save lives through donation after death. Next, perhaps the socialmedia giant can add another status question that allows people to “like” the idea of rewarding people who are willing to give a kidney and save more lives – and tell their friends. Bloomberg View

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

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May 9, 2012 business daily | 15

OPINION Business

wires Leading reports from Asia’s best business newspapers

Inquirer Business

The Capital Markets Integrity Corp., a unit of the Philippine Stock Exchange tasked to curb stock price manipulation and insider trading, has set a new surveillance system that detects unusual spikes in price and volume of listed stocks. Antonio Garcia, a former president of the Manila Stock Exchange, heads CMIC. The self-regulatory organisation will have the power to sanction erring memberbrokers with suspension, fines or revocation of licence. Recommendations for court prosecution however must be referred to the Securities and Exchange Commission. The Korea Exchange developed the new surveillance system.

Taipei Times

Taiwanese exports could post a year-on-year decline for the first half of the year, the Ministry of Finance said on Monday mentioning the higher comparison basis recorded last year and lower demand from major export markets has the main reasons. Outbound shipments totalled US$25.54 billion last month, down 6.4 percent year-onyear and 3 percent from last month, the ministry said in a report. Exports to China and Hong Kong contracted 11.6 percent year-on-year to US$9.86 billion following slower economic activity. Nine of Taiwan’s ten major export sectors posted year-on-year declines last month.

Straits Times

New private home sales in Singapore continued their strong run, with at least 325 homes snapped up over the past week. Rock bottom interest rates and new project launches continue to prop up the market. More than 200 units at 99-year leasehold Eight Riversuites in Whampoa East were sold during a private preview over the weekend, said a report by UBS Investment Research quoted by the newspaper. The average selling price was SGD1,400 (US$1,124) per sq. ft., after buyers were given a 5 percent early-bird discount.

Jakarta Globe

Mandala Airlines is focusing on expanding its international routes in the Asia-Pacific region this year, banking on the strong marketing network of Singapore’s low-cost carrier Tiger Airways, one of its shareholders. “We have to play to our strengths,” Diono Nurjadin, a Mandala commissioner, told the newspaper. “We are not big enough to compete in domestic routes now,” he added. Mandala on Friday opened its second international route, linking Jakarta and Kuala Lumpur, since a comeback one month ago after its Rp 2.4 trillion (US$262 million) debt was assumed by Indonesian investment firm Saratoga Group and Tiger Airways.

Europe’s misguided search for growth Daniel Gros

Director of the Center for European Policy Studies

have a sufficient stock of infrastructure today. In fact, more infrastructure investment would actually make most sense in Germany, where infrastructure spending has been anemic (only 1.6 percent of GDP, or half the rate of Spain) for almost a decade. That is why Germany’s famous Autobahnen are notoriously congested nowadays. But one does not need European funding to finance infrastructure in Germany, where the government can raise funds at negative real cost. At the rates that it is paying today, the German government should be able to find many investment projects that yield a positive social rate of return. Given that Germany is close to full employment, more infrastructure spending there would probably suck in imports (and attract unemployed construction workers from Spain), contributing to muchneeded rebalancing within the eurozone.

few months ago, 25 of the 27 members of the European Union solemnly signed a treaty that committed them to enshrining tough deficit limits in their national constitutions. This so-called “fiscal compact” was the key condition to get Germany to agree to increase substantially the funding for the eurozone’s rescue funds, and for the European Central Bank to conduct its 1 trillion euro “long-term refinancing operation” (LTRO), which

was essential to stabilizing financial markets. Today, however, the eurozone’s attention has shifted to growth. This is a recurring pattern in European politics: austerity is proclaimed and defended as the pre-condition for growth, but then, when a recession bites, growth becomes the pre-condition for continued austerity. About 15 years ago, Europe endured a similar cycle. In the early 1990’s, when the plans for the European Monetary Union (EMU) were drawn up, Germany insisted on a “Stability Pact” as a price for giving up the Deutschmark. When Europe fell into a deep recession after 1995, attention shifted to growth, and the “Stability Pact” became the “Stability and Growth Pact” (SGP) when the European Council adopted a resolution on “growth and employment” in 1997. The need for growth is as strong today as it was 15 years ago. In Spain, the unemployment rate then was as high as it is now, and in Italy, it was higher in 1996 than it is today. Politically, too, the background is the same: the “G” was inserted into the SGP under pressure primarily from a new French administration (at the time headed by Jacques Chirac). Today, France has again given the political impetus for a shift to growth. Making growth a political priority is uncontroversial (after all, who could be against it?). But the real question is: what can Europe do to create growth? The honest answer is: rather little.

Growth strategy The key elements of a growth strategy discussed among Europe’s leaders these days are actually the same as in 1996-1997: labor-market

Political resistance

The urge to be seen to be ‘doing something’ is leading Europe’s policymakers to rely on the few instruments with which the EU can claim to foster growth. But they should recognise that today’s growth crisis is different

reforms, strengthening of the internal market, more funding for the European Investment Bank (EIB) for lending to small and medium-size enterprises (SMEs), and more resources for infrastructure investment in poorer member states. The last two, in particular, attract a lot of attention because they involve more spending. But circumstances are also quite different today. The EIB’s business model would have to be radically changed to make it useful to promote growth, because it lends only against government guarantees, whereas southern Europe’s fiscally stressed sovereigns cannot afford further burdens.

Moreover, contrary to a popular misconception, the EIB cannot lend directly to SMEs. The EIB can only provide large banks with funding to lend to local SMEs. But the ECB is essentially already doing this with its three-year LTRO loans. There is also talk about a “Marshall Plan” for southern Europe. Fifteen years ago, there was a clear need for better infrastructure there. But, since then, the southern countries have had a decade of rather high infrastructure investment – more than 3 percent of GDP in Spain, Greece, and Portugal. As a result, most countries in the EU’s south probably

Unfortunately, this is unlikely to happen, because infrastructure spending runs up against popular opposition. Indeed, such spending is decided at the local and regional level, where grass-roots opposition to any large project is strongest (it took more than 20 years, for example, to push through the modernisation of Stuttgart’s railway station). The urge to be seen to be “doing something” is leading Europe’s policymakers to rely on the few instruments with which the EU can claim to foster growth. But they should recognise that today’s growth crisis is different. The real bargain should not be austerity plus a Marshall Plan for the south, but rather continued austerity plus labor-market reforms in the south, combined with more infrastructure investment in Germany and other AAA-rated countries like the Netherlands. Deep service-sector reforms in Germany would also help to unlock the country’s productivity potential and open its market to services exports from southern Europe. That way, the South would have a chance to find jobs for its rather well-educated young people, whose only choice now is between unemployment and emigration. © Project Syndicate

16 |

business daily May 9, 2012

CLOSING Iran accepts yuan for oil

Hollande may backtrack promises

China is buying crude oil from Iran using the yuan, an Iranian diplomat has said. Oil transactions are usually settled in dollars but U.S. sanctions make it difficult for Iran to accept payments in the U.S. currency. Iran is using the revenue to buy goods and services from China, Mohammed Reza Fayyad, Iran’s ambassador to the United Arab Emirates, confirmed. The ambassador’s comments, reported by the Reuters, confirmed a report in the Financial Times that claimed that Unipec – a subsidiary of the Chinese state-owned oil firm Sinopec – was buying the oil, as was another company called Zhuhai Zhenrong.

France’s president-elect Francois Hollande may use a summer audit of state finances to water down his generous campaign promises rather than risk a backlash from financial markets against high deficits and rising debt. Advisers say he could freeze some spending if the review turns up any nasty surprises, soothing investors who are worried he has become the figurehead for a fight against austerity in the euro zone. Mr Hollande dismayed analysts with his campaign spending promises, such as hiring 60,000 school staff and creating 150,000 state-aided jobs.

Australian budget set to return to surplus in 2013 Budget to deliver a A$1.5 billion surplus by June next year James Grubel

ustralia has said it will return to a budget surplus in 201213, making it one of the first developed nations to balance its books since the financial crisis began in 2008. The government yesterday scrapped planned tax breaks but offered more cash to its traditional supporters. The government hopes the modest surplus, which some economists considered inappropriate while the central bank is cutting interest rates, will bolster its economic policy credentials and keep Australia’s AAA credit rating safe. Treasurer Wayne Swan said the budget would deliver a A$1.5 billion ($1.53 billion) surplus in the year to June 30, 2013, largely from cuts in spending on defence and foreign aid and abandoning planned tax cuts for companies and savers. Small surpluses were also forecast for the following three years. “The deficit years of the global recession are behind us. The surplus years are here,” Mr Swan said in a budget speech to parliament. Despite economists’ doubts, Mr Swan said the fiscal tightening would protect Australia against global turbulence and give the central bank room for further rate cuts. “A surplus provides our best defence against dramatic changes

in the global economy. A moderate recovery in the U.S. still has a long and difficult road ahead, and Europe continues to cast a shadow over the global outlook,” Mr Swan said. Australia’s economy has weathered the global downturn better than most other developed nations, as strong demand from China powered booming demand for iron ore, coal and other raw materials. Australia’s dollar and ten-year bond yield shrugged off the budget, with markets more concerned about developments in Europe’s sovereign debt crisis.

Budget pain “I don’t think there is enough in here to be a market mover,” said Annette Beacher, head of AsiaPacific research at TD Securities. “Having said that, it is still a shift to surplus and is ahead of every OECD nation. “However most economists, including myself, questioned the rush to achieve it in one year. This could have been spread out in two.” Australia is one of only eight countries with a stable top-notch AAA rating from three major ratings agencies, and Moody’s Investors Service said after the budget’s release that it would have no impact

‘The deficit years of the global recession are behind us,’ says Treasurer Wayne Swan

on the rating. Mr Swan said business would invest a record A$120 billion in resource projects in 2012-13 and Australia’s net debt would peak at 9.6 percent of gross domestic product this financial year. Much of the savings in the budget comes from business and defence, giving room to divert spending to benefits for low-income families and into new cash payments for families with school children. The government has scrapped a planned one-percentage point cut in the company tax rate, which was

unlikely to pass through parliament, and delayed major defence procurements. The government will also delay by one year a promised increase in its foreign aid budget to 0.5 percent of gross national income. However, resource companies – facing new mining and carbon taxes from July this year – have been spared more tax pain. The government decided to forgo cuts to diesel fuel tax rebates that the industry warned would cost miners an extra A$2 billion a year. Reuters

Euro sliding against the dollar Eurozone currency under pressure as markets try to foretell elections aftermath

he euro fell for a seventh straight session against the dollar yesterday on worries that political uncertainty in Greece and a change of French presidents could threaten austerity plans seen as key to tackling the euro zone debt crisis. The euro fell below the psychological level of US$1.30 after the leader of Greece’s Left Coalition party said the country’s commitment to an EU/IMF rescue deal has become null and void. “The euro reacted to the Greece headlines, but the move lower has faded a bit because what he said was not so unexpected,” said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. Greece’s two main pro-bailout parties failed to win a majority in weekend elections, leaving questions over the country’s ability to avert bankruptcy and stay in the euro.

The euro last traded down 0.3 percent at US$1.30

The euro last traded down 0.3 percent at US$1.3008 after hitting a session low of US$1.2988, above a trough of US$1.2955 hit on Monday, which was its weakest since late January.

Technical support for the euro is in the US$1.2955/73 area. “I think people are biding their time now. I don’t think you’ll see many people buying euro but they’re not aggressively selling it just

yet,” said a London-based head of FX sales. Analysts also said that some in the market were coming round to the view that a mixture of growth and austerity may be necessary to get the euro zone economy back on its feet, given the deep economic problems facing some euro zone countries that have been implementing austerity measures. “The market will be in a waitand-see mode and consolidating around US$1.30 until we get new indications as to what direction Europe goes from here,” said Audrey Childe-Freeman, global head of currency strategy at JP Morgan Private Bank. She said there was a risk of the euro breaking sustainably below US$1.30, but said investors were not yet at the point of anticipating that Greece could precipitate a euro zone break-up.