Macau Business Daily, January 17, 2013 by Business Daily

Year I Number 201 Thursday January 17, 2013 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP 6.00 www.macaubusinessdaily.com

In gold we trust – consumers seeking inflation hedge R

etail sales of gold have grown more strongly than those for jewellery in the city as buyers seek more effective hedges against inflation and easily convertible assets in a still-troubled global economy. The demand for gold might in part be linked

with the recent third round of monetary easing – in effect printing more money – in the United States, said Macau Goldsmith’s Guild. So-called ‘QE3 has had the effect of devaluing the U.S. dollar – normally considered a good bet for investors. “People have lost faith in the currency and

turned to gold,” the guild’s president Lei Chi Fong told Business Daily. The price of gold in Macau is currently about 17,000 patacas (US$2,129) an ounce (28.35 grams) – similar to the price a year ago, he said. More on page 3

Love of the common people – casinos build mass market

Banks are all in for deposit protection scheme

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Bus ops accept scrutiny Next stop subsidy boost? A full evaluation system on bus operators’ service quality should be in place by the second half of this year – with the companies’ blessing – the Transport Bureau said. Depending on the outcome, it could lead to the public bus companies getting the increase in operating subsidies they have been seeking since last year. The hikes were suspended amid public anger at bus service standards.

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HANG SENG INDEX

VIP baccarat was 69 percent of casinos’ gambling gross last year, compared to 73 percent in 2011, according to data released by the government yesterday. It’s led some analysts to wonder if it’s the start of a trend. A few query whether the growth of the premium mass table market is being achieved at the cost of higher overheads that might drive down mass-market margins.

All 27 financial institutions operating in Macau have joined the fund supporting the bank deposit protection scheme, the fund has confirmed. Each account held by the institutions on behalf of customers will be guaranteed by the government up to a maximum half million patacas (US$62,600). The scheme covers 11 banks incorporated in the city, 15 branches of outside banks and the Postal Savings Office.

Okada loses latest round in his tussle with Wynn

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Tourist prices up – but not as much as locals’ Page 6

HSI - Movers Name

%Day

TENCENT HOLDINGS

3.49

COSCO PAC LTD

2.17

CHEUNG KONG

1.88

WANT WANT CHINA

1.77

SUN HUNG KAI PRO

1.38

HANG LUNG PROPER

-1.46

CHINA MOBILE

-1.52

HENGAN INTL

-1.54

CHINA PETROLEU-H

-1.63

CHINA RES POWER

-2.86

Source: Bloomberg

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Food trade given longer to chew over safety rules

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business daily January 17 2013

macau

Real-time settlements come one step closer

opinion

A dirty job

More demanding rules on banks’ cash reserves will pave the way for an instant funds transfer system Vítor Quintã

vitorquinta@macaubusinessdaily.com

José I. Duarte Economist

acau has taken a first step towards the introduction of a real-time bank settlement system with the revision of 20-year-old rules on the amount of cash on hand and minimum liquidity requirements. The new rules were issued by the Monetary Authority of Macau and published in the Official Gazette yesterday.

The rules might be a greater challenge for bigger banks … because they will require bigger capital reserves José Morgado, chief executive, Banco Espírito Santo do Oriente

They do not come into effect until January 28. The major change to be introduced is how liquidity ratios are calculated. Ratios were previously based on the average weekly amount of cash in hand held by a bank. They will now be calculated on the daily reserves. The revision of the 1993 rules would not have a substantial impact on the operations of Banco Espírito Santo do Oriente, S.A., chief executive José Morgado told Business Daily. “We already covered this issue in our [internal] good practice guidelines,” he said. “These rules might be a greater challenge for bigger banks who were not able to update their technology as quickly because they [the rules] will require bigger capital reserves.” An economist who asked not to be to identified said the rules would be “more demanding when it comes to management”. The changes were made after consultation with the industry to “enhance the banks’ liquidity risk management,” the Monetary Authority of Macau said. It will have “no material impact on Macau banks,” the regulator

Macau banks will soon face daily requirements on their liquidity ratios (Photo: Manuel Cardoso)

Fountainside up for second quarter sale A

42-unit residential project on Penha Hill will be up for sale in the second quarter, developer Macau Property Opportunities Fund Ltd announced yesterday. The low-density property, The Fountainside, will be “substantially completed by the end of the first quarter,” the London-listed fund said in an investor update. Rectification works, overall internal fit-out and finishing works are scheduled for completion in the

second quarter, coinciding with the final public launch phase, it added. The fund managed by Sniper Capital Ltd has already sold 20 units and expects to sell the remaining 18 flats and four villas for an average of US$800 (6,400 patacas) and US$1,400 per square foot, respectively. The villas will be marketed “on an exclusive basis” and will be targeted at “high-net worth individuals, both locally as well as from neighbouring

told Business Daily. The economist said the change was an initial step to allow for the introduction of a real-time gross settlement bank system, similar to the set-up in Hong Kong and the mainland. Currently, the transfer of money or securities between banks are made in batches and settled manually at the end of the day. The new system would allow for these transfers to be made individually and settled immediately online. With the introduction of the daily reserve rules, the system would also be able to reject any transfer that would push any bank beyond the minimum requirements.

All banks behind deposit pledge Macau’s 27 financial institutions have joined a fund established to support a bank deposit protection scheme, the fund has confirmed. A full list published in the Official Gazette yesterday included the 11 banks incorporated in the city, 15 other bank branch offices and the Postal Savings Office. The Postal Savings Office is run as part of Macau Post and its board includes a representative of the Financial Services Bureau. The bank deposit protection act came into effect in October, turning a temporary scheme set up during the global financial crisis in 2008 into a permanent fixture. The government has kick-started the fund, which is run by the Monetary Authority of Macau, with a contribution of 150 million patacas (US$18.8 million). The city’s banks will begin making payments into the fund next year, with an annual contribution equivalent to 0.05 percent of their deposits. In September, the Executive Council set the maximum compensation payable if a bank collapses at 500,000 patacas (US$62,500) for each account. The deposit protection scheme fund aims to cover 95 percent of all deposits in banks. V.Q.

Hong Kong and mainland China,” the note adds. As the fund had predicted in October, the new property cooling measures led to a 15 percent yearon-year increase in home rents at its ‘The Waterside’ complex. The fund has bought back and cancelled 5.15 percent of its own shares in December as part of a prolonged attempt to boost its share price. V.Q.

ewspapers from the past few days have been filled with images from Beijing. An ample dose of fuzzy photographs has been served up from the capital’s streets and buildings showing that air pollution has reached levels hazardous to human health and, I suppose, to other living beings too. Levels of particulate matter 2.5 or PM2.5, which refers to smaller airborne pollutants with diameters less than 2.5 micrometres that pose the greatest risk to health, rose as high as 993 micrograms a cubic metre on Saturday. The World Health Organisation recommends exposure to no more than 25 micrograms in 24 hours. The images from Beijing should give the public some pause for thought. No development or improvement in welfare comes without an environmental cost. Interactions and tradeoffs between a growing economy and the preservation of the natural environment are aplenty. These tradeoffs deserve – require, actually – serious thought and reasoned debate, lest Macau ends up in the paradoxical situation where economic development leads to a lower quality of life. I do not suggest a discussion of how to deal with the serious and damaging conditions prevailing in Beijing over the past few days. But our neighbour’s trials are a good reason to re-evaluate our city’s situation. As I write, haze again hangs over Macau. It is difficult to avoid the perception that the number of hazy days is increasing. Even if, in the Portugueselanguage weather forecasts, the meteorological office describes it as an almost romantic “dry mist”, the fact is this is a chemical-laden smog. Contrary to statements often heard in public forums, the main contributor to this state of affairs does not seem to be industry in Guangdong, rather it is emissions produced here and trapped by unfavourable atmospheric conditions.

Pressure mounts As industry is essentially vanishing from Macau, its contribution to air pollution is decreasing. It is a positive, albeit unintended, side-effect of the changing economic landscape. A major cause of emissions seems to be, inevitably, vehicles and it is here that a major rethink seems necessary. Several developments push up these emissions. There is an obvious increase in vehicle numbers across all categories. Not only are these figures rising continuously but a significant share of vehicles are always on the road, such as public buses and vehicles used by the travel industry and casinos. Increasing traffic congestion means many cars and mini-buses are operating for longer periods, at less than optimal functioning conditions. While some of these vehicles are fuel-efficient and equipped to limit emissions, the growth in vehicle numbers means emissions must increase. Controls imposed by inspection also appear to be inefficient, since there are clearly a number of non-compliant cars, even some government-owned ones, on the roads. Even if the light rail network is a success – and there are some grounds to question that assumption – the problem of vehicle emissions is not going away. Tourism and casino operators are not going to suddenly stop picking up customers as soon as they arrive here or walk their guests through railway stations. Traffic congestion is likely to worsen and the government appears reluctant to do anything to address the number of vehicles on the road or lower their emissions. Talk about transport that uses alternative energy, for which Macau would seem particularly suited, remains mostly that: talk. Air-quality monitoring, a subject itself worthy of examination, seems in need of a revamp. Awareness efforts concerning air-quality issues are minimal to say the least. The government commissions, or announces an intention to commission, many studies. Maybe it is time to carry out a proper evaluation of the impact of the economic boom on the quality of the air we breathe. This would create a muchneeded baseline for any serious and critical debate on transport policies, not to mention health and quality of life.

January 17, 2013 business daily | 3

MACAU Sales of gold and jewellery last year were similar to the 2011 figures, retailers say

New border talks next week in Beijing Chief Executive Fernando Chui Sai On will head to Bejing on Monday for discussions with mainland Chinese authorities over the new Zhuhai-Macau border crossing at Ilha Verde. During his three-day visit, Mr Chui will be accompanied by Secretary for Transport and Public Works Lau Si Io and Customs Service head Choi Lai Hang. The new border is seen as a major means to alleviate hectic passenger traffic across the Gongbei border, which was intensified by the recent opening of the Guangdong-Zhuhai railway.

Triple threat causes jewellers’ sales to fizzle Doubts over the global economy, the mainland’s leadership change and bank card restrictions have struck sales Tony Lai

The number of transactions remained strong, but there were just fewer big spenders Lei Chi Fong, president, Macau Goldsmith’s Guild

tony.lai@macaubusinessdaily.com

ncertainty in the global economy and restrictions on bank cards used by mainland consumers dampened growth in jewellery and gold sales last year, according to the Macau Goldsmith’s Guild. “We expected there would be a considerable growth in retail last year, just like in 2011, but the actual outcome did not quite match our expectations,” said the guild’s president Lei Chi Fong. “The figures are just similar to those in 2011.” Me Lei did not disclose exact figures to Business Daily. The Macau Goldsmith’s Guild is an association of more than 90 retailers here, including Hong Konglisted firms Chow Tai Fook Jewellery Co Ltd and Tse Sui Luen Jewellery

(International) Ltd. Mr Lei stressed that last year was still a good one for jewellers. “Consumer sentiment was quite good, with the number of transactions remaining strong, but there were fewer big spenders,” he said. Consumers who spend more than 1 million patacas (US$125,000) in one purchase were considered big spenders, said Mr Lei.

Politics watching Official data show watch and jewellery sales grew by one-third in the first three quarters of last year, to reach 11.7 billion patacas. “There are several reasons for the slowdown [in retail] like the doubts clouding the global economy and the efforts Beijing made towards macro-

After the gold rush Retail sales of gold have outstripped jewellery sales since the third round of monetary easing in the United States, with buyers seeking a hedge against inflation. “Before QE3, both jewellery and gold accounted for half of our sales but gold has a bigger presence, accounting for 70 to 80 percent of the total sales,” said Macau Goldsmith’s Guild president Lei Chi Fong. “Gold is gold. Everyone knows what it is and we do not need to introduce or promote it to buyers like jewellery. People have lost faith in currency and turned to gold.” The US Federal Reserve announced a new round of quantitative easing in monetary policy in

economic control,” he said. “We also suffered from restrictions imposed on the bank cards as the mainland had fewer channels to acquire money for purchase.” China UnionPay Co Ltd is believed to have restricted the amount mainlanders could put on their credit cards to 1 million yuan (1.27 million patacas) a day, down from up to 10 million yuan previously. UnionPay has made no public comment that confirms the restriction. A Deutsche Bank report last June said the restriction was in place. Hong Kong-listed Haitong International Securities Group Ltd contradicted Deutsche’s report, saying daily limits were lowered at several banks in 2011. A once-in-a-decade leadership transition in Beijing also affected sales, said Mr Lei, but the confirmation of

Xi Jinping as new chief of the Chinese Communist Party in November did not help sales accelerate. “There may have been a rebound in casinos but I do not see many differences in the street stores,” he said. “The constraints seen in the market caused by political factors will only be lifted after the end of two upcoming sessions in Beijing, when everything about the new changes have be finalised and become clearer.” The annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference are scheduled to be held in early March. While Mr Lei did not offer a sales forecast for next month’s Chinese New Year holidays, he is hoping for more positive results.

September and better defined its limits last month. Stimulus efforts by the world’s central banks helped the value of gold rise for a 12th straight year last year. Investors have sought physical assets as concerns mount that the central banks’ printing of cash will destabilise the value of paper currencies. The price of gold here is now about 17,000 patacas an ounce, about the same as 12 months ago, Mr Lei said. “QE3 did spur the price for a while but there are always many fluctuations in the gold market,” he said. The London gold price closed at around 1,047 pounds (13,416 patacas) a troy ounce (31.1 grams) on Tuesday, down 2.4 percent from the same time last year. T.L./Reuters

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business daily January 17 2013

macau Sands China to consider interim dividend Sands China Ltd is to discuss an interim dividend for shareholders at a board meeting on January 25, the firm told the Hong Kong Stock Exchange. Sheldon Adelson, chairman and chief executive of Sands’ parent company Las Vegas Sands Corp. said during an earnings conference call with analysts on November 1: “We have every intention of increasing the dividend in the years ahead as our business and cash flows continue to grow.” The first-ever Sands China dividend – for the fourth quarter of 2011 and announced on January 31 2012 – was for HK$0.58 (US$0.075) per share.

VIP share of gaming gross falls significantly in 2012 DICJ figures leave analysts wondering if long-awaited age of mass-market dominance has finally arrived

since 4Q09), which we think should be sustained through 2013 and beyond, the revenue mix shift should continue,” says Union Gaming Research Macau in a note to clients. Growth in mass gaming revenue – including slot machines – accelerated in the fourth quarter – it went up by 28.4 percent year-on-year, an increase of 1.6 percentage points over the previous three months.

Win rates

Michael Grimes

michael.grimes@macaubusinessdaily.com

69%

VIP revenue as percentage of all 2012 casino gambling

‘Lao bai xing’ – age of the common people in Macau gaming?

he percentage of Macau’s total gaming revenue coming from VIP baccarat fell in the fourth quarter 2012, figures released by the Gaming Inspection and Coordination Bureau reveal. VIP gambling also returned to year–on-year growth in the fourth quarter after contracting year-onyear in the third, show official data released yesterday. Macau’s casino VIP gross gaming revenue rose 2.9 percent in the fourth

quarter of last year in comparison with the equivalent quarter a year earlier. The city’s casinos reported 54.8 billion patacas (US$6.9 billion) in VIP gross gaming revenue in the three months to December 31. For only the second time in the past 12 quarters, VIP revenue accounted for fewer than 70 percent of total market-wide gross gaming revenue, notching 68 percent of the aggregate casino revenue. The previous sub70 percent for VIP was in the third

quarter last year, meaning for the whole year high roller baccarat was 69 percent of the gross, compared to 73 percent in 2011. It’s led some analysts to wonder if it’s the start of a trend, although they note that fluctuations in house win rates can have some modest influence on VIP GGR numbers. “As the combined high-margin business of mass market tables and slots continues to grow well into the double digits (27 percent or better

Mass and VIP combined generated 80.8 billion patacas in the final quarter last year – up 9.9 percent year-on-year. For the full year, revenue reached 304.1 billion patacas, 13.5 percent more than in 2011, in line with analysts’ recent expectations. Calculation of ‘normal’ house win rates for baccarat has been the subject of much debate in the industry. The number matters because it’s the base line against which operators measure their revenue performance in Macau, where the game is overwhelmingly the pursuit of choice for Chinese players. In 2012, 91 percent of all the revenue from casino games came from VIP and mass-market baccarat combined. Commenting on the December revenue numbers last week, Kenneth Fong of J.P. Morgan in Hong Kong said: “Win rate was 3.38 percent, higher than the historical average of 3.1 percent and last year’s 3.18 percent. Adjusted for luck, we estimate that December revenue could have seen growth of 15 percent.” Union Gaming estimates total revenue growth for the whole of 2013 could be approximately 16 percent year-on-year – about 200 basis points better than 2012. The research house cites growth in mass-market table and slots revenue of approximately 30 percent as a catalyst. Karen Tang of Deutsche Bank in Hong Kong is slightly less bullish on mass-market growth for 2013. In a January 3 report she estimated expansion of 25 percent in that segment during this year, suggesting the market was likely to grow 11 percent in gross revenue terms during 2013.

January 17, 2013 business daily | 5

MACAU

Okada must face Wynn Resorts’ ‘disloyalty’ lawsuit Casino operator sued Japanese billionaire in February 2012

azuo Okada has lost a bid to dismiss a lawsuit by Wynn Resorts Ltd, the casino operator that seeks to oust the Japanese billionaire as a director. The company forcibly redeemed his 20 percent stake in the company last year. It has also called a shareholders’ meeting for February 22 with the aim of dismissing him from the board. Clark County District Judge Elizabeth Gonzalez, at a hearing on Tuesday, United States’ time in Las Vegas, denied Mr Okada’s request to dismiss a Wynn Resorts’ claim that he breached his duty as a corporate director. Wynn Resorts says he knowingly broke U.S. antibribery laws and put his own interest in developing a casino resort in the Philippines above that of the company. Wynn Resorts sued Mr Okada in February. At the same time the board voted to redeem his shares and the Wynn Macau Ltd directors decided to oust him from the latter’s board.

Wynn Resorts alleges that Mr Okada and his associates made payments to Philippine gaming officials that could threaten the Wynn Resorts’ licences to operate casinos. Mr Okada’s side argued the licences were never in jeopardy and that the claim was merely a pretext for ousting him because he was asking awkward questions about how the company was run. They included challenging why 1.1 billion patacas (US$137 million) was pledged by Wynn Resorts (Macau) SA in 2011 to the University of Macau – to be paid over a ten year period. Mr Okada “strongly” believed that he was allowed to provide gifts when doing business and that what he did was lawful, one of his lawyers, Charles McCrea, said at Tuesday’s hearing. “Unlawful activity means something against the law,” Mr McCrea said. The Wynn Resorts’ “code of ethics is not a law. It is not a statute.” M.G. with Bloomberg News

Kazuo Okada

Pagcor boss distances himself from pachinko tycoon Says ‘open’ to any FBI inquiry into the Japanese entrepreneur seeking a Philippines casino

he head of the Philippines’ gaming regulator appeared this week to distance himself from the Japanese entrepreneur Kazuo Okada. The pachinko billionaire has previously been courted by the Philippine Amusement and Gaming Corporation as a strategic business partner. He wants to build a US$2.3 billion casino resort complex at Manila Bay with local Filipino-Chinese entrepreneur John Gokongwei to help investors – and the country – to capture more of the growing wealth in the region. But the project has become mired in controversy. It includes allegations from Mr Okada’s former Macau and Las Vegas business partner Steve Wynn that he acted improperly and rendered himself “unsuitable” to be a Wynn investor when he entertained Cristino Naguiat – current chairman of PAGCOR – and other officials, at Wynn Macau. Mr Okada strongly denies wrongdoing. On Tuesday Mr Naguiat told the media in Manila that Mr Okada

faces a U.S. Federal Bureau of Investigation probe, in addition to a Philippines Department of Justice inquiry into how he got a casino permit. “We were informed of the FBI investigation and we are always open to agencies that would like to investigate,” Mr Naguiat said referring to Mr Okada. In February Mr Naguiat told Philippine lawmakers the Wynn Resorts Ltd allegations were “besmirching our reputation as a country and as a people”. At that time lawmakers voted to bar Mr Wynn and his companies from investing in the Philippines casino sector. Mr Okada’s casino licence was granted in August 2008 under the leadership of the previous Pagcor chairman Efraim Genuino. Last September the Philippines DoJ recommended the prosecution of Mr Genuino for 175 counts of malversation of public funds and 174 counts of violation of the AntiGraft and Corrupt Practices Act. M.G. with Bloomberg

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business daily January 17 2013

macau

Record hike for tourist prices But 2012 inflation for tourist items likely lower than overall inflation – for first time in seven years Vítor Quintã

vitorquinta@macaubusinessdaily.com

Arrival of winter season clothing in shops helped push up tourist prices

isitors paid more than ever before for goods and services in Macau last quarter – mostly due to a jump in hotel room rates. According to data released by the Statistics and Census Service yesterday, the tourist price index rose by 11 percent quarter-to-quarter. It is the highest increase since the statistics bureau began publishing the tourist price index in 2000 and took the index to a historic record of 133.8 points. The biggest hike was in the

prices of handbags, which soared by almost a third. But accommodation – which is the biggest single expense made by most visitors – was the main reason for the index growth, with hotel and guesthouse rates rising overall by 31.9 percent. Room rates increased notably during the National Day holidays, the Macau Grand Prix, Christmas break and New Year’s Eve, the statistics bureau wrote. According to data from the Macau

Hotel Association, room rates rose by 12.6 percent between September and October to reach 1,558 patacas (US$195) before falling to 1,400 patacas in November. The association’s data for December have not yet been published. But the government’s price index of hotel rooms decreased by two percent year-on-year in the last quarter, the data from the statistics bureau show. Nonetheless, the overall tourist price index increased by 4.5 percent

year-on-year reportedly because the new arrival of winter clothing pushed the prices of clothing and footwear up by 16.5 percent. Other factors were rising charges for restaurant services, which jumped by 6.1 percent, and higher fees for cross-border transport (up by 7.2 percent) and entertainment (up by 9.9 percent). The average tourist price index for the whole of 2012 hit 124.3 points, up by 6.05 percent from the previous year – and a huge slowdown from the 15.46 percent growth posted in 2011. In fact, tourist price rises last year could be lower than those experienced by Macau consumers. The first time that’s happened since 2005. Consumer price index inflation was 6.13 percent for the first 11 months of 2012. The December index won’t be published until next week. Macau-based economist Albano Martins predicted in November that the 2012 inflation would be “anywhere between 5.89 percent and 6.1 percent … but it will be likelier closer to the lower end”.

31.9%

Quarter-to-quarter increase in Macau hotel room rates

Bus operators accept service evaluation: DSAT Public bus companies agreed with link between charge hikes and service evaluation, authorities say Stephanie Lai

sw.lai@macaubusinessdaily.com

full evaluation system on bus operators’ service quality should be put in practice by the second half of this year, with the companies’ blessing, the Transport Bureau (DSAT) said. Depending on the outcome, it could lead to the public bus companies getting the increase in operating subsidies they have been seeking from the government since last year. “Basically the three companies have agreed with the bus fares adjustment pegged with the service evaluation,” a bureau spokesperson said. “But both the government and the companies are still discussing how the peg is going to work out in real terms,” she told Business Daily. The evaluation system will mainly look at bus frequency, safety standards and service quality. Assessments will be led by the Transport Bureau, with input from an advisory body – the Traffic

Services Committee – and from residents’ representatives. The public bus operators – Reolian Public Transport Co; Sociedade de Transportes Colectivos de Macau (TCM) and Transportes Urbanos de Macau SARL (Transmac) – can request a hearing if they disagree with the evaluation results. Cedric Rigaud, Reolian’s general manager, told Business Daily that the company welcomes the introduction of service evaluation. “Reolian has a positive attitude toward the introduction of the system to further improve public transport services,” said Mr Rigaud “Any scheme, as long as it respects the basic rule of transparency and impartiality, will help Reolian to improve the company’s image.” Based on the evaluation results, the Transport Bureau will consider whether to approve the 23.3 percent

Service charge increase approved last June but quickly suspended (Photo: Manuel Cardoso)

hike in the service charge requested by the three operators last year, director Wong Wan told media on Tuesday. But the bureau is still unable to specify a time frame for the bus fares adjustment. “They have to meet two prerequisites for a charge hike: one is to have made improvements in their service,” said Mr Wong. “The second is to agree to introduce the bus service evaluation system.” The bureau is going to amend the contracts with the three operators in

order to introduce the service quality to the service charge adjustment mechanism, Mr Wan noted. The government has allocated 680 million patacas (US$85 million) for paying the three companies in 2013, while some 190 million patacas – a further 28 percent – were reserved for a possible charge adjustment. The service charge increase was proposed due to higher fuel and wage costs and approved in June. But the hike was quickly suspended after public criticism of bus service quality.

January 17, 2013 business daily | 7

MACAU

More time for firms to get ready for food safety law Draft also gives all supervision powers to the Civic and Municipal Affairs Bureau Tony Lai

tony.lai@macaubusinessdaily.com

he food and beverage sector is happier with the latest version of the draft bill on food safety, which gives them more time to prepare for the new rules and a clearer idea on who is in charge, legislators said. The Legislative Assembly’s second standing committee held a closeddoor meeting yesterday on the latest version of the bill submitted by the government last week. Chan Chak Mo, who chairs the committee, told reporters that the law now would only be enacted 180 days after it was published in the Official Gazette, instead of the 60 days stated in the original draft. “The industry wanted to have more time before the law comes into force so that [the administration] can have more promotion [activities] and the industry can be better prepared,” said Mr Chan. For instance, the bill requires the industry to keep all the receipts for imports and exports of food products, something that currently is not mandatory. The industry feels “the bill is

clearer” and will cooperate with the government on the new law, said Mr Chan, who is also the president of the United Association of Food and Beverages. “The industry also wants, of course, the administration to be more lenient at first – giving warnings instead of penalties,” he added. The draft now clearly states that all the power related to food safety supervision will belong to the Civic and Municipal Affairs Bureau, said the legislator. All other government departments, like the Macau Government Tourist Office and the Economic Services Bureau, must immediately report to that bureau if they discover food safety issues during their inspections on restaurants or food manufacturers. Mr Chan said the bureau has already started working on improving its communication with other public bodies to ensure a smoother transition. “Theoretically it will be better for a single public body to handle all these issues,” he added. The assembly will now discuss with the administration whether

A new bill will give a future food safety centre the power to supervise restaurants and manufacturers

the food safety standards should be introduced as a bylaw or a chief executive dispatch. They would also work on the

Portuguese-language version of the bill, which the assembly’s legal advisors described as “poor”, Mr Chan said.

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business daily January 17 2013

GREATER CHINA Man Utd signs deal with Wahaha Hangzhou Wahaha Group Co., the beverage maker owned by China’s richest man, signed a sponsorship deal with 19-time English soccer champion Manchester United Plc to draw sports fans to its energy drink. The three-year agreement will help Wahaha promote its Qili drink in China, the company said in a statement yesterday. The club separately announced a threeyear sponsorship agreement with China Construction Bank Corp, giving the nation’s second-largest lender sole rights to issue Manchester Unitedbranded credit cards in the country.

Fighting pollution ‘will take time’: Li Li Keqiang, set to become China’s next premier, called for the nation’s citizens to have patience as authorities work to reduce pollution in the world’s secondbiggest economy. “Production, construction, consumption cannot come at the price of hurting the environment,” Mr Li said in comments broadcast by state radio. “The current situation wasn’t created in one or two days, it accumulated over a long time. Solving this problem will also take time,” he added. Record levels of pollution in Beijing increased the number of patients visiting hospitals with heart and respiratory ailments and prompted calls for action in state media.

Trade growth to follow GDP: official China said yesterday that it expects foreign trade to grow at a similar pace to the economy this year, indicating a feeble pickup from 2012. “Our target this year is ... to try to keep foreign trade increasing at a rate that is roughly in accordance with GDP growth,” Shen Danyang, spokesman of the Ministry of Commerce, told reporters at a regular briefing without giving a specific figure. China had declared it wanted to see trade grow by 10 percent in 2012, but last week announced expansion of 6.2 percent for the period, missing the target.

Beijing defends export data China’s customs administration said every dollar of trade is documented, defending the quality of export data that analysts at UBS AG and ANZ Banking Group Ltd said may fail to capture the true picture. “Customs import and export statistics are based upon actual customs declarations,” the General Administration of Customs told Bloomberg in an e-mailed statement. “In our published export and import data, every dollar has a corresponding customs declaration document to back it.” China’s unexpected 14.1 percent export gain in December from a year earlier spurred scepticism from analysts, which cited discrepancies with other nations’ trade data.

HK boosts land supply to cool property market Chief executive unveils plans to ease housing shortage Chief Executive Leung Chun Ying

ong Kong will build a land reserve and speed up publichousing construction, Chief Executive Leung Chun Ying said yesterday, as the city seeks to tame record high property prices that have led to concerns of a housing bubble. Hong Kong, the most expensive city in the world to buy a home, will maintain property curbs for overseas buyers, Mr Leung said in his first policy address since taking office last July. The supply of housing in the next five years will exceed the previous period by at least 18 percent,

according to figures compiled from his speech. Hundreds of protesters yesterday surrounded the legislature as Mr Leung spoke, some demanding he resign and take stronger measures to make housing prices affordable again. The measures announced yesterday, which also included free kindergarten education and pollution-control efforts, must be made as leaders “grasp the nettle” and address the city’s “deep-rooted” problems, Mr Leung said. Battling record-low approval ratings, he is

looking to refocus attention on his policy initiatives after defeating two opposition bids to oust him in recent weeks. “He’s got some real challenges,” Michael Degolyer, a political scientist at the Hong Kong Baptist University, told Bloomberg Television before Mr Leung spoke. “He’s starting off way behind the eight ball. At the same time there’s a lot of people who’re holding off to see if he’s actually going to perform.” Mr Leung’s popularity has continued to drop in the months

China 2012 FDI suffers first annual fa

Investment into the services sector trumped that of the manufactur Aileen Wang and Koh Gui Qing

hina’s foreign direct investment inflows fell last year for the first time since the global financial crisis, slipping 4 percent as a troubled world economy curbed investor enthusiasm for deals in emerging markets. But China still drew US$111.7 billion worth of foreign direct investment (FDI) in 2012 – just shy of 2011’s record US$116 billion and retaining its spot as one of the world’s top destinations for corporate expansion. FDI is an important gauge of the global economy to which China’s vast factory sector is oriented, though it is a small contributor to China’s overall capital flows compared with exports, worth about US$2 trillion in 2012. Analysts said China’s cooling FDI growth does not suggest investor confidence in the country is waning. Rather, it shows China needs another catalyst to drive inflows after the boost from joining the World Trade Organisation hit a natural plateau. “We will see FDI bouncing around US$110 billion to US$120 billion for some years,” said Tim Condon, an economist with ING Financial

Markets in Singapore. “Hopefully, the current administration is going to intensify reform efforts such as opening of the capital account. That could be momentous in terms of attracting more FDI.” A new government led by incoming President Xi Jinping is set to take over from March and investors are hoping Beijing will pursue delayed reforms, including relaxing capital account controls, to drive China into the next stage of growth. Data tomorrow is expected to show China’s annual economic

growth rebounded to 7.8 percent in the fourth-quarter of 2012 from 7.4 percent in the third – the weakest pace of expansion since the depths of the financial crisis in early 2009. In December, FDI into China fell 4.5 percent on the year to US$11.7 billion, the Commerce Ministry said at a briefing yesterday. China joined the World Trade Organisation in November 2001 and FDI inflows have more than doubled since. OECD data shows China rivals the United States to be the world’s top FDI destination, with the United States pulling ahead of China by a slim margin in 2011.

Property drag

US$111.7 billion

Foreign direct investment in China last year

Beijing has said it wants to attract US$120 billion worth of FDI each year between 2012 and 2015, though it missed its target last year and did not comment on the FDI outlook yesterday. Shen Danyang, a spokesman from the Commerce Ministry, acknowledged that China has to try harder to woo foreign investors, without elaborating. But he stressed foreign funds were

January 17, 2013 business daily | 9

GREATER CHINA KEY POINTS Housing problem ‘a priority’, land supply increased HK$10 bln in subsidies to curb road-side pollution High real estate prices hurting city’s competitiveness – Leung

since he took office July 1, according to survey data from the University of Hong Kong’s Public Opinion Programme. His approval rating is 31 percent, the lowest since he took office, it said. The city’s home prices have doubled over the past four years, surpassing their 1997 peak, and Hong Kong is now the most expensive place to buy an apartment, according to property broker Savills Plc.

New units An 800-square-foot apartment in the middle-class Taikoo Shing neighbourhood sold for HK$8.88 million (US$1.15 million) on January 10, according to data from the Centaline Property Agency. “The Hong Kong property prices are pushing into bubble territory which can cause trouble later down the track,” said Nader Naeimi, Sydneybased head of dynamic asset allocation at AMP Capital Investors Ltd. “The Chinese are getting very sensitive to big rises in property prices because its not a healthy development.” The government will provide land to build 75,000 public homes in the next five years, and the private sector

all in 3 years

ring industry

not leaving in a big way. “It is true that some manufacturing companies are moving out of China,” Mr Shen told reporters. “But one point I want to remind you is that, so far, there is no big-scale pull-out of foreign investment.” Data showed European and Asian firms cut their Chinese investment by the widest margin, even though Asia remained by far China’s biggest foreign investor. Inflows from the crisis-stricken European Union dropped 3.8 percent

may sell 67,000 in the next three to four years, Mr Leung said. The total of 142,000 compares with the 124,000 built in the previous five years, based on figures he provided. “Land shortage has seriously stifled our social and economic development and smothered many opportunities for people to start and expand their businesses,” Mr Leung said, noting that some 200,000 people were now on waiting lists for public housing. “As long as the housing shortage persists, we have no alternative but to restrict external demand and curb speculative activities,” he added in a two-hour speech that laid out his long-term blueprint for the remainder of his five-year term. The government will also target building 100,000 public housing units in the five years from 2018, and 17,000 subsidised housing in the four years from 2016, he said. ‘‘We must have the courage and resolve to make hard choices and decisions with the overall interest of the community in mind,’’ Mr Leung said. ‘‘The fact is that the community will never reach a full consensus over such issues. In fact, we cannot afford to, and should not, wait for a full consensus.’’

Diesel vehicles Mr Leung said he would seek to provide free kindergarten education and must make Hong Kong a more liveable city with ‘‘lush countryside, fresh air and a clean environment”. Poor air quality has made Hong Kong the world’s most polluted financial centre and is responsible for more than 3,000 premature deaths a year in the city. The government also plans to set a service-life limit of 15 years for newly registered diesel commercial vehicles as part of a HK$10 billion plan to phase out such vehicles, the chief executive said. Bloomberg News/Reuters

in 2012 from a year ago to US$6.1 billion, while FDI from the top 10 Asian economies – including Hong Kong, Japan and Singapore – fell 4.8 percent last year to US$95.7 billion. That contrasted with investment from the United States, which rose 4.5 percent on the year to US$3.1 billion. For the second consecutive year, FDI into the services sector trumped that of the manufacturing industry, where a global export slump has dented inflows. Data showed FDI into the services industry fell 2.6 percent to US$53.8 billion, while manufacturing inflows dropped 6.2 percent on the year to US$48.9 billion. Excluding investment in the property sector, however, FDI into the services sector rose 4.8 percent in 2012 from 2011. Investment in the property sector had declined 10.3 percent on the year, as Beijing’s three-year crackdown on housing speculation took a toll on sentiment. Reuters

Investment in the property sector dropped by 10.3 percent in 2012

ICBC plans to raise US$9.7 bln in capital

ndustrial & Commercial Bank of China Ltd, the world’s largest lender by market value, plans to raise as much as 60 billion yuan (US$9.7 billion) from selling debt to comply with new capital requirements. The board approved a plan to sell so-called Tier-2 securities with a maturity of at least five years by the end of 2014, Beijing-based ICBC said in a statement to the Hong Kong exchange yesterday. The debt will include conditions for a forced writedown on the principal, it said. China’s banking regulator, which has delayed and relaxed rules for bolstering its financial stability as economic growth slowed for seven straight quarters, said last month it will require lenders to use new types of debt and equity to raise capital. Regulators globally meanwhile are loosening reserve rules and other

measures to avoid choking off interbank lending. “ICBC is going to be a bellwether in setting the standards for new fundraising tools so that smaller banks can follow,” said Sheng Nan, a Hong Kong-based analyst at CCB International Holding Ltd, who rates the stock as outperform. “The bank’s current capital level is adequate to support its loan growth for the next two years.” The government-controlled lender had a core capital adequacy ratio of 10.51 percent and a total ratio of 13.61 percent at the end of September, both of which exceed the required levels. ICBC has raised 45 billion yuan from a rights offer and sold 170 billion yuan of subordinated bonds over the past four years to boost capital as a two-year credit binge that started in 2009 strained its reserves. Bloomberg News

Stocks pull back from seven-month high

hina’s stocks fell, led by property developers and brokerages, as valuations at a seven-month high raised concern a six-week share rally was excessive. Poly Real Estate Group Co. and Gemdale Corp. lost more than 3 percent on concern the government will introduce real-estate taxes nationwide. Liquor maker Kweichow Moutai Co. retreated 2.3 percent after cancelling a policy punishing retailers for cutting prices. The CSI300 of the top Shanghai and Shenzhen A-shares closed down 0.7 percent at 2,577.1 points. The Shanghai Composite Index also shed 0.7 percent. Both fell off their highest levels since early June. “There’s no major negative news and it’s just some profit-taking,” says Tang Yonggang, an analyst at Hongyuan Securities Co. in Beijing. “Financial stocks were the first to advance in the upcycle, so they are leading the decline now. We have

already gotten out of the long-term downward trend, so the fall today is only temporary. People are used to taking profits whenever they see some gains.” A gauge of property stocks in the Shanghai index slid 2.4 percent, the most among the five industry groups. Poly Real Estate, the secondbiggest developer, lost 3.6 percent to 13.55 yuan (US$2.2). Gemdale slumped 3.7 percent to 6.74 yuan. The property measure is the biggest gainer among the groups over the past year, surging 37 percent. China should “gradually” establish a property taxation system that covers trading and ownership, Premier Wen Jiabao said on Tuesday. “We still believe that the property tax is the policy most likely to be launched in 2013,” Haitong Securities Co. analysts wrote in a report yesterday, referring to an expansion to the property tax trials. Reuters

10 |

business daily January 17 2013

ASIA Vietnam sees 2012 trade surplus Vietnam recorded a trade surplus of US$780 million in 2012, its first since 1993, Vietnam’s customs said yesterday, mainly reflecting eroding imports amid a slowing domestic economy. The country’s exports rose by 18.2 percent to US$114.6 billion in 2012 from 2011, while imports increased by 6.6 percent to US$113.8 billion, the Finance Ministry’s customs department said in a report. The government is aiming to keep the annual trade deficit at 8 percent of the export revenues this year, which is equivalent to a deficit of US$10 billion for the year, according to state media.

India needs greater financial supervision: IMF Government too exposed to losses at banks

ndia needs to improve its financial system supervision and crisis preparedness while at the same time liberalising some sectors to reduce distortions and risks created by heavy state involvement in banking, the International Monetary Fund said yesterday. The IMF’s Financial System Stability Assessment Update said India had improved its supervision and regulations in the 20 years since it started liberalising its economy and that its financial system fared well in the global financial crisis. “Despite these recent successes, India’s financial sector still confronts longstanding impediments to its ability to support growth as well as new challenges to stability,” said the 116-page study. India’s financial system has been made vulnerable by a deterioration in bank assets and a lack of capital as the economy slowed, according to the IMF. “The main near-term risks to the financial system are a worsening of bank asset quality and renewed pressures on systemic liquidity,” the

Washington-based lender said in the statement. Stress tests have shown the risks are “manageable” for now, it added. But the large role of the state – which owns big financial institutions, directs credit to priority sectors, and controls the range of permitted activities and the availability of foreign capital – “contributes to a build-up of fiscal contingent liabilities and creates a risk of capital misallocation that may constrain economic growth,” it said. The financial sector’s capacity to support sustainable economic growth would be boosted by “gradually reducing mandatory holdings of government securities by financial institutions, and allowing greater access to private – domestic and foreign – sources of capital,” the IMF suggested. India should also allow “more room for private initiative and competition” in micro finance and other efforts to reach poor borrowers who are under served by existing financial institutions, the study said. One problem the study noted in particular was an inherent risk of the

KEY POINTS India financial system fared well in global crisis Complex, growing sector needs more oversight and competition Indian state’s large role in financial sector builds up risks

Reserve Bank of India, India’s central bank, facing “conflicting goals,” because some RBI officers are directors on the boards of public banks that are also supervised by the RBI. “Using the banking system rather than government programmes in meeting the needs of priority sectors – agriculture, small and micro credit, education, health – and underserved

areas may conflict with RBI’s supervisory role,” the Fund added. RBI, in its supervisory role, would benefit from more attention to crisis preparedness, and stronger resolution powers and contingency planning for the insurance sector and the payment system, it said. Despite an oversight regime that largely met international standards, “a common issue across the sectors is the lack of de jure independence, which

Japanese emergency hits Dreamliners ANA flight makes emergency landing at Takamatsu

apan’s two leading airlines grounded their fleets of Boeing 787s yesterday after one of the Dreamliner passenger jets made an emergency landing, the latest and most serious in a series of incidents to heighten safety concerns over a plane many see as the future of commercial aviation. All Nippon Airways Co said instruments aboard a domestic flight indicated a battery error, triggering emergency warnings to the pilots. It said the battery in the forward cargo hold was the same lithium-ion type as one involved in a fire on another Dreamliner at a U.S. airport last week. The carrier grounded all 17 of its 787s, and Japan Airlines Co suspended its 787 flights scheduled for yesterday. ANA said its planes will still be grounded today while checks are completed. The two carriers operate around half of the 50 Dreamliners delivered by Boeing to date. Yesterday’s incident, described by a transport ministry official as “highly serious” – language used

in international safety circles as indicating there could have been an accident – is the latest in a line of mishaps – fuel leaks, a battery fire, wiring problem, brake computer glitch and cracked cockpit window – to hit the world’s first mainly carboncomposite airliner in recent days.

Under review “I think you’re nearing the tipping point where they need to regard this as a serious crisis,” said Richard Aboulafia, a senior analyst with the Teal Group in Fairfax, Virginia. “This is going to change people’s perception of the aircraft if they don’t act quickly.” “This is the worst new aircraft development programme Boeing has experienced, when you look back at these troubles and all the delays,” he added. The 787, which has a list price of US$207 million, represents a leap in the way planes are designed and built, but the project has been plagued by

cost overruns and years of delays. Some have suggested Boeing’s rush to get planes built after those delays resulted in the recent problems, a charge the company strenuously denies. Both the U.S. Federal Aviation Administration (FAA) and the National Transportation Safety Board (NTSB) said they were monitoring the latest incident as part of a comprehensive review of the Dreamliner announced late last week. In Asia, only the Japanese airlines and Air India have the Dreamliner in service, but other airlines are among those globally to have ordered around 850 of the new aircraft. Australia’s Qantas Airways Ltd said its order for 15 Dreamliners remained on track, with its Jetstar subsidiary due to take delivery of the first of the aircraft in the second half of this year. India’s aviation regulator said it was reviewing the Dreamliner’s safety and would talk to parts makers, but had no plans to ground the six planes operated by state-owned Air India.

“We are not having any problem with our Dreamliners. The problems we had earlier were fixed,” Arun Mishra, Director General of Civil Aviation, told Reuters. United Airlines, the only U.S. carrier currently flying the 787, said

January 17, 2013 business daily | 11

ASIA Singapore watchdog calls for F&N auction Singapore’s stock market watchdog has called for an auction to resolve a protracted takeover battle between Indonesian and Thai tycoons for local conglomerate Fraser and Neave Ltd (F&N). The Securities Industry Council (SIC) said in a statement that investors needed certainty and gave both contenders until Sunday to make fresh offers for F&N, a beverage, property and publishing group. If a stalemate remains, a daily bidding process will start on Monday until one party gives up. F&N became a takeover target in September after selling off its most prized asset, Tiger Beer maker Asia Pacific Breweries, to Dutch giant Heineken.

Japan’s growth hurt by row with China Economy appears to be contracting, says World Bank

J India’s banks vulnerable as slowdown cuts capital

can be rendered more challenging by the intricate relationship with stateowned supervised entities and their business decisions,” the IMF noted. The study is based on data and conditions as of February 2012, the Fund said. Such periodic studies are mandatory assessments of countries’ financial systems to ensure they’re in compliance with international standards. Reuters

apan’s economy contracted in the second half of 2012 and is on track for lacklustre growth of 0.8 percent this year, hurt in part by a territorial row with China, the World Bank said in a report yesterday. Relations between China and Japan, the world’s biggest economies after the United States, have deteriorated sharply since September, when the Japanese government purchased islands that China claims in the East China Sea. The value of Japanese exports to China fell by 17 percent between June and November of last year, contributing to a 3.5 percent annualised drop in Japan’s growth in the third quarter. The World Bank said the end of government tax incentives to purchase fuel-efficient automobiles also hurt the economy, as well as the fading boost to growth from reconstruction spending in the aftermath of the 2011 earthquake and nuclear disaster. “In Japan, the economy appears

to be contracting – in part because of political tension with China over the sovereignty of islands in the region,” it said in its twice-yearly Global Economic Prospects report. Revised GDP figures released by Japan in December showed the Japanese economy contracted in

both the second and third quarters, and analysts expect it shrank further in the final three months of the year, as does the World Bank. The Washington-based global development lender said its forecast for 2013 assumed an improvement in Tokyo’s relations with China. Assuming that, Japan would be on track to achieve growth rates of 1.2 percent in 2014 and 1.5 percent in 2015. While it warned that weakness in Japan could pinch global trade, given that Japan is the world’s fourth-largest importer, it said a resolution of Sino-Japanese tensions could help speed a return to growth in Japan and boost the global recovery. Reuters

Value of exports to China fell by 17 percent in six months

Policy rate convenient, says Thai c.bank chief Inflation, credit growth not a concern – Prasarn

ANA and JAL ground all 787 planes for inspection

it was not taking any immediate action in response to the latest incident. “We are looking at what is happening with ANA and we will have more information tomorrow,” a spokeswoman said. Reuters

trong credit growth in Thailand is not a big concern at the moment and inflation pressures are not high despite a big increase in the minimum wage, the central bank chief said. Bank of Thailand Governor Prasarn Trairatvorakul, who also said exports could pick up in the second half, told Reuters that current monetary policy settings, while “accommodative”, were still appropriate for the economy. He said credit growth of 15 percent in the banking sector last year might look high in normal circumstances but in part it reflected a pick-up in investment after Thailand’s devastating flooding in 2011. “It’s not a system-wide concern yet,” he said in an interview, adding that at this stage there was no need to “use interest rates to curb this phenomenon”. He said corporate lending grew 12 percent last year but growth in some consumer credit sectors jumped more than 30 percent.

Bank of Thailand Governor Prasarn Trairatvorakul

That was attributable in part to government stimulus policies, but the central bank had also expressed concern to banks about high growth in unsecured loans to lower-income borrowers and had persuaded them to rein these back. Mr Prasarn was relaxed about the impact of wage increases on inflation, saying price transmission into the broader economy should be limited because of competition, while fuel and commodity prices

were not expected to surge because of sluggish global demand. A nationwide daily minimum wage of 300 baht (US$10) came into effect on January 1. Wages rose by 35 percent in some provinces on top of a nationwide increase of 40 percent last April. Mr Prasarn said the transmission of last year’s wage rise to prices was not very strong and in 2013 it should be the same. “This year, competition conditions make transmission difficult still... The MPC [Monetary Policy Committee] still feels that the pressure on the inflation front is not much, not that serious,” he said. “Since the inflation front is not a threat at the moment, the present [benchmark interest] rate at 2.75 percent can be considered quite accommodative but we think it is quite appropriate at the moment to make sure that the momentum is carried forward on economic activities and so on.” Reuters

12 |

business daily January 17 2013

MARKETS Hang SENG INDEX NAME

NAME

PRICE

DAY %

VOLUME

30.2

-0.8210181

28815113

CHINA UNICOM HON

0.2506266

32468054

CITIC PACIFIC

BANK OF CHINA-H

3.67

-1.078167

217055902

BANK OF COMMUN-H

6.23

-1.267829

35531685

BANK EAST ASIA

31.3

0.6430868

2775355

17.44

0.9259259

18186639

25.8

-0.3861004

13664460

CATHAY PAC AIR

15.02

0.6702413

CHEUNG KONG

AIA GROUP LTD ALUMINUM CORP-H

BELLE INTERNATIO BOC HONG KONG HO

PRICE

DAY %

19970426

NAME POWER ASSETS HOL

65.45

-0.3046458

VOLUME 2122201

-1.065449

11414530

SANDS CHINA LTD

36.15

0.1385042

8215191

SINO LAND CO

15.16

0.9320905

5765878

125

1.378751

5673623

0.4587156

1377561 7307147

64.9

-0.3837299

3865427

-0.7407407

54388635

COSCO PAC LTD

12.22

2.173913

8358347

SWIRE PACIFIC-A

98.55

ESPRIT HLDGS

10.88

-0.1834862

8311516

TENCENT HOLDINGS

267.2

3.48567

HANG LUNG PROPER

30.35

-1.461039

5163364

TINGYI HLDG CO

21.2

0.952381

4572657

2964630

HANG SENG BK

118.8

-0.1680672

1250708

WANT WANT CHINA

10.34

1.771654

12943121

HENDERSON LAND D

58.8

0.4269855

3431786

WHARF HLDG

64.85

0.9338521

4278055

73.55

-1.539491

2255671

1.879405

6474578

8.68

-1.251422

23838836

CHINA CONST BA-H

6.53

-0.1529052

211429311

CHINA LIFE INS-H

26.7

-0.9276438

23442925

CHINA MERCHANT

26.1

-0.5714286

4386762

HENGAN INTL HONG KG CHINA GS

21.25

0.4728132

8265154

HONG KONG EXCHNG

149.9

0.6715917

5922049

HSBC HLDGS PLC

84.15

0.3577818

15573279

84.25

-0.5312869

3988360

5.82

-0.6825939

220966469

11.72

0.3424658

76439981

31.4

-0.1589825

2997351

87.55

-1.51856

32019513

HUTCHISON WHAMPO

CHINA OVERSEAS

24.8

-0.8

11679273

IND & COMM BK-H

CHINA PETROLEU-H

9.03

-1.633987

72933837

LI & FUNG LTD

CHINA RES ENTERP

VOLUME

-0.1545595

16.08

130.1

CHINA MOBILE

DAY %

12.92

CNOOC LTD

CHINA COAL ENE-H

CLP HLDGS LTD

PRICE

-0.9174312

3249700

CHINA RES LAND

22.95

-0.8639309

5975743

NEW WORLD DEV

14.14

0.2836879

17787760

CHINA RES POWER

19.02

-2.860061

7519404

PETROCHINA CO-H

10.92

0.1834862

57013063

CHINA SHENHUA-H

32.5

-0.9146341

17156864

PING AN INSURA-H

68.85

-0.7209805

7989658

MTR CORP

SUN HUNG KAI PRO

MOVERS

0 23470

INDEX 23356.99 HIGH

23464.04

LOW

23213.76

52W (H) 23515.85938 (L) 18056.4

23210

14-January

16-January

Hang SENG CHINA ENTErPRISE INDEX PRICE

DAY %

VOLUME

CHINA PACIFIC-H

31.3

-0.1594896

10329777

YANZHOU COAL-H

CHINA PETROLEU-H

9.03

-1.633987

72933837

ZIJIN MINING-H

32468054

CHINA RAIL CN-H

9.31

-0.9574468

9105379

-1.241135

9502892

CHINA RAIL GR-H

4.8

-1.840491

20193952

3.67

-1.078167

217055902

CHINA SHENHUA-H

32.5

-0.9146341

17156864

BANK OF COMMUN-H

6.23

-1.267829

35531685

CHINA TELECOM-H

4.35

-0.4576659

55052988

BYD CO LTD-H

26.9

4227140

DONGFENG MOTOR-H

12.56

-0.7898894

26422101

CHINA CITIC BK-H

5.06

-0.589391

42597191

GUANGZHOU AUTO-H

7.25

-5.104712

14621081

CHINA COAL ENE-H

8.68

-1.251422

23838836

HUANENG POWER-H

6.83

-1.300578

13797959

CHINA COM CONS-H

7.7

-1.785714

18785617

IND & COMM BK-H

5.82

-0.6825939

220966469

CHINA CONST BA-H

6.53

-0.1529052

211429311

JIANGXI COPPER-H

21.1

-0.4716981

6640634

CHINA COSCO HO-H

4.54

-1.731602

16160069

PETROCHINA CO-H

10.92

0.1834862

57013063

CHINA LIFE INS-H

26.7

-0.9276438

23442925

PICC PROPERTY &

11.9

-1.652893

16900691

CHINA LONGYUAN-H

6.44

-0.3095975

13488500

PING AN INSURA-H

68.85

-0.7209805

7989658

CHINA MERCH BK-H

17.94

-1.211454

18120864

SHANDONG WEIG-H

7.59

5789300

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.95

-1.985112

216481948

AIR CHINA LTD-H

7.07

7373270

0.2506266

ANHUI CONCH-H

27.85

BANK OF CHINA-H

ALUMINUM CORP-H

NAME

-0.990099

37195562

SINOPHARM-H

25.8

1.976285

2880233

CHINA NATL BDG-H

11.64

-1.522843

32268789

TSINGTAO BREW-H

-0.8810573

1927683

CHINA OILFIELD-H

15.58

-1.889169

11761602

WEICHAI POWER-H

34.35

-1.857143

4612204

CHINA MINSHENG-H

NAME ZOOMLION HEAVY-H ZTE CORP-H

MOVERS

PRICE

DAY %

VOLUME

13.56

-2.164502

38381071

3.16

2.265372

74896753

10.72

-1.651376

19501692

-1.960784

12993817

2 12060

INDEX 11907.52 HIGH

12056.1

LOW

11817.1

52W (H) 12094.16016 11810

(L) 8987.76 14-January

16-January

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.78

-2.112676

147653427

CITIC SECURITI-A

13.4

-1.687454

114567320

AIR CHINA LTD-A

5.74

-0.8635579

37849137

CSR CORP LTD -A

5.02

-2.14425

ALUMINUM CORP-A

5.24

0.3831418

41616641

DAQIN RAILWAY -A

6.89

ANGANG STEEL-A

4.07

-1.690821

17240904

DATANG INTL PO-A

ANHUI CONCH-A

17.98

-1.479452

41880458

EVERBRIG SEC -A

9.1

-2.777778

53166052

GD POWER DEVEL-A

NAME

BANK OF BEIJIN-A

NAME

PRICE

DAY %

VOLUME

SAIC MOTOR-A

16.68

-3.639515

43932674

54975186

SANY HEAVY INDUS

10.27

-0.7729469

46473024

-1.71184

37122065

SHANDONG DONG-A

46.35

5.797763

16878252

4.14

0.4854369

28332608

SHANDONG GOLD-MI

38.69

2.734997

36019168

13.52

-1.672727

24324000

SHANG PHARM -A

12.18

-0.4088307

16093175

2.62

-0.3802281

50049924

SHANG PUDONG-A

10.12

-2.032914

156691872

BANK OF CHINA-A

2.95

-0.6734007

31839015

GEMDALE CORP-A

6.8

-2.857143

72679945

SHANGHAI ELECT-A

4.25

-0.2347418

10325935

BANK OF COMMUN-A

4.96

-1.587302

68096254

GF SECURITIES-A

14.87

-2.235371

57614901

SHANXI LU'AN -A

22.48

-0.4428698

16848137

BAOSHAN IRON & S

5.03

-1.372549

30221719

GREE ELECTRIC

26.63

-1.734317

19554980

SHANXI XINGHUA-A

41.12

-2.720606

4285934

BBMG CORPORATI-A

7.5

-2.723735

23358863

GUANGHUI ENERG-A

18.16

3.416856

68110859

SHANXI XISHAN-A

13.99

0.5751258

31887910 45408132

BYD CO LTD -A

23.6

-1.048218

9937072

HAITONG SECURI-A

10.06

-2.140078

83208450

SHENZEN OVERSE-A

7.12

-2.465753

CHINA CITIC BK-A

4.28

-0.6960557

30403058

HANGZHOU HIKVI-A

33.95

4.397294

10970058

SICHUAN KELUN-A

64.12

0.03120125

2263378

CHINA CNR CORP-A

4.63

-2.114165

40984082

HENAN SHUAN-A

66.49

3.005422

3502965

SUNING APPLIAN-A

7.53

0.6684492

91122422

CHINA COAL ENE-A

7.9

0.3811944

22470149

HONG YUAN SEC-A

18.61

-1.690438

16327369

TSINGTAO BREW-A

33.53

0.2391629

2048206

CHINA CONST BA-A

4.67

-1.268499

56986960

HUATAI SECURIT-A

9.4

-2.185224

22286852

WEICHAI POWER-A

24.53

0.5327869

13830076

CHINA COSCO HO-A

4.42

-1.118568

27120353

HUAXIA BANK CO

10.31

-1.996198

29059849

WULIANGYE YIBIN

28.11

-1.472135

39454106

CHINA CSSC HOL-A

25.63

6.569647

44768494

IND & COMM BK-A

4.27

0.2347418

57210158

YANGQUAN COAL -A

14.23

0.7077141

32784645

CHINA EAST AIR-A

3.57

1.133144

43342697

INDUSTRIAL BAN-A

16.98

-1.849711

100445686

YANTAI WANHUA-A

16.01

-1.476923

9756393

CHINA EVERBRIG-A

3.01

-1.311475

133610435

INNER MONG BAO-A

36.84

64356068

YANZHOU COAL-A

18.34

1.158301

13652035

CHINA INTL MAR-A

12.92

-1.374046

12582732

INNER MONG YIL-A

25.89

5.243902

27369302

YUNNAN BAIYAO-A

2.842451

3932624

CHINA LIFE INS-A

21.15

-2.981651

13036978

INNER MONGOLIA-A

5.53

0.7285974

112581012

ZHONGJIN GOLD

16.9

1.991551

66730308

CHINA MERCH BK-A

13.52

-1.957941

90299892

JIANGSU HENGRU-A

30.79

2.394413

8317858

ZIJIN MINING-A

3.91

1.033592

132369752

17603606

JIANGSU YANGHE-A

98.5

-2.658365

3942544

ZOOMLION HEAVY-A

9.03

-0.9868421

50533033

JIANGXI COPPER-A

25.21

0.84

21711141

10.34

-2.45283

33641408

JINDUICHENG -A

13.07

10.01684

70088577

CHINA MERCHANT-A

28.97

-2.91555

CHINA MERCHANT-A

10.14

-2.312139

25280866

CHINA MINSHENG-A

8.54

-0.6976744

135654262

7.65

-0.520156

64154079

JIZHONG ENERGY-A

15.23

0.1973684

24870251

16.44

-1.142514

7662036

KANGMEI PHARMA-A

14.84

2.486188

59218350

206

-2.300213

6950165

CHINA NATIONAL-A CHINA OILFIELD-A

22.47

-2.304348

25826336

KWEICHOW MOUTA-A

CHINA PETROLEU-A

6.89

-2.545969

68640465

LUZHOU LAOJIAO-A

35.28

-1.945525

13254795

CHINA RAILWAY-A

6.2

-2.821317

34625429

METALLURGICAL-A

2.25

-0.4424779

32769878

2.55

-0.7782101

26484868

CHINA PACIFIC-A

CHINA RAILWAY-A

3.29

-2.662722

68819262

NINGBO PORT CO-A

CHINA SHENHUA-A

24.53

-1.08871

24511700

PANGANG GROUP -A

4.09

-1.207729

98642386

8.97

-0.6644518

ZTE CORP-A

MOVERS

195

11 2610

INDEX 2577.092

CHINA SHIPBUIL-A

5.24

5.858586

121907216

PETROCHINA CO-A

33066404

HIGH

2601.99

CHINA SOUTHERN-A

4.07

1.243781

64871876

PING AN BANK-A

17.82

1.192504

68270094

LOW

2474.18

CHINA STATE -A

3.76

-0.7915567

135768000

PING AN INSURA-A

45.95

-2.192422

28925857

CHINA UNITED-A

3.53

-0.8426966

102092255

POLY REAL ESTA-A

13.56

-3.418803

96402513

CHINA VANKE CO-A

10.12

166448824

QINGDAO HAIER-A

13.84

-1.142857

12772166

CHINA YANGTZE-A

6.99

28245953

QINGHAI SALT-A

27.23

-1.233225

8568344

NAME

PRICE DAY %

Volume

PRICE DAY %

Volume

ACER INC

24.3 -0.8163265

15059414

FORMOSA PLASTIC

79.3

-1.122195

4709042

24.75 -0.2016129

13267557

FOXCONN TECHNOLO

86.9

1.282051

36.9 -0.8064516

2713153

FUBON FINANCIAL

52W (H) 2717.825 (L) 2102.135

2470

14-January

16-January

FTSE TAIWAN 50 INDEX

ADVANCED SEMICON ASIA CEMENT CORP

NAME

ASUSTEK COMPUTER

322

-2.12766

1919456

HON HAI PRECISIO

AU OPTRONICS COR

11.7

-4.098361

161264533

HOTAI MOTOR CO

128.5

CATCHER TECH

14820926

TPK HOLDING CO L

459

-2.340426

9680875

35.5 -0.8379888

16422472

TSMC

99.2

-1.293532

34696359

84 -0.2375297

72553828

UNI-PRESIDENT

52.8

-2.402957

8509072

UNITED MICROELEC

11.5

-1.287554

42384484

31.9

1.916933

20632989

15.15

-1.302932

10217870

55.9 -0.5338078

3149612

229

-1.079914

246924

289

0.5217391

12426286

16.85 -0.5899705

6122206

YUANTA FINANCIAL YULON MOTOR CO

17671275

HTC CORP

15635849

HUA NAN FINANCIA

CHANG HWA BANK

15.9 -0.3134796

6363798

LARGAN PRECISION

734

1.241379

2054534

CHENG SHIN RUBBE

74 -0.9370817

5101986

LITE-ON TECHNOLO

39.5 -0.7537688

2652389

CHIMEI INNOLUX C

14.4

-5.263158

121843428

309.5 -0.6420546

10431893

CHINA DEVELOPMEN

7.61

47316785

MEGA FINANCIAL H

23.1 -0.8583691

19251753

CHINA STEEL CORP

27.8 -0.8912656

12352957

NAN YA PLASTICS

58.5

-1.515152

5150982

CHINATRUST FINAN

16.8

43964014

PRESIDENT CHAIN

161.5

0.310559

980662

CHUNGHWA TELECOM

93.8 -0.9503696

COMPAL ELECTRON

20.2

DELTA ELECT INC

6433983

QUANTA COMPUTER

64.3

0.9419152

13783838

-1.222494

17364146

SILICONWARE PREC

30.65

0.4918033

7555871

12.95 -0.3846154

13400595

106

0.952381

4799148

SINOPAC FINANCIA

FAR EASTERN NEW

-1.018923

7291990

SYNNEX TECH INTL

FAR EASTONE TELE

72.3

0.4166667

9014739

FIRST FINANCIAL

17.5 -0.5681818

FORMOSA CHEM & F

77.8 -0.3841229

FORMOSA PETROCHE

83.2

-2.803738

Volume

105

31.8 -0.1569859

-0.591716

PRICE DAY %

TAIWAN MOBILE CO

CATHAY FINANCIAL

MEDIATEK INC

NAME

-1.993355

5926372

TAIWAN CEMENT

38.95 -0.1282051

4870378

9556844

TAIWAN COOPERATI

16.35 -0.9090909

5207587

3636934

TAIWAN FERTILIZE

74.8

-2.094241

4212025

3070118

TAIWAN GLASS IND

29.8

-3.559871

1436337

WISTRON CORP

MOVERS

6256977

3 5460

INDEX 5363.05 HIGH

5460.91

LOW

5362.57

52W (H) 5621.53 5360

(L) 4719.96 14-January

16-January

January 17, 2013 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 32.6

51.2

16.6

32.4

50.6

16.4

32.2

50.0

16.2

32.0

49.4

16.0

36.8

21.2

22.4

21.0

36.6 36.4 36.2

20.4

21.8

36.0

20.2

21.6

CURRENCY EXCHANGE RATES

NAME

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

WTI CRUDE FUTURE Feb13

93.12

-0.171526587

1.415813548

109.4300003

80.05999756

BRENT CRUDE FUTR Feb13

110.3

-0.72900729

119.2999954

90.38999939

GASOLINE RBOB FUT Feb13

269.62

-0.384245917

-2.371727559

292.9699898

220.3500032

GAS OIL FUT (ICE) Mar13

946.75

-0.551470588

2.434406275

1026.25

800.5

3.407

-1.389290883

1.671142942

4.090000153

3.049999952

NATURAL GAS FUTR Feb13 HEATING OIL FUTR Feb13 METALS

302.18

0.348686614

-0.329838101

333.4599972

255.6599855

Gold Spot $/Oz

1678.97

-0.1214

0.8718

1796.08

1527.21

Silver Spot $/Oz

31.1975

-0.2797

3.6118

37.4775

26.1513

Platinum Spot $/Oz

1662.15

-1.9022

9.5141

1736

1379.05

Palladium Spot $/Oz

711.48

-0.0801

1.6894

725.19

553.75

LME ALUMINUM 3MO ($)

2052

-1.013024602

2361.5

1827.25

LME COPPER 3MO ($)

7994

-0.075

0.79435128

8765

7219.5

LME ZINC

1995

-0.0501002

-4.086538462

2220

1745

3MO ($)

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

22.0

20.6

Commodities ENERGY

22.2

20.8

17500

1.419878296

2.579132474

22150

15236

14.995

-0.431606906

-1.18616145

16.84000015

14.89999962

734

0.479123888

5.119942714

846.25

511

Mar13

WHEAT FUTURE(CBT) Mar13

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

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

PRICE

DAY %

1.0533 1.6008 0.9297 1.3269 87.85 7.9852 7.7527 6.2184 54.8212 29.87 1.2248 29.01 40.7 9668 92.535 1.23363 0.82889 8.2519 10.5953 116.57 1.03

-0.1706 -0.3176 -0.3012 -0.6067 1.0928 0.0075 0.0052 -0.0434 -0.3579 0.5022 0.0408 -0.1758 -0.2826 2.0687 1.2601 0.3048 0.2908 0.7126 0.6191 1.7071 0

YTD %

(H) 52W

1.4935 -1.0386 -1.5381 0.5989 -1.992 -0.025 -0.0271 0.1962 0.317 2.377 -0.2776 0.0793 0.7494 1.2929 -3.4668 -2.1198 -1.6251 -0.4169 -0.6125 -2.5736 -0.0097

(L) 52W

1.0857 1.6381 0.9972 1.3487 89.67 8.0039 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 94.659 1.24133 0.8506 8.4894 10.7712 120.13 1.0314

0.9582 1.5269 0.8931 1.2043 76.03 7.9823 7.7498 6.2105 48.6088 29.77 1.2152 28.913 40.54 8875 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029

MACAU RELATED STOCKS NAME

787.75

0.638773555

1.253213368

948.25

652

SOYBEAN FUTURE Mar13

1422

0.601344181

0.886839305

1728.25

1194.5

ARISTOCRAT LEISU

COFFEE 'C' FUTURE Mar13

151.3

-0.786885246

5.215577191

240.3499908

141.25

CROWN LTD

PRICE

(H) 52W

(L) 52W

3.33

DAY % YTD % -2.058824

5.714283

3.44

2.27

VOLUME CRNCY 2787902

11.68

0.3436426

9.465791

11.81

7.97

3648971

SUGAR #11 (WORLD) Mar13

18.7

0.429645542

-4.151717068

25.12999916

18.30999947

AMAX HOLDINGS LT

0.08

14.28571

0.119

0.055

11213000

COTTON NO.2 FUTR Mar13

76.66

0.590473691

2.022890604

98.5

66.84999847

BOC HONG KONG HO

25.8

-0.3861004

7.05394

26.15

19.48

13664460

World Stock MarketS - Indices NAME

CENTURY LEGEND

0.29

9.433968

0.34

0.215

4000

CHEUK NANG HLDGS

6.01

2.735043

0.3338937

6.25

2.76

282388

CHINA OVERSEAS

24.8

-0.8

7.359306

25.6

13.385

11679273

CHINESE ESTATES

12.8

3.392569

-2.140672

13.26

8.3

289500

CHOW TAI FOOK JE

13.04

1.557632

4.823155

15.16

8.4

2770480

EMPEROR ENTERTAI

2.01

0.5

6.349207

2.08

0.99

1395000

FUTURE BRIGHT

1.59

30.32787

1.59

0.41

7872000

GALAXY ENTERTAIN

32.15

5.930806

33.8

15.1

9782564

118.8

-0.1680672

0.08424857

120

93.25

1250708

-1.654135

34.4

19.049

1768730

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

13534.89

0.2041115

3.287129

13661.87

12035.08984

NASDAQ COMPOSITE INDEX

3110.778

-0.2157175

3.022487

3196.932

2689.58

HANG SENG BK

FTSE 100 INDEX

6088.93

-0.4639294

3.240527

6134.17

5229.76

HOPEWELL HLDGS

32.7

-1.654135

DAX INDEX

7662.32

-0.1770474

0.6559002

7789.94

5914.43

HSBC HLDGS PLC

84.15

0.3577818

3.505531

84.85

59.5

15573279

HUTCHISON TELE H

3.51

0.862069

-1.404493

3.88

2.98

4270329

LUK FOOK HLDGS I

28.4

-0.1757469

16.39344

33.2

14.7

2112520

MELCO INTL DEVEL

11.58

5.08167

28.52386

11.84

5.12

15068216 6687517

NIKKEI 225

10600.44

-2.561246

1.974576

10952.31

8238.96

HANG SENG INDEX

23356.99

-0.1048692

3.089874

23515.85938

18056.4

CSI 300 INDEX

2577.092

-0.7228444

2.145905

2717.825

2102.135

MGM CHINA HOLDIN

16.44

-0.1215067

17.26105

16.78

9.913

TAIWAN TAIEX INDEX

7700.43

-0.8318073

0.01208099

8170.72

6857.35

MIDLAND HOLDINGS

3.98

1.272265

7.567566

5.217

3.249

3062000

NEPTUNE GROUP

0.195

2.631579

28.28948

0.222

0.084

36405000

NEW WORLD DEV

14.14

0.2836879

17.63727

14.22

7.1

17787760

SANDS CHINA LTD

36.15

0.1385042

6.480115

37.8

20.65

8215191

SHUN HO RESOURCE

1.48

5.714288

1.5

1.03

SHUN TAK HOLDING

4.56

0.2197802

8.830547

4.65

2.559

14917641

SJM HOLDINGS LTD

20.4

-1.686747

13.33333

21.15

12.34

4285861

-0.4267425

-0.5681813

17.5

12.96

2189199

KOSPI INDEX

1977.45

-0.3170778

-0.9814525

2057.28

1758.99

S&P/ASX 200 INDEX

4738.444

0.4640887

1.925029

4750.7

3985

4410.964

0.2304114

2.18401

4427.652

3635.283

FTSE Bursa Malaysia KLCI

1682.95

-0.1743886

-0.3552503

1699.68

1509.06

NZX ALL INDEX

905.708

-0.1107298

2.681815

907.918

718.56

PHILIPPINES ALL SHARE IX

3816.97

-0.4986836

3.189798

3857.79

3114.87

HSBC Dragon 300 Index Singapor

624.91

-0.26

0.62

STOCK EXCH OF THAI INDEX

1421.24

-0.1138552

2.105705

1432.21

1035

HO CHI MINH STOCK INDEX

465.25

0.8300464

12.45256

492.44

Laos Composite Index

1315.46

1.491363

8.288807

1316.48

JAKARTA COMPOSITE INDEX

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

SMARTONE TELECOM WYNN MACAU LTD

21.8

-2.022472

4.057275

25.5

14.62

7638609

ASIA ENTERTAINME

4.15

0.4842615

35.62092

7.24

2.4

361927

BALLY TECHNOLOGI

46.53

0.1075731

4.07068

51.16

40.78

337796

355.97

BOC HONG KONG HO

3.36

9.446256

3.36

2.56

5020

880.65

GALAXY ENTERTAIN

4.19

0.2392344

5.541561

4.37

1.97

30300 6091117

INTL GAME TECH

15.17

1.880457

7.057162

17.67

10.92

JONES LANG LASAL

86.41

0.1506722

2.942575

87.62

61.39

325459

LAS VEGAS SANDS

52.61

0.8433966

13.97314

58.3216

32.6127

4091490

MELCO CROWN-ADR

19.81

3.33855

17.63658

20.015

9.13

8727037

MGM CHINA HOLDIN

2.03

9.729728

2.09

1.2863

955

MGM RESORTS INTE

13.15

3.137255

12.97251

14.9401

8.83

14773681

SHFL ENTERTAINME

14.51

0.4847645 0.06896552

18.77

11.75

137475

SJM HOLDINGS LTD

2.7

1.123596

16.88312

2.7

1.6273

2000

123.8

0.8143322

10.05423

129.6589

84.4902

1001768

WYNN RESORTS LTD

AUD HKD

USD

14 |

business daily January 17 2013

Opinion

Thought it was safe to forget Greece? Think again Megan Greene

Chief economist at Maverick Intelligence and Bloomberg View columnist

ust before Christmas, I met with former Greek Finance Minister George Papaconstantinou, and he talked about how excited he was to spend the holidays abroad, where – unlike in Greece – he could roam freely without a security detail. His holiday didn’t go quite as expected. On December 28, Papaconstantinou was accused of removing names from a list of Greeks with Swiss bank accounts – the so-called Lagarde list – and he was expelled from the socialist Pasok party. This week, Greek legislators will debate whether to start a parliamentary investigation against him. The rest of the world has largely ignored this latest twist of the plot in Greece. Not only does it demonstrate the kind of institutional failure that has landed the country in so much trouble, but it could also mark the beginning of the end for the current coalition government – and possibly for Greece’s euroarea membership, as well. The story begins in late 2010, when then French Finance Minister Christine Lagarde distributed a list to her counterparts around Europe with the names of thousands of depositors at the Geneva branch of HSBC Holdings Plc. Most countries investigated the accounts and collected many millions of euros and other currencies in unpaid taxes. Not so in Greece, a country that international creditors have repeatedly lambasted for its tolerance of rampant tax evasion. While the Lagarde list included about 2,000 Greek depositors, successive Greek governments did not use it to collect a single cent from tax evaders.

No trust So what did the government do with the list? That depends on whom you ask. Most Greeks I speak to about this tell me without hesitation that the Lagarde list was used for extortion. There is no proof of this, but it demonstrates clearly the level of trust that Greeks have in their politicians. Papaconstantinou was the first Greek official to receive the list from Lagarde. In a

George Papaconstantinou, former Greek Finance Minister

TV interview last week, he said he immediately asked the Financial Crimes Squad in Athens to check a sample of names. Then he says he transferred the data onto a memory stick and gave the full list to the squad. After Papaconstantinou left office as finance minister in June 2011, the list disappeared until September 2012, when the current finance minister, Yannis Stournaras, apparently learned of its existence from the press and said he had never received it. Evangelos Venizelos, the finance minister serving between Papaconstantinou and Stournaras, responded to Stournaras’s statement by saying he didn’t know the whereabouts of the Lagarde list. A few days later, he nevertheless presented it to the authorities, declaring that he had never read it but instead only briefly glanced at it, noticing that there were three Jewish names on it (whatever that means). The mishandling of the Lagarde list is the result of extremely weak – and, in some cases, failed – institutions in Greece. The Financial Crimes Squad should have conducted a full investigation of the names on the list, with the finance minister then

authorising a course of action to recoup revenue from identified tax evaders. That this scandal should have happened at all is bad enough, yet the government’s proposed remedy is worse. On December 28, a total of 71 members of the ruling coalition signed a petition demanding that Papaconstantinou – alone – should be investigated, for allegedly removing the names of three of his relatives from the list. If Greece’s parliamentarians vote in favour of this plan this week, it would be yet another

The mishandling of the Lagarde list is the result of extremely weak – and, in some cases, failed – institutions in Greece

reflection of institutional failure in Greece.

No Motive The accusation against Papaconstantinou is hardly clear-cut. Papaconstantinou’s relatives have presented evidence to the Financial Crimes Squad that their deposits in Switzerland were legal and properly declared. If this evidence is accepted, then the former finance minister had no obvious motive for removing their names, raising the question of whether he, or someone else, did so and why. More important, Papaconstantinou is only one of many people involved. Venizelos’s recollection of the list evolved as the scandal unfolded. He not only failed to start an investigation into the names on the list, but also took the list with him when he left office. Should Venizelos not be under investigation, as well? Additionally, any complete inquiry should include senior members of the crimes squad, who received the list from Papaconstantinou and also sat on their hands. The proposed parliamentary investigation against Papaconstantinou has already ruffled some Greek feathers. Last week, two members

of the Democratic Left were expelled from their party for demanding a more complete inquiry. The Independent Greeks and neo-fascist Golden Dawn parties have demanded that former prime ministers also be included in the investigation. The real threat to the government, however, comes from the main opposition party, Syriza. No matter who is investigated, Syriza stands to gain support from the Lagardelist saga given the party’s status as an outsider to the cosy political establishment that has run Greece into the ground. So far, the coalition has managed to hold on to power because no party has had the incentive to bring it down. But this may be changing. Syriza has led the charge in demanding that the Lagardelist inquiry include a number of politicians and officials. The party probably smells Pasok’s weakness and is going in for the kill. If Syriza can use the Lagarde-list scandal to come close to attracting enough support to form a majority government, we can expect it to incite even more antiausterity sentiment in the electorate than we have seen so far, with the goal of forcing early elections. Most analysts equate a Syriza government in Greece with the country’s exit from the euro area, given party leader Alexis Tsipras’s sabre rattling before the June election. The party’s language has softened recently, with Tsipras swapping demands for a moratorium on debt payments with calls for a more constructive debt conference to renegotiate the terms. So once in government, Syriza might just back down and fall into line with the demands of the European Union, the European Central Bank and the International Monetary Fund. Then again, it might not. Following the decision of European finance ministers in late 2012 to grant Greece some public-debt relief, most investors concluded that the euro area’s problem child would remain out of sight, at least until after the German elections in September 2013. Bloomberg View

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January 17, 2013 business daily | 15

OPINION

In China, slowdown is a wires bigger danger than growth Business

Leading reports from Asia’s best business newspapers

Economic Times Reserve Bank of India Governor DuvvuriSubbarao on Tuesday tempered expectations of interest rate cuts beginning this month, saying prices of consumer products and manufactured items are still rising. Mr Subbarao, who has refused to give in to pressure from industry and the finance minister to lower key rates, said though the rate of price increase has slowed, it remains elevated. “Inflation has come down, [but is] still high,” he was quoted as saying. The RBI governor said though India’s economic growth rate may be headed towards a decade-low, there is not much room for either monetary or fiscal stimulus.

Peter Orszag

Vice chairman of corporate and investment banking at Citigroup Inc.

and everyone else has none.) China’s Gini coefficient is about 50 percent and rising. “To be clear,” the researchers write, “we are not saying that there is an absolute causal link between inequality and stagnation in growth when a country reaches middle income. However, we are saying that if in the very near future China does not address income inequality and – even more so – human capital inequality, China will have to try to accomplish what no successful graduate has ever done since World War II: make the transition from middle to high income with high levels of inequality.” What would be the consequences if China falls into the trap? According to Yasheng Huang, a professor of management at MIT, slower growth could destabilise China’s internal political economy. That, in turn, could prove to be the far larger risk for other nations.

Myanmar Times Myanmar’s government has issued a call for Expressions Of Interest in the tender for two nationwide telecommunications services licences. Interested companies have until January 25 to submit their documents, it said. The first two licences will be issued during the first half of 2013, it added. “One of the principal goals for this is to increase the overall tele-density to 75 percent to 80 percent in 2015-2016, to make the telecommunications services available to the public at affordable prices, and to give the public the capability of choice for the telecoms services,” the statement said.

Business Inquirer Money sent home by Filipinos overseas amounted to US$1.92 billioninNovember,up7.6percent from US$1.78 billion in the same month last year, the Bangko Sentral ng Pilipinas reported. This brought remittances for the first 11 months of 2012 to US$19.42 billion, up 6 percent from US$18.32 billion in the same period in 2011. “Remittances continued to draw strength from the increasing demand for skilled and professional Filipinos along with innovations in remittance service offered by banks and financial institutions,” the central bank said in a statement.

Jakarta Globe The Energy and Mineral Resources Ministry is still in control of Indonesia’s mining industry despite a Supreme Court ruling that stripped the ministry of power because the law is under review. In November, the Constitutional Court issued a ruling that compelled the national government to amend the law to give local governments a greater say in choosing mine sites. Thamrin Sihite, the director general for coal and mineral resources at the ministry, said the government has yet to revise the regulation, which was issued last year. “The regulation is still in place,” he was quoted as saying.

slight acceleration in Chinese economic growth at the end of last year is reinforcing the common narrative that China’s expansion is a threat to other nations, including the U.S. The bigger danger over the medium term, however, may be a slowdown in Chinese growth – which appears to be more likely than most U.S.based commentators seem to realise. China, after all, is fast approaching income levels associated with the “middleincome trap”, the point at which many other countries have moved from rapid to sluggish growth. This trap opens up for several reasons,

including that economies expand disproportionately, at early stages of development, by shifting workers from agriculture to manufacturing. At some point, though, the gains from such shifts disappear, and new sources of growth are needed. China appears to be near this point. The middle-income trap typically occurs at two income levels: about US$10,000 in per-capita income, and again at about US$15,000. This is based on the most recent data, assembled by economists Barry Eichengreen of the University of California at Berkeley, Donghyun Park of the Asian Development Bank and Kwanho Shin of Korea University, and published this month by the National Bureau of Economic Research.

Rising incomes

China is fast approaching income levels associated with the ‘middleincome trap’, the point at which many other countries have moved from rapid to sluggish growth

Chinese income per capita amounted to slightly more than US$7,000 in 2010. At an average growth rate of 7 percent a year from 2010 onward, China would hit the lower threshold by 2015. And as the authors note, “slowdowns are more likely in economies with high old age dependency ratios, high investment rates that may translate into low future returns on capital, and undervalued real exchange rates that provide a disincentive to move up the technology ladder. These patterns will presumably remind readers of current conditions and recent policies in China.” One thing that can help determine whether a country escapes the middle-income trap and continues to grow

rapidly is its level of inequality, a recent study by researchers at the Chinese Academy of Sciences and Stanford University showed. More unequal societies, with less-inclusive institutions, have greater difficulty sustaining growth. This message is also at the heart of a more comprehensive analysis in “Why Nations Fail,” a recent book by economists Daron Acemoglu of the Massachusetts Institute of Technology and James Robinson of Harvard University. Comparing nations that have escaped the middleincome trap with those that have gotten stuck in it, the researchers from the Chinese Academy of Sciences and Stanford concluded that graduating countries had low inequality, with Gini coefficients of less than 40 percent. (The Gini coefficient equals zero if everyone has the same income, and 100 percent if one person has all the income

Greater danger In a similar vein, China specialist Susan Shirk of the University of California at San Diego warns that it is China’s “internal fragility, not its growing strength, that presents the greatest danger”. And Aaron Friedberg, a professor of politics and international affairs at Princeton University, writes that a less prosperous China “may be a less effective competitor in certain respects, but it could also prove to be less predictable, more aggressive, and hence even more dangerous and difficult for the United States and its allies to manage.” Friedberg says weak leaders in China might be tempted to rally popular support by confronting other countries. Slower growth in China is not inevitable, but it is a greater – and more dangerous – possibility than many in the U.S. may realise. Bloomberg View

16 |

business daily January 17 2013

CLOSING Alibaba plans US$4 bln HK IPO

UBS launches Chinese unit

Alibaba Group Holdings Ltd hired Credit Suisse Group AG and Goldman Sachs Group Inc. to arrange an initial public offering, said two people with knowledge of the matter. The IPO may raise US$3 billion to US$4 billion in Hong Kong this year, said one of the people. Alibaba delisted its Hong Kong unit last year after paying HK$18.3 billion (US$2.4 billion) to buy back the 27 percent stake held by minority investors. Chairman and founder Jack Ma will step down as chief executive officer in May, he said in a letter to employees on Tuesday.

UBS AG launched its locally-incorporated unit in China yesterday, allowing it to conduct yuan businesses in key areas such as wealth management. “China represents one of the most important markets in the world for UBS. We are committed to expanding our presence here and broadening our products and services to meet the needs of clients,” Axel Weber, UBS’s Asia-Pacific chief executive, said in a statement. “It is UBS’s plan to be one of the leading wealth management providers in China and the subsidiary bank is critical to realise this goal,” the statement added.

World Bank cuts growth forecast As advanced nations drag economic recovery 2013 from 5.9 percent in the June forecast. It said growth in these countries should slowly pick up, reaching 5.7 percent next year and 5.8 percent in 2015. Before the global financial crisis hit in 2007, developing countries as a whole were chalking up growth rates of around 7.5 percent, with China growing at an annual rate of 10 percent. The World Bank forecast that Chinese growth would reach 8.4 percent this year, slowing to 7.9 percent by 2015.

Weak confidence Financial markets are calmer, but this has not feed through to growth, the bank said

frustratingly slow economic recovery in developed nations is holding back the global economy, the World Bank said yesterday, as it sharply cut its outlook for world growth in 2013. The World Bank forecast that global gross domestic product will inch up 2.4 percent this year, from 2.3 percent in 2012. In its last forecast in June, the bank

projected global growth would reach 3.0 percent in 2013. Andrew Burns, lead author of the bank’s Global Economic Prospects report, said that a recovery the bank had anticipated last year was now expected “closer to the end of the first quarter and into the second quarter of 2013, rather than beginning a little earlier”. The Bank warned that

a drawn-out political battle in the United States over raising the government’s borrowing limit and spending cuts could hit growth, spark a loss of confidence in the U.S. dollar and unnerve financial markets. The World Bank also cut its forecast for developing countries, which last year grew at their slowest pace in a decade, to 5.5 percent in

In comparison, growth in advanced economies should reach a very weak 1.3 percent this year, weighed down by spending cuts, high unemployment and weak consumer and business confidence, the World Bank said. Activity should strengthen next year to 2 percent and 2.3 percent in 2015. While financial markets were buoyed by measures adopted last year to address the euro zone debt crisis,

the World Bank urged Washington to outline a credible medium-term fiscal plan that “avoids episodes of brinkmanship” over raising the country’s self-imposed debt ceiling. The White House and the U.S. Congress did agree at the beginning of January to extend tax cuts for American families earning less than US$450,000 a year as part of a deal over the so-called fiscal cliff. But lawmakers must still navigate the debt limit as well as thrash out a deal over drastic automatic sending cuts that were postponed until March 1. Mr Burns urged developing countries to “maintain a steady hand on monetary policy” and not to react too forcefully to changes in developed countries. He said developing nations should focus on structural polices and investments to support sustained growth. The Bank said most developing countries were operating at or near “full capacity” and additional efforts to boost output risk hitting inflation speed bumps. Reuters

No trade war with Beijing, says EU’s ambassador European Commission probing subsidies to steel producers

he European Union will not be drawn into a trade war with China, the EU’s ambassador to the country said yesterday, a day after trade sources said the European Commission found that Beijing illegally subsidises Chinese steel producers. The Commission is investigating 37 dumping and subsidy cases, 21 of them involving China, and Tuesday’s preliminary finding asked EU members to back punitive tariffs against Chinese steel firms, a move that angered Beijing.

But EU Ambassador to China Markus Ederer said he was puzzled by and “flatly rejects” reports of a trade war between the two economies which together comprise the world’s largest trade relationship. “I don’t want this to become a self-fulfilling prophecy. First of all, it takes two for a war, and I can declare here that the EU is not available for a trade war with China,” Mr Ederer told a news briefing. China’s Commerce Ministry spokesman Shen Danyang yesterday called the

Commission’s investigation into steel subsidies “unreasonable”. “Such a conclusion based on unreasonable investigations will seriously hurt Chinese companies’ legal rights and interests,” Mr Shen said at a separate news briefing. European anti-dumping and anti-subsidy duties affect less than 1 percent of Chinese exports to Europe, Mr Ederer said. “China, as well, has investigations, as you know, into European exports to China. We have no issue with

Investigation into steel subsidies ‘unreasonable’, says Chinese official

that as long as it is under WTO rules,” he said, adding that observers should not “over dramatize” the issue. The Commission’s ongoing investigations include a study of the alleged dumping of 21 billion euros of solar panels and components by Chinese producers. A

preliminary ruling on that case, the Commission’s largest investigation to date, is due in the first half of 2013. The European Union is China’s biggest trading partner while for the EU, China is second only to the United States. Reuters