Macau Business Daily, December 12, 2012 by Business Daily

Year I Number 181 Wednesday December 12, 2012 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP $ 6.00 www.macaubusinessdaily.com

VIP rev flat in Nov, but mass market up 32 pct

Retail sales to double by 2015 M

acau’s retail sales are set to more than double within the next three years, predicts Hong Kong-based Oriental Patron Financial Group Ltd. By 2015 the territory’s sales of consumer goods are expected to reach HK$99.6 billion (US$12.8 billion) – twice those forecast for 2012. Macau’s retail sector is still small compared to its neighbouring Special Administrative Region – where retail revenue is forecast to reach HK$587.3 billion by 2015.

Oriental Patron, described on its website as an independent financial services firm, has investments covering state enterprises and private industry on the mainland and in Greater China. Its analysts recommended the companies “least hit by the rental pressure along with better structural outlook for long term growth”. It adds jewellery retailers will remain a safe bet for investors despite higher shop rents.

VIP gaming revenue shrank slightly yearon-year in November according to industry returns obtained by Business Daily. At the same time massmarket table gaming grew 32.3 percent. High roller revenue for this November was HK$16.14 billion (US$2.08 billion) compared to HK$16.25 billion in the equivalent month a year earlier – a fall of HK109.66 million, or equal to 0.67 percent. But some junket players might simply be migrating to so-called premium mass tables in order to avoid the scrutiny of the mainland authorities into their financial affairs.

More on page 3

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Anti-graft, casino controls, not linked, says Liaison Office

HANG SENG INDEX 22380

ai Zhijian, Macau director of the Liaison Office of the Central Government, says he doesn’t see stricter control measures being imposed on the city’s casino industry. “Measures against corruption and casinos are not the same matter,” Mr Bai told reporters here yesterday. Recent media reports claimed mainland authorities were stepping up scrutiny of the city’s junkets since Xi Jinping became Communist Party chief last month. Page 5

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December 11

HSI - Movers

Accountants hungry for more training

Name

Nearly 70 percent of local companies provide no professional on-the-job training to their accountants suggests a survey. More than two-thirds of the 1,361 accountants from 217 companies interviewed in the Macau University of Science and Technology study said they would like the chance to improve their skills via courses at least part-funded by their employers. The Macau Society of Registered Auditors commissioned the research.

%Day

CITIC PACIFIC

3.92

AIA GROUP LTD

2.84

CHINA RES POWER

2.56

SUN HUNG KAI PRO

1.83

HANG LUNG PROPER

1.55

WANT WANT CHINA

-1.30

WHARF HLDG

-1.67

CATHAY PAC AIR

-1.91

COSCO PAC LTD

-2.59

CHINA RES LAND

-3.01

Source: Bloomberg

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HK court allows probe of Casa Real casino sale Page 2

Gambling hub Junket promoter spurning Pansy Ho AERL plans dual has ‘worst ever’ month listing in HK Page 6

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business daily December 12, 2012

macau Market not ‘fully factored’ smoking ban: report A partial smoking ban in Macau casinos from January could depress mass-market gambling revenue by four to 20 percent, says a report from Praveen K Choudhary, managing director of Morgan Stanley in Hong Kong. That’s similar to when bans were introduced in Australia and some United States jurisdictions. In Macau’s case it would reduce total gross gaming revenue growth expectation by three to four percent. “As smokers in Macau have no alterative gaming sites nearby, they are unlikely to stop gambling completely. However, some 80 percent of gamblers in Macau smoke, much higher than [the] 30 to 40 percent in Australia,” it states.

Businessman Ngan In Leng

A month before the Casa Real deal, Golden Resorts said it would hire Ms Chu as a consultant, and after the purchase of the Grandview Hotel in April 2005 she was given over 20 percent of the company’s stock.

Credibility in question

HK court orders disclosure of casino sale papers A judge acts to get to the bottom of the sale of the Casa Real casino Vítor Quintã

vitorquinta@macaubusinessdaily.com

court has ordered Kingston Financial Group Ltd to disclose information on its acquisition of the Casa Real and Grandview Hotel casinos in 2005. Hong Kong’s Court of First Instance accepted in part a request for discovery from Macau businessman Ngan In Leng and four of his relatives in their case against Pollyanna Chu Yuet Wah, Kingston Financial’s chief executive. The Ngan family sold the Casa Real casino hotel to Hong Kong-listed Kingston Financial – at the time

called Golden Resorts Group Ltd – for HK$750 million (US$97 million) in cash and 110 million shares. The Ngans say Ms Chu orally agreed to buy back the shares for HK$4.50 each should their value at the Hong Kong Stock Exchange fall below that price. The price is now far below that figure. Kingston Financial shares cost HK$0.65 at the close of trading yesterday. The Ngan family says this has cost them HK$268.8 million. Ms Chu has denied that she

agreed to any deal to buy back the shares or that she was the controlling shareholder of Golden Resorts at the time of the sale. She said she had become the controlling shareholder of the company only in July 2006. She now owns 56.19 percent of the company. The Ngan family believes the documents they have requested will “shed light on whether Chu was the controlling/de facto beneficial shareholder of Golden Resorts” through her brother-in-law, the company’s executive director.

In a ruling made public on Friday, Judge Queeny Au Yeung accepted the request by the Ngans to see documents related to the acquisition of the Casa Real and Grandview Hotel casinos. Mr Ngan is chairman of Hang Huo Enterprise Group, which has hotel, entertainment, property and trading companies. He was also chairman of the defunct Viva Macau Airlines, which was grounded in 2010 over unsettled debts. Judge Au Yeung criticised Ms Chu for having “calculated to mislead the court” about her shareholdings and possession of Golden Resorts documents. The judge said Ms Chu “has previously been held by the court to be an incredible witness”. Judge Au Yeung was referring to a case in 2009 in which Ms Chu was found responsible for an attempting to rig the vote on a proposal to take telecommunications company PCCW Ltd private. “The inference to be drawn is that Chu has chosen to make disclosure only when it suited her,” the judge said. In 1997 the Hong Kong Securities and Futures Commission fined Ms Chu HK$10,000 for acting as a commodities dealer’s representative for Kingston Futures, part of Kingston Financial, without a licence. In 2003 Ms Chu surrendered her securities and commodity dealer’s representative’s licenses in response to allegations that she helped or overlooked manipulative warrant trades. Last month Kingston Financial announced that gaming revenue from the Casa Real and Grandview Hotel casinos was 38 percent higher in the six months ended September 30 than a year before.

Vitasoy Macau sales slow down S

ales growth of food and beverage producer Vitasoy International Holdings Ltd in Macau was cut by half during the six months ended September 30. Its Macau business “performed well,” the company told the Hong Kong Stock Exchange yesterday, with “solid sales growth of 7 percent”. However, this figure is less than half of the “impressive sales growth of 15 percent” recorded by Vitasoy in Macau during the year ended March. Still, the producer says sales growth in Hong Kong and Macau outperformed the beverage industry average thanks to “innovative marketing campaigns” and a new aseptic PET plastic bottle line. Vitasoy’s sales revenue in Macau and Hong Kong rose 8.6 percent year-on-year to HK$948.8 million

(US$122.4 million). Profits increased much slower, up by 2.8 percent, to HK$161.6 million. The two regions account for 42.5 percent of the soymilk, tea, water, and juice sales of Vitasoy, which also operates in mainland China, North America, Singapore, Australia and New Zealand. The company posted overall revenue of HK$2.1 billion, up by 10 percent from the previous year, thanks to “encouraging sales growth”. Furthermore, profits rose by 16 percent to HK$173 million, partially due to a reduced stake for its mainland China operations partner, from 30 percent to 15 percent. Vitasoy stressed that the results remained positive “despite the rising labour costs, increased brand

Beverage producer saw its Macau sales rise by 7 percent (Photo: Manuel Cardoso)

investment, higher depreciation and higher financing costs for the production capacity expansion”. The board of directors

recommended an interim dividend of 3.2 cents of Hong Kong dollar per share. V.Q.

December 12, 2012 business daily | 3

MACAU

Retail sales to double by 2015 Macau retail sector set to continue growing much faster than in Hong Kong Vítor Quintã

vitorquinta@macaubusinessdaily.com

ainland China’s growing middle class will continue to fuel Macau’s retail sales. They are set to more than double in the next three years, predicts Hong Kong-based Oriental Patron Financial Group Ltd. The company, described on its website as an independent financial services firm, has investments covering state enterprises and private industry on the mainland and in Greater China. According to the financial firm’s 2013 Market Outlook, retail sales of consumer goods – which do not include mobile phones or computers – are expected to reach HK$48.9 billion (US$6.3 billion) this year. That would represent a 27 percent increase from the HK$38.5 billion registered last year. According to Macau official data, total retail sales rose by 24 percent year-on-year to 38.5 billion patacas during the first three quarters of 2012. And Oriental Patron expects sales of consumer goods to continue growing rapidly in the next few years – albeit from a low base compared to Hong Kong. It says Macau retail sales should grow by a further 26.6 percent in 2013,

Jewellery retailers will remain a safe bet for investors despite higher shop rents

reaching HK$61.9 billion. By 2015 the territory’s sales of consumer goods are expected to reach HK$99.6 billion, more than twice as much as forecast for this year. The city’s retail sector will grow a lot faster than in Hong Kong, where sales could still rise by 41.3 percent in the next three years, the analysts predicted. Sales of consumer goods in

Macau are still small compared to the neighbouring Special Administrative Region where retail revenue is forecast to reach HK$587.3 billion by 2015. The boost in Macau sales will come from the Chinese middle-class’ consumers’ discretionary spending, Oriental Patron analysts wrote. “Despite [the] volatilities of [the] global economy and gold

price, we are expecting middle- to high-end class to gradually expand its wealth in China,” the report says. “With an improving China economy outlook in 2013, disposable income would likely rise along,” the company adds, and luxury goods will be the ones “to generate better [profit] margin”. Jewellery retailers will remain a safe bet for investors, says Oriental Patron, even though “we have not yet seen a slowdown in [shop] rental pressure” and labour costs are also rising. The analysts recommended the companies “least hit by the rental pressure along with better structural outlook for long term growth”. Those include jewellery retailer Chow Sang Sang Holdings International Ltd, “given its prudent expansion,” and watch and eyewear retailer Stelux Holdings International Ltd. Both companies have shops in Macau. On the other hand, the report says “growth improvement” is expected from jewellery rivals Chow Tai Fook Jewellery Group Ltd and Luk Fook Holdings International Ltd and from sportswear sales.

Nurture accounting staff, bosses urged Accountancy standards could be improved if companies trained their accounting staff, a survey report suggests Stephanie Lai

sw.lai@macaubusinessdaily.com

ost companies do not give their accounting staff professional training, though most employees show a strong interest in improving their skills and qualifications, a survey commissioned by the Macau University of Science and Technology has found. The survey was done by the Macau Society of Registered Auditors, which interviewed 1,361 accounting staff in 217 companies from June 10 to August 31. Of the companies the accounting staff worked for, 60.8 percent were in commerce, 13.4 percent were in construction and 12.4 percent in manufacturing. The survey found that nearly 70 percent of companies gave their accounting staff no

49.6 %

Proportion of accounting staff satisfied with their jobs

professional training. More than two-thirds of the staff interviewed, including part-timers, said they would like to pursue further studies or receive professional training, with their companies paying some of the course fees. Among those surveyed, almost half were entry-level accounting staff with high-school qualifications. The survey found that senior managers or managers had to have at least a bachelor’s degree. It found that manufacturers, estate agencies and small and medium enterprises in the services sector required only low qualifications, and only a small proportion wanted registered accountants. “For the SMEs, which compose the majority of our surveyed companies, the common phenomenon is that the accountant has to juggle other work as well, such as administrative jobs,” said Dennis Vong Hou Piu, director of Macau Society of Registered Auditors.

Job satisfaction “In the tight human resource market, usually the companies will even lower their requirements in order to recruit accounting staff to work for them,” said Mr Vong. The respondents stressed that

Nearly 70 percent of companies give their accounting staff no professional training

Macau did not have a system for accrediting accounting staff, apart from audit and tax accountants. “A unified qualification system for the accounting sector should be built up, and a yearly evaluation of accounting staff is needed,” said Mr Vong. Despite the lack of a system for accrediting accounting staff, 49.6 percent of accounting staff said they were satisfied with their jobs, while 42.4 percent said their satisfaction level was “so-so”. Entry-level accounting staff are the most prone to job-hopping, whereas those in casinos, banks, accounting firms and estate agencies tend to stick with their jobs.

Nearly 40 percent of the accounting staff surveyed received a salary of between 10,000 (US$1,250) and 15,000 patacas per month and worked between 40 and 45 hours per week. Only about 9 percent were paid over 30,000 patacas per month. Nearly 60 percent of the interviewees expect increases of 5 percent to 10 percent in their salaries next year. “The salary range for accountants working for banks and casinos is 15,000 to 30,000 patacas,” Mr Vong said. “Of course, they can provide a better promotion system, but this also means being much stricter in professional requirements.”

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business daily December 12, 2012

macau Brought to you by

HOSPITALITY Companies aplenty The activity of some industries depends on the inflow of visitors. Among these industries are the hotel, restaurant and retailing industries. The creation of new companies in each industry may be an indicator of its vitality. And there has been an appreciable flurry of creation in these industries in recent years. Since 2008 over 250 companies have been created per month, on average. In the first nine months of this year more companies were created than in all of 2008 or all of 2009. The final figure for this year may be a new record. Companies in the field of commerce, comprising those in the retailing and wholesaling industries, and in the field of hospitality, comprising those in the hotel and restaurant industries, made up 40 percent of all companies created in most years since 2008. But their combined capital stock made up a comparatively small and declining share of the total stock of all new companies. That share dropped from onethird to less than one-fifth between 2008 and last year.

350 300 250 200 150 100 50 0

If we use the average capital stock of new companies as a guide, most companies created between 2008 and last year were small. Except in 2010, the average capital stock of all new companies was around 150,000 patacas (US$18,791). The average capital stock of new wholesaling and retailing companies was slightly lower and more stable. The average capital stock of new hotel and restaurant companies was widely variable and in some cases extremely low. It was below the average for all new companies in most years except 2008, when it was double the overall average. It was less than 50,000 patacas in 2009. This year is hard to analyse because the figure for the combined capital stock of all companies created in the first quarter is confidential. J.I.D.

2,822

New companies created in first nine months of 2012

Committee denies NPC election a fix The National People’s Congress election committee denies that it has already been decided who the 12 deputies will be Tony Lai

tony.lai@macaubusinessdaily.com

he committee that elects Macau’s deputies to the National People’s Congress (NPC) has denied that it already has a list of the names of the winners of next Monday’s election. “I have not heard anything about that and there is no such name-list,” said committee spokesperson Leong Heng Teng. “We believe that the members of the election committee will have enough wisdom to make a choice,” Mr Leong told a press conference yesterday after the committee’s second meeting to discuss the election. The committee confirmed that 15 candidates were eligible to stand for Macau’s 12 seats in the 12th NPC. Mr Leong said 17 people had asked for application forms but only 16 had applied to become candidates during an 11-day nomination period. He said the main reason that one would-be candidate was disqualified was that the applicant “did not submit any nominations”. Mr Leong refused to identify the applicant. Reports in other news media identified the applicant as Wong Wai Man, who heads an association of ironworkers. The candidates must be permanent residents of Macau with Chinese nationality and must be nominated by at least 10 of the 364

We believe that the members of the election committee will have enough wisdom to make a choice’ Leong Heng Teng

members of the election committee. Asked if the committee would make the election more open, Mr Leong replied that the committee had “carried out their work in accordance with the electoral laws”. He said the candidates had “adequate channels” such as the news media for getting their views across to the public. Of the 15 candidates, 10 are seeking re-election, including Ho Iat Seng.

Mr Ho, vice-president of the Legislative Assembly and the only member from Macau of the NPC Standing Committee, had the most nominations, 326. The five new faces include Ho Sut Heng, chairwoman of the Macau Federation of Trade Unions, and Legislative Assembly member Gabriel Tong Io Cheng. The NPC is the supreme organ of the Chinese state and mainland China’s legislature.

Susana Chou slams officials for policy address replies A

former president of the Legislative Assembly, Susana Chou Kei Jan, has slammed the performance of government officials during the assembly’s discussion of the Policy Address for 2013, describing it as “evasive” and “far from satisfactory”. Ms Chou said that if such a poor showing had been put up in Hong Kong, the officials in question would probably have resigned. She blogged last week that the assembly’s debate on government policy for next year was “boring”. She thinks members asked enough questions on behalf of the public.

“But as for the performance of the officials, apart from some new directions and policies in the economic area … it was far from satisfactory,” Ms Chou said. She said she was “very disappointed”. She accused officials of dodging questions by members on important issues and failing to give direct answers. Ms Chou said she had been shocked by “the arrogant attitude of a few officials” who “regard legislators as something of no importance”. She said that being an official here was much easier than in Hong Kong.

She said she believed that if officials in Hong Kong had performed as poorly and conducted themselves as poorly as the officials here, criticism would have forced them to step down. Ms Chou said some officials here had held their positions since the end of Portuguese rule in 1999, yet their performancehadnotimprovedsincethen. She described them, in words borrowed from former chief executive Edmund Ho Hau Wah as “kids doing adults’ jobs”. Ms Chou was president of the Legislative Assembly from 1999 to 2009. T.L.

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December 12, 2012 business daily | 5

MACAU

Beijing’s man says graft blitz no threat to gaming The head of Beijing’s liaison office here does not expect anti-corruption measures in mainland China to hurt Macau Tony Lai

tony.lai@macaubusinessdaily.com

he Central People’s Government Liaison Office has said it does not expect Beijing’s renewed efforts against corruption to harm the gaming industry here. “Measures against corruption and casinos are not the same matter,” the director of the office, Bai Zhijian, said yesterday. “Every place across the globe is talking about anti-corruption and there are casinos everywhere. These are two different matters.” Mr Bai told reporters that he did not expect Beijing to limit the flow of mainland Chinese visitors into Macau with tighter visa or currency restrictions. Reports in other news media have said the mainland authorities will intensify their scrutiny of gambling junkets to deter corruption and money laundering now that Xi Jinping has become head of the Chinese Communist Party. Two newspapers, The Times in Britain and the Wall Street Journal in the United States, have linked the arrests of junket operators to

the downfall of Bo Xilai, once the party chief in the western city of Chongqing. Mr Bai’s remarks echoed those made on Monday by Macau’s Secretary for Economy and Finance, Francis Tam Pak Yuen. Mr Tam said he had not heard any reports that VIP gaming faced stricter control by Beijing.

Swansong in the air Mr Bai said the central government had made its attitude to Macau clear at the party congress held last month. “I guess there will not be any change in policy on Macau,” he said. “It will be the same.” Mr Bai said the authorities in the mainland had yet to decide who should take over Mr Xi’s responsibility for supervising Macau and Hong Kong affairs. He hinted that he himself may leave the Central People’s Government Liaison Office, where he has been director for over a decade. He stepped down from the Chinese Communist Party central committee

‘There will not be any change in policy on Macau’, says Bai Zhijian, director of the Central People’s Government Liaison Office

last month, causing speculation that he may be leaving Macau. He said he had left the party central committee because of his age. Mr Bai said in response to speculation that he may be leaving Macau: “When will I leave Macau? I will always listen to orders. If there

is one, I will then leave.” He added that he thought the biggest challenge Macau faced was the restructuring of its economy. “How to diversify the economy? What is the appropriate way? We need to find the solutions together, but it’s not easy,” he said.

macau

Casino town that rejected Pansy Ho has ‘worst ever’ month

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Uneven spread The growth in gross domestic product in recent years has been remarkable. Growth slowed in 2008 and 2009 and GDP even contracted at one stage, but the economy grew strongly in the following two years. Current trends point to GDP being some 70 percent bigger this year than in 2008. The population has grown by less than 10 percent since 2008, so average income per head has risen, by around 50 percent in real terms. But we should also look at other indicators, such as consumption. Consumption reveals how income is spent and thus may be a better gauge of changes in material wellbeing.

Superstorm Sandy blamed for near 30 pct fall in gaming revenue in Atlantic City

Boarded up boardwalk – Trump Plaza casino just before Sandy struck

Real consumption rose steadily from 2008 to this year, but at a much slower pace than income. The figure for consumption this year is a rough estimate, based on consumption in the first three quarters. It suggests that by the end of this year growth in consumption will have been less than half the growth in GDP since 2008. Consumption per head, calculated using the figure for average population in each year, will have risen by about 25 percent. Compared with the GDP figures, these numbers may look small, but they are a sign of a notable increase in economic wellbeing. They may also hint at increasing inequality of distribution of income, as they reveal a relatively low marginal propensity to consume. This points to the increases in income benefiting mainly the people that earn the most and have higher savings rates. J.I.D.

20.7 % Consumption as a share of GDP this year

tlantic City – the United States casino town that MGM Resorts International was forced to renounce in favour of its investment in Macau – suffered its biggest monthly drop in gaming revenue in 34 years of legalised gambling. Casinos in the New Jersey coastal city – a two-and-a-half hours drive from New York – took in US$176.6 million (1.41 billion patacas) in November, a decline of 27.9 percent compared to November 2011. Slot revenue was US$126 million, down 27 percent, and table games revenue was US$50.4 million, down nearly 30 percent. The blame is being put squarely on Superstorm Sandy. Although the unusually ferocious hurricane hit the U.S. northeastern seaboard in October, the damage, disruption and negative publicity severely affected Atlantic City’s tourism industry in November. The casinos closed on October 28, the day before the storm hit, and began reopening on November 2. It wasn’t until November 5 that all 12 casinos were back in operation. That led to a 19.9 percent decline in casino revenues in October, the previous largest monthly drop ever.

Fighting back Non-gaming revenues are also likely to show a decline for the period. According to the state’s Division of

Gaming Enforcement, at least nine conventions, conferences, trade shows and fairs were scratched. At least 15 concerts and other entertainment events were also cancelled for the month. A 2009 report of the New Jersey DGE required MGM – then known as MGM Mirage – to choose between its investment in Atlantic City, where it has a half share in The Borgata Hotel Casino & Spa, and its investment in Macau. That was because of what the body said was the “unsuitability” of businesswoman Pansy Ho Chiu King as a partner in its part-owned Macau casino MGM Macau. The Macau gaming rights for the operation were purchased as a sub-concession from her father’s company Sociedade de Jogos de Macau SA in 2005 for US$200 million.

Family trouble The NJDGE judged that Ms Ho was not sufficiently distanced from the influence of her father, former Macau gaming monopolist Stanley Ho Hung Sun. Mr Ho has previously tried and failed to get gaming licences in the United States and Australia. The reason cited for the refusals in the United States was that Mr Ho was

linked to Chinese organised crime via his Macau junket rooms. Ms Ho did however pass a suitability test posed by Nevada regulators in MGM’s main U.S. market Las Vegas. Shortly after the NJDGE report was made public, MGM said it had reached a consensual agreement with New Jersey to sell its stake in The Borgata. Two and a half years later the sale is still pending. In August last year, MGM Resorts was given an 18 month extension on a deadline to dispose of its 50 percent holding in The Borgata. MGM’s joint venture partner in the property – Boyd Gaming Inc. – has so far chosen not to buy it. The new deadline for a disposal is now March 24, 2013. In October John McManus, executive vice president and general counsel and secretary for MGM Resorts told Business Daily the firm had an obligation to shareholders to obtain “fair value”. Some shareholders have been openly critical of current management – largely because of the huge debt burden created by its joint venture investment in the US$9.2 billion CityCenter project in Las Vegas. That had a first phase opening into a slowing U.S. economy in December 2009.

We run fast and forward... just like them.

M.G.

MACAU

VIP gambling market shrinks slightly in November Mass-market grows 32 pct – but some high rollers possibly migrating to mass tables Michael Grimes

michael.grimes@macaubusinessdaily.com

IP gaming revenue shrank slightly year-on-year in November according to industry returns obtained by Business Daily. At the same time mass-market table gaming grew 32.3 percent. High roller revenue for this November was HK$16.14 billion (US$2.08 billion) compared to HK$16.25 billion in the equivalent month a year earlier – a fall of HK109.66 million, or equal to 0.67 percent. Given the monthly variations in casino hold rates for baccarat, this amounts to a flat segment year-on-year. By contrast in the mass-market table games sector, revenue registered 32.3 percent expansion year-on-year, to HK$6.91 billion compared to HK$5.22 billion in November 2011. When slot revenue is added, it meant an overall 7.9 percent year-on-year revenue growth in November. Recent statements from sources close to the mainland authorities – along with media reports this month of Macau junket executives being arrested – have given the impression that the central government is stepping up its scrutiny of Macau’s casino industry in the wake of this autumn’s leadership changes in Beijing. A number of analysts said last week their industry sources suggest this has not had a depressive effect on the VIP market beyond a general

slowdown in growth linked to a reduction of export orders for the Chinese economy. Bu t o n Decem b er 4 , ca s i n o investors did react to reports that the arrests were linked to possible money laundering connected to disgraced mainland politician Bo Xilai. In a sell off in Hong Konglisted Macau gaming stocks that day, SJM Holdings Ltd led the bears’ retreat, with a 5.8 percent fall to HK$17.24 per share – the most in six months. Yesterday five of Macau’s six concessionaires and subconcessionaires were again heading south in Hong Kong trading, with SJM down 1.27 percent on the day to HK$17.06. The exception was Melco Crown Entertainment Ltd, which registered a 0.20 percent gain in Hong Kong and a rise of 0.99 percent overnight in New York.

Health warning Some caution is required when assessing the apparent fall in VIP revenue and the strong growth of mass table play. At the recent Asian Gaming & Hospitality Congress organised by Beacon Events in Macau, Hoffman Ma, deputy chief executive of the Ponte 16 casino resort in Macau said some junket players were moving onto so-called premium mass tables in order to avoid the scrutiny of the mainland authorities into their

financial affairs. A t th e u p p er en d o f M a c a u casinos’ mass segment, minimum bets are also in thousands of HK dollars and rebates to players on losses can be similar to those available to VIPs. A key difference is that junket play is based on credit advanced to players, while premium mass is a

cash business. But industry sources have told Business Daily that some of the transferred players might still be receiving credit from junkets so that they can play in the cash-only mass segment. If a trend, it adds yet another layer of complication to the challenge of understanding Macau’s opaque high-end gambling market.

AERL plans dual listing in Hong Kong Nasdaq-quoted company hopes to complete second listing in first half 2013

sia Entertainment & Resources Ltd – a Nasdaqlisted VIP room gaming promoter in Macau – says it intends to pursue a dual listing of its shares on the Hong Kong Stock Exchange. The company has “engagement letters with applicable professional advisors in order to complete such listing,” AERL said in a press release in New York on Monday, United States’ time. AERL’s stock closed that day on the Nasdaq down 0.34 percent at US$2.90 (23.15 patacas). The firm added in the statement it had received “preliminary guidance” from the HKSE on its listing inquiry – originally submitted in August – that had encouraged it to go ahead with a formal application. “Based on the tentative timetable, the company intends to file a formal listing application with the Hong Kong Stock Exchange in the first half of 2013,” added the document. In November AERL announced unaudited rolling chip turnover – a

way of measuring the volume of VIP business rather than actual gross gaming revenue – for the month as US$1.26 billion, down 26 percent year-on-year compared to the US$1.71 billion turnover November 2011. Market wide, Macau’s total gaming revenue grew eight percent year-on-year in November, while VIP was flat in that period. Also last month, AERL reported a third-quarter profit of US$22.6 million or US$0.53 per share, down 16 percent in profit terms from the US$26.9 million or US$0.68 per share in the same period last year. The company – spun off from Hong Kong firm Asia Gaming & Resort Ltd founded by veteran Macau junket operator Lam Man Pou – has VIP rooms at Galaxy Entertainment Group Ltd’s StarWorld Macau and Galaxy Macau; Sands China Ltd’s The Venetian Macao; and Melco Crown Entertainment Ltd’s City of Dreams resort. M.G.

Macau at your breakfast table. With Business Daily. Find us in the following newsstands Pacapio at San Ma Lo Opposite HKSB (Nam Van) Beside Luso Bank Building Wen Hang Bank at San Ma Lo In front of Portuguese Bookshop In front CTM at San Ma Lo In front Daiso shop at San Ma Lo Next to S. Lourenço Market Next to Human Resources Dpt Next BNU at Av. Sidonio Pais San Miu, Av. Horta e Costa Next to Metro Park Hotel

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business daily December 12, 2012

GREATER CHINA

Cathay cabin crew in strike vote After salary negotiations with the carrier broke down Jasmine Wang and Aibing Guo

Cathay Pacific said it was disappointed with the union’s decision

athay Pacific Airways Ltd cabin crew authorised union leaders to initiate industrial action, stepping up a pay dispute ahead of the year-end travel rush. Flight attendants could workto-rule or refuse to do some tasks such as serving food to passengers in the run-up to Christmas, Dora Lai, chairwoman of the Flight Attendant’s Union, told reporters in Hong Kong yesterday, after members voted in favour of action. Workers may go on strike over the New Year or the February Lunar New Year holiday if Cathay fails to respond to requests for more pay talks, she said. “If they run Cathay Pacific as a low-cost airline, then we will have to conduct a low-cost airline service,” Ms Lai said after a meeting of more than 1,600 union members or their representatives. “We have no choice.”

The union represents more than 5,800 of Cathay’s 9,000 flight attendants. The labour group, which originally asked for a 5 percent pay rise, is seeking talks after Cathay announced an increase of about 2 percent. The Hong Kong-based carrier is also trying to cut costs because of waning long-haul travel demand and higher fuel prices. The union didn’t say when it would begin industrial action. A strike would be a “last resort” and it won’t happen before Christmas, Ms Lai said. Cathay is disappointed by the union’s move, said Liza Ng, its head for cabin crew. The airline, which reported a first- half loss, last month banned spending on festive gatherings,

scraped a management conference and cut entertainment spending to a “bare minimum”.

Shares fall Cathay fell 1.9 percent to HK$13.32 (US$1.7) at close of trading in Hong Kong yesterday. The carrier has risen 2 percent this year, compared with the benchmark Hang Seng index’s 21 percent jump. The pay offer to cabin crew is “fair,” Ms Ng said. Workers will also get a discretionary extra month’s pay. Cathay has said it’s prepared to meet the union to discuss “lifestyle and operational matters,” provided the threat of industrial action is ended. The last time Cathay flight attendants staged a strike was during the Lunar New Year holiday in

Mainland-made ‘toxic’ rubber ducks seized in U.S. Contained unsafe levels of regulated chemicals called phthalates, says customs

nited States Customs agents at the Los Angeles/Long Beach Seaport in California have seized more than 35,000 rubber duck toys from China because they contain excessive amounts of a regulated chemical. A press release from U.S. Customs and Border Protection says the ducks, dressed in Christmas outfits as Santa Claus, snowmen, gingerbread men, reindeer and penguins contain levels of phthalates that may be harmful to health. Phthalates are a group of oily, colourless liquid chemicals that are used among other things to make vinyl and other plastics soft and flexible. The U.S. Consumer Product Safety Commission prohibits the sale, distribution or importation into the U.S. of any children’s toy or child care article that contains concentrations

Out for a duck – Chinese toys seized in U.S.

of more than 0.1 percent of di(2-ethylhexyl) phthalate, dibutyl phthalate, or benzyl butyl phthalate. The consignment seized on Tuesday week had a domestic value of US$18,522 (148,000 patacas).

Over the past four years, the Commission and U.S. Customs have stopped more than 8.5 million units of about 2,400 different toys and children’s products from entering the market due to safety hazards or the

If they run Cathay Pacific as a low-cost airline, then we will have to conduct a low-cost airline service Dora Lai, chairwoman of the Flight Attendant’s Union

1993 when about 1,000 cabin crew walked out for 17 days, the longest in the union’s history, according to Tsang Kwok Fung, a spokesman for the Cathay Pacific Airways Flight Attendants Union. Since then, there have only been smaller actions such as working to rule, he said. Bloomberg News

failure to meet federal safety standards. “By seizing dangerous toys and children’s products at U.S. ports of entry, CBP and CPSC keep unsafe products off store shelves and out of consumers’ homes,” said the press statement. In August 2007 some of the world’s biggest toy brands were forced to issue product recalls on tens of millions of items. It happened after a Chinese factory owner in Guangdong was found to have used cheaper but toxic leaded paint in the manufacturing process rather than unleaded material. At the time commentators in China and beyond pointed to the pressure local manufacturers were under on margins – squeezed by Chinese workers demanding higher wages, rising world prices for commodities leading to higher component costs and Western clients demanding that Chinese-made goods remain cheap. Later that month Zhang Shuhong, a 52-year-old businessman, was found hanging in his company building – Lee Der Industrial in Foshan, 105 kilometres (64 miles) northwest of Macau – after apparently committing suicide. It came days after an investigation by California-based toy brand owner Mattel Inc., found Mr Zhang’s firm as the source of one million toys coated in lead paint. M.G.

December 12, 2012 business daily | 9

GREATER CHINA

New loans trail forecasts in sign of slower growth

Nov. fiscal revenue growth hits new high

But economic recovery on track, analysts say Aileen Wang and Kevin Yao

hina’s banks lent more slowly than markets expected in November while the pace of total financing eased, but analysts said the economy remains on track for a modest recovery due to accommodative polices. Chinese banks extended 522.9 billion yuan (US$83.73 billion) of new local currency loans in November, the central bank said yesterday, missing market expectations of 550 billion yuan. The November new loan data – released on the People’s Bank of China on its website – implies total lending is on course to exceed 8.5 trillion yuan in 2012, up from 7.47 trillion in 2011. China’s top leaders have pledged to continue policy fine-tuning in 2013 to ensure stable economic growth.

KEY POINTS New yuan loans reach 522.9 bln in November Total social financing at 1.14 tln yuan, down from Oct Recovery seen on track due to supportive polices Total lending on course to exceed 8.5 tln yuan in 2012

“We think the monetary policy is still loose, and [authorities] will maintain the current loose stance for the next several months. That is strong enough to keep the economic recovery on track,” said Zhang Zhiwei, China economist at Nomura Holdings Inc. in Hong Kong. “We don’t think the government needs to cut interest rates. Most likely they will just keep the ongoing credit loosening.” The modest credit data followed data on Monday that showed exports growth slowed sharply to a much lower than expected 2.9 percent in November, underscoring the global headwinds dragging on an economy

Lending data point to a more subdued recovery

which is showing otherwise solid signs of a pick up in domestic activity. Data at the weekend showed both industrial output and retail sales rose in November at their fastest annual pace in eight months, reinforcing the view that growth in the world’s second-biggest economy is finally picking up after a long slide. China’s annual economic growth dipped to 7.4 percent in the third quarter, its weakest pace since the first quarter of 2009 when China was reeling from the global financial crisis. Growth is expected to pick up in the fourth quarter following a raft of measures, including two interest rate cuts this year, reductions in bank reserve requirements and faster approvals for infrastructure projects.

Accommodative footing China’s total social financing aggregate, a broad measure of liquidity in the economy, stood at 1.14 trillion yuan in November, down from 1.29 trillion yuan in October, the People’s Bank of China said. Total social financing, which covers bank loans, trust loans, bank acceptance bills, corporate bonds and equity financing, is likely to hit a record high this year. China’s central bank is watching

its overall social financing aggregate more closely than bank loans as it steers policy and moves ahead with market-based interest rate reforms, a senior central bank official said in November. New yuan bank loans accounted for only 58.2 percent of the country’s total financial aggregate in 2011. “The new loans figure holds less importance in China’s social financing than it used to, so that’s not much of a miss. We’re still on track for the central bank’s target for the full year,” said Jacqueline Rong, economist at BNP Paribas in Beijing. “The total social financing figure, although slightly lower than last month, is still higher than last year. That shows we’re still on an accommodative footing.” The PBOC cut interest rates in June and July and has lowered required reserve ratios (RRR) three times since late 2011 to free an estimated 1.2 trillion yuan (US$190 billion) for lending as part of a year-long programme of policy fine-tuning. It has since held off on more aggressive easing, opting instead to pump short-term cash into money markets to ease credit strains, a move analysts say reflects Beijing’s concerns about renewed property and inflation risks. Reuters

Cnooc deal not yet done, says Nexen CEO

he US$15.1 billion takeover of Canadian oil and gas producer Nexen Inc. by China’s state-owned Cnooc Ltd is not yet wrapped up despite the Canadian government’s blessing after months of heated debate, Nexen’s chief executive said on Monday. “We are nowhere near done,” Nexen interim CEO Kevin Reinhart told Reuters as he left a business conference about economic ties between Canada and Asia. He declined to give his reaction to Ottawa’s decision on Friday to approve the deal, saying it was too early. A further decision on the highprofile transaction still rests with

a secretive U.S. foreign investment panel, which gets a say because Nexen has exploration and production assets in the Gulf of Mexico. Investors had been assuming that Canadian Prime Minister Stephen Harper’s green light on Friday – after deliberating on how much control foreign state-owned enterprises may have over the country’s energy resources – would be the biggest hurdle. Mr Reinhart would not give details on what else was needed before the deal could close. “It’s in the press release, so that’s all I’m going to say,” he said. In a statement released early on Saturday, Nexen and Cnooc said the deal’s closing remained subject

to “the receipt of other applicable government and regulatory approvals, and the satisfaction or waiver of the other customary closing conditions.” A source familiar with the matter highlighted the ruling by Committee on Foreign Investment in the United States, or CFIUS, as the main regulatory decision still remaining. “That’s the principal one,” said the source, who spoke on condition of anonymity because he was not authorised to comment on the matter. He would not speculate how long the committee, which is led by Treasury Secretary Timothy Geithner, might take to rule. Reuters

China’s fiscal revenues grew at their fastest pace this year in November, jumping 22 percent from a year ago, in another encouraging sign that the country’s economic recovery is gaining speed. Faster growth in factory output, retail sales and fixed-asset investment boosted November receipts from value-added tax, business tax and enterprise income tax, the finance ministry said yesterday. That helped China’s central and local governments to earn 787.1 billion yuan (US$126.03 billion) in November, bringing total fiscal revenues in the first 11 months to 10.9 trillion yuan, exceeding 2011’s full-year income of 10.4 trillion yuan. Tax revenues grew 14 percent in October and the quickening growth adds to evidence that China’s economy is rebounding. Economic data over the weekend showed factory output and retail sales rose at their fastest pace in eight months in November, fuelling hopes that the world’s second-largest economy is snapping out of a seven-quarter long slide. Still, the ministry cautioned against reading too much into yesterday’s data. It said November’s fiscal revenue growth was lifted by low comparison figures a year ago, when the economy was in the throes of a slowdown. Value-added tax revenues rose 16 percent in November from a year earlier, while enterprise income tax surged 51 percent. Meanwhile, China’s fiscal expenditure rose 7 percent in November from a year earlier to 1.21 trillion yuan. The central government spent 149.5 billion yuan and local governments spent 1.07 trillion yuan, the ministry said. State expenses for education jumped 33 percent in the first 11 months, while healthcare expenditure and affordable housing climbed 20 percent and 17 percent respectively. Spending on transportation climbed 12 percent to 720.5 billion yuan.

Baosteel raises main steel product prices China’s Baoshan Iron & Steel Co Ltd, the country’s biggest listed steelmaker, said yesterday it will raise the January booking prices for some of its steel products, a signal the company is increasingly optimistic about its prospects. The company will raise hot-rolled coil prices by 80 yuan (US$12.81) per tonne and coldrolled coil by 60 yuan per tonne. Baosteel’s pricing decisions usually set the tone for the rest of the market. Baosteel provides about half of the domestic market supply of cold-rolled coil sheets used in carmaking. Chinese vehicle sales rose 8.2 percent in November from a year earlier, with the pace of growth picking up from the previous month as Japanese car makers showed signs of recovering following a huge slump. Hot-rolled coil prices also rose 5 percent in November, traders said, encouraging steel mills to raise prices to chase the rally. Analysts expected little room for hot-rolled coil prices to fall in December due to lower steel output and higher steel mill prices. Rising industrial output and retail sales in November at their fastest annual pace in eight months suggests that the growth in the world’s second-largest economy is picking up after a long slide. Baoshan Iron & Steel, China’s biggest listed steelmaker raised prices for December by 100 yuan (US$16) a tonne, after keeping them unchanged over October and November. Reuters

10 |

business daily December 12, 2012

ASIA Gillard’s Labor slips in poll Australian Prime Minister Julia Gillard’s popularity fell to a six-month low as opposition attacks over her work as a union lawyer 20 years ago reversed her party’s gains ahead of elections next year. The ruling Labor party’s primary vote fell four percentage points to 32 percent with Tony Abbott’s Liberal-National opposition rising three points to 46 percent, according to a Newspoll survey published in the Australian yesterday. Yesterday’s survey reverses a trend that saw Labor close the gap in recent months against Mr Abbott’s coalition.

Yen cracks as trade deficits meet with BOJ stimulus As Japan’s currency safety becomes questionable because of the sovereign debt

he yen is losing its status as a haven for risk-averse investors as Japan lurches toward a chronic trade deficit and the front-runner to become the next prime minister calls for unlimited central-bank stimulus. Overseas money managers, who scooped up an unprecedented amount of Japanese short-term notes in 2011, cut purchases by 72 percent this year, government data show. The yen is the biggest loser in 2012 among 10 developed currencies, after leading gains for two years. Futures traders have raised bets to a five-year high that the currency will weaken further. Due to a large trade surplus that reduced Japan’s reliance on foreign investment to finance its budget deficit, the yen was in demand as Lehman Brothers Holdings Inc. collapsed in 2008, the global economy slowed in 2009 and Europe’s debt crisis emerged in 2010. Faith is waning in Japan’s ability to service the world’s biggest debt burden as its trade advantage shrinks and lawmakers demand more money printing to spur the economy. “In 2008, Japan appeared to have the safest banking system in the world, and we bought the yen,” Axel Merk, founder and president of Palo Alto, California-based Merk Investments LLC, which manages the

US$547 million Merk Hard Currency Fund, wrote in an e-mail response to inquiries. “Now, even that ‘safety’ is questionable as sovereign debt isn’t what it used to be.”

Debt burden Japan’s public debt this year will be 237 percent of its annual gross domestic product, according to an estimate by the International Monetary Fund. That’s the highest debt-to-GDP ratio globally and compares with 107 percent for the U.S. Polls indicate opposition leader Shinzo Abe will replace Yoshihiko Noda as prime minister after elections on Sunday. Mr Abe’s Liberal Democratic Party has called for a 2 percent inflation target, double the Bank of Japan’s current goal, and a possible revision of the law that guarantees the central bank’s independence. Government data on Monday showed Japan’s GDP shrank an annualised 3.5 percent in the third quarter. That matched preliminary figures from November and confirmed a second- straight contraction that marks a technical recession. The yen has tumbled 9.5 percent this year, the worst performer among the 10 developed-market currencies tracked by Bloomberg Correlation-

Weighted Indexes. It gained the most last year and in 2010, appreciating 5.5 percent and 12 percent.

Paring back The currency was at 82.35 per dollar as of 2.15pm in Tokyo. The yen touched 82.84 on November 22, the weakest since April 4 and a 9 percent plunge from the post-war record of 75.35 reached last year. Overseas fund managers have bought a net 4.77 trillion yen (US$58 billion) of Japanese money-market securities this year through December 1, compared with a record 16.7 trillion yen last year, according to Ministry of Finance data going to back to 2005. The 2012 purchases are set to be the smallest annual amount in three years. Foreign demand for the nation’s debt has eroded along with its export supremacy. Japan’s trade deficit for 2012 so far is a record 5.3 trillion yen, worsened by fuel imports to offset the shuttering of nuclear plants following 2011’s record earthquake and this year’s diplomatic row with China over disputed islands. “The market is starting to pay attention to the negative fundamentals surrounding the Japanese economy and reassessing the yen’s status as a safe haven,”

The yen has tumbled 9.5 percent this year

Takatoshi Kato, a former deputy managing director at the IMF, said. “The trade deficit is likely to widen.” The difference in the number of wagers by hedge funds and other large speculators on a decline in the yen compared with those on a gain was 90,326 on December 4, figures from the Washingtonbased Commodity Futures Trading Commission show. The so-called net shorts were the most since July 2007. The one-year, 25-delta riskreversal rate for the dollar against the yen reached a record 1.3 percent

Singapore lures mobile rich City-state tops Hong Kong as quality of life cited as main attraction, survey shows Stephanie Tong

Singapore – good to invest and to live in

ingapore topped Hong Kong as the most desired place in Asia for so-called mobile millionaires to reside, with quality of life cited as the main attraction, a RBC Wealth Management survey showed. Almost a third of the millionaires in Asia who live, work or spend more than half their time outside their countries of origin prefer Singapore, while 24 percent pick Hong Kong, the second most popular in the region, RBC and The Economist Intelligence Unit said in a joint research report yesterday. Real estate led the list of preferred assets for the internationally mobile wealthy, according to the survey, which showed 23 percent of those in Singapore

reporting a “high propensity” for property investment, compared with 7 percent in North America. The island’s home prices climbed to a record in the third quarter, prompting the government to restrict home loans and cap property development. “Singapore always has this quality as a safe haven, not just for your money, but also for your family,” said Wai Ho Leong, a senior regional economist at Barclays Plc in Singapore. For mobile millionaires who moved to Singapore, 89 percent ranked quality of life as important and 83 percent cited the country’s political stability as important, the

December 12, 2012 business daily | 11

ASIA Japan firm recalls Chinese tea Japanese food company Ito En Ltd yesterday issued a huge recall of Chinese-grown tea after some of it was found to contain illegal levels of pesticide residue. The firm said it was recalling about 400,000 packages of Oolong tea after spot testing revealed pesticide residue levels above Japanese food safety limits. “We found the higher levels of pesticide residue after conducting voluntary tests following another company’s announcement about Oolong teabags,” an Ito En spokesman told AFP. But he insisted the findings were not an imminent health risk.

Thai billionaire extends bid for F&N Charoen postpones closing date a fourth time to January 2

T US$58 bln

Overseas fund managers bought of Japanese moneymarket securities this year

yesterday, signaling increased demand for the right to sell the Japanese currency against the greenback. It was negative 1.0825 percent at the beginning of this year. Mr Abe’s LDP plans a large-scale fiscal outlay to support the economy, the party said in campaign pledges published on its website. The LDP is favoured to take a majority in the lower house of parliament, the Nikkei newspaper reported last week, citing its nationwide opinion polls. A win by the LDP will likely

lead to further yen weakness next year as his administration “will increase spending, worsening Japan’s finances,” Masafumi Yamamoto, the Tokyo-based chief foreign-exchange strategist at Barclays Plc, said last week. “Pressure on the BOJ for additional monetary easing will remain strong.” The central bank last month refrained from expanding its 66 trillion-yen asset-purchase programme, which buys securities including government debt.

survey showed. Infrastructure and educational opportunity were also given as reasons to live there.

with rising demand fuelling record property and car prices.

Most millionaires Singapore posted a 14 percent increase in millionaire households to 188,000 last year, when the Asia-Pacific region countered a decline in wealth in Western Europe and the U.S., according to a Boston Consulting Group report published May 31. The proportion of millionaire homes in the city was 17 percent, the highest in the world, followed by Qatar and Kuwait, according to Boston Consulting Group. Singapore has a population of 5.3 million, of which about 2 million are foreigners. “High net worth individuals with global outlooks for their businesses and families are choosing Singapore to live and invest in,” Barend Janssens, the Singapore-based head of RBC’s wealth-management unit for emerging markets, said in a statement. The city-state is grappling with the elevated inflation that comes with years of economic growth and population expansion on an island smaller than New York City,

Bloomberg News

Doing business Hong Kong is the best place to do business, according to data compiled by Bloomberg. The city of about 7 million people secured the top position in an index based on six criteria including the degree of economic integration and labour costs. Singapore ranked ninth in the index published in March by Bloomberg Rankings. Hong Kong acts as the gateway to China, the world’s most populous nation, with free-market policies and low corporate taxes. “Hong Kong is a very big financial centre in the region and in recent years has also benefited a lot from China opening up its markets,” said Frances Cheung, a Hong Kong-based strategist at Credit Agricole CIB. Hong Kong is “about the opportunities, especially in the financial world”. The World Bank ranks Singapore and Hong Kong top in its gauge focused on the ease of doing business. The Washingtonbased Heritage Foundation has named Hong Kong the world’s freest economy for 18 successive years. Bloomberg News

hai billionaire Charoen Sirivadhanabhakdi extended a deadline for a US$7.3 billion offer for Fraser & Neave Ltd to a day before a higher bid from a group led by Overseas Union Enterprise Ltd is due to close. Mr Charoen’s TCC Assets Ltd will extend the closing date on its S$8.88 offer for the property and beverages conglomerate a fourth time to January 2, according to a stock exchange statement yesterday. The OUE-led group on November 15 topped his bid with a S$9.08 offer that closes on January 3. Taking over the conglomerate’s soft-drink and real-estate businesses would help Mr Charoen expand his Thai businesses in Asia. The billionaire agreed to buy a stake in the drinks and property company in July, setting off a race to buy its assets “I don’t think Charoen is willing to give F&N up; it’s about whether he can get the financing, not for the lack of ambition,” said Justin Harper, a strategist at IG Markets in Singapore. “He’ll be reluctant to give this up after seeing F&N’s value, and the synergies it’ll bring with his own businesses. With F&N, it’s full ownership or nothing.” OUE has enlisted Kirin Holdings Co., Japan’s largest drinks maker and F&N’s second-largest shareholder, in its bid. OUE would get the company’s

Kirin keen on taking F&N’s food and also beverage unit

property business and Kirin would take the food and beverage unit. Kirin, which has a 14.8 percent stake in F&N, has agreed to tender its shares and won’t accept any competing bid, said OUE, a property affiliate of Indonesia-based Lippo Group. The Japanese brewer, Asia’s biggest beverage maker, will offer S$2.7 billion for F&N’s food and beverage business, if OUE wins enough support to complete the takeover. F&N has said it had committed to pay the OUE consortium a break-up fee of as much as S$50 million if a competing offer is successful. AFP

N. Zealand central bank adds new capital rule

he Reserve Bank of New Zealand (RBNZ) said yesterday it has added a new counter-cyclical capital buffer that can be applied in times of excessive capital growth from 2014 as it released final capital adequacy standards for banks under international Basel III rules. The RBNZ said the bulk of the new standards will take effect from January 1, 2013, such as rules around how much regulatory capital must be held by banks, and which financial instruments may be treated as regulatory capital. The central bank had already confirmed in May that it would increase banks’ core funding ratio to 75 percent from 70 percent as part of measures to strengthen banks’ liquidity. The Basel III capital framework was introduced by the Basel Committee on Banking Supervision

(BCBS) in December 2010 to raise the quality and level of capital in the banking system. “The final capital adequacy requirements released today considerably enhance the ability of the New Zealand banking system to absorb shocks, whatever their source,” Deputy Governor Grant Spencer said in a statement. He said New Zealand banks were already well capitalised, making it easier for the country to implement the Basel package. The RBNZ said two parts of the Basel framework are still to be finalised, including counterparty credit risk and disclosure requirements. There are 19 registered banks in New Zealand, although the sector is dominated by four Australianowned entities. Reuters

12 |

business daily December 12, 2012

MARKETS Hang SENG INDEX NAME

NAME

PRICE

DAY %

VOLUME

30.75

2.842809

33920297

CHINA UNICOM HON

ALUMINUM CORP-H

3.42

-0.8695652

13866230

CITIC PACIFIC

BANK OF CHINA-H

3.35

0.2994012

322438687

BANK OF COMMUN-H

5.72

-0.5217391

43178535

BANK EAST ASIA

29.5

-0.8403361

2120997

16.36

-0.6075334

19583352

ESPRIT HLDGS

23.7

-0.6289308

13187148

HANG LUNG PROPER

CATHAY PAC AIR

13.32

-1.91458

3662008

CHEUNG KONG

119.7

1.012658

3446172

7.96

0.6321113

25717052

AIA GROUP LTD

BELLE INTERNATIO BOC HONG KONG HO

CHINA COAL ENE-H CHINA CONST BA-H

CLP HLDGS LTD

PRICE

DAY %

VOLUME

12.38

20909730

NAME POWER ASSETS HOL

PRICE

DAY %

67.5

-0.5891016

10.6

3.921569

23655113

SANDS CHINA LTD

1783761

32.55

-0.610687

8019702

SINO LAND CO

14.06

-0.5657709

4688607

SUN HUNG KAI PRO

116.7

1.832461

8269641

SWIRE PACIFIC-A

94.85

-0.4721931

1667202

TENCENT HOLDINGS

252.6

-0.3157064

3025517

22.2

1.369863

3723489

10.66

-1.296296

19882193

-1.666667

4297351

67.4

0.2230483

1901752

16.82

0.238379

40280474

11.3

-2.586207

5483098

12.32

-0.9646302

10794923

29.5

1.549053

5855437

TINGYI HLDG CO

HANG SENG BK

118.2

-0.5050505

1098132

WANT WANT CHINA

HENDERSON LAND D

WHARF HLDG

CNOOC LTD COSCO PAC LTD

55.05

-1.078167

2485065

HENGAN INTL

69.7

0.2877698

2654800

HONG KG CHINA GS

21.5

0.9389671

7631036

126.9

0.1578532

4411632 7495947

MOVERS

6.13

0.1633987

289381729

23.15

-0.856531

28617589

3024895

HSBC HLDGS PLC

79.7

0.3146633

CHINA MOBILE

89.1

0.621118

15520809

HUTCHISON WHAMPO

78.8

-0.630517

4191379

CHINA OVERSEAS

23.2

-0.4291845

25714462

IND & COMM BK-H

5.39

0.1858736

297670721

CHINA PETROLEU-H

8.72

1.160093

103139522

LI & FUNG LTD

13.16

0.4580153

14624195

CHINA RES ENTERP

27.5

-0.7220217

3654609

MTR CORP

30.75

-1.284109

2390214

20.95

-3.009259

15437464

NEW WORLD DEV

12.14

-0.8169935

17453230

52W (H) 22393.19922

18.4

2.564103

6056871

PETROCHINA CO-H

10.68

-0.1869159

42338371

(L) 17821.51953

PING AN INSURA-H

59.95

-0.4979253

12795163

CHINA LIFE INS-H CHINA MERCHANT

CHINA RES LAND CHINA RES POWER CHINA SHENHUA-H

31.8

-0.3134796

14854136

HONG KONG EXCHNG

VOLUME

2 22380

INDEX 22323.94 HIGH

22377.56

LOW

22191.17 22190

7-December

11-December

Hang SENG CHINA ENTErPRISE INDEX PRICE

DAY %

VOLUME

CHINA PACIFIC-H

26.4

0.3802281

9880775

23936631

CHINA PETROLEU-H

8.72

1.160093

103139522

-0.8695652

13866230

CHINA RAIL CN-H

8.93

-3.978495

14323926

ZOOMLION HEAVY-H

27.8

-2.112676

12288579

CHINA RAIL GR-H

4.64

-1.902748

21636728

ZTE CORP-H

BANK OF CHINA-H

3.35

0.2994012

322438687

CHINA SHENHUA-H

31.8

-0.3134796

14854136

BANK OF COMMUN-H

5.72

-0.5217391

43178535

CHINA TELECOM-H

4.28

-0.4651163

60309939

BYD CO LTD-H

19.4

1.147028

3412981

DONGFENG MOTOR-H

12.14

2.881356

25699410

CHINA CITIC BK-H

4.28

0.7058824

73393590

GUANGZHOU AUTO-H

6.56

1.234568

3876849

CHINA COAL ENE-H

7.96

0.6321113

25717052

HUANENG POWER-H

6.95

0.433526

15996640

CHINA COM CONS-H

7.32

-0.2724796

19874080

IND & COMM BK-H

5.39

0.1858736

297670721

CHINA CONST BA-H

6.13

0.1633987

289381729

JIANGXI COPPER-H

20.35

-0.7317073

5236585

CHINA COSCO HO-H

3.69

-1.861702

23305192

PETROCHINA CO-H

10.68

-0.1869159

42338371

PICC PROPERTY &

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.53

0.2840909

140635635

AIR CHINA LTD-H

5.83

-2.181208

ALUMINUM CORP-H

3.42

ANHUI CONCH-H

NAME

23.15

-0.856531

28617589

9.93

-0.8982036

19852171

CHINA LONGYUAN-H

5.31

1.142857

5914540

PING AN INSURA-H

59.95

-0.4979253

12795163

CHINA MERCH BK-H

16.16

22001347

SHANDONG WEIG-H

7.43

-2.493438

12963236

CHINA LIFE INS-H

CHINA MINSHENG-H CHINA NATL BDG-H CHINA OILFIELD-H

NAME YANZHOU COAL-H ZIJIN MINING-H

MOVERS

PRICE

DAY %

VOLUME

12.28

0.3267974

24424221

3.07

-0.3246753

29642680

10.48

-1.318267

21548192

12.3

-3.453689

11915389

1 11060

INDEX 10991.86 HIGH

11056.05

LOW

10902.16

8.5

-0.5847953

72635723

SINOPHARM-H

24.9

-0.5988024

2541302

52W (H) 11916.1

11.18

42542995

TSINGTAO BREW-H

44.4

0.2257336

1104944

(L) 8987.76

16.4

0.9852217

9335650

WEICHAI POWER-H

32.6

-0.1531394

1496104

10900

7-December

11-December

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.67

75300462

CITIC SECURITI-A

10.79

-0.9182736

45256372

SAIC MOTOR-A

AIR CHINA LTD-A

5.02

-0.9861933

9448007

CSR CORP LTD -A

4.91

-1.603206

24152173

ALUMINUM CORP-A

4.84

-0.4115226

12976616

DAQIN RAILWAY -A

6.37

-0.624025

43292088

3.6

-0.8264463

11619254

DATANG INTL PO-A

3.86

-1.278772

ANHUI CONCH-A

17.73

0.05643341

15343207

EVERBRIG SEC -A

11.65

BANK OF BEIJIN-A

8.14

1.118012

46862642

GD POWER DEVEL-A

BANK OF CHINA-A

2.84

0.3533569

24316263

GF SECURITIES-A

BANK OF COMMUN-A

4.43

-1.116071

65924549

GREE ELECTRIC

NAME

ANGANG STEEL-A

NAME

PRICE

DAY %

VOLUME

15.09

1.547779

25382161

SANY HEAVY INDUS

8.76

-1.462317

28931244

SHANDONG GOLD-MI

36.13

-1.203172

8406315

9201001

SHANG PHARM -A

10.57

-0.5644403

7734234

1.392515

10490346

SHANG PUDONG-A

8.28

-0.6002401

114930761

2.35

-0.4237288

48684242

SHANGHAI ELECT-A

12.72

24382024

SHANXI LU'AN -A

3.83

-1.28866

4052387

17.76

-0.1124859

14613443

22.6

-0.2207506

14794111

SHANXI XINGHUA-A

35.35

2.108608

5322555

15.64

-0.5721551

23879260

SHANXI XISHAN-A

11.83

1.111111

15071202

BANK OF NINGBO-A

9.2

-1.287554

8378224

GUANGHUI ENERG-A

BAOSHAN IRON & S

4.73

-0.2109705

18813087

HAITONG SECURI-A

8.83

-1.230425

39494905

SHENZEN OVERSE-A

6.19

-0.4823151

32751981

BBMG CORPORATI-A

6.88

-2.549575

43497229

HANGZHOU HIKVI-A

29.38

0.2388263

2803251

SUNING APPLIAN-A

6.19

-2.056962

52575357

16.53

-1.313433

3578270

2.49

-0.4

34958003

TSINGTAO BREW-A

30.3

-0.29615

1165989

CHINA CITIC BK-A

3.84

-0.7751938

19090033

HENAN SHUAN-A

54.58

0.1100514

1428795

WEICHAI POWER-A

23.5

-2.691511

8613630

CHINA CNR CORP-A

4.45

-1.111111

33844007

HONG YUAN SEC-A

15.92

-1.424149

8089510

WUHAN IRON & S-A

2.67

-1.476015

20780037

CHINA COAL ENE-A

7.14

0.2808989

13400631

HUATAI SECURIT-A

8.34

-1.534829

11182889

WULIANGYE YIBIN

25.82

-0.3858025

49808471

CHINA CONST BA-A

4.35

0.2304147

26307655

HUAXIA BANK CO

9.16

0.1092896

35513426

YANGQUAN COAL -A

12.53

0.8856683

15418451 3686080

BYD CO LTD -A

HEBEI IRON-A

CHINA COSCO HO-A

4.31

-1.372998

17443626

IND & COMM BK-A

3.95

79775441

YANTAI CHANGYU-A

43.7

1.321586

CHINA CSSC HOL-A

19.99

-2.009804

22508432

INDUSTRIAL BAN-A

14.04

-0.9873061

63178690

YANTAI WANHUA-A

13.97

-1.062323

8775705

CHINA EAST AIR-A

3.11

-0.6389776

13937278

INNER MONG BAO-A

32.72

-0.1525786

37415703

YANZHOU COAL-A

16.74

0.4801921

6107422

2.72

0.3690037

176294822

INNER MONG YIL-A

20.32

0.7936508

3407732

61.9

-0.4823151

1955858

CHINA LIFE INS-A

18.63

-0.267666

12751004

INNER MONGOLIA-A

4.95

-1

45967640

ZHONGJIN GOLD

15.17

-0.7848267

13581792

CHINA MERCH BK-A

10.99

0.1823154

70145022

JIANGSU HENGRU-A

27.74

-0.03603604

4415091

ZIJIN MINING-A

3.67

-0.2717391

32616389

11746709

JIANGSU YANGHE-A

90.33

-0.5066637

3594641

ZOOMLION HEAVY-A

8.54

-1.042874

30585559

JIANGXI COPPER-A

21.56

-0.1389532

9941671

ZTE CORP-A

8.31

-1.306413

12771597

JINDUICHENG -A

10.83

-1.09589

3604101

ZTE CORP-A

8.38

2.444988

17657199

JIZHONG ENERGY-A

11.43

1.419698

21120465 9284844

CHINA EVERBRIG-A

CHINA MERCHANT-A

9.05

-1.308615

CHINA MERCHANT-A

24.74

-1.434263

9778674

CHINA MINSHENG-A

6.9

-1.709402

200925578

CHINA NATIONAL-A

7.5

-3.225806

42982182

16.22

-0.2460025

3434396

KANGMEI PHARMA-A

15.07

-0.5280528

202.31

1.770713

9223260

0.6309148

12220545

CHINA OILFIELD-A

18.91

-1.817238

13566020

KWEICHOW MOUTA-A

CHINA PETROLEU-A

6.34

-0.9375

23274036

LUZHOU LAOJIAO-A

31.9

CHINA RAILWAY-A

5.68

-3.891709

43793826

METALLURGICAL-A

2.09

-0.4761905

24888248

2.47

-0.4032258

15653781

CHINA PACIFIC-A

YUNNAN BAIYAO-A

MOVERS

CHINA RAILWAY-A

2.97

-2.622951

36379544

CHINA SHENHUA-A

22.69

-0.3075571

11459425

PANGANG GROUP -A

3.57

0.8474576

50455711

8.69

-0.4581901

12359104

HIGH

2274.72

14.11

-1.46648

26068303

LOW

2203.89

4.25

42759403

3.5

-1.685393

17898241

PING AN BANK-A

CHINA STATE -A

3.34

-1.183432

110912691

PING AN INSURA-A

39.8

-0.4751188

21425859

CHINA UNITED-A

3.32

-1.190476

60533256

POLY REAL ESTA-A

12.14

-2.096774

38005329

CHINA VANKE CO-A

9.24

-1.070664

32082816

QINGDAO HAIER-A

11.49

-1.542416

10769940

CHINA YANGTZE-A

6.61

0.9160305

18894198

QINGHAI SALT-A

24.66

-0.4038772

6649314

PRICE DAY %

Volume

PRICE DAY %

Volume

CHINA SHIPBUIL-A CHINA SOUTHERN-A

10 2280

INDEX 2258.5

NINGBO PORT CO-A PETROCHINA CO-A

213

52W (H) 2717.825 (L) 2102.135

2200

7-December

11-December

FTSE TAIWAN 50 INDEX NAME ACER INC

NAME

24.55

-4.101563

26547391

FORMOSA PLASTIC

ADVANCED SEMICON

24.5

-1.408451

27620209

ASIA CEMENT CORP

37.3 -0.7978723

PRICE DAY %

Volume

TAIWAN MOBILE CO

107 -0.4651163

4252818

12143523

TPK HOLDING CO L

502

1.516684

6365402

17521359

TSMC

98.3

1.865285

40668489

UNI-PRESIDENT

53.3

0.9469697

9356994

UNITED MICROELEC

11.4 -0.4366812

40680873

5737841

FOXCONN TECHNOLO

96.1

-1.938776

5492783

FUBON FINANCIAL

33.1

NAME

ASUSTEK COMPUTER

313.5

0.1597444

4758898

HON HAI PRECISIO

-1.144641

81607318

AU OPTRONICS COR

12.8

-2.661597

150257058

HOTAI MOTOR CO

211

0.4761905

388703

CATCHER TECH

141.5

-2.076125

8566411

271.5

-2.338129

18506148

30.85

-1.594896

6540297

CATHAY FINANCIAL

30.95 -0.8012821

16895020

HUA NAN FINANCIA

16.5

0.9174312

8659083

YUANTA FINANCIAL

14.9

1.360544

25240726

CHANG HWA BANK

15.75

0.6389776

11165812

LARGAN PRECISION

866

-1.478953

2440752

YULON MOTOR CO

53.5

0.9433962

2919877

75.8 -0.5249344

5223031

LITE-ON TECHNOLO

39.3 -0.2538071

2855832

CHENG SHIN RUBBE CHIMEI INNOLUX C

HTC CORP

14.25

-3.061224

205426846

MEDIATEK INC

322

1.257862

7291356

CHINA DEVELOPMEN

7.27

1.112656

39503449

MEGA FINANCIAL H

22.2

-1.333333

30396542

CHINA STEEL CORP

26.2

0.3831418

21574292

NAN YA PLASTICS

52.3

0.1915709

6084351

CHINATRUST FINAN

17.4

-0.286533

40210113

PRESIDENT CHAIN

157

0.3194888

2776215

CHUNGHWA TELECOM COMPAL ELECTRON DELTA ELECT INC

0.5291005

12771774

QUANTA COMPUTER

-1.449275

14660830

19.85

-2.216749

27586713

SILICONWARE PREC

31.6

-1.25

11035085

107

0.9433962

4262307

SINOPAC FINANCIA

12.35

24535105

FAR EASTERN NEW

-2.222222

12891871

SYNNEX TECH INTL

53.7

-4.107143

13413362

FAR EASTONE TELE

74.6

1.496599

10310392

TAIWAN CEMENT

38.9 -0.2564103

12621732

17.85

FIRST FINANCIAL

0.5633803

11307771

16.15

0.623053

9149241

FORMOSA CHEM & F

69.1 -0.5755396

5018523

TAIWAN FERTILIZE

0.2710027

2534026

FORMOSA PETROCHE

87.2

2082207

TAIWAN GLASS IND

0.7194245

1298633

2.347418

TAIWAN COOPERATI

WISTRON CORP

MOVERS

3 5400

INDEX 5370.67 HIGH

5398.57

LOW

5337.22

52W (H) 5621.53 5330

(L) 4643.05 7-December

11-December

December 12, 2012 business daily | 13

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

MELCO CROWN ENTERTAINMENT

MGM CHINA HOLDINGS 39.0

28.6

14.2

28.4

14.0 38.8

28.2

Max 28.5

Average 28.15

Min 28

Last 28.15

28.0

SANDS CHINA LTD

Average 32.508

Max 32.65

13.8

Max 39

Average 38.966

Min 32.2

Last 32.55

PRICE

Average 13.938

Min 13.74

Last 13.74

WyNN MACAU LTD 21.2

32.6

17.3

21.0

32.4

17.2

32.2

17.1

32.0

20.8 20.6 20.4

17.0 Max 17.38

Average 17.154

DAY %

YTD %

(H) 52W

Min 17.04

Last 17.06

20.2 Max 21.05

-12.26096738

109.6699982

79.68000031

BRENT CRUDE FUTR Jan13

107.75

0.391316501

4.106280193

120.7699966

90.15999603

GASOLINE RBOB FUT Jan13

260.92

0.427235287

5.490418048

293.3099985

218.4999943

GAS OIL FUT (ICE) Jan13

909.25

0.137665198

1.450488145

1036.25

799.25

3.442

-0.520231214

-11.35719804

4.127000332

3.062000036

NATURAL GAS FUTR Jan13 HEATING OIL FUTR Jan13

292

0.821766453

1.621772117

334.2199802

255.5699825

Gold Spot $/Oz

1710.48

-0.0175

9.3021

1796.08

1522.75

Silver Spot $/Oz

33.0813

-0.7089

18.8479

37.4775

26.1513

Platinum Spot $/Oz

1622.05

0.3092

16.3177

1736

1339.25

Palladium Spot $/Oz

697.65

0.2587

6.7559

725.19

553.75

LME ALUMINUM 3MO ($)

2132

1.814708691

5.544554455

2361.5

1827.25

LME COPPER 3MO ($)

8135

1.244555072

7.039473684

8765

7131

LME ZINC

2084

2.761341223

12.95392954

2220

1745

17780

3.222060958

-4.970603955

22150

15236

15.49

0.258899676

0.879192445

16.60000038

14.60000038

727.5

-0.342465753

21.19950021

846.25

511

WHEAT FUTURE(CBT) Mar13

843.25

-0.648011782

14.88419619

948.25

652

SOYBEAN FUTURE Jan13

1477.75

0.203424309

21.82605111

1781.5

1126.75

COFFEE 'C' FUTURE Mar13

147.2

0.136054422

-38.13826434

249

146.3499908

SUGAR #11 (WORLD) Mar13

18.83

0.373134328

-19.39212329

25.12999916

COTTON NO.2 FUTR Mar13

73.45

0.068119891

-17.01502655

98.5

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jan13 Mar13

PRICE

(L) 52W

0.280504909

Average 20.495

Last 20.45

Min 20.35

MAJORS

ASIA PACIFIC

CROSSES

AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP

DAY %

1.0488 1.6084 0.936 1.2949 82.36 7.9825 7.7501 6.2451 54.335 30.65 1.2218 29.092 40.941 9653 86.371 1.21197 0.80509 8.0884 10.3364 106.65 1.03

0.0572 0.2556 -0.1603 0.3099 -0.255 0 0 -0.0801 0.3129 -0.0326 0.0818 -0.0241 0.022 -0.2072 -0.2976 -0.4555 -0.0484 -0.4426 -0.3038 -0.5626 0

YTD %

(H) 52W

2.7329 3.4807 0.2244 -0.0926 -6.6173 0.2142 0.2232 0.799 -2.3374 2.9364 6.1221 4.0802 7.0809 -6.0499 -9.1917 0.3977 3.5151 0.5662 0.1509 -6.5541 0.0097

(L) 52W

1.0857 1.6309 0.9972 1.3487 84.18 8.0198 7.7864 6.3964 57.3275 32 1.3138 30.396 44.35 9752 88.637 1.23977 0.8506 8.4894 10.7712 111.44 1.0314

0.9582 1.5235 0.8931 1.2043 76.03 7.9823 7.7498 6.2105 48.6088 30.2 1.2152 28.914 40.795 8875 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029

MACAU RELATED STOCKS (H) 52W

(L) 52W

3.06

-2.547771

39.09091

3.32

2.16

2331991

CROWN LTD

10.16

-0.2944063

25.58714

10.34

7.92

1534159

18.65999985

AMAX HOLDINGS LT

0.066

-24.13793

0.119

0.055

5814500

66.84999847

BOC HONG KONG HO

23.7

-0.6289308

28.80435

17.46

13187148

CENTURY LEGEND

0.26

-7.142857

13.04348

0.335

0.204

684000

CHEUK NANG HLDGS

4.54

62.14286

4.55

2.5

214407

CHINA OVERSEAS

23.2

-0.4291845

78.93782

24.25

12.066

25714462

CHINESE ESTATES

11.8

-0.6734007

-5.6

13.26

8.3

58500

CHOW TAI FOOK JE

11.9

2.586207

-14.51149

15.16

8.4

4744450

EMPEROR ENTERTAI

1.68

-0.4149378

51.35135

1.82

0.99

1350000

FUTURE BRIGHT

1.18

4.424779

180.9524

1.43

0.38

2448000

GALAXY ENTERTAIN

28.15

-1.22807

97.68259

29.85

13.28

12089912

World Stock MarketS - Indices

NAME ARISTOCRAT LEISU

PRICE

DAY % YTD %

VOLUME CRNCY

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

13169.88

0.1121236

7.794685

13661.87

11735.19

NASDAQ COMPOSITE INDEX

2986.961

0.2995258

14.65601

3196.932

2518.01

HANG SENG BK

118.2

-0.5050505

28.26912

120

91.15

1098132

FTSE 100 INDEX

5916

-0.09507517

6.168395

5989.07

5229.76

HOPEWELL HLDGS

30.65

-1.605136

56.36034

31.6

19.049

1526313

DAX INDEX

7541.88

0.1455333

27.86423

7554.51

5637.53

HSBC HLDGS PLC

79.7

0.3146633

35.08475

80.3

57.05

7495947

HUTCHISON TELE H

3.52

4.142012

17.72575

3.88

2.84

9602041

LUK FOOK HLDGS I

24.1

2.465986

-11.07011

33.2

14.7

5294009

MELCO INTL DEVEL

8.4

-0.8264463

45.58059

8.48

5.12

3801030

NIKKEI 225

9525.32

-0.08842271

12.65436

10255.15

8238.96

HANG SENG INDEX

22323.94

0.2119702

21.09942

22393.19922

17821.51953

CSI 300 INDEX

2258.5

-0.5524327

-3.719162

2717.825

2102.135

MGM CHINA HOLDIN

13.74

-1.857143

43.24208

14.76

9.432

2996851

TAIWAN TAIEX INDEX

7613.69

0.05506275

7.658423

8170.72

6609.11

MIDLAND HOLDINGS

3.65

0.2747253

-7.689513

5.217

3.249

2220282

NEPTUNE GROUP

0.157

0.6410256

41.44144

0.222

0.084

1180000

NEW WORLD DEV

12.14

-0.8169935

93.92971

13.2

6.13

17453230

SANDS CHINA LTD

8019702

KOSPI INDEX

S&P/ASX 200 INDEX

1964.62

0.3678311

7.606779

2057.28

1750.6

4576.005

0.3961871

12.80504

4581.8

3985

4300.612

-0.0464137

12.52279

4381.746094

3635.283

FTSE Bursa Malaysia KLCI

1639.45

0.4472628

7.102492

1679.37

NZX ALL INDEX

870.702

-0.3070814

19.30689

PHILIPPINES ALL SHARE IX

3728.7

0.8740961

22.45159

JAKARTA COMPOSITE INDEX

13.6

17.4

85.8

NAME

Max 14.08

32.8

WTI CRUDE FUTURE Jan13

CORN FUTURE

38.6

CURRENCY EXCHANGE RATES

NAME

METALS

Last 38.9

SJM HOLDINGS LTD

Commodities ENERGY

Min 38.7

32.55

-0.610687

48.29157

33.95

20.35

SHUN HO RESOURCE

1.41

0.7142857

1.43

0.97

40000

1448.54

SHUN TAK HOLDING

4.09

-0.968523

59.82005

4.23

2.418

11124593

878.077

712.548

SJM HOLDINGS LTD

17.06

-1.273148

36.41958

18.36

11.973

3853124

3732.81

2965.32

SMARTONE TELECOM

14.36

0.2793296

6.845241

17.5

12.96

2452347

WYNN MACAU LTD

20.45

-2.850356

4.871795

25.5

14.62

13271275

ASIA ENTERTAINME

2.9

-0.3436426

-50.68027

7.24

2.4

261470

BALLY TECHNOLOGI

45.72

-0.9746589

15.57128

51.16

35.79

282424 14500

HSBC Dragon 300 Index Singapor

611.53

0.04

23.21

STOCK EXCH OF THAI INDEX

1339.18

0.3168658

30.61094

1344.82

1006.16

HO CHI MINH STOCK INDEX

389.37

0.6930616

10.75807

492.44

332.28

BOC HONG KONG HO

3.04

-0.6535948

26.81528

3.3

2.24

Laos Composite Index

1198.48

33.24438

1249.34

876.33

GALAXY ENTERTAIN

3.65

1.388889

95.18717

3.87

1.75

2500

INTL GAME TECH

14.37

-0.2083333

-16.45349

18.1

10.92

2910642

JONES LANG LASAL

82.46

0.9055311

34.6066

87.52

56.51

321264

LAS VEGAS SANDS

43.56

-0.2061856

8.529402

58.3216

32.6127

4842954

MELCO CROWN-ADR

15.2802

0.9927297

58.83784

16.02

8.32

3203219

MGM CHINA HOLDIN

1.82

52.72387

1.96

1.1917

1200

MGM RESORTS INTE

10.91

-0.1829826

4.602106

14.9401

8.83

6923015

SHFL ENTERTAINME

13.2

-0.6772009

12.62798

18.77

10.61

473461

SJM HOLDINGS LTD

2.25

39.96256

2.36

1.5484

10057

110.04

-0.1995284

6.214677

129.6589

84.4902

959675

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

WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily December 12, 2012

Opinion To end its insurgencies, Asia must look backward Pankaj Mishra

Bloomberg View columnist

frequently deploying the army to suppress disaffection across the Indonesian archipelago. More recently, Thailand’s former General Sonthi Boonyaratglin, who had been empowered by then Prime Minister Thaksin Shinawatra to crush the insurgency by Pattani Muslims, went on to lead a military coup against his civilian boss. In India-ruled Kashmir, the local military chiefs openly overrule the state’s elected chief minister. Even in countries with stronger traditions of civilian rule and electoral democracy, such as India and Sri Lanka, an authoritarian-minded nationalism has productively deployed ethnic and religious minorities as a foil.

Malaysia compromised

t wasn’t an incredible photo-op, and it’s unlikely to be included in this month’s valedictory roundup of 2012 highlights. In fact, it was barely reported. One of this year’s most remarkable events, however, was the agreement between the Philippine government and the insurgent group Moro Islamic Liberation Front. If successful, it may not only terminate decades of secessionist violence in Mindanao, the second largest island in the Philippines; it may also inspire hope in a wide swath of Asian countries damaged, politically as well as economically, by internecine conflicts. Divide-and-rule European imperialists, favouring one ethnic group and persecuting or neglecting another, or drawing arbitrary lines in the sand or the grass, originally transformed social and religious differences into political antagonisms within Asian societies. Their local opponents – mostly educated natives – hardened religious and ethnic identities by turning them into a basis of anti-imperialist solidarity.

Ethnic patchworks In the end, the principle of self-determination was widely exported from relatively homogenous Europe to

multicultural Asia, where it was embraced by rising native elites. The result was the proliferation of hastily and poorly imagined national communities – unwieldy nationstates where patchworks of relatively autonomous groups and individuals with multiple, overlapping identities had existed. Since then, postcolonial rulers eager to hold on to their inheritance – centralised states, administrations and large, resource-rich territories – have made the map of Asia bleed red. Tamils in Sri Lanka, the Pattani Muslims in Thailand, Baloch secessionists in Pakistan, Uighurs in China’s Xinjiang province, India’s Kashmiri Muslims and northeastern minorities – there is barely an Asian nationstate where centralising governments haven’t fought, often with brute military force, to hold down religious and ethnic minorities. The secessionists have occasionally succeeded, if after much horrific bloodshed, as in East Pakistan and East Timor. More often they have looked to be upholding doomed causes. But the tremendous strain of fighting them has had uniformly devastating results, whether in Indonesia, Thailand or Sri Lanka: an enhanced political and economic role for men in uniform, the

The agreement in the Philippines is a timely reminder of the much less fraught relationships that have existed and can exist … between majority and minority communities

diminishment of rule of law and the loss of civil liberties. The imperative to uphold territorial integrity turned the army into the most powerful institution early on in Pakistan, Indonesia and Myanmar, and set back prospects for democracy for decades. The Javanese leader Sukarno prepared his own demise by

Racial politics has deeply compromised Malaysia’s great potential. India’s Hindu nationalists rose to power on a programme of demonising Muslims. The more recent success of Sri Lanka’s Sinhalese strongman Mahinda Rajapaksa, the country’s president, confirms that in large parts of Asia, closely identifying your nation with its racial, religious and ethnic majority can still bring you huge electoral harvests. Fearing loss of likely support among Myanmar’s Buddhist majority, even Aung San Suu Kyi is reluctant to denounce the disenfranchisement of her country’s Rohingya Muslims. Her stance on the militarised state’s longstanding battles with the Kayin, Shan, Chin and Kayah minorities is not much clearer. Myanmar’s military ruler, Thein Sein, renewed ceasefires with these obdurate secessionists. But violence in Kachin State in the resourcerich north has worsened. It would be too optimistic to expect improvements as Myanmar’s economy is integrated into global networks of trade and finance. The promise of quick and great prosperity is likely to deepen, not heal, old divisions. Indeed, what look like ethnic and ancient hatreds often conceal very modern battles over precious resources – minerals and fossil fuels – in ethnicminority regions. Pakistan’s Baloch as well as

Myanmar’s Kachin separatists claim to fight for a fair share of benefits from the riches extracted from their lands. Furthermore, predatory war economies, from timber and prostitution rackets in Kashmir to gem smuggling on the ThaiMyanmar border, have struck deep roots in many Asian borderlands. Power here has long flowed out of gun barrels and, until the announcement of the peace accord in the Philippines in October, it wasn’t easy to see how this could change. Brokered by Malaysia, the deal between Manila and the Moro Islamic Liberation Front paves the way to radically enhanced autonomy for the Muslim-dominated southern region of Mindanao. Greater federalisation, which includes clear guarantees on the sharing of natural resources and land, cultural and religious rights, may also be the way out for countries that have frittered away too much national energy and resources in affirmations of sovereignty.

Diverse mosaic The agreement in the Philippines is a timely reminder of the much less fraught relationships that have existed and can exist between the periphery and the centre and between majority and minority communities. The European idea of the nation-state, realised after much horrific bloodshed in Europe itself, was always a poor fit for Asia’s diverse mosaic. Joseph Roth, who grew up in the multinational Hapsburg empire, was appalled by the imperatives of modern nationalism, according to which “every person must belong to a definite nationality or race” in order to be treated as an individual citizen. Roth, a Jew, suspected that members of minority groups, like himself, would be relegated to third-class citizenship, and vicious prejudice against them would be made respectable in the new nation-states built on the ruins of multinational empires. The ethnic cleansers of 20th century Europe proved him right. It required a monstrous crime and a repentant political imagination to institute peace between warring European nations and soften attitudes toward minorities. The battle against bigotry is far from over; Europe’s long and violent past today looms over its inevitably multicultural future. For Asian nations beset by their own present and potential ethnic cleansers, it is even more important to remember the relative youth of sectarian nationalism on the continent – and the long centuries when it did not exist. Bloomberg View

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December 12, 2012 business daily | 15

OPINION Business

wires Leading reports from Asia’s best business newspapers

Yomiuri Shimbun China’s imports from Japan for November dropped 15 percent from a year earlier, reflecting soured relations between the two nations, Chinese customs data showed. Japanese exports to China fell 10.2 percent in October, according to the data. China’s exports to Japan also dropped by 3.8 percent. The sluggish data followed a recent report that Japan’s direct investment in China plunged 32.3 percent in October. China’s overall exports in November increased 2.9 percent to US$179.4 billion, while imports levelled off at US$159.8 billion.

Korea Herald Motorola Mobility announced on Monday that it would withdraw most of its operations in Korea next year, in line with its global reorganisation programme. The Korean unit of the mobile handset maker said it was part of the restructuring that has been conducted by its U.S. headquarters. Company officials said Motorola was realigning research and development organisations globally to focus its strength on markets where it can compete most effectively. The company added that it would retain two business units in Korea.

Business Times Lender DBS Group Holdings’ Ltd acquisition of a 30 percent stake in a Singapore office tower for S$1 billion (US$818 million) shows that capital values and fundamentals of prime grade A office space will continue to hold up, said Credit Suisse. However, the acquisition also means that Suntec Real Estate Investment Trust is unlikely to acquire a stake in the office tower, which was initially expected by the market. “This means that Suntec’s future injection pipeline may be limited as Cheung Kong has no further assets in Singapore,” Credit Suisse said.

Jakarta Post The minority shareholders of Bumi Plc. will try to maintain the company’s existence and listing on the London Stock Exchange (LSE) by blocking the Bakrie Group’s plans to takeover one of its main assets, Jakarta-listed PT Berau Coal Energy, a source familiar with the matter was quoted as saying. Six existing minority shareholders holding combined voting rights of around 50 percent have agreed to keep Berau in Bumi Plc., the source said. “[The shareholders] only need 25 percent to block the Bakrie deal, as it is a class 1 transaction under U.K. law,” it added.

America’s political recession J. Bradford DeLong

Former deputy assistant secretary of the U.S. Treasury and Professor of Economics at the University of California at Berkeley

he odds are now about 36 percent that the United States will be in a recession next year. The reason is entirely political: partisan polarisation has reached levels never before seen, threatening to send the U.S. economy tumbling over the “fiscal cliff” – the automatic tax increases and spending cuts that will take effect at the beginning of 2013 unless Democrats and Republicans agree otherwise. More than a century ago, during the first Gilded Age, American politics was sharply polarised as well. In 1896, future President Theodore Roosevelt was a Republican attack dog. He denounced Democratic presidential candidate William Jennings Bryan as a mere puppet of the sinister governor of Illinois, John Peter Altgeld. Bryan, Roosevelt said, “would be as clay in the hands of the potter under the astute control of the ambitious and unscrupulous Illinois communist.” The “free coinage of silver” would be “but a step towards the general socialism which is the fundamental doctrine of his political belief.” He and Altgeld “seek to overturn t h e . . . essential policies which have controlled the government since its foundation.” S u c h language is as extreme as any we hear today – and from a man who was shortly to become Vice President (and later President, following the assassination of William McKinley). We have heard Texas Governor Rick Perry call obliquely for the lynching of his fellow Republican, Federal Reserve Chairman Ben Bernanke, should he come to the Lone Star State. And we have seen Kansas Secretary of State Kris Kobach explore the possibility of removing President Barack Obama from the ballot in Kansas, because, Kobach suggested, Obama is “not a natural-born citizen.”

coalition, trying either to yoke the two forces together or to tack back and forth between them to achieve legislative and policy goals. Obama broadly follows Ronald Reagan’s (secondterm) security policy, George H.W. Bush’s spending policy, Bill Clinton’s tax policy, the bipartisan Squam Lake Group’s financial-regulatory policy, Perry’s immigration policy, John McCain’s climate-change policy, and Mitt Romney’s health-care policy (at least when Romney was governor of Massachusetts). And yet he has gotten next to no Republicans to support their own policies. Indeed, like Clinton before him, Obama has been unable to get Republican senators like Susan Collins to vote for her own campaign-finance policies, McCain to vote for his own climate-change policy, and – most laughably – Romney to support his own health-care plan. Likewise, he has been unable to get Republican Vice-Presidential candidate Paul Ryan to endorse his own Medicare cost-control proposals. T h e r e are obvious reasons for this. A large chunk of the Republican b a s e , including many of the party’s l a r g e s t d o n o r s , believes that any Democratic president is an illegitimate enemy of America, so that whatever such an incumbent proposes must be wrong and thus should be thwarted. And the Republican cadres believe this of Obama even more than they believed it of Clinton.

It seems to me that the odds are around 60 percent that real negotiation will not begin until tax rates go up on January 1

Policy goals But neither Perry nor Kobach is likely ever to be a U.S. president, whereas Theodore Roosevelt was more than a partisan. He was happy to make deals with Democrats – to put himself at the head not just of the Republican Party but of the bipartisan Progressive

President, the Republicans remain in control of the House of Representatives, and the Democrats control the Senate. Now, it is possible that Republican legislators may rebel against their leaders, arguing that they ran for office to govern, not to paralyse the government in the hope that doing so will give the party power to reign as it wishes after the next election. It is possible that Republican leaders like Representatives John Boehner and Eric Cantor and Senator Mitch McConnell will conclude that their policy of obstruction has been a failure. They might note that, although the economy remains deeply troubled and depressed in the aftermath of a financial crisis for which they set the stage, Obama’s policies have been by far the most successful of those in any major advanced

country, and conclude that he has been a relatively good president, and one worth supporting. But don’t count on it. Right now, every senior politician in America is telling their favourites in the press that they are confident that compromise on the “fiscal cliff” will be reached before the end of December. But they are telling their favourites this because they think that pessimism now will lead to their being blamed for gridlock later. It seems to me that the odds are around 60 percent that real negotiation will not begin until tax rates go up on January 1. And it seems to me that, if gridlock continues into 2013, the odds are 60 percent that it will tip the U.S. back into recession. Let us hope that it will be short and shallow. © Project Syndicate

Recession risks This view clearly influences Republican office-holders, who fear the partisan beast that mans their campaigns’ phone banks and holds the purse strings. Moreover, ever since Clinton’s election in 1992, those at the head of the Republican Party have believed that creating gridlock whenever a Democrat is in the White House, and thus demonstrating the government’s incapacity to act, is their best path to electoral success. That was the Republicans’ calculation in 2011-2012. And November’s election did not change the balance of power anywhere in the American government: Obama remains

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business daily December 12, 2012

CLOSING EU revamps patent registration

Berlusconi effect rattles markets

A system that made patent registration up to 60 times more expensive in Europe than in China is being scrapped in favour of a one-size-fits-all panEuropean process, EU officials said. Signing off on a plan first considered in 1973, 25 of the EU’s 27 industry ministers – apart from Spain and Italy – agreed to allow inventors to register their idea with one EU agency. The patent office will be split among Berlin, Paris and London. Under the previous system, patents had to be registered separately in individual EU countries – up to 27 times to cover the whole EU.

Former Italian Prime Minister Silvio Berlusconi rattled bond markets with a comeback bid that put the politics of budget rigor up for review and boosted speculation that the 2013 vote will yield a weak government. Goldman Sachs Group Inc. told clients to expect further gains in Italian risk premiums, while IHS Global Insight said political weakness may force Italy to request a European bailout. Berlusconi’s entry into the campaign, 13 months after his ouster, precipitated Prime Minister Mario Monti to announce his resignation. Mr Monti said that the market reaction to his resignation would be “contained”.

HSBC agrees US$1.9 bln U.S. penalties British-based bank fined for money laundering

HSBC has admitted its money laundering controls have been too lax

SBC Holdings Plc has agreed to pay US$1.92 billion to settle a multiyear U.S. criminal probe into money-laundering lapses at the British lender, the largest penalty

ever paid by a bank. HSBC admitted to a breakdown of controls and apologised in a statement yesterday announcing it had reached a deferredprosecution agreement with the

U.S. Department of Justice. “We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organisation from the one that made those mistakes,” said chief executive Stuart Gulliver. “Over the last two years, under new senior leadership, we have been taking concrete steps to put right what went wrong and to participate actively with government authorities in bringing to light and addressing these matters.” The bank said it expected to also reach a settlement with British watchdog the Financial Services Authority. U.S. and European banks have now agreed to settlements with U.S. regulators totalling some US$5 billion in recent years on charges they violated U.S. sanctions and failed to police illicit transactions. No bank or bank executives, however, have been indicted as prosecutors have instead utilised deferred prosecutions. HSBC’s settlement also includes agreements or consent orders with

Asia ‘set to eclipse’ U.S., EU by 2030

the Manhattan district attorney, the Federal Reserve and three U.S. Treasury Department units: the Office of Foreign Assets Control, the Comptroller of the Currency and the Financial Crimes Enforcement Network. HSBC said it would pay US$1.921 billion, continue to cooperate fully with regulatory and law enforcement authorities and take further action to strengthen its compliance policies and procedures. U.S. prosecutors have agreed to defer or forgo prosecution. The settlement is the third time in a decade that HSBC has been penalised for lax controls and ordered by U.S. authorities to better monitor suspicious transactions. Directives by regulators to improve oversight came in 2003 and again in 2010. HSBC’s settlement comes a day after rival British bank Standard Chartered Plc agreed to a US$327 million settlement with U.S. law enforcement agencies for sanctions violations, a pact that follows a US$340 million settlement the bank reached with the New York bank regulator in August. Reuters

The report says it does not believe China will become a superpower like the U.S.

China’s economy likely to surpass U.S. before that

ew technologies, dwindling resources and explosive population growth in the next 18 years will alter the global balance of power and trigger radical economic and political changes at a speed unprecedented in modern history, says a new report by the U.S. intelligence community. The 140-page report released on Monday by the National Intelligence Council lays out dangers and opportunities for nations, economies, investors, political systems and leaders due to four “megatrends” that government intelligence analysts say are transforming the world. Those major trends are the end of U.S. global dominance, the rising power of individuals against states,

a rising middle class whose demands challenge governments, and a Gordian knot of water, food and energy shortages, according to the analysts. “We are at a critical juncture in human history, which could lead to widely contrasting futures,” Council chairman Christopher Kojm wrote in the report. Leading the list of the “gamechangers” – factors the report says will shape the impact of the megatrends – is the “crisis-prone” global economy, which is vulnerable to international shocks and to disparities among national economies moving at significantly different speeds. The report reflects the consensus judgments of all 16 U.S. intelligence agencies, who consulted or contracted

with academics, research institutes, political leaders and corporations in 14 countries and the European Union.

Asia rising At the same time, power will shift from North America and Europe to an Asia with GDP, population, military spending and technological investment that will surpass the West’s, the report projects. China will surpass the U.S. economically a few years before 2030, and regional players such as Colombia, India, Nigeria and Turkey will become increasingly important to the global economy. The U.S. role in this new world order is hard to predict because the degree

to which it continues to dominate the international system could vary widely, according to the report. “The ’unipolar’ moment is over and Pax Americana – the era of American ascendancy in international politics that began in 1945 – is fast winding down,” the report says. Despite that, the U.S. most likely will remain “first among equals” in 2030, the report says. The U.S. will remain the only power “that can really orchestrate these coalitions, including non-state actors and state actors, to really manage, deal with these huge challenges and changes” the world faces, NIC Counselor Mathew Burrows, the report’s principle author, said. Bloomberg News