Citic piles on debt to acquire CTM
Year I Number 202 Friday January 18, 2013 Editor-in-chief Tiago Azevedo Deputy editor-in-chief Vitor Quintã MOP 6.00 www.macaubusinessdaily.com
Mainland-based Citic Telecom International Holdings Ltd says it might refinance some loans it’s using to buy Macau’s largest telecoms company CTM – Companhia de Telecomunicações de Macau SARL. “A net gearing of over 200 percent is high. No one wants to get that much gearing,” Citic’s chief financial officer David Chan Tin Wai told Business Daily in a telephone interview. Page 3
Govt shows its cards on Studio City casino T
he mystery surrounding whether the restarted Studio City casino resort scheme on Cotai really has permission for a gambling facility might have been resolved. Since July 2011 Lau Si Io, Macau’s Secretary for Public Works and Transport – the department that oversees the casino permission process – had been telling the local media that Studio City didn’t have casino approval. He avoided saying it would never get one. But he did say that the scheme as authorised in 2008 did not contain any “gambling elements”. Yesterday the administration said the casino approval pre-dated that 2008 milestone. The government accepted the introduction of a casino in the project after a request filed in 2006 by one of the original developers, the authorities revealed in a written reply to a legislator. More on page 5
Complex approvals add to property supply crunch: Jones Lang LaSalle
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HANG SENG INDEX
Home sale prices – along with rental values of offices and shops – may see a 10 to 20 percent rise in 2013 due to strong demand outweighing the limited supply, says Jones Lang LaSalle (Macau) Ltd. “The approval procedures for land purchase in Macau are more complex [than abroad], and often take a long time. And the whole procedure comes with low transparency,” said Gregory Ku, managing director.
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January 17
HSI - Movers Name
%Day
CHINA RES POWER
2.84
WANT WANT CHINA
1.74
SANDS CHINA LTD
1.24
LI & FUNG LTD
1.19
CHINA RES ENTERP
1.11
CHINA RES LAND
-1.74
HANG LUNG PROPER
-2.14
CHINA LIFE INS-H
-2.43
BELLE INTERNATIO
-2.64
ALUMINUM CORP-H
-3.75
Source: Bloomberg
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More of city’s nest egg to go into yuan products A bigger share of the territory’s fiscal reserve could be placed into yuan-denominated products, Macau’s financial regulator said, after its Hong Kong counterpart announced new measures to support the growth of its own offshore yuan market. The Hong Kong Monetary Authority announced new measures on Tuesday to help meet banks’ needs to manage short-term yuan liquidity. They include reducing the notice period required when requesting yuan funds.
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Roadside pollution bad 16 days straight More measures are needed to cut the number of motor vehicles and stop the quality of the air from worsening, environmentalists say. In the first 16 days of this month the daily air quality index on the city’s roadsides averaged 112.1 points and the daily air quality index on the peninsula averaged 96.1. Air quality is considered bad when the index exceeds 100. On Wednesday it reached 133 and the Meteorological Bureau’s website warned of a high concentration of PM2.5, particulates that pose the biggest threat to health.
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business daily January 18, 2013
macau
Property prices on steady growth track: agent Shops saw fastest 2012 price hike in Macau’s property market, says Jones Lang LaSalle Stephanie Lai
Gregory Ku, managing director of Jones Lang LaSalle Macau
sw.lai@macaubusinessdaily.com
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ome sale prices – along with rental values of offices and shops – may see a 10 to 20 percent rise in 2013 due to continuous strong demand outweighing the limited supply, says Jones Lang LaSalle (Macau) Ltd. According to the agent’s yearly market review, high-street shops have recorded the greatest rise of any real estate category in both rental and capital value in 2012. Jones Lang LaSalle’s data show the average retail rents and capital values last year has soared by 99.1 percent and 142.6 percent year-onyear respectively. The huge surge in aggregate shop rentals realised market wide was mainly driven by an increase in supply as more buildings in the tourist hot spots around Senado Square, Rua de S. Domingos and Rua de S. Paulo were converted to shops. The most notable example was
Retail rents will still grow between 10-20 percent as the demand for spaces … will continue to increase
the international jewellery retailer Swarovski AG leasing a whole building opposite S. Domingos Church for over 2.5 million patacas (US$310,000) a month. In addition, a three-storey building at Rua Pedro Nolasco de Silva was sold for HK$170 million. “The [growth in] shop rents this year may not be as explosive as in 2012, as the rental value has already reached quite a high level,” said Gregory Ku, managing director of Jones Lang LaSalle Macau. “But this year the retail rents will still grow between 10-20 percent as the demand for spaces, especially those located in prime areas, will continue to increase,” Mr Ku told Business Daily.
Dearer homes According to the agent’s review, offices and homes saw a strong
growth in 2012. Office space aggregate rental value rose by 9.9 percent in 2012, with a huge rise of almost two-thirds in its capital value. Mass-market and mediumsegment homes, on the other hand, showed a rise of 51.9 percent in capital value in 2012, a faster growth when compared with the 25.9 percent rise in high-end homes. “We remain optimistic over Macau’s property market throughout 2013,” said Alvin Mak, Jones Lang LaSalle Macau’s senior manager of investment department, in a press conference yesterday. “There is no big impact from the external economic environment while the economic fundamentals of the city remain solid,” he added. “Coupled with a low interest rate environment and the launch of [the United States’] third round of quantitative easing, we expect
that the property sector will remain robust in the next few years,” Mr Mak predicted. However, the government’s complex and time-consuming approval process for land purchase by private developers was a huge factor in diminishing foreign investment funds’ interest in setting foot in Macau, despite the city’s strong economic performance, said Mr Ku. “The approval procedures for land purchase in Macau are more complex [than abroad], and often take a long time,” he said. “And the whole procedure comes with low transparency.”
A building opposite S. Domingos Church was leased for over 2.5 million patacas a month
HK lifts suspension on Pearl bridge contractor
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he Hong Kong Labour Department yesterday revoked a suspension notice on one of the contractors of the reclamation works of an artificial island for the Hong Kong-ZhuhaiMacau Bridge. The construction was suspended after a temporary work platform collapsed at the site in October, killing one worker and injured 14 others. The department said it was “satisfied” that the improvement measures taken by the principal contractor can “eliminate the risks
associated with the work” on the site. “To ensure that the plant on the site and work processes are safe to workers, the contractors have formulated a safety improvement plan in accordance with risk assessment,” it said in a statement. In a note to investors released last month, Union Gaming Research Macau said it was “concerned” that the Pearl River Delta bridge might not be operational in 2016 as officially stated, while mentioning the work suspension. V.Q.
January 18, 2013 business daily | 3
MACAU Almost 9,000 fined for flouting smoking ban
Photo by Manuel Cardoso
Since January last year up until Tuesday, a total of 8,913 people had been fined for breaking the city’s smoking ban, the Health Bureau said on Wednesday. The figure includes both the full smoking ban in public areas and the partial smoking ban inside casinos. The Health Bureau did not provide independent data for the fines only related to the partial ban on smoking inside casinos, introduced on January 1. Operators can still designate up to half of their gaming floors as smoking areas.
Citic Telecom leaves room for CTM loan refinancing Purchase of local telco means Citic Telecom might have too much debt, says CFO Vítor Quintã
vitorquinta@macaubusinessdaily.com
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itic Telecom International Holdings Ltd is open to a future refinancing of the loan it secured to finance the acquisition of CTM, Companhia de Telecomunicações de Macau SARL. The company has already received the backing from seven banks for a syndicated loan worth over US$1.16 billion (9.28 billion patacas), chief financial officer David Chan Tin Wai said. The completion of the loan was reported yesterday by South China Morning Post. Negotiations are still underway with an eight bank, he told Business Daily, without disclosing the names of the financial institutions. Last week sources quoted by Thomson Reuters Basis Point said the lenders included Australia and New Zealand Banking Group Ltd, Bank of Tokyo Mitsubishi UFJ Ltd, DBS Bank, ING Bank, Mizuho Corporate Bank Ltd, Sumitomo Mitsui Banking Corp and Standard Chartered Plc. In a note to investors released on Monday, DBS Vickers Group Research warned that the loans could push Citic Telecom’s debt to twice as much as its equity. Mr Chan admitted that the move might leave the company with too much debt. “A net gearing of over 200 percent is high. No one wants to get that much gearing,” he confirmed in a phone interview. However, the executive stressed that, thanks to low worldwide interest rates, Citic Telecom was able to get
“a very good financial package”. He said that US$200 million would be in the form of a one-year loan, while the rest were all five-year loans, with interest rates below five percent. “That’s a very comfortable interest rate,” Mr Chan said. The DBS Vickers note also downplayed the risk for the company, which can consider refinancing part of the syndicated loan in the future by issuing rights to shares or bonds. “We will leave room to consider our refinancing later on,” Mr Chan said. He hinted that no decision would be made before Citic Telecom is due to pay the short-term one-year loan. “We will decide which market is best,” said the company’s chief financial officer, while stressing that currently the interest rates for loans and bonds is “quite similar”.
Hold pattern Citic Telecom announced earlier this week a deal to acquire the shares of Cable & Wireless Communications Plc and Portugal Telecom SGPS SA, becoming the major shareholder of Macau’s largest telecom operator with a 99 percent stake. Cable & Wireless will sell its 51-percent share for US$749.7 million, while Portugal Telecom will sell its 28-percent stake for US$411.6 million. The transactions will only be completed once the Cable & Wireless and Citic Telecom’s shareholders approve them, as well the Macau and Beijing governments.
KEY POINTS Citic Telecom negotiating syndicated loan with an eight bank Shareholders to vote ‘by end of March or early April’ – CFO CTM deal closed at ‘fair market value’ Mr Chan is confident that the Citic Telecom shareholders will greenlight the deals when they meet to vote “by end of March or early April”. Chinese state-owned conglomerate Citic Group, which owns about 60 percent of the telecommunications operator, has already backed the purchase of CTM, he recalled. The Macau Bureau of Telecommunications Regulation told Business Daily earlier this week the firm is yet to submit any documents related to the deals for approval. Only after the shareholders give their blessing will Citic Telecom formally approach the governments of Macau and mainland China, Mr Chan said. However, the executive said the company “remains continuously in communication with the authorities”. CTM was hit by three service blackouts last year but the Citic
Telecom financial officer says the incidents had to influence on the deal, which was closed at a “fair market value”. “It only increased our commitment [to the negotiations]. We believe we can help improve CTM’s services with our focus on integrated connectivity and our technology,” Mr Chan said. The group has pledged to invest in CTM in order “to expand cloud computing applications” and to “develop a 4G network”. The market was surprised by Citic Telecom’s decision to buy out minority shareholder Portugal Telecom along with Cable & Wireless (CWC). “Our first step was to begin negotiations with CWC but later we also offered Portugal Telecom the opportunity to be part of the deal,” the executive revealed. “We would have been happy to continue to work with them but the company made its decision,” he added.
200%
Debt-to-equity ratio of Citic Telecom once CTM purchase is completed
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business daily January 18, 2013
macau Brought to you by
HOSPITALITY Book now The almost continuous growth in the numbers of visitors and, especially, hotel guests has justified and sustained big rises in the numbers of hotels and hotel rooms. Yet hotel occupancy rates have risen, too. With occasional drops, such as in 2005 and 2009, the underlying trend for hotel occupancy rates has been upward since 2004, when the gaming monopoly ended in practice. The figures for the first 11 months of last year suggest that it was another year of falling hotel occupancy rates. The main cause of the falls was probably the opening of several new hotels which may take time to establish themselves in the market.
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Hotel occupancy rates in the first 11 months of last year were about 1.5 percentage points lower than those in 2011, and the occupancy rates of all categories of hotel fell. However, the trend in the longer run seems to be slowly upward. Average hotel occupancy rates in the past three years have been over 80 percent. In previous years they were 70 percent. Three-star and four-star hotels have consistently higher occupancy rates than five-star hotels. The occupancy rates of five-star hotels tend to be close to the average. This is not surprising, given the great size of their share of all hotel rooms. Two-star hotels seem to be the most sensitive to the vagaries of demand and the economic outlook. But their occupancy rates have increased faster than those of other kinds of hotels in recent years. J.I.D.
Four-star hotels have had the highest occupancy rates since 2007
‘Deeper’ HK yuan market entices fiscal reserve As Hong Kong boosts its yuan market liquidity, more Macau investment is expected Vítor Quintã
vitorquinta@macaubusinessdaily.com
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bigger share of the territory’s fiscal reserve could be placed into yuan-denominated products, Macau’s financial regulator said, after its Hong Kong’s counterpart announced new measures to support the growth of its offshore yuan market. The Hong Kong Monetary Authority announced new measures on Tuesday to help meet banks’ needs to manage short-term yuan liquidity. The authority has decided to shorten the notice period required for authorised institutions participating in yuan business to request yuan funds from two business days to one business day, it said in a statement. These institutions may approach the regulator before 12pm local time on any business day for yuan funds, and the funds would be available the next day. The main goal of the Hong Kong institution is to “facilitate them with offshore yuan liquidity within a shorter time period,” a Monetary Authority of Macau (AMCM) spokesperson said. “The move would definitely support the long-term development of the CNH [offshore yuan] market where Macau’s fiscal reserve has also been investing,” the authority praised. “It is of AMCM’s interest, as an investor, to see a deeper and more liquid CNH market in Hong Kong in general,” it said in a written reply to Business Daily. Last month the president of the local Monetary Authority Anselmo Teng Lin Seng said the institution was considering putting more capital from the fiscal reserve into yuandenominated investment vehicles. The goal of placing more investment in both the mainland Chinese market and yuan offshore markets was to get a higher return rate than the reserve is currently achieving, he told legislators.
Better return According to data released last month, Macau’s fiscal reserve earned
The Hong Kong Monetary Authority shortened the period required for banks to request yuan funds
nearly 1.1 billion patacas (US$137.5 million), or 1.1 percent of its initial value, from its establishment in February last year to October. That was well below the 3.1 percent inflation for that ninemonth period. With more capital available for investment, “the yuan-denominated investment already accounted for
The [Hong Kong] move would definitely support the long-term development of the CNH [offshore yuan] market where Macau’s fiscal reserve has also been investing Monetary Authority of Macau
over 25 percent of the total by the end of October,” Mr Teng explained. Hong Kong’s de facto central bank introduced the facility for providing yuan liquidity last June, which makes use of the currency swap arrangement between the association and the People’s Bank of China to get yuan. The facility helps banks better manage their short-term needs of yuan liquidity, given China still has a tight grip over its capital account and the offshore yuan pool is relatively small. However, bankers have been complaining about the two-day notice period mechanism and the high borrowing cost with reference to the onshore weighted-average seven-day bond repurchase rate. The authority also said the assets in yuan currency futures could be used for offsetting against bets on the currency’s future movement in the opposite direction with immediate effect. It first imposed a limit on Hong Kong banks’ bets in the yuan in December 2010, and raised the bet limit from 10 percent to 20 percent last May before allowing authorised institutions to set their own internal bets. With Reuters
January 18, 2013 business daily | 5
MACAU
Govt agreed ‘in principle’ with Studio City casino Approval given back in 2006 but public works officials still to sign off on change of design Vitor Quintã
vitorquinta@macaubusinessdaily.com
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he mystery surrounding whether the recommenced Studio City casino resort scheme on Cotai really has permission for a gambling facility might finally have been resolved. Since July 2011 Lau Si Io, Macau’s Secretary for Public Works and Transport – the department that oversees the casino permission process – has been telling the local media that Studio City didn’t have casino approval. He avoided saying it would never get one. But he did say that the scheme as authorised in 2008 did not contain any “gambling elements”. Yesterday the administration said the casino approval pre-dated that 2008 milestone. The government accepted the introduction of a casino in the Studio City project after a request filed in 2006 by one of the original developers, the authorities revealed in a written reply – released to the public yesterday – sent to legislator Ho Ion Sang. Gaming Inspection and
Studio City site (Photo: Manuel Cardoso)
Coordination Bureau director Manuel Joaquim das Neves said the administration “granted an authorisation in principle” to the introduction of gaming facilities in the Cotai project. In 2006 one of the developers asked for a gaming component to be allowed
on the resort, Mr Neves said in a reply to a September enquiry from Mr Ho. The authorities gave an initial green light “considering that it was a development based on nongaming activities, which matched the government strategy to develop other sectors,” he said.
After gaming operator Melco Crown Entertainment Ltd took over the project from other deadlocked investors in 2011, it submitted a new integrated development plan that included a casino. “The MSAR government kept its previous position” when it received the Melco Crown plan, Mr Neves said in a document dated January 7 but only released yesterday. The gaming operator now has to apply “to the competent body,” the Land, Public Works and Transport Bureau, to change the project design, he said. The request will be analysed taking into account the government’s focus on non-gaming development, as well as the existing legislation and Macau’s urban plans, the official said. A Hong Kong-based gaming analyst told Business Daily yesterday: “Investors were already pricing the Studio City project into Melco Crown’s shares, so I don’t think this changes anything as far as the market is concerned.” Lawrence Ho Yau Lung, cochairman of MCE, said during the firm’s third quarter earnings call in November that most of the pilings and foundations had been completed on Studio City, which it 60 percent owns. He added that a fixed price, lump sum contract had been signed with a main contractor for the above-ground building phase, and it was “on track to open around mid-2015”. MCE said in a regulatory filing in October the total development budget for Studio City is approximately US$2.9 billion, of which US$2.04 billion is construction. With Michael Grimes
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business daily January 18, 2013
macau
Sands China only operator to gain market share in 2013: Citi
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Import trends Imports, broadly speaking, come in four main sorts: consumer goods, materials (including raw materials and semi-manufactured products), fuel and capital goods. How much of each sort we import gives hints about the fundamental forces driving the economy. At face value, the data on imports might temp us to conclude that the economy has been driven by consumption in the past few years.
Sands Cotai Central venue is only one in market adding more hotel rooms this year Michael Grimes
michael.grimes@macaubusinessdaily.com
Sands Cotai Central – more tables and hotel rooms to come
However, the first definite conclusion we can draw is that imports have increased considerably. At current prices, imports last year will probably turn out to have been worth roughly 2.5 times imports in 2004. But the inflows of the four main sorts of imports between 2004 and last year varied. Imports of materials contracted significantly, to about two-thirds of what they were. The contraction signifies the decline of manufacturing here. Imports of fuel rose by 3.6 times. Growth in the population and, especially, growth in the number of visitors have driven up the consumption of energy in general and increased the energy intensity of the economy. Imports of capital goods broadly follow economic cycles and correspond to what you would expect from the flows of investment. Imports of consumer goods are the big surprise. They rose by 3.9 times, more than doubling in the past three years alone. They suggest an enormous rise in consumption by residents, reflecting amazing consumer indulgence. But consumption data do not support this inference. Most imports of consumer goods were re-exported. J.I.D. The content of this column is the work of Business Daily’s journalists.
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Average annual rise in consumer goods imports since 2009
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itigroup Inc., a bank, forecasts that Sands China Ltd is going to be the only casino operator in Macau to see its gaming revenue market share rise in 2013. The bank expects Sands China’s share to increase by three percentage points, to 22 percent, as Sands Cotai Central experiences its first full year of operations. It would mean Sands China closing the gap on SJM Holdings Ltd, the successor company to Stanley Ho Hung Sun’s former casino monopoly STDM and the market leader by gaming revenue share since market liberalisation in 2002. Sands Cotai Central’s first phase launched in April 2012 and a second in September. Perhaps most importantly, Phase IIB of the venue, due this year, will mean Sands China is the only casino concessionaire in Macau to add to its hotel inventory during 2013. The firm said in its 2012 interim report that Phase IIB will open “in early 2013” comprising a new hotel tower featuring 2,067 additional Sheraton-branded hotel rooms and suites. “We expect to invest a further US$670 million to complete phase II,” added the company. The total capital cost for Sands Cotai Central is expected to be US$5 billion (40 billion patacas), said Sheldon Adelson, chairman of the parent company Las Vegas Sands Corp. last April. The property is due to have a Phase III featuring a tower with a St Regis-
branded hotel, to be built “as demand and market conditions warrant it,” says Sands China.
Big winner According to Citigroup, Sands China was already one of the two biggest market share gainers in 2012, alongside Galaxy Entertainment Group Ltd. Both operators had a 19-percent stake last year, both up by three percentage points in comparison to 2011. Most importantly in terms of revenue growth for 2013, Sands China is expected to get 200 newto-market gaming tables “some time during the first quarter,” said David Sisk, executive vice president and chief operating officer of Sands China, last week. These are tables Sands China would have liked to get four months ago, when Pacifica – the second casino at Sands Cotai Central – opened its doors. It meant Sands China had to reshuffle its existing table inventory from its other properties to populate Pacifica. It didn’t get the extra tables in September 2012 because the government was publicly committed to a 5,500-table cap on live dealer gambling tables for the Macau market until the end of 2012. That constraint is now eased, because ‘Table Cap 2.0’ came into effect from January. This anticipates three percent annual compound growth in live table numbers until 2023.
When Galaxy Entertainment opened the first phase of its HK$16.5 billion Galaxy Macau resort on Cotai in May 2011 – the only major opening that year – the company went from an April market share of nine percentage points of gross gaming revenue, to almost 19 percent that July, putting it at that time in second place in the revenue rankings, Business Daily’s sister publication Macau Business magazine reported in August 2011.
Policy shift But there are signs that other operators might get some modest increase in table numbers, possibly this year – even without opening new properties. “The government has the room to assign further tables to recentlyopened casino-resorts where large investment is made and which fit its non-gaming development focus,” said Francis Tam Pak Yuen, Secretary for Economy and Finance – and the man in charge of formulating and implementing the table cap policy – last week. Within days of that statement, Angela Leong On Kei, an executive director of SJM Holdings, told reporters SJM would apply to the government for more table allocation this year for its existing properties. She added the company – which received in October its land concession for a Cotai project but has not yet had it gazetted – “are feeling left behind more or less” regarding Cotai.
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January 18, 2013 business daily | 7
MACAU
Green group wants fewer cars on road More measures are needed to cut the number of motor vehicles and stop the quality of the air from worsening, says a group of environmentalists Tony Lai
tony.lai@macaubusinessdaily.com
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n environmental protection group says the government should control the number of motor vehicles to improve air quality, rather than just offer subsidies. Air pollution has worsened this year, particularly near main roads and in residential areas of the peninsula, data from the Macau Meteorological and Geophysical Bureau indicate. In the first 16 days of this month the daily air quality index on the city’s roadsides averaged 112.1 points and the daily air quality index on the peninsula averaged 96.1. Last year the daily air quality index on the city’s roadsides averaged 54.8 and the daily air quality index on the peninsula averaged 40.9. Air quality is considered bad when the index exceeds 100. On Wednesday it reached 133 on the city’s roadsides. The bureau’s website warned of a high concentration of PM2.5, tiny airborne particulates that pose the biggest threat to health. Dense smog in Beijing this week posed a similar threat there. The peninsula has had seven days of bad air quality so far this year. It had eight days of bad air quality in the whole of last year. The bureau said the poorer air in recent days was due to the accumulation of air pollutants caused by dry weather and weak wind. The vice-president of the Macau Ecological Society, Joe Chan Chon Meng, said the poor air quality this month was due to pollution drifting in from mainland China. The Reuters news agency quoted the Chinese government as saying that the air quality in Beijing last weekend was the worst on record and that residents of the capital should stay indoors. The Macau bureau expects the air quality in the territory would only get better starting on January 20. “The main source for air pollution here – and even the government has admitted it – is pollutants emitted by vehicles,” said Mr Chan.
Air pollution has increased very much in the past few years, the increase in casino coaches and buses and the surge in the number of private cars – without any control – being responsible Joe Chan Chon Meng, vice-president of the Macau Ecological Society
There were over 216,000 licensed motor vehicles in Macau at the end of November
“Air pollution has increased very much in the past few years, the increase in casino coaches and buses and the surge in the number of private cars – without any control – being responsible,” he said.
Growth cap demand According to official data, Macau had over 216,000 licensed motor vehicles at the end of November, 5.2 percent more than a year before. “The government should quickly release a long-term plan for vehicle control, accompanied by incentives to encourage people to buy greener cars,” Mr Chan said.
He said tax breaks on the purchase of new, environment-friendly motor vehicles last year had simply increased the number of vehicles of all kinds on the road, as many owners still kept their older and more polluting vehicles. Buyers of new vehicles that meet certain emission standards paid up to 50 percent less tax on their purchases last year, the maximum reduction being 60,000 patacas (US$7,500). In its policy address for this year, delivered in November, the government said it would provide subsidies of up to 400 million patacas for the phasing-out of polluting vehicles.
Business Daily asked the Environmental Protection Bureau when the subsidy scheme would be introduced, but the bureau had not replied by the time we went to press. Mr Chan suggests that the government cap annual growth in the number of vehicles. The Transport Bureau said last month it would consult the public in the first quarter of this year about measures for controlling the number of motor vehicles. One aim of the government’s land traffic and transport policy, adopted in 2011, is to limit annual growth in the number of private vehicles to less than 4 percent by 2020.
No need for associations to publish accounts: watchdog
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he Commission Against Corruption says the current mechanisms the government uses to monitor how the associations use public subsidies are “more extensive” that what the New Macau Association was asking for. The pan-democrats asked the watchdog last September to look into why the administration was yet to enforce a 1999 law requiring all associations receiving a certain amount of subsidies from public bodies to publicise their annual accounts. A commission’s reply dated last
November – but only released by the New Macau Association yesterday – said the administration was already supervising the usage of subsidies and the associations’ finances via a dispatch in 1997. The dispatch requires the administration to publish a list of entities receiving subsidies from public bodies – including the date, usage and amount – four times a year. Commissioner Vasco Fong Man Chong wrote that the latter dispatch is “more extensive” with “more supervising powers”. The watchdog criticised the law in
1999 for being “unclear,” not stating clearly whether the associations had to publish the complete financial statement or only the part related to the subsidy. Jason Chao Teng Hei, president of the New Macau Association, said he was “shocked” with the watchdog’s reply, adding the law very clearly stated the associations must make public their entire annual accounts. He urged the watchdog to rectify what he called a misinterpretation of the law and called on “real action” from the government. T.L.
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business daily January 18, 2013
GREATER CHINA Shares post second day of losses Mainland Chinese shares posted a second straight day of losses, slipping further from Tuesday’s high, with growth-sensitive counters leading the slide ahead of a slew of major Chinese economic data due today. The CSI300 of the top Shanghai and Shenzhen listings closed down 0.9 percent at 2,552.8 yesterday. The Shanghai Composite Index shed 1.1 percent. Losses over the last two days about halved gains from earlier this week. Hong Kong shares also slipped to a third-straight loss yesterday as investors took profits on growthsensitive counters. The Hang Seng Index closed down 0.1 percent at 23,339.8 points.
Economy to rebound as govt backs infrastructure But growth may fade in the second half as the boost from infrastructure investment ebbs
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hina’s economy is set to exit a seven-quarter slowdown as the government rolls out infrastructure projects and limited inflation lets officials hold off from tightening monetary policy. The National Bureau of Statistics is expected to report today that gross domestic product expanded 7.8 percent in the fourth quarter from a year earlier, according to the median estimate of 53 economists surveyed by Bloomberg News. That’s up from a three-year low of 7.4 percent in the previous period. The risk is that the rebound may fade in the second half as the boost from railways and road projects ebbs and the government grapples with rising inflation and the expansion of shadow banking. China will also sharply increase planned railway investment in 2013 to more than US$100 billion, state media cited the railways minister as saying yesterday, as part of plans to boost the economy. The Ministry of Railways will spend 650 billion yuan (US$104 billion) this year, the Xinhua news agency said, citing minister Sheng Guangzu. While the nation is set to reverse its slide in economic growth, the pace remains short of the 10 percent average of the past two decades as higher wages and weakness in global demand limit export gains. “The current recovery is being driven mostly by monetary and fiscal policy easing,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong. “Once the momentum of policy easing slows, growth may trend down again.”
Investment pace Today’s report will also include the latest monthly data. Factory output probably rose 10.2 percent in December from a year earlier, up from 10.1 percent in November, while retail sales advanced 15.1 percent after a 14.9 percent gain the prior month, according to median analyst estimates.
Railway – govt to sharply increase planned investment
loans had a greater-than-estimated drop. A broader measure of financing surged 28 percent, highlighting the economic rebound’s increasing dependence on non-bank credit that may add risks. “The recovery so far is led by accelerating public investment and stronger exports to Asian countries,” said Joy Yang, chief Greater China economist at Mirae Asset Securities (HK) Ltd, a former IMF researcher. “However, we have not seen clear signs of recovery in the private sector and in addition, consumption this year will likely be capped by slower wage growth and rising unemployment pressures.” The central bank has paused from its monetary easing since July after two interest-rate cuts and three reductions in lenders’ reserve requirements starting in November 2011. At the same time, the government has accelerated investment-project approvals, trimmed fees for exporters and increased spending on infrastructure. Economists are split on whether China will ease monetary policy this year as the ruling Communist Party completes a once- a-decade leadership transition. While 12 of 19 analysts surveyed last month forecast a cut in banks’ reserve requirements, 13 of 28 see no change in the benchmark lending rate, with nine projecting an increase and six seeing a reduction. Full-year expansion in 2012 was probably 7.7 percent, the weakest since 1999, and may pick up to 8.1 percent this year before slowing to 8 percent in 2014, based on analyst forecasts. Bloomberg News/AFP
Fixed-asset investment excluding rural areas may have increased 20.7 percent for the full year, based on economist forecasts, the same pace as in the first 11 months of 2012. Improving investor confidence in China’s outlook has lifted mainland stocks and the currency. The Shanghai Composite Index, the nation’s benchmark gauge, had advanced 18 percent as of yesterday from an almost four-year low on December 3. The yuan traded this week at a 19-year high against the dollar. Societe Generale SA is turning more optimistic for the next six months. Yao Wei, the bank’s Hong Kong-based China economist, raised her firstquarter growth estimate to 8.2 percent from 7.8 percent and second-quarter forecast to 7.9 percent from 7.5 percent, according to a report yesterday. “The degree of improvement in almost all the major growth data from China in the past few weeks exceeded
our initial expectations,” said Ms Yao, ranked by Bloomberg as the most accurate forecaster for quarterly GDP. At the same time, Ms Yao said she expects the momentum to fade in the second half, with growth slowing to 7.4 percent in the fourth quarter.
‘More cautious’ Nomura’s Mr Zhang sees the recovery ebbing to a greater degree, projecting expansion of 7.3 percent in the second half after 8.1 percent in the first half. The central bank may raise interest rates twice in the second half to limit inflation, said Mr Zhang, who previously worked for the International Monetary Fund. “Policy will turn gradually from the current very loose stance to a more cautious one,” he said. Inflation accelerated more than forecast to 2.5 percent in December, statistics bureau data showed on January 11, while new local-currency
The current recovery is being driven mostly by monetary and fiscal policy easing. Once the momentum of policy easing slows, growth may trend down again Zhang Zhiwei, Nomura Holdings Inc.
China leads investment in protecting water supply
T
he annual global investment in forests, wetlands and other ecosystems that help keep human water supplies clean jumped by a third over four years to more than US$8 billion, with China accounting for about 90 percent of that, according to a report released yesterday. China accounted for more than US$7.46 billion of spending in 2011 on natural water protection, known
as watershed payments, according to Forest Trends’ Ecosystem Marketplace, a Washington, D.C.based environmental advocacy group. U.S. investment that year was US$360.5 million. Other projects were mounted by beverage companies in Uganda and France, focusing on environmental protection of the water sources that fuel their businesses, the report said.
These projects are considered separate from conventional investments in dams, pumps, treatment plants or pipelines to move water from one place to another, according to report author Genevieve Bennett, a researcher for Forest Trends, which focuses on forest and water conservation. Most times, Ms Bennett said that investing in what she called natural water infrastructure is far cheaper,
adding that the value is likely to increase as the world’s supply of clean water becomes scarcer. The Organization for Economic Cooperation and Development estimates world investment in water infrastructure will reach $1 trillion by 2025. Current spending is around US$80 billion, 10 times the total natural infrastructure investment for 2011. Reuters
January 18, 2013 business daily | 9
GREATER CHINA TSMC Q4 profit jumps 32 pct Taiwan Semiconductor Manufacturing Co., the world’s largest contract manufacturer of chips, boosted fourth-quarter profit 32 percent helped by rising global sales of smartphones and tablet computers. Net income climbed to NT$41.6 billion (US$1.4 billion) from NT$31.6 billion a year earlier, the company said in a statement yesterday. Sales were at the top of TSMC’s guidance as new Apple Inc., Samsung Electronics Co. and HTC Corp. devices spurred demand for chips. This year, revenue may rise as much as 20 percent and the chipmaker plans a record US$9 billion of capital expenditure because of long-term growth.
Chinalco Mining Stock regulator strikes right note, plans IPO to fund copper project analysts say Shares scheduled to start trading on January 31
Retail investors seen returning to the market
Fox Hu and Michelle Yun
alone on signs that China’s economy was regaining traction. While foreign money still only accounts for around 1.5 percent of the overall mainland China equity market, the psychological impact that QFII money has had on local investors over the past months is significant. “QFIIs with fresh quotas came in and started buying blue chips such as banking shares, which were really cheap at the time,” said Jin Lin, analyst at Orient Securities, referring to the Qualified Foreign Institutional Investors. “That triggered renewed interest from domestic funds.”
Increasing quotas
CSRC chairman, Guo Shuqing
C
hina’s top securities regulator, who has for months been trying to revive the domestic stock market, is finally hitting a sweet spot among local investors by playing to their traditional investment mentality. Retail investors, who make up the bulk of the Chinese domestic market, have never favoured bargain-hunting at or near the bottom of a cycle. But they are starting to return to the market after foreign money scooped up shares, specifically blue-chips, in record amount last year. On Monday, Guo Shuqing, the chairman of the China Securities Regulatory Commission (CSRC), stoked expectations that authorities will continue to rapidly open up the main channels for overseas fund inflows, further lifting market sentiment. “This is a huge boost to market confidence,” retail investor Qi Junjie said in his microblog. “Foreign troops are finally coming to liberalise China’s stock market.” Mr Guo told a forum on Monday that quotas for so-called Qualified Foreign Institutional Investor (QFII) and the local-currency denominated Renminbi Qualified Foreign Institutional Investor (QFII) schemes could increase by 10-fold, although he did not specify a time frame. Mainland China shares hit 7-1/2 month highs on Tuesday, with the CSI300 index of the top Shanghai and Shenzhen A-shares surging more than 20 percent since early December
Over the past year, Mr Guo made numerous attempts to breathe life into the stock market, which has fallen for two of the past three years. Regulators have slashed trading taxes, urged companies to pay cash dividends and repeatedly said that China’s blue-chip stocks were undervalued and worth investing in. Bu t i n v es to r s h a d tu r n ed a deaf ear until late last year when authorities drastically expanded the QFII scheme, handing out a record US$66.3 million in quotas in the October-December quarter. A 10-fold increase to the QFII and the RQFII schemes would translate to over US$400 billion in new funds flowing into the market, currently worth US$3.83 trillion, a very likely possibility, said Howhow Zhang, analyst at fund consultancy Z-Ben Advisors. “If you look at other emerging markets such as India, Brazil and Russia, foreign participation is between 10 percent and 20 percent. In China, the current quota is tiny, so a 10-fold increase is not an exaggeration,” he said. The current situation draws many parallels with the lead up in events to the bull run of 2005/06 although many analysts say the current rally is unlikely to be as big as the previous one when it rose by 6-folds. “The situation at the time was very similar. The market was heading south. Many policies came out, but didn’t work,” Zhan Long, CEO of Bank of Communications Schroeder Fund Management Co, told a forum recently. “Then, QFIIs came in and made a lot of money. People later began asking why regulators allowed foreigners to buy at the bottom. The answer is that Chinese money didn’t want to buy stocks at the bottom.” Reuters
C
hinalco Mining Corporation International, a unit of China’s biggest aluminium producer, plans to raise as much as US$435 million in an initial public offering in Hong Kong to fund its copper project in Peru. The company is offering 1.76 billion shares at between HK$1.52 and HK$1.91 each, according to the term sheet obtained by Bloomberg News. Five cornerstone investors including Rio Tinto Group and Trafigura Beheer BV agreed to buy a total of US$240 million of shares, the terms show. Chinalco Mining, owned by Beijing-based Aluminum Corp. of China, plans to use about 30 percent of the proceeds to develop the US$2.2 billion Toromocho project. Copper consumption in China, the biggest buyer, will expand 4.9 percent this year, following a 4 percent gain in 2012, led by demand for household appliances, according to China International Capital Corp. Trafigura will invest US$100 million, while Rio Tinto and Louis Dreyfus Commodities Group will each invest US$30 million. BNP Paribas SA, China International and Morgan Stanley are managing the sale. The copper miner is selling a 15 percent stake in the IPO. It had planned to raise US$800 million to US$1 billion in a share sale last year, two people with knowledge of the matter said at the time. It received approval from Hong Kong’s bourse last May for the offering, they said. The remaining proceeds will be
used for working capital, to help repay loans and for acquisitions of non-ferrous and non-aluminium mines, according to the term sheet. The shares are scheduled to be priced on January 24 and start trading on January 31. Aluminum Corp., known as Chinalco, is investing in copper, coal, iron ore and rare earths as overcapacity and rising power costs shrink profit margins from aluminium smelting. It tried to buy stakes in coal producers in Mongolia last year but was unable to get regulatory approvals from the nation’s government. Chinalco acquired the Toromocho project in 2007 when it purchased Canadian company Peru Copper Inc. Once in production, it should produce 1 million metric tons of copper concentrate, 10,000 tons of molybdenum and 4 million ounces of silver oxide a year, according to its website. Bloomberg News
US$435 million
Value of Chinalco’s planned IPO in Hong Kong
Peru – company seeks funds to develop the Toromocho project
10 |
business daily January 18, 2013
ASIA Sri Lanka holds rates to slow price gains Sri Lanka left interest rates unchanged to damp price gains and bolster economic growth. The Central Bank of Sri Lanka kept its reverse repurchase rate at 9.5 percent and the repurchase rate at 7.5 percent, it said in a statement in Colombo yesterday. Governor Ajith Nivard Cabraal said on January 2 that Sri Lanka’s central bank will strive to contain price pressures while bolstering economic growth this year. Mr Cabraal on December 12 unexpectedly lowered borrowing costs for the first time since 2011, after two rate increases in 2012.
Singapore curbs to cut industrial property sales As government tries to discourage short-term speculative activity Pooja Thakur
S
ingapore’s industrial building sales may drop 10 percent this year after the city became the first in Asia to impose curbs on such properties, according to the world’s largest closely held commercial real estate broker. The government on January 11 imposed as much as 15 percent in stamp duties on sellers of properties such as warehouses and logistics buildings to curb speculation after prices doubled in the past three years and outpaced the increase in rents. “We foresee a substantial shortterm impact on the industrial segment,” Priyaranjan Kumar, the Singapore-based regional director of capital markets at Cushman & Wakefield Inc., said. “Measures targeting the industrial sector are appropriate given very vocal concerns by local small and medium scale
industries of being increasingly priced out of the market.” Ranked by the World Bank as the easiest place to do business for a seventh year, Singapore’s grappling with rising costs that pushed its inflation to among the highest in the developed world. The government said this week land and labour limits will “increasingly constrain” its economic expansion. “Industrial property prices have seen one of the fastest increases in 2012 and the capital values were moving much ahead of the rentals,” said Vijay Natarajan, an analyst at UOB-Kay Hian Pte in Singapore. “The government has to retain its advantage of the cost of setting up business in Singapore and if that keeps escalating, then it’s a problem for the attractiveness of Singapore as a business hub.”
The maximum tax rate will apply to sellers of warehouses and factories after one year, with the rate falling to 10 percent in the second year and 5 percent in the third, the government said. The new rules were effective as of January 12.
Most severe The government also added new levies on homebuyers last week after residential prices and sales climbed to a record in 2012. Low interest rates and measures on residential properties prompted some investors to shift their focus to higher-yielding warehouses and logistics assets, according to Cushman & Wakefield. Industrial space returned 6.25 percent to 7.5 percent, exceeding the 4 percent for apartments and 5 percent for offices,
according to the New York-based property brokerage. “The recent measures will most likely lead to increased activity for office and retail strata sales,” Jeremy Lake, Singapore-based executive director of investment properties at CBRE Group Inc., said in an e-mailed response to queries. “The strong fundamentals which kicked off the office and retail strata sales activity 18 months ago remain intact and positive sentiment is further
Australian employers cut jobs Employment fell 5,500 in December, under forecasts of a flat outcome
A
ustralian employment fell unexpectedly in December, nudging the jobless rate up to 5.4 percent and pushing the local dollar down as the market narrowed the odds of further cuts in interest rates in coming months. The local dollar lost a quarter of a U.S. cent after the Australian Bureau of Statistics reported 5,500 net jobs were lost in December. That undershot forecasts of a flat outcome, though the previous month was revised up to show an increase of 17,100. All the losses came in fulltime employment which dropped 13,800 in December. Analysts suspect the jobless rate will continue to creep higher from here given sluggish domestic demand and the pressures of a historically high currency. “It keeps rate cuts alive,” said Matthew Johnson, interest rate strategist at UBS AG. “You’d think
the unemployment rate would be a bit higher, but it does seem fairly certain that the labour market is slackening.” The market is pricing in at least one more easing in rates following the Reserve Bank of Australia’s (RBA) cut to a record-matching low of 3 percent back in December. The RBA has forecast that unemployment would only rise “a little further” in coming months. Many analysts see a risk it could increase steadily toward 6 percent as a boom in mining investment begins to plateau later this year. Even after the dip in December, annual growth in employment still picked up to 1.3 percent, from 1.1 percent in November, bringing it nearer the historical trend of around 1.6 percent. Figures on the breakdown by industry for the year to November showed the public sector had been the biggest shedder of labour, losing
Australia employment slips in December, jobless up
39,000 positions as the Federal and State governments tightened to rein in budget deficits. The construction sector had also been hit by a subdued housing market, though there was a promising uptick in employment late in the year. Employment did turn up in both retailing and accommodation and
restaurants, two sectors that had been pressured by a high local currency and intense competition. Healthcare had another strong year and, with 1.37 million workers, is the single biggest employer. The sector is expected to only grow larger as Australia’s population ages. Reuters
January 18, 2013 business daily | 11
ASIA Renesas to eliminate additional jobs Renesas Electronics Corp., the ailing Japanese chipmaker, plans to cut more than 3,000 additional jobs as it prepares to raise at least 150 billion yen (US$1.7 billion) from a government-backed fund and customers. Renesas began talks with labour unions yesterday and plans to eliminate the positions through buyouts by September 30, the Kawasaki-based company said in a statement. No upper limit for buyout applications has been set, and the impact on earnings hasn’t been determined, Renesas said. The reduction adds to about 7,500 positions cut through a buyout programme in October.
Exports drop most in 14 months
Industrial building sales may drop 10 pct this year – estate broker
supporting the market now.” Almost 98 percent of sellers of strata factories made an average profit of 47 percent or S$263,000 (US$215,000), according to London-based property brokerage Savills Plc. Industrial properties bought in 2012 and sold in the same year generated a 15 percent return, it said in a report sent on Tuesday. Strata title refers to ownership of a building that’s subdivided with shared areas.
Transaction volumes will decline 10 percent this year because speculators are being driven out of the market, Boon-Leong Tan, executive director at broker Colliers International, said earlier this week. The number of industrial strata title transactions climbed 78 percent to 3,460 last year, according to data from Seattle-based Colliers, while the value of the sales more than doubled to S$3.3 billion.
A
ustralia’s competition watchdog yesterday gave Qantas Airways Ltd and Emirates Airlines permission to launch their global alliance although final approval is still pending. The Australian Competition and Consumer Commission, which gave the carriers preliminary approval in December to combine operations for an initial five years, said that practical sales, marketing and other steps could now start. “The ACCC is allowing Qantas and Emirates to start implementing their alliance because of the long lead time required to market and sell tickets before the commencement of long-haul services,” said ACCC chairman Rod Sims. “In making its decision, the ACCC has accepted written assurances from
the parties that should the ACCC ultimately decide not to allow the alliance to go ahead, the airlines will accommodate consumers’ bookings.” The regulator said it anticipated making a final decision in March. Under the proposal, which will be fully implemented from April, the airlines will coordinate ticket prices and flight schedules and Qantas will shift its hub for European flights to Dubai from Singapore. It also means an end to Qantas’s partnership with British Airways on the so-called kangaroo route to London, which has spanned nearly two decades. The tie-up is seen as vital to the sustainability of Qantas, which last year posted its first annual deficit since privatisation in 1995 due to tough regional competition and high fuel costs for its international arm. Mr Sims said the ACCC had determined in December that “the public benefits resulting from the alliance are likely to outweigh the public detriment ... where Qantas and Emirates offer overlapping services”. But he said New Zealand had
Record fine for environmental accidents in the country
A
been identified as a key market where competition could be eroded by the Qantas-Emirates deal and the ACCC had therefore exempted it from the new permissions for now. “The ACCC is granting interim authorisation on the condition that the applicants do not engage in the conduct for which authorisation is sought in relation to services between Australia and New Zealand,” Mr Sims said. He added that the regulator “may review its decision on interim authorisation at any time and it should not be taken to be indicative of whether or not final authorisation will be granted”. Qantas chief Alan Joyce said the decision meant pricing, capacity and scheduling could now be coordinated with Emirates and one-stop trips could be booked across their combined networks, boosting tourism. Once final approval is granted, Qantas will fly daily Airbus A380 services from Sydney and Melbourne to London via Dubai, meaning that the two airlines will operate 98 weekly services between Australia and the Emirates Gulf hub. For Emirates customers, the alliance opens up Qantas’s Australian domestic network of more than 50 destinations and nearly 5,000 flights per week.
South Korean court has ordered a US$694-million compensation payout to victims of the country’s worst oil spill, which fouled miles of coastland in 2007, decimating local fishing and tourism industries. “This is the first estimate of the damage officially made by the court. It is the first big step towards compensating those affected by the oil leak,” court spokesman Choi Noo-Lim told AFP yesterday. The spill occurred when a Samsung Heavy Industries Co Ltd barge carrying a construction crane broke free and rammed an anchored Hong Kong-registered supertanker, which subsequently leaked 10,900 tonnes of crude oil. Miles of beaches, notably in Taean county about 110 kilometres (70 miles) southwest of Seoul, were smothered by the spillage. The accident devastated the region’s once-vibrant fishing and tourism industries, leading to a number of suicides by local residents as a legal wrangle over who qualified for compensation dragged on for years. The court in the city of Daejeon set the total damage to area residents and businesses at 734.1 billion won (US$694 million). It ordered Hebei Spirit Shipping Co, the owner of the supertanker, to shell out 145.8 billion won and Samsung Heavy Industries 5.6 billion won. The London-based International Oil Pollution Compensation Funds (IOPC) and the South Korean government are to cover 178.4 billion won and 404.3 billion won, respectively. The payout is a record for environmental accidents in South Korea, but less than 20 percent of the 4.2 trillion won originally sought by some 120,000 affected residents and businesses. They have two weeks to file objections to the court’s estimate. “I’m afraid there will be objections by many, many residents whose compensation bids were either reduced or rejected... which will further delay actual payout to victims,” Mr Choi said. The IOPC may also challenge the figure, which is far higher than its own assessment.
AFP
AFP
Bloomberg News
Qantas, Emirates tie-up takes off Pricing, capacity and scheduling can now start
Singapore’s exports declined the most in 14 months in December as manufacturers shipped fewer electronics and pharmaceuticals, hurting economic recovery. Non-oil domestic exports slid 16.3 percent from a year earlier, after a revised 2.6 percent drop in November, the trade promotion agency said in a statement yesterday. The drop was the most since October 2011, based on previously reported data. Exports rose 0.5 percent in 2012, the worst performance in three years, according to Bloomberg calculations. The decline in shipments in December raises the possibility that the island slid into a recession last quarter, in contrast to preliminary data showing otherwise, Bank of America Corp. economist Chua Hak Bin said. “The ugly export reading raises the specter of recession once again,” Mr Chua said. “There is a high likelihood that industrial production also contracted sharply in December. These are signs that Singapore’s manufacturing is facing hollowing out pressures, especially given the better trade data seen in Northeast Asia and Malaysia.”
S. Korea sets US$694 mln payout for 2007 oil spill
12 |
business daily January 18, 2013
MARKETS Hang SENG INDEX NAME
NAME
DAY %
VOLUME
12.92
0
16145363
12.86
-1.076923
17274659
65.05
0.2311248
2601524
CNOOC LTD
16.02
-0.3731343
52390778
COSCO PAC LTD
12.08
-1.145663
5284593
SWIRE PACIFIC-A
10.88
0
5453282
TENCENT HOLDINGS TINGYI HLDG CO
PRICE
DAY %
VOLUME
29.95
-0.8278146
38305164
CHINA UNICOM HON
ALUMINUM CORP-H
3.85
-3.75
27422540
CITIC PACIFIC
BANK OF CHINA-H
3.68
0.2724796
215773898
CLP HLDGS LTD
AIA GROUP LTD
BANK OF COMMUN-H
PRICE
6.2
-0.4815409
23883825
BANK EAST ASIA
31.15
-0.4792332
1095775
BELLE INTERNATIO
16.98
-2.637615
16926000
ESPRIT HLDGS HANG LUNG PROPER
29.7
-2.14168
5735200
HANG SENG BK
119
0.1683502
940687
BOC HONG KONG HO
25.5
-1.162791
14006023
CATHAY PAC AIR
14.92
-0.665779
3250455
CHEUNG KONG
131.4
0.9992314
6148534
8.56
-1.382488
19601536
CHINA COAL ENE-H CHINA CONST BA-H CHINA LIFE INS-H CHINA MERCHANT CHINA MOBILE
6.53
0
185963212
26.05
-2.434457
45230759
26
-0.3831418
2150189
HENDERSON LAND D
59.15
0.5952381
4109328
HENGAN INTL
73.95
0.5438477
3094037
HONG KG CHINA GS
21.25
0
4946037
149
-0.6004003
5548250
84.95
0.9506833
19415326
HONG KONG EXCHNG HSBC HLDGS PLC
86.65
-1.027984
27867481
HUTCHISON WHAMPO
83.8
-0.5341246
4506453
CHINA OVERSEAS
24.8
0
10997634
IND & COMM BK-H
5.84
0.3436426
229527085
CHINA PETROLEU-H
8.98
-0.5537099
56480849
LI & FUNG LTD
11.86
1.194539
60511169
31.2
-0.6369427
1734721
27.3
1.111111
2973928
CHINA RES LAND
CHINA RES ENTERP
22.55
-1.742919
17763994
NEW WORLD DEV
14.12
-0.1414427
16582549
CHINA RES POWER
19.56
2.839117
6447387
PETROCHINA CO-H
10.92
0
43081543
CHINA SHENHUA-H
32.3
-0.6153846
14134678
MTR CORP
PING AN INSURA-H
68.5
-0.5083515
7709579
NAME
PRICE
DAY %
VOLUME
POWER ASSETS HOL
65.3
-0.2291826
2701297
SANDS CHINA LTD
36.6
1.244813
7838616
15.14
-0.1319261
7575424
126
0.8
8539805
98.25
-0.304414
1517009
267.4
0.0748503
7959056
SINO LAND CO SUN HUNG KAI PRO
WANT WANT CHINA WHARF HLDG
MOVERS
17
21.3
0.4716981
6200150
10.52
1.740812
19832603
64.4
-0.693909
4891026
27
6 23470
INDEX 23339.76 HIGH
23471.67
LOW
23213.76
52W (H) 23515.85938 23210
(L) 18056.4 15-January
17-January
Hang SENG CHINA ENTErPRISE INDEX NAME
PRICE
DAY %
VOLUME
CHINA PACIFIC-H
31.2
-0.3194888
9311220
10710000
CHINA PETROLEU-H
8.98
-0.5537099
-3.75
27422540
CHINA RAIL CN-H
9.26
27.8
-0.1795332
7303500
CHINA RAIL GR-H
3.68
0.2724796
215773898
CHINA SHENHUA-H CHINA TELECOM-H
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.92
-0.7594937
135615862
AIR CHINA LTD-H
7.15
1.131542
ALUMINUM CORP-H
3.85
ANHUI CONCH-H BANK OF CHINA-H
NAME
PRICE
DAY %
VOLUME
YANZHOU COAL-H
13.2
-2.654867
41598228
56480849
ZIJIN MINING-H
3.14
-0.6329114
47296700
-0.5370569
13576390
ZOOMLION HEAVY-H
10.7
-0.1865672
15736665
4.71
-1.875
19393000
ZTE CORP-H
14.62
-2.533333
15117242
32.3
-0.6153846
14134678
6.2
-0.4815409
23883825
4.38
0.6896552
42573091
BYD CO LTD-H
25.7
-4.460967
3920408
DONGFENG MOTOR-H
12.38
-1.433121
12998336
CHINA CITIC BK-H
5.03
-0.5928854
21504716
GUANGZHOU AUTO-H
7.18
-0.9655172
10482336
CHINA COAL ENE-H
8.56
-1.382488
19601536
HUANENG POWER-H
6.92
1.317716
11808000
CHINA COM CONS-H
7.73
0.3896104
8745251
IND & COMM BK-H
5.84
0.3436426
229527085
CHINA CONST BA-H
6.53
0
185963212
JIANGXI COPPER-H
21.1
0
5174510
BANK OF COMMUN-H
4.37
-3.744493
29978575
PETROCHINA CO-H
10.92
0
43081543
26.05
-2.434457
45230759
PICC PROPERTY &
11.76
-1.176471
12035570
CHINA LONGYUAN-H
6.17
-4.192547
14270024
PING AN INSURA-H
68.5
-0.5083515
7709579
CHINA MERCH BK-H
17.98
0.2229654
11002282
SHANDONG WEIG-H
7.59
0
7544000
CHINA COSCO HO-H CHINA LIFE INS-H
CHINA MINSHENG-H
9.98
-0.2
21732828
SINOPHARM-H
24.9
-3.488372
8269822
CHINA NATL BDG-H
11.78
1.202749
21030000
TSINGTAO BREW-H
45.2
0.4444444
2783578
CHINA OILFIELD-H
15.56
-0.1283697
10466000
WEICHAI POWER-H
33.8
-1.601164
2675906
NAME
MOVERS
11
25
4 12060
INDEX 11858.21 HIGH
12056.1
LOW
11774.17
52W (H) 12094.16016 11770
(L) 8987.76 15-January
17-January
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.77
-0.3597122
83781233
CITIC SECURITI-A
13.32
-0.5970149
84813139
SAIC MOTOR-A
16.33
-2.098321
31007378
AIR CHINA LTD-A
5.67
-1.219512
21707091
CSR CORP LTD -A
4.93
-1.792829
49052002
SANY HEAVY INDUS
10.14
-1.265823
30229860
ALUMINUM CORP-A
5.17
-1.335878
23346590
DAQIN RAILWAY -A
7.01
1.741655
43131334
SHANDONG DONG-A
46.85
1.078749
9896820
ANGANG STEEL-A
4.05
-0.4914005
10055497
DATANG INTL PO-A
4.23
2.173913
38553863
SHANDONG GOLD-MI
37.91
-2.016025
19385477
ANHUI CONCH-A
18.15
0.945495
25737017
EVERBRIG SEC -A
13.48
-0.295858
26767038
SHANG PHARM -A
12.12
-0.4926108
9698163
BANK OF BEIJIN-A
9.03
-0.7692308
28768894
GD POWER DEVEL-A
2.68
2.290076
129818526
SHANG PUDONG-A
10.03
-0.8893281
116672023
NAME
NAME
NAME
BANK OF CHINA-A
2.95
0
21151659
GEMDALE CORP-A
6.81
0.1470588
54610650
SHANGHAI ELECT-A
4.17
-1.882353
8326785
BANK OF COMMUN-A
4.89
-1.41129
86679300
GF SECURITIES-A
14.97
0.672495
43563564
SHANXI LU'AN -A
21.87
-2.713523
14371933
BAOSHAN IRON & S
4.96
-1.39165
27109568
GREE ELECTRIC
26.6
-0.1126549
14588645
SHANXI XINGHUA-A
41.32
0.4863813
3080182
32287721
GUANGHUI ENERG-A
17.72
-2.422907
40506356
SHANXI XISHAN-A
13.75
-1.715511
13858632 38907267
BBMG CORPORATI-A
7.58
1.066667
22.29
-5.550847
7552230
HAITONG SECURI-A
10.02
-0.3976143
51616094
SHENZEN OVERSE-A
7.05
-0.9831461
CHINA CITIC BK-A
4.24
-0.9345794
15672044
HANGZHOU HIKVI-A
33.95
0
6379357
SICHUAN KELUN-A
66.18
3.212726
2941888
CHINA CNR CORP-A
4.56
-1.511879
35773839
HENAN SHUAN-A
66.68
0.2857573
2647747
SUNING APPLIAN-A
7.38
-1.992032
58740771
CHINA COAL ENE-A
7.78
-1.518987
15530095
HONG YUAN SEC-A
18.56
-0.2686728
19570198
TSINGTAO BREW-A
33.52
-0.02982404
4364576
CHINA CONST BA-A
4.61
-1.284797
50109093
HUATAI SECURIT-A
9.4
0
26195680
WEICHAI POWER-A
24.04
-1.997554
9505657
BYD CO LTD -A
CHINA COSCO HO-A
4.44
0.4524887
29367813
HUAXIA BANK CO
10.36
0.4849661
26747111
WULIANGYE YIBIN
28.1
-0.03557453
27839565
CHINA CSSC HOL-A
23.51
-8.271557
30780832
IND & COMM BK-A
4.19
-1.873536
58656901
YANGQUAN COAL -A
14.09
-0.983837
19259586
CHINA EAST AIR-A
3.51
-1.680672
20712163
INDUSTRIAL BAN-A
17.04
0.3533569
94651000
YANTAI WANHUA-A
15.82
-1.186758
9576376
CHINA EVERBRIG-A
2.99
-0.6644518
94598119
INNER MONG BAO-A
35.73
-3.013029
44429865
YANZHOU COAL-A
17.98
-1.962923
6387464
CHINA INTL MAR-A
12.68
-1.857585
10469999
INNER MONG YIL-A
25.87
-0.0772499
15819431
YUNNAN BAIYAO-A
73
1.388889
2185088
CHINA LIFE INS-A
20.52
-2.978723
24141815
INNER MONGOLIA-A
5.55
0.3616637
118757432
ZHONGJIN GOLD
16.53
-2.189349
31987598
CHINA MERCH BK-A
13.22
-2.218935
117049830
JIANGSU HENGRU-A
31.24
1.461513
5505151
ZIJIN MINING-A
3.84
-1.790281
62731331
14235803
JIANGSU YANGHE-A
98.18
-0.3248731
3154400
ZOOMLION HEAVY-A
8.96
-0.7751938
33358069
JIANGXI COPPER-A
24.55
-2.618009
14826083
10.15
-1.837524
26339668
JINDUICHENG -A
12.81
-1.989288
71010634
CHINA MERCHANT-A
29.2
0.7939247
CHINA MERCHANT-A
10.23
0.887574
19574388
CHINA MINSHENG-A
8.45
-1.053864
120526519
7.57
-1.045752
29423410
JIZHONG ENERGY-A
15.24
0.06565988
22760094
16.16
-1.703163
9366413
KANGMEI PHARMA-A
15.03
1.280323
44996074
205.13
-0.4223301
3620185
CHINA NATIONAL-A CHINA OILFIELD-A
21.79
-3.026257
16975480
KWEICHOW MOUTA-A
CHINA PETROLEU-A
6.76
-1.886792
62679112
LUZHOU LAOJIAO-A
35.32
0.1133787
8472697
CHINA RAILWAY-A
6.11
-1.451613
19936485
METALLURGICAL-A
2.23
-0.8888889
30897386
CHINA RAILWAY-A
3.23
-1.823708
33407645
NINGBO PORT CO-A
2.53
-0.7843137
18511121
14673397
PANGANG GROUP -A
3.98
-2.689487
81185611
8.91
-0.6688963
CHINA PACIFIC-A
CHINA SHENHUA-A
24.29
-0.9783938
ZTE CORP-A
MOVERS
66
10 2610
INDEX 2552.758
5
-4.580153
92395829
PETROCHINA CO-A
16353525
HIGH
2601.99
CHINA SOUTHERN-A
4.05
-0.4914005
39787183
PING AN BANK-A
17.74
-0.4489338
67577208
LOW
2540.43
CHINA STATE -A
3.75
-0.2659574
86605359
PING AN INSURA-A
45.08
-1.893362
24705458
CHINA UNITED-A
3.54
0.2832861
63500932
POLY REAL ESTA-A
13.55
-0.07374631
44775580
CHINA VANKE CO-A
10.12
0
166448824
QINGDAO HAIER-A
13.72
-0.867052
9357115
CHINA YANGTZE-A
7.22
3.290415
60300885
QINGHAI SALT-A
26.75
-1.762762
6237653
PRICE DAY %
Volume
PRICE DAY %
Volume
CHINA SHIPBUIL-A
224
52W (H) 2717.825 2540
(L) 2102.135 15-January
17-January
FTSE TAIWAN 50 INDEX NAME ACER INC
NAME
23.95
-1.440329
16234747
FORMOSA PLASTIC
ADVANCED SEMICON
24.3
-1.818182
16944177
FOXCONN TECHNOLO
ASIA CEMENT CORP
36.2
-1.897019
9757590
ASUSTEK COMPUTER
323.5
0.4658385
AU OPTRONICS COR
11.65 -0.4273504
NAME
PRICE DAY %
Volume
78.8
-0.630517
3746025
TAIWAN MOBILE CO
105
0
85
-2.186421
9705419
TPK HOLDING CO L
453
-1.30719
5273560 5820359
FUBON FINANCIAL
35.2 -0.8450704
25856966
TSMC
99.3
0.1008065
33757293
2363962
HON HAI PRECISIO
83.9 -0.1190476
37829862
UNI-PRESIDENT
51.8
-1.893939
13472792
120247523
HOTAI MOTOR CO
225
-1.746725
438958
UNITED MICROELEC
11.2
-2.608696
52357386
WISTRON CORP
33.5
5.015674
51065657
CATCHER TECH
126
-1.945525
11114384
HTC CORP
279.5
-3.287197
24583585
CATHAY FINANCIAL
31.4
-1.257862
37004300
HUA NAN FINANCIA
16.65
-1.186944
7157070
YUANTA FINANCIAL
14.9
-1.650165
21837361
CHANG HWA BANK
15.75 -0.9433962
11454978
LARGAN PRECISION
719
-2.043597
2489881
YULON MOTOR CO
54.3
-2.862254
4123162
CHENG SHIN RUBBE
73.4 -0.8108108
5621818
LITE-ON TECHNOLO
39.45 -0.1265823
3121940
14.15
-1.736111
166874208
MEDIATEK INC
307 -0.8077544
CHINA DEVELOPMEN
CHIMEI INNOLUX C
7.73
1.576873
186370894
MEGA FINANCIAL H
22.8
-1.298701
19409775
CHINA STEEL CORP
27.5
-1.079137
16829036
NAN YA PLASTICS
58.8
0.5128205
3889563
CHINATRUST FINAN
16.45
-2.083333
73025857
PRESIDENT CHAIN
161.5
0
1344587
63.7
-0.933126
9936661
30.35 -0.9787928
7879161
CHUNGHWA TELECOM
6882801
93.9
0.1066098
7606774
QUANTA COMPUTER
COMPAL ELECTRON
20.25
0.2475248
16914092
SILICONWARE PREC
DELTA ELECT INC
106.5
0.4716981
4425105
SINOPAC FINANCIA
12.6
-2.702703
21318612
FAR EASTERN NEW
32.95
-3.088235
8426629
SYNNEX TECH INTL
59.3
0.5084746
11488360
72.1 -0.2766252
7515663
TAIWAN CEMENT
37.8
-2.952503
9392585
17.45 -0.2857143
15403709
16.35
0
7163121
72.4
-3.208556
6443187
29.75 -0.1677852
1402859
FAR EASTONE TELE FIRST FINANCIAL
TAIWAN COOPERATI
FORMOSA CHEM & F
78
0.2570694
6096037
TAIWAN FERTILIZE
FORMOSA PETROCHE
83.3
0.1201923
1566425
TAIWAN GLASS IND
MOVERS
12
35
3 5435
INDEX 5332.5 HIGH
5432.48
LOW
5323.94
52W (H) 5621.53 5320
(L) 4719.96 15-January
17-January
January 18, 2013 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) 50.9
16.6
50.5
16.5
50.1
16.4
49.7
16.3
32.3
49.3
16.2
37.2
20.8
22.2
32.9
32.7
32.5
37.0
22.1
20.6
36.8
22.0 20.4
36.6
20.2
36.4
Commodities PRICE
DAY %
YTD %
(H) 52W
(L) 52W
WTI CRUDE FUTURE Feb13
94.29
0.053056027
2.690045742
109.4300003
80.05999756
BRENT CRUDE FUTR Mar13
109.86
0.164113786
-0.027300027
118.7999954
90.58999634
GASOLINE RBOB FUT Feb13
272.95
0.29764092
-1.16594851
292.9699898
220.3500032
GAS OIL FUT (ICE) Mar13
946.25
-0.105568752
2.380308358
1026.25
800.5
3.409
-0.756914119
1.730826619
4.090000153
3.049999952
NATURAL GAS FUTR Feb13 HEATING OIL FUTR Feb13 METALS
301.1
0.396785702
-0.686062123
333.4599972
255.6599855
Gold Spot $/Oz
1683.01
0.2406
1.1145
1796.08
1527.21
Silver Spot $/Oz
31.4856
0.7056
4.5686
37.4775
26.1513
Platinum Spot $/Oz
1686.15
0.8885
11.0954
1736
1379.05
722.6
1.9829
3.2787
727.8
553.75
Palladium Spot $/Oz
COUNTRY MAJOR
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
LME ALUMINUM 3MO ($)
2045
-0.341130604
-1.350699469
2361.5
1827.25
LME COPPER 3MO ($)
7946
-0.600450338
0.189131257
8765
7219.5
LME ZINC
1980
-0.751879699
-4.807692308
2220
1745
17400
-0.571428571
1.992966002
22150
15236
15.17
0.132013201
-0.032948929
16.84000015
14.89999962
733
0.239316239
4.976727533
846.25
511
784.25
-0.095541401
0.803341902
948.25
652
1429
-0.522102332
1.383469315
1728.25
1194.5
ARISTOCRAT LEISU
153.15
0.098039216
6.502086231
240.3499908
141.25
CROWN LTD
SUGAR #11 (WORLD) Mar13
18.42
-0.162601626
-5.586878524
25.12999916
18.30999947
AMAX HOLDINGS LT
COTTON NO.2 FUTR Mar13
77.34
0.012931592
2.92786798
98.5
66.84999847
BOC HONG KONG HO
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Mar13 CORN FUTURE
Mar13
WHEAT FUTURE(CBT) Mar13 SOYBEAN FUTURE Mar13 COFFEE 'C' FUTURE Mar13
World Stock MarketS - Indices
PRICE
DAY %
1.0522 1.6023 0.9329 1.3346 88.83 7.9853 7.7526 6.2153 54.2738 29.78 1.2231 28.97 40.623 9650 93.476 1.24503 0.8329 8.272 10.6559 118.55 1.03
-0.2749 -0.1371 -0.3859 0.2629 -0.698 -0.0025 0.0026 0.0499 0.7737 0.2015 0.0409 0.1381 0.1895 0.1865 -0.4301 -0.6393 -0.3962 -0.243 -0.2468 -0.9532 0
YTD %
(H) 52W
1.3876 -0.9458 -1.8759 1.1827 -3.0733 -0.0263 -0.0258 0.2462 1.3288 2.6864 -0.139 0.2175 0.9404 1.4819 -4.4386 -3.016 -2.0987 -0.6588 -1.1778 -4.2008 -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 1.24582 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 29.72 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
PRICE
(H) 52W
(L) 52W
3.32
-0.3003003
DAY % YTD % 5.396822
3.44
2.27
VOLUME CRNCY 1444392
11.95
2.311644
11.99625
12.04
7.97
3417341
0.08
0
14.28571
0.119
0.055
2733000
25.5
-1.162791
5.809127
26.15
19.76
14006023
CENTURY LEGEND
0.29
0
9.433968
0.34
0.215
0
CHEUK NANG HLDGS
6.17
2.66223
3.005012
6.25
2.76
652042
CHINA OVERSEAS
24.8
0
7.359306
25.6
13.625
10997634
CHINESE ESTATES
12.7
-0.78125
-2.905198
13.26
8.3
40500
13
-0.3067485
4.501611
15.16
8.4
1048000
EMPEROR ENTERTAI
2.01
0
6.349207
2.08
0.99
1837143
FUTURE BRIGHT
1.59
0
30.32787
1.6
0.41
1650000
CHOW TAI FOOK JE
NAME
21.8
CURRENCY EXCHANGE RATES
NAME ENERGY
21.9
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
13511.23
-0.1748075
3.106582
13661.87
12035.08984
GALAXY ENTERTAIN
32.5
1.088647
7.084018
33.8
15.4
8603475
NASDAQ COMPOSITE INDEX
US
3117.544
0.2175019
3.246558
3196.932
2721.03
HANG SENG BK
119
0.1683502
0.2527406
120
93.8
940687
FTSE 100 INDEX
GB
6104.63
0.01064879
3.506722
6134.17
5229.76
HOPEWELL HLDGS
32.9
0.6116208
-1.052632
34.4
19.049
812500
DAX INDEX
GE
7674.77
-0.2127126
0.819452
7789.94
5914.43
HSBC HLDGS PLC
84.95
0.9506833
4.489541
85.1
59.8
19415326
NIKKEI 225
JN
10609.64
0.08678885
2.063071
10952.31
8238.96
6332000
HANG SENG INDEX
HK
23339.76
-0.07376807
3.013825
23515.85938
18056.4
CSI 300 INDEX
CH
2552.758
-0.9442426
1.1814
2717.825
TAIWAN TAIEX INDEX
TA
7616.64
-1.088121
-1.076172
8170.72
KOSPI INDEX
SK
1974.27
-0.1608132
-1.140684
2057.28
1758.99
S&P/ASX 200 INDEX
HUTCHISON TELE H
3.49
-0.5698006
-1.966291
3.88
2.98
LUK FOOK HLDGS I
28.85
1.584507
18.23771
33.2
14.7
3524000
MELCO INTL DEVEL
11.6
0.1727116
28.74583
11.84
5.12
22602300
2102.135
MGM CHINA HOLDIN
16.3
-0.8515815
16.26248
16.78
9.989
3151800
6857.35
MIDLAND HOLDINGS
4.15
4.271357
12.16216
5.217
3.249
14050000
NEPTUNE GROUP
0.197
1.025641
29.60527
0.222
0.084
14535000
NEW WORLD DEV
14.12
-0.1414427
17.47088
14.36
7.18
16582549
SANDS CHINA LTD
36.6
1.244813
7.805594
37.8
20.65
7838616
SHUN HO RESOURCE
1.48
0
5.714288
1.5
1.03
0
-1.754386
6.92124
4.65
2.559
17894298 3404147
AU
4756.626
0.3837125
2.316131
4787.2
3985
ID
4398.383
-0.2852211
1.892558
4427.652
3635.283
FTSE Bursa Malaysia KLCI
MA
1681.09
-0.1105202
-0.465377
1699.68
1509.49
SHUN TAK HOLDING
4.48
NZX ALL INDEX
NZ
911.371
0.6252567
3.323836
913.386
718.56
SJM HOLDINGS LTD
20.45
0.245098
13.61111
21.15
12.34
PHILIPPINES ALL SHARE IX
PH
3829.47
0.3274849
3.527729
3857.79
3116
13.8
-1.428571
-1.988636
17.5
13.1
6391357
21.85
0.2293578
4.295939
25.5
14.62
11270402
JAKARTA COMPOSITE INDEX
SMARTONE TELECOM WYNN MACAU LTD
HSBC Dragon 300 Index Singapor
SI
628.34
0.55
1.17
NA
NA
STOCK EXCH OF THAI INDEX
TH
1420.64
0.3177652
2.062601
1432.21
1042.51
HO CHI MINH STOCK INDEX
VN
456.76
-1.824825
10.4005
492.44
357.1
BOC HONG KONG HO
Laos Composite Index
LO
1361.22
3.478631
12.05578
1370.38
880.65
GALAXY ENTERTAIN INTL GAME TECH
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
ASIA ENTERTAINME
4.1
-1.204819
33.98693
7.24
2.4
114246
BALLY TECHNOLOGI
46.47
-0.1289491
3.936482
51.16
40.78
325840
3.36
0
9.446256
3.36
2.56
12500
4.1875
-0.05966587
5.478589
4.37
1.97
14100
14.99
-1.186552
5.786873
17.67
10.92
1773524
JONES LANG LASAL
86.46
0.05786367
3.002141
87.62
61.39
152156
LAS VEGAS SANDS
51.84
-1.4636
12.30503
58.3216
32.6127
6485274
MELCO CROWN-ADR
19.46
-1.766784
15.55819
20.015
9.13
4183482
MGM CHINA HOLDIN
2.03
0
9.729728
2.09
1.2863
955
MGM RESORTS INTE
12.98
-1.292776
11.51202
14.9401
8.83
11172500
SHFL ENTERTAINME
14.25
-1.791868
-1.724138
18.77
11.75
203133
SJM HOLDINGS LTD
2.67
-1.111111
15.58442
2.7
1.6273
7245
122.96
-0.6785137
9.307496
129.6589
84.4902
828232
WYNN RESORTS LTD
AUD HKD
USD
14 |
business daily January 18, 2013
Opinion
Hollande in Mali Dominique Moisi
W
Senior Adviser at the French Institute for International Affairs
hile hundreds of thousands demonstrated in Paris against the right of homosexual couples to marry and adopt children, French troops were arriving in Mali to stop a coalition of Islamist and rebel forces from taking control of its capital, Bamako, and creating in the Sahel a sanctuary for terrorists. These are trying times for French President François Hollande. Besieged economically at home, where his popularity is at its lowest since his election last year, can he regain credibility, if not support, as supreme commander of French forces? Once upon a time, “I intervene, therefore I am” might as well have been a French motto, particularly in Africa. But, while French national identity is intimately bound up with France’s international standing – how it is perceived in the world – enthusiasm for intervention has receded. The benefits have become more dubious, while the costs and risks have grown increasingly evident. If France has again become a regional gendarme by default, it is largely for three reasons. American enthusiasm for intervention in Africa has
greatly diminished since the operation in Somalia in 19921993 – and more globally following the long wars in Iraq and Afghanistan. European interest in military intervention in Africa is as low as ever. And, as for the region’s governments, it would be an understatement to say that they are not yet ready militarily to take their fate into their own hands. While France is not alone – manifestations of support have come from its Western and African partners, as well as from the Middle East – it will bear the primary responsibility and the risks. For Islamic fundamentalists, France is now the “Great Satan”. Indeed, the conflict in Mali is taking place geographically in Africa, but in many ways its causes and ramifications lie in the Middle East. When France intervened in an African country in the past, there was no risk of terrorist attacks on its territory or on its citizens elsewhere in the world. That is no longer the case.
Fragile support It is too early to say what will happen in Mali or the Sahel – or, for that matter, in France itself. For the moment,
the French are standing, overwhelmingly, behind Hollande. They would have criticised him had he remained passive while Bamako fell into the hands of terrorists. Yet this support may be fragile, and could collapse if something goes wrong on the ground – or, worse, in France. Before the intervention, Mali was not a French priority. Rising unemployment at home seemed to be a more urgent task than did addressing instability in Africa. While the French public agrees that Mali cannot be allowed to become a haven for terrorists, the way Afghanistan did in the late 1990’s, attitudes toward intervention have evolved in recent decades. In the early 1980’s, after a particularly bloody terrorist attack on French and American forces in Lebanon, France’s tolerance for military casualties seemed much higher than that of the United States. But this has changed. The French now find themselves on the front line at a time when they have much less appetite for it. Moreover, budget restrictions have severely constrained French military capabilities. French and British military intervention was
successful in Libya in 2011 at least in part as a result of U.S. military procurement. Of course, from a French perspective, the U.S. role is somewhat ironic. In the years after the terrorist attacks of September 11, 2001, the Americans always had to be on the front line – battling the enemy abroad to avoid having to battle him at home, in the parlance of the time – while the European allies were perceived as the cleaning staff. But imperial fatigue after Iraq and Afghanistan has left its imprint. Americans are starting to enjoy – probably too much for their allies – what President Barack Obama, describing the U.S. role in Libya, called “leading from behind”.
Reuniting France For Hollande, war in Mali is both an opportunity and a risk. If Nicolas Sarkozy, whom he defeated, was widely regarded as “too” presidential, Hollande has given the impression of not being presidential “enough”. His fall from public grace – too statist and fiscally intrusive for the right, but too moderate and social democratic for the true left – was more rapid than
that of any president of the Fifth Republic. Of course, with unemployment rising every month, it is difficult to remain popular for long. Asthesupremecommander of an army at war, Hollande can now try to reinvent himself. But, successive presidents since Jacques Chirac have failed to reconcile the French with politics. France’s citizens have tended to expect too much from their state, and now they may be expecting too little from politics and politicians at a time when deep divisions on fundamental economic and social issues run not only between the traditional right and left, but also within both camps. Will foreign intervention reunite the French? Will war in Africa be the defining moment of Hollande’s presidency? Will he be remembered as the French Harry Truman – a discreet, uncharismatic man who, when faced with urgent and dramatic circumstances, ended up doing the right things for lack of a better alternative? This is a portentous moment both for Mali and for security in the Sahel and Europe. It is no less significant for Hollande and France. © Project Syndicate
This is a portentous moment both for Mali and for security in the Sahel and Europe. It is no less significant for Hollande and France
French President François Hollande
editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes Newsdesk Alex Lee, Stephanie Lai, Tony Lai Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, José I. Duarte, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
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January 18, 2013 business daily | 15
OPINION
Swap the debt ceiling wires for a rule that makes sense Business
Leading reports from Asia’s best business newspapers
Taipei Times Taiwan may be on a “slippery slope” in its dealings with China, former American Institute in Taiwan chairman Richard Bush wrote recently in a policy paper. Even if Taipei does not make a “proactive strategic decision” to appease Beijing and Washington does not seek to curry favour with China by sacrificing Taiwan’s interests, “there remains the possibility that Taiwan might undermine itself through inattention or neglect,” he said. Mr Bush wrote that Taiwan might become complacent and assume that Beijing’s intentions are so benign that it is prepared to accept some version of the “status quo” in the long term.
Asahi Shimbun BankofJapanhasdowngradedits economic assessment for eight of the nation’s nine geographic regions in its quarterly report for January. Sluggish overseas economies and weaker exports due to worsening Japan-China relationsareamongthekeyfactors cited by the central bank. The only region whose economic assessment was kept intact from the October report was Hokkaido. The report showed that the regional economies are still enduring severe difficulties, despite the recent upturn in stock markets and the weakening of the yen in expectations of Prime Minister Shinzo Abe’s economic stimulus policies.
Korea Herald South Korea’s producer prices fell by the most in more than three years in December mainly because the currency sharply appreciated to the US dollar, the central bank said yesterday. The producer price index, a barometer of future consumer inflation, fell 1.2 percent in December from a year earlier, compared with a 0.9 percent on-year fall in November, according to the Bank of Korea. The December figure marked the largest fall since a 3.1 percent on-year fall in October 2009. For the whole of 2012, the producer prices grew 0.7 percent.
Bangkok Post A surge in short-term foreign investment has strengthened the baht rapidly since the beginning of the year, but regulators and analysts expect the fast pace to easesoon.NiwatKanjanaphoomin, president of the Thai Bond Market Association, said short-term foreign investment flows increased by 5 billion baht (US$167 million) in the middle of last week from the beginning of the year, with short-term bond purchases skyrocketing the past few days. He was quoted as saying the flows will likely decline in a few months as public debt crises in Europe and the U.S. ease.
Clive Crook
Bloomberg View columnist
A
s the U.S. heads toward its second phony fiscal crisis in as many months, President Barack Obama is persisting with his tough new line: The debt ceiling must be raised without preconditions, he says, and he isn’t willing to discuss it. In one way, he’s right. The debt ceiling is an instrument of economic self-harm. It’s ridiculous and should be scrapped. But Obama should be open to replacing it with something more intelligent. Attacks on the debt ceiling, stupid as the rule may be, ought to be more discriminating. It’s a bad fiscal rule not because it obliges Congress to second-guess its own previous decisions (the standard critique), but because the particular kind of secondguessing it requires is so dumb and unproductive. Most critics of the debt ceiling argue that it’s an affront to simple logic. Congress votes each year on spending and taxes. (Actually it doesn’t vote annually on most entitlement spending: That just happens automatically. Never mind.) Future borrowing and debt levels follow directly from those decisions. So the debt ceiling in effect obliges the government to disobey its own instructions. That’s selfcontradictory, critics say.
Lazy argument This is a lazy argument. In any system of checks and balances, there will be secondguessing. And a lot can be said for a fiscal rule that forces Congress to examine its tax and spending decisions more carefully – or forces it to undo previous choices if the outlook for deficits and debt looks unexpectedly bad. This basic principle shouldn’t be unfamiliar. Individual states are obliged to balance their current budgets. That might be good or bad policy, but it isn’t self-contradictory. In the rest of the world, many countries have adopted some form of fiscal rule to discipline their tax and spending choices – including caps on budget deficits (with or without adjustment for the business cycle) or on debt. What’s absurd is the particular form of America’s debt-ceiling rule. The ceiling is set at a fixed dollar value, so it’s certain to be breached at some point either because of inflation or economic growth. Bear in mind, in a growing economy, a small budget deficit probably implies stable or falling debt as a ratio of gross domestic product. Fiscal policy as cautious and conservative as that will nonetheless breach a nominal-dollar debt ceiling.
No plausible rationale exists for the U.S. approach. Moreover, the threat of imminent default – the only sanction envisaged by the rule – is so extreme it’s barely credible. Everybody expects the debt ceiling to be raised in the end, as it always has been, so it imposes zero discipline when fiscal decisions are first being made. Taxes and spending are set as though the rule simply didn’t exist. Yet once relations between the parties in Washington sink to a certain point, the rule can be used, like now, as a tool for reckless fiscal brinkmanship. It’s the worst possible combination. The rule has no effect when it counts – and when a more sensibly designed restraint might be useful. Later, it becomes a doomsday machine.
Done right, the debt-brake approach passes the tests. The debt-ceiling rule by its very design fails both, and that’s why it should be scrapped
Some of its defenders argue that, messy and dangerous as the process may be, the occasional threat of crisis does at least apply some downward pressure to borrowing. At the very least, they say, it’s a chance to lodge a complaint. As a senator, Obama voted against raising the debt ceiling in protest at George W. Bush’s budgets. These justifications aren’t persuasive. Up to now, the rule simply hasn’t worked as its defenders claim. True, the debt-ceiling impasse of 2011 gave rise to the fiscal cliff and its commitment to (unduly severe) fiscal contraction – but see what just happened. Congress reversed the commitment.
Bad formula The debt-ceiling rule is a formula for getting nothing done at inordinate cost. It would be a bad way to make fiscal policy even if the recurring threat of default succeeded in getting spending and borrowing under control. So far, it hasn’t. At the moment,
Republicans are more committed to the politics of protest and dysfunction than to cautious fiscal policy, but if that should ever change they might think about proposing a different fiscal rule – maybe even one that many Democrats could embrace. Several variants are possible. One would cap growth in federal spending at the trend rate of growth of the economy. This would let spending rise during recessions and curb its expansion during booms, thus allowing scope for Keynesian countercyclical policy. However, this approach requires agreement on the normal level of spending, and that won’t be easy to achieve. A more elastic rule is the so-called debt brake, as used in Switzerland. This would tie growth in spending to growth in business-cycle-adjusted tax revenues. Using this approach, structural spending (i.e., spending at full employment) can grow faster than the economy, but only if taxes are raised at the same time. A debt brake wouldn’t directly limit the size of government, but it would restrain deficits and public debt. It would also force Washington to be more honest about the tax implications of higher spending and the spending implications of lower taxes. Budget forecasting is an imprecise business, so secondguessing once the facts are in would still be needed, and policy would have to be adjusted on the fly. However, the first requirement of any fiscal rule is that it guides budget deliberations from the start. The second requirement is that its correction mechanism, discretionary or automatic, is moderate enough to be credible. Defaulting on public debt doesn’t qualify. Done right, the debt-brake approach passes these tests. The debt-ceiling rule by its very design fails both, and that’s why it should be scrapped. Bloomberg View
16 |
business daily January 18, 2013
CLOSING Greek programme in ‘right direction’
Pennsylvania 2nd largest casino state
Greece’s economic programme is moving in the right direction, the head of the International Monetary Fund said yesterday as the IMF agreed to disburse to disburse 3.24 billion euros (US$4.31 billion) to Athens. IMF Managing Director Christine Lagarde said “forceful” reforms and domestic support will be needed to meet the country’s economic challenges, as well as long-term support from its euro zone partners. “While the programme has been adjusted to take account of the deeper recession and implementation capacity, the strategy remains focused on restoring growth, competitiveness, and debt sustainability,” Ms Lagarde said.
Pennsylvania became United States’ second-largest commercial gaming jurisdiction in 2012, reporting total casino revenues up more than 4 percent to almost US$3.2 billion, GamblingCompliance. com reported yesterday. Gross gaming revenue from slot machines grew 2.7 percent to US$2.47 billion, while gross table games revenue increased 11 percent to US$687.4 million. According to data from the Pennsylvania Gaming Control Board, the revenue growth brought in US$1.44 billion in gaming taxes. The numbers also confirmed that Pennsylvania surpassed New Jersey as the second largest commercial casino state in the U.S., behind only Nevada.
Rio Tinto chief executive resigns After the company announced a US$14 billion writedown
R
io Tinto Group, the world’s second-biggest mining company, said chief executive Tom Albanese will step down as the company prepares to slash the value of acquisitions he oversaw by about US$14 billion. Sam Walsh, the head of the company’s most profitable division, took over as CEO yesterday, Londonbased Rio said in a statement. Doug Ritchie, who led the A$3.9 billion (US$4.1 billion) purchase of Mozambique coal producer Riversdale Mining Ltd in 2011 will also step down as Rio will cut the value of the Mozambique coal assets by about US$3 billion. “Sam Walsh is well regarded,” said Ric Ronge, at Pengana Global Resources Fund in Melbourne. “Iron ore is about 80 percent of Rio’s earnings – so he’s basically in charge of the bulk of the company’s earnings power. It makes sense that he would probably be the person to step-up if they were looking for an internal appointment.” The bulk of the writedown, of US$10 billion to US$11 billion, will be off the company’s aluminium businesses, most of which were obtained through Mr Albanese’s US$38 billion purchase of
Alcan in 2007. Rio has already reduced the value of the Alcan operations by US$8.9 billion in February last year. “The Rio Tinto board fully acknowledges that a writedown of this scale in relation to the relatively recent Mozambique acquisition is unacceptable,” chairman Jan du Plessis said in the statement. “We are also deeply disappointed to have to take a further substantial writedown in our aluminium businesses, albeit in an industry that continues to experience significant adverse changes globally.” Aluminium futures in London have declined 8.3 percent in the past year, hurting producers such as United Co. Rusal and Alcoa Inc. Mr Albanese and Mr Ritchie, while stepping down yesterday, will remain at the company until July 16. Neither of them will get a lump sum payment, or short-term performance bonus for 2012 or 2013, the statement said. “I would like to pay tribute to Tom for his considerable contribution to Rio Tinto over more than 30 years of service and for his integrity and dedication to the company,” Mr du Plessis said. “I would also like to thank Doug for his 27 years of service to the group.” Tom Albanese became chief executive of Rio Tinto in 2007
Bloomberg News
Most Dreamliner planes grounded Airlines and regulators ground Boeing’s planes amid continuing safety concerns
A
irlines scrambled yesterday to rearrange flights as Europe, Japan and India joined the United States in grounding Boeing Co’s 787 Dreamliner passenger jets while batteryrelated problems are investigated. The lightweight, mainly carbon-composite plane has been plagued by recent mishaps – including an emergency landing of an All Nippon Airways domestic flight on Wednesday after warning lights indicated a battery problem – raising concerns over its use of lithium-ion batteries.
The U.S. Federal Aviation Administration (FAA) on Wednesday temporarily grounded Boeing’s newest commercial airliner, saying carriers would have to demonstrate the batteries were safe before the planes could resume flying. It gave no details on when that might happen. Other regulators followed suit yesterday. It is the first such action against a U.S.made passenger plane since the McDonnell Douglas DC-10 had its airworthiness certificate suspended following a deadly crash in Chicago
in 1979, analysts said. Boeing has sold around 850 of the new planes, with 50 delivered to date. Around half of those have been in operation in Japan, but airlines in India, South America, Poland, Qatar and Ethiopia, as well as United Airlines in the United States, are also flying the aircraft, which has a list price of US$207 million. With most of that Dreamliner fleet now effectively out of action as engineers and regulators make urgent checks – primarily to the plane’s batteries and complex electronics systems
– airlines are wrestling with gaps in their scheduling. Keeping the 787s on the ground could cost ANA alone more than US$1.1 million a day, Mizuho Securities calculated, noting the Dreamliner was key to the airline’s growth strategy. Regulators in Japan and India said it was unclear when the Dreamliner could be back in action. A spokesman for the European Aviation Safety Agency said the region would follow the FAA’s grounding order. Poland’s state-controlled LOT Airlines is the sole European airline currently operating the 787.
Boeing said in a statement it was confident the 787 was safe and it stood by the plane’s integrity. “Boeing is committed to supporting the FAA and finding answers as quickly as possible,” CEO Jim McNerney said. “The company is working around the clock with its customers and the various regulatory and investigative authorities.” Moody’s said the 787 grounding was a negative credit development for Boeing, but ratings were not expected to be impacted for now. Reuters