Macau Business Daily, April 23, 2012 by Business Daily

Year I | Number 16 | April 23, 2012 Editor-in-chief | Tiago Azevedo Deputy editor-in-chief | José I. Duarte MOP $ 6.00 www.macaubusinessdaily.com

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Bill for new St. Joseph campus doubles

Macau group to ink deal with Brazil confederation

Govts urged to recognise boating licences

IPO failings: HK watchdog fines Mega Capital

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Ao Man Long fallout

The new campus of the University of St. Joseph is likely to cost around 500 or 600 million patacas, double of its initial budget, says departing rector Ruben de Freitas Cabral. More than two years ago, the campus was budgeted at 250 to 300 million patacas but the completion of the project has been postponed, Mr Cabral said in an interview with Business Daily. Mr Cabral says he leaves the institution with “no debts”. “Its economic and financial situation is highly sustainable and is completely self-sufficient,” says the departing rector. Mr Cabral leaves the role to 65-year-old priest Father Peter Stilwell, who takes over on May 1.

Page 4 & 5

T HK DEVELOPERS ARE NAMED DEFENDANTS

wo Hong Kong multi-millionaire developers have been named as defendants in a new Macau court case stemming from Ao Man Long’s third corruption trial. They are Joseph Lau Luen Hung, the chairman of Hong Kong-based property developer Chinese Estates Holdings Ltd, and Steven Lo Kit Sing, the chairman of BMA Investment Group Ltd and South China Football Club. The pair was named in a Macau court on Friday as the accused in a case arising from Mr Ao’s latest trial. According to the indictment faced by Mr Ao, Mr Lau and Mr Lo paid a bribe of 20 million patacas to secure land where the La Scala housing development is currently being built near Macau airport. Both businessmen deny breaking any Macau law. Last Tuesday, Mr Lau’s lawyers said the billionaire “was not formally charged whether in Hong Kong or in Macau connection with the incident”. The

“incident” was the sale by the Macau government of the plot near the airport in 2006 allegedly for at least 830 million patacas lower than its surveyed value. Late on Friday evening, Mr Lo indicated he had been informed he was a defendant in a separate trial when he told reporters he faced charges “about the same thing [as Friday’s hearing]”. The Macau government only received payment for the land near the airport four years after the deal was done. A spokesperson for the government confirmed that “about 1.2 billion patacas were paid in 2010 to the administration from the transfer of the plot’s concession rights”. More on pages 2 & 3

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HANG SENG INDEX 21100

21040

20980

20920

20860

20800

April 20

HSI - Movers Name

%Day

Scrap water plant bids, start again, says hopeful

Govt to keep close eye on mainland truckers

WANT WANT CHINA

3.58

ALUMINUM CORP-H

2.38

CHINA MOBILE

1.51

COSCO PAC LTD

1.26

Indian conglomerate VA Tech Wabag welcomes its reinstatement as a bidder for Macau peninsula’s wastewater treatment plant, but says the process should start over for all four bids. The firm has asked the government to assess the four proposals “concurrently and in comparison,” the company’s lawyer Ana Soares said. António Trindade, head of current operator CESL Asia, claims to have a “technically superior” proposal. Page 2

Macau’s Transport Bureau says it will tighten its management of mainland truck drivers using ‘special driving licences’, after the three-day strike carried out by local truck drivers last week. The bureau also pledged on notifying other government departments “to consider the use of local employees as a priority for public projects and services carried out in Macau,” a bureau spokesman told Business Daily. Page 6

CHINA RES POWER

1.00

TENCENT HOLDINGS

-1.35

SINO LAND CO

-1.47

CHINA RES LAND

-1.50

CATHAY PAC AIR

-1.64

CHINA UNICOM HON

-1.93

Source: Bloomberg

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business daily April 23, 2012

MACAU

Scrap water plant bids start again, says bidder Readmitted to the tender for the peninsula’s wastewater treatment plant, Va Tech Wabag says the process should start over for all four bids Tiago Azevedo

tiago.azevedo@macaubusinessdaily.com

ndian-Austrian company Va Tech Wabag Ltd. has asked the government to reopen the international tender for the Macau peninsula wastewater treatment plant. The government has pledged to re-assess each of the four bids to manage and operate the water plant, but the company claims the government’s mechanism to evaluate the bids is flawed. Va Tech Wabag and a second consortium led by Waterleau Group NV that includes Beijing Origin Water Technology Co. Ltd., have been notified of their readmission, after the courts ruled they were wrongfully excluded from the tender. But a few more steps have to be taken, says Va Tech Wabag’s lawyer Ana Soares. “Since there is a company already running the [water] plant, the tender was extinct the moment it was adjudicated (in August 2011),” Ms Soares said. Chief Executive Fernando Chui Sai On made the decision to revisit the tender on March 8, accepting a recommendation from the Infrastructure Development Office. The same report from the development office called for the creation of a new committee to assess the excluded bids, together with the two proposals that were originally accepted. Only the bids from the consortiums headed by CESL Asia Investments & Services Ltd., now running the plant, and Consulasia were accepted when the proposals were opened in 2010.

‘No concerns’ Ms Soares says the tender has to go back to November 2010 when both proposals were excluded. “To follow the court’s decision, the Chief Executive has to re-

open the international tender and name a new commission to assess the proposals,” Ms Soares said. All four proposals have to be assessed “concurrently and in comparison from the very beginning,” she added. Both Va Tech Wabag and Waterleau have asked the government to put the contract out to a new tender or to strike a compensation deal. The revision of the competing bids could lead to a different final outcome. “We are not concerned with a new assessment to all proposals,” said António Trindade, CESL Asia’s chief executive. Mr Trindade says that CESL Asia’s bid is “technically superior” to all the others. CESL Asia could have a temporary contract to run the plant, while the legal battle goes on, but since its proposal is also to be reviewed industry, the other bidders say CESL Asia’s operation should be put on hold. In between, the former operator of the wastewater treatment plant, Engenharia Hidráulica de Macau, has offered to step in temporarily. “We said we could step in. They could extend our interim contract while the legal issue was still being resolved,” Sean Kilker, the Macau-based managing director of Va Tech Wabag, one of the shareholders of Engenharia Hidráulica de Macau, told Business Daily. An offer was made “just after” Chinese New Year, Mr Kilker said. The company has not received a reply from either Mr Chui, the Infrastructure Development Bureau or Secretary for Transport and Public Works Lau Si Io. with Vítor Quintã

Charges laid over La Scala land deal Two prominent Hong Kong businessmen

named defendants in court case into billiondollar sale of land near airport in 2006 Vítor Quintã

vitorquinta@macaubusinessdaily.com

Photo by Manuel Cardoso

CESL Asia is currently running the peninsula wastewater treatment plant

wo Hong Kong businessmen that have been named in the latest trial against former secretary for transport and public works Ao Man Long are themselves facing charges over a 2006 land deal. Joseph Lau Luen Hung, the chairman of Hong Kong-based property developer Chinese Estates Holdings Ltd., and Steven Lo Kit Sing, the chairman of BMA Investment Group Ltd. and South China Football Club, were named in court on Friday as being defendants in another case linked to the Ao corruption trial. The revelation means the Ao scandal will have at least one more chapter. Mr Ao is currently facing a third trial in the Court of Final Appeal, this time for passive corruption and money laundering. He is serving a sentence of 28 and a half years for fraud-related charges. The charges against Mr Lo and Mr

Lau came to light on Friday. They had both been named as witnesses in Ao’s trial. Mr Lau did not appear in court but the Public Prosecutor’s Office waived his evidence, saying that, “as a defendant in a case related” to the Ao trial, he could refuse to testify. The president of the Court of Final Appeal and presiding judge, Sam Hou Fai, asked Mr Lo if he wanted to testify, considering he had also been named a defendant in a related case. Justice Sam revealed later in proceedings that Mr Lo was first interviewed by the Public Prosecutor’s Office in 2009 and had asked for a judge to review the accusation at a pre-trial. According to the indictment in the Ao trial, Mr Lau and Mr Lo are said to have paid a bribe of 20 million patacas (US$2.5 million) to secure a 78,742-square-metre piece of land near the airport, where the La Scala flats are currently being built.

April 23, 2012 business daily | 3

Photo by Manuel Cardoso

MACAU Govt payday only four years after deal Already about 1 billion patacas under market value, payment from the sale of land near the airport was only settled in 2010

The controversial sale of land where La Scala is being built will be the basis of a lower court trial. The sale has been named in the latest Ao Man Long trial

Late on Friday evening, Mr Lo told the South China Morning Post he faced charges “about the same thing [as Friday’s hearing]”.

First steps Last Tuesday, Mr Lau’s lawyers said the billionaire “was not formally charged whether in Hong Kong or in Macau connection with the incident”. The “incident” was the sale of the land near the airport in 2006 by the Macau government at a price at least 830 million patacas less than its surveyed value. Both businessmen denied having broken any Macau law. There is no public information on whether the related case will involve any other companies named in the third Ao trial which began last week. CCEECC (Macau) Companhia de Construção e Engenharia Civil China, Limitada; ATAL Engineering Ltd.; and Belgian company Waterleau Global Water Technology were mentioned in a deal labelled to construct a building at the Zhuhai-Macau Cross-Border Industrial Park. On Friday, Mr Lo said a senior official with property brokerage Jones Lang LaSalle, Tony Lo Hing Hung, approached him in late 2004 or early 2005, telling him there were “a few” plots for sale in Macau, including a site opposite Macau International Airport. He said he was interested and bought offshore Moon Ocean as a

vehicle to bid on the land. “I didn’t read the tender document at all,” Mr Lo said, since Jones Lang LaSalle prepared it with a Hong Kong firm of architects. “I only instructed Tony Lo to put in the price advised before the tender submission.” Jones Lang LaSalle said Thursday was assisting an investigation by Macau’s anti-graft body but gave no further details on which case that may be. Tony Lo testified later on Friday that he did not know the bid price. “I was responsible for organising the tender documents but Steven Lo gave me the content,” he told the court.

Advance payment Steven Lo on Friday denied bribing Mr Ao. He said the head of the San Meng Fai Engineering & Construction Co. Ltd., Ho Meng Fai, had asked for an advance payment of 20 million patacas. Mr Ho has been sentenced for corruption in another case linked to Mr Ao, and remains at large. Mr Lo told the court Ho Meng Fai gave him a bank account that he believed was controlled by a supplier. He said he did not know the account belonged to Ecoline, an offshore company controlled by Mr Ao. The money for the deal originally came from Chinese Estates, as part of a loan agreed with Mr Lau, the court was told. The billionaire

also received an option to buy a 70.01-percent share in Moon Ocean, the offshore company that ended up in control of the land near the airport. A few months later, Chinese Estates paid HK$1 million to take on the option. In March last year, the company bought the remaining 29.99 percent. Mr Lo said in court he had met Mr Ao in Macau “once or twice” at Mr Ho’s invitation but never to discuss the sale of the land.

he Macau government received payment for land near the airport from a company involved in the La Scala development in 2010 – four years after the deal was done. Details of the transaction are at the heart of the latest set of graft charges against jailed former land and public works secretary Ao Man Long. The trial in the Court of Final Appeal began last week and is due to continue today. A spokesperson for the Land, Public Works and Transport Bureau confirmed to Business Daily that “about 1.2 billion patacas (US$150 million) were paid in 2010 to the administration from the transfer of the plot’s concession rights”. Four years earlier, the 78,742-square-metre plot of land was sold for just 1.37 billion patacas (US$171.4 million) to Moon Ocean, a company controlled by Hong Kong tycoons Steven Lo KitSing and Joseph Lau Luen Hung. Less than two years earlier, real estate firm Savills Hong Kong said the plot was worth about 2.2 billion patacas. The detail was made public in court last week. The plot was originally granted to the Macau International Airport in 1990 but most of it was later transferred to five private companies, all of which were controlled by the government. The government received only 1.2 billion patacas, because it held 88 percent of the shares of each of five companies. Macau International Airport Co. and Stanley Ho Hung Sun’s Sociedade de Turismo e Diversões de Macau each held 5 percent in the five companies, and Tai Fok Wah Investment – founded by former Chief Executive Edmund Ho Hau Wah and businessman Ng Fok – had a combined holding of 2 percent. On Friday, Macau International Airport Co. chairman Deng Jun said he had asked the then director of the Financial Services Bureau, Carlos Ávila, when it would be possible for the company to receive its share of the money since the land had already been sold. “He told me that would only be possible two years later,” Mr Deng told the court. But Mr Ávila, who left the Financial Services Bureau in 2007, denied these remarks when Business Daily tried to ask why it would take so long for the payment to be done. “That is absolutely false,” he told Business Daily without going into details. Four of the five companies who owned the plot where the residential complex La Scala is now being built were wound up in 2010, the same year in which the government received the money. When Business Daily asked the bureau to clarify why payment was made only after the companies were liquidated, a spokesman offered no comment, saying the case was ongoing in court. V.Q.

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business daily April 23, 2012

macau Photo by Manuel Cardoso

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HOSPITALITY Satisfaction (almost) guaranteed The University of Macau has just announced the results of a wide-ranging survey on the profile of tourists that visit the city to gamble. Some data from the survey, mainly concerning tourist satisfaction, were shared with the press. According to the director of the Institute for the Study of Commercial Gaming, more than 7,000 people were interviewed. Most were overwhelmingly satisfied with their Macau visit. In fact, nearly 85 percent were satisfied, of which 8 percent were very satisfied. These judgments are subjective in nature and, often, sensitive to the context and wording of the question. But they are positive overall. Though not directly comparable, they are mostly in line with the quarterly figures published by the Statistics and Census Department.

Visitors level of satisfaction with services

Bill for new St. Joseph campus doubles

85 80 75 70 65 60 55

The new campus being built in Ilha Verde likely to blowout to 600 million patacas

Source: DSEC

The bureau’s regular survey on visitors’ expenditure includes a few questions on the levels of satisfaction. They focus on aspects including food and lodging services, tourist attractions and gaming facilities. The overall figures, positive as they are, should not obscure some more detailed results. These are not always as positive. For example, by the end of last year, Japanese tourists rated the city’s “environmental hygiene” as having declined to 39 percent from 59 percent a year earlier. This and other negative changes deserve closer scrutiny by the city’s tourism authorities. J.I.D.

Cláudia Aranda claudia.aranda@macaubusinessdaily.com

here is still no date for the completion of the new campus of the University of St. Joseph. However, the estimated costs – initially budgeted at 250 to 300 million patacas – may have already doubled, outgoing rector Ruben de Freitas Cabral told Business Daily on Friday. Mr Cabral leaves the role to 65-yearold Father Peter Stilwell, until now the vice-rector of the Catholic University of Lisbon. Father Stilwell takes over as the new rector on May 1. “When the process began a few years ago, we would have been able to build the same project for an amount between 250 million patacas and 300 million patacas. Right now, I think, the works should cost around 500 or 600 million patacas,” Mr Cabral said.

Financing resources Mr Cabral, 66, resigned about six

months after the beginning of his third term as rector, stating personal and family reasons. He had been appointed last October for another period of four academic years by the Cardinal Patriarch of Lisbon. “What pushed me to accept the third term was the construction of the campus,” he said. The construction of the campus is a project that began to be discussed in 2003, when Mr Cabral commenced his first term. “There has always been a need to find a new campus,” he said. The facilities were “very cramped” and a meeting with the Bishop was held in 2004 “to discuss the location for the construction” of the new campus. The Macau Diocese provided the land where the campus is being built. But then it was necessary to find financial support and there were delays. The university, as the developer, had awarded contracts concerning

the foundation phase of the construction that started in December 2009. The project was then expected to take 18 to 24 months, according to a statement by the university. The project has been managed by Macau Professional Services, Mr Cabral explained. The company has been involved in the project from the beginning and is a subsidiary of CESL Asia. Macau Professional Services has provided architectural and engineering consultancy services as well as contract and construction management. In the same statement, the university announced that the construction of a new campus at Ilha Verde – for both the Colégio Diocesano de São José (Senior Secondary Section) and the University of St. Joseph – had been approved by the government. Former Chief Executive Edmund Ho and Bishop of Macau D. José Lai presided over the groundbreaking

April 23, 2012 business daily | 5

MACAU

A college that runs on its own steam The departing rector of the University of St. Joseph says the school has reached self-sufficiency and sustainability

The completion of the campus in Ilha Verde has been successively postponed

ceremony on December 15, 2009. Mr Cabral confirmed that a grant of 150 million patacas had been provided “at the very beginning of the process, through the Macau Foundation, and by decision of the former chief executive, Edmund Ho”. The amount was supposed to be allocated in three tranches: two of 60 million patacas and the third of 30 million patacas. The first tranche of 55 million patacas has been assigned, Mr Cabral said. The delivery of the other tranches is pending the evolution of the construction process.

When the process began a few years ago, we would have been able to build the same project for an amount between 250 million patacas and 300 million patacas. Right now, I think, the works should cost around 500 or 600 million patacas Ruben de Freitas Cabral

Rising costs The completion of the campus has been successively postponed. In an interview published in May 2010 by Portuguese-language newspaper Jornal Tribuna de Macau, Mr Cabral said it was expected that the university could inaugurate the

new campus between March and May this year. At the time, the rector reported to the publication that the new campus was delayed “due to problems with the contractor, who had difficulties finding qualified people”. They were also facing problems with people who were illegally occupying the land. Two years later, only the first part of the project is complete. Mr Cabral, however, did detail the reasons for the successive delays. He says two companies remain in charge of the project management, Macau Professional Services and Widnell Sweett, a construction and property consultancy company that specialises in quantity surveying and has an office in Hong Kong. Bids were launched for the construction of the superstructure. From an initial list of 11 bidders, Widnell shortlisted three companies, Mr Cabral said. Due to the delay in the process, prices had to be revised. When companies “released the first proposal they did not calculate the possible cost increase due to the volatility of prices of materials and products,” he said. The companies had to “re-calculate the costs closer to reality, to update the first bid ... formulated over a year ago,” he said. He said there was now enough data to reach a decision in the award of the contract. “The verdict is now up to someone who is no longer me,” he said. Speaking to the Portuguese Catholic news agency Ecclesia on April 19, Father Stilwell said he intended to take forward the installation of the new university campus. “The new campus already exists, but the construction has to be taken to the end in order to complete this work,” he said. Father Stilwell has also pledged “to ensure the [university’s] competitiveness and excellence in teaching”.

Critical mass Most universities are organised within a logic of continuous growth. It is said that, generally, if a university does not have 8,000 or 9,000 students, it is hardly successful. In this case, “with 1,827 students [it] works perfectly and is profitable”. The university is a non-profit organisation, and profits “are reinvested in improving the academic system,” he said. Tuition fees are the main source of

income but the university also benefits from some government’s subsidies. However, Mr Cabral said there was little support from the Macau Foundation, compared with the millions it sends to other private universities. The challenge in terms of management model was to identify the critical mass that generates growth, he said. Macau has more than half a million of people, with a declining school population. So the critical mass could not be found in the number of students. “What we did was to create the critical mass in the way knowledge is being managed, by sharing subjects,” he said. Between nine and 12 credits – each credit worth 15 hours of teaching – are shared with other students of other degrees. “We can start courses with very few students without losing money,” Mr Cabral said. Three wholly-owned companies, Lotus Consulting, St. Joseph Academic Press and Centre for Languages and Professional Development have been founded to generate business. The university also owns 20 percent of Axius Designs Company, which does graphics and web design and development. Asked if it makes sense to have private companies under a higher education institution, Mr Cabral argues that the university can benefit from it. “There is a significant gain for the university to create independent structures engaged in commercial activities. The market is limited and, therefore, the turnover of such companies is now much smaller,” he said. Mr Cabral will enjoy a year-long sabbatical starting May 1. He intends to take the university as an illustrative case study to write a book: “Idea of a University – The making of University of St. Joseph”. C.A.

Photo by Tribuna de Macau

he University of St. Joseph “has no debts, its economic and financial situation is highly sustainable and is completely self-sufficient”, outgoing rector Ruben de Freitas Cabral told Business Daily. Sources contacted by the newspaper have raised doubts about the positive results claimed but Mr Cabral insisted that the financial situation could not be better. “We are debt free, have a cash flow running smoothly and we had last year a positive result of 9 million patacas on a budget of 86 millions patacas,” he said. “It is striking ... not many companies achieve these results.” The university was founded in 1996 in a partnership between the Diocese of Macau and the Catholic University of Portugal. Currently, the institution hosts almost 2,000 students and offers nearly 60 undergraduate, masters and doctorate programmes. “Continuous positive financial results would allow funding academic and scientific research,” Mr Cabral said. “Simulations show it is possible.” When the outgoing rector was appointed, the institution was “very small” with 180 students, he said. Mr Cabral said he had begun “to rethink what a university should be” shortly after being appointed rector.

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business daily April 23, 2012

macau

Rapid, rising tide The pattern of consumption of visitors is, inevitably, different from that of residents. The impact of price rises will, therefore, be felt differently by each of those categories of persons. Consequently, the Statistics and Census Service estimates a price index for tourists on a quarterly basis. The structure of the index is heavily influenced by restaurant and hotel expenses, which together contribute more than 40 percent of the index. Typical shopping expenses such as food and beverages, and clothing and shoes represent another 30 percent of the index. The last figures published indicate a significant pressure on the prices of these types of goods and services.

Promise of better cultural, trade ties with Brazil Home-grown business association prepares agreement with 300,000-strong Brazil confederation Cláudia Aranda

claudia.aranda@macaubusinessdaily.com

Tourist and Consumer Price indices: Homologous rates 20 15

Board president Frederico A. Dos Santos Rosário

The city is already dealing with double-digit levels of inflation. The overall rate of inflation for the last quarter of 2011 ran at almost 19 percent. As most of these goods and services also form part of basket of goods and services used to measure the expenditure of residents, this is bad news generally. The containment of the overall inflation rate will be increasingly dependent on the evolution of the prices of those goods over which the government policies have a higher degree of control – such as education, for example – or a heavier government intervention in sectors such as housing or fuels.

he Association for the Promotion of Culture, Arts and Economics between China and Portuguese-speaking countries has reached a preliminary agreement establishing closer links with the National Confederation of Services of Brazil. The association expects to sign a memorandum of understanding with the Brazilian confederation next month to create an economic cooperation bureau to liaise with Brazilian enterprises, board president Frederico A. Dos Santos Rosário told Business Daily. The confederation was established in March 2005. It represents more than 300,000 companies across industries including information technology, event promotion, telecommunications, street cleaning, insurance, private security and culture.

Govt keeps close eye on mainland truckers Transport Bureau says it will tighten its management of mainland truck drivers using ‘special driving licences’

Photo by Geoff Leong

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Mr Rosário expects to lead a delegation of businessmen from lusophone countries to Inner Mongolia in July. The association is also in negotiations with chambers of commerce of other Portuguesespeaking countries to promote their enterprises in the mainland. The details were announced at Friday’s inauguration of the association’s governing bodies until 2015. The 200-member association was set up last November. Central to its aims are the promotion of business between small and medium-sized enterprises. A 30-member task force, mostly young entrepreneurs, are the association’s core. Mr Rosário said there are many young people involved who might be “ideal coordinators to promote strategic relations between entrepreneurs”.

nspection of the “special driving licences” used by mainland cargo transportation drivers will be reinforced before the new regulations come into force, a transport bureau spokesperson told Business Daily. The move was announced by bureau head Wong Wan at a meeting on April 18 with 11 representatives of the Associação de Transporte de Mercadorias Além Fronteiras — Macau. The association launched a three-day strike last week to urge the government to cancel the special driving permits that allow drivers from the mainland to cross into Macau. The six written requests the association presented to the government on April 17 were the main topic of discussion. The bureau reported that the association presented two new proposals at the same meeting, but requested that they were not made public. The spokesperson said both parties agreed that the Transport Bureau “would coordinate with other related parties before calling for an all-party meeting to reduce divergence as much as possible”. The bureau also pledged that it would, in the shortest time possible, notify the government departments concerned “to consider the use of local employees as a priority for public projects and services carried out in Macau or other services related to cross-border cargo transportation”. The Transport Bureau confirmed it had revised the “Special Driving Licence” regulation. It is expected that the draft text will enter legislative proceedings by the end of this year. C.A.

Weather Beijing 26/14o C Changchun 25/14o C

Harbin 21/10o C

Xian 30/12o C Shanghai 26/18o C Chengdu 29/16o C Kunming 25/13o C Haikou 32/25o C Sanya 31/26o C

Guangzhou 27/22o C

MACAU (23-28 April) Day

Temperature

Humidity

04/23

22/26o C

75/95 %

04/24

23/27o C

80/95 %

04/25

21/25o C

85/95 %

04/26

20/27o C

70/95 %

04/27

21/27o C

65/90 %

04/28

21/26o C

80/95 %

Shenzhen 26/23o C

ASIA (today)

Hong Kong 26/25o C

Manila

Macau 22/26o C

TOKYO

Jacarta

33/25 C

30/25o C

17/11o C

32/24o C

Bangkok

SEOUL

K. lumpur

35/28 C o

SINGAPORE

20/10o C

33/26o C

taipei

28/22o C

April 23, 2012 business daily | 7

Photos by Manuel Cardoso

MACAU

InBrief Diversify more deeply into tourism, says Bai

There are currently about 60 yacht berths in Lam Mau Tong

Recognise boating licences to improve regional sailing

Macau should continue to diversify its economy by becoming a global tourism centre and a regional platform for commerce and trade between the mainland and Portuguese-speaking countries, Bai Zhijian, the director of the Liaison Office said on Friday. Bai made the comments at a conference on the city’s development organised by the government and liaison office. At the same meeting, Qiao Xiaoyang, chairman of Hong Kong and Macau Basic Law committee, reiterated the importance of the success of “one country, two systems” to sustainable development.

Call to fully implement Individual Travel Scheme for yachts from Guangdong, Hong Kong and Macau Tony Lai tony.lai@macaubusinessdaily.com

he Macau Maritime Administration and mainland authorities have been urged to recognise each other’s boat licences to make the “individual travel scheme” for yachts meaningful. The maritime authority said earlier this month that it planned to start an “individual travel scheme” for yachts from Guangdong, Hong Kong and Macau to make it easier for pleasure craft to move through each other’s territorial waters. Macau Yacht Club vice-president Fok Siu Kei was quoted by

Macau Daily News as saying that currently there was no “mutual recognition” because the mainland is yet to say whether it accepts licences from Macau. Macau Yacht Club president Vicente Ó Man Seng also hopes for an early implementation of the scheme so that vessels can sail more freely through the Pearl River Delta region. The current policies of the Macau government suit the scheme but there is much room for improvement in the yacht club facilities and the

harbour, China Cruise and Yacht Industry Association vice-secretary general Xie Baiyi said. The Macau government has said that it will find a location for more docking berths, if there are not enough. The Macau Yacht Club says there are currently about 60 yacht berths in Lam Mau Tong but that number can be increased to 100. Mr Ó hopes the government plans accordingly. He expects the club’s renovation of his club to take six more months and has applied to the government for an extension.

No timeline for Universal Suffrage Kelsey Wilhelm kelsey.wilhelm@macaubusinessdaily.com

representative of the population and should be maintained with an “adequate” increase in the number of directly and indirectly elected members. He praises community associations, of which there are over five thousand, saying they nourish patriotism and have helped the city find social stability and seek an increase in youth participation. He considers the continuation of indirectly elected deputies as “positive” to equalise the participation of various communities and civic groups in politics. There have been proposals for an increase in the number of deputies in the assembly and a widening the Electoral Commission for the Chief Executive by creating a youth participation platform. But Mr Lao believes this could cause

Three new ferry routes will start this year from Taipa’s Pac On Temporary Ferry Terminal, Maritime Administration head Susana Wong Soi Man said on Thursday. Ms Wong said the government had approved Shun Tak-China Travel Ship Management Ltd. to sail to Shekou in Shenzhen, Yuet Tung Shipping Co. to serve Zhuhai’s Wanzai and for Far East Hydrofoil Co. Ltd. to operate on the route to Sheung Wan in Hong Kong. Far East Hydrofoil is part of Shun Tak-China Travel Ship Management. Ms Wong said the companies would have six months from receiving their permit to commence services.

Hebei inks tourism deal

Basic Law excludes the possibility of all deputies being elected by a popular vote, says government expert

hanging the political system demands consensus across the territory’s diverse population and varied political positions, says Political Studies Bureau Coordinator Lao Pun Lap. In a document released by the Government Information Bureau, Mr Lao urges the need for the community’s participation and popular support in the evolution of a consensus. Mr Lao’s comments came at the end of the second in a series of five rounds of sessions on the development of Macau’s political system. Two of the sessions in this round were open to the public, yet over half of the population was unaware of the fact, according to a study by the Public Opinion Programme of the University of Hong Kong. Mr Lao says the current formula in place for the constitution of the Legislative Assembly is

Govt approves trio of new ferry routes

“confusion and double classification”. Instead, he proposes that all sectors contribute internally to higher youth participation. On the question of “double Universal Suffrage”, governing the election of the Chief Executive and to the assembly, he doubts if it is currently possible in Macau. The Basic Law states that the legislative body must be made up of “a majority of elected members”. Mr Lao believes it excludes the possibility of all deputies being elected by universal suffrage. He claims there is no “calendar for Universal Suffrage”. He also calls for the government to give priority to economic development in government actions. He cites the existence of opportunities to push sustainable development and continued development of living conditions.

The Hebei provincial government will expand its tourism marketing campaigns to Macau residents. In Macau on Friday, Zhang Qingli, the director of Hebei’s Permanent Commission of the Popular Assembly, met Chief Executive Fernando Chui Sai On. The pair signed an agreement on tourism cooperation and discussed regional cooperation under the Framework Agreement on Cooperation between Guangdong and Macau. Mr Chui said the meeting would set the tone for deeper relationships with Hebei, the province surrounding Beijing. Friday’s visit was the first Mr Zhang has made to Macau.

Mandarin air starts Taichung service Taipei-based Mandarin Airlines Ltd. started regular flights between the central Taiwan city of Taichung and Macau on Saturday, Central News Agency reported. The airline will fly the route seven times a week with a fleet of Embraer jets. The flying time is about 90 minutes. At the ceremony to launch the new route, Taiwan officials said they hoped regular flights would boost tourist numbers heading to central Taiwan.

8 |

business daily April 23, 2012

GREATER CHINA

Volkswagen deliveries up 16 percent Volkswagen AG, Europe’s largest carmaker, said China’s slowing automobile industry is facing rising inventory levels. China’s auto market had inventory of about 2.3 months during the first quarter, compared with 2 months a year earlier, Soh Weiming, executive vice president at Volkswagen China, said in Beijing yesterday. Stockpiles may rise to 2.6 months by the middle of the year, he said quoted by Bloomberg. Volkswagen’s own inventory is at about 1.4 months, according to a company presentation. Sales in the world’s biggest vehicle market shrank during the first quarter, prompting an official at China’s Association of Automobile Manufacturers to say last month that industrywide deliveries may miss CAAM’s 8 percent growth forecast this year. Average prices of cars produced in China have fallen for three straight months as rising gasoline costs deter purchases. The Wolfsburg, Germanybased company boosted deliveries in the country 16 percent to more than 633,000 vehicles in the first quarter of the year, compared with a decline in total industry deliveries. Volkswagen said it’s sticking to its projections for China’s car market to grow 5 percent to 10 percent this year, Soh said.

China Mobile goes 4G in Hong Kong China Mobile posted a 3.5 percent rise in quarterly profit and marked its entry into 4G wireless technology on Friday, launching services in Hong Kong as it aims to boost data revenue and eventually clinch a deal to offer Apple’s iPhone. The world’s biggest carrier by subscribers is also testing the high-speed 4G technology at base stations in mainland China, where it hopes to start services commercially in as early as two years and attract smartphone users who stream videos and play games like “Angry Birds” and “Fruit Ninja”. China Mobile is the only Chinese carrier that does not have a contract with Apple to sell iPhones, and development of its 4G technology could help pave the way for it to sell the U.S. smartphone in China, which has the world’s largest mobile subscriber base with over a billion users. China Mobile is upgrading its network as it looks to sell more smartphones to boost data revenue, which is growing more than voice revenue. Still, a shift to high-end 4G services could take time in China, where many users just make phone calls and send text messages.

HK, China shares up on financial stocks The Hang Seng index ended the week up 1.5 percent, while the Shanghai Composite rose 2 percent Vikram Subhedar

ong Kong and China shares ended last week higher, helped by gains in financial stocks on hopes of more policy easing by Beijing, although volume in the territory’s stocks fell to a three-month low because of renewed uncertainty over Europe. Earlier this week, the official Xinhua news agency quoted an unidentified central bank official as saying China will increase liquidity both through open market operations and by cutting banks’ reserve requirements to steer the economy towards a soft landing. That triggered cautious buying in Chinese financials that had already dropped because of weak 2011 earnings and would directly benefit from any monetary easing. The Hang Seng index ended the week up 1.5 percent. On the mainland, the Shanghai Composite rose 1.2 percent on Friday bringing its weekly gains to 2 percent. The CSI300 index on which China’s stock index futures are based rose 1.8 percent on the week. “This remains a policy-driven market and all eyes are on China,” said Norman Chan, head of investments at wealth manager Calibre Asset Management, which

invests in Chinese and Asian funds, and has a preference for consumption-related names. Chan said they have a 16 percent weight in their fund portfolios dedicated to Chinese stocks while their overall allocation to equities has risen to 75 percent of all assets from about 65 percent at the end of last year. “It won’t be smooth but I still think 2012 is going to be an up year. We’ve seen the first stage of the market turnaround last quarter and now investors need to be selective about picking stocks,” said Chan.

Retailers up Global investors were wary heading into the weekend after renewed worries on the euro zone debt crisis kept riskier assets under pressure after a better-than-feared Spanish bond auction failed to allay concerns that Spain may follow Greece, Ireland and Portugal in needing an international bailout. Hong Kong investors took profits on recent outperformers such as internet firm Tencent Holdings which hit a series of record highs this week. Tencent shares fell 1.4 percent on Friday but were still up

about 4 percent on the week. The 14-day relative strength index of Tencent’s shares rose to as high as 76.5 this week surpassing the 70-level that indicates the stock is overbought, prompting technical analysts at brokerage CLSA to recommend profit-booking in the stock. Retailers were the top performers on Friday with Want Want China, which sells food and beverages, up 3.6 percent and the biggest gainer among Hang Seng constituents. Italian fashion house Prada rose 4.6 percent Chinese insurers which had rallied on Thursday with strong volume in Hong Kong and Shanghai on speculation China’s industry regulator would expand investment options for the sector, also held onto gains. China Life, the country’s biggest insurer, rose 0.5 percent helping the Hang Seng index close just above its 50-day moving average, currently at 20,990.8. Good demand for the shares as well as sustained strength in mainland markets could revive interest in Chinese brokers such as Citic Securities, the biggest player in the sector. Reuters

Haitong prices HK offer near bottom of range Elzio Barreto

aitong Securities Co Ltd, China’s second-biggest brokerage by assets, priced its US$1.7 billion Hong Kong share offering near the bottom of an indicative range on Friday, leaving room for its shares to climb at the start of trading and draw more investors in what has been a slow market for listings in 2012. As the biggest public offering of new shares in Asia Pacific so far in 2012, Haitong’s deal has been closely watched by investors,

bankers and a growing list of companies hoping to raise funds in Asia’s top IPO destination. Haitong, which is already listed on the Shanghai stock exchange, is pricing its shares at HK$10.60 each, it said in a statement posted on the Hong Kong stock exchange. It had marketed the offer at an indicative range of between HK$10.48 and HK$11.18. It is selling 1.229 billion new shares, which puts the total deal value at HK$13.03 billion (US$1.7 billion).

The price of the Hong Kong offering is equivalent to a 16.7 percent discount to Friday’s closing price of 10.33 yuan for Haitong’s shares listed in Shanghai. “It always makes sense from a capital markets perspective to leave some money on the table,” said a source involved in the Haitong deal, who was not authorised to speak publicly on the deal. The shares will begin trading in Hong Kong on April 27. Reuters

April 23, 2012 business daily | 9

GREATER CHINA

Market to play bigger role in yuan rate: Yi Investors can play a bigger role in determining the value of the Chinese currency Ye Xie

hina’s decision to widen the yuan’s trading band against the dollar means investors can play a bigger role in determining the value of the currency, People’s Bank of China deputy Governor Yi Gang said. “It’s time to let the market more or less decide the exchange rate while reducing the intervention on the market,” Yi said Saturday at an event in Washington, where he’s attending the spring meetings of the International Monetary Fund. He said market forces have already played an “important role” in determining the currency’s value, which has been a “persistent twoway bet” for some time. China this month doubled the yuan’s trading band to 1 percent from 0.5 percent, the first widening since 2007. The yuan has weakened 0.2 percent against the dollar this year after rising 31 percent since July 2005 when the government abandoned a peg to the U.S. currency. Premier Wen Jiabao said on March 14 the yuan may be near an “equilibrium” as export growth slows and the government promotes policies to boost imports and consumption. The nation in February posted the biggest monthly trade deficit since at least 1989. The 12-month non-deliverable forwards showed traders are betting the yuan to be little changed from 6.3086 per dollar on April 20, according to data compiled by Bloomberg.

working paper this month. Two thirds of the decline in the surplus was “structural” as rising labour costs and a stronger currency erode exports’ competitiveness, according to Yi. The rest of the decline was due to the “cyclical” drop in demand from Europe and the U.S., he said. A more balanced trade portfolio reduces the needs for the central bank to intervene in the currency market to offset dollar inflows, according to Yi, who is also head of China’s State Administration of Foreign Exchange. China has amassed US$3.3 trillion in foreign reserves, which is the world’s largest and equivalent to the size of the German economy. “It doesn’t make sense to continue to accumulate reserves,” as imports surge, said Yi. China’s imports may double to US$4 trillion by 2020 from an estimated US$2 trillion by year-end, he said.

Responsible investor Yi said China is a “long-term,

responsible investor” in the U.S. Treasury market. China is the largest creditor to the U.S., holding US$1.2 trillion in Treasuries as of February. Since the U.S. is the largest fixed income market, “it’s very natural to invest quite a large proportion” of China’s reserves in Treasuries, he said. “That’s completely a market decision.” At the same meetings, central bank Governor Zhou Xiaochuan said China supports boosting the IMF’s lending resources even as it pushes the Washington-based lender to continue implementing a promised overhaul of the quota system that determine members’ power and voting rights. Zhou said China’s growth outlook “remains positive” after the world’s second-biggest economy expanded 8.1 percent in the first quarter. While “near-term” inflation pressure have “moderated,” policy makers remain “vigilant” amid “ample global liquidity,” he added. Bloomberg

Account Surplus

Yi Gang says China is a ‘long-term, responsible investor’ in the U.S.

Beijing poised to crank up capital account opening and the reformers are trying to get as much through it as quickly as possible,” said a source in institutional finance who is in close contact with China’s financial authorities. Relaxing rules on China’s Qualified Domestic Institutional Investor (QDII) scheme would aim to raise by US$25 billion the amount Chinese residents can pump overseas. “QDII is likely to get a major boost. The CSRC has already got a proposal to simplify the rules and take the overall level to about US$100 billion,” one source with ties to the PBOC told Reuters, requesting anonymity to avoid repercussions. “The thing to look for is incremental

Taiwan dollar advanced on inflation

reform rather than big, one-off moves,” the source said. It would follow moves earlier this month on the Qualified Foreign Institutional Investor (QFII) scheme for inbound investments, which hiked quotas by US$50 billion to US$80 billion. That fits in well with expectations of banks such as HSBC. “The most likely moves that authorities would like to pursue involve further capital account opening - increasing the channels for cross-border flow of renminbi, both for inflows and outflows,” said Dominic Brunning, an FX strategist in Hong Kong.

Taiwan’s dollar advanced for a second week as the government vowed to contain inflation. The overnight interbank lending rate reached a threeyear high. The currency advanced for a second day after the cabinet said in a statement late last week that it will “closely monitor” inflation, and may use monetary policy to counter rising prices if needed. The central bank may allow faster gains in the overnight rate and the local dollar, the Commercial Times reported on April 17, citing an unidentified official. Consumer prices rose 1.21 percent in March from a year earlier, after a 0.23 percent increase the previous month, government data show. “The central bank is quite determined to control inflation,” said Tarsicio Tong, a currency trader at Union Bank of Taiwan in Taipei. “It’s allowing rises in the overnight rate to drain excess cash from the system.” Taiwan’s dollar strengthened 0.04 percent on Friday to NT$29.521 against its U.S. counterpart and advanced 0.02 percent this week, according to Taipei Forex Inc.

Reuters

Nick Edwards

Orders for Taiwan’s exports fell by less than expected in March and were stable from the previous month, in a sign that Asia’s exporters may be starting to see better times, though Europe’s woes and uncertainty over Chinese demand will continue to cast a shadow. Export orders, mostly of electronics and communications goods, fell 1.58 percent from March 2011, better than the median forecast of a drop of 2.7 percent in a Reuters poll. From February, orders slipped 0.05 percent. With the previous months’ figures distorted by Lunar New Year holidays, the March data provided the first clear view of the trend in orders, which are a leading indicator of demand for Asia’s exports and for hi-tech gadgets - and typically lead actual exports by two to three months. “Comparing the values of export orders in March with those in November which were free from holiday effects, there was actually growth across almost all product categories, suggesting a normalisation of Taiwan’s external demand,” said Raymond Yeung, senior economist at ANZ in Hong Kong. A marked slowdown in global demand had pushed Taiwan into a mild recession at the end of 2011. Its actual exports contracted in March, as did those of fellow tech exporter South Korea, while Singapore’s exports of electronics recovered though its overall exports fell. Taiwan’s Ministry of Economic Affairs said on Friday that it sees export orders in value terms in the second quarter as significantly higher than in the first. Reuters

China’s surplus in the current account, the broadest measure of trade and services, has dropped to 2.8 percent of gross domestic product last year from 10.1 percent in 2007, a reversal that was “sharper and more persistent than expected,” IMF staff wrote in a

hina is poised to boost quotas on outbound investment schemes to US$100 billion and cut barriers to moving foreign currency in and out of the country in a series of swift but small steps to crank open its tightly controlled capital account. Sources in close, direct contact with the People’s Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC) say reforms are ready to be rushed out over the next 12 months to boost two-way capital flows, drive diversification of business finance and accelerate corporate currency hedging. “There is a window of opportunity

Exports showing signs of recovery

10 |

business daily April 23, 2012

ASIA Asian currencies drop most in two weeks

Masaaki Shirakawa says monetary easing alone cannot beat deflation

Japan, the limits of monetary easing Bank of Japan Governor warns of the dangers of too much easy money for too long Leika Kihara

on the risks of easy policy and angered domestic lawmakers who thought he was not aggressive enough in beating deflation.

Deflation, a symptom This week in New York and Washington, ahead of weekend meetings of the International Monetary Fund and the Group of 20 leading economies, Shirakawa spent most of two speeches arguing that deflation was only a symptom of the bigger ills plaguing Japan, such as its shrinking population and low productivity. “If the Japanese economy is to extricate itself from deflation and return to a path of sustainable growth under price stability, it requires both policies aimed at enhancing growth potential and supporting monetary stimuli,” he said in New York on Wednesday. A day later, he preached to an audience in Washington about the danger of keeping monetary stimulus in place for too long, citing Japan’s failure to forestall an asset price bubble in the 1980s that led to a severe economic downturn when it burst. “At this critical juncture, we need aggressive monetary easing. That’s without question,” Shirakawa told an event at the Japanese embassy. “But we can’t continue this easy policy forever. At some point, we

need to reverse monetary policy.” And on Saturday, he warned that keeping bond yields low could dull the sense of urgency among governments about dealing with their fiscal problems.

Bloomberg

Related costs To be sure, Shirakawa is the most skeptical member of the BOJ board about the benefits to the economy of further easing. Others appear ready to pull the trigger as they worry that Europe’s lingering debt crisis could hurt global growth and revive demand for the safe-haven yen, pushing up the currency and hurting Japan’s export-reliant economy. One of his two deputies, Kiyohiko Nishimura, said in western Japan on Wednesday that the BOJ was ready to loosen policy further to support the economy, giving the strongest signal yet of additional stimulus since the central bank surprised markets by taking easing measures in February. Still, Shirakawa is likely to be cautious about more extreme options that may be put on the table next week. That reluctance could trigger a market backlash as investors who had sold the yen on expectations of more, bold BOJ stimulus could buy back yen on disappointment, hurting Japanese equities on the way.

File photo

ank of Japan Governor Masaaki Shirakawa has been doing his best to keep in check expectations of major new stimulus by the central bank next week. Three times during a week-long tour of the United States, Shirakawa stressed that monetary easing alone cannot beat deflation and that too much stimulus, in the form of quasi-fiscal policy, could have drawbacks. He walked a fine line between sounding the message that easy policy still has a role in supporting Japan’s weak economy and warning of the risks of too much easing. Sources familiar with the central bank’s thinking have said the BOJ, when it meets on Friday, will consider an increase in asset purchases as way to give a further boost to the economy and to show its determination of achieving the 1 percent inflation target it set in February. Investors sold yen when Shirakawa said in New York on Wednesday that the BOJ will continue to pursue powerful monetary easing by keeping interest rates at zero and continuing to buy assets to nudge down borrowing costs. But that phrase was just a repeat of the BOJ’s standard line on its existing ultra-easy policy. It was added by Shirakawa’s staff who worried about a repeat of the kind of political reaction to a speech the central bank governor made in Washington last month. On that occasion he focused

Most Asian currencies weakened, adding to Fridays’s biggest loss in two weeks, as lingering concern over Europe’s debt curbed appetite for emerging-market assets before Spain and France sell more bonds. Thailand’s baht declined for a second day and South Korea’s traded near a oneweek low as regional stocks fell. Spain and France plan to raise as much as 13.5 billion euros (US$17.6 billion) from debt, with Italy predicting a deeper economic contraction this year. The Philippine peso reversed losses before the central bank’s decision to keep interest rates unchanged was announced, after policy makers cut borrowing costs at the previous two meetings. “We are seeing risk-off sentiment due to the European debt crisis again,” said Disawat Tiaowvanich, a foreign-exchange trader at Bangkok Bank Pcl. “That’s the major factor moving the currency market today.” The baht slipped 0.2 percent to 30.89 per dollar in Bangkok, according to data compiled by Bloomberg. The won dropped 0.1 percent to 1,138.05 at the close in Seoul, while India’s rupee fell 0.1 percent to 51.8262. China’s yuan declined 0.08 percent to 6.3078. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, was little changed after losing 0.2 percent on Friday, the most since April 4, as government bond yields rose in Spain and France.

Reuters

S.Korea’s warns of surge in govt debt

outh Korea’s government debt could surge above 100 percent of the country’s annual gross domestic product by the year 2030 from just a little more than 34 percent now, the country’s central bank said in a report released yesterday. Asia’s fourth-largest economy would see slower growth due to the declining pace of increases in capital and labour input, whereas government spending would surge to cover financial debts at public companies and public pension schemes, it said. “The country needs to begin drawing up countermeasures from now to get better prepared for the aged society (ageing population) society and prevent macroeconomic instability in advance arising from the weakening fiscal position,” the Bank of Korea report said. If the government did not need to provide support for the public corporations, the report said its baseline projection was for the central government’s debt to grow only modestly to 37.3 percent of GDP by 2030. Reuters

Jakarta plans to sell local bonds Jakarta aims to issue Indonesia’s first ever municipal bonds this year to take advantage of the country’s new investment grade status to fund infrastructure, a Finance Ministry official said on Friday. The planned first issue would be small at 1.7 trillion rupiah (US$185 million), but if successful it could pave the way for other regional and local governments to raise money from international and domestic investors to overhaul the dilapidated roads, ports and airports that are obstacles to longterm growth in Southeast Asia’s largest economy. Industrial province West Java, coal-rich East Kalimantan, port cities Surabaya and Makassar and tourist centre Yogyakarta are also considering issuing municipal bonds to finance public projects, though these plans are at an early stage, said Marwanto Harjowiryono, director-general in charge of regional funds at the ministry. “Everyone is hoping for a success story from this first municipal bond ... We are really hopeful for Jakarta,” Harjowiryono told Reuters in an interview. “If this one succeeds, hopefully the next ones will succeed because they will give regions the chance to improve their source of financing,” said Harjowiryono, a former director at the Asian Development Bank. Indonesia sold US$2.5 billion in U.S.dollar bonds this week with yields at record lows, as it drew strong global investor demand in the first such issue since the G-20 economy won a second investment grade rating from Moody’s in January.

April 23, 2012 business daily | 11

ASIA

Japan agrees Myanmar debt write-off Tokyo has agreed to write off more than US$3.7 billion of debt owed by Myanmar and to resume development aid Daniel Ten Kate and Takashi Hirokawa

yanmar’s President Thein Sein won a debt forgiveness deal from Japan on his first visit as head of state that opens the way for the Southeast Asian nation’s biggest creditor to resume financing ports, bridges and roads. Japan will forgive 303.5 billion yen (US$3.7 billion) in loans and interest to Myanmar, according to a statement distributed to reporters before Prime Minister Yoshihiko Noda met Thein Sein on Saturday. Japan will also roll over 198.9 billion yen of debt with a new loan, while vowing to resume aid. Thein Sein is courting investment from Japan amid a shift toward democracy over the past year that’s encouraged re-engagement with developed nations after five decades of military dictatorship. Honda Motor Co. is among companies expressing interest in Myanmar, a nation of 64 million people between India and China. Japan will extend economic cooperation to “support Myanmar’s efforts for reforms in various areas towards its democratisation, national reconciliation and sustainable development,” Noda said in the statement. Japan agreed to complete a feasibility study by year’s end to develop a port and industrial estate at Thilawa, 25 kilometres south of Yangon, Myanmar’s biggest city, according to a statement. The industrial zone would promote Japanese investment and help grow Myanmar’s economy, the statement said.

Continuing changes The world’s third-largest economy pledged 403 billion yen in loans to Myanmar between 1967 and 1987, according to foreign ministry data. Japan attached conditions to parts of the debt deal announced yester-

Prime Minister Yoshihiko Noda met Myanmar’s President Thein Sein on Saturday

day, such as cancelling 176.1 billion of overdue charges after “monitoring the continuation of Myanmar’s reform efforts in a one-year period,” according to the statement. As part of the agreement with Japan, Myanmar agreed to discuss settling arrears with the World Bank and the Asian Development Bank, it said. Cheap wages, natural resources, historical ties and concern over China’s influence in Myanmar make the nation important for Japan, said Kei Nemoto, a professor specialising in Myanmar at Sophia University in Tokyo. Policy makers “are now thinking that the time is right to deepen engagement with Myanmar, otherwise Japan may lose in the competition with other countries,” he said,

noting that China, India and South Korea have increased ties with the Southeast Asian nation.

Reassess sanctions European Union envoys today will reassess sanctions on Myanmar following by-elections this month that included dissident Aung San Suu Kyi. EU governments will probably suspend most sanctions against Myanmar to reward the country for progressing from military rule toward democracy, an EU official told reporters in Brussels on Friday on condition of anonymity. The U.S. has announced that it will ease trade and financial restrictions on certain sectors, without providing details. Thein Sein met Noda after a re-

Governor of Bank of India says growth cannot pick up unless austerity brings the budget deficit down Shobhana Chandra

ndia’s government must do more to narrow its budget deficit to promote long-term growth and tame inflation, Reserve Bank of India Governor Duvvuri Subbarao said. “In India, it’s not growth versus austerity, but austerity for growth,” Subbarao said in a panel discussion moderated by Charlie Rose in Washington, where the central bank chief is attending meetings of the International Monetary Fund and Group of 20 nations. “The government has to cut its fiscal deficit in order for growth to increase.” Moody’s Investors Service, Fitch

Ratings and Standard & Poor’s have cited public finances as hampering India’s credit rating, which is at the lowest investment grade level at each company. India’s Finance Minister Pranab Mukherjee in his March 16 budget proposal sought a cap on a subsidy program that stretches from diesel to fertilisers and asked for tax increases, trying to narrow the budget gap. He projected record borrowing needs of 5.69 trillion rupees to plug a fiscal shortfall estimated at 5.1 percent of GDP in the year starting April 1, 2012. Mukherjee said

File photo

India’s deficit thwarting growth

Reserve Bank of India governor, Duvvuri Subbarao

the gap for the 12 months through March 31 will be 5.9 percent of GDP, wider than the 4.6 percent target set in 2011. India was on a path to fiscal consolidation before the global financial crisis, and then had to undertake crisis-driven fiscal stimulus measures, Subbarao said yesterday. While the nation has “recovered sooner than most other countries,” its deficit continues to rise.

Inflation strains “That is adding to inflation,” Subbarao said. “It is militating against long-term growth drivers.” India’s expansion has been hurt by declining investment and moderating

gional summit involving leaders from Cambodia, Vietnam, Thailand and Laos. Yangon had the cheapest wages among 31 cities in Asia, according to a Jetro survey last year. Workers in the former capital earned less than US$2 per day on average, compared with US$4 in Cambodia, US$5 in Vietnam and US$14 in Thailand, the report showed. Italian-Thai Development Pcl, Thailand’s biggest construction company, is pushing Japan to provide financing for an US$8.6 billion deep-sea port and industrial estate in Dawei, a Myanmar coastal town less than 300 kilometres from Bangkok. The company has named Mitsubishi Corp. and Mitsui & Co. as potential investors. Bloomberg

consumer spending after the Reserve Bank raised rates by a record 3.75 percentage points from March 2010 to October last year to fight inflation. Policy gridlock has also hampered growth in the US$1.7 trillion economy. The RBI reduced interest rates by a greater-than-forecast half a percentage point on April 17, seeking to bolster growth with the first reduction since 2009. At the same time, the Reserve Bank signaled the fastest inflation among the biggest emerging economies might limit the room for further cuts. “The government must make a stronger commitment to fiscal consolidation so that the private sector isn’t crowded out of the credit markets and the economy will become more efficient,” Subbarao said. India’s benchmark wholesale-price index rose 6.89 percent in March from a year earlier, exceeding the median 6.65 percent estimate in a Bloomberg News survey of 33 economists. Indian GDP probably expanded 6.9 percent in the year through March 31, 2012, the least in three years, according to government estimates. Bloomberg

12 |

business daily April 23, 2012

MARKETS Ticker NAME

Hang SENG INDEX Ticker NAME

PRICE

Day %

VOLUME

(H) 52W

(L) 52W

PRICE

Day %

VOLUME

(H) 52W

(L) 52W

HUTCHISON WHAMPO

75.8

0.9320905

6834427

93.1

53.6

1398

IND & COMM BK-H

5.28

0.3802281

200548279

6.75

3.46

494

LI & FUNG LTD

0.4728132

21439673

20.15

10.82

1299

AIA GROUP LTD

25026827

29.9

19.84

MTR CORP

27.45

0.3656307

1881615

28.8

22.45

2600

ALUMINUM CORP-H

3.87

2.380952

21411123

7.45

3.2

NEW WORLD DEV

9.32

-0.2141328

6629763

12.675

6.13

3988

BANK OF CHINA-H

3.28

209922511

4.43

2.2

857

PETROCHINA CO-H

11.4

-0.3496503

30500711

11.92

8.59

3328

BANK OF COMMUN-H

5.95

-0.5016722

15347989

7.7

4.15

2318

PING AN INSURA-H

-0.233827

8734144

86.85

37.35

BANK EAST ASIA

29.25

-0.5102041

1541699

34.45

21.85

POWER ASSETS HOL

1880

BELLE INTERNATIO

14.88

-0.5347594

6757748

17.54

11.38

SINO LAND CO

2388

BOC HONG KONG HO

22.9

-0.4347826

5400901

24.7

14.24

293

CATHAY PAC AIR

13.22

-1.636905

5972420

20.15

11.8

CHEUNG KONG

101.9

0.09823183

4258871

127

79.1

1898

CHINA COAL ENE-H

8.78

-0.3405221

12498182

11.66

6.59

939

CHINA CONST BA-H

6.08

201854620

7.55

4.41

2628

CHINA LIFE INS-H

21.3

0.4716981

39059326

29.4

17.04

144

CHINA MERCHANT

-0.990099

1869452

37.5

941

CHINA MOBILE

87.45

1.508996

16300295

87.6

68.05

688

CHINA OVERSEAS

16.24

0.9950249

13347875

17.86

9.99

386

CHINA PETROLEU-H

8.3

-0.7177033

38114578

9.67

6.22

291

CHINA RES ENTERP

28.3

0.7117438

2134969

35.5

1109

CHINA RES LAND

14.4

-1.504788

10586036

15.6

7.28

836

CHINA RES POWER

14.08

1.004304

3870750

16.2

10.82

1088

CHINA SHENHUA-H

34.35

0.2919708

9728963

40.2

27.1

762

CHINA UNICOM HON

13.22

-1.928783

23736904

17.68

12.6

267

CITIC PACIFIC

12.96

-0.4608295

3071015

23.85

10.26

CLP HLDGS LTD

883

CNOOC LTD

66.8

0.07490637

1149358

75.2

62.1

16.24

-0.6119951

40026010

20.1

11.2 7.52

1199

COSCO PAC LTD

11.26

1.258993

3008862

17.16

330

ESPRIT HLDGS

16.36

-1.3269

2659145

33.95

7.55

101

HANG LUNG PROPER

29.05

-1.190476

4857992

35.3

20.85

105.1

613010

125

84.4

-0.6622517

3233516

54.25

33.2

HANG SENG BK

HENDERSON LAND D

1044

HENGAN INTL

82.55

-0.1209921

1289391

83.45

56.8

HONG KG CHINA GS

20.25

-0.7352941

4690444

20.65

16.68

388

HONG KONG EXCHNG

128.8

-0.8468052

4362692

182.5

99.15

HSBC HLDGS PLC

69.45

0.3612717

9597453

85.35

Shanghai Shenzhen CSI 300 NAME

-0.6908463

3063722

64.8

-1.466276

6236324

14.16

8.482

SUN HUNG KAI PRO

93.9

0.05327651

3115560

124.4

85.45

SWIRE PACIFIC-A

89.2

0.4504505

1122993

102.539

69.321

700

TENCENT HOLDINGS

234

-1.349073

2771007

240.2

139.8

322

TINGYI HLDG CO

-0.9433962

9732991

17.84

151

WANT WANT CHINA

9.27

3.575419

23635464

9.35

6.03

WHARF HLDG

44.8

0.3359462

5723957

33.15

INDEX 21010.64 52W (H) 24260.76 (L) 16170.35 MOVERS 19 25 4

IN FOCUS Dow Jones (INDU) - Hang Seng (HSI) spread -5000 -6400 -7800 -9200 -10600

PRICE

DAY %

VOLUME

2.73

0.7380074

78028687

AIR CHINA LTD-A

6.25

1.596517

NAME

-12000

20-Apr-2012

26-Apr-12

AGRICULTURAL-A ALUMINUM CORP-A

57.5 13.44

PRICE

DAY %

VOLUME

CHINA UNITED-A

4.35

2.112676

124401924

7971215

CHINA VANKE CO-A

8.64

0.5820722

16657336

CHINA YANGTZE-A

6.51

NAME

PRICE

DAY %

VOLUME

PANGANG GROUP -A

7.99

3.631647

126650717

48445469

PETROCHINA CO-A

9.95

0.810537

13541136

-0.1533742

13785494

PING AN INSURA-A

41.37

0.8778347

35207546 50385554

ANGANG STEEL-A

4.46

1.133787

10761448

CITIC SECURITI-A

13.5

1.580135

181680099

12.2

-0.08190008

ANHUI CONCH-A

17.74

2.484113

73926647

CSR CORP LTD -A

4.97

3.541667

86310332

QINGHAI SALT-A

34.04

0.4129794

8064627

BANK OF BEIJIN-A

10.11

1.812689

26391977

DAQIN RAILWAY -A

7.51

0.6702413

39324736

SAIC MOTOR-A

15.39

0.6540222

14504638 36195306

POLY REAL ESTA-A

BANK OF CHINA-A

3.06

0.3278689

33736394

DATANG INTL PO-A

5.07

2968284

SANY HEAVY INDUS

14.5

0.06901311

BANK OF COMMUN-A

4.85

0.6224066

47853032

DONGFANG ELECT-A

22.37

0.3589053

7701426

SHANDONG GOLD-MI

32.92

4485720

BAOSHAN IRON & S

4.99

1.629328

30518798

EVERBRIG SEC -A

14.06

4.302671

43655020

SHANG PUDONG-A

9.31

2.083333

77240835 5699737

BBMG CORPORATI-A BYD CO LTD -A CHINA CITIC BK-A

8.42

-0.3550296

47653634

GD MIDEA HOLDING

13.46

0.1488095

15479727

SHANGHAI ELECT-A

27.79

-3.473428

10617839

GD POWER DEVEL-A

2.61

0.7722008

66802707

SHANXI LU'AN -A

4.51

1.348315

22106928

GF SECURITIES-A

31.81

3.279221

28076742

21.6

0.8874358

30.92

1.045752

CHINA CNR CORP-A

4.49

3.218391

109827934

CHINA COAL ENE-A

9.29

0.9782609

12788683

GREE ELECTRIC GUIZHOU PANJIA-A

5.59

1.084991

27.34

0.5516734

8919723

SHANXI XISHAN-A

1.674641

29439244

7764000

SHENZ DVLP BK-A

16.58

1.344743

25807487

6519335

SHENZEN OVERSE-A

7.46

23921243

CHINA CONST BA-A

4.74

0.4237288

48709880

HAITONG SECURI-A

10.33

2.378593

167176510

CHINA COSCO HO-A

5.45

4.206501

29166690

HANGZHOU HIKVI-A

43.38

1.592506

1005124

CHINA CSSC HOL-A

33.67

1.999394

7319912

3.09

0.6514658

CHINA EAST AIR-A

3.85

1.315789

16221840

66.66

CHINA EVERBRIG-A

HEBEI IRON-A HENAN SHUAN-A

16.61

0.06024096

2252494

SUNING APPLIAN-A

SINOVEL WIND-A

10.7

-1.382488

70742347

20395794

TSINGTAO BREW-A

34.41

1.027598

2493717

4479858

WEICHAI POWER-A

32.9

2.908977

9446981

2.95

1.37457

43965814

HUATAI SECURIT-A

10.55

4.352127

67420333

WULIANGYE YIBIN

33.97

23318663

CHINA LIFE INS-A

18.31

3.621958

35752644

HUAXIA BANK CO

11.17

1.823154

38479658

XCMG CONSTRUCT-A

15.09

2.583277

15768986

CHINA MERCH BK-A

12.19

1.923077

92190483

IND & COMM BK-A

4.42

1.609195

63181633

XINJIANG GUANG-A

24.87

-2.355713

17139772

CHINA MERCHANT-A

13.5

3.686636

48820505

INDUSTRIAL BAN-A

13.93

2.652911

74220530

YANGQUAN COAL -A

19.24

2.014846

14541179

CHINA MERCHANT-A

22.23

-1.331558

8411800

INNER MONG BAO-A

69.69

-0.4855062

23884737

YANTAI CHANGYU-A

95.77

1.505034

2317381

CHINA MINSHENG-A

6.55

1.550388

103536590

INNER MONG YIL-A

22.3

0.9506564

14394877

YANTAI WANHUA-A

14.46

-0.3445899

9203505

6.7

33364425

INNER MONGOLIA-A

6.16

0.1626016

62267675

YANZHOU COAL-A

23.71

0.6794055

5009129

CHINA OILFIELD-A

CHINA NATIONAL-A

17.44

0.4608295

5203912

JIANGSU HENGRU-A

27.25

-0.1099707

3148520

YUNNAN BAIYAO-A

49.13

0.6762295

2062082

CHINA PACIFIC-A

21.79

3.86082

50316298

JIANGSU YANGHE-A

159.8

2.429331

913760

ZHONGJIN GOLD

22.68

16242932

7.35

1.659751

55123206

JIANGXI COPPER-A

25.6

0.9861933

9716430

ZIJIN MINING-A

4.34

0.6960557

50839609

14.24

0.4231312

11831162

9.86

-0.6048387

45964789

19.7

0.6642821

8493486

17.22

2.378121

24826917

CHINA PETROLEU-A CHINA RAILWAY-A

2.66

1.140684

34154926

JINDUICHENG -A

CHINA RAILWAY-A

4.39

1.152074

26832089

JIZHONG ENERGY-A

CHINA SHENHUA-A

26.74

0.3753754

10429889

KWEICHOW MOUTA-A

212.5

1.441665

1704631

CHINA SHIPBUIL-A

6.17

0.4885993

35900816

LUZHOU LAOJIAO-A

41.88

2.121434

8638138

CHINA SHIPPING-A

3.29

2.492212

48815621

METALLURGICAL-A

2.65

1.532567

34927296

CHINA SOUTHERN-A

4.76

1.927195

45620850

NARI TECHNOLOG-A

19.88

-0.2008032

3973509

3.3

2.484472

157570964

NINGBO PORT CO-A

2.67

0.3759398

31022732

CHINA STATE -A

NAME

Hang SENG CHINA ENTREPRISE INDEX NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.59

0.2793296

61252624

AIR CHINA LTD-H

5.12

ALUMINUM CORP-H

ZOOMLION HEAVY-A ZTE CORP-A

INDEX 2626.839 52W (H) 3334.91 (L) 2254.567 MOVERS 231 58 11

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

CHINA LONGYUAN-H

6.03

-1.95122

5002510

PETROCHINA CO-H

11.4

-0.3496503

30500711

CHINA MERCH BK-H

16.58

0.4848485

8468603

PICC PROPERTY &

9.8

-0.7092199

16472518

CHINA MINSHENG-H

7.54

-1.308901

31662508

PING AN INSURA-H

-0.233827

8734144

CHINA NATL BDG-H

10.46

0.7707129

41861961

SHANDONG WEIG-H

8.61

0.1162791

3668853

CHINA OILFIELD-H

12.06

0.166113

4369145

SINOPHARM-H

21.3

2.898551

5720094

NAME

3.87

2.380952

21411123

CHINA PACIFIC-H

26.15

0.1915709

13104898

TSINGTAO BREW-H

46.05

1.655629

2117591

ANHUI CONCH-H

25.75

2.18254

16199619

CHINA PETROLEU-H

8.3

-0.7177033

38114578

WEICHAI POWER-H

36.9

-0.135318

2090238

BANK OF CHINA-H

3.28

209922511

CHINA RAIL CN-H

5.8

6313453

YANZHOU COAL-H

16.78

-1.294118

9709653

BANK OF COMMUN-H

5.95

-0.5016722

15347989

CHINA RAIL GR-H

3.02

-0.6578947

14567986

3.08

-0.3236246

6980073

BYD CO LTD-H

21.8

2999235

CHINA SHENHUA-H

34.35

0.2919708

9728963

ZOOMLION HEAVY-H

11.44

15571167

ZTE CORP-H

19.52

2.8451

9647348

CHINA CITIC BK-H

4.83

0.8350731

38194826

CHINA TELECOM-H

CHINA COAL ENE-H

8.78

-0.3405221

12498182

DONGFENG MOTOR-H

4.17

-1.184834

37438015

14.78

-1.07095

9636676

CHINA COM CONS-H

7.78

0.7772021

14061719

GUANGZHOU AUTO-H

8.26

1.101591

7330370

CHINA CONST BA-H

6.08

201854620

HUANENG POWER-H

4.52

2.961276

25765215

CHINA COSCO HO-H

4.72

-1.25523

13018739

IND & COMM BK-H

5.28

0.3802281

200548279

CHINA LIFE INS-H

21.3

0.4716981

39059326

JIANGXI COPPER-H

18.6

-0.8528785

10104202

NAME

PRICE DAY %

Volume

33.4 -0.2985075

2604104

SINOPAC FINANCIA

9.92

-0.8

7670693

FAR EASTONE TELE

63.4

-0.9375

3757126

SYNNEX TECH INTL

67.6

-2.873563

7145901

Volume

FIRST FINANCIAL

17.2 -0.8645533

11667846

TAIWAN CEMENT

35.4

-1.666667

4507171

FORMOSA CHEM & F

83.9

-0.94451

2861641

17.25 -0.5763689

4036194

-1.149425

498775

TAIWAN FERTILIZE

71.7 -0.2781641

2146036

3981065

TAIWAN GLASS IND

30.4

-1.458671

1666144

-3.632694

15786891

TAIWAN MOBILE CO

90.5 -0.6586169

7153140

30.75 -0.8064516

16855318

TPK HOLDING CO L

388

-6.954436

3140009

49964156

TSMC

84.3

-1.748252

27806382

ACER INC

35.35

-1.532033

10234021

FORMOSA PETROCHE

ADVANCED SEMICON

28.75

-2.044293

15307679

FORMOSA PLASTIC

84.2 -0.9411765

ASIA CEMENT CORP

36.4 -0.5464481

1814425

FOXCONN TECHNOLO

95.5

ASUSTEK COMPUTER

273

-4.042179

4085183

FUBON FINANCIAL

AU OPTRONICS COR

14.2 -0.6993007

52597448

HON HAI PRECISIO

103

-2.369668

185

-6.801008

26071628

HOTAI MOTOR CO

187

-1.578947

1717892

30.95 -0.8012821

12199138

HTC CORP

462

10116547

16.15 -0.9202454

CATCHER TECH CATHAY FINANCIAL

INDEX 11050.16 52W (H) 13721.26 (L) 8058.58 MOVERS 18 16 6

FAR EASTERN NEW

FTSE TAIWAN 50 INDEX NAME

ZIJIN MINING-H

NAME

TAIWAN COOPERATI

UNI-PRESIDENT

PRICE DAY %

Volume

42.05 -0.3554502

5630257

UNITED MICROELEC

14.6

0.6896552

32362613

CHANG HWA BANK

-2.439024

15636438

HUA NAN FINANCIA

4827854

WISTRON CORP

41.8 -0.9478673

10961993

CHENG SHIN RUBBE

70.8

0.4255319

8723546

LARGAN PRECISION

560

-1.408451

1665559

YUANTA FINANCIAL

14.2 -0.6993007

21047873

CHIMEI INNOLUX C

13.4

-1.107011

16680740

LITE-ON TECHNOLO

33.75

-1.889535

8561103

YULON MOTOR CO

47.5

10551654

CHINA DEVELOPMEN

7.51

-6.125

149052047

260

-5.96745

18476779

CHINA STEEL CORP

28.7 -0.8635579

CHINATRUST FINAN CHUNGHWA TELECOM COMPAL ELECTRON DELTA ELECT INC

MEDIATEK INC

13443659

MEGA FINANCIAL H

21.55

-2.045455

31058887

-1.098901

24435595

NAN YA PLASTICS

59.8

-1.482702

3725150

87.6

-0.792752

24713294

PRESIDENT CHAIN

33.05

0.7621951

9712325

QUANTA COMPUTER

76.8

0.1303781

10463482

90.3

0.3333333

13422237

SILICONWARE PREC

33.8

-2.028986

5227729

157.5 -0.3164557

844235

-2.763562

INDEX 5211.58 52W (H) 6265.48 (L) 4643.05 MOVERS 5 44 1

April 23, 2012 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GALAXy ENTErTAINMENT

Max 23.75

Average 23.55

MELCo CroWN ENTErTAINMENT

Min 23.40

23.9

14.5

23.8

14.4

23.7

14.3

23.6

14.2

23.5

14.1

23.4

Last 23.65

Max 42.50

SANDS CHINA LTD

Max 32.60

Average 32.32

MGM CHINA HoLDINGS

Average 40.92

Min 39.00

Last 41.80

SJM HoLDINGS LTD

Min 32.00

Last 32.25

23.85

32.48

17.3

23.77

32.36

17.2

23.69

32.24

17.1

23.61

32.12

17.0

23.53

32.00

23.45

16.9 Max 17.34

Average 17.12

Min 16.94

Last 16.96

Max 23.85

Average 23.64

Min 23.45

Last 23.85

CURRENCY EXCHANGE RATES MAJORS

0.13 0.12

ASIA PACIFIC

0.11 0.10 20-Apr-2012

10-Sep-10

0.09

MACAU RELATED STOCKS DAY % YTD %

(H) 52W

(L) 52W

VOLUME CRNCY

ARISTOCRAT LEISU

3.12

-0.952381

41.81818

3.25

1.88

2268795

CROWN LTD

8.99

0.1113586

11.12484

9.2

7.45

2084326

AMAX HOLDINGS LT

0.09

-2.173913

3.448279

0.143

0.06

13713000

BOC HONG KONG HO

22.9

-0.4347826

24.45652

24.7

14.24

5400901

CENTURY LEGEND

0.26

13.04348

0.41

0.204

CHEUK NANG HLDGS

3.18

-0.625

13.57143

4.79

2.3

916

CHINA OVERSEAS

16.24

0.9950249

25.11557

17.86

9.99

13347875

CHINESE ESTATES

11.1

1.277372

-11.2

14.8

10.2

265433

CHOW TAI FOOK JE

11.78

-0.6745363

-15.37356

15.16

11.66

3997400

EMPEROR ENTERTAI

1.39

-1.41844

25.22522

2.09

0.97

710000

FUTURE BRIGHT

0.98

24.05063

133.3333

0.99

0.3

29574000

GALAXY ENTERTAIN

23.65

0.4246285

66.08146

24.35

8.69

9467680

HANG SENG BK

105.1

14.05317

125

84.4

613010

HOPEWELL HLDGS

20.75

-0.2403846

4.481366

24.903

18.56

1077055

HSBC HLDGS PLC

69.45

0.3612717

17.71186

85.35

9597453

3.4

2.102102

13.71237

3.6

2.13

8623476

21.45

-1.605505

-20.84871

46.15

19.2

2692309

LUK FOOK HLDGS I

14.0

Last 14.10

17.4

0.14

HUTCHISON TELE H

Min 14.08

32.60

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

AUD

1.038

GBP

1.6123

0.1544

1.675

1.1081

0.9388

0.5739

3.7316

1.6747

CHF

1.5235

0.9089

0.8142

3.2127

0.9596

0.7071

EUR

1.3219

0.7853

1.9906

1.494

1.2624

JPY

81.52

0.1717

-5.6551

84.18

75.35

MOP

7.9936

-0.0025

0.0751

8.0449

7.9823

HKD

7.7606

0.0013

0.0876

7.8113

7.7529

CNY

6.3086

-0.0761

-0.2156

6.5391

6.2846

INR

52.085

0.1152

1.8815

54.305

43.855

THB

30.91

-0.0324

2.0705

31.96

29.63

SGD

1.2484

0.2403

3.8609

1.3199

1.1992

Pataca (MOP) -Swiss Franc (CHF) exchange rate

PRICE

Average 14.17

WyNN MACAU LTD

IN FOCUS

NAME

Max 14.34

CROSSES

AUD HKD

TWD

29.501

-0.0068

2.6372

30.716

28.48

PHP

42.63

0.007

2.8384

44.35

41.879

IDR

9184

-0.0327

-1.2522

9367

8458

AUDJPY

84.637

-0.0012

-7.3313

89.601

72.057

EURCHF

1.20161

0.0183

1.2633

1.29654

1.00749

EURGBP

0.81973

-0.1976

1.6664

0.90835

0.8162

EURCNY

8.311

-0.2599

-2.1273

9.6769

7.9674

EURMOP

10.5461

-0.5955

-1.8405

11.9509

10.1031

EURJPY

107.79

-0.6309

-7.5424

121.84

97.04

HKDMOP

1.0301

-0.0097

1.0311

1.0288

World Stock MarketS - Indices COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

NAME

13029.26

0.5026188

6.643718

13297.11

10404.49

NASDAQ COMPOSITE INDEX

3000.45

-0.2364043

15.17379

3134.17

2298.89 4791.01

FTSE 100 INDEX

5772.15

0.4804554

3.586864

6103.73

DAX INDEX

6750.12

1.182692

14.44082

7600.410156

4965.8

9561.36

-0.2817994

13.0806

10255.15

8135.79

MELCO INTL DEVEL

8.13

0.6188119

40.90121

10.76

4.3

5470026

NIKKEI 225

MGM CHINA HOLDIN

14.1

-1.810585

46.99514

17.183

7.6

7390400

HANG SENG INDEX

21010.64

0.07444626

13.97524

24260.76953

16170.35

MIDLAND HOLDINGS

4.03

-0.2475238

5.976

2.95

794021

NEPTUNE GROUP

0.11

-0.9009022

0.157

0.08

140000

CSI 300 INDEX

2626.839

1.18576

11.98329

3325.459

2254.567

NEW WORLD DEV

9.32

-0.2141328

48.88178

12.675

6.13

6629763

TAIWAN TAIEX INDEX

7507.15

-1.515738

6.151936

9099.75

6609.11

SANDS CHINA LTD

32.25

-1.376147

46.92482

33.05

14.9

14025206

SHUN HO RESOURCE

1.2

1.32

0.82

SHUN TAK HOLDING

3.28

1.547988

28.16864

4.686

2.241

6855089

SJM HOLDINGS LTD

16.96

-2.191465

33.75394

10.22

14463814

SMARTONE TELECOM

16.36

0.7389163

21.72619

18.5

9.8

1647012

WYNN MACAU LTD

23.85

0.845666

22.30769

27.48

14.807

11992819

ASIA ENTERTAINME

5.9

-2.317881

0.3401341

10.8692

4.72

48640

BALLY TECHNOLOGI

46.93

0.5355613

18.62993

47.6

24.74

445253

BOC HONG KONG HO

3.01

25.56381

3.16

1.81

13050

GALAXY ENTERTAIN

3.04

62.56684

3.09

1.08

9912

INTL GAME TECH

16.57

2.664188

-3.662795

19.15

13.38

2505979

JONES LANG LASAL

80.21

1.173058

30.93373

107.77

46.01

193422

LAS VEGAS SANDS

57.91

-0.7710761

35.52539

62.09

36.08

6898442

MACAU CAPITAL IN

0.11

9.999998

0.11

500

MELCO CROWN-ADR

15.58

1.830065

61.95426

16.15

7.05

6463629

MGM CHINA HOLDIN

1.78

-6.315789

49.36731

2.21314

1.00254

1500

MGM RESORTS INTE

13.52

-1.815541

29.62607

16.05

7.4

10809975

SHUFFLE MASTER

16.91

0.8949881

44.28327

18.77

7.35

885437

2.21

-0.896861

35.58282

2.64

1.28

3000

128.99

-0.4322655

16.7436

165.4931

101.02

1565842

SJM HOLDINGS LTD WYNN RESORTS LTD

KOSPI INDEX

1974.65

-1.260588

8.156147

2231.47

1644.11

S&P/ASX 200 INDEX

4366.503

0.08648255

7.640521

4930.6

3765.9

JAKARTA COMPOSITE INDEX

USD

4181.368

0.4239482

9.402851

4232.923

3217.951

FTSE Bursa Malaysia KLCI

1591.85

-0.2987561

3.992866

1609.33

1310.53

NZX ALL INDEX

782.878

-0.2861965

7.272907

814.431

700.441 2695.06

PHILIPPINES ALL SHARE IX

3429.55

0.1202769

12.62742

3465.89

HSBC Dragon 300 Index Singapor

582.04

0.13

17.27

N/A

STOCK EXCH OF THAI INDEX

1194.6

0.7812105

16.50997

1214.31

843.69

HO CHI MINH STOCK INDEX

465.72

-0.2911707

32.47618

488.02

332.28

Laos Composite Index

1034.88

0.7790589

15.0557

1348.88

876.33

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 23, 2012

Opinion And the party begins Over 150 guests attended the official launch party, at Mandarin Oriental, Macau, of the newest daily in town. The newspaper joins Macau Business, in English, and Business Intelligence, in Chinese, giving De Ficção - Multimedia Projects a complete suite of titles with comprehensive coverage of Macau’s economy.

Officiating guests (left to right) Tiago Azevedo, Martin Schneider, Ambrose So, Rafael Gama, Paulo A. Azevedo, Victor Chan, Francis Lui and Edward Tracy

Teddy Kwong, Alfred Liu, Paulo A. Azevedo and Francis So

Andrea Mansfield, Eilen Stow and Stephan Winkler

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Marketing and Events experts joined the part, away from the heavy rain

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editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Chief REPORTER Vitor Quintã Newsdesk Cláudia Aranda, Kristy Chan, Kelsey Wilhelm, Cherry Lee, Terina Cao, Tony Lai EDITION AT LARGE Michael Hoare Creative Director José Manuel Cardoso Designer Janne Louhikari Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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April 23, 2012 business daily | 15

OPINION

Sky-high protectionism?

Some clarity, at last

Jean Pisani-Ferry

editorial

Director of Bruegel and Professor of Economics at Université Paris-Dauphine

Tiago Azevedo

new controversy has emerged between the European Union and several of its main trade partners since the EU decided to include in its CO2 emission-control scheme all flights to and from its territory, including transcontinental flights. Airlines will need to acquire emission permits for their flights’ CO2 emissions. China and the United States are outraged. Chinese airlines have delayed orders to purchase European aircraft. The CEOs of aircraft manufacturer Airbus and major European airlines have urged European leaders to step in. There is talk of a new trade war. This is an important quarrel, because it is the first real clash in the debate on climate and trade. Not only are the motivations and arguments new, but suspicions about hidden agendas matter as much as substance. It may seem strange, but the EU sees itself as a soldier of the common good. Why is a group of countries whose share in worldwide CO2 emissions is only 12 percent – and set to decline fast – aspiring to global leadership on the issue, despite US inaction and emerging-market countries’ reluctance to commit to binding emission-reduction targets? In part, the EU’s stance reflects the preferences of European public opinion. In part, it arises from internal politics: to press ahead with its agenda enables

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The really important argument against Europe’s decision is the one about hidden agendas. The EU’s trade partners do not want to give ground, because they suspect that in the coming years, climate change will serve as a pretext for protectionist policies

should partner countries adopt the same scheme. Finally, opponents of the EU’s scheme contend that developing countries’ contribution to emission reductions should be less significant than that of advanced countries, since they contributed much less to the stock of existing greenhouse gases. But this issue could easily be resolved through negotiations over the allocation of permits. In fact, the EU explicitly supports a global agreement, negotiated in a multilateral framework, as the best solution. The really important argument against Europe’s decision is the one about hidden agendas. The EU’s trade partners do not want to give ground, because they suspect that in the coming years, climate change will serve as a pretext for protectionist policies. Indeed, climate change is in many ways the perfect crutch that opponents of open trade have long sought, and there is a real risk that it will be used in a mischievous way.

A critical debate the EU to strengthen its hand vis-à-vis the member states. In part, there is the hope that by moving fast, Europe will acquire a comparative advantage in low-carbon technologies. From a European standpoint, the reaction from trade partners is difficult to accept. After all, the measure is nondiscriminatory: all airlines are treated in the same way. In its absence, the choice would have been between putting European airlines at a disadvantage and exempting a sector whose share in the EU’s total CO2 emissions has grown from 1.8 percent in 1990 to 3.5 percent in 2007. Anyone who acknowledges that global warming is a real threat must take the EU’s arguments seriously.

Arguments and agendas The EU’s trade partners make several valid arguments. One is that receipts from the sale of emission permits should not accrue to the EU for flights that take place largely outside of its borders, though this would be a relatively simple matter for negotiators to settle. Another argument is that the EU scheme will create distortions that favor of incumbents (who will be given permits for free) and non-direct flights (because only the leg to or from the EU will be taxed). This, too, is correct, but the distortion would be eliminated,

So caution is fully justified. But the problems arising from the incoherence of national climate policies are real. They emerge as soon as domestic emissions are taxed in some part of the world (or, equivalently, as soon as quotas are imposed), because domestic producers then claim that they are at a disadvantage in international trade. Moreover, rejecting Europe’s arguments out of hand, owing to a suspected protectionist agenda, is not without risk. If the controversy comes to be perceived by the European public as a conflict between free trade and the environment, free trade is likely to lose. Europe’s partners should not assume that trade automatically takes precedence over climate concerns. Instead, they should focus public attention on valid arguments. For example, it is much easier for advanced countries to reduce emissions without any effort, simply by outsourcing the production of emission-intensive goods to emerging and developing countries. In this way, they can meet strict targets without reducing the carbon content of their consumption. The trade vs. climate debate is fundamental for the global economy. Europe’s air-transport tax provides an opportunity to launch it in a concrete and rational way. It is an opportunity that should not be missed. © Project Syndicate

he public has been wondering about the fate of the people and projects named in the third trial of Ao Man Long, the jailed former secretary for transport and public works. One week into his last trial, we now know that two high-profile Hong Kong businessmen are defendants in a case involving the sale of land close to the airport. That inquiry has yet to reach the court. Both businessmen have publicly denied any wrongdoing. Oddly, the Public Prosecutor’s Office and the president of the Court of Final Appeal and presiding judge, Sam Hou Fai, were the source of that information. They provided the information to everyone who attended Friday’s session of the Ao trial, including dozens of reporters. Earlier last week, Joseph Lau Luen Hung and Steven Lo Kit-Sing were named in court in connection to Ao’s trial. They told the press they were not his co-defendants nor had they been formally charged in either Hong Kong or Macau in connection with the sale of the land in 2006 for less than its market value. We now know they have been the subject of another ongoing and closely linked inquiry. We can only wonder how long it will take for that case to reach the court. The government also confirmed to Business Daily that it received about 1.2 billion patacas for the five pieces of land in front of the airport. It had been appraised just two years earlier for 2.2 billion patacas by real estate firm Savills Hong Kong. The land is now home to the La Scala development. In late March, buyers snapped up the first 300 flats there. The first phase of the development comprises nine towers, offering about 899 units. Developer Chinese Estates Holdings Ltd. had intended to put 100 flats on the market, with price tags starting at about HK$13 million, but tripled the number to meet demand. The average price of the flat sold in the first phase of pre-sale was MOP7,200 (US$900) a square foot. We can only wonder what will become of the project. After Ao’s two previous trials, the government took back many pieces of land that had been linked to his department’s fraudulent practices. And there is still another set of projects that his department gave the green light to that are awaiting commencement. Nothing has been proved, but there is a suspicion of wrongdoing that has begun to circulate. It has the feeling and tone as the deals that were brought to light in Ao’s previous trials. To clear the air and give the public the details it needs to hear, the proceedings against Ao have to be made transparent. I understand that it is sometimes the best policy to say nothing, but I am also a firm believer that it is better to counter the public’s widespread concerns with timely, accurate information.

To clear the air and give the public the details it needs to hear, the proceedings against Ao have to be made transparent. I understand that it is sometimes the best policy to say nothing, but I am also a firm believer that it is better to counter the public’s widespread concerns with timely, accurate information

16 |

business daily April 23, 2012

CLOSING Lamborghini revs for China SUV

Indonesia attracts plane makers

Lamborghini unveiled its first sport-utility vehicle in almost two decades as the Italian supercar maker looks to tap rising demand from emerging markets. The Volkswagen AG subsidiary unveiled the concept SUV, called the Urus, in Beijing yesterday before this week’s auto show in the Chinese capital. Lamborghini sees potential sales of 3,000 vehicles a year for the SUV, chief executive Stephan Winkelmann said. A final decision to produce the vehicle hasn’t been made, he added. “If you’re going to enter a new segment, you have to remain true to your core values. Our core values are uncompromising, extreme and Italian,” he said.

Indonesia has become a bonanza for international plane makers who are booking some of the world’s biggest sales as Western airlines suffer a downturn. Europe’s Airbus and US manufacturer Boeing have secured billions of dollars in orders over the past year as Southeast Asia’s largest economy experiences a travel boom and looks to link its archipelago of more than 17,000 islands. Indonesian carrier Lion Air placed the single largest contract in commercial aviation history, ordering 230 Boeing aircraft for a whopping US$22.4 billion. Last week, Airbus bagged a US$2.5 billion contract for 11 A330s to national carrier Garuda International.

IMF members want bold reform in Eurozone Jun Azumi, Japan’s finance minister, talks to Christine Lagarde, managing director of the International Monetary Fund

Asia to weather global storms: IMF The IMF says the 17-strong euro zone needs to make major structural reforms to boost confidence and growth By Gernot Heller and Glenn Somerville

urope was pressed by other world powers on Saturday to take strong measures to fix its debt-heavy economy and restore growth to a level that would lift the cloud hanging over the fragile global recovery. A day after top economies agreed to lend more money to the International Monetary Fund to help contain Europe’s debt crisis, the IMF’s governing panel said the euro area must cut government debt burdens, make bold economic reforms and stabilise its financial systems to restore growth. The IMF has told the euro zone it must make bold reforms to reassure financial markets. A statement from

its governing council, says the 17-strong euro zone needs to make major structural reforms to boost confidence and growth. Debt problems will resurface unless these steps are taken, the head of the IMF’s governing panel, Singapore Finance Minister Tharman Shanmugaratnam, warned. “What was really critical in all our minds was to get back to normal growth over the medium term and preferably sooner rather than later, in other words within two to three years,” he told a news conference. “If we don’t get back to normal growth, if we don’t get GDP back to its potential levels, than fiscal sustainability is not possible

either,” he warned. In its policy statement the IMF panel warned against overly harsh budget cuts that could have negative consequences. “In advanced economies further actions are needed in many countries to achieve credible fiscal consolidation and government debt reduction, while avoiding excessively contractionary fiscal policies,” it said. The United States also piled on pressure. “The success of the next phase of the crisis response will hinge on Europe’s willingness and ability, together with the European Central Bank to apply its tools ... flexibly and aggressively to support countries as they implement reforms,” U.S. Treasury Secretary Timothy

HK watchdog fines Mega Capital The SFC said that broker Mega Capital failed to discharge its duties as sponsor in the Hontex International Holdings IPO

ong Kong’s securities regulator yesterday fined Mega Capital (Asia) HK$42 million (US$5.41 million) and revoked its corporate finance advisory licence for disclosing false and misleading information in a 2009 initial public offering for a Chinese fabric maker for which it was the sole sponsor.

The Securities and Futures Commission (SFC) said in a statement that its investigation had revealed that broker Mega Capital had failed to discharge its duties as sponsor in the Hontex International Holdings IPO and found “inadequate and sub-standard due diligence work”. A spokesman said the fine was the highest ever

imposed by the SFC. The regulator’s action comes days after a source told Reuters that Hong Kong’s financial market watchdog will launch a public consultation in the next couple of weeks that seeks to toughen rules for banks sponsoring IPOs, including holding them liable for faulty deal documents.

Geithner told the IMF’s steering committee. The committee called upon central banks in advanced economies to retain their accommodative monetary policies, as long as growth remains weak and inflationary expectations under control. ECB officials resisted pressure at the meetings in Washington to do more to help the euro zone economy, which is at risk of a recession. The IMF last week said the ECB should cut interest rates further from their current level of 1 percent. U.S and Japan Europe was not the only economy under heightened

The SFC is set to issue a twopart consultation paper, with one section proposing to toughen the code of conduct for IPO sponsors and the second making them liable for the contents of listing prospectuses, according to sources with direct knowledge of the matter. In the Hontex case, the SFC said Mega Capital had failed to obtain materially important information from Hontex’s suppliers and customers and also failed to act independently and impartially. “Given the important role played by sponsors, these failures must be regarded

scrutiny for excessive budget deficits that if left unaddressed could threaten global growth. “The United States and Japan in particular need to tackle their public deficits and debt,” German Finance Minister Wolfgang Schaeuble told his fellow finance ministers. “This requires a credible medium-term strategy. We understand the political constraints but there is no way around it and there is urgency,” Schaeuble said, echoing the IMF’s recommendations. Europe, however, presents the most urgent challenge and was the only economy singled out for policy advice by the IMF panel. Japan’s finance minister, Jun Azumi, said strengthening the IMF’s war chest for crisis fighting only buys Europe time. The recent rises in European sovereign debt yields indicate the debt problems continue to pose “considerable” risk to the global economy, he said, as he warned the European policymakers must remain vigilant in their actions. “Policymakers of individual countries should avoid slipping into complacency and exploit the temporary breathing space that was acquired by the efforts made so far,” Azumi said. Over the weekend, the IMF secured commitments of over US$430 billion in funding to help it safeguard economies from the debt crisis in Europe. IMF Managing Director Christine Lagarde said emerging market economies China, Russia, India and Brazil, as well as Malaysia, Thailand and Indonesia indicated they will also contribute. Reuters

most grimly,” said Mark Steward, the SFC’s director of enforcement. “The sanctions imposed on Mega Capital should make it clear that the SFC condemns such failure in the strongest terms,” Steward said in a statement. The SFC said, however, that it had found no evidence that Mega Capital was involved in any fraud. Hontex shares last traded in March 2010 in Hong Kong when they were suspended pending the investigation into the IPO process by the SFC. Reuters