Macau Business Daily, May 3, 2012

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we live inside ideas.

Year I | Number 24 | Thursday May 3, 2012 Editor-in-chief | Tiago Azevedo Deputy editor-in-chief | José I. Duarte MOP $ 6.00

Ao finds his voice against graft buster

April gaming revenue up 22 percent

Page 3

HK press photographer denied entry yet again

Page 5

Page 6

Political system

Chequered path to reform M

acau’s path to political reform will include an increase in the number of indirectly elected lawmakers. After a 45-day public consultation period a reform solution known as “two plus two plus 100” has been adopted and sent to the Legislative Assembly. It means a further two seats for directly-elected legislators and two for indirectly-elected ones, as well as a 100-member increase in the Chief Executive electoral committee.

More than 85 percent of the nearly 160,000 opinions collected during the 45-day consultation supported the two plus two plus 100 proposal, said Florinda Chan, secretary

for Administration and Justice.

Critics of the process are sceptical about the fact the proposal has been made only nine days after the end of the consultation period – but they say it comes as no surprise as proposals were already “pre-decided regardless of any consultations”.

Meanwhile, a video has surfaced, showing a child below legal voting age writing an opinion during one of the initiatives launched by a community association. “I wasn’t there, but I was told the child was there with his or her parent or guardian,” Ms Chan said.

More on pages 2 & 3

www.macaubusinessdaily.com

Brought to you by

HANG SENG INDEX 21400

Wynn Cotai building starts ‘before June’ – Steve Wynn

21360

21320

21280

W

ynn Resorts chairman and founder Steve Wynn said last night he hopes to begin work on Wynn Cotai this month. His upbeat assessment – given personally in a joint interview for Business Daily and our sister publication Macau Business magazine – came only hours after the formal gazetting of his Cotai land concession.

He also added the resort will cost “US$3.5 billion to US$4 billion”. That’s more than previously mentioned. Wynn shareholders may be forgiving because in February Wynn Resorts withdrew from circulation a 19.5 percent stake previously held by Japanese slot machine entrepreneur Kazuo Okada. At the time the company valued the shares at US$2.77 billion.

Cancelling Mr Okada’s shares effectively made the remaining stakeholders better off, because it increased their earnings per share even after Wynn has paid Mr Okada discounted compensation said Union Gaming Research in a note at the time. But the move has been legally challenged by Mr Okada, who was thrown off the Wynn Resorts’ board after a row stemming from the his investment in a Philippines casino project.

More on page 4 & 5

21240

21200

May 2

HSI - Movers Name

Affordable homes exempt from flats register The new rules on transactions involving unfinished buildings will not apply to the sale of affordable housing by the government according to a draft law sent to the Legislative Assembly last week.

“All legal transactions in which the seller is the Macau Special Administrative Region or a public entity” will be exempt from the new rules, says the draft bill aimed at curbing speculation and “unhealthy” practices in real estate market.

Page 7

%Day

NEW WORLD DEV

3.00

COSCO PAC LTD

2.65

ESPRIT HLDGS

2.38

CHINA MERCHANT

2.19

AIA GROUP LTD

2.17

PETROCHINA CO-H

-0.34

CHINA RES POWER

-0.71

CHINA RES ENTERP

-0.71

BELLE INTERNATIO

-1.45

CHINA UNICOM HON

-1.59

Source: Bloomberg

Brought to you by

2012-5-03

2012-5-04

26˚ 29˚

26˚ 29˚

2012-5-05

25˚ 30˚

2 |

business daily Thursday May 3, 2012

macau

Baby steps for political reform

Few surprises as the government announces it will propose four more seats – two each for directly and indirectly elected legislators Vítor Quintã

vitorquinta@macaubusinessdaily.com

J

ust nine days after the end of the public consultation on political reform, the revision of Macau’s electoral laws is on its way to the Legislative Assembly, with the backing of the Executive Council.

The draft laws released on Wednesday follow one of the two “predominant opinions” the government has included in the consultation document: a further two seats each for directly and for indirectly elected legislators and a 100-member increase in the Chief Executive electoral committee.

More than 85 percent of the nearly 160,000 opinions collected during the 45-day consultation supported the “two plus two plus 100” proposal, said Florinda Chan, Secretary for Administration and Justice.

Public administration professor Eilo Yu Wing Yat was not surprised by the government’s recommendation.

“Opposition voices have been very vocal on the issues and they have focused hard on mobilising people over the Internet. However, the majority of the population is not very interested in political reform,” he told Business Daily.

Ms Chan admitted that the government made no effort to assess whether all opinions came from permanent residents.

“We can’t force people to present their Macau identity card due to the personal data protection law,” she said.

Executive Council spokesperson Leong Heng Teng added that the government could not “analyse the truthfulness of all opinions”.

The head of the Public Administration and Civil Service Bureau, José Chu, added that only opinions that were anonymous or sent after the April 23 deadline were thrown out.

Yet he claimed all 100,000 opinions put forward on the final day by eight associations “were identified with the person’s name

logistics,” Mr Chu said.

“In the last few days, we asked for help from our colleagues from IACM (Civil and Municipal Affairs Bureau), the Identification Bureau, DSAJ (Legal Affairs Bureau) and the Legal Reform (and International Law) Bureau,” he said.

“Some of our staff had to work on weekends and holidays and pull all-nighters,” the official said.

and so we know they were accurate in gathering information”.

Foregone conclusion Ms Chan went even further, stressing that there was no need to check the identity of the participants because the public consultation was not “a voting, an election or even a legally binding procedure”.

Meanwhile, a video has surfaced, showing an underage child writing an opinion during one of the initiatives launched by a community association.

“I wasn’t there, but I was told the child was there with his or her parent or guardian,” Ms Chan said.

Challenges ahead

The implementation of the proposals will still face a few challenges from democrats, particularly from the moderate democrats, who were not really heard or given room to participate in the debate Eric Sautedé

Opposition voices have been very vocal on the issues and they have focused hard on mobilising people over the Internet. However, the majority of the population is not very interested in political reform Eilo Yu Wing Yat

In just nine days, including a weekend and the May Day holidays, the government analysed almost 160,000 opinions. But University of St. Joseph political scientist Eric Sautedé told Business Daily: “The proposals were already pre-decided regardless of any consultations.”

Officials present at yesterday’s press conference said the analysis had taken a lot of work.

“We had about 150 workers, including staff for introducing data during the first 45 days and hundreds of others helping with the

“We knew that the schedule is very tight. The next step is to try to send the draft laws to the Legislative Assembly as soon as possible. We hope to have the revision done by the end of this year, because the first election will be in 2013.”

Mr Yu said that, without a significant opposition, the proestablishment proposals are likely to be passed. “The proposals would not significantly change the current status quo,” he said.

Mr Sautedé is more cautious. “The implementation of the proposals will still face a few challenges from democrats, particularly from the moderate democrats, who were not really heard or given room to participate in the debate.

“There is still a lack of participation or awareness in the people. But the real worrying matter is that there is no real debate in the Chinese press.”

“This reform may leave some people disappointed and feeling irrelevant but it will make other people more active in participating in the debate.”

Mr Yu agrees and believes that enough momentum has been created to interest more young people in politics.

One of the two extra indirectly elected seats in the Legislative Assembly will go to the professional constituency, the other to the social works, cultural, educational and sports sector.

Thursday May 3, 2012 business daily | 3

MACAU

Ao finds his voice against graft buster Former secretary breaks his courtroom silence to question the testimony of corruption investigators Cláudia Aranda

claudia.aranda@macaubusinessdaily.com

A

The next step if to try to send the draft laws to the Legislative Assembly as soon as possible. We hope to have the revision done by the end of this year because the first election will be in 2013

seat, down from 25 percent. The number of votes for each association will double to 22.

In addition, the current mechanism that makes voting non-mandatory if there is just one candidate for each indirectly elected seat will be removed.

“As a democrat, I understand the pros and cons of a functional constituency. Despite that, we would like to have full Universal Suffrage. The main problem, however, is the seven members appointed by the Chief Executive,” Mr Sautedé said.

Meanwhile, there will be an increase from 300 to 400 members in the chief executive electoral committee, with a proportionate increase in the number of members needed to run for election – from 50 to 66.

The cultural, educational and professional sector will get 35 more seats, similar to the labour, social services and religious representatives.

The industrial, trade and financial sector will receive 20 extra members, while the political sphere will account for 10 more.

Florinda Chan

fter remaining silent for most of his third trial for corruption and money laundering, Ao Man Long yesterday spoke up against investigators from the city’s graft watchdog.

The disgraced former secretary for Transport and Public Works questioned the integrity of documents presented by investigators from the Commission Against Corruption at the Court of Final Appeal, Rádio Macau reported.

One of the three investigators who testified yesterday displayed a PowerPoint presentation that included four documents related to the two wastewater treatment plants at Coloane and the Zhuhai-Macau Cross-Border Industrial Park.

Mr Ao is accused of taking bribes of more than 5 million patacas (US$626,000) to grant plant contracts to a consortium composed of ATAL Engineering Ltd., Waterleau and China State Construction Engineering (Hong Kong) Ltd. He said the handwriting on the four documents was not his and he asked the judges to conduct a handwriting assessment to confirm its integrity.

The judges eventually called back the witness, who testified that he did not say in court the handwriting in the documents belonged to the former secretary. However, he did say the documents had been found in Mr Ao’s home.

The judges then decided there was no point in conducting a test of the handwriting and refused the request.

Mr Ao’s attorney tried to avoid the use of the PowerPoint presentations but the judges eventually set aside the request.

Later on, the second investigator confirmed that Mr Ao had met 11 times with Joseph Lau Luen Hung, chairman of Hong Kong-based property developer Chinese Estates Holdings Ltd. Mr Lau and Steven Lo Kit Sing are two high-profile Hong Kong businessmen who won a tender for the plot where the residential complex La Scala is being built.

At this stage, Mr Ao intervened again and said there had been only two meetings with Mr Lau, the first organised through the head of San Meng Fai Construction Co. Ltd, Ho Meng Fai, who was already sentenced for corruption in another related case and remains at large.

The graft buster’s expert later said the 11 meetings were between the former secretary and both businessmen, which Mr Ao continued to refute, saying there were fewer meetings.

According to the indictment, Mr Lau and Mr Lo paid a bribe of 20 million patacas to secure a 78,742-square-metre parcel near the airport.

In an earlier hearing, Mr Lo denied bribing the former official.

He claimed that Ho Meng Fai asked for an advance payment of 20 million patacas. Mr Lo said San Meng Fai gave him a bank account that purportedly belonged to a supplier.

He claimed he did not know the account belonged to Ecoline, an offshore company controlled

by Mr Ao.

With X.C.

Key Points • Two more indirectly elected seats and two directly elected seats in the Legislative Assembly • One more seat for the professional sector • The social work, cultural, educational and sports sector will be split • End to non-mandatory voting if there is just one candidate for each indirectly elected legislator seat • Another 100 members in the Chief Executive electoral committee

Illustration by Rui Rasquinho

4 |

business daily Thursday May 3, 2012

macau

Wynn Cotai land concession approved Building to start ‘before June’ but cost higher than previous estimates – Steve Wynn Associate Editor

Land in the bag – and building starting ‘before June’

W

ynn Macau Ltd received formal gazetting of the land for its Wynn Cotai project yesterday. In a joint interview with Business Daily and our sister publication Macau Business – the first after the land concession announcement – Wynn chairman and founder Steve Wynn said he hoped to begin work on the site this month.

But Mr Wynn also said the scheme – featuring 500 gaming tables, 1,000 slots and 2,000 hotel rooms – was likely to cost more than the US$2 billion to US$3 billion discussed in previous company earnings calls with analysts. “[It will be] US$3.5 billion, US$4 billion,” Mr Wynn said in response to a question on the budget. “We will build it like we did Encore [Macau]; out of cash flow and if we need any help, the banks are all there for us.” Asked if he planned to issue fresh equity to fund the Cotai venture, he replied: “I have no plans of doing that.”

And in a day of revelations, a press statement released yesterday evening by the Macau government said it had originally given approval in principle for Wynn Cotai in 2008 – but the application process had been suspended at Wynn’s request following the global financial crisis that began in September that year.

It was then reactivated in early 2009 at the company’s further request, added the government statement – apparently designed to counter any impression the Macau authorities may have dragged their feet over Wynn Cotai.

Mr Wynn told Business Daily yesterday he would start construction work in the first half of this year.

We will build it like we did Encore [Macau]; out of cash flow and if we need any help, the banks are all there for us Steve Wynn

“I’ll be in the ground and working before June,” he stated.

A source with direct professional experience of Macau planning processes told Business Daily it might be difficult to keep to such a tight timetable. The person said: “There isn’t a set time between land gazetting and construction permit approval. But it’s usual for these processes to take several months and to be done by stages.”

Nitty gritty “The markets so far have had the luxury of overlooking the execution angle of the Cotai story,” Gary Pinge, Head of Consumer & Gaming Research, Asia, for Macquarie Securities Group, told Business Daily.

“But now that Wynn Cotai’s land has been granted, the focus moves to the nitty gritty. I think the concession time frame is the most important. Originally Wynn said it was going to open Wynn Cotai

in 2015 but if it slips too far from that it comes close to the end of the concession in 2022.”

“How does one commit US$3 billion-plus to a market where its right to operate a gaming concession ends only five to seven years after opening the project and where the government has provided little clarity on how the concession terms will be renewed?

Add onto this a government that has consistently moved the policy goal posts and it makes the investment decision all the more interesting,” added Mr Pinge.

“The other issues are that Melco Crown with Studio City and Galaxy with Galaxy Macau Phase 2 are ahead of Wynn in the pipeline of Cotai projects. What does that mean for Wynn? And what does the Wynn Cotai announcement mean given the table cap? Wynn Cotai wants 500 tables, Galaxy wants 500 for Galaxy Macau Phase 2, and Studio City wants 400 to 500. How does that reconcile with the government’s view and its stated aim of three percent per annum table growth after 2013?”

The building timetable for Wynn Cotai may depend on how quickly the government wants to see the next phase of Cotai’s development put into action. All six concessionaires want to build new Cotai projects to open before the end of their current licences that expire on various dates between 2020 and 2022. But the government is keen to cool the growth rate of casino gambling.

Gross gaming revenues registered a 22 percent year-on-year increase in April according to government figures released yesterday and registered 58 percent and 42 percent

growth year-on-year in 2010 and 2011 respectively.

Political goodwill According to yesterday’s Official Gazette, facilities approved in principle on the 21-hectare (51acre) plot – but still subject to formal agreement of architecture plans – include a 454,800-square metres five-star hotel and gaming floors, a convention centre, retail, restaurants, a spa and nightclub.

Grant Govertsen of Union Gaming Research said yesterday’s land concession approval suggested local political goodwill toward Wynn.

That’s despite the public battle between the company and former Wynn director and former vicechairman Kazuo Okada, and his ongoing legal challenge to the 1.1 billion patacas donation (US$137 million) over ten years that Wynn made to the University of Macau Development Foundation. There had been speculation the row would slow down Wynn’s Cotai permission.

But Mr Govertsen said: “The government’s approval of Wynn’s Cotai land application suggests that the government has not taken a punitive view towards Wynn with

I’ll be in the ground and working before June Steve Wynn

Thursday May 3, 2012 business daily | 5

Photo by Manuel Cardoso

MACAU

Macau gaming revenue tops MOP25 bln in April Third highest daily rate ever recorded Associate Editor

M

respect to various the allegations put forth by Kazuo Okada.”

Even with political goodwill for Wynn, Galaxy Entertainment Group is still ahead of it in the Cotai pipeline. It started foundation work on Galaxy Macau Phase 2 on April 23 and plans an opening date in mid2015. Melco Crown Entertainment already has a government land concession for the delayed Studio City inherited from the original consortium partners – though not formal permission for a casino – and has started building some worker accommodation on site, as reported

by Business Daily in April.

Wynn Macau shares – listed on the Hong Kong stock exchange – were suspended from trading at 9 a.m. yesterday at the company’s request prior to the land concession announcement.

The full interview with Steve Wynn will be published in this month’s edition of Macau Business magazine.

acau’s gross gaming revenue for April topped 25 billion patacas (US$3.1 billion) according to figures released yesterday by Macau’s casino regulator the Gaming Inspection and Coordination Bureau.

The April figure is up 21.9 percent on the same month in 2011. It was in percentage terms the smallest year-on-year rise of 2012. Growth – while still very strong – has cooled in line with a slowdown in China’s economy since 2010 and 2011, when annual gross gaming revenue went up 58 percent and 42 percent year-on-year respectively.

J.P. Morgan said in a research note from Hong Kong it expected to see some pick up in VIP gambling growth in the second half of the year if credit conditions in China – from where most Macau high roller players originate – loosen as economists have predicted.

And Union Gaming Research said in its note on the monthly results that – averaged on a daily basis – April revenue was the third highest on record.

“On a per-day basis, GGR was MOP833 million, or the third highest daily GGR on record. April was also the fourth consecutive month with daily GGR in excess of MOP800 million, which we think sets the tone for the balance of 2012,” stated the note.

“We also think that May could benefit from new supply (Sands Cotai Central), although we note

Gross Gaming Revenue 28000 26000 24000 22000 20000 18000 16000

that ongoing construction disruption as Sands Cotai Central Phases 2A and B remain in progress will keep the property from reaching its full potential this year,” it added.

Kenneth Fong, Vice President, Asia Pacific Equity Research Conglomerates, Gaming & Lodging for J.P. Morgan, said in a note on the Macau first quarter, he now expected annual Macau revenue growth to reach 24 percent in 2012 and 18 percent in 2013.

“Our 2012 growth estimate is at the high end of The Street’s 15-25 percent range,” he states.

“Our forecast takes into consideration

1) the normal seasonality of a stronger second half, 2) the supply driven demand by the continual ramping up of phase two of Sands Cotai Central casino, and 3) some degree of VIP acceleration into the year end as China credit loosens.”

Stanley Ho’s SJM Holdings continues to lead the pack in terms of market share, with some 25 percent, followed by Galaxy Entertainment Group with 21 percent.

For the first four months of 2012 the accumulated gross revenue reached 99.3 billion patacas – up 25.7 percent year-on-year according to the gaming regulator.

Market Share Per Operator 2011

2012

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

SJM

30%

32%

29%

28%

27%

29%

26%

27%

26%

27%

28%

27%

25%

Sands China

17%

16%

16%

15%

14%

14%

14%

16%

17%

19%

18%

17%

18%

Galaxy

9%

13%

15%

19%

20%

20%

21%

20%

19%

19%

17%

20%

21%

Wynn

17%

13%

15%

15%

13%

12%

13%

13%

14%

13%

13%

12%

13%

MPEL

17%

14%

14%

16%

15%

16%

15%

13%

14%

13%

14%

14%

14%

MGM

11%

11%

11%

8%

11%

10%

11%

11%

10%

10%

10%

10%

10%

Total

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

6 |

business daily Thursday May 3, 2012

macau

InBrief

Less visitors on Labour Day

Less than 351,000 visitors entered Macau during the May 1 holidays, which ended on Tuesday, down by 0.8 percent year-on-year, the Public Security Police announced yesterday. In total, over 1.1 million people crossed Macau’s borders during this four-day period. The Border Gate was the busiest one, with about 805,000 arrivals and departures, followed at a distance by the Outer Harbour Ferry Terminal, with over 140,000 border crossings.

Deal opens doors to Russia flights The ratification of an air services agreement between Macau and Russia was announced in the Official Gazette yesterday. The accord, which allows airlines from both jurisdictions to launch regular flights between Moscow and Macau, came into effect last February. The deal was clinched in January 1999, prior to the handover.

Money laundering unit gets extension The Financial Intelligence Office or GIF, the government department in charge of tackling money laundering, will continue operating until at least 2015. The Chief Executive dispatch announcing the move was published in the Official Gazette yesterday.

“The policy of the SAR government is that GIF will be permanent in nature,” office director Deborah Ng said last year. The United States said last March it should become a permanent unit, with increased powers.

More illegal workers caught in March A total of 67 illegal workers were detected in March according to the latest statistics released yesterday, one more than in the previous month. The Public Security Police found 59 non-registered workers while inspecting 416 locations.

The remaining eight were found by the Labour Affairs Bureau in 17 other places. The inspection points included construction sites, private residential buildings, commercial buildings and factories.

HK press photographer denied entry yet again No reason given for police decision to turn away photographer from covering Labour Day rallies Vítor Quintã

vitorquinta@macaudailytimes.com

A

t least one person, a Hong Kong photographer assigned to cover Labour Day demonstrations, was barred from entering Macau on Tuesday, the Public Security Police confirmed.

Felix Wong Chi-keung, a photographer for the South China Morning Post, was stopped by Macau’s Immigration Department at the Outer Harbour Ferry Terminal on Tuesday morning and had to return to Hong Kong.

According to the Hong Kong newspaper, Mr Wong had been barred from Macau twice in 2009, while trying to cover the introduction of the national security

law and the second trial of former secretary Ao Man Long.

A police spokesperson told Business Daily “at least one person” was barred from entering Macau on Tuesday, in accordance to the 2002 internal security law.

This law allows for police to stop those who “might pose a threat to internal security stability or who are named as suspects (in) having links to cross-border crime, including international terrorism”.

However, the spokesperson said “it is not appropriate” to disclose the specifics of the reasons why Mr Wong was barred from entering Macau.

“If we find a person whose identity does not match (the) claim to be a tourist, we will handle the issue according to the law,” another police spokesperson told Portuguese news agency Lusa. “That is our border control policy.”

Meantime, the cabinet of the secretary for Security, Cheong Kuoc Vá, denied any intervention in the case, and said it was “an administrative decision, much like a traffic ticket”.

He added: “The PSP commissioner has the power to refuse entry to nonresidents. It’s a normal procedure everywhere in the world”.

Taipa car park opens today

T

he car park underneath the site of Taipa Central Park opens to the public today.

About 1,800 parking spaces will be put into use at first, with 1,384 for motorcycles and the remainder for cars.

Transport Bureau chief Wong Wan said the basic facilities of car park were ready and it may be fully open to the public at any time.

Only most of the first basement level will be put into use today. The second level has 901 parking spaces

for cars and will be opened once the first level is full, Mr Wong said.

The park is fully ventilated and can automatically extract exhaust gases according to the density of carbon dioxide in the air.

The Land, Public Works and Transport Bureau told Business Daily last week that the car park would only be open fully to the public during the third quarter of this year.

The infrastructure was originally slated to open last month.

With Light Rapid Transit construction works near Jockey Club expected to reduce the number of parking spaces available, the new car park will help soften the impact.

There are another 500 parking spaces available in a parking lot near Jockey Club.

The charge for motorcycles at the Taipa car park is 1 pataca (US$0.38) an hour and 3 patacas for light vehicles.

C.L.

Weather Beijing 31/17o C Changchun 22/11o C

Harbin 23/10o C

Xian 22/13o C Shanghai 27/18o C Chengdu 27/18o C Kunming 26/15o C Haikou 36/26o C Sanya 33/28o C

Guangzhou 31/25o C

MACAU (30 April-5 May) Day

Temperature

Humidity

04/30

25/29o C

80/95 %

05/01

25/29o C

80/95 %

05/02

26/30o C

70/90 %

05/03

26/30o C

70/90 %

05/04

26/29o C

80/95 %

05/05

25/29o C

80/95 %

Shenzhen 27/22o C

ASIA (today)

Hong Kong 29/25o C

Manila

Macau 29/26o C

TOKYO

Jacarta

34/27 C

31/25o C

19/15o C

32/25o C

Bangkok

SEOUL

K. lumpur

o

37/25 C o

SINGAPORE

26/15o C

33/26o C

taipei

25/20o C

Thursday May 3, 2012 business daily | 7

MACAU

Affordable units avoid new rules on incomplete flats Draft law before assembly to curb speculation and ‘unhealthy practices’ in real estate market offers less protection to affordable housing buyers Vítor Quintã

Photos by Manuel Cardoso

vitorquinta@macaubusinessdaily.com

Households who buy one of the 2,703 flats at the Taipa TN27 public housing complex will not be protected by the new rules on the sale of unfinished property.

T

he sale of affordable housing by the government will not be covered by the new rules on transactions involving unfinished buildings, according to a draft law sent to the Legislative Assembly last week.

The proposal prepared by the government is aimed at curbing speculation and “unhealthy” practices such as the repeated sale of the same property or deceptive advertisements on a unit’s usable area.

It is the first time Macau is trying to enforce restrictions on the sale of unfinished buildings, a measure announced by Secretary for Transport and Public Works Lau Si Io in September 2010.

However, “all legal transactions in which the seller is the Macau Special Administrative Region or a public entity” will be exempt from the new rules, says the proposal released last month by the Executive Council.

If the bill is passed in to law, it will not cover the sale of affordable apartments by the Housing Bureau.

The bureau began selling the 2,703 flats at the Taipa TN27 public housing complex last December.

They will only be ready by the end of

the year, Chief Executive Fernando Chui Sai On said last week.

Earlier, Housing Bureau president Tam Kuong Man had told journalists there were still apartments available the Estrada Coronel Nicolau de Mesquita project, with prices ranging from as low as 544,000 patacas (US$68,100) for a onebedroom unit to as much as 1.45 million patacas for a three-bedroom flat.

The government has pledged to build 19,000 public homes by the end of this year and Mr Chui confirmed last week that 3,000 flats would be open for tender in 2012.

Plots were set aside for a further 6,300 units.

Authorities have refused to set a clear distinction between social and affordable apartments, saying they would adjust the supply according to the market demand.

Heavy fines Households that ask for a bank mortgage to buy an affordable flat will seemingly have fewer rights than families that purchase a unit in the private market.

According to the draft law, developers

Key Points Sales by public entities are not covered by draft law Fines top out at 30 percent of building or flat value Court proceedings before cancelling database registration

will not be allowed to sell flats or buildings still under construction horizontal registration is completed and authorisation is received from the Land, Public Works and Transport Bureau.

The bureau’s approval is to depend on the project receiving a construction licence, completing the foundation, basements and ground floor, as well as horizontal property registration.

If the developer starts selling property

before receiving authorisation, the transaction contracts would be void and the company might have to pay a fine worth 30 percent of the value of the flat or building.

Any transaction contract on unfinished property should have to have a legal model and be certified by a notary. It should state the usable area, the building characteristics and who is responsible for maintenance.

In addition, all transactions must be recorded a mandatory database within 30 days, to prevent the unit from being sold to other buyers.

A special court procedure will be created to allow the developer to cancel the database record if the buyer misses the payments.

This fast-track procedure will not involve witnesses but merely paper evidence. The two sides will not have to hire lawyers and the requests will be assessed by a single judge.

If a real estate agency is involved in the sale of unfinished property, it must sign a mediation contract that stipulates discounts or commissions.

A copy of this contract must be sent to the Land, Public Works and Transport Bureau within five days.

8 |

business daily Thursday May 3, 2012

GREATER CHINA

Open market operations suspended for the week Traders expect liquidity conditions to improve in May Graff to seek HK nod for IPO today

There will be 52 billion yuan of PBOC bills maturing tomorrow

C

hina’s short-term market lending rates were mixed yesterday as demand from banks for extra cash this week pushed the People’s Bank of China to signal a temporary halt to open market operations to supply money to the market, traders said.

The shortest one-day and sevenday bond repurchase rates edged up as banks set aside cash to meet reserve requirements for increased deposits at the end of May, to be paid tomorrow.

But repo rates above 14 days were largely either flat or falling, indicating expectations that liquidity will improve from next week, traders said.

“While very short-term cash demand is still high, expectations are that the overall liquidity situation won’t be so bad this month,” said a trader at a major Chinese state-owned bank in Beijing.

The weighted average of the benchmark seven-day repo rate rose to 3.8064 percent from last Friday’s close of 3.7772 percent, while the one-day rate advanced to 2.8483 percent from 2.8035 percent.

The 14-day repo rate was almost flat at 3.9247 percent, while the 21-day repo fell to 3.9360 percent from 3.9768 percent.

There will be 52 billion yuan (US$8.3 billion) of PBOC bills maturing tomorrow, which will result in a net injection into the market if the central bank does not drain money by selling new repos or bills through open market operations, traders said.

New rules delayed Meanwhile, Beijing is expected to postpone the implementation of new capital adequacy rules for banks until the end of this year, three sources with knowledge of the matter told Reuters.

Two sources in the financial sector and one with direct knowledge of the discussions between the government and the regulator, the China Banking Regulatory Commission (CBRC), said the delay had recently been agreed.

“The banking regulator’s original plan was to start the new rules from July 1 once getting the State Council’s approval. But now they have to further postpone it and the earliest possible date could be the end of this year,” said the source with direct knowledge of the matter.

“The State Council has not yet approved the proposed CBRC rules,” the source added, requesting anonymity to avoid repercussions.

The CBRC in August 2011 published a set of draft rules on bank capital and liquidity requirements as part of efforts to implement the so-called Basel III capital adequacy rules, designed by international banking regulators to help lenders rein in risks.

The draft rules have been modified several times after bank executives and industry analysts complained the rules were too harsh, and further adjustments are now expected to be made.

A CBRC spokesman said the State Council was still examining the draft regulations.

“Right now, the work related to drafting and publishing the new capital rules is still going on and it is following the normal procedure of regulation approval,” the spokesman said.

The August 2011 draft regulations would require all banks to maintain a minimum capital adequacy ratio of 10.5 percent, with systemically important banks subject to an 11.5 percent ratio.

The new capital requirements were originally scheduled to gradually take effect in January this year, but had already been delayed in order to avoid exacerbating already-tight credit conditions.

Reuters

Beijing allows foreigners full access to auto insurance market

C

hina has given foreign insurers full access to its US$32 billion auto insurance market, allowing them from this month into a segment of the business that was earlier reserved for domestic players in the world’s biggest automobile market.

Foreign insurers had been lobbying for access to the third-party liability auto insurance market, arguing that being kept away from that business was a major handicap because most car-owners buy both commercial and compulsory insurance policies from the same insurer.

The full opening up would likely attract more foreign non-life insurers to the market, although any impact on the dominant local players would likely be limited, given their vast sales network, analysts said.

China’s state council, or the cabinet, published the revised auto insurance rules, which took effect on May 1, on the government’s website on Monday. Official papers reported yesterday that the move had effectively opened up China’s third-party liability automobile insurance market to foreign players.

The announcement comes as U.S.

and Chinese leaders are due to start the Strategic and Economic Dialogue today in Beijing.

China has long promised to open its mandatory auto insurance market. During his February visit to the United States, Chinese Vice President Xi Jinping vowed to give foreign access to this market.

Chinese insurers, such as PICC Property and Casualty Co and Ping An Insurance, have dominated the insurance business in China by leveraging their vast army of salespeople and geographical reach.

Reuters

Graff Diamonds, a high-end jeweller based in London, will seek approval from the Hong Kong stock exchange today for an initial public offering of as much as US$1 billion, two sources with direct knowledge of the plan said.

The share sale would surpass the US$600 million listing by the property fund of Tesco’s Thai unit, the biggest IPO in the AsiaPacific region so far this year, according to Thomson Reuters data.

No timetable had been set for Graff and its advisers to start meeting with potential investors, the sources, who were not authorised to speak publicly on the matter, said yesterday.

IPO candidates in Hong Kong have previously started drumming up demand for their deals in the week after getting approval from the exchange.

Graff, founded by Laurence Graff in 1960, has been targeting to list in the second quarter, a source previously told Reuters.

The listing would come on the back of a 14.4 percent jump in the benchmark Hang Seng index in 2012.

Stock issuance in the Asia-Pacific has tumbled 21 percent since the beginning of 2012 compared with a year earlier as investors shunned IPOs and follow-on offerings on concerns over Europe’s debt crisis and slower economic growth in China.

Haitong Securities Co Ltd, China’s secondbiggest broker by assets, made a flat debut in Hong Kong on Friday after raising US$1.7 billion in a share offering.

Other large deals expected in the city in 2012 include the US$800 million IPO by Fosun Pharmaceutical. Elsewhere in the region, Felda Global Ventures Holdings plans a US$3 billion IPO in Malaysia and Formula One racing could list in Singapore in a US$2 billion deal.

Gome shares hit three-year low Shares of Chinese home appliance distributor GOME Electrical Appliances Holding Ltd plunged to their lowest level in more than three years yesterday after it warned of a sharp drop in quarterly profit due to an end to government subsidies, a housing slowdown and losses in its e-commerce business.

GOME’s stock, which has dropped nearly 30 percent so far this year, plunged 11.4 percent to a session low of HK$1.24 yesterday, its lowest since November 2008, lagging a 1.14 percent gain in the benchmark Hang Seng Index.

“We expect to see operating deleverage continue” in the first half “as the government subsidy expiration impact could last for the whole year and it could take another six months for the (enterprise resource planning) system to fully ramp up,” Macquarie’s Linda Huang wrote in a research note, referring to a system to enhance supply chain and logistics efficiencies.

China announced a nationwide subsidy programme for purchases of home appliances in 2008 in a bid to boost domestic spending and offset an export slowdown, but the scheme ended in December.

Huang also said GOME’s plan to cut prices to gain market share in the e-commerce sector was likely to hurt its outlook. She cut GOME’s 2012 earnings forecast by 14 percent on slower same-store sales growth, lower margins and higher operating expenses and reiterated an underperform rating on the stock.

Thursday May 3, 2012 business daily | 9

GREATER CHINA

April PMI value increase signals possible recovering HSBC purchasing managers index up but still on the negative side, less optimistic then the official index

H

SBC Holdings Plc and Markit Economics purchasing managers’ index rose in April, signaling growth may be starting to rebound in the world’s second-biggest economy.

The 49.3 reading of the PMI compares with a figure of 48.3 in March, but remained below the threshold of 50 that divides expansion from contraction. By contrast, the government’s official manufacturing PMI , largely indicative of bigger firms, rose to a 13-month high of 53.3 in April, figures on Tuesday showed, thanks to stronger output. The March reading was 53.1.

“Anecdotal evidence provided by survey respondents suggested that reduced production reflected lower levels of incoming new business. There were also reports of a general deterioration in market conditions,” Markit Economics, which compiled the HSBC index, wrote in its report.

Improvements in manufacturing may encourage Premier Wen Jiabao to extend a two-month pause in lowering banks’ reserve requirements. Wen is seeking to rein in property and consumer prices without sending the economy into a so-called hard landing.

Gross domestic product increased 8.1 percent last

quarter from a year earlier, the least since 2009.

“The need for aggressive policy easing is limited given the government’s desire to slow growth and the upside inflation risks,” Chang Jian, a Hong Kongbased economist with Barclays Capital, said before yesterday’s release.

“Fine-tuning measures such as easing credit, support for first-home buyers and expansionary fiscal policy to support infrastructure will gradually feed through, so

the slowdown in growth will bottom out this quarter.”

New lending In a sign that China’s manufacturing remains constrained by weakness in global demand, the HSBC PMI has indicated contractions for six straight months, the longest run since the global financial crisis.

The official index is based on responses from managers at more than 820 companies in 28 industries, while HSBC’s

The HSBC China Purchasing Managers’ Index improved to 49.3 in April

No more bargains for Chinese tourists Luxury brands review their pricing strategies, see need to reduce price gaps

C

covers more than 420 companies and is weighted toward smaller businesses.

China’s new yuan loans may have fallen to about 700 billion yuan (US$111 billion) last month, down almost 30 percent from March, the China Securities Journal reported yesterday, citing estimates from unspecified “market participants.” China’s four major state lenders extended only 101.7 billion yuan of new loans through April 25, the newspaper said, without

hinese tourists traveling to Europe to take advantage of savings as much as 50 percent on designer clothes and accessories are finding fewer bargains.

LVMH Moet Hennessy Louis Vuitton SA and its peers are raising prices to make up for lost business in China and lower profitability outside the country, even if it puts items like 2,270-euro (US$3,000) Lockit handbags further out of reach for Europeans whose disposable incomes are shrinking amid austerity.

“You cannot continue to sustain the existing price gaps that have been a mainstay of the luxury goods industry for the past 20 or 25 years,” said Luca Solca, global head of European equities at CA Cheuvreux, in an interview.

“What we expect luxury-goods companies to have to do is progressively close the pricing gap and, more likely than not, this is going to come from stepping up prices outside of Asia.”

With China expected to account for

a third of luxury sector expansion this year, weakening revenue growth there is a risk to earnings even as the value of sales in yuan rises with currency moves. Earnings before interest and tax as a percentage of luxury sales is 40 percent in China compared to 25 percent in Europe, largely because of lower rents, Mr Solca estimates.

Tourists, mainly from Asia, account for between 35 percent and 60 percent of luxury sales in Europe, according to HSBC analyst Antoine Belge.

At Paris-based Louis Vuitton, currency shifts widened the price differential between mainland China and France to as much as 47 percent in the first quarter, spurring more Chinese to shop abroad, according to LVMH Finance Director JeanJacques Guiony. While the premium propped up flagging local demand in Europe, it came at the expense of sales in the world’s second-largest economy, he said on a conference call last month.

“This will continue to be a feature of the industry this year unless the group

rebalances pricing to discourage parallel imports,” said Barclays Capital analyst Julian Easthope.

The euro has declined 11 percent against the dollar and 13 percent versus the yuan in the past year.

Shopping the world But luxury companies risk hurting local European demand or damping other tourist spending in the region if they raise prices too much, said Armando Branchini, founder of Milan-based luxury consultant Intercorporate. Still, a progressive increase is needed and austerity measures are likely to be the main obstacle to consumption in the region.

“It’s the global traveling luxury consumer that is dominating,” Burberry Chief Financial Officer Stacey Cartwright said.

Chinese global tax-free spending grew

saying where it obtained the figures.

The China Federation of Logistics and Purchasing, which compiles the official index, urged caution on Tuesday. “Influenced by the change in demand, there is the possibility of a waning in future economic growth,” one of the federation’s analysts, Zhang Liqun, said.

The federation noted that while its sub-index for large firms was at 53.7 in April, or firmly in growth territory, its smaller firms subindex was below the growth threshold, at 49.1.

The dichotomy represents the continuing struggle for financing by smaller firms that find it more difficult than state-owned firms to get loans and other support.

Chinese manufacturers must also contend with the pressures of too much capacity and lacklustre demand.

“The longer the two indicators straddle either side of the 50-line, ... the less useful they become as indicators at all,” wrote Alastair Thornton of IHS Global Insight in Beijing.

Both surveys agreed that new export orders rose, albeit marginally, in April, while overall new orders fell, implying that domestic demand was relatively weak.

Reuters/Bloomberg

79 percent in March from a year earlier, the fastest increase of any nation, making them the world’s biggest taxfree spenders with 21 percent of the total, according to tourist shopping specialist Global Blue.

The products they splurge on the most in Europe are watches, jewelry and fashion, said Manelik Sfez, head of global corporate and partner marketing at Global Blue in Nyon, Switzerland.

Lower prices are the main reason wealthy Chinese travelers buy abroad, Mr Sfez said. That doesn’t mean they scrimp. Chinese visitors reported spending an average of 11,000 euros on shopping per trip to Europe, Hong Kong or Singapore, according to a recent Global Blue survey.

“Shopping is their preferred activity at destination,” Mr Sfez said in response to e-mailed questions.

China is expected to account for a third of luxury sector expansion this year

Bloomberg

10 |

business daily Thursday May 3, 2012

ASIA

InBrief SK Telecom profit falls South Korea’s largest mobile-phone operator, SK Telecom, reported firstquarter profit that missed analyst estimates.

Net income fell 40 percent to 323.3 billion won (US$287 million) from 537 billion won a year earlier, the Seoul-based company said in a statement yesterday. That lagged behind the 358.4 billion-won average of 13 analyst estimates compiled by Bloomberg.

SK Telecom’s mobile-call revenue fell 2 percent as it cut phone rates amid a government initiative to control inflation. Operational spending rose 7 percent as the company upgraded networks to accommodate surging data traffic and revive earnings with faster fourth-generation services that use so-called long- term evolution, or LTE, technology.

SK shares fell 0.7 percent to 134,000 won at the close of trading in Seoul, while South Korea’s benchmark Kospi index gained 0.9 percent.

Korean won up on dollar selling The South Korean won ended domestic trade yesterday at its highest level in nearly four weeks, buoyed by improved risk appetite stemming from strong U.S. data and dollarselling by local exporters.

The won was quoted at 1,127.5 against the dollar at the end of local trade, the highest since April 5, compared with 1,130.0 at the end of the domestic session on Monday.

Local markets were closed Tuesday for Labour Day. The won rose as high as 1,125.3 against the dollar during intraday trade yesterday, the strongest it has been since April 3.

Boosting the won was a steady supply of dollars from local exporters.

This also triggered stop-loss dollar selling by some offshore funds, lifting the local currency further.

IAG eyes Indonesian insurance market Insurance Australia Group said it is looking to enter the Indonesian market, as Australia’s largest home and car insurer seeks to expand its footprint in faster-growing Asian markets.

IAG Chief Executive Mike Wilkins said its interest in Indonesia was still in the early stages, but said it would be looking to form a joint venture.

“We have completed a detailed strategic review of the Indonesian market and we believe it represents a very strong opportunity and there is the added appeal of being able to own up to 80 percent.”

IAG shares rose 0.4 percent, slightly outpacing a 0.2 percent rise in the broader market.

S. Korea, China start talks on free-trade accord

S. Korea, China start talks on free-trade accord First round of talks to take place this month; goal is to lift trade to US$300 billion by 2016

C

hina and South Korea are starting discussions toward reaching a free-trade agreement and want to establish the accord as early as possible, Chinese Commerce Minister Chen Deming said.

The first round of talks will take place this month, Mr Chen said at a briefing in Beijing yesterday with South Korean Trade Minister Bark Tae Ho. The two countries’ goal is to lift trade to US$300 billion in 2016, Chen said.

Asia’s biggest and fourth-biggest economies would form a market with annual trade that rose 19 percent in 2011 to US$246 billion, according to China’s customs data. A free trade accord is strategic from both economic and political standpoints, given the proximity to North Korea, said Kwon Hyuk Jae, research fellow at Samsung Economic Research Institute in Seoul.

“Both can gain much for economic growth and closer ties will help beef up regional security,” Mr Kwon said.

Officials have previously signalled interest in a trade accord. South Korean Foreign Minister Kim Sung Hwan said in January that “both sides basically share the view that a free trade agreement between South Korea and China is needed.”

Mr Chen said the world economic recovery is sluggish as the global

financial crisis endures. Trade protectionism is rising, he said.

Exports to China, South Korea’s largest market, increased 14.9 percent to US$134.2 billion in 2011 from a year ago, which accounted for 24.1 percent of South Korea’s total exports last year, according to a Korea Customs Service report on January 15.

Closer ties “South Korea can gain more access to the vast and fast-growing market and use closer ties with China as leverage against North Korea,” Mr Kwon at Samsung said. “For its part, China can boost its industrial competitiveness and increase its influence in Asia visa-vis the U.S.” For South Korea, makers of cars, electronics, chemicals and petrochemical products will benefit most from a trade pact while farmers and small manufacturers will be hit hard, Mr Kwon added.

China buys mostly cars and electronics from South Korea while selling mainly mineral products and electronic parts to South Korea, according to data compiled by the Korea Customs Service.

A free trade deal with China would boost South Korea’s economic growth by as much as 3 percentage

points and create as many as 330,000 jobs over a decade, South Korea’s finance ministry said in a statement yesterday.

Bond market Meanwhile, financial officials from China, Japan and South Korea are discussing boosting cooperation in investment in each other’s government bond markets, South Korean Deputy Finance Minister Choi Jong-ku told Reuters yesterday, without elaborating.

He was speaking after meeting officials from the neighbouring countries ahead of their talks with the 10 countries of the Association of Southeast Asian Nations (ASEAN) on the sidelines of the Asian Development Bank’s annual meeting in Manila.

“Whether an agreement will be announced is still subject to discussion among ministers tomorrow,” Mr Choi said, referring to a meeting of the three countries due early today in Manila.

One source who attended some of yesterday’s meetings said the three countries were discussing managing investments in each other’s bond markets in such a manner as to mitigate excessive fund flows at times of international market turbulence.

Bloomberg/Reuters

Fuel oil supply for Asia under risk

W

hile the potential loss of Iranian crude is keeping the oil market on its toes, traders seem to be relaxed about the impact on other parts of the barrel, with Asian fuel oil particularly at risk.

Several factors are likely to tighten Asia’s fuel oil markets in coming months.

So far, Iranian shipments of fuel oil don’t appear to have been disrupted as much as those for crude oil, and in some ways are slipping under the radar of Western sanctions.

Barclays Capital estimates that Iran ships some 500,000 tonnes a month of fuel oil, about 8 percent of the total sent to East Asia.

However, this could dry up if Western moves to prevent banks and insurers from dealing with Iran are successful in stopping the movement of tankers because of a lack of insurance and difficulties in settling payments.

At the same time, Barclays believes Saudi Arabian fuel oil consumption may rise in the northern summer as the kingdom

tries to limit the direct burning of crude during the peak summer electricity demand.

Saudi Arabia could become a net fuel oil importer over the summer, instead of being an exporter of around 775,000 tonnes a month, Barclays estimates.

If Saudi and Iranian supplies do dry up, it doesn’t take much to see that fuel oil cracks may once again head higher, and may even reach a premium to crude, as they did briefly at the beginning of January.

Reuters

Thursday May 3, 2012 business daily | 11

ASIA

Factories pick up steam, rocky road ahead Factory deterioration slowing down as new export orders pick up Anooja Debnath

M

anufacturers in Asia upped their tempo in April to meet growing demand from overseas, in a sign that while the road to recovery might be bumpy, the global economy remains on track and the worst has probably passed for China.

Optimism about a global rebound was boosted by a survey showing the pace of growth in U.S. manufacturing picked up last month, although debt-mired Europe remains a concern with more dismal numbers expected from the euro zone later.

An index of China’s manufacturing offered more evidence yesterday that the world’s second-biggest economy bottomed out in the first quarter of the year, while the pace of factory sector growth in emerging rival India ticked up.

The HSBC China PMI, which concentrates mainly on privately owned firms, remained below the 50 threshold that divides growth from contraction, for the six month running. But it improved to 49.3 in April from 48.3 in March, hinting that the rate of deterioration had slowed, and was stronger than the preliminary “flash” estimate released last week.

“The upward revision to April’s final PMI reading, compared to the flash estimate, confirms that the pace of China’s slowdown has stabilised,” said Hongbin Qu, chief economist for China & co-Head of Asian economic research at HSBC. The reading from the HSBC index was weaker than China’s official PMI, which soared to a 13-month high of 53.3 in April.

Many analysts view the first quarter of this year as the bottom of the down cycle for the Chinese economy.

Growth eased to a near three-year low of 8.1 percent in the first quarter versus a year earlier, the fifth straight quarter of slowing growth.

But not everyone is as optimistic.

Optimism about a global rebound was boosted this week

“It is way too premature, if not misguided, to conclude that China’s growth has distinctly bottomed and is poised for a strong bounce; especially in the context of external headwinds,” said Vishnu Varathan, an economist with Mizuho in Singapore.

He pointed out that, although new export orders rose, an overall slip in the new orders component pointed to a slowdown in domestic demand, adding that struggling smaller firms and a precariously poised global economy were also worrying factors.

“With U.S. ‘green shoots’ faltering and the European recession intensifying, sustained improvement in China’s manufacturing sector

is anything but a guarantee,” Mr Varathan said.

Exports support Bulging order books helped nudge India’s factory activity up even as slower output growth and increasing price pressures dampened sentiment, the business survey showed yesterday.

The HSBC PMI figure for India, compiled by Markit, rose to 54.9 in April from 54.7 in March and has held above the 50 mark for more three years now.

While new orders, including exports, grew at a healthy pace, price pressures refused to subside with output prices hitting a 13-month

high, signalling inflation was unlikely to fall any time soon.

Similar data released on yesterday showed manufacturing activity in Asia’s key exporters South Korea and Taiwan grew but at a slower pace. In South Korea, factory activity rose for the third successive month at 51.9 in April as new business continued to pour in.

While manufacturing output rose at its fastest rate since February last year, increasing domestic consumer confidence and easing conditions in key trading partners such as China, boosted demand for Korean goods and pushed the new export orders sub-index to its highest reading since July 2011 at 51.46.

Reuters

Bangkok Bank looks beyond the borders

GM proposed taking over one-third of Isuzu

B

G

angkok Bank expects loan demand to boost its earnings in 2012 and is looking for opportunities to strengthen its foreign operations before the formation of Southeast Asia’s single market in 2015, its executive chairman said yesterday.

Thailand’s top lender is on track to achieve its loan growth target of 6-8 percent this year when the country’s economy is expected to grow 5-6 percent, Kosit Panpiemras, a former finance minister, told Reuters in an interview.

“We expect the post-flood recovery to continue as the manufacturing sector is ramping up production to pre-flood levels,” he said. “It should be back to normal in the second quarter.”

The manufacturing sector faced serious disruption after flooding last year that inundated industrial

estates in central provinces. A quarter of affected factories are still closed.

After posting weak results for the fourth quarter because the floods hit loan demand and pushed up costs and provisions, most Thai banks reported a recovery in net profit in the first quarter, prompting earnings upgrades by many analysts.

Bangkok Bank, a benchmark for local industry, reported a 25 percent jump in first-quarter net profit. Its loan book grew 2.7 percent from the end of 2011.

As Southeast Asian countries will become a single market in 2015, the top lender is looking to strengthen its foreign businesses, Kosit said.

Bangkok Bank has 26 foreign branches in 13 countries, including a representative office in Myanmar, which was opened in 1995.

Reuters

eneral Motors Co first proposed taking a controlling stake of more than one-third in Isuzu Motors Ltd - an investment worth some US$3 billion - but is now seeking a smaller holding after the Japanese truck maker said it wanted to remain independent, a person with direct knowledge of the talks said.

GM is seen as eager to tap Isuzu’s strength in Southeast Asian markets and its diesel technology, and a deal would in many ways be a foray back to well travelled ground as the two companies were once equity partners for 35 years.

The U.S. automaker at one point owned as much as 49 percent in Isuzu before selling the holding down, disappointed with red ink spilled by Isuzu at the time and later strapped for cash of its own. Its last remaining 7.9 percent stake was

sold in 2006 for US$300 million.

Since emerging from its government-funded bankruptcy restructuring in 2009, GM has begun to forge some new alliances in efforts spearheaded by GM Vice Chairman Steve Girsky.

In March, GM agreed to pay US$423 million for a 7 percent stake in French automaker Peugeot SA. Last August, Girsky negotiated a tie-up with Korean conglomerate LG Corp to develop electric cars together.

The current talks are, however, still very much preliminary, said the person who declined to be identified because the discussions are private.

Isuzu said in a statement on Tuesday it was considering a wide range of partnerships, including but not limited to GM, adding that it had made no decision yet.

Reuters

12 |

business daily Thursday May 3, 2012

MARKETS Ticker NAME

Hang SENG INDEX Ticker NAME

PRICE

Day %

VOLUME

(H) 52W

(L) 52W

13

HUTCHISON WHAMPO

1398

IND & COMM BK-H

494

LI & FUNG LTD

PRICE

Day %

VOLUME

(H) 52W

(L) 52W

75.95

1.74146

8286635

93.1

53.6

5.23

0.965251

292296161

6.68

3.46

16.96

2.168675

23887587

20.15

10.82

1299

AIA GROUP LTD

28.2

2.173913

29251752

29.9

19.84

66

MTR CORP

27.9

1.086957

2439412

28.8

22.45

2600

ALUMINUM CORP-H

3.76

-0.265252

19767757

7.35

3.2

17

NEW WORLD DEV

9.96

2.998966

28158924

12.657

6.13

3988

BANK OF CHINA-H

3.26

0.3076923

251694118

4.36

2.2

857

PETROCHINA CO-H

11.72

-0.3401361

57646605

11.92

8.59

3328

BANK OF COMMUN-H

6.04

0.6666667

21553826

7.536

4.15

2318

PING AN INSURA-H

66.3

2.157165

13365300

85.45

37.35

29.25

1.036269

2785404

34.45

21.85

6

POWER ASSETS HOL

58.65

1.12069

2426984

64.8

52

15

-1.445466

14888189

17.54

11.38

83

SINO LAND CO

13.5

0.7462687

6284664

14.16

8.482

BOC HONG KONG HO

24.15

0.4158004

13970162

24.65

14.24

16

SUN HUNG KAI PRO

94.3

0.7478632

6030498

122.4

85.45

CATHAY PAC AIR

13.38

1.671733

5603921

20.15

11.8

19

SWIRE PACIFIC-A

92.2

0.6001091

1455577

102.539

69.321

4573343

122.6

79.1

700

TENCENT HOLDINGS

243.6 -0.08203445

3767166

247.8

139.8

32748317

11.66

6.59

322

TINGYI HLDG CO

20.75

0.2415459

15900333

26

17.84

339234047

7.48

4.41

151

WANT WANT CHINA

9.61

0.9453782

8348344

9.78

6.03

56920240

28.1

17.04

4

WHARF HLDG

47.1

1.727862

7374557

59

33.15

2.191235

4524060

35.85

19

1.687027

20512069

88

68.05

1.307967

22261901

17.86

9.99 6.22

23

BANK EAST ASIA

1880

BELLE INTERNATIO

2388 293 1

CHEUNG KONG

105

1.744186

1898

CHINA COAL ENE-H

9.03

1.346801

939

CHINA CONST BA-H

6.16

1.986755

2628

CHINA LIFE INS-H

21.45

2.142857

25.65 87.4 17.04

144

CHINA MERCHANT

941

CHINA MOBILE

688

CHINA OVERSEAS

386

CHINA PETROLEU-H

8.34

-0.2392344

59187453

9.67

291

CHINA RES ENTERP

28

-0.7092199

4926309

35.5

24

1109

CHINA RES LAND

15

0.4016064

7624332

15.6

7.28

836

CHINA RES POWER

14.06

-0.7062147

3938200

16.2

10.82

1088

CHINA SHENHUA-H

34.55

0.2902758

9289802

40.2

27.1

762

CHINA UNICOM HON

13.58

-1.594203

31062340

17.68

12.6

267

CITIC PACIFIC

12.86

0.6259781

4431217

23.25

10.26

2

CLP HLDGS LTD

67.15

1.053424

2460323

75.2

62.1

883

CNOOC LTD

16.78

1.451028

52007355

19.7

11.2

1199

COSCO PAC LTD

11.6

2.654867

4967428

16.5

7.52

330

ESPRIT HLDGS

16.38

2.375

4802369

32.85

7.55

101

HANG LUNG PROPER

28.7

0

7751586

35.3

20.85

11

HANG SENG BK

107.8

1.125704

2307312

125

84.4

12

HENDERSON LAND D

44.25

0.1131222

4168953

53.35

33.2

1044

HENGAN INTL

81.95

-0.2434571

1692400

83.45

56.8

3

HONG KG CHINA GS

19.88

0.2016129

7679062

20.65

16.68

388

HONG KONG EXCHNG

125.5

1.128122

3998043

178.6

99.15

5

HSBC HLDGS PLC

71.3

0.8486563

19930331

85

56

Shanghai Shenzhen CSI 300 NAME

INDEX 21309.08 52W (H) 23924.48 (L) 16170.35 MOVERS 38 9 1

IN FOCUS TW50 index performance - Last 5 trading days 5350 5310 5270 5230 5190 27-Apr-2011

5150

2-May-2012

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

AGRICULTURAL-A

2.73

0.3676471

124189592

CHINA STATE -A

3.38

0

101273917

PANGANG GROUP -A

7.86

-2.962963

78940670

AIR CHINA LTD-A

6.58

3.622047

28906684

CHINA UNITED-A

4.43

2.309469

109376627

PETROCHINA CO-A

9.93

0.2018163

12413525

NAME

NAME

VOLUME

ALUMINUM CORP-A

7.23

2.118644

32359906

CHINA VANKE CO-A

9.22

2.672606

91744306

PING AN INSURA-A

40.71

-1.165331

23419533

ANGANG STEEL-A

4.47

1.590909

17387059

CHINA YANGTZE-A

6.67

2.932099

32978329

POLY REAL ESTA-A

12.51

1.624695

42610530

ANHUI CONCH-A

17.7

1.316543

48402712

CITIC SECURITI-A

13.17

1.307692

131881696

QINGHAI SALT-A

33.62

0

4842743

BANK OF BEIJIN-A

10.59

1.631478

40592604

CSR CORP LTD -A

5.05

0.5976096

58856865

SAIC MOTOR-A

15.38

1.184211

19442706 35623574

BANK OF CHINA-A

3.07

0.6557377

28041621

DAQIN RAILWAY -A

7.57

1.338688

79722753

SANY HEAVY INDUS

14.13

-2.68595

BANK OF COMMUN-A

4.93

0.8179959

82660901

DATANG INTL PO-A

5.35

2.099237

12726280

SHANDONG GOLD-MI

35.13

0.9192761

9443800

BAOSHAN IRON & S

5.08

1.6

36741637

DONGFANG ELECT-A

22.87

2.235136

12687384

SHANG PUDONG-A

9.41

0.4268943

47114993 8279987

BBMG CORPORATI-A

8.57

1.300236

19236421

13.5

2.040816

22745645

SHANGHAI ELECT-A

5.74

1.234568

26.29

2.057453

4674095

GD MIDEA HOLDING

13.79

2.299703

17943639

SHANXI LU'AN -A

27.4

-0.6526468

6043554

CHINA CITIC BK-A

4.58

1.103753

32700413

GD POWER DEVEL-A

2.6

0.7751938

80475146

SHANXI XINGHUA-A

73.13

3.334746

1864129

CHINA CNR CORP-A

4.54

1.113586

70426981

GF SECURITIES-A

31.65

5.324459

19794828

SHANXI XISHAN-A

17.51

-0.680658

26229418

CHINA COAL ENE-A

9.8

3.923648

36103205

GREE ELECTRIC

22.17

1.279123

19552131

SHENZ DVLP BK-A

16.56

-0.1206273

16661706 38051020

BYD CO LTD -A

EVERBRIG SEC -A

CHINA CONST BA-A

4.77

-0.4175365

110504321

GUIZHOU PANJIA-A

33

6.348695

11455608

CHINA COSCO HO-A

5.46

2.824859

24848667

HAITONG SECURI-A

10.12

2.325581

116488458

CHINA CSSC HOL-A

36.81

-0.6209503

11473237

HANGZHOU HIKVI-A

46

-0.4113444

1907898

3.1

1.639344

37029363

TSINGTAO BREW-A

34.77

2.566372

3022520

64.2

-1.048089

5019795

WEICHAI POWER-A

33.12

-1.399226

6183169

CHINA EAST AIR-A

4.17

3.217822

38491179

CHINA EVERBRIG-A

3.07

1.320132

120241459

CHINA INTL MAR-A CHINA LIFE INS-A

HEBEI IRON-A HENAN SHUAN-A

SHENZEN OVERSE-A SINOVEL WIND-A SUNING APPLIAN-A

7.59

0.66313

16.09

1.899937

2024854

9.87

-5.278311

170761139

15.9

2.580645

16749653

HUATAI SECURIT-A

10.57

1.051625

39570861

WULIANGYE YIBIN

35.62

0.9065156

25761946

18.85

3.628367

25420849

HUAXIA BANK CO

11.07

-1.248885

85772906

XCMG CONSTRUCT-A

15.27

1.125828

15188451

CHINA MERCH BK-A

12.4

1.639344

71651380

IND & COMM BK-A

4.41

0.9153318

76211891

XINJIANG GUANG-A

24.1

-3.018109

13214307

CHINA MERCHANT-A

13.17

2.410575

25302909

INDUSTRIAL BAN-A

14.52

1.467505

102204331

YANGQUAN COAL -A

19.81

-0.2517623

13465685

CHINA MERCHANT-A

23.62

3.505697

14300991

INNER MONG BAO-A

77.1

8.637452

70842117

YANTAI CHANGYU-A

92.98

1.606382

1597365

CHINA MINSHENG-A

6.8

2.255639

243517965

INNER MONG YIL-A

22.26

1.044031

14119073

YANZHOU COAL-A

23.8

0.591716

5252807

6.91

2.522255

34327651

INNER MONGOLIA-A

6.24

3.482587

165008504

CHINA OILFIELD-A

CHINA NATIONAL-A

18.16

0.9449694

12328603

JIANGSU YANGHE-A

166.95

0.08992806

1467081

CHINA PACIFIC-A

YUNNAN BAIYAO-A

50.44

-0.335902

1734947

ZHONGJIN GOLD

23.08

0.1736111

12168482

22.26

2.486188

27099994

JIANGXI COPPER-A

27.66

6.139678

44569457

ZIJIN MINING-A

CHINA PETROLEU-A

7.34

2.228412

57816119

JINDUICHENG -A

14.89

4.638089

25240549

ZOOMLION HEAVY-A ZTE CORP-A

CHINA RAILWAY-A

2.78

1.831502

65465034

JIZHONG ENERGY-A

CHINA RAILWAY-A

4.5

2.505695

48945119

KWEICHOW MOUTA-A

21

4.842736

21364723

225.98

0.6323477

3533975

4.3

-1.826484

72342168

9.91

-1.783944

41611490

16.82

-2.152414

20932363

CHINA SHENHUA-A

27.62

2.714764

35489558

LUZHOU LAOJIAO-A

44.1

0.8461011

10668203

CHINA SHIPBUIL-A

6.08

0

22370555

METALLURGICAL-A

2.71

1.498127

37608360

CHINA SHIPPING-A

3.18

3.921569

30441252

NINGBO PORT CO-A

2.66

1.140684

26985768

CHINA SOUTHERN-A

4.98

2.680412

77354118

PANGANG GROUP -A

8.22

4.580153

106705701

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

6.1

-0.4893964

5826018

PETROCHINA CO-H

11.72

-0.3401361

57646605

CHINA MERCH BK-H

16.94

0.5938242

14823590

PICC PROPERTY &

9.94

2.158273

25531365

CHINA MINSHENG-H

8.16

1.36646

39949821

PING AN INSURA-H

66.3

2.157165

13365300

CHINA NATL BDG-H

10.34

-1.335878

25923368

SHANDONG WEIG-H

8.76

-2.341137

3604000

-0.4769475

5905494

SINOPHARM-H

20.4

0.2457002

4023878 1188000

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME CHINA LONGYUAN-H

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.65

-1.084011

183046175

AIR CHINA LTD-H

5.69

1.065719

27526823

CHINA OILFIELD-H

12.52

ALUMINUM CORP-H

INDEX 2683.487 52W (H) 3212.05 (L) 2254.567 MOVERS 273 18 9

NAME

3.76

-0.265252

19767757

CHINA PACIFIC-H

25.85

1.972387

10716688

TSINGTAO BREW-H

47.2

0.2123142

ANHUI CONCH-H

25.25

-2.884615

17542485

CHINA PETROLEU-H

8.34

-0.2392344

59187453

WEICHAI POWER-H

36.4

-0.4103967

2466603

BANK OF CHINA-H

3.26

0.3076923

251694118

CHINA RAIL CN-H

6.28

1.453958

34517245

YANZHOU COAL-H

16.62

2.466091

24157553

CHINA RAIL GR-H

ZIJIN MINING-H

BANK OF COMMUN-H

6.04

0.6666667

21553826

3.02

-1.948052

26931542

BYD CO LTD-H

20.5

0.2444988

1702034

CHINA SHENHUA-H

34.55

0.2902758

9289802

CHINA CITIC BK-H

5.04

2.024291

57086398

CHINA TELECOM-H

4.2

0.4784689

30849923

CHINA COAL ENE-H

9.03

1.346801

32748317

DONGFENG MOTOR-H

14.88

-2.745098

14755101

CHINA COM CONS-H

7.76

-0.5128205

10578668

GUANGZHOU AUTO-H

7.76

-9.872242

28138959

CHINA CONST BA-H

6.16

1.986755

339234047

HUANENG POWER-H

4.57

-0.6521739

27051780

CHINA COSCO HO-H

4.6

2.222222

22307820

IND & COMM BK-H

5.23

0.965251

292296161

21.45

2.142857

56920240

JIANGXI COPPER-H

19.36

3.198294

26916389

NAME

PRICE DAY %

CHINA LIFE INS-H

FTSE TAIWAN 50 INDEX NAME

2.766798

111656866

11.68

0.8635579

17226560

ZTE CORP-H

19.02

1.062699

4253792

INDEX 11145.96 52W (H) 13326.48 (L) 8058.58 MOVERS 25 15 0

NAME

PRICE DAY %

Volume

FAR EASTERN NEW

33.6

1.972686

5007385

SINOPAC FINANCIA

10.25

3.015075

FAR EASTONE TELE

64.6

1.732283

8013943

SYNNEX TECH INTL

70.3

2.627737

12863182 6012418

FIRST FINANCIAL

17.9

2.285714

13796728

TAIWAN CEMENT

35.55

2.008608

12505123

Volume

FORMOSA CHEM & F

84.9

0.2361275

3514456

TAIWAN COOPERATI

18.3

1.949861

5924175

35

4.477612

19601522

FORMOSA PETROCHE

91.7

0.880088

2433622

TAIWAN FERTILIZE

71.4

2

5200866

30.25

2.368866

26171931

FORMOSA PLASTIC

83

0

10058685

TAIWAN GLASS IND

30.8

5.841924

2058571

ASIA CEMENT CORP

35.7

1.564723

7587987

FOXCONN TECHNOLO

107

3.883495

21664285

TAIWAN MOBILE CO

94 -0.2123142

5725910

ASUSTEK COMPUTER

315.5

6.949153

12241981

FUBON FINANCIAL

31.3

2.791461

21478065

TPK HOLDING CO L

385

6.944444

5931153

AU OPTRONICS COR

13.7

4.580153

54824676

HON HAI PRECISIO

89.6

-3.030303

313997995

TSMC

88.4

1.843318

47571908

CATCHER TECH

200

6.951872

16945101

HOTAI MOTOR CO

CATHAY FINANCIAL

31.7

2.588997

14613260

HTC CORP

CHANG HWA BANK

16.55

2.160494

10030797

CHENG SHIN RUBBE

73.6

1.237964

CHIMEI INNOLUX C

12.85

ACER INC ADVANCED SEMICON

PRICE DAY %

Volume

2.6

ZOOMLION HEAVY-H

187

0.5376344

3193650

UNI-PRESIDENT

46.1

1.430143

17150797

472.5

6.659142

9210275

UNITED MICROELEC

15.55

1.633987

62745052

HUA NAN FINANCIA

16.6

2.469136

11547816

WISTRON CORP

44.95

2.508552

19372600

7814451

LARGAN PRECISION

496

6.896552

4135994

YUANTA FINANCIAL

14.1

0.7142857

34847774

6.198347

45780718

LITE-ON TECHNOLO

36.65

2.805049

4692722

YULON MOTOR CO

48.85

4.380342

10191073

7.56

2.162162

63810335

MEDIATEK INC

267

5.533597

20534516

CHINA STEEL CORP

29.25

0.6884682

15275861

MEGA FINANCIAL H

22.9 -0.8658009

24499703

CHINATRUST FINAN

18.85

1.072386

24683995

NAN YA PLASTICS

60.7

0.8305648

CHUNGHWA TELECOM

90.8 -0.6564551

17059162

PRESIDENT CHAIN

157.5

0.3184713

1468665

COMPAL ELECTRON

35.6

5.952381

22224319

QUANTA COMPUTER

81.2

5.729167

27842686

DELTA ELECT INC

92.8

6.912442

22239264

SILICONWARE PREC

35.75

3.174603

16126629

CHINA DEVELOPMEN

4641647

INDEX 5309.79 52W (H) 6247.96 (L) 4643.05 MOVERS 45 4 1

Thursday May 3, 2012 business daily | 13

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

Max 24.85

average 24.67

MeLCo CroWn entertaInMent

Min 24.50

24.90

40.80

14.7

24.82

40.64

14.6

24.74

40.48

14.5

24.66

40.32

14.4

24.58

40.16

14.3

24.50

Last 24.65

Max 40.80

SanDS CHIna LtD

Max 31.15

average 30.87

average 40.49

Min 40.00

Last 40.25

Min 30.60

Last 30.70

17.8

31.08

17.7

30.96

17.6

30.84

17.5

30.72

17.4

30.60

average 17.58

Min 17.30

Min 14.38

14.2

Last 14.66

traDe SuSpenDeD

Last 17.80

CURRENCY EXCHANGE RATES PRICE MAJORS

9.86 9.62 ASIA PACIFIC

9.38 9.14

2-May-2012

2-Apr-2012

8.90

MACAU RELATED STOCKS CROWN LTD

average 14.49

17.3 Max 17.80

10.10

ARISTOCRAT LEISU

Max 14.66

Wynn MaCau LtD

31.20

New World Development (17 HK) share performance

PRICE

40.00

SJM HoLDIngS LtD

IN FOCUS

NAME

MgM CHIna HoLDIngS

DAY % YTD %

(H) 52W

(L) 52W

VOLUME CRNCY

3.07

0.6557377

3.07

3.25

1.88

3161858

9.2

0.6564551

9.2

9.29

7.45

1369009

CROSSES

AUD HKD

DAY %

YTD %

(H) 52W

(L) 52W

AUD

1.0342

0.0774

1.3028

1.1081

0.9388

GBP

1.6213

-0.0493

4.3106

1.6618

1.5235

CHF

0.9124

-0.5042

2.8167

0.9596

0.7071

EUR

1.317

-0.5062

1.6125

1.494

1.2624

JPY

80.36

-0.336

-4.2932

84.18

75.35

MOP

7.9906

0.005

0.1126

8.0449

7.9823

HKD

7.7579

0.0039

0.1225

7.8113

7.7529

CNY

6.3075

-0.4772

-0.1982

6.5098

6.2769

INR

52.8775

-0.267

0.3546

54.305

43.855

THB

30.85

-0.389

2.269

31.96

29.63

SGD

1.2392

-0.2744

4.632

1.3199

1.1992

TWD

29.195

-0.185

3.713

30.715

28.48

PHP

42.22

-0.225

3.837

44.35

41.879

IDR

9204

-0.163

-1.4668

9367

8458

AUDJPY

83.073

-0.4093

-5.5867

88.637

72.057

EURCHF

1.20166

-0.0042

1.2591

1.28292

1.00749

EURGBP

0.81235

0.4579

2.59

0.90835

0.81156

EURCNY

8.3079

0.2576

-2.0908

9.6757

7.9674

EURMOP

10.5236

0.5131

-1.4605

11.9509

10.1015

EURJPY

105.83

0.1795

-5.8301

120.83

97.04

1.03

0

-0.0097

1.0311

1.0288

AMAX HOLDINGS LT

0.088

0

0.088

0.136

0.06

7685502

BOC HONG KONG HO

24.15

0.4158004

24.15

24.65

14.24

13970162

CENTURY LEGEND

0.26

1.960784

0.26

0.41

0.204

12000

CHEUK NANG HLDGS

3.21

2.229299

3.21

4.79

2.3

141028

CHINA OVERSEAS

17.04

1.307967

17.04

17.86

9.99

22261901

CHINESE ESTATES

10.82

1.121495

10.82

14.74

10.2

74000

CHOW TAI FOOK JE

11.72

0.3424658

11.72

15.16

11.46

4124000

EMPEROR ENTERTAI

1.41

-1.398601

1.41

2.09

0.97

1065000

FUTURE BRIGHT

0.99

-3.883495

0.99

1.06

0.3

8605800

GALAXY ENTERTAIN

24.65

1.649485

24.65

24.95

8.69

16519827

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

HANG SENG BK

107.8

1.125704

107.8

125

84.4

2307312

DOW JONES INDUS. AVG

US

13279.32

0.4971382

8.690449

13338.66016

10404.49

HOPEWELL HLDGS

20.85

0

20.85

24.903

18.56

1112000

NASDAQ COMPOSITE INDEX

US

3050.44

0.1339303

17.09268

3134.17

2298.89

HSBC HLDGS PLC

71.3

0.8486563

71.3

85

56

19930331

HUTCHISON TELE H

3.52

2.028986

3.52

3.6

2.13

8269972

4791.01

LUK FOOK HLDGS I

22.15

0

22.15

46.15

19.2

4903699

HKDMOP

World Stock MarketS - Indices NAME

FTSE 100 INDEX

GB

5795.44

-0.2888736

4.004827

6103.73

DAX INDEX

GE

6810.65

0.731528

15.46703

7600.410156

4965.8

JN

9380.25

0.3133371

10.93864

10255.15

8135.79

8.19

0.3676471

8.19

10.76

4.3

4919270

NIKKEI 225

MGM CHINA HOLDIN

14.66

1.947149

14.66

17.183

7.6

7797500

HANG SENG INDEX

HK

21309.08

1.018621

15.59417

23924.48047

16170.35

MIDLAND HOLDINGS

4.07

3.826531

4.07

5.878

2.95

1313874

CSI 300 INDEX

CH

2683.487

2.183038

14.39822

3212.055

2254.567

NEPTUNE GROUP

0.11

0

0.11

0.157

0.08

5000

NEW WORLD DEV

9.96

2.998966

9.96

12.657

6.13

28158924

TAIWAN TAIEX INDEX

TA

7676.81

2.333998

8.550949

9089.47

6609.11

SANDS CHINA LTD

30.7

0.6557377

30.7

33.05

14.9

17528335

MELCO INTL DEVEL

SHUN HO RESOURCE

1.19

0

1.19

1.32

0.82

0

SHUN TAK HOLDING

3.23

0.623053

3.23

4.686

2.241

4756290

SJM HOLDINGS LTD

17.8

4.460094

17.8

21

10.22

16305004

15.36

5.205479

15.36

18.5

9.8

4035055

SMARTONE TELECOM WYNN MACAU LTD

24.9

0

24.9

27.48

14.807

0

ASIA ENTERTAINME

5.74

-1.204819

5.74

10.8692

4.72

45646

BALLY TECHNOLOGI

48.15

-0.8238929

48.15

49.32

24.74

628632

BOC HONG KONG HO

3.05

0

3.05

3.16

1.81

4200

GALAXY ENTERTAIN INTL GAME TECH

3.19

0.9493671

3.19

3.2

1.08

18107

15.62

0.2567394

15.62

19.15

13.38

9027658

JONES LANG LASAL

80.62

0.850638

80.62

103.56

46.01

541661

LAS VEGAS SANDS

55.78

0.5226167

55.78

62.09

36.08

7604718

MACAU CAPITAL IN

0.11

0

0.11

0.11

0.11

500

MELCO CROWN-ADR

15.58

0.3865979

15.58

16.15

7.05

3338268

MGM CHINA HOLDIN

1.82

2.247191

1.82

2.21314

1.00254

200

MGM RESORTS INTE

13.29

-0.9687034

13.29

16.05

7.4

7983432

SHUFFLE MASTER

17.15

-2.942841

17.15

18.77

7.35

550938

2.22

0

2.22

2.64

1.28

250

134.71

0.982009

134.71

165.4931

101.02

1540027

SJM HOLDINGS LTD WYNN RESORTS LTD

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1999.07

0.8617602

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2229.09

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4835.5

3765.9 3217.951

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805.799

1.030112

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814.431

700.441 2695.06

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3499.2

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584.44

0.09

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na

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business daily Thursday May 3, 2012

Opinion

France and the Netherlands strike back Jean Pisani-Ferry

Director of Bruegel and Professor of Economics at Université Paris-Dauphine

I

n 2005, France and the Netherlands both voted no to a constitutional treaty for the European Union, derailing years of integration efforts. They seem to be poised to disrupt Europe once again.

On April 21, the Dutch coalition government collapsed, after rightwing populist Geert Wilders refused to endorse the spending cuts needed to limit the budget deficit to 3 percent of GDP. The next day, candidates who advocated backtracking on European integration captured onethird of the vote in the first round of the French presidential election. On May 6, France is expected to turn left and elect François Hollande, who questions the EU’s Germaninspired fiscal compact, agreed last December, and has called for Europe to emphasise growth.

These are the first skirmishes in a highly significant debate for Europe. The debate revolves around two major issues: austerity and integration.

Start with austerity. The question here is not whether deficits should be reduced. They must be, given the dire state of European public finances, and also because the countries whose competitiveness deteriorated during the first decade of monetary union must tighten fiscal policy in order to deliver the necessary adjustment of wages and prices.

Indeed, it is revealing that, as eurozone countries with severe external imbalances at the onset of the crisis have benefited from the European Central Bank’s wholesale liquidity provision, they have reduced their current-account deficits much less than non-euro countries in a similar situation.

Germany, the arch-advocate of austerity, is right on this point.

The problem is that austerity has perverse effects. Private and public deleveraging can hardly take place at the same time, unless trade partners generate demand for exports. Recession and price deflation reduce tax receipts and worsen the dynamics of public debt, threatening the return to sustainability. Moreover, deficit targets lead governments to respond to recessions by doubling down on austerity, generally without much regard for the adverse supply-side effects.

So there is a need to approach austerity and rebalancing strategically. And here, the EU has made three mistakes.

A row of mistakes First, finance ministers tried to reassure markets last October by demonstrating toughness and endorsing headline, instead of

cyclically adjusted, deficit targets.

This may be justified for a country on the verge of losing access to capital markets, but not for a country with relatively low debt and a moderate deficit. Ministers should change course and revert to their original 2009 commitment, which was to plan consolidation efforts and adhere to them through fluctuations and shocks.

Second, the eurozone still shies away from a comprehensive approach to its internal rebalancing.

Price competitiveness is a relative concept, not an absolute value, yet the policy discussion still ignores this basic fact. This is paradoxical, because the ECB’s policy framework provides clear guidance. The ECB is committed to 2 percent inflation in the eurozone as a whole, which implies that lower wage and price increases in southern Europe arithmetically mean higher wage and price increases in northern Europe. The wider the gap between the two, the sooner the rebalancing will be achieved.

It is time to say loud and clear that the ECB will fight hard to keep average inflation on target, and that northern Europe – especially Germany – will not attempt to counter higher domestic inflation as long as price stability is maintained in the eurozone as a whole. This would help significantly in mapping out a sensible rebalancing strategy.

The third mistake is one of omission: as ECB President Mario Draghi recently said, Europe has a fiscal compact, but lacks a growth compact. To be sure, there are

The question for the coming months is whether European leaders will have enough political capital to embark on further reforms and make the case for them to angry publics. If not, it is to be feared that they will agree only on platitudes and hope for the best

no quick fixes: headline-grabbing initiatives often fail to measure up to the challenge of reviving growth.

Nevertheless, serious discussion is needed concerning how to use the EU budget to enhance economic performance, rather than for redistribution only; how to foster pro-growth reforms at the national level; and how to boost investment in the periphery countries’ tradable sectors.

A credible growth compact would help to overcome immediate hurdles. After all, the post-war Marshall Plan was so successful not because of its size, but because it helped to counteract zero-sum games and self-fulfilling pessimism. That is a lesson to keep in mind today.

Attainable reforms?

But austerity is not the only dimension of the debate. Developments over the last two years have exposed the weaknesses of a bare-bones monetary union based only on a single monetary policy and fiscal discipline. While reforms enacted in the wake of the Greek crisis have equipped the eurozone with crisismanagement capabilities, more is needed to restore confidence, ensure financial stability, and ward off financial fragmentation.

A key characteristic of the European crisis has been the strong

correlation between banking stress and sovereign distress. Time and again, banks’ woes have affected governments’ borrowing costs, and concerns over governments’ solvency have affected banks’ balance sheets.

This major potential threat to financial stability has been alleviated, but not eliminated, by the ECB’s large-scale provision of liquidity. The recent reemergence of concerns about Spain has shown that the problem has not gone away.

Systemic reforms to resolve the problem all involve significant further integration: joint issuance of government bonds that play the role of safe asset in banks’ portfolios, a “banking union” with a common regime for deposit insurance, supervision, and crisis resolution – or both. Either one involves risksharing among eurozone members.

In France, the Netherlands, and elsewhere, many citizens view Europe as a threat to their way of life. Telling them that the euro is an unfinished construct that requires even more commitment is a hard call for politicians. The question for the coming months is whether European leaders will have enough political capital to embark on further reforms and make the case for them to angry publics. If not, it is to be feared that they will agree only on platitudes and hope for the best. © Project Syndicate

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Chief REPORTER Vitor Quintã Newsdesk Cláudia Aranda, Kristy Chan, Kelsey Wilhelm, Cherry Lee, Terina Cao, Tony Lai EDITION AT LARGE Michael Hoare Creative Director José Manuel Cardoso Designer Janne Louhikari 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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Thursday May 3, 2012 business daily | 15

OPINION

China’s population crash wires could upend U.S. policy Business Leading reports from Asia’s best business newspapers

Taipei Times

Taiwan’s President Ma Yingjeou said Tuesday night that the government will adjust electricity rates in three stages.

Prices will rise by 40 percent of the originally planned adjustment (nearly 26 percent) on June 10, and another 40 percent on December 10. The date for the remaining 20 percent will depend on whether the public is satisfied with staterun Taiwan Power Cos reform efforts, Mr Ma said. Rate hikes will not affect households and small businesses with electricity usage under 330 kilowatt-hours, Mr Ma pledged.

Asahi Shimbun

Analysts expect Japan’s gross domestic product to grow 0.8 percent in real terms, or an annualised 3.3 percent, in the first quarter of 2012 compared with the previous October-December period. The 15 leading private research institutes say consumer spending, which accounts for 60 percent of the GDP, was bullish, especially in the field of car sales.

The growth of consumer spending ranged from 0.4 percent to 1.1 percent, they said. Exports are also expected to recover in the January-March period.

The Straits Times

Prime Minister Lee Hsien Loong promised Singaporeans that they would take top priority in employment policies. Speaking on Tuesday to 1,600 unionists, employers and government officials gathered for the annual May Day rally, Mr Lee acknowledged that there are serious challenges ahead, particularly in lifting the earnings of lower-wage workers. But he said the government will seek to provide citizens with jobs and a share of the nation’s success.

Ramesh Ponnuru

Senior editor at National Review

I

t isn’t quite true that demography is destiny.

But if Nicholas Eberstadt is right, our destiny is going to be shaped by demography in ways we may not expect.

Eberstadt studies demographics for the American Enterprise Institute, and makes projections in full awareness that the field has gotten the future wrong before. In the 20th century, the global population increased almost fourfold, to 6.1 billion from 1.6 billion.

“Nothing like this magnitude or tempo of population change had ever previously been witnessed in the history of our species,” he has written.

It was reasonable to fear, as many people did during that period, that the result would be mass famines.

Instead, the world saw rising prosperity.

Today’s most important population trend is falling birthrates. The world’s total fertility rate – the number of children the average woman will bear over her lifetime – has dropped to 2.6 today from 4.9 in 1960. Half of the people in the world live in countries where the fertility rate is below what demographers reckon is the replacement level of 2.1, and are thus in shrinking societies.

A few predictions

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In the U.S., we are accustomed to thinking about how this trend affects the welfare state: Longer lives and fewer children make it harder to finance retirement programs. But the rest of the developed world is aging faster, and it’s worth thinking about how that will change America’s global

position, as well.

As Eberstadt points out, we can make predictions about the next 20 years with reasonable accuracy.

The U.S.’s traditional allies in western Europe and Japan will have less weight in the world. Already the median age in western Europe is higher than that of the U.S.’s oldest state: Florida. That median age is rising 1.5 days every week.

Japan had only 40 percent as many births in 2007 as it had in 1947.

These countries will have smaller workforces, lower savings rates and higher government debt as a result of their aging. They will probably lose dynamism, as well.

All these effects will, in turn, almost certainly make these countries even less willing than they already are to spend money on their armed forces. Americans who want Europe to bear more of the free world’s military burden – or even provide for its own defense – are probably going to be disappointed. So will those who expect Europe to take on humanitarian missions.

It won’t even be able to maintain its current weight in future debates about the values of peace and democracy.

But one country that worries American military strategists will also face serious demographic challenges.

China’s rise over the last generation has been stunning, but straight-line projections of its future power and influence ignore that its birthrate is 30 percent below the replacement rate.

The Census Bureau predicts that China’s population will peak in 2026, just 14 years from now. Its labor force will shrink, and its over-65

population will more than double over the next 20 years, from 115 million to 240 million. It will age very rapidly. Only Japan has aged faster – and Japan had the great advantage of growing rich before it grew old. By 2030, China will have a slightly higher proportion of the population that is elderly than western Europe does

change will pose two problems specific to China. Its society has relied heavily on trust relationships within extended-family networks.

In a country where fewer and fewer people will have uncles, those networks will rapidly atrophy. The government, meanwhile, relies for its legitimacy on a level of economic performance that

Demographic change will pose two problems specific to China. Its society has relied heavily on trust relationships within extended-family networks. In a country where fewer and fewer people will have uncles, those networks will rapidly atrophy

today – and western Europe, recall, has a higher median age than Florida.

China’s challenges China, notoriously, has another demographic challenge. The normal sex ratio at birth is about 103 to 105 boys for every 100 girls.

In China, as a result of the one-child policy and sexselective abortion, that ratio has been 120 boys for every 100 girls. From 2000 to 2030, the percentage of men in their late 30s who have never been married is projected to quintuple.

Eberstadt doesn’t believe that having an “army of unmarriageable young men” will improve the country’s economy or social cohesion.

He thinks demographic

demographic trends imperil.

All in all, Eberstadt concludes, “we might want to have some additional new friends and allies in the world.” America’s growing ties to India, a nation he describes as “aging moderately,” strike him as promising. But he warns that it has not made the most of its population: “India has an appalling education deficit.”

Foreign-policy thinkers can often lose sight of demographic trends, Eberstadt says, because from a policy makers’ view “they tend to look really glacial. If it’s not happening in the next 48 to 72 hours, it’s not in the inbox.” But “population change gradually and very unforgivingly alters the realm of the possible.”

Bloomberg View

16 |

business daily Thursday May 3, 2012

CLOSING Korea to start emissions trading

Euro falls on weak manufacturing data

South Korea will launch a national emissions trading scheme in 2015 after parliament approved the scheme yesterday. The programme starts January 1, 2015, and will cover more than 450 firms or operations emitting more than 25,000 tonnes of carbon dioxide (CO2) per year. These represent 60 percent of South Korea’s total greenhouse gas emissions of about 600 million tonnes a year, a little larger than Australia’s. The first phase will be in 2015-2017and all sectors will be covered, even buildings such as universities, waste disposal sites and big amusement parks.

The euro fell yesterday against the dollar after weak manufacturing data raised concerns about the euro zone economy and was vulnerable before elections in France and Greece which could dent austerity plans. The factory number contrasted with better U.S. manufacturing data and weighed heavily on the euro, particularly given that purchasing managers data were weak not just in indebted peripheral euro zone countries but in France and Germany too. The euro fell 0.75 percent to hit US$1.3134, its lowest in more than a week.

Almost 17.37 million men and women were out of work in March

second rise in 25 months.

“With unemployment rising and industry slumping, a prolonged recession looks much more likely,” they concluded.

‘Flawed strategy’

Record eurozone jobless rate Job figures underline the growing economic strains in Europe

A

slowing eurozone economy pushed unemployment to a record 10.9 percent in March, highlighting the growing pressure on governments to go for growth rather than more austerity.

The figures, up from 10.8 percent in February, coincided with a survey showing manufacturing in the 17-nation eurozone stumbling to near three-year low levels as spending cuts and tax rises push the bloc towards recession.

Almost 17.37 million men and women, 169,000 more than in February, were out of work in March, according to the Eurostat data agency.

The Markit Purchasing Managers’ Index, a closely watched indicator, fell sharply to 45.9 from 47.7 in

March, signalling contraction of the manufacturing sector for a ninth month running.

“Manufacturing in the eurozone took a further lurch into a new recession in April, with the PMI suggesting ... output fell at (a) worryingly steep quarterly rate of over 2.0 percent,” Markit chief economist Chris Williamson said.

“Austerity (policies) in deficitfighting countries is having an increasing impact on demand across the region (while) ... even German manufacturing output showed a renewed decline,” Mr Williamson said.

With elections in France and bailedout Greece on Sunday turning on what governments can do to restore

growth as a way out of the eurozone debt crisis, analysts said the latest data clearly shows the challenges ahead.

The jobless and manufacturing figures “underline the enormity of the challenge facing policymakers to respond to the growing calls for growth across the region,” Capital Economics said in a client note.

It pointed out that even though southern eurozone countries were worst affected – with Spain’s jobless rate 24.1 percent according to Eurostat – there were signs of stronger states such as Germany coming under pressure too.

Europe’s powerhouse had a jobless rate of 5.6 percent in March, they said, but a headline increase of 19,000 was only the

May Day protests across Europe on Tuesday picked up on the theme, with calls for the focus to be put on jobs as the best way forward and too much austerity only making problems worse.

Sony Kapoor, head of the ReDefine think-tank, said recent data confirmed that the eurozone crisis is deepening and its leaders have to change course.

“The question is how long EU leaders will continue to pursue a deeply flawed strategy in the face of mounting evidence that this is leading us to social, economic and political disaster,” Mr Kapoor said.

He said that austerity policies cannot work for the whole EU and called for adoption of a “growth pact” which it needs “more than anything else in order to stem the downward spiral of falling growth, rising unemployment and weakening banking systems that has currently taken hold.”

European Central Bank head Mario Draghi recently called for just such a growth pact to sit alongside the fiscal compact agreed earlier this year to tighten fiscal discipline across the EU. However, Mr Draghi was careful to note that a growth compact could not be based on additional stimulus spending and would have to rely on structural reforms – a point quickly made by German Chancellor Angela Merkel.

AFP

Chen to stay in a safe place, China reassures US Clinton first official statement about the deal made with the Chinese authorities

S

ecretary of State Hillary Clinton, in the first substantive remarks made on record by a US official, pledged that the United States would remain “committed” to Chen Guangcheng after a deal with China on his safety.

Ms Clinton, who is on a visit to Beijing, confirmed the earlier accounts by US officials that China had reached “understandings” on the treatment of the 40-year-old activist who said that he suffered severe beatings under house arrest.

“Mr Chen has a number of understandings with the Chinese government about his future, including the opportunity to pursue higher education in a safe environment. Making these commitments a reality is the next crucial task,” Ms Clinton said in a statement.

Earlier, explaining the case in detail for the first time, a senior US official said, on condition of anonymity, that Mr Chen agreed to leave the embassy yesterday after “a number of understandings”, adding the activist made no request to leave the country.

Mr Chen, who riled Chinese authorities by exposing forced abortions and sterilisations under the “one-child” policy, fled house arrest on April 22 and sought refuge in the US embassy where he demanded assurances on his freedom.

“China acknowledged that Mr Chen will be

treated humanely while he remains in China,” the official said.

“When he leaves the hospital, the Chinese authorities have stated that Mr Chen and his family will be relocated to a safe environment so that he may attend a university to pursue a course of study,” the official said.

The official said that China also agreed to allow US embassy officials including doctors to see Mr Chen while he remains in a Beijing hospital.

The activist, who has been blind from childhood, said at the embassy that he climbed over eight walls during his escape and injured his foot on one of the walls at his home, according to US officials.

The foot injury requires medical attention but is not life-threatening, the officials said.

“The United States government and the American people are committed to remaining engaged with Mr Chen and his family in the days, weeks and years ahead,” Secretary Clinton also said.

Any renewed abuse against Chen could prove to be a political nightmare for President Barack Obama’s administration, which has faced calls to show its commitment to safeguard human rights in China.

AFP

Secretary of State Hillary Clinton pledged that the U.S. would remain ‘committed’ to Chen Guangcheng