Taipa’s new ferry terminal starts trials next year Taipa ferry terminal could start trial operations by the middle of next year, Susana Wong Soi Man, Maritime Administration director, told legislators yesterday. Wong Wan, Transport Bureau director, admitted there was “still room for improvement” with Macau’s public bus services, but added the aim next year was to move the focus from “quantity to quality”.
Year I Number 176 Wednesday December 5, 2012 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP $ 6.00 www.macaubusinessdaily.com
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Bus passengers up – as operator losses widen A
lmost a year-and-a-half after the new public bus system was launched, passenger numbers are up and the government spending increase has been small. But the positive figures do little to offset the three public bus operators’ growing financial losses, as fares now go directly to government revenue. In fact, Reolian general manager Cédric Rigaud says more passengers mean a slowing of the company’s bus frequency; one of the standards measured according to the contract. Reolian recorded losses of almost 60 million patacas last year due to higher fuel prices and drivers’ wages. The situation has not improved one bit, says Mr Rigaud. Operators receive a service charge for each bus departure, which is then multiplied by the number of kilometres travelled. The operators are still waiting for a response from the government on their July request to increase service charges, which was first accepted but later frozen after public criticism. More on page 2
China hits two birds with one stone in Bo ‘inquiry’
I SSN 2226-8294
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our of six Hong Kong-listed Macau casino stocks fell by at least four percent overnight. It‘s apparently in reaction to reports several junket executives have been arrested in Macau – some allegedly over laundering of money linked to disgraced Chinese politician Bo Xilai. The situation might be an opportunity for mainland authorities to show they are tackling wrongdoing in high places as well as excess on the casino floors.
HANG SENG INDEX 21840
21810
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21780
21750
Local Yellow Pages to go mobile in 2013
Nansha cooperation takes new direction
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G
ellow Pages publisher Directel Macau Ltd is to launch mobile applications for both Android and iPhone cell phones next year, in a bid to drop the old-fashioned image of the directory. The company is also trying to improve its database of Macau firms and stores before syndicating the information through Google’s search mechanism.
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December 4
uangzhou’s Nansha district will be getting not just a cruise ship terminal but possibly also opportunities in the MICE sector according to deals signed with Macau yesterday. Macau is also interested in establishing more food supply contracts with Nansha. The mainland authorities designate the district as a New Area with special rules for inward investment.
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HSI - Movers Name
%Day
ALUMINUM CORP-H
1.86
CHINA PETROLEU-H
1.60
CHINA MOBILE
1.38
LI & FUNG LTD
1.29
HANG LUNG PROPER
1.07
SINO LAND CO
-1.74
WANT WANT CHINA
-1.75
WHARF HLDG
-2.42
ESPRIT HLDGS
-2.87
SANDS CHINA LTD
-4.42
Source: Bloomberg
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macau
Buses fuller but still lose money Despite an increase in passengers, the bus companies continue to make losses Vítor Quintã
vitorquinta@macaubusinessdaily.com
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ore people are taking the bus, but bus operators still lose money because the government has yet to increase the amount it pays them to run their services. The Portuguese-language Tribuna de Macau reported yesterday, without citing any source, that in the first 10 months of this year the number of passengers carried by the three operators had risen to an average of 420,000 a day, 16 percent more than in the equivalent period last year. The newspaper said the daily
average had risen to a record 460,000 in September. One of the operators is Reolian Public Transport Co Ltd. Its general manager, Cédric Rigaud, said that in the first quarter the number of passengers carried on the routes it operated was 16 percent higher than a year before. While more passengers is a good sign for the new bus system, introduced in August last year, Mr Rigaud said his company had other problems. “With more buses and road works launched in several spots in Macau,
our commercial speed has decreased by 10 percent,” he told Business Daily. Bus frequency is one of the criteria for measuring performance specified in the service contracts that the government has with Reolian and the other operators, Transportes Urbanos de Macau SARL (Transmac) and Sociedade de Transportes Colectivos de Macau SARL (TCM). The government fined Reolian 50,000 patacas (US$6,250) in May because, the government said, Reolian buses did not run on time. Reolian has asked the Court of Second Instance to overturn the penalty. The government suspended in July an increase of 23 percent in the amount it pays the operators to run the buses, after the announcement of the increase caused a public outcry. The bus operators collect fares and give them to the government. In return the government pays the operators between 9.6 patacas (US$1.20) and 25 patacas per kilometre for each service they run.
comment for Business Daily yesterday. The Transport Bureau said the operators would have to run steady services in September, when the new school year began, before it would begin to talk about paying them more. The government also asked the operators for service improvement plans. The bureau had failed to answer questions from Business Daily by the time we went to press. But speaking at the Legislative Assembly bureau director Wong Wan said the cost for the new system was just slightly higher than the previous one (see story on page 3). Mr Rigaud said Reolian remained in contact with the government about more money for running its services. “We are fulfilling our contractual obligations and in the meantime we have to wait for the government’s decision,” he said. But he added: “The more we wait, the more pressure we have internally due to inflation and a lack of human resources”.
Rising pressure Reolian made a loss of 58.5 million patacas last year due to higher fuel prices and an increase of 90 percent in the cost of wages for drivers, which rose to some 63.2 million patacas. Mr Rigaud said “there has been no change” this year and that Reolian continued to lose money. In contrast, Transmac’s managing director, Chan Hio Ieong, said in July that his company had made a profit of several million patacas last year. TCM’s general manager, Daniel Fong, said in July that his company had made a profit of about 600,000 patacas last year, but had made a loss of about 7.6 million patacas in the first half of this year. Neither Transmac nor TCM had any
The number of public bus passengers rose by 16 percent in the first 10 months of 2012 (Photo: Manuel Cardoso)
The more we wait [for a service charge increase], the more pressure we have internally due to inflation and a lack of human resources Cédric Rigaud, Reolian Public Transport Co Ltd general manager
Wynn Macau restaurant wins second star in 2013 Michelin Guide
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olden Flower, a Macau restaurant specialising in cuisine from Shandong and Sichuan in northern China, has won a second Michelin star in the 2013 Michelin Guide for Hong Kong and Macau. The restaurant, led by master chef Liu Guo Zhu, also features Tan cuisine, a culinary tradition from China’s imperial Qing Dynasty, spanning a period from the 17th century to the 20th. Golden Flower is at Wynn Macau, a casino resort on the Macau peninsula. Another Wynn Macau dining venue – Wing Lei, led by chef Chan Tak Kwong – retained a two-star rating it won in the 2012 guide. Robuchon au Dôme, founded by French chef Joel Robuchon and based at SJM Holdings Ltd’s Grand Lisboa Hotel, retained its three-star rating in the 2013 Michelin Guide
– the only Macau restaurant so far to gain that accolade. Seven restaurants in Macau received Michelin star status in the 2013 edition – four of them with two stars. “We are delighted that our Chinese restaurants Golden Flower and Wing Lei have each been awarded two prestigious Michelin stars,” said Ian Coughlan, president of Wynn Macau. Mr Liu is the executive chef of Wynn Macau’s entire Chinese culinary operations, with a special emphasis on overseeing Golden Flower. The company says that during a career spanning more than 40 years he has prepared Tan cuisine for dignitaries including former Chinese leader the late Deng Xiao Ping, former U.S. Secretary of State Henry Kissinger and the United Kingdom’s Queen Elizabeth II. M.G.
Master chef Liu Guo Zhu
December 5, 2012 business daily | 3
MACAU Inner Harbour floods tackled in 2013 Short-term measures to tackle regular flooding in the Inner Harbour could begin in 2013 after a yearlong discussion and consultancy from a mainland Chinese company, the administration announced in the Legislative Assembly yesterday. Measures include building embankments and other facilities as tall as 2.3 metres for flood prevention and two pumping stations to drain water. The administration pledged to launch further studies on long-term solutions for the problem, taking into consideration other factors like urban planning and tourism.
Taipa’s new ferry terminal starts trial next year The facility, including direct link to the airport, will be operational in first half 2014 Tony Lai
tony.lai@macaubusinessdaily.com
Gradual solution for public antenna issue
Nearly ready – Taipa Ferry Terminal
T
he Taipa ferry terminal could start trial operations as early as the middle of next year, Susana Wong Soi Man, director of the Maritime Administration, said yesterday. Speaking at the Legislative Assembly during the final departmental Policy Address for 2013, she said the terminal would serve as an important transportation hub in the future, integrated with the city’s development. “The Taipa ferry terminal can handle about 40 ferries an hour compared to 30 ferries an hour in the Outer Harbour Ferry Terminal,” the official stressed. Ms Wong added the Taipa pier would have 19 berths and 114 immigration clearance counters and e-channels, compared to 16 berths and 60 channels in the Macau peninsula pier. “We will also build a link between
the Taipa ferry terminal and the Macau International Airport to provide more convenient services to users,” she said. “The terminal can open in a trial stage by mid next year and it will take about half-a-year to nine months [before full operations],” she added. “So I believe the terminal can be fully operational in the first half of 2014,” Ms Wong stated.
Cheap buses The long-waited one-year renovation works of the Outer Harbour Ferry Terminal could also be up for tender next month, she added, while the construction would probably start in mid-2013. The four-phase plan, including the introduction of a baggage carousel, was to start in the third quarter this year. Land transportation was
another major concern expressed by legislators today. Wong Wan, Transport Bureau director, said the new public bus system starting in August last year only cost the government 12 million patacas (US$1.5 million) more than the original system. “Public spending on bus services in the first 13 months of the new system is some 670 million patacas while the income from bus fares is over 290 million patacas,” said Mr Wong. The administration plays a more hands-on role in the new system, collecting all bus fares and paying the operators a service charge for each bus departure. He added that government subsidies on bus fares – applicable to students, the elderly and the registered disabled – also coincidentally cost 290 million patacas. In addition the administration
The government hopes the long-standing dispute over public antenna companies “can gradually be solved” after the release of the new landline service licence and the result from an arbitration dispute with Macau Cable TV Ltd. Lawrence Tou Veng Keong, director of the Bureau of Telecommunications Regulation, told the Legislative Assembly yesterday that the tender for the new licence to operate landline telecommunications services would be finalised this year and the licence could be issued early next year the latest. Companhia de Telecomunicações de MTEL Ltda was the sole bidder for the licence – which was supposed to be issued in the first half of this year – that will break up the monopoly of Companhia de Telecomunicações de Macau SARL – CTM. He added they were still waiting on the result from the court of arbitration over a dispute with Macau Cable TV on the public antenna issue. Mr Tou also said the administration had released guidelines for mobile service operators after four incidents of service disruption so far this year. T.L.
reimburses 70 million patacas in taxes that would otherwise be payable by the bus operators. But he stated that overall the cost to the public purse of the new system was in line with the costs of the old one. In the face of criticism from legislators over the quality of bus services yesterday, Mr Wong admitted there was “still room for improvement”. “Next year our target will be to gradually move the focus of the improvement from quantity to quality,” he added.
Property fund share buy-back resumes L ondon-listed Macau Property Opportunities Fund Ltd (MPO) has bought back and cancelled another batch of its own shares as part of a prolonged attempt to boost its share price. MPO said yesterday it had bought back 4.4 million shares for 1.105 pounds (14.2 patacas) each on Monday. The fund said these shares, which represent 4.41 percent of its capital,
would be cancelled. “Further opportunistic purchases of MPO shares may be considered by the board at suitably attractive prices,” it said. MPO invests only in Macau and Zhuhai. The fund is managed by Sniper Capital Ltd. A Sniper Capital subsidiary, Sniper Investments Ltd, bought on
Monday almost 881,000 shares in MPO for 1.105 pounds. Sniper Investments now owns 7 percent of the fund. Since the middle of last year the fund has bought back more than 5 million shares, about 5 percent of its issued share capital. But MPO said last month that it “continues to hold the view that its share price remains significantly
undervalued and does not accurately reflect the quality and positioning of MPO’s portfolio and potential for further net asset value growth”. The fund said its adjusted net asset had risen by 2 percent to US$3.07 per share in the third quarter. The fund had a portfolio value of US$385 million (3.1 billion patacas) in the third quarter. V.Q.
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business daily December 5, 2012
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HOSPITALITY Costly exhibits The data for exhibitions for the third quarter of this year show that exhibitions are becoming more frequent, attracting more people, and, less obviously, costing more to organise. There were 25 percent more exhibitions in the third quarter than a year before, but altogether they cost twice as much to arrange. The average cost per event rose by 67.5 percent in one year.
The cost of all the ingredients of an exhibition rose. The cost of renting exhibition space rose by 80.3 percent. The cost of accommodating people taking part rose by 69.1 percent. Promotion costs rose by 54.2 percent. But these were not the biggest increases. The biggest increases were in what the data call “other costs”, which include transport expenses, and in food costs, which more than tripled. Other costs and food costs accounted for almost half of the increase in total costs. Production costs, which include the cost of decorating, rose by only 12 percent. These figures raise doubts about the competitiveness of the exhibitions industry, even taking into account the increase in the average number of people taking part in each event. But we need a more detailed breakdown of the costs to reach firm conclusions. J.I.D.
Directel greets the digital age Directel Macau is betting that online directory services will keep it going Vítor Quintã
vitorquinta@macaubusinessdaily.com
Directory companies betting online, says Óscar Sousa Marques
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ellow Pages publisher Directel Macau Ltd will focus more than ever next year on directory services accessible online, chief executive Óscar Sousa Marques has said. “We are preparing new products, almost all of them digital. For instance, in the new year we will launch mobile apps for both Android and iPhone,” Mr Sousa Marques told Business Daily. He said another priority was “improving our website and our database, as the latter is our most important asset”. He said Directel Macau’s business “has more or less stabilised” with this year’s revenue “very similar to last year’s”. Printed directories might be regarded as old-fashioned and were not used as much as before, “but reports of their death are greatly exaggerated” Mr Sousa Marques said. The Yellow Pages “will always have a market niche,” he said, “and we want them to remain relevant to customers”. He said directories now accounted for less than half of his company’s annual revenue, and that services available online, maps and tourist guides accounted for the rest. Mr Sousa Marques acknowledged that services available online “are the
future because people use the printed directories less and less”. Directel Macau intends to syndicate its database of Macau companies and shops by making it available through Google’s search engine. Simply providing an address and contact information was no longer enough, Mr Sousa Marques said. “For instance, if we are talking about restaurants, it is very important for users to know their opening hours and other similar information,” he said. “We are creating a team to regularly update this information.”
marketing,” he said. He said Google Inc and Nokia Corp were interested in increasing cooperation with the members of the association. Google makes most of its revenue from its Google AdWords advertisements and “it needs as much information as possible on local companies”, Mr Sousa Marques said. “But Google does not invest much in local search because it is difficult for them. Yellow pages have the best data, even on local microcompanies,” he said.
Google calling The annual conference of the association of Asian directory companies, held in Bangkok last month, changed the name of the association from the Asian Directories Publishers Association to the Asian Local Search and Media Association. “The vast majority of our companies used to only focus on printed Yellow Pages, but with the market evolution they began developing mobile apps and websites,” said Mr Sousa Marques, the president of the association. “Some of them even created subsidiaries to engage in related businesses such as digital
Reports of their death are greatly exaggerated Óscar Sousa Marques, Directel Macau chief executive, on the Yellow Pages
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December 5, 2012 business daily | 5
MACAU
Bo Xilai ‘link’ adds poison to casino story But Macau money laundering claims tied to disgraced populist offer political opportunity to mainland authorities Michael Grimes
michael.grimes@macaubusinessdaily.com
S
JM Holdings Ltd fell the most in six months on the Hong Kong Stock Exchange, leading a decline in Macau casino stocks on speculation China’s government is stepping up scrutiny of junket operators – a key source of credit to high-stakes gamblers. SJM, founded by Stanley Ho
Hung Sun, dropped 5.8 percent to HK$17.24 (US$2.22), the biggest fall since May 14. In other trades Wynn Macau Ltd slid 5.5 percent, Sands China Ltd slipped 4.4 percent and Galaxy Entertainment Group Ltd was down 4.5 percent. MGM China Holdings Ltd fared slightly better,
declining 3.1 percent. Melco Crown Entertainment Ltd – generally traded at low volumes in Hong Kong compared to its Nasdaq listing in New York – fell back one percent. It’s likely investors were reacting to a newly toxic element thrown into the Macau story. This is reports – from The Times in London and from The Wall Street Journal – about arrests of junket executives here. In particular they link the detentions with possible laundering in Macau of money connected to Bo Xilai. He is the now disgraced former Communist Party boss in Chongqing on the mainland whose wife was found guilty of murdering British businessman Neil Heywood – allegedly after the latter threatened to reveal the extent of the couple’s wealth and how they came by it.
Leadership concerns
Bo Xilai – linked to Macau money laundering reports
Okada slams reports on Philippine payments
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apan’s Universal Entertainment Corp accused Reuters yesterday of “misrecognition of the facts” in publishing stories about payments to an ex-consultant to the Philippine gaming authority. The articles published last month said Universal channelled at least US$30 million (239.5 million patacas) to companies controlled by Rodolfo Soriano between January and May of 2010. Mr Soriano is described as a “confidante” of Efraim Genuino, the former chairman of the PAGCOR, Philippine Amusement and Gaming Corporation – the regulator-cumoperator of casino gaming. The Philippine Department of Justice has launched an investigation into the payments. The House committee on good government and public accountability will also carry out a parallel investigation into the alleged anomalies. Philippine media reported last week that 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. The payments are also being probed separately by the Nevada Gaming Control Board, the regulator for Universal’s businesses in the United States. Universal said its compliance committee had already reported about its business in the Philippines to Nevada gaming authorities and that it was “certain that the facts of this case will be brought to light in the near future”. Universal, majority owned by former Macau casino investor Kazuo Okada, appears to be using a ‘bad apple’ defence to head off claims it knew about the payments. The company has filed lawsuits against three former Universal employees, claiming they made the money transfers without proper authorisation. V.Q./Reuters
Xi Jinping, the new head of China’s ruling Communist Party, in November told his fellow leaders that unless they address corruption, social unrest might rise and threaten its hold on power. Two issues said by political analysts to be of particular concern to China’s new leadership in its efforts to maintain power and prevent domestic dissent are graft by cadres and Maoist populism. Mr Bo – once tipped for high office and who reportedly ordered cell phone companies to distribute revolutionary songs to customers’ handsets in Chongqing – happens to tick both boxes. He might be stripped of his official posts, be out of the Politburo, the Party and officially under investigation, but he remains a potentially dangerous rallying point for anyone concerned that ‘socialism with Chinese characteristics’ – as defined by China’s late reforming leader Deng Xiaoping – looks a lot like the capitalism that young Chinese were taught to despise until a few decades ago. Any investigation able to identify Mr Bo with hypocrisy – that shows for example that he amassed great wealth while simultaneously appealing for a revival of ‘red culture’ – and that also curbs excessive gambling and money transfer to Macau by China’s rich, could therefore serve useful political purposes. It makes the likelihood of Mr Bo being rehabilitated even more remote. It also sends a message to the ‘have nots’ in China that the leadership is bringing the rich and their offspring – the sort of people prone to gambling vast sums in Macau and occasionally of crashing their sports cars into old ladies back home and then trying
to cover up the crime – are being brought under control.
Keeping quiet Just how sensitive is the topic was revealed to Business Daily when a previously helpful mainland contact declined even to discuss the issue on the phone. “It’s not convenient for me to discuss this. I suggest you speak to the authorities in Macau,” said the person. “There is speculation about China’s new leaders stepping up scrutiny over junkets, talks about anti-corruption measures and a clampdown on China’s underground banking system,” said Lantis Li, a Hong Kong-based analyst at Capital Securities Corp. “All this speculation fuelled unfavourable sentiment towards casino stocks.” SJM casinos weren’t mentioned in media stories about the recent junket arrests, but the firm traditionally has strong links with the VIP segment. In fact however in the third quarter interim results, published last month, only just over HK$12.48 billion (US$1.56 billion) – 66 percent of the firm’s quarterly gaming revenue – was derived from the VIP segment. That’s slightly below the market average contribution of VIP for the quarter, which stood at 69 percent of gross gaming revenue. But in the current volatile investment climate, perceptions can be as powerful as realities. Updated internal guidelines have however been distributed to all Macau’s VIP and junket operators, heard the recent Asian Gaming & Hospitality Congress held by Beacon Events at Galaxy Macau. The guidelines, circulated by the city’s Gaming Inspection and Coordination bureau on November 8, require junket operators to report accurate monthly lists of players, including details of when plays were made and how much was won or lost. Transaction codes for money flows in and out that exceed US$500,000 have to be reported within 24 hours. The moves are in line with a broader policing of money flows after antimoney laundering standards were tightened in Hong Kong in April. With Bloomberg News/Reuters
4%-plus Fall in four HK-listed Macau casino stocks overnight
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business daily December 5, 2012
macau Portugal confirms new officer for trade agency
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Maria João Bonifácio will be the new director for Macau and Hong Kong of Portugal’s AICEP – Trade & Investment Agency, president Pedro Reis confirmed to Portuguese news agency Lusa. The replacement of Mariana Oom, who has been in Macau for two years, was part of a movement to “rebalance AICEP’s external network,” Mr Reis said. Ms Bonifácio had already worked in Macau in the 1990s as head of a Portuguese chamber of commerce.
Income bias Fast economic growth and the tight labour market affect pay and, more generally, incomes. They do not affect pay and incomes in the same way in all industries and occupations but, overall, they cause them to rise. Two indicators are especially relevant here: the median earnings of the working population, or what you earn by working; and gross domestic product per head, a measure of average income. Between 2004 and 2011 median earnings almost doubled, growing at a compound annual growth rate of 9.9 percent. Average income almost tripled, growing at a compound annual growth rate of 16.9 percent.
New contract confirmed for govt gaming adviser Vítor Quintã
vitorquinta@macaubusinessdaily.com
D
In each case the growth followed its own separate course. In the beginning median earnings rose faster than average income. Then the growth in average income overtook the growth in median earnings and average income has been growing faster ever since. In 2010 and last year average income grew three to five times faster than median earnings. Median earnings almost stagnated during the financial crisis. In the past two years their real value has risen more slowly than before as inflation eroded it. Even so, adjusted for inflation, median earnings rose by nearly 40 percent, growing at an annual rate of about 4.3 percent. The cause for concern is the divergence between the rates of growth of median earnings and average income. The divergence is only a rough indicator, but that evolution suggests a fast increase in the concentration of wealth and rising inequality indicators for income distribution in favour of non-work related sources of income. J.I.D.
198 %
Rise in GDP per head, 2004-2011
avid Green, an Australian lawyer and former gaming regulator, who has advised the Macau government on gaming regulatory policy since 2000, will have his firm’s contract renewed in 2013. The Official Gazette confirmed Manuel Joaquim das Neves, head of the Gaming Inspection and Coordination Bureau (DICJ), has been authorised to sign a “service provider contract for a consultancy and study of the gaming industry for 2013” with Mr Green’s company Newpage Consultadoria Ltda. Mr Green – principal of Newpage and a permanent resident of the Macau SAR – was originally part of the Arthur Andersen consulting team hired by the government in 2000 to advise on the liberalisation of the Macau casino industry. Mr Green was subsequently a partner of PricewaterhouseCoopers in Macau, and was later director of the firm’s gaming practice. DICJ told Business Daily in an e-mailed statement: “The main purpose of the Macau government to hire Newpage Consultadoria Ltda is to provide consultancy services on the overall supervision and monitoring work of the DICJ over the gaming industry. The contract amount paid to Newpage is approximate to what we have paid before.” It has previously been reported in the media that a four-month service provider contract signed between Newpage and the government in 2010 was worth 1.8 million patacas (US$225,500). But Business Daily understands that was for a specific advisory project. Fees for a longer consultancy are usually paid by the government at a lower rate. Mr Green said his firm’s new
David Green, principal of Newpage Consulting
deal “will likely be signed next year, before March”. “It will be a continuation of work we have done in the last few years,” he added. “We will be providing assistance to the regulatory role of the Gaming Inspection and Coordination Bureau”. He stated that his ‘to-do’ list would include consultancy on possible legal standards for electronic table games. Local technical standards for slots were published at the start of this year. But a regulation on slots approved last week by the Executive Council – giving a legal framework for the technical standards and creating a legal relationship between the slot manufacturers and DICJ – didn’t cover ETGs.
“There are always new challenges,” Mr Green told us. “For instance, Administrative Regulation 26/2012 – the regulation on slot machines – has to be put to bed. Macau still lacks further standards on other kinds of electronic gaming products.” David Green has advised on casino regulation in a number of jurisdictions, including New Zealand, Singapore, Macau and Taiwan. He has also provided consultancy services on regulation of Internet gaming, sports wagering and lotteries. The tax and commercial lawyer served as presiding member of the Independent Gambling Authority in South Australia prior to relocating to Macau in 2001. With Michael Grimes
December 5, 2012 business daily | 7
MACAU
Partners aim for wider cooperation in Nansha Guangdong and Macau agree to work together on a greater variety of undertakings in Nansha Stephanie Lai
sw.lai@macaubusinessdaily.com
Closer ties – three new agreements inked yesterday
M
acau and Guangdong intend to cooperate more closely in Guangzhou’s Nansha district in the meetings, incentives, conventions and exhibitions (MICE) industry, in cultural industries and in
the food supply industries. Representatives of the Macau Trade and Investment Promotion Institute and its Guangdong counterpart signed here yesterday three cooperation agreements.
“The planning for Nansha is basically finished. The zone will be led by producer services,” said the deputy director of the Nansha Development Zone, Sun Lei. “Nansha would like to cooperate
with Macau in high-end commercial services, as well as the leisure and cultural sector,” Mr Sun told reporters. Macau and Guangzhou intend to increase their cooperation in Nansha on audio-visual production and cultural industry conferences, exhibitions and trade fairs. “We’d like to enhance Macau’s role as a platform to reinforce contact with Portuguese-speaking countries and the European Union on the MICE industry,” said Francis Tam Pak Yuen, Macau’s secretary for the economy and finance. The signing of the agreements followed a meeting to review this year’s cooperation and plans for next year. Events planned for next year include the Macao International Environmental Co-operation Forum and Exhibition, the Guangzhou International Food Exhibition and Import Food Exhibition, the Macau Franchise Expo, the Guangzhou International Low-carbon Products and Technologies Exhibition and the Macau International Trade and Investment Fair. Macau’s Civic and Municipal Affairs Bureau and the Nansha administration have agreed to establish more food supply chains that go through Nansha. One such chain already supplies Macau with frozen seafood. “The next step for both governments would be to form detailed work plans together,” said the vice-mayor of Guangzhou, Cao Jianliao. “I hope both Guangdong and Macau will see a breakthrough in progress soon,” Mr Cao said. The Macau government announced in July last year that it would take part in building a Guangzhou-Macau Cultural Creativity Industrial Park and a cruise port in Nansha. Nansha’s development plan was made public in October, after being approved by the State Council.
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business daily December 5, 2012
GREATER CHINA
U.S. charges Chinese affiliates of top accountants SEC accuses firms of blocking fraud probes
Robert Khuzami,
U
.S. regulators probing potential fraud by Chinabased companies increased pressure on their auditors by formally accusing affiliates of Big Four firms of withholding documents from investigators. Deloitte Touche Tohmatsu CPA Ltd, Ernst & Young Hua Ming LLP, KPMG Huazhen and PricewaterhouseCoopers Zhong Tian CPAs Ltd have refused to cooperate with accounting investigations into nine companies whose securities are publicly traded in the U.S., the Securities and Exchange Commission
(SEC) said in an administrative order on Monday. BDO China Dahua Co. was also named by the SEC in the action. The auditors claim Chinese law prevents them from assenting to the SEC’s demands, hindering U.S. efforts to probe allegations of fraud that have wiped 61 percent from a gauge of Chinese and Hong Kong stocks traded in North America since January 2011. Failure to reach an agreement on cross-border access to records may prompt U.S. regulators to seek to deregister the firms, said Paul Gillis, professor at Peking University’s
Guanghua School of Management. “I don’t think there’s a resolution in sight,” Mr Gillis, also an adviser to the U.S. Public Company Accounting Oversight Board, said from Beijing. “China is hypersensitive to the idea of foreigners operating within its borders and enforcing foreign law. The next step is likely to be the PCAOB trying to deregister accounting firms it can’t inspect. It’s eventually all leading to the de-listing of Chinese firms in the U.S.” The SEC, PCAOB, China’s Ministry of Finance and the China Securities Regulatory Commission
have been unable to resolve differences over the inspection of audit documents. Chinese law bans the removal offshore of audit papers, while foreign regulators aren’t allowed to work inside the country’s borders.
‘Serious sanctions’ Auditors that don’t comply with SEC demands face temporary or permanent deregistration in the U.S., according to the rule under which the proceedings are being brought. China-based auditors signed off on 26 percent of the 159 so-called reverse
Beijing, Seoul expand currency swap agree China buys about one-quarter of South Korea exports
T
rade giants China and South Korea have agreed to utilise their currency swap valued at US$59 billion to boost the use of yuan and won in bilateral trade, Seoul’s finance ministry and central bank said yesterday. Central banks of the world’s largest and seventh largest exporters will begin lending trading firms yuan and won through banks from later this month for use in settling trade bills, the Ministry of Strategy and Finance and the Bank of Korea said in a joint statement. “Using local currencies for trade settlement has been a global trend since the end of the 2008-2009 global financial crisis,” Eun Ho-sung, deputy director general of the Bank of Korea’s international department, told reporters. “We plan to arrange similar agreements with other countries after this.” Another central bank official said the agreement was the result of two years of talks with China and had nothing to do with South Korea efforts to curb the won’s volatility. The swap arrangement for 64 trillion won (US$59.09 billion) or 360 billion yuan was established late last year to help boost the pool of currencies the two countries can tap into at times of stress in addition to
official foreign reserves. The Bank of Korea plans to hold discussions with companies in Seoul to explain the terms of new facility to provide loans with maturities of three or six months.
Yuan steps China buys about one-quarter of South Korea exports, and is its largest market, but payment made in yuan or won accounts for only about 3 percent as the bulk is settled in U.S. dollars. Though China is the world’s second largest economy, the “redback”, as the yuan is known, is not fully convertible. China keeps a tight control over its currency’s value, allowing the exchange rate against the dollar to
US$59 bln
Value of currency swap arrangement
move a maximum one percent either side of a midpoint set each day by the central bank. In October, the yuan was the 16th most used currency in the world currency payments table, according to SWIFT, a global transaction services organisation. China is, however, committed to developing the offshore yuan market as part of its grand plan to make the currency fully convertible. As part of its efforts to internationalise the yuan, Beijing first launched a yuan trade settlement scheme in July 2009 in a few cities and expanded it to other parts of the country last year. The yuan is increasingly being used by overseas companies to settle trade transactions with Chinese counterparts. Yuan trade settlement amounted to 2,050 billion yuan (US$329.16 billion) in the first nine months of 2012, accounting for 11.4 percent of total trade and the ratio hit 13 percent in September alone, data from the People’s Bank of China showed. Meanwhile, China has been steadily opening up its domestic bond and stock markets to overseas yuan holders, including selected foreign central banks and investors. Reuters
December 5, 2012 business daily | 9
GREATER CHINA mergers by Chinese companies in the U.S. between January 1, 2007, and March 31, 2010, Lewis Ferguson, a PCAOB board member, said at an SEC conference in September. “Only with access to work papers of foreign public accounting firms can the
Firms that conduct audits knowing they cannot comply with laws requiring access to these work papers face serious sanctions Robert Khuzami, SEC Enforcement Director
SEC test the quality of the underlying audits and protect investors from the dangers of accounting fraud,” SEC Enforcement Director Robert Khuzami said in a statement. “Firms that conduct audits knowing they cannot comply with laws requiring access to these work papers face serious sanctions.” The SEC has de-registered the securities of almost 50 companies and filed fraud cases against more than 40 issuers and executives as part of its investigation into the non-U.S. based firms. Many of them entered U.S. capital markets through reverse mergers, in which a closely held firm buys a shell company already public on an exchange, allowing them to list shares without the scrutiny of a public offering. A gauge of Chinese and Hong
ement
Kong stocks listed in North America has tumbled since its January 2011 peak after short sellers said companies including Sino-Forest Corp. were manipulating their financial information, embezzling money and lying about factories and customers. Five companies targeted by shortseller Carson Block in 2010 and 2011 lost almost US$5 billion in market value through June 2011, according to data compiled by Bloomberg. In addition to Sino-Forest, his Muddy Waters LLC also shorted China MediaExpress Holdings Inc., which was delisted in the U.S., and Rino International Corp. which trades for 2 cents a share over the counter.
‘Too late’ “The SEC is unfortunately two years too late,” Kevin Barnes, an equity analyst at Kerrisdale Capital Management LLC in New York, said. “They are finally filing enforcement action for events that relate to the 2010 fiscal year or earlier,” he said. Earlier this year, the agency announced a separate enforcement action against the Shanghai-based Deloitte affiliate after seeking to enforce a subpoena in federal court. Monday’s action brings to a head the question of whether the SEC is sufficiently armed to protect U.S. investment dollars in China, according to William McGovern, the Asia partner at law firm Kobre & Kim LLP. “Simply swinging the hammer of enforcement, while effective at garnering headlines, will likely not be enough to achieve the SEC’s goal,” Mr McGovern, a former SEC enforcement attorney, said. “As capital flows from the U.S. to China at an increasing rate the pressure will grow on the SEC to find a way to forge compromise. The path to compromise may mean that the SEC has to recognise China’s sovereign interest in protecting certain industries or companies.” Bloomberg News
Cathay union threatens industrial action Employees say carrier didn’t agree to hold talks
C
athay Pacific Airways Ltd’s flight attendants’ union, representing more than 5,800 cabin crew, threatened industrial action as the carrier didn’t agree to hold talks over salaries and working conditions. The Flight Attendants Union set up a committee to prepare for a possible industrial action, union vice chairman Yau Chi Hung told reporters in Hong Kong yesterday. The group will hold a members’ meeting on December 10 to decide future plans, he said. More than 100 flight attendants staged a rally at Hong Kong airport on Monday after the carrier said last week it will raise salaries by about 2 percent next year, less than the 5 percent sought by the workers’ union. Cathay yesterday reiterated its position on pay increments and urged the union to remain calm and put the interest of the public first. “What we want is just renegotiation with the employer,” Mr Yau said, after Cathay didn’t respond to the union’s demand for an agreement on talks by 3pm. “We are deeply disappointed.” Shares of the carrier fell 1 percent to HK$13.26, the lowest since October 11, at close of Hong Kong trading. The city’s benchmark Hang Seng Index gained 0.2 percent. Cathay chief executive John Slosar told staff last month the airline faces a “very challenging year” and must cut expenses as it contends with rising fuel costs, declining fares and a cargo slump caused by the economic slowdown.
Honda, Nissan report easing sales decline Deliveries fell for a third straight month
H
Yuan – not yet fully convertible
onda Motor Co. and Nissan Motor Co. joined Toyota Motor Corp. in reporting narrower drops in China sales in November as Japanese automakers begin recovering from the fallout of the territorial dispute between the two nations. Honda deliveries last month declined 29 percent from a year earlier to 41,205 vehicles, Tomoko Takemori, a spokeswoman at Honda, said yesterday. Nissan sales in November fell 30 percent to 79,500 units, Sharon Shen, a spokeswoman at Nissan, said. While sales fell for a third straight month, they eased from the record declines reported for September and October in the world’s biggest auto market. Still, Honda has said it may take until the Lunar New Year in February for sales to normalise. Japanese automakers will probably miss out on sales of about 200,000 units in the fourth quarter as the political stalemate persists, according to industry researcher IHS Automotive. Honda and Nissan’s October sales declines were their worst monthly drops on record, based on available
company figures stretching back to 2007 and 2008, respectively. Honda fell 53.5 percent and Nissan dropped 41 percent in the month, according to the companies. Toyota, Asia’s largest car manufacturer, yesterday reported that November deliveries declined 22 percent to 63,800 vehicles, compared with a 49 percent drop in September,
Car sales – automakers begin recovering
Cathay – salary hike not enough, union claims
Elin Wong, a spokeswoman for Cathay, declined to comment on the union’s announcement. Hong Kong’s government last month increased its forecast for the city’s full-year inflation rate for 2012 to 3.9 percent from 3.7 percent, citing higher global food prices, the impact of quantitative easing in advanced economies and a renewed pickup in housing rental costs. The CPI increased 3.8 percent in October from a year earlier. Cathay, which reported a first-half loss, has unveiled cost-cutting measures including banning spending on festive gatherings, scrapping a management conference and cutting entertainment spending to a “bare minimum”. Bloomberg News
its steepest drop in a decade. Sales in the first 11 months of 2012 fell 3.3 percent to 749,600 units, it said. Honda rose 0.9 percent to close at 2,723 yen in Tokyo trading before the announcement, while the benchmark Nikkei 225 Stock Average declined 0.3 percent. Nissan fell 3.7 percent to close at 777 yen. The decades-long territorial dispute, involving a group of islands called Senkaku in Japan and Diaoyu in China, was reignited in April, when then-Tokyo Governor Shintaro Ishihara, a long-time critic of China, proposed buying the territories. That led Prime Minister Yoshihiko Noda’s administration to purchase the islets in September, escalating tensions between the two nations and sparking violent protests across China. AFP
10 |
business daily December 5, 2012
ASIA Asia Pacific Air to have Bangkok base One of Japan’s biggest travel agencies said yesterday it would set up a charter airline based in the Thai capital Bangkok as demand for air travel in Asia soars. H.I.S. said its Asia Pacific Airlines would begin operating flights in the summer, connecting Bangkok to locations across East Asia, including China, Japan and South Korea, a company official said. The carrier would initially operate two 767 mid-sized planes before expanding its fleet to 10 aircraft within several years, it said.
Australia interest rate cut to 3 pct RBA cuts key rate to match half-century low Wayne Cole
lacklustre housing market. Interbank futures suggest the central bank rate could approach 2.5 percent by the middle of next year, while some economists think a floor of 2 percent is not impossible. “I think the RBA realises it needs to do more to boost the non-mining parts of the economy,” said Shane Oliver, chief economist at AMP Capital Investors in Sydney. demand to strengthen.” Financial markets were “What it doesn’t do is to almost fully priced for an offer much guidance as to the easing given signs the seven- future, but my feeling is they year old bonanza in mining still have to cut further. They will probably do 25 (bps cut) in February and then 25 in April.” One reason for that is the stubborn strength of the Australian dollar. RBA cuts cash rate 25 bps, In the global matching record lows financial crisis, the currency tumbled Says data confirm peak by 30 U.S. cents, of resource investment giving a big boost to approaching exports. This time foreign demand for Market wagering on at least Australia’s triple-A one more cut rated debt has helped it stay solidly above parity. Australia’s mining investment is finally likely to crest next year, leaving a investment in the year to hole in growth that needs to June 2013 is expected to total be plugged by other sectors A$109 billion, or nearly 8 percent of GDP, way above the of the economy. The move was so well long-run average of 2 percent. discounted the local dollar actually firmed a quarter of a Consumer caution cent to US$1.0445 on the news. Even after yesterday’s Yet, investors are still wagering official rates will cut, Australian rates are still have to go lower yet to truly among the highest in the stimulate demand among developed world. With rates near zero in cautious consumers and a
KEY POINTS
A resource boom has been the main driver of Australia’s economy
A
ustralia’s central bank cut interest rates a quarter point to a record-matching low yesterday, stepping up efforts to safeguard the rich world’s most resilient economy from the risk of recession as a mining boom peaks. The Reserve Bank of Australia (RBA) cut its main
cash rate to 3.0 percent following its monthly policy meeting, bringing the easing since May to 125 basis points and matching the trough hit during the darkest days of the global financial crisis. “While the full effects of earlier measures are yet to be observed, the Board judged at today’s meeting
that a further easing in the stance of monetary policy was appropriate now,” said the central bank’s governor, Glenn Stevens. “Looking ahead, recent data confirm that the peak in resource investment is approaching. As it does, there will be more scope for some other areas of
Philippines may impose new cap on peso forwards Tools meant to maintain stability, Tetangco says
T
he Philippine central bank is looking at measures to help deal with rising inflows, which may include new limits on currency forwards, amid the fastest economic growth in two years. “It looks like there is less need to stimulate the economy from the monetary policy perspective,” Governor Amando Tetangco said in an e-mailed reply to questions yesterday, adding that changes to the reserverequirement ratio for lenders and capital controls won’t be necessary at this stage. Bangko Sentral ng Pilipinas is reviewing the risk premium on forwards as one of its tools and is in discussions with banks, he said. The peso climbed to the strongest level in more than
December 5, 2012 business daily | 11
ASIA Thai Life explores stake sale Thai Life Insurance Co Ltd may sell a stake of at least 20 percent, sources familiar with the matter said, in a deal that could value the country’s No. 2 life insurer at about US$2.5 billion. The Thai Life stake sale is expected to draw interest from Japanese suitors and other financial institutions, said the sources. Thai Life had 15.3 percent of the country’s life insurance market with annualised premium equivalent of 6.2 billion baht (US$202 million) as of the end of the second quarter.
the United States, Japan and Britain, those countries have taken ever more exotic stimulus steps including buying massive amounts of government debt. And, as yet, lower rates have had only a limited impact on consumers, with retail sales disappointingly flat in October and demand growth for credit the lowest in decades. The housing market has also been less than stellar. The country’s statistics bureau yesterday reported approvals to build new homes slid 7.6 percent in October, so reversing much of September’s hefty 9.5 percent increase. The impact of lower export prices was clear in Australia’s trade deficit, which more than doubled in the third quarter. As a result, the current account deficit widened by a fifth to A$14.9 billion (US$15.5 billion), according to figures from the Australian Bureau of Statistics. Fortunately, export volumes managed to outpace imports and so add 0.1 percentage point to economic growth in the quarter. It was no surprise then that Treasurer Wayne Swan warmly welcomed the RBA’s largesse. “Today’s rate cut is the early Christmas present that hard-working Aussies deserve,” he told reporters. “It comes at a time where unemployment is low, and economic growth is in much better shape than many other developed economies.” Reuters
four years on November 29, a day after the Philippines reported a 7.1 percent increase in third-quarter gross domestic product, faster than its Southeast Asian neighbours. South Korea tightened limits on the amount of foreign-exchange forward positions banks are allowed to hold from December 1 as gains in the won threaten exports. The peso’s rise is a worry and will hurt exporters and overseas remittances, Economic Planning Secretary Arsenio Balisacan said last week. BSP ordered banks to set aside more funds to cover risks on currency forwards this year. In July, it banned foreign funds from its special-deposit accounts that pay more than government Treasury bills. It cut the overnight borrowing rate four times in 2012 to a record 3.5 percent to help reduce the appeal of the nation’s higher-yielding assets. “The BSP is going ahead of the curve to prepare and
Indian navy ready to deploy as tension climb
analysis
Is Asia doing enough to curb Iranian oil purchases?
New Delhi says it will protect its maritime and economic interests
I
ndia has declared itself ready to deploy naval vessels to the South China Sea to protect its oilexploration interests there, a potential new escalation of tensions in a disputed area where fears of armed conflict have been growing steadily. Indian Navy Chief Admiral D.K Joshi said that, while India was not a territorial claimant in the South China Sea, it was prepared to act, if necessary, to protect its maritime and economic interests in the region. “When the requirement is there, for example, in situations where our country’s interests are involved, for example ONGC ... we will be required to go there and we are prepared for that,” Mr Joshi told a news conference. “Now, are we preparing for it? Are we having exercises of that nature? The short answer is yes,” he said. Tensions have simmered
It looks like there is less need to stimulate the economy from the monetary policy perspective Amando Tetangco, Governor of Bangko Sentral ng Pilipinas
in the South China Sea for many years but have escalated this year as an increasingly powerful China, which sees virtually the entire sea as its territory, begins to assert its long-standing offshore claims more vigorously. Parts of the South China Sea are also claimed by the Philippines, Vietnam, Brunei, Malaysia and Taiwan. The region, Asia’s biggest potential military troublespot, is believed to be rich in oil and gas – and more than half the world’s oil-tanker traffic passes through it. Last week, Chinese state media said police in southern Hainan province would board and search ships which illegally entered what China considers its territory in the sea – a move that immediately raised fears for the free passage of international shipping and the possibility of a naval clash. Reuters
set up other prudential tools in anticipation of further inflows,” said Ricky Cebrero, executive vice president and head of the Treasury Group at Philippine National Bank in Manila. “The tools it had used have been effective in quelling the rapid appreciation of the peso.” On currency forwards, “they either increase the risk weight or put a cap on nondeliverable forward positions that banks have, an example could be a percentage of unimpaired” capital, Mr Cebrero said. “The general idea is to allow those who wish to operate in this market to do so but with risk guidelines that manage the overall exposure in NDFs and the attendant systemic risk,” Mr Tetangco said. “The other tools we have put in place have so far been effective in maintaining relative stability in the exchange markets and keeping the asset markets from stretched valuations.” Bloomberg News
Clyde Russell Reuters market analyst
A
sia’s buyers of Iranian crude believe they’ve cut their purchases from Tehran enough to justify an extension of their U.S waivers, and strictly speaking, they probably have. The United States this week will likely announce whether China, India and South Korea will join Japan in receiving exemptions allowing them to continue buying Iranian crude. But even if the waivers are renewed, the question for lawmakers in the United States and Europe is whether they should be asking Asia to do more in their battle against Iran’s nuclear programme, which they fear is aimed at developing weapons despite Tehran’s insistence it is only for electricity. Looking at the numbers, only India would have cause for concern as its purchases from Iran are actually up 7.1 percent in the first 10 months of the year from the same period in 2011. India bought 366,400 barrels per day (bpd) from Iran in October, up 14 percent from September and 17 percent from a year earlier. This was even up from the 328,400 bpd for the first 10 months of the year, ensuring that India remains the top buyer of Iranian oil behind China. Indian officials will point to the fact that in the first seven months of the contract year that started in April, imports from Tehran are down 12 percent from the same period a year earlier. While this does show India’s refiners have made some effort to cut purchases, the big jump in October imports doesn’t look good if they are trying to convince the Americans they really are an ally against Tehran.
Chinese cuts Even the Chinese, who have made it quite clear they don’t support the concept of sanctions targeting Iran’s oil trade, have made deeper cuts than the Indians. In the first 10 months of 2012, China imported 424,000 bpd from Iran, a drop of 22.2 percent from the same period last year. However, how much of this was due to a genuine willingness of the Chinese to at least cooperate with the United States is open to debate. It’s quite possible that China’s drop in purchases is more down to the dispute over contract terms at the start of the year and the later insistence that Tehran uses its own tankers to deliver cargoes after European insurers withdrew coverage for vessels carrying Iranian crude. South Korea has the strongest case
for the renewal of its waiver for Iranian crude, having cut purchases by 40 percent in the first 10 months of the year over the same period in 2011. South Korea imported an average 145,546 bpd from Iran in the year to end October, but after stopping purchases altogether in the middle of the year, refiners in the North Asian nation have once again stepped up buying. In October, South Korea bought 186,451 bpd of Iranian oil, and the recent increase in purchases may slightly undermine Seoul’s case among Washington lawmakers. Japan, the other significant buyer of Iranian crude, had its waiver renewed in September and its purchases of Iranian crude were 38.4 percent lower in the first nine months of 2012 over the same period last year. Although Japan’s imports from Iran fell in October from September, they have risen since the middle of the year when purchases stopped amid concern over the measures to prevent European re-insurers, who dominate the global shipping industry, from offering coverage.
Taking more What is clear from looking at the big four Asian buyers of Iranian crude is that they made some effort to cut purchases, but seem in recent months to be happy to resume taking cargoes, albeit at lower volumes than in past years. This tallies with the International Energy Agency’s November 13 report, which said Iranian exports rose to 1.3 million bpd in October from 1 million bpd the prior two months. Asia’s big four took 1.165 million bpd of Iran’s October total, meaning that if the Western powers are looking to further squeeze Tehran, they will have to look at Asia to both inflict the pain and take the pain of finding alternate crude sources. Given the seeming lack of progress on resolving the dispute over Iran’s nuclear ambitions and the ongoing defiant tone of Tehran’s leaders, it seems that making the crude waivers tougher to obtain may only be a matter of time. The comfort expressed by officials in Asia’s top crude importers may well be short-lived. Asian importers probably now have two reasons to hope for lower oil prices, firstly to help their own import bills and secondly, lower prices will probably be more effective than sanctions at cutting Iran’s revenues, thereby putting further pressure on an already struggling economy.
12 |
business daily December 5, 2012
MARKETS Hang SENG INDEX NAME
NAME
PRICE
DAY %
VOLUME
AIA GROUP LTD
29.6
-0.5042017
26156501
CHINA UNICOM HON
ALUMINUM CORP-H
3.29
1.857585
13086000
CITIC PACIFIC
BANK OF CHINA-H
3.24
0.9345794
267614888
BANK OF COMMUN-H
5.56
0.1801802
23775986
BANK EAST ASIA
CLP HLDGS LTD
PRICE
DAY %
VOLUME
11.84
0
15414614
9.84
0.5107252
2630150
CATHAY PAC AIR
13.26
-1.044776
2728849
HANG SENG BK
117
CHEUNG KONG
HENDERSON LAND D
0.1706485
237810156
22.5
0
18382701
CHINA MERCHANT
23.45
-0.212766
1984407
CHINA MOBILE
3601574
16516533
1.067616
5.87
5967715
0.3555556
-2.866779
28.4
CHINA LIFE INS-H
-1.73913
112.9
0.1851852
HANG LUNG PROPER
CHINA CONST BA-H
13.56
SUN HUNG KAI PRO
10.82
8425776 4200423
SINO LAND CO
11.52
0.2105263
20537448
24901010
COSCO PAC LTD
23.8
0.428449
-4.420732
ESPRIT HLDGS
1010331
-0.9222661
31.35
2191693
11145045
7.52
SANDS CHINA LTD
28629763
-1.604938
117.2
2205114
2671548
0.4884005
-0.3355705
CHINA COAL ENE-H
-1.170446
-0.4464286
29.7
BOC HONG KONG HO
DAY %
67.55
66.9
15.94
BELLE INTERNATIO
PRICE
POWER ASSETS HOL
16.46
CNOOC LTD
95.1
-0.2098636
1660661
244.8
-0.2444988
4557377
6114806
TINGYI HLDG CO
22.35
-0.2232143
2260486
-0.7633588
1282393
WANT WANT CHINA
11.24
-1.748252
7231300
WHARF HLDG
58.45
-2.420701
5686035
54
-0.8264463
2454543
-1.436782
3434554
HONG KG CHINA GS
21.05
-0.2369668
4336911
HONG KONG EXCHNG
123.2
0.407498
4302528
78.7
0.5750799
14654568
HSBC HLDGS PLC
88.45
1.375358
17355405
HUTCHISON WHAMPO
78.6
0.255102
5124351
CHINA OVERSEAS
22.4
0.2237136
13921668
IND & COMM BK-H
5.17
0.3883495
221508116
CHINA PETROLEU-H
8.23
1.604938
60586793
LI & FUNG LTD
12.54
1.292407
17054934
CHINA RES ENTERP
27.5
-0.5424955
3159248
MTR CORP
31.15
0.9724473
2211673
20.2
0.248139
9216960
NEW WORLD DEV
12.14
-1.140065
9066589
CHINA RES POWER
CHINA RES LAND
17.64
0.3412969
7302990
PETROCHINA CO-H
10.32
0.78125
39198693
CHINA SHENHUA-H
30.75
-0.8064516
15437372
PING AN INSURA-H
57.65
-0.3457217
16090095
PRICE
DAY %
VOLUME
24.95
0.8080808
5742900
CHINA PETROLEU-H
8.23
1.604938
60586793
SWIRE PACIFIC-A
VOLUME
TENCENT HOLDINGS
68.6
HENGAN INTL
NAME
MOVERS
6
39
4 22150
INDEX 21799.97 HIGH
22147.96
LOW
21724.1
52W (H) 22162.47 (L) 17821.51953
21720
30-November
4-December
Hang SENG CHINA ENTErPRISE INDEX NAME
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.35
0.2994012
108213000
AIR CHINA LTD-H
5.25
0.1908397
8826000
ALUMINUM CORP-H
3.29
1.857585
13086000
CHINA RAIL CN-H
8.56
0.9433962
9113650
26
1.5625
7337154
CHINA RAIL GR-H
4.46
-0.4464286
23088951
3.24
0.9345794
267614888
CHINA SHENHUA-H
30.75
-0.8064516
15437372
CHINA TELECOM-H
ANHUI CONCH-H BANK OF CHINA-H
CHINA PACIFIC-H
5.56
0.1801802
23775986
4.24
2.912621
65427515
19.52
1.878914
3218520
DONGFENG MOTOR-H
11.28
5.420561
21862668
CHINA CITIC BK-H
3.98
0.5050505
17326920
GUANGZHOU AUTO-H
6.26
3.130148
4743388
CHINA COAL ENE-H
7.52
-0.9222661
20537448
HUANENG POWER-H
6.88
0.8797654
23653752
CHINA COM CONS-H
7.03
-0.4249292
14012509
IND & COMM BK-H
5.17
0.3883495
221508116
CHINA CONST BA-H
5.87
0.1706485
237810156
JIANGXI COPPER-H
19.74
0.509165
4710683
CHINA COSCO HO-H
3.51
-1.955307
14242000
PETROCHINA CO-H
10.32
0.78125
39198693
CHINA LIFE INS-H
22.5
0
18382701
PICC PROPERTY &
9.89
0
13670195
CHINA LONGYUAN-H
5.23
3.359684
10729000
PING AN INSURA-H
57.65
-0.3457217
16090095
CHINA MERCH BK-H
14.8
0.8174387
22091341
SHANDONG WEIG-H
7.67
0.2614379
11447742
BANK OF COMMUN-H BYD CO LTD-H
NAME
PRICE
DAY %
VOLUME
11.74
0.3418803
11567145
ZIJIN MINING-H
3.06
-0.9708738
29433307
ZOOMLION HEAVY-H
9.75
0.308642
10722004
11.34
-0.8741259
5134081
YANZHOU COAL-H
ZTE CORP-H
MOVERS
8
2 10680
INDEX 10523.89 HIGH
10673.35
LOW
10392.65
7.6
1.198402
37419372
SINOPHARM-H
24.25
1.25261
2187407
52W (H) 11916.1
CHINA NATL BDG-H
10.18
1.901902
27416792
TSINGTAO BREW-H
43.15
-0.1157407
1495767
(L) 8987.76
CHINA OILFIELD-H
15.28
1.192053
2878934
WEICHAI POWER-H
29.7
2.413793
2462961
CHINA MINSHENG-H
30
10380
30-November
4-December
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
AGRICULTURAL-A
2.58
-1.149425
58950078
DAQIN RAILWAY -A
6.32
-0.3154574
19534441
SHANDONG DONG-A
37.47
1.215559
3020125
AIR CHINA LTD-A
4.66
0.2150538
7415324
DATANG INTL PO-A
3.76
-0.265252
5412340
SHANDONG GOLD-MI
35
-1.547117
10083065
10.22
2.097902
13634290
SHANG PHARM -A
10
1.214575
6153318
2.29
0
43474218
SHANG PUDONG-A
7.43
1.088435
34974819 2600767
NAME
NAME
NAME
ALUMINUM CORP-A
4.66
1.746725
8419084
EVERBRIG SEC -A
ANGANG STEEL-A
3.42
0.8849558
9430045
GD POWER DEVEL-A
ANHUI CONCH-A
16.61
0.6056935
11686426
GEMDALE CORP-A
5.55
2.5878
63747700
SHANGHAI ELECT-A
BANK OF BEIJIN-A
7.21
1.692525
22280265
GF SECURITIES-A
11.19
2.66055
19834740
SHANXI LU'AN -A
BANK OF CHINA-A
2.74
0
17632553
GREE ELECTRIC
22.98
-1.203783
11534223
BANK OF COMMUN-A
4.22
0.2375297
26005757
GUANGHUI ENERG-A
15.03
2.734108
9861083
HAITONG SECURI-A
8.15
3.164557
HANGZHOU HIKVI-A
26.92 2.34
BAOSHAN IRON & S BYD CO LTD -A
4.63
0
VOLUME
3.6
0.5586592
15.6
1.430429
6140294
SHANXI XINGHUA-A
34.03
4.162841
6084844
15920787
SHANXI XISHAN-A
10.61
0.7597341
8881378
44289652
SHENZEN OVERSE-A
5.87
1.206897
23517374
0.5227782
1649909
SICHUAN KELUN-A
51.35
-0.09727626
958993
1.298701
13460021
SUNING APPLIAN-A
5.91
1.19863
18938324 1078251
15.41
-0.3234153
2609403
CHINA CITIC BK-A
3.66
1.666667
14118632
CHINA CNR CORP-A
4.28
0.9433962
38724721
53.16
-1.810122
2145834
TASLY PHARMAC-A
49.81
0.3222558
CHINA COAL ENE-A
6.79
0.7418398
4432479
HONG YUAN SEC-A
14.7
3.813559
11786630
TSINGTAO BREW-A
29.75
0.4049949
2691664
CHINA CONST BA-A
4.17
0
22738841
HUATAI SECURIT-A
7.54
2.168022
10777821
WEICHAI POWER-A
23.2
4.269663
13812106
CHINA COSCO HO-A
4.25
0.2358491
11374242
HUAXIA BANK CO
8.16
0.990099
27491020
WUHAN IRON & S-A
2.71
0.7434944
38224577
CHINA CSSC HOL-A
18.78
0.5353319
4208529
IND & COMM BK-A
3.84
-0.5181347
24496737
WULIANGYE YIBIN
24.66
1.439737
56213226
CHINA EAST AIR-A
2.98
0.6756757
10820557
INDUSTRIAL BAN-A
12.7
1.844427
48761273
YANGQUAN COAL -A
11.38
1.426025
11096173
CHINA EVERBRIG-A
2.57
0.390625
35221729
INNER MONG BAO-A
30.52
2.27882
35773821
YANTAI WANHUA-A
13.13
1.782946
7426013
18.06
1.460674
9995697
INNER MONG YIL-A
19.32
-0.5661348
5498726
YANZHOU COAL-A
15.53
0.6480881
2270497
CHINA MERCH BK-A
9.98
0.7063572
23933387
INNER MONGOLIA-A
4.6
1.098901
52282734
YUNNAN BAIYAO-A
63.16
0.7979572
1706505
CHINA MERCHANT-A
24.81
2.520661
10642252
JIANGSU HENGRU-A
27.19
-0.9832484
6152155
ZHONGJIN GOLD
14.56
-1.019714
12496761
CHINA MERCHANT-A
8.38
2.319902
8109383
JIANGSU YANGHE-A
93.54
1.906526
2307590
ZIJIN MINING-A
3.53
-0.8426966
31039945
84499996
JIANGXI COPPER-A
20.29
1.348651
4461734
ZOOMLION HEAVY-A
7.99
1.653944
23576101
JINDUICHENG -A
10.03
0.8040201
3057362
ZTE CORP-A
7.8
2.094241
8787634
ZTE CORP-A
7.75
-0.8951407
7062265
CHINA LIFE INS-A
CHINA MINSHENG-A CHINA NATIONAL-A CHINA OILFIELD-A CHINA PACIFIC-A CHINA PETROLEU-A
6.28
1.453958
HEBEI IRON-A HENAN SHUAN-A
7.39
3.646564
44399289
15
0.536193
2103345
KANGMEI PHARMA-A
14.4
-0.2079002
16952048
17.61
1.850781
20290679
KWEICHOW MOUTA-A
196.95
-1.618462
7870541
6.11
0
17425994
LUZHOU LAOJIAO-A
31.11
0.4196256
11875265
2.05
0.4901961
32792822
CHINA RAILWAY-A
5.58
2.197802
33114390
METALLURGICAL-A
CHINA RAILWAY-A
2.9
1.754386
48054267
NINGBO PORT CO-A
2.45
0
7642182
CHINA SHENHUA-A
21.57
0.7002801
8930379
PANGANG GROUP -A
3.13
1.954397
36367352
8.58
1.298701
13257481
CHINA SHIPBUIL-A CHINA SOUTHERN-A
4
1.78117
31676623
PETROCHINA CO-A
3.34
0.3003003
16405995
PING AN BANK-A
12.7
1.11465
11692406
37.39
2.074802
MOVERS
244
39
17 2150
INDEX 2131.473
CHINA STATE -A
3.25
1.5625
151841060
PING AN INSURA-A
23192468
HIGH
2149.73
CHINA UNITED-A
3.28
1.234568
46090560
POLY REAL ESTA-A
11.85
0.8510638
36400416
LOW
2104.57
CHINA VANKE CO-A
8.95
1.704545
62180176
QINGDAO HAIER-A
11.17
0.2692998
6451390
CHINA YANGTZE-A
6.38
0.3144654
9995694
QINGHAI SALT-A
22.63
0.891663
2558448
CITIC SECURITI-A
10.17
1.7
47627162
SAIC MOTOR-A
14.32
0
28357888
CSR CORP LTD -A
4.84
0
29662527
SANY HEAVY INDUS
7.82
2.624672
22522727
PRICE DAY %
Volume
PRICE DAY %
Volume
52W (H) 2717.825 (L) 2102.135
2100
30-November
4-December
FTSE TAIWAN 50 INDEX NAME
NAME
NAME
PRICE DAY %
25.9
1.968504
19787227
FORMOSA PLASTIC
74.6
-2.228047
8019182
ADVANCED SEMICON
24.1
-1.229508
21928245
FOXCONN TECHNOLO
102
1.492537
10295073
TPK HOLDING CO L
ASIA CEMENT CORP
37.1
-1.066667
3269698
FUBON FINANCIAL
33.15
0.3025719
12750122
TSMC
ASUSTEK COMPUTER
320
0.4709576
5834064
HON HAI PRECISIO
95.3
0.6335797
48577671
UNI-PRESIDENT
13.45
3.461538
206135486
HOTAI MOTOR CO
211
-1.401869
424599
UNITED MICROELEC
151
2.372881
15654181
HTC CORP
278.5
4.502814
24481757
0
5763898
31
0.8130081
17575751
HUA NAN FINANCIA
16.3
-1.212121
4830627
YUANTA FINANCIAL
14.7 -0.6756757
24393347
CHANG HWA BANK
15.7 -0.9463722
7889914
LARGAN PRECISION
787
1.156812
1280202
YULON MOTOR CO
52.4
CHENG SHIN RUBBE
74.8
0
6520331
LITE-ON TECHNOLO
39.3 -0.7575758
4641063
CHIMEI INNOLUX C
14.4
3.597122
214928959
MEDIATEK INC
332 -0.8955224
8560053
CHINA DEVELOPMEN
7.15
0
40283560
MEGA FINANCIAL H
22.7 -0.2197802
10468622
CHINA STEEL CORP
26.2 -0.1904762
20711913
NAN YA PLASTICS
51
-1.162791
4209810
CHINATRUST FINAN
17.1
32786629
PRESIDENT CHAIN
152.5
0.9933775
1346320
AU OPTRONICS COR CATCHER TECH CATHAY FINANCIAL
CHUNGHWA TELECOM
0.8849558
93.7 -0.2129925
5857740
QUANTA COMPUTER
71.5
-0.27894
5225569
52933276
SILICONWARE PREC
31.55
0.6379585
6963650
0.9389671
2595691
SINOPAC FINANCIA
12.15
0
18129506
-2.026049
12159823
SYNNEX TECH INTL
57.2
3.063063
14630402
0
7485216
TAIWAN CEMENT
37.7 -0.7894737
6881361
COMPAL ELECTRON
20.55
0.2439024
DELTA ELECT INC
107.5
FAR EASTERN NEW
33.85
FAR EASTONE TELE
71.5
FIRST FINANCIAL
17.65 -0.5633803
8521231
TAIWAN COOPERATI
FORMOSA CHEM & F
67.6 -0.7342144
3995841
TAIWAN FERTILIZE
FORMOSA PETROCHE
86.9
1409303
TAIWAN GLASS IND
-2.796421
15.95
-0.623053
7090568
75
0.536193
2210601
26.8
-1.470588
1811421
TAIWAN MOBILE CO
Volume
ACER INC
WISTRON CORP
MOVERS
104
0
3886377
488.5
5.507559
10491967
96.6
-1.327886
41589268
51.5
0.1945525
5191559
11.1 -0.4484305
52658712
31.65
20
24
-1.132075
4643909
6 5375
INDEX 5348.21 HIGH
5372.45
LOW
5300.34
52W (H) 5621.53 5300
(L) 4643.05 30-November
4-December
December 5, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) gaLaXY eNTerTaINMeNT
MeLCo CroWN eNTerTaINMeNT
MgM CHINa HoLDINgS
30
29
28
Max 29.05
average 27.85
Min 27.5
Last 27.55
27
Max 39.4
SaNDS CHINa LTD
average 31.689
Max 33
average 39.145
Min 31.05
13.8
38.8
Last 39
Last 31.35
17.70
31.5
17.35
31.0
Max 14.34
average 13.885
Min 13.68
Last 13.9
22.2
21.6
21.0
17.00 Max 18.3
average 17.620
-9.009101135
109.6699982
79.68000031
BRENT CRUDE FUTR Jan13
110.79
-0.117201587
7.043478261
120.7699966
90.15999603
GASOLINE RBOB FUT Jan13
272.38
-0.099028058
10.12371634
293.3099985
218.4999943
GAS OIL FUT (ICE) Jan13
949.25
-0.315043318
5.913528591
1036.25
799.25
3.58
-0.306321359
-7.803244914
4.394999981
3.062000036
HEATING OIL FUTR Jan13 Gold Spot $/Oz Silver Spot $/Oz Platinum Spot $/Oz Palladium Spot $/Oz
DAY %
YTD %
(H) 52W
Min 17.16
Last 17.24
20.4 Max 22.1
average 20.881
305.27
-0.114521301
6.239994432
334.2199802
255.5699825
1707.88
-0.5335
9.136
1796.08
1522.75
33.415
-0.4172
20.0467
37.4775
26.1513
1598.78
-0.1249
14.649
1736
1339.25
685.5
0.6608
4.8967
725.19
553.75
LME ALUMINUM 3MO ($)
2120
1.241642789
4.95049505
2361.5
1827.25
8005
0.125078174
5.328947368
8765
7131
LME ZINC
2041
-0.244379277
10.62330623
2220
1745
17500
-0.849858357
-6.467129877
22150
15236
15.45
0.487804878
0.61869098
16.60000038
14.60000038
752.75
-0.264988407
25.4060808
846.25
511
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jan13 Mar13
PRICE
(L) 52W
LME COPPER 3MO ($)
Last 20.6
Min 20.55
MAJORS
ASIA PACIFIC
CROSSES
MACAU RELATED STOCKS 2990686
CROWN LTD
10.21
-0.9699321
26.20519
10.34
7.92
1461326
18.65999985
AMAX HOLDINGS LT
0.066
1.538462
-24.13793
0.119
0.055
4186000
66.84999847
BOC HONG KONG HO
23.8
0.2105263
29.34783
25
17.46
8425776
COFFEE 'C' FUTURE Mar13
150.6
-0.066357001
-36.70939273
249
147.0999908
SUGAR #11 (WORLD) Mar13
19.79
0.202531646
-15.28253425
25.12999916
COTTON NO.2 FUTR Mar13
73.38
-0.811030008
-17.09411366
98.5
World Stock MarketS - Indices
NAME ARISTOCRAT LEISU
PRICE
DAY % YTD %
VOLUME CRNCY
CENTURY LEGEND
0.27
0
17.3913
0.335
0.204
0
CHEUK NANG HLDGS
4.25
0.9501188
51.78572
4.36
2.5
306034
CHINA OVERSEAS
22.4
0.2237136
72.76755
23.3
12.066
13921668
CHINESE ESTATES
11.5
0
-8
13.26
8.3
3000
CHOW TAI FOOK JE
11.14
-0.7130125
-19.97126
15.16
8.4
5645800 1600000
EMPEROR ENTERTAI
1.79
0
61.26126
1.82
0.99
FUTURE BRIGHT
1.28
-2.290076
204.7619
1.43
0.38
2740000
27.55
-4.506066
93.4691
29.85
13.28
35173730
117
-0.7633588
26.9669
120
91.15
1282393
30.25
0
54.31975
31.091
19.049
791000
78.7
0.5750799
33.38983
79.55
57.05
14654568
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
12965.6
-0.4604785
6.122663
13661.87
11735.19
NASDAQ COMPOSITE INDEX
US
3002.198
-0.2671879
15.24089
3196.932
2518.01
HANG SENG BK
FTSE 100 INDEX
GB
5870.3
-0.01601025
5.34826
5989.07
5229.76
HOPEWELL HLDGS
DAX INDEX
GE
7435.38
0.002286418
26.05864
7487.89
5637.53
HSBC HLDGS PLC
NIKKEI 225
JN
9432.46
-0.2719339
11.55612
10255.15
8238.96
HUTCHISON TELE H
HANG SENG INDEX
HK
21799.97
0.1475571
18.25707
22162.47
17821.51953
CSI 300 INDEX
CH
2131.473
1.072765
-9.134383
2717.825
TAIWAN TAIEX INDEX
TA
7600.98
0.01407911
7.478703
8170.72
4503.575
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
2.16
1126.75
AU
(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
(L) 52W
652
1781.5
2057.28
(H) 52W
2.5076 3.7251 1.4053 0.8873 -6.2416 0.2142 0.2232 1.1148 -2.9447 2.8357 6.4008 4.1303 7.2145 -5.5608 -8.6375 0.5836 2.7469 -0.0025 -0.8296 -7.0856 0.0097
3.32
948.25
19.99175598
5.994285
YTD %
(H) 52W
16.82561308
0.120378332
-0.249482
0.4319 0.3923 0.0324 0.3222 0.1219 0 0 0.0498 0.1646 -0.0978 0.1231 0.0619 0.0245 0.1145 -0.3215 -0.3017 0.0678 -0.2078 -0.3152 -0.2051 0
45.45454
-0.377577694
1935.18
DAY %
1.0465 1.6122 0.9251 1.3076 82.03 7.9825 7.7501 6.2256 54.675 30.68 1.2186 29.078 40.89 9603 85.847 1.20973 0.81111 8.1344 10.4386 107.26 1.03
1.587302
857.5 1455.5
SK
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
3.2
WHEAT FUTURE(CBT) Mar13 SOYBEAN FUTURE Jan13
GALAXY ENTERTAIN
3.42
-0.5813953
14.38127
3.88
2.83
6848000
LUK FOOK HLDGS I
23
-1.075269
-15.12915
34.3
14.7
1325000
MELCO INTL DEVEL
7.95
-3.753027
37.78163
8.35
5.12
7834000
2102.135
MGM CHINA HOLDIN
13.9
-3.06834
44.91011
14.76
9.432
2898003
6609.11
MIDLAND HOLDINGS
3.51
0.2857143
-11.23019
5.217
3.249
1722000
NEPTUNE GROUP
0.156
0
40.54054
0.222
0.084
7920000
NEW WORLD DEV
12.14
-1.140065
93.92971
13.2
6.13
9066589
SANDS CHINA LTD
31.35
-4.420732
42.8246
33.95
20.35
24901010
1750.6
-0.6164173
11.01955
4581.8
3985
ID
4251.758
-1.178075
11.24455
4381.746094
3635.283
SHUN HO RESOURCE
1.27
1.6
27
1.37
0.97
0
FTSE Bursa Malaysia KLCI
MA
1607.11
-0.01493141
4.989777
1679.37
1448.54
SHUN TAK HOLDING
3.83
5.21978
49.66034
3.87
2.418
28390917
NZX ALL INDEX
NZ
869.368
-0.7800704
19.12409
878.077
712.548
SJM HOLDINGS LTD
17.24
-5.79235
37.85894
18.36
11.973
11891633
2965.32
SMARTONE TELECOM
14.32
0.1398601
6.547622
17.5
12.96
882451
20.6
-5.504587
5.641026
25.5
14.62
15526974
PHILIPPINES ALL SHARE IX
13.6
WYNN MaCaU LTD
32.0
-0.123470648
JAKARTA COMPOSITE INDEX
39.0
18.05
88.98
S&P/ASX 200 INDEX
14.0
32.5
WTI CRUDE FUTURE Jan13
KOSPI INDEX
39.2
18.40
PRICE
NAME
14.2
33.0
NAME
CORN FUTURE
39.4
CURRENCY EXCHANGE RATES
NATURAL GAS FUTR Jan13
METALS
14.4
SJM HoLDINgS LTD
Commodities ENERGY
Min 38.9
39.6
PH
3676.53
HSBC Dragon 300 Index Singapor
SI
603.91
0.76
21.68
NA
NA
STOCK EXCH OF THAI INDEX
TH
1329.2
-0.2790865
29.63758
1335.19
1006.16
HO CHI MINH STOCK INDEX
VN
382.1
0.7461703
8.690092
492.44
Laos Composite Index
LO
1196.44
0
33.01758
1249.34
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
0.4209094
20.73832
3677.42
WYNN MACAU LTD ASIA ENTERTAINME
3.37
0.297619
-42.68708
7.24
2.4
140584
BALLY TECHNOLOGI
44.73
-0.9082853
13.06875
51.16
35.79
917564
332.28
BOC HONG KONG HO
3.09
0
28.90106
3.3
2.24
36932
876.33
GALAXY ENTERTAIN
3.78
-0.2638522
102.139
3.87
1.75
12200
INTL GAME TECH
14.32
3.244412
-16.74419
18.1
10.92
8399884
JONES LANG LASAL
81.53
-0.5852945
33.08848
87.52
56.51
228989
LAS VEGAS SANDS
46.75
0.2143623
9.407911
62.09
34.72
11283340
MELCO CROWN-ADR
15.37
0.7208388
59.77131
16.02
8.32
1969219
MGM CHINA HOLDIN
1.82
0
52.72387
1.96
1.1917
1200
MGM RESORTS INTE
10.17
0.1970443
-2.492812
14.9401
8.83
8131791
SHFL ENTERTAINME
13.65
-0.7994186
16.46757
18.77
10.61
275435
SJM HOLDINGS LTD
2.33
0
44.939
2.36
1.5484
1000
113.3986
0.8884342
9.456522
129.6589
84.4902
1393905
WYNN RESORTS LTD
AUD HKD
USD
14 |
business daily December 5, 2012
Opinion Germany’s past shows why it should help Greece John Sfakianakis
Greek economist and chief economist of Banque Saudi Fransi
G
ermany’s Chancellor Angela Merkel has at last opened the door to the possibility of writing off Greek debts, but only several years from now. As they decide on the right thing to do, Germans should take a close look at their own history. As Merkel indicated in her December 2 interview with Bild, a German tabloid, for the country to trigger the unravelling of the euro area by letting Greece default would damage its own economic and political interests. The economies of trading partners in Europe might collapse, costing Germany far more than the Greek debt forgiveness it refused. More than this, Germany should recognise that it has a moral obligation to help, just as the U.S. and its allies, including Greece, helped Germany after World War II. This is a largely forgotten history that, if recalled, might counter the false narrative of virtuous Germans and feckless Greeks that has hardened popular opposition to bailouts. Under the aegis of the U.S., the introduction of the deutsche mark in 1948 wiped out most of Germany’s domestic debt, both public and private, which amounted to roughly four times the country’s 1938 gross domestic product. This move helped Germany to start afresh and begin the economic miracle at which we all still marvel.
German bailout Germany was granted a waiver on its external debt, including the deferral of
interest payments, from 1947 to 1952 as the Marshall Plan was implemented. In 1953, the U.S. also imposed the London Debt Agreement on its wartime allies, which wrote off Germany’s external debt. Albrecht Ritschl, an economic historian at the London School of Economics, estimated earlier this year that the total debt forgiveness West Germany received from 1947 to 1953 was more than 280 percent of the country’s 1950 gross domestic product, compared with the roughly 200 percent of GDP that Greece has been pledged in aid since 2010. Greece also contributed to the post-war German debt relief. Signatories to the London agreement, including Greece, agreed to defer settlement of war reparations and debts incurred after 1933 until a conference to be held after Germany’s reunification. Although Germany paid compensation to individuals in the 1960s, the conference never took place and many Greeks think that more was due. The bailout of Germany was at least as controversial as the Greek one today. Just like Greece, Germany’s tax system in the 1950s was imperfect. Difficulties in changing it had led to revenue shortfalls in the interwar period. Throughout the negotiations, discontent was voiced in the U.S. Congress, where legislators objected to taxpayer money being written off. The German Bundestag initially rejected the London agreement, with many legislators disagreeing on the treatment of post-war repayments to France, because they thought this would
legitimise what they considered to be French occupation of German territory. It took U.S. pressure to push the agreement through at a second Bundestag vote. The 1953 agreement reduced the repayable amount of Germany’s external debt by 50 percent and spread out its payment by three decades. It allowed Germany to return to international capital markets and join the International Monetary Fund, World Bank and the World Trade Organization. While the rest of Western Europe in the 1950s struggled with debts of about 200 percent of GDP, West Germany, because of the restructuring, enjoyed a debt of less than 20 percent of GDP.
Stable Europe Germany relinquished some sovereignty in this process, but it owes its economic success since then to the massive haircut that it was granted in 1953, as well as to the determination of the U.S. leadership – and to a lesser extent its allies – to rebuild Germany. That generosity provided Germany with an escape route from an unsustainable debt situation, and it provided the allies with a stable and prosperous neighbour through the Cold War and beyond. Today, Germany should have the same foresight. A long-lasting debt-relief deal that removes uncertainty over Greece’s place in the euro area would trigger a virtuous cycle, encouraging much-needed foreign investment and growth.
In doing so it would reduce deficits in Greece, while at the same time remove doubts about Spain, Italy and the viability of the euro. Critics accuse Greece of being dilatory, anti-reformist, corrupt and crony-capitalist. They’re right. Germany’s Konrad Adenauer was a visionary and a leader, traits that Greece’s politicians lack. Greece does now need to step up and reform, and at least Prime Minister Antonis Samaras
Delaying a meaningful, longterm debt solution means that Greece’s growth prospects continue to dwindle as the economy implodes
and his fragile government are making slow progress, in contrast to the hapless dithering of George Papandreou. The rhetoric of blame in Germany ignores that Greek society has reached the limits of endurance, meaning that additional taxes can’t be levied nor salaries cut without inciting social
unrest. The rise of the neo-fascist Golden Dawn party, which ranks third in recent opinion polls, is a menace to democracy. Countries can change in crisis, as Germans should know all too well. Germany’s inter-war experience, marked by harsh reparations after its defeat in World War I and unyielding creditors, led to social unrest and the rise of fascism. The Marshall Plan and debt forgiveness after World War II were designed by the U.S. to avoid a repetition of that bitter experience. They helped to forge a different Germany and a different Europe. In 1953, West Germany was reassured that its debt would remain manageable. Foreign policy interests preceded pure returns on capital and West Germany was safeguarded. It helped that the Soviet Union was on the other side of a fence that Germany’s wartime foes wanted to strengthen. The Marshall Plan and the London agreement made Germans confident that the U.S. and its allies would safeguard German prosperity.
Reassure Greeks A similar agreement with Greece would reassure its people that the excruciating measures they are being asked to accept in the short term will eventually pay off. As it stands, Greece today does not feel safeguarded. Delaying a meaningful, longterm debt solution means that Greece’s growth prospects continue to dwindle as the economy implodes. At the core of Germany’s negotiating position in 1953 was the awareness that growth and exports had to be fostered in order for the country to be able to pay off debt. Harsh repayment terms wouldn’t have helped achieve that end. This is why the U.S. in 1953 forgave most of Germany’s Marshall Plan loans. After the war, everything ultimately depended on the U.S. In the euro crisis, everything depends on Germany. Time is running out for Germany to do the right thing and show it’s willing to do what’s necessary to support Greece and the currency that binds Europe. Bloomberg View
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December 5, 2012 business daily | 15
OPINION Business
wires
Europe’s economic war of attrition
Leading reports from Asia’s best business newspapers
Straits Times
I
Singapore’s bus operator SMRT Corp. will not be raising the salary of its bus drivers from China beyond a US$25 increment that was announced last week. SMRT chief executive Desmond Kuek said their compensation terms compared to Malaysian drivers were “fair and equitable”. He noted that Chinese drivers have their transport, accommodation and utilities subsidised – which amounts to about US$275 each month. Last Monday, 171 SMRT bus drivers from China went on strike to protest about wages and living conditions.
Asahi Shimbun Leaders for Japan’s biggest political parties kicked off the campaign for general election to be held in less than two weeks with visits to nuclear crisis-hit Fukushima prefecture. Nuclear energy and the economy are key issues in the December 16 election, which is widely expected to send Prime Minister Yoshihiko Noda’s unpopular Democratic Party of Japan to defeat after three years in power. The opposition Liberal Democratic Party is leading in the polls, but is unlikely to win a majority of seats in the lower house of parliament.
Business Inquirer Philippine Power Sector Assets and Liabilities Management Corp. expects to start collecting the P140 billion (US$3.4 billion) worth of universal charges for stranded debts and contract costs from all grid-connected power consumers early next year. This followed reports that the Energy Regulatory Commission might release by January 2013 the muchawaited decision regarding PSALM’s application to collect the universal charge. Should PSALM’sapplicationbeapproved, consumers can expect to pay another 36 centavos a kilowatthour over the next four years.
Jakarta Post Lawmakers on the House of Representatives’ Commission overseeingenergyaffairsendorsed the government’s bid to boost the quota for subsidised fuels for the second time this year amid soaring consumption. “We insist the government carries out an audit of its fuel distribution management,” said Effendi Simbolon, a politician with the Indonesian Democratic Party of Struggle, who chaired the meeting in Jakarta on Monday.
Mohamed A. El-Erian
CEO and co-CIO of PIMCO and the author of When Markets Collide
was nine years old when Egypt entered what became known as its “war of attrition” with Israel. During this period of “no war and no peace,” underlying tensions festered, and a fragile tranquillity was periodically interrupted by armed skirmishes. The war of attrition followed the June 1967 war, in which Egypt – to the immense surprise of most of its citizens and the outside world – was soundly defeated. Its air force was crippled and its army was virtually overrun, with Israel capturing the entire Sinai Peninsula. Positioned on the eastern bank of the Suez Canal, Israel’s army was just over 100 kilometres from Cairo. And, with Israeli jet fighters still controlling the airspace, Egypt’s capital and its major population centres were greatly exposed. The official narrative reflected little of this. Whether on state television or in government-controlled newspapers – at the time, there was no free press, Internet, or cable news – citizens were reassured that Egypt had regained control of its destiny. But they knew better. To this day, I remember vividly the sense of general anxiety that prevailed among citizens, accentuated by deep concern about what the future might hold. People were afraid to invest, and many wondered whether they should emigrate in search of a better future. With the underlying issues left unaddressed, the war of attrition was followed by another full-scale war in 1973 – one that again surprised most people inside and outside Egypt. This time, the Egyptian armed forces won a number of early battles and secured a cease-fire that regained part of the Sinai, setting the stage for the 1979 peace agreement with Israel. I recount this history not to draw a parallel with today’s Israeli-Palestinian conflict, which, just a couple of weeks ago, resulted in many civilian deaths, overwhelmingly in Gaza. Rather, it is because I see too many parallels with what is happening in the European debt crisis.
Economic threat European citizens – particularly in peripheral economies such as Greece, Portugal, and Spain – are anxious. Unemployment is unacceptably high, and is still rising. Their economies continue to implode, leading to cumulative contractions that are setting tragic new records. Poverty is on the rise. Not surprisingly, increased emigration to the stronger euro zone countries (such as Germany) has been
accompanied by higher outflows of financial capital. Admittedly, and fortunately, the parallels are far from perfect. Europe does not have armed conflicts. Feelings of intense insecurity are not related to bombs and sirens. The threat is economic rather than military. Yet there is a real sense of “no peace and no war.” Europe’s economic peace remains elusive for a simple reason: governments have still not found a way to generate the trifecta of growth, employment, and financial stability. The longer this prevails, the more oxygen is sucked out of sectors that remain relatively healthy – and for three distinct reasons. First, the euro zone economy is extremely interconnected. As such, it is only a matter of time until weakness in one part migrates to other parts. Witness what is happening in Germany, a well-managed country once thought itself immune from the troubles around it. After a period of record low unemployment, economic growth has slowed markedly, reaching just 0.2 percent in quarterly terms in July-September. On current trends, the fourth quarter’s growth rate will turn negative. Second, the euro zone’s bailout bill continues to rise. Cyprus is expected to join the other three “programme countries” (Greece, Ireland, and Portugal) in requiring considerable official financing; and, of the other three, only Ireland is getting close to regaining normal access to capital markets. With Spain also requiring billions more to recapitalise its banks, the contingent claims on taxpayers in the core countries continue to mount. Indeed, this is one of the factors that contributed to Moody’s decision – following Standard & Poor’s – to strip France of its AAA credit rating. Finally, adverse contagion is extending beyond the 17 countries in the euro zone. The region’s debt crisis is undermining cooperation within the larger 27-member European Union, resulting in the spectacular failure of the recent summit on the EU budget. It has also contributed to the economic slowdown in China, raising concerns (which I believe are exaggerated) that the country’s new leadership may have problems engineering a soft landing for an economy accustomed to double-digit (or high singledigit) growth.
Financial cease-fire This lack of peace would have resulted in outright economic and financial war if not for the critical – and growing – role played by the
European Central Bank. Under the bold leadership of Mario Draghi, the ECB has committed to provide as much time as possible for most governments to get their acts together. And it has done so by relying on innovative measures that substitute its elastic balance sheet for those of over-extended governments, gun-shy private investors, and fleeing bank depositors.
… the delay in implementing a comprehensive solution will eventually overwhelm the defences that the ECB has so courageously put in place
Yet it would be a grave mistake to assume that the ECB can deliver lasting economic peace. It cannot. If governments continue to dither and bicker, the most that it can do is delay the war for a while. Like Egypt’s war of attrition, the euro zone’s underlying economic, financial, and social ferment continues. If governments continue to stumble from one patchwork remedy to another – a probability that remains uncomfortably high – the delay in implementing a comprehensive solution will eventually overwhelm the defences that the ECB has so courageously put in place. Some say that, just as Egypt’s war of attrition eventually gave way to a fullscale war and then a peace treaty, Europe needs a major crisis to move forward. But this is a dangerous notion, one that entails not just massive risks, but also unacceptably high interim human costs. European governments are well advised to use the financial cease-fire that the ECB is willing to buy for them. Allowing it to expire without progress toward permanent stability would expose Europe to disruptions that would diminish significantly its prospects for long-term economic stability, growth and job creation. © Project Syndicate
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business daily December 5, 2012
CLOSING U.S. Republicans reject tax hike
Olam debt concerns persist
Republicans proposed steep spending cuts on Monday but gave no ground on President Barack Obama’s call to raise taxes on the wealthiest in their first formal proposal to avert a “fiscal cliff” that could push the U.S. economy into recession. After days of stalemate, the Republican offer shows deep differences with President Barack Obama as the two sides work to head off across-the-board spending cuts and tax increases due to take effect in January. The White House dismissed the proposal but it could allow negotiators to begin work in earnest as both sides now have outlined their visions in concrete terms.
Olam International Ltd’s US$1.2 billion cash call lifted its shares but failed to ease concerns about the Singapore commodities firm’s financial position. Olam managed to get full backing from powerful Singapore state investor Temasek Holdings Pte Ltd, for a complex bonds-with-warrants issue to battle short-seller Muddy Waters. The move sent its shares up more than 8 percent yesterday. But critics, including Muddy Waters and several analysts, warned that Olam needs to shore up its weak cash position after piling up debt to finance expansion. Bond markets have grown jittery over debt which totalled US$6.9 billion at the end of September.
Osborne urged to boost growth As British Chambers of Commerce cuts U.K. outlook
George Osborne – taking longer than expected to balance public finances
B
ritain’s recovery will be slower than previously forecast and the economy needs more support from the government through a programme of business investment, according to the British Chambers of Commerce.
The BCC cut its 2013 growth forecast to 1 percent from 1.2 percent in September and its 2014 projection to 1.8 percent from 2.2 percent, the London-based group said in a report yesterday, citing a weaker global backdrop and the likelihood of further
fiscal tightening by the government. A separate release from Markit Economics showed construction output unexpectedly shrank in November as orders and confidence plunged. Chancellor of the Exchequer George Osborne will deliver his autumn economic statement to Parliament today and must manage a commitment to his fiscal squeeze alongside a risk that excessive tightening will prevent a recovery. Acknowledging this, the BCC called for measures to boost company investment while protecting Britain’s top credit rating. “Growth is still too weak,” said BCC Director General John Longworth. “We have always been behind the chancellor’s aim of reducing the deficit, but this has to be supported with the right conditions that allow businesses to thrive, or we will fail to see the growth the economy so desperately needs.” Britain’s double-dip recession ended with 1 percent growth in the third quarter, though the Bank of England has forecast a “zig-zag” pattern for gross domestic product and sees a possible contraction this quarter. Governor Mervyn King said
on November 14 that the recovery will be “long and winding”. The BCC, which represents 104,000 businesses employing more than 5 million people, raised its growth forecast for 2012 and now sees a 0.1 percent contraction. The upgrade reflects the third quarter expansion that was boosted by the London Olympics and other one-time factors. The group pared its projection for unemployment and now sees the number of jobless increasing to about 2.65 million people at the end of 2013 compared with an earlier prediction of 2.75 million. Mr Osborne said on Sunday that it’s taking longer than expected to balance the public finances, suggesting his plan to eliminate the bulk of the deficit may be extended by another year to 2018, while a target to trim debt may also be missed. The BCC said the deficit plan will take “two to three years longer” than envisaged in the March 2012 budget. The business lobby also forecast that the Bank of England won’t restart gilt purchases and said that adding to quantitative easing should only be considered “if new threats emerge to the stability of the U.K. banking system”. It said the BOE should make “better use” of the program by buying private-sector assets rather than gilts. The Monetary Policy Committee begins a two-day meeting tomorrow and all 36 economists in a Bloomberg News forecast that the target for purchases will be held at 375 billion pounds (US$603 billion). Bloomberg News
China to fine-tune policies in 2013 To make them more targeted and effective, says Xi Jinping
C
hina will maintain its finetuning of economic policies in 2013 to ensure stable economic growth, state television quoted Chinese Communist Party chief Xi Jinping as saying yesterday. Addressing a politburo meeting, Mr Xi said the government aimed to stabilise exports as the world’s secondlargest economy faced both favourable factors and challenges next year. “We will keep continuity and stability of macro-economy policies, prioritising on making policies more targeted and effective while finetuning policies when appropriate,” state television cited Mr Xi as telling the meeting. “China will make more efforts on expanding domestic demand and fostering new consumption growth areas.” The government would keep prices basically stable while
strengthening property controls, Mr Xi was quoted as saying. The government would also deepen economic reforms, including allowing market forces to play a bigger role in setting prices of resource products and expanding value-added tax reforms. Authorities will also push forward reform of state firms, he added. China’s annual economic growth dipped to 7.4 percent in the third quarter, slowing for seven quarters in a row and leaving the economy on course for its weakest showing since 1999. The economy has been recovering thanks to a raft of pro-growth policies in recent months, but it faces uncertainties next year from the looming “fiscal cliff” in the United States and Europe’s debt crisis. Under the banner of policy “fine-tuning”, China’s central bank cut interest rates twice in June and July and lowered banks’ reserve
Xi Jinping vows to make more efforts to expand domestic demand
requirement ratio (RRR) three times since late 2011, freeing an estimated 1.2 trillion yuan (US$193 billion) for boosting loans. But it has refrained from cutting interest rates or RRR since July,
opting to inject short-term cash via its open market operations into money markets – a move that analysts say could underscore its concerns over inflation and property risks. Reuters