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Asia Business: The Week in Review - 2004-05-24


A Las Vegas tycoon raises the stakes in Macau's gambling industry, while shares in Hong Kong's PCCW climb more than five percent.

Las Vegas tycoon Sheldon Adelson opened a new casino in Macau last week, the Sands Macau, bringing gambling competition to the former Portuguese enclave for the first time in more than 40 years. Mr. Adelson hopes the casino will attract the mainly Chinese gamblers who drop billions of dollars every year at the Macau casinos run by Hong Kong billionaire Stanley Ho.

Mr. Adelson won one of three new licenses issued when Macau opened its gaming industry to competition two years ago. The company plans to open a second operation, a resort-casino to be called the Venetian Macau, in 2006.

Shares of PCCW, Hong Kong's dominant fixed line telecommunications company, soared more than five percent on hopes that China Netcom, China's second-largest fixed-line carrier, would buy a stake in the company. PCCW deputy chairman Jack So Chak-kwong says, however, that talks between the two companies are still at an early stage.

"We do not guarantee that the deal will finally materialize, so it's kind of too early to comment on specific details," he says. "But so far is to say that, whatever deal will conclude in the future would be mutually beneficial to both companies and to Hong Kong as a whole."

If an agreement is reached, analysts say China Netcom will swap equity in a broadband joint venture in southern China for a stake in PCCW's fixed-line business.

One question raised is whether PCCW would retain a majority interest in its fixed-line business if the deal materializes. Mr. So refuses to divulge any information.

Australian budget airline Virgin Blue posted a 47-percent rise in net profit to $110 million for the year to March 2004, as it continued to take market share from Australia's leading airline, Qantas Airways. The results were slightly below analysts' forecasts. The carrier, which became a listed company last December, has taken more than one-third of the Australian market.

Brett Godfrey, chief executive of Virgin Blue, says the airline has great opportunity for growth. "We believe very strongly that particularly with more and more of the Qantas market being dismantled ? we more than ever have a greater opportunity to become the largest and biggest domestic network carrier in Australia," he says.

Virgin Blue also said it is experiencing decade-high fuel prices, and announced that will be adding a fuel surcharge to ticket prices. The airline's shares dropped more than three percent after that announcement.

Singapore and South Korea agreed to speed up negotiations on a free-trade agreement, hoping to sign it by the end of this year. Singapore has made free-trade agreements a cornerstone of its economic policy. It already has free-trade deals with such countries as the United States, Australia, Japan and Switzerland.

Singapore raised its economic growth forecast for this year by two percentage points, after its economy expanded in the first quarter at an annual rate of 7.5 percent. The improved prospects were attributed to a strengthening global economy and rising domestic business confidence.

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