Macau Business Daily, November 6, 2012 by Business Daily

Year I Number 156 Tuesday November 6, 2012 MOP 6.00 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte

Promised public housing delayed The government’s 2007 promise to provide 19,000 public housing units by the end of this year will not be met, officials admitted yesterday. The Housing Bureau said that more than 11,300 of the properties would be ready by year-end, with others only completed by the middle of 2014.

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‘Wasteful’ continuing education slammed T

he Commission of Audit has strongly criticised the city’s “wasteful” continuing education system. Its report calls for “full and serious” revision of the government’s education subsidy plan. Allegations include identity theft in order to register ‘ghost students’ on courses; possible false accounting by institutions whereby the list price of a course was higher than that actually charged to students; and poor or nonexistent monitoring of course-providing establishments by the Education and Youth Affairs Bureau. The commission believes its findings “hint at abuse”. The public might

never know the full truth. The bureau says it’s destroyed some of the relevant paperwork. Up to two billion patacas (US$250 million) has been set aside by the government for spending on continuing education. Every registered resident has the right to 5,000 patacas to be spent by December next year. By this September the bureau had approved payments worth nearly 200 million patacas. But more than 10 percent (22 million patacas) was linked to flawed decisions, says the commission.

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HANG SENG INDEX

Bridge to hit ferries, says maritime boss

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Local sea passenger traffic is likely to contract ‘one third’ after the Hong Kong-Zhuhai-Macau Bridge opens – probably in 2016 – said a government official yesterday. But Maritime Administration director Susana Wong Soi Man added that having multiple transport modes into Macau was important. It would help mitigate the bottlenecks sometimes experienced at existing transport terminals during holidays and other peak times.

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November 5

6 pct of workforce in construction last year

HSI - Movers Name

The construction industry employed almost six percent of the labour force in 2011 according to a Statistics and Census Service survey. The total value of projects was 24.6 billion patacas (US$3.08 billion). It included a portion of the work on the Galaxy Macau resort on Cotai – opened in May that year – and numerous public infrastructure schemes. Workers in construction increased by one-third to more than 20,000.

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Swallow’s nest trade in the soup

%Day

WHARF HLDG

1.67

CHINA RES ENTERP

1.12

LI & FUNG LTD

1.06

HONG KONG EXCHNG

0.99

NEW WORLD DEV

0.97

AIA GROUP LTD

-1.89

CATHAY PAC AIR

-1.93

CHINA PETROLEU-H

-2.36

TINGYI HLDG CO

-2.39

COSCO PAC LTD

-5.01

Source: Bloomberg

Brought to you by

A tightly enforced ban against the import of swallow nests to China has hit local retailers badly according to an informal survey by Business Daily. The ban came into effect on November 1. Fines of up to 5,000 yuan (US$793) can be imposed on anyone carrying the delicacy to the mainland. Canned nests are exempted from rules.

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business daily November 6, 2012

macau

Govt to miss target for public housing Over 11,300 homes will be completed this year, but not all 19,000 the government hoped to finish Tony Lai

tony.lai@macaubusinessdaily.com

The Cheng I public housing complex in Ilha Verde will be fully ready only in 2014

he Housing Bureau has said over 11,300 of the 19,000 flats envisaged in the public housing plan will be ready this year, and estimates that the rest will be completed by the middle of 2014. Bureau director Tam Kuong Man, speaking at a press conference yesterday about sales in the Cheng I public housing complex in Ilha Verde, said housing projects on Taipa and Coloane were in the final stages of construction. “So I believe at the end of this year there will certainly be over 11,300 flats completed,” Mr Tam said. He gave no direct answer when asked when the government expected to complete the rest of the 19,000 homes in public housing promised in 2007 by Edmund Ho Hau Wah, the

chief executive at the time. The government had previously said all 19,000 homes would be completed this year. “All the construction work has started and we have already spoken to the relevant public bodies in the hope of providing the flats as soon as possible to the households on the waiting list,” Mr Tam said. But he said the Cheng I public housing complex, which will contribute 770 subsidised flats to the total of 19,000 homes, would not be completely ready until the middle of 2014. On October 31, 4,331 households were on the waiting list for subsidised public housing, almost all of them waiting for homes on the peninsula. Three had applied for a flat on Taipa.

Mr Tam said his bureau would take applications for one-bedroom subsidised flats again next year, but did not say exactly when. It is estimated that over 2,000 onebedroom subsidised flats are unsold because of low demand.

Sales on hold The sale of 120 one-bedroom flats in Cheng I has been put on hold. The other 650 homes there were sold for an average of 19,990 patacas (US$2,504) per square metre of useable area. The government says this is 51.1 percent cheaper than similar residential space in the private market. It is also about 5 percent cheaper

than space in the Cheng Chong public housing complex nearby. Mr Tam said this was due to Cheng Chong having larger flats. The useable area of Cheng I’s 524 two-bedroom flats and 125 threebedroom units ranges between 46.21 square metres and 59.06 square metres. The prices of two-bedroom flats range between 808,400 patacas and 1.09 million patacas. The prices of three-bedroom flats range between 958,000 patacas and 1.28 million patacas. The development covers 4,600 square metres and has two towers. It has over 500 parking spaces. Buyers can visit the show flat from November 20 and choose the flats they like from November 27.

Petition demands rent controls Rent increases of up to 60 percent mean trouble for households, petitioners say Vítor Quintã

vitorquinta@macaubusinessdaily.com

group describing themselves as Macau residents are collecting names on an online petition seeking legal limits on increases in rents for housing. More than 400 people have so far signed the petition, which calls for Chief Executive Fernando Chui Sai On to limit rent increases to the annual rate of inflation, which was 5.69 percent in September. The group says a growing number of residents cannot afford to buy a home privately, are ineligible to buy subsidised housing and can therefore only rent accommodation. Last year’s census found that 24.5 percent of households rented their homes, 19 percent more than in 2001. The petition says “many families are starting to have difficulties in managing housing expenses” because of “rent increases of 60 percent or more when household incomes are not seeing a corresponding increase”.

The median monthly rent paid by households reached 5,390 patacas (US$675) last year, almost twice as much as a decade earlier. Last month, in announcing new measures to cool the property market, Secretary for Transport and Public Works Lau Si Io said the conditions for introducing rent controls were absent. The petitioners believe rent controls would be appropriate in Macau, having been used in dozens of countries, including those with free-market economies such as the United States. “There is an urgent need to end to the wild speculation currently seen in the Macau rental market,” the petition says. António Katchi, professor of public administration at the Macau Polytechnic Institute, has signed the petition. Mr Katchi said the government should also set limits on the absolute amounts of rent charged, not just rent increases.

Petitioners say rents for private housing are being driven up by wild speculation

He said the government should extend the minimum period of security of tenure in leases. Casimiro Pinto, a former candidate for the Legislative Assembly, has also

signed the petition. Mr Pinto warned that unless the housing market was controlled, “the next generation may have to move to neighbouring regions”.

November 6, 2012 business daily | 3

MACAU

Audit slams ‘wasteful’ continuing education The Commission of Audit calls for a ‘full and serious’ revision of the government’s continuing education subsidy scheme Vítor Quintã

vitorquinta@macaubusinessdaily.com

only two were written down. For the remaining criteria, guidelines were only “shared verbally”, making it difficult “to ensure a homogenous evaluation” the commission’s report says. The guidelines for five of the criteria “were not applied as defined”, resulting in “damage to the quality of the courses offered”. While a computer programme was used to assess courses and exams, an official of the bureau could tweak final scores “without registering reasons behind changes”. In the end, 594 courses “that should have been eliminated … were accepted,” the report says. There were also “obvious” discrepancies between approved courses and information disclosed to the public. One course for with an approved tuition fee of 560 patacas was advertised as costing 800 patacas. The bureau said it would inspect all institutions that had joined the programme during the first month of courses, but this promise was not kept “effectively and consistently”, the report says. For instance, 28 institutions were classified as ”trustworthy” despite never having been inspected.

‘Obvious’ breach

The Education and Youth Affairs Bureau is failing to supervise continuing education adequately, official auditors say

he government’s continuing education development programme has serious flaws that have resulted in hundreds of courses and exams being mistakenly approved, the Commission of Audit said yesterday. The commission has called for the Education and Youth Affairs Bureau to make “a full and serious revision” of the programme to ensure that public funding of some 2 billion patacas (US$250 million) is used “lawfully, impartially and effectively”. By the end of August the bureau had approved subsidies worth nearly 200 million patacas. However, more than 10 percent or 22 million patacas of the money spent was linked to flawed decisions, the audit report says. If all contentious courses and

exams are sold out, then the government faces a bill of more than 108.5 million patacas, it says. Management of the programme “suffers from flaws at several levels”, it says, starting with the approval of 402 courses or exams in 32 institutions that applied after the deadline. Three of the 32 institutions were not registered with the bureau, which means “they did not fulfil the requirements to file applications”, the report says.

Blurred criteria In response, the bureau said it had “exceptionally” reopened the registration process because it was late in processing requests that had arrived in time. But asked by the commission for

evidence, the bureau, under director Leong Lai, said all the documents had been destroyed. The bureau chose nine criteria for subsidising courses and exams, but

KEY POINTS Applications filed late Assessment spotty Inspections missed Abuses suspected

For courses that had already started, the institutions had a week after their conclusion to disclose attendance figures. But many institutions have yet to provide attendance figures, leaving 2,143 students waiting to get back money paid in advance. Twenty four other institutions altered the attendance figures of at least 60 students, allowing them to receive a subsidy. “Some institutions’ awareness of lawfulness is still weak, [resulting in them] tolerating obvious situations of infringement,” the report says. Another example was of inefficiency was that, even though all institutions had electronic readers for student identity cards, 3,330 applications were made through the alternative paper-based system. The commission believes these figures “hint at abuse” and hint at theft of personal data. For instance, the report mentions a student that apparently signed up for six courses in three different institutions at which he was also a professor. “This quite obvious irregularity went unnoticed,” the commission says.

Citic confirms talks with CTM’s shareholders But says there is yet no ‘definitive agreement’

itic Telecom International Holdings Ltd confirmed it is talking to other shareholders of CTM, Companhia de Telecomunicações de Macau over the proposed acquisition of a major stake in the company. But in a statement to the Hong Kong Stock Exchange yesterday, Citic did not reveal if it is negotiating to buy Portugal Telecom’s 28 percent stake in the city’s largest telecommunications operator. Citic Telecom, a subsidiary of mainland conglomerate Citic Pacific Ltd, said last month it was in talks with CTM’s major shareholder, London-listed Cable and Wireless Communications Plc (CWC), about buying the 51-percent stake owned by the British firm. Lisbon’s Diário Económico reported on Friday that Citic Telecom was also in talks about buying Portugal Telecom’s stake in CTM.

The Bloomberg news agency quoted unnamed sources as saying Citic Telecom could pay as much as US$750 million (6 billion patacas) for CWC’s stake. That deal values Portugal Telecom’s shares at more than US$410 million. If both deals go through, Citic Telecom will own 99 percent of CTM. Citic Telecom bought its 20 percent stake in CTM from its parent company for HK$140 million in February 2010. In yesterday’s statement, Citic Telecom said the negotiations are still ongoing. “In accordance with CTM’s Articles of Association, Citic Telecom has approached CTM’s other shareholders to discuss the proposed acquisition,” the company said in the filing. “No definitive agreement has been entered into with CWC or any other shareholders of CTM in relation to the

CTM is the city’s largest telco operator (Photo: Manuel Cardoso)

proposed acquisition as at the date of this announcement.” Citic Telecom’s shares were suspended from trading in Hong Kong

during yesterday’s morning session. The shares resume trading at 1pm, rising 1.12 percent to HK$1.8. T.A.

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business daily November 6, 2012

macau

AERL’s VIP rolling declines 31 pct in October Macau’s smaller casino junket investors finding the high roller downturn a challenge Michael Grimes

michael.grimes@macaubusinessdaily.com

acau casino junket investor Asia Entertainment & Resources Ltd experienced in October a 31 percent year-on-year decline in rolling chip volume – an indicator of performance in VIP room operations. The Nasdaq-listed company said in a filing to the New York Stock Exchange that the main reason for the performance decline was “the company’s self-directed tightening of credit to agents due to the slowing economy in China”. AERL’s Macau rolling chip volume for October was US$1.47 billion (11.7 billion patacas) compared to US$2.11 billion a year earlier. In October this year Macau VIP gross revenue market wide fell 1.1 percent year-on-year, indicating AERL significantly underperformed the market during that month. Caution is needed because GGR is not the same as rolling volume. But a fall in rolling chip volume does indicate a fall in gross revenue. High rollers in Macau and elsewhere bet such large volumes of money on baccarat that the house could suffer serious liquidity problems if only cash chips were used and players cashed out quickly after achieving several win-

Large scale

31 % Year-on-year fall in AERL rolling volume for Oct

Lower rolling – AERL

ning hands. As a result, VIP players are issued non-negotiable chips that can only be converted to cash chips when they win. Each non-negotiable chip has a ‘life expectancy’ of slightly fewer than two bets, i.e., the player will win the statistical equivalent of around half the bets.

Smaller junkets Analysts closely follow the performance of the VIP market – which annually contributes up to 70 percent of all Macau gross gaming revenue. AERL is a relatively small participant

in this sector. It has only four Macau VIP rooms at a time when the big junket investors – including Hong Kong-listed Neptune Group Ltd and privately held Suncity Group – are getting bigger via natural expansion of their player rosters and by buying the rights to profits of smaller rivals. Suncity runs 14 VIP baccarat rooms in Macau. Neptune in August became probably the biggest single consolidator of VIP baccarat operations in Macau when it announced to the Hong Kong Stock Exchange it was taking over three smaller junket operations that will boost its monthly

SJM expects rush to build smoking areas

T SJM’s executive director, Angela Leong On Kei

rolling numbers by 40 percent. The trend for consolidation in the VIP sector is in part a defensive one for the sector. During the current more challenging trading conditions, with a slowdown in gambling volumes among VIP players from mainland China, small junkets are looking for partners with access to more capital and a bigger pool of players. The larger junket investment companies are looking to build scale as a hedge against the hold volatility associated with the game of baccarat – the entertainment of choice for most Asian high rollers.

he setting up of indoor smoking areas in casinos will be “a little rushed” but casino operator SJM Holdings Ltd is confident it can finish the work in two months, the company’s executive director, Angela Leong On Kei, has said. Ms Leong told reporters on Sunday that her company was working out how to set up smoking areas in its 20 casinos that conform to the rules set by the government last week. Public broadcaster TDM quoted

Ms Leong as saying: “It will be quite a rush but we will try our best.” Grant Bowie, chief executive of MGM China Holdings Ltd, said last week his company was confident of meeting the government’s standards by the deadline set. Gabriel Hunterton, chief operating officer of StarWorld Hotel & Casino, says the operator is now making the needed adjustments to comply with the new rules. “We just received the regulation from the government last week and

“Small is not beautiful when it comes to junket operations,” says Ben Lee of IGamix Management & Consulting Ltd, a company that advises on the viability of casino projects and gaming industry investment in Asia. “The more capital you have access to in order to fund VIP rolling and the bigger your pool of players, the better. If you are a small junket, the loss of one or two players can make a big difference to your year-on-year results.” In September AERL went from a commission model to a revenue share model on VIP gambling. Revenue share deals theoretically offer a bigger cut to the junkets than fixed commission but carry more risk. If the house is unlucky in VIP baccarat in a particular quarter – i.e. holds below the statistical house advantage for the game – then there is a smaller amount of revenue for the casino to share with the junket. But under a revenue share regime there are also opportunities for the casinos to add volume incentives for the junkets. “If AERL has shifted to revenue share and is still not able to drive the business forward then that’s a concern,” says Ben Lee.

we are in the process of adhering to the laws,” Mr Hunterton told Radio Macau. Smoking will be banned in casinos from January 1, except in designated smoking areas, which are allowed to take up half the gaming floor. The government published last week rules for smoking areas. Smoking and no-smoking areas must be separated by 4-metre-wide buffer zones, air curtains, 2-metre-high walls or special ventilation systems. Future casinos must physically separate smoking and no-smoking areas. Ms Leong said SJM’s casinos tended to be housed in detached buildings and were smaller than other casinos. The cost of setting up smoking areas would depend on the design and the materials used, she said. T.L.

November 6, 2012 business daily | 5

MACAU Sai Van night market sparks more opposition Nearly third-fourths of the 275 residents surveyed by civil group Root Planning said they disagree with the Civic and Municipal Affairs Bureau’s decision to transform the Sai Van Lake area into a night market. Another association, Macau Public Policy Society, proposed the night market could be instead created at Praça de Ferreira Amaral, the square near Lisboa casino, to minimise impacts on local residents. The government said last week they noted the dissenting voices and would better explain the project to residents, including disclosing the environmental impact assessment report.

Sea traffic to contract ‘one third’ after bridge opens Tony Lai

tony.lai@macaubusinessdaily.com

Macau landfill site where the bridge will stand (Photo: Manuel Cardoso)

y 2020 the city’s sea passenger traffic is likely to decline by between a fifth and a third from current annual volumes due to competition from the Hong Kong-Zhuhai-Macau Bridge says a government official. Maritime Administration Director Susana Wong Soi Man made the comments yesterday in a seminar held in neighbouring Zhuhai on the mainland. It was to discuss maritime passenger transport in the Pearl River Delta region. She said operating pressures on the industry had been increasing due to “surges in fuel prices and shortages in human resources”. The Maritime Administration quoted Ms Wong’s comments in an official release. It added Macau’s passenger traffic by sea would in likelihood

Thank you! ...and see you in 2013!

decline by 15 million to 18 million visitors annually in the first five years after completion of the Hong KongZhuhai-Macau Bridge. These figures only account for 65 percent to 80 percent of the visitors taking marine transport in and out of Macau in 2011, the statement said. The bridge is expected to be open to traffic by the end of 2016 according to the website of Hong Kong’s Highways Department. Though the development of the marine industry would be “complicated” in the future, Ms Wong still sees room for development in the sector. Sea travel is still likely to be the most convenient transport means between Macau and Hong Kong, she suggested The director added that having multiple transport modes into Macau would help mitigate the bottlenecks sometimes experienced at existing transport terminals during holidays and other peak times. As part of that strategy, the government aims to turn the Taipa Ferry Terminal at Pac On into a transportation hub. The government will continue to co-operate with transport operators on a range of issues including regular reviews of routes, she said.

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business daily November 6, 2012

macau

Builders flex economic muscle There were more big construction projects and workers last year, although not as many as in the industry’s heyday in 2008 Vítor Quintã

vitorquinta@macaubusinessdaily.com

he construction industry’s contribution to the economy increased by more than a quarter last year because of big private housing and public works projects, official figures show. The industry’s gross value added grew by 26.4 percent to 4.8 billion patacas (US$606.3 million), according to the results of a survey released by the Statistics and Census Service yesterday. The total is far below the record of 11.6 billion patacas achieved in 2008. But it means construction business expanded last year faster than the economy as a whole, which grew by 20.7 percent. However, construction accounted for less than 1.7 percent of gross domestic product, which reached 292.1 billion patacas. The number of construction projects fell to 1,502 last year, 255 fewer than the year before, mainly because there were 349 fewer projects that availed of a government subsidy for building maintenance. Despite this, more big private housing projects drove up the combined value of construction work by 10.4 percent to 24.6 billion patacas. The combined value of private construction work rose by 7.5 percent to 19.2 billion patacas. The main reason was a surge of 47.4 percent in the combined value of housing construction work to 4.2 billion patacas. The number of housing projects contractors undertook rose by 16 to 122.

Hiring spree The combined value of construction work on hotels, tourist and gaming facilities declined by

The construction industry employed almost 6 percent of the labour force last year (Photo: Manuel Cardoso)

1.9 percent to 13.1 billion patacas, mainly because the Galaxy Macau resort is now finished. The number of public works projects increasing by 31 to 493 and their value rose by 22 percent to 5.4 billion patacas. Most of this rise was due to an increase of 32.4 percent in the value of work on public housing to almost 2 billion patacas. The value of construction work on new infrastructure, including the Taipa ferry terminal and land preparation, rose by 29.8 percent to 2.2 billion patacas.

The increase in business expanded the industry. The number of construction companies rose by 142 to 1,320. However, 928 of the companies are smaller enterprises handling projects worth less than 5 million patacas. The number of workers employed by the industry jumped by nearly onethird to more than 20,000, almost 6 percent of the working population. Labour costs increased by 29.1 percent to 3.6 billion patacas, of which wages accounted for 2.9 billion patacas and payments to subcontractors the rest.

MOP 4.8 bln

Gross value added of the construction industry in 2011

Lusophone interest grows in Chinese medicine

rowing interest in traditional Chinese medicine in Portuguese-speaking countries resulted this week in a delegation of physicians arriving for an 11-day visit to Macau and mainland China. The focus of the trip was more on networking than investment, members said. “What concerns us more than investment is seeing better knowl-

edge of Chinese traditional medical training taken back to Portugal,” Frederico Carvalho, director of training and qualification at the private Institute of Traditional Medicine, said yesterday. “Another main challenge we currently face is complying with a new legal framework regulating the traditional medical sector,” he said. The visit by the Lusophone

delegation, which began yesterday, would prove essential in boosting cooperation in traditional Chinese medicine research, said Mr Carvalho. However, Angolan and Portuguese members said it was unlikely that the visit, organised by the Forum for Economic and Trade Cooperation Between China and Portuguesespeaking Countries, would result in immediate trade or investment.

Apart from visiting the hospital of the National Sun Yat-sen University in Guangdong, the delegation was also taken to the Guangdong-Macau Traditional Chinese Medicine Technology Industrial Park on Hengqin Island. The first phase of 1.2 billion yuan (US$190 million) park will be ready this year, said Echo Chan Keng Hong, the head of the park. S.L.

November 6, 2012 business daily | 7

MACAU

Dealers rue ban on bird’s nest

comment

The mainland’s ban on importing swallow’s nest is hurting dealers in Macau

Who is right? What is wrong?

Stephanie Lai

sw.lai@macaubusinessdaily.com

Rose N. Lai

ales of swallow’s nest, a favourite holiday purchase for tourists from mainland China and the crucial ingredient of bird’s nest soup, have plummeted since the mainland banned imports, shops in the NAPE district have told Business Daily. The ban came into effect on November 1. Bringing swallow’s nest into the mainland is now punishable with a fine of up to 5,000 yuan (US$793), although canned swallow’s nest is still permitted. The ban has severely hurt the business of swallow’s nest dealers in NAPE, a district with many hotels, pawnshops and casinos. Grupo In Vo Chong Cia Lda, which has three branches here, said sales had dropped by 90 percent since the ban came into effect. “We used to sell 100 to 200 catties of swallow’s nests per month,” said Vong Bin Ieng, general manager of In Vo Chong. One catty is 600 grams. “But now sales have dropped by 90 percent, and if the situation continues, we’ll have to switch our sales focus to other preserved seafood and ginseng,” she said. Dealers say the popular white swallow’s nests, imported mainly from Indone-

Associate Professor of Finance, University of Macau

sia, Thailand or Malaysia, generally cost 5,000 patacas to 10,000 patacas per catty.

Going cheep “Customers from the mainland usually consume several catties, and they represent a huge portion of our customer base,” Ms Vong said.

Sales os swallow’s nest have dropped by 90 percent, and if the situation continues, we’ll have to switch our sales focus to other preserved seafood and ginseng Vong Bin Ieng, general manager, In Vo Chong

“Residents buy in much smaller quantities, in taels instead of the big catties,” she said. One tael is 37.8 grams. Some swallow’s nest dealers have tried offering customers discounts of 35 percent to 40 percent. In Vo Chong, a member of the Traders Association of Swallow’s Nest of Hong Kong and Macau, is uncertain whether the ban will ever be relaxed. An amendment of the mainland quarantine rules made in February bans imports of swallow’s nest and Chinese traditional medicines made from animals. The mainland authorities began strictly enforcing the rules only this month, dealers in swallow’s nest say. The import of swallow’s nest is duty-free in Macau. In the mainland the composite tariff on swallow’s nest used to be over 40 percent. The ban on imports of swallow’s nest is meant to prevent the spread of bird flu and curb smuggling. In recent years only about 1 tonne of swallow’s nest was legally imported into the mainland each year. But over 350 tonnes of swallow’s nest was sold there each year, suggesting that much of it was supplied by parallel traders or smugglers.

am a believer in capitalism. Take Greece as an example. It is in trouble and had to be rescued by the European Union. In return, it has to implement austerity measures to save itself by reducing government spending and hence the government deficit. A consequence is the unsettling demonstrations by Greek people. Human beings are self-centred and selfish in nature, just to a greater or lesser degree. When we were all poor, we hoped to share because we did not have much to lose. However, sharing a person’s wealth among people that may not have contributed as much to society, while appearing fair to the beneficiaries, would be unfair to the person in question. Coming back to Macau, with a phenomenal unemployment rate that seemingly cannot be lower, and a hospitality industry that is still expanding, complaints about the increasing number of expatriates just do not sound logical. Another thing that does not sound right is the motorcycle lane on the Sai Wan bridge. A few fatal accidents made the government reserve one of the three lanes on the bridge exclusively for motorcycles. The result is that there are still not many motorcycles in that lane. Some motorcyclists say the entrance is too far away. Cars are crammed into two lanes, worse off if they are stuck behind two cars travelling side by side at 60 km per hour, one occupying each lane (the speed limit is 80 km/h). Have people ever thought that if motorcyclists rode without weaving in between cars, and if car and truck drivers gave motorcycles enough space, the special lane might not be necessary?

Culture of complaint

Swallow’s nest sales have dropped by as much as 90 percent this month (Photo: Manuel Cardoso)

So what is wrong? I cannot recall this much complaint and criticism about the government before Macau became a special administrative region. Was it better under Portuguese administration? I doubt it. I cannot say the present government is excellent. Yet in the recent case of Sin Fong Garden the government reacted relatively promptly, making sure residents were given adequate temporary shelter and that they had enough money. The government’s swift aid, instead of drawing praise, stirred up another group of people, from Kui Fu Garden, who requested similar treatment. Has what a Hong Kong newspaper calls the Hong Kong culture of “expertise in filing complaints” spread to Macau? Have folk in Macau ever tried to appreciate what the government has done? One reason for more and louder voices is perhaps the gap in wealth. A recent study by the Monetary Authority of Macau found that gross domestic product per head last year was US$66,000 (526,877 patacas). This puts us among the top ten highly developed economies. But do Macau people enjoy the prosperity? Yes, to a certain extent. For instance, we have all had extra money from the government every year for the past few years. We all have 10,000 patacas in our Private Provident Fund accounts that the government has given us. And the average income has steadily increased. However, are we all in good shape? Not necessarily.

In my back yard? As most people in Macau are Chinese, they like to make themselves feel secure by owning a home. Given the ridiculously high price of housing, not many people are really happy. Has the government done something? Yes. Enough? Not sure. The time that the government takes to make decisions gives the impression that it is indecisive. Perhaps this impression is correct. For instance, a company that intended to invest in a three-star hotel recently decided to sell the premises because it takes too long to get government approval to run a hotel. This is pathetic. Another illustration of slow decisionmaking is the stack of applications for building permits. Nevertheless, Macau has such a small economy that its problems are always intertwined and it is very sensitive to external shocks, so it is unfair to criticise the government when it does not deserve it. Sometimes we should be sympathetic to the leaders of the government. Making policy is complicated and policies require careful scrutiny before being pursued. On the other side of the spectrum, whenever new policies that are unfavourable to certain parties are introduced, the government is criticised. For instance, people agree that more incinerators should be built – as long as they are not built next to where they live. Or people agree that the number of bus stops should be cut because too many bus stops cause traffic jams – as long as the ones in front of their own buildings are not removed. Luckily, the government acted fast this time, taking the initiative in levying extra stamp duty on purchases of property by outsiders. While estate agents were complaining that this would be a bad move, and pointing out that even Hong Kong had not taken such a measure, Hong Kong suddenly decided that it would take such a measure immediately.

Panacea unavailable So Macau is not alone with the problems of high prices for housing due to limited supply, and of an economy sensitive to external shocks. These are problems that even Joseph Stiglitz, the winner of the Nobel Prize for Economics in 2001, or Christine Lagarde, the managing director of the International Monetary Fund, have no panacea for. I am not saying that all that the government has done is right – far from it. Yet I am sure it must have handled some issues right. What I think the government should do is be more decisive and shorten the time it spends on analysis. Trying to obtain comments from the public and their agreement is good. But doing so just to make everyone happy, or to make it appear that everyone agrees, is no help, especially if the government is pondering a crucial decision. Think about how much time the government wastes on explaining (or defending) its decisions instead of spending it on doing what it has to do and solving problems. Essentially, the government needs the support of the people and their confidence to build a harmonious society. It all reminds me of the words of John Kennedy when he became president of the United States on January 20, 1961: “Ask not what your country can do for you. Ask what you can do for your country”.

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business daily November 6, 2012

GREATER CHINA

Foreign banks hope new leaders level playin Financial regulation seen as favourable to local banks “Every year they do relax things a bit more. They give you one or two more products every year, but not all in one go,” he added.

Funding shortage

Beijing Financial Street

or all the hopes that China’s forthcoming leadership change will herald a new wave of market reforms, foreign bankers don’t expect to get the level playing field they crave any time soon. Trends are positive, but progress can be frustratingly slow. “My outlook is basically optimistic, particularly in the medium term. The near term is always uncertain,” Christian Murck, president of the American Chamber of Commerce in China and independent director of J.P. Morgan Chase (China) Ltd, told Reuters. A lighter regulatory touch on bond writing, derivatives and funding channels are seen as crucial to foreign

banks’ growth in China. But the best they can hope for in the short term is that the new faces in the Communist Party’s standing committee adopt a broadly pro-reform stance that gradually works through to front-line regulators, whose discretion on licensing and product approval can mean the difference between feast and famine. “The attitudes that they take towards whether market reform needs to be accelerated again is absolutely crucial,” Mr Murck said. Foreign banks in China had their best year ever in 2011. After-tax profits grew 115 percent to 16.7 billion yuan (US$2.68 billion) in 2011,

according to a survey of 41 banks by accounting firm PricewaterhouseCoopers (PWC). Onerous regulation and unequal treatment compared to domestic rivals still restrain their growth. Foreign banks’ assets rose by 24 percent last year, but their share of China’s total banking assets remained under 2 percent. “Officials would like to say it’s a level playing field for the foreign banks, but in fact that’s still not exactly the case,” said a senior financial services professional with experience working with foreign banks in China, who requested anonymity for fear of offending the Chinese authorities.

Foreign banks consistently struggle to fund their lending in China. They are subject to the same 75 percent loan-to-deposit ratio that governs their local counterparts. But attracting deposits is a much greater challenge due to the slow and difficult process of receiving approvals to open new branches. “Our branch network is nowhere near complete. We need to expand further to meet the demands of our clients,” said an Asian banker, who declined to be identified because he is not authorised to speak to media. “It’s like, how many years do we need to wait to open a branch here?” Consequently, most foreign banks rely on their offshore head offices for a large portion of their funding. But China’s tight capital controls mean that increases in capital, via debt or equity, require regulatory approval. China expanded the aggregate long-term debt quota for foreign banks earlier this year, but banks still want more. The State Administration of Foreign Exchange has cut shortterm debt quotas in recent years, according to the European Chamber of Commerce’s 2012 position paper on financial services. Chinese authorities want foreign banks to rely on local sources of funding. But the chamber noted that China’s onshore forex funding markets are still immature. A foreign bank

Two generals named to central military commission Appointments expected as part of the transition of power

he Chinese Communist Party Central Committee named two generals as vice chairmen of the Central Military Commission, marking the beginning of two weeks of appointments as part of a once-adecade leadership transition. The committee promoted Xu Qiliang and Fan Changlong to the commission that controls China’s armed forces, the official Xinhua News Agency reported yesterday. Mr Xu and Mr Fan “are career professional soldiers,” said Steve Tsang, director of the China Policy Institute at the University of Nottingham in England. “Mr Fan is an infantry man who had held important combat commands and a professional soldier. Mr Xu is a career Air Force officer and commander of the Air Force.” China’s Communist Party, not the government, oversees the People’s Liberation Army. Controlling the military – whose 670 billion yuan (US$107.3 billion) budget this year is

exceeded only by that of the U.S. – is seen as central to the party’s ability to maintain power. Vice President Xi Jinping is also a vice chairman of the military commission. President Hu Jintao, who is set to hand over his leadership of the party to Mr Xi at a party congress that begins November 8, is the commission’s chairman. Fan is commander of the PLA’s Jinan Military Area Command, according to the government’s website www.gov.cn. Mr Xu is commander of the PLA’s air force. Mr Fan is 65 and Mr Xu is 62, according to biographical details provided by Xinhua. Huang Jing, a professor of political science at National University of Singapore, said Xu Qiliang “is professional and enjoys great respect from PLA officers”. Mr Xu’s advancement may be a sign that the PLA is moving to more “joint” operations among the army, navy and air force because most

A change of the guard has started

past vice chairmen have been army officers, said Taylor Fravel, a political science professor specialising in China at the Massachusetts Institute of Technology. Mr Fan was named a vice chairman after not having served on the commission. He is “a real profes-

sional, with extensive command experience,” Mr Fravel said. Mr Xu was a member of the commission prior to yesterday’s announcement. “Their promotion seems reasonable to me and do not indicate something particularly untoward,” Mr Tsang said.

November 6, 2012 business daily | 9

GREATER CHINA

ng field

HK used home sales drop to 9-month low

whose offshore parent could borrow dollars at the Libor rate may pay 30-40 basis points more to borrow dollars onshore.

Tax on non-locals seen as driving sales down

Waiting for green lights Gaining access to the lucrative bond underwriting business ranks at the top of foreign banks’ wish list, according to PWC’s survey. China’s bond market has nearly doubled in size since the end of 2009, with total bonds outstanding reaching 24.1 trillion yuan at the end of September. But as of mid-2011, only three foreign banks – HSBC, Standard Chartered, and JP Morgan – were approved to underwrite Chinese government bonds, which make up the largest share of the market. That compares to 57 domestic banks. New rules brought in last year established a process to allow foreign firms to underwrite commercial paper and medium-term notes in the corporate bond market – the fastest growing segment of China’s bond market. But so far only HSBC has been approved, though it is not permitted to serve as lead underwriter. Foreign banks would also like to leverage their expertise in derivatives, a strictly regulated area, to sell structured products in China aimed at corporate treasurers or wealthy individuals. These investment products use derivatives like options or swaps to connect the value of the product to movements in interest rates, currencies, commodities, or equities. But approvals to roll out such products can often take months or years. Reuters

Another round of measures to cool down the market

he number of property transactions recorded at Hong Kong’s 10 largest estates on the weekend fell to the lowest level since January as a tax on non-local buyers imposed last month curbs investors’ interest. Ten sales were registered, from 12 a week earlier, Centaline Property Agency Ltd said in a report yesterday. The government imposed a 15 percent tax on property purchases by overseas and corporate buyers on October 26 in its harshest measures yet to control home prices. Hong Kong Chief Executive Leung Chun Ying has pledged to rein in the real estate market to stem a three-year surge that has almost doubled prices. “Many potential sellers are choosing to hold on to their properties rather than selling them at cut prices,” said Vincent Cheung, an executive director at realtor Midland Holdings Ltd. “At the same time, buyers are looking for

bargains and that’s why we’ll be seeing low transaction figures for a while.” The tax to deter capital inflows and reduce the risk of a bubble in the world’s most expensive housing market marks the third set of curbs since August. Mr Leung has tightened mortgage requirements and boosted the supply of land for developers as the boom triggered protests over a widening wealth gap. A Midland survey conducted after the new measures were introduced showed 62 percent of 229 mainland Chinese asked said they will hold off from buying properties in Hong Kong for the next six months, while 3 percent said they won’t buy in the city anymore, the company said in a November 1 statement. Monthly sales at the 10 largest estates rose 7.6 percent in October, Centaline, Hong Kong’s biggest closely held realtor, said in a second e-mailed report. Turnover will probably slow in November and December because of the new tax, the report said. Government officials, including Financial Secretary John Tsang, have said in the past week the government will consider other measures to curb prices if necessary. Mr Leung, who took over as the city’s leader in July, has pledged to increase housing supply in his battle to curb a growing asset bubble. The former surveyor said in September that there will be as many as 65,000 new private units available in the next three to four years. That’s at least 30 percent higher than the average under Donald Tsang, his predecessor, according to estimates by Nicole Wong, an analyst at CLSA Asia-Pacific Markets. Bloomberg

Party to probe Wen family wealth

Foreign maids double in ageing Taiwan The number of foreign maids employed in Taiwan has more than doubled since 2000 as the island’s population ages rapidly, a labour affairs official said Sunday. Maids and nannies, mainly from Southeast Asia, working on Taiwan hit more than 200,800 in September, compared with 106,331 registered in December 2000, according to statistics compiled by the Council of Labour Affairs. “The domestic demand for maids has been on the rise while Taiwan is gradually becoming an ageing society,” Council representative Huang Chiu-kui said. People aged 65 and over account for 10.74 percent of the 23 million population, above the seven percent level at which a society is defined as “ageing” by the World Health Organisation, according to the interior ministry. A record high 442,500 foreign workers were being employed in Taiwan as of September, largely from Indonesia, Vietnam, the Philippines and Thailand.

First U.S. visa free Taiwanese visitors Six Taiwanese tourists arrived in New York on Thursday as the first to be allowed to visit the United States without visas, officials said. Taiwan is the first territory of any kind which does not have formal diplomatic relations with the United States to get visa waiver status, said its de facto ambassador in New York, Andrew Kao. The visa breakthrough is also a diplomatic victory for the Taipei government against China, which vigorously lobbies to stop international recognition of its government. “This is indicative of the solid relationship between Taiwan and the United States, as well as the concrete accomplishment of Taiwan’s viable diplomacy,” said Mr Kao, director general of the Taipei Economic and Cultural Office in New York. He estimated that the visa waiver will increase the number of Taiwanese tourists to the United States from 400,000 to 600,000 a year. China Airlines said that booking had increased significantly since the visa waiver was announced.

Prime Minister asked for the investigation

The two generals may replace Guo Boxiong and Xu Caihou, both members of the ruling Politburo. But they weren’t mentioned in the report announcing the appointments, and they are still listed on the military’s website as vice chairmen of the commission. Bloomberg

hina’s ruling Communist Party has launched an internal inquiry into allegations made by The New York Times that the family of Premier Wen Jiabao accumulated at least US$2.7 billion in “hidden riches”, the South China Morning Post reported yesterday. Mr Wen himself asked for the inquiry in a letter to the Politburo Standing Committee – the party’s top decision-making body of which he is also a member – in an apparent move to clear his name, the Hong Kong daily said, citing unnamed sources. Lawyers for the Wen family have rejected The New York Times’ October 26 report, which says corporate and regulatory records show Mr Wen’s mother, siblings and children amassed most of their wealth since he became Vice Premier in 1998. “The Standing Committee had agreed to his (Mr Wen’s) request,” the South China Morning Post said, quoting the sources. It cited some analysts as saying that Mr Wen’s request for a probe showed

the premier was keen to use it as a chance to push forward a long-stalled “sunshine law”, which would require a public declaration of family assets by senior leaders. However, Professor He Weifang, a law expert at Peking University, told the South China Morning Post that he doubted the party’s senior leadership would go that far. “Even if Wen wants to disclose his assets, I don’t think other senior leaders, who may also have ‘hidden wealth’ of their own, will allow him to go ahead, considering the explosive social repercussions,” Mr He said. Reuters

China’s money rates flat China’s money rates were little changed yesterday as banks sent off mandated payments to meet reserve ratios, but market players said the payments did not impact short-term liquidity in the system. Last week, the People’s Bank of China conducted a net injection of 379 billion yuan (US$60.74 billion) into the banking system. Traders said rates may fall further by the middle of next week, when banks complete their reserve payments. “The money situation is still good and the impact of the reserve requirement ratio payments is not large,” said a dealer at a Chinese commercial bank in Shanghai. “We are paying more attention on the amounts of central bank’s reverse repos.” This week, maturing bills, repos, and reverse repos will drain a net 523 billion yuan from the banking system, which will be offset by any injections conducted by the central bank this week.

10 |

business daily November 6, 2012

ASIA Japan delays decision on nuclear plant Japan delayed a decision on the future of the Ohi nuclear plant as seismologists under the Nuclear Regulation Authority conflicted over whether an earthquake fault line under the station is active or not. Two reactors at the plant are the only ones running in the country. The other 48 are offline for safety checks following last year’s Fukushima nuclear disaster. The team of five studying the fault line met yesterday and will meet again tomorrow to further discuss with plant operator Kansai Electric Power Co., said Kunihiko Shimazaki, a commissioner on the NRA, Japan’s newly formed nuclear regulator.

India’s services growth weakens Economy grew 5.5 percent in the quarter to June

ndia’s services sector grew at its slowest pace in six months during October as weakness in the United States and Europe hurt orders and forced firms to hire fewer workers, a survey showed on yesterday, suggesting the worst of the economic slump is not over yet. Services make up nearly 60 percent of India’s economic output and any sign of deceleration darkens the outlook for Asia’s third-largest economy, as the sector has been the lone bright spot through the downturn. The HSBC Purchasing Managers’ Index for the services sector, based on a survey of around 400 companies, fell to 53.8 in October from September’s seven-month high of 55.8. Despite the two point month-onmonth drop in the headline services reading, the index has, since November last year, held above the 50 mark that separates growth from contraction. “The services sector slowed in October, but remained firmly in expansionary territory. Growth in new orders eased slightly and firms scaled back the pace of hiring,” said Leif Eskesen, an economist at HSBC. Recession in parts of the euro zone and stuttering growth in the United States have dampened demand for Indian services, forcing them to reduce the pace of hiring, the survey found. The employment sub-index fell to a five-month low but held above 50. India’s economy grew 5.5 percent in the quarter to June, near a threeyear low, held back by a weakening

Services make up nearly 60 percent of the country’s economic output

external sector policy gridlock at home and poor government finances. Indian Prime Minister Manmohan Singh and the Congress party’s top leadership used a mass rally in the capital to unite behind steps to further open the economy to foreign investment ahead of a crucial parliamentary session. “We have to embrace change,” Mr Singh told the open-air gathering of tens of thousands of support-

ers in central New Delhi on Sunday that was opened by Rahul Gandhi, scion of India’s leading political dynasty, bolstering political analysts’ expectations he may soon take control of the party. “We have to leave the easy route and choose the difficult one because this is needed for the country’s future,” Mr Singh said. Over the past three months, the government has sought to revive

momentum with a series of reforms including raising the price of subsidised diesel and opening up the country’s vast supermarket sector to foreign investment as well as aviation, insurance and pension sectors. Those modest steps have revived investor interest in India and the survey found that the business expectations’ sub-index jumped to 68.3 in October from 67.2 in the previous month, reflecting greater optimism.

Indonesia growth slows as commodity exports wane But data show economy still growing over 6 percent

ndonesia’s economic growth held above 6 percent for an eighth quarter as domestic consumption and rising investment countered an export slump, reducing the need for the central bank to cut interest rates. The country’s economy grew 6.17 percent in the third quarter from a year earlier, in line with forecasts. A slide in exports saw the annual rate of gross domestic product growth in the G20 economy ease from 6.4 percent in the second quarter, remaining strong by global standards but at the slackest pace nonetheless since the third quarter of 2010. “Q3 GDP matched the consensus, signalling some moderation in the momentum, though nothing to be alarmed about as Indonesia is still amongst the fastest growing economies in the region,” said Radhika Rao, an economist at Forecast in Singapore.

“The subdued exports performance could emerge as the main soft spot, with the slowdown in imports in recent months to stoke concerns over the sustainability of a strong investments cycle.” Statistics bureau official Suhariyanto said the trade situation meant it would be difficult to reach a government forecast for steady full year growth of 6.5 percent, and saw 6.2-6.3 percent as likely – in line with economists’ views. Weak global demand for Indonesia’s commodities are dragging down its exports, leading to trade and current account deficits that have hurt the rupiah, down nearly 6 percent this year making the currency Asia’s worst performer. Imports also started falling in the third quarter, the first sign of weakness in the buoyant domestic demand that has been protecting the world’s

fourth most populous nation from a harder downturn.

Commodities downturn Over two-thirds of Indonesia’s exports are commodities such as palm oil and coal, which have been hurt by weaker Chinese demand. Corporate profit growth has slowed, with the country’s biggest listed firm PT Astra International posting just a 2.7 percent rise in third quarter income as its coal, palm and heavy equipment businesses was hit by the commodities downturn. New government rules curbing raw mineral exports also hurt shipments of metal ores such as nickel and bauxite, and the mining sector has been rattled by disputes between local and foreign investors, rising wages and community protests. The mining sector contracted slightly in the third quarter.

“Any slowdown in China will affect directly our major export commodities,” said Bambang Brodjondegoro, a finance ministry official, speaking on the sidelines of a G20 meeting in Mexico. “During this turbulence we can maintain our growth by domestic consumption and investment.” Investment does not seem to have been significantly affected by the global headwinds so far, with foreign direct investment rising 22 percent to a record US$5.9 billion in the quarter as

November 6, 2012 business daily | 11

ASIA Park pledges engagement with Pyongyang South Korea’s presidential frontrunner Park Geun-hye proposed yesterday to open liaison offices in the capitals of the rival Koreas in a sweeping policy statement that aimed to revive ties between the two countries. Ms Park, who represents the conservative New Frontier Party and is seeking to become the country’s first woman president, said she was willing to meet North Korea’s leader but said Pyongyang must renew its commitment to end its nuclear programme. Ms Park leads her two major liberal opponents by double digits in a race for a December 19 vote to pick South Korea’s president.

The services sector slowed in October, but remained firmly in expansionary territory

Australia retail rises, trade gap narrows Data mix leaves market divided on rate call

Leif Eskesen, economist at HSBC

A$1.46 billion

Australia’s trade deficit in September

The survey also showed that prices of services rose at a faster pace in October, in line with the country’s persistently high inflation rate that has left the central bank with little room to ease monetary policy to revive faltering growth. Surging fuel prices and labour costs pushed input and output prices sub-indexes to four- and three-month highs respectively, the survey found. “Inflation readings continued to tick up, with higher raw material costs and solid demand keeping inflation pressures firm,” Mr Eskesen said. “The latter explains why the Reserve Bank of India remains hesitant about easing monetary policy.” The central bank left interest rates on hold at its October 30 meeting as inflation accelerated to a 10-month high of 7.8 percent in September from a year earlier, despite calls from the government and businesses for a cut to help the slowing economy. Reuters

Retail sales in September grew 22 percent year-on-year

The central bank cut the key rate last month to 3.25 percent

ustralia’s retail sales advanced more than economists forecast in September and the nation’s trade deficit narrowed by the most in five months, sending the local currency higher ahead of today’s central bank meeting. Sales climbed 0.5 percent to A$21.6 billion (US$22.4 billion) from August, when they rose a revised 0.3 percent, the Bureau of Statistics said in Sydney yesterday. That exceeded the median forecast for a 0.4 percent gain. The trade shortfall shrank by A$420 million to A$1.46 billion in September, also more than forecasts. Consumer spending has been fuelled by interest-rate reductions since November 2011 as the Reserve Bank of Australia tries to buttress demand outside of a resource boom that may crest next year. Central bank Governor Glenn Stevens cut the key rate by a quarter percentage point last month to 3.25 percent, and traders are pricing in a 54 percent chance he will lower borrowing costs again today.

“The RBA has eased somewhat pre-emptively,” said Michael Turner, an economist at RBC Capital Markets Ltd in Sydney. “Whether the board sees fit to move again as soon as tomorrow [today] has become an increasingly uncertain prospect given the stabilisation in data in China and the U.S.” But the mix data left markets divided on whether interest rates will be cut this week. “For the RBA, it looks to be a 50-50 call, the signs that earlier rate cuts are starting to have some impact is some sort of marginal negative against another move,” said Michael Blythe, chief economist at Commonwealth Bank. “We’re in the rate-cut camp but these numbers suggest that whatever happens tomorrow we are near the low point on interest rates in this cycle.”

Cautious spending The retail report showed spending on household goods gained 1.2 percent, while consumers spent

0.6 percent more on food and 0.8 percent more on a category labelled other retailing. They spent 0.6 less on clothing, footwear and personal accessories and cut department-store purchases by 0.5 percent, it showed. Retail sales, adjusted to remove inflation, declined 0.1 percent in the three months through September from the previous quarter. Economists had forecast a 0.2 percent decline. The trade report showed exports fell 1 percent to A$24.2 billion, led by an 11 percent drop in metal ores and minerals. Imports declined 2 percent to A$25.6 billion on an 11 percent drop in machinery and industrial equipment and a 34 percent fall in a category that includes civil aircraft, the report showed. Australian employers hired almost three times the number of workers economists forecast in September, a government report showed on October 11, even as the unemployment rate jumped to 5.4 percent, the highest since April 2010, from 5.1 percent. A separate private report yesterday showed Australia’s services industry contracted in October for a ninth straight month as the sustained strength of the nation’s currency and cautious consumers discouraged spending. Australian households are building a financial cushion by repaying mortgages faster and saving more, the RBA said in its September 25 financial stability review. “Most households appear well placed to meet their debt obligations,” the central bank said in the semi-annual report. Bloomberg/Reuters

Sharp may seek govt bailout Company drops ‘material doubt’ from statement

firms eye the country’s natural resource wealth and growing consumer market. Indicators for domestic demand, which makes up around 55 percent of the economy, mostly remain strong. Consumer confidence rose in September because of optimism on jobs and pay, while data released earlier yesterday showed retail sales grew 22 percent year-on-year the same month, the fastest growth this year and accelerating from a revised 10.6 percent increase in August. Reuters

harpCorp.mayturntothelastresort ofJapanesecompaniesfacingpotential bankruptcy, the government. With 200 billion yen (US$2.5 billion) of convertible bonds maturing in 2013, Sharp may have to ask the state Enterprise Turnaround Initiative Corp. or Innovation Network Corp. of Japan for money, said Fumiaki Sato, cofounder of Sangyo Sosei Advisory Inc., a turnaround advisory firm in Tokyo. Sharp has failed to win a planned 67 billion-yen equity investment from billionaire Terry Gou’s Foxconn Technology Group. Sharp haemorrhaged 103 billion

yen in cash from operations in the first half of the year as Japan’s electronics industry struggles with dwindling demand and competition from Samsung Electronics Co. A bailout may follow the precedent set by the government rescue of Japan Airlines Corp. two years ago that wiped out shareholders while keeping planes in the air. “Japan has no other option but to help companies that need a bailout, given the possible impact to the economy,” said Yuuki Sakurai, president of Fukoku Capital Management Inc. “If Sharp fails, there will be a lot of job losses, including those at suppliers, and

the impact of that can’t be ignored.” Sharp revised the English version of its quarterly earnings statement to remove the words “material doubt” in describing its status as an assumed going concern. “There exist conditions which might raise uncertainties about Sharp being an assumed going concern,” the Osakabased company said in an e-mailed statement yesterday, altering its translation of the financial statement for the quarter ended September 30. Sharp is trying to describe its status “more precisely,” it said in the statement. Bloomberg

12 |

business daily November 6, 2012

MARKETS Hang SENG INDEX NAME

PRICE

DAY %

VOLUME

AIA GROUP LTD

31.2

-1.886792

20196915

ALUMINUM CORP-H

3.47

0.2890173

8584407

BANK OF CHINA-H

3.22

-0.9230769

224886432

BANK OF COMMUN-H

NAME

PRICE

DAY %

VOLUME

CHINA UNICOM HON

12.24

-1.607717

46772310

CITIC PACIFIC

10.14

-0.1968504

66.1 -0.07558579

CLP HLDGS LTD

NAME

PRICE

DAY %

VOLUME

POWER ASSETS HOL

66.9

0.4504505

2117504

9257965

SANDS CHINA LTD

31.6

-0.9404389

9877759

2210609

SINO LAND CO

13.54

-0.1474926

6331589

5.63

-0.3539823

22556118

CNOOC LTD

16.28

-0.3671971

22543080

SUN HUNG KAI PRO

110.6

0.4541326

3229189

BANK EAST ASIA

29.45

0.6837607

1209171

COSCO PAC LTD

11.38

-5.008347

10362813

SWIRE PACIFIC-A

93.25

-0.1071237

2131618

BELLE INTERNATIO

14.78

-0.8053691

7268905

ESPRIT HLDGS

10.88

-0.3663004

8987947

TENCENT HOLDINGS

275.6

-0.9345794

2546054

-0.8264463

7223377

HANG LUNG PROPER

27.5

-1.256732

5122855

TINGYI HLDG CO

22.5

-2.386117

7254637

CATHAY PAC AIR

14.26

-1.925722

1724474

HANG SENG BK

119

0.08410429

560082

WANT WANT CHINA

11.22

-1.578947

20503485

CHEUNG KONG

115.6

-0.1727116

2731196

WHARF HLDG

54.75

1.671309

3899643

8.07

0.6234414

38582207

BOC HONG KONG HO

CHINA COAL ENE-H CHINA CONST BA-H

HENDERSON LAND D HENGAN INTL

0.8249313

2904647

70.55

-0.3531073

2314822

20.6

0.4878049

3787498

132.8

0.9885932

5739195 13221591

MOVERS

5.9

-0.6734007

174429520

CHINA LIFE INS-H

23.95

0.4192872

26165495

CHINA MERCHANT

25.9

-1.145038

1153688

HSBC HLDGS PLC

77.75

-0.2565747

CHINA MOBILE

87.25

-0.6264237

14237908

HUTCHISON WHAMPO

79.65

0.3780718

9566001

CHINA OVERSEAS

21.65

0.4640371

21377370

IND & COMM BK-H

5.18

-1.333333

198816779

CHINA PETROLEU-H

8.28

-2.358491

66619175

LI & FUNG LTD

13.32

1.062215

17806608

CHINA RES ENTERP

1.123596

5857329

MTR CORP

30.05

-0.331675

2325136

18.5

-0.5376344

6194532

NEW WORLD DEV

12.46

0.9724473

15084090

52W (H) 21847.69922

16.84

-0.118624

2189024

PETROCHINA CO-H

10.54

-1.125704

59162213

(L) 17613.19922

PING AN INSURA-H

62.9

0.64

8727227

PRICE

DAY %

VOLUME

25.15

-0.3960396

8310685

CHINA PETROLEU-H

8.28

-2.358491

CHINA RES LAND CHINA RES POWER CHINA SHENHUA-H

33.7

9150453

HONG KG CHINA GS HONG KONG EXCHNG

1 22140

INDEX 22006.4 HIGH

22136.66

LOW

21555.23 21550

1-November

5-November

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.41

-1.445087

125741111

AIR CHINA LTD-H

5.44

-1.805054

21664500

ALUMINUM CORP-H

3.47

0.2890173

8584407

CHINA RAIL CN-H

8.28

ANHUI CONCH-H

28.3

-0.1763668

7032719

CHINA RAIL GR-H

BANK OF CHINA-H

3.22

-0.9230769

224886432

CHINA SHENHUA-H CHINA TELECOM-H

CHINA PACIFIC-H

PRICE

DAY %

VOLUME

YANZHOU COAL-H

12.3

0.1628664

18671721

66619175

ZIJIN MINING-H

3.07

-2.229299

49933020

-1.311085

19194649

ZOOMLION HEAVY-H

10.76

-1.284404

9052835

4.06

-1.694915

25023841

ZTE CORP-H

11.48

0.8787346

5569800

33.7

9150453

5.63

-0.3539823

22556118

4.48

-0.2227171

38768029

16.72

3.465347

4208765

DONGFENG MOTOR-H

10.14

0.3960396

32674552

CHINA CITIC BK-H

4.05

-0.4914005

21667131

GUANGZHOU AUTO-H

5.37

-0.5555556

2824958

CHINA COAL ENE-H

8.07

0.6234414

38582207

HUANENG POWER-H

6.15

-0.3241491

8572979

CHINA COM CONS-H

7.47

-1.451187

18987608

IND & COMM BK-H

5.18

-1.333333

198816779

CHINA CONST BA-H

5.9

-0.6734007

174429520

JIANGXI COPPER-H

20.45

-1.682692

9166983

CHINA COSCO HO-H

3.92

-0.5076142

18111785

PETROCHINA CO-H

10.54

-1.125704

59162213

PICC PROPERTY &

BANK OF COMMUN-H BYD CO LTD-H

23.95

0.4192872

26165495

10.52

1.153846

10107488

CHINA LONGYUAN-H

5.08

-0.5870841

6070521

PING AN INSURA-H

62.9

0.64

8727227

CHINA MERCH BK-H

14.62

-0.4087193

7555920

SHANDONG WEIG-H

10.74

3189300

CHINA LIFE INS-H

NAME

MOVERS

2 10890

INDEX 10768.28 HIGH

10885.94

LOW

10512.18

CHINA MINSHENG-H

7.48

1.492537

58202891

SINOPHARM-H

26.25

0.1908397

1362174

52W (H) 11916.1

CHINA NATL BDG-H

10.56

0.3802281

47150363

TSINGTAO BREW-H

0.5847953

1542844

(L) 8987.76

14.3

-2.721088

13921758

WEICHAI POWER-H

30.6

1.492537

3714852

CHINA OILFIELD-H

10500

1-November

5-November

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.56

0.3921569

48054403

CSR CORP LTD -A

4.59

1.324503

26135295

QINGDAO HAIER-A

11.46

-0.7792208

3661301

AIR CHINA LTD-A

5.13

0.5882353

11716633

DAQIN RAILWAY -A

6.15

14831650

QINGHAI SALT-A

25.67

-1.269231

4239400

AISINO CO LTD-A

14.77

-0.9389671

8522320

DATANG INTL PO-A

4.19

0.4796163

3623907

SAIC MOTOR-A

13.36

-0.8166295

12229959

4.94

-0.4032258

7959330

12.16

-0.8156607

4940439

SANY HEAVY INDUS

9.38

1.515152

21822751

2.45

28809801

SHANDONG GOLD-MI

37.11

-2.110261

11755628

NAME

ALUMINUM CORP-A

NAME

EVERBRIG SEC -A

NAME

ANHUI CONCH-A

16.98

-0.2935995

13619444

GD POWER DEVEL-A

BANK OF BEIJIN-A

7.27

1.536313

36218655

GF SECURITIES-A

13.17

-1.126126

17692905

SHANG PHARM -A

11.29

-0.2650177

5132894

BANK OF CHINA-A

2.77

-0.7168459

12726931

GREE ELECTRIC

23.29

0.3014643

14351848

SHANG PUDONG-A

7.73

0.6510417

56974001

BANK OF COMMUN-A

4.35

0.4618938

37795528

GUANGHUI ENERG-A

16.51

-0.602047

20847362

SHANGHAI ELECT-A

4.24

0.4739336

5739878

HAITONG SECURI-A

9.14

-0.6521739

25304130

SHANXI LU'AN -A

17.83

1.479795

18548024

BAOJI TITANIUM-A

-0.6828057

811584

BAOSHAN IRON & S

4.69

0.2136752

16435191

BEIJING CAP CO-A

4.17

2608388

30.2

-2.138691

3985118

SHANXI XINGHUA-A

HENAN SHUAN-A

HANGZHOU HIKVI-A

62.08

2.324048

2322979

SHANXI XISHAN-A

44.1

-2.541436

2790582

12.96

0.9345794

13495033

BEIJING CAPITA-A

10.7

11281684

HONG YUAN SEC-A

18.14

-2.157497

8736857

SHENZEN OVERSE-A

6.06

-1.302932

24796534

BYD CO LTD -A

15.2

3.26087

5207432

HUATAI SECURIT-A

9.41

-1.259182

8849992

SUNING APPLIAN-A

6.84

-1.298701

26875976

CHINA CITIC BK-A

3.68

14767762

HUAXIA BANK CO

8.77

0.2285714

44064028

TSINGTAO BREW-A

31.75

0.2209596

1352448

CHINA CNR CORP-A

4.12

1.728395

69597840

IND & COMM BK-A

3.9

-0.2557545

65047945

WEICHAI POWER-A

21.33

1.090047

9508153

CHINA COAL ENE-A

7.25

0.9749304

13362845

INDUSTRIAL BAN-A

12.81

0.6284368

59736117

WULIANGYE YIBIN

33.69

-2.206096

19669607

CHINA CONST BA-A

4.23

-0.4705882

17046351

INDUSTRIAL-A

10.54

-2.226345

13707447

YANGQUAN COAL -A

14.47

1.259622

13532639

CHINA COSCO HO-A

4.26

0.9478673

12034586

INNER MONG BAO-A

31.07

0.3877221

32302106

YANTAI WANHUA-A

13.75

-1.433692

11890321

CHINA EAST AIR-A

3.54

1.142857

23164250

INNER MONG YIL-A

21.94

-0.9033424

3672565

YANZHOU COAL-A

18.33

0.9361233

3937486

CHINA LIFE INS-A

18.4

-0.7551241

7688081

INNER MONGOLIA-A

6.18

-0.3225806

1960619

YUNNAN BAIYAO-A

66.14

0.03024803

2505368

CHINA MERCH BK-A

10.42

0.4821601

26262182

INNER MONGOLIA-A

5.56

61438292

ZHONGJIN GOLD

15.75

-2.173913

19562904

CHINA MERCHANT-A

9.77

-0.3061224

7903690

JIANGSU HENGRU-A

30.31

1.033333

1985865

ZIJIN MINING-A

3.84

-0.7751938

29125733

7430896

JIANGSU YANGHE-A

119.76

0.6301991

1079410

ZOOMLION HEAVY-A

8.78

1.385681

36837631

21.23

-1.712963

7317303

ZTE CORP-A

8.59

1.416765

15603666

11.4

-0.3496503

3217232

CHINA MERCHANT-A

23.46

-0.887199

CHINA MINSHENG-A

6.15

0.8196721

75754549

JIANGXI COPPER-A

CHINA NATIONAL-A

6.7

-0.297619

16930231

JINDUICHENG -A

CHINA OILFIELD-A

16.26

-0.06146281

2171050

JIZHONG ENERGY-A

12.19

0.910596

15241476

CHINA PACIFIC-A

18.54

-0.855615

11072948

KANGMEI PHARMA-A

16.75

-1.354535

6443193

242.92

-2.190369

2266559 1184072

CHINA PETROLEU-A

6.41

12819758

KWEICHOW MOUTA-A

CHINA RAILWAY-A

5.26

0.7662835

24549190

LUXIN VENTURE -A

10.81

CHINA RAILWAY-A

2.77

0.7272727

32352766

LUZHOU LAOJIAO-A

38.88

-2.360623

4090969

2.11

16888068 20835387

MOVERS

119

CHINA SHENHUA-A

23.37

0.1714531

8008797

CHINA SHIPBUIL-A

4.52

-0.6593407

14816652

NARI TECHNOLOG-A

17.74

2.48

-0.4016064

7933778

HIGH

2315.4

3.8

-0.7832898

30257758

LOW

2256.61

CHINA SOUTHERN-A

3.72

0.5405405

41035409

CHINA STATE -A

3.16

66054415

PANGANG GROUP -A

CHINA UNITED-A

3.65

1.108033

52379868

PETROCHINA CO-A

8.79

0.1138952

13183382

CHINA VANKE CO-A

8.67

0.2312139

49850991

PING AN BANK-A

13.61

0.5912786

14675465

CHINA YANGTZE-A

6.54

0.1531394

12122557

PING AN INSURA-A

38.76

-0.7426376

26609362

11.27

-0.4416961

31345533

POLY REAL ESTA-A

11.75

-0.3392706

41481536

PRICE DAY %

Volume

PRICE DAY %

Volume

CITIC SECURITI-A

23 2320

INDEX 2301.88

METALLURGICAL-A NINGBO PORT CO-A

158

52W (H) 2781.99 (L) 2172.878906

2250

1-November

5-November

FTSE TAIWAN 50 INDEX NAME ACER INC

NAME

23.5

-3.49076

16064972

FORMOSA PLASTIC

ADVANCED SEMICON

21.95

0.2283105

14349677

ASIA CEMENT CORP

36.45 -0.1369863

ASUSTEK COMPUTER

310.5

AU OPTRONICS COR

11.8

NAME

PRICE DAY %

-1.170351

6070329

TAIWAN MOBILE CO

FOXCONN TECHNOLO

98.5 -0.8056395

5653545

TPK HOLDING CO L

3376779

FUBON FINANCIAL

30.7 -0.4862237

10305585

TSMC

0.9756098

1949278

HON HAI PRECISIO

87.5

-1.241535

28563045

UNI-PRESIDENT

-1.666667

68341625

HOTAI MOTOR CO

189

-3.076923

699486

Volume

103

0.9803922

387.5

1.30719

4711174 4620169

90.3

0.4449388

31496291

0.7751938

6673195

UNITED MICROELEC

10.55 -0.4716981

19478617

CATCHER TECH

127.5

1.593625

8460547

HTC CORP

194

-1.522843

24307490

WISTRON CORP

29.45

1.376936

7247331

CATHAY FINANCIAL

29.35

-1.839465

12324570

HUA NAN FINANCIA

15.5 -0.3215434

3134216

YUANTA FINANCIAL

13.55

-1.454545

13358193

CHANG HWA BANK

14.9 -0.6666667

2657991

LARGAN PRECISION

615

-2.535658

1299995

YULON MOTOR CO

49.8 -0.9940358

4706590

CHENG SHIN RUBBE

73.3 -0.2721088

4102044

LITE-ON TECHNOLO

37.6

1.621622

2948420

CHIMEI INNOLUX C

0.4504505

68543435

MEDIATEK INC

318

-2.153846

6865161

CHINA DEVELOPMEN

6.56 -0.6060606

15495108

MEGA FINANCIAL H

21.3

-1.388889

10076103

CHINA STEEL CORP

25.4 -0.3921569

12414292

NAN YA PLASTICS

-1.515152

4501626

25082152

PRESIDENT CHAIN

147.5

1.37457

1087203

CHINATRUST FINAN CHUNGHWA TELECOM

11.15

16.05

-1.533742

92.4

0.7633588

6612365

QUANTA COMPUTER

71.3

0.9915014

3810276

COMPAL ELECTRON

18.85

-1.049869

20070425

SILICONWARE PREC

28.8

0.6993007

5796924

DELTA ELECT INC

103.5 -0.9569378

4110558

SINOPAC FINANCIA

11.5

-1.287554

9313817

FAR EASTERN NEW

30.6 -0.1631321

2596783

SYNNEX TECH INTL

55.9

1.084991

5333399

FAR EASTONE TELE

67.6

0.1481481

2110717

TAIWAN CEMENT

38.1

2.008032

17054647

FIRST FINANCIAL

16.8 -0.8849558

4962838

TAIWAN COOPERATI

15.3 -0.3257329

4142823

FORMOSA CHEM & F

68.2

0.2941176

3955589

TAIWAN FERTILIZE

69.5 -0.1436782

1573610

FORMOSA PETROCHE

84.8

0.7125891

1070363

TAIWAN GLASS IND

26.6

0.3773585

968437

MOVERS

0 5070

INDEX 5042.5 HIGH

5061.78

LOW

4954.35

52W (H) 5621.53 4950

(L) 4643.05 1-November

5-November

November 6, 2012 business daily | 13

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

MElco croWN ENTErTAINMENT

MGM cHINA HolDINGS 39.0

29.50

14.60

29.25

14.45 38.5

29.00

14.30

28.75

Max 29.25

Average 28.883

Min 28.75

28.50

last 28.8

SANDS cHINA lTD

Average 31.493

Max 32

14.15 Max 39

Average 38.193

Min 31.1

Average 14.29

Min 14.12

last 14.14

WyNN MAcAu lTD 23.8

31.75

17.9

23.6

31.50

17.8

31.25

17.7

23.4 23.2 23.0

17.6 Max 17.98

Average 17.839

PRICE

WTI CRUDE FUTURE Dec12

84.42

-0.518501061

-13.95372541

110.25

79.11999512

BRENT CRUDE FUTR Dec12

104.85

-0.785389856

0.924054288

122.0999985

89.84999847

GASOLINE RBOB FUT Dec12

256.25

-0.431302456

3.268316273

295.8800077

217.2600031

913

-1.083423619

1.840490798

1040.25

798

3.507

-1.322453573

-6.654245409

4.440999985

2.90899992

NATURAL GAS FUTR Dec12 HEATING OIL FUTR Dec12

DAY %

YTD %

(H) 52W

Min 17.68

last 17.92

22.8 Max 23.65

Average 23.323

293.57

-0.396960033

2.239325764

335.1700068

254.2500019

1677.05

-0.0566

7.1659

1803

1522.75

Silver Spot $/Oz

30.8116

-0.3264

10.6937

37.4775

26.1513

1542.1

-0.0926

10.5844

1736

1339.25

599

-0.2963

-8.3397

725.19

553.75

Platinum Spot $/Oz Palladium Spot $/Oz LME ALUMINUM 3MO ($)

1925

-0.773195876

-4.702970297

2361.5

1827.25

LME COPPER 3MO ($)

7665

-2.057245081

0.855263158

8765

7100.25

LME ZINC

1874

-0.794070937

1.571815718

2220

1745

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jan13 Dec12

PRICE

(L) 52W

Gold Spot $/Oz

15975

-1.993865031

-14.61785142

22150

15236

14.965

-0.266577807

-2.539889287

16.60000038

14.60000038

738.5

-0.135226504

25.97014925

849

499

last 23.35

Min 23.15

MAJORS

ASIA PACIFIC

CROSSES

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

DAY %

1.0354 1.5994 0.9426 1.28 80.26 7.9827 7.7502 6.2453 54.4775 30.8 1.2257 29.245 41.255 9633 83.099 1.20659 0.80028 7.9813 10.2178 102.73 1.03

0.1645 -0.1685 -0.2334 -0.2727 0.2118 0.0013 0.0013 -0.0592 -1.2229 -0.0974 -0.0734 -0.0239 -0.1915 -0.0208 0.0217 0.0448 0.0762 0.9121 0.6391 0.4964 0

YTD %

(H) 52W

1.4203 2.9016 -0.4774 -1.2422 -4.1739 0.2117 0.2219 0.7958 -2.5928 2.4351 5.7844 3.5356 6.2659 -5.8549 -5.6162 0.8454 4.1373 1.9157 1.3134 -2.9884 0.0097

(L) 52W

1.0857 1.6309 0.9972 1.3859 84.18 8.0308 7.7979 6.3964 57.3275 32 1.315 30.5 44.35 9662 88.637 1.24569 0.86648 8.7923 11.089 111.44 1.0311

0.9582 1.5235 0.8862 1.2043 76.03 7.9823 7.7498 6.234 48.6088 30.2 1.2152 29.084 41.118 8875 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029

MACAU RELATED STOCKS (H) 52W

(L) 52W

ARISTOCRAT LEISU

2.78

-1.41844

26.36363

3.25

2.16

1018133

152.8000031

CROWN LTD

9.69

-1.02145

19.7775

10.03

7.92

2161151

WHEAT FUTURE(CBT) Dec12

866.25

0.20242915

20.3125

953.25

629.5

SOYBEAN FUTURE Jan13

1516.75

-0.654986082

25.04122012

1781.5

1126.75

COFFEE 'C' FUTURE Dec12

154.25

-0.290885585

-34.63983051

248.25

NAME

PRICE

DAY % YTD %

VOLUME CRNCY

SUGAR #11 (WORLD) Mar13

19.45

-16.7380137

25.12999916

19.18000031

AMAX HOLDINGS LT

0.07

-2.777778

-19.54023

0.119

0.055

6821000

COTTON NO.2 FUTR Dec12

70.2

-0.213219616

-20.08196721

97.98999786

64.61000061

BOC HONG KONG HO

-0.8264463

30.43479

16.24

7223377

CENTURY LEGEND

0.265

-1.851852

15.21739

0.335

0.204

4.3

-0.462963

53.57143

4.36

2.5

31000

CHINA OVERSEAS

21.65

0.4640371

66.98292

21.95

11.507

21377370

CHINESE ESTATES

12.5

0.1602564

13.26

8.3

225000

CHOW TAI FOOK JE

10.5

-0.7561437

-24.56897

15.16

8.4

6096800

EMPEROR ENTERTAI

1.51

1.342282

36.03603

1.57

0.99

760000

FUTURE BRIGHT

1.26

0.8

200

1.36

0.37

444000

GALAXY ENTERTAIN

28.8

-0.8605852

102.2472

29.35

13.2

13331434

CHEUK NANG HLDGS

World Stock MarketS - Indices NAME

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

13093.16

-1.053911

7.166739

13661.87

11231.56

NASDAQ COMPOSITE INDEX

2982.132

-1.255902

14.47065

3196.932

2441.48

HANG SENG BK

119

0.08410429

29.13727

120

91.05

560082

FTSE 100 INDEX

5831.35

-0.6338874

4.64927

5989.07

5075.22

HOPEWELL HLDGS

28.5

-0.6968641

45.39216

31.091

18.319

1255000

DAX INDEX

7325.45

-0.5214664

24.1949

7478.53

5366.5

HSBC HLDGS PLC

77.75

-0.2565747

31.77966

13221591

HUTCHISON TELE H

3.22

-1.829268

7.692307

3.88

2.81

6190000

LUK FOOK HLDGS I

21.15

-3.203661

-21.95572

37.1

14.7

5025780

MELCO INTL DEVEL

7.83

0.5134788

35.70191

8.28

5.12

3545000

NIKKEI 225

9007.44

-0.4836917

6.529485

10255.15

8135.79

HANG SENG INDEX

22006.4

-0.4745531

19.37688

22149.69922

17613.19922

CSI 300 INDEX

2301.88

-0.2121578

-1.869859

2781.99

2172.878906

MGM CHINA HOLDIN

14.14

-1.532033

47.41215

14.76

9.347

2232912

TAIWAN TAIEX INDEX

7185.36

-0.3482436

1.601789

8170.72

6609.11

MIDLAND HOLDINGS

3.96

-1.246883

0.1505555

5.217

3.249

2522000

NEPTUNE GROUP

0.158

-1.25

42.34234

0.222

0.08

2980000

NEW WORLD DEV

12.46

0.9724473

99.04153

13.2

6.13

15084090

SANDS CHINA LTD

31.6

-0.9404389

43.96355

33.05

19.96

9877759

SHUN HO RESOURCE

1.27

1.37

0.95

SHUN TAK HOLDING

3.18

-0.625

24.26106

3.51

2.418

5054751

KOSPI INDEX

1908.22

-0.5472398

4.517619

2057.28

1750.6

S&P/ASX 200 INDEX

4474.12

0.3153998

10.29344

4581.8

3973.8

4302.939

-0.8286217

12.58367

4366.856

3618.969

FTSE Bursa Malaysia KLCI

1654.04

-0.1261978

8.055637

1679.37

1424.19

NZX ALL INDEX

853.106

-0.1423351

16.89582

874.107

712.548

JAKARTA COMPOSITE INDEX

14.00

18.0

31.00

last 31.6

Max 14.5

32.00

NAME

CORN FUTURE

38.0

CURRENCY EXCHANGE RATES

GAS OIL FUT (ICE) Dec12

METALS

last 38.35

SJM HolDINGS lTD

Commodities ENERGY

Min 38.15

SJM HOLDINGS LTD

17.92

-0.7751938

43.29654

18.18

11.519

6412600

SMARTONE TELECOM

16.08

-0.248139

19.64286

17.5

11.72

1475154

WYNN MACAU LTD

23.35

-0.6382979

19.74359

25.5

14.62

5783175

ASIA ENTERTAINME

4.15

-1.658768

-29.42177

7.49

2.4

166585

BALLY TECHNOLOGI

49.22

-2.496038

24.4186

51.16

34.88

503188

PHILIPPINES ALL SHARE IX

3584.17

0.09998352

17.70518

3607.89

2939.18

HSBC Dragon 300 Index Singapor

593.78

0.21

19.63

STOCK EXCH OF THAI INDEX

1306.45

-0.01148018

27.41876

1314.64

951.98

HO CHI MINH STOCK INDEX

377.27

0.5356286

7.316172

492.44

332.28

BOC HONG KONG HO

3.16

0.9584665

31.82115

3.3

8810

Laos Composite Index

1085.58

1.715592

20.69241

1085.58

876.33

GALAXY ENTERTAIN

3.67

5.99278

96.25668

3.7

1.68

35650

INTL GAME TECH

12.93

-2.927928

-24.82558

18.1701

10.92

4394396

JONES LANG LASAL

78.61

-1.367629

28.32191

87.52

55.88

489471

LAS VEGAS SANDS

46.1

-0.7748601

7.886732

62.09

34.72

10428343 4746369

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

MELCO CROWN-ADR

14.89

1.28356

54.78171

16.02

8.18

MGM CHINA HOLDIN

1.88

1.075269

57.75873

1.96

1.1917

5200

MGM RESORTS INTE

10.25

-2.101242

-1.725794

14.9401

8.83

9667999

SHFL ENTERTAINME

13.71

-4.923717

16.97952

18.77

10.22

212413

SJM HOLDINGS LTD

2.2

36.85228

2.3

1.4695

12000

120.798

-1.710334

9.329353

138.28

90.108

1831522

WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily November 6, 2012

Opinion Greece needs a writedown, not a buyback Marc Champion James Gibney

Bloomberg View editors

he prime minister of Greece took a large political risk October 31 to keep Greece in the euro, just as other euro area leaders appear to be recognising that the country needs more time and more relief from its debt obligations to survive. That’s progress. Lowered interest rates for Greece and help with a debt buyback are among the ideas under discussion. Any move by Germany to work with Greece is welcome, even if things are only where they should have been two years ago. The coming week’s flurry of deal-making may secure the release of Greece’s next 31.5 billion-euro (US$40.8 billion) aid tranche. Yet a possible debt buyback for Greece would not reverse the country’s downward economic and political spiral. Nor will the further 13.5 billion euros of budget cuts and tax increases that Prime Minister Antonis Samaras accepted publicly yesterday, at the risk of collapsing his coalition government. Why the pessimism? Because more than 9 billion euros of cuts and other measures will take effect next year, meaning that further recession is pretty much guaranteed. Five years into a contraction that has so far wiped out almost a fifth of the Greek economy, ordinary Greeks and bond markets alike still need to be

shown a believable route to solvency and growth.

Losing buybacks The new budget that Samaras presented to his parliament on October 31 projects that Greece’s government debt will rise to almost double the size of the economy in 2013, or 189.1 percent of gross domestic product. As we’ve shown before, the kinds of budget surpluses needed to bring that level of debt under control are not historically plausible for Greece. The debt buyback idea is appealing, not least because it allows Germany to agree to a debt reduction measure for Greece without having to cross its own red lines of forgiving debt that the country owes to the German government or the European Central Bank. Under a buyback, the European Stability Mechanism, the euro area’s permanent bailout fund, probably would loan Greece money to buy its bonds from investors at the current, discounted market rates. Greek 10-year bonds, for example, traded yesterday at about 32 cents on the dollar, so in theory Greece could retire three dollars of loans for every dollar it borrows. Here’s the problem, though: debt buybacks have perverse effects. As Stanford University economics professor Jeremy Bulow showed in a joint paper with Harvard’s Kenneth Rogoff

during the Latin American crisis of the 1980s, buybacks tend to drive up the price of remaining bonds, leaving the market value of a government’s debt little changed. For Greece, Bulow tells us, “this is a case of proposing to spend money for the purposes of facilitating accounting make-believe.” In addition, a buyback could only address a part of the

Five years into a contraction that has so far wiped out almost a fifth of the Greek economy, ordinary Greeks and bond markets alike still need to be shown a believable route to solvency and growth

roughly 40 percent of Greece’s 340 billion euros of debt that is privately held. According to researchers at Greece’s Eurobank, a 30 billion euro buyback that works efficiently would knock about 12 percentage points off Greece’s debt pile by 2020, leaving it still well above the IMF’s 120 percent of GDP target. What’s needed now is a writedown of Greek government debt owed to official creditors, as the International Monetary Fund’s Christine Lagarde recently suggested. Official lenders hold about 60 percent of Greek government debt.

Failed commitments We see the outlines of a possible deal here, albeit one that would require extraordinary political courage as well as legal changes in Germany, Athens and at the European Central Bank. Germany and other official lenders would need to accept a write-down of their debt, and at the least commit to directly recapitalise Greek banks when that becomes possible, a step that would remove up to 50 billion euros from the government’s liabilities. The other side of the Greek impasse is the repeated failure of governments in Athens to carry through on the commitments to which they signed up in two previous bailouts. The top priority here has been to rebuild the

dysfunctional Greek tax collection system. Results have been disappointing: since January, the tax service has been without the independent chief that the government promised to give it. In equally dispiriting news, when a journalist recently published a two-year-old list of 2000 Greek groups with bank accounts in Switzerland, the journalist was prosecuted. A court declared him innocent of the breach of privacy charges on November 1. Small wonder, then, that Germany is worried about giving Greece more help. German Finance Minister Wolfgang Schaeuble has proposed that bailout money and future Greek budget surpluses should go into a trust fund, which would be kept out of the reach of the Greek government. This seems reasonable. Greece should also agree that in areas such as tax collection, failure to act will mean handing over more power to the technicians of the EU’s Task Force for Greece, who already are working with Greek ministries. These aren’t precedents that we like or want to see repeated, but Greece has shown itself to be a special case. It needs the kind of deep changes that new EU applicant countries must now go through in order to join. If Greek and euro area leaders don’t want to take the risk of a currency meltdown that a Greek default might entail, then they need to be bolder still. Bloomberg View

Greece Prime Minister Antonis Samaras

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November 6, 2012 business daily | 15

OPINION Business

Renminbi rising

Leading reports from Asia’s best business newspapers

Zhang Monan

wires

Fellow of the China Information Centre and fellow of the China Foundation for International Studies

Bangkok Post Medical tourism is a rising star as Thailand seeks to boost tourism revenue to 2 trillion baht by 2015, with attractive pricing, cutting-edge technology and skilled doctors drawing foreign patients. The pressure to hit the 2-trillionbaht target (US$65 billion) has caused all parties to look for potential channels, and medical tourism is a serious focus of the Tourism Authority of Thailand (TAT). The TAT organised the World Spa and Well-being Convention 2012 in September, bringing together more than 100 sellers and 88 buyers from around the world.

reinforcing the tendency to hold assets in renminbi and liabilities in foreign currencies.

Increased volatility

JoongAng Daily Korea’s total debt in the private and public sectors neared the 3,000 trillion won (US$2.75 trillion) mark in the second quarter of this year, spawning concerns that high indebtedness will undercut economic growth. Combined debt held by the government, companies and households amounted to 296.2 trillion won as of end-June, accounting for 233.8 percent of nominal GDP, according to data. Debtto-GDP ratio stood at 231.1 percent as of the end of last year. Households’ debt-to-GDP ratio stood at 88.5 percent as of the end of June.

Jakarta Post Low average selling price of steel resulting from an oversupply in the domestic market hit earnings of the Indonesia’s major steel producers in the first nine months of this year. Indonesian Iron and Steel Industry Association said in Jakarta that the influx of imported steel products had caused an oversupply in the country’s steel market, lead to a price slump. Many foreign steel makers such as those from China have turned to Indonesia to sell their products due to the decline in demand from Europe.

Business World The European Chamber of Commerce has reiterated its call to relax the rules on areas restricted to foreign investors after the issuance of an executive order expanding the economic activities restricted to Filipinos. The business group has yet to study Executive Order (EO) 98, but ECCP President Michael Raeuber said: “In general, we are for opening of markets and liberalising the so-called negative list.” EO 98 defines the extent of participation of foreign investors in areas allowed by specific laws and the Constitution.

n October 26, the renminbi’s spot exchange rate against the U.S. dollar reached the upper limit of its floating range for the second consecutive trading day. The rise began when the trading band for the renminbi’s dollar exchange rate was widened to ±1 percent, and has now reached an all-time high since 1994’s currency reform. With little sign of improved economic fundamentals, rapid currency appreciation is a potentially dangerous development for China – in part owing to the risk of an abrupt and painful reversal. The renminbi’s rise over the past month can be attributed to greater global liquidity since the start of the third quarter, as policymakers have responded to the eurozone’s sovereign-debt crisis and stagnating output. Indeed, according to Morgan Stanley, monetary authorities in 16 of the 33 countries that it follows – including seven of ten advanced-country central banks and nine of 23 central banks in emerging markets – have either cut their benchmark interest rate or lowered reserve requirements. After two rounds of quantitative easing (QE), the balance sheets of the European Central Bank and the United States Federal Reserve have grown to 3.2 trillion euros (US$4.1 trillion) and US$2.9 trillion, respectively. The ECB’s new outright monetary transactions (OMT) programme in secondary sovereign-bond markets, and the Fed’s openended “QE3” continue this trend, while the Bank of Japan has expanded its asset-purchase programme for the eighth time.

Money spillover The spillover from the developed countries’ latest round of QE is beginning to show up in emerging markets,

where nearly a year of shortterm capital outflows has given way to a new wave of short-term inflows. With U.S. domestic bond yields continuing to fall and U.S. equities reaching an upper price limit, owing to the real economy’s sluggish recovery, more money is expected to flow to commodity markets and higher-yielding emerging countries. Given China’s adherence to a stable monetary policy, the renminbi has become a more attractive asset to hold. Indeed, as the renminbi strengthened over the last month, the People’s Bank of China did not intervene strongly to repurchase dollars from commercial banks – a decision rarely seen in recent years. This indicates that the

Even with its recent strengthening, the renminbi is within a balanced exchange-rate band that is appropriate to its foreign-trade balance

renminbi’s appreciation was driven mainly by short-term arbitrage by outside funds. Another reason for the appreciation is the renminbi’s peg to the dollar, which has fluctuated increasingly widely since October 2011. As a result, while the renminbi performed poorly against the dollar in the first half of this year (even depreciating temporarily), America’s year-end “fiscal cliff,” together with QE3, has weakened the dollar since the start of the third quarter, with the exchange rate falling back to its level at the start of this year. But there is still a need to be vigilant. While the onshore and offshore renminbi markets remain decoupled, the start of renminbi settlement under the trade account enables Hong Kong’s offshore renminbi (CNH) currency market to coexist with the onshore (CNY) market, leaving significant room for arbitrage. Given that the renminbi’s real and expected rates of return are higher than the real rate of return of other currencies, it has become a positive carry against foreign currencies,

Because China is still enforcing capital controls, it is not easy for foreign investors to put their money into the CNY market. Therefore, most short-term foreign inflows have detoured through the CNH market. Indeed, the Hong Kong Monetary Authority has had to inject liquidity into its banking system four times in recent months – more than HK$14.4 billion – to stabilise the Hong Kong dollar’s exchange rate, which clearly indicates that the international hot money flowing in is actually heading to the mainland. Even with its recent strengthening, the renminbi is within a balanced exchangerate band that is appropriate to its foreign-trade balance; still, China’s economy could not bear sharp exchange-rate appreciation. Fortunately, that seems unlikely. In fact, both the deliverable and non-deliverable forward rates anticipate one-year renminbi depreciation of 2.35 percent and 1.75 percent, respectively. In fact, the renminbi could be shorted again – most likely via the CNH renminbi market. In early December 2008, the worldwide crisis led to a global capital outflow from China, and the exchange rate of the renminbi fell to its lowest limit four days in a row – a record since the exchange-rate reform of July 2005. Then, beginning on November 30, 2011, the exchange rate approached the bottom of the trading band for seven days, causing panic in the market. These events are not distant memories. After all, a currency’s exchange rate is not determined only by economic fundamentals. There will always be foreign short-term flows that can increase a currency’s volatility. Indeed, after its recent sharp appreciation, the renminbi could turn out to be a prime target for short sellers. © Project Syndicate

16 |

business daily November 6, 2012

CLOSING Greek workers open week of strikes

Spain jobless queue hits 16-year record

Public transport and media workers opened a week of strikes in Greece yesterday, contesting fresh austerity measures needed for a lifeline from creditors which are due to be presented by the government to parliament. The metro in Athens was shut and only one tram line circulated yesterday, while taxi drivers halted services, severely disrupting traffic in the capital. The country was also hit by a media blackout as print, broadcast and electronic media journalists walked out in a 24-hour strike.

The number of job seekers in recessionstruck Spain soared to the highest level in at least 16 years in October, the government said yesterday. The number of people registered as unemployed hit 4.83 million in the month, a Labour Ministry report said, a peak unmatched since existing records began in 1996, and one of the highest levels in Europe. Another 128,242 people joined the jobless queue in the month, pushing the total up 2.7 percent from September. Compared with a year earlier, the October figure was up by 472,595 people, or 10.84 percent.

Final campaign day for Obama, Romney Polls suggest the election can go either way

A gruelling 18-month battle comes to an end

fter a gruelling 18-month battle, the final U.S. campaign day arrived for President Barack Obama and rival Mitt Romney, two men on a collision course for the world’s top job. The candidates have attended hundreds of rallies, fundraisers and town halls, spent literally billions on attack ads, ground games,

and get out the vote efforts, and squared off in three intense debates. Their running mates – Vice President Joe Biden and Republican congressman Paul Ryan – have laid out the rationales for their bosses’ aspirations; First Lady Michelle Obama, Romney’s wife Ann and countless surrogates on both sides have

made the case. Monday marked the final, last-ditch attempt by incumbent and challenger to convince the narrowing sliver of undecided voters that their policies, their platforms, their approach to leading America forward are the right ones come 2013. And with polls showing that, for the most part, each

has as equal a shot at the White House as the other, Mr Obama and Mr Romney will engage in unvarnished efforts to mobilise their core supporters. “I need you, Ohio,” Mr Obama admitted to a 20,000-strong crowd in Cincinnati, in a state for which both candidates are fighting tooth and nail. “And if you’re willing to work with me, and knock on some doors with me, if you’re willing to early vote for me, make some phone calls for me, turn out for me, we’ll win Ohio. We will win this election,” the president said. Both candidates campaigned deep into the night on Sunday, with Mr Romney too imploring his supporters to get out the vote in the handful of battleground states where the next occupant of the White House will be decided. “We’ve got a little work to do in the coming days... which is to make sure we have a win on Tuesday

Indonesian court scraps mineral exports regulations Decision will allow restart of raw ores exports

ndonesia’s Supreme Court has scrapped a government ban on the export of unprocessed minerals, the country’s chamber of commerce said yesterday, and urged the government to draft new mineral export rules. The decision appears to clear the way for a resumption of mining by small scale producers hard-hit by regulations introduced in May that led to a suspension of much of their activity and sent shockwaves through the industry. It also represents an apparent setback for the government, which instituted the reforms to increase revenue, conserve resources for domestic needs and boost the downstream mining sector as it pushes to make Indonesia a top 10 world economy. The May 6 rules aimed to push miners into processing raw ores

domestically to export higher-value finished metals. Mining executives said they hurt the sector at a time when commodity prices and investment faced pressure due to a global slowdown. The Indonesian Nickel Association and the Association of Indonesian City and Regional governments (Apkasi) brought the case in which it asked the government to drop four chapters of the regulations. “The supreme court agreed with some parts of our case and has ordered the central government to drop four chapters of the regulation, including chapter 21 on the mineral export ban,” Indonesian Nickel Association chairman Shelby Ihsan Saleh said. The controversial section effectively bans miners from exporting raw materials unless they comply with subsequent rules on downstream

processing, duties, and adhere to good mining practices. The latest decision could add uncertainty to an industry already uneasy over regulation.

night,” the Republican nominee said at a night rally in Newport News, Virginia. The final dash underlined the tightness of a race that is drawing to a close with the rival candidates and their aides confidently predicting victory after months of campaigning and conflicting fortunes in opinion polls. As the clock ticked down to Tuesday’s vote, Mr Romney’s efforts included a surprise foray into Pennsylvania, a Democratic-leaning state that Republican strategists say is breaking his way. Democrats said they were confident of Mr Obama’s small but steady lead in key swing states, but acknowledged that everything now depends on getting the vote out. The two candidates are effectively tied in national polls of the popular vote but Obama appears to have a stronger claim to the battleground states, and if the polls are accurate, seems to be in position to win re-election. AFP

“With the Supreme Court decision all the chapters [of the ban] have to be dropped as soon as possible and mineral exports will be regulated by the Trade Ministry,” Natsir Mansyur, a senior official of the chamber of commerce, told Reuters. He was referring to portions of the legislation that authorise the central government to oversee mineral processing and ban mineral exports. “The Energy and Mineral Resource ministry has no right any more to regulate exports, including determining the mineral export quota,” Mr Mansyur added.

The government wants higher added value exports

Reuters