Macau Business Daily, May 6, 2013 by Business Daily

April 19, 2013

MOP 6.00

British ‘high-level’ business mission coming next month

Deputy editor-in-chief

Vitor Quintã

A delegation of British companies and the former lord mayor of London, Sir Michael Bear, will visit the city next month to try to boost business ties, said the new British consul-general in Hong Kong and Macau, Caroline Wilson. The territory is “a high-level opportunity” but more needs to be done to get British firms interested, she said in an interview with Business Daily. Pages 6 & 7

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Galaxy Entertainment Group Ltd still has plenty of land to develop on its Galaxy Macau resort. But the company has now swooped in to buy a majority stake in neighbouring Grand Waldo hotel-casino for HK$3.25 billion (US$418.9 million). The Cotai property has been turning in a loss in the last few years but has “development potential,” Galaxy said in a filing to the Hong Kong Stock Exchange.

www.macaubusinessdaily.com

Galaxy buys Grand Waldo

Year II

Monday May 6, 2013

Editor-in-chief Tiago Azevedo

G2E Asia hit by trade dispute fallout L

ast year a trade dispute between a Macau-based maker of electronic gaming equipment and overseas rivals overshadowed the Global Gaming Expo (G2E) Asia trade show. And this year’s edition – set for May 21-23 – suffered a last-minute hit as Alfastreet, one of the major players in Macau’s electronic gaming market, has announced it will not attend. The Slovenian firm is wary of prosecution over its multi-game products, while describing the technology patents held by Macau-based LT Game Ltd as ‘nonsense’. The withdrawal is a blow to G2E Asia’s organisers, which are already facing the prospect of a rival casino industry conference and trade show planned by Macau businesses.

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No end in sight for cash handout The government has no plans to end the cash handout scheme, said Executive Council spokesperson Leong Heng Teng, at least while the public budget keeps turning up a profit. The measure could cost the administration a recordhigh 4.88 billion patacas (US$610.7 million) this year. The handout will start on July 2 and benefit 569,780 permanent residents and 68,112 temporary residents. Page 5

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May 3

HSI - Movers

Southeast Asia smoothes ‘flu impact on airport

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The Macau International Airport was hit by a decline in mainland Chinese passengers last month, due to the impact of the H7N9 bird ‘flu, the airport operator said. But strong growth in the Southeast Asian market helped offset the blow. Business was good during Labour Day holidays but the company has called on the government to provide financial support to new long-haul routes. Page 2

%Day

NEW WORLD DEV

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ESPRIT HLDGS

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BELLE INTERNATIO

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CHINA RES ENTERP

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CITIC PACIFIC

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LENOVO GROUP LTD

-1.01

CHINA SHENHUA-H

-1.11

HANG LUNG PROPER

-1.30

PETROCHINA CO-H

-1.35

CHINA COAL ENE-H

-1.71

Source: Bloomberg

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Criminal probe freezes Wynn’s Okada lawsuit

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Casino money used to buy U.K. football club

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MGM revenue rise outpaces rivals

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May 6, 2013

Macau Police scores biggest drug bust The Judiciary Police busted the city’s largest drug smuggling case since the 1999 handover, confiscating over 50.8 kilograms of cocaine. The drugs could be worth 200 million patacas (US$25 million) in the underground market, the police said. Officers arrested four Filipino nationals on Saturday night in two downtown hotels after they had arrived from Beijing. The suspects used Macau and mainland China as transit points to smuggle drugs from Brazil to the neighbouring regions of Macau, the police said. The authorities said they were in contact with Interpol to follow up on the case.

Airport passengers Improve or close, govt up in April despite ‘flu tells of casino smoking areas Airport operator wants more public financial support for new long-haul routes Tony Lai

tony.lai@macaubusinessdaily.com

trong growth in the Southeast Asian market helped maintain the passenger volume at the Macau International Airport up last month, even though the impact of the H7N9 bird ‘flu was felt. The airport handled over 400,000 passengers last month – including Easter holidays –, rising by 14 percent yearon-year, Macau International Airport Co Ltd (CAM) said in a statement on Friday. The number of landings and taking-offs expanded at a quicker pace of 19 percent to more than 3,900 movements, which means that in average there were fewer seats occupied. The growth came from a 25-percent increase in passengers coming from Southeast Asia, according to the company. This increase more than offset a decline in travellers from mainland China, which “droppedslightlyduetotheeffect of H7N9 bird ‘flu”, said CAM. The company did not

provide any figures on mainland passengers. The April growth was slower than the 22.4-percent rise in passenger volume recorded in March. Zheng Yan, chairman of carrier Air Macau Co Ltd, said last week Beijing’s anticorruption efforts and the H7N9 virus affected his company’s performance in April. The virus was first found in humans in Shanghai in late March and has been spreading to southern China. Desp ite the b i r d ‘ fl u gloom, the airport handled about 67,000 passengers in the Labour Day holidays from April 27 to May 1, rising by 9 percent year-on-year. The airport company was optimistic that “the passenger volume in May should be able to keep at a growth rate of 10-13 percent”. Some airlines have shown interest in launching new routes between Macau and Cambodia, the statement noted. But the airport company

also said in another statement released last week – only available in Chinese language – that the development of medium-tolong haul flights “is lagging behind and worsening”. “It is difficult for potential carriers to be determined to launch a new flight… without financial support from the government, if Macau wants to develop more new routes, particularly medium-tolong haul flights,” the statement added. CAM recalled that other jurisdictions had set up funds to partially subsidise newlylaunched routes, sharing the initial operational risks. Mr Zheng said last week Air Macau was currently not interested in starting direct flights to Russia as it was not economically feasible. The airport operator also said they could launch passenger transport services linking the airport to the Gongbei border before the end of June.

he administration reiterated they are determined to reduce, or even cancel, the casino smoking areas in casinos and other gaming venues that again fail to meet air quality checks. Secretary for Social Affairs and Culture Cheong U said the Health Bureau would carry out a second check “in due course” on the casinos that had failed to meet the requirements in the first test. The bureau said on April 10 that 28 out of Macau’s 46 gaming venues, or 63.6 percent of the total, had air quality issues. “We have already given them a period of time of about 30-40 days to improve,” Mr Cheong said on the sidelines of a public event on Saturday. He added: “If the second result matches our requirements, they will be fine. If [the smoking areas] fail again, [we will], in accordance with the rules, reduce the areas or eventually even revoke those areas.” More than half of the problematic venues, or 16

T.L.

Cheong U, Secretary for Social Affairs and Culture

Businessmen to explore Latin America over summer

The airport handled about 67,000 passengers in the Labour Day holidays

casinos, are operated under the licence of Sociedade de Jogos de Macau, SA. Angela Leong On Kei, the company’s executive director, said last month they would fix the issues. But she asked the administration for understanding the difficulty of revamping ventilation systems at the operator’s old casinos. Mr Cheong also said the situation of the partial smoking ban in casinos – allowing casinos to set up smoking areas no larger than half of their operating floor – since January was “not that bad”.

elegations made up of Macau entrepreneurs will visit several countries over the summer, including Chile after calls from the consulate for closer economic ties. The Macau Trade and Investment Promotion Institute will take businesspeople to Brazil and Chile from June 5 to 15, and East Timor in the July 1-3 period. During the stay in Brazil, the delegates will attend the ABF Franchising Expo 2013 – one of the largest franchising fairs in Latin America featuring food products and cars, according to press statements released by the Trade and Investment Promotion Institute over the weekend. The entrepreneurs will also join business seminars and visits to companies in the two South American countries. Mario Artaza, the consul of Chile in Hong Kong and Macau, said in his visit to

the city last month that “there is room for growth” in bilateral trade. Echo Chan Keng Hung, the institute’s executive director, also said at the time the “growing demand for wine and food products” means “bright prospects” for the Macau-Chile trade. Official data shows the city’s imports from Central and South America reached 540.4 million patacas (US$67.55 million) last year, accounting for only 0.76 percent of the total, comparing with 0.9 percent in 2011. Another delegation will also attend a business and trade seminar of cooperation between China and Portuguese-speaking countries in East Timor in July. The institute is also preparing a business mission to trade promotion seminars co-organised with its Guangdong counterpart in New Zealand and Melbourne, in June 26 and 28. T.L.

May 6, 2013

Macau

Trade dispute makes first G2E Asia victim Electronic games maker wary of prosecution, cries foul over LT Game’s patents

editorial

Lavish decrees

Vítor Quintã

vitorquinta@macaubusinessdaily.com

ne of the major players in Macau’s electronic gaming market will not attend this year’s Global Gaming Expo (G2E) Asia 2013 trade show amid an ongoing trade dispute. Alfastreet, a privately held Slovenian gaming equipment manufacturer, has announced it will skip the event because it will not be able to showcase its main product, multi-game systems. “Organisers cannot guarantee protection from prosecution at the exhibition,” Albert Radman, Alfastreet’s marketing and sales manager said, quoted by Yogonet, a gaming news website. Alfastreet was one of four makers banned from displaying multi-game terminals involving live dealer baccarat in last year’s G2E Asia, due to a court injunction from a rival. United States-based casino games maker SHFL entertainment Inc tried to display its Rapid Baccarat games but the injunction was enforced by Macau Customs Service on the first day of the public part of the event.

Tiago Azevedo The dispute threatened to boil over into a U.S.-China diplomatic incident. At the time Mr Radman told monthly magazine InterGaming the company was pondering to stay away from the trade show: “What purpose would we have for coming next year if we can’t exhibit our products?” “Despite any possible loss of revenue, they [Alfastreet] chose to be the ones that are not going to be extorted in such way,” he now says. Macau-based LT Game Ltd claims it has an effective monopoly on multi-game terminals involving live dealer baccarat because it patented this technology here.

Patent ‘nonsense’ Lt Game’s patent “would not hold water in any market other than China. You cannot patent a concept; it has to be an original invention,” Mr Radman says. “It’s like someone patenting roulette. It’s nonsense and we are really disappointed that no one can

do anything about it,” he added. SHFL has challenged several of LT Game’s patents here but so far all court decisions have been in favour of the Macau-based firm. Instead of coming to Macau Alfastreet will stage a special event in Malaysia, where the company has its Asian offices. “This event will serve as a replacement of the G2E Asia presentation, and perhaps even an upgrade,” the manufacturer said. Alfastreet is one of the six electronic gaming tables manufacturers “who collectively have a market share in excess of 90 percent” here, Union Gaming Research Macau said last week. The company’s decision is a blow to G2E Asia, five months after Macau businesses said they planned to set up their own casino industry conference and trade show here. Business Daily asked for a comment from G2E Asia’s organisers but received no reply before press time. The event will be held at the Venetian Macao from May 21-23.

Lawsuit against Okada halted after court ruling

Kazuo Okada is under criminal investigation in the U.S.

ynn Resorts Ltd said late on Thursday U.S. time its legal battle with Kazuo Okada – a former director of Wynn Resorts and Wynn Macau Ltd – has been put on hold for six months to allow U.S. prosecutors to pursue a criminal investigation into possible bribery by Mr Okada and his companies in the Philippines. Wynn said that Clark County District Judge Elizabeth Gonzalez issued the ruling granting a request made by federal prosecutors last month seeking a temporary stay on discovery in civil proceedings between Wynn and Mr Okada so as not to disrupt an ongoing criminal probe. Wynn declined to elaborate

further on the court ruling. Representatives for Mr Okada in the United States and Japan were not immediately available for comment. But the Nevada judge, addressing concerns raised by Mr Okada’s lawyers, told U.S. lawyers not to seek extensions of the stay. “Don’t come back asking for another six months, and another six months, because it ain’t going to happen,” she said at a hearing in Las Vegas. The inquiry relates to a US$2.3 billion (18.4 billion patacas) Philippines casino project Mr Okada is planning, and alleged possible breaches of the U.S. Foreign Corrupt Practices Act, according to

a state court filing lodged by federal authorities last month. The statute bars payments to foreign officials. That filing was the first time U.S. authorities publicly acknowledged a criminal investigation of Mr Okada and his companies – Japan’s Universal Entertainment Corp and Nevada-based Aruze USA Inc. The Japanese pachinko billionaire has denied any wrongdoing in the Philippines and said he was ousted from the Wynn board for opposing Wynn Resorts’ US$135 million donation in 2011 to the University of Macau Development Foundation. In a footnote in last month’s filing U.S. prosecutors said they were also conducting an investigation into the Macau donation, without elaborating. Charles McCrae, a lawyer for Mr Okada, argued at the hearing that stopping all discovery in the case “ties us to a chair” by preventing Okada’s attorneys from gathering evidence related to a report by former Federal Bureau of Investigation Director Louis Freeh that was the basis for Wynn Resort’s redemption of Mr Okada’s shares. On April 22, Universal Entertainment released a review it commissioned from former Homeland Security Secretary Michael Chertoff that concluded Freeh’s report was “deeply flawed,” “one-sided, and seemingly advocacy-driven”. T.A. with Reuters/Bloomberg News

tiago.azevedo@macaubusinessdaily.com

he number of permanent residents receiving the government’s wage subsidy fell to a record low in the fourth quarter of last year. The government says it is a sign that the subsidy scheme is helping to reduce the number of low-income earners. The scheme gives low-income earners aged 40 and older a cash allowance to top up their earnings to a minimum of 4,400 patacas (US$551) a month. The subsidy increases from next month to ensure that all permanent residents earn at least 4,700 patacas a month. The Financial Services Bureau revealed last week that 1,663 workers applied for the subsidy in the fourth quarter, 14 percent fewer than the 1,930 that applied a year earlier. It was the smallest number of applications in any quarter since the scheme began in 2008. Secretary for Economy and Finance Francis Tam Pak Yuen said the scheme had been “positive”. He said the government had encouraged more low-paid, middle-aged people to find higher-paying jobs, ensuring they no longer needed the subsidy. “We think the aim of our scheme is being achieved,” he said. But he is not giving the full picture. The decrease in the number of applications is not surprising, given the median wage rose to a record 12,000 patacas at the end of the fourth quarter, 300 patacas more than at the end of the third. Residents are earning more but mainly because labour, especially qualified workers, is becoming a scarce and valuable resource. Rapid economic growth is forcing the public to find better-paid jobs. Some of these jobs, such as being a croupier, are open only to residents. Also, in an economy without enough human resources to meet the demand of small and medium enterprises, these companies have had to raise pay in an attempt to hold onto staff.

Opposing views One positive aspect of Mr Tam’s speech was that he pronounced the scheme to be temporary, something that hadn’t been said before. It is good news because it will prevent some employers from taking advantage of the scheme to keep pay artificially low. This does not happen as much as before but it still happens, labour representatives say. Mr Tam suggested that as soon as all workers are guaranteed a reasonable pay, the government will end the scheme. Unfortunately, Executive Council spokesperson Leong Heng Teng, in announcing details of this year’s cash handout, made a very differentsounding speech. The government had not considered ending the cash handout scheme since it was a way to “share economic growth”, Mr Leong said on Friday. But the cash handout scheme seems actually a waste of public money. It is a legacy of the last government and the present chief executive must try to put an end to it. He has tried once, and failed. But that is no reason to stop trying. If the government sees the wage subsidy scheme as temporary, even though the public has grown used to it, the cash handout must also be a short-term measure or be redesigned to help those that need it most. For most of the public, these measures do little more than give opportunities to spend – and waste – more.

May 6, 2013

Macau

Casino operator tied to Carson Yeung trial

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HOSPITALITY

Unknown deposits funded Yeung’s football club purchase, court told

Going it alone The number of mainland tourists from outside Guangdong pales in comparison to the number of visitors from Macau’s closest neighbour. None of the three next-biggest sources of tourists sends nearly as many as Guangdong – especially tourists travelling on individual visas. Some mainlanders are allowed visas to travel to Macau as individuals rather than as members of tour groups. Macau’s second-biggest source of mainland tourists, Fujian, accounts for about one-tenth of arrivals from Guangdong. But tourist arrivals from Beijing and Shanghai, two of mainland’s big metropolitan areas, outstrip most other provinces. And tourists from these cities make proportionately greater use of the individual visa scheme than tourists from anywhere else.

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Vítor Quintã

vitorquinta@macaubusinessdaily.com

ong Kong businessman Carson Yeung’s purchase of the English football club Birmingham City was partly paid with funds deposited by a Macau casino operator in bank accounts connected to his money laundering trial, a Hong Kong prosecutor said on Friday. Mr Yeung received HK$721.3 million (US$93 million) in deposits from a casino operator, securities firms and “unknown parties” into five bank accounts controlled by him over a seven-year period to 2007, John Reading, prosecution lawyer, told a Hong Kong court at the start of Mr Yeung’s trial on money-laundering charges. Mr Y eu n g wa s ch a i r m a n o f Grandtop International Holdings Ltd, which from 2007 to 2009 bought the Birmingham club from David and Ralph Gold and David Sullivan for 96.5 million pounds (1.2 billion patacas). Grandtop then changed its name to Birmingham International Holdings Ltd.

A company operating casinos in Macau, which wasn’t named in the proceedings, deposited HK$62.5 million into Mr Yeung’s accounts, a cco r d i n g to th e p r o s e c u t o r ’ s submission. The deposits “amounted to more than 300 times the total combined salary” of Mr Yeung and his father, who co-signed on two of the accounts, Mr Reading said. In a January filing Birmingham International said the football club purchase was underwritten by Kingston Securities Ltd – a unit of Hong Kong-listed Kingston Financial Group Ltd. Kingston Financial Group bought Casa Real casino hotel in 2005 and it also owns the Grandview casino hotel here. Business Daily makes no suggestion that Kingston Financial, Kingston Securities or any of that group’s companies are implicated in Mr Yeung’s money laundering case. Judge Douglas Yau rejected a request from Mr Yeung’s lawyers to stop the trial.

Carson Yeung lost a bid to stop his trial

In Friday’s hearing, Mr Yeung’s counsel said a “significant portion” of his wealth came from stock trading before 2001. Lawyers for the hairdresserturned-football-tycoon had argued he would not receive a fair trial because in Hong Kong official papers that trace stock-broking activities are normally kept for only seven years. With Bloomberg News/AFP

Beijing and Shanghai are not far away from the three main supplier provinces, aside from Guangdong, and are in fact well ahead from most of the remaining provinces. Between 2011 and March this year, an average of almost 42,000 people from Shanghai and an average of more than 27,000 from Beijing visited each month. The plot of tourist arrivals from each city follows a similar upward trend, with peaks at the beginning and middle of each year. About 72 percent of tourists from Beijing and 79 percent from Shanghai travel on individual visas. Of the tourists from Beijing and Shanghai, the proportion that travels on an individual visa is greater than in any other mainland province, including Guangdong. And the proportions are increasing. In four of the six months ended March, 80 percent of Shanghai arrivals travelled on individual visas. J.I.D.

81 %

Proportion of February’s tourist arrivals from Shanghai travelling on an individual visa

Work on Internet slowdown cable to start Undersea link of Guangdong coast was first damaged on April 13, says CTM

damaged undersea telecoms cable that has slowed load speeds on some Internet sites when accessed via Macau will be repaired starting today. The city’s main telecoms provider Companhia de Telecomunicações de Macau SARL (CTM) gave the news in a statement, adding the remedial work commissioned by the cable’s administrator would take “five to ten days”. It has affected “CTM Internet customers when accessing some international websites”, said the company. The telco added that the relevant section of cable – 108 kilometres (67 miles) off the coast of the mainland city of Shantou, Guangdong Province – had been damaged on the evening of April 13 – more than three weeks ago.

Because of the vast distances covered by such submarine networks, telco consortia usually maintain them. Third party specialists, appointed by the relevant consortium after tender, normally do repairs. The fact that the damaged cable is inside mainland China’s territorial waters might also have delayed repairers’ access to the cable. Foreign vessels and crew cannot sail into China’s waters without express permission according to the country’s Maritime Safety Commission. CTM said that in the meantime it was working to minimise disruption to its Internet customers. “To cope with the restoration, a series of emergency measures have been taken by CTM in recent days, including re-allocating

the network resources via other telecommunication network[s], arranging [the] customer services team to individually follow up the affected corporate customers, as well as expanding the Internet bandwidth capacity to keep the impact on Macau residents at its minimal,” said the company. “CTM will be closely monitoring the progress of the restoration and will keep the public updated at a timely manner,” it added. Last year CTM had three service failures on its telephony services, two of which had to do with “human operation errors”, the company said. For those, CTM was fined 800,000 patacas (US$100,000) and 180,000 patacas. M.G.

May 6, 2013

Macau

Record spending on cash handout The government’s wealth-sharing cheques will start going out in July, giving inflation a ‘slight’ jolt Stephanie Lai

sw.lai@macaubusinessdaily.com

his year’s cash handout will start on July 2, Executive Council spokesperson Leong Heng Teng has said. Mr Leong told a press conference on Friday that the government had not considered ending the scheme, which is one of several measures it uses to share economic growth. Chief Executive Fernando Chui Sai On had “mentioned several times that sharing economic growth means a series of inputs, including a higher inputs into education resources, the pension system, central savings and also the cash handout”, Mr Leong said. The jolt to inflation caused by added consumption fuelled by the cash handout would be only “slight”, he said. The wealth-sharing scheme began in 2008 as a temporary measure to help people deal with inflation. Mr Leong said there were doubts if it was “proper or fair to give the same amount of cash handout” across the board. The government had provided additional aid to low-income earners and tax breaks to the middle class, he said. The scheme has broad public

support, although some academics have said the city’s wealth could be put to a better use by instituting a comprehensive welfare system. “If we still have a public budget surplus, why cancel the plan?” Mr Leong said. “The thought behind wealth sharing is that while our economy is growing steadily, the government wants to improve residents’ lives.”

Bumper figures Permanent residents would receive 8,000 patacas (US$1,000) and temporary residents 4,800 patacas this year, Mr Chui said in the 2013 Policy Address, delivered in November. The handouts will benefit 569,780 permanent residents and 68,112 temporary residents, official data show. The eldest people eligible will receive their cheques first and the youngest eligible will receive theirs by September 13. The government will spend more than 4.88 billion patacas on the scheme this year, about 5.91 percent of the expenditure it has budgeted

The elderly will be the first to receive this year’s cash handout, from July 2, said Leong Heng Teng

for this year. This year’s handout will be the biggest yet, up to 1.9 times bigger than 2008’s. When the scheme began, permanent residents received 5,000 patacas and temporary residents

3,000 patacas. Mr Leong said there was no formula for deciding the size of the handout each year. The chief executive decides how big it will be, basing his decision on the performance of the economy.

May19, 6, 2013 April 2013

Macau Brought to you by

Financial Monitor On the margin The current very low level of unemployment in Macau is one of the most distinctive features of the city’s economic environment. Both in relative and absolute terms, Macau may be considered as virtually without unemployment. Not all the unemployed share the same characteristics. Young people tend to be unemployed for only a short while. They are often looking for their first job. Statistics for the older unemployed are distorted by people that, in effect, retire early or give up searching for work. Others in this age bracket lack the skills that a modern economy requires. The most important part of the workforce is made up of workers that are mature but in their prime. This analysis looks three age groups in the prime of their working lives, among whom unemployment is almost negligible. In 2004, 7,600 of them were unemployed. Last year about half that number were unemployed.

Let’s communicate, Britain says

The chart shows unemployment in each age group gradually decreasing to begin with. The onset of the international financial crisis had hardly any effect on unemployment among workers aged between 25 and 44. It led to unemployment among workers aged between 45 and 54 increasing by 40 percent. But there were so few workers in this age bracket that the real effects were not substantial. Unemployment among workers aged between 45 and 54 fell quickly after 2010. Each of these trends underlines the tightness of the labour market. J.I.D.

Much needs to be done to improve communication between Macau and Britain, according to the new British consul-general in Hong Kong and Macau, Caroline Wilson. In an interview with Business Daily, Ms Wilson said she hoped more British investors would come here, as Macau was going through an “exciting” phase, with many new resorts and much new infrastructure lined up. But she said British businessmen might face some difficulties entering such a small market, as they had to break into established networks. Ms Wilson said the British Consulate-General would endeavour to enhance communication between Macau and Britain as part of its effort to attract more Britons to this part of the world. British companies would be able to learn more about what Macau had to offer, and Macau companies would be able to learn more about what Britain had to offer, she said. Luciana Leitão

leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

The content of this column is the work of Business Daily’s journalists.

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Number of unemployed aged 25 to 54 at the end of last year

Your predecessor as British consulgeneral said, before leaving office, that this was a great moment for UK-Macau relations. Do you agree? I do. One way I can prove that is that I just designated Macau as a high-value opportunity. Across the globe we have hundreds of highvalue opportunities, which the U.K. Trade and Investment body defines as the best opportunities globally. And we think the whole of Macau

is one. We have based that on the incredible rates of GDP growth and the incredible amount that is being spent on the development of new resorts. With these new resorts coming in the next few years, and with some of the associated infrastructure around that, plus the boost we expect the Hong Kong-Zhuhai-Macau bridge to give to development in Macau, we think this is an incredibly exciting time

for Macau. Also, it is a great time for British companies to come here. So we really want to encourage more British companies to come here and we recognise there are some issues around that in terms of getting information flowing better; in terms of getting people more acquainted with the British offer here in Macau; and getting British companies more familiar with what Macau is, as well. We have a

May 2013 April6,19, 2013

Macau in terms of transference of skills and management expertise from bringing in outside knowledge and expertise and allowing them to work with local talent. Ultimately you need a mix and a balance. While you can’t, maybe, have an entirely free market in such a small place, you do need a relatively liberal approach to ensure you get the very best expertise available for your projects. Is mainland China still an attractive place for British investment? It’s clearly not easy, but the potential is huge. We’re looking into innovative ways of working with China. That, for example, is why I’m going to come back to Macau in June, with a high-level delegation of British companies and the former lord mayor of London, Sir Michael Bear. We’re going to be working with the Chinese International Contractors Association because, we feel, by partnering with some of the big Chinese companies and Chinese contractors it will greatly help to aid flows of trade and investment. I agree that investing and working in China does require quite a specific approach. lot of work to do but we believe we can bring more business here. Ultimately it is going to be a real benefit to Macau as well, because we have fantastic expertise in the U.K. We’ve got some really wonderful niche products. For example, for the interiors of some of these resorts we could offer something really unique and really different. And we’ve also got some fantastic expertise: education, consulting, design and sustainability. We think it is a very important time for Macau. And the fact that Macau is an integral part of the Pearl River Delta – one of the fastest growing [regions] in China – we, again, feel is a gamechanger. Ten years ago Macau was just starting to develop all these big resorts and now it has entered a different phase. What are the main difficulties for a Briton seeking to do business in Macau? It’s quite a small market, so everybody knows each other. That can be an advantage, because if you know the right people you can get things done very quickly. But clearly it can also be a bit of a disadvantage, as people have got their established partners, their established ways of working, and it may be quite difficult to break into the market in some respects. Someone was just telling me about the food distribution and how it is quite controlled and dependent on what comes from Hong Kong, and it is difficult sometimes to get [food from] independent sources into Macau. It is also a fastmoving market, so people want instant responses. They want to be absolutely confident of their supply chain and they don’t want to spend a lot of time investigating products and sources. There are challenges around it, but we’re confident we can meet those challenges. We’ve got to work on it. One of the problems frequently pointed out by outside investors is the government’s restrictive policy regarding imported labour. Could this also pose an obstacle to British investment? Everybody understands that you have to try to protect the local market and protect local employment. There is equally a huge amount that can be gained

Why is it difficult to invest in the mainland? There are so many different sectors that one can’t really generalise. Obviously, manufacturing: if you’re in a high-tech industry, clearly there are issues around intellectual property protection. But the Chinese are often very keen on having that kind of manufacturing in China. In financial services, it is still quite protectionist.

People have got their established partners, their established ways of working, and it may be quite difficult to break into the market

The fact is that we’re working on all of these issues. It’s really about issues of market access, and they are issues that Hong Kong and Macau have as well. Hong Kong has the Closer Economic Partnership Arrangement to promote access to mainland China, and there is something similar in Macau. We’re looking to use all avenues to increase market access to the mainland, but obviously we recognise it’s a two-way process. The U.K. is now the number one destination for Chinese investment in Europe, and our prime minister wants to increase it and to ensure we maintain that position. It is said that we are entirely open, and that we are greatly open to Chinese investment, without any barriers. You’ve seen that with recent Huawei Technologies Co Ltd investment in the U.K. and other really important examples of investment in Heathrow Airport and so on, which are very important. We see it very much as two-way, and we want to grow the two-way trade flows between the U.K. and China to US$15 billion [120 billion patacas], the figure our prime minister has set by 2015.

How to overcome copyright infractions in mainland China? What I can say on intellectual property is that we are working with colleagues and lawyers, also, in Hong Kong, who are working with colleagues in the mainland to improve protection to intellectual property in the mainland. There are lots of innovative ideas for increased protection to intellectual property. Ultimately it is going to be resolved when China itself is designing and inventing more and has more of an interest in protecting it, when Chinese companies have an interest in protecting their own designs and inventions. We’re already starting to see that with so many brilliant Chinese scientists, computer programmers and so on, in particular the ICT sector, that they will also have an interest in protecting the IP. In which sectors in Macau can we expect a bigger presence of British investors? I would like to see British businesses working on engineering, consulting, design, interior [design], material supply, education, skills, luxury goods, retail. There is a huge number of areas. Particularly after the Olympics, everybody has seen what an incredible record the U.K. has on everything from sustainable engineering, delivery of such a mega-project as the Olympics, brilliant design of the venues, but also brilliant involvement of people in terms of getting volunteers. Seventy-thousand volunteers

in the London games is just an extraordinary number. It seems to me that in Macau there is a great thirst in the different resorts – and also the people themselves – for new culture and creative offerings. You often see the resorts, each year they try to put on a new display. I’ve just seen the MGM has the biggest fish tank in Macau. There is a great scope in Macau for new creative input, and this is something that the U.K. is incredibly good at, if you look at the London games and what we did with that. I gather that Macau is now also keener to develop a stronger cultural platform for itself. Again, this is something in which the U.K. has got a lot to contribute. At the moment, the automotive sector, I gather, is doing quite well, as there are lot of imports. Scotch whisky is doing very well. Certain luxury goods are doing very well. All those types of sectors are doing quite well. What will be the consulate’s strategy to attract more British businesspeople here? I definitely want us to be more agile digitally. I talked in the beginning about communication and two-way communication, a better relay of information about Macau back home and also better information back to Macau of the U.K. offer. I really want to use that platform to do some events, maybe some “webinars”, to actually inform British companies and also some potential clients here on how we can work together.

Governo da Região Administrativa Especial de Macau Direcção dos Serviços de Identificação

Requerimento para a emissão do certificado de associação para efeitos das eleições para a Assembleia Legislativa – 2013 A Direcção dos Serviços de Identificação (DSI) solicita a atenção das associações e organizações, que pretendam requerer o certificado de associação para efeitos das eleições para a Assembleia Legislativa – 2013, para o seguinte: 1. As associações e organizações devem formalizar, atempadamente, junto da DSI, o requerimento para a emissão do certificado de titulares dos órgãos sociais para efeitos das eleições para a Assembleia Legislativa – 2013. Aos requerimentos apresentados já com todos os documentos necessários no dia 18 de Junho de 2013 ou antes desta data, será garantida a emissão do respectivo certificado antes do dia 28 de Junho de 2013, data em que termina o prazo de entrega do referido certificado ao SAFP para o “Pedido de Reconhecimento de Constituição de Comissão de Candidatura”. 2. Caso queiram solicitar o referido certificado para ser entregue no SAFP para a apresentação da relação dos votantes da pessoa colectiva, as associações ou organizações devem dirigir-se, quanto antes, à DSI para formalizar o requerimento da emissão do certificado. Aos requerimentos apresentados e devidamente instruídos no dia 22 de Julho de 2013 ou antes desta data, será garantida a emissão do certificado antes do dia 1 de Agosto de 2013, data em que termina o prazo de entrega do referido certificado ao SAFP para efeitos da inscrição dos votantes de pessoa colectiva. 3. O certificado dos titulares dos órgãos sociais poderá ser usado simultaneamente para fins indicados nos pontos n.º 1 e n.º 2, isto é, caso as associações ou organizações tenham requerido o respectivo certificado para a instrução do “Pedido de Reconhecimento de Constituição de Comissão de Candidatura”, não é necessário requerer outro certificado para a inscrição dos votantes de pessoa colectiva. 4. Para os requerimentos apresentados depois das datas acima indicadas ou com documentação incompleta, a DSI vai acompanhá-los com o maior esforço. 5. Do certificado a emitir constará somente a relação dos titulares dos órgãos sociais em efectividade de funções em 11 de Março de 2013. Caso a acta da reunião apresentada no requerimento do certificado demonstre que os actuais membros do corpo gerente das associação ou organizações iniciaram as suas funções depois de 11 de Março de 2013, a respectiva acta será considerada inaplicável. 6. O pedido para emissão do certificado sobredito faz-se mediante: • O preenchimento do impresso próprio para “Pedido de Certificado de Associação” fornecido pela DSI (pode ser obtido através do website da DSI : http://www.dsi.gov.mo); • O pedido é assinado pelo presidente da assembleia geral ou da direcção da associação requerente ou pelo seu procurador, e aposto o carimbo da associação; • O pedido deve ser acompanhado dos seguintes documentos: - Acta da sessão da assembleia geral para eleições dos titulares dos órgãos sociais; - Fotocópias dos documentos de identificação dos titulares dos órgãos sociais; - Procuração, quando o pedido for assinado pelo representante designado pelo presidente da assembleia geral ou da direcção da associação requerente. Não é necessário a entrega dos documentos acima referidos se tenham já efectuado a actualização do registo dos mesmos na DSI, entretanto podem as associações ou organizações requerentes juntá-los novamente ao requerimento para evitar morosidade, caso hajam erros nos documentos anteriormente apresentados Para mais informações sobre o requerimento do certificado de associação destinado às eleições para a Assembleia Legislativa, podem ligar para o número 83940579. Direcção dos Serviços de Identificação, a 22 de Abril de 2013. O Director, Lai Ieng Kit

May19, 6, 2013 April 2013

Macau

MGM China net revenues rise 6 percent in Q1 ‘Cost control, improved product mix’ also helped EBITDA margin: analyst Michael Grimes

michael.grimes@macaubusinessdaily.com

MGM Macau

acau casino operator MGM China Holdings Ltd earned net revenue of US$748 million (5.98 billion patacas) in the first quarter, a six percent increase year-on-year. Adjusted earnings before interest, taxation, depreciation

and amortisation (EBITDA) were US$180 million, a 10 percent increase over the same period a year earlier. The firm said in a Hong Kong filing that was mainly due to increased revenue from main floor table games and slots. Turnover at MGM China’s VIP

tables rose 15 percent from a year earlier. Main floor table volumes increased 26 percent and for slot machines by 19 percent, the parent company MGM Resorts International said in a filing in the United States. The Macau unit had operating income of US$99 million compared

with US$68 million a year earlier, it added. “All segments of MGM China’s business (VIP, mass tables, and slots) continue to grow generally at or above market-wide rates, which is impressive in the context of being a single asset operator that is capacityconstrained on the Macau peninsula,” said Union Gaming Research Macau in a client note. “The EBITDA margin improved to 26.2 percent for this quarter (compared to 24.3 percent in the fourth quarter),” said Kenneth Fong of J.P. Morgan in Hong Kong in another note. “We believe this is due to a combination of firstly, high VIP win rate for in-house VIP business; secondly, good cost control; and thirdly, improved product mix,” added Mr Fong. MGM continues to outperform peers on Macau’s peninsula even as it faces competition from Cotai casinos, George Choi, a Hong Kong-based analyst at Citigroup Inc. said in his research note on the quarter’s results. Grant Bowie, chief executive of MGM China, stated on the parent firm’s earnings conference call that MGM China had completed its tender process for the main contractor on MGM Cotai. The project – recently priced at US$2.6 billion – broke ground on February 27 and was on schedule to open “in the first half of 2016,” said Mr Bowie Daniel J. D’Arrigo, chief financial officer of MGM Resorts said on the call that at the end of the first quarter MGM China had cash of approximately US$565 million, debt of roughly US$553 million and an adjusted leverage ratio of less than one, “based on their trailing 12-month EBITDA”. MGM China paid a US$500 million dividend in March, US$255 million of which was retained by the company’s 51 percent owner MGM Resorts International. A total of US$245 million was distributed to non-controlling interests. Pansy Ho Chiu King, a daughter of former Macau gaming monopolist Stanley Ho Hung Sun, owns 27 percent of MGM China according to recent filings. With Bloomberg News

Rise of ‘premium mass’ slot players MGM Macau recognised the market opportunity and is making it pay

he ‘premium mass’ phenomenon has spread to slot machine play in Macau, indicated Grant Bowie, chief executive of MGM China Holdings Ltd, during the first quarter earnings call. Slot machine gaming volume at MGM Macau improved 28 percent year-on-year in the first quarter – making the venue one of the strongest slot performers among the six Macau concessionaires and sub-concessionaires. Gross gaming revenue from slots grew by 19 percent at MGM Macau, due to the venue’s hold rate reducing to 5.1 percent from 5.5 percent a year earlier. Customer segmentation in slots doesn’t have precise equivalence to customer segmentation in table play. Casino operators in Macau have not so far adopted a credit-based junket system for high spending slot players. But the Macau casinos are now recognising an emerging group of mainly Chinese players that are part way between ‘mass’ and ‘VIP’

in terms how much they drop in the machines. To keep spending, they are looking for fresh incentives and rewards from the casinos. Within the U.S. market, MGM China’s parent MGM Resorts International is noted for having one of the most effective customer relationship management systems in the casino industry. “…what we’ve been doing is continuing to build out the midmass, where we’ve seen some development and growth,” said Mr Bowie in response to an analyst’s question about MGM Macau’s slot performance in the first quarter. “MGM China continues to be among the market leaders in this [slot] segment with notably higher win per day than most of the peer group (MGM China slot win per day is in excess of US$600 during 1Q13 versus market average of US$297),” said Union Gaming Research Macau in a note. “We believe a notable amount

…what we’ve been doing is continuing to build out the midmass, where we’ve seen some development and growth Grant Bowie, chief executive, MGM China Holdings

of MGM China’s slot volume is derived from VIP slots, but are encouraged by continued strength on the mass-market slot floor and the company’s foray into stadium-style

ETGs [electronic table games]. We are forecasting slots GGR to grow in the mid-teens at MGM China during 2013,” added Union Gaming. M.G.

May 2013 April6,19, 2013

Greater China HK PMI lowest in seven months The HSBC Holdings Plc Hong Kong Purchasing Managers Index fell to a seven-month low of 49.9 in April, indicating the first contraction in manufacturing activity in the city since the third quarter last year. A reading below 50 indicates a contraction in activity. April’s result was down from 50.5 in March. April’s PMI underscores the effect on Hong Kong’s economy of weakening mainland demand, Donna Kwok, HSBC’s Greater China economist, said. “Cooler private sector activity did offer some respite, however, as output price pressures fell for the first time since September,” Ms Kwok added.

EU mulls duties on Chinese solar panels

China Services PMI a little weaker

Provisional levies may come into force by June 6 Robin Emmott and Francesco Guarascio

Growth momentum to remain relatively soft – analyst

China exported about US$27.5 bln in panels to the EU in 2011

he European Union’s trade chief will recommend placing punitive import duties on billions of euros of solar panels from China, people close to the matter say, in a protectionist move that risks upsetting Beijing. The case, the biggest the Commission has launched, is a delicate one for Brussels. Europe wants to protect its manufacturers such as Germany’s SolarWorld AG against cheap imports but also needs China, the EU’s second largest trading partner, to help the bloc emerge from recession. Trade Commissioner Karel De Gucht is expected to tell his fellow EU commissioners on Wednesday that Brussels should levy the tariffs to guard against Chinese production that quadrupled between 2009 and 2011 to more than the entire global demand. EU producers say Chinese companies have captured more than 80 percent of the European market from almost zero a few years ago, prompting the European Commission to act against what it terms dumping. Europe accounted for about half of the global solar market last year, which was worth US$77 billion, according to research firm IHS. “De Gucht is ready to go ahead,” said one person close to the decisionmaking. “The Commission has a very solid case.” SolarWorld’s shares closed up 8.1 percent at 0.68 euro cents while U.S.-listed Chinese solar firms traded lower. China’s Trina Solar was down

5.1 percent at US$5.03, Yingli Green Energy off 5.95 percent at US$2.37 and Suntech Power Holdings 6 percent lower at US$0.62.

Massive oversupply The Commission started an investigation in September when it judged there were grounds to take up a complaint by a group of mainly German and Italian companies. They accuse China of subsidising its producers with easy credit to push output to more than 20 times the level of Chinese consumption. Mr De Gucht now believes there is clear evidence of dumping on the EU market, and following Wednesday’s meeting in Brussels, will propose the measures at a gathering of trade specialists from all EU countries. They are expected to back them, diplomats say, allowing the provisional levies to come into force by June 6, the deadline for a decision under EU rules. However, the move to levy duties would still leave the door open for a negotiated solution with Beijing before December and avoid levies that could be imposed for up to five years. The United States levied its own duties on Chinese solar energy products last year, arguing that China’s rapid expansion into the industry has created a massive oversupply. Germany, the United States and China are the world’s biggest solar markets and companies are in a race to win contracts as countries seek to

limit pollution and global warming. The initial EU duties on Chinese solar panels are likely to be set at 30 percent and above, which would make Chinese exports far less attractive in Europe, said one person involved. Prices for Chinese-made panels are as much as 45 percent lower than those made in Europe, industry executives say. The European Commission declined to comment. China, which had barely any solar production capacity a decade ago, exported more than 21 billion euros (US$27.5 billion) in panels to the European Union in 2011. Reuters

KEY POINTS China’s solar panel output is more than entire world demand EU producers say China has captured 80 pct of market SolarWorld shares jump, Chinese solar firms down in U.S. trade

hina’s service industries expanded at a slower pace last month, adding to the drag on growth in the world’s second-biggest economy after manufacturing lost momentum. The non-manufacturing Purchasing Managers’ Index fell to 54.5 from 55.6 in March, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement on Friday in Beijing. Readings above 50 indicate expansion. Slowing growth in services showed that subdued expansion in manufacturing has begun to feed through to the rest of the economy, though the services industry has so far weathered the global slowdown much better than the factory sector. “New orders for the services industry dropped below 50, lower than the historical average levels. The prices index also declined relatively sharply, showing operating activity is moderating,” said Cai Jin, a vice president at CFLP, the China Federation of Logistics and Purchasing. The CFLP conducts the official survey together with China’s National Bureau of Statistics. “We should pay attention to supporting service industries and expanding consumption demand to enhance their role in supporting overall stable economic growth,” Mr Cai said in a statement accompanying the data. Two recent PMIs showing cooling in manufacturing sector growth have already suggested the euro zone recession and sluggish U.S. demand may be risks to China’s economic recovery, though economists see a mild pickup this year, aided by government support. The official PMI’s sub-index for construction fell to 62.4 in April from 62.5 in March. The new orders sub-index fell to 50.9 from 52, while the index for new orders excluding construction dropped to 49.8 from 51.4 in March. Firms in catering, transport and maintenance had fewer new orders in April, while new orders for hotels, telecommunications, broadcasting, television and satellite transmission services fared better, the NBS said. “The PMI adds to downside risks for China and the region,” said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong. “The reading suggests that growth momentum will remain relatively soft” in the second quarter, and that the economy “has shifted to a weaker growth trajectory,” he said. Reuters

May 6, 2013

Greater China New World to spin off hotels in listing New World Development Co., the Hong Kong builder controlled by billionaire Cheng Yu Tung, received permission from the city’s stock exchange to proceed with the separate listing of the company’s local hotels. The three hotels will be listed by means of “stapled” securities including shares and preferred shares in NW Hotel Investments Co. and units in NW Hotel Investments trust, according to a Hong Kong stock exchange filing. The company said it hadn’t determined how much it plans to raise through the sale. New World may seek as much as US$1 billion in a hospitality listing, two people with knowledge of the matter said in March. After the listing, New World will hold at least 35 percent of the stapled securities, and together with its parent, Chow Tai Fook Enterprises Ltd, will own more than 50 percent. New World will consolidate the hotel company’s results into its own financial statements and said it doesn’t need shareholder approval to proceed.

Striking dockers reject latest offer Striking dock workers at billionaire Li Ka Shing’s Hongkong International Terminals Ltd rejected a wage offer by contractors as the employers said they will no longer take part in negotiations to settle the 39-day labour dispute. The workers won’t accept a 9.8 percent wage increase offered by four contractors at the port, Ho Wai Hong, representative of the Union of Hong Kong Dockers, said yesterday. The contractors won’t negotiate further, according to an e-mailed statement jointly issued by the four companies. The stalemate extends the labour revolt which began on March 28 when about 450 dock workers, crane operators and stevedores walked off the job to demand higher wages and better working conditions. “They’re showing a lack of sincerity,” Mr Ho said of the contractors’ latest offer. “This is their one-sided move and the workers aren’t accepting at this stage because it wasn’t reached through negotiation with the union.” Hongkong International had offered a HK$4,000 (US$516) bonus to workers who returned to work by May 6. The company will consider the union’s feedback on occupational safety issues and will make improvements to work arrangements, according to a statement.

Provinces report slower growth Growth in China’s less-developed inland provinces weakened last quarter while expansion in some coastal areas picked up and all regions reported faster gains than nationwide figures, local-government data showed. Expansion in southwestern Sichuan was 10.2 percent in the first quarter, compared with 2012 full-year growth of 12.6 percent, while neighbouring Guizhou’s gross domestic product gains eased to 12.6 percent from 2012’s 13.6 percent. Eastern Zhejiang reported 8.3 percent growth in the first three months after 8 percent in 2012 and exportdependent Guangdong showed 8.5 percent, up from 8.2 percent last year. The reports indicate the gap in growth speeds between inland and more-industrialised coastal regions may be narrowing as the government slows infrastructure investment while the south and east benefit from higher exports. “China’s central and western regions are more reliant on infrastructure investment than coastal areas,” said Xu Gao, chief economist for Everbright Securities Co. in Beijing. “As credit gradually feeds into investment projects, growth in western areas may pick up again – domestic demand, not external, will decide China’s growth prospects.” Bloomberg News

Protest in China at chemical plant Opposition to CNPC’s plans underscores growing environmental concern

undreds of people took to the streets of the Chinese city of Kunming on Saturday to protest against the planned production of a chemical at a refinery, in the latest show of concern over the effects of rapid growth on the environment. China’s increasingly affluent urban population has begun to object to the model of growth at all costs that has fuelled the economy for three decades, with the environment emerging as a focus of protests. Photographs on Weibo, China’s version of Twitter, showed a crowd of protesters in the centre of the southwestern city, carrying banners protesting against production at the planned plant of paraxylene (PX), a chemical used in making fabrics and plastic bottles. Some estimated the crowd was up to 2,000-strong but the official Xinhua news agency said in a report more than 200 people had gathered to protest, many wearing masks printed with slogans including “no PX in Kunming”. They attracted nearly 1,000 onlookers, Xinhua said.

“Give me back a beautiful Kunming. We want to survive, we want health, get PX out of Kunming”, read one of the banners, seen in a photo posted on Weibo. There were no reports of any violence at the protest. China National Petroleum Corp, the country’s largest oil and gas producer and supplier, announced in February that the National Development and Reform Commission (NDRC) had approved the refinery project at Anning, just outside Kunming. The refinery would produce gasoline, diesel, other various chemicals and fertilisers as well as PX, the company said in its submission to the NDRC. But CNPC was also the target in another rally in Chengdu, capital of Sichuan province. The company defended plans for its chemical plant, saying it will improve air quality by providing higher-standard oil products and curbing car-emission pollutants. CNPC has “adopted various scientific measures” to ensure there won’t be any negative impact on

HKMA chief warns of overheating risk Rising levels of household debt, high consumer spending could put families in a vulnerable financial position Simon Lee and Stephanie Tong

Hong Kong’s consumption and personal-debt growth have consistently outpaced overall economic growth Norman Chan, chief executive, HK Monetary Authority

ong Kong’s economy is at risk of overheating after household debt rose to a record 61 percent of gross domestic product, said Norman Chan, chief executive of the Hong Kong Monetary Authority. “Hong Kong’s consumption

and personal-debt growth have co n s i s ten tl y o u tp a c e d o v e r a l l economic growth,” Mr Chan told lawmakers, citing risks to “macroeconomic stability”. While the housing market has shown signs of cooling after extra curbs in February, it’s too early to

Hundreds of people have rallied in Kunming

the environment from the project near the provincial capital Chengdu, an unnamed spokesman in charge of environmental protection at the company said in an interview posted yesterday on Chinawestnews.net, a news portal affiliated with the Sichuan government. Thousands of police officers and security staff were deployed in Chengdu after word spread on the Internet about a protest against the planned facility in Pengzhou, about 40 kilometres (25 miles) north of the city, the Associated Press reported. Last November, the eastern city of Ningbo suspended a petrochemical project after days of street protests. The year before, big protests against a PX plant in the northeastern city of Dalian forced the city government to suspend it. Reuters/Bloomberg News

say that it’s in a downward cycle, he said. A declining current-account balance is a “warning signal” that consumption and the economy are at risk of overheating, he added. Hong Kong home prices, the most expensive among major global cities, last month fell the most in three years after the government imposed its harshest measures yet to curb prices and as lenders raised mortgage rates for the first time since 2011. Mr Chan’s comments come amid signs that the global economic recovery is faltering, with industrial and manufacturing data from China, Japan and South Korea less than estimates. In December, the HKMA said the overheated property market is increasingly disconnected from the rest of the economy. Sanford C. Bernstein H.K. Ltd said prices could fall as much as 25 percent after the government stepped up measures to curb an asset bubble and banks raised mortgage rates. The government on February 22 doubled the stamp duty on all property transactions higher than HK$2 million (US$258,000). The HKMA has told banks to maintain the risk weighting for new home loans at a minimum of 15 percent to help protect them against a drop in home values. Mr Chan cited an “ultra-low interest rate environment” as a factor in the economic risk, adding: “When property values appreciate, people think they have more wealth even though they haven’t yet sold the asset.” In a February briefing of lawmakers, Mr Chan cited household debt to GDP ratios of 58 percent to 59 percent in the third and fourth quarters of last year. He said the monetary authority will monitor whether any more property measures are needed. Bloomberg News

May 6, 2013

Asia South Koreans exit joint plant The last remaining South Korean workers at an industrial zone jointly run with North Korea left the complex, bringing activities to a halt for the first time since the park opened nearly a decade ago. All seven workers returned to South Korea, Unification Ministry spokeswoman Park Soo Jin said. North Korea had prevented them from leaving the Gaeseong complex earlier this week due to a dispute over unpaid wages and bills. “The very existence of Gaeseong used to ease the political tension between the two Koreas, so shutting it down even temporarily means higher geopolitical risk,” Cho Bong Hyun, a research fellow at IBK Economic Research Institute, said.

Philippines: ‘No plans’ for capital controls The Philippines has no plans to impose capital controls for now, its central bank governor said, as the nation tries to manage inflows spurred by faster growth. “We are not considering the imposition of capital controls right now,” Bangko Sentral ng Pilipinas Governor Amando Tetangco said in an interview. “So we rather see if there is a need to sharpen the tools that we have in the enhanced toolkit as a response to further inflows of capital.” Standard & Poor’s raised the Philippines’ rating this week to investment grade after a similar upgrade by Fitch Ratings in March, moves that may lure foreign investors.

Bangladesh: ILO to propose labour reforms Bangladesh’s lawmakers will receive proposals for labour-law reforms in parliament after a garment-factory collapse that killed more than 500 people, the International Labour Organization said. The package will call for improved worker protection and the right to collective bargaining, the Geneva-based organisation said in a statement on its website. The ILO and its partners will “assess by the end of 2013 the structural building safety and fire safety of all active export-oriented ready-made garment factories in Bangladesh, and initiate remedial actions, including relocation of unsafe factories,” it said.

Asian currencies complete best rally since September Asian currencies rose for a fourth week, the longest winning streak in seven months, on speculation central banks will provide more policy stimulus after data from China to the U.S. South Korea’s won reached a seven-week high and India’s rupee touched a twomonth high. “The rally is driven by liquidity and expectations that policy makers will cap the downside,” said Roy Teo, a currency strategist at ABN Amro Bank NV in Singapore. The Philippine peso touched a three-week high, while Thailand’s baht was the biggest loser last week, dropping 1.2 percent to 29.60 per dollar on concern the authorities may intervene to stem gains.

India cuts rates to stimulate growth Policy-easing room practically non-existent, says RBI governor

ndia’s central bank cut interest rates on Friday by a quarter point for the third time since January but said there is little room for further policy easing, disappointing investors and putting the onus on the government to revive a moribund economy. The Reserve Bank of India trimmed the repo rate to 7.25 percent, its lowest since May 2011, and kept the cash reserve ratio (CRR) for banks unchanged at 4 percent, in line with expectations. Many in the market had been hoping for more aggressive easing and a less hawkish tone from RBI Governor Duvvuri Subbarao as India grapples with economic growth that slowed to about 5 percent in the fiscal year that ended in March, its weakest in a decade. Instead, he warned that the risk of rising prices persists despite a recent sharp decline in wholesale price index (WPI) inflation, and said a high current account deficit poses the biggest risk “by far” to the Indian economy. India’s central bank governor stressed the nation has almost no space left to ease monetary policy further. “Baseline case is that the possibility of easing is practically non-existent,” Mr Subbarao said in a Bloomberg TV India interview. Any expectation that the central outlook is for “another salvo” of loosening is “inaccurate,” he said, adding inflation and the current- account deficit will determine the path of monetary policy. “The balance of risks stemming from the Reserve Bank’s assessment of the growth-inflation dynamic yields little space for further monetary easing,” he said in the policy statement. Several economists said the RBI may still opt for one more rate cut in the coming months. “In essence, the guidance from the central bank is that the correction

Baseline case is that the possibility of easing is practically non-existent Duvvuri Subbarao, Governor, Reserve Bank of India

in the inflation and current account position is more cyclical rather than structural,” said Radhika Rao, economist at DBS Group Holdings Ltd in Singapore. “Some sacrifice by way of slower growth seems inevitable then,” she said.

Stabilising flows Credit growth in India slowed to a roughly three-year low at 13.9 percent as of April 5, in part because banks, faced with expensive deposit costs amid tight cash conditions, have failed to pass along most of the rate cuts to borrowers despite prodding from the central bank. Mr Subbarao however was hopeful that banks would lower rates during the next three to six months by amounts similar to the RBI’s total rate cuts of 75 basis points so far in 2013. He has repeatedly called on the government to take measures to ease supply constraints in the economy and encourage investment. Finance Minister P. Chidambaram has sought to revive investor

Japan, Asean to boost financial ties

apan said it will boost financial cooperation with Southeast Asian nations, support their bond markets and make it easier for Japanese companies to raise funds in local currencies. The government has tapped its reserves to invest in bonds issued by major economies in Southeast Asia, Japan’s Finance Minister Taro Aso said, part of a strategy aimed at strengthening regional bond markets. Finance ministry officials said the country had purchased a small, unspecified amount of the dollardenominated Pan Asia Bond Index Fund, investing in local currency bonds issued by Indonesia, Malaysia, Philippines, Singapore and Thailand. Mr Aso was speaking after the first joint meeting of finance ministers and central bank governors from both

sides as Japan seeks to take advantage of emerging Asian growth to revitalise its own economy. “I hope Japan and ASEAN countries will build a win-win relationship to achieve economic growth and that it will contribute to growth and development of Asia as a whole,” Mr Aso told a news conference after the meeting. Japan hopes its purchases of the index fund will catalyse private investment in Asian bond markets, which are far less liquid than those in the developed world. Tokyo may consider future purchases depending on circumstance, the officials said. To stave off a recurrence of financial crises in the region, Japan and the major ASEAN economies will consider enhancing bilateral swap arrangements to provide extra

sentiment since taking office last year but is hamstrung by fractious coalition politics and an increasingly obstructive opposition as national elections loom within a year. “Extraordinary quantitative easing” in advanced nations has helped to finance the current-account imbalance, Mr Subbarao said. At the same time, any unwinding of money-printing policies, or other shocks to the global economy, may affect capital flows to India, he said. The current-account gap swelled to US$32.6 billion in the quarter ended December 31, or a record 6.7 percent of gross domestic product, stoked by gold and oil imports and subdued exports. “It’s reasonably probable, if not in 2013, but certainly in 2014,” Mr Subbarao said, referring to the possibility of outflows. “We got to be prepared for it and the way to prepare for it is to reduce the currentaccount deficit and increase the flow of non-debt, creating stable capital flows into the economy.” Reuters/Bloomberg News

liquidity should their currencies come under attack. Japan has already concluded swap arrangements with Indonesia and the Philippines, and it is considering reentering agreements with Malaysia, Thailand and Singapore which expired in recent years. Tokyo hopes the bilateral arrangements would supplement a multilateral emergency currency protection fund which sets rigid conditions tied to bailout demands from the International Monetary Fund. To help Japanese firms raise funds in local currency, Japan and ASEAN will consider a scheme in which Japanese banks would receive funds from central banks by offering Japanese government bonds as collateral through the Bank of Japan. The agreement comes as the regional cooperation mood has soured, with a meeting of finance chiefs from China, Japan and South Korea called off amid renewed tension over Japanese ministers’ visits to a shrine for war dead. Reuters

May 6, 2013

Markets Hang Seng Index NAME

PRICE

DAY %

VOLUME

AIA GROUP LTD

34.2

-0.2915452

15323835

ALUMINUM CORP-H

2.87

0.3496503

7949080

BANK OF CHINA-H

3.65

0.8287293

308031990

BANK OF COMMUN-H

6.06

-0.4926108

27276361

BANK EAST ASIA

31.4

1.290323

1531994

12.78

1.913876

11926451

ESPRIT HLDGS

BELLE INTERNATIO

NAME CHINA UNICOM HON CITIC PACIFIC CLP HLDGS LTD CNOOC LTD COSCO PAC LTD

PRICE

DAY %

VOLUME

11.12

-0.3584229

13959622

9.51

1.602564

6078836

SANDS CHINA LTD SINO LAND CO SUN HUNG KAI PRO

979548

10.92

2.439024

7390178

TENCENT HOLDINGS

271

-0.8778347

3983208

TINGYI HLDG CO

2690199

-1.300813

7260090

694566

CHEUNG KONG

116.1 -0.08605852

3826833

HENDERSON LAND D

56.05

-0.7085917

1551254

21.05

-0.4728132

27533417

0.2087683

2092958

CHINA MOBILE

80.4

0.5

1868880

23.35

0.6465517

4550414

HONG KONG EXCHNG

131.3

0.690184

3994576

HSBC HLDGS PLC

85.25

0.1174398

9757048

84.8

0.1180638

8593688

HUTCHISON WHAMPO

85.1

0.4129794

6147362

23.85

-0.4175365

10477635

IND & COMM BK-H

5.43

0.1845018

201563162

CHINA PETROLEU-H

8.37

-0.1193317

61390062

LI & FUNG LTD

1.010101

19311641

CHINA RES ENTERP

26.85

1.897533

5140450

MTR CORP

31.95

1498172

CHINA RES LAND

23.5

-0.6342495

8255557

NEW WORLD DEV

13.92

3.264095

24234600

CHINA RES POWER

25.4

0.1972387

5355208

PETROCHINA CO-H

9.53

-1.345756

88699806

CHINA SHENHUA-H

26.7

-1.111111

14533822

PING AN INSURA-H

61.5

0.4081633

14002145

CHINA OVERSEAS

3436023

0.6622517

30.35

CHINA LIFE INS-H

5567063

0.5454545

98.8

128.8

CHINA MERCHANT

1.579779

110.6

SWIRE PACIFIC-A

HANG SENG BK

HONG KG CHINA GS

12.86

3859305

HANG LUNG PROPER

HENGAN INTL

11753231

0.7905138

1540226 47948320

0.248139

10.2

11405193

155517152

1321145

40.4

1427022

0.3738318

-1.709402

VOLUME

37187593

0.1481481

-0.1545595

1.133333

0.2191381

26.85

6.46

DAY %

75.85

0.1412429

13.52 5.75

PRICE

68.6

BOC HONG KONG HO

CHINA CONST BA-H

POWER ASSETS HOL

14.18

CATHAY PAC AIR CHINA COAL ENE-H

NAME

20.95

1.452785

WANT WANT CHINA

12.1

0.1655629

7217378

WHARF HLDG

70.5

0.284495

3483582

MOVERS

2 22860

INDEX 22689.96 HIGH

22856.64

LOW

22592.93

52W (H) 23944.74 22590

(L) 18056.4 30-April

3-May

Hang Seng China Enterprise Index NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

3.72

0.5405405

108816693

AIR CHINA LTD-H

6.51

1.71875

10665074

ALUMINUM CORP-H

2.87

0.3496503

ANHUI CONCH-H

28.2

BANK OF CHINA-H

PRICE

DAY %

VOLUME

CHINA PACIFIC-H

27.3

5263750

CHINA PETROLEU-H

8.37

-0.1193317

61390062

7949080

CHINA RAIL CN-H

7.81

0.2567394

5269950

0.1776199

9507411

CHINA RAIL GR-H

4.07

-0.7317073

11375370

3.65

0.8287293

308031990

CHINA SHENHUA-H

26.7

-1.111111

14533822

BANK OF COMMUN-H

6.06

-0.4926108

27276361

CHINA TELECOM-H

3.91

-0.255102

29554831

BYD CO LTD-H

28.5

3.636364

5104650

DONGFENG MOTOR-H

11.92

3.114187

11275410

CHINA CITIC BK-H

4.31

0.4662005

17515002

GUANGZHOU AUTO-H

6.23

-0.4792332

4638844

CHINA COAL ENE-H

5.75

-1.709402

47948320

HUANENG POWER-H

9.08

1.22631

13976100

CHINA COM CONS-H

7.39

0.4076087

10668821

IND & COMM BK-H

5.43

0.1845018

201563162

CHINA CONST BA-H

6.46

-0.1545595

155517152

JIANGXI COPPER-H

15.08

1.480485

11240559

CHINA COSCO HO-H

3.22

1.898734

5185657

PETROCHINA CO-H

9.53

-1.345756

88699806

21.05

-0.4728132

27533417

PICC PROPERTY &

9.91

0.3036437

12055800

7.2

0.6993007

15998130

PING AN INSURA-H

61.5

0.4081633

14002145

CHINA MERCH BK-H

16.42

0.6127451

9677335

SHANDONG WEIG-H

7.52

3900000

CHINA MINSHENG-H

10.24

3.225806

48256762

SINOPHARM-H

23.25

0.4319654

3522000

0.3344482

55338948

TSINGTAO BREW-H

51.95

-0.2879079

731732

15.28

1.595745

4586046

WEICHAI POWER-H

27.7

0.9107468

2633585

CHINA LIFE INS-H CHINA LONGYUAN-H

CHINA NATL BDG-H CHINA OILFIELD-H

NAME

PRICE

DAY %

VOLUME

7.83

0.2560819

23552200

2.3

1.321586

50267470

ZOOMLION HEAVY-H

7.65

0.5256242

12768931

ZTE CORP-H

13.3

-1.917404

6063189

YANZHOU COAL-H ZIJIN MINING-H

MOVERS

2 10950

INDEX 10845.99 HIGH

10944.52

LOW

10762.41

52W (H) 12354.22 10760

(L) 8987.76 30-April

3-May

Shanghai Shenzhen CSI 300 NAME

PRICE

DAY %

VOLUME

6.19

1.309329

7495807

CITIC SECURITI-A

12.86

3.044872

121790793

11585308

CSR CORP LTD -A

4.02

2.030457

24425010

1.546392

25265314

DAQIN RAILWAY -A

7.03

43594852

8.99

1.812005

44574557

DATANG INTL PO-A

4.43

1.83908

2.89

1.048951

45797545

EVERBRIG SEC -A

14.37

4.69

1.077586

60095294

GD MIDEA HOLDI-A

10.34

2.07305

18086955

GD POWER DEVEL-A

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.72

0.7407407

104708757

AIR CHINA LTD-A

5.4

2.661597

10537779

3.96

1.799486

ANHUI CONCH-A

17.73

BANK OF BEIJIN-A BANK OF CHINA-A

ALUMINUM CORP-A

BANK OF COMMUN-A BANK OF NINGBO-A

NAME CHONGQING WATE-A

NAME

PRICE

DAY %

VOLUME

QINGHAI SALT-A

22.05

0.2728513

11314181

SAIC MOTOR-A

15.26

2.416107

25402122

SANY HEAVY INDUS

9.38

0.2136752

28445997

SHANDONG GOLD-MI

32.13

4503942

7174625

SHANG PHARM -A

11.99

1.955782

9899607

5.120702

36815557

SHANG PUDONG-A

10.01

1.934827

109373480

14.59

-0.4774898

27313008

SHANGHAI ELECT-A

3.75

1.078167

2023509

2.92

1.74216

51346878

SHANXI LU'AN -A

15.8

1.023018

13304463

BAOSHAN IRON & S

4.88

1.244813

34232262

GEMDALE CORP-A

7.27

1.112656

50483664

SHANXI XISHAN-A

10.48

1.158301

9925139

BEIJING TONGRE-A

23.39

0.6454389

9958042

GF SECURITIES-A

13.62

2.947846

32853056

SHENZEN OVERSE-A

5.9

0.3401361

49207098

GREE ELECTRIC

26.63

2.265745

15716478

SICHUAN KELUN-A

63.4

4.36214

723871

GUANGHUI ENERG-A

18.29

3.216704

24017599

SUNING COMMERC-A

5.79

1.223776

44046940

BYD CO LTD -A CHINA AVIC AVI-A

26.2

6.504065

14526546

21.47

0.9402915

3163399

4.3

1.654846

38963367

HAINAN AIRLINE-A

4.85

2.320675

22168265

TASLY PHARMAC-A

80.2

0.4006009

3003936

CHINA CNR CORP-A

4.15

3.75

43352273

HAITONG SECURI-A

11.2

3.992572

162438489

TSINGTAO BREW-A

37.37

1.027305

1749094

CHINA COAL ENE-A

6.66

0.4524887

9899410

HANGZHOU HIKVI-A

7262310

WEICHAI POWER-A

21.96

1.855288

7576434

CHINA CONST BA-A

4.8

1.910828

41711399

HENAN SHUAN-A

40.92

-0.6916636

7367000

WULIANGYE YIBIN

21.62

0.6986493

14289939

CHINA CITIC BK-A

CHINA COSCO HO-A

3.31

0.9146341

10658345

HONG YUAN SEC-A

22.4

1.587302

44641598

YANGQUAN COAL -A

12.2

0.9098428

6676141

CHINA EAST AIR-A

3.05

0.9933775

10195434

HUATAI SECURIT-A

10.06

2.54842

45673544

YANTAI WANHUA-A

18.73

-0.5838641

12536216

CHINA EVERBRIG-A

3.11

1.967213

106612130

HUAXIA BANK CO

10.79

1.888574

38019862

YANZHOU COAL-A

14.23

0.9219858

6525088

4.08

0.2457002

68244253

YUNNAN BAIYAO-A

89.04

3.534884

2436070

CHINA LIFE INS-A

16.95

0.6532067

22380397

IND & COMM BK-A

CHINA MERCH BK-A

12.35

2.066116

68956539

INDUSTRIAL BAN-A

18.62

2.25151

104656628

ZHONGJIN GOLD

12.34

1.064701

14734119

CHINA MERCHANT-A

12.63

4.207921

47456955

INNER MONG BAO-A

26.58

0.2640513

19883854

ZIJIN MINING-A

3.1

0.9771987

36540310

CHINA MERCHANT-A

26.94

3.615385

12610322

INNER MONG YIL-A

29.34

3.055848

15304356

ZOOMLION HEAVY-A

7.39

0.4076087

38275616

CHINA MINSHENG-A

10.23

2.3

233370051

INNER MONGOLIA-A

4.72

0.8547009

21389076

ZTE CORP-A

12.23

0.2459016

40507413

CHINA NATIONAL-A

9.17

0.880088

24077775

JIANGSU HENGRU-A

31.03

1.971738

4239998

CHINA OILFIELD-A

15.54

1.901639

3085009

JIANGSU YANGHE-A

55.85

0.666907

4300640

CHINA PACIFIC-A

18.99

1.172083

15393225

JIANGXI COPPER-A

20.58

1.679842

8322083

6.77

1.347305

27332850

JINDUICHENG -A

10.17

0.8928571

5871831

17.95

0.6165919

40880844

172.45

0.783122

2146052

CHINA PETROLEU-A CHINA RAILWAY-A

5.19

0.3868472

20378254

KANGMEI PHARMA-A

CHINA RAILWAY-A

2.88

0.6993007

32277719

KWEICHOW MOUTA-A

CHINA SHENHUA-A

20.5

1.134682

12066006

LUZHOU LAOJIAO-A

23.92

0.6310475

7892493

CHINA SHIPBUIL-A

4.13

1.22549

37806394

METALLURGICAL-A

2.03

0.4950495

22181780

CHINA SOUTHERN-A

3.46

1.466276

22321525

NINGBO PORT CO-A

2.46

0.8196721

14928399

8.5

0.8303677

15150219

CHINA STATE -A

3.57

3.179191

129172569

PETROCHINA CO-A

CHINA UNITED-A

3.64

1.675978

108630811

PING AN BANK-A

19.73

4.33633

72012610

CHINA VANKE CO-A

11.39

0.4409171

100654064

PING AN INSURA-A

41.09

2.648014

32882502

CHINA YANGTZE-A

7.22

1.262272

12583858

POLY REAL ESTA-A

12.04

1.432182

62524136

CHONGQING CHAN-A

11.1

1.834862

29042663

QINGDAO HAIER-A

13.19

4.351266

18300218

PRICE DAY %

Volume

NAME

PRICE DAY %

Volume

MOVERS 284

4 2520

INDEX 2492.912 HIGH

2513.86

LOW

2430.07

52W (H) 2791.303 (L) 2102.135

2420

26-April

3-May

FTSE Taiwan 50 Index NAME ACER INC

NAME

PRICE DAY %

Volume

23.6

-1.666667

12440260

FORMOSA PLASTIC

70.8

-1.392758

5789217

TAIWAN MOBILE CO

110

1.382488

ADVANCED SEMICON

25.95

0.9727626

21554831

FOXCONN TECHNOLO

80.6

1.511335

8002982

TPK HOLDING CO L

585

-2.985075

3688238

ASIA CEMENT CORP

37.45

0.672043

2935098

FUBON FINANCIAL

42.35

0.5938242

9386870

TSMC

110 -0.4524887

36621737

UNI-PRESIDENT

59.6

2.581756

10419713

UNITED MICROELEC

11.4

1.785714

45896056

29.35

-1.344538

8386511

ASUSTEK COMPUTER

6976511

345

0.729927

2598740

HON HAI PRECISIO

77.5

1.439791

46752371

13.65

0.3676471

289026559

HOTAI MOTOR CO

260

-1.140684

257112

151

17064471

HTC CORP

279.5

-5.254237

27526453

CATHAY FINANCIAL

40.55

0.3712871

28355932

HUA NAN FINANCIA

17.15

0.2923977

4339040

YUANTA FINANCIAL

15.1

1.003344

6609846

CHANG HWA BANK

17.1

0.5882353

6495899

LARGAN PRECISION

810 -0.2463054

2010120

YULON MOTOR CO

50.7 -0.1968504

2500715

CHENG SHIN RUBBE

100

4415157

LITE-ON TECHNOLO

53.2

2.111324

6329891

18.85

83556814

MEDIATEK INC

366.5

0.136612

5951839

8.24

0.243309

26784249

MEGA FINANCIAL H

23.4

0.862069

29060257

CHINA STEEL CORP

25.75 -0.1937984

13474101

NAN YA PLASTICS

59.7

0.1677852

7378162

CHINATRUST FINAN

18.15

0.2762431

36637580

PRESIDENT CHAIN

190.5

3.814714

1618330

CHUNGHWA TELECOM

95.2

0.2105263

9598055

QUANTA COMPUTER

60.6

1.168614

6880854

COMPAL ELECTRON

18.7 -0.5319149

12521778

SILICONWARE PREC

34.95

1.304348

26671369

AU OPTRONICS COR CATCHER TECH

CHIMEI INNOLUX C CHINA DEVELOPMEN

DELTA ELECT INC FAR EASTERN NEW FAR EASTONE TELE FIRST FINANCIAL

146

-1.016949

8750972

SINOPAC FINANCIA

14.95

16111827

31.65

0.1582278

5318953

SYNNEX TECH INTL

48.5

-1.221996

6610525

73.3 -0.2721088

6425170

TAIWAN CEMENT

38.3 -0.5194805

7901345

0.5509642

6967462

TAIWAN COOPERATI

FORMOSA CHEM & F

18.25

68.7 -0.2902758

5668705

TAIWAN FERTILIZE

FORMOSA PETROCHE

80.6

1497574

TAIWAN GLASS IND

0.373599

16.95

5750187

72.1

2.124646

8385665

29.65 -0.5033557

983081

WISTRON CORP

MOVERS

5 5720

INDEX 5677.68 HIGH

5713.68

LOW

5633.1

52W (H) 5718.14 5630

(L) 4719.96 30-April

3-May

May 6, 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 34.50

64.00

18.7

34.25

63.75

18.6

34.00

63.50

33.75

63.25

18.5 18.4

Max 34.5

average 34.204

Max 40.9

average 40.602

Min 33.6

33.50

Last 34.15

Min 40.2

average 63.510

63.00

Max 18.64

average 18.505

Min 18.2

Last 18.54

PRICE

23.80

40.75

19.3

23.75

40.50

19.2

23.70

40.25

19.1

23.65

Max 19.38

average 19.272

DAY %

YTD %

(H) 52W

Min 18.02

Last 19.28

(L) 52W

WTI CRUDE FUTURE Jun13

95.61

1.723587616

2.267622206

104.5999985

81.34999847

BRENT CRUDE FUTR Jun13

104.19

1.302868255

-3.474152307

116.6699982

90.91999817

GASOLINE RBOB FUT Jun13

282.54

1.611163058

-1.285724268

324.119997

235.9499931

GAS OIL FUT (ICE) Jun13

862

2.771982116

-5.48245614

992.75

799.25

4.041

0.397515528

15.19384265

4.457000256

3.203999996

288.44

1.012081947

-4.0962894

323.8899946

258.589983

Gold Spot $/Oz

1470.75

1.0359

-11.638

1796.08

1322.06

Silver Spot $/Oz

24.1175

1.7401

-19.902

35.365

22.0713

NATURAL GAS FUTR Jun13 HEATING OIL FUTR Jun13

Platinum Spot $/Oz

19.0

Max 23.8

average 23.675

Min 23.6

Last 23.65

COUNTRY MAJOR

ASIA PACIFIC

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

DAY %

YTD %

(H) 52W

(L) 52W

1.0319 1.5574 0.9354 1.3114 98.99 7.9922 7.7588 6.1562 53.935 29.7 1.234 29.533 40.85 9735 102.139 1.2266 0.84211 8.0684 10.4863 129.84 1.0302

0.7715 0 -0.6949 -0.4025 -1.6466 -0.0013 0.0103 -0.0097 -0.2225 -0.8418 -0.0486 0.0677 0.2081 0.0308 -2.4065 -0.2886 0.4002 0.497 0.3576 -1.2554 -0.0194

-0.5685 -3.7216 -2.1381 -0.5762 -13.0215 -0.1126 -0.1057 1.2085 1.9653 2.963 -1.0211 -1.693 0.3794 0.5958 -12.5437 -1.5588 -3.1694 1.848 0.4205 -12.5308 -0.0291

1.0625 1.6381 0.9972 1.3711 99.95 8.0111 7.7713 6.3964 57.3275 32 1.2971 30.203 43.975 9904 105.433 1.25692 0.88151 8.4957 10.9254 131.12 1.032

0.9582 1.4832 0.9022 1.2043 77.13 7.9824 7.7498 6.1529 51.3863 28.56 1.2152 28.913 40.54 9208 74.482 1.20054 0.77553 7.7018 9.6245 94.12 1.029

1500

1.1661

-1.1695

1742.8

1374.55

1.3231

-0.839

786.5

553.75

LME ALUMINUM 3MO ($)

1882

3.920485919

-9.213699952

2200.199951

1809

LME COPPER 3MO ($)

7270

6.162383178

-8.334384063

8422

6762.25

LME ZINC

1885

3.628367235

-9.375

2230

1745

15225

3.71253406

-10.75615475

18920

14609

15.355

0.68852459

-2.476976818

17.07500076

14.79500103

661.25

-0.113293051

-5.163140911

824

527

721

-1.029512697

-9.165354331

900

664.75

1387.25

1.093095281

-0.573373947

1605.75

1217.75

140.9

1.039799211

-5.784018723

202.1999969

132.6999969

NAME

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

17.18000031

ARISTOCRAT LEISU

3.89

0.7772021

23.49206

3.975

2.29

2856357

69.94999695

CROWN LTD

12.9

20.89972

13.12

8.06

1699189

3MO ($)

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

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

17.53

COTTON NO.2 FUTR Jul13

86.43

-0.397727273 0.87535014

-11.19554205 12.43658124

23.05999947 94.19999695

World Stock Markets - Indices NAME

CROSSES

Macau Related Stocks VOLUME CRNCY

AMAX HOLDINGS LT

0.81

-2.409639

-42.14286

1.9

0.75

192775

BOC HONG KONG HO

26.85

0.3738318

11.41079

27.1

20.85

11405193

CENTURY LEGEND

0.305

15.09435

0.42

0.215

6.08

1.502508

6.74

2.8

23.85

-0.4175365

3.246752

25.6

14.624

10477635

CHINESE ESTATES

13.7

0.2928258

12.94853

13.8

7.697

1431508

CHOW TAI FOOK JE

10.36

-1.145038

-16.72025

13.4

8.4

28830600

EMPEROR ENTERTAI

2.37

1.716738

25.39683

2.49

1.1

485000

2.5

-0.3984064

104.918

2.75

0.77

4320000 10909080

CHEUK NANG HLDGS CHINA OVERSEAS

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

14973.96

0.9599786

14.26893

15009.58984

12035.08984

NASDAQ COMPOSITE INDEX

3378.633

1.137872

11.89329

3388.115

2726.68

GALAXY ENTERTAIN

34.15

2.245509

12.52059

35.7

16.94

FTSE 100 INDEX

6521.46

0.9402991

10.57426

6541.69

5229.76

HANG SENG BK

128.8

8.508849

131.5

99.2

694566

DAX INDEX

8122.29

2.016903

6.698289

8130.160156

5914.43

HOPEWELL HLDGS

30.35

-0.1644737

-8.721805

35.3

19.049

2664523

NIKKEI 225

13694.04

-0.7631519

31.73452

13983.87

8238.96

HSBC HLDGS PLC

85.25

0.1174398

4.858545

88.45

59.8

9757048

4.3

4.368932

20.78652

4.34

2.98

9188998

LUK FOOK HLDGS I

21.7

0.6960557

-11.06557

30.05

14.7

3440200

MELCO INTL DEVEL

15.54

4.8583

72.47502

15.58

5.12

7216491 9381274

FUTURE BRIGHT

HUTCHISON TELE H

HANG SENG INDEX

22689.96

0.09555194

0.1458319

23944.74

18056.4

CSI 300 INDEX

2492.912

1.766505

-1.190661

2791.303

2102.135

TAIWAN TAIEX INDEX

8135.03

0.0802115

5.656598

8175.33

6857.35

MGM CHINA HOLDIN

18.54

3.575419

39.62653

18.64

9.509

KOSPI INDEX

1965.71

0.4342917

-1.569319

2042.48

1758.99

MIDLAND HOLDINGS

3.52

0.2849003

-4.864866

3.249

706000

S&P/ASX 200 INDEX

5129.499

-0.009083883

10.33672

5195.1

3985

NEPTUNE GROUP

0.156

-1.886792

2.631582

0.226

0.084

11110071

4925.483

-1.372895

14.10331

5062.673

3635.283

NEW WORLD DEV

13.92

3.264095

15.80698

15.12

7.95

24234600

FTSE Bursa Malaysia KLCI

1694.77

-1.090775

0.3445969

1718.44

1526.6

SANDS CHINA LTD

40.4

0.248139

18.99852

43.7

20.65

11753231

SHUN HO RESOURCE

1.51

7.857145

1.67

1.03

NZX ALL INDEX

967.891

-0.6766651

9.731616

983.204

755.149

SHUN TAK HOLDING

4.14

0.4854369

-1.193319

4.65

2.56

2622760

PHILIPPINES ALL SHARE IX

4490

1.478329

21.38482

4492.07

3238.77

SJM HOLDINGS LTD

19.28

1.795143

7.111111

22.15

12.34

6022890

SMARTONE TELECOM

13.82

2.218935

-1.84659

17.38

12.5

3699000

WYNN MACAU LTD

23.65

0.4246285

12.88782

24.3

14.62

5544433

ASIA ENTERTAINME

4.51

-1.528384

47.38562

5.52

2.4

83026

41.74

412784

JAKARTA COMPOSITE INDEX

23.60

PRICE

693.79

Palladium Spot $/Oz

CORN FUTURE

18.2

Currency Exchange Rates

NAME

METALS

Last 63.7

19.4

Commodities ENERGY

Min 63.05

41.00

40.00

Last 40.4

Max 64

18.3

HSBC Dragon 300 Index Singapor

661.89

0.83

6.57

STOCK EXCH OF THAI INDEX

1578.95

-0.6443534

13.43601

1603.01

1099.15

HO CHI MINH STOCK INDEX

475.24

0.4693248

14.86718

518.46

372.39

BALLY TECHNOLOGI

52.55

-0.492331

17.53523

54.92

Laos Composite Index

1370.36

0.3735552

12.80818

1455.82

980.83

BOC HONG KONG HO

3.52

1.440922

14.65798

3.59

2.7

6500

GALAXY ENTERTAIN

4.47

2.382043

12.59446

4.93

2.25

26150 1961554

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

INTL GAME TECH

17.45

1.04227

23.14749

17.58

10.92

JONES LANG LASAL

98.77

0.7035073

17.66738

101.46

61.39

249256

LAS VEGAS SANDS

57.11

0.2457434

23.72184

57.88

32.6127

5342112

MELCO CROWN-ADR

24.75

1.893783

46.9715

24.95

9.13

3539102

MGM CHINA HOLDIN

2.29

23.78378

2.44

1.36

5000

MGM RESORTS INTE

14.66

0.7560137

25.94501

14.9

8.83

12153623

SHFL ENTERTAINME

15.8

1.869761

8.965517

17.36

11.75

224615

SJM HOLDINGS LTD

2.49

0.8097166

7.79221

2.85

1.65

9613

WYNN RESORTS LTD

138.8

1.595667

23.38875

139

84.4902

1553611

AUD HKD

USD

May 6, 2013

Opinion

‘Abenomics’ meets curse of second 100 days William Pesek

Bloomberg View columnist

he accomplishments of the first 100 days in office are a favourite benchmark for democratic leaders. It’s thought to offer a preview of his or her worldview, ambition and political fortune. So, viewed through this lens, just how is Japanese Prime Minister Shinzo Abe doing? Abe’s 100-day mark came and went on April 4, the same day his new Bank of Japan governor shocked markets with one of the most aggressive monetary jolts in history. Suddenly, Japan was in the international news for the right reasons, not for natural disasters, radiation leaks or corporate scandals. And in the month since? Abe has little to show for his promises of laying out a program to bringing about radical structural reforms. If Japan is going to produce steady growth that raises incomes, it needs sweeping measures to deregulate the economy. Easy money can help “Abenomics” along, but it is even more important that Abe start making good on his rhetoric. For starters, the media should stop doing Abe’s work. His publicrelations machine convinced the press that Abenomics consists of “three arrows,” when really it’s more like 1 1/2. The first so-called arrow is spending, but since Japan has been doling out corporate welfare to construction companies for decades, let’s dispense with the fiction that this matters.

Broken arrow The second arrow – monetary policy – is real. Tapping Haruhiko Kuroda to head the BOJ was a wise move, and he hasn’t disappointed. The central bank plans to double the monetary base, weaken the currency, end deflation and impose shock therapy on a fossilised financial system. As for the third and most important arrow – cutting regulation to increase investment and hiring – it is nowhere in sight. To understand the disconnect between

Shinzo Abe, Japan’s prime minister

perception and reality about Abenomics, look no further than Isao Iijima, a political operative sometimes referred to as Japan’s Karl Rove, the man often credited with turning George W. Bush into a two-term U.S. president. Iijima was former Prime Minister Junichiro Koizumi’s chief secretary and the imagemaker behind the myth of Koizumi as Japan’s answer to Margaret Thatcher or Ronald Reagan. When Koizumi stepped down in 2006, he erred in entrusting his reform agenda to Abe, who instead focused on stoking nationalism when he wasn’t committing amateurish blunders. The main reason Abe’s second turn as prime minister looks more impressive than the first is that Iijima has kept him disciplined and on-message. This has been buttressed with splashy policy pronouncements, public appearances, a flurry of overseas trips and copious musings on Twitter and Facebook. The payoff is an approval rating of more than 70 percent. Things haven’t always gone smoothly. Recent visits to a Tokyo shrine to World War II dead by Deputy Prime

Minister Taro Aso and 168 lawmakers enraged China and South Korea, who view Yasukuni as a symbol of atrocities committed during Japan’s conquest of east Asia.

As for the third and most important arrow – cutting regulation to increase investment and hiring – it is nowhere in sight

It raised the question: What good is a weaker yen if two of your main customers boycott your goods? With the first 100 days come

and gone, it’s time to wonder what really lies beneath the Abenomics marketing blitz. International Monetary Fund Managing Director Christine Lagarde is among those anxious to find out. “In Japan, the recently announced framework of ambitious monetary easing is a positive step,” Lagarde said in Washington on April 18. “But Japan needs more ambitious plans to bring down debt, plus structural reforms to shift the economy into higher gear.” Abe now needs to display less Rovian spin and offer more details on plans to make Japan more productive, innovative and competitive. News releases and vague pronouncements about opening markets, empowering women, importing foreign talent and encouraging small businesses won’t do. If the hype over Abenomics is to meet expectations, the prime minister must present clear strategies with specific timetables and goals.

Crushing debt Japan’s crushing debt explains why Abe has so far relied on the central bank. It’s

bad enough that Japan has the developed world’s biggest public-debt load; Japan is also a rapidly ageing society. People 65 or older account for about 22 percent of Japan’s population, the highest proportion in the world. Many economists say demographics have more to do with Japan’s deflation and economic inertia than a lack of central-bank liquidity. So does scant income growth for workers at the younger end of the age spectrum. Suppose the BOJ succeeds in generating a 2 percent inflation rate in two years. Without income growth in excess of that goal, stagflation will replace deflation. McDonald’s Corp. shows how. Its Japan operation is raising some prices by as much as 25 percent, the restaurant chain’s first increase on burgers in the country since 2008. Missing, so far, is a parallel wage increase for Japanese workers churning out Big Macs and fries. Let’s hope it won’t take Abe the next 100 days to figure out that inflation and stalled incomes are no better than deflation. Good luck spinning that. 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.

Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com

May 6, 2013

Opinion Business

wires

Leading reports from Asia’s best business newspapers

Manila Standard Eight-division world champion Manny Pacquiao will fight in Macau in November. The venue for Mr Pacquiao’s fight will be the Cotai Arena at The Venetian Macao Resort Hotel and the date agreed upon is November 24, Mr Pacquiao’s adviser Michael Koncz was quoted as saying. However, Mr Koncz said no agreement has been reached yet on an opponent, although the two fighters in contention are Brandon “Bam Bam” Rios and Mike “Mile High” Alvarado, who fought each other in two action-packed battles.

Wall Street Journal Opposition grew against planned industrial facilities in at least two Chinese cities, the latest examples of growing public environmental concerns over large industrial projects. In the southwest city of Kunming, capital of Yunnan province, photos posted to Weibo microblogging service showed crowds of hundreds flooding the streets, protesting against a planned refinery in the nearby city of Anning. Meanwhile in Chengdu, the capital of neighbouring Sichuan, officials have been working in recent days to head off potential protests against a planned nearby oil refinery as well.

Asahi Shimbun Prime Minister Shinzo Abe has signed Japan’s first nuclear energy agreement since the Fukushima catastrophe two years ago. Mr Abe signed the agreement in Dubai with UAE Vice President Mohammed bin Rashid al-Maktoum. “The Middle East is seeking nuclear energy as a new energy source. We want to provide Japan’s safe and advanced nuclear energy technology,” Mr Abe said. The UAE has plans to construct 12 reactors, and the Japanese government hopes the agreement will enable Japanese companies to win contracts for their construction.

Financial Review Rio Tinto Plc chief executive Sam Walsh expects to see strong demand for iron ore from China as a result of measures Beijing is taking to stimulate growth. “First quarter, we saw a dip in China,” Mr Walsh was quoted as saying. “We have seen an increased commitment to infrastructure and an easing of credit and we expect that will flow through to steel production and of course iron ore demand.” The spot price of iron ore is now US$128 a tonne, down from more than US$150 a tonne earlier this year. However, Mr Walsh said Rio’s position as the world’s lowest cost iron ore producer meant the miner was “doing okay” even at current prices.

Controlling China’s currency Zhang Monan

Fellow of the China Information Centre and a researcher at the China Macroeconomic Research Platform

t is indisputable that China is over-issuing currency. But the reasons behind China’s massive liquidity growth – and the most effective strategy for controlling it – are less obvious. The last decade has been a “golden age” of high growth and low inflation in China. From 2003 to 2012, China’s annual GDP growth averaged 10.5 percent, while prices rose by only 3 percent annually. But the unprecedented speed and scale of China’s monetary expansion remain a concern, given that it could still trigger high inflation and lead to asset-price bubbles, debt growth, and capital outflows. Data from the People’s Bank of China (PBOC) show that, as of the end of last year, China’s M2 (broad money supply) stood at 97.4 trillion yuan (US$15.6 trillion), or 188 percent of GDP. To compare, M2 in the United States amounts to only roughly 63 percent of GDP. In fact, according to Standard Chartered Bank, China ranks first worldwide in terms of both overall M2 and newly issued currency. In 2011, China accounted for an estimated 52 percent of the world’s added liquidity. But a horizontal comparison of absolute values is inadequate to assess the true scale of China’s monetary emissions. Several other factors must be considered, including China’s financial structure, financing model, savings rate, and stage of economic development, as well as the relationship between currency and finance in China. China’s intensive economic monetisation is a key factor driving its money-supply growth. But China’s sharply rising monetisation rate cannot be judged against the high, steady rates of developed countries without bearing in mind that China’s monetisation process began much later, and has distinct structural and institutional foundations.

Stuck in a cycle As China has opened up its economy, deepened reforms, and become increasingly market-oriented, the government has facilitated the continuous monetisation of resources – including natural resources, labour, capital, and technology – by ensuring their constant delivery to the market. This has fuelled rising demand for currency, leading to the expansion of the monetary base, with the money multiplier – that is, the effect on lending by commercial banks – boosting the money supply further. And, as GDP growth has become increasingly dependent on government-led investment, currency demand has continued to rise. Indeed,

the rapid expansion of bank credit needed to finance skyrocketing government-led investment is increasing the amount of liquidity in China’s financial system. As a result, in the last four years, China’s M2, spurred by a stimulus package totalling 4 trillion yuan in 2008 and 2009, has more than doubled. This trend is exacerbated by the declining efficiency of financial resources in the state sector, a product of the soft budget constraint implied by easily accessible, cheap capital. Consequently, maintaining high GDP growth rates requires an ever-increasing volume of credit and a continuously growing money supply. So China is stuck in a currencycreating cycle: GDP growth encourages investment, which boosts demand for capital. This generates liquidity, which then stimulates GDP growth.

Currency vs. finance The key to controlling China’s monetary expansion is to clarify the relationship between currency (the central bank) and finance (the financial sector), thereby preventing the government from assuming the role of a second currencycreating body. According to Pan Gongsheng, a deputy governor of the PBOC, the relationship between the central bank and the financial sector entails both a division of labour and a system of checks and balances. In theory, the financial sector serves as a kind of accountant for the treasury and the government, while the PBOC acts as the government’s cashier. In practice, however, the relationship between currency and finance is vague, with both assuming quasifiscal functions. China’s low official government debt largely reflects the role of currency in assuming quasi-fiscal liabilities – not only the write-off costs incurred

from reforming state-owned banks, but also the takeover of banks’ bad debts via note financing and the purchase of asset-management companies’ bonds. These activities both damage the PBOC’s balance sheet and constrain monetary policy. At the same time, finance takes on quasi-fiscal functions by excluding government fiscal deposits – government deposits in the national treasury, commercial banks’ fiscal savings, and central treasury cash managed through commercial-bank deposits – from the money supply. Given the large volume of

fiscal deposits – which totalled 2.4 trillion yuan (3.3 percent of M2) at the end of 2010 – their impact on the money supply cannot be ignored. Clarifying the relationship between currency and finance is essential to ensuring that all newly issued currency is backed by assets. Only by exerting a harder budget constraint on the state sector, limiting fiscal expansion, and reducing dependence on government-led investment can China’s excessive currency issuance be addressed in the long term. © Project Syndicate

May 6, 2013

Closing Taiwan group buys into Malo Clinic

EU economies to breach deficit limits

Taivex Therapeutics Corp has bought a majority take in Pacific Health Care Ltd, the Macauregistered company that runs the Malo Clinic here, said a company source quoted by Portuguese news agency Lusa. The investment made by the Taiwan group, which operates clinics in the island and in mainland China, was not disclosed. Under new management the Malo Clinic will try to explore new markets and offer new services, namely gynaecology and assisted reproduction, the source said. The company will also bet on medical tourism, an area that is “underdeveloped in Macau and has a lot of room to grow,” the source added.

France will get two more years to meet its budget deficit target because of the country’s poor economic outlook within a recessionhit euro zone, the European Commission said. Presenting economic forecasts for the next two years, Olli Rehn, the European monetary affairs commissioner, also confirmed earlier statements that Spain would get the same leeway. Others, including the Netherlands, Slovenia and non euro zone Poland, are likely to get a year more to get their budget gaps below the 3 percent of gross domestic product European Union ceiling. The formal decision will be announced on May 29.

Galaxy to buy Grand Waldo Galaxy will pay HK$3.25 bln for majority share in loss-making Cotai casino

Flooding plagues the area around the Inner Harbour, one of the city’s oldest and lowestlying districts

Vítor Quintã

vitorquinta@macaubusinessdaily.com

Govt eyes summer start on quick fix for flooding Flood gates are an immediate solution to the problem of inundation around the Inner Harbour Stephanie Lai

sw.lai@macaubusinessdaily.com

Grand Waldo could get a new breath of life under new management (Photo: Manuel Cardoso)

alaxy Entertainment Group Ltd (GEG) is set to gain an even bigger foothold in Cotai after reaching a deal to buy Grand Waldo casino for HK$3.25 billion (US$418.9 million). Once the deal is finalised the company would have a 65 percent share in the loss-making property, which is located right next to its Galaxy Macau resort. In a filing sent to the Hong Kong Stock Exchange yesterday the casino operator said the deal “is expected to have synergistic effect on the GEG group’s development” in Cotai. The company also praised Grand Waldo’s “strategic value and development potential”. Galaxy will pay HK$2.6 billion to Get Nice Holdings Ltd once the deal is clinched and a further HK$650 million within 18 months, if there is no outstanding debt. Grand Waldo casino operates on Galaxy’s gaming

licence, with the company receiving a fee. Galaxy said the terms of the acquisition are “fair and reasonable” and that it “will be financed by the internal resources” of the group, with no need to seek credit. Get Nice estimated that its stake in Grand Waldo was worth less than HK$2.9 billion at the end of September. In July the company announced it was close to selling its stake to an “international group” which it did not identify for US$500 million. The deal failed. Get Nice will now have six months to make sure all requirements for the casino and land transfer are met. That includes getting the backing from its own shareholders and from the government. Grand Waldo has posted losses in the past two years. In a Hong Kong filing yesterday Get Nice admitted results have been “unsatisfactory”.

he government may take the first steps to prevent flooding around the Inner Harbour before this summer, the Land, Public Works and Transport Bureau says. The director of the bureau’s urban planning department, Lao Iong, told reporters on Friday that flood gates would be installed at dock accesses that are less than 2.3 metres above sea level. Mr Lao was speaking after meeting the Advisory Committee for the Renewal of Old Neighbourhoods. He said the committee agreed with the government’s measures for preventing the flooding that troubles the district during the typhoon season. “Now we are drawing up the plans for how we put these gates at the various docks in the district, and we will inform the dock users soon,” he said. “If everything runs smoothly, the work can start before summer.” The Inner Harbour docks are where vessels unload imports of fresh fruit and seafood and load exports of waste.

Flooding is common around the Inner Harbour during the typhoon season, from May to October. The district is one of Macau’s oldest and lowestlying. The floods often disrupt the operation of shops, restaurants and service stations. “We are still searching for a proper location to put two more pumping stations in the Inner Harbour district,” Mr Lao said. “These measures will be finished next year.”

Complex engineering Mr Lao did not disclose the cost of the works. “The whole cost will depend on how the open tender turns out,” he said. “The amount of construction involved is not big, so we do not expect the bids in the open tender to be very high.” Mr Lao said there was no schedule for a permanent solution to the problem of flooding or for the regeneration of the Inner Harbour area. The project was complex and required

cooperation with mainland authorities. Preventing flooding is crucial if the government is to achieve its aim of rejuvenating the Inner Harbour district. Part of the process would be construction of the second phase of the Light Rapid Transit railway, which would include a line from Barra through the Inner Harbour district to Fai Chi Kei and the Border Gate. Secretary for Transport and Public Works Lau Si Io met officials in Beijing at the end of January to discuss a permanent solution to the problem of flooding around the Inner Harbour. Mr Lau said at the time that a limited land reclamation project would allow higher flood barriers to be built. Any project involving reclamation of land from or construction over the waters of the Pearl River Delta requires Beijing’s approval. Mr Lao said the committee had urged the government to try to obtain administrative rights over the seaways around Macau.