Year I Number 169 Friday November 23, 2012 MOP 6.00 Editor-in-chief: Tiago Azevedo Deputy editor-in-chief: José I. Duarte
I SSN 2226-8294
www.macaubusinessdaily.com
Outlook for SMEs still cloudy: Tam A
legislator yesterday called for major reform of labour import rules – rather than minor adjustments – to save small businesses. But Francis Tam Pak Yuen, Secretary of Economy and Finance, told the Legislative Assembly after his 2013 policy address that the government had always tried to focus imported labour quotas on nongaming businesses rather than the casinos – and praised the progress of the local conventions industry. Mr Tam added the administration would eventually seek a fund manager for its fiscal reserve. Legislators are concerned its investments have so far produced below-inflation returns. He also indicated “nearly half “ of the city’s 11 slot parlours will have to “move away” from their current locations. More on page 3
HANG SENG INDEX 21760
21710
21660
HK$3 bln homes scheme next to Jockey Club
21610
Page 2
21560
November 22
HSI - Movers Name
HK firm wins HK$10 bln Studio City build deal Page 3
%Day
CHINA RES LAND
3.48
CHINA UNICOM HON
3.04
WANT WANT CHINA
2.56
CHINA SHENHUA-H
2.25
CHEUNG KONG
2.20
CLP HLDGS LTD
0.00
BANK OF CHINA-H
0.00
COSCO PAC LTD
0.00
CHINA RES ENTERP
-0.39
TINGYI HLDG CO
-1.81
Source: Bloomberg
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Economy, customs checks, hit Q3 retail sales: experts Page 5
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business daily November 23, 2012
Photo by Manuel Cardoso
macau
Banks confident over Taipa luxury homes Bright economic prospects are behind the decision by banks to finance a high-end housing project near the Jockey Club Stephanie Lai
sw.lai@macaubusinessdaily.com
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aw Capital Partners has decided to invest between HK$3 billion (US$387 million) and HK$4 billion in a high-end housing project adjacent to the Macau Jockey Club, according to Industrial and Commercial Bank of China (Macau) Ltd (ICBC). The Hong Kong property investment company aims to put a small, lowdensity residential development on the site, comprising detached and terraced houses and a clubhouse. ICBC and Gaw Capital, the sole investor in the residential project, signed on November 9 a syndicated loan agreement that will put HK$2.1 billion in the developer’s coffers. The syndicate comprises ICBC, HSBC, Tai Fung Bank Ltd, Wing Hang Bank Ltd, Dah Sing Bank Ltd and Citic
Bank International Ltd. ICBC said the members had faith in the project because of the “bright future prospects of the property market in Macau” and “the unique quality of the project due to its fantastic design and development plan”. This optimism was seen in “the overwhelming response to the participation in this syndicated loan, having achieved over 200 percent of the ticket size of the required loan amount,” ICBC said. The development, which is awaiting approval from the Land, Public Works and Transport Bureau, is expected to take two to three years to build. ICBC said Jockey Investment Co Ltd owned the project, but in name only, and that the real owner was
business as usual
Lost opportunities Paulo A. Azevedo pazevedo@macaubusinessdaily.com
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he policy address is supposed to be a summary of the government’s strategy, its plans that have yet to be put into action. But if that is the case, predictability was the salient feature of the Policy Address for 2013. We continue to travel at cruising speed, without any bursts of acceleration. Is there anyone that still believes that if, one day, the gaming manna stops falling from the heavens, Macau will not suffer for its failure to take advantage of the golden years to invest in its own future? Basically, we continue to accumulate billions of patacas and spend just enough of what the revenue from gaming provides to guarantee that our day-to-day needs are met. Macau is the grasshopper of Aesop’s Fables, despite holding only the trump cards of an ant. To satisfy a community without a mature ability to be critical, the keepers of the public coffers continue to dish out money and make do with low taxes. Should, one day, the gaming industry begin to dwindle and the government feel the need to put an end to the abundance that people have got used to, residents will be dealt a double blow: they will lose the benefits and realise that too many years were lost without any structural investment or planning that bore fruit. There is no investment in knowledge, in the creation of technological industries or in muchneeded talent. One wonders if our top officials wish to go down in history as those responsible for an era of lost opportunities.
ultimately a private equity fund managed by Gaw Capital. “The project company has no relationship with the Macau Jockey Club, nor has the Macau Jockey Club any interest in the project,” ICBC said. Gaw Capital is run by the Gaw family, which controls Hong Kong real estate and hotel investment firm
Pioneer Global Group Ltd. Between 2005 and 2008, Pioneer, Morgan Stanley Real Estate Funds and Wachovia Bank owned Macau’s 22-storey International Gateway building, now called the AIA Tower. Business Daily contacted Gaw Capital and the Macau Jockey Club but both companies declined to comment.
November 23, 2012 business daily | 3
MACAU Half of slot parlours to close or relocate “Nearly half of the 11 slot parlours will have to move away” from their current location, including the SJM Yat Yuen Canidrome Slot Lounge in Fai Chi Kei, the secretary for Economy and Finance said. The new bylaw that bans parlours in residential areas “further tightens the parlour regulation, it does not relax it, unlike some opinions have reckoned,” Francis Tam Pak Yuen said. In the past few years, there were no new slot parlours opening – apart from those in hotels – the secretary stressed at the Legislative Assembly.
Outlook for SMEs still cloudy: Tam Subsidies for small business to continue, but legislators doubt they’ll help Stephanie Lai
sw.lai@macaubusinessdaily.com
jobs which residents are not willing to take up. But he also called for more small businesses such as food and beverage firms or beauty parlours to be allowed to move into industrial buildings, to alleviate rising rental costs. Mr Tam stressed that the government had always aimed to allow proportionally more non-resident workers in non-gaming sectors than in the casinos. “In the second quarter this year, the proportion of non-resident employees in all gaming companies was 24 percent – a percentage lower than the percentage of non-resident employees over the total working population,” he told legislators.
MICE growth
Francis Tam yesterday
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conomic diversification will be hard to achieve in the coming year, Secretary of Economy and Finance Francis Tam Pak Yuen admitted at the Legislative Assembly yesterday. He said local small- and mediumsized enterprises (SMEs) continued to struggle with challenges – some facing “difficulty to remain in business”. The government’s policy address for 2013 promises to keep in place help and funding to enable small enterprises upgrade their staff training and equipment, as well as improving procedures for importing labour. But legislators are not satisfied that this is enough. They see the city’s
restrictive and drawn out approach to labour import procedures as the main problem. They suggest the system needs radical reform not simply some minor adjustments. “Employers have to contact the administration, including the Labour Affairs Bureau, to prove that no local employees would like to work for them before applying for imported labour,” said legislator Kou Hoi In. “This pre-employment arrangement is a burden to the SMEs, which should be simplified,” Mr Kou, director of the Macau Chamber of Commerce, said. He supports the government’s plan to relax the imported labour criteria for
Meetings, incentives, conferences, and exhibitions (MICE) business is the fastest growing sector in Macau alongside retail trade, Mr Tam noted. The secretary rejected accusations that it is “just stumping up money to aid a few big MICE events without seeing apparent effects”. “Registered local MICE companies have already exceeded 300,” he said. “What the government is glad to see is that the staff participating in MICE business has grown from a size of about 200 in 2001 to the over 2,000 at present.” Incentive schemes and training programs for MICE professionals will go on, while the government would like to see the sector achieving a multiplier effect of seven to 10 times its current business.
Stability, not high return, is fiscal reserve priority “High added-value” or “high returns” are not the priority concerns for the investment of Macau’s fiscal reserve, Secretary for Economy and Finance Francis Tam Pak Yuen told legislators. “When the special reserve reaches a certain level, we’ll seek a fund manager, and gradually seek more ways to allocate assets on a stable investment basis. For instance, investing in appropriate stock markets,” said Mr Tam. During the secretary’s policy address for 2013 at the Legislative Assembly yesterday, a number of members questioned the government’s ability to handle the investment of the fiscal reserve, with the rate of return shrinking in recent years. “I know the Singapore example of having state investment company Temasek Holdings [Pte Ltd] to handle the reserve is difficult to learn from,” said legislator Chan Meng Kam. “But the rate of return for Hong Kong’s mandatory provident fund is already 3.4 percent, and mainland [China] also got a five percent rate for its social security fund. What about Macau?” he concluded. S.L.
Paul Y. Engineering wins HK$10 bln Studio City deal Hong Kong firm also planning its own casino hotel on Cotai Michael Grimes
michael.grimes@macaubusinessdaily.com
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ong Kong-listed Paul Y. Engineering Group Ltd has won a HK$10 billion (US$1.29 billion) contract to build part of the Studio City resort project on Cotai, the construction firm said in a voluntary filing. The contract is in the name of PYE’s unit PY Construction (Macau) Ltd in a joint venture with Yau Lee Construction (Macau) Co. Ltd. The customer is Studio City Developments Ltd, a 60 percentowned indirect subsidiary of Macau casino developer and operator Melco Crown Entertainment Ltd. MCE was always due to provide
the gaming licence for Studio City. But in June last year it took on a 60 percent equity interest in the overall project after deadlock over funding between previous investors caused the original construction timetable to stall. Work recommenced on the site this summer, but without a regulatory announcement being made. MCE said in an October filing with the Nasdaq in New York that Studio City will cost US$2.9 billion to complete, inclusive of pre-opening expenses, working capital and land premiums. In a conference call with analysts earlier this month to discuss third quarter Macau earnings, MCE’s
co-chairman Lawrence Ho Yau Lung said the scheme was on course for a mid-2015 opening. That date was also mentioned in yesterday’s filing by PYE. On Tuesday Paul Y. Engineering also announced it was planning initially to raise HK$3.2 billion – by issuing shares in Hong Kong and by selling convertible bonds – toward the US$800 million cost of a boutique casino-hotel on land on the CotaiColoane border adjacent to the One Oasis residential development. The possible opening date is 2015 or early 2016. But Macau’s gaming regulator the Gaming Inspection and Coordination
Bureau told Business Daily in an e-mailed statement yesterday: “The Bureau has not received any application for gaming in the said boutique-style casino hotel”. Yesterday the South China Morning Post in Hong Kong reported that PYE – an engineering and property firm currently controlled by Charles Chan Kwok Keung – had been looking to diversify its business. The newspaper said PYE last year announced a joint venture with a Hollywood film company and Beijing’s Huayi Brothers Media Group but pulled back after it failed to raise enough money in a weak market.
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business daily November 23, 2012
macau IACM gets all food safety powers
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The food safety bill will give the Civic and Municipal Affairs Bureau all the powers to handle related issues, the Legislative Assembly’s second standing committee stressed yesterday. Chan Chak Mo, who chairs the committee, assured the media after a closed-door meeting there would be no overlap of competences with other public bodies like the Health Services Bureau. A grace period of six months will be given before it is mandatory for businesses to keep receipts for all imports and exports of food products.
HOSPITALITY Real slow Recent data indicate that spending by visitors is rising once again. Spending by visitors rose fast for most of last year. But in the first quarter of this year it rose more slowly and in the second quarter it fell. A second-quarter fall is not unusual, but the second-quarter fall this year – almost 10 percent sequentially – was steep. Spending by visitors in the third quarter was 28.6 percent higher than in the first quarter of 2010. But their thirdquarter spending was still slightly below what they spent in the first quarter of this year. Comparisons with any time before 2010 are difficult to the point of being impossible, because the way visitor spending is estimated changed in that year.
Higher shop rents hit Oriental Watch profit Watch retailer saw profits shrink in last two quarters due to weak consumer appetite Vítor Quintã
vitorquinta@macaubusinessdaily.com
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The growth in spending per head, combined with a rise of 19.2 percent in the number of visitors in the period under review, meant total spending by visitors rose from 8.7 billion patacas (US$1.1 billion) to 13.3 billion patacas, growing at an average quarterly rate of 4.3 percent. But growth in real spending – that is, nominal spending adjusted to reflect the erosion of purchasing power due to tourist price inflation – is less impressive. Real spending per head by visitors rose by just over 5 percent. And the peak quarter for real spending per head was the fourth quarter of 2010 instead of the first quarter of this year. Real spending per head by visitors is still recovering slowly from the abrupt decrease at the beginning of last year, when it fell by almost 15 percent. J.I.D.
atch retailer Oriental Watch Holdings Ltd saw its profit drop sharply in the six months ended September 30, due to price hikes introduced by watch suppliers and rising rental expenses, the company said. “Escalating rental rates continued to be a major concern for Hong Kong and Macau retailers,” the company told the Hong Kong Stock Exchange yesterday. In comparison to the same period of last year, the group’s rental expense increased by about 23.1 percent. Oriental Watch opened a new Rolex boutique in Hong Kong but the rise “was mainly attributable to the lease renewal of three existing stores”. While “good portion of our retail stores in Hong Kong are self-owned properties,” the same does not happen to the company’s two shops here, located at Macau Square and Macau Tower. Last month Centaline (Macau) Property Agency Ltd sales director Noelle Cheung told Business Daily shop rents in the city had skyrocketed, increasing by up to 50 percent so far this year. Oriental Watch’s net profit was just HK$52.1 million (US$6.7 million), down by 17.3 percent from
Rise in spending by visitors, 2010 Q1 to 2012 Q3
the previous period. But if it wasn’t for a fair value impact of HK$94 million in relation to share options granted, the profit drop would have been closer to twothirds, the company admitted. “Consumer appetite for luxury watch items remained relatively weak,” Oriental Watch said. Sales turnover for the six-months period was HK$1.8 billion, down by 8.7 percent year-on-year. Slower consumption “was particularly evident amongst visiting mainland [Chinese] consumers, who have curbed their spending considerably amidst the prevailing global economic
uncertainty,” the company said. But Oriental Watch is encouraged by a sales recovery in the last few months. “Supported by the rising wealth of a growing middle class coupled with the central government’s forthcoming stimulus measures to promote domestic consumption, the board maintains a cautiously optimistic outlook on the luxury retail market in Greater China,” the retailer said. Oriental Watch’s board recommended a dividend of HK$0.02 per share. The company’s shares were down 3.23 percent to HK$2.4 in Hong Kong trading yesterday.
Li has no plans to sell ING Macau
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Oriental Watch’s net profit was down 17.3 percent year-on-year in the six months to September 30
ichard Li Tzar Kai, a son of Li Ka Shing, has no plans to sell the ING insurance assets in Hong Kong, Macau and Thailand he bought just last month, despite interest from a Thai billionaire. On Wednesday a spokesperson for Mr Li, quoted by South China Morning Post, criticised what he called “market speculation”. Earlier that day, Chotiphat Bijananda, the chairman of Southeast Insurance and Finance Group Co, said the firm was interested in the assets sold recently by ING Groep NV to Mr Li.
The company controlled by Thai billionaire Charoen Sirivadhanabhakdi proposed three options to a financial advisor of Mr Li’s Pacific Century Group a few weeks back. The alternatives would be acquisition of insurance units in Hong Kong, Macau, and Thailand, acquisition in some countries, or a joint venture, Mr Chotiphat, the son-in-law of Mr Charoen, told Dow Jones Newswires. But the spokesperson said Mr Li has “no intention to sell” the assets in Hong Kong, Macau and Thailand
and is actually keen to build a “panAsian insurance platform”. Mr Li bought the ING assets, which include ING Life Insurance Co (Macau) Ltd, for 1.64 billion euros (US$2.14 billion) last month. “What we really want to do is to expand the business regionally,” Mr Li, 45, told Reuters at the times. ING was forced to sell its entire insurance and investmentmanagement operations after getting 10 billion euros of Dutch state aid during the 2008-09 financial crisis.
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V.Q.
November 23, 2012 business daily | 5
MACAU
Mainland slowdown crimps retail sales Political uncertainty and the economic slowdown in the mainland meant retail sales here declined in the third quarter Tony Lai
tony.lai@macaubusinessdaily.com
T
he decline in retail sales in the third quarter of this year was caused mainly by the slowdown in the mainland Chinese economy, and the outlook for retailing remains healthy, observers of the industry say. Sales in the third quarter amounted to 12.5 billion patacas (US$1.6 billion), 3 percent less than in the second, falling for the second consecutive quarter, official data show. However, third-quarter sales were 13 percent higher than a year before. Sales in the first nine months of this year amounted to 38.5 billion patacas, one-quarter more than in the corresponding period last year. A management and marketing specialist expert at the University of Macau, Rico Lam Long Wai, said: “This drop is unusual as we normally expect sales in summer to be stronger than in spring.” The main causes appeared to be the economic slowdown in the mainland– the city’s biggest source of tourists – and saturation in the supply of luxury goods, Mr Lam told Business Daily. “Luxury goods are not like dayto-day clothing, which [mainland tourists] buy every time they visit. Tourists do not necessarily need to buy luxury goods in the summer,” he said. Sales of jewellery and watches, which accounted for one-quarter of all sales – plunged by 14 percent in the third quarter, but sales of most other kinds of goods increased – in particular, sales of cosmetics and pharmaceutical products.
Normal adjustment A lecturer at the Macau Institute for Tourism Studies, Patrick Lo Chun
Sales of jewellery and watches plunged by 14 percent in the third quarter (Photo by Manuel Cardoso)
Pong, agrees that the mainland’s economic woes are playing a big role in the retailing slowdown. “GDP in China now struggles to maintain growth of only 7.5 percent, well below the more commonly accepted level of 8 percent,” Mr Lo said in a written reply to Business Daily questions. He said this had led to “reluctance to spend, especially on high-end items”. But he is not worried that economic uncertainty and fewer visitor arrivals will cause sales to fall further. “The impact may not be big on the total sales amount, but the distribution among the different categories may be more affected, with personal day-to-day goods playing a
KEY POINTS Third-quarter retail sales drop ‘unusual’ Economic slowdown reducing tourist purchases More customs inspections at border crossings
more important role,” Mr Lo said. The president of the Macau Goldsmith’s Guild, Lei Chi Fong, said the slump in sales of jewellery was due to many things, ranging from political uncertainty caused by the transfer of power to the mainland’s new leaders to increased customs inspections at the border. The slump was “a normal adjustment”, Mr Fong said. “Though China’s economy has slowed, mainland tourists continue to maintain relatively high purchasing power and mainland officials pledged earlier to continue to support Macau and Hong Kong,” he said. “So I don’t see any problems in the sector in the future.” With Vitor Quintã
Homebuyers borrow to beat curbs The amount of new mortgage lending to residents surged in September, probably because they anticipated new regulations Tony Lai
tony.lai@macaubusinessdaily.com
T
he amount of new mortgage lending to residents was higher in September than in any previous month this year, as homebuyers rushed to borrow before the government made it more difficult. The combined value of home loans to residents rose to over 4.1 billion patacas (US$512.5 million) in September, 6.1 percent more than the month before, the Monetary Authority of Macau announced yesterday. While this is the highest figure so far this year, it is less than half the 10.9 billion patacas lent in
February last year. In the third quarter of this year new mortgage lending to residents amounted to 11.6 billion patacas, the most in any quarter since the government introduced the special stamp duty in June last year. The special stamp duty is a levy of 20 percent on the sale of a home if it is sold within one year of being purchased. The levy is 10 percent if it is sold within two years of being purchased. New mortgage lending to nonresidents mounted to 516.2 million patacas in September. Loans for unfinished homes
accounted for 70.6 million patacas or 1.5 percent of all new mortgage lending in September, over twothirds less than the month before. Mortgage lending is set to fall after the government took new measures last month to cool the overheating real estate market. These measures include tighter restrictions on mortgage lending and expansion of the special stamp duty to cover sales of shops, offices and parking spaces as well as homes. The deputy general manager of Bank of China Ltd’s branch here, Ip Sio Kai, told reporters last week that applications for mortgages had
dropped by 30 percent in the month after the government’s new measures came into force. Newmortgagelendingforcommercial property rose by 78.1 percent in September to 3.1 billion patacas.
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business daily November 23, 2012
macau
Chan Meng Kam invests in troubled oil company
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Top heavier The main growth in the workforce of the banking sector in the past few years has been in the senior ranks. The senior ranks include the directors and managers, and the professionals and technicians. The other ranks are the clerks (including tellers) and less qualified personnel, denoted here as “others”. For convenience, we have combined two categories of bank employee that the statistics treat separately: what the statistics call the “professionals” and the “technicians and associate professionals”.
The owner of Golden Dragon pumps money into a petroleum company despite its woes in Brunei Vítor Quintã
vitorquinta@macaubusinessdaily.com
The decision was made because I’m confident about their development in the coming years Chan Meng Kam, businessman
Mr Chan, speaking on the sidelines of a Legislative Assembly meeting. Since the first quarter last year the banking industry’s workforce has grown by about 9.4 percent. The numbers of directors and managers and of professionals and technicians have grown faster than the numbers of other kinds of employees. Since early 2010 the number of directors and managers has grown by 15.6 percent and the number of professionals and technicians has grown by 14.9 percent. The senior ranks now make up more than half the people working in banking. The number of clerks has risen by 4.5 percent. The number of other employees, always only a small part of the total, has decreased by about 7 percent. Greater use of technology and regulatory demands are behind these changes. They call for a more detailed breakdown of the figures for the senior ranks. J.I.D.
Brunei dispute
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usinessman and legislator Chan Meng Kam has invested in a petroleum company that is embroiled in a dispute with Brunei’s national oil company over drilling in an oil exploration block. Mr Chan has subscribed to convertible bonds worth HK$16 million (US$2 million) issued by Polyard Petroleum International Group Ltd, the Macau-based company told the Hong Kong Stock Exchange last week. The deal became effective on Monday. The company said it would use the money for general working capital. Business Daily asked Polyard Petroleum International for details but received no reply. Mr Chan, the president of Golden Dragon Group Co Ltd, will get annual interest of 3 percent on his bonds, payable semi-annually. “The subscription is made in my own interest, and has nothing to do with Golden Dragon,” he told Business Daily yesterday. “The decision was made because I’m confident about their development in the coming years as I’ve listened to the introduction by their boss, who is a close friend of mine,” he said, referring to Polyard Petroleum International chairman of Kuai Wei. Polyard Petroleum International will have one year to redeem the bonds,
unless Mr Chan decides to convert part or all of them into shares, which he can do any time. The bonds are convertible at a price of HK$0.16 per share, a premium of almost 6.7 percent to yesterday’s closing price of HK$0.15 for Polyard Petroleum International stock, which is traded in Hong Kong’s Growth Enterprise Market. Conversion would give Mr Chan 100 million shares, or 5.19 percent of the company. “I will observe for one year more before making any decision on whether to change the bonds into shares,” said
HK$16 mln
Value of Chan Meng Kam’s convertible bonds
Polyard Petroleum International is now exploring three oil, gas and coal exploration blocks in the Philippines. Two years ago a consortium in which Polyard Petroleum International has a 21 percent participating interest began drilling in an oil and gas exploration block in Brunei. “Polyard Petroleum has projects not only in Brunei, but in the Philippines as well. I’m confident because they have large exports to China every year, which has promising prospects,” Mr Chan said. Buttheperiodfortheexplorationofthe Brunei block ended in August and Brunei National Petroleum Co Sdn Bhd rejected the consortium’s request to extend it. The consortium appealed to Brunei’s energy ministry. But on the same day Brunei National Petroleum struck back, demanding compensation of US$16.35 million for what the national oil company called Polyard Petroleum International’s failure to fulfil all its obligations in its drilling programme. Polyard Petroleum International said it would “seek legal advice on the appropriate action to be taken … including taking legal action and seeking compensation”. The company posted a loss of HK$24.2 million for the first nine months of this year, having made a profit of HK$302.3 million in the corresponding period of last year. With Stephanie Lai
Stay in the finest hotels in Macau and read Business Daily
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November 23, 2012 business daily | 7
MACAU
Malo to open three mainland clinics Malo Group’s founder says its clinic in Macau is the springboard for its plunge into the mainland market João Paulo Meneses In Portugal
newsdesk@macaubsuinessdaily.com
Malo Group’s investment in Macau is a success, Paulo Maló says
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he president and chief executive of Malo Group, Paulo Maló, says that not only does he not regret having invested in Macau, but feels “happy and proud” about what he did and plans to do here. Mr Maló, the founder of MaloClinic Health and Wellness, says its success in Macau is the reason for its opening next January two new clinics in mainland China, in Beijing and Guangzhou. Malo Group will have a Chinese partner in the Guangzhou clinic, and the group will invest its experience, name and management. A third mainland clinic, in Shanghai’s central business district, is planned to open in the second half of next year. There are also negotiations about “suitable locations with local partners in Hong Kong and Singapore”, Mr Maló told Business Daily. “The investment in Macau not only provided us with the opportunity to enter a country with one of the greatest growth potentials in the world, but also increased our visibility in all of Asia.” Mr Maló said last month that the group was looking for investors for its Macau clinic and medical spa. It recently settled a dispute here with one of its suppliers, which petitioned the courts to have the clinic declared bankrupt. “It would be impossible to materialise these projects using only our own resources, hence the need to have the Fudan University Hospital as our global partner, through its subsidiary Taivex Healthcare Management Co, which is one of China’s main health providers,” he said. This does not prevent the group from searching for and negotiating with other prospective partners, as the Guangzhou project shows. “These partners provide not only capital, but also local know-how”. Another example is the Macau project, which was possible only with the help of “reputed local partners”, which Mr Maló declined to identify. “The existing connection between Macau and Portugal facilitated the whole process,” he said.
Rotten teeth The Macau clinic is in the Venetian Macao casino resort. Mr Maló told the Portuguese news
agency Lusa last month that Sands China Ltd, the owner of the Venetian Macao, might be a suitable investor in his group’s expansion. “In China, the business outlook is better than in any other market”, Mr Maló said. “The group’s strategic planning for China includes opening more clinics, aiming at launching an integrated network of high-quality dental care services in a country where a high deficit in terms of dental treatments persists,” he said. The plans to expand in this part of the world are complemented by the group’s presence in Australia, where it has a clinic in Melbourne and is undertaking a project in Sydney with Australian partners. Mr Maló would not say if all the MaloClinic Macau’s problems with creditors were solved. “We have problems that are common to any business of this magnitude, especially in its developing stages,” Mr Maló said. He said there were no unpaid salaries at the clinic and spa here. “In the first half of 2012, MaloClinic Macau enjoyed a 55 percent increase in its activity in the fields of dental care and medical care when compared to the same period of
Global reach Paulo Maló, president and chief executive of Malo Group, forecasts modest growth in Portugal as result of restructuring measures that will guarantee greater efficiency in allocating resources. “It’s a part of our growth model,” he said. Mr Maló said that, globally, “we expect growth to surpass 200 percent, with some units reaching breakeven point”. The group has clinics in Portugal
2011,” he said. The group’s main concern is still financing, since all its projects are recent or still in the development stage. In Portugal, there is no financing available at “reasonable” interest rates. “The local partners add value to the projects by providing the necessary investment,” Mr Maló said. “The only possible way to move forward with all the projects is to capitalise on the MaloClinic name, which in the last few years has become a global brand, uniquely positioned in the dental care area and one of the few in the medical field,” he said. “We enjoy the advantage of our credibility, technical competence and international reputation”.
On a drip Mr Maló denies that the group was having cash flow problems in Portugal due to a drop in the number of patients and the debts the group has incurred. He said the group still had its core business in Portugal. “Everyone knows about the macro-economic issues the country is facing”, he said. “But fortunately for us, we have been able to maintain a stable activity level in Portugal, in total contrast with
(Lisbon, Porto, Coimbra, Almada, Portimão and Funchal), Spain (La Coruna), Britain (London), Poland (Warsaw), Israel (Tel Aviv and Ramat Hasharon), the United States (New Jersey), Japan (Tokyo), China (Macau) and Australia (Melbourne). Clinics are planned or under construction in Madrid, Milan, Frankfurt, Paris, Moscow, Casablanca, Luanda, Shanghai, Beijing, Hong Kong, Sydney, Bogota, Mexico City, Toronto and New Delhi, among other cities.
current trends,” he said. “We still expect to open four new clinics in Portugal this year.” Mr Maló said a new business model meant more efficient management. This model and “synergies between the several clinics have allowed us to increase profitability, with better net results than last year”, he said. Mr Maló played down the notion that some Portuguese banks are worried, especially some of the group’s biggest lenders like Banco Espírito Santo SA (BES). “BES is one of the banks that has been with us since the beginning, 18 years ago,” he said. He acknowledged that in some places some business models did not work out. Brazil was such a place. “The model we implemented, similar to others we have worldwide – large-dimension clinics with many rooms, surgery blocks with general anaesthesia, sophisticated equipment and a large number of professionals – did not work and the strategy needed to be changed,” he said. “We did not choose the right partner there and, faced with the additional need for resources to finance the operation, we decided to incorporate the losses and terminate the Brazil operations.”
Paulo Maló
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business daily November 23, 2012
GREATER CHINA Japan appoints new ambassador Tokyo yesterday appointed a new ambassador to China, months after the last nominee died before he could take up his post and as tensions simmer between Tokyo and Beijing over disputed territory. Career diplomat Masato Kitera’s appointment will be effective on Monday, the foreign ministry said, while local media reported that the 60-year-old will be dispatched to Beijing next month to formally succeed Uichiro Niwa. Mr Kitera is set to become Tokyo’s point man in the ongoing dispute over an island chain in the East China Sea.
Manufacturing shows rebound gathering pace November PMI marks first expansion in 13 months Lucy Hornby
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hina’s vast manufacturing sector saw expansion accelerate in November for the first time in 13 months, preliminary results from a factory survey showed, a sign that the pace of economic growth has revived after seven consecutive quarters of slowdown. The China HSBC Flash Manufacturing Purchasing Managers Index (PMI) rose to a 13-month high of 50.4 in November, the latest indicator of recovery in the real economy after data showing solid credit growth, firmer exports and rising industrial output in the previous month. A sub-index measuring output rose to 51.3, also the highest since October 2011. “This reflects that conditions for smaller firms, especially exporters, are looking up,” said Li Wei, a Shanghaibased economist for Standard Chartered. “The consensus in the market is already for a small, gradual improvement.” An uptick in key economic activity indicators in October, following encouraging signs in September, cemented the view of many analysts and investors that a rebound in the world’s second largest economy gathered momentum as it entered the fourth quarter, thanks to a raft of pro-growth policies rolled out by
the government over recent months. China is currently shuffling its senior officials after the seven top leaders of the ruling Communist Party were selected at a congress last week. The new appointments should end months of uncertainty in the highest ranks, although economic policy is not expected to change abruptly in the near-term. Even before the congress, the
KEY POINTS November PMI at 13-month high of 50.4 First headline reading above 50 since October 2011 Output sub-index also at 13-month peak of 51.3 Economic rebound gains momentum – analyst
central bank had moved to ease liquidity by pumping short-term cash into money markets rather than resorting to the interest rate cuts or reduction in banks’ required reserve ratios that many investors had expected.
Turning point This month’s PMI reading above 50 is likely to be seen as a turning point by the market, particularly if it is born out by the final reading due on December 1 and by official indicators. Asian shares extended gains slightly after the data to stand up nearly 1 percent on the day and the Australian dollar, sensitive to demand from the biggest customer for Australia’s resources, rose as far as US$1.04. “This confirms that the economic recovery continues to gain momentum towards the year-end,” Qu Hongbin, chief China economist at index sponsor HSBC, said in a statement accompanying the data. “However, it is still the early stage of recovery and global economic growth remains fragile. This calls for a continuation of policy easing to strengthen the recovery.” With a one-month exception in October 2011, the HSBC PMI
China’s manufacturing sector has been hurt by slow
– which largely reflects the private manufacturing sector – has remained stubbornly below the 50-point level separating accelerating from slowing growth since June 2011.
Feeling the pinch Unlike the patchy results seen in previous months, in November almost all the sub-indices in the HSBC survey concurred in showing an improving economy. The one exception was a fall in the sub-index measuring output prices, demonstrating that manufacturers are still struggling with overcapacity and relatively weak domestic demand.
Moody’s warns on local Says Beijing must speed up financial reform Without more marketbased price signals driving the efficient allocation of capital and improving the competitive delivery of services, China’s trend growth rate will likely slow more rapidly than otherwise Moody’s Investor Services
C
hina must accelerate the pace of financial reform in coming months to sustain economic growth, ratings agency Moody’s Investor Services said, forecasting the world’s No. 2 economy will grow 7.5 percent each year from 2012 to 2014. Expectations of steady expansion means China is unlikely to suffer any economic “hard landing,” or abrupt slowdown, Moody’s said, but warned that the days of easy growth for the world’s fastest-growing major economy are over. Difficult financial reforms that make space for a more marketdriven system must be made to cut inefficiencies, it said. At the same time, China no longer enjoys the wide berth it had before to bolster growth in unforeseen downturns. “Without more market-based price signals driving the efficient allocation of capital and improving the competitive delivery of services,
China’s trend growth rate will likely slow more rapidly than otherwise,” Moody’s said in a report. Crucial areas of reform include increasing market-based competition, improving regulation to allow greater certainty and transparency on future rules and decisions, and making China’s hulking state firms more efficient, Moody’s said. While these changes should uncover new engines of growth, the road will not be smooth sailing. The 4 trillion yuan stimulus from Beijing four years ago that led to explosive growth in China’s local government debt and rapid expansion of its banks means the country can no longer indulge in a credit binge if the economy swoons, Moody’s said. Banks were especially imperilled by China’s previous credit extravagance, it said, noting China’s total bank assets doubled in the past four years, leaving them exposed to industries now mired
November 23, 2012 business daily | 9
GREATER CHINA GM China chief sees lift in sales General Motors Co., which counts China as its biggest market by volume, said its sales in the world’s largest auto market may see a lift next year from gains in commercial vehicle deliveries and demand for passenger cars. “We recognise that there’s some formidable competition out there, but next year should be a pretty good year,” GM China President Bob Socia said. “What we want to do is continue to outstrip the growth in the industry and try to grab share along the way, as we’ve done this year.”
Chinese shares fall as liquor makers tumble Authorities find excessive plasticiser levels in JiuGuiJiu liquor
M
wing global demand
That could also reflect the weight in the survey of exporting firms, which have less ability to raise sales prices, said Standard Chartered’s Mr Li. China’s exporters are increasingly squeezed by rising domestic costs and competition from new international suppliers, Zhou Haijiang, head of Chinese textile exporter Hodo Group, told reporters this month. “Not only Western countries manufacture industrial goods, but also a lot of developing countries including former socialist countries who now have market economies are all exporting, thus creating a global surplus that cannot be changed,” Mr Zhou said.
l debt in excess production capacity. Total assets in China’s banking system are now worth 240 percent of the country’s gross domestic product at 113.3 trillion yuan (US$18.2 trillion), substantially higher than any other major emerging economy, Moody’s said. As a result, the agency judged Chinese bank asset quality to be “negative” for the next 12-18 months, even though it assessed the banking system to have a “stable” outlook in the period. China’s stabilising economic growth has arrested the uptick in its banks’ bad loan ratio, Moody’s said, and there are no indications that asset quality will worsen materially in coming months. China’s four biggest state-owned banks which control about half of the country’s total bank assets all have non-performing loan ratios of below 1.5 percent, drawing criticisms from
“Because of this it is hard to raise sales prices, everyone is selling and it is hard for manufactured goods prices to rise. In some cases prices have even fallen.” Analysts expect no further cuts to interest rates this year or next after back-to-back cuts in June and July, and only one more 50 basis point cut to banks’ required reserve ratios in 2012 after three since late 2011 that have freed an estimated 1.2 trillion yuan for new lending. Although analysts expect fourth quarter GDP growth to outpace the 7.4 percent seen in the third quarter, full-year expansion for 2012 is expected to be the slowest in 13 years. Reuters
analysts who say the numbers are too low and not to be trusted. Christine Kuo, vice president of Moody’s Financial Institutions Group, said while the agency too has its concerns about China’s bad loan data, it cannot prove that the numbers are false. “We have our concerns, but we have no evidence,” Ms Kuo said. For state-owned enterprises, the economic slowdown will impact different sectors differently, said Kai Hu, vice president for corporate finance at Moody’s. Strategic sectors such as oil and natural gas production and the power grid will hang onto their monopolies, but consolidation measures recently announced by the government will be a blow to the dominance of state-owned enterprises (SOE) in other sectors. Overcapacity remains a key obstacle, particularly in cyclical industries, Moody’s said in its report, pointing out that capacity utilisation in China had fallen to 60 percent in 2011 from 90 percent in 2000. “We think the economic slowdown will be a challenge for SOE adaptability,” Mr Hu said. Reuters
ainland Chinese markets fell yesterday as liquor makers tumbled further after governmenttestssubstantiatedlocalpress reports about toxic substances in products of one of the firms, JiuGuiJiu Co Ltd. Samples of liquor made by China’s JiuGuiJiu contained excessive levels of plasticiser, Xinhua News Agency said, citing the nation’s quality watchdog. JiuGuiJiu’s Shenzhen shares stayed suspended, as they have been since Monday, but major players in the Chinese white spirits, or baijiu sector, deepened a downward spiral on the month. Wuliangye Yibin Co Ltd, the country’s biggest liquor maker by revenue, posted a sixth-straight loss, diving 4.7 percent to its lowest since July 2010. It has now slumped 18.3 percent in November, set for its worst monthly showing in more than four years. Bigger rival, Kweichow Moutai Co Ltd, the world’s second-largest by market value, shed 0.6 percent but finished off the day’s lows for the fourth time this week, with yesterday’s intra-day low its lowest since April 11. Moutai was up as much as 28 percent on the year at the end of October, losses of 12.1 percent this month have seen this year’s gains cut to just 12.4 percent.
Baijiu makers – shares on the backfoot
Inspections showed as much as 1.04 milligrams per kilogram of dibutyl phthalate, or DBP, Xinhua said, citing the General Administration of Quality Supervision, Inspection and Quarantine. The health ministry had set a limit of 0.3 milligram per kilogram, the official news agency said. Plasticisers are additives that increase the fluidity of a material, but are also toxic chemicals that can cause damage to men’s reproductive health and cause early female puberty when consumed over a long period. “It’s a blow to consumer confidence; the whole sector will be under pressure in the short-term,” said Liu Hui, a Shanghai-based analyst at CSC Securities HK Ltd. “What makes things worse is the inventory problem in the industry and the downward price trend, liquor makers are going to face a cold winter.” The CSI300 Index of the top Shanghai and Shenzhen fell 0.8 percent off a one-week high set on Wednesday. The Shanghai Composite Index shed 0.7 percent as bourse volume dropped some 13 percent from Wednesday. Reuters/Bloomberg
AIG, PICC ink life insurance venture
A
merican International Group (AIG) has signed an accord with Chinese state-owned insurer PICC Group to sell life insurance in the world’s second-largest economy, as the U.S insurer increases its bets in an underdeveloped market. The non-binding agreement announced yesterday brings AIG closer to its roots in China, where the company’s predecessor was founded more than 90 years ago, and is part of AIG’s plan to invest US$500 million in PICC’s planned Hong Kong initial public offering. People’sInsuranceCompany(Group) of China (PICC) is seeking to raise up to US$3.6 billion through the IPO, with AIG and other investors agreeing to buy nearly 50 percent of the shares. To demonstrate its commitment, AIG agreed not to sell more than 25 percent of its stake in PICC for a period of five years after the IPO. But it may offload the entire stake if final legal documentation for the proposed venture with PICC
isn’t completed by May 2013, the U.S. company said in a statement. AIG plans to step up in presence in China, by setting up a joint venture with PICC Life, a unit of the Chinese insurer, to distribute life insurance and other products primarily in large cities. AIG’s current Aian exposure includes a 13.7 percent stake in its former Asian unit AIA Group Ltd and a 9.9 percent stake in PICC Property and Casualty Co Ltd, a unit of PICC Group. AIG was forced to spin off twothirds of AIA in 2010 as part of a package of asset sales to help repay US$182 billion in bailout funds it received from the U.S. government during the 2008 global financial crisis. China had the fifth largest life insurance market in the world in 2011 with US$134.5 billion in total written premium, PICC said in its preliminary IPO prospectus, citing figures from the Sigma Report compiled by Swiss Re. Reuters
10 |
business daily November 23, 2012
ASIA
East Asia bonds face risk of capital exit In an event of a new financial crisis, says ADB Lilian Karunungan
Volatile debt market may deter bond issuers and investors
E
ast Asian bond markets, which are outperforming developed nations, face the risk of a capital exit should an event such as the U.S. fiscal deficit trigger a recession, according to the Asian Development Bank. Regional policy makers need to increase efforts to shield their economies from another crisis even after doubling the pool of combined foreign-currency reserves to US$240 billion as of May, Iwan Azis, head of the ADB’s economic integration office, said before the release of the Asian Bond Monitor yesterday. The U.S. budget issue threatens a recovery and an agreement in Congress that doesn’t address the long-run sustainability of the deficit may not be welcomed, the Manilabased lender said in the report. A volatile debt market and swings in yields may deter both bond issuers and international investors, who raised holdings of fixed-income securities in the region last quarter, Mr Azis said
in an interview yesterday. Asian local-currency notes have returned 8.2 percent this year, compared with 2.1 percent in the U.S. and 7.1 percent among European countries, according to indexes compiled by HSBC Holdings Plc and Bank of America Merrill Lynch. “Capital flows continue to grow
US$240 bln Current amount in the pool of combined foreigncurrency reserves
in Asia but at the same time they are getting more and more volatile,” Mr Azis said. “The bond market is now the most important source of financing for many Asian countries.”
Asia ‘vulnerable’ Overseas holdings of local-currency debt in some East Asia markets, which the ADB terms as China, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam, rose last quarter, the multilateral lender’s bond report showed. Ownership in Indonesia increased to 29.7 percent of the nation’s total as of the end of September from 28.4 percent in June, while in Thailand the proportion climbed to 15 percent from 13.2 percent and to 28.5 percent from 27.1 percent in Malaysia, according to the ADB. During the height of the European debt crisis in 2011, funds based abroad cut holdings of Indonesian government
Asia seen paying less for LNG Amid signs that pricing structure linked to oil may change Osamu Tsukimori
A
sia should benefit from the convergence of global liquefied natural gas markets amid signs of change for its pricing structure linked to oil, the head of the West’s energy watchdog told Reuters yesterday. Gas has historically been pegged to the oil market through longterm contracts, because both fuels used to be produced by the same exporters and were often used in the same industries. But a rising disconnect between gas and oil suppliers and new twoway contracts between exporters and customers based on regional gas exchanges means gas is more likely to take its cue from specific regional
prices rather than global benchmarks, such as oil’s Brent crude. “We can see that the gas market will be converging and also it goes for prices,” Maria van der Hoeven, executive director of the International Energy Agency, told Reuters on the sidelines of a news conference, when asked about Asia’s efforts to link LNG prices with the U.S. Henry Hub gas benchmark. Removing the link between gas prices and oil and moving to socalled hub pricing would drastically cut the cost of natural gas imports, but producer countries such as Qatar have long opposed such moves, saying they need oil-indexed prices to finance the huge expense
of building LNG projects. “For Henry Hub prices, you have to take into account the transport costs, the marginal cost and so on, but the price will be definitely lower than you are paying now,” Ms Van der Hoeven said. LNG is expensive in Asia, fed partly by Japan’s need for fuel to run power stations after most of its nuclear plants were shut following last year’s massive earthquake. It is nearly four times the cost of natural gas in the United States, where a boom in shale oil and gas has driven down prices. Ms Van der Hoeven’s comments come amid signs that Asia’s energyhungry nations may finally be making
bonds by an unprecedented 29 trillion rupiah (US$3 billion) in September of that year, finance ministry data show. “Some Asian bond markets are relatively small still and if you have a small market but ownership is mostly foreign investors, then you’ll be vulnerable to any shock like what happened during the euro-zone crisis in 2011,” Mr Azis said. Asian policy makers will have to be vigilant by adopting so-called macroprudential measures in terms of managing foreign reserves, inflation, current accounts and fiscal balances as they will have to defend themselves from any global crisis, he added. Outstanding debt in East Asia climbed 11 percent in the third quarter from a year earlier to US$6.2 trillion, the ADB report showed. The corporate bond segment increased 17.6 percent to US$2.1 trillion, while government securities rose 7.8 percent to US$4.1 trillion. Bloomberg
You have to take into account the transport costs, the marginal cost and so on, but the price will be definitely lower than you are paying now Maria van der Hoeven, executive director, IEA headway in their push to scrap oillinked pricing of natural gas. Cheniere Energy has struck longterm deals to supply South Korea and India from the Sabine Pass project at Henry Hub-linked prices. Kansai Electric also secured BP’s non-U.S. LNG supplies at Henry Hub-linked prices, likely to be the first time for a Japanese firm. Reuters
November 23, 2012 business daily | 11
ASIA
AirAsia may add one more regional hub Tony Fernandes plans to focus on key markets Chong Pooi Koon and Susan Li
A
irAsia Bhd., the region’s biggest discount carrier, said it may add only one more major hub for expansion as it focuses on boosting profits from Malaysia, Thailand and Indonesia in the next three years. AirAsia aims to increase annual profit from its three main markets to one billion ringgit (US$327 million) each, group chief executive Tony Fernandes said in an interview in Kuala Lumpur yesterday. Taiwan, South Korea, Vietnam and India are among the potential markets for a new base, he said. “We have three gold mines in Malaysia, Thailand and Indonesia and I really want to capitalise on those three first,” Mr Fernandes said. “I’m beginning to feel that I’d rather focus on these. On top of that I still have energy for another biggie, and maybe a few small ones in Laos, Cambodia and Myanmar.” Negotiations with Airbus SAS for ordering 100 more A320s may be completed by the end of next month, he said, as the carrier expands operations to fend off rising competition. Malindo Airways, a venture backed by Indonesia’s PT Lion Mentari
Airlines, is set to start low-cost flights in Malaysia next year as the region’s economic growth spurs travel demand.
‘Strong branding’ “The accelerated roll out of aircraft in Malaysia to dominate routes ahead of the start up of Malindo Airways in March 2013 is a good defensive measure,” Annuar Aziz, an analyst at Credit Suisse Group AG, wrote in a report yesterday. “Coupled with its strong branding, we expect AirAsia to withstand the challenge.” AirAsia, which also operates ventures in the Philippines and Japan, was stable in Kuala Lumpur trading, after on Wednesday posting its third-straight increase in quarterly profit. The stock has fallen 23 percent this year, compared with a 5.5 percent advance in the benchmark FTSE Bursa Malaysia KLCI Index. Net income increased 3.6 percent to 157.8 million ringgit in the three months ended September from 152.3 million ringgit a year earlier, the Sepang, Malaysia-based carrier said in a statement. Revenue rose 15 percent
We have three gold mines in Malaysia, Thailand and Indonesia and I really want to capitalise on those three first Tony Fernandes, chief executive of AirAsia Bhd
to 1.24 billion ringgit. Thai AirAsia posted a profit of 199 million baht (US$6.5 million) in the quarter while the Indonesian venture had net income of 74.5 billion rupiah (US$7.7 million), the company said in the statement. AirAsia’s main Malaysian unit
carried 9 percent more passengers and expanded capacity 10 percent. The group, which currently has a fleet of 112 A320s, plans to take delivery of 266 more planes by 2026. It will add 11 more A320s this quarter, according to the statement. Bloomberg
Fitch gives Sony, Panasonic junk ratings Gives further blow to embattled Japanese tech giants
Fitch downgrades Sony by 3 notches, cuts Panasonic by 2
S
ony Corp. and Panasonic Corp., the Japanese electronics makers reeling from record losses, had their long-term credit ratings downgraded to junk by Fitch Ratings, citing a weak recovery in the television market. Sony’s rating was cut by three levels to BB-, three steps below investment grade, with a negative outlook, Fitch said in a statement
yesterday. Panasonic’s was lowered two levels to BB, also with a negative outlook, the ratings company said in a separate statement. Both companies had their short-term ratings reduced to B from F3. The companies will struggle amid a strong yen and weakened economic conditions in Japan and overseas, Fitch said.
Japan’s two largest TV makers and smaller rival Sharp Corp. are suffering from weakening demand and increasing competition with Samsung Electronics Co. and Apple Inc. “Meaningful recovery will be slow given the company’s loss of technology leadership in key products,” Fitch said of Sony. Panasonic’s downgrade reflects reduced competitiveness and weak cash generation, the ratings company said. Yuki Shima, a spokeswoman at Tokyo-based Sony, and Chieko Gyobu, a spokeswoman at Osakabased Panasonic, said their companies don’t comment on ratings changes. Shares of Sony, Panasonic and Sharp all sank to their lowest levels in more than 30 years in Tokyo this year as investors remain unconvinced the companies can rebound from mounting losses. Borrowing costs in the corporate bond market have climbed for the three as record losses and widening deficit forecasts sapped investor confidence. Sony was downgraded to the lowest investment grade on November 9 by Moody’s Investors Service, which
cited falling demand for its TVs and cameras. Moody’s cut Panasonic to the same level on Nov. 20. Sony posted a net loss of 15.5 billion yen (US$188 million) for the quarter ended September 30. The company retained its forecast for a full-year net income of 20 billion yen. Sony has posted losses in each of the past four years. Panasonic, the maker of Viera televisions and Lumix cameras, forecasts a 765 billion yen net loss for the year ending March 31. That would be the second-biggest loss in company history after the 772 billion yen net loss in the previous year. Sony rose 1.8 percent to close at 834 yen in Tokyo trading before the downgrade was announced. The stock has declined 40 percent this year while Japan’s benchmark Nikkei 225 Stock Average has advanced 11 percent. Panasonic rose 0.7 percent to close at 407 yen, trimming its loss this year to 38 percent. Sharp, the Osaka-based maker of Aquos TVs, was downgraded to junk by Fitch earlier this month. Reuters/Bloomberg
Seoul may curb derivatives as won rallies
S
outh Korea warned yesterday it was ready to take action, such as lowering the ceilings on banks’ foreign exchange derivatives positions as early as next week, to stem the won’s strength that it said was “excessive”. The won wiped out early gains against the dollar after Deputy Finance Minister Choi Jong-ku made the strongest set of warnings in months at an unscheduled media briefing. “We are close to the stage in which specific
steps need to be taken,” Mr Choi told the briefing, adding there were “excessive expectations” for the won’s strengthening. Mr Choi said lowering currency derivatives ceilings at banks was the government’s first option, and the finance ministry would try to finally decide by next week whether to impose the measure. The Bank of Korea and the Financial Supervisory Service earlier this month began a joint inspection of foreign-currency trading by banks operating in
the country. Lowering the caps on banks’ currency trading positions would reduce the amount of speculation on the local currency. The won has gained more than 6 percent against the dollar so far this year, with the pace of that appreciation accelerating since September. Its value against the Japanese yen, however, has risen more than twice as fast by more than 14 percent due to the weakening of the yen against the U.S. dollar. Reuters
12 |
business daily November 23, 2012
MARKETS Hang SENG INDEX PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
30.45
0.661157
21642272
CHINA UNICOM HON
12.2
3.040541
39971609
ALUMINUM CORP-H
3.31
0.3030303
11587483
CITIC PACIFIC
9.69
1.465969
5026396
BANK OF CHINA-H
3.18
0
312186056
CLP HLDGS LTD
66.7
0
2473141
NAME AIA GROUP LTD
BANK OF COMMUN-H
NAME
5.58
0.7220217
35720876
BANK EAST ASIA
29.35
1.032702
1388951
BELLE INTERNATIO
15.14
1.610738
19968100
23.9
1.057082
8297642
HANG LUNG PROPER
CATHAY PAC AIR
13.96
0.7215007
4599500
HANG SENG BK
CHEUNG KONG
116.2
2.198769
4831619
HENDERSON LAND D
CHINA COAL ENE-H
7.71
1.048493
25964750
CHINA CONST BA-H
5.88
0.6849315
261203943
CHINA LIFE INS-H
22.5
0.6711409
20396728
CHINA MERCHANT
23.25
1.973684
3497362
CHINA MOBILE
88.2
1.612903
19604477
CHINA OVERSEAS
21.7
2.117647
27456398
IND & COMM BK-H
CHINA PETROLEU-H
8.26
1.599016
58802604
CHINA RES ENTERP
25.6
-0.3891051
5638720
CHINA RES LAND
19.64
3.477345
CHINA RES POWER
17.28
2.007084
BOC HONG KONG HO
CHINA SHENHUA-H
31.75
2.254428
NAME
PRICE
DAY %
VOLUME
68.7
1.552106
1981480
SANDS CHINA LTD
32.25
1.895735
8045128
SINO LAND CO
13.58
1.951952
5301608
SUN HUNG KAI PRO
112.8
0.9847807
3056264
94.5
0.9076348
1471616
POWER ASSETS HOL
CNOOC LTD
16.36
0.4914005
29350869
COSCO PAC LTD
10.66
0
2198473
SWIRE PACIFIC-A
ESPRIT HLDGS
12.24
0.8237232
7562995
TENCENT HOLDINGS
27
1.503759
6121200
TINGYI HLDG CO
116.8
1.038062
1502003
WANT WANT CHINA
54
2.079395
2797546
WHARF HLDG
HENGAN INTL
69.9
1.37781
1617800
HONG KG CHINA GS
20.6
1.477833
5920862
HONG KONG EXCHNG
127.3
1.272872
3186322
HSBC HLDGS PLC
76.55
0.7236842
13044214
HUTCHISON WHAMPO
78.15
0.06402049
3779437
5.2
0.9708738
277939270
LI & FUNG LTD
12.18
0.8278146
16214972
MTR CORP
30.15
0.3327787
2106229
11151569
NEW WORLD DEV
12.52
2.120718
13304807
52W (H) 22149.69922
8952096
PETROCHINA CO-H
10.28
0.9823183
73448319
(L) 17613.19922
PING AN INSURA-H
58.8
1.030928
12096388
PRICE
DAY %
VOLUME
24.75
0.814664
24934318
YANZHOU COAL-H
CHINA PETROLEU-H
8.26
1.599016
58802604
15251249
MOVERS
44
259.6
0.620155
2908530
21.7
-1.809955
10122000
11.22
2.559415
15076600
55.6
2.112029
3710081
2
3 21760
INDEX 21743.2 HIGH
21753.47
LOW
21228.28 21220
20-November
22-November
Hang SENG CHINA ENTErPRISE INDEX NAME
NAME
PRICE
DAY %
VOLUME
AGRICULTURAL-H
3.35
0
99128666
AIR CHINA LTD-H
5.13
-0.1945525
6198000
ALUMINUM CORP-H
3.31
0.3030303
11587483
CHINA RAIL CN-H
8.31
1.713586
ANHUI CONCH-H
25.4
0.1972387
9495036
CHINA RAIL GR-H
4.35
BANK OF CHINA-H
3.18
0
312186056
CHINA SHENHUA-H CHINA TELECOM-H
CHINA PACIFIC-H
PRICE
DAY %
VOLUME
11.54
1.050788
16835219
ZIJIN MINING-H
3.14
-0.3174603
25327633
11450200
ZOOMLION HEAVY-H
9.89
3.235908
18641483
1.873536
23550540
ZTE CORP-H
11.5
1.054482
4390115
31.75
2.254428
15251249
5.58
0.7220217
35720876
4.33
1.882353
68046798
19.58
-0.5081301
3385870
DONGFENG MOTOR-H
10.58
4.33925
42046962
CHINA CITIC BK-H
3.97
1.017812
22652647
GUANGZHOU AUTO-H
5.72
4.570384
13161389
CHINA COAL ENE-H
7.71
1.048493
25964750
HUANENG POWER-H
6.52
0.7727975
9793700
CHINA COM CONS-H
6.92
1.615272
15498575
IND & COMM BK-H
5.2
0.9708738
277939270
CHINA CONST BA-H
5.88
0.6849315
261203943
JIANGXI COPPER-H
19.4
-0.4106776
6992000
CHINA COSCO HO-H
3.66
0.2739726
15572783
PETROCHINA CO-H
10.28
0.9823183
73448319
CHINA LIFE INS-H
22.5
0.6711409
20396728
PICC PROPERTY &
9.93
0.6079027
14878539
CHINA LONGYUAN-H
4.81
-0.2074689
6187000
PING AN INSURA-H
58.8
1.030928
12096388
CHINA MERCH BK-H
14.18
0.2828854
12053584
SHANDONG WEIG-H
8.15
0.9913259
10440000
BANK OF COMMUN-H BYD CO LTD-H
NAME
MOVERS
6
2 10510
INDEX 10492.09 HIGH
10507.2
LOW
10227.24
CHINA MINSHENG-H
7.38
0.8196721
17494461
SINOPHARM-H
24.7
1.022495
2095000
52W (H) 11916.1
CHINA NATL BDG-H
9.61
-0.4145078
25871800
TSINGTAO BREW-H
42
0.7194245
874000
(L) 8987.76
14.84
0.5420054
3958142
WEICHAI POWER-H
29.5
1.549053
1176079
CHINA OILFIELD-H
32
10220
20-November
22-November
Shanghai Shenzhen CSI 300 PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AGRICULTURAL-A
2.58
0
26906430
CITIC SECURITI-A
10.68
-0.5586592
42379387
SANY HEAVY INDUS
8.89
-1.659292
8663145
AIR CHINA LTD-A
4.62
-0.2159827
4570845
CSR CORP LTD -A
4.63
0.4338395
25546787
SHANDONG DONG-A
38.42
0.3919519
2073548
ALUMINUM CORP-A
4.78
-1.035197
5825532
DAQIN RAILWAY -A
6.17
0
9572295
SHANDONG GOLD-MI
36.58
-0.2182215
3915626
3.4
-0.5847953
6330227
DATANG INTL PO-A
4.06
-0.4901961
1650131
SHANG PHARM -A
10.5
-1.685393
4220371
NAME
ANGANG STEEL-A
NAME
NAME
16.08
-1.289134
5342962
EVERBRIG SEC -A
11.5
-0.605013
8640042
SHANG PUDONG-A
7.44
-0.4016064
22784842
BANK OF BEIJIN-A
7.2
-0.5524862
14303541
GD POWER DEVEL-A
2.32
-1.276596
22878095
SHANGHAI ELECT-A
3.9
-1.265823
1393267
BANK OF CHINA-A
2.76
0.3636364
25141583
GF SECURITIES-A
12.4
-1.03751
14012209
SHANXI LU'AN -A
16.55
-1.896858
5070259
4.2
-0.2375297
14449775
GREE ELECTRIC
22.69
-1.647161
7970826
SHANXI XINGHUA-A
36.76
0.7951741
5015454
9.01
-0.6615215
4585898
GUANGHUI ENERG-A
15.47
-1.652893
10595151
SHANXI XISHAN-A
11.88
-1
4934400
12633128
HAITONG SECURI-A
8.56
-0.4651163
27164418
SHENZEN OVERSE-A
5.93
0.6791171
18999526 15550969
ANHUI CONCH-A
BANK OF COMMUN-A BANK OF NINGBO-A BAOSHAN IRON & S
4.61
0
16.27
0.2464572
2997229
HANGZHOU HIKVI-A
27.79
-1.871469
1766823
SUNING APPLIAN-A
6.14
-1.127214
CHINA CITIC BK-A
3.63
-0.2747253
4926988
HENAN SHUAN-A
57.76
-1.500682
777200
TASLY PHARMAC-A
50.51
-2.452684
1165082
CHINA CNR CORP-A
4.11
0
16587920
HONG YUAN SEC-A
17.37
-1.138304
10797139
TSINGTAO BREW-A
30
-0.6622517
1274314
BYD CO LTD -A
CHINA COAL ENE-A
6.9
-0.5763689
2625189
HUATAI SECURIT-A
8.26
-0.4819277
11591371
WEICHAI POWER-A
21.59
-0.9633028
7579144
CHINA CONST BA-A
4.15
-0.4796163
10664139
HUAXIA BANK CO
8.42
-0.7075472
10290290
WULIANGYE YIBIN
27.46
-4.652778
42334696 4681592
CHINA COSCO HO-A
4.17
-2.112676
9665341
IND & COMM BK-A
3.84
0
19569055
YANGQUAN COAL -A
12.99
-1.366743
CHINA CSSC HOL-A
19.45
-1.269036
3247782
INDUSTRIAL BAN-A
12.4
-0.8
20426358
YANTAI CHANGYU-A
41.29
-0.1933768
784213
CHINA EAST AIR-A
3.11
-1.892744
15159507
INNER MONG BAO-A
33.22
-2.121391
23619884
YANTAI WANHUA-A
12.99
-0.4597701
3991503
CHINA EVERBRIG-A CHINA LIFE INS-A
2.58
-0.3861004
23999894
INNER MONG YIL-A
19.96
-1.771654
5883046
YANZHOU COAL-A
16.5
-2.48227
2071802
17.28
-0.1156069
3182287
INNER MONGOLIA-A
5.15
-1.717557
21046391
YUNNAN BAIYAO-A
65.05
-0.2300613
1444891
CHINA MERCH BK-A
9.9
-0.3021148
15471082
JIANGSU HENGRU-A
28.53
-0.5230126
2304828
ZHONGJIN GOLD
15.18
-0.3282994
6176089
CHINA MERCHANT-A
8.79
-1.457399
9368648
JIANGSU YANGHE-A
96
-3.439952
2045762
ZIJIN MINING-A
3.7
-1.069519
13255387
CHINA MERCHANT-A
22.7
0.4424779
5975998
JIANGXI COPPER-A
20.37
-1.594203
2881365
ZOOMLION HEAVY-A
8.15
-1.092233
17687241
10.98
-1.347709
1961361
ZTE CORP-A
8.04
-1.107011
5903650
10.72
-1.741522
6393858 6164613
CHINA MINSHENG-A
6.13
0.3273322
45378358
JINDUICHENG -A
CHINA NATIONAL-A
6.73
-1.895044
12133782
JIZHONG ENERGY-A
CHINA OILFIELD-A
15.7
-0.9463722
1105358
KANGMEI PHARMA-A
15.39
-0.965251
CHINA PACIFIC-A
16.69
-0.5955926
7968881
KWEICHOW MOUTA-A
217.29
-0.6219986
5152080
32.18
-2.867492
8997782 8492294
CHINA PETROLEU-A
6.04
-1.145663
16055727
LUZHOU LAOJIAO-A
CHINA RAILWAY-A
5.32
0.7575758
12710303
METALLURGICAL-A
2.02
-0.9803922
CHINA RAILWAY-A
2.83
1.071429
24974060
NINGBO PORT CO-A
2.46
-0.4048583
6434183
PANGANG GROUP -A
3.4
-1.734104
24624894 8671324
CHINA SHENHUA-A
21.51
-0.7841328
5192426
CHINA SHIPBUIL-A
4.15
-1.425178
15805748
PETROCHINA CO-A
8.51
-0.9313155
13.15
-0.8295626
MOVERS
44
242
14 2200
INDEX 2177.546
CHINA SOUTHERN-A
3.35
-0.887574
13899290
PING AN BANK-A
4858906
HIGH
2194.9
CHINA STATE -A
3.06
0
28706570
PING AN INSURA-A
36.5
0.1646542
11062312
LOW
2153.64
CHINA UNITED-A
3.25
0.308642
35956238
POLY REAL ESTA-A
11.46
0.08733624
27146988
CHINA VANKE CO-A
8.38
0.1194743
30010069
QINGDAO HAIER-A
10.92
-0.6369427
3519144
CHINA YANGTZE-A
6.38
0.3144654
8243804
QINGHAI SALT-A
24.04
-0.661157
1946108
CHONGQING WATE-A
5.15
-0.3868472
1825863
SAIC MOTOR-A
13.17
-1.495886
11873284
PRICE DAY %
Volume
PRICE DAY %
Volume
52W (H) 2717.825 (L) 2149.538
2150
20-November
22-November
FTSE TAIWAN 50 INDEX NAME ACER INC
NAME
PRICE DAY %
Volume
FORMOSA PLASTIC
70.5
-1.536313
8702539
TAIWAN MOBILE CO
104.5 -0.4761905
4147737
FOXCONN TECHNOLO
93.6
-1.057082
6475324
TPK HOLDING CO L
413.5 -0.6009615
30.85
0.6525285
10627859
TSMC
91.3
0.8839779
20798294
89 -0.1122334
16370439
UNI-PRESIDENT
49.5
-3.320313
12674033
UNITED MICROELEC
10.1
0
41561331
WISTRON CORP
28.4
0
2083429
22.9
0.2188184
7968094
ADVANCED SEMICON
22.95
1.548673
16319553
ASIA CEMENT CORP
35.95 -0.1388889
913949
FUBON FINANCIAL
ASUSTEK COMPUTER
314
1.290323
2173140
HON HAI PRECISIO
AU OPTRONICS COR
11.45
4.090909
54481431
HOTAI MOTOR CO
CATCHER TECH
139.5 -0.7117438
10396688
HTC CORP
CATHAY FINANCIAL
29.15
1.567944
19631265
CHANG HWA BANK
14.9
2.054795
CHENG SHIN RUBBE
69.9 -0.1428571
CHIMEI INNOLUX C
1.06383
174300
236.5
-2.070393
17421786
HUA NAN FINANCIA
15.4
1.650165
3662045
YUANTA FINANCIAL
13.25
0.7604563
6804169
6553532
LARGAN PRECISION
692 -0.7173601
917475
YULON MOTOR CO
49.5
1.020408
1883171
3339644
LITE-ON TECHNOLO
37.5
0.913242
45521949
MEDIATEK INC
6.4
0.9463722
16617334
MEGA FINANCIAL H
CHINA STEEL CORP
24.95
0.4024145
8090347
CHINATRUST FINAN
15.9
1.923077
24594191
CHUNGHWA TELECOM
92.7
0.1079914
3172800
QUANTA COMPUTER
COMPAL ELECTRON
17.4
-2.247191
19417893
SILICONWARE PREC
DELTA ELECT INC
104
1.960784
4236389
SINOPAC FINANCIA
FAR EASTERN NEW
31.5 -0.7874016
6316678
SYNNEX TECH INTL
-1.146132
5354150
FAR EASTONE TELE
69
3324596
190
11.05
CHINA DEVELOPMEN
NAME
0
2155696
313
0.805153
3544068
21.35
0.7075472
17002338
NAN YA PLASTICS
46.2 -0.2159827
4806819
PRESIDENT CHAIN
148
-1.986755
1264482
69.5
1.459854
3758239
28.25
0.8928571
4659800
11.4
0.4405286
17912296
53
-4.504505
4157820
TAIWAN CEMENT
36.15
-1.766304
7487216
15.25
0.9933775
3897334
67.6
-2.170767
10407320
24.55
1.656315
1350484
FIRST FINANCIAL
16.7
1.829268
8881479
TAIWAN COOPERATI
FORMOSA CHEM & F
61.6
-1.597444
4821246
TAIWAN FERTILIZE
FORMOSA PETROCHE
79.7
0.6313131
1426335
TAIWAN GLASS IND
MOVERS
27
20
3 5050
INDEX 5003.12 HIGH
5045.52
LOW
4967.13
52W (H) 5621.53 4960
(L) 4643.05 20-November
22-November
November 23, 2012 business daily | 13
MARKETS GAMING STOCKS - DAILY PERFORMANCE (Hong Kong Stock Exchange) gaLaXy eNTerTaINMeNT
MeLCo CroWN eNTerTaINMeNT
MgM CHINa HoLDINgS 38.2
28.9
13.4
28.7
13.3 37.7
28.5
13.2
28.3
Max 28.85
average 28.631
Min 28.15
Last 28.85
28.1
SaNDS CHINa LTD
Max 38.1
average 37.958
Min 37.4
37.2
Last 38.1
SJM HoLDINgS LTD
Max 13.4
average 13.303
Min 13.16
Last 13.4
13.1
WyNN MaCaU LTD
32.5
18.0
32.1
17.9
21.8 21.6 21.4
17.8
31.6
average 32.087
Max 32.4
Min 31.6
Last 32.25
31.3
17.7 Max 17.98
average 17.888
Commodities ENERGY
NAME
PRICE
WTI CRUDE FUTURE Jan13
87.51
0.148775463
-10.51232232
109.6699982
79.68000031
BRENT CRUDE FUTR Jan13
110.62
-0.216489266
6.879227053
120.7699966
90.15999603
GASOLINE RBOB FUT Dec12
273.5
-0.527368612
10.22003708
295.8800077
217.2600031
GAS OIL FUT (ICE) Jan13
952.5
-0.131061599
6.276150628
1036.25
799.25
NATURAL GAS FUTR Dec12
3.894
-0.230591852
3.646526484
4.350000381
2.90899992
DAY %
YTD %
(H) 52W
306.31
-0.296204674
6.676185833
335.1700068
254.2500019
1729.84
0.1778
10.5393
1796.08
1522.75
Silver Spot $/Oz
33.3488
0.8431
19.8089
37.4775
26.1513
Platinum Spot $/Oz
1584.33
0.8241
13.6128
1736
1339.25
Palladium Spot $/Oz
651.63
2.1684
-0.2862
725.19
553.75
LME ALUMINUM 3MO ($)
1931
-1.680244399
-4.405940594
2361.5
1827.25
LME COPPER 3MO ($)
7692
-1.169214956
1.210526316
8765
7100.25
LME ZINC
1917
-1.18556701
3.902439024
2220
1745
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jan13 Mar13
16695
0.54200542
-10.7696419
22150
15236
14.83
-0.636515913
-3.419081732
16.60000038
14.60000038
745.25
-0.267648043
24.15660142
846.25
511
21.0 Max 21.7
average 21.422
Last 21.55
Min 21.2
2289748
10.16
1.905717
25.58714
10.25
7.92
1277267
18.65999985
AMAX HOLDINGS LT
0.066
3.125
-24.13793
0.119
0.055
15192000
66.84999847
BOC HONG KONG HO
23.9
1.057082
29.89131
25
16.26
8297642
153.45
0.655952771
-35.51166211
249
149.4499969
SUGAR #11 (WORLD) Mar13
19.64
-1.306532663
-15.92465753
25.12999916
COTTON NO.2 FUTR Mar13
72.66
0.234515106
-17.90758106
98.5
World Stock MarketS - Indices 12836.89 2926.554
FTSE 100 INDEX
GB
DAX INDEX
GE
MACAU RELATED STOCKS CROWN LTD
COFFEE 'C' FUTURE Mar13
US
0.9582 1.5235 0.8931 1.2043 76.03 7.9823 7.7498 6.2202 48.6088 30.2 1.2152 28.914 40.996 8875 74.482 1.19995 0.77553 7.7018 9.6245 94.12 1.029
2.16
1126.75
US
(L) 52W
1.0857 1.6309 0.9972 1.3548 84.18 8.0308 7.7979 6.3964 57.3275 32 1.315 30.5 44.35 9664 88.637 1.24438 0.86197 8.5805 10.8355 111.44 1.0311
(L) 52W
652
1781.5
NASDAQ COMPOSITE INDEX
(H) 52W
1.6554 2.7601 0.1495 -0.7715 -7.0799 0.2029 0.2116 1.1944 -3.7806 2.7353 5.8017 3.9087 6.7056 -5.9623 -8.6768 1.0061 3.501 1.815 0.8112 -6.3786 0.0097
3.25
948.25
16.09645507
DOW JONES INDUS. AVG
CROSSES
YTD %
(H) 52W
17.13215259
-0.318527694
DAY %
ASIA PACIFIC
0.1254 0.4149 0.5018 0.5551 -0.5678 0 -0.0052 0.1559 -0.0453 0 0.0163 0.0412 0.1217 0.1037 -0.6998 -0.0515 -0.1403 -0.4168 -0.5619 -1.1179 0
25.90909
-0.087158629
PRICE
MAJORS
DAY %
1.0378 1.5972 0.9367 1.2861 82.77 7.9834 7.751 6.2207 55.15 30.71 1.2255 29.14 41.085 9644 85.884 1.20467 0.8052 7.9892 10.2687 106.45 1.03
2.973978
859.75 1408.25
COUNTRY
PRICE AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
2.77
WHEAT FUTURE(CBT) Mar13 SOYBEAN FUTURE Jan13
NAME
Last 17.82
(L) 52W
Gold Spot $/Oz
CORN FUTURE
Min 17.78
CURRENCY EXCHANGE RATES
HEATING OIL FUTR Dec12 METALS
21.2
NAME ARISTOCRAT LEISU
PRICE
DAY % YTD %
VOLUME CRNCY
CENTURY LEGEND
0.25
0
8.69565
0.335
0.204
0
CHEUK NANG HLDGS
4.16
0.2409639
48.57143
4.36
2.5
30000
CHINA OVERSEAS
21.7
2.117647
67.36856
21.95
11.507
27456398
CHINESE ESTATES
11.8
-0.3378378
-5.6
13.26
8.3
25000
CHOW TAI FOOK JE
10.46
3.976143
-24.85632
15.16
8.4
4676200
EMPEROR ENTERTAI
1.64
0.6134969
47.74775
1.65
0.99
675000
FUTURE BRIGHT
1.29
2.380952
207.1429
1.36
0.38
1416000 23256650
YTD %
(H) 52W
(L) 52W
0.3783083
5.06918
13661.87
11231.56
GALAXY ENTERTAIN
28.85
2.669039
102.5983
29.45
13.2
0.338398
12.33726
3196.932
2441.48
HANG SENG BK
116.8
1.038062
26.74986
120
91.15
1502003
5778.04
0.4521882
3.692569
5989.07
5075.22
HOPEWELL HLDGS
29.65
2.241379
51.25886
31.091
18.319
1605564
7237.62
0.736425
22.70584
7478.53
5366.5
HSBC HLDGS PLC
76.55
0.7236842
29.74576
78
56
13044214
HUTCHISON TELE H
3.37
1.506024
12.70903
3.88
2.81
2482220
LUK FOOK HLDGS I
21.3
1.670644
-21.40222
34.3
14.7
3330000
MELCO INTL DEVEL
8
0.2506266
38.64818
8.28
5.12
3578336
NIKKEI 225
JN
9366.8
1.564431
10.77957
10255.15
8135.79
HANG SENG INDEX
HK
21743.2
1.016709
17.94911
22149.69922
17613.19922
CSI 300 INDEX
CH
2177.546
-0.7904703
-7.17027
2717.825
2149.538
MGM CHINA HOLDIN
13.4
1.515152
39.69751
14.76
9.347
1767461
TAIWAN TAIEX INDEX
TA
7105.76
0.2436344
0.4762346
8170.72
6609.11
MIDLAND HOLDINGS
3.6
4.651163
-8.95404
5.217
3.249
6480000
NEPTUNE GROUP
0.153
0
37.83784
0.222
0.081
1450000
NEW WORLD DEV
12.52
2.120718
99.99999
13.2
6.13
13304807
SANDS CHINA LTD
8045128
KOSPI INDEX
SK
1899.5
0.8205771
4.040006
2057.28
1750.6
S&P/ASX 200 INDEX
AU
4413.072
0.9972081
8.788509
4581.8
3973.8
ID
4335.927
0.4319853
13.44678
4366.856
3618.969
FTSE Bursa Malaysia KLCI
MA
1618.55
-0.2723402
5.737137
1679.37
1424.19
NZX ALL INDEX
NZ
869.138
0.5620864
19.09258
874.107
712.548
JAKARTA COMPOSITE INDEX
32.25
1.895735
46.92482
33.05
20
SHUN HO RESOURCE
1.24
0
24
1.37
0.95
0
SHUN TAK HOLDING
3.25
1.5625
26.99637
3.51
2.418
8961904
SJM HOLDINGS LTD
17.82
-1
42.49689
18.18
11.519
5779090
SMARTONE TELECOM
14.68
-0.5420054
9.226194
17.5
11.72
2566000
WYNN MACAU LTD
21.55
0.9367681
10.51282
25.5
14.62
5672200
ASIA ENTERTAINME
3.37
-1.173021
-42.68708
7.24
2.4
184622
51.16
35.79
403383
PHILIPPINES ALL SHARE IX
PH
3591.07
-0.6800971
17.93179
3627.39
2952.17
HSBC Dragon 300 Index Singapor
SI
577.07
-0.08
16.27
NA
NA
STOCK EXCH OF THAI INDEX
TH
1280.14
0.2937974
24.85274
1314.64
965.23
BALLY TECHNOLOGI
45.22
0.3773585
14.30738
HO CHI MINH STOCK INDEX
VN
383.22
-0.1693282
9.00868
492.44
332.28
BOC HONG KONG HO
3.01
0.3333333
25.56381
3.3
2.175
300
Laos Composite Index
LO
1223.9
-0.7420624
36.07053
1249.34
876.33
GALAXY ENTERTAIN
3.65
5.157015
95.18717
3.73
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43800
INTL GAME TECH
13.19
-0.6028636
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18.1
10.92
2457278
JONES LANG LASAL
76.89
0.1563111
25.51421
87.52
56.51
111231
LAS VEGAS SANDS
43.72
0.2752294
2.316874
62.09
34.72
3160858
MELCO CROWN-ADR
15.02
2.316076
56.13306
16.02
8.32
4808876
MGM CHINA HOLDIN
1.76
0
47.68902
1.96
1.1917
2000
MGM RESORTS INTE
9.89
2.593361
-5.177376
14.9401
8.83
9756532
SHFL ENTERTAINME
14.26
0.8486563
21.67235
18.77
10.22
142989
SJM HOLDINGS LTD
2.3125
-1.175214
43.85041
2.34
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1000
WYNN RESORTS LTD
108.03
1.085431
4.274551
129.6589
84.4902
1000600
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
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business daily November 23, 2012
Opinion Exit Afghanistan? Jaswant Singh
Former Indian finance minister, foreign minister and defence minister
the overblown and sometimes clearly dishonest claims about the war are an obscenity.
War aftermath
I
n his victory speech to a rapturous crowd in Chicago following his re-election, President Barack Obama affirmed that America’s “decade-long conflict” in Afghanistan will now end. The line was greeted with prolonged applause – and understandably so. In fact, this ill-advised war – launched on the basis of a United Nations Security Council resolution – has been grinding on for 11 years, making it the longest in American history. At the beginning, the war was aimed at eliminating Al Qaeda, vanquishing the Taliban, and transforming Afghanistan into something resembling a Western-style nation-state. With none of these goals fully achieved, America’s intervention – like every other intervention in Afghanistan’s history – is ending unsatisfactorily. As the curtain drops, two developments will greatly influence the withdrawal process and the ultimate outcome. The first is the management of the transition to Afghan control, which depends on an orderly withdrawal of American and NATO forces by 2014. The second is the election, also to be held in 2014, of a new
Afghan president – a process that needs to permit the United States and its NATO allies to claim plausibly that they are handing the country over to a legitimate government. For Afghanistan, ravaged by war without respite since the “Saur Revolution” of 1978, the endgame will be even more nerve-wracking. As the U.S. military leaves, it will enter another period of political and strategic uncertainty, after almost a half-century of disorder and civil war.
Afghanistan will remain what it was: a violent and ungovernable tribal melange
Uncertainty waves A previous period of such uncertainty was the spur to Pakistan’s creation of the Taliban, which proceeded to disrupt Afghanistan’s (and Pakistan’s) already-fragile social order. Today, almost three generations of Afghans have lived from birth to adulthood without having known stability and peace. And, as a visiting American scholar/diplomat recently told me in a confidential conversation: “In the U.S., too, at least a generation of our children, from birth till the age of 15, have seen their country almost continuously at war.” That is an arresting thought. It is against this bitter backdrop
that a new Afghan president will be elected and the withdrawal of forces carried out. Will these two developments bring about a stable peace, or will Afghanistan succumb to instability once more? And what consequences are in store for the U.S. following this war without victory or defeat? Last May, Obama declared that the U.S. had “turned the tide of war” in Afghanistan, an eerie echo of Richard Nixon’s rhetoric as he withdrew U.S. forces from Vietnam. And, like Vietnam, will the U.S. – exhausted and nearly bankrupted by the effort – see all of its supposed gains evaporate soon after it leaves? After all, Al Qaeda,
albeit weakened, remains capable of regenerating inside Afghanistan, where the Taliban remain dominant in the country’s east and south, as well as in neighbouring North Waziristan in Pakistan. Just how weakened America is in the region matters. As the U.S. strategist Daniel Twining has observed: “Over the coming four years, U.S. leadership… will be essential” for “the consolidation of a wideranging strategic partnership with India,” as well as for efforts “to prevent Pakistan’s many pathologies…from spilling over in ways that undermine fundamental U.S. (and Indian) interests.” So where does this leave Afghanistan’s neighbours? Deeply concerned. Our primary aim is the restoration of peace and, if not stability, an acceptable political equilibrium. Even if we did not incur the same costs as the U.S. over the past decade – the hundreds of billions of dollars spent, and the many young people killed or injured – we have paid the price that regional uncertainty always imposes: lost trade, lost growth, refugees, and violence. In the face of these costs,
This strategically myopic and militarily ill-conceived war was unwinnable from the beginning. As a result, Afghanistan will remain what it was: a violent and ungovernable tribal melange. Indeed, across the region, apprehension is growing that when foreign troops leave, Afghanistan will again descend into civil war, ultimately bringing the Taliban back to power. That is why “bringing the troops home early” has become the prime objective of Western politicians who are engaged in the region. The West needs to get out before the bloodletting starts again in earnest. My fear is that we have not seen the last of Al Qaeda or the Taliban. As a neighbouring country, India would face disturbing consequences if they returned to power in Afghanistan, as would Iran, which would not sit idly by if sectarian strife intensified and the Shia became targets of a resurgent Taliban. Other neighbours would also pay a price should the Taliban’s seemingly invariable return turn bloody, however immune they believe they are. China, which has invested billions of dollars in developing Afghanistan’s natural resources – investments protected, ironically, by the U.S. – would be certain to experience greater unrest in Xinjiang Province, home to millions of disaffected Muslims. But the country that will be most affected is Pakistan, which faces challenges to its territorial and political integrity. The territorial challenge is, no doubt, a mushrooming anxiety; an innocuous remark by an American envoy about the Durand Line, which marks the Afghanistan-Pakistan border, drew sharp retorts from both countries. Afghanistan’s history of occupation by foreign troops and their eventual withdrawal has been repeated so many times that one wearies of repeating the tale. Yet this history is the litmus test. With the U.S. withdrawal, turmoil is bound to re-emerge, and the entire region will again bear the consequences. © Project Syndicate
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November 23, 2012 business daily | 15
OPINION Business
wires Leading reports from Asia’s best business newspapers
Economic Times
Greece needs growth, not austerity Costas Meghir
Dimitri Vayanos Nikos Vettas
Leading Indian mobile phone companies including BhartiAirtel, Idea Cellular, Vodafone, Tata Teleservices and Aircel have begun a new round of reducing freebies and slashing talk time on pre-paid discount vouchers, continuing with the trend that kicked off about a year ago, as the industry attempts bold steps to increase sales and margins in the fiercely competitive sector. Prepaid customers constitute over 96 percent of the country’s 906 million plus cell phone connections. Special tariff vouchers are used by a majority of prepaid subscribers.
Korea Herald Korea welcomed the 10 millionth visitor of the year on Wednesday – a landmark figure for Korea’s tourism industry. According to the Korea Tourism Organisation, the total number of foreign visitors to the country is expected to reach 11.3 million by the end of the year, up about 15 percent from the previous year. The number of inbound travellers has grown an average of 15 percent since 1978, higher than other major tourist destinations such as the U.S. and China.
Bangkok Post Voice TV, the satellite TV business owned by the Shinawatra family, will focus on news and online media next year to attract younger viewers, while it will launch event hall rentals to accommodate the entry of Paethongtarn, the youngest daughter of ousted premier Thaksin, to the company. Previously she ran a nail shop with elder sister Pinthongtha. Called Voice Space, the event hall covers 1,250 square metres at the headquarters of Voice TV and can cater to 1,000 guests.
Jakarta Post National flag carrier Garuda Indonesia has secured a US$120 million loan from a syndicate of domestic and international lenders to aid its business expansion plans next year. President director Emirsyah Satar signed the syndicated commitment in Jakarta on Wednesday with representatives from the banks concerned: Citi Indonesia, Bank ICBC Indonesia, Bank Panin, First Gulf Bank PJSC, Korea Development Bank, Standard Chartered Bank and the Bank of China. The loan would be used to help Garuda finance the purchase of 24 new aircraft in 2013.
Professor of economics at Yale University
Professor of finance at the London School of Economics
Professor of economics at the Athens University of Economics and Business
G
reece’s economy and society are imploding. Gross domestic product has declined more than 20 percent since 2008. The unemployment rate has tripled, and now stands at 25 percent, with joblessness among youth at twice that level. Crime is on the rise, as are racist incidents, and ideologies of the extreme right and left are gaining significant support. Worse, current policies aren’t stemming the economic decline. The new three-party government elected in June has focused its energies on negotiating a new package of austerity measures to meet the conditions set by the so-called troika (the European Central Bank, the European Commission and the International Monetary Fund) for the disbursement of the next tranche of the bailout loan. The reforms that are the only pathways to growth, such as building a well-functioning public administration and liberalising markets, are resisted by Greek politicians and vested interests. They are also greatly underemphasised by the troika’s push for austerity. Unless there is a change of course, Greece is headed for disaster: further declines in GDP, a possible chaotic default on its debt, extremist political parties in power, and isolation from Europe. The European Union also stands to lose because a Greek meltdown would reverse the decadeslong process of integration and undermine the credibility of the single currency. And Greece’s creditors won’t get any of their money back.
debt-to-GDP ratio even larger. This will make it impossible for Greece to ever repay its debt in full. Its European partners should recognise this state of affairs and write off a significant fraction of the debt. This would allow Greece to grow and repay the rest. Writing off Greece’s debt can be done in a way that preserves, and even promotes, incentives for reform. A portion of the officially held debt – 50 percent or more – should be set aside to be written off gradually over the next five years or so, on the condition that Greece completes a set of institutional and market changes. The steps include making the public administration more efficient, speeding judicial proceedings, reducing corruption and liberalising markets. Achievement of these
Debt reduction To avoid such an outcome, which could occur soon, Greece’s European partners should devise a long-term strategy with two mutually reinforcing objectives: a drastic reduction of Greece’s debt and a thorough overhaul of the country’s dysfunctional economy. Greece’s debt is projected to rise to 189 percent of GDP next year, from 129 percent in 2009. This is despite the restructuring of privately held debt and severe austerity measures that have almost wiped out the government’s primary deficit. Most of the increase in the debt-to-GDP ratio can be attributed to the large decline in GDP. Further austerity measures, designed to generate the large primary surplus necessary to begin reducing the debt, will cause GDP to fall further, making the
Unless there is a change of course, Greece is headed for disaster: further declines in GDP, a possible chaotic default on its debt, extremist political parties in power, and isolation from Europe
milestones could be monitored using existing indexes designed by institutions such as the World Bank and the IMF. Such a system would not only promote reform, but would put Greece’s debt, which cannot be repaid in full in any case, to good use. More generally, the troika should emphasise structural changes rather than the rapid accumulation of a primary surplus. The initial emphasis on reducing the deficit was appropriate given the unsustainably large budget shortfall.
Retaining talent However, continued austerity will be counterproductive because it undermines reform. For example, deep salary cuts in the public administration are causing talented personnel to leave, thus impairing an already weak system and worsening the core problem of low public-sector productivity. The agencies in charge of essential tasks such as tackling tax evasion, supervising financial markets and prosecuting white-collar criminals, are often short of funds, equipment and
the ability to attract talent. The troika should ensure that those funding needs are met, regardless of the effect on the deficit. And it is hard to imagine how the Greek politicians and vested interests who have successfully resisted reform could continue to block institutional changes that are the condition for writing off a large part of the debt and averting disaster. An emphasis on transformation and debt reduction would be welcomed by the Greek population, whose support is necessary for these efforts to succeed. Giving voters the chance to back debt relief in exchange for reforms will dim the appeal of the extremist parties. The only way forward is to overhaul the Greek economy. For the population, that means recognising that resisting structural reforms would be suicidal. For its part, the troika should acknowledge that further budget cuts would be catastrophic, and could only lead to a continuing deterioration of the economy and to the severing of Greece’s links with Europe. Bloomberg View
16 |
business daily November 23, 2012
CLOSING HK de-flags five Iranian ships
Barclays ends floor trading on LME
Hong Kong has deregistered five Iranian cargo ships and a further 14 are likely to follow after their classification society quit Iran due to sanctions imposed by the European Union and the United States over its nuclear programme. Hong Kong’s marine department has asked the owners of 19 dry bulk carriers, managed by an Iranian firm, to register their ships elsewhere after the Korean Register of Shipping said earlier this year it would not provide the ships safety auditing. “Five of the 19 ships have deregistered under the request of their owners,” said Wong Sai Fat, general manager of the department’s shipping register.
Barclays Plc withdrew yesterday from floor trading on the London Metal Exchange, the world’s biggest metals bourse, as the bank reviews its businesses to cut costs. The London-based bank became a Category 2 member of the exchange with immediate effect, meaning it will continue to trade electronically and by telephone, the LME said in a notice to members yesterday. Barclays remains “deeply committed” to the metals market, it said in a statement. Barclays’ withdrawal leaves 11 companies still in the LME’s 6-meter-wide (20-foot) ring, London’s last venue for open-outcry trading. The 135-year-old LME handles more than 80 percent of world trade in industrial-metals futures.
Eurozone output contracts again Business activity continued to shrink in November, a survey suggests
T
he euro zone economy is on course for its weakest quarter since the dark days of early 2009, according to business surveys that showed companies toiling against shrinking order books in November. Service sector firms like banks and hotels that comprise the bulk of the economy fared particularly badly this month, and laid off staff at a faster pace. While the monthly rate of decline that manufacturers
reported eased far more than economists anticipated, Markit’s latest Purchasing Managers’ Indexes (PMIs) pointed to little change overall for a recession-hit euro zone this month. The flash service sector PMI fell to 45.7 this month, its worst reading since July 2009, the survey showed yesterday, failing to meet the expectations of economists who thought it would hold at October’s 46.0. It has been rooted below
the 50 mark that divides growth and contraction for 10 months now, and survey compiler Markit said it was too soon to say if this marked the nadir. With more austerity on the way, and a reminder of the festering sovereign debt crisis in this week’s failure of lenders to agree more aid for Greece, prospects for next year look ominous. “The concern about the outlook is getting worse as we move towards the end of the
year,” said Chris Williamson, chief economist from Markit. He added that German companies especially have become more pessimistic about the year ahead.
German concern “If the domestic economy of Germany, the largest euro zone nation, is weakening, then that bodes ill for the rest of the region, especially as there’s little trade picking up outside the region.”
Overall, the PMIs were consistent with the economy shrinking around 0.5 percent in this quarter, Markit said. That would be the sharpest contraction since the first quarter of 2009. While they also suggested the economy shrank by a similar amount in the third quarter, instead of 0.1 percent shown in last week’s official data, Mr Williamson said it was very likely the fourth quarter would see a larger downturn. “The factors that were helping to prop up the official data in the third quarter won’t be apparent in the final quarter of the year. So you are going to see a deterioration in those official numbers.” Economists pointed to stronger industrial production data early in July and August as a reason why the euro zone economy did not contract as badly as many feared in the third quarter. The manufacturing PMI edged up to 46.2, its best showing since March, from 45.4 in October. That was better than even the most optimistic forecast for 46.0, from 40 economists polled by Reuters. Similarly, the factory output and new orders indexes crept higher, but still signalled steep rates of decline. The composite PMI, which groups together the services and manufacturing survey, pointed to an almost unchanged rate of decline for the economy in November, rising to 45.8 from 45.7 in October. Reuters
Glencore wins EU antitrust approval for Xstrata deal Still waiting for authorisations from other regulators
G
lencore International Plc won European Union approval for its US$32 billion takeover of Xstrata Plc after offering to end a zinc-purchase agreement with Nyrstar NV and to sell its stake in the company. Glencore’s offer to scrap an accord to sell Nyrstar zinc output in Europe and divest its stake of about 7.8 percent eliminated EU antitrust concerns that the combination with Xstrata would have been able to raise prices for zinc metal, the European
Commission said in an e-mailed statement yesterday. It will avoid buying Nyrstar’s European zinc for 10 years. Glencore, which got shareholder backing for its Xstrata offer on Wednesday, previously had an agreement to sell all of Balen, Belgiumbased Nyrstar’s so-called commodity-grade zinc. Nyrstar, the largest zinc smelter, produced about 1.1 million tonnes of the metal last year. Zinc accounted for 18 percent of Glencore’s 2011 operating profit, and 10
percent at Zug, Switzerlandbased Xstrata. “The proposed remedy ensures that competition in the European zinc metal market is preserved, so that European customers such as steel galvanisers and carmakers can continue to produce valuable consumer goods at low prices and good quality,” EU Competition Commissioner Joaquin Almunia said in the statement. Nyrstar dropped as much as 1.8 percent after the EU announced
Glencore’s offer to end the zinc-purchase pact and sell its stake in the company. Glencore said in a statement that it noted the EU’s approval and was still waiting for authorisations from Chinese and South African regulators before it could close the transaction. The company’s chief executive Ivan Glasenberg is creating the world’s fourthlargest mining company by adding Xstrata’s coal, nickel, zinc and copper operations to his cotton-to-crude-oil
commodities empire. Glencore will gain through the takeover the right to sell all of Xstrata’s production of zinc, used to harden steel for construction and automobiles, compared with a third now. Glencore Xstrata Plc, the new name for the company, will have interests in about 35 coal mines in Colombia, Africa and Australia, and account for about 10 percent of global Benseaborne Bernanke, exports Federal of the fuel. Reserve chairman Bloomberg