Macau Business Daily, November 12, 2012 by Business Daily

Year I Number 160 Monday November 12, 2012 MOP 6.00 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte

Labour force needs long-term boost The changes to the law on imported labour will not be enough to solve Macau’s lack of suitable manpower, says Zenon Udani, a specialist in human resources development at the University of Macau. In an interview with Business Daily, he called on the government to open up to qualified imported labour and to fully review the education system.

Pages 6 & 7

Big bucks for tourism from cheap direct marketing D

irect marketing via text messages, emails, phone calls and interactive media has already been adopted by gaming operators but Macau’s smaller companies are still unaware of the potential, a Macau Polytechnic Institute academic says. Although it might be low budget technique, direct marketing can create many business opportunities if used properly, particularly for tourism and service industries.

The technique can provide consumers a customised, personalised product and ensure that the millions of people who visit Macau every day stay for longer, Edmund Loi Hoi Ngan says. Use of direct marketing in the territory is still at an infant stage, for instance comparing to neighbouring Hong Kong, and even the Macau Government Tourist Office has fallen behind.

I SSN 2226-8294

www.macaubusinessdaily.com

Brought to you by

More on page 5

HANG SENG INDEX

BNU has ‘eyes, ears open’ to China

21530

21470

Banco Nacional Ultramarino may be celebrating its 110 years in Macau but it still has an important role to play in the expansion of Portuguese banking group Caixa Geral de Depósitos in China and in Asia. And Macau’s policy to develop ties with Portuguese-speaking countries will only benefit the bank’s interests, the head of the group has said.

21410

Page 2 21350

November 9

Short-lived respite for home prices

HSI - Movers Name

Government measures to cool down the overheated property market are expected to slice down housing prices by 5-10 percent, the Macau Real Estate Development Association says. But despite the extension of the special stamp duty to shops, offices and car parks, prices for these segments will remain unchanged, it predicts. And next year low supply and currency depreciation will push prices up again, the association warns.

Page 3

%Day

CHINA RES LAND

1.81

TINGYI HLDG CO

0.66

SUN HUNG KAI PRO

0.63

HENGAN INTL

0.49

MTR CORP

0.34

HANG LUNG PROPER

-2.19

COSCO PAC LTD

-2.22

CHINA RES POWER

-2.33

LI & FUNG LTD

-3.43

ALUMINUM CORP-H

-3.51

Source: Bloomberg

Brought to you by

Jockey Club gets luxury neighbours

Venetian data probe ready next year Page 3

2015 goal for mainland services trade opening Page 4

Page 8

2012-11-12

2012-11-13

2012-11-14

18˚ 25˚

19˚ 26˚

20˚ 26˚

2 |

business daily November 12, 2012

macau

Despite profits, CWC still keen on CTM exit Macau operations offset Cable & Wireless losses elsewhere but market exit seems inevitable Vítor Quintã

vitorquinta@macaubusinessdaily.com

CTM saw its revenue jump by 21.2 percent year-on-year during the first half

ondon-listed telecommunications operator Cable & Wireless Communications posted on Thursday a 2 percent rise in earnings for the first half helped by strong growth in mobile data. Much of that increase came from a 21.2 percent year-on-year jump

to 353 million euros (3.6 billion patacas) in first-half revenues Macau’s only fixed-line network and leading wireless network CTM, Companhia de Telecomunicações de Macau SARL. But Cable & Wireless is still looking to offload its stake in CTM,

while looking to retrench to its core operations in the Caribbean and Central America, chief executive Tony Rice said in the statement. “During the first half we exited our West African enterprise business, and confirmed discussions regarding possible transactions involving

our Monaco & Islands and Macau business units,” Mr Rice said. “These steps are in line with our stated plan to focus our management capability and future investment on the Pan-American region where we have scale, synergy and strong market positions as well as several growth economies,” the executive added. According to sources quoted by Bloomberg, fellow investor Citic Telecom International Holdings Ltd could be ready to pay up to US$750 million for Cable & Wireless 51-percent stake in CTM. Citic is also in talks with CTM’s second major shareholder, Portugal Telecom SGPS SA, to buy the Portuguese company’s 28 percent stake in the Macau operator, according to media reports. Cable & Wireless, which has operations in Panama, the Caribbean, Macau and Monaco, reported operational profit of US$445 million (3.6 billion patacas) on revenue 1 percent higher at US$1.43 billion. “Voice revenue, however, continues to decline and we are delivering on our plan to reduce costs to mitigate this,” Mr Rice said. With Reuters

BNU ‘strategic’ in eyes of CGD The Portuguese state-owned banking group wants BNU to look beyond Macau Vítor Quintã

vitorqinta@macaubusinessdaily.com

acau’s Banco Nacional Ultramarino SA (BNU) can play an important role in the expansion of Portuguese banking group Caixa Geral de Depósitos SA (CGD) in China and in Asia generally, the head of the group has said. “BNU is not only a bank with a future but also a strategic bank for CGD,” group president Fernando Faria de Oliveira said on Friday on the sidelines of a ceremony commemorating BNU’s 110-year-old history in Macau. BNU will take charge of “representing our interests in this extremely important financial region,” the Portuguese news agency Lusa quoted Mr Oliveira as saying. “This is a bank that must make the best of this territory’s growth and projects in the neighbouring area,” he said. BNU has 14 branches in Macau and an office in Shanghai. Mr Oliveira said it intended to open a branch in neighbouring Zhuhai. “We will try to take up opportunities in [mainland] China, but that will need to be done in a cautious way,” he said. He said slowing growth in the mainland economy could hinder this. Despite being fully rooted in

Macau, BNU aimed “to keep its eyes and ears open to China and elsewhere in Asia,” he said. Mr Oliveira said BNU “makes an important contribution” to CGD’s results and that he believed it has “significant” growth potential. “Macau pursues the development of ties with Portuguese-speaking countries as a policy, which matches our interests,” he said, by way of example. BNU plans to grow by developing its cross-selling business among its present customers, small and medium enterprises and merchants.

BNU has its ‘eyes and ears open’ to China and other countries

November 12, 2012 business daily | 3

MACAU

Swanky homes get cheaper

editorial

Prices of high-end housing are down, but measures to cool the market will take time to curb prices of other kinds of property, a developer says

Missing targets

Tony Lai

tony.lai@macaubusinessdaily.com

ales and prices of housing have fallen since the government took measures to rein in property speculation but other markets remain unchanged, according to Lok Wai Tak, president of the Macau Real Estate Development Association. “The housing market has definitely reacted to the new measures, with sales – particularly at the high end of the market – seeing a significant decline,” Mr Lok told reporters on Friday on the sidelines of a business forum. However, measures that the government took last month had not had much effect on the prices of cheaper homes, he said. The government tightened the limits on mortgage lending and expanded the special stamp duty to cover sales of shops, offices and parking spaces as well as homes. “The housing market will see moderate adjustment until the end of this year,” Mr Lok said. He said sales could drop by 20 percent to 30 percent and that prices

could fall by 5 percent to 10 percent because of the stamp duty. Data from the Financial Services Bureau show that in September the average price of residential space reached 62,552 patacas (US$7,835) per square metre, the most ever, and that 1,219 homes were sold. Mr Lok has seen only a limited effect on sales and prices of commercial or office space, or of parking spaces. He predicted that the number of sales of commercial premises would drop by 10 percent in the last two months of this year.

More time The average price of retailing space rose in July to about 130,000 patacas per square metre, more than half again what it cost a year before. The average price of office space rose in July to 43,000 patacas per square metre, one-third more than a year before. Mr Lok thinks property prices in general will increase by 10 percent

next year because of the weakening of the pataca and the lack of supply. Asked if the government should intervene further to curb the rise in property prices, he said the present measures could help rein in speculation, but that more time was needed to assess their effect. “There should not be too many restrictive measures in the property market as it is one of the main pillars of the Macau economy,” Mr Lok said. The president of the Macau Property Evaluation Association, Leong Keng Seng, thinks a consensus must be reached before the government takes further measures such as restricting property sales to Macau residents only, as proposed by the pan-democrats. Mr Leong told reporters that tightening the mortgage lending limits made it harder for residents to get on the property ladder. He advised the government to relax the limits on lending to Macau residents seeking to buy flats costing between 3.3 million patacas and 6 million patacas.

Tiago Azevedo

tiago.azevedo@macaubusinessdaily.com

t came as no surprise that the government is going to miss its target of completing 19,000 homes in public housing this year. The Housing Bureau said last week that over 11,300 of the 19,000 flats envisaged in the public housing plan would be ready this year, and estimated that the rest would be completed by the middle of 2014. The 19,000 homes were first promised in 2007, and Chief Executive Fernando Chui Sai On affirmed the completion date of 2012 when he took office in 2009. The promise has been reiterated every year since 2007 by the chief executive and other officials. The commitment was met with scepticism from day one, and it must be very unnerving to be proven wrong. But that is not what is at play here. The atrocious mess we saw was the result of all the wrong decisions taken abruptly in a bid to keep that promise. The decision to build more than 8,000 homes in Seac Pai Van, where there is not enough public transport and which is far from where most people work, was shocking. It also paved the way for high-rise buildings on Coloane. A few years ago government officials said no such buildings would be approved for Coloane, which they said it was Macau’s lung. Unfortunately, it was the government that set the bad example. Another miscalculation was the number of one-bedroom flats on offer. Sales of over 2,000 subsidised one-bedroom flats have been put on hold because of low demand. To build such homes in an attempt to make up the numbers, even if they do no suit the needs of households, makes no sense.

Moment of reflection

The government’s latest measures will cool the property market, says Lok Wai Tak (Photo: Manuel Cardoso)

High-end homes to rise next to the Jockey Club The Gaw family plans return to Macau with an important property investment Stephanie Lai

sw.lai@macaubusinessdaily.com

ong Kong property investment company Gaw Capital Partners has secured a syndicated loan of HK$2.1 billion (US$270.9 million) to build highend housing adjacent to the Macau Jockey Club. After the loan agreement was signed on Friday, Industrial and Commercial Bank of China (Macau) Ltd (ICBC) said Gaw Capital a i m ed t o cr eat e a small, lowdensity residential zone, comprising detached and terraced houses and a high-end clubhouse. The Land, Public Works and

Transport Bureau told Business Daily it had yet to approve the project. The Chinese-language Macao Daily News quoted ICBC as saying it had brought together big banks in Hong Kong and Macau to stump up the money, including HSBC, Tai Fung Bank Ltd, Wing Hang Bank Ltd, Dah Sing Bank Ltd and Citic Bank International Ltd. ICBC said the plot of land on Taipa where Gaw Capital meant to build the development used to belong to the Macau Jockey Club but was now owned by Gaw Capital. Gaw Capital, formerly called

Gateway Capital, runs three funds: Gateway China Fund I, Gateway Capital Real Estate Fund II and Gateway Capital Real Estate Fund III, which have combined equity of over US$1.5 billion. The firm is run by the Gaw family, which controls Hong Kong real estate and hotel investment firm Pioneer Global Group Ltd. Between 2005 and 2008 Pioneer, Morgan Stanley Real Estate Funds, and Wachovia Bank owned the Macau’s 22-storey International Gateway building, now called the AIA Tower.

We agree that the government must clearly explain the reasons for the delay and the discrepancy between what people need and what was offered. But this should also be a moment of reflection, to try to learn from the successive blunders made over the past five years. Our officials should not follow the path of populism. That, associated with the huge pile of money the government holds, can lead to disastrous decisions. Without proper planning, even the best intentions can backfire. Another example is the government’s continuing education programme. A recent report by the Commission of Audit said the flawed approval of courses could cost the public coffers up to 108.5 million patacas (US$13.6 million) for the period from July last year to July this year. Strategic thinking, together with clear and viable goals, is what is missing right now. But very few people expect that this will happen in the forthcoming policy address. The 2013 Policy Address, due to be delivered tomorrow, has to be regarded as more than a list of handouts and must include forwardlooking plans. People living here are entitled to demand more from the government, and they should contribute more to choosing the path that leads to a better future. Regrettably, we expect little to change.

Our officials should not follow the path of populism. That, associated with the huge pile of money the government current holds, can lead to disastrous decisions

4 |

business daily November 12, 2012

macau Brought to you by

HOSPITALITY

Venetian data probe ready early next year Tony Lai

tony.lai@macaubusinessdaily.com

Moving slowly The expansion of the economy and the growth of the population are reflected in the transport industry. The report on the Statistics and Census Service’s annual survey of the transport and storage industry contains data on air, land and sea transport, and on auxiliary activities, which includes the work travel agencies do. As might be expected, the transport industry has grown in recent years. However, the growth, measured by size of its workforce, is less than one would expect.

he probe on whether gaming concessionaire Venetian Macau SA breached the law over the transfer of “certain data” to the United States will be completed by early next year, the Macau Personal Data Protection Office said. “We’re still following up the case and we’ll tell the public the result when the investigation is completed,” office coordinator Chan Hoi Fan told media on Friday on the sidelines of

a personal data seminar. She did not reveal any further details of the probe, only adding that the progress of the case was “matching the expectations”. Venetian Macau can be fined between 8,000 patacas (US$1,000) and 80,000 patacas if found breaching provisions of the data protection regulations. Hong Kong-listed Sands China Ltd told the stock exchange in

August that the personal data office launched a probe whether its subsidiary Venetian Macau violated any regulation on data transfer. The case was related to ongoing legal disputes between Sands China and its former chief executive, Steve Jacobs, who is accusing the company of unlawful dismissal in 2010. According to a news report from U.S.-based ProPublica.org, Sands China moved certain documents stored in Mr Jacobs’ work computer in Macau to the United States without the approval from the administration here. Meanwhile, Ms Chan said the office was drafting guidelines to better govern the collection and usage of personal data by the candidates for next year’s Legislative Assembly election. She said the Personal Data Protection Office was also drafting its organic law so that their competences and obligations can be regulated by legal documents to better protect citizens’ rights.

MGM Resorts boss signs 3-yr contract extension Ex-banker steered MGM China Holdings through successful IPO

The number working in land and air transport decreased between 2008 and 2011. The number working in sea transport decreased by 1.5 percent and the number working in air transport decreased by 11 percent. This is a reflection of a small contraction in the number of people arriving by sea and the decreasing trend in the number of flights arriving. The number working in land transport rose by just 6.7 percent. Taken together, these figures mean the transport industry workforce has grown less than might be imagined. The average pay the transport industry workforce got does not suggest that workers were hard to find. Average pay did go up, but by small increments that were well below the inflation rate or the rate of increase in average pay generally. These figures are consistent with the figures for arrivals and departures of vehicles, vessels and aircraft. They may indicate that crisis was an opportunity for consolidation and rationalisation in the transport industry. J.I.D.

4.6 %

im Murren, chairman and chief executive of MGM Resorts International – the majority owner of Macau casino operator MGM China Holdings Ltd – has signed a new employment contract running until the end of 2016. His new deal provides a minimum basic salary of US$2 million (16 million patacas) per year, with bonus opportunities in each of the financial years from 2013 to 2016. Mr Murren’s previous contract had been due to expire in April 2013. Under the new contract, in each of the three years to December 31 2016, Mr Murren will be eligible for an annual bonus of up to twice his annual salary, capped at the equivalent of 175 percent of his aggregate base salary over the period. The deal was signed on November 5 and announced in a filing to the United States Securities and Exchange Commission on Friday. On the same day Mr Murren was also awarded US$3.5 million in MGM Resorts’ stock – three quarters of it in performance share units, conditional on the company’s stock reaching a performance target of US$13.37. The remainder of the share award was in restricted stock units. On Thursday on the New York Stock Exchange MGM Resorts closed at US$9.78 according to data from Reuters.

Finance background

Labour force growth between 2008 and 2011

Mr Murren – a former managing director at Deutsche Bank – was chief financial officer at MGM MIRAGE, the corporate predecessor to MGM Resorts. He became chairman and CEO of MGM MIRAGE in December 2008

Jim Murren

upon the retirement of Terry Lanni. In June 2011 Mr Murren successfully steered MGM Resorts through a successful rescheduling of the heavy debt burden faced by the company after the US$9.2 billion CityCenter project had its first phase opening into economic headwinds in Las Vegas in December 2009. And also MGM China Holdings through a listing on the Hong Kong Stock Exchange that raised US$1.5 billion. MGM Resorts International changed to its current name in 2010 to reflect its strategy of diversifying investments beyond the U.S. and of

signing branding deals. As well as its interest in the MGM Macau casino resort and the planned US$2.5 billion MGM Cotai away from the downtown area, MGM Resorts also runs a joint venture with China’s Diaoyutai State Guesthouse in Beijing. That’s known as Diaoyutai MGM Hospitality, Ltd. MGM Resorts also has a branding deal with MGM Grand Ho Tram Beach, a casino resort under construction 125 kilometres (78 miles) southeast of Ho Chi Minh City. MGM China Holdings’ stock closed at HK$13.82 in Friday’s trading in Hong Kong. M.G.

You talking to me? It’s amazing how you can survive in this region, being understood and understanding just a small part of the communication. That’s ok for you but not for your business.

+853 2833 1258 info@goldfishmacau.com www.goldfishmacau.com

At GOLDFISH | creative agency we know how to adjust your message for each audience or product and make it effective. Yes. We are talking to you. GOLDFISH.advertaholics

November 12, 2012 business daily | 5

MACAU

Potential of direct marketing touted An academic says online platforms are a good way to reach customers Tony Lai

tony.lai@macaubusinessdaily.com

nterprises should develop direct marketing via the Internet, and this is particularly suitable for the tourism industry, a Macau Polytechnic Institute academic says. The growing popularity of direct marketing through platforms such as text messaging, email, the telephone and interactive media should be noted by companies here, Edmund Loi Hoi Ngan told a seminar on Friday. “This kind of marketing technique is particularly suitable for tourism and service industries as it provides the consumers with a customised, personalised product,” Mr Loi told Business Daily on the sidelines of the seminar, which was organised by the Personal Data Protection Office. “Macau is receiving a large number of tourists every day and requires more targeted tourism products to make them stay longer,” he said. In the first nine months of this year Macau received over 20.8 million visitors, a rise of 1 percent year-on-year. However, the average length of stay this September was just one day, according to official data. Mr Loi said direct marketing

was a cheap technique that could create many business opportunities if used properly.

Difficult cases He said the direct marketing here was only in its infancy, unlike in Hong Kong. Online platforms such as social media had been adopted by many big enterprises such as casino operators, but there was still much room for development for small and medium enterprises, he said. The key for such development was awareness from smaller enterprises, but they are not the only one not fully utilising online and social media, he bemoaned. “The Hong Kong Tourism Board uses a Weibo for its promotion but the Macau Government Tourist Office does not have one,” he said. Weibo is a Chinese version of social networking tool Twitter. Mr Loi said the government could make more use of social media in marketing, as could small enterprises. The Personal Data Protection Office received 19 complaints about direct marketing in the first 10 months of this year, having

received five last year. Personal Data Protection Office coordinator Chan Hoi Fan told reporters on Friday that most complaints were about messages

sent via smartphone apps. She admitted there were “difficulties in handling such cases”. Ms Chan said her office hoped to discuss the issue with app developers.

Businesses should use online platforms such as social media so they can reach specific groups of consumers, says Edmund Loi

6 |

business daily November 12, 2012

macau

HR expert advises govt to start thinking ahead

Brought to you by

Stop-go policy Few areas are as sensitive as the labour market when it comes to sustaining an economic boom. Rapid growth raises the demand for workers, who may not be available in the quantities needed or have the required skills. In a small economy such as Macau’s, those shortages may be acute. The recourse to outside sources of labour is inevitable if economic growth is to be sustained and additional wage and price pressures are to be avoided. Against all expectations, from late 2008 to the middle of 2010, the government tightened its policy on imported labour. Seen in the context of Macau’s economic evolution in recent years, this policy is bound to puzzle any future observer. The policy has now been fully reversed, albeit without any formal declaration. The speed of the reversal is a testimony to how unsustainable the policy was.

The chart displays the changes in the number of non-resident workers from the third quarter of 2007 until the third quarter of 2012. The line shows the cumulative variation, the columns show the absolute changes relative to the previous quarter. The initial period sees a sustained growth in the number of NRW’s, which in the first five quarters shown rise by more than 24,500 workers. Then, a big contraction starts, with a cumulative loss of some 28,000 workers till the middle of 2010. Silently, the trend that had been broken in 2008 re-starts with a vengeance and almost 37,000 thousand non–residents were added to the workforce in the last two years. The costs of this stop-and-go policy, on the labour market, to start with, but also on the city’s services, infrastructure and housing market were and are heavy. Its full social and economic costs are yet to be assessed. J.I.D.

The recently introduced amendments to the law on imported labour would not be enough to solve the problem of the lack of suitable manpower, says Zenon Udani, a specialist in human resources development at the University of Macau. If Macau wants to become a truly world-class tourist destination, the government needs to stop acting parochially and open up to qualified imported labour, Mr Udani told Business Daily in an interview. He urges the government to draw up a long-term plan for the development of the labour force Luciana Leitão

leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

What’s your take on the government’s policy on human resources? Basically, it’s a policy that takes into consideration the common good of the residents. At the same time, it’s something that is very restrictive when it comes to hiring people from outside of Macau. I have interviewed a number of people both from business and from the public sector, and also from the labour unions. There are basically two views. One says the government should be stricter as to allowing people to come in, but it’s hurting business, especially the small and medium-size enterprises. The government has to be more forward-looking, to be more open when it comes to hiring people, especially those who are talents needed for the various industries. That is the only way for Macau to be a worldclass leisure and tourism hub. Of course, we can learn from other countries and regions, where the hiring, for instance, is based on the merits and qualifications of the people, and they are actually allowed in as temporary residents or work permit holders. The Legislative Assembly last week approved on first reading a bill to change sections of the law on imported labour. How do you see these changes? It is a temporary solution. It’s not something that will permanently address the problem. It is not easy to find a job here. For residents, perhaps it will take a month, at least, to be able to finally start working. But for non-residents it obviously takes much longer. It is just a short-term measure to make the policy friendlier to them. But

the government needs to be more forward-looking. Let us face it, there are some jobs lining up and waiting for someone to fill them. They should talk to the non-residents to take them, if the residents don’t want them. So I think what is needed is really a long-term human resource

strategy. Somehow, the policy or the measures have been really short-term. We’ve been talking about making Macau a global tourism hub and developing the MICE industry, but the basic need is finding the right people at the right time and obviously with the right skills.

November 12, 2012 business daily | 7

MACAU That means also that the government has to invest in more education. If they really want residents to fill the jobs that have been vacant, the locals have to be qualified. My students graduate with no experience, and that’s one of their fears. People come in with no experience and businesses are not willing to accept them, so companies will end up stealing people from other companies. So there is a gap there that cannot really be addressed by short-term measures. Of course, in the case of the companies, even the government should take notice of the transfer of knowledge. The companies can have, for instance, a more serious career development programme for residents and, at the same time, for the non-residents. There are jobs that cannot really be filled by residents. Macau doesn’t have the numbers to serve all the tourists, and not all locals want to work in all aspects of the industry. Also, the people want to be heard. The government should be willing to act upon what it hears, especially suggestions that can effectively improve labour strategy. For what kind of jobs is difficult to hire residents? For instance, the medical field: we don’t have a school of medicine in Macau and even for some doctors who are Macau residents and are practising outside, it’s not easy for them to come in to practise here. First they have to get the licence. And I think many times the licence depends on the professionals in the field and sometimes the residents are protecting themselves and they’re not willing to have their own compatriots coming in. Also, within the food and beverage sector there will always be the need for people to come in. The other field is MICE. Not too many people want to work in this industry because it pays much lower than the gaming industry and the hours are much longer. And as long as Macau is a gamingdependent economy, there will always be a structural unbalance in employment. The gaming industry will always be able to pay much more and attract more people and, of course, most of the residents will be finding jobs directly related to gaming.

The government has to invest in more education. If they really want residents to fill the jobs that have been vacant, the locals have to be qualified

The labour force pool is limited and the unemployment rate very low. With many big projects in the pipeline, especially for Cotai, why is the government taking so long to change its policy? The government is sort of parochial, in a sense that it is here to protect its people first. In a small place like this, people are

very sensitive towards what people think, their associations. Of course, they also don’t want to have problems with labour. It’s taking them a lot of time and I think we need people in government to really open up. It just needs more openness, understanding, more education and strategically managing the region. The population is not growing. Recently, we interviewed a company and the manager introduced the problem of ageing. He was concerned that there are not too many residents or women applying, even if it’s a very stable company, for the simple reason that they find the job difficult, the working hours are very long and the salary is, of course, not as attractive as casinos. So, again, what Macau needs is a long-term vision, at least for the next 10 years. Ultimately, for the quality of labour and the quality of manpower to drastically improve, there is a need to review the education system, to invest in the training of teachers. Isn’t this attitude hindering the city’s growth? It is contributing to that. It is one of the factors. It slows down the progress of Macau. Any major developments in societies have been preceded by strong references of quality and quantity. Of course, the drawback of Macau is that we don’t have enough people to propel the industry, and the other issue is enhancing the quality of labour. As we know, there are not enough people for certain jobs, even executive positions. I don’t know how many of these big businesses in Macau are headed by residents. It starts with education. Somehow, as we see it, there are also things that typically pull away people from education, like the casino industry. Even with the minimum age increasing to 21, it doesn’t necessarily mean that people will be attracted to study. In one of the interviews we had, in a study of human resources development, one of the interviewees said perhaps some competition should be allowed among the locals. For residents, life is comfortable, finding a job is not a problem. They can graduate and delay their job search for a few months, because they know when they decide [to go] for a job, there will always be one. Their only concern is finding a job that they will like and will pay them the salary they want. If we allow non-locals, especially those who have been studying in universities around Macau, to at least find some work here, give them at least two years to work here, and if the government doesn’t want them to work in the big companies, if they at least could work in smaller enterprises, perhaps this would bring some competition among the locals. I think competition is really very important. Allowing, for instance, non-locals to work here a year or two, especially in small and medium enterprises, could perhaps be a good solution and also bring some competition among the locals, which could propel them to study or work harder for better qualifications and a better future for the whole region. The number of non-resident workers has been growing steadily, reaching a new record of more than 109,000. What can we read into this increase? These numbers show the needs of the service industry. The growth

mostly comes from the mainland. Most of these people are working in the food and beverage [industry] and in the hotel industry. Every time a hotel opens, they need those people and usually these are also the jobs that cannot be filled by residents. Or if they fill them, it’s for supervisory positions. This just indicates Macau has grown in the hotel industry. It’s basically the needs of the service industry. The service industry is something very important. Even if casinos disappear, businesses will still need to serve people, because Macau doesn’t have natural resources. Even in the small businesses in Macau, it has to have a good product and customer relationships. That’s how many small businesses in Macau have survived. Yet the quality of service in some sectors is often criticised. How do you solve such a problem? Service is something very important, because even in the gaming industry people have to provide service to customers. You need actually the spirit of service, which is something perhaps the residents discover when they go outside Macau. Obviously there are many possibilities to enhance the quality of service here. One is to import more workers. The other thing is to invest more in the training of people, especially in tourism school. We have to find more people, actually, but I think in general it’s more a question of culture. Ultimately, the spirit of service is

something that is already there in the family. If in the family people actually know how to render service to one another, it comes out very naturally when it comes to serving. Training helps. Macau can have some campaign, but focus on an aspect of service any tourist would appreciate. One obvious obstacle is language. Macau really cannot be worldclass unless the tourists can communicate with the locals. Language is very important, because if people cannot express in the language of smiling, at least they can communicate. The tourism office can also play a pivotal role in this area.

The government has to be more forwardlooking, to be more open when it comes to hiring people

8 |

business daily November 12, 2012

macau Macau law on UM campus The Hengqin campus of University of Macau, expected to be in use by September next year, will adopt the laws of the MSAR until the land lease expires on December 19, 2049, according to a draft bill that the Executive Council has finished discussing and released on Friday. Any legal actions, administrative acts and private contracts agreed upon before or after the Hengqin campus’ opening should abide by Macau laws, unless otherwise specified, notes the bill that will now move on to the Legislative Assembly.

China services trade set for liberalisation Three years from now, services trade with the mainland will be completely liberalised, the governor of Guangdong says Stephanie Lai

sw.lai@macaubusinessdaily.com

Guangdong will play a ‘key role’ in Macau’s growth, says the governor of the province, Zhu Xiaodan

rade in services between mainland China and the special administrative regions of Macau and Hong Kong

will be fully liberalised by 2015, the governor of the neighbouring province of Guangdong, Zhu Xiaodan, told reporters on Friday.

Mr Zhu told the Communist Party national congress in Beijing that he expected Guangdong to “play a key role” in what he called the “inevitable integration” of his province and the two regions. He said his province was preparing a series of measures meant to nurture closer cooperation in finance, trade, social services and technology. He said these measures included making it easier for Hong Kong and Macau service enterprises to do business in Guangdong, a simpler procedure for establishing a business in the province and the speeding-up of mutual recognition of the licences of people that need licences to work in the service sector. Speaking at the signing in July of the latest supplement to the Closer Economic Partnership Arrangement between the mainland and Macau, Secretary for Finance and Economy Francis Tam said more than 90 percent of trade in services had been liberalised already.

Permira’s Galaxy stake fully sold

Gaming crimes down in last quarter

he remaining stake of private equity company Permira Advisers LLP in casino operator Galaxy Entertainment Group Ltd generated strong interest and was fully sold, despite fears fuelled by market turbulence. Permira sold its 5.94 percent stake on Wednesday, a day after the shares reached a record high of HK$28.6 (US$3.7) and just two weeks after the gaming company reported better-than-expected third quarter results. But that same day the United Statesstockmarketfellbyalmost 2.4 percent following Barrack Obama’s win in the presidential election, which means Galaxy’s shares were offered at a discount of 5 percent. “Who will buy into a deal at a mere 5 percent discount when the U.S. market is down more than 2 percent? We heard from investors that they got almost full allocations for their demands,” said a banker away from the transaction,

Permira sold its remaining stake in Galaxy Entertainment Group for HK$6.78 billion

quoted by IFR Asia. But a source close to the deal said it was fully allocated and distributed. “The strong earnings growth of the company has convinced investors that it’s a stock for long-term investment. Temporary market turbulence did not deter their interest,” said the source. According to IFR Asia, the offering attracted 40

Mr Zhu said Guangdong would do more to develop Nansha, Qianhai and Hengqin, three special economic areas in the Pearl River Delta that are meant for high-end businesses. Nansha recently got a 60 billion yuan (US$9.5 billion) five-year loan from the China Development Bank to develop its infrastructure and improve its industries. At least 10 Guangdong enterprises have invested more than 60 billion yuan in the Nansha New Area. These companies include Guangzhou Port Co Ltd and stateowned Guangzhou Automobile Industry Group Co Ltd. The head of the Stateowned Assets Supervision and Administration Commission’s arm in Guangzhou, Huang Weilin, has said Nansha wishes to attract investment in motor vehicles, energy and ports. Huang said 10 more companies had shown interest in developing Nansha with potential investment of around 40 billion yuan.

investors, including existing shareholders and investment funds, but five investors took up 75 percent of the shares. Waddell & Reed Financial Inc., a Kansas-based asset management company, which had bought two-thirds of an earlier placement launched by Permira in August, also bought “a meaningful portion” of last week’s trade, said IFR Asia. V.Q.

asino-related crime dropped significantly in the third quarter of this year, particularly extortion cases, Secretary for Security, Cheong Kuoc Va, said on Friday. The number of cases of extortion reported by Macau security forces dropped by 40 percent in the first nine months of 2012, a severe drop from the 4.5 percent increase registered in the first half of this year. In addition, loan-sharking cases were already dropping and tumbled even more in the last quarter, down by 27.8 percent year-on-year. Quoted by public broadcaster TDM, Mr Cheong pledged to boost police presence inside casinos and in the surrounding areas, where “they [criminals] live to obtain their illicit earnings”. “And if anyone is caught in the act, the police will conduct an arrest,” the

secretary stressed. In constrast, the number of fraud cases rose by almost a third (up by 31.9 percent) in the JanuarySeptember period. In August the Macau police detained 20 people in two cases of alleged casino fraud, linked to a large criminal ring accused of bribing dealers to tape the card dealing process at baccarat tables, and using the information to rake in a total of HK$90 million (US$11.6 million). Meanwhile the government’s fight against unlicensed inns seems to be working, with the number of cases of illegal accommodation or work falling by 20.9 percent to 314 in the first nine months of 2012. Overall the number of crimes reported to the police forces rose by 1.9 percent year-on-year. V.Q.

November 12, 2012 business daily | 9

GREATER CHINA

Beijing turns corner on economy Leaders confident of annual growth of over 7.5 percent

hina announced on Saturday that it is effectively turning the corner on the economy and likely to meet its growth target for the year, more good news for Communist Party policy makers meeting in Beijing to anoint new leaders for the next decade. The world’s second-biggest economy had halted a slowing trend, the chief of the economic planning agency said, adding that he was confident gross domestic product growth would exceed 7.5 percent in 2012 though at the same time warning against complacency. Zhang Ping, head of the National Development and Reform Commission, was speaking to reporters on the sidelines of the 18th Party Congress at which departing President Hu Jintao said China should double its 2010 GDP and per capita income by 2020, as previous targets have implied. Mr Hu said China’s development should be “much more balanced, coordinated and sustainable”. The party, which has constantly stressed the need for continued one-party rule, has in recent years tied its legitimacy to economic growth and lifting hundreds of millions out of poverty. “Signs of stabilisation in the economy were getting more obvious in October,” Mr Zhang said. “We are fully confident that we can achieve the economic growth target for this year. In other words, we are able to maintain economic growth of above 7.5 percent.

We are fully confident that we can achieve the economic growth target for this year Zhang Ping, head of the National Development and Reform Commission

“But we dare not lower our vigilance. The foundation of the economic stabilisation is not solid enough... Under the backdrop of a persistent global financial crisis as well as a new situation and problems in the economy, we must make preparations for dealing with difficulties and challenges over the long term.” Mr Zhang said China’s economic slowdown this year had been caused

by both weak global demand and government steps to adjust economic structures to put the economy on a more sustainable footing for the future. More than 2,200 delegates to the congress took a day off on Saturday, two days after Mr Hu’s opening speech. They spent Friday holding public debates on the speech at which they read out bits they particularly liked. Mr Hu will hand over his post as

Chinese data adds to recovery hopes Exports gain most since May in sign of growth rebound

October exports increased 11.6 percent from a year earlier

hina’s exports rose at the fastest pace in five months in October, adding to signs of a rebound in the world’s second-biggest economy after industrial output and retail sales exceeded forecasts. Overseas shipments increased 11.6 percent from a year earlier, the Beijing-based customs administration said in a statement on Saturday. Imports rose 2.4 percent, the same pace as the previous month. The trade surplus widened to US$32 billion, the biggest in almost four years. China’s transition to a new generation of Communist Party leaders, which began in Beijing last week, may be smoothed by the reversal of a slowdown that started in last year’s first quarter. The September-October pickup in export growth shows the economy is starting to stabilise, Commerce Minister Chen Deming said at a briefing in Beijing.

“We are still cautious, but the robust export growth around 10 percent for two consecutive months might truly point to a real rebound,” said Lu Ting, chief Greater China economist at Bank of America Corp. in Hong Kong. The “elevated” trade surplus may mean the central bank will be reluctant to cut lenders’ reserve requirements, Mr Lu said while maintaining his forecast for “at most” one 0.5 percentage-point reduction by year-end.

Expansion target Industrial production, fixedasset investment and retail sales accelerated in October, government reports showed on Friday, signalling that economic growth will exceed Premier Wen Jiabao’s 7.5 percent target for his last year in office. But at the same time, the trade outlook is grim for the coming months

and will be difficult next year, Mr Chen said. Export gains have picked up from a 1 percent pace in July and 2.7 percent in August. China’s October import growth trailed the median economist estimate of 3.4 percent in a Bloomberg survey and compared with a 28.7 percent increase in October 2011. Inbound shipments in August recorded the first non-holiday drop since 2009. October’s trade surplus compared with the US$27.3 billion median forecast and a US$27.7 billion excess in September. Beijing wants domestic consumption to replace exports and investment as the key driver of growth. At the same time, China’s major trade partners want it to import more to help right global economic imbalances. The trade figures, and the improvement in domestic indicators “continue to support our view that China’s growth momentum has picked up,” Li-Gang Liu and Hao Zhou, China economists at Australia & New Zealand Banking Group Ltd, said in a note yesterday. Foreign trade expanded at a slower pace than last year in the first 10 months of the year, according to the customs report, putting at risk the government’s 2012 target of 10 percent growth. Exports through October rose 7.8 percent while imports gained 4.6 percent, leaving a trade surplus of US$180.2 billion. Achieving the full-year target will be very difficult, Mr Chen said yesterday. Bloomberg/Reuters

party chief to anointed successor Vice President Xi Jinping. The congress ends on Wednesday, after which the party’s new Standing Committee, at the apex of power, will be unveiled. Only Mr Xi and his deputy, Li Keqiang, are certain to be on what is likely to be a seven-member committee, and about eight other candidates are vying for the other places. Reuters

Industrial output up as inflation eases Mainland China’s factory output and retail sales exceeded forecasts and inflation unexpectedly cooled to the slowest pace in 33 months, signalling the government is boosting growth without driving a rebound in prices. Industrial production rose 9.6 percent in October from a year earlier, the National Bureau of Statistics said on Friday in Beijing. Retail sales growth of 14.5 percent picked up from September’s 14.2 percent. The consumer- price index increased 1.7 percent. The CPI increase was below the 1.9 percent median estimate of analysts surveyed by Bloomberg News and compared with 1.9 percent in September. Producer prices declined 2.8 percent from a year earlier after a 3.6 percent drop in September. “Inflation remained comfortably low, but, given more signs of growth recovery, the PBOC will probably stay on the sideline,” said Yao Wei, China economist at Societe Generale SA in Hong Kong, one of two analysts to accurately predict the CPI reading. China’s consumer-price gains have slowed from a three-year high of 6.5 percent in July last year as food costs eased. Food prices rose 1.8 percent last month from a year earlier, compared with a 2.5 percent gain in September, according to the statistics bureau. Pork, a Chinese staple, dropped 15.8 percent from a year earlier, subtracting 0.6 percentage point from the CPI, compared with a 38.9 percent rise in October 2011.

10 |

business daily November 12, 2012

GREATER CHINA ICBC gets nod for Standard Bank deal Argentina has given approval for the Industrial and Commercial Bank of China Ltd to take control of the local operations of South Africa’s Standard Bank following a US$600 million deal last year, an official source said on Saturday. ICBC, the world’s biggest bank by market value, will take 80 percent of commercial lender Standard Bank Argentina and its two affiliates, asset manager Standard Investments and Inversora Diagnol, a commercial service provider. Standard Bank will reduce its stake in all three firms to 20 percent. The source said the operation had been given the go-ahead by Argentina’s central bank.

Dollar peg to stay put, says HKMA chief Talk of inflows to speculate on yuan ‘unfounded’

Norman Chan, head of the Hong Kong Monetary Authority

apital inflows into Hong Kong aren’t for speculating on the Chinese yuan and the government has no intention to change the 29-year-old dollar peg, the city’s monetary chief Norman Chan said on Saturday. The Hong Kong Monetary Authority has bought a combined US$4.2 billion of the U.S. currency at HK$7.75 per dollar since it made

the first injection in three years on October 19. Quantitative easing in the U.S., bond purchase plans in Europe, and China’s economic rebound are the major reasons for the recent inflows, Mr Chan said in an e-mailed statement. Talk of so-called hot money flowing into Hong Kong from overseas investors for speculation on the yuan “is unfounded,” he

said in the statement. Given assets in China’s banking system worth 126 trillion yuan (US$20 trillion), “it’s impossible to threaten China’s financial stability or safety,” he said. If overseas investors are bullish on yuan appreciation, they can directly buy the currency in the offshore market with U.S. dollars, Mr Chan said. Exchanging into Hong Kong dollars and buying the yuan leads to additional trading costs, he added. The Hong Kong dollar was little changed at 7.7515 against the greenback, according to data compiled by Bloomberg. The yuan dropped 0.03 percent to close at 6.2450 per dollar in Shanghai on Friday, ending a 13-week advance and the longest winning streak since March 2008. The Federal Reserve initiated a third phase of so-called quantitative easing on September 13, purchasing US$40 billion of mortgage-backed securities per month. The European Central Bank pledged in the same month

to buy the bonds of governments that agree to austerity conditions. Hong Kong linked its exchange rate to the U.S. dollar in 1983 when negotiations between China and the U.K. over the city’s return to Chinese rule spurred capital outflows. In 2005, policy makers committed to limiting the currency’s decline to HK$7.85 per dollar and capping gains at HK$7.75. Home prices that surpassed their October 1997 peak and rising costs of food imports are boosting the risk of asset bubbles in Hong Kong and fuelling calls for a review of the peg. “The peg isn’t a major cause in driving Hong Kong’s inflation,” Mr Chan said. He cited Singapore as an example, which runs a managed floating exchange rate system, has higher inflation than Hong Kong. “I wish to reiterate the government’s firm stance that Hong Kong has no need to, and will not, change the linked exchange rate system,” Mr Chan said. The peg has helped the city overcome financial crises in the past, he added. Bloomberg

Cnooc confident China to raise investment quotas on Nexen deal C C Hong Kong authorities requested RQFII expansion

hina plans a nearly threefold jump in quotas for the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme, which permits qualified investors to channel offshore yuan funds into mainland stock and bond markets. The securities regulator also said that the quota for the Qualified Foreign Institutional Investor (QFII) scheme – the original, dollardenominated programme that allows institutional investors to buy stakes in Chinese-listed stocks or bonds – could be lifted if its current 80 billion yuan (US$12.81 billion) limit is reached. The RQFII quota will be raised by 200 billion yuan from the current 70 billion yuan, Guo Shuqing, the head of the China Securities Regulatory Commission, told reporters yesterday. The increase follows a request by the Hong Kong authorities, Mr Guo said. Most offshore yuan funds are raised in Hong Kong. Mr Guo said the People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) have already agreed to the increase and are preparing detailed rules, which should be released soon. The RQFII programme was set up to allow foreign investors to use offshore

yuan – which Hong Kong banks have accumulated mainly through yuandenominated trade settlement – to buy mainland securities. Regarding the QFII programme, Mr Guo said it could also be expanded once the current quota is exhausted. “We’ve already reached agreement with the PBOC and SAFE. If the US$80 billion gets used up, we will definitely expand it,” he said. CSRC sets an overall quota for the QFII programme and approves foreign institutions as QFIIs, while SAFE grants quotas to individual institutions. SAFE has so far granted about US$30 billion yuan, meaning that about US$50 billion in additional quotas could still be granted under the existing quota. Mr Guo also said that certain individual QFIIs will see their quotas raised. QFII quotas are currently capped at US$1 billion per institution. “We’ll look at individual institutions on a differentiated basis. For very big institutional investors – in the past we allowed them to invest at most US$1 billion. Now we’ll expand the limit to US$2 billion, US$3 billion, even US$5 billion.” Reuters

nooc Ltd, China’s top offshore oil and gas producer, said it is confident of winning regulatory approval from Canada this year for its US$15.1 billion bid for Nexen Inc, even though Ottawa has extended its review of the deal twice. Cnooc launched China’s richest foreign takeover bid in July when it agreed to buy Nexen, a Canadian oil and gas producer. But the success of its bid began to look shaky after Canada held up Malaysian state oil company Petronas’ US$5.2 billion bid for Progress Energy Resources Corp. Canada has been conducting a review to determine whether a takeover by the Chinese state-owned enterprise would bring a “net benefit” to Canada. Ottawa said on November 2 that it had extended the review by a month to December 10. The extension was not a surprise, Cnooc chairman Wang Yilin said on Friday. “It is a big acquisition worth US$15.1 billion. It would be our biggest-ever overseas acquisition, and because of the sheer size of the project, the government and relevant authorities ... will need to handle large amounts of review work,” he said. “We are fully confident that the deal will succeed,” Wang told reporters on the sidelines of the Communist Party congress in Beijing.

“We expect the transaction to be completed by the year-end.” Industry sources have said CNOOC’s bid might have a better chance of success compared to the Petronas deal as only about a quarter of Nexen’s assets are in Canada, while Progress Energy’s operations are fully centred in Canada. Canadian Prime Minister Stephen Harper said on Thursday that his government would make decisions very soon on foreign investment proposals that it is considering and on the broader framework for dealing with such investments. Cnooc is pressing on in its search for overseas assets as it has only nine years’ worth of reserves based on current production levels – one of the lowest ratios among global oil majors. Reuters

November 12, 2012 business daily | 11

ASIA Moody’s downgrades Sony Sony Corp., the Japanese electronics-maker reeling from four straight annual losses, had its credit rating cut to the lowest investment grade by Moody’s Investors Service, citing falling demand for its televisions and cameras. The long-term credit rating was cut one level to Baa3 from Baa2, Moody’s said in a statement yesterday, assigning a negative outlook. “The company is not expected to reduce debt significantly without resorting to cuts in capital expenditure or the sale of non-core assets,” Moody’s said in the statement.

S.Korea eyeing measures to control capital flows

Indian PM sees end of economic gloom

But the government will not take strong steps immediately, minister says

outh Korean exports are growing further this month after having snapped a threemonth run of declines in October, but the won’s rapid appreciation is worrying, Finance Minister Bahk Jae-wan said yesterday. The government is “more seriously looking into” whether it needs to tighten regulatory measures on capital flows to stem the won’s rise, he added, although he said the gain owed in part to the unexpectedly widening current account surplus. “Exports so far this month grew and will probably sustain their gradually improving trend,” Mr Bahk said during an early morning programme on the public KBS television, without providing figures. Customs agency data published on its website yesterday showed exports for the November 1-10 period totalled US$14.36 billion, which Reuters calculations show represented a gain of about 6 percent over a year ago. Mr Bahk’s remarks came a day after China, the top destination for South Korean exports and investment, said that it is effectively turning the corner on the economy and likely to meet its growth target for the year. Early this month, South Korea reported exports in October posted the first annual gain in four months on growing demand from China and the European Union. South Korea is Asia’s fourth-largest economy and the world’s seventh-largest exporter. On the currency, Mr Bahk’s

The won’s rapid appreciation is worrying, Bahk Jae-wan said

remarks suggested he was not willing to carry out aggressive dollar-buying but that the government may reduce the ceilings on currency derivatives at banks. “[The government] has been making preparations for a time when adjustment is needed, and we will now be more seriously looking into whether to apply an adjustment should the currently fast appreciation continue,” he said. His deputy, Vice Minister Shin Je-yoon, told Reuters on Saturday that the situation regarding the won’s appreciation was not serious enough for the government to take any strong steps immediately. South Korea has enforced a series of mostly regulatory measures aimed at mitigating capital flows, including setting limits on the amount of currency derivatives that each bank

can hold depending on its capital size. Emerging-market economies have fretted over capital inflows as a result of ultra-loose monetary policy by the United States and other industrialised countries, which pushes up their currencies and shortterm liquidity. South Korea already plans to examine foreign-exchange transactions by local branches of two foreign banks and by one domestic bank, an official said last week, a move seen by some analysts as a precursor to tightening of ceilings on derivatives. A firmer won could reduce the profits on overseas sales by South Korean companies, but could boost purchasing power for domestic consumers and spur capital investment. Reuters

RBA cuts outlook on weaker mining, budget Australia’s ‘slightly weaker’ domestic economy may help contain inflation Michael Heath

he Reserve Bank of Australia reduced its 2013 growth forecast as lower investment in ironore, coal and natural-gas projects and the government’s pledge to deliver an election-year budget surplus restrain the economy. “Most of this revision to the outlook is accounted for by a change in the profile for mining investment,” the RBA said on Friday in its quarterly monetary policy statement, predicting a peak in resource spending at about 8 percent of gross domestic product from a prior 9 percent. The central bank said “a slightly weaker” domestic economy and labour market should help contain inflation. The government’s bid for a A$44 billion (US$46 billion) budget swing

back to the black “appears to be weighing on growth over the second half” of this year, the report showed. “The current level of the exchange rate could also have a more contractionary effect on output than anticipated,” it showed. The RBA cited the currency’s strength – even as commodity prices dropped last quarter – as a factor in decisions by mining companies to put off some projects. The central bank has cut the overnight cash rate target by 1.5 percentage points since November 1, 2011, as it aims to help industries such as construction rebound to pick up the slack in the economy. “While the impact of monetary policy changes takes some time to work through the economy, there are signs

that easier conditions have been having some of the expected effects, and further effects can be expected over time,” the central bank said. “Lower interest rates, rising rental yields and an improvement in conditions in the established housing market are expected to support rising dwelling investment.” The RBA predicted year-average GDP growth of 2.25 percent to 3.25 percent in 2013, lower than its August estimate of 2.75 percent to 3.25 percent. Consumer prices will rise 2 percent to 3 percent in the year to December 2013 and underlying inflation the same rate, little changed from three months ago, the central bank said. Bloomberg

Indian Prime Minister Manmohan Singh has said the economic “gloom and doom” clouding the country in recent years has been dispelled and that he is determined to push ahead with further reforms. In a speech on Saturday evening in Mumbai, Mr Singh said that in 2006, 10 percent annual growth looked “eminently achievable” and “the sense of optimism was all pervading”. But he admitted that since then, Indian exports have shrunk and the fiscal deficit has gone up. “Growth decelerated to 6.5 percent last year and may be only around six percent in the current year,” he said. “This has dampened investor sentiment. Mr Singh vowed that a raft of reforms announced in September would revive the economy and attract foreign investment, with more policy changes in the pipeline. “We have dispelled gloom and doom, improved the climate for foreign investment [and] are working hard to restore investor confidence and the growth environment,” the prime minister told business leaders in Mumbai. Mr Singh also said that his government “bit the bullet” when introducing recent reforms, including to the retail sector that will allow global chains such as Walmart and Tesco to open branches for the first time. “Some of the steps were considered by many of our critics as politically impossible. We bit the bullet and did what we felt was the right thing to do,” Mr Singh said. “Undoubtedly, more needs to be done.”

Diageo confirms United Spirits deal Diageo Plc has agreed to buy a majority stake in United Spirits Ltd, controlled by Indian businessman Vijay Mallya, for US$2.04 billion, fuelling a push by the world’s biggest spirits group into fast-growing markets. Diageo, which first tried to buy United Spirits in 2008, said on Friday it would end up with 53.4 percent of India’s largest spirits company in a two-part deal. The Johnnie Walker and Guinness owner has been focusing on emerging markets where a growing middle class is developing a taste for more expensive drinks. Diageo has also been in talks to buy leading tequila maker Jose Cuervo. “This [India] will become Diageo’s number two market after the United States and if you look at the projections on what’s happening with the emerging middle class...it has the potential in the long term to become our largest market,” said Diageo chief operating officer Ivan Menezes. Diageo said it would fund the acquisition with cash and debt and expected no damage to its single-A credit rating - or its ability to make further acquisitions. If the deal gets regulatory and shareholder approval, it will be the biggest inbound Indian M&A deal since British oil firm Cairn Energy Plc sold a majority stake in its Indian business to Vedanta Resources Plc last year. Mr Mallya played down any link between the United Spirits sale and problems at his Kingfisher Airlines Ltd, which has been grounded by debts, safety concerns and unpaid staff. “We are working towards a comprehensive rehabilitation plan including recapitalisation of the airline. It would be unfortunate if you would try to link this transaction with the airline,” he told reporters.

12 |

business daily November 12, 2012

MARKETS Hang SENG INDEX NAME

NAME

PRICE

DAY %

VOLUME

11.98

-1.317957

26746399

9.86

-1.202405

6186912

CLP HLDGS LTD

65.65

-0.6056018

4093865

CNOOC LTD

15.96

-0.7462687

46465011

COSCO PAC LTD

10.56

-2.222222

7140020

PRICE

DAY %

VOLUME

30.2

-1.628664

18208194

CHINA UNICOM HON

3.3

-3.508772

33766487

CITIC PACIFIC

BANK OF CHINA-H

3.15

-0.6309148

234928673

BANK OF COMMUN-H

5.46

-1.086957

41007112

BANK EAST ASIA

28.6

-2.054795

2130534

AIA GROUP LTD ALUMINUM CORP-H

NAME

PRICE

DAY %

POWER ASSETS HOL

66.4

-0.5243446

VOLUME 2721772

SANDS CHINA LTD

30.1

-1.311475

13769935 7266541

SINO LAND CO

13.26

-1.339286

SUN HUNG KAI PRO

112.6

0.6255585

6298595

SWIRE PACIFIC-A

92.25

0.1085187

1485715 3229901

BELLE INTERNATIO

14.06

-0.8462623

15357000

ESPRIT HLDGS

11.12

-1.067616

11651317

267

-1.330377

BOC HONG KONG HO

23.65

-0.4210526

6681384

HANG LUNG PROPER

26.85

-2.185792

3767400

TINGYI HLDG CO

22.95

0.6578947

5572000

CATHAY PAC AIR

13.66

-2.008608

4058154

HANG SENG BK

115.7

-1.865988

2584740

WANT WANT CHINA

10.78

-0.1851852

13923049

CHEUNG KONG

HENDERSON LAND D

52.75

-1.217228

7888764

WHARF HLDG

52.9

-1.489758

2956495

72.2

0.487126

4455000

HONG KG CHINA GS

20.05

-1.474201

7584475

HONG KONG EXCHNG

126.6

-0.393391

5319736

74.4

-0.6675567

14037423

112.9

-0.5286344

4454504

CHINA COAL ENE-H

7.64

-1.546392

35686508

CHINA CONST BA-H

5.74

-1.034483

322606490

CHINA LIFE INS-H

23.1

30846780

CHINA MERCHANT

24.25

-1.422764

5149091

CHINA MOBILE

86.15

-1.147447

16870436

HUTCHISON WHAMPO

CHINA OVERSEAS

20.75

-1.190476

15695956

IND & COMM BK-H

CHINA PETROLEU-H

8.06

-1.587302

75754724

CHINA RES ENTERP

25.75

0.5859375

2222247

HENGAN INTL

HSBC HLDGS PLC

-0.4524887

6138353

5.06

-0.3937008

220207818

LI & FUNG LTD

12.38

-3.432137

23844193

MTR CORP

29.75

0.3372681

2268783

TENCENT HOLDINGS

MOVERS

1 22100

INDEX 21384.38 HIGH

22099.85

LOW

21358.14

CHINA RES LAND

18.02

1.80791

7551220

NEW WORLD DEV

12.26

-0.6482982

19487395

52W (H) 22149.69922

CHINA RES POWER

15.96

-2.325581

5647651

PETROCHINA CO-H

10.26

-0.965251

72868980

(L) 17613.19922

CHINA SHENHUA-H

31.8

-0.7800312

14991796

PING AN INSURA-H

61.2

-0.2444988

12287833

PRICE

DAY %

VOLUME

-2.040816

11075264

YANZHOU COAL-H

21300

7-November

9-November

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.33

-1.47929

135655047

AIR CHINA LTD-H

5.27

1.151631

10735147

CHINA PETROLEU-H

8.06

-1.587302

75754724

ZIJIN MINING-H

3.3

-3.508772

33766487

CHINA RAIL CN-H

8.34

0.4819277

16201000

ANHUI CONCH-H

26.35

-1.679104

18561847

CHINA RAIL GR-H

4.28

0.4694836

36118607

BANK OF CHINA-H

3.15

-0.6309148

234928673

CHINA SHENHUA-H

31.8

-0.7800312

14991796

ALUMINUM CORP-H

CHINA PACIFIC-H

5.46

-1.086957

41007112

CHINA TELECOM-H

4.27

0.2347418

71973514

19.52

7.607497

9150711

DONGFENG MOTOR-H

9.63

-1.027749

32345588

3.9

-1.265823

56455061

GUANGZHOU AUTO-H

5.2

-0.952381

4141258

CHINA COAL ENE-H

7.64

-1.546392

35686508

HUANENG POWER-H

6.11

0.3284072

15548693

CHINA COM CONS-H

7.05

-2.21914

21953169

IND & COMM BK-H

5.06

-0.3937008

220207818

CHINA CONST BA-H

5.74

-1.034483

322606490

JIANGXI COPPER-H

19.98

7368482

CHINA COSCO HO-H

3.76

-0.7915567

18714723

PETROCHINA CO-H

10.26

-0.965251

72868980

CHINA LIFE INS-H

23.1

30846780

PICC PROPERTY &

10.1

0.3976143

12096823

CHINA LONGYUAN-H

5.13

0.1953125

4369620

PING AN INSURA-H

61.2

-0.2444988

12287833

CHINA MERCH BK-H

14.1

-0.9831461

18756112

SHANDONG WEIG-H

10.28

-1.153846

5518876

BANK OF COMMUN-H BYD CO LTD-H CHINA CITIC BK-H

NAME

PRICE

DAY %

VOLUME

11.68

-2.341137

53080453

3.23

1.253918

56822211

ZOOMLION HEAVY-H

10.48

0.1912046

23173251

ZTE CORP-H

11.68

1.919721

6569863

MOVERS

2 10820

INDEX 10454.85 HIGH

10821.25

LOW

10424.13

CHINA MINSHENG-H

7.25

-1.091405

33050638

SINOPHARM-H

26.15

0.3838772

2038203

52W (H) 11916.1

CHINA NATL BDG-H

10.3

-0.1937984

45542352

TSINGTAO BREW-H

42.4

-0.1177856

923120

(L) 8987.76

14.22

0.1408451

6472151

WEICHAI POWER-H

-0.3436426

3030767

CHINA OILFIELD-H

10420

7-November

9-November

Shanghai Shenzhen CSI 300 NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

CSR CORP LTD -A

4.67

4.241071

68289658

SANY HEAVY INDUS

9.03

-0.3311258

10598065

7311184

DAQIN RAILWAY -A

6.09

0.4950495

14642225

SHANDONG DONG-A

39.72

-1.390268

2827047

4793800

DATANG INTL PO-A

4.13

2982205

SHANDONG GOLD-MI

38.55

0.5477308

8404349

16.36

0.3065604

6839018

DONGFANG ELECT-A

13.12

0.07627765

2567074

SHANG PHARM -A

10.83

0.3707136

6799566

11.07

-2.724077

12761801

SHANG PUDONG-A

7.53

-0.132626

26921255

2.4

-1.639344

22546867

SHANGHAI ELECT-A

4.08

-0.729927

2603352

12.28

-1.206758

16627856

SHANXI LU'AN -A

17.09

0.2346041

5261454

22.8

-0.9126467

9869144

SHANXI XINGHUA-A

41.62

-2.001413

1906269

12.31

-0.645682

8641908

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.58

0.3891051

65293173

AIR CHINA LTD-A

4.82

-0.8230453

ALUMINUM CORP-A

4.75

ANHUI CONCH-A

NAME

BANK OF BEIJIN-A

7.09

-0.1408451

13027492

EVERBRIG SEC -A

BANK OF CHINA-A

2.83

0.3546099

29689720

GD POWER DEVEL-A

BANK OF COMMUN-A

4.26

-0.234192

18151026

GF SECURITIES-A

BANK OF NINGBO-A

8.92

0.4504505

4016300

BAOSHAN IRON & S

4.65

0.2155172

11717767

GUANGHUI ENERG-A

15.83

2.393273

23996600

SHANXI XISHAN-A

GREE ELECTRIC

16.24

4.841833

8342634

HAITONG SECURI-A

8.69

-0.7990868

36558645

SHENZEN OVERSE-A

5.9

-1.006711

18661052

CHINA CITIC BK-A

3.58

-0.2785515

5764717

HANGZHOU HIKVI-A

-2.356902

2233128

SUNING APPLIAN-A

6.73

0.748503

24757626

CHINA CNR CORP-A

4.15

3.233831

95858326

HENAN SHUAN-A

61.16

-0.3259452

579975

TASLY PHARMAC-A

49.83

-1.870815

1659473

CHINA COAL ENE-A

6.97

-0.8534851

4131059

HONG YUAN SEC-A

17.25

-1.146132

8755298

TSINGTAO BREW-A

30.92

0.1619695

700599

CHINA CONST BA-A

4.29

0.2336449

45932076

HUATAI SECURIT-A

8.67

-2.033898

14575855

WEICHAI POWER-A

20.33

1.751752

5794494

BYD CO LTD -A

CHINA COSCO HO-A

4.05

-0.4914005

6153155

HUAXIA BANK CO

8.5

-0.1175088

9632439

WULIANGYE YIBIN

32.73

0.03056235

9459656

CHINA CSSC HOL-A

19.39

-0.7168459

2198923

IND & COMM BK-A

3.88

0.2583979

67949983

YANGQUAN COAL -A

13.61

0.2209131

6259416

CHINA EAST AIR-A

3.28

-0.3039514

23717929

INDUSTRIAL BAN-A

12.58

0.5595524

21126177

YANTAI CHANGYU-A

43.92

1.151543

1624839

CHINA EVERBRIG-A

2.6

0.3861004

102574018

INNER MONG BAO-A

32.3

-0.8289837

31406099

YANTAI WANHUA-A

13.19

-2.728614

10287767

CHINA INTERNAT-A

31.66

5003850

INNER MONG YIL-A

21.67

0.04616805

4871473

YANZHOU COAL-A

17.79

1.773455

1980879

CHINA LIFE INS-A

17.94

-0.8839779

3583277

INNER MONGOLIA-A

5.18

-0.3846154

36919137

YUNNAN BAIYAO-A

65.3

-1.523149

1716130

CHINA MERCH BK-A

10.21

0.2946955

21043505

JIANGSU HENGRU-A

29.45

0.06795787

970395

ZHONGJIN GOLD

16.1

0.4366812

16474432

CHINA MERCHANT-A

9.2

-1.918977

12342725

JIANGSU YANGHE-A

113.5

-1.637924

960408

ZIJIN MINING-A

3.84

0.2610966

29236852

CHINA MERCHANT-A

22.1

0.7292616

5022655

JIANGXI COPPER-A

20.75

-0.7177033

4558923

ZOOMLION HEAVY-A

8.22

-0.6045949

30797704

11.13

-1.851852

6013013

ZTE CORP-A

8.5

1.070155

9321371

11.6

-0.08613264

5522008

CHINA MINSHENG-A

6.11

0.1639344

51684971

JINDUICHENG -A

CHINA NATIONAL-A

6.39

-1.388889

16943866

JIZHONG ENERGY-A

CHINA OILFIELD-A

15.8

-0.1264223

1377916

KANGMEI PHARMA-A

16.47

-2.255193

10435347

CHINA PACIFIC-A

17.92

-0.05577245

6792618

KWEICHOW MOUTA-A

234.81

0.3032892

1167006

37.18

-0.3217158

3135704

0.4878049

15620018

CHINA PETROLEU-A

6.26

-0.6349206

7492942

LUZHOU LAOJIAO-A

CHINA RAILWAY-A

5.27

3.536346

30964813

METALLURGICAL-A

2.06

CHINA RAILWAY-A

2.85

3.26087

71313080

NINGBO PORT CO-A

2.47

8999841

PANGANG GROUP -A

3.59

-0.8287293

27588847

CHINA SHENHUA-A

22.67

0.08830022

3329457

CHINA SHIPBUIL-A

4.36

0.2298851

14271804

PETROCHINA CO-A

8.69

-0.3440367

7260336

13.42

0.2989537

MOVERS 123

18 2300

INDEX 2240.924

CHINA SOUTHERN-A

3.44

24903622

PING AN BANK-A

6217075

HIGH

2294.4

CHINA STATE -A

3.08

-1.282051

55948510

PING AN INSURA-A

38.61

8162360

LOW

2236.9

CHINA UNITED-A

3.46

-1.983003

71940720

POLY REAL ESTA-A

11.26

0.5357143

22993702

CHINA VANKE CO-A

8.38

-1.411765

33851822

QINGDAO HAIER-A

11.47

-0.08710801

2842446

CHINA YANGTZE-A

6.41

-0.311042

7111420

QINGHAI SALT-A

24.4

-1.612903

4131011

10.78

-1.100917

44133124

SAIC MOTOR-A

13.53

-0.8791209

10537125

PRICE DAY %

Volume

PRICE DAY %

Volume

CITIC SECURITI-A

159

52W (H) 2754.001 (L) 2172.878906

2230

7-November

9-November

FTSE TAIWAN 50 INDEX NAME

NAME

ACER INC

24.4

4.273504

22630333

FORMOSA PLASTIC

75.9

-1.30039

8095281

ADVANCED SEMICON

22.6

1.345291

32261499

FOXCONN TECHNOLO

104.5

1.456311

16288064

NAME

PRICE DAY %

TAIWAN MOBILE CO

-1.470588

5802790

TPK HOLDING CO L

430

3.489771

10645089

0.3314917

38435994

ASIA CEMENT CORP

36.35 -0.4109589

2499385

FUBON FINANCIAL

31.85

1.111111

10662047

TSMC

90.8

ASUSTEK COMPUTER

320.5

2.724359

7358895

HON HAI PRECISIO

91.4

0.550055

50619174

UNI-PRESIDENT

51.8 -0.9560229

AU OPTRONICS COR

11.9

-0.41841

80999982

HOTAI MOTOR CO

183.5

0.273224

401075

CATCHER TECH

Volume

100.5

UNITED MICROELEC

10.85

2.358491

8055600 30295698

134

3.474903

29477495

HTC CORP

226

6.855792

26708992

WISTRON CORP

29.35

0.3418803

8002884

CATHAY FINANCIAL

29.85

0.1677852

13415415

HUA NAN FINANCIA

15.5

0.3236246

5670396

YUANTA FINANCIAL

13.55

0.3703704

17749725

CHANG HWA BANK

14.95

0.3355705

7112342

LARGAN PRECISION

706

-1.671309

2083664

YULON MOTOR CO

51.8

2.574257

6148325

73.2 -0.4081633

3166999

LITE-ON TECHNOLO

-1.333333

2879044

CHENG SHIN RUBBE

11.45

88771187

MEDIATEK INC

325

2.523659

10207151

CHINA DEVELOPMEN

CHIMEI INNOLUX C

6.76

2.424242

25026305

MEGA FINANCIAL H

21.2 -0.2352941

24650460

CHINA STEEL CORP

25.4

0.5940594

11597307

NAN YA PLASTICS

51.3 -0.7736944

4429248

CHINATRUST FINAN

15.9

0.3154574

40765094

PRESIDENT CHAIN

CHUNGHWA TELECOM

92.5 -0.5376344

7290346

QUANTA COMPUTER

COMPAL ELECTRON

19.2

3.783784

25757366

SILICONWARE PREC

28.9

6228019

DELTA ELECT INC

107 -0.4651163

2702368

SINOPAC FINANCIA

11.75

1.731602

10031486

FAR EASTERN NEW

30.8

0.3257329

4658968

SYNNEX TECH INTL

2507167

FAR EASTONE TELE

66.3

-0.748503

9113371

TAIWAN CEMENT

37.65 -0.9210526

7916607

16.85

15.45

1.311475

5586212

70.7

1.144492

3642085

26.85

0.9398496

1331745

0.297619

9398740

TAIWAN COOPERATI

FORMOSA CHEM & F

FIRST FINANCIAL

65.3 -0.7598784

9266420

TAIWAN FERTILIZE

FORMOSA PETROCHE

82.7 -0.1207729

1534863

TAIWAN GLASS IND

150.5

1009397

71.6

1.704545

8829685

MOVERS

4 5115

INDEX 5111.74 HIGH

5113.04

LOW

5029.12

52W (H) 5621.53 (L) 4643.05

5025

7-November

9-November

November 12, 2012 business daily | 13

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

MELCO CROWN ENTERTAINMENT

MGM CHINA HOLDINGS 38.4

27.60 27.45

13.9

38.0

27.30

13.7 37.6

27.15

Max 27.5

Average 27.331

Min 27.15

Last 27.2

27.00

SANDS CHINA LTD

Max 38.3

Average 37.85

Min 37.3

Last 37.3

37.2

SJM HOLDINGS LTD

Max 13.82

Average 13.673

Min 13.58

Last 13.82

13.5

WYNN MACAU LTD

30.4

17.7

22.4

17.5

22.1

30.3 30.2 30.1

Average 30.193

Max 30.35

Min 30.05

Last 30.1

30.0

17.3 Max 17.68

Average 17.511

COMMODITIES ENERGY

NAME

PRICE

WTI CRUDE FUTURE Dec12

86.07

1.151721706

-12.27193966

110.25

79.11999512

BRENT CRUDE FUTR Dec12

109.4

2.004662005

5.303686592

122.0999985

89.84999847

GASOLINE RBOB FUT Dec12

DAY %

YTD %

(H) 52W

269.92

3.524719058

8.777303135

295.8800077

217.2600031

928.5

0.923913043

3.569436698

1040.25

798

NATURAL GAS FUTR Dec12

3.503

-2.910199557

-6.760713335

4.440999985

2.90899992

300.55

1.695202003

4.670195723

335.1700068

254.2500019

1731.08

0.9358

10.6185

1796.11

1522.75

Gold Spot $/Oz

32.6

2.8797

17.1187

37.4775

26.1513

Platinum Spot $/Oz

Silver Spot $/Oz

1554.25

0.8546

11.4557

1736

1339.25

Palladium Spot $/Oz

606.75

0.1238

-7.1538

725.19

553.75

LME ALUMINUM 3MO ($)

1921

-0.207792208

-4.900990099

2361.5

1827.25

LME COPPER 3MO ($)

7570

-0.786369594

-0.394736842

8765

7100.25

LME ZINC

1892

-1.918092276

2.547425474

2220

1745

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jan13

15950

-1.29950495

-14.7514698

22150

15236

15.225

1.09561753

-0.846629762

16.60000038

14.60000038

742

-0.168180289

23.61516035

846.25

511

Mar13

WHEAT FUTURE(CBT) Dec12

MAJORS

ASIA PACIFIC

CROSSES

AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP

Average 22.15

Last 22.05

Min 21.9

NAME

886.5

-1.772853186

23.125

953.25

629.5

1451.25

-2.975096106

19.641385

1781.5

1126.75

COFFEE 'C' FUTURE Mar13

155.55

-0.828817341

-34.62912377

249

154.9499969

CROWN LTD

SUGAR #11 (WORLD) Mar13

19.06

1.167728238

-18.40753425

25.12999916

18.65999985

AMAX HOLDINGS LT

COTTON NO.2 FUTR Mar13

70.44

0.142152403

-20.41577223

99.12999725

66.84999847

BOC HONG KONG HO

WORLD STOCK MARKETS - Indices

DAY %

1.0387 1.5896 0.9488 1.2714 79.49 7.9839 7.7515 6.243 54.755 30.64 1.2244 29.01 41.068 9634 82.555 1.20587 0.79949 7.96 10.1493 101.05 1.03

-0.2497 -0.2948 -0.2319 -0.1727 0.4277 -0.0113 -0.0103 -0.0016 -0.694 0.1958 0.0163 0.3826 -0.0317 -0.0208 0.6917 -0.0174 -0.0763 0.0842 0.1744 0.6136 0

YTD %

(H) 52W

1.7436 2.2711 -1.1277 -1.9057 -3.2457 0.1966 0.2051 0.8329 -3.0865 2.97 5.8968 4.3744 6.7498 -5.8646 -4.9942 0.9056 4.2402 2.1884 1.9972 -1.3756 0.0097

(L) 52W

1.0857 1.6309 0.9972 1.3815 84.18 8.0308 7.7979 6.3964 57.3275 32 1.315 30.5 44.35 9662 88.637 1.24438 0.86648 8.7472 11.0595 111.44 1.0311

0.9582 1.5235 0.8931 1.2043 76.03 7.9823 7.7498 6.2335 48.6088 30.2 1.2152 28.99 40.996 8875 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029

MACAU RELATED STOCKS

SOYBEAN FUTURE Jan13

NAME

21.8 Max 22.35

PRICE

(L) 52W

GAS OIL FUT (ICE) Dec12

CORN FUTURE

Last 17.52

CURRENCY EXCHANGE RATES

HEATING OIL FUTR Dec12 METALS

Min 17.34

ARISTOCRAT LEISU

PRICE

(H) 52W

(L) 52W

2.74

-0.3636364

DAY % YTD % 24.54545

3.25

2.16

VOLUME CRNCY 1237876

10.14

1.909548

25.33992

10.14

7.92

1576919

0.07

4.477612

-19.54023

0.119

0.055

20537000

23.65

-0.4210526

28.53261

16.24

6681384

CENTURY LEGEND

0.26

13.04348

0.335

0.204

CHEUK NANG HLDGS

4.18

49.28572

4.36

2.5

73000

CHINA OVERSEAS

20.75

-1.190476

60.04137

21.95

11.507

15695956

CHINESE ESTATES

11.6

-3.97351

-7.2

13.26

8.3

98000

CHOW TAI FOOK JE

10.18

-5.565863

-26.86782

15.16

8.4

15397450

EMPEROR ENTERTAI

1.52

1.333333

36.93694

1.57

0.99

1495000

FUTURE BRIGHT

1.22

-0.8130081

190.4762

1.36

0.37

462000

GALAXY ENTERTAIN

27.2

-0.5484461

91.01124

29.45

13.2

14401985

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

12815.39

0.03176878

4.893204

13661.87

11231.56

NASDAQ COMPOSITE INDEX

2904.874

0.3207987

11.50506

3196.932

2441.48

HANG SENG BK

115.7

-1.865988

25.55616

120

91.05

2584740

FTSE 100 INDEX

5769.68

-0.110283

3.542543

5989.07

5075.22

HOPEWELL HLDGS

28.9

1.940035

47.43275

31.091

18.319

1721400

DAX INDEX

7163.5

-0.5754369

21.44922

7478.53

5366.5

HSBC HLDGS PLC

74.4

-0.6675567

26.10169

14037423

HUTCHISON TELE H

3.23

-0.9202454

8.026756

3.88

2.81

4273096

LUK FOOK HLDGS I

20.75

-0.9546539

-23.43174

35.2

14.7

2274366

MELCO INTL DEVEL

7.56

-0.1321004

31.02253

8.28

5.12

1308000

NIKKEI 225

8757.6

-0.9001771

3.57466

10255.15

8135.79

HANG SENG INDEX

21384.38

-0.8463428

16.00265

22149.69922

17613.19922

CSI 300 INDEX

2240.924

-0.1995631

-4.468431

2754.001

2172.878906

MGM CHINA HOLDIN

13.82

0.8759124

44.07609

14.76

9.347

2038400

TAIWAN TAIEX INDEX

7293.22

0.6985032

3.126946

8170.72

6609.11

MIDLAND HOLDINGS

3.76

-2.083333

-4.907553

5.217

3.249

3270000

NEPTUNE GROUP

0.158

0.6369427

42.34234

0.222

0.08

1200500

NEW WORLD DEV

12.26

-0.6482982

95.84664

13.2

6.13

19487395

SANDS CHINA LTD

30.1

-1.311475

37.12984

33.05

19.96

13769935

SHUN HO RESOURCE

1.23

1.37

0.95

SHUN TAK HOLDING

3.16

0.6369427

23.47955

3.51

2.418

2628255

SJM HOLDINGS LTD

17.52

1.860465

40.09795

18.18

11.519

5219963

SMARTONE TELECOM

15.78

-1.12782

17.41072

17.5

11.72

4838748

WYNN MACAU LTD

21.9

-3.311258

12.30769

25.5

14.62

5778784

ASIA ENTERTAINME

3.91

7.417582

-33.5034

7.2508

2.4

54906

BALLY TECHNOLOGI

46.69

-0.5961252

18.02325

51.16

35.45

716954 4215

KOSPI INDEX

1904.41

-0.5223541

4.30894

2057.28

1750.6

S&P/ASX 200 INDEX

4462.024

-0.4861478

9.995251

4581.8

3973.8

4333.64

0.1333682

13.38695

4366.856

3618.969

FTSE Bursa Malaysia KLCI

1641.08

0.000609359

7.208977

1679.37

1424.19

NZX ALL INDEX

860.445

0.00092976

17.90143

874.107

712.548

JAKARTA COMPOSITE INDEX

PHILIPPINES ALL SHARE IX

3589.42

0.3954935

17.87759

3607.89

2952.17

HSBC Dragon 300 Index Singapor

588.65

-1.13

18.6

STOCK EXCH OF THAI INDEX

1290.83

-0.2218443

25.89533

1314.64

964.65

HO CHI MINH STOCK INDEX

386.71

0.2878631

10.00142

492.44

332.28

BOC HONG KONG HO

3.11

29.73537

3.3

Laos Composite Index

1148.63

0.7128452

27.70217

1148.63

876.33

GALAXY ENTERTAIN

3.468

-3.666667

85.45454

3.73

1.68

2120

13.5

5.222136

-21.51163

18.1

10.92

13528400

JONES LANG LASAL

75.96

-0.7707381

23.99609

87.52

55.88

221203

LAS VEGAS SANDS

43.5

1.802013

1.802014

62.09

34.72

6831225

MELCO CROWN-ADR

14.5

2.184637

50.72765

16.02

8.18

3208628

MGM CHINA HOLDIN

1.76

47.68902

1.96

1.1917

2000

MGM RESORTS INTE

10.01

2.351738

-4.026848

14.9401

8.83

9232233

SHFL ENTERTAINME

13.43

1.511716

14.59044

18.77

10.22

234466

SJM HOLDINGS LTD

2.17

34.98611

2.32

1.4695

204300

108.35

-0.8237986

4.583426

129.6589

84.4902

1574706

INTL GAME TECH

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

WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily November 12, 2012

OPINION How Obama can make this election matter Clive Crook

Bloomberg View columnist

[Obama] must start exercising the leadership he so conspicuously failed to provide in his first term, making the case for his policies to the public

he U.S. chose wisely in electing President Barack Obama to a second term. How much difference his re-election will make is another question: a lot, if one or both parties draw the right lessons; not very much, if they don’t. For at least a year, conservatively estimated, Congress and the White House have been essentially shut down as campaigning took priority over governing. You’d think an election that cost billions of dollars and an incalculable expense of political effort would have changed something. Yet the U.S. remains a closely divided country, with a president lacking any clear policy mandate, a deadlocked Senate and a House of Representatives still run by the opposing party. As a matter of political arithmetic, the election was an obscenely distended non-event. It’s good for the country’s soul that its first black president did not go down to defeat after his first term. And it’s good that there’ll be no Romney administration intent on dismantling health-care reform – an important achievement which, if implemented well, Americans will eventually come to admire. Mitt Romney or no Mitt Romney, however, health-care reform remains

vulnerable to attrition at the hands of a hostile Congress. More generally, defending the status quo just isn’t good enough when you consider the challenges facing the U.S., especially the fiscal challenge.

Duelling narratives Much as the idea disgusts both sides, the country still needs Democrats and Republicans to work together – a task this bitterly fought election has made more difficult. The main problem is that narratives each side uses to justify digging in and refusing to compromise will be easy to frame. The Democrats won, after all. What else do you need to know? Elections have consequences, as Obama told Republicans in 2009. The economy is bound to strengthen over the next four years, Democrats will calculate, and they’ll be able to take credit. Time is now on their side. Why should the president give ground? Then again, Republicans won too – in the House. Speaker John Boehner has noticed this, even if the country hasn’t yet woken up to it. (I watched six hours of election coverage last night. Less than 10 minutes was devoted to the House,

co-equal to the president in setting domestic policy. What a strange land this is.) The economy’s prospects aren’t bright, Republicans will reason, and implementing the health-care reform will be a mess, especially if they can help it. In 2016, the party will have a better presidential candidate. (That much, they’ll decide, is obvious. What were they thinking, nominating Romney?) Time is on their side. Why should the Republicans give ground? Of these two scenarios, the Republican version is plainly the more delusional. Romney was a weak candidate, to be sure, but the party in its present form is all but designed to produce weak candidates: it holds nominating contests among unelectable conservatives, thereby forcing the eventual nominee to try and turn himself inside out to have a chance in the general election. The process offends independent voters twice over and doesn’t even attempt to engage huge swaths of the U.S. electorate. The party needs to come back to the centre, ditch its nativist prejudices and above all embrace the Hispanic Americans who could and should be a natural Republican constituency.

Cooperation with Democrats on comprehensive immigration reform could emerge from that self-interested realignment. Let’s be optimistic: that’s one way in which a serious Republican rethink could yield good results for the party and the country.

Another rethink Obama’s need to rethink is less pressing – he’s a twoterm president, after all, a truly historic figure. But this was a smaller and meaner victory than he was capable of, and a betrayal of the promises he made in 2008. To realise his ambition of presidential greatness, he needs goals and accomplishments in his second term. He shouldn’t settle for four years of paralysis and disappointment. He doesn’t need to move as much as the Republican Party, but he does need to move. He can’t say he won this election based on his plan for the next four years, because he doesn’t have one. He ought to put that right – and his proposals must be calculated to appeal to a broader constituency than the Democratic base. Then he must start exercising the leadership he so conspicuously failed to provide in his first term,

making the case for his policies to the public. The idea would not be to surrender to the Republicans in the House – the charge that many Democrats will level if Obama does what I’m suggesting. It would be to outwit them. Seriously, how hard can that be? If his opponents can be manoeuvred into a deal on Obama’s terms, the U.S. will move ahead and the president will secure his legacy. If they can’t – and the country understands the fault lies with the Republican Party rather than with the president or his party – his opponents will suffer the consequences in 2014. Of course, all this begs the question of what, exactly, Obama should be proposing. Here are two specific suggestions, Mr President. First, without delay, propose tax and spending extensions to avoid the fiscal cliff at year’s end. Second, take the Simpson-Bowles debt-reduction plan down from the shelf, dust it off, and in a renewed commitment to bipartisanship, make it your own. It’s a shame you didn’t do this in the first place, but voters have given you a second chance. Prove them right and put the U.S. on course for fiscal stability with a better and fairer tax system. Bloomberg View

EDITORIAL COUNCIL Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça FOUNDER & PUBLISHER Paulo A. Azevedo | pazevedo@macaubusinessdaily.com EDITOR-IN-CHIEF Tiago Azevedo DEPUTY EDITOR-IN-CHIEF José I. Duarte ASSOCIATED EDITOR Michael Grimms NEWSDESK Vitor Quintã (Chief Reporter), Alex Lee, Tony Lai, Xi Chen CREATIVE DIRECTOR José Manuel Cardoso DESIGNER Janne Louhikari CONTRIBUTORS Frederico Rato, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani PHOTOGRAPHY Carmo Correia, John Si, Manuel Cardoso ASSISTANT TO THE PUBLISHER Laurentina da Silva | ltinas@macaubusinessdaily.com OFFICE MANAGER Elsa Vong | elsav@macaubusinessdaily.com AGENCIES Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate PRINTED in Macau by Welfare Ltd.

Business Daily is a product of De Ficção – Multimedia Projects ADDRESS Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau TEL. (853) 2833 1258 / 2870 5909 FAX (853) 2833 1487 EMAIL newsdesk@macaubusinessdaily.com ADVERTISING advertising@macaubusinessdaily.com SUBSCRIPTIONS sub@macaubusinessdaily.com

November 12, 2012 business daily | 15

OPINION BUSINESS

WIRES

Europe’s populists at the gate

Leading reports from Asia’s best business newspapers

Barry Eichengreen

Professor of Economics and Political Science at the University of California, Berkeley

ECONOMIC TIMES The government is likely to conduct a through inquiry into allegations that multinational HSBC Bank was involved in money laundering which may help terror groups operating in India. The probe is likely to be conducted by sleuths of various intelligence wings of Home and Finance Ministries as the allegations could have serious security implications. The probe agencies will look into reports that funds were being routed from Pakistan and a few Gulf countries to terror groups operating in India using banking networks.

JAKARTA GLOBE Japanese automaker Toyota Motor Corp. revealed on Saturday a mammoth plan to invest Rp 26 trillion (US$2.7 billion) in Indonesia over the next four years. The amount equals Toyota’s total investment in Indonesia over the past 40 years. The initiative was announced after a meeting between Indonesia’s President Susilo Bambang Yudhoyono and executives from Toyota Motor Corp., including president and CEO Akio Toyoda and Koichi Ina, the president of Daihatsu Motor Corp., a subsidiary of Toyota.

JAPAN TODAY Economy minister Seiji Maehara says that a government bailout is not on the cards for the nation’s struggling electronics giants, after embattled Sharp cast doubt on its own survival. Mr Maehara said the likes of Panasonic and Sharp, on track to book combined annual losses of more than US$15 billion, should not expect the kind of taxpayer-funded rescue handed to once-bankrupt Japan Airlines or TEPCO. Neither Sharp nor key rivals Panasonic and Sony have sought bankruptcy protection as they undergo massive corporate restructurings.

KOREA TIMES Korea’s mobile carriers – SK Telecom, KT and LG Uplus – are expected to see a drastic deterioration in earnings in the near future due to increased promotional expenses and offering heavy subsidies. Despite the ongoing probe by the country’s telecom regulator over whether they have been offering excessive subsidies for handset purchases, the carriers are simply ignoring the warning signs.TheKoreaCommunications Commissions (KCC) officially recently asked senior marketing executives from the firms to stop providing large subsidies, KCC officials said.

s Europe’s crisis over? Investors, policy analysts, and even officials are quietly beginning to suggest that this might be the case. The euro has strengthened by nearly 10 percent against the dollar since European Central Bank President Mario Draghi vowed on July 26 to do “whatever it takes” to hold the currency together. Similarly, the Euro VIX, a popular measure of expectations of euro volatility, has fallen significantly. The cost of buying protection against fluctuations in the euro/ dollar exchange rate declined last month to its lowest level in nearly five years. Borrowing costs for the Spanish and Italian governments have similarly fallen dramatically. A consistent narrative underpins this change in market conditions. European leaders have put in place mechanisms to support Italy and Spain. As of October, the continent has an operational European Stability Mechanism to purchase new Italian and Spanish government bonds if investors go on strike. In parallel, the ECB has announced an “outright monetary transactions” (OMT) programme to purchase bonds already trading on the secondary market. At their most recent summit, European Union leaders reiterated their commitment to finalise the design of a single supervisory mechanism by January 1, 2013, and to activate it by the end of next year. These steps, it is argued, have taken both sovereigndefault risk and a banking crisis off the table. With the ESM and ECB capping interest rates on government bonds, countries will have as much time as they need – and they will need plenty – to reduce their debt burdens to manageable levels. And, with a single supervisor in place, the ESM will be permitted to inject capital directly into troubled banks. The new banking union can

then be extended to include a common resolution fund to enable the orderly dissolution of insolvent institutions.

Narrative gaps To be sure, there are some gaps in this narrative. The ESM has limited firepower, and, along with the ECB, will buy only the bonds of governments that ask, something that proud leaders are reluctant to do. The end-2013 deadline for implementation of the banking union is a long way off. Even if there is agreement on the need for a common resolution fund – which is not clear – there is no agreement on how to pay for it. Nevertheless, the markets evidently regard this as a comforting bedtime story – all the more so now that European leaders have averred that Greece will not be pushed out of the euro zone. Officials recognise that cutting off EU support and compelling the ECB to stop providing credit to the Bank of Greece would be Europe’s Lehman Brothers

Europe needs policies that hold out the promise of lower unemployment and better times. The continuing absence of such policies is the gravest threat to the euro

moment. The consequences could be catastrophic, not just for Greece, but also for Portugal, Spain, Italy, and who knows whom else. In their October 18 communiqué, euro zone leaders stated in no uncertain terms that they are not prepared to go there. Given Europe’s facility at creative accounting, some way will be found to keep Greece on life support.

Rejection risk So, is the crisis really over? In focusing on summit declarations and promises of far-reaching reforms of EU institutions, investors are missing the real risk: the collapse of public support for, or at least public acquiescence to, the austerity policies required to work down heavy debt burdens – and for the governments pursuing these policies. Mass anti-austerity protests are one warning sign. Another is growing popular support for neo-Nazi movements like Golden Dawn, now the third-largest political party in Greece. The rise to power of a “rejectionist” European government – that is, one that unilaterally rejects the policy status quo – would

immediately bring the crisis to a head. A Greek government that summarily rejected conditions set by the EU and the International Monetary Fund would immediately be cut off by the ECB and forced to exit the euro. A Spanish government that did likewise would lose all prospect of support from the ECB’s OMT programme, and the markets would quickly pounce. Some will object that dire warnings of political reaction are overdrawn. So far, no country has voted into power a rejectionist administration. Even in Greece, where conditions are the worst, Golden Dawn is still a minority party. The answer to these critics is, unfortunately, “just wait.” It is worth recalling that nearly four years passed from the onset of the Great Depression in Germany to the Nazis’ accession to power. Europe needs a growth strategy to put this political genie back in the bottle. It needs policies that hold out the promise of lower unemployment and better times. The continuing absence of such policies is the gravest threat to the euro. Unless that changes, markets will wake up to that risk – perhaps with a jolt – sooner or later. © Project Syndicate

16 |

business daily November 12, 2012

CLOSING BRICS discuss pooling forex reserves

Arab spring economies to recover slowly

Leading emerging market countries are discussing pooling up to US$240 billion in foreign exchange reserves to protect themselves from shortterm liquidity pressures, according to documents outlining plans by the five BRICS nations. BRICS countries China, Russia, India, Brazil and South Africa announced a working group in June to look into jointly pooling reserves and creating a new development bank to fund infrastructure projects in the developing world. According to the documents the pool of central bank money would be available to BRICS facing balance of payments difficulties.

Most economies hit by the Arab Spring uprisings will recover slowly next year, grappling with high inflation and rising unemployment due to poor global conditions, the International Monetary Fund predicted in a report released yesterday. In its twice-yearly outlook for the region, the global lender said a partial return of political stability could permit somewhat faster growth in the combined output of Egypt, Jordan, Morocco, Libya, Tunisia and Yemen during 2013. But weak demand in Europe and other regions will weigh on the Arab Spring states. In many of those countries exports are shrinking.

U.S. fiscal cliff threatens world economy, Swan says European growth forecasts lowered as deadline approaches

Australian Treasurer Wayne Swan

he U.S. needs to end its political gridlock in order to avert the so-called fiscal cliff that is jeopardising a “fragile” recovery in the global economy, Australian Treasurer Wayne Swan said. “Without action by Congress, the

consequences would be very grave,” Mr Swan said in his e-mailed weekly note yesterday. “The world cannot afford to see a continuation of the gridlock that has bedevilled the U.S. political system in recent years.” President Barack Obama,

claiming a mandate from voters after his November 6 re-election, faces opposition over his call for an immediate tax-cut extension for people earning less than US$250,000 and insistence that top earners pay more. The U.S. faces US$1.2 trillion in mandated spending reductions and tax boosts over a decade starting January 1 should Congress fail to agree to reduce the U.S. deficit, which totalled US$1.09 trillion in fiscal 2012. Mr Obama has offered no public concessions to House Speaker John Boehner, who has cited public support for the re-elected House Republican majority for his stance of backing no increases in tax rates. Mr Obama and Mr Boehner will meet at the White House November 16, along with House Democratic Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell. Mr Swan, who held discussions with Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben S. Bernanke in Washington last week, called for the Democrats and

the Republicans to work together to avoid the cliff. “Congress must heed President Obama’s call to work together to find common ground and get the U.S. budget back on a sustainable longterm track while also continuing to support jobs and economic growth,” Mr Swan said. The president wants to let George W. Bush-era tax cuts lapse on income of individuals above US$200,000 and of married couples above US$250,000. That would push the top tax rate to 39.6 percent from 35 percent. The Senate, controlled by Democrats, and the House, controlled by Republicans, have each passed one-year extensions of their own proposals. The policies preferred by Democrats would lead to about US$58 billion in higher taxes on top earners in 2013. Concern about the impact of a potential political stalemate over the fiscal cliff has already had an impact on global markets. On November 10, the euro slid the most in four months versus the yen on concern the U.S. budget showdown will push the world’s biggest economy into recession and Greece will struggle for more rescue funds. The European Commission on November 7 forecast that the 17- nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent. It cut the estimate for Germany, Europe’s largest economy, to 0.8 percent from 1.7 percent. Bloomberg

Apple, HTC settle patent battle HTC smartphones have been held by U.S. customs officials

pple Inc. and HTC Corp announced on Saturday a global patent settlement and 10-year licensing agreement that ends one of the first major conflagrations of the smartphone patent wars. Apple sued HTC in 2010, accusing the Taiwanese handset company of infringing on the iPhone maker’s patented technology. It was Apple’s first major legal salvo against a manufacturer that used Google’s Android operating system. Apple and HTC did not disclose specific terms of the deal. In a joint statement, Apple chief executive Tim Cook said he was glad to reach a settlement. “We will continue to stay laser focused on product innovation,” Mr Cook said. HTC chief executive Peter Chou said his company was pleased to resolve the dispute so it could “focus on innovation instead of litigation”. Since Apple first sued HTC, its smartphone patent war has engulfed

Both companies want to focus on innovation

competitors like Samsung Electronics Co Ltd and Google’s Motorola Mobility unit. The iPhone maker won a US$1.05 billion verdict against Samsung in August, while litigation against Motorola has failed to produce any decisive wins. However, Apple had the most success against HTC when it came to using litigation to actually disrupt the flow of products into the crucial U.S. market.

Late last year, the U.S. International Trade Commission ruled that HTC had infringed upon one of four patents Apple had disputed and imposed a sales ban on some of the Taiwanese maker’s phones. Though HTC said it had devised a technical workaround to Apple’s patents, the company announced in May that shipments of its phones were

being held up by U.S. customs officials. Once one of the industry’s high flyers, HTC has been badly hit by competition from Apple and Samsung. Last month HTC forecast a 14.5 percent fall in revenue in the fourth quarter from the third, worse than analyst forecasts and the second straight quarterly decline this year. Reuters