Macau business daily, Sept 10th by Business Daily

’The Voice China’ travels to Macau The mainland’s biggest reality television show, ‘The Voice China’, is coming to Macau this month. A source told Business Daily that the producers had done a deal with Sands China Ltd to bring one of the show’s semi-finals to the Venetian Macao’s CotaiArena on September 21. The show has more than 120 million viewers and another 400 million online.

Tourism

Macau must learn to reap the benefits T

he number of inbound tourists is expected to soar as millions of mainland internal migrants can now travel to Macau more simply than ever. While there are fears here that a simplified access scheme for millions of mainlanders may put more a strain on the city’s infrastructure, the secretary-general of the World Tourism Organisation says Macau must learn how to reap the benefits of the tourism boom. Taleb Rifai says an optimum number of tourists cannot be

set, thus setting limits would not be a practicable solution. “I don’t believe there is a tipping point. There is no secret, no magic formula on how many people should come to a place,” Mr Rifai said. Instead, Macau agents should focus on luring “smarter investment” to the city. The priority should be to ensure the public benefit from increased tourist arrivals, Mr Rifai said.

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More and different homes could help solve the troubles in the real estate market, says Rose Lai Neng, an associate professor of finance at the University of Macau. In an interview with Business Daily, Ms Lai urges the government to introduce a proportional property tax to rein in housing prices. The administration should also carry out a study to identify what is the demand here, she says.

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Cheaper prices to lure air freight With air freight volume tumbling fast, shipping cargo to or from the Macau airport will become cheaper in about six months. Handling cargo through the airport here will be at least 15 percent cheaper than in Guangdong, the head of the Logistics Development Committee, Wong Wan, told reporters. The goal is to attract exporters from the neighbouring regions and stop a six-year falling trend in air freight volume.

%Day

CHINA COAL ENE-H

8.21

AIA GROUP LTD

6.84

BANK OF COMMUN-H

6.58

CHINA SHENHUA-H

6.10

IND & COMM BK-H

6.10

CHINA RES POWER

1.16

CHINA PETROLEU-H

1.16

CHINA MOBILE

0.98

MTR CORP

0.71

CITIC PACIFIC

-0.43

Source: Bloomberg

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News where it matters

North West vows to sail again

Packer to consolidate hold on gaming Page 3

www.macaubusinessdaily.com

APEC pledges to liberalise trade Page 4

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Year I - Number 116 Monday September 10, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00

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business daily September 10, 2012

macau

‘No tipping point’ in tourism Macau must learn how to reap the benefits of the tourism boom, says the secretary-general of the World Tourism Organisation Vítor Quintã

vitorquinta@macaubusinessdaily.com

illions of mainland internal migrants can now travel to Macau more simply than before, which may put more a strain on the city’s infrastructure. But Taleb Rifai, the secretary-general of the World Tourism Organisation, a UN body, says that imposing limits is not the way to cope because there is no optimum number of tourists. Mr Rifai is here to take part in the Global Tourism Economy Forum, which began yesterday at the Macau Tower Convention and Entertainment Centre. He told a seminar at the Institute for Tourism Studies on Saturday that the priority must be to ensure the public benefit from increased tourist arrivals, increasing their quality of life. Tourism development must not become “a trade-off between a better life and a better environment,” Mr Rifai said. “We need smarter investment.” He said Macau might be overwhelmed by the sheer number of visitors but it was not unique in struggling to find the right balance. In other leading tourism cities,

such as Venice, he said “people feel like it’s not their city any more but deep down inside they wouldn’t be willing to give up on the benefits” that tourism can bring to their lives. Beijing has eased restrictions on millions of internal migrants working or studying in six big cities, including neighbouring Guangzhou. The change means Macau can expect to receive more visitors than last year’s 28 million tourist arrivals. Government Tourist Office director José Manuel Costa Antunes has said the city can handle more visitors and Mr Rifai agrees. “I don’t believe there is a tipping point. There is no secret, no magic formula on how many people should come to a place,” Mr Rifai said. “I’m not very alarmed by the number of people that are coming in. The key is not to reduce the numbers or to impose limits. Numbers are always subject to management of crowds. “The principle of growth must never be compromised. It must be a challenge that we should turn to the advantage of the people and the environment. “I think what we should do is

The head of the World Tourism Organisation says the growing number of tourists is an opportunity to improve residents’ lives

make sure that the people of Macau feel that with more and more visitors, they benefit more and more.

“Services available to tourists should always be available to residents as well, if not as a priority.”

Tsars open global tourism talkfest Sustainability concerns take centre stage on opening day of influential tourism forum Xi Chen

xi@macaubusinessdaily.com

high-level group of tourism officials and experts started yesterday seeking to open a new chapter in the tourism industries of Asia, measuring the impact of tourism on economic growth and on how to work towards making it more sustainable. The opening day of the Global Tourism Economy Forum at the Macau Tower Convention and Entertainment Centre featured a stellar line-up of officials and businessmen. “The Global Tourism Economy Forum will have important and longlasting impacts for the development of Macau, China and the world,” said Edmund Ho Hau Wah, vicechairman of the Chinese People’s Political Consultative Conference and the Forum chairman. “The forum was organised with the aim of achieving sustainability and perpetuating the momentum of Macau’s tourism economy in line with national policy.” In his speech to open the forum, Chief Executive Fernando Chui Sai On said the government would continue offering its support to diversify, upgrade and internationalise the economy, as well as developing the related hospitality, retail and convention businesses. Tourism receipts account for more than 80 percent of Macau’s revenue. In the twelfth Five-Year Plan for

National Economic and Social Development, Beijing has a stated aim to develop Macau as a leading tourism and leisure hub. The mainland is the second biggest market for tourism. In terms of travel and tourism’s contribution to gross domestic product, China is second only to the United States with an increase from US$14.7 billion (117.4 billion patacas) in 1990 to US$139.4 billion in 2010. “In 2010, tourism became a strategic industry for Chinese economic development, which further provides more room for the industry to grow,” said vice-chairman of the Chinese People’s Political Consultative Conference, Huang Mengfu. He said there were 2.64 billion domestic trips, 147 million inbound tourists and 70 million outbound tourists last year alone. Globalisation has significantly changed the landscape of international tourism, said Sha Zu Kang, the Secretary-General of the UN Conference on Sustainable Development 2012. Tourist arrivals to the Asia-Pacific region reached 217 million last year, a tremendous increase from 23 million in 1980. Mr Sha said the environmental impact of global tourism was substantial and urged governments to take measures to protect natural resources and respect culture and traditions.

September 10, 2012 business daily | 3

MACAU

Ferry company plots a comeback

editorial

North West Express says it wants to sail again if it is able to renegotiate the rent it pays to use the Tuen Mun pier in Hong Kong

Setting a good example

Tony Lai

tony.lai@macaubusinessdaily.com

ong Kong North West Express Ltd has said it intends to resume ferry services to Macau once it has negotiated a reasonable rent for the use of a pier in Hong Kong. North West Express’s chief operating officer, Koji Chan, told a press conference on Friday that it was abandoning its services because it could no longer afford the HK$2.32 million (US$299,000) a month it pays for the use of Tuen Mun pier in northwestern Hong Kong. To pay the rent North West would have to sell at least 550 ferry tickets every day. Its lease on the pier ends today. The company told the Macau Maritime Administration on Thursday that it was surrendering its licence to operate services between Macau and the New Territories of Hong Kong. Mr Chan said there were no plans to wind up the company, which was considering options for restarting operations. He said North West Express wished to regain its licence to operate and the right to use the Tuen Mun pier. Once the Hong Kong government invited bids for the use of that part of the pier vacated by North West, the

Tiago Azevedo

tiago.azevedo@macaubusinessdaily.com

E North West Express will lay off employees working at the Macau Outer Harbour Ferry Terminal

company would probably present a proposal, he said. Mr Chan said North West Express would lay off nine employees working at the Macau Outer Harbour Ferry Terminal. He said the company would pay severance of more than 180,000 patacas to nine staff. The company paid refunds to

more than 1,300 customers that bought tickets before it suspended its services on July 1 because of safety problems with the two vessels. North West Express began operating in April last year and has carried more than 470,000 passengers between Hong Kong and Macau,. More than 11 million visitors came to Macau by sea last year.

Zest to put fresh juice into Philippines air links Airline owned by drinks firm boss wants to launch new Manila service

A Zest Air Airbus A320-232

Philippines airline owned by a Chinese-Filipino juice drink entrepreneur says it might launch flights between Manila and Macau this autumn. Zest Airways Inc. – controlled by Alfredo Yao, head of the Zest-O Corporation, one of the largest soft beverage firms in the Philippines – has applied to run a three-times-per-week service under the Zest Air brand, the Macau Aviation Authority confirmed. The Philippines is currently one of the foreign destinations best served by Macau International Airport. But low-cost operator Zest Air says there is room in the market for more air passenger capacity. Existing low-cost flights are often sold out. There were approximately 14,000 non-resident

workers from the Philippines in Macau at the end of the first half of this year according to figures from Macau’s Human Resources Department. There are also growing business and leisure links between Macau and Manila’s developing casino market. According to Macau International Airport’s online departure timetable, the national carrier Philippine Airlines goes four times per week to Manila International Airport. Low-cost carrier Cebu Pacific Air, owned by Cebu Air Inc., flies there seven times per week, and four times a week to Clark says the airport website. AirAsia Bhd, controlled by Malaysian entrepreneur Tony Fernandes – majority owner of

English Premier League soccer team Queens Park Rangers and principal of the Caterham F1 Formula One motor racing team – is listed on the airport site as flying to Clark seven times every week. Last week a number of delegates to an aviation industry conference in Macau – organised by the Centre for Asia Pacific Aviation – urged the government to take a lead in the region by turning Macau into a hub for low-cost carriers. Several also said the right of the city’s flag carrier Air Macau Co. Ltd to first refusal on new routes for companies that want to be based here was slowing down new service approvals and stunting the air travel market. A.E.

nough with the warnings, it is time the government learnt from its mistakes and performed better when budgeting for and managing the building of public works. Too many mistakes have been made and, unfortunately, the lesson has not been learned. Public projects need to be better planned. Delays, budget overruns and legal battles are widespread in most tenders: from the Light Rapid Transit elevated railway to the Areia Preta wastewater plant, the Taipa ferry terminal and the Hengqin Island campus of the University of Macau. Last week’s reports on the costs of building the light rail network from the Commission of Audit and the Commission against Corruption showed the gaps in the government’s administration of bidding for public works. The budget to build the light rail system has increased from about 4.2 billion patacas (US$525.7 million) to more than 11 billion patacas. The budgets for some construction jobs have been overrun, some contracts have been granted directly to companies without a transparent, public process, and there is clearly a lack of oversight across the entire project. As with many large-scale works here, the dogs bark but the caravan goes on. The government blames the rising cost of construction materials, the exchange rate and they have attempted to moderate expectations, saying this is the first time the city has attempted such a big undertaking. Why then does the government pay consultants to advise on managing these types of projects? They are paid to bring know-how that the administration lacks. Is it that difficult to hire experts who can estimate costs? Macau has never built infrastructure as complex as the light rail network but it has experience in managing public projects and the government should know where they had previously gone wrong. One lesson that has not been heeded was the East Asian Games in 2005. The games had an initial budget of 2 billion patacas. The construction costs ran to 3.4 billion patacas, while the main venue, the Macau Dome, cost 1.2 billion patacas – 80 percent more than budgeted. This mismanagement occurs because Macau has piles of money to dish out. If there was less money in the government’s annual budget, public resources might be used better. Doubts now extend beyond the rail project’s budget. The corruption commission’s report says the Transport Infrastructure Office does not have the technical justifications to support the selected route of the rail line. Residents in the NAPE area have fought against the option of driving the LRT through the district’s narrow, crowded streets. The government says this is the best technical solution and that it has properly canvassed the public. But for a project of this nature, a public consultation does not cut it. Technical decisions cannot be based on what the wider public thinks, because quite often they lack the know-how to make the correct decision. It is unusual that the transport office has never provided the technical justifications to support its preferred route. The public now know why: the corruption watchdog says it did not have one. One must applaud the efforts of the neighbourhood association. It is good to know that people want the government to be supervised and they will act to protect the public interest. Let us hope their actions set an example. There must be more public participation to steer Macau into the future.

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business daily September 10, 2012

macau Island home for slot research

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Macau and Taiwan should build a research and development centre for slot machines on Hengqin Island, according to Mocha Club President Constance Hsu. Ms Hsu told guests at a seminar in Taiwan on Friday that a slot machine research centre had the potential to be one of the biggest in Asia. The Chinese-language newspaper Macao Daily News quoted Ms Hsu as saying that Taiwanese companies were winning market share from Western machine makers that supply the majority of slot machines in Macau.

HOSPITALITY Labour pains The tourism sector is struggling to beat a shortage of human resources and instability in staffing, which are likely to translate into lower standards of service. The Statistics and Census Service surveys the needs of the city’s leading business sectors. They provide insight into the structure of the labour market. Unfortunately the surveys take place at different times for different parts of the tourism industry, which makes direct comparisons problematic. However, the data can some insight on the difficulties businesses face in hiring and retaining staff.

MPEL’s Packer set for A$1 bln payday with media sale Macau casino partner likely to consolidate hold on Australian VIP gaming Associate Editor

J The three sectors in this analysis show workers are leaving the sector in their thousands. The turnover rates are significant. The business with the lowest turnover rate is, without surprise, the casinos. About 5.9 percent of its workforce was turned over at the end of the second quarter. Hotels and restaurants had higher turnover rates of 7.2 percent and 8.1 percent, respectively. These figures suggest instability in the workforce, which would lead to increased training costs and reduce the productivity gains that come from experience.

The net flow of employment – the number of new recruits, less workers leaving the business – in each industry and the number of vacancies, suggests additional problems. There were almost 2,400 jobs created in hotels. However, the number of vacancies was far greater. That is, to satisfy its needs, it would have needed to double the number of additional jobs created. Casinos face a similar situation but this is the sector with the lowest vacancy rate, at 3.9 percent of the workforce. The city’s restaurants have the most difficult situation. Their vacancy rate stood at mote than 15 percent of their workforce. They saw their total employment figures contract, suggesting great difficulties in attracting and keeping staff. J.I.D.

ames Packer – a 33.6 percent shareholder in Macau casino operator Melco Crown Entertainment Ltd – is likely to make A$1 billion (8.3 billion patacas) from the sale of an Australian media company to Rupert Murdoch. It raises the question of what Mr Packer will do with the money. He has increasingly been shifting the focus of the business empire built up by his father and grandfather away from media and into gaming. The sale of Mr Packer’s 50 percent interest in Consolidated Media Holdings Ltd (CMH) – held through his private company Consolidated Press Holdings Ltd – will leave him with only a toehold in the media via a 10 percent stake in Australian television company Ten Network. The disposal is imminent after CMH shareholders agreed to back a revised takeover offer from Mr Murdoch’s News Corp. of A$2 billion, giving News Corp a greater share of the nation’s pay-television market. News Limited, the Australian arm of News Corp., offered A$3.45 per share plus a dividend of A$0.06 for a total of A$3.51 per share for CMH, a media investment company focused on subscription television. Analysts think Mr Packer’s share of the cash from the expected sale of CMH will go toward consolidating his hold on the VIP gaming market at home and further afield.

Focus shift “He wants to definitely get out of media assets. His main aim is to build a global casino empire. It’s all about the global VIP play, the growing affluence in Asia and tourism he’s trying to capture,” said Karara Capital portfolio manager Akshay Chopra. That’s likely to involve enhancing the position of Mr Packer’s Australiabased casino operating company Crown Ltd in the domestic market. In early August Australian developer Lend Lease Corporation Ltd said it had signed an exclusive agreement with Crown to develop a hotel resort at Sydney’s

James Packer – likely A$1 billion war chest for gaming acquisitions

harbour side Barangaroo South. Lend Lease said the project could cater for smaller-scale VIP gaming, which would suit a proposal put forward by billionaire Mr Packer. He has been looking for a Sydney casino licence to attract more Asian high rollers. Another of Crown’s recent targets – for possible acquisition say analysts – is Echo Entertainment Group Ltd, operator of The Star casino resort – currently Sydney’s only casino with an exclusive licence from the New South Wales government until 2019. Echo also has two casinos in Queensland. In August Echo reported its fullyear profit had plunged more than 80 percent – making it potentially an attractive takeover target. Crown lifted its stake in Echo earlier this year, and has applied to the local regulator to increase it further. Malaysia’s Genting Group Bhd,

majority owner and developer of the Resorts World Sentosa casino resort in Singapore, has itself taken a 9.9 percent holding in Echo and has also applied for permission to boost its interest. For the 12 months to June 30, Echo made a net profit of A$42.2 million, but the company said the result couldn’t directly be compared with last year’s because of Echo’s demerger from Tabcorp Holdings Ltd, an Australian gaming conglomerate with its roots in racetrack betting. Echo added its own results were hit by expenses of A$37.8 million linked to renovations to The Star, and by A$30.3 million losses related to the collapse of a VIP junket partner, SilkStar. Echo has spent A$870 million over the last four years on renovation works at The Star. With Reuters

September 10, 2012 business daily | 5

MACAU

Macau stages ’The Voice China’ The mainland’s biggest reality television show, ‘The Voice China’, will hold one of its semi-finals at the Venetian Macao’s CotaiArena Paulo A. Azevedo

pazevedo@macaubusinessdaily.com

he hottest reality television show in the mainland, “The Voice China”, will bring one of its semi-finals to Macau and broadcast the city’s attractions to more than 120 million viewers and another 400 million online. The show is the Chinese version of the Dutch show “The Voice”, versions of which have reached the top of the charts in Australia, Britain and the United States. “The Voice China” has become so popular that advertising slots on the programme cost 360,000 yuan (453,345 patacas) for 15 seconds, meaning the one-hour show makes up to 16 million yuan a week. A source told Business Daily that the producers had done a deal with Sands China Ltd to bring a semi-

final of “The Voice China” to the CotaiArena at the Venetian Macao on September 21. The show will bring 10 semifinalists here and its four judges: Liu Huan, who sang the Beijing Olympics theme song “You and Me” with Sarah Brightman, pop diva Na Ying, mainland singer Yang Kun and Harlem Yu, a singer from Taiwan. The programme will be broadcast by Zhejiang Satellite TV, one of the channels offered by Macau Cable TV, on September 28. Macau Cable TV also carries “The Voice USA” with Christina Aguilera, Cee Lo Green, Blake Shelton and Adam Levin. The four judges in each version of the show select the wannabe stars through blind auditions, where they

The Venetian Macao will host ‘The Voice China’ on September 21

can only hear the singers. A judge gets to see a contestant only if he or she decides to pick them for his or her team. When two or more judges pick a contestant, each must try to persuade the contestant that that his or her team offers the best chance of reaching stardom. In every version of the show the judges are celebrities in their own right.

Hong Kong’s South China Morning Post has reported that reality television in the mainland is more popular than dramas, comedies or documentaries. The newspaper said viewers “complain that restrictions imposed by the authorities result in boring shows that avoid real issues such as soaring living costs, crime, corruption and the failings of the Communist Party”.

Sands picks Madrid for ‘EuroVegas’

UM says it can manage if new campus delayed

Company to fund only 35 percent of the project

The University of Macau says it could cope if the opening of its new campus is postponed by delays in building the access tunnel

asino billionaire Sheldon Adelson chose Madrid as its planned location for Las Vegas Sands Corp.’s EuroVegas resort site. The next steps are to choose a specific site and size, and arrange financing for the complex, the parent company of Macaubased Sands China Ltd said last Friday in a statement. Madrid beat out Barcelona, a choice that “was not an easy selection,” Mr Adelson, who is Sands’ chairman and chief executive officer, said in the statement. The decision by Las Vegas Sands to choose Madrid for the big casino project was welcomed by city officials on Saturday, but potential obstacles include the company’s decision to fund only 35 percent of the resort and to demand changes in local laws. In the statement, Las Vegas Sands said it will contribute about 25 percent to 35 percent of the equity. With Spain in recession and considering a bailout, raising 65 percent of the cost could be difficult. And there is no guarantee officials would agree to change Spanish laws to let gamblers smoke inside the casinos and the new buildings to soar

above the skyline. Analyst Ramon Zarate said, “I see capitalisation by banks as being very complicated.” Mr Zarate of the EMASI think-tank said banks were currently de-leveraging construction projects, so Mr Adelson would need to “pool foreign venture capital funds, but it’s complicated.” The mega-resort, dubbed “EuroVegas” in the press, would be built in three stages and cost as much as US$35 billion, Mr Adelson said in an April conference call with investors. If all three phases of the complex, which would include six casinos with more than 1,000 gambling tables, 18,000 slot machines, 9 theatres and three golf courses, are completed, it would boost the region’s gross domestic product by 4.5 percent, according to Promomadrid, a government-owned company that seeks to attract foreign investment to the Madrid region. The project, should it be built, may help Spain emerge from its second recession since 2009, which has pushed the unemployment rate to 25 percent. In 2010, Spain accounted for US$478 million of Western Europe’s US$13.2 billion casino market, according to a report by PriceWaterhouseCoopers LLP. France and Germany are the biggest markets. “The profile and tourism revenue generated by casino gaming can bring major benefits to cities and entire regions,” analysts including Marcel Fenez wrote in the report. “This is why governments are so keen to encourage and attract them.” Agencies

Tony Lai

tony.lai@macaubusinessdaily.com

ork on the undersea tunnel connecting Macau to the new campus of the University of Macau on Hengqin Island has resumed after a cave-in at the construction site in July. But the university has not ruled out postponement of the opening day of the new campus, scheduled for next September. University rector Wei Zhao told reporters on the sidelines of a conference on Saturday that construction of the tunnel had resumed and that most of the work would be completed by the middle of November. The contractor has begun stabilising the earthworks at the Hengqin exit of the tunnel. Mr Zhao expects the 2 billion pataca (US$250 million) tunnel to be ready next year. He would not comment on whether the cave-in would delay

the move to Hengqin. He said the university had options for coping that it could it take if the pace of construction so demanded. Mr Zhao said the university would “use the appropriate plan according to the progress of the project to ensure that the new campus will be in service as soon as possible, and guarantee the safety of the teachers and students”. One option was to delay the start of the next academic year if the work was not finished. At the moment, the plan is still for the university to move to the 7.8 billion pataca Hengqin campus before the beginning of the next academic year. Mr Zhao said the governments of Macau and Guangdong, of which Hengqin Island is a part, were discussing contingency plans for dealing with any emergencies on the Hengqin campus or in the tunnel.

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business daily September 10, 2012

macau

Key to housing is supply, govt told

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Construction roaring Construction has been an important part of the post2004 economic boom. In general, investment was one of the main drivers of the economy in that period. Gross fixed capital formation is the main component of total investment. And construction, together with the acquisition of machinery and equipment, makes up the major part of gross fixed capital formation. If we take the quarterly figures for real gross fixed capital formation for the period from 2004 to the second quarter of this year, the impact of construction is obvious.

Troubles in the real estate market would be less pronounced if the government could ensure a supply of different types of homes, says Rose Lai Neng, an associate professor of finance at the University of Macau. In an interview with Business Daily, Ms Lai says the government must keep the special stamp duty on transactions and consider introducing a proportional property tax to rein in housing prices. At the heart of any solution should be a policy with a long-term focus. Luciana Leitão

leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

The weight of construction in total investment is clear from the chart above. Investment in machinery and equipment is comparatively stable, so construction accounts for most of the ups and downs in total investment. The closeness of their relationship is due to construction having accounted for around 80 percent or more of total investment from the second half of 2005 to the end of 2009, reaching a peak of 87.4 percent in the fourth quarter of 2006. Although investment in machinery and equipment also rose noticeably, more than doubling between the first quarter of 2004 and the second quarter of 2007, it never reached more than 36 percent of total investment. The data up to the first quarter of 2010 show a neat cycle of expansion and contraction. In the last part of the period the trend is not as tidy as before. Construction figures vary strongly without any clear trend line.

* Gross floor area, m2. 106 mop, chained prices, 2010 log scale

From quarter to quarter, the amount of investment in construction has no clear or direct relationship with either the floor area of buildings started or the floor area of buildings completed. As building work often continues for several quarters and the pace of construction may be affected by multiple external factors, the quarterly building figures are a poor predictor of the level of construction investment and its contribution to gross domestic product at any particular instant. J.I.D.

The number of transactions in the housing market keeps falling but prices are rising. Where is the market heading? We are all aware of the problems. The government is well aware of that. The administration is doing a lot of stuff already but Macau is just too small. Any tiny little movement will create a lot of ripples. The trouble comes about because the market moves so fast and the changes are so big that it is not very easy to slow down and study [what is going on]. Legislative Assembly member Ng Kuok Cheong said: “I’m going to request the government to have 40,000 public housing units.” And then we question: why 40,000, when there are around 170,000 households in Macau? If you do the maths, the real needs of the residents are about 110,000 [homes]. If that is the case, I don’t see why we need 40,000. Are we going to follow the trend, like in Singapore, where almost half of the people live in public [housing]?

We cannot stop them. As long as you want to have a free market, you don’t really want to scare investors. If you want to stop those so-called investors from investing, everybody will go away and all of a sudden Macau will be dead. We don’t want that kind of one policy that hits everyone including the innocent. But Macau is just so small and it’s not easy to do that. Ultimately, the solution is just to supply.

Does the government have the right policies? What I don’t think the government should do is to keep subsidising because it has money. I think it needs a long-term policy. Right now we have a heavy tax on speculation. That’s good. There are so many people that have the capability to invest but are they really investing? Not really. They want the price to appreciate and then they will sell but because they have their financial strength, they do not want to have this tax levy for two years. That’s why they want to hold it for more than that.

transactions because

How can the city provide supply? We should have a more scientific research on this. I know how to do it, but I don’t think I can do it, because of the handicapped data sector here. If the government really wants to face the reality and do indepth research on that, we will have

Right now there are not many sellers don’t want to sell, and the price is so high that not many people can afford it to dig out all the data that probably is not available at the moment in the statistics and census bureau. Ultimately, it is supply that has to satisfy the demand. So, we have to at least have a vague idea of what constitutes demand.

First of all, expatriates: if they are here for middle or more senior management ... I bet they are going to rent over-1,000-square-foottype apartments. And then there are other workers, non-resident workers, who are, let’s say, domestic helpers. They will probably share the apartment, so we should have a rough estimate of how many apartments for this group of people and how many apartments for that group of people. And then, apart from that, what are the rest demanding? Theoretically speaking, if we are able to know the population distribution of a certain age group, if we are able to do an in-depth study of what type of occupation they have, then we know. Macau is now facing the problem of the middle-income people. A typical youngster, with a decent enough job, may earn maybe just about 20,000 patacas [US$2,500] a month. He forms a family with kids, yet they are not eligible for public housing. It is this group of people that can’t really find any housing. Right now there are not many transactions, because sellers don’t want to sell, and the price is so high that not many people can afford it. Developers should think of smaller apartments. Should we resort to Singapore’s model, where about 80 percent of the population lives in public housing? I don’t see it as a good solution for Macau. First of all, flats to accommodate 80 percent of the population will have to be built by the Macau government. What do you do with the existing ones? Do we have enough vacant land to offer 80

Weather Beijing 28/20o C Changchun 26/13o C

Harbin 23/13o C

Xian 25/16o C Shanghai 27/23o C Chengdu 30/21o C Kunming 25/17o C Haikou 32/23o C Sanya 32/26o C

Guangzhou 35/25o C

MACAU (10-15 September) Day

Temperature

Humidity

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26/32o C

50/90 %

09/11

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09/12

26/33o C

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09/13

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25/30o C

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Shenzhen 34/26o C

ASIA (today)

Hong Kong 32/27o C

Manila

Macau 32/26o C

TOKYO

Jakarta

31/26 C

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Bangkok

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K. lumpur

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SINGAPORE

28/19o C

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taipei

35/24o C

September 10, 2012 business daily | 7

MACAU percent of the housing in Macau? I don’t think it’s possible. Secondly, let’s think about whether it would work out. In the case of Singapore, that’s different. It was in a time that nobody had anything, and the government said it would give you housing so you will have a place to live in. So, we come from a different origin. I don’t think that will work, because there are people who are not in a poor condition. There are people who are financially quite sound. How do you determine the right amount of public housing? A quick fix is to look at the number of what the government is now supplying. Once they finally decide to stop and take a look at public housing, they will see how much of it is vacant. Then you will know you actually supplied more than the demand. If they are all satisfied, and there is still extra, then that means that that’s already a lot. There are other middle-income people who are not satisfied but they just don’t want public housing, because they think they can afford [private housing]. It’s just so crazy that they cannot afford it. Then, after that, the government should look at those people who give up [public housing], and think of why. That’s one quick fix. Another quick fix I can think of is to tax speculation, which the government is already doing. So, what I suggest is, any people who do not have a local identity but are buying an apartment here, must be [buying] for investment purposes.

In these cases, if you really want to earn money from making business in Macau, you should pay a lot to the government. That means we should have different levels of property tax. And there is a group of people from mainland China, who get the Macau ID but never stay in Macau. How do we identify that group? Perhaps we really need to see when they buy the apartment what are they using it for. So long as the apartment is rented out, that means there is a demand and it’s okay. But if it’s vacant, especially for those mainland Chinese buyers, we should charge them tax. So tax is a way to go. Supply is also another path that could be followed. But the government should be careful. Maybe the government should consider different types of public housing. The growth of the Chinese economy is slowing down. Do you think this might have an impact on the real estate sector? It definitely has a connection. People who have money and come to Macau to gamble, if they can come, they will know Macau is a place with a good economy. If they can come to gamble, it means they have a lot of money. Where do they use the money? The only thing they can do is to buy apartments. Especially, we are talking about Chinese, and Chinese have long been told that the best thing to do is to own apartments. If they are rich people in China, they will look at Macau as one of the main possible investment places. The economic slowdown is a very

natural thing. Like any other industry, you can have a very high growth and then you will mature and hopefully you will decline not so soon. In Macau it is time for a mature stage. It just is a sort of equilibrium. I don’t think it is a big problem, which means it will not be a very big hit to the real estate market.

Real intellect Rose Lai Neng is an associate professor of finance and an associate dean for research and development in the Faculty of Business Administration at the University of Macau. She is also the executive editor of International Real Estate Review. Ms Lai’s research focuses on option pricing models, real estate finance and economics, risk management and behavioural finance.

There is a bill on unfinished residential units being discussed by legislators. What would be the impact of this bill? A healthier property market. People in Macau have been so used to incomplete laws, they just do whatever they have been told to do and whatever people before them have done. So, we never ask if this is correct or not. The thing about this is, even if you live in the newer buildings, and you have a car park, is that car park in your ownership? No, you own an area in that car park. And, as buyers, if we know our rights, we are more confident in the market because we know explicitly what we own. What should the government do? The government shouldn’t have one policy and then change it. That will increase the volatility, the fluctuation of the price, because people don’t know what the government wants to do … I think the government should choose one path and keep to it, unless it is really disruptive. For example, the 20 percent extra stamp duty: I think it should continue. First of all, it’s not a bad strategy. Secondly, you shouldn’t do one thing and then withdraw it. The second thing the government should not do is to grant money in one lump sum. You have the new owners, the first-time owners, and the government says: “Let me give you 1.5 million patacas to help you out.” This is not good. If I am selling, and I know that this is a first-time homebuyer who will get help from the government, why will I keep the price that low?

8 |

business daily September 10, 2012

macau

HK wins visa freeze, Macau remains open No sign that Macau will share Hong Kong’s reprieve on easing of visas for migrant workers Vítor Quintã

vitorquinta@macaubusinessdaily.com

he central government has shelved a new policy that would allow non-local residents in six major mainland cities to apply for travel documents to Hong Kong. But the measure seems to still be in place for Macau. Hong Kong Chief Executive Leung Chun Ying announced last Friday that the policy had been suspended indefinitely after meetings between the city immigration bureau and security officials and Chinese authorities. However, there is yet no sign that the suspension will also cover Macau. “There is no information on any changes of the recent visa relaxation measure for six cities in PRC [People’s Republic of China],” a spokesperson from the Macau Government Tourist Office told Business Daily. China’s Ministry of Public Security announced on August 22 that people studying at tertiary education institutes or working in Beijing, Chongqing, Guangzhou, Shanghai, Shenzhen and Tianjin could apply for travel visas locally, even without a household registration.

Currently mainland Chinese can only apply for travel visas to places like Macau at the cities for which they hold household registrations, also known as ‘hukou’ in Mandarin. The new policy, which was expected to come into effect in early September, was seen as a response to the growing number of migrant workers in big Chinese cities. However, the relaxation in visas for Hong Kong was first put on hold until September 20 and now frozen out over fears that the city would not be able to cope with a further 4.1 million non-residents of Shenzhen on multiple-visit permits. Last month the president of the Macau Travel Industry Council, Andy Wu Keng Kuong, said the policy could bring more travellers to the city after the number of visitors dropped year-on-year in the May-July period. But last week the head of the Macau Government Tourist Office, João Manuel Costa Antunes, has downplayed concerns, after the territory received 28 million

The end of restrictions on migrant workers’ visa applications could mean more Macau visitors

visitors last year. “Our city’s tourism capacity is not yet fully occupied, which means we can continue to receive more visitors,” he told media.

Chinese Estates readies for La Scala blow with Jiangsu sale La Scala developer sells assets as it prepares for blow from Macau land grant revocation Vítor Quintã

In the first seven months of this year, the cities of Shanghai, Beijing, Chongqing and Tianjin alone accounted for almost 546,000 visitors to Macau.

Mixed martial arts coming in November

vitorquinta@macaubusinessdaily.com

Chinese Estates has said it invested about HK$2.8 billion in corruption-linked residential project La Scala

roperty developer Chinese Estates Holdings Ltd has clinched the sale of a stake in a Jiangsu joint-venture to increase its cash reserves, just days after being told it could lose all of the Macau land where it planned to build residential project La Scala. The company told the Hong Kong Stock Exchange on Friday that it had concluded the sale of a 49 percent interest in residential, business and resort project in Qidong city, Jiangsu province. An investment fund managed by the Sparx Group will pay Chinese Estates US$500 million (4 billion patacas) – US$200 million in cash

and a loan note for US$300 million –, the same price the developer had paid to buy into the venture in June 2011. Chinese Estates said it expected to book a loss of about HK$10.5 million on the transaction. The move “will increase cash reserve of the group under the challenges in the global economic environment,” the Hong Kong-based company said. One of those challenges is the expected loss from the Macau government’s decision to start the legal procedures to take back the extra land granted last year to the corruption-linked La Scala

residential project. Chinese Estates had expected to book revenue from the sale of the first phase of La Scala in 2014. Macau government’s decision “will hit Chinese Estates’ revenue and profit,” Kenny Tang Sing Hing, general manager at AMTD Financial Planning, was quoted as saying by South China Morning Post. The move was expected after the administration had already declared the original 2006 land concession invalid. Chinese Estates has said it invested about HK$2.8 billion in the project and that it intends to appeal. At the end of May, the Court of Final Appeal said former secretary for Transport and Public Works Ao Man Long took bribes worth HK$20 million in 2005 from Chinese Estates boss Joseph Lau Luen Hung and another businessman, BMA Investment chairman Steven Lo Kit Sing. Five private companies controlled by the administration – four were wound up in January 2010 – later granted the land to Moon Ocean Ltd, a company that was formerly owned by Mr Lo and is now controlled by Mr Lau. Mr Ao was jailed for 29 years for corruption and money laundering, while Mr Lau and Mr Lo will face trial here on September 17.

Former American champion Rich Franklin will fight here in November

ickets to the first ever Ultimate Fighting Championship (UFC) event in the Greater China region will go on sales on September 7. The event, to take place at the Venetian Macau’s CotaiArena on November 10, will feature a middleweight fight between former American champion Rich Franklin and Vietnam-born Cung Le, a former champion of Strikeforce, another mixed martial arts organisation. “This is certainly one of the single biggest sporting events to ever hit the Hong Kong and Macau area and the global attention this event will receive pays tribute to the birthplace of martial arts,” UFC Asia managing director Mark Fischer said yesterday. The event will also feature other renown fighters from China, South Korea, Brazil and Bulgaria. The goal of the sport is to pit the best athletes in the various martial arts, including karate, jiu-jitsu, boxing, kickboxing, wrestling, sumo and other combat sports. X.C.

September 10, 2012 business daily | 9

MACAU

Cheaper air freight for Guangdong bid With airfreight volume tumbling fast, Macau airport wants to attract cargo from Guangdong, Xiamen exporters Vítor Quintã

vitorquinta@macaubusinessdaily.com

n about six months shipping cargo to or from the Macau airport will be cheaper, in a bid to attract exporters from the neighbouring regions and stop a six-year falling trend in airfreight volume. The idea came out from this year’s first meeting of the Logistics Development Committee, held last Friday, committee coordinator Wong Wan told media. The goal is to ensure airfreight is at least 15 percent cheaper at the Macau airport than at the Guangdong airport, within a half-year period, he said. “Let’s see how we can attract small and medium enterprises from the Guangdong province to use Macau for product export. We will try that through lower fees,” the official explained. Starting next month, the committee will speak to representatives from Guangzhou’s Nansha industrial area and from

Xiamen, the capital of Fujian province, to promote Macau’s airfreight potential. In addition, the members will also try to “improve communication” with Zhuhai customs authority how to make border crossing easier for export products, Mr Wong said. Airfreight going through the Macau airport has been falling for the past six years and was down by 30.5 percent to less than 13,400 tonnes during the first half of 2012. The future of the artificial island that will host the Macau and Zhuhai border crossing for the 50-kilometre long Pearl River Delta Bridge was also discussed at the meeting. The committee will ask six “internationally renown companies” in the logistics sector to come to Macau still this month “to get to know the reality of the city,” Mr Wong said, and imagine how to make the most of the reclaimed island.

Airfreight going through the Macau airport has fallen a further 30.5 percent during the first half of 2012

“In October they will do a presentation and then in November they will make a proposal and we will see which one is the best for Macau’s development and future,” he said.

One or two of the companies could be chosen to help pick the location for a logistics warehouse area, the official added, that could offer “more favourable prices” to customers.

Meanwhile the committee has already commissioned the University of Macau to conduct a study on the overall development and growth strategies for the logistics sector in the territory.

10 |

business daily September 10, 2012

GREATER CHINA Troops sent to help earthquake victims China dispatched 7,200 soldiers and militiamen to boost rescue efforts after two magnitude-5.6 earthquakes struck the country’s southwestern provinces of Yunnan and Guizhou, the official Xinhua News Agency said. More than 11,000 rescuers are working to clear roads, evacuate residents and search for the missing, Xinhua said yesterday. The casualty toll may rise beyond the known 80 killed, 820 injured and more than 6,650 homes destroyed by the quakes on Friday. The Ministry of Finance allocated 1.05 billion yuan (US$166 million) to Yunnan province for quake relief, it said on its website.

Slowdown deepens as output weakens, prices rise China’s factories ran at their slowest rate for 39 months in August

hina’s industrial output growth was the weakest in three years in August while inflation accelerated, complicating Premier Wen Jiabao’s task of reversing an economic slowdown that may extend into a seventh quarter. Production increased 8.9 percent from a year earlier, the National Bureau of Statistics said yesterday

Food inflation accelerated for the first time in five months, rising 3.4 percent from a year earlier

in Beijing. That compared with the 9 percent median estimate of 35 economists in a Bloomberg News survey and a 9.2 percent pace in July. A separate report showed consumer prices rose at a faster pace for the first time in five months. The rebound in inflation may constrain the government’s scope to support economic growth that President Hu Jintao said on Saturday faces “notable downward pressure.” Europe’s debt crisis has crimped exports and a property crackdown is damping domestic demand, while rising housing and food costs threaten to trigger another round of consumer-price gains. “A renewed inflationary trend could prove to be a further complication to policy makers’ growth-inflation trade-off,” said Glenn Maguire, chief economist at consultant Asia Sentry Advisory Pty Ltd in Sydney. “China will have enormous difficulties in crafting a policy response to these divergent price and activity trends.”

Asia-Pacific Economic Cooperation forum in Vladivostok, Mr Hu also urged governments in the region to speed up infrastructure development, describing it as key to promoting recovery and achieving sustained and stable growth. His comments follow a slew of announcements by the Chinese government approving the construction of new roads, railways and urban infrastructure that Nomura Holdings Inc. estimates have a combined value of about 1 trillion yuan (US$158 billion). The Shanghai Composite Index, China’s benchmark stock gauge, rose the most in eight months on Friday after the nation’s top economic planning agency published the approvals. The yuan had its sixth weekly gain, the longest winning streak since April 2011, after the European Central Bank unveiled a bond-buying plan to revive the region’s growth. The currency rose 0.1 percent against the U.S. dollar in the week ending September 7 to 6.3430.

Promoting recovery

Weaker growth

Mr Hu reiterated on Saturday that China will work to balance “steady and robust growth, adjusting economic structure and managing inflation expectations.” He pledged to boost domestic demand and ensure “basic price stability”. Speaking to business people at an

The increase in August industrial production was the weakest since May 2009. Power output rose 2.7 percent from a year earlier, the statistics bureau said, compared with 2.1 percent in July. Growth in production of rolled steel slumped to 1.4 percent from a year earlier from a 6.5 percent pace in July.

Separate reports showed fixed asset investment excluding rural households climbed 20.2 percent in the first eight months of the year, little changed from the first seven months. Retail sales rose 13.2 percent from a year earlier in August, in line with the median economist estimate. In property development, investment in newly started floor space fell 6.8 percent in August from a year earlier after a 9.8 percent drop in July, while growth in spending on floor space under construction was little changed at 15.6 percent, although down from 25 percent in March. Zhang Zhiwei, Hong Kong-based chief China economist at Nomura, said some leading indicators in the data, including land purchases, housing starts and investment in new projects, point to an improvement in property and infrastructure investment in coming months. “These suggest economic momentum will pick up soon,” said Mr Zhang, who estimates growth will rebound to above 8 percent in the fourth quarter. Inflation last month accelerated to 2 percent from a year earlier after a 1.8 percent rate in July, the statistics bureau said. The slide in producer prices deepened to 3.5 percent. Food inflation accelerated for the first time in five months, rising 3.4 percent from a year earlier. Consumer prices increased 0.6 percent from the previous month, the biggest rise since January, while food prices increased 1.5 percent from July. “Authorities are sufficiently alarmed by the unintended consequences of their 2008 stimulus that they want to avoid a repeat, which a significant monetary easing would risk,” Tim Condon, Singaporebased head of Asia research at ING, said before yesterday’s data. Bloomberg

HK bends to education protests Govt retreats on ‘national education’ plan as the city went to the polls to elect a new legislature

ong Kong’s leader cancelled Chinese identity lessons on Saturday, hours before the city went to the polls to elect a new legislature, after thousands of black-clad demonstrators besieged government headquarters for ten days. Chief Executive Leung Chun Ying scrapped a three-year deadline for the introduction of the subject, a measure inherited from his predecessor, in the biggest policy reversal for Hong Kong’s government since March, 2011, when criticism from lawmakers forced it to redraw the budget. The reversal marked the third policy change Mr Leung announced in just as many days, after abandoning

his trip to the Asia-Pacific Economic Cooperation summit last week, to quell discontent at China’s growing influence in the former British colony. Dissatisfaction in Hong Kong has risen as an influx of mainland Chinese fuelled a surge in property prices, flooded the city with tourists, and led to competition for hospital beds. “Caving in to public opinion about national education shows a very disturbing weakness of the twomonth old Leung administration,” said Willy Wo-Lap Lam, an adjunct professor of history at the Chinese University of Hong Kong. The protests have overshadowed the run-up to the election for the

Protesters camped out at the government headquarters headed home yesterday after the announcement

70-member Legislative Council, boosting support for so-called prodemocracy parties that don’t back Mr Leung. Pro-democracy parties, led by the Democratic Party and Civic Party, seek to retain or expand their onethird presence on the council, which gives them the power to veto bills that require a two-thirds majority. Ballot-counting started overnight. “Following this announcement,

I hope that education will return to education, campus life will return to normal,” Mr Leung said at a press conference on Saturday. “Those who gather outside the government headquarters and others will end their hunger strike, class boycotts and demonstration to insist on the withdrawal of the moral and national education subject.” Bloomberg

September 10, 2012 business daily | 11

asia Suu Kyi sets date for U.S. visit Myanmar’s democracy champion Aung San Suu Kyi will travel to the United States next Sunday, in a trip that will see her being awarded Washington’s highest honour. It will be her first visit to the U.S. since she was put under house arrest in 1990. She will receive the Congressional Gold Medal. The medal is the top honour bestowed by the U.S. Congress, which voted to award it to Ms Suu Kyi in May 2008 when the prospect of her leaving Myanmar looked remote.

APEC to move toward more flexible exchange rates Asia-Pacific nations pledge growth, fret over economy

APEC leaders vowed to work toward a greater exchange-rate flexibility

eaders at the Asia-Pacific Economic Cooperation Summit pledged to move toward greater exchange-rate flexibility and more market-based currencies, according to the meeting’s final communique. The move is meant to “reflect underlying fundamentals, avoid persistent exchange rate misalignments, and refrain from competitive devaluation of currencies,” the leaders said in the communique, which was distributed yesterday, the final day of the annual APEC summit, in Vladivostok, Russia. “The financial markets remain fragile, while high public deficits and debts in some advanced economies are creating strong headwinds to economic recovery globally. The events in Europe are adversely affecting growth in the region,” they said. “In such circumstances, we are resolved to work collectively to support growth and foster financial stability, and restore confidence.” The leaders backed Europe’s move to safeguard the integrity and stability of the euro area, pledged to refrain from imposing new trade restrictions through 2015, and vowed to reduce tariffs on certain environmental products to 5 percent or less, according to the document. “There’s a general sense that the world economy is a little fragile ... but there’s confidence that we can get through this,” New Zealand Prime Minister John Key told reporters. APEC’s 21 economies have a market of almost 3 billion consumers, making up 44 percent of world trade and 56 percent of world economic output totalling US$39 trillion in 2011, according to a fact sheet provided by the U.S. government. APEC negotiators discussed the internationalisation of China’s yuan, which still doesn’t trade freely on global markets. In the U.S., some lawmakers say the yuan is undervalued,

undercutting U.S. exports and making Chinese imports too cheap.

Trading band Guo Jianwei, deputy director of the People’s Bank of China’s second monetary policy department, told reporters on Saturday at a forum in the eastern Chinese city of Xiamen that the central bank will allow the trading band to play a bigger role in the country’s exchange-rate mechanism. “In the past when speculation was heavy, it was very hard for China to widen the band too much,” Mr Guo said. “But with the current balanced level of the exchange rate and stable economic growth, the room to allow the band to play a bigger role in the reform of the exchange rate mechanism is growing.” China’s yuan rose 0.09 percent this week to 6.3430 per dollar, according to the China Foreign Exchange Trading System, completing a sixth weekly gain. APEC leaders pledged a 10 percent improvement in supply-chain performance by 2015 and recognised “growing challenges” to food security. They pledged to take action to raise agricultural productivity, according to the communique. They also said they would refrain from imposing limits on food exports because “bans and other restrictions on the export of food may cause price volatility, especially for economies that rely on imports of staple products.” The APEC members also reaffirmed a commitment to so-called green growth. The members said the situation in Europe is “adversely affecting growth in the region.” Russian President Vladimir Putin used the summit to grandstand four months after returning to the Kremlin and less than a month after Moscow joined the World Trade Organization. Underlining Russia’s growing status as a wheat supplier, he said Russia

would ramp up grain production and more than double exports by 2020. Russia and the United States are both looking to Asia, where economic growth is relatively strong, in a pivotal turn to boost their economies following the 2008-9 global financial crisis. “It is absolutely clear that the most important region for economic growth this decade – and probably the next decade – will be the Pacific,” said Mexican President Felipe Calderon.

Easing tensions Cooperation in APEC is hindered by territorial and other disputes among some members. U.S. Secretary of State Hillary Clinton urged Japan and South Korea to cool tempers in their showdown over contested islands. “I raised these issues with both of them,” Mrs Clinton said after meeting Japanese Prime Minister Yoshihiko Noda and South Korean President Lee Myung Bak. She said she told the countries’ leaders “that their interests really lie in making sure that they lower the temperature and work together in a concerted way to have a calm and restrained approach.” Mr Noda didn’t have bilateral meetings with the leaders of South Korea or China at the summit, only holding brief discussions with Mr Lee and President Hu Jintao of China, with which Japan also has a dispute. A spokesman for the Chinese foreign ministry, Qin Gang, said yesterday that Japan should “pay attention” to his country’s resolve to safeguard its sovereignty. Mr Noda tried to dial back tensions at the summit in Vladivostok, saying he had told Mr Hu and Mr Lee in their informal meetings that it was important to preserve and deepen ties. Mr Noda said he also told Mr Lee that ties between their countries were important because of the threat posed by North Korea. Bloomberg/Reuters

Indian PM defends space programme Indian Prime Minister Manmohan Singh yesterday defended spending millions of dollars on space exploration despite many people in the country living in grinding poverty. India plans to launch a probe to orbit Mars next year at an estimated cost of four to five billion rupees (US$70-90 million), and hopes to send its first manned mission to space in 2016. “Questions are sometimes asked about whether a poor country like India can afford a space programme and whether the funds spent on space exploration, albeit modest, could be better utilised elsewhere,” Mr Singh said in a speech. “This misses the point that a nation’s state of development is finally a product of its technological prowess.” India comes 134th among 187 countries in the United Nations’ overall development rankings, while a survey earlier this year revealed that 42 percent of Indian children aged under five are underweight due to malnutrition. Mr Singh made his remarks in Andhra Pradesh state after witnessing the launch of India’s 100th space mission when a rocket carrying two foreign commercial satellites was fired into orbit. “India is justly proud of its space scientists, who have overcome immense odds to set up world-class facilities and develop advanced technologies,” he said. In September 2009, India’s Chandrayaan-1 lunar probe discovered water on the moon, boosting the country’s credibility among more experienced space-faring nations. But the space programme suffered a setback in December 2010 when a satellite launch vehicle blew up and fell into the Bay of Bengal after veering from its intended flight path.

Pakistan, India strike visa deal Pakistan and India will ease tough visa restrictions, an important step forward in improving relations between the nuclear armed neighbours, their foreign ministers said last Saturday. The agreement was the culmination of a visit by Indian Foreign Minister S. M. Krishna to Pakistan as part of a tentative peace process that froze after Pakistani militants attacked the Indian city of Mumbai in 2008, killing 166 people. “A step-by-step approach is what will take the relationship forward,” said Mr Krishna. The new pact offers several different types of visa. Pakistanis visiting India have long grumbled about the restrictive visa regime for both tourists and businesses. Pakistani business travellers are restricted to particular cities, so visitors cannot travel from Delhi to the nearby thriving business hub of Gurgaon without permission. Business people also have to report to an Indian police station in the evenings “like a criminal”, Pakistani trade official Zafar Mahmood complained in April. Indians visiting Pakistan face similar restrictions on moving between cities. The two countries have gone to war three times since Pakistan split from India in 1947. “We will not be held hostage to history,” said Pakistan’s foreign minister Hina Rabbani Khar. In April, Pakistani President Asif Ali Zardari visited India, the first trip by a Pakistani head of state in seven years. Last year Pakistan promised India most-favoured nation trading status. But potential flashpoints between the two nations remain. They include a long-running dispute over the mountainous province of Kashmir, currently divided between the two nations; Indian dams that Pakistanis say threaten their water supply and possible future attacks like those in Mumbai.

12 |

business daily September 10, 2012

MARKETS Hang SENG INDEX NAME

PRICE

Day %

VOLUME

28.1

6.844106

758481839

4.166667

17910902

BANK OF CHINA-H

2.87

3.985507

564770388

BANK OF COMMUN-H

5.18

6.584362

92898002

BANK EAST ASIA

27.9

3.142329

3118453

AIA GROUP LTD ALUMINUM CORP-H

NAME CHINA UNICOM HON CITIC PACIFIC CLP HLDGS LTD

PRICE

Day %

VOLUME

PRICE

Day %

12.5

2.124183

25007964

POWER ASSETS HOL

63.55

2.91498

4993509

9.2

-0.4329004

14443895

SANDS CHINA LTD

27.75

5.916031

15714854

SINO LAND CO

13.04

4.32

27477960

SUN HUNG KAI PRO

102.9

2.797203

6482356

91.4

1.668521

2826241 3063294

64.5

1.895735

4230905

14.38

1.553672

83670064

COSCO PAC LTD

10.02

2.140673

8883488

12.58

2.11039

13881545

243.2

1.672241

26.5

4.125737

9470676

TINGYI HLDG CO

23.5

1.511879

6428440

1881832

WANT WANT CHINA

9.48

2.931596

16523107

BELLE INTERNATIO

14.4

5.263158

13150891

ESPRIT HLDGS

23.7

1.282051

16985483

HANG LUNG PROPER

CATHAY PAC AIR

12.5

2.796053

4250672

HANG SENG BK

111.7

1.453224

HENDERSON LAND D

49.75

4.188482

5603549

79.5

1.792574

1717026

CHEUNG KONG

107.9

3.949904

5130956

6.72

8.21256

68728952

CHINA CONST BA-H

5.18

3.807615

376965638

CHINA LIFE INS-H

21.8

3.073286

67631791

CHINA MERCHANT

23.2

5.21542

5280440

CHINA MOBILE

HENGAN INTL HONG KG CHINA GS

18.4

1.433297

6539515

106.7

5.019685

7649190

HSBC HLDGS PLC

68.9

2.453532

39254932

HONG KONG EXCHNG

SWIRE PACIFIC-A TENCENT HOLDINGS

MOVERS

82.3

0.9815951

19019347

HUTCHISON WHAMPO

69.4

3.736921

11556558

2.684564

37628203

IND & COMM BK-H

4.35

6.097561

578842309

CHINA PETROLEU-H

6.99

1.157742

109193360

12.16

2.876481

45102873

CHINA RES ENTERP

23.75

2.37069

3323655

28.2

0.7142857

4784943

CHINA RES LAND

16.14

3.065134

10091755

NEW WORLD DEV

9.84

3.688093

18428460

CHINA RES POWER

17.46

1.158749

8446062

PETROCHINA CO-H

9.37

2.741228

89105093

CHINA SHENHUA-H

28.7

6.099815

30382194

PING AN INSURA-H

57.05

3.53902

25298063

PRICE

DAY %

VOLUME

-0.4329004

156738300

YANZHOU COAL-H

LI & FUNG LTD MTR CORP

0 19830

INDEX 19802.16

18.36

CHINA OVERSEAS

VOLUME

CNOOC LTD

BOC HONG KONG HO

CHINA COAL ENE-H

NAME

HIGH

19820.46

LOW

19086.96

52W (H) 21760.33984 (L) 16170.35

19080

5-Sep

7-Sep

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

2.84

3.272727

180689547

AIR CHINA LTD-H

4.71

3.97351

31035000

CHINA PETROLEU-H

6.99

1.157742

109193360

4.166667

17910902

CHINA RAIL CN-H

6.66

4.225352

ANHUI CONCH-H

21.4

8.51927

38145560

CHINA RAIL GR-H

3.22

BANK OF CHINA-H

2.87

3.985507

564770388

CHINA SHENHUA-H

ALUMINUM CORP-H

CHINA PACIFIC-H

PRICE

DAY %

VOLUME

11.26

9.108527

50270211

ZIJIN MINING-H

2.58

0.78125

54063122

28312444

ZOOMLION HEAVY-H

8.51

8.132147

39085140

1.577287

52153429

ZTE CORP-H

9.8

5.603448

10458884

28.7

6.099815

30382194

5.18

6.584362

92898002

CHINA TELECOM-H

4.52

3.432494

96200822

15.08

7.714286

8164500

DONGFENG MOTOR-H

9.97

6.517094

37480035

CHINA CITIC BK-H

3.64

3.409091

56053400

GUANGZHOU AUTO-H

5.23

5.02008

7106626

CHINA COAL ENE-H

6.72

8.21256

68728952

HUANENG POWER-H

5.53

-1.426025

30488000

CHINA COM CONS-H

6.23

6.132879

43429522

IND & COMM BK-H

4.35

6.097561

578842309

CHINA CONST BA-H

5.18

3.807615

376965638

JIANGXI COPPER-H

17.82

6.962785

30384336

CHINA COSCO HO-H

2.86

2.142857

97461758

PETROCHINA CO-H

9.37

2.741228

89105093

CHINA LIFE INS-H

21.8

3.073286

67631791

PICC PROPERTY &

9.06

2.604757

25240395

CHINA LONGYUAN-H

5.28

4.142012

15007718

PING AN INSURA-H

57.05

3.53902

25298063

CHINA MERCH BK-H

12.66

3.431373

43708290

SHANDONG WEIG-H

8.51

-1.390498

5950022

BANK OF COMMUN-H BYD CO LTD-H

NAME

MOVERS

0 9440

INDEX 9428.21 HIGH

9438.66

LOW

8995.34

CHINA MINSHENG-H

6.13

6.055363

72088031

-0.621118

3488800

52W (H) 11916.1

CHINA NATL BDG-H

7.88

8.839779

137540226

TSINGTAO BREW-H

43.1

0.9367681

2649277

(L) 8058.58

CHINA OILFIELD-H

12.8

3.225806

14826255

WEICHAI POWER-H

22.8

8.830549

5167151

SINOPHARM-H

8990

5-Sep

7-Sep

Shanghai Shenzhen CSI 300 NAME

PRICE

DAY %

VOLUME

CSR CORP LTD -A

4.29

6.188119

104418622

41678775

DAQIN RAILWAY -A

6.09

2.698145

78379582

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.49

2.469136

141317729

AIR CHINA LTD-A

4.97

6.88172

NAME

PRICE

DAY %

12.36

3.691275

41268720

SANY HEAVY INDUS

9.93

9.966777

123537271 36200761

SAIC MOTOR-A

VOLUME

5.25

26570497

DATANG INTL PO-A

4.72

6.067416

14016903

SHANDONG GOLD-MI

37.57

1.430886

ANHUI CONCH-A

15.07

65338476

DONGFANG ELECT-A

14.94

4.548635

18974388

SHANG PHARM -A

12.01

1.865988

20289321

BANK OF BEIJIN-A

7.31

1.810585

31990913

EVERBRIG SEC -A

12.26

7.261592

17690165

SHANG PUDONG-A

7.6

2.98103

145971941

BANK OF CHINA-A

2.74

1.481481

65574201

GD MIDEA HOLDING

9.18

9139999

SHANGHAI ELECT-A

4.22

3.940887

8327531

BANK OF COMMUN-A

4.33

3.341289

99971494

GD POWER DEVEL-A

2.57

1.984127

64979219

SHANXI LU'AN -A

17.78

10.02475

53132876

BANK OF NINGBO-A

9.57

2.025586

30793245

GF SECURITIES-A

11.53

10.01908

66547028

SHANXI XINGHUA-A

38.28

3.264095

3462263

GREE ELECTRIC

21.45

2.240229

17264072

SHANXI XISHAN-A

13.36

7.481899

31453996

ALUMINUM CORP-A

BAOSHAN IRON & S

4.5

1.123596

131786830

16.34

3.614458

14183747

GUANGHUI ENERG-A

13.71

4.576659

38379945

SHENZEN OVERSE-A

5.85

3.174603

43056012

CHINA CITIC BK-A

3.82

1.058201

40155519

HAITONG SECURI-A

9.28

7.035755

121319554

SUNING APPLIAN-A

6.85

3.007519

136167327

CHINA CNR CORP-A

3.79

7.365439

132773429

HANGZHOU HIKVI-A

28.89

3.771552

4017285

TSINGTAO BREW-A

34.11

2.278861

2140133

CHINA COAL ENE-A

7.13

5.943536

24830625

HENAN SHUAN-A

57.6

4.803493

4321433

WEICHAI POWER-A

19.25

8.146067

23126930

CHINA CONST BA-A

4.01

3.084833

37828286

HONG YUAN SEC-A

18.54

9.123014

35223325

WULIANGYE YIBIN

34.7

3.58209

33946076

CHINA COSCO HO-A

4.17

9.736842

50109331

HUATAI SECURIT-A

9.37

7.825086

38978065

XIAMEN TUNGSTEN

41.97

9.72549

22491261

CHINA CSSC HOL-A

19.71

6.655844

9708392

HUAXIA BANK CO

8.57

3.253012

55286124

YANGQUAN COAL -A

14.62

8.456973

30720203

CHINA EAST AIR-A

3.29

11139144

IND & COMM BK-A

3.8

2.425876

102545356

YANTAI CHANGYU-A

52.89

5.002978

2869487

CHINA EVERBRIG-A

2.78

2.583026

73184763

INDUSTRIAL BAN-A

12.35

2.916667

92037051

YANTAI WANHUA-A

13.36

3.888025

16326184 11224550

BYD CO LTD -A

18.9

22563915

INNER MONG BAO-A

35.76

9.090909

83300073

YANZHOU COAL-A

18.41

7.786885

CHINA MERCH BK-A

10.16

4.419322

94580852

INNER MONG YIL-A

21.39

3.633721

10953425

YUNNAN BAIYAO-A

61.06

3.667233

3447173

CHINA MERCHANT-A

10.48

7.157464

31614240

INNER MONGOLIA-A

5.24

7.157464

133878837

ZHONGJIN GOLD

15.43

2.729694

43205452

CHINA MERCHANT-A

21.55

5.019493

11723294

JIANGSU HENGRU-A

31.46

3.350854

4207303

ZIJIN MINING-A

3.91

2.894737

124843965

176289969

JIANGSU YANGHE-A

126.33

4.81208

3163300

ZOOMLION HEAVY-A

8.8

140935331

JIANGXI COPPER-A

21.79

6.866111

22789691

10.3

4.040404

29854205

JINDUICHENG -A

11.95

7.367475

13581844

CHINA LIFE INS-A

CHINA MINSHENG-A CHINA NATIONAL-A

5.83

2.640845

6.67

9.884679

113695634

CHINA OILFIELD-A

17.02

4.353158

9519000

CHINA PACIFIC-A

20.8

5.050505

33209959

JIZHONG ENERGY-A

13.1

9.07577

46333842

CHINA PETROLEU-A

6.18

2.657807

60846281

KANGMEI PHARMA-A

15.87

1.470588

29964231

241.6

4.25027

4281280

37.56

4.916201

13107965

CHINA RAILWAY-A

4.62

2.895323

48392656

KWEICHOW MOUTA-A

CHINA RAILWAY-A

2.58

3.614458

64671063

LUZHOU LAOJIAO-A

CHINA SHENHUA-A

22.5

4.651163

28526725

METALLURGICAL-A

2.1

3.960396

55067878

2.53

2.016129

40037886

3.93

8.864266

144572360

2.505695

CHINA SHIPBUIL-A

4.83

3.426124

124861193

NINGBO PORT CO-A

CHINA SOUTHERN-A

3.57

4.692082

87951070

PANGANG GROUP -A

ZTE CORP-A

MOVERS

297

0 2340

INDEX 2317.179

CHINA STATE -A

3.15

3.278689

150432685

PETROCHINA CO-A

26929232

HIGH

2333.48

CHINA UNITED-A

3.86

1.846966

156007279

PING AN BANK-A

14.21

3.495994

28173773

LOW

2188.04

CHINA VANKE CO-A

8.6

2.994012

107057198

PING AN INSURA-A

42.05

5.600201

40205115

CHINA YANGTZE-A

6.45

1.895735

40064338

POLY REAL ESTA-A

10.65

4.411765

74467050

CHONGQING WATE-A

5.63

3.683241

10883969

QINGDAO HAIER-A

11.17

2.665441

29874620

11.48

7.591378

146137970

QINGHAI SALT-A

32.54

5.341534

10209780

PRICE DAY %

Volume

PRICE DAY %

Volume

CITIC SECURITI-A

52W (H) 2796.352 (L) 2186.962

2180

5-Sep

7-Sep

FTSE TAIWAN 50 INDEX NAME

NAME

ACER INC

26.2

0.3831418

13319500

FORMOSA PLASTIC

ADVANCED SEMICON

22.7

21839574

FOXCONN TECHNOLO

ASIA CEMENT CORP

35.4

4.270987

4995142

FUBON FINANCIAL

ASUSTEK COMPUTER

81.5

1.494396

4018750

118.5

0.4237288

29.8

NAME

PRICE DAY % 1.941748

Volume

TAIWAN MOBILE CO

105

16452508

TPK HOLDING CO L

399 -0.1251564

3085209

1.880342

10864068

TSMC

83.8

3.329223

44499367

UNI-PRESIDENT

47.8 -0.5202914

11629468

UNITED MICROELEC

11.8

1.287554

28409053

WISTRON CORP

33.8

0.5952381

9629574

4982547

304

3.050847

4745049

HON HAI PRECISIO

0.678733

32920288

10.05

5.567227

195030448

HOTAI MOTOR CO

208.5

1.459854

232101

141

16459424

HTC CORP

262

3.149606

27564619

CATHAY FINANCIAL

28.65

1.415929

17257532

HUA NAN FINANCIA

0.9463722

4638701

YUANTA FINANCIAL

13.85

2.214022

7630173

CHANG HWA BANK

15.3

0.990099

5664897

LARGAN PRECISION

643

0.1557632

1540887

YULON MOTOR CO

52.1

0.7736944

5794956

CHENG SHIN RUBBE

72.3

1.687764

3528939

LITE-ON TECHNOLO

1.838755

2329609

CHIMEI INNOLUX C

9.88

4.994687

63953857

MEDIATEK INC

CHINA DEVELOPMEN

7.08

0.7112376

23427871

MEGA FINANCIAL H

CHINA STEEL CORP

24.85

3.326403

32539879

CHINATRUST FINAN

17.75

0.2824859

26540984

90.5

0.1106195

5464636

QUANTA COMPUTER

AU OPTRONICS COR CATCHER TECH

CHUNGHWA TELECOM COMPAL ELECTRON

322

2.547771

16558506

22.25

1.598174

26419748

NAN YA PLASTICS

1.123596

4586985

PRESIDENT CHAIN

156.5

0.6430868

745152

78.6

1.158301

5613817

25.4

0.7936508

3823869

SILICONWARE PREC

1.190476

5060002

DELTA ELECT INC

111.5

4.205607

11223903

SINOPAC FINANCIA

11.55

1.315789

12713148

FAR EASTERN NEW

31.15

1.136364

4879797

SYNNEX TECH INTL

66.5

0.9104704

1959220

FAR EASTONE TELE

71.5

-1.243094

3307396

TAIWAN CEMENT

33.75

3.846154

25045390

FIRST FINANCIAL

17.45

0.5763689

8756943

TAIWAN COOPERATI

16.3

0.9287926

7542089

FORMOSA CHEM & F

75.7

0.9333333

3290150

TAIWAN FERTILIZE

73.5

1.37931

2333742

FORMOSA PETROCHE

83.2 -0.2398082

2216895

TAIWAN GLASS IND

28.4

1.247772

2626189

MOVERS

2 5120

INDEX 5108.03 HIGH

5115

LOW

5011.06

52W (H) 5621.53 (L) 4643.05

5010

5-Sep

7-Sep

September 10, 2012 business daily | 13

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

MeLCo CroWn enTerTaInMenT

MgM CHIna HoLDIngS 30.5

21.9

30.3

21.7

Min 21.15

21.1

Last 21.8

SanDS CHIna LTD

average 27.520

Max 27.95

Last 27.75

Max 30.4

average 30.102

PRICE

Max 12.74

average 12.551

Min 12.46

Wynn MaCaU LTD

27.8

16.3

17.6

27.6

16.2

27.4

16.1

27.2

17.5 17.4 17.3

16.0 Max 16.36

average 16.090

DAY %

YTD %

(H) 52W

Min 16

Last 16.04

17.2 Max 17.64

average 17.499

-2.191113816

110.6499939

78.15999603

BRENT CRUDE FUTR Oct12

114.25

0.669662525

9.256957062

123.2900009

89.11000061

GASOLINE RBOB FUT Oct12

301.96

0.956201939

19.47455884

305.4100037

220.5600023

986

-0.504540868

9.799554566

1044.75

799

2.682

-3.386167147

-19.26550271

4.590000153

2.299999952

GAS OIL FUT (ICE) Oct12 NATURAL GAS FUTR Oct12 HEATING OIL FUTR Oct12 Gold Spot $/Oz Silver Spot $/Oz

314.89

0.203659507

10.19772528

333.8899851

252.5300026

1735.85

1.523

10.9233

1862.38

1522.75

33.68

2.4661

20.9987

41.485

26.085

Platinum Spot $/Oz

1591.35

0.3766

14.1162

1837.5

1339.25

Palladium Spot $/Oz

653.55

0.7508

0.0077

739.72

537.54

LME ALUMINUM 3MO ($)

2023

2.430379747

0.148514851

2438

1827.25

LME COPPER 3MO ($)

7970

3.49305285

4.868421053

9160

6635

LME ZINC

1970

3.195390257

6.775067751

2269

1718.5

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Nov12 Dec12

16500

2.739726027

-11.81186531

22150

15236

14.955

2.256410256

-1.644195988

17.5

14.15499973

799.5

0.125234815

36.37526652

849

499

WHEAT FUTURE(CBT) Dec12

PRICE

(L) 52W

0.93164451

Last 17.24

Min 17.24

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 %

1.0385 1.601 0.9444 1.2816 78.24 7.9883 7.7559 6.3427 55.395 31.08 1.2358 29.803 41.665 9591 81.248 1.20973 0.80061 8.0403 10.1392 100.25 1.0301

1.327 0.6285 1.0377 1.5933 0.2684 0.0175 0.0129 0.0047 0.4582 0.4505 0.7849 0.1812 0.432 0 -1.0499 -0.4902 -0.9618 -0.403 -0.5868 -1.2868 -0.0097

YTD %

(H) 52W

1.724 3.0046 -0.6671 -1.1187 -1.6999 0.1415 0.1483 -0.752 -4.2062 1.5122 4.9199 1.5972 5.2202 -5.4426 -3.4659 0.5836 4.0944 1.1679 2.0988 -0.5885 0

(L) 52W

1.0857 1.6302 0.9972 1.4247 84.18 8.0413 7.8077 6.406 57.3275 32 1.3199 30.716 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 7.7526 6.2769 46.875 30.07 1.2259 29.084 41.57 8573 72.057 1.19995 0.77553 7.7018 9.6245 94.12 1.0288

MACAU RELATED STOCKS (H) 52W

(L) 52W

ARISTOCRAT LEISU

2.61

-2.61194

18.63636

3.25

1.88

9483473

153.6999969

CROWN LTD

9.27

0.7608696

14.58591

9.4

7.47

2552248

25.39999962

18.80999947

AMAX HOLDINGS LT

0.061

-29.88506

0.119

0.055

102.25

64.61000061

BOC HONG KONG HO

23.7

1.282051

28.80435

24.95

14.24

16985483

905

1.485842445

25.69444444

953.25

629.5

SOYBEAN FUTURE Nov12

1736.5

-0.601030338

44.19763338

1789

1115.75

COFFEE 'C' FUTURE Dec12

163.05

3.06573957

-30.91101695

281.0499878

SUGAR #11 (WORLD) Oct12

19.38

2.702702703

-15.11169514

COTTON NO.2 FUTR Dec12

76.3

0.407948414

-13.13752277

NAME

CENTURY LEGEND CHEUK NANG HLDGS

World Stock MarketS - Indices

PRICE

DAY % YTD %

VOLUME CRNCY

0.233

1.304346

0.335

0.204

3.18

13.57143

3.5

2.3

98000 37628203

CHINA OVERSEAS

18.36

2.684564

41.60769

19.138

9.979

CHINESE ESTATES

9.79

0.4102564

-21.68

13.68

8.3

17026

CHOW TAI FOOK JE

9.5

2.813853

-31.75287

15.16

8.4

6719200

EMPEROR ENTERTAI

1.39

-0.7142857

25.22522

1.48

0.97

1630000

FUTURE BRIGHT

1.15

173.8095

1.24

0.3

2238000

GALAXY ENTERTAIN

21.8

5.31401

53.08989

24.95

8.69

17459637 1881832

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

13306.64

0.1101414

8.914056

13338.66016

10404.49

NASDAQ COMPOSITE INDEX

3136.424

0.01951648

20.39323

3139.612

2298.89

HANG SENG BK

111.7

1.453224

21.21541

112

84.4

FTSE 100 INDEX

5794.8

0.3022152

3.993339

5989.07

4868.6

HOPEWELL HLDGS

25.55

2.610442

28.65055

25.65

18.56

1588792

DAX INDEX

7214.5

0.6581251

22.31387

7248.51

4965.8

HSBC HLDGS PLC

68.9

2.453532

16.77966

71.8

39254932

NIKKEI 225

8871.65

2.201238

4.92352

10255.15

8135.79

HUTCHISON TELE H

3.45

-2.266289

15.38462

3.88

2.53

12308000

HANG SENG INDEX

19802.16

3.086318

7.419662

21760.33984

16170.35

LUK FOOK HLDGS I

21.35

6.75

-21.21771

38.5

14.7

2547900

MELCO INTL DEVEL

6.07

2.360877

5.199307

8.35

4.3

4038750

CSI 300 INDEX

2317.179

4.479889

-1.217653

2796.352

2186.962

MGM CHINA HOLDIN

12.7

4.958678

32.39988

14.76

7.6

3335465

TAIWAN TAIEX INDEX

7424.91

1.340163

4.989057

8170.72

6609.11

MIDLAND HOLDINGS

4.22

-1.860465

6.726097

5.217

2.887

4614000

NEPTUNE GROUP

0.169

0.5952381

52.25225

0.205

0.08

8070000

NEW WORLD DEV

9.84

3.688093

57.18849

10.96

6.13

18428460

SANDS CHINA LTD

15714854

KOSPI INDEX

1929.58

2.569582

5.687555

2057.28

1644.11

S&P/ASX 200 INDEX

4325.839

0.300286

6.638095

4448.5

3840.2

4143.679

0.9949652

8.416743

4234.734

3217.951

FTSE Bursa Malaysia KLCI

1624.55

0.4054413

6.129107

1655.49

1310.53

NZX ALL INDEX

826.529

0.8459046

13.25413

829.493

712.548

JAKARTA COMPOSITE INDEX

12.4

Last 12.7

17.7

96.42

NAME

29.5

16.4

WTI CRUDE FUTURE Oct12

CORN FUTURE

Last 30.4

CURRENCY EXCHANGE RATES

NAME

METALS

Min 29.6

28.0

Commodities ENERGY

12.5

29.7

SJM HoLDIngS LTD

Min 27.2

12.6

29.9

21.3

average 21.489

12.7

30.1

21.5

Max 21.85

12.8

PHILIPPINES ALL SHARE IX

3454.83

0.7562192

13.45762

3531.5

2695.06

HSBC Dragon 300 Index Singapor

577.58

0.24

16.37

STOCK EXCH OF THAI INDEX

1246.1

0.1752524

21.53279

1255.89

843.69

HO CHI MINH STOCK INDEX

397.51

1.04217

13.07354

492.44

Laos Composite Index

1021.48

-0.5955625

13.56591

1064.23

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

27.75

5.916031

26.42369

33.05

14.9

SHUN HO RESOURCE

1.13

1.28

0.82

SHUN TAK HOLDING

2.85

1.785714

11.36605

3.689

2.241

4714474

SJM HOLDINGS LTD

16.04

0.7537688

28.26319

17.614

10.079

7283743

SMARTONE TELECOM

14.78

-2.890933

9.970242

18.5

9.8

14451991

WYNN MACAU LTD

17.22

1.056338

-11.69231

25.5

14.62

12346975

ASIA ENTERTAINME

3.45

6.153846

-41.32653

7.49

2.4

126825

BALLY TECHNOLOGI

45.77

-0.0218436

15.69767

49.32

24.74

510418

332.28

BOC HONG KONG HO

3.05

27.23244

3.25

1.81

2451

876.33

GALAXY ENTERTAIN

2.8

1.449275

49.73262

3.24

1.08

8000

INTL GAME TECH

12.51

-0.0798722

-27.26745

18.1701

10.92

2651096

JONES LANG LASAL

74.99

1.54367

22.41267

87.52

46.01

226806

LAS VEGAS SANDS

44.3

2.333102

3.674235

62.09

34.72

9317799

MELCO CROWN-ADR

12.36

3.909206

28.48233

16.02

7.05

4846570

MGM CHINA HOLDIN

1.64

37.61931

1.96

1.0025

10400

MGM RESORTS INTE

10.7

3.581801

2.588683

14.9401

7.4

11934059

15.23

-0.3272251

29.9488

18.77

7.55

451603

2.04

-2.857143

26.89939

2.2782

1.2624

4600

102.74

1.171837

-7.014208

154.7051

90.108

2416687

SHUFFLE MASTER SJM HOLDINGS LTD WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily September 10, 2012

Opinion

China in the eye of the beholder Minxin Pei

Professor of Government at Claremont McKenna College and a non-resident senior fellow at the German Marshall Fund of the United States

ne of the most glaring, if unremarked, oddities concerning China nowadays is how perceptions of its leaders diverge depending on the observer. In the eyes of the Chinese public, government officials are venal, incompetent, and interested solely in getting lucrative appointments. But Western executives invariably describe Chinese officials as smart, decisive, knowledgeable, and far-sighted – roughly the same adjectives that they once used to describe Bo Xilai, the disgraced Communist Party boss of Chongqing, before he was purged. It is impossible to reconcile these views. Either the Chinese public is impossible to please, or Western executives are hopelessly wrong. But, given that daily experience places Chinese citizens in an infinitely better position than Western executives to evaluate Chinese officials and their conduct, one would have to conclude that they are almost certainly right. And that means that Westerners who have spent considerable time in China and consider themselves seasoned “China hands” need to ask why they have gotten it so wrong. One obvious explanation is that Chinese officials are extremely good at seducing Western businessmen with friendly gestures and generous promises. The same officials who lord it over ordinary Chinese people often summon irresistible charm to woo Western investors. Another selling point for Western executives is that many Chinese officials have engineering backgrounds, in contrast to their Western

counterparts, most of whom are lawyers. To businessmen, engineers are practical problem solvers, whereas lawyers are obsessed with procedural complexities and intent on exploiting contractual loopholes. Moreover, most Chinese officials have learned the jargon of Western business, and can speak intelligently about the problems that companies need to solve.

Different mindset A more subtle reason for Western executives’ perceptions is their subconscious frame of reference when assessing Chinese officials. Senior executives of multinational companies

Most Chinese officials have learned the jargon of Western business, and can speak intelligently about the problems that companies need to solve

tend to have pre-conceived notions of China as just another developing country, and thus evaluate Chinese officials by comparing them with those in other developing countries. This unwitting comparison usually comes out in favour of Chinese officials, who are, as a group, better educated, more cosmopolitan, and more focused on business (because the ruling Communist Party uses economic growth and foreign investment as criteria for promoting officials). And, as an organisation, the Chinese state is far stronger and more purposive than states are in more typical developing countries. But, while it may be natural for Western businessmen to compare China with other developing countries, Chinese citizens have much higher standards, because they do not regard theirs as just another developing country. They view China as special, a re-emerging great power bound to join the ranks of the world’s most advanced countries, and the governance practices that their newspapers cite as models are invariably those of rich societies, not developing ones. Indeed, one sure way to insult the Chinese is to tell them they should feel lucky, because they have a better government than the Indians or Brazilians.

Persistent misconceptions A third reason why Western businessmen get China wrong is that their admiration of the Chinese government is a reflection of their frustrations with their own governments. They have grown

impatient with the messiness of the democratic process, stifling regulations, high taxes, and media scrutiny. By contrast, in China’s oneparty state, they find it is easier to do business with officials who can make quick decisions and implement them almost instantly. Of course, sometimes these executives do miss the rule of law that prevails in the West. But, compared with Chinese private entrepreneurs, representatives of large Western firms are a privileged group, and are not victimised as frequently by official corruption. As a result, they have little direct appreciation of the worst aspect of one-party rule: a rapacious, legally unrestrained elite. The most regrettable aspect of Western executives’ misconceptions of the Chinese government is that they are likely to persist, at least among those who have no direct experience with the dark side of the Chinese state. They are successful, intelligent, and have a high degree of confidence in their political judgment. Moreover, Western corporations are hierarchical and autocratic, similar to the Chinese one-party state, so senior executives’ errors of judgment are rarely challenged directly by their underlings. That is a real pity. Few Western executives understand the political consequences of their misperceptions. Their praise of Chinese officials’ quality and effectiveness is often held up by the Communist Party as an international endorsement of its policies and legitimacy – even if ordinary Chinese know otherwise. ©Project Syndicate

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte 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.

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September 10, 2012 business daily | 15

OPINION

Eighty percent of U.S. Asia wires policy is just showing up Business

Leading reports from Asia’s best business newspapers

Asahi Shimbun Seeking major growth in the world’s largest car market, Toyota Motor Corp. announced September 6 that it plans to double its sales in China by 2015, which could exceed the company’s domestic sales. At an international automotive conference in Chengdu, Atsushi Niimi, Toyota executive vice president, said the company hopes to sell between 1.5 million and 1.8 million units annually in the next three years. That would surpass sales in Japan at some 1.6 million units projected for this year.

JoongAng Daily Korea will seek to develop shale gas as a new major source of energy and expand the country’s imports of the new fossil fuel to 20 percent of all natural gas imports by 2020. The country will also take part in overseas development projects to further improve its energy self-efficiency, with shale gas accounting for 20 percent of its self-developed energy supplies in 2020. But the increased imports of shale gas may not warrant an immediate cut in the energy supply from nuclear power.

Bangkok Post Bangchak Petroleum Plc (BCP), the state majority-owned oil refiner and retailer, has launched its latest push for solar energy in Thailand. The company granted financial support to 13 universities nationwide that have architecture faculties for students to design model houses decorated with solar panels. The company welcomes both designs for new houses or renovating existing houses. Bangchak has spearheaded renewable energy with projects such as solar farms. It is also the country’s sole trader of biofuel.

Jakarta Globe The Association of Indonesian Automotive Manufacturers is in bullish mode on its prediction about car sales this year.   The association known as Gaikindo is now projecting sales nationwide of one million vehicles in 2012, up from its previous estimate of 875,000 vehicles.   Gaikindo said the outlook jumped after it took time to observe and realize that the impact of a new regulation on higher down payments, issued by the central bank and the Finance Ministry, was not as bad as initially predicted.

James Gibney David Shipley Bloomberg Editors

ith China throwing its weight around the South China Sea, and snapping at Japan for its plans to buy disputed islands, the waters of the Pacific are looking a little choppy these days. Time for a little high-level diplomacy, you might think – something that not only eases tensions but also refocuses the nations of the Asia-Pacific on the enormous economic stakes they have in regional peace and stability. If the administration of President Barack Obama is taking seriously this week’s meetings of the Asia-Pacific Economic Cooperation bloc, however, it has a funny way of showing it. Granted, President Obama has a good excuse for not attending the APEC leaders meeting in Vladivostok, Russia. But why did Treasury Secretary Timothy Geithner not attend the earlier meeting of his fellow finance ministers in Moscow? More egregiously, why did U.S. Trade Representative Ron Kirk, the ostensible point person for the administration’s lofty goal of doubling U.S. exports by 2015, skip both the APEC meeting and the latest Trans-Pacific Partnership trade talks to attend the Democratic National Convention in his “personal capacity.” His choice fails the crucial Woody Allen test for effective job performance – the one that says “80 percent of life is just showing up.”

Weak signal Secretary of State Hillary Clinton has taken Obama’s place at the APEC leaders’ summit; Undersecretary of State Robert Hormats is filling in at APEC’s foreign ministers table; and Deputy U.S. Trade Representative Demetrios Marantis has filled in for Kirk, as Undersecretary of Treasury Lael Brainard did for her boss. So at least there are no empty U.S. chairs at what has been, for the past 30 years, the chief Asia-Pacific venue for economic talks. But as diplomatic signals go, this one doesn’t exactly affirm the administration’s so-called pivot to Asia. Since its founding in 1989, APEC has done a remarkable job of promoting growth and integration among economies that account for nearly half the world’s trade. The average tariff rate among its members has dropped from 16 percent to 5 percent, in part because of the liberalisation measures put forward in APEC’s voluntary Individual Action Plans. The 1994 Bogor Declaration for “free and open trade and investment in the Asia-Pacific” created the consensus and underpinnings for the Trans-Pacific Partnership, which was launched in 2005.

Yes, APEC meetings can be long on set pieces and short on concrete results and the forum has lost some prominence and clout to groupings such as the East Asia Summit. And yes, the incipient Trans-Pacific Partnership offers the prospect of binding commitments to spur trade, not consensusdriven, voluntary measures.

APEC value Yet APEC not only remains an invaluable incubator for ideas, it is also the one forum that brings together leaders from both sides of the Pacific. As former Australian Prime Minister Paul Keating, one of APEC’s founding fathers, has pointed out, such gatherings have been particularly useful in breaking the ice between Japan’s and China’s leaders. And just as at the United Nations General Assembly, side meetings have loosened numerous logjams, whether on U.S.-China trade or on getting Indonesia to agree to an international peacekeeping force in East Timor. Even the goofy photo-ops in over-thetop local garb – a tradition begun by President Bill Clinton that President Obama nixed last year – can help bridge gaps. That’s not to mention what APEC does at the working level to encourage informal contacts and habits of cooperation.

APEC not only remains an invaluable incubator for ideas, it is also the one forum that brings together leaders from both sides of the Pacific

Perhaps because so many U.S. diplomats are lawyers, or perhaps because the habits of a hegemon are hard to break, U.S. diplomacy often takes on a cold, transactional cast. Still, schmoozing and shoulder-rubbing carry added importance at a time of increased regional tension. Even as Asia’s constellation of regional groupings grows, APEC’s talk shop remains central and deserves more attention from the U.S. than it seems to be getting. As Winston Churchill once said in another context, “To jawjaw is always better than to war-war.” Bloomberg View

16 |

business daily September 10, 2012

CLOSING Jobs figures hint at new Fed stimulus

Calderon calls for oil reform

The Federal Reserve looks set to launch a third round of bond purchases this week to try to drive borrowing costs lower and breathe more life into an economy that is not growing fast enough to lower unemployment. Despite political opposition and some internal dissent, economists said a weak report on jobs growth for August was likely enough to convince the U.S. central bank a looser monetary policy was needed. The economy created just 96,000 jobs in August, well below expectations and less than what is needed to keep up with population growth.

Mexico, the world’s seventh-largest oil producer, needs to change its oil exploration laws to boost output by allowing foreign oil firms greater access, outgoing President Felipe Calderon said on Saturday. Mexico’s oil industry is dominated by state monopoly Pemex and private companies have limited access to the market. The country faces a key test as production has fallen sharply in recent years and Pemex risks becoming a net importer of crude within a decade. Mr Calderon called on the new administration to reform and modernise the industry.

Lagarde backs Draghi plan, offers IMF support Chinese investment programme also praised

he International Monetary Fund yesterday strongly backed the European Central Bank’s plan to staunch the eurozone debt crisis with unlimited bond purchases, saying it was ready to get involved in designing and monitoring its implementation. IMF Managing Director Christine Lagarde also said large, debt-strapped eurozone countries Spain and Italy had taken enough action to repair their finances to merit aid from the rest of the European currency union. But, amid pressure on Madrid to request a full European bailout, Ms Lagarde left open the scale of the IMF’s possible involvement in ECB head Mario Draghi’s plan, which was approved by the central bank’s policy making council on Thursday. Under the Draghi plan, the ECB would stand ready to buy any amounts of sovereign debt with a term of up to three years, thereby ensuring a government’s access to funding, in return for a bailout deal with tight strings attached. “Whatthecentralbankhasannounced last Thursday is a clear indication of the framework in which it would be an active player in restoring the situation in the eurozone,” Ms Lagarde told reporters in the Russian port city of Vladivostok after the Asia-Pacific summit. “Our sense is that now the euro partners know exactly what they have to do. As far as the IMF is concerned, we shall certainly be ready to help and to assist in the design and monitoring

Christine Lagarde – looking for a IMF role

of eventual programmes.” Economic headwinds from Europe have slowed growth in the 21 members of the Asia-Pacific Economic Cooperation (APEC), which accounts for over half of world economic output and whose leaders held a two-day summit. Ms Lagarde backed a new, US$158billion Chinese infrastructure spending offensive, saying it was important that countries running external surpluses make their contribution to supporting global growth.

A possible aggravation of the euro crisis, failure by the United States to resolve the so-called ‘fiscal cliff’ and the vulnerability of emerging market economies posed the three main risks to the world economy, she added. The exact scale and nature of the IMF’s involvement in the ECB’s bondbuying plan - including whether it might deploy its balance sheet - is not yet clear. But Ms Lagarde showed sympathy with southern Europe as it struggles to escape a debt trap, and little understanding for

concerns in Germany, Europe’s largest economy, that bond buying would debase the euro and drive up inflation. “The IMF is there to help and support and will cooperate in the design of any such set of policies.” Any substantial financial commitment on the part of the IMF would require the full conditionality of an official lending programme of the type that has kept the weakest of the eurozone states, Greece, afloat. Reuters

Putin rules out trade war with EU European Commission probe over Gazprom seen as a diversion

Russian state is the majority stockholder in Gazprom

ussian President Vladimir Putin dismissed yesterday any talk of a trade war with Europe over a European Commission competition investigation into state-controlled gas monopoly Gazprom.

“We have very warm, constructive relations. It is not a trade war,” Mr Putin told reporters after an Asia-Pacific Economic Cooperation (APEC) summit in the Russian port city of Vladivostok. The European Union’s executive

Commission opened the inquiry on Tuesday into suspicions that Gazprom, which is more than 50 percent owned by the Russian state, is hindering the free flow of gas across the EU and mistreating its customers by linking the cost of gas to oil prices. However, Mr Putin linked the recent investigation to European debt crisis, blaming some of the European Commission officials in desire to shift internal problems to Russia. “Primarily, it [the probe] stems from the tough economic situation in the euro zone as we are talking here mainly about Eastern European countries. The European Union is largely subsidising Eastern European economies,” he added. “It seems that now someone in the European Commission decided that we should share a part of this burden ...

But this approach is not constructive.” Europe buys around a quarter of its gas from Gazprom, Russia’s export monopoly, typically under long-term contracts whose prices are mainly tied to the price of oil and only a small element linked to cheaper ‘spot’ gas prices. Gazprom’s average Europe sale price is expected at US$405-415 per 1,000 cubic metres in 2012 – or around four times the average spot price on the U.S. natural gas market, where booming shale gas production has created a major supply glut. Gazprom has said it was armed with legal and political reasons to respond to the investigation but, reflecting its reliance on the European market for around half of its revenues, has refrained from any action that might disrupt gas supplies. Reuters