Year I Number 166 Tuesday November 20, 2012 MOP 6.00 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte
Cash handout brings residents no satisfaction Page 6
www.macaubusinessdaily.com
Big helping of tourism good for food makers Page 7 I SSN 2226-8294
Low taxes – right road for economic diversity Y
ear-on-year gaming revenue growth is likely to stabilise at a one-digit level next year, said Secretary for Economy and Finance Francis Tam Pak Yuen yesterday. But the government will continue to rely heavily on casino tax for its revenue, he confirmed. The dependence has its risks, legislators warned during the preliminary discussion of the public budget for 2013. But the situation will not change in the next few years, Mr Tam admitted. Authorities are keen on keeping “the lowest corporate tax in the region” to encourage economic diversification, stated Mr Tam. He said the policy had already paid off with the “fast” development of hotels and the retail trade. But the Legislative Assembly is also worried about an “alarming” rise in public spending, which is set to reach 82.5 billion patacas, twice as much as in the 2010 budget. Furthermore, most of the money will go towards running costs. Even though there are big public projects ongoing, the public investment budget will fall by 1.9 billion patacas. More on page 3
HANG SENG INDEX 21300
US$800 mln boutique casino hotel for Cotai Visitors spend more on hotel rooms, meals
21260
21220
21180
21140
Page 3
November 19
HSI - Movers Name
Sky’s the limit for India-Macau flights
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A regulatory filing early today confirmed Business Daily’s exclusive September story about plans to raise US$800 million (6.39 billion patacas) for a boutique-style casino hotel on land adjacent to the One Oasis residential project on the Cotai-Coloane border. Up to US$200 million of the project costs will be raised by a share placement in Hong Kong led by CLSA Asia-Pacific Markets. It will be achieved by injecting the project into Paul Y. Engineering Group Ltd – a company already listed on the Hong Kong Stock Exchange. The scheme could start breaking ground early next year, with the aim of opening in the fourth quarter of 2015 or early 2016. The project already has access to land and will not rely on a land concession from the Macau government.
New bank rules mean top heavy management Page 5
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%Day
COSCO PAC LTD
5.92
WANT WANT CHINA
3.65
LI & FUNG LTD
2.65
CHINA UNICOM HON
2.61
SINO LAND CO
2.14
TENCENT HOLDINGS
-0.89
ALUMINUM CORP-H
-1.21
TINGYI HLDG CO
-1.50
PING AN INSURA-H
-1.93
SUN HUNG KAI PRO
-0.72
Source: Bloomberg
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business daily November 20, 2012
macau Japan pachinko maker’s shares dip Shares in Kazuo Okada’s Universal Entertainment have fallen on reports that one of its affiliates made illegal payments to an associate of the former head of the Philippine gaming regulator. The Reuters news agency reported that the firm controlled by the former Macau casino investor made payments of US$5 million (40 million patacas) in 2010 to win concessions for the project. Its shares fell 11 percent to 1,499 yen (147.5 patacas) in Tokyo trading. In February Wynn Resorts Ltd cancelled Mr Okada’s 20 percent stake in the Las Vegas- and Macau-based casino company amid claims that he had made “improper” payments to Philippines regulators.
Upmarket casino hotel planned next door to One Oasis residential site (Photo: Manuel Cardoso)
Boutique casino scheme to issue shares in Hong Kong US$800 million project planned for Cotai borders could break ground early next year Michael Grimes
michael.grimes@businessdaily.com
A
regulatory filing early today confirmed Business Daily’s exclusive September story about plans to raise US$800 million (6.39 billion patacas) for a boutiquestyle casino hotel on land adjacent to the One Oasis residential project on the Cotai-Coloane border. The scheme could start breaking ground early next year, with the aim of opening in the fourth quarter of 2015 or early 2016. The project already has access to land and will not rely on a land concession from the Macau government. Of the US$800 million capital cost of the new boutique project, US$550 million is for development and construction, and US$250 million is
to buy the land from the One Oasis consortium and for the gaming licence. None of the consortium members on the residential scheme are involved as investors in the casino project. The One Oasis consortium included Hong Kong-listed Success Universe Group, a 49 percent joint venture partner in Ponte 16, an SJMlicensed gaming resort that opened in February 2008.
Gaming licence No announcement has yet been made about which of Macau’s gaming concessionaires and subconcessionaires will supply the project’s gaming licence. The licensee
in the boutique project will also take a percentage of gaming revenue. The going market rate in the case of the service provider agreements arranged by SJM is five percent of mass-market gross gaming revenue and three percent of VIP GGR. Of the total capital cost, US$500 million will be in equity – US$300 million of that from core investors (including US$150 million from a sovereign wealth fund) – and up to US$200 million in a share placement by CLSA Asia-Pacific Markets. That will be achieved by injecting the project into Paul Y. Engineering Group Limited – a company already listed on the Hong Kong Stock Exchange – and then issuing shares –
in what’s known as a ‘very substantial acquisition’. There is also provision for up to US$300 million in debt from as yet unnamed sources if the project requires it. The Hong Kong Stock Exchange filing released yesterday says PYE – a Hong Kong based construction and property management company – is indirectly to acquire land “on the Cotai Strip in Macau, on which it is proposed to construct and operate a five-star hotel with ancillary retail and entertainment facilities (including but not limited to gaming).” PYE added in the filing it intends to reduce its reliance on construction and property and distribute to PYE shareholders 49 percent of the intermediate holding company of those businesses. PYE initially plans to raise HK$800 million (US$100 million) via a share issue for the casino project, with up to an additional HK$2.4 billion (US$300 million) coming from convertible bonds. CLSA is to be the placing agent according to the filing. Depending on demand CLSA might issue additional shares with a gross value of HK$400 million and a further tranche of convertible bonds up to HK$1.2 billion.
New project promises luxury setting The high-end casino property planned for next door to One Oasis will have 236 rooms and around 66 tables. Fifty of the tables will be for so-called premium mass players – cash players betting as much as HK$10,000 per hand. The remaining 16 tables will be for traditional creditbased junket play, to be managed by one of the local junket investors. The hotel tower will be coloured red to stand out against the Cotai skyline. Its standard rooms will be 2,200 square feet (204 sq. metres). There will also be 14 suites of 5,000 sq. ft, and several of 15,000 sq. ft. The name of the hotel partner has not yet been made public. It will be the seventh new build Cotai scheme announced
or (in the case of Studio City) re-started in the past three years. It comes at a time when the government is publicly committed to cooling the growth of the Macau market. Unlike the MGM China Ltd and SJM Holdings Ltd Cotai applications however that needed government land concessions that were formally approved (though not gazetted) last month, the boutique project already has the land as well as gaming permission, say the principals. After the acquisition Paul Y. Engineering Group’s current chairman James Chiu will step down and Stephen Hung and Peter Coker will take up positions as joint chairmen of the company. Mr Hung, a former co-head of investment banking for Asia at Merrill Lynch, is also vice chairman
of Rio Entertainment Group, the holding company that operates Rio Hotel & Casino in Macau under a Galaxy Entertainment Group gaming licence. Mr Coker is the managing partner of Pacific Advisers, and is also a partner of TDR Capital Investment Ltd, a Shenzhen-based private equity firm. Walt Power will take the role of executive director and chief executive of PYE. Mr Power, who has been a casino executive in Macau since 2003, is formerly chief operating officer of New Cotai Entertainment, an investor in the original Macau Studio City project. Before that he was senior vice president of operations at Venetian Macau Ltd. M.G.
November 20, 2012 business daily | 3
MACAU
Legislators worry over rapid increase in public spending forecast for 2013
Reliance on gaming tax stays – for now: Tam Low taxes on emerging industries essential for economic diversification, says secretary Stephanie Lai
sw.lai@macaubusinessdaily.com
T
he Legislative Assembly gave preliminary approval to the government’s budget for 2013 yesterday. The administration is expected to have an income of more than 134.8 billion patacas (US$16.8 billion). That’s up by 17 percent compared to this year. Much of that revenue will come from gaming taxes levied at 35 percent of the gross amount gambled in the city by visitors. Macau’s public spending for 2013 is estimated at 82.5 billion patacas, an increase of 6.7 percent from the 2012 budget. It will mean another year of surplus in the public finances, with around 38 percent of public revenue for the year left over for investment. Direct gaming tax could reach 92.4 billion patacas, 7.4 billion patacas more than this year’s estimate. It will continue to dominate the government’s revenue, Francis Tam Pak Yuen, Secretary for Economy and Finance, told legislators yesterday.
The Macau administration also charges another four percent in indirect taxes on gambling. Some legislators have criticised the administration for the city’s over dependence on gaming tax. But Mr Tam said there is “a long way to go” before gaming tax dwindles as a component of public finance. “The big proportion of over 60 percent of gaming tax in our total revenue will last for the coming years,” the secretary admitted. Direct taxes on gross gaming revenue accounted for a massive 84.3 percent of all government income during the first 10 months of this year. “In the past few years, we see that the development of sectors like hotels and the retail trade is fast, but their contribution to public revenue is not that high,” said Mr Tam. “We’ve got the lowest corporate tax in the region [a progressive rate of nine to 12 percent] because we
want to use it to encourage economic diversification,” he stressed. Gross gaming revenue per month in 2013 will be around 22 billion patacas, the budget estimates, down from this year’s average of 24 billion patacas. Despite the conservative prediction, the secretary expects yearon-year gaming growth to stabilise at a lower level than the double-digit pace seen earlier this year.
Wild spending Legislators from the Federation of Trade Unions and assembly vicepresident Ho Iat Seng expressed concerns over the rapid rise of public spending, which has more than doubled between 2010 and next year’s budget. “The rise in public spending is alarming … within six years, the average growth rate of expenditure hit 27.9 percent,” noted trade union legislator Lam Heong Sang, “which is
higher than the average growth of 22.1 percent for [government] revenue.” Mr Ho said the government has to watch out for rapid spending growth, mentioning the budgets of the Transport Bureau and Macau Prison as bad examples. “From 500 million patacas for the Transport Bureau in 2011 to 2 billion patacas next year; the rise is scary,” he stressed. “But do we see a respective rise in the public transport quality? People drafting the budget plan ought to directly explain to us what accounts for this shocking one billion patacas rise in spending, which does not include the [Light] Rapid Transit,” he said. Most of the spending (77.9 billion patacas) will go towards running costs, which include salaries and benefits for public servants. When compared with this year, the highest spending hikes in areas run by Mr Tam’s department and in social security. Spending under these headings will reach 16.3 billion patacas (up by 34.9 percent) and 18.1 billion patacas (up by 22 percent) respectively. The public investment budget amount for 2013 – including the LRT elevated railway, public housing, the new urban reclamation plan and the Hengqin cooperation project – will total 17.9 billion patacas, down by 1.9 billion patacas from this year. Chan Hon Kit, coordinator of the Infrastructure Development Office, said the drop is due to payments for projects like University of Macau’s seabed tunnel (386 million patacas) and several public housing projects being processed this year.
We’ve got the lowest corporate tax in the region because we want to encourage economic diversification Francis Tam Pak Yuen, Secretary for Economy and Finance
Room rate rise fuels spending by tourists Almost half of what visitors spend goes on board and lodging Vítor Quintã
vitorquinta@macaubusinessdaily.com
W
hile shopping still opens their wallets wide, visitors are spending more of their money on expensive hotel rooms, official data show. Tourist spending, excluding gambling expenses, amounted to 13.3 billion patacas (US$1.7 billion) in the third quarter of his year, 10 percent more than a year before, the Statistics and Census Service announced yesterday. Visitor arrivals in the third quarter dropped by 1.7 percent but spending per head rose by 12 percent to 1,822 patacas. Most of the increase in spending was due to greater outlays on things other than shopping. Such outlays rose by 16 percent to 952 patacas per head, the most since the Statistics and Census Service began collecting data in 2010.
Almost half of that money was spent on accommodation, which cost each visitor 460 patacas, on average, 20 percent more than a year before. The increase is not surprising, considering that hotel room rates were 7.2 percent higher in the first nine months of this year than in the equivalent period last year, according to the Macau Hotel Association. However, the average spending figure is conservative because it includes spending by day-trippers, who account for about half of all tourists. Visitor spending on food and drink rose by 16 percent to 348 patacas per head. The annual rate of food price inflation was 8 percent. With board and lodging prices rising, the gap between the spending of overnight visitors and that of daytrippers grew bigger than ever. Visitors that stayed the night spent
The spending gap between overnight tourists and day-trippers has never been wider
11.3 billion patacas while those that came and went the same day spent just 2 billion patacas. Spending per head by overnight tourists increased by 13 percent to 3,081 patacas but spending per head by day-trippers decreased by
15 percent to 549 patacas. Tourists spent 7 percent more on shopping, splashing out an average per head of 869 patacas, of which they spent 27 percent on goods made in Macau and 19 percent on jewellery and watches.
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business daily November 20, 2012
macau
India, Macau keen on lifting limits on flights Now that low-cost airline SpiceJet intends to begin services to Macau, there is a desire for a more open market for India-Macau flights Vítor Quintã
vitorquinta@macaubusinessdaily.com
T
he advent of long-awaited direct flights between India and Macau is closer, and the Indian and Macau governments are keen on amending a 14-year-old agreement that allows only two flights a week. In an interview with India’s Business Standard, the Indian minister of civil aviation, Ajit Singh, confirmed that low-cost carrier SpiceJet Ltd, India’s third-largest airline by market share, has been granted permission to fly between New Delhi and Macau. But the Civil Aviation Authority of Macau told Business Daily that it had yet to be informed of this, and had yet to receive any application to operate scheduled air services from India. “If an airline would like to operate between India and Macau, the airline needs, first of all, to be designated by their aeronautical authorities,” said an official of the Civil Aviation Authority of Macau. The present bilateral air services agreement between India and Macau, signed in February 1998, allows only two designated airlines to put on flights. “We have so far not received any notification from the Indian aeronautical authorities about their designation of an Indian airline on the India-Macau route,” the official said. Only once notific ation was
We have so far not received any notification from the Indian aeronautical authorities about their designation of an Indian airline on the India-Macau route Indian low-cost airline SpiceJet could soon begin direct flights to Macau
Macau’s Civil Aviation Authority received could an airline apply to put on flights, she said. Business Daily asked SpiceJet and the Indian Ministry of Civil Aviation to comment but had received no reply by the time we went to press. The present air services agreement allows only two return flights per week by each side, together carrying no more than 600 passengers. The Indian and Macau governments agree that this may soon be insufficient. “With the increase of Indian tourists to Macau, the present
bilateral air services agreement provisions should be renewed so the future air transport market between the two places has room to develop,” the official of the Civil Aviation Authority said. The authority had raised this issue with its Indian counterpart “some years ago” and had raised the possibility of “liberalising traffic rights”, the official said. “The Indian aeronautical authorities have given us their positive response and we are now awaiting their reply on their schedule for the
Green fund plays hard to get O nly one-third of all bids for grants from the government’s Environmental Protection and Energy Conservation Fund have been accepted, the government has said, and the application period has been extended for another year. The deadline for applications for money from the 200 million pataca (US$25 million) fund, created in September last year, was originally this December but has been put back to the end of
next year, according to yesterday’s Official Gazette. By the end of September the fund had received over 1,300 applications, the Environmental Protection Bureau told Business Daily. However, the bureau has approved only about 500 or more, which are together worth more than 52 million patacas. By the end of May the fund had received more than 500 applications, the bureau told our sister-publication, Macau Business. Over 200, together
worth close to 30 million patacas, were approved. The fund subsidises the acquisition by companies and associations of environment-friendly technology, equipment and other products. Most of the grants are for energysaving lighting, kitchen extractor hoods, water-saving devices and induction cookers. The fund offers grants of up to 80 percent of the acquisition cost, up to a maximum of 500,000 patacas per grant, but it does not
negotiation date,” she said. Mr Singh, the Indian minister of civil aviation, told the Business Standard that his ministry “will be seeking more traffic rights” to Macau. “We would explore possibilities of enhancing additional traffic rights with those countries with whom existing rights have almost been exhausted on both sides,” he said.
cover construction, installation or refurbishment costs. The bureau said the fund “has played an effective role in promoting the acquisition or replacement of products or equipment with environment-friendly and energysaving impact”. The bureau said it would “continue strictly abiding by the assessment rules” but also “constantly improve on the application procedures to ensure the fund is well spent”. V.Q.
November 20, 2012 business daily | 5
MACAU Crocodile revenue drops in HK, Macau The weakening economic growth in mainland China since the beginning of 2012 has pushed the revenue of Crocodile Garments Ltd in Hong Kong and Macau down by 2 percent in the year ending July 31, the clothing retailer told the Hong Kong Stock Exchange last week. The results were also affected by a sales network restructuring due to “everraising rental expenses” and “the unexpected late coming of the chilly weather” last year, which “dragged down the sales of high-end fall/winter items,” the company said.
New standards making banks more top-heavy Employees such as risk analysts and compliance officers are swelling the ranks of management as the banking industry evolves Vítor Quintã
vitorquinta@macaubusinessdaily.com
T
he number of directors and managers of banks grew much faster in the year ended September than the number of staff, owing to changes in corporate governance in the industry. The banking industry had 1,158 directors and managers at the end of September, 13.1 percent more than a year before, the Statistics and Census Service announced in a recent report. The number of clerks fell by 0.4 percent to 2,347 in the year ended September while the number of tellers rose by 2.3 percent to 861. The number of people the industry employed rose by 2.9 percent to 5,317. Top-ranking and middle-ranking executives accounted for more than one in every five banking workers. A banker who asked not to be identified told Business Daily that the swelling of the management ranks was due to the introduction here of international standards. “There has been a fundamental change in corporate governance, with an increased segregation of functions and a more important role for risk analysts and compliance officers,” the banker said. The Statistics and Census Service said banking was unlike other industries, where staff turnover was fast. “The mobility of human resources is stable,” it said. The employee turnover rate rose by
The average salary of a bank teller is rising but was still just 12,330 patacas in September
0.2 percentage point to 5.7 percent. Banks were also less worried about a shortage of staff, as the number job vacancies fell by 8.3 percent to 155. Of those openings, 82 were for clerks, including 45 for bank tellers.
Averse to technology Our source in the industry said banks had “learned to live with the staff they have” but that they still suffered “some headaches”, especially in finding specialists. Of all positions for specialists,
7.2 percent were vacant. In no other category of employment in banking was the vacancy rate so high. Our source said using technology more, including changing to online banking, could get round the shortage of workers but that most customers were “still very reluctant” to do their banking without face-to-face contact. He said banks preferred to attract workers by raising pay. The average monthly pay of full-time employees of banks rose by 6.3 percent to 21,150 patacas (US$2,650).
But this average is inflated by the salaries of directors and managers, which rose by 2.3 percent to 41,700 patacas, on average. In contrast, the average salary of a bank teller rose by 6.8 percent to 12,330 patacas. Of all positions for clerks, 92.7 percent required knowledge of Mandarin and 70.7 percent required proficiency in English. But the average salary offered was not much higher than the median salary in all sectors of the economy, which was 11,000 patacas.
Interest rates to rise within 2, 3 years BNU’s mortgage loans up by 20 percent this year, CEO says
M
acau banks’ interest rates will remain low during at least the next two years, the chief executive of Banco Nacional Ultramarino SA (BNU), Pedro Cardoso, told the Portugueselanguage Rádio Macau. But the executive said he was confident that interest rates, currently being kept down through the indirect peg between the Macau pataca and the United States dollar, would rise in the medium-term. “I am an optimist and I believe that within perhaps two to three years we will surely have flat interest rates on a growth trend and that will obviously bring significant changes in
the behaviour of both customers and the banking institutions,” he said. BNU’s mortgage loans are up by 20 percent so far this year, Mr Cardoso revealed. He also disclosed that BNU is testing portable terminals for automatic payment. “It’s extremely convenient for whoever goes to a restaurant or a café to be able to pay while seating down, without having to hand out the card to a waiter and let the card out of his or her sight,” he stressed. But the bank executive argued that Macau customers should be allowed to pay for purchases with debit cards, not just credit cards. V.Q.
BNU’s chief executive, Pedro Cardoso
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business daily November 20, 2012
macau New UM faculty already has dean The dean of University of Macau’s new Faculty of Health Sciences has already been hired, vice-rector Rui Martins said on Sunday, quoted by the Portuguese-language newspaper Hoje Macau. The unnamed United States-based scholar will move to the territory next year, in time to launch the faculty’s operations at the new Hengqin Island campus. The relocation of the university will also involve the hiring of more professors for the new faculty and also for other study programmes, Mr Martins said.
Residents wealthier but no less grumpy The Macau Happiness Index has fallen despite economic growth and bigger cash handouts Tony Lai
tony.lai@macaubusinessdaily.com
the third quarter this year, 30 percent more than in 2010, official data show. The economy grew by 27 percent in 2010 and 20.7 percent last year. “But the survey shows this has not led to much change in the index,” Ms Chan said. “This means money alone cannot satisfy residents.” She said only 50.5 percent of interviewees thought cash handouts made them happier, while 47.5 percent were indifferent to them. She said cash handouts “merely gave a thrill” to residents. Only 31.8 percent said the happiness brought by cash handouts lasted longer than three months, while almost 60 percent said it lasted less than three months.
They gave the government a score of 5.1 out of 10 for its housing policy, making housing policy the least satisfactory of all government policies for the third consecutive year. Ms Chan blamed this on rising prices and the closing of the waiting lists for public housing. “It’s good that the administration will re-open applications in the first quarter next year, but it must provide a concrete timetable for when and how many public houses will be built to give residents a clearer picture,” she said. She proposed that the government, as a stop-gap measure, let out the 2,000 one-bedroom flats in subsidised housing that it has yet to put up for sale because of insufficient demand.
Housing urgent
Concern about housing prices is not eased by cash handouts, Melinda Chan says
E
conomic growth and grants from the government do not necessarily mean Macau residents are happier, according to the results of a survey released yesterday. The Macau Happiness Index is based on the results of the survey, carried out in September by the Macau Polling Research Association for the Sin Meng Charity Association. The index is now at 71.2 points out of 100, 0.4 point lower than a year ago. The pollsters asked 1,505 residents aged 14 or older how happy
they were and how satisfied they were with government policies. Legislative Assembly member Melinda Chan Mei Yi, who chairs the Sin Meng Charity Association, told a press conference: “The government has put more resources in the past few years towards welfare policies, including cash handouts … and [there is] very positive economic growth and a higher median monthly income for residents.” The median income of residents was 13,000 patacas (US$1,630) in
Permanent residents will get a cash handout of 8,000 patacas next year, having received 5,000 patacas in 2008, when the cash handout scheme began. Non-permanent residents will get a cash handout of 4,800 patacas, having received 3,000 patacas in 2008. Ms Chan approves of the government giving out money to help residents, particularly the poor and elderly, who are harmed the most by stubbornly high inflation. “The government must first satisfy the four fundamental needs of residents – housing, healthcare, employment and education – so that they can be truly happy,” she said. Residents think that satisfying demand for housing is the government’s most urgent task, the survey found.
The government must first satisfy the four fundamental needs of residents – housing, healthcare, employment and education – so that they can be truly happy Melinda Chan Mei Yi, legislator and head of the Sin Meng Charity Association
Tsui Wah aims for HK$760 mln in IPO H ong Kong tea restaurant chain Tsui Wah Holdings Ltd hopes to have raised up to HK$760 million (US$98 million) for its three-year expansion plan through its initial public offering. The six-day offering ended yesterday and Tsui Wah is due to be listed at the Hong Kong Stock Exchange next Monday. Tsui Wah’s prospectus says the company intended to place out 300 million new shares internationally and offer 33.3 million to the public in Hong Kong. The offer price was between HK$1.89 and HK$2.27 a share. The company will use over half of the funds raised for expansion in the mainland and 35 percent for its business in Hong Kong.
The Hong Kong Chinese-language Sing Tao Daily quoted financial analysts as saying the response to the IPO had been mixed as investors had doubts about whether the restaurant could build a brand name as strong in mainland China as it was in Hong Kong. Tsui Wah has 26 branches in Hong Kong, Macau and the mainland. Its only outlet in Macau opened in the Galaxy Macau resort in Cotai last year. The IPO prospectus indicates that Tsui Wah has no plans to expand here in its next three financial years. But it does say the company is seeking to open 24 new branches in the mainland and 13 in Hong Kong. Founded in 1967, the group is known for its milk tea and egg tarts.
Tea restaurant chain Tsui Wah has no apparent plans to expand in Macau
November 20, 2012 business daily | 7
MACAU
Food makers feed industrial growth Ever more tourists are taking the output of the food and beverage industry to new heights Vítor Quintã
vitorquinta@macaubusinessdaily.com
T
he food and beverage industry is having its most productive year ever, helping manufacturing continue to climb out of the unprecedented trough it fell into in 2009. Statistics and Census Service data released yesterday show that the manufacturing production index rose to 80.4 points in the third quarter, 0.9 point higher than in the second. Of the manufacturing production sub-indexes, the food and beverage output index rose by 12.5 points to 121.4 points, indicating that the industry was the main cause of growth in manufacturing output. Spurred on by greater consumption by tourists, food and beverage production jumped in the first nine months of this year, the industry’s output index reaching 109.6 points, 1.7 points more than in the equivalent period of 2011. It was the index’s highest reading since the Statistics and Census Service began collecting data on the industry in 2008. Part of the growth in output was due to increased production by Chinese bakeries. Their output index rose by 6.2 points to 154 points. The biggest leap was in the textiles output index. It rose by 12.3 percent, but to only 9.1 points – a long way below its reading of 179.5 points in 2003. The apparel output index fell by 18.4 percent to 8.4 points, the
Chinese bakeries are cooking up a record year for the food and beverage industry (Photo: Manuel Cardoso)
lowest since the Statistics and Census Service began collecting factory output data in 2000. The demise of quotas for international trade in textiles in 2005 ended a golden era for exports by the textiles and clothing industry.
It has struggled to survive ever since. The output index for non-metallic mineral products dropped by 7.8 points to 85 points. The index tracks the production of cement, ceramics, glass and lime, and the drop reflects the hiatus in the
construction of big resorts in Cotai. Even deeper was the drop in the output of tobacco products. The output index for tobacco products fell by 24.9 points to 175.6 points, having reached 200.5, its highest reading ever, in the second quarter.
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business daily November 20, 2012
GREATER CHINA
Departure of Wen Jiabao may accelerate dams construction Delayed projects may get go-ahead with new energy priorities
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he number of new hydropower projects in China could surge as the country’s populist premier Wen Jiabao retires and a new leadership team races to meet ambitious 2020 energy goals. Dam building slowed considerably under Mr Wen, who personally intervened to block hydropower projects and avoid the potential for protest from local populations. Projects such as the US$59 billion Three Gorges Dam have been the focus of criticism over the social and environmental cost China is paying for development. More dams could be a tough sell as an increasingly affluent public pushes back against a “growth at all costs” economic model. As China’s new leaders consider how to power expansion, however, they have little choice but to push ahead with hydropower given that alternatives like coal or nuclear fuelled power may be even less palatable to the population. “It isn’t that hydropower is the best choice – it is the only choice,” said Lin Boqiang, director of the China Centre of Energy Economics in Xiamen. “Not everyone agrees with hydropower and especially when it comes to building big dams there are a lot of conflicts and we need to be conservative when considering
the impact on the environment, but China has no other option.” The government aims to boost total power capacity by nearly a half to 1,500 gigawatts by 2020, up from 1,060 GW at the end of last year, while cutting coal consumption and limiting growing dependence on expensive gas imports. The scale of the task is massive. The increase is roughly equivalent to adding Russia and India’s total combined power generation capacity. Beijing is also seeking to raise the share of non-fossil fuels to 15 percent of its total energy mix by 2020, up from 9.4 percent in 2011. But China has scaled back its nuclear plans since Japan’s Fukushima disaster, limiting clean energy options and making it harder to hit the targets without many more dams.
Yunnan river protection Mr Wen’s tenure as premier saw a number of projects shelved, with only a third of the projects identified as a priority over the 2006-2010 period actually going ahead, said Zhang Boting, the deputy head of the China Society for Hydropower Engineering, a pro-hydro group. Among the projects vetoed by Mr Wen were a series of dams on Yunnan’s untouched, UNESCOprotected Nu River, known outside
China as the Salween, in 2005. The project has been shelved since, but it is still listed among the government’s key development projects for the 2011-2015 period. Mr Wen, a geologist by trade and populist by instinct, is due to step down in March 2013. But long before his departure, the tide had begun to turn. China’s latest five-year plan said 160 GW of new hydro capacity needed to go into construction over the 2011-2015 period. “If implemented, it will result in an unprecedented dam-building push,” said Peter Bosshard, director of environmental group International Rivers, which campaigns against big dams. The builders of several projects stalled during Mr Wen’s tenure as premier have already begun construction even before receiving approval to go ahead. Giant power firms are preparing new multiple dam systems on the upper reaches of the Yangtze and Mekong rivers in southwest China’s Yunnan province. The 1.9 GW Huangdeng project, one of a series of dams under construction on the Mekong by China’s biggest power firm, the Huaneng Group, is now 40 percent complete even though it hasn’t yet been fully approved, activists say. Huaneng and other giant state-owned utilities are clearly
ASEAN to press Beijing over sea tensions Row will not block the start of trade negotiations
Trade and borders on the agenda
S
outheast Asian nations are set to press China to quickly begin talks on easing tensions over maritime territorial rows that have shaken the region and overshadowed efforts to boost trade. Leaders of the 10-member Association of Southeast Asian Nations (ASEAN) have flagged they will raise the contentious South China Sea issues during a meeting with Chinese Premier
Wen Jiabao in the Cambodian capital. Their meeting is one of the main events scheduled on the opening day of the East Asia Summit, involving ASEAN, China, the United States, Japan, Russia, India, South Korea, Australia and New Zealand. ASEAN Secretary General Surin Pitsuwan said on Sunday that the bloc would ask China to begin formal and official talks on a legally binding code of
conduct aimed at easing tensions in the South China Sea “as soon as possible”. Currently the main framework for negotiations is a non-binding 2002 pact in which the parties agreed to resolve the issues peacefully and through friendly consultations. Cambodian Prime Minister Hun Sen raised the proposal with Mr Wen during a bilateral meeting in Phnom Penh on Sunday night but China
Construction of dams stalled during Wen Jiabao tenu
confident that final approval will be granted quickly once the new leadership is in place.
Dealing with public opposition Policy documents have helped fuel their confidence. An energy white paper published in October said China will “rely on hydropower to meet more than half of the [non-fossil fuel] target”. Total hydro capacity
appeared initially to give no ground. Chinese foreign ministry spokesman Qin Gang told reporters after the meeting that China wanted to continue with the current framework of lower-level negotiations that were agreed on a decade ago. “We already have good discussions with ASEAN,” Mr Qin said. ASEAN members Vietnam, the Philippines, Malaysia and Brunei, as well as Taiwan, have claims to parts of the sea, which is home to some of the world’s most important shipping lanes and believed to be rich in fossil fuels. But China insists it has sovereign rights to virtually all of the sea. After a period of calm following the 2002 accord, tensions have risen over the past two years amid concerns from some ASEAN countries that China is becoming increasingly aggressive. The tensions have led to some bruising diplomatic confrontations this year and overshadowed some regional meetings where the participants typically prefer to focus on improving economic ties. But even with the South China Sea row still festering, trade is expected to be one of the other top issues on the agenda at the two-day East Asia Summit. ASEAN nations are set to officially launch negotiations on Tuesday for an enormous free trade pact with China, Japan, India, South Korea, Australia and New Zealand. The planned zone would tie together an area that currently accounts for a third of global trade and economic output. And despite their own territorial rows, China, Japan and South Korea are likely to hold talks in Phnom Penh aimed at kickstarting three-way free trade negotiations, Chinese foreign ministry spokesman Mr Qin said. AFP
November 20, 2012 business daily | 9
GREATER CHINA
Optimism increases over FTA talks
ure
would reach 290 gigawatts by the end of 2015, up from around 230 GW now, and China’s rivers could potentially run as much as 542 GW, the paper said. According to its “five-year plan” for renewable energy, China aims to launch 60 big hydro plants over 2011-2015. Mr Wen’s ability to intervene to block hydropower plants was strengthened in 2007 when final
approval for dam projects was given to the cabinet, the State Council, chaired by the Premier. Final approval for big dams will continue to lie with the cabinet, and opponents may be encouraged by the recent remarks of environment minister Zhou Shengxian, who said big projects will need to resolve “social impact” issues before going ahead. The industry is increasingly impatient. The project delays have
angered not only power executives, but also energy officials and local government leaders who say that while dams are disruptive, benefits far outweigh costs. How quickly construction accelerates will depend on the stomach of the new leadership to take on and manage public opposition to the projects, Mr Zhang of the China Society for Hydropower Engineering said. Reuters
Xi Jinping warns of unrest if corruption unchecked Graft seen as a threat to the party and the state
Xi Jinping, setting the priorities
I
f corruption is allowed to run wild in China then the ruling Communist Party risks major unrest and the collapse of its rule, state media yesterday quoted Communist Party chief Xi Jinping as saying at one of his first major meetings since taking the role. In unusually blunt language, Vice President Xi, who assumes Hu Jintao’s job as head of state in March, said
that graft was like “worms breeding in decaying matter” – an old Chinese phrase meaning “ruin befalls those who are weak”. “In recent years, some countries have stored up problems over time leading to seething public anger, civil unrest and government collapse – corruption has been an important factor in all this,” state newspapers quoted Mr Xi as telling a study session
for the Politburo, the party’s secondhighest decision-making body. “A great deal of facts tell us that the worse corruption becomes the only outcome will be the end of the party and the end of the state! We must be vigilant!” Mr Xi added. “Recently, our party has had serious discipline and legal cases of a despicable nature which has had a bad political effect and shocked people,” he said, without naming any of these incidents. The run up to this month’s party congress, at which a new generation of leaders was unveiled, was overshadowed by a scandal involving former political heavyweight Bo Xilai, once a contender for top leadership in the world’s second-largest economy. Mr Bo was expelled from the party this year and faces possible charges of corruption and abuse of power, while his wife was jailed for murdering a British businessman. Mr Xi said that party members, especially those at senior levels, should not abuse their positions for personal gain, and that they were not above the law. Officials “must also strengthen their management and control over their relations and those who work with them”, Mr Xi added. Reuters
China, Japan, and South Korea are expected to agree on the launch of three-way free trade talks at a summit in the Cambodian capital this week, Beijing’s foreign ministry spokesman said Sunday. “I am optimistic the three parties can reach a consensus to commence the negotiations,” Qin Gang told reporters in Phnom Penh where leaders of the three nations will attend an East Asia Summit starting yesterday. Mr Qin said trade ministers were likely to hold a trilateral meeting on the matter on the sidelines of the gathering despite a recent spike in tensions between Tokyo and its neighbours over two separate maritime rows. “Hopefully we will have a positive announcement,” Mr Qin said. “But I don’t have a timetable to offer for when the three countries complete the negotiations.” While ministers may be able to set aside maritime disputes to talk about trade, a Japanese diplomat said last Wednesday there are no plans for a customary Japan-China-South Korea leaders’ meeting during the summit. The leaders of the three East Asian giants have held the three-way talks almost every year since 1999 on the sidelines of the regional get-together.
HSBC to sell stake in mainland insurer Banking giant HSBC said yesterday it was in talks to sell its stake in China’s Ping An Insurance Group, the country’s second-largest life insurer by premiums. The British-based but Asia-focused lender said in a statement it was “in discussions which may or may not lead” to the sale of its 15.57 percent stake, which the bank bought in 2002 before Ping An’s listing in Hong Kong. HSBC is the single-biggest shareholder in Ping An, which has a market capitalisation of HK$186 billion (US$24 billion). It did not reveal the party it was in talks with but Hong Kong Economic Journal newspaper cited sources saying Thai businessman Dhanin Chearavanont, owner of the Charoen Pokphand group, might be interested. HSBC has been selling non-core assets as part of a broad restructuring plan designed to boost profitability. The London-listed bank is also setting aside hundreds of millions of dollars as provision for fines related to possible criminal charges over money laundering allegations in the United States. Net profit tumbled by more than half to US$2.498 billion in the three months to September, compared with a year earlier.
Yuan closes firmer, tests C.Bank’s strategy The yuan closed firmer against the dollar yesterday as Chinese corporates reverted to selling dollars, disregarding central bank attempts to guide the Chinese currency into weaker territory. Spot yuan closed at 6.2345 per dollar, a touch firmer than Friday’s close of 6.2356, but right at the top of the daily trading range set by the central bank, as pressure for the yuan to appreciate reasserted itself. After the yuan hit a record high last Wednesday the central bank had appeared to get the upper hand, as Chinese corporates began buying dollars again following a long gap. Yesterday, the central bank set its midpoint for the daily trading range at 6.2975, compared with Friday’s fix of 6.2945. It was the third consecutive day that the central bank had set a weaker midpoint. But it was clear the market remained reluctant to follow the central bank’s lead as the yuan strengthened after opening at 6.2362 per dollar. The yuan hit the strong side of its trading band and stuck there for most of the day, repeating a pattern traders say is depressing market activity.
10 |
business daily November 20, 2012
ASIA
Harbinger boss reaffirms support for Vietnam casino project MGM Grand Ho Tram Beach still ‘on track’ despite analyst concerns on funding
O
ne of the backers of MGM Grand Ho Tram Beach, a casino resort being built outside Ho Chi Minh City in Vietnam, says the financing of the project “remains on programme”. Philip Falcone, founder and principal of Harbinger Capital Partners based in New York said in a statement after visiting the site last week: “The financing of the project remains on programme and I am excited about all that can continue to be done here in Ho Tram in the years to come as the company continues to build out the project.” Harbinger was described in a May 2011 United States regulatory filing made by another of the resort’s investors – U.S. casino operator Pinnacle Entertainment Inc. – as the “majority investor” in Asian Coast Development (Canada) Ltd. ACDL is the entity developing the project, described as “multi-phase” and which the Vietnam authorities say is a US$4 billion scheme. The scheme has a deal to use MGM Resorts International branding at the resort, although MGM is not itself a capital investor. But Union Gaming Research stated in a note last week: “Pinnacle disclosed multiple issues with its Vietnam project that puts its investment at risk, and that could prompt it to deploy additional capital in our view.” Pinnacle has funded US$109 million so far according to filings. Union Gaming added that the project entity ACDL was in default of its phase one completion deadlines, which it said are outlined in the original investment certificate granted
Harbinger’s Philip Falcone, left, with ACDL’s Lloyd Nathan
by the government of Vietnam. “As a result the Ho Tram project will not be awarded gaming approval until an amendment to the investment certificate is granted by the government of Vietnam. This process has reportedly been slow and its timing and certainty are currently unclear,” said the research house.
But Lloyd Nathan, chief executive of ACDL, said the project was “on track”. “We are currently completing the final fit out of the first phase of the MGM Grand Ho Tram Beach and are on track to hand over the building to MGM next month as planned,” said Mr Nathan. He added: “Every project has its challenges and to date our team has
always found solutions. On that theme, we continue to work closely with the Vietnamese government in relation to a variety of matters, including formalising a pending amendment to our investment certificate, with a view to resolving any outstanding issues to enable the opening of our first resort early next year.” M.G.
Obama in landmark Myanmar visit U.S. president hails democracy shift, offers financial aid
B
arack Obama hailed Myanmar’s shift to democracy and urged more steps to increase freedom in the first visit to the former military regime by a U.S. president. “I recognise this is just the first steps on what will be a long journey,” Mr
Obama told reporters with President Thein Sein at his side, breaking with the U.S. practice of referring to the country as Burma. “But we think a process of democratic and economic reform here in Myanmar that has been begun by the president is one that
can lead to incredible development opportunities.” Locals chanted “Obama, Obama” as the president met with opposition leader Aung San Suu Kyi at the lakeside home where she spent more than 15 years confined under house arrest. The daytime trip to the former capital of Yangon, also known as Rangoon, is sandwiched between stops in Thailand and Cambodia, where Mr Obama was expected to join a regional summit later yesterday. The U.S. relaxed sanctions on Myanmar this year after Thein Sein engaged with his political opponents and eased media restrictions following his party’s victory in a 2010 election that ended five decades of direct military rule in the country. The visit also reflects a legacy-building goal for a president about to enter a second term whose early efforts at engagement and democratisation have yielded mixed results. Myanmar will “redouble our efforts” to develop democracy and “bring prosperity to our country,” Thein Sein said in a joint briefing.
‘Hand of friendship’
Myanmar President Thein Sein met with U.S. President Barack Obama yesterday
“Today I have come to keep my promise, and extend the hand of friendship,” Mr Obama said in a
speech in Yangon later in the day. “America now has an ambassador in Rangoon, sanctions have been eased, and we will help rebuild an economy that can offer opportunity for its people, and serve as an engine of growth for the world.” The U.S. president was also set to announce the re-opening of a U.S.-government aid mission in the country and pledge to give US$170 million over two years, according to an administration official who spoke on condition of anonymity. That money and future funds are contingent on further progress on political reforms, the official said. Thein Sein adviser Nay Zin Latt said in an e-mail that Mr Obama’s visit “will become a pull factor to attract foreign investments from the Western world.” But democracy icon Aung San Suu Kyi sounded a note of caution yesterday over Myanmar’s rapid political reforms after talks with the U.S. president, warning of the risk of a “mirage of success”. “The most difficult time in any transition is when we think that success is in sight,” she said at her lakeside home alongside Mr Obama. “We have to be very careful that we’re not lured by the mirage of success.” Bloomberg/AFP
November 20, 2012 business daily | 11
ASIA
Moon, Ahn revive opposition merger Ahead of S. Korean presidential election
S
outh Korean opposition lawmaker Moon Jae In and independent Ahn Cheol Soo decided to resume talks on fielding a single candidate in next month’s presidential election after the head of Mr Moon’s party resigned to try to end a four-day stalemate. The two candidates on Sunday decided after a 30-minute meeting in Seoul to resume working-level talks on merger terms yesterday. Lee Hae Chan, the leader of Mr Moon’s Democratic United Party, on Sunday resigned, saying he hoped the move would convince Mr Ahn and the people that the party is willing to make sacrifices to reform politics. Both candidates are struggling to overtake ruling New Frontier Party nominee Park Geun Hye in polls ahead of the December 19 election to decide who succeeds President Lee Myung Bank as head of Asia’s fourth-biggest economy. Mr Moon’s willingness to sacrifice an ally to persuade Mr Ahn may bolster his chances to emerge as the standard bearer, analyst Jeong Han Wool said. “Moon and his party made a pretty big gesture yesterday, and this played to Moon’s advantage,” said Mr Jeong,
deputy director of the Centre for Public Opinion Research at East Asia Institute in Seoul. “They are cutting it close, with less than a month left, but it looks like Park Geun Hye will face what she dreads, a two-way race.” The breakthrough ended a hiatus that began with Mr Ahn suspending negotiations on November 15 to protest the spreading of false information about his election strategy, calling it “classic example of old politics.” Mr Moon yesterday said that opinion polls will help determine who becomes the unified nominee before the November 26 deadline for candidacy registration with the National Election Commission. “I cannot on my own concede the candidacy, as I have been nominated and backed by my party to represent them,” he told the local press association yesterday in Seoul. “The only way for me to drop out is my ratings fall to a point where it is objectively deemed difficult for me to carry on.” Mr Moon overtook Mr Ahn for second place in a three-way race against Ms Park with a rating of 28.3 percent to Mr Ahn’s 21.5 percent, according to a poll released
Kangwon Land climbs on expansion prospects
Moon Jae-in, right, and Ahn Cheol-soo agreed to resume negotiations to pick a unified candidate
yesterday by Seoul-based Realmeter and JTBC, a cable-television affiliate of newspaper JoongAng Ilbo. Ms Park still leads with 44.7 percent, according to yesterday’s poll, which surveyed 1,500 respondents between November 17 and 18 and had a margin of error of 2.5 percentage points. It showed 44.6 percent of respondents favouring Mr Moon over 36.1 percent backing Mr Ahn as the single united opposition candidate. Bloomberg
Thai post-flood recovery slows
Kangwon Land Inc., a South Korean casino and hotels operator, rallied to a nine-month high in Seoul stock trading on speculation the company will get government approval to expand its gambling business. The stock climbed 5.1 percent to 27,750 won (US$25.5) at the close on the Korea Exchange, its highest level since February 7. The advance was the second-biggest in the MSCI Emerging Markets Index. The Ministry of Culture, Sports and Tourism will approve as early as this month a plan by Kangwon Land to increase casino tables and slot machines, MoneyToday reported last Friday, citing unidentified industry officials. Kim Hong Dae, a spokesman for Kangwon Land, declined to comment, while Lee Jun Hyub, an official at the ministry’s tourism promotion division, said nothing has been decided. “Chances of about a 50 percent capacity expansion are high,” Yang Il Woo, an analyst at Samsung Securities Co., wrote in a report yesterday. “There’s upside room in the share price,” said the analyst, who raised the shareprice estimate by 5.2 percent to 30,500 won. Credit Suisse Group AG increased its recommendation on Kangwon Land’s shares to outperform from neutral, according to a report yesterday. The potential capacity addition could happen earlier than previously thought, the brokerage said. Kangwon Land has advanced 2 percent this year, compared with a 2.9 percent gain in the benchmark Kospi index. The company, which is the sole casino operator in the country for local Koreans, has 132 tables and 960 slot machines, JPMorgan Chase & Co. wrote in a report dated yesterday.
As global demand for Asian goods slumps
Thai exports have been hit by slowing global demand
T
hailand’s economy grew a stronger-than-expected 1.2 percent in the third quarter from the previous three months, reinforcing expectations that the central bank will keep its policy interest rate on hold until 2013. Third-quarter growth was slower than April-June’s revised 2.8 percent, as the weakening global economy hit exports and factory production. But the latest pace was higher than the 0.9 percent quarterly gain forecast in a Reuters poll. The Bank of Thailand’s policy committee, which surprisingly cut rates in October, holds its last meeting of the year on November 28. “We believe that policy rate will remain on an easing bias, although we do not expect the BOT to cut rate by another 25 basis points until the first half of 2013,” said Usara Wilaipich, s e n ior econom ist at Standard Chartered Bank in Bangkok.
The National Economic and Social Development Board (NESDB) yesterday also said that gross domestic product in the third quarter expanded 3.0 percent from a year earlier, almost matching the 3.1 percent forecast by the polled economists, and compared with revised annual growth of 4.4 percent in the second quarter. “Domestic factors were a boost for this quarter as consumption expanded well, particularly household expenditureaswellastotalinvestment,” Arkhom Termpittayapaisith, NESDB secretary-general, told a news conference.
Weak exports Overall investment rose 15.5 percent in the third quarter from a year before while overall consumption was up 6.5 percent, with household spending up 6 percent year-on-year. Activity in the first half of the year
was buoyed to a large extent by spending on reconstruction and replacement equipment after devastating floods in late 2011, but much of that rebuilding has now been completed. Exports fell 3 percent in the third quarter from a year earlier as global demand for Asian goods deteriorated, the agency said. Manufacturing slumped 10.2 percent from a year before, even as factories restored more capacity after the floods. Industrial goods account for about 65 percent of exports. Like in many Southeast Asian nations, strong domestic demand and tourism have helped shore up Thailand’s economy even as exports and industrial output slumped. After a strong start to the year, growth across Southeast Asia has cooled in response to prolonged weakness in demand in Europe and the United States, and a slowdown in China. Still, regional economies have remained relatively more resilient than most developed countries and continue to attract solid foreign investment. For Thailand, the NESDB revised its forecast for 2012 economic growth to 5.5 percent, compared with its previous 5.5-6.0 percent range. Due to the floods, growth in 2011 was only 0.1 percent. The central bank last month also lowered its GDP forecast for next year to 4.6 percent from 5 percent, while maintaining its prediction for this year at 5.7 percent. Governor Prasarn Trairatvorakul said the unexpected cut is not a signal that interest rates are on a downward trend and that monetary policy space should be used “wisely” because of uncertainties ahead. Reuters
Vodafone’s IPO hinges on US$8 bln question Vodafone India Ltd said it’s “impossible” to proceed with a proposed initial share sale until the government clarifies the price to extend licences that may amount to as much as US$8 billion. The fees that India’s second-largest mobile phone operator may have to pay could vary by 3 billion pounds (US$4.8 billion) depending on how the government prices the permits, skewing the potential market value of the company, according to chief executive Marten Pieters. The licences are due for renewal from November 2014. “It’s impossible to float the company if you have that kind of swing in your valuation,” Mr Pieters, 59, said in an interview at Bloomberg’s Mumbai office. “We’d get a discount for all this uncertainty. Why as an owner would you want to sell it with a big discount?” The government’s drive to boost airwave prices amid corruption allegations in awarding spectrum to some operators in 2008 may deter IPO investors, according to Naveen Kulkarni, an analyst at MF Global Sify Securities India Pvt. Mobile-phone companies including Vodafone, which has more users in India than the population of Japan, and Bharti Airtel Ltd are struggling to revive growth in a market where 13 competitors have driven call rates to a penny a minute. “We’re still in a situation where regulatory uncertainty is the order of the day,” said Lawrence Sugarman, an analyst at Liberum Capital Ltd in London. “When you have that situation, and also such high reserve prices on the spectrum, the companies are going to be quite reluctant to invest.” Bloomberg
12 |
business daily November 20, 2012
MARKETS Hang SENG INDEX NAME
NAME
PRICE
DAY %
VOLUME
30.05
-0.166113
16969937
CHINA UNICOM HON
ALUMINUM CORP-H
3.27
-1.208459
11978905
CITIC PACIFIC
BANK OF CHINA-H
3.15
0.3184713
191853682
BANK OF COMMUN-H
5.41
1.310861
17270063
BANK EAST ASIA
28.7
0.525394
989788
BELLE INTERNATIO
14.8
1.508916
10924243
AIA GROUP LTD
BOC HONG KONG HO
PRICE
DAY %
VOLUME
11.78
2.61324
33069377
NAME
9.93
0.1008065
2730802
SANDS CHINA LTD
POWER ASSETS HOL
1335158
SINO LAND CO
13.38
2.137405
4304925
SUN HUNG KAI PRO
110.9
-0.7162041
6598254
COSCO PAC LTD
10.74
5.91716
12721816
SWIRE PACIFIC-A
93.4
0.6465517
1118622
ESPRIT HLDGS
12.36
1.644737
10495620
TENCENT HOLDINGS
246
-0.886382
5447990
22.95
-1.502146
6118020
10.8
3.646833
11857012
53.95
0.6529851
2233225
6439420
HANG LUNG PROPER
26.9
1.893939
4827000
TINGYI HLDG CO
HANG SENG BK
115.5
0.5221932
1223750
WANT WANT CHINA
CHEUNG KONG
113.7
1.156584
3209261
HENDERSON LAND D
53.05
0.09433962
2305963
WHARF HLDG
7.49
1.35318
15215555
70.2
0.1426534
1704727
20.15
-0.2475248
3659411
220799113
0.6772009
23070204
CHINA MERCHANT
23.3
0.2150538
3088031
CHINA MOBILE
HENGAN INTL HONG KG CHINA GS HONG KONG EXCHNG
124.1
0.8943089
1827957
HSBC HLDGS PLC
74.65
0.9465855
12036293
HUTCHISON WHAMPO
77.35
1.309758
4875125
5.06
0.7968127
154648009
LI & FUNG LTD
12.38
2.6534
21612527
29.95
0.8417508
1753494
85.2
0.4124926
13895191
20.75
0
9727170
CHINA PETROLEU-H
7.98
1.656051
96744993
CHINA RES ENTERP
25.95
0.3868472
2321657
MTR CORP
CHINA OVERSEAS
4934801
34283878
1998753
0.1757469
-0.6462036
0.2503129
0.4273504
5.7
2699296
30.75
0.2267574
0.4424779
22.3
VOLUME
66.3
23.5
CHINA LIFE INS-H
1.570681
16.02
13.62
CHINA CONST BA-H
DAY %
67.9
CNOOC LTD
CLP HLDGS LTD
CATHAY PAC AIR CHINA COAL ENE-H
PRICE
IND & COMM BK-H
MOVERS
40
8
1 21300
INDEX 21262.06 HIGH
21296.04
LOW
21108.35
CHINA RES LAND
18.72
0.3215434
3645896
NEW WORLD DEV
11.9
0.3372681
13997008
52W (H) 22149.69922
CHINA RES POWER
16.98
0.7117438
10468928
PETROCHINA CO-H
10.22
0.7889546
43521132
(L) 17613.19922
CHINA SHENHUA-H
30.8
0.1626016
12661446
PING AN INSURA-H
58.45
-1.92953
19459700
21100
15-November
19-November
Hang SENG CHINA ENTErPRISE INDEX PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.3
0
65757357
CHINA PACIFIC-H
24.3
1.886792
30857303
YANZHOU COAL-H
11.3
0.3552398
13368735
AIR CHINA LTD-H
5.15
1.778656
14276000
CHINA PETROLEU-H
7.98
1.656051
96744993
ZIJIN MINING-H
3.13
1.294498
19680362
ALUMINUM CORP-H
3.27
-1.208459
11978905
CHINA RAIL CN-H
8.45
1.5625
11424246
ZOOMLION HEAVY-H
9.39
-0.6349206
21176936
ANHUI CONCH-H
25.2
2.439024
6737697
CHINA RAIL GR-H
4.32
2.612827
20102974
ZTE CORP-H
11.2
0.9009009
2878181
BANK OF CHINA-H
3.15
0.3184713
191853682
CHINA SHENHUA-H
30.8
0.1626016
12661446
CHINA TELECOM-H
NAME
NAME
5.41
1.310861
17270063
4.21
1.445783
69395791
19.84
2.479339
4616895
DONGFENG MOTOR-H
9.8
0.9268795
20493820
CHINA CITIC BK-H
3.87
0.2590674
26715487
GUANGZHOU AUTO-H
5.4
2.079395
8855277
CHINA COAL ENE-H
7.49
1.35318
15215555
HUANENG POWER-H
6.41
2.070064
12236000
CHINA COM CONS-H
6.79
-0.7309942
12544233
IND & COMM BK-H
5.06
0.7968127
154648009
CHINA CONST BA-H
5.7
0.1757469
220799113
JIANGXI COPPER-H
19.28
1.260504
5864666
CHINA COSCO HO-H
3.54
1.432665
9254500
PETROCHINA CO-H
10.22
0.7889546
43521132
CHINA LIFE INS-H
22.3
0.6772009
23070204
PICC PROPERTY &
9.83
0.4085802
8899800
CHINA LONGYUAN-H
4.85
0.6224066
6564000
PING AN INSURA-H
58.45
-1.92953
19459700
CHINA MERCH BK-H
13.9
0.433526
9999599
SHANDONG WEIG-H
8.19
-17.27273
50897999
BANK OF COMMUN-H BYD CO LTD-H
NAME
MOVERS
6
1 10330
INDEX 10290.21 HIGH
10322.44
LOW
10199.6
CHINA MINSHENG-H
7.15
0.5625879
26304600
SINOPHARM-H
24.9
0.2012072
820800
52W (H) 11916.1
CHINA NATL BDG-H
9.57
0.5252101
21643696
TSINGTAO BREW-H
41.3
0.8547009
2089193
(L) 8987.76
14.64
0.9655172
7305295
WEICHAI POWER-H
28.25
2.169982
1783276
CHINA OILFIELD-H
33
10190
15-November
19-November
Shanghai Shenzhen CSI 300 NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
CSR CORP LTD -A
4.69
1.956522
44536025
SHANDONG DONG-A
38.8
-0.8939974
2086342
7673221
DAQIN RAILWAY -A
6.19
1.976936
37847788
SHANDONG GOLD-MI
36.39
1.055262
5344210
-0.41841
7134617
DATANG INTL PO-A
4.09
0.7389163
2305862
SHANG PHARM -A
10.64
-0.09389671
3925440
2.503209
11243776
EVERBRIG SEC -A
11.18
2.193784
5581153
SHANG PUDONG-A
7.37
0.1358696
24785310 2385148
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.56
-0.7751938
39947497
AIR CHINA LTD-A
4.57
-1.082251
ALUMINUM CORP-A
4.76 15.97
ANHUI CONCH-A
NAME
NAME
BANK OF BEIJIN-A
7.03
0
12980502
GD POWER DEVEL-A
2.35
1.293103
29193388
SHANGHAI ELECT-A
3.92
1.29199
BANK OF CHINA-A
2.76
0.3636364
20807602
GF SECURITIES-A
12.35
1.646091
20161037
SHANXI LU'AN -A
16.57
0.6071645
5372419
BANK OF COMMUN-A
4.18
0.2398082
14951936
GREE ELECTRIC
22.85
0.4395604
7175481
SHANXI XINGHUA-A
35.66
-5.335811
10264931
BANK OF NINGBO-A
8.91
0.6779661
3891460
GUANGHUI ENERG-A
15.5
1.706037
12623273
SHANXI XISHAN-A
11.81
0.7679181
6980514
16403258
HAITONG SECURI-A
8.41
1.692866
36669685
SHENZEN OVERSE-A
5.67
0
12823448
BAOSHAN IRON & S
4.6
-0.4329004
15.91
-1.971657
5332190
HANGZHOU HIKVI-A
28.28
0.3548616
1860482
SICHUAN KELUN-A
52.85
1.051625
543696
CHINA CITIC BK-A
3.56
0.2816901
7853930
HENAN SHUAN-A
57.85
-3.179916
1844205
SUNING APPLIAN-A
6.19
-1.746032
28045318
CHINA CNR CORP-A
4.14
1.470588
40456275
HONG YUAN SEC-A
16.98
2.84676
10713675
TASLY PHARMAC-A
51.91
0.07711587
1277243
CHINA COAL ENE-A
6.89
-0.1449275
2998329
HUATAI SECURIT-A
8.32
0.8484848
24998777
TSINGTAO BREW-A
30.07
-1.085526
1447643
CHINA CONST BA-A
4.21
0.2380952
18114854
HUAXIA BANK CO
8.36
0.7228916
7840712
WEICHAI POWER-A
20.76
1.964637
4588547
CHINA COSCO HO-A
4.02
0.5
4470754
IND & COMM BK-A
3.85
0.5221932
31148979
WULIANGYE YIBIN
29.11
-5.823358
52802568 4858748
BYD CO LTD -A
CHINA CSSC HOL-A
19
1.010101
2590920
INDUSTRIAL BAN-A
12.38
0.405515
29521191
YANGQUAN COAL -A
13.11
1.235521
CHINA EAST AIR-A
3.17
0.955414
9941129
INNER MONG BAO-A
33.64
2.811736
33956313
YANTAI CHANGYU-A
40.63
0.09854644
931004
CHINA EVERBRIG-A
2.57
0.390625
20177405
INNER MONG YIL-A
20.88
-1.55587
3858617
YANTAI WANHUA-A
13.05
0.3846154
4164131
17.27
-0.5757052
8801910
INNER MONGOLIA-A
5.2
0.9708738
24346355
YANZHOU COAL-A
16.54
0.3640777
1484200
CHINA MERCH BK-A
9.92
-0.4016064
17315197
JIANGSU HENGRU-A
28.68
-1.001036
1814826
YUNNAN BAIYAO-A
63.9
-0.7763975
1411164
CHINA MERCHANT-A
8.74
1.509872
13940134
JIANGSU YANGHE-A
102
-5.24849
3061683
ZHONGJIN GOLD
15.21
0.5287508
8978959
CHINA MERCHANT-A
21.65
-0.7791017
5261254
JIANGXI COPPER-A
20.45
0.6397638
2599543
ZIJIN MINING-A
3.71
0.5420054
20706545
CHINA MINSHENG-A
6.09
0
91697553
JINDUICHENG -A
11.03
1.471941
2905502
ZOOMLION HEAVY-A
8.21
0.9840098
24037350
JIZHONG ENERGY-A
10.77
-0.2777778
12033338
ZTE CORP-A
8.03
0.5006258
7289162
-1.263424
8300454
CHINA LIFE INS-A
6.72
-0.2967359
15963865
CHINA OILFIELD-A
CHINA NATIONAL-A
15.63
0.5791506
2946753
KANGMEI PHARMA-A
15.63
CHINA PACIFIC-A
KWEICHOW MOUTA-A
16.66
-0.239521
19899889
214.05
-4.612299
7048401
CHINA PETROLEU-A
6.06
0.3311258
9293804
LUZHOU LAOJIAO-A
33.1
-6.125922
19252527
CHINA RAILWAY-A
5.29
1.535509
17193785
METALLURGICAL-A
2.01
0
9057460
CHINA RAILWAY-A
2.81
1.444043
33792445
NINGBO PORT CO-A
2.46
0
7750003
CHINA SHENHUA-A
21.74
0.09208103
3427027
PANGANG GROUP -A
3.44
0
26290940
PETROCHINA CO-A
8.56
-0.1166861
6089717
MOVERS 168
106
26 2220
INDEX 2174.985
CHINA SHIPBUIL-A
4.25
-0.4683841
12057745
CHINA SOUTHERN-A
3.38
0.8955224
14648366
PING AN BANK-A
13.09
-0.07633588
9836934
36.49
-1.617687
39350411
HIGH
2217.74
LOW
2150.11
CHINA STATE -A
3.03
-0.6557377
26395940
PING AN INSURA-A
CHINA UNITED-A
3.22
-2.12766
95652101
POLY REAL ESTA-A
10.99
-1.523297
28962922
CHINA VANKE CO-A
8.18
-0.486618
28144589
QINGDAO HAIER-A
11.06
-0.5395683
4618097
CHINA YANGTZE-A
6.35
1.11465
8575347
QINGHAI SALT-A
23.79
0.464527
2223845
CHONGQING WATE-A
5.15
0.5859375
2354511
SAIC MOTOR-A
13.1
0.2295333
8743164
10.59
0.7611798
47944033
SANY HEAVY INDUS
8.97
0.1116071
10964669
NAME
PRICE DAY %
Volume
PRICE DAY %
Volume
ACER INC
23.7 -0.8368201
14523498
FORMOSA PLASTIC
71
3.498542
15533265
2.017937
16961425
FOXCONN TECHNOLO
96
-1.030928
5665641
36 -0.4149378
1940604
FUBON FINANCIAL
30.95
1.143791
10861233
TSMC
89.2 -0.5574136
16175693
UNI-PRESIDENT
51.6
0.5847953
3144871
UNITED MICROELEC
10.4
-1.421801
15444447
CITIC SECURITI-A
52W (H) 2717.825 (L) 2149.538
2140
15-November
19-November
FTSE TAIWAN 50 INDEX
ADVANCED SEMICON ASIA CEMENT CORP
22.75
ASUSTEK COMPUTER
307.5 -0.3241491
AU OPTRONICS COR
11.35
NAME
2583384
HON HAI PRECISIO
0.8888889
45860827
HOTAI MOTOR CO
193.5
3.475936
863827
NAME
PRICE DAY %
TAIWAN MOBILE CO TPK HOLDING CO L
Volume
106
0.952381
406.5
-2.283654
3483446 9102247
90 -0.2217295
23082465
CATCHER TECH
142
2.527076
21580002
HTC CORP
243.5
-2.012072
19476992
WISTRON CORP
28.5
0.8849558
3666962
CATHAY FINANCIAL
28.9
0.5217391
8417871
HUA NAN FINANCIA
15.25
0.3289474
3526590
YUANTA FINANCIAL
13.3
0.3773585
5410939
CHANG HWA BANK
14.75
1.027397
4772373
LARGAN PRECISION
694
2.814815
1226898
YULON MOTOR CO
49.5 -0.6024096
3013526
69.7 -0.4285714
3082116
LITE-ON TECHNOLO
37.7
1.208054
3580427
312
-0.952381
4680078
21
0.9615385
12908183
CHENG SHIN RUBBE CHIMEI INNOLUX C CHINA DEVELOPMEN
11.15
1.363636
33315087
MEDIATEK INC
6.43 -0.4643963
19812256
MEGA FINANCIAL H
CHINA STEEL CORP
24.95
0.6048387
10426880
NAN YA PLASTICS
48.2
1.902748
9891385
CHINATRUST FINAN
15.45 -0.3225806
32811183
PRESIDENT CHAIN
149
0
770075
CHUNGHWA TELECOM COMPAL ELECTRON DELTA ELECT INC
92.6
0
3649778
QUANTA COMPUTER
69
1.173021
4161971
18.35
0
7181962
SILICONWARE PREC
28.5
0.1757469
3906129
11.45
100
-0.990099
5275967
SINOPAC FINANCIA
1.327434
16452958
FAR EASTERN NEW
31
0.6493506
5353774
SYNNEX TECH INTL
55.2 -0.5405405
2195683
FAR EASTONE TELE
69.8
0.4316547
5224047
TAIWAN CEMENT
36.6
0.5494505
4915313
TAIWAN COOPERATI
FIRST FINANCIAL
16.35
0.3067485
5758552
FORMOSA CHEM & F
63.7
4.084967
12286030
FORMOSA PETROCHE
80
0
1545142
15.25
0.3289474
3594541
TAIWAN FERTILIZE
70.7
1.289398
3104392
TAIWAN GLASS IND
24.7
1.646091
2352971
MOVERS
29
17
4 5030
INDEX 5006.78 HIGH
5024.22
LOW
4946.26
52W (H) 5621.53 4940
(L) 4643.05 15-November
19-November
November 20, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) gaLaXy enTerTaInMenT
MeLCo CroWn enTerTaInMenT
MgM CHIna HoLDIngS 36.8
27.8
13.6 13.5
27.6 36.3
13.4
27.4
Max 27.65
average 27.510
Min 27.35
Last 27.55
13.3
27.2
Max 36.75
SanDS CHIna LTD
average 36.552
Min 35.8
35.8
Last 35.8
SJM HoLDIngS LTD
Max 13.6
average 13.346
Min 13.26
Last 13.32
Wynn MaCaU LTD 18.2
31.6
21.6 21.4
31.3
18.0
21.2
31.0
average 30.833
Min 30.55
Last 30.75
30.4
20.8 17.6 Max 18.08
average 17.896
Commodities ENERGY
NAME
PRICE
WTI CRUDE FUTURE Jan13
87.81
1.023930051
-10.20554249
109.6699982
79.68000031
BRENT CRUDE FUTR Jan13
109.7
0.688389169
5.990338164
120.7699966
90.15999603
GASOLINE RBOB FUT Dec12
272.31
0.479687096
9.74046909
295.8800077
217.2600031
GAS OIL FUT (ICE) Jan13
938.25
1.679761582
4.686192469
1036.25
799.25
3.825
0.92348285
1.809954751
4.350000381
2.90899992
HEATING OIL FUTR Dec12
DAY %
YTD %
(H) 52W
Last 17.84
301.05
0.793491362
4.844326809
335.1700068
254.2500019
1723.04
0.5433
10.1047
1796.08
1522.75
Silver Spot $/Oz
32.6263
0.9243
17.2132
37.4775
26.1513
Platinum Spot $/Oz
1565.48
0.4492
12.261
1736
1339.25
631.5
0.7659
-3.3665
725.19
553.75
Palladium Spot $/Oz LME ALUMINUM 3MO ($)
1951
-0.66191446
-3.415841584
2361.5
1827.25
LME COPPER 3MO ($)
7605
-0.451600236
0.065789474
8765
7100.25
LME ZINC
1920
-1.79028133
4.06504065
2220
1745
3MO ($)
LME NICKEL 3MO ($)
15960
0.314267756
-14.69802245
22150
15236
14.91
0.437857865
-2.898078802
16.60000038
14.60000038
737.5
0.889192886
22.86547272
846.25
511
WHEAT FUTURE(CBT) Mar13
858
0.497803807
16.89373297
948.25
652
SOYBEAN FUTURE Jan13
1395
0.849448762
15.00412201
1781.5
1126.75
COFFEE 'C' FUTURE Mar13
153.6
0.721311475
-35.44862366
249
SUGAR #11 (WORLD) Mar13
19.47
1.671018277
-16.65239726
COTTON NO.2 FUTR Mar13
72.58
-0.082599119
-17.99796633
AGRICULTURE ROUGH RICE (CBOT) Jan13
average 21.122
Mar13
PRICE MAJORS
ASIA PACIFIC
CROSSES
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
Last 21
Min 20.85
DAY %
1.0377 1.59 0.9433 1.2778 81.27 7.9846 7.752 6.2348 54.96 30.73 1.2253 29.163 41.175 9632 84.333 1.2054 0.80366 7.9559 10.2034 103.85 1.03
0.3675 0.107 0.2332 0.2747 0.0615 0 0.0064 0.0112 0.3912 0.0325 0.1551 0.1372 0.3837 -0.0311 -0.3083 -0.0539 -0.1767 -0.0792 -0.3626 -0.2407 0
YTD %
(H) 52W
1.6456 2.2969 -0.5513 -1.4119 -5.3648 0.1879 0.1987 0.9655 -3.448 2.6684 5.819 3.8268 6.4724 -5.8451 -6.9973 0.9449 3.6993 2.2411 1.4564 -4.0347 0.0097
(L) 52W
1.0857 1.6309 0.9972 1.3569 84.18 8.0308 7.7979 6.3964 57.3275 32 1.315 30.5 44.35 9662 88.637 1.24438 0.86648 8.613 10.887 111.44 1.0311
0.9582 1.5235 0.8931 1.2043 76.03 7.9823 7.7498 6.2202 48.6088 30.2 1.2152 28.914 40.996 8875 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029
MACAU RELATED STOCKS (H) 52W
(L) 52W
ARISTOCRAT LEISU
NAME
2.64
0
20
3.25
2.16
1158032
149.4499969
CROWN LTD
9.86
-0.3033367
21.87886
10.2
7.92
778103
25.12999916
18.65999985
AMAX HOLDINGS LT
0.062
0
-28.73563
0.119
0.055
11424000
98.5
66.84999847
BOC HONG KONG HO
23.5
0.4273504
27.71739
25
16.24
6439420
0.255
0
10.86956
0.335
0.204
200
4.2
0.9615385
50
4.36
2.5
23470 9727170
CENTURY LEGEND CHEUK NANG HLDGS
World Stock MarketS - Indices NAME
20.6 Max 21.4
(L) 52W
Gold Spot $/Oz
CORN FUTURE
Min 17.76
CURRENCY EXCHANGE RATES
NATURAL GAS FUTR Dec12
METALS
21.0
17.8
30.7
Max 31.5
PRICE
DAY % YTD %
VOLUME CRNCY
CHINA OVERSEAS
20.75
0
60.04137
21.95
11.507
CHINESE ESTATES
11.28
0
-9.76
13.26
8.3
0
CHOW TAI FOOK JE
9.95
-0.8964143
-28.52012
15.16
8.4
2589950
EMPEROR ENTERTAI
1.63
0.617284
46.84684
1.65
0.99
1985000
FUTURE BRIGHT
1.26
1.612903
200
1.36
0.37
180000
GALAXY ENTERTAIN
27.55
1.100917
93.4691
29.45
13.2
15738883 1223750
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
12588.31
0.3661984
3.034567
13661.87
11231.56
NASDAQ COMPOSITE INDEX
US
2853.131
0.5708624
9.518884
3196.932
2441.48
HANG SENG BK
115.5
0.5221932
25.33912
120
91.05
FTSE 100 INDEX
GB
5655.18
0.8846526
1.487728
5989.07
5075.22
HOPEWELL HLDGS
28.85
-0.3454231
47.17768
31.091
18.319
1614600
DAX INDEX
GE
7031.09
1.159048
19.20435
7478.53
5366.5
HSBC HLDGS PLC
74.65
0.9465855
26.52542
78
56
12036293
NIKKEI 225
JN
9153.2
1.429939
8.253362
10255.15
8135.79
HUTCHISON TELE H
3.39
5.607477
13.37793
3.88
2.81
15475173
HANG SENG INDEX
HK
21262.06
0.4870266
15.3391
22149.69922
17613.19922
LUK FOOK HLDGS I
20.2
0.248139
-25.46126
34.3
14.7
1479895
MELCO INTL DEVEL
7.6
-0.2624672
31.71577
8.28
5.12
2016800
CSI 300 INDEX
CH
2174.985
-0.1035715
-7.279438
2717.825
2149.538
MGM CHINA HOLDIN
13.32
1.369863
38.8635
14.76
9.347
1311000
TAIWAN TAIEX INDEX
TA
7129.04
-0.01444586
0.8054202
8170.72
6609.11
MIDLAND HOLDINGS
3.49
-1.690141
-11.736
5.217
3.249
3432000
NEPTUNE GROUP
0.153
-1.290323
37.83784
0.222
0.08
745000
NEW WORLD DEV
11.9
0.3372681
90.09584
13.2
6.13
13997008
SANDS CHINA LTD
4934801
KOSPI INDEX
SK
1878.1
0.9280805
2.867877
2057.28
1750.6
S&P/ASX 200 INDEX
AU
4361.448
0.5672322
7.515916
4581.8
3973.8
ID
4313.439
-0.8697433
12.8584
4366.856
3618.969
FTSE Bursa Malaysia KLCI
MA
1623.31
-0.3664195
6.0481
1679.37
1424.19
NZX ALL INDEX
NZ
859.377
-0.1172729
17.75509
874.107
712.548
JAKARTA COMPOSITE INDEX
13.2
30.75
-0.6462036
40.09111
33.05
19.96
SHUN HO RESOURCE
1.22
0.8264463
22
1.37
0.95
0
SHUN TAK HOLDING
3.2
0.3134796
25.04258
3.51
2.418
3143000
SJM HOLDINGS LTD
17.84
-1.545254
42.65682
18.18
11.519
6562339
SMARTONE TELECOM
14.88
3.333333
10.71429
17.5
11.72
2117520
WYNN MACAU LTD
21
-0.4739336
7.692308
25.5
14.62
3736117
ASIA ENTERTAINME
3.61
8.083832
-38.60544
7.24
2.4
217151
BALLY TECHNOLOGI
44.47
1.413911
12.41152
51.16
35.79
979132 2000
PHILIPPINES ALL SHARE IX
PH
3581.71
0.099213
17.6244
3607.89
2952.17
HSBC Dragon 300 Index Singapor
SI
573.23
-0.41
15.49
NA
NA
STOCK EXCH OF THAI INDEX
TH
1282.69
0.1999797
25.10143
1314.64
965.07
HO CHI MINH STOCK INDEX
VN
383.32
-0.6196365
9.037127
492.44
332.28
BOC HONG KONG HO
3.15
0
31.40399
3.3
2
Laos Composite Index
LO
1240.19
0.5790519
37.88161
1241.19
876.33
GALAXY ENTERTAIN
3.48
-0.8547009
86.09626
3.73
1.68
4100
INTL GAME TECH
12.73
1.272872
-25.98838
18.1
10.92
7219524
JONES LANG LASAL
74.99
1.985584
22.41267
87.52
55.88
230991
LAS VEGAS SANDS
42.27
4.215976
-1.076526
62.09
34.72
10968295
MELCO CROWN-ADR
13.83
2.067927
43.763
16.02
8.18
3591946
MGM CHINA HOLDIN
1.76
0
47.68902
1.96
1.1917
2000
MGM RESORTS INTE
9.64
2.881537
-7.574308
14.9401
8.83
24654909
SHFL ENTERTAINME
12.93
2.132701
10.32423
18.77
10.22
264576
SJM HOLDINGS LTD
2.32
3.111111
44.31695
2.32
1.4695
1200
104.33
-0.2104256
0.7031737
129.6589
84.4902
2014254
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
WYNN RESORTS LTD
AUD HKD
USD
14 |
business daily November 20, 2012
Opinion The other financial crisis
T
Mohamed A. El-Erian CEO and co-CIO of PIMCO
wo variants of financial crisis continue to wreak havoc on Western economies, fuelling joblessness and poverty: the one that we read about regularly in newspapers, involving governments around the world; and a less visible one at the level of small and medium-size businesses and households. Until both are addressed properly, the West will remain burdened by sluggish growth, persistently high unemployment, and excessive income and wealth inequality. The sovereign-debt crisis is well known. In order to avert a likely depression, governments around the world engaged in fiscal and monetary stimulus in the midst of the global financial crisis. They succeeded in offsetting nasty economic dislocations caused by private-sector deleveraging, but at the cost of encumbering their fiscal balances and their central banks’ balance sheets. While sovereign credit quality has deteriorated virtually across the board, and will most probably continue to do so, the implications for individual countries vary. Some Western countries – such as Greece – had fragile government accounts from the outset and tipped quickly into persistent crisis mode. There they remain, still failing to provide citizens with a light at the end of what already has been a long tunnel.
Other countries had been fiscally responsible, but were overwhelmed by the liabilities that they had assumed from others (for example, Ireland’s irresponsible banks sank their budget). Still others, including the United States, faced no immediate threat but failed to make progress on longer-term issues. A few, like Germany, had built deep economic and financial resilience through years of fiscal discipline and structural reforms. It is not surprising that policy approaches have also varied. Indeed, they have shared only one, albeit crucial (and disappointing) feature: the inability to rely on rapid growth as the “safest” way to deleverage an over-indebted economy. Greece essentially defaulted on some obligations. Ireland opted for austerity and reforms, as has the United Kingdom. The U.S. is gradually transferring resources from creditors to debtors through financial repression. And Germany is slowly acquiescing to a prudent relative expansion in domestic demand. So much for the sovereigndebt crisis, which, given its national, regional, and global impact, has been particularly well covered. After all, sovereigns are called that because they have the power to impose taxes, regulations, and, at the extreme, confiscation. But the other credit crisis is equally consequential, and receives much less
attention, even as it erodes societies’ integrity, productive capabilities, and ability to maintain living standards (particularly for the least fortunate). I know of very few Western countries where small and medium-size companies, as well as middleincome households and those of more limited means, have not experienced a significant decline in their access to credit – not just new financing, but also the ability to roll over old credit lines and loans. The immediate causes are well known. They range from subdued bank lending to unusually high risk aversion, and from discredited credit vehicles to the withdrawal of some institutions from credit intermediation altogether. Such credit constraints are one reason why unemployment rates continue to rise in so many countries – often from already alarming levels, such as 25 percent in Greece and Spain (where youth unemployment is above 50 percent) – and why unemployment remains unusually high in countries like the U.S. (albeit it at a much lower level). This is not just a matter of lost capabilities and rising poverty; persistently high unemployment also leads to social unrest, erosion of trust in political leaders and institutions, and the mounting risk of a lost generation. Indeed, unemployment data in many advanced countries are dominated by
long-term joblessness (usually defined as six months or more). Skill erosion becomes a problem for those with prior work experience, while unsuccessful first-time entrants into the labour force are not just unemployed, but risk becoming unemployable. Governments are doing too little to address the private credit debacle. Arguably, they must first sort out the sovereign side of the crisis; but it is not clear that most officials even have a comprehensive plan.
Reviving private credit Policy asymmetry is greatest for the countries most acutely affected by the sovereign-debt crisis. There, the private sector has essentially been left to fend for itself; and most households and companies are struggling, thus fuelling continued economic implosion. Other countries appear to have adopted a “Field of Dreams” – also known as “build it and they will come” – approach to private credit markets, In the U.S., for example, artificially low interest rates for home mortgages, resulting from the Federal Reserve’s policy activism, are supposed to kickstart prudent financing. The European Central Bank is taking a similarly indirect approach. In both places, other policymaking entities, with much better tools at their
disposal, appear either unwilling or unable to play their part. As such, action by central banks will repeatedly fail to gain sufficient traction. In fact, only the U.K. is visibly opting for a more coordinated and direct way to counter the persistent shortfalls stemming from the private part of the credit crisis. There, the “Funding for Lending Scheme,” jointly designed by the Bank of England and the Treasury, seeks “to boost the incentive for banks and building societies to lend to U.K. households and non-financial companies,” while holding them accountable for proper behaviour. The U.K. example is important; but, given the scope and scale of the challenges, the proposal is a relatively modest one. The programme may stimulate some productive credit intermediation, but it will not make a significant dent in what will remain one of the major obstacles to robust economic recovery. Proper access to credit for productive segments is an integral part of a wellfunctioning economy. Without it, growth falters, job creation is insufficient, and widening income and wealth inequality undermines the social fabric. That is why any comprehensive approach to restoring the advanced countries’ economic and financial vibrancy must target the proper revival of private credit flows. © Project Syndicate
Proper access to credit for productive segments is an integral part of a well-functioning economy
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November 20, 2012 business daily | 15
OPINION China’s slow-motion thaw wires of relations with Taiwan Business
Leading reports from Asia’s best business newspapers
Economic Times
Karl Gerth
Professor of modern Chinese history at Merton College, University of Oxford
The Indian Government may be open to tweaking FDI norms in the aviation sector to attract investment, for which there has to be a “willing buyer and a willing seller”, Finance Minister P. Chidambaram said. Without great success, the government introduced changes in the FDI norms in September, allowing foreign carriers to buy of up to 49 percent of paid-up capital in domestic airlines and in cargo handling operations, 75 percent in business aviation and 100 percent in greenfield airports.
all over China, even in Nanchang, the birthplace of the communist state. Today, more than 70,000 Taiwanese companies have investments in the mainland. Trade between the two countries now breaks records yearly and has amounted to more than US$2 trillion since 1987. In 2002, China replaced the U.S. as the top market for Taiwanese goods. This is all the more remarkable considering the size of Taiwan and that the two nations remain technically at war. These figures represent not simply commodities traveling back and forth but a transformation of ordinary lives. Girls who once lined up by the millions in identical Mao suits to shout Communist Party slogans now wear the trendiest fashions and sing the latest pop tunes from Taipei while walking down streets full of restaurants and clubs.
Jakarta Post State-owned Bank Negara Indonesia (BNI) has secured a partnership agreement with Japanese bank Iyo Bank, the largest regional bank in Shikoku prefecture, to further strengthen the company’s foothold in the Japanese banking market. Iyo Bank became the 42nd Japanese regional bank to have signed a partnership agreement with the bank. BNI, the only Indonesian bank with a branch in Japan, established a Japan Desk earlier this year to focus on attracting more funds from Japanese investors doing business in Indonesia.
Korea Times Korea’s global competitiveness ranking has fell over the past two years due to complex regulations and sluggish investment, a factor analysts say will erode the nation’s growth potential. The country ranked fifth in the Global Manufacturing Competitiveness Index this year with a score of 7.59 out of 10, a fall of two places from 2009, according to a bi-annual report released jointly by the U.S. Council on Competitiveness, and Deloitte. It was overtaken by the United States and Germany during the period.
The Nation Thai developers remain confident that the property market in 2013 will grow by 5-10 percent based on strong growth in gross domestic product, anticipated at 4-5 percent. Just the top three property firms – Pruksa Real Estate, Land & Houses and Sansiri – declared they would each launch between 30 and 40 projects. The estimated value of these new projects is 90 billion bath to 100 billion bath (US$3.25 billion) and home prices are expected to increase by 5-7 percent over this year’s levels.
Travel ban end
Q
uick, when did the Cold War end? One obvious choice: June 1987, when U.S. President Ronald Reagan stood in front of the Berlin Wall that separated communist East Germany from capitalist West Germany and famously challenged the Soviet leader Mikhail Gorbachev to “tear down this wall.” Yet at about the same time as Reagan’s telegenic dare, far from the glare of the cameras, a less sensational but perhaps more significant barrier was crumbling: the one separating communist China from capitalist Taiwan. Nowhere, perhaps, was the Cold War better represented than in the division of the Chinese nation into two blocs separated not only by water but by ideology – by communism and capitalism at their most strident. Starting in 1949, more than a million mainland Chinese retreated to Taiwan with Chiang Kai-shek, leader of the Western-backed Nationalist Party, leading to a long-running civil war with the Chinese Communist Party. Military tensions between the countries ran high well into the 1980s. In the centre of Taipei, giant placards proclaimed the national goal: “Retake the mainland!”
Gradual change But starting the same year as Reagan’s memorable speech, shared economic interests and history would lead to a gradual thaw between the two places that would
dramatically accelerate China’s economic reintegration with capitalist countries. It wasn’t the Taiwanese military but rather a political decision that transformed Taiwan-China economic and cultural relations. In 1987, Taiwan’s Nationalist government lifted martial law and eased restrictions on contact with the mainland. Many of the exiles who helped Taiwan prosper and grow had been forced to leave families and friends behind when they fled the mainland. As these restrictions were lifted, a massive increase in flows of capital, products and eventually people between Taiwan and China resulted. Political decisions on both sides hastened the reunion. Taiwan’s comparative advantage in human and material resources and Chinese demand for those resources created strange bedfellows. As China’s economic reforms advanced in the 1980s, more and more mainland consumers demanded goods – such as fast food and pop music – that the Taiwanese were best able to provide. As Taiwan’s industrial sector became less competitive internationally, its de-industrialising economy needed to find new markets and its workers new jobs. The profit motive led the way; manufacturers and business owners followed. As a consequence, China has since received more than US$100 billion in Taiwanese investment. This has funded tens of thousands of projects
Perhaps as important as this resumption of trade was Taiwan’s partial lifting of a travel ban to China upon the death of Chiang Kai-shek’s son, Chiang Ching-kuo. This led to an informal cultural exchange as families, divided
After decades of separation, Taiwanese travellers taught the Chinese much about being consumers through everyday interactions
for decades, reunited and shared a tide of cultural influences. Those Taiwanese driven into exile by the Civil War of the 1940s and their children now became agents of new consumer lifestyles as they travelled back and forth between the two countries, taking new customs and tastes with them. When the father of one of my former Taiwanese students travelled to see his relatives in rural Henan province, he didn’t arrive empty-handed. Like tens of thousands of other Taiwanese visitors, he returned to China with lavish presents. He had intended to give his relatives a colour television, one of the most coveted products in China at the time – but they begged him not to. Not only would it elicit envy, they feared, it would force his relatives to host TV parties for family, friends and hangers-on. Many others, of course, were less cautious and eagerly accepted not only TVs but washing machines, motorcycles and cash. Such gift giving became so common that enterprising Taiwanese stores streamlined the process by allowing travellers to buy the gifts in Taiwan and then pick them up in China. After decades of separation, Taiwanese travellers taught the Chinese much about being consumers through everyday interactions, arguably doing more than any other group to directly transform Chinese consumer culture. Although their visits usually lasted only a few days or weeks, their gifts and their attitudes stayed behind. The fall of the Berlin Wall was celebrated as the triumph of capitalism over communism, with clear winners and losers. But in East Asia, the struggle between these ideologies hasn’t had such a clear or dramatic resolution. Rather, the introduction and spread of capitalism and consumerism into China has occurred in countless small ways. The effects are still unfolding. Bloomberg View
16 |
business daily November 20, 2012
CLOSING Gaza deaths mount in deadly raids
Britain must avoid EU exit vote: CBI
Israeli air strikes killed 13 Palestinians yesterday, hiking the Gaza death toll to 91 as global efforts to broker a truce to end the worst violence in four years gathered pace. As the violence raged for a sixth day, ceasefire efforts gathered steam, with senior Hamas officials in Cairo saying Egyptian-led talks on Sunday with Israel were “positive” but now focused on the need to guarantee the terms of any truce. UN leader Ban Ki-moon urged Israel and Hamas to work with Egypt to reach a ceasefire. Mr Ban was due in Cairo yesterday for talks with the Egyptian leader.
Britain’s biggest employers’ group vowed yesterday to argue against a vote for Britain to leave the European Union, in any referendum on EU membership amid dwindling support for the country’s place in the bloc. Roger Carr, president of the Confederation of British Industry (CBI), told the group’s annual meeting that EU membership was a “launchpad” for international trade involving non-euro zone member Britain. With the economic crisis boosting anti-EU sentiment in Britain, Prime Minister David Cameron has said that when the time is right he will hold a referendum on Britain’s relationship with the 27-country bloc.
Analysts expect Spanish bailout request Spain’s US$264 billion debt will defeat aid reticence
T
he 207 billion euros (US$264 billion) of debt Spain needs to sell next year will force it to request a bailout, according to investors from Pioneer Investments and BlueBay Asset Management Ltd. “Spain will ask for aid in January,” said Tanguy Le Saout, who helps oversee 153 billion euros as head of European fixed income at Pioneer Investments in Dublin. “The sooner they ask for help, the sooner the cost of their debt will reduce.” The nation’s 10-year borrowing cost is about 5.87 percent, up from an average 4.78 percent during the past five years and down from the euroera record of 7.75 percent reached in July. Spain, which has fulfilled this year’s borrowing programme, is yet to seek aid, a condition of the European Central Bank’s bond-buying programme announced in September. Prime Minister Mariano Rajoy faced his second general strike last week since coming to power, after five austerity rounds in less than a year. Pressured to seek a second bailout by the International Monetary Fund, which predicts a 1.3 percent contraction of the nation’s economy
Mariano Rajoy, Spanish Prime Minister
next year as it toils with the secondbiggest deficit in the euro area, Mr Rajoy has said the conditions for aid aren’t clear. The ECB unveiled its Outright Monetary Transactions bondbuying plan, known as the OMT, on September 6, pledging to spend as much money as needed to restore confidence in bond markets. The
programme provides support to debtstrapped nations on condition they sign up to economic reforms as part of a bailout from Europe’s rescue fund.
Yield premiums Investors demand a yield premium of about 453 basis points to own 10-year Spanish bonds rather than
German bunds, down from a euroera high of 650 on July 25 and exceeding last year’s average of 280. The Spanish Prime Minster said November 6 he needs to know how much the ECB would push down Spain’s borrowing costs before his government applies for aid and signs up to the conditions attached. Spain plans to sell at least 207 billion euros of bonds next year, up from 192 billion planned in 2012, the Budget Ministry said September 29. The total may increase, as the nation extends its rescue of cash-strapped regions in 2013, Deputy Economy Minister Fernando Jimenez Latorre said on October 26. The central government has spent more than 40 billion euros bailing out its regional governments this year as most of the 17 regions were locked out of public debt markets. The nation’s credit rating may be cut to below investment grade without a rescue package, Moody’s Investors Service said last month. Moody’s currently rate the nation’s bonds at Baa3, one step above junk, with a negative outlook. Bloomberg
ING wins more time to sell insurance businesses Regulator approved plan for company to create new retail bank
I
NG Groep NV, the biggest Dutch financial-services company, won more time from European Union regulators to sell its insurance operations and pledged to repay state support by 2015. The European Commission said yesterday that it extended the deadline for ING to divest the businesses, originally set for the end of 2013, because of current market conditions. ING said yesterday that the new timeline means it must sell more than half of its insurance arm in Europe by the end of 2015 and dispose of the rest by the end of 2018. “It’s good news,” said Corne Aben, an Amsterdam-based fund manager at Optimix Vermogensbeheer NV, which manages about 1 billion euros (US$1.3 billion), including ING shares. “That increases flexibility, which means they’ll be able to get better prices for the units they want to sell.” EU regulators were forced to reexamine the terms of ING’s rescue
by the Dutch government after the company won a court challenge that overturned their 2009 decision. ING sought to change the original plan as Europe’s debt crisis worsened and regulations toughened, disrupting markets and making it harder to sell assets. ING also said it agreed to sell more than 50 percent of its Asian insurance and investment management operations by the end of next year, and sell the rest by the end of 2016. It must divest at least 25 percent of its U.S. arm by the end of 2013, more than half by the end of 2014 and sell the rest by 2016. The Brussels-based regulator also approved ING’s plan to create a new Dutch retail bank and extended a ban on the company making acquisitions or undercutting rivals on price at its ING Direct Europe unit. Chief executive Jan Hommen said on a conference call that it’s not in shareholders’ interest to pay
ING to sell more than 50 percent of its Asian operations by the end of next year
a dividend yet, and that “many priorities” must come first, including repaying the Dutch state and bolstering capital levels. ING plans to sell the European
insurance assets through an initial public offering, the company said. It filed for a share sale of its U.S. division on November 9. Bloomberg