Macau Business Daily, November 4, 2013 by Business Daily

MOP 6.00 Vitor Quintã Deputy editor-in-chief Editor-in-chief Tiago Azevedo Number 406 Monday November 4, 2013 Year II

April 19, 2013

Poorly paid civil servants promised More money

he government will soon announce an allowance as a short-term way of boosting the income of low-paid civil servants, Public Administration and Civil Service Bureau director José Chu has said. The remark comes just a week before Chief Executive Fernando Chui Sai On is to deliver his Policy Address for 2014, with more social welfare measures expected. The Chinese Civil Servants Association, which earlier this year urged the government to give 2,000 low-paid public-sector employees a monthly allowance of 2,800 patacas (US$350), welcomed Mr Chu’s pledge. On the other hand, the official rejected calls by Legislative Assembly member Chan Meng Kam to copy Hong Kong’s civil service pay scale, which reflects the qualifications and performance of government employees. More on page 3

Sales hit target at yacht, car fairs despite flat visitation

Operator splurges on MGM Macau refurbishment

Page 2

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Okada signs partner for Manila resort

Page 5

Hang Seng Index Page 16

www.macaubusinessdaily.com

23310

23280

23250

23220

23190

23160

November 1

HSI - Movers

Architects, engineers dream of the world

Gaming revenue sets new standard

Architects and engineers are hoping that a system of professional accreditation will not only make it easier to bring in expertise from outside Macau but also open up new vistas for the city’s own talent. Local graduates have an easy time finding a job but companies looking for experienced project managers can have a hard time, professional associations say. Page 2

October’s gross gaming revenue set an all-time monthly record of 36.48 billion patacas (US$4.6 billion) thanks to year-on-year growth of nearly 32 percent. With visitors growth a lot slower last month, that means gamblers are putting more money on the tables. Revenue for the first 10 months of 2013 is already close to the tally achieved for whole of last year. Page 4

City wasting potential for slot machine cluster Financial incentives are the missing ingredient needed to create a cluster of companies that design and sell slot machines here, says Macau Polytechnic Institute professor Zeng Zhonglu. Demand for these products is increasing in Asia, he told Business Daily in an interview. It could be the starting point to develop technologies suitable for other industries and so diversify the city’s economy, Mr Zeng said. Pages 6 & 7

Name

%Day

TINGYI HLDG CO

6.39

GALAXY ENTERTAIN

1.82

SANDS CHINA LTD

1.81

CHINA LIFE INS-H

1.70

LENOVO GROUP LTD

1.69

CHINA RES ENTERP

-0.91

CHINA UNICOM HON

-0.98

BELLE INTERNATIO

-2.01

KUNLUN ENERGY CO

-2.21

CITIC PACIFIC

-3.08

Source: Bloomberg

I SSN 2226-8294

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2013-11-04

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2013-11-06

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November 4, 2013

Macau

Architects, engineers expect accreditation to open doors Professional associations hope licences to practise in Macau will soon be recognised elsewhere and vice-versa Stephanie Lai

sw.lai@macaubusinessdaily.com

rchitects and engineers are hoping that a system of professional accreditation will not only make it easier to bring in expertise from outside Macau but also open up new vistas for the city’s own talent. A bill on the accreditation of professionals in 13 fields related to architecture, engineering and urban planning was submitted to the Legislative Assembly on Thursday. Such legislation has been talked about for nearly a decade. Professional associations say the bill is an important step toward ensuring professionals in Macau are kept up to scratch. University graduates in architectural studies and engineering can begin practising as professionals simply by registering with the Land, Public Works and Transport Bureau. The professional accreditation bill would make graduates complete an internship lasting two to five years and pass an examination before obtaining a licence to practise. The head of the Architects Association of Macau, Ben Leong Chong In, told Business Daily: “It’s good that we will now have a legal

Over 1,220 engineers and architects work in Macau, the government estimates

framework that gives clearer rules on the accreditation of engineers and architects.” The president of the Macau Institution of Engineers, Tam Lap Mou, said: “Overall, the bill

represents good progress towards the accreditation of engineers.” But Mr Tam added: “What we are more concerned about is whether the mutual recognition of engineer’s licences issued in Macau and other

places will be in the bill.” We hope the Legislative Assembly will keep up a dialogue with us,” he told Business Daily.

International standards Mr Tam said high demand for engineers meant fresh graduates could easily find jobs in Macau companies. “Though if you are looking for experienced ones that can independently handle a complete project, it can be a tougher search,” he said. Mr Leong of the Architects Association of Macau said: “What concerns our sector the most is the pressure for us to match our architects’ qualifications to international standards.” He said: “The present problem is that if you are a locally registered architect, you are not recognised professionally in other places.” To work in other places, such as Hong Kong or the mainland, Macau architects must obtain accreditation in those places. The professional accreditation bill would make architects and engineers take continuing education courses recognised by the government before renewing their licences. It would put a committee of over twenty members – half government officials and half professionals – in charge of accreditation procedures. The Architects Association of Macau and the Macau Institution of Engineers welcome the proposed composition of the committee. But Mr Leong has worries about some fields that the bill covers, such as chemical engineering. “At the moment we are not sure if the city has enough professionals in that field to sit on the committee and handle the respective regulation,” he said.

Yacht, car fair sales top MOP280 mln Organisers blame traffic woes for lower than expected visitor figures Tony Lai

tony.lai@macaubusinessdaily.com

achts and cars worth at least 280 million patacas (US$22.5 million) were sold during three-day fairs held this weekend in Macau, despite “lower than expected” visitor inflow. The Macau Business Aviation Exhibition, the Macau International Yacht Import and Export Fair and the China (Macau) International Automobile Exhibition – all held simultaneously – ended yesterday with about 160,000 visitors. Even though it was higher than last year’s 150,000 visitors, Nam Kwong (Group) Co Ltd, one of the organisers, acknowledged it was still below expectations. Speaking at a press conference yesterday, Song Xiaodong, Nam Kwong’s assistant general manager, blamed the slower visitor growth on the traffic conditions. “We could not reserve a car park at Venetian Macao for visitors this year,” he said. “The lack of a park affected the traffic convenience for some [visitors].” On-going construction around the Cotai venue, namely the Light Rapid Transit elevated railway,

About 400 cars were sold during a three-day fair that ended yesterday

also worsened the traffic and had an impact on the visitor inflow, Mr Song added. That had little impact on the sales volume, though. Organiser Macau Motor Traders Association estimated about 400 cars worth in total 100 million patacas were sold in the three days.

“Shopping for automobiles in the car fair has already become a habit for Macau residents,” said Patrick Tse Ka Ming, association president. He added the sale volume this year was “similar” to the past editions. The yacht fair also reached a similar sales volume to last year, according to organiser Fuzhou Auto

China Yachts Management Co Ltd. Zhang Fengna, spokesperson of the company, said the exhibition ended with “20-plus” orders with 80 million patacas in payments already made during the three days. Another 100 million patacas will be settled soon, said Ms Zhang. The three fairs have helped enrich the city’s tourism attraction, said Mr Song, by attracting visitors “whose length of stay and per capita spending are higher than the usual travellers”. Tourists made up 30 percent to 40 percent of the people checking out the fairs, according to a study carried out by the Macau Association of Economic Science. The study had ben commissioned by the organisers. These tourists stayed in average 2.74 days to 3.35 days in Macau and spent between 11,970 patacas and 15,973 patacas during their stay, the study says. Official data says visitors spend in average 1 day here with a per-capital spending of 1,973 patacas. The association polled over 1,350 visitors to the fairs in the last three days.

November 4, 2013 April 19, 2013

Macau

Low-paid civil servants to get editorial allowances to top up incomes Executive Council’s An official says Hong Kong’s civil service pay model silence is deafening is unsuitable for Macau Stephanie Lai

sw.lai@macaubusinessdaily.com

he government will soon begin giving low-paid civil servants allowances as a short-term way of boosting their incomes, Public Administration and Civil Service Bureau director José Chu has said. But Mr Chu has rejected Legislative Assembly member Chan Meng Kam’s demand that the civil service pay scale be overhauled to reflect the qualifications and performance of government employees. Mr Chan said in a written inquiry in July that the current pay policy put entry-level civil servants under financial pressure. Entry-level civil servants are paid between 7,700 patacas (US$964) and 10,500 patacas a month. The government increased the pay of Macau’s 28,000 public-sector workers by 6.06 percent in May. Mr Chan said this meant lowpaid civil servants got “only a few hundred patacas more”, which was insufficient to make up for inflation. The annual rate of consumer price inflation averaged by 5.42 percent in the 12 months ended September. Mr Chu has given no details of the

allowances the government intends to give low-paid civil servants. Chief Executive Fernando Chui Sai On will deliver his Policy Address for 2014 on November 12. Chinese Civil Servants Association secretary-general Lei Kong Weng said the association supported the introduction of allowances. “But defining who is a grassroots or low-paid civil servant will still be a tricky task for the government,” Mr Lei said. This year the association urged the government to give 2,000 lowpaid public-sector employees a monthly allowance of 2,800 patacas. Mr Chu said in a written reply to Mr Chan’s inquiry that Macau would not copy Hong Kong’s civil service pay scale, which reflects the qualifications and performance of government employees.

Right to resist In Macau, any increase in pay applies uniformly to civil servants in all nine pay grades, ranging from entry-level employees to

senior technicians. Mr Chu said during an official visit to Hong Kong that the “huge difference” between the Macau and Hong Kong pay scales meant that copying the Hong Kong model would do little to help low-paid civil servants in Macau. The starting pay of an entry-level civil servant in Hong Kong is set with reference to pay in the private sector and the employee’s qualifications and performance. Mr Lei said the government was right to resist copying the Hong Kong pay scale. “This index system that we have now is a design that has been used for two decades, and I would not say it is an unfair or unreasonable system,” he said. He said Secretary for Administration and Justice Florinda Chan had hinted in a meeting in August at changes in how civil servants were graded and promoted. “But I don’t think it will happen any time soon,” he said. “A big change in a pay system that involves more than 28,000 civil servants is not possible when the city faces a reshuffle of its secretaries and the chief executive next year.” An election to choose the chief executive for the following five years is due to be held next year.

KEY POINTS More money for junior civil servants Allowances only short-term measure Civil service pay scale untouched

Macau has over 28,000 public-sector workers (Photo: Manuel Cardoso)

BNU lending grows as more branches open T

he expansion of Banco Nacional Ultramarino SA’s (BNU) network here has helped the bank increase its lending in the first nine months of this year, parent Caixa Geral de Depósitos SA (CGD) said. Total credit granted by BNU

increased by 87.3 million euros (940.2 million patacas) from the end of December, CGD told the Portuguese Securities Market Commission. BNU, one of the two banknoteissuing banks here, has opened two more branches so far this year. Macau was among the few bright spots in the disappointing results of CGD, one of Portugal’s biggest financial services conglomerates. The group’s operations in some emerging markets in Africa and Asia, which include Macau and East Timor, made a profit of 63.5 million euros. In Asia most of the profit came from BNU, said the Portuguese new agency Lusa.

Big changes unlikely before 2015

But those contributions were not enough to offset the losses the bank had in Europe, especially in Spain and Portugal. CGD had losses of 277.8 million euros in the nine months to September 30, more than twice as much as a year earlier, it said. Over 40 percent of the losses, 112.5 million euros, were recorded in Spain, where its operations are being restructured, the state-owned bank said. The institution as a whole is currently going through restructuring. It has plans to selloff its insurance arm, Companhia de Seguros Fidelidade Mundial SA, which also has a branch here. V.Q.

t has been a week since Chief Executive Fernando Chui Sai On surprisingly appointed businessman Peter Lam Kam Seng as the 11th member of Executive Council. The chief executive has dodged journalists at every public event he has attended since, and has remained stubbornly silent on the reasons for his decision. The only statement by Mr Chui’s staff on the appointment basically said: “I did it because I could.” Macau deserves better. It deserves to be told why Mr Lam was appointed to the Executive Council four years after the other 10 members – and why now. After all, the members will step down in December next year, when the chief executive’s term ends. Probably, just to be re-appointed. Is it because someone else will be leaving the council before then? Is the chief executive trying to get better advice from Mr Lam, a property developer, on how to fix the government’s chronic inability to get anything built properly? Is Mr Chui already trying to secure unanimous support for his re-election in 2014 by appointing Mr Lam, a member of the committee that picks the chief executive? At least we can say that the way Mr Chui made this decision is in perfect harmony with the overall lack of transparency that has always plagued the Executive Council. The chief executive appoints all members of the council, and he must listen to them before making important decisions, including approving subsidiary legislation or submitting bills to the Legislative Assembly. But the council has gone beyond its purely advisory role and now plays an active part in changing legislation before it is made public and sent to the rubber-stamp Legislative Assembly. The assembly has been rightly criticised in the past for not opening the doors of its committees to journalists, thus ensuring that the public never really knows fully what is going on. But that seems like child’s play compared with the opaqueness of the Executive Council. There are no public records whatsoever of when the council meets, which members are present, what issues are discussed or what changes are made to bills. This is even more dangerous, considering that many of its members – including Mr Lam – are businessmen with significant interests to defend, and have good friends in Beijing. Government departments must hold mandatory public consultations on important bills and disclose all the opinions gathered within a set period. What is the point of doing all that consultation if, in the end, things such as the extent of Macau’s recent political reform or the domestic violence bill are really decided in shadowy meetings behind closed doors? Macau has a council that to all intents and purposes acts like a governing body, but about which we know nothing.

Macau has a council that to all intents and purposes acts like a governing body, but about which we know nothing

November 4, 2013

Macau

All-time monthly gaming record in Oct

Public prosecutions to probe ‘ghost buses’

Gross gambling revenue in first ten months close to tally achieved for whole of 2012 Michael Grimes

michael.grimes@macaubusinessdaily.com

here was an all-time monthly record of nearly 32 percent growth in Macau gambling revenue during October. It was more than two-and-a-half times the expansion rate seen in mainland visitor numbers during the Golden Week holiday that month. October’s gross revenue of 36.48 billion patacas (US$4.6 billion) surpassed the previous monthly record of 31.34 billion patacas set in March, according to data from the city’s regulator, the Gaming Inspection and Coordination Bureau. To put the numbers in perspective, Macau’s gross revenue for October was equal to the annual gross reported by Singapore’s two casino resorts combined in the whole of 2012. Macau’s casino gross for the first 10 months of 2013 now stands at approximately 297.11 billion patacas – up 18.4 percent year-onyear. It’s close to the 304.14 billion patacas revenue the city raked in for the whole of 2012. That latter number in turn was six times the revenue generated by the Las Vegas Strip that year according to data from the Center for Gaming Research at the University of Nevada, Las Vegas. Mainland visitors to Macau rose 12.1 percent year-on-year to 722,746 during October’s Golden Week holiday, according to the Macau Government Tourist Office. Total Macau visitor arrivals grew 5.7 percent to 896,847 during the

product rising 7.8 percent in the JulySeptember period from a year earlier.

The Public Prosecutions Office will launch a probe on a public bus operator that reportedly received a government subsidy for services for which no bus fares were recorded, said prosecutor-general Ho Chio Meng on Friday. There were “strong signs” of possible criminal violations after an initial analysis, he told media. The incident was first pointed out by a report released by the Commission of Audit in May. It said a bus from an unidentified public operator ran during a whole day in September last year without leaving any fare records.

Beating estimates

period, running from October 1 to October 7 inclusive. Sands China Ltd, MGM China Holdings Ltd and Wynn Macau Ltd have all reported double-digit earnings growth in casino revenue in the third quarter amid an improving Chinese economy. China’s economic growth accelerated for the first time in three quarters with gross domestic

Union Gaming Research Macau said in a note that Macau’s gaming growth for the 10 months to October 31 is now two percentage points higher than the research firm’s earlier estimate for the full year. That annual estimate made at the turn of the year, had been more bullish than those offered by some of Union Gaming’s peers. Union Gaming said it expected a strong finish to 2013. “We are currently forecasting approximately 31 billion patacas to 32 billion patacas in GGR during November and December, driven by across-theboard strength in all relevant gaming segments,” it stated. “Our forecast is driven in part by historical trends with average GGR in November and December generally running six percent-plus higher than the January to October GGR runrate,” added the research house. Some analysts produce monthly revenue forecasts garnered from unofficial industry returns on daily run rates – ahead of the official figures from the gaming bureau. Bloomberg News said on Friday that October casino revenue was in line with an average consensus of 36 billion patacas from seven analysts surveyed by the media outlet.

Service failure hits Hutchison network Users of Hutchison Telephone (Macau) Co Ltd’s mobile network had trouble sending text messages, making calls or accessing the Internet during almost an hour on Friday. The incident affected 3G network users in Macau peninsula’s southwest, Taipa and Coloane starting 6pm. Normal services started going back to normal after 6.45pm, Hutchison said. The city’s second-largest wireless network said it received 38 complaints. The Telecommunications Regulation Bureau said it had asked Hutchison to submit a preliminary report within 24 hours. This is the third incident affecting Hutchison’s network since June 2012.

Construction wages Market Share Per Operator (2012-2013) soar for residents

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct SJM

27% 28% 26% 26% 26% 27% 26% 23% 25% 24% 24% 25% 26%

Sands China 21% 21% 21% 20% 21% 21% 22% 21% 21% 23% 23% 22% 20% Galaxy

19% 16% 18% 19% 19% 18% 18% 19% 19% 20% 17% 19% 21%

Wynn

10% 12% 10% 11% 12% 11% 9% 12% 10% 10% 12% 11% 10%

MPEL

14% 14% 14% 14% 13% 14% 16% 14% 15% 13% 14% 14% 13%

MGM

9% 10% 11% 9% 10% 9% 9% 11% 11% 10% 10% 10% 9%

Total

100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

* Figures are rounded to the nearest unit, therefore they may not add exactly to the rounded total

Individual visitors offset impact of new law on tours

ainland Chinese visitors coming under the Individual Visit Scheme are playing a bigger role in the city’s economy after a new tourism law came into effect in the mainland last month, says the Macau Government Tourist Office. Maria Helena de Senna Fernandes, the bureau director, said there was a year-on-year increase in visitors last month as the rise in

individual travellers offset a decline in mainland tours. Speaking to media, she predicted travellers under the individual visit scheme will “rise to half or even more” of the overall mainland market in the future. This “reflects the mature development” of the sector, she added. Official data show that the

individual visit scheme accounted for 40 percent of all mainland visitors here last month. Since October 1 the mainland has enforced a new law banning agencies from charging unreasonably low prices or even no fares for tours. The law also applies to tour groups coming to Macau. Nonetheless, the city received over 722,000 mainland visitors during last month’s seven-day National Day holidays, 12.1 percent more than in the same period of last year. Ms Senna Fernandes added that the new law has had “no big impact” on the hotel sector apart from a few venues that focus on serving tour groups. T.L.

The wage gap between resident and migrant construction workers has widened further in the third quarter, the Statistics and Census Service announced on Friday. The average daily wage of a resident worker rose by 5.1 percent from the previous quarter to 776 patacas (US$97). In contrast the overall average wage, which includes non-residents, was at just 628 patacas. Wages of local workers have been growing faster than inflation, helping to boost their purchasing power. The average salary of resident workers rose by 7.1 percent in real terms in the last two quarters alone.

Sands China to try out electric shuttle bus Sands China Ltd and Sociedade de Transportes Colectivos de Macau SARL (TCM) are trying out an allelectric bus this month. Sands China will use the bus to shuttle its staff around, beginning today. The trial of the zero-emission, battery-powered bus is one of several green projects by Sands China, the company said in a press release. The senior vice-president of operations for the Venetian Macao and Sands Cotai Central, Mark McWhinnie, said: “If all goes well, an initiative like this has the potential to be the first step toward running a fleet of ecofriendly vehicles.”

November 4, 2013

Macau

‘Reinvention’ key for MGM Macau

澳門特別行政區政府 Governo da Região Administrativa Especial de Macau 澳門格蘭披治大賽車委員會 Comissão do Grande Prémio de Macau

Competitive market mandates reinvestment even before MGM Cotai’s opening: CEO

Barrier Gates Closing Schedule for the Macau Grand Prix

Michael Grimes

michael.grimes@macaubusinessdaily.com

The 60th Macau Grand Prix will be held from November 9 and 10 and 14 to 17 this year. This major international motorsport event attracts thousands of visitors to Macau each year. The event plays an important role in the promotion of the local tourism industry, as well as enhancing the image of Macau as an international city. To a great extent, the success of the Grand Prix depends on the support and cooperation of the local residents.

asino developer MGM China Holdings Ltd spent nearly as much during the third quarter on refurbishing its existing MGM Macau property on the peninsula as it did on pilings and site work for its new US$2.6 billion (20.76 billion patacas) MGM Cotai venue. “Reinvention and improvement in product and service quality have been the catalyst to maintain the attractiveness in this very competitive market,” said MGM China’s chief executive Grant Bowie – referring to the peninsula property that opened in December 2007 at a cost of around US$1.25 billion. His comments came during parent firm MGM Resorts International’s quarterly earnings call. The Nevadabased corporation is 51 percent owner of MGM China. Dan D’Arrigo, chief financial officer of MGM Resorts, added that during the three months to September 30, MGM China spent approximately US$27 million at MGM Macau and about US$31 million on MGM Cotai’s development. For the whole of 2013, the ratio of spending would be 5:1 in favour of MGM Cotai, he added. That translates as approximately US$260 million on MGM Cotai and about US$52 million on the existing property, the CFO explained. Jim Murren, chairman and CEO of MGM Resorts, said on the call that piling and site preparation on MGM Cotai should be completed “by the end of this year”, at which point work would begin on the basement and hotel tower. MGM Cotai is “on track” to open in early 2016, added Grant Bowie. Mr Bowie stated – referring to the refurbishment work at MGM Macau: “Our remodelling includes renovation and expansion of the

To minimize disruption to traffic due to the closure of some roads, the Macau Grand Prix Committee has increased the number of the barrier gates along the circuit this year, to a total of 120. However, due to certain constraints, some roads will remain closed throughout the event. The Committee seeks the understanding of motorists and asks for attention to be given the closing schedule for all barrier gates, as well as to respect the temporary signage and instructions from the Traffic Authorities.

6th November (Wed) Time

Av. da Amizade

Est. de Cacilhas

Supreme Lounge, which has been very successful for us, and we expect this to be completed in 2014.” The MGM CEO added it was “an exclusive area dedicated to our high-margin, premium market customers”. In the current market that usually means high-limit baccarat players who are affluent, but not necessarily rich enough to qualify for the VIP rolling chip programmes of the local junkets. But Mr Bowie indicated that initially the extension to the Supreme Lounge would focus on high stakes slot players. He said “at this stage” the Supreme Lounge extension was “primarily focused on premium slots”. “…that’s where it seems to be growing at the moment. At the moment, it’s not for tables,” he added. MGM Macau’s slot handle increased by 10 percent during the third quarter, said Mr Bowie. But he added market-wide there had recently been some “flattening” in slot demand that required reexamination of product mixes.

Est. D. Maria II

15：00

Lawrence Ho closes Russian casino deal M

Rua dos Pescadores

Av. da Amizade

Location

Notice

Exit from the garage of Hotel Grand Lapa

‫۝‬

Entrance and exit from the World Trade Center

‫۝‬

Est. de Cacilhas

Access

Depósito de Pólvora Exit from Seaview Garden garage

‫۝‬

Exit from the garage of Correios de Macau

‫۝‬

No Access

Construction site Exit from Macau Water Corner near the Casino Oceanus (Av. da Amizade - Avenida do Dr. Rodrigo Rodrigues) Exit from (former) Casino Macau Palace Entrance to the Mobil gas station

‫۝‬

Limited Access

Exit from the garage of the Chong Tou San Chong Garden From the flyover near the Reservoir to Hoi Fu Garden

Notice :‫ ۝‬Removal on the 10th nightime and installation on the 12th

7th November (Thu) Time

Street

Location

Notice

Access

10：00

Est. de Cacilhas

Exit from the garage of Cheng Pek Kok (Approx.60m)

‫۝‬

Limited Access

Est. dos Parses

Exit from the garage of the Monetary Authority of Macao

No Access

Rua de Nagasaki (PJ) 15：00

20：00

acau casino developer Lawrence Ho Yau Lung has clinched an equity financing operation targeted at a Russian casino investment, two of his companies announced late Thursday. Summit Ascent Holdings Ltd told the Hong Kong Stock Exchange it has paid US$9.02 million (72.02 million patacas) for 46 percent of an entity called Oriental Regent Ltd. Mr Ho’s primary investment ve hicle M elco International Development Ltd – which holds a stake in Macau casino operator Melco Crown Entertainment Ltd – said it paid US$980,392 for five percent of Oriental Regent. The latter is a holding company that owns 50 percent of First

Street

Av. da Amizade

Limited Access

Corner next to the Hotel Landmark Plaza (Av. da Amizade- Alameda Dr. Carlos d'Assumpção)

Av. Ramal dos Mouros

Est. de Fereira do Amaral (upper top of the pavement behind Hou Kong School)

No Access

Est. dos Parses

Exit from Leng Nam School

Limited Access

Notice :‫ ۝‬Removal on the 10th nightime and installation on the 12th

8th November (Fri) Time

Street

Location

Notice

Av. da Amizade

Amizade Bridge– exit to Av. de Amizade (100m)

Exit from the garage of the Public Security Forces Affairs Bureau

Ramp to the E.R. of HCSJ

10：00 Est. de S. Francisco

Gambling Company of the Far East LLC. First Gambling in turn has a gaming licence in the Primorye region of the Russian Far East near Vladivostok. Mr Ho holds a controlling 36.81 percent share of Summit Ascent and he is also the chairman of Melco International Development. The estimated investment for the first phase of the Primorye resort – next door to China’s Heilongjiang province – is about US$130 million, according to earlier filings. It will have a 119-room hotel, approximately 800 slot machines, 25 VIP gaming tables and 40 massmarket gaming tables, according to earlier filings. V.Q.

15：00

19：00 20：00

Av. Ramal Exit of the Reservoir overpass to Baguio Court dos Mouros Est. D. Maria II Est. de Cacilhas

Main entrance of CEM Entrance to the opening of Seaview Garden

Access No Access

Limited Access

No Access

Notice : ۞Removal on the 10th nightime and installation on the 13th

Closing times and locations of the barrier gates on 9th, 10th, 14th - 17th November: Ø All barrier gates installed at the access to any public road will be closed from 03:00 until the end of the races every day. The Committee seeks the understanding of motorists for the inconvenience caused by the construction, as well as to respect the temporary signage and instructions from the Traffic Authorities. For further information, please call: 2872 8482.

November 4, 2013 April 19, 2013

Macau

Researcher calls for gaming

Brought to you by

HOSPITALITY Hotels add value The size of the hotel industry, as measured by its gross value added (GVA), has increased in recent years. GVA per hotel and GVA per room have both grown. The number of hotels has risen, especially the number of five-star hotels. The numbers of rooms and beds have risen even faster. Shadowing these trends, the average size of hotels has increased. Sufficiently detailed official data on this have been available only since 2010. Since then the number of hotels has risen by nine to 100 and the number of hotel rooms has risen by almost 30 percent to over 26,000.

Macau should tout its low taxes and offer financial incentives to create a cluster of companies that design and sell slot machines, for which Asia has a growing market, and develop software for them, says Macau Polytechnic Institute associate professor Zeng Zhonglu. Mr Zeng told Business Daily in an interview that this could be the starting point for the development of technologies suitable for other industries such as banking, and so diversify the city’s economy. He said a few Macau companies had shown interest, but that they would be insufficient as the basis for the growth of such an industry, so the government should support research and offer incentives to foreign companies to come to Macau. Luciana Leitão

leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

There are huge differences between the various classes of hotel in GVA per establishment. The average GVA per establishment of five-star hotels is three times as big as the average GVA per establishment of three-star hotels and over 300 times bigger than the average of guesthouses. Three-star hotels consistently have an average GVA per establishment bigger than four-star hotels. Last year the average three-star hotel had a GVA per establishment 22 percent greater than the average four-star hotel. The differences between the various classes of hotel in GVA per room are less pronounced. The average GVA per room in five-star hotels is only marginally bigger than the average GVA per room in three-star hotels and only 10 times bigger than the average in guesthouses. In each of the three top classes of hotel average GVA per room was a bit smaller last year than in 2011. This suggests that greater competition may have pared revenue, reducing GVA per room. J.I.D.

44.8 %

Rise in GVA per threestar hotel room, 2010-2012

You have finished your research on the development of slot machines, the findings of which you will present at the Macao Gaming Show, starting on November 14. What are your main conclusions? I have been doing research on Macau’s gaming machine industry. The government is trying its best to diversify Macau’s economy and the gaming machine industry is one of the ways to do it. Macau has a big market for gaming machines, and now the gaming industry in Asia is developing very fast, so the demand for these products is increasing. If Macau can diversify its economy in this direction, it may be a good choice. This industry does not have to be closely related to the gaming industry, because the same technology can be used to create other products, such as cash machines for banks. If Macau can develop this industry, then the gaming machine industry can use its core technology to produce machines for other industries. This is a possible path towards the diversification of Macau’s economy. When you refer to gaming machines, do you mean slot machines? We are talking about slot machines mainly, but the government’s official term is gaming machines. How do you intend to promote diversification through the development of slot machines? It is just one of the ways to promote diversification. First, there is great demand in Macau for the equipment itself. Second, the industry is developing very fast in Southeast Asian countries, so the demand for

slot machines is increasing fast. If Macau can produce technology and help manufacture slot machines, then Macau’s industry will be more diversified and have something different to offer, not only in terms of products but also job opportunities. You’re proposing to use a gaming element to promote economic diversification. Won’t this just increase dependence on gaming? No. The core technology can be used to promote a lot of other products such as cash machines, vending machines and quite a few others. Also, you can use the technology to make ordinary gaming machines not for gambling, but for recreation. In mainland China, recreational machines are very popular. The main hurdle is developing the technology here to sell it elsewhere. Macau has no experience of producing this kind of product. Of course, some businessmen are trying to get the technology. Some companies are doing well, making electronic gaming tables, which is a very narrow area. Macau can choose some areas to focus on. If the industry can get government support and follows the right course, the chances of success are great. Developing slot machines can be considered a technologyintensive industry. If you look at the number of patents in this industry, you’ll see that there are many, probably more than you’d expect. Technology is a great way for Macau companies to gain a foothold in this industry, but the technology is changing fast. It is possible for newcomers to join the industry and increase competition.

So you see room for Macau companies to jump on the bandwagon and develop this technology for a growing market? Yes – although, so far, the slot machine industry has been dominated by a few international companies. However, this technology is changing very fast, so there are always opportunities down the road. If changes are not made in time, it will be difficult to import the industry. Older technology may not be useful. Some Macau companies are very interested in this field, but the main problem is the lack of government support. The government needs to support it from the very beginning. Then, after a few years, the industry can support itself. Maybe the government can support the research. Universities can come together to set up a research lab, then use those resources to compete in the industry. It was successful in Luxembourg, for example. On one side, the government can help the local industry do research. On the other hand, you invite international companies to set up in Macau to do product design, look for technology and to do the marketing here. Manufacturing, however, should be done in mainland China or somewhere else. Production is not important, as Macau has no advantages to attract that kind of industry. But Macau has some advantages, being so close to a huge market, and the government has the financial capability to support this industry or the research. Macau has very low taxes, so if we can encourage local companies to do research and produce slot

November 4, 2013 April 19, 2013

Macau

machine industry cluster

offering should also grow to match a more diversified clientele. Are your findings only from surveys of mainland visitors? Yes, and I also talked to industry suppliers. Of course, I know Luxembourg’s experience, and it has been very successful in attracting foreign companies to Luxembourg. Luxembourg has a population smaller than Macau’s, but their industry is more diversified. Is it becoming more important for Macau to diversify its economy? Yes, of course. Gaming behaviour is changing fast. If you look at Las Vegas, the visitors are now quite different from those in 2007. Look at the new casinos built in Las Vegas. They are different from older properties. They need to meet the demands of the visitors. All the casinos used to have a theme, but the new casinos have no theme. They are changing. Caesar’s in Las Vegas is developing a recreational zone. They have the biggest Ferris wheel in the world, but no casino. This was unthinkable in the past.

machines and you can invite big international companies to set up their headquarters in Macau to do research, design and marketing, then there is a chance of success. Should they focus on developing slot machines or the core technology for these sorts of electronic machines? A key part of the slot machine is actually the software and design. As for the machine itself, it is easy to make. So Macau should concentrate on software development. The game is changing at a quick pace. So far, most slot machine designers see no advantage in designing games for Chinese. Most of their games are for Western customers. But Chinese customers are different. If Macau can change this, it can outdo Western suppliers in designing games catering to Chinese players.

Macau has a big market for gaming machines and now the gaming industry in Asia is developing very fast, so the demand for these products is increasing

Why are the present products not suitable for Chinese customers? I don’t play slot machines in Macau, as I’m not allowed. But I did a survey of mainland visitors. I asked them why they didn’t play slot machines in Macau, and most of the respondents said they didn’t know how to play. The second

reason is they have no time. If they can make more games in Chinese and give some introduction about how to play the games, and give them a design familiar to Chinese customers, then this industry has great potential to grow. How many mainland visitors did you survey? I did two surveys. In the first one, we questioned 1,200 people. In the second survey, we had more than 2,000 respondents. Some people say you don’t need to know how to play, you just play, but many visitors think they need to know the game first. At least they could have some instructions: not very long, just a few sentences on how to begin, so more visitors can play slot machines. First, the respondents say they don’t know how to play. Second, they say they have no time, because visitors from the mainland come to Macau every three months. Once they get here, they are actually very busy so, if they play, most of them will go to the tables, because you can learn by looking at others. But slot machines are difficult to learn. Also, table games are more exciting. How about in terms of regulations, is there any kind of obstacle to the development of this industry in Macau? I don’t foresee any problems. Licences are for opening casinos. If they produce machines, they have to go through the certification process. And the government can change the regulations according to the needs of the market and the industry. This is not a problem that could hamper the development of the industry here. You said there is already interest from local companies. What about foreign companies? I’m not quite sure international companies are interested in bringing their research to Macau, but the government should introduce incentives and take measures to encourage them. If you want to develop the industry, local companies alone won’t be enough for it to grow. If you want to develop this industry, you need

a cluster of companies. They come together here and they compete against each other, not only in Macau but also in other markets. What kind of incentives should the government offer? Macau has very low taxes and the government can also set a policy of buying locally. In Las Vegas, when people are building new hotels, the government encourages them to buy locally when buying materials. They use the work of local artists in Nevada and Las Vegas. A policy of buying locally can apply to slot machines. They should be required to buy from local companies as a way to promote the industry here? Yes, for every 100 slot machines, you should have a certain percentage from local producers. Of course, just these two things are not enough, but we can think about supporting research. In Luxembourg, if foreign companies are doing research, the government gives financial support. Usually, Luxembourg’s government supports 25 percent of the research. If you have joint ventures or cooperation programmes with universities, the funding from the government is as much as 40 percent of the total research costs. Of course, maybe there are other incentives, but my idea is not a finished proposal, it’s just an initial idea. A rule banning slot machine parlours from residential areas was introduced recently. Will this hinder the development of the industry? Casinos can teach customers how to play slot machines and visitors can learn. Gradually, the younger generation will become more comfortable with slot machines, so it is a segment of the market that has great potential to grow. If the market is profitable, then casino operators will want to install more slot machines. There’s a limit on tables but not slot machines. The gaming industry itself should diversify and not be too reliant on high-rollers. It must diversify away from the gaming tables into the slot machine market. Of course, the non-gaming entertainment

Is the market here also changing? Macau is also changing, but not in the same way as Las Vegas. According to my survey, the visitors to Macau are actually changing. The younger generation is less interested in gambling. Also, the high-rollers now are different from the past. In what way are the high-rollers different now? In the very beginning, around 2007, a high percentage of gamblers were government officials or managers of state-owned enterprises. Now, most of the gamblers from mainland China are businessmen. Is that a result of Beijing’s crackdown on corruption? Yes, but also because they are learning. In the past two or three years, even private businessmen have shown different behaviour. In the past, they were the bigger gamblers, but in the past two years more gamblers have been betting less money. Is the trend in Macau towards more mass-market players? Yes, I think Macau is going in that direction. In the end, Macau will be more like Las Vegas. Macau has what it takes to meet this new demand? Actually, the profile of the visitors coming here is also changing. Half of mainland visitors to Macau say they do not come to gamble. In Las Vegas, just 26 percent of the people going to a casino don’t gamble. In Macau, according to my survey, half of the visitors do not come to gamble. What are they doing here? The highest percentage say they come here to shop. In Las Vegas, to satisfy new demand from visitors, they have new nightclubs, more restaurants, and they have more resident shows by famous artists or singers. For example, if you are a famous singer at the peak of your career and Las Vegas invites you to stay, they call this a residence. Macau can do the same thing, so Macau should diversify through shows, shopping and restaurants. Of course, one of the important things for Macau is timing. If you develop things too fast, you may lose money. But if you develop too late you also lose money, because visitors won’t come. Macau must monitor the market very closely and it must respond to changes in time.

November 4, 2013 April 19, 2013

Greater China

Li vows to deepen reforms C

hina’s economy will keep growing at mid- to highspeed in coming years, Premier Li Keqiang said on Friday, promising to lead the world’s second-largest economy on a road of “comprehensive reform”. Speaking to a group of Chinese and foreign business leaders, Mr Li said China would further reform its government finances, financial markets and industry, among other areas. “For several years in the future, China’s economy shall continue to grow at mid- to high-speed,” he said. China’s maturing economy is set to grow at its slackest pace in 23 years this year, at 7.5 percent, as its export sales falter on fragile global demand. The government has said the slowdown has been partly engineered to make room for retooling the economy to ensure future growth is cleaner, more sustainable, less dependent on heavy investment and more reliant on consumption. “We will comprehensively deepen reform,” Mr Li said, adding that the areas mentioned were those that had drawn interest from the public. His comments came as China’s leaders prepare to meet from November 9 to November 12 at key plenum that will discuss deepening reforms.

Services accounted for about 45 percent of GDP last year

China services index rises to year’s high

Reuters

Offers further indications that the economy has stabilised

Chinese services-industry index rose to the highest level this year, adding to evidence the nation’s economic rebound is sustaining momentum as leaders prepare to map out a blueprint for reform. The non-manufacturing Purchasing Managers’ Index advanced to 56.3 in October from 55.4 in September, the Beijingbased National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing. A number more than 50 indicates an expansion. Stronger consumption and employment suggested in the report may bolster the government’s confidence that the third-quarter economic recovery is holding up after two manufacturing indexes last week rose more than estimated. Top Communist Party officials will meet this week to decide policy changes that may help China avoid a sharper slowdown in its longer term expansion as the investment and export-led growth model runs out of steam. “Growth momentum will still be relatively robust” in the fourth quarter, said Lu Ting, head of Greater China economics at Bank of America Corp in Hong Kong. “The room for a further improvement in the nonmanufacturing PMI is limited so we should still avoid being too bullish,” he said, pointing to a decline in new orders and a contraction in export orders in yesterday’s report.

Growth slide Mr Lu estimates gross domestic product will rise 7.7 percent in the fourth quarter from a year earlier, down from 7.8 percent in the JulySeptember period. The pace could rebound to close to 8 percent in the

first half of next year due partly to a low comparative base with 2013, he said. China’s GDP will increase 7.6 percent this year, according to the median estimate of 52 economists surveyed by Bloomberg last month. That’s down from 7.7 percent in 2012 and the same pace as 1999, which was the weakest expansion since 1990. Growth may slide to 7.4 percent in 2014, according to

The room for a further improvement in the non-manufacturing PMI is limited so we should still avoid being too bullish Lu Ting, Bank of America

the median projection of 47 analysts. President Xi Jinping said on Saturday he’s confident China will show “sustainable and healthy economic growth,” according to a report from the Xinhua news agency. The nation is transforming its mode of development and readjusting its economic structure through a new style of industrialisation, urbanisation, technology and agricultural modernisation, he said. Yesterday’s report follows two manufacturing PMIs released on Friday. An index from HSBC

Holdings Plc and Markit Economics rose at the fastest pace since March. The federation’s gauge advanced to an 18-month high driven by faster output, while measures of new orders and export orders declined.

Property inflation quickens in October

“Like the manufacturing PMI, activity in the non-manufacturing PMI appears to have run ahead of demand,” said Ding Shuang, senior China economist at Citigroup Inc in Hong Kong, pointing to a 1.8 percentage point drop in the new order sub-index and a widening gap between a gauge of business activity and new orders. “Unless demand catches up, this pace of activity expansion will not be sustainable,” he said. A gauge of business expectations in the non-manufacturing survey rose to 60.5 from a 2013 low of 60.1 in September, according to the CFLP statement. “In the next few months, the non-manufacturing economy should continue to develop at a stable pace,” Cai Jin, a vice chairman at the logistics federation said in the statement. “We still need to strengthen market training and upgrading in order to further release the potential of the services industry.” Industries including leisure, e-commerce and transport are becoming a bigger part of the economy, supporting the government’s efforts to shift the focus of growth away from investment and exports. Service industries accounted for about 45 percent of GDP last year, according to statistics bureau data, up from 41 percent in 2003. The government is seeking to increase the share to 47 percent by 2015, according to its five-year plan.

roperty inflation quickened in October, two private surveys showed, a development that could reignite fears of a real estate bubble in the world’s second largest economy. Prices of new homes in 288 major cities in the mainland rose 0.8 percent in October from the previous month, accelerating from September’s 0.4 percent increase, a poll released by E-House China, a real estate services firm, showed. From a year ago, house prices jumped 10.5 percent in October, quickening slightly from September’s 10.4 percent annual gains, E-House said. Home prices hit record highs in many cities in September, official data previously showed, putting them well beyond the reach of ordinary people despite a nearly four-year long government effort to curb price rises. A survey by China Real Estate Index System (CREIS), also released on Friday, showed average prices in the 100 biggest cites rose for the 17th straight month in October. Prices were up 1.2 percent on a monthly basis, compared with 1.1 percent in September, it showed. “Some developers have launched more middle and highend home projects in October to pursue high profit margins, pushing up home prices,” said a statement from CREIS. The signs of overheating in the property market have led some analysts to speculate the government may unveil measures during or after a key Communist Party meeting starting this week.

Bloomberg News

Reuters

Not sustainable

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Greater China Sinopec gets nod for Shanghai refinery

been purchasing solar energy assets this year. It said in July it will take a 95 percent stake in Hareon Solar Technology Co’s solar farms, which generate a combined 479 megawatts. Later, it agreed to buy 110 megawatts of projects from Jetion Solar (China) Co and Haiwei (Xinjiang) New Energy Co.

Sinopec Corp won initial approval last month from China’s top economic planner for a plan to build a US$10-billion refinery and petrochemical complex in Shanghai, two company officials said. China, the world’s largest net importer of oil, is likely to add 3 million barrels per day, or a quarter of new refining capacity, between 2013 and 2015 to fuel economic growth, industry officials and Chinese media estimate. Top Asian refiner Sinopec has started formal planning for the 400,000 barrels-per-day refinery and a 1 million tonnes-per-year ethylene project in a plan to curb pollution by shifting an old plant to Shanghai’s southern edge, the officials told Reuters last week. The new Sinopec plant, designed to process mostly imported crude oil, will be built in the Caojing industrial park, some 50 km from the centre of Shanghai. “The initial approval allows us to start planning work,” said a company official, adding that Sinopec had agreed with Shanghai authorities in 2011 to shift some of the facilities at its Gaoqiao refinery to the new site once it was ready. The official declined to be named as he is not authorised to speak to media.

Baidu’s Qunar doubles in debut Shares of Qunar Cayman Islands Ltd doubled in their market debut, underscoring revived investor interest in Chinese companies as they return to the U.S. IPO market after a series of scandals led to a collapse in listings in 2012. The number of Chinese companies listing in the United States plunged from a high of 40 in 2010 to just two in 2012 after a rash of accounting scandals and ensuing share sell-off that led to a wave of delistings. Five Chinese companies have listed on the Nasdaq and New York Stock Exchange so far this year, including Qunar, which is controlled by Chinese internet giant Baidu Inc. Qunar’s shares, which were sold at US$15 each, hit a high of US$34.99 on Friday, valuing the company at about US$11.8 billion. Qunar, which means “where are you going” in Chinese, raised about US$167 million after its offering of 11.1 million American Depositary Shares were priced at well above the expected range. Chinese online classifieds company 58.com Inc’s stock rose more than 45 percent in its debut on Thursday. “Most Chinese companies that have gone public this year have been tech or internet related companies and investors are willing to pay a little extra for these type of companies regardless of where they are based,” said Jay Ritter, a finance professor at the University of Florida.

‘Best option’

Suntech will use the proceeds to pay expenses and settle debts

Shunfeng to buy Suntech main unit Photovoltaic maker was pulled into bankruptcy in March

hunfeng Photovoltaic International Ltd, a Chinese solar company owned in part by Cheng Kin Ming, plans to buy the main unit of what was once the world’s largest photovoltaic maker for 3 billion yuan (US$492 million). Jiangsu Shungfeng Photovoltaic Technology Co agreed to buy Wuxi Suntech Power Co, according to a statement Shunfeng made to the Hong Kong Stock Exchange on Saturday. The unit of Suntech Power Holdings Co was pulled into bankruptcy in March and will use the proceeds to pay expenses and

debts it owes. The purchase will add to Mr Cheng’s control of China’s solar industry, which is struggling to cope with a plunge in prices of photovoltaic panels that gutted margins of the major manufacturers. Mr Cheng owns 30 percent of Shunfeng through a Hong Kong investment company called Fulai Investments Ltd, which also owns a 25 percent stake in LDK Solar Co, another PV manufacturer that’s burdened with US$2.7 billion in debt. Shunfeng Photovoltaic, which makes solar cells and panels, has

“This is possibly the best option for Wuxi Suntech,” Wang Xiaoting, a Beijing-based analyst at Bloomberg New Energy Finance, said by phone. “Other bidders won’t offer better bids. Shunfeng could retain most of Suntech management including key research employees. The acquisition is mainly for brand and research people.” Jiangsu Shunfeng’s bid was chosen over that of state-owned Wuxi Guolian Development (Group) Co after the administrator of the main unit of Suntech Power Holdings evaluated the offerings, according to an October 9 statement posted on the Wuxi municipal government website. Wuxi Guolian is the development arm of the city of Wuxi, which is outside Shanghai. Shunfeng has paid a deposit of 500 million yuan to the administrator of Wuxi Suntech, it said on October 9. The sale agreement, dated October 24, guarantees a payment of a further US$25 million by Wuxi Suntech to Wuxi Guolian within three months of completion. The agreement requires the approval of shareholders and of the Wuxi Intermediate People’s Court, which is overseeing the bankruptcy proceedings of Wuxi Suntech. Wuxi Suntech said it has 10.7 billion yuan of debt, the official Xinhua news agency reported on August 14, citing Yang Erguan, a representative at its insolvency and restructuring administrator group. Suntech Power was the world’s biggest solar panel maker when it defaulted on a US$541 million equity-linked bond in March. That forced the Wuxi Suntech unit into bankruptcy proceedings in China. Shunfeng said it plans to fund the acquisition by raising debt or capital or by forming a joint venture or partnership. It may also use its own resources or a combination of all the options. Bloomberg News

IMAX in home cinema deal Alibaba affiliate to offer 60 pct stake to investors The financial affiliate of Alibaba Group Holding Ltd, China’s largest e-commerce company, said it plans to offer a 60 percent stake to strategic investors. Alibaba Small & Micro Financial Services Group, the holding company of third-party payment system Alipay.com, plans to offer its workers the remaining 40 percent share, according to a statement on Alipay’s official microblog. Alipay split from Alibaba Group three years ago. Alibaba, founded by billionaire Jack Ma, is expanding into financial services. Alipay in June started offering fund products on a platform called Yu’E Bao, which translates as “leftover treasure”. Mr Ma’s stake in Alipay’s holding company won’t be higher than his holding in Alibaba Group, according to yesterday’s statement. The new ownership structure will spread equity to a broader worker base and give an incentive to employees, spokesman John Spelich said by phone.

Company is to offer home cinemas for China’s wealthy elite

hina’s newly minted rich can now get up close and personal to the movies after mega-screen maker IMAX Corp signed a deal to produce luxury home theatres in the company’s second largest market. The fifty-fifty joint venture with Shenzhen-based TCL Multimedia Technology Holdings Ltd will give Chinese the chance to watch IMAX-enhanced Hollywood blockbusters in the comfort of their homes, maybe even on the day of their world premieres. The price? At least US$250,000. The joint venture is targeting wealthy homeowners in Hong Kong, Russia, and the Middle East, but the main focus, IMAX chief executive Richard Gelfond said, is China. “China now is our second largest market in the world, and our fastest

growing market,” Mr Gelfond told Reuters. “We spend a lot of time concentrating on the Chinese market.” IMAX earns 16 percent of its revenue in China, and now has 131 screens installed there. Like other global brands, IMAX is betting on the appetite of ultra-rich Chinese for luxury goods and unique experiences. The number of Chinese millionaires rose by more than 14 percent last year to 643,000, the most recent wealth survey by Capgemini and RBC Wealth Management shows. The country is now home to the fourth largest number of high networth individuals in the world. Neither IMAX nor TCL Multimedia chief financial officer Edmond Chen would forecast how many home systems the company expects

to sell when it kicks of production in 2015. The deal was signed this week. TCL estimates annual growth for home theatre sets is likely to exceed 20 percent in the next five years. It said the market for home theatres may be about 2,000 sets now. In July, IMAX announced an agreement with local conglomerate Dalian Wanda Group Corp to build up to 120 new theatres in China. The deal would raise the number of IMAX theatres to about 400, with Wanda running around half. Mr Gelfond in September helped Dalian Wanda launch a US$8 billion production, entertainment and real estate project in the coastal city of Qingdao, surrounded by stars including Nicole Kidman and Leonardo DiCaprio. Reuters

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Asia

Indian stock market hits record high Sensex up propelled by an increased inflow of foreign capital Abhishek Vishnoi and Rafael Nam

ndia’s benchmark BSE index surged to a record on Friday as blue chips rallied on the back of strong foreign buying, in a remarkable turnaround from two months earlier, when the rupee hit record lows and threatened a crisis of confidence. The index, also known as the Sensex, has been propelled by foreign inflows of around US$3.5 billion since the U.S.Federal Reserve unexpectedly delayed tapering of its monetary stimulus. The foreign buying comes despite mixed signals in an economy growing at its slowest in a decade, with analysts seeing new challenges ahead as the central bank raises interest rates to curb stubbornly high inflation. That has made some investors cautious about whether a rally that has sent the index up 21.5 percent since a yearly low on August 28. can be sustained. “I am not too pleased with the way fundamentals are shaping up.

KEY POINTS BSE rises to record high of 21,293.88 points Surpasses previous high set on Jan. 10, 2008 Strong foreign buying sparking gains

Indian shares seen as expensive compared to regional peers

This new high is driven by only a handful of stocks which are hopelessly expensive, despite fundamentals,” said fund manager Phani Sekhar at Angel Broking. “The liquidity rush is making people accumulate stocks. If fundamentals don’t improve or liquidity tapers, then this rally won’t have many legs.” The benchmark BSE index rose as high as 21,293.88 points, a gain of 0.6 percent for the day, surpassing the previous record of 21,206.77 points on January 10, 2008. It ended Friday up 0.2 percent. Despite the record high, the Sen-

ANZ head says Aussie to stay strong A Michael Smith says Fed tapering ‘will create some volatility’

ustralia & New Zealand Banking Group Ltd chief executive Michael Smith said he expects the Aussie dollar to maintain its strength as long as the U.S. Federal Reserve keeps up monthly asset purchases. “It’s unlikely we’ll see a huge reduction or a major reduction in the Aussie dollar’s strength until there is a tapering in the U.S.,” Mr Smith

sex remains Asia’s fourth-worst performer this year in dollar terms among the exchanges tracked by Thomson Reuters, with a fall of 2.6 percent. The returns have been hurt by a weak rupee, which hit a record low of 68.85 in late August, which had sparked concerns about a currency crisis in the country. Those concerns have subsided, thanks to the delay in the Fed tapering and steps to steady the rupee taken by India’s new central bank governor Raghuram Rajan. Still, challenges to the broader economy remain. Manufacturing ac-

said in an interview broadcast yesterday on the Australian Broadcasting Corp’s Inside Business programme. “As the U.S. dollar strengthens, we’ll start to see the Aussie come off a bit.” The U.S. Federal Reserve decided it would press on with US$85 billion in monthly bond purchases, saying last week that it needs to see more evidence the U.S. economy will continue to improve. The central bank also said the economy is showing signs of “underlying strength”. While the Australian dollar fell to a three-year low of 88.48 U.S. cents on August 5 amid speculation the Fed would begin to taper bond purchases by year end, that sentiment reversed as a government shutdown in the U.S. slowed growth, prompting the Aussie to touch an almost five-month high of 97.58 on October 23. The Aussie closed at 94.38 U.S.

tivity contracted for a third straight month in October, data on Friday showed, for example. Signs of weakness are keeping the economic outlook uncertain even as other data show signs of improvement, including a report showing India’s infrastructure sector output rising at its fastest in a year. The World Bank last month slashed its growth forecast for Asia’s third-largest economy to 4.7 percent in the year ending March, below the decade low of 5 percent in the previous fiscal. The Reserve Bank of India also raised interest rates by a quarter percentage point for a second consecutive month in October, to fight accelerating inflation. Indian shares are expensive compared to regional peers, trading at about 14.4 times trailing 12-month earnings compared to 10.6 times for Asian emerging markets, Credit Suisse said. Yet blue chips have been gaining. India’s broader NSE index rose 0.1 percent, also within sight of a record high set on January 8, 2008. State-owned banks gained for a second consecutive session on Friday on hopes of stabilising asset quality, sending State Bank of India Ltd up 5 percent. Among other lenders, Bank of India rose 5.5 percent, while Bank of Baroda surged 4.5 percent. Infrastructure Development Finance Co Ltd shares jumped 6.8 percent after its September-quarter consolidated net profit beat some analyst expectations. Hero MotoCorp Ltd gained 1.1 percent after the company said October sales rose 18.2 percent. Reuters

cents on November 1. Reserve Bank of Australia Governor Glenn Stevens said last week the Aussie dollar “at some point in the future” will be “materially lower”. “I don’t think the tapering will happen until well into next year,” Mr Smith said. “It will create some volatility. There will be adjustment.” ANZ, the country’s third-largest lender by market value, has maintained its credit standards, he said. Charges for bad debts in the last year fell 5 percent to A$1.2 billion from a year ago and newly impaired assets in the year dropped 22 percent, ANZ said. “We haven’t lowered our standards,” Mr Smith said. “In fact, I think over the last few years we’ve maintained credit standards very well.” 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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November 4, 2013 April 19, 2013

Asia Oxley buys London Royal Wharf site Oxley Holdings Ltd, a Singapore-based property developer, plans to build 3,400 homes in London after buying the city’s largest mixed-use real estate site since a group of Malaysian investors agreed to purchase Battersea Power Station in June 2012. The developer bought the 40-acre (16-hectare) Royal Wharf site at the Royal Docks on the banks of the River Thames from Ballymore Properties Holdings Ltd and will build homes, offices and shops, broker Knight Frank LLP said. Oxley agreed to pay 200 million pounds (US$320 million) for the site, the developer said in a separate statement.

Japanese to build train system in Bangkok A Japanese consortium will build an urban transit system in Bangkok, as part of Japan’s drive to expand exports of railway infrastructure to the rest of Asia. East Japan Railway Co, trading house Marubeni Corp and electronics giant Toshiba Corp have landed the deal, at an estimated price of around 40 billion yen (US$405 million), the business daily Nikkei reported yesterday. Under the deal, ordered by Bangkok Metro Public Co, the consortium will construct a new 23-kilometre (14-mile) rail line in the Thai capital, with operations set to start in 2016.

India asks IBM to pay outstanding tax Indian tax authorities have asked IBM’s Indian unit to pay 53.57 billion rupees (US$866.20 million) in outstanding income tax on fiscal 2009 revenue, media reported. In an emailed statement, an IBM India spokeswoman confirmed the company had received a tax notice, but declined to comment on the amount of tax liability or the nature of the notice. “IBM does not agree with the tax department’s claims and will aggressively defend itself through the appropriate judicial process,” the IBM India spokeswoman said.

Jakarta raises minimum wage by 11 percent About seven million workers across the country are union members Kanupriya Kapoor and Fathiya Dahrul

ndonesia’s capital raised its minimum wages by 11 percent, far below demands for a 50 percent rise during a two-day strike that failed to draw the millions hoped for by some labour groups. Police put Friday’s turnout on the streets of Jakarta and neighbouring industrial areas in the thousands only, with two of the three major unions staying at work, saying a repeat of last year’s 44 percent increase could jeopardise jobs at the time when growth is slowing. Only about seven million workers across the country, with a population of 240 million, are union members. Most are part of the informal sector in a country where 40 percent of the population survives on about US$2 a day. “The wage hike isn’t that big and that might have an effect on domestic consumption… but on the whole, the impact on the economy would be much worse if businesses were forced to close because of unsustainable labour costs,” said Destry Damayanti, chief economist at PT Bank Mandiri. “When workers ask for a 50 percent increase in wages, that doesn’t reflect a rise in productivity. So that’s really bad for labour-intensive companies and for the economy as a whole. This year the increase in minimum wage [in Jakarta] is in line with inflation so I think it’s reasonable.”

Economic slowdown Inflation in Southeast Asia’s biggest economy hit 4-1/2 year highs of over eight percent after June’s sharp increase in fuel prices. Asep Kusno, of PT KMI Wire

New minimum wage to take effect in January

and Cable, a Jakarta-based cable manufacturer, welcomed the wage increase. “We were expecting an increase of about 20 percent so we had factored it into our budget for next year,” Mr Kusno, corporate secretary of the company, told Reuters. “So we won’t feel the effect of the wage hike so much this year.” Manufacturers have repeatedly warned that any big wage increases would eat away at Indonesian competitiveness. Jakarta, which is seen as a benchmark for neighbouring industrial districts, raised the monthly minimum wage in the capital to 2.4 million rupiah (US$211), to take effect in January. The announcement was made by Jakarta’s hugely popular governor Joko “Jokowi” Widodo who opinion

polls show would easily win next year’s presidential election if he runs. He has not yet been nominated but there is widespread speculation the opposition PDI-P party will choose him as its candidate. “It shows Governor Jokowi is not as populist as some in the business community had feared earlier,” Standard Chartered chief economist Fauzi Ichsan said. Indonesia’s economy, which has grown at an average annual 6 percent in recent years, stumbled this year because of troubles in the global economy and slowing domestic demand. Last year, labour unions mobilised hundreds of thousands of workers to push the government to raise minimum wages by an average of 44 percent in greater Jakarta to 1.9 million rupiah (US$167) a month. Reuters

Nissan cuts annual profit forecast The company also announced management changes

N Kirin eyes bigger stake in San Miguel Kirin Holdings Co is interested in buying the rest of San Miguel Brewery Inc if approached, a person with knowledge of the matter said, after the Philippine beermaker revealed several bidders are vying for the shares. Kirin, which holds about 48 percent of the brewer and is Japan’s biggest drinks maker, isn’t in talks with co-owner San Miguel Corp, the person, who asked not to be identified because the deliberations are private, told Bloomberg. The Japanese company would consider a deal should San Miguel offer to sell its 51 percent stake to Kirin, the person said.

issan Motor Co said chief operating officer Toshiyuki Shiga would step aside from the No.2 post to a job handling external affairs in a management makeover as the company grapples with quality issues amid an ambitious drive to boost market share. Japan’s second biggest automaker by sales volume said in a statement that Mr Shiga, 60, would become vice chairman. Chief executive Carlos Ghosn will stay on. Mr Ghosn has set aggressive expansion targets for Nissan to boost both global market share and its operating margin to 8 percent by endMarch 2017, but multiple recalls and a sales slowdown in China have a cast shadow over the plan. Nissan cut its net profit outlook for the year ending March 2014 by nearly 20 percent to 355 billion yen (US$3.62 billion), depressed by a sales slowdown in China and Southeast Asia and by a major vehicle re-

call it announced in September. The cut comes despite a rise in profit for the April-to-September period. The firm said that conditions in Europe remained “sluggish” while demand in emerging markets had been “volatile”. “Nissan’s results reflect improved demand for our new products in Japan and the Americas,” Mr Ghosn said in a statement. “Our new management line-up and regional organisation will ensure the company has the executive team in place to deliver the profitable growth expected from the Nissan Power 88 mid-term plan,” he added, referring to its expansion goals. To focus better on issues unique to each region, Nissan said it will also increase its number of regions to six from the current three. Among the changes, China will become an autonomous region and the Americas will be split into North and South Americas.

Nissan has been showing signs of quality issues as it rapidly expands, conducting a series of recalls including one in September targeting nearly 1 million vehicles due to an accelerator sensor flaw. Nissan’s makeover follows a similar shakeup at alliance partner Renault SA’s. Nissan did not name a new COO, saying the responsibilities would be shared among three executives. Hiroto Saikawa will become Nissan’s de facto No.2, staying on as chief competitive officer to oversee areas including R&D, purchasing, manufacturing and the supply chain, Nissan said. Executive vice president Andy Palmer will become chief planning officer, a new post overseeing global sales. Executive vice president Trevor Mann will become chief performance officer responsible for running regional operations, Nissan said. Reuters

14 14

November 4, 2013 April 19, 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 87.9

59.80 59.25

27.60 27.35

87.2

58.70

27.10 86.5

58.15

Max 59.8

average 58.787

Max 56.55

Min 57.6

average 55.575

57.60

Last 58.9

Min 54.65

Last 56.1

26.85 Max 87.9

average 86.829

PRICE

Min 26.65

Last 27

26.60

56.1

25.8

30.1

55.6

25.6

29.6

55.1

25.4

29.2

54.6

Max 26

average 25.777

DAY %

YTD %

(H) 52W

Min 25.3

Last 25.95

(L) 52W

-1.836480598

1.328049695

109.6999969

85.51999664

BRENT CRUDE FUTR Dec13

105.91

-2.692024991

1.049518176

114.4399948

95.95999908

GASOLINE RBOB FUT Dec13

254.54

-1.608040201

0.039301997

290.3199911

240.8799887

GAS OIL FUT (ICE) Dec13

906.5

-1.893939394

0.55463117

973

837

NATURAL GAS FUTR Dec13

3.513

-1.898910919

-11.01823708

4.744000435

3.469000101

288.22

-2.427299502

-3.408291163

321.1599827

276.4999866

Gold Spot $/Oz

1316.18

-1.4754

-20.9245

1754.46

1180.57

Silver Spot $/Oz

21.8825

-2.212

-27.3248

34.3838

18.2208

Platinum Spot $/Oz

1454.25

-0.7473

-4.1838

1742.8

1294.18

Palladium Spot $/Oz

NY Harb ULSD Fut Dec13

741.13

-0.3322

5.9272

786.5

597.15

LME ALUMINUM 3MO ($)

1843

-0.860677784

-11.09503136

2184

1758

LME COPPER 3MO ($)

7245

-0.055180025

-8.649602824

8346

6602 1811.75

3MO ($)

LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jan14 Dec13

1940

-0.614754098

-6.730769231

2230

14570

-0.30790284

-14.59554513

18770

13205

15.065

-0.264812976

-2.270515731

16.80999947

14.91500092

427.25

-0.233508465

-28.76198416

647

425.75

WHEAT FUTURE(CBT) Dec13

667.75

0.037453184

-18.64148645

913

635.5

SOYBEAN FUTURE Jan14

1251.5

-1.164856861

-4.392666157

1406

1169

COFFEE 'C' FUTURE Dec13

105.55

0.142314991

-32.53435602

172.8499908

104.25

25.2

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

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

Max 30.25

average 29.45

Min 28.9

Last 29.5

28.8

NAME

18.25

-0.38209607

-11.32167153

20.71999931

16.69999886

ARISTOCRAT LEISU

COTTON NO.2 FUTR Dec13

76.58

-0.777403472

-2.743205486

93.72000122

74.34999847

CROWN RESORTS LT

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

15615.55

0.4489973

19.16501

15721

12471.49

NASDAQ COMPOSITE INDEX

3922.042

0.05959631

29.88986

3966.71

2810.8

FTSE 100 INDEX

6734.74

0.04917232

14.19053

6875.62

5605.589844

DAX INDEX

9007.83

-0.2888004

18.33117

9070.17

NIKKEI 225

14201.57

-0.881983

36.61688

HANG SENG INDEX

23249.79

0.1871038

CSI 300 INDEX

2384.96

TAIWAN TAIEX INDEX

KOSPI INDEX

S&P/ASX 200 INDEX

(H) 52W

(L) 52W

0.9438 1.5926 0.9123 1.3487 98.67 7.9848 7.7521 6.0992 61.73 31.2 1.243 29.435 43.21 11335 93.135 1.2305 0.84686 8.2488 10.8013 133.08 1.03

-0.8613 -0.5992 -1.0304 -1.2592 -0.4865 0.0125 0.0116 -0.0885 -0.3807 -0.2244 -0.3781 -0.0374 0 -0.5382 0.3629 0.2316 0.6719 1.2935 0.9897 0.7815 0

-9.0576 -1.5455 0.3398 2.2517 -12.7394 -0.02 -0.0193 2.1544 -10.9104 -1.9872 -1.7377 -1.3657 -5.103 -13.6039 -4.0887 -1.8708 -3.7125 -0.3794 -2.508 -14.6604 -0.0097

1.0599 1.6381 0.9839 1.3832 103.74 8.0111 7.7664 6.2566 68.845 32.48 1.2862 30.228 44.82 11730 105.433 1.265 0.88151 8.4957 11.0434 135.51 1.032

0.8848 1.4814 0.8891 1.2662 79.08 7.9818 7.7498 6.0773 52.89 28.56 1.2168 28.913 40.54 9590 81.971 1.20302 0.79607 7.8281 10.1113 100.33 1.0289

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

4.93

-2.376238

17.08

1.244813

VOLUME CRNCY

56.50793

5.12

2.56

1977178

60.07498

17.38

9.65

2037747

1.17

-0.8474576

-16.42857

1.72

0.75

462825

25.15

-0.5928854

4.356845

22.85

4474299

0.43

2.380952

62.26416

0.56

0.24

2419637

0.1430615

16.86144

7.24

4.1

41250

23.8

-0.8333333

3.030301

25.6

17.7

10906601

CHINA OVERSEAS

PRICE

YTD %

AMAX HOLDINGS LT

CHEUK NANG HLDGS

COUNTRY

DAY %

BOC HONG KONG HO CENTURY LEGEND

World Stock Markets - Indices

PRICE

Macau Related Stocks

SUGAR #11 (WORLD) Mar14

NAME

average 27.181

30.4

94.61

CORN FUTURE

Max 27.5

26.0

WTI CRUDE FUTURE Dec13

LME ZINC

85.8

Currency Exchange Rates

NAME

METALS

Last 87.1

56.6

Commodities ENERGY

Min 85.85

CHINESE ESTATES

21.1

87.6298

22.25

9.543

154000

CHOW TAI FOOK JE

12.66

-1.55521

1.768492

13.4

7.44

5238085

EMPEROR ENTERTAI

3.98

1.790281

110.582

4.66

1.48

960000

FUTURE BRIGHT

3.28

9.698997

170.6212

3.41

1.103

12408400

58.9

1.815039

94.06919

63.75

6196300

HANG SENG BK

GALAXY ENTERTAIN

128.5

-0.3875969

8.256111

132.8

110.6

982981

6950.53

HOPEWELL HLDGS

25.95

-0.5747126

-21.95489

35.3

23.2

377096

15942.6

8619.45

HSBC HLDGS PLC

85.4

-0.05851375

5.043046

90.7

73.55

8616911

2.616724

23944.74

19426.35938

HUTCHISON TELE H

3470000

0.473603

-5.469464

2791.303

2023.171

8388.18

-0.7323025

8.944472

8476.63

7061.87

MGM CHINA HOLDIN

1.123596

2039.42

0.4595855

2.121629

2063.28

1770.53

MIDLAND HOLDINGS

3.12

-1.265823

NEPTUNE GROUP

0.345

-2.816901

NEW WORLD DEV

10.72

SANDS CHINA LTD

56.1

3.46

1.764706

-2.808987

4.66

3.12

LUK FOOK HLDGS I

1.083032

14.7541

30.05

16.88

1345258

MELCO INTL DEVEL

24.6

1.026694

173.03

25.75

7.46

4364000

103.3396

12.236

5216538

-15.67568

4.29

2.68

1006000

126.9737

0.4

0.131

129335000

-0.1862197

-10.81531

15.12

9.98

19802082

1.814882

65.243

60.5

29.35

10238235

5411.123

-0.2649343

16.39452

5457.3

4334.3

4432.589

-1.730179

2.684973

5251.296

3837.735

FTSE Bursa Malaysia KLCI

1810.41

0.197028

7.191455

1826.22

1590.67

SHUN HO RESOURCE

1.65

17.85714

1.92

1.19

NZX ALL INDEX

1034.077

0.07945756

17.23525

1035.453

851.971

SHUN TAK HOLDING

4.53

0.8908686

8.114557

4.8

3.12

3997534

PHILIPPINES ALL SHARE IX

3977.12

7.519374

4571.4

3440.12

SJM HOLDINGS LTD

25.95

3.592814

46.21648

16.762

7749317

SMARTONE TELECOM

10.24

0.1956947

-27.27273

16.22

9.97

2674500

WYNN MACAU LTD

29.5

-0.8403361

40.81145

32.6

6616961

ASIA ENTERTAINME

3.96

N/A

69409

BALLY TECHNOLOGI

71.8

-1.832103

60.59048

78.03

43.16

582637 5778

JAKARTA COMPOSITE INDEX

Euromoney Dragon 300 Index Sin

627.41

-0.87

1.02

STOCK EXCH OF THAI INDEX

1429.08

-0.9564205

2.668949

1649.77

1260.08

HO CHI MINH STOCK INDEX

497.08

-0.06634366

20.14598

533.15

372.39

Laos Composite Index

1304.29

-0.3887336

7.369298

1455.82

1067.27

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

BOC HONG KONG HO

3.3

7.491859

3.6

2.99

GALAXY ENTERTAIN

7.67

1.724138

93.19899

8.11

3.468

3430

INTL GAME TECH

18.65

-0.7978723

31.61609

21.2

12.37

2512434

JONES LANG LASAL

95.35

0.157563

13.59304

101.46

72.56

361301

LAS VEGAS SANDS

69.88

-0.4841925

51.38648

73.49

37.8353

4611842

MELCO CROWN-ADR

33.39

0.6936068

98.27791

13.43

3544033

MGM CHINA HOLDIN

3.52

1.440922

101.1094

3.88

1.6651

16000

MGM RESORTS INTE

19.3

1.365546

65.80756

20.98

9.15

13836770

SHFL ENTERTAINME

23.19

0.04314064

59.93103

23.25

12.35

361916

SJM HOLDINGS LTD

3.37

2.743902

47.96173

3.6

2.1396

71080

WYNN RESORTS LTD

167.7

0.8721805

49.07992

173.38

103.34

816322

AUD HKD

USD

Hang Seng Index NAME

PRICE

DAY %

VOLUME

39.75

1.016518

14458264

CHINA UNICOM HON

ALUMINUM CORP-H

2.84

-2.068966

13874000

CITIC PACIFIC

BANK OF CHINA-H

3.62

-0.2754821

226499290

BANK OF COMMUN-H

5.68

0.1763668

14856119

BANK EAST ASIA

33.4

-0.4470939

1438690

BELLE INTERNATIO

10.72

-2.010969

11180707

BOC HONG KONG HO

25.15

-0.5928854

4474299

HANG LUNG PROPER

AIA GROUP LTD

NAME

CLP HLDGS LTD CNOOC LTD COSCO PAC LTD ESPRIT HLDGS

PRICE

DAY %

VOLUME

12.12

-0.9803922

13013799

10.7

-3.07971

8833005

0.05265929

1109765

CHINA CONST BA-H

6.05

0.4983389

187802737

18.2

0.4415011

13583615

125.4

0.32

1190494

85.4 -0.05851375

8616911

10955805

HUTCHISON WHAMPO

-0.8333333

10906601

IND & COMM BK-H

CHINA PETROLEU-H

6.36

0.4739336

109336709

CHINA RES ENTERP

27.2

-0.9107468

2583739

CHINA RES LAND

20395438

0.6711409

6271108

65.7

0.6125574

1989035

TINGYI HLDG CO

27685134

-0.4914005

6.392694

2888849

1.680672

2505781

23.3

0.9784736

4.84

23.8

-0.1417769

25.8

CHINA COAL ENE-H

CHINA OVERSEAS

1589177

422.6

TENCENT HOLDINGS

982981

CHINA MOBILE

0.2791736

5992687

1666599

HSBC HLDGS PLC

1889911

89.8

-0.5617978

1.088139

HONG KONG EXCHNG

6689501

0.6889764

14.16

-0.3875969

2133726

0.5514706

102.3

SWIRE PACIFIC-A

46.45

32740854

10.94

3266786

128.5

1.699029

SINO LAND CO SUN HUNG KAI PRO

0.8849558

HENDERSON LAND D

0.5454545

10238235

11.4

HANG SENG BK

27.65

1.814882

1396810

2138208

20.95

56.1

47715269

4539466

CHINA MERCHANT

3140124

SANDS CHINA LTD

-0.879397

0.990099

CHINA LIFE INS-H

-0.619195

0.1602564

0.7802341

HONG KG CHINA GS

DAY %

64.2

62.5

15.5

HENGAN INTL

PRICE

POWER ASSETS HOL

15.78

122.4

CATHAY PAC AIR CHEUNG KONG

NAME

97.35

0.7763975

3853453

5.42

-0.1841621

180250308

LI & FUNG LTD

10.92

-0.3649635

7528000

MTR CORP

29.95

-0.3327787

1300617

22.7

1.113586

6639276

NEW WORLD DEV

10.72

-0.1862197

19802082

CHINA RES POWER

20.25

-0.2463054

3351800

PETROCHINA CO-H

8.82

-0.6756757

107828159

CHINA SHENHUA-H

23.55

-0.2118644

12843138

PING AN INSURA-H

61.5

0.7371007

11232353

WANT WANT CHINA WHARF HLDG

MOVERS

23310.69

LOW

22954.12

0 23315

INDEX 23249.79 HIGH

VOLUME

52W (H) 23944.74 (L) 19426.35938

22950

30-October

1-November

15 15

November 4, 2013 April 19, 2013

Opinion Business

wires

Leading reports from Asia’s best business newspapers

Asahi Shimbun Moody’s Investors Service Inc said it had placed Sony Corp’s long-term credit ratings on review for downgrade. The credit ratings firm currently rates Sony at Baa3, the 10th grade from the top in a scale of 21 categories. A downgrade by one notch would drop Sony’s ratings to a “speculative” level. “The rating actions reflect the slow progress being made in improving overall profitability,” according to the announcement by Moody’s. “Weak earnings across the majority of reporting units suggests the potential for a much longer period of restructuring and financial weakness than previously expected.”

China Daily Premier Li Keqiang urged local authorities to follow the central government’s lead in reforming government functions in order to allow the market to have a bigger say, and provide a better service for the public. He said that with 334 central-level approval rights either revoked or transferred to local governments, the number of newly registered enterprises has increased by 25 percent so far from the same period last year. Of all newly registered companies, the number of privately owned ones has increased by 37 percent, fuelling a 23 percent rise in the nation’s total private investment.

Korea Herald South Korean President Park Geun-hye said she is willing to meet with North Korean leader Kim Jong-un at any time if it is necessary for moving interKorean relations forward and promoting peace on the Korean Peninsula. “However, I am going to refrain from holding talks simply for talks’ sake or holding talks as a one-off event. What is the most important is sincerity,” she was quoted as saying. The two Koreas have held two summits so far, the first one in 2000 and the other in 2007.

Taipei Times Power should be devolved to local governments to better develop regional areas, former president Lee Teng Hui said in a speech. Saying that the central government in the past had kept the majority of resources at its disposal, Mr Lee said it caused local governments to become bereft of sustainable sources of finance, starved of governmental funds due to the inequity of distribution of tax income and unable to develop localised industry. He said local governments should band together and ask the central government for more power and financial resources.

Bubbles in the broth Nouriel Roubini

Chairman of Roubini Global Economics and Professor of Economics at New York University’s Stern School of Business

s below-trend GDP growth and high unemployment continue to afflict most advanced economies, their central banks have resorted to increasingly unconventional monetary policy. An alphabet soup of measures has been served up: ZIRP (zero-interest-rate policy); QE (quantitative easing, or purchases of government bonds to reduce long-term rates when short-term policy rates are zero); CE (credit easing, or purchases of private assets aimed at lowering the private sector’s cost of capital); and FG (forward guidance, or the commitment to maintain QE or ZIRP until, say, the unemployment rate reaches a certain target). Some have gone as far as proposing NIPR (negativeinterest-rate policy). And yet, through it all, growth rates have remained stubbornly low and unemployment rates unacceptably high, partly because the increase in money supply following QE has not led to credit creation to finance private consumption or investment. Instead, banks have hoarded the increase in the monetary base in the form of idle excess reserves. There is a credit crunch, as banks with insufficient capital do not want to lend to risky borrowers, while slow growth and high levels of household debt have also depressed credit demand. As a result, all of this excess liquidity is flowing to the financial sector rather than the real economy. Near-zero policy rates encourage “carry trades” –

debt-financed investment in higher-yielding risky assets such as longer-term government and private bonds, equities, commodities and currencies of countries with high interest rates. The result has been frothy financial markets that could eventually turn bubbly.

Avoiding bubbles Indeed, the U.S. stock market and many others have rebounded more than 100 percent since the lows of 2009; issuance of high-yield “junk bonds” is back to its 2007 level; and interest rates on such bonds are falling. Moreover, low interest rates are leading to high and rising home prices – possibly realestate bubbles – in advanced economies and emerging markets alike, including Switzerland, Sweden, Norway, Germany, France, Hong Kong, Singapore, Brazil, China, Australia, New Zealand, and Canada.

It is still too early to tell whether the macro-pru policies on which they are relying will ensure financial stability

The collapse from 2007 to 2009 of equity, credit, and housing bubbles in the United States, the United Kingdom, Spain, Ireland, Iceland, and Dubai led to severe financial crises and economic damage. So, are we at risk of another cycle of financial boom and bust? Some policymakers – like Janet Yellen, who is likely to be confirmed as the next chair of the U.S. Federal Reserve – argue that we should not worry too much. Central banks, they argue, now have two goals: restoring robust growth and low unemployment with low inflation, and maintaining financial stability without bubbles. Moreover, they have two instruments to achieve these goals: the policy interest rate, which will be kept low for long and raised only gradually to boost growth; and macroprudential regulation and supervision of the financial system (macro-pru for short), which will be used to control credit and prevent bubbles. But some critics, like Fed Governor Jeremy Stein, argue that macro-pru policies to control credit and leverage – such as limits on loan-to-value ratios for mortgages, bigger capital buffers for banks that extend risky loans, and tighter underwriting standards – may not work.

Recession risk Not only are they untested, but restricting leverage in some parts of the banking system would merely cause the liquidity from zero rates to flow to other parts of it,

while trying to restrict leverage entirely would simply drive the liquidity into the less-regulated shadow banking system. According to Stein, only monetary policy (higher policy interest rates) “gets in all of the cracks” of the financial system and prevents asset bubbles. The trouble is that if macropru does not work, the interest rate would have to serve two opposing goals: economic recovery and financial stability. If policymakers go slow on raising rates to encourage faster economic recovery, they risk causing the mother of all asset bubbles, eventually leading to a bust, another massive financial crisis, and a rapid slide into recession. But if they try to prick bubbles early on with higher interest rates, they will crash bond markets and kill the recovery, causing much economic and financial damage. So, unless macro-pru works as planned, policymakers are damned if they do and damned if they don’t. For now, policymakers in countries with frothy credit, equity, and housing markets have avoided raising policy rates, given slow economic growth. But it is still too early to tell whether the macro-pru policies on which they are relying will ensure financial stability. If not, policymakers will eventually face an ugly tradeoff: kill the recovery to avoid risky bubbles, or go for growth at the risk of fuelling the next financial crisis. For now, with asset prices continuing to rise, many economies may have had as much soup as they can stand. © Project Syndicate

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November 4, 2013 April 19, 2013

Closing Thai amnesty bill passes lower house

LME enforces tighter floor trade rules

Thailand’s baht had its biggest weekly decline in a month and the benchmark stock index sank to an almost fourweek low as a bill granting amnesty for political offences spurred protests in Bangkok. Thailand’s lower house passed the bill to provide amnesty to people convicted of crimes linked to political clashes since the 2006 coup, as lawmakers from the opposition Democrat Party walked out. Several thousand protesters gathered in Bangkok on Saturday. The opposition claims the law would annul legal cases against former PM Thaksin Shinawatra, brother of the current premier Yingluck Shinawatra. The bill will now be debated in the Senate.

The London Metal Exchange said it will enforce tighter rules for “openoutcry” floor trading on a permanent basis following a trial to increase transparency amid regulatory pressure. The decision comes after the world’s biggest base metals exchange launched a three-month test of the new rules on its copper contract in April as part of an effort to curb sharp price moves at the end of the shouted “open-outcry” sessions. The LME, bought last year for US$2.2 billion by Hong Kong Exchanges and Clearing, has come under fire from producers, consumers and traders for its handling of a years-long crisis over its warehousing policy.

Authorities probing Asia hiring: JPMorgan

Okada teams up with Century Properties Manila-based developer not to be involved in gaming operations

entury Properties Group Inc signed a deal with a Philippine affiliate of Kazuo Okada’s Universal Entertainment Corp to develop part of a US$2 billion (16 billion patacas) gaming project, driving up the Manilalisted developer’s shares. Century signed a pact with Eagle I Landholdings Inc to develop five hectares of the Japanese billionaire’s entertainment and gaming resort project. The Manila-based developer also signed a separate deal to acquire a 36 percent interest in Eagle I, the Universal affiliate that owns the 44-hectare site. “We see this as a great investment for our shareholders, but we will not be involved in any aspect of the gaming operations,” spokeswoman Terrie FucananYu told Reuters on Friday, but gave no values for the deals. The deals will be approved once legal and regulatory requirements are met, she said. For Universal the move appeared in part aimed at addressing accusations that it had violated Philippine law by setting up dummy companies to effectively exceed the 40 percent limit on foreign ownership of land. Universal, which is being investigated by the government for possible violations of “antidummy” statues, has said it ran its Philippine business lawfully. In a separate statement, Universal Entertainment said besides the deal with Century Properties Group, it would also sell preferred stock in Eagle 1 to a company named First Paramount Holdings 888, Inc. The issue of shares to the two companies would leave more than 60 percent of Eagle 1 in Philippine hands, a move that would “create a m o r e

favourable situation in response to the land ownership requirements,” Universal said.

Residential condos Century Properties, a company led by the family of businessman Jose Antonio, held talks with Mr Okada after failed negotiations between the Japanese tycoon and the Gokongwei-led Robinsons Land Corp. Robinsons Land was seeking a majority stake not only in Eagle I’s property but was also interested in Mr Okada’s Tiger Resorts, Leisure and Entertainment Inc for the casino operations. Those negotiations collapsed in May. The U.S. Federal Bureau of Investigation and its Philippine counterpart, the National Bureau of Investigation, have been running separate probes of Mr Okada – a former director of Wynn Macau Ltd – and his companies on suspicion that bribes w e r e paid to advance

Universal’s casino project on Manila Bay. Universal and Okada have denied those allegations. Mr Okada’s desire to press ahead with his own casino project in Manila was cited by Wynn Resorts Ltd as one of the reasons that the company unilaterally cancelled his 20 percent Wynn stake – with a market value at the time estimated at US$2.7 billion – in return for a promissory note payable in ten years at a 30 percent discount to the valuation. In a statement on Friday, Century Properties said it would develop luxury retail and residential properties running into more than 300,000 sq.m. of gross floor area upon completion and will be issued with 432 million preferred shares. Shares in Century Properties rose 5.2 percent in Manila trading, outperforming a weaker benchmark index. Century Properties has 28 projects in various stages of construction in mixeduse developments in Manila, the capital, and the nearby southwestern province of Cavite. Century’s twin deals with Mr Okada’s Eagle I allow the developer a foothold in the Manila Entertainment City, one of the sites being considered to host the Asia Pacific Economic Forum summit in 2015. T.A./Reuters

JPMorgan Chase & Co said that the U.S. Department of Justice is conducting at least eight separate investigations into the bank’s activities, ranging from recruitment in Asia to its relationship with Ponzi scheme operator Bernard Madoff. The largest U.S. bank disclosed for the first time in a filing that the Justice Department is examining its energy-trading practices, which were subject to a US$410 million civil settlement with the Federal Energy Regulatory Commission in July. Investigations are also focusing on mortgage-bond sales, interest-rate rigging, the credit-derivatives market, and the bank’s trading loss last year, according to the filing. JPMorgan last week agreed to pay US$5.1 billion to settle claims from the Federal Housing Finance Agency that the bank misrepresented the quality of mortgage bonds it sold to Fannie Mae and Freddie Mac. Authorities in the U.S. and overseas are also looking at the bank’s employment of people referred by clients, potential clients and government officials as well as hiring “of certain former employees in Hong Kong, its business relationships with certain related clients in the Asia Pacific region and its engagement of consultants in the Asia Pacific region,” according to JPMorgan’s filing. South Korea, Singapore and India are among the locations where hiring practices are being scrutinised, the New York Times reported, citing unidentified people briefed on the matter.

Barclays suspends currency traders Barclays Plc has suspended three currency traders, including a chief dealer in London, amid a probe into potential foreignexchange manipulation, according to a person with knowledge of the decision. Chris Ashton, who was identified as global head of voice spot trading in a Barclays e-mail last month, and spot currency traders Jack Murray and Mark Clark were suspended, said the person, who asked not to be identified because they aren’t authorised to speak publicly about the matter. None of the three has been accused of any wrongdoing, said the person. Mr Ashton didn’t respond to messages left on his work or mobile telephones, and didn’t reply to an e-mail seeking comment. Mr Murray and Mr Clark didn’t return messages left on their work telephones or reply to e-mails. Barclays, one of the four biggest currency traders in the world, is reviewing trading over a several years and is cooperating with regulators’ requests for information, according to a statement. Regulators in the U.K., Switzerland, the U.S. and Asia are probing the US$5.3 trillion-a-day foreign-exchange market after Bloomberg News reported in June that dealers in the industry said they had been front-running client orders and attempting to rig the benchmark WM/Reuters rates by colluding with counterparts and pushing through trades before and during the 60-second windows when the benchmarks are set. Firms across the industry and regulators have been reviewing records of instant messages, e-mails, phone calls and trading data. Bloomberg News