Macau Busines Daily, October 4, 2012 by Business Daily

Year I Number 133 Thursday October 4, 2012 MOP 6.00 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte

Start date for Parisian ‘not yet approved’ www.macaubusinessdaily.com

Okada can’t vote disputed Wynn stake A Nevada judge on Tuesday rejected Japanese billionaire Kazuo Okada’s attempt to vote shares in Wynn Resorts Ltd he says are still rightfully his. But the court did rule in favour of allowing Mr Okada access to company records relating to a US$135 million (1.1 billion patacas) donation to the University of Macau.

Page 3

he Macau government has granted fraternity, equality but not yet liberty to Las Vegas Sands Corp.’s The Parisian application, says the administration. Two weeks ago LVS founder and chairman Sheldon Adelson said he hoped to start the work on a new US$2.5 billion (20 billion patacas) French-themed casino resort “subject to government approval – within about 60 days”. But in an e-mailed statement, the Land, Public Works and Transport Bureau told Business Daily it could take over a year for a preliminary design to be signed off. The bureau says LVS submitted a revised preliminary design – including the half scale Eiffel Tower – only in June this year. Without referring directly to The Parisian, the bureau stressed that “not all requests for project assessment can be approved at the first attempt”, adding, “quite often the assessment will require more than a year”. Current guidelines say the bureau takes a minimum 105 days to make a final decision on preliminary design and architectural plan. More on page 3

News where it matters

I SSN 2226-8294

Brought to you by

HANG SENG INDEX 21000

1 in 10 small firms struggling for staff

20950

More than ninety percent of small- and medium-sized enterprises (SMEs) in the city had trouble finding staff last year, a study from Macau Small and Medium Enterprises Association and the University of Macau suggests. The association wants the government to simplify and speed up procedures for importing non-resident staff.

20900

20850

20800

October 3

Page 4

HSI - Movers Name

Lights, action, urged on city film hub idea Filmmakers agree on the city’s potential as a film and television production base – but they disagree about how to achieve it. One suggests a film development council like Hong Kong or Taiwan. The initial plan for then Macao Studio City listed media production facilities for the Cotai casino resort.

Page 5

iTunes launch takes time to hit right note

fter a long wait, the iTunes store has been launched in Macau. But it’s no guarantee of bigger sales locally for record companies, musicians say. Awareness of copyright protection rules and the habit of consuming authorised music will take time to penetrate the Chinese audience in Hong Kong and Macau, adds a management consultant. The traditional route of album sales during concerts still works much better for covering production costs and generating earnings in mainland China, Hong Kong and Macau, says Jackal Tam Chi Chong, keyboardist of local band Why Oceans. “iTunes is more of a promotional tool for getting people to know the band,” he notes, “but I don’t see it as much of a help to sales, really”.

Page 5

%Day

CATHAY PAC AIR

3.01

ESPRIT HLDGS

2.85

HANG LUNG PROPER

2.26

AIA GROUP LTD

2.25

CHEUNG KONG

1.93

ALUMINUM CORP-H

-1.56

CITIC PACIFIC

-1.61

SANDS CHINA LTD

-1.90

LI & FUNG LTD

-3.00

CHINA RES ENTERP

-3.67

Source: Bloomberg

Brought to you by

2012-10-4

2012-10-5

2012-10-6

24˚ 31˚

24˚ 30˚

2 |

business daily October 4, 2012

macau

Loveman admits will ‘never’ get Macau gaming licence Man who paid US$577 mln for Cotai golf course says China doesn’t need more foreign casino ops Associate Editor

he American casino boss who admitted in 2010 he was “really wrong” not to bid for a Macau gaming licence, yesterday told analysts and investors in Las Vegas the government here won’t issue any more casino concessions to U.S. companies. “There will not be another licence issued to an American casino operator,” Gary Loveman, chief executive of Caesars Entertainment Corp., said referring to Macau at a presentation during the Global Gaming Expo 2012 in Las Vegas. “This is a country [China] that doesn’t really need the money and they have slowed everything in Macau very substantially,” Mr Loveman told the UBS and Deutsche Bank Gaming Investment Forum. It wasn’t clear whether Mr Loveman was referring to no more Macau licences during the lifetime of the current ones – the six concessions and sub-concessions expire on varying dates between 2020 and 2022 – or no more foreign licences ever. The former point has already been confirmed. In April 2008 Macau officials said no new casino gaming licences would be approved during the existing ones.

Newcomers unlikely As to the latter point, in March this year Manuel Joaquim das Neves, director of the Gaming Inspection and Coordination Bureau (DICJ), told Business Daily’s sister publication, Macau Business magazine “it’s expected” that existing licensees would have their permissions renewed. Mr Neves added it would be “hard” for new operators to enter the market, but didn’t expand on the reasons. It’s clear that with hindsight that Mr Loveman, a former associate professor of business administration at Harvard University, would very much like to be Macau. In 2011 U.S. commercial casino revenues (excluding tribal casinos) grew by three percent year-on-year according to the American Gaming Association. Macau revenue for casino games grew by 42 percent year-on-year in the same period

Et tu Caesars? No, says CEO Gary Loveman

according to DICJ data. One of Caesars’ U.S. market rivals, Las Vegas Sands Corp., said in a presentation to the U.S. forum on monday, that 50 percent of its adjusted property EBITDA on a consolidated basis came from Macau in the second quarter. Having missed the boat in Macau by not bidding for a licence there in 2002, Caesars – then known as Harrah’s Entertainment Inc. – expressed an interest in bidding for one of the two Singapore casino licences put out to tender in 2006. The licences offered a 10-year duopoly.

Singapore withdrawal Harrah’s – at the time the world’s biggest casino operator by revenue – dropped out of the running for Singapore on October 6 that year, just days before the final bidding deadline. The firm, which had teamed up with Singapore developer Keppel Land to bid for a licence to run a casino on the resort island of Sentosa, said it would not be able to meet its financial objectives if it went ahead with the project.

KEY POINTS ‘No more’ Macau licences for U.S. ops: Loveman Caesars (previously Harrah’s) missed boat in Asia Paid US$577 mln for Cotai golf course U.S. commercial casino rev up 3pct y-o-y in 2011 Macau casino rev up 42pct y-o-y in 2011

“Regrettably, we determined it would not be possible to deliver a development on the scale we en v i s i o n ed wh i l e me e t i n g o u r financial objectives for this project,” Harrah’s spokeswoman Jacqueline

Caesars Golf, Cotai – possibly world’s highest price tag

Peterson told Reuters at the time. But so keen was Harrah’s to get an Asia operation that within a year – in September 2007 – it was happy to pay US$577.7 million (4.61 billion patacas) for a Cotai golf course. The firm didn’t comment on the price, but the figure was reported in the Las Vegas Review-Journal. Although Harrah’s denied it at the time, it was widely considered in the industry as an attempt to parlay the 71-hectare (175 acres) Macau Orient Golf Course site into a casino resort. That dream was ended when the Macau government said it would not issue any more licences during the lifetime of current ones.

Debt load In January 2008 Harrah’s took on debt when it was bought for US$30.7 billion in a leveraged buyout by affiliates of private equity firms Apollo Global Management LLC and TPG Capital. In 2010, after a name change to Caesars Entertainment, and when the purchasers were considering a partial return of the company to the public markets in a US$500 million flotation, Barron’s described the 2008 deal as “one of the worst big LBO deals at the top of the market”. In February this year Caesars did have a partial flotation on the Nasdaq in New York, pricing 1.81 million shares at US$9 a share and raising a modest US$16.3 million. In August this year, Caesars wrote down US$101 million related to the company’s land concession in Macau and higher depreciation expenses in Las Vegas in its second quarter 2012 results. It appeared to be recognition that the now rebranded Caesars Golf Macau will struggle to recoup the original investment in its current form. At the close of business on Monday New York time, Caesars’ shares were trading at US$6.33, down 4.39 percent on the day. With Bloomberg

October 4, 2012 business daily | 3

MACAU

The Parisian fades into the distance The government says it could take more than a year to approve the start of work on Sands China’s next Cotai resort Vítor Quintã

vitorquinta@macaubusinessdaily.com

The government has extended until April 2016 Sands China’s permit to build on Lot 3 in Cotai (Photo: Manuel Cardoso)

onstruction of Sands China Ltd’s The Parisian in Cotai may not start until much later than company hopes, the government has said. Sheldon Adelson, the chairman of Sands China’s parent company, Las Vegas Sands Corp, said two weeks ago that he was hopeful work on the US$2.5 billion (20 billion pataca) casino resort could start within 60 days if it had government approval. But government approval is just what the company lacks, the Land, Public Works and Transport Bureau has told Business Daily. The government granted Sands

China Lot 3 in Cotai in October 2008. The company submitted a preliminary design for a resort on the plot, which the government rejected for breaking planning rules. The company submitted several new designs in an effort to overcome the objections. Sands China then changed its mind about what to do with the plot. It sent a new preliminary design to the government in February last year. The changes continued this year, when the company submitted yet another design in June. It is this design that the Land, Public Works and Transport Bureau

says it is now considering. Mr Adelson said on September 20 the latest design envisaged a half-size steel replica of the Eiffel Tower. Unlike the replica of the Eiffel Tower built by a rival company in Las Vegas, which protrudes from surrounding buildings, Sands China replica would be free-standing. The president and chief operating officer of Las Vegas Sands, Michael Leven, said the replica would have lifts, a restaurant and a viewing platform. “There’ll be the appropriate gaming facilities and appropriate shopping” in the resort, he said. Mr Leven said last month that

Judge rejects Okada’s right to vote Wynn shares Japanese pachinko entrepreneur ‘unlikely’ to get stake cancellation overturned Associate Editor

Nevada judge on Tuesday rejected Japanese billionaire Kazuo Okada’s attempt to vote shares in Wynn Resorts Ltd he says are still rightfully his. Mr Okada wants his right to the shares – and the voting privileges that would go with them – upheld despite Wynn Resorts cancelling the stake in February. He also wants to challenge Wynn’s chairman Steve Wynn at the next board meeting on November 2 by proposing two new independent directors. For now Mr Okada remains a board member. But without voting power his attempt to install new directors will not to be deemed valid, the company has already stated in a

stock exchange filing. Nevada district court judge Elizabeth Gonzalez – in ruling on the share voting issue – added Mr Okada was unlikely to succeed in persuading the courts to overrule Wynn Resorts’ share cancellation decision. In February the firm cancelled the stake – then valued at US$2.7 billion (21.6 billion patacas), in return for a promissory note payable in ten years at a 30 percent discount to the valuation. It followed a company inquiry by former Federal Bureau of Investigation director Louis Freeh alleging Mr Okada might have violated U.S. anti-corruption laws in his dealings in the Philippines.

The Japanese entrepreneur denies this. He counter claims the inquiry was designed to silence him after he started asking questions about a US$135 million company donation to the University of Macau.

Irretrievable breakdown Mr Wynn and Mr Okada question each other’s motives on a range of issues and are involved in multiple and at times interlocking lawsuits. What’s clear is that Mr Wynn and Mr Okada – the latter until the cancellation Wynn Resorts’ biggest single shareholder – can no longer work together and may even inflict significant commercial

the government had “approved the concept a number of months ago and they are in the process of approving the construction capability”. “We will probably have a significant ground-breaking ceremony some time, we hope, in November. We’re just waiting for another 30 days or so before final approvals come through.” Sands China Ltd declined to comment on the bureau remarks. The Land, Public Works and Transport Bureau’s guidelines allow it at least 105 days to decide on preliminary designs and architectural plans. But the government said this schedule was feasible only “if all the necessary documents for the request to be assessed are included and if all the legal requirements are fulfilled”. Without referring specifically to The Parisian, the bureau said: “Not all requests for project assessment can be approved at the first attempt”. It said problems with “shaded areas, building height and heritage protection” might mean a developer would have to make changes to its design and resubmit it. “In other words … quite often the assessment will require more than a year,” the bureau said. In July the government extended until April 2016 Sands China’s permit to build on Lot 3. This was the second such extension. The company will pay a penalty of 900,000 patacas for its delay in developing the plot. Sands China’s chief financial officer, Kenneth Kay, said on Monday the company expects to conclude in the first quarter of next year agreements with banks to borrow most of the US$2.5 billion cost of The Parisian.

damage on each other before the lawsuits conclude. Steve Wynn said in a Nevada affidavit filed on September 20 the company’s share redemption rules were created as far back as 2002. He said it was at the request of lenders concerned at regulatory issues that might arise over Mr Okada’s ownership of Wynn Resorts’ shares. That contrasts with Mr Wynn’s apparent faith in Mr Okada expressed in a first quarter earnings call in 2008. Then he said: “He’s my partner and my friend and there’s hardly anything I won’t do for him”. Representatives for Mr Okada and his casino equipment company Aruze USA Inc., said on Tuesday U.S. time they were considering an appeal. “We are disappointed by this decision, which for the moment denies Aruze USA of its rights to nominate and vote for independent directors willing to stand up to Steve Wynn,” the company said in a statement. The court on Tuesday did rule in favour of Mr Okada on another motion giving access to Wynn company records. It relates to a lawsuit in which he accuses Wynn Resorts of inappropriate payments to the University of Macau Development Foundation. With Reuters/Bloomberg

4 |

business daily October 4, 2012

macau

Labour shortage hits SMEs hard SME association wants simpler rules on importing workers and quota review Tony Lai

tony.lai@macaubusinessdaily.com

We’re not asking the government to blindly approve every single application but they should quicken their works when they see the needs of the SMEs Kenneth Lei Chi Leong, Macau Small and Medium Enterprises Association administrator

ine out of ten small- and medium-sized enterprises (SMEs) in the city had trouble finding staff last year, a study suggests. Macau Small and Medium Enterprises Association and the University of Macau carried out a joint research on the topic. The full results will be published at the end of this month. But the report indicates almost all small businesses ranked labour shortages as the number one problem during 2011, said the association’s administrator Kenneth Lei Chi Leong. It proposes the government simplify the procedures for importing workers. “In other words the administration should give the green light to the

applications from SMEs, meaning there should review the quota for foreign workers,” Mr Lei told Business Daily. The authorities have only set a specific ratio for resident versus imported labour in the construction industry. But other enterprises can only apply for nonresident workers after they secure a certain amount of local ones. Up to August this year – the most recent figures available – the number of imported workers reached a new record of 107,401. “We’re not asking the government to blindly approve every single application but they should quicken their works when they see the needs of the SMEs,” he added. By contrast the Macau Federation

of Trade Unions last month urged authorities to plug loopholes in the “lax” foreign worker scheme. Apart from the imported worker issue, the Small and Medium Enterprises Association also suggests a “simpler and feasible” scheme for part-time workers. That is still under discussion at the Standing Committee for the Coordination of Social Affairs. Under the proposal – referred to by the association as a ‘white paper’ in the manner of a legislative proposal – employers would pay an hourly rate, consisting of salary and benefits, to part-time staff, Mr Lei said. At present employer and employee contributions to the social security

fund being calculated according to the number hours worked. For instance, employees working 24 hours a week would get half the social security fund benefits of fulltime workers. The white paper also suggests the administration give financial assistance on water and electricity bills to small enterprises. Many such businesses faced an increase of at least 20 percent in rent last year, Mr Lei said. “But these are only supportive measures. The government should also reserve spaces in the five new reclaimed [landfill] plots for the operations of local SMEs,” the administrator added.

October 4, 2012 business daily | 5

MACAU

It may not make bands rich but iTunes helps forge stars Making it big in the iTunes store is no guarantee of bigger sales, musicians say Stephanie Lai

sw.lai@macaubusinessdaily.com

fter a long wait, the iTunes store has opened for business in Macau. So far it has not helped boost the sales of bands here but it does help promote them, musicians say. Macau rock band LAVY topped the Hong Kong iTunes chart late last month after releasing their first album, “My Lonely Journey”, on September 26. LAVY front man Vincent Cheang Chi Tat says the online music shop, launched on June 27, was a great help in distributing their music, and, more importantly, in promoting it to a new audience. The keyboardist for post-rock band Why Oceans, Jackal Tam Chi Chong, shares Cheang’s optimism about long-term music sales through platforms such as iTunes. Why O ceans is plannin g to release its music on iTunes through Hong Kong distributor Chopxticks Entertainment. Tam says the music industry’s conventional business model – performing and selling albums – is still important in Greater China and is still by far the best way to cover production costs and generate earnings. “iTunes is more of a promotional tool for getting people to know the band, but I don’t see it as much as a help to sales, really,” he said. Integral Consultancy Ltd is a Hong Kong business management consultancy. Its executive director, Baniel Cheung, says iTunes generally works better for emerging or independent artists in Greater China than for mainstream stars. “As my earlier research tells, 70 percent of the 15- to 30-year-olds in

Rock band LAVY topped the Hong Kong iTunes chart late last month with the release of their first album

Hong Kong, the active listeners online, are not buying the authorised music but get it from their friends or online forums,” he said. “For the remaining 30 percent that buy authorised music, they are mainly big fans of the artists, devotees to artists of alternative music, or the ones eager to possess music right from the very

moment of release.” Mr Cheung says that as the culture of legally downloading copyrighted music is not common in the mainland, putting up links on blogs for downloading music from iTunes, as in Hong Kong, is more of a means of boosting sales for artists. He said copyright protection awareness and the habit of

Filmmakers’ focus on long term Budding film and TV industry says it needs money and planning as much as tips from outsiders to build a successful industry Tony Lai

tony.lai@macaubusinessdaily.com

roduction companies here think turning Macau into a destination for making films and television programmes would help their business, but there is a long way to go. Rui Borges, the founder of Macau video company ICON Communications, told Business Daily that the city, with its unique characteristics, could serve as a “great film backdrop”. He says foreign production companies could help the nascent film and television industry find a “Macau identity” for their productions, much like the triad movie theme in Hong Kong productions. Vincent Ho Ka Cheng, the president of the filmmakers association, Audio-visual Cut, said: “When foreign producers come to shoot films here, they not only help promote Macau to the world but can also bring us expertise and new

techniques in film-making.” The city has become a more prominent location, serving as backdrop for the recent South Korean blockbuster “The Thieves”, which has so far made about US$82.6 million (660.8 million patacas) at the box office. A Chinese-United States coproduction “My Lucky Star”, starring mainland Chinese actress Zhang Ziyi and Taiwan pop star Leehom Wang, was shot in The Venetian Macao last month. But Mr Ho, the director of “Macau Stories”, thinks the foreign crews might find difficulty in contacting professionals here as the city lacks of an institution, public or private, responsible for its film industry. “They can seek help from the Macau Government Tourist Office, the Cultural Affairs Bureau or some private companies,” said Mr Ho. “But Macau doesn’t have a

platform like the Hong Kong Film Development Council or the Taipei Film Commission, which has the entire network of local film industry professionals.”

Foreign producers can help Macau filmmakers gain expertise, the director of ‘Macau Stories’ says

consuming authorised music would take more time to penetrate the minds of the Chinese audience in Hong Kong and Macau. Yet LAVY singer Cheang is happy to use iTunes to sell the group’s music. “At least if there’s a wide sharing of the unauthorised LAVY songs online that proves to us we have achieved some popularity”.

In contrast, Mr Borges thinks the Cultural Affairs Bureau is enough to satisfy the needs of visiting producers. “For now we don’t need a cinema authority. But, in the future, when Macau is heading towards the direction of becoming a movie city, there will be a stronger need for that,” he said. Both agree that the development of the city’s film and TV industry has a long way to go, needing as it does funding and planning. Mr Ho thinks the government lacks a master plan for the film industry. “The government, or I should say the whole industry, is now a bit impatient, as they want to get some results in a short time. And the long-term vision of what they want the city’s industry to achieve is set aside,” he said. Mr Borges said filmmakers here faced difficulty in getting their projects funded, and that most were low-budget. He said private businesses should regard the city’s indie productions as opportunities for advertising, placing their products in Macau productions just as private businesses elsewhere placed their products in Hollywood productions. The Cultural Affairs Bureau was due to announce by middle this year a funding scheme for Macau indie film projects, but has yet to do so.

6 |

business daily October 4, 2012

macau Shuffle Master changes name Casino equipment supplier Shuffle Master Inc. announced on Monday it is changing its name to SHFL entertainment Inc. The Las Vegas-based firm, which also has an office in Macau, believes the new name will better reflect its most important product, card shufflers, but also its growing portfolio. “We believe that our image and name should pay homage to our roots, while at the same time encompass who we are today,” the company’s chief executive officer Gavin Isaacs said in a statement.

Govt urged to legalise unlicensed lodgings Small, private lodgings are part of Macau’s history and should be legalised, the General Union of Neighbourhood Associations says Xi Chen

xi@macaubusinessdaily.com

he government should legalise privately-run hostels to solve the longstanding problem of unlicensed accommodation, the supervisor of the Building Management Resources Centre, Chan Pou Sam, has said. “Illegal lodging has always been around in the city. The main problem is there is demand for its existence,” Mr Chan told Business Daily. “Hotels in the city are still beyond the budgets of many tourists and sometimes there are also not enough rooms.” The building resources centre offers advice to the public on building management, and the government consults it. It is a part of the Macau General Union of Neighbourhood Associations, or Kai Fong. Mr Chan said government measures to clamp down on unlicensed accommodation had been effective, but that there would always be a market for cheaper accommodation. He said customers found out about unlicensed accommodation through word of mouth or through gambling junket operators. “In the past, people could hand out pamphlets in public to solicit clients for this kind of accommodation. They no longer dare to do so,” Mr Chan said. Mr Chan believes consumers have become more aware since the law changed. The law banning unlicensed accommodation came into effect in August 2010. It says people who let rooms to the public without a hotel licence are liable to a fine of between 200,000 patacas (US$25,000) and 800,000 patacas. The government said last year that it intended to amend the law but has yet to propose changes. Mr Chan believes the law should be changed to allow owners of private premises to operate simpler and

cheaper family hostels. He said a licence would still be needed but that hostels would not have to meet the same standards as hotels.

Change of perception The government has made repe at ed effo r ts to s ta m p o u t privately run lodgings without a hotel licence. Most never receive a hotel licence because they are in commercial buildings. In May, the government closed Augusters Lodge in the city centre. Although it offered unlicensed accommodation, Augusters Lodge

was popular enough to be listed in several international guidebooks and on travel websites such as Tripadvisor. Mr Chan said not all premises were suitable for use as cheap hostels because disturbance to neighbours had to be kept to a minimum. The government should be selective, as some buildings in old districts were more suitable than high-rise buildings, for instance. Mr Chan said the government had made slow progress in supplying low-cost accommodation. “The government needs to change its perception. The conditions for offering family-run guest houses are already here in the city,” he

said. “If nothing is done, the illegal accommodation problem will continue to persist in the long term.” The government recently announced that it would make more effort to promote the opening of lowcost accommodation. This month a website for booking low-cost accommodation will be launched. Technology start-ups are blurring the line between hotels and private homes. International website Airbnb allows users to advertise rooms to let by the night. Yesterday, the site had four listings in Macau.

The law makes owners of unlicensed accommodation liable to a fine of up to 800,000 patacas

October 4, 2012 business daily | 7

MACAU

Middlemen to pass on squeeze to consumers Food suppliers group say a logistics bottleneck, warehousing costs and natural disasters will drive up prices of canned food and frozen meat Stephanie Lai

sw.lai@macaubusinessdaily.com

onsumers can expect to pay up to 10 percent more for frozen meat, and cans of imported food will cost up to 8 percent more by the end of this year, according to the Macau Union Suppliers Association. A combination of natural

disasters that have affected harvests worldwide this year and increased the cost of feed, as well as logistics costs, will hit consumers’ pockets, association president Ip Sio Man told Business Daily. The biggest price increases will be in imported canned food

Prices of frozen meat could rise by as much as 10 percent by the end of the year, say importers (Photo: Manuel Cardoso)

Auction houses tussle for market Chinese art and antiques auctions saw positive response, with more events to follow in 2013 Xi Chen

xi@macaubusinessdaily.com

wo auctions of Chinese antiques and art prices took place at the same time on Tuesday in the territory, hosted by two different Macau-based auctioneers. One was held at Conrad Hotel at Sands Cotai Central and was the first event organised by Macau Hang Soi International Auction Co Ltd. The auction house was pleased with the results, operation director Ng Shui Kun was quoted as saying by the Chinese-language Macao Daily News. Mr Ng said that around half of the 294 items were sold, achieving an estimated total amount of at least 4 million patacas (US$500,000). Some items were bid for over 10 times before settling on the highest price among a group of 40 participants, mainly coming from mainland China, Hong Kong and Macau. He added that the results far exceeded the company’s expectations

given that it was its very first auction. Hang Soi is confident about the potential in the city and plans to organise two more auctions next year with double the number of art pieces. The items on auction this year included Chinese calligraphy, paintings, ceramics and antiques, with prices ranging from a few thousand patacas to a few million patacas. A similar auction went on at exactly the same time on Tuesday at 2pm, just across the street at The Venetian Macao, hosted by Macau Long Hei International Auction Co Ltd. It was not clear whether it was just a coincidence. Hou Chunnian, the creative director of Long Hei Auction declined to comment on the auction results. Both auction houses stressed they could not elaborate much on the sales, also to protect the buyers’ identities, the Hang Soi representative told Business Daily.

and frozen meat. A task force looking into alleviating the impact of inflation was set up by the government in June. It is led by the Economic Services Bureau, with representatives of the Civic and Municipal Affairs Bureau and the Consumer Council. Mr Ip says it is unlikely to find a solution in the short term. “For alleviating or trying to stabilise the rising food price, the crossdepartmental task force is not really helping much,” Mr Ip said. “The government task force is basically only monitoring the price level and reporting it to the sector as a reference.” Mr Ip said the leading reason for the looming price rises was the small size of the Macau market, which limited the ability of middlemen to strike a bargain. The city’s logistics network also impacted prices. “In Hong Kong, you’ve got the cheapest logistics support: the railway connecting Beijing and Hong Kong. But, in Macau, both the land and sea transport is not as developed, which makes our logistics cost two times higher than

Hong Kong’s,” he said. The association wants the government to pay attention to increases in the rents of warehouses used to store canned food, rice and meat. Mr Ip said government plans to reuse industrial buildings for housing would see commercial rents rise. “In the past, it used to be only 300 patacas (US$38) to 500 patacas per square foot for the foodstuff storage rooms [in industrial buildings]. But now it has already risen to more than 2,000 patacas per square feet,” Mr Ip said. “In that sense, there is no way local food products will see a price dip.”

MOP 2,000

Rent per square foot for food warehouses

8 |

business daily October 4, 2012

greater china

China’s services sector sees slower expansion PMI falls to lowest in nearly two years Lucy Hornby

hina’s normally robust services sector weakened sharply in September to its lowest point since November 2010, as slow growth in manufacturing finally began to feed through to the rest of the economy, an official survey showed yesterday. The official purchasing managers’ index (PMI) for the sector fell to 53.7 in September from 56.3 in August, weighed by weakened construction services and transport as well as lacklustre new orders overall, according to the latest survey from the National Bureau of Statistics. The services index follows official and private sector PMI surveys of China’s vast manufacturing industry that showed growth stabilising at a slower pace, almost certainly signalling a seventh straight quarter of slowing economic growth in the world’s second-largest economy. “The trend looks quite persuasive that we are now heading down to slower levels, which shows the impact

of the slowdown on urban services,” said Stephen Green, head of research for Greater China at Standard Chartered in Hong Kong. “If your manufacturing sector has been slow for six months it makes sense it would feed through to other services like banking and other related services. It had been insulated for a while.” The value is the lowest in nearly two years, although the sector remains above the 50-point line that divides expansion from contraction. As China’s economy matures and becomes more consumer-oriented, the services sector would be expected to post stronger growth than the manufacturing sector, which boomed earlier. The China Federation of Logistics and Purchasing conducts the survey on behalf of China’s National Bureau of Statistics. A similar survey of China’s services sector will be released by HSBC on Monday. China’s fast-growing services industry had weathered the global

slowdown much better than the factory sector, with the PMI consistently signalling healthy expansion and hitting a 10-month high of 58.0 in March. The official services PMI had previously dropped below 55 in November of 2010 and November of 2009, although the data was not seasonally adjusted at that time.

manufacturing PMI, which tends to reflect larger, state-owned enterprises, has also been below 50 for two months running. A Reuters poll last month forecast China’s annual economic growth could ease to 7.4 percent in the third quarter, before picking up to 7.6 percent in the final three months. That would likely leave growth for

Knock-on effect Analysts had expected the services sector to start feeling the chill winds from the manufacturing sector, which has fluctuated below 50 for almost every month since June 2011, according to the HSBC PMI survey, which tracks more of the private factories vital to job creation. The HSBC manufacturing PMI reading of 47.9 in September extended the longest run of readings below 50 in the survey’s 8-year history, with the need for more pro-growth government policies signalled by a fall in the output sub-index to its lowest since March and a slide in export orders to a three-and-a-half-year trough. The more cautious official

KEY POINTS Official services PMI at lowest since November 2010 Manufacturing slowdown feeds through to services sector Construction, freight feel the pinch Economic growth could ease to 7.4 pct in Q3 – poll

Chinese banks pull out of IMF meeting

AIA may buy Malaysia, Th

About 20,000 people expected to attend the event in Tokyo

Stock rose to a record hig Bei Hu

authorities such as the People’s Bank of China, whose Governor Zhou Xiaochuan is among those scheduled to take part. “Our relations with China are very important,” he said. Sino-Japanese relations deteriorated sharply after Japan last month bought the East China Sea islets that both Tokyo and Beijing claim, sparking anti-Japan protests across the country. The disputed group of islands, called Senkaku in Japan and Diaoyu in China, are located near rich fishing grounds and potentially huge oil and gas reserves. Taiwan also asserts its own sovereignty over the islets.

‘Too important’

The global economy ‘needs both Japan and China fully engaged,’ says IMF director, Christine Lagarde

Japanese finance official said it’s disappointing that some Chinese banks reportedly dropped plans to attend meetings in Tokyo next week during gatherings of the International Monetary Fund and World Bank. “It’s really disappointing,” Vice Finance Minister for International Affairs Takehiko Nakao told reporters in Tokyo yesterday. “I’m very sorry to hear that especially because I myself am promoting financial cooperation between China and Japan.” A dispute over islands in the East China Sea is fuelling tensions between Japan and China. The Wall Street Journal reported yesterday

that lenders such as Agricultural Bank of China Ltd and Bank of Communications Corp. had pulled out of IMF-related events, citing the banks. “Quite frankly, it’s Japan-China relations,” the paper quoted an official at the Tokyo branch of Agricultural Bank of China in explaining why the bank was pulling out. Japan is scheduled to host the IMF and World Bank annual meetings for the first time in nearly half a century. About 20,000 people are expected to attend the event, making it one of the world’s largest international conferences. Mr Nakao said he hasn’t heard of any cancelations by Chinese

The shaky global economy needs Japan and China to be fully engaged, the head of the IMF said, warning the world could not afford to have the two countries distracted by their bitter territorial dispute. The warning came as the Asian Development Bank (ADB) slashed its growth estimates for the continent, saying the days of double-digit expansion were over. Speaking to Japanese media ahead of the annual IMF meeting, Christine Lagarde said two of the world’s biggest economies needed to show a bit of neighbourly tolerance for the good of everybody. “Both China and Japan are key economic drivers that do not want to be distracted by territorial division,” Kyodo News agency quoted Ms Lagarde as telling reporters. “The current status of the economy and the global economy needs both Japan and China fully engaged.” AFP/Bloomberg

IA Group Ltd rose to a record high in Hong Kong after the third-largest Asia-based insurer was said to be close to buying ING Groep NV’s Malaysian and Thai units. Shares of AIA advanced as much as 3.6 percent to HK$29.95, the highest since the Hong Kong-based insurer started trading on the city’s exchange on October 29, 2010. The stock ended the day at HK$29.5, the highest since February 29. ING, which is selling assets to comply with European Union orders, is negotiating final terms to sell its businesses in Malaysia and Thailand to AIA for about 1.4 billion euros (US$1.8 billion), two people familiar with the matter told Bloomberg News on September 29. A deal could be announced by mid-October or could

Taiwan expec

Taiwanese visitors, busin

aiwanese officials said yesterday that visitors to the United States are estimated to increase by 50 percent now that the island has been added to the U.S. visa waiver programme. Taiwan’s President Ma Ying-jeou welcomed the decision, saying in a statement it would “further stimulate bilateral trade and give a major boost to civil exchanges and tourism”. Tourists and business executives

October 4, 2012 business daily | 9

GREATER CHINA

Hong Kong recovers boat, starts probe

The construction sector in particular has been weakened by credit curbs meant to halt property speculation

2012 below 8 percent, its lowest in more than a decade. The construction sector in particular has been weakened by credit curbs meant to halt property speculation. While there had been signs of a slight pick-up in mid-summer, local efforts to revive the vital sector were quashed by

central government, and the statistics bureau noted a clear slowdown in its construction services index in September. Air freight volumes – which can reflect just-in-time overseas orders – have been negative year-on-year for all of 2012, as the eurozone crisis

hurt Chinese exports. Rail freight volume turned negative last month, for the first time since 2009, while water and highway transport have held up, according to Chinese official data provided by Standard Chartered. Reuters

ING’s hai units

Hong Kong authorities began inspecting the wreckage of a leisure ship yesterday amid questions over how a collision with a commuter ferry in relatively calm weather could have killed 38 people in one of the city’s worst accidents in recent decades. The exact circumstances surrounding the crash remain unclear, but television footage showed the party ship suffered a massive hole in its rear hull, which saw it partially sink, and the ferry a severely damaged bow, suggesting they may have been passing each other in the night. The director of Hong Kong’s Marine Department, Francis Liu, told Hong Kong’s Cable Television that the probe could take six months and would look at why one boat sank so quickly and whether or not the boat violated safety specifications. Authorities have not ruled out prosecuting those found criminally liable for the crash and Hong Kong’s new leader Leung Chun Ying said a commission of inquiry would be formed to prevent further accidents in future. Seven crew members, including the captains of both vessels that were arrested on suspicion of endangering the safety of others at sea, have now been released on bail. Hong Kong is one of the world’s busiest ports but maritime accidents are rare. The tragedy is the worst to hit Hong Kong since 1996 when more than 40 people died in a fire in a commercial building.

gh in Hong Kong

still fall apart, they added. “The deal will increase weighting to higher-growth countries irrespective of price or if it is only Malaysia that they buy,” said Arjan van Veen, a Hong Kong-based analyst at Credit Suisse Group AG, on the potential purchases from ING. He rates AIA “outperform” and expects the stock to reach HK$32.00 in 12 months from August 29. AIA chief executive Mark Tucker, who had focused on existing businesses to rejuvenate the insurer, said in February he would consider acquisitions when they add value to investors and are financially viable. AIA announced on September 27 it agreed to buy a controlling stake in Aviva NDB Insurance Plc, Sri Lanka’s second-largest life insurer,

AIA chief executive Mark Tucker considering acquisitions to add value to investors

to enter the country, its 16th market. Thailand is already AIA’s secondlargest market by value of new business in the six months to May, a measure of the profitability of new policies that Mr Tucker has focused on, according to the insurer. Malaysia, the smallest of AIA’s largest markets by that measure, posted growth in new-business value of 41 percent in the same period. That’s faster than other big markets including Singapore, China, Korea and Hong Kong, its largest, according to its first-half results announcement.

cts tourist boost to U.S.

nesspeople get visa waiver from Taiwan will be allowed to travel to the U.S. without a visa for as long as 90 days starting November 1. Taiwan will join 36 countries already participating in the Visa Waiver Programme, which provides entry without a travel visa, U.S. officials said on Tuesday. The announcement “is a major step forward in our longstanding economic partnership with Taiwan,” Secretary of Homeland Security Janet

Napolitano, said in a statement. About 290,000 Taiwanese visited the U.S. last year, spending more than US$1.1 billion, according to a U.S. Commerce Department report. The decision is likely to bring an increase in Taiwanese tourism to the U.S., said Frank Wang, a press officer for the Taipei Economic and Cultural Representative Office in Washington. “It’s definitely beneficial to both sides,” Mr Wang said in an

AIA lost market share and suffered declines in agent productivity and new policy sales because of troubles at its then parent American International Group Inc. during the financial crisis and as a result of uncertainties during its own attempted takeover by Prudential Plc. in 2010. The Asian insurer in July posted a better-than-expected 10 percent rise in first-half profit after increasing value of new business by 28 percent to US$512 million.

Next Media to sell Taiwan TV to Lien

interview. “We appreciate the U.S. announcement.” Unlike other participants in the Visa Waiver Programme, Taiwan isn’t an independent country recognised by the U.S. Since 1979, the U.S. has recognised Taiwan as being part of China and doesn’t support independence for Taiwan, while pledging to help maintain its defences. China doesn’t enjoy the same visa-free travel privilege that Taiwan will now receive. A State Department official, who briefed reporters yesterday on condition of anonymity, said that while officials in Beijing were aware of the decision on Taiwan, the U.S. made no special effort to consult China on the decision.

Next Media Ltd, the Hong Kong publisher controlled by Jimmy Lai, reached an agreement to sell its unprofitable Taiwan TV business to the chairman of rival ERA TV for NT$1.4 billion (US$48 million). Next signed a non-binding agreement to sell Next TV Broadcasting Ltd to Lien Tai-sheng, according to a Hong Kong stock exchange filing dated October 1 and released yesterday. Mr Lien is chairman of closely held Taipei-based ERA Communications Inc., operator of ERA TV. A sale, to include closing Next’s video-ondemand Internet service, comes after two consecutive annual losses caused by the unprofitable move into TV broadcasting. Next, known for its animations depicting news including Tiger Woods’s car accident and Conan O’Brien’s television career, lost HK$1.17 billion (US$151 million) at its TV and multimedia unit for the year ended March 31, according to its annual report. “The possible transaction allows the group to rationalize and focus its resources on profitable operations, which should in turn enable the group to improve overall business performance,” Next said in yesterday’s filing. Services at its video-on-demand operations will cease on October 31, Next said yesterday. Mr Lien paid a deposit of NT$140 million that may be forfeited if he and Next can’t reach a formal agreement by October 21, Next said yesterday. The deadline can be extended on the agreement of both parties. The statement identifies Mr Lien as the purchaser and doesn’t mention his company.

AFP

Reuters

Bloomberg

10 |

business daily October 4, 2012

ASIA Philippine cyber law takes effect A controversial law targeting cybercrime in the Philippines has come into effect, fuelling protests by citizens and media groups fearing censorship. The new law is intended to prevent cybersex, online child pornography, identity theft and spamming, officials say. But it also makes libel a cybercrime punishable by up to 12 years in jail. “We recognise and respect efforts not only to raise these issues in court, but to propose amendments to the law in accordance with constitutional processes,” presidential spokesman Edwin Lacierda said in a statement.

ADB slashes growth forecast for Asia Says countries can bolster growth by boosting services industry Karl Lester M. Yap

he Asian Development Bank cut the region’s inflation and growth forecasts for this year and next, as Europe’s sovereign debt crisis and fiscal contraction in the U.S. reduces expansions from China to India. The Manila-based lender forecast Asia excluding Japan will expand 6.1 percent this year, according to the Asian Development Outlook 2012 Update report released yesterday, compared with a July estimate of 6.6 percent and an April prediction of 6.9 percent. It also reduced the region’s inflation projection to 4.2 percent from 4.4 percent. “Deceleration in the region’s two giants – the People’s Republic of China and India – and in other major exporting economies is tempering earlier optimism,” the ADB said. “The ongoing sovereign debt crisis in the euro area and the looming fiscal cliff in the U.S. pose major risks to the outlook.”

China’s manufacturing contraction persisted last month, Japanese industrial companies grew more pessimistic and South Korean exports fell, reports showed this week, signalling Asia’s biggest economies have yet to reverse their slowdowns. All of Asia’s eleven most-traded currencies except the Indonesian rupiah advanced against the dollar in the past three months as policymakers took steps to spur growth.

India’s central bank unexpectedly reduced the amount of deposits lenders must set aside as reserves last month, while Vietnam cut interest rates and South Korea announced 5.9 trillion won (US$5.3 billion) of spending and tax relief. U.S. Federal Reserve Chairman Ben S. Bernanke said this week the monetary authority will sustain record stimulus even after the expansion gains strength, while also saying policy makers don’t

expect the economy to remain weak through 2015.

’Extreme shock’ Central banks in Japan, South Korea, Indonesia, Thailand, India and the Philippines are scheduled to meet this month to determine monetary policy as the region gauges the need for more stimulus measures. The Bank of Japan expanded easing in September, joining peers in Europe and the U.S.

KEY POINTS ADB cuts 2012 developing Asia GDP forecast to 6.1 pct Sees China growing 7.7 pct in 2012 Predicts India’s 2012 growth at 5.6 pct Advises economies to rethink export-led growth model

As developed markets buy less, Asia will have to rethink its export-led growth model, says the ADB

Sony accelerates plan to turn TV business around Company seeks to recover from four straight annual losses Mariko Yasu and Shunichi Ozasa

ony Corp. earnings are “moving in the right direction” as Japan’s biggest exporter of consumer electronics accelerates a plan to turn around its unprofitable TV business, chief executive Kazuo Hirai said. Sony also is “mindful of our cash position” as it makes deals such as its September 28 agreement to invest 50 billion yen (US$639 million) in Olympus Corp., Mr Hirai said at an industry exhibition near Tokyo yesterday. The Tokyo-

based company is selling businesses, including a chemical products division for 57.2 billion yen, to generate cash, he said. Mr Hirai is reorganising Sony’s business holdings as the company seeks to recover from four straight annual losses because of slumping demand for TVs, a stronger yen and competition from Samsung Electronics Co. and LG Electronics Inc. Sony said in August its main TV

operation may lose about 80 billion yen in the year ending March 2013, a ninth straight year of losses, adding to about 700 billion yen in losses since April 2004. Mr Hirai is reducing the number of models and has sold stakes in display ventures as he tries to make the unit profitable in the year ending March 2014. “We are ahead of plans in turning the TV business around,” Mr Hirai said, without giving specifics. “There are differences in product categories

but, overall, I think we are moving in the right direction,” he said when asked about the company’s full-year earnings outlook.

New TV set The CEO, who took over in April, vowed to stay in the TV business and promoted an 84-inch Bravia set that will start selling in Japan next month for the equivalent of US$21,500. “We’re certainly committed to the TV business,” Mr Hirai said. “Sony has a very deep DNA in creating the best picture and the best sound.” The new set uses 4K technology that Sony says displays higherresolution images than conventional high-definition models. Sony sees growing demand for larger sets in developed markets such as North America and Japan, and better picture quality will help lure buyers, said Masashi Imamura, a senior vice president in charge of Sony’s home entertainment products.

October 4, 2012 business daily | 11

asia Sumitomo to invest in U.S. solar project Japan’s Sumitomo Corp. said it would take a 25 percent stake in a 550-megawatt solar power project in California, giving the trading house a foothold in the growing U.S. solar industry. The company, which has stakes in four U.S. wind projects, joins GE Energy Financial Services and NextEra Energy Resources as an investor in the Desert Sunlight solar farm located in Riverside County. Sumitomo made its investment by buying a part of GE’s stake, it said in a statement.

Asia’s exports have faltered as slower global growth crimps demand for the region’s goods. Malaysia’s shipments abroad unexpectedly slipped for the first time in three months in July, while Thailand and South Korea have recorded three straight months of declines. “If an extreme shock were to materialise, most economies in the region have room to use fiscal and monetary tools to respond,” the ADB said. “However, there is currently no region-wide need to pursue aggressive demand management. Rather, efforts should focus on the medium-term issue of continued soft external demand.”

Kingfisher may face prolonged shutdown Airline must pay wages before flying again

a New Delhi-based company that advises carriers. “It’s sad they are putting the blame on employees, because nowhere in the world anyone would accept this kind of situation.” Prakash Mirpuri, a spokesman at Kingfisher, didn’t reply to questions about when the company would be able to pay salaries or find an investor. The airline has about 4,000 employees. The carrier intends to pay outstanding wages using 600 million rupees (US$11.5 million) in frozen bank accounts, the management said at Tuesday’s meeting, according to Arun Mishra, the Director General of Civil Aviation.

Services industry

Stake sale

Crude oil has fallen about 7 percent this year, helping ease price pressure. Gains in Indonesia slowed for the first time in four months in September, while in Malaysia they have stayed at the slowest pace in more than two years. Still, South Korea reported a quickening last month, and the Philippine central bank has raised its inflation forecast for this year. Growth in developing Asia will be 6.7 percent next year, the ADB forecast yesterday, down from a previous estimate of 7.1 percent. Inflation will be 4.2 percent, slower than an earlier forecast of 4.4 percent, it said. China will expand 7.7 percent this year, less than the previous forecast of 8.2 percent. India’s economy will grow 5.6 percent in the year ending March 31, it said, compared with the earlier estimate of 6.5 percent. Asia can bolster growth by boosting its services industry, which accounts for almost half the region’s output and employs 34 percent of its workers, the ADB said. “Developing Asia must adapt to a moderate growth environment, and countries will need to do more to reduce their reliance on exports, rebalance their sources of growth, and increase their productivity and efficiency,” Changyong Rhee, ADB’s chief economist, said in a statement.

Kingfisher also said it’s in advanced talks on a stake sale with two overseas airlines and it aims to conclude a deal within three months, according to Mr Mishra. The government ended a ban on local operators selling stakes to foreign airlines last month. Kingfisher has been seeking investment since at least November, when it also announced flight cuts because of losses. The airline will make a decision today about when it will resume services, Mr Aggarwal said. Talks are under way with employees and the carrier will submit a plan to the regulator in a couple of days, he said. The shutdown has let Kingfisher halve its daily losses to 40 million rupees, Mr Mishra said, citing comments made in the meeting. The airline declined to comment on its daily losses. The carrier, which has posted five straight annual losses, fell by its daily limit of 5 percent to 14.6 rupees in Mumbai trading yesterday. The stock has declined 31 percent this year.

Bloomberg

“I can’t be optimistic,” said Nobuo Kurahashi, a Tokyo- based analyst at Mizuho Investors Securities Co., who rates Sony neutral, or hold. “It’s possible that the TV revitalisation plan may be ahead of schedule, as the targets may be conservative. However, it doesn’t mean that Sony as a whole is doing well.” Panasonic Corp. and Sharp Corp., which also are losing money in TVs, used the CEATEC exhibition to showcase their profitable home appliances, including networkconnected refrigerators. “Japanese consumer makers have abandoned their old habit of lining up TVs to compare each other whose is the biggest,” said Yoshiharu Izumi, an analyst at JPMorgan Chase & Co. in Tokyo. “Each company has a different message this year, depending on their expertise. For Sony, it’s the expertise used in highend professional products leading to the new 4K set.” Bloomberg

Kingfisher future hangs on getting fresh funds, analysts say

ingfisher Airlines Ltd, the Indian carrier that’s grounded its fleet and not paid staff since April, must settle wages before it can resume flights, according to an official at the nation’s civil aviation ministry. The airline’s management was told about the requirement at a meeting on Tuesday, said the official, who declined to be identified citing government rules. Half of the carrier’s staff have been paid for March and the rest will get these wages soon, Kingfisher’s chief executive Sanjay Aggarwal told reporters after the meeting in New Delhi. He didn’t comment on pay for

subsequent months. The decision increases pressure on Kingfisher’s billionaire chairman Vijay Mallya, who is seeking to raise cash by selling a stake in a liquor maker after an almost-yearlong failure to find an investor for the airline. The Bangalore-based carrier has halted flights through at least today after locking out employees who were protesting about not being paid. “Either it will close down now or with great difficulty survive for another 30 days, unless there’s an investor,” said Harsh Vardhan, chairman of Starair Consulting,

Reuters

Australia’s trade deficit widens to US$2 billion A

ustralia recorded its widest trade deficit since 2008 and new-home sales plunged to a record low, sending the local currency tumbling and intensifying pressure on the central bank for more interest-rate cuts. Exports fell for a third straight month in August, the longest stretch of declines since the third quarter of 2010, a Bureau Statistics report showed in Sydney yesterday. New-home sales fell 5.3 percent to 5,383 from July, when they dropped 5.6 percent, according to a separate private report. The trade imbalance drove down the local dollar as traders raised bets Reserve Bank of Australia Governor Glenn Stevens will follow a rate cut on Tuesday with another quarter percentage point reduction on November 6. Mr Stevens said on Tuesday a resource boom may peak at a lower level next year than previously estimated, and yesterday’s trade data showed a 3.5 percent slump in merchandise exports to China, the

biggest buyer of Australian shipments. “Export income is easing and this will underpin lower national income, wealth, and expenditure,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at RBC Capital Markets in Sydney. “Today’s [yesterday’s] data and the underlying drivers support further cuts from the RBA to assist the non-

export, interest-rate sensitive sectors of the economy.” The trade report showed imports exceeded exports by A$2.03 billion (US$2.08 billion) in August, compared with a revised A$1.53 billion shortfall in July that initially was reported as a A$556 million deficit, the statistics bureau said. Reuters

12 |

business daily October 4, 2012

MARKETS Hang SENG INDEX PRICE

Day %

VOLUME

PRICE

Day %

VOLUME

PRICE

Day %

29.55

2.249135

45999356

CHINA UNICOM HON

12.8

0.6289308

17705764

POWER ASSETS HOL

67.1

1.898254

7776335

ALUMINUM CORP-H

3.16

-1.557632

13686580

CITIC PACIFIC

9.16

-1.611171

10264774

SANDS CHINA LTD

28.4

-1.899827

13669482

BANK OF CHINA-H

2.95

194198634

SINO LAND CO

14.42

-0.5517241

10349190

BANK OF COMMUN-H

5.24

-0.3802281

20398124

SUN HUNG KAI PRO

113.3

-0.2640845

8754357

BANK EAST ASIA

29.5

1.37457

2950734

14.02

-0.1424501

12484860

ESPRIT HLDGS

24.7

0.2028398

10711677

HANG LUNG PROPER

3.011094

8798359

NAME AIA GROUP LTD

BELLE INTERNATIO BOC HONG KONG HO CATHAY PAC AIR CHEUNG KONG

NAME CLP HLDGS LTD

66.45

0.8345979

5338253

15.84

-0.3773585

41555641

10.7

-1.291513

4876067

SWIRE PACIFIC-A

95.75

0.7894737

2127978

12.26

2.852349

9928677

TENCENT HOLDINGS

263.8

-0.1514005

2804311

COSCO PAC LTD

2.264151

12447208

119.5

0.5046257

2593035

WANT WANT CHINA

HENDERSON LAND D

55.85

0.08960573

5143558

WHARF HLDG

73.4

0.1364256

3690411

1.934916

6626120

7.08

17127239

CHINA CONST BA-H

5.43

0.929368

255080186

CHINA LIFE INS-H

22.2

-0.8928571

25221306

CHINA MERCHANT

23.85

-0.209205

4371747

CHINA MOBILE

86.45

0.5817336

13596129

HUTCHISON WHAMPO

76.5

1.728723

17072737

CHINA OVERSEAS

19.72

14395198

IND & COMM BK-H

4.59

0.2183406

231335375

CHINA PETROLEU-H

7.23

-0.1381215

91428445

LI & FUNG LTD

11.66

-2.995008

46789826

CHINA RES ENTERP

24.95

-3.667954

5328258

MTR CORP

29.7

1.020408

5240972

HENGAN INTL HONG KG CHINA GS

1.7294

13131889

HONG KONG EXCHNG

116.9

-0.2559727

4111660

HSBC HLDGS PLC

72.55

-0.5483208

11284873

CHINA RES LAND

16.84

-1.405152

7160520

NEW WORLD DEV

12.18

1.331115

27741209

CHINA RES POWER

16.78

-1.177856

7948524

PETROCHINA CO-H

10.06

-0.984252

57425896

0.166113

11205700

TINGYI HLDG CO

27.1

HANG SENG BK

115.9

30.15

VOLUME

CNOOC LTD

CHINA COAL ENE-H

CHINA SHENHUA-H

NAME

PING AN INSURA-H

58.7

0.1706485

7405811

PRICE

DAY %

VOLUME

23.15

-1.279318

6236400

CHINA PETROLEU-H

7.23

-0.1381215

91428445

MOVERS

23.3

-0.2141328

5442394

10.08

1.921132

17039323

54.3

0.8356546

7120279

3 20995

INDEX 20888.28 HIGH

20990.29

LOW

20487.36

52W (H) 21760.33984 20485

(L) 16170.35 27-Sep

3-Oct

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.05

0.9933775

79868501

AIR CHINA LTD-H

4.87

-0.204918

8106000

ALUMINUM CORP-H

3.16

-1.557632

13686580

CHINA RAIL CN-H

6.81

-1.873199

7807811

ANHUI CONCH-H

24.45

1.242236

15281476

CHINA RAIL GR-H

3.33

-1.769912

10659410

BANK OF CHINA-H

2.95

194198634

CHINA SHENHUA-H

30.15

0.166113

11205700

BANK OF COMMUN-H

5.24

-0.3802281

20398124

CHINA TELECOM-H

4.53

1.116071

67899938

13.42

-0.739645

1651107

DONGFENG MOTOR-H

8.64

-4.530387

46055914

CHINA CITIC BK-H

3.75

1.902174

48921982

GUANGZHOU AUTO-H

4.92

-3.339882

7305829

CHINA COAL ENE-H

7.08

17127239

HUANENG POWER-H

5.88

-0.3389831

25130569

CHINA COM CONS-H

6.21

-0.9569378

12656470

IND & COMM BK-H

4.59

0.2183406

231335375

CHINA CONST BA-H

5.43

0.929368

255080186

JIANGXI COPPER-H

19.4

-1.221996

6736550

CHINA COSCO HO-H

3.15

-0.6309148

7362425

PETROCHINA CO-H

10.06

-0.984252

57425896

CHINA LIFE INS-H

22.2

-0.8928571

25221306

PICC PROPERTY &

9.56

0.4201681

9531904

CHINA LONGYUAN-H

5.09

-0.1960784

5101000

PING AN INSURA-H

58.7

0.1706485

7405811

CHINA MERCH BK-H

13.2

1.071975

13662647

SHANDONG WEIG-H

9.75

-2.694611

11286829

BYD CO LTD-H

CHINA PACIFIC-H

NAME

PRICE

DAY %

VOLUME

11.74

-0.676819

15346517

ZIJIN MINING-H

3.16

0.9584665

31477681

ZOOMLION HEAVY-H

8.73

-0.908059

8802610

12.98

4.340836

11582315

YANZHOU COAL-H

ZTE CORP-H

MOVERS

2 9920

INDEX 9828.22 HIGH

9917.61

LOW

9608.51

CHINA MINSHENG-H

6.15

0.4901961

22830682

SINOPHARM-H

25.65

3.219316

2151903

52W (H) 11916.1

CHINA NATL BDG-H

8.63

0.7001167

32061648

TSINGTAO BREW-H

43.55

1.752336

1496270

(L) 8058.58

13.98

-0.9915014

6753186

WEICHAI POWER-H

23.4

-1.473684

1346750

CHINA OILFIELD-H

9600

27-Sep

3-Oct

Shanghai Shenzhen CSI 300 NAME

NAME

PRICE

DAY %

VOLUME

4.42

1.376147

6653132

SANY HEAVY INDUS

12.58

3.79538

20569573

GD MIDEA HOLDING

9.18

29982606

GD POWER DEVEL-A

2.4

1.178203

21771481

GF SECURITIES-A

1.503759

55008052

GREE ELECTRIC

0.7092199

70420626

GUANGHUI ENERG-A

0.2188184

41381951

GUIZHOU PANJIA-A

1.344657

5111299

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.46

0.4081633

72986064

DATANG INTL PO-A

AIR CHINA LTD-A

4.98

1.219512

19358261

EVERBRIG SEC -A

ALUMINUM CORP-A

4.98

0.8097166

13491962

ANHUI CONCH-A

15.98

1.718651

BANK OF BEIJIN-A

6.87

BANK OF CHINA-A

2.7

BANK OF COMMUN-A

4.26

BAOSHAN IRON & S

4.58 14.32

BYD CO LTD -A

1.388889

NAME

PRICE

DAY %

VOLUME

9.6

2.893891

56759909

SHANDONG GOLD-MI

41.72

3.806917

26481126

9139999

SHANG PHARM -A

11.79

2.521739

9506999

1.694915

39405029

SHANG PUDONG-A

7.38

0.8196721

62930106

13.6

1.492537

77823244

SHANGHAI ELECT-A

4.04

0.4975124

7827437

21.38

1.664289

13219045

SHANXI LU'AN -A

18.75

0.9693053

23087646

14.71

0.6155951

21686447

SHANXI XINGHUA-A

38.05

3.452964

3513716

18.36

0.5476451

33780594

SHANXI XISHAN-A

13.4

0.7518797

25053580

HAITONG SECURI-A

9.58

1.698514

83902947

SHENZEN OVERSE-A

5.6

2.3766

29521649

20713394

HANGZHOU HIKVI-A

27.72

2.287823

2571122

SUNING APPLIAN-A

6.94

9.291339

121279347

CHINA CITIC BK-A

3.65

CHINA CNR CORP-A

3.64

3.409091

50355504

HENAN SHUAN-A

60.5

3.418803

4786149

TONGLING NONFE-A

19.73

2.334025

23749364

CHINA COAL ENE-A

7.09

0.7102273

12488207

HONG YUAN SEC-A

19.49

3.176284

39998167

TSINGTAO BREW-A

32.5

2.426725

2742205

CHINA CONST BA-A

3.98

1.530612

40057695

HUATAI SECURIT-A

9.64

2.662407

35702148

WEICHAI POWER-A

19.36

2.433862

9303920

CHINA COSCO HO-A

4.23

20135923

HUAXIA BANK CO

8.04

0.8782936

24704568

WULIANGYE YIBIN

33.9

1.801802

20958933

CHINA CSSC HOL-A

20.31

0.6442022

7124576

IND & COMM BK-A

3.75

0.536193

49966346

XIAMEN TUNGSTEN

40.39

3.062006

11702503

CHINA EAST AIR-A

3.25

1.5625

20386041

INDUSTRIAL BAN-A

12.01

0.9243697

38397517

YANGQUAN COAL -A

14.75

1.304945

19027643

CHINA EVERBRIG-A

2.66

0.3773585

36585868

INNER MONG BAO-A

3.186646

45006674

YANTAI CHANGYU-A

46.76

2.633889

2625896

CHINA LIFE INS-A

18.9

-0.05288207

17304473

INNER MONG YIL-A

21.3

2.749638

12942644

YANTAI WANHUA-A

13.84

-0.6460876

22078189

CHINA MERCH BK-A

10.16

0.7936508

38923065

INNER MONGOLIA-A

5.1

50009085

YANZHOU COAL-A

18.97

2.818428

9194075

CHINA MERCHANT-A

10.32

2.077151

20483231

JIANGSU HENGRU-A

30.31

0.3642384

3052547

YUNNAN BAIYAO-A

62.2

1.91709

1710812

CHINA MERCHANT-A

20.8

3.482587

10213717

JIANGSU YANGHE-A

125

2.459016

2105549

ZHONGJIN GOLD

18.19

5.083767

89061578

CHINA MINSHENG-A

5.65

0.8928571

77548107

JIANGXI COPPER-A

22.52

2.503414

17055155

ZIJIN MINING-A

4.01

3.88601

182024615

32696561

JINDUICHENG -A

11.72

2.268761

8271052

ZOOMLION HEAVY-A

8.62

2.253855

74818141

JIZHONG ENERGY-A

12.79

1.669316

23798393

11.16

5.482042

31923204

KANGMEI PHARMA-A

15.82

3.061889

12880453

245.8

2.123063

3128344

38.5

2.666667

9813763

CHINA NATIONAL-A

6.87

2.998501

CHINA OILFIELD-A

16.21

1.566416

4642748

CHINA PACIFIC-A

20.23

1.09945

19708020

CHINA PETROLEU-A

5.99

1.011804

21519153

KWEICHOW MOUTA-A

CHINA RAILWAY-A

4.58

2.232143

13848720

LUZHOU LAOJIAO-A

CHINA RAILWAY-A

2.52

2.024291

23581143

METALLURGICAL-A

2.05

0.9852217

22646335

CHINA SHENHUA-A

23.01

2.221235

23733825

NARI TECHNOLOG-A

17.74

20835387

CHINA SHIPBUIL-A

4.75

0.8492569

44901892

NINGBO PORT CO-A

2.47

0.8163265

20389837

CHINA SOUTHERN-A

3.41

1.186944

33888306

PANGANG GROUP -A

3.79

1.88172

57840098

113593886

PETROCHINA CO-A

8.78

0.6880734

11878868

13.13

0.7674597

CHINA STATE -A

3.07

2.333333

ZTE CORP-A

MOVERS

290

1 2300

INDEX 2293.106

CHINA UNITED-A

3.69

1.09589

94091043

PING AN BANK-A

15095772

HIGH

2293.11

CHINA VANKE CO-A

8.43

2.679659

76046400

PING AN INSURA-A

41.94

0.7204611

22546049

LOW

2184.46

CHINA YANGTZE-A

6.46

1.253918

18814846

POLY REAL ESTA-A

10.76

4.061896

60574137

CITIC SECURITI-A

11.79

2.166378

105292825

QINGDAO HAIER-A

11.33

3.375912

31754720

CSR CORP LTD -A

4.11

5.655527

66809291

QINGHAI SALT-A

28.96

1.046755

5758176

6.1

2.521008

64882119

SAIC MOTOR-A

13.54

4.717711

34665294

PRICE DAY %

Volume

PRICE DAY %

Volume

DAQIN RAILWAY -A

52W (H) 2781.99 2180

(L)2172.878906 26-Sep

28-Sep

FTSE TAIWAN 50 INDEX NAME ACER INC

28.8

NAME

-1.200686

11858124

FORMOSA PLASTIC

ADVANCED SEMICON

22.75 -0.2192982

11726777

FOXCONN TECHNOLO

ASIA CEMENT CORP

36.85 -0.4054054

1168410

3783055

TAIWAN MOBILE CO

113.5

-1.304348

3038502

TPK HOLDING CO L

FUBON FINANCIAL

31.5 -0.6309148

6316829

TSMC

312 -0.3194888

1610028

HON HAI PRECISIO

91.4 -0.3271538

20188003

AU OPTRONICS COR

10.6 -0.4694836

36929952

HOTAI MOTOR CO

209 -0.9478673

145202

UNI-PRESIDENT

Volume

109

0.4608295

385.5

0.9162304

2065806 5257683

89.8

0.2232143

26440245

50.3

-1.757813

6173762

UNITED MICROELEC

12.05 -0.4132231

13100736

-1.056338

8269593

HTC CORP

293.5 -0.5084746

9345828

WISTRON CORP

34.65

-1.702128

5488587

CATHAY FINANCIAL

31.5 -0.9433962

9173463

HUA NAN FINANCIA

16.35 -0.9090909

2477535

YUANTA FINANCIAL

15.25

-0.974026

12368541

CHANG HWA BANK

15.85 -0.6269592

3478417

LARGAN PRECISION

612

0.3278689

1036121

YULON MOTOR CO

57.6

-2.207131

3780422

CHENG SHIN RUBBE

76.9 -0.6459948

4352423

LITE-ON TECHNOLO

-1.333333

2488303

CHIMEI INNOLUX C

10.4

CHINA DEVELOPMEN

140.5

PRICE DAY %

-1.430274

ASUSTEK COMPUTER CATCHER TECH

NAME

82.7

0.9708738

33477180

MEDIATEK INC

7.2 -0.6896552

14308210

MEGA FINANCIAL H

22.3

-1.762115

34954186

57.9 -0.5154639

2022352

CHINA STEEL CORP

26.3

-0.754717

4783955

NAN YA PLASTICS

CHINATRUST FINAN

17.5 -0.2849003

11915183

PRESIDENT CHAIN

CHUNGHWA TELECOM

156.5

6225596

746350

4515392

QUANTA COMPUTER

77.6 -0.5128205

2472468

-2.156863

19524276

SILICONWARE PREC

33.2

3058067

DELTA ELECT INC

112 -0.4444444

2581187

SINOPAC FINANCIA

11.95

-2.04918

17329544

FAR EASTERN NEW

32.4

-2.114804

8883973

SYNNEX TECH INTL

66.3

-1.339286

2207633

FAR EASTONE TELE

71.9 -0.1388889

4514465

TAIWAN CEMENT

35.6 -0.4195804

2234146

18.05 -0.2762431

COMPAL ELECTRON

FIRST FINANCIAL

92.8 -0.7486631

321.5 -0.1552795

24.95

4970444

TAIWAN COOPERATI

FORMOSA CHEM & F

78.4

1570491

TAIWAN FERTILIZE

FORMOSA PETROCHE

86.5

-1.029748

1135592

TAIWAN GLASS IND

16.15

-0.308642

5704044

79 -0.3783102

1195413

29.4 -0.5076142

529616

MOVERS

4 5335

INDEX 5308.25 HIGH

5333.6

LOW

5276.16

52W (H) 5621.53 5275

(L) 4643.05 1-Oct

3-Oct

October 4, 2012 business daily | 13

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

MeLCo CroWn entertaInMent

MgM CHIna HoLDIngS

26.1

34.4

13.9

26.0

34.3

13.8

34.2

13.7

34.1

13.6

34.0

13.5

25.9 25.8 25.7 25.6 Max 26.05

average 25.835

Min 25.5

25.5

Last 26

Max 34.3

SanDS CHIna LtD

average 34.137

Min 34

33.9

Last 34.3

SJM HoLDIngS LtD

Max 13.86

average 13.593

Min 13.48

Last 13.68

Wynn MaCaU LtD 17.05

29.6

21.4

29.4

21.2

29.2

17.0

29.0 28.8

21.0 20.8

16.95

28.6

20.6

28.4 average 28.625

Max 29.6

Min 28.25

Last 28.4

28.2

16.9 Max 17.04

average 16.985

Commodities ENERGY

NAME

PRICE

WTI CRUDE FUTURE Nov12

91.38

-0.555011427

-7.068036205

109.8899994

78.73000336

BRENT CRUDE FUTR Nov12

110.6

-0.869409339

6.091127098

122.6499939

89.5

GASOLINE RBOB FUT Nov12

283.85

-1.069984665

13.59452537

298.8399982

218.1499958

GAS OIL FUT (ICE) Nov12

964.75

-0.873362445

7.552954292

1038.75

799.25

3.521

-0.283205891

1.207243461

4.440999985

2.565999985

HEATING OIL FUTR Nov12 Gold Spot $/Oz Silver Spot $/Oz

DAY %

YTD %

(H) 52W

311.14

-0.45112782

8.554881027

333.8899851

253.3499956

1777.68

-0.0843

13.5963

1803

1522.75

34.735

-0.2584

24.7889

37.4775

26.1513

1673.85

0.0568

20.0323

1736

1339.25

Palladium Spot $/Oz

648.55

0.3637

-0.7575

725.19

537.54 1827.25

LME ALUMINUM 3MO ($) LME COPPER 3MO ($) 3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Nov12 CORN FUTURE

2107

-0.893697084

4.306930693

2361.5

8325.5

0.313271884

9.546052632

8765

6635

2098

-0.521574206

13.71273713

2220

1718.5

18450

-1.494927923

-1.389631213

22150

15236

15.33

-0.260247235

0.822097994

14.15499973

748

-1.351796901

27.59061834

849

499

Dec12

WHEAT FUTURE(CBT) Dec12

average 20.806

Last 20.55

Min 20.4

PRICE 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 %

1.0216 1.6122 0.9359 1.2933 78.23 7.9878 7.755 6.3241 52.3138 30.66 1.2312 29.315 41.57 9599 79.914 1.21032 0.80216 8.1723 10.331 101.17 1.03

-0.8829 -0.161 0.0962 0.1161 -0.1278 -0.015 -0.0077 -0.6056 0.1552 -0.0326 -0.1868 -0.0512 0.0577 -0.0833 0.7733 -0.0231 -0.2705 -0.1652 -0.1404 -0.2372 -0.0097

YTD %

(H) 52W

0.0686 3.7251 0.2351 -0.216 -1.6873 0.1477 0.1599 -0.4601 1.4359 2.9028 5.3119 3.2884 5.4607 -5.5214 -1.8545 0.5346 3.8932 -0.4662 0.2033 -1.4925 0.0097

(L) 52W

1.0857 1.6309 0.9972 1.4247 84.18 8.0308 7.7979 6.3964 57.3275 32 1.3181 30.663 44.35 9662 88.637 1.24736 0.88308 9.0277 11.4015 111.6 1.0311

0.9388 1.5235 0.8568 1.2043 75.35 7.9823 7.751 6.2769 48.6088 30.2 1.2176 29.084 41.34 8795 72.057 1.19995 0.77553 7.7018 9.6245 94.12 1.0288

MACAU RELATED STOCKS (H) 52W

(L) 52W

2.76

1.470588

25.45454

3.25

1.93

768369

153.6999969

CROWN LTD

9.25

0.1082251

14.33869

9.4

7.47

1128057

25.29999924

19.47999954

AMAX HOLDINGS LT

0.061

-29.88506

0.119

0.055

97.98999786

64.61000061

BOC HONG KONG HO

24.7

0.2028398

34.23913

24.95

14.24

10711677

-1.434308663

19.30555556

953.25

629.5

1510.5

-1.306762496

25.43076604

1789

1115.75

COFFEE 'C' FUTURE Dec12

182.65

-0.544514021

-22.6059322

253.3999939

SUGAR #11 (WORLD) Mar13

21.44

-0.694766095

-8.219178082

COTTON NO.2 FUTR Dec12

71.85

-18.20355191

World Stock MarketS - Indices COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

13482.36

-0.2423214

10.35232

13653.24

10404.49

NASDAQ COMPOSITE INDEX

3120.042

0.2090551

19.76439

3196.932

2298.89

FTSE 100 INDEX

5799.43

-0.1724776

4.076436

5989.07

DAX INDEX

7299.08

-0.09280222

23.74783

NIKKEI 225

8746.87

-0.4459342

HANG SENG INDEX

20888.28

CSI 300 INDEX

TAIWAN TAIEX INDEX

NAME

PRICE

DAY % YTD %

VOLUME CRNCY

CENTURY LEGEND

0.24

4.347824

0.335

0.204

CHEUK NANG HLDGS

3.89

1.302083

38.92857

3.94

2.3

166247 14395198

CHINA OVERSEAS

19.72

52.09715

20.4

9.979

CHINESE ESTATES

11.08

0.7272727

-11.36

13.26

8.3

108167

CHOW TAI FOOK JE

10.7

-3.07971

-23.13218

15.16

8.4

5907387

EMPEROR ENTERTAI

1.51

-1.30719

36.03603

1.57

0.97

130000

FUTURE BRIGHT

1.34

4.6875

219.0476

1.34

0.3

6930000

82.58427

26.15

8.69

21519114

HANG SENG BK

119.5

0.5046257

29.67987

119.6

84.4

2593035

4868.6

HOPEWELL HLDGS

27.45

2.425373

38.21752

27.5

18.56

2313072

7478.53

5125.44

HSBC HLDGS PLC

72.55

-0.5483208

22.9661

74.15

11284873

3.447764

10255.15

8135.79

HUTCHISON TELE H

3.45

0.5830904

15.38462

3.88

2.57

4396244

0.2298423

13.31147

21760.33984

16170.35

LUK FOOK HLDGS I

24.25

-6.007752

-10.51661

37.1

14.7

5052730

MELCO INTL DEVEL

1.010101

21.31716

8.28

4.3

2644000

2293.106

1.838108

-2.243895

2781.99

2172.878906

MGM CHINA HOLDIN

13.68

1.937407

42.61657

14.76

7.6

4039818

7684.63

-0.4411376

8.661523

8170.72

6609.11

MIDLAND HOLDINGS

4.64

0.6507592

17.34813

5.217

2.887

1812000

NEPTUNE GROUP

0.169

52.25225

0.222

0.08

5732000

NEW WORLD DEV

12.18

1.331115

94.56868

12.28

6.13

27741209

SANDS CHINA LTD

28.4

-1.899827

29.38496

33.05

14.9

13669482

SHUN HO RESOURCE

1.24

1.37

0.82

SHUN TAK HOLDING

2.98

-0.6666667

16.4459

3.51

2.241

3417801

KOSPI INDEX

1996.03

9.327179

2057.28

1658.06

S&P/ASX 200 INDEX

4438.561

0.1258295

9.416857

4454.6

3840.2

4251.511

-0.1251633

11.2381

4272.829

3256.442

FTSE Bursa Malaysia KLCI

1649.75

-0.07752736

7.775377

1655.49

1353.45

NZX ALL INDEX

850.981

0.3410019

16.60464

851.391

712.548

JAKARTA COMPOSITE INDEX

20.4 Max 21.4

ARISTOCRAT LEISU

859

SOYBEAN FUTURE Nov12

NAME

Last 17.04

(L) 52W

Platinum Spot $/Oz

LME ZINC

Min 16.92

CURRENCY EXCHANGE RATES

NATURAL GAS FUTR Nov12

METALS

13.4

GALAXY ENTERTAIN

SJM HOLDINGS LTD

17.04

1.067616

36.25965

17.614

10.079

9802000

SMARTONE TELECOM

15.26

-1.293661

13.54167

17.5

9.8

2316942

WYNN MACAU LTD

20.65

-1.431981

5.897436

25.5

14.62

8887960

ASIA ENTERTAINME

2.93

-3.30033

-50.17007

7.49

2.4

79871

48.99

-0.6489556

23.83721

49.69

24.74

524635

PHILIPPINES ALL SHARE IX

3556.93

0.2310686

16.81061

3558.72

2729.61

HSBC Dragon 300 Index Singapor

599.96

0.55

20.88

STOCK EXCH OF THAI INDEX

1305.57

27.33293

1311.67

843.69

BALLY TECHNOLOGI

HO CHI MINH STOCK INDEX

385.37

0.2732098

9.620255

492.44

332.28

BOC HONG KONG HO

3.15

31.40399

3.3

1.81

379

Laos Composite Index

1048.96

16.62108

1067.27

876.33

GALAXY ENTERTAIN

3.3175

1.452599

77.40642

3.3175

1.08

1000 3711806

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

INTL GAME TECH

13.22

1.302682

-23.13954

18.1701

10.92

JONES LANG LASAL

77.47

0.5190087

26.46099

87.52

46.01

204132

LAS VEGAS SANDS

45.88

-0.5635024

7.371871

62.09

34.72

5826660

MELCO CROWN-ADR

13.41

-1.973684

39.39709

16.02

7.05

2943824

MGM CHINA HOLDIN

1.69

41.81503

1.96

1.0025

2000

MGM RESORTS INTE

10.58

-1.028999

1.438156

14.9401

7.4

10043656

SHUFFLE MASTER

15.88

-0.4388715

35.49488

18.77

7.55

234076

2.15

33.742

2.2782

1.2624

15000

114.61

-0.8392455

3.728846

138.28

90.108

1415741

SJM HOLDINGS LTD WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily October 4, 2012

Opinion How to make an ailing world economy even sicker Clive Crook

Bloomberg View columnist

our years after the onset of the recession, the U.S. is recovering weakly, Europe isn’t recovering at all, and prospects in the rest of the world are far from thrilling. It’s an outlook that makes curbing public debt hazardous, yet governments everywhere are deciding that the job can’t wait. They’re half-right. To think fiscal control can be postponed indefinitely is foolish. Believable plans to curb public borrowing would calm financial markets and reduce the risk of spikes in long-term interest rates. But the policy has to be patient and methodical, because doing too much too soon is even riskier than doing nothing. The combination of weak demand and harsh fiscal restraint – not just in one country or region, but globally – is a death trap, especially if overzealous monetary policy is part of the mix, as in Europe. If you need persuading, read the case studies in Chapter 3 of the International Monetary Fund’s new World Economic Outlook (published to coincide with the global finance ministers’ meeting that starts next week).

Expansionary myth The debate about the right pace of fiscal restraint is polarised. At one extreme is the view that severe austerity has to start yesterday. Some

even say that big cuts in public spending would give confidence such a boost that private spending would rise for a net increase in demand – “expansionary austerity” as it’s called. At the other extreme is the idea that public debt will melt away of its own accord once growth picks up. Fiscal austerity isn’t just unnecessary, in this view, it’s self-defeating, because it slows growth. As you might expect, the truth is in between. Fiscal restraint, other things equal, subtracts demand and slows recovery. Expansionary austerity doesn’t work. On the other hand, countries with high and rising public debt (more than 100 percent of output, say) seem to suffer a growth penalty. There’s no clear boundary between good and bad debt ratios, says the IMF, and the connections between debt and growth are complicated, but high levels of debt can’t be left to take care of themselves. So the question for highly indebted countries is not whether to control public debt but how to do it without killing the recovery. The IMF’s case studies shed some light on this – though the findings aren’t hugely encouraging. One benchmark is the U.K.’s experience after 1918. By the end of the First World War, the country’s debt had risen to 140 percent of output. The government resolved to

pay off the debt and bring prices, which had doubled during the war, back to where they’d been in 1914. The idea was that the debts would be honoured in full, rather than repaid in a devalued currency. The results were catastrophic. Growth was so badly hammered that the debt ratio, after dipping in the mid-1920s, kept rising despite budget surpluses all through the decade. By 1933, it was 190 percent of GDP. Other European countries were devaluing their currencies, so British competitiveness suffered and weak exports made the slump even worse. Admittedly, it’s an extreme case. Still, the parallel with Europe today is hard to miss. Spain and other distressed debtors are undergoing severe fiscal retrenchment. Monetary policy isn’t aiming for outright deflation, but a new central bank that wants to establish its anti-inflation credentials is being less accommodating than it could be. There’s no intra-European exchange rate to devalue, so countries like Spain can’t boost their competitiveness that way. It’s a formula for endless recession.

1945. The war increased U.S. public debt 10-fold, to 120 percent of output. The ratio came down thanks to fairly tight fiscal policy, very loose monetary policy, inflation (which reduced the debt ratio by expanding the nominal value of output), and administrative measures to prevent the rise in nominal interest rates that inflation would otherwise have caused. The economy grew at a good clip, and the debt came down.

Seductive alternatives

It was a good mixture, but difficult to replicate today. Those administrative measures – “financial repression” is the term of art – would be hard to impose on today’s

The case studies suggest two better alternatives – though the first is a little too seductive. That’s the U.S. after

The question for highly indebted countries is not whether to control public debt but how to do it without killing the recovery

vastly more complex and sophisticated financial markets. Without them, inflation would push nominal interest rates higher, blunting the beneficial effect on the debt ratio. Even if it could be done, the Federal Reserve would rightly hesitate to rely so much on inflation, because it might destroy the reputation the central bank built at such cost in the 1980s. The third approach is suggested by the case studies of Belgium (1992-2002), Canada (1995-2005) and Italy (19972007). In all three countries, fiscal restraint was combined with relative monetary ease. Where austerity took the form of long- term structural reforms, rather than temporary expedients, it worked better. Also, in Belgium and Canada, strong demand from abroad helped alongside monetary policy to support growth as public borrowing was scaled back. That last point is the main ground for pessimism about the global economy today. Too many countries are trying to pursue the same strategy at once. As the IMF says, “The implications for today are sobering – widespread fiscal consolidation efforts, deleveraging pressures from the private sector, adverse demographic trends, and the aftermath of the financial crisis are unlikely to provide the supportive external environment that played an important role in a number of previous episodes of debt reduction. Expectations about what can be achieved need to be set realistically.” Fiscal shock and awe is suicidal in these circumstances. Governments need to make their fiscal retrenchment gradual. (Think of the “fiscal cliff” in the U.S. Do the opposite of that.) Central banks meanwhile – Europe’s especially – must keep monetary policy loose. (Think of the Federal Reserve in the U.S. Do the same thing, only more so.) The lack of any plausible “external support” for struggling economies tilts the policy- balance further in the direction of taking a measured risk with inflation – that is, if any such risk were apparent right now, which it isn’t. The situation is serious, but it’s never too late for ham- fisted austerity plus exaggerated monetary rectitude to make things hopeless. Bloomberg View

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Newsdesk Vitor Quintã (Chief Reporter) Tony Lai, Xi Chen Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com

October 4, 2012 business daily | 15

OPINION Business

wires Leading reports from Asia’s best business newspapers

Business Inquirer The Philippine foreign exchange reserves, which recently breached the US$80-billion mark, are seen to have hit an “excessive and costly” level. According to Johanna Chua, chief economist for Asia Pacific at Citi, some indicators would show that the gross international reserves (GIR) of the Philippines are already the second-highest in the region, following China’s. However, Ms Chua said foreign-exchange accumulation entails costs, and so having more than enough is imprudent. “The reserves are almost excessive, if not already excessive,” Ms Chua was quoted as saying.

Economic Times India’s civil aviation minister, Ajit Singh, on Tuesday warned Kingfisher Airlines that the regulator cannot ignore frequent cancellation of flights. It was the first sign that the government is getting increasingly irritated with the rising number of disruptions in the airline’s schedule. “Disruption of [flight] schedule has become an issue with Kingfisher Airlines … Kingfisher has to also ensure that they operate flights as per the schedule they have submitted,” Mr Singh told the newspaper.

Yomiuri Shimbun Nippon Steel & Sumitomo Metal Corp. (NSSMC) was officially inaugurated with the merger of Nippon Steel Corp. and Sumitomo Metal Industries Ltd into the world’s second-largest steelmaker. “I’m convinced we will be able to survive intense global competition as we are the No. 1 steelmaker in comprehensive strength,” chairman and chief executive Shoji Muneoka, the former president of Nippon Steel, was quoted as saying. NSSMC produces about 46 million tonnes of crude steel annually, half of Luxembourgbased ArcelorMittal, the world’s largest producer.

Jakarta Globe A group of 10 business associations called on the Indonesian government to stand firm to curb “excessive behaviour” in labour protests. The group said the spate of labour rallies has turned into a serious criminal offence and is hurting the country’s business climate. Franky Sibarani, the secretary general of the Indonesian Food and Beverage Association, a member of the group, said that several labour unions have threatened to stage a rally that could disrupt factory production and public facilities.

Macro malpractice Stephen S. Roach

Member of the faculty at Yale University, was chairman of Morgan Stanley Asia

he wrong medicine is being applied to America’s economy. Having misdiagnosed the ailment, policymakers have prescribed untested experimental medicine with potentially grave side effects. The patient is the American consumer – the world’s biggest by far, but now in the throes of the worst funk since the Great Depression. Recent data on consumer spending in the United States have been terrible. Growth in inflationadjusted U.S. personal consumption expenditure has just been revised down to 1.5 percent in the second quarter of 2012, and appears to be on track for a similarly anaemic increase in the third quarter. Worse, these numbers are just the latest in what has now been a four-and-ahalf-year-old trend. From the first quarter of 2008 through the second quarter of 2012, annualised growth in real consumption spending has averaged a mere 0.7 percent – all the more extraordinary when compared with the precrisis trend of 3.6 percent in the decade ending in 2007. The disease is a protracted balance-sheet recession that has turned a generation of America’s consumers into zombies – the economic walking dead. Think Japan, and its corporate zombies of the 1990’s. Just as they wrote the script for the first of Japan’s lost decades, their counterparts are now doing the same for the U.S. economy. Two bubbles – property and credit – enabled a decade of excessive consumption. Since their collapse in 2007, U.S. households have understandably become fixated on repairing the damage. That means paying down debt and rebuilding savings, leaving consumer demand mired in protracted weakness.

Long term problem Yet the treatment prescribed for this malady has compounded the problem. Steeped in denial, the Federal Reserve is treating the disease as a cyclical problem – deploying the full force of monetary accommodation to compensate for what it believes to be a temporary shortfall in aggregate demand. The convoluted logic behind this strategy is quite disturbing – not only for the U.S., but also for the global economy. There is nothing cyclical about the lasting aftershocks of a balance-sheet recession that have now been evident for nearly five years. Indeed, balance-sheet repair has barely begun for U.S. households. The personal-saving rate stood at just 3.7 percent in August 2012 – up from the 1.5 percent low of 2005, but half the 7.5 percent average recorded in the last three decades of the

twentieth century. Moreover, the debt overhang remains massive. The overall level of household indebtedness stood at 113 percent of disposable personal income in mid-2012 – down 21 percentage points from its pre-crisis peak of 134 percent in 2007, but still well above the 1970-1999 norm of around 75 percent. In other words, Americans have much farther to go on the road to balance-sheet repair – which hardly suggests a temporary, or cyclical, shortfall in consumer demand. Moreover, the Fed’s approach is severely compromised by the so-called zero bound on interest rates. Having run out of basis points to cut from interest rates, the Fed has turned to the quantity dimension of the credit cycle – injecting massive doses of liquidity into the collapsed veins of zombie consumers.

Untested medicine is being used to treat the wrong ailment – and the chronically ill patient continues to be neglected

To rationalise the efficacy of this approach, the Fed has rewritten the script on the transmission mechanism of discretionary monetary policy. Unlike the days of yore, when cutting the price of credit could boost borrowing, “quantitative easing” purportedly works by stimulating asset and credit markets. The wealth effects generated by frothy financial markets are then presumed to rejuvenate long-dormant “animal spirits” and get consumers spending again, irrespective of lingering balance-sheet strains. There is more: Once the demand problem is cured, according to this argument, companies will start hiring again. And then, presto – an unconventional fix magically satisfies the Fed’s longneglected mandate to fight unemployment.

Wrong focus But the Fed’s policy gambit has taken the U.S. down the wrong road. Indeed, the Fed has doubled down on an approach aimed at recreating

the madness of an asset- and credit-dependent consumption model – precisely the mistake that pushed the U.S. economy toward the abyss in 2003-2006. Just as two previous rounds of quantitative easing failed to accelerate U.S. households’ balance-sheet repair, there is little reason to believe that “QE3” will do the trick. Quantitative easing is a blunt instrument, at best, and operates through highly circuitous – and thus dubious – channels. Significantly, it does next to nothing to alleviate the twin problems of excess leverage and inadequate saving. Policies aimed directly at debt forgiveness and enhanced saving incentives – contentious, to be sure – would at least address zombie consumers’ balance-sheet problems. Moreover, the side effects of quantitative easing are significant. Many worry about an upsurge in inflation, though, given the outsize slack in the global economy – and the likelihood that it will persist for years to come – that is not high on my watch list. Far more disconcerting is the willingness of major central banks – not just the Fed, but also the European Central Bank, the Bank of England, and the Bank of Japan – to inject massive amounts of excess liquidity into asset mar-

kets – excesses that cannot be absorbed by sluggish real economies. That puts central banks in the destabilising position of abdicating control over financial markets. For a world beset by seemingly endemic financial instability, this could prove to be the most destructive development of all. The developing world is up in arms over the major central banks’ reckless tactics. Emerging economies’ leaders fear spillover effects in commodity markets and distortions of exchange rates and capital flows that may compromise their own focus on financial stability. While it is difficult to track the cross-border flows fuelled by quantitative easing in the socalled advanced world, these fears are far from groundless. Liquidity injections into a zerointerest-rate developed world send return-starved investors scrambling for growth opportunities elsewhere. As the global economy has gone from crisis to crisis in recent years, the cure has become part of the disease. In an era of zero interest rates and quantitative easing, macroeconomic policy has become unhinged from a tough post-crisis reality. Untested medicine is being used to treat the wrong ailment – and the chronically ill patient continues to be neglected. © Project Syndicate

16 |

business daily October 4, 2012

CLOSING U.K. service sector growth slows Britain’s service sector growth slowed in September and services providers shed jobs for the first time in 10 months, a survey showed yesterday, casting more doubt over the chances of a sustained recovery. The drop in the services Purchasing Managers’ Index (PMI) to 52.2 from 53.7 in August was larger than economists had forecast. The PMI pointed to underlying quarterly economic growth of just 0.1 percent in the third quarter, said Chris Williamson, chief economist at survey compiler Markit.

Factory workers strike across Indonesia Hundreds of thousands of factory workers went on strike across Indonesia yesterday demanding better pay and job security as Southeast Asia’s biggest economy booms. Police estimated around 750,000 workers took to the streets for the one-day walkout in at least 12 provinces, while unions said more than two million took part. “We are calling for an end to the use of contract workers and a rise in the minimum wage,” Nining Elitos, from the Indonesian Confederation of Workers’ Unions, told AFP.

No Wall Street joy as US banks cash in Six biggest American banks posted highest profits since 2006 in last four quarters but mood remains gloomy

our years ago today, President George W. Bush signed into law the biggest corporate rescue in American history. Even as United States unemployment has remained above 8 percent for 43 months, the country’s biggest banks are making almost as much as they ever have. The combined US$63 billion (500 billion patacas) in profit reported by the six

largest American lenders over the four quarters through June is more than they earned in any calendar year since the peak in 2006. Bank of America Corp. made more in the 12-month period than Walt Disney Co. and McDonald’s Corp. combined. Citigroup Inc., which like Bank of America took US$45 billion in taxpayer funds, earned more than Caterpillar

Inc. and Boeing Co. JPMorgan Chase & Co., the largest United States bank by assets, had profits of more than US$17 billion even after reporting a US$5.8 billion trading loss. Still, Wall Street isn’t enjoying its good fortune. Those billions of dollars in profits aren’t enough, according to interviews with more than a dozen bank executives and analysts.

The lowest leverage in a decade, return on equity at a third of 2006 levels, higher capital requirements, shares trading below book value, declining bonuses, job cuts, the European sovereign-debt crisis and a backlash against bankers have damped the joys of profit, they said. Wells Fargo and JPMorgan both broke profit records in 2011 and are expected to do so again next

year, according to analysts’ estimates compiled by Bloomberg. JPMorgan gets more attention for the trading loss than for its profits, Mr Schlosstein said, and “there’s an element of unfairness to that.” Talk of unfairness to banks so soon after the financial crisis confounds Michael Greenberger, a former director of markets at the Commodity Futures Trading Commission. “When the banks say, ‘We’re doing very well but not getting a return on our capital,’ it’s completely incomprehensible, and it’s angering to the average American,” said Greenberger, who teaches derivatives at the University of Maryland’s law school. “They’re making billions of dollars in profits. That’s the bottom line.” The US$63 billion profit for the 12 months ended June 30 was exceeded only in calendar years 2005 and 2006. While the latest figure is about half of what the six banks earned in 2006 when firms purchased during the financial crisis are included, they are still among the nation’s biggest money makers. Fewer than 20 companies, including the banks, made US$10 billion in the four quarters though June. Bloomberg

EU nuclear repairs may cost US$32 bln Draft report says nearly all the EU’s 143 nuclear plants need improving

tilities may have to spend as much as 25 billion euros (US$32 billion) to increase safety at Europe’s nuclear reactors after improvements were identified during checks, according to a draft document. Upgrades may cost between 30 million euros and 200 million euros per reactor, the European Commission wrote in the document obtained by Bloomberg News. The region has 134 nuclear reactors in operation. The bloc’s regulatory arm is due to be published on October 4 a policy paper on safety assessment of atomic power plants in the region conducted in a response to Japan’s nuclear accident last year caused by an

earthquake and tsunami. The checks covered threats from natural disasters as well as plane crashes and explosions close to atomic stations. “On the basis of the stress tests, practically all nuclear power plants need to undergo safety improvements,” the document said. The report – the wording of which could change before today’s final version is published – points out that in the EU, 47 nuclear power plants with 111 reactors have more than 100,000 inhabitants living within a circle of 30km. In France, Europe’s largest nuclear power producer which relies on 58 nuclear reactors for 80 percent of its electricity,

specific failings were found in all nuclear reactors. Safety upgrading measures are unlikely to boost investment costs for new nuclear generation capacity in Europe if the best available technologies are chosen, according to the draft. The commission will also say that the recurrence of nuclear incidents even in nations with good safety records confirms the need for “thorough safety reviews on a regular basis” and highlights the need for close cooperation and information sharing between operators, vendors, regulators and European institutions, the document showed. The commission’s recommendations will be

The draft report found specific failings in all 58 of France’s nuclear reactors

communicated to EU leaders at their October 18 to October 19 summit in Brussels. The bloc’s regulatory arm will report on the implementation of the recommended measures in June 2014 and aims to ensure

that the “vast majority” of the required improvements are enacted by 2015, according to the draft policy paper. The commission said it doesn’t comment on draft documents. Bloomberg