September 20, 2012 business daily
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business daily September 20, 2012
Sands Cotai Phase II – doors open today
Year I Number 123 Thursday September 20, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00 www.macaubusinessdaily.com
Sands Cotai Central ‘Phase IIA’ opens today. Management promises more low-bet electronic tables in the property’s gaming mix, allowing the operator Sands China Ltd to boost bet size and returns from the live dealer mass market tables. That should please investment analysts. Phase IIA will also see around 2,000 more hotel rooms – this time under the Sheraton brand – released to the market.
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Fiscal reserve bears little fruit T
he government’s investment of its fiscal reserve produced in the first five and a half months of operation a return 2.6 percent below the rate of inflation at that time, data from the Monetary Authority of Macau show. The 0.5 percent growth achieved was slightly better than the 0.37 percent that could have been achieved simply by putting the cash on time deposit at a local bank. But it’s clear the authorities – and the public – will be looking for improvement in future. The average inflation rate over the investment reporting period was 3.13 percent. A summary published in yesterday’s Official Gazette
shows the fiscal reserve had earned 491.5 million patacas (US$61.6 million) from its investments by the end of July. The reserve was set up on February 13 with almost 98.86 billion patacas. It had grown to 99.35 billion patacas by the end of July. The territory’s foreign exchange reserves continue to soar as the gaming industry booms. According to the Monetary Authority of Macau’s 2011 annual report, the exchange reserves ended the year with a return of 573 million patacas, down by 62.2 percent from 2010. More on page 5
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Local newspapers will be allowed to continue operating on a self-regulated basis says the government. A 20-year-old never-implemented provision for mandatory controls – via a Press Council – will be dropped from the updated Press Law. Electronic media will also stay out of the revised bill. Changes to the Broadcasting Law will temporarily be put on hold due to liberalisation of the telecommunications market.
HSI - Movers Name
Page 5
Local asset prices to rise further Capital released by a third round of monetary easing by the Federal Reserve in the United States will undoubtedly find its way into Asian asset markets including Macau. That’s the view of Peter Wong Shiu Hoi, former deputy chairman of Hong Kong’s Haitong International Securities Group Ltd. He was in Macau yesterday for a University of Macau seminar.
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3-star hotel rates’ room for growth
New HK govt team comes to town Page 7
HONG KONG EXCHNG
3.57
NEW WORLD DEV
2.73
PETROCHINA CO-H
2.71
CHINA CONST BA-H
2.51
IND & COMM BK-H
2.48
CATHAY PAC AIR
-1.22
TINGYI HLDG CO
-1.50
WHARF HLDG
-1.70
SANDS CHINA LTD
-2.19
CHINA RES LAND
-2.24
Source: Bloomberg
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Taste of success for Catering Expo Page 7
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business daily September 20, 2012
macau September rebound for gaming revenue Macau’s casinos will post gross gaming revenue in the range of 25 billion patacas (US$3.1 billion) to 26 billion patacas in September, Japanese brokerage firm Nomura predicted. That would represent a year-on-year growth rate of between 18-22 percent, much higher than August’s 5.5 percent growth. According to sources cited by Nomura, the first 16 days in September delivered 14.2 billion patacas in revenue, above analysts’ initial expectations, which pointed towards an outcome of between 24-25 billion patacas for the whole month.
Sands Cotai Central ‘Phase IIA’ opens today Few of live tables new to market: but management promises improvement in gambling product mix Associate Editor
S
ands China Ltd’s long-term prospects in the Macau market remain strong but the company is under some pressure to improve its player offer at Sands Cotai Central said analysts in advance of that property’s staggered phase two launch that begins today. According to an April stock market filing by the parent Las Vegas Sands Corp., the Phase IIA opening today features nearly 2,000 Sheratonbranded rooms, along with a second casino of 106,000 square feet and the remaining retail, entertainment, dining and meeting facilities. The current cap of 5,500 tables for the whole market until 2013 means Sands is having to move tables from its existing properties to help populate phase two, said LVS chairman Sheldon Adelson during the parent’s second quarter earnings call in July. “We’ll need to take tables from elsewhere to get up to 200 tables for SCC phase two,” he told analysts. “On September 20 we will not have all of those 400 [for the whole property], but we will be getting them throughout the rest of the year,” he added.
Cannibalisation risk Under those circumstances, operators have to ensure re-allocated tables perform better in their new home than they did previously. If not, then the operator risks ‘cannibalising’ its existing market with its new venue say analysts. Phase one of Sands Cotai Central opened on April 11 with just under 200,000 sq. feet of gaming space and 1,800 hotel rooms under the Holiday Inn and Conrad brands. The opening came however at a time
not only of a Macau-wide table cap imposed by the government but also a global economic slowdown that has reduced the industry’s earnings growth from the still dominant VIP gambling market. “Although Sands China’s Sands Cotai Central is adding capacity soon, this will not radically change gaming market share distribution,” said China Galaxy International Securities (Hong Kong) Co. Ltd in a note to investors. “The current number of available tables [market wide] has already reached 5,500 (the table cap) and we do not expect Sands China to get additional tables for its new gaming area soon, but will relocate tables from other properties such as the Venetian Macao or the Sands Macao, with no significant change in capacity,” added China Galaxy International. Its parent is Beijing’s largest brokerage firm and recently went on a hiring drive for futures traders at its derivatives desk in Hong Kong. China has recently been relaxing rules allowing its domestic investors to trade on foreign markets via Hong Kong. Other analysts have also been lukewarm on Sands China’s recent market performance. Deutsche Bank recently cited a need for the company to improve its mass table yields.
Bullish view But Kenneth Fong of J.P. Morgan in Hong Kong said in a note to investors: “We continue to like Sands as the Macau core holding for its mass focus, strong cash flow generation and continuous market share gain – after Sands Cotai Central phase two opening – as a catalyst.”
Wynn Resorts rejects Okada’s board nominees But Steve Wynn’s former ‘best friend’ back in court next month in bid to get 20 pct stake restored Associate Editor
W
ynn Resorts Ltd, an owner of casinos in Macau and Las Vegas, has rejected the right of board member and former shareholder Kazuo Okada to nominate two new directors. Earlier this month Mr Okada’s casino equipment company Aruze USA Inc. filed an application with the New York Stock Exchange – where Wynn
Resorts is listed on the Nasdaq – to add Yale University law professor Jonathan Macey and former U.S. broadcasting executive Fredric G. Reynolds to the Wynn board. But on Tuesday United States’ time, Wynn Resorts issued a statement rejecting the move. “Given the fact that Aruze was ejected seven months ago as a Wynn shareholder based on conduct
Sands Cotai Central (Photo: Manuel Cardoso)
And Union Gaming Research Macau was also upbeat about the prospects for Sands in general and Sands Cotai Central in particular. “Assuming the government did not grant any new tables, then you would see a continued migration of lower-yield mass market customers away from live gaming tables and towards electronic table games. This, in itself, will result in improving yields on mass-market table games,” Grant Govertsen, managing partner, told Business Daily. Electronic table games are currently popular with the Macau operators. They give casinos the
option of pushing up minimum bets on their allocation of precious mass-market live dealer tables and shifting less well-heeled customers to automated tables. Rob Goldstein, president of global gaming operations for LVS, addressed some of the issues faced by Sands Cotai Central during the second quarter earnings call. He said: “…the shortcoming in Sands Cotai is in mass- and premium mass- [market], which is the sweet spot of that property’s fiscal ability.” Mr Goldstein confirmed that from this autumn the property would have more electronic gaming tables.
unacceptable for a gaming licensee, it has absolutely no rights as a shareholder to nominate directors and its invalid nominations have been rejected on this basis,” said the casino operator.
Mr Okada’s Japanese pachinko equipment firm Universal Entertainment Corp. via Aruze. Mr Okada is using the Nevada courts to fight the cancellation of his stake. That request is due to be heard next month. In a separate legal move Mr Okada is trying to gain access to Wynn Resorts’ corporate files going back as far as 2000 related to the company’s efforts to get a casino licence in Macau. On Monday – the eve of giving deposition evidence in that case at the U.S. District Court in Clark County, Las Vegas – Mr Okada issued an open letter to Wynn shareholders accusing Mr Wynn of “poor corporate governance”. But Wynn Resorts rubbished the claims in its response. “This most recent filing is a regrettable attempt to divert attention from the issues facing Mr Okada and Aruze,” stated the casino firm.
‘Unsuitable’ claim This is a reference to the cancellation by the company in February of Mr Okada’s near 20 percent stake in Wynn Resorts when it referred to him as “unsuitable”. It followed what the company said was an independent inquiry into Mr Okada’s business dealing in the Philippines. The stake – at that time valued at US$2.77 billion (22.12 billion patacas) – was cancelled and replaced with a promissory note payable in ten years for US$1.8 billion, representing a 30 percent discount at that point. The holding was controlled by
September 20, 2012 business daily | 5
MACAU
Fledgling fiscal reserve brings in feeble return The real value of the fiscal reserve drops as inflation outstrips its return on investment Vítor Quintã
vitorquinta@macaubusinessdaily.com
T
he government’s fiscal reserve had a return on investment of less than 0.5 percent in its first five and a half months in existence, the Monetary Authority of Macau says.
A summary published in yesterday’s Official Gazette shows the fiscal reserve had earned 491.5 million patacas (US$61.6 million) from its investments by the end of July. The reserve was set up on February
13 with almost 98.86 billion patacas. It had grown to 99.35 billion patacas by the end of July. The 0.5 percent rate of return is a far below the rate of inflation of 3.13 percent in the same period,
which means that the reserve is losing purchasing power. The Monetary Authority is responsible for running the reserve but an advisory committee is supposed to suggest investment strategies and another committee is supposed to monitor the management of the fund. Neither committee was created until four months after the reserve was set up, and there has been no word on whether either has ever met. In June, Hong Kong Financial Secretary John Tsang urged Macau to “capitalise on the financial platform in Hong Kong to make long-term investments, so as to maintain and enhance the value of the fiscal reserve of Macau”. Mr Tsang said he put the idea to the Macau government and the proposal was “welcomed” and it would “actively consider” the proposal. The Monetary Authority says it has been using the Hong Kong financial markets to diversify its investments, in the expectation that the markets there will “become an effective platform for the investment of the fiscal reserve”. The authority has followed advice given by the People’s Bank of China and included yuan-denominated assets, including interbank bonds, in the fiscal reserve portfolio.
0.5%
Fiscal reserve fund return on investment
The Monetary Authority of Macau manages the 99 billion pataca fiscal reserve (Photo: Manuel Cardoso)
Forex reserves bets fail to hit jackpot
Govt axes Press Council from media legislation
Last year’s return from the foreign exchange reserves shrinks to one-fifth of what it was two years ago
T
The value of Macau’s trade settled in yuan was 60.05 billion yuan last year (Photo: Kakazi Chan)
T
he Monetary Authority of Macau’s annual return from the foreign exchange reserves plunged last year, although the reserves continued to grow. The Monetary Authority’s annual report for 2011, released yesterday, says investing the city’s foreign exchange reserves returned 573 million patacas (US$71.8 million) last year, 62.2 percent less than in 2010. It was the second consecutive year that the return on investment fell. In 2009, the profit was 2.8 billion patacas, almost five times what it was last year. The Monetary Authority said the foreign exchange reserves themselves had risen by 43.2 percent last year to 272.4 billion patacas on the back of a fast-growing economy driven mainly by tourism services. “The investment portfolio as a whole was able to attain a positive return but ended rather lacklustre in
comparison with the previous year,” the authority said. “The exchange reserves have been hiring external fund managers as a long-term strategy to diversify the mix of managerial approaches and investment styles.” Each externally controlled investment had “positive returns, despite falling short of the designated benchmark as a whole” last year, it said. In 2010, externally controlled investments made a combined loss of 86.2 million patacas. The Monetary Authority described last year as “a difficult year” for the foreign exchange reserves bond portfolio, returns on which were “severely affected by the exposure to anything other than instruments linked to the ultimate safe-haven countries, such as the USA and Germany”. The authority said it had favoured “primarily the short-term, prime-
investment-grade fixed-income securities” – low-risk, low-return debt. It said it had put money last year into bonds issued by “Greater China region entities”, which had “provided some cushions with positive returns, compared to the traditional exposure to advanced countries”. It has added yuan-denominated investments to its portfolio, stressing the growing importance of the yuan as the mainland strives to make it more acceptable internationally. The value of Macau’s trade settled in yuan was 60.05 billion yuan (76 billion patacas) last year which, the Monetary Authority said, reflected the growing importance of yuan business. The authority and the mainland central bank have been discussing ways to make Macau a place for the settlement in yuan of trade and other business between China and the Portuguese-speaking countries. V. Q.
he new draft on the revision of the Press Law will be out for a second round of consultation in November, the Government Information Bureau said yesterday. However, the revision of the Broadcasting Law has been put on hold. The bureau’s director Victor Chan Chi Ping told a press conference that the new version of the Press Law will leave out some “controversial provisions”, like the creation of a Press Council and the journalists’ code of practice. The amendment process is based on the principle of deleting instead of adding provisions to the current Press Law, said Mr Chan, adding that the issue should “focus on self-regulation”. The Press Council idea was first included in the law more than 20 years ago but no such body was set up. Electronic media will also stay out of the revised law. “There is still no concrete opinion” over this matter, said Mr Chan. The idea of amending another statute – the Broadcasting Law – will temporarily be put on hold due to the liberalisation of the telecommunications market, he said. The Broadcasting Law also needs to run in parallel with – but not overlap – the law on the telecommunications market said Mr Chan. Revision of the latter has just started, he added. E-Research & Solutions between December and March this year carried out the first round of consultation on media regulation, based on a deliberative poll. It works by sampling public opinion on a specific issue based on discussions with selected groups. T.L.
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business daily September 20, 2012
macau Competition, costs hit Bossini profits Clothing distributor and retailer Bossini International Holdings Ltd saw its profit shrink to just HK$16 million (US$2 million) in the year ended June 30 2012, down by 88 percent from the previous year. The company told the Hong Stock Exchange the drop was mainly due to “the intensified competition and the temporary surge in production costs”. These factors offset a 4 percent increase in revenue to HK$2.7 billion, mainly due to sales in its Hong Kong segment, which also includes franchised stores in Macau.
Assets a better bet than cash, says top investor Cheap money will encourage borrowing sprees that will drive up asset prices, Peter Wong says Tony Lai
tony.lai@macaubusinessdaily.com
But this also makes asset markets vulnerable to sudden busts, as investors sell assets to pay their debts. Central banks around the world have been criticised for offering investors a one-way bet by doing little to curb markets when they rise but intervening when they fall. By focusing on consumer price inflation rather than asset price inflation, they have encouraged bubbles to grow by keeping interest rates too low.
Impressive growth
Investors are now more inclined to invest in stocks to avoid curbs on investment in property Peter Wong says
L
ow interest rates will persuade investors to move their wealth out of cash and into assets, says a Hong Kong stock expert. Peter Wong Shiu Hoi, who has more than 30 years’ experience in finance, says cheap money will make consumers and companies go on borrowing sprees. The former deputy chairman of Hong Kong’s Haitong International Securities Group Ltd, Mr Wong was in Macau yesterday for a seminar at the University of Macau. He said capital would be abundant in asset markets now that the United States Federal Reserve had begun a third round of ultra-loose monetary policy and that the European Central Bank was making efforts to boost the eurozone economy.
“With the abundance of capital, many people will be forced to go for investment in this low-interest environment, leading to inflation and a rise in asset values,” he told reporters on the sidelines of the seminar. “It’s undeniably not profitable to keep cash in hand now.” The Federal Reserve announced last Thursday that it would buy up to US$40 billion (320 billion patacas) worth of mortgage bonds a month and keep its benchmark interest rate near zero until at least the middle of 2015.
On the bandwagon Official short-term interest rates are below 1 percent in much of the
developed world. Emerging economies, through currency pegs, tend to import these easy-money policies, even though most are growing faster than the rich economies. Mr Wong expects Beijing will jump on the bandwagon and ease its monetary policy after the completion of its once-a-decade change of leaders, which will probably take place next month. “If Europe, China and the United States all relieve their monetary policies, asset values will surely shoot up,” Mr Wong said. But he said the sustainability of the growth would depend on how the global economy fared. When investors borrow money to buy assets, they push up asset prices.
Mr Wong said more capital would flow into the stock market than into real estate. “The real estate markets in Hong Kong, Macau, or even China, will possibly set up more restraints, or administrative regulations, to control the growth,” he said. He said investing in the stock market rather than property gave the investor more flexibility. The Macau government’s housing market think-tank said last month that it did not rule out new measures to cool what it described as the “somewhat overheating” housing market. The real estate industry sees new rules being introduced this year. Mr Wong does not expect the pataca to weaken much despite the slump in the US dollar caused by the latest round of ultra-loose monetary policy. The pataca is indirectly pegged to the US dollar through its peg to the Hong Kong dollar. “The Macau currency would stay strong as there is still impressive growth in the economy and per capita income,” said Mr Wong. Macau’s annual rate of economic growth in the first half of this year was 12.6 percent, although it declined to 7.3 percent the second quarter.
September 20, 2012 business daily | 7
MACAU
Hotel prices break step with star ratings Room rates at three-star hotels keep rising while managers at five-star hotels are seen preparing for a price war Tony Lai tony.lai@macaubusinessdaily.com
T
hree-star hotels were pricier over the summer holidays with the average room rate climbing above 1,000 patacas (US$125) last month, data from the Macau Hotel Association show. The data released yesterday indicate that the average room rate in three-star hotels rose to 1,056 patacas in August, a 7.8 percent increase over the month before and 12.8 percent more than 12 months ago. The increases mean that, on average, rooms at three-star hotels were more expensive than at four-star hotels last month. The average room rate in four-star hotels last month was 888 patacas, 4.6 percent more than a year before. The average room rate in and five-star hotels was 1,618 patacas, a 2.6 percent increase. The Macau Hotel Association represents high-end hotels here. It compiled the data from its 40 members: 21 five-star, 10 four-star and 9 three-star hotels. The average room rate for all the hotels the association surveys was 1,394 patacas last month, rising by 4 percent. The occupancy rate was 92.6 percent, the highest so far this
MOP1,056 Average room rate in three-star hotels in August
Average occupancy and room rates were up at the city’s 24,235 hotel rooms last month
year but about the same as it was a year before. In the first eight months of this year, occupancy stood at 87.7 percent. The average room rate in the same period was 1,406 patacas, 7.5 percent more than a year before, mainly because rooms in three-star and four-star hotels cost more. The average room rate in three-
Two SARs pledge closer tourism ties M
acau and Hong Kong yesterday pledged closer ties – particularly on tourism issues – after a high level meeting of officials. Cheong U, Macau’s Secretary for Social Affairs and Culture held talks with Carrie Lam Cheng Yuet Ngor, Hong Kong’s Chief Secretary for Administration. Mr Cheong said both sides have had strong cooperation in the past and would deepen ties in future. Mrs Lam said that was welcome, as the Kai Tak Cruise Terminal in Hong Kong would be completed by next year, drawing more visitors to the region. “Given the geographical proximity, Hong Kong and Macau have always been popular for the multi-destination itineraries of mainland visitors, our primary visitor source market,” Mrs Lam said in a statement.
star hotels rose by 12.5 percent to 976 patacas and the average room rate in four-star hotels rose by 11.6 percent to 846 patacas. Rooms in five-star hotels were 100 patacas more expensive at 1,664 patacas. Macau Travel Industry Council president Andy Wu Keng Kuong expects the occupancy rate to stay
above 80 percent for the rest of the year, and the average room rate to be stable. But the Macau Hoteliers and Innkeepers Association has warned that a price war among top-end hotels may break out when the Sheraton Macao opens at Sands Cotai Central today. The association’s president, Chan Chi Kit, said last week that hotels might start cutting room rates to attract guests because of low occupancy rates this month and the opening of the first phase of Sheraton Macao, with its 1,800 rooms. Some new five-star hotels would offer discounts, making their room rates similar to those in three-star and four-star hotels, Mr Chan said.
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“As such, we look forward to strengthening cooperation with Macau on tourism promotion and developing new tourism products,” the Hong Kong official added. Mr Cheong added that both administrations should work on promoting the idea of “one trip many stops” to tourists and establishing together a “world-class leisure tourism brand”. Both sides also exchanged views on public welfare, culture and labour issues. In her one-day visit to Macau, Mrs Lam also met with Chief Executive Fernando Chui Sai On and visited some resort hotels and tourism facilities in the city. It was the first official visit to Macau from a member of the new Hong Kong government, led by Leung Chun Ying, who took office in July. T.L.
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business daily September 20, 2012
macau Venetian hosts new film production My Lucky Star, a Chinese-U.S. romantic comedy film starring Chinese actress Zhang Ziyi and mainland pop star Wang Leehom, is currently being filmed at The Venetian Macao until September 25. Ms Zhang is best known for her leading roles in Hollywood hits such as Crouching Tiger, Hidden Dragon and Memoirs of a Geisha. She is acting in and helping to produce the new film. “We believe films shot at The Venetian will attract more tourists to visit and to experience all that Macau has to offer as a world centre of tourism and leisure,” said Edward Tracy, president and chief executive of Sands China Ltd.
Neptune shareholder profit up 40 pct But overdue gambler loans also rise 29 pct in year ending June 30 Associate Editor
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eptune Group Ltd – a Hong Kong-listed investor in Macau casino junket rooms – reported a 40.7 percent rise in profit attributable to equity shareholders for the year ending June 30 2012. The company did not make any recommendation on a shareholder dividend. Equity stakeholders’ profit was HK$282.93 million (US$36.5 million) compared to HK$201.13 million a year earlier. Audited net profit of the group for the year was up 20.2 percent to HK$442.15 million from HK$367.82 million in financial year 2011. During the latest reporting period the firm sold off its casino ship business for US$11.8 million. However the amount of money owed to the company on accounts 90 days old or more rose 29.2 percent in the latest financial
year – to HK$225.49 million from HK$174.43 million. The 90-plus days aged accounts make up 70 percent of all its receivables for the latest financial year.
Credit stretched The company says in its results filed with the Hong Kong Stock Exchange that most of its receivables are from player losses on credit advanced for VIP gambling. Neptune adds that it normally extends credit on a 30-day basis. The stretching of the payback period sought by some of its gambling customers appears to correlate with a general reduction in the first half of this year in capital liquidity among China’s rich. That in turn has been attributed
Growth driven – junket investor Neptune Group (Photo: Manuel Cardoso)
by economists to a fall in export orders and some asset deflation in property and other sectors. Importantly however Neptune says it has not needed to write off any of its player loans this financial year. “The Group seeks to maintain strict control over its outstanding receivables to minimise credit risk. Overdue balances are reviewed regularly by senior management,” says the filing. The firm said aggregate rolling chip turnover for the group was about HK$433.38 million, representing 4.5 percent growth over the same period the previous year. Neptune states that in the
reporting period it had direct investments in 51 VIP gaming tables at three Macau casinos: 16 at The Venetian Macao; 12 at Sands Macao and 23 at Galaxy Entertainment Group Ltd’s StarWorld Hotel & Casino. In August, outside the current reporting period, Neptune announced to the HKSE it had signed memoranda of understanding with three separate junket operations at Grand Lisboa, MGM Macau and Wynn Macau to take over their profit share agreements. At the time of the filing, between them the three takeover targets controlled 64 high roller tables.
Catering firms to cook up deals Xi Chen xi@macaubusinessdaily.com
O
ver 1,100 exhibitors from more than 25 countries will take part in the Third China Catering Expo, which begins here on Friday, hoping to sign over 500 contracts, the event’s organisers say. Macau Economic Services director Sou Tim Peng told reporters yesterday that the expo, a “state-level, professional and specialised event”, was an opportunity for companies in catering to exchange ideas and collaborate. The expo is organised by the mainland’s Ministry of Commerce and Macau’s Economic Services Bureau. It is the first time the city has hosted the event. The first two expos were in the central mainland city of Xi’an and most participants were mainland companies. “We would also like to leverage on Macau’s advantageous location to have a more international platform,” said Zhou Qiang, deputy director of the Ministry of Commerce’s Circulation Industry Promotion Centre. Mr Zhou said it had taken a year
to prepare for this edition of the expo. The event had attracted more than 200 enterprises from 24 provinces, including a number of household names. Business matching would bring together more than 300 senior managers from the mainland and their counterparts in Macau and Hong Kong. Nine forums will cover various aspects of the catering business such as how to create an international brand. The expo has also invited international banks, consulting firms and private equity companies to fill the knowledge gap when it comes to financing deals made during the expo. Goldman Sachs Group Inc and Deloitte & Touche LLP will send representatives to the expo. Mr Sou said the event might become a permanent fixture in the calendar here, if the expo was a success. He said the organisers would make a decision after the expo was finished. “The most important thing now is to have a successful event,” Mr Sou said.
September 20, 2012 business daily | 9
greater china
Uncertainty about world economy clouds trade prospects Trade tensions may further exports slowdown
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hina’s export outlook is grim and demand may be weaker in the months ahead than it has been so far this year, the Ministry of Commerce said yesterday as it revealed the longest period of decline in inward investment since the global financial crisis. “There are still uncertainties hanging over the world economic recovery in the future and we expect external demand in the coming months may be weaker than that in the first eight months,” ministry spokesman Shen Danyang said. “Our export outlook will be still grim in the coming months,” he told a news conference. August trade data, published earlier this month, underlined the likelihood of more central government spending to patch up damage done to the domestic economy by firms cutting production, inventories and imports in the face of anaemic global demand. Imports fell 2.6 percent on the year versus expectations of a 3.5 percent rise. Exports grew 2.7 percent, below forecasts for a 3 percent rise in a Reuters poll. Such weak data is grim news in a country where exports generate 25 percent of gross domestic product, support an estimated 200 million jobs and where analysts already expect the economy to have its weakest year of expansion since 1999. Economists expect China’s sixquarter long economic slowdown may extend into the July-September
External demand may fall, MOFCOM warns
quarter, with full-year growth for 2012 likely to fall to 7.7 percent according to the latest Reuters poll – the lowest since 1999.
Trade tensions Beijing unveiled a series of measures last week to help stabilise export growth, including faster payment of export tax rebates and
Foreign investment fell in August on slowing economy Downward pressure ‘relatively large’, says PBOC Chairman
F
oreign direct investment in China fell in August as a deepening economic slowdown hurt overseas confidence in the world’s most populous nation. Spending declined 1.4 percent from a year earlier to US$8.33 billion, the Ministry of Commerce said in Beijing yesterday, the ninth drop in 10 months. Investment in the first eight months of the year fell 3.4 percent to US$75 billion. China’s economy may grow at the slowest pace in 22 years this year as Europe’s debt crisis and slowing U.S. expansion crimp exports, and a property crackdown damps domestic demand. The European Union Chamber of Commerce in China this month called for the government to make the nation’s markets more open to overseas companies. “Concerns about an economic slowdown and worsening profitability in certain sectors in China are all contributing to the fall in foreign investment,” Zhu Haibin, Hong Kong-based chief China economist for JPMorgan Chase & Co., said before the release. “China is still in middle of an economic slowdown.” FDI is an important gauge of the health of the external economy, to which China’s vast factory sector is
oriented, but its contribution to total capital flows is dwarfed by exports. China drew a record US$116 billion in foreign direct investment last year. The Commerce Ministry aims to attract an average of US$120 billion in each of the next four years.
China is still in middle of an economic slowdown Zhu Haibin, JPMorgan Chase & Co.
China’s outbound direct investment from non-financial firms in the first eight months totalled US$47.7 billion, up 39.4 percent year on year, the Ministry said. Net sales of foreign c u rrency b y C h i n a ’ s central bank and financial institutions accelerated last month, People’s Bank
boosting loans to exporters. China targets a 10 percent growth in total trade this year, a figure which officials say is going to be hard to achieve. Trade tensions make the task harder still. China is at loggerheads with the European Union over solar power and with the United States over auto parts. Cases have been brought in both instances to the
World Trade Organisation. Meanwhile trade relations with Japan had been hurt by an increasingly bitter territorial dispute over islands in the East China Sea claimed by both Tokyo and Beijing. The EU, the U.S. and Japan are three of China’s four biggest trading partners and key inward investors to the country.
of China data showed on Tuesady, suggesting capital outflows picked up as the nation’s economic slowdown deepened. People’s Bank of China Governor Zhou Xiaochuan said downward pressure on the economy is still “relatively large” and the external environment affecting China’s growth is “grim,” according to a commentary yesterday in Financial News, a newspaper published by the central bank. Even so, officials in China have refrained from easing monetary policy since cutting interest rates in June and July and lowering banks’ reserve requirements three
times from November to May. Authorities have signalled they won’t enact stimulus near the scale of a 4 trillion yuan (US$632 billion) package announced in 2008, amid a global crisis when 20 million migrant workers lost their jobs. Mr Zhou said in the commentary that the central bank will keep the continuity of monetary policies and make more effective and targeted adjustments. Inflation that accelerated for the first time in five months in August may limit any monetary easing. The government is also persisting with a campaign to rein in speculation in the property market and make housing more affordable.
Reuters
Bloomberg/Reuters
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business daily September 20, 2012
greater china
PBOC inflation focus halves rate-cut expectations Commodity prices rising, bond sales delayed
S
wap traders have halved expectations for the scale of China’s interest-rate cuts in the coming year as policy makers signal concern that global monetary easing will reignite inflation. The derivatives reflect bets the People’s Bank of China will lower its one-year deposit rate of 3 percent by 44 basis points, compared with expectations a month ago for a 90 basis point reduction, according to data compiled by Bloomberg. The central bank has refrained from acting since July 6, when it reduced by 25 basis points for the second time in a month. The Federal Reserve pledged last week to keep its benchmark rate near zero until at least mid-2015. Chinese stocks and government bonds slumped this week after the central bank said it’s focusing on keeping “overall price levels basically stable,” even as Standard Chartered Plc and Citigroup Inc. slashed forecasts for economic growth. China’s 10-year yield jumped 24 basis points this quarter to 3.57 percent, the most among the largest developing markets. India’s similarmaturity rate rose six basis points to 8.18 percent, Brazil’s declined 19 basis points to 9.95 percent and Russia’s dropped 61 basis points to
official Xinhua News Agency reported this week, citing Lu Zhengwei, chief economist at Fuzhou-based Industrial Bank Co. Guo Jianwei, a PBOC official, said easing in the U.S. may push up commodity prices, fuelling global inflation, Market News International reported on September 14. The European Central Bank also unveiled a bond-buying program to fight the region’s debt crisis last week. “QE3 has proven to be a boon for commodity prices, which will likely further feed into the PBOC’s inflation concerns,” said Bin Gao, head of interest-rate research for Asia and the Pacific at Bank of America Corp. in Hong Kong. “We don’t foresee any rate cuts this year.”
Bonds postponed
Price stability goal makes hard policy choices
8.09 percent. “The leadership of the People’s Bank of China seems to believe that interest rates are already at an appropriate level,” said Stephen Green, a Hong Kong-based economist at Standard Chartered. “We no longer look for another cut in 2012. Indeed, we believe that the next move will be up.”
Rising prices Standard Chartered expects consumer prices in China will climb
4 percent in 2013, fuelled by “easy money” as U.S. and European central banks buy bonds, Mr Green said. That’s higher than the median estimate of 3.5 percent in a Bloomberg survey of 25 economists. Consumer prices rose 2 percent from a year earlier in August, after a July gain of 1.8 percent that was the smallest since January 2010, official data show. China needs to be more cautious with its monetary policies because of the third round of so-called quantitative easing in the U.S., the
At least four Chinese bond issuers have delayed or cancelled bond sales in the past week amid concern inflation will gather pace. Shandong Three-Star Group Co. postponed a 600 million yuan (US$95 million) sale planned for yesterday, while Sichuan Expressway Construction & Development Co. delayed a 3 billion yuan issue that had been scheduled for this month. China Development Bank cancelled a sale last week and Xinao China Gas Investment Co. postponed an offering. Premier Wen Jiabao has a range of options to stimulate the economy and Standard Chartered predicts the central bank will lower banks’ reserve-requirement ratios once more this year, after three cuts in the six months through May. To ease a cash crunch, the authority has been conducting open-market operations to pump money into the banking system. Bloomberg
Xi Jinping meets Panetta after two-week absence
Alibaba begins buying back Yahoo! stake
Prices of cancer, HK jails immunology, mainlander blood drugs reduced for ‘pregnancy lie’
China’s Vice President Xi Jinping, in line to become the country’s next president, met with U.S. Defence Secretary Leon Panetta at the Great Hall of the People in Beijing yesterday, his first announced appearance with a foreign visitor after being absent in public for about two weeks. Mr Panetta told Mr Xi that he appreciates his “support in encouraging better militaryto-military relations between our two countries”. Panetta announced on Tuesday that the U.S. would invite a Chinese ship to participate in a 2014 naval exercise off the coast of Hawaii. Mr Xi previously cancelled a September 5 meeting with Secretary of State Hillary Clinton and other foreign leaders. The dearth of information about Mr Xi’s whereabouts prompted speculation about his health and who else might step in to oversee the world’s most populous nation and second-biggest economy, which undergoes a leadership change this year.
Chinese e-commerce giant Alibaba on Tuesday announced that it has bought back billions of dollars worth of stock from Yahoo! in a step toward independence from the US Internet pioneer. Alibaba Group Holding Limited said it has completed an initial repurchase of shares from Yahoo! and “restructured its relationship with the Silicon Valley company” in transactions valued at approximately US$7.6 billion. “The completion of the first stage of the Alibaba share repurchase represents a significant milestone for both Alibaba and Yahoo!,” the California company’s chief executive Marissa Mayer said in a release. “The execution of the deal was excellent.” In May, the companies revealed that more than a year of negotiations had resulted in a deal for Yahoo! to sell back its stake in Alibaba. The transaction will be carried out in stages, with the first step calling for a repurchase by Alibaba of up to one-half of Yahoo!’s stake, or approximately 20 percent of Alibaba’s total shares.
China will cut the maximum retail prices of 95 cancer, immunology and blood-related drugs by about 17 percent to try to reduce the growing number of chronic, ageingrelated diseases in the country and make healthcare more affordable. Healthcare is viewed as a flashpoint of social unrest in China and the central government has been trying for the past decade to revamp the lumbering public healthcare system to make it more accessible. In the country of over 1.3 billion people, 260 million are diagnosed with some form of chronic, long-term illnesses, which now account for 85 percent of China’s death figures. China’s National Development and Reform Commission (NDRC) said in a statement posted on its website the reductions would begin on October 8. The reductions are expected to eat into margins of drug manufacturers and distributors, but companies with diversified drug portfolios will be less affected, said Jason Mann, head Barclay’s research unit on China healthcare and pharmaceuticals.
A Hong Kong court sentenced on Tuesday a mainland Chinese woman to eight months in jail for lying about her pregnancy upon her entry into the city, as measures to limit mainland births are stepped up. The 26-year-old woman entered Hong Kong in late August, when she was 38 weeks pregnant, after she produced a fake medical certificate that claimed she had completed 28 weeks of pregnancy, a government statement said. At the border, the woman said she came to the city for sightseeing, but checks revealed she had previously been turned back by authorities in June for not having a hospital booking. The woman was again denied entry, but she reported sick and was subsequently admitted to hospital. She gave birth 10 days later. “Under the laws of Hong Kong, any person who makes false representation to an immigration officer commits an offence,” an Immigration Department spokesman said about the eight months sentence.
September 20, 2012 business daily | 11
asia Japan Airlines rises on trading debut Japan Airlines Co. rose as much as 3 percent on its Tokyo trading debut following a 663 billion-yen (US$8.4 billion) initial public offering, making it Asia’s third-biggest carrier by market value. The company climbed as high as 3,905 yen from an IPO price of 3,790 yen, before closing at 3,830 yen in Tokyo. The Tokyo-based carrier has a market value of US$8.86 billion, trailing Singapore Airlines Ltd and Air China Ltd, according to data compiled by Bloomberg.
BOJ extends asset purchase scheme As global slowdown, China protests bite
The yen is off record highs hit last year, giving the BOJ some breathing space
T
he Bank of Japan expanded its easing programme in an effort to prevent a rising yen from undermining an economic recovery, following measures from the U.S. Federal Reserve last week to stimulate growth. The central bank increased its asset-purchase fund to 55 trillion yen (US$697 billion) from 45 trillion yen and its lending facility was kept at 25 trillion yen, according to a statement released yesterday. “We expect today’s [yesterday’s]
decision ... will help ensure that Japan’s economy resumes a sustainable growth path with price stability,” the BOJ said in a statement. The world’s third-largest economy grew at half the pace initially estimated in the second quarter, highlighting a contraction risk worsened by Japanese factories in China shuttering amid a territorial dispute. The Fed’s open-ended plan to buy mortgage-backed securities pressured the BOJ to act to avoid further yen appreciation, according
to BNP Paribas SA economist Ryutaro Kono. “When the Fed makes a significant move, the BOJ has no choice but to follow,” Mr Kono said before the BOJ meeting. “It’s hard for the BOJ to just sit and watch further yen appreciation.” Finance Minister Jun Azumi welcomed the move, saying it was bolder than expected and will have a positive impact on Japan’s economy by stabilising currency moves. The central bank kept its benchmark interest rate between zero and 0.1 percent and monthly bond purchases at 1.8 trillion yen. The BOJ’s main policy tool has been purchasing financial securities ranging from government debt to exchange-traded funds to bolster growth. JPMorgan Securities, Credit Suisse Group AG and BNP Paribas expect Japan’s economy to contract this quarter after it slowed to a 0.7 percent annual pace in the three months ended on June 30 after expanding 5.3 percent in the January to March period. Prime Minister Yoshihiko Noda said last week he will have to compile an extra budget to support a recovery from the March 2011 earthquake, even as he is struggling to pass a bill to allow the sale of 38 trillion yen of bonds to fund spending for the rest of this year’s primary budget. Japan’s weakening recovery faces an added threat from a territorial dispute with China, Japan’s biggest export market. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., halted production at some plants in China while Panasonic Corp. reported damage to a factory. Thousands marched in anti-Japanese protests in dozens of Chinese cities on Tuesday.
Dutch brewer agrees not to block Thai bid for rest of F&N
H
ThaiBev, TCC agree to back Heineken bid for Tiger beermaker
seeks to expand in faster-growing emerging markets, according to data compiled by Bloomberg. Singaporebased APB has rights to brew Bintang in Indonesia, Anchor in China, Southeast Asia and Sri Lanka, and Heineken from China to New Zealand. TCC, controlled by 68-year-old Charoen, offered S$9 billion last week to buy the 70 percent of F&N he didn’t control, throwing Heineken’s takeover of APB into doubt. Heineken had originally been spurred to bid
Japan’s cabinet has approved a new energy plan to cut the country’s reliance on nuclear power in the wake of last year’s Fukushima disaster, but dropped a reference to meet a nuclear- free target by the 2030s, ministers said yesterday. Since the plan was announced on Friday, Japan’s powerful industry lobbies have urged the government rethink the nuclear-free commitment, arguing it could damage the economy and would mean spending more on pricey fuel imports. Trade Minister Yukio Edano, who also oversees the energy portfolio, said the cabinet had approved the new energy plan. “But whether we can become nuclear free by the 2030s is not something to be achieved only with a decision by policy makers. It also depends on the will of [electricity] users, technological innovation and the environment for energy internationally in the next decade or two,” he said. In abandoning atomic power, Japan aims to triple the share of renewable power to 30 percent of its energy mix by the 2030s, but will remain a top importer of oil, coal and gas for the foreseeable future. The newly established Nuclear Regulation Authority (NRA) will decide whether reactors currently under construction are safe enough to start commercial operations, Mr Edano said. Asked if newly built reactors could run beyond the 2030s, he said a decision on this would be decided later.
Reuters/Bloomberg
Heineken ends Tiger beer standoff eineken NV cleared the biggest hurdle in its fight to take control of Asia Pacific Breweries Ltd as billionaire stakeholder Charoen Sirivadhanabhakdi’s Thai Beverage Pcl pledged its support. ThaiBev and Mr Charoen’s TCC Assets Ltd will back Heineken’s S$5.6 billion (US$4.6 billion) bid for Fraser & Neave Ltd’s 40 percent stake in the beermaker at a shareholder meeting next week after the Dutch brewer agreed not to make a competing offer for F&N, the Amsterdam-based brewer said yesterday. Heineken and F&N have controlled APB through a joint venture set up in 1931. “They’re both going to win from this situation,” Justin Harper, a Singapore-based market strategist at IG Markets, said. “Heineken will win control of APB and Charoen will have a smooth acquisition of F&N with the view to breaking it up.” APB would be the Dutch brewer’s largest acquisition since its 2010 purchase of Fomento Economico Mexicano S.A.B’s beermaker as it
Japanese cabinet approves nuclear exit
for control of APB, of which it’s the majority shareholder, after a company controlled by Charoen’s son-in-law bought shares in APB. “This significantly improves the level of certainty that our offer will be approved,” John Clarke, a spokesman for Heineken, said. F&N shareholders are scheduled to meet on September 28 to vote on Heineken’s offer to buy F&N’s shares in APB. Bloomberg/Reuters
Suu Kyi seeks easing of sanctions Myanmar opposition leader Aung San Suu Kyi said she was open to a U.S. relaxation of economic sanctions on her country, even as she urged American leaders to focus on more than its economy alone. “I do support the easing of sanctions because I think that our people must start taking responsibility for their own destiny,” Ms Suu Kyi said at an event at the U.S. Institute of Peace, a nonpartisan policy group in Washington funded by Congress. “I do not think we should depend on the U.S. sanctions to keep up the momentum of our movement toward democracy. We’ve got to work at it ourselves.” Ms Suu Kyi met with Secretary of State Hillary Clinton at the State Department on Tuesday and will see lawmakers, activists and officials while in Washington. She asked U.S. leaders not to focus on Myanmar’s economy to the exclusion of other issues, such as the rule of law and democratic progress. In July, State Department officials led the highest-level economic and commercial delegation to Myanmar in more than 25 years. They also took part in a business delegation that included more than 70 executives from 35 companies. “While the United States seems to be concentrating a lot on the economic aspect of its relations with my country,” Ms Suu Kyi said, “I hope they will do this in full awareness of the need to promote rule of law and to help the president and his executive to carry out the reforms they have in mind.”
12 |
business daily September 20, 2012
MARKETS Hang SENG INDEX NAME
NAME
PRICE
Day %
VOLUME
13.14
2.336449
26728824
CITIC PACIFIC
9.88
1.437372
6073687
SANDS CHINA LTD
CLP HLDGS LTD
65.7
0.9992314
2358219
SINO LAND CO
CNOOC LTD
16.2
1.123596
75992697
SUN HUNG KAI PRO
11.02
0.5474453
5878944
12.8
-0.621118
27.75
0.1805054
PRICE
Day %
VOLUME
AIA GROUP LTD
28.7
-0.6920415
24826778
CHINA UNICOM HON
ALUMINUM CORP-H
3.23
0.623053
18581159
BANK OF CHINA-H
2.97
1.712329
353038419
BANK OF COMMUN-H
5.29
2.123552
31436692
BANK EAST ASIA
29.35
0.1706485
2332486
BELLE INTERNATIO
14.14
0.7122507
14680612
BOC HONG KONG HO
24.35
0.8281573
9040760
HANG LUNG PROPER
COSCO PAC LTD ESPRIT HLDGS
PRICE
Day %
64.3
1.100629
3489881
29
-2.192243
24886835
14.36
1.699717
11964479
112.8
-0.265252
6204949
SWIRE PACIFIC-A
95.25
1.6
1318636
5760471
TENCENT HOLDINGS
255.6
0.2352941
2848120
6563414
TINGYI HLDG CO
23.05
-1.495726
5353911
WANT WANT CHINA
9.41
-0.3177966
13124105
CATHAY PAC AIR
12.96
-1.219512
5328163
HANG SENG BK
117.1
0.6878762
1494603
CHEUNG KONG
114.9
0.6129597
4347444
HENDERSON LAND D
54.65
1.674419
4805678
CHINA COAL ENE-H
7.24
0.8356546
22892017
3407610
CHINA CONST BA-H
5.3
2.514507
324916183
CHINA LIFE INS-H
22.8
1.108647
31701387
CHINA MERCHANT
24.2
0.4149378
3298871
CHINA MOBILE
75.8
-0.3287311
HONG KG CHINA GS
HENGAN INTL
19.34
2.328042
9517258
HONG KONG EXCHNG
121.7
3.574468
9026487
HSBC HLDGS PLC
73.85
1.303155
22388914
74.85
1.285521
9363021
4.55
2.477477
416372788
85.05
2.223558
26373443
HUTCHISON WHAMPO
CHINA OVERSEAS
19.7
0.7157464
32847196
IND & COMM BK-H
CHINA PETROLEU-H
7.18
0.7012623
99003017
LI & FUNG LTD
12.74
0.3149606
27106999
CHINA RES ENTERP
26.2
0.7692308
2916113
MTR CORP
29.45
1.551724
4071564
CHINA RES LAND
NAME POWER ASSETS HOL
MOVERS
38
11
VOLUME
0 20880
INDEX 20841.91 HIGH
20880.65
LOW
20582.15
52W (H) 21760.33984
16.62
-2.235294
25401202
NEW WORLD DEV
11.3
2.727273
27970615
CHINA RES POWER
17
0.2358491
5598592
PETROCHINA CO-H
10.22
2.713568
129534765
CHINA SHENHUA-H
30.65
-0.3252033
21261212
PING AN INSURA-H
58.7
0.5136986
9171166
PRICE
DAY %
VOLUME
22.45
1.354402
4604800
-0.1408451
31039338
ZIJIN MINING-H
(L) 16170.35
20580
17-Sep
19-Sep
Hang SENG CHINA ENTErPRISE INDEX NAME
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.17
1.92926
79098709
AIR CHINA LTD-H
4.75
-1.452282
5118000
CHINA PETROLEU-H
7.09
ALUMINUM CORP-H
CHINA PACIFIC-H
NAME YANZHOU COAL-H
PRICE
DAY %
12.76
0.9493671
VOLUME 9464868
2.41
0
17049136
3.21
0.9433962
6975968
CHINA RAIL CN-H
6.24
-1.265823
19223000
ZOOMLION HEAVY-H
11.54
6.654344
29164120
ANHUI CONCH-H
23.75
3.938731
20401882
CHINA RAIL GR-H
3.07
0.3267974
20591000
ZTE CORP-H
15.04
0.669344
6730935
BANK OF CHINA-H
2.93
2.447552
389843053
CHINA SHENHUA-H
27.85
1.272727
9273746
5.05
1
12754025
CHINA TELECOM-H
3.63
0.5540166
29684000
15.24
-5.925926
12577500
DONGFENG MOTOR-H
13.48
8.012821
20906528
CHINA CITIC BK-H
3.98
0.2518892
47624006
GUANGZHOU AUTO-H
6.68
2.769231
6689701
CHINA COAL ENE-H
7.23
1.402525
18024088
HUANENG POWER-H
4.89
1.242236
9826000
CHINA COM CONS-H
7.32
1.244813
21550789
IND & COMM BK-H
4.67
1.082251
260319980
CHINA CONST BA-H
5.21
1.165049
227493277
JIANGXI COPPER-H
16.26
0.8684864
7358345
BANK OF COMMUN-H BYD CO LTD-H
3.5
-1.408451
9866000
PETROCHINA CO-H
10.2
0.1964637
31650019
CHINA LIFE INS-H
18.2
0.7751938
17874467
PICC PROPERTY &
8.18
2.122347
14181021
CHINA LONGYUAN-H
4.49
-2.391304
5595164
PING AN INSURA-H
56.7
0.4428698
6430028
CHINA MERCH BK-H
14.64
1.385042
10070351
SHANDONG WEIG-H
7.94
-0.2512563
1144000
CHINA COSCO HO-H
MOVERS
35
1 9890
INDEX 9849.06 HIGH
9884.02
LOW
9668.93
CHINA MINSHENG-H
7.01
0.1428571
25184000
SINOPHARM-H
17.66
-1.450893
971312
52W (H) 11916.1
CHINA NATL BDG-H
9.47
3.04679
46809000
TSINGTAO BREW-H
46.65
-1.269841
207417
(L) 8058.58
10.88
1.872659
10960000
WEICHAI POWER-H
32.5
2.362205
1967864
CHINA OILFIELD-H
4
9660
17-Sep
19-Sep
Shanghai Shenzhen CSI 300 NAME
NAME
PRICE
DAY %
VOLUME
4.43
0
2562116
11.49
2.864816
GD MIDEA HOLDING
9.18
14786616
GD POWER DEVEL-A
10312351
GF SECURITIES-A
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.44
0
56159665
AIR CHINA LTD-A
4.71
-0.422833
8446807
5.1
0.990099
10010653
ANHUI CONCH-A
14.82
1.298701
BANK OF BEIJIN-A
7.06
-0.1414427
BANK OF CHINA-A
2.65
-0.3759398
20851666
GREE ELECTRIC
20.8
0.8729389
7275844
BANK OF COMMUN-A
4.18
0
29272778
GUANGHUI ENERG-A
14.12
-0.1414427
13204316
SHANXI XISHAN-A
4.6
-0.862069
39032270
GUIZHOU PANJIA-A
16.38
3.868104
10215020
SHENZEN OVERSE-A
15.91
0.6962025
3004048
HAITONG SECURI-A
8.84
1.260023
32189090
SUNING APPLIAN-A
27.35
-0.2188982
1220033
TASLY PHARMAC-A
ALUMINUM CORP-A
BAOSHAN IRON & S BYD CO LTD -A
DATANG INTL PO-A EVERBRIG SEC -A
NAME
PRICE
DAY %
VOLUME
SHANDONG GOLD-MI
41.58
6.724846
29122357
11506735
SHANG PHARM -A
11.91
2.23176
11516091
0
9139999
SHANG PUDONG-A
7.34
-0.1360544
35316266
2.42
-0.4115226
22619733
SHANGHAI ELECT-A
4.1
-0.4854369
3624475
12.31
2.157676
62999495
SHANXI LU'AN -A
17.2
2.137767
10184970 2335600
SHANXI XINGHUA-A
36.5
-1.590725
12.81
0.8661417
8954296
5.5
0
19014910
6.65
1.06383
36385510
52.25
-0.3813155
896773
CHINA CITIC BK-A
3.69
0
11370690
HANGZHOU HIKVI-A
CHINA CNR CORP-A
3.59
1.699717
20536320
HENAN SHUAN-A
58.82
1.04793
1247441
TONGLING NONFE-A
19.26
4.277206
19925495 1780172
CHINA COAL ENE-A
6.87
1.029412
5094206
HONG YUAN SEC-A
17.72
1.489118
11111460
TSINGTAO BREW-A
31.79
-0.03144654
CHINA CONST BA-A
3.9
0
16647355
HUATAI SECURIT-A
9.12
3.050847
19647732
WEICHAI POWER-A
18.89
1.286863
4228686
CHINA COSCO HO-A
3.94
1.546392
10089633
HUAXIA BANK CO
8.23
0
16070055
WULIANGYE YIBIN
32.85
-1.351351
18757239
CHINA CSSC HOL-A
19.83
-0.8995502
8088744
IND & COMM BK-A
3.7
0
23811981
XIAMEN TUNGSTEN
40.54
1.274044
7530468
CHINA EAST AIR-A
3.23
1.572327
11135488
INDUSTRIAL BAN-A
11.97
0.167364
23631881
YANGQUAN COAL -A
14.18
1.285714
8555771
2.69
0
21393194
INNER MONG BAO-A
33.73
1.504664
25482376
YANTAI CHANGYU-A
46.94
-2.85596
3326450
18.18
0.1652893
5283404
INNER MONG YIL-A
20.3
-0.8304836
5092980
YANTAI WANHUA-A
12.75
0.8702532
4914711
CHINA MERCH BK-A
9.87
-1.201201
36585950
INNER MONGOLIA-A
5.12
0.3921569
26794550
YANZHOU COAL-A
18.11
1.741573
2749643
CHINA MERCHANT-A
9.93
0.8121827
9383281
JIANGSU HENGRU-A
30.39
1.198801
4674472
YUNNAN BAIYAO-A
61.58
0.3912618
1401056
JIANGSU YANGHE-A
117.2
-2.722444
4342530
ZHONGJIN GOLD
17.79
8.541794
83196323
JIANGXI COPPER-A
22.75
3.976234
12602550
ZIJIN MINING-A
4.08
4.884319
155535922
8.27
0.7308161
38378576
10.27
1.783944
11940881
CHINA EVERBRIG-A CHINA LIFE INS-A
CHINA MERCHANT-A
19.18
0
5559892
CHINA MINSHENG-A
5.52
-0.3610108
42401791
CHINA NATIONAL-A
6.53
0.7716049
19475944
JINDUICHENG -A
12.14
3.319149
6598684
JIZHONG ENERGY-A
12.32
1.399177
13066327 6810245
CHINA OILFIELD-A
16.41
-0.5454545
2208118
CHINA PACIFIC-A
19.2
-1.081917
10224571
KANGMEI PHARMA-A
16.28
-0.245098
KWEICHOW MOUTA-A
CHINA PETROLEU-A
5.94
0
11082034
231.56
-3.649149
4099132
CHINA RAILWAY-A
4.54
1.339286
7084447
LUZHOU LAOJIAO-A
36.06
-1.178405
6645598
CHINA RAILWAY-A
2.49
0.4032258
10766544
METALLURGICAL-A
2.03
0.4950495
10953909
CHINA SHENHUA-A
21.9
-0.3186163
8064427
NINGBO PORT CO-A
2.45
-0.4065041
7243268
CHINA SHIPBUIL-A
4.97
0.2016129
35192495
PANGANG GROUP -A
3.82
2.412869
36536922
8.78
0
9390635
CHINA SOUTHERN-A
3.32
0.6060606
16569753
PETROCHINA CO-A
CHINA STATE -A
2.99
-0.6644518
56398131
PING AN BANK-A
13.34
-1.258327
18434609
40.38
0.8743442
ZOOMLION HEAVY-A ZTE CORP-A
MOVERS
199
70
31 2320
INDEX 2246.236
CHINA UNITED-A
3.61
0
39577908
PING AN INSURA-A
10492991
HIGH
2312.05
CHINA VANKE CO-A
8.04
0.3745318
36685165
POLY REAL ESTA-A
9.8
-0.203666
32469294
LOW
2230.15
CHINA YANGTZE-A
6.34
0.1579779
8986046
QINGDAO HAIER-A
10.76
1.701323
11870965
CITIC SECURITI-A
10.93
1.016636
44290970
QINGHAI SALT-A
30.38
0.2640264
3563111
CSR CORP LTD -A
4.05
0.9975062
20390763
SAIC MOTOR-A
12.89
2.22046
15517059
DAQIN RAILWAY -A
5.95
-0.5016722
22435116
SANY HEAVY INDUS
9.23
0.1084599
19198086
NAME
PRICE DAY %
Volume
ACER INC
30 -0.4975124
25890540
FORMOSA PLASTIC
52W (H) 2781.99 (L) 2186.962
2230
17-Sep
19-Sep
FTSE TAIWAN 50 INDEX
ADVANCED SEMICON
23.3
1.969365
25363912
NAME
PRICE DAY %
Volume
NAME
PRICE DAY %
85.4
0.7075472
7978730
TAIWAN MOBILE CO
FOXCONN TECHNOLO
121.5
1.67364
13156289
TPK HOLDING CO L
Volume
108.5
2.358491
5260947
409
-1.207729
5380980 41995231
ASIA CEMENT CORP
36.75
0.4098361
4153763
FUBON FINANCIAL
32.15
0.9419152
28850492
TSMC
86
0.3500583
ASUSTEK COMPUTER
317.5
0.1577287
3200185
HON HAI PRECISIO
96.9
0.8324662
34537158
UNI-PRESIDENT
50.6
0.5964215
9190269
AU OPTRONICS COR
11.4
-2.145923
118812682
HOTAI MOTOR CO
208
0.2409639
313005
UNITED MICROELEC
12.3
0.8196721
23416840
CATCHER TECH
151 -0.9836066
15919492
HTC CORP
310.5
-2.358491
28311694
WISTRON CORP
34.85
0.7225434
10098090
CATHAY FINANCIAL
32.6
2.194357
46727518
HUA NAN FINANCIA
16.55
0.3030303
7453717
YUANTA FINANCIAL
15.85
1.277955
33626070
CHANG HWA BANK
16.05
0.3125
11863468
LARGAN PRECISION
656 -0.4552352
1031782
YULON MOTOR CO
58.5
0.862069
8825809
CHENG SHIN RUBBE
74.2
0
4303678
LITE-ON TECHNOLO
1.648352
4290567
326.5
CHIMEI INNOLUX C
11.7
2.183406
129701038
-1.359517
13861036
CHINA DEVELOPMEN
7.38
0.2717391
47740487
MEGA FINANCIAL H
22.8 -0.6535948
32833717
CHINA STEEL CORP
26.6
1.333333
23541889
NAN YA PLASTICS
58.9
1.727116
5739498
18
0.8403361
42317756
PRESIDENT CHAIN
159
0.3154574
1447462
CHINATRUST FINAN CHUNGHWA TELECOM
MEDIATEK INC
37
93.2
0.7567568
11148071
QUANTA COMPUTER
77.5
-1.021711
6861903
COMPAL ELECTRON
26.75
2.490421
14394684
SILICONWARE PREC
34.2
1.937407
8057565
DELTA ELECT INC
114.5
1.777778
6451937
SINOPAC FINANCIA
12.2
1.244813
13924350
FAR EASTERN NEW
33.95 -0.4398827
8983627
SYNNEX TECH INTL
66.5 -0.4491018
3652897
TAIWAN CEMENT
FAR EASTONE TELE FIRST FINANCIAL
72
1.408451
7872874
35.95
0.1392758
10296459
18.25
0.8287293
15022975
16.8
0
10562212
FORMOSA CHEM & F
79.9
1.395939
4366716
TAIWAN FERTILIZE
81
1.25
4944828
FORMOSA PETROCHE
89.4
0.5624297
2224271
TAIWAN GLASS IND
30
2.389078
2930489
TAIWAN COOPERATI
MOVERS
36
11
3 5390
INDEX 5380.23 HIGH
5384.75
LOW
5339.07
52W (H) 5621.53 5328
(L) 4643.05 17-Sep
19-Sep
September 20, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) gaLaXy eNTerTaINMeNT
MeLCo CroWN eNTerTaINMeNT
MgM CHINa HoLDINgS 34.8
25.9
13.6
25.7 13.5
25.5
34.7
25.3
13.4
25.1 Max 25.8
average 25.218
Min 24.9
24.9
Last 25.3
Max 34.7
SaNDS CHINa LTD
average 34.7
Min 34.7
34.6
Last 34.7
SJM HoLDINgS LTD
21.2
29.4
16.9
21.0
29.0
Last 29
20.6 16.7
PRICE
16.6 Max 16.94
average 16.868
DAY %
YTD %
(H) 52W
95.98
0.724105363
-2.637451816
110.6499939
78.15999603
BRENT CRUDE FUTR Nov12
112.73
0.624832634
8.134292566
122.6499939
89.5
GASOLINE RBOB FUT Oct12
293.41
1.210762332
16.09163567
307.9600096
220.5600023
GAS OIL FUT (ICE) Oct12
986.75
-0.177035913
9.883073497
1044.75
799
2.753
-0.721240534
-17.128236
4.455000401
2.299999952
314.7
0.636372358
10.1312336
333.8899851
252.5300026
1774.66
0.9563
13.4033
1816.71
1522.75
NATURAL GAS FUTR Oct12 HEATING OIL FUTR Oct12 Gold Spot $/Oz Silver Spot $/Oz Platinum Spot $/Oz
34.745
1.7626
24.8249
40.6925
26.085
1640.25
-1.0765
17.6228
1793.5
1339.25
674
-0.4946
3.137
725.19
537.54 1827.25
Palladium Spot $/Oz LME ALUMINUM 3MO ($)
2160
-0.323027227
6.930693069
2379.75
LME COPPER 3MO ($)
8319
0.216841344
9.460526316
8765
6635
LME ZINC
2108
0.909526089
14.25474255
2220
1718.5
17820
-2.195389682
-4.756814538
22150
15236
14.98
0.234192037
-1.479776389
17.5
14.15499973
748.25
1.114864865
27.63326226
849
499
WHEAT FUTURE(CBT) Dec12
879.25
1.823972206
22.11805556
953.25
629.5
SOYBEAN FUTURE Nov12
1673.5
2.042682927
38.96616151
1789
1115.75
COFFEE 'C' FUTURE Dec12
177.7
0.112676056
-24.70338983
262.8500061
SUGAR #11 (WORLD) Mar13
20.11
-0.198511166
-13.91267123
COTTON NO.2 FUTR Dec12
76.11
0.118389897
-13.35382514
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Nov12 Dec12
Last 16.92
COUNTRY
PRICE
average 20.608
DOW JONES INDUS. AVG
US
NASDAQ COMPOSITE INDEX
US
FTSE 100 INDEX
PRICE MAJORS
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
Last 21.15
Min 20.25
DAY %
1.0444 1.6239 0.9287 1.3032 79.01 7.9849 7.7524 6.3098 53.995 30.81 1.2248 29.346 41.623 9544 82.524 1.21035 0.8025 8.237 10.4067 102.97 1.03
0.1919 -0.1046 -0.0969 -0.2373 -0.481 0.0013 -0.0013 0.1379 0.0232 0.2272 0.1551 -0.0239 0.2787 -0.4086 -0.6786 0.1338 0.1383 0.3521 0.2393 -0.2428 0
YTD %
(H) 52W
2.3019 4.4779 1.0122 0.5478 -2.6579 0.1841 0.1935 -0.2346 -1.7224 2.4018 5.8622 3.1793 5.3264 -4.9769 -4.9586 0.5321 3.8492 -1.248 -0.5256 -3.2145 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 47.8363 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 NAME
(H) 52W
(L) 52W
2.72
1.872659
23.63636
3.25
1.88
2679375
153.6999969
CROWN LTD
9.24
0.2169197
14.21508
9.4
7.47
2198172
25.29999924
19.47999954
AMAX HOLDINGS LT
0.061
0
-29.88506
0.119
0.055
0
101
64.61000061
BOC HONG KONG HO
24.35
0.8281573
32.33696
24.95
14.24
9040760
CENTURY LEGEND
0
6.521737
0.335
0.204
2500
0.8547009
26.42857
3.55
2.3
85000
CHINA OVERSEAS
19.7
0.7157464
51.94289
20.4
9.979
32847196
CHINESE ESTATES
9.98
0
-20.16
13.32
8.3
289359
CHOW TAI FOOK JE
11.28
3.107861
-18.96552
15.16
8.4
9281200
EMPEROR ENTERTAI
1.52
1.333333
36.93694
1.57
0.97
395000
FUTURE BRIGHT
1.12
0
166.6667
1.24
0.3
1074000
(L) 52W
13564.64
0.08514657
11.02577
13653.24
10404.49
3177.803
-0.02740136
21.98158
3195.672
2298.89
GB
5875.17
0.1194582
5.435659
5989.07
4868.6
DAX INDEX
GE
7351.03
0.04545646
24.62858
7446.47
4973.92
NIKKEI 225
JN
9232.21
1.188544
9.187797
10255.15
8135.79
HANG SENG INDEX
HK
20841.91
1.164842
13.05993
21760.33984
16170.35
CSI 300 INDEX
CH
2246.236
0.4919832
-4.241978
2781.99
2186.962
MGM CHINA HOLDIN
TAIWAN TAIEX INDEX
TA
7781.91
0.61609
10.03708
8170.72
6609.11
MIDLAND HOLDINGS NEPTUNE GROUP NEW WORLD DEV
SK
2007.88
0.1456388
9.97623
2057.28
1644.11
AU
4418.36
0.5377352
8.918869
4448.5
3840.2
ID
4235.831
0.2826065
10.82784
4272.829
3217.951
FTSE Bursa Malaysia KLCI
MA
1644.39
0.2475112
7.425218
1655.49
1310.53
NZX ALL INDEX
NZ
836.838
-0.7340224
14.66671
847.344
712.548
VOLUME CRNCY
3.54
(H) 52W
KOSPI INDEX
DAY % YTD %
0.245
YTD %
S&P/ASX 200 INDEX
PRICE
CHEUK NANG HLDGS
DAY %
JAKARTA COMPOSITE INDEX
20.2 Max 21.2
ARISTOCRAT LEISU
World Stock MarketS - Indices NAME
Min 16.74
(L) 52W
WTI CRUDE FUTURE Oct12
CORN FUTURE
20.4
CURRENCY EXCHANGE RATES
NAME
METALS
20.8
16.8
Commodities ENERGY
13.3
Last 13.4
17.0
29.1 Min 29
Min 13.34
29.5
29.2
average 29.164
average 13.445
WyNN MaCaU LTD
29.3
Max 29.45
Max 13.56
GALAXY ENTERTAIN
25.3
-0.589391
77.66854
25.95
8.69
16672729
117.1
0.6878762
27.07542
117.3
84.4
1494603
HOPEWELL HLDGS
26.8
1.70778
34.94461
26.9
18.56
1797000
HSBC HLDGS PLC
73.85
1.303155
25.16949
74
56
22388914
HUTCHISON TELE H
3.43
1.780415
14.71572
3.88
2.53
4194413
LUK FOOK HLDGS I
26.65
2.303263
-1.660518
37.1
14.7
2199527
MELCO INTL DEVEL
7.1
-0.8379888
23.05026
8.28
4.3
3949000
13.4
0
39.69751
14.76
7.6
2580800
4.66
-0.2141328
17.85394
5.217
2.887
3902000
0.189
-6.435644
70.27027
0.222
0.08
28990000
HANG SENG BK
11.3
2.727273
80.51118
11.4
6.13
27970615
SANDS CHINA LTD
29
-2.192243
32.11845
33.05
14.9
24886835
SHUN HO RESOURCE
1.2
-7.692308
20
1.37
0.82
260000
SHUN TAK HOLDING
3.07
-0.3246753
19.96272
3.51
2.241
4897938
SJM HOLDINGS LTD
16.92
0.7142857
35.30008
17.614
10.079
5305740
SMARTONE TELECOM
15.22
-2.059202
13.24405
18.5
9.8
6920743
WYNN MACAU LTD
21.05
2.184466
7.948718
25.5
14.62
8872168
ASIA ENTERTAINME
3.73
-0.7978723
-36.56463
7.49
2.4
30680
PHILIPPINES ALL SHARE IX
PH
3546.56
0.09200463
16.47006
3558.72
2695.06
HSBC Dragon 300 Index Singapor
SI
603.04
-0.05
21.5
NA
NA
STOCK EXCH OF THAI INDEX
TH
1282.88
0.7872036
25.11997
1285.55
843.69
BALLY TECHNOLOGI
46.63
-0.5968877
17.87158
49.32
24.74
521597
HO CHI MINH STOCK INDEX
VN
394.55
0.01013916
12.23155
492.44
332.28
BOC HONG KONG HO
3.05
-5.572755
27.23244
3.25
1.81
3892
Laos Composite Index
LO
1047.94
0
16.50767
1064.23
876.33
GALAXY ENTERTAIN
3.23
0.310559
72.72727
3.25
1.08
5500
INTL GAME TECH
12.86
-1.681957
-25.23256
18.1701
10.92
4679126
JONES LANG LASAL
80.77
-0.5785327
31.84787
87.52
46.01
382168
LAS VEGAS SANDS
45.83
-1.589006
7.254857
62.09
34.72
7525272
MELCO CROWN-ADR
13.05
-1.435045
35.65489
16.02
7.05
6676704
MGM CHINA HOLDIN
1.66
0
39.2976
1.96
1.0025
5545
MGM RESORTS INTE
11.05
-1.60285
5.944388
14.9401
7.4
7597134
SHUFFLE MASTER
14.94
0
27.4744
18.77
7.55
799313
2.19
0.4587156
36.23022
2.2782
1.2624
3045
112.73
0.2311728
2.027335
154.7051
90.108
1100544
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 20, 2012
Opinion Chinese riots pit Confucius against self-interest Adam Minter
W
Shanghai correspondent for the World View blog
hat does a Chinese citizen owe the state in times of crisis? For most of recorded history, the answer to that question was simple: everything. The individual was second to that state in all matters, and was expected to sacrifice self-interest for national interest when called upon. Those who sacrificed the most were the most patriotic. Those who refused the state were selfish, and worse. In recent years, however, China’s free market reforms have slowly, and subtly, began to change that ancient calculus. After all, a free market system based upon the pursuit of selfinterest is inevitably going to clash with a traditional culture that emphasises collective interest above all others. Contemporary China is rife with examples of this tension, from the parents who desire more than one child despite the demands of China’s population control policies, to the Olympic athletes who sacrifice everything for a gold medal-oriented national sports administration. But perhaps no event or set of circumstances reveals that tension quite as clearly as recent calls for boycotts and violence against Japan and Japanese companies because of a decades-old territorial dispute in the East China Sea. The dirt in question is a string of barren, uninhabited islands that the Chinese call the Diaoyu, and the Japanese the Senkaku. In recent weeks tensions over the islands have intensified as Japan has attempted to strengthen claims of sovereignty through survey parties and – most recently – an attempt to purchase the islands from their current private owner. Over
the weekend, the purchase effort provoked oft-violent protests on the mainland. In decades past, the call for boycotts would have come from the state media and been greeted with full-throated collectivist acceptance. These days, the calls are made by netizens and met with a range of emotions, from the violently enthusiastic to those tortured by the idea of giving up hard-earned, self-interested materialistic comforts.
Split feelings Take, for example, a curious but highly representative tweet posted to Sina Weibo, China’s leading microblog, on Friday afternoon. The author was Tao Xunmin, a self-identified expert in European travel itineraries with the state-owned China Travel Service in Beijing. While the anti-Japanese protests and riots raged, he found himself in the presence of a Chinese business group with conflicted feelings: The tour group I had this time consisted of ultrasound machine experts and distributors! And what they use and sell is the Toshiba brand manufactured in Japan! These distributors worry that their millions in investment capital won’t have a return if these devilish Japanese keep up like this. From the perspective of national interest, they hope to fight; while in terms of personal interest, they want peace! Favoring the collective over the individual is a Chinese value rooted in the Chinese state’s Confucian past. The emperors favored it, and so does the Communist Party. It’s a means of marshaling the people in pursuit of the national interest (actual and alleged) while justifying their individual
sufferings. Nonetheless, it would be a mistake to view China’s collectivism as a value transmitted from the top down. It is, in fact, a value – or set of values – long embraced by the grassroots. When it comes to the Diaoyu crisis, at least, it’s not difficult to find online voices expressing those grassroots sentiments. Xu Liang, a Beijing-based television director logged into Sina Weibo last Wednesday to report – approvingly – how he claims such attitudes were expressed in a produce market: I heard an old vendor talking about the Diaoyu Island events while I was buying fruit. Personally speaking, I don’t think her anger will be mollified unless we retrieve the islands! We average citizens are strongly patriotic and individual gains or losses aren’t worth mentioning when compared to national interest and national honour! Remember: “The fate of the nation is every man’s duty!” Duty or not, forgoing Japanese goods in China is a considerable sacrifice for consumers interested in quality and reliability – a point made by many Chinese microbloggers over the last few days. Late Friday afternoon, Exercise Book, the handle for a widely followed member of Sina Weibo, offered a tweet that placed that sacrifice in uncomfortable perspective by invoking the never-ending scandals over contaminated milk powder and baby formula in China. Though there are many other food-related scandals in China, poisoned baby food has a particular grip: “If the Japanese attacked and there were a Japanese gun on the ground – would you grab and fire it? Imagine you
have a child and access to only two kinds of milk powder. The first is manufactured in China, and the other manufactured in Japan. Which do you chose?” Exercise Book’s provocative tweet has since generated more than 65,000 re-tweets and 37,000 comments which range from the furious to the resigned. It was also, briefly, censored on Sunday afternoon, and then restored hours later after Exercise Book and his followers mocked the censors.
Online commentary began to reflect on what factors could have led to the collective destruction of property that – in the end – would only serve to harm the Chinese people
Though it’s impossible to say for certain why the popular tweet was censored, it likely wasn’t viewed kindly by authorities who enjoy the security of a state where collective needs still overwhelm individual ones.
Difficult choices Still, it’d be a mistake to think that China’s free market reforms have universalised an appreciation for individual self-interest and what it can buy. Over the weekend, as protests grew violent across China, protestors turns their ire over their government’s lack of aggressive action against Japan into vandalism on Japanese products (especially cars), restaurants, stores, and factories (many of which are owned by and employ Chinese). The ugly firmament was so outrageous that People’s Daily, the official mouthpiece of the Chinese
Communist Party, went so far as to publish an editorial calling for “rational patriotism” on Monday morning. Though it doesn’t acknowledge, directly, the vandalism that occurred over the weekend, it does call out those whose collective rage would discount the rights of individuals: “Doing damage to the legal property of one’s countrymen … is extremely inappropriate.” A more caustic version of the same sentiment was tweeted to Sina Weibo on Saturday morning by a Tianjinbased user of the service: In my opinion, our nation has forever held on to the notion that the national interest is higher than the individual interest … We take it on faith that we must risk our lives fighting against others, although “others” here may mean Chinese people who have finally saved enough money to buy a Japanese car, or who work hard in a Japanese restaurant. Indeed, as China’s violent weekend intensified and then reached its smoking conclusion, online commentary began to reflect on what factors could have led to the collective destruction of property that – in the end – would only serve to harm the Chinese people. As Monday arrived, news came that several Japanese-owned factories would remain closed in the wake of the protests, inflicting pain on an economy that’s slowing considerably. On Sunday afternoon, Ying Lifeng, a reporter with the Zhujiang Evening News in Guangdong Province tweeted one possible conclusion: I just want to say that, for years we were educated to put national and collective interest above personal interest. Individualism and liberalism were derogatory terms. We had no love for humanity, and we never lacked in hatred. If you grow up under circumstance like that, violence will be the inevitable result of stimulating the people’s patriotism. There’s no guarantee that China’s self-interested, middle-class Toyota owners will be any more humane than those who throw trash cans through Toyota windshields. But, for now at least, they’re representative of those most likely to moderate the collectivist impulses that have proved so damaging to China over the last half-century. Bloomberg View
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September 20, 2012 business daily | 15
OPINION Business
wires Leading reports from Asia’s best business newspapers
For whom Syria tolls Dominique Moisi
Founder of the French Institute of International Affairs (IFRI) and a professor at Institut d’études politiques de Paris
Business Times Malaysia’s Business Confidence Index (BCI) for micro, small and medium enterprises dropped to 59.5 points in the second quarter this year, from 62.7 points in the first quarter. According to Hong Kong-based market research Radar Global, 90 percent of respondents were positive about their own company’s financial prospects, but only 36 percent was positive about the country’s economy over the next 12 months. The second quarter results also revealed a slight decline of BCI in India, Malaysia, China and Thailand.
Daily Tribune The Philippines government expects to boost its revenues from call centres to nearly US$15 billion by 2016, sustaining its three-year lead over rival India. The country already hosts global giants Accenture, Convergys, IBM, NTT Docomo and Hinduja. The sector passed India in revenue terms in 2009 and in manpower terms in 2010, according to industry figures. Revenues this year are projected at US$8.4 billion with 493,000 people employed. Employment is expected to rise to 862,000 people by 2016.
VnEconomy Vietnam’s residential market will continue to be sluggish in the first half of 2012 given the government’stighteningmonetary policy and the ongoing turmoil in global financial markets. The government’s tightening of monetary policy against a backdrop of high interest rates and capital shortages presented a range of obstacles for developers and buyers alike. Back in 2008 FDI into the real estate sector set a record US$23 billion but it then fell sharply to just US$7.4 billion in 2009 and US$6.84 billion in 2010.
Korea Hearld South Korea will sharply increase the budget intended to provide more support and incentives for foreign businesses interested in investing in the country. The government will set aside 300 billion won (US$268.1million) for next year, which will be used exclusively to attract foreign investment. The amount is up 36.1 percent from US$220.5 billion for this year. It will also designate up to 12 more zones where the government provides diverse incentives such as tax benefits and the provision of cheaper land for foreign investors.
W
i t h e v e r y passing week, the Syrian conflict increasingly resembles the Spanish Civil War. The images of warplanes bombing civilians and destroying cities have turned Aleppo into a latterday version of Guernica, immortalised in Picasso’s masterpiece. But the real similarities between the two conflicts are to be found in the behaviour of the international community’s main actors, which have again taken opposite sides. On one side stand Russia and Iran, cynically determined to buttress President Bashar al-Assad’s regime. On the other side stand the established democracies, hesitant and ambivalent in their support of the rebels. In 1930’s Spain, of course, Nazi Germany and Fascist Italy fully supported General Francisco Franco’s rebellion, while the democracies reluctantly offered scant help to the Spanish Republic.
The more the West waits, the more radicalised the rebels will become, weakening the standing and influence of moderate forces
There are even deeper similarities. Many argued at the time that support for republican Spain meant helping the far more dangerous anarchists and Communists at a time when the Soviet threat in Europe was growing. In that sense, yesterday’s Reds have become today’s “fundamentalist Muslims.” Indeed, for many nowadays, helping the Syrian rebels is too risky, and might
even jeopardise the Middle East’s Christian minorities. While the Syrian regime is odious, they argue, the choice is between a hypothetical hope of democracy in the Muslim world and the real risk of endangering Christians’ lives. Unfortunately, therefore, one must choose the status quo. Of course, Western vacillation reflects deeper strategic and diplomatic factors as well. Indeed, by shooting down a Turkish warplane that wandered into Syrian airspace, Assad’s regime intended to deliver a clear message to the international community: “Stay out of Syria’s domestic affairs.”
After Lybia Syria is not Libya, and the political context has changed significantly, with America’s presidential election approaching and a deepening economic crisis in Europe. Rightly or wrongly, Russia and China believe that the time has come to take their revenge over an arrogant West that deceived them about the true purpose of “humanitarian intervention” in Libya. This time, they hold the better cards. At a time when U.S. President Barack Obama is basing his campaign partly on his withdrawal of American troops from Iraq and his plan to do the same in Afghanistan, he cannot take the risk of intervening in Syria. Meanwhile, the European Union is fighting for its survival, and cannot devote its energies to an uncertain battle. For the West, the timing of the Syrian rebels’ uprising could not have been worse. But, despite deep divisions among the rebels, the cost of Western indifference is probably higher than the risk of intervention. The international community can no longer hide behind the pretence of ignorance. It lost its innocence decades ago. When faced with the slaughter of civilians, it can no longer pretend that it does not know. But, beyond ethics, there are geopolitical considerations. With the Arab world in the midst of upheaval, what message does the West want
to send? And, with global power in flux, what message is the West sending to the authoritarian regimes that are backing Assad? These regimes can only read the West’s dithering as a green light for their cynical agendas. This is particularly problematic in the case of Iran. The less determination the West demonstrates in Syria, the more the Iranians become convinced that they can play with the international community’s nerves and patience indefinitely.
Costly inaction As Russia and Iran continue to send money and weapons, if not military advisers, to Syria, it is impossible to persist with hypocritical language that can be interpreted only as a formula for inaction. Threatening the Syrian regime with “terrible consequences” if it were to use chemical weapons means only one thing: “Bomb your civilians at will, but use only conventional munitions.” The time has come to supply the rebels with what they desperately need: anti-tank and surface-to-air missiles. Of course, such a choice carries risks. Do we know the people we would be helping? After all, such weapons could be turned against the West one day, as they have been in Afghanistan. And, by involving ourselves militarily in the conflict, even
if only by supplying the rebels, we might give a propaganda boost to terrorist groups that are already willing to strike in the West. Nevertheless, the risks of passivity, indecision, and incoherence are even greater. The more the West waits, the more radicalised the rebels will become, weakening the standing and influence of moderate forces. The logic of intervention goes through cycles. In the aftermath of the Rwandan genocide and the subsequent refugee crisis and war in the Great Lakes region of Central Africa in the 1990’s, a combination of guilt, economic prosperity, and America’s unique international status led to interventions in Kosovo, Afghanistan, and, unfortunately, Iraq. Today, we are in a completely different cycle, dominated by the ghosts of Iraq, the global economic crisis, and the (relative) decline of the West. When it comes to intervention nowadays, respect for legality has overcome the concern for legitimacy that prevailed a decade ago. We have gone from one extreme to the other, whereas a middle road would be wiser. But, above all, let us not forget the lessons of the Spanish Civil War. It is always dangerous to give the impression of being the first to blink when facing authoritarian regimes. © Project Syndicate
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business daily September 20, 2012
CLOSING Publishers in EU antitrust settlement
Philippine mining freeze costs millions
Apple Inc. and four major publishers have offered to let retailers such as Amazon.Com Inc sell e-books at a discount, in a bid to end an EU antitrust investigation, the European Commission said yesterday. EU regulators have been investigating Apple’s e-book pricing deals with Simon & Schuster, News Corp unit HarperCollins, French group Lagardere SCA’s Hachette Livre, Verlagsgruppe Georg von Holtzbrinck, which owns Macmillan in Germany, and Pearson Plc’s Penguin group. Apple and the publishers, with the exception of Penguin, have offered to settle with the Commission, which began its inquiry last December.
The Philippines is losing hundreds of millions of dollars in mining investments amid a government freeze on new projects, Chamber of Mines of the Philippines president Benjamin Romualdez said yesterday. Ten billion pesos (US$239.5 million) in investments were pulled from the sector last year after a moratorium on new projects was introduced. He said another two billion pesos in investments planned for this year would also not occur as the freeze continued. Aquino issued the freeze on new projects at the start of 2011 as he undertook a major review of the industry.
Genting unexpectedly cuts stake in Australia’s Echo Move seen as an opportunity for rival Packer to take over Sydney’s casino operator
S
outheast Asian gambling group Genting unexpectedly put up for sale almost half its near 10 percent stake in Australia’s Echo Entertainment Group Ltd, in a move that may allow rival Crown Ltd to close in on Sydney’s only casino operator. The two firms have been circling Echo for its Sydney Casino, which attracts scores of Asian high rollers. Genting Singapore PLC said it was selling 39.6 million Echo shares at A$3.99 each, a 2.7 percent discount to the closing price of A$4.10
yesterday. That values the stake at around A$158 million ($165.05 million). “This comes after a review by the company to rationalize its investments portfolio. The disposal is not expected to have any material effect on earnings per share for the current financial year,” Genting said in a statement. An exit by Genting opens the door for Crown, controlled by Australian billionaire James Packer, to increase its stake in Echo. Crown, which owns a 10 percent share in Echo,
has sought regulatory approval to boost that holding to 25 percent. “The market, looking at the share price, welcomes this (move). People didn’t understand what the strategy could be in Australia,” said Lucius Chong, an analyst at CIMB Research. “This removes a lot of uncertainty because Genting is good at building casinos, looking at emerging growth, whereas Australia is a mature market,” Chong said. Malaysian-based parent Genting Group built its stake
Genting was recently looking to increase its Echo shares
through its subsidiaries in Singapore and Hong Kong in June, sparking talk of a potential bidding war. Genting had also sought regulatory approval to increase its holding. It was not clear whether
India may roll back diesel hike to save coalition Regional ally withdrawal will result in loss of parliament majority
I
ndia’s crisis-torn government looked set to offer a limited rollback of its hike in diesel prices yesterday after a key ally withdrew from the coalition, reducing it to a minority administration and raising the risk of an early election. Prime Minister Manmohan Singh’s government is widely expected to survive the blow to its parliamentary strength, but its new dependence on regional parties averse to reform will reduce its room for further steps to revive economic growth. Mamata Banerjee, the firebrand chief minister of West Bengal state, announced on Tuesday that she was pulling her party out of the coalition after Mr Singh stood firm on a slew of economic reforms, including the opening of India’s retail sector to global supermarket chains. But a concession to pull her back from the brink before a Friday deadline appeared to be on the cards after an emergency meeting at Singh’s residence.
Indian PM is trying to renew the reform drive
A senior source in his Congress party said the government was considering a partial reduction in last week’s 12 percent increase in diesel prices, which economists had long called for to rein in subsidies that have blown out the budget deficit. A government official said
the hike of 5 rupees (9 cents of US dollar) per litre could be pegged down to 3 or 4 rupees, and a new limit on the consumption of subsidised cooking gas cylinders may also be raised. However, congress party leaders said there would be no U-turn on allowing
investment from foreign retail chains such as Wal-Mart Stores into the retail sector. “The government is not in a mood to relent (but) ... there could be some cosmetic rollback,” one party leader told Reuters. If Ms Banerjee does pull her 19 lawmakers out of the
Genting has withdrawn the application. A spokesman for the regulator was not immediately available to comment on the matter. The offering will be underwritten by Citigroup. Reuters
ruling United Progressive Alliance (UPA), the Congressled coalition will be left with 254 seats in parliament, 18 short of a simple majority. “The beginning of the downfalloftheUPAgovernment has started,” said Ravi Shankar Prasad, spokesman of the main opposition Bharatiya Janata Party (BJP), amid speculation that the government may fall before its mandate runs out in mid-2014. While Mr Singh can count on two other regional parties outside the coalition to prop it up with a combined seat tally of 43, both are also opposed to retail liberalisation, which could once again endanger a policy that stalled last year amid street protests. The move on retail was among a series of “big bang” reforms launched last week. They are seen as crucial to reviving India’s flagging economic growth, reining in a bloated fiscal deficit and warding off the spectre of a credit rating downgrade. Mr Singh’s renewed drive for reform had cheered investors as a sign that the government was finally shaking off months of policy inertia. However, the measures sparked a furious backlash from Ms Banerjee and other political leaders, who condemned them as a needless attack on hundreds of millions of poor people. Reuters