Macau Business Daily, October 8, 2013 by Business Daily

Visa-free travel to Taiwan ‘imminent’ T

aiwan is likely to announce today visa-free entry for some Macau residents, a source has told Business Daily. The source, who asked not be identified because he is not authorised to speak to the news media, said Taiwan’s Mainland Affairs Council Deputy Minister Steve Lin Chu-chia was expected to announce at a public event in Macau tonight changes in visa requirements for Macau residents. The Mainland Affairs Council is in charge of Taiwan’s policy on the rest of Greater China. Macau has

repeatedly asked Taiwan to let the city’s residents visit the island without a visa. In November 2011 Macau government spokesman Alexis Tam Chong Weng said: “Taiwan visitors don’t need one when they reach Macau. It’s not fair.” Four months earlier the minister that headed the Mainland Affairs Council at the time, Lai Shinyuan, said Taiwan would consider exempting Macau residents from visa requirements. Our source said the exemption had been delayed by “political considerations”.

Property bubble faces 30 pct correction: Stanley Au Page 3

More on page 3

Year II

Number 387 Tuesday October 8, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

Vitor Quintã

MOP 6.00

April 19, 2013

Chief Exec puts Ma clan centre stage www.macaubusinessdaily.com

The grandson of one of Macau’s traditional powerbrokers is Chief Executive Fernando Chui Sai On’s pick as a directly appointed legislator. Ma Chi Seng is the only new name for one of the seven Legislative Assembly seats that are within Mr Chiu’s gift. The appointment was published in the Official Gazette yesterday. The choice of 35-year-old Mr Ma, a grandson of industrialist Ma Man Kei, will bring balance, as far as relations between Macau’s elite families are concerned, political observers told Business Daily. There was previously a feeling that the Ho and Chui families – led by former chief executive Edmund Ho Hau Wah and by Chui Sai On – were “suppressing the Ma family’s political role”, says Larry So Man Yum. The professor at the Macao Polytechnic Institute’s School of Public Administration believes Mr Ma’s appointment is one way to prove to Beijing the authorities here “are being fair to all the traditional, elite families”. Page 2

STDM feared others’ murk, over La Scala The flagship firm of gaming entrepreneur Stanley Ho Hung Sun feared “benefits” had changed hands between other people over a plot near Macau International Airport – immediately after a 2005 government tender process for the land – a Macau court heard yesterday. The word “benefits” was used in an STDM letter read out by an official from the Commission Against Corruption. There was no clarification from the official on what was meant. Page 4

Hackers 3-star hotel lured by city’s rates jump growing fame 15 pct y-o-y There will be more hackers targeting Macau in the future as the city’s reputation grows worldwide, an expert says. He suggests it’s time for telecommunications firms to step up their defences. “As Macau is becoming more famous as a global leisure tourism centre, more people abroad – including hackers – will be aware of Macau’s existence,” said Adam Iao, president of the Macau Computer Society. Page 5

The average daily room rate for three-star hotels leapt by nearly 15 percent year-on-year in August according to data from the Macau Hotel Association. The average daily rate for three-star hotel accommodation was 1,213 patacas (US$152). That was 17 percent more than the supposedly superior four-star variety, where rates averaged 1,033 patacas per night. In the eight months to August 31, three-star rates rose 6.74 percent year-on-year. Page 6

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October 7

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October 8, 2013

Macau

Ma family finds its way back into the spotlight Political analysts think worker-friendly legislation will be a tough sell in the new, pro-business Legislative Assembly Vítor Quintã

vitorquinta@macaubusinessdaily.com

a Chi Seng is the only newcomer among the Legislative Assembly members that Chief Executive Chui Sai On appointed yesterday. The appointment of 35-year-old Mr Ma, grandson of industrialist Ma Man Kei, will strike a balance among the families that make up the traditional establishment in Macau, observers told Business Daily. A professor in the Macau Polytechnic Institute’s School of Public Administration, Larry So Man Yum, said there had been a feeling that the Ho family led by former chief executive Edmund Ho Hau Wah and the Chui family led by the present chief executive were “suppressing the Ma family’s political role”. Mr So believes Mr Ma’s appointment is one way to prove to Beijing that “they are being fair to all the traditional elite families”. Letting the Ma family in became urgent when Ma Iao Lai was surprisingly left out of the Standing Committee of the Chinese People’s Political Consultative Conference in March. Ma Iao Lai had been expected to replace his grandfather, 94-yearold Ma Man Kei, who stepped down

after 20 years as vice-chairman of the advisory body. University of St Joseph political scientist Eric Sautedé said Ma Chi Seng’s appointment “proves that he has political ambitions.” Public broadcaster TDM’s Chinese-language radio service quoted Mr Ma as saying he would take up “ issues related to young people”.

Vested interests Mr So said the government could argue that having Mr Ma around represented “a bit of diversification”, given that the Ma family did not have much to do with the gaming business. But he said the appointment of Mr Ma had an ulterior purpose. “In the end it just ensures that all vested interests are protected,” Mr So said. This would mean that all Macau’s elite would support Mr Chui’s bid for re-election next year. He said it was unsurprising that appointed legislators were part of the economic establishment. “Grassroots have never been included in the appointed system,” he added. Mr So thinks any bill to improve the lot of workers will face bigger

Ma Chi Seng is the grandson of industrialist Ma Man Kei

obstacles in the new assembly. Businessmen-cum-legislators will “definitely pop up and reject this kind of proposal, claiming, ‘They are trying to destroy our economy’”, he said. The government began consulting the public last month about a proposal for a minimum wage of between 23 patacas (US$2.90) and 30 patacas an hour for all cleaners

‘Silent majority’ accept election result: survey Nearly 78 pct ‘satisfied’ or ‘neutral’ on issues such as free meals for voters, suggests Macao New Vision Association poll Tony Lai

tony.lai@macaubusinessdaily.com

acau residents appear generally satisfied with the results and fairness of the Legislative Assembly election held on September 15, claims a survey. The poll involved telephone interviews conducted with 817 adult residents between September 23 and 25. It was organised by Macao New Vision Association. Some of the officials from the association are local academics. The public quizzed in the survey were asked if they were ‘satisfied’, felt ‘average’, were ‘dissatisfied’ or had ‘no opinion’ regarding the fairness of the election, and asked supplementary questions on their reasons. According to a press conference given by the association yesterday, approximately 36.6 percent of respondents were ‘satisfied’ with the conduct of the election, while slightly more than 41 percent indicated

About 55 percent of 276,034 voters turned up at the poll stations this year

feeling an ‘average’ response. About a third of respondents thought there was “improvement” in this year’s election fairness while nearly 40 percent said the situation was similar to 2009. Lou Shenghua, president of the association, told Business

Daily he was “confounded” by the survey results. Mr Lou, a public administration scholar from Macao Polytechnic Institute said he had expected a majority would be ‘unsatisfied’ with the result and would feel activities related to vote buying had worsened.

and security guards. Mr So thinks “it’s a little farfetched” to imagine the new assembly passing any bill on a minimum wage for all workers. Rather, he said, the assembly would make it “a little easier” for the government to let in more cheap migrant labour. In contrast, Mr Sautedé believes the two assembly members belonging to José Pereira Coutinho’s ticket and the two members belonging to the General Union of Neighbourhood Associations ticket will maintain the balance in the assembly between employers and employees. He said the union had acted as “some kind of intermediary” in ensuring employees of bankrupt bus operator Reolian Public Transport Co Ltd got their pay. “They will continue to do that,” he said. Mr Sautedé predicts that Mr Coutinho, president of the Macau Civil Servants Association, and his running mate, Leong Veng Chai, will “put a lot more focus on grassroots issues”. Among the other members of the assembly, businessman Fong Chi Keong and the Chief Executive’s cousin, Chui Sai Peng, have swapped seats, in effect. Mr Fong is now an appointed member and Mr Chui now represents the business constituency. “It’s a bit sad,” said Mr Sautedé. He said Mr Fong had been “heavily criticised for not being sophisticated enough to be a legislator”. The chief executive told reporters on Sunday, before his appointments were announced, that his choices had been based on service rendered to the people and “society’s general interests”. The head of the Chinese Educators Association of Macau, Ho Sio Kam, loses his appointed seat now that the head of Hou Kong School, Chan Hong, has been elected unopposed as the first representative of the newly created social services and education constituency.

He suggested the result appeared to reflect the “silent majority”. “They [members of the public] usually do not reflect their opinions unless casting their ballots or being asked by survey, so their opinions have not been seen in the media or heard,” he said. Only 18 percent of respondents thought the fairness of the election process had worsened due to allegations of vote buying, the survey indicated. The study also found one-third of those polled regarded free meals or gifts offered by associations linking to election tickets as “indirect” vote buying. Nearly 40 percent said it was difficult to define the acceptable boundaries of such behaviour. Mr Lou blamed this on the “ambiguous” attitude of the Election Commission and thinks the current administration should strengthen regulations in this area in time for the next election. But more than 43 percent of the respondents indicated satisfaction with the work of the commission, with only 12.5 percent dissatisfied. Among those unhappy with the commission’s supervision, a common complaint was about the noise generated by blaring music and slogans broadcast by trucks and vans travelling around the city. Some respondents said the commission should put stricter measures in controlling noise during the election campaign. The sampling error of the entire survey was plus or minus 3.5 percent said the association.

October 2013 April 19,8,2013

Macau

Taiwan set to make visits much simpler Political considerations have delayed the exemption of Macau residents from visa requirements Vítor Quintã

vitorquinta@macaubusinessdaily.com

fter much delay, Taiwan is likely to announce today that it will allow some Macau residents to visit the island without visas, a source has told Business Daily. The source, who asked not be identified because he is not authorised to speak to the news media, said Taiwan’s Mainland Affairs Council Deputy Minister Steve Lin Chuchia was expected to announce at a public event tonight changes in visa requirements for Macau residents. The Mainland Affairs Council is in charge of Taiwan’s policy on the rest of Greater China. Macau has repeatedly asked Taiwan to let the city’s residents visit the island without a visa. In November 2011 Macau government spokesman Alexis Tam Chong Weng said: “Taiwan visitors don’t need one when they reach Macau. It’s not fair.” Four months earlier the minister that headed the Mainland Affairs Council at the time, Lai Shinyuan, said Taiwan would consider exempting Macau residents from visa requirements. Our source said exemption had been delayed by “political considerations”. The law in Taiwan restrict visits by Chinese born in the mainland. This makes it tricky for the authorities on the island to deal with requests by Macau residents for visas, because almost half of the city’s residents were born in the mainland, according to the 2011 census. The source said Taiwan would probably begin by allowing Macau permanent residents easier access to the island.

A Macau passport holder must have a visa to visit Taiwan, but can get one online for nothing

Since 2010 Taiwan has allowed Macau passport holders to obtain visas online. A visa issued online costs nothing, is valid for three months and allows the holder to stay on the island for one month. In the first month after Taiwan began issuing visas online the number of Macau people visiting the island was more than double what it was a year earlier.

Learning the rules Exemptions from visa requirements could increase travel between Macau

and Taiwan even more. This is because the number of air services connecting them has grown since 2010, with the introduction of direct flights from Taichung to Macau in April last year. In May the Taiwan government took a series of measures meant to promote tourism and attract more visitors from elsewhere in Greater China, in an effort to give the island’s slowing economy a boost. Our source said that this month Taiwan would begin giving multipleentry visas to Macau students studying at universities on the island. The visas would be valid for three years and cost nothing, the

source said. In the last academic year almost 5,000 Macau students were enrolled in universities in Taiwan, according to the Taipei Economic and Cultural Office in Macau. Another 1,100 Macau students have places at Taiwan universities in the new academic year. Some Macau students have complained about having to report to their universities and to the police whenever they leave Taiwan, and about having to pay visa fees every time they return. In August Mainland Affairs Council Minister Wang Yu-chi said during a visit to Macau that this problem could be solved this year. The director-general of the Taipei Economic and Cultural Office in Macau, Lu Chang-shui, said in May that higher education was one of the strongest links between Taiwan and Macau. Mr Lu said 95 percent of Macau students that graduated from Taiwan universities returned to Macau to work.

KEY POINTS Taiwan set to announce visa exemptions Macau permanent residents first in line Exemptions should help Taiwan tourism

Home prices may crash next year: Stanley Au B

anking executive Stanley Au Chong Kit believes the city has a property bubble that will burst next year and wipe off up to 30 percent of home prices. Real estate agencies still see bright prospects in the city’s housing market but the chairman of Delta Asia Financial Group believes the market “is already overheated”. Home mortgage payments accounted for over half of the monthly income of many households here, he told the Chinese-language newspaper Macao Daily News during a trip to South Korea. These households will be severely hit when the interest rates rebound, as soon as the United States Federal Reserve begins to ease its US$85 billion (678.9 billion patacas) bond-buying programme, said Mr Au. Macau’s six-month benchmark for interest rates has remained below

0.6 percent, as the pataca is indirectly pegged to the U.S. dollar. Mr Au expects home prices to plunge by “20 percent to 30 percent” and warns it could happen as early as next year. The banking executive said his prediction also took in account the recent decline in Hong Kong home prices and soaring bad debt incurred by the governments of some Chinese provinces. Mr Au also believes the city’s gaming revenue will be hit next month, after a key Communist Party meeting in which the new leaders appointed in March will lay down the country’s economic agenda for the next decade. Savills (Macau) Ltd predicted last week that home prices would continue to grow annually by 15 percent to 20 percent until 2017 due to growth in gaming and tourism. T.L.

Home prices may slump by at least 20 percent, Stanley Au predicts

October 8, 2013

Macau Ip Son Sang leads Lower Court Judge Ip Son Sang, chairman of the Election Commission for last month’s Legislative Assembly election, has been appointed president of the Lower Court and the Administrative Court starting October 15. Judge Ip will replace Tong Hio Fong, who will become the ninth judge at the Court of Second Instance. The decision was made by Chief Executive Fernando Chui Sai On and published in yesterday’s Official Gazette. The opening ceremony of the new judicial year is scheduled for October 17, the Portuguese-language Radio Macau reported yesterday.

STDM thought La Scala land sale smelled fishy Stanley Ho’s company asked whether ‘benefits’ had been passed on Tony Lai

Sold at a loss

tony.lai@macaubusinessdaily.com

he flagship company of gaming tycoon Stanley Ho Hung Sun feared that “benefits” were passed on right after the auction in June 2005 of land where La Scala, a high-end housing development, was to have been built, the Court of First Instance was told yesterday. The court was also told that government lost some 800 million patacas (US$100 million) on the sale of the land. The court resumed yesterday the trial of Hong Kong businessmen Joseph Lau Luen Hung and Steven Lo Kit Sing, who are charged with bribery and money laundering. Both are accused of paying Ao Man Long, then secretary for transport and public works, HK$20 million (US$2.5 million) to ensure the success of their bid for the land, which is near the airport. Mr Ao has already been convicted of corruption and is now serving a prison sentence of 29 and a half years. At yesterday’s hearing the Commission against Corruption presented a letter written by Mr Ho’s Sociedade de Turismo e Diversões

Mr Io explained that it was uncommon to include design proposals along with price as a criterion. The prosecution has alleged that Mr Lau and Mr Lo got information on the tender much earlier, in February 2005, after bribing Mr Ao. In the letter STDM said the land had been idle for more than 10 years and asked why Lei Pou Fat was then rushing to sell it, even at a loss.

de Macau (STDM) SA in July 2005 in which the company complained about the bidding process to Lei Pou Fat Development Co Ltd, the company that oversaw the land. The government was the majority owner of Lei Pou Fat. STDM, Macau International Airport Co Ltd and Macau businessman Ng Fok were also shareholders in the company.

Rush to sell Commission against Corruption senior investigator Io Fu Chun quoted the letter as saying: “This tender has always been clouded with controversies and no grant should be allowed.” The letter was written before the result of the tender process was made known. “Has Jones Lang LaSalle provided any benefits to anybody? Jones Lang should have skipped the bidding,” Mr Io quoted the letter as saying. Jones Lang LaSalle and STDM were two of the three bidders for the land. Jones Lang LaSalle represented Moon Ocean Ltd in the bidding. Mr Lo owned Moon Ocean and Mr

Joseph Lau has again reshuffled his legal team

Lau, chairman of Hong Kong-listed developer Chinese Estates Holdings Ltd, later bought the company. In the letter STDM complained that it had only 10 days to prepare its bid and that the requirements for tendering did not conform to the government’s previous land policies.

The Commission against Corruption says the government lost money on the sale of land for La Scala

Lei Pou Fat sold the land to Moon Ocean for 1.37 billion patacas in July 2005. Mr Io said the five companies that owned the land – and were overseen by Lei Pou Fat – had acquired it in the 1990s by ploughing 2 billion patacas into the development of Macau International Airport. “This sale made the government lose some 800 million patacas,” he said. He told the court that Ao and Mr Lo had talked before the tender. Mr Lo’s “assistant”, Lam Kai Tai, and a friend of Mr Ao, Ho Meng Fai had been the intermediaries, he said. Mr Lo’s defence counsel argued that there was no evidence that Mr Lam had served as an assistant to Mr Lo. Mr Io also presented documents showing that Mr Ao was the “highest decision maker” for Lei Pou Fat, despite the defence’s assertions that the company was independent of the government. Mr Lau was represented yesterday by new counsel, Luís Melo. Mr Melo replaced David Azevedo Gomes, who had been appointed in September when Mr Lau reshuffled his team of lawyers. Mr Melo declined to answer questions from reporters yesterday.

October 8, 2013

Macau

Hackers lured by city’s growing fame Telecom firms should adopt higher standards for services and products, expert says Tony Lai

tony.lai@macaubusinessdaily.com

here will be more hackers targeting Macau in the future as the city’s reputation grows worldwide, an expert says, so it’s time for telecommunications firms to step up their defences. “As Macau is becoming more famous as a global leisure tourism centre, more people abroad – including hackers – will be aware of Macau’s existence,” said Adam Iao, president of the Macau Computer Society. “What do hackers want? Either money or fame,” he said at a technology event yesterday. “So there will definitely be more attacks as Macau is getting famous.” His comments came after Companhia de Telecomunicações de Macau SARL (CTM), the city’s largest telecom company, faced a “suspected” cyber-attack on Sunday night. CTM detected “high volume of irregular overseas traffic” flowing into its network and affecting “some Internet users”, the company said in a statement yesterday. The firm also faced a similar problem a year ago. “It was the first time for the company to experience such high volume of data traffic caused by a cyber-attack which

It is impossible to have no cyber security incidents. What we can do is to minimise the [number of] attacks Adam Iao, Macau Computer Society’s president

resulted in slow Internet connection,” CTM said at the time. “It is impossible to have no cyber security incidents. What we can do is to minimise the [number of] attacks,” Mr Iao said. “There are now many [certification] standards concerning cyber security which are widely enforced around the world for some time like ISO [International Organisation for

Standardisation] and BS [British Standards],” said the expert. “But the Macau institutions do not have a clear grasp about such certification standards, probably because Macau was not an international city in the past,” he added. Mr Iao said Macau’s telecom companies only seek this type of certification when they have to carry out business in overseas markets.

“But if Macau is getting more famous and more internationalised (…) the companies should also put more focus on these standards,” he said. The expert is sure the government already reviews the security standards of the services and products offered by telecom firms when renewing licences or granting new ones. But the government could list out more clearly what international standards the providers must have, he said. Mr Iao said the telecom firms must continue to improve their services and products given that this type of certification must be renewed regularly. Cyber security has been a recent growing concern in the region, particularly after Edward Snowden, a former United States’ National Security Agency contractor, claimed in June that the agency hacked into computers in Hong Kong and mainland China. The e-mail accounts of at least 34 CTM clients, including government e-mail accounts, had been hacked into, the Macau Judiciary Police said in July. There has no report on the progress of the investigation.

October 8, 2013 April 19, 2013

Macau Court rejects ‘CotaiLimo’ trademark The Court of Second Instance has again prevented gaming operator Las Vegas Sands Corp from registering a trademark that uses the words “Cotai Strip”. In a September 12 judgement but made public only yesterday, the judges said Sands cannot register “Cotai Strip CotaiLimo”. The court sided with rival operator Melco Crown Entertainment Ltd, saying “Cotai Strip” simply denoted a geographical area. The verdict also says “Limo” has “nothing to do” with the services for which Las Vegas Sands tried to register this trademark, namely surveillance, wedding and party planning, escort services and clothing rental.

3-star rates jump 15 pct y-o-y in Aug ‘Inferior’ category 17 pct more expensive than 4-star hotel accommodation Michael Grimes

michael.grimes@macaubusinessdaily.com

he average daily room rate for three-star hotels in Macau leapt by nearly 15 percent year-on-year in August, according to data from the Macau Hotel Association, which represents highend hotels here. That was one third faster than the 9.83 percent year-on-year rise seen in the cost of four-star accommodation. Occupancy in the three-star category went up 2.59 percentage points to 94 percent. In August the average daily rate for three-star hotel accommodation was 1,213 patacas (US$152), compared to 1,056 patacas a year earlier. That meant three-star product was on average during the month 17 percent more expensive than the supposedly superior fourstar variety, where rates averaged

KEY POINTS 3-star more expensive than 4-star in Aug 3-star now equivalent to US$152 per night 4-star occupancy fell slightly in 8 mths to Aug 31 China per capita GDP eight times below U.S. in 2012: World Bank

1,033 patacas per night. Four-star rates were themselves up 9.83 percent year-on-year in August. In the eight months to August 31, three-star rates rose 6.74 percent year-on-year, while four-star rates rose 5.94 percent. Five-star rates rose by a more modest 1.38 percent during the January to August period, albeit from a higher base, to an average 1,669 patacas per night. In August-only, room rates rose 14.85 percent year-on-year for threestar accommodation, and 11.51 percent for four-star, while five-star rates were up 5.84 percent. In 2012 occupancy levels of three- and four-star rooms were higher than for five-star ones when judged January-to-August. But during January to August this year, occupancy rates for four-star rooms fell slightly – by 0.44 percentage points – when judged year-on-year. Five-star occupancy showed the slowest growth year-on-year in August, at 1.63 percentage points. Business Daily reported last week that during the start of the Golden Week break last week, the cheapest deluxe five-star room on Cotai was 5,888 patacas according to Macau Government Tourist Office. That was two-and-half-times the cheapest rate on tripadvisor.com for a night at Encore at Wynn Las Vegas during the upcoming Thanksgiving holiday in the U.S. According to the World Bank, in 2012 the per capita gross domestic product of the U.S. (US$49,965) was eight times greater than that of mainland China (US$6,188).

Macau investment – City of Dreams

Macau a ‘pillar’ of Crown’s rating: Fitch Investments in territory offset risk of focus on Australian casino market

ustralian casino operator Crown Ltd – a partner in Macau casino developer Melco Crown Entertainment Ltd – has been given a ‘BBB’ assessment by Fitch Ratings on its long term issuer default risk and its senior unsecured debt. The outlook on the issuer default rating is ‘stable’. The credit assessor cites Crown’s concentration on Australian gaming as offering some risk, but adds: “Future dividend flows from Melco Crown will bring some diversification.” Fitch adds referring to the Macau investments: “Melco Crown derives roughly two-thirds of its property level EBITDA [earnings before interest, taxation, depreciation and amortisation] from the mass-market

segment, which also demonstrates more consistent EBITDA margin. Macau presents a growth opportunity and diversity for Crown and is therefore considered a pillar to Crown’s rating.” Crown – listed with the Australian Securities Exchange – announced last month it was seeking to change its name to Crown Resorts, to reflect its focus on upmarket gaming and tourism. Crown’s chairman James Packer ended the firm’s long-standing ties to electronic and print media in 2012 when he announced the sale of paytelevision company Consolidated Media Holdings to Rupert Murdoch’s Newscorp, for a net gain of US$1 billion (eight billion patacas).

4 APARTMENTS BUILDING IN LISBON Price: HK$ 17,000,000

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Anything but rocky – 3-star rates higher than 4-star

M.G.

October 2013 April 19,8,2013

Macau

Carson Yeung will give evidence Birmingham City F.C. owner previously declined to testify during Hong Kong trial for money laundering Michael Grimes

michael.grimes@macaubusinessdaily.com

usinessman Carson Yeung Ka Sing is to give evidence in person at his trial for money laundering in Hong Kong. He is due to enter the witness box a week next Tuesday. His evidence – including likely cross-examination by the prosecution – is scheduled to take five days. Mr Yeung had previously chosen not to testify in court but changed his mind. The judge in the case at Hong Kong District Court in Wan Chai said it was in the interest of justice and fairness for Mr Yeung to be heard in person, even though the defence had originally concluded its case two months previously. Mr Yeung, aged 52, is accused of laundering HK$721 million (US$93 million) between January 2001 and December 2007. The Hong Kong prosecutor stressed that the deposits in five bank accounts “amounted to more than 300 times the total combined salary” officially declared by Mr Yeung and his father, who co-signed on two of the accounts. Carson Yeung denies five charges

relating to the five accounts. His purchase of the English football club Birmingham City in 2009 was partly paid with funds deposited by “Macau casino operator SJM” in bank accounts connected to his money laundering trial, the court had previously heard. SJM Holdings Ltd has declined to comment on the case to Business Daily while the trial is still in progress. Mr Yeung was chairman of Hong Kong-listed Grandtop International Holdings Ltd, which in stages between 2007 and 2009 bought a controlling interest in th e B i r m i n g h a m cl u b fr o m British entrepreneurs David and Ralph Gold and David Sullivan for 96.5 million pounds (1.2 billion patacas). Grandtop then changed its name to Birmingham International Holdings Ltd. In a January filing to the Hong Kong Stock Exchange, Birmingham International said the football club purchase was underwritten by Kingston

Corporate

‘Galaxy Got Talent’ finals tomorrow ‘Galaxy Got Talent’, an annual contest organised by Macau casino developer Galaxy Entertainment Group Ltd, will hold its finals event tomorrow at East Square in Galaxy Macau on Cotai. Tickets cost 50 patacas (US$6.25) each and all proceeds from sales will go to Macau Holy House of Mercy in support of its Rehabilitation Centre for the Blind. The event – now in its fifth year – will feature 12 acts in the finals, competing for prizes worth a combined 450,000 patacas. Tan Wei Lian (pictured), a visually impaired Singapore singer, will also make a guest appearance. The audience can vote online for their favourite contestants at the ‘Galaxy Got Talent’ Facebook page. Voters will also be entered automatically into a prize draw. Galaxy said as part of its efforts to “promote the message of social integration”, a local band called Focus, formed by the members of the Rehabilitation Centre for the Blind, will join GEG team members on stage.

Cloud-based software for SMEs comma Ltd, a Macau- and Hong Kong-based information technology company, has launched a development version of software to help small- and medium-sized enterprises manage their equipment. The firm describes comma CMMS, as “a cloudbased computerised maintenance management system that targets small-to medium-sized organisations involved in any type of equipment maintenance”. comma CMMS is a professional-grade variant of maintenancedb, which uses a popular open source coding. Rui Alves, chief executive and chief technical officer of comma Ltd, said in a statement: “…as an actual user along with my 10-plus years in industrial maintenance, I got to learn a considerable amount about the real needs of small companies regarding a CMMS solution that just gets the job done. We tried to pack in all the features we could with as little complexity as possible and we are very pleased with the result”. The full version of the software is scheduled for release in mid-January.

Securities Ltd – a unit of Hong Kong-listed Kingston Financial Group Ltd. Kingston Financial Group bought Macau’s SJMlicensed Casa Real casino hotel in 2005 and it also owns the Grandview casino hotel in the city. Last week the Birmingham Mail newspaper in the United Kingdom reported the football club’s acting chairman Peter Pannu saying Mr Yeung – who is currently on bail in Hong Kong – is “personally” involved in preliminary talks to sell the club. Yesterday the Daily Mirror, a national tabloid in the U.K., reported that businessman Gianni Paladini, a former chairman of Queens Park Rangers Football Club in west London, is close to completing a takeover for Birmingham. Mr Paladini has been interested in buying the club – which plays in The Championship, the second tier of English professional football – since 2012. On September 26 Birmingham International said in a regulatory filing it was delaying publication of

Carson Yeung – speaking in his own defence

its results for financial year ended June 30. It said it would make them public “no later than” October 31.

October 8, 2013 April 19, 2013

Greater China Philippines to boost exports to China China will probably overtake Japan and the U.S. to become the Philippines’ largest export market as the Southeast Asian nation works to keep a territorial spat from disrupting trade ties, Trade Secretary Gregory Domingo said. “We are separating the commercial relationship from the political and security relationship,” Mr Domingo said yesterday in an interview in Bali, Indonesia. “The sheer size of China’s market and their proximity to us makes it natural that trade flows will increase significantly in the years to come.” Leaders from Asia-Pacific economies meeting this week are seeking to boost trade to fend off slowing growth that prompted the World Bank to cut forecasts for East Asia’s developing nations this year and next. China and the Philippines are embroiled in a territorial dispute over the ownership of fish and gas-rich waters in the South China Sea. “We are treating everything like business as usual,” Mr Domingo said, calling the disputes an “irritant” in the two nations’ economic relationship. Philippine exports rose 2.3 percent in July from a year earlier. Shipments abroad totalled US$52 billion in 2012 with sales to China accounting for 12 percent of exports.

HKMA’s bank rule to boost shareholder oversight: UOB Rule introduced at a time of mounting speculation over takeovers Stephanie Tong

HK journalists kicked out of APEC APEC hosts Indonesia yesterday denied stifling press freedom after withdrawing the credentials of nine Hong Kong journalists for shouting questions at the Philippine leader, insisting that they had posed a security threat. Despite protests from Hong Kong’s main journalist group, President Benigno Aquino’s spokesman also said the journalists had “crossed the line” by aggressively questioning him about a hostage siege in Manila that left eight Hong Kong people dead in 2010. “We deemed it improper for media to act that way, as they didn’t talk normally but they were very demonstrative, like they were protesting,” Gatot Dewa Broto, the Indonesian communications ministry official who is in charge of the APEC media centre in Bali, told AFP. Hong Kong media said journalists and technicians were affected from Now TV, RTHK and Commercial Radio. As Mr Aquino entered a meeting of APEC business leaders on Sunday, the reporters demanded to know whether he would meet Hong Kong leader Leung Chun Ying in Bali and apologise to the families of the hostage crisis victims. “The barring of the media for asking critical questions is an outright infringement of press freedom that is totally unacceptable,” Sham Yee-lan, chairwoman of the Hong Kong Journalists’ Association, said in a statement. But Aquino’s spokesman Ricky Carandang said the reporters had crossed an ethical boundary. “The behaviour of these reporters crossed the line from mere questioning to heckling,” he said.

Chong Hing’s share price has doubled this year

he Hong Kong Monetary Authority’s tightening of the city’s banking laws will improve its oversight of shareholders in domestic lenders, according to UOB Kay Hian (Hong Kong) Ltd. A non-financial services company or a foreign institution owning more than 50 percent of a bank’s shares will need to set up a Hong Kongincorporated holding company to hold the stock, according to amendments to the banking ordinance published on Friday. The holding company may be asked to meet conditions on capital adequacy, risk management and the suitability of directors and senior management, according to the ordinance. “The amendment is a riskmanagement measure making sure that buyers of Hong Kong banks have the relevant experience and won’t add

risks to the city’s banking sector,” Edmond Law, an analyst at UOB Kay Hian, said by phone yesterday. “This is not to discourage any potential transactions to proceed further.” The rule comes into effect at a time of mounting speculation over takeovers of Hong Kong’s lenders. The city’s role as an international centre for trading of China’s currency is attracting Chinese institutions seeking to expand abroad and foreign buyers eyeing the mainland market. Requiring a majority shareholder to set up a local financial holding company will enable the HKMA to exercise “consolidated supervision” in accordance with international standards, the regulator said in an e-mailed reply to questions from Bloomberg News yesterday. China Merchants Bank Co Ltd paid US$4.7 billion in 2009 for

Wing Lung Bank Ltd. Owners of Wing Hang Bank Ltd, including members of chairman Patrick Fung’s family and related trusts, were in preliminary talks for a sale that would trigger a mandatory buyout offer, the bank said in a September 16 statement. Chong Hing Bank Ltd, the smallest of Hong Kong’s family-run banks, is in talks with “independent third parties” including Yue Xiu Group, and the timing of any transaction is uncertain, the lender said in a separate statement the same day. Yue Xiu is the trading arm of the Guangzhou city government. Chong Hing’s share price has doubled this year, while Wing Hang climbed 41 percent. The benchmark Hang Seng Index has risen 1.4 percent in that time. Bloomberg News

Beijing reopens roads, airports closed by smog Luxury brands face prolonged slowdown: Burberry

An estimated 430 million people were expected to travel during the weeklong holiday

China’s slowdown could be more than just a passing phase for the luxury goods sector, the head of British fashion house Burberry Group Plc told French newspaper Les Echos in an interview published yesterday. The Chinese economy’s 2013 growth looks set to meet the government’s 7.5 percent target, but that would still represent the slowest pace of expansion in 23 years. A recent government crackdown on conspicuous spending has also hit sales of luxury items. “This Chinese slowdown is maybe not a temporary accident but a new normal,” Burberry chief executive Angela Ahrendts was quoted as saying. Burberry, which rang alarm bells on a slowdown in China more than a year ago, has shut half its stores in China since it took over its distribution network, Ms Ahrendts said. “There are other growth opportunities in the world,” she was quoted as saying, listing Latin America and Indonesia, which she described as “the new China”.

hina started reopening roads and airports in Beijing and surrounding areas that were shut by heavy smog, allowing millions of travellers to return from a week-long holiday. Air quality index readings for half of Beijing’s 12 urban areas fell below 200, the level dividing medium and heavy pollution, as of 12pm yesterday, according to data on the website of the Beijing Municipal Environmental Monitoring Centre. “Beijing will see light rain tonight, which will make it easier for air pollutants to dissipate,” Beijing Meteorological Bureau said in its official microblog. The bureau lifted a yellow alert on smog at 8.50am, predicting that visibility will improve.

The closures on Sundayy of six expressways and disruption at Beijing Capital International Airport underscore the severity of pollution that has become the top cause of social unrest in China. Premier Li Keqiang has pledged a clean-up that includes cutting coal consumption, shutting steel plants and controlling the number of cars. An estimated 430 million people were expected to travel during the holiday that ended yesterday, according to the China Tourism Academy. “Air pollution will be an additional factor for holiday traveling that needs to be considered,” said Chen Yifeng, a Shanghai-based accountant who didn’t travel during

the holiday to avoid crowds. “I won’t go to heavily polluted places like China’s north region as it’s either hazardous to your health or causes trouble when traveling.” Flights have resumed at Beijing Capital International Airport, an official said, declining to be identified citing company policy. Air China Ltd, the nation’s biggest carrier by market value, will put on additional services after the smog affected at least 47 flights on Sunday, an official said. The State Council, China’s cabinet, said last month it will cut coal consumption, close steel plants and control the number of cars on its roads to gradually eliminate heavily polluted days in as soon as a decade. Bloomberg News

October 2013 April 19,8,2013

Greater China

Beijing urges U.S. to avoid debt crisis Leaders seek to guarantee safety of Chinese investments, official says

hina urged Washington yesterday to take decisive steps to avoid a debt crisis and ensure the safety of Chinese investments, as a deadlocked U.S. Congress confronted a looming deadline to increase the nation’s borrowing power or risk default. China, the U.S. government’s largest creditor, is “naturally concerned about developments in the U.S. fiscal cliff”, Vice Finance Minister Zhu Guangyao said in the Chinese government’s first public response to the October 17 deadline in the United States for

raising the debt ceiling. “The United States is totally clear about China’s concerns about the fiscal cliff,” Mr Zhu told reporters in Beijing, adding that Washington and Beijing had been in touch over the issue. “We ask that the United States earnestly takes steps to resolve in a timely way before October 17 the political [issues] around the debt ceiling and prevent a U.S. debt default to ensure safety of Chinese investments in the United States and the global economic recovery,” Mr Zhu said. “This is the United

States’ responsibility.” The U.S. government moved into the second week of a shutdown yesterday with no end in sight, as Congress also confronted an October 17 deadline on raising the debt ceiling. “We hope the United States fully understands the lessons of history,” Mr Zhu said, referring to a deadlock in 2011 that led to a downgrade of the U.S. credit rating to “AA+” from “AAA” by agency Standard & Poor’s. The last big confrontation over the debt ceiling, in August 2011, ended with an eleventh-hour agreement under pressure from shaken markets

Why consolidate?

Cher Wang, HTC’s chairwoman

Fourth quarter ‘biggest challenge’: Wang HTC needs to ‘communicate better’ with consumers, chairwoman says

global smartphone market dropped by more than half in the second quarter. Once the biggest seller in the U.S., HTC plans redesigned versions of its flagship HTC One model and has hired actor Robert Downey Jr in a renewed push to promote its brand. The stock has dropped 58 percent this year, compared with an 8.2 percent advance in the benchmark Taiex index. The company is valued at about US$3.7 billion, compared with US$37 billion at its peak. Amid growing pressure from Samsung and Apple at the high end and Chinese makers among lessexpensive handsets, HTC’s share of

AFP

million) for the three months ended September. Credit Agricole SA cut its target to NT$91 from NT$93 yesterday, according to data compiled by Bloomberg. “Our communication does have a problem but we are improving on that,” Mrs Wang said. “It’s a gap between our new products coming out and we are improving our innovation and our marketing,” she said.

This ubiquitous intelligent technology is still at infancy stage, why do you want to consolidate?

TC Corp, the Taiwanese smartphone maker that posted a first quarterly loss last week, said the next two months are its “biggest challenge” as the company tries to win sales from Apple Inc and Samsung Electronics Co Ltd. “We really have the best technology and the best product,” chairwoman Cher Wang said in interview with Bloomberg TV while attending the Asia-Pacific Economic Cooperation conference in Bali, Indonesia. HTC fell the most in more than a month in Taipei and has slumped this year as the company’s share of the

and warnings of an economic catastrophe if a default were allowed to happen. Republican House Speaker John Boehner vowed on Sunday that there was “no way” Republican lawmakers would agree to a measure to raise the debt ceiling unless it included conditions to rein in deficit spending. The comment raised fears that the U.S. Congress and President Barack Obama could fail to reach a deal on raising the ceiling by October 17, when the Treasury has estimated it will have run out of cash.

the global smartphone market fell to 2.8 percent as of the second quarter from 5.8 percent a year earlier, data compiled by Bloomberg show. “We don’t see a turnaround in the near future,” Richard Ko, a Taipeibased analyst at KGI Securities, said by phone. “Its products aren’t good enough to compete, and those in the pipeline aren’t going to rescue the business either.” Mr Ko has an underperform rating on the shares. Goldman Sachs Group Inc cut its price target to NT$80 from NT$86 yesterday after the company reported last week a first-ever quarterly loss of NT$2.97 billion (US$101

HTC is pinning its current hopes on new products, including models that build on the HTC One franchise, to halt declining sales. The company’s HTC One mini, which went on sale in August, features a 4.3-inch display and a more slender design. Samsung and Apple dominate the global smartphone market with a combined 43.5 percent share in the second quarter, according to data from IDC in July. The slump in its share price could make HTC a takeover target for Chinese rivals including Lenovo Group Ltd and Huawei Technologies Co. As phone network equipment makers such as Huawei and ZTE Corp expand in smartphones and tablets, acquiring HTC would offer better brand identity and presence in the high-end market, Charles Golvin, a Cambridge, Massachusetts-based analyst at Forrester Research Inc said in August. Mrs Wang’s stake in HTC would help block the company from a hostile takeover, Jean-Louis Lafayeedney, an analyst at JI Asia in Hong Kong, wrote in August. The chairwoman and her husband Chen Wen Chi own more than 18 percent of HTC directly or through wholly owned investment firms, according to data compiled by Bloomberg. “This ubiquitous intelligent technology is still at infancy stage, why do you want to consolidate?” Mrs Wang said when asked about mergers in her industry, adding that HTC should achieve 20 percent share of high-end smartphone market in China next year. Bloomberg News

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Greater China / Asia

World Bank cuts East Asia growth forecast Region continues to be the main driver of global growth

he World Bank lowered its forecasts for East Asia’s developing nations this year and next, and said the region must boost efforts to ensure financial stability ahead of interest-rate increases in advanced economies. “Developing East Asia is expanding at a slower pace as China shifts from an export-oriented economy and focuses on domestic demand,” the bank said. “Growth in larger middle-income countries including Indonesia, Malaysia, and Thailand is also softening in light of lower investment, lower global commodity prices and lower-than-expected growth of exports,” it added. Developing East Asia will probably expand 7.1 percent in 2013 and 7.2 percent in 2014, the Washington-based lender said in a report yesterday, down from April predictions of 7.8 percent and 7.6 percent respectively. China may grow 7.5 percent in 2013, lower than an April forecast of 8.3 percent, it said. Resilient remittances help boost the Philippines

KEY POINTS World Bank warns of investment slowdown in China Expansion of shadow banking ‘poses serious challenges’ Investment growth moderating in most economies U.S. fiscal deadlock cited as a concern

“The risks to the global recovery from the uncertainty surrounding the fiscal deadlock in the United States, the impact of the withdrawal of monetary stimulus from the advanced economies, an abrupt slowdown of investment in China, and unrests in the Middle-East remain prominent,” the World Bank said in its East Asia and Pacific Economic Update. The Asian Development Bank cut its forecasts for emerging Asia this year and next last week, as a slowdown in China and India is compounded by concern that the Federal Reserve’s impending reduction of its record stimulus will drive away investors. The U.S. Fed last month said it wants more evidence of an economic recovery before paring its US$85 billion-a-month bond buying programme, surprising analysts who had predicted a US$5 billion cut to purchases of Treasuries.

Debt concern On China, the World Bank said the massive, investment-heavy stimulus programme supported by credit expansion had run its course, and policymakers must focus on containing the rapid growth of credit and tighten financial supervision. It added local government debt was a concern, given the complexity

and opacity of municipal finances, and said they should be reformed “with clear rules on borrowing, on allowed sources of borrowing, on debt resolution, and on the disclosure of comprehensive financial accounts by local governments”. “The rapid expansion of shadow banking poses serious challenges, since shadow banking is closely linked to the banking system, is less regulated, and operates with implicit guarantees from banks and local governments,” the World Bank said. But it added local governments in China had significant assets to meet liabilities as they held land reserves worth 10 percent of gross domestic product as well as shares in state-owned enterprises worth a similar amount. China had shown some progress in rebalancing its economy, it added, with consumption contributing more to quarterly growth than investment in the two years up to the first quarter of 2013 and services accounting for a larger share of GDP. “Still, the economy has yet to make the decisive turn toward consumer-based growth,” the World Bank said.

Market volatility “Some of the headwind will be coming from the international economy, and that largely is the tapering of the unconventional monetary policies especially in the Untied States,” Bert Hofman, the World Bank’s chief economist for East Asia and Pacific, told reporters in Singapore. “It will mean an increase of global interest rates for which countries would need to prepare. And they need to prepare for potential financial market volatility in the process.” The largest developing nations for the first time have the worst market opportunities as optimism for stronger growth shifts to the U.S. and Europe, according to a Bloomberg Global Poll last month. India fared the poorest, followed by Brazil, Russia and China, a worldwide poll

of investors, analysts and traders who are Bloomberg subscribers showed. Japan’s new strategy to revive growth, also known as Abenomics, could increase Japanese investment in the region and offset the impact of tapering on capital inflows in the region, the World Bank said. China’s economy slowed last quarter as growth in manufacturing and transportation weakened, and increases in business-investment and real estate revenue eased, a survey by New York-based China Beige Book International showed last month.

Policy buffers Policymakers in developing East Asia need to be ready to respond to a steady increase in interest rates in advanced economies, and step up their efforts to maintain financial stability, the World Bank said yesterday. While investment growth is moderating in economies such as Indonesia, Thailand and Malaysia, consumption and resilient remittances helped boost the Philippines in the first half of the year, the World Bank said. Excluding China, the region may grow 5.2 percent in 2013 and 5.3 percent in 2014, it said. “Reducing reliance on short term and foreign currency denominated debt, accepting a weaker exchange rate when growth is below potential, and building policy buffers to respond to changing global liquidity conditions are some of the ways that can help countries be prepared,” Mr Hofman said. Turning to Indonesia, the World Bank said investment growth reached a three-year low in the second quarter and is likely to face headwinds from interest rate hikes in response to rising inflation and capital outflows as well as from a slowdown in foreign direct investment and regulatory uncertainties. “Lower global commodity prices have dampened export receipts and slowed private investment in the capital-intensive resource sectors of the Indonesian economy, depressing

Some of the headwind will be coming from the international economy, and that largely is the tapering of the unconventional monetary policies Bert Hofman, World Bank’s chief economist for East Asia and Pacific

2012

2013

East Asia

6.0 (-0.5)

6.4 (-0.3)

Developing East Asia

7.1 (-0.7)

7.2 (-0.4)

China

7.5 (-0.8)

7.7 (-0.3)

Indonesia

5.6 (-0.6)

5.3 (-1.2)

Malaysia

4.3 (-0.8)

4.8 (-0.6)

Philippines

7.0 (+0.8)

6.7 (+0.3)

Thailand

4.0 (-1.3)

4.5 (-0.5)

Vietnam

5.3 (+0.1)

5.4 (-0.3)

ASEAN

5.1 (-0.3)

overall growth,” the World Bank said. The region covered in the bank’s report includes China, Indonesia, Malaysia, Philippines, Thailand, Vietnam, Cambodia, Laos, Mongolia, Myanmar, Timor-Leste, Fiji, Papua New Guinea, Solomon Islands and other island economies in the Pacific. Reuters/Bloomberg News

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Japan out of economic ‘crossroads’, Abe says Prime minister warns of delay in key labour reforms

apan has emerged from the “crossroads” of economic stagnation, with deep reforms and a massive spending package expected to put it back on the growth track, Prime Minister Shinzo Abe said yesterday. Speaking to Asia’s top corporate executives at a summit, Mr Abe said that through his three-pronged strategy to revive the Japanese economy, he has succeeded in “breaking through the mentality of economic stagnation that had been permeating Japan”. The Japanese leader singled out his move to raise the consumption tax rate from 5 percent to 8 percent with effect from April 1 next year. The increase is seen as crucial to shrinking the country’s huge national debt and marks a major political gamble for Mr Abe, with previous tax rises having led to the downfall of his predecessors. Japan’s prime minister has also unveiled a 5 trillion yen (US$50 billion) spending package aimed at softening the blow from the tax increases. “I now feel very intensely that we have emerged from this crossroads

It is possible to revive the economy and restore the soundness of public finances in a compatible way Shinzo Abe, Japan’s prime minister

AFP

Indonesia challenges LME to set tin benchmark

ndonesia, the world’s l a r ges t t in exp orte r, wants to displace the London Metal Exchange as the venue for setting the global benchmark by requiring that the metal be traded on a local exchange before export. “The purpose of trading physical tin through the bourse for export is to make Indonesia the place for international tin-price discovery, not to refer to the LME anymore,” Sutriono Edi, head of the Commodity Futures Trading Regulatory Agency, said by e-mail in response to Bloomberg questions. The government was studying other commodities to which the local-trade policy may be applied, he said, listing coffee, cocoa, rubber and coal. Tin, used in smartphones

and packaging, rallied to a six-month high in London in September after the rule took effect and smelters curbed exports, with only one exchange in Jakarta authorised to trade the ingots. The policy changes and lower shipments may create a bottleneck for the global market, spurring higher prices, said Commerzbank AG. A decision allowing a second exchange to trade tin may come this week, Mr Edi said. “Indonesia is not the only producer in the world,” Simon Collins, director and head of dry-bulk commodities at Trafigura Beheer BV, said. “Until all the rules and regulations are fully clarified, and both the consumers and investors would be fully satisfied with the security around the

onto a path that runs straight out before us,” he said in a speech to the CEO Summit, a meeting of big business held in parallel with the annual summit of Pacific Rim leaders on the Indonesian island of Bali. “It is my belief that it is possible to revive the economy and restore the soundness of public finances in a compatible way,” he said. “There is no other path forward.” In his speech, Mr Abe described the huge stimulus package as an “investment towards the future” and will not be a “series of transient measures”. He said the money will be used to encourage companies to retool old business models and become more innovative. “We will utilise the tax system as the lever to facilitate this, boldly using taxes as incentives in order to encourage innovation in Japanese companies,” he said. “We will reinforce our growth potential by replacing old industries with new.” Mr Abe made no mention of reforms to the country’s labour market, a day after conceding in an interview to the Financial Times that attempting to remove stringent job protections – a step that could make Japanese companies more attractive for foreign investment – may prove difficult. “When it comes to redundancies, Japanese people are very sensitive,” he told the newspaper. “To gain people’s understanding will required more careful explanation than for other reforms.”

Caution reigns as U.S. shutdown drags on exchange, I couldn’t see that happening,” Mr Collins said when asked if Indonesian trading would draw volumes from the LME. The rule change represents a challenge to the LME, the oldest and largest base-metals marketplace which was bought for US$2.2 billion last year by Hong Kong Exchanges & Clearing Ltd. Indonesia, which accounts for 40 percent of global tin shipments, started trade under the new rule from August 30. “The solution is to have physical tin trading through the bourse, so that the tinexport price can be increased and Indonesia can be the world’s tin-price reference,” Mr Edi wrote in the e-mail. Higher prices show the policy is working, he said. Bloomberg News

sian markets look set for a cautious start to this week, with U.S. stock futures and the dollar coming under pressure as politicians in Washington showed no signs of making progress over the weekend in resolving the U.S. budget standoff. Democrats and Republicans remained far apart in ending the first government shutdown in 17 years, let alone reaching a deal on the U.S. borrowing limit by October 17 to avoid an unprecedented debt default. Republican House Speaker John Boehner vowed on Sunday not to raise the U.S. debt ceiling without a “serious conversation” about what is driving the debt, while Democrats said it was irresponsible and reckless to raise the possibility of a default. The comments appeared to mark a hardening stance since late last week when Mr Boehner was reported to have told Republicans privately that he would work to avoid default, even if it meant relying on the votes of Democrats, as he did in August 2011. The U.S. Standard & Poor’s 500 e-mini futures shed 0.5 percent in early

Asian trade yesterday. The S&P 500 index ended down 0.1 percent last week. U.S. Treasury futures added 5-1/2 ticks. Selling in risky assets has been orderly so far, but investors see volatility rising if the shutdown continues as the October 17 deadline gets closer. “As the days tick by and the U.S. government’s cash gradually starts to run out, the stakes will rise considerably,” analysts at Australia & New Zealand Banking Group Ltd said in a note. Asian shares were likely to face another testing week after Japan’s Nikkei share average tumbled 5 percent last week to mark its worst weekly decline since early August. “A higher risk of a U.S. sovereign default would lead to a flight to liquidity and, ironically, a stronger U.S. dollar, except against the most liquid/safest-haven ones: euro, yen, sterling and Swiss franc,” analysts at Barclays Capitals wrote in a note. “That is not to say we expect a breach of the ceiling, and continue to expect that a resolution will be found, despite the brinkmanship.” Reuters

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Asia

Airbus seals landmark deal with Japan Airlines Second setback for Boeing over past few weeks Tim Hepher and Tim Kelly

irbus SAS announced its first jet order from Japan Airlines Co Ltd yesterday, breaking open the last major aviation market dominated by rival Boeing Co after delays and a grounding of its 787 Dreamliner cast a shadow over its reliability as a supplier. The landmark deal for 31 widebody A350 jets with a combined US$9.5 billion list price follows an intense battle between the planemakers as Japan’s two top carriers seek dozens of new longhaul jets over the next decade. The agreement includes options for another 25 of the A350s, bringing the potential size to 56 aircraft.

JAL’s first ever order from Airbus is blow to Boeing dominance in Japan

US$9.5 bln

Total list price for 31 wide-body A350 jets “This is a huge win for Airbus and a big loss for Boeing,” said aerospace analyst Scott Hamilton, managing director of Seattle-based Leeham Co. “Airbus has been trying to break the wide-body monopoly of Boeing for decades and likewise

Boeing has been wanting to keep Airbus out of JAL and ANA.” U.S. planemaker Boeing has long seen off attempts by Airbus to secure an order with JAL, benefiting from links with Japanese suppliers and deep political ties between Tokyo and Washington to maintain a market share of more than 80 percent. Delays to its 787 Dreamliner and its subsequent grounding after its batteries overheated have, however, tarnished its image and cast doubt on Boeing’s ability to deliver aircraft on time, industry experts said. Both JAL and its domestic rival ANA Holdings

Inc are major Dreamliner buyers. At the same time, bureaucratic and political influence over the fleet purchases of JAL, which the government bailed out in 2010, has waned since it went public again a year ago and the Democratic Party government that rescued it lost power. “This is seriously bad for Boeing. They need to do a little soul searching,” said Richard Aboulafia, airline analyst with the Virginiabased Teal Group. “[The 787 problems] inevitably led to doubts about execution, resources and time.” The deal, in which the A350 vied

Indian officials cut spending as junk rating looms F

or Arvind Mayaram, India’s push to avoid having its credit rating cut to junk means he’ll have to forgo caviar and a two-metre-long flat bed in first class on his flight from New Delhi to Washington D.C. this week. Mr Mayaram, India’s Economic Affairs Secretary, will fly business class instead to the annual World Bank and International Monetary Fund meetings, saving taxpayers at least US$3,000. The change is part of moves to narrow a budget deficit that reached almost 75 percent of the 5.4 trillion-rupee (US$88 billion) target in the first five months of the fiscal year, imperilling efforts to limit the widest shortfall in major emerging nations. Prime Minister Manmohan Singh faces a slump in economic expansion that’s hurting tax revenues as rupee

weakness raises the cost of oil imports and fuel subsidies. He’ll likely scale back spending on areas such as research and development while maintaining energy, food and fertiliser aid to court support before elections due by May, Religare Capital Markets Ltd said. “A spending slowdown may well further sap growth,” said Tirthankar Patnaik, a strategist at Religare Capital in Mumbai. “But revenues are meaningfully below budget forecasts, so the government has little choice.” Mr Singh seeks a deficit of 4.8 percent of gross domestic product in the year through March 2014, down from 4.9 percent the prior year. Standard & Poor’s reiterated on September 3 it may lower India to junk on risks including budget and current-account imbalances.

S&P last classified India as noninvestment grade in 2007. The rupee has depreciated about 16 percent against the dollar in the past 12 months. It strengthened 0.5 percent to 61.44 per dollar at the close in Mumbai on October 4. The government in September imposed a 10 percent cut in a range of administrative costs, describing the limits on travel, car purchases and the use of luxury hotels as austerity steps. Mr Mayaram may be saving at least US$3,000 flying Deutsche Lufthansa AG’s business rather than first class, based on prices on the airline’s website. He confirmed he’s flying in the lower tier. Finance Minister Palaniappan Chidambaram, who has repeatedly said he’ll stick to deficit targets, will reduce planned outlays on items such as roads, ports and welfare

with Boeing’s yet-to-be-launched 777X, and its impact on wide-body competition are likely to dominate a major aviation industry gathering in Barcelona this week. JAL’s new Airbus aircraft will begin entering into service in 2019, the companies said.The battle between the two aircraft makers will now shift to ANA, which is also looking for around 25 new jets to replace its ageing fleet of long-haul Boeing 777s from 2020. ANA is still gathering information on the 777X and the A350, Ryosei Nomura, a spokesman for the airline, said. “This is Airbus’ largest order for the A350 so far this year and is the largest ever order we have received from a Japanese airline,” Fabrice Bregier, chief executive of Airbus, said on a conference call. “I must say that achieving this breakthrough order and entering a traditional competitor market was one of my personal goals.” Boeing said it was disappointed but respected JAL’s decision. “We have built a strong relationship with Japan Airlines over the last 50 years and we look to continue our partnership going forward,” a company spokesman said via email. If they chose Boeing’s 777X, both JAL and ANA would have to commit to being a launch customer again for a new Boeing jet. Delays to the 787, which is one-third built in Japan, and its subsequent grounding may have made JAL wary of buying an aircraft that Boeing has yet to officially commit to building. That concern has given Airbus a rare opening in Boeing’s best market. “It’s the price to be paid for passivity, by not launching this plane one year ago,” said <r Aboulafia, referring to the 777X. ANA’s boss, Shinichiro Ito, told Reuters last month that his airline would consider possible delivery delay risks when choosing replacements for its older long-haul 777 jets. Reuters

programmes by about 700 billion rupees this fiscal year, according to Yes Bank Ltd. Net tax revenues in April through August rose 4.9 percent from the same period a year earlier. The government’s budget estimate is for growth of about 19 percent in the tax take in 2013-2014. “There’s a possibility that revenues may pick up over the rest of the year, but whether that’ll be enough to prevent further expenditure curbs is doubtful,” said Rupa Rege Nitsure, an economist at Bank of Baroda in Mumbai. The spending restraint may yet be insufficient to keep the nation’s finances on track as revenues struggle. The budget deficit will widen to 5.1 percent of GDP this financial year, according to a Bloomberg News survey of 19 analysts. Bloomberg News

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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13 13

October 2013 April 19,8,2013

Asia Mongolia at investment ‘turning point’ Mongolia aims to show its relationship with foreign investors has reached a “turning point” by progressing on development of two of the country’s largest mines, Cabinet secretary Saikhanbileg Chimed said. The nation needs to follow last week’s passage of a law ending different treatment of foreign and local companies with “a good chain of events,” Mr Saikhanbileg said in an interview. Progress on funding the second phase of the Oyu Tolgoi mine being developed with Rio Tinto Group Plc and preparations to list the stateowned Erdenes Tavan Tolgoi mine are among steps that would bolster confidence, he said. “When we make a final decision, there should not be any political interference,” said Mr Saikhanbileg, a graduate of George Washington University’s School of Law. “When we make the initial talks of course maybe the politics comes up but the final approach in terms of policy should be a normal business practice. A practical decision should be followed.” Following record economic growth of 17.5 percent in 2011, Mongolia’s mineral resource boom has slowed during a year-long election cycle that raised the level of resource nationalism, taking a toll on investor confidence.

Fukushima reactor’s cooling system briefly stalls The operator of Japan’s crippled Fukushima nuclear plant said yesterday that pumps used to inject water to cool damaged reactors were hit by a power failure, but a backup system kicked in immediately. The Nuclear Regulation Authority said a worker conducting system inspections mistakenly pushed a button turning off power to some of the systems in the four reactor buildings at the Fukushima plant. The plant operator, Tokyo Electric Power Co Inc, or Tepco, pours hundreds of tonnes of water a day over the reactors to keep them cool after a devastating earthquake and tsunami in March 2011 triggered meltdowns and hydrogen explosions. Tepco said water was being pumped to the No. 1, No. 2 and No. 3 reactors at the plant and pools storing spent fuel rods were being cooled. Tepco has come under increased scrutiny after it found in August that 300 tonnes of highly radioactive water had leaked from one of the hastily built storage tanks at the Fukushima site. Japan stepped up support for the embattled utility last month, pledging half a billion dollars to help contain contaminated water at Fukushima.

LG launches sharper display tablet LG Electronics Inc introduced yesterday its first tablet with a high-resolution screen, joining global rivals trying to take on Apple Inc’s dominance in the popular small-sized tablet market. The G Pad 8.3 is the first tablet by the South Korean firm in nearly two years as it has struggled to regain lost ground in the mobile market due to a slow response to the industry’s shift to smartphones. The world’s third-largest smartphone maker after Samsung Electronics Co and Apple hopes the new tablet with a sharper display will help it gain traction during the year-end holiday season as Android-based tablets continue to win market share from Apple’s iPad. LG has also added a feature that allows users to check and send messages received by their Android smartphone from the tablet, hoping such function will help it stand out in an increasingly crowded mobile market. The new tablet, which is available for Wifi only version, will be sold for 550,000 won (US$510) from next week in South Korea and will be introduced in some 30 countries by the end of this year.

Gasoline demand in Asia expected to grow up to 4 percent annually

Indonesia to become biggest gasoline importer Asian supply glut could vanish by 2018, analysts say

ndonesia’s growing gasoline demand could help pry open a new trade route for the motor fuel in the next five years, as cargoes start heading to Asia on a regular basis from a European market awash with supplies. Asia has plenty of gasoline supplies now. Taiwan, China, South Korea, Singapore and India provide more than the region can absorb, from key exporters such as Reliance Industries Ltd, SK Energy Co and Formosa Petrochemical Corp. But Indonesia is set to become the world’s biggest importer of the motor fuel by 2018, outstripping the United States and Mexico combined, offering refiners a market as Europe remains well supplied and as the United States cuts imports due to a shale oil boom. The surge in Indonesia’s demand could also flip Asia into a having a deficit of gasoline, helping drive a recovery in the profitability of processing a barrel of crude into the product. “Even after factoring in refinery closures, Europe will still need to manage their surplus,” Sushant Gupta of Woodmac said. Refinery closures in Japan and Australia, because of poor local margins, will draw down Asian supply. Gasoline demand in Asia is expected to grow in the 3 percent to 4 percent range annually between 2012 and 2015, said Victor Shum of energy information group IHS Inc. Rare gasoline cargoes from Europe are already arriving in Asia, with the latest reaching Indonesia in November from Norway. But the Europe-to-Asia gasoline flow could become a regular feature of the market in years ahead, especially during the Muslim fasting month, Mr Gupta said, when fuel use rises as people return home to

rural areas to be with their families. Indonesia’s gasoline deficit is likely to grow to 420,000 barrels per day (bpd) in 2018, compared with an estimated 360,000 bpd this year, even if state-owned oil company Pertamina Persero PT adds a new 60,000 bpd residue fluid catalytic cracker in 2015 to its Cilacap refinery, Woodmac said in a report.

Drying up The Asian gasoline margin – the profit or loss from refining Brent crude into the motor fuel – fell to almost US$2.10 a barrel on October 4, versus this year’s average so far at nearly US$8.60 a barrel, as the gasoline surplus has increased. But the surplus, forecast at 55,000 bpd in 2012, will flip into a deficit of 118,000 bpd in 2018, said Woodmac, a view shared by JBC Energy. “Overall, we forecast the Asian gasoline surplus to vanish by around 2017, 2018, after which the region is expected to turn into a net importer,” said David Wech of JBC Energy. That will keep Reliance and South Korean refiners running their units at high rates, he said. China, the world’s secondlargest gasoline consumer after the United States, may also have to scale back on its exports even after adding 3 million bpd of new capacity between 2013 and 2015 to meet rising demand. This year, between January and August, China shipped nearly 53 percent of its gasoline exports of 3.3 million tonnes (approximately 28 million barrels) to Indonesia, Chinese official data showed. That’s about 17 percent of Indonesia’s average monthly imports of around 11 million barrels.

Overall, we forecast the Asian gasoline surplus to vanish by around 2017, 2018, after which the region is expected to turn into a net importer David Wech, JBC Energy’s analyst

“Our general assumption is that China is primarily interested in balancing its huge domestic market and is thus unlikely to become either a strong export or import oriented refined product hub,” said Mr Wech. Europe seems like the most logical supplier for Asia as it flips to a gasoline importer. Europe is estimated to have between 400,000 and 500,00 bpd of excess gasoline for the next five years, while U.S. gasoline imports will continue to fall, said John Galante of ESAI Energy. European refiners will need to find alternative markets, Mr Galante said. “Indonesian demand is an essential part of this issue because it is, and will remain, the largest gasoline import market in Asia, and compete with the U.S. and Mexico as the world’s largest importer of gasoline,” he added. Reuters

14 14

October 8, 2013 April 19, 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 88.15

57.6 57.4

27.35 27.14

86.85

26.93

57.2

Max 57.60

average 57.345

Max 50.40

Min 56.80

average 50.112

Min 49.80

26.51

56.8

Last 57.15

Last 49.95

Max 88.10

average 87.506

PRICE

WTI CRUDE FUTURE Nov13

102.69

average 27.018

Min 26.30

Last 27.25

26.30

50.25

22.25

28.83

50.10

22.10

49.95

21.95

49.80

28.66 28.49

Max 22.40

average 21.964

BRENT CRUDE FUTR Nov13

108.29

GASOLINE RBOB FUT Nov13

258.53

GAS OIL FUT (ICE) Nov13

917.5

NATURAL GAS FUTR Nov13

DAY %

YTD %

Min 21.80

Last 21.95

(L) 52W

-1.06888361

2.89813759

115.7599945

96.19999695

-0.855192514

0.681517252

293.6000109

243.3699846

-0.434074878

1.493362832

980.25

837

3.533

0.770108386

-5.660881175

4.59400034

3.281000137

297.72

-0.72690897

-0.361445783

322.3500013

276.8100023

Gold Spot $/Oz

1313.92

0.2159

-21.0603

1781

1180.57

Silver Spot $/Oz

21.7887

0.2471

-27.6363

34.5625

18.2208

Platinum Spot $/Oz

1387.99

-0.005

-8.5495

1742.8

1294.18

NY Harb ULSD Fut Nov13

Palladium Spot $/Oz

-1.107473035

(H) 52W

85.79000092

699

0.0143

-0.0943

786.5

587.4

LME ALUMINUM 3MO ($)

1844

0.930487137

-11.04679209

2184

1758

LME COPPER 3MO ($)

7260

1.043841336

-8.460471567

8346

6602

1872.5

0.240899358

-9.975961538

2230

1811.75

14050

3.881700555

-17.64361079

18770

13205

14.93

0.403496974

-3.146286085

16.65000153

14.77000046

443.25

-26.09420592

647

435

689

0.291120815

-16.05239111

913

635.5

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Nov13 Dec13

WHEAT FUTURE(CBT) Dec13

21.80

COUNTRY MAJOR

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

ASIA PACIFIC

CROSSES

28.32 Max 29

average 28.417

Min 28.15

Last 28.45

28.15

SOYBEAN FUTURE Nov13

1299.75

0.366795367

-0.230282096

1409.5

1162.5

114.45

0.043706294

-26.84563758

184.3499908

113.1999969

NAME

PRICE

SUGAR #11 (WORLD) Mar14

18.49

0.054112554

-10.15549077

22.02999878

16.69999886

ARISTOCRAT LEISU

COTTON NO.2 FUTR Dec13

85.9

-1.468226657

9.093218186

93.72000122

74.34999847

CROWN LTD

World Stock Markets - Indices

DAY %

YTD %

(H) 52W

(L) 52W

0.9401 1.607 0.9018 1.359 96.87 7.9869 7.7543 6.1218 61.91 31.408 1.2492 29.46 43.113 11394 91.072 1.22565 0.84567 8.3169 10.8544 131.65 1.03

-0.3604 0.3748 0.5988 0.236 0.6297 0.0038 0.0039 0.0359 -0.7592 -0.4075 -0.2161 -0.2987 0.45 -0.1141 0.9827 0.3378 0.1324 0.291 0.0359 0.3722 0

-9.4141 -0.6553 1.5081 3.0326 -11.118 -0.0463 -0.0477 1.7773 -11.1694 -2.6363 -2.2254 -1.4494 -4.8895 -14.0513 -1.9161 -1.4825 -3.577 -1.1952 -2.985 -13.7334 -0.0097

1.0599 1.6381 0.9839 1.3711 103.74 8.0111 7.7664 6.3005 68.845 32.48 1.2862 30.228 44.82 11730 105.433 1.265 0.88151 8.4957 10.9254 134.95 1.032

0.8848 1.4814 0.8968 1.2662 77.95 7.9818 7.7498 6.1064 51.9525 28.56 1.2152 28.913 40.54 9577 79.408 1.20302 0.79607 7.8281 10.1113 100.16 1.0289

DAY %

YTD %

4.92

0.4081633

15.78

-0.1265823

(H) 52W

(L) 52W

VOLUME CRNCY

56.19047

5.02

2.56

1173092

47.89128

16.27

9.28

865867

AMAX HOLDINGS LT

1.19

-2.459016

-15

1.72

0.75

1224375

BOC HONG KONG HO

24.7

-0.6036217

2.489625

22.85

7844101 396000

CENTURY LEGEND

0.42

58.49057

0.56

0.232

CHEUK NANG HLDGS

6.73

-0.148368

12.35393

6.78

3.87

237529

CHINA OVERSEAS

22.8

-1.724138

-1.298703

25.6

17.7

15301668

CHINESE ESTATES

18.68

1.411509

66.11018

18.9

9.337

136500

CHOW TAI FOOK JE

11.48

0.7017544

-7.717039

13.4

7.44

2555792

EMPEROR ENTERTAI

3.74

2.747253

97.8836

3.81

1.43

3740000

FUTURE BRIGHT

2.51

-1.181102

107.0912

2.76

1.103

1008000

57.15

0.4393673

88.30313

58.8

24.2

9160484

127

-0.3921569

6.992421

132.8

110.6

629510

-0.7619048

-21.65414

35.3

23.2

1099500

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

15072.58

0.5074524

15.02152

15709.58

12471.49

NASDAQ COMPOSITE INDEX

3807.754

0.8852137

26.10487

3819.275

2810.8

FTSE 100 INDEX

6403.68

-0.7778267

8.577253

6875.62

5605.589844

DAX INDEX

8525.09

-1.135108

11.98966

8770.1

6950.53

HOPEWELL HLDGS

26.05

NIKKEI 225

13853.32

-1.21924

33.26677

15942.6

8488.14

HSBC HLDGS PLC

HANG SENG INDEX

22973.95

-0.7113241

1.39926

23944.74

19426.35938

CSI 300 INDEX

2409.037

0.587314

-4.51514

2791.303

2023.171

TAIWAN TAIEX INDEX

8333.66

-0.3692966

8.236381

8439.15

7050.05

KOSPI INDEX

1994.42

-0.1281936

-0.1316945

2042.48

S&P/ASX 200 INDEX

PRICE

Macau Related Stocks

COFFEE 'C' FUTURE Dec13

NAME

Max 27.35

29.00

111.3399963

CORN FUTURE

84.25

22.40

9.85237484

LME ZINC

Last 88.10

Currency Exchange Rates

NAME

METALS

Min 84.25

50.40

Commodities ENERGY

26.72

85.55

57.0

GALAXY ENTERTAIN HANG SENG BK

83.75

-0.7113219

3.013526

90.7

72.85

9615783

HUTCHISON TELE H

3.42

-0.2915452

-3.932583

4.66

2.98

5388000

LUK FOOK HLDGS I

24.6

-1.6

0.8196737

30.05

16.88

1587364

MELCO INTL DEVEL

21.8

1.631702

141.9534

6.61

4302000

MGM CHINA HOLDIN

27.25

5.009634

105.2224

27.4

12.236

5174195

1770.53

MIDLAND HOLDINGS

3.14

1.618123

-15.13514

4.95

2.68

692000

NEPTUNE GROUP

0.197

4.787234

29.60527

0.23

0.131

91875000

NEW WORLD DEV

11.54

-1.870748

-3.993348

15.12

9.98

13187850

SANDS CHINA LTD

49.95

-0.695825

47.12813

26.35

12294845

SHUN HO RESOURCE

1.7

21.42857

1.92

1.19

-0.4444444

6.92124

4.65

2.97

3485564 5364642

5161.112

-0.9006307

11.01672

5314.3

4334.3

4367.026

-0.5085267

1.166146

5251.296

3837.735

FTSE Bursa Malaysia KLCI

1774.4

-0.1215833

5.059361

1826.22

1590.67

NZX ALL INDEX

1000.354

0.00039986

13.41201

1005.231

846.364

SHUN TAK HOLDING

4.48

PHILIPPINES ALL SHARE IX

3882.52

0.7306012

4.961909

4571.4

3440.12

SJM HOLDINGS LTD

21.95

0.6880734

23.67829

22.5

15.914

SMARTONE TELECOM

10.08

-0.1980198

-28.40909

16.22

9.97

2160756

WYNN MACAU LTD

28.45

1.065719

35.79952

29.05

17014093

JAKARTA COMPOSITE INDEX

Euromoney Dragon 300 Index Sin

609.67

0.13

-1.84

STOCK EXCH OF THAI INDEX

1418.05

-0.6773037

1.876531

1649.77

1260.08

HO CHI MINH STOCK INDEX

500.47

0.5969849

20.96536

533.15

372.39

ASIA ENTERTAINME

3.96

#N/A N/A

69409

BALLY TECHNOLOGI

70.42

-0.80293

57.50392

76.3

43.16

558023

Laos Composite Index

1290.06

-1.475507

6.197884

1455.82

1038.79

BOC HONG KONG HO

3.2

-0.9287926

4.23453

3.6

2.99

11300

GALAXY ENTERTAIN

7.43

-1.569848

87.15365

7.59

3.11

1175

INTL GAME TECH

19.02

0.05260389

34.22724

21.2

12.37

3327586

JONES LANG LASAL

84.17

-1.773836

0.2740023

101.46

72.56

515476

LAS VEGAS SANDS

66.36

0.5454545

43.76083

67.351

37.8353

3139551

MELCO CROWN-ADR

32.89

0.9205278

95.30879

33.59

12.74

1726769

MGM CHINA HOLDIN

3.22

83.96937

3.29

1.6651

13800

MGM RESORTS INTE

20.59

0.04859086

76.89003

20.9

9.15

5331953

SHFL ENTERTAINME

23.08

0.2171081

59.17241

23.21

12.35

377528

SJM HOLDINGS LTD

2.84

-1.045296

24.69178

2.9481

2.0508

3298

160.18

-0.2987676

42.39488

162.33

103.0933

996362

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

WYNN RESORTS LTD

AUD HKD

USD

Hang Seng Index NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

PRICE

DAY %

AIA GROUP LTD

36.6

-1.347709

21326680

CHINA UNICOM HON

13.26

37283394

POWER ASSETS HOL

67.95

0.0736377

6550951

ALUMINUM CORP-H

2.78

-1.067616

10930000

CITIC PACIFIC

11.18

0.3590664

29847865

SANDS CHINA LTD

49.95

-0.695825

12294845

BANK OF CHINA-H

3.59

-0.5540166

252393077

SINO LAND CO

11.32

-1.736111

19442337

BANK OF COMMUN-H

5.69

-2.065404

23694861

SUN HUNG KAI PRO

102.4

-2.568982

7617554

BANK EAST ASIA

32.6

-0.6097561

1121976

92.7

0.378993

1682277

11.16

-2.617801

13751700

BELLE INTERNATIO

NAME

CLP HLDGS LTD

62.7

-0.4761905

2017480

15.84

-1.123596

24210043

COSCO PAC LTD

12.02

-0.661157

2285718

SWIRE PACIFIC-A

ESPRIT HLDGS

12.58

0.64

3332795

TENCENT HOLDINGS

417.2

-0.4770992

2028193

TINGYI HLDG CO

19.92

-0.2004008

6667416

WANT WANT CHINA

11.76

-2.163062

7332617

-1.831502

3619949

24.7

-0.6036217

7844101

HANG LUNG PROPER

25.8

-0.5780347

6943057

15.02

-0.9234828

4667241

HANG SENG BK

127

-0.3921569

629510

CHEUNG KONG

123.8

0.487013

3513337

HENDERSON LAND D

47.05

-1.465969

5996025

CHINA COAL ENE-H

4.61

-1.705757

32925185

HENGAN INTL

90.55

-1.200218

1070064

CHINA CONST BA-H

6.03

-0.6589786

160741426

HONG KG CHINA GS

18.38

-1.288937

10323497

CHINA LIFE INS-H

20.45

-0.7281553

18677770

CHINA MERCHANT

29.25

-0.8474576

3314787

CHINA MOBILE

83.2

-0.952381

CHINA OVERSEAS

22.8

-1.724138

CHINA PETROLEU-H

6.17

CHINA RES ENTERP CHINA RES LAND

VOLUME

CNOOC LTD

CATHAY PAC AIR

BOC HONG KONG HO

NAME

HONG KONG EXCHNG

125.6

-0.3965107

1810755

HSBC HLDGS PLC

83.75

-0.7113219

9615783

24705553

HUTCHISON WHAMPO

98.85

1.854714

9424025

15301668

IND & COMM BK-H

5.47

-0.7259528

150739825

-0.6441224

66305350

LI & FUNG LTD

11.2

-1.060071

11833652

24.95

-1.383399

2135586

MTR CORP

30.5

-1.294498

2026898

21.9

-0.4545455

6740766

NEW WORLD DEV

11.54

-1.870748

13187850

CHINA RES POWER

2.150538

6610114

PETROCHINA CO-H

8.55

-0.6968641

66533160

CHINA SHENHUA-H

23.2

-1.694915

16426700

PING AN INSURA-H

58.45

-0.8481764

6642590

WHARF HLDG

MOVERS

23223

INDEX 22973.95 HIGH

23222.98

LOW

22859.86

52W (H) 23944.74 (L) 19426.35938

22942

03-October

07-October

15 15

October 2013 April 19,8,2013

Opinion

Problem solving wires in the Anthropocene Business

Leading reports from Asia’s best business newspapers

Inquirer Business The Aquino administration will honour all unexpired tax- and duty-free incentives being enjoyed by the private sector, according to Finance Secretary Cesar Purisima. The statement allayed the concerns of the business community. The Department of Finance is not pushing for an immediate withdrawal of fiscal incentives granted under existing agreements. “We will not change the rules in the middle of the game. Any change we are proposing will be prospective and existing arrangements will be respected,” Mr Purisima said.

Kevin J. Noone

Director of the Swedish Secretariat for Environmental Earth System Sciences

GDP must be part of an array of metrics for assessing economic, natural, and social capital

Times of India The World Bank is close to finalising a new financing window to help countries such as India meet their infrastructure funding needs. While Global Infrastructure Financing (GIF) has been in the works for the past few months, the issue is expected to get a fresh push when finance ministers meet in Washington for the annual meeting later this week. The plan, which was being driven by India, will see sovereign wealth funds (SWFs) and pension funds invest in securities floated by the World Bank, which will also chip in with resources.

The Age Leighton Holdings Ltd has denied it breached its continuous disclosure obligations over bribery and corruption allegations involving senior officers working on project in Iraq. The scandal-engulfed construction company is facing a shareholder class action seeking recovery of almost A$1 billion (US$942 million) that was wiped off its market capitalisation last week. Melbourne City Investments owner and lawyer Mark Elliott lodged a writ on behalf of shareholders in the Victorian Supreme Court on Friday.

The Star A Malaysian automotive player is said to be the majority partner in a jointventure company involving China’s Great Wall Motor Co Ltd’s (GWM) 2 billion ringgit (US$626 million) investment in Malaysia. “The local partner will be involved in the setting up of GWM’s manufacturing plant in Gurun, Kedah,” a source was quoted as saying. GWM is a HK$175 billion company listed on the Hong Kong Stock Exchange. It is the largest maker of sport utility vehicles and pickup trucks in China.

ake a deep breath. Savour it for a moment. Now consider this: None of our modern human ancestors ever breathed anything like it – and, the way things are going, nor will our descendants. Since the Industrial Revolution began, human activity has substantially changed the atmosphere’s composition. Carbon-dioxide levels are higher today than they have been in at least 800,000 years. The amount of nitrogen and sulphur circulating through the Earth system has doubled. The ocean’s pH is changing at an unprecedented rate, reaching levels of acidity that marine organisms have not experienced in the last 20 million years. Clearly, humans – who now occupy almost 40 percent of the planet’s ice-free land surface – are shaping many of the planet’s fundamental processes. According to N o b e l l a u r e a t e P a u l C r u t z e n , this shift is so profound that it amounts to the beginning of a new epoch: the Anthropocene. While some scientists believe that the Anthropocene actually began when humans started farming and domesticating animals, others (including me) consider it to be a more recent development. But, regardless of when the Anthropocene began, it is clear that humanity’s impact on the planet increased substantially after World War II’s end. Indeed, around 1950, the world seems to have reached a tipping point, with practically every factor that heightens humanity’s impact on the planet – population, GDP, fertiliser use, the proliferation of telephones, and paper consumption, to name only a few – beginning to increase rapidly. During this period, which the scientist Will

Steffen dubbed the “Great Acceleration,” the human population became sufficiently large and connected, with high enough consumption, to become a major global force. In a 2009 study, scientists concluded that, by crossing any of nine “planetary boundaries” – climate change, biodiversity loss, disruption of nitrogen and phosphorus cycles, land use, freshwater extraction, ocean acidification, ozone depletion, atmospheric aerosol loading, and chemical pollution – humans would increase the risk of fundamentally changing the Earth system. Given that these boundaries are closely interlinked, allowing trends toward any of them to continue, especially at the current rate, would drive the environment into unknown territory, potentially causing serious damage to the systems that underpin human survival.

New approach In order to cope with the unique challenges of the Anthropocene, humans need a new approach to management and strategic decision-making. Developing successful strategies will require abandoning long-held assumptions that worked in the past, but that have become counterproductive myths today. One such myth is that it is best to tackle one problem at a time with straightforward, targeted solutions. While this approach may be appealing, it is inadequate to address today’s most pressing issues. For example, producing and delivering nutritious food consistently to upwards of nine billion people by midcentury has implications for water and energy consumption, agricultural development and land

use, the nitrogen and phosphorus cycles, and ocean acidification, not to mention biodiversity loss, such as through overfishing. Given this, the Green Revolution’s narrow, production-focused approach cannot overcome food insecurity in the future, even though it produced truly impressive output increases in the past. The world needs an innovative, comprehensive strategy aimed at optimising the entire food system – for example, by improving fertiliser and water use and food transportation and storage; by ensuring that adequate nutrition is accessible and affordable for all; and by changing communities’ eating habits to include less resourceintensive food. The trouble is that complexity can be overwhelming, so people often prefer to break down complex systems into individual components. Rather than consider, say, eradicating extreme poverty and averting global warming in tandem – and developing mutually reinforcing strategies to achieve these goals – proposed solutions focus on one or the other, undermining their effectiveness.

Replacing GDP Of course, addressing interconnected issues simultaneously carries its share of challenges. For one thing, no single person or group has enough knowledge or experience to solve all of the problems afflicting a complex system at once. But a wider community – including governments, businesses, researchers, philosophers, faith communities, and even poets and artists – could devise and implement holistic strategies.

Success will depend on participants’ willingness to cooperate and their commitment to put evidence before ideology. Thus, the real challenge lies in marshalling such an inclusive community – something at which global leaders have not proved adept. A second major challenge is that resources are limited, making it impossible to solve all of the world’s problems at once. In this context, the ability to prioritise effectively is essential. But, rather than emphasising one problem over another, the top priority should be building resilience into all global systems. Mechanisms aimed at solving a problem in one system should not be allowed to compromise another system’s resilience. Another challenge will be to devise new metrics to replace GDP as the leading measure of human well-being. Even Simon Kuznets, the main architect of the concept of GDP, recognised that it does not account for many of the factors affecting human well-being; he argued that it should be used “only with some qualifications”. In the Anthropocene, GDP must be part of an array of metrics for assessing economic, natural, and social capital – that is, the value of the goods and services produced, as well as the dignity of the ecosystems and social structures that underpin this output. Navigating the Anthropocene effectively and ethically is perhaps the most daunting challenge that modern humans have faced. Overcoming it will require a smarter approach to strategic decision-making and a broader understanding of innovation. It is time for us to rise to the challenge. © Project Syndicate

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October 8, 2013 April 19, 2013

Closing Moody’s sees low chance of U.S. default

Taiwan Sept exports in surprise fall

Moody’s Investors Service said it sees a “very low” chance the U.S. will default on its debt payments as a stalemate between President Barack Obama and House Republicans showed little sign of thawing. The impact of the partial shutdown on the economy may not be particularly damaging in the short term, and the effect would be seen gradually over time if it was an extended one, chief executive Ray McDaniel told Bloomberg. “Even if there’s not resolution on the debt ceiling, we think that the likelihood that Treasury security payments would be prioritized highly is strong,” Mr McDaniel said.

Taiwan reported an unexpected fall in exports in September, with shipments to its largest markets, China and the U.S., dropping significantly. The Ministry of Finance said that exports, which had risen on an annual basis in the four preceding months, declined 7.0 percent in September. Exports to China tumbled 8.4 percent, compared with August’s increase of 2.9 percent. Shipments to the U.S., up 0.9 percent the previous month, fell 8.5 percent in September. For the month, the trade surplus was US$2.35 billion, which compared with the August figure of US$4.59 billion.

Xi sees ‘tortuous’ world economic recovery

hinese President Xi Jinping said yesterday he expected a “long and tortuous process” of world economic recovery, while China’s economic growth rate of about 7 percent was “within a reasonable and expected range”. Speaking on the sidelines of an Asia-Pacific Economic Cooperation (APEC) forum summit, Mr Xi said the world economy was in the middle of profound adjustment and with major economies far from resolving their structural problems, it was imperative to strengthen macroeconomic cooperation. “To achieve a full recovery and healthy growth of the world economy will be a long and tortuous process,” Mr Xi said in a speech on the Indonesian island of Bali. China, the world’s second largest economy, is a major engine of global economy and it has become the largest trading partner of many of the 21 nations in the Asia-Pacific including the likes of the United States, Japan and Russia. APEC, which accounts for 55 percent of global real gross domestic product growth, said in a joint statement last week that “risks remain tilted to the downside” and that economic growth would be slower and less balanced than desired. Mr Xi brushed aside concern of a hard landing for the Chinese economy, however, saying a “seven percent annual growth rate will suffice” to meet China’s mediumterm goal of doubling per capita income by 2020. “I’m fully confident in the future of China’s economy.” China’s GDP grew at 7.6 percent for the first half of 2013, slower than 9.3 percent in 2011 and 7.7 percent last year. “The slowdown of the Chinese economy is an intended result of our own regulatory initiatives,” Mr Xi said, adding that China’s fundamentals remained good. Reuters

Greek vice finance minister Christos Staikouras is upbeat on next year

Greek budget sees end to recession next year Signals it may be finally recovering from its debt crisis

reece will emerge from six years of recession next year, a d ra ft b ud get fo recas t yesterday, signalling the country is past the worst of a crippling debt crisis that nearly broke Europe’s single currency. Twice bailed-out Athens also confirmed it would post a budget surplus before interest payments this year for the first time in over a decade, and its battered economy won a vote of confidence from billionaire U.S. investor John Paulson. The positive outlook marks a sharp reversal in fortunes for a nation that had become Europe’s problem child, lurching from one crisis to the next as it tottered close to bankruptcy and exasperated its international partners with broken promises. Analysts cautioned that despite the signs of economic stabilisation Greece remained hooked on aid and that further debt relief was inevitable to bring down a level of indebtedness set to top 175 percent of gross domestic product this year.

“The key thing is that while things are improving they’re doing so from a very low level in Greece. Greece still needs financial assistance from outside,” said Ben May, economist at London-based Capital Economics. “Certainly there are signs that the worst of the crisis may well be over in the eurozone in the short term but you could easily see concerns flaring up longer term.” The Greek economy, which has shrunk by about a quarter since its peak in 2007 and thrown more than one in four out of work, will grow by a modest 0.6 percent next year thanks to a rebound in investment and exports including tourism, the budget predicted. In a further boost, Athens forecast a primary budget surplus of 1.6 percent of national output next year after posting a small surplus of 340 million euros (US$461 million) this year. Attaining a primary surplus – which excludes debt servicing costs – makes Athens eligible for further debt relief from its European Union and

International Monetary Fund lenders. “In the last three years Greece found itself in a painful recession with an unprecedented level of unemployment,” vice finance Minister Christos Staikouras said as he unveiled the 2014 budget. “Since this year, the sacrifices have begun to yield fruit, giving the first signs of an exit from the crisis.” Athens will ask its creditors to honour their commitment to provide debt relief, and hopes it can return to the bond markets in the second half of next year, Mr Staikouras said. Greece is hoping for an extension of maturities and lower interest rates on bailout loans after its partners ruled out an outright write-off of debt. It also expects to receive a third bailout of about 10 billion euros to get through next year. The economy is expected to contract by 4 percent this year, with the jobless rate peaking at 27 percent. Nearly 60 percent of all young people are out of a job. Reuters