Macau Business Daily, November 6, 2013 by Business Daily

China-Lusophone trade disputes settled here M acau will be the legal jurisdiction China will use for settling any business disputes between firms from mainland China and Portuguesespeaking countries said Gao Hucheng, the Chinese minister of Commerce. Mr Gao and representatives from seven Lusophone countries signed an action plan for cooperation for 2014-16 yesterday during the fourth ministerial conference of the Forum for Economic and Trade Cooperation between China and the Portuguese-speaking Countries. The plan will enable the two sides to “promote Macau to become an arbitration place for business disputes between firms from China and Portuguese-speaking countries,” Mr Gao told a press conference. As part of the Forum, Macau will also have

three new business centres: one for smalland medium-sized enterprises, another for logistics, and a third for convention and exhibition facilities.

China, Portuguese-speaking set new trade target Uni’s Hengqin campus to have two new faculties More on pages 4 & 5

Banks inch close to all-time profit record

www.macaubusinessdaily.com

Year II

Number 408 Wednesday November 6, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

Vitor Quintã

MOP 6.00

April 19, 2013

Macau banks are close to setting a new all-time record in profits for this year after paying smaller rates of interest on deposits, official data show. The combined operating profit of the banks increased to 650.6 million patacas (US$81.5 million) in September; up by more than half from a year earlier, the Monetary Authority of Macau announced yesterday. The banks are on track for another banner year, having made 6.05 billion patacas in the first eight months of 2013, 41.1 percent more than in the equivalent period of last year. Last year was the best ever for the banks, but in all likelihood they have already overtaken last year’s combined profit of 6.3 billion patacas and set a new record. Page 3

Luk Fook swoops in for 3D-GOLD

Unions decry Hedge fund’s piece of Paradise open market for truckers up a third

Hong Kong jewellery retailer Luk Fook Holdings (International) Ltd could pick up three new shops in Macau if, as agreed, it buys a stake in the 3D-GOLD chain. Luk Fook has agreed to pay Hong Kong Resources Holdings Co Ltd HK$301 million (US$38.8 million) for 50 percent of China Gold Silver Group Co Ltd, which operates under the 3D-GOLD brand. Luk Fook will supply “raw materials and/or finished products” to the chain. Page 2

A New York hedge fund has invested approximately HK$77.60 million (US$10 million) in P aradise Ent e rt ainm e nt Lt d. Paradise, chaired by Macau businessman Jay Chun, is the parent of casino electronic table games maker LT Game Ltd. Paradise shares jumped 13.01 percent yesterday in Hong Kong to close at HK$3.04. It’s a 32 percent premium to the HK$2.30 per share paid by Bridger Management LLC for its stake.

Permitting migrant labour to work here as truck drivers would reduce the wages of Macau drivers and endanger social stability, the Macau Federation of Trade Unions says. Over 30 representatives delivered to government headquarters yesterday a petition expressing opposition to lifting the ban on migrant labour working as drivers. The financial burden on drivers’ families could be “heavier”, said Macau Federation of Transportation president Tong Chak Sam.

Page 6

Page 7

Brought to you by

Hang Seng Index 23318

23252

23186

23120

23054

22988

November 5

HSI - Movers Name

%Day

HSBC HLDGS PLC

1.47

LENOVO GROUP LTD

0.96

CHINA PETROLEU-H

0.47

CHINA SHENHUA-H

0.21

KUNLUN ENERGY CO

-0.16

BANK OF COMMUN-H

-1.94

CHINA RES ENTERP

-2.73

CHINA RES POWER

-2.83

CATHAY PAC AIR

-2.95

WANT WANT CHINA

-4.85

Source: Bloomberg

I SSN 2226-8294

Brought to you by

2013-11-06

2013-11-07

2013-11-08

21˚ 27˚

22˚ 29˚

November 6, 2013

Macau

Luk Fook swoops in for 3D-GOLD shops The deal could mean three more shops in Macau for the jewellery retailer Vítor Quintã

vitorquinta@macaubusinessdaily.com

ong Kong jewellery retailer Luk Fook Holdings (International) Ltd could pick up three new shops in Macau if, as agreed, it buys a stake in the 3D-GOLD chain. Luk Fook has agreed to pay Hong Kong Resources Holdings Co Ltd HK$301 million (US$38.8 million) for 50 percent of China Gold Silver Group Co Ltd, which operates under the 3D-GOLD brand. If the deal, announced yesterday, goes through, Luk Fook will be able to add the three 3D-GOLD shops in Macau to the nine outlets it already has here. Luk Fook told the Hong Kong Stock Exchange it would be “pleased” to expand its network by adding the 3D-GOLD shops. Luk Fook and Hong Kong Resources have also agreed to invest no less than HK$150 million each in expanding China Gold Silver’s business. Hong Kong Resources said in a joint disclosure to the stock exchange that it intended to retain the other half of China Gold Silver and its right to appoint the company’s chairman. But the deal would give Luk Fook control of the 3D-GOLD

HK$301 mln Cost of 50 pct of China Gold Silver Group

Luk Fook and Hong Kong Resources will invest HK$300 million in China Gold Silver’s expansion (Photo: Eduardo Magalhães)

chain, in effect. Luk Fook will supply “raw materials and/or finished products” to the chain. Luk Fook will receive up to HK$30 million for providing consultancy services to China Gold Silver for an initial period of three years.

“The expertise of Luk Fook will benefit Hong Kong Resources in developing the brand name of 3D-GOLD,” the disclosure says. Hong Kong Resources said it planned to devote more of its management and other resources to property development and other

investment opportunities. It said this would enhance its business prospects and improve its liquidity and cash flow. Luk Fook will have the right to convert Hong Kong Resources bonds into shares at a cost of HK$57.1 million. The companies have three months to complete the deal. The price of Hong Kong Resources stock surged by 47 percent to 27 Hong Kong cents a share yesterday, while the price of Luk Fook stock slipped by 1.6 percent to HK$27.55 a share. With Bloomberg News

Design, architect for Casino Louis XIII Represents ‘royal red robe wrapped around crystal core’, says developer’s chairman

ouis XIII Holdings Ltd – developer of a boutique casino hotel project on the CotaiColoane border – has released an image of how it will look. At the same time the firm announced awardwinning United States-based architect Peter Marino as exterior designer of Casino Louis XIII. It will operate 66 gaming tables (50 premium mass and 16 VIP) according to regulatory filings. It will do so under a so-called ‘service agreement’ with an existing Macau concessionaire or sub-concessionaire,

although the identity of the licence provider has not so far been confirmed by the holding company. Mr Marino is the principal of Peter Marino Architect PLLC, an architecture, planning and design firm based in New York City. In 2011 Mr Marino received a MIPIM [Le marché international des professionnels de l’immobilier] Architectural Review Future Project Awards Commendation for a mixed-use development in Beirut, Lebanon, and in 2007 was honoured with two MIPIM awards (Overall

Winner and Tall Buildings) for a residential tower in New York. He has received American Institute of Architects awards for his work on projects with brands including Chanel, Ermenegildo Zegna and Louis Vuitton. In 2012 he was made a Chevalier de l’Ordre des Arts et des Lettres by the French Ministry of Culture in recognition of his significant contributions to furthering art and culture. In January a share and bond offer in Hong Kong raised HK$3.2 billion (US$413 million) toward

Airport traffic up in October T he mainland Chinese market continues to be one of the main drivers of growth in the number of passengers and aircraft landings and take-offs at the Macau International Airport. The airport handled about 414,600 passengers in October, an increase of 8 percent from a year earlier, the Macau International

Airport Co Ltd (CAM) said in a press statement yesterday. The number of passengers from mainland China and Taiwan rose by 16 percent and 10 percent respectively, the company said. Southeast Asia remains the airport’s biggest market, accounting for 39 percent of all passengers last month. During October 34 percent of

the estimated US$800 million capital costs of Casino Louis XIII. “The next milestone should be the completion of a debt deal that we

the traffic was from mainland China followed by the Taiwan market, which accounted for 27 percent. Last month’s National Day golden week holiday also brought more traffic to the airport. It handled over 90,000 passengers in the first seven days of the month, a 10 percent increase over the same period last year, the airport operator said. The number of aircraft landings and takeoffs last month went up by 10 percent from 3,727 movements a year earlier. The company said it saw “no

expect should fully fund the project,” wrote Grant Govertsen of Union Gaming Research Macau in a note a fortnight ago. M.G.

significant impact” in the passenger volume from the introduction of the new law on tourism in mainland China on October 1. In the statement, CAM confirmed that China Eastern Airlines Corp launched a route linking Macau to Kunming, capital of Yunnan province, on October 27. The airline will operate the route twice a week. Charter flights to Cambodia will be launched later this month, it added without providing any more information. T.A.

November 6, 2013 April 19, 2013

Macau

Banks inch close to all-time profit record Earnings growth could reach 15 to 20 percent this year, says executive Vítor Quintã

vitorquinta@macaubusinessdaily.com

acau banks are close to setting a new all-time record in profits for this year after paying smaller rates of interest on deposits, official data show. The combined operating profit of the banks increased to 650.6 million patacas (US$81.5 million) in September; up by more than half from a year earlier, the Monetary Authority of Macau announced yesterday. The banks are on track for another banner year, having made 6.05 billion patacas in the first eight months of 2013, 41.1 percent more than in the equivalent period of last year. Last year was the best ever for the banks, but in all likelihood they have already overtaken last year’s combined profit of 6.3 billion patacas and set a new record. An executive from one of the city’s banks told Business Daily that yearend operating profit growth would be below 41.1 percent as the banks are likely to set cash aside in order to strengthen their balance sheets. Macau banks – in common with lenders in other jurisdictions – are preparing for the introduction of the Basel III rules, that require banks across the world to hold more capital relative to their lending exposure, said the bank executive. The capital adequacy of the Macau banking industry went up by 0.48 points to 14.92 by the end of December and remains well above the international requirement of 11.5

KEY POINTS New profit record in sight Banks to set money aside Interest rates down this year points mandated under Basel III. “It is reasonable to expect banks to close the year with profit growth from 15 to 20 percent,” said the executive, who asked to not be identified because his company does not authorise him to speak to the news media.

Interest down The September growth in profit was particularly impressive because lending – a service from which banks get much of their income – rose much more slowly than did deposits. Lending rose by 0.9 percent from a month earlier to 512.2 billion patacas in September. Lending outside Macau by the city’s banks rose even more slowly; by 0.7 percent to 268.9 billion patacas. Lending outside the territory is the most profitable sort. Banks pay low interest rates on deposits here. The six-month

Macau banks on track for another bumper year

benchmark rate was about 0.55 percent at the end of September. But the high savings rates of local depositors provides funds that the territory’s banks can lend outside at interest rates higher than they could charge at home but look attractive by international standards. Last year the city’s two main banks – Bank of China Ltd and Banco Nacional Ultramarino SA – were driving up the city’s deposit interest rates in a rush to attract long-term deposits, the executive said. But this year banks are acting “more rationally” and offering lower rates, he added.

Deposits rose by 3.5 percent from August to 656 billion patacas, mostly fuelled by a jump in savings placed by non-residents. Outsiders left 13.18 billion patacas in banks here in September alone, a 20-month high. The executive downplayed the spike, calling it “a seasonal phenomenon”. Deposits by nonresidents are prone to “very large swings,” he said. As a result banks lent outsiders just 1.5 times what they had in the bank in September, down from 1.7 times in the previous month – the lowest ratio in 16 months.

Small banks to up risk post buyout Family-managed lenders conservative so far in managing credit, says Fitch Ratings Michael Grimes

michael.grimes@macaubusinessdaily.com

amily run Hong Kong banks subject to takeover bids by larger mainland or foreign entities are likely to change their corporate culture and take on more risk if such deals go through, says a note from Fitch Ratings in Hong Kong. The credit rating agency has placed the BBB+ assessment it gives to one of the takeover targets – Chong Hing Bank Ltd – on what it calls ‘ratings watch negative’ (RWN). Fitch states: “…we expect its risk appetite to rise [on a deal being completed].” “The RWN also encapsulates the potential drag on profitability and pressure on loss-absorbing capacity following the sale and lease-back of substantial property holdings,” adds Fitch. Chong Hing operates a single branch in Macau under the same name. The parent said in a Hong Kong filing on October 25 it had been offered approximately HK$11.64 billion (US$1.5 billion) by Yue Xiu Enterprises

Banco Weng Hang’s parent still in takeover talks (Photo: Manuel Cardoso)

(Holdings) Ltd for control of the institution. Guangzhou Municipal People’s Government in the neighbouring mainland province of Guangdong in its turn ultimately controls Yue Xiu. Another family-managed lender,

Wing Hang Bank Ltd, said in a filing on October 16 it was still in talks with a suitor of its own, but didn’t name it. Banco Weng Hang SA, a unit of Wing Hang, has 12 outlets in Macau. “Smaller banks in Hong Kong

have so far maintained tight risk control despite the growing competitive pressure,” says the report from Chikako Horiuchi, Fitch Ratings’ director, financial institutions. She adds: “Potential acquisitions could have an impact on these banks’ ratings if the transactions result in a shift in management strategy. In particular, a re-orientation of credit strategies, asset concentrations toward the mainland, or a perceived weakening of governance or risk controls could exert pressure on their ratings.” The Hong Kong banking sector’s gross exposure to mainland China stood at 31 percent of systemwide assets at end-June 2013, up sharply from 11 percent at end2009, said Fitch. In January Weng Hang was announced as a participant in a US$1.4 billion syndicated loan for the construction of the US$2.9 billion Studio City resort on Cotai, majority owned by Melco Crown Entertainment Ltd.

November 6, 2013

Macau

China-Lusophone trade disputes settled here First projects financed by China’s US$1 bln fund announced today Tony Lai

tony.lai@macaubusinessdaily.com

acau will be the legal jurisdiction China will use for settling any business disputes between firms from mainland China and Portuguese-speaking countries said Gao Hucheng, the Chinese minister of Commerce. Mr Gao and representatives from seven Lusophone countries signed an action plan for cooperation for 2014-16 yesterday during the fourth ministerial conference of the Forum for Economic and Trade Cooperation between China and the Portuguesespeaking Countries. The plan will enable the two sides to “promote Macau to become an arbitration place for business disputes between firms from China and Portuguese-speaking countries”, Mr Gao told a press conference. As part of the Forum, Macau will also have three new business centres: one for small- and medium-sized enterprises, another for logistics, and a third for convention and exhibition facilities, Chinese vice premier Wang Yang confirmed yesterday during his visit. Beijing will in particular encourage the territory to hold “professional exhibitions targeted at the Portuguese-speaking markets”, according to the action plan. Mr Gao did not set a date for the launch of the three centres, stressing

China and seven Lusophone countries signed 3-year cooperation plan yesterday

that the plan was still at an early stage. “Currently all we have is a consensus with the Portuguesespeaking side and we will then have negotiations among institutions at different levels to tackle the issues so that an viable proposal can be made,” he said. China’s commerce minister said Macau has a “unique role” in the business cooperation between mainland and the Portuguesespeaking countries that “is irreplaceable by any party”. “This is not only due to the cultural

edge Macau has with Portugal and the Portuguese-speaking countries but it also sits at the tip of a huge market,” mainland China, he said. Secretary for Economy and Finance Francis Tam Pak Yuen said in the same press conference he was “encouraged” and “honoured” by the important role assigned to Macau. He pledged to help implement gradually the measures included in the action plan. Mr Gao said the fund for cooperation development between China and the Portuguese-speaking

countries worth US$1 billion (8 billion patacas) – first announced in 2010 – “has already been established”. He called on Portuguese banks to join the fund’s management together with financial institutions from the mainland and Macau. Firms are also welcome to apply for the fund. The first two projects financed by the fund would be announced today, Mr Tam said. The Macau branch of Bank of China Ltd signed on Monday a financial agreement with China Development Bank Corp, the lender running the fund, the Chineselanguage newspaper Macao Daily News reported. It is necessary to strengthen promotion of the fund in the next three years, Mr Gao said. China will continue to expand investments in the Portuguesespeaking countries, he added. Chinese investments in Portuguese-speaking countries have totalled US$30 billion whereas 811 enterprises from Portuguesespeaking countries had invested in the mainland by 2012, twice as many as a decade earlier. The action plan signed yesterday sets up the target of reaching “relatively fast growth” in investments between the two sides in the next three years. The plan for the first time emphasises the importance of cooperation in green energies and environmental protection, as well as imports of movies. More emphasis on the teaching of Chinese and Portuguese languages and the development of qualified human resources are other targets in the plan. The Forum for Economic and Trade Cooperation between China and the Portuguese-speaking countries has achieved results that could not be replicated by bilateral pacts, Mr Gao said.

New target for China and lusophone world Vice-premier says the aim is to propel the value of trade to greater heights, with Macau’s help Stephanie Lai

sw.lai@macaubusinessdaily.com

hina and the Portuguese-speaking world intend to increase the annual value of their trade to US$160 billion (1.28 trillion patacas) by 2016, Chinese Vice-Premier Wang Yang said yesterday. Mr Wang said Macau would continue to drive the growth in trade by serving as a bridge between China and the Portuguesespeaking countries. He was speaking at the opening ceremony of the fourth ministerial conference of the Forum for Economic and Trade Cooperation between China and Portuguesespeaking countries, or Forum Macau, which was established in 2003. “China and the Portuguese-speaking countries have entered their most active and fruitful cooperation stage,” Mr

Wang said. “In the past decade our trade ties have greatly deepened.” He said trade between China and the Portuguesespeaking world had grown at an average annual rate of 37 percent. Trade was worth US$5.6 billion in 2002. Three years ago Forum Macau undertook to increase the annual value of trade to US$100 billion by this year. The annual value of trade rose above that target last year, reaching US$128.8 billion. “We are aiming to achieve a bilateral trade figure of US$160 billion by 2016,” Mr Wang said. He said a platform for sharing business information between China and the Portuguesespeaking countries would be established in Macau. Its purpose would be to provide linguists that

speak both Portuguese and Chinese, and to facilitate business cooperation and exchanges in all sectors, he said. Mr Wang did not say when it would be established. He said China would continue to help East Timor and the African members of the forum. China would lend these countries 1.8 billion yuan (2.35 billion patacas) at interest rates below market rates, principally for infrastructure, he said. Mr Wang said China was also willing to share with Portuguese-speaking countries the lessons of its experience in developing special economic zones. He said China would concentrate on education, agriculture, environmental protection and new sources of energy in its cooperation with Portuguese-speaking countries.

We are aiming to achieve a bilateral trade figure of US$160 billion by 2016 Wang Yang, Chinese Vice-Premier

November 6, 2013

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

Barrier Gates Closing Schedule for the Macau Grand Prix 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.

University of Macau Hengqin campus officially opened yesterday

University of Macau to add two faculties With new campus open, university looks at health sciences and design Stephanie Lai

sw.lai@macaubusinessdaily.com

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.

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)

he newly housed University of inauguration ceremony for the Macau will have more courses new campus, rector Zhao Wei said on offer with two new faculties the new campus would be able to – one for health sciences and another accommodate up to 10,000 students for design – it was announced at – a net gain of 1,400 student places the official launch of the Hengqin compared to the 8,600 students campus yesterday. enrolled at its old Taipa campus in It is not yet confirmed when the the past academic year as listed on new faculties will be launched but the institution’s website. they should be operating by the next The ratio of Macau students academic year in September 2014, to outside students will remain a university unchanged, Mr spokeswoman Zhao said in an told Business interview with Daily. th e C h i n es eThe teaching language service staff roster and of Radio Macau. the buildings As agreed and equipment with the of the Faculty of government, Health Sciences the number are ready, the of mainland spokeswoman C h i n e s e Hengqin campus added. It will undergraduates construction budget shall not exceed provide courses in the bio20 percent of medical technology field. all the students in any faculty. The The university did not release same restriction does not apply to the the specific content of the studies university’s graduate courses. planned for the health sciences Chinese vice premier Wang Yang faculty or a timeframe to begin the presided over the inauguration enrolment of students. ceremony of the university’s new The private Macau University of campus, which was originally slated Science and Technology is currently for this September. the only one here providing courses in State-owned contractor Nam Yue public health and nursing studies, as Group Co Ltd is yet to deliver all of well as two medical training centres the campus buildings and the teacher for students. residences will only be in use early The planning of the Faculty of next year, the university said. Design is not as advanced, even The government said in February though there is a building already there would no more overruns in the earmarked for the new department. Hengqin campus budget, which hit Business Daily asked the 10.2 billion patacas (US$1.3 billion). university for more information on The Commission Audit released course details and student enrolment in January a report criticising the for the second new faculty. No reply Infrastructure Development Office was forthcoming at the time the for the budget overruns. The newspaper went to press. original budget had been set at 5.8 Speaking before yesterday’s billion patacas.

MOP10.2 bln

15：00

20：00

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 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 6, 2013 April 19, 2013

Macau Brought to you by

HOSPITALITY Mainly mainlanders The number of visitors to Macau in the third quarter of this year rose in line with the trend in the preceding quarters. The number that stayed overnight was 5.3 percent higher than a year earlier and 45 percent higher than in the third quarter of 2008. The number of day-trippers was 7.9 percent higher than a year earlier and 31 percent higher than in the third quarter of 2008. The additional overnighters and day-trippers were mainly mainlanders. The number of overnighters from the mainland was 95 percent higher in the third quarter than five years before and the number of daytrippers was 70 percent higher. Of Macau’s next-biggest sources of visitors, Hong Kong sent about 8 percent fewer tourists in the third quarter than a year earlier and Taiwan sent about 6 percent fewer. So mainlanders made up a greater proportion of all visitors.

Paradise Entertainment’s chairman Jay Chun (Photo: António Mil-Homens)

Hedge fund’s little piece of Paradise up by third HK$77.6 mln investment in LT Game parent appreciates 32 pct in single day’s trading Michael Grimes

michael.grimes@macaubusinessdaily.com

Mainlanders made up about half of overnighters and day-trippers alike in 2008. In the third quarter of this year they made up just under two-thirds. The proportions of overnighters and day-trippers from Hong Kong and Taiwan shrank over the same period. The proportion of overnighters from Hong Kong contracted by almost 12 percentage points. The proportion of overnighters from Taiwan contracted slightly in the past year, but was relatively stable before. J.I.D.

17.4 %

Annual increase in Q3 day-trippers from mainland

New York-based hedge fund has invested approximately HK$77.60 million (US$10 million) in Paradise Entertainment Ltd. Paradise, chaired by Macau businessman Jay Chun, is the parent of casino electronic table games maker LT Game Ltd. Paradise shares jumped 13.01 percent yesterday in Hong Kong to close at HK$3.04. That was a 32 percent premium to the HK$2.30 per share paid by the hedge fund business – Bridger Management LLC – for its stake. The latter number was mentioned in a Hong Kong filing before the start of trading yesterday. The hedge fund’s investment is being held collectively by two funds – Swiftcurrent Partners LP, based in Delaware in the United States, and Swiftcurrent Offshore Ltd registered in the Cayman Islands. Bridger Management – according to the Hong Kong filing yesterday by Paradise Entertainment – manages the funds. The two entities subscribed in aggregate to 33,739,130 shares at HK$2.30 per subscription share. The investment represents 3.45 percent of Paradise’s existing issued share capital, and 3.33 percent of its issued share capital as enlarged. Un d er H o n g Ko n g S to ck Exchange rules only holdings of five percent or more need be declared in company filings. But following

unusual upward movement in the company’s shares on Monday, Paradise Entertainment issued a clarification after trading hours that day saying it was not planning a new public offering. It confirmed the company was looking at “a possible equity fund raising exercise” but stressed it would “not be in any form of public market offering via standard financial institutions but through a private placement of new shares”. According to Bloomberg Businessweek, Bridger Management LLC is a long-short hedge fund based in Park Avenue, New York. It was founded in 2000 by Roberto Mignone. The investment firm primarily provides its services to individuals. It also caters to high net worth individuals, investing via the public equity markets. A profile of Bridger Management on the specialist industry website hedgefundletters.com describes its management as “very reticent” about discussing investor returns, even by the standards of an already publicity-shy industry. “Mr Mignone rarely speaks about investment matters in the media,” states the website. An attempt yesterday by Business Daily to contact Bridger Management was unsuccessful. Profits at Paradise Entertainment Ltd fell 14 percent

year-on-year in the first half, on turnover that rose 27 percent.

New orders But according to filings and press releases LT Game currently has a number of new orders for its electronic multi-game products featuring a live dealer. Union Gaming Research Macau estimated in a report in May that LT Game had more than 50 percent of Macau’s current market for electronic table games. The research house added it believed the firm had an order backlog of “at least a few hundred additional ETG seats in Macau”.  LT Game is involved not only in supplying equipment in Macau but also in machine supply and revenue share deals on operation of its products outside the territory. In September, a unit of Macau casino investor Lawrence Ho Yau Lung’s Melco International Development Ltd said LT Game was supplying “30 electronic gaming machine seats” on a revenue share basis at Dreamworld Pailin casino near Cambodia’s border with Thailand. The Cambodia venue is operated by Nasdaq-listed Entertainment Gaming Asia Ltd, which is ultimately controlled by Melco International according to a November 2012 filing in the U.S.

November 6, 2013 April 19, 2013

Macau

Unions decry open market for drivers Say migrant workers behind the wheel would mean lower pay for Macau truck drivers Tony Lai

tony.lai@macaubusinessdaily.com

ermitting migrant labour to work here as truck drivers would reduce the wages of Macau drivers and endanger social stability, the Macau Federation of Trade Unions says. Over 30 representatives of 19 affiliates of the federation delivered to government headquarters yesterday a petition expressing opposition to lifting the ban on migrant labour working as drivers. In an open letter to Chief Executive Fernando Chui Sai On, the federation says: “The wages of locals in other jobs migrants are allowed to do have long suffered downward pressure.” “Many drivers are worried that if the market is opened up the financial burden on their families will be heavier,” said Macau Federation of Transportation president Tong Chak Sam. The union’s vice-president, Chio Pou Wan, said allowing migrant labour to work as drivers would “shake the foundations of society”. Official data show the average

of the Legislative Assembly session last month some members in the business camp had pressed for the lifting of the ban on migrant labour working as drivers. The trade unions are losing confidence in the government and are now demanding that the ban on migrant labour working as drivers be enshrined in law.

Enough not enough

monthly earnings of drivers or operators of heavy vehicles were 19,040 patacas (US$2,380) at the end of June. The median monthly earnings of permanent residents were 15,000 patacas. “The government promised us in 2007 that it would not allow migrant labour to work as drivers,” said Mr Chio. He declined to give any details of the government’s promise. He said that on the very first day

Last month the unions demanded that the ban on migrant labour working as croupiers also be given the force of law. Legislative Assembly members in the business camp, led by Macau Chamber of Commerce president Kou Hoi In, last month asked the government to give more attention to the shortage of drivers. The chamber of commerce published a statement in the Chinese-language Macao Daily News on Monday urging the government to permit migrant labour to work as drivers.

Mr Tong believes Macau’s labour market has enough drivers. He estimates that over 20,000 permanent residents are licensed to drive heavy vehicles. “Some bosses have said they cannot hire drivers even by offering pay of 20,000 patacas, but have they said anything about how long the hours are and the dangers of the work?” he asked. Mr Tong said employers and the government should think about how they could entice more permanent residents to work as drivers. Official data show 2,233 permanent residents passed the heavy vehicle driving test last year, and that over 11,600 have passed it in the past 10 years. But only 1,247 permanent residents work as drivers or operators of heavy vehicles. Mr Tong said making mainland and Macau driving licences valid on both sides of the border, as recently proposed, would encourage mainlanders to work here as drivers illicitly.

Corporate Macao Arts Window 2014

‘BB Forever’ at Sofitel Macau, Ponte 16

Local artists are being invited to submit work for possible display in a government-backed exhibition to be held next year. Proposals for Macao Arts Window 2014 can be a single piece of work or a single series of works. The Macao Museum of Art (MAM) under the Civic and Municipal Affairs Bureau of Macao is arranging the call for entries. The deadline for submissions is Tuesday, December 31, 2013. The Macao Arts Window programme has been active since 2012 “to encourage new creations and promote contemporary arts development in Macau by providing local artists with an open platform for exhibition and also to foster diversity,” say the organisers. The works must be original and never previously published or displayed publicly in Macau, state the organisers. “The budget for the selected works to be exhibited is set to a maximum of 70,000 patacas [US$8,767],” they add.

Sofitel Macau – a French-owned hotel property – is celebrating the life and work of one of that country’s cultural icons with a photographic exhibition. ‘BB Forever’ pays tribute to Brigitte Anne-Marie Bardot, better known simply as Brigitte Bardot. She is a former actress, singer and fashion model, and currently an animal rights activist. Ms Bardot, now aged 79, appeared in films ranging from the Englishlanguage mainstream – including the farce Doctor at Sea in 1955 with Dirk Bogarde – to 1963’s Le Mépris (Contempt) by French New Wave director Jean-Luc Godard. She was also subject of a 1959 essay by the French writer and philosopher Simone de Beauvoir, who described her as a “locomotive of women’s history” and declared her the first and most liberated woman of post-Second World War France. The exhibition is being shown in Sofitel’s eight Asian properties this year and was created with journalist and writer Henry-Jean Servat. The Macau event at Ponte 16 runs until December.

November 6, 2013 April 19, 2013

Greater China

Li warns against loose money policies Premier says country needs 7.2 pct expansion to create jobs

hina needs to sustain economic growth of 7.2 percent to ensure a stable job market, Premier Li Keqiang said as he warned the government against further expanding already loose money policies. In one of the few occasions when a top official has enunciated the minimum level of growth needed for employment, Mr Li said calculations show China’s economy must grow 7.2 percent annually to create 10 million jobs a year. That would cap the urban unemployment rate at around 4 percent, he said. “We want to stabilise economic growth because we need to guarantee employment essentially,” Mr Li was quoted by the Workers’ Daily as saying. His remarks were made at a union meeting two weeks ago but

were only published in full this week. Yet even as authorities keep an eye on growth, Mr Li sounded a warning on easy credit supply, which he said had exceeded 100 trillion yuan (US$16.4 trillion) in the world’s second-biggest economy. “Our outstanding M2 money supply has at the end of March exceeded 100 trillion yuan, and that is already twice the size of our gross domestic product,” Mr Li was quoting as saying. “In other words, there is already a lot of money in the ‘pool’, to print more money may lead to inflation.” His comments affirmed the government’s hawkish stance on inflation, and did not signal any changes in policy bias, said Tao Wang, an UBS AG economist. But they underscore the fine line China must toe to create economic growth and jobs for social stability,

while guarding against excesses that may hurt its fortunes in the long run. Powered by heavy reliance on exports and investment, Chinese authorities have long criticised the country’s US$8.5-trillion economy as unstable and on an unsustainable growth path. To retool the economy, China’s new leaders have signalled they are willing to tolerate slower expansion in exchange for cleaner growth led by consumption.

Monetary policies Buffeted by sluggish export sales and in part on the government’s deliberate attempt to slow activity, China’s economy is sagging towards its slackest pace of expansion in 23 years this year, at 7.5 percent. Mr Li reiterated that a 7.5 percent

KEY POINTS China needs 7.2 pct growth to support employment Li says outstanding M2 supply already twice of GDP Premier vows to stick to stable monetary, fiscal policies growth target for 2013 remains intact, but noted that weak exports were a risk. Exports can directly create about 30 million jobs and add another 70 million jobs in other related industries, Mr Li said.

Services industry picks up ahead of party plenum HSBC’s services PMI confirms growth shown by official figure Natalie Thomas

hina’s services industry picked up in October, a private survey showed yesterday, with gains in new business and employment providing further evidence the economy has found its footing as Beijing prepares to lay out its reform agenda for the next decade. Top leaders have pushed for stability in the economy over fast growth as they look to restructure it away from a credit and investmentdriven growth model to one led by consumer demand, with the services sector the main focus. The HSBC Holdings Plc services PMI rose to 52.6 from September’s 52.4, holding well above the 50 line that separates expansion from contraction. New business growth reached a seven-month

Leaders have pushed for stability in the economy

have made it clear they want to see industries with overcapacity, such as steel and shipbuilding, shrink. New jobs will need to be found for workers laid off in traditional industries, and so the second consecutive rise in the services PMI employment measure will be welcome. Services accounted for about 45 percent of the economy in 2012 and the sector is already the biggest employer.

Outlook improved high and employment rose for the second straight month. The survey is compiled by Markit Economics. “It has been the priority to develop the service sector,” said Kevin Lai, chief regional economist at Daiwa Securities Group Inc.

“But the progress has been slow, the economy is still very much driven by investment.” China’s leaders will lay out their reform plans at the Communist Party’s third plenary session from November 9-12. They

The PMI survey showed an improvement in the business outlook for the year ahead, though it was still below trend. “Service sectors saw modest but broad-based improvement into the fourth quarter,” HSBC chief China

Trade fair export orders hit four-year low Canton fair is the largest trade event in the mainland

xport contracts signed at a major trade fair in China hit their lowest in four years, state media reported, indicating foreign demand for the country’s goods is still weak. The value of export deals signed at the China Import and Export Fair reached 194.61 billion yuan (US$31.7 billion), the lowest since the depths of the financial crisis in 2009, the official Xinhua news agency

said after the event closed on Monday. The figure also marked a fall of three percent from the last autumn session and a 10.9 percent decline from the spring session this year, according to a statement on the fair’s website. The twice-yearly event – also called the Canton Fair after the former foreign designation for the southern city of Guangzhou – was created in 1957 and is the

largest trade event in China making it a barometer of the country’s foreign trade, Xinhua said. “The decrease from both the spring and last autumn sessions indicated that the world economic recovery remains on an uncertain and unstable course, which continues to challenge the stability and development of China’s foreign trade,” the report quoted fair spokesman Liu Jianjun as saying.

Exports to emerging markets including India, Brazil and those in Southeast Asia, generally fell year on year, with those to the Middle East leading the decrease with a drop of 15.5 percent, according to the fair’s statement. Shipments to the United States and Japan increased 11.8 percent and 42.8 percent year-on-year respectively, in contrast with a fall of 2.4 percent to the

economist Hongbin Qu said in a note accompanying the data. “This should help cement China’s growth momentum in the coming months.” The overall message tallied with the official services PMI, released on Sunday, which showed the fastest increase in 13 months and a tick up in employment. But the two surveys differed in their reports for new orders, with the HSBC/ Markit survey showing an increase to the highest level since March, while the official survey registered a fall from the previous month. The official survey is weighted towards bigger and state-owned firms and tends to come in higher than the HSBC/Markit survey, which focuses on smaller and private businesses. Yesterday’s survey followed a pair of PMIs showing activity in the manufacturing sector had also picked up in October. The official manufacturing PMI increased to 51.4 from 51.1 in September, while the final HSBC/Markit PMI increased to 50.9 from September’s 50.2. Reuters

European Union, it added. The three-week fair opened on October 15. China’s exports rose eight percent year-on-year in the first nine months of the year, slightly faster than the 7.4 percent in the same period in 2012 but far slower than double-digit increases in the previous two years, official data shows. The sluggish foreign trade performance has cast gloom on the country’s export-driven economy, with concerns rising that a recovery in the third quarter, when economic growth picked up to 7.8 percent, may not be sustainable. AFP

November 6, 2013 April 19, 2013

Greater China For every one percentage point that China generates in economic growth, it creates 1.3 million to 1.5 million jobs, Mr Li said, adding that the export sector can directly or indirectly employ up to 100 million people. “We are not seeking high-speed growth, and definitely not seeking only GDP growth. But a reasonable speed in growth is needed, and so we have ensured a reasonable range in economic expansion,” he said. China’s urban jobless rate eased to 4.04 percent at the end of September from 4.1 percent three months earlier. It is the country’s only official unemployment indicator, but analysts say it grossly underestimates the true level of unemployment as it excludes about 260 million migrant workers from its surveys. On inflation risks Mr Li was clear. “If we loosen credit, if we expand the fiscal deficit, that would be like an old saying where one carries firewood to extinguish a fire,” he was quoted as saying. “And this is why we choose to persevere with stable fiscal and monetary policies.” ‘We are not seeking high-speed growth,’ says Li Keqiang

Reuters

CLick!,and make your brand takeoff. At Goldfish | creative agency we know how important it is for brands to “fly” into the Internet. We proudly announce that we are now the exclusive concessionaire for advertising in the Macau International Airport website, the door for almost 2 000 000 Macau visitors yearly.

CONTACT

air@goldfishmacau.com +853 2833 1258

www.macau-airport.com

HTC sales forecast misses estimates

Govt may phase out sugar buying programme

TC Corp, the Taiwanese smartphone maker which posted its first loss on record last month, forecast sales that missed analyst estimates as new smartphones failed to trigger demand. Fourth-quarter revenue will between NT$40 billion and NT$45 billion (US$1.4 billion), the Taiwanbased company said in a statement yesterday. That trailed the NT$52.2 billion average of 21 analyst estimates compiled by Bloomberg. HTC’s introduction of new handsets, the sale of a stake in headphones maker Beats Electronics LLC and the release of advertising campaigns featuring Robert Downey Jr. failed to prevent its first loss since listing 11 years ago.

The company’s share of the smartphone market fell to 2.8 percent in the second quarter from 5.8 percent a year earlier, according to data from Bloomberg Industries and IDC. Losses and declining sales may continue in the first half of next year, according to analyst estimates. The gross margin in the three months ending December 31 will range from 19 percent to 21 percent, compared with estimates of 20.7 percent. Bloomberg News

hina, the second-biggest sugar consumer, may phase out a stockpiling programme that boosted inventories to a record while failing to lift domestic prices, according to an official at the country’s top planning agency. The effort cost the government almost US$3 billion in the past two years, according to an estimate by Xinhu Futures Co. It may be partially replaced by direct subsidies to cane and beet farmers as early as the crop year beginning October 2014, said Zhao Lihua, a director at the economy and trade division of the National Development and Reform Commission. While China has been buying the sweetener for the past decade to

boost incomes of 40 million sugar farmers, local prices have slumped 9.1 percent since reaching a fivemonth high on January 8. Imports climbed to a record 4.5 million metric tons in 2011-12. “We have this dilemma,” said Mr Zhao at a conference in Kunming. “The more the government stockpiles when local supply exceeds demand, the worse the oversupply becomes because we end up importing more.” Stockpiles swelled to 6 million tons at the end of September, equivalent to nearly half of the country’s output last year, according to Wanda Futures Co. China doesn’t publish stockpile data. Bloomberg News

10 10

November 6, 2013 April 19, 2013

Greater China

HK threatens sanctions against Philippines Leung Chun Ying gives deadline on hostage-victim talks

ong Kong will take action against the Philippines unless substantial progress is made within a month on compensation talks with victims of a deadly 2010 hostage crisis, Chief Executive Leung Chun Ying said. Some progress has been made in the talks between the Chinese city and the Philippines, Mr Leung said in a briefing yesterday, without specifying what actions Hong Kong may take. “We still have a long way to go,” Mr Leung said. “I fully understand the disappointment among the victims and the families, which is shared by the community at large.” Eight members of a Hong Kong tour group were killed in 2010 in Manila when a former police officer took them hostage on a bus and opened fire after hours of failed negotiations to release them. Some lawmakers in the neighbouring city are calling for measures including tightening employment permits for Filipinos, the second-biggest foreign ethnic group in the Chinese city. “Unless, within a month, there are concrete steps taken to resolve this issue, the government will take necessary actions to apply sanctions,”

Mr Leung said. The deadliest attack on foreign tourists in the Philippines, broadcast live on television, has remained a thorn in relations. The Hong Kong government has told citizens to avoid travel to the Southeast Asian nation and expressed disappointment that officials weren’t more severely punished for mishandling a rescue attempt. Mr Leung and Philippine President Benigno Aquino agreed during the Asia-Pacific Economic Cooperation summit in Bali last month to discuss the issue. Still, Mr Aquino has refused to apologise, China’s official Xinhua news agency reported on October 23.

Unless, within a month, there are concrete steps taken to resolve this issue, the government will take necessary actions to apply sanctions Leung Chun Ying, Hong Kong Chief Executive

Apology wanted The Manila city government has sent a representative to Hong Kong to discuss compensation and an apology, with both sides unable to reach an agreement on the amount. Hong Kong lawmakers will today debate a non-binding motion calling for sanctions against the Philippines, including the suspension of talks on air rights and trade, as well as cultural exchanges. “I urge the Philippines government

and/or the Manila municipal government to quickly come up with a proposal to respond to the families of the deceased and the requests of the injured,” Mr Leung said. Filipinos made up about 1.9 percent of the population in Hong Kong, with most of them working as domestic helpers, according to the 2011 census. The Philippines is looking forward to a speedy resolution of the issue,

Xinhua reported on Monday, citing the Department of Foreign Affairs in Manila. Former senior inspector Rolando Mendoza, armed with an M-16 assault rifle, had seized a bus load of tourists in August, 2010, and demanded his reinstatement after he was fired. He was shot in the head by a sniper, after an attempt to storm the bus failed. Bloomberg News/AFP

Beijing to reduce vehicle licence plates by 38 pct Part of a plan to limit the number of vehicles to 6 million by the end of 2017

hina’s capital will reduce the number of new passenger vehicles allowed on the city’s roads by 38 percent next year as part of efforts to ease pollution and traffic congestion, according to the Beijing Daily. Beijing will cut the annual number of new licence plates to 150,000 in 2014 from 240,000 now, according to the report posted on the city government’s website yesterday. By 2017, 90,000 of the plates will go to conventional autos, with the rest reserved for new-energy vehicles, the report said. China’s leaders are working to clean up its air and water to ease public anger over environment degradation, which has become

the top cause of social unrest in the country. The latest measures are part of a plan to limit the number of vehicles in Beijing to 6 million by the end of 2017, and the most stringent to be introduced in a major Chinese city since Guangzhou capped the number of new licence plates in July 2012. “They have a target to control the total vehicle number to 6 million, so they have to reduce the number of vehicles registered every year,” said John Zeng, the Shanghai-based managing director of researcher LMC Automotive. “It will make sales in cities more difficult.” Beijing will also formulate a plan to restrict the number of large

commercial vehicles and study the mechanics of a traffic congestion charge, according to the newspaper. The capital released a proposal last month to cope with severe levels of pollution. Under the plan, the city will order 30 percent of government cars off roads, close kindergartens, middle and primary schools, and halt some industrial production when such pollution is forecast.

Beijing introduced a licenceplate lottery in January 2011, with a monthly quota of 20,000 new vehicle licences. Shanghai and Guangzhou also impose restrictions on vehicle ownership, while another eight cities are also considering imposing restrictions, the state-backed China Association of Automobile Manufacturers said in July.

Unique opportunity The Fountainside

Apt. on Top Floor Approx. 180 square meters HKD 19.9 million Beijing may also introduce a traffic congestion charge

Bloomberg News

11 11

November 6, 2013 April 19, 2013

Asia

RBA holds rates, warns on Aussie strength Says lower currency needed to achieve balanced growth Wayne Cole

ustralia’s central bank held rates at a record low of 2.5 percent for a third month yesterday saying past cuts were supporting demand, but cautioned that a full recovery might not be possible without a weaker currency. The Reserve Bank of Australia’s latest protest about currency strength was enough to knock the Australian dollar down a quarter of a U.S. cent, though it would certainly favour a much larger fall to truly revive the economy. “The Australian dollar, while below its level earlier in the year, is still uncomfortably high,” RBA Governor Glenn Stevens said in a brief statement following the bank’s monthly policy meeting. “A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy.” Activity in the world’s 12thlargest economy has started to stabilise in recent months with rising asset prices, consumer spending and confidence removing the urgency for more stimulus. A Reuters poll of 23 analysts had found all expected rates to stay steady this month and a majority saw no more easing, which would end a cycle of cuts that began in

KEY POINTS RBA keeps rates at 2.5 pct for third month Governor steps up rhetoric on the currency Effects of past rate cuts still coming through

Australian dollar ‘uncomfortably high’, Glenn Stevens says

November 2011 when rates were at 4.75 percent. Financial markets have also pared back expectations of a move with interbank futures putting the probability of further easing at no more than one-in-three. Yet the stubborn strength of the local currency could prove the one factor that forces a compensating cut in rates since the market has not been cooperating with the RBA. Just last week Mr Stevens stepped up the rhetoric on the currency, warning investors it was likely to be

“materially lower” in the future due to Australia’s falling terms of trade. Still, Mr Stevens has also conceded there is little the RBA can do directly to influence currency markets. Instead he has expressed hope the U.S. Federal Reserve will get on with tapering its massive stimulus program, which would likely give a boost to the U.S. dollar against the Aussie. “The message is loud and clear, any further easing in monetary conditions they want to come from the currency, and there I think

Thailand’s top fund manager selling stocks As protests increase political risk for the economy and financial markets Anuchit Nguyen

hailand’s top-performing equity fund manager has reduced holdings of domestic shares on expectations that protests against the government’s amnesty bill will spur prolonged political conflict and curb economic growth. BBL Asset Management Co, which runs seven of the ten bestperforming Thai equity funds during the past three years, has raised cash holdings since mid-October, Voravan Tarapoom, chief executive at Bangkok-based BBL, said in an e-mail. BBL oversees about US$10 billion. The benchmark SET Index plunged 2.9 percent on Monday, the most since September 23, as an estimated 10,000 protesters marched through Bangkok’s streets. Thailand’s opposition Democrat party is rallying opponents of the bill, which would exonerate people convicted of crimes linked to political clashes since the 2006 coup that ousted former Prime Minister Thaksin Shinawatra. The government has said the law is needed to heal social divisions, while opponents say it’s designed to exonerate Thaksin and politicians who ordered a deadly crackdown on pro-Thaksin demonstrators in 2010. “The political conflict will intensify further, worsening the economic outlook,” Ms Voravan

About 10,000 protesters marched through Bangkok’s streets

said. Her firm’s BBL Bualuang TopTen Fund returned an annualised 28 percent during the past three years, the best performance among more than 200 local peers tracked by Bloomberg. “It’s still not a good time for returning to domestic equities, even after prices declined significantly to attractive levels.” The SET Index retreated to a onemonth low on Monday and trades for 15 times reported earnings, versus 12 times for the MSCI Emerging

US$25 mln

Overseas investors sold of Thai shares in a single day

we’re hostage to the Fed,” said Michael Blythe, chief economist at Commonwealth Bank of Australia. The RBA has another opportunity to address currencies in its quarterly statement on monetary policy due on Friday, a 60-odd page assessment of the local and global outlook. Australia’s A$1.5 trillion-ayear economy is in its 23rd year of uninterrupted expansion, yet the latest growth pulse of 2.6 percent is short of the 3.25-3.5 percent pace that economists consider “normal”. Reuters

Markets Index. That’s the smallest valuation gap since February 2012, according to data compiled by Bloomberg. Overseas investors sold a net US$25 million of Thai shares on Monday, a third day of outflows, according to data compiled by Bloomberg. Turnover on the Stock Exchange of Thailand averaged about 32 billion baht (US$1.02 billion) a day during the past two weeks, down 34 percent from the 12-month average. “The escalating conflict increased the political risk for the overall economy and financial markets,” Ms Voravan said. “The political concern will affect the entire stock market and every sector.” Businesses are concerned that political tension will escalate and reduce tourism, Vorapak Tanyawong, the president of statecontrolled Krung Thai Bank Pcl, the nation’s third-biggest commercial lender by assets, said. Thailand’s economic growth slowed to a 2.8 percent pace in the second quarter from 5.4 percent in the first three months of the year. In its initial draft, the law would have freed members of the public charged with crimes committed during past political clashes. A parliamentary committee amended the draft to include soldiers and politicians who oversaw deadly crackdowns on protesters, and people charged on the basis of investigations by state agencies established after the coup. The Senate may debate the bill starting November 11 and a vote might occur within 60 days, speaker Nikom Wairatpanich said. The government, led by Thaksin’s sister Yingluck Shinawatra, commands a majority in parliament through her ruling Pheu Thai party. Bloomberg News

12 12

November 6, 2013 April 19, 2013

Asia Bangladesh seeks 77pct rise in wage for garment workers Bangladesh’s wage board has proposed raising the minimum salary for garment industry workers by 77 percent to 5,300 takas (US$68) a month. A string of fatal incidents have raised concerns over working conditions and low salaries in the sector – a key contributor to the country’s economy. Workers have held various strikes in recent weeks demanding higher wages. However, the proposed increase is less than unions had demanded. They had sought more than 8,000 takas per month. “The board proposed this amount considering the present reality both from the point of owners and workers,” AK Roy, chairman of the wage board, told Reuters. The wage increase still needs to be approved by the Ministry of Labour and Employment. Factory owners have argued that while they willing to hike wages, a sharp increase would damage their competitiveness. “We will appeal to the government to consider our ability, and it should not take any decision out of emotion or political benefit,” said Arshad Jamal Dipu, a representative of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). For their part, workers have said that despite the proposed rise, the minimum wage in Bangladesh will remain among the lowest in the world. “We will urge the owners to implement it without any opposition, otherwise there will be a deadlock in the sector,” said Sirajul Islam Rony, a workers’ representative on the board.

S. Korea cabinet wants to disband leftist party The South Korean government decided yesterday to petition the constitutional court to disband a leftist political party branded as pro-North Korean. The move to try and break up the Unified Progressive Party (UPP) was approved at a cabinet meeting which agreed that the party’s objectives ran counter to the “basic democratic order of the constitution,” Justice Minister Hwang Kyo-ahn told reporters. The cabinet vote came months after a number of UPP members, including MP Lee Seok-ki, were arrested on charges of plotting an armed revolt in support of North Korea. The UPP reacted by accusing President Park Geun-hye’s government of “trampling” over democratic principles. The party also suggested it was an effort to distract attention from a widening probe into allegations that the domestic spy agency interfered in last December’s presidential election. “This is not only a suppression against the UPP but vandalism against democracy … The demise of this regime has become inevitable,” the UPP said in a statement.

Toyota to unveil colour changing car A chameleon-like vehicle that changes colour according to the driver’s mood, suggests destinations based on facial expressions, and warns of cars in blind spots forms part of Toyota Motor Corp’s vision for the future. The colour-changing car is among the concept models that Toyota plans to display at the biennial Tokyo Motor Show this month. Still a work-in-progress, the vehicle codenamed Toyota FV2 presents applications that engineers envision may come out of the automaker’s research into humanoid robots and their use of facial and voice recognition. “Given that the technology is still at a very early stage of development, it’s challenging for us to figure out the extent to which the car can read emotions,” said Takeo Moriai, a manager in Toyota’s product planning group. Toyota joins automakers including General Motors Co. in introducing computer-assisted technology that helps reduce accidents and human error on the road, and may eventually allow cars to drive themselves.

BOJ struggles to convince as Abenomics shine dims Masahiro Hidaka

alf a year after Bank of Japan Governor Haruhiko Kuroda unleashed record monetary easing, economists see the bank failing to meet its inflation target, underscoring the case for stronger steps to revive the economy. While the median estimate of BOJ board members released last week showed the bank expects consumer prices to rise 1.9 percent in the 2015 fiscal year – in line with a 2-percentin-two-years goal laid out in April – just two of 34 analysts surveyed by Bloomberg News see the target met in that timeframe. With the central bank seen standing pat on the pace of asset purchases until it can assess the impact of an April 2014 salestax bump, the onus is now on the government to sustain confidence in the Abenomics project. Prime Minister Shinzo Abe has yet to introduce legislation such as corporate-tax cuts that companies have advocated to boost Japan’s potential. “Progress on the growth strategy has been slow,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co in Tokyo. “If the delays

continue, foreign investors could lose confidence in Abenomics, and stocks could fall.” Japan’s benchmark Topix index of stocks – still the best performer among 24 developed markets this year in the aftermath of Mr Kuroda’s easing and a tumble in the yen that made exporters more competitive – trailed counterparts last month, signalling waning enthusiasm with Abenomics.

Slowing growth Fifteen of the economists surveyed said the lack of bolder steps on the growth strategy is undermining the central bank’s reflation campaign. Growth slowed to an annualised 2.1 percent in the three months through September from 3.8 percent the prior quarter, Nomura Securities Co estimated. BNP Paribas SA said the expansion likely slumped to 1.7 percent. Mr Abe said the current extraordinary Diet session would be one for “getting things done,” reflecting a focus on pushing through legislation for his growth strategy – the “third arrow” of his Abenomics project. On the table are steps to encourage corporate restructuring

to boost industrial competitiveness and the introduction of zones for deregulation in fields from medical treatment to urban development. The cabinet yesterday approved the special zone bill, Economy Minister Akira Amari told reporters. Japan needs fresh demand to offset the restrictive fiscal policy, and Mr Abe comes up short when it comes to measures to spur business investment, said Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo. The scale and speed of efforts to remove international trade barriers, lower corporate taxes and deregulate are inadequate, he said. Board members Takehiro Sato and Takahide Kiuchi said last week the median 1.9 percent price view, which strips out the effect of the sales-tax increases, was too optimistic. Sayuri Shirai, another BOJ policymaker, urged the central bank to more clearly reflect downside risks in its outlook report. “If the growth strategy continues to lag, the economy will turn down in April and I wouldn’t be surprised if stock prices started to fall heavily,” said Mr Okubo. Bloomberg News

Watchdog begins probe of Japanese megabanks

apan’s financial regulator started inspecting the nation’s three largest banks yesterday after finding Mizuho Financial Group Inc failed to end loans to gangsters. The probe covers Mitsubishi UFJ Financial Group Inc and Sumitomo Mitsui Financial Group Inc, Japan’s biggest and second-largest lenders, as well as Mizuho, which last week submitted a plan to the Financial Services Agency outlining measures to improve internal controls. “We will inspect common items, such as compliance and risk management, across the three megabanks,” Financial Services Minister Taro Aso said at a news briefing in Tokyo yesterday. “We will also examine whether Mizuho’s business improvement plan is sufficient and their response is diligent.” The agency told Mizuho on September 27 to strengthen controls after the Tokyo-based bank failed to break off 200 million yen (US$2 million) of transactions with members of crime groups through its Orient Corp consumer credit affiliate. Less than two weeks later, Mizuho said it erred in reporting that only lowerranking officials knew of the loans. Mizuho’s incorrect report to the

Lenders being investigated amid crime loan scandal

FSA “was extremely undesirable,” and the regulator will carefully consider how to respond, Mr Aso said. In its business improvement report, Mizuho outlined measures such as database sharing with the consumer credit arm and the addition of an outside director to prevent further transactions with yakuza crime syndicates. President Yasuhiro Sato will give up six months’ pay while 53 other current and former executives

will also be penalised, it said on October 28. Shares of Mizuho, Japan’s thirdlargest bank by market value, were unchanged at 205 yen in Tokyo yesterday. They have dropped 7.7 percent since the bank was reprimanded by the regulator on September 27. Mitsubishi UFJ fell 0.32 percent and Sumitomo Mitsui gained 0.11 percent. The benchmark Topix Index fell 0.1 percent. 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, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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

13 13

November 6, 2013 April 19, 2013

Asia

Philippines’ casino firm flat in market debut Shares hit by factors specific to the company, fund managers say

Company to use IPO proceeds to expand Resorts World Manila

hilippine casino operator Travellers International Hotel Group Inc had a flat debut yesterday after raising US$470 million in its initial public offering, hurt by reluctance on the part of some investors to pick up gaming stocks. The lacklustre performance could bode ill for next week’s listing of Robinsons Retail Holdings Inc, which raised US$650 million in

the country’s largest ever initial public offering. But some fund managers stressed the Traveller’s debut was hamstrung by factors specific to the company, including valuations. “It is not reflective of the overall market, because there are different factors – you also have pricing, you also have sectors,” said Vittorio Gomez, vice president and fund manager at Rizal Commercial

Banking Corp. “It being a gaming name, we also have a lot of clients who are mandated not to invest in such names,” he said. Travellers’s shares closed at 11.26 pesos (26 cents of U.S. dollar) in Manila trading, just 0.2 percent lower than its IPO price of 11.28 pesos. The broader market was also flat. Travellers, a venture between Singapore-listed Genting Hong Kong

Ltd and Philippine conglomerate Alliance Global Group Inc, will use the proceeds of the IPO to expand Resorts World Manila, the first integrated casino-entertainment complex in Manila. The city is positioning itself as an alternative to established gaming centres in the region such as Macau. The US$470 million in funds raised by Travellers also includes a greenshoe option. In July, the casino operator had postponed its IPO. The rout and subsequent volatility in global equities markets partly sparked by fears of a liquidity crisis in mainland China’s banking industry led to the postponement. At the time the company was aiming at raising up to US$854 million. The Philippines, like other countries in Southeast Asia has seen a surge in listings this year, though funds raised have not lived up to initial hopes after investor sentiment towards emerging markets cooled on worries about a pullback in the U.S. central bank’s bond-buying programme. In addition to Robinsons, three other Philippine firms will list this year. Resort hotel owner Discovery World Corp, appliance maker Concepcion Industrial Corp and Frontier Oil Corp aim to raise a combined $130 million from their IPOs. Bank of America Merrill Lynch, CIMB Group Holdings Bhd, Malayan Banking Bhd, Religare and UBS AG were joint global coordinators, international bookrunners and international lead managers for the Travellers’ offer. Reuters

14 14

November 6, 2013 April 19, 2013

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

Max 59.00

average 57.856

Max 55.50

Min 57.45

average 54.387

Last 57.70

Min 53.90

59.00

88.20

26.8

58.69

88.06

26.7

58.38

87.92

26.6

58.07

87.78

26.5

57.76

87.64

26.4

57.45

average 87.902

PRICE

WTI CRUDE FUTURE Dec13

94.57

BRENT CRUDE FUTR Dec13 GASOLINE RBOB FUT Dec13 GAS OIL FUT (ICE) Dec13 NATURAL GAS FUTR Dec13 NY Harb ULSD Fut Dec13 Gold Spot $/Oz

average 26.620

Min 26.3

Last 26.6

26.3

55.18

25.58

29.86

54.86

25.46

29.720

54.54

25.34

29.58

54.22

25.22

29.44

Max 25.7

average 25.360

DAY %

YTD %

(H) 52W

Min 25.1

Last 25.5

(L) 52W

-0.052842951

1.285209382

109.6999969

85.51999664

106.23

1.354832554

114.4399948

95.95999908

252.7

-0.047464599

-0.68385474

290.3199911

240.8799887

900.25

0.19476906

-0.138657793

973

837

3.423

-0.638606676

-13.29787234

4.744000435

3.405999899

287.75

0.118297902

-3.565803144

321.1599827

276.4999866

1312.43

-0.1005

-21.1498

1754.46

1180.57

21.627

-0.3378

-28.1734

34.3838

18.2208

1448.85

0.0829

-4.5396

1742.8

1294.18

Palladium Spot $/Oz

745.05

0.5601

6.4874

786.5

598.35

1822

-1.139446555

-12.10805596

2184

1758

Silver Spot $/Oz

LME ALUMINUM 3MO ($) LME COPPER 3MO ($)

7149

-1.32505176

-9.86004287

8346

6602

LME ZINC

1924

-0.824742268

-7.5

2230

1811.75

3MO ($)

14370

-1.372683596

-15.76787808

18770

13205

15.165

0.165125495

-1.621796951

16.80999947

14.91500092

425.75

-0.117302053

-29.01208837

647

425.25

663

0.037721614

-19.2202254

913

635.5

SOYBEAN FUTURE Jan14

1261.25

0.378034222

-3.647822765

1406

1169

COFFEE 'C' FUTURE Dec13

103.65

-0.048216008

-33.74880153

172.1499939

103.3499985

18.34

0.109170306

-10.88435374

20.71999931

16.69999886

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

WHEAT FUTURE(CBT) Dec13

SUGAR #11 (WORLD) Mar14 COTTON NO.2 FUTR Dec13

75.91

-0.052666228

-3.594107188

93.72000122

74.34999847

World Stock Markets - Indices NAME

Max 26.8

30.00

Platinum Spot $/Oz

CORN FUTURE

87.50

25.10

Max 30.00

average 29.637

Min 29.30

Last 29.65

29.30

Currency Exchange Rates

NAME

METALS

Last 88.15

25.70

Commodities ENERGY

Min 87.50

55.50

53.90

Last 54.25

Max 88.20

COUNTRY MAJOR

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

ASIA PACIFIC

CROSSES

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

0.9475 1.5966 0.9125 1.3486 98.27 7.9841 7.7516 6.1005 61.7325 31.271 1.2429 29.431 43.195 11356 93.111 1.23053 0.84467 8.2272 10.7673 132.52 1.03

-0.1896 0.0313 -0.0548 -0.1481 0.4477 0.005 0.0052 -0.041 -0.004 -0.0352 0.0724 0.0849 0.2662 -0.1849 0.6347 0.0991 0.1776 0.0814 0.1542 0.5961 0

-8.7011 -1.2982 0.3178 2.2441 -12.3842 -0.0113 -0.0129 2.1326 -10.914 -2.2097 -1.7298 -1.3523 -5.07 -13.7636 -4.064 -1.8732 -3.4629 -0.1179 -2.2002 -14.2997 -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

Macau Related Stocks NAME

PRICE

ARISTOCRAT LEISU CROWN RESORTS LT

DAY %

YTD %

(H) 52W

(L) 52W

4.85

0.8316008

16.77

-0.2379536

VOLUME CRNCY

53.96825

5.12

2.56

725408

57.16963

17.38

9.65

850966

AMAX HOLDINGS LT

1.15

-1.709402

-17.85714

1.72

0.75

1849975

BOC HONG KONG HO

24.95

-1.188119

3.526969

22.85

4508204

CENTURY LEGEND

1952000

0.425

-3.409091

60.37737

0.56

0.24

CHEUK NANG HLDGS

7.19

1.553672

20.03339

7.24

4.1

119000

CHINA OVERSEAS

23.2

-1.276596

0.4328988

25.6

17.7

13324356

CHINESE ESTATES

21.6

2.612827

92.07601

22.25

9.543

112000

CHOW TAI FOOK JE

12.6

-0.6309148

1.286177

13.4

7.44

2911817

EMPEROR ENTERTAI

3.98

-0.2506266

110.582

4.66

1.48

2335000

FUTURE BRIGHT

3.28

-0.6060606

170.6212

3.41

1.103

1407000

GALAXY ENTERTAIN

57.7

-1.451751

90.11532

63.75

5203955

HANG SENG BK

127.6

-0.2345582

7.497897

132.8

110.6

773834

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

15639.12

0.1509393

19.34488

15721

12471.49

NASDAQ COMPOSITE INDEX

3936.591

0.3709547

30.37169

3966.71

2810.8

FTSE 100 INDEX

6757.27

-0.09388464

14.57253

6875.62

5605.589844

DAX INDEX

9027.45

-0.108219

18.58891

9070.17

6950.53

HOPEWELL HLDGS

25.55

-1.351351

-23.15789

35.3

23.2

844500

NIKKEI 225

14225.37

0.1675871

36.84583

15942.6

8619.45

HSBC HLDGS PLC

86.35

1.46886

6.211558

90.7

73.55

23865339

HANG SENG INDEX

23038.95

-0.6497304

1.686148

23944.74

19426.35938

HUTCHISON TELE H

3.39

-1.166181

-4.775279

4.66

3.12

3817000

CSI 300 INDEX

2383.769

0.1392591

-5.516667

2791.303

2023.171

LUK FOOK HLDGS I

27.6

-1.428571

13.11476

30.05

16.88

2468804

MELCO INTL DEVEL

-0.4149378

166.3707

25.75

7.46

3151110

TAIWAN TAIEX INDEX

8262.2

-1.100532

7.30827

8476.63

7061.87

MGM CHINA HOLDIN

26.6

0.7575758

100.3272

12.236

2199662

KOSPI INDEX

2013.93

-0.5550151

0.845247

2063.28

1770.53

MIDLAND HOLDINGS

3.13

0.3205128

-15.40541

4.29

2.68

714000

NEPTUNE GROUP

0.32

-3.030303

110.5263

0.4

0.131

90931000

NEW WORLD DEV

10.72

-0.3717472

-10.81531

15.12

9.98

11227367

SANDS CHINA LTD

54.25

-1.898734

59.79381

60.5

29.35

9840364

S&P/ASX 200 INDEX

5431.962

0.7685698

16.84276

5457.3

4334.3

4423.288

-0.2098322

2.469511

5251.296

3837.735

FTSE Bursa Malaysia KLCI

1807.47

-0.1623942

7.017379

1826.22

1590.67

SHUN HO RESOURCE

1.65

17.85714

1.92

1.19

NZX ALL INDEX

1039.193

0.4935745

17.81526

1040.597

851.971

SHUN TAK HOLDING

4.5

1.123596

7.398567

4.8

3.12

3598141

PHILIPPINES ALL SHARE IX

3948.72

-0.17923

6.751591

4571.4

3440.12

SJM HOLDINGS LTD

25.5

-0.1956947

43.68093

16.762

3313042

SMARTONE TELECOM

10.2

-0.1956947

-27.55682

16.22

9.97

2375397

WYNN MACAU LTD

29.65

-0.3361345

41.52744

32.6

1891368

ASIA ENTERTAINME

3.96

N/A

69409

73.06

1.754875

63.40864

78.03

43.16

440822 23340

JAKARTA COMPOSITE INDEX

Euromoney Dragon 300 Index Sin

625.1

0.2

0.65

STOCK EXCH OF THAI INDEX

1406.89

1.331749

1.074764

1649.77

1260.08

HO CHI MINH STOCK INDEX

499.79

0.5472066

20.801

533.15

372.39

BALLY TECHNOLOGI

Laos Composite Index

1306.32

7.5364

1455.82

1067.27

BOC HONG KONG HO

3.3

7.491859

3.6

2.99

GALAXY ENTERTAIN

7.5

-2.216428

88.91688

8.11

3.468

715

INTL GAME TECH

19.53

4.718499

37.82639

21.2

12.37

5869728

JONES LANG LASAL

94.57

-0.8180388

12.6638

101.46

72.56

296229

LAS VEGAS SANDS

69.81

-0.1001717

51.23484

73.49

37.8353

3462764

MELCO CROWN-ADR

34.07

2.036538

102.3159

13.43

2207524

MGM CHINA HOLDIN

3.45

-1.988636

97.11004

3.88

1.6651

15314

MGM RESORTS INTE

19.29

-0.05181347

65.72164

20.98

9.15

7355133

SHFL ENTERTAINME

23.18

-0.04312204

59.86207

23.25

12.35

490161

SJM HOLDINGS LTD

3.32

-1.48368

45.76645

3.6

2.1396

4400

166.49

-0.7215265

48.00427

173.38

103.34

1035173

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

WYNN RESORTS LTD

AUD HKD

USD

Hang Seng Index NAME

PRICE

DAY %

VOLUME

38.75

-1.649746

12912518

ALUMINUM CORP-H

2.86

-0.3484321

7153483

BANK OF CHINA-H

3.61

-0.8241758

196890465

BANK OF COMMUN-H

5.57

-1.93662

34279756

BANK EAST ASIA

33.3

-1.040119

1727396

BELLE INTERNATIO

10.38

-1.518027

22155685

BOC HONG KONG HO

24.95

-1.188119

4508204

HANG LUNG PROPER

AIA GROUP LTD

NAME

PRICE

DAY %

VOLUME

-1.153213

18154786

PRICE

DAY %

VOLUME

POWER ASSETS HOL

63.15

-1.405152

10.8

-0.9174312

3934518

6702492

SANDS CHINA LTD

54.25

-1.898734

CLP HLDGS LTD

62.05

9840364

-0.72

1606349

SINO LAND CO

10.82

-1.277372

CNOOC LTD

2981590

15.44

-0.5154639

33221476

102

-0.9708738

2586687

COSCO PAC LTD

11.36

-1.045296

3335744

SWIRE PACIFIC-A

89.25

-0.8333333

1080121

ESPRIT HLDGS

14.16

-0.1410437

2045441

TENCENT HOLDINGS

411.8

-1.199616

4648027

25.8

-0.9596929

3089237

TINGYI HLDG CO

22.2

-1.769912

13932483

CHINA UNICOM HON CITIC PACIFIC

CATHAY PAC AIR

15.14

-2.948718

3830178

HANG SENG BK

127.6

-0.2345582

773834

CHEUNG KONG

121.8

-1.932367

3999272

HENDERSON LAND D

45.95

-0.7559395

1227531

CHINA COAL ENE-H

4.85

-0.4106776

20965897

92.3

-0.7526882

653432

CHINA CONST BA-H

6.02

-0.9868421

207027236

18.16

-0.7650273

7051977

CHINA LIFE INS-H

21.1

-0.2364066

35649572

CHINA MERCHANT

27.45

-1.612903

2613315

CHINA MOBILE

80.4

-0.1862197

CHINA OVERSEAS

23.2

-1.276596

CHINA PETROLEU-H

6.41

0.4702194

100785228

CHINA RES ENTERP

26.75

-2.727273

1813043

MTR CORP

HENGAN INTL HONG KG CHINA GS HONG KONG EXCHNG

125.1

-0.477327

1419869

HSBC HLDGS PLC

86.35

1.46886

23865339

11529650

HUTCHISON WHAMPO

95.85

-1.388889

4010586

13324356

IND & COMM BK-H

5.34

-1.2939

160157038

10.84

-1.811594

17722048

29.7

-1

1273605

LI & FUNG LTD

CHINA RES LAND

21.75

-0.6849315

3171716

NEW WORLD DEV

10.72

-0.3717472

11227367

CHINA RES POWER

19.92

-2.829268

3828000

PETROCHINA CO-H

8.71

-0.9101251

79830681

CHINA SHENHUA-H

23.9

0.2096436

20831124

PING AN INSURA-H

61.1

-0.407498

9421588

NAME

SUN HUNG KAI PRO

WANT WANT CHINA

11.38

-4.849498

12346858

WHARF HLDG

64.15

-0.6196747

2925793

MOVERS

23323

INDEX 23038.95 HIGH

23322.07

LOW

22988.34

52W (H) 23944.74 (L) 19426.35938

22988

1-November

5-November

15 15

November 6, 2013 April 19, 2013

Opinion Business

wires

Leading reports from Asia’s best business newspapers

Bangkok Post

The tacit-knowledge economy Ricardo Hausmann

Professor of economics at Harvard University, where he is also Director of the Centre for International Development

The hopes of retail and tourism firms for a high-season sales boost are being shattered by political problems. It will grow worse if protests turn violent in the style of 2010’s red-shirt rally, says the Ratchaprasong Square Trade Association (RSTA). Normally, the peak fourth quarter draws many foreign tourists and benefits hotels and shopping malls. “The retail and tourism situation in Bangkok will continue its normalcy as long as the protests are still peaceful and do not paralyse major business districts,” said Chai Srivikorn, the RSTA president.

because entrepreneurs and firms from other cities move in, bringing with them skilled workers with relevant industry experience. They seldom hire locals. The recently deceased economist Steven Klepper argued that industries tend to cluster in particular cities simply because new firms are formed mainly by workers who leave other successful firms, taking the relevant tacit knowledge with them. Indeed, a large literature on knowledge spillovers points to their remarkably narrow geographic range. The exceptions often confirm the rule.

Yomiuri Shimbun Growth in consumer spending in Japan, a driving force behind the economic recovery, has been more pronounced in the three metropolitan areas around Tokyo, Osaka and Nagoya than elsewhere, according to a Cabinet Office report. The report on regional economies revealed that the effects of Abenomics have not yet been fully felt outside major urban areas. In its monthly economic reports, the Cabinet Office publishes a comprehensive consumption index aimed at gauging consumer spending by using such data as household expenditures and retail and wholesale sales.

Straits Times Travellers flying to China from Singapore are benefiting from more destinations, flights and carriers as competition in the market continues to grow. In the past few days, airlines have launched new flights from Singapore to Jinan, Lijiang and Nanchang. When services to Guilin start in the coming weeks, Changi will be linked to 28 cities in China – more than for any other country from the airport. Singapore will also have more air links to China than any other Southeast Asian nation.

Myanmar Times An increase in electricity prices set to take affect this week has authorities worried about illegal payments, while industrialists say they are unwilling to pay and will soon appeal. A hefty rise in the price of electricity imposed by the government last week could drive companies to use illicit practices to cut costs, officials fear. Faced with growing production costs, the Ministry of Electric Power announced last week it would raise electricity rates for households by 43 percent. The move is intended to reduce public subsidies for electricity and to encourage private investment in the sector.

lmost all rich countries are rich because they exploit technological progress. They have moved the bulk of their labour force out of agriculture and into cities, where know-how can be shared more easily. Their families have fewer children and educate them more intensively, thereby facilitating further technological progress. Poor countries need to go through a similar change in order to become rich: reduce farm employment, become more urban, have fewer children, and keep those children that they have in school longer. If they do, the doors to prosperity will open. And isn’t that already happening? Let us compare, for example, Brazil in 2010 with the United Kingdom in 1960. Brazil in 2010 was 84.3 percent urban; its fertility rate was 1.8 births per woman; its labour force had an average of 7.2 years of schooling; and its university graduates accounted for 5.2 percent of potential workers. These are better social indicators than the United Kingdom had in 1960. At that time, the U.K. was 78.4 percent urban; its fertility rate was 2.7; its labour force had six years of schooling on average, and its university graduates accounted for less than 2 percent of potential workers. Brazil is not a unique case: Colombia, Tunisia, Turkey, and Indonesia in 2010 compare favourably to Japan, France, the Netherlands, and Italy, respectively, in 1960. Not only did these countries achieve better social indicators in these dimensions; they also could benefit from the

technological innovations of the past half-century: computers, cellphones, the Internet, Teflon, and so on. This should allow higher productivity than was feasible in 1960.

Wrong perception So today’s emerging-market economies should be richer than today’s advanced economies were back then, right? Wrong – and by a substantial margin. Per capita GDP at constant prices was 140 percent higher in Britain in 1960 than in Brazil in 2010. It was 80 percent higher in Japan back then than in Colombia today, 42 percent higher in old France than in current Tunisia, 250 percent higher in the old Netherlands than in current Turkey, and 470 percent higher in old Italy than in current Indonesia. Why is it that today’s smaller and more educated urbanised families in emerging-market economies are so much less productive than their counterparts were a halfcentury ago in today’s rich countries? Why can’t today’s emerging markets replicate levels of productivity that were achieved in countries with worse social indicators and much older technologies? The key to this puzzle is tacit knowledge. To make stuff, you need to know how to make it, and this knowledge is, to a large extent, latent – not available in books, but stored in the brains of those who need to use it. Getting it there is really tough. Tacit knowledge is acquired mostly through learning by

doing. That is how we train musicians, barbers, doctors, and scientists. Consider how long it takes an adult to learn to speak a language or a musician to master the violin. Moreover, tacit knowledge is vast and growing, so that only a miniscule fraction of it fits in anybody’s head. But most products require much more knowledge than fits in anybody’s head, so that making them requires teams of people with different pieces of knowledge, not unlike a symphonic orchestra. Getting more tacit knowledge is easier said than done, because economies can offer experience only on the basis of current jobs. How do people learn to do jobs that do not yet exist? How do they create and mobilise coherent teams of people in new economic activities if the requisite tacit knowledge is missing?

Knowledge moves Recent research at Harvard University’s Centre for International Development (CID) suggests that tacit knowledge flows through amazingly slow and narrow channels. The productivity of Nuevo León, Mexico, is higher than in South Korea, but that of Guerrero, another Mexican state, resembles levels in Honduras. Moving knowledge across Mexican states has been difficult and slow. It is easier to move brains than it is to move tacit knowledge into brains, and not only in Mexico. For example, as the CID’s Frank Neffke has shown, when new industries are launched in German and Swedish cities, it is mostly

Know-how resides in brains, and emerging and developing countries should focus on attracting them, instead of erecting barriers to skilled immigration

The U.S. would not have been able to build the first atomic bomb in just four years had Hitler not encouraged so many key scientists to leave Europe. The bottom line is that urbanisation, schooling, and Internet access are woefully insufficient to transmit effectively the tacit knowledge required to be productive. That is why today’s emerging markets are so much less productive than rich countries were in 1960, even though the latter were less urban, had higher birth rates and less formal schooling, and used much older technologies. The policy implications are clear. Know-how resides in brains, and emerging and developing countries should focus on attracting them, instead of erecting barriers to skilled immigration. They should tap into their diasporas, attract foreign direct investment in new areas, and acquire foreign firms if possible. Knowledge moves when people do. © Project Syndicate

16 16

November 6, 2013 April 19, 2013

Closing BOJ ready to adjust policy, Kuroda says

Blackberry abandons sell-off plan

Bank of Japan governor Haruhiko Kuroda voiced confidence yesterday that the economies of China and the U.S., Japan’s two big export markets, will continue to recover and help achieve the central bank’s 2 percent inflation target. Mr Kuroda said the world’s third-largest economy was making steady progress toward meeting the BOJ’s price goal, but reiterated his readiness to offer additional monetary stimulus if that path is threatened by external risks. “We are ready to take appropriate policy adjustments without hesitation if either upside or downside risks materialise,” he told business leaders in Osaka, western Japan.

Shares in struggling smartphone maker Blackberry Ltd have fallen 16 percent after it announced it had abandoned a plan to sell itself to its biggest shareholder, Fairfax Financial Holdings. Instead, it intends to raise US$1 billion in fresh financing. Last week, Reuters reported that Fairfax was struggling to raise the financing needed for the deal. Instead, Fairfax is contributing US$250 million to the new fund-raising. “This financing provides an immediate cash injection on terms favourable to Blackberry, enhancing our substantial cash position,” said Barbara Stymiest, chair of Blackberry’s board of directors.

Melco Crown Q3 net revenue up 24 pct Improvement aided by boost to City of Dreams mass table operations, cost control

acau casino d e v e l o p e r Melco Crown Entertainment Ltd – soon to branch out into the Philippines market – reported net revenue up 24 percent year-on-year in the third quarter. Net revenue was approximately US$1.25 billion (9.98 billion patacas), compared to around US$1.01 billion in the third quarter 2012. The firm said the improvement was “primarily attributable to improved group-wide gaming performance, particularly in the mass-market table games segment”. Adjusted earnings before interest, taxation, depreciation and amortisation were up 39 percent year-on-year, to US$315.2 million for the third quarter of 2013, as compared to US$226.4 million in the third quarter

City of Dreams on Cotai

a year earlier. Melco Crown attributed the gain to “significant growth in the mass market table games segment at City of Dreams”, as well as “improved group-wide rolling chip volume and a committed approach to

controlling costs, partially offset by a lower rolling chip win rate”. On United States’ G.A.A.P. (generally accepted accounting principles) basis, net income attributable to Melco Crown for the third quarter of 2013 was

US$179.4 million, or 33 US cents per American depositary share, compared with US$104.9 million, or 19 US cents per ADS, in the third quarter of 2012. The net loss attributable to non-controlling interests during the third quarter of

EU tempers growth forecasts Projections show economy expanding 1.1 percent next year

he European Union trimmed its forecast for euro-area growth next year and raised its unemployment estimate as the economy struggled to regain momentum after a record-long recession. Gross domestic product in the 17-nation currency bloc will rise by 1.1 percent in 2014, less than the 1.2 percent forecast in May, the Brussels-based European Commission said yesterday. Unemployment, now at its highest rate since the euro was introduced, will be 12.2 percent in 2014, higher than the 12.1 percent predicted six months ago. “We are seeing clear signs of an economic turnaround, but growth will pick up only gradually and will translate into jobs only with a lag,” EU Economic and Monetary Affairs Commissioner Olli Rehn

told reporters in Brussels. “We must not fall into the trap of complacency. Further decisive action to boost sustainable growth and job creation will continue to be necessary in Europe.” The gloomier outlook deals a blow to the growing sense of optimism that the euro area is emerging from the sovereign-debt crisis and may make it more difficult for European governments to convince financial markets that they are tackling the turmoil through deficit reduction and structural reforms. While the commission’s gauge of economic confidence is at a two-year high, services and manufacturing output unexpectedly slowed in October and unemployment is at a record 12.2 percent. The strengthening euro also may drag on the recovery by crimping exports. The common currency is

up more than 5 percent against the dollar in the last four months. Next year’s projected return to growth will come after the euro-area economy contracts an estimated 0.4 percent in 2013, the commission said in yesterday’s report. That follows a decline in GDP of 0.7 percent in 2012, the first time output has fallen in two consecutive years since the introduction of Europe’s single currency in 1999. Signs of a fragile recovery in 2014 disguise a north-south divide in the euro area, in which the economies of Germany, Belgium, Estonia and Ireland are predicted to gain momentum next year, while Spain, Greece, Italy and Portugal are projected to experience much weaker growth rates. The exceptions are Finland and the Netherlands, whose growth figures now lag behind their northern neighbours.

2013 of US$15.6 million related to Studio City and City of Dreams Manila. Lawrence Ho Yau Lung, co-chairman and chief executive of Melco Crown, said in a prepared statement: “I am pleased to report another successful quarter, with strong growth in our core segments driving record fundamental performance.” He added: “Studio City remains on budget and on track to open in mid2015 with clear progress being made on the main superstructure following the successful completion of the foundation and piling work. This cinematically-themed integrated resort located in Cotai represents a powerful and complementary addition to our current portfolio of operating assets in Macau,” that would help “drive market diversification,” he stated. M.G.

Tension between the EU and national governments on the best way to deal with the debt crisis could resurface on November 15 when the commission will issue opinions on euro-area draft budgets for the first time. While the euro area has enjoyed a year and a half of relative calm on financial markets, governments are wrestling with how to cut debt and deficit levels while boosting economic output and creating jobs. “Whereas one and a half years ago a risk of catastrophic outcomes was tangible, and even a break-up of the euro area seemed imaginable, such tail risks have now all but disappeared,” Marco Buti, the head of the commission’s economics department, said in a statement. “But also within the EU, the recovery occurs at multiple speeds, and the previous ‘core-periphery’ pattern has become more diversified. Growth in the coming quarters will still be held back by the deleveraging needs, financial fragmentation, sectoral adjustment and high unemployment associated with the crisis legacy.” Bloomberg News