Macau Business Daily, December 3, 2012 by Business Daily

Govt should restructure economy amid slowdown

Year I Number 174 Monday December 3, 2012 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP $ 6.00 www.macaubusinessdaily.com

The government ought to provide a long-term plan for the development of Macau, says economist Henry Lei Chun Kwok. Mr Lei says a slowdown is expected after several years of rapid growth. But decelerating growth gives the right opportunity for the administration “to make the necessary adjustments to restructure” the economy, he told Business Daily in an interview.

ages 6 & 7

GDP growth slows in Q3 Gross domestic product for the third quarter of 2012 expanded by 5.1 percent year-on-year in real terms, said the Statistics and Census Service. It is a sharp fall from the 18.5 percent in the first quarter and puts the GDP growth at 10 percent in the first ten months. Decelerating expansion in exports of gaming services and a drop in visitor spending are to blame, said the government.

Yesterday’s man

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Business and politics – not muscle – now rules in modern junkets, experts tell Business Daily. They suggest convicted gangster Wan Kuok Koi – known as ‘Broken Tooth’ – who saw the streets of Macau for the first time in nearly 15 years on Saturday – doesn’t have the right political connections to get back to top. “Now the ‘big guys’ are different people. If you want to do business in China – including Macau – you have to have a good relationship with the central government,” says Tony Tong, a former boss of Jibo Tech, a subsidiary of Jimei Group, one of the city’s leading VIP operators. “The release of Mr Wan will not change it [the gaming scene], nor make it chaotic. We’ll all be earning our profits,” says Chau Cheok Wa, chairman of VIP operator Sun International Group Ltd. Mr Chau has been described as a former ally of Mr Wan. The launch on Friday of an association to represent VIP room operators was not an attempt to isolate Mr Wan, claimed one of the city’s legislators. More on page 5

I SSN 2226-8294

HANG SENG INDEX 22100

22060

22020

21980

Tougher penalties for squatting

21940

21900

November 30

HSI - Movers Name

%Day

CHINA RES LAND

3.50

CHINA OVERSEAS

2.00

BANK OF COMMUN-H

1.97

PETROCHINA CO-H

1.76

WHARF HLDG

1.62

WANT WANT CHINA

-1.22

HONG KG CHINA GS

-1.41

SANDS CHINA LTD

-1.49

CHINA RES ENTERP

-1.78

HENGAN INTL

-2.17

Source: Bloomberg

ompanies or individuals that illegally occupy public land could be fined up to three million patacas (US$375,800), if a bill to amend the Land Law is enacted. The long-awaited final draft is on its way to the Legislative Assembly. The Executive Council, the government’s top advisory body, announced on Friday that the new bill would link the amount of the fine to the area of land occupied. If enacted, the draft bill will require land concession re-

quests to include economic and financial viability and environmental impact assessment reports. It also cuts the time frame to launch construction works to 15 days once the licence is issued. Land grants for “projects that match government policies” would be exempt from a public tendering process, the Executive Council’s spokesman, Leong Heng Teng, said. The policy on land grants has “a certain inclination” towards economic diversification, he added.

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business daily December 3, 2012

macau

Govt wants bigger fines for squatting A bill to amend the Land Law is on its way to the Legislative Assembly Vítor Quintã

vitorquinta@macaubusinessdaily.com

ompanies or individuals that illegally occupy public land could be fined up to 3 million patacas (US$375,800), if a bill to amend the Land Law is enacted. The Executive Council has finished discussing the long-awaited final draft of amendments to the Land Law, which was passed over 30 years ago, and the bill will now go to the Legislative Assembly. At present the law makes squatting punishable by a fine of between 500 patacas and 50,000 patacas. A previous draft, published for public consultation in December 2010, would have made the minimum fine 50,000 patacas and the maximum fine 500,000 patacas. But the final draft, made public on Friday, would make the maximum fine 3 million patacas for those who “illegally and intentionally” occupy public land. It would link the amount of the fine to the area of land occupied, the Executive Council’s spokesperson, Leong Heng Teng, told reporters. Squatters could also face criminal prosecution for disobedience and those convicted would be ineligible for land grants for five years. The government has repossessed 52 illegally occupied plots, together covering 210,000 square metres, since March 2009, the Land, Public Works and Transport Bureau disclosed in September. One of the main changes to the law would be a more explicit definition of the circumstances in which land grants would be exempt from a public tendering process. At present land grants are exempt from a public tendering process if the projects the land is intended for are in the “public interest for the MSAR’s social development”.

Bias against casinos The bill spells out that such projects would include the development of not-for-profit education, culture, health and sports facilities and the construction of public utility plants. Land grants for “projects that match the government policies” would also be exempt from a public tendering process. A previous draft of the bill would have exempted land grants for projects that would result in “an adequate diversification of the economic structure”. When the previous draft was current, the director of the Land, Public Works and Transport Bureau, Jaime Carion, said no more land

MOP3 mln Maximum fine proposed for squatting

Since March 2009 the government has repossessed 52 illegally occupied plots

would be granted for casino projects without a public tendering process. Asked if the change in the bill reflected a policy shift, Mr Leong said the provision in the bill was meant to allow the government flexibility in “dealing with the evolution of Macau society and the needs of the population”. He said policy on land grants has “a certain inclination” towards economic diversification and that the government had promised to keep gaming out of areas of land being reclaimed from the sea. He said that even if the government decided to exempt a land concession from a public tendering process, the bill would mandate a public hearing before the grant was made. The purpose, Mr Leong said, was to increase the transparency of the land concession process.

Jigsaw puzzle pieces He was non-committal when asked if a public hearing would be held whenever a developer wished to use a plot of land for purposes other than those it was intended for. But he hinted that the forthcoming urban planning system would give the public their say on any changes in land use. Mr Leong said the Executive Council was close to wrapping up its discussion of an urban planning bill and amendments to the law on urban construction. He said he was confident that all the elements of the government’s reform of how the cityscape is shaped – including the cultural heritage protection bill, already being discussed by the Legislative

Assembly – would ultimately mesh. “All these will work in an integrated manner,” he said. Mr Leong said the bill to amend the Land Law would change the way land premiums were calculated to take into account inflation and the adjudication price in public tenders, but did not say how much these new factors would count for. The bill would change the way

that developers are deterred from leaving land idle. For instance, if a plot was empty or contained only by ruins, the concession will not be renewed automatically. Any transfer of land would have to be approved by the government. This provision would apply equally to the transfer of the controlling stake in a company that had been granted land, Mr Leong said.

Proposed changes A land concession request would have to include economic and financial viability and environmental impact assessment reports Land tenure and land sale would be abolished and private use concessions introduced for public utilities The Land, Public Works and Transport Bureau would be in charge of supervising land concessions and development Timeframe to launch construction works after the licence is issued reduced form 30 to 15 days The chief executive would have the power to rescind concessions if developers used land for unauthorised purposes In land exchanges, the government would have to receive land worth at least half of that granted, in addition to financial compensation The maximum fine for delay in developing land would be up to 15 percent of the land premium

December 3, 2012 business daily | 3

MACAU

Economic growth wanes in third quarter Decline in gaming ‘exports’ and in visitor spending means weakest GDP expansion in three years Tony Lai

tony.lai@macaubusinessdaily.com

editorial

Got a broken tooth? Tough luck if you’re a ‘non-res’ Michael Grimes

michael.grimes@macaubusinessdaily.com

he city’s gross domestic product grew by 5.1 percent year-on-year in real terms in the third quarter, further slowing down from the 7.8 percent in the second quarter and 18.5 percent in the first quarter, according to the latest official data. The Statistics and Census Service said on Friday the main reasons for the sluggish performance in the July-September period was “decline in exports of gaming services and [the] slowing increase in total visitor spending”. The figure for the July-September period marks the weakest GDP quarterly growth in the three years since the global financial crisis. Macau’s GDP dropped for four consecutive quarters since mid-2008 and only rebounded in the third quarter of 2009, with a growth of 6.2 percent. It then grew by more than 20 percent in 2010 and 2011.

Francis Tam – predicting ‘single digit’ GDP growth (Photo: Manuel Cardoso)

Between July and September this year, exports of gaming services

suffered a slight drop of 0.1 percent year-on-year. It was the first fall in three years. This, as well as the lower growth of 2.3 percent in visitor spending, “contributed to a marginal rise of 0.6 percent in exports of services, far lower than the 19.1-percent increase in first quarter and the 5.6-percent rise in second quarter,” the bureau said.

Jobless fall

Inflation rate to ease next year Economic growth expected to slow: think thank boss

he inflation rate might go below five percent in 2013 – if the city’s economic growth only increases by a single digit in the period. That’s the view of Lao Pun Lap, the head of the Policy Review Office. Macau has so far largely been shielded from the global financial turmoil. As a consequence, the city’s gross domestic product growth next year will slow but should be stable, Mr Lao said on the sidelines of the 8th Pan Pearl River Delta Cooperation and Development Forum. Macau’s gross domestic product for the third quarter grew by 5.1 percent year-on-year, the slowest in the last three years, down from 23.3 percent in the equivalent period in 2011.

The slow down was due to a decline in exports of gaming services and deceleration in the growth of total visitor spending, according to data from the Statistics and Census Service. The inflation rate is also decelerating year-on-year due to the economic slowdown, said Mr Lao. The consumer price index in October showed an annual rise of 5.19 percent, which was still “high”, he added. Theheadoftheofficialthink-tanknoted that the cash handout scheme extended to 2013 would push up the inflation rate. Macau permanent residents will receive 8,000 patacas (US$1,000) next year, while non-permanent residents will get 4,800 patacas. S.L.

Another fall in the unemployment rate and a marked increase in employment income in the third quarter, helped private consumption rise by 9.1 percent, of which final consumption expenditure in the domestic market rose by 8.6 percent, while final consumption expenditure abroad increased by 10 percent, the data showed. Overall, GDP expanded by 10 percent in the first nine months of this year. In July the Secretary for Economy and Finance, Francis Tam Pak Yuen, forecast the city’s economy for this year would only maintain “a single-digit growth”, compared to 27.5 percent in 2010 and 21.9 percent last year. The secretary stressed at the time the expected slowdown was due to uncertainties clouding global economies and deceleration of growth in mainland China. But Stanley Au Chong Kit, chairman of the Delta Asia Financial Group, is more pessimistic about the city’s economic outlook. He told Business Daily last week the economic growth would slow down – or even contract – in the next five years. “I would not be surprised if there was even negative GDP growth,” Mr Au said. “The economy right now is too overheated and almost everyone has a job, creating labour shortage issues.” Though Macau experienced the poorest GDP performance in three years, the quarterly figure still outshines its neighbouring region Hong Kong. That city recorded a 1.3-percent GDP growth in the third quarter this year and the government there has cut its full-year growth forecast to 1.2 percent.

e’re often told that Macau is a unique blend of Chinese and European heritage. But does that simply mean rice served with olives? Or dare we hope that the best of China – the respect for tradition, the hard work and financial acumen of ordinary Chinese people – could be tempered in this community by the best of the European tradition? That means respect for our fellow humans, equality and the rule of law. Arguably what we have in Macau is the worst – not the best – of both worlds. That’s a Chinese population with the decadence of Europeans – always on the lookout for handouts and subsidies and seeking protection from competition from the bad world outside – and a Western population with the cynicism of the old European colonial system, privately despising their hosts but too filled with self interest or simply too grateful to be out of the economic hell hole that is the contemporary Western world to dare to speak out. In Macau, non-resident workers above a certain income threshold are subject to taxation but receive absolutely nothing from their nonresident status other than the right not to be arrested or deported. In Hong Kong, non-residents above a certain income are also taxed, but they are also given a legal identity and the right to use public hospitals subject to the payment of modest basic fees. Recently the Filipina helper of an acquaintance here in Macau – a legally documented nonresident – suffered a series of blackouts. But she was too afraid to use the public hospital for fear of racking up a huge bill. Apparently there was nothing in her terms of employment or immigration status that legally entitled her to any healthcare. In the end, several of us clubbed together to send her to hospital in Hong Kong. Macau generated the equivalent of US$33 billion in gross gaming revenue last year – with nearly 40 percent of that going into the public coffers. Can anyone produce any credible argument against non-residents receiving at least some basic healthcare – even if they are below the taxation threshold? After all, many of them are doing one of the most important jobs in society – caring either for the very young or the very old.

‘Western’ values The locals’ mean-spiritedness has even occasionally been aimed at non-permanent residents. A colleague tells me that at the local journalists’ federation some Chinese journalists suggested stripping nonpermanent resident members of their federation’s health insurance rights. That basically meant the Portuguese media workers. In some cases the local Chinese doing the urging had worked alongside the same Portuguese people for years. Charming. The Portuguese community must take some responsibility for this state of affairs. Their ease of access to non-permanent residency – and some of the government goodies that go with that – mean most of them have a vested interest in not rocking the boat by pushing for muchneeded social reform. A recent report by The Office of the High Commissioner on Human Rights at the United Nations states the following: “The Portuguese Constitution defines the right to health as universal and the public health care system is available to all residents [including irregular migrant workers], regardless of their nationality, legal status, or economic situation.” In other words, the rights that Portugal’s own constitution extends to migrant workers are apparently not worth agitating for when Portuguese people live abroad. So much for Western belief in human rights. There’s no money for non-resident health care in Macau, but apparently plenty of money to monitor and contain one washed up old thug – on the off chance that he might kill the goose that lays Macau’s golden eggs – its booming casino industry. It’s always useful to have a clear picture of exactly where a community’s priorities lie.

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business daily December 3, 2012

macau

Uptick in exports persists

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HOSPITALITY

Tony Lai

A good year?

tony.lai@macaubusinessdaily.com

Data for the first three quarters of this year suggest that the meetings, incentives, conventions and exhibitions (MICE) industry has regained some momentum, having lost steam last year. The number of exhibitions held in the first nine months was 42, seven more than in the equivalent period last year. At the same time the number of visitors jumped by 29 percent to just under 1 million. These seem to be positive developments. But the financial data lead to the conclusion that they are not quite as positive as they seem.

The MICE industry’s combined revenue increased by 94 percent, while its expenditure rose by 40 percent. The industry reduced its combined loss by about 20 percent. So at first glance everything looks rosy. But a closer look reveals a duller picture. Subsidies made up a large part of revenue. It is unclear from the data precisely where the subsidies come from, the amounts being labelled only as “subsidies from government and other sources”. One suspects that most come from the government, one way or another. For the sake of clarity, the sources should be distinguished. Anyway, subsidies are the fastestrising component of the industry’s financial report for the first nine months, increasing from 7.2 million patacas (US$901,967) last year to 33.5 million patacas this year. Without the enormous rise in subsidies, the industry’s losses would have jumped by almost 50 percent. Even after being subsidised at a rate of almost 1.00 pataca for every pataca of earned revenue, the industry’s combined loss in the first nine months was equivalent to about 39 percent of its revenue. J.I.D.

MOP 796,000 Average subsidy per exhibition, 2012 to date

The recovery in exports is due mainly to increasing sales of goods that do not originate in Macau

xports continue to recover, with the value of outbound shipments growing by onefifth year-on-year to hit 637 million patacas (US$79.6 million) in October, official data show. October was the ninth consecutive month of increases – meaning exports have had their longest winning streak since an 11-month rise between 2005 and 2006, when the textiles industry still played a dominant role. Exports in the first 10 months of this year grew by 21.5 percent from the equivalentperiodayearbeforeto6.8billion patacas, data published by the Statistics and Census Service on Friday show. The recovery was supported by the sale of goods made elsewhere, or re-exports, their value increasing by over one-third to 472 million patacas. Domestic exports slipped by 12.2 percent to 165 million patacas. The growth in exports was also due to sales of machinery and transport equipment, the value of which nearly tripled to 191.5 million patacas. In October last year exports of machinery and transport equipment were worth 64.5 million patacas and accounted for 12.1 percent of all exports. They accounted for more than 30 percent of exports in October this year. The value of sales of telecommu-

Re-exports prevented the trade deficit from growing faster in October

nications equipment grew to 82.9 million patacas. In October last year the value of such exports was 18.2 million patacas. Textiles and clothing exports remained weak in October, dropping by 11.8 percent to 74.5 million patacas. They have been in decline since the system of quotas for trade in such goods ended in 2004. Exports to mainland China grew quickly, sales rising by two-thirds to 131.4 million patacas. But Hong Kong remains Macau’s main market, taking nearly half of its exports, or 300.3 million patacas worth.

The value of imports in October was 9.5 percent higher than a year before at 5.9 billion patacas. Imports of mobile phones grew fastest, their value doubling to 546.3 million patacas from 240.9 million patacas. The mainland remained the city’s main supplier, the value of imports from there accounting for nearly onethird of the total, or 1.8 billion patacas. Imports from the European Union were worth 1.5 billion patacas. The trade deficit reached 5.3 billion patacas in October, 8.4 percent more than a year before. The trade deficit in the first 10 months of this year was 51.4 billion patacas.

End of EU benefits no loss to traders Vítor Quintã

vitorquinta@macaubusinessdaily.com

acau is set to lose privileged access to the European Union by 2014, and the bloc will keep a close eye on any attempts to circumvent anti-dumping measures, an academic has warned. In October the European Union issued a revised list of economies with privileged access to EU markets. The union levies reduced tariffs or none at all on imports from these economies. Places listed for three years running by the World Bank as having “high income” economies are to be removed

in 2014, including Macau. Zeng Lingliang, the director of Wuhan University’s international law institute, told Business Daily that this was natural as “Macau is already a developed region”. It would do little harm to Macau’s economy because the city sells very little to the European Union, he said on the sidelines of a conference here. The value of exports to the union has dropped by 90.4 percent in the past five years. Exports started falling fast after 2005, when the European Union

imposed anti-dumping duties on imports of leather shoes. Mr Zeng warned that the European Commission would continue keeping an eye on the city, even after 2014. “If there is any other situation in which goods are being sold below production price, there could be another investigation,” he said. The former head of the Office of the European Union to Hong Kong and Macau, Maria Castillo Fernández, told Business Daily in August there were no differences over trade between the union and Macau.

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December 3, 2012 business daily | 5

MACAU

Business, not muscle, now rules in modern junkets ‘Broken Tooth’ Koi doesn’t have right political connections to get back to top, suggest experts Michael Grimes

michael.grimes@macaubusinessdaily.com

Into the light – Wan Kuok Koi leaves prison

he release at the weekend of former Macau junket operator and convicted gangster Wan Kuok Koi after nearly 15 years in jail has presented the city’s VIP gaming sector to the world as a law enforcement issue. In other words, because a 1990s ‘baddie’ is now out of prison, that poses market risk that the violent turf wars of the period that occurred between junket operators will return. But a number of experts suggest that to understand what’s going on in Macau’s junket sector and what will happen in future, it’s more helpful to think in terms of modern Chinese politics and modern business models rather than what’s happened in the past or even in terms of reactive or even preventative policing. “The whole world has changed over the last ten years. And I think junkets have to accept that they are part of that global business environment,” says Paul Bromberg, chief executive of Spectrum OSO Asia, a company that conducted due diligence on applicants for junket licences in Singapore. He was speaking at the recent Asian Gaming & Hospitality Congress in Macau organised by Beacon Events. That reference to “change” covers both China in particular and the globalisation of business in general. Bumping up against China’s opening to the world in terms of global trade and the expansion of its middle class, is the fact that many restrictions of the old isolationist China are still in place – including limits on cross-border currency transactions. In modern Macau VIP rooms a bet of HK$20,000 per baccarat hand is virtually low rolling – yet it’s also close to the daily limit for personal cross-border movement of currency by Chinese citizens. It’s not hard to see under those circumstances how junkets manage to continue doing strong business in Macau. But China’s so-called ‘underground banking’ system extends well beyond the extension and collection of credit for gambling and is now a vital part of

the ‘official’ Chinese economy sources tell Business Daily. Simply to shut it down – as if it were purely a law enforcement issue – is neither practical nor politically desirable for China’s leadership, says Hoffman Ma, deputy chairman of Success Universe Group, which runs the Ponte 16 casino resort in Macau in a joint venture with Sociedade de Jogos de Macau SA. “Recently some accounts suspected of being involved in underground banking were frozen in China,” says Mr Ma. “It was just to alert people that ‘okay, you thought you were under the radar, but now you’re on our radar so behave’. They don’t want to stop everything happening. If China stopped this entirely, the impact might be ruining other things, like manufacturing industry.”

Underground, overground “Everyone is aware of the banking restrictions in China – because of the change in China’s leadership – that are making things more difficult for business in general and for the Macau VIP industry,” says Tony Tong, a former boss of Jibo Tech, a subsidiary of Jimei Group, one of the city’s leading VIP operators. He now runs a cross-border loans business – Tak Chun Finance Ltd – based in Hong Kong. “The VIP players are asset-rich. They have their money tied into real estate, shopping malls etc, and if the [state-owned] bank doesn’t allow them to collateralise on these assets, it means cash is very tight,” says Mr Tong. “When the banks were more relaxed these guys were able to pledge their mine, their shopping mall, their apartments, for cash. They used to be able to pledge up to 80 percent [of the book value] – then the bank reduced it to 50 percent.” Some of those collateralised loans went into Macau gambling, suggests Mr Tong. Under those circumstances, modern Macau junkets aren’t

necessarily gambling loan sharks but merely facilitators of VIP play. If the player loses, and can’t pay back the money, it might be the bank that comes knocking, not the junket. “Junkets increasingly want to access the capital markets,” says Luís Mesquita de Melo, partner at MdME Lawyers and former general counsel for Macau casino operator Sands China Ltd.

Improved image “They want to gain credibility, and they’ve been achieving a higher degree of sophistication in how they run their business,” he adds. One thing holding back that process is that Macau’s current junket regulations don’t envisage the creation of corporate entities. “There’s a restriction in the junket law for instance – which is that when a junket is a company, the shareholders can only be individuals. So it’s not possible to create a company group with structure. That creates a lot of issues when it comes to accessing the capital markets or creating a more sophisticated company group structure,” states Mr Melo. In light of an increasingly sophisticated junket industry integrated into the political and economic system of China, a mere blue collar gangster such as Mr Wan – from the days when gambling credit was extended in much smaller amounts and collection methods were frequently brutal – will not be allowed to disturb what amounts to a multibillion yuan industry. “I think the era of Broken Tooth – the pre-unification era – that influence is no longer here or very very little,” says Tony Tong. “Now the ‘big guys’ are different people. If you want to do business in China – including Macau – you have to have a good relationship with the central government.” “The only thing they [gangsters] fear in the world is the Chinese Communist Party,” says Au Kam San, one of a small group of pan-democrats

in the city’s Legislative Assembly and representing the New Democratic Macau Association.

New association not isolating ‘Broken Tooth’: legislator The launch of an association to represent VIP room operators was not an attempt to isolate Wan Kuok Koi, claimed one of the city’s legislators. “Macau’s associations are not functioning exactly as a political party, and usually do not exercise a strong binding power over its participants and members. So I don’t think that association is playing any real effect to isolate a particular person,” said Au Kam San of the New Democratic Macau Association. Mr Au was referring to the launch on Friday – just hours before Mr Wan’s release – of the Association of Mediators of Gaming and Entertainment of Macau, a group headed by retired gaming crimes investigation chief Kwok Chi Chung. “The release of Mr Wan will not change it [the gaming scene], nor make it chaotic. We’ll all be earning our profits,” Chau Cheok Wa, chairman of Sun International Group Ltd, said on the sidelines of the event. Mr Chau has been described as a former ally of Mr Wan. Joé Pereira Coutinho, legislator and honorary president of the association, told Business Daily: “I don’t have any particular opinion about that [Wan’s impact on gaming business and security]. But Macau is a society ruled by law, and it emphasises stability over everything. So frankly I don’t think we need to get so sensitive when seeing how close the association’s ceremony was held to the release of Wan Kuok Koi.” The public “does not need to be anxious” because of the release of Mr Wan, José Proença Branco, Commissioner General of the Unitary Police Service told Radio Macau in an interview.

Stephanie Lai

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business daily December 3, 2012

macau

Govt advised: restructure economy as growth slows

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Diminished power The consumption of energy is often considered a good indicator of economic activity. Over longer periods we expect improvements in energy efficiency to result in energy consumption rising more slowly than economic activity or population size. In economies with a large industrial sector, this assumption proves usually to be a good one. In economies such as Macau’s, which is small and where most income is generated one way or another by gambling and tourism, the connection may be more tenuous. A big portion of energy costs may be fixed costs, unrelated to the number of visitors or the revenue they generate. To make comparison easier, in the chart below the quarterly population, electricity consumption and real gross domestic product figures have been converted into indexes, all based on the first quarter of 2011. Because electricity consumption is highly seasonal, the figures were first smoothed out by converting them into a four-quarter moving average.

When measured against the population, the economy is not becoming any more energy efficient. Despite the rising efficiency of electrical appliances and equipment and campaigns to make people save power, average consumption per head is rising steadily. Conversely, GDP per unit of electricity rose fast last year, suggesting rapid increases in efficiency. Then it dropped suddenly, and when it began growing again, in the past two quarters, it grew more slowly than before, at a pace more like the rate of growth in electricity consumption. All of this suggests that the consumption of electricity may be a less valuable indicator of economic activity here than it is in more fully rounded economies. J.I.D.

7.2 %

Rise in electricity consumption per head, since 2011 Q1

Even though the Policy Address for 2013 promised a lot of support for the general public, it fell short of providing a long-term plan for the development of Macau, says economist Henry Lei Chun Kwok. For now, the city’s economy is shielded from the impact of the global financial crisis, but outside factors can still hamper Macau’s growth, says Mr Lei, an assistant professor of business economics. One of the factors to watch out for is the leadership change in Beijing, Mr Lei told Business Daily in an interview. The government here should have a long-term strategy to diversify the economy and focus on building new infrastructure to cope with more visitors, he said. Luciana Leitão

leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

The government’s policy address for next year was delivered last month, showing an increase in the number and amount of subsidies. But in terms of economic policies, how would you rate it? The government in this latest policy address has introduced quite a lot of support for the general public, including the middle class and senior groups. I believe that seniors should be the happiest group, since, as a whole, they can receive almost 60,000 patacas [US$7,516] per year. From the middle-class’s point of view, they will get substantial tax rebates. That is also good news, although it may not help very much to lessen the financial pressure if they are still paying a mortgage or other expenses. Another point worth highlighting is the reopening of applications for affordable housing and an adjustment of the upper limit of household incomes. So for a single-member household the ceiling will be 19,355 patacas per month, and that means over 80 percent of the income earners in Macau will be qualified to purchase an affordable unit. At least this group of people, if they haven’t purchased their house in the private market, will have a chance to apply for public housing at a price level which is one-fifth of the private one. It may be good news to them, but of course we are still not sure whether the government is going to increase significantly the number

of completed units in the coming years, after the completion of the current target, which is the 19,000 public housing units. We need to wait, but at least it is a good start. Another point is that the government has promised to study further the idea of Macau land for Macau people. That is probably a restriction to be imposed on ownership. This is also a good start, because it can restrict the current speculative activities. Some legislators have complained that while Secretary for Economy and Finance Francis Tam Pak Yuen emphasised the need for economic diversification, he did not announce concrete measures. What’s your take on that? Perhaps the government made housing issues its priority to lessen the financial pressure faced by the public, and quite a number of policies in this field were launched.

For the mass public, our purchasing power is being eaten up by inflation

I do agree with the comments of some legislators. Maybe the government will regard the foundation of the creative industries as part of [diversification] policies which will be launched next year. I regard this as the first step, starting from the cultural and creative industries. I’m not sure if this would be the future direction, but, probably, in the years to come, a similar kind of policy could be devised to encourage young people to start their own businesses, by providing them with some venture capital, support and government funding as a means to economic diversification. If young entrepreneurs have more chances to start their own businesses, then they may not need to join the gaming industry. Chief Executive Fernando Chui Sai On did announce an interestfree loan for young entrepreneurs. Could this be enough to propel diversification? Yes, but it only targets young people. Is it possible to extend it to others or to those with a good proposal? Perhaps it can be a first step. That is a good strategy, because young people are usually the most active group of the population. They may have more creative minds and they start probably from zero. But I think the government should be flexible on the definition of how they label young entrepreneurs.

December 3, 2012 business daily | 7

MACAU consider subsidising imported food, to set a certain price ceiling on daily necessities. Of course, it has to be very careful, otherwise the public may think the government is subsidising companies and the wholesalers. Careful studies have to be made before such a scheme is implemented. The government may actually try to promote some kind of welfare policy for the locals, like subsidising local retailers to provide discounts to residents. This is probably the kind of programme the government may consider. You can charge tourists more, but not residents.

A slowdown is expected after four or five years of rapid growth so the government should make the necessary adjustments to restructure

Secretary Tam also talked about future risks for the city’s economy if the growth of gaming revenue continues to slow. Will this really happen since the economy is so reliable on the casino industry? Globally speaking there is still a financial risk for every economy. For Macau, we may not be affected that much, simply because we are not a financial hub. We don’t have this sort of business at all in Macau. We have traditional financing for projects and don’t have a big financial sector. That means that, as long as we have a stable tourism income from mainland China, we can survive. So, the fact that the global economy is in a bad shape will not have an impact on Macau? I don’t think it could bring about a big impact to the local economy, as long as we can maintain the current dynamic growth. Maybe a slowdown is expected after four or five years of rapid growth so the government should make the necessary adjustments and restructure. Considering we are heavily dependent on mainland Chinese tourists, will the leadership changes in Beijing affect Macau’s economy? The policies imposed by the central government are a crucial factor for our growth and development. If the Chinese government observes a big outflow of money to the casino sector and feels uncomfortable, it might tighten control of the tourist outflow and that may affect our gaming sector. The wellbeing of the Macau economy depends on policies of the mainland government rather than the global economic environment. Of course we may suffer a bit the indirect impact of global instability because of the economic slowdown faced by China, but still the central government policy is the dominant factor behind our growth and development. The local government, to be honest, cannot do much. If the central government tightens up, we can do nothing at all. If the government here takes measures to diversify the city’s tourist market, could this be a

solution to lessen the dependency on mainland China? To be honest, it takes a lot of time. You need to have the facilities to attract different sorts of tourists, rather than just those big players in the casinos. Still, there is no ongoing project for theme park facilities, nor even new infrastructure, except for the light rail transit. The government has no plan, even though it has mentioned quite a number of times a new bridge or a tunnel connecting Taipa to Macau. This is necessary for the process of diversification. You need to have good infrastructure to attract tourists. When it comes to infrastructure development, the government should have a longterm plan. The chief executive has extended the cash handout scheme to next year and increased the amount. Is this a wise policy? Of course it can help the poorer class, but I believe that as a whole it tends to worsen inflation. I have already heard some rumours that local restaurants are preparing to increase prices immediately: the government is paying more, so I charge you higher. This is a direct impact. Residents seem to be divided about these cash subsidy schemes. But they have got used to the government giving them such a big sum of money every year. That’s why it may be hard for the government to cancel this policy in the near future, unless it can develop a new programme that actually provides for the long-term welfare of the population. Some middle-class people may not like to see these short-sighted cash subsidies. For instance, a few thousand for the middle class may not help much. We may need more to purchase a home and these 8,000 patacas may not help much in supporting the burden of mortgage repayment. For this reason, the middle class may want to have a replacement policy that can bring better retirement benefits. Of course it can help those on lower incomes, and can represent one or two months of general housing expenses for the poor. But in my opinion reform should be considered, because over time

the government cannot give cash continuously to the public. The problem is that the public may expect to receive more and more from the government as time goes by. What can the government do, then, to provide support to the public and also control rising inflation? Perhaps the government should

Rising inflation is a topic constantly on the official agenda. In the 12 months ended October, the average annual rate of consumer price inflation was 6.26 percent. Are people here losing purchasing power? Yes, definitely. Take civil servants’ salaries for example. The inflation rate has been higher than the salary adjustment. Increases in salaries are limited to the tourism and casino-related sector. For the mass public, our purchasing power is being eaten up by inflation. How long does it take a fresh graduate from the university to get enough money for a down payment, and how long does it take him to settle the mortgage? If you take into account the costs of living, like rents or buying a house, there is no precise information, as the government has not done any detailed study.

8 |

business daily December 3, 2012

macau NPC deputy joins MGM China board A former adviser to the Hong Kong government and current deputy with China’s 11th National People’s Congress has been appointed a non-executive director of MGM China Holdings Ltd. The filing with the Hong Kong Stock Exchange said Peter Wong Man Kong would sit on several company committees covering audit, remuneration and nomination and corporate governance. The operator recently announced it had been granted a land concession for a new resort on Cotai. It is still negotiating with the government on politically sensitive issues such as gaming table allocation for the venue in the face of the new table cap due to take effect from January.

Cheap hotel rooms predicted to double Over 20 low-cost hotel projects are under review, the tourism chief reveals Vítor Quintã

vitorquinta@macaubusinessdaily.com

f all goes well, the city could double its number of low-cost hotel rooms in the near future, João Manuel Costa Antunes, the Macau Government Tourist Office director, said on Friday. “We have three applications being reviewed,twoofwhichareforexpansion,” he told the Legislative Assembly. “There are 18 more requests for budget hotels to be built in the future,” the official added during the Policy Address for 2013 on social affairs and culture. Macau has 1,480 low-cost hotel rooms, less than 6 percent of the 26,083 rooms available at the end of September. “If all these projects are approved and put into action, we might be able to double the number of budget hotel rooms,” Mr Costa Antunes said. He said the government supported the development of low-price hotels near the new border crossing in Ilha Verde, and noted that it had set up a website that allowed visitors to book rooms in low-cost hotels. Legislator Kou Hoi In has criticised the government for the low average length of stay of visitors and said: “One of the reasons is obviously hotel prices.” Mr Costa Antunes said: “The city receives 28 million visitors a year, but

Macau has 1,480 low-cost hotel rooms, less than 6 percent of the total number

only half stay overnight and still the occupancy rate is over 80 percent. It’s clear we lack not only budget hotels but hotels of any scale.” He said the government could not

play the same role in the industry as the private sector. “Every week we have at least one meeting with hotel project applicants. What happens very often is that the

Two-weekend grand prix to mark diamond jubilee Next year’s Macau Grand Prix will last for two weekends and special races will be held as the city celebrates the event’s 60th anniversary

ext year’s diamond jubilee Macau Grand Prix will last for two weekends, a longerthan-usual schedule that matches the duration of the celebrations of the event’s 50th anniversary, Secretary for Social Affairs and Culture Cheong U has said. “In the first week we will have two days of races at the weekend,” the official revealed on Friday, the second day of his Policy Address for 2013 at the Legislative Assembly. The schedule will include a “Greater China race to celebrate the MSAR anniversary, inviting drivers from mainland China, Hong Kong and Taiwan to celebrate together with us,” he said. The organisers would invite “important racing personalities” that had already made their way round the Guia circuit for a special

race, Mr Cheong said. “In the following week it will be like the normal Grand Prix, with races from Thursday to Sunday,” he said. According to TDM, this year’s event had direct revenue of 39 million patacas (US$4.9 million), 11 percent more than last year’s. The event had a record budget of 160 million patacas. A study commissioned by the government in 2003 found that the event generates through television coverage fees and visitor spending a return five times higher than the investment in it. Mr Cheong said the Grand Prix had become “a Macau brand” and “part of our collective memory”. But legislator Kou Hoi In said residents remained indifferent to the event, except for the traffic jams it caused.

Mr Cheong thanked the people for their “tolerance and understanding of the traffic problems” caused by the races. He promised to transform next year’s grand prix into “a carnival for the Macau population”. V.Q.

projects are not ready,” he added. “We are very careful with fire and construction safety. We have to be strict in our requirements,” Mr Costa Antunes said.

Casinos rush to bid for smoking areas All six gaming concessionaires have asked for approval to create smoking areas in their casinos, Lei Chin Ion, the director of the Health Bureau, has said. “Up to this moment the six concessionaires have already put requests forward to the chief executive to create smoking areas,” he told the Legislative Assembly on Friday. “We will assess the requests so that later the chief executive can make a decision,” Mr Lei said during the Policy Address for 2013 on social affairs and culture. Legislator Angela Leong On Kei, who is also a director of casino operator SJM Holdings Ltd, reiterated her call for a total ban on smoking inside casinos. In response, Mr Lei said that the government would treat casino premises just like any others covered by the indoor smoking ban, with the exception of the smoking areas approved and established by December 31. V.Q.

December 3, 2012 business daily | 9

MACAU

Homebuyers rush to beat new curbs The number of homes sold and the prices paid for them rose in October Tony Lai

tony.Lai@macaubusinessdaily.com

he number of homes sold rose to another peak in October, and so did the prices paid for them, as homebuyers rushed to close deals before curbs meant to cool the property market came into force, the government has said. Data released by the Financial Services Bureau on Friday show the number of sales reached 1,890 in October, half as many again as in September. This was the most since June last year, when the special stamp duty on the resale of homes was introduced. In that month 2,009 homes were sold. The peak in October showed that buyers were keen on closing deals before the new cooling measures came into force on October 30, the bureau said in a written statement. Since October 30 non-residents and companies have had to pay an additional stamp duty of 10 percent when buying properties here.

MOP 72,770

Average price per sq. m. of residential space in October

Anticipation of the new round of curbs, which include tighter limits on mortgage lending, meant demand pushed the average price per square metre of residential space up to 72,770 patacas (US$9,096), the most since the bureau began compiling monthly figures. The average price per square metre was 10,000 patacas more than what it was in September and about 75 percent more than what it was a year before. The price rise was due in part to the fact that â&#x20AC;&#x153;a few of the transacted flats were located in some high-end real estate projects,â&#x20AC;? the bureau said. The average price per square metre for the more than 1,500 homes sold on the peninsula rose by one-quarter from September to 70,985 patacas. The bureau said prices on the peninsula had been pushed up by nearly 500 flats in Areia Preta having been sold at an average price of over 90,000 patacas per square metre. The flats are in the high-end Pearl Horizon development, which has nearly 700 homes, according to the records of Centaline (Macau) Property Agency Ltd. Prices on the peninsula were also pushed up by the sale of 69 flats in the NAPE area for an average price of more than 124,000 patacas per square metre. The rise in home prices on Taipa and Coloane was slower. The average price per square metre on Taipa went up by 3.5 percent to 75,406 patacas. The average price per square metre on Coloane rose to 87,247 patacas.

10 |

business daily Dcember 3, 2012

GREATER CHINA

Manufacturing expands for a second month Output expected to be further boosted as optimism for recovery grows

hina’s official manufacturing index rose to the highest level in seven months as new orders and export demand climbed, underscoring optimism the economy is recovering after a seven-quarter slowdown. The Purchasing Managers’ Index was 50.6 in November, the National Bureau of Statistics and China Federation of Logistics and Purchasing said on Saturday in Beijing. A reading above 50 indicates expansion. The report reduces pressure on China’s new leadership to roll out more policies to support a growth rebound as they push ahead with overhauling state-owned enterprises and boosting consumption. Confidence in China’s economy is at the highest in more than a year amid faith that Xi Jinping’s administration will improve the investment climate, a Bloomberg investor poll last week showed. “It’s especially encouraging that the rise in the PMI was mainly driven by new orders, which suggests output will be further boosted in coming months,” said Lu Ting, chief Greater China economist at Bank of America Corp. in Hong Kong. “Beijing will maintain the current policy stance, which is featured as marginally pro-growth without big-bang stimulus.”

First expansion Mr Lu said he expects no cut in interest rates and at most one reduction in banks’ reserve requirement ratio before the end of the year.

He estimates economic growth will accelerate to 7.8 percent in the fourth quarter from a year earlier after a 7.4 percent pace in the previous three months, which was the slowest in three years. The preliminary November reading of a separate manufacturing survey from HSBC Holdings Plc and Markit Economics, which focuses more on smaller businesses, showed the first expansion in 13 months. The final figure is due today. The yuan had its fourth monthly gain, its longest winning streak in more than a year, on signs economic growth is recovering. The currency climbed 0.2 percent in November to 6.2267 per dollar in Shanghai and on November 27 reached the highest level since China unified official and market exchange rates in 1993. The federation’s PMI is based on responses from purchasing managers at 820 companies in 31 industries. The report showed a gauge of new orders expanded for a second month to its highest level since April after contracting for the previous five

50.6

Purchasing Managers’ Index in November

Supportive policies have led to a gradual rebound of the manufacturing sector

months, while the output sub-index was the highest in six months at 52.5.

‘Moderate rebound’ A measure of export orders rose above 50 for the first time since May, with gains boosted by Christmas demand, the federation said in a separate statement. “Economic growth will continue to maintain a moderate rebound,” Zhang Liqun, a senior researcher at the Development Research Centre of the State Council, said in the federation’s release. The data “indicate that destocking is now shifting to restocking, which means industrial production will continue to ramp up.” Among respondents to the November 27 quarterly global poll of

862 investors, analysts and traders who are Bloomberg subscribers, 72 percent see the Chinese economy improving or remaining stable, up from 38 percent in September’s survey. Fifty-three percent said they’re more optimistic about the effect of Mr Xi’s policies on investors, up from 42 percent who were asked in September about President Hu Jintao. China’s gross domestic product may expand 7.7 percent in the fourth quarter from a year earlier, the first acceleration in eight quarters, according to the median estimate of 29 analysts in a Bloomberg survey. Economists have scrapped projections for any easing of monetary policy in the rest of 2012. Bloomberg

Reform needed as advantages wane: Yao To transform the growth pattern and raise domestic demand

We haven’t made substantial and fundamental progress Yao Jingyuan, former chief economist at the National Bureau of Statistics

hina must pursue reform to keep its economy “full of vigour” as the demographic advantages that helped boost the nation’s growth wane, said Yao Jingyuan, the former chief economist at the statistics bureau. “The demographic dividend is dwindling sharply,” Mr Yao said at a conference in Beijing yesterday, referring to the economic benefits that arise from decades where an economy has a higher proportion of working-age citizens. “We are left only with the reform

dividend,” said Mr Yao, who was chief economist at the National Bureau of Statistics for a decade until his retirement last year. Mr Yao’s comments underscore calls by Vice Premier Li Keqiang, promoted last month to the No. 2 spot in the ruling Communist Party, that three decades of economic opening must be accelerated as the push to overhaul the economy encounters obstacles. Rising labour costs, environmental protection and yuan appreciation have curbed China’s export competitiveness and investment-driven growth has

led to overcapacity and a declining share of consumption in the nation’s economy, he noted. “We haven’t made substantial and fundamental progress” in transforming the country’s growth pattern and raising domestic demand, a need that was highlighted as far back as the Asian financial crisis in 1997, said Mr Yao, who is a councillor to the State Council, China’s cabinet . “We are now back in the same place where we’ve had a change in the external environment and a recession in developed countries. Our factories

have had to slash production or shut down: we coughed when they got sick.” Investment growth has outpaced consumption for years, posing dangers including higher bad debts, overcapacity, lower profitability, environmental degradation, social instability and external imbalances, according to the World Bank and International Monetary Fund. The global financial crisis exposed the risks to China’s economy from its dependence on exports, as shipments fell for 13 months and about 20 million migrant workers lost their jobs. Consumption, which includes government and household spending, fell to 49.1 percent of gross domestic product in 2011 from 59.6 percent in 2002. Last year’s figure was close to the lowest contribution since China’s reform and opening policy started in 1978, government data show. “China’s economic growth in the past 30 years was mainly driven by the demographic dividend and reform dividend,” Mr Yao said. China’s era as an economy with low input costs is gone forever, he added. “How to keep China’s economy full of vigour in the future and how to increase the reform dividend are the most important tasks in the next stage. Every step forward is difficult.” Bloomberg

December 3, 2012 business daily | 11

ASIA

Japan in second stimulus package

S.Korea exports in fragile recovery

Government announces US$10.7 billion in fresh spending Mayumi Otsuma

and increase public works investment to create jobs, spur growth and end more than a decade of deflation. Economy Minister Seiji Maehara said earlier this month that using reserve funds from this fiscal year’s budget won’t be enough to support the economy.

South Korean exports last month marked their first back-to-back growth of the year, but demand from the advanced economies was weak, data showed on Saturday, indicating any global recovery would be fragile at best. November exports grew by 3.9 percent over a year earlier to US$47.8 billion on top of a revised 1.1 percent rise in October, while imports last month rose by 0.7 percent to US$43.3 billion, the Ministry of Knowledge Economy data showed. The ministry’s data showed South Korea ran a trade surplus of US$4.48 billion for November.

New spending

Japan’s economy shrank in the July to September period

apan’s cabinet approved a second round of fiscal stimulus worth 880 billion yen (US$10.7 billion) using budget reserves as Prime Minister Yoshihiko Noda attempts to boost the economy before elections on December 16. Combined with a first round of stimulus announced last month, the latest measures will increase Japan’s gross domestic product by about 0.4 percentage point, the Cabinet Office said in Tokyo last Friday. The latest package includes deregulation and other policies that won’t require fresh spending, it said. Mr Noda’s ruling party and the main opposition Liberal Democratic Party, which polls suggest may win the election next month, have pledged more spending after the election as

falling October retail sales and exports suggest that the economy is in recession even as industrial production rose for the first time in four months. Any large-scale fiscal stimulus could worsen Japan’s debt, the largest in the world at more than twice GDP. “The attention of financial markets is already shifting to economic stimulus to be drafted by a post-election government, which could be at least 5 trillion yen,” said Azusa Kato, an economist at BNP Paribas SA in Tokyo. “Public works projects would have an immediate effect to prop up growth, though whether such an oldstyle remedy would be a good choice in the long-run is a different story.” LDP leader Shinzo Abe said last week that he wants to issue bonds

The latest package contains measures for child care, helps small companies borrow, and provides support for reconstruction in areas hit by last year’s earthquake and tsunami. Thetotalsizeofthepackageis1.2trillion yen if spending by local governments and private companies is taken into account, the finance ministry said. Under the plan, the government will make it easier for lenders and companies to utilise the government’s dollar-loan programme, allowing firms to borrow to support overseas subsidiaries that are affected by natural disasters, riots or other events. The lending facility is worth 10 trillion yen and uses the nation’s foreign reserves to support overseas mergers and acquisitions and resource purchases by Japanese companies. The loan programme will also open credit lines for regional banks and the Development Bank of Japan. Japan’s economy may fall into a recession in the three months ending December, based on the definition of a recession as two consecutive quarters of contraction. Gross domestic product will decline 0.4 percent in the period, according to a Bloomberg survey of economists, after shrinking 3.5 percent in the previous three months. Japanese recessions are officially defined by a government-charged panel that considers data beyond figures for GDP. Bloomberg

India economic growth rate slows

Australia’s growth may have moderated Growth in Australia, the world’s biggest exporter of iron ore and coal, may have slowed last quarter as commodity prices fell, Treasurer Wayne Swan said before a government report on gross domestic product this week. “We shouldn’t be surprised to see growth moderate from its above-trend pace in the first half of the year given the impact of difficult global conditions and the sharp decline in commodity prices,” Mr Swan said yesterday in his weekly economic note. GDP probably expanded 3.1 percent in the three months to September 30 from a year earlier, according to the median estimate of 25 economists surveyed by Bloomberg News.

Suu Kyi to probe mine dispute Myanmar’s president asked opposition leader Aung San Suu Kyi on Saturday to head an investigation into the planned expansion of a copper mine that has led to evictions and protests that were forcibly put down by riot police last week. Activists said at least 50 people were injured on Thursday. A statement on the website of the president’s office said he had set up a commission led by Ms Suu Kyi with a broad remit to look into whether the expansion of the mine should go ahead and into measures taken to control the protests.

Manufacturing almost flat as economy heads for decade low

ndia’s economy extended its long slump in the last quarter, with lower-than-expected growth keeping it on track for its worst year in a decade and underscoring the urgency of politically difficult reforms to spur a revival. The economy grew 5.3 percent from a year earlier in the July-September period, provisional gross domestic product (GDP) data showed on Friday, below the 5.5 percent posted for the three months ending in June. “It is essential that the reform agenda is carried forward with vigour and that the recently announced measures are implemented,” leading business chamber FICCI said. Prime Minister Manmohan Singh’s chief economic advisor forecast full-year growth of between 5.5 and 6 percent, which would be the slowest since 2002/3.

“It will be between the two, because in order to get 6 percent we really need very strong growth in the second half,” advisor C. Rangarajan told TV network CNBC. A growth rate below 6 percent for the third quarter in a row is damaging for a country that aspires to at least 8.5 percent expansion to provide jobs for its burgeoning population, and makes it tougher for Mr Singh to fund flagship welfare programmes. The quarterly number was lower than a Reuters poll had forecast and matched the January-March quarter, which was the weakest growth rate in three years. However, economists say inflation worries mean the Reserve Bank of India (RBI) is unlikely to cut interest rates when it meets on December 18. Facing the prospect of the downturn stretching into a general election due

in 2014, Mr Singh launched some of the most daring initiatives of his eightyear tenure in September, including raising subsidised diesel prices and opening the airline and retail sectors to foreign players. These moves are likely to encourage investment going forward, and Friday’s figures showed capital formation at 33.8 percent of GDP, its highest for at least two years. Despite the current gloom, most economists expect the businessfriendly measures to help investment to gradually pick up and the economy to slowly recover next year. “We are getting close to the bottom, although we are most likely talking about a `bathtub shaped’ recovery with some bottom scraping in coming quarters,” HSBC Global research said in a note. Reuters

Najib rallies party for battle Malaysia Prime Minister Najib Razak rallied support from his political party, signalling it’s recovered and ready to defend its 55-year grip on power after a narrow victory four years ago. “We will be going to the battlefield not too long from now,” said Mr Najib, speaking at the close of the United Malays National Organisation’s annual assembly in Kuala Lumpur yesterday. “We will have to fight the war and that means we must make sure our team is strong and united.” Mr Najib must dissolve parliament for polls by April 28 after his ruling coalition won the 2008 election by its narrowest margin since the country gained independence.

12 |

business daily Dcember 3, 2012

MARKETS Hang SENG INDEX NAME

NAME

PRICE

DAY %

VOLUME

30.15

-1.147541

78445063

CHINA UNICOM HON

3.3

1.538462

20254676

CITIC PACIFIC

BANK OF CHINA-H

3.27

0.9259259

417770335

BANK OF COMMUN-H

5.68

1.974865

38350058

BANK EAST ASIA

29.9

1.184433

2360853

16.28

0.2463054

AIA GROUP LTD ALUMINUM CORP-H

BELLE INTERNATIO BOC HONG KONG HO

27046772

9.79

-0.2038736

6289477

SANDS CHINA LTD SINO LAND CO

POWER ASSETS HOL

0.592154

3920431

16.58

1.221001

54221378

COSCO PAC LTD

10.94

-0.3642987

5863730

19907336

ESPRIT HLDGS

12.04

-0.9868421

18749654

TENCENT HOLDINGS

HANG LUNG PROPER

-1.039501

15789869

-1.161103

3706962

HANG SENG BK

CHEUNG KONG

118.3 -0.08445946

4747366

HENDERSON LAND D

7.82

1.164295

20350212

5.94

0.5076142

311745286

CHINA LIFE INS-H

22.85

0.8830022

32188466

CHINA MERCHANT

23.5

-0.8438819

4395899

SUN HUNG KAI PRO

DAY %

68.2

-0.4379562

VOLUME 3173939

33.05

-1.490313

9925445

1.30246

6831300

113.4

-0.6134969

6635523

-0.2624672

2129832

253.2

-0.8613939

4124562

SWIRE PACIFIC-A

28.4

0.8880995

10053276

TINGYI HLDG CO

22.65

0.6666667

4514966

0.254022

1715604

WANT WANT CHINA

11.32

-1.22164

13138546

WHARF HLDG

59.65

1.618399

5958460

55.2

-0.1808318

3538999

HENGAN INTL

-2.166317

2997450

HONG KG CHINA GS

-1.408451

8292776

HONG KONG EXCHNG

123.8

-0.8012821

20236338

HSBC HLDGS PLC

78.75

1.416613

24368096

88.6

0.2829655

19524550

HUTCHISON WHAMPO

79.7

0.5678233

5822721

27736555

IND & COMM BK-H

5.23

0.7707129

290550375

CHINA PETROLEU-H

8.22

1.231527

77686611

LI & FUNG LTD

12.76

1.430843

21534410

CHINA RES ENTERP

27.65

-1.776199

6455542

MTR CORP

30.95

0.3241491

3248626

MOVERS

0 22090

INDEX 22030.39 HIGH

22087.61

LOW

21632.41

20.7

3.5

18170090

NEW WORLD DEV

12.28

0.1631321

18057261

52W (H) 22149.69922

CHINA RES POWER

17.38

1.046512

4862590

PETROCHINA CO-H

10.38

1.764706

93654406

(L) 17821.51953

CHINA SHENHUA-H

31.75

1.11465

14332434

PING AN INSURA-H

58.65

1.295337

13787195

CHINA RES LAND

PRICE

118.4

22.95

CHINA OVERSEAS

NAME

67.95

23.8

CHINA MOBILE

VOLUME

0.4991681

CLP HLDGS LTD

13.62

CHINA CONST BA-H

DAY %

12.08

CNOOC LTD

CATHAY PAC AIR CHINA COAL ENE-H

PRICE

21630

28-November

30-November

Hang SENG CHINA ENTErPRISE INDEX NAME

PRICE

DAY %

VOLUME

CHINA PACIFIC-H

25.4

2.21328

18175540

YANZHOU COAL-H

14213716

CHINA PETROLEU-H

8.22

1.231527

77686611

1.538462

20254676

CHINA RAIL CN-H

8.64

3.597122

25.8

3.2

13585003

CHINA RAIL GR-H

4.51

3.27

0.9259259

417770335

CHINA SHENHUA-H

31.75

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.4

0.8902077

116794962

AIR CHINA LTD-H

5.19

2.165354

3.3

ANHUI CONCH-H BANK OF CHINA-H

ALUMINUM CORP-H

NAME

PRICE

DAY %

VOLUME

11.86

0.3384095

21861063

ZIJIN MINING-H

3.12

1.298701

32825117

27624264

ZOOMLION HEAVY-H

9.97

2.466598

17089894

5.620609

61568304

ZTE CORP-H

11.7

0.1712329

4670980

1.11465

14332434

5.68

1.974865

38350058

CHINA TELECOM-H

4.22

0.7159905

59616000

19.88

3.433923

4542972

DONGFENG MOTOR-H

10.9

-0.1831502

53340226

1.265823

52756188

GUANGZHOU AUTO-H

6.31

1.610306

16980492

CHINA COAL ENE-H

7.82

1.164295

20350212

HUANENG POWER-H

6.57

2.816901

25236891

CHINA COM CONS-H

7.06

3.367496

32528709

IND & COMM BK-H

5.23

0.7707129

290550375

CHINA CONST BA-H

5.94

0.5076142

311745286

JIANGXI COPPER-H

19.9

2.471679

13705404

CHINA COSCO HO-H

3.55

-1.933702

18445196

PETROCHINA CO-H

10.38

1.764706

93654406

22.85

0.8830022

32188466

PICC PROPERTY &

9.97

1.321138

15814213

CHINA LONGYUAN-H

5.12

0.1956947

17166000

PING AN INSURA-H

58.65

1.295337

13787195

CHINA MERCH BK-H

14.84

1.36612

25750323

SHANDONG WEIG-H

8.01

0.125

10409000

BANK OF COMMUN-H BYD CO LTD-H CHINA CITIC BK-H

CHINA LIFE INS-H

NAME

MOVERS

0 10660

INDEX 10622.67 HIGH

10650.89

LOW

10346.02

7.6

1.468625

40764594

SINOPHARM-H

24.05

-0.4140787

4194570

52W (H) 11916.1

CHINA NATL BDG-H

10.12

3.476483

69358877

TSINGTAO BREW-H

43.6

0.9259259

3007800

(L) 8987.76

CHINA OILFIELD-H

15.48

4.73613

10010188

WEICHAI POWER-H

29.15

4.293381

5219332

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

4.78

3.239741

48315285

SANY HEAVY INDUS

8.15

-0.122549

22815204

CHINA MINSHENG-H

10340

28-November

30-November

Shanghai Shenzhen CSI 300 NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.6

-1.515152

51548022

CSR CORP LTD -A

AIR CHINA LTD-A

4.66

-0.6396588

19672519

DAQIN RAILWAY -A

6.3

1.77706

24790444

SHANDONG DONG-A

37.5

-0.07993605

1454826

ALUMINUM CORP-A

4.59

0.4376368

6731271

DATANG INTL PO-A

3.96

3355527

SHANDONG GOLD-MI

36.86

1.069372

6303567

ANGANG STEEL-A

3.39

1.19403

9797923

EVERBRIG SEC -A

10.2

0.6910168

10930409

SHANG PHARM -A

10.12

0.3968254

5580062

26370763

GD POWER DEVEL-A

2.32

1.754386

41642089

SHANG PUDONG-A

7.46

0.6747638

38822287

ANHUI CONCH-A

16.48

4.901337

NAME

BANK OF BEIJIN-A

7.2

0.2785515

14231938

GF SECURITIES-A

11.12

0.1801802

19013634

SHANGHAI ELECT-A

BANK OF CHINA-A

2.76

33053061

GREE ELECTRIC

23.47

3.620309

18565527

SHANXI LU'AN -A

BANK OF COMMUN-A

4.23

34196730

GUANGHUI ENERG-A

14.92

3.972125

19486097

SHANXI XINGHUA-A

BANK OF NINGBO-A

8.72

-0.6833713

9098657

HAITONG SECURI-A

7.91

1.801802

56181678

SHANXI XISHAN-A

BAOSHAN IRON & S

4.67

0.2145923

18838662

HANGZHOU HIKVI-A

27.35

0.9970458

1711686

SHENZEN OVERSE-A

0.2739726

2827746

1.26183

4566324

36.3

-2.837259

2815831

11.25

0.1780944

6401348

5.72

1.779359

48022832 21057746

15.43

3.765972

2488105

2.34

0.862069

25821870

SUNING APPLIAN-A

5.88

-0.1697793

CHINA CITIC BK-A

3.63

1.114206

11232951

HENAN SHUAN-A

54.71

0.1831166

1332429

TASLY PHARMAC-A

49.87

4.221526

1691286

CHINA CNR CORP-A

4.23

2.669903

46092140

HONG YUAN SEC-A

14.57

-2.017485

15885884

TSINGTAO BREW-A

29.91

1.630989

1899026

BYD CO LTD -A

HEBEI IRON-A

3.66 16.05

CHINA COAL ENE-A

6.8

0.8902077

7332176

HUATAI SECURIT-A

7.59

3.688525

27512197

WEICHAI POWER-A

22.07

2.986468

9525511

CHINA CONST BA-A

4.17

0.2403846

30365845

HUAXIA BANK CO

8.43

0.1187648

18555356

WUHAN IRON & S-A

2.65

3.515625

60802684 21952551

CHINA COSCO HO-A

4.2

2.189781

11323766

IND & COMM BK-A

3.88

42702868

WULIANGYE YIBIN

26.97

-0.8820287

CHINA CSSC HOL-A

19.16

-0.5192108

2873792

INDUSTRIAL BAN-A

12.66

0.7961783

39047367

YANGQUAN COAL -A

12.26

0.2452984

5103037

CHINA EAST AIR-A

2.98

-0.6666667

25869678

INNER MONG BAO-A

30.92

2.860945

25390412

YANTAI CHANGYU-A

41.12

-2.420503

1056025

YANTAI WANHUA-A

2.58

39070207

INNER MONG YIL-A

19.88

-0.6

5993224

12.99

1.405152

4945974

CHINA LIFE INS-A

17.65

2.437609

10125632

INNER MONGOLIA-A

4.82

1.048218

29287032

YANZHOU COAL-A

16.2

1.123596

1616228

CHINA MERCH BK-A

10.02

0.4008016

31279090

JIANGSU HENGRU-A

27.86

0.03590664

2374933

YUNNAN BAIYAO-A

63.19

0.6049992

1112411

CHINA MERCHANT-A

23.85

5.81189

12528617

JIANGSU YANGHE-A

99.8

2.886598

1657504

ZHONGJIN GOLD

14.95

2.117486

10301608

CHINA MERCHANT-A

8.29

0.8515815

10374904

JIANGXI COPPER-A

20.11

0.9538153

3476510

ZIJIN MINING-A

3.6

0.5586592

24417651

10.19

0.3940887

2069607

ZOOMLION HEAVY-A

7.95

0.6329114

34821346

ZTE CORP-A

7.75

-0.8951407

7062265

CHINA EVERBRIG-A

CHINA MINSHENG-A

6.29

0.4792332

76659162

JINDUICHENG -A

CHINA NATIONAL-A

7.08

5.200594

31329581

JIZHONG ENERGY-A

10.52

0.9596929

8481963

CHINA OILFIELD-A

15.02

1.144781

1876330

KANGMEI PHARMA-A

14.78

2.853166

14020364

CHINA PACIFIC-A

16.8

1.449275

13992637

KWEICHOW MOUTA-A

216.01

-1.491244

2137137

33.49

-0.6231454

4465105

1.005025

14893636

CHINA PETROLEU-A

6.02

0.8375209

10043491

LUZHOU LAOJIAO-A

CHINA RAILWAY-A

5.39

8.016032

36428881

METALLURGICAL-A

2.01

CHINA RAILWAY-A

2.86

5.147059

56406648

NINGBO PORT CO-A

2.45

11308742

PANGANG GROUP -A

3.16

1.282051

34563034 10969777

CHINA SHENHUA-A

21.73

0.1844168

7232926

CHINA SHIPBUIL-A

4.03

0.4987531

15505648

PETROCHINA CO-A

8.47

-0.3529412

12.8

0.4709576

MOVERS 238

15 2150

INDEX 2139.661

CHINA SOUTHERN-A

3.35

0.9036145

15210051

PING AN BANK-A

9664616

HIGH

2142.5

CHINA STATE -A

3.12

2.631579

97640104

PING AN INSURA-A

36.48

2.242152

13137846

LOW

2113.56

CHINA UNITED-A

3.17

0.3164557

52191259

POLY REAL ESTA-A

11.47

3.333333

59667871

CHINA VANKE CO-A

8.75

3.795967

95192862

QINGDAO HAIER-A

11.16

2.762431

8236528

CHINA YANGTZE-A

6.36

0.792393

9792219

QINGHAI SALT-A

22.9

1.282618

2096261

10.01

2.142857

71954268

SAIC MOTOR-A

14.07

4.454343

36421891

PRICE DAY %

Volume

PRICE DAY %

Volume

CITIC SECURITI-A

52W (H) 2717.825 (L) 2109.963

2110

28-November

30-November

FTSE TAIWAN 50 INDEX NAME ACER INC ADVANCED SEMICON

NAME

25.3

2.016129

33356439

FORMOSA PLASTIC

24.35

2.959831

50240081

FOXCONN TECHNOLO

NAME

PRICE DAY %

76.5

0.6578947

12590795

TAIWAN MOBILE CO

101.5

1.5

11435380

Volume

104.5

6690203

TPK HOLDING CO L

464

1.199564

11404226 76884589

ASIA CEMENT CORP

37.35

1.356852

6582557

FUBON FINANCIAL

2.009274

30081930

TSMC

98.7

2.279793

ASUSTEK COMPUTER

320.5

1.584786

6815393

HON HAI PRECISIO

93.2

0.2150538

48623097

UNI-PRESIDENT

51.9

0.3868472

14175847

AU OPTRONICS COR

12.35

3.34728

149177547

HOTAI MOTOR CO

215

2.625298

1102408

11.25

1.351351

115388207

CATCHER TECH

UNITED MICROELEC

149

1.360544

24666283

HTC CORP

266

2.702703

33727863

WISTRON CORP

31.9

4.078303

13046282

CATHAY FINANCIAL

30.95

1.309329

25747847

HUA NAN FINANCIA

16.45

1.857585

14836587

YUANTA FINANCIAL

14.7 -0.6756757

34442079

CHANG HWA BANK

15.75

1.286174

11643100

LARGAN PRECISION

794

4.336399

2240486

YULON MOTOR CO

52.5 -0.1901141

4383482

CHENG SHIN RUBBE

74.1

0.270636

7090565

LITE-ON TECHNOLO

39.7

3.655352

14100170

4.417671

180342561

MEDIATEK INC

330.5

0.9160305

14160064

CHINA DEVELOPMEN

CHIMEI INNOLUX C

7.09

-1.253482

98457992

MEGA FINANCIAL H

22.75

0.886918

25938984

CHINA STEEL CORP

26.6

1.333333

40088848

NAN YA PLASTICS

51.4

0.1949318

11958528

CHINATRUST FINAN

16.85

1.812689

47415252

PRESIDENT CHAIN

149

-1.973684

2973350

CHUNGHWA TELECOM COMPAL ELECTRON DELTA ELECT INC

93.9

0.1066098

12651037

QUANTA COMPUTER

1.388889

18488073

19.65

6.793478

41322811

SILICONWARE PREC

31.45

1.451613

10624671

104

-2.803738

8302580

SINOPAC FINANCIA

12.2

1.244813

29958235

FAR EASTERN NEW

34.55

2.674591

39531606

SYNNEX TECH INTL

55.4 -0.1801802

18670369

FAR EASTONE TELE

72.8

1.111111

12791147

TAIWAN CEMENT

17.75

TAIWAN COOPERATI

FIRST FINANCIAL

38.05

2.010724

18374139

1.139601

21374034

0.6289308

21379930

FORMOSA CHEM & F

68.8 -0.2898551

9531508

TAIWAN FERTILIZE

75.6

2.300406

5253517

FORMOSA PETROCHE

88.3

3840001

TAIWAN GLASS IND

27.4

1.107011

2937475

0.3409091

MOVERS

1 5365

INDEX 5355.23 HIGH

5363.71

LOW

5210.2

52W (H) 5621.53 5200

(L) 4643.05 28-November

30-November

December 3, 2012 business daily | 13

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

MELCo CroWN ENTErTAINMENT

MGM CHINA HoLDINGS 39.6

29.8

14.6

29.6

14.5

29.4

39.4

29.2

14.4 14.3

28.0 Max 29.6

Average 29.354

Min 28.9

Last 29.55

28.8

Max 39.4

SANDS CHINA LTD

Average 39.4

Min 39.4

Last 39.4

Last 33.05

22.8

33.4

18.35

22.6

18.30

22.4

18.25

22.2

32.6

18.20 Max 18.36

Average 18.313

NAME

PRICE

WTI CRUDE FUTURE Jan13

88.91

0.953786761

-9.080683096

109.6699982

79.68000031

BRENT CRUDE FUTR Jan13

111.23

0.424340917

7.468599034

120.7699966

90.15999603

GASOLINE RBOB FUT Jan13

273.03

-0.113411868

10.38651249

293.3099985

218.4999943

953

0.236655272

6.331938633

1036.25

799.25

3.561

-2.384868421

-8.292557301

4.468000412

3.062000036

NATURAL GAS FUTR Jan13 HEATING OIL FUTR Jan13

DAY %

YTD %

(H) 52W

Min 18.24

Last 18.28

306.07

0.12430894

6.518410246

334.2199802

255.5699825

1714.98

-0.5336

9.5897

1796.08

1522.75

Silver Spot $/Oz

33.4125

-1.044

20.0377

37.4775

26.1513

Platinum Spot $/Oz

1602

-1.0256

14.8799

1736

1339.25

Palladium Spot $/Oz

683.5

0.6627

4.5907

725.19

553.75

LME ALUMINUM 3MO ($)

2094

1.453488372

3.663366337

2361.5

1827.25

LME COPPER 3MO ($)

7995

1.208937275

5.197368421

8765

7131

LME ZINC

2046

0.862706433

10.89430894

2220

1745

17650

3.823529412

-5.665419562

22150

15236

15.27

1.05890139

-0.553565614

16.60000038

14.60000038

752.75

-0.7907743

25.4060808

846.25

511

3MO ($)

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

WHEAT FUTURE(CBT) Mar13

Average 22.231

Last 22.15

Min 22.1

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

MACAU RELATED STOCKS 2.16

4053839

CROWN LTD

10.25

0.09765625

26.69963

10.34

7.92

1535839

18.65999985

AMAX HOLDINGS LT

0.066

-1.492537

-24.13793

0.119

0.055

10070000

66.84999847

BOC HONG KONG HO

23.8

-1.039501

29.34783

17.46

15789869

0.275

19.56522

0.335

0.204

560000

4.21

50.35715

4.36

2.5

27000

CHINA OVERSEAS

22.95

77.00961

23.3

12.066

27736555

COFFEE 'C' FUTURE Mar13

150.6

-3.708439898

-36.70939273

249

147.0999908

SUGAR #11 (WORLD) Mar13

19.34

-17.20890411

25.12999916

COTTON NO.2 FUTR Mar13

73.91

0.763462849

-16.49531126

98.5

NAME ARISTOCRAT LEISU

CENTURY LEGEND CHEUK NANG HLDGS

World Stock MarketS - Indices US

13025.58

3010.241

FTSE 100 INDEX

5866.82

DAX INDEX

NIKKEI 225

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

(L) 52W

1126.75

NASDAQ COMPOSITE INDEX

(L) 52W

1.0857 1.6309 0.9972 1.3487 84.18 8.0198 7.7864 6.3964 57.3275 32 1.3138 30.396 44.35 9664 88.637 1.24438 0.86134 8.5568 10.7914 111.44 1.0308

3.29

652

1781.5

DOW JONES INDUS. AVG

(H) 52W

2.1452 3.0239 1.0775 0.1929 -6.7532 0.2117 0.2206 1.0985 -2.2114 2.7353 6.2613 4.2163 7.4642 -5.708 -8.8085 0.9516 2.7507 0.3751 -0.2534 -6.9555 0.0097

(H) 52W

948.25

18.61088211

PRICE

DAY % YTD %

VOLUME CRNCY

CHINESE ESTATES

11.42

-3.872054

-8.64

13.26

8.3

3500

CHOW TAI FOOK JE

11.32

4.235727

-18.67816

15.16

8.4

27288784

EMPEROR ENTERTAI

1.74

0.5780347

56.75675

1.76

0.99

1980000

FUTURE BRIGHT

1.34

219.0476

1.43

0.38

3048000

YTD %

(H) 52W

(L) 52W

0.02887461

6.6136

13661.87

11735.19

GALAXY ENTERTAIN

29.55

-0.6722689

107.514

29.85

13.28

54592196

-0.05929562

15.54963

3196.932

2518.01

HANG SENG BK

118.4

0.254022

28.48616

120

91.15

1715604

-0.05928147

5.285809

5989.07

5229.76

HOPEWELL HLDGS

30.55

0.6589786

55.85019

31.091

19.049

2756361

7405.5

0.06134339

25.55206

7478.53

5637.53

HSBC HLDGS PLC

78.75

1.416613

33.47458

78.9

57.05

24368096

9446.01

0.4800614

11.71637

10255.15

8238.96

HANG SENG INDEX

22030.39

0.4903551

19.50702

22149.69922

17821.51953

CSI 300 INDEX

2139.661

1.13368

-8.785325

2717.825

TAIWAN TAIEX INDEX

7580.17

1.021117

7.184447

8170.72

KOSPI INDEX S&P/ASX 200 INDEX

1932.9

DAY %

YTD %

48.18181

17.64305177

PRICE

-0.325 -0.0312 -0.097 -0.0077 -0.4607 -0.0025 -0.0039 -0.0498 1.032 0.0326 0 0.2065 0.0662 0.1664 -0.1337 -0.0971 -0.0407 -0.7145 -0.1079 -0.4575 0

0.3076923

-2.48447205 -0.638812155

COUNTRY

DAY %

1.0428 1.6013 0.9281 1.2986 82.48 7.9827 7.7503 6.2266 54.265 30.71 1.2202 29.054 40.795 9618 86.008 1.20532 0.81108 8.1038 10.3783 107.11 1.03

3.26

863.5 1438.75

SOYBEAN FUTURE Jan13

NAME

22.0 Max 22.65

PRICE

(L) 52W

Gold Spot $/Oz

CORN FUTURE

-0.100783

5.869403

2057.28

HUTCHISON TELE H

3.45

2.071006

15.38462

3.88

2.83

6926000

LUK FOOK HLDGS I

23.25

0.4319654

-14.20664

34.3

14.7

5979040

MELCO INTL DEVEL

8.31

0.2412545

44.0208

8.35

5.12

2058000

2109.963

MGM CHINA HOLDIN

14.5

1.398601

51.16522

14.76

9.432

4768736

6609.11

MIDLAND HOLDINGS

3.59

-9.206946

5.217

3.249

2296000

NEPTUNE GROUP

0.156

40.54054

0.222

0.084

2680000

NEW WORLD DEV

12.28

0.1631321

96.16613

13.2

6.13

18057261

SANDS CHINA LTD

9925445

1750.6

4506.036

0.6321282

11.08021

4581.8

3985

4276.141

-0.9943076

11.88253

4381.746094

3635.283

FTSE Bursa Malaysia KLCI

1610.83

0.2183759

5.232796

1679.37

1448.54

NZX ALL INDEX

877.345

0.8068269

20.21713

877.773

712.548

JAKARTA COMPOSITE INDEX

14.2

CURRENCY EXCHANGE RATES

GAS OIL FUT (ICE) Jan13

METALS

Last 14.5

18.40

Commodities ENERGY

Min 14.32

33.6

32.8 Min 32.8

Average 14.432

WyNN MACAU LTD

33.0

Average 33.216

Max 14.5

SJM HoLDINGS LTD

33.2

Max 33.55

39.2

33.05

-1.490313

50.56947

33.95

20.35

SHUN HO RESOURCE

1.25

1.37

0.96

62000

SHUN TAK HOLDING

3.64

-1.886792

42.23593

3.77

2.418

11513544

SJM HOLDINGS LTD

18.28

0.8830022

46.17526

18.36

11.973

6022000

SMARTONE TELECOM

14.44

0.2777778

7.44048

17.5

12.96

1011500

WYNN MACAU LTD

22.15

-1.555556

13.58974

25.5

14.62

5937736

ASIA ENTERTAINME

3.36

-0.591716

-42.85714

7.24

2.4

162553

BALLY TECHNOLOGI

45.14

-1.634343

14.10515

51.16

35.79

756391 36932

PHILIPPINES ALL SHARE IX

3639.42

-0.06782193

19.51961

3653.51

2952.17

HSBC Dragon 300 Index Singapor

599.36

1.37

20.76

STOCK EXCH OF THAI INDEX

1324.04

1.104943

29.13433

1328.27

1006.16

HO CHI MINH STOCK INDEX

377.82

-0.1004759

7.472627

492.44

332.28

BOC HONG KONG HO

3.09

-1.277955

28.90106

3.3

2.24

Laos Composite Index

1196.44

33.01758

1249.34

876.33

GALAXY ENTERTAIN

3.79

-2.067183

102.6738

3.87

1.75

2550

INTL GAME TECH

13.87

-0.5021521

-19.36047

18.1

10.92

6976341

JONES LANG LASAL

82.01

0.7989184

33.87202

87.52

56.51

331218

LAS VEGAS SANDS

46.65

-0.5966333

9.173884

62.09

34.72

6153146

MELCO CROWN-ADR

15.26

0.1969796

58.62786

16.02

8.32

1809382

MGM CHINA HOLDIN

1.82

52.72387

1.96

1.1917

1200

MGM RESORTS INTE

10.15

1.398601

-2.684567

14.9401

8.83

9003314

SHFL ENTERTAINME

13.76

-0.3620565

17.40614

18.77

10.61

294471

SJM HOLDINGS LTD

2.33

-1.271186

44.939

2.36

1.5484

1000

WYNN RESORTS LTD

112.4

0.3302687

8.492636

129.6589

84.4902

958736

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

AUD HKD

USD

14 |

business daily Dcember 3, 2012

Opinion Carney for BOE should give central banks a clue William Pesek

Bloomberg View columnist

he Bank of England’s choice of a Canadian as its next governor sure makes you think. It was plenty interesting when Israel tapped U.S. economist Stanley Fisher, who was born in Northern Rhodesia, seven years ago. But the eighth-biggest economy reaching 3,500 miles across the Atlantic to hire Mark Carney raises central-bank head-hunting to a new level. It also could inspire more creative staffing at even bigger monetary authorities. Take China, which is on the lookout for a successor to Zhou Xiaochuan at the People’s Bank of China. It needs someone with the gravitas to liberalise a financial system that lacks a convertible currency and an international bond market, and faces daunting deregulation challenges. China also must keep its various bubbles from popping. How about Mervyn King? The man Carney will replace would offer new and useful ideas at a pivotal moment. In his nine-plus years guiding the BOE, King proved far more proactive than the European Central Bank and advocated bank reform. He was early in warning against the evils of moral hazard as bailout mania swept the West. Near the top of any list of risks to China’s future are the huge, state-run banks that tower over the economy. Reining in their excessive lending to political elites bent on self-enrichment would honour the spirit of Deng Xiaoping’s vision. King isn’t a perfect choice – the London interbank offered rate scandal unfolded on his watch – but then who is?

Australian synergy Glenn Stevens, the Reserve Bank of Australia governor, is worth a look. Since China is buying so much of Australia’s natural resources to fuel growth in ways that affect both economies, synergies abound. There are few more respected policy makers than Stevens, whose term ends next year. China could ask Kim Choong-Soo to leave his post at the Bank of Korea a year early. He has been a strong voice on the global stage and shunned the seniority-based promotion system that holds

Kong Monetary Authority chief. Both know a thing or two about holding off speculators. If you want more headlines, Japan’s Eisuke Sakakibara, a former Ministry of Finance official known as “Mr Yen,” is always around.

Swapping Bernanke

Zhou Xiaochuan, chief of the People’s Bank of China

much of Asia back. OK, so maybe this is all quite improbable. China’s Communist Party probably wouldn’t even hire someone from Hong Kong to manage mainland interest rates, never mind a Westerner. Nationalism and singleparty rule make for insularity when the time comes to fill top posts. Yet today’s problems are without precedent. The risk is that China names a predictable replacement for Zhou who acts timidly at a time when serious reform is needed. Think about it. How many major companies, when looking for exceptional leaders, look abroad? In the same vein, there is no good reason for central banks to confine their search for talent to national boundaries. Monetary policy in Washington, Frankfurt or Beijing has consequences far

The risk is that China names a predictable replacement for Zhou who acts timidly at a time when serious reform is needed

beyond the borders. Look at it another way: What’s the harm in a centralbanking version of visiting professorships? The faculties of the world’s great universities are filled with scholars from around the world. There’s lot of banking know-how out there. JeanClaude Trichet is a free agent, able to entertain offers now that he no longer heads the European Central Bank. For developing nations seeking a hard-money guy, Juergen Stark, who stepped down as the ECB’s chief economist, probably is available. Former Bundesbank President Axel Weber is back in the private sector. Perhaps he’s itching for a return to the public sphere. If your currency is under attack, you could ring up Philipp Hildebrand, former president of the Swiss National Bank, or Joseph Yam, the former Hong

Japan could use some fresh blood, too. Not since Governor Yasushi Mieno in 1989 has the Bank of Japan really surprised anyone. Japan is sick of deflation and its quantitative-easing efforts aren’t working. Why not strike a deal to swap BOJ Governor Masaaki Shirakawa for U.S. Federal Reserve Chairman Ben S. Bernanke for 12 months? Both men have the skills the other nation desires. America’s lawmakers think the Fed is doing too much; Japan’s are livid over BOJ inaction. Shirakawa might drain excess money from the U.S. banking system, while Bernanke’s willingness to go further and further into uncharted monetary territory would cheer Tokyo and weaken the yen. Perhaps the International Monetary Fund should thrust cross-border staffing into the spotlight and argue its merits in our interconnected financial world. Speaking of the IMF, a little outsourcing might not hurt. Managing Director Christine Lagarde is too busy trying to save bungling European officials from themselves to discipline global markets. Paul Volcker, the former Fed chief, would top any wish list to take a new job as IMF banking czar. Yet at 85, Volcker might be a tough sell. Why not Rudy Giuliani? The mercurial former New York City mayor and prosecutor may be just the thing to chasten bankers thinking they got away with the subprime-loan crisis. That could change if the IMF deputised the guy who brought down Ivan Boesky, Michael Milken and mafia dons, leaving the global financial system better off. Our most powerful policy makers tirelessly preach the gospel of capitalism and unfettered markets. Why not a global market for central bankers? It isn’t as if our current system of picking them is working. Bloomberg View

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associated editor Michael Grimes Newsdesk Alex Lee, Stephanie Lai, Tony Lai Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, José I. Duarte, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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December 3, 2012 business daily | 15

OPINION Business

wires Leading reports from Asia’s best business newspapers

Heeding history in East Asia Han Seung-soo

Former Prime Minister of the Republic of Korea and President of the 56th Session of the UN General Assembly

Business Inquirer The House committee on good governance will carry out a parallel investigation into alleged anomalies involving former officials of the Philippine Amusement and Gaming Corp. (Pagcor) amid fresh revelations that a former consultant to the state-run gambling agency, Rodolfo Soriano, had received US$30 million from billionaire Japanese casino operator Kazuo Okada. The committee would act on a two-year-old resolution who had sought a probe into the “various multimillion anomalies attending” Pagcor during the previous administration. The committee had so far held only one hearing on the resolution.

Yonhap News The amount of mortgages in South Korea at risk of turning sour reached 25.6 trillion won (US$236.3million) in September, with the majority being owed to non-banking firms that charge higher interest rates, the financial regulator said yesterday. The figure represents 230,000 out of a total of 5.35 million mortgage borrowers, according to the Financial Supervisory Service (FSS). “The percentage itself may yet seem small but it’s a significant figure considering most of these mortgages were borrowed by the low-credit group,” said Yang Hyun-geun, an FSS director.

Asahi Shimbun Mitsubishi Heavy Industries Ltd president Hideaki Omiya said his company hopes to expand its cooperation with Hitachi Ltd even further to include transportation infrastructure and nuclear power generation. The two companies announced plans to set up a joint venture in January 2014 to combine their thermal power generation businesses. “The next area in which we expect to join hands is transportation,” he was quoted as saying. “Another potential area of cooperation is nuclear power generation.”

Jakarta Globe A rupiah redenomination bill is currently being sought by the Indonesian government and it is asking the House of Representatives to start the legislation process for the bill next year. The redenomination is an attempt to simplify currency transactions by replacing the currency with a new one. Finance Minister Agus Martowardojo conveyed the plan to House Deputy Speaker Anis Matta on Friday, according to Ignatius Mulyono,chairmanoftheHouse’s legislation committee. “We are now awaiting the draft to be submitted to the House,” Mr Ignatius said.

hinese, South Korean, and Japanese diplomats recently took to the podium of the United Nations General Assembly to reassert their countries’ positions on the territorial issues surrounding several small islands in the seas of East Asia. But the composed manner in which they delivered their remarks belied their countries’ long-simmering tensions over the islands, which have come to a near boil in the last few months. At the centre of one heated dispute, between China and Japan, are the Senkaku Islands, which the Chinese call the Diaoyu Islands. In September, Japan’s government announced its purchase of three of the islands from their private Japanese owner, inciting protests across China. Soon after, hundreds of Chinese fishing vessels approached the islands to assert China’s sovereignty. These vessels have lately been joined by an increasing number of Chinese surveillance forces, which periodically enter the waters surrounding the islands, sometimes leading to direct confrontation with Japanese patrol ships. With the situation threatening to escalate further, both sides need to contain the conflict quickly and restore the status quo. Indeed, the situation is all the more volatile in view of the political transition now underway in China.

Dokdo dispute Meanwhile, the Republic of Korea and Japan are engaged in a territorial standoff over the islets of Dokdo (called Takeshima in Japanese). In early August, Lee Myungbak became the first South Korean president to visit the islets; Japan’s government responded by proposing to take

But, in order to build a meaningful framework for cooperation, enduring distrust among East Asian countries must be dispelled

the sovereignty issue to the International Court of Justice. But the ICJ cannot exercise jurisdiction in the dispute without both countries’ consent, and South Korea has rejected Japan’s proposal, maintaining that Lee was within his authority to visit the islets, given that Dokdo is unquestionably South Korean territory. Indeed, South Korea’s government denies that there is any dispute over the islands. Historical context is crucial to assessing the Dokdo issue. Like the rest of Korea, Dokdo was annexed by Japan in the early twentieth century, and restored to Korean control after World War II, when Korea regained its independence. Thus, while outsiders might view the desolate islands as insignificant, for Koreans, Japan’s position on Dokdo is tantamount to a challenge to their country’s independence and a denial of its right to exercise sovereignty over its own territory. As a result, Dokdo has been a thorn in relations between the two countries for decades. In 2005, the creation of a

so-called “Takeshima Day” by a local government in Japan triggered a public uproar in South Korea. But Japan has not shied away from the issue, with prominent political figures joining Takeshima Day celebrations each year. Furthermore, Japan’s habit of distorting facts in its history books – for example, denying that its former colonial subjects were forced into sexual slavery – has fuelled distrust and anger in South Korea and elsewhere in East Asia, including China. Dokdo is situated midway between the Korean peninsula and Japan’s main island, roughly 115 nautical miles from each. But the islets are much closer to the nearest Korean island, Ulleungdo, than to Japan’s Okishima.

Taking responsibility A survey of historical documents shows a distinct shift in Japan’s position on Dokdo. For example, in the late seventeenth century, when conflict between Korea and Japan erupted over the passage of Japanese fishermen to Ulleungdo, Tottori-han (one of Japan’s feudal clans) told

Japan’s central government that Ulleungdo and Dokdo did not fall within Japanese territory. Likewise, a report in 1870 by Japan’s Ministry of Foreign Affairs, “A Confidential Inquiry into the Particulars of Korea’s Foreign Relations,” shows that the ministry recognised Dokdo as Korean territory. Indeed, the report includes the subject title “How Takeshima and Matsushima Came to Belong to Joseon” (later renamed Korea). Moreover, the Dajokan, Japan’s highest decisionmaking body in 18681885, denied any claims of sovereignty over Dokdo through its Order of 1877. Yet, in 1905, Japan took measures to incorporate Dokdo in order to use it as a strategic military site for its war with Russia. The final text of the 1951 San Francisco Peace Treaty, which ended WWII in the Pacific, makes no mention of Dokdo. But earlier versions identified the islets as Korean territory. The reference in the final version, drafted by the United States, was removed in light of U.S. interests in building strategic partnerships with both South Korea and Japan. However, the 1943 Cairo Declaration, which stipulated the Allied Powers’ basic position on Japan’s territorial boundaries after WWII, stated that Japan would be expelled from all territories that it had annexed through violence. In this context, the unconditional return of Dokdo to Korea – and Korea’s continued sovereignty over Dokdo – is indisputable. In an increasingly interconnected world, significant challenges can be addressed only through regional and global partnerships. But, in order to build a meaningful framework for cooperation, enduring distrust among East Asian countries must be dispelled. Regional leaders must not get caught up in finger-pointing or avoid taking responsibility for past transgressions. An honest evaluation of history is crucial to establishing lasting peace and prosperity in East Asia. © Project Syndicate

16 |

business daily Dcember 3, 2012

CLOSING Singapore charges walkout drivers

Moody’s cuts rating of ESM fund

Singapore will deport 29 SMRT Corp. bus drivers and is prosecuting five others in connection with the city’s first labour protest since the 1980s. Those facing charges could be imprisoned for as long as a year for taking part in what was described as an “illegal strike,” according to a statement on the government’s website. Four were arrested and have already been charged, while the fifth will be charged today. More than 170 bus drivers failed to report for duty last Wednesday, while 88 halted work the following day, SMRT, Singapore’s biggest subway operator and one of its two main bus companies, said.

Credit ratings agency Moody’s has cut the triple-A rating of the European Stability Mechanism (ESM) euro rescue fund by one notch and given it a negative outlook. It follows a downgrade earlier this month of key ESM-backer France. It also cut rating of the mechanism’s predecessor, the European Financial Stability Facility (EFSF). It said the downgrade of the ESM and the EFSF was prompted by the high correlation in credit risk among the rescue funds and their largest financial supporters. Managing director of the ESM and EFSF chief executive, Klaus Regling, described the ratings agency’s decision “difficult to comprehend”.

Greek pension funds won’t join debt buy-back As Athens seeks to attract enough interest from bondholders Renee Maltezou

Antonis Samaras – debt buy-back ‘does not concern the pension funds’

reek pension funds will not take part in a debt buyback that is a key part of the country’s international bailout, Greek Prime Minister Antonis Samaras said in a newspaper interview. Greece must conduct the deal by December 13, before it receives more than 30 billion euros (US$39 billion) in bailout payments from the euro zone and the International

Monetary Fund. Athens has said it is vital the buyback is successful, but it must attract enough interest from bondholders, who need to decide whether to participate in the process, to ensure the country’s debt is deemed viable in the coming decade. “The debt buy-back does not concern the pension funds,” Mr Samaras was quoted as saying in

an interview with yesterday’s Proto Thema newspaper. “We wouldn’t erase the debt even if we took the funds’ bonds. These are seen as arrears of the state to itself.” Greek pension funds hold more than 8 billion euros out of a total 63 billion euros of Greek bonds held by private investors. Greek banks are estimated to hold nearly 17 billion euros. Most of their capital has already

been wiped out by a debt cut in March and they must be recapitalised with more than 40 billion euros in bailout funds. The government is expected to unveil the terms of the deal today before a meeting of euro zone finance ministers. So far, international lenders have agreed the bonds would not be purchased for more than the closing price on November 23. On the secondary market, Greek bonds eligible under the buy-back ranged from 25.15 to 34.41 cents in the euro at the close of trading on that date, according to Reuters data. Greece aims to cut its debt by spending about 10 billion euros from its rescue package on the buy-back scheme. Mr Samaras said that Greek banks would benefit from the voluntary debt buy-back deal, since they held Greek bonds at lower prices on their books. “The banks won’t lose out because [the bonds] on their books are down at a lower price,” he said. “They won’t lose any of their capital but will end up with more liquidity.” A senior Greek banker told Reuters last week that some of the country’s banks held Greek bonds at 22-23 euro cents on their books. However, the banks together were likely to forego about 3-4 billion euros in interest payments over the next 10 years if they participated. The deal is seen as a golden opportunity for hedge funds which have bought the bonds at rockbottom prices. Reuters

Cyprus will require US$13b in banking aid Island hit badly by Greek exposure

yprus will require up to 10 billion euros (US$13 billion) to refinance its banks, severely affected by the euro zone debt crisis and exposure to Greece, according to a draft deal with international lenders seen by Reuters on Friday. The deal, contingent on approval from euro zone finance ministers and national parliaments, also states that the objective of the adjustment programme with the Mediterranean island is to achieve a primary balance of 4.0 percent of GDP in 2016. “ Not ing t hat the Europe an Banking Authority (EBA) deadline of 30 June 2012 has been missed by two banks and that public capital support has already been provided to one bank, while the State itself is under financial stress, a bank support facility of up to EUR billion is foreseen under the programme, which will also cover potential future capital needs, determined on the basis of a top-down capital exercise, as well as

potential resolution costs,” the draft deal obtained by Reuters states. The exact amount per bank would be determined in a due diligence exercise, the report said, while brackets surrounding the recapitalisation needs suggested it could be subject to change. Earlier on Friday, Cypriot Central Bank governor Panicos Demetriades said the amount was an estimate, pending assessments from consultants expected this week. The document also said the Cypriot central bank would direct all banking groups to increase their minimum Core Tier 1 capital ratio – a measure of financial strength – to 9 percent from 8 percent by December 2013. A process of ongoing fiscal consolidation would seek to achieve a 4.0 percent of GDP primary balance in 2016, “and maintain such a level thereafter”, the document stated. Cyprus sought aid from the IMF and the EU in June after its banks reported

Banks affected by exposure to Greece

significant losses on a restructuring of Greek debt earlier in the year. Media reports have suggested that Cyprus’s total bailout needs, including

fiscal requirements, could reach 17.5 billion euros, virtually the equivalent of its gross domestic product. Reuters