Macau Business Daily, June 13, 2013 by Business Daily

6,000 unfinished flats certified for pre-sale

Year II

Number 304

Thursday June 13, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

Vitor Quintã

MOP 6.00

April 19, 2013

Philippines’ AirAsia cuts regional timetable

Page 2

Page 6

HK cruise terminal to boost regional tours Page 7

Waste management contract challenged U

rbaser SA, one of the losing bidders for the city’s solid waste management contract, is challenging the contract awarded to Macau Waste Systems Co Ltd (CSR). Madrid-based Urbaser is seeking a court injunction here to suspend the granting of the contract. The injunction papers seen by Business Daily say Urbaser will appeal to overturn the Chief Executive’s decision approving the deal. But until that appeal process is concluded, “which will, most probably, take several months or even years”, the signing of the contract should be suspended to avoid any “harm to public interest,” the company argues. CSR – the incumbent – got the new contract with an offer of 2.07 billion patacas (US$258.8 million), the lowest price among five bidders. A tender jury also awarded CSR a total score of 80.90 percent, but only 79.44 percent to Urbaser’s proposal, according to tender documents. More on page 3 I SSN 2226-8294

www.macaubusinessdaily.com

Maids face long hours to pay agency fees Domestic helpers worked more hours in the first quarter than in any quarter in the past five years, official data show. A workers’ representative says many maids are skipping days off to make some extra money. Besides paying their daily bills and sending some money back home, domestic workers are also burdened by huge deductions to employment agencies, says ‘Indarti’ from the Indonesian workers group ATKI-Macau.

Hang Seng Index 21610

21554

21498

Page 4 21442

21386

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Residents try luck on one-bedroom flats

June 11

There were five times more applicants than available onebedroom flats in a Coloane subsidised development, the Housing Bureau revealed. A member of Public Housing Affairs Committee and a real estate expert believe residents are trying their luck with affordable public homes as they fear private flats will remain beyond their budget. Demand could be even higher for two- and three-bedroom subisdised flats. Page 2

Taxi tender winners give up licences

HSI - Movers Name

%Day

CHINA RES POWER

0.64

CHINA UNICOM HON

0.58

AIA GROUP LTD

0.30

CHINA MOBILE

-0.06

HUTCHISON WHAMPO

-0.13

HANG LUNG PROPER

-3.80

HENDERSON LAND D

-3.98

BELLE INTERNATIO

-4.03

SINO LAND CO

-4.17

NEW WORLD DEV

-5.03

Source: Bloomberg

The winning bidders for nine of the 200 new taxis handed out a year ago have given up on the licences, the Transport Bureau admitted. The eight-year permits will be re-distributed to other bidders on a standby list. While 191 of the new taxis started operation before the end-March, the bureau expects the nine remaining taxis to follow suit ‘within three months’. Page 5

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June 13, 2013

Macau opinion

Fuzzy signal

Demand for one-bed flats outweighs supply Residents try for subsidised homes as squeezed supply, rising prices hit private sector Stephanie Lai

sw.lai@macaubusinessdaily.com

José I. Duarte Economist

he Court of Second Instance has reached a decision that would see the public antenna companies, which illegally relay cable television transmissions, taken off the air. The government now has 90 days to enforce the ruling that would cease illegal television transmissions. The judgement orders the government, after many years of litigation, to enforce the existing and applicable laws, and to comply with the terms of a contract to which it is a party. If this sounds extraordinary, it should. Since 1999, Macau Cable Television Company Ltd has been the sole operator allowed by law to relay television signals by cable. Those are the terms of a contract the company signed with the government. But that monopoly right was never effectively asserted as the public antenna companies continued to provide services to many, if not most, of the buildings in Macau. The company’s complaints bore no results and the losses kept pilling up. After a while the overseas investors in the venture sold their share to a Macau company at what many said was a sale price. Nothing changed out in the field or, more appropriately, on the rooftops. The new owner, Kong Seng Paging Ltd, is itself a public antenna company – an irony many were eager to underline. It turned up the heat by suing the government. The court case is ongoing. So far, nothing seems to have changed and the concession contract ends next year. Even if the latest court ruling is fully enforced within three months, which remains to be seen, the company would have operated for 14 years of its 15-year contract without being able to assert its rights or have its rights enforced by the authorities.

‘Lawless land’ The Bureau of Telecommunications Regulation oversees this industry. Several years ago, belatedly, the bureau issued an ultimatum to the public antenna companies: either reach an agreement with the cable company and the unwilling providers of content or stop broadcasting. In the days after the announcement, the government publicly undercut the regulator. Yes, there are legal problems, it said, but the issue is complex. There are many interests at stake, the public has the right to watch television, it said. We need to take it easy. We should strive to achieve a harmonious solution. As a policy issue, the topic was dead. As a legal issue, well, we had to wait until recently for an answer. Many frame the issue as one of the public’s interest, based on a presumed and vaguely defined right to have access to television broadcasts. There are a couple of extraordinary pieces of reasoning implicit in their argument. First, that to capture and, in some cases, steal television signals and provide them for a fee to consumers constitutes a public service. And that once the phrase “public service” is invoked, these companies are either exempted from meeting the applicable laws or they deserve compensation for doing so if “forced” to comply. That the government seems to condone this behaviour, even by its inaction, is somewhat perplexing. The city is left with a number of companies, which are seldom identified or have their operations scrutinised, having operated for the past 14 years in a way that is a very public and visible breach of applicable regulations. None of the people involved has ever denied that fact or claimed to be unaware of the situation. The government has neither enforced the laws nor respected the terms of a contract to which it was a party – not even when it has been expressly asked to act. The Court of Second Instance defined this state of affairs as one of “abuse without limits” and concluded that it gave Macau the image of a “lawless land”. Who could disagree?

Over 1,500 one-bedroom flats are up for grabs at Seac Pai Van

n average five applicants are chasing each of the onebedroom flats in a Coloane subsidised development, the Housing Bureau revealed. From March 27 to the end of last month, the bureau received 8,483 applications for 1,544 onebedroom units at the Ip Heng building in Seac Pai Van. Two experts told Business Daily the demand for the one-bedroom units isn’t the result of a “panic buy” mentality, but simply a rational attempt to join the home ownership ladder. “For those individuals that cannot afford private housing nor expect to be able to buy one in the future, at least this tender provides a chance for them to secure a flat,” said Leong Kuai Peng. “It is like trying to win a lucky draw,” the member of Public Housing Affairs Committee said. According to the subsidised housing law introduced in 2011, the Housing Bureau will group applicants in three categories before drawing lots. Priority is given to “core [immediate] family”, followed by “non-core family”. “Individuals”, which made up 6,513 of the applications, go to the bottom of the list. “You cannot rule out [the possibility of] cases where applicants just want to secure a flat anyhow and may not urgently need it,” University of Macau associate professor of finance Rose Lai Neng told Business Daily. “So in that sense the number of applicants might not reflect the actual demand,” she said.

Bigger demand “There are some individuals that are not earning much, like those with a monthly salary of 12,000 patacas [US$1,500] or less from a small company, but show the will to have their own place as they are afraid

they cannot afford a home in [the] near future,” said Leong Kuai Peng. “Even living in this kind of housing means that it cannot be resold within 16 years,” she recalled. Mainland Chinese immigrants who recently became Macau permanent residents and “have moderate income are also keen applicants for one-bedroom flats,” Ms Leong added. The application period is open until June 26. The Ip Heng one-bedroom flats are small, with a floor area ranging from 32.2 square metres to 33.7 square metres. They will cost between 524,400 patacas and 701,800 patacas. “The real explosive demand will happen over the subsidised two- and three-bedroom flats,” said Ms Leong.

“Many families would like to at least get a 400 square feet home with a more affordable price,” she commented. Ms Leong, who is also a representative of the Macau General Union of Neighbourhood Associations, believes demand for two- and three-bedroom flats will be proportionately greater than the demand for the single bedroom variety. Housing Bureau director Tam Kuong Man told the media in March that applications for subsidised twoand three-bedroom flats could be open by the fourth quarter of 2013. But he said first the bureau would have to analyse the applications for one-bedroom flats to understand the remaining demand for subsidised homes in the city.

Nearly 6,000 unfinished flats up for sale: govt

here are 5,986 incomplete flats that already meet the new requirements and are available for sale, the Land, Public Works and Transport Bureau said yesterday. In a statement the bureau said it has finished reviewing the application for sales of 2,204 unfinished flats in six housing projects so far this month. The sales permits will be issued within this week and details on the units in these six projects will be updated on the bureau’s website. Most of the unfinished flats – 1,579 – now cleared are in four Coloane projects. Shun Tak Holdings Ltd, the

developer of Nova Park in Taipa, also got the green light to sell 620 unfinished flats. Meanwhile Macau peninsula saw a low-rise project with just 5 unfinished units approved for pre-sales. Until the end of last month, 3,782 unfinished flats had been cleared for pre-sales, accounting for more than half of the residential units currently under construction. Since the new housing pre-sales law came into effect on June 1, a developer selling unfinished units without a permit could face a fine of 10 percent of the transaction value. The sales contract could also be considered invalid. S.L.

June April 13, 19, 2013 2013

Macau

Losing bidder asks court to stop waste contract Spanish firm Urbaser wants the Chief Executive’s decision suspended by the Court of Second Instance Tiago Azevedo

tiago.azevedo@macaubusinessdaily.com

favour of the Spanish company, but the contract had been granted to CSR, “it wouldn’t be possible to restore it to legality,” it argues. During the first year of the new contract, CSR plans to revamp infrastructure and buy new equipment, including trucks. The proposed contract says CSR will be paid 38.4 million patacas (US$4.8 million) this year and 224 million patacas next year to run the service. The company will be paid about 200 million patacas each year for the remaining eight years of the deal. “It wouldn’t be reasonable or even viable, for practical reasons but also from an economic and financial stand” to go back to square one, says the injunction, arguing that to allow the process to continue “would harm the public interest”.

Assessment criteria

CSR has collected Macau’s rubbish since before 1999 (Photo: Manuel Cardoso)

ne of the companies in the running for the city’s solid waste management contract has sought an injunction to prevent the contract from being awarded to Macau Waste Systems Co Ltd. Documents seen by Business Daily show that Madrid-based Urbaser SA plans to file an appeal against Chief Executive Fernando Chui Sai On’s decision. In April, Mr Chui approved Macau Waste Systems, also known as CSR, the acronym of its name in Portuguese, to continue running the contract. CSR is a joint venture of Hong Kong’s Swire SITA Waste Services Ltd and Macau’s H. Nolasco Group. The tender to collect the city’s waste was managed by the Environmental Protection Bureau. CSR’s contract was to end in March. It was extended for a third time until the end of October after the government said it would take more time than expected to review the tender bids. The new 10-year contract is to begin on November 1 but in the injunction filed with the Court of Second Instance last week Urbaser says the process should be suspended. Urbaser will appeal to the court to reject the Chief Executive’s decision and says the adjudication should be halted until the judges reach a decision. Business Daily asked for a comment from the losing bidder through one of its subsidiaries, Portugal-based SUMA Group, but had not received a reply before going to press yesterday. From its review of the tender

KEY POINTS Waste management contract awarded to CSR CSR scored 1.46 percentage points above next-best bid Urbaser seeks immediate court injunction Company says awarding contract could harm public interest

MOP2.07 billion The value of the 10-year contract won by CSR

documents and the decision to award the contract to CSR, Urbaser says “it is undeniable that the adjudication [to CSR] is illegal and invalid”. “The law and the terms of the contract required the contract to be awarded to Urbaser,” the company claims, adding that the appeal will be filed to protect its “interests and rights”. Urbaser offers no other justification for its claims but they may be revealed during the appeal. Until then, the company says the injunction is the “only way” to protect its rights while the court decides if it will overturn Mr Chui’s decision. The government can make its case against the injunction. Business Daily asked for a comment from the relevant government departments but had not received a response.

‘Public interest’ In its appeal, Urbaser says the contract should not be awarded but CSR should be offered an extension until the court reaches its decision. Any decision to uphold its appeal may come too late if CSR is already operating under the new contract, it says. “An appeal to overturn this decision will, most probably, take several months or even years,” Urbaser says. “If the decision is not suspended, the contract may be awarded and be in operation during all this time, with CSR implementing its operation system and methodology and being paid.” Urbaser says CSR’s solutions differ significantly from its bid. If the judges were to rule in

CSR won the contract with a bid of 2.07 billion patacas (US$258.8 million), the lowest of the five bids. The tender programme estimated a cost of 2 billion patacas. Urbaser’s bid came at 2.39 billion patacas. The bureau said last month CSR “scored the highest in the overall assessment, particularly in the areas like employee protection and environmental protection”. Documents seen by Business Daily give CSR a total score of 80.90 percent. The tender jury gave 79.44 percent to Urbaser’s proposal. The mainland’s Guangzhou Standard Environmental Property Management Co Ltd had an overall score of 67.73 percent, followed by Portugal’s Recolte – Recolha, Tratamento e Eliminação de Resíduos SA, with 65.87 percent. A fifth bid, from Guangzhou Wan Sheng Cleaning Services Ltd, was omitted. But the tender procedures and criteria have raised concerns. Some criteria that are typically included in big tenders to reduce the risk of corruption were absent from the rules for this tender. The bureau included the anti-graft criteria in the rules for its previous two big tenders, including the 2010 process for the contract to run the hazardous waste treatment plant. In some tenders, compliance with this provision has contributed between 12 percent and 15 percent to a final score. Former CSR directors were sentenced for corruption as part of the bribery scandal surrounding the former Secretary for Transport and Public Works Ao Man Long. And earlier this year, legislator José Pereira Coutinho accused the government of favouring CSR in a written inquiry tabled in the Legislative Assembly. Public Utilities Concern Association vice-president Johnny Chan Veng Un is also worried. “There should be criteria to measure… the bidders’ ethics, such as whether they were involved in any corruption case, have hired illegal workers or owe outstanding tax,” he told Business Daily in January. Requests for comment from CSR went unanswered yesterday, a public holiday in Macau. The company said in February they did “not see the tender as specifically tailored for anybody”. The Environmental Protection Bureau had said all bidders had to promise to abide by rules on honesty and integrity during the bid process and after the contract was awarded. The government can terminate the contract if the operator breaches integrity standards.

June 13, 2013

Macau China State gets nod on MGM Cotai works China State Construction International Holdings Ltd has been confirmed as main contractor on MGM Cotai, a new casino resort planned for Cotai. MGM China Holdings Ltd, the developer, said in a filing on May 13 it had agreed a deal worth HK$10.5 billion (US$1.35 billion) for the work. But on May 31 MGM China said it needed “additional time” to prepare the formal notification to the Hong Kong Stock Exchange. CSCI says it is the largest wholly conducted contract in its history. The firm conducts business outside the mainland for stateowned China State Construction Engineering Corporation.

Long hours never end for city’s maids High agency charges are driving domestic helpers into working seven days a week Vítor Quintã

vitorquinta@macaubusinessdaily.com

A median week of 50.8 hours was worked by domestic helpers in the first quarter of this year

omestic helpers are working more hours a week than in any other quarter in the past five years, official data show. And a workers’ representative blames fees charged by employment agencies. Domestic helpers worked a median of 50.8 hours a week in the first quarter of this year, the Statistics and Census Service said on Tuesday. It was the first time in five years that the weekly workload of domestic helpers has exceeded 50 hours. In the second quarter of 2008, maids worked a median of 55.7 hours a week.

Indarti, a representative from the Indonesian workers group ATKIMacau, told Business Daily the increase was due to many domestic helpers agreeing to work seven days a week. “Sometimes they have to work on their day-off on Sunday because they want to get some extra money to support themselves,” she said. After paying service charges to employment agencies, Indonesian domestic helpers are left with little money to send to the family back home, Ms Indarti said. “If our salary is 2,500 patacas

[US$313] every month, the agency gets almost all of it, 2,200 patacas, in deductions during the first eight to 10 months.” According to a survey released by the Consumer Council in November, employment agencies also charge employers anywhere from 500 patacas to 2,800 patacas for recruiting domestic help. ATKI-Macau believes the wage deduction “is a form of worker abuse by the agencies”. “But whenever we complain to the Macau government they say there is

no law allowing agencies to deduct any amount from employees,” Ms Indarti said. “So it seems this is a rule linked to the workers’ recruitment back in Indonesia. But how can this be applied in Macau? We have asked the government for help but so far there is no solution.”

Working poor About 9.4 percent of all workers in Macau, about 33,000 people, worked more than 60 hours a week in the January-March period. About 8,700 people in this category were domestic helpers. Domestic workers saw their median monthly wage increase by 6.3 percent from the previous quarter to 3,400 patacas. Despite the pay hike, most maids are still earning less than the government’s minimum subsistence index of 3,450 patacas, which indicates the amount of income it estimates is necessary to maintain a minimum standard of living. The maids’ median wage is also just one-third of the citywide median salary, which reached 12,000 patacas in the last quarter. Maids “don’t just provide service to families and take care of the children, we are helping the Macau economy by allowing the residents to leave the house and go to work,” Ms Indarti said. “We deserve more respect.” She criticised the lack of a minimum wage or a standard contract for domestic workers in Macau. However the Human Resources Office will approve the hiring of non-resident domestic helpers only if they are paid 2,500 patacas or more a month. Of the city’s 19,500 domestic helpers, 18,494 are non-resident workers from the Philippines, Vietnam and Indonesia. Secretary for Economy and Finance Francis Tam Pak Yuen said domestic helpers that will soon be hired from mainland China would probably be paid more, at least 3,000 patacas a month. The pro-government Macao Jiangmen Communal Society said in February that a monthly salary could be as high as 5,000 patacas. An experienced domestic helper in Guangzhou typically earns about 4,000 yuan (5,214 patacas) a month, the Guangzhou Home Service Association said in January. Non-resident workers’ unions and the Macau Overseas Employment Agency Association have called for a minimum wage for all domestic helpers, irrespective of their nationality.

June 13, 2013

Macau

Winners surrender rare taxi licences Government says all new cabs should be on the streets within three months Vítor Quintã

vitorquinta@macaubusinessdaily.com

ne year after the government awarded 200 new taxi licences, a handful of those cars have not hit the streets and the sought-after licences have lapsed. There were 1,171 taxis operating at the end of April, the Statistics and Census Service said last week. That figure is short of the original target of 1,180 taxis. When the government decided to issue the licences last year, the city had 980 taxis, including 100 radiocall “yellow” taxis. The Transport Bureau told Business Daily that 191 of the 200 new taxis had “started providing service before the end of March this year”. The remaining nine licences “were given up by their successful bidders,” the bureau said. The bureau did not say why the winning bidders had relinquished the licences or whether they would lose their deposit, 30 percent of the bidding price. Just days after the results of the tender were announced in June last year, Macau Taxi Driver Mutual Association chairman Tony Kuok Leong Son predicted that at least 10 percent of successful bidders would

it’s impossible to recover that much money in just eight years”. The company operates the city’s “yellow” taxis. The Transport Bureau said the nine remaining licences would be “distributed to other bidders according to their order on the list of standbys”. These bidders have already been required to pay for 30 percent of the bidding price, and have three months to pay for the remaining 70 percent, the bureau said. “It is expected that the nine taxis will successively start operation within three months,” the bureau said. The government issued 200 new licences last year to add to the city’s existing fleet of 980 taxis (Photo: Manuel Cardoso)

give up their licence. He said the return on investment for the new licences would be lower than for most existing taxis because they would be valid for only eight years. Many older taxis licences have no expiry date. Mr Kuok said anyone bidding more than 1 million patacas (US$125,000)

Corporate TDM installs automated cameras for live TV Teledifusão de Macau SA, the city’s public broadcaster, has installed an automated television camera system in a studio it uses for live production. Telemetrics Inc., a company based in New Jersey in the United States, supplied the Telemetrics camera robotics and control system. Chinabased broadcast equipment specialist NDT Group performed the installation. It will “provide an immediate and additional contribution towards the goal of providing cost-efficient and creative production of local news programming,” said Anthony E. Cuomo, president of Telemetrics. The firm was a pioneer in developing pitch side camera equipment for live sports broadcasts in the U.S. and in 1991 won an Emmy Award for one of its camera control systems. TDM was formed in 1984 and offers analogue programming in Chinese, Portuguese and English. It also has digital channels featuring sports, lifestyle programming, high definition broadcasts. TDM also re-broadcasts China Central Television news and has 24-hour radio services.

MGM China names new joint company secretary MGM China Holdings Ltd – a developer and operator of Macau casino resorts – has appointed Lam Wai Yan as new joint company secretary with effect from June 11. She replaces Yeung Yee Har, who has resigned. A company filing with the Hong Kong Stock Exchange said there were no disagreements between Ms Yeung and the MGM China board, and no issues that needed to be brought to the attention of the board. Ms Lam will assist lawyer António José Ferreira de Castro dos Santos Menano, the other joint company secretary of the company. The new appointee is a solicitor in Hong Kong. Ms Lam holds a Bachelor of Business Administration (Law) degree, a Bachelor of Laws Degree and a Postgraduate Certificate in Laws from the University of Hong Kong. She’s also a member of the Law Society of Hong Kong and has experience in corporate finance and compliance matters for listed companies in Hong Kong.

would be more likely to drop out. The government set the minimum asking price at 200,000 patacas. The manager of the Vang Iek Radio-Taxi Company, Mário Ferreira Sin, said in March last year the previous tender in 2007 saw “people bid 1 million patacas for a licence but in the end they gave up because

1,171

The size of the taxi fleet at the end of April

June 13, 2013 April 19, 2013

Macau Pachinko firm Macau casinos benefit seeks dry run from regional spats for Japan casino As Philippines’ AirAsia cuts back regional timetable, research house says harder for ethnic Chinese tourists licence Gaming tax rates key to overseas investor interest in Land of Rising Sun, says Morgan Stanley

to visit rival gaming hub Michael Grimes

michael.grimes@macaubusinessdaily.com

apanese pachinko companies have long shown an appetite for investment in Macau and in some cases of gaining operational experience in the city’s casino industry. Pachinko arcade operator Dynam Japan Holdings Co Ltd is the latest to join that list. Its unit Dynam Hong Kong Co is to inject US$35 million (280 million patacas) as a ‘cornerstone investor’ in the US$787 million Hong Kong initial public offering of casino developer Macau Legend Ltd it emerged late last week. Business Daily reported on May 31 that the Dynam parent firm’s chairman Yoji Sato has an interest in pursuing a casino licence in Japan if the government there decides to offer one or more for tender. Independent brokerage CLSA Asia-Pacific Markets said in a report last year a Japan casino market based on two resorts similar to Singapore’s could “comfortably exceed” US$10 billion per year in gaming revenue. It’s by no means certain that will happen soon however. Takeshi Iwaya, a Liberal Democratic Party politician in Japan’s House of Representatives told Agence FrancePresse in a story published this week that Japan was “sprinting to the finish line” in its bid to get an enabling bill for casino legalisation passed by the Diet – Japan’s two-tier parliament – before the end of the year. But the revolving door of Japan’s coalitionbased politics – with seven prime ministers in as many years since 2006 – has many times derailed or delayed the process. Praveen Choudhary, managing director of Morgan Stanley in Hong Kong, suggested during a keynote conference session at the Global Gaming Expo Asia in Macau last month that the level of gaming tax levied in Japan could be a key element in deciding investor interest. “What I don’t know, and what everybody should worry about a lot, is the tax,” said Mr Choudhary. “If Japan has to ask some new entrant to spend US$10 billion to build a casino resort, and put a 50 percent tax – more than Macau does – then it’s ‘game over’. You can’t be so excited about it any more,” he stated. M.G.

Reduced demand – Philippines’ AirAsia cutting back timetable

ontinuing disputes between the Philippines and authorities in Greater China could harm the efforts of the island nation to compete with Macau and other regional casino destinations says a research house. Union Gaming Group in Las Vegas issued a note saying the announcement by budget carrier Philippines’ AirAsia that from June 15 it will cut back flights between Clark International Airport in the Philippines and Hong Kong; Taipei in Taiwan; Kuala Lumpur in Malaysia; and Singapore, was probably due in part to depressed demand linked to regional politics. “We believe the reduction of some (but not all) of these flights is likely due to declining demand in the face of ongoing tensions and travel warnings,” said Union Gaming. In October last year Business Daily reported that Philippines’ AirAsia was suspending its Clark-Macau service from December 1, 2012, after only six months of operations. Philippines’ AirAsia said then its daily flights were only 30 percent to 40 percent full – far below the load factor of 75 percent needed to make the service profitable. At the time an airport spokesman told Business Daily the carrier “had been concerned about this for a long time now”, in part because of simmering tensions between Beijing and Manila over disputed territory in the South China Sea. It’s not the only concern for the Philippines tourism sector.

Hong Kong’s Security Bureau has maintained a ‘black’ Outbound Travel Alert warning on the Philippines since the August 2010 killing of eight Hong Kong residents aboard a tour bus in Manila. It followed the vehicle’s hijacking by a disaffected former police officer. Hong Kong’s travel warning indicates ‘severe threat’ and citizens are warned to avoid all travel. The only other country for which there is such a warning is Syria. On May 15 Taiwan issued a ‘red’ – inappropriate to travel – warning regarding the Philippines. It followed the shooting dead on May 9 of a Taiwanese fisherman by one or more crew members of a Philippine Coast Guard vessel.

Facing fines The English-language Taipei Times reported Taiwan’s Tourism Bureau saying that travel agents could face fines of between NT$10,000 (US$335) and NT$50,000 for continuing to organise tours to the Philippines. “We believe regional disputes like this could hamper mass market visitation to the Philippines from countries like China, Taiwan and Hong Kong, which are primary customer targets for Manila’s new and future casinos,” said Union Gaming in its note. In August 2011, a year after the Manila hijacking incident, visitor numbers from Hong Kong were down 29.2 percent year-on-year according to figures from the Philippines

Department of Tourism. Clark – a former United States Air Force base – is only 40 miles northwest of the Metro Manila area. Its lower fees and landing charges compared to Manila International Airport make it a low-cost alternative for the short-haul, mass-market Asian tourists that the Philippines hopes to attract to its under development US$6 billion (48 billion patacas) casino strip at Entertainment City, Manila Bay. Michael French is chief operating officer for Solaire Resort & Casino, the first of the four properties to open at Manila Bay. He told our sister publication Macau Business magazine in April that Solaire was aimed at Asian and other international tourists looking for a more Las Vegas-style experience – in terms of gaming, shows, dining and party events – than is on offer in Macau. Philippines’ AirAsia is a 60-40 joint venture between a group of Filipino investors and Malaysian entrepreneur Tony Fernandes’ AirAsia International Ltd. It started flying in March 2012. Under the reduced timetable, services between Clark and Kuala Lumpur will be cut to three times a week from 10 times a week, while Clark to Hong Kong flights will be reduced to seven times a week (i.e., daily) from 10 times a week. The Clark to Taipei and Clark to Singapore routes will be reduced from daily to four times per week and three times per week respectively.

June April 13, 19, 2013 2013

Macau

HK’s old airport reopens as cruise ship terminal

class rises, Mr Liu added. Royal Caribbean, the world’s second-largest cruise operator, owns a 20 percent stake in the consortium that operates the terminal. Another 20 percent stake is held by Shun Tak Holdings Ltd. The conglomerate founded by Macau gambling tycoon Stanley Ho Hung Sun also owns the major ferry operator linking the city to Hong Kong, TurboJET Ltd. Last week the company led by Pansy Ho Chiu King bought a 33.3 percent stake in low-fare carrier Jetstar Hong Kong. Royal Caribbean’s ocean liner Mariner of the Seas was due to dock yesterday at one of the two berths built for the terminal. The second one will be completed next year. While visiting Macau last month, Hong Kong Tourism Board chairman Peter Lam Kin Ngok said the opening of the cruise terminal could be a new tool for multi-destination tours packages covering the two regions. Last year Secretary for Social Affairs and Culture Cheong U also said the Macau was happy to see the opening of the terminal, which is expected to attract more highspending tourists. The venture’s benefits for the Pearl River Delta region are expected to increase with Royal Caribbean planning to set up home port in Hong Kong later this year, Mr Liu said. The company already has home ports in the Chinese cities of Shanghai and Tianjin, as well as Singapore. “Shanghai, Tianjin, Singapore and Hong Kong all have their own unique appeal to travelers,” Mr Liu said. “The cruise market in this region is going to be so big, and they don’t necessarily need to compete for guests.”

Terminal expected to boost Macau, Guangdong multi-destination tours and attract high-spending visitors Vítor Quintã

vitorquinta@macaubusinessdaily.com

Royal Caribbean is planning to set up home port in Hong Kong later this year

ong Kong has turned a former airport into an HK$8.2 billion (US$1.1 billion) cruise terminal as the city seeks to woo wealthy Chinese travellers to help it become Asia’s hub for luxury liners. The terminal, built at the city’s former Kai Tak Airport, opened yesterday. Macau and Hong Kong

officials have said they expect it to attract more affluent tourists to the Pearl River Delta region. Royal Caribbean Cruises Ltd, one of the operators, expects to draw mostly Chinese tourists to travel from the iconic Victoria Harbour, said Zinan Liu, regional vice president for the Miami-based company. “China is quite small compared to

the U.S. [United States] and Europe in terms of market size, as the cruise market is still in its infancy,” Mr Liu said. “But it is certainly taking off, as its growth rate is doubling every year.” China will overtake the United Kingdom in two to three years as Royal Caribbean’s second-largest market after the United States, as demand from the Chinese middle

MIN

With Bloomberg News

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June 13, 2013 April 19, 2013

Greater China

Coal import ban may boost Qinhuangdao price Electricity producers fear proposal could trigger higher costs

eijing’s proposed ban on lowerquality coal imports is likely to boost domestic benchmark prices by as much as 8 percent as supplies drop, according to Fenwei Energy Consulting Corp. Spot cargoes at the port of Qinhuangdao, a benchmark for the nation’s power station coal, may increase by as much as 50 yuan (US$8) per metric ton, Luther

We have talked with several buyers who said if the ban was in force, it will make their [China’s] industry uncompetitive Aris Munandar, vice president, Permata Energy Resources

Lu, a chief market analyst at the consultancy in Taiyuan, said. Domestic power plants may buy more coal from Newcastle in Australia or South Africa if prices rise, he said. China is considering a ban on imports of some lower-quality thermal coal grades, the Economic Information Daily reported May 16, citing an announcement at a conference held by the National Development and Reform Commission and the NEA last month. Roughly one-fifth of China’s coal imports – or 50m tonnes per year – would be banned under the current proposal, which has yet to be formally adopted. “Such draft regulation, if carried out, will ban China from getting at least 60 million to 70 million tons of coal imports, mostly lignite,” said Mr Lu. Two of China’s most powerful energy lobbies, however, are at odds over the controversial proposal. At stake, claims the coal mining industry, are thousands of jobs and the future of one of the country’s largest industries which has already seen at least 10 percent of its coal mines shut down in the last year. Mainland’s power producers, which generate more than 70 percent of their electricity from burning coal, are lobbying hard to get the proposal

Coal import ban sparks industry battle

scrapped out of fears it would raise their costs. “Right now the voice of the opposition is very loud,” said one executive at a large state-owned coal company. “They say, you shouldn’t help the coal companies, you should let the market force these miners to control their costs and raise their productivity.”

Unlikely enforced Among the biggest potential losers is Indonesia, the world’s biggest exporter of coal for power stations.

As much as a third of its exports could be blocked under the proposed Chinese regulations, according to analysts’ estimates. On the other side of the debate stand Chinese coal companies that employ millions of miners across the country – and are starting to warn that it won’t be long before they are unable to pay their workers’ salaries. China’s electricity sector has been particularly hard hit by the slowdown in economic growth, with electricity demand rising only 5.5 percent last year. The country’s energy sector is

Smithfield shows record hunger for farms Chinese purchases in agriculture close to US$7.8 bln this year

China – scouring the world for farm assets

hina is headed to spend a record this year on food assets and farms after a US$32.7 billion splurge in the past five years and just US$4.2 billion in the prior half-decade, data compiled by Bloomberg show. The drive for assets from Brazil to the U.S. and Australia has ignited concern by lawmakers only heightened by Shuanghui International Holdings Ltd’s US$4.7 billion deal to buy Smithfield Foods Inc. of the U.S., the biggest hog producer. “There is immense interest and exploration by Chinese investors right across the agriculture sector,” said Michael Whitehead, agribusiness research director at Australia & New Zealand Banking Group Ltd. “We know of Chinese companies which are fairly well down the track in their due diligence of a whole range of things, whether it’s dairy, wine, protein, or grain.” China’s announced purchases in

agriculture including pastoral land, farm chemicals, processors and food companies, have already reached about US$7.8 billion this year, compared with the record US$8.1 billion in all of 2010, according to data compiled by Bloomberg. In the mining and steel industries, deals are headed for the lowest since 2003, with China’s acquisitions at US$2 billion so far this year. During a tour in Brazil led by the Netherlands’ Rabobank Groep, officials from five Chinese state-owned companies, including heads of mergers and acquisitions, visited a soybean-crushing plant and a biodiesel plant. They met with large-scale farmers in Mato Grosso, the biggest soybean producing region, said Oswaldo Junqueira, head of trade commodity finance at the Utrechtbased lender’s São Paulo unit. “The trip provided opportunities for M&A discussions,” said

June April 13, 19, 2013 2013

Greater China tightly controlled by the state, which has vowed to liberalise energy prices but in practice often finds it difficult to do so because of the powerful vested interests involved. Stalling demand in China has helped send global coal prices down one-third from the levels reached at the end of 2011 – posing huge problems for Chinese coal miners, who account for nearly half of global coal production and include some of the highest-cost coal mines in the world. The mine closures have been the result of falling prices, and several of the country’s oldest coal mining companies are on the verge of going out of business as they haemorrhage money. The mining companies say restricting imports is essential if they are to stay afloat. “The old miners have a lot of employees, if they make losses for a long time it will influence social stability,” said one employee of a mining company. But Beijing is unlikely to implement the proposed ban, according to three mining companies in Indonesia. The National Energy Administration’s plan probably won’t happen, officials from PT Harum Energy (HRUM), PT Permata Energy Resources and PT Adimitra Baratama Nusantara said. The officials cited conversations with unidentified customers in China, saying they’re concerned their costs will increase. “We have talked with several buyers who said if the ban was in force, it will make their industry uncompetitive,” Aris Munandar, vice president of Permata Energy, which operates two coal mines on Sumatra island. “I don’t think the ban will be implemented because the coal industry is still in consolidation. It’ll be very difficult if there’s such a limitation.” Bloomberg News

Emerging economies oil use top OECD China the biggest consumer among non-OECD members

hinese and Brazilian oil demand climbed in April, helping push fuel use by emerging economies above the combined consumption from developed nations such as the U.S. and Japan for the first time, a U.S. report showed. Countries that aren’t members of the Organisation for Economic Cooperation and Development consumed 44.5 million barrels per day (bpd) in April, exceeding the 44.3 million from the most industrialised nations, the Energy Information Administration reported yesterday. The pattern held in May, when the emerging economies used 180,000 barrels a day more than the OECD. “It’s a confirmation that the future of oil demand is not in OECD countries,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. Global fuel-consumption growth

Yum’s store sales decline eases in May Y

Mr Junqueira, who accompanied the Chinese delegation on part of the tour. Shuanghui’s bid for Smithfield, which owns 460 farms and has contracts with 2,100 others across 12 U.S. states, would be the largest Chinese acquisition of a U.S. company and follows a string of global food and agriculturalrelated purchases. In August, Australia approved the sale of Cubbie Station, the nation’s biggest cotton farm and water rights holder, to a Chinese-led group for US$235 million. Bright Food Group Co., China’s second-largest food company, agreed in May last year to buy a 60 percent stake in British cereal manufacturer Weetabix Ltd, valuing the maker of Ready Brek and Alpen cereals at about 1.2 billion pounds (US$1.9 billion). China’s acquisitions are being driven by the desire to secure volumes of safe produce for import and, in the longer- term, access to the transfer of technology, Craig Armitage, Advisory Global Leader for Food and Agriculture at PricewaterhouseCoopers New Zealand, said. “This is just a start of China’s food entities identifying strategic partners and acquisition targets,” PwC’s Mr Armitage said in an interview. For target countries, “it’s a balancing act between attracting foreign capital and balancing the need for local production,” he said. Bloomberg News

will come from emerging economies as demand from industrialised nations slips amid increased fuel efficiency, forecasters including the EIA, OPEC and the International Energy Agency have said. The IEA, the Paris-based adviser to the 28 nations in the OECD, said on May 14 that demand from emerging and developing economies would surpass the OECD this quarter. Fuel use grew by 0.7 percent in April in both China and Brazil, the EIA, the Energy Department’s statistical arm, reported in its monthly Short-Term Energy Outlook. Consumption dropped 1.1 percent in the U.S. that month and 11 percent in Japan. The U.S., China, Japan and Brazil were the world’s four largest oil-consuming countries in 2011, according to EIA data. OECD members will use 45.5 million barrels of oil this year, compared with 44.5 million from emerging markets, the EIA

um! Brands Inc., which gets more than 50 percent of its revenue from China, said same-store sales in the mainland last month fell more slowly than in April as cases of avian flu subsided. Sales at stores open at least a year dropped 19 percent in May, the Louisville, Kentucky-based company said in a filing with the U.S. Securities and Exchange Commission. That followed a 29 percent decline in April and matched analysts’ estimates for a 19 percent decline, the average of eight projections compiled by Consensus Metrix. Chief executive David Novak has been trying to reassure Chinese consumers that the company’s chicken is safe to eat after a deadly outbreak of bird flu and a former supplier was probed for selling chicken with too much antibiotics. The 25 percent drop for KFC stores is an improvement from April’s

Yum has more than 5,400 KFC and Pizza Hut stores in China

11.1 million bpd Estimated China’s consumption in 2014

forecast. In 2014, demand from the developing economies will rise to 45.9 million barrels a day, while OECD consumption will drop to 45.3 million, according to the estimates from the EIA. China’s consumption will rise to 11.1 million barrels a day next year, up 4 percent from this year’s 10.7 million, the EIA said. India will use 3.67 million barrels a day, up 3.7 percent from this year’s 3.54 million. Brazilian consumption will jump 4.8 percent to 3.03 million in 2014, while Russian usage will gain 3.3 percent to 3.48 million. Reuters

GSK fires China research head B

Second-quarter sales at units open at least 12 months in China may decline 20 percent, including a drop of about 26 percent at KFC, the company said in the filing. The fried-chicken chain’s comparablestore sales in China will be positive in the fourth quarter, it said. The fast-food chain earlier this year forecast a “mid-single digit” decline for 2013 profit excluding certain items. Yum, which is planning to open 700 new locations in China this year, has said that the negative sales affect from avian flu will be short-lived. “We do expect a strong bounceback in 2014,” chief financial officer Patrick Grismer said during an investor conference on June 3. McDonald’s Corp, the world’s largest restaurant chain, on June 10 said May same-store sales fell in China. The chain cited avian flu as the reason for the decline. Yum, which also owns Taco Bell, has more than 39,000 restaurants globally.

ritish drugmaker GlaxoSmithKline Plc has fired its head of research and development in China after discovering that a study by some of its Chinese scientists contained misrepresentation of data. A company spokesman said that Jiangwu Zang had been dismissed and three other individuals had been placed on administrative leave, while a further employee had resigned. The decision follows an investigation into concerns about a scientific paper published in the journal Nature Medicine in 2010 involving pre-clinical research into multiple sclerosis. Mr Zang was one of the authors of the paper. “Regretfully, our investigation has established that certain data in the paper were indeed misrepresented,” Britain’s biggest drugs group said in a statement. “We’ve shared our conclusion that the paper should be retracted and are in the process of asking all of the authors to sign a statement to that effect, according to Nature Medicine’s procedure.” The study, which looked at the role of a protein in multiple sclerosis, involved early-stage research and did not directly involve patients, although some blood samples were used. However, the work did inform GSK’s development of an experimental medicine for multiple sclerosis, known as GSK2618960, which has reached the stage of initial testing in healthy volunteers. The early clinical tests of the product have now been suspended as a precaution, although there is no signal of a safety issue with the medicine, the spokesman added. GSK, like many other large Western drug companies, is increasing its research presence in China.

Reuters

decline of 36 percent. “We did see some moderation in the decline from April to May, which is good,” Jack Russo, a St. Louisbased analyst at Edward Jones & Co., said in an interview. News about avian flu “seems to be slowing down a little bit,” said Mr Russo, who advises holding Yum shares. Yum, which has more than 5,400 KFC and Pizza Hut stores in China, fell 1.3 percent to US$70.80 on Tuesday in New York. The shares gained 8.1 percent this year through the close of regular trading, while the Standard & Poor’s 500 Index advanced 14 percent.

‘Single digit’

10 10

June 13, 2013 April 19, 2013

Asia

High-level Korean talks on hold Pyongyang won’t pick up phone after talks rift, Seoul says

North Korea scrapped talks on industrial complex

orth Korea “unilaterally” called off the highest-level talks since Kim Jong-un took power in protest over the rank of South Korea’s proposed delegate, the South’s Unification Ministry said. The North insisted that South Korea’s Unification Minister meet its “much lower-ranking” official and rejected the South’s revised proposal for vice minister-level discussions, Unification Ministry spokesman Kim Hyung-suk said in a televised briefing. The two-day talks were

due to begin yesterday in Seoul and focus on the reopening of a joint factory park. North Korea’s willingness to meet was seen as a sign Mr Kim was seeking to re-establish economic ties after months of heightened tensions on the Korean peninsula. The agreedupon agenda didn’t officially include North Korea’s nuclear weapons programme, which the regime in Pyongyang has vowed to maintain in defiance of international sanctions. North Korea tried to gain

an advantage over South Korea “through this irrational insistence that a top official face a workinglevel bureaucrat,” said Yoo Ho-yeol, a professor of North Korean studies at Korea University in Seoul. South Korea regrets the North’s decision and hopes it will agree to return to talks, the Unification Ministry said. North Korea didn’t answer a call via a communication hotline at the Panmunjom border village, the ministry said. South Korean defence-related

shares rose, with naval ship equipment maker Speco Co. gaining 6.1 percent, electronic warfare equipment maker Victek Co. rising 5.9 percent and armoured vehicle maker Firstec Co. adding 2.5 percent in Seoul. The benchmark Kospi stock index fell 0.3 percent. The won rose 0.5 percent to 1,128.8 against the dollar. Delegations from both sides were to meet at the Grand Hilton Hotel to discuss reopening the jointlyrun Kaeseong industrial zone and a luxury resort aimed at luring South Korean tourists to the North. Marathon working-level meetings on June 9 laid the ground work for the talks, which would have been the first since Mr Kim took over in December 2011. The chances of a breakthrough in any future North-South talks are slim because the “fundamental” dispute over North Korea’s nuclear weapons development remains unchanged, the International Crisis Group’s Seoul-based analyst Daniel Pinkston said yesterday. Mr Kim earlier this year threatened pre-emptive nuclear strikes after the United Nations tightened sanctions for North Korea’s rocket launch in December and an atomic bomb test in February. North Korea on April 3 started blocking South Korean managers and workers from entering Kaeseong, disturbing operations which generate about US$100 million in annual profits for the impoverished regime. It recalled all of its 50,000 workers five days later, shuttering the zone for the first time since it opened in 2005. Bloomberg News

Economists cut Singapore growth GDP growth seen at 2.3 percent this year, survey shows

ingapore’s inflation for 2013 is expected to come in below the central bank’s forecast of 3 percent to 4 percent, a survey of economists by the central bank showed, in a sign rising prices have become less of a concern after two years of elevated cost pressures.

Even though inflation will be lower than last year’s average, it’s still on the high side relative to historical trends so there shouldn’t be any changes in the October policy Francis Tan, economist, United Overseas Bank

The Monetary Authority of Singapore’s (MAS) latest quarterly Survey of Professional Forecasters found that economists now expect the city-state’s consumer price index (CPI) to rise by 2.8 percent this year, a full percentage point below the median estimate of a 3.8 percent gain in the previous poll. But inflation is expected to pick up again in 2014 to 3.1 percent, the survey released yesterday showed. Thus many forecasters believe the central bank will continue to keep monetary policy tight when it publishes its next half yearly policy statement in October. “Even though inflation will be lower than last year’s average, it’s still on the high side relative to historical trends so there shouldn’t be any changes in the October policy,” said Francis Tan, an economist at Singapore’s United Overseas Bank Ltd. Mr Tan said the MAS has indicated core inflation will pick up later this year, and he noted that car prices have begun edging higher after falling in March and April as a result of tougher financing rules. The MAS’ core inflation measure, which excludes housing and private car prices that are more influenced by government policy, will likely come in at 1.8 percent this year, down from the previous median estimate of 2.0

percent. But the survey also showed economists expect core inflation will edge up to 2.0 percent next year. The inflation outlook has improved with the CPI rising by just 1.5 percent in April from a year earlier – the lowest gain in more than three years – as falling car prices and government rebates kept a lid on prices. Singapore’s inflation was 4.6 percent last year and 5.2 percent in 2011. Although Singapore’s first quarter

gross domestic product came in much better than expected, partly due to a surge in financial services as trading in stocks and foreign exchange soared, economists have become less optimistic about growth for the full year. The MAS survey shows economists now expect GDP growth of 2.3 percent for 2013, slower than the median estimate of 2.8 percent in March. Reuters

11 11

June April 13, 19, 2013 2013

Asia

Myanmar takes a seat at its oil and gas feast

Pakistan targets 4.4 pct growth Pakistan targeted 4.4 percent economic growth next fiscal year as Prime Minister Nawaz Sharif’s recently elected government prepares a budget that may intensify efforts to tackle an unprecedented energy crisis. The government plans to narrow the fiscal deficit to 4.5 percent of gross domestic product in three years by curbing tax evasion, Finance Minister Mohammad Ishaq Dar said, adding the gap may be about 8.5 percent in the year ending June 30.

Country still lacks infrastructure to make much use of it

n a few months, Myanmar plans to start pumping roughly US$45 million worth of oil and gas a day from the Bay of Bengal to China by pipeline. The vital fuel for China’s growing economy will bypass the Malacca Straits and U.S. ally Singapore. It will mostly also bypass Myanmar. Though rich in natural resources, Myanmar has little capacity to use them for its own development. For decades, its leaders valued gas for the hard currency it could earn rather than the economic development it could fuel. Today, only one in four of Myanmar’s citizens have electricity. Now, two years after sweeping aside six decades of self-imposed isolation in favour of democratic reforms, Myanmar’s leaders face pressure to deliver tangible results, to appease voters ahead of 2015 elections and to quell sectarian unrest. “We’re now entering the third year of the reforms,” said opposition leader and Nobel price laureate Aung San Suu Kyi, who used her appearance at the World Economic Forum’s East Asia summit in Myanmar last week to underline her ambition to run for president. “What we really want to see now are results in the form of a real change in the lives of our people.” That, experts say, means giving Myanmar energy. “Electricity is definitely numberone,” said Hans Vriens, a Singaporebased consultant who advises companies on investing in Myanmar. “No electricity, no factories.” Making the switch from seller to consumer, however, could change Myanmar’s attitude toward its resources in a way that may smack of “resource nationalism”. Multinationals vying to drill for gas and oil off Myanmar will have to negotiate with the nation as a customer instead of as a partner. And Myanmar’s own customers, China and Thailand, already find themselves re-drawing old purchase agreements. “We’re renegotiating already,” said Pailin Chuchottaworn, CEO of Thai oil company PTT Exploration &

ANA scraps 787 flight as engine fails to start Japanese carrier has the world’s biggest fleet of Dreamliners

NA Holdings Inc. scrapped a service with the Dreamliner yesterday, the third cancellation for the aircraft in Japan this week after a four-month grounding. ANA couldn’t use the 787 for the flight from Ube, western Japan, to Tokyo’s Haneda airport as the right engine failed to start, said Megumi

Mongolia to cut mortgage rates

Production Pcl, which imports US$2 billion of gas a year from Myanmar. Last year, Myanmar approached PTT with a proposal to retain a fifth of the gas its sells to Thailand. Myanmar produces gas equivalent to 10.2 million tons of oil a year, according to a report prepared for the forum by Accenture and the Asian Development Bank (ADB). All but about 15 percent of it is sold to Thailand. “Myanmar has a supply deficit,” said Stephen P. Groff, ADB vicepresident for East Asia, Southeast Asia and the Pacific. “You’ve already set aside a fairly substantial amount of your resources for export.”

In the dark As a result, Myanmar only counts on gas for about 12 percent of the power it generates. Most power comes instead from hydroelectric plants whose water supply varies so widely between the monsoon and dry season that they run at roughly 60 percent of generating capacity. Even in the commercial capital, Yangon, residents can only count on power for roughly a third of any given day, according to the report prepared for the forum. A new offshore gas field near Myanmar’s maritime border with Bangladesh will boost output by 75 percent. The gas is bound for China,

Tezuka, a spokeswoman at the company. The airline is looking into the cause and said it was separate from the battery issues that had plagued the Dreamliner earlier. Japan Airlines Co., the world’s second-largest Dreamliner operator, also cancelled a service with the 787 on Tuesday after an indicator on a flight bound for Singapore showed problem with the engine anti-icing system. ANA and Japan Air both restarted flights with the plane on June 1 after battery malfunctions kept their Dreamliner fleet grounded for more than four months. On June 10, ANA scrapped a 787 flight to Tokyo from Fukuoka after a sensor next to an engine indicated a possible problem. ANA had a reliability of 98.9 percent on domestic flights in April, Ms Tezuka said. That means 1.1 percent of the airline’s 812 domestic flights were cancelled for reasons ranging from weather delays to maintenance, or roughly eight to nine

earning state-owned Myanmar Oil and Gas Enterprise (MOGE) another US$1.8 billion annually, the report estimates. Though at least a portion of the gas has been reserved for domestic use, Myanmar lacks the onshore infrastructure to make much use of it. Where MOGE has been putting its money is a mystery, experts say. Myanmar’s government budget accounting remains murky, the result of antiquated record-keeping and widespread corruption. As part of its plan to streamline national energy policy, Myanmar in January put MOGE along with the Ministry of Energy and the 10 other government institutions involved in energy development under a single National Energy Management Committee.

Mongolia’s central bank plans to cut interest rates on mortgages by almost half to 8 percent from around 15 percent this month, following a new policy approved by the government to ease financial burdens on the middle class. The new mortgages require a down payment of 10 percent to 30 percent and must be paid back in 20 years, the Bank of Mongolia’s chief economist Sandagdorj Bold said. The policy goes into effect on June 17.

Japan eyes failing financial firms Japan’s parliament endorsed changes in legislation dealing with failed financial institutions as part of efforts by regulators to avoid a repeat of the financial crisis. The amendments allow brokerages and insurers to join banks in being eligible for emergency capital from the state-run deposit insurance agency. The Upper House also approved bail-in rules that impose losses on investors of failing financial institutions to reduce taxpayers’ burden.

Reuters

US$45 mln

Worth of oil and gas a day is to be exported to China

a day, she said. The carriers, which have a total of 27 Dreamliners, are flying the fuel-efficient aircraft to cities such as Boston and San Jose, California, that wouldn’t be profitable with larger planes. The four-month suspension of 787 services would affect sales this year, ANA and JAL have said, after melting batteries on two jets spurred regulators to park all the planes in January. Japan has been the biggest market so far for Boeing’s plane, the first jetliner made chiefly of composite plastic materials. That meant ANA and JAL had the broadest disruptions while the aircraft were grounded and Boeing was rushing to find a fix for the lithium-ion batteries. The groundings may have reduced ANA sales by about 16 billion yen (US$166 million), according to figures from the company. JAL’s probably lost 6.5 billion yen in sales due to the groundings, it has said. Bloomberg News

S.Korea jobless rate edges up in May South Korea’s unemployment rate inched up in May, government data showed yesterday. The seasonally adjusted jobless rate stood at 3.2 percent in May, up from 3.1 percent the previous month, according to Statistics Korea. It was the first monthon-month increase since February. The statistics agency said the number of social-welfare jobs increased while job gains in the manufacturing sector slowed down.

Samsung Heavy wins order from Statoil South Korean shipbuilder Samsung Heavy Industries Co Ltd said it had won a US$1.3 billion order to build two offshore drilling platforms for the Norwegian oil firm Statoil ASA. Under the deal, Samsung will deliver two jack-up rig units used as exploratory drilling platforms for oil in the North Sea by October 2016, the company said in a statement. The giant rigs are capable of exploring 150 metres below the sea surface.

June 13, 2013

Markets Hang Seng Index NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AIA GROUP LTD

30.2

1.003344

16574881

CHINA UNICOM HON

13.68

1.333333

22775492

ALUMINUM CORP-H

3.61

15433022

CITIC PACIFIC

10.12

0.1980198

6468988

BANK OF CHINA-H

3.15

1.286174

329406866

BANK OF COMMUN-H

5.87

0.8591065

37793438

0.1727116

14.5

BANK EAST ASIA BELLE INTERNATIO BOC HONG KONG HO

NAME

CLP HLDGS LTD

NAME

PRICE

DAY %

64.4

0.625

2568679

SANDS CHINA LTD

28.75

-0.1736111

6213954

SINO LAND CO

14.28

0.990099

7686664

SUN HUNG KAI PRO

109.1

1.018519

8616634

-0.4815409

2456828

265.6

1.45149

2048509

23.9

2206357

0.8064516

5926157

52.75

1.05364

3208615

POWER ASSETS HOL

65.6

1561243

CNOOC LTD

16.32

0.4926108

46287676

1260442

COSCO PAC LTD

11.76

3138217

SWIRE PACIFIC-A

7192500

ESPRIT HLDGS

12.44

-0.48

4211743

TENCENT HOLDINGS

0.2087683

10140777

HANG LUNG PROPER

26.55

-0.1879699

7812341

TINGYI HLDG CO

CATHAY PAC AIR

13.78

0.2911208

3140232

HANG SENG BK

119.7

0.167364

1690249

WANT WANT CHINA

CHEUNG KONG

114.9

1.23348

3918568

HENDERSON LAND D

2.059087

5880582

WHARF HLDG

75.55

0.1325381

701703

1.112235

6329376

125.6

3.54493

9625332

76.5 -0.06531679

9291476

CHINA COAL ENE-H

7.7

-0.1297017

40174849

CHINA CONST BA-H

5.87

1.206897

202072100

CHINA LIFE INS-H

22.9

0.4385965

30126882

CHINA MERCHANT

25.6

0.3921569

4209584

CHINA MOBILE

HENGAN INTL HONG KG CHINA GS HONG KONG EXCHNG HSBC HLDGS PLC

MOVERS

85.45

1.064459

16569813

HUTCHISON WHAMPO

20.2

-0.2469136

19374736

IND & COMM BK-H

CHINA PETROLEU-H

8.36

0.9661836

101198904

CHINA RES ENTERP

25.2

0.8

4219717

MTR CORP

29.85

1.530612

4880670

CHINA RES LAND

17.16

1.179245

6849146

NEW WORLD DEV

12.98

1.564945

12528960

52W (H) 23944.74

CHINA RES POWER

16.08

-0.618047

7490964

PETROCHINA CO-H

10.94

-1.263538

64234127

(L) 18708.26

CHINA SHENHUA-H

33.35

-0.1497006

11160228

PING AN INSURA-H

63.35

1.198083

8338502

PRICE

DAY %

VOLUME

-1.185771

11294826

LI & FUNG LTD

1.243455

6697663

5.17

1.372549

317570965

12.84

-0.9259259

17517410

0 21770

INDEX 21354.66

CHINA OVERSEAS

77.35

VOLUME

HIGH

21768.24

LOW

21339.04 21330

7-June

11-June

Hang Seng China Enterprise Index NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.45

-1.709402

95966836

CHINA PACIFIC-H

AIR CHINA LTD-H

5.8

1.754386

26635140

CHINA PETROLEU-H

5.66

-0.5272408

108223659

2.85

-2.061856

13745735

CHINA RAIL CN-H

7.11

-1.659751

ANHUI CONCH-H

22.85

-3.382664

15038655

CHINA RAIL GR-H

3.75

BANK OF CHINA-H

3.26

-2.97619

567349283

CHINA SHENHUA-H

BANK OF COMMUN-H

5.64

-1.74216

37521523

CHINA TELECOM-H

BYD CO LTD-H

31.4

-0.4754358

2690535

DONGFENG MOTOR-H

CHINA CITIC BK-H

3.91

-2.005013

35427128

GUANGZHOU AUTO-H

CHINA COAL ENE-H

4.82

-3.212851

34726321

CHINA COM CONS-H

6.87

-0.5788712

CHINA CONST BA-H

6.05

CHINA COSCO HO-H

3.16

PRICE

DAY %

VOLUME

YANZHOU COAL-H

7.59

-1.811125

20534736

ZIJIN MINING-H

1.82

-4.712042

56184348

4056602

ZOOMLION HEAVY-H

6.41

-0.311042

19268902

-0.2659574

8191224

ZTE CORP-H

12.3

-1.6

1302937

24.6

-2.186879

16566665

3.67

0.5479452

46211144

10.98

-5.017301

13512202

7.52

-4.930468

10284273

HUANENG POWER-H

7.24

-4.10596

43399813

12079040

IND & COMM BK-H

5.17

-1.335878

353699251

-1.305057

401702230

JIANGXI COPPER-H

15.14

-1.560468

11475822

-2.469136

6341873

PETROCHINA CO-H

8.64

-1.706485

63285943

19.34

-0.2063983

32073489

PICC PROPERTY &

8.7

-1.916573

34477268

CHINA LONGYUAN-H

8.24

0.6105006

13778198

PING AN INSURA-H

56.4

-0.3533569

11449226

CHINA MERCH BK-H

14.12

-2.080444

19088192

SHANDONG WEIG-H

9.46

-5.02008

13337260

CHINA MINSHENG-H

8.85

-1.775805

39389501

SINOPHARM-H

CHINA NATL BDG-H

7.56

-3.201024

63380795

TSINGTAO BREW-H

15.52

-2.878598

4563050

WEICHAI POWER-H

ALUMINUM CORP-H

CHINA LIFE INS-H

CHINA OILFIELD-H

NAME

19.9

-1.728395

5911974

54.25

-1.363636

873660

25.5

-3.225806

NAME

MOVERS

0 10300

INDEX 9959.74 HIGH

10298

LOW

9947.77

52W (H) 12354.22 9940

(L) 8987.76 7-June

2476212

11-June

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.7

-0.7352941

73833499

CHONGQING CHAN-A

9.95

-3.398058

32798290

POLY REAL ESTA-A

11.52

-2.040816

58642419

AIR CHINA LTD-A

5.11

-2.10728

10750833

CHONGQING WATE-A

6.15

-2.535658

7664968

QINGDAO HAIER-A

11.99

-2.599513

9675714

ALUMINUM CORP-A

3.91

-2.005013

10997299

CITIC SECURITI-A

12.12

-4.716981

160307948

QINGHAI SALT-A

22.09

-1.559715

5417885

ANHUI CONCH-A

15.8

-2.948403

28231627

CSR CORP LTD -A

4.13

-2.364066

23526018

SAIC MOTOR-A

15.06

-1.310616

27892144

AVIC AIRCRAFT-A

11.38

0.08795075

23731115

DAQIN RAILWAY -A

6.6

-0.3021148

19143888

SANAN OPTOELEC-A

20.5

0.2935421

22713373

4.56

-1.298701

9838215

SANY HEAVY INDUS

8.84

-2.212389

53279858

NAME

BANK OF BEIJIN-A

8.66

-1.141553

20380019

DATANG INTL PO-A

BANK OF CHINA-A

2.91

-0.6825939

24941321

EVERBRIG SEC -A

13.53

-0.5147059

32816897

SHANG PHARM -A

11.95

-1.483924

10182677

BANK OF COMMUN-A

4.59

-0.6493506

50292375

GD MIDEA HOLDI-A

13.07

-0.3051106

16739439

SHANG PUDONG-A

9.35

-1.058201

72344081

BANK OF NINGBO-A

10.1

-1.463415

10443984

GD POWER DEVEL-A

2.6

-1.515152

32178050

SHANGHAI ELECT-A

3.91

-2.005013

6361212

BAOSHAN IRON & S

4.66

-1.061571

14869354

GEMDALE CORP-A

7.06

-3.945578

62365970

SHANXI LU'AN -A

15.52

-2.756892

13929027

BEIJING TONGRE-A

22.33

-3.583765

7527406

GF SECURITIES-A

13.04

-2.759135

42871376

SHANXI XISHAN-A

10.11

-1.653696

13575559

32.9

-1.497006

7791811

GREE ELECTRIC

25.46

-2.601377

17095389

SHENZEN OVERSE-A

6.11

-1.292407

30127960

CHINA AVIC ELE-A

23.89

-3.746978

5860003

GUANGHUI ENERG-A

20.04

0.3505258

18135653

SUNING COMMERC-A

5.78

-4.777595

87999544

CHINA CITIC BK-A

4.1

-2.612827

29094638

HAINAN AIRLINE-A

2.41

-2.03252

24421983

TASLY PHARMAC-A

38.64

-0.6428388

3949158

CHINA CNR CORP-A

4.36

-2.242152

26636909

HAITONG SECURI-A

11.56

-1.196581

174956775

TSINGTAO BREW-A

38.28

-1.187403

1689241

CHINA COAL ENE-A

6.32

-1.557632

7939089

HANGZHOU HIKVI-A

36.92

-1.677763

4503194

WANHUA CHEMIC-A

16.84

-0.7660577

8148409

CHINA CONST BA-A

4.74

-0.2105263

24415152

HENAN SHUAN-A

39.99

-2.344322

4818511

WEICHAI POWER-A

21.85

-2.975133

6283793

CHINA COSCO HO-A

3.27

-1.208459

8223979

HONG YUAN SEC-A

22.37

-10.01609

47528606

WULIANGYE YIBIN

22.22

-5.807546

17561869

CHINA EAST AIR-A

2.99

-0.9933775

9524288

HUATAI SECURIT-A

9.95

-1.970443

50082516

YANZHOU COAL-A

13.61

-3.269367

5186000

10.26

-1.251203

18708737

YUNNAN BAIYAO-A

-3.314917

2387818

BYD CO LTD -A

2.98

-0.6666667

63204083

HUAXIA BANK CO

CHINA LIFE INS-A

15.88

-2.03578

14551973

IND & COMM BK-A

4.17

0.4819277

57682406

ZHONGJIN GOLD

11.69

-0.9322034

11764290

CHINA MERCH BK-A

13.17

-0.07587253

68048619

INDUSTRIAL BAN-A

17.04

-1.730104

75305387

ZIJIN MINING-A

3.02

-0.330033

35265181

CHINA MERCHANT-A

12.21

-4.235294

35936529

INNER MONG BAO-A

26.5

-1.960784

17059644

ZOOMLION HEAVY-A

7.07

-1.256983

66111532

CHINA MERCHANT-A

26.88

-2.890173

14093180

INNER MONG YIL-A

27.77

-2.83415

14319950

ZTE CORP-A

12.09

-3.357314

27914039

CHINA MINSHENG-A

9.99

-0.1

120666061

INNER MONGOLIA-A

4.56

-2.978723

33555104

CHINA NATIONAL-A

10.45

-2.881041

33508057

JIANGSU HENGRU-A

27.94

0.4378429

5418376

CHINA OILFIELD-A

15.79

-1.065163

4194983

JIANGSU YANGHE-A

59.38

-7.189747

4372045

CHINA PACIFIC-A

17.93

-2.128821

18689311

JIANGXI COPPER-A

20.14

-2.042802

9695832

10.02

-2.052786

6281240 19249238

CHINA EVERBRIG-A

CHINA PETROLEU-A

6.6

-1.639344

26481187

JINDUICHENG -A

CHINA RAILWAY-A

4.88

-1.810865

16297017

KANGMEI PHARMA-A

18.05

-0.8241758

KWEICHOW MOUTA-A

196.26

-2.677774

2547838

25.05

-2.033633

8170256

CHINA RAILWAY-A

2.74

-1.792115

23980419

CHINA SHENHUA-A

20.19

-0.8349705

8924987

LUZHOU LAOJIAO-A

CHINA SHIPBUIL-A

4.52

59982923

METALLURGICAL-A

1.95

-1.515152

46890379

15.74

-3.965833

18764742

2.39

-0.8298755

11400413

CHINA SOUTHERN-A

3.37

-0.8823529

13746017

NARI TECHNOLOG-A

CHINA STATE -A

3.62

-1.362398

96454076

NINGBO PORT CO-A

3.6

-1.639344

75067684

PETROCHINA CO-A

8.28

-1.075269

14924306

CHINA VANKE CO-A

11.21

-2.436902

87652503

PING AN BANK-A

19.53

-2.980626

40200095

CHINA YANGTZE-A

7.37

-1.073826

14381163

PING AN INSURA-A

PRICE DAY %

Volume

CHINA UNITED-A

37.8

-2.148589

23726804

MOVERS

271

1 2570

INDEX 2484.16 HIGH

2565.87

LOW

2479.61

52W (H) 2791.303 (L) 2102.135

2470

5-June

7-June

FTSE Taiwan 50 Index NAME

PRICE DAY %

Volume

ACER INC

23.05

-1.495726

11572168

FORMOSA PLASTIC

69.5 -0.7142857

8956018

TAIWAN MOBILE CO

ADVANCED SEMICON

25.25

1.202405

13123434

FOXCONN TECHNOLO

78.5

-1.133501

2510081

TPK HOLDING CO L

582

0.6920415

2100136

36.7

-1.740295

4327047

FUBON FINANCIAL

40.05

0.5018821

17452557

TSMC

108 -0.4608295

34819875

UNI-PRESIDENT

57.3

-2.385009

7972497

UNITED MICROELEC

13.5

-1.098901

49149548

ASIA CEMENT CORP ASUSTEK COMPUTER

NAME

PRICE DAY %

Volume

110.5 -0.4504505

6660144

314

-2.635659

5600717

HON HAI PRECISIO

-1.574803

39892021

AU OPTRONICS COR

12.85

1.581028

54042804

HOTAI MOTOR CO

312

-1.421801

394599

CATCHER TECH

271.5 -0.7312614

5784167

WISTRON CORP

30.55 -0.6504065

12749464

17 -0.5847953

4446101

YUANTA FINANCIAL

15.8 -0.3154574

14101067

YULON MOTOR CO

49.2 -0.7063572

3617548

155.5

-0.955414

2787084

CATHAY FINANCIAL

40.2

1.772152

41121327

HUA NAN FINANCIA

CHANG HWA BANK

16.6 -0.5988024

8667322

LARGAN PRECISION

1000

-3.381643

1633221

CHENG SHIN RUBBE

92.3

0.6543075

6070685

LITE-ON TECHNOLO

50.1

-1.764706

6813206

CHIMEI INNOLUX C

19.2

3.504043

46320598

MEDIATEK INC

366.5

-2.526596

8390647

CHINA DEVELOPMEN

8.67

1.048951

53954307

MEGA FINANCIAL H

23.2 -0.8547009

18158106

CHINA STEEL CORP

24.7

-1.002004

14760289

NAN YA PLASTICS

60.4 -0.9836066

9310978

CHINATRUST FINAN

18.85

0.802139

30824866

PRESIDENT CHAIN

184

HTC CORP

1.657459

951582

CHUNGHWA TELECOM

95.2

8338351

QUANTA COMPUTER

61.3

-1.288245

3799956

COMPAL ELECTRON

17.6

-1.123596

8979742

SILICONWARE PREC

35.5

0.1410437

11911188

DELTA ELECT INC

144

0.3484321

5749355

SINOPAC FINANCIA

14.6

13146663

FAR EASTERN NEW

31.25

3551806

SYNNEX TECH INTL

43.6

0.4608295

5613049

FAR EASTONE TELE

-1.098901

3847294

TAIWAN CEMENT

38.1 -0.9102731

6504317

FIRST FINANCIAL

17.8

-0.280112

7508517

TAIWAN COOPERATI

FORMOSA CHEM & F

3442910

TAIWAN FERTILIZE

FORMOSA PETROCHE

77.2

-1.656051

1846901

TAIWAN GLASS IND

16.95

8609616

76.4

0.5263158

2108503

28.65

-1.036269

535459

MOVERS

5 5680

INDEX 5621.75 HIGH

5679.81

LOW

5597.59

52W (H) 5896.71 5590

(L) 4719.96 7-June

11-June

June 13, 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange)

Max 42.3

Average 41.629

Min 41.05

Last 41.6

42.40

62.8

42.05

62.1

41.70

61.4

41.35

60.7

41.00

21.1

Max 62.8

Average 62.156

Min 60.5

60.0

Last 61.8

39.60

PRICE

DAY %

Max 20.8

YTD %

WTI CRUDE FUTURE Jul13

95.49

-0.29236713

Average 20.11

BRENT CRUDE FUTR Jul13

103.48

GASOLINE RBOB FUT Jul13

283.7

(H) 52W

Min 19.94

Last 19.98

(L) 52W

1.910352188

100.4000015

81.5

-0.452140452

-3.6588772

115.9300003

96.04000092

-0.389733507

0.467455202

318.0399895

235.0999832

866.25

-0.230348402

-4.833836858

987.5

814

3.796

-0.105263158

6.569343066

4.499000072

3.256000042

287.88

-0.173382343

-4.094346537

322.0499992

259.5000029

Gold Spot $/Oz

1372.64

-0.6162

-17.5324

1796.08

1322.06

Silver Spot $/Oz

21.7409

0.2911

-27.7951

35.365

20.3395

Platinum Spot $/Oz

1493.8

-0.3569

-1.578

1742.8

1374.55

Palladium Spot $/Oz

764.3

1.1273

9.2388

786.5

553.75

LME ALUMINUM 3MO ($)

1923

-0.87628866

-7.235890014

2200.199951

1809 6762.25

GAS OIL FUT (ICE) Jul13 NATURAL GAS FUTR Jul13 NY Harb ULSD Fut Jul13

ASIA PACIFIC

CROSSES

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

LME COPPER 3MO ($)

7162

-0.940525588

-9.696129114

8422

1889

-0.761754662

-9.182692308

2230

1745

14895

-1.029900332

-12.6905041

18920

14561

16.1

0.625

2.254684027

17.07500076

14.79500103

546

-8.962067528

665

512

WHEAT FUTURE(CBT) Jul13

688

-0.253715114

-13.32283465

900

664.75

SOYBEAN FUTURE Nov13

1320.5

0.113722517

1.362502399

1409.75

1177.5

COFFEE 'C' FUTURE Jul13

128.65

-0.077669903

-13.97525911

202.1999969

125.0499954

NAME

16.31999969

ARISTOCRAT LEISU

72.62999725

CROWN LTD

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jul13 Dec13

SUGAR #11 (WORLD) Jul13

16.4

COTTON NO.2 FUTR Dec13

85.84

0.122100122

-16.91995947

-0.046576619

9.017018034

23.05999947 89.19999695

World Stock Markets - Indices NAME

19.8

COUNTRY MAJOR

LME ZINC

CORN FUTURE

23.6 23.3 23.0 22.7 Max 23.6

Average 22.677

Min 22.45

Last 22.65

22.4

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

0.9366 1.5559 0.9314 1.3282 97.76 7.996 7.7635 6.1335 58.505 30.94 1.2595 29.933 43.085 9833 91.563 1.23708 0.8536 8.1447 10.6193 129.85 1.03

-0.6997 0.1223 0.6335 0.469 1.0229 -0.0063 -0.0013 -0.0049 -0.6282 -0.4202 -0.0635 -0.2238 -0.5338 2.5831 1.7267 0.1576 -0.3409 -0.593 -0.484 0.5468 -0.0097

-9.7514 -3.8143 -1.7178 0.6975 -11.9272 -0.1601 -0.1662 1.5831 -5.9995 -1.1635 -3.025 -3.0067 -4.8277 -0.4068 -2.442 -2.3927 -4.4728 0.8938 -0.8372 -12.5375 -0.0097

1.0625 1.6381 0.9972 1.3711 103.74 8.0111 7.7664 6.3964 58.985 32 1.2869 30.203 43.259 10174 105.433 1.265 0.88151 8.4957 10.9254 133.8 1.032

0.9338 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1203 51.3863 28.56 1.2152 28.913 40.54 9338 78.093 1.20054 0.77553 7.7018 9.6245 94.12 1.0289

Macau Related Stocks PRICE

DAY %

YTD %

(H) 52W

(L) 52W

4.1

3.797468

30.15873

4.49

2.29

VOLUME CRNCY 3966433

12.37

1.8107

15.93252

13.75

8.13

1426403

AMAX HOLDINGS LT

1.21

0.8333333

-13.57143

1.72

0.75

19016175

BOC HONG KONG HO

24.7

-1.2

2.489625

21.6

12328770 200000

CENTURY LEGEND

0.31

16.98114

0.42

0.215

CHEUK NANG HLDGS

5.53

-3.490401

-7.679462

6.74

2.8

11000

CHINA OVERSEAS

21.25

-2.298851

-8.00866

25.6

16.362

22665209

CHINESE ESTATES

13.42

0.7507508

10.64009

14.12

7.975

589000

CHOW TAI FOOK JE

8.93

-0.9977827

-28.21543

13.4

8.4

8411700

EMPEROR ENTERTAI

2.81

-0.3546099

48.67725

3.05

1.14

1080000

FUTURE BRIGHT

2.41

-1.632653

98.8406

2.76

0.795

1230000

GALAXY ENTERTAIN

41.6

0.3618818

37.06754

42.4

16.98

11039490 2329439

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

15238.59

-0.06249951

16.28837

15542.4

12398.48047

NASDAQ COMPOSITE INDEX

3473.766

0.1311824

15.04389

3532.038

2802.38

FTSE 100 INDEX

6354.18

-0.7229179

7.737959

6875.62

5414.64

HANG SENG BK

117

-1.515152

-1.432179

132.8

100.6

DAX INDEX

8239.94

-0.8155095

8.243801

8557.86

6078.22

HOPEWELL HLDGS

25.05

-3.281853

-24.66165

35.3

19.523

2691666

HSBC HLDGS PLC

83.6

-1.065089

2.829024

90.7

61.1

15116755

NIKKEI 225

13317.62

-1.454618

28.11342

15942.6

8328.019531

HANG SENG INDEX

21354.66

-1.204853

-5.747735

23944.74

18708.26

CSI 300 INDEX

2484.16

-1.728152

-1.537564

2791.303

2102.135

TAIWAN TAIEX INDEX

8116.15

-0.544081

5.411389

8439.15

KOSPI INDEX

1920.68

-0.6219279

-3.82414

S&P/ASX 200 INDEX

4757.06

0.4085735

4583.931

FTSE Bursa Malaysia KLCI

NZX ALL INDEX PHILIPPINES ALL SHARE IX

JAKARTA COMPOSITE INDEX

20.1

Currency Exchange Rates

NAME

METALS

Last 20.15

20.0

Commodities ENERGY

Min 20.1

20.2

39.95

Last 39.75

Average 20.566

20.4

40.30

Min 39.65

Max 21.6

20.6

40.65

Average 40.079

20.6

20.8

41.00

Max 40.95

21.6

-2.200489

12.35955

4.66

2.98

2385571

LUK FOOK HLDGS I

HUTCHISON TELE H

18.02

-3.013994

-26.14754

30.05

14.7

1081000

MELCO INTL DEVEL

15.84

-2.941176

75.80466

18.18

5.12

2849000

6922.73

MGM CHINA HOLDIN

20.15

-6.712963

51.75159

21.6

9.509

5640932

2042.48

1758.99

MIDLAND HOLDINGS

3.02

-4.731861

-18.37838

3870000

2.325468

5249.6

3993.8

NEPTUNE GROUP

0.196

-4.390244

28.94737

0.23

0.084

42120000

-4.048968

6.190955

5251.296

3774.693

NEW WORLD DEV

10.94

-5.034722

-8.985028

15.12

8.5

38839484

1782.88

-0.2751986

5.561447

1826.22

1570.94

SANDS CHINA LTD

39.75

-1.730532

17.08394

43.7

20.65

8021526

SHUN HO RESOURCE

1.5

-1.315789

7.142859

1.67

1.03

20000

955.882

-0.1713797

8.370136

998.487

755.149

SHUN TAK HOLDING

3.9

-0.128041

-6.921242

4.65

2.56

8997625

4063.71

-3.922347

9.860286

4571.4

3295.86

SJM HOLDINGS LTD

19.98

-2.298289

12.57824

22.382

12.995

4391262

SMARTONE TELECOM

13.28

-1.775148

-5.681818

17.38

12.5

3016077

WYNN MACAU LTD

22.65

-4.025424

8.114555

26.5

14.62

3777332

ASIA ENTERTAINME

3.87

0.5194805

37.49328

4.7647

2.2076

217131

57.25

0.6151142

28.04742

57.49

41.74

232783 25922

HSBC Dragon 300 Index Singapor

612.35

-0.64

-1.41

STOCK EXCH OF THAI INDEX

1460.86

-4.42838

4.952112

1649.77

1143.17

HO CHI MINH STOCK INDEX

521.95

-0.4975599

26.15716

533.15

372.39

BALLY TECHNOLOGI

Laos Composite Index

1338.82

10.2118

1455.82

980.83

BOC HONG KONG HO

3.26

-0.6097561

6.188927

3.6

2.8

GALAXY ENTERTAIN

5.368

0.5243446

35.2141

5.43

2.25

3215

INTL GAME TECH

17.65

1.146132

24.55893

18.81

10.92

3277393

JONES LANG LASAL

90.81

-0.2964427

8.184414

101.46

61.39

279751

LAS VEGAS SANDS

57.44

0.2968395

24.43674

60.54

32.6127

5425108

MELCO CROWN-ADR

24.04

-1.191944

42.75534

25.15

9.13

3314327

MGM CHINA HOLDIN

2.57

38.91892

2.71

1.36

3000

MGM RESORTS INTE

15.18

1.538462

30.41237

15.95

8.83

7432471

SHFL ENTERTAINME

18.28

2.812148

26.06897

18.57

12.35

489282

SJM HOLDINGS LTD

2.66

3.100775

16.78878

2.9481

1.7255

1460

138.96

1.061818

23.53098

144.99

84.4902

1325083

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 14

June 13, 2013 April 19, 2013

Opinion

All quiet on the currency front Jeffrey Frankel

Professor of Capital Formation and Growth at Harvard University

he term “currency wars” is a catchy way of saying “competitive devaluation”. In the wake of the sharp fall in the value of the yen over the last six months, owing to the monetary component of Japan’s efforts to jump-start its economy, the issue is expected to feature prominently on the agenda at the G-8’s upcoming summit in Northern Ireland. But should it? According to the International Monetary Fund, competitive devaluation occurs when countries are “manipulating exchange rates…to gain an unfair competitive advantage over other members…” But a key point is often missed when the term “currency wars” has been applied to monetary expansion by the Federal Reserve, the Bank of Japan, and other central banks in recent years. The impact of monetary stimulus on a country’s trade balance – and hence on demand for trading partners’ goods – is ambiguous: the expenditure-switching effect when the exchange rate responds is counteracted by the expenditure-increasing effect of expansion. Restored income growth means more imports from other countries. “Currency wars” is a more apt description when countries intervene to push down their currencies in deliberate attempts to help their trade balances. But national authorities will and should pursue economic policies that are primarily in their own countries’ interests. International cooperation can be fruitful; but there is little point attempting it if the nature of the spillover effects is not relatively clear to all. Everyone agrees, for example, that spillovers from pollution or tariffs are negative, not positive, externalities. But the case is not as obvious in the case of monetary policy. For example, if unemployment is high and inflation low in the United States, the Fed will naturally ease monetary policy, particularly via low interest rates. If Brazil is in danger of overheating, its central bank will naturally tighten policy, particularly via high interest rates. It is also natural that capital will flow from north to south as a result, causing the

Brazilian real to appreciate against the dollar. That is the beauty of floating exchange rates: both countries can choose their own appropriate policies.

Capital controls Given that the two countries’ are in different cyclical positions, such exchange-rate movements signal that the international economic system is working properly. Although the stronger real will help U.S. exporters (other things being equal) and hurt those in Brazil, such “casualties of war” are not even collateral damage; rather, they are precisely the point. If the goal is to stimulate demand for U.S. goods and dampen demand for Brazilian goods, why shouldn’t exporters in both countries share in that process, alongside construction and other sectors that are sensitive to interest rates via domestic demand? A more serious dilemma arises if one of the countries is targeting or even fixing the exchange rate, as many Latin American governments did to kill off high inflation in the late 1980’s and early 1990’s. Such a country will not necessarily want to abandon a proven exchange-rate regime at the first sign of trouble. Capital controls and sterilisation of reserve flows might help to delay the adjustment, but a persistent one-directional capital flow

will eventually force the fixedexchange-rate country to allow either its exchange rate or its money supply to adjust. True, in recent years, a wide array of countries has indicated a preference for weaker currencies as a means of improving their trade balances. It is also true, by definition, that not everyone can depreciate or improve their trade balance at the same time. But that does not necessarily mean that depreciators are guilty of violating any agreements or norms, especially if they have merely maintained a preexisting exchange-rate regime.

The world has enough serious disputes as it is. We do not need to invent new ones

Uncoordinated monetary expansion does not even necessarily leave the world in a worse equilibrium. Barry Eichengreen and Jeffrey Sachs have persuasively

argued this for the 1930’s (the opposite of the conventional wisdom regarding beggarthy-neighbour competitive devaluations). Although all countries could not improve their trade balances simultaneously, when they devalued against gold, they succeeded in raising the price of gold, thereby increasing the real value of the global money supply – exactly what a world in depression needed.

Currency warrior The same applies today. Brazil’s finance minister, Guido Mantega, coined the term “currency wars” in response to American efforts to enlist Brazil and other competitors of China in a campaign for a stronger renminbi. But the accusation against the U.S. is especially misplaced. U.S. monetary expansion contributed to global monetary expansion at a time when, on average, it was needed. U.S. authorities have not intervened in the foreign-exchange market or talked down the dollar, and currency depreciation was not the Fed’s goal when deciding to implement its quantitativeeasing policy. Japan comes a little closer to qualifying as a currency warrior, because members of Shinzo Abe’s government were initially foolish enough to mention yen depreciation as an explicit goal. China qualifies in one

important respect: the renminbi was substantially undervalued by most measures from 2004 to 2009 (less so now). But countries have a right to opt for fixed exchange rates. Continuing an existing regime, as China was doing, does not sound very much like “manipulation”. True, renminbi appreciation was probably in China’s interest. It would have been reasonable, beginning in 2004, for those worried about current-account imbalances to propose that China voluntarily allow some appreciation in exchange for, say, the U.S. putting its fiscal house in order. But this is different from accusing Beijing of violating international norms or rules and threatening retaliation (for example, by imposing tariffs, which is a violation of international rules). Few countries accused of participating in a currency war have undertaken discrete devaluations in recent years or acted to weaken their currencies by switching their exchange-rate regimes. These are the sorts of deliberate policy changes connoted by a term like “manipulation”. Switzerland perhaps comes the closest. But the franc was so strong, even at the new rate set in September 2011, that no one can accuse the Swiss National Bank of unfair undervaluation. The world has enough serious disputes as it is. We do not need to invent new ones. © Project Syndicate

editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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15 15

June April 13, 19, 2013 2013

Opinion Business

wires

Central banking’s new face

Leading reports from Asia’s best business newspapers Paola Subacchi

Research Director of International Economics at Chatham House

Asahi Shimbun Japan’s Prime Minister Shinzo Abe said he is planning to cut taxes on corporate capital outlays after investors disappointed by his growth strategy dumped shares last week. “We want to put together a second part of the growth strategy in autumn,” Mr Abe said at a meeting of government and ruling coalition officials. “We want to include drastic tax cuts on investments in plant and equipment.” Investors were disappointed by the lack of bold economic reforms, including the absence of tax cuts for businesses.

Taipei Times Taiwan’s Democratic Progressive Party caucus is expected to initiate several anti-tax-evasion and anti-nuclear amendment proposals in the provisional legislative session, despite being unable to ensure their passage, convener Ker Chienming said. “We are going to ask the Chinese Nationalist Party (KMT) to clearly express its position on these issues. We will also demand that the Executive Yuan refrain from signing the cross-strait service trade agreement until the Legislative Yuan has comprehensively discussed it,” he added.

The Star AirAsia Bhd has urged Malaysia Airports Holdings Bhd to issue a definite delayed opening date for the KLIA2, the country’s new low-cost airport. AirAsia chairman Datuk Aziz Bakar said the regulator, as the airport operator, had the responsibility of notifying the airlines using KLIA2 of a definite opening date, to enable them to be ready to move their operations to the new airport. “The operations cannot be shifted in one night. We need to be prepared on our side also,” he said.

China Daily China’s yacht industry is expected to experience fullspeed growth in the coming years, a sector association said. The number of yachts in the country will increase to about 100,000 in 2020 from about 3,000 last year, with the value of China’s yacht business estimated to be 50 billion yuan (US$8.16 billion) by then, the China Cruise and Yacht Industry Association said in its annual report. The government’s support for marine tourism is also a positive signal for the industry, said Zheng Weihang, secretary-general of the association.

changing of the guard is underway at many of the world’s leading central banks. Haruhiko Kuroda is now installed as the governor of the Bank of Japan (BoJ), faced with the daunting task of ending two decades of stagnation. Mark Carney, the Bank of Canada’s current governor, who is set to take over as the governor of the Bank of England (BoE) in July, is already making his presence felt in British monetary-policy debates. And in the United States, the expected conclusion of Ben Bernanke’s term as chairman of the Federal Reserve Board in January is already inviting speculation about his successor. The only holdouts among the world’s leading economies are the euro zone and China. But that does not necessarily imply constancy. Mario Draghi has been the president of the European Central Bank for barely a year, and the governor of the People’s Bank of China, Zhou Xiaochuan, was almost replaced when he reached retirement age in February. Twenty years ago, such developments would have interested mostly bankers and businesspeople. But, since the global financial crisis, the need to revive and sustain economic growth in the U.S., the United Kingdom, and Japan – and to avoid financial collapse in the euro zone – has prompted major central banks to be more outspoken and pursue more aggressive monetary policies, including unconventional measures like quantitative easing (QE). As a result, many central bankers have become household names; some even have tabloid nicknames, like “super Mario” Draghi.

Bold move This new prominence has also forced some central bankers to reassess their decision-making processes. In Japan, outsiders recently got a rare glimpse into the BoJ’s activities when minutes of a policy meeting were leaked. Likewise, the accidental release a day early of the minutes from the Fed’s March rate-setting meeting to more than 100 people, including banking executives, congressional aides, and bank lobbyists, raised questions about how the bank controls the disclosure of privileged information. In fact, the Fed has been under increasing scrutiny since 2008, when near-zero nominal interest rates drove it to become the first central bank to adopt QE. In a push to reduce the cost of borrowing, the Fed purchased longterm assets in the market, injecting liquidity into the

Mark Carney, next Bank of England chief

financial system. The BoE and the ECB have since adopted similar measures. In early April, the BoJ announced plans to unleash the most aggressive bondbuying programme of all, promising to inject US$1.4 trillion into the economy over the next two years in order to meet an inflation target of 2 percent.

As long as politicians observe the rule of noninterference – at least publicly – central banks will be perceived as unconstrained by political interests

Unconventional measures are part of a broader transformation of monetary policymaking. In addition to becoming bolder and more expansive, it has become increasingly intertwined with fiscal policy. This is most explicit in Japan, where monetary policy is a central component of Prime Minister Shinzo Abe’s economic strategy, dubbed “Abenomics,” implying collaboration between the government and the central bank. Does this undermine central-bank independence by amounting to a de facto subordination of unelected technocrats to elected politicians? Arguably, Japan is an exceptional case, with the constraint of the zero bound on nominal interest rates demanding, at long last, a deviation from conventional measures. In Europe, however, Bundesbank President Jens Weidmann has criticised the ECB for overstepping its mandate with its “outright monetary transactions” programme, through which Draghi aims to fulfil his pledge to guarantee the euro’s survival.

New era

This is monetary policy on steroids, and, to opponents of inflation-inducing money creation, it amounts to playing with fire. But, for Japan, which has been struggling with deflation for a generation, it is a risk worth taking. Whether Kuroda’s assault will bolster domestic consumption and investment remains to be seen.

As a result, questions about the role of monetary policy and the independence and accountability of central banks, once confined to rarefied academic discussions, are fixtures of broad policy debate. But, rather than try to define a single approach, central bankers should aim to develop individualised approaches within the orthodox monetarypolicy framework, which revolves around price stability and independence. For example, the Fed’s

mandate dictates that price stability can be explicitly linked to active support for GDP growth and employment; for the BoE and the ECB, it can be a condition for achieving the broader goal of sustainable growth and employment. As long as politicians observe the rule of noninterference – at least publicly – central banks will be perceived as unconstrained by political interests. The BoJ, by demonstrating that aggressive money creation is a legitimate approach to fighting deflation, has broken previously sacrosanct conventions. At the same time, it has taken the unprecedented step of incorporating monetary policy into a comprehensive economic strategy based on coordination among different policy areas and their associated institutions. This integrated approach could prove effective in countries where the real economy and the financial sector are closely linked, ensuring the timely, orderly implementation of policies, while preventing adverse spillovers. Such coordination would infringe on centralbank independence no more than multilateral cooperation undermines the sovereignty of the countries involved. While the impact of Abenomics on Japan’s economy remains to be seen, its impact on debates about monetary policy and the relationship between central banks and governments is already becoming apparent. One hopes that Carney will follow this trend of challenging conventional wisdom at the BoE. A new era of active and varied monetary policy may have begun, with potential benefits for all. © Project Syndicate

June 13, 2013

Closing Vietnam to extend stock trading hours

Euro zone industrial output up in April

Vietnam’s two main stock exchanges will extend trading hours to help boost liquidity and lure investors to a market that’s 13 times smaller than Singapore’s. The Ho Chi Minh City Stock Exchange, the country’s main bourse, will extend afternoon trading hours by 45 minutes to end at 3 pm local time, chairman Tran Dac Sinh told Bloomberg. Trading hours for the Hanoi Stock Exchange will also be extended by 45 minutes for the afternoon session, deputy general director Nguyen Thi Hoang Lan said. The VN Index has rallied 27 percent this year, the best performer among benchmark gauges in Southeast Asia.

Euro-area industrial output unexpectedly increased in April, led by France, adding to signs the currency bloc’s economy is beginning to emerge from a recordlong recession. Factory production in the 17-nation euro area rose 0.4 percent from March, when it increased a revised 0.9 percent, the European Union’s statistics office in Luxembourg said yesterday. Production fell 0.6 percent from April 2012. Industrial output in Germany, Europe’s largest economy, expanded 1.2 percent in April after a 1.8 percent increase a month earlier. French output rebounded with 2.3 percent growth after a 0.6 percent contraction. Production in Italy and Spain decreased.

Greece first developed market cut to emerging Government announces state’s tv closure calling it ‘haven of waste’

Thousands of people held a protest outside the state television’s headquarters

reece became the first developed nation to be cut to emerging-market status by MSCI Inc. after the local stock index plunged 83 percent since 2007. Greece failed to meet criteria regarding securities borrowing and lending facilities, short selling and transferability, said MSCI, whose equity indexes are tracked by investors with about US$7 trillion in assets. Qatar and the United Arab Emirates were raised to emerging markets, while Morocco was cut to a frontier market. New York-based MSCI will keep South Korea and Taiwan as emerging markets, and

placed Chinese shares traded on local exchanges on review for inclusion in the emerging category, according to a statement yesterday. Greece’s ASE Index has dropped 9.9 percent this week as the government failed to win any bids in a sale of the country’s gas monopoly. The unsuccessful attempt to sell Depa SA dented Greece’s state-asset sales programme, which underpins 240 billion euros (US$318 billion) of bailout loans from the euro area and International Monetary Fund. “It is unclear yet what the weight of the MSCI Greece will be on

emerging markets, but in any case it will be significantly higher than that it has on developed markets,” Constantinos Zouzoulas, an analyst at Axia Ventures Group, a brokerage in Athens, wrote in a note. “This could be positive news for the Greek market as it could attract more interest, although there could be a pressure in the short term.” Locked out of bond markets since April 2010, Greece accepted two European Union-led bailout packages as public opposition to pension and wage cuts derailed the pace of promised economic reforms. The ASE was the world’s

U.K. territories won’t sign tax deal before G8 But ready to agree on wider sharing of information, says Bermudan premier

ritain’s overseas territories will not sign up to an international convention aimed at tackling tax evasion ahead of the G8 summit in Northern Ireland next week, the premier of Bermuda said yesterday. British Prime Minister David Cameron has invited the mainly Caribbean territories to London ahead of hosting the annual gathering of the G8 group of leading economies, at which he has put tax avoidance and evasion high on the agenda. Though they share Britain’s monarch as head of state, the U.K.

government’s writ doesn’t run in the self-governing territories, so Mr Cameron must rely on persuasion to secure an agreement. A deal could give Mr Cameron a coup against tax campaigners who question Britain’s commitment to the issue, given the prominent role played by U.K. territories in facilitating tax evasion, avoidance and the hiding of stolen assets. Bermudan Premier Craig Cannonier said the territories were ready to agree that wider sharing of information with international

tax authorities was required but Mr Cameron’s aim of having the territories all commit to signing the convention was unlikely. “My understanding is that we are not here to sign something, but simply to agree that everyone needs to get on par,” he told Reuters. He said the territories had held conference calls ahead of their meeting with U.K. ministers in London this week and none had expressed a willingness to commit to signing the convention when they gather with Cameron at Downing

second-worst performer since October 2007.

Broadcaster shutdown The government yesterday shut down the public broadcaster ERT, calling it a “haven of waste”. Viewers watching the news on the main TV channel saw the screens go to black late on Tuesday evening. The government move affects 2,700 jobs at ERT and is part of sweeping austerity cutbacks demanded by the debt-laden country’s international lenders. “ERT is a case of an exceptional lack of transparency and incredible extravagance. This ends now,” government spokesman Simos Kedikoglou said earlier. While all employees are to be sacked, he added they would be paid compensation and would be able to apply for work when the corporation re-launches as a smaller, independent public broadcaster. “A bill for a new Greek, radio, Internet and television company was submitted today” for review by the government and parliament, the government said yesterday. Riot police have been deployed in Athens as thousands of people have gathered outside ERT’s headquarters to protest against the decision. The Athens Journalists’ Union has called a 48-hour strike to protest against the closure. ERT, which began broadcasting in 1938, is funded by a direct payment of 4.30 euros (US$6) added monthly to electricity bills. It ran three domestic TV channels, four national radio stations, as well regional radio stations and an external service, Voice of Greece. Bloomberg News/AFP

Street on Saturday. Mr Cannonier said Bermuda already met most of the standards in the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, including having a register of beneficial owners of companies that other tax authorities can check. However, he said the convention, drafted by the Organisation for Economic Cooperation and Development, a body of mainly rich nations, had potentially damaging elements for Bermuda. “There’s some clauses in there that we need to look at, that may need to be adjusted, and … our finance ministry is going over it with a finetooth comb,” he said. In May, the territories, which also include the Cayman Islands, the British Virgin Islands and the Turks and Caicos Islands, agreed to share taxpayer information with the U.K., France, Germany, Italy and Spain, but the convention will include many more countries and more information. Reuters