Year I Number 159 Friday November 9, 2012 MOP 6.00 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte www.macaubusinessdaily.com
The great property squeeze
Offices in short supply T
here are only 23 officially designated office buildings in Macau, a real estate expert has told Business Daily. Half of those have facilities well below international standards, adds Jeff Wong Chi Wai, of Jones Lang LaSalle Macau. The lack of quality office space is contributing to an inflationary spiral in office transactions as the city’s economy expands and ever-greater numbers of companies look to set up business here. That’s been further fuelled by property investors turning to the commercial sector after being squeezed out of the homes market by lack
of new supply and by a special stamp duty on re-sale of houses – a measure designed to curb speculation. Office transactions hit a nine-month high in October as demand boosted rental yields. According to data released by the Statistics and Census Service yesterday, there were 93 office transactions in October, twice as many as in the previous month. But the government’s decision last month to extend stamp duty to commercial units – due to take effect at the end of this month – is likely to curb the upward trend in office sales, Mr Wong says. More on page 2
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HANG SENG INDEX 21860
Cotai building workers’ late wages claim It’s been alleged some former workers on Sands Cotai Central’s construction are owed wages more than a year after leaving the site. A labour federation has urged Macau gaming operators to oversee labour suppliers more effectively. Some 30 workers are claiming a construction sub contractor on SCC owed them unpaid wages worth 1.2 million patacas (US$150,000).
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Cooking on gas – LPG up 36 pct since Aug
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21660
21560
November 8
HSI - Movers Name
A standard 13.5 kilos cylinder of liquefied natural gas – a fuel used by many Macau households for cooking – has gone up in price by 36 percent between August and this month. But gas suppliers have rejected claims they are profiteering. They blame market fluctuations in Hong Kong – from where they import most petrol products. Macau Fuel Industry Association says it’s ‘helpless’ and unable to intervene.
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%Day
HENGAN INTL
1.05
TINGYI HLDG CO
0.44
CLP HLDGS LTD
-0.97
MTR CORP
-1.00
CHINA MERCHANT
-1.01
LI & FUNG LTD
-3.46
BELLE INTERNATIO
-3.67
HONG KONG EXCHNG
-3.79
CHINA RES LAND
-3.80
CHINA COAL ENE-H
-4.20
Source: Bloomberg
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Next leap forward: VIP gambling likely up in Nov Page 3
Permira completes Galaxy withdrawal
Education Bureau ‘knew rules’: Audit Commission Page 4
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business daily November 9, 2012
macau Mercedes launches sales of new car model Mercedes-Benz Hong Kong Ltd launched the sales of the third generation of its series A-Class automobiles in Macau yesterday. The new series features a higher power engine with lower emissions and higher safety standard, as well as a design with the car standing 160 millimetres lower on the road than the second generation, the company said in a statement. Three models – A180, A200 and A250 Sport – are available in Macau with the prices ranging between 270,000 patacas (US$33,750) and 417,000 patacas.
Super office sales defy property slump Office transactions hit a nine-month peak in October as demand boosts rental yields Vítor Quintã
vitorquinta@macaubusinessdaily.com
O
ffice space was hot property last month, with the volume and value of sales more than doubling September’s results to reach a nine-month high. However, a real estate agent has warned that the explosive growth will be slowed by the extension of the special stamp duty to commercial property later this month. Data released by the Statistics and Census Service yesterday says there were 93 offices sold last month, twice as many as in September. Strong growth was also recorded in the value of office sales, which soared to 406 million patacas (US$51 million), up from 207 million patacas in September. In both cases, October’s figures are the highest so far this year. The office sales boom comes as sales of homes and shops have hit a six-month low, a trend that fails to surprise Jeff Wong Chi Wai, head of residential at Jones Lang
LaSalle Macau. “The residential sector has been curtailed by further government measures, while the retail sector has been less attractive, as yields continue to drop,” he told Business Daily. S ales o f h o m es d r o p p ed b y 18.7 percent from September to 1,254, while the value of those transactions fell by 17.2 percent to 5.7 billion patacas. Meanwhile, sales of retail space fell by 5.6 percent to 170 transactions last month. The value of those sales tumbled even more, falling 43 percent to 1.1 billion patacas.
Space race “Compared to other assets, offices are still a quite attractive investment, especially for short-term gains, because as rents continue to increase the yield is still on the high side,” Mr Wong said. He said strong demand for office
space amid short supply had pushed up rents. “There are only 23 office buildings in Macau but more than half are outdated, either because they are too old or their facilities are not up to standard,” he said. Most multinational companies reject older premises and prefer to wait for high-quality, grade-A office buildings. One of those, the AIA Tower was “almost 100 percent occupied”, he said. Supply was scarce at the top end of the scale, as “most of the grade-A offices are not up for sale, just available to rent,” he said. Bigger international firms are not allowed to buy and must rent their office space. Mr Wong said other enterprises would probably be interested in buying, especially with extremely low interest rates. “It’s a 4 percent yield against
an interest rate of only 2 percent,” he said. The Fortune Business Centre, near the New Yaohan department store, is due to be completed next year. This will add about 37,000 square metres of grade-A office space to the market. Mr Wong said it was a welcome addition that would increase competitiveness and help balance supply and demand. Starting later this month, the special stamp duty on the resale of flats, introduced in June last year, will be extended to commercial spaces, offices and car-parking spaces. Mr Wong expects the new rules will cause sales to decline but says there is no major reason why prices would drop. “People are still looking to expand offices or rent new offices, so prices will still be going up or remain quite stable,” Mr Wong said.
November 9, 2012 business daily | 3
MACAU
‘Hangover’ affecting gaming rev to ease soon: Nomura Successful conclusion of China’s leadership transition should see VIP gamblers back at tables
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nce China’s leadership transition is completed later this month, there could be a ‘modest’ recovery in gambling by high roller players in Macau says Nomura International (HK) Ltd, a unit of Nomura Group, one of Asia’s largest investment houses. Grant Bowie, chief executive of Macau casino business MGM China Holdings Ltd, said during last week’s third quarter earnings call for the firm’s majority owner MGM Resorts International, that the leadership transition had “definitely had an impact and has tended to cool the market somewhat,” although he added that VIP business was also in likelihood consolidating after a period of unprecedented high growth. Nonetheless, for the first four days of November Nomura cited Macau sources as indicating strong daily run rates for VIP and mass market gambling revenue. If the performance were maintained across the whole month, it would suggest total November gaming revenues of between 24.5 billion and 25 billion patacas (US$3.06
billion to US$3.13 billion), implying six to eight percent yearon-year growth. Lawrence Ho Yau Lung, cochairman of Macau casino operator Melco Crown Entertainment Ltd said during his company’s third quarter earnings call on Wednesday that the first few days of November had shown highly encouraging revenue upturn. Nomura estimates on the early evidence that market-wide in Macau, November’s VIP revenues could be up two to five percent year-on-year. It points out however that November 2011’s VIP revenues were particularly strong because of an above average baccarat hold rate for the casinos. Variations in hold rate can make year-on-year comparisons difficult. Casino companies and analysts tend to offer guidance to investors by publishing alongside the actual revenue figures some theoretical revenue figures for the reporting period that are ‘normalised’ to account for average hold. Nomura estimated mass table revenues – which offer higher
margins than VIP table play – could be up 17 to 20 percent year-on-year. “Market wide the mass-market segment has continued to deliver a strong growth rate outpacing
the VIP segment over the past four quarters on a year-over-year basis,” said Mr Ho in his company’s earnings call. M.G.
Mass-market continues to deliver strong growth rate
business as usual
Blurred transparency Paulo A. Azevedo pazevedo@macaubusinessdaily.com
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ow that some of Macau’s major problems have become too obvious to ignore, the Commission Against Corruption can finally talk about a core issue without fear: government departments and their leaders do not place enough importance on complaints. Commissioner Vasco Fong Man Chong has said there is no transparency in the way power is being administered. The commission’s recently released annual report said there was an urgent need to create a system that solves the issue. Better late than never, but I fear even the commissioner’s warnings will be in vain. They will likely be completely devoured by the system. One of the targets of Mr Fong’s criticism is, as we have pointed out so many times, the Land, Public Works and Transport Bureau. In a city where land is scarce and so many of the well-connected have businesses related to property development, this department is naturally a desirable target. What I do not understand is why the corruption watchdog shows so little initiative and is so dependent on complaints, most of which I understand are anonymous. The signs must be strong enough for it to start digging around and probing deeper. All you need to do is read a newspaper, well, some newspapers at least. If the graft buster cannot do more to provide oversight, I guess there is more than just a lack of transparency in how officials exercise power. It might also explain the incomprehensible reluctance to investigate major cases where transparency is fuzzy.
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business daily November 9, 2012
macau Pansy Ho sets up Louvre fundraiser
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Macau gaming businesswoman Pansy Ho Chiu King organised on Wednesday in Hong Kong the first major China fundraiser for Paris’ Louvre Museum. Ms Ho, daughter of casino tycoon Stanley Ho Hung Sun, is the first Chinese ambassador to the Louvre. The museum hopes to secure 1 million euros (10.2 million patacas) through the Hong Kong event, a spokesperson told China Daily, to help reopen the 18th Century Decorative Arts Galleries. Louvre’s next China event will be a joint exhibition at Beijing’s National Museum in 2013, Ms Ho said.
HOSPITALITY Return on investment The hotel sector has grown immensely in Macau in recent years and studying a few basic indicators offers a glimpse into the scale of the change. This analysis uses the most recent data, for the first eight months of this year, and compares them with the same period in 2006. Although the gaming monopoly ended in 2002 and the first casino opened two years later, this analysis uses 2006 as a starting point because this was when the hospitality sector’s tremendous growth began.
Permira exits Galaxy group Galaxy fell in Hong Kong trading after Permira selldown Vítor Quintã
vitorquinta@macaubusinessdaily.com
The graph shows that the number of has hotels jumped from 80 to 101, representing growth of about 26 percent. More impressive is the rise in room inventory, which has more than doubled to 25,000 rooms by last August. A significant number of the city’s new properties are big hotels, with an average of about 600 rooms. That has led to an increase in the average size of a hotel from 153 rooms to 249 rooms – an increase of two-thirds. The rapid increase in supply has enabled hotels to accommodate the rise of about 88 percent in guest numbers, and the increase in the occupancy rate by more than 11 percentage points to just below 83 percent. Between 2006 and this year, the number of visitors to the city increased by 32 percent and overnight visitors by 22 percent. These results are certainly extraordinary. But none beats the rise in the average room rate, which has more than doubled from 653 patacas in 2006 to 1,406 patacas this year. This is a reflection of both greater demand and the higher grade for most of the new hotels, which are dominated by five-star accommodation. J.I.D.
115.2 %
Increase in average room rate since 2006
With its Cotai resort proving highly profitable, price of Galaxy shares almost doubled this year (Photo: Carmo Correia)
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rivate equity company Permira Advisers LLP has raised almost HK$7 billion from the sale of its remaining stake in casino operator Galaxy Entertainment Group Ltd, capping off a hugely profitable investment for the firm. Permira sold its remaining 5.94 percent stake in Galaxy yesterday, a day after the shares reached a record high of HK$28.6 and just two weeks after the gaming company reported better-than-expected third quarter results. Galaxy, founded by billionaire Lui Che Woo, last month reported a 46 percent gain in third-quarter profit as mainland Chinese gamblers spent more at the resort it set up last year. Permira’s 249.6 million shares were sold at HK$27.17 each, putting the deal value at HK$6.78 billion (US$875 million), a source with direct knowledge of the deal told Reuters. The shares had been marketed in a range of HK$27.17-27.46 each, Thomson Reuters publication IFR reported, at a 4-5 percent discount to Wednesday’s closing price. Galaxy shares had almost doubled this year but fell the most in more than three months in Hong Kong trading right after the sale. The operator’s shares fell as much as 5.1 percent before closing at HK$27.45, while the benchmark Hang Seng Index dropped 2.4 percent. The deal paid off in spades after the private equity firm endured a
roller-coaster ride in Macau’s highflying but unpredictable casino sector. Permira’s investment had lost more than 90 percent of its value in late 2008 when the stock fell to HK$0.50, sparking criticism for having taken a minority stake in Galaxy without effective control of the company. It also follows months of speculation over a possible selldown and may lend support to Galaxy’s shares, JPMorgan analyst Kenneth Fong said. “People were concerned about the placement, but now with the overhang gone, it should boost sentiment,” Mr Fong told Reuters. The latest sale takes Permira’s gains on its original investment in
KEY POINTS Shares sold at HK$27.17 each, at bottom of indicative range Permira exits Galaxy investment after almost 5 years Galaxy shares sold a day after stock reached record high
Galaxy in 2007 to nearly 170 percent, according to Reuters calculations, profiting from the boom in Macau’s gaming industry in recent years. European-based Permira raised a combined HK$17.5 billion from the most recent stake sale and two other selldowns, compared with its initial HK$6.53 billion investment for a 20 percent stake in the casino company. The private-equity investor, which has been paring its holdings in the gambling company, in August sold 278.8 million shares through a separate placement. Waddell & Reed Financial Inc., a Kansas-based asset management company, bought twothirds of the nearly seven percent stake that Permira had in Galaxy. Galaxy said in a securities filing early yesterday the latest sales were done through Permira’s ENB Lux 1 S.àr.l and ENB Lux 2 S.àr.l vehicles in a private placement. UBS acted as sole bookrunner on the selldown, which is expected to be completed on Monday, Galaxy said yesterday. Permira sold the latest stake before the end of the 90-day lock-up after its last sale in August in part because it received Galaxy’s consent, Damien Brosnan of UBS, the sole underwriter of the deal, told the Financial Times. A sizeable global asset manager who was already a shareholder in Galaxy expressed interest in buying a large portion of the deal, he said. With Bloomberg/Reuters
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November 9, 2012 business daily | 5
MACAU Creative industries funding soars Funding from the Cultural Affairs Bureau for Macau projects on art and creative industries increased by 30 percent to 39 million patacas (US$4.88 million) in the first 10 months this year, according to a statement released by the bureau yesterday. The number of funded projects doubled to 1,174 comparing to the January-October period last year. The bureau also promised to complete within this year the legal procedures in setting up a government-backed fund for the cultural industries, open only to Macau-registered companies.
Audit body says it stands by damning education report Education bureau must abide by principle of proper resource allocation, says watchdog Stephanie Lai
sw.lai@macaubusinessdaily.com
T
here has been no misunderstanding with the Education and Youth Affairs Bureau over course approval standards and procedures, the Audit Commission said yesterday in reference to a damning report it released on the government’s continuing education scheme. “Auditors have read through documents provided by the Education and Youth Affairs Bureau, gone through several discussions with the bureau’s chiefs
and conducted on-the-spot checks, which makes the report fully grounded,” the commission’s press release said. Yesterday’s announcement also reminds the bureau to “assure proper use of resources”. The announcement by the commission was made in a response to a bureau press conference on Tuesday during which it defended the continuing education scheme. Up to the end of August, more than 73,000 residents have enrolled
MUST plans for campus expansion
MUST plans to build more academic units and student lodgings (Photo: Diamantino Santos)
I
n the coming two years, the Macau University of Science and Technology (MUST) will be looking to expand its teaching space and student lodgings in its unused 70,000 square metres of campus area, university deputy rector Tong Ka Lok told media. In 2008 the government granted to the university foundation, without an open tender, two plots of land with 145,600 square metres, after the institution handed back 84,899 square meters of land for the construction of the City of Dreams resort and public roads. With the land swap deal achieved, the university’s campus in Taipa’s Avenida Wai Long has been expanded to 212,046 square metres. As the expansion plan goes, there will be one or two academic buildings built on the unused land, providing 50-60 classrooms and laboratories, as well as more student
lodgings, Mr Tong noted. The official was speaking during the presentation of the university’s 2010-2011 review report, on Wednesday. The report shows that nonresident students – most of which from mainland China – took up almost half (about 46 percent) of the university’s 10,393 students. Macau City University is also looking for a campus expansion for accommodating an expected rise in the number of students. The Land, Public Works and Transport Bureau confirmed to Business Daily in September that it had turned down a university request for the concession of a Hac Sa plot. Hengqin is now the most likely possible choice for land application, school board chairman and legislator Chan Meng Kam told media last month. S.L.
to participate in the three-year continuing education scheme launched last year. The Audit Commission said there were inconsistencies in the way the bureau devised its standards to approve courses and in course charges. The commission said the bureau’s explanation of evaluation standards for course charges had changed after the preliminary report was released and differed from what had been told during the inquiry.
“We mainly hope that the bureau can abide by its existing approval regulations and avoid having verbal instructions to substitute written guidelines,” the commission said. The report said the flawed course approvals could cost the government up to 108.5 million patacas (US$13.6 million) for the period from July last year to July this year. By the time the audit was finished in May, the bureau had contributed 22 million patacas for the continuing education scheme.
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business daily November 9, 2012
macau
Gas suppliers reject profiteering claims
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Growing regional trade The evolution of external trade has shown that Macau is increasingly dependent on the Greater China market. Markets in the mainland and Hong Kong are now the main destinations and sources of trade. This marked shift indicates that the Macau economy has become increasingly integrated into the mainland economy.
Critics want government intervention to better regulate pricing of liquefied petroleum gas Tony Lai
tony.lai@macaubusinessdaily.com
reviews in Hong Kong, the main import source of Macau’s LPG. The price increases have drawn criticism from a neighbourhood association in Ilha Verde and the Macau Association for the Promotion of People’s Livelihood, which petitioned the government on Wednesday. Both groups have accused suppliers of manipulating prices and slammed the government for a lack of supervision.
Price manipulation Exports to China and Hong Kong have more than doubled since 2008, with these two markets combined now accounting for 67.2 percent of exports. Both trading partners account for about 44 percent of imports. The combined share has even decreased from 49.5 percent in 2008, pointing to some diversification of market sources. The mainland’s share of exports has risen moderately since 2008, when it stood at less than 12.3 percent. The corresponding value for the first three quarters of this year is about 16 percent. In the case of imports, the share is much bigger but the trend moves in the opposite direction. The share in the total of exports fell abruptly in 2008 and 2009, from 39.3 percent to 31.3 percent. Since then, it has hovered around that value. Hong Kong displays a reverse pattern, as it is much more important export destination. Its share of exports rose from 19.7 percent in 2008 to more than half. The turning point is, again, 2009, when its share jumped to 39.3 percent of total exports, from just 19.7 percent the year before. The share of imports has varied little, staying at around 11 percent. J.I.D.
The cost of a 13.5-kg cylinder of liquefied petroleum gas for household use has increased again this month
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ikes in household fuel costs have been caused by fluctuations in the price of gas imports from Hong Kong and not profiteering, the president of the Macau Fuel Industry Association said yesterday. “The charges that we manipulate prices and monopolise the market are unsound and unfounded. We are also helpless against the changes in the pricing level set in Hong Kong,” the president of the Macau Fuel Industry Association, Lai Weng Wa, told Business Daily. The association represents the city’s dealers of liquefied petroleum gas and other fuel products. Mr Lai owns Kuong Tai Hong Fuel Co, a gas supplier. Suppliers raised the price of LPG by 3.95 patacas a kg (US$0.49) at the start of the month, representing a rise of between 53 patacas and 200 patacas for a standard 13.5-
kg cylinder. The cost of LPG has increased by 3.50 patacas a kg this year after rises in February, May and this month. Prices fell by 2.95 patacas in August. Mr Lai said price adjustments were the result of quarterly pricing
MOP53
Increase in the price of a standard cylinder of 13.5 kilos
Mr Lai said there was nothing wrong with pricing levels. “We’re following Hong Kong’s example and an official from there recently said he sees no problems with what fuel suppliers do,” said Mr Lai. “So, I don’t see anything wrong here either.” Mr Lai was referring to Hong Kong’s Secretary for the Environment Wong Kam Sing, who told the Legislative Council last month that the government had found no irregularities in LPG pricing, the Apple Daily newspaper reported. Cheng Chong Fai, president of the Public Utilities Concern Association of Macau, says the government should establish a mechanism to better regulate the market. “The government should forget the concept of ‘big market, small government’ particularly in industries closely related to the public’s well being,” Mr Cheng told Business Daily. “It is too easy to manipulate prices in a city like Macau.” The activist has proposed that the government establish a ceiling for gas prices, with suppliers required to justify to the government any reason for exceeding such a cap. Mr Cheng also wants to improve transparency in the gas supply industry.
November 9, 2012 business daily | 7
MACAU
Unpaid salaries have casino contractors in legal limbo Trade union demands changes to law, urges gaming operators to show more leadership caring for their construction teams Tony Lai
tony.lai@macaubusinessdaily.com
O
ne year after completing their jobs on the Sands Cotai Central site, a group of 30 construction workers are claiming 1.2 million patacas (US$150,000) in unpaid wages from a subcontractor. After gaining little joy from dealing with the subcontractor and the Labour Affairs Bureau, the group has turned to the Macau Federation of Trade Unions. The federation’s vice-president, Ella Lei Cheng I, yesterday called on the government to improve its management and oversight of the city’s construction contractors. She said casinos need to display a greater sense of corporate social responsibility. The group of unpaid workers were employed from February to June last year by Full Win International Engineering Ltd, but were only paid up until late April. When the men contacted the Labour Affairs Bureau over the issue, they discovered their jobs were registered with another company, Ping Hing (Macau) Ltd.
That firm claimed it did not have enough money to settle their outstanding wages. The case was due to be heard by the Court of First Instance, with the first hearing originally scheduled for yesterday. However, Ms Lei said the hearing was cancelled because Ping Hing is bankrupt. One of the workers yesterday told reporters they had asked for help from gaming concessionaire Venetian Macau SA and the project’s main contractor, Hsin Chong Engineering (Macau) Ltd. The worker said both companies claimed they had already paid their subcontractors. Business Daily was unable to reach Ping Hing or Full Win for comment, while Hsin Chong and Venetian Macau had not replied by the time of press.
Social responsibility Trade unionist and member of the Legislative Assembly Kwan Tsui Hang said the federation was helping the workers get paid.
Construction workers are out of pocket more than a year after leaving the Cotai Central site
The federation will seek help from the Public Prosecutions Office and the police to investigate whether there was fraud in Ping Hing’s bankruptcy. Ms Kwan criticised the lack of a legal mechanism to regulate the multiple layers of subcontractors often involved in development projects. “Howcanthedeveloper[HsinChong] and the company [Venetian Macau] arrange them to work but not take up any responsibility in this issue?” she said. The union wants a legal framework that holds the main contractor accountable for any disputes or unpaid wages involving subcontractors.
“Our government takes a very weak stance in this issue and it is powerless towards the business sector and the [construction] industry,” she said. The union has also sought heavier penalties for employers that cannot pay their workers. She also wanted casino operators to meet their social responsibilities. “They could set up a mechanism on their own or ask the main contractor to oversee subcontractors,” she said. Ms Kwan said operators can help ensure the workers’ rights but “the problem is whether they are willing to do so”.
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business daily November 9, 2012
GREAT CHINA
Hu Jintao addressed the Communist Party congress that is holding a once-in-a-decade power transfer
Beijing to deepen economic reforms China starts leadership transfer as Communist leaders meet
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resident Hu Jintao said China must double per-capita income by 2020, setting a target for the incoming generation of leaders to be unveiled at the close of a Communist Party Congress that started yesterday. In one of his final public appearances before handing over to Xi Jinping, designated as the party’s next general secretary, Mr Hu called for a deeper financial overhaul and more local-level democracy. Speaking about six weeks after ex-Chongqing party chief Bo Xilai was ousted from the party, Mr Hu told delegates to the 18th party congress they must “unswervingly” fight corruption. The make-up of the new Politburo Standing Committee, the top body whose members will be announced just after the end of the congress, may give clues to China’s appetite for policy
shifts the World Bank says it must embrace to become a high-income economy. The reform agenda ranges from breaking up state monopolies to deregulating lending rates and ending under- pricing of natural resources. “There’s no luxury to delay these reforms,” said Ding Shuang, senior economist for China at Citigroup Inc. in Hong Kong, who previously worked at China’s central bank. “The past 10 years, the economy has benefited from changes made in previous periods. Now, those dividends are used up,” he said, referring to the country’s 2001 entry to the World Trade Organization and market reforms in the 1980s and 1990s.
Hu’s replacement Yesterday’s congress began amid signs that the world’s second- biggest
economy is recovering from a sevenquarter slowdown. Mr Hu said the non-state sector needed to have “equal access to factors of production.” China had to strengthen its ability to innovate, advance urbanisation and boost domestic demand, he said. Economic development remains “unbalanced, uncoordinated and unsustainable,” and China’s leaders must “work harder” to solve those problems, the president said. Mr Hu’s goals, set against benchmarks from 2010, reinforce earlier party growth targets. China was ranked 121st in gross national per capita income for 2010 by the World Bank, at US$4,260, close to Jordan and Thailand and less than 1/10 of the U.S.’s US$47,140. “This should be in real terms, and implies GDP growth of 7 percent during 2013-20, more or less in line
with the targets set before,” Ding said in an e-mail of the GDP growth goal. While that “seems an achievable target,” doubling per-capita income is “more challenging” with a growing population, he said. China’s current five-year plan, which runs from 2011 through 2015, sets a goal of raising urban per-capita disposable income to 26,810 yuan (US$4,294) from 19,109 yuan in 2010, with annual growth exceeding 7 percent a year. Growth at the same rate from 2016 through 2020 would achieve Mr Hu’s goal.
Opening ceremony At the opening ceremony of the congress, Mr Hu walked onto the stage in China’s Great Hall of the People with his predecessor, Jiang Zemin, 86,
EU steps up solar power trade battle Starts probing alleged subsidies to Chinese manufacturers
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he European Union launched an investigation yesterday into alleged state subsidies for Chinese solar panel manufacturers, intensifying a trade war between the two centred on the multi-billion dollar solar power market. The EU’s executive body is already studying Chinese “dumping” of solar panels, or deliberately selling products for less abroad than at home or at less than cost. It is the largest import sector it has ever targeted for such investigation. The latest subsidy case followed a complaint by the EU ProSun group of 25 European solar panel companies led by Germany’s SolarWorld AG, the same group that had complained of dumping. EU Prosun says subsidies from Beijing made available only to local firms have stimulated production
there to more than 20 times Chinese consumption and close to double global demand, and averted local bankruptcies. Over the past week, China has lodged a complaint with the World Trade Organization alleging Italy and Greece have illegally promoted domestic panel producers and warned it could put tariffs on EU exports of the raw material polysilicon. The EU is China’s biggest trade partner. For the bloc, China is second only to the United States. However, relations have been tense, with EU Trade Commissioner Karel De Gucht complaining China subsidises “nearly everything”. EU ProSun says Chinese solar panel makers have benefited from very low interest rates thanks to government policy, and if loans cannot be paid back they might be
written off, extended indefinitely or paid off by governmentcontrolled entities. Chinese companies sold about 21 billion euros (US$26.8 billion) of solar panels and components to the EU in 2011 - about 60 percent of all Chinese exports of the products and some 7 percent of all Chinese exports to the EU.
Cost advantages Chinese producers include Yingli Green Energy, Suntech Power Holdings Co Ltd and Trina Solar Ltd. Trina says Chinese solar companies’ cost advantages are due to their high levels of manufacturing leading to economies of scale, rather than any state subsidy. While it produces photovoltaic modules at levels of over 1000 MW,
EU ProSun says Chinese solar panel makers have benefited from very low interest rates
many European manufacturers produce only in smaller levels of several hundred megawatts, it says. EU ProSun says Chinese producers have reached a market share of more than 80 percent in Europe with the help of export subsidies, while a string of European solar companies, including former bellwether Q-Cells, have filed for insolvency. Western solar firms have been at odds with their Chinese counterparts
November 9, 2012 business daily | 9
GREAT CHINA who served as general secretary from 1989 through 2002. Mr Hu spoke of the progress China’s economy had made under his tenure. The last year has been roiled by the ouster of Mr Bo, the charismatic political leader once seen as a possible candidate for the Standing Committee who is expected to face charges over his alleged role in the murder of a British businessman. His wife was sentenced to death with a two-year reprieve in August for killing Neil Heywood. “Combating corruption and promoting political integrity, which is a major political issue of great concern to the people, is a clear-cut
KEY POINTS China to make its currency more market-based GDP on track to double in size by 2020 Hu vows to boost overseas investments President calls for more local-level democracy
and long-term political commitment of the Party,” Mr Hu said. “If we fail to handle this issue well, it could prove fatal to the Party, and even cause the collapse of the Party and the fall of the state.”
General secretary Mr Xi is forecast to replace Mr Hu as general secretary of the 82 million-member party. Vice Premier Li Keqiang is seen taking Premier Wen Jiabao’s spot on the Standing Committee, setting him up to replace Mr Wen next March. The new Standing Committee will be announced shortly after the congress concludes on November 14. The more than 2,000 delegates to the 18th congress, drawn from the central government, military, state-owned companies and China’s provinces, will approve changes to the party’s constitution and pick the next central committee, a group of about 200 people from whose ranks comes the Politburo, now with 24 people, and its standing committee, now with nine
for years, alleging they receive lavish credit lines to offer modules at cheaper prices. The EU imported goods from China worth a total of 292 billion euros last year. Imports of Chinese products subject to trade defence duties total less than one percent of that amount. The United States late on Wednesday gave final approval to duties on billions of dollars of solar-energy products from China for five years. While anti-dumping investigations and duties are relatively common, those concerning subsidies are not, because proving a ‘financial benefit’ from a government or public body can be harder and because anti-subsidy duties are typically lower. Politically, subsidies are more sensitive because the investigation targets a country rather than just its industry. The EU Commission can impose provisional duties within nine months. EU member states have within 13 months of the investigation’s launch to impose definitive duties for up to five years. Reuters
men. The standing committee wields supreme power in China. Analysts who follow China’s politics say that the Politburo Standing Committee will shrink from nine to seven members, reverting to its size from before 2002. Roderick MacFarquhar and Tony Saich of Harvard University, as well as Huang Jing of the National University of Singapore, say that in addition to Mr Xi and Mr Li, the standing committee may include Vice Premiers Zhang Dejiang and Wang Qishan, Tianjin party secretary Zhang Gaoli, Shanghai party leader Yu Zhengsheng and propaganda minister Liu Yunshan. Zhang Dejiang, who oversees stateowned companies as vice premier, is an economics graduate of Kim Il Sung University in Pyongyang. Zhang Gaoli presided over a surge in debt-fuelled growth in Tianjin, almost twice the size of Delaware. Liu Yunshan oversaw media controls and Yu Zhengsheng is an engineer whose time in Beijing was spent in the construction ministry.
Standing Committee One potential candidate for the Standing Committee earlier this year was Bo Xilai, the Chongqing party boss who was fired in March and later removed from the Politburo. He was expelled from the party after his wife was convicted in August of murdering a British businessman. Wang Qishan, China’s top official for international finance for the past five years and U.S. Treasury Secretary Timothy F. Geithner’s counterpart, may not have a position overseeing the economy. He may run the party’s anti-corruption and discipline work, according to Saich and Huang, both of whom said their forecasts were based on discussions with party officials. Zhang Gaoli might take the role of executive vice premier, working with Li Keqiang to oversee China’s $7.3 trillion economy, they said. “Zhang instead of Wang as executive vice premier would have to be considered a setback for muchneeded reform in the financial sector,” said Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington and author of “Sustaining China’s Economic Growth After the Global Financial Crisis.”
New leaders may speed up policy moves But changes will have to overcome opposition
A total of 2,270 delegates were selected to attend this year’s congress
C
hina grew at an average annual rate of 10.6 percent during Hu Jintao’s tenure as general secretary from 2002 through 2011. Its economy is roughly half the size of the U.S. economy. China’s GDP may exceed that of the U.S. by 2020, Standard Chartered Plc economists forecast in 2010. HSBC Holdings Plc economists led by Qu Hongbin, the chief economist for China, said in a report that the new leadership may liberalise interest rates, move toward more bond financing and away from bank lending, and push to make the yuan convertible within five years. “There are clear signs that China’s new leaders, who will take power in early 2013, will make speeding up reform top of their policy agenda in the coming years,” the HSBC report said. To do that, they must overcome opposition from beneficiaries of the status quo. They include local governments and state-owned enterprises that enjoy preferential financing, and wealthy property owners and real estate developers who may oppose measures such as property taxes that would free up local governments from relying on land sales for revenue. China’s statistics chief said people will be “more confident” about the nation’s fourth-quarter economic growth when October data are
released today. Ma Jiantang, who spoke to reporters at the Great Hall of the People in Beijing yesterday, didn’t elaborate. Yi Gang, deputy governor of the central bank, said fourthquarter economic performance will be “relatively good”. Services industries rebounded from the weakest expansion in at least 19 months, an official purchasing managers’ survey showed on November 3 and two separate reports showed a pickup in manufacturing. “The new leadership will see to it that the economy will not deteriorate further,” Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd in Hong Kong, said in a research note this week. “We expect slightly better growth from the data, amid infrastructure spending from the fiscal boost, and a more resilient consumption sector, but maintain that a recovery will be mild.” Any policy moves will have to wait for the new leadership under Xi Jinping to consolidate its power, said Tao Dong, head of Asia economics excluding Japan at Credit Suisse Group AG in Hong Kong. “If the markets hope that structural changes could take place soon after March next year, when the new administration comes in, my advice is ‘don’t hold your breath,’” he said. Bloomberg
Bloomberg
Lenovo shakes off PC industry gloom Q2 report reveals high earnings, record market share
L
enovo Group Ltd boosted second-quarter profit 13 percent as it expanded market share to overtake Hewlett-Packard Co. in personal-computer shipments. Net income climbed to US$162 million in the three months ended September 30 from US$143.9 million a year earlier, Lenovo said in a statement yesterday. Chief executive Yang Yuanqing achieved his goal of building the Chinese company into the world’s largest PC maker last quarter as it accounted for 15.7 percent of global PC shipments, overtaking Hewlett-Packard’s 15.5 percent, market-research firm Gartner Inc. said last month. Mr Yang has set a goal of extending that dominance to smartphones. The company’s unit that makes mobile devices almost tripled sales through
the first six months of this year. “We’re positive on their development in smartphones,” Christine Wang, a Taipei-based analyst at Daiwa Capital Markets, said. “Lenovo will outperform the PC industry, but it’s still slowing down. So if the company can deliver performance on the smartphone side, that is pretty good.” Revenue at Lenovo, whose headquarters are in Beijing and Morrisville, North Carolina, rose 11 percent to US$8.67 billion from US$7.79 billion. Lenovo’s shares pared declines in Hong Kong trading and were down 2.6 percent to close at HK$6.58, after falling as much as 3.9 percent prior to the announcement. The stock has climbed 28 percent this year, surpassing the 18 percent gain for the
city’s benchmark Hang Seng Index. Lenovo, which bought the PC division of International Business Machines Corp. in 2005, used acquisitions to help boost sales in the past year. The company bought control of Medion AG, an Essen, Germany-based computer maker, and the PC unit of Tokyo-based NEC Corp. in 2011. The PC maker is stepping up development of smartphones, tablets and Internet-ready televisions to widen its product line for consumers, following Apple Inc. and Samsung Electronics Co. The company’s mobile Internet and digital home unit that makes smartphones boosted sales to US$1.31 billion during the first six months of 2012 from US$496.7 million a year earlier. Reuters
10 |
business daily November 9, 2012
ASIA
Singh’s US$1 tln road plan boosted by new funds Govt expects global flows into the Indian infrastructure market Anurag Joshi and Anoop Agrawal
T
he first Indian funds investing in road, rail and power plant bonds will generate returns at least two percentage points higher than corporate notes, according to the country’s biggest underwriter. India Infrastructure Finance Co. said it’s targeting a fund soon after the markets regulator Securities & Exchange Board of India, or SEBI, approves the plan, and L&T Infrastructure Finance Co. is exploring the new investments. Returns will be higher because of the longer maturities and increased risk of such projects, according to Nilesh Shah, president for investment banking at Axis Bank Ltd, the top arranger of rupee- denominated corporate bonds this year. “Infrastructure development funds are one way of bringing global flows into the Indian infrastructure market,” Shah said in an interview from Mumbai on November 6. “The attractiveness would only improve once the process gets under way.” Prime Minister Manmohan Singh is offering tax breaks to encourage foreign participation in the funds, targeting private investment for half of the US$1 trillion in projects planned over five years. Yields on India’s 10year rupee-denominated company bonds, at about 8.99 percent, are already the highest in Asia, data
compiled by Bloomberg show. They compare with an average of 3.6 percent for local-currency debt in the region, according to indexes compiled by HSBC Holdings Plc.
Road, rail networks The finance ministry estimates that underdeveloped infrastructure shaves 2 percentage points off India’s economic growth annually. Central bank Governor Duvvuri Subbarao last week cut forecasts for economic growth in the year through March to 5.8 percent, the least since 2003, from 6.5 percent. Economic Affairs Secretary Arvind Mayaram, and Prashant Saran, a member of regulator SEBI, will be speaking at the India Infrastructure Investment Forum conference today. Delegates will discuss progress in developing guidelines for the funds and participation of local and international investors. “Committed action on the reforms by the government will lead to a favourable environment for investors to invest in infrastructure,” S. Nandakumar, senior director at India Ratings & Research, the local unit of Fitch Ratings Ltd, and another speaker at the conference, said. “Yields on Indian infrastructure debt will be higher than what investors will earn in developed and in many other
emerging markets.” New Delhi-based India Infrastructure Finance, a state-owned transport lender, plans to start a rupeedenominated debt fund soon after SEBI’s approval, chief general manager E. Sankara Rao said in September. The lender will identify projects to be funded after receiving the permission, Mr Rao said. India has the world’s secondlargest road network, covering 3.3 million kilometres (2 million miles), and the third-biggest rail network spanning 65,000 kilometres, government data show. Road investment may rise to US$145 billion in the five years to 2017 from about US$69.8 billion in the prior five-year period, according to a PricewaterhouseCoopers LLP study. By 2020, India’s railroad operator plans to invest 14 trillion rupees (US$258 billion) to add capacity and modernise its network. Power Grid Corp. of India Ltd, the nation’s largest electricity-generation company by market value, plans to raise US$500 million by December 15, Finance Director R.T. Agarwal said earlier this week.
Relaxing rules Finance Minister Palaniappan Chidambaram said on October
Kingfisher Airlines’ losses widen Adds to fears about the future of the embattled carrier suppliers, lenders and employees. It has the smallest market share among Indian airlines at 3.5 percent, after being the secondlargest among the country’s six major carriers at its peak. The problems of Kingfisher are the worst among India’s private carriers, partly due to overly rapid expansion, while the government is reviving state-run Air India with a nearly US$6 billion bailout. The Centre for Asia Pacific Aviation, a Sydney-based consultancy, in a recent report said Kingfisher’s debt was US$2.49 billion including bank debts of US$1.1 billion, and it had accumulated losses of US$1.9 billion. The airline’s licence has been suspended after strikes led to the cancellation of hundreds of flights
I
ndia’s troubled Kingfisher Airlines Ltd, which has been grounded since October, posted a record second-quarter loss yesterday as revenues crashed, intensifying concerns about the carrier’s future. Kingfisher said it saw a net loss of 7.54 billion rupees (US$139 million) for its fiscal second quarter, against 4.69 billion rupees in the same period a year earlier. Revenues dived 87 percent to 2 billion rupees, the debt-laden airline said. The Directorate-General of Civil
Aviation, the airline industry’s regulator, suspended Kingfisher’s licence last month until it comes up with a “viable” revival plan. The airline said it was “preparing a comprehensive plan for a re-start of operations”, which it would share with the regulator and bankers. “We expect to resume operations in the near future,” it said. Kingfisher has been struggling to survive after staff strikes over unpaid salaries, while it owes billions of dollars in taxes and payments to
Capital raising
1 that plans to introduce infrastructure debt funds will go to cabinet and the Insurance Regulatory and Development Authority will consider relaxing rules to allow insurance companies to invest in rupee-denominated bonds rated below AAA. “Infrastructure debt funds are an opportunity to lighten banks’ exposure to roads and the power sector so that they can lend to more new projects,” Suneet Maheshwari, Mumbai-based chief executive officer at L&T Infrastructure Finance, said. The company targets to put plans in place for setting up the funds early
about five weeks ago, needs to raise new funds this month, Mr Chaudhuri said, without saying how much. He declined to give a timeframe for when the Bangalore-based company needs the full US$1 billion. Mr Mallya has spent about a year trying to sell a stake in Kingfisher as he seeks funds to ease an 86 billion-rupee debt pile. The carrier, whose market value has slumped to US$190 million, is also working on a turnaround plan as it seeks to persuade regulators to re-activate its suspended licence. “Until they restructure, nobody will be interested in Kingfisher,” said Jasdeep Walia, an analyst at Kotak Securities Ltd in Mumbai. “Everything the airline owns is locked away as collaterals for loans.” Kingfisher said that it was in the process of preparing a restructuring plan and would be submitting it to the authorities as well as to its lenders. “The airline is in discussion with various stakeholders to ensure that there are no future disruptions,” it said in a statement. AFP/Bloomberg
Kingfisher’s largest lender said the cash-strapped Indian carrier should raise at least US$1 billion of fresh capital, stepping up pressure on chairman Vijay Mallya to deliver on promises of new investment. “We are slightly disappointed at the pace at which the capital-raising plan is going,” State Bank of India chairman Pratip Chaudhuri told reporters in Gurgaon, near New Delhi, yesterday. “The company has been assuring us that they have been working hard for it, but we would like to see some tangible evidence.” Kingfisher, which halted flights
US$139 million
Kingfisher’s losses in the third quarter
November 9, 2012 business daily | 11
ASIA
Hyundai, Kia face U.S. lawsuit
A
India has the world’s third-largest rail network spanning 65,000 kilometres
next quarter, he said. Overseas buyers utilised US$37 billion out of the US$60 billion limit on foreign investments in rupee debt as of October 15, according to the regulator. Foreigners can invest as much as US$25 billion in infrastructure bonds, of which US$10 billion can go into the funds, a SEBI statement on June 26 said. “Infrastructure debt funds will bring committed flows to the sector and will become an attractive proposition for an investor in the long-run,” D.K. Aggarwal, chairman of SMC Investments & Advisors Ltd, said. Bloomberg
U.S. lawsuit has been filed against Hyundai Motor Co and affiliate Kia Motors Corp, seeking US$775 million in damages in one of the biggest known actions against the automakers since they admitted overstating the fuel economy of some their vehicles. The South Korea carmakers conceded last Friday that they had overstated the fuel efficiency ratings on more than 1 million recently sold vehicles in the United States and Canada, and agreed to compensate owners for the additional fuel costs. The lawsuit, which seeks classaction status, was filed in the U.S. District Court for Central California on behalf of 23 Hyundai and Kia car owners and challenges the automakers’ compensation plan. Under the plan, customers will receive a debit card that will reimburse them for the difference in fuel economy, and an extra 15 percent to the amount will be added
to acknowledge the inconvenience. The lawsuit, which like a separate one filed in the Southern District of Ohio this week, is seeking further compensation for the reduced value of their vehicles. Hyundai Motor was also sued in July by public interest group Consumer Watchdog for allegedly misleading consumers sensitive to high gas prices that its popular 2011 and 2012 Elantra model is more fuel efficient than it actually is. A Hyundai Motor spokesman declined to comment on the lawsuits. Moody’s Investors Service has estimated that the automakers’ compensation plan for fuel costs will cost them US$100 million a year until the cars are scrapped but has not estimated potential legal costs. Hyundai shares have lost 7 percent since rumours of lawsuits first emerged late last week, while Kia’s stock has lost 5 percent since. Reuters
KEY POINTS US$1 trillion in projects planned Govt targets private investment Offers tax breaks to attract foreign capital Underdeveloped infrastructure weighs on economic growth
Hyundai and Kia were sued for exaggerated mileage claims
Australia to further deregulate power markets In bid to attract more investment and turn to cleaner energy
A
ustralia’s government will lead a new push to deregulate statebased electricity markets and prices and cut red tape to make the energy sector more attractive to muchneeded investment, Energy Minister Martin Ferguson said yesterday. Releasing an energy white paper, Mr Ferguson said the government would also encourage states to transform to cleaner energy and to do more to develop gas, including coal seam gas, for both export and domestic consumption. He said Australia had sufficient gas to meet both export and domestic demand until 2035, but with a tightening of market along the more populous east coast. But Mr Ferguson rejected any push to quarantine gas production for domestic use. “Intervention such as reservation policies to force price or supply outcomes are more likely to impede rather than promote supply,” Mr Ferguson said in a business speech to launch the white paper. Australia’s US$50 billion coal seam gas to liquefied natural gas (LNG) export industry has sparked calls for gas to be reserved for domestic use due to fears that demand from energy-hungry Asian buyers will push up Australian gas prices. The much less populous state of Western Australia does have such a policy, but Mr Ferguson said he did
not support a similar policy being implemented in the eastern states. While state and federal governments needed to work harder to remove impediments to gas developments, companies themselves needed to ensure enough gas is kept for domestic use, he said. “It is also incumbent on the gas industry itself to maintain a balanced supply for both the domestic and export markets,” he said. Australia’s main oil and gas body said the white paper sent an important message to investors, that the government recognised the need for a market-based approach to developing gas resources. “It is important that gas is seen no differently to other major export commodities such as iron ore, coal and wheat in that the benefits associated with development are maximised through links to international markets,” Australian Petroleum Production and Exploration Association chief executive David Byers said. He said Australia had reserves of about 819 trillion cubic feet of natural gas, with 1 trillion cubic feet enough to power a city of 1 million people for 20 years. The white paper sets out the government’s long-term strategic policy for the energy sector as Australia moves to cleaner energy and away from a reliance on coal
Canberra tries to move away from a reliance on coal for electricity
for domestic electricity. Mr Ferguson has said Australia was chasing about A$500 billion of investment to modernise its energy, electricity and gas generation, transmission and distribution sectors by 2030, although high production
costs and lower commodity prices are making more difficult for investors. He said Australia had A$270 billion worth of committed projects on its books, with a further A$230 billion worth of projects not yet committed. Reuters
12 |
business daily November 9, 2012
MARKETS Hang SENG INDEX NAME
NAME
PRICE
DAY %
VOLUME
12.14
-1.938611
23769034
9.98
-1.577909
6810196
CLP HLDGS LTD
66.05
-0.9745127
2919485
CNOOC LTD
16.08
-3.015682
42359026
10.8
-2.527076
4305594
PRICE
DAY %
VOLUME
AIA GROUP LTD
30.7
-1.286174
23109674
CHINA UNICOM HON
ALUMINUM CORP-H
3.42
-3.116147
16828771
CITIC PACIFIC
BANK OF CHINA-H
3.17
-2.461538
396461157
BANK OF COMMUN-H
5.52
-3.157895
30413484
BANK EAST ASIA
29.2
-1.517707
1168658
COSCO PAC LTD
NAME POWER ASSETS HOL SANDS CHINA LTD
PRICE
DAY %
66.75
-1.621223
VOLUME 1885893
30.5
-2.866242
10972504 8292763
SINO LAND CO
13.44
-1.754386
SUN HUNG KAI PRO
111.9
-1.061008
5782292
SWIRE PACIFIC-A
92.15
-2.020202
1358670
TENCENT HOLDINGS
3009108
BELLE INTERNATIO
14.18
-3.668478
15715171
ESPRIT HLDGS
11.24
-2.090592
13035718
270.6
-1.814224
BOC HONG KONG HO
23.75
-1.041667
12595612
HANG LUNG PROPER
27.45
-2.486679
4163988
TINGYI HLDG CO
22.8
0.4405286
8176612
CATHAY PAC AIR
13.94
-2.653631
3271334
HANG SENG BK
117.9
-1.338912
1153823
WANT WANT CHINA
10.8
-2.702703
18996757
CHEUNG KONG
113.5
-2.239449
6129412
WHARF HLDG
53.7
-2.363636
2970675
7.76
-4.197531
43230472
CHINA COAL ENE-H CHINA CONST BA-H
53.4
-2.997275
6401103
HENGAN INTL
HENDERSON LAND D
71.85
1.054852
6496392
HONG KG CHINA GS
20.35
-1.690821
3640367
HONG KONG EXCHNG
127.1
-3.785011
8528549
74.9
-2.727273
19253808
77.35
-2.826633
9295427
5.08
-2.495202
256742013
5.8
-3.171953
314386914
CHINA LIFE INS-H
23.1
-2.736842
38227972
CHINA MERCHANT
24.6
-1.006036
3939073
87.15
-2.680067
23303872
HUTCHISON WHAMPO
21
-2.325581
20012467
IND & COMM BK-H
CHINA PETROLEU-H
8.19
-1.680672
69940661
LI & FUNG LTD
12.82
-3.463855
20566702
CHINA RES ENTERP
25.6
-2.661597
4467723
MTR CORP
29.65
-1.001669
2072263
CHINA MOBILE CHINA OVERSEAS
HSBC HLDGS PLC
MOVERS
47
0 22100
INDEX 21566.91 HIGH
22099.85
LOW
21564.25
17.7
-3.804348
14491347
NEW WORLD DEV
12.34
-3.139717
18811907
52W (H) 22149.69922
CHINA RES POWER
16.34
-1.566265
2893343
PETROCHINA CO-H
10.36
-2.996255
83082826
(L) 17613.19922
CHINA SHENHUA-H
32.05
-3.31825
21357469
PING AN INSURA-H
61.35
-1.996805
11626142
CHINA RES LAND
2
21560
6-November
8-November
Hang SENG CHINA ENTErPRISE INDEX NAME
PRICE
DAY %
VOLUME
CHINA PACIFIC-H
24.5
-2.777778
6168805
10488300
CHINA PETROLEU-H
8.19
-1.680672
69940661
ZIJIN MINING-H
-3.116147
16828771
CHINA RAIL CN-H
8.3
0.973236
19185440
26.8
-3.249097
15711307
CHINA RAIL GR-H
4.26
2.158273
53860284
3.17
-2.461538
396461157
CHINA SHENHUA-H
32.05
-3.31825
21357469
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.38
-1.744186
101912929
AIR CHINA LTD-H
5.21
-2.251407
ALUMINUM CORP-H
3.42
ANHUI CONCH-H BANK OF CHINA-H
NAME
5.52
-3.157895
30413484
CHINA TELECOM-H
4.26
-3.61991
66088900
18.14
-6.301653
6907926
DONGFENG MOTOR-H
9.73
-3.853755
36407406
CHINA CITIC BK-H
3.95
-2.469136
46770700
GUANGZHOU AUTO-H
5.25
-3.669725
4943570
CHINA COAL ENE-H
7.76
-4.197531
43230472
HUANENG POWER-H
6.09
-0.6525285
9177440
CHINA COM CONS-H
7.21
-2.303523
14928365
IND & COMM BK-H
5.08
-2.495202
256742013
CHINA CONST BA-H
5.8
-3.171953
314386914
JIANGXI COPPER-H
19.98
-3.009709
9575137
CHINA COSCO HO-H
3.79
-5.721393
36710950
PETROCHINA CO-H
10.36
-2.996255
83082826
CHINA LIFE INS-H
23.1
-2.736842
38227972
PICC PROPERTY &
10.06
-2.140078
21470089
CHINA LONGYUAN-H
5.12
-0.967118
5358000
PING AN INSURA-H
61.35
-1.996805
11626142
CHINA MERCH BK-H
14.24
-2.331962
14186813
SHANDONG WEIG-H
10.4
-4.411765
6958400
BANK OF COMMUN-H BYD CO LTD-H
NAME
PRICE
DAY %
VOLUME
11.96
-3.548387
46272973
3.19
-2.446483
62933979
ZOOMLION HEAVY-H
10.46
-2.059925
14488086
ZTE CORP-H
11.46
-4.020101
7628354
YANZHOU COAL-H
MOVERS
39
0 10825
INDEX 10527.13 HIGH
10821.25
LOW
10522.64
CHINA MINSHENG-H
7.33
-2.396804
33943900
SINOPHARM-H
26.05
-2.067669
1299185
52W (H) 11916.1
CHINA NATL BDG-H
10.32
-3.551402
40353932
TSINGTAO BREW-H
42.45
-1.393728
791125
(L) 8987.76
14.2
-0.5602241
8450030
WEICHAI POWER-H
29.1
-5.365854
2420144
CHINA OILFIELD-H
1
10515
6-November
8-November
Shanghai Shenzhen CSI 300 NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
CSR CORP LTD -A
4.48
0
42380562
SHANDONG DONG-A
40.28
-0.2229378
2623874
7675257
DAQIN RAILWAY -A
6.06
-1.463415
14472342
SHANDONG GOLD-MI
38.34
-1.414245
9695204
-2.263374
9494454
DATANG INTL PO-A
4.13
-1.666667
2997735
SHANG PHARM -A
10.79
-4.003559
11083927
-1.151515
8972493
EVERBRIG SEC -A
11.38
-4.208754
8478816
SHANG PUDONG-A
7.54
-1.950585
38667163
2.44
0
16215080
SHANGHAI ELECT-A
4.11
-2.836879
4224255
24987707
SHANXI LU'AN -A
17.05
-4.213483
10281963
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.57
0
51590735
AIR CHINA LTD-A
4.86
-2.21328
ALUMINUM CORP-A
4.75 16.31
ANHUI CONCH-A
NAME
BANK OF BEIJIN-A
7.1
-1.798064
12822309
GD POWER DEVEL-A
BANK OF CHINA-A
2.82
0.3558719
27154117
GF SECURITIES-A
12.43
-4.311008
NAME
BANK OF COMMUN-A
4.27
-1.385681
24341453
GREE ELECTRIC
23.01
-0.3896104
9984840
SHANXI XINGHUA-A
42.47
-1.186598
1877821
BANK OF NINGBO-A
8.88
-2.738226
7908994
GUANGHUI ENERG-A
15.46
-3.011292
16857055
SHANXI XISHAN-A
12.39
-3.579767
12920876
BAOSHAN IRON & S
4.64
-0.6423983
17921416
HAITONG SECURI-A
8.76
-3.097345
38114067
SHENZEN OVERSE-A
5.96
-0.5008347
17064634
HANGZHOU HIKVI-A
29.7
-1.883053
1815054
SICHUAN KELUN-A
54.29
0.03685277
1618746
6.68
-1.620029
24177148 1512977
BYD CO LTD -A CHINA CITIC BK-A
15.49
-4.969325
7413933
3.59
-1.912568
11335114
HENAN SHUAN-A
61.36
-0.920394
828801
SUNING APPLIAN-A
CHINA CNR CORP-A
4.02
-0.7407407
48864886
HONG YUAN SEC-A
17.45
-3.537866
10187443
TASLY PHARMAC-A
50.78
-0.5678481
CHINA COAL ENE-A
7.03
-1.95258
4506663
HUATAI SECURIT-A
8.85
-4.013015
14515604
TSINGTAO BREW-A
30.87
-1.906578
759387
CHINA CONST BA-A
4.28
0.4694836
31113093
HUAXIA BANK CO
8.51
-1.958525
18854298
WEICHAI POWER-A
19.98
-4.034582
5498404
CHINA COSCO HO-A
4.07
-3.325416
7276844
IND & COMM BK-A
3.87
-0.257732
31196232
WULIANGYE YIBIN
32.72
-1.237549
12462155
CHINA CSSC HOL-A
19.53
-2.496256
3068201
INDUSTRIAL BAN-A
12.51
-1.41844
28342746
YANGQUAN COAL -A
13.58
-3.756201
11116718
CHINA EAST AIR-A
3.29
-2.083333
21422579
INNER MONG BAO-A
32.57
-2.2509
40387790
YANTAI CHANGYU-A
43.42
-0.8222933
1632870
CHINA EVERBRIG-A
2.59
-1.520913
73025193
INNER MONG YIL-A
21.66
0.09242144
6396594
YANTAI WANHUA-A
13.56
-1.73913
4924103
CHINA INTERNAT-A
31.66
0
5003850
INNER MONGOLIA-A
5.2
-5.96745
76749738
YANZHOU COAL-A
17.48
-3.26508
2920435
CHINA LIFE INS-A
18.11
-1.307902
7109584
JIANGSU HENGRU-A
29.43
-0.9424436
1526261
YUNNAN BAIYAO-A
66.31
0.7444546
2225407
CHINA MERCH BK-A
10.18
-1.547389
18380785
JIANGSU YANGHE-A
115.39
-0.4915488
728527
ZHONGJIN GOLD
16.03
-3.024803
18548037
CHINA MERCHANT-A
9.38
-2.898551
13681796
JIANGXI COPPER-A
CHINA MERCHANT-A
21.94
-3.262787
8340673
20.9
-2.83589
6736751
ZIJIN MINING-A
3.83
-2.295918
43740829
JINDUICHENG -A
11.34
-0.5263158
9818179
ZOOMLION HEAVY-A
8.27
-3.38785
40116334
11.61
-3.811102
12360583
ZTE CORP-A
8.41
-1.752336
7967793
15666734
CHINA MINSHENG-A
6.1
-0.974026
92993651
JIZHONG ENERGY-A
CHINA NATIONAL-A
6.48
-1.219512
14101065
KANGMEI PHARMA-A
16.85
-0.1777251
CHINA OILFIELD-A
15.82
-2.043344
1727616
KWEICHOW MOUTA-A
234.1
-1.419127
1626181
CHINA PACIFIC-A
17.93
-1.591658
9020813
LUZHOU LAOJIAO-A
37.3
-1.061008
3736560
CHINA PETROLEU-A
6.3
-1.5625
9469377
METALLURGICAL-A
2.05
-2.380952
19574479
CHINA RAILWAY-A
5.09
0
16315354
NINGBO PORT CO-A
2.47
-0.4032258
13803210
CHINA RAILWAY-A
2.76
1.098901
50684884
PANGANG GROUP -A
3.62
-3.466667
42608605
8.72
-1.133787
11307299
MOVERS
14
CHINA SHENHUA-A
22.65
-2.286454
5748246
CHINA SHIPBUIL-A
4.35
-2.466368
21950226
PING AN BANK-A
13.38
-1.254613
8472817
38.61
-0.7965057
16749294
HIGH
2301.98
LOW
2245.41
CHINA SOUTHERN-A
3.44
-3.098592
33674066
CHINA STATE -A
3.12
-1.265823
43872318
POLY REAL ESTA-A
11.2
-1.754386
41577640
CHINA UNITED-A
3.53
-2.216066
42202335
QINGDAO HAIER-A
11.48
-1.964133
6996531
CHINA VANKE CO-A
8.5
-0.1175088
35165929
QINGHAI SALT-A
24.8
-3.087143
3919118
CHINA YANGTZE-A
6.43
-0.7716049
6745106
SAIC MOTOR-A
13.65
-1.372832
17047738
CITIC SECURITI-A
10.9
-2.066487
55870886
9.06
-2.265372
16608415
PRICE DAY %
Volume
SANY HEAVY INDUS
10 2310
INDEX 2245.405
PETROCHINA CO-A PING AN INSURA-A
276
52W (H) 2756.091 (L) 2172.878906
2240
6-November
8-November
FTSE TAIWAN 50 INDEX PRICE DAY %
Volume
ACER INC
23.4
-1.680672
12236678
FORMOSA PLASTIC
76.9 -0.5174644
7250898
TAIWAN MOBILE CO
ADVANCED SEMICON
22.3
0.4504505
20617512
FOXCONN TECHNOLO
103
0.9803922
5998755
TPK HOLDING CO L
ASIA CEMENT CORP
36.5 -0.4092769
2601703
FUBON FINANCIAL
31.5
-1.408451
13670743
ASUSTEK COMPUTER
312 -0.6369427
2802033
HON HAI PRECISIO
90.9
0.6644518
49887583
0.8438819
89203888
HOTAI MOTOR CO
183
-1.876676
665719
NAME
AU OPTRONICS COR
11.95
CATCHER TECH
NAME
NAME
PRICE DAY % 102 -0.4878049 415.5
Volume 3570669
2.214022
11068990
TSMC
90.5 -0.5494505
39639841
UNI-PRESIDENT
52.3
0.3838772
7716755
UNITED MICROELEC
10.6 -0.4694836
33533428
129.5
0
10177438
HTC CORP
211.5
1.438849
23813082
29.25
-2.5
6193274
CATHAY FINANCIAL
29.8
-1.487603
18356364
HUA NAN FINANCIA
15.45
-1.592357
5976256
YUANTA FINANCIAL
13.5
-2.173913
21072230
CHANG HWA BANK
14.9
-1.324503
6630524
LARGAN PRECISION
718
4.057971
3420921
YULON MOTOR CO
50.5
-2.131783
4457608
CHENG SHIN RUBBE
73.5
0.2728513
3643576
LITE-ON TECHNOLO
37.5
-0.530504
2533758
CHIMEI INNOLUX C
11.45
2.690583
105416498
317
0.6349206
10419057
6.6
-2.511078
28056185
MEGA FINANCIAL H
21.25
-1.162791
14769272
CHINA STEEL CORP
25.25 -0.9803922
14861240
NAN YA PLASTICS
51.7
-1.335878
6111283
CHINATRUST FINAN
15.85
-0.9375
34798996
PRESIDENT CHAIN
150.5
-0.660066
1111857
CHINA DEVELOPMEN
CHUNGHWA TELECOM COMPAL ELECTRON DELTA ELECT INC
MEDIATEK INC
93
0.5405405
6423263
QUANTA COMPUTER
70.4
-2.222222
7384167
18.5
-1.333333
15674923
SILICONWARE PREC
28.9
-1.365188
8676131
107.5
11.55
-0.462963
3879681
SINOPAC FINANCIA
-2.531646
12272793
FAR EASTERN NEW
30.7 -0.9677419
6123100
SYNNEX TECH INTL
57 -0.5235602
4269485
FAR EASTONE TELE
66.8 -0.4470939
8081731
TAIWAN CEMENT
38
-1.298701
7762059
FIRST FINANCIAL
16.8
-1.754386
9774153
TAIWAN COOPERATI
15.25
-1.612903
5682075
FORMOSA CHEM & F
65.8
-2.083333
8994426
TAIWAN FERTILIZE
69.9
-1.131542
3970022
FORMOSA PETROCHE
82.8
-1.895735
1974367
TAIWAN GLASS IND
26.6
-3.272727
1445856
WISTRON CORP
MOVERS
13
36
1 5115
INDEX 5110.17 HIGH
5110.17
LOW
5029.83
52W (H) 5621.53 5025
(L) 4643.05 6-November
8-November
November 9, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GALAXy ENTErTAINMENT
Max 27.85
Average 27.527
MELCo CroWN ENTErTAINMENT
Min 27.2
Last 27.35
MGM CHINA HoLDINGS
28.00
39.00
14.0
27.75
38.75
13.9
27.50
38.50
13.8
27.25
38.25
13.7
27.00
SANDS CHINA LTD
Max 38.8
Average 38.427
Min 38
Last 38.3
38.00
SJM HoLDINGS LTD
Max 13.9
Average 13.732
Min 13.66
Last 13.7
13.6
WyNN MACAU LTD
31.0
17.6
30.8
17.4
30.6
17.2
22.8 22.7 22.7
Average 30.691
Max 30.95
Min 30.45
Last 30.5
30.4
17.0 Max 17.58
Average 17.355
Commodities ENERGY
NAME
PRICE
WTI CRUDE FUTURE Dec12
85.21
0.91190205
-13.14850678
110.25
79.11999512
BRENT CRUDE FUTR Dec12
107.62
0.748923423
3.590335932
122.0999985
89.84999847
GASOLINE RBOB FUT Dec12
261.72
1.093128356
5.472717015
295.8800077
217.2600031
GAS OIL FUT (ICE) Dec12
926.75
-0.376242945
3.374233129
1040.25
798
3.538
-1.117942985
-5.829118978
4.440999985
2.90899992
HEATING OIL FUTR Dec12
DAY %
YTD %
(H) 52W
Last 17.2
22.4 Max 22.75
297.72
0.509773472
3.684613777
335.1700068
254.2500019
1720.65
-0.3146
9.952
1799.6
1522.75
Silver Spot $/Oz
31.8613
-0.9365
14.4649
37.4775
26.1513
Platinum Spot $/Oz
1544.4
-1.0368
10.7494
1736
1339.25
Palladium Spot $/Oz
609.65
-1.2393
-6.71
725.19
553.75
LME ALUMINUM 3MO ($)
1923
0.15625
-4.801980198
2361.5
1827.25
LME COPPER 3MO ($)
7605
-1.233766234
0.065789474
8765
7100.25
LME ZINC
1896
-0.184259016
2.764227642
2220
1745
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jan13 Dec12
15995
-0.497667185
-14.51095671
22150
15236
15.215
-0.032851511
-0.911755129
16.60000038
14.60000038
745.5
0.167954316
27.1641791
849
499
WHEAT FUTURE(CBT) Dec12
PRICE
(L) 52W
Gold Spot $/Oz
CORN FUTURE
Min 17.2
Average 22.526
Last 22.75
Min 22.4
CURRENCY EXCHANGE RATES
NATURAL GAS FUTR Dec12
METALS
22.5
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 %
1.0417 1.5977 0.9446 1.2769 79.96 7.983 7.7505 6.2429 54.365 30.71 1.2244 29.121 41.055 9632 83.289 1.20612 0.79918 7.9667 10.1931 102.09 1.03
-0.4206 -0.1812 -0.4658 -0.5762 0.4627 0 -0.0013 0.0112 -0.2759 -0.1303 -0.2532 0.1477 -0.1388 -0.0311 0.8837 0.1111 0.4229 0.7456 0.5926 1.0579 0
YTD %
(H) 52W
2.0374 2.7923 -0.6881 -1.4814 -3.8144 0.2079 0.2181 0.8345 -2.3912 2.7353 5.8968 3.9765 6.7836 -5.8451 -5.8315 0.8847 4.2806 2.1025 1.5589 -2.3803 0.0097
(L) 52W
1.0857 1.6309 0.9972 1.3815 84.18 8.0308 7.7979 6.3964 57.3275 32 1.315 30.5 44.35 9662 88.637 1.24438 0.86648 8.7472 11.0595 111.44 1.0311
0.9582 1.5235 0.8931 1.2043 76.03 7.9823 7.7498 6.234 48.6088 30.2 1.2152 29.084 40.996 8875 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029
MACAU RELATED STOCKS (H) 52W
(L) 52W
ARISTOCRAT LEISU
2.75
-0.7220217
25
3.25
2.16
906120
150.3499908
CROWN LTD
9.95
0
22.99135
10.03
7.92
1331329
895
0.111856823
24.30555556
953.25
629.5
SOYBEAN FUTURE Jan13
1510.25
0.215660252
24.50535862
1781.5
1126.75
COFFEE 'C' FUTURE Dec12
152.05
0.562169312
-35.5720339
248.25
NAME
PRICE
DAY % YTD %
VOLUME CRNCY
SUGAR #11 (WORLD) Mar13
19.03
0.422163588
-18.5359589
25.12999916
18.92000008
AMAX HOLDINGS LT
0.067
-2.898551
-22.9885
0.119
0.055
12118000
COTTON NO.2 FUTR Dec12
69.95
0.171845911
-20.36657559
97.98999786
64.61000061
BOC HONG KONG HO
23.75
-1.041667
29.07609
25
16.24
12595612
CENTURY LEGEND
0.26
-1.886792
13.04348
0.335
0.204
120000
CHEUK NANG HLDGS
4.18
-2.564103
49.28572
4.36
2.5
340000
CHINA OVERSEAS
21
-2.325581
61.96958
21.95
11.507
20012467
CHINESE ESTATES
12.08
-5.031447
-3.36
13.26
8.3
94400
CHOW TAI FOOK JE
10.78
-1.821494
-22.55747
15.16
8.4
8521180 1770000
World Stock MarketS - Indices NAME
1.5
-1.315789
35.13513
1.57
0.99
1.23
-1.6
192.8572
1.36
0.37
552000
GALAXY ENTERTAIN
27.35
-4.370629
92.06461
29.45
13.2
291182559
2441.48
HANG SENG BK
117.9
-1.338912
27.94357
120
91.05
1153823
5989.07
5075.22
HOPEWELL HLDGS
28.35
-1.5625
44.62694
31.091
18.319
1205608
23.37789
7478.53
5366.5
HSBC HLDGS PLC
74.9
-2.727273
26.94915
78
56
19253808
-1.512779
4.515494
10255.15
8135.79
21566.91
-2.41151
16.9928
22149.69922
17613.19922
CH
2245.405
-1.840433
-4.277406
2756.091
TA
7242.63
-0.6113476
2.411593
8170.72
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
12932.73
-2.362657
5.853631
13661.87
11231.56
NASDAQ COMPOSITE INDEX
US
2937.288
-2.478309
12.74929
3196.932
FTSE 100 INDEX
GB
5816.1
0.4225063
4.375593
DAX INDEX
GE
7277.26
0.6142824
NIKKEI 225
JN
8837.15
HANG SENG INDEX
HK
CSI 300 INDEX TAIWAN TAIEX INDEX
FUTURE BRIGHT
HUTCHISON TELE H
3.26
-0.6097561
9.0301
3.88
2.81
5288000
LUK FOOK HLDGS I
20.95
-3.456221
-22.69373
37.1
14.7
3960000
MELCO INTL DEVEL
7.57
-3.072983
31.19584
8.28
5.12
2586000
2172.878906
MGM CHINA HOLDIN
13.7
-2.142857
42.82507
14.76
9.347
2724500
6609.11
MIDLAND HOLDINGS
3.84
-1.030928
-2.88431
5.217
3.249
2142000
NEPTUNE GROUP
0.157
1.290323
41.44144
0.222
0.08
860000
NEW WORLD DEV
12.34
-3.139717
97.12459
13.2
6.13
18811907
SANDS CHINA LTD
30.5
-2.866242
38.95216
33.05
19.96
10972504
SHUN HO RESOURCE
1.23
0
23
1.37
0.95
0
SHUN TAK HOLDING
3.14
-1.567398
22.69803
3.51
2.418
4302374
KOSPI INDEX
SK
1914.41
-1.194292
4.856663
2057.28
1750.6
S&P/ASX 200 INDEX
AU
4483.822
-0.7226896
10.5326
4581.8
3973.8
ID
4327.868
-0.5184782
13.23593
4366.856
3618.969
FTSE Bursa Malaysia KLCI
MA
1641.07
-0.2710373
7.208323
1679.37
1424.19
NZX ALL INDEX
NZ
860.437
0.163906
17.90034
874.107
712.548
JAKARTA COMPOSITE INDEX
EMPEROR ENTERTAI
17.2
-3.479237
37.53909
18.18
11.519
7502105
SMARTONE TELECOM
SJM HOLDINGS LTD
15.96
-0.25
18.75
17.5
11.72
2771500
WYNN MACAU LTD
22.65
-0.8752735
16.15385
25.5
14.62
6661969
ASIA ENTERTAINME
3.75
-3.350515
-36.22449
7.49
2.4
80684
BALLY TECHNOLOGI
48.15
-2.273189
21.71385
51.16
34.88
689717
PHILIPPINES ALL SHARE IX
PH
3575.28
-0.1759
17.41323
3607.89
2952.17
HSBC Dragon 300 Index Singapor
SI
595.4
0.83
19.96
NA
NA
STOCK EXCH OF THAI INDEX
TH
1293.43
-0.4854817
26.14892
1314.64
951.98
HO CHI MINH STOCK INDEX
VN
385.6
1.23392
9.685683
492.44
332.28
BOC HONG KONG HO
3.12
2.631579
30.15252
3.3
2
4047
Laos Composite Index
LO
1140.5
1.724092
26.7983
1141.52
876.33
GALAXY ENTERTAIN
3.6
-3.225806
92.51337
3.73
1.68
12017
INTL GAME TECH
12.89
-0.7698229
-25.05814
18.1701
10.92
4083289
JONES LANG LASAL
77.94
-2.587177
27.22821
87.52
55.88
195698
LAS VEGAS SANDS
44.44
-0.714924
4.001873
62.09
34.72
7908071
MELCO CROWN-ADR
14.62
-2.338009
51.97505
16.02
8.18
4474027
MGM CHINA HOLDIN
1.76
0
47.68902
1.96
1.1917
2000
MGM RESORTS INTE
10.06
-2.42483
-3.547462
14.9401
8.83
10559398
SHFL ENTERTAINME
13.51
-1.24269
15.27303
18.77
10.22
205990
SJM HOLDINGS LTD
2.22
-4.310345
38.09639
2.32
1.4695
2100
111.03
-1.0516
7.170261
129.6589
84.4902
1553795
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
WYNN RESORTS LTD
AUD HKD
USD
14 |
business daily November 9, 2012
Opinion The second coming of Barack Obama Kemal Dervi
T
Former minister of economy in Turkey and vice president of the World Bank, is currently Vice President of the Brookings Institution
he race was tough, but U.S. President Barack Obama has won reelection. The question now, for the United States and the world, is what will he do with a fresh four-year term? To win re-election with a still-weak economy and unemployment close to 8 percent was not easy. Many leaders – Nicolas Sarkozy, Gordon Brown, and José Luis Rodríguez Zapatero come to mind – have been swept away by economic discontent in recent years. Although the financial disaster erupted on George W. Bush’s watch, after eight years of a Republican presidency, Obama had to carry the burden of an anaemic recovery. Obama won not only because of his extraordinary personal resilience, but also because a sufficient number of middle-class voters, while unhappy with the pace of economic progress, sensed that an Obama presidency would help them more than the policies championed by his Republican challenger, Mitt Romney, which were perceived as tilted to the affluent. Moreover, America’s ongoing demographic transformation makes it harder for candidates who are unable to reach out strongly to Latinos and other minority
communities – something that Romney singularly failed to do – to carry the country. Some aspects of the campaign, particularly the amount of money spent and its negative tone, struck many observers as objectionable. But the competitiveness of American democracy – the fact that an alternative always exists, and that those in power have to fight hard to stay there – was on admirable display for the whole world to see.
World weaknesses Obama will embark on his second term with the global economy at a crossroads. In the U.S., the uneven and weak recovery has been sustained by extraordinarily expansive monetary policies and on-going large fiscal deficits. While corporate coffers hold mountains of cash, private investment stagnates. In Japan, solid economic performance remains elusive, while prime ministers succeed each other at a breath-taking pace. Likewise, Europe is on life support, thanks to European Central Bank President Mario Draghi’s astute manoeuvring and promises of unlimited intervention in sovereign-debt markets. But unemployment is at its highest in decades and growth has essentially stalled,
even in Germany, while the troubled southern economies are mired in deep recession. The situation in Greece, moreover, has become socially unsustainable; Greece is small, but a total collapse there could have very negative financial and psychological effects elsewhere. The world’s emergingmarket economies are in better shape; but, while their underlying trend growth in potential output is much higher than that of the advanced economies, there is no
cyclical de-coupling. The world economy is an interdependent whole: trouble in any important part of it is transmitted globally. That is true beyond the purview of narrowly macroeconomic problems as well: for example, the need to address climate change can no longer be ignored. The U.S. cannot determine the world economy’s future on its own, but the course taken by America nonetheless has huge global importance, given that it remains the largest economy and retains considerable influence in venues such as the International Monetary Fund, the World Bank, and the G-20. American ideas continue to affect the policy debate worldwide.
Policy challenges
The world economy is an interdependent whole: trouble in any important part of it is transmitted globally
So, what should Obama’s top economic-policy priorities be in his second term? Despite the difficulties facing the global economy, there are huge investible resources in the U.S., China, Germany, and elsewhere. While there are climate and resource constraints, we are still at the beginning of a technological revolution that holds tremendous potential for higher productivity and greater prosperity, along with challenging implications for labour and employment. But sustainable economic
growth requires that those with investible resources actually invest them. And that will not happen unless and until a broadbased recovery of the middleand lower-income groups in advanced economies, including the U.S., delivers the prolonged rebound in demand for which investors are waiting. There are plenty of profits to be made – actual taxes on capital are not too high, and cheap finance is available to the corporate sector. But the concentration of income at the top – more than 90 percent of the gains from U.S. economic growth in 2011, for example, went to the top 1 percent – is constraining broad-based recovery and leaving macroeconomic policy caught between the need for continued “stimulus” and the dangers of growing public debt and asset bubbles inflated by record-low interest rates. In other words, a more balanced income distribution is not only a social or ethical issue; it is crucial for macroeconomic and, indeed, long-term corporate success. This is vital for many countries, above all the U.S. and China. Then there is the pressing need – in the U.S. and globally – for education and appropriate skill formation. Without the skills required by new and incipient technologies, too many workers will simply be unemployable. A key benefit of prioritising broadbased quality education is that it also helps to solve the incomedistribution problem. Finally, there is the need for effective international cooperation. China’s currentaccount surplus has declined, but now northern Europe runs a US$500 billion surplus, while demand in southern Europe is collapsing and the U.S. is running a deficit that is close to US$500 billion. The longerterm challenge of climate change and extreme weather patterns also requires global cooperation and a post-election shift toward much stronger U.S. engagement, which could unleash a multifaceted cleanenergy revolution, fuelling large job-creating investments and a new cycle of growth. After America’s long, hardfought election campaign, it is time for comprehensive policy reforms. One hopes that the U.S. Congress will recognise this as well, leading to support for measures that could help hundreds of millions of people in the U.S. and around the world. © Project Syndicate
editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Associated editor Michael Grimms Newsdesk Vitor Quintã (Chief Reporter), Alex Lee, Tony Lai, Xi Chen Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
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November 9, 2012 business daily | 15
OPINION The first speech of Obama’s wires second term Business
Leading reports from Asia’s best business newspapers
Bloomberg View editors
Straits Times Citibank has launched a service which allows customers in Singapore to pay their credit card bills via SMS. Citibank will send customers an SMS when their credit card bill is ready. Customers can then make a minimum or full payment by replying to the message. They will also receive a mini-statement and payment reminder via SMS. The SMS payment service is part of the bank’s strategy to expand its mobile banking capabilities as it aims to be the world’s leading digital bank.
Nation SC Asset Corp, the listed property arm of the Shinawatra family, plans to launch, next year in Thailand, residential projects with a combined worth of 20 billion bath (US$650 million), which it expects will boost annual presales to 14 billion bath. Some 70 percent of the new projects set for launch next year will be low-rise, mainly detached housing and townhomes. Meanwhile, the company has set aside an investment budget of 3 billion to 4 billion bath to buy land next year for the development of residential projects from 2013-2015.
Daily Tribune The Philippines’ dollar reserves or gross international reserves (GIR) stand at US$82.1 billion as of end-October, data from the Bangko Sentral ng Pilipinas (BSP) revealed. GIR increased because of the inflows from foreign exchange operations and investment income of the BSP. The inflows were offset by foreign exchange outflows for the payments by the national government of its maturing foreign exchange obligations. The latest GIR figure is enough to cover 11.9 months’ worth of imports of goods and payments of services and income.
Korea Times Hyundai Heavy Industries (HHI) has taken a bold step toward becoming a leading solar battery manufacturer. The world’s biggest shipbuilder by sales said on Wednesday it has completed the construction of a giant photovoltaic research and development (R&D) center in Eumseong, North Chungcheong Province, at a cost of 22.6 billion won (US$20.8 million). The facility houses more than 100 researchers and 53 pieces of equipment that are necessary to develop high efficiency solar cells and modules along with cost saving business tool development, the company said.
“W
e are not as divided as our politics suggests,” said the man who had just been re-elected president with barely 50 percent of the vote. For Barack Obama, it was the best kind of rhetoric: a selfserving statement that also happens to be true. The president’s remarkable victory over Republican nominee Mitt Romney last night was a near-landslide in the Electoral College. And he will be the first Democratic president since Franklin D. Roosevelt to be re-elected with a majority. But politics is about more than numbers – and besides, the president still has to deal with a truculent House of Representatives, which got much more conservative (if only slightly more Republican) on Tuesday. It is also about persuasion. In that sense, the president’s rousing yet realistic victory speech was the night’s most encouraging development. Gone was the heavy-lidded, monotonous lecturer of last month’s first presidential debate. Absent was the sarcastic, occasionally churlish campaigner of the last several weeks. This was vintage 2004 Obama, considerate of those who may disagree with him and pledging to work with his opponents. “I also look forward to sitting down with Governor Romney to talk about where we can work together to move this country forward,” the president said, to polite applause. Romney, for his part, was warm and graceful in defeat – where was that guy last spring and summer? – while House Speaker John Boehner offered the president congratulations and a commitment “to find common ground.” Who knows? Maybe Romney will join the Obama Cabinet as
the nation’s first secretary of business, and Boehner will revisit the grand bargain to reduce the debt that he and Obama came so close to striking in the summer of 2011. Or maybe not. Once the shine of victory and the sting of defeat wear off, Washington could easily sound a lot like it did the day before Tuesday. This is not to downplay the importance of Obama’s victory; it will allow tens of millions of uninsured Americans to get health care, to cite just one benefit, and it protects a woman’s right to an abortion, to cite another. Historic challenges facing the nation’s budget and economy remain. Bipartisanship will not by itself solve these problems, as pundits of the left and right are fond of pointing out. It is, however, a necessary condition to any solution. To favour bipartisanship is not to
Bipartisanship will not by itself solve these problems, as pundits of the left and right are fond of pointing out. It is, however, a necessary condition to any solution
require that both sides agree. At this point, it would be nice if they could just communicate.
Dialogue needed One of the virtues of Obama’s speech is the way it acknowledged both the difficulty and necessity of this negotiation. “I’m not talking about blind optimism, the kind of hope that just ignores the enormity of the tasks ahead or the roadblocks that stand in our path,” he said. “I’m not talking about the wishful idealism that allows us to just sit on the side lines or shirk from a fight.” Compare this forthrightness to his victory speech of four years ago, with its vague plea to resist “partisanship and pettiness and immaturity.” This is the kind of gauzy language that so enraptured Obama’s supporters and so enraged his opponents: they both suspected he was talking about the latter. In 2008, Barack Obama was the very embodiment of change. In 2012, he led the party of the status quo. In part this is a job requirement for any incumbent seeking office. Yet it also has to do
with the maddening, fatuous notion of “change” itself. Would a Romney presidency have represented “change”? Or would it have represented a return to the pre-Obama status quo? Did Obama fulfil his promise of bringing “change” to Washington? Or is his administration evidence of the impossibility of the task? The answer, of course, is all of the above. “Change” is in the eye of the voter. At any rate, Obama – and his supporters, to judge from Tuesday’s impressive near-sweep of swing states – seem to have traded in a generalised desire for change for a grim determination to see his changes through. This is progress, for both the president’s supporters and opponents: in politics as in language, defining terms is always helpful. For our part, we’re happy that Obama seems to have retired his cranky candidate persona. If his early-morning address was the first speech of his second term, then there is reason to be – pardon the term – hopeful about the next four years. Bloomberg View
16 |
business daily November 9, 2012
CLOSING Greece MPs back austerity cuts
Spain concludes 2012 financing
Lawmakers in Greece have narrowly backed a fresh round of austerity measures. The austerity package aimed at securing the next round of bailout funds was passed with the support of 153 MPs in the 300-member parliament. The 13.5 billion-euro (US$17.3 billion) bill includes tax rises and pension cuts. Prime Minister Antonis Samaras warned before the vote that without the bailout Greece would run out of money this month and face “catastrophe”. MPs must now pass a revised budget on Sunday before eurozone finance ministers meet next week to approve 31.5 billion euros in fresh loans.
Spain sold 4.76 billion euros (US$6.06 billion) of debt, including the longest-maturity security it has auctioned in more than a year, even as weak demand prompted a slump in prices after the sale. Prime Minister Mariano Rajoy is keeping investors guessing as to whether he will seek a bailout that would allow the ECB to start buying Spanish bonds. Central bank policy makers met in Frankfurt yesterday as Mr Rajoy presses the ECB to go beyond the rules it has set for itself and say how much it would intervene to cut borrowing costs if he did ask for help.
Transport sector off the growth pace Transport and communications had a positive year but their economic importance fell Vítor Quintã
vitorquinta@macaubusinessdaily.com
E
ven though the transport, storage and communications industries created more wealth last year, it was not enough to keep up with the pace of Macau’s casino-led economic growth, official data show. According to a survey released by the Statistics and Census Services yesterday, the gross value added of the sector, measuring its contribution to the economy, rose by 13 percent in 2011 to 6.3 billion patacas (US$793 million). However, this figure was below the 18 percent growth recorded for the gross domestic product, which means that the importance of the sector to Macau’s economy shrank last year In 2011 the transport, storage and communications sector accounted for less than 2.2 percent of the city’s wealth creation. Still, it was a positive year for the industry, particularly for communications, which saw their gross value added increase by 17 percent from 2010 to 2.8 billion patacas.
Communications’ revenue rose by 40 percent to 5.9 billion, “attributable to an upsurge in sales of smartphones and tablet computers,” the statistics bureau said. But expenses grew even faster, up by 48 percent to 4 billion patacas, mostly because the costs associated with the purchase of goods more than doubled to 2.4 billion patacas. On the other hand, the economic contribution of the transport and storage sector increased by 11 percent to 3.6 billion patacas last year. Transport revenue rose by 14 percent to 14.9 billion patacas but spending also grew faster, with salaries rising by 16 percent to 2.1 billion patacas. Last year was also a year of major investment for the transport, storage and communications sector, which forked out 1.1 billion patacas, threetimes more than in 2010. The number of companies dropped slightly by 8 to 2,111 but employees increased by 6 percent to 13,534.
Transport sector’s spending grew faster than revenue last year, particularly on wages
Taiwan October exports slide Casts doubts over a recovery for Asia’s exporters
T
aiwan’s exports slipped in October, against a median forecast for a rise and dragged down by a fall in the value of IT and communications product shipments, raising questions over recent signs of a recovery for Asia’s exporters. Exports fell 1.9 percent from a year earlier, against a median forecast for growth of 1.78 percent in a Reuters poll of 10 economists. The island’s finance minister had told parliament earlier in the week that exports in October would contract, though he did not give specific reasons. The fall serves as a reminder that despite recent signs of a recovery for the region’s exporters, they remain vulnerable as demand in their main markets has yet to show sustained strength. “Looking into next year, exports will still be weak, as there are many downside risks in the international
environment,” said Anita Hsu, economist at Masterlink Securities in Taipei. “We expect full-year exports will grow at a 0-5 percent rate next year.” Shipments to China, Taiwan’s
Exports fell 1.9 percent from a year earlier
largest trading partner, edged up 0.3 percent, but those to the U.S. contracted 9.5 percent after rising in the previous month and those to Europe fell 11 percent. Exports had risen 10.4 percent on year in September, the first rise after six straight months of contraction and well above forecasts, raising hopes the economy had bottomed out, though the figure was coloured by a one-off surge in refined oil products. Taiwan is one of Asia’s most export-dependent economies and is highly leveraged to the cycle of demand for technology products due to its leading position in the component supply and contract manufacturing chain. It traditionally benefits from the year-end shopping season as new gadgets go on sale, but faces leaner times after that until the next new product cycle begins. A number of new gadgets, such as Apple Inc.’s
iPhone 5, have recently gone to market. Taiwan recently cut its 2012 economic growth forecast for a ninth time in just over a year as Europe’s ongoing woes, concerns over the U.S. economy and China’s slowdown kept the island’s thirdquarter growth below forecasts. The finance ministry said it still saw the possibility that fourth-quarter exports would see a slight growth from a year earlier, due to a low base effect. But economists note that a recovery may take a while. “Exports in NovemberDecember may see a growth on low base,” said Andrew Tsai, economist at KGI Securities in Taipei. “Since Q4 is still at a stage of inventory correction for the electronics sectors, Taiwan’s exports may need to wait till Q1 to improve on inventory restocking.” Reuters