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Year I Number 119 September 13, 2012 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte MOP 6.00 www.macaubusinessdaily.com

Social bargain breakdown over typhoon working C

asinos are in some cases failing to keep their side of a social bargain struck with staff over typhoon day working says a legislator. Dealers are being “forced to sign work contracts that explicitly state that shift work and night work will not be compensated,” claims José Pereira Coutinho. The principle of casino workers being required to turn out in all weathers in Macau, is so they can look after the comfort and safety of stranded hotel guests according to the Labour Affairs Bureau.

But Mr Coutinho says in some cases this is being used by employers as a smokescreen to ensure that the biggest cash generating part of a casino resort’s business – the gambling hall – maximises its returns even during bad weather. When Typhoon Vicente struck over a 12-hour period in late July, it shaved 700 million patacas (US$87.6 million) of the month’s gross gaming revenue according to analysts. The losses would have been greater if the resorts had been required to close their gambling operations – in the way public sector offices are allowed to close during a number eight or above typhoon.

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The Monetary Authority promises it will step in if necessary to help get 200 much-needed new taxis on the road. It would do so by acquiring insurance cover for them if the owners or drivers can’t find insurance on the open market says legislator Melinda Chan Mei Yi. The authority would set up an insurance contract written jointly by a number of insurance companies of its choice, she added on the sidelines of an event yesterday. But the help doesn’t come cheaply. The premium would be 20 percent more than the current market rates Ms Chan – also chairwoman of the Macau Taxi Federation Fund – told Business Daily. The current premium is about 8,000 patacas (US$1,000), according to the industry. “But this is the worst scenario,” she added. “We’re still in negotiation with the government. If the drivers have no record of traffic violation there is no reason for the insurance companies to reject covering them.” Local businessman David Chow Kam Fai, Ms Chan’s husband, set up the taxi federation fund to help drivers during emergencies and improve the service quality of the industry. He and friends contributed eight million patacas to the fund, the owner of The Landmark Macau hotel and of Fisherman’s Wharf recently told reporters.

T.L.

Public-private hols fix urged by unions

Fraud probe boss to sell soccer stake

The city’s current labour law doesn’t mention whether workers are entitled to an extra day off or other compensation when mandatory holidays overlap or clash with their weekly holidays. The Macau Federation of Trade Unions is urging the government to revise the labour relations law and introduce clear guidelines to workers and employers on how to proceed when public and private rest days clash. Page 2

Carson Yeung Ka Sing, a Hong Kong resident with Macau business interests, is mulling selling some of his stake in English football club Birmingham City. Mr Yeung is facing financial and legal pressures after being charged with money laundering in Hong Kong. He paid £80 million (1.03 billion patacas) for control of Birmingham – then in England’s top division, the English Premier League – in 2009. Page 4

HSI - Movers Name

%Day

NEW WORLD DEV

3.40

SINO LAND CO

3.27

HENDERSON LAND D

3.14

CITIC PACIFIC

3.09

HUTCHISON WHAMPO

2.71

SWIRE PACIFIC-A

-0.65

LI & FUNG LTD

-1.15

TINGYI HLDG CO

-1.24

SANDS CHINA LTD

-1.70

CHINA RES POWER

-3.63

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business daily September 13, 2012

macau Portugal boosts MIF presence Portugal “will strengthen” its presence in the Macau International Trade and Investment Fair (MIF), the country’s minister of Economy and Employment, Álvaro Santos Pereira, said on Tuesday. The boost will already be felt at this year’s edition, which will take place from October 18-21, the official said, quoted by Portuguese news agency Lusa. Speaking at the end of the Global Tourism Economy Forum, Mr Pereira said Portugal is very interested in making the most of Macau’s role as “a platform between China and the Portuguese-speaking world”.

Union wants better laws to improve holiday clashes Macau’s peak workers union urges labour law revisions to clear up conflicts with holiday and compensation entitlements Tony Lai tony.lai@macaubusinessdaily.com

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he Macau Federation of Trade Unions has urged the government to revise the labour relations law and introduce clear guidelines for staff and employers when mandatory public holidays clash. The union’s vice-president Kwan Tsui Hang said the labour law does not mention if workers are entitled to a leave day in lieu or to claim financial compensation when mandatory holidays overlap or clash with their established day off. A member of the Legislative Assembly, Ms Kwan said she was

concerned that employers could schedule a workers’ rest days during a mandatory holiday to avoid expenses. The Chinese-language newspaper Macao Daily News quoted Ms Kwan as saying the issue should be debated in the Standing Committee for the Coordination of Social Affairs, which is currently focusing on changes to the labour law.

Weekend reward Weekend and holiday pay has been an issue previously and had been a flashpoint in negotiations relations

between employers and employees, Ms Kwan said. The law says workers are entitled to 10 mandatory holidays annually, including three days-off during the Chinese New Year. This year, employees – including civil servants – are entitled to nine mandatory holidays because the public holiday for the Mid-Autumn Festival overlaps with National Day on October 1. “This is a rare situation but prompt many enquiries to the association,” Ms Kwan reportedly told the newspaper.

The government cannot force companies to compensate workers for the loss of a public holiday but it should think about revising the law as soon as possible, she said. Ms Kwan hopes the government compensates civil servants with an extra day-off through a chief executive’s dispatch, and has encouraged the private sector to follow their lead. Once approved by the chief executive, civil servants can have an extra day-off whenever a mandatory holiday falls on a Sunday. T.L.

Court hastens STDM back pay hearings Collective hearings and simplified proceedings for cases involving former employees of STDM are easing the workload of the courts Tony Lai tony.lai@macaubusinessdaily.com

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impler court proceedings for a slew of claims for back pay by former employees of gaming conglomerate Sociedade de Turismo e Diversões de Macau SA have helped improve efficiency in the Court of Second Instance. The official report on the judicial year that ended last September says the number of civil and labour proceedings decided by the judges increased to 427 cases, more than half as much again as the year before. A spokesman for the president of the Court of Final Appeal, Sam Hou Fai, said the improvement was due to the establishment of a collective court with summary proceedings to settle cases involving former STDM employees seeking back pay. Most of the civil cases the Court of Second Instance is now hearing involve former STDM employees. The annual report said the judges had reached a “certain consensus on the controversial issues” that allowed for simpler proceedings. The latest statistics from the Court of Second Instance show it decided nearly one-quarter of its 216 outstanding civil cases in July. On average, it decides in any one month 15.6 percent of its outstanding civil cases. An association of former STDM

employees alleged in January 2008 that the company owed almost 10,000 former employees arrears of pay and other benefits, including leave. The Portuguese-language newspaper Hoje Macau has reported that STDM, founded by gaming tycoon Stanley Ho Hung Sun, has paid out more than 2.9 billion patacas (US$362.5 million) in compensation and legal costs in more than 50 cases. The claims arose when, with the liberalisation of gaming market in 2002, STDM transferred its casino staff to a subsidiary, Sociedade de Jogos de Macau SA. Some employees subsequently sued, alleging that STDM had failed to settle its obligations to them. One group of employees even petitioned the Hong Kong Stock exchange in 2008, demanding justice before SJM was listed there.


September 13, 2012 business daily | 3

MACAU Citi ups casino revenue forecast Citigroup has revised upwards its forecast for Macau’s casino industry performance for the current month. The investment bank noted that September is a seasonally weak period, but even so it estimates casino gross gaming revenue in Macau will reach 24 billion patacas (US$3 billion) for the month, up by 13 percent year-on-year. Macau’s casinos raked in 21.24 billion patacas in September last year. In the first eight months, accumulated gross gaming revenue has reached 199.4 billion patacas.

Law obliges employees to work during storms

‘Spin’ over Jacobs case data

The government says employers, including casinos, can demand that their employees work during typhoons

Judge criticises LVS’ evidence handling in its legal fight with ex-Macau boss

Vítor Quintã

Associate Editor

vitorquinta@macaubusinessdaily.com

Judge Elizabeth Gonzalez

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Some casino employees had to work extraordinarily long shifts when typhoon Vicente blew through in July

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asinos have the right to demand that their staff come to work in extreme weather, even if storm warning signal number 10 is hoisted, the Labour Affairs Bureau has said. But it did not say if a casino would be liable if a staff member obliged to work was injured as they came to work during a typhoon. Legislative Assembly member José Pereira Coutinho said in an inquiry made public on Monday that in bad weather casino employees were “forced to travel to their workplaces by their own means (cars and motorcycles) and without accident insurance of any nature”. The Labour Affairs Bureau told Business Daily that an employer had the right to make an employee work when the employer faced losses, when force majeure so dictated or when it faced an unforeseeable increase in work. When the No 10 signal was hoisted on July 24 for typhoon Vicente some employees ended up working longer shifts than they had ever worked before. The Gaming Inspection and Coordination Bureau has said casinos may request that staff already at work extend their working hours, or call in more staff before a typhoon arrives.

Overtime obligation The casinos must operate 24 hours a day and seven days a week, even during typhoons, to cater to tourists stranded in the city. The law does not tell casinos what to do during a typhoon. But the gaming regulator has said each casino should have contingency plans.

KEY POINTS Staff forced to head to work under own steam Casinos accused of failing to pay overtime Question mark over employers’ liability coverage Rules restricting smoking still on hold

The Labour Affairs Bureau said that if casinos called in extra staff during a typhoon they should pay them overtime. The labour relations law says employers should pay employees that work overtime 50 percent more than the usual rate, and give them time off in lieu. Mr Coutinho said casinos were shirking this obligation. Casinos were forcing croupiers to sign contracts that explicitly stated they would not be paid extra for shift work or night work. The Labour Affairs Bureau said it would look into any complaints made by employees about employers breaking the law. It said that it would “ensure the legal rights of the employee” in any case where it found an employer had

broken the law. The bureau said the labour relations law obliged employers to provide a safe workplace for employees. “If employers require their employees to work during the period of typhoon … they should ensure that the risks at work are properly controlled and reduced to as low as reasonably practicable,” it said.

Unhealthy atmosphere The bureau said that the law protected employees involved in accidents at work but it did not say if employers were required to insure workers against injury while they travelled to work during a typhoon. Mr Coutinho believes the working environment in casinos is far from safe, even during normal weather. He said casinos “forced” staff to breathe second-hand tobacco smoke, so damaging their health, yet failed to insure them against any damage caused in this way. Gaming Inspection and Coordination Bureau director Manuel Joaquim das Neves said last month that no illness caused by working in an environment polluted by secondhand smoke would be considered an occupational injury. The ruling means casino staff cannot demand compensation from their employers for any ailment caused by second-hand smoke. From January 1, casinos must make at least 50 percent of their premises no-smoking zones. But the director of the Health Bureau, Lei Chin Ion, said in May that only pregnant women and employees with respiratory diseases could refuse to work in smoking areas.

he currently two-yearlong wrongful termination lawsuit in Las Vegas between Las Vegas Sands Corp. and its former CEO Steve Jacobs has taken a three-day procedural detour. It’s to discuss just how Macau computer files – including e-mails from Mr Jacobs – came to be in the United States, but their presence not disclosed by lawyers for Sands China Ltd or the parent Las Vegas Sands Corp., to either the court or to Mr Jacobs’ side. The companies had for a year maintained that Macau’s Personal Data Protection Act meant e-mails needed be cleared with the people who sent and received them and with the government before they could be transferred to the U.S. But on Tuesday U.S. time, a lawyer for LVS said he would have told the Jacobs camp if it had asked the right questions, but argued he didn’t have a duty to disclose what hadn’t been requested. The trial judge Elizabeth Gonzalez – who could impose a fine on LVS – retorted that Sands and LVS were shifting their ground. “…there are certain inconsistencies in the spin that was made to the court,” stated the judge. Mr Jacobs’ legal team said they had asked for the documents “multiple times”. It’s not the first time Judge Gonzalez has been asked to focus on procedural issues rather than the substance of the case. This is, says Mr Jacobs, that he was sacked in July 2010 without cause and without severance pay and stock options to which he was entitled. Sands says he was sacked “for cause” after allegedly exceeding his authority by making a deal with Playboy Enterprises and talking about the parent firm’s interest in investing in Japan. Mr Jacobs says he was pushed out after resisting requests to take part in “illegal” activities including the secret gathering of information on business dealings of Macau government officials in order to use “improper leverage” against them. Sands and LVS deny that. Mr Jacobs is claiming unspecified compensation and punitive damages in Clark County District Court against his former employer. With Bloomberg


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business daily September 13, 2012

macau

Macau businessman mulls selling stake in English soccer club

Corporate

Carson Yeung facing financial and legal pressures after 2011 arrest for money laundering Associate Editor

Steve McManaman, a former Liverpool, Real Madrid and Manchester City footballer, joined the Grandtop board in July 2007 according to a regulatory filing. He appeared with Mr Yeung at press conferences at the time of the Birmingham takeover. Mr McManaman resigned from the Birmingham International Holdings board in June this year according to another filing.

Rapid rise

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arson Yeung Ka Sing, a Hong Kong resident with Macau business interests, is said to be in talks with Flavio Briatore, an Italian businessman and former boss of the Benetton Formula One motor racing team, about the latter taking a stake in Birmingham City F.C., an English football club. Mr Yeung paid £80 million (1.03 billion patacas) for control of Birmingham – then in England’s top division, the English Premier League – in 2009. In February 2011 only days before Birmingham City won the League Cup by beating Arsenal 2-1 at Wembley Stadium in London, Mr Yeung appeared on a platform at the Ponte 16 casino resort in Macau with Ponte 16 directors. He had pledged HK$100,000 to charity to be allowed to wear a rhinestone glove once used as a prop by the singer Michael Jackson. Since then Mr Yeung has run into business and legal difficulties.

Police investigation In June 2011 he was arrested at his Hong Kong home in connection with alleged money laundering. A brief statement by Hong Kong Police Force

mentioned that Narcotics Bureau officers searched two locations – one on Hong Kong Island and the other in Kowloon – and seized documents. He was charged with five counts of dealing with property known or believed to represent proceeds of an indictable offence. It was not Mr Yeung’s first brush with the law in Hong Kong. In 2010 the city’s Eastern Magistrates’ Court fined him HK$16,000 for failing to notify the local stock exchange that Great Luck – a firm with a “substantial” holding in his locallylisted investment firm Birmingham International Holdings Ltd – was itself wholly owned by him. He was also ordered to pay the HK$11,088 investigation costs of the city’s Securities and Futures Commission. Birmingham City was relegated from the EPL at the end of the 201011 season. The club posted a £10 million loss for the year ending June 30, 2011 according to accounts filed in the United Kingdom this June. Mr Yeung currently holds his club shares via Birmingham International Holdings (previously called Grandtop International Holdings), an investment, entertainment and sportswear firm registered in the Cayman Islands.

In its 2009 annual results filed with the Hong Kong Stock Exchange, Birmingham International Holdings said: “In the last financial year, the group’s turnover was derived from Macau and the United Kingdom and accounted for 73.3 percent and 26.7 percent respectively.” “For the year ended 31st March the group recorded a consolidated turnover of approximately H K $ 1 0 . 7 million,” added th e r e p o r t . I t didn’t specify the nature of the company’s Macau business. It is not clear how a Hong Kongbased business with an annual turnover equivalent to less than £1 million was able the same calendar year to negotiate a new share subscription in Hong Kong realising HK$58 million and in addition raise a £57 million bridging loan from shareholders to pay for an English football club. That’s what happened according to a June 2009 HKSE filing. The loan was to be repaid from the proceeds of a share subscription open to existing Grandtop stakeholders announced by the firm in a Hong Kong filing on August 21 that year. Most of Birmingham City’s loss for 2010-11 was, said the club, due to an increase in staff costs, including player wages; that rose from £36.7 million to £45 million. But the club’s financial report quoted BDO, an independent auditor called in to review the accounts as saying: “A number of factors have made us sceptical as to whether we have received all relevant information and explanations necessary for the audit from the directors.” On August 31 Birmingham International Holdings said in a filing to the HKSE that “due to the delay in finalising the financial statements of the group” its publication of half-year results to December 31, 2011 would be delayed until October 31.

Galaxy wins top honours Galaxy Entertainment Group Ltd (GEG) has won three top awards at the Asia Hotel Awards ceremony in Shanghai. StarWorld Macau was recognised for the ‘Annual Best Hotel Service of Asia’ and Galaxy Macau was awarded the ‘Best Integrated Resort of Asia’. Lui Che Woo, founder and chairman of GEG, received the ‘Outstanding Achievement of the Year’. This is the first time that a single hotel group has been awarded all three of these awards. The 5th Asia Hotel Awards recognises the leading hotel developers, investors and projects from across the region. “We are delighted to receive recognition for both of our flagship properties from one of Asia’s leading industry awards … so we are very proud to be recognised by our industry peers for our commitment to ‘World Class, Asian Heart’ service and amenities,” said Mr Lui. “On a personal level, I am extremely honoured to receive the award.”

Sheraton Macao lures MICE groups Scheduled to open on September 20, Sheraton Macao Hotel vows to have a strong appeal to meetings, incentives, conventions and exhibitions (MICE) groups looking for stylish venues. Sheraton Macao, at Sands Cotai Central, is the largest hotel in Macau as well as the largest Sheraton in the world, featuring 3,896 guest rooms and suites and 15,000 square metres of meeting space. “With our large inventory of rooms and versatile MICE facilities, Sheraton Macao Hotel is set to be the ultimate MICE destination for event planners,” said Josef Dolp, managing director of Sheraton Macao. “Our associates are all well-trained and prepared to receive our guests with the Sheraton brand’s signature services.” Sheraton Macao also says it has introduced the latest technology, systems and facilities to ensure seamless and hassle-free check-in and check-out services for groups of any size in one minute or less.

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September 13, 2012 business daily | 5

MACAU

China Eastern jumps on share sale Airline plans to raise US$570 million

China Eastern currently flies between Shanghai-Pudong airport and Macau once a day

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hina Eastern Airlines Corp., mainland’s second-largest carrier by passenger numbers, rose the most in more than 10 months in Hong Kong after announcing plans to raise US$570 million selling shares to its state-owned parent. The airline, which flies between Shanghai and Macau, rose as much as 6.9 percent, the most since October 27, 2011, before ending the day up by 4.7 percent at HK$2.43. The company’s Shanghai-listed stock rose by as much as the 10 percent daily limit. China Eastern will use the funds from selling new Shanghai and Hong Kong stock to repay borrowings,

helping pare debt levels that are the highest among the nation’s big three carriers. Air China Ltd and China Southern Airlines Co. have also received new funding from their parents as the government helps the industry contend with slower traffic growth and an end to large gains from currency appreciation. The Shanghai-based carrier is one of four airlines currently connecting Macau to ShanghaiPudong airport, with one daily flight. “The injection will help the carrier’s mid-to-long term development,” said Li Lei, a Beijing-based analyst at China Securities Co. “It also showed government

support for the strategic industry.” China Eastern’s share sale will comprise 698.9 million Shanghai-listed shares priced at 3.28 yuan apiece and 698.9 million Hong Kong-listed shares costing HK$2.32 each, the airline said in a stock-exchange filing late on Tuesday. That’s about in line with the previous closing prices on September 5. The shares were subsequently suspended until yesterday. The airline will raise 2.29 billion yuan (US$361 million) from the Shanghai stock sale and HK$1.62 billion (US$209 million) in the Hong Kong offering, it said. The funds will be used

to repay bank and financial institutions as well as for boosting working capital. China Eastern plans 12.6 billion yuan of capital spending in the second half,

mainly for plane purchases. It will receive 21 new aircraft including Airbus SAS A320s, twin-aisle A330s and Boeing Co. 737s. Bloomberg


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business daily September 13, 2012

macau Louis Ng deal could alter French inheritance law The negative media coverage of Louis Ng Chi Sing’s purchase of a Burgundy estate could force the French government to lower inheritance taxes, said the French winemaker who is leasing Chateau de Gevrey-Chambertin’s two hectares of vines. Such a move would help owners “not have to sell something that has been in the family for centuries,” Eric Rousseau told Decanter.com. Mr Rousseau defended the SJM Holding’s executive: “He’s not here just because there’s money – he genuinely loves Burgundy”.

Macao Water wins water recycling job New contract will includes provisions for conservation Vítor Quintã vitorquinta@macaubusinessdaily.com

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omprehensive recycling of water is a step closer to reality, with the government ready to introduce the provision in a concession contract for Macao Water Supply Co Ltd. In Monday’s edition of the Official Gazette, Secretary for Transport and Public Works Lau Si Io was given the green light to sign a revision of the public water supply deal. The changes were linked to the government’s water recycling plans, the Maritime Administration told Business Daily. “The construction of a dual pipe system (potable and recycled water) has been adopted in Seac Pai Van public housing estate,” the government said. The new campus of the University

of Macau on Hengqin Island, which should be ready this year, would also use recycled water, mainly for toilet flushing, irrigation and landscaping, it said. But it said the use of recycled water would have to wait until after the upgrading of the water treatment plants into recycled water treatment plants was complete. The modernisation of one of these plants, the peninsula wastewater treatment plant, has been on hold for more than two years because of a legal dispute between the government and two would-be bidders that the courts say were wrongfully excluded from the public tender to run the plant. The government was already planning for the introduction of recycled water, the Maritime

Coloane’s Seac Pai Van public housing estate has a dual pipe system so it can use recycled water

Administration said. “A few relevant amendments have to be made to the current concession contract,” it said. The administration said a date for the signing of the contract had yet to be set but changes to the contract would

not extend Macao Water’s concession. The company’s contract was last renewed in 2009, and its concession will last until 2034. Macao Water is co-owned by Suez Environment Group of France and Hong Kong’s NWS Holdings Ltd.

Inner Harbour area to be flood-proofed Study assessing flood prevention measures will be finished this year says Land, Public Works and Transport Bureau Tony Lai tony.lai@macaubusinessdaily.com

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easonal flooding of the area around the Inner Harbour may soon be part of history. A study of ways to improve drainage has been years in the making but will be complete by the end of the year, says the Land, Public Works and Transport Bureau. In response to an inquiry from member of the Legislative Assembly Paul Chan Wai Chi, bureau director Jaime Carion said the study would provide “technical support” to solve the area’s flooding problem. It would also be the first step and

“serve as an important link” to the overall project for the facelift of the Inner Harbour, Mr Carion said. The government has not yet announced a timetable for the rejuvenation of the area. The study is assessing ways to improve the area’s infrastructure, which may include increasing the height of embankments around the harbour and improving drainage. The government has a task force to tackle flooding in the area and to carry out the preparatory work,

including the study. Shops and houses close to the Inner Harbour are often flooded in the typhoon season, a problem that intensifies when heavy rain coincides with high tides. Mr Carion said the Civic and Municipal Affairs Bureau had plans to change the underground drainage network around the Inner Harbour to divert rainwater and run-off from the streets. Mr Carion said the flooding around the Inner Harbour was a “complicated

issue” that had many contributing factors and considerations, such as the impact on the business environment, transport, hygiene and the area’s historic value. In his inquiry, Mr Chan urged officials to release details of its plans, including short- and long-term solutions for the flooding around the Inner Harbour. His inquiry, lodged in July, came after typhoon Vicente savaged the city, causing flooding in low-lying areas. T.L.


September 13, 2012 business daily | 7

MACAU Macau investment in China grows in August Investment by Macau, Hong Kong and Taiwan funds in mainland China reached 89.1 billion yuan (112.5 billion patacas) last month alone, up by 8.5 percent year-on-year. However, the pace was slower than in the first seven months of this year, when growth reached 9.8 percent. Up to August investment by Macau, Hong Kong and Taiwan funds had topped 632 billion yuan. However, that accounted for less than 2.9 percent of all investment in China – 21.8 trillion yuan – during the first eight months of this year.

Chance of credit crisis slim, says consultant A credit crisis of the kind the United States experienced four years ago is unlikely to happen in China, says financial consultant Tyler Yang Luciana Leitão

luciana.leitao@macaubusiness.com

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hina is a relatively safe place to lend or borrow money, considering the savings habits of the public and heavy regulation by its government, says Tyler Yang, the chairman and chief executive of U.S. consulting firm Integrated Financial Engineering Inc. Mr Yang told Business Daily that a crisis similar to that in the United States four years ago might recur there because “people never learn the lesson and crises repeat themselves”. But he said the mainland was far from suffering a similar crisis, even though economic growth was slowing. “People are not used to borrowing or leverage,” he said. Mr Yang was in Macau recently to take part in a seminar arranged by the University of Macau. He has more than 20 years of experience in mortgage analytics and portfolio credit risk, and is the executive director of the Asian Real Estate Society. Beijing has set a target of 7.5 percent for economic growth in the mainland this year. Some analysts say the target may be missed because the global slowdown is hampering activity in the world’s second-biggest economy. The annual rate of growth has slowed for six successive quarters and some investors fear it may slow again in this quarter, despite attempts to fine-tune economic policy from last November. In the second quarter of this year, the annual rate of growth was 7.6 percent. Premier Wen Jiabao said on Tuesday that the mainland was on course to hit this year’s growth target. He said the government could use its 100 billion yuan (US$15.8 billion) fiscal stability fund to boost growth, if required.

Lessons taught The effects on Macau of the mainland’s economic slowdown are likely to be patchy. One likely outcome could be shrinking credit lines to VIP gamblers, curbing growth in gross gaming revenue. But it is only a slowdown, and as the mainland economy continues to grow, it will nurture the growth of a middle class that can afford to holiday in Macau and go shopping once they arrive. Mr Yang said the financial crisis of 2008 had taught some lessons. H e s aid it had tau ght th at backward-looking credit supervision – drawing conclusions about the future of a bank by looking at its past – was a mistake. After the crisis, banks and investors realised the need to be more forward-looking. “That’s a

China’s rate of growth has slowed for six successive quarters

major change in the global thinking on how do you manage credit risk,” Mr Yang said. He said the new Basel standards for banks required countercyclical measures. “It’s about the country’s supervisors and their discretion to increase the capital reserve requirement to balance the cycle.” The Basel standards apply to the mainland just as much as any other economy. “If China wants to do international business, it needs to comply with these regulations,” Mr Yang said. He said the 2008 crisis had done little damage to the mainland economy but that it had harmed Hong Kong and Taiwan. “In Hong Kong and Taiwan, I know there are a lot of people being hurt by the credit limitations.” But the crisis did draw the attention of the mainland regulators to certain financial instruments they had not previously given much thought to. They started worrying about mutual funds and pension funds, and what kind of assets investors were allowed to buy. Mr Yang said Beijing should intervene to ensure that big investors, particularly those that manage retirement funds and other investments crucial to the fabric of society, do not take excessively risky positions.

Don’t overreact Mr Yang said emerging economies also had some lessons to learn. About 20 years ago, developing economies thought the U.S. capital market system was the most efficient.

After the financial crisis, they became aware of the pitfalls of the system. “Now they know what the problem is and they can try to adjust before they adopt a similar approach.” Mr Yang said governments should not overreact when credit crises occurred. He said the US government had overreacted and was still doing so today, extending unnecessarily the length and depth of the slump. “The government has raised the insurance premium. This prevented a lot of otherwise qualified borrowers

In Hong Kong and Taiwan, I know there are a lot of people being hurt by the credit limitations Tyler Yang, Integrated Financial Engineering Inc.

from getting a mortgage and therefore they cannot buy a house. They left a lot of foreclosed houses on the market without buyers.” Mr Yang said the market needed a different approach to beat an extended slump. “The market needs sufficient credit or prudent credit lending to borrowers that can reasonably qualify to borrow.” He said governments needed to concentrate on making the markets stable and making sure the general population had the basic necessities. They had to “get their priorities straight”. Mr Yang said there was once a widely-held belief that while the economy was growing, assets became safer and the banks had more equity to invest. “When the market is already booming, the bank keeps pushing more oil, and the economy just keeps on booming. But that’s not a healthy thing.” Growth needed to be restrained. Mr Yang offered an old warning about history repeating. “People are forgetful, particularly investors in capital markets.”


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business daily September 13, 2012

GREATER CHINA

U.S. unions pressure Obama to act on Chinese car parts Trade with China becomes an electoral issue again

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.S. union groups early this year began a campaign to persuade President Barack Obama to clamp down on imports of auto parts from China, which they said are unfairly subsidised and threatened 1.6 million jobs in all 50 states. Now, with the November 6 presidential election fast approaching and votes on the line in the U.S. industrial heartland, the groups are looking for Mr Obama to announce a decision soon. “It’s been basically seven full months. That’s plenty of time to evaluate the merits of the case, and I do think the time to make a decision is now, absolutely,” said Scott Paul, executive director of the Alliance for American Manufacturing, which works with the United Steelworkers union. “This is an issue that’s critical to Ohio, and to Michigan and to Pennsylvania and even to states like Virginia and Wisconsin, which have a lot of auto parts jobs,” Mr Paul said. Ohio, a battleground state that Mr Obama won in 2008, is seen as particularly important to Mr Obama’s effort to defeat Republican challenger Mitt Romney in the November 6 election. Mr Romney has wooed union workers by promising to crack

down on China’s trade and currency practices beginning on day one, but the latest polls show him running behind Mr Obama. New trade data on Tuesday showed the U.S. trade deficit with China soared in July to a record US$29.4 billion, helping to underscore Mr Romney’s charge Mr Obama has not been tough enough.

House Democrats urge action After nearly all 190 Democrats in the U.S. House of Representatives sent Mr Obama a letter in March calling for action on Chinese-made auto parts, White House adviser Gene Sperling told Reuters the administration took the issue “very seriously and we are very carefully reviewing it.” Nkenge Harmon, spokeswoman for the U.S. Trade Representative’s office, declined recently to say whether a decision was imminent. MS Harmon also would not say if administration had decided not to act. Mr Paul said he believed the issue was still being discussed at senior levels within the White House. The Economic Policy Institute, a think tank supported by labor groups, estimates the Chinese auto parts industry has received about US$27.5

billion in subsidies since 2001. Those generous handouts are the second leading cause of job losses in the U.S. auto parts sector, behind outsourcing to Mexico, United Auto Workers President Bob King has said. The steelworkers successfully lobbied Mr Obama in 2009 to curb tire imports from China, an action the union says helped create hundreds of new jobs. However, Romney called this move protectionist despite his promise to get tough on Beijing. China reacted angrily to the move and imposed tit-for-tat retaliation against U.S. poultry exports. It also challenged the move at the World Trade Organization, but

US$27.5 billion

Estimated value of subsidies received by Chinese companies since 2001

Chinese companies expansion drive Asia-Pacific credit up Acquisitions reach US$78.1 billion, year-to-date

C

Chinese companies go on a shopping spree

hinese companies swooping on assets in Europe and the U.S., from metal markets to cereal companies, are driving a 56 percent increase this year in acquisition-related lending in Asia. Some US$2.8 billion of loans used to fund purchases of corporate stakes has been signed since December 31, up from US$1.8 billion the same period in 2011, as overall syndicated deals in the Asia-Pacific region slumped, according to data compiled by Bloomberg. While the number of loans dropped to 109 from 120, the average size of transactions rose 66 percent. Hong Kong Exchanges and Clearing Ltd.’s US$2.2 billion buyout of the London Metal Exchange and Bright Food Group Co.’s about US$1.15 billion purchase of a majority stake in Weetabix Ltd. are some of the biggest loan-backed acquisitions in Asia this year. Corporates in the world’s secondbiggest economy are expanding abroad as they seek to create global companies and shift the nation’s economy beyond export-processing industries as growth slows to a three-year low. “We’re seeing more large-sized corporate acquisitions driving the loan market,” said Mohamed Atmani, the Hong Kong-based head of Asia exJapan acquisition and leveraged finance at UBS AG. “There’s a lot of activity emanating out of China as corporates seek to take advantage of attractive

U.S. union groups say Chinese exports of auto parts

international trade judges said Mr Obama acted within trade rules. Labour groups have urged the Obama administration to file a case against Chinese auto part subsidies at the WTO or take the even more unusual step of “self-initiating” U.S. anti-dumping and countervailing duty proceedings against Beijing. The second course could be more difficult since the U.S. imports many auto parts from China and the administration would have to file a series of cases to cover them all. In addition, Mr Obama would have to persuade the U.S. International Trade Commission, an independent government agency,

valuations and buy companies abroad to secure access to natural resources and acquire technology and brands.” China outbound acquisitions total US$78.1 billion this year versus US$72.4 billion in the same period of 2011 and US$60.8 billion in 2010, according to data compiled by Bloomberg.

National interest Syndicated lending is growing at the slowest pace in seven years as companies face rising borrowing costs and opt for more private, so-called bilateral facilities and bonds. About US$33.3 billion of loans have been signed since July 1, down 65 percent from the same period of 2011 and the slowest start to a second- half since 2005, the data show. Although Chinese banks, encouraged to support takeovers done in the national interest, are funding significant portions of the region’s acquisition-related activity, international lenders are also competing to finance the deals. Policy banks have in some cases provided at least 50 percent of the leveraged financing, with the remainder of the loan package split among a group of foreign banks. “I’m fairly optimistic we’ll see strong loan volumes out of China in the coming six to 12 months,” Atul Sodhi, the Hong Kong-based head of Asia-Pacific loan syndication at Credit Agricole SA, said. “Outbound mergers and acquisitions by Chinese companies are on the rise and in addition there’s increased stimulus that’s being provided by the government to improve the state of the economy. That will also work to boost liquidity and hence loan volumes,” said Mr Sodhi, who is also chairman of the Asia-Pacific Loan Market Association. Bloomberg


September 13, 2012 business daily | 9

greater china

Huawei to invest US$2 bln in Britain Company’s global ambitions complicated by security concerns

C

are unfairly subsidised

to approve the investigations, a role usually played by industry attorneys, not the federal government. Unlike the tires case, union groups never filed a formal petition to set a deadline for Mr Obama to make a decision on Chinese auto parts imports. But they hope the approaching election will prompt him to take action. Tim Reif, general counsel in the U.S. Trade Representative’s office, who is in China this week for talks, told reporters in June that any action against China on the automotive front would be based on a “careful examination of the facts”. Reuters

hinese group Huawei Technologies Co. Ltd, the world’s second-largest telecoms equipment maker, is to invest US$2 billion expanding its operation in Britain, creating about 700 new jobs in the next five years. Founder and chief executive Ren Zhengfei outlined Huawei’s plan yesterday, when he also met Prime Minister David Cameron. “The UK is an open market, which welcomes overseas investment. I am, therefore, very pleased today to be announcing the US$2 billion

investment and procurement plan, promoting the development of openness and free trade,” Mr Ren said. Mr Cameron, who has been targeting overseas investment to help kick-start economic growth, said: “I want to see more companies invest in the U.K. as we work to achieve sustainable and balanced growth within our economy. “The British government values the important relationship with China, both countries have much to offer each other and the business environment we are creating in the U.K. allows us

Ren Zhengfei, chief executive of Huawei Technologies

to maximise this potential.” Huawei, whose expansion plans have been met with suspicion in Australia and the United States over concerns about cyber security, said it would invest 650 million pounds (US$1.0 billion) in Britain, where it will build its workforce to over 1,500 by 2017. A further 650 million pounds will be spent buying components over the next five years, it said. The company, founded by Mr Ren in 1987 after he was made redundant by China’s military, has diversified into consumer devices and enterprise networking equipment as growth in its core telecoms gear market has stalled. The group said it worked with all the major telecom operators and broadband service providers in Britain, where plans for the first superfast mobile broadband service were also unveiled yesterday. Three Huawei products - a smartphone, a mobile wifi hub, and a mobile broadband dongle - were included in the line-up of launch devices for the new network from operator EE. Mr Ren’s background with the Chinese military has been cited as hindering its progress overseas, although he has denied close links, pointing out he was made redundant from the People’s Liberation Army three decades ago. Huawei has been actively hiring foreign executives, including former government officials and industry figures, in various parts of the company including senior positions and research and development, to help it achieve its global goals. Reuters

China’s films struggle for festival exposure Domestic commercial and political considerations hindering international contacts

T

he Chinese cinema industry may be the second largest in the world, but its films have been absent from major competitions at the most prestigious international festivals in the past year. Critics say pressure on directors to create commercially successful and politically safe products means less scope for artistic ambition at a time when China’s filmmakers are focusing on a booming domestic market. The Venice Film Festival concluded last week and while the 80-year-old event has traditionally showcased Chinese cinema, there was no representative this year into the final list of 18 selected for its major competition, the Golden Lion. It was a similar case at this year’s Cannes festival, with no Chinese films being selected for the Palm D’or. “The shame is that the past 12 months have been an exceptional period for Chinese-language cinema,” said Stephen Cremin, co-founder of the influential Film Business Asia website tracking trends in Chinese cinema. “Filmmakers are broadening the range of local genre cinema,” he said, referring to an increasing number of Chinese takes on traditional horror, fantasy and gangster film templates. “Even if many of these experiments have disappointed at the box office, they should still be recognised in a festival context. There is no international

festival outside China that has stepped up as a platform,” he said. “And in China, a handful of gatekeepers still determine how its cinema is presented to the outside world. Festival programmers lack the self-confidence to look at China’s films as films, and not as political statements.” The last time a mainland Chinese film won the Golden Lion was 2006,

Festival programmers lack the self-confidence to look at China’s films as films, and not as political statements Stephen Cremin, Film Business Asia

when Jia Zhangke’s “Still Life” picked up the award, while Chen Kaige’s “Farewell My Concubine” in 1993 remains the only Chinese film to win the Palm D’Or. Chen surprised many this week

Looking for a new international hit

with his comments at the Toronto International Film Festival, in which he cited a “big cultural gap” preventing Western audiences relating to films “made in the East” and vice-versa. But critics say his comments put him at odds with a growing trend of international cooperation on financing, production and distribution of films. The situation in Venice this year prompted festival director Alberto Barbera to call an unprecedented press conference for mainland Chinese media. At it, he stressed that the event remained supportive of Chinese cinema, despite the scarcity of its films screening there, something he explained as merely a “coincidence”. One film that did make it to Venice was “Xiao He” (Lotus), a look at the day-to-day life of a strongwilled woman in modern China that screened during the Critics’ Week sidebar programme. Its first-time director, Liu Shu, believes the lack of representation

says much about the state of play in modern Chinese cinema. “(It) has a lot to do with the Chinese government’s control on films,” she told AFP. “Filmmakers simply can’t freely make films or express their ideas. The majority of Chinese filmmakers are now making big films to please the crowds. Art house movies just don’t have a market in China.” China’s annual box office returns have now surpassed Japan’s and are expected to reach 18 billion yuan (US$2.8 billion) this year, putting the country behind only North America’s US$10.2 billion in receipts. With the Chinese market growing at an estimated rate of 40 percent a year, the international film industry has been increasingly active in looking for avenues through which to not only screen productions in China but to enter the domestic market through co-productions. AFP


10 |

business daily September 13, 2012

ASIA

PM Noda to declare intention to abandon nuclear power Report points to 2030 deadline for nuclear-free Japan

J

apan will abandon nuclear power within the next three decades under new government policy on the post-Fukushima energy mix, a newspaper said yesterday. Prime Minister Yoshihiko Noda’s administration will declare its intention to permanently shut down reactors by some time in the 2030s, the Mainichi Shimbun reported, citing unnamed government sources. The move would bring resourcepoor Japan into line with Germany, which has said it will wean itself off nuclear power by 2022, and comes as regular vocal protests against nuclear power continue. The government “will formally decide at an energy and environment meeting this weekend” to stop the use of nuclear, the paper said. Tokyo has worked to hammer out a new energy policy in the wake of last year’s crisis, when reactors

at Fukushima were swamped by the tsunami, sparking meltdowns that spread radiation over a large area. In the months that followed, Japan’s entire stable of reactors were shut down for routine safety checks, with only two of them ever having been restarted, and those in spite of often vocal public protest. Last week, Mr Noda’s ruling Democratic Party of Japan (DPJ) issued a policy recommendation saying Japan should “put every political resource to realise a situation where the number of nuclear plants operated be zero in the 2030s”. The DPJ listed three principles to achieve this: not constructing new nuclear plants, stopping old nuclear plants after 40 years of operation, and only approving the restart of nuclear plants that had passed safety checks by a nuclear regulator. The policy paper recommended

Japan make greater use of renewable energy, and take further energy saving measures, including the use of smart metering. It also said Japan should develop resources in nearby waters and look to cheaper procurement of liquefied natural gas and other fossil fuels, including shale gas. Japan, with precious few resources of its own, is presently heavily dependent on oil from the Middle East and has been forced to ramp up its imports to make up the energy shortfall over the last 18 months. Nuclear had provided around a third of the country’s electricity before the disaster at Fukushima. Mr Noda said on Monday he will incorporate the DPJ’s recommendations into his new energy policy, which is expected to be finalised later this week. Ahead of a general election

No new reactors after Fukushima

expected this autumn, nuclear energy has become a hot button issue in Japan with regular protests that sometimes attract tens of thousands of people calling for it to be ditched. At the same time the country’s powerful business lobbies have worked hard to push for a restart of shuttered reactors, fearing power shortages. Germany last year said it would

Australia Health Minister slams ‘sick joke’ cigarette packs New packaging regulations still under challenge

A

ustralia’s Health Minister Tanya Plibersek slammed as a “sick joke” yesterday new cigarette packs on sale as part of the national phase-in to plain packaging which play on drab branding and claim it’s “what’s on the inside that counts.” Tobacco products in Australia will have to be sold in drab, uniform khaki packaging with graphic health warnings from December 1 under a new anti-smoking policy upheld last month by the nation’s highest court. In order to meet the shelf deadline products must be manufactured in plain packets from October 1

and Imperial Tobacco rolled out one last branded packet yesterday which attracted the ire of the Health Minister. The new box shows the Peter Stuyvesant brand ripped at one corner to reveal the new drab-look box and comes with information to customers about the coming changes claiming “it’s what’s on the inside that counts”. “We’re going plain early because we know Peter Stuyvesant will continue to live on inside,” Imperial’s advertising says. Ms Plibersek condemned the interim packets as a “the ultimate

sick joke from big tobacco” and said they exposed the falseness of industry complaints that they would not be able to meet the December deadline. “That packaging at the moment is not illegal but I can tell you it’s unprincipled. The tobacco companies are using their packs to have a last desperate gasp at promoting their brand,” the health minister said. “And yes, they’re right, it’s what’s in the pack that counts, and what we used to call them when I was a kid was cancer sticks.” A spokeswoman for Imperial said the packaging was “a mechanism to provide factual information about

Tobacco products in Australia will have plain packaging from December 1

upcoming legislative changes to adult consumers of the Peter Stuyvesant brand of cigarettes. “It is also important to inform our adult consumers that the product itself will remain unchanged,” the spokeswoman told AFP. Tobacco firms failed in their

Japanese car sales plunge in South Korea Dispute over islets may take a toll on trade, companies fear

J

Escalating political tension keeping customers away

apan’s Nissan Motor Co. and the Lexus brand at Toyota Motor Corp. saw August sales plunge in South Korea as tension between the two countries escalated over disputed islets. Shipments to South Korea for Lexus, the luxury brand of Asia’s biggest carmaker, plummeted 39 percent last month compared with a year earlier, according to data on Korea Automobile Importers and Distributors Association’s website. Nissan’s plunged 71 percent and its luxury brand Infiniti’s fell 50 percent. Total sales of Japanese carmakers in South Korea dropped 12 percent and importers attributed the decline to the dispute, according to the Korea Chamber of Commerce and Industry’s

e-mailed statement. Of the surveyed importers, 26 percent said the dispute over the islets affected sales and 81 percent said shipments will be hurt if the tension persists. The two countries’ dispute over islands known as Dokdo in Korean and Takeshima in Japan have escalated since South Korean President Lee Myung Bak visited them on August 10. Of about 500 companies that have business ties with Japan that were surveyed by the Korea Chamber of Commerce and Industry, 65 percent have said they will suffer if the dispute drags on. “If the tension further heightens or if the dispute prolongs, I think we can expect a significant drop in sales,”


September 13, 2012 business daily | 11

asia

India approves eight foreign pharmaceutical investments New Finance Minister in drive to increase foreign direct investment

I

shut down its 17 nuclear reactors by 2022, while in Italy, a referendum rejected any resumption of nuclear energy generation, which was halted after the 1986 disaster at Chernobyl. Switzerland has approved plans to close its five reactors by 2034. However a number of Asian countries are pushing ahead with expanding their nuclear programmes. AFP

ndia has approved eight foreign investments in drug makers worth US$333 million in total, signalling the finance ministry may be winning a battle to open up the country’s fast-growing markets and giving a boost to global drug makers hungry for growth. As a condition of its approval, however, the government said the foreign companies including U.S.based Pfizer and Germany’s B-Braun would have to continue producing cheap drugs and maintain spending in ongoing research and development projects run by their Indian partners for five years. Since becoming finance minister last month, P. Chidambaram has directed officials to fast-track foreign direct investments (FDI) as part of a drive to revive investor confidence after India’s economy grew at its slowest pace in nearly three years. Proposals had been delayed for months due to a lack of clarity over government policy, with some government bodies expressing concerns that medicine prices might rise after a few Indian drug makers sold businesses to overseas rivals. In all, Mr Chidambaram approved 21 foreign direct investment proposals totalling 24.1 billion

P. Chidambaram, India’s finance minister

rupees (US$433.5 million) on the recommendation of the Foreign Investment Promotion Board (FIPB). The proposals were cleared after the government decided to allow up to 49 percent foreign direct investment in domestic companies with conditions, two government

sources said. The present rules allow 100 percent foreign investment for new companies being set up in India while overseas investment in existing companies needs FIPB approval. The government did not give details of the investments. A McKinsey report earlier this year projected India’s pharmaceutical market would triple to US$20 billion by 2015 and move into the world’s top-10 pharmaceutical markets. “The absolute growth of US$14 billion will be next to the growth potential of the U.S. and China, and in the same league as the growth in Japan, Canada and the UK,” it said. Abbott Laboratories bought Mumbai-based Piramal Healthcare’s Indian business for US$3.72 billion in 2010 while Ranbaxy founders sold a controlling stake in the company to Japan’s Daiichi Sankyo Co for US$4.2 billion in 2008. Global drugmakers such as Pfizer, GlaxoSmithKline, Sanofi also have a significant presence in the country and are looking to expand their businesses there. Abbott has the largest market share followed by India’s Cipla and GlaxoSmithKline. Reuters

Myanmar invites bids for airport development

attempt to have plain packaging struck down by the High Court of Australia, but the policy is still being challenged at the World Trade Organization and in an investment treaty lawsuit filed by Philip Morris Asia in Hong Kong.

M

said Mitsushige Akino, who oversees the equivalent of US$600 million in assets in Tokyo at Ichiyoshi Investment Management Co. “Still, compared to China, the sales volume of Japanese automakers in South Korea wasn’t very big to begin with, so the overall impact on the companies may be minimal.” No Japanese carmaker manufactures in South Korea. Japanese cars made up 15 percent of imports in South Korea in August. Imports made up 9.9 percent of total sales, according to the association. Toyota hasn’t seen a “major impact” on South Korea sales from the political situation, company spokesman Joichi Tachikawa said. Nissan, Japan’s secondbiggest carmaker, isn’t aware of any impact on South Korean sales from the dispute, said Chris Keeffe, spokesman for the Yokohama City, Japan-based carmaker. Both said their companies aren’t cutting back on marketing activities in South Korea, though individual dealerships may make their own adjustments.

yanmar’s Civil Aviation Department yesterday invited bids from the private sector in development of Mandalay International Airport in the northern city of Mandalay in the form of public private partnership with private sector financing, according to a public announcement of the department. Before the bid in November, prequalification is being invited from local and foreign firms in joint venture or consortium under the Myanmar Foreign Investment Law, the statement said. The Mandalay International Airport development program covers development of airport master plan, passenger terminal operation, ground handling, catering, cargo facilities and services, maintenance services for pavement, visual aid, electrical system and navigational aid. The deadline for submission for prequalification of private firms is set for October 15. Myanmar has been carrying out a plan of privatization of all domestic airport management businesses to promote the civil aviation industry. Besides the three existing international airports, Yangon, Mandalay and Nay Pyi Taw, there are also 29 regional airports in Myanmar totalling 32.

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business daily September 13, 2012

MARKETS Hang SENG INDEX NAME

NAME

PRICE

Day %

VOLUME

12.84

1.743265

14769019

CITIC PACIFIC

9.68

3.088392

CLP HLDGS LTD

64.7

CNOOC LTD

14.9

COSCO PAC LTD

6656485

ESPRIT HLDGS

PRICE

Day %

VOLUME

28.15

2.363636

53013908

CHINA UNICOM HON

ALUMINUM CORP-H

3.09

0.9803922

13558430

BANK OF CHINA-H

2.85

0.3521127

221922115

BANK OF COMMUN-H

5.13

0.3913894

27674243

BANK EAST ASIA

28.3

1.433692

2019628

BELLE INTERNATIO

14.6

0.1371742

AIA GROUP LTD

BOC HONG KONG HO

PRICE

Day %

POWER ASSETS HOL

63.95

0.2351097

2080067

8404867

SANDS CHINA LTD

28.95

-1.697793

13270272

0.3100775

3175537

SINO LAND CO

13.88

3.27381

11230503

1.360544

47917874

SUN HUNG KAI PRO

106.3

1.625239

8771909

10.26

2.6

4790837

SWIRE PACIFIC-A

92.35

0.435019

2057690

13.18

1.07362

4880020

TENCENT HOLDINGS

250.4

1.294498

3105448

27.6

2.60223

6110025

TINGYI HLDG CO

23.8

-1.244813

5779962

113.4

0.8

1143923

WANT WANT CHINA

9.58

0.209205

10758337

5218466

24.1

1.048218

6505318

HANG LUNG PROPER

CATHAY PAC AIR

12.64

0.4769475

4712697

HANG SENG BK

CHEUNG KONG

HENDERSON LAND D

52.5

3.143418

HENGAN INTL

76.6

0.06531679

2670245

HONG KG CHINA GS

18.66

0.974026

7181722

HONG KONG EXCHNG

108.6

0.1845018

5167595

70.4

0.8595989

19808643

111.7

2.009132

5911432

CHINA COAL ENE-H

6.89

2.377415

35442134

CHINA CONST BA-H

5.07

1.4

258917082

CHINA LIFE INS-H

22.1

0.6833713

26549674

CHINA MERCHANT

23.6

1.070664

3163260

CHINA MOBILE

82.85

0.9135201

17801037

HUTCHISON WHAMPO

CHINA OVERSEAS

18.96

1.607717

25566655

IND & COMM BK-H

CHINA PETROLEU-H

7.14

1.564723

63660617

LI & FUNG LTD

CHINA RES ENTERP

24.7

1.85567

3485092

MTR CORP

CHINA RES LAND

HSBC HLDGS PLC

72

2.710414

18566076

4.26

0.9478673

211329577

12.08

-1.145663

34463344

28.9

1.048951

2950045

NAME

MOVERS

44

5

VOLUME

0 20090

INDEX 20075.39 HIGH

20085.9

LOW

19667.49

52W (H) 21760.33984

16.5

2.230483

6169720

NEW WORLD DEV

10.34

3.4

14839077

CHINA RES POWER

17

-3.628118

8624825

PETROCHINA CO-H

9.58

1.375661

73951438

CHINA SHENHUA-H

29.8

2.405498

13002766

PING AN INSURA-H

57.55

0.8764242

8415199

PRICE

DAY %

VOLUME

22.95

1.324503

11516467

YANZHOU COAL-H

(L) 16170.35

19660

10-Sep

12-Sep

Hang SENG CHINA ENTErPRISE INDEX NAME

NAME

PRICE

DAY %

VOLUME

AGRICULTURAL-H

2.82

1.075269

103174500

PRICE

DAY %

VOLUME

11.08

1.651376

AIR CHINA LTD-H

4.62

0.8733624

11966762

CHINA PETROLEU-H

7.14

1.564723

63660617

21484749

ZIJIN MINING-H

2.73

1.486989

ALUMINUM CORP-H

3.09

0.9803922

13558430

CHINA RAIL CN-H

6.89

1.472754

51400637

15265000

ZOOMLION HEAVY-H

8.84

2.552204

ANHUI CONCH-H

22.9

4.805492

28800492

CHINA RAIL GR-H

3.27

22097131

0.9259259

32886680

ZTE CORP-H

10.56

3.125

BANK OF CHINA-H

2.85

0.3521127

221922115

CHINA SHENHUA-H

5888524

29.8

2.405498

13002766

BANK OF COMMUN-H

5.13

0.3913894

27674243

CHINA TELECOM-H

BYD CO LTD-H

15.8

2.998696

5667026

DONGFENG MOTOR-H

4.64

1.754386

74697738

10.12

1.606426

CHINA CITIC BK-H

3.56

-0.5586592

102435528

GUANGZHOU AUTO-H

23661086

5.52

5.544933

CHINA COAL ENE-H

6.89

2.377415

35442134

HUANENG POWER-H

16381120

5.61

-0.7079646

10010087

CHINA COM CONS-H

6.33

-0.4716981

14220043

CHINA CONST BA-H

5.07

1.4

258917082

IND & COMM BK-H

4.26

0.9478673

211329577

JIANGXI COPPER-H

18.28

0.3293085

12075056

CHINA PACIFIC-H

2.9

0.3460208

15470871

PETROCHINA CO-H

9.58

1.375661

73951438

CHINA LIFE INS-H

22.1

0.6833713

26549674

PICC PROPERTY &

9.19

1.10011

11637081

CHINA LONGYUAN-H

5.24

-1.872659

4450531

PING AN INSURA-H

57.55

0.8764242

8415199

CHINA MERCH BK-H

12.66

1.28

8494380

SHANDONG WEIG-H

8.6

-0.8073818

3251472

CHINA COSCO HO-H

NAME

MOVERS

35

0 9520

INDEX 9488.52 HIGH

9512.38

LOW

9256.82

CHINA MINSHENG-H

6.11

1.833333

32231898

SINOPHARM-H

24.9

3.534304

2039935

52W (H) 11916.1

CHINA NATL BDG-H

8.07

2.281369

71274774

TSINGTAO BREW-H

43.05

0.1162791

996912

(L) 8058.58

13.14

0.4587156

5000198

WEICHAI POWER-H

24.05

0.6276151

2909858

CHINA OILFIELD-H

5

9250

10-Sep

12-Sep

Shanghai Shenzhen CSI 300 PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AGRICULTURAL-A

2.46

-0.4048583

40304758

DAQIN RAILWAY -A

6

-0.1663894

28161492

AIR CHINA LTD-A

5.03

1.616162

14987560

DATANG INTL PO-A

4.57

-1.508621

5925237

ALUMINUM CORP-A

5.32

1.140684

16291872

DONGFANG ELECT-A

14.93

0.606469

15.27

1.935915

27330610

EVERBRIG SEC -A

12.26

BANK OF BEIJIN-A

7.2

-0.5524862

17849704

GD MIDEA HOLDING

BANK OF CHINA-A

2.71

-0.3676471

29697570

GD POWER DEVEL-A

BANK OF COMMUN-A

4.21

-1.405152

75003177

9.5

-0.4192872

NAME

ANHUI CONCH-A

BANK OF NINGBO-A BAOSHAN IRON & S

4.55

-0.6550218

NAME

NAME

PRICE

DAY %

VOLUME

12.5

0.08006405

17716307

SANY HEAVY INDUS

10.18

1.092354

45743948

6096702

SHANDONG GOLD-MI

38.83

0.1289324

24802703

-0.3252033

6309868

SHANG PHARM -A

12.25

-0.08156607

10672698

9.18

0

9139999

SHANG PUDONG-A

7.48

-0.1335113

41199392

2.51

-0.7905138

28814675

SHANGHAI ELECT-A

4.25

0.9501188

4712939

GF SECURITIES-A

12.65

-0.3937008

74499497

SHANXI LU'AN -A

18.19

2.191011

25034260

15230891

GREE ELECTRIC

21.16

-1.121495

10163548

SHANXI XINGHUA-A

38.45

1.15759

2218241

49410663

GUANGHUI ENERG-A

14.67

1.102688

25231115

SHANXI XISHAN-A

13.48

1.201201

17083260

SAIC MOTOR-A

16.78

-0.1190476

7346161

GUIZHOU PANJIA-A

16.75

1.208459

18993547

SHENZEN OVERSE-A

5.87

-0.170068

17727258

CHINA CITIC BK-A

3.77

-1.049869

38365668

HAITONG SECURI-A

9.17

0

38786576

SUNING APPLIAN-A

7.03

0.4285714

86661232

CHINA CNR CORP-A

3.77

-0.2645503

27573598

HANGZHOU HIKVI-A

28.6

0.8818342

1629354

TSINGTAO BREW-A

33.64

0.2981515

807556

CHINA COAL ENE-A

7.1

0.9957326

12101514

HENAN SHUAN-A

57.49

1.590387

2006728

WEICHAI POWER-A

20.26

1.860231

11123312

BYD CO LTD -A

CHINA CONST BA-A

3.93

-0.2538071

15773401

HONG YUAN SEC-A

18.67

1.467391

13925731

WULIANGYE YIBIN

34.41

0

12817785

CHINA COSCO HO-A

4.06

0

12823565

HUATAI SECURIT-A

9.46

0.4246285

12618259

XIAMEN TUNGSTEN

42.06

1.008646

11984626

CHINA CSSC HOL-A

21.8

0.8325624

14358317

HUAXIA BANK CO

8.41

0.238379

20663655

YANGQUAN COAL -A

14.88

2.268041

21188595

CHINA EAST AIR-A

3.46

5.167173

63605570

IND & COMM BK-A

3.75

-1.055409

30446284

YANTAI CHANGYU-A

51.43

0.4099961

1976918

CHINA EVERBRIG-A

2.75

0

22240869

INDUSTRIAL BAN-A

12.22

0.1639344

25650100

YANTAI WANHUA-A

13.18

-0.3025719

7609308

CHINA LIFE INS-A

18.39

-0.1086366

9841693

INNER MONG BAO-A

35.81

1.819733

40118038

YANZHOU COAL-A

18.89

3.620406

9479684

CHINA MERCH BK-A

10.12

0

33366528

INNER MONG YIL-A

20.99

0.9134615

6374685

YUNNAN BAIYAO-A

62.02

-0.5611672

1046354

CHINA MERCHANT-A

10.48

0.3831418

7681846

INNER MONGOLIA-A

5.38

-0.3703704

80762795

ZHONGJIN GOLD

15.81

0.7006369

25369505

CHINA MERCHANT-A

21.12

-0.1890359

5373775

JIANGSU HENGRU-A

31.41

-1.195344

2831735

ZIJIN MINING-A

3.99

1.012658

72109193

52896718

JIANGSU YANGHE-A

126.1

0.3980892

1536084

ZOOMLION HEAVY-A

9

1.694915

55230641

JIANGXI COPPER-A

22.69

3.324226

23854818

10.57

0.6666667

18257704

JINDUICHENG -A

12.18

1.415487

8211548

CHINA MINSHENG-A CHINA NATIONAL-A CHINA OILFIELD-A CHINA PACIFIC-A CHINA PETROLEU-A

5.72

-0.3484321

6.89

1.323529

31677163

17.06

0.9467456

8379696

20

0.2506266

15457827

JIZHONG ENERGY-A

13.23

1.37931

21475074

6.15

0.1628664

14474681

KANGMEI PHARMA-A

16.5

3.904282

32501970

240.26

0.2210821

2902325

0.4244032

5848885

CHINA RAILWAY-A

4.66

1.304348

15840472

KWEICHOW MOUTA-A

CHINA RAILWAY-A

2.55

0.3937008

20046435

LUZHOU LAOJIAO-A

37.86

CHINA SHENHUA-A

22.6

0.9379187

8755026

METALLURGICAL-A

2.09

0

17277958

2.48

-0.4016064

9514978 143281340

CHINA SHIPBUIL-A

5.03

1.616162

83639083

NINGBO PORT CO-A

CHINA SOUTHERN-A

3.53

1.146132

55089470

PANGANG GROUP -A

4.02

4.6875

8.93

0.2244669

ZTE CORP-A

MOVERS

190

93

17 2340

INDEX 2320.071

CHINA STATE -A

3.1

-0.3215434

54753702

PETROCHINA CO-A

8733703

HIGH

2335.14

CHINA UNITED-A

3.75

-0.530504

70860735

PING AN BANK-A

13.98

-0.2853067

12245281

LOW

2296.93

CHINA VANKE CO-A

8.45

-0.3537736

46291776

PING AN INSURA-A

41.22

0

13384306

CHINA YANGTZE-A

6.3

-1.253918

23281284

POLY REAL ESTA-A

10.46

-0.2859867

35657099

CITIC SECURITI-A

11.34

0.4428698

55949138

QINGDAO HAIER-A

10.87

-3.033006

19231752

CSR CORP LTD -A

4.3

0.4672897

26184872

QINGHAI SALT-A

32.09

-0.5577936

4815260

PRICE DAY %

Volume

52W (H) 2796.352 (L) 2186.962

2290

10-Sep

12-Sep

FTSE TAIWAN 50 INDEX NAME ACER INC

NAME

26.95

1.125704

21976622

FORMOSA PLASTIC

23

0.2178649

32324142

ASIA CEMENT CORP

36

0.5586592

ASUSTEK COMPUTER

306

2.512563

AU OPTRONICS COR

11.3

CATCHER TECH

PRICE DAY %

Volume

NAME

PRICE DAY %

Volume

82.4

0.4878049

5007572

FOXCONN TECHNOLO

118.5

2.155172

4694004

FUBON FINANCIAL

30.55

4120661

HON HAI PRECISIO

93

5.116279

208591889

HOTAI MOTOR CO

208.5

0.7246377

272447

146

5.797101

23753325

HTC CORP

280

6.463878

30729166

CATHAY FINANCIAL

29.05

1.219512

15822817

HUA NAN FINANCIA

16.1

1.257862

4114419

YUANTA FINANCIAL

14

0.7194245

11242291

CHANG HWA BANK

15.5

0.9771987

8833566

LARGAN PRECISION

651

1.401869

1816815

YULON MOTOR CO

54

1.503759

6931719

CHENG SHIN RUBBE

74.7

2.04918

8978492

LITE-ON TECHNOLO

36

0

2953204

ADVANCED SEMICON

TAIWAN MOBILE CO

108

2.369668

3596352

13102599

TPK HOLDING CO L

429

6.982544

11026744

1.3267

13404706

TSMC

84.5

0.1184834

37513971

2.876106

65059852

UNI-PRESIDENT

49

0.7194245

12666357

UNITED MICROELEC

12 -0.8264463

28337758

33.4 -0.5952381

13130022

CHIMEI INNOLUX C

10.6

3.921569

116819172

MEDIATEK INC

336.5 -0.7374631

10162025

CHINA DEVELOPMEN

7.15

0.9887006

49956204

MEGA FINANCIAL H

22.45

1.126126

17111464

CHINA STEEL CORP

26.3

2.33463

34888523

NAN YA PLASTICS

56.4

2.73224

4430630

18

0.2785515

24465742

PRESIDENT CHAIN

157

0.3194888

1385583

CHINATRUST FINAN CHUNGHWA TELECOM

90.9

0.3311258

6948318

QUANTA COMPUTER

78

1.036269

5214711

COMPAL ELECTRON

25.7

0.1949318

7139148

SILICONWARE PREC

33.75

-0.147929

7785170

DELTA ELECT INC

112.5

0

4727846

SINOPAC FINANCIA

11.75

0.8583691

16984128

FAR EASTERN NEW

32.7

3.154574

24604754

SYNNEX TECH INTL

67

1.361573

5424764

FAR EASTONE TELE

74.3

1.502732

8026639

TAIWAN CEMENT

35.15

0.7163324

10710936

FIRST FINANCIAL

17.7

0.8547009

17312013

TAIWAN COOPERATI

16.3

0.617284

7928108

FORMOSA CHEM & F

77.3

1.710526

4968573

TAIWAN FERTILIZE

75.6

1.749664

7250347

FORMOSA PETROCHE

85.3

1.547619

1266765

TAIWAN GLASS IND

28.3 -0.1763668

1748134

WISTRON CORP

MOVERS

44

4

2 5230

INDEX 5224.85 HIGH

5224.85

LOW

5127.53

52W (H) 5621.53 5120

(L) 4643.05 10-Sep

12-Sep


September 13, 2012 business daily | 13

MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) GAlAXy ENtErtAINMENt

MElco crowN ENtErtAINMENt

MGM cHINA HolDINGS

23.5

33.5

23.4

33.1

23.3

32.7

23.2

31.9

23.0

Min 22.8

22.8

last 23.15

SANDS cHINA ltD

Max 33.2

Average 32.045

Min 31.2

last 31.95

29.4 29.2 29.0 28.8 Min 28.75

last 28.95

28.6

PRICE

Average 16.329

DAY %

YTD %

(H) 52W

97.67

0.514562108

-0.923108136

110.6499939

78.15999603

BRENT CRUDE FUTR Oct12

116.22

0.710571924

11.14086258

123.2900009

89.11000061

GASOLINE RBOB FUT Oct12

306.88

0.831279777

21.42122339

307.4399948

220.5600023

GAS OIL FUT (ICE) Oct12

1004.5

0.828105395

11.8596882

1044.75

799

3.007

0.501336898

-9.482239615

4.590000153

2.299999952

NATURAL GAS FUTR Oct12 HEATING OIL FUTR Oct12

320.53

0.615249396

12.17147857

333.8899851

252.5300026

Gold Spot $/Oz

1743.92

0.7214

11.439

1844.93

1522.75

Silver Spot $/Oz

33.9919

1.3437

22.1193

41.3175

26.085

Platinum Spot $/Oz

1636.25

2.4257

17.336

1827.5

1339.25

677.4

1.2556

3.6572

739.72

537.54 1827.25

Palladium Spot $/Oz LME ALUMINUM 3MO ($)

2080

0.970873786

2.97029703

2403.75

LME COPPER 3MO ($)

8090

0.272682201

6.447368421

8880

6635

LME ZINC

2017

0.099255583

9.322493225

2221

1718.5

3MO ($)

LME NICKEL 3MO ($)

Min 16.2

16.35

18.9

16.3

18.7

16.25

18.5 18.3 Max 19

Average 18.857

PRICE MAJORS

ASIA PACIFIC

CROSSES

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

16825

0.298062593

-10.0748263

22150

15236

0.237771739

-2.959552779

17.5

14.15499973

780.25

0.321440051

33.09168443

849

499

WHEAT FUTURE(CBT) Dec12

885.5

0.198019802

22.98611111

953.25

629.5

SOYBEAN FUTURE Nov12

1713.5

0.705260065

42.28773095

1789

1115.75

COFFEE 'C' FUTURE Dec12

177.35

-0.112644326

-24.85169492

271.5

153.6999969

CROWN LTD

SUGAR #11 (WORLD) Mar13

20.27

0.545634921

-13.22773973

25.29999924

19.47999954

AMAX HOLDINGS LT

COTTON NO.2 FUTR Dec12

75.58

0.867476311

-13.9571949

102.25

64.61000061

BOC HONG KONG HO

Dec12

last 19

Min 18.34

NAME ARISTOCRAT LEISU

CHEUK NANG HLDGS

World Stock MarketS - Indices

DAY %

1.0499 1.6114 0.9386 1.2888 77.9 7.9877 7.7551 6.3269 55.17 30.94 1.2281 29.607 41.581 9577 81.78 1.2097 0.79984 8.1527 10.2941 100.39 1.03

1.1464 0.4801 0.4581 0.719 0.1669 -0.0113 -0.0103 0.1328 0.3172 0.4848 0.2606 0.206 -0.0986 0.0418 -0.9599 -0.253 -0.2375 -0.5875 -0.7218 -0.5379 0

YTD %

(H) 52W

2.8406 3.6737 -0.0533 -0.5632 -1.2709 0.149 0.1586 -0.5042 -3.8155 1.9716 5.5777 2.2697 5.4328 -5.3044 -4.0939 0.5861 4.1946 -0.2269 0.5625 -0.7272 0.0097

(L) 52W

1.0857 1.6302 0.9972 1.4247 84.18 8.0413 7.8077 6.4029 57.3275 32 1.3199 30.716 44.35 9662 88.637 1.24736 0.88308 9.0277 11.4015 111.6 1.0311

0.9388 1.5235 0.8568 1.2043 75.35 7.9823 7.7526 6.2769 47.225 30.16 1.2279 29.084 41.41 8685 72.057 1.19995 0.77553 7.7018 9.6245 94.12 1.0288

MACAU RELATED STOCKS

CENTURY LEGEND

PRICE

(H) 52W

(L) 52W

2.63

DAY % YTD % 2.33463

19.54545

3.25

1.88

VOLUME CRNCY 3125302

9

0.6711409

11.24845

9.4

7.47

1554888

0.061

0

-29.88506

0.119

0.055

0

24.1

1.048218

30.97826

24.95

14.24

6505318

0.255

0

10.86956

0.335

0.204

60000

3.21

2.555911

14.64286

3.5

2.3

342000 25566655

CHINA OVERSEAS

18.96

1.607717

46.23539

19.18

9.979

CHINESE ESTATES

9.7

-0.8179959

-22.4

13.68

8.3

0

CHOW TAI FOOK JE

9.76

0.7223942

-29.88506

15.16

8.4

4087400

EMPEROR ENTERTAI

1.55

8.391608

39.63964

1.55

0.97

3396200

FUTURE BRIGHT

1.15

0

173.8095

1.24

0.3

774000

GALAXY ENTERTAIN

23.15

0

62.57023

24.95

8.69

21947405

HANG SENG BK

1143923

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

US

13323.36

0.5211143

9.050914

13354.33984

10404.49

NASDAQ COMPOSITE INDEX

US

3104.526

0.01614033

19.1688

3139.612

2298.89

113.4

0.8

23.06023

113.6

84.4

FTSE 100 INDEX

GB

5809.28

0.2950525

4.253196

5989.07

4868.6

HOPEWELL HLDGS

26.1

2.152642

31.41994

26.45

18.56

2096306

DAX INDEX

GE

7363.91

0.735967

24.84695

7410.36

4965.8

HSBC HLDGS PLC

70.4

0.8595989

19.32203

71.8

56

19808643

NIKKEI 225

JN

8959.96

1.732411

5.967942

10255.15

8135.79

HANG SENG INDEX

HK

20075.39

1.095333

8.90184

21760.33984

16170.35

CSI 300 INDEX

CH

2320.071

0.3538663

-1.094362

2796.352

TAIWAN TAIEX INDEX

TA

7570.45

1.13986

7.047009

8170.72

HUTCHISON TELE H

3.52

-2.222222

17.72575

3.88

2.53

5884542

LUK FOOK HLDGS I

22.65

-0.2202643

-16.42067

37.1

14.7

1493000

MELCO INTL DEVEL

6.42

2.066773

11.26517

8.28

4.3

4325960

2186.962

MGM CHINA HOLDIN

12.8

0.9463722

33.4424

14.76

7.6

1412800

6609.11

MIDLAND HOLDINGS

4.33

0.4640371

9.508057

5.217

2.887

2554000

NEPTUNE GROUP

0.168

0

51.35135

0.205

0.08

4550000

NEW WORLD DEV

10.34

3.4

65.17571

10.96

6.13

14839077

SANDS CHINA LTD

13270272

KOSPI INDEX

SK

1950.03

1.564062

6.807653

2057.28

1644.11

S&P/ASX 200 INDEX

AU

4361.252

0.8196877

7.511078

4448.5

3840.2

ID

4174.097

0.4510083

9.21261

4234.734

3217.951

FTSE Bursa Malaysia KLCI

MA

1613.78

-0.02849638

5.425519

1655.49

1310.53

NZX ALL INDEX

NZ

839.401

0.9477824

15.0179

839.48

712.548

JAKARTA COMPOSITE INDEX

12.7

19.1

last 16.38

14.755

AGRICULTURE ROUGH RICE (CBOT) Nov12

NAME

last 12.8

16.4

(L) 52W

WTI CRUDE FUTURE Oct12

CORN FUTURE

Min 12.72

CURRENCY EXCHANGE RATES

NAME

METALS

Average 12.795

16.2 Max 16.38

Commodities ENERGY

Max 13

wyNN MAcAU ltD

29.6

Average 29.087

31.1

SJM HolDINGS ltD 29.8

Max 29.75

12.8

31.5

22.9 Average 23.160

12.9

32.3

23.1

Max 23.5

13.0

28.95

-1.697793

31.89066

33.05

14.9

SHUN HO RESOURCE

1.15

1.769912

15

1.28

0.82

0

SHUN TAK HOLDING

2.88

1.766784

12.53832

3.565

2.241

4990050

SJM HOLDINGS LTD

16.38

1.236094

30.98199

17.614

10.079

8608539

SMARTONE TELECOM

15.06

-2.207792

12.05357

18.5

9.8

8401511

WYNN MACAU LTD

18.96

4.751381

-2.769231

25.5

14.62

9382720

ASIA ENTERTAINME

3.53

-0.8426966

-39.96599

7.49

2.4

202484

PHILIPPINES ALL SHARE IX

PH

3474.73

0.5911456

14.11114

3531.5

2695.06

HSBC Dragon 300 Index Singapor

SI

588.16

0.67

18.5

NA

NA

STOCK EXCH OF THAI INDEX

TH

1255.79

0.5984043

22.47787

1258.18

843.69

BALLY TECHNOLOGI

46.09

0.3920714

16.50657

49.32

24.74

327140

HO CHI MINH STOCK INDEX

VN

388.35

0.4474678

10.46793

492.44

332.28

BOC HONG KONG HO

3.12

2.295082

30.15252

3.25

1.81

5379

Laos Composite Index

LO

1038.79

3.131298

15.49041

1064.23

876.33

GALAXY ENTERTAIN

2.98

2.758621

59.35829

3.24

1.08

4525

INTL GAME TECH

12.72

2.829426

-26.04651

18.1701

10.92

4475463

JONES LANG LASAL

74.87

0.5911595

22.21678

87.52

46.01

121286

LAS VEGAS SANDS

43.76

0.8062658

2.410486

62.09

34.72

7187464

MELCO CROWN-ADR

12.59

2.316132

30.87318

16.02

7.05

3698450

MGM CHINA HOLDIN

1.66

1.219512

39.2976

1.96

1.0025

5545

MGM RESORTS INTE

10.78

-1.282051

3.355702

14.9401

7.4

11571451

SHUFFLE MASTER

1965561

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

14.71

-4.666235

25.51194

18.77

7.55

SJM HOLDINGS LTD

2.07

-0.2890173

28.76555

2.2782

1.2624

5000

WYNN RESORTS LTD

104.8

1.658745

-5.149785

154.7051

90.108

1452252

AUD HKD

USD


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business daily September 13, 2012

Opinion Germany’s currency nostalgia is badly off the mark Clive Crook Bloomberg Columnist

L

et’s hope Germany thinks hard about George Soros’s proposal that it should lead the euro system or leave it. The more carefully Germans study this choice, the more eager they will be to make the present system work. Many German voters are understandably sick of their euro adventure. The next phase of crisis management, following the European Central Bank’s promise last week to buy the bonds of struggling economies, will demand new fiscal outlays from German taxpayers and expose them to greater risk of losses later. Their growing resentment of Greece, Ireland and Portugal – and soon Spain and Italy, whose appetite for assistance is vastly bigger – calls into doubt Europe’s efforts to stem the crisis and threatens the euro’s viability. Germans might reconsider their nostalgia for the deutsche mark, though, if somebody – their own government, for instance – had bothered to spell out the alternatives to the bailouts. Maybe Soros’s intervention will help that to happen. Up to now, the obvious alternative to keeping Greece and the others afloat within the euro system has been for them to leave or be ejected. This used to be unthinkable but isn’t any longer. The doomsday option has become a bargaining chip that weak and strong countries alike are trying to use.

Irreversible mistake Europe’s governments made a big and irreversible mistake when they accepted that a euro breakup was possible. This further undermined the system and made the European emergency harder to manage. Still, ejecting the weak remains unlikely because everyone understands it would cause immense damage, and would start an unravelling that might be hard to stop. Ejecting the strong is a better idea. It isn’t a new one, by the way.

In a column for Bloomberg more than a year ago, Anil Kashyap of the University of Chicago Booth School of Business argued that Germany and a small group of other strong performers should break away to form an ubereuro. Kashyap and Kenneth Griffin, of Citadel LLC, an investment firm, then wrote an article for the New York Times saying Germany should go it alone and gradually reintroduce the deutsche mark.

The bailouts that German taxpayers resent so bitterly were necessary partly to protect Germany’s undercapitalised banks from the consequences of their own actions

There’s a big difference between those two ideas – dividing the euro system into two multinational blocs, and letting Germany gradually bring back the deutsche mark. Consider the second, which presumably has the greater appeal for German voters who miss having a currency all their own under the guardianship of the Bundesbank. Resurrecting the deutsche mark has one main thing in common with ejecting the weaklings, and one decisive difference. What they have in common is a currency realignment that would improve the weaklings’ competitiveness – boosting their

exports, encouraging inward investment, and helping them to grow. True, the improvement in Greece’s competitiveness, say, would be much bigger if Greece left the system than if Germany did. (If Greece exited, its labour costs would fall relative to costs in France, Finland and other countries, whereas if Germany left, Greek labour costs relative to France and the others would be unchanged.) Nonetheless, Germany’s exit would help the Greek economy. The crucial difference is that Germany’s exit would not require wholesale redenomination of financial contracts and the mayhem that would result. Suppose Greece is kicked out. With their rapidly devaluing drachmas, Greeks would be unable to settle their euro-denominated debts. Contracts would have to be recast or repudiated, inflicting large and uncertain losses on creditors. And the question immediately arises: which weakling will be next to go?

Weak links If Germany brought back the deutsche mark, it would have both its strong creditor status and a rapidly appreciating currency, so its eurodenominated contracts could all be left in place. As Kashyap and Griffin explained, “Germany would be able to reintroduce the mark without altering the form of any current asset, liability or contract. For example, euros deposited in German banks would remain eurodenominated. So would outstanding German sovereign and corporate debt now denominated in euros.” There would still be complications, to put it mildly. (One of many questions: what becomes of the enormous surpluses the Bundesbank has built up at the ECB as a part of the bank’s settlement process, called Target2?) Nonetheless, a German exit would improve the weaklings’ competitiveness without the risk of contagion or of instantly throwing the

entire euro system into turmoil – without starting, as Barry Eichengreen called it, “the mother of all financial crises.” What’s the catch? Unforeseen complications aside, mainly this: the counterpart of growing exports and higher employment across the rest of the euro system would be falling exports and higher unemployment in Germany. The new deutsche mark would probably appreciate enough to push Germany into a deep recession. That’s why Germans should ponder Soros’s suggestion, and be careful what they wish for. They look at the euro system and see only impositions. But surrendering the deutsche mark (and before that, fixing their currency’s value relative to other European currencies) gave them an export performance and enormous balance-ofpayments surpluses that they otherwise wouldn’t have enjoyed. And let’s not forget those surpluses were recycled as unsafe lending to Europe’s weaklings. It takes bad lending as well as bad borrowing to build a debt crisis. The bailouts that German taxpayers resent so bitterly were necessary partly to protect Germany’s undercapitalised banks from the consequences of their own actions. So far, the division of the burden of adjustment between bad borrowers and bad creditors has been much to Germany’s advantage. The Irish economy was crushed to keep creditors whole. Ask the Irish who has been treated unfairly. Germany’s economy is an impressive performer, to be sure, but the Germans’ posture of moral superiority in this crisis is false. If a sense of shared responsibility – to say nothing of the European solidarity Germany has been prating about these past decades – isn’t enough to bind Germany to its neighbours, maybe naked self-interest will do the trick. Think about it, Germany. Resurrect the deutsche mark, and do the rest of Europe a favour. You’ll be the biggest loser. Bloomberg View

editorial council Paulo A. Azevedo, Tiago Azevedo, Duncan Davidson, Emanuel Graça, Cris Jiang Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief José I. Duarte Newsdesk Vitor Quintã (Chief Reporter) Tony Lai, Xi Chen Creative Director José Manuel Cardoso Designer Janne Louhikari Contributors Frederico Rato, Pereira Coutinho, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, John Si, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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September 13, 2012 business daily | 15

OPINION Business

wires Leading reports from Asia’s best business newspapers

Jakarta Post Privately-owned Sriwijaya Air, one of the largest domestic carriers in Indonesia, plans to launch a subsidiary that will operate a full service airline. Sriwijaya Air inked a deal with Brazilian aircraft maker Embraer SA to order 20 Embraer 190 jets, which can serve airports with shorter runways. They will cost around US$1 billion. The company would employ the Embraer aircraft for its new domestic airline and also plans to buy 20 737-800 airplanes from Boeing this year for some US$1.5 billion.

Yomiuri Shimbun Toshiba Corp. has agreed to pay US$30 million to settle a U.S. class action suit over an alleged price cartel for liquid crystal display panels. The firm has not admitted any antitrust violations. Under the agreement, subject to U.S. court approval, the plaintiffs, such as personal computer makers and retailers, will relinquish all claims for damages, fees, costs and other relief. Toshiba received a jury verdict in July that ordered the firm to pay US$87 million with regard to the same cartel.

Bangkok Post A Thai venture formed by Berli Jucker Plc (BJC) and Mongkol Group plans a 1-billion-baht (US$32.2 million) investment to open a supermarket chain in Vietnam. BJC is a leading manufacturing and trading firm in Thailand while Mongkol Group has been doing retail business in Vietnam since 1993. The new company would distribute 30 percent Vietnamese products and the rest from Thailand. The joint venture is aimed at strengthening Thai brands in Indochina, with the goal of increasing demand in Myanmar, Laos, Cambodia and Vietnam.

Business Times National Aerospace and Defence Industries Sdn Bhd (Nadi) and Lion Air’s owner PT Lion Grup teamed up to form Malindo Airways, a new low-cost carrier that could rival AirAsia Bhd and subsequently spark a price war. Malindo Airways is poised to start in May 2013 using the soon-tocompleted KLIA2 as its hub. It will begin with a fleet of 12 Boeing 737-900ER aircraft. It plans to offer flights within Malaysia and Indonesia, as well as to Thailand, China, India, Japan and Australia.

European exceptionalism Jean-Claude Trichet

Member of the Board of Directors of the Bank for International Settlements, was President of the European Central Bank (2003-2011)

T

he creation of Europe’s economic and monetary union is unique in the history of sovereign states. The eurozone constitutes a “society of states” of a completely new type, one that transcends the traditional Westphalian concept of sovereignty. Like individuals in a society, eurozone countries are both independent and interdependent. They can affect each other both positively and negatively. Good governance requires that individual member states and the European Union’s institutions fulfil their responsibilities. Above all, economic and monetary union means just that: two unions, monetary and economic. Europe’s monetary union has worked remarkably well. Since the euro’s launch in 1999, price stability has been maintained for 17 countries and 332 million people, with average yearly inflation of just 2.03 percent – better than Germany’s record from 1955 to 1999. Moreover, the eurozone has created 14.5 million new jobs since 1999, compared to 8.5-9 million in the United States. This is not to say that Europe does not have a serious unemployment problem; but there is no obvious inferiority in Europe: all advanced economies must boost job creation. Likewise, on a consolidated basis, the eurozone’s current account is balanced, its debt/ GDP ratio is well below that of Japan, and its annual publicfinance deficit is well below that of the U.S., Japan, and the United Kingdom. The euro per se thus does not explain why the eurozone has become the sick man of the global economy. To understand that, one has to consider the weakness of Europe’s economic union.

Weaknesses neglected For starters, the Stability and Growth Pact, intended to ensure sound fiscal policies in the eurozone, was never correctly implemented. On the contrary, in 2003 and 2004, France, Italy, and Germany, sought to weaken it. The European Commission, the European Central Bank, and the small and mediumsized eurozone countries prevented the SGP from being dismantled, but its spirit was gravely compromised. Moreover, eurozone governance did not include monitoring and surveillance of competitiveness indicators – trends in nominal prices and costs in member states, and countries’ external imbalances within the eurozone. (In 2005, long before the crisis, I called, on behalf of the ECB’s governing council, for appropriate surveillance of a number of national indicators,

European Parliament in Strasbourg

including unit labour costs.) A third source of weakness is that no crisis-management tools were envisaged at the euro’s launch. For much of the world at the time, “benign neglect” was the order of the day, particularly in the advanced economies. Finally, the high correlation between the creditworthiness of a particular country’s commercial banks and that of its government creates an additional source of vulnerability, which is particularly damaging in the eurozone.

Fiscal and certain other economic policies should be subject to activation of a eurozone ‘federation by exception’

Fortunately, much progress has been made, including significant improvements to the SGP and the introduction of surveillance of competitiveness indicators and national imbalances. New crisis-management tools have been put in place. And there is a consensus that the EU’s stability and prosperity requires completion of the single market and obligatory structural reforms for all 27 members. A proposed banking union would help to separate the commercial banks’ creditworthiness from that of their government. But none of this is enough. Instead of imposing fines on countries that transgress rules and ignore recommendations, as the SGP was supposed to do, the European Commission, the European Council, and – this is essential – the European Parliament should decide directly on measures to be immediately implemented in the country concerned. Fiscal and certain other economic

policies should be subject to activation of a eurozone “federation by exception”.

Exceptional powers The idea that sharing a single currency also means accepting limitations on fiscal sovereignty is not new. A “federation by exception” merely draws the logical consequences from the ineffectiveness of the fines envisaged by the SGP, and is fully consistent with the concept of subsidiarity that has been applied since the SGP’s introduction: as long as national economic policy complies with the framework, there are no sanctions. Perhaps the most important element of the “federation by exception” would be its strong democratic anchor. Its activation would be subject to a fully democratic decision-making process, with clear political accountability. More precisely, decisions to implement measures proposed by the Commission and already approved by the Council would require a majority vote by the European Parliament – that is, those representatives elected from the EU’s eurozone members. In such exceptional circumstances, the parliament of the country concerned should have the opportunity to explain to the European Parliament why it could not implement the recommendations proposed, while the European Parliament could explain why the eurozone’s stability and prosperity are at stake. But the

final word would belong to the European Parliament. In the past, I have suggested establishing a eurozone finance ministry, which would be responsible for activating economic and fiscal federation when and where necessary, and for managing new crisis-management tools like the European Stability Mechanism. It would also be responsible for overseeing the banking union, and it would represent the eurozone in all international financial institutions and informal groupings. But, most important, “federation by exception” would ultimately cease to be an exception. The finance minister would be a member of the EU’s future executive branch, together with the other ministers responsible for other federal departments. From this perspective, the Commission presages a future European democratic government, as German Finance Minister Wolfgang Schäuble, who has proposed instituting an elected president, has suggested. The Council, meanwhile, appears to anticipate the European Parliament’s future upper house, with the lower house already elected by all EU citizens. I am fully aware of the boldness of what I propose. But Europeans must learn the lessons of the recent past. We must clarify the nature of what must be done to secure governance that is both democratic and as effective as circumstances require. © Project Syndicate


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business daily September 13, 2012

CLOSING Southeast Asia bloc delayed

Genting Singapore unit fined

Southeast Asia’s planned economic union may be delayed until the end of 2015 as some countries are not ready. Surin Pitsuwan, secretary-general of the Association of Southeast Asian Nations, said economic ministers from the 10 countries had asked him for the delay. ASEAN has never been very clear on when the ASEAN Economic Community (AEC) would start, but foreign ministers decided in April that it should be January 1, 2015, Mr Surin told a meeting of energy ministers in Phnom Penh. “Your economic colleagues looked around the landscape and realised that they need one more year,” he said.

Genting Singapore’s casino broke the law by partially reimbursing the annual entry fee paid by some local people, and staff could face criminal charges for providing misleading information, the city state’s casino regulator said yesterday. From February to May 2011, Genting Singapore unit Resorts World Sentosa Pte. Ltd gave incentives such as concert tickets and hotel accommodation to around 3,400 locals who paid a S$2,000 (US$1,627) annual levy to enter the casino, the Casino Regulatory Authority of Singapore said. “Casino operators are prohibited from refunding or reimbursing the entry levy, whether directly or indirectly,” it said.

German court backs rescue fund But says lawmakers must be consulted before any increase

G

ermany’s top constitutional court rejected efforts to block a permanent euro-area rescue fund, handing a victory to Chancellor Angela Merkel, who championed the 500 billion-euro (US$646 billion) bailout. “This is a good day for Germany and a good day for Europe,” Mrs Merkel said in a speech to parliament. The Federal Constitutional Court in Karlsruhe dismissed motions that sought to block the European Stability Mechanism, while ruling Germany’s 190 billion-euro contribution can’t be increased without legislative approval. The court said Germany can ratify the ESM if it includes binding caveats it won’t be forced to assume higher liabilities without its consent. “We are an important step closer to our goal of stabilising the euro,” German Economy Minister and Vice Chancellor Philipp Roesler told reporters in Berlin after the ruling yesterday. “It has always been the goal of this government” to establish a “clear limit and to include parliament in all important decisions.” The legal challenge delayed efforts by Mrs Merkel and other euro-area policy makers to stem the region’s debt crisis. Much of the effort to resolve the crisis

hinges on the permanent ESM, which is designed to go into operation when the temporary European Financial Stability Facility is phased-out next year. The bailout fund would work in tandem with the European Central Bank’s bond buying to lower yields for states such as Spain and Italy. L a s t week, E C B

President M a r i o Draghi said the institution was ready to buy unlimited quantities of short-dated government bonds of nations signed up to rescues from the ESM or EFSF. While rejecting a last-minute request for an emergency injunction

over the Mr Draghi announcement, the court said it would review a challenge to the ECB bond-buying programs during additional hearings in the case. Yesterday’s cases were filed after German lawmakers approved the ESM and the fiscal pact, a deficitcontrol treaty designed to impose budget discipline on European U n i o n

members. A b o u t 3 7 , 0 0 0 people signed up to endorse a constitutional complaint filed by political group “Mehr Demokratie e.V.” Other plaintiffs included opposition party Die Linke as well as Peter Gauweiler, a lawmaker from Mrs Merkel’s CSU Bavarian

sister party. The challengers, which sought an injunction against the bailouts while the court reviewed the cases in detail, argued the crisis-fighting legislation transfers constitutionally mandated authority from German lawmakers and undermines democratic rule. The court ruled the ESM treaty must be interpreted in a way that bans it from borrowing from the ECB, since this would violate EU law. The ESM also can’t be allowed to deposit bonds, including those acquired on the secondary market, with the ECB as collateral for loans, according to the judgment. “Some uncertainties” about the limit on Germany’s contribution to the ESM and the scope of the German parliament’s say over the fund were reviewed as part of the ruling, Chief Justice Andreas Vosskuhle said when delivering the ruling. The judges also said Germany must make clear when ratifying that it won’t be bound by the treaty unless these conditions are met. “The relevant factor for adherence to the principles of democracy is whether the Bundestag remains the place in which autonomous decisions on revenue and expenditure are made,” according to the unanimous judgment. Bloomberg/Reuters

EU outlines bank supervision plan European Commission chief Barroso calls for ‘federation’

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uropean Union Commission President José Manuel Barroso has called for the EU to evolve into a “federation of nation-states”. Addressing the EU parliament in Strasbourg, Mr Barroso said such a move was necessary to combat the continent’s economic crisis. Mr Barroso also set out plans for a single supervisory mechanism for all banks in the eurozone. He called the plans a “quantum leap ... the stepping stone to the banking union”. The European Central Bank would get much greater powers of oversight and regulation of Europe’s 6,000 banks under the plan. Mr Barroso said eurozone countries should not rely on bailouts from the ECB, saying the bank “cannot and will not finance governments”.

“But when monetary policy channels are not working properly, the Commission believes that it is within the mandate of the ECB to take the necessary actions – for instance, in the secondary markets of sovereign debt,” he added. “Securing the stability of the euro is the most urgent challenge.” Mr Barroso said he was not calling for a “superstate”, but rather “a democratic federation of nation states that can tackle our common problems, through the sharing of sovereignty”. “Creating this federation ... will ultimately require a new treaty,” Mr Barroso said. In response to Mr Barroso’s remarks, German Chancellor Angela Merkel said “it’s not about supervising

Europe’s member states on their own ‘are no longer able to effectively steer the course of events,’ says Mr Barroso

every bank and in any case the ECB can’t do that. Rather, it’s about the quality of the supervision, not just about the quantity.” There should be no rush either, she said, warning that European-wide banking supervision “should not be put in place as quickly as possible

and then not work.” EU financial services commissioner Michel Barnier was due to present details of the plans later yesterday. Last week Mr Barnier said he hoped such a scheme could be set up by early 2013. Agencies


Macau Business Daily, September 13, 2012