Year I Number 121 Tuesday September 18, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00 www.macaubusinessdaily.com
Boutique casino scheme planned for Cotai borders A
US$800 million (6.39 billion patacas) boutique-style casino hotel is planned on land adjacent to the One Oasis residential project on the Cotai-Coloane border. The scheme could start breaking ground next year, with the aim of opening in the fourth quarter of 2015 or early 2016. It will be the seventh new build Cotai scheme announced or re-started in the past four years. It comes at a time when the government is publicly committed to cooling the growth of the Macau market. Unlike the MGM China Ltd and SJM Holdings Ltd Cotai applications however, it will not need a Cotai land grant. Business Daily understands
the boutique venue has been approved under a so-called service provider agreement using a gaming licence of an existing concession holder. None of the consortium members on the One Oasis residential scheme – a multi-tower luxury development that attracted strong buyer interest – are involved as investors in the casino project Business Daily has been told. The One Oasis residential consortium included Hong Kong-listed Success Universe Group, a 49 percent joint venture partner in Ponte 16, an SJM-licensed Macau gaming resort that opened in February 2008. More on page 3
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HANG SENG INDEX 20760
20710
20660
20610
September 17
Coloane house deeds registered by govt
1 mln Zhuhai folk may get multi-entry visas Page 4
Bidder sues over footbridge tender Page 6
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HSI - Movers Name
Judge’s sickness pushes La Scala trial to 2013 The Macau court trial of Hong Kong property tycoon Joseph Lau Luen Hung for bribery over the La Scala deal has been postponed until next year because the judge is ill. A spokesperson for the Court of First Instance said the hearings – due to begin yesterday – had been put back to January 7 because presiding judge Alice Costa was currently unable to attend. Page 2
Gongbei border halt raises bottleneck fears Expansion of the Gongbei border gate has been suspended on the Zhuhai side because of reported financial problems faced by the mainland contractor. It’s raised fears of bottleneck chaos at a time when millions more mainland residents could be arriving in Macau under changes to visa arrangements and due to the early 2013 opening of the Guangzhou-Zhuhai high speed rail link.
%Day
CNOOC LTD
3.70
HONG KONG EXCHNG
2.46
SANDS CHINA LTD
2.46
CATHAY PAC AIR
1.10
HSBC HLDGS PLC
1.03
CHINA PETROLEU-H
-1.64
CHINA OVERSEAS
-1.83
SINO LAND CO
-2.09
ESPRIT HLDGS
-2.41
CHINA RES LAND
-3.41
Source: Bloomberg
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Pork bun legend has HK on menu A local pork chop bun restaurant favoured by tourists will invest millions to expand to the Hong Kong market. Café Tai Lei Loi Kei, founded in 1968, already has local outlets in Taipa, The Venetian Macao and near St Paul’s ruins in the old town. The owners plan to open two Hong Kong takeaway shops in Yau Ma Tei in Kowloon and Central near Lan Kwai Fong.
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business daily September 18, 2012
macau Private teachers subsidy increased Private school teaching staff will see their monthly direct subsidies increased by at least 230 patacas (US$29), starting from this month. According to yesterday’s Official Gazette, the government has upgraded the subsidy for all six different levels, which are based on the teacher’s education level and training. For teachers with a bachelor’s degree and ‘adequate’ experience, the direct subsidy will be increased by 500 patacas to 4,800 patacas a month. The subsidies are paid out in three instalments each year in April, August and December.
Trial of Chinese Estates boss delayed The trial of Hong Kong tycoon Joseph Lau for bribery was postponed because the judge is ill Tony Lai
tony.lai@macaubusinessdaily.com
T
he bribery trial of Chinese Estates Holdings Ltd boss Joseph Lau Luen Hung and BMA Investment chairman Steven Lo Kit Sing has been postponed until next year. A spokesperson for the Court of First Instance said the trial, which had been due to begin yesterday, had been put back to January 7 because presiding judge Alice Costa was unwell. The spokesperson said the case was relatively complicated and could not start without Judge Costa. The Public Prosecutions Office has accused Mr Lau, Mr Lo and six others of being part of the web of corruption woven by Ao Man Long when he was secretary for transport and public works. The Court of Final appeal found in May that Mr Ao took bribes of HK$20 million (US$2.5 million) from the two Hong Kong tycoons in 2006 in return for granting them 78,700 square metres of land near the airport for an upmarket housing
project called La Scala. The Court of Final appeal sent Mr Ao to prison for 29 years. A lawyer for Mr Lo, Jorge Neto Valente, told reporters his client had attended yesterday’s court hearing but that Mr Lau was absent because of illness. Mr Neto Valente is not representing Mr Lau in the bribery trial but he represents Chinese Estates in its efforts to prevent the government from taking back the land for La Scala. Mr Neto Valente said that the postponement of the trial had not come as a surprise but complained about the court’s failure to notify counsel for the accused in advance.
Getting the treatment He said he did not know whether Mr Lo would attend the start of the trial next year. Mr Neto Valente said he expected the court to acquit his client. “Why not? If there is justice, I’m
very confident,” he said. “If the court is independent, the judgement is fair. If the court is not independent, there is no judgement, no fairness.” He said dozens of witnesses would testify in the trial. The government decided to repossess the land it granted for La Scala in 2006 and extra land it granted for the project last year. Moon Ocean Ltd, a wholly-owned subsidiary of Chinese Estates, said it and a buyer of a flat in La Scala had asked the Court of Second Instance on Friday to halt the government’s move to take back the land. Mr Neto Valente criticised the government on Sunday for trying to take back the land after six years had elapsed. He said the government “must ponder the facts that have taken place during that period of time”, including the investment made by Chinese Estates. The prosecution in this latest trial is also expected to present evidence of
Joseph Lau (top) and Steven Lo are charged with offering a HK$20 million bribe to Ao Man Long
corruption in the award of contracts to run the water treatment plants on Coloane and in the Zhuhai-Macau Cross-Border Industrial Park. The other accused in the trial include Luc Vriens, the head of Belgian company Waterleau Group NV; businessman Pedro Chiang; and Camila Chan Meng Ieng, Mr Ao’s wife.
Symphony exits Macau with a healthy profit
I
nvestment company Symphony International Holdings Ltd has cashed out from Macau’s property market, selling its last two remaining flats at One Central Residences “at a gain of approximately 51.6 percent” above the purchase price. The company told the London Stock Exchange late last week that it completed the sale of its remaining high-end residential apartments here for US$4.9 million (39.1 million patacas).
The firm specialises in hospitality, healthcare and real estate in the AsiaPacific region. It bought four flats at One Central Residences in August 2009. In April, Symphony said it had “begun looking to divest these assets” as the Macau property market remained “buoyant”. It sold the first pair of flats in July for US$4.1 million, at a gain of about 55 percent. Symphony’s website lists the One Central flats, managed by the Mandarin Oriental Hotel Group,
Symphony sold its final two flats at One Central Residences for 39.1 million patacas
as the investment house’s only investment in Macau. The company reported an 8.3 percent increase in net asset value during the second quarter of this year to US$447.8 million.
The Financial Services Bureau said the average price for residential properties in Macau reached a new record of 62,137 patacas a square metre in July. V.Q.
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September 18, 2012 business daily | 3
MACAU New neighbours - boutique casino planned on land adjacent to One Oasis (Photo: Manuel Cardoso)
Boutique casino scheme planned for Cotai borders High end ‘club style’ project with small number of gaming tables Associate Editor
A
US$800 million (6.39 billion pat acas ) bou tiq u e-style casino hotel – thought to have a mid double digit number of tables – is planned on land adjacent to the One Oasis residential project on the Cotai-Coloane border. The scheme could start breaking ground as early as next year, with the aim of opening in the fourth quarter of 2015 or early 2016. The luxury hotel’s standard rooms are likely to be 2,200 square feet (204 sq. metres) with a few suites as large as 15,000 sq. ft, Business Daily understands. It will be the seventh new build Cotai scheme announced or restarted in the past three years. It comes at a time when the government is publicly committed to cooling the growth of the Macau market. Unlike the MGM China Ltd and SJM Holdings Ltd Cotai applications however, the boutique project is being developed on private land and does not need a new government land concession.
Service provider Business Daily further understands the boutique casino will operate under a so-called service provider agreement. This is different from the concessionaire model – where a licensed casino operator applies for a land concession and project permission from the government. The service agreement allows – at the discretion of the government – third parties who already have access to land, to operate casinos under the gaming licence of an existing concessionaire. In 2008 the government officially announced a moratorium on service provider agreements – also known as satellite casinos – in order to curtail the growth of the market. This was in parallel with other market-cooling measures such as the 5,500-table cap until 2013 and the three percent annual compound growth for a decade thereafter. Business Daily understands the boutique scheme was one of the last service provider schemes submitted to the regulator, the Gaming Inspection and Coordination Bureau, prior to the moratorium. A person with direct
administrative knowledge of the situation told Business Daily: “Prior to the introduction of the table cap in 2010, all the concessionaires were asked to list their future projects.” A note from Union Gaming Research Macau says that of the US$800 million capital cost of the new boutique project, US$500 million will be in equity (of which US$300 million is already subscribed) and US$300 million will be of debt in the form of bank loans. None of the consortium members on the One Oasis residential scheme are involved as investors in the casino project, Business Daily has been told. The One Oasis consortium included Hong Kong-listed Success Universe Group, a 49 percent joint venture partner in Ponte 16, an SJMlicensed gaming resort that opened in February 2008.
Revenue stream The gaming licence provider in the boutique project – yet to be officially announced – will also take a percentage of gaming revenue. The going market rate in the case of the service provider agreements arranged by SJM is five percent of mass market gross gaming revenue and three percent of VIP GGR. The principals on the boutique scheme are understood to be Stephen Hung, Peter Coker and Walter Power. Mr Hung is – according to an unrelated regulatory filing with the Hong Kong Stock Exchange – a former co-head of investment banking at Merrill Lynch in Hong Kong, where he was responsible for the Asia Pacific region. According to another filing Mr Hung was also until April 2002 a vice-chairman and director of eSun Holdings Ltd, one of the original partners in the Macao Studio City scheme. He is currently vicechairman of Rio Casino in Macau, one of the City Clubs venues operating on a casino licence from Galaxy Entertainment Group Ltd. Mr Coker is a banker. According to Bloomberg Businessweek he is a partner in a China-based venture capital firm called TDR Capital. Mr Power is the former chief
operating officer of New Cotai Entertainment LLC, an original investor and developer of Macao Studio City before MPEL took over the project in 2011.
Attempts by Business Daily to contact the principals for comment were unsuccessful. But a person with knowledge of the original service agreement confirmed key details.
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business daily September 18, 2012
macau Visa-free entrance for Russia nationals Starting September 30, Russian citizens will be officially allowed to enter Macau without the need for a visa and stay for up to 30 days, the Official Gazette confirmed yesterday. The same visa policy will apply to Macau passport holders travelling to Russia. The agreement was signed in Beijing back in June by Russian ambassador to China, Sergei Razov, and Macau’s Secretary for Administration and Justice Florinda Chan. Last year, more than 16,000 tourists from Russia visited the territory. A similar visa-free regime already existed between Russia and Hong Kong.
Freeze on Gongbei work raises bottleneck fears Suspending work on the Gongbei border crossing expansion means its creaking facilities will struggle to cope with an expected influx of tourists Vítor Quintã
vitorquinta@macaubusinessdaily.com
T
he suspension of work to expand facilities on the Zhuhai side of the Border Gate could create a bottleneck as soon as next year, when the GuangzhouZhuhai Intercity Railway reaches its terminus there, an urban planning expert has warned. TDM reported that the contractor stopped work last week, saying it lacked money to buy new equipment to complete the 480 million yuan (607 million pataca) project. The first phase of the expansion, covering an area of 560,000 square metres, is expected to increase the capacity of the crossing from 350,000 travellers a day from 150,000 people. Macau completed work on its side of the crossing last year, allowing a maximum of 500,000 arrivals and departures each day. The entire facility was due to open early next year, before the peak in travel during the Lunar New Year holidays, which start on February 10. The opening was also meant to coincide with the opening of the Gongbei terminus of the new Guangzhou-Zhuhai railway. Professor Ni Sheng of the Macau University of Science and Technology’s Faculty of Management and Administration
told Business Daily the suspension of work could push back the opening, creating a bottleneck. Ms Ni said the Zhuhai side of the crossing was “quite busy already”, dealing with a daily average of 260,000 people, which makes it the busiest of the mainland’s border crossings. Mainland authorities have changed visa restrictions to make it easier for 20 million internal migrants living in Beijing, Tianjin, Shanghai, Chongqing, Guangzhou and Shenzhen to visit Macau or Hong Kong, and the first to visit Macau are
expected next month. Ms Ni said the opening of the final section of the new GuangzhouZhuhai railway, which will reduce the journey between the cities to about 50 minutes from more than two hours, would swell the crowds at the border.
Tarnished image She said the Gongbei crossing could give visitors a hugely offputting welcome. “If people realise they need to take too much time entering Macau,
The new Gongbei border facilities were due to open early next year along with the new Guangzhou-Zhuhai railway (Photo: Manuel Cardoso)
it’s not at all good for tourism,” Ms Ni said. She said word-of-mouth reports could further tarnish the image of Macau, which already struggled to get visitors to come back. But she said there was little the government could do, considering that the expansion work was being handled by the Zhuhai authorities. Ms Ni said one thing the city could do was to follow Hong Kong’s lead in requesting a suspension of the rule change for mainland internal migrants. “After they issued this policy, there will be lots of people coming to Macau. There will be a huge pressure on the border,” she said. “Macau residents have expressed their desire to reduce visitors from China.” Hong Kong chief executive Leung Chun Ying said two weeks ago that it had been decided to suspend indefinitely the rule change, which would have made it easier for 4.1 million internal migrants living in Shenzhen to visit Hong Kong. But Ms Ni said Macau was unlikely to follow Hong Kong’s example. “The two cities are very different. Macau needs more visitors to feed the gaming industry, which account for most of the public revenue,” she said.
Zhuhai ponders multiple-entry visas for Macau Zhuhai residents may soon be pouring into Macau in much the same way as Shenzhen residents pour into Hong Kong Xi Chen
xi@macaubusinessdaily.com
M
ainland officials are looking into giving Zhuhai residents multiple-entry visas for Macau, says Lao Ngai Leong, one of Macau’s representatives in the National People’s Congress. The Chinese-language Macao Daily News quoted Mr Lao as saying there was no schedule for introducing such visas. The Macau government has repeatedly proposed multiple-entry visas for Zhuhai residents but Beijing has said the timing depends on Macau’s capacity to absorb tourists. The newspaper said more than 1 million people holding Zhuhai identity cards could be eligible for multiple-entry visas. Mr Lao said the additional visitors would not put too much pressure on the city’s infrastructure. He said the increased tourist numbers would promote economic and
social interaction between the cities. A professor of business economics at the University of Macau, Ricardo Siu Chi Sen, said many Zhuhai residents already had close ties to Macau. Mr Siu said residents in Zhuhai had a similar standards of living and patterns of consumption to people here. “Although there might be more congestion and more public resource consumption, the overall benefits outweigh the costs,” he told Business Daily. The central government gave Shenzhen the green light to give its residents multiple-entry visas for Hong Kong three years ago.
Grey area One unintended consequence has been the flourishing of parallel trade, as people regularly travel back and forth between Shenzhen and Hong
Kong, selling whatever can be bought more cheaply on one side of the border for profit on the other side. These traders, who sometimes belong to gangs of smugglers, avoid paying import or and export duties. Hong Kong’s South China Morning Post reported on Sunday that more than 3,000 parallel traders crossed the border between Shenzhen and Hong Kong every day. More than half of them were Shenzhen residents taking advantage of multiple-entry visas. The parallel traders have caused unrest in Hong Kong. About 50 protesters held a demonstration at the weekend in Sheung Shui near the border with the mainland. Mr Siu believes that giving Zhuhai residents multiple-entry visas for Macau could make parallel trade a problem here. But he said the governments of
Macau and Zhuhai should work together to prevent parallel trade becoming a problem. “Referring to the recent case in Hong Kong, if the activities in question lead to complaints from local residents, the government has to take action,” Mr Siu said. “The government must keep an eye on developments and have a contingency plan for this.” The Macao Daily News quoted Mr Lao of the National People’s Congress as saying customs and border officials were working together to crack down on smugglers and would continue to punish offenders heavily. Mr Lao said the governments of Macau and Zhuhai were also working on reducing the time it takes to get across the border. The Gongbei crossing is built to handle 150,000 travellers a day but actually handles about 260,000.
September 18, 2012 business daily | 5
MACAU
Pork bun café goes the whole hog in HK A favourite haunt of tourists is ploughing millions into a plan to open two shops across the delta, partly because of red tape and staff shortages here Tony Lai
tony.lai@macaubusinessdaily.com
H
ungry Hong Kong tourists will soon be able to save themselves a trip to Taipa and time spent in long queues waiting for a Café Tai Lei Loi Kei pork chop bun. The must-see destination for Hong Kongers is opening two outlets across the Pearl River Delta. Founded in 1968, Café Tai Lei Loi Kei is famed for its pork chop buns, drawing long lines of tourists from Hong Kong and the mainland to Taipa. Café Tai Lei Loi owner and general manager Chan Ka I said there were plans to open two takeaway shops in Hong Kong, one in Yau Ma Tei in Kowloon and the other near Lan Kwai Fong in Central. “Actually we wanted to open the branch stores in Macau but the shortage of human resources makes it difficult,” Ms Chan told Business Daily. “So we chose to go to Hong Kong.” “We also want to test the popularity of our brand in other markets besides Macau,” she said. The café has three branches here. The second outlet opened at The Venetian Macao in 2010, and a takeaway shop opened near the
Ruins of St Paul last year. Ms Chan said it would cost about 4 million patacas (US$500,000) for each of the 400-square-metre outlets in Hong Kong. The café has asked banks to finance part of its expansion into Hong Kong.
Making dough Tai Lei Loi expects to break even within two years of starting operations in Hong Kong. “If everything goes well and we can get the licences from the Hong Kong authorities, the two stores can be ready by the end of this year,” said Ms Chan. Apart from tapping the Hong Kong market, Café Tai Lei Loi is also planning to move its main outlet to a three-storey building with 3,000 square metres of floor space opposite the Museum of Taipa and Coloane History. Ms Chan said they were waiting for a permit to set up shop in the new premises but would be ready to move by the end of next month. The move was expected to cost about 8 million patacas.
Café Tai Lei Loi Kei’s Taipa outlet, now in the old village, will soon move to premises near the Museum of Taipa and Coloane History (Photo: Manuel Cardoso)
The Taipa outlet sells about 800 buns on weekdays and up to 1,200 at weekends. Despite the café’s success, it faces some hurdles common to small businesses here. “The shortage of manpower
and the inflation of prices of imported goods” were a constant headache, said Ms Chan. The present outlet on Taipa is allowed to operate only as a takeaway and problems with its permit meant it had to close temporarily in December.
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business daily September 18, 2012
macau Sands China boss at Voice of China press call Edward Tracy, president and chief executive Macau casino operator of Sands China Ltd, attended a press conference in Shanghai ahead of ‘The Voice of China’ concerts to be held at The Venetian Macao-Resort-Hotel on Friday and Saturday. The concert format is based on a reality talent show screened on mainland television. Tickets for Friday sold out within hours. The Saturday show, added due to public demand, also exhausted its ticket allocation within hours. A total of 28 contestants and their four celebrity mentors perform at both Macau concerts, prior to the show’s season finale on September 30 in Shanghai.
Govt cuts through tangle of land titles on Coloane Coloane residents will receive land titles if they can prove that they were living in their properties before 1999 Tony Lai
tony.lai@macaubusinessdaily.com
T
he government has said it is cutting through the tangle of land titles on Coloane by granting titles to residents who have been in the same properties since before the handover. Land, Public Works and Transport Bureau deputy director Chan Pou Ha told reporters yesterday that the government was following through on a plan made in 2009 to deal with unclear land titles on Coloane. Ms Chan said the government would grant land concession contracts to residents that could show certified documents proving they had been on the land they were claiming before 1999. “The centre of the Coloane village is the first stop of this plan and we are planning to apply it gradually to other areas like Hac Sa and Ka Ho,” Ms Chan said. She did not give a schedule. Ms Chan said two villagers had already had their claims recognised and that her bureau was handling “numerous applications”. Coloane’s development has been plagued by claims to property that is not registered with the government as private. The Portuguese administration refused to recognise the old deeds, known as “sa chi kai” in Cantonese. There were scuffles at a protest on Thursday when the bureau tried to
Some Ka Ho villagers complained their properties were damaged during an attempt to demolish an illegal structure there last week
take back a plot in Ka Ho and demolish an unauthorised building on it. About 70 people confronted 100 police officers. Five people were injured in the scuffles and taken to hospital. The police detained 12 people.
Special case Land, Public Works and Transport Bureau director Jaime Carion said his bureau had asked the villagers to a meeting with officials yesterday, but that the villagers had declined to attend without a written invitation. Representatives of the Ka Ho
community held a press conference on Saturday and asked the government to settle the question of property ownership. The villagers criticised the government for not approving their applications to renovate their homes which, they said, were at risk of collapse. The bureau said it had not received applications from Ka Ho residents to renovate buildings there. Permission to renovate or repair any residential property requires proof of ownership. Mr Carion said the government
had been treating village houses on Coloane as “special case”, saying that the owners needed only to show proof that they lived in their properties. He said the demolition of the illegal structure in Ka Ho had been halted on Friday as five villagers had complained that their properties had been damaged by the process. The head of the bureau’s urban construction department, Marco Chan Weng Hei, said his department had instructed the Civil Engineering Laboratory to assess the damage today and to report as soon as possible.
Building maintenance grants over MOP240m
T
he government’s Support Scheme for Building Maintenance has spent 246 million patacas (US$30.8 million) since it was created in 2007 until September 10, authorities said. Housing Bureau director Tam Kuong
Man told media on Sunday that the fund has subsidised a total of 2,241 projects. The official also revealed that the University of Macau was commissioned a study on the scheme’s impact. The report should be ready this year, he added.
But the bureau has already decided to extend the scheme’s coverage to the removal of illegal structures installed in private buildings façades that present an immediate danger to the public. However, Mr Tam did not confirm whether the removal of all illegal
structures would be covered by the government subsidies in the near future. The scheme currently only supports maintenance and renovation projects for public areas of private buildings. V.Q.
September 18, 2012 business daily | 7
MACAU
Contractor asks court to let it build bridge A construction company alleges the Labour Affairs Bureau tainted its reputation, costing it a valuable contract Vítor Quintã
vitorquinta@macaubusinessdaily.com
disputes, which took place between March and September 2007, were settled by negotiation and that the bureau shelved the complaints. The company asked Chief Executive Fernando Chui Sai On in July to review the award of the contract and sued the government in the Court of Second Instance. The case is pending.
Photo: Kakazi Chan
A
contractor that failed in its bid to build a footbridge for the Seac Pai Van public housing complex on Coloane is suing the government for its conduct of the public tender process. The government awarded the 38.2 million pataca (US$4.8 million) contract to Companhia de Decoração San Kei Ip Ltda in May. But an unidentified company that bid for the work is suing the government, saying an inaccurate report by the Labour Affairs Bureau about its labour relations record cost it the contract. The company has told the Court of Second Instance that the government gave its bid a score that was of only 0.11 point out of 100 lower than the winning bid from San Kei Ip. The company says it received one point fewer than other bidders because the Labour Affairs Bureau told the tender committee the contractor had failed to pay salaries. Over five years the bureau received three complaints about the company from 15 workers who alleged their salaries had not been paid. The contractor says all three
Tender spot As Mr Chui had already approved the award of the contract to San Kei Ip, the plaintiff asked the court for an injunction to stop the work going ahead. But the court rejected the request, saying in a ruling released last week that losing the contract would do no “major damage” to the company. This is not the first time that an open tender has ended up in the courts. The tender in 2010 for the contract to run the wastewater treatment plant on the peninsula is still in limbo because the courts say the government wrongfully excluded two bids. Last October, the president of the Court of Final Appeal, Sam Hou
MOP38.2 million Cost of building a footbridge in Seac Pai Van
Fai, criticised “procedural errors and omissions, or flaws resulting from lack of knowledge about the laws and regulations and poor decision-making” in many administrative procedures. “It turns out that many tenders for service providers are only launched
when the previous contract is about to expire,” Justice Sam said. If a bidder complained to the courts about a tender, the courts, try as they might, could not decide the case quickly enough to satisfy the public’s needs, he said.
Outside home buyers unwelcome New Macau legislator wants outside investors banned from buying residential property in new urban zones Xi Chen
xi@macaubusinessdaily.com
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egislative Assembly member Ng Kuok Cheong asked the government to increase affordable housing supply and allow only Macau residents to purchase properties in the five new reclaimed zones. In an official inquiry released yesterday, Mr Ng said that the government needed to revise its public housing policy to put more emphasis on affordable housing, responding to the needs of the local workforce. The city’s resident labour force is concentrated in the age bracket of 40-60 years old, and the city is short on local workers aged between 30-40 years old, he wrote. Even though this phenomenon is usually linked to population ageing, Mr Ng claims that residents in the latter age bracket are vulnerable and are being forced to move to Zhuhai or Hengqin as they cannot afford housing in the territory. He believes that it is dangerous for a sustainable future of the territory as there might be a gap in the resident workforce, with more jobs being taken up by non-resident workers. Imported labour already accounts for almost a third of the city’s 348,000-strong workforce.
The New Macau Association member thinks the government needs to provide more incentives for people between 30-40 to buy a home in the city. He asked the government to speed up the public housing allocation process and reopen the affordable housing applications as early as next year. The legislator also suggested the government to consider reserving residential units to be developed in the new urban zones for Macau residents only, for a period of up to 50 years. Hong Kong has introduced a controversial plan to restrict the sale of some property plots to citizens and permanent residents but experts have criticised the measure as discriminatory and ineffective to lower housing prices. Most of Macau’s five new urban areas are currently being reclaimed from the sea. The new zones aim to add up to 43,000 housing units and accommodate at least 100,000 more people, the authorities announced in October. Mr Ng hopes the government would use at least half of these residential units in the new areas for public housing purposes.
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business daily September 18, 2012
Greater china
Obama to launch auto trade case against China
industry and is a politically important swing state. “The key principle at stake is that China must play by the rules of the global trading system,” the official said. “When it does not, the Obama administration will take action to ensure that American businesses and workers are competing on a level playing field.” Mr Obama has said Beijing is abusing trade laws by imposing more than US$3 billion in duties on U.S. auto exports. In addition to launching the subsidies case, the president is taking the next formal step in the World Trade Organization to protest those duties, the official said.
Campaign goes to Ohio, a big auto industry base and a swing state
US$1.77 billion
Sharp’s losses in the April to June quarter
Trade issues brought to the fray at American presidential campaign
P
resident Barack Obama will launch a trade complaint against China over what his administration says is Beijing’s unfair government backing of its auto industry, a White House official said on Sunday. Mr Obama will announce during a campaign tour of Ohio that he
is initiating a case against China at the World Trade Organization over allegedly illegal subsidies for automobiles and auto parts, the official said. The move allows Mr Obama to take a stand on China and advance the interests of a major job-providing industry in a state
that could tip the balance in a close election. His opponent, Mitt Romney, has attacked Mr Obama for what he says is an overly cautious approach to pressuring China into observing international norms for trade, foreign exchange, and patents and trademarks. Ohio relies heavily on the auto
Mr Romney’s campaign has accused Mr Obama of making too many concessions to China and has promised to be tougher on issues such as trade and currency manipulation. The Obama campaign has frequently stated that, during his business career, Mr Romney was responsible for sending many U.S. jobs overseas, including to China.
Big employer In Ohio, the auto-parts industry directly employs 54,200 people, the administration official said. When related industries like steel, aluminium, plastics and
CCB targets overseas growth Japanese firm Bank follows client’s globalisation push shut plants As protests flare in severa Chinese cities C hina Construction Bank wants to expand its overseas presence through organic growth and acquisitions, and aims to wrap up a takeover deal this year, chairman Wang Hongzhang told Reuters. China’s second-largest bank also has its problem loans under control and expects to participate in a 1 trillion yuan (US$158 billion) infrastructure spending drive announced recently by the government, Mr Wang said. “As chairman of the bank I would expect to complete an M&A deal this year,” he said on the fringes of a recent Asia-Pacific summit in Russia’s far eastern port of Vladivostok. Shanghai- and Hong Kong-listed CCB’s overseas assets amount to only around 4 percent of its balance sheet, and the bank wants to expand abroad to serve mainly Chinese companies as they extend their reach around the world. “The current status of our international presence does not correspond to the global status we are aiming for,” Mr Wang said. “In the coming years, we would like to accelerate our overseas development. Now, we see the right conditions for expansion of our overseas business – the financial crisis, the European debt issue and strong growth in emerging markets.”
Mr Wang noted that CCB’s strong capital adequacy ratio of 13.82 percent – the highest among China’s large banks – served as a “sound basis” for expansion.
M
Going out CCB has 14 branches or subsidiaries abroad, including Macau, a less extensive presence than China’s largest bank, Industrial and Commercial Bank of China.
I would expect to complete an M&A deal this year Wang Hongzhang, CCB chairman
Mr Wang said CCB’s focus would be on establishing more entities in Europe and America, while it would expand in the AsiaPacific by both setting up new branches or through acquisitions. “The bank’s current priority is to accompany our clients going global,” he said. The so-called “going
out” strategy has, however, faced challenges from regulatory barriers to entry in a number of markets. A s k ed wh eth er CC B w a s i n acquisition talks, Mr Wang declined to be specific, but said: “We have some potential targets for M&A.” Mr Wang welcomed recent government approval of 60 major projects to upgrade China’s roads, railways, ports and airports – areas in which he said CCB would be able to lend profitably. “This will be good for the construction sector, including steel and cement, and even some affiliated equipment and construction materials,” he said. “Infrastructure is a traditional strength of CCB.” The government announced the investment plans in September after economic growth slowed to a threeyear low of 7.6 percent in the second quarter of this year. Reuters
ajor Japanese firms have temporarily shut factories and offices in China after angry protests flared across the country, the result of a territorial dispute that has triggered one of China’s worst outbreaks of antiJapan sentiment in decades. The row between Japan and China, over a group of uninhabited islets in the East China Sea, has led to violent attacks on well-known Japanese businesses such as carmakers Toyota and Honda, forcing frightened expatriates into hiding and sending relations between Asia’s two biggest economies into crisis. Ratcheting up tensions further yesterday, Chinese state media warned Japan it could suffer another “lost decade” if trade ties soured. An editorial in the People’s Daily yesterday hinted at possible sanctions on Japan over the dispute. Acknowledging sanctions would be a “double-edged sword” for China, the paper said Japan could be set back up to 20 years if Beijing chose to make its fourth-largest trading partner suffer. “Amidst a struggle that touches
September 18, 2012 business daily | 9
greater china electronics are taken into account, the auto sector supports about 12.4 percent of the state’s total employment, the official added. Mr Obama constantly reminds Ohio audiences of his administration’s decision to throw a lifeline to auto companies during the recession and Mr Romney’s opposition to that bailout. Beijing’s willingness to hold the value of its yuan currency low, making its goods cheap abroad, has been a sore point between the United States and China. As a result of U.S.-led international pressure, China has let the yuan appreciate in recent years. Even so, the U.S. trade deficit with China hit a record US$295 billion in 2011. Mr Romney has pledged to formally declare China a currency manipulator on his first day in office. The Obama administration has declined to label China in seven semi-annual Treasury Department reports. Administration officials say they have made progress with China on the currency issue over the past few years without ratcheting up tensions by formally labelling Beijing a currency manipulator. The next semi-annual report is due on October 15. In the meantime, Beijing showed no such reticence to invoke trade rules, slapping duties on U.S. auto exports in December 2011 on roughly 92,000 autos and SUVs, worth US$3.3 billion in annual U.S. exports. In making their case to the world trade body in Geneva, Switzerland, U.S. officials say the Chinese government is providing prohibited subsidies to auto and auto parts producers in 12 designated “export bases.” Illegal subsidies were worth US$1 billion between 2009 and 2011, the administration official said. Reuters
not authorised to speak to the media. “The situation will get worse as poor demand, slumping prices and tight credit from banks create a domino effect on the industry.”
Verify receipts
Ghost warehouse stocks haunt steel sector Companies asked to verify receipts for stored metal
Ghost steel inventories are intensifying the wider ailments of the sector
C
hinese banks and companies looking to seize steel pledged as collateral by firms that have defaulted on loans are making an uncomfortable discovery: the metal was never in the warehouses in the first place. China’s demand has faltered with the slowing economy, pushing steel prices to a three-year low and making it tough for mills and traders to keep up with payments on the US$400 billion of debt they racked up during years of double-digit growth. As defaults have risen in the world’s largest steel consumer, lenders have found that warehouse receipts for metal pledged as collateral do not always lead them to stacks of stored metal. Chinese authorities are investigating a number of cases in which steel documented in receipts
ms
al
on territorial sovereignty, if Japan continues its provocations China will inevitably take on the fight,” it said. Japan is a big investor in China, with two-way trade worth US$342.9 billion last year, according to Chinese official data. Protests broke out across dozens of Chinese cities at the weekend, some violent, in response to the Japanese government’s decision last week to buy some of the disputed islands from a private Japanese owner. The move incensed Beijing. The protests focused mainly on Japanese diplomatic missions but also targeted shops, restaurants and car dealerships in at least five cities. Toyota and Honda reported arson attacks had badly damaged their stores in Qingdao.
Restraint needed Japanese Prime Minister Yoshihiko Noda, who met visiting U.S. Defence Secretary Leon Panetta yesterday, urged Beijing to ensure Japan’s people and property were protected. Japanese Foreign Minister
Koichiro Gemba added that Tokyo and Washington agreed the disputed islets were covered by the Japan-U.S. security treaty. Mr Panetta said the United States would stand by its security treaty obligations to Japan, but not take sides in the row, and urged both sides to exercise calm and restraint. “It is in everybody’s interest ... for Japan and China to maintain good relations and to find a way to avoid further escalation,” he told reporters in Tokyo. He called for diplomatic efforts to resolve a worsening territorial spat between Japan and China, the day after warning disputes could draw East Asia into war. “It is extremely important that diplomatic means on both sides be used to try to constructively resolve these issues,” he said, adding a resolution of the dispute has to be based on “clear principles” and international law. “It’s in everybody’s interest for Japan and China to maintain good relations and to find a way to avoid further escalation,” said Mr Panetta. Reuters/AFP
was either not there, belonged to another company or had been pledged as collateral to multiple lenders, industry sources said. Ghost inventories are exacerbating the wider ailments of the sector in China, which produces around 45 percent of the world’s steel and has over 200 million tonnes of excess production capacity. Steel is another drag on a financial system struggling with bad loans from the property sector and local governments. “What we have seen so far is just the tip of the iceberg,” said a trader from a steel firm in Shanghai who declined to be identified as he was
The Shanghai government’s asset regulator said that it had sent a note to state-owned firms in August asking them to verify receipts for stored metal on financing deals they had with steel traders. Police have arrested an employee from Baoyang Warehouse in Shanghai and are investigating documentation for steel stocks that the employee issued to a trading firm, said an official at Baoyang. Baoyang is owned by China Railway Materials Shanghai Co. Ltd. Reuters was unable to contact a member of the police force that could comment on the investigation. The trade firm used the stocks more than once as collateral to obtain loans, said an executive at Shanghai Minlurin, another trading firm that had steel stocks in the warehouse. The receipts used were for steel worth around 380 million yuan (US$59.96 million), the executive said. Similar cases have prompted some trading houses to temporarily halt transactions related to warehouse receipts, disrupting China’s steel business, traders said. “We have suspended business for days as we are afraid we won’t be able to get any stocks from the warehouses if we get a fake receipt,” said one Shanghai-based trader. Banks, too, are giving less credit against warehouse receipts. Reuters
10 |
business daily September 18, 2012
ASIA Rip Curl seeks A$500m offer Rip Curl Group Pty., the closely held Australian surfwear brand, is exploring a sale for as much as A$500 million ($527 million), according to a person with direct knowledge of the situation. The company has hired Bank of America Corp.’s Merrill Lynch unit for the process and is seeking about 10 times its projected A$48 million 2013 earnings before interest, tax, depreciation and amortisation, the person said. Net profit attributable to Rip Curl’s owners fell 49 percent to A$7.9 million in the company’s 2011 financial year, according to its most recent annual report.
India airlines least in need may gain from new rules Most appealing target for foreign investors
I
ndia’s decision to allow local airlines sell stakes of as much as 49 percent to overseas carriers may be of most benefit to operators least in need of investment. SpiceJet Ltd, which has said it’s in “no rush” for funds, may be the most appealing target for foreign investors because of the discount carrier’s low debt and record of profitability, said Sharan Lillaney, an Angel Broking Ltd analyst. Kingfisher Airlines Ltd may struggle to win investment, even as billionaire Chairman Vijay Mallya seeks new financing, after posting at least five straight annual losses. “The biggest beneficiary will be SpiceJet as it has lower debt and a
US$120 million Kingfisher’s loss in the quarter ended June
decent brand image,” Mr Lillaney said. “Kingfisher needs to restructure its balance sheet and convert debt into equity before it can look at attracting any foreign investment.” The two carriers and Jet Airways (India) Ltd rose on speculation the rule change will help the industry win funds following years of losses caused by price wars, high fuel taxes and a weaker rupee. Prime Minister Manmohan Singh’s government announced the end of the ban along with a similar easing for retailers as its moves to open up Asia’s thirdbiggest economy.
Kingfisher debts Kingfisher has said it is in talks on investment that depend up regulatory changes as it struggles under an 86 billion rupee (US$1.5 billion) debt pile. The carrier has also cut twothird of services, grounded planes and halted international flights in a bid to end losses. “I am sceptical whether Kingfisher is able to attract” foreign investment, said Nikhil Vora, Mumbai-based managing director at IDFC Securities Ltd. “Kingfisher’s significant leverage on its balance sheet makes it a challenging proposition for any buyer.” The airline, named for liquor tycoon Mallya’s flagship beer, needs an immediate capital infusion of US$600 million for a turnaround, according to CAPA – Centre for Aviation. The
company’s founders will need to provide at least half of this before talks with a foreign airline could begin, the research company said. Kingfisher has only an “outside chance” of selling a stake compared with SpiceJet and Go Airlines (India) Ltd, CAPA said in an e-mailed statement. The carrier has a longterm debt to total capital ratio of 162 percent, according to data compiled by Bloomberg. That compares with 76 percent for SpiceJet and 58 percent for Mumbai-based Jet Air. Kingfisher has plunged 58 percent in the past year in Mumbai trading. SpiceJet has jumped 44 percent and Jet Air has climbed 35 percent. India’s three other main carriers, state-owned Air India, IndiGo and Go Airlines are all closely held. SpiceJet Airlines could open the first direct flight between Macau and India as soon as November, Macau International Airport Co Ltd said last month. Macau officials met SpiceJet chief executive Neil Mills in India in August and confirmed the airline had applied to commence direct flights from New Delhi. The easing of the investment rules will help Kingfisher re-engage with prospective airline investors “in a more meaningful manner,” Prakash Mirpuri, a spokesman, said in a September 14 text message. The carrier will also move toward re-capitalisation and ramp up its operations, he said. Kingfisher posted a 6.5 billion
rupee (US$120 million) loss in the quarter ended June, compared with 2.6 billion rupees a year earlier. SpiceJet and Jet Air both posted profits in the period. Non-airline investors from overseas were allowed to hold as much as 49 percent in local carriers before the rule change.
Gulf airlines Middle East airlines may be the most likely to buy into Indian carriers because of their geographical
Think tank cuts S.Korea growth forecast Calls for rate cut and increase in government spending
S
outh Korea’s influential government think tank slashed yesterday its 2012 and 2013 economic growth forecasts, calling for more expansionary policy to counter the impact from the protracted eurozone crisis. Asia’s fourth-largest economy is now seen growing just 2.5 percent this year after a 3.6 percent rise last year, the Korea Development Institute (KDI) said in a report, a sharp cut from 3.6 percent growth forecast in May. It is lower than the central bank’s projection for 3.0 percent growth or the finance ministry’s 3.3 percent target. South Korea’s economy had expanded by an average of 4.3
percent for the five years before the 2008 global financial crisis. The KDI said growth for the July-September period would likely edge up to 0.5 percent on a quarteron-quarter basis from 0.3 percent recorded in the second quarter, but it would be far below a 1.2 percent gain that the think tank saw in May. The institute also cut its 2013 growth forecast to 3.4 percent from 4.1 percent set in May. It lowered the 2012 inflation forecast to 2.1 percent from 2.6 percent previously, below the Bank of Korea’s 3 percent inflation target. It said the environment was in favour of the Bank of Korea further cutting interest rates after a reduction
in the policy rate in July, as well as a moderate increase in government spending next year. The Bank of Korea unexpectedly held borrowing costs unchanged on September 13 as policymakers paused to consider the impact of government stimulus measures.
Retail sales down Sales at major South Korean department stores declined the most since at least 2005 in August as Europe’s debt crisis weighed on consumer sentiment and a national holiday fell later in the year. Outlays at the three biggest chains run by Hyundai Department
Store, Lotte Shopping and Shinsegae declined 6.9 percent from a year earlier in August after a 1.3 percent drop in July, the Ministry of Knowledge Economy said in a statement yesterday. Discount-store sales slipped 3.3 percent last month, the report showed. The ministry’s comparable sales data begin in January 2005. Retail sales may rebound next month on improved sentiment and a more favourable basis for comparison from a year ago, said Lee Min Koo, an economist at Eugene Investment & Securities Co. “Chuseok holiday falls relatively late this year so retail sales will be better in September when there will
September 18, 2012 business daily | 11
asia Myanmar targets independent monetary policy Myanmar’s central bank plans to implement an independent monetary policy in the first half of next year to keep prices and banks stable as investors prepare to inject money into the former military regime. Parliament will consider a law as early as next month that will expand the Central Bank of Myanmar’s authority and independence, Deputy Governor Maung Maung Win said. “We are late so we have to do hard work,” he said. “When our training programs finish, we can target our inflation, we can target our foreign-exchange market.”
RBI holds repo rate India’s central bank yesterday left interest rates unchanged but cut the cash reserve ratio for banks, saying the primary focus of monetary policy remains fighting inflation, days after the government unveiled a spree of reforms to boost growth and improve its fiscal position. The Reserve Bank of India left the policy repo rate at 8 percent. The RBI cut the cash reserve ratio, the share of deposits banks must keep with the central bank, by 25 basis points to 4.5 percent in a move it said will inject about 170 billion rupees (US$3.12 billion) of liquidity into the banking system. “I suspect the RBI still wants to see inflation pressures move lower before easing policy further. [There] is also the risk that the recent round of government reforms could come unstuck if opposition in India is strong enough,” said Jonathan Cavenagh, currency strategist at Westpac Banking Corp. in Singapore, adding that he thought a rollback of those moves is unlikely.
Blackouts spur US$18b upgrade SpiceJet has applied for the right to start direct flights from New Delhi to Macau
proximity, existing service connections and state backing. Qatar Airways Ltd chief executive Akbar Al Baker said in April that that anyone who didn’t want to invest in China or India “must be crazy”. The country’s annual passenger numbers may surge to 180 million by 2020 from 61 million last year as rising wealth makes travel affordable to more people, according to a government forecast. Qatar Air declined to comment. Abu Dhabi-based Etihad Airways PJSC said yesterday equity investments
are an “important evolution of its successful partnership strategy”. The carrier already has stakes in Virgin Australia Holdings Ltd, Air Seychelles Ltd and Air Berlin Plc. “The Indian aviation industry offers tremendous potential, with significant passenger movement on domestic and international sectors,” it said without commenting on whether it wanted to buy into a local carrier. The airline will add flights to a ninth Indian city, Ahmedabad, in November, it said. Bloomberg
Power Grid Corp. of India Ltd, the nation’s largest electricity transmission company, may exceed a 1 trillion rupee (US$18 billion) spending plan to upgrade its network and avoid a repeat of the world’s biggest blackout. Revenue of the state-owned company, which is doubling expenditure in the five years through March, 2017, may rise fourfold in the period following completion of transmission projects, R.P. Sasmal, director of operations said. The grid aims to boost its market share to 70 percent from 50 percent, he said. The utility is taking steps to prevent another grid failure like those on July 30 and 31 that left a region home to more than half of the country’s 1.2 billion without electricity, halting transport services and forcing businesses to rely on generators. “Making sure a collapse doesn’t happen again is our top priority,” Power Grid Chairman R.N. Nayak said. “We may end up crossing that 1 trillion-rupee spending mark to strengthen and stabilize the gaps exposed by the blackouts.”
Singapore recession risk looms
S be more buying of gifts and food,” Mr Lee said before the data were released. “Consumer sentiment is likely to improve for the next few weeks” because of stock-market gains, he said. Asian stocks posted the biggest weekly advance in 2012 last week after the U.S. Federal Reserve said it would buy mortgage-backed securities to bolster economic growth. South Korea’s Kospi index gained 4 percent. The Finance Ministry and central bank last week announced a combined 7.4 trillion won (US$6.6 billion) in spending, tax relief and special loan programs to boost growth. Reuters/Bloomberg
ingapore’s non-oil domestic exports (NODX) in August fell more than expected, raising the prospect of the city-state entering into a recession as exports to the European Union plunged. The trade-dependent Southeast Asian city-state said yesterday non-oil domestic exports fell 10.6 percent from a year earlier, hurt by a 10.4 percent drop in electronics and a 28.7 percent plummet in shipments to the EU, its largest market. On a seasonally adjusted month-onmonth basis, NODX shrank 9.1 percent after contracting 3.6 percent in July. Electronics exports contracted 14.8 percent in August from July after seasonal adjustments, while nonelectronics NODX shrank 7.1 percent, trade agency International Enterprises Singapore said in a separate email. “Although our baseline case is not for a quarter-on-quarter contraction, the chances are not minute. There is perhaps a 40:60 chance of contraction,” said Oversea-Chinese Banking Corp.
head of treasury research Selena Ling, whose estimate was the closest among the 13 economists polled by Reuters. The median estimate in a Reuters poll had been for non-oil domestic exports to fall 4.0 percent year-on-year and 1.8 percent month-on-month. Singapore’s economy shrank less than anticipated in the second quarter, thanks to a surge in pharmaceutical production in June, GDP data showed last month. But the government warned of continued uncertainties and downside risks and narrowed its 2012 growth forecast to 1.5 to 2.5 percent from an earlier 1-3 percent. Economists expect the Southeast Asian city-state’s gross domestic product to grow 2.4 percent this year, down from a median estimate of 3.0 percent three months earlier, the central bank’s latest quarterly Survey of Professional Forecasters showed. Singapore’s weaker-than-expected trade data follows signs of a slowdown elsewhere in the region, with a survey
yesterday showing New Zealand’s services sector slowed for a third consecutive month in August to a two-year low. South Korea said on Monday retail sales fell for a third straight month in August. Reuters
Although our baseline case is not for a quarter-on-quarter contraction, the chances are not minute. There is perhaps a 40:60 chance of contraction Selena Ling, Oversea-Chinese Banking Corp.
12 |
business daily September 18, 2012
MARKETS Hang SENG INDEX NAME
NAME
PRICE
Day %
VOLUME
13.26
-1.632047
19232613
9.83
0.6141249
6060194
SANDS CHINA LTD
CLP HLDGS LTD
65.25
0.07668712
2307515
SINO LAND CO
CNOOC LTD
16.24
3.703704
128128817
SUN HUNG KAI PRO
COSCO PAC LTD
11.04
-0.3610108
7804027
SWIRE PACIFIC-A
PRICE
Day %
VOLUME
28.85
-0.8591065
20941488
CHINA UNICOM HON
ALUMINUM CORP-H
3.33
-1.186944
18202271
CITIC PACIFIC
BANK OF CHINA-H
2.93
-0.6779661
233954423
BANK OF COMMUN-H
5.21
0
22788164
29
0.3460208
1639055
AIA GROUP LTD
BANK EAST ASIA
NAME
PRICE
Day %
63.25
0.7968127
3651908
29.2
2.45614
14797201
14.04
-2.09205
10276874
112.8
0.8944544
8013322
93.75
0.4284949
1509648 2546690
POWER ASSETS HOL
VOLUME
BELLE INTERNATIO
14.44
-0.4137931
19230786
ESPRIT HLDGS
12.98
-2.406015
7486761
TENCENT HOLDINGS
255.2
-0.1564945
BOC HONG KONG HO
24.15
0.625
14761592
HANG LUNG PROPER
27.85
-0.7130125
3550039
TINGYI HLDG CO
23.5
0.6423983
5781600
CATHAY PAC AIR
12.88
1.098901
6396225
HANG SENG BK
114.9
0.6129597
1623043
WANT WANT CHINA
9.42
0.4264392
18977936
CHEUNG KONG
HENDERSON LAND D
53.4
-1.385042
3846143
HENGAN INTL
75.6
-1.434159
3783069
HONG KG CHINA GS
18.98
0.2111932
6732512
HONG KONG EXCHNG
120.9
2.457627
14741021
HSBC HLDGS PLC
73.45
1.031637
21434099
74.65
0.3360215
8556541
4.42
-0.2257336
271037153
114.1
0.0877193
4393744
CHINA COAL ENE-H
7.3
-0.6802721
38138964
CHINA CONST BA-H
5.17
0
252308172
CHINA LIFE INS-H
22.85
-0.4357298
29826117
CHINA MERCHANT
24.4
0.4115226
2584674
CHINA MOBILE
82.45
-0.9014423
25206053
HUTCHISON WHAMPO
CHINA OVERSEAS
19.34
-1.827411
31571288
IND & COMM BK-H
CHINA PETROLEU-H
7.19
-1.641587
92769450
LI & FUNG LTD
12.76
-0.931677
26479084
CHINA RES ENTERP
26.2
0.1912046
2837215
MTR CORP
29.05
-0.3430532
2792815
CHINA RES LAND
17
-3.409091
14305368
NEW WORLD DEV
10.8
-0.7352941
20791842
CHINA RES POWER
16.86
-0.2366864
3340965
PETROCHINA CO-H
9.99
0.8072654
58704467
CHINA SHENHUA-H
31.25
-0.477707
18072802
PING AN INSURA-H
59
-1.420217
10533084
MOVERS
22
25
2 20760
INDEX 20658.11 HIGH
20758.49
LOW
20039.84
52W (H) 21760.33984 (L) 16170.35
20040
13-Sep
17-Sep
Hang SENG CHINA ENTErPRISE INDEX NAME
PRICE
DAY %
VOLUME
CHINA PACIFIC-H
23.4
-1.473684
9818432
21210608
CHINA PETROLEU-H
7.19
-1.641587
92769450
-1.186944
18202271
CHINA RAIL CN-H
6.98
0.7215007
23.65
-0.2109705
26744133
CHINA RAIL GR-H
3.42
2.93
-0.6779661
233954423
CHINA SHENHUA-H
PRICE
DAY %
VOLUME
AGRICULTURAL-H
2.96
1.023891
339208554
AIR CHINA LTD-H
4.57
0.2192982
ALUMINUM CORP-H
3.33
ANHUI CONCH-H BANK OF CHINA-H
NAME
PRICE
DAY %
VOLUME
12.26
1.658375
38588558
ZIJIN MINING-H
3.05
0.3289474
90571286
12247308
ZOOMLION HEAVY-H
8.95
0.3363229
17639256
0
18765639
ZTE CORP-H
10.96
-3.521127
5874542
31.25
-0.477707
18072802
5.21
0
22788164
CHINA TELECOM-H
4.81
-2.03666
131616612
16.32
-1.330109
3685594
DONGFENG MOTOR-H
9.62
-6.96325
65008932
3.68
-0.5405405
29821584
GUANGZHOU AUTO-H
5.46
-4.545455
17056781
7.3
-0.6802721
38138964
HUANENG POWER-H
5.36
-2.010969
33486884
CHINA COM CONS-H
6.6
0.456621
23172096
IND & COMM BK-H
4.42
-0.2257336
271037153
CHINA CONST BA-H
5.17
0
252308172
JIANGXI COPPER-H
19.66
-0.3042596
23075683
BANK OF COMMUN-H BYD CO LTD-H CHINA CITIC BK-H CHINA COAL ENE-H
3.11
-0.955414
26658150
PETROCHINA CO-H
9.99
0.8072654
58704467
22.85
-0.4357298
29826117
PICC PROPERTY &
9.53
0.105042
24952042
CHINA LONGYUAN-H
5.18
-0.5758157
4893650
PING AN INSURA-H
59
-1.420217
10533084
CHINA MERCH BK-H
12.98
-1.217656
20243552
SHANDONG WEIG-H
9.04
4.147465
8667844
CHINA COSCO HO-H CHINA LIFE INS-H
NAME YANZHOU COAL-H
MOVERS
13
24
3 9890
INDEX 9780.92 HIGH
9884.02
LOW
9473.77
CHINA MINSHENG-H
6.31
-1.866252
44182448
SINOPHARM-H
24.25
-0.4106776
2535812
52W (H) 11916.1
CHINA NATL BDG-H
8.46
1.560624
105324713
TSINGTAO BREW-H
43.45
0.3464203
1245015
(L) 8058.58
CHINA OILFIELD-H
13.5
1.809955
6310932
WEICHAI POWER-H
24.6
2.118696
2820468
9470
13-Sep
17-Sep
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.46
-0.8064516
52193167
DAQIN RAILWAY -A
6
-0.1663894
33228830
SANY HEAVY INDUS
9.19
-6.03272
62718633
AIR CHINA LTD-A
4.83
-3.206413
9124071
DATANG INTL PO-A
4.48
-0.4444444
6144828
SHANDONG GOLD-MI
40.14
1.159274
33049119
ALUMINUM CORP-A
5.22
-2.06379
12238474
DONGFANG ELECT-A
14.19
-4.315577
10355315
SHANG PHARM -A
11.8
-1.748543
11358209
ANHUI CONCH-A
15.01
-1.831262
27555475
EVERBRIG SEC -A
11.34
-5.263158
11317062
SHANG PUDONG-A
7.41
-1.462766
39495794
BANK OF BEIJIN-A
7.15
-1.106501
12236146
GD MIDEA HOLDING
9.18
0
9139999
SHANGHAI ELECT-A
4.13
-2.823529
3817063
BANK OF CHINA-A
2.67
-1.111111
22387130
GD POWER DEVEL-A
2.46
-1.204819
19854942
SHANXI LU'AN -A
17.47
-3.958219
17165306
SHANXI XINGHUA-A
37.31
-2.686489
1021011
SHANXI XISHAN-A
12.95
-3.141361
10077778
NAME
NAME
NAME
BANK OF COMMUN-A
4.21
-0.4728132
36309517
GF SECURITIES-A
12
-4.988124
54287351
BANK OF NINGBO-A
9.31
-3.020833
12056895
GREE ELECTRIC
20.62
-1.528176
7476903
BAOSHAN IRON & S
4.63
0
47071013
GUANGHUI ENERG-A
14.18
-3.009576
25437864
SHENZEN OVERSE-A
5.51
-4.340278
28071610
8.81
-3.925845
44221362
SUNING APPLIAN-A
6.53
-3.829161
70673277
27.26
-0.4746258
1473549
TONGLING NONFE-A
19.14
-2.743902
23177617
59
0.08481764
2234420
TSINGTAO BREW-A
32.59
-1.689291
1526024
16.45
-1.319736
8844893
HAITONG SECURI-A
CHINA CITIC BK-A
3.74
-1.319261
13452098
HANGZHOU HIKVI-A
CHINA CNR CORP-A
3.58
-4.021448
29840928
HENAN SHUAN-A
CHINA COAL ENE-A
6.95
-2.250352
9584695
HONG YUAN SEC-A
17.52
-4.157549
17235615
WEICHAI POWER-A
19.12
-3.140831
7861113
CHINA CONST BA-A
3.94
-1.253133
12883422
HUATAI SECURIT-A
8.91
-3.675676
14514485
WULIANGYE YIBIN
33.7
-2.657423
15776586
CHINA COSCO HO-A
3.99
-3.389831
11118761
HUAXIA BANK CO
8.29
-2.009456
19714047
XIAMEN TUNGSTEN
41.22
-0.9372747
9579308
CHINA CSSC HOL-A
20.83
-4.493352
12344673
IND & COMM BK-A
3.75
-0.7936508
18643366
YANGQUAN COAL -A
14.49
-3.012048
11021266
CHINA EAST AIR-A
3.25
-3.27381
22498890
INDUSTRIAL BAN-A
12.03
-1.715686
32524777
YANTAI CHANGYU-A
49.96
-2.801556
1362807
CHINA EVERBRIG-A
2.71
-0.7326007
24658692
INNER MONG BAO-A
34.5
-2.789518
34756068
YANTAI WANHUA-A
12.86
-2.870091
4784315
CHINA LIFE INS-A
18.04
-3.270777
9018083
INNER MONG YIL-A
20.53
-1.298077
6825170
YANZHOU COAL-A
18.19
-3.552492
4049597
CHINA MERCH BK-A
10.13
-1.170732
47185018
INNER MONGOLIA-A
5.12
-4.299065
49371610
YUNNAN BAIYAO-A
61.63
1.032787
1664422
CHINA MERCHANT-A
10.04
-3.182257
11097996
JIANGSU HENGRU-A
30.64
-2.046036
2206617
ZHONGJIN GOLD
16.84
2.745577
80728769
CHINA MERCHANT-A
19.15
-7.844081
19889620
JIANGSU YANGHE-A
124.71
-1.02381
1040360
ZIJIN MINING-A
3.98
-1.240695
122004464
44751814
JIANGXI COPPER-A
22.45
-2.939905
17797744
ZOOMLION HEAVY-A
8.21
-6.492027
73262457
JINDUICHENG -A
11.95
-2.209493
8098796
10.31
-4.359926
14238051
JIZHONG ENERGY-A
12.53
-5.147615
19167639 12813680
BYD CO LTD -A
CHINA MINSHENG-A CHINA NATIONAL-A
5.65
-1.567944
6.45
-4.867257
36457657
CHINA OILFIELD-A
16.64
-1.480166
3163966
CHINA PACIFIC-A
19.47
-3.37469
12716609
KANGMEI PHARMA-A
16.03
-1.596071
5.99
-0.8278146
17239356
KWEICHOW MOUTA-A
241.3
-1.41363
2001452
37.3
-1.971091
5407238
-2.857143
25222891
CHINA PETROLEU-A CHINA RAILWAY-A
4.56
-2.35546
13744608
LUZHOU LAOJIAO-A
CHINA RAILWAY-A
2.52
-1.945525
19941092
METALLURGICAL-A
2.04
CHINA SHENHUA-A
22.39
-2.525033
9724452
NINGBO PORT CO-A
2.48
-0.8
13070875
PANGANG GROUP -A
3.81
-5.459057
70773886
CHINA SHIPBUIL-A
5.13
-0.3883495
95753069
CHINA SOUTHERN-A
3.34
-4.022989
30625043
PETROCHINA CO-A
8.89
-0.6703911
10719294
13.71
-2.419929
ZTE CORP-A
MOVERS
11
285
4 2330
INDEX 2258.705
CHINA STATE -A
3.03
-1.623377
54629464
PING AN BANK-A
11471438
HIGH
2328.44
CHINA UNITED-A
3.71
-2.110818
55180054
PING AN INSURA-A
40.03
-2.437241
15817025
LOW
2258.71
CHINA VANKE CO-A
8.06
-3.357314
89886702
POLY REAL ESTA-A
9.71
-6.724304
78509496
CHINA YANGTZE-A
6.37
-0.1567398
15872493
QINGDAO HAIER-A
10.7
-1.291513
7119406
CITIC SECURITI-A
10.9
-4.049296
65539524
QINGHAI SALT-A
30.97
-2.610063
3011749
CSR CORP LTD -A
4.1
-3.301887
24811864
SAIC MOTOR-A
12.4
-3.200625
18867298
PRICE DAY %
Volume
52W (H) 2781.99 (L) 2186.962
2250
13-Sep
17-Sep
FTSE TAIWAN 50 INDEX NAME
NAME
ACER INC
30.1
4.513889
61847437
FORMOSA PLASTIC
ADVANCED SEMICON
23.2
0.4329004
28766161
FOXCONN TECHNOLO
ASIA CEMENT CORP
PRICE DAY %
Volume
85.1
0.1176471
7305082
120.5
0.4166667
13452823
NAME
PRICE DAY %
TAIWAN MOBILE CO
Volume
105.5
-1.860465
4371675
TPK HOLDING CO L
409
-5.104408
11131343
86.5
0
24899240
50
-0.990099
7646812
12.3
0.4081633
41974118
37.15
0.2699055
7837193
FUBON FINANCIAL
31.9
1.269841
35512937
TSMC
ASUSTEK COMPUTER
318
0.952381
3646479
HON HAI PRECISIO
97.5
0.5154639
41868215
UNI-PRESIDENT
AU OPTRONICS COR
11.3
-2.164502
144910366
HOTAI MOTOR CO
206
-3.512881
475834
CATCHER TECH
UNITED MICROELEC
151
4.137931
24649482
HTC CORP
314
5.902192
34809714
WISTRON CORP
35.15
-1.264045
12365499
CATHAY FINANCIAL
32
3.727715
77094750
HUA NAN FINANCIA
16.45
0
9607022
YUANTA FINANCIAL
15.65
3.642384
82585027
CHANG HWA BANK
15.95
-0.3125
16893036
LARGAN PRECISION
660
1.226994
2214480
YULON MOTOR CO
58.3
1.039861
16688450
75 -0.2659574
7639902
LITE-ON TECHNOLO
36.7
0.273224
3656338
CHENG SHIN RUBBE CHIMEI INNOLUX C
11.35
1.793722
167742679
MEDIATEK INC
331.5
-2.212389
11707722
CHINA DEVELOPMEN
7.45
2.194787
113789279
MEGA FINANCIAL H
23.45
0.4282655
50957772
CHINA STEEL CORP
26.4 -0.1890359
25546120
NAN YA PLASTICS
58
0.8695652
5229353
160.5
-0.310559
1365844
79
-1.25
3440878
33.45 -0.7418398
11192117
CHINATRUST FINAN CHUNGHWA TELECOM COMPAL ELECTRON DELTA ELECT INC
19
2.150538
73068130
PRESIDENT CHAIN
92.5
0.5434783
10836135
QUANTA COMPUTER
26.3
-1.498127
9118182
SILICONWARE PREC
113.5 -0.4385965
4514258
SINOPAC FINANCIA
12.3
0.4081633
33569973
FAR EASTERN NEW
34.4
2.228826
30462442
SYNNEX TECH INTL
67.6
0.1481481
4820764
FAR EASTONE TELE
71.3
-2.993197
12298743
TAIWAN CEMENT
36.7
0
9908834
FIRST FINANCIAL
18.2 -0.8174387
29883650
16.75
-0.297619
12278073
81.6
4.214559
17946771
29.35
1.206897
1240670
FORMOSA CHEM & F FORMOSA PETROCHE
79
TAIWAN COOPERATI
0.1267427
4428229
TAIWAN FERTILIZE
89.7 -0.5543237
2165547
TAIWAN GLASS IND
MOVERS
27
20
3 5390
INDEX 5378.33 HIGH
5384.75
LOW
5218.08
52W (H) 5621.53 (L) 4643.05
5210
13-Sep
17-Sep
September 18, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GaLaXy eNTerTaINMeNT
MeLCo CroWN eNTerTaINMeNT
MGM CHINa HoLDINGS 35.0
24.9
34.8
24.8
34.4
24.6
average 24.725
Min 24.5
Last 24.75
average 29.047
24.5
Max 34.9
average 34.604
Last 29.2
PRICE
average 13.197
Min 13.14
WyNN MaCaU LTD 20.4
29.1
16.85
20.3
28.9
16.8
28.7
16.75
28.5
20.2 20.1 20.0
16.7 Max 16.9
average 16.816
DAY %
YTD %
(H) 52W
Min 16.72
Last 16.74
19.9 Max 20.35
average 20.203
-0.181818182
0.243457091
110.6499939
78.15999603
BRENT CRUDE FUTR Nov12
116.55
-0.094291102
11.79856115
122.6499939
89.5
GASOLINE RBOB FUT Oct12 GAS OIL FUT (ICE) Nov12 NATURAL GAS FUTR Oct12 HEATING OIL FUTR Oct12
300.6
-0.318344608
18.93645644
307.9600096
220.5600023
1009.25
-0.197775031
12.51393534
1038.75
799.25
2.959
0.543662929
-10.92715232
4.455000401
2.299999952
324.07
0.037042754
13.41032371
333.8899851
252.5300026
Gold Spot $/Oz
1769.04
-0.0825
13.0442
1827.88
1522.75
Silver Spot $/Oz
34.5038
-0.4578
23.9583
40.825
26.085
1695.1
-0.8133
21.5561
1824
1339.25
688
-1.0997
5.2793
733
537.54 1827.25
Platinum Spot $/Oz Palladium Spot $/Oz LME ALUMINUM 3MO ($)
2200
4.662226451
8.910891089
2379.75
LME COPPER 3MO ($)
8380
3.777089783
10.26315789
8765
6635
LME ZINC
2116
3.929273084
14.68834688
2220
1718.5
17775
6.119402985
-4.997327632
22150
15236
15.32
0.294599018
0.756330155
17.5
14.15499973
775
-0.895140665
32.19616205
849
499
WHEAT FUTURE(CBT) Dec12
916.75
-0.811468758
27.32638889
953.25
629.5
SOYBEAN FUTURE Nov12
1711.5
-1.581368603
42.12165248
1789
1115.75
183
1.049144119
-22.45762712
262.8500061
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Nov12 Dec12
COFFEE 'C' FUTURE Dec12
PRICE
(L) 52W
98.82
Last 20.25
Min 19.92
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 %
1.0524 1.6225 0.9282 1.3101 78.39 7.9847 7.7519 6.3172 53.95 30.81 1.2232 29.307 41.58 9464 82.497 1.21606 0.80745 8.2744 10.4608 102.69 1.03
-0.2559 0.0493 -0.1616 -0.2209 0 -0.0075 -0.0039 -0.0332 0.6604 -0.0974 -0.2453 0.3787 -0.469 0.5917 0.2461 0.0666 0.2452 -0.5716 -0.0296 0.2337 0
YTD %
(H) 52W
3.0855 4.3878 1.0666 1.0802 -1.888 0.1866 0.2 -0.3514 -1.6404 2.4018 6.0007 3.3166 5.4353 -4.1737 -4.9275 0.06 3.2126 -1.6944 -1.0401 -2.9506 0.0097
(L) 52W
1.0857 1.6302 0.9972 1.4247 84.18 8.0382 7.8048 6.4029 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 7.751 6.2769 47.43 30.2 1.2176 29.084 41.34 8795 72.057 1.19995 0.77553 7.7018 9.6245 94.12 1.0288
MACAU RELATED STOCKS (H) 52W
(L) 52W
ARISTOCRAT LEISU
NAME
PRICE 2.65
DAY % YTD % 0.7604563
20.45454
3.25
1.88
VOLUME CRNCY 1821225
153.6999969
CROWN LTD
9.21
0.436205
13.84425
9.4
7.47
989392
SUGAR #11 (WORLD) Mar13
20.71
-0.28887819
-11.34417808
25.29999924
19.47999954
AMAX HOLDINGS LT
0.061
0
-29.88506
0.119
0.055
0
COTTON NO.2 FUTR Dec12
75.38
-0.685111989
-14.1848816
101
64.61000061
BOC HONG KONG HO
24.15
0.625
31.25
24.95
14.24
14761592
CENTURY LEGEND
0.245
0
6.521737
0.335
0.204
13000
3.52
5.389222
25.71429
3.52
2.3
576584
CHINA OVERSEAS
19.34
-1.827411
49.16627
20.4
9.979
31571288
CHINESE ESTATES
10
4.384134
-20
13.32
8.3
62000
11.02
5.961538
-20.83333
15.16
8.4
25974000 1666200
CHEUK NANG HLDGS
World Stock MarketS - Indices
CHOW TAI FOOK JE
NAME
EMPEROR ENTERTAI
1.5
-3.225806
35.13513
1.57
0.97
1.12
-1.754386
166.6667
1.24
0.3
1566000
GALAXY ENTERTAIN
24.75
-0.8016032
73.80618
25.2
8.69
17295249
HANG SENG BK
114.9
0.6129597
24.68801
115
84.4
1623043
26
-2.255639
30.91641
26.9
18.56
1755200
73.45
1.031637
24.49153
73.5
56
21434099
HUTCHISON TELE H
3.39
-1.453488
13.37793
3.88
2.53
7797904
LUK FOOK HLDGS I
26.1
3.366337
-3.690038
37.1
14.7
7939000
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
13593.37
0.3952035
11.26093
13653.24
10404.49
NASDAQ COMPOSITE INDEX
US
3183.952
0.8911766
22.21761
3195.672
2298.89
FTSE 100 INDEX
GB
5908.69
-0.1159655
6.037209
5989.07
4868.6
HOPEWELL HLDGS
DAX INDEX
GE
7403.47
-0.1168355
25.51764
7446.47
4973.92
HSBC HLDGS PLC
NIKKEI 225
JN
9159.39
1.825873
8.326563
10255.15
8135.79
HANG SENG INDEX
HK
20658.11
0.1373257
12.06288
21760.33984
16170.35
CSI 300 INDEX
CH
2258.705
-2.454587
-3.710419
2781.99
2186.962
MGM CHINA HOLDIN
TAIWAN TAIEX INDEX
TA
7762.22
0.3123526
9.758658
8170.72
6609.11
MIDLAND HOLDINGS NEPTUNE GROUP NEW WORLD DEV SANDS CHINA LTD
FUTURE BRIGHT
MELCO INTL DEVEL
7.13
4.545455
23.57019
8.28
4.3
6987118
13.26
0.6069803
38.23799
14.76
7.6
1811428
4.63
-2.320675
17.09522
5.217
2.887
2758000
0.198
3.125
78.37838
0.222
0.08
28392714
10.8
-0.7352941
72.52396
10.98
6.13
20791842
29.2
2.45614
33.02961
33.05
14.9
14797201
KOSPI INDEX
SK
2002.35
-0.2605127
9.673337
2057.28
1644.11
S&P/ASX 200 INDEX
AU
4402.529
0.2864038
8.528611
4448.5
3840.2
ID
4255.283
-0.04028661
11.33679
4272.829
3217.951
SHUN HO RESOURCE
1.18
0
18
1.2
0.82
4000
FTSE Bursa Malaysia KLCI
MA
1642.95
0.8935151
7.331141
1655.49
1310.53
SHUN TAK HOLDING
3.04
-0.3278689
18.79045
3.51
2.241
6041251
NZX ALL INDEX
NZ
845.405
0.5983029
15.8406
847.344
712.548
SJM HOLDINGS LTD
16.74
-0.8293839
33.86071
17.614
10.079
3005113
SMARTONE TELECOM
15.52
0
15.47619
18.5
9.8
5402000
WYNN MACAU LTD
20.25
2.272727
3.846154
25.5
14.62
7626117
ASIA ENTERTAINME
3.58
-0.5555556
-39.11565
7.49
2.4
218916
JAKARTA COMPOSITE INDEX
13.0
Last 0
16.9
WTI CRUDE FUTURE Oct12
CORN FUTURE
Max 13.3
CURRENCY EXCHANGE RATES
NAME
METALS
34.0
Last 34.5
29.3
Commodities ENERGY
Min 34
SJM HoLDINGS LTD
Min 28.5
13.1
34.2
SaNDS CHINa LTD
Max 29.3
13.2
34.6
24.7
Max 24.9
13.3
PHILIPPINES ALL SHARE IX
PH
3552.75
0.6256621
16.67334
3558.72
2695.06
HSBC Dragon 300 Index Singapor
SI
603.33
2.18
21.56
NA
NA
STOCK EXCH OF THAI INDEX
TH
1278.79
0.209228
24.72107
1282.22
843.69
BALLY TECHNOLOGI
47.32
0.6808511
19.61577
49.32
24.74
572294
HO CHI MINH STOCK INDEX
VN
401.75
0.7220398
14.27962
492.44
332.28
BOC HONG KONG HO
3.06
0.3278689
27.64959
3.25
1.81
2060
Laos Composite Index
LO
1048.96
0.8799685
16.62108
1064.23
876.33
GALAXY ENTERTAIN
3.22
2.547771
72.19251
3.24
1.08
2000
INTL GAME TECH
13.22
2.401239
-23.13954
18.1701
10.92
5982715
JONES LANG LASAL
83.81
5.077733
36.81032
87.52
46.01
820836
LAS VEGAS SANDS
46.75
3.018951
9.407911
62.09
34.72
11365799
MELCO CROWN-ADR
13.15
1.309707
36.69439
16.02
7.05
7980300
MGM CHINA HOLDIN
1.66
0
39.2976
1.96
1.0025
5545
MGM RESORTS INTE
11.41
1.152482
9.39597
14.9401
7.4
13935969
SHUFFLE MASTER
14.94
1.356852
27.4744
18.77
7.55
461351
2.18
2.347418
35.60817
2.2782
1.2624
6375
113.02
2.726777
2.289802
154.7051
90.108
3451701
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
SJM HOLDINGS LTD WYNN RESORTS LTD
AUD HKD
USD
14 |
business daily September 18, 2012
Opinion Case against more job security? It’s academic Virginia Postrel
Bloomberg View columnist
I
n the U.S., “middle class” is not just an income category. It’s a cultural norm. That is why people get upset when they read reports that the middle class’s share of total income is shrinking. And it is one reason we get into such vicious debates about what it means not to raise taxes on the middle class. Almost all of us believe we should be among the exempt. A recent Pew Research Center survey asked people to classify themselves as upper class, uppermiddle class, middle class, lowermiddle class or lower class. The results were nothing like the neat income quintiles that economists and Census Bureau reports use. Forty-nine percent called themselves middle class, 15 percent upper-middle class, and 25 percent lower-middle class. With a few gradations, in other words, 89 percent of Americans identify with the middle class. Politicians want to make sure everybody has a chance to be middle class – and, equally important, that all people who think of themselves that way feel appreciated and protected. So if a middle-class lifestyle includes owning a home or going to college, policy entrepreneurs find a ready audience for ideas designed to make those goals easier to obtain – with results that are, at best, mixed.
Secure jobs Here, another result from the Pew survey suggests potential dangers ahead. The poll asked whether Americans need certain things to be considered middle class. Forty-five percent of respondents said it is necessary to own a home, 37 percent said you must have a college education, 66 percent said you need health insurance – the most recent focus of expansive public policy. A whopping 86 percent said you have to have “a secure job.” Not “steady work” or “a reliable income” but “a secure job.” Working for a living has long defined the middle class, as opposed to rentier aristocrats or the dole-dependent or profoundly insecure poor. But a lot of other assumptions are baked into the term “secure job.” It seems to exclude from the middle class everyone who doesn’t draw a regular paycheck from a single organisation – the selfemployed (about 11 percent of the workforce), the retired, housewives, students – as well as employees on limited-term contracts. As a selfemployed writer who doesn’t have “a job,” let alone a secure one, I found the word choice striking. “The wording ‘secure job’ means a steady or stable job,” says Wendy Wang, a research associate on Pew’s
Social & Demographic Trends project. A comparable survey in 1991 used the phrase “white collar job” and not surprisingly drew a much lower positive response: about 30 percent. Pew researchers decided to change the wording and, in doing so, picked a term that reflects the times. “Job security is something that the middle class may be concerned about these days.”
If the economy remains sluggish and the public anxious, it is easy to imagine a turn away from the current focus on job creation toward a new emphasis on job security
That concern represents a significant change since the onset of the recession. Contrary to many news-media claims, U.S. employees had enjoyed several decades of rising job security before the 2008 crisis. In a 2008 American Economic Review article, economist Steven J. Davis of the University of Chicago’s Booth School of Business examined many different data
sources and found the same pattern in all of them: “American workers face lower risks of job loss in recent years than 10, 20, or 30 years earlier.” That security has now disappeared, and people are anxious. In polls since the 2008 financial crisis, Gallup Inc. has found that about 30 percent of workers were worried about being fired or having their wages or hours reduced. Over the previous decade, the numbers never topped 20 percent and were usually lower.
Employee protection Suppose policy makers decide to follow the polls and try to guarantee everyone “a secure job” in order to promote the middle class. If the economy remains sluggish and the public anxious, it is easy to imagine a turn away from the current focus on job creation toward a new emphasis on job security. This seems particularly likely in a second Barack Obama administration that would be looking for initiatives that don’t add to federal spending. We might see regulations, for example, to make it harder to fire long-term employees. The Obama campaign has already excoriated Republican nominee Mitt Romney for job cuts when he was at Bain Capital Partners LLC. To see the potential results of such policies, you don’t have to look to Europe’s persistent unemployment. You just have to dream a little. Imagine a career in which once you had worked somewhere for a long time – say, seven years – and you couldn’t be fired unless you did
something really horrible. To make the picture even more appealing, imagine further that your industry was largely immune from foreign competition, had been enjoying increasing consumer demand, was subsidised by the state and federal governments, and rarely experienced any bankruptcies. As you have probably realised, this career exists. It’s the professoriate. But while outsiders imagine higher education as a sheltered enclave of secure jobs, the actual state of American faculty members is much more uncertain. Tenure-track employment is no longer the norm. Part-time work is. About 30 percent of faculty members are either tenured or on the tenure track, compared with about 57 percent in 1975. The rest are “contingent faculty”: About 19 percent work full time, usually on contracts lasting one to three years, and more than half work part time. (These figures omit graduate students who also teach classes.) Along with a lack of job security, contingent faculty members receive lower pay and fewer, or no, benefits. They frequently don’t have offices and may not even get library cards. It’s a two-tiered system that depends heavily on people whose main jobs are doing something else. And it is what you get when you guarantee permanent employment but need flexibility as conditions change. How well it works for academia depends on whom you ask. But it certainly doesn’t deliver secure jobs. Bloomberg View
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September 18, 2012 business daily | 15
OPINION Business
wires Leading reports from Asia’s best business newspapers
Business Line The Indian wind power industry, which has been subdued in terms of capacity addition since the beginning of the year, is now charged up with the prospect of revival of a generation-based incentive scheme. The Ministry for New and Renewable Energy has recommended that the government should give wind power producers 80 paise (1.5 US cents) per unit of electricity generated, without any ceiling. This scheme is better than the one that prevailed until March, where the government subsidy was capped.
Jakarta Post Bank Indonesia is unlikely to follow the steps of several central banks in other countries that have been shifting their priority from pushing down inflation to spurring economic growth. BI remains wary over inflationary pressures, as high consumer confidence is driving up consumption. The bank decided to maintain its benchmark rate at 5.75 percent at last Thursday’s board of governors meeting. That rate is still in line with BI achieving its annual inflation target of 4.5 percent by the end of this year.
Korea Herald Major shareholders of Korea Aerospace Industries Ltd plan to make a second public notice of bidding this week to sell a 41.75 percent stake in the aircraft manufacturer. The deadline to submit preliminary bids is September 27. The stake to be put up for sale is worth around 1.4 trillion won (US$1.3 billion). The announcement on the second bidding comes after a first preliminary bid fell through last month due to a lack of competition, as required by law.
Business World Japanese firms are entering the Philippines in bigger numbers due to the inexpensive labour and high level of joblessness in the country, according to the Japanese Chamber of Commerce and Industry. Many of these firms are setting up manufacturing facilities in the country as China is getting more expensive and Thailand has a low jobless rate. The Philippines is seen as still relatively cheaper and there are many people that can be trained. Several firms have plans to locate in the Batangas province.
Fiddling at the fire Nouriel Roubini
Chairman of Roubini Global Economics and Professor at the Stern School of Business, NYU
F
inancial markets have rallied since July on the hope that the global economic and geopolitical outlook will not worsen, or, if it does, that central banks stand ready to backstop economies and markets with additional rounds of liquidity provision and quantitative easing. So, not only has good – or betterthan-expected – economic news boosted the markets, but even bad news has been good news, because it increases the probability that centralbanking firefighters like U.S. Federal Reserve Chairman Ben Bernanke and European Central Bank President Mario Draghi will douse the markets with buckets of cash. But markets that rise on both good and bad news are not stable markets. “Risk-off” episodes, in which investor sentiment sours, are likely to return if economic news worsens and confidence in policymakers’ effectiveness drops. In the eurozone, euphoria followed the ECB’s decision to provide support with potentially unlimited purchases of distressed countries’ bonds. But the move is not a game changer; it only buys time for policymakers to implement the tough measures needed to resolve the crisis. And the policy challenges are daunting: the eurozone’s recession is deepening as front-loaded fiscal consolidation and severe credit rationing continues. And, as eurozone banks and public-debt markets become increasingly balkanized, establishing a banking union, a fiscal union, and an economic union while pursuing macroeconomic policies that restore growth, external balance, and competitiveness will be extremely difficult. Even the ECB’s support is not obvious. Monetary hawks – the Bundesbank and several other core central banks – who were worried about a new open-ended ECB mandate pushed successfully for strict and effective conditionality for countries benefiting from the bond purchases. As a result, they can pull the plug on the programme if its stringent criteria are not met. Moreover, Greece could exit the eurozone in 2013, before Spain and Italy are successfully ring-fenced; Spain – like Greece – is spiralling into depression, and may need a full-scale bailout by the “troika” (the ECB, the European Commission, and the International Monetary Fund). Meanwhile, austerity fatigue in the eurozone periphery is increasingly clashing with bailout fatigue in the core.
Political gridlocks Small wonder, then, that Germany, politically unable to vote on more bailout resources,
is getting heavier
landing looks increasingly likely as the investment bubble deflates and net exports shrink. Meanwhile, the reforms necessary to reduce savings and increase private consumption are being delayed. As in Europe and the US, the worst will be avoided in 2012 only by kicking the can down the road with more monetary, fiscal, and credit stimulus. But a hard landing becomes more likely in 2013, as the stimulus fades, nonperforming loans rise, the investment bust accelerates, and the problem of rolling over the debts of provincial governments and their special investment vehicles can no longer be papered over. And, given a new leadership’s caution as it establishes its power, reforms will occur at a snail’s pace, making social and political unrest more likely.
and, in the major
Weak leadership
has outsourced that job to the ECB, the only institution that can bypass democratically elected parliaments. But, again, liquidity provision alone – without policies to restore growth soon – would merely delay, not prevent, the breakup of the monetary union, ultimately taking down the economic/trade union and leading to the destruction of the single market. In the United States, the latest economic data – including a weak labour market – confirm that growth
As everyone kicks the can down the road, the can
emerging markets and advanced economies alike, is approaching a brick wall
is anaemic, with output in the second half of 2012 unlikely to be significantly stronger than the 1.6 percent annual gain recorded in JanuaryJune. And, given America’s political polarisation and policy gridlock, we can expect more fights on the budget and the debt ceiling, another rating downgrade, and no agreement on a path toward mediumterm fiscal consolidation and sustainability – regardless of whether President Barack Obama is re-elected in November. On the contrary, we should expect agreement only on the path of least political resistance: avoidance of tough fiscal choices until the bond vigilantes eventually wake up, spike long rates, and force fiscal adjustment on the political system. In China, a hard economic
Meanwhile, Brazil, India, Russia, and other emerging economies are playing the same game. Many have not adjusted as advanced economies’ weakness reduces the room for exportled growth; and many delayed structural reforms needed to boost private-sector development and productivity growth, while embracing a model of state capitalism that will soon reveal its limits. So the recent slowdown of growth in emerging markets is
not just cyclical, owing to weak growth or outright recession in advanced economies; it is also structural. Similar dithering is apparent at the geopolitical level as well. The major global powers are still trying negotiations and sanctions to induce Iran to abandon its efforts to develop nuclear weapons. But Iran is playing for time and hoping to reach a zone of immunity. By 2013, an Israel that – rightly or wrongly – perceives Iran’s nuclear programme to be an existential threat, and/or the US, which has rejected containment of a nuclear Iran, may decide to strike, leading to a war and a massive spike in oil prices. Ineffective governments with weak leadership are at the root of the problem. In democracies, repeated elections lead to short-term policy choices. In autocracies like China and Russia, leaders resist the radical reforms that would reduce the power of entrenched lobbies and interests, thereby fuelling social unrest as resentment against corruption and rentseeking boils over into protest. But, as everyone kicks the can down the road, the can is getting heavier and, in the major emerging markets and advanced economies alike, is approaching a brick wall. Policymakers can either crash into that wall, or they can show the leadership and vision needed to dismantle it safely. © Project Syndicate
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business daily September 18, 2012
CLOSING Beijing launches new WTO challenge
EU energy chief seeks Gazprom solution
China filed a complaint at the World Trade Organization yesterday to challenge a new U.S. law on “countervailing duties”, or tariffs intended to combat export-promoting subsidies. The complaint, filed hours after the United States said it would launch a wide-ranging trade complaint against China’s support for car exports, potentially affects close to 30 products that have previously been targeted by U.S. duties, a trade official familiar with the case said. In a brief statement, the WTO said the products included steel, tires, magnets, chemicals, kitchen appliances, wood flooring and wind towers.
The European Commission is holding intensive talks with Russia and expects to reach a compromise on a legal dispute between the bloc and its biggest gas provider, while avoiding disruption to energy supplies, the bloc’s energy commissioner said yesterday. The Commission is investigating suspected anti-competitive practices by Russia’s Gazprom, which has said it will fight the case but not cut supplies in retaliation. “We don’t see any direct risk for our security of our supply, either for oil, coal or gas. We assume all sides will respect contractual commitments,” EU Energy Commissioner Guenther Oettinger told reporters.
Russia launches Sberbank stake sale Bank expects buyers from China, Singapore and Hong Kong
R
ussia launched the longawaited sale of a US$5 billion stake in Sberbank yesterday, reducing its controlling interest in Europe’s third-largest bank by equity value and reviving its stalled privatisation programme. The sale of a 7.6 percent stake in Sberbank has been held up for more than a year by weak markets, but last week’s announcement of a new round of credit easing by the U.S. Federal Reserve lifted sentiment and opened the window to a placement. Russian stocks rallied by 8 percent on Friday, propelling Sberbank shares to their highest since April and putting the state in a position to sell into strength. “This was the best imaginable day of the past 15 months to take the decision to go to the market,” chief executive German Gref told Reuters in a telephone interview. Mr Gref said he hoped asset managers in China, Singapore and Hong Kong, among others, would be interested in the three-day offering, which may be closed early if there are enough orders.
The sale of a 7.6 percent stake in Sberbank is priced at US$5 billion
The bank will hold investor presentations today in London and New York. The sale will help clear a stock overhang that has held back the recent share performance of the former Soviet state savings bank, and capped Russian market valuations at a big discount to other
emerging markets. It will boost the liquidity of Russia’s most actively traded stock, widely viewed by investors as a proxy for economic growth running at 4 percent, and by one estimate the world’s bestperforming large company stock over the past decade after U.S.
Apple Inc, maker of the iPhone. While delivering a welcome revenue windfall, the sale also sends a signal to markets that President Vladimir Putin, who returned to the Kremlin in May, is willing to press ahead with privatisations after a lengthy pause. Russia has set out ambitious plans to reduce the 50 percent share of the state in the economy to boost efficiency and growth but, despite running a budget surplus thanks to high oil prices, has proved unwilling to sell state assets on the cheap. “Russia will probably start to perform because Sberbank will perform,” said Bruce Bower, a portfolio manager at Moscow-based fund manager Verno Capital, which owns Sberbank and will seek to add to its position via the secondary offering. “Firstly, if they can find US$5 billion for this they can find money for other privatisations,” added Mr Bower. “Secondly, there was a lot of worry that the government was not committed to reform. I think this forces [critics] to revise their opinions.” Reuters
Taiwan delays second electricity rate hike Prices to be increased only in October 2013
T
aiwan will postpone a planned increase in electricity prices to next year after inflation accelerated and exports fell amid a faltering global recovery. The government will delay the rate increase to October 2013 from December this year, said Hu Yu-wei, a Cabinet spokesman, confirming what Premier Sean Chen told legislators earlier yesterday. Taiwan Power Co., the island’s only electricity retailer, in April announced it will increase prices for the first time in more than three years after posting losses on rising fuel costs. Taipei-based Taiwan Power, known as Taipower, last raised tariffs in October 2008. Taipower plans to raise electricity prices by an average 35 percent for industrial users and an average 17 percent rise for households, following a rise in global crude oil prices. The government in May delayed the increase by a month and said it would be imposed in three stages after the public protested. Electricity prices were increased by as much as 40 percent of the planned increase on June 10, with a second hike in December and
Electricity prices were first increased in June this year
a third increase set for an unspecified date, according to a statement by the island’s presidential office on May 1. The postponement comes as Taiwan’s inflation accelerated to the fastest in four years in August. The government raised its forecast for 2012 inflation last month to 1.93 percent from 1.9 percent. The central bank, which has kept
its benchmark rate at 1.875 percent since June 2011, will meet to review borrowing costs on Thursday. The government is allowing staterun companies to boost energy prices after higher fuel costs eroded profits. CPC Corp., a state-owned oil refiner, on Sunday raised its benchmark gasoline price to a record high. Taiwan Power, which posted
losses for six consecutive years, said its 2012 loss would reach NT$100 billion (US$3.4 billion) without higher electricity tariffs. The utility company last Friday forecasted a loss of NT$76.8 billion for 2012. The government owns 97 percent of Taipower, which generates about 75 percent of the electricity the island uses. Bloomberg