Macau Business Daily, April 10, 2012

Singapore ponders money policy hold

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Photo by Manuel Cardoso

HK’s Tsang ‘concerned’ over property bubble

Year I | Number 7 | April 10 2012 Editor-in-chief | Tiago Azevedo Deputy editor-in-chief | José I. Duarte Macau | Hong Kong $ 6.00

Macau GDP nearly triples Macau’s economic output per person has almost tripled in the past decade despite a near doubling of the population. Data show Macau profited from a population increase much more than its regional rivals. Neighbouring Hong Kong saw its population grow by 11 percent between 1997 and 2010. But during that period Hong Kong’s GDP per capita dropped by five percent.

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Sky High Office prices set

12-year record O

Mainland inflation gathers pace Inflation rose last month in China. Consumer prices in the mainland were 3.6 percent higher in March than a year before, according to the country’s National Bureau of Statistics. Food-related costs rose 7.5 percent in March from a year earlier. But the acceleration is “most likely temporary”, and related to problems in the food supply chain caused by recent adverse weather says IHS Global Insight.

ffice prices in Macau are at the highest level since the territory’s handover to China in 1999, government data show. In February the average selling cost of an office was 6.1 million patacas (US$762,559). The previous record monthly average per transaction was MOP5.5 million set in December 1999. But the record February average is working from a small base. Figures released by the Statistics and Census Service last week show 23 offices were sold in February, and that’s more than one-third fewer than in January. In the much bigger market of neighbouring Hong Kong, 400 industrial and commercial properties were sold in February at an average price of HK$7.9 million according to research by property agency Centaline Commercial. Gregory Ku, Jones Lang LaSalle’s managing director in Macau, says Macau prices are likely to rise further, as companies opt to buy now while prices are still affordable, rather than paying ever higher rent in a buoyant rental market. “This is a trend of more sizable companies purchasing their own premises as they foresee the rents in Macau will go up in the long run and the current prices are still reasonable to them,” he told Business Daily.

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Gaming ops licence renewal ‘expected’ One person, one vote must be on the table in public consultation about Macau political reform says the Macau Civil Servants’ Association. A petition on the association’s website calls for “a schedule so that one day all legislators are elected by direct vote” in Macau. It also calls for a timetable on direct elections for the chief executive’s post.

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Democracy option urged by civil servants

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acau’s six casino operators have “contributed significantly” to the industry’s development, and are likely to have their gaming concessions and sub-concessions renewed when they expire early next decade, says the boss of Macau’s gaming regulator.

The licence renewal process

%Day

TAIWAN MOBILE CO

1.24

FORMOSA PLASTIC

0.71

COMPAL ELECTRON

0.15

LITE-ON TECHNOLO

0.14

CHUNGHWA TELECOM

0.11

CHINA DEVELOPMEN

-3.66

AU OPTRONICS COR

-3.81

FORMOSA PETROCHE

-3.92

HTC CORP

-6.84

HOTAI MOTOR CO

-6.94

Source: Bloomberg

is “already under analysis, not only by DICJ, but by the government at large,” Manuel Joaquim das Neves, Director of the Gaming Inspection and Coordination Bureau (DICJ), says.

Mr Neves added it would be “hard” for new operators to enter the market, but didn’t expand on the reasons.

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business daily April 10, 2012

MACAU

GDP triples in last decade as education levels soar

Per capita gross domestic product tripled in real terms since 2001, as population grew 78.3 percent

By Vítor Quintã vitorquinta@macaubusinessdaily.com

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acau’s per capita wealth has grown more than three-fold in the past decade, data from the Statistics and Census Service shows. The territory’s per capita gross domestic product jumped to 531,723 patacas (US$66,470) last year, up from 120,555 patacas a year in 2001.

The data is corrected for inflation.

In the same 10-year period, Macau’s population grew 78.3 percent, from 436,300 to an estimated 557,400 at December 31. The number of workers with a university degree has also tripled.

The data shows that Macau’s economy has benefitted from population increases much more so than its Asian competitors. Hong Kong, for example, saw its population increase by 11 percent between the handover and 2010. But during that period the city’s per capita GDP dropped by five percentage points.

The past six years have seen Singapore’s population grow by 15 percent and a policy to aggressively hire qualified workers from overseas has seen per capita GDP increase by 13 percent.

Chief Executive Fernando Chui

Sai On announced last month that a government planning body had started a study of Macau’s demographic policy and a public consultation would soon follow.

Mr Chui promised to launch a consultation on the city’s Demographic Policy Framework during last November’s Policy Address at the Legislative Assembly.

Macau’s decade of economic growth is undoubtedly linked to the opening up of the gaming industry in 2002, with the first Western-style casino, Sands Macao, starting operations in 2004.

Another significant factor is improved education. The number of workers with a university degree has more than tripled since 2001. At 87,100 last year, graduate account for about quarter of the workforce.

The number of workers who did not go to school or attended kindergarten only has declined from 21,400 residents to 14,000.

Workers who had only completed primary education accounted for 26.8 percent of the labour force in 2001. Ten years later, at 52,500, they account for just 15.4 percent of the workforce.

Contractors roll up sleeves as bureau approves work list The Land, Public Works and Transport Bureau names 199-strong list of approved contractors for public tender system

By Tony Lai tony.lai@macaubusinessdaily.com

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he Land, Public Works and Transport Bureau has released a shortlist of 199 firms on this year’s list of approved contractors.

The draw to create the list was carried out on March 30 and the results were announced yesterday.

The bureau established a system of tender-by-invitation for public work contracts in January 2010 to improve transparency in the department.

Public broadcaster TDM quoted legislator Mak Soi Kun as saying the government should raise the maximum limit of projects allotted through the system from 2 million patacas (US$250,000) to 10 million patacas. He also wants the government to include a mechanism to encourage contractors on the shortlist to keep their qualifications up to date.

Currently, public works are divided

into four categories: buildings; geotechnical, marine and hydraulic projects; urban infrastructure; and air-conditioning, fire prevention and electromechanical projects.

The projects are subdivided into three categories based on the estimated budget: more than 2 million patacas, between 500,000 and 2 million patacas, and below 500,000 patacas.

The president of the Macau Elevator and Escalator Engineering Professional Association, Tam In Wo, told TDM the categories are ideal for small and medium enterprises but. But he wants increased transparency surrounding the draw.

The government will carry out a second draw once all approved parties have received a contract. This year’s list includes 207 contractors, of which 195 have renewed their application and 12 are newcomers.

The government established a system of tenderby-invitation for public work contracts in January 2010

business daily April 10, 2012 | 3

MACAU

Office prices hit record high With companies looking to buy rather than pay high rents, the average price of an office rose to 6.1 million patacas in February

Photo by Manuel Cardoso

By Vítor Quintã vitorquinta@macaubusinessdaily.com

Most office transactions in February took place in NAPE area, says Gregory Ku, Jones Lang LaSalle’s managing director

B

uying an office in Macau is more expensive than ever before, official data indicate.

Figures released by the Statistics and Census Service last week show 23 offices were sold in February, more than one-third fewer than in January. Combined they fetched 141 million patacas (US$17.6 million), making the average price of an office 6.1 million patacas.

It is the highest figure since the Statistics and Census Service began collecting data a few months before the handover. The previous record was 5.5 million patacas, set in December 1999.

The introduction of laws to limit speculation in residential properties, including the Special Stamp Duty on the resale of new homes within two years of purchase, has pushed some investment into the office property market.

But Gregory Ku, Jones Lang LaSalle’s managing director in Macau, says the February figures are mostly from offices bought by end users in NAPE area buildings such as Dynasty and Golden Dragon Centre.

The prices ranged between “MOP3,000 to MOP3,500 per square foot,” he added.

In the final quarter of last year, the average price of office space reached a record of 38,404 patacas a square metre.

The average price has almost tripled since 2005, when it was 13,452 patacas a square metre.

And Mr Ku believes prices will only get higher as companies try to deal with higher rental for offices.

“This is a trend of more sizable companies to purchase their own premises as they foresee the rents

in Macau will go up in the long run and the current prices are still reasonable to them,” he told Business Daily.

Jones Lang LaSalle’s annual review of property says the capital value of office space rose by 35.5 percent last year, rising more than twice as fast as rental values, which rose by 16 percent.

“New set-up companies are keen for high-quality office buildings, creating momentum to push rentals higher,” Jones Lang LaSalle says in the review, published in February.

Macau has few high-quality, GradeA office buildings. Jones Lang LaSalle rates only the Bank of China

Key points • End users, not investors, boost office prices • Bigger companies buy up offices with rents set to rise • New companies search for high-quality offices • Nam Van Lake Lot A6 will add over 37,000 square metres of Grade-A office space this year

Tower, FIT Centre, AIA Tower, Landmark and No 39 Macau as Grade-A. No 39 Macau, in Avenida Almeida Ribeiro, was sold to overseas investors last May for HK$970 million.

“We expect to see new demand to continue to come from international retail brands and other services providers for the new gaming facilities,” said Mr Ku at the time.

“At the same time, government departments will remain the key source of expansion and relocation demand.”

Average price per sq. metre of office units sold/MOP

Government demand Private enterprise faces stiff competition for offices from the government, the city’s biggest tenant.

Even before Secretary for Economy and Finance Francis Tam Pak Yuen and Secretary for Transport and Public Works Lau Si Io moved their offices to the Bank of China Tower from the government headquarters last year, the government was paying MOP35 million a month for offices and commercial space.

Altogether 35 public-sector bodies were renting almost 140,000 square metres of office and commercial space from the private sector last September.

The Commission of Audit highlighted in 2009 the lack of rules for building, renovating or moving offices occupied by the government. It suggested guidelines for controls on floor areas, floor areas per head, specifications for interiors and car parks.

The government “should assess the allocation of office spaces in an integrated perspective, striking a bal-

ance between rented spaces and owned spaces, so as to protect itself from the market fluctuations and avoiding the inherent losses”, the commission concluded.

Last September Mr Ku said the development on Nam Van Lake Lot A6, scheduled for completion this year, would add more than 37,000 square metres of Grade-A office space to the city’s inventory, “relieving a bit the pressure of tight vacancy”.

The proportion of vacant office space dropped to 18 percent last year, the lowest in six years, from 24 percent the year before.

A trio of prime office buildings in the Bank of China Tower, Landmark and AIA Tower had occupancy rates above 90 percent last year.

Tenants included government bodies, banks, information technology enterprises, law firms and insurance companies.

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business daily April 10, 2012

macau

InBrief

Zero-fare tours on comeback trail “Zero-fare” tours seem to be back, despite curbs introduced by the tourism authorities last year. Reports in the news media say one online travel agent based in the mainland is offering a four-day tour to Macau and Hong Kong, worth up to 2,980 yuan (3,775 patacas), for just 1 yuan. The Hong Kong Travel Industry Council said it had discovered the reappearance of similar tours costing just HK$200 (206 patacas). The zero-fare tours have sparked disputes when tourists are forced into shopping excursions. The Macau Government Tourist Office and the China Tourism Administration signed an agreement last year to ban such practices.

Taiwan’s first research centre on Macau A Taiwan university has set up the island’s first research centre on Macau, in partnership with the Macau Foundation, Taiwan news agency CNA reported. The head of Chinese Culture University’s College of Social Sciences, Shaw Chong-hai, said Taipei could look to Macau for the development of gaming industries. The scholar, who was a visiting scholar at Macau Polytechnic Institute for a year, claimed 75 percent of the MSAR residents have never set foot in a casino and reports of gaming having a negative impact on residents’ lives are rare.

New leader named at Portuguese daily Portuguese-language newspaper Ponto Final unveils today Paulo Rego as its new editor-in-chief. Mr Rego has been a journalist since 1989 and first worked for Ponto Final in the 1990s, before becoming the coordinator of Macau Magazine, a monthly publication owned by the government’s media bureau. He has spent the past ten years working in a variety of jobs in Portugal and Macau, including stints in Lisbon reporting for Diário de Notícias and as editor-inchief of 24 Horas, a nation-wide daily newspaper. Returning to Macau in 2004, Mr Rego became the deputy director of Ponto Final, served as marketing director of Macau Business and Business Intelligence magazines, and as deputy director of the Lusa news agency.

Licence renewal ‘expected’ Macau’s gaming operators to have licences extended – regulator The licence renewal process for Macau’s six casino operators is ‘already under analysis,’ says the city’s gaming regulator

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acau’s six casino operators are likely to have their gaming concessions and sub-concessions renewed when they expire early next decade, says the boss of Macau’s gaming regulator.

The licence renewal process is “already under analysis, not only by DICJ, but by the government at large,” Manuel Joaquim das Neves, Director of the Gaming Inspection and Coordination Bureau (DICJ) told Macau Business magazine.

Asked whether the existing licensees and sub-licensees were likely to have their permissions renewed, Mr Neves replied: “It’s expected”.

He added it would be “hard” for new operators to enter the market, but didn’t expand on the reasons.

Since the passage of legislation in 2001 to open the Macau casino market to limited competition after a 40-year monopoly held by Stanley Ho Hung Sun and his business partners, the right to a Macau gaming licence has been for a fixed 20-year term. In theory all infrastructure such as casinos and hotels built by investors reverts to the Macau government at the end of the licence period. What will actually happen isn’t yet clear, but investors are anxious to know what the ‘end game’ is for the existing operators.

Without such clarity, the nearer the industry gets to the expiry dates, the harder it will be for operators to raise fresh debt or equity to pay for new casino projects or reinvestment

in existing ones.

Expiry The current permissions of Sociedade de Jogos de Macau and MGM China expire in 2020, and the other operators in 2022. Some gaming analysts have spoken of non-renewal risk in Macau. But Mr Neves’ comments appear to suggest that – barring an operator committing a dramatic breach of its licence conditions – the billions of dollars they have already invested in the local economy should act as an insurance policy for renewal.

The combined investment by the casino companies so far - in concrete and steel for new resorts and excluding new jobs created – is in excess of US$20 billion, close to half of that supplied by one company, Las Vegas Sands Corp. If as expected, a new round of resortbuilding from MGM China, MPEL, SJM and Wynn is allowed on Cotai in the next few years, then billions more will be pumped into the local industry.

“Any of the six gaming operators has contributed significantly for the industry’s development,” said Mr Neves.

“The entry of new players [operators] brought huge amounts of investment, better offering and nongaming diversification,” he added.

The fact that all gaming operators are listed on the Hong Kong stock market has also had a positive ef-

fect, said Mr Neves.

“It boosted the industry’s profile and transparency, and provided Macau residents with an avenue to also participate in the gaming sector’s success.”

Sub-concessions Technically there are only three gaming concessionaires in Macau –Galaxy Entertainment Group, Sociedade de Jogos de Macau and Wynn Resorts. Melco Crown Entertainment operates on a sub-licence purchased from Wynn, MGM China on a sub-licence bought from SJM, and Sands China on a sub-licence from GEG. The sub-concession system came about because Galaxy and Las Vegas Sands were originally going to be partners. After the Galaxy-LVS bid was approved in February 2002, LVS chose to go it alone. The government’s solution in December that year was to grant LVS a sub-concession of the Galaxy licence. The other licensees then approached the government and said they too should be granted sub-licensing rights, and the government agreed.

But Mr Neves indicated the decision to allow six operators has been beneficial for Macau and for the industry. “I am not sure if with only three operators the total level of investment would have been the same,” Mr Neves says.

The full interview is in this month’s edition of Macau Business.

MGM China hopes for Cotai land soon Only 12 percent of planned resort for gaming says boss

G

rant Bowie, chief executive of MGM China Holdings Ltd, says he is “working on the assumption” that the company will be granted one of only two Cotai land concessions expected from the Macau government this year. Three companies – MGM China, SJM and Wynn Macau – have each applied for a Cotai land grant with the hope it will be gazetted this year.

“We are working on that assumption [of a grant]. We are working very diligently to make sure not only that we have addressed the issues for the land concession, but that we are diligently working on enhancing, developing and finetuning our design for the project as well,” Mr Bowie told Macau Business in an exclusive interview. He also revealed that only 12 percent of the

floor space for MGM’s Cotai resort would be for gaming, in line with government aspirations to diversify the market from hardcore gambling.

“From our current drawings, gaming represents less than 12 percent of the floor space of the property. I think all of us gaming concessionaires are very clear and it has been very clearly spelt out to us all, on the need for us to diversify Macau as a world tourism and leisure destination,” said Mr Bowie.

Jaime Carion, director of the Lands and Public Works Bureau told the local media in early February that only two of the three Cotai land grant applications “could be approved within this year”.

Grant Bowie, MGM China Holdings Ltd

business daily April 10, 2012 | 5

MACAU macau

SJM boss defends satellite casinos No plans to drop sub-licensing despite government hints of a ban

S

ociedade de Jogos de Macau SA has “no plans” to end its controversial links with so-called satellite casinos – ones using an SJM gaming licence but majority-owned by outside parties – despite indications from the Macau government it may bar any more such deals.

“At the present time we have no plans to change these arrangements,” says Ambrose So Shu Fai, the chief executive of SJM Holdings Ltd, the holding company of SJM. Mr So made his comments in an interview with Macau Business to mark the 10th anniversary of SJM’s Macau operations.

SJM took over the gaming-related assets of Stanley Ho Hung Sun’s Sociedade de Turismo e Diversões de Macau SA, which held a 40-year gaming monopoly in the territory from 1962.

A peculiar feature of SJM is that although it currently has 17 casinos active in the market only three are directly managed by the company with full economic benefit going to SJM. They are Casino Lisboa, Grand Lisboa and Casino Oceanus at Jai Alai (Jai Alai, formerly managed individually, is now part of the Oceanus operation). The remainder are satellites where SJM and third parties share the revenue. This is in part a legacy of the monopoly days but Mr So says there are no plans to end the deals.

“We have evolved a workable formula for cooperating with third-party promoters, which accounted last year for around 54 percent of our gaming

revenue and about 24 percent of our earnings before interest, taxes, depreciation and amortisation,” he says.

In 2002 Mr Ho’s casino business, still without any competitor, raked in MOP22.18 billion (US$2.77 billion) in casino gross gaming revenue. Last year, SJM’s gaming revenue reached a record MOP77.8 billion.

Key Points March 2002 – Sociedade de Jogos de Macau and government sign concession contract valid until March 31, 2020 April 1, 2002 – SJM begins operating with 11 casinos February 11, 2007 – SJM opens Grand Lisboa casino July 16, 2008 – SJM Holdings Ltd listed on Hong Kong Stock Exchange December 15, 2009 – SJM opens Casino Oceanus Ambrose So Shu Fai, the chief executive of SJM Holdings Ltd

February 2012 – SJM submits Cotai resort plan to the government

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business daily April 10, 2012

MACAU

Mainland inflation picks up Food prices are driving up the mainland inflation rate and Macau may have to foot an increased food bill

By José I. Duarte jid@macaubusinessdaily.com

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onsumer prices in the mainland were 3.6 percent higher in March than a year before, rising faster than the median 3.4 percent estimate in a Bloomberg survey of 33 economists.

National Bureau of Statistics data show that food remains a big contributor to inflation, with foodrelated costs rising 7.5 percent in March from a year before. Likewise, vegetable prices surged by 20.5 percent, after increasing by 6.5 percent in February. The prices of meat and eggs climbed by 11.3 percent last month compared to the same time last year.

The acceleration in prices is “most likely temporary”, the result of unsuitable weather in a couple of vegetable-growing provinces, says IHS Global Insight analyst Ren Xianfang.

But the mainland also faces other inflationary pressures.

The prices of clothing and shoes rose by 3.8 percent last month, compared to a 0.8 percentage point increase in March last year. An economist in Hong Kong with Macquarie Securities Ltd., Paul Cavey, said this was a sign of underlying wage pressures.

Shanghai has followed Beijing and Shenzhen in announcing an increase in its minimum wage this year as policymakers seek to spur consumer spending. At the same time, the amount of surplus labour is shrinking, also pushing up wages.

The government of the mainland’s financial hub and most af-

fluent city will raise the minimum wage by 13 percent to 1,450 yuan (US$230) a month.

Petrol and diesel prices were increased on March 20 for the second time in less than six weeks, after the price of crude oil had its biggest monthly gain in a year. For the world’s No. 2 consumer of oil, that means additional pressure on prices.

Watching before acting The mainland authorities will be re-assessing the use of expansionary tools. The economic environment in the mainland is likely to limit the policy options available to them.

The People’s Bank of China cut the reserve requirement for banks on February 24 for the second time in three months, pumping more liquidity into the financial system.

Analysts interviewed by Bloomberg last month unanimously forecast more cuts to reserve requirements this year, and nine of the 20 surveyed predicted lower benchmark interest rates.

But Goldman Sachs Group Inc. said in an emailed note yesterday that higher-than-expected annual inflation last month might limit the central bank’s loosening of monetary policy. That, in turn, may mean an extra push to strengthen the yuan.

The Australia and New Zealand Banking Group Ltd. head of economics for the Greater China region, Liu Li-Gang, said the hope was that annual growth might ac-

celerate to 8.9 percent or 9 percent in the second quarter. As the economy responds to previous easing of monetary policy and improved demand from the United States and Europe, so the constraints on monetary policy may ease.

Premier Wen Jiabao said last month that the government aims to keep annual inflation in consumer prices to about 4 percent or less this year, taking into account the risks of inflation being imported and the rising costs of land, labour and capital.

Mr Wen also pledged to change the way the prices of electricity and fuel are set, to better reflect their true costs.

These developments will be observed with special concern in Ma-

cau. The increasing economic integration of the cities in the Pearl River Delta means Macau’s economy will inevitably be affected.

Local residents may have to foot further increases in their bills as food prices in the mainland rise and, perhaps, the yuan strengthens. The city already faces its own inflationary pressures as fuel prices, rents and labour costs rise.

But the mainland authorities will be inclined to err on the side of prudence rather than risk feeding inflation. This means cautiously weighing expansionary policies against price trends, at least until prices slow their upward trend.

This may slightly dampen the effects of imported inflation.

With Bloomberg

CNCPIYOY Index 7.0

5.8

4.6

3.4

2.2

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January 2010

March 2012

Weather Beijing 20/11o C Changchun 19/1 o C

Harbin 15/-3 o C

Xian 27/9 o C Shanghai 23/18 o C Chengdu 26/17 o C Kunming 14/4 o C Haikou 30/22 o C Sanya 31/25 o C

Guangzhou 28/21 o C

MACAU (9-14 April) Day

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ASIA (today)

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Manila

Macau 25/20 o C

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Jacarta

32/26 C

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18/8o C

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taipei

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business daily April 10, 2012 | 7

MACAU

Civil servants want direct elections roadmap Macau Civil Servants’ Association posts petition on its website demanding change as public consultation on electoral reform continues

By Cláudia Aranda claudia.aranda@macaubusinessdaily.com

T

he ongoing public consultation on political reform should focus on establishing a roadmap for the direct election of all legislators and the chief executive, says the Macau Civil Servants’ Association.

A petition published on the association’s website calls for “a schedule so that one day all legislators are elected by direct vote”. It also calls for a timetable to introduce direct elections for the chief executive.

The association, led by legislator José Pereira Coutinho, compares the city to Hong Kong, which already has a deadline of 2017 set for the direct election of its chief executive.

Twelve years after the handover in Macau, “the criteria and rationale for the choice of legislators appointed by the chief executive are still not known,” the petition says.

Secretary for Administration and Justice Florinda da Rosa Silva Chan has said the National People’s Congress does not have “the power to change the laws on a view beyond the 2013 and 2014 elections”.

Deputy secretary-general of the National People’s Congress Standing Committee Qiao Xiaoyang said last month the Basic Law ruled out Universal Suffrage to elect the Legislative Assembly, but the option remained a possibility for selecting the chief executive.

For the election next year, the civil servants’ petition calls for replacing four chief executive-appointed seats with four popularly elected seats. The assembly’s size would

Civil servants’ petition calls for replacing four appointed seats with four popularly elected legislators

stay the same at 29 seats.

The petition says only 12 legislators are directly elected by Macau residents, though the Basic Law states that all permanent residents shall have the right to vote and stand for election.

The second round of consultation on electoral reform takes place until April 23, with the last public session scheduled for Sunday.

A consultation document released by the government suggests increasing the number of both directly and indirectly elected legislators, either by two seats or by one more seat for each.

The proposals do not change the status quo, or make the Legisla-

Smoother sailing on yachting agenda

T

he government will seek to increase the number of yacht births if demand increases, Maritime Administration director Susana Wong Soi Man said last week at a Macau-Japan Chamber of Commerce meeting.

She also pledged to work with officials in Guangdong and Hong Kong to develop better regulation for pleasure craft sailing the Pearl River Delta, a government press release said.

A representative from the chamber said promoting individual travel by sea would benefit the city’s tourism industry. Simplifying paperwork and increasing births would raise Macau’s status as a centre for holidaymakers.

Ms Wong said Macau would develop as an important centre for sailing.

She stressed the simplicity for yachts wishing to dock in Macau, saying there was only a simple form required.

C.L.

tive Assembly more representative of the population, the petition says.

That damages oversight and creates an environment where corruption might flourish.

The government has suggested an increase from 300 to 400 members in the electoral committee that

elects the chief executive in 2014, but the association wants to double the number to 600.

“The 300 members of the electoral commission to choose the chief executive are clearly insufficient and likely to (lead to) electoral manipulation,” the petition says.

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business daily April 10, 2012

GREATER CHINA Beijing sets up rare earth body

Taiwan shipments abroad fell 3.2 percent from a year earlier

C

hina has set up a rare earth industry group, the government said yesterday, in a bid to streamline the sprawling sector and fend off complaints about Beijing’s seemingly monopolistic control.

The United States, European Union and Japan last month lodged a complaint with the World Trade Organization, saying China was choking off exports of rare earths to unfairly benefit domestic industries.

China, a producer of more than 95 percent of the world’s rare earths - which have a wide range of applications in the military and technology sectors in particular - has set output caps and export quotas on the coveted resource.

The Association of China Rare Earth Industry, composed of 155 members, was set up Sunday in Beijing, the Ministry of Industry and Information Technology, which supervises rare earth development, said in a statement.

Vice industry minister Su Bo said the group would promote “healthy development” of the sector and urged firms to strictly follow government production plans, according to the statement.

China has defended its management of the rare earth industry, saying its measures aim to limit harm to the environment from excessive mining, while meeting the country’s surging domestic demand.

Separately, the new head of the industry group said the association would “properly” handle trade disputes, the official Xinhua news agency said, but gave no further details.

Gan Yong who is also an academic at the Chinese Academy of Engineering, said the group would create a “reasonable” price mechanism, according to the report.

Members of the group include industry giants like China Minmetals and aluminium producer Chalco.

China has set its 2012 export quota for rare earths at around 30,000 tonnes, roughly the same level as 2011.

Agencies

Taiwan exports fall in March

By Chinmei Sung and Ailing Tan

T

aiwan’s exports fell in March as a growth slowdown in China and the debt crisis in Europe hurt demand for its electronics products.

Shipments abroad fell 3.2 percent from a year earlier, compared with a 10.3 percent gain in February, the Ministry of Finance said in Taipei yesterday.

The median of nine estimates in a Bloomberg News survey was for a 4.5 percent decline.

China’s economy expanded last quarter at the slowest pace in almost three years, accord-

ing to the median estimate in a Bloomberg News survey, crimping demand for Asian goods as Europe’s debt crisis also saps purchases.

Taiwan cut its 2012 growth forecast to 3.85 percent in February, and the central bank left interest rates unchanged for a third meeting in March.

Weak exports in the first quarter “increases the chance that real GDP could have the third sequential contraction,” Cheng Cheng-Mount, a Taipei-based economist at Citigroup Inc., said before the report. Over-

seas sales growth may return to positive territory in the second quarter, he said.

The value of exports, equivalent to about two-thirds of Taiwan’s economy, rose to US$26.34 billion in March from US$23.41 billion in February, today’s report showed. Imports fell 5.8 percent for a trade surplus of US$2.36 billion.

Shipments to China fell 7.1 percent from a year earlier. Exports to Germany declined 30.4 percent and those to the U.S. slipped 8 percent.

Bloomberg

business daily April 10, 2012 | 9

GREATER CHINA

InBrief HK insurers unable to fill void in Iran oil cover Mainland to build up insurance mechanisms

Hong Kong maritime insurers will not provide full cover to tankers carrying Iranian oil after new sanctions take effect from July

By Randy Fabi

A

s more and more insurers confirm they will soon halt or sharply reduce coverage to tankers operating in Iran, China’s government may need to step in and take on the risk to ensure Iran’s largest oil buyer receives its contracted supplies, said Arthur Bowring, managing director of the Hong Kong Shipowners Association.

From July, Hong Kong maritime insurers will not provide full cover to tankers carrying Iranian oil after EU new sanctions take effect, the senior industry official told Reuters.

Bowring’s comments come days after officials at China’s P&I club, which covers more than 1,000 ships, told Reuters the insurer would not extend cover to tankers carrying Iranian oil when the new EU sanctions come into force.

Hong Kong insurers have a much more international clientele than their mainland Chinese counterparts, with many European firms having offices there.

“For the liability coverage that we now need, the reinsurance is essen-

tial and that comes from the international market, which of course is affected by the sanctions,” said the head of the Hong Kong Shipowners Association, whose members as a whole own nearly 2,000 ships.

The association does not represent Hong Kong maritime insurers.

“State-provided cover is the only other alternative, but this could also be difficult in a claim situation, especially if the amounts are in U.S. dollars,” he added.

Prices up A combination of U.S. and European sanctions against Tehran have significantly hindered the ability of Iran’s oil customers to continue the financing, purchase and transportation of the OPEC member’s crude.

Growing pressure by the West has led some Iranian oil buyers to cut imports, but the problem over obtaining maritime insurance could altogether halt shipments to Asian customers.

Concerns over the disruption to Ira-

HK’s Tsang ‘concerned’ over property bubble

H

ong Kong Financial Secretary John Tsang said he’s ready to step in if there are signs of overheating in the property market and warned property buyers not to “blindly” follow the market.

“I remain highly concerned about the risk of a price bubble” as the low interest environment persists, Tsang said in a Chinese-language blog posting on a government website on Sunday.

Hong Kong’s housing prices rose more than 70 percent between the start of 2009 and mid-2011 on record low mortgage rates and an influx of mainland Chinese buyers.

Prices have risen almost 4 percent this year, after falling about 5 percent in the second half, according to an index compiled by Centaline Property Agency Ltd.

His warning also came as the price of second-hand flats on Hong Kong Island hit record levels, surpassing the peak reached during the 1997 property bubble.

Buyers shouldn’t believe that property prices will only rise and never fall, Tsang said in his official blog.

The outgoing finance chief said there were two “unusual forces” behind the rise, “an environment of super-low interest rates and plentiful liquidity in the system”. He also said the global financial crisis had made the market’s future “highly uncertain”.

The government is “determined” to increase land supply and will continue with measures to maintain stable home prices, Tsang said in a February 1 annual budget address.

Agencies

nian oil supplies have helped drive global crude prices by more than 13 percent so far this year to above US$122 a barrel.

For the maritime industry, European insurers and reinsurers will be banned from indemnifying ships carrying Iranian crude and oil products anywhere in the world, in line with sanctions on Tehran.

Although many Asian ship insurers, like China and Japan’s P&I clubs, do not fall under the sanctions regime, they are largely dependent on the European reinsurance market to hedge their risk.

“Some of our owners have problems with long-term (shipping) contracts that do not expressly exclude the effects of regional sanctions, which puts them in a difficult position of having to trade but not being able to due to a lack of insurance,” Bowring said.

Japan and South Korea have lobbied for exemptions to the EU sanctions, but insurance and shipping executives say a complete ban now looked likely.

Reuters

China will strengthen supervision of its insurance industry over the next three to five years to guarantee the ability of insurers to pay compensation, the official China Securities Journal reported yesterday. New mechanisms will strengthen insurers’ capital adequacy supervision, risk management and information disclosure to ensure they retain good financial condition and can pay claims on time, the newspaper said. While details are still being discussed, the targets were clearly stated in a document issued recently by the China Insurance Regulatory Commision, it said.

Chinese shares drop led by property firms China stocks fell 0.9 percent yesterday, led by property firms, after data showed the inflation rate rose more than expected last month, prompting speculation that Beijing may delay further easing of monetary policy. The Shanghai Composite Index ended at 2,285.8, breaking through the 2,300 level, after rising 0.2 percent on Friday.

Property developers underperformed, with the sub-index dropping 1.4 percent. Shares in China Vanke, the country’s largest real estate developer by sales, fell 1.9 percent while Tieling Newcity Investment Holding slumped 8.7 percent.

Coal output up 5.8 percent China’s coal output increased 5.8 percent from a year earlier to 838 million tonnes in the first quarter of this year, the official People’s Daily reported yesterday, citing comments from Wang Xianzheng, head of the China Coal Industry Association.

National coal inventories stood at 223 million tonnes at the end of March, the newspaper report said. Coal stocks in major power plants were 76.68 million tonnes at the end of last month, enough for 19 days’ power generation, the report added.yesterday.

Brokers plan outward investor rules The Securities Association of China asked regulators to let some domestic investors trade foreign stocks and bonds directly, the Securities Times reported yesterday, without saying where it got the information. Under the new plan, securities companies with a Qualified Domestic Institutional Investor, or QDII, licence would be allowed to broker direct transactions by qualified Chinese investors in overseas capital markets using investment quotas granted under the QDII program, the Chinese-language newspaper reported.

10 |

business daily April 10, 2012

ASIA

Singapore might keep monetary policy on hold

By Kevin Lim

S

ingapore’s central bank is expected to keep monetary policy on hold on Friday and allow the local dollar to rise at a “modest and gradual” pace against other currencies to help combat persistent inflationary pressures.

All 16 forecasters polled by Reuters expect the Monetary Authority of Singapore (MAS) to stand pat when it issues its half-yearly policy statement, keeping the Singapore dollar on its upward path with no change to the pace of appreciation.

“With growth momentum likely to be stronger and inflation more sticky than what policymakers have previously anticipated, the MAS will most likely maintain its current policy stance,” DBS economist Irvin Seah said in a note yesterday.

He added MAS will likely hold off tightening policy further as local manufacturers are already struggling with higher labour costs and will be hard hit if the Singapore dollar is allowed to rise at a faster pace.

Singapore manages monetary policy by letting its dollar rise or fall against the currencies of its main trading partners within an undisclosed trading band.

At its last policy announcement in October, MAS reduced the slope of the policy band, essentially slowing the pace of Singapore dollar appreciation to take into consideration the slowing economy and an easing in inflationary pressures.

MAS has since conceded that price pressures have been more persistent than expected.

Singapore’s inflation rate slowed to 4.6 percent in February from a year earlier, but remained elevated, while exports and tourism data for January and February have come in stronger than expected and manufacturing activity likely expanded for a second straight month in March.

The Singapore dollar - the world’s 12th most actively traded currency - has gained around 3 percent against the U.S. dollar so far this year and is currently trading around 1.2605 to the greenback.

Most traders believe the Singapore dollar is currently trading at or slightly above the midpoint of the trading band.

Several economists, including DBS and Credit Suisse, predict that Singapore may have to raise its official forecast of 1-3 percent economic growth and inflation

Monetary Authority of Singapore expected to stand pat when it issues its half-yearly policy statement on Friday

Singapore dollar may keep its upward path with no change to the pace of appreciation

of 2.5 percent to 3.5 percent for 2012.

MAS in October also left its wider-than-normal policy band unchanged, allowing the Singapore dollar to trade in what economists believe is a range of plus or minus 3 percent from the midpoint.

With the exception of Bank of America Merrill Lynch, which predicts MAS will narrow the trading band as currency markets are no longer as volatile, economists believe MAS will leave the band unchanged to allow itself greater flexibility in manag-

ing the Singapore dollar.

Nomura, whose base scenario is that the Singapore will stand pat on policy, said there was a 40 percent probability that MAS could surprise the market by tightening policy this week.

Reuters

Seoul shares touch one-month low

By Joonhee Yu

S

eoul shares plunged to a onemonth low yesterday, tracking sharp declines in Asian peers as a weaker-than-expected U.S. jobs data raised concerns of stuttering growth in the world’s largest economy.

The Korea Composite Stock Price Index (KOSPI) was down 1.29 percent at 2,002.79 points, after briefly dipping below the psychologically significant 2,000 point

level to touch a one-month intraday low.

“Technology and auto heavyweights had been dragging the index higher recently on positive earnings momentum, but they were hit hard by the latest signs of a slowdown in the U.S. economy, depriving the market of a key source of steady support,” said Lee Jin-woo, an analyst at Mirae Asset Securities.

On Friday, data showed U.S. payrolls grew by 120,000 in March, far below the expected gain of 203,000 jobs and the smallest increase since October.

Samsung Electronics fell 1.3 percent while Hyundai Mobis declined 2.2 percent.

Financial shares were battered by dashed risk appetite. Woori Finance Holdings fell 3.5 percent while KB Financial Group Inc de-

clined 3.6 percent.

The market is expected to find strong technical support near the 2,000 point level, according to Lee. “The index is still seen comfortably sheltered inside the 1,950-2,050 range. If investors don’t buy at the 2,000 point level, the March-low of 1,966 will represent the absolute downside barrier,” he said.

Reuters

business daily April 10, 2012 | 11

ASIA

InBrief

Genting Singapore to issue perpetuals Casino operator Genting Singapore PLC said yesterday it plans to sell S$500 million (US$397 million) worth of perpetual subordinated capital securities. Genting Singapore Plc will pay 5.125 percent yield on its S$500 million of perpetual bonds, according to the company’s Chief Financial Officer Lee Shi Ruh. The note will be marketed to individual investors between today and April 16, and Genting has the right to increase the size of the offering to S$700 million, Lee said.quarter, it said.

Sri Lanka may top US$1.2 bln surplus

Sony to axe 10,000 jobs

Sri Lanka could swing to a surplus of US$1.2 billion in its balance of payments this year on higher exports and a doubling in foreign investment, the central bank said yesterday.

That would mark a big reversal from last year’s deficit of US$1 billion, created in part after the central bank spent more than US$2.7 billion in the second half trying to stem depreciation pressure on the rupee.

Japan’s Sony Corp to cut about 6 percent of its workforce as it tries to get back to profit after four years in the red

S

ony will cut 10,000 jobs worldwide this year as it attempts to carry out sweeping reforms aimed at reviving the iconic but loss-making Japanese electronics giant, the Nikkei business daily reported yesterday.

About half the planned job cuts are part of a restructuring of Sony’s chemical unit as well as operations tied to its small and medium-sized liquid crystal display panels, the Nikkei said.

The company’s top seven executives, including its outgoing chief, would also give up their annual bonus, it added without citing sources.

The report did not give further details of the reductions from Sony’s headcount which stood at about 168,000 employees as of March last year.

The report comes after Sony shed its Welsh-born US chief executive Howard Stringer - replaced by his protege Kazuo Hirai - and said it expected to lose a whopping 220 billion yen (US$2.7 billion) by March for a fourth consecutive year in the red.

A spokesman for Sony declined to comment on the report, as ‘s new chief is due to hold a press conference on Thursday.

“Under a new CEO, it’s easier to cut jobs or go in a new direction,” Yuuki Sakurai, head of fund manager Fukoku Capital, told Reuters.

“One of the things I’d like to see is

that they shift their resources to other areas outside TVs ... If they stick to TVs, they may have to fight a war they may not be able to win.”

Sony said last month it would sell part of a chemicals and devices subsidiary that makes films and adhesives used in televisions, cameras and mobile phones to state-backed Development Bank of Japan Inc. The division, which has several thousand employees, accounts for only a small fraction of Sony sales, but the move was widely seen as the first of many changes aimed at reshaping the company.

Industry analysts have said Sony must usher in major reforms amid fierce overseas competition and continuing losses at its mainstay

television business. It still generates substantial profits from electronics parts.

Sony has blamed tough competition, falling prices, slow demand, the impact of severe flooding in Thailand last year, and the high yen for its weak balance sheet.

Credit rating agencies Moody’s and Standard & Poor’s both downgraded Sony earlier this year, citing its struggle with the TV operation, among other factors.

The job cuts are the latest downsizing in Japan Inc where companies from tech names NEC Corp and Sumco Corp to brokerage Daiwa Securities are trimming costs to revamp their businesses.

Agencies

Japan’s account back to surplus Japan’s current account balance swung back to a surplus in February after marking a record deficit the previous month, as improvement in exports added to steady income gains from overseas investments.

While recovery in exports is likely to be slow, analysts expect Japan’s current account balance to stay comfortably in surplus on steady income gains from past overseas investments. Japan logged a current account surplus of 1.1778 trillion yen (US$14.30 billion) in February.

Sony climbs Sony shares closed up 0.6 percent yesterday

Sony Corporation (Japan)

(6578 JP)

JPY 1660 1644 1628 1612 1596

Source: Bloomberg

April 9

1580

S.Korea won down on debt worries The South Korean won slipped on Friday, dampened by renewed worries about the euro zone countries’ fiscal standing and expectations that foreign investors will repatriate their dividend payments from local companies. The won was quoted at 1,131.7 against the dollar at the end of local trade, compared with Thursday’s close of 1,127.3. But the won still recorded its second consecutive week of gains.

12 |

business daily April 10, 2012

MARKETS Ticker NAME

Hang SENG INDEX Ticker NAME

PRICE

388

HONG KONG EXCHNG

5

HSBC HLDGS PLC

13

HUTCHISON WHAMPO

PRICE

Day %

VOLUME

(H) 52W

(L) 52W

130

-0.6875477

2042041

186.5

99.15

68.75

-1.221264

11000498

85.35

56

76.1

-2.059202

9379421

94.2

53.6

Day %

VOLUME

(H) 52W

(L) 52W

28.15

0.3565062

32317856

29.9

19.84

1398

IND & COMM BK-H

5.03

-1.565558

240403948

6.75

3.46

3.7

-0.2695418

24191012

7.8

3.2

494

LI & FUNG LTD

17.22

-4.013378

28583677

20.575

10.82

1299

AIA GROUP LTD

2600

ALUMINUM CORP-H

3988

BANK OF CHINA-H

3.15

-1.5625

257060675

4.5

2.2

66

MTR CORP

27.15

-0.7312614

2300167

29.1

22.45

3328

BANK OF COMMUN-H

5.74

-3.204047

39643667

7.827

4.15

17

NEW WORLD DEV

9.15

-1.081081

11631200

13.226

6.13

23

BANK EAST ASIA

29.05

-1.190476

1282099

34.45

21.85

857

PETROCHINA CO-H

11

-1.256732

47947186

12.5

8.59

1880

BELLE INTERNATIO

14

0.1430615

10124200

17.54

11.38

2318

PING AN INSURA-H

60.2

0.7531381

12044241

87.9

37.35

2388

BOC HONG KONG HO

21.6

-0.4608295

11851936

25.6

14.24

6

POWER ASSETS HOL

57.3

-0.174216

2466094

64.8

52

293

CATHAY PAC AIR

13.7

-0.8683068

7873236

20.15

11.8

83

SINO LAND CO

12.9

0

7059921

14.16

8.482

1

CHEUNG KONG

101.9

-1.163919

4726372

131.8

79.1

16

SUN HUNG KAI PRO

95.95

-0.3116883

13325774

129

85.45

1898

CHINA COAL ENE-H

8.82

-1.121076

14688601

11.66

6.59

19

SWIRE PACIFIC-A

88.75

0

1377696

103.896

69.321

939

CHINA CONST BA-H

6

-1.960784

300279649

7.55

4.41

700

TENCENT HOLDINGS

222.8

0

3047460

230.8

139.8

2628

CHINA LIFE INS-H

20.5

0

29137915

30.6

17.04

322

TINGYI HLDG CO

21.85

-0.9070295

5516091

26

17.84

144

CHINA MERCHANT

25.15

-3.639847

3939084

37.6

19

151

WANT WANT CHINA

8.74

-2.780868

15071039

9.07

6.03

941

CHINA MOBILE

83.65

-1.005917

10523111

87.5

68.05

4

WHARF HLDG

42.95

-1.264368

4944050

59

33.15

688

CHINA OVERSEAS

15.96

0.7575758

25806913

17.86

9.99

4

WHARF HOLDINGS LTD

42.95

-1.264368

4944050

59

33.15

386

CHINA PETROLEU-H

8.38

-1.062574

56876317

9.67

6.22

291

CHINA RES ENTERP

1109

CHINA RES LAND

27

-0.1848429

9319058

35.5

24

14.3

2.142857

22881559

15.8

7.28

836

CHINA RES POWER

13.64

-2.710414

8845941

16.2

10.82

1088

CHINA SHENHUA-H

33.2

-1.043219

10445250

40.2

27.1

762

CHINA UNICOM HON

13.3

0.3016591

21699807

17.68

12.64

267

CITIC PACIFIC

12.98

-0.6125574

2115400

24.6

10.26

2

CLP HLDGS LTD

66.85

0.0748503

1768465

75.2

62.1

883

CNOOC LTD

15.88

-0.3764115

42232768

21.15

11.2

1199

COSCO PAC LTD

11.42

-1.381693

9332325

17.16

7.52

330

ESPRIT HLDGS

16.7

1.45808

8220562

36.75

7.55

101

HANG LUNG PROPER

29.3

-2.006689

5800200

36.25

20.85

11

HANG SENG BK

102

-0.5847953

1512092

127

84.4 33.2

12

HENDERSON LAND D

43.95

0.3424658

2967344

56.95

1044

HENGAN INTL

80.35

-1.652387

2265023

82

56.8

3

HONG KG CHINA GS

20.45

1.741294

9009328

20.65

16.68

Price 20593 52W (H) 24468.64

(L) 16170.35

10

34

4

IN FOCUS Hang Seng Index - 52 weeks Highs and Lows 20 10 0 -10

Shanghai Shenzhen CSI 300 NAME

-20

PRICE

DAY %

AGRICULTURAL-A

2.63

-0.3787879

25765501

AIR CHINA LTD-A

6.04

1.342282

15511810

6.7

-0.7407407

12126914

ALUMINUM CORP-A

VOLUME

-30 3-Apr

NAME

10-Oct

ANGANG STEEL-A

4.29

-0.6944444

8604277

PRICE

DAY %

VOLUME

ANHUI CONCH-A

16.78

-0.5924171

40066193

CITIC SECURITI-A

12.28

-1.127214

45912600

BANK OF BEIJIN-A

9.61

-1.738241

12826131

CSR CORP LTD -A

4.42

-1.777778

15780731

BANK OF CHINA-A

3.01

-0.3311258

18513369

DAQIN RAILWAY -A

7.38

-0.2702703

20519592

BANK OF COMMUN-A

4.63

-0.856531

23966748

DATANG INTL PO-A

4.95

-1.394422

3017187

BAOSHAN IRON & S

4.78

-0.8298755

16295862

DONGFANG ELECT-A

21.61

-1.593807

7098775

BBMG CORPORATI-A

8.09

-0.8578431

19909979

EVERBRIG SEC -A

12.45

-0.2403846

9818339

28.39

0.070497

4290278

GD MIDEA HOLDING

12.76

-2.891933

16033450

BYD CO LTD -A CHINA CITIC BK-A

4.19

-2.331002

16261735

GD POWER DEVEL-A

2.56

0

52758887

CHINA CNR CORP-A

4.13

-0.7211538

15462629

GF SECURITIES-A

29.7

-0.8678238

7757380

GREE ELECTRIC

20.95

0.5278311

8882203

GUIZHOU PANJIA-A

28.72

-1.03377

5746115

CHINA COAL ENE-A

8.9

-1.982379

6414411

CHINA CONST BA-A

4.67

-1.268499

31719111

CHINA COSCO HO-A

5

-2.152642

9127555

HAITONG SECURI-A

9.7

-1.121305

54501229

CHINA CSSC HOL-A

32.88

-1.997019

4881440

HANGZHOU HIKVI-A

44.3

1.83908

1351878

CHINA EAST AIR-A

3.75

3.305785

30057079

HEBEI IRON-A

2.94

0.3412969

25639311

CHINA EVERBRIG-A

2.8

-1.754386

28756319

HENAN SHUAN-A

71.26

0.182764

1270191

CHINA INTL MAR-A

14.12

-0.2824859

7902407

HUATAI SECURIT-A

9.34

-0.5324814

9741086

CHINA LIFE INS-A

16.56

-0.7789095

3481907

HUAXIA BANK CO

10.59

-2.575897

16098658

CHINA MERCH BK-A

11.68

-1.100762

25074587

IND & COMM BK-A

4.28

-0.2331002

20037368

CHINA MERCHANT-A

11.79

-0.08474576

3658531

INDUSTRIAL BAN-A

13.24

0

56238193

CHINA MERCHANT-A

20.88

-0.6660324

4132474

INNER MONG BAO-A

71.59

-0.1116227

36110597

CHINA MINSHENG-A

6.18

-1.592357

69324501

INNER MONG YIL-A

23.04

0.5674378

6343563

CHINA NATIONAL-A

6.21

0

22065719

INNER MONGOLIA-A

6.47

1.251956

131890138

CHINA OILFIELD-A

16.8

-1.869159

3378035

JIANGSU HENGRU-A

26.14

-0.3431186

1398481

CHINA PACIFIC-A

19.64

-0.253936

9473457

7.14

-0.5571031

17191949

CHINA PETROLEU-A

JIANGSU YANGHE-A JIANGXI COPPER-A

157.14 -0.006363347 24.35

405756

-1.377076

7769081

CHINA RAILWAY-A

2.5

-0.7936508

17751064

JINDUICHENG -A

13.2

-1.712584

7920620

CHINA RAILWAY-A

4.11

-1.674641

19275876

JIZHONG ENERGY-A

18.2

0.4415011

9547090

CHINA SHENHUA-A

25.52

-1.883891

10958807

KWEICHOW MOUTA-A

CHINA SHIPBUIL-A

5.61

-2.772964

18997095

LUZHOU LAOJIAO-A

CHINA SHIPPING-A

3.06

-0.6493506

12516145

CHINA SOUTHERN-A

4.63

1.535088

38975930

209.26

0.6202818

1447453

42.7

-0.4893964

2667950

METALLURGICAL-A

2.55

-0.7782101

20514841

NARI TECHNOLOG-A

20.56

0.5378973

6605177

CHINA STATE -A

3.08

-1.282051

46496229

NEW HOPE LIUHE-A

16.92

-1.052632

3226304

CHINA UNITED-A

4.16

-1.187648

53167439

NINGBO PORT CO-A

2.5

0

11658640

CHINA VANKE CO-A

8.22

-1.909308

34238086

CHINA YANGTZE-A

6.38

-1.23839

6815238

Hang SENG CHINA ENTREPRISE INDEX NAME

PRICE

DAY %

VOLUME

PANGANG GROUP -A

7.75

8.848315

215242870

PETROCHINA CO-A

9.62

-0.9268795

10933947

NAME

NAME

11-Apr

PRICE

DAY %

PING AN INSURA-A

37.65

-1.129202

VOLUME 8465889

POLY REAL ESTA-A

11.29

-0.6161972

16539839

QINGHAI SALT-A

32.71

-1.771772

3801183

SAIC MOTOR-A

14.65

-2.268179

10109542

SANY HEAVY INDUS

13.24

0.761035

25974683

SHANDONG GOLD-MI

32.92

0

4485720

8.84

-1.118568

34889828

SHANG PUDONG-A SHANGHAI ELECT-A SHANXI LU'AN -A

5.29

-2.037037

2905414

26.08

-0.03832886

11661113

SHANXI XISHAN-A

14.81

-2.179657

8066311

SHENZ DVLP BK-A

15.75

-1.500938

9319714 11783218

7.2

-0.6896552

SINOVEL WIND-A

SHENZEN OVERSE-A

15.11

-1.946788

1412170

SUNING APPLIAN-A

10.28

-1.438159

23550109

TSINGTAO BREW-A

33.59

0.8103241

1048265

WEICHAI POWER-A

30.82

-0.3234153

4463132

WULIANGYE YIBIN

34.39

-0.9219245

9942695

XINJIANG GUANG-A

24.03

-1.918367

7450381 12699798

YANGQUAN COAL -A

17.61

-2.329451

YANTAI CHANGYU-A

93.08

-0.5130398

1582785

YANZHOU COAL-A

22.25

-1.722615

3470840

YUNNAN BAIYAO-A

49

-1.606426

1250425

21.35

1.715102

12174228

ZIJIN MINING-A

4.16

0.2409639

43353751

ZOOMLION HEAVY-A

9.48

2.37581

60263956

ZHONGJIN GOLD

ZTE CORP-A

16.25

-2.108434

7967855

9.26

0.4338395

46620141

ZTE CORP-A

16.6

-1.190476

13693936

ZOOMLION HEAVY INDUSTRY S-A

9.22

6.466513

65389591

16.77

2.069385

19974998

ZOOMLION HEAVY-A

ZTE CORP-A

Price 2499.293 52W (H) 3380.52 (L) 2254.56 MOVERS 46 240 14

PRICE

DAY %

VOLUME

CHINA LONGYUAN-H

6.58

1.857585

10986749

NAME PETROCHINA CO-H

PRICE

DAY %

VOLUME

11

-1.256732

CHINA MERCH BK-H

15.9

-0.7490637

22633443

47947186

PICC PROPERTY &

9.43

-1.770833

CHINA MINSHENG-H

7.47

3.034483

90308168

9781774

PING AN INSURA-H

60.2

0.7531381

12044241

AGRICULTURAL-H

3.33

-2.631579

141791930

CHINA NATL BDG-H

10.48

0

58598066

SHANDONG WEIG-H

8.46

0.4750594

6218100

AIR CHINA LTD-H

5.27

-1.495327

10952000

CHINA OILFIELD-H

11.86

0.1689189

10996285

SINOPHARM-H

21.25

-2.968037

2215835

ALUMINUM CORP-H

3.7

-0.2695418

24191012

CHINA PACIFIC-H

24.8

-0.4016064

7039746

TSINGTAO BREW-H

43.85

-1.015801

1042575

ANHUI CONCH-H

26

1.167315

18689400

CHINA PETROLEU-H

8.38

-1.062574

56876317

WEICHAI POWER-H

38.2

1.595745

3137656

BANK OF CHINA-H

3.15

-1.5625

257060675

CHINA RAIL CN-H

5.83

2.821869

45455011

YANZHOU COAL-H

17.14

-1.380898

15194167

BANK OF COMMUN-H

5.74

-3.204047

39643667

CHINA RAIL GR-H

2.94

0.6849315

53653477

ZIJIN MINING-H

BYD CO LTD-H

20.8

-3.926097

5318364

CHINA SHENHUA-H

33.2

-1.043219

10445250

ZOOMLION HEAVY-H

CHINA CITIC BK-H

4.61

-1.705757

39387400

CHINA TELECOM-H

4.19

-1.643192

63340333

ZTE CORP-H

CHINA COAL ENE-H

8.82

-1.121076

14688601

DONGFENG MOTOR-H

14

-1.547117

20609780

CHINA COM CONS-H

7.72

-1.530612

15076759

GUANGZHOU AUTO-H

8.1

-1.459854

4376009

CHINA CONST BA-H

6

-1.960784

300279649

HUANENG POWER-H

4.47

-0.4454343

15247913

CHINA COSCO HO-H

5.1

0

36701168

IND & COMM BK-H

5.03

-1.565558

240403948

20.5

0

29137915

JIANGXI COPPER-H

18.78

-1.157895

14950168

NAME

PRICE DAY %

CHINA LIFE INS-H

FTSE TAIWAN 50 INDEX

FAR EASTERN NEW

NAME

PRICE DAY %

Volume

ACER INC

39.1 -0.3821656

5919294

Volume

-1.92926

47194337

0.3696858

15274752

20.8

2.211302

7187695

ZOOMLION HEAVY INDUSTRY - H

10.72

-0.7393715

11040692

ZTE CORP-H

20.65

1.719902

5045095

Price 10744.91 52W (H)13770.73 (L) 8058.58 MOVERS 11 26 3 NAME

PRICE DAY %

6669890

SINOPAC FINANCIA

9.84

-1.6

8584128

FAR EASTONE TELE

58.5 -0.5102041

2098026

SYNNEX TECH INTL

72.6 -0.5479452

5137501

FIRST FINANCIAL

16.8

-1.466276

16418647

TAIWAN CEMENT

34.5

0

9021551

85 -0.3516999

4395661

TAIWAN COOPERATI

17.6

-1.40056

4153580

FORMOSA PETROCHE

ADVANCED SEMICON

29.05

-1.358234

10455879

ASIA CEMENT CORP

35.85 -0.4166667

3349838

FOXCONN TECHNOLO

FORMOSA PLASTIC

85.7

-3.923767

3788541

TAIWAN FERTILIZE

72

-1.098901

1946812

85

0.7109005

8319745

TAIWAN GLASS IND

31

-2.821317

3428001

110

-2.654867

7515311

TAIWAN MOBILE CO

89.7

1.241535

4600448

437.5

-2.561247

2385318

83 -0.9546539

23247382

ASUSTEK COMPUTER

269

-2.536232

1328273

FUBON FINANCIAL

32

0

12362406

TPK HOLDING CO L

AU OPTRONICS COR

13.9

-3.806228

26862561

HON HAI PRECISIO

109.5

-1.351351

21338090

TSMC

202.5

-2.644231

5209864

HOTAI MOTOR CO

201

-6.944444

3011790

UNI-PRESIDENT

40.25 -0.9840098

31.3

-2.1875

13675088

HTC CORP

545

-6.837607

5632205

UNITED MICROELEC

13.85

-1.071429

CATCHER TECH CATHAY FINANCIAL

Volume

-1.197605

FORMOSA CHEM & F

33

3.05 10.86

3863978 26345202

CHANG HWA BANK

16.15 -0.9202454

8658209

HUA NAN FINANCIA

16.2

-1.519757

6234349

WISTRON CORP

42.5

-1.392111

7907077

CHENG SHIN RUBBE

68.1 -0.5839416

4152868

LARGAN PRECISION

557

-1.93662

1907260

YUANTA FINANCIAL

14.4

-1.030928

26355979

CHIMEI INNOLUX C CHINA DEVELOPMEN CHINA STEEL CORP

13.65

-2.5

38093495

LITE-ON TECHNOLO

34.6

0.1447178

4489665

YULON MOTOR CO

51

-3.041825

4573463

8.42

-3.661327

22198666

MEDIATEK INC

273

-2.150538

3589882

Yuanta Financial Holding Co Ltd

1.311

10016.140

15.35

29 -0.5145798

20024325

MEGA FINANCIAL H

20.85

-1.184834

16138656

Yulon Motor Co Ltd

0.563

1170.255

56.4

CHINATRUST FINAN

17.8

-1.111111

24575904

NAN YA PLASTICS

61.1 -0.4885993

4637814

CHUNGHWA TELECOM

90.8

0.1102536

7906117

PRESIDENT CHAIN

159

-1.242236

1247344

COMPAL ELECTRON

32.5

0.1540832

4457163

QUANTA COMPUTER

73

-2.796272

6345777

DELTA ELECT INC

83.3

-1.536643

2591592

SILICONWARE PREC

34.65

-1.84136

5129009

Price 5294.1 52W (H) 6265.48 MOVERS 5 43 2

(L) 4643.05

business daily April 10, 2012 | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) galaXy enTerTainMenT

Melco croWn enTerTainMenT

21.8

MgM cHina HolDingS

35.5

14.15

35.4

14.10

21.2

35.3

14.05

21

35.2

14.00

35.1

13.95

35

13.90

21.6 21.4

20.8 20.6 20.4 20.2

Last 21.45

Max 21.55

Average 21.22

34.9

Min 20.70

SanDS cHina lTD 31.2 31 30.8 30.6 30.4 30.2 30 29.8 29.6 29.4

13.85 Last 35.45

Max 35.45

Average 35.36

16.7

22.6

16.6

22.4

16.5

22.2

16.4

22.0

21.4

16

Last 16.38

Min 30.05

Max 16.60

Average 316.41

IN FOCUS 9-April

MAJORS

ASIA PACIFIC

-50

-40

-30

-20

-10

0

MACAU RELATED STOCKS NAME

(H) 52W

(L) 52W

3.17

-0.3144654

44.09091

3.3

1.88

2760586

CROWN LTD

8.75

-0.5681818

8.158218

9.2

7.45

794133

AMAX HOLDINGS LT

0.089

0

2.298854

0.147

0.06

4970500

BOC HONG KONG HO

21.6

-0.4608295

17.39131

25.6

14.24

11851936

CENTURY LEGEND

0.26

6.995885

13.04348

0.46

0.204

144000

3.2

0

14.28572

4.79

2.3

0

CHINA OVERSEAS

15.96

0.7575758

22.9584

17.86

9.99

25806913

CHINESE ESTATES

10.48

-1.503759

-16.16

14.88

10.2

395000

CHOW TAI FOOK JE

11.88

-2.302632

-14.65517

15.16

11.68

14357000

1.4

0

26.12612

2.09

0.97

1895000

0.66

-1.492537

57.14286

0.76

0.3

162000

21.45

0.7042254

50.63202

22.45

8.69

7349159

102

-0.5847953

10.68909

127

84.4

1512092

68.75

-1.221264

16.52542

85.35

56

11000498

EMPEROR ENTERTAI FUTURE BRIGHT GALAXY ENTERTAIN HANG SENG BK HSBC HLDGS PLC

Max 22.50

Average 22.11

Min 21.80

PRICE

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

AUD

1.0307

0.3603

0.9599

1.1081

0.9388

GBP

1.5871

0.3034

2.1103

1.6747

1.5235

CHF

0.9173

0.218

2.2675

0.9596

0.7071

EUR

1.3097

0.1989

1.0493

1.494

1.2624

JPY

81.64

0.3552

-5.7937

85.16

75.35

MOP

7.997

0.0275

0.0325

8.0449

7.9823

HKD

7.7644

0.0193

0.0386

7.8113

7.7529

CNY

6.3058

0.1285

-0.1713

6.5472

6.2846

INR

51.105

-0.7631

3.8352

54.305

43.855

THB

30.98

0.0646

1.8399

31.96

29.63

SGD

1.2607

0.0079

2.8476

1.3199

1.1992

TWD

29.531

-0.105

2.5329

30.716

28.48

PHP

42.75

0.1053

2.5497

44.35

41.879

IDR

ARISTOCRAT LEISU

CHEUK NANG HLDGS

Last 22.15

Min 16.24

CURRENCY EXCHANGE RATES

Currency Undervaluation - BigMac index

-60

Min 13.94

21.6

16.1 Average 30.67

Average 14.03

21.8

16.2

Max 31

Max 14.10

Wynn Macau lTD

SJM HolDingS lTD

16.3

Last 30.38

Last 13.98

Min 35.10

DAY % YTD %

VOLUME CRNCY

CROSSES

AUD HKD

9169

-0.0327

-1.0906

9367

8458

AUDJPY

84.114

0.0297

-6.7551

90.031

72.057

EURCHF

1.20096

0.0441

1.3181

1.31665

1.00749

EURGBP

0.82496

0.1188

1.0219

0.90835

0.82219

EURCNY

8.2404

0.625

-1.2888

9.6769

7.9674

EURMOP

10.4533

0.0057

-0.9691

11.9509

10.1031

EURJPY

106.86

0.2152

-6.7378

123.33

97.04

HKDMOP

1.0297

0.0291

0.0388

1.0311

1.0288

World Stock MarketS - Indices NAME

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

US

13060.14

-0.1117421

6.896468

13297.11

10404.49

NASDAQ COMPOSITE INDEX

US

3080.5

0.4044862

18.24655

3134.17

2298.89 4791.01

HUTCHISON TELE H

3.35

0

12.04013

3.6

2.13

2518075

LUK FOOK HLDGS I

22.65

-3.205128

-16.42067

46.15

19.2

5670957

FTSE 100 INDEX

GB

5723.67

0.348892

2.716844

6103.73

MELCO INTL DEVEL

7.57

-1.560468

31.19584

10.76

4.3

1950042

DAX INDEX

GE

6775.26

-0.1297158

14.86703

7600.410156

4965.8

13.98

-0.8510638

45.74412

17.183

7.6

3163019 2650036

NIKKEI 225

JN

9688.45

-0.8104337

14.58367

10255.15

8135.79

HANG SENG INDEX

HK

20593

-0.9522399

11.70969

24468.64063

16170.35

CSI 300 INDEX

CH

2519.83

0.2784906

7.421453

3380.527

2254.567

TAIWAN TAIEX INDEX

TA

7706.26

0.869654

8.967371

9099.75

6609.11

MGM CHINA HOLDIN MIDLAND HOLDINGS

4.05

0.7462687

0.2475257

6.123

2.95

0.105

-4.545455

-5.405407

0.158

0.08

310000

30.8

0.1626016

40.3189

32.55

14.9

9155785

SHUN HO RESOURCE

1.2

0

20

1.32

0.82

0

SHUN TAK HOLDING

3.14

0

22.69803

4.686

2.241

3942239

SJM HOLDINGS LTD

16.38

-0.9673519

29.17981

21

10.22

5110881

SMARTONE TELECOM

16.28

0.1230012

21.13096

18.5

9.8

499819

WYNN MACAU LTD

22.15

-1.336303

13.58974

27.48

14.807

6831836

ASIA ENTERTAINME

6.1

-4.984424

3.741495

10.8692

4.72

90202

BALLY TECHNOLOGI

46.95

-1.157895

18.68048

47.6

24.74

403583

BOC HONG KONG HO

2.82

0

17.63786

3.22

1.81

8182

GALAXY ENTERTAIN

2.74

3.007519

46.52406

2.87

1.08

16300

16.77

-0.1785714

-2.500004

19.15

13.38

1900428

NEPTUNE GROUP SANDS CHINA LTD

INTL GAME TECH

KOSPI INDEX

SK

2029.03

0.01281565

11.13467

2231.47

1644.11

S&P/ASX 200 INDEX

AU

4319.847

-0.3234296

6.490391

4976.4

3765.9 3217.951

JAKARTA COMPOSITE INDEX

USD

ID

4166.374

0.782238

9.010539

4232.923

FTSE Bursa Malaysia KLCI

MA

1598.87

0.3407722

4.451472

1609.33

1310.53

NZX ALL INDEX

NZ

773.896

-0.2465813

6.04216

814.431

700.441

PHILIPPINES ALL SHARE IX

PH

3429.43

-0.2109594

12.62348

3465.89

2695.06

HSBC Dragon 300 Index Singapor

SI

574.63

-0.05

15.78

N/A

N/A

TH

1182.41

-1.30875

15.32108

1214.31

843.69

JONES LANG LASAL

81.68

-0.4266732

33.33334

107.84

46.01

315751

STOCK EXCH OF THAI INDEX

LAS VEGAS SANDS

58.76

2.781179

37.51463

59.85

36.08

8567922

HO CHI MINH STOCK INDEX

VN

447.44

0.5641337

27.27635

488.02

332.28

MELCO CROWN-ADR

13.82

1.245421

43.65905

16.15

7.05

5601391

Laos Composite Index

LO

987.62

0

9.801434

1348.88

876.33

MGM CHINA HOLDIN

1.83

0

53.56302

2.21314

1.00254

1000

MGM RESORTS INTE SHUFFLE MASTER SJM HOLDINGS LTD WYNN RESORTS LTD SJM HOLDINGS LTD WYNN RESORTS LTD

13.6

0.3690037

30.39309

16.05

7.4

9926979

17.65

-0.786959

50.59727

18.77

7.35

581817

2.12

-1.395349

30.06135

2.64

1.28

1100

125.94

1.761474

13.98317

165.4931

101.02

1049855

2.15

0

2.64

1.28

31.90184

1100

123.76

-1.527689

165.4931

101.02

12.01014

1193586

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

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business daily April 10, 2012

cial minds on a serious negotiation process and a diplomatic solution.

Moreover, it should be clear soon enough whether Iran is serious about a compromise this time, because there are ample benchmarks.

The content of such a compromise is more or less clear: acceptance of low-grade uranium enrichment by Iran for non-military purposes, and enhanced and verifiable safeguards, such export of low-grade enriched uranium for further processing and stronger and more extensive inspection rights for the International Atomic Energy Agency inside Iran.

For example, the IAEA would gain access to previously closed Iranian nuclear facilities.

Of course, a compromise would not address the Iranian regime’s domestic behavior and regional ambitions – a source of shared angst for Israel and the Arab Gulf states, first and foremost Saudi Arabia.

But, with no one seriously prepared to go to war for regime change in Iran, particularly after the decadelong misadventure in Iraq, no one

should weigh down the negotiations with futile aspirations.

This applies equally to Iran, where some influential people still think that the US can be forced out of the Middle East, and that the status quo can be changed to install Iran as the region’s hegemonic power.

This illusion, no less than Western hopes of regime change in Iran, could be seriously pursued only at an indefensibly high risk of war and regional chaos.

Opinion

The Persian Knot

Joschka Fischer German Foreign Minister and Vice Chancellor from 1998-2005

T

he negotiations between Iran and the five permanent members of the United Nations Security Council, plus Germany, over Iran’s nuclear program are entering a new, and probably decisive, stage. The negotiations have been going on for almost a decade, with long interruptions, and whether a breakthrough will come this time is anyone’s guess. But the situation has never been as serious as it is today, and peace hangs in the balance.

After the recent visits by Israeli Prime Minister Binyamin Netanyahu to Washington, DC, and by Turkish Prime Minister Recep Tayyip Erdoğan to Tehran, a foggy situation is nonetheless becoming clearer. It appears that US President Barack Obama has won time by drawing a line in the sand – the start of an explicit Iranian nuclear-weapons program – and by assuring Israel of America’s readiness for military action should negotiations fail.

Moreover, in view of the danger of a military confrontation, the United

States, together with Europe and other partners, has implemented tough new “smart” sanctions aimed at Iran’s oil exports – its main source of income – while largely isolating the Islamic Republic from the international payment system. Iran urgently needs the oil revenue, and, without participation in the payments system, its international trade is grinding to a halt. Barter transactions and suitcases full of cash are not a viable alternative. So Iran’s economy is being shaken to the core.

Back channel messages Furthermore, the US seems to have communicated in a credible manner both the seriousness of the situation and its own intentions to the Iranian leadership via various channels. So, if this round of negotiations, too, should fail, a great – and entirely foreseeable – tragedy could begin to unfold.

The good news is that all of the parties involved seem to be aware of this, which should focus offi-

‘The content of such a compromise is more or less clear: acceptance of low-grade uranium enrichment by Iran for nonmilitary purposes, and enhanced and verifiable safeguards’

Regional politics Other significant factors will play an important role in deciding the outcome of these negotiations. The first concerns Iranian domestic politics and the ongoing power struggle within the regime – a struggle that scuttled a diplomatic solution once before, because neither conservatives nor reformers were willing to afford President Mahmoud Ahmadinejad a diplomatic triumph. One can only hope that, in view of the seriousness of the situation, this route to failure will be closed off.

Developments in Syria, Iran’s last remaining ally in the region, are equally likely to play a role. The fall of President Bashar al-Assad’s regime would amount to a strategic debacle for Iran, which would then be faced by a united front of Arab states, supported by Turkey, the US, and, in a way, by Israel. Iran would then find it difficult to maintain its foothold in Lebanon, and its position would become more complicated even in Iraq, despite its Shia majority. In short, its quest for regional predominance would collapse.

In light of the complexity of external factors, it will be important not to overload the nuclear negotiations with issues that the talks are not designed to resolve. Syria, the future of Iran’s regime, the situation in the Persian Gulf and in the wider region: all of these problems must be addressed at a different level and at another time if the risk of war over Iran’s nuclear program is to be contained or avoided.

Ever since Alexander the Great memorably solved the puzzle of the Gordian knot with just a blow of his sword, people have dreamed of a simple military solution to complex problems. But, all too often, applying military force to a problem leads to more problems. In Iraq, George W. Bush, Dick Cheney, and Donald Rumsfeld demonstrated that using military force only as a last resort is not merely an ethical and moral imperative, but one based on Realpolitik as well.

There are times when using military force becomes unavoidable, but it should never be chosen as an alternative to diplomacy. That is certainly true for today’s “Persian Knot.”

Yet that choice – war or diplomacy – now confronts both sides. © Project Syndicate

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business daily April 10, 2012 | 15

OPINION

Asia’s Energy, Asia’s Security

Sanjaya Baru Director for Geo-Economics and Strategy at the International Institute of Strategic Studies

A

s Asia’s rising powers seek to sustain growth and ensure stability, energy security has moved to the forefront of Asian geopolitics. The visit by China’s Prime Minister Wen Jiabao to Saudi Arabia, the United Arab Emirates, and Qatar was as much about ensuring energy security for China as it was about China playing a role in maintaining political stability in the Middle East.

The visit came against the backdrop of the growing threat of United States-led oil-export sanctions against Iran and China’s need to secure alternative sources of oil and gas. But its unstated purpose was to bolster China’s rising profile in the Persian Gulf and the Muslim world.

Having faced a pushback in East and Southeast Asia after the US enunciated a new strategic framework for the “Indo-Pacific” region, and given the growing profile of energy in the geopolitics of the South China Sea, the Chinese are moving to secure their western flank. Indeed, in the six years since Saudi King Abdullah’s visit to China in January 2006, China has emerged as the most important Asian power in the Gulf, establishing extensive business and strategic links.

At a conference on “Gulf

Business

wires Leading reports from Asia’s best business newspapers

and Asia,” organized by the Geo-Economics and Strategy Program of the International Institute of Strategic Studies in Bahrain last October, Yang Guang of the Chinese Academy of Social Sciences pointed out that China had overtaken the US as the biggest importer of oil from the Gulf Cooperation Council (GCC) countries.

oil from Iran (with China accounting for 22% of Iran’s oil exports), and thus would be adversely impacted by US-led sanctions. But both countries have interests in the region that go far beyond oil.

For China, the GCC countries have emerged as a major market for Chinese manufactured goods and food exports. For India, the region is home to six million expatriates who remit annually close to $20-30 billion – almost half of the $60 billion in total yearly remittances

by Indian workers abroad.

Concerns about the fallout of Gulf instability for India’s energy security have risen alongside deepening ties with Israel. Indeed, when Indian Foreign Minister S. M. Krishna visited Tel Aviv this month to explore possibilities for diplomacy in alleviating regional tensions, he was received with the honors accorded only to Israel’s

closest allies.

Diplomatic activism

As the region’s biggest and most influential country, Saudi Arabia could play a positive role by inviting the US and Asia’s two giants to work jointly towards a peaceful resolution of the Iran problem.

While Russia has its interests in the region, it has little or no stake in arresting the rise in oil prices that instability in the Gulf would trigger. China and India, on the other hand, would be badly affected by another surge in oil prices.

India can ill afford a further economic slowdown, with GDP growth this year forecast to fall to 7.5%, compared to the five-year average of 9% in 2003-08, while inflation remains high, partly owing to rising energy prices. Deepening malaise there and in China would disrupt global growth at a time when Europe remains mired in crisis.

The US, too, cannot afford military conflict in the Gulf, given its need to shore up the domestic foundations of its economic power. As a result, the time is ripe for fresh ideas and innovative initiatives aimed at addressing Asia’s energy-security concerns in the Middle East. Increasingly, those ideas and initiatives will come from Asia itself.

‘Both China and India will seek to impress upon the US that any action against Iran aimed at preventing it from developing nuclear weapons should not be at the expense of economic growth and energy security in Asia’

Such diplomatic activism by China and India clearly reflects their shared concern about energy supplies. Both countries have so far gone along with United Nationsauthorized sanctions against Iran, and have publicly demanded that Iran adhere to its commitments as a signatory to the Nuclear NonProliferation Treaty (NPT).

But the bottom line for both countries is energy security.

Both China and India will seek to impress upon the US that any action against Iran aimed at preventing it from developing nuclear weapons should not be at the expense of economic growth and energy security in Asia.

Given the stake that both the US and Europe have in stabilizing and sustaining global growth, their policies should be aimed at ensuring that China, India, and other newly industrializing Asian economies can take up the slack created by the slowdown in OECD economies.

So, even as Wen travels west, the West must travel east. A trilateral initiative by the US, China, and India in the Gulf, aimed at facilitating a resolution of historic problems in the region, would benefit global growth and stability.

The Times of India

Wall Street Journal Asia

Taipei Times

Nikkei.com

The Indian economy is expected to grow at 6.1 percent this year, similar to the fourth quarter of last year, according to Ernst & Young’s quarterly Rapid Growth Markets Forecast. The report said growth would pick up in the second half. In the medium term, the forecast predicted a strong recovery in investment, boosting GDP growth to more than 9 percent in 2014.

Members of the Karen rebel movement met with Myanmar opposition leader Aung San Suu Kyi on Sunday, a day after meeting President Thein Sein.

The meetings reveal a desire to resolve the insurgencies and declare a peace deal as an integral part of rebuilding a country emerging from international isolation.

Taiwan’s President Ma Yingjeou stopped over in Mumbai on his way to Africa, becoming the first Taiwanese leader to make a transit stop in India. The report said Mr Ma stayed in the airport’s VIP lounge and did not meet any government officials, but the visit has been interpreted as a sign of improved ties between India and Taiwan.

North Korea has assembled all three stages of what it says is a long-range rocket capable of launching satellites. The report said the launch was a disguised test of the country’s ballistic missile technology and South Korea, Japan and the mainland want the test cancelled. The report said the launch could go ahead as soon as the end of this week.

Common concerns While China is investing in pipelines in Central Asia and Russia, and in oil equities in Africa and elsewhere, according to Yang, for China, “the Gulf region’s abundance of resources, its geographic position, and good transport links make it the primary option on the list of international oil suppliers.”

Even as the US and Europe reduce their dependence on Gulf oil, China will remain strategically dependent on the Gulf for their energy.

So will India. Indeed, Indian National Security Adviser Shiv Shankar Menon also toured the Gulf recently, visiting Saudi Arabia, Qatar, and Kuwait. Though his foray into the region attracted much less attention than Wen’s, the focus of his visits was, likewise, energy security (as well as securing Arab investment in India).

Both China and India buy

© Project Syndicate

16 |

business daily April 10, 2012

CLOSING Portuguese banks get record financing

N.Korea preparing nuclear test: Seoul

The European Central Bank’s financing for Portuguese lenders rose to a record in March, the Bank of Portugal said. ECB financing climbed to 56.3 billion euros (US$74 billion) from 47.6 billion euros in February, the Bank of Portugal said yesterday on its website. ECB financing previously peaked at 49.1 billion euros in August 2010.

North Korea appears to be readying a nuclear weapons test to follow a long-range rocket launch scheduled for this week, according to a report

by South Korean intelligence officials. Satellite photographs taken April 1 of the Punggye-ri nuclear test site near North Korea´s border with Russia and China show excavation consistent with preparations for previous tests in 2006 and 2009, according to the report obtained by Bloomberg News.

Oil bulls retreat as U.S. production picks up Stockpiles boosted by highest drilling level since 1999

By Moming Zhou and Asjylyn Loder

S

peculators slashed bullish bets on oil by the most in more than three months as drilling in the U.S. accelerated and output grew to the highest level since 1999, boosting stockpiles.

Money managers reduced net long positions, or wagers on rising prices, by 10 percent in the seven days ended April 3, the biggest drop since December 20, according to the Commodity Futures Trading Commission’s Commitments of Traders report on April 6. Oil fell 3.1 percent in the week covered by the report.

Inventories surged by the most since 2008 and domestic production climbed to the highest level in more than 12 years in the week ended March 30, the Energy Department reported April 4. The U.S. pumped 6.05 million barrels a day, an increase of 7.3 percent from a year earlier. The number of oil rigs grew 50 percent over the same period, according to Baker Hughes Inc., a Houston oil-services company.

“As production and inventory levels continue to grow, it makes it harder to be aggressively long at the higher price levels,” Phil Flynn, an analyst at futures-brokerage PFGBest in Chicago, said by phone April 6. “Market fundamentals are still quite weak.”

West Texas Intermediate, the U.S. benchmark, declined US$3.32 a barrel to US$104.01 a barrel on the New York Mercantile Exchange during the week of the report, then slid to US$103.31 on April 6. Futures dropped US$1.70, or 1.6 percent, to US$101.61 a barrel at 9:04 a.m. in New York.

Oil stockpiles grew by 9.01 million barrels to 362.4 million in the week ended March 30, the biggest increase since August 2008, the department said. Stockpiles at Cushing, Oklahoma, the delivery point for New York futures, rose 729,000 barrels to 40.3 million, the most since May, the report showed.

Bloomberg

Iran slams pre-conditions ahead of nuclear talks

Treasuries gain as investors seek refuge

By Susanne Walker

By Marcus George

I

ranian Foreign Minister Ali Akbar Salehi said Iran would not agree to world powers imposing pre-conditions ahead of the resumption of nuclear talks later this week, Iranian media reported on Monday “Setting conditions before the meeting means drawing conclusions, which is completely meaningless and none of the parties will accept conditions set before the talks,” the Iranian parliamentary news agency quoted him as saying.

U.S. officials say that getting Iran to suspend high-level uranium enrichment and close a nuclear facility built deep under a mountain near the holy city of Qom are priorities for the nuclear talks between Iran and world powers, which are set to resume in Istanbul on Saturday.

Drilling in the U.S. accelerated and output grew to the highest level since 1999

“These issues have been raised by the media and we cannot base our judgment on those concerns reflected by media coverage,” Salehi added.

He said the Iranian negotiating team would ignore those reports and defend its position in the talks.

“We have our opinions and the P5+1 have theirs but we have to find common areas.”

The United States and its allies hope to be able to strike a deal with Iran over its nuclear program which they suspect is being used to covertly develop a nuclear weapons capability.

Iran maintains its activities are entirely peaceful and has so far refused to suspend enriching uranium.

Reuters

T

reasury 30-year bonds gained for the fourth straight day as investors sought the highestreturning U.S. debt amid concern the global recovery is slowing.

U.S. yields tumbled April 6, when a Labor Department report showed jobs growth fell short of forecasts in March.

The yield on the 10-year note touched the lowest in more than three weeks as investors prepared to bid at three sales of coupon-bearing debt totaling US$66 billion starting tomorrow.

It’s “the continuation of Friday’s post-employment bid,” said Ian Lyngen, a government bond strategist at CRT Capital Group LLC in Stamford, Connecticut. “The refining of economic expectations has put in a bid for Treasuries and this will likely be supportive for auctions

later this week.”

U.S. 30-year yields fell three basis points, or 0.04 percentage point, to 3.19 percent at 8:20 a.m. in New York, according to Bloomberg Bond Trader prices. The 3.125 percent note due in February 2042 gained 17/32, or US$5.31 per US$1,000 face amount, to 99 25/32.

The 10-year yield dropped to as low as 2.02 percent, the least since March 12. It dropped 15 basis points last week, the most since the period ended Dec. 16.

Employers added 120,000 jobs in March and the jobless rate fell to 8.2 percent, the Labor Department said April 6. The median forecast in a Bloomberg News survey was for a 205,000 rise.

Bloomberg