Year I Number 187 Thursday December 20, 2012 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP $ 6.00 www.macaubusinessdaily.com
Retail sales to From handover cents double by 2015 to 21st century riches O
n this day in 1999 when the curtain fell on several centuries of Portuguese administration, the economic prospects of the territory seemed bleak. Few imagined that 13 years later the city’s economy would have grown six-fold, ditched its manufacturing industry and fully embraced the services sector.
But experts point out Macau’s current boom has also had major challenges, including a property bubble and high inflation. In addition, local companies remain wary of entering the door opened by economic integration with the Chinese motherland.
I SSN 2226-8294
HANG SENG INDEX 22673
22652
22631
Galaxy to ‘supersize’ Cotai
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22610
22590
December 19
HSI - Movers Name
%Day
WHARF HLDG
3.98
CHINA SHENHUA-H
3.22
CHINA MERCHANT
2.65
CHINA RES POWER
2.01
LI & FUNG LTD
1.78
AIA GROUP LTD
-0.65
CLP HLDGS LTD
-0.77
PING AN INSURA-H
-0.79
POWER ASSETS HOL
-1.14
ESPRIT HLDGS
-4.45
City gets first ever urban planning law
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Source: Bloomberg
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Inflation up again on fuel, food hikes
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Dawn of a global gaming capital Interview Lionel Leong Integration key to nurturing talents More on pages 2, 3, 4 & 6
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business daily December 20, 2012
macau
Tourists enjoy bright lights while prices hit public hard Macau has reinvented itself but its economic resurgence has been tarnished by criticisms about the cost of living Vítor Quintã
vitorquinta@macaubusinessdaily.com
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efore the handover, people were emigrating to Portugal or elsewhere. They were worried Beijing would ignore its pledge to keep the status quo for 50 years and that the city would become unrecognisable. In the 13 years since, the city has expanded, gained new districts – including the Cotai Strip – and for many changed beyond recognition. But it was the economy, not politics, that transformed the city. The end of World Trade Organisation quotas in 2005 doomed the dominant manufacturing sector, whose output had shrunk more than 41 percent to 9.3 billion patacas by last year. As textile and garment factories closed, exports were hit badly, and these fell by more than 60 percent to less than 7 billion patacas last year. Even this figure is inflated by 4.6 billion patacas of re-exports, as the city increasingly plays the role
of trade middleman, not producer. “There was a total annihilation of the exporting manufacturing sector, with many firms moving to mainland China. The secondary sector shrank heavily, with the exception of the construction industry, and the economy became even more reliant on services,” economist José Sales Marques told Business Daily. The handover and then the Mainland and Macau Closer Economic Partnership Arrangement, implemented in 2004, have completely changed the city’s export market. Hong Kong took more than half of all exports in the first 10 months of this year. The mainland bought 16.5 percent, with the United States and European Union purchasing 10 percent. A more diverse manufacturing sector has emerged to serve the growing number of tourists, with food products coming to the fore, mainly
Chinese bakery products. Meanwhile, imports have soared by more than 400 percent to 58.2 billion patacas. They are dominated by consumer goods such as gold jewellery and watches to supply the city’s booming shops. With Macau becoming a centre for luxury shopping, the percentage of imports from the European Union has almost doubled to 25 percent of the total, and is second only to the mainland, at 30.7 percent.
Living costs The days of trade surpluses are long gone and up until the end of October, the territory had this year racked up a deficit of 51.4 billion patacas. However, the money flows created by the gaming industry have been more than enough to offset the shortfall in the balance of trade. The city’s gross domestic product,
or wealth creation, rose by almost six times to more than 292 billion patacas last year – more than oilrich Libya. “[The turnaround] was absolutely extraordinary. I can’t recall any similar case in recent history,” Mr Sales Marques said. The economic revival attracted new immigrants and the return of many who left before the handover, pushing the labour force to a record high 353,300 in October. The additional workers – including non-residents, who account for onethird of the workforce – has not met demand, with the unemployment rate of 1.9 percent currently the world’s third-lowest. The gaming industry is now the biggest employer, accounting for onequarter of all workers, followed by hotels, restaurants and retail. With gross domestic product per capita growing five-fold to 537,993 patacas last year, incomes have also
A city turned The handover came as the city was entering a fierce economic downturn Vítor Quintã
vitorquinta@macaubusinessdaily.com
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s Macau wrapped up centuries of Portuguese administration 13 years ago this week, its economic prospects looked bleak. The city’s gross domestic product, a measure of wealth creation, stood at a paltry 49.2 billion patacas (US$6.2 billion) in 1999 – the current size of Rwanda’s economy – and was
In 1999 Macau was undergoing an economic recession
Red tape, small scale limit CEPA benefits Macau firms lack ambition to invest in China but the conditions don’t help either Vítor Quintã
vitorquinta@macaubusinessdaily.com
A
new supplement to the Closer Economic Partnership Arrangement, or CEPA, between Macau and the mainland comes into effect next month. But the government and a commercial lawyer say complex bureaucracy, along with a lack of ambition and resources, has
diminished the benefits of the freetrade-like agreement. CEPA provides “an unprecedented opportunity for its [Macau’s] economic integration with the mainland,” the Economic Services Bureau said in a written reply to questions from Business Daily. Carlos Simões, a partner at commercial law specialists DSL Lawyers, agrees, but with caveats. “From a formal point of view, CEPA has everything you need. But this is an instrument that offers only a small competitive advantage. It is
not a solution for everything,” Mr Simões said. He told Business Daily the deal had not been exploited to its fullest by Macau businesses. The number of requests for service supplier certification, which provides firms with easier access to mainland markets, remains low and many certificates are not used to develop businesses in the mainland. Lacklustre outcomes are mostly due to a lack of initiative by Macau businessmen, who view the mainland as “a difficult and complex market”,
says Mr Simões. The government has admitted that the “majority of Macau companies lack the necessary knowledge, expertise and know-how to run [a] business in the mainland”. Most firms are too small and have “relatively limited” working capital and resources, the Economic Services Bureau said. Many “do not meet the market access thresholds imposed by the mainland’s legislation”. “Laws and regulations, as well as the tax system, are relatively complex, in addition to the relatively high costs
December 20, 2012 business daily | 3
MACAU KEY POINTS Manufacturing shrank by 41 percent since 1999 A small trade surplus has turned into huge deficit Import fuelled by growth of luxury retail trade Value of property deals rose 12-fold since handover
The city has fully embraced the services sector since the handover
soared as well, with the median wage reaching 11,700 patacas in the last quarter. However, money is not buying happiness, with high levels of inflation – 6.8 percent in January – and sky-high housing prices blamed for a 0.4 point decline in this year’s annual happiness survey, to 71.2. In the first three quarters of this year, there were 18,200 property transactions with a value of 69.7 billion patacas – 12 times as great as
in 1999 – mostly fuelled by demand from immigrants. There were also negative consequences, says Mr Sales Marques. “This helped inflate the estate bubble, the effects of which we are still feeling,” he said. With more investment and companies coming into the city, office and shop transactions have grown and now account for more than one-third of all deals. This has done little to cool the
upside down shrinking by a worrying 2.9 percent. “The economic outlook was bad. We were living through a recession,” economist José Sales Marques told Business Daily. Instability caused by a vicious triad war and the impact of the 1997 Asian Crisis were partly to blame, but Mr Sales Marques believes the main cause for the decline was a demise of the city’s economic model. It might be difficult to imagine now, but manufacturing was then Macau’s dominant industrial sector. Revenue from textile and garment production reached 15.8 billion patacas in 1999, accounting for a staggering 83.8 percent of all exports. But the sector was already on a downward spiral after reaching its peak in the 1980s, according to Mr Sales Marques. World Trade Organisation quotas, which ended on December 31, 2004,
to invest,” the bureau said. “The red-tape burden is very heavy but CEPA cannot solve that,” Mr Simões said. “And in the minds of Macau businessmen the difficulties seem even greater.” He said some companies faced hurdles in diversifying, recruiting workers and finding office space in Macau, so “it’s tricky to persuade them to seek opportunities in China”. The government’s Economic Services Bureau also said most firms have their hands full, especially those trying to keep up with the rapid growth of the tourism sector. “This has resulted in an accelerated development of Macau’s service industries, including convention and exhibition facilities, hotels, retail centres and food and beverage outlets,” the bureau says.
had created a niche for Macau goods. About 47 percent of exports went to the United States and one-third to the European Union. The city even had a trade surplus, importing just 16.3-billion-patacas worth of goods. More than half of these were raw materials needed to feed the garment factories. Manufacturing was the biggest employer, accounting for more than 20 percent of the 209,400-strong workforce and just 9 percent were employed in gaming. The unemployment rate was 6.3 percent, due to a slowdown in the property market that had kept developers away and hit the construction industry hard.
Capital flight In 1999, there were just more than 11,000 property transactions worth
over-heated housing market, with the average price per square metre reaching 58,912 patacas in October – seven times as much as in 2004. The impact has been felt most by low-income groups, which are increasingly aware of a growing wealth gap, Mr Sales Marques said. He said Macau currently has a higher Gini coefficient, a measure of the concentration of wealth, than in 1999. The territory’s Gini dropped
from 0.45 in 1998-1999 to 0.37 in 2007-2008, the last time it was published. “Macau could be an extremely interesting case study as a very liberal economy but with some conservative policies for some sectors,” Mr Sales Marque says. “On the one hand, the economy is very open and vulnerable to outside influences. On the other, there are many sectors protected by monopolies.”
5.9 billion patacas, with residential deals accounting for about 89 percent of the total. More than one-fifth of construction workers lost their jobs in the year as the number of new building projects
fell for a fifth consecutive year to 55. As the handover approached, the median monthly wage had also shrunk for a second consecutive year to less than 5,000 patacas, while deflation hit a remarkable 3.2 percent. The situation would only get worse. The jobless rate reached a peak of 7.1 percent in June 2000, sparking demonstrations against the government. The median wage fell for a further two years and deflation would last until 2004, the year The Sands Macao opened. It was the city’s first casino established by an American-based operator. In 1999, the prospect of somebody investing US$265 million in a single project in the territory would have seemed a far-fetched dream. Until the opening of the gaming market, Mr Sales Marques said Macau “had failed to catch the attention of major international investors”. “Macau’s economy was parochial. It had a very small scale.”
MOP32.7 bln Fall in banks’ assets between 1998 and 1999
Few Macau firms have asked for a service supplier certification to mainland China
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business daily December 20, 2012
macau The 2003 launch of individual visas for mainland Chinese fuelled a hike in tourist arrivals
A casino capital is born Macau has left Las Vegas in the dust to become world’s biggest gaming hub Vítor Quintã
vitorquinta@macaubusinessdaily.com
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he way Macau has changed in the 13 years since the handover far surpassed anyone’s expectations and a lot of that is due to the opening of the gaming market. In 1999 the city was known as the ‘Monte Carlo of Asia’ thanks to its 11 casinos, which have now more than tripled to 35, starting with the liberalisation of the gaming market in 2002. “At the time [1999], there were already many voices saying gaming should be handled differently, with a more international outlook,” economist José Sales Marques told Business Daily. But, he added, it was obvious that “the internal structure of the sector,” under the monopoly of tycoon Stanley Ho Hung Sun, was not ready. The arrival of five more operators, including three U.S.-controlled firms, changed the game and led to an incredible hike in casino revenue. In 1999 gaming turnover was just 1.5 billion patacas (US$187.9 million) and falling. Up to November this year it has reached 275.9 billion patacas. The major reason behind this boom was the launch of individual visas for mainland Chinese visitors in July 2003. “The reason behind the introduction of the individual visa was to help the two regions [Macau and Hong Kong]. It was meant to be a gradual process but it grew much faster than expected,” Mr Sales Marques told Business Daily. In the last year of the Portuguese Administration, Macau received 7.4 million visitors. In the first 10 months of 2012 the number of visitors alone has reached 23.2 million, on course to overtake the 28 million recorded last year. “Without the special visa policy,
the visitor numbers to Macau would not hit the peak we see right now,” Chan Chi Kit, president of Macau Hoteliers and Innkeepers Association, told Business Daily The most direct beneficiary of the casino growth was the government coffers. In 1999 gaming tax revenue was under 5.5 billion patacas. In the January to November period this year direct gaming taxes amounted to 98.1 billion patacas – a 1,684 percent increase. With more money flowing in, the public budget has grown ten-fold, from 12.3 billion patacas to 123 billion patacas.
guesthouse accommodation. Immediately before the handover, the average occupancy rate was at a lowly 53.7 percent for the 9,000 available rooms. The hotel sector was experiencing “its darkest period because of the security problems [linked to a triad war], and the room rates were at its lowest level, said Chan Chi Kit. In the past 13 years a further 25 hotels and guesthouses opened their doors, taking the total rooms on offer above 26,000, but the occupancy rate soared to 84 percent.
Retail boom But other sectors also reaped the benefits from the increased number of visitors coming to Macau, namely the city’s hotels and restaurants. Since 1999 the number of restaurants increased by a third to 1,660 at the end of last year. And their staff almost doubled to more than 21,200. The extra hands were needed to deal with the additional business, as meal sales grew more than fourfold to 6.1 billion patacas. “In 1999 business was not great but it was stable. Restaurants earn more now but it’s harder to sustain due to acute shortage of staff,” Lei U Weng, director of United Association of Food and Beverage Merchants, told Business Daily. Chan Wing Lam, president of Traders Association of Macau Good Cuisine, was more pessimistic. “For smaller restaurants the profit earned now is actually lower than 1999” due to soaring costs from imported food and rents, he added. Growth was even more impressive when it comes to Macau’s hotel and
Changes 1999-2012
18,393 % Increase in gaming revenue
1,000 % Increase in government revenue
25
New hotels and guesthouses
With more visitors and a significant portion staying at least one night, the number of hotel workers rose five-fold to over 33,000 and hotel revenue increased 14-times to almost 18.8 billion patacas. “Aside from casino, hotel is the biggest sector, even above retail, because it involves such a big variety of jobs and has a large employment size,” Mr Chan said. But the average length of stay has actually fallen since 1999. In the January-October period it was down to a modest 1.39 nights. Still, says Mr Sales Marques, “there was also a qualitative change, as visitors’ spending is now much higher. That has benefited the sectors related to gaming, namely retail”. Macau’s lack of a retail tax compared to China’s roughly 30 percent luxury tax – coupled with the individual visa scheme – brought a windfall from shoppers. In 2000, the first year in which official data on the retail sector was compiled, sales were a mere 4.6 billion patacas, led by goods in department stores. In the first three quarters of 2012 retail sales have already hit almost 38.5 billion patacas, up 24 percent year-on-year. The biggest slice, close to 11.7 billion patacas, went to watches, clocks and jewellery. “In the past, the major market was tourist tours from Japan, Korea, and South-east Asian… But now over 80 percent of the business comes from mainland visitors,” the Macau Goldsmith’s Guild said. The association also said in a written reply to Business Daily that more jewellery brands had entered the city’s market, raising the industry’s standards. With Stephanie Lai/Tony Lai
December 20, 2012 business daily | 5
MACAU
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Speed up diversity by fostering talent Regional cooperation can produce the professionals needed to fuel the city’s growth, says Lionel Leong Vai Tac, a member of the government’s top advisory body, but gaming will continue to drive economic growth as diversification is a long-term process Tony Lai
tony.lai@macaubusinessdaily.com
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he city requires “multi-skilled talent” to diversify and sustain the economy, says Executive Council member Lionel Leong Vai Tac. The businessman and government adviser told Business Daily that even with increased cooperation with the mainland, economic diversification will not come easily. “There is no doubt over economic diversification as a direction. But we should not be ashamed of relying on the gaming industry for economic growth,” Mr Leong said. “Can you find another industry at this moment which can do better?” The key was to put revenue aside for future development, he said. “We should take a careful approach not to disturb the sound development of the leading industry. Many social welfare [policies] depend on its revenue.” The government predicts that taxes on gaming will raise 100 billion patacas (US$12.5 billion) next year, accounting for 78 percent of its revenue. Social welfare spending is set to reach 18.1 billion patacas, up 22 percent on this year’s figure. “We aim for an appropriate diversification, not an absolute one. This will prepare for any downturn of the leading industry or the economy,” he said. Mr Leong did not identify what other industries the city could rely on and said it should work on goals set by Beijing. Last month’s National Congress reinforced the goal for Macau of becoming a global leisure and tourism destination.
terms of qualified talents”. “Frontline staff in service industries lag behind the city’s rapid development when it comes to knowledge and language skills,” he said. More training was required to “make the gap thinner”. The city’s workers, particularly the younger generation, should be trained to adapt to a variety of industries for diversification to succeed. “I’m not worried the [economic] transformation might not be completed or the economy might not pick up after a decline. But
We should take a careful approach not to disturb the sound development of the leading industry
Training base Mr Leong says Macau already is well equipped to achieve the ambition but that it still “lacks soft power in
More and better trained professionals are essential to promote economic diversification, says Lionel Leong Vai Tac
are there enough professionals or enough capital to enable us to do so?” Mr Leong said. The Macau deputy to the National People’s Congress stressed it was also important to make the most of regional cooperation, suggesting that the mainland become a training base. “If Macau currently lacks some industries for nurturing certain professionals, [we should] encourage them to start their career in other places in China.” Mainland destinations for cooperation should not be limited
to special regions developed in cooperation with Macau, such as Hengqin Island or the Nansha New Area of Guangdong. “The administration could provide information to people on the different policies and future directions of the mainland cities,” he said, adding that this would lead to more informed decisions. Apart from the labour force, a stable public finance strategy is required to generate the reserves needed for the city’s future development.
SMEs must take lead on Hengqin: Leong Instead of waiting for policies to encourage investment in Hengqin, firms must grasp the initiative, says Lionel Leong
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he city’s small and medium enterprises must be proactive in putting forward proposals to the government on the development of Hengqin Island, rather than sitting on their hands, says Lionel Leong Vai Tac. “Many people are now fighting for different things” as Hengqin develops, the Executive Council member told Business Daily. Soon after he became the Communist Party secretary-general earlier this year, Xi Jinping also
stressed the link between Hengqin’s and Macau’s development in a visit to the island. The city’s small companies have been asking for a better blueprint of the island’s planned development. Mr Leong is a Macau deputy to the National People’s Congress but says he does not “have a crystal ball” to predict the details or project timetable. Progress is not the sole responsibility of the city’s officials but also depends on bilateral talks with officials from Guangdong.
Small enterprises have repeatedly said they want the government to offer more information and incentives about developments on Hengqin. “In the best possible scenario we hope this can happen. If not, they [SMEs] surely need to voice [their demands],” he said. He said businesses should proactively seek policies and measures that “fit them the best,” not only for Hengqin’s development but also on other issues, including the Mainland and Macau Closer Economic
Partnership Arrangement. “Instead of waiting for policies that luckily suit them, they should approach it the other way round,” Mr Leong said. “How many SMEs have carefully read the policies of the central government or Macau’s Policy Address. How many SMEs have suggested ideas to the government?”
Mr Leong said the government should always “keep an open ear” for companies’ concerns.
T.L.
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business daily December 20, 2012
macau
Galaxy ‘supersizes’ its Cotai resort plans A third phase next door to Galaxy Macau will be 50 pct bigger Michael Grimes
michael.grimes@macaubusinessdaily.com
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alaxy Entertainment Gr oup Ltd’s aggre ssive approach to expanding its Cotai resort facilities is based on senior management’s belief the VIP gambling market will come back strongly in the next few years following China’s leadership transition, industry sources have told Business Daily. On Tuesday Francis Lui Yiu Tung, group vice-chairman, informed the Chinese-language press the company would spend up to HK$50 billion (US$6.5 billion) to start building a third phase of Galaxy’s casino and leisure offer on Cotai. It will be next door to, but physically separate from, the firm’s existing Cotai property Galaxy Macau and might have different branding, Business Daily has been told. Building is likely to start before the end of 2013, said Mr Lui. Galaxy Macau Phase 1 cost HK$16.5 billion and opened with 450 tables in May 2011. The still under construction Phase 2 will cost HK$16 billion and have 500 gaming tables. It’s due to be ready in mid-2015. The ‘third phase’ is really a third and fourth phase that will spend 54 percent more than Phase 1 and 2 combined to get just 1,100 tables
in return, sources have told the newspaper. “Slowly the rates of return on Macau casino projects are all getting regulated down by the government,” a senior industry executive told Business Daily. “When The Venetian was built, they [Las Vegas Sands Corp.] got around 770 tables and they spent US$2 billion plus. When Wynn announced their Cotai project, they said they would spend US$2.5 billion, then increased that to US$3.5 billion – for 600 tables. And now Galaxy says this week ‘For 1,000 tables we’re spending US$6 billion’. The issue is whether the annual rates of return on these projects stay in the 40s of percent or whether they fall to 20 percent. That’s what investors aren’t currently pricing in.”
Multi-stage The ‘third phase’ of Galaxy’s Cotai venture is so big it will be completed in stages between 2016 and 2018 said the company in an e-mailed statement. Once finished it will be 50 percent bigger than Galaxy Macau Phases 1 and 2 combined said a person familiar with the situation. The third phase will have up to 4,500 hotel rooms (compared to
Galaxy’s Francis Lui
Phase 1 and 2’s combined inventory of 3,500) and 1.3 million square feet of retail space, as well as an arena – as Business Daily exclusively reported on October 31. Galaxy said in the e-mail that Galaxy Macau Phase 2 and the third Cotai phase will be funded from cash
reserves and cash flow with some debt if necessary. As of September 30, Galaxy had cash on hand of HK$12.6 billion, the firm said. Investors in Hong Kong yesterday gave a cautious welcome to Mr Lui’s announcement. GEG stock closed 1.02 percent up at HK$29.75.
Esprit sees loss amid efforts to rebuild brand Shares hit month low after profit warning
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hares of Esprit Holdings Ltd fell nearly 7 percent to a one-month low yesterday after the Europefocused retailer warned of a possible loss for the six months ending in December, triggering a raft of broker downgrades. The stock ended 4.45 percent lower at HK$11.16 (US$1.44). The clothing retailer currently has three stores in Macau. The retailer saw sales at its three local stores grow by 9.2 percent to HK$106 million in the year ended June 2012, according to a previous filing to the Hong Kong Stock Exchange. The company’s Macau operations recorded wholesale turnover of HK$477 million, up by 2.6 percent yearon-year. Esprit, which competes with Swedish clothing retailer Hennes & Mauritz AB and Spain’s Inditex, has been hit by weak demand in the euro zone and launched a four-year turnaround plan to revive its brand in late 2011. But more than a year into
its US$2.3 billion restructuring drive, Esprit, which sells everything from bed sheets to jeans, is still not showing progress, analysts said. “The turnaround is still looking very difficult,” said Gloria Tsuen of CIMB Research. “Esprit has a revamped management team. It has a decent plan but it still doesn’t have the products to get people back into the stores.” Morgan Stanley and JP Morgan downgraded the stock to “Underweight” from “Equal Weight” and “Neutral”, respectively, after Esprit said it may post a loss for the sixmonth period due to weakerthen-expected operating results. Morgan Stanley also revised down its earnings forecast for Esprit for the year ending in June 2013 to a net loss of HK$144 million from a profit of HK$695 million, and cut its profit forecast by 61 percent to HK$576 million for the following financial year. T.A./Reuters
December 20, 2012 business daily | 9
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business daily December 20, 2012
macau
First step for urban planning system Macau’s urban planning law, first announced four years ago, is finally ready Stephanie Lai
sw.lai@macaubusinessdaily.com
City never had urban planning system, even during Portuguese administration (Photo: Manuel Cardoso)
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he first step for the longawaited urban planning system has been taken, as the Executive Council has finished discussing the basic legal framework structuring Macau’s land use. The bill will be delivered to the Legislative Assembly this week, council spokesman Leong Heng Teng told media yesterday. The law would create an advisory body, the urban planning council, to discuss where to build public facilities and review urban plans, as well as the impact of major development projects. “The council will consist of over 40 members, over half of which are professionals and other
representatives from social groups,” said Mr Leong. “The rest would be government representatives.” The members of the advisory body will be required to stay out of any discussion about projects in which they are an interested party, the spokesman noted. Mr Leong added that the government has not ruled out the possibility of the council holding decision powers in the future. The Land, Public Works and Transport Bureau will draft Macau’s urban plans. They will require approval from the chief executive but not from legislators. “There will be a master plan, providing strategic guidelines like
Li Gang named new liaison deputy head
L
i Gang is the new deputy director of the Central People’s Government Liaison Office in Macau, the China’s State Council announced yesterday. Mr Li, 57, served nine years in the liaison office in Hong Kong also as deputy head, a position
from which he had stepped down on Tuesday. His new appointment comes as no surprise. Hong Kong newspaper South China Morning Post quoted sources saying he would replace Bai Zhijian as the head of the liaison office in
mapping infrastructures and other public facilities,” said Mr Leong. “Meanwhile there will be detailed plans that lay down the land use regulations, such as the plot ratio [ratio of floor area to plot size] and heights.” All urban plans have to observe the laws on cultural heritage protection and renovation of old neighbourhoods. The latter two topics are being discussed at the assembly. “The master plan will be reviewed five years after its implementation,” said Mr Leong. The bill names three basic categories of land: developed urban areas, areas that can be developed; and areas that cannot be developed.
“We are referring to the natural landscapes, sites that contain cultural heritage or archaeological values,” said Lao Iong, head of the Public Works Bureau’s Urban Planning Department. The street alignment plan of a project, which determines construction areas, heights and storey limits, will be valid for one year and be amended or abolished when in conflict with urban plans. When that happens, private project owners will have the right to request compensation, or even appeal to the Public Prosecutions Office or the Commission against Corruption. Urban planning violations will incur a fine between 25,000 patacas (US$3,100) to two million patacas.
Macau after the Legislative Assembly elections next year. The liaison office declined to comment on the issue. Mr Bai hinted to reporters last week that he might leave the position he had occupied for over a decade, after stepping down from the party’s central committee last month due to his age. The director, 64, said in a statement released yesterday that Macau should strive for “scientific planning on future development,” including urban planning, traffic, old neighbourhood regeneration and
social welfare. A note of the 13th anniversary of Macau’s handover also mentions the recent rapid development could cause “contradictions and problems” in the society. Mr Bai thinks the ultimate solution is to “focus on the economic development to improve [people’s] livelihood”. Macau should also emphasise cultivating talents and strictly follow the ‘one country, two systems’ principle, he added. T.L.
December 20, 2012 business daily | 11
MACAU
Inflation creeping up again in November Follows two months of year-on-year falls in CPI Michael Grimes
michael.grimes@macaubusinessdaily.com
T
he Composite Consumer Price Index for November 2012 increased by 5.72 percent year-on-year, according to data released yesterday by the Statistics and Census Service. After two months of falling inflation in September and October – when judged year-on-year – the rate is creeping up again. In September the Composite CPI expanded by 5.69 percent – the lowest percentage increase year-onyear since June 2011. In October it decelerated to 5.19 percent. While rising inflation can often be an indication of rising economic activity, hefty double digit increases
in the cost of liquefied petroleum gas and beef have again drawn attention to the cartel arrangements that underpin the local economy. Only one or a limited number of firms are allowed to import most of Macau’s consumer items. The government said November’s inflation was mainly attributable to rising costs for meals bought away from home (recording a 8.46 percent rise year-on-year) and higher prices of liquefied petroleum gas (registering a hefty 25.79 percent appreciation). But lovers of red meat are also feeling the inflationary heat. Beef prices rose 30.85 percent year-on-
year to an average 122.73 patacas (US$15.37) per kilo. Prices for alcoholic beverages and tobacco soared 34.35 percent year-on-year under the Composite CPI. But that was mainly due to a tax increase on tobacco announced in the government budget in December last year. The statistics bureau said November’s inflation had been “tapered off” by an increase in government subsidies toward the cost of consumers’ electricity bills. Macau’s Composite CPI uses prices from 2008-2009 as a base and covers a basket of consumer items. The government also measures the inflationary impact of
so-called ‘regressive taxes’ – those such as taxes on tobacco – levied at the same rate on consumers regardless of their household income. The ‘CPI-A’ applies to poorer households –about half of the total – with an average monthly expenditure of 6,000 to 18,999 patacas. The CPI-A shows a year-on-year inflation rate of 6.21 percent. The ‘CPI-B’ relates to more affluent households – about 30 percent of the total – with an average monthly expenditure of 19,000 to 34,999 patacas. For those consumers the CPI-B inflation rate is nearer to the Composite CPI, at 5.86 percent.
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business daily December 20, 2012
GREATER CHINA
U.S. slaps duties on wind towers As high-level talks with Chinese delegation begins
Baosteel partner to sell stake Visa Steel Ltd, the Indian partner of China’s second-largest steelmaker, will sell new shares to fund a 17 billion rupee (US$310 million) expansion and cut debt, as it tries to end six straight quarters of losses. The sale “at the right price” will reduce the founders’ holding to 51 percent from 74 percent, chairman Vishambhar Saran said, without giving a timeline. Visa, which shut its sole steel plant in the eastern state of Odisha early this year because of an iron ore shortage, is banking on the local government to lift curbs and resume supplies of the raw material by January, he said. “The next year will be a profitable year,” said Mr Saran, whose family controls the Kolkata-based company. “We’re incurring costs without running the plant, which is the main reason for the losses. Odisha’s move to ensure iron ore for local steelmakers will help us restart the plant.” Iron ore supplies to Baosteel Resources Co.’s local partner were snapped after some mines failed to renew their permits, while others were shut down on charges of illegal extraction last year. The state government now plans to secure half the mining output to factories located within the state, while curbing licenses for exports. “Globally, the steel sector seems to be coming out of the woods and Odisha’s policies to promote integrated steel plants will be a big boost for Visa,” said Sharad Avasthi, an analyst at Kolkata-based SPA Capital Securities Ltd. “The resumption of work at its steel plant will mean better servicing of debt, higher income and an increased confidence in the stock.”
T
he United States pressed forward with plans to slap steep punitive duties on wind turbine towers imported from China at prices deemed unfairly low, even as officials welcomed a high-level Chinese delegation for trade and economic talks. The U.S. Commerce Department set final anti-dumping duties ranging from 44.99 to 70.63 percent on utilityscale towers manufactured in China and additional countervailing duties of 21.86 to 34.81 percent to combat Chinese government subsidies. The department also slapped final anti-dumping duties of 51.40 to 58.49 percent on wind towers from Vietnam. A U.S. trade panel has final approval over the duties and is expected to vote on the case in late January. The action was the latest clash between the two countries over U.S. imports of green technology from China. It came as a Chinese delegation led by Vice Premier Wang Qishan was in Washington for the U.S.-China Joint Commission on Commerce and Trade meeting, a high-level bilateral forum to address barriers to trade and investment. Mr Wang attended a dinner on Tuesday evening hosted by U.S. Trade Representative Ron Kirk and Acting Commerce Secretary Rebecca Blank and is expected to meet with U.S. Treasury Secretary Timothy
Geithner today. The United States has also slapped anti-dumping and countervailing duties on billions of dollars of solar panels from China, despite strong objections from Beijing. In Geneva on Tuesday, China’s Ambassador to the World Trade Organization Yi Xiaozhun, criticised what he called U.S. “abuse” of anti-dumping and countervailing laws and accused Washington of blocking some Chinese investment in the United States for “ideological reasons”.
Trade obstacles The United States imported US$222 million of wind towers from China last year and about US$79 million from Vietnam. The custombuilt steel towers support turbines that generate electricity from wind. Chinese Foreign Ministry spokeswoman Hua Chunying, speaking at a daily news briefing in Beijing, said trade protectionism such as the wind towers issue would hurt bilateral cooperation and the interests of the United States. “We hope the two sides can fully make use of the current bilateral dialogue and cooperation mechanism to resolve the relevant trade disputes through dialogue,” Mr Hua said. Anti-dumping duties announced
on Tuesday were higher for two Chinese companies, Chengxi Shipyard Co. and Titan Wind Energy (Suzhou), than the preliminary rates they received this year in the range of 20 to 30 percent. Three other Chinese exporters also faced higher duty rates of about 45 to 50 percent in the final decision, but the top rate of 70.63 percent for “all other” Chinese manufacturers and exporters was down slightly from the preliminary level. Final countervailing duties on Chinese wind towers were higher than the preliminary rates of 13.74 to 26.00 percent. Sharing information The U.S. Chamber of Commerce on Tuesday urged securities market regulators in both countries to resolve differences over sharing of confidential business information that China considers a state secret. “Failure to reach an agreement will create regulatory dead-zones that harm investors and businesses. Furthermore, the threat of retaliatory actions by regulators, on both sides of the Pacific, may create a regulatory protectionism that will harm both economies,” the business group said in a letter to the heads of the U.S. Securities and Exchange Commission and the China Securities Regulatory Commission. Reuters
Banks ordered to tighten checks on finance products China’s banking regulator has ordered banks to tighten checks on the sale of third-party financial products made through their branches to ward off potential risks, the Southern Metropolis Daily reported yesterday. The China Banking Regulatory Commission (CBRC) issued an “urgent” internal circular last Friday requiring banks to check their sales of thirdparty products, mainly insurance, trust products and investment funds, said the newspaper, which is based in Guangzhou. Banking sources contacted by Reuters confirmed that they had received a CBRC circular but would not discuss the contents. Banks must complete investigations within 15 days and the CBRC will also conduct random checks on bank branches after they hand in selfassessment reports, the newspaper said. “If bank branches find rule-breaking behaviour and major risks, they must report to their headquarters immediately and work with cooperative institutions to take effective measures to resolve risks and report to bank regulators in time,” it said. The sale of banks’ own wealth management funds will not be affected by the move, the paper said. Banking regulators are worried about the risk of a crisis of confidence in wealth management products, following investor protests at Hua Xia Bank after a product sold through its Jiading branch in a suburb of Shanghai failed to pay out upon maturity late last month. The bank says a branch employee sold the product without authorisation. Reuters/Bloomberg News
The U.S. imported US$222 million of wind towers from China
Bulging copper stocks push banks to tighten credit S ome banks have tightened credit for imports of refined copper by China, the world’s largest consumer of the metal, as stocks pile up in bonded warehouses and prices hover below London rates, reducing buying of the metal and keeping premiums low. In the fourth quarter, approvals of letters of credit (LC) for copper imports have tightened after some banks struggled in the previous quarter to recover billions of yuan in loans made to the steel trade, traders and analysts said. Credit fell further this month as the year-end approaches, they added, squeezed from last December, when importers rushed to use up credit lines and booked large spot shipments, boosting imports to a record 406,937 tonnes of refined copper. “Some banks now are definitely saying no to copper imports,” said an official at a large Chinese trading
house. “Domestic prices are lower than the cost of imports, which is a risk to the importer, as well as the bank. Banks are not keen to do risky business,” said the official, who declined to be identified as he is not authorised to speak to the media. Investors importing copper as a financing tool have been the driving force behind imports in the past two years, as their profits from financing enabled them to cover poor price ratios. But banks now see such imports as risky, as stocks in bonded warehouses in China have already grown to more than 1 million tonnes, said Jing Chuan, chief researcher at Citic Futures. “Banks are sensitive to copper imports now,” he said. “Bonded stocks are high and some are stored there for months, meaning that the domestic market has been unable to digest them.” Reuters
December 20, 2012 business daily | 13
GREATER CHINA
Chinese profits to grow 10pct next year: Russell Consumer companies may post greater growth Victoria Stilwell
C
hinese corporate earnings are set to climb as much as 10 percent next year as the world’s second-biggest economy emerges from its slowdown and more people move to cities, Russell Investments says. Companies that can benefit from an increase in domestic consumption may post even greater growth, Gustavo Galindo, who helps manage US$8 billion of emerging-market equities for Russell in New York, said in a phone interview yesterday. “What you have is more and more people joining into the middle class and that trend is very likely to continue,” Mr Galindo said. “When the economy improves, they have to buy more goods and services and they are the ones that will be pushing consumer companies to better profits.” Goldman Sachs Group Inc. raised its fourth-quarter and 2013 economic growth forecasts for China yesterday to account for gains in production, after data last week showed industrial output climbing the most in eight months in November. Retail sales last month also rose at the fastest pace since March, adding to signs the economy is emerging from a slowdown that started in the
Retail sales last month rose at the fastest pace since March
fist quarter of 2011. The Russell Emerging Markets Fund that Mr Galindo oversees has returned 16 percent this year, beating 43 percent of its peers. The MSCI Emerging Markets Index has returned 18 percent, while the Shanghai Composite Index of domestic Chinese shares posted a return of 0.9 percent, data compiled by Bloomberg show. The average earnings per share
of companies in Hong Kong’s Hang Seng China Enterprises Index grew 4.3 percent in the 2012 fiscal year, data compiled by Bloomberg show. EPS growth for the Shanghai Composite was 17 percent. Chinese policy makers have set an initial growth target of 7.5 percent for 2013, the same as for 2012, according to two bank executives and a regulatory official briefed on the matter who asked not to be identified
because they aren’t authorised to disclose the information. The country’s new leaders have pledged to support greater urbanisation, with as many as 300 million people moving from the countryside by 2030, to join 600 million already living in cities, the Organisation for Economic Cooperation and Development estimates show. Bloomberg News
14 |
business daily December 20, 2012
ASIA Billabong gets US$556 mln bid Australian surfwear firm Billabong International Ltd has received a US$556 million takeover bid, but its shares dived as a fresh profit warning fuelled fears that the offer will either be lowered or like other bids this year, withdrawn after due diligence. A consortium led by Billabong director Paul Naude and New York-based private equity firm Sycamore Partners offered A$1.10 a share, adding that they stood by the bid even as the company said annual earnings could be 15 percent lower than previously forecast. The latest profit warning, its third this year, sent the stock tumbling 13 percent to A$0.85.
World Bank sees Asian recovery Growth in East Asia to accelerate as China’s economy recovers Shamim Adam
T
he World Bank said growth in East Asia’s emerging nations will accelerate next year as China’s economy recovers, reducing the need for policy makers to cut interest rates. Developing East Asia will probably expand 7.5 percent in 2012 and 7.9 percent in 2013, the Washingtonbased lender said in a report yesterday, raising the forecast for this year from an October prediction of 7.2 percent. The region is expected to account for about 40 percent of global growth in 2012, it said. “We see a bit of an uptick next year in part because of China’s recovery that is going on already,” Bert Hofman, World Bank chief economist for East Asia and the Pacific, said in a Bloomberg Television interview yesterday. “We see most of the economies to be almost at full capacity, so further stimulus at this point wouldn’t make much sense, it would just result in higher inflation.” The region still faces risks from Europe and the U.S., where spending
cuts and tax increases are due to take effect in January if lawmakers don’t resolve a fiscal policy dispute, the World Bank said, even as recent reports showed a global recovery may be gathering momentum. Asian nations have loosened fiscal or monetary policies this year to protect growth, with rate cuts in China and Thailand and higher spending by Philippine President Benigno Aquino and Malaysian Prime Minister Najib Razak. “We are pretty much already at the bottom of the rate-cutting cycle for most of the region,” said Enrico Tanuwidjaja, an economist at Royal Bank of Scotland Group Plc in Singapore. “The dynamics of inflation and growth for East Asia don’t warrant further easing.”
We see most of the economies to be almost at full capacity, so further stimulus at this point wouldn’t make much sense, it would just result in higher inflation Bert Hofman, World Bank chief economist for East Asia
China effect The World Bank raised its growth prediction for emerging East Asia after third-quarter data showed government measures to support
expansion in China gave “quite a boost” to the economy, and may continue to do so next year, Mr Hofman told reporters in Singapore yesterday. World trade has also improved since August, and the risks from Europe “are now considerably less than six months ago,” he said. “We expect quarter four also to be good and that then feeds into a very strong next year and that lifts the region up as a whole,” he said in the interview. “Even outside China, domestic demand is driving growth in Indonesia, Malaysia, the Philippines, so there also growth is quite strong.” China’s economy may grow 7.9 percent in 2012, compared with 9.3 percent in 2011, the World Bank said. Asia’s largest economy may expand 8.4 percent next year, and the country’s slowdown “appears to now have bottomed out,” it said. Growth in 2013 will be a result of a “combination of lagging effects of earlier monetary expansions, local government fiscal stimuli, accelerated approval of central investment projects, and an upswing in the business cycle,” according to the report. China has set its initial target for economic growth at 7.5 percent for a second year and tightened its inflation goal to the lowest level since 2010, two bank executives and a regulatory official said this month, asking not to be named as they weren’t authorised to disclose the details. While Asia’s developing economies
Japan exports dip for sixth month Even as yen decline improves 2013 outlook
J
apan’s exports fell for a sixth month in November and the trade deficit swelled, underscoring the challenge that incoming Prime Minister Shinzo Abe faces in reviving growth. Shipments slid 4.1 percent from a year earlier, the Finance Ministry said in Tokyo yesterday. The median forecast of 23 economists was for a 5.5 percent decline. Imports rose 0.8 percent leaving a deficit of 953.4 billion yen (US$11.3 billion), the third-largest on record. The Nikkei 225 Stock Average rose above 10,000 for the first time since April on speculation that the Bank of Japan will expand monetary stimulus, a move that could aid exports by fuelling more declines in the yen. JPMorgan Chase & Co. and Bank of America Merrill Lynch forecast that that the central bank will add 10 trillion yen to an assetpurchase fund at a policy meeting that ends today. “We’re in a manufacturing-led recession,” said Takuji Okubo, Tokyo-based chief economist at Japan Macro Advisors, formerly of Goldman Sachs and Societe Generale SA. “While Abe should be able to help exporters by pushing monetary easing to weaken the yen, he may find it difficult to implement an effective
Shipments fell 4.1pct in November from a year earlier
fiscal stimulus package given Japan’s mounting debt.”
Economic improvement Japan’s economy has contracted for two straight quarters, meeting the textbook definition of a recession. Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG in Tokyo, estimates that gross domestic product this quarter will fall an annualised 3.6 percent after dropping 3.5 percent in the three months through September. The cumulative trade deficit for the first 11 months of 2012 was 6.28 trillion yen, more than double the record deficit in 1980. Exports
to the U.S. exceeded those to China for the first time since December 2008, excluding seasonal factors, the ministry said. Exports to China fell 14.5 percent from the previous year as shipments of construction equipment tumbled almost 75 percent and cars dropped 68 percent by value, improving from an 84 percent decline in October. Exports to the European Union dropped 19.9 percent, while those to the U.S. rose 5.3 percent. Increasing purchases of mobile phones from Korea and China accounted for some of the rise in imports, the ministry said. Mr Abe told BOJ Governor Masaaki Shirakawa on Tuesday that
he campaigned on ending deflation and correcting the strong yen, and said that he wanted to introduce a 2 percent inflation target. “The improvement of overseas economies will cause a pickup in exports in the second half of 2013,” Junko Nishioka, chief economist at RBS Securities Japan Ltd, said before the report. At the same time, “the trade deficit will probably not shrink much, as the weaker yen will raise the cost of energy imports.” Analysts’ median estimate was for a trade deficit of 1.04 trillion yen on weakness in exports to Europe and China and nuclear plant shutdowns that increased demand for energy imports. Bloomberg News
December 20, 2012 business daily | 15
ASIA Macquarie to shut Singapore infrastructure fund Macquarie Group Ltd plans to shut its Singapore-listed infrastructure fund because it doesn’t expect its share price to reflect the value of its holdings. Macquarie International Infrastructure Fund will distribute excess cash as a special dividend and divest three assets. The fund has about S$60 million (US$49 million) in cash, according to chairman Chiang Meng Heng. “We were looking at narrowing the discount,” Mr Heng said in an interview with Bloomberg. The investment bank decided to shut the fund after it couldn’t find good assets in Asia or means to boost its share price, he added.
are expanding, Japan is in a technical recession. Its exports fell for a sixth month in November and the trade deficit swelled, data released yesterday showed, underscoring the challenge that incoming Prime Minister Shinzo Abe faces in reviving growth. “Monetary policy stances in the region are largely appropriate in the current environment, in which negative shocks remain a dominant concern,” the World Bank said. “Receding inflation in most countries suggests that there is no need for immediate monetary tightening in the region in the absence of major shocks.”
KEY POINTS World Bank raises forecast for developing East Asia Monetary policies in the region ‘appropriate’ Lender sees inflation slowing down in most countries China’s economy to grow by 8.4pct in 2013
Taylor rule “Given China’s still significant fiscal space and the already accommodative monetary stance, the burden of any countercyclical response should fall on fiscal policy,” the World Bank said. The Taylor rule suggests that monetary policy is already “relatively relaxed” in Indonesia, the Philippines and Thailand, the World Bank said today. John Taylor, an economist at Stanford University, published in 1993 an interest-rate formula, which measures where a central bank should set its policy rate based on inflation and growth. “Consequently, further easing may be constrained in these countries unless conditions change dramatically,” the World Bank said.
There have been signs of a pick-up in China’s manufacturing and export sector
Policy makers should monitor short-term capital flows into their financial systems if liquidity in the global economy increases further amid renewed stimulus by the European Central Bank and the Bank of Japan, the lender said. While a resurgence in capital inflows into the region hasn’t led to
strong currency appreciation, such pressures may accumulate if the fund influx continues, it said. “The bulk of the capital flowing into the region consists of foreign direct investments, which creates jobs and growth in production capacity,” Mr Hofman said. “Nevertheless, monetary authorities should closely
monitor developments in their capital accounts. Appropriate exchange-rate arrangements and capital-market development could provide a cushion against undesirable effects of capital inflows, while macro-prudential measures could guard against excessive credit growth.” Bloomberg News
Business sentiment edges up in Q4 Southeast Asian companies most positive as global worries persist Miyoung Kim
B
usiness sentiment among Asia’s top companies improved slightly in the fourth quarter, reversing two consecutive quarters of declines, while global economic uncertainty remained the biggest concern for the region’s firms, a Thomson Reuters/ INSEAD survey showed. The Thomson Reuters/INSEAD Asia Business Sentiment Index rose to 63 in the fourth quarter from 62 in the third quarter of 2012, having peaked at 80 in the first quarter of 2011. A reading above 50 indicates an overall positive outlook, while one below 50 points to pessimism. The results showed a stark contrast between companies in Southeast Asia, a region of about 600 million people now benefiting from an increase in foreign investment and which showed some of the highest positive readings, and manufacturing-heavy northeast Asia, which is more susceptible to the global economic downturn and had some of the lowest index readings. China, where exports support an estimated 200 million jobs, showed the most positive response in the northeast Asian region, but companies in other export-focused economies
such as Japan, South Korea and Taiwan remained more cautious. “External risk factors that may pose problems in Asia are European debt crises re-escalating and if U.S. growth disappoints,” said Juuso Mykkänen, chief executive of JOM Fund Management Ltd in Helsinki, which is running an investment company that have funds focused on investing in Asia.
“Asian own-risk factors are political ones that should be watched carefully. Territorial disputes should be also watched carefully.” The index surveyed more than 100 of the Asia-Pacific region’s top companies in 11 economies. There were 96 responses. The poll, conducted by Thomson Reuters in association with INSEAD, a global management and business school, was compiled between Dec. 3-14 and covered sectors such as autos, finance, property, resources and technology.
Indonesia favourite
KEY POINTS Biggest concern remains global economic uncertainty Southeast Asian companies most positive Defensive sectors such as food most positive Airlines, building most negative industries
Indonesia, India, Malaysia and the Philippines all had the maximum scores of 100, followed by Thailand and China, whose indexes improved to 75 and 64 respectively from 64 and 50 in the previous quarter. South Korea also showed a sharp improvement from 20 to 50. “Indonesia will remain our favourite destination in Asia due to very attractive structural forces in play currently. However, having said that, we have tactically increased weight in China in recent months as cyclical factors are on our side and valuations remain very compelling,” said Mr Mykkänen. In contrast, companies in Taiwan
were the most negative in Asia with a 33 index reading, the lowest level since the third quarter of 2011. It also compared with a reading of 40 in the third quarter. Companies in Japan were the second-most negative, with a reading of 44 compared with a third-quarter reading of 48. It was the lowest reading in a year, underscoring the slow pace of recovery in the world’s third-largest economy. The food sector was the most positive among industries, with a reading of 77 compared with 73 in the third quarter, followed by the drug sector with a reading of 72, although that was a decline from the 80 recorded in the third quarter. The retail sector also posted a solid improvement, with its index reading rising to 75 from 50 in the third quarter, with four participants saying they were positive and the remaining four neutral, as the industry gears up for the year-end shopping season. In contrast, the airline and building sectors were the most negative with index readings of 0 and 25 respectively. High fuel prices and regulatory uncertainty remain concerns for Asia-Pacific air carriers, while global economic uncertainty threatens to curb long-haul travel. Reuters
16 |
business daily December 20, 2012
MARKETS Hang SENG INDEX PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AIA GROUP LTD
30.4
-0.6535948
95209103
CHINA UNICOM HON
12.06
0.6677796
22813437
ALUMINUM CORP-H
3.57
1.133144
13612333
CITIC PACIFIC
10.84
0.5565863
6426819
BANK OF CHINA-H
3.48
-0.286533
261527439
64.3
-0.7716049
10666589
CNOOC LTD
16.84
1.080432
42117828
COSCO PAC LTD
11.52
1.230228
5073620
ESPRIT HLDGS
11.16
-4.452055
37841590
HANG LUNG PROPER
29.85
0
4455277
TINGYI HLDG CO
HANG SENG BK
117.6 -0.08496177
1449128
WANT WANT CHINA WHARF HLDG
NAME
BANK OF COMMUN-H BANK EAST ASIA BELLE INTERNATIO BOC HONG KONG HO
5.87
0.8591065
46237866
29.45
0
2023358
16.5
1.226994
10171310
24.4
0.6185567
10355204
CATHAY PAC AIR
14.12
1.729107
3040828
CHEUNG KONG
119.9
1.266892
3427723
CHINA COAL ENE-H
8.35
1.089588
21473812
CHINA CONST BA-H
6.32
0.9584665
318945425
CHINA LIFE INS-H
24.4
0.2053388
29908259
CHINA MERCHANT
25.2
2.647658
3831576
90.25
0.3335186
23.1
0.6535948
CHINA PETROLEU-H
8.8
CHINA RES ENTERP
CHINA MOBILE CHINA OVERSEAS
NAME
CLP HLDGS LTD
HENDERSON LAND D
55.9
0.7207207
2319723
HENGAN INTL
69.2
0.5813953
2027554
HONG KG CHINA GS
21.05
-0.2369668
4373637
HONG KONG EXCHNG
131.4
0.6125574
3659292
HSBC HLDGS PLC
80.5
0.4993758
10187335
16322143
HUTCHISON WHAMPO
80.6
0.4361371
6874696
16664847
IND & COMM BK-H
5.59
0.7207207
231051995
1.734104
78523706
LI & FUNG LTD
13.76
1.775148
28501557
28.35
1.069519
1962615
MTR CORP
30.75
1.151316
3150645
NAME
PRICE
DAY %
VOLUME
65
-1.140684
5135268
34.1
0.4418262
7136624
SINO LAND CO
14.08
0
6408391
SUN HUNG KAI PRO
116.8
0.7765315
2857575
93.7
0.5364807
2200652
249.4
-0.3197442
3519628
POWER ASSETS HOL SANDS CHINA LTD
SWIRE PACIFIC-A TENCENT HOLDINGS
MOVERS
38
21.5
1.654846
3681066
10.62
0.7590133
15407260
60.1
3.979239
6096240
9
3 22673
INDEX 22623.37 HIGH
22673.55
LOW
22449.74
52W (H) 22683.72
CHINA RES LAND
20.25
1.452906
11486956
NEW WORLD DEV
12.28
0.4909984
9916560
CHINA RES POWER
19.28
2.010582
11630885
PETROCHINA CO-H
11
1.476015
78085795
CHINA SHENHUA-H
33.65
3.220859
19213160
PING AN INSURA-H
63.05
-0.7867821
16413180
PRICE
DAY %
VOLUME
27.2
-0.9107468
8126306
8.8
1.734104
78523706
ZIJIN MINING-H
(L) 17821.51953
22449
17-December
19-December
Hang SENG CHINA ENTErPRISE INDEX NAME
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.82
1.595745
142880163
AIR CHINA LTD-H
6.3
3.448276
20990960
CHINA PETROLEU-H
ALUMINUM CORP-H
3.57
1.133144
13612333
CHINA RAIL CN-H
9.02
1.691094
26621301
ANHUI CONCH-H
29.1
-0.3424658
11993566
CHINA RAIL GR-H
4.6
0
13622378
BANK OF CHINA-H
3.48
-0.286533
261527439
CHINA SHENHUA-H
33.65
3.220859
19213160
CHINA TELECOM-H
CHINA PACIFIC-H
5.87
0.8591065
46237866
4.26
0.7092199
71413237
19.88
2.68595
6090900
DONGFENG MOTOR-H
12.18
5.363322
30985480
CHINA CITIC BK-H
4.54
1.339286
39685005
GUANGZHOU AUTO-H
6.72
2.439024
6687242
CHINA COAL ENE-H
8.35
1.089588
21473812
HUANENG POWER-H
7.17
1.12835
16900929
CHINA COM CONS-H
7.49
-0.9259259
17355708
IND & COMM BK-H
5.59
0.7207207
231051995
CHINA CONST BA-H
6.32
0.9584665
318945425
JIANGXI COPPER-H
20.85
0.968523
5683229
CHINA COSCO HO-H
3.85
0.5221932
13092500
PETROCHINA CO-H
11
1.476015
78085795
CHINA LIFE INS-H
24.4
0.2053388
29908259
PICC PROPERTY &
10.42
0.9689922
14374834
CHINA LONGYUAN-H
5.19
0.3868472
31663730
PING AN INSURA-H
63.05
-0.7867821
16413180
CHINA MERCH BK-H
16.84
1.445783
9120799
SHANDONG WEIG-H
7.97
-0.4993758
23767050
BANK OF COMMUN-H BYD CO LTD-H
NAME
PRICE
DAY %
VOLUME
12.84
1.26183
32134000
3.14
0.6410256
36761241
ZOOMLION HEAVY-H
11.88
1.365188
29826794
ZTE CORP-H
12.64
0.6369427
6213290
YANZHOU COAL-H
MOVERS
29
10
1 11416
INDEX 11388.4 HIGH
2397.45
LOW
11262.02
CHINA MINSHENG-H
8.57
-1.267281
39097763
SINOPHARM-H
24.45
-1.012146
3470228
52W (H) 11916.1
CHINA NATL BDG-H
11.58
0.8710801
36279440
TSINGTAO BREW-H
46.35
0.5422993
764497
(L) 8987.76
CHINA OILFIELD-H
15.34
-2.911392
20053600
WEICHAI POWER-H
34.05
-1.589595
3158141
11262
17-December
19-December
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.75
-0.7220217
99547092
CITIC SECURITI-A
11.8
-0.2535926
87545264
SAIC MOTOR-A
AIR CHINA LTD-A
5.57
-0.7130125
15530591
CSR CORP LTD -A
4.92
-0.2028398
31865300
SANY HEAVY INDUS
NAME
NAME
NAME
PRICE
DAY %
15.99
1.782304
VOLUME 23818660
9.93
7.235421
103005019 16095939
ALUMINUM CORP-A
5.11
-0.5836576
16763454
DAQIN RAILWAY -A
6.47
-0.154321
38769528
SHANDONG GOLD-MI
36.53
-2.30008
ANGANG STEEL-A
3.79
-0.7853403
20107197
DATANG INTL PO-A
3.98
-0.2506266
11695830
SHANG PHARM -A
10.77
-0.09276438
7259644
ANHUI CONCH-A
18.52
-0.6437768
38331495
EVERBRIG SEC -A
13.18
1.384615
17895290
SHANG PUDONG-A
9.05
-0.9846827
176670647
BANK OF BEIJIN-A
9.06
-0.8752735
57020344
GD POWER DEVEL-A
BANK OF CHINA-A
2.89
-0.3448276
26096019
GF SECURITIES-A
2.43
-0.4098361
44278477
SHANGHAI ELECT-A
3.92
0.2557545
4709011
13.95
0.07173601
38335104
SHANXI LU'AN -A
20.89
3.160494
35683025
BANK OF COMMUN-A
4.65
-0.4282655
89826185
GREE ELECTRIC
24.05
-0.6198347
18739520
SHANXI XINGHUA-A
38.87
2.478249
4637778
13742399
GUANGHUI ENERG-A
15.47
1.709402
0.09940358
24930625
SHANXI XISHAN-A
13.13
0.690184
24332869
BANK OF NINGBO-A
10.07
BAOSHAN IRON & S
4.84
0
34378391
HAITONG SECURI-A
9.32
0
52312542
SHENZEN OVERSE-A
6.23
-0.7961783
62535817
BBMG CORPORATI-A
7.41
-1.068091
24301482
HANGZHOU HIKVI-A
29.83
2.157534
1944877
SUNING APPLIAN-A
6.56
1.234568
62978583
18.69
6.374502
10969985
HEBEI IRON-A
2.61
-0.3816794
25334142
TSINGTAO BREW-A
32.02
0.2818666
1852154
CHINA CITIC BK-A
4.13
-0.4819277
24172579
HENAN SHUAN-A
55.3
0.7836705
2839333
WEICHAI POWER-A
25.34
0.1185302
8892111
CHINA CNR CORP-A
4.57
-1.082251
41602481
HONG YUAN SEC-A
17.09
0.2934272
10626827
WUHAN IRON & S-A
2.73
-0.3649635
16060142
BYD CO LTD -A
CHINA COAL ENE-A
7.54
0.3994674
14681636
HUATAI SECURIT-A
8.91
-0.8898776
14819978
WULIANGYE YIBIN
27.79
2.206694
57762402
CHINA CONST BA-A
4.53
0.2212389
34216563
HUAXIA BANK CO
9.83
-0.4052685
33027086
YANGQUAN COAL -A
13.73
-0.1454545
20745098
CHINA COSCO HO-A
4.36
-1.133787
15301876
IND & COMM BK-A
4.1
-0.4854369
56809023
YANTAI CHANGYU-A
46.89
1.846221
2858083
CHINA CSSC HOL-A
20.77
3.333333
15912921
INDUSTRIAL BAN-A
15.35
0.1304631
73247335
YANTAI WANHUA-A
14.4
-0.2770083
8874059
CHINA EAST AIR-A
3.37
0.297619
21502051
INNER MONG BAO-A
35.79
-1.050594
70077875
YANZHOU COAL-A
17.37
0.3466205
5305484
CHINA EVERBRIG-A
2.92
0
125773160
INNER MONG YIL-A
20.23
0.3472222
11102625
YUNNAN BAIYAO-A
63.72
0.6317119
2902784
CHINA LIFE INS-A
19.36
-1.022495
9230072
INNER MONGOLIA-A
5.23
-0.9469697
69099772
ZHONGJIN GOLD
15.86
-1.6739
27440611
CHINA MERCH BK-A
11.88
0.2531646
95351145
JIANGSU HENGRU-A
27.96
0.2150538
4658452
ZIJIN MINING-A
3.74
-1.058201
55322858
CHINA MERCHANT-A
9.98
0.2008032
13907067
JIANGSU YANGHE-A
96.42
1.794764
5263956
ZOOMLION HEAVY-A
9.2
3.603604
129230337
JIANGXI COPPER-A
22.63
-0.9628009
13772373
8.62
-0.1158749
16129559
JINDUICHENG -A
11.17
-1.150442
6923979
CHINA MERCHANT-A
25.6
1.346002
18451709
CHINA MINSHENG-A
7.51
-0.1329787
188552132
7.71
0
20054590
JIZHONG ENERGY-A
12.72
2.580645
35379568
15.65
-1.012018
9431842
KANGMEI PHARMA-A
13.29
-1.628423
84999822
219.45
2.293386
4756978
34.36
1.088555
12744394
CHINA NATIONAL-A CHINA OILFIELD-A
20.24
-1.075269
17175405
KWEICHOW MOUTA-A
CHINA PETROLEU-A
6.62
0.3030303
28067575
LUZHOU LAOJIAO-A
CHINA RAILWAY-A
5.89
0.3407155
31234410
METALLURGICAL-A
2.14
-0.4651163
22312959
2.53
-0.7843137
21623857
3.84
0.2610966
93937217
8.9
-0.1122334
CHINA PACIFIC-A
CHINA RAILWAY-A
3.07
0.3267974
25141192
NINGBO PORT CO-A
CHINA SHENHUA-A
23.67
1.153846
15700450
PANGANG GROUP -A
ZTE CORP-A
MOVERS 135
142
23 2397
INDEX 2371.109
CHINA SHIPBUIL-A
4.49
1.354402
41566423
PETROCHINA CO-A
20119454
HIGH
2274.72
CHINA SOUTHERN-A
3.72
-0.5347594
26652420
PING AN BANK-A
15.18
-0.4590164
27157618
LOW
2353.24
CHINA STATE -A
3.55
0
108947113
PING AN INSURA-A
41.77
-0.9720247
22721518
CHINA UNITED-A
3.38
-0.2949853
77414762
POLY REAL ESTA-A
12.13
-0.08237232
132264644
CHINA VANKE CO-A
9.31
0.9761388
137002056
QINGDAO HAIER-A
12.07
-0.9031199
7275789
CHINA YANGTZE-A
6.74
0
20024968
QINGHAI SALT-A
25.79
-0.4631416
7025569
PRICE DAY %
Volume
PRICE DAY %
Volume
52W (H) 2717.825 (L) 2102.135
2353
17-December
19-December
FTSE TAIWAN 50 INDEX NAME ACER INC
NAME
24.85
-1.192843
16773793
FORMOSA PLASTIC
ADVANCED SEMICON
24.7
0.8163265
12498141
FOXCONN TECHNOLO
ASIA CEMENT CORP
37.8
0.5319149
3768556
328
-2.235469
14.05
1.444043
ASUSTEK COMPUTER AU OPTRONICS COR CATCHER TECH
PRICE DAY %
Volume
TAIWAN MOBILE CO
106 -0.9345794
2232595
11771941
TPK HOLDING CO L
502
1.006036
7739268
2.071006
33705995
TSMC
97.3
0.6204757
27889579
88.6
0.2262443
45344163
UNI-PRESIDENT
54.8
0.1828154
5977757
229
3.61991
626986
UNITED MICROELEC
11.5
-1.287554
68423038
274.5
-1.436266
15491104
16.8
1.204819
9886056
YUANTA FINANCIAL YULON MOTOR CO
78.3
1.032258
4018618
90
0.2227171
FUBON FINANCIAL
34.5
3779690
HON HAI PRECISIO
169644166
HOTAI MOTOR CO
140
2.564103
15585717
HTC CORP
CATHAY FINANCIAL
32.05
3.054662
72669296
HUA NAN FINANCIA
CHANG HWA BANK
16.05
1.26183
17821752
LARGAN PRECISION
785
3.97351
3485930
CHENG SHIN RUBBE
76.2
0.131406
4598441
LITE-ON TECHNOLO
39.2
0.5128205
3543123
CHIMEI INNOLUX C
16.75
6.349206
229227999
MEDIATEK INC
327
-2.533532
13576523
7.76
2.37467
143245490
MEGA FINANCIAL H
22.9
0
33183255
CHINA STEEL CORP
26.45
0.3795066
19160902
NAN YA PLASTICS
56
0
5583208
CHINATRUST FINAN
17.8
0.8498584
42619759
PRESIDENT CHAIN
160
0.6289308
1692123
CHUNGHWA TELECOM
93.7
0
8892972
QUANTA COMPUTER
67.2
0.5988024
8676862
COMPAL ELECTRON
19.2
0.5235602
20920845
SILICONWARE PREC
31.05
2.138158
4031872
DELTA ELECT INC
107
0
3257245
SINOPAC FINANCIA
12.65
0.3968254
25342650
FAR EASTERN NEW
33.95
-1.164483
11361866
SYNNEX TECH INTL
53.6
0.9416196
6066546
FAR EASTONE TELE
73.7
0.2721088
8942478
TAIWAN CEMENT
38.5 -0.6451613
7670556
FIRST FINANCIAL
17.9 -0.2785515
22331189
TAIWAN COOPERATI
16.4
0.6134969
9955647
FORMOSA CHEM & F
70.8
0.2832861
3563240
TAIWAN FERTILIZE
76.5
0
2218658
FORMOSA PETROCHE
88.8
2.422145
2316849
TAIWAN GLASS IND
29.5
0.3401361
1705513
CHINA DEVELOPMEN
NAME
WISTRON CORP
MOVERS
35
10
29.95
1.182432
7393923
15
0.3344482
14572882
55.1
0.9157509
6584349
5 5391
INDEX 5388.31 HIGH
5391.61
LOW
5336.72
52W (H) 5621.53 (L) 4643.05
5336
17-December
19-December
December 20, 2012 business daily | 17
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GALAXy ENTErTAINMENT
MELCo CroWN ENTErTAINMENT
MGM CHINA HoLDINGS 43.2
29.85
14.120
29.74
14.085
29.63
43.1
29.52
14.050 14.015
29.41 Max 29.85
Average 29.662
Min 29.30
29.30
Last 29.75
SANDS CHINA LTD
Max 43.2
Average 43.066
Min 43
43.0
Last 43.2
SJM HoLDINGS LTD
34.30
34.15
Average 34.254
Min 34
34.00
Last 34.1
Average 17.817
NAME
PRICE
WTI CRUDE FUTURE Jan13
88.08
0.170590242
-9.929440638
109.6699982
79.68000031
BRENT CRUDE FUTR Feb13
109.16
0.294009555
5.867520124
119.2999954
90.38999939
DAY %
YTD %
(H) 52W
270
0.338176818
9.161478127
293.3099985
218.4999943
932.5
0.403768506
4.102707229
1031.5
800.25
NATURAL GAS FUTR Jan13
3.353
-1.901696899
-13.64924028
4.088000298
3.062000036
HEATING OIL FUTR Jan13
300.85
0.400467212
4.701747059
334.2199802
255.5699825
Gold Spot $/Oz
1674.81
-1.4708
7.0228
1796.08
1522.75
Silver Spot $/Oz
31.6869
-2.2914
13.8383
37.4775
26.1513
Platinum Spot $/Oz
1597.38
-0.9162
14.5486
1736
1339.25
690.4
-1.3009
5.6465
725.19
553.75
Palladium Spot $/Oz LME ALUMINUM 3MO ($)
2100
-0.261220613
3.96039604
2361.5
1827.25
LME COPPER 3MO ($)
8024
-0.483690934
5.578947368
8765
7198
LME ZINC
2090
-0.047824008
13.27913279
2220
1745
17800
1.107639875
-4.863709246
22150
15236
15.46
-0.03233107
N/A
16.84000015
14.90999985
717
-0.416666667
19.45022907
846.25
511
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Mar13 Mar13
WHEAT FUTURE(CBT) Mar13
21.60
17.9
21.53
17.8
21.47
17.7
21.41
Min 17.6
Last 17.98
21.35 Max 21.6
Average 21.485
Last 21.45
Min 21.35
PRICE MAJORS
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
DAY %
1.0515 1.6281 0.9122 1.3247 84.33 7.9825 7.7502 6.2309 54.565 30.6 1.2198 29.058 41.04 9691 88.675 1.20837 0.81371 8.2446 10.5741 111.72 1.03
-0.1425 0.4132 0.4385 0.4855 -0.5811 0.005 0.0013 0.0257 0.5245 -0.098 -0.082 -0.0482 0.0975 0.1548 -0.4409 -0.0389 -0.075 -0.5191 -0.4776 -1.0652 0
YTD %
(H) 52W
2.9974 4.7481 2.8393 2.2066 -8.7988 0.2142 0.2219 1.0287 -2.749 3.1046 6.2961 4.2019 6.8226 -6.4183 -11.5512 0.6968 2.4186 -1.3391 -2.1004 -10.7948 0.0097
(L) 52W
1.0857 1.6309 0.9972 1.3487 84.48 8.0177 7.7845 6.3964 57.3275 32 1.3054 30.37 44.35 9752 89.125 1.22426 0.8506 8.4894 10.7712 111.78 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
ARISTOCRAT LEISU
3.07
0
39.54545
3.32
2.16
1248991
142.1999969
CROWN LTD
10.3
-0.09699321
27.31767
10.37
7.92
15849269
25.12999916
18.30999947
AMAX HOLDINGS LT
0.068
3.030303
-21.83908
0.119
0.055
4833500
98.5
66.84999847
BOC HONG KONG HO
24.4
0.6185567
32.6087
25
18.1
10355204
CENTURY LEGEND
0.27
3.846154
17.3913
0.335
0.204
184000
CHEUK NANG HLDGS
4.67
1.521739
66.78572
4.68
2.6
198467
CHINA OVERSEAS
23.1
0.6535948
78.16653
24.25
12.066
16664847
CHINESE ESTATES
12.32
0.8183306
-1.44
13.26
8.3
78000
CHOW TAI FOOK JE
12.28
0
-11.78161
15.16
8.4
2936345
EMPEROR ENTERTAI
1.73
2.97619
55.85585
1.82
0.99
1345000
FUTURE BRIGHT
1.21
0
188.0952
1.43
0.38
1470000
GALAXY ENTERTAIN
29.75
1.018676
108.9185
29.9
13.28
14475257 1449128
813.25
0.246533128
10.79700272
948.25
652
SOYBEAN FUTURE Mar13
1456
-0.30811366
18.95424837
1728.25
1179
COFFEE 'C' FUTURE Mar13
144.6
0.416666667
-39.23093087
249
SUGAR #11 (WORLD) Mar13
19.32
-0.36101083
-17.29452055
COTTON NO.2 FUTR Mar13
75.56
-0.513495721
-14.63111513
World Stock MarketS - Indices NAME
18.0
(L) 52W
GAS OIL FUT (ICE) Feb13
CORN FUTURE
NAME
PRICE
DAY % YTD %
VOLUME CRNCY
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
13350.96
0.8731892
9.276814
13661.87
11735.19
NASDAQ COMPOSITE INDEX
US
3054.53
1.459043
17.24968
3196.932
2518.01
HANG SENG BK
117.6
-0.08496177
27.61801
120
91.15
FTSE 100 INDEX
GB
5955.13
0.323961
6.870618
5989.07
5229.76
HOPEWELL HLDGS
31.55
1.774194
60.95167
31.75
19.049
1409471
DAX INDEX
GE
7667.44
0.1810917
29.99296
7676.6
5637.53
HSBC HLDGS PLC
80.5
0.4993758
36.44068
80.9
57.05
10187335
NIKKEI 225
JN
10160.4
2.392318
20.16535
10255.15
8238.96
HANG SENG INDEX
HK
22623.37
0.5718673
22.72371
22683.72
17821.51953
CSI 300 INDEX
CH
2371.109
0.1262183
1.081404
2717.825
TAIWAN TAIEX INDEX
TA
7677.47
0.4412761
8.560285
8170.72
KOSPI INDEX
S&P/ASX 200 INDEX
SK
1993.09
0.5052772
9.166145
2057.28
HUTCHISON TELE H
3.6
1.123596
20.40134
3.88
2.85
6285700
LUK FOOK HLDGS I
24.1
-0.6185567
-11.07011
33.2
14.7
1573000
MELCO INTL DEVEL
9.03
1.006711
56.49913
9.2
5.12
2123000
2102.135
MGM CHINA HOLDIN
14.1
1.293103
46.99514
14.76
9.46
5826020
6609.11
MIDLAND HOLDINGS
3.69
1.373626
-6.677891
5.217
3.249
2606000
NEPTUNE GROUP
0.151
-1.948052
36.03603
0.222
0.084
440000
NEW WORLD DEV
12.28
0.4909984
96.16613
13.2
6.13
9916560
SANDS CHINA LTD
34.1
0.4418262
55.35307
34.65
20.35
7136624
SHUN HO RESOURCE
1.37
0
37
1.43
0.97
0
SHUN TAK HOLDING
4.13
-1.196172
61.38308
4.33
2.418
9725308
1750.6
AU
4617.777
0.4912077
13.83478
4627.1
3985
ID
4275.859
-0.5946154
11.87514
4381.746094
3635.283
FTSE Bursa Malaysia KLCI
MA
1665.64
0.37362
8.813444
1679.37
1463.27
NZX ALL INDEX
NZ
871.508
1.206336
19.41733
878.077
712.548
SJM HOLDINGS LTD
17.98
2.3918
43.77632
18.36
11.973
8097550
PHILIPPINES ALL SHARE IX
PH
3688.28
1.597953
21.12419
3756.31
2985.16
SMARTONE TELECOM
14.26
0.5641749
6.101194
17.5
12.96
2483004
WYNN MACAU LTD
21.45
0.7042254
10
25.5
14.62
4655671
ASIA ENTERTAINME
3.13
0
-46.76871
7.24
2.4
200153
BALLY TECHNOLOGI
45.9
0.8791209
16.02629
51.16
36.29
518109
JAKARTA COMPOSITE INDEX
13.980
Last 14.1
CURRENCY EXCHANGE RATES
GASOLINE RBOB FUT Jan13
METALS
Min 13.98
17.6 Max 18
Commodities ENERGY
Average 14.057
WyNN MACAU LTD
34.45
Max 34.45
Max 14.12
HSBC Dragon 300 Index Singapor
SI
621.08
0.05
25.13
NA
NA
STOCK EXCH OF THAI INDEX
TH
1375.4
0.9142002
34.14349
1376.25
1019.55
HO CHI MINH STOCK INDEX
VN
398.59
1.321843
13.38074
492.44
332.28
BOC HONG KONG HO
3.1
-2.821317
29.31821
3.3
2.32
4844
Laos Composite Index
LO
1207.63
0.08453436
34.26167
1249.34
876.33
GALAXY ENTERTAIN
3.85
0
105.8824
3.88
1.75
5900 3066790
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
INTL GAME TECH
14.58
1.532033
-15.23256
18.1
10.92
JONES LANG LASAL
86.16
2.498216
40.64643
87.52
56.51
353007
LAS VEGAS SANDS
46.9
0.7086107
16.85099
58.3216
32.6127
5751504
MELCO CROWN-ADR
16.84
0.8987418
75.05198
16.98
8.79
4348991
MGM CHINA HOLDIN
1.8
0
51.04559
1.96
1.1917
100
MGM RESORTS INTE
11.63
1.838879
11.50527
14.9401
8.83
11368264
SHFL ENTERTAINME
14.1
6.094808
20.30716
18.77
10.61
1119600
SJM HOLDINGS LTD
2.33
0
44.939
2.36
1.5484
450
113.95
0.2286921
9.988753
129.6589
84.4902
2637768
WYNN RESORTS LTD
AUD HKD
USD
18 |
business daily December 20, 2012
Opinion The fiscal cliff and U.S. foreign policy Anne-Marie Slaughter
T
Former director of policy planning in the U.S. State Department, is Professor of Politics and International Affairs at Princeton University
he world should be worried. The possibility that U.S. President Barack Obama and the Republicans in Congress will fail to reach a compromise before mandatory deep spending cuts and tax increases take effect on January 1 is very real. Global markets are well aware of the danger of the United States falling over the “fiscal cliff,” and are watching nervously. They know that this outcome could well throw the U.S. – and the world – back into recession. Foreign ministries around the world should be equally nervous. Unless the U.S. can get its fiscal house in order, it will be forced to abdicate leadership on a wide range of critical global issues. In the short term, Syria and its neighbours are already paying the price of America’s inability to focus on anything other than domestic politics since Obama’s re-election. In my view, the Syrian crisis is at a tipping point: while it is now apparent that the opposition will eventually win and President Bashar al-Assad will fall, the endgame’s duration will be a key element determining who actually comes into power and on what terms. Syria’s implosion, and the chaos and extremism that are likely to breed there, will threaten the entire Middle East:
the stability of Lebanon, Jordan, Turkey, Iraq, Gaza, the West Bank, Israel, Iran, and Saudi Arabia hangs in the balance. But we do not even know who will succeed Hillary Clinton as U.S. Secretary of State when Obama’s second term formally begins in January, or who will be on the White House security team.
Vital role In the medium term, the world abounds with tensions and potential crises that U.S. leadership is likely to be indispensable to resolving. As events over the past two weeks in Egypt have demonstrated all too vividly, the Arab awakening is still only in its first act in many countries. Indeed, democracy is fragile, at best, across North Africa; and, in the Middle East, Jordan, the Palestinian territories, Kuwait, and Saudi Arabia have only begun to feel the ripples of the tidal wave sweeping the region. Bahrain remains a flashpoint; Iraq is deeply unstable; and the simmering conflict between Iran and Israel could flare up at any time. Even when the U.S. is not on the front lines, it has played a vital role in behind-the-scenes diplomacy, nudging wary rivals closer to one another to create a united opposition, and
working with regional leaders like Turkey, Egypt, and Saudi Arabia to broker deals. In Asia, the U.S. has been playing a similar role in pushing for multilateral resolution of dangerous bilateral disputes between China and its many neighbours over territories in the East and South China Seas, while at the same time restraining U.S. allies who might otherwise provoke crises. And, on big global issues like climate change, organised crime, trade, and prevention of atrocities, the absence of the U.S. as a policy catalyst and active negotiator will be quickly and keenly felt.
Rebuilding at home Avoiding this fate requires the U.S. to “rebuild itself at home,” as the Obama administration’s 2010 National Security Strategy promises. But, if U.S. politicians spend the next two years the way they have spent the last two – patching together temporary policy fixes while avoiding the hard issues that voters and markets expect them to face – America’s voice will grow fainter, and weaker, in international institutions and affairs. Equally worrisome is the prospect of deep, across-theboard cuts in the U.S. defence budget at a time when many
rising powers are increasing their defence spending. As much as many countries may dislike the U.S. military, the availability and extraordinary capabilities of America’s soldiers, ships, aircraft, and intelligence assets often function as a global insurance policy.
Unless the U.S. can get its fiscal house in order, it will be forced to abdicate leadership on a wide range of critical global issues
In the long term, the challenge is more vague, but deeper. The longer the U.S. obsesses over its own political dysfunction and attendant economic stagnation, the less likely it is to bear the mantle of global responsibility and leadership. Openly isolationist political forces, such as the Tea Party
and libertarians like Ron Paul, will grow stronger. A retreating U.S. will, in turn, guarantee the emergence of what foreign-policy analyst Ian Bremmer describes as a “G-Zero world,” in which no country will take the lead and marshal the necessary economic and political coalitions to solve collective problems. Individual presidents and secretaries of state will certainly try. But, without Congressional support, they will bring fewer and fewer resources to the table and will suffer from an increasing credibility gap when they seek to negotiate with other countries. Global leaders can do more than stand by and watch. Why not remind U.S. politicians of their global responsibilities? The G-7 or G-8 leaders could issue a statement, for instance, urging the U.S. to get its fiscal house in order. NATO allies could make a similar statement. Indeed, other regional organisations, such as the African Union or the Arab League, could weigh in. Even G-20 members, were they so moved, could make a statement. Of course, when we think about the G-20, we immediately wonder who, other than the U.S., could organise the issuance of such a statement. That is precisely the problem, and it could get much worse. © Project Syndicate
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December 20, 2012 business daily | 19
OPINION Business
wires Leading reports from Asia’s best business newspapers
Taipei Times A Taiwanese business leader in Shanghai urged the Taiwanese government to revise regulations governing cross-strait ties and ease restrictions on interactions between Taiwanese and Chinese. In an interview, the president of the Taiwan Merchant Association in Shanghai, Yeh Teh-hui, described the Act Governing Relations Between the Peoples of the Taiwan Area and the Mainland Area, enacted by Taipei in 1992, as outdated. He said many of the act’s restrictions have become obsolete and suggested that constraints on cross-strait interaction be eased based on the progress in relations between Taipei and Beijing.
Asahi Shimbun Toyota Motor Corp. will recapture the position of global leader in sales of new cars in 2012, according to a report by auto market research firm Fourin Inc. It estimated that Toyota’s sales of new vehicles in 2012 would hit 9.7 million units, followed by Volkswagen AG at 9.15 million units and General Motors Co. at 9.12 million units. In 2011, Toyota dropped from first place to third due to production cuts caused by the earthquake in Japan and flooding in Thailand.
Business Inquirer Philippine Gaming Management Corp. (PGMC), the local gaming unit of Malaysian conglomerate Berjaya, has accused the state-run Philippine Charity Sweepstakes Office (PCSO) of working to bring down the Malaysianled company. PGMC legal counsel Jose Bernas accused the PCSO management of favouring a rival Philippine lottery equipment provider. Mr Bernas cited the move to allow rival Pacific Online Systems Corp. to enter what it deems to be PGMC’s “exclusive” Luzon territory without any bidding being conducted. PGMC said it was ready to go on an “allout” legal battle against the government agency.
Korea Herald South Korea has suspended its imports of Brazilian beef, becoming the sixth country to do so over a two-year-old case of mad cow disease, authorities said on Wednesday. South Korea joined China, Japan, South Africa, Egypt and Saudi Arabia in halting Brazilian imports in connection with an atypical case of bovine spongiform encephalopathy (BSE) that was detected in an animal that died in the southern state of Parana, the agriculture ministry said.
The Eurozone’s delayed reckoning Nouriel Roubini
Chairman of Roubini Global Economics and a professor at the Stern School of Business, NYU
T
he risks facing the euro zone have been reduced since the summer, when a Greek exit looked imminent and borrowing costs for Spain and Italy reached new and unsustainable heights. But, while financial strains have since eased, economic conditions on the euro zone’s periphery remain shaky. Several factors account for the reduction in risks. For starters, the European Central Bank’s “outright monetary transactions” programme has been incredibly effective: interest-rate spreads for Spain and Italy have fallen by about 250 basis points, even before a single euro has been spent to purchase government bonds. The introduction of the European Stability Mechanism (ESM), which provides another 500 billion euro (US$650 billion) to be used to backstop banks and sovereigns, has also helped, as has European leaders’ recognition that a monetary union alone is unstable and incomplete, requiring deeper banking, fiscal, economic, and political integration. But, perhaps most important, Germany’s attitude toward the euro zone in general, and Greece in particular, has changed. German officials now understand that, given extensive trade and financial links, a disorderly euro zone hurts not just the periphery but the core. They have stopped making public statements about a possible Greek exit, and just supported a third bailout package for the country. As long as Spain and Italy remain vulnerable, a Greek blowup could spark severe contagion before Germany’s election next year, jeopardising Chancellor Angela Merkel’s chances of winning another term. So Germany will continue to finance Greece for the time being.
Recession spreading Nonetheless, the euro zone periphery shows little sign of recovery: GDP continues to shrink, owing to ongoing fiscal austerity, the euro’s excessive strength, a severe credit crunch underpinned by banks’ shortage of capital, and depressed business and consumer confidence. Moreover, recession on the periphery is now spreading to the euro zone core, with French output contracting and even Germany stalling as growth in its two main export markets is either falling (the rest of the euro zone) or slowing (China and elsewhere in Asia). Moreover, balkanization of economic activity, banking systems, and public-debt markets continues, as foreign investors flee the euro zone periphery and seek safety in the core.
Private and public debt levels are high and possibly unsustainable. After all, the loss of competitiveness that led to large external deficits remains largely unaddressed, while adverse demographic trends, weak productivity gains, and slow implementation of structural reforms depress potential growth. To be sure, there has been some progress in the euro zone periphery in the last few years: fiscal deficits have been reduced, and some countries are now running primary budget surpluses (the fiscal balance excluding interest payments). Likewise, competitiveness losses have been partly reversed as wages have lagged productivity growth, thus reducing unit labour costs, and some structural reforms are ongoing. But, in the short run, austerity, lower wages, and reforms are recessionary, while the adjustment process in the euro zone has been asymmetric and recessionary/deflationary. The countries that were spending more than their incomes have been forced to spend less and save more, thereby reducing their trade deficits; but countries like Germany, which were oversaving and running external surpluses, have not been forced to adjust by increasing domestic demand, so their trade surpluses have remained large.
German leaders fear that the risk-sharing elements of deeper integration (the ESM’s recapitalisation of banks, a common resolution fund for insolvent banks, euro zone-wide deposit insurance, greater EU fiscal authority, and debt mutualisation) imply a politically unacceptable transfer union whereby Germany and the core unilaterally and permanently subsidise the periphery. Germany thus believes that the periphery’s problems are not the result of the absence of a banking or fiscal union; rather, on the German view, large fiscal deficits and debt reflect low potential growth and loss of competitiveness due to the lack of structural reforms. Of course, Germany fails to recognise that successful monetary unions like the United States have a full banking union with significant risk-sharing elements, and a fiscal union whereby idiosyncratic shocks to specific states’ output are absorbed by the federal budget. The U.S. is also a large transfer union, in which richer states permanently subsidise the poorer ones. At the same time, while proposals for a banking, fiscal, and political union are
being mooted, there is little discussion of how to restore growth in the short run. Europeans are willing to tighten their belts, but they need to see a light at the end of the tunnel in the form of income and job growth. If recessions deepen, the social and political backlash against austerity will become overwhelming: strikes, riots, violence, demonstrations, the rise of extremist political parties, and the collapse of weak governments. And, to stabilise debt/ GDP ratios, the denominator must start rising; otherwise, debt levels will become unsustainable, despite all efforts to reduce deficits. The tail risks of a Greek exit from the euro zone or a massive loss of market access in Italy and Spain have been reduced for 2013. But the fundamental crisis of the euro zone has not been resolved, and another year of muddling through could revive these risks in a more virulent form in 2014 and beyond. Unfortunately, the euro zone crisis is likely to remain with us for years to come, sustaining the likelihood of coercive debt restructurings and euro zone exits. © Project Syndicate
Tightening the belt Meanwhile, the monetary union remains an unstable disequilibrium: either the euro zone moves toward fuller integration (capped by political union to provide democratic legitimacy to the loss of national sovereignty on banking, fiscal, and economic affairs), or it will undergo disunion, disintegration, fragmentation, and eventual breakup. And, while European Union leaders have issued proposals for a banking and fiscal union, now Germany is pushing back.
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business daily December 20, 2012
CLOSING Instagram denies photo selling
S&P raises Greece’s credit rating
Facebook’s photo-sharing service Instagram has moved to deny that it has changed its privacy policy to give it the right to sell users’ photos to advertisers without notification. It said instead that users had incorrectly interpreted its revised terms of serviced, which it blamed on its “confusing” choice of language. Instagram’s clarification follows much user opposition to the believed change. “To be clear: it is not our intention to sell your photos,” it said. Instagram chief executive Kevin Systrom said in a blog posting: “It is our mistake that this language is confusing.”
Ratings agency Standard and Poor’s has raised the credit rating of Greece’s sovereign debt by six levels, praising the “strong determination” of fellow euro zone countries to help it stay as a member state. S&P has increased Greece’s rating from “selective default” to “B-minus”. It also praised the continuing efforts by the government to cut its spending. Last week, Greece started to receive the latest tranche of the bailout funds from the European Union and International Monetary Fund. They agreed to release 49.1 billion euros (US$57 billion) after continuing austerity work by Greece.
UBS fined US$1.5 bln for rate rigging
rate used to price financial contracts around the globe. It is the second-largest fine paid by a bank and comes a week after Britain’s HSBC agreed to pay the biggest ever penalty – US$1.92 billion – to settle a probe in the United States into laundering money for drug cartels. The revelations are another blow to UBS, which has had a tough 18 months after suffering a US$2.3 billion loss in a rogue trading scandal, management upheaval and thousands of job cuts. “We deeply regret this inappropriate and unethical behaviour. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity,” UBS chief executive Sergio Ermotti said in a statement disclosing the extent of the wrongdoing, which took place over six years from 2005 to 2010. UBS said it will pay US$1.2 billion to the U.S. Department of Justice (DoJ) and the Commodity Futures Trading Commission (CFTC), 160 million pounds to the UK’s Financial Services Authority and 59 million Swiss francs from its estimated profit to Swiss regulator Finma. The bank said the fines would widen its fourth quarter net loss but said it would not need to raise new capital as a result and traders said the fines were largely priced into the bank’s shares.
Second-largest fine ever levied on a bank Katharina Bart and Tom Miles
Too early to say if clients were affected, bank says
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wiss bank UBS AG was hit with a US$1.5 billion fine yesterday, admitting to fraud, paying bribes to brokers and “pervasive” manipulation of global benchmark interest rates by dozens of staff in a
deal with international authorities. The penalty agreed with U.S., UK and Swiss regulators is more than three times the US$450 million fine levied on Britain’s Barclays in June, also for rigging the Libor benchmark
Open and pervasive Britain’s financial regulator said at least 45 people were
involved in the rigging across three continents, which took place across a range of Libor currencies. It involved senior managers at UBS directing traders to keep Libor submissions low in order to give the impression that the bank was able to borrow more cheaply than it would actually have been able to do so. The British FSA said that after August 2007, when the U.S. sub-prime crisis raised doubts about the financial health of banks, UBS told its staff to “protect our franchise in these sensitive markets”. The FSA said “the manipulation was conducted openly and was considered to be a normal and acceptable business practice by a large pool of individuals”. The Libor benchmarks are used for trillions of dollars worth of loans around the world, ranging from home loans to credit cards to complex derivatives. Tiny shifts in the rate, compiled from daily polls of bankers, could benefit banks by millions of dollars. But every dollar a bank benefited meant an equal loss by a bank, hedge fund or other investor on the other side of the trade – raising the threat of a raft of civil lawsuits. In a memo to staff yesterday, Mr Ermotti said it was too early to determine whether or how clients were affected, pending further regulatory probing of the rate fixing. Reuters
Polls show tight South Korea race Park leads close presidential race, exit polls show
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outh Korean ruling party presidential candidate Park Geun Hye was leading opposition nominee Moon Jae In in the race to lead Asia’s fourth-biggest economy, exit polls showed. Ms Park, of the New Frontier Party, had 50.1 percent of the vote compared with 48.9 percent for Mr Moon, of the Democratic United Party, according to a joint exit poll released by TV broadcasters KBS, MBC, SBS after voting closed at 6pm South Korea time. A victory for Ms Park, the daughter of the country’s longestserving military dictator Park Chung Hee, would make her South Korea’s first female president. The winner will inherit an economy forecast to grow this year at the slowest pace since 2009, with fewer job prospects for younger voters and dissent over the power of the country’s conglomerates known as chaebols.
Almost 41 million people were eligible to cast their ballots. Turnout was 70.1 percent or 28.4 million as of 5pm, the highest rate since 1997, the National Election Commission said. The victor will take office in February when President Lee Myung Bak’s five-year term ends. Support for Ms Park, 64, stood at 48 percent compared with 47.5 percent for Mr Moon, according to a December 12 poll by the Seoulbased Realmeter and JTBC, a cable television affiliate of the JoongAng Ilbo newspaper. The survey of 2,000 respondents had a margin of error of 2.2 percentage points. South Korea bans surveys from being published six days before the election until voting ends. The turnout may decide who wins, according to analysts including Kim Ji Yoon, the Asan Institute’s director of public opinion studies. Turnout above 70 percent indicates
Exit polls give Park Geun Hye a very slim lead
participation by more younger people, who are more likely to vote for Mr Moon, she said. “Underneath the political apathy and general lack of voter participation, younger voters tend to be moderate, undecided or generally
veer left of centre and support Moon,” Ms Kim said. “If voter turnout is high, Moon has a definite chance against Park, who faces a more inherent difficulty in trying to convert their generally liberal political leanings.” Bloomberg News