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Bad weather delays1 Taipa ferry terminal

MOP 6.00

April 19, 2013

www.macaubusinessdaily.com

Year II

Number 287

Tuesday May 21, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

Vitor Quintã

The completion of the long-awaited Taipa new ferry terminal will suffer another ‘minor delay’ due to heavy rain this spring, the Infrastructure Development Office said. The Maritime Administration still expects to begin full operations in the first half of 2014. Meanwhile the renovation works of the Outer Harbour Ferry Terminal could start in the next quarter. Page 3

Govt awards modest hike to Macao Water T

he government said yesterday it would increase by 5.92 percent its annual service payment to Macao Water Supply Co Ltd. A year ago the monopoly utility asked for a 26.2 percent rise in payments. The firm said in a statement it was “very disappointed” with the government’s decision, which is below last year’s consumer price index

inflation rate. But the Maritime Administration director Susana Wong Soi Man described the offer as “acceptable”. Nonetheless, both sides will “soon” sign an amendment to the water supply contract that will introduce a mechanism to determine any future price hike, Ms Wong added.

Home supply could shrink with pre-sale rules The first law regulating transactions on unfinished flats will be put to a final vote at the Legislative Assembly today. Estate agents welcome the new law, saying it could help boost buyers’ confidence and market transparency. But they warned that it could mean a “lock-up” period for the available unfinished flats. Page 4

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More on page 3

Hang Seng Index 23510

23476

23442

Tourism helps food manufacturing soar

Shun Tak ready to launch hotel brand

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Casinos linked to underground banking Page 4

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23408

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23340

May 20

Frank Fahrenkopf bows out at G2E Asia

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rank J. Fahrenkopf Jr – president and CEO of the American Gaming Association since 1995 – steps down on June 30 to move to a consultancy role. His replacement is Geoff Freeman, chief operating officer of the U.S. Travel Association, which conducts lobbying, promotion and research for the country’s travel industry. The AGA is the premier trade body for casino operators and suppliers and also a co-organiser – with Reed Exhibitions – of Global Gaming Expo Asia 2013, which starts at CotaiExpo at The Venetian Macao today. On the eve of his final edition of G2E Asia, Business Daily spoke to Mr Fahrenkopf about his career, the show and his life in politics.

HSI - Movers Name

%Day

TENCENT HOLDINGS

6.25

AIA GROUP LTD

3.85

CHINA RES LAND

3.73

CITIC PACIFIC

3.66

COSCO PAC LTD

3.65

ESPRIT HLDGS

0.37

BELLE INTERNATIO

-2.16

TINGYI HLDG CO

-2.43

CHINA RES POWER

-3.29

CHINA RES ENTERP

-3.98

Source: Bloomberg

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May 21, 2013

Macau

Food processing sets output record in Q1 Manufacturing has its busiest first quarter for five years Vítor Quintã

vitorquinta@macaubusinessdaily.com

T

he food and drink processing industry’s output was the highest ever in the first quarter of this year, giving the manufacturing production index the best start to any year since 2008, official data released yesterday show. The first-quarter output of food and drink processers was 37.1 percent higher this year than last year. Food and drink processing accounts for over one-third of the manufacturing production index. The food and drink processing production index rose to 135.2 points in the first quarter, the highest since the Statistics and Census Service began publishing data on food and drink processing in 2008. The food and drink processing industry was the only big manufacturing industry to produce more in the first quarter – usually a slower period, owing to the Lunar New Year – than in the fourth quarter of last year. Unusually, it was not the Chinese bakers that drove the growth in food and drink output. The output of bakeries was the most ever, but it was only 6.4 percent higher than a year earlier. The food and drink processing

business has grown as tourism continues to boom. Macau had over 7 million visitors in the first quarter of 2013, 1.9 percent more than a earlier year. Last year each visitor spent an average of 185 patacas (US$23) on food. The manufacturing production index rose to 77.8 points in the first quarter, 10.5 percent higher than a year earlier and the highest in any first quarter since 2008. Manufacturing output has been rising since 2009, having declined in the preceding six years as the textiles industry contracted after quotas for international trade in textiles were abolished. The textiles and clothing industries combined still account for about 30.8 percent of the manufacturing production index. But the output of textiles makers in the first quarter was 9.6 percent lower than a year before and the output of clothes makers was 43.8 percent lower. The textiles production index fell to 6.6 points, having been 179.5 points in 2003. The clothing production index fell to 5.9 points,

business as usual

Time for decisions

Paulo A. Azevedo pazevedo@macaubusinessdaily.com

I

t seems not to have struck anyone as odd that, 24 hours after high-ranking German officials strongly criticised the powers that be in the European Union, especially the European Commission, for the measures they had imposed on euro zone countries in dire economic predicaments, the German Chancellery gave assurances of Germany’s full support for the European Commission. The Germans seem tired of being compared to the big bad wolf. Now they are insisting that it is a mistake to force austerity on countries such as Greece, Ireland and Portugal. Looking to their own experience with the unification of their country, the Germans now say the euro zone’s weaker economies will escape their predicaments only by exploiting their competitive edge, difficult as that may be. For the weaker economies to exploit their competitive edge, they must use the money from the EU structural funds they were given between 2007 and this year. It is here that we can see a similarity between the mistakes made by euro zone countries now in deep trouble and Macau. By failing to use properly the fiscal surpluses accumulated year after year, mainly from gaming taxes, the government here is failing to support measures that would allow more sustainable economic growth and make the economy more diverse. It has barely lifted a finger to wean Macau off its growing dependency on gaming. Gaming will always be the engine of growth in Macau. If we were to lose this industry, we might as well live on dole-outs from Beijing. No other industry would be capable of giving us the near future as much as we get today from gaming and from the ancillary hospitality and retailing industries. It is our main responsibility to use some of the funds gaming generates to attract new talent, introduce new technology and foster new industries, instead of falling victim to the old practices of under-the-table deals made by a few tycoons and state-owned enterprises that fear competition because they know they would never be able to cope with it. Macau’s leaders must choose: invest, open the markets and be more transparent, or continue to pretend that falling asleep in the shade of the gaming tree is the answer, and that everything will be just fine.

The food and drink processing business has grown as tourism continues to boom

having been 241.5 in 2003. The tobacco products production index fell to 113.3 points, 27.3 percent lower than a year earlier, after hitting a record high of 200.5 points in the second quarter of last year. Production of non-metallic mineral goods – which include

construction materials such as cement, ceramics, glass and lime – fell by 16 percent. This reflects activity in the construction industry which, having completed Sands Cotai Central, is now making a start on new other new casino resorts in Cotai.


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May 21, 2013

Macau

Macao Water gets smaller hike than it asked for Government approves a 5.92-percent hike, but company says it is ‘very disappointed’ Tony Lai

tony.lai@macaubusinessdaily.com

A notice published in yesterday’s Official Gazette gives Secretary for Transport and Public Works Lau Si Io the green light to sign the contract revision. Once it is signed the government will pay Macao Water 4.65 patacas (US$0.58) per cubic metre, up from 4.39 patacas. This change will not translate into the fees paid by water consumers. Asked about what could be Macao Water’s reaction to this hike, Ms Wong said: “We hope they look at the situation of the Macau society and accept the social responsibility as a public utility providing water”. The company, though, is not satisfied with the decision. The approved rate “is far less” than the one the company applied for, Macao Water said in a statement late yesterday. The approved rate “is lower than the inflation rate in 2012,” the company said, adding that it is still facing heavy costs. “Macao Water is very disappointed with the approved rate,” it said.

Macao Water says its after-tax profit has been falling since 2009 (Photo: Manuel cardoso)

M

acao Water Supply Co Ltd will finally get an increase in the payment it receives from the government, but it will be less than one-fourth of the hike the company asked for a year ago. The Maritime Administration announced yesterday that it would allow a rise of 5.92 percent on the price it pays the supplier to provide the city with water. The company,

however, said it is disappointed with the decision. “We have considered different factors like the inflation, the company’s operating results and profits and the public’s levels of satisfaction with Macao Water,” said Susana Wong Soi Man, the regulator’s director. The hike is far smaller than 26.2 percent the supplier asked for in

New problem delays Taipa terminal work The island’s permanent ferry terminal will not be completed until the second half

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hat the government calls a “minor delay” caused mostly by heavy rain has again put back the long-awaited completion of the Taipa permanent ferry terminal. The director of the Maritime Administration, Susana Wong Soi Man, told reporters yesterday: “There will be a minor delay in the completion, but it would be better if it were the public works department to elaborate on the details.” The Infrastructure Development Office said in a written reply to Business Daily that the construction progress “somehow lagged behind due to several factors including the weather, namely rain”. “We are in close contact with the public works department to monitor the progress of construction,” was all she had to say on the matter. Ms Wong said work on the terminal had been meant to finish by the middle of this year, but that

she now hoped it would finish in the second half. “Part of the pier can gradually be transferred to the relevant government department for trial operation in the third quarter of 2013,” the Infrastructure Development Office said. “The delay will not have a big impact. It just means there will be a slight postponement in us taking over the terminal. But we will continue our work as usual,” Ms Wong said. The Maritime Administration is expected to conduct trials of the terminal for six to nine months before opening it in the first half of next year. The terminal will be the city’s largest. The government said in December that the terminal would be capable of handling 40 ferries per hour. The Outer Harbour Ferry Terminal in the NAPE district of

May 2012. “We think this [increase] is acceptable and it can cover Macao Water’s additional spending amid surging costs,” Ms Wong told reporters on the sidelines of a public event. The government has already notified the company of this decision and both sides would “soon” sign an amendment to the water supply contract, she added.

the peninsula can handle 30 ferries per hour. Construction of the new terminal began in 2005. The work has been dogged by delays and controversy, mainly the result of changes in the design of the terminal to make it larger. The budget for the project was 500 million patacas (US$62.5 million) in 2005, but had swelled to 2.55 billion patacas by 2011. The Infrastructure Development Office declined to say whether the contractor was to blame for the delay. Ms Wong also said yesterday that renovation of the Outer Harbour Ferry Terminal could begin in the third quarter, a year later than originally scheduled. She said the Land, Public Works and Transport Bureau was in the “final stage” of farming out the work. The bureau said last month it had received 15 bids to do the work, ranging from 77 million patacas to 104 million patacas. Ms Wong said the work would take one year. She said the work would be divided into five phases to ensure that the terminal could continue to operate around the clock. The work would include installation of a baggage carousel, something that passengers had been longing for, Ms Wong said. T.L.

Price mechanism Macao Water executive director Felix Fan Xiaojun told reporters earlier this month: “From a business perspective we surely want more from the government, to help us relieve our burden.” “We understand the government has its own concerns, such as public opinion,” he said. “Any decision from the government can help our operations, particularly in tackling soaring costs.” Macao Water said in March that its after-tax profit fell by 12.6 percent last year to 49.43 million patacas (US$6.18 million) as its costs rose. The company’s profit has been falling since peaking at 72.5 million patacas in 2009. Mr Fan said Macao Water’s profit also went down in the first quarter of this year, against the company’s expectations. But he declined to reveal any further details. Ms Wong said the contract amendment would also “introduce a mechanism” and the factors to determine the extent of any future price hike. “There will be new conditions, [stating] that a future price hike should be based on factors like the public’s satisfaction, whether or not Macao Water has cooperated with the government’s policies, and improving its water loss rate,” she said. The water loss rate refers to the water that has been lost before reaching consumers. This mechanism will be unlike the one planned for public bus operators, which would only allow companies to apply for a hike once a year, according to the Maritime Administration. Ms Wong added they would continue to instruct a third-party institution to carry out surveys on residents’ satisfaction with the water supply service. A survey carried out last year shows the public satisfaction with the water supplier reached a level of 70 out of 100 points, she said.


4

May 21, 2013

Macau

Shun Tak ready Flat pre-sales law to run hotels may pinch supply

Hong Kong-listed Estate agents say regulation of pre-sales is healthy, conglomerate eyes but may come too late to curb the surge in home prices ‘two or three hotels’ Stephanie Lai in Cotai plot sw.lai@macaubusinessdaily.com

Vítor Quintã

vitorquinta@macaubusinessdaily.com

T

Shun Tak will have hotel management operations ‘within a year’, said Pansy Ho

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onglomerate Shun Tak Holdings Ltd is planning to launch a hotel management branch within a year, managing director Pansy Ho Chiu King said last month. “We’re setting up [the branch] now. We have not gone down to the last details; we are beginning to amass a professional team of people,” Ms Ho told travel trade magazine TTG Asia. “We will make an announcement soon and maybe” the company’s hotel management operations will be up and running “within a year,” she added. The businesswoman believes that to start its own hotel brand is the right move for the Hong Kong-listed company to cash in on its brandappeal and client list. “If we are going to continue to build and invest in Macau or outside – and we all hear how Asia-Pacific, especially China, is going to grow – eventually there will be a market” for hotels, she was quoted as saying. Shun Tak can use its “accumulated experience of over 50 years in servicing huge numbers of Chinese customers,” Ms Ho said on the sidelines of PATA Annual Summit in Bangkok last month. “We have that database and understanding of Chinese customers, so it is probably a good time to start the service,” she added. The company is looking at “the possibility of building two or three hotels” in the Cotai plot it controls, Ms Ho said. According to Shun Tak’s 2012 annual report, the firm is still “in discussion” with the government “on its plan to develop five-star hotels on the site”. One of the hotels planned for the project with a gross floor area of about 248,500 square metres could be the “ultra-luxurious” Jumeirah Hotel, the report adds. The project, in a partnership with the Dubai-based hotel chain Jumeirah Group, was originally scheduled to open in 2013. In 2009, Ms Ho said the Jumeirah Macau Hotel would include apartments for sale, conventions and exhibition facilities, as well as “zones for gaming in certain areas of the resort outside the hotel’’.

he Legislative Assembly votes today on the bill to govern sales of unfinished flats which, if passed by the assembly, could soon become law. Estate agents welcome the bill, telling Business Daily that, once enacted, it could boost the confidence of prospective homebuyers and make the housing market more open. But estate agents also warn that it could mean an interruption in the supply of housing. The bill would allow the sale of unfinished flats only after the foundations of the building containing them had been completed and the developer had registered the project. Estate agents are sceptical. “Experience tells us these procedures, particularly for high-rise residences, can take more than one year, rather than the eight months that the government is claiming,” said the district sales director of HKP Estate Agency (Macau) Ltd, Marco Wong Kwok Ki. “Thus, we are afraid that this will further lock up the market supply

and affect business,” Mr Wong said. “The lock-up of the supply of unfinished flats appears as more a problem of time-consuming administrative procedures than a problem with the bill,” he said. The bill would also make a buyer’s payments for an unfinished flat dependent on progress made in building it, and would mandate that the sale contract set out at what stages of construction payments would fall due. The bill says the final payment should be at least 30 percent of the price of the flat, and should fall due only when the government has issued the housing permit for the building. A residential building cannot be occupied unless is has a housing permit.

Unseemly rush The Legislative Assembly began debating the bill almost one year ago. In the meantime, developers have been rushing to pre-sell unfinished flats before the bill is enacted. At least 60 percent of the 8,000 unfinished flats in the pipeline in the

first quarter of this year have been sold, data from the Land, Public Works and Transport Bureau show. The bureau’s director, Jaime Roberto Carion, said last month that some developers had begun pre-sales without government approval of the floor plans for their projects. The flats sold included some in the high-end Pearl Horizon development in Areia Preta. Estate agents estimate that the average price of space in unfinished flats rose to 8,000 patacas (US$1,000) per square foot in the first quarter of this year from 5,000 patacas a year earlier. The managing director of Midland Realty (Macau) Ltd, Ronald Cheung Iat Fai, said the enactment of the bill would come too late to curb the surge in housing prices. “With a project having to wait at least two years before sales begin, the new law would just spur on the surge in property prices,” Mr Cheung said. He called for the government to reduce the time it takes to grant construction permits for housing projects.

At least 60 percent of the 8,000 unfinished flats in the pipeline in the first quarter have been sold (Photo: Manuel Cardoso)


5

May 21, 2013

Macau

Expo Bytes

G2E Asia rentable floor space 20 pct bigger this year

T

his year’s Global Gaming Expo Asia held at CotaiExpo in The Venetian Macao, has nearly 20 percent more net floor space than the 2012 event says one of the co-organisers. “We have approximately 7,000 square metres [75,347 sq. feet] of net floor space, compared to a little over 5,900 square metres last year,” explained Mike Johnson, event director and general manager, G2E Asia, on behalf of Reed Exhibitions. The conference part of the event starts today, while the trade show portion today is by special invitation only. Full access to the public part of the exhibition is from 10am tomorrow and the trade show ends at 5.30pm on Thursday. There will be a total of 139 exhibitors this year, including at least 27 showing their products at G2E Asia for the first-time. The firm is also expecting to welcome around 14 percent more visitors – up to 7,000 compared to the 6,161 recorded in 2012. New zones on the exhibition floor include a Security & Surveillance Pavilion. That reflects visitors’ interest in the latest security systems and technology to prevent cheating and protect revenue. There will also be an Arcade Gaming Pavilion, and an iGaming Pavilion. A number of exhibitors have told Business Daily that they are being asked to pay 10 percent to 15 percent more this year for the same amount of space – significantly above last year’s local 6.11 percent consumer price index inflation. “That scenario you’re talking about is applicable to certain customers on the floor, but not everyone,” said Mr Johnson, explaining a change in the pricing policy this year. “Stands that are located in premium locations along high traffic areas like in the front of the show or along major aisles – the rate for those locations is a little bit higher than in some areas that are towards the back,” he stated. M.G.

Aristocrat’s new take on classic games A

ristocrat Leisure Ltd – the leading supplier of slot machines to the Macau gaming industry based on its share of the casino floor – will be exhibiting two additions to its Legends series of games at Global Gaming Expo Asia 2013, which opens to the public from tomorrow. The Legends series is Aristocrat’s update – including upgraded graphics – of classic games already popular with Macau players. The latest editions are 50 Dragons DELUXE and Fortune King DELUXE. “2013 is about reaffirming our commitment to Asia and supporting our customers with dedicated and best-performing content specifically developed for this region,” said Aristocrat’s General Manager Asia, David Punter. The company is also launching Aristocrat On Demand, a downloadable

Inspired Gaming signs deal with ONEworks

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tool allowing casinos to manage slot content on a casino floor. “We will be demonstrating our first dual language games in a

downloadable format, with the region’s best performing game content available at the click of a button,” added Mr Punter.

nspired Gaming Group – a leading supplier of virtual sports betting products – has signed an agreement with ONEworks, a ‘one stop shop’ for services to online sports betting firms in Asia and Europe. Virtual sports is a term for a category of betting where there’s either a recording of live action or a computerised animation of sporting action but where the outcome is decided by a random number generator. Under the deal, Inspired’s large range of virtual sports including football, horse racing, greyhound racing, speedway, motor racing, tennis and cycling will be available to ONEworks’ sportsbook customers in the Asia Pacific region. Steve Rogers, managing director for Virtual Sports at Inspired, said: “We are delighted that a company such as ONEworks, known for seeking out for the best of breed content worldwide for its customers, has chosen Inspired Virtual Sports for its content portfolio.”


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May 21, 2013 April 19, 2013

Macau

Straight talker The man who once gave Harry S. Truman a lift and raised campaign funds for Ronald Reagan steps down as head of the American Gaming Association on June 30

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rank J. Fahrenkopf Jr is president and CEO of the American Gaming Association. The AGA is the premier trade body for casino operators and suppliers and also a co-organiser – with Reed Exhibitions – of Global Gaming Expo Asia 2013, which starts today. Mr Fahrenkopf has led the AGA since 1995, but steps down on June 30. He could fairly be described as a man of contradictions. As a boy he moved from Brooklyn, New York, to Reno, Nevada – then the divorce capital of the United States – because his father needed to end his marriage. Yet the junior Mr Fahrenkopf – himself a some time divorce lawyer – frets about the effects of divorce and the erosion of family life in the West, and has been happily married to his own wife for 50 years. As a student Young Republican, he once gave former Democrat president Harry S. Truman a lift from the airport when the retired statesman came to his campus to campaign on behalf of John F. Kennedy. Later, as Ronald Reagan’s chief campaign fund raiser – when chairman of the Republican National Committee from 1983 to 1989 – Mr Fahrenkopf was a Cold War warrior alongside the ‘Great Communicator’ “fighting communism around the world”, to use his own words. But just as it was a conservative Republican – Richard M. Nixon – who first reached out to Mao Zedong’s China in 1972 – and an implacable antiCommunist – Margaret Thatcher – who was pragmatic enough to negotiate a peaceful handover of Hong Kong from British rule, so Mr Fahrenkopf has been honest enough not to pretend to Macau and Chinese officials that there aren’t differences of opinion between West and East over the future direction of Macau’s gaming industry. On the eve of his final edition of Global Gaming Expo Asia, Business Daily spoke to Mr Fahrenkopf about his career, G2E Asia, and his life in politics.

Michael Grimes

michael.grimes@macaubusinessdaily.com

What was Ronald Reagan like to work with? He was a man who carried himself with tremendous dignity. It was obvious that this was a man who was comfortable in his own skin. He knew what he believed in, he didn’t need to make excuses for it. I’ve done 26 presidential debates in my capacity as president of the Commission on Presidential Debates. Other than Bill Clinton, and perhaps Obama, I’ve never seen anyone as relaxed in presenting themselves and being able to articulate clearly, as Reagan. Are you seen in the gaming industry now as a Republican or as bi-partisan? I can walk into any office on Capitol Hill – Republican or Democrat – and have no problem doing that. And I think that’s because of the fact for the last 25 years I’ve been the co-chairman of the Commission on Presidential Debates – which is not partisan. I also did a tremendous amount of work with a former chairman of the Democratic Party

in creating the democracy movement in the United States – the National Endowment for Democracy – and the work we did fighting communism around the world on a bi-partisan basis. So I do think that’s something I brought to the table. I sometimes get the impression that Macau wishes it had never invited in foreign operators with their long arm regulation, litigation and international media scrutiny. What’s your view? My first visit to Macau was in 2002, I think. I was invited to speak at an event, and there were many representatives of the Macau government there. My message was if they wanted to attract American [gaming] companies [to Macau], that the officials in Macau should go and meet and speak to the regulatory regimes in Nevada and New Jersey, which were the two oldest in our country. I explained that no American company – I couldn’t speak for the Australians – would want

to jeopardise their U.S. licence in those states where they do business, without making sure those states were confident Macau was going to put in place a regulatory system that was going to abide by strict laws in terms of who’s involved and making sure that money-laundering and such things don’t take place. And that’s

Shows tend to proliferate. And it’s not healthy, because it costs the exhibitors a lot of money

what they did. They did visit Nevada and New Jersey etc. One of the things our companies have to live with is strict regulatory control [out of the U.S.] the oversight that’s there all the time. Sometimes officials in Macau have felt their U.S. counterparts tried to lecture them. That may be the impression, but you’ve actually got competition here in the United States between the states. Some states think fellow states are lecturing them and trying to prove how tough they are. So that comes with the territory. But clearly, communication, sending representatives from Nevada, from [New] Jersey – or any other states – over to Macau, or having Macau officials go over there, and looking at best practice on both sides, that’s the way to improve the relationship. There’s a new trade body for gaming manufacturers here – the Macau Gaming Equipment Manufacturers


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May April21, 19,2013 2013

Macau Association. It’s talking about having its own trade show. What’s your response? You will remember that the first trade show that started in Macau was run by the Australian manufacturers. We entered in a transaction with them to get the show going. But what happens is that shows tend to proliferate. And it’s not healthy, because what it does is cost the exhibitors – whether it be American manufacturers or Australian manufacturers or ones from Macau – a lot of money to go to these shows. When we started with Global Gaming Expo in the United States, there were four shows in the U.S. alone. But it became clear that if you can get a show that is going to have the attention of the world – where people come and where it’s well run and manufacturers like the way it’s laid out and so forth – it’s a better way to go. But that doesn’t prevent the folks in Macau – if they should desire – from setting up a show. That’s certainly their right.

[The scale of G2E Asia] doesn’t prevent the folks in Macau – if they should desire – from setting up a show. That’s certainly their right

The chairman of the new association is Jay Chun. He is also chairman of LT Game, which is in dispute with SHFL entertainment Inc. The two companies had a public stand off at last year’s show. You talked then about your concerns that LT Game was trying to use G2E Asia to “leverage” its litigation. You also talked about getting the U.S. Consul involved. Does this have the makings of an international trade dispute? I’m not going to comment on that. Litigation is going on. Our concern has been that we want to put on a show. We don’t want individual fights to do anything to disrupt the show. We’ll see how the litigation goes and decisions will be made based on that. Are you concerned the decision of Alfastreet – a major manufacturer – not to attend this year could actually prompt others to leave the show? One of the things we know about G2E Asia, is we get a lot of last minute people who come. Right now the numbers are off the wall in a positive way. If someone decides not to come, that’s always their right. We’ve always had that situation. In the U.S. show, a very large manufacturer from England decided they didn’t want to go to G2E and they set up an operation in a separate hotel and they bussed people over. Everyone’s got a right to do business their own way and what they feel is in the best interests of their company. This year for the first time there’s been a letter of endorsement from President Obama in support of G2E Asia. The first time I saw that was when it was issued. I had no idea it was going to be.

Do you think its meant as a message to people in Macau that if they mess with G2E Asia they’re not just messing with private companies – they’re also involving themselves in U.S. trade policy? I wouldn’t read it that way. Do you think it’s an overstatement? I really do. The local regulator DICJ decided recently to create a contractual relationship with equipment suppliers in the Macau market. Some of the smaller manufacturers have complained that DICJ has ‘grandfathered’ the approvals on the big boys while the smaller companies were made to fill in 50 pages of forms – even though some of them are already licensed as manufacturers in Singapore, one of the toughest regulatory regimes in the world. Can the AGA help the smaller firms in a situation like that? When we talk about the show being for the industry and by the industry, we have not only the large exhibitors and manufacturers, but a lot of small ones. Any time we can do anything to assist them, we will. The problem you run into – and one of the reasons we have been trying to get regulators not only in the U.S. but around the world to do this – is to do away with the proliferation of different form filling that occurs even though the same information is generated. We’re working with the regulatory control agencies to see if we can come up with ‘best practice’ that everyone can use and that will make the paperwork and some of the cumbersome bureaucracy that is created – work better for our members and be less expensive for them. I was told by the president and CEO of one of the big manufacturing companies that he had to go through a licensing process something like 250 times. It’s mind boggling. One CEO said to me recently that he thought trade associations were basically talking shops that suck fees out of their members. Every company has to make its own decision as to whether or not it wants to join any sort of an organisation. How did you get involved in the American Gaming Association in 1995? I was approached by Steve Wynn, Chuck Mathewson who at that time was the president and CEO of IGT and a man by the name of Raymond Avansino who was the president and CEO of Hilton [Hotels]. They approached me because there was on Capitol Hill an idea from the Clinton administration to impose a federal tax of four percent of gross receipts on all gaming revenues in the U.S. That didn’t last long because about 16 governors contacted the president and said ‘Look we depend on our gaming revenue – whether it’s from casinos or racetracks or lotteries – to support our own budgets.’ So President Clinton immediately dropped it. But it made things clear to people in our industry that they needed an association to represent them in Washington [D.C.]. I was practising with the largest law firm in Washington that did a lot of international work. I agreed to represent them [the AGA] for one year, to get them up and going. That one year has stretched somewhat, and when I step down in June it will be 18 years. What do you see as your main achievement at AGA? It’s what we’ve done in the area of responsible gaming. We now know from studies throughout

the world, that about one percent of the population cannot gamble responsibly. We also know that for the majority of the one percent, gaming’s not the only problem. They suffer from what’s called ‘comorbidity’, meaning they also have problems with either alcohol or drugs and may have some mental problems. We created the National Center for Responsible Gaming, which is the world’s largest funder of independent, peer-reviewed research into people that can’t gamble responsibly. It’s changed the whole dynamic [of the industry] and helped to create

the corporate responsibility that we felt was so important to deal with people who can’t gamble responsibly Many people have said you will be a hard act to follow. One of the greatest things [former French president] Charles de Gaulle ever said is that ‘The graveyards of France are full of indispensible men’. And I think that’s right. So we started well over two years ago on working on a succession plan and I am just so delighted it has gone exactly as we hoped it would go, and we’ll have a seamless transition with Geoff Freeman taking over effective July 1.


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May 21, 2013 April 19, 2013

Macau

China’s hot money triangle goes through Macau casinos Gaming industry linked to money laundering, illegal capital outflows James Pomfret and Matthew Miller

US$38 billion in annual gaming revenues last year, fuelled by cashrich Chinese gamblers. “It operates like a bank. You can take money in and out at any time,” Mr Li, the remittance agent said. “It’s safe.” In a high-roller VIP suite at a major casino in Macau where baccarat tables were placed between two giant aquariums filled with bright reef fish, people queued at six counters, some holding slips of paper with an account number and a monetary amount written on them. One man, in a grey hoodie, holding such a slip, handed over his passport and was given a stack of eight, oblong HK$500,000 gambling chips. He didn’t have his own account, he said, but had arranged the transfer through a remittance agent. “In peak periods you can always see some mainland Chinese bringing maybe 1 or 2 million yuan in cash … taking the lift to the 20th floor and then taking Hong Kong dollars back down,” said a Macau-based academic specialising in VIP room operations, who asked not to be named given the fear of reprisals by powerful figures in the highly lucrative industry. “This only happens when they feel comfortable with the environment. That’s something that is quite common.” Zhuhai agents regularly transfer millions of yuan directly into VIP room gambling accounts

I

n a Gongbei underground mall, a row of 30 small shops with identical golden plaques does a brisk, though shadowy trade with mainland Chinese visitors, many of them bound for Macau. “Good rates. Better than the banks,” shout salespeople jostling to usher clients into shops where thick wads of Chinese 100 yuan (130 patacas) and HK$1,000 (US$130) bank notes change hands and shuffle noisily through electronic cashcounting machines. Licensed as liquor and dry goods stores with stacked shelves of rice wine and cigarettes, many conduct their real business in back rooms – as underground bankers and remittance agents. “It’s very simple,” said one agent surnamed Choi, dressed in sandals and ripped jeans, as he served tea in a back office where larger transactions are typically carried out. “You give me renminbi here. Then we deliver Hong Kong dollars to you in Macau. We can move tens of millions each day,” he said, glancing up at six security camera images of his shop front flickering on a flatscreen television. In affluent Guangdong province, cities like Zhuhai, Shenzhen, Guangzhou and Dongguan are major underground conduits for Chinese hot money.

Underground triangle Collectively, the cities form part of a giant, unregulated underground banking triangle between China, Macau and Hong Kong. In Zhuhai alone, over 1 billion

yuan is transferred daily through underground networks, according to a straw poll of six agents who spoke to Reuters – part of a tight-knit group of 100 operating in the border area. “Our business has gone up some 30 percent in the past three years,” said one who gave his name as Li. Much of the unofficial flows of capital facilitate trade and investment in the key economic region, businessmen say. Illegal cross border bank remittances can be used to wire extra capital into China to buy raw materials or cover wages during peak periods. “It just takes 15 minutes, but official approval can take two weeks,” said an electronics factory boss in Dongguan who often uses underground banks. He didn’t want to be named to avoid disrupting business ties with such agents. Unlike other shadow banking systems in eastern coastal regions like Zhejiang, Jiangsu and Wenzhou that tend to collect deposits and extend high interest loans to small businesses starved of credit, Guangdong’s underground banks tend to play the greatest role in black money transfers abroad, says China’s central bank. A People’s Bank of China (PBOC) anti-money laundering report from 2007 said nearly one third of China’s illegal private banks originated in Guangdong. In 2009, police shut down over 40 underground banks in Fujian, Jiangxi and Guangdong provinces, according to a report in the official People’s Daily, involving 100 billion yuan. “Underground banks serve as

an important channel for money laundering and illegal foreign exchange desks,” it wrote. In the most recent public statistics available, 970 money laundering cases were investigated in China in 2009, involving 301 billion yuan. Guangdong was cited as a major blackspot.

Capital controls The Chinese government controls capital inflows, bars underground banking and unauthorised remittances, and limits individuals’ capital outflows to 20,000 yuan a day. Under Macau banking and gaming laws, alternative remittance systems are illegal and suspicious transactions must be red flagged and reported to the Financial Intelligence Office. “Underground alternative remittance system is also an area of our concern,” the office told Business Daily in an e-mail reply. To tackle the issue, it regularly organises seminars and training for the private sector and financial institutions and shares information with the Monetary Authority of Macau and the Gaming Inspection and Coordination Bureau. Business Daily also asked for a comment from these two bodies but received no reply before press time. Yet such capital flows flourish largely unchecked. Writing a six-digit VIP account number on a piece of paper, a remittance agent in Zhuhai said clients could use this to withdraw funds in chips or cash from most casinos in Macau, which raked in

KEY POINTS Underground banking network remits billions of yuan Unofficial networks worsen money laundering risks Junkets act as pseudo banks for capital outflows Authorities soft on enforcement: intermediaries

Typical VIP rooms in Macau run by junkets – middle men who bring in Chinese punters and extend credit – maintain cash reserves or working capital of at least 100 million yuan, the academic said, with cash transfers tending to take place in hotel rooms or outside, away from surveillance cameras. Mr Choi said he and other Zhuhai agents regularly transfer millions of yuan directly into VIP room gambling accounts in Macau casinos. Bank wire transfers can also be arranged, though larger amounts would need to be staggered over a week, with a maximum of 500,000 yuan daily to reduce the risk of detection. “There must be a lot of money laundering,” said Mr Choi. “But we’re not criminals … We’re just making life more convenient for people. We just move the cash.” Reuters/V.Q.


99

May April21, 19,2013 2013

Greater China

Small-cap bubble seen bursting: UBS Tighter monetary policy may derail rally, analyst says Luxury car prices fall in April Prices of imported cars in China fell the most in five months, adding to signs that demand for luxury products is slowing because of a government campaign to rein in lavish spending by public servants. Average prices of imported cars in April fell 3.4 percent from a year earlier, according to Cheng Xiaodong, head of autoprice monitoring at the National Development and Reform Commission. That compares with the 0.2 percent increase for locally made passenger vehicles. “Prices of imported cars may continue to slide and demand will mainly come from private buyers in the future,” Mr Cheng said.

EU move on solar ‘grave mistake’: Roesler German Economy Minister Philipp Roesler said the European Commission made a “grave mistake” by agreeing to impose punitive import duties on solar panels from China and urged the Commission to work to prevent the eruption of a trade conflict. “It’s a grave mistake,” Mr Roesler told Welt am Sonntag newspaper on Sunday. China already warned the duties on solar panels would harm bilateral trade. “The Commission has to seek a resolution with negotiations and dialogue instead of threats,” he said.

Bird flu costs industry US$65 bln The H7N9 bird ‘flu outbreak has cost the country’s poultry industry more than 400 billion yuan (US$65 billion) as consumers shun chicken, government officials were quoted as saying by state media. The sector has been losing an average of one billion yuan a day since the end of March, the Beijing Times said, citing Li Xirong, head of the National Animal Husbandry Service. Poultry sales have tumbled and prices plunged, Mr Li said, causing major financial problems and job losses as a result. H7N9 has infected 130 people in the mainland, killing 35, since it was found in humans for the first time, according to latest official data.

Home-price gains signal challenge China’s new-home prices rose last month in 68 of 70 cities tracked by the government, indicating Premier Li Keqiang will need to maintain efforts to cool the property market even as economic growth slows. “They have to make a choice between property prices and economic growth,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. Expanding a campaign against housing speculation could choke off realestate development that is helping counter a slowdown in manufacturing investment and supporting demand for steel, cement and household goods.

C

hen Li, the UBS AG strategist who predicted the tumble in China’s smallest shares two years ago, says the companies are poised to retreat again after valuations rose to the biggest premium over larger stocks since 2010. The ChiNext index of Shenzhenlisted companies with a median market value of US$765 million climbed 43 percent this year through last week, while the CSI 300 Index, which has a median capitalisation of US$3.5 billion, rose 2.7 percent. The smaller- company gauge traded for 4.6 times net assets versus 1.7 for the CSI index, the widest gap since June 2010, data compiled by Bloomberg show. Small-cap stocks have surged on speculation President Xi Jinping’s plan to boost the consumer, technology and alternative energy industries will benefit companies from Huayi Brothers Media Corp to Leshi Internet Information & Technology Co. The rally may get derailed by tighter monetary policy, which helped spur the last slump, according to Mr Chen. “The bubble may burst” within two months, Mr Chen said in a phone interview. The Shanghai-based strategist predicted in January 2011 that small-cap stocks would drop as much as 20 percent. The ChiNext gauge fell 21 percent in nine months. Investors will rotate out of smaller companies and into larger stocks as liquidity tightens, he said. The ChiNext was created in 2009 as an alternative for smaller companies seeking to raise funds and has fewer listing requirements than the two main boards in Shanghai and Shenzhen. The index rebounded 21 percent in the first three months of the year, a record quarterly gain, as investors

ChiNext index climbed 43 percent this year

speculated its companies will benefit the most from a December pledge by Mr Xi’s government to focus the economy more on domestic demand and reduce its reliance on investment spending. The gauge fell a combined 37 percent in 2011 and 2012.

Earnings outlook China International Fund Management’s Du Meng is bullish on the technology, media and alternative energy companies that dominate the nation’s small-cap stock indexes, saying they will benefit most from government efforts to boost consumption and to invest in “emerging” industries. Mr Du, whose China International Emerging Momentum Fund has climbed 41 percent this year for the best performance among 785 China funds, said in an e-mail that the companies still have higher growth potential than industries that rely on exports and fixed-asset investment. The government is targeting 8 percent of gross domestic product by 2015 for so-called strategic emerging

industries including information technology such as cloud computing, Steven Sun, a Hong Kong-based China equity strategist at HSBC Holdings Plc, wrote in a June 2012 report. Profits for all small-cap companies rose an average of 2.6 percent in the first three months from a year earlier, compared with a 9.1 percent decline last year, according to Shenyin & Wanguo Securities Co. The larger companies in the CSI 300 reported average profit growth of 9.8 percent in the first quarter, up from a 3.2 percent increase last year, according to data compiled by Bloomberg. “Earnings growth for small-caps are still relatively low and don’t match current valuations,” Zhao Longlong and Kong Lingfei, analysts at Shenyin & Wanguo, wrote in a May 6 report. “Risks exceed opportunities for some growth stocks that have had sizable gains.” Smaller companies will probably report earnings growth of 25 percent for this year, compared with analysts’ consensus estimates of 50 percent, UBS’ Mr Chen said. Bloomberg News

Taiwan’s banks eye higher Asia share Lenders flee hit by worst margins domestic market

T

aiwanese lenders led by Bank of Taiwan are taking their highest share of syndicated loans in Asia since 2010 as they expand outside the island’s saturated market to escape the worst margins in Asia-Pacific. Lenders in the region’s seventhbiggest economy have helped arrange 10.1 percent of syndicated deals in Asia excluding Japan since December 31, compared with 8.1 percent in all of 2012 and 8.5 percent in 2011, according to data compiled by Bloomberg. Almost half of the lenders that participated in Qantas Airways Ltd’s A$780 million (US$762 million) refinancing and CT Corp’s US$750 million loan to buy Carrefour SA were from Taiwan, the data show. Interest margins more than 90 basis points below the average in Asia Pacific are prompting Taiwan’s lenders to seek profits abroad. The

island’s banks are getting margins of 156 basis points over the London interbank offered rate on credit facilities signed this year, versus 248 for lenders elsewhere, the data show. “Taiwanese banks are flush with liquidity,” said Alan Lee, chief executive of corporate banking at Taipei-based Cathay United Bank Co. “They’re looking for new business opportunities in other markets when high-grade borrowers at home are still paying low pricing due to their strong bargaining power.” Bank of Taiwan has been the most active lender from the island so far this year, helping to arrange 31 deals totalling US$1.4 billion in the Asia-Pacific region outside Japan, Bloomberg data show. Taishin Financial Holding Co. was the second-biggest arranger, with Land Bank of Taiwan third. Taiwan relaxed curbs on banks’ investments and operations in China

in September 2011, allowing them to lend to mainland individuals and institutions. That’s been a significant driver of overseas deals, said Mr Lee at Cathay United, one of 11 Taiwanese banks with branches on the mainland. “Taiwanese banks will definitely continue looking for overseas deals to improve their return on equity and return on assets,” said Amy Tsao, the head of investment banking for Taiwan at Nomura Holdings Inc. They will probably become more aggressive in underwriting small-to-medium-size loans in the international market of up to US$200 million, she said. International banks still have an important role to play in arranging syndicated loans for Taiwanese lenders, added Ms Tsao, because of their unfamiliarity with overseas clients. Bloomberg News


10

May 21, 2013

Greater China

Danone buys stake in Mengniu French food group takes second chance in mainland market

D

anone, owner of Activia yogurt and Evian water, will spend about 325 million euros (US$417 million) to form a joint venture and invest in China’s biggest dairy producer to expand its brands in the most populous nation. Danone will have an indirect interest of about 4 percent in China Mengniu Dairy Co. initially, with the aim of increasing that in the future, it said in a statement yesterday. It will also set up a venture with Mengniu for yogurt products in China. Mengniu shares surged the most in four years. The partnership will help Danone boost sales in China’s yogurt market that is estimated to grow 57 percent to 71.6 billion yuan (US$11.7 billion) by 2015, according to Euromonitor International. Mengniu gains the foreign investment as food scandals including rat, fox and mink meat sold as mutton, tainted liquor and excessive antibiotics in chicken have fuelled demand for safe products in the world’s second-largest economy. “The deal will help strengthen the research and development and capability of Mengniu’s yogurt business, and potentially help them increase market share in China,” said Charlie Chen, a Hong Kong-based analyst at BNP Paribas Securities Asia. “Through its ventures with Arla and Danone, Mengniu is also building a better brand image among consumers.”

Mengniu gained as much as 11 percent in Hong Kong trading yesterday, before closing at HK$26.90, their highest since December 2011. The company formed a strategic partnership with Danish dairy firm Arla Foods in 2012 to improve quality inspection techniques and explore further co-operation.

employees in the country, according to its official website. The mainland market formed about 6 percent of the group’s consolidated sales in 2012, its fourth-largest market after Russia, France and the U.S., according to the company’s 2012 annual report. Prominent Achiever Ltd, a venture 49 percent owned by Danone,

will acquire an 8.3 percent stake from Mengniu’s biggest shareholder COFCO, according to a filing to Hong Kong’s stock exchange yesterday. COFCO, the Chinese state-backed agricultural and food industry supplier, owns 51 percent of Prominent Achiever. Bloomberg News

Market share The local partnership will increase the reach of Danone brands in China, the Paris-based company’s chief executive Franck Riboud said in a statement yesterday. It will own 20 percent of the yogurt venture with the rest owned by Mengniu, according to the statement. Mengniu had a 16.8 percent market share in the yogurt market in 2012 with Danone owning a 1.6 percent share, according to Euromonitor. Danone chief financial officer Pierre-Andre Terisse said last month that its first-quarter baby-nutrition revenue jumped 17 percent led by a need for “safety” in China and that exporting more from Europe to China isn’t sustainable. Danone, which sells Activia yogurt under the brand Bio and Dumex infant formula in China, operates 22 factories and employs about 10,000

Danone invests in China as consumers demand food safety

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11

May 21, 2013

Asia

Japan upgrades economic outlook But Economy Minister signals concern at yen slide

T

he Japanese government upgraded its assessment of the economy yesterday, as emerging signs of an upturn in exports and factory output added to growing evidence that Prime Minister Shinzo Abe’s aggressive polices are beginning to reignite growth. The world’s third-biggest economy is gradually recovering, according to the government’s monthly report released by the Cabinet Office. The upgrade was the first in two months, and an improvement from April when it said the economy was showing signs of recovery but still had some weak spots. The government’s latest take on the economy came ahead of the Bank of Japan’s two-day meeting ending tomorrow, which is expected to leave policy unchanged after announcing a sweeping monetary expansion campaign in early April to vanquish 15 years of entrenched deflation. A Reuters Tankan survey showed manufacturers’ sentiment rose for a sixth straight month in May, turning positive for the first time in a year. According to the survey, released earlier yesterday, increasing optimism among manufacturers was largely driven by export sectors, including electric and precision machinery, that have benefited from a sharp weakening in the yen. “Manufacturers had been lagging the services sector, but a weak yen and improvements in the U.S. economy mean that manufacturers’ sentiment is starting to catch up,” said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley

Japanese economy gradually recovering

Securities. “This is in line with the bullish scenario that the BOJ has laid out. There’s no need to change policy.”

Yen slide Since Mr Abe unveiled his strategy in November to end two decades of economic stagnation the yen has slumped to 4-1/2 year lows versus the dollar and share prices have rocketed by 70 percent.

Indonesia budget assumes 45 pct hike in petrol prices

I

ndonesia’s government is assuming there will be a 45 percent rise in the price of subsidised petrol, a move widely seen as essential to relieve mounting pressure on the state finances. The government has been agonising for months over how and when to hike prices of heavily subsidised fuel, which consume an increasingly large portion of the annual state budget and add to the current account deficit. The 2013 budget proposals to parliament assume the price of low

octane petrol will rise 2,000 rupiah (21 U.S. cents) to 6,500 a litre. Diesel would be 1,000 rupiah higher at 5,500 a litre. Bambang Brodjonegoro, head of the Finance Ministry’s fiscal office, confirmed the amounts by which the government intends to raise those prices. The increases “will come into effect after the discussion for state budget revision is completed,” he said. President Susilo Bambang Yudhoyono, who has repeatedly delayed a decision

Thai economy contracts in Q1 Thailand’s economy contracted more than expected in January-March from the previous three months, which economists said raises the chances that this month will bring a rate cut the government wants. The National Economic and

“We are implementing fiscal and monetary policies under Abe’s administration, and this has set the stage for a V-shaped recovery,” said Economy Minister Akira Amari said. “Normally exports lead growth, but this time consumer spending is playing the leading role,” Mr Amari told a news conference after the government released its latest assessment of the economy. But he said a further slide in the

on the issue, recently said any price increases would be dependent on parliament approving financial measures to protect the poor from the impact of more expensive fuel. The issue will be one of the biggest challenges facing the new finance ministry when he is eventually appointed. Mr Yudhoyono abruptly shifted the previous minister Agus Martowardojo to head the central bank but has yet to name a successor. Even though subsidised fuel prices are eating up budget funds that are desperately needed elsewhere in the economy, Mr Yudhoyono has appeared to be concerned over the inflationary impact ahead of general and presidential elections next year. Earlier this month, he

Social Development Board (NESDB) yesterday also trimmed its forecast for full-year economic expansion to 4.2-5.2 percent from 4.5-5.5 percent range. The agency also cut its projection of 2013 export growth to 7.6 percent from 11.0 percent. In the first quarter, gross domestic product shrank a seasonally adjusted 2.2 percent from October-December. Thailand significantly revised down quarterly growth for the last three months of 2012, to 2.8 percent from 3.6 percent. The quarterly contraction in

yen would have negative effects after the currency’s 21 percent drop in the past six months, and signalled concern at the prospect of higher bond yields. Mr Amari declined to comment on an appropriate exchange rate for the yen or say if it has declined so much that its negative effects need to be contained. “It’s being said excessive yen gains have been corrected a lot,” Mr Amari said. Reuters

Subsidised fuel prices have been eating up budget funds

essentially passed the problem to parliament saying he would not agree to fuel price increases unless MPs approved measures to protect the poor. That issue is likely to be the centre of parliamentary debate in the current session. The proposed budget for

January-March is the first since the last quarter of 2011, when severe flooding caused a 10.5 percent shrinkage. On an annual basis, GDP expanded 5.3 percent in the first quarter. Revised annual growth in 2012’s final quarter was 19.1 percent, which reflects the low comparative base hit due to the late 2011 flooding. The NESDB said growth in 2013 will be supported by private and government investment, but added that the delay in global economic and export price recovery, the baht’s appreciation,

2014 also sees GDP growth rising to 6.4-6.9 percent, above the Finance Ministry’s latest forecast for this year of 6.2 percent. It put the 2014 budget deficit at 1.7-2.3 percent of gross domestic product. Reuters

a high base effect and fading out of government stimulation “pose downside risk to the economic outlook”. This year, Thai authorities and industry have been concerned about strength of the baht, emerging Asia’s strongest currency in 2013. Enrico Tanuwidjaja, an Asia economist at the Royal Bank of Scotland in Singapore, said that with the latest Thai data, “It seems like they are going to go ahead with the cut and this will induce the baht to trade with a weaker bias.” Reuters


12

May 21, 2013

Markets Hang Seng Index NAME

PRICE

DAY %

VOLUME

36.45

3.846154

36653701

CHINA UNICOM HON

ALUMINUM CORP-H

3.17

1.277955

18500083

CITIC PACIFIC

BANK OF CHINA-H

3.82

1.595745

299515456

BANK OF COMMUN-H

6.22

0.974026

23909496

BANK EAST ASIA

31.35

0.9661836

1549103

BELLE INTERNATIO

12.68

-2.160494

21309347

BOC HONG KONG HO

27.85

1.272727

7310545

14.6

0.9681881

2321043

116.8

0.8635579

4219523

CHINA COAL ENE-H

5.4

3.448276

45042355

CHINA CONST BA-H

6.55

1.550388

207722595

CHINA LIFE INS-H

21.9

2.576112

40963549

CHINA MERCHANT

25.8

2.380952

3523099

86.35

0.7584597

23.5

2.844639

CHINA PETROLEU-H

8.61

CHINA RES ENTERP

24.15

CHINA RES LAND

AIA GROUP LTD

CATHAY PAC AIR CHEUNG KONG

NAME

PRICE

DAY %

VOLUME

11.58

1.223776

20915582

POWER ASSETS HOL

10.2

3.658537

16782525

SANDS CHINA LTD

CLP HLDGS LTD

69.05

0.8029197

2402554

CNOOC LTD

14.48

1.685393

42992785

10.8

3.646833

10.98

0.3656307

HANG LUNG PROPER

30.15

HANG SENG BK

132.2

HENDERSON LAND D

DAY %

79.95

1.977041

VOLUME 2528307

41

0.9852217

19446364

SINO LAND CO

12.58

2.11039

7232852

111.6

1.639344

4127749

6505190

SWIRE PACIFIC-A

101.7

1.395813

1068122

7681615

TENCENT HOLDINGS

309.4

6.25

12488601

0.8361204

3920680

TINGYI HLDG CO

20.05

-2.43309

11118900

1.536098

2041220

WANT WANT CHINA

12.1

0.4983389

12046494

57.35

2.502234

3189690

WHARF HLDG

75.55

0.7333333

4179409

HENGAN INTL

88.95

1.715266

3434700

HONG KG CHINA GS

23.85

2.360515

9475129

COSCO PAC LTD ESPRIT HLDGS

HONG KONG EXCHNG

134.5

2.907422

6129706

90.25

1.632883

26357349

11288411

HUTCHISON WHAMPO

86.95

1.045904

5978740

16937604

IND & COMM BK-H

5.64

1.438849

257538933

0.9378664

76161023

LI & FUNG LTD

11.34

1.978417

41559813

-3.976143

11849957

32.2

1.098901

23.65

3.72807

10858000

NEW WORLD DEV

13.66

CHINA RES POWER

22.05

-3.289474

13870889

PETROCHINA CO-H

9.93

CHINA SHENHUA-H

27.3

3.213611

28334467

PING AN INSURA-H

61.1

CHINA MOBILE

PRICE

SUN HUNG KAI PRO

HSBC HLDGS PLC

CHINA OVERSEAS

NAME

MTR CORP

MOVERS

46

4

0 23510

INDEX 23493.03 HIGH

23501.84

3284375

LOW

22978.85

1.788376

8348445

52W (H) 23944.74

1.223242

69938207

2.003339

10962240

PRICE

DAY %

VOLUME

28.35

2.162162

6588160

8.61

0.9378664

(L) 18056.4

22970

15-May

20-May

Hang Seng China Enterprise Index NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.77

0.5333333

121809601

AIR CHINA LTD-H

6.99

5.112782

17045941

CHINA PETROLEU-H

ALUMINUM CORP-H

3.17

1.277955

18500083

CHINA RAIL CN-H

8.1

ANHUI CONCH-H

27.3

1.111111

10036916

CHINA RAIL GR-H

BANK OF CHINA-H

3.82

1.595745

299515456

CHINA SHENHUA-H

BANK OF COMMUN-H

6.22

0.974026

23909496

CHINA TELECOM-H

34

-1.162791

6293993

DONGFENG MOTOR-H

4.52

1.573034

36633704

GUANGZHOU AUTO-H

CHINA COAL ENE-H

5.4

3.448276

45042355

CHINA COM CONS-H

7.72

1.846966

CHINA CONST BA-H

6.55

CHINA COSCO HO-H

3.42

CHINA LIFE INS-H

PRICE

DAY %

VOLUME

YANZHOU COAL-H

8.19

4.066074

43151470

76161023

ZIJIN MINING-H

2.17

-1.809955

62734077

0.1236094

11025800

ZOOMLION HEAVY-H

8.16

0.990099

8650668

4.18

1.210654

17567700

ZTE CORP-H

13.34

-2.0558

3789398

27.3

3.213611

28334467

4.18

1.456311

37168791

12.62

-0.3159558

13335710

7.5

-0.530504

10514696

HUANENG POWER-H

9.22

-4.356846

33620000

13963989

IND & COMM BK-H

5.64

1.438849

257538933

1.550388

207722595

JIANGXI COPPER-H

15.46

-0.5148005

13006779

2.702703

7364503

PETROCHINA CO-H

9.93

1.223242

69938207

21.9

2.576112

40963549

PICC PROPERTY &

10.2

1.190476

9510903

8.1

1.376721

27641020

PING AN INSURA-H

61.1

2.003339

10962240

CHINA MERCH BK-H

16.78

0.7202881

17268103

SHANDONG WEIG-H

7.99

3.766234

8087591

CHINA MINSHENG-H

10.18

1.596806

40161420

SINOPHARM-H

CHINA NATL BDG-H

9.26

1.870187

38156600

TSINGTAO BREW-H

16.72

2.45098

5252680

WEICHAI POWER-H

BYD CO LTD-H CHINA CITIC BK-H

CHINA LONGYUAN-H

CHINA OILFIELD-H

NAME CHINA PACIFIC-H

22.5

-3.640257

7491867

55.15

5.854127

1896739

29.55

2.072539

NAME

MOVERS

34

6

0 11245

INDEX 11186.54 HIGH

11241.08

LOW

10961.63

52W (H) 12354.22 10960

(L) 8987.76 15-May

1787729

20-May

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.76

0.3636364

112160845

CHONGQING CHAN-A

10.22

-1.256039

47781819

PING AN INSURA-A

40.86

1.768369

32404166

AIR CHINA LTD-A

5.53

0.1811594

8095552

CHONGQING WATE-A

6.52

-0.122549

8411986

POLY REAL ESTA-A

12.25

-1.050081

85481733

ALUMINUM CORP-A

4.17

0.7246377

20249305

CITIC SECURITI-A

12.94

1.172791

136229706

QINGDAO HAIER-A

13.18

1.697531

34142525

ANHUI CONCH-A

17.62

-0.4519774

25472364

CSR CORP LTD -A

4.32

1.408451

48402439

QINGHAI SALT-A

23.46

0.08532423

8289366

BANK OF BEIJIN-A

9.17

1.325967

53053907

DAQIN RAILWAY -A

7.18

0.2793296

39361884

SAIC MOTOR-A

15.74

1.943005

59261926

BANK OF CHINA-A

2.96

1.023891

62667031

DATANG INTL PO-A

4.92

-1.006036

14472448

SANY HEAVY INDUS

9.69

2.21519

42636081

BANK OF COMMUN-A

4.78

1.057082

75891239

EVERBRIG SEC -A

13.95

3.871929

44238283

SHANG PHARM -A

12.1

-1.865369

27003497

10.63

0.6628788

26512356

GD MIDEA HOLDI-A

14.58

-1.35318

17003605

SHANG PUDONG-A

10.41

1.660156

156851179

BAOSHAN IRON & S

4.97

0.2016129

24371603

GD POWER DEVEL-A

2.95

-0.3378378

66553395

3.92

0

6285541

BEIJING TONGRE-A

23.67

-3.308824

17308452

GEMDALE CORP-A

7.6

-1.426719

112893044

SHANXI LU'AN -A

16.89

-1.112412

31450562

BYD CO LTD -A

36.14

-0.7142857

19293140

GF SECURITIES-A

13.79

0.5835157

37354896

SHANXI XISHAN-A

10.86

-0.7312614

22065242

CHINA AVIC AVI-A

27.73

5.037879

13896143

GREE ELECTRIC

27.54

6.373117

38659081

SHENZEN OVERSE-A

6.5

-0.6116208

87990576

CHINA CITIC BK-A

4.48

1.128668

36556301

GUANGHUI ENERG-A

19.47

1.511992

21233910

SUNING COMMERC-A

6.15

1.151316

66148272

CHINA CNR CORP-A

4.51

0.6696429

40625640

HAINAN AIRLINE-A

4.85

0.2066116

21329700

TASLY PHARMAC-A

75.92

-5.525137

8735677

CHINA COAL ENE-A

6.86

0

11211640

HAITONG SECURI-A

11.53

1.407212

155653470

TSINGTAO BREW-A

38.66

1.897733

2636678

CHINA CONST BA-A

4.9

0

22422533

HANGZHOU HIKVI-A

39.11

0.07676561

10276327

WEICHAI POWER-A

23.64

4.278783

13917397

CHINA COSCO HO-A

3.36

0.9009009

11670694

HENAN SHUAN-A

39

-2.743142

7358901

WULIANGYE YIBIN

23.48

0.3418803

24283298

CHINA EAST AIR-A

3.06

0.3278689

17654136

HONG YUAN SEC-A

24.28

3.982869

38397183

YANTAI WANHUA-A

18.67

1.082837

18849445

CHINA EVERBRIG-A

3.2

0.6289308

155756039

HUATAI SECURIT-A

10

0.5025126

41928379

YANZHOU COAL-A

14.88

-1.587302

9511388

CHINA INTL MAR-A

12.61

0.7188498

9328929

HUAXIA BANK CO

10.96

0.9208103

52953796

YUNNAN BAIYAO-A

85.85

-2.99435

2874880

CHINA LIFE INS-A

16.83

0.2979738

20628752

IND & COMM BK-A

4.19

0.7211538

90944884

ZHONGJIN GOLD

12.12

2.020202

37952203

CHINA MERCH BK-A

13.86

0

124578797

INDUSTRIAL BAN-A

18.57

3.052164

120764674

ZIJIN MINING-A

CHINA MERCHANT-A

13.04

0.4622496

40256342

INDUSTRIAL-A

11.83

0.5952381

31313607

ZOOMLION HEAVY-A

CHINA MERCHANT-A

28.28

-2.583534

19490013

INNER MONG BAO-A

28.99

1.755002

37023180

ZTE CORP-A

CHINA MINSHENG-A

10.72

2.290076

224245835

INNER MONG YIL-A

30.82

2.767589

16716013

CHINA NATIONAL-A

NAME

BANK OF NINGBO-A

NAME

11.24

1.079137

46313085

INNER MONGOLIA-A

4.89

0.8247423

47587311

CHINA OILFIELD-A

16.4

0.06101281

8008683

JIANGSU HENGRU-A

30.93

-4.713494

25323959

CHINA PACIFIC-A

19.32

0.5726184

17941375

JIANGSU YANGHE-A

63.42

2.356359

5900741

21.3

0.2352941

11178223

10.6

0.8563273

8978784

CHINA PETROLEU-A

6.91

1.917404

40683641

JIANGXI COPPER-A

CHINA RAILWAY-A

5.31

-0.3752345

27827177

JINDUICHENG -A

CHINA RAILWAY-A

2.91

0

38666629

KANGMEI PHARMA-A

16.67

-1.941176

39251083

CHINA SHENHUA-A

21.02

-0.6146572

15251213

KWEICHOW MOUTA-A

195

-0.464499

3094406

59982923

LUZHOU LAOJIAO-A

26.3

0.3816794

8739480

2.06

0

48710961

CHINA SHIPBUIL-A

4.52

0

CHINA SOUTHERN-A

3.48

0.5780347

26917848

METALLURGICAL-A

CHINA STATE -A

3.83

-1.28866

172583658

NARI TECHNOLOG-A

23.51

6.092058

24706304

3.74

0.8086253

99051956

NINGBO PORT CO-A

2.47

0.4065041

14771849

CHINA VANKE CO-A

11.93

-1.891447

126290487

PETROCHINA CO-A

8.63

0.4656577

22194626

CHINA YANGTZE-A

7.78

2.774108

38468322

PING AN BANK-A

20.98

2.893575

87697458

PRICE DAY %

Volume

NAME

CHINA UNITED-A

NAME

SHANGHAI ELECT-A

MOVERS 196

3.1

0.9771987

77558564

7.47

0.6738544

50276976

13.24

-0.6751688

30469281

85

19 2630

INDEX 2609.607 HIGH

2626.12

LOW

2488.63

52W (H) 2791.303 (L) 2102.135

2480

16-May

20-May

FTSE Taiwan 50 Index NAME ACER INC ADVANCED SEMICON ASIA CEMENT CORP

PRICE DAY %

Volume

0.407332

10857753

FORMOSA PLASTIC

73.3 -0.4076087

4704163

TAIWAN MOBILE CO

25.9 -0.3846154

13440563

FOXCONN TECHNOLO

80.4 -0.1242236

3156656

TPK HOLDING CO L

597

0.3361345

3664689

37.75 -0.3957784

1804133

FUBON FINANCIAL

114

0.4405286

14523054

24.65

42.85

0.2339181

12880113

TSMC UNI-PRESIDENT

ASUSTEK COMPUTER

348

-1.416431

1685836

HON HAI PRECISIO

77.1 -0.6443299

48227028

AU OPTRONICS COR

13.5

0

39705345

HOTAI MOTOR CO

307 -0.3246753

209856

CATCHER TECH

162 -0.6134969

11878736

HTC CORP

292

2.45614

9408872

CATHAY FINANCIAL

41.9

3.20197

34919650

HUA NAN FINANCIA

17.5

0

5295526

CHANG HWA BANK

17.4

-0.286533

4703468

LARGAN PRECISION

945 -0.4214963

761612

93 -0.4282655

8313236

LITE-ON TECHNOLO

49.1 -0.6072874

7220496

CHENG SHIN RUBBE CHIMEI INNOLUX C CHINA DEVELOPMEN CHINA STEEL CORP

20.25

0.7462687

39491431

MEDIATEK INC

8.9

1.021566

61898101

MEGA FINANCIAL H

26.05 -0.5725191

9048980

NAN YA PLASTICS

0.8086253

32964580

PRESIDENT CHAIN

378.5 -0.1319261 24.5

28334846

64 -0.9287926

4293612

CHINATRUST FINAN

18.7

CHUNGHWA TELECOM

97.5

0

6328128

QUANTA COMPUTER

COMPAL ELECTRON

18.5

0.2710027

6410022

SILICONWARE PREC

DELTA ELECT INC

147

0

2689456

SINOPAC FINANCIA

15.1

0

9826429

FAR EASTERN NEW

32.6

0

2536817

SYNNEX TECH INTL

43.55

-1.470588

13996974

FAR EASTONE TELE

74.7 -0.7968127

2730554

TAIWAN CEMENT

39.25 -0.6329114

4009207

17.25 -0.2890173

5940600

FIRST FINANCIAL

18.5 -0.8042895

7622198

TAIWAN COOPERATI

FORMOSA CHEM & F

74.1 -0.9358289

3335823

TAIWAN FERTILIZE

FORMOSA PETROCHE

84.1

-2.209302

967220

TAIWAN GLASS IND

-1.036269

726450

65.3

1.713396

10321522

35.55

0.1408451

9971181

76

PRICE DAY %

Volume

114.5 -0.8658009

1644856

60.4

0.4991681

5773964

13.45

2.281369

76722558

WISTRON CORP

29.7

0.8488964

5307688

YUANTA FINANCIAL

16.6

1.529052

27170546

YULON MOTOR CO

51.3

-0.965251

1869040

UNITED MICROELEC

4811488

1.239669

191

NAME

0

3491557

29.95 -0.1666667

610757

MOVERS

18

25

7 5890

INDEX 5856.12 HIGH

5888.92

LOW

5833.33

52W (H) 5896.71 5830

(L) 4719.96 16-May

20-May


13

May 21, 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 40.5 40.2

64.2

20.9

63.6

20.6

63.0

20.3

39.9 39.6

Max 40.45

average 38.997

Max 41.65

average 41.247

Min 39.4

39.3

Last 40

Min 40.9

Last 41

Max 64.1

average 63.329

21.9

41.5

21.8

41.3

21.7

41.1

21.6

40.9

Max 21.85

average 21.643

PRICE

DAY %

YTD %

WTI CRUDE FUTURE Jun13

95.47

-0.572797334

BRENT CRUDE FUTR Jul13

104.45

GASOLINE RBOB FUT Jun13

289.94

GAS OIL FUT (ICE) Jul13

(H) 52W

Last 21.55

(L) 52W

2.117873569

101.4199982

81.34999847

-0.181574924

-2.75579555

115.9300003

96.04000092

-0.258006811

1.299699532

324.119997

235.9499931

878.75

0.1995439

-3.460587751

987.5

814

4.132

1.898890259

17.78791334

4.457000256

3.203999996

293.56

-0.047667688

-2.393935364

323.8899946

258.589983

Gold Spot $/Oz

1355.35

-0.3053

-18.5712

1796.08

1322.06

Silver Spot $/Oz

21.6025

-2.9319

-28.2547

35.365

20.3395

Platinum Spot $/Oz

1450.92

-0.2941

-4.4032

1742.8

1374.55

Palladium Spot $/Oz

736.13

-0.0842

5.2125

786.5

553.75

LME ALUMINUM 3MO ($)

1849

-0.161987041

-10.80559575

2200.199951

1809

LME COPPER 3MO ($)

7305

0.343406593

-7.893077796

8422

6762.25

LME ZINC

1840

0.409276944

-11.53846154

2230

1745

14825

-0.503355705

-13.10082063

18920

14609 14.79500103

NATURAL GAS FUTR Jun13 HEATING OIL FUTR Jun13

3MO ($)

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

Min 21.5

Jul13

15.33

0.623564161

-2.635757383

17.07500076

656.75

0.612792034

-5.808533525

824

534

683

-0.036589828

-13.95275591

900

664.75

WHEAT FUTURE(CBT) Jul13 SOYBEAN FUTURE Jul13 COFFEE 'C' FUTURE Jul13 SUGAR #11 (WORLD) Jul13

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

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

average 20.468

Min 20.15

Last 20.45

0.258888505

4.085289375

1605.75

1217.75

136.5

-0.292184076

-8.726178536

202.1999969

132.6999969

NAME

16.80999947

ARISTOCRAT LEISU

69.94999695

CROWN LTD

86.65

0.296033156 0.277745631

-14.18439716 12.72277872

23.05999947 94.19999695

World Stock Markets - Indices

25.9

25.5

25.1

Max 25.85

average 25.541

Min 24.8

Last 25.5

24.7

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

0.9791 1.5217 0.9679 1.2876 102.44 7.9955 7.7624 6.1393 54.975 29.79 1.2537 29.941 41.187 9764 100.301 1.24625 0.84619 7.9023 10.2945 131.9 1.0301

0.6269 0.3164 0.4959 0.2882 0.7517 0.005 0.009 0.0309 -0.1637 0.235 0.4307 0.1002 0.0194 -0.0717 0.1296 0.1749 -0.0165 -0.0418 -0.1049 0.4625 -0.0194

-5.6562 -5.9285 -5.4241 -2.3806 -15.9508 -0.1538 -0.152 1.4871 0.0364 2.6519 -2.5764 -3.0326 -0.4419 0.297 -10.9411 -3.1109 -3.6363 3.9887 2.2915 -13.8969 -0.0194

1.0625 1.6381 0.9972 1.3711 103.31 8.0111 7.7678 6.3964 57.3275 32 1.2971 30.203 43.975 9904 105.433 1.25692 0.88151 8.4957 10.9254 132.77 1.032

0.9582 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1307 51.3863 28.56 1.2152 28.913 40.54 9301 74.482 1.20054 0.77553 7.7018 9.6245 94.12 1.029

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

4.27

-0.6976744

35.55555

4.49

2.29

6495748

13.51

0.4460967

26.61668

13.75

8.06

1006686

AMAX HOLDINGS LT

0.78

-3.703704

-44.28571

1.72

0.75

149300

BOC HONG KONG HO

27.85

1.272727

15.56016

28

20.85

7310545

VOLUME CRNCY

93500

CENTURY LEGEND

0.31

0

16.98114

0.42

0.215

CHEUK NANG HLDGS

5.82

-0.6825939

-2.83806

6.74

2.8

16000

CHINA OVERSEAS

23.5

2.844639

1.7316

25.6

14.883

16937604

CHINESE ESTATES

14

0.8645533

15.42186

14

7.697

419000

CHOW TAI FOOK JE

9.57

-3.137652

-23.07074

13.4

8.4

24704200

EMPEROR ENTERTAI

2.49

3.75

31.74603

2.5

1.12

2825000

FUTURE BRIGHT

2.39

-0.4166667

97.19047

2.732

0.765

1604212

40

3.225806

31.79571

40.65

16.94

13331338 2041220

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

US

15354.4

0.7954983

17.17214

15357.4

12035.08984

NASDAQ COMPOSITE INDEX

US

3498.965

0.9731496

15.87843

3499.205

2726.68

FTSE 100 INDEX

GB

6737.3

0.2118083

14.23392

6740.19

5229.76

HANG SENG BK

132.2

1.536098

11.37321

132.8

99.2

DAX INDEX

GE

8447.84

0.5934746

10.97487

8456.11

5914.43

HOPEWELL HLDGS

29.75

-0.6677796

-10.52632

35.3

19.049

1465640

HSBC HLDGS PLC

90.25

1.632883

11.00861

90.4

59.8

26357349 7932000

NIKKEI 225

JN

15360.81

1.471055

47.76858

15381.74

8238.96

HANG SENG INDEX

HK

23493.03

1.77774

3.690305

23944.74

18056.4

CSI 300 INDEX

CH

2609.607

0.677418

3.434669

2791.303

2102.135

GALAXY ENTERTAIN

HUTCHISON TELE H

4.25

-4.915319

19.38202

4.66

2.98

LUK FOOK HLDGS I

19.9

-2.45098

-18.44262

30.05

14.7

4705000

MELCO INTL DEVEL

17.3

2.853746

92.00887

18.18

5.12

4189000 5660273

TAIWAN TAIEX INDEX

TA

8377.05

0.1058771

8.799919

8414.88

6857.35

MGM CHINA HOLDIN

20.45

0.7389163

54.01092

20.85

9.509

KOSPI INDEX

SK

1982.43

-0.2204539

-0.7320796

2042.48

1758.99

MIDLAND HOLDINGS

3.5

0.8645533

-5.405407

5

3.249

2836000

S&P/ASX 200 INDEX

AU

5209.035

0.5454976

12.04756

5249.6

3985

NEPTUNE GROUP

0.165

-2.366864

8.552635

0.226

0.084

33930000

ID

5229.666

1.632106

21.14999

5243.507

3635.283

NEW WORLD DEV

13.66

1.788376

13.64392

15.12

7.95

8348445

FTSE Bursa Malaysia KLCI

MA

1779.52

0.5855886

5.362508

1826.22

1526.6

41

0.9852217

20.76583

43.7

20.65

19446364

SHUN HO RESOURCE

1.5

0

7.142859

1.67

1.03

0

NZX ALL INDEX

NZ

982.148

0.03289792

11.34796

998.487

755.149

SHUN TAK HOLDING

4.15

0.2415459

-0.9546553

4.65

2.56

4057750

PHILIPPINES ALL SHARE IX

PH

4489.84

-0.1416749

21.38049

4571.4

3266.08

SJM HOLDINGS LTD

21.55

0

19.72222

22.7

12.34

12877816

SMARTONE TELECOM

14.06

0.8608321

-0.1420449

17.38

12.5

1295034

25.5

2.822581

21.71837

26.1

14.62

14172229

JAKARTA COMPOSITE INDEX

20.0

Macau Related Stocks

1452.25 16.94

COTTON NO.2 FUTR Jul13

NAME

21.5

Max 20.85

Currency Exchange Rates

NAME

METALS

62.4

Last 63.1

41.7

Commodities ENERGY

Min 62.4

SANDS CHINA LTD

HSBC Dragon 300 Index Singapor

SI

660.39

-0.55

6.33

NA

NA

STOCK EXCH OF THAI INDEX

TH

1642.28

0.8796285

17.98582

1643.07

1099.15

HO CHI MINH STOCK INDEX

VN

492.27

0.9577523

18.98339

518.46

372.39

ASIA ENTERTAINME

4.04

-0.9803922

32.02615

5.18

2.4

69722

BALLY TECHNOLOGI

54.26

3.352381

21.35988

54.92

41.74

1327066

Laos Composite Index

LO

1358.14

-0.5957783

11.80223

1455.82

980.83

BOC HONG KONG HO

3.6

0

17.26385

3.6

2.7

1662

GALAXY ENTERTAIN

4.96

0.2020202

24.93703

5.05

2.25

4840

INTL GAME TECH

18.24

4.288165

28.72265

18.31

10.92

4529945

JONES LANG LASAL

96.94

0.9791667

15.48725

101.46

61.39

407781

LAS VEGAS SANDS

58.64

1.173223

27.0364

59.97

32.6127

3865891

MELCO CROWN-ADR

24.01

0.8823529

42.5772

25.15

9.13

2653299

MGM CHINA HOLDIN

2.65

0

43.24324

2.65

1.36

1000

MGM RESORTS INTE

15.34

0.5242464

31.78694

15.95

8.83

8628770

SHFL ENTERTAINME

16.81

1.817081

15.93103

17.2199

11.75

286120

SJM HOLDINGS LTD

2.81

0

21.64502

2.99

1.65

17400

140.99

1.169633

25.33559

142.65

84.4902

983114

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

WYNN MACAU LTD

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AUD HKD

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14

May 21, 2013

Opinion

Why China’s riches won’t bring it freedom Pankaj Mishra

Author of ‘From the Ruins of Empire: The Revolt Against the West and the Remaking of Asia’ and a Bloomberg View columnist

M

odern history is the story of how liberal democracy, originating in the U.K. and America, spread around the world. This may sound like an absurd fantasy. In actuality, this Whiggish narrative of progress underpins most newspaper editorials, political commentary and speeches in the West, and frames larger views of political developments in the non-West. It accounts for the gloomy undertone to Freedom House’s latest report, which records the shrinking of liberal democracy worldwide. Even countries with regular elections, such as India, are far from upholding the notion of liberalism, which advocates the maximising of individual rights for the fullest realisation of human potential. Perhaps we should discard the ideological prejudice that assumes the universalisation of liberal democracy. We might then be able to see dispassionately the true multiplicity of political forms, how they came into being and what they portend. The specific socioeconomic conditions that enabled both liberalism and democracy, such as the Reformation’s stress on individual responsibility or industrial capitalism, were particular to Western Europe and America.

Catch-up states They couldn’t be recreated elsewhere easily, especially among countries trying to catch up to the West. Japan, the first non-Western country to try to become modern, became an economic and military power without enshrining liberal concerns for individual rights. Before Japan, there was Germany, another society that embarked on industrialisation relatively late compared with the rest of Western Europe, and was modernised by a strong centralised state. Neither Germany nor Japan embraced the traditions of Anglo-American liberalism, which encouraged individualism, laissez-faire economics and a fundamental distrust of state power.

Individual rights were subordinated to the economic and military imperatives of countries lurching late into the modern world. Few Japanese wished to criticise the slogan “fukoku kyohei” (meaning “enrich the country and strengthen the military”), as their country rapidly modernised in the late 19th century under the not-sobenign gaze of the U.K., Russia and the U.S. Even during the politically favourable conditions of Taisho Japan or Weimar Germany, liberals wanted the state to devise and implement social-welfare policies for the benefit of the working poor. Reacting against modern capitalism’s built-in inequalities, they trusted in bureaucratic management of the economy (prefiguring in some ways the liberal New Dealers of the U.S.). Many Indian liberals, too, stressed state initiative in many areas of public life. India’s first prime minister, Jawaharlal Nehru, implanted representative democracy by ensuring that individual consent, periodically sought through elections, legitimised the great power of the Indian state. Yet his liberalism had a communitarian and paternalistic bent. The state was to hold great prescriptive powers in the

realm of the economy. The Indian constitution held that free speech, too, could be circumscribed in favour of the public good.

China’s challenge But it is China that poses the bigger challenge to the Anglo-American faith in the onward march of liberalism and democracy. It has achieved spectacular growth without embracing electoral democracy. Moreover, the state controls the commanding heights of the globalised economy. This will not change anytime soon. China’s experience as a late developer is crucial to understanding its peculiar trajectory. Liberals, always a minority among the country’s leaders and thinkers, had little chance of flourishing against a backdrop of civil war and foreign invasions. China’s biggest challenge, for much of the 20th century, was survival and self-strengthening. Chinese leaders first had to establish, in double-quick time, a centralised national state, a centre of security and stability in a dog-eat-dog world of international relations. Unlike the Japanese, who developed an indigenous family conception of the state, Chinese leaders had to systematically overhaul the body politic in order

to command loyalty from China’s citizens. Having disavowed their imperial system, Chinese leaders – Chiang Kai-shek as well as Mao Zedong – had to inculcate a sense of nationalism and national identity from scratch through mass education and propaganda. Individual challenges to the state’s arbitrary power were ruthlessly crushed. The heirs of Mao finally recognised the blunders of investing too much economic initiative with the state. But even Deng Xiaoping, while liberalising the economy, did not break with older imperatives: of mobilising China’s resources to make it truly autonomous and secure, and postponing the expansion of individual freedoms. Speaking of the “China Dream,” the new Chinese leader, Xi Jinping, upholds the same imperatives of national unity, strength and pride against the need for broad democratic reforms. And he may be right to think he has a receptive audience. Soothsayers have been predicting the collapse of the Chinese regime for decades. In recent years, they have transferred their hopes onto the main beneficiaries of China’s economic growth: the middle classes. Last year’s leadership transition

generated much wild talk about imminent revolution.

Remote apparatchiks But China’s middle classes seem too fragmented to mount an effective political movement, let alone spark a revolution. And to many Chinese left behind by economic growth, the remote apparatchiks in Beijing may appear more committed to their welfare than an affluent minority devoted to further self-enrichment. With its rhetoric of social welfare, the Communist Party still monopolises the ideological sources of mass political legitimacy in a poor country. It now also draws on an indigenous discourse, such as neo-Confucianism, in championing the values of discipline, hierarchy and harmony. The party also remains capable of diverting political ferment among the middle classes into nationalism. In any case, the growing availability in China of some private freedoms – primarily to consume and travel – has defused at least some of the urge for political change. It is why Chinese liberals insisting on the sanctity of individual rights seem as powerless and isolated as their counterparts in 1920s and ’30s Japan. Ignoring their plight, many commentators view China’s ability to survive and adapt as proof of an alternative model: a developmental state that, presided over by a technocratic elite, is stronger than society and places the national community above the individual. But these inverted Sinophiles, or Asianized Whigs, make the same mistake as the ideologues of liberal democracy: China’s “model” is not for universal export, either. It is, instead, an unreplicable product of China’s peculiar history. Here is the question before us: Is the model sustainable, and what implications would its failure have for China and the larger world? The late modernisation of Japan and Germany, though largely successful, did not lead to peace in Europe and Asia. Rather, economic crises and growing social unrest led to greater authoritarianism at home and jingoistic expansionism abroad. Certainly, China’s assertive posture with its neighbours and increasing severity against internal dissidents do not bode well. China may turn out to be another cautionary lesson in the dangers of a country arriving too late in the modern world, with its elites determined to regard liberal democracy as an unaffordable luxury. Bloomberg View

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

May 21, 2013

Opinion Business

wires

Open-access economics

Leading reports from Asia’s best business newspapers

Times of India

Barry Eichengreen

Professor of Economics and Political Science at the University of California, Berkeley

India’s Prime Minister Manmohan Singh engaged in some plain speaking on the border, Brahmaputra and bilateral trade during his first meeting with Chinese Premier Li Keqiang. India stressed on maintenance of peace on the border. Mr Singh told the Chinese leader, “If peace is disturbed, it impacts all other areas of the relationship.” There were also discussions on the importance of making bilateral trade more of a two-way street. Mr Singh said India would welcome Chinese investment, but only if there was reciprocity from the Chinese side.

China Daily Huawei Technologies Co Ltd has denied receiving government subsidies and has warned the European Union against being judgmental of Chinese companies. The EU said last week it may investigate claims that Huawei and rival Chinese telecom company ZTE Corp had been paid unfair subsidies, allowing them to flood markets with cheap equipment. But Huawei’s top executive in Western Europe said the company will take strong action if the EU starts an investigation.

Thanh Nien Daily Vietnam attracted FDI worth US$8.2 billion in the first four months of 2013, an increase of 17 percent against the same period last year, according to official data. But economists warn that Vietnam still has many things to do before it can attract quality projects as authorities have recently revoked the licences of many projects, as investors failed to start them. At a recent meeting reviewing Vietnam’s FDI activities over the past 25 years, the Foreign Investment Agency said that while the total registered investment was US$211 billion, just 47 percent, or nearly US$98 billion, has been disbursed.

Vientiane Times Laos has been named world’s best tourist destination for 2013 by the European Council on Tourism and Trade. The Bucharest-based council chose Laos for this year’s award for the government’s “promotion of free and fair tourism, the safety of tourists, the facilities offered, access to sites of historical and cultural significance, investment in the preservation of historical sites, and the benefits of tourism to grassroots communities”. Last year, some 3.3 million tourists visited Laos, up 22 percent year-on-year.

I

n early 2012, outgoing World Bank President Robert Zoellick announced that the Millennium Development Goal of halving the global poverty rate relative to its 1990 level had been achieved in 2010 – five years ahead of schedule. But many analysts have challenged estimates that rely on the World Bank’s current poverty line, raised in 2008 from US$1 to US$1.25 per day, in purchasing power parity (PPP) terms. Critics argue that, for methodological reasons, the PPP-based poverty line misrepresents the prevalence of poverty worldwide. For example, the three rounds of the World Bank’s International Comparison Programme that have been conducted so far have each defined the poverty line differently, underscoring the weakness of the current measure. In fact, taking into account inflation in the United States, the poverty line should have been raised to US$1.45 per day in 2005. Improving global poverty estimates – the World Bank’s extend over three decades, beginning in 1981 – requires overcoming three major problems: insufficient survey data, flawed survey execution, and faulty PPP conversions. Unfortunately, the World Bank’s approach has evaded these issues or addressed them inadequately. First, many countries lack survey data showing how income and consumption are distributed among their citizens. The World Bank avoids this problem by assuming that the poverty rate of any country without such data matches the region’s average. But this approach has led to North Korea being assigned essentially the same poverty rate as China, even though the former regularly receives food aid from the latter.

Second, the World Bank accepts survey data uncritically – even when it conflicts with data from other sources. For example, World Bank survey data suggest that India’s per capita household expenditure has grown by only 1.5 percent annually since the early 1990’s, implying that the average Indian spent US$720 in 2010.

If the problem of procedures and priorities is addressed, the fact that politicians are tempted to misuse scholarly analysis for their own ends will take care of itself

But national-income-accounts data show a 4.5 percent annual rise, on average, over the last two decades, translating into per capita expenditure of US$1,673 in 2010 – roughly 2.5 times higher than the Bank’s estimate.

Poor data Likewise, World Bank survey data estimate that the Indian middle class comprises roughly 90 million

people, despite more than 900 million cell-phone subscribers and 40 million cars. Such contradictions reflect significant measurement discrepancies, which, in India’s case, could be on the order of hundreds of millions of people. The third major challenge is using PPP estimates, measured in national currencies, to convert survey data into global poverty estimates that account for cost-of-living differences between countries. Given that the conversions that the World Bank currently uses are based on an international exercise that was conducted for 2005, they fail to account for recent factors that are significantly affecting the poor and vulnerable, such as much higher prices for staple foods. Furthermore, PPP conversions have little significance for some countries, most notably China. Rather than permit price surveys in a random sample of locations (required for accuracy), China restricted data collection to a few urban areas. The resulting data

showed Chinese prices to be 40 percent higher than previously thought; Chinese living standards were then revised downward by roughly the same proportion. If taken at face value, the survey data on prices, together with China’s growth rates, would suggest that China was almost as poor in 1981 as the world’s poorest country today, with average personal consumption below the current level of Liberia – another country to which China provides significant aid. While the Bank’s latest PPP-conversion rate puts the number of poor Chinese at 173 million, the previous rate would suggest that only 69 million Chinese were living below the poverty line. With such a flawed system shaping the world’s understanding of poverty, declarations of success or failure carry little meaning. An improved poverty indicator – one that addresses, rather than avoids, the three major problems plaguing global estimates – is urgently needed. © Project Syndicate


16

May 21, 2013

Closing Indonesia appoints new finance minister Standard buys Indian wealth unit Indonesia named respected investment chief Muhammad Chatib Basri as finance minister, who takes on the role as Southeast Asia’s biggest economy grapples with slowing economic growth and how to bring down the cost of massive fuel subsidies. Mr Basri, 47, will be inaugurated today to become Indonesia’s third finance minister in as many years. Mr Basri faces investor concerns over slowing economic growth, sizable current and capital deficits and the government’s repeated failure to deal with high-cost fuel subsidies, which are taking away money from desperately needed infrastructure projects to encourage longer term investment.

Standard Chartered Plc agreed to buy Morgan Stanley’s Indian wealth management assets for an unspecified price as it seeks to capture more private banking business in the South Asian nation. The sale is expected to be completed by the year’s end, New York-based Morgan Stanley said in an e-mailed statement yesterday, without disclosing terms of the deal. The transaction will significantly increase Standard Chartered’s private banking assets in the country, the U.K. bank said. Standard Chartered will initially pay US$8 million for the unit. It will follow up the payment with an undisclosed sum later, the person said.

Li pledges better ties with India Countries agree on new US$100 bln bilateral trade target for 2015

Philippines may evacuate workers in Taiwan The Philippines may evacuate its 87,000 workers in Taiwan if tensions over the killing of a fisherman lead to widespread violence against Filipinos. “Now, there seems to be no need,” Abigail Valte, a spokeswoman for President Benigno Aquino, said yesterday. “Should the need arise, we are prepared to evacuate.” At least three Filipinos in Taiwan have been attacked since May 9, when a Philippine Coast Guard vessel opened fire on a Taiwanese boat in disputed territorial waters, killing one fisherman. Taiwan President Ma Ying-jeou froze hiring of workers from the nation and Taiwanese tourists scrapped travel plans for the Philippines. Filipinos working in Taiwan remit more than US$650 million in total to the Philippines each year, according to a statement by the Taipei Economic and Cultural Office in Manila. Almost 1.7 million Filipinos overseas send home about US$20 billion a year. The Philippines may consider directing more citizens to South Korea, Malaysia and the Middle East if they are evacuated from Taiwan, Mr Valte said.

Yahoo to buy start-up Tumblr for US$1 bln

Li Keqiang, left, seeks trust in talks with India’s Manmohan Singh

I

ndia and China will study new ways to ease tensions along their ill-defined border, Chinese Premier Li Keqiang said yesterday in his first foreign trip since taking office, which comes just weeks after a military stand-off between the Asian giants in the Himalayas. The number two in the Chinese leadership offered New Delhi a “handshake across the Himalayas” and said the world’s most populous nations could become a new engine for the global economy if they could avoid such irritants. “Both sides believe that we need to improve the various border-related mechanisms that we have put into place and make them more efficient. We need to appropriately manage and resolve our differences,” Mr Li said at a joint news conference with India’s Prime Minister Manmohan Singh. China and India disagree about large areas on their 4,000-km-long border and fought a brief but bloody war 50 years ago. While there has not been a shooting incident in decades, the long-running dispute gets in the way of improving economic relations between neighbours, who account for 40 percent of the world’s population and whose fast growing markets stand in contrast to the stagnant

economies of the West. In a joint statement that seemed to address Indian gripes about its US$29 billion deficit with China, they agreed to address the imbalance, with specific reference to pharmaceuticals, IT services and agriculture. In an impromptu speech after an official welcome ceremony at India’s colonial-era presidential palace earlier yesterday, Mr Li said he wanted to build trust and cooperation on his trip. “World peace and regional stability cannot be a reality without strategic mutual trust between India and China. And likewise, the development and prosperity of the world cannot be a reality without the cooperation and simultaneous development of China and India,” he said.

Balance rate Bilateral trade between the two countries touched US$73 billion in 2011, making China India’s largest trade partner, but slipped to US$66 billion last year. India’s prime minister told Mr Li it was important to balance out trade as the two countries aim for US$100 billion in bilateral trade by 2015. “While we are committed to the US$100 billion by 2015 we will have

to have a more balanced rate,” said a senior government official, who was briefed about the restricted meeting. India is pressing for greater access for its pharmaceuticals and IT services. The official described the conversations as constructive and cordial. Earlier statements from Chinese officials have given some hope that India’s gripes are being heard. “China attaches great importance to the China-India trade deficit issue. We are willing to expand our market for India’s products and provide facilitation,” deputy foreign minister Song Tao said last week. Up from next to nothing in the 1990s, trade has been heavily skewed in favour of China. It exports power and telecoms equipment to its neighbour, which as one of the world’s fastest growing major economies could offer brighter opportunities for business than the stagnant West. India’s Essar Group conglomerate is set to sign a US$1 billion loan deal with China Development Bank and China’s largest oil and gas producer PetroChina Co. Ltd during the trip, sources said. They said the loan would be backed by the supply of refined products to PetroChina. Reuters

Yahoo! Inc.’s board has approved a deal to buy New York-based blogging service Tumblr for US$1.1 billion, U.S. media reports say. The deal was a “foregone conclusion” and was unanimously voted for by the board, tech blog AllThingsD reported, citing sources close to the matter. If confirmed, it will be CEO Marissa Mayer’s largest deal since taking the helm of Yahoo in July 2012. Under the terms of the acquisition, Tumblr would continue to operate as an independent business, the Wall Street Journal said, citing unnamed sources familiar with the situation. The company is currently run by David Karp, a 26-year-old New Yorker who founded Tumblr in 2007, and he is expected to remain in his role. Analysts say that by acquiring Tumblr, Yahoo will gain a larger social media presence and enhance its ability to attract younger audiences in its battle with internet rivals Google and Facebook.

Vietnam economy at risk: deputy PM Vietnam still faces “great risk” of macroeconomic instability, a deputy premier said, as credit growth trails behind targets while banks work to reduce elevated bad debt that has hampered growth. While Vietnam is targeting a 12 percent expansion in credit this year, local businesses are facing difficulties getting loans, Deputy Prime Minister Nguyen Xuan Phuc told the National Assembly in Hanoi yesterday. Credit grew about 2 percent in the first four months of the year, the government said last week. The economy expanded 5.03 percent last year, the slowest pace since 1999, and the International Monetary Fund last month cut this year’s forecast to 5.2 percent from 5.8 percent. Lending grew last year by what the World Bank described as an “anaemic” 9 percent, and while the central bank has cut policy rates, its attempts to spur growth have been countered by delays in forming a vehicle to address bad debt. “Vietnam’s economy still has shortcomings and weaknesses,” Mr Phuc said.

Macau Business Daily, May 21, 2013  

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