Macau Business Daily, Spetember 23, 2013 by Business Daily

www.macaubusinessdaily.com

Year II

Number 376 Monday September 23, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

Vitor Quintã

MOP 6.00

April 19, 2013

Typhoon Usagi’s ‘bark’ as bad as its bite

yphoon Usagi proved yesterday that the mere threat of a signal No 8 can cause plenty of disruption to the public. The Marine and Water Bureau said that ferry services from the Outer Harbour Ferry Terminal had all been stopped by 6pm last night when a signal No 3 was still in force. At Macau International Airport, the city’s flag carrier Air Macau suspended flights as early as noon, sparking complaints from passengers.

Meteorologists pointed out the storm – with winds of up to 165 kilometres per hour – could have made flying west-east toward Taiwan potentially perilous. Macau’s casino gaming revenue is likely to show year-on-year growth “well into the teens” in September despite Typhoon Usagi’s visit overnight, said Union Gaming Research Macau. More on page 5

Leong’s ticket goes to Court of Final Appeal

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Hang Seng Index

Despite a recount, the electoral ticket of gaming executive Angela Leong On Kei still does not have enough votes to get the last of 14 available seats in the Legislative Assembly Business Daily has learned. Her running mate Kent Wong Seng Hong – the man who missed out – told Business Daily by telephone yesterday: “We have already appealed to the court [of Final Appeal] about certain invalid votes…” The court is expected to deliver its decision within four working days. Details of the recount result were not official at the time the newspaper went to press. The Election Commission on Friday declined to release the outcome. Page 2

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September 19

HSI - Movers

‘Heavyweights’ are after me: Joseph Lau

Name

%Day

SINO LAND CO

8.61

CHINA MERCHANT

6.17

SUN HUNG KAI PRO

5.02

WHARF HLDG

4.45

Hong Kong tycoon Joseph Lau Luen Hung, the main defendant in an ongoing Macau bribery trial says he’s being “persecuted by influential people” but pledged to fight back if pushed further. At the weekend Mr Lau, chairman of Hong Kong-listed developer Chinese Estates Holdings Ltd, broke his silence for the first time since being charged last year with bribing former Macau official Ao Man Long.

NEW WORLD DEV

4.34

CHINA RES POWER

-0.33

KUNLUN ENERGY CO

-0.36

MTR CORP

-0.65

TINGYI HLDG CO

-1.86

HENGAN INTL

-1.27

Page 2

Source: Bloomberg

Interview

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Grassroots populism beats democrats’ theories Academic Eric Sautedé suggests the shift of power seen within Macau’s Legislative Assembly after last week’s election appears due to a coalescing of public and private interests around one candidate. Chan Meng Kam managed to get three members of his ticket elected. In an interview with Business Daily, political scientist Mr Sautedé says that appears to be thanks to support from powerful interests in Macau. Pages 6 & 7

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September 23, 2013

Macau

Angela Leong’s poll ticket goes to Court of Final Appeal Follows recount that failed to award Legislative Assembly seat to her running mate Kent Wong Tony Lai

tony.lai@macaubusinessdaily.com

espite a recount, the electoral ticket of gaming executive Angela Leong On Kei still does not have enough votes to get the last of 14 available seats in the Legislative Assembly Business Daily has learned. That news is not official. The recount was completed on Friday said the Election Commission, at which time it declined to release the outcome. The outcome was leaked instead by José Pereira Coutinho, another of the election candidates. His ticket stands to lose its second seat if the process goes in favour of Ms Leong. Mr Coutinho, Macau Civil Servants Association president, told Business Daily yesterday that his ticket had lost only one vote as a result of the recount. “This means the [election] result is unchanged: we still have more votes [than Ms Leong’s bid],” he told us. When Business Daily contacted Ms Leong’s running mate Kent Wong Seng Hong – the man who missed out on the 14th seat – for a comment yesterday, he appeared to confirm Mr Coutinho’s version of events Mr Wong told us: “We have already appealed to the court [of Final Appeal] about certain invalid votes, and as far as I know, some other groups have also made similar actions. We are now waiting for the court to make a decision within four days.” Asked what the ticket would do if the court rules against it, Mr Wong told us: “We can only accept it”. A range of options are available to the Court of Final Appeal. They include: a finding that all the results should stand as they are; that there was some defect in the process

Kent Wong, SJM chief executive Ambrose So and Angela Leong on the election stump

regarding Ms Leong’s ticket; or that the whole election should be run again. There is no precedent for the third of those options. Macau’s Legislative Assembly is scheduled to start its new sitting on October 15, so any legal process could potentially disrupt what is likely to be another packed legislative schedule. The election law as currently written has anticipated the possibility of legal appeals. It says that once the recount decision is officially announced, Ms Leong has 24 hours to lodge a legal appeal. The court then has four working days to issue a judgement, and its decision is final. The official recount result is expected from the Election

Commission today. But Mr Coutinho told us yesterday: “I am very happy that my second candidate [in the ticket], Leong Veng Chai, can get the last seat.” The September 15 election result indicated that Kent Wong – a senior advisor to casino operator Melco Crown Entertainment Ltd and the second name in Ms Leong’s ticket – was only 16 votes short of Leong Veng Chai in competing for the last seat of the 14 directly elected legislators. Mr Coutinho said he is “not worried” about a court appeal. “They have this right according to the law,” he said. “But the result will not be affected as it is difficult to turn

the invalid ballots into valid [ones].” Some 4,000 invalid ballots were recorded in last week’s election. The Election Commission has already confirmed that only 16 of those votes were after all acceptable under the commission’s guidelines and can be awarded to candidates. That’s a difference of around 0.4 percent of votes originally ruled invalid. The commission also ordered a recount all the ‘valid’ votes for the tickets of Ms Leong, Mr Coutinho and the winner of the popular vote Chan Meng Kam. It was the first time Macau has had a recount of valid election votes since the territory’s return to Chinese administration in 1999.

‘Heavyweights’ out to get me, Joseph Lau grumbles The corruption suspect warns that he will fight back if he feels he is ‘doomed’ Tony Lai

tony.lai@macaubusinessdaily.com

ong Kong tycoon Joseph Lau Luen Hung, one of the principal accused in the La Scala corruption trial, says he is being “persecuted by influential people”. But Mr Lau says he will fight back if pushed further. Mr Lau, the chairman of Hong Kong-listed developer Chinese Estates Holdings Ltd, spoke out at the weekend for the first time since he was charged last year with bribing Ao Man Long when Ao was a government secretary. “I am now facing the persecution of heavyweights who are ten times cleverer and a thousand times more powerful than Cheung Tze-keung,” Mr Lau told media. Mr Cheung, now deceased, was

a notorious gangster and the most wanted criminal in Hong Kong in the 1990s. Mr Lau said he would like to produce a movie entitled “Cheung Tze Keung and Big Lau” to show the central government that “a place cannot be controlled by a few influential people from generation to generation”. He declined to identify his persecutors. Mr Lau and another Hong Kong businessman, Steven Lo Kit-sing, are on trial on charges of money laundering and bribing Mr Ao with HK$20 million (US$2.5 million) to win the bidding for the land near the airport where La Scala, an upmarket housing project, was to have been built. Mr Lau denies the charges.

“I know nothing about what happened, from start to finish,” he said. Mr Lau said people had told him “several times” that they could help him get the charges against him dropped if he sold the rights to the La Scala land concessionaire. The government voided last year one grant of land made in 2006 and voided in April another grant of land made in 2011. Asked how it was possible that some people still wanted the land, Mr Lau replied: “People doing business will know”. He hoped to settle the whole affair “harmoniously”, he said. “If you take one step back, others will force you one step forward,” he said. “Do you think I will resist? I

will if I am doomed.” Mr Lau has been absent from his trial so far. He said he was very ill. He suffers from chronic diabetes and his lawyers have told the court he is too ill to appear. Mr Lau said he would “definitely” have appeared if the trial had been held in Hong Kong. “But I know that if I go to Macau, no-one can guarantee my personal safety,” he said. Mr Lau reshuffled his team of lawyers in Macau last week. David Azevedo Gomes replaced Leong Weng Pun and Lee Kam Iut as Mr Lau’s counsel on Wednesday. He said the original team had failed to do their best to defend him. His trial resumes on October 7.

September 23, 2013 April 19, 2013

Macau

The voter turnout in this year’s Legislative Assembly elections was 55 percent

Community groups flex their political muscles Immigrants played an important part in the Legislative Assembly elections Stephanie Lai

sw.lai@macaubusinessdaily.com

he power to mobilise voters exercised by associations of people that have common origins in the mainland was the main surprise in the Legislative Assembly elections on September 15, politicians and political analysts say. Such associations have been strengthened by recent immigration from the mainland. The tickets of candidates led by businessmen Chan Meng Kam and Mak Soi Kun beat the tickets put up by traditional associations and pro-democrats to win the highest number of votes. An associate professor of public administration at the Macau Polytechnic Institute, Sunny Chan Cheuk Wah, thinks the Chan Meng Kam ticket’s ties with the Fujianese community here and the Mak Soi Kun ticket’s ties with the community of people that hail Guangdong played an important part in the elections. Sunny Chan told Business Daily that the two tickets together had almost 16,000 more votes than in the previous election, in 2009, and that this had come as “a shock” to him. The Chan Meng Kam ticket had 9,900 votes more than in 2009 and won an unprecedented three seats. “Mr Chan and Mr Mak represent the highly unified power of their community associations, which include quite a number of mainland immigrants that have settled in

Macau,” Sunny Chan said. He said almost half of Macau’s residents were immigrants born in the mainland. “Of course, in the past four years the two legislators have also been diligent in engaging in dayto-day community services, which was helpful in gain support from neighbourhoods.” A member of the old assembly who lost his seat, Paul Chan Wai Chi, also thinks ties with the mainland helped the Chan Meng Kam and Mak Soi Kun tickets.

Everyone’s responsibility But Paul Chan thinks gifts handed out by candidates played a big part in the elections. “The ability of the candidates was not highlighted in this election,” he told Business Daily. “You could see it in the television debate before the election: neither the ticket of Mr Chan [Meng Kam] nor the ticket of Mr Mak expressed any particular views from their political programmes.” Paul Chan does not attribute these shortcomings solely to immigration from the mainland. “It is not only for the immigrants here that we have to enhance the democratic election culture and clean up corrupt practices that tempted voters,” he said. “For Macau as a whole, it is everyone’s responsibility – the government, the candidates and

the voters themselves – to adhere to a good election culture so that tickets with better finances and resources do not get a special edge.” A candidate on Legislative Assembly member Melinda Chan Mei Yi’s ticket, Wu Kam Hon, disputes the contention that immigrants were the single most important factor in the election. “Even Chan Meng Kam’s or Mak Soi Kun’s tickets, you can see, had a diverse make-up to reflect different voices from different age groups and professions, and so appeal to voters,” Mr Wu said. Political commentator Larry So Man Yum also feels the part played by immigrants is overstated. “I would say that what Chan Meng Kam and Mak Soi Kun did was just to secure their voter bases with their community associations,” Mr So told Business Daily. “Immigrants are not the major single influence on the results of this election.”

Lack of passion Another surprise to politicians and political analysts was the lower voter turnout this year than in 2009. The turnout was 55 percent this year. It was almost 60 percent in 2009. The electoral roll contained nearly 30,000 more names this year than in 2009. This year there were also more

candidates between the ages of 20 and 40, including Agnes Lam Lok Fong, New Macau Association president Jason Chao Teng Hei and Macau Tri-decade Action Union president Kou Ngon Fong. “It looks like voting by the young and the middle class was not as great as expected,” Sunny Chan said. “There are two possible reasons for this low voter turnout that we see. First, a lot of our voters are shift workers and their schedules may have affected their voting,” he said. “Second, it is about a lack of passion for election issues among the voters. They are so content with their jobs and lives that they have no will to change things with their votes,” he said.” Mr Wu said: “The lack of a compelling election atmosphere was a factor that affected the final voter turnout.” He said young voters were apathetic. “Some of them also do not have a clear idea of what an eligible voter is,” he said. “It will take years of better civic education to motivate the crowd.” Sunny Chan said the outcome of the next Legislative Assembly elections could be similar unless young voters were more active. About 70.4 percent of the 277,151 people registered to vote in this year’s elections were 40 or older, official statistics show.

September 23, 2013

Macau

Shenzhen people adopting smart way to renew visas

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HOSPITALITY

But other mainlanders will probably have to wait for a handy Macau visa renewal service

Filling rooms Hotel occupancy rates vary a lot during the course of each year. They also follow strong seasonal patterns. The plots for the occupancy rates of all classes of hotels always have neat peaks and troughs and strong monthly variations. So plotting the monthly occupancy rates of the various classes of hotel often yields confusing charts. To reduce confusion, the chart here uses threemonth moving averages, which smooth out the plots and so makes it easier to analyse what they show.

Hostels are obviously a world apart from the rest of the accommodation business. They report occupancy rates much lower than those of hotels. The average occupancy rate of hostels is roughly 20 percentage points below that of the least busy hotels. But the occupancy rates of hostels have risen considerably relative to the occupancy rates of hotels. Hostel occupancy rates were typically under 55 percent at the beginning of the period represented in the chart, but averaged nearly 62 percent at the end. Two-star hotels appear to be losing custom. Their occupancy rates follow a clear downward trend, while the number of rooms they contain has hardly changed. The occupancy rates of the other three classes of hotel were similar to each other, and all seemed relatively steady in the second half of the period shown. Four-star hotels had the highest occupancy rates most of the time, but recently three-star hotels have been vying to displace them as the busiest. The occupancy rates of five-star hotels rose slowly but steadily, even though the number of rooms five-star hotels contain has grown substantially. J.I.D.

84.4 %

average hotel occupancy rate in July

Stephanie Lai

sw.lai@macaubusinessdaily.com

uangdong people living in Shenzhen can now use WeChat to renew their individual visas for travel to Macau or Hong Kong, and the convenience of the visa renewal service has made it popular. The Shenzhen branch of Express Mail Service (EMS), which is run by China Postal Express & Logistics Co Ltd, introduced the service last week. “Since we launched the WeChat service over a hundred users have been approaching us every day for visa renewals,” a member of the Shenzhen branch’s customer service staff told Business Daily. “The service has got quite a huge response,” the staff member said. Some mainlanders are allowed visas to travel to Macau as individuals rather than as members of tour groups, who travel on collective visas. Once a resident of Shenzhen has added the EMS Shenzhen branch’s WeChat account to his or her contact list, the resident can apply to renew his or her individual visa by filling in an electronic form. Successful applicants get their renewals after five working days. EMS’s Shenzhen branch is the first business to introduce such a service using WeChat, a text and voice messaging application for smartphones. “So far we have heard nothing about the WeChat service for individual visa renewal being expanded outside Shenzhen,” the staff member said. “And we are serving only Guangdong people that are living in Shenzhen and have a valid address here,” she said. “For now, the service is limited to renewal of individual travel visas.” A Shenzhen resident cannot use WeChat to obtain his or her first individual visa or other sorts of documents needed for travel to Macau or Hong Kong.

WeChat is the most popular smartphone messaging app in the mainland

new media at the University of Macau, Raymond Lai Fei Loi, expects EMS’s WeChat visa renewal service to be limited to Shenzhen for the time being. “I think the identity verification

Official endorsement WeChat’s walkie-talkie-like voice message retention function has made the app popular in the mainland. People can use WeChat to share their personal status from day to day, like users of Weibo and Facebook can – or could, if Facebook was not banned in the mainland. The central government has embraced WeChat, using it to disseminate official information. A year ago the State Council began using WeChat to publish regulations. A lecturer in e-government and

Over a hundred users have been approaching us every day for visa renewals Express Mail Service staff member

process is still a problem that must be overcome to make it more prevalent countrywide,” Mr Lai told Business Daily. “There has also been news from the mainland about people creating fake government WeChat accounts to carry out scams,” he said. “So there is still a danger there for users in exchanging information on the platform, unless the government makes a clear announcement about opening an official account.” What measures have been taken to protect the personal data of users of EMS’s WeChat visa renewal service was unclear by the time Business Daily went to press. “Some of China’s eastern coastal cities have already talked about wanting to use WeChat as a platform to handle administrative affairs,” Mr Lai said. “I think this is possible, but it has not become a widespread practice yet,” he said.

September 23, 2013

Macau

Typhoon Usagi’s ‘bark’ as bad as its bite The city’s aviation and marine traffic suspended on Typhoon signal No 3 Tony Lai

tony.lai@macaubusinessdaily.com

yphoon Usagi proved yesterday that the mere threat of a signal No 8 can cause plenty of disruption to the public. The Marine and Water Bureau said in a press statement that the ferry services from the Outer Harbour Ferry Terminal had all been stopped by 6pm last night when a signal No 3 was still in force. Those from Taipa Temporary Ferry Terminal ended at 5.30 pm. At Macau International Airport, the city’s flag carrier Air Macau suspended flights as early as noon, around an hour after signal No 3 had been hoisted. It sparked complaints from numerous passengers, although meteorologists pointed out that as the storm – with winds of up to 165 kilometres per hour – was tracking east to west, it could have made flying west-east toward Taiwan potentially perilous. Public broadcaster TDM Radio reported scores of passengers rushed to the airport hoping to catch the last flights out. “TransAsia Airways and Eva Airways are still flying but why Air Macau is not flying?” asked a Taiwan-bound customer of Air Macau yesterday afternoon. Another Taiwanese told the radio station the city’s carrier had cancelled flights “too early” and providing no alternative arrangements such as accommodation here, the radio reported. Air Macau called off nine out of 10 flights connecting Macau to Taiwan yesterday. TransAsia by contrast chose to delay its cross-Strait services by several hours rather than anticipating signal No 8. A spokeswoman for Air Macau told Business Daily by telephone: “We announced the news of flight cancellations last [Saturday] night.” Asked why Air Macau decided to

Storm caused disruption for travellers

cancel flights earlier than other carriers, the spokeswoman said only: “We have been helping the passengers to change their tickets free of charge.” Macau International Airport Company Ltd said by yesterday evening at least 55 flights scheduled for yesterday and today had been cancelled. Air Macau said 32 flights were cancelled from yesterday until tomorrow. Its ceremony due today to inaugurate the first direct flight from Macau to Zhengzhou in north-central China today was also cancelled. The Transport Bureau however, was made of sterner stuff. It kept buses kept running pending any

signal No 8. The Macau Meteorological and Geophysical Bureau said it expected the typhoon to bring heavy rainfall to the city. Signal No 8 was in force in Hong Kong from 6.40 pm yesterday. According to China’s state-owned newspaper People’s Daily, the Guangdong Meteorological Bureau described Typhoon Usagi as “the strongest typhoon in five years” to make landfall in the south of China. The typhoon killed two people in the Philippines and unleashed landslides and led to evacuation of over 3,000 people in Taiwan. Macau’s largest telecommunications provider, Companhia de Telecomunicações de Macau SARL (CTM),

said service equipment located in the low-lying areas had been strengthened to resist flooding of up to about 1.8-metres. The city’s sole mains water provider, Macau Water Supply Co Ltd, said it had lowered the water level of reservoirs on the peninsula and on Coloane to avoid overflowing caused by heavy rainfall. Electricity supplier Companhia de Electricidade de Macau SA (CEM) also said it had reviewed the security of installations in low-lying areas. Macau residents were also reported to have stocked up on food such as instant noodles and vegetables prior to Usagi’s arrival.

Usagi hurts casino revenue

across all relevant [gaming] segments (VIP, premium mass, mass, grind mass) and we are looking for record levels of GGR [gross gaming revenue] next month driven by the upcoming October Golden Week holiday period. Further, and despite Typhoon Usagi, we fully expect September GGR yearon-year growth well into the teens.” In July the Monetary Authority of Macao said that gaming receipts were expected to see a “visible” slowdown in the second half of the year as highstakes gamblers traditionally rolling a high volume of VIP gaming chips contribute a smaller percentage of casino revenue. According to unofficial data seen by Business Daily, the proportion of Macau casino revenue generated from mass-market table games increased by 10 percentage points year-on-year in August. Last month, mass-market 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. 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 produced.

But market still on course for ‘teens’ growth in September says Union Gaming

acau’s casino gaming revenue is likely to show year-on-year growth “well into the teens” in September despite Typhoon Usagi’s visit overnight, said Union Gaming Research Macau. “While difficult to quantify, we think Typhoon Usagi could negatively impact September’s yearon-year growth rate by a few to several hundred basis points relative to current projections,” said analyst Grant Govertsen in a note. He added: “Despite this, trends remain exceptionally strong in Macau

With AFP/Bloomberg News

M.G.

September 23, 2013 April 19, 2013

Macau Brought to you by

Financial Monitor Too well behaved Inflation has been a worry for the past seven or eight years. Except in 2008 and 2009, when the international crisis slowed growth and reduced expectations, inflation has regularly been in the news and on the political agenda. However, inflation rates have not been remarkably high. The highest annual rate since 2008 was slightly above 5.8 percent, recorded in 2011. Since then inflation has slowed. One of the worries before 2008 was the acceleration of inflation, but that does not seem to be a worry any more. Last year inflation slowed by almost one percentage point. The figures for this year suggest that annual inflation will be about 5 percent at the end of the year, given that the consumer price index was 3.4 percent higher in August than at the end of last December and that upward pressure on prices usually increases in the closing months of each year.

Grassroots populism beats democrats’ theories Academic Eric Sautedé suggests the shift of power seen within Macau’s Legislative Assembly as the result of last week’s election appears to be due to a coalescing of public and private interests around one candidate. Chan Meng Kam managed to get three members of his ticket elected. In an interview with Business Daily, political scientist Mr Sautedé says that appears to be thanks to support from powerful interests in Macau, such as Susana Chou and the Nolasco local business conglomerate, along with traditional associations, casinos and junket operators. The pan democrats, the New Macau Association, ran a lacklustre campaign and failed in their aim of gaining four seats. In the end they lost one, and went down to two seats. Kwan Tsui Hang, the leader of the Macau Workers Association, urged the government to be tougher on illegal workers, but in the end she lost one of her list’s two seats.

San and Ng Kuok Cheong, along with José Pereira Coutinho and Kwan Tsui Hang, who were always the ones with the best ratings. In these elections, the New Macau Association lost 4,400 votes compared to 2009. On top of that, for the first time ever since the handover, they were not the highest vote getters. Kwan Tsui Hang lost a lot of votes, and she didn’t manage to get the second on the list elected, something that almost looks like a punishment. I come to the last big surprise, which was the landslide victory of Chan Meng Kam’s list. Even he was really surprised to be able to put a third [candidate] in the list in the legislature, and [the third list member] far from being the last one to be elected out of the 14 seats. Between 2005 and 2009, his support had declined, this time around it’s a landslide, it’s a jump of close to 10,000 votes. The same with Mak Soi Kun, who came in second [in the popular vote]. Of course, if we look at how politics work in Macau and not at rational choice in terms of voting, then we could have expected it more. It’s clearly the work of mobilisation through intermediary organisations. In this case, it was the business community, but not only that, also the casinos.

leitao.luciana@macaubusiness.com

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

Photos by Manuel Cardoso

Were these results surprising? Certain lists and candidates have gotten well organised, and we know that in Macau what will also get you elected [aside from personal popularity] is good organisational capacity. This was proven right, but not exactly in the way we had anticipated. What we were expecting [was] a lot of reshuffling. What was not to be expected was [what happened] to [some of] the legislators with the highest praise, namely two of the New Macau Association legislators, Au Kam

How does Kwan Tsui Hang fit into that theory? She is the leader of one of the most respected associations in Macau, the Macau Association of Workers but still lost a seat. What happened? I think she was punished somehow. I cannot substantiate it, but the fact is that the Neighbourhood Associations got so many votes, far more than last time. It’s almost like all the votes that went to her last time went to the General Union for Neighbourhood Associations this time. Maybe she is paying for the fact that she has been very intense on everything related to illegal work in Macau. What took votes from her, I believe, are instructions being given to these associations to shift their support from her to the General Union for Neighbourhood Associations, which are the two main venues for traditional patronclients associations in the territory. So, you imagine she made employers very angry because of her position about illegal work? She raised pretty high up the question of illegal work and this must have upset quite a lot of interests in Macau. Otherwise, she is a good legislator. She might not be appealing to the new young voters, but the youth vote is pretty scattered.

Luciana Leitão

The main cause of apprehension now may be that the CPI appears to have been too well behaved since 2008. The plots for the CPI each year are almost perfectly straight lines. If we make a simple linear regression for each of them, the resulting estimated functions display an extremely high degree of fitness. The commonly used R-squared coefficient of determination displays values that exceed, in every year, 93 percent. More perplexing, however, is that if we do the same for the full series, from January 2010 to August 2013, the coefficient reaches the extraordinary value of 99 percent. This is the kind of fit one would only expect in deterministic relationships.

Mak Soi Kun is the vice president of the Jiangmen Communal Society, but this is an association that is very loyal and very proBeijing. In Macau, they claim to have 30,000 supporters. On top of that, there are rumours that he was the preferred candidate from the Liaison Office [of the Central People’s Government in Macau]. Basically, [we have to look at] peer pressure or how your vote can be influenced by social relations at large, particularly in a society as traditional as the Macau society, where people have some kind of distrust of the system.

I believe he [Chan Meng Kam] ran a real campaign…contrary to the democrats that are always trying to empower the people.

How did Chan Meng Kam manage to succeed? He is a man of the people. When he says ‘I was once a poor man and I made it on my own’, even though it is really populist, people can respect that. There is also this idea that exists in the Chinese culture about making it yourself as your own boss. At one point, you are an employee, but tomorrow you’ll be a boss, because you will start your own company and all of that. This is very respected. In that sense, I believe he ran a

September 23, 2013 April 19, 2013

Macau Eric Sautedé

real campaign, where he could also put forward everything that he has done, contrary to the democrats that are always trying to empower the people. The democrats don’t want to be seen as white knights for all the causes, these guys are not businessmen who made it on their own. In that respect, Chan Meng Kam is very different, because he is putting himself as the one who says: ‘I’m talking to the people, I’m hearing them and I will defend their cause’. Then, you have of course the Fujian background, which helps a lot. In any case, the Fujian community was used as a [voting] bloc, but that was already the case in 2009, so that cannot be the only thing. The fact that he had some casinos vouching for him helped him a lot, that’s for sure. I saw on Sunday this picture circulating on Facebook of Chan Meng Kam with peanuts on the table, his second in command right beside him and on his left you have Susana Chou supporting him. Susana Chou and Nolasco from Susana Chou’s camp – have been for a long time – supporting Chan Meng Kam. But now that she is out of the Assembly for the first time, she really pushed all the associations she is in line with to vote for him. Is that enough to explain close to 10,000 additional votes [for Chan Meng Kam]? You have said previously the work Chan Meng Kam has done in the Legislative Assembly has not been impressive, and that he was not personally popular. Are you saying he managed to gather all this support over the campaign week? No, it’s a work [done] long before. People from the different minority lists were saying that the competition was so uneven, because they were competing with people that have casinos that can offer perks, additional holidays and so many things that will of course not appear to link to any campaigning. We know Mak Soi Kun’s association, right before the start of the campaign distributed eight million patacas to the aged. This is some kind of vote buying, and a really strong peer pressure along the lines of ‘don’t bite the hand that is giving you basically money for your daily life’. I do believe he used all the associations that are linked. His youth association has been extremely active, and it was run by people associated to Nolasco.

It moved to him in 2009. This youth association is very important in Macau. Also, in terms of organisational capacity, his camp had rented out or reserved 500 to 600 coaches and lorries for people to be taken to voting booths. Of course, this is not vote buying or electoral corruption, this is still tolerated by the regulation as long as they don’t give clear indication on who they should vote for. Also, something we need to look into is the role of the junkets in Macau. All the junkets in Macau, Neptune, Suncity Suncity was supporting both the Neighbourhood Associations and Chan Meng Kam and you can see both did pretty good [well].

...there are rumours that he [Mak Soi Kun] was the preferred candidate from the Liaison Office

Considering what happened in these elections – I’m not even referring to the suspected cases of vote buying, but the free rides for example – should there be some changes to the regulations to make it clearer what is not allowed? Sure. But the only way to solve the problem is to make the day of voting a holiday. Otherwise, these guys are voting and they are working that day. In a city like Macau, where the business runs 24 hours, this is difficult to implement. This is how you do it in the old democracies of the world. Probably, the biggest losers of these elections were the democrats and it was more than just a question of separating into three different lists. In absolute terms, they lost many votes. What went wrong? They lost about 4,500 votes. They are ageing and they are desperately looking for a replacement. There is

a gap. For the old time supporters this is not something that is reassuring. Chan Wai Chi is also with them, but he is more intellectual, so he is less to be seen and they need to be seen. They are the only ones - apart from Coutinho and, in a way, Chan Mei Yi - who are really full-time politicians. For them, Chan Wai Chi not doing it [campaigning] was somehow an issue, because Ng Kuok Cheong was really the one who lost the most. Ng Kuok Cheong in attending rallies and rallying the vote, so it wasn’t expected that he would lose that much [support]. Clearly, it was a lack of strategy, but more than lack of strategy is that they didn’t want to get dirty in a way. You need to mobilise the intermediary associations, otherwise it’s like Ng Kuok Cheong said: ‘Our job has become even more difficult and because its an economy that has been doing extremely well, so everybody has a job.”

things that are affecting the daily life of the people, everybody was saying the same: it’s very difficult to prove in such a short campaign that the people talking about these issues are two-faced. If you had a longer period, if you had parties… That’s why I’ve been asking so much about the laws on political parties.

On the democrats’ agenda, you have political reform as if people cared

You mean that no one as a reason to complain? Exactly. But there are issues like rising home rents that are still disturbing the people. Aren’t these worth fighting for? But everybody is talking about it. If you take housing, this was really one of the very important issues raised originally by the New Macau Association back in 2005 and in 2009. Coutinho picked up on that in 2009 and they were the ones really talking about that. Now, everybody talks [about it], even the number two of Chan Meng Kam. Everybody is talking about the fact that there is huge inflation. On the democrats’ agenda, you have political reform as if people cared about that. You need to keep it extremely simple for the elections. The democrats failed in defining their political programme? They failed in defining what was their main goal. Au Kam San is the only one systematically raising this issue of the lack of transparency for open tenders in new land reclamation being used for this and that development. It’s incredible, but actually, time comes, and these matters are lost, if they have not been hammering that message before. Honestly speaking, on the

The fact that we have associations, rather than political parties, is distorting the system? Completely. It’s distorting the system. These guys [democrats] are doing a good job - they are not always right. The democrats are extremely wrong on everything that has to do with human resources. During the campaign there was not the time [to discuss it]. What can we expect for the next four years in the Legislative Assembly, considering the business sector has come out stronger in this election? Will we hear about topics such as political reform, domestic violence or other social issues? Everybody talks about political reform, but it will be gradual. Macau is different [from Hong Kong], which was exactly what Florinda Chan was saying and Ho Iat Seng [was saying]. As for political reform, nothing can happen, unless something happens in Hong Kong and it is proven right that it was a good choice. The guys from the Neighbourhood Associations or even Chan Meng Kam can do something - he has the pockets deep enough to go to lawyers, for sure he will come out with laws to come out as the protector of the people.

September 23, 2013 April 19, 2013

Greater China

Party completes purge: Bo Xilai gets life in jail

week, according to the newspaper.

Feisty defence

Court orders all personal assets of ousted politician be seized Megha Rajagopalan

Chinese court sentenced ousted senior politician Bo Xilai to life in jail yesterday after finding him guilty on all counts following his dramatic five-day trial last month on charges of corruption, taking bribes and abuse of power.

Mr Bo was a rising star in China’s leadership circles when his career was stopped short last year by a murder scandal in which his wife, Gu Kailai, was convicted of poisoning a British businessman, Neil Heywood, who had been a family friend.

Bo Xilai was found guilty on all counts of corruption, taking bribes and abuse of power

The court in the eastern city of Jinan, where Mr Bo was tried, also ordered that all his personal assets be seized, and deprived him of his political rights for life too, according to a transcript released by the court’s official microblog. “Bo Xilai was a servant of the state, he abused his power, causing huge damage to the country and its people ... The circumstances were especially serious,” the court said in its judgement. Mr Bo, 64, has 10 days to appeal starting today, the court added. State media said he was likely to appeal, in which case the supreme court in Shandong province, where Jinan is located, would have to hear the case within two months. The court showed a picture of a handcuffed Mr Bo, with clenched fists in an apparent show of defiance, flanked by two towering policemen who held him by his shoulders and forearms. Two more policemen stood by. At the close of Mr Bo’s trial last month, prosecutors demanded a heavy sentence, saying his “whimsical” challenge to charges flew in the face of the evidence. State media, which speaks for the party, had already all but condemned him. Hong Kong’s South China Morning Post cited a source last week as saying Mr Bo believes one day his name will be cleared. “I will wait quietly in the prison,” Mr Bo said in a letter to his family last

China to invest in Ukraine farmland

hina is to buy 3 million hectares (7.4 million acres) of Ukrainian farmland, media said yesterday, which would make Ukraine China’s largest overseas farming centre as it strives to keep pace with rising food demand. China’s official Xinjiang Production and Construction Corps has signed an agreement with Ukrainian agricultural firm KSG Agro, which would see Ukraine provide 100,000 hectares to China. That would eventually rise to 3 million hectares, the South China Morning Post said. Chinese experts have said China must expand its overseas farming

to ensure sufficient food supplies because of its limited land and low productivity. China accounts for a fifth of the global population but only nine percent of its land. Demand for food is rising as incomes rise. The 50-year plan was mainly aimed at growing crops and raising pigs, the Hong Kong newspaper said, citing a statement from the Xinjiang Production and Construction Corps. In 2009, China had a total of just over 2 million hectares of farming land abroad, the newspaper said, quoting an agriculture expert. A spokesman at the governmentlinked XPCC said he was not

aware of the statement and did not immediately respond to a request from Reuters for confirmation of the report. China’s overseas expansion in agriculture has raised some concern. In June, Australian politicians called for greater scrutiny over farm purchases by foreign buyers. Chinese investors bought up Australia’s biggest cotton farm in 2012. China, which has aims to be 95 percent self-sufficient in food, also suffers from fears over food safety after a series of scandals ranging from melamine-tainted milk to toxic heavy metals in rice and vegetables. Reuters

Mr Bo, who was Communist Party chief of the southwestern metropolis of Chongqing, mounted an unexpectedly feisty defence during his trial, denouncing testimony against him by his wife as the ravings of a mad woman. He repeatedly said he was not guilty of any of the charges, though he admitted making some bad decisions and shaming his country by his handling of former Chongqing police chief, Wang Lijun, who first told Mr Bo that Ms Gu had probably murdered Mr Heywood. Mr Wang fled to the U.S. consulate in the nearby city of Chengdu in February last year after confronting Mr Bo with evidence that Ms Gu was involved in the murder. Mr Wang was also jailed last year for covering up the crime. The state prosecutor had said Mr Bo should not be shown leniency as he had recanted admissions of guilt ahead of his trial. Senior party figures feared Mr Bo could stage a political comeback one day if he was not dealt a harsh sentence, sources told Reuters after the trial. A light sentence could have undermined president Xi Jinping’s pledge to go after corrupt political heavyweights as harshly as those lower down the pecking order. Mr Bo cultivated a loyal following through his charisma and populist, quasi-Maoist policies, especially among those left out in the cold by China’s anything-for-growth economic policies. Reuters

September 23, 2013 April 19, 2013

Greater China

Shuanghui gets clear road for biggest US takeover

ctivist investor Starboard Value LP said on Friday that it planned to vote in favor of the US$4.7 billion offer for Smithfield Foods Inc by China’s Shuanghui International, saying it has not been able to line up an alternative proposal. Starboard, which has a 5.7 percent stake in Smithfield, the world’s largest pork producer, has criticised the deal. The transaction needs the approval of just over 50 percent of Smithfield shareholders at a special meeting tomorrow. Starboard said in a filing with the United States Securities and Exchange Commission that unless another proposal emerged, it would

vote for the Shuanghui deal. “While we are confident that [Smithfield] could have received value in excess of that available pursuant to the proposed merger, we are not able to offer shareholders an alternative proposal at this time,” Starboard said in the filing. The deal, struck in May, would be the biggest takeover of a United States company by a Chinese one. Sources earlier this week told Reuters that Shuanghui was already well on its way to crossing the 50 percent threshold and was optimistic it would be able to close the deal by Thursday.

Smithfield is the world’s largest pork producer

Reuters

Swire’s Miami project to include 80-story tower S

wire Properties Inc said it will build an 80-story mixed-use tower as part of its US$1.05 billion CityCentre project near the heart of Miami’s financial district. Designed by Miami-based Arquitectonica International Corp, the skyscraper will have stores, condominiums and a hotel, Swire said in a statement Friday. The building, to be known as One Brickell CityCentre, will be one of the tallest in Florida, according to the Miami-based company, a unit of Swire Properties Ltd of Hong Kong. The CityCentre project is

scheduled for completion in 2015. Development of Miami’s historic downtown and financial districts has rebounded since the global financial crisis, with more than a dozen projects set to change the city’s skyline. Related Group of Florida, led by Jorge Perez, will open an art museum on the downtown waterfront area in December, and a new science museum is under construction nearby. “In Miami we’ve seen in one decade changes that are transformational,” Mr Perez said in an interview Thursday. The city “is becoming a great urban center.” Across Miami, residential sales reached a seven-year high in the second quarter and distressed properties comprised a smaller share of the market. The average price for Miami luxury condos, which make up the top 10 percent of sales, climbed 9.5 percent from the previous quarter to US$1.7 million, according to a July report by Douglas Elliman Real Estate. Bloomberg News

10 10

September 23, 2013 April 19, 2013

Greater China

Apple has rolled out its flagship product in China on the same day as elsewhere

Throngs greet iPhones as China joins debut Investors fear Apple has priced its new gadget too high for emerging markets

housands of iPhone enthusiasts queued up at Apple Inc stores around the world on Friday as two new models of the smartphone went on sale. Long lines formed outside stores in Beijing, Sydney, Tokyo, New York, and other cities as Apple broke with tradition and launched two iPhone models – the new top-of-the-line 5S and the less-expensive 5C – on the same day. This was also the first time Apple rolled out its flagship product for sale in China on the same day as elsewhere, abandoning the usual three-month delay, as the company seeks to lure new customers in the world’s largest mobile-phone market. “Last year, if you wanted an iPhone 5 right after the launch, it was very expensive because you had to buy one that had been brought in from Hong Kong or the US,” said Max Zhang, a 20-year-old student, among the roughly 50 people waiting at the Wangfujing store in Beijing. “Now that I can buy it directly in the Apple Store, it’s cheaper,” said Mr Zhang, who bought an iPhone 5S. Apple watchers said early signs pointed to more demand for the 5S than last year’s new model. But some cautioned that the size of the crowds this year may not be an accurate gauge because consumers were unable to order the more expensive model online ahead of time, as with previous launches. “While it is likely some of this line is due to not having an early pre-order option for the 5S, we still believe it shows loyalty to the iPhone remains strong among Apple’s installed

base,” said ISI Group analyst Brian Marshall. He estimates Apple will sell about 6 million units in the first three days. Apple sold more 5 million of the previous iPhone 5 units during its opening weekend last year. A survey done by Piper Jaffray of 416 customers standing in lines outside of stores in New York, San Francisco and Minneapolis found that 95 percent of the people were planning to buy the 5S. Gene Munster, analyst with Piper Jaffray, estimates Apple will sell 5 million to 6 million iPhones over the weekend. The gold-colored version of the 5S, which also comes in silver and gray, was already sold out as of Friday and will now ship only in October, according to Apple’s website. The gray and silver versions can still ship in 7 to 10 days. Supplies of both the new models has been disappointing, a source at a United States wireless carrier had told Reuters earlier.

Winning chip firms Analysts have questioned whether the technology of the new top-end 5S is enough to persuade people to trade up. But those concerns did not seem to apply Jimmy Gunawan, the first in line outside an Apple store in Sydney. “It’s been one year since iPhone 5. It’s about time to upgrade I guess,” he told Reuters TV. The new iPhones use chips made by Avago Technologies Ltd , TriQuint Semiconductor Inc and Skyworks Solutions Inc, according to repair firm

iFixit, which opened up the iPhone 5S and 5C on Thursday. Broadcom Corp’s chip is used for the touchscreen controller in both phones, iFixit said. All these suppliers also featured in last year’s iPhone 5.

While it is likely some of this line is due to not having an early preorder option for the 5S, we still believe it shows loyalty to the iPhone remains strong among Apple’s installed base Brian Marshall, ISI Group analyst

Another teardown expert, Chipworks – which opened up Apple’s A7 chip – found that Samsung produced the application processor while NXP Semiconductor made the new M7 co-processor chip. The iPhone’s M7 can track motion data continuously without heavily draining the battery.

Including the M7 processor on the same chip as the main A7 processor would be more efficient than adding it as a discrete chip and would help the two processors communicate more easily, said Real World Technologies analyst David Kanter. Investors have also questioned whether Apple has priced its new plastic-backed 5C too high to compete with cheaper smartphones that use Google’s Android operating system, particularly in China and other emerging markets. Apple’s performance in China – where the price of the iPhone 5C reached above US$700 because of tariffs – is particularly important given the size of the market. A survey of 25 of the earliest consumers at the Beijing store found 22 of them were there for the more expensive 5S model, compared with three for the 5C. “Tim Cook is now finally treating China as important as the U.S.,” said Tony Yu, 28. The local government bureaucrat woke up at 2am and drove more than 300 kilometers (186 miles) from Qinhuangdao to be at the Beijing store by 6 am. “It costs me about one month’s pay, but it’s worth it.” Tech analysts this week praised the fingerprint scanner in the 5S model, which lets users unlock their devices or make purchases by simply pressing their finger. The sensor technology that powers the fingerprint scanner in the new iPhone 5S was developed by AuthenTec, which was bought by Apple a year ago, iFixit said. Bloomberg News/Reuters

11 11

September 23, 2013 April 19, 2013

Asia Singapore Airlines will have a 49 percent stake in a New Delhi-based carrier

Singapore Airlines tries to rekindle India affair Carrier pushing ahead with Asia Pacific and low-cost expansion

lmost 13 years after pulling the plug on its last attempt to enter the Indian market, Singapore Airlines Ltd (SIA) is taking another stab at the country by again teaming up with the Tata Group as part of a broader strategic shift. Last week, the two companies applied to set up a new New Delhibased full-service carrier, pledging a combined US$100 million to get it

going. This follows an unsuccessful attempt to do the same in the mid1990s and a failed attempt to buy state-owned Air India in 2000. The new carrier, if approved, will initially serve the 1.2 billion Indian market. Barring no political or regulatory obstacles, it could be airborne in about a year. SIA, which will have a 49 percent stake in the carrier, will

Myanmar needs ‘responsible investments’: Suu Kyi No rule of law makes foreign investors jittery, says opposition leader

be banking on its success. Intense competition on its mainline medium and long-haul markets and weak demand on services to Europe, means that SIA, Asia’s second-biggest airline with a market value of US$10 billion, has changed course in recent years. Sources familar with the airline’s strategy say that the management, led by low-profile chief executive Goh

Choon Phong, is pushing ahead with a “portfolio” strategy that revolves around increasing the company’s exposure to the fast-growing Asia Pacific and the low-cost markets. By diversifying its revenue streams and creating new ones, like the Indian joint venture, Mr Goh and his team plans to reduce SIA’s dependence on the flagship carrier over the medium term, say investors and analysts. “They just have to address why their brand should still be at a premium. They still have a lot to do to actually get investors to be a bit more confident of their prospects,” said Kristy Fong, an investment manager at Aberdeen Asset Management, which holds a stake of about 4 percent in SIA. Despite the near term pressure on profits, SIA’s cash pile of US$4.5 billion – the biggest among Asian airlines – means that it has the ability to invest in existing and new airlines, the Centre for Aviation said in a report. The Indian venture has its challenges. SIA must successfully chart a course around India’s political and bureaucratic minefield for regulatory approval. Under existing regulations, it must serve the domestic market for five years before it can operate international flights. Taxes and airport fees are high, and profitability rare for the country’s airlines. SIA’s competitors in the fullservice segment are beleaguered Air India, which survives only because of the hundreds of millions of dollars New Delhi has pumped into it, and Jet Airways, in which Etihad Airways is buying a minority stake. Reuters

2013-2014 Free Seasonal Influenza Vaccination Programme In line with the recommendations of the World Health Organization, starting today, the Health Bureau will offer free seasonal influenza vaccination for the following high-risk populations with details as follows:

Eligible Groups Detailed Arrangement

Klaus Wille

People between the age of 6 months and less than 18 years Children who have not attended nursery school or persons not studying in Macao should be vaccinated at Health Centres, vaccination point of Kiang Wu Hospital, Outpatient Department of MUST Hospital or Workers’ Clinic

yanmar needs “responsible investment” of foreign capital as it seeks to accelerate economic development, opposition leader Aung San Suu Kyi said. The country also needs to improve its rule of law and democratic reforms must take place soon, not by 2015 when general elections will be held, Ms Suu Kyi said at a conference in Singapore Friday. “If you are going to try to revive the economy, you need capital,” Suu Kyi said, when asked whether

Myanmar opposition leader Aung San Suu Kyi

investors should wait for more political stability before committing resources to the country. “I wouldn’t advise you to draw out. I would like you to continue your investments. But make them as responsible as possible.” Myanmar’s shift to democracy after five decades of military rule has attracted interest from companies including Google Inc, Coca-Cola Co and Unilever Plc, while MasterCard Inc last September became the first payments network to issue a licence to a bank in the country. Chinese and Japanese companies are also investing in the nation, which borders India, China and Thailand. Still, the investment scene in the Southeast Asian nation “is not as bright as people had hoped it would be” and investors “are not sure that their investment will be safe and secure because there isn’t a rule of law,” Ms Suu Kyi said. The country needs clean courts, a more efficient law enforcement and an independent judiciary, which is “one of the first requirements for the rule of law,” Ms Suu Kyi said. Establishing a firmer rule of law will include changes to the Myanmar constitution, she said, without giving details. Bloomberg News

People aged 60 or above To be vaccinated at Health Centres, vaccination point of Kiang Wu Hospital, Outpatient Department of MUST Hospital or Workers’ Clinic Patients with chronic cardiovascular, pulmonary, metabolic, renal or immunocompromised diseases Patients being followed-up in Conde de São Januário General Hospital shall receive vaccination with prescription by their attending physician; others may visit Health Centre for vaccination Health care workers Governmental and non-governmental medical organizations with relatively large number of staff to get vaccinated themselves, with vaccines offered by the Health Bureau. Other medical professionals holding valid Macao SAR Resident Identity Card, Health Bureau patient card and Health Bureau licence renewal receipt can be vaccinated at Health Centres Residents and staff of residential institutions Personnel of Health Centres will visit the institutes to provide vaccination services according to the information provided by the Social Welfare Bureau Others for whom vaccination is considered necessary by the Health Bureau After the Health Bureau has contacted respective entities for name lists, vaccination will be arranged by Health Centres Children, pupils, teachers and staff members of local nursery schools, kindergartens, primary and secondary schools Personnel of Health Centres will visit nurseries/schools to provide mass vaccination services Children in nursery schools, pupils, teachers and staff members of kindergartens, primary and secondary schools who failed to join the mass vaccination may, starting 2nd December 2013, get vaccination at Health Centres, vaccination point of Kiang Wu Hospital, Outpatient Department of MUST Hospital or Workers’ Clinic. All eligible persons should hold a valid identity document issued by the Macao SAR and a Health Bureau patient card; for those who do not have a patient card, please contact a Health Centre for application. 1) Community organizations such as community centres and elderly homes may contact Health Centres, mass vaccination will be arranged accordingly when human resources condition permits. Aside from the above mentioned specific groups, members of the public who wish to reinforce their immunity against influenza are advised to consult their private doctors for prescription and vaccination. Due to the frequent mutation and antigenic drift of influenza viruses, the vaccination should be repeated every year to maintain adequate immunity. Health Bureau, 23rd September 2013.

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September 23, 2013 April 19, 2013

Asia

Indonesia to sign China forex swap deal Deal to be signed during Xi Jinping visit aimed at helping bolster rupiah

ndonesia next month will sign a bilateral currency swap deal with China worth at least US$15 billion, an industry ministry official said on Friday, a move aimed at bolstering the ailing rupiah. The swap agreement will be signed by the central banks of the two countries during an Indonesia visit by Chinese president Xi Jinping that begins October 2. “We just got government-togovernment cooperation (...) that is a US$15 billion currency swap to strengthen our foreign exchange reserves and our currency,” Agus Tjahajana, director general of the international industry cooperation at Indonesia’s Industry Ministry, told Reuters. Earlier, Trade minister Gita Wirjawan was quoted by the Jakarta Post as saying the deal with China would be for up to US$40 billion.

The rupiah is this year’s worst performing currency in Asia

The officials provided no details, including what terms China might require. A spokesman at Bank

Indonesia, the central bank, declined to comment. In 2009, China and Indonesia agreed to a 100 billion yuan

(US$16.34 billion) bilateral swap deal, which expired last year. Late last month, Bank Indonesia renewed a swap deal with Tokyo. Traders in Jakarta said news of the coming swap did not impact the rupiah on Friday, when dollar demand from Indonesian companies kept pressure on it. The rupiah has been battered by general capital flight from emerging markets in recent months. It is this year’s worst performing currency in Asia, having lost nearly 15 percent against the United States dollar. The Jakarta Post said China and Indonesia, Southeast Asia’s largest economy, would also sign business deals worth US$20 billion during Mr Xi’s visit. No details were given, but China is expected to unveil investments in mineral smelters. 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.

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

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September 23, 2013 April 19, 2013

Asia

Palm oil may tumble on growing supply Palm is poised for a third annual loss, the worst run since at least 1996

alm, the world’s most-used cooking oil, may slump to the lowest level since 2009 by January as global supplies of edible oils expand and crude oil weakens, said Dorab Mistry, director at Godrej International Ltd. Futures will probably retreat to 2,000 ringgit (US$629) a metric ton in Kuala Lumpur if Brazil and Argentina, the largest soybean growers after the United States, harvest bigger crops and Brent crude drops below US$100 a barrel, Mr Mistry told an industry conference in Mumbai yesterday. Prices will not fall below 2,200 ringgit in the next few weeks and will trade between 2,200 and 2,400 ringgit, he said. Palm, used in everything from candy to detergents, is poised for a third annual loss, the worst run since at least 1996, according to data compiled by Bloomberg. Lower cooking oil prices may help extend a drop in global food costs measured by the United Nations to the lowest in more than a year. World palm stockpiles will surge 17 percent to a record 9.2 million tons by the end of 2013-2014 as demand expands 4.5 percent, the least in 12 years, the United States Department of Agriculture estimates. “The fundamentals of the oilseed and vegetable oils complex are clearly

Palm oil is used in everything from candy to detergents

bearish,” said Mr Mistry, who has traded vegetable oils for more than three decades. “We cannot expect a bull market in vegetable oil prices any time in 2013-2014 unless we have adverse weather.” Palm for delivery in December closed at a five-week low of 2,300 ringgit on Bursa Malaysia Derivatives Friday. Futures had the biggest monthly gain in August since December 2010 as crude rose to a two-year high, a weak ringgit boosted Malaysian

Asia ‘far’ from 97 crisis says Singapore’s Lee But territorial disputes are potential hotspots, says prime minister Sharon Chen

sia’s fundamentals are strong and “far” from the conditions before the 1997 regional financial crisis, Singapore’s prime minister Lee Hsien Loong said. “I do not believe that we are in the situation of the Asian financial crisis,” Mr Lee said in his speech in the city state. The region is “between challenges but overall, we’re in a stable position,” he said. Mr Lee said the prospects of a tapering in the United States quantitative easing led to an outflow of capital and currency depreciation in Asia, with investors doubting the sustainability of the growth in emerging markets. He added the situation has stabilized even as risks remain. Emerging markets recovered after

United States policy makers said this week they want more evidence of an economic recovery before paring its US$85 billion-a-month quantitativeeasing program. Federal Reserve chairman Ben Bernanke had said in June the central bank may start curbing stimulus this year and end it in 2014 if the economy finally achieves sustainable growth. Territorial disputes in the South China Sea, Korean peninsula and terrorism are among “potential hotspots” for Asia, Mr Lee said, posing a risk to stability. In the longer term, the “single biggest determinant” of regional security is China’s peaceful development amid a shift in global balance, he said. Bloomberg News

exports and hot, dry weather hurt the United States soybean crop. Global vegetable oil supplies will increase by 7.1 million tons in the marketing year beginning October 1, more than the 5.5 million-ton expansion in demand for food and fuel, said Mr Mistry. High crude prices may boost demand for vegetable oil as biofuel by as much as 2.5 million tons, while demand for food will increase by 3 million tons, he said. “Despite the expansion of demand due to biofuels I do not expect a bull

market,” said Mr Mistry. “As a result of the continued high prices of Brent crude oil and the spread, I believe crude palm oil futures will not trade below 2,200 ringgit over the next few weeks despite rising production.” Stockpiles in Malaysia and Indonesia will begin to rise from September and increase for the next several months, and palm will face more competition from products such as sunflower and soybean oils, said Mr Mistry. Bloomberg News

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September 23, 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 23, 2013 April 19, 2013

Opinion Business

wires

Leading reports from Asia’s best business newspapers

The best, brightest, and least productive? Robert Shiller

Professor of Economics at Yale University

Myanmar Times The Directorate of Investment and Company Administration plans to expand its workforce by almost 40 percent to cope with its growing workload. It will also open offices in regional and state capitals, with the first of these new branch offices to open in Mandalay in April 2014. The new recruits are needed to process the growing number of company registration applications and investment proposals from foreign and local companies, a directorate official said.

Korea Herald The ratio of South Korea’s total debt to its economic output rose to a record high in the second quarter of this year as debt grew at a faster pace despite the slowing economy, central bank data showed. The combined debt of households, companies and the government reached 3,739.4 trillion won (US$3.4 trillion) as of the end of June, according to the data compiled by the Bank of Korea.

Thanh Nien Ho Chi Minh City-based property developer and retail distributor C.T Group has submitted a proposal to Myanmar for setting up an industrial zone in that country. Its executives submitted the plan at a meeting with vice president Nyan Tun in the Myanmarese capital Nay Pyi Daw in late August, the company said in a press release. The proposed Vietnam-Myanmar Industrial Zone in Yangon will offer Vietnamese firms an opportunity to set up plants.

Straits Times The majority of suburban private home transactions in Singapore were above US$1,000 per square feet in the second quarter of this year, according to Urban Redevelopment Authority (URA) data compiled by property consultancy OrangeTee. The numbers underline a trend that has been increasingly apparent for the past two years – buyers will shrug off high prices as long as the overall quantum is seen as affordable. That could mean pa ying up to US$1.2 million for a suburban private home, consultants said.

re too many of

our most talented people choosing careers in finance – and, more specifically, in trading, speculating, and other allegedly “unproductive” activities? In the United States, 7.4% of total compensation of employees in 2012 went to people working in the finance and insurance industries. Whether or not that percentage is too high, the real issue is that the share is even higher among the most educated and accomplished people, whose activities may be economically and socially useless, if not harmful. In a survey of elite US universities, Catherine Rampell found that in 2006, just before the financial crisis, 25% of graduating seniors at Harvard University, 24% at Yale, and a whopping 46% at Princeton were starting their careers in financial services. Those percentages have fallen somewhat since, but this might be only a temporary effect of the crisis. According to a study by Thomas Philippon and Ariell Reshef, much of the increase in financial activity has taken place in the more speculative fields, at the expense of traditional finance. From 1950 to 2006, credit intermediation (lending, including traditional banking) declined relative to “other finance” (including securities, commodities, venture capital, private equity, hedge funds, trusts, and other investment activities like investment banking). Moreover, wages in “other finance” skyrocketed relative to those in credit intermediation. We surely need some people in trading and speculation. But how do we know whether we have too many? To some people, the question is a moral one. Trading against others is regarded as an inherently selfish pursuit, even if it might have indirect societal

benefits. But, as economists like to point out, traders and speculators provide a useful service. They sort through information about businesses and (at least some of the time) try to judge their real worth. They are thus helping to allocate society’s resources to the best uses – that is, to the most promising businesses. But these people’s activities also impose costs on the rest of us. Indeed, a 2011 paper by Patrick Bolton, Tano Santos, and José Scheinkman argues that a significant amount of speculation and deal-making is pure rent-seeking. In other words, it is wasteful activity that achieves nothing more than enabling the collection of rents on items that might otherwise be free. The classic example of rentseeking is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is helping nobody in any way, directly or indirectly, except himself. All he is doing is finding a

We surely need some people in trading and speculation. But how do we know whether we have too many?

way to make money from something that used to be free. If enough lords along the river follow suit, its use may be severely curtailed. Those in “other finance” often engage in similar behavior. They skim the best business deals, creating a “negative externality” on those who are not party to them. If the bad assets that they reject – for example, the subprime mortgage securities that fueled the 2008 financial crisis – are created anyway and foisted on less knowledgeable investors, financiers contribute no more to society than a lord who installs a chain across a river. In a forthcoming paper, Patrick Bolton extends this view to look at bankers and at the Glass-Steagall Act, which forbade commercial banks from engaging in a wide variety of activities classified as “investment banking.” Ever since the Gramm-LeachBliley Act of 1999 repealed Glass-Steagall, bankers have acted increasingly like feudal lords. The Dodd-Frank Act of 2010 introduced a measure somewhat similar to the Glass-Steagall prohibition by imposing the Volcker Rule, which bars proprietary trading by commercial banks, but much more could be done.

To many observers, GlassSteagall made no sense. Why shouldn’t banks be allowed to engage in any business they want, at least as long as we have regulators to ensure that the banks’ activities do not jeopardize the entire financial infrastructure? In fact, the main advantages of the original Glass-Steagall Act may have been more sociological than technical, changing the business culture and environment in subtle ways. By keeping the deal-making business separate, banks may have focused more on their traditional core business. Bolton and his colleagues seem to be right in many respects, though economic research has not yet permitted us to estimate the value to society of so many of our best and brightest making their careers in the currently popular kinds of “other finance.” Speculative activities have plusses and minuses, much that is good and some that is bad, and these are very difficult to quantify. We need to be very careful about regulations that impinge on such activities, but we should not shy away from making regulations once we have clarity. © Project Syndicate

September 23, 2013

Closing Fed bond-buying taper possible next month

AT&T sees smartphone sales steady

Federal Reserve Bank of St. Louis president James Bullard, a voter on policy this year who has backed record stimulus, said the Fed may make a small cut to bond purchases in October after its narrow decision last week not to reduce accommodation. “That was a borderline decision” after “weaker data came in,” Mr Bullard said Friday. “The committee came down on the side of, ‘Let’s wait.’” Mr Bullard called October a “live meeting,” because “it’s possible you could get some data that… could make the committee be comfortable with a small taper.”

AT&T Inc, the second-biggest United States wireless carrier, said it will report third-quarter smartphone sales similar to the 6.8 million it had from April to June, aided by new upgrade programmes. The result will be a record for any third quarter in AT&T’s history, the company said. Fourth-quarter smartphone upgrades will decline from a year earlier, though, because some customers went ahead and got new phones already. AT&T expect a new option to pay for phones and tablets on an installment plan to help it expand its base of smartphone users by 1 million.

Milk makers to get state support C

Macau’s mass market growing strongly

PIMCO warms to Macau casino bonds Investment firm says they are good way to invest in Chinese consumer story Michael Grimes

michael.grimes@macaubusinessdaily.com

ne of the world’s largest money managers says it favours bonds linked to Macau gaming operators. “We believe Macau offers investors an attractive way to invest in the growth of the Chinese consumer,” said Mark R. Kiesel, global head of corporate bonds for Pacific Investment Management Co LLC in a report. The firm, commonly referred to simply as ‘PIMCO’, is regarded as an influential voice in the investment community. PIMCO says it and affiliates had US$1.97 trillion (15.73 trillion patacas) in assets under management as of June 30. It uses mutual funds, private funds and separate accounts, plus a variety of investment styles, on behalf of institutional and private clients. The company says it is also interested in other Asian gaming markets. Mr Kiesel wrote: “We believe a rising middle-class Chinese consumer will lead to significant and sustainable double-digit growth

in the mass market in Macau. We similarly believe that growing wealth throughout Asia, combined with improving infrastructure, will lead to increasing demand from Asian consumers for both Macau and Singapore gaming.” Casino company bonds have in the past been considered by investors as below investment grade. But investors are currently looking for higher yields away from the sovereign markets – via corporate bonds that don’t suffer from the kind of accounting and corruption scandals seen recently in mainland China companies. Las Vegas Sands Corp sold US$600 million in convertible bonds in 2009 prior to the flotation in Hong Kong of its Macau unit Sands China Ltd. The bonds had a coupon of between nine percent and 15 percent said analysts at Morgan Stanley at the time. Although he doesn’t name the companies, Mr Kiesel adds: “PIMCO is invested in several gaming companies with a significant

presence in Asia, and we remain constructive on the industry. We believe that the above-trend growth will continue for many companies in the sector, leading to ratings upgrades for bond investors. PIMCO, based in Newport Beach, California, in the United States, was founded in 1971 by William H. Gross. Morningstar – a Chicago, Illinoisbased research house – named Mr Gross and his investment team Fixed Income Manager of the Decade for 2000-2009. PIMCO’s co-chairman is Mohamed A. El-Erian, formerly of Harvard Business School, and who also managed Harvard University’s endowment fund. Andrew Balls, the head of the firm’s European investment team, is brother of Ed Balls, currently the United Kingdom’s shadow minister for finance and a cabinet member in former prime minister Gordon Brown’s government from 2007 to 2010. PIMCO Asia has had an office in Hong Kong since 2006, and in Singapore since 1996.

hinese milk powder makers, including Inner Mongolia Yili Industrial Group Co Ltd and China Mengniu Dairy Co Ltd, are set to get 30 billion yuan (US$4.90 billion) in official funds to support sector consolidation, media said. As well as Yili and Mengniu, the first group of firms to benefit would include Feihe International Inc, Heilongjiang Wondersun Dairy Co Ltd and Treasure of Plateau, the official China Business Journal said in its Saturday edition, citing an unidentified source. Authorities have said they want to consolidate the domestic milk powder sector to increase the ability of companies to compete with international rivals who dominate the lucrative premium end of China’s US$12.4 billion infant formula market. Officials at Yili, Mengniu and Feihe were not immediately available for comment. Chinese milk powder firms would gain the support in the form of government subsidies, funds from China Development Bank and favourable tax policies, the China Business Journal said. The total amount would be about 30 billion yuan, it said. Milk powder is a sensitive topic in China after a 2008 scandal involving milk tainted with melamine led to the deaths of at least six infants and made many thousands ill. That hit the reputation of domestic dairy firms and boosted the market share of imported brands such as Danone SA, Nestle SA, Mead Johnson Nutrition Co and Abbott Laboratories. But foreign milk powder has recently come under the spotlight, with China temporarily banning some dairy products from New Zealand’s Fonterra Co-operative Group Ltd, after a scare. Reuters

Milk powder sensitive topic in China after 2008 scandal over milk tainted with melamine