Macau Business Daily, September 20, 2013 by Business Daily

MOP 6.00 Vitor Quintã Deputy editor-in-chief

Sai Van Lake market plan ‘suspended’

he government says it has “suspended” a controversial tourism plan for restaurants and market stalls next to Sai Van Lake amid overwhelming public opposition. An official hinted the scheme would probably be revived at a later date. “The second-round [consultation] results reflect the public opinion right now but we will surely listen to the public opinion based on any changes and development in the future,” said Vong Iao Lek, acting president of the Civic and Municipal Affairs Bureau. A total of 99 percent of letters and phone calls to the bureau in a second round of public consultation were against the idea. More on page 3

Hengqin ‘perfect 1 solution’ to aid Macau: Pansy Ho Page 2

Jockey Club online bet takings surge Page 5

Start up loans a hit with young entrepreneurs Page 6

Brought to you by Zung Fu Motors (Macau) Limited

Number 375 Friday September 20, 2013

Editor-in-chief Tiago Azevedo

April 19, 2013

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Service here ‘getting worse’: China tourism boss

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Macau should improve its tourism service quality and seek a long-term policy on imported labour to become truly a world destination, said Wang Ping. The China Chamber of Tourism president suggested service quality, in particular of taxis, “is getting poorer” while holiday costs here soar. “Every type of spending at the hotels here is expensive,” said Ms Wang, on the sidelines of the Global Tourism Economy Forum yesterday.

CHINA MERCHANT

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Fed policy may buoy Macau inflation rate

China consumption plan working: Fitch

The United States Federal Reserve’s decision to maintain the momentum of its bond buying could prevent inflation in Macau from slowing further, an economist says. Official data yesterday showed the average annual rate of consumer price inflation in the 12 months to endAugust was 5.39 percent, the slowest rise for almost two years. That was linked to lower growth in Macau and the mainland said Jack Chang Chak Io.

The current growth of Macau gaming revenues and tourist numbers – despite mainland China’s economy slowing – suggests Beijing’s policy of expanding domestic consumption is working, suggests a note from Fitch Ratings in Hong Kong. Elsewhere, Wells Fargo & Co said in a note that Macau’s VIP gambling volumes might rise in the fourth quarter, correlating with a peaking of credit issuance in mainland China seen in April.

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September 20, 2013

Macau

Macau service ‘getting worse’: China tourism boss But mainland tourists still spending says China Chamber of Tourism Stephanie Lai

sw.lai@macaubusinessdaily.com

Pansy Ho Chiu King urged the government to draft a long-term policy for imported labour

acau should improve its tourism service quality and seek a long-term imported labour policy in order to become truly a world tourism centre, said Wang Ping. The China Chamber of Tourism

president commented to media that Macau’s tourism service quality, in particular the taxi service, “is getting poorer” while holiday costs here soar. “Every type of spending at the hotels here is expensive,” said Ms

Wang, on the sidelines of the Global Tourism Economy Forum yesterday. “And the quality of the taxi service here is getting worse and worse,” added Ms Wong, a ‘vice-chairperson’ of the three-day forum held in Macau. “At the airport, when I said I wanted to head to the Sands Cotai Central area, the driver asked me to pay 50 patacas [US$6.26) beforehand,” she told media. “The [tourism] service quality is dropping,” remarked Ms Wang. “And I think Macau’s software [staff] for supporting tourism is still weak.” Pansy Ho Chiu King, also a vice-chairperson of the forum, yesterday urged the government to draft a long-term policy for imported labour in order to prevent shortages in the future. “The key challenge would be still, I think, human resources and knowhow,” said Ms Ho. “We have to quickly gear up to bring the quality as well as the

capacity commensurate with future [tourism] development.” Budget travel is yet to become a dominant trend for mainland Chinese tourists as they still adore spending and shopping, Ms Wang said. The Chinese have become the single biggest source of global tourism income after spending US$102 billion (814.6 billion patacas) while travelling abroad in 2012, the United Nations’ World Tourism Organization estimates. “Chinese tourists do not mind spending,” said Ms Wang. “And don’t worry, they will always love to shop.” Hong Kong and Macau, in particular, are known as popular shopping destinations for mainland tourists. “Shopping is about the gift culture,” said Ms Wang. “People will always think ‘Oh, we have to buy this and that for our relatives, and it cannot be too cheap or else we will lose face’.”

Hengqin ‘perfect solution’ to aid Macau: Pansy Ho Island will help casino centre overcome tourism capacity limits, she says Stephanie Lai

sw.lai@macaubusinessdaily.com

engqin Island could be the “perfect solution” to complement Macau’s appeal as a tourism city, said businesswoman Pansy Ho Chiu King yesterday. Once the island boasts the Chimelong theme park and its resort, a yacht project and shopping outlets,

it will help Macau push forward, Ms Ho told media at the Global Tourism Economy Forum held at Macau Tower. “Nowadays to be truthful we of course are very happy and still basking in our own glory about Macau being the number one, the biggest gaming centre” in the world,”

she stated. “But we know at this very moment, many of our neighbouring countries are indeed reviewing their own [gaming] legislation. Each of them is a country. They have so much to offer, and they have also the capacity and space.” “If every one of them finally decides that they will also build another Cotai, then in time (…) even Macau might lose a bit of its appeal,” she added. “So we need to think in order for us to override some of these issues. It could be a perfect solution when we add Hengqin,” said Ms Ho, secretarygeneral of the forum. Hengqin’s Chimelong theme park should be open for business by the end of this year says the developer. Luxury yacht builder Ferretti Group announced in June it would set up its Asia Pacific headquarters on Hengqin Island. The total investment would be more than three billion yuan (US$487 million), state news agency Xinhua reported. Ms Ho expressed confidence that Hengqin can help draw tourists, including families, from other parts of the world beyond mainland China. Those visitors would also come to Macau. Thanks to the Guangzhou-Zhuhai Intercity Railway’s expansion, in the future there will be 100 million people

able to reach Macau in one hour or less, she stressed. Ms Ho is also the managing director of property-totransport conglomerate Shun Tak Holdings Ltd. On July 31, Shun Tak announced it won the bidding for a Hengqin Island site of 23,834 metres with 721 million yuan. The plot, which is close to the Lotus Bridge crossing point from Hengqin to Macau, will include offices, a hotel, commercial spaces and serviced apartments with “shopping elements”. She described it as “a very good first move” into the island, stressing that it would take “a while to build the critical mass and to build, (…) a level of sophistication”. “I think that is good and important to help other enterprises move into Hengqin because they would need their office space, they would need to (…) move people to work there,” Ms Ho said. Business Daily was unable to confirm the cost of the project with the company by the time the story went to press. “We will be signing the actual contract by the end of October,” Ms Ho said. “Subsequently we will be moving ahead to start the construction work, and it will take about two years, I believe.”

September 20, 2013 April 19, 2013

Macau

Opposition puts Sai Van tourist facilities on ice The government instead plans recreational equipment and green space for the lake shore Tony Lai

tony.lai@macaubusinessdaily.com

verwhelming public opposition has forced the government to suspend a controversial plan to put tourist facilities such as restaurants and market stalls on the shore of Sai Van Lake. But officials have left the door open for the plan to be revived if the public mood changes. The results of a second round of public consultations on the plan held this year were the opposite of the

results of the first round. The results of the first round, held in 2011, showed most people polled approved of the plan. The acting president of the Civic and Municipal Affairs Bureau, Vong Iao Lek, told a press conference yesterday: “There were completely different results in the two rounds, showing changes in social orientation in recent years, as well as the difference in the degree of public participation.” The results of the first round of

consultations caused a public outcry which forced the government to hold the second round between last December and March. “The second-round results reflect public opinion right now, but we will surely listen to public opinion based on any changes and developments in the future,” Mr Vong said. Asked if the project would be shelved, he replied: “In the future, if there is a need, we may proceed with the plan based on future

Most people polled rejected the plan for tourism facilities by Sai Van Lake

requirements, but the project is paused for now.” He said his bureau did not know whether the plan might be put into action elsewhere. The second round of public consultations garnered over 1,100 opinions from seminars, emails, letters and the plan website, and telephone surveys collected 1,529 opinions. Of the opinions collected, 87.3 percent of those given in seminars, 99.1 percent of those given in letters and phone calls to the bureau and 96.1 percent of those given on the website were against the plan. Three-quarters of people polled disagreed with the plan, but nearly 60 percent thought there should be more facilities on the shore of Sai Van Lake. Over 70 percent wanted only recreational equipment and green space there. A professor of public finance at the University of Macau, Newman Lam Ming Ki, who analysed the survey data, said: “This shows the public think there is a need for facilities like walking trails that can benefit them, but not for food and beverage facilities aimed at tourists.” The government unveiled yesterday a plan to increase the amount of green space and recreation facilities on the lake shore, and to begin work on doing so next year. It has no budget for the work, but the administrator of the Civic and Municipal Affairs Bureau, Mak Kim Meng, said the work “will not cost much.” The telephone poll found only one-quarter of people surveyed visited Sai Van Lake regularly. Mr Lam thinks having more recreational space could attract more residents to go there. The second round of public consultations cost about 500,000 patacas (US$62,500). Mr Vong promised to improve his bureau’s methods of consulting the public.

Unfinished flats loans up 252 pct June to July But judged y-o-y, value of collateralised mortgages falls 80 percent Michael Grimes

michael.grimes@macaubusinessdaily.com

he total monetary value of residential mortgage loans approved in Macau rose 17.7 percent year-on-year in July, while the value of approved commercial property mortgages fell 47.7 percent compared to the year earlier period. The numbers are revealed in data issued by the Monetary Authority of Macao yesterday. New home loans approved by Macau banks totalled 4.5 billion patacas (US$ 563.5 million), with 98.3 percent of the loan value awarded to residents rather than nonresidents. Judged month-on-month, the total value of all home loans rose 49.1 percent. New commercial mortgages for July totalled 2.6 billion patacas, with 95.5 percent of the value awarded to residents. Viewed month-on-month, the total value of all commercial loans fell 33.7 percent. New residential mortgages relying on uncompleted units as collateral, fell 79.7 percent judged year-

on-year to an aggregate value of approximately 33.5 million patacas in July. But when assessed monthto-month, the value of collateralised mortgages on unfinished flats actually rose 258.2 percent from a

slump of only 9.3 million patacas registered in June – when new rules on the registration and pre-selling of unfinished units came into effect. The rules are designed to prevent developers changing the specification

on units after taking money from investors, or failing to complete work. Rose Neng Lai, professor of finance at the University of Macau, told Business Daily some of the variation seen from June to July in the value of approved collateralised home loans could be due to a time lag between initial application and actual approval. “There can be many reasons for month-on-month variations. But Macau transactions can take some time,” she explained. “It all depends on the background of the buyers. If I am a seasoned investor, naturally I know what to do, and I can do it quickly. But If I’m not very seasoned, then it’s another story. If the applicant is new to the market, banks will have to do a more thorough search. Many of the presale units are however the higher end, more expensive ones,” she added, indicating that applicants for collateralised mortgages on such properties were more likely to be sophisticated investors.

September 20, 2013

Macau

Fed policy may buoy Macau inflation rate

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HOSPITALITY For richer, for poorer The number of visitors that stay overnight has been growing. In the second quarter of this year 25.5 percent more visitors stayed at least one night than two years earlier. Even so, a lot of overnighters do not stay in hotels. Since the beginning of 2011 the proportion of visitors using hotels in each quarter has varied from about 15 percent to almost 40 percent. On average, about 30 percent stayed elsewhere. The number of guests staying in all kinds of accommodation has been rising steadily. It has dipped occasionally, but the general trend is unmistakeably upward.

The cost of renting a home and eating out drove consumer price inflation in August Tony Lai

tony.lai@macaubusinessdaily.com

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The growth has been especially noticeable in the number of people staying in the swankiest accommodation and the number staying in the thriftiest accommodation. Owing to vigorous growth in the number of five-star hotel rooms, the number of guests in five-star hotels was almost 55 percent higher in the second quarter of this year than two years earlier. In the past year the increase was 36.8 percent. At the other end of the price range, the number of guests in hostels rose by 33 percent in the past two years. The number of rooms in hostels has also grown appreciably. The number of guests in four-star hotels, which usually have the highest rates of occupancy, grew more moderately. The numbers of guests in three-star and two-star hotels are shrinking, having fallen by between 12 percent and 15 percent in the past two years. It appears that competition from hostels is taking business away from hotels, as the new hostels may offer only slightly less convenience for temptingly lower prices. J.I.D.

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Guests in five-star hotels in July

The cost of restaurant meals rose by 6.8 percent from a year earlier

he United States Federal Reserve’s unexpected decision to maintain the momentum of its bond buying could keep inflation in Macau from slowing further, an economist says. Official data released yesterday show the average annual rate of consumer price inflation in the 12 months ended August was 5.39 percent, the slowest for almost two years. The vice-president of the Macau Association of Economic Sciences, Jack Chang Chak Io, said the easing was due mainly to slower economic growth here and in the mainland, which is Macau’s largest trading partner. But Mr Chang added: “There will be support in the future for consumer prices here because the US has yet to abandon its policy of printing money.” He told Business Daily: “Even though the latest round of US quantitative easing does not stimulate consumer prices here to a huge extent, its persistence will keep inflation here at a certain level for some time.” The Federal Reserve decided on Monday to keep buying US$85 billion (680 billion patacas) worth of bonds each month, against the expectations

of the market. Fed chairman Ben Bernanke said the US central bank needed more evidence of lasting improvement in the US economy before it reduced its bond buying, and that any increase in interest rates would threaten economic expansion. The annual rate of consumer price inflation in Macau fell to 5.31 percent last month from a five-month peak of 5.38 percent in July. The Statistics and Census Service said the higher cost of eating out, more expensive outbound package tours, and rising rents for housing were the main drivers of inflation.

Tenants leave, rents ease The annual rate of housing rent inflation was over 15 percent, but rented housing makes up only 3 percent of the basket of goods and services used to gauge inflation because most households own their homes. Housing costs including mortgage repayments and interest rose by 14.3 percent. Housing costs are the second-biggest outlay for households. Mr Chang expects housing rent inflation to ease as more households

move into new public housing. “Although occupancy of new subsidised housing like that on Taipa is still quite low, many households are still fitting out their homes,” he said. “So once they have started moving in, rents will moderate.” The government says that at the end of June only 16.3 percent of the 2,540 flats in the TN27 development on Taipa and only 2.4 percent of the 1,163 flats in Seac Pai Van were occupied. The cost of meals in restaurants, which make up over one-fifth of the basket of goods and services, rose by 6.8 percent. Prices of food and non-alcoholic drinks, the biggest outlay for households, rose by 6.09 percent, the slowest rate for 10 months. With the summer holidays in full swing, prices of outbound package tours rose by 23.5 percent. The price of liquefied petroleum gas, used for cooking and heating water, rose by 17.3 percent. The cost of electricity fell by 18.4 percent because the government increased its power subsidy last October to 200 patacas per month from 180 patacas. With Bloomberg News

September 20, 2013

Macau

Jockey Club takings of online bets surge But the loss-making racecourse’s revenue overall continues to shrink Tony Lai tony.lai@macaubusinessdaily.com

nline betting has become more important for the loss-making Macau Jockey Club, the club’s revenue from online bets having surged by nearly half last season. Data on the club’s website show revenue from online betting reached 154.9 million patacas (US$19.4 million) in the 2012-13 racing season, which ended last month. Online betting accounted for 10.1 percent of betting revenue overall, having accounted for 6 percent the season before. The proportion may increase in the new season as the club means to concentrate more on taking bets over the phone and online. “Our club always has plans to diversify our business development, and in future we will continue to develop these services,” the club told Business Daily last month. The club is part of Stanley Ho Hung Sun’s gaming empire. The club’s total betting revenue was 1.54 billion patacas last season, 9.5 percent less than the season before. Revenue from telephone betting fell by 14.2 percent to 577 million patacas. Revenue from on-course

MOP154.9 mln Online bets placed in 2012-2013 racing season

The cost of restaurant meals last month was 6.8 percent higher than a year earlier

betting fell by 14 percent to 645.7 million patacas. Club chief executive Thomas Li Chu Kwan blamed construction work on the Light Rapid Transit railway for reducing the number of spectators at race meetings. Revenue from bets placed at the club’s seven off-course betting centres fell by 7.1 percent to 162.1 million patacas. The club announced last month that it would close three of its offcourse betting centres immediately and another next month.

Corporate Conrad Macao goes pink for Cancer Fund Conrad Macao, Cotai Central, is supporting a money raising campaign by Hong Kong Cancer Fund. Pink Revolution is an annual campaign that raises awareness about breast cancer and collects funds for work to combat it. Conrad Macao has pledged to donate a portion of its sales proceeds to the fund, including 100 percent of the profits from its souvenir teddy bears and rubber ducks sold at the property. The hotel’s own ‘Plush for PINK’ campaign running until October 31, will also see the venue using pink for floral arrangements and decorations inside the hotel. ‘Pink Fridays’ will involve staff and management adding a pink item to their uniforms. Guests can also make a voluntary ten-pataca donation to the campaign when checking out. “We are proud to once again lend Conrad Macao’s support to the Pink Revolution…raising both awareness of breast cancer and funds to support the services offered by the Cancer Fund,” said the venue’s general manager Troy Hickox.

Seoul, UMAC sign tourism education deal The Seoul Tourism Organization – primarily funded by the Seoul Metropolitan Government in South Korea – has signed a cooperation agreement with the University of Macau for hospitality and business education exchanges. The deal was agreed during an educational event in Seoul for the hospitality and meetings, incentives, conferences, and exhibitions (MICE) industry. It was attended by 21 senior executives from those sectors that are currently working in Macau and in Seoul. “This programme is specially designed for senior executives in Asia’s hospitality and MICE industries,” said Jacky So Yuk Chow, Dean of Faculty of Business Administration at the University of Macau. “Our goal is to nurture these executives to become globally competitive and socially responsible leaders of both hospitality and business events, and Seoul sets high standards in these areas that we can all learn from,” he added. The new deal is the most recent of Seoul’s efforts to establish international exchange programmes for business events.

It said the closures were meant to “support the responsible gaming policy” of the government. A government ban on slot machine parlours in residential areas comes into force in November. The club made a loss of 57.7 million patacas last year, having made a loss of 17.8 million patacas in 2011. It has been in the red since 2004, accumulating losses of 3.78 billion patacas. The club has an exclusive horseracing concession until

August 2015. The club and the Macau Gaming Equipment Manufacturers Association signed on Wednesday a two-year cooperation agreement. The chairman of the association, Jay Chun, told Business Daily that it would sponsor the club’s race meeting on November 15. In return, the club will sponsor the association’s gaming equipment show on November 14 to 16. “We maintain a very good relationship and we will explore more cooperation opportunities in the coming two years,” Mr Chun said. He did not elaborate.

September 20, 2013 April 19, 2013

Macau Brought to you by

Financial Monitor death in disguise The figures for exports of goods in July suggest that exports will keep contracting this year. In the first seven months total exports were worth just over half of their value last year. But domestic exports were worth under 24 percent of their value last year. It would take a huge leap in domestic exports in the remaining months of the year to bring the final figure to anything close to last year’s value. Re-exports in the first seven months of this year were worth 70 percent of their value last year, and the rise in reexports may moderate any fall in total exports. Since 2008 re-exports have always either contracted more slowly or risen faster than domestic export.

Young swoop in for interest-free loans Entrepreneurs see themselves in the retailing, wholesaling, event planning, entertainment and childcare businesses Vítor Quintã

vitorquinta@macaubusinessdaily.com

Astana, venue for EXPO-2017

ver 60 people have applied for interest-free loans since the government began offering them to young entrepreneurs to start businesses, Macau Economic Services says. The government bureau said yesterday that it had decided on 32 of the 63 applications it had received between August 1, when it began taking them, and last Tuesday. It said it had granted loans totalling 5.52 million patacas (US$691,100) to 25 applicants. Most applicants intend to open their first businesses in wholesaling, retailing, event planning and organisation, entertainment or childcare. The loan scheme is open to Macau residents between 21 and 35 years of age. Macau Economic Services said the average age of the successful applicants so far was 28. A committee of seven chaired by the bureau’s deputy director, Tai

Kin Ip, decides on the applications. Macau Economic Services director Sou Tim Peng said earlier this year that the committee would take about two to three weeks to decide on each application. The bureau said in a written statement that the committee had rejected seven applications because the applicants did not fit its definition of young people setting out to create their first businesses. The rules say an applicant must be seeking to start a company, or must be running an enterprise that has been operating for less than two years. A holder of the majority stake in any Macau company is ineligible. Borrowers can take out loans of up to 300,000 patacas. They can take out several loans as long as they do not all add up to more than 600,000 patacas. The loans will last for up to eight years, but borrowers must begin repaying them after a year and a half.

The big shock came in the depths of the financial crisis. From 2008 to 2009 domestic exports fell by more than two-thirds and re-exports fell by more than one-quarter. The drop continued in 2010, albeit at a much slower rate. In 2011, things just stood still, the changes in each case being under 1 percent, and in the case of domestic exports being under 0.02 percent. Last year total exports gave an illusion of recovery, rising by 17 percent from the year before. But the rise was in essence the result of an increase of 28 percent in re-exports. Domestic exports fell by almost 5 percent. In the period under review 2008 was the exception to the rule that the annual value of re-exports exceeded that of domestic exports. In other words, the downfall of manufacturing here continues. The downfall would be more obvious if it were not partly hidden by the flow of re-exports. J.I.D. The content of this column is the work of Business Daily’s journalists.

Many young entrepreneurs intend to use their interest-free loans to open shops

Kazakh officials visit Macau Urge support for 2017 MICE event in Astana, plus tourism ties

delegation from the central Asian republic of Kazakhstan has been in Macau to drum up support for an international exhibition called EXPO-2017 to be held in the country’s capital Astana. Kazakhstan’s first deputy foreign minister, Rapil Zhoshybayev – who has responsibility for the exhibition – led the delegation. The officials were scheduled to meet Macau’s Chief Executive Fernando Chui Sai On said the country’s foreign ministry. “It is planned to discuss issues of expanding interaction in the sphere of tourism during the meeting,” said the ministry prior to the visit. “There will be several meetings with the heads of large companies of [the] Macau SAR in order to attract investments for EXPO-2017,” it added. The group also attended the Global Tourism Economy Forum held on Tuesday and Wednesday at the Macau Tower Convention and Entertainment Centre. The Kazakh party additionally visited Hong Kong for scheduled talks with Gregory So Kam Leung, the city’s Secretary for Commerce and Economic Development. Kazakhstan was the last of the former Soviet Union’s republics to declare independence in 1991. The current president, Nursultan Nazarbayev, has been leader of the country since 1990. The oil-rich state expects up to three million visitors to attend EXPO-2017 from June to September that year. The theme of the event is ‘Future Energy’. M.G.

September 20, 2013 April 19, 2013

Macau

Casino bounce hints China consumption plan working: Fitch Ratings agency says limited tables in face of big demand also aiding Macau gaming sector Michael Grimes

michael.grimes@macaubusinessdaily.com

he current growth of Macau gaming revenues and tourist numbers – despite mainland China’s economy slowing – suggests Beijing’s policy of expanding domestic consumption is working, suggests a note from Fitch Ratings in Hong Kong. “…Macau’s economy and credit profile have remained firm despite its heavy reliance on the gaming sector and high exposure to China country risk. This reflects a reasonably steady consumption picture in China as well as intrinsic industry strengths, which provides a buffer against any unexpected downturn,” says the ratings house. It adds that one of the “intrinsic industry strengths” for Macau’s casino business is that the supply of gaming product – particularly live dealer tables – is constrained by the Macau government relative to demand from Chinese tourists. The latter now make up around 60 percent of all visitors according to data from the city’s Statistics and Census Service.

Fitch suggests additional infrastructure improvement and the development of Hengqin Island should support mass-market growth in excess of VIP growth “for the foreseeable future”. According to unofficial data seen by Business Daily, in August, massmarket live table games made up 36 percent of all gaming revenue in Macau. They generated around 9.93 billion patacas (US$1.24 billion), out of the total 30.74 billion patacas that month. In August 2012, mass-market live games were only 26 percent of all revenue from casino games – a total of 6.69 billion patacas out of the approximately 26.14 billion patacas generated. Fitch says: “Macau’s numbers shed light on the broader issue of China’s economic health and rebalancing. Fitch believes that a fundamental aspect for China to successfully rebalance, without raising credit concerns, is for consumption growth to hold up. Macau’s numbers, although

reflecting only a small part of the story, nonetheless point to steady Chinese household consumption.”

Credit play Elsewhere, Wells Fargo & Co said in a note that Macau’s VIP gambling volumes might rise in the fourth quarter, correlating with a peaking of credit issuance in mainland China seen in April. “The massive [mainland] credit growth in the first half is yet to flow through Macau gaming given the lagged effect,” Cameron McKnight, a New York-based analyst at Wells Fargo, told Bloomberg News in an e-mail. “The more recent slowdown could have a knock-on effect some time in 2014,” he added. The half- to full-year delay between lending and gambling activity by Chinese visitors to Macau “reflects the time it takes for additional liquidity to flow through the economy and filter through to more discretionary activities like

Banking on more mass players

gaming, holidays and jewellery purchases,” Mr McKnight said. Macau’s high-stakes gambling volume should expand through year’s end, then slow in 2014 as China’s decelerating loan activity filters into the economy, added the bank.

September 20, 2013 April 19, 2013

Greater China

Chinese developers’ investment is expected to fall 11 percent in the next 12 months

Developers pull down shutters, hoard cash Worries over potential credit crush, govt crackdown on property bubble Umesh Desai and Yimou Lee

hina’s biggest property developers are sitting on US$25 billion in cash as they prepare for a possible credit crunch and another round of crackdowns on real estate speculation. Companies including Shimao Property Holdings Ltd and Greentown China Holdings Ltd raised more than US$16 billion in offshore bonds and loans over the first eight months of 2013 – about 36 percent more than in all of 2012. But they have turned more cautious about investing, leaving much of that money on their balance sheets. China’s property sector is a pillar of growth in the world’s second biggest economy, accounting for 15 percent of the gross domestic product in the first half of the year. China data released on Wednesday showed new home prices in August rose at the fastest pace in two-anda-half years strengthening the case for government cooling measures. Reuters has analysed data on 76 Chinese property developers that reported June-quarter results, and found that while their cash and short-term investments spiked, their capital spending plans were more conservative. Thomson Reuters data shows China’s real estate management and development companies’ total capital expenditures are expected to fall 11 percent in the next 12 months, a sharp contrast with property peers in the broader Asia-Pacific region where that spending is forecast to rise 6.6 percent. Developers had curtailed capital

spending as they expected the United States Federal Reserve to taper bond purchases drives up global interest rates. At the same time, Beijing’s renewed crackdown on the country’s bubble-prone property market threatens to curb demand, while some cash-starved smaller developers could go bust, flooding the market with cheap property. “Our financial situation is quite healthy, but we do have concerns for a credit crunch in the industry. The concern does exist for us. We solved our problems already and we are at a very stable situation, but other companies’ problems will indirectly affect us - it’s all interconnected,” said Greentown China Holdings chief financial officer Simon Fung Ching. “That’s why we don’t have a very aggressive plan for our sales target for the year.” China has been trying for years to cool property prices, most recently by barring some people in Zhengzhou, the capital of central Henan province, from buying second homes. Analysts expect similar rules in other cities too.

Selective lending Evergrande and Greentown, two of China’s largest developers, both reported jumps of more than 50 percent in cash and cash equivalents in the first six months of the year, helped by strong sales and easy global credit markets. Greentown said it had raised US$1.1 billion via offshore bond issues this year.

“We expanded our funding channels to overseas markets so that we won’t be impacted by the domestic conditions as bad as before,” said Greentown’s Mr Fung. With land prices hitting record highs and authorities renewing their push to rein in house prices, the developers’ cash hoards may well prove crucial in a sector where margins are coming under pressure. The sector’s EBITDA margins, a measure of profitability, are the lowest in six quarters as of the June period. In the current year they are expected to rise only marginally to 21.5 percent from 20.7 percent in 2012, according to Thomson Reuters data. In 2011, the average EBITDA margin for the sector was 22.6 percent. “Developers are looking to be more flexible and liquid as a result of capital market, sector and local credit policy uncertainties. Banks will still be accommodative towards the big players, but at least developers recognise the importance of having buffers,” said Raghav Bhandari, an analyst with CreditSights, an independent research firm. Tse Wai Wah, chief financial officer at Evergrande, said the company’s land acquisitions would slow the rest of the year, and predicted that smaller developers would feel the brunt of tightening credit conditions. “Liquidity has been tight since June,” he said. “Banks still need to do business and will lend but they will do so selectively. The impact [of tight credit] will be for smallscale developers.”

Those smaller developers do not have the same access to overseas credit markets, leaving them reliant on less generous onshore funding. A curb on riskier alternative forms of finance and a credit squeeze in the interbank market have kept funds relatively tight after a shadow bank lending spree that peaked in March.

Cash balances rise China’s short-term interest rates shot to as high as 30 percent in late June after the central bank refused to increase the money supply, a decision widely seen as a warning to banks to clamp down on risky lending practices. Shimao Property Holdings Ltd highlighted in its earnings presentation in August the importance of speeding up turnover and said it would take steps to “actively deal with credit crunch” including extending the maturity profile of its debt, reducing interest costs and maintaining a higher cash balance. Cash balances at companies such as Agile Property Holdings Ltd, Evergrande and Country Garden Holdings Co Ltd are up 30 to 88 percent over the past six months, according to Thomson Reuters data. Cash-starved smaller developers are proving tempting targets for some of these cash-rich larger players. According to Thomson Reuters data, some US$14.9 billion in mergers and acquisitions have been announced this year, already topping 2012’s entire tally of US$14.7 billion. Reuters

September 20, 2013 April 19, 2013

Greater China Shanghai won’t threaten HK: CPPCC The establishment of a free trade zone in Shanghai will not threaten Hong Kong, Yu Zhengsheng, chairman of the Chinese People’s Political Consultative Conference (centre), said in a meeting in Beijing Wednesday, according to Wen Wei Po. Hong Kong needs to raise its own competitiveness to maintain long-term prosperity and stability, the report said, citing Mr Yu, who spoke to a visiting delegation from Hong Kong. Shanghai’s free trade zone is a reform testing ground, and not a zone for preferential policies, said Lu Wenduan, vice president of Hong Kong General Chamber of Commerce.

Apple drops China’s iPhone delay As company tries to compete with Samsung and cheaper local handset markets

pple Inc used to make its China fans wait three months to get the latest iPhone. Now the company can’t afford to leave them behind. For the first time, Apple will release its newest handsets in China on the same day as the United States, Europe and Japan. The iPhone 5s and lower-cost 5c go on sale today in Apple’s 11 stores in China and Hong Kong as the company tries to boost sagging market share in the world’s most populous nation. Apple chief executive officer Tim Cook, looking to reignite growth after a year of not releasing any new products, is counting on iPhone customers in China to give it a fresh boost. That goal will be challenged by a diminishing technology edge versus Samsung Electronics Co, a slew of more affordable devices from local handset makers and the lack of a distribution agreement with China Mobile Ltd, the biggest carrier. “The iPhone is too expensive for me, I could never afford it,” said Li Guang, 25, a department-store clerk in Beijing. “If I were buying a smartphone for myself, I would never spend more than 3,000 yuan.” The lowest-priced iPhone 5c, with a plastic shell coming in five colors, will sell for 4,488 yuan (US$733), almost equivalent to

two months’ pay for a typical urban worker, based on figures from the National Bureau of Statistics. Ms Li, who uses a second-hand iPhone 4S passed down by a friend, has no plans to upgrade to the 5c or 5s, she said while taking a smoking break from luggage shopping at Beijing’s 77th Street Plaza.

Throwing eggs That sentiment concerns investors in the Cupertino, California-based company, which saw its market share in China cut by almost half in the second quarter, dropping it to seventh place. Apple’s stock fell 8 percent in the first five trading days after the prices of the new iPhones were disclosed. The weaker interest from consumers like Ms Li is a sharp turn from January 2012, when angry buyers threw eggs at Apple’s store in Beijing’s Sanlitun district after it failed to open on time for the first day of iPhone 4S sales. That handset was released in China three months behind the start of United States sales in October 2011. The iPhone 5 came to China in December 2012, three months after its September 2012 release in the United States. Mr Cook visited China at least twice this year and said the country will overtake the United States as

The iPhone 5s and lower-cost 5c go on sale today in China and Hong Kong

its largest market. While sales in the country fell 14 percent to US$4.6 billion last quarter, China is now Apple’s third-largest region by sales, after the Americas and Europe.

Fast growth A few years ago, sales in the country totaled only “hundreds of millions” of dollars a year, Mr Cook said in July. Kitty Potter, a Beijing-based spokeswoman for Apple, declined to comment on demand for the new iPhone models. A challenge for Apple is that 80 percent of smartphone shipments in China in the second quarter were priced below US$400, said Jessica Kwee, a Singapore-based analyst with researcher Canalys. Apple trails Samsung and domestic vendors Lenovo Group Ltd, China Wireless Technologies Ltd’s Coolpad, ZTE Corp, Huawei Technologies Co and Xiaomi Corp. Xiaomi’s newest handset costs 1,999 yuan, and Lenovo’s flagship K900 IdeaPhone sells for 3,299 yuan. “The new devices are not likely to widen the iPhone’s mass appeal” in China, Ms Kwee said. “The unsubsidised price of the new devices is too high for mass adoption.” Apple still has a big opportunity by appealing to more wealthy customers in China, said Carl Howe, an analyst

at Yankee Group in Boston. Many Chinese consumers view the iPhone like owning a luxury car and will pay the premium, he said.

Wealthy customers “A lot of us in the West underestimate just how big the affluent Chinese market is,” Mr Howe said. “Even though China has a lower percentage of wealthy individuals than here in the West, the absolute number of affluent Chinese who can afford an iPhone is still higher than a country like the United States.” Subsidies from Apple’s two carrier partners in China, China Unicom (Hong Kong) Ltd and China Telecom Corp, can help make the devices more affordable, and on some plans even provide free handsets. Even so, Apple is not getting the same support from Chinese carriers that it enjoys in the United States, where companies like AT&T Inc and Verizon Wireless offer the iPhone 5c for as little as US$99 to entice customers to sign up for a two-year contract. That backing has helped make the iPhone the top-selling smartphone in the United States, according to ComScore Inc. In China, wireless carriers are looking to rein in costs from adding new users. Bloomberg News

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September 20, 2013 April 19, 2013

Greater China

More shipyards orders conceal concentration Beijing using lenders to revamp overcapacity-plagued shipbuilding Keith Wallis

hina’s troubled shipbuilding sector has returned to the top of the global league this year, ahead of South Korea and Japan, but the headline numbers hide a concentration of orders at a few big yards that could offer a blueprint for the industry’s future. While Chinese shipbuilders have won more business so far this year than in the whole of 2012, just 4 percent of the country’s more than 1,600 yards have scored new contracts. Most had the backing of two shipping “policy banks”, which are responsible for state-directed spending and trade development, leading to a suspicion that Beijing is using the lenders as a tool to force consolidation in the bloated sector. “We believe that the major yards that have won orders this year will be the ones left in five or 10 years and that they represent the future shape of China’s shipbuilding industry,” said Gunnar Gerig, executive director of transaction advisory services at Ernst & Young in Hamburg, Germany. The global shipping industry is emerging from a five-year downturn, the worst in 30 years, as cargo demand rises on the improving global economy and low asset prices lures private equity money into the sector. At the same time, Chinese policymakers are cracking down on overcapacity-plagued heavy industries such as shipbuilding and steelmaking, as they seek to shift the country away from its old investmentdriven economic growth model. Figures compiled by Reuters and shipbrokers show around 60

There were around 1,650 shipyards in mainland China

state-owned and private shipyards won about US$10.5 billion worth of contracts from foreign and domestic shipowners for vessels totalling 21.2 million dead-weight tonnage in the first half of this year. Among the winners were shipyards in Shanghai, Guangzhou and Chengxi controlled by China State Shipbuilding Corporation and private builders such as Yangzijiang Shipbuilding (Holdings) Ltd and Zhejiang Yangfan.

Reversing trend The volume of orders was “up significantly” versus 19.2 million

tonnes in full year 2012, said Stephen Gordon, managing director of Clarkson Research Services, a British shipbroking and shipping services company. Chinese yards won 39.5 per cent of global orders in the first half compared with 36.5 per cent for South Korea, reversing 2012’s trend. The order tally has continued since July with a raft of deals to China Ocean Shipping (Group) Company (COSCO) shipyards in Dalian, Zhoushan and Guangzhou and other facilities including Shanghai Waigaoqiao Shipbuilding. But the latest deals have gone only to yards that had already won orders this year.

Robust demand for Huishan’s HK listing Fox Hu

hina Huishan Dairy Holdings Co, the milk producer backed by billionaire Cheng Yu Tung (pictured), and shareholders raised US$1.3 billion in an initial public offering (IPO) in Hong Kong, said two people with knowledge of the matter. Huishan Dairy and investors sold 3.8 billion shares at HK$2.67 apiece, the top end of a marketed range, said the people, who asked not to be identified because the information is private. The shares were originally offered at HK$2.28 to HK$2.67 each, according to an IPO prospectus. Huishan Dairy, based in Shenyang city in northeast China, was the first Hong Kong IPO of at least US$1 billion to raise the maximum sought since July 2011, data compiled by Bloomberg show. The benchmark Hang Seng Index jumped as much as 1.8 percent

yesterday to a seven-month high after the Federal Reserve refrained from cutting stimulus. The company completed the biggest Hong Kong IPO since May, when Sinopec Engineering Group Co raised US$1.8 billion, according to data compiled by Bloomberg. The share sale values Huishan Dairy at 17 times estimated 2014 earnings, the people said. The company will start trading on September 27, the prospectus shows. China Modern Dairy Holdings Ltd, the country’s biggest rawmilk producer, trades at 17.4 times estimated 2014 profit, data compiled by Bloomberg show. The company, which raised US$447 million through a Hong Kong IPO in November 2010, has fallen 5.5 percent from its offer price, the data show. Bloomberg News

That means that while stateowned and better quality private shipyards now have enough construction orders to keep busy into 2015 or 2016, the future looks grim for the rest, many of whom have already run out of work. Sverre Bjorn Svenning, director of Fearnley Consultants, an offshoot of Norwegian shipbroker Fearnleys, said the firm has tracked 128 shipyards established during the 2003-2008 boom. Of those, 57 have not delivered a ship since 2011 and another 18 have delivered three ships or fewer. “In my view, all the 75 yards have in practice ceased operations,” Mr Svenning said. The China Association for National Shipbuilding estimated there were around 1,650 shipyards in China. Between a third and 50 per cent of them are set to collapse in the next few years according to the lobby group and other sources. “There are only about 8090 Chinese yards that we would recommend to our clients presently,” said Martin Rowe, managing director of shipbroking firm Clarkson Asia, based in Hong Kong. The Export-Import Bank of China (Cexim) and the China Development Bank are the country’s two policy banks focused on the shipping industry. A Cexim senior executive told Reuters that around two-thirds of the shipyards that won orders this year were supported with a mix of financial instruments that benefited individual shipyards or ship owners. Reuters

11 11

September 20, 2013 April 19, 2013

Asia

Abe ally to submit casino bill with Wynn, MGM on watch Pro-gaming group of lawmakers aims to pass new law next year

apan legislators plan to present a bill to legalise casinos as early as this year as companies including Wynn Resorts Ltd mull billions of dollars in investment in what could be the world’s secondbiggest gaming market. Hiroyuki Hosoda, the chairman of a cross-party group of lawmakers promoting casino development in Japan, said Wednesday that the group aims to submit a casino bill to the next diet session that is expected to start next month. It aims to pass the bill next year in the following session of parliament, he said. Wynn Resorts said on Wednesday it will consider investing more than US$4 billion in Japan casino resorts, while MGM Resorts International president Bill Hornbuckle said it would spend “several” billion dollars. Both companies have gaming operations in Macau. International casino companies have begun studying expansion opportunities in the country as Tokyo’s selection to host the 2020 Olympics Games boosts confidence that the law legalizing gambling resorts will pass. “Japan could benefit from both its proximity to China and their appetite for VIP and mass-market gaming and luxury shopping, and being a business center with huge convention possibilities,” said Tim Craighead, a Bloomberg Industries analyst. “All of it now relies on the legislation process and Japan pursuing the benefit of the integrated resort concept.”

Casinos are currently banned in Japan and Union Gaming Group estimates the country could turn into the world’s second-largest gambling hub with US$10 billion in revenue a year if it opens up. “A lot of Japanese gamble at casinos overseas, so the ban doesn’t make sense any more,” Mr Hosoda said. “It just means tax revenues go elsewhere.” It could take five years for the first casino to be operational after the law is passed, he said.

Olympics games Japan’s capital beat Madrid and Istanbul to host the Summer Games, its second following the 1964 Olympics. Plans to revitalise Tokyo’s infrastructure and ensure adequate accommodations for visitors add impetus for approving gambling resorts, which include hotels and entertainment facilities. Mr Hosoda is a senior official in the Liberal Democratic Party, appointed to his position by prime minister Shinzo Abe. Mr Abe is the supreme adviser to the cross-party lawmakers’ group that is working on the bill.

Local partners Wynn Resorts investment in a Japan casino “is going to be way bigger” than the US$4 billion it is spending on its current project in Macau’s Cotai, Wynn Resorts Development president and chief operating officer Gamal Aziz said in an interview.

Wynn and MGM said that they plan to partner with local consortium to develop casino projects. Las Vegas Sands is also “open minded” about having local partners, George Tanasijevich, managing director of global development for Las Vegas Sands, said Wednesday in an interview at a gambling conference in Tokyo. “We are very confident that this would be a successful project” as there is a lot of unmet demand, the executive said. The three companies, which are all interested in developing resorts in Tokyo and Osaka, did not say which Japanese group they might each consider. Among the potential local partners are trading companies such as Mitsui & Co, Mitsubishi Corp and Itochu Corp and gaming machine makers Sega Sammy Holdings Inc and Konami Corp. The trading companies have project-finance experience and real estate development connections, while the game makers have helped develop casino projects and technology outside of Japan. The specific details about sites and operators will probably come after legalisation. That would set the stage for gambling resorts to open by 2019 or 2020, CLSA said in a report earlier this year. Tokyo’s potential as a gambling market is also drawing the interest of Caesars Entertainment Corp, SJM Holdings Ltd, the Macau-based Asia’s biggest casino firm, and Melco Crown Entertainment Ltd, the operator of City of Dreams. Bloomberg News

Japan exports rise most since 2010 J

apan’s exports rose the most since 2010 in August, boosting prime minister Shinzo Abe’s growth drive even as rising energy costs extended the streak of trade deficits to the longest since 1980. Exports rose 14.7 percent from a year earlier, the sixth straight increase, the Ministry of Finance said in Tokyo today. Imports climbed 16 percent, leaving an unadjusted trade shortfall of 960.3 billion yen (US$9.8 billion). The yen’s 12 percent slide against the dollar this year and a pick-up in overseas markets has supported export growth, boosting profits of manufacturers including Panasonic Corp. The halting this week of Japan’s last operating nuclear reactor leaves the nation more vulnerable to swings in crude oil prices, which have soared around 18 percent this year. “We are finally seeing a clear recovery in exports, led by a weak yen and a moderate global recovery,” said Takeshi Minami, chief economist at Norinchukin Research Institute Co in Tokyo. “My biggest concern is the planned sales-tax increase next year. A recovery in exports will help cushion the impact but a higher levy could still be a big drag on the economy, while risks remain in Europe and emerging markets.” The rise in exports was bigger than a 12.2 percent gain in July. The median forecast in a Bloomberg News survey of 23 economists was for a 14.5 percent increase in August. Bloomberg News

The only gambling allowed in Japan is pachinko, a mix of slot machine and pinball game

12 12

September 20, 2013 April 19, 2013

Asia Singapore arrests over match-fixing Singapore police arrested 12 men and two women suspected of being part of a criminal gang involved in fixing sports events. Officers raided several locations in Singapore on Tuesday, the city’s police and anti-corruption agency said in a statement. Police said the suspected gang leader was detained as well as people being investigated in other countries in relation to match-fixing. The 14 people in Singapore are being investigated for corruption offenses related to match-fixing and their involvement in organized crime activities, according to the statement.

India backs up insurance for Iranian crude refiners Move aimed at boosting oil imports from Iran Rajesh Kumar Singh and Manoj Kumar

ndia will provide a 10 billion rupee (US$158 million) sovereign guarantee to back local insurance for refineries using Iranian oil, two government sources said, as it tries to boost imports paid for in local currency to ease pressure on the rupee. India’s crude imports from Iran slumped 75 percent in July from June to just 35,500 barrels per day (bpd) because of problems over insurance for crude from Iran caused by western sanctions which aim to curb its nuclear ambitions. But with oil imports in dollars swelling India’s current account deficit to a record in 2012/13, the government is trying to maximise purchases from Iran, which is now accepting rupees as its hard currency options are curtailed. The rupee sank to a record low

against the dollar last month and is now languishing around 63 to the dollar, swelling the import bill, pushing up inflation and straining public finances. “It was finalised yesterday in a meeting with the petroleum secretary. An energy pool will be set up with a sovereign guarantee,” one of the sources, both of whom have direct knowledge of the matter, said. India had originally been considering a sovereign guarantee of 20 billion rupees to back the local insurance. It was not immediately clear why the government had decided to halve the amount or whether it would be sufficient for insurers. The maximum claim that has arisen so far in the Indian refining sector is 5 billion rupees. “The issue has been resolved. GIC

[local reinsurer General Insurance Corp] will manage the pool. In case there is any mishap or something, then they will pay,” the second source said. The sources said apart from the 10 billion rupees sovereign backing, GIC and oil companies will provide 5 billion rupees each to the pool.

More imports? The government is taking a range of measures to cut its import bill including raising duty on gold shipments to a record 10 percent and making airline passengers pay duty on imports of flat-screen televisions, but oil is still about 34 percent of the total import bill. India’s oil minister Veerappa Moily is targeting raising imports

from Iran to around 260,000 bpd, aiming to save about US$8.5 billion from the oil bill which totalled US$144 billion last year. In total, Mr Moily wants to save US$22 billion this year. That level of imports from Iran would be only about 6,000 bpd lower than the average for fiscal 2012/2013 and would virtually wipe out cuts by India that won it a waiver from Washington’s sanctions. “We pay Iran in rupees, so the more we import from Iran the better it is,” the first source said. India, together with Iran’s other major clients China, Japan and South Korea, had won a waiver from United States sanctions after cutting back on its imports, which fell 46 percent in the first seven months of the year to about 185,700 bpd. Indian refiner Mangalore Refinery and Petrochemicals Ltd resumed imports from Iran in August after it secured local reinsurance for claims up to 5 billion rupees. MRPL, once Iran’s biggest Indian client, halted imports in April due to lack of insurance cover.

35,500

India’s daily crude imports from Iran in July

The sovereign guarantee “will essentially provide comfort to the insurance companies to the extent that they will provide cover without going to reinsurers abroad,” MRPL’s managing director P.P. Upadhya told Reuters. “There will be no change in our strategy to buy Iranian oil,” he added. India had been depending on European markets to hedge its risk but European reinsurers have added a clause in contracts with Indian firms that meant claims arising during processing of Iranian oil would not be met, because of sanctions. With the start of this re-insurance cover local insurers will delete the sanctions clause from the existing annual policy of Indian refiners processing Iranian oil, two oil industry sources told Reuters. Iran is now accepting Indian rupees as payment for crude shipments

Reuters

editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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September 20, 2013 April 19, 2013

Asia

Goldman Sachs is the fifth-largest United States bank by assets

Goldman Sachs said to start Asian fund Asian regional hedge-fund assets are the highest since 2007 Bei Hu

oldman Sachs Investment Partners, set up to allow clients to invest with some of the bank’s top proprietary traders, is raising capital for a new Asian fund, said two people with knowledge of the matter. The fund, named Oryza Capital, started early this month, said the people, who asked not to be identified because the information is private. It is overseen by a team led by Hideki Kinuhata in Tokyo and Hong Kong-based Ryan Thall, said the people, who did not disclose how much money the fund is seeking to gather. Asia’s economic growth that has outperformed the United States and Europe, and renewed interest in Japan, where prime minister Shinzo Abe has committed to ending deflation, are attracting global investors. Inflows into Asia-focused funds took regional hedge-fund assets to US$98.4 billion as of the end of June, the highest since 2007, according to Chicago-based data provider Hedge Fund Research Inc. “Asia is still one of the fastestgrowing regions in the world, albeit at a slower pace, so it’s no surprise that there is continued interest in notable Asian launches,” Will Tan, a managing director who focuses on the hedge-fund industry at Singaporebased recruiting firm Principle Partners Pte, said. “The past year especially has seen renewed global interest in Japan resulting in a surge in hiring for Japan-focused investment professionals.”

Attracting funds As co-heads of Asia investments at Goldman Sachs Investment Partners, known as GSIP, Mr Kinuhata and Mr Thall managed more than US$1

billion of regional holdings for the global fund, said the people. They have generated annualised returns in the low teens, about fourfold that of the global fund since its 2008 inception, they added. Asian stocks and Japan-focused funds drew US$3.9 billion of new capital in the second quarter, more than the US$3 billion net inflows to the regional hedge-fund industry, HFR said. Mr Thall plans to discuss an Asia-focused opportunistic equity long/short fund with potential investors at a Morgan Stanley hedge-fund forum in Hong Kong in October, according to a document seen by Bloomberg News. The new fund invests in Asia including Australia and Japan, one of the people added. The Nikkei 225 Stock Average has gained 64 percent in the past year.

‘Intellectual power’ “More and more intellectual power and international capital are being focused on Japan,” Peter Douglas, principal of Singaporebased GFIA Pte, said. “Five years ago you wouldn’t have had one leg of this proposition based in Tokyo.” The fund is consistent with banks’ attempts in recent years to turn former proprietary trading units into fee-generating revenue sources, Mr Douglas said. Goldman Sachs, the fifth-largest United States bank by assets, as recently as 2009 generated about 10 percent of revenue from proprietary trading. Goldman Sachs Investment Partners, also known as GSIP, started investing in early 2008 with traders from the principal strategies group as the New York-based bank moved to comply with a provision of the Dodd-

Frank financial-overhaul act that curbs banks’ ability to risk capital by betting for their own accounts.

Global fund GSIP began with about US$7 billion, the biggest hedge-fund startup, and was initially funded with some of Goldman Sachs’s own money, according to fund marketing documents seen by Bloomberg News in 2010. The business now forms part of Goldman Sachs Asset Management, the division that supervises investments for clients. “Investor interest in managers with backing from institutions with size and solid operations remains

Indonesia top gasoline importer by 2018 I

ndonesia, and not the United States, will be the largest influence on global gasoline trade by 2018 as it emerges as the world’s top importer of the motor fuel and reverses the current east-to-west trade flows, said Wood Mackenzie yesterday. The consulting firm said in a statement that Indonesia’s gasoline deficit – driven by income growth,

quite high in Asia,” said Toshikazu Yamazaki, the senior fund manager at SRF Group Pte in Singapore, which started an Asia-focused fund- ofhedge-funds in December. “Managers who can generate alpha seem to be on the rise now,” he said, referring to returns in excess of those of the benchmarks. Mr Kinuhata and Mr Thall will continue to run money for the global fund, in addition to the new Asian pool, one of the people said. Mr Thall, who was previously based in Tokyo, was one of 70 Goldman Sachs employees promoted to partner from the beginning of this year, a designation that gives them a bigger share of a bonus pool. Bloomberg News

increased car ownership and government subsidies – would grow to about 420,000 barrels per day (bpd) in 2018, from 340,000 in 2012. United States and Mexico on the other hand will see their combined gasoline deficits fall to 60,000 bpd from 560,000 bpd over the same time frame. In following years, they will see gasoline surpluses, Woodmac said. “Indonesia is already the largest deficit market in the world as an individual country but it is not yet influencing inter-regional trade flows or prices as it still has a smaller deficit compared to the combined US and Mexico markets,” said Sushant Gupta, head of downstream research at Woodmac, in the release. Indonesia currently gets most of its oil product imports from the Asia Pacific region, with Singapore the key supplier. But by 2018, Asia Pacific will see a gasoline deficit of 118,000 bpd. Reuters

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September 20, 2013 April 19, 2013

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

55.6 55.4

82.1

24.5

81.4

24.4

80.7

24.3

55.2 55.0

Max 55.6

average 55.052

Min 54.8

Last 55.15

54.8

Max 82.1

average 81.672

Min 80.05

80.0

Last 81.05

Last 48.7

20.95

25.9

20.90

25.8

20.85

25.7

48.4

Max 21

average 20.885

DAY %

YTD %

PRICE 108.59

0.481169612

16.01495726

112.2399979

86.04000092

BRENT CRUDE FUTR Nov13

110.8

0.180831826

5.283162296

115.7599945

96.19999695

GASOLINE RBOB FUT Oct13

274.64

0.156814121

5.553633883

298.210001

246.6799974

GAS OIL FUT (ICE) Nov13

936.75

1.544715447

3.622787611

980.25

837

3.734

0.565580393

2.865013774

4.525000095

3.154000044

304.77

0.236803157

1.899093918

322.8999853

276.1999846

Gold Spot $/Oz

1366.21

5.0599

-17.9187

1796.08

1180.57

Silver Spot $/Oz

22.9755

6.831

-23.6948

35.365

18.2208

Platinum Spot $/Oz

1473.6

3.8954

-2.9089

1742.8

1294.18

Palladium Spot $/Oz

WTI CRUDE FUTURE Oct13

NATURAL GAS FUTR Oct13 NY Harb ULSD Fut Oct13

(H) 52W

716.88

2.6975

2.4612

786.5

587.4

1785

0.421940928

-13.89290883

2185.25

1758

LME COPPER 3MO ($)

7184

1.540636042

-9.418736603

8422

6602 1811.75

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Nov13 CORN FUTURE

Last 20.85

(L) 52W

LME ALUMINUM 3MO ($)

LME ZINC

Min 20.8

1870

0.510615426

-10.09615385

2230

13930

0.723065799

-18.34701055

18920

13205

15.65

0.256245996

1.524489134

16.65000153

14.77000046

460

0.821917808

-23.30137557

647

445.75

WHEAT FUTURE(CBT) Dec13

654.5

1.237432328

-20.25586354

913

635.5

SOYBEAN FUTURE Nov13

1358.5

0.797625672

4.279408943

1409.5

1162.5

COFFEE 'C' FUTURE Dec13

116.1

1.044386423

-25.79098754

200

113.9499969

Dec13

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

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

Max 26

average 25.868

Min 25.65

Last 25.75

25.6

NAME

PRICE

SUGAR #11 (WORLD) Mar14

17.64

0.915331808

-14.28571429

22.14999962

16.69999886

ARISTOCRAT LEISU

85.69

0.175356558

8.826517653

93.72000122

74.34999847

CROWN LTD

World Stock Markets - Indices

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

0.9509 1.6092 0.9093 1.3564 98.81 7.9865 7.7542 6.1212 61.7288 30.948 1.2444 29.531 43.055 10875 93.947 1.23345 0.84296 8.2934 10.8358 134.02 1.03

1.6679 0.7892 1.9136 1.5878 0.1316 0 -0.0039 -0.0033 2.683 2.3103 1.1572 0.5824 1.1032 4.1287 -1.503 0.3121 -0.7924 -1.418 -1.5966 -1.4326 0

-8.3735 -0.5193 0.6708 2.8355 -12.8631 -0.0413 -0.0464 1.7872 -10.9087 -1.1891 -1.8483 -1.6864 -4.7614 -9.9494 -4.9177 -2.1055 -3.2671 -0.9152 -2.8184 -15.2589 -0.0097

1.0599 1.6381 0.9839 1.3711 103.74 8.0111 7.7664 6.3112 68.845 32.48 1.2862 30.228 44.82 11730 105.433 1.265 0.88151 8.4957 10.9254 134.22 1.032

0.8848 1.4814 0.9022 1.2662 77.44 7.9818 7.7498 6.1064 51.3863 28.56 1.2152 28.913 40.54 9523 79.408 1.20302 0.79235 7.8281 10.1113 99.64 1.0289

Macau Related Stocks

COTTON NO.2 FUTR Dec13

NAME

20.80

Currency Exchange Rates

NAME

METALS

24.2

48.8

Commodities ENERGY

Last 24.3

26.0

48.5 Min 48.45

Min 24.25

21.00

48.6

average 48.639

average 23.372

48.9

48.7

Max 48.85

Max 24.45

DAY %

YTD %

(H) 52W

(L) 52W

VOLUME CRNCY

4.49

-1.101322

42.53968

4.7

2.56

3608469

15.77

0.7667732

47.79756

16.08

8.92

2286250

AMAX HOLDINGS LT

1.29

-4.444444

-7.857141

1.72

0.75

4633775

BOC HONG KONG HO

25.2

1.408451

4.564314

22.85

15235508

CENTURY LEGEND

0.41

-1.204819

54.71699

0.56

0.23

4968000

CHEUK NANG HLDGS

6.52

1.399689

8.848084

6.74

3.52

304000

24.05

1.05042

4.112552

25.6

17.7

15951841

CHINESE ESTATES

17.9

2.052452

59.1741

18.12

8.168

145666

CHOW TAI FOOK JE

11.16

3.525046

-10.28939

13.4

7.44

15624400

EMPEROR ENTERTAI

3.48

2.052786

84.12699

3.55

1.43

3600000

FUTURE BRIGHT

2.47

-4.263566

103.791

2.76

1.053

2838000

GALAXY ENTERTAIN

55.15

2.795899

81.71334

24.1

13340677

HANG SENG BK

1602206

CHINA OVERSEAS

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

15676.94

0.9479238

19.6335

15709.58

12471.49

NASDAQ COMPOSITE INDEX

3783.641

1.012948

25.30631

3790.704

2810.8

FTSE 100 INDEX

6649.47

1.382108

12.74473

6875.62

5605.589844

127.6

0.3144654

7.497897

132.8

110.6

DAX INDEX

8740.27

1.206685

14.81636

8770.1

6950.53

HOPEWELL HLDGS

26.7

4.500978

-19.69925

35.3

23.2

3660600

NIKKEI 225

14766.18

1.798094

42.04834

15942.6

8488.14

HSBC HLDGS PLC

87.95

2.030162

8.179578

90.7

72.1

27063635

HANG SENG INDEX

23502.51

1.665668

3.732148

23944.74

19426.35938

CSI 300 INDEX

2432.51

0.2137335

-3.584765

2791.303

2023.171

TAIWAN TAIEX INDEX

8209.18

-0.4921343

6.619647

8439.15

7050.05

KOSPI INDEX

2005.58

-0.3869135

0.4271253

2042.48

S&P/ASX 200 INDEX

5295.55

1.096

13.90851

4667.881

4.584704

FTSE Bursa Malaysia KLCI

1793.53

NZX ALL INDEX

PHILIPPINES ALL SHARE IX

JAKARTA COMPOSITE INDEX

HUTCHISON TELE H

3.44

-3.370785

4.66

2.98

11771000

LUK FOOK HLDGS I

25.7

6.860707

5.32787

30.05

16.88

6820803

MELCO INTL DEVEL

20.95

1.946472

132.5194

21.15

6.55

4850000

MGM CHINA HOLDIN

24.3

1.461378

83.00564

24.5

12.18

5471000

1770.53

MIDLAND HOLDINGS

3.23

2.539683

-12.7027

2.68

2498100

5300.1

4334.3

NEPTUNE GROUP

0.199

0.5050505

30.92106

0.23

0.131

90230000

8.135726

5251.296

3837.735

NEW WORLD DEV

12.5

4.340568

3.99334

15.12

9.98

35819805

1.249294

6.192018

1826.22

1590.67

SANDS CHINA LTD

48.7

2.418507

43.44624

48.9

26.35

11481983

SHUN HO RESOURCE

1.7

21.42857

1.92

1.19

78000

1003.417

0.989548

13.75927

1003.641

834.309

SHUN TAK HOLDING

4.24

-1.165501

1.193316

4.65

2.9

3954752

3924.67

2.382785

6.10141

4571.4

3440.12

SJM HOLDINGS LTD

20.85

2.205882

17.48029

22.382

15.795

8214356

10.4

4.104104

-26.13636

16.22

9.97

12231240 6805547

HSBC Dragon 300 Index Singapor

613.39

0.47

-1.24

STOCK EXCH OF THAI INDEX

1488.46

3.427765

6.934968

1649.77

1260.08

HO CHI MINH STOCK INDEX

476.09

0.3858643

15.07263

533.15

372.39

Laos Composite Index

1289.04

1.359544

6.113916

1455.82

1038.79

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

SMARTONE TELECOM WYNN MACAU LTD

25.75

1.980198

22.91169

26.5

ASIA ENTERTAINME

3.93

0.7692308

39.62496

4.7647

2.4835

64712

BALLY TECHNOLOGI

75.08

-0.7534699

67.92664

75.8

43.16

431960

BOC HONG KONG HO

3.17

-2.461538

3.257331

3.6

2.99

3389

GALAXY ENTERTAIN

-1.269394

76.32242

7.16

3.11

24690

INTL GAME TECH

20.87

0.04793864

47.28299

21.17

12.37

4283337

JONES LANG LASAL

89.21

0.8136513

6.278291

101.46

72.56

428869

LAS VEGAS SANDS

64.64

0.6070039

40.03466

64.7201

37.8353

5157887

MELCO CROWN-ADR

31.02

0.5510535

84.20427

31.95

12.5

2211116

MGM CHINA HOLDIN

3.04

73.68537

3.07

1.5895

6100

MGM RESORTS INTE

19.77

1.12532

69.84536

19.88

9.15

9604634

SHFL ENTERTAINME

22.57

-0.08853475

55.65517

23.08

12.35

404262

SJM HOLDINGS LTD

2.67

-0.7434944

17.22784

2.9481

2.0311

41280

153.028

1.504378

36.03698

153.47

103.0933

1110971

WYNN RESORTS LTD

AUD HKD

USD

Hang Seng Index NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AIA GROUP LTD

37.1

1.923077

46601236

CHINA UNICOM HON

12.84

1.102362

21679665

POWER ASSETS HOL

ALUMINUM CORP-H

2.78

0.3610108

17779750

CITIC PACIFIC

10.04

1.311806

10856480

SANDS CHINA LTD

BANK OF CHINA-H

3.65

1.388889

433255423

BANK OF COMMUN-H

5.98

1.355932

37497694

BANK EAST ASIA

32.65

1.872075

6226855

BELLE INTERNATIO

11.28

1.438849

23750674

25.2

1.408451

15235508

CATHAY PAC AIR

14.88

-0.1342282

3842301

CHEUNG KONG

BOC HONG KONG HO

NAME

PRICE

DAY %

0.5173688

VOLUME 4780945

48.7

2.418507

11481983

CLP HLDGS LTD

64.05

0.6284368

5038852

SINO LAND CO

11.86

8.608059

43265889

CNOOC LTD

16.08

0.6257822

61066127

SUN HUNG KAI PRO

108.7

5.024155

18826650

COSCO PAC LTD

11.98

3.275862

15399986

SWIRE PACIFIC-A

92.95

1.087548

2267782

ESPRIT HLDGS

12.2

1.328904

4352277

TENCENT HOLDINGS

410.2

1.93837

6517215

HANG LUNG PROPER

26.4

1.34357

7845948

TINGYI HLDG CO

21.1

-1.860465

7758246

HANG SENG BK

127.6

0.3144654

1602206

WANT WANT CHINA

11.84

1.196581

14614276

HENDERSON LAND D

70.4

4.451039

10814964

122.8

2.333333

10647911

49.65

4.197272

10368298

CHINA COAL ENE-H

5.08

2.21328

176513307

HENGAN INTL

89.7

-1.265823

2890291

CHINA CONST BA-H

6.21

1.636661

282187209

HONG KG CHINA GS

18.5

0.4343105

17235238

CHINA LIFE INS-H

21.2

1.678657

30438233

CHINA MERCHANT

28.4

6.168224

7114561

CHINA MOBILE

87.95

0.6868918

CHINA OVERSEAS

24.05

1.05042

CHINA PETROLEU-H

6.25

CHINA RES ENTERP

HONG KONG EXCHNG

130.4

0.6949807

4369696

HSBC HLDGS PLC

87.95

2.030162

27063635

21195033

HUTCHISON WHAMPO

94.45

1.723209

14024627

15951841

IND & COMM BK-H

5.59

1.821494

343224666

1.957586

92118116

LI & FUNG LTD

11.96

2.572899

29025058

0.4016064

2885427

MTR CORP

30.8

-0.6451613

3913827

23.45

1.295896

7153575

NEW WORLD DEV

12.5

4.340568

35819805

CHINA RES POWER

-0.3322259

7530350

PETROCHINA CO-H

8.93

2.173913

121046758

CHINA SHENHUA-H

25.7

0.7843137

24244860

PING AN INSURA-H

60.9

2.01005

13103829

CHINA RES LAND

NAME

WHARF HLDG

MOVERS

23560

INDEX 23502.51 HIGH

23549.89

LOW

23099.17

52W (H) 23944.74 (L) 19426.35938

23090

16-September

18-September

15 15

September 20, 2013 April 19, 2013

Opinion Business

wires

The Geneva Conversion Christopher R. Hill

former US Assistant Secretary of State for East Asia, is Dean of the Korbel School of International Studies, University of Denver

Leading reports from Asia’s best business newspapers

The Star Real Estate and Housing Developers’ Association Malaysia (Rehda) expects the Government to increase real property gains tax (RPGT) by 15-20 percent in the 2014 budget. Its chairman of finance and investment committee, Datuk Ng Seing Liong, said buyers should not worry about the increase in RGPT as it would only affect buyers who disposed of their properties within five years after their purchase. According to news reports, the government is trying to curb excessive speculation.

Yomiuri Shimbun The Japan government will start helping oil firms consolidate and restructure their refineries, which are relatively small compared to facilities in South Korea and other Asian nations. By promoting the entry of these companies into the electric power and gas businesses as well, the government hopes to enhance their international competitiveness. The ministry will subsidise half the costs required for them to do away with surplus facilities as a result of the restructuring and consolidation.

Philippine Inquirer The central bank has showed an improvement in its books as its losses declined for the Januaryto-July period 2013 amid lower interest rates for special deposit accounts and foreign exchange gains. Documents released by the bank showed a net loss of P19.21 billion at the end of the seven-month period. This was lower by 60.77 percent than the P48.97 billion in losses the BSP posted in the same period in 2012.

Jakarta Post The Tourism and Creative Economy Ministry has encouraged hotel and tourism business players to start investing in the eastern part of Indonesia, in tandem with the government’s plan to develop infrastructure there. “They [the tourism business players] are no longer focusing on western Indonesia, but [they] have been starting to adhere to the MP3EI,” said ministry official Syamsul Lussa, referring to the Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development.

he agreement on Syria’s chemical weapons reached by Russia and the United States is important not so much for what it could mean on the ground – which remains to be seen as inspectors begin to flow into Syria and, we hope, chemical-weapons stockpiles begin to be destroyed. Rather, the agreement’s main significance consists in the fact that it was struck at all: US Secretary of State John Kerry met with his Russian counterpart, Sergei Lavrov, in Geneva, that most traditional of diplomatic venues, and cut a deal on an issue of intense mutual interest. In the days, weeks, and months ahead, the arrangements to remove chemical weapons from Syria will, one hopes, begin a new era in which the US and Russia work together on other pressing global issues as well. A cooperative US-Russia relationship is essential if the international system, now almost dysfunctional, is to work properly in the future. The agreement on Syria could accomplish something else: Americans might recognize that, lo and behold, there are other ways to solve problems than by dropping bombs. Russian President Vladimir Putin’s clumsy foray into the American debate infuriated many Americans (including me), but it was certainly a teachable moment. Many outside the US thought it was high time that someone offered America a taste of its own paternalism – and even better that that someone was Putin, a politician who has, to put it gently, his own set of foibles. So Americans might want to tone down their antiPutin rhetoric. As a practical matter, Putin certainly does not seem to be suffering any

adverse domestic political consequences from his bashing in the US. More broadly, America’s supply of moralistic – and even churlish – advice to the rest of the world has greatly exceeded international demand for it. And its willingness to engage militarily as an early step, rather than as a last resort, has alienated many around the world. No amount of “Muslim outreach” and other public diplomacy alone will change that. Support for insurgencies is a case in point. Many countries – Syria qualifies as a poster child in this regard – suffer under miserable, brutal governments. But backing an armed rebellion is a major step, especially when the rebels whom one is backing have, as in Syria, started something that they may not be able to finish. This is not to say that the US should never support insurgencies against established governments; but doing so is almost always a lonely affair, without any

A cooperative USRussia relationship is essential if the international system, now almost dysfunctional, is to work properly in the future

realistic expectation of enlisting many partners in the process. Such policy choices should be made rarely, and with a clear understanding that support for the violent overthrow of a government is not very popular around the world. The road that got the US to the Geneva agreement with the Russians was long and windy, and may indeed have done some damage to America’s standing in the world, even though the outcome was better than any other on offer. To put that process behind it, the US needs to follow up with the Russians to establish a broader pattern of longoverdue cooperation. Call it a “reset” button – like the one then-Secretary of State Hillary Clinton gave to Lavrov in 2009 – or whatever one wants. But it should be more than a gag gift. The reset must occur in the context of efforts to solve real problems together. A good place to start would be to seek a Syrian peace deal that enables the country’s different communities – now butchering each other – to live

in one state. Maybe the US is right that Syria’s brutal and mendacious president, Bashar al-Assad, cannot be part of any eventual solution. But there is time to figure that out, and Syria’s own 2014 election might offer a face-saving way out of that conundrum. A role for the Russians could help coax Assad into offering concessions that he will not make as long as he views the process as one that is intended to destroy him. At this point, any peace process is a long shot, but so is the prospect of either side winning militarily, with or without the arrival of American arms for the rebels. The alternative of allowing this fight to the death to play out – a proposal heard daily on American talkathon television – is not worthy of our civilization. Such a scenario could amount to fighting to the last Syrian child. The world needs all hands on deck – not only Russian and American, but also Arab, Chinese, European, and anyone else’s. The beacon of hope shining from Geneva should guide us all. © Project Syndicate

September 20, 2013

Closing Amax gives up on Northern Cyprus plan

Caesars gets loan to refinance debt

Loss-making Macau junket investor Amax Holdings Ltd has given up a bid to operate a casino in the Turkish Republic of Northern Cyprus. The jurisdiction is only recognised by Turkey. “As notified by the target company, it has decided not to proceed with the casino project as the parties could not compromise on finalising the terms of a formal sale and purchase agreement,” said Amax in a Hong Kong filing. It’s still pursuing a plan to buy outright a hotel and casino project in the Pacific island republic of Vanuatu (pictured) off the east coast of Australia.

Caesars Entertainment Corp – which last month sold its Macau golf course for US$438 million (3.5 billion patacas) – is to refinance some of its massive remaining debt load according to a filing in the United States. The U.S.focused casino firm has long coveted an Asian operation, but was unable to parlay its Cotai plot into a gaming operation. Analysts say the firm’s debt – US$23.5 billion as of June 30 – has been a barrier to Caesars’ Asian ambitions. The company has secured a US$3 billion loan and a US$269.5 revolving credit line for a US$4.4 billion refinancing.

Mr Bernanke said he was concerned that higher interest rates would curb growth

Bernanke resets Fed policy by doing nothing Stocks soar to record highs as market respond to unexpected move

en Bernanke reinforced his standing as the most activist Federal Reserve chairman in history by doing the unexpected: nothing. The policy-setting Federal Open Market Committee yesterday refrained from reducing the US$85 billion pace of its monthly securities buying, sending stocks to record highs and triggering the biggest rally in Treasuries since 2011 as investors repositioned for a more accommodative central bank. Mr Bernanke said the Fed must

C Y Foundation unit gets more slot deals C

Y Foundation Group Ltd said yesterday its recently acquired unit Weike (G) Management Macau Ltd has signed two more deals to supply and maintain slot machines at casinos licensed by Sociedade de Jogos de Macau SA. The new agreements are with Casino Casa Real on Macau peninsula and Casino Grandview in Taipa, for

determine its policies based on “what’s needed for the economy,” even if it surprises markets. The decision to abstain from tapering bond purchases underscored Mr Bernanke’s willingness to do anything to lower unemployment and pushed back expectations for a tightening of policy, according to Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey. Mr Bernanke said he was concerned that market interest rates, driven higher by his own suggestion he would scale back so-called quantitative

five years “from a date to be mutually agreed in writing”, with a renewal option until March 2020. C Y says that subject to approval by the Gaming Inspection and Coordination Bureau, Weike (G) Management will supply each property with a minimum of 120 slots and multi-terminal machines, as well as selecting and training maintenance and operational staff. It was only on Tuesday that C Y announced it had completed the deal to acquire Weike (G) Management for HK$69 million (US$8.9 million). The target firm has a five-year contract – renewable for a further five years – to manage 205 machines at SJM-licensed Pharaoh’s Palace Casino. M.G.

easing, would curb growth. “The overriding message the Fed wants to send is that it remains completely committed to providing as much support as necessary,” Mr Crandall said. “The Fed’s goal in surprising the market here was to really cement the credibility” of its interest-rate guidance by showing its primary concern is encouraging growth, he said. Mr Crandall had predicted the Fed would cut its bond buying, and said he now expects the central bank to do so in December, though it is “far

UK retail sales fall as food reverses gain U

nited Kingdom retail s a l es u n ex p e c t e d l y f e l l the most in 10 months in August as demand for food plunged, reversing a surge the previous month. Sales including fuel declined 0.9 percent from July, the Office for National Statistics said yesterday in London.

from a done deal.” He said the Fed may continue the program into the third quarter of next year, up from a previous expectation of a mid-2014 end. Mr Bernanke, whose term ends January 31, has kept interest rates near zero for almost five years and swelled the Fed’s balance sheet to a record of US$3.66 trillion through buying Treasuries and mortgagebacked securities. In his Wednesday press conference and in his policies since the financial crisis, Mr Bernanke has refused to give up on the power of monetary policy or the ability of the United States economy to eventually heal from the worst recession since the Great Depression. Mr Bernanke said he was “somewhat concerned” by the impact of rising bond yields on the economy and wanted to “wait a bit longer and to try to get confirming evidence” that the economy is showing signs of lasting improvement. Bloomberg News

The median forecast of 20 economists in a Bloomberg News survey was for a 0.4 percent gain. Food dropped 2.7 percent after increasing that amount the previous month, which was the biggest gain since April 2011. The report contrasts with recent indicators pointing to a strengthening economy, including a factory survey yesterday showing orders at the highest in six years. The Bank of England, which plans to keep interest rates low until the country has achieved sustainable expansion, said Wednesday that the recovery is “taking hold” and its staff raised their growth forecast for this quarter to 0.7 percent from 0.5 percent. Bloomberg