Macau Business Daily, April 3, 2012

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No RAISE for public workers under task contract

New airlines get green light

China pressures German Bunds

Drawings show over 300 tables

Year I | Number 2 | April 3 2012 Editor-in-chief | Tiago Azevedo Deputy editor-in-chief | José I. Duarte Macau | Hong Kong $ 6.00 www.macaubusinessdaily.com

Page 3

Macau hotels enjoy fast revenue growth

Page 8

Price dispute threatens gas supply

Billions race Gaming growth slows in March but SJM and Sands stay ahead in high-margin mass market

Sinosky Energy is selling its liquefied natural gas for less than it pays for it, and the city’s supply may be in doubt if the government does not let the firm charge more. The court might be the last resource

Pages 4&5 Brought to you by

M

acau’s gaming revenue growth rate halved in March compared to a year earlier - as predicted by Business Daily. It expanded by 24.4 percent to reach MOP24.99 billion (US$3.12 billion) according to government figures released yesterday. That was half the 48 percent growth achieved in March 2011.

But analysts are already looking ahead to the opening

of the Sands Cotai Central on April 11 and the possible uptick it will bring as the only new casino opening in Macau for two or three years. And inside we explain why, despite VIP baccarat’s importance, Macau operators are still earnestly courting players in the mass segment.

MORE on Page 2

HANG SENG INDEX 20600 20540

Worst over for treasuries as QE3 comes: bond traders

T

he worst is over for the US$10 trillion U.S. Treasury market following the biggest quarterly rout since 2010, say Wall Street’s largest bond trading firms.

After rising to as high as 2.4 percent last month from 1.88 percent at the end of 2011, the yield on the benchmark 10-year note will finish 2012 at 2.49 percent, according to the average estimate in a Bloomberg News survey of the 21 primary dealers that trade with the Federal Reserve. That’s the same as a January poll, suggesting the market isn’t ready to declare a bear market in bonds after a 30-year bull run.

Signs of strength in the economy, which caused a 5.56 percent loss in bonds maturing in 10 years or more last quarter, may fade in the second half of 2012, the dealers say. Tax cuts are expiring, US$1 trillion of mandatory federal budget cuts are due to kick in and UD$100-abarrel oil is eating into consumer spending.

With inflation in check, Fed Chairman Ben S. Bernanke said last week that the central bank would consider further stimulus, even after upgrading its economic outlook March 13.

“The back-up that we’ve seen over the past three or four weeks

20480 20420 20360 20300

was not fully justified by what we’re seeing in the data,” said Aneta Markowska, a senior U.S. economist at primary dealer Societe Generale SA in New York.

Primary dealer holdings of U.S. government debt rose to $91 billion last month, from a net bet against the securities of US$53.4 billion in May, according to the Fed. In the survey, 15 say the odds are that the Fed will need a third round of bond purchases, or quantitative easing, to bolster the economy.

Housing reports the last two weeks showed a key part of the economy remains under pressure.

Bloomberg

March 30

HSI - Movers Name

% Day

Esprit Hldgs

4.49

Sino Land Co

2.9

China Overseas

1.9

Henderson Land D

1.52

Wharf Hldg

1.42

New World Dev

-3.75

Cathay Pac Air

-2.78

China Merchant

-2.5

Cosco Pac Ltd

-2.39

Li & Fung Ltd

-2.24

Source: Bloomberg

2 |

business daily April 3, 2012

MACAU

Gaming growth slows SJM and Sands China stay ahead in high-margin mass market

By Associate Editor

SJM and Sands China have a lot of mass-market trade

M

acau’s March gaming revenue grew at 24.4 percent according to government figures released yesterday. That was half the 48 percent growth achieved in 2011 as predicted yesterday by Business Daily.

“The March result is in line with recently moderated consensus expectations of 24 percent to 25 percent year-on-year growth (down from 28 percent earlier in the month), but ahead of our expectations of 20 percent year-

on-year growth,” said Cameron McKnight, Senior Gaming Analyst with Wells Fargo in New York.

But the month’s tally - MOP24.99 billion (US$3.12 billion) - is still a huge number. To put it in perspective, in March last year, the Las Vegas Strip – the engine of America’s casino industry – managed just 17 percent of that; US$527.3 million. Even that figure was propped up by big spending Asian baccarat players resident in the U.S. or on holiday there according to research by the

Center for Gaming Research at the University of Las Vegas.

Gaming industry analysts say U.S. and Chinese gamblers’ behaviour tends to be very different wherever they’re playing. Asian gamblers are much more passionate about chasing big bets on live tables rather than betting small amounts per spin on slot machines as many American players do.

But there’s another revenue race hiding behind the Macau numbers.

This is the Macau casino operators’ fight for market share. Those

figures show that in March SJM - the successor to Stanley Ho’s former monopoly STDM – retained the largest share with 27 percent for its five directly managed and 15 affiliated casinos - down one percent on February.

Galaxy moved back into second place up four percent to 21 percent after slipping to third position a month earlier. Sands China, currently with three casinos but due to open a fourth on April 11, was down one place and one percent to third spot and 17 percent share.

Gaming Results: Gross Revenue

30

Mass market revenue Feb excluding slots (10,000 HK$)

VIP revenue Feb excluding slots (10,000 HK$)

SJM

206,112

438,032

Sands China

124,830

287,768

Galaxy

76,892

306,391

MPEL

67,518

242,033

Wynn

53,012

224,304

MGM China

37,962

188,475

26,851

25

25,040 24,286 23,608 23,058

24,769

24,306

24,212

22,000 20,507 20,087

21,244

20,792

20 15 10

Mar

Apr May Jun

Jul

Aug Sep Oct

Nov

Dec Jan

2011

Fev Mar

Source: Industry returns

2012

Gaming results: Market Share Per Operator 2011

2012

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

SJM

34%

30%

32%

29%

28%

27%

29%

26%

27%

26%

27%

28%

27%

Sands China

16%

17%

16%

16%

15%

14%

14%

14%

16%

17%

19%

18%

17%

Galaxy

11%

9%

13%

15%

19%

20%

20%

21%

20%

19%

19%

17%

20%

Wynn

14%

17%

13%

15%

15%

13%

12%

13%

13%

14%

13%

13%

12%

MPEL

14%

17%

14%

14%

16%

15%

16%

15%

13%

14%

13%

14%

14%

MGM

11%

11%

11%

11%

8%

11%

10%

11%

11%

10%

10%

10%

10%

Total

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

* Figures are rounded to the nearest unit, therefore they may not add exactly to the rounded total

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business daily April 3, 2012

MACAU MPEL stood still in market share terms again with 14 percent and fourth place. Wynn stayed in fifth, down one percent to 12 percent.

MGM China again props up the league table with 10 percent share – the same as a month earlier.

Macau’s casino operators complain that raw market share is not a true reflection of the quality of their business, because within those headline shares, some have a bigger slice of the more profitable segments, including mass-market table gaming.

While 72 percent of Macau revenue in the fourth quarter of 2011 came from VIP baccarat players, this sector is the least profitable on a per dollar basis. After government gaming tax, operating overheads, player wins and commission or revenue share with junket agent middlemen is deducted, the casinos get to keep only about two to three cents of every dollar, or 2.75 percent to three percent of the wager.

What makes the money in the VIP segment is the sheer size and volume of bets. Wagers of HK$20,000 per hand are nothing unusual in Macau VIP rooms. In the mass-market table segment, gross margins of 35 percent on much smaller wagers – ones in the hundreds of Hong Kong dollars - are standard according to analysts.

When the Macau operators are assessed by share of mass market to VIP market (excluding slot revenue, which is less than five percent of all gaming revenue) for February 2012 (the most recent figures available), their league positions come out more or less the same. But it’s immediately noticeable that with both SJM and Sands China, nearly a third of their total revenues come from the profitable mass-market – significantly ahead of their rivals.

Analyst Harry C. Curtis of Nomura Securities said: “Investors will be focused on April as Sands Cotai soft opens on April 11th. There will be no other new property opening in the next two to three years. We are looking for MOP25.5 billion to MOP26 billion (or up 24 percent to 27 percent year on year for April) but a better than expected Sands Cotai opening could mean upside to our estimate. This upside will most likely come from VIP.”

Key Points What you can buy with one month’s Macau gaming revenue (US$3 BILLION)

Two-and-a-half Hengqin Island campuses for the University of Macau (project cost US$1.23 billion) 28 pct of Hong Kong-ZhuhaiMacau Bridge (project cost US$10.7 billion)

Mapped out – plans for Studio City in Cotai

Studio City casino plan keeps entertainment Drawings of previously stalled Cotai scheme retain media theatre

S

tudio City, the planned new Macau casino project from Melco Crown Entertainment (MPEL), is likely to have slightly fewer gaming tables than the company suggested at a press conference last year. According to details obtained by Business Daily, the Cotai venue will have 336 tables – 36 of them for VIPs. Lawrence Ho Yau Lung, CoChairman and Chief Executive Officer of MPEL told media at a presentation in July - to mark the company’s acquisition of a 60 percent equity stake in the project at a cost of US$360 million that Studio City would have 400 tables. But the adjustment is not surprising. The Macau government currently has a cap on the number of new tables allowed in Macau.

That’s designed to be a cooling mechanism for a market that expanded by 42.2 percent yearon-year in 2011. The cap will stay in force until at least 2013 despite a raft of applications for new projects made by the industry in the past year. The number of slot machines in Studio City is likely to be 1,200 to 1,500 – in line with the 1,200 originally announced

By Mr Ho in July. Slot machines

numbers are not currently being capped.

The fact the table numbers are so precise is likely to lead to speculation that Studio City will have its project formally approved soon. But analysts caution against investors drawing hasty conclusions – based on the previous experience of Wynn Resorts. It equated ‘formal acceptance’ of Wynn Cotai with the government’s green light for construction and made an announcement to the New York and Hong Kong stock exchanges in September, only to learn it still had other hurdles to pass.

Design According to drawings obtained

by Business Daily, the Studio City project will maintain its original plan of a 6,000 seat entertainment studio and retail areas, divided between lifestyle and luxury components. A family-related zone is also on the mind of Mr Ho and his team.

The drawings reveal only one fivestar hotel but the US$1.7 billion (MOP13.5 billion) investment “will for sure evolve until all the details

are decided” said one source. One factor in that evolution is likely to be what finds most favour with the Macau government. It is understood to want to promote more non-gaming facilities on Cotai but has three other Cotai casino resort applications on its desk – from MGM China and SJM Holdings as well as Wynn.

A 5,000-square metre market place with restaurants and a food court and retail is also included in the Studio City plans while the promoters expect to have the complex linked to the yet to be developed light train system.

On December 1, Francis Tam Pak Yuen, Secretary for Economy and Finance, said the government had yet to receive a proposal from MPEL related to the inclusion of a casino in Studio City. That proposal was later received, according to a March 28 report from Portuguese newspaper Tribuna de Macau.

So far the government is keeping its lips sealed not only in relation to the Studio City investment – which experienced more than a decade of problems between its previous shareholders – but to the other projects.

One Guangzhou-Zhuhai intercity high-speed rail line (project cost US$2.89 billion) Three Macau gaming sublicences from Steve Wynn (Melco Crown Entertainment paid US$900 million for the privilege of one in 2009) Fifteen-and-a-half mass-market casinos (SJM’s Casino Oceanus cost US$194 million when it opened in 2009) Phoyo: Manuel Cardoso

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business daily April 3, 2012

macau

Price dispute threatens gas supply Sinosky Energy is selling its liquefied natural gas for less than it pays for it, and the city’s supply may be in doubt if the government does not let the firm charge more. The court might be the last resource

By Luciana Leitão leitao.luciana@macaubusiness.com

A

question mark hangs over the supply of liquefied natural gas (LNG) after Sinosky Energy (Holdings) Co Ltd accumulated losses of around MOP94 million (US$11.75 million) over the past five years due to the gas pricing mechanism.

The company has asked the government to increase the price, but is waiting for an answer.

If the answer is no, Sinosky Energy may take the matter to court.

The government awarded Sinosky Energy a 15-year contract in 2006 to supply gas and build an LNG terminal.

China Petroleum & Chemical Corp (Sinopec Corp) and Macau Natural Gas Co Ltd are equal co-owners of Sinosky Energy.

The contract says the gate price of the gas must be as close as possible to the cost, and that it must be reviewed and adjusted every three years.

It also says that if there is a big fluctuation in prices internationally, either party may demand an immediate revision and adjustment.

The chairman and executive director of Sinosky Energy, Michael Tong Seak Kan, said his company was paying more for its gas than it got for selling it.

Sinosky Energy imports gas from the mainland for RMB2.35 (MOP2.99) per cubic metre, but the selling price is fixed at MOP2.70.

“When we signed the contract with the Macau government, the renminbi rate was HK$100 [MOP103] to RMB108, but now it’s HK$100 to RMB80, and we cannot change the selling price”, he said.

Mr Tong said his company will continue to supply natural gas while it is waiting for the government’s answer to its request for a price rise.

“We contacted the government many times within these two years, but the government has some concerns and

continuously delays and delays this negotiation,” he said.

Furthermore, the practice in the mainland is that once a contract is signed you pay for what you order, even if you do not use it all.

Mr Tong said power utility Companhia de Electricidade de Macau – CEM SA was unwilling to let its contract with Sinosky Energy take this practice into account.

Mr Tong said legal action would be the company’s last resort.

“We want to have peace. We don’t want to go into court with the government.”

Sinosky Energy’s contract with the government is not its only problem.

Imports of gas from Hengqin Island were suspended last June for six months because blasting was going on near the gas pipeline there.

But imports have still not resumed.

The supplier, CNOOC Gas & Power Group Co Ltd, said in December that its pipeline in Zhuhai was

leaking, having been punctured by a dredger.

The director of the government’s Energy Sector Development Office, Arnaldo Santos, said in an email that the supplier was still repairing the pipeline.

Mr Santos said the interruption of the gas supply has not affected the electricity supply.

He said electricity suppliers could still burn oil to generate power.

CEM has substituted diesel for LNG or imported its own gas, incurring higher costs, which the government is reimbursing.

Macau imported about 82 percent of its electricity from the mainland in 2011, and generated 18 percent at home.

Mr Tong believes Sinosky Energy will be able to resume distributing gas in April.

Sinosky Energy’s contract with the government says that in the short term the company should build an LNG facility on Hengqin Island and pipe the gas to Macau.

The contract also says the company should build a satellite facility in Macau to ensure the city has at least seven days of supply.

“Two or three years ago, we requested the government to provide us land for a small LNG station, considering that, according to our contract, we need to protect the natural gas supply for domestic use for seven days,” said Mr Tong.

“So, if any emergency case, we can continuously supply gas.”

But, he said the government had yet to allocate any land for this purpose.

MOP94 million Sinosky Energy (Holdings)

accumulated losses over the past five years

5 |

business daily April 3, 2012

macau

Delays bedevil gas terminal

M

acau is supposed to get a liquefied natural gas (LNG) terminal, but there is little sign of it yet.

The contract between the government and gas importer Sinosky Energy (Holdings) Co Ltd calls for an LNG terminal on Huang Mao Island or close to the Zhuhai Maritime Zone, to begin operating in 2009.

The first phase of the terminal is meant to handle 2 million tonnes of LNG a year and the second phase, due to be completed in 2013, is meant to expand capacity to 5 million tonnes.

But work on the first phase has yet to start.

The chairman and executive director of Sinosky Energy, Michael Tong Seak Kan, said the first phase will start operating only in 2016, seven years late.

Mr Tong said this is because his company is still negotiating with suppliers abroad.

“Now we are negotiating with several countries: Indonesia, two countries in the Middle East and the USA,” he said.

The cheapest supplier is now the United States, but there is an obstacle.

“It needs to get the American government’s approval, because Macau belongs to China,” Mr Tong said.

“We expect an answer by the middle of this year.”

The terminal will now be built on an artificial island 6.2 km from Coloane, to be accessible through a tunnel.

“The delays of the terminal occur because we cannot confirm LNG supply, since we want to provide cheaper LNG,” Mr Tong said.

Sinosky Energy should have been handling at least 520 million cubic metres of gas a year since 2009, but because there is no terminal, it is handling a lot less.

Census Bureau data show that the most gas Sinosky Energy has imported in one year was 154,514 cubic metres, imported in 2010.

The insufficient supply of gas means the power produced by Companhia de Electricidade de Macau – CEM SA is more expensive than it could be, because CEM must burn more expensive kinds of fuel to make it.

The plans for the LNG terminal have undergone many changes.

The changes began when the president of China Petroleum & Chemical Corp (Sinopec Corp), which owns half of Sinosky Energy, was arrested on suspicion of corruption, and his successor

decided to revise the plans.

Now the terminal may never be built – at least, not by Sinosky Energy, which fears bankruptcy because it pays more for its gas than it sells it for.

However, Mr Tong is confident the government will let his company raise its selling price.

When Sinosky Energy first complained publicly about its losses, the Office for the Development of the Energy Sector retorted that LNG was only an alternative source of energy and that the public would not miss it.

“If there’s no room, and we keep losing instead of making money, no one would want to continue,” the director of the office, Arnaldo Santos, said at the time.

Mr Santos declined to answer Business Daily’s questions about this topic.

L. L.

Distributor holds back

S

inosky Energy (Holdings) Co Ltd’s contract with the government says it should be sending natural gas to Companhia de Electricidade de Macau – CEM SA through a distribution company, but it is still not doing so.

The distribution work was put out to tender in 2007.

Two years later Nam Kwong Natural Gas Co Ltd was proclaimed the winning bidder.

“The company has the licence already, but they haven’t signed the contract yet with the government.

So we are still waiting to know when we can supply gas for domestic [use] through Nam Kwong”, said the chairman and executive director of Sinosky Energy, Michael Tong Seak Kan. Portuguese news agency Lusa reported last year that the contract with Nam Kwong Natural Gas would be signed in either in late 2011 or early 2012.

Business Daily tried to contact Nam Kwong Natural Gas but had had no response by press time.

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business daily April 3, 2012

MACAU

InBrief No pay increase for public

workers under task contract

CE wants better service Macau’s service quality has room for improvement, Chief Executive Fernando Chui Sai On said upon returning from Hainan island on Sunday. He called for focus on diversifying services for visitors from different markets and on boosting overnight stays. Macau, he said, had earned notoriety as a tourist destination in the last five years.

Tsinghua to give a green hand The School of Environment at Tsinghua University will help Macau’s Environmental Protection Bureau launch studies on green policies and technologies, according to a deal signed recently. The Beijing-based mainland Chinese university has agreed to expand existing cooperation, boost environmental studies, staff training and technical exchanges.

Greyhound deal is off The agreement to get retired greyhounds into a re-homing programme, between the Macau Yat Yuen Canidrome Company Ltd and Macau’s animal protection association Anima, is off even before it began. The first racing greyhound was to have been released to Anima on Sunday, but after the move was delayed, the association pulled the plug on the deal.

Land seized Authorities seized an illegallyoccupied plot of 3,800 square metres by the tennis courts in Hac Sá beach. It will now be used for projects under urban planning. This is the first such operation this year and brings the total area of land seized around Hac Sá to 25,600 square metres. Since 2009, the government has reclaimed more than 177,500 square metres of land from squatters.

The proposed salary increases for civil servants will not include workers with a limited-term contract, the government says amid protests from workers’ associations

by Vítor Quintã

quinta@macaubusinessdaily.com

T

he 6.45-percent pay rise for public servants will not include workers hired under a “task contract”, Secretary for Administration and Justice Florinda Chan has said.

Sunday’s confirmation of the decision has been criticised by the major associations of public workers.

“According to the government’s interpretation, people hired under this limited-term contract are not public workers,” the president of the Legislative Assembly’s third standing committee, Cheang Chi Keong, told the media.

The Public Administration and Civil Service Bureau is yet to respond to Business Daily’s request to clarify how many workers would be affected by the move.

Mr Cheang said the pay increase would apply to staff with individual contracts but task contract workers will benefit only their contract includes a provision for pay increments.

Legislator José Pereira Coutinho, who is also the president of the Macau Civil Servants’ Association, rejected the argument that task contracts were merely used for

short-term assignments. ”There are teachers working for the Minors Institute under a task contract for 10 consecutive years,” Mr Coutinho said. “This is a practical example of how false task contracts are being to further exploit workers. Task contract workers have always been exploited in public administration.”

He said the situation had hit the bottom and stressed that last year’s pay rise had included this group of workers.

Speaking after a meeting between the Legislative Assembly committee and government representatives, Mr Coutinho also criticised the authorities for not backdating the increase to January. The wage increase takes effect the month after the law is published in the official gazette.

“There were very few disagreements on the content of the draft bill … we will try to wrap up our work as soon as possible and, perhaps, sign off our report on April 12,” said Mr Cheang.

“We are confident there will be enough time for the raise to come into effect next month,” he added.

The Committee of Deliberation on the Remuneration of Public Administration Workers had called for the increase to be backdated to January but the government decided against it. “It was a political option,” said Mr Cheang.

Ms Chan claimed that to backdate it would mean spending an extra MOP900 million and will force the government to the recently created fiscal reserve.

All the member of the deliberation committee, including the head of the Public Administration and Civil Service Bureau, José Chu, “agreed to backdate it”, according to Mr Coutinho.

“Now they come and say no,” he said. “I am starting to get suspicious of the people who are part of the committee… There is a glaring lack of transparency in the committee works.”

Mr Cheang was critical of Mr Coutinho’s remarks.

“The committee is an advisory body and, as such, it’s not appropriate for the individual opinions that were shared within the committee to be aired in public,” he said.

Further calls for the wage increase for public servants to be backdated to January were dismissed by the government

Study questions opaque public tender process

by Kelsey Wilhelm

kelsey.wilhelm@macaubusinessdaily.com

T

he process for assessing public tenders in Macau lacks openness, according to a study published in the latest edition of the Public Administration’s magazine, which advises the government to take steps to ensure both fairness and transparency.

The report, led by Tang Tat Weng of the Financial Services Bureau, which looked at 502 tenders between 2008 and 2010, says the health services alone breached the law by evaluating 13 without applying all the criteria.

According to the report, lowest price was the sole consideration for many tenders. Factors such as public interest, administrative efficiency, production quality and technical capacity of the bidders were ignored.

The study finds the process “being conducted in

a confidential environment ... probably subject to needless interference” and believes the “results can be influenced”.

By a law of 2008, applicable to 26 public departments and services, price should be given at least half the weight in evaluations. There are 36 instances where this criterion was not honoured in the period under study.

When the “organisation, structure and scale of [the] business” is looked at, it favours larger businesses. “This is one factor of unfair competition, which pushes out small and medium businesses,” the study says.

It concludes that larger projects fuel corruption and bribery and are damaging the public interest. It advises the government to take due steps.

7 |

business daily April 2, 2012

MACAU

Philippine air carriers ‘safe’

Philippines Airlines and Cebu Pacific will continue operating in Macau despite safety concerns raised by a U.S. Federal Aviation Authority report

Macau demanded Philippines Airlines and Cebu Pacific provide information on their safety inspections

New airlines get green light

by Cláudia Aranda

claudia.aranda@macaubusinessdaily.com

P

hilippines Airlines and Cebu Pacific will continue regular flight operations to and from Macau.

The Civil Aviation Authority of Macau told Business Daily that there were “no concerns” with the safety of either carrier and both held valid air operator certificates.

The question marks over the airlines’ safety comes after a report by the US Federal Aviation Authority on the failure of the Civil Aviation Authority of the Philippines to meet international safety standards.

According to Philippine newspaper Journal Online, the US agency was in the Philippines in January.

It concluded “there is no evidence in official records of the Civil Aviation Authority of the Philippines (CAAP) showing that Philippines Airlines (PAL) and Cebu Pacific Air have passed the revalidation process to keep current licences to

operate known as the Air Operator Certificate (AOC)”.

As a result, Macau demanded both airlines provide information on their safety inspections.

A spokesman for the Civil Aviation Authority of Macau said it was normal procedure to ask for such information to ensure foreign airlines comply with Macau’s safety assessments.

Both Philippine Airlines and Cebu Pacific have requested to continue scheduled flights between the island nation and the SAR. “The letter to the Civil Aviation Authority of the Philippines to request the necessary information is part of the flight approval procedures for the Macau aviation authorities to assess the technical conditions of the operations,” the aviation authority said.

The authority added that, in accordance with the requirements,

international carriers must provide supporting documents for evaluation and approval. Those documents included a certified letter issued by the country’s regulatory body, aircraft registration documents, and a valid AOC or equivalent certificate that shows the relevant authorities are satisfied the operator can securely operate an aircraft. The operator’s insurance papers and flight schedules must also be provided.

The Philippines is deemed a “Category 2” under the International Civil Aviation Organisation, meaning that the safety oversight provided by the country’s regulatory agency does not meet the minimum international safety standards.

Safety and management concerns have resulted in the banning of all Philippine-based carriers from flying within the European Union and United States.

New CEPA up and running T he new supplement of the Mainland and Macau Closer Economic Partnership Arrangement came into effect on Sunday, with some new measures in finance. It allows any Macau bank to engage in the sales and distribution of mutual funds through an established mainland financial institution.

In addition, December’s agreement allows Macau companies to invest in the mainland securities market through the RMB Qualified Foreign Institutional Investor scheme.

The scheme was first launched on December 16 in Hong Kong, hand-in-hand with the existing Qualified Foreign Institutional Investor scheme, which allows approved foreign institutional investors to invest in A shares.

With the new scheme, authorised firms can use yuandenominated funds raised in Hong Kong to invest in the mainland’s securities market.

The purpose of the new scheme is to reduce investment barriers in the country’s market, attracting more funds from outside China, as all funds will put directly in the

mainland securities market.

The latest supplement further liberalises the service sector. Local companies will be able to offer services not only in the areas they work on in Macau but also in other sectors.

The eight additions to the deal introduced in 2004 includes three new areas: services linked to the manufacturing industry; interdisciplinary research and experimental development services; and services in libraries, archives, museums and other cultural areas.

The supplement further extends market facilities in the 11 service sectors already liberalised such as legal services, distribution, banking, securities brokerage, insurances, healthcare and tourism, amounting to 281 such measures in 46 sectors.

Moreover, Macau businessmen are now allowed to set up medical clinics or hospitals not only in the provinces and cities of Guangdong, Fujian, Shanghai, Hainan and Chongqing but also in the capitals of all provinces and autonomous regions.

T

hree low-cost carriers have been given the goahead to start flying to and from Macau as early as this month.

The Civil Aviation Authority of Macau told Business Daily that all application procedures have been approved for the three airlines.

The Taiwanese Mandarin Airlines is scheduled to operate daily charter services between Taichung, Taiwan and Macau, starting April 21.

Thai AirAsia is scheduled to start daily flights between Chiang Mai and Macau commencing on May 22.

Macau will be Thai Smile Airlines’ first destination. The recently established low-cost carrier is operated by Thai Airways International, and is scheduled to begin direct flights twice daily between the SAR and Bangkok on July 1.

In addition, AirAsia Philippines has requested permission to operate scheduled services between Clark International Airport, in Angeles City, Pampanga, and Macau.

The airline is the Philippine affiliate of AirAsia and, if approved, could start daily flights as soon as June 1.

Korean Air Busan has also shown their intention to operate charter services between Busan and Macau. The bureau’s spokeswoman said Macau authorities had yet to receive a formal application.

C.A.

8 |

business daily April 3, 2012

MACAU

Hotels enjoy China’s second-fastest revenue growth Macau’s hotels are the second most lucrative in Greater China, behind only Hong Kong’s – and revenue is growing faster in Macau

T

he HVS Quarterly Hotel Market Update, released yesterday, says Macau’s hotel revenue in the fourth quarter of last year was 23.6 percent bigger than a year before, growing at the secondfastest pace in any of the main cities

of Greater China, including Taipei and Hong Kong.

Growth was faster only in the northern city of Dalian, where revenue per hotel room jumped by 45 percent – albeit to an average of just RMB239 (MOP303.60).

Macau’s 22,356 hotel and guesthouse rooms brought in record high average revenue of MOP1,377 (US$172.20) each in the fourth quarter of last year, having previously brought in MOP1,114 a year earlier.

In Hong Kong, average room revenue was HK$1,432 (MOP1,475).

Hong Kong also had the most expensive hotel rooms, with an average rate of HK$1,558 a night.

Macau had the next most expensive rooms, costing an average of MOP1,516.

Hong Kong had the highest occupancy rate, with 91.9 percent of its hotel rooms booked.

Macau had the next highest, filling 90.8 percent of its rooms – its best occupancy rate yet.

Macau’s hotel business benefitted from the city attracting 28 million tourists last year, more than ever before.

“This is mainly attributable to strong gaming demand, increased capacities, favourable exchange rates, increased accessibility and tourism promotion campaigns,” the report says.

Macau’s hotel and guesthouse industry added 2,265 rooms last year.

Mainland tourists were favoured by a 4.3 percent appreciation of the yuan against the pataca.

“Despite turbulence in the global economy, 2011 was a triumphant year for the region, with markets setting new records one after the other,” the report says.

In Taiwan, Taipei was most expensive destination, with an average room rate of NT$3,932 (MOP1,607) a night.

In the mainland, rooms in the resort city of Sanya on the southern island of Hainan cost an average of 502 yuan.

Hainan eager to learn from Macau The island of Hainan can learn a lot from Macau about duty-free shopping, quality of service and lotteries, but they are not direct competitors, an official says

By Cherry Lee ceci-lqq@macaubusinessdaily.com

T

he beach resort island of Hainan wants to become the next international tourist draw.

The Chinese-language Macau Daily News quoted Tan Li, a member of the standing committee of the Communist Party in Hainan province, as saying the number of tourists there has grown a lot in the past two years because of duty-free shopping and the yachting industry.

Mr Tan said Hainan had many things to learn from Macau.

Mr Tan said the island had the most convenient visa policy in the mainland.

If they are in package tour parties of at least five passengers, visitors from

26 countries can stay in Hainan for up to 15 days without visas.

Visitors from Russia, South Korea and Germany can stay up to 21 days.

Macau and Hainan both want to be international tourist destinations.

But Mr Tan said they were not direct competitors.

Macau already has duty-free shopping and is planning to develop its yachting industry.

In contrast, Hainan has only two duty-free shops.

The duty-free shops in the city of Sanya and at Haikou airport have average daily sales of RMB4.89 million (MOP6.2 million).

They have an average of 800,000

customers per day, each spending about RMB2,380.

Mr Tan said Hainan had plenty to learn from Macau about duty-free retailing, improving the quality of service and promoting tourism.

He said Macau’s experience could be useful for Hainan in setting up a lottery.

The central government has spoken of the possibility of allowing a lottery and real-time sports betting on the island.

Chief Executive Fernando Chui Sai On returned yesterday from Hainan, where he attended this year’s Boao Forum for Asia. He also stressed that the island’s development doesn’t mean Macau will be negatively affected.

Weather Beijing 17/3 o C Changchun 4/-3 o C

Harbin 7/-3 o C

Xian 18/3 o C Shanghai 17/8 o C Chengdu 23/14 o C Kunming 20/8 o C Haikou 26/20 o C Sanya 30/24 o C

Guangzhou 25/17 o C

MACAU (2-8 April) Day

Temperature

Humidity

04/02

19/24 o C

60/90 %

04/03

18/24 o C

55/95 %

04/04

17/23o C

55/90 %

04/05

19/23 o C

70/90 %

04/06

18/23 o C

75/95 %

04/07

17/22 o C

60/85 %

Shenzhen 26/21 o C

ASIA (today)

Hong Kong 27/21o C

Manila

SINGAPORE

TOKYO

Jacarta

32/25 o C

32/25 o C

12/9 o C

29/25 o C

Macau 28/19 o C

Bangkok

SEOUL

K. lumpur

taipei

39/27 o C

14/2 o C

31/25 o C

28/14 o C

9 |

business daily April 3, 2012

GREATER CHINA

Upbeat China pressures German Bunds Lucy Meakin and Keith Jenkins

G

erman bonds declined for the first time in five days after a gauge of Chinese manufacturing improved in March, reducing demand for safer assets.

Ten-year bund yields climbed from the lowest level in three weeks as Germany prepared to sell 4 billion euros (US$5.34 billion) of sixmonth bills. The Netherlands and France also plan to auction shortmaturity debt. A euro-area report showed factory output in the region contracted last month. Italy led gains among Europe’s higher-yielding government debt.

“There is no strong bid for bunds with 10-year yields below 1.8 percent,” said Matteo Regesta, a senior fixed-income strategist at BNP Paribas SA in London. “The market is focusing on fundamentals. Italian rates are coming down smoothly.”

The German 10-year yield climbed three basis points, or 0.03 percentage point, to 1.83 percent in morning trading London time. The rate dropped to 1.789 percent on March 30, the least since March 13. The 2 percent bond due January 2022 fell 0.295, or 2.95 euros per 1,000-euro face amount, to 101.53.

China’s Purchasing Managers’ In-

Mainland outlook cuts demand for ‘safer’ assets

dex for manufacturing advanced to a one-year high of 53.1 in March, the logistics federation and the National Bureau of Statistics said.

Italian 10-year bonds advanced, pushing the yield on the securities down three basis points to 5.08 percent. The extra yield investors demand to hold the securities over bunds fell seven basis points to 326 basis points. The yield on Italy’s two-year note slid 11 basis points to 2.81 percent.

Progress Italian Prime Minister Mario Monti said the region has made “great progress” in dealing with its sovereign-debt crisis but it would be dangerous to be too complacent. He spoke in Beijing on March 31, urging China to invest in Italy and the euro zone.

Euro-region manufacturing contracted in March, with an indicator declining to 47.7 from 49 in February, London-based Markit Economics said. That’s in line with an initial estimate released last month.

Spanish 10-year yields fell six basis points to 5.30 percent. A Purchasing Managers’ Index of manufactur-

ing in Spain slid to 44.5 in March, from 45 a month earlier.

German bunds returned 0.3 percent last quarter, their worst performance in a year, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Portuguese bonds gained 13 percent, the biggest advance among 26 sovereign markets tracked by the indexes.

U.S. 10-year Treasury notes yielded as much as 46 basis points more

than same-maturity German bunds yesterday, the most in 13 months, based on closing prices.

U.S. 10-year yields will rise to 2.54 percent by the end of this year, according to the average forecast in a Bloomberg News survey, with the most recent estimates given heavier weighting. The 10-year bund yield will climb to 2.45 percent by the end of 2012, a separate poll shows.

Bloomberg

Samsung’s US$7bn on China chip plant

China rail builders beat estimates

Healthy fourth quarter orders Demand for flash memory to rise by half to 2015 drive stocks

C

hina Railway Construction Ltd. and China Railway Group Ltd., the nation’s two biggest listed builders, rose the most in about two months in Hong Kong after rising margins helped them report higher-than-expected profits.

China Railway Construction jumped as much as 7.5 percent, the biggest intraday gain since February 2, while Beijing-based China Railway Group climbed as much as 6 percent, the most since Feb. 9. The Hang Seng Index fell 0.6 percent.

The two builders reported annual earnings after the market closed on March 30.

China Railway Group predicted an increase in new contracts this year as the builders expand in new markets to help offset a slowdown in Chinese high-speed rail plans.

China Railway Construction, based in Beijing, benefited from a jump in fourth- quarters orders and from recovering cost overruns in rail contracts, said Jefferies Group Inc. analysts led by Julian Bu. “All contractor results were marked by fantastically high fourth-quarter margin,” they said. China Railway Construction booked more orders in the fourth quarter than in the previous three quarters combined,

By Jun Yang they added.

The analysts upgraded the company to hold from underperform, and reiterated a HK$5.00 price target.

The builder’s push into building housing and highways helped cushion the impact of a decline in new railway orders, they said.

The company rose 7 percent to HK$5.17 in morning trading.

China Railway Group was up 4.4 percent. Markets in China were closed yesterday for a holiday.

China Railway Group expects to win new contracts totaling Rmb650 billion (US$103 billion) this year, surpassing last year’s total of Rmb570.8 billion, it said in a statement. Profit last year declined 9.6 percent to Rmb6.69 billion.

That surpassed the Rmb5.79 billion average of nine analyst estimates compiled by Bloomberg.

China Railway Construction’s 2011 net income surged 85 percent to Rmb7.85 billion, beating the Rmb6.8 billion average of nine analyst estimates compiled by Bloomberg. The company expects Rmb550 billion of new contracts this year compared with last year’s tally of Rmb681.2 billion, according to a statement.

Bloomberg

S

amsung Electronics Co., the world’s largest maker of computer-memory chips, will spend US$7 billion building a semiconductor factory in China as demand grows, fuelled by mobile devices including Apple Inc.’s iPhone and iPad. The company will invest US$2.3 billion initially in the Xi’an plant, Suwon, South Korea-based Samsung said in a regulatory filing. The factory will start producing semiconductors known as NAND flash next year.

Samsung is boosting spending as demand for flash memory, used to store media including photos, videos and applications permanently, is expected to climb 49 percent in the five years to 2015, according to IHS Inc., an Englewood, Colorado-based market research firm. The Xi’an facility is the company’s largest investment in an overseas factory, Samsung said.

“A single factory of this size could be the largest in the industry,” Seo Won Seok, a Seoul-based analyst at Korea Investment & Securities Co., said.

“For NAND flash, China will be a key production site, along with Korea.”

Samsung is building the plant in China because the world’s most

populous country is growing as a key chip market, the company said in December. Competing memory chipmakers, including Tokyo-based Elpida Memory Inc., are losing money after the prices for DRAM chips, another type used in personal computers, reached a record low.

Samsung opened a new factory in South Korea in September. The 12 trillion-won (US$10.6 billion) facility is the largest in the industry and can produce NAND flash chips as well as DRAM. The company also has a semiconductor plant in Austin, Texas, making both memory and logic chips, including application processors used in mobile phones.

Samsung started operating the Austin factory’s logic-chip production line at full capacity in October, about five months after operations began.

Bloomberg

10 |

business daily April 3, 2012

CHINA

InBrief

Growth slowdown no cause for alarm

Petrol prise rise drags down Taiwan stocks Taiwan stocks ended down 0.88 percent yesterday, pulled down by concerns over company profits after the government allowed state-run oil firm CPC Corp to raise fuel prices by an average 10.7 percent, though oil firms themselves benefited. The main TAIEX index fell 70.10 points to 7,862.90, weighed by glass and automobiles, which were both down more than 2 percent. Oil and gas stocks, gained 0.85 percent. Apple Inc’s major supplier Hon Hai Precision shed 3.06 percent. Its chairman told Reuters in an interview on Sunday that it would continue to raise wages for its China workers. The Taiwan dollar firmed by T$0.043 to trade at T$29.487.

iPad trademark fight stays on track A Chinese court rejected a creditor’s application to liquidate Proview Technology (Shenzhen) Co., allowing the failed display maker to pursue its legal fight against Apple Inc. over the iPad trademark in China. The Shenzhen Intermediate People’s Court ruled against Fubon Insurance’s bid to liquidate Proview, Roger Xie, a lawyer for Proview, said by phone yesterday.

The decision was released to litigants on March 31, he said. The same Chinese court ruled in November that Proview owned the iPad trademark in China, saying Apple’s 2009 contract to acquire rights to the name was invalid.

Proview will continue its litigation with Apple, Xie confirmed.

NagaCorp shareholder selling US$88mn stake A shareholder of Hong Kong-listed NagaCorp, developer and operator of a Cambodian casino resort in the capital Phnom Penh, is selling a 214 million-share stake in the company for as much as HK$680.52 million (US$88 million), according to a term sheet obtained

by Bloomberg news. The shares are being offered by Fourth Star Finance Corp. for between HK$3.04 to HK$3.18 each, the document shows.

Morgan Stanley is managing the sale.

China’s economy on track to grow with a more moderate pace of expansion

C

hina’s economy is on track to grow between 8 and 9 percent this year, with a more moderate pace of expansion helping to contain inflation, Fan Gang, an influential Chinese economist and former central bank adviser, said yesterday A spate of recent Chinese data has fanned market fears of a sharp slowdown in the world’s second-largest economy, but Fan, who heads the National Economic Research Institute, a Beijing-based think-tank, said the economy is in track for a soft landing.

“I would like to argue growth between 8 percent and 9 percent is not low growth but normal growth, that will create jobs without creating inflation,” he told the 2012 Boao Forum on the southern Chinese island of Hainan.

“It’s a soft landing and growth may slow ... say, between 8.3 percent to 8.5 percent,” he said.

Mr Fan said China still needs relatively fast growth, driven by contin-

ued industrialisation and urbanisation to help absorb more people moving from rural areas into cities.

China has cut its annual growth target to 7.5 percent this year, a pace the government hopes will give it room to push structural reforms.

Analysts broadly expect the growth target to be exceeded and few expect a hard landing. The economy grew 9.2 percent in 2011.

Annual economic growth is widely seen slowing to just over 8 percent in the first quarter of 2012. Inflation dipped to a 20-month low of 3.2 percent in February, but Chinese leaders have warned against possible risks from rising global oil prices.

China’s labour shortages have fanned a debate among academics about whether the country is near or crossing the Lewis turning point, a theory that wages in a developing nation start surging once there is a shortage in surplus rural labour.

Just over 51 percent of the 1.35 billion mainland Chinese lived in

towns and cities at the end of 2011, the government has said, crossing the halfway mark after three decades of rapid growth in the world’s most populous nation.

But Mr Fan said he believes China has yet to reach the demographic turning point as only 30-35 percent of the population still relies on farming as their source of income.

China’s slowdown is led by the country’s richer coastal provinces, but the inland provinces are catching up as many companies are moving to the interior to cut costs, he said.

That partly explains why there has been a labour shortage in coastal areas, China’s traditional export hubs, he added.

The government needs to improve the business environment for Chinese manufacturers to prevent them from moving to foreign countries, a shift could undermine employment, he said.

Reuters

Beijing calls for inclusive transpacific trade pact

Trade arrangements should not be protectionist, says senior Chinese trade official

T

he United States must not isolate any particular country when it expands the Trans-Pacific Partnership trade pact (TPP), as Asia needs balanced and sustainable trade and economic growth, a senior Chinese trade official said yesterday.

“Now we have more than 60 (trade) arrangements coexisting in the region. TPP is only one of the 60. Any such arrangements should not be exclusive or protectionist,” Yu Jianhua, assistant commerce minister, said at the Baoao Forum for Asia on the tropical Chinese island of Hainan.

With Europe mired in a prolonged debt crisis, the Obama administration sees the fastgrowing Asia-Pacific region as key to boosting exports.

The TPP pact is also seen as crucial to ensuring the United States helps to write the rules for trade in the Asia-Pacific region, as Washington is desperate to create jobs at home and looking for ways to cement its presence in Asia.

But some Chinese analysts see the TPP as a political move by Washington to isolate Beijing on

trade with Asia’s biggest economies.

China and the United States must respect the interests of the other side, as the two countries share the common interest in the AsiaPacific region, Mr Yu said.

Any regional trade deals should be complementary to the World Trade Organization (WTO) mechanism, although a deadlock in the longrunning Doha round negotiation makes regional free trade talks become more important than

China’s assistant commerce minister, Yu Jianhua, says Asia needs balanced and sustainable trade and economic growth

before, he said.

“The WTO is the best way to boost international trade and the regional cooperation is only a complementary rather than a substitute,” he added.

The pan-Pacific free trade talks got a jolt of excitement in November when Japan, the world’s thirdlargest economy, announced its interest in joining the pact.

Chinese Premier Hu Jintao had said last year that the TPP was only one avenue toward that goal, along with two alternatives that currently do not include the United States - the East Asia Free Trade Area and the Comprehensive Economic Partnership for East Asia.

The current TPP participants are the United States, Australia, New Zealand, Vietnam, Malaysia, Singapore, Brunei, Chile and Peru.

The deal, with Japan included, would create a regional economic group about 40 percent larger than the 27-nation European Union.

Canada, Mexico, the Philippines, Papua New Guinea and South Korea are seen as potential TPP participants.

Reuters

11 |

business daily April 3, 2012

ASIA

DBS Group of Singapore InBrief swoop for neighbouring lender Indonesia’s Bank Danamon sold for US$7.24 billion

By Saeed Azhar and Kevin Lim

Indonesia inflation picks up Indonesia’s inflation picked up in March to 3.97 percent from a year earlier, though the scrapping of plans to lift fuel prices right away should let the central bank hold rates and keep focusing on supporting growth in Southeast Asia’s biggest economy. March annual inflation of 3.97 percent was below the 4.02 percent expected in a Reuters poll but higher than February’s 3.56 percent. Bank Indonesia (BI) is now widely expected to leave its benchmark policy rate on hold at a record low when it meets on April 12 as it seeks to prop up growth.

D

BS Group Holdings, Southeast Asia’s biggest bank, has agreed to pay US$7.24 billion for Indonesia’s Bank Danamon, offering a hefty 52 percent premium. It has raised questions among investors over whether DBS has overpaid.

The deal, Asia’s fourth-largest banking takeover, would make Singapore-based DBS the fifth largest lender in Indonesia, one of the region’s hottest markets where bank penetration is relatively low and annual loan growth is running at 20 percent.

“What this deal does for us is changing DBS from being 11 percent in high-growth markets to 33 percent exposure to highgrowth markets,” Chief Executive Piyush Gupta told a briefing in Jakarta on Monday, noting that DBS was perceived as a lowmargin, mature-market bank.

But the price - S$6.2 billion (US$4.93 billion) in shares and the rest in cash - surprised some investors. DBS is also buying most of Danamon from Singapore state investor Temasek Holdings , also

a major shareholder in DBS. “DBS has to explain and illustrate the synergistic value it will gain for paying such a premium,” said Roger Tan, CEO of SIAS Research, the research arm of the Securities Investors Association of Singapore.

“Though this step will take DBS one more step further in building a regional bank, they will have to show that their strategy is adding value to shareholders.”

Though the offer, worth 7,000 rupiah (US$0.77) per Danamon share, looked steep on a premium basis, it looked less generous using another valuation yardstick: at 2.6 times book value, the deal was below some other big banking takeovers in Indonesia.

DBS also signalled on Monday it wanted to expand as well in Malaysia, saying it had received approval to begin talks to buy an effective 14 percent stake in Alliance Financial Group - again from Temasek.

The Alliance stake is worth about US$270 million.

The acquisitions would be the

first major deals by DBS CEO Mr Gupta, who took the helm of the Singapore-based lender in late 2009 and is aiming to expand the bank beyond Singapore and Hong Kong, which account for the bulk of its profits.

DBS’ track record with acquisitions had been tarnished by its purchase of Hong Kong’s Dao Heng Bank more than a decade ago which led to two big write-downs in later years.

Aberdeen Asset Management, which owns DBS shares, said the Danamon move was logical for DBS, though it questioned whether the Indonesian government would have any concerns over the deal.

Indonesia’s central bank last year mooted a law to limit bank ownership, putting several deals in the sector on ice, but the country’s state deposit agency recently said that policymakers would not implement the regulation.

“It will be interesting to see the reaction of Indonesian authorities,” said Hugh Young, who heads Aberdeen’s Asian operation.

Reuters

Thai confidence up for fourth month Thailand’s consumer confidence rose for a fourth straight month in March as the outlook for the economy improved after last year’s floods. An index measuring sentiment climbed to 66.5 from 65.5 in February, the University of the Thai Chamber of Commerce said. Thai exports rebounded in February, and the Finance Ministry last month raised its growth forecast for this year, citing a recovery in economic indicators after the worst floods in almost 70 years. The International Monetary Fund said last month the Thai economy will expand by 5.5 percent this year and 7.5 percent next year, driven by the government’s stimulus measures and post-flood reconstruction.

Korean won rises on Moody’s upgrade Country’s fiscal position improving

T

he Korean won rose on Monday as Moody’s Investors Service upgraded South Korea’s ratings outlook to positive from stable. It cited strong and improving fiscal positions and an easing external vulnerability of the banking sector.

Enrico Tanuwidjaja, a currency strategist at Maybank in Singapore, said the move was expected to add momentum to buy the won versus the U.S. dollar and the Japanese yen. The won rose 0.7 percent against the yen.

South Korea led gains among emerging Asian currencies, but rises in the currency markets were limited as investors took profits on regional units

because of sustained caution over China’s economy.

Among other gainers, interbank players and speculators bought the Singapore dollar, but some U.S. banks took profits, limiting its rises, dealers said. The Philippine peso gained on remittance inflows but also saw profit taking cap the currency’s appreciation.

Market players were hesitant to chase emerging Asian currencies further, seeing the improvement as largely seasonal. China is scheduled to release first-quarter growth data on April 13.

Agencies

Caterpillar Japan unit moves abroad Caterpillar Inc.’s Japan unit will move production of wheelloaders and bulldozers overseas to focus output inside the country on high-tech components for excavators, said president Noriyuki Takeuchi.

12 |

business daily April 3, 2012

MARKETS Hang Seng Index - last 6 months

Hang SENG INDEX

22000

Price

Day %

VOLUME

(H) 52 W

(L) 52 W

28.45

1.246

39433552

29.9

19.84

ALUMINUM CORP OF CHINA LTD-H

3.74

1.081

13196000

7.8

3.2

BANK OF CHINA LTD-H

3.13

1.623

348028583

4.5

2.2

3328

BANK OF COMMUNICATIONS CO-H

5.87

0.514

51585214

7.845

4.15

23

BANK OF EAST ASIA

29.2

-1.518

2564084

34.45

21.85

1880

BELLE INTERNATIONAL HOLDINGS

13.94

-0.429

8855820

17.54

11.38

2388

BOC HONG KONG HOLDINGS LTD

21.45

-0.694

14586947

25.6

14.24

293

CATHAY PACIFIC AIRWAYS

14.38

-2.575

17829313

20.15

11.8

1

CHEUNG KONG HOLDINGS LTD

100.3

-2.998

13813594

131.8

79.1

1898

CHINA COAL ENERGY CO-H

8.71

-0.229

27535221

11.66

6.59

939

CHINA CONSTRUCTION BANK-H

6

0.503

218484625

7.58

4.41

2628

CHINA LIFE INSURANCE CO-H

20.15

0.249

18836916

30.6

17.04

144

CHINA MERCHANTS HLDGS INTL

26

0.971

3975363

37.6

19

941

CHINA MOBILE LTD

85.45

1.545

23677116

87.5

68.05

688

CHINA OVERSEAS LAND & INVEST

14.76

0.682

35346021

17.86

386

CHINA PETROLEUM & CHEMICAL-H

8.46

0

68260317

291

CHINA RESOURCES ENTERPRISE

27.1

-0.184

9473298

1109

CHINA RESOURCES LAND LTD

13.42

0.299

17270900

15.92

836

CHINA RESOURCES POWER HOLDIN

14.38

2.276

4481125

16.2

1088

CHINA SHENHUA ENERGY CO-H

32.75

0.153

20483423

40.2

762

CHINA UNICOM HONG KONG LTD

13.16

1.075

21989036

267

CITIC PACIFIC LTD

13.08

-0.153

2

CLP HOLDINGS LTD

67

-0.298

883

CNOOC LTD

15.96

0.251

1199

COSCO PACIFIC LTD

11.72

0

330

ESPRIT HOLDINGS LTD

15.6

101

HANG LUNG PROPERTIES LTD

28.45

11

HANG SENG BANK LTD

12

HENDERSON LAND DEVELOPMENT

1044

HENGAN INTL GROUP CO LTD

78.5

2.951

3

HONG KONG & CHINA GAS

19.9

-0.748

CODE

Name

1299

AIA GROUP LTD

2600 3988

20800 19600 18400 17200 16000 (L) 52 W

VOLUME

(H) 52 W

-1.136

4310865

186.5

-1.083

16808315

85.35

56

-1.834

16225337

94.7

53.6

5.01

1.623

326805173

6.75

3.46

17.82

-2.835

35615169

20.9

10.82

3996912

29.2

22.45

58252527

13.226

6.13

CODE

Name

388

HONG KONG EXCHANGES & CLEAR

5

HSBC HOLDINGS PLC

9.99

13

HUTCHISON WHAMPOA LTD

9.67

6.22

1398

IND & COMM BK OF CHINA-H

35.5

24

494

LI & FUNG LTD

7.28

66

MTR CORP

27.8

1.091

10.82

17

NEW WORLD DEVELOPMENT

9.33

-2.406

27.1

857

PETROCHINA CO LTD-H

10.98

2.235

94596143

12.5

8.59

17.68

12.54

2318

PING AN INSURANCE GROUP CO-H

58.7

0.514

8094321

87.9

37.35

3632208

24.6

10.26

6

POWER ASSETS HOLDINGS LTD

3407696

75.2

62

83

SINO LAND CO

75314692

21.3

11.2

16

SUN HUNG KAI PROPERTIES

9668609

17.16

7.52

19

SWIRE PACIFIC LTD-A

-0.763

9442206

36.75

7.55

700

TENCENT HOLDINGS LTD

216.6

0.53

14075298

36.25

20.85

322

TINGYI (CAYMAN ISLN) HLDG CO

22.45

103.2

-1.244

1886351

127

84.4

151

WANT WANT CHINA HOLDINGS LTD

42.85

-2.503

17343181

56.95

33.2

4

WHARF HOLDINGS LTD

3375201

78.5

56.05

12441917

20.65

16.68

Price 20555.58

(L) 16170.35

Price

Day %

130.5 68.5 77.6

99.15

57

0

2344201

64.8

51.1

12.4

-3.577

29072157

14.16

8.482

96.5

-13.141

120526573

129

85.45

87.05

-1.971

2140338

103.896

69.321

0.278

4397562

230.8

139.8

3.695

16998786

26

17.84

8.68

2.118

24295428

9.07

5.99

42.2

-2.877

10494104

59

33.15

(H) 24468.641

23

22

3

Shanghai Shenzhen CSI 300 Name

Price

Day %

VOLUME

AGRICULTURAL BANK OF CHINA-A

2.68

1.132

96216187

AIR CHINA LTD-A

5.88

0.685

7988064

ALUMINUM CORP OF CHINA LTD-A

6.57

0.922

12333571

ANGANG STEEL CO LTD-A

4.28

0.234

6686214

Name

Price

Day %

VOLUME

CHINA UNITED NETWORK-A

4.23

0.714

101526501

CHINA VANKE CO LTD -A

8.28

1.099

43236556

CHINA YANGTZE POWER CO LTD-A CITIC SECURITIES CO-A

6.52

0.617

9355050

11.59

2.657

73157155

Name

Price

Day %

NINGBO PORT CO LTD-A

2.46

-0.405

7486111

PANGANG GROUP STEEL VANADI-A

6.71

-1.468

48139788

PETROCHINA CO LTD-A

VOLUME

9.69

-0.206

12614723

PING AN INSURANCE GROUP CO-A

36.58

0.938

19483204 49255781

15.78

1.675

26566333

CSR CORP LTD -A

4.44

0.452

16105991

POLY REAL ESTATE GROUP CO -A

11.29

4.537

BANK OF BEIJING CO LTD -A

9.82

1.656

13513149

DAQIN RAILWAY CO LTD -A

7.45

1.915

52067190

QINGHAI SALT LAKE INDUSTRY-A

31.9

-2.267

8929999

BANK OF CHINA LTD-A

2.98

2.055

35279766

DATANG INTL POWER GEN CO-A

5.03

-1.373

4112584

SAIC MOTOR CORPORATION LTD-A

14.83

4.216

37503806 19369027

ANHUI CONCH CEMENT CO LTD-A

BANK OF COMMUNICATIONS CO-A

4.71

1.29

38629220

DONGFANG ELECTRIC CORP LTD-A

21.65

-0.046

8164043

SANY HEAVY INDUSTRY CO LTD-A

12.27

-0.406

BAOSHAN IRON & STEEL CO-A

4.77

0.421

17499506

EVERBRIGHT SECURITIE CO -A

11.97

1.269

8338634

SHANDONG GOLD MINING CO LT-A

32.79

-1.413

6686273

7.9

-0.126

5970109

GD MIDEA HOLDING CO LTD -A

13.12

0.923

12929451

SHANGHAI ELECTRIC GRP CO L-A

5.31

0

2290365

SHANGHAI PHARMACEUTICALS-A

11.14

-0.801

15680507

8.93

0.676

50587012

BBMG CORPORATION-A BYD CO LTD -A

28.3

4.044

10245919

CHINA CITIC BANK CORP LTD-A

4.26

0.948

9879058

2.58

1.976

58032525

GF SECURITIES CO LTD-A

GD POWER DEVELOPMENT CO -A

27.18

3.543

9599713

CHINA CNR CORP LTD-A

4.11

0

19654426

GREE ELECTRIC APPLIANCES I-A

20.33

2.109

13519941

CHINA COAL ENERGY CO-A

9.09

2.712

12740071

GUIZHOU PANJIANG REFINED-A

26.5

0.189

3389816

CHINA CONSTRUCTION BANK-A

4.83

1.684

46510422

HAITONG SECURITIES CO LTD-A

9.01

2.27

47256406

CHINA COSCO HOLDINGS-A

4.95

1.227

11913620

HANGZHOU HIKVISION DIGITAL-A

42.6

0.972

488977

32.25

3.068

8363704

HEBEI IRON & STEEL CO LTD-A

2.88

-0.69

15552534

3.58

1.13

11902572

HENAN SHUANGHUI INVESTMENT-A

68.9

0

1337109

CHINA CSSC HOLDINGS LTD-A CHINA EASTERN AIRLINES CO-A CHINA EVERBRIGHT BANK CO-A

2.85

1.064

25585157

CHINA INTL MARINE CONTAIN-A

13.61

0.074

6425109

HUATAI SECURITIES CO LTD-A HUAXIA BANK CO LTD-A

SHANGHAI PUDONG DEVEL BANK-A SHANXI LU’AN ENVIRONMENTAL-A

24.49

0.492

6903970

SHANXI XISHAN COAL & ELEC-A

14.68

-0.542

11469479

SHENZHEN DEVELOPMENT BANK-A

15.71

0.899

10631246

SHENZHEN OVERSEAS CHINESE-A

7.01

0

17025638

SINOVEL WIND GROUP CO LTD-A

15.08

0.199

1149434

9.75

-1.015

40978758

SUNING APPLIANCE CO LTD-A

8.78

1.738

12252712

TSINGTAO BREWERY CO LTD-A

32.57

-1.512

808443

10.73

1.514

14440840

WEICHAI POWER CO LTD-A

30.16

0.033

4763164 18187821

CHINA LIFE INSURANCE CO-A

16.35

1.742

6031784

IND & COMM BK OF CHINA-A

4.33

1.168

38033990

WULIANGYE YIBIN CO LTD-A

32.84

-2.898

CHINA MERCHANTS BANK-A

11.9

0.677

39187875

INDUSTRIAL BANK CO LTD -A

13.32

1.524

28867304

XINJIANG GUANGHUI INDUSTRY-A

23.56

-1.008

5860299

CHINA MERCHANTS PROPERTY -A

20.5

2.912

12936011

INNER MONGOLIA BAOTOU STEE-A

66.76

-1.228

33554678

YANGQUAN COAL INDUSTRY GRP-A

17.23

-1.317

11874245

CHINA MERCHANTS SECURITIES-A

11.35

-0.7

6933629

INNER MONGOLIA YILI INDUS-A

22.04

0.182

6518775

YANTAI CHANGYU PIONEER-A

94.22

-0.758

241521

6.27

2.451

132762711

5.95

-4.187

134498148

YANZHOU COAL MINING CO-A

22.21

0.09

4074427

49.22

1.234

2173582

20.5

-2.288

10582113

CHINA MINSHENG BANKING-A CHINA OILFIELD SERVICES-A

16.67

1.03

7721298

CHINA PACIFIC INSURANCE GR-A

19.29

1.956

17002961

INNER MONGOLIAN BAOTOU STE-A JIANGSU HENGRUI MEDICINE C-A JIANGSU YANGHE BREWERY -A

26.23

0.115

1429733

YUNNAN BAIYAO GROUP CO LTD-A

147.15

-3.508

1936829

ZHONGJIN GOLD CORP-A

CHINA PETROLEUM & CHEMICAL-A

7.19

0.842

17889436

JIANGXI COPPER CO LTD-A

23.91

0.252

6798177

CHINA RAILWAY CONSTRUCTION-A

3.96

0.508

17267670

JINDUICHENG MOLYBDENUM CO -A

12.74

-2.075

12572067

CHINA RAILWAY GROUP LTD-A

2.45

1.24

22200326

JIZHONG ENERGY RESOURCES-A

CHINA SHENHUA ENERGY CO-A

25.61

1.386

13316435

KWEICHOW MOUTAI CO LTD-A

CHINA SHIPBUILDING INDUSTR-A

5.61

1.081

20523869

CHINA SHIPPING CONTAINER-A

2.83

0.712

8528160

LUZHOU LAOJIAO CO LTD-A METALLURGICAL CORP OF CHIN-A

17.17

-0.98

7185637

196.96

-2.083

3795990

39.09

-2.251

5102636

2.55

0

19469249

ZIJIN MINING GROUP CO LTD-A

4.11

0.244

36403642

ZOOMLION HEAVY INDUSTRY S-A

8.66

0.932

19252893

16.43

2.177

12694968

ZTE CORP-A

Price 10640.16 (L) 2254.57

(H) 3380.53

CHINA SOUTHERN AIRLINES CO-A

4.51

0.895

21241875

NARI TECHNOLOGY DEVELOPMEN-A

31.57

0.445

3060635

CHINA STATE CONSTRUCTION -A

3.05

0.993

44244472

NEW HOPE LIUHE CO LTD-A

16.69

0.907

2365546

Price

Day %

VOLUME

Price

Day %

VOLUME

7.03

0.000

24562390

PICC PROPERTY & CASUALTY -H

9.53

3.139

17340259

CHINA NATIONAL BUILDING MA-H

10.14

3.575

73819590

PING AN INSURANCE GROUP CO-H

58.9

0.341

4390024

160

130

10

Hang SENG CHINA ENTREPRISE INDEX Name

Price

Day %

VOLUME

AGRICULTURAL BANK OF CHINA-H

3.34

0.300

69413959

Name

AIR CHINA LTD-H

5.25

-2.416

9715177

ALUMINUM CORP OF CHINA LTD-H

3.67

-1.872

23518105

CHINA OILFIELD SERVICES-H

11.26

1.077

5288000

SHANDONG WEIGAO GP MEDICAL-H

8.54

-3.720

5996000

ANHUI CONCH CEMENT CO LTD-H

24.9

1.220

13776118

CHINA PACIFIC INSURANCE GR-H

24.15

0.416

9303270

SINOPHARM GROUP CO-H

21.5

-0.922

3204800

BANK OF CHINA LTD-H

3.14

0.319

159547021

8.42

-0.473

48751131

TSINGTAO BREWERY CO LTD-H

42.55

1.430

943500

WEICHAI POWER CO LTD-H

36.35

0.276

3484417

YANZHOU COAL MINING CO-H

CHINA MINSHENG BANKING-H

CHINA PETROLEUM & CHEMICAL-H

BANK OF COMMUNICATIONS CO-H

5.88

0.170

25039701

CHINA RAILWAY CONSTRUCTION-H

5.23

8.282

20233000

BYD CO LTD-H

21.2

-2.304

3607265

CHINA RAILWAY GROUP LTD-H

2.69

8.032

44696946

4.6

-1.499

37608000

CHINA SHENHUA ENERGY CO-H

32.65

-0.305

11589281

CHINA COAL ENERGY CO-H

8.83

1.378

18804373

CHINA TELECOM CORP LTD-H

4.23

-1.628

40593989

CHINA COMMUNICATIONS CONST-H

7.53

-3.338

19518577

DONGFENG MOTOR GRP CO LTD-H

14.24

1.569

10294702

CHINA CONSTRUCTION BANK-H

6.01

0.167

111381717

4.9

-0.204

20620218

CHINA CITIC BANK CORP LTD-H

CHINA COSCO HOLDINGS-H CHINA LIFE INSURANCE CO-H

20.4

1.241

19073890

CHINA LONGYUAN POWER GROUP-H

6.46

-0.462

2812062

15.78

-0.630

11210656

CHINA MERCHANTS BANK-H

GUANGZHOU AUTOMOBILE GROUP-H HUANENG POWER INTL INC-H IND & COMM BK OF CHINA-H

7.9

2.597

6281253

4.33

2.607

14306000

5.01

0.000

211813877

JIANGXI COPPER CO LTD-H

18.14

1.568

10914344

PETROCHINA CO LTD-H

10.96

-0.182

49992738

NAME

PRICE DAY %

Name

16.76

-0.475

13669621

ZIJIN MINING GROUP CO LTD-H

3.1

0.649

21188500

ZOOMLION HEAVY INDUSTRY - H

10.3

-0.387

11129160

20.65

-1.196

5941732

ZTE CORP-H

Price 2454.90 29

(L) 8058.58

9

(H) 13770.730

2

FTSE TAIWAN 50 INDEX NAME

PRICE DAY %

Volume

Acer Inc

0.902

2703.059

39.15

Advanced Semiconductor Engineering Inc

1.700

6712.086

29.7

Asia Cement Corp

0.721

2351.863

Volume

First Financial Holding Co Ltd

0.870

5749.076

17.75

Formosa Chemicals & Fibre Corp

3.137

4267.854

86.2

35.95

Formosa Petrochemical Corp

1.488

1897.217

92

NAME

PRICE DAY %

Volume

SinoPac Financial Holdings Co Ltd

0.662

7288.503

Synnex Technology International Corp

0.966

1544.603

10.65 73.3

Taiwan Cement Corp

1.088

3692.176

34.55 18.5

Asustek Computer Inc

1.788

752.760

278.5

Formosa Plastics Corp

4.536

6120.840

86.9

Taiwan Cooperative Financial Holding

0.781

4947.619

AU Optronics Corp

1.020

8760.837

13.65

Foxconn Technology Co Ltd

1.220

1172.720

122

Taiwan Fertilizer Co Ltd

0.479

735

76.4

Catcher Technology Co Ltd

1.287

723.796

208.5

Fubon Financial Holding Co Ltd

1.905

6718.311

33.25

Taiwan Glass Industry Corp

0.484

1706.742

33.25

Cathay Financial Holding Co Ltd

2.242

7824.354

33.6

Chang Hwa Commercial Bank

0.565

3931.746

16.85

Cheng Shin Rubber Industry Co Ltd

1.121

1854.356

70.9

Chimei Innolux Corp

0.791

6741.975

13.75

China Development Financial Holding Corp

0.863

11250.646

9

China Steel Corp

2.901

11284.657

30.15

Chinatrust Financial Holding Co Ltd

1.778

11238.437

18.55

Chunghwa Telecom Co Ltd

2.947

3801.149

Compal Electronics Inc

1.252

4420.952

Delta Electronics Inc

1.758

Far Eastern New Century Corp

1.070

Far EasTone Telecommunications Co Ltd

0.824

10.377

10627.373

114.5

Taiwan Mobile Co Ltd

1.285

1676.208

89.9

Hotai Motor Co Ltd

Hon Hai Precision Industry Co Ltd

0.831

409.634

238

TPK Holding Co Ltd

0.719

176.453

477.5

HTC Corp

4.389

862.052

597

TSMC

18.646

25753.417

84.9

Hua Nan Financial Holdings Co Ltd

0.888

6160.736

16.9

Uni-President Enterprises Corp

1.583

4544.369

40.85

Largan Precision Co Ltd

0.498

100.605

580

United Microelectronics Corp

1.600

12987.771

14.45

Lite-On Technology Corp

0.699

2296.218

35.7

Wistron Corp

0.779

2052.140

44.5

MediaTek Inc

2.765

1147.610

282.5

Yuanta Financial Holding Co Ltd

1.311

10016.140

15.35

90.9

Mega Financial Holding Co Ltd

1.519

8544.629

20.85

Yulon Motor Co Ltd

0.563

1170.255

56.4

33.2

Nan Ya Plastics Corp

4.466

7852.299

66.7

2383.486

86.5

President Chain Store Corp

1.090

779.717

164

3672.913

34.15

Quanta Computer Inc

1.895

2874.431

77.3

1596.665

60.5

Siliconware Precision Industries Co

0.951

3116.361

35.8

Price 5503.52 34

14

(L) 4643.05 2

(H) 6265.48

13 |

business daily April 3, 2012

MARKETS GalaXy eNTerTaINmeNT

melco croWN eNTerTaINmeNT

last Max Average Min

22.0

21.45 21.80 21.42 21.10

last Max Average Min

21.8 21.6

30.35 30.75 30.31 29.85

21.0

34.5

14.15

WyNN macaU lTD last Max Average Min

16.02 15.94

23.15

22.7 23.10 22.77 22.65

23.02 22.89

29.8

15.78

22.63

29.5

15.70

22.50

CURRENCY EXCHANGE RATES MAJORS

ASIA PACIFIC

0.80 0.75

MACAU RELATED STOCKS (H) 52 W (L) 52 W

Volume CRNCY

ARISTOCRAT LEISU

3.02

1.342

37.273

3.3

1.88

1554186

CROWN LTD

8.69

1.164

7.417

9.2

7.45

1591335

AMAX HOLDINGS LT

0.086

0

-1.149

0.147

0.06

3683000

BOC HONG KONG HO

21.45

-0.694

16.576

25.6

14.24

14586947

CENTURY LEGEND

0.243

1.25

5.652

0.475

0.204

196000

3.33

0

18.929

4.79

2.3

47000

CHINA OVERSEAS

14.76

0.682

13.713

17.86

9.99

35346021

CHINA STAR LTD

0.215

-2.273

-2.273

0.407

0.128

63015

CHINESE ESTATES

10.72

-1.471

-14.24

14.88

10.2

299400

CHOW TAI FOOK JE

12.3

-2.844

-11.638

15.16

12.22

9132346

EMPEROR ENTERTAI

1.43

1.418

28.829

2.09

0.97

847680

0.66

0

57.143

0.76

0.3

1104000

GALAXY ENTERTAIN

21.45

-0.464

50.632

22.45

8.69

12440324

HANG SENG BK

103.2

-1.244

11.991

127

84.4

1886351

HOPEWELL HLDGS

21.3

-1.160

7.251

24.903

18.56

1816726

HSBC HLDGS PLC

68.5

-1.083

16.102

85.35

56

16808315

HUTCHISON TELE H

3.29

-1.201

10.033

3.6

2.13

3844436

23.6

0

-12.915

46.15

19.2

2488942

MELCO CROWN ENTE

35

-2.778

42.857

37.35

22.4

34200

MGM CHINA HOLDIN

14.18

-1.391

47.829

17.183

7.6

3092892

4.08

-1.923

0.990

6.123

2.95

1540087

0.108

-1.818

-2.703

0.158

0.08

110000

NEW WORLD DEV

9.33

-2.406

49.042

13.226

6.13

58252527

SANDS CHINA LTD

30.35

0.165

38.269

32.55

14.9

14179154

SHUN HO RESOURCE

1.2

0

20

1.32

0.82

0

SHUN TAK HOLDING

3.14

-0.633

22.698

4.686

2.241

2811021

SJM HOLDINGS LTD

15.8

-1.619

24.606

21

10.22

12040773

15.94

-3.860

18.601

18.5

9.8

9156199

WYNN MACAU LTD

22.7

-2.575

16.410

27.48

14.807

9363623

ASIA ENTERTAINME

6.52

3.002

10.884

10.869

4.72

64643

BALLY TECHNOLOGI

46.75

-0.107

18.175

47.468

24.74

323087

BOC HONG KONG HO

2.82

4.059

17.638

3.22

1.81

760

GALAXY ENTERTAIN

2.73

0.368

45.989

2.87

1.08

25500

16.79

-0.651

-2.384

19.15

13.38

2783712

JONES LANG LASAL

83.31

0.446

35.994

107.84

46.01

187524

LAS VEGAS SANDS

57.57

0.489

34.730

59.85

36.08

8093062

MACAU CAPITAL IN

0.11

0

10.000

0.11

0.11

500

MELCO CROWN-ADR

13.64

2.711

41.788

16.15

7.05

8343097

MGM CHINA HOLDIN

1.85

1.648

55.241

2.213

1.003

169

MGM RESORTS INTE

13.62

-1.661

30.585

16.05

7.4

16245859

SHUFFLE MASTER

17.6

2.385

50.171

18.380

7.35

557559

SJM HOLDINGS LTD

2.02

0

23.926

2.64

1.28

11500

124.88

-0.040

13.024

165.493

101.02

1289926

WYNN RESORTS LTD

last Max Average Min

22.76

0.85

INTL GAME TECH

16.10

15.86

0.90

SMARTONE TELECOM

15.80 16.06 15.89 15.76

30.1

0.95

NEPTUNE GROUP

14.33

14.21

1.00

DAY % YTD %

14.39

34.7

macau Pataca / renminbi exchange rate - last 5 years

MIDLAND HOLDINGS

35.1

SJm HolDINGS lTD

last Max Average Min

LUK FOOK HLDGS I

35.3

14.45

14.18 14.40 14.24 14.16

21.2

30.4

FUTURE BRIGHT

last Max Average Min

14.27

30.7

CHEUK NANG HLDGS

35.5

34.9

31.0

PRICE

35.00 35.25 34.89 34.60

21.4

SaNDS cHINa lTD

Name

mGm cHINa HolDINGS

AUD

CROSSES

HKD

PRICE

DAY %

YTD %

(H) 52 W

(L) 52 W

JPY

82.87

-0.857

-7.192

85.53

75.35

GBP

1.601

0.825

2.992

1.675

1.524

CHF

0.903

0.598

3.945

0.960

0.707

EUR

1.334

0.497

2.947

1.494

1.262

AUD

1.035

-0.010

1.342

1.108

0.939

IDR

9146

0.405

-0.842

9367

8458

INR

50.876

1.020

4.302

54.305

43.855

PHP

42.91

0.163

2.167

44.35

41.879

THB

30.83

0.162

2.335

31.96

29.63

TWD

29.505

0.186

2.623

30.716

28.48

SGD

1.258

0.072

3.093

1.320

1.199

CNY

6.299

0.125

-0.056

6.549

6.289

HKD

7.766

-0.017

0.017

7.811

7.753

MOP

7.999

-0.01

0.013

8.045

7.982

EURJPY

110.56

-1.339

-9.859

123.33

97.04

EURCHF

1.204

0.101

1.055

1.324

1.007

EURGBP

0.833

0.429

0.084

0.908

0.822

EURCNY

8.400

0.120

-3.163

9.677

7.967

EURMOP

10.662

-0.399

-2.909

11.951

10.103

AUDJPY

85.726

-0.840

-8.509

90.031

72.057

World Stock MarketS - Indices Name

country

PRICE

DAY %

DOW JONES INDUS. AVG

US

13212.04

0.504

8.140

NASDAQ COMPOSITE INDEX

US

3091.57

-0.122

FTSE 100 INDEX

GB

5768.45

0.460

DAX INDEX

GE

6946.83

13289.08

10404.49

18.671

3134.17

2298.89

3.520

6103.73

4791.01

1.043

17.776

7600.410

4965.8

NIKKEI 225

JN

10083.56

-0.309

19.257

10255.15

8135.79

HANG SENG INDEX

HK

20555.58

-0.261

11.507

24468.641

16170.35

CSI 300 INDEX

CH

2454.9

0.482

4.653

3380.527

2254.567

TAIWAN TAIEX INDEX

TA

7933

0.766

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business daily April 3, 2012

Opinion

The Lynchpin of Asia Jaswant Singh Has served as India’s finance minister, foreign minister, and defense minister

I

solated and impoverished by decades of international sanctions, Myanmar (Burma) has emerged in recent months as both a beacon of hope and a potential new Asian flashpoint. With Nobel laureate Aung San Suu Kyi freed from two decades of house arrest to campaign vigorously for a seat in parliament in the special election to be held on April 1, Burma’s commitment to rejoining the international community appears to be genuine.

But this opening has other consequences, most importantly setting the stage for a new “great game” of strategic competition.

No one should be surprised that Burma is a locus of interest for great powers. After all, it is larger than France and with a similar population size. In his recent book Monsoon, Robert Kaplan notes that in the Middle Ages three kingdoms lay between Thailand (then called Siam) and India. One was Myanmar, which means “that which is central.” Centuries later, Burma remains central, not only in matters of Asian security, but also for the country’s vast and still mostly untapped natural wealth.

Burma’s strategic importance reflects, first and foremost, its geographic location between India, China, Thailand, and Southeast Asia.

Ringed in the north by the southern ridges of the Himalayas, to the east by foothills of dense teak forests, and to the west and south by the Bay of Bengal and Indian Ocean, Burma’s geography has always shaped the country’s history and politics.

In 1885, during an earlier era of great power competition in Asia, Lord Randolph Churchill, Winston Churchill’s father, impulsively annexed Burma to the British Raj in India following the Third AngloBurmese War. Thant Myint-U, a leading historian of contemporary Burma (and the son of former United Nations Secretary-General U Thant), likened Churchill’s move to “throwing Burma off a cliff.”

Only in 1937, by a decree of the British viceroy, was Burma finally

separated from British India. But the Japanese invasion five years later subjugated Burma and its people to colonial rule once again, with the conquering sweep of the Imperial Japanese Army checked only at Imphal, in India’s Manipur state.

itself off from the world, internalized its problems, and stagnated as the rest of Asia boomed. The world reciprocated, isolating Burma economically and diplomatically.

It was to this Burma that I journeyed from Imphal some 10 years

Burma’s opening has other consequences, most importantly setting the stage for a new ‘great game’ of strategic competition The end of the British Empire in 1947 gave Burma its freedom, but did not end its travails. The assassination of Aung San (Suu Kyi’s father and the leader of Burma’s independence movement) destabilized the country, paving the way for the army to take over. Under its longserving military junta, Burma shut

ago, the first Indian foreign minister to travel overland to its neighbor since independence. India’s Border Roads Organization had recently completed the first all-weather road connecting the two countries since WWII. Journeying on this “road to fabled Mandalay,” I recorded in my diary, was a highlight of “one of the

most memorable, satisfying, and happy foreign visits in my experience as Foreign Minister.”

China, too, has endeavored for centuries to bind Burma to itself, mostly in search of a southern route to India and the Indian Ocean. In recent decades, China took advantage of the international community’s shunning of Burma to secure its own strategic interests, building highways, railways, ports, and pipelines that connect southern and western China to the Indian Ocean.

But trade has not been China’s only motivation for investing so heavily in Burma. China also views Burma as vital to its quest for security, as well as to the regional expansion of Chinese power.

Reflecting its fears about the potential for Chinese encirclement, democratic India, after early hiccups of doubt, set aside its scruples about Burma’s military regime. India’s cultural, economical, social, and sometimes military ties with Burma – indeed, with the entire region – are older than China’s. So, for reasons of Realpolitik, India expanded its activities and investments in Burma throughout the last two decades of the junta’s rule.

Sometimes the competition with China is direct. At the Shwe gas fields along the Burmese cost, estimated to be among the largest reserves in the world, two pipelines are to be constructed: one to China from the nearby port of Kyauk Phru, and the other to India from the port of Sittwe.

For Thant, this strategic competition is worrying. The “crossroads through Burma,” he argues, cannot “be a simple joining up of countries,” because the regions of “China and India that are being drawn together over Burma are among the most far-flung parts of the two giant states, regions of unparalleled ethnic and linguistic diversity…. isolated upland societies that were, until recently, beyond the control of Delhi or Beijing.”

While China seeks strategic depth in Burma, India’s interests there are now reanimated by the international community’s opening to a country that appears to yearn for the same democratic freedoms that Indians possess. And, in Aung San Suu Kyi, who studied in New Delhi (as did her mother, Daw Khin Kyi, who was Ambassador to India and Nepal in 1960), Burma possesses a charismatic moral leader who reminds Indians of their country’s own founders.

As a result, Realpolitik and economic interest alone will no longer shape the great game playing out in Burma. Ideals and the quest for freedom will also play a critical role.

15 |

business daily April 2, 2012

OPINION Business wires The headline reports from Asia’s best business newspapers

Rowdy neighbours have a lesson to teach us

ASIAN BUSINESS DAILY Qantas and China Eastern Airlines plan to set up a low-cost air carrier. Jetstar Hong Kong will fly to several destinations in the mainland, South Korea and Southeast Asia.

Users of Sina Weibo and QQ instant messenger, the two biggest social media networks in the mainland, were halted from broadcasting the comments of other users. The move has been viewed as an attempt to stifle public debate on a possible power struggle.

Nokia launches a smartphone designed for the mainland.

Chinese consumers appear to be increasingly favouring imported wines.

THE BUSINESS TIMES Singaporean observers say Basel III rules on trade financing costs could have a disproportionate impact on Asian businesses.

Indonesia tries to contain political and popular resistance to increases in fuel prices. High fuel subsidies in many Asian countries have distorted the region’s economies.

The Singapore government is considering the use of cloud computing services to communicate with its citizens.

Public sector companies have expressed their concerns over data security.

Nikkei.com Japanese Prime Minister Yoshihiko Noda is facing mounting opposition to his proposal to increase sales tax.

As steel exports fall by 13.2 percent and the Nikkei share average rises, the Bank of Japan says it does not expect a significant decline in Yen exchange rates. The government has expressed its concern over rising oil prices and remains cautious about the prospect of recovery.

Mitsubishi wins a contract to build an oil rig offshore from Brazil.

Lo Shiu Hing Head, Department of Social Sciences, Hong Kong Institute of Education

A

lthough the election for Hong Kong’s chief executive on March 25 produced a mandate for Leung Chun-ying to govern Hong Kong for the next five years, his mandate is arguably limited because only 689 of the 1,200 members of the cliquey electoral committee voted for him.

Moreover, the election campaign brought to the surface so many scandals and other revelations that Hong Kong politics is heading for a period of deep distrust.

In view of the strife between the two pro-establishment factions, one for Mr Leung and the other for the defeated Henry Tang, it will be a gigantic task for the incoming chief executive to heal the political wounds.

The new batch of principal officials, including the new undersecretaries that are likely to be appointed, will have to balance various political forces within the pro-establishment camp.

Since the democrats have vowed to refrain from joining the new government, Mr Leung is likely face the challenge of absorbing some lead-

ing figures from the defeated Tang faction in general and the business sector in particular.

Moreover, some civil servants appear to distrust Mr Leung, whose idea to increase the number of principal officials has heightened their concern about the proliferation of political bosses.

Given that a vast number of ordinary citizens that participated in a mock vote on March 23 and 24 expressed their dissatisfaction with the election, with about 50 percent casting blank ballots, Mr Leung will also face the daunting task of persuading Beijing that direct election of the chief executive by universal suffrage as soon as 2017 will not undermine the interests of the central government.

Many ordinary citizens are now distrustful of their political leaders.

How to regain their trust will be a priority for Mr Leung, whose policies on political reform and Article 23 of the Basic Law will show how autonomously he can behave.

The people of Hong Kong will have to wait and see what flesh the

Leung government will put on the bones of its policies on housing, social welfare, poverty alleviation and other matters.

The new batch of principal officials will face the huge challenge of winning the hearts and minds of the populace in the next five years.

They will have to interact with citizens more directly and at the grass roots, to regain the trust of the masses and so create a real mandate for the man that appointed them.

The implications for Macau are obvious. While Macau has already enacted Article 23 legislation smoothly and peacefully, trust is wanting on the question of political reform.

Fortunately, Macau citizens appear less distrustful of their government than Hong Kong citizens of theirs.

If trust is critical for political and social development, Macau must learn the lesson to be learnt from the hurdles Hong Kong faces.

That is to avoid factional splits within the pro-establishment camp, forge a consensus on political reform and conduct more harmonious election campaigns.

“The people of Hong Kong will have to wait and see what flesh the Leung government will put on the bones of its policies on housing, social welfare, poverty alleviation and other matters.”

16 |

business daily April 3, 2012

MARKETS

Myanmar sets currency exchange rate

RBS to sell Asian assets to Malaysia’s CIMB

Regional fire sale for bailed out British bank

In one of the biggest economic reforms, Myanmar’s central bank has set the reference exchange rate for its currency

M

yanmar’s central bank adopted a managed float for its currency, scrapping a 35-year fixed exchange rate, after elections on Sunday that will pave the way for the end of economic sanctions.

The central bank set a daily rate of 818 kyat per dollar, near the black-market level that Bank of America Merrill Lynch said last week was about 820, having strengthened from about 1,055 in 2009.

The biggest financial market policy shift since President Thein Sein took power a year ago is an attempt to unify the multiple exchange rates and weaken the grip of the black market, where appreciation is hurting exporters. The previous official rate, pegged to the International Monetary Fund’s special drawing rights, was 6.4 kyat, 125 times stronger than the black market and available only to state-owned companies.

“Close alignment with black market rates means that potential for speculative pressures due to arbitrage will be averted, or at least mitigated,” said

Vishnu Varathan, an economist in Singapore at Mizuho Corporate Bank Ltd. “It’s broadly in line with expectations.”

“The dollar has seen some weakening pressure against the kyat and that is quite a big pain for exporters,” Toshihiro Mizutani, managing director of the Japan External Trade Organization in Yangon, said in an interview on March 28.

“If they can manage to keep it from rising fast it would help.”

The kyat will be allowed to move as much as 0.8 percent of either side of the reference rate, said a central bank official, who declined to be identified as she was not authorized to speak to the media.

The reference rate was determined through an auction for dollars involving 11 local banks with authorized dealer licenses, the official said.

Scrapping the complex multiple-rate system would reduce constraints on growth in a country with the potential to become “the next economic frontier in Asia,” the Washington-based IMF, which

has provided guidance to Myanmar, said on Jan. 25.

Local laws prevent foreign banks from conducting transactions in the country, something that must change in 2015 as part of an agreement with the 10-member Association of Southeast Asian Nations.

“The currency reform will be positive for overseas companies doing business there,” Roh Dong Hoon, a Seoul-based senior manager at Daewoo International Corp., a trading company involved in a natural gas project in Myanmar, said in a phone interview on March 29. “Last year, the currency strengthened to 700, and it was difficult for some foreign companies there as they earn money in dollars, but have to pay income to local workers in kyat.”

Meanwhile Petroliam Nasional Bhd., Malaysia’s state oil company, and Thailand’s PTT Exploration & Production Pcl have won the right to explore onshore energy fields in Myanmar.

Bloomberg

By Chong Pooi Koon and Barry Porter

R

oyal Bank of Scotland Group Plc, Britain’s biggest stateowned lender, agreed to sell most of its Asia-Pacific cash equities and investment banking businesses to Malaysia’s CIMB Group Holdings Bhd. to cut costs.

CIMB will pay £88.4 million (US$142 million) to RBS for the operations and inject a further £85.5 million into the business, the Kuala Lumpur-based bank said in a statement.

RBS is selling assets and cutting jobs as it pares business after receiving the world’s biggest banking bailout during the global financial crisis. The Edinburgh-based bank, led by Chief Executive Officer Stephen Hester, said in March that it would shut some operations in South Korea, Indonesia and Singapore after failing to find buyers for those units.

“The principal benefit to RBS of the sale is to mitigate partially the shutdown costs otherwise associated with these businesses,” RBS said in a statement today.

CIMB, Malaysia’s second-biggest lender, is seeking to extend its regional reach after being the nation’s top underwriter for equity and rights offerings in the past three years, according to data compiled

by Bloomberg. The bank has made acquisitions in Singapore, Thailand and Indonesia in the last seven years and is in talks to buy a stake in Bank of Commerce in the Philippines.

Opportunity “This is an excellent opportunity

to complete the build-up of our capabilities in Asia-Pacific markets, and to do it quicker and less expensively than if we grew organically,” CIMB Chief Executive Officer Nazir Razak said in the statement.

CIMB said it will retain between 350 to 400 staff under Matthew Kirkby, currently head of global banking for Asia-Pacific at RBS. Profit at the Kuala Lumpur-based lender CIMB climbed 30 percent in the fourth quarter of 2011 to a record RM1.13 billion (US$370 million). Mr Nazir said in February that 2012 earnings could surprise on the upside.

CIMB shares rose 1.3 percent this morning to RM7.79 ringgit, their highest level since August, before being suspended for today’s announcement.

RBS said in January that it planned to cut about 3,500 jobs worldwide at its investment-banking unit and sell or close unprofitable divisions.

The U.K. bank will continue to operate its debt financing, transaction services and risk-management businesses in Korea, Indonesia, Singapore and eight other Asia- Pacific countries, RBS spokeswoman Hui Yuk Min said on March 20.

It is selling its Hoare Govett U.K. corporate broking unit to Jefferies Group Inc., transferring about 50 jobs. The bank hasn’t found buyers for the rest of the U.K. equities business and in February eliminated as many as 300 posts.

The British government injected £45.5 billion into RBS at the height of the financial crisis.

Bloomberg

China to boost consumption: Li

C

hina’s top priority is to boost domestic consumption to maintain relatively strong economic growth, at the same time increasing imports from other Asian countries, Vice Premier Li Keqiang said yesterday.

While some Asian countries face downward pressure on growth and inflationary pressure, China’s economic fundamentals remain good, Mr Li said.

China’s government will stick to its policy goal of stabilising economic growth while curbing inflation, Mr Li said.

“The fundamentals of the Chinese economy remain good and the momentum of economic growth has not changed. We will be able to maintain steady and relatively fast development in the long term,” Mr Li said in a speech at the opening ceremony of the 2012 Boao Forum for Asia on the southern Chinese island of Hainan.

“Expanding domestic consumption is our top priority in adjusting the economic structure,” said the vice premier, who is widely expected to succeed Wen Jiabao as premier in a leadership transition that begins later this year.

But he sounded a note of caution on

the global economy.

“The world economy is showing some signs of recovery, but the deep impact from the global financial crisis has not disappeared and Europe’s sovereign debt crisis lingers,” he said.

China’s big factories were surprisingly busy in March as a stream of new orders lifted activity to an 11-month high, but creditconstrained smaller manufacturers struggled, suggesting that the economy is still losing steam.

Premier Wen Jiabao has cut China’s 2012 growth target to an eightyear low of 7.5 percent and made boosting consumer demand the top priority.

During the opening ceremony of the Boao meeting, an Asian version of the World Economic Forum held in Davos, Mr Li also said China would deepen its bilateral and multilateral relations with trading partners and develop more free trade zones.

China’s steps to spur domestic demand will help expand its imports from the rest of Asia, Li said, adding that the country will continue to balance its trade over time.

Reuters