MOP 6.00 Vitor Quintã Deputy editor-in-chief Editor-in-chief Tiago Azevedo
Policy Address 2014
Push for more residents in management roles T
he government wants more residents in management positions at local companies – particularly with the gaming operators – said the city’s Chief Executive Fernando Chui Sai On yesterday in his Policy Address for 2014. The announcement was long on aspiration but short on details of how to achieve it. Mr Chui also pledged a package of measures to “strengthen support” for Macau’s small- and medium-sized enterprises.
‘Macau land for Macau people’ homes plan – Chief Executive Lack of ‘long-term roadmap’ – academic Larry So Govt bows to public pressure on light rail route for NAPE More on pages 2, 3 & 4
Year II
Number 413 Wednesday November 13, 2013
1
April 19, 2013
Brought to you by
www.macaubusinessdaily.com
Hang Seng Index 23080
23042
Home prices up 30pct next year: agent
Tourism, construction aid manufacturing recovery
Home prices are likely to grow by 30 percent in 2014 says Midland Realty (Macau) Ltd. That’s high, but a deceleration from this year’s pace, which in the nine months to September 30, hit 44 percent according to the property agency. The acute gap between demand and actual supply of homes will remain a driver, Midland Macau chief executive Ronald Cheung Yat Fai told Business Daily. That suggests the average home price would top 105,000 patacas (US$13,200) per square metre in 2014, according to Business Daily calculations. Page 5
Macau’s manufacturing is gradually finding a way out of the long-term decline created by the demise of the textile industry, suggests academic Ricardo Siu Chi Sen. The city is reinventing itself as a supplier of equipment for the city’s tourism and construction sectors, says the associate professor of business and economics at the University of Macau. Manufacturing’s contribution to the economy increased by 11.8 percent to 1.68 billion patacas (US$210.4 million) last year, the Statistics and Census Service announced yesterday. Page 6
Beijing pledges decisive role for markets China is to boost the role of markets in the nation’s economy reported the mainland’s official news agency Xinhua, citing a communique from the third plenum of the Communist Party of China’s 18th Central Committee that concluded yesterday. The gathering overseen by President Xi Jinping has been characterised by political analysts as setting the tone and course for his decade in office. The leadership signalled changes to the fiscal system and to income distribution, but reportedly fell short of announcing bold reform plans for state‑owned enterprises. Page 16
23004
22966
22928
22890
November 12
HSI - Movers Name
%Day
WHARF HLDG
1.73
HENGAN INTL
1.65
BELLE INTERNATIO
1.32
CHINA PETROLEU-H
0.78
CHINA RES LAND
0.72
CHINA UNICOM HON
-1.84
AIA GROUP LTD
-1.92
COSCO PAC LTD
-2.15
CHINA RES POWER
-2.47
CHINA MERCHANT
-3.38
Source: Bloomberg
I SSN 2226-8294
Brought to you by
2013-11-13
2013-11-14
2013-11-15
20˚ 23˚
19˚ 24˚
19˚ 25˚
2
November 13, 2013
Macau
Push for more residents in management roles Announcement long on aspiration but short on details during 2014 Policy Address Tony Lai
tony.lai@macaubusinessdaily.com
‘N
urturing talent’ was the catchphrase of the Chief Executive’s Policy Address for 2014. The aim is to get more residents into manage ment positions of local companies – particularly the gaming operators – said Fernando Chui Sai On yesterday. “In order to meet the demand created by the rapid social and economic development,” the government must increase support for local talents, he stated. “The government will further push large-scale enterprises, especially gaming operators, to raise the proportion of resident employees in the different management levels,” Mr Chui told the Legislative Assembly. Secretary for Economy and Finance Francis Tam Pak Yuen is discussing with the six gaming companies “how to let residents have better upward mobility,” Mr Chui told a press conference after the address. But he refrained from saying a quota should be set for residents in management positions. “I believe that at present we cannot really set a clear proportion.” “After the discussion is finished, [Mr Tam] will share what agreement they [Mr Tam and the gaming companies] have reached and introduce it to the public,” he said. There will also be a mechanism of “incentives and special awards” for companies, especially small-and medium-sized enterprises, to invest in professional training for their staff, Mr Chui told legislators. Referring to the government’s involvement in
Continuing education programme extended to 2016, said Chui Sai On (Photo: Manuel Cardoso)
the process of moving locals into more senior positions, Mr Chui said during his address: “The government will increase the resource input, appropriately raising the ratio of public spending in cultivating talents to the territory’s gross domestic product.” The official did not mention what that meant in money terms.
Promotion goal The chief executive reiterated that no migrants would be allowed to work as casino dealers but he did not say whether he would write
it down in law – a demand from workers’ groups. “The government is more concerned about how residents can have better promotion chances,” he told media. The authorities are also worried over “how gaming companies, which work 24 hours [a day], support their staff,” the official added. Mr Chui told legislators he is considering setting up a human resource development committee directly under his control. The administration will launch three schemes to improve local talents,
he added. One plan will help “some local elites” go abroad to study or undergo an internship while another will offer incentives for people in specific areas for take up vocational training. The third scheme will help train locals in occupations the government has identified as necessary for economic diversification, according to the policy address. The administration will also “provide special treatment” to lure back qualified residents living outside, said Mr Chui. He didn’t specify what were the incentives.
But the administration said it was extending the Continuing Education Development Scheme for three more years and raising the maximum allowance to 6,000 patacas (US$750) from 5,000 patacas. Permanent residents aged 15 or above can apply to join the scheme in order to take education courses and certificate examinations. A vocational training centre will open in Seac Pai Van and a language training centre will also be set up, said Mr Chui. Both will be operational by 2016. With Stephanie Lai
Govt to give more help to SMEs
T
he government will help the territory’s small- and medium-sized enterprises set up websites, said Chief Executive Fernando Chui Sai On during his Policy Address for 2014 yesterday. The government has faced criticism recently from SME lobby groups that its labour import restrictions are stifling small businesses as the gaming firms and other large businesses take the cream of the local labour force. “We will launch a new subsidy scheme for SMEs [to set up] websites to help the SMEs consolidate their corporate image and product promotion,” said Mr Chui, without giving more details. The administration will also set up “a specific area” for the Macau SMEs in Chimelong Ocean Resort
on Hengqin Island, added the city’s leader. SMEs have previously complained that the minimum 100 million yuan (128 million patacas) registered capital required to control commercial land on Hengqin was too high. But in September Liu Yang, a senior official from Hengqin New Area told Business Daily there was no barrier to Macau SMEs and a new set of guidelines would soon clarify the situation. Mr Chui stated yesterday the government will continue to work with Guangdong to promote cooperation on the movement of yachts and tourists between Macau and Nansha New Area on the Pearl River on the outskirts of Guangzhou. Mr Chui pledged yesterday to “strengthen support” for Macau’s
SMEs, which account for over 90 percent of all local firms. People and companies making fewer than 300,000 patacas (US$38,000) will be exempt from personal or corporate income tax. The current tax-free allowance is 200,000 patacas. A fund set up to help small firms buy environmentally friendly technology and equipment will grant up to one million patacas per application – twice as much as now. The administration also promised to “relax the application requirements” for the fourth phase of a subsidy scheme to help revamp old restaurants. Currently cafes and restaurants running for more than 10 years can apply for a subsidy of up to 200,000 patacas.
MOP300,000
New limit for exemption from personal or corporate income tax
The chief executive additionally pledged to “quicken approval procedures” for non-residents workers hired by SMEs to ease their labour shortage. T.L.
33
November 13, 2013 April 19, 2013
Macau Cash handout raised to MOP9,000 Macau permanent residents will receive a cash handout of 9,000 patacas (US$1,125) next year, 1,000 patacas more than this year, said Chief Executive Fernando Chui Sai On yesterday. Non-permanent residents will get 5,400 patacas instead of 4,800 patacas. In contrast the healthcare vouchers will remain unchanged at 600 patacas, said Mr Chui. Authorities expect to spend a total of 11.3 billion patacas in social welfare subsidies, up by 15.8 percent from this year. Tax rebates and exemptions will wipe 1.98 billion patacas off the public revenue next year, up by 22.8 percent from this year.
‘Macau land for Macau people’ pledges Chui Measures to ease local housing crunch but government stops shy of short-term price cooling Stephanie Lai
sw.lai@macaubusinessdaily.com
Kwan Tsui Hang Talent policies too abstract The batch of measures proposed by the government to cultivate talents is “too abstract”, directly elected Legislative Assembly member Kwan Tsui Hang lamented. “The policy address mentioned grooming elites … but we still have to see how to implement it,” she said. “At this moment we still do not know what kind of talents we will be nurturing.” The vice-president of the Macau Federation of Trade Unions slammed the government’s drive for economic diversification. “I only see numerous subsidy [schemes] offered but no effective policies”. She criticised the lack of measures to tackle high home prices.
Ho Ion Sang New year, same measures The Policy Address for 2014 has no innovation but only the same short-term measures used as “painkillers”, said directly elected legislator Ho Ion Sang. “The government provides no details on the establishment of long-term mechanisms, so they become just slogans,” he said. “This policy address only provides a vision of homes in the five new reclaimed plots and in the idle plots … but no means for solving the housing needs in the near future,” Mr Ho said. The government failed to implement most measures announced in the last few policy addresses, he added.
Si Ka Lon Unhappy with housing pledges Directly elected Legislative Assembly member Si Ka Lon is “disappointed” with the fact there were no promises made on housing, like more public flats or measures to curb high home prices. The policy address “is not clear on the accountability of government officials, which is still at the discussion stage,” he said. He praised the government for helping develop the meetings, incentives, conferences and exhibitions (MICE) industry by launching new incentives to attract international exhibitors. Mr Si thinks the government is heading in the right direction because “MICE and tourism are essential for economic diversification”.
Shape of things to come – reclaimed land
C
hief Executive Fernando Chui Sai On yesterday pledged in his Policy Address for 2014 to continue building public housing and to reserve sufficient land for residents’ accommodation. “I do agree that the current home price in Macau is high,” said the official in a press conference following his speech in the Legislative Assembly. “But for the home price problem, it is related to the confidence issue [of the public],” he added. “If local residents are confident that we have planned to reserve sufficient land, it should help [alleviate home prices],” Mr Chui stated. The Chief Executive noted that he had already authorised confiscation of 28 undeveloped land plots in the city, though he said he could not presently say how much of that space would be used for public housing sites. He added that there would be areas reserved for public housing in the five urban reclamation zones currently being constructed. Some developers are hoping to be given land concessions in the new reclaimed zones by swapping plots they retain elsewhere. But Mr Chui said yesterday no such deals had been done. He didn’t however specifically rule it out. Nor did the chief executive make any commitment in the policy address or in the press conference to rent
I do agree that the current home price in Macau is high Chui Sai On, Macau Chief Executive
controls or other short-term property price curbing measures. “Introducing property curbing measures is not an issue faced by Macau alone…” said Mr Chui. “But from what we saw from Public Works Secretary Lau Si Io’s curbing measures introduced last year, it’s clear that the policy has already slowed the property transactions,” he added. In October last year, the government announced the extension of special stamp duty to shops, offices and parking lots. It has also tightened home mortgage terms to try to deter speculators.
Chui Sai Peng Good support for SMEs Chui Sai Peng, indirectly elected Legislative Assembly member in the business constituency, applauded the government’s new scheme to help the small-and medium-sized enterprises set up their websites. “It can help the tourists be aware of the existence of such SMEs,” said Mr Chui. “It can let the SMEs focus on their strongest link – running a business.” He also praised the measures to groom local talents. “It is a good thing that the government is not only giving out money but also offering support for the youths to climb up the social ladder.”
Ng Kuok Cheong Build public flats on La Scala plot The government should use the plots where the high-end residential project La Scala was being built to put up public housing, said directly-elected Legislative Assembly member Ng Kuok Cheong. That would give residents more confidence in the administration, he said. He estimated over 10,000 flats could be built in the plots located near the airport. The sales of homes in the five new reclaimed plots should be restricted for Macau residents only, Mr Ng said. But the pan-democrat is “disappointed” that no law reforms were mentioned in the policy address.
4
November 13, 2013
Macau
Critics decry govt inaction Political analysts say the government has failed to keep a range of promises it made last year Tony Lai
tony.lai@macaubusinessdaily.com
that the government would allocate land for more public housing on top of the 19,000 flats it promised in 2007 and 6,300 others it is planning. There has been no word on when the 6,300 flats planned will be finished or what land will be reserved for public housing. With the middle class in mind, Mr Chui announced last year a tax rebate of up to 12,000 patacas for residents. The vice-president of the Macau Association of Economic Sciences, Jack Chang Chak Io, said: “Such a tax rebate is not really particularly important.” Mr Chang told Business Daily: “The more pressing issue for the middle class is housing, which still needs more work – to wit the study of the idea of Macau land for Macau people.”
Choked and choking There has been no word on land for more public housing
T
he government has failed to put into action long-term plans it announced in the Policy Address for 2013, critics say. Critics are unimpressed by the government pending nearly 10 billion patacas (US$1.25
billion) on what it calls “sharing economic benefits”. A professor in Macau Polytechnic Institute’s school of public administration, Larry So Man Yum, said: “I am a little bit disappointed.” Mr So told Business Daily: “The government talked
about setting up long-term mechanisms for the first time in last year’s Policy Address […] but we have not seen any long-term roadmap in the past year in many areas, such as housing.” Chief Executive Fernando Chui Sai On said a year ago
business as usual
Lack of compassion
Paulo A. Azevedo pazevedo@macaubusinessdaily.com
S
uper Typhoon Haiyan has devastated parts of the Philippines, and the absence of an immediate offer of financial help from the Macau government is unacceptable. To promise support if only it is requested is a half-hearted gesture of concern about a predicament that probably touches many Filipinos living in Macau – and Filipinos make up the second-largest foreign community here. It is a mealy-mouthed promise and shows lack of initiative and confidence in dealing with what should be a simple matter. The storm has disrupted the lives of at least 9.7 million people and may have killed more than 10,000. The pictures show incredible destruction, and the United Nations has launched a big appeal for aid for the battered country. According to the Philippine authorities, 22 countries have pledged assistance. So, why does Macau fail to show compassion and solidarity by pledging support to our neighbour in need? How many people have to die, how many have to lose all they possess before Macau reaches into its stuffed public coffers and doles out a few million? A gesture like that would show that Macau is more than a city that lives off gaming. It would show it is a place where wealth also confers responsibilities on its government, its people and many of its companies. Moreover, it would be a gesture that would make Macau one of the first places in Asia to demonstrate that it has a humanitarian streak.
Mr Chui said last year only that the government was looking at the idea of reserving homes in some parts of the city for Macau residents. The head of the Secretariat for Transport and Public Works, Francis Wong Chan Tong, said in September that the government had
commissioned the University of Macau and the Macau Polytechnic Institute to study the idea. Mr Wong said the two institutions would begin soliciting public opinion on the idea in the first quarter of next year. Mr Chui announced last year a plan to spend 400 million patacas (US$50 million) on subsidising the removal of highly polluting vehicles from the roads, with a view to easing traffic congestion and pollution. There has been no sign of this plan since. Mr So said: “The government has been slow in taking measures, particularly measures entailing public consultation.” The government intends to make employers and employees contribute equally to social security and pay more for it. But this intention has been thwarted by the failure of employers and employees to agree on it. Mr Chang said the only result of the government’s efforts to make the economy more diverse was the meetings and exhibitions industry. The government ought to do more to promote “appropriate economic diversification”, he said.
Govt bows to pressure on LRT route in NAPE
T
he Light Rapid Transit (LRT) elevated railway will run along the waterfront rather than through the middle of NAPE district amid residents’ opposition, the government announced yesterday. Chief Executive Fernando Chui Sai On said in the Policy Address for 2014 that the administration “always pays a great deal of attention to residents’ different opinions on the NAPE route”. The government did not propose to run the elevated railway along the waterfront in the first place due to the restraints on the five new reclaimed land plots, he said. The situation has changed because Beijing recently approved a plan to adjust part of reclaimed plots, making it feasible to have the waterfront railway, said Mr Chui. The territory has no jurisdiction over its surrounding waters and needs Beijing approval for any land reclamation. “The next step will be to commission experienced consultants to solve any technical difficulties and soon launch the construction work,” said Mr Chui. The start of work on the Macau
peninsula section has been on hold since July last year, when the Commission Against Corruption sided with residents over the NAPE route due to safety concerns. Chen Lianjin, a representative of NAPE residents, welcomed the government’s move. “But I do not know why it took so long for the government to make this decision as we have been opposing the original plan since 2009,” he told Business Daily. The policy address says the government will “evaluate” whether it is possible to launch different railway sections in separate phases. The construction of the Macau section of the railway is more than 18 months behind the Taipa section whose works began last year, the Infrastructure Development Office said last month. The first phase of the railway, connecting the Gongbei border to the Taipa ferry terminal is slated for completion by 2015, but government officials have already admitted delays. Yesterday Mr Chui also said the government would issue 200 more taxi licences to “meet society’s need”. T.L.
5
November 13, 2013
Macau
Housing prices tipped to rise 30 pct in 2014 An estate agency says the supply of new flats will remain far below demand Stephanie Lai
sw.lai@macaubusinessdaily.com
H
ousing prices will increase by 30 percent next year, rising more slowly than this year, Midland Realty (Macau) Ltd predicts. Midland Macau chief executive Ronald Cheung Yat Fai told Business Daily that the wide gap between demand for housing and the supply would remain an important cause of rising prices. If Mr Cheung’s forecast proves accurate, the average price of housing will exceed 105,000 patacas (US$13,200) a square metre next year, according to our own calculations. The highest average price on record was 98,187 patacas a square metre in May. “From 2004 to 2007, we saw about 3,000 to 4,000 new homes – including unfinished flats – added to the market each year,” Mr Cheung said. He said this figure was based mainly on sales of homes in big developments. “From 2008 onwards,
we roughly estimate that at least 5,000 new homes were completed and sold each year,” he said. Mr Cheung said that if this trend continued demand for housing would greatly outweigh supply in the years to come. He said he expects only about 1,000 homes to be added to the market in each of the next two years. Midland Macau’s estimate of housing supply is much lower than the government’s. The Land, Public Works and Transport Bureau said at the weekend that nearly 8,000 private flats could be ready within three years. That is over 2,600 a year, on average. Mr Cheung said the actual supply of housing would be lower than the government’s estimate because many developers and estate agents chose to sell homes in new developments in tranches or to sell them internally. Financial Services Bureau data show that the average
Only 1,000 new homes will be added to the market in each of the next two years, an estate agency predicts
price of housing was 81,337 patacas a square metre in the first nine months of this year, 44 percent more than
a year earlier. The number of homes sold fell by 21.5 percent to 8,873. Mr Cheung expects
housing prices to be 40 percent to 50 percent higher at the end of this year than at the beginning.
66
November 13, 2013 April 19, 2013
Macau
Tourism, construction give manufacturing new vigour
Brought to you by
HOSPITALITY
Factories struggling with higher costs find novel ways to survive
Aviation ups and downs
Vítor Quintã
vitorquinta@macaubusinessdaily.com
Almost two-thirds of flights to Macau come from either the mainland or Taiwan. Most of the rest are from just six countries: Japan, South Korea, Thailand, Malaysia, Singapore and the Philippines. The number of flights from three of these countries has increased since 2010 and the number from the other three has decreased. Under 0.5 percent of flights to Macau originate in other places. The number is small and can vary widely from year to year, so we shall ignore them.
Among flights to Macau from the six main foreign origins, the number from Thailand has grown fastest and most steadily. The number was 72 percent higher last year than in 2010, and 11.2 percent higher in the third quarter of this year than a year earlier. The number of flights from South Korea has been the next fastest growing. The number was 68 percent higher last year than in 2010, and 6.3 percent higher in the third quarter than a year earlier. Flights from the Philippines reached a peak in 2011 and the number has since fallen slowly. It was 15 percent lower in the third quarter than a year earlier. Flights from Singapore and Malaysia peaked before last year, but the numbers seem to have stabilised recently. Flights from Japan are few in number in proportion to the wealth and proximity of the country. Fewer flights come from Japan than from any of the other main foreign origins of flights to Macau. The number tumbled by one-third in 2011. It has rebounded slightly since, but has failed to reach its former heights.
T
he manufacturing sector is gradually shaking off the demise of the textiles industry by reinventing itself as a supplier of the tourism and construction industries, an authority on the subject says. The value of manufacturing’s contribution to the economy increased by 11.8 percent to 1.68 billion patacas (US$210.4 million) last year, the Statistics and Census Service announced yesterday. Manufacturing is playing a bigger role by growing faster than the economy as a whole. Gross domestic product grew by 9.9 percent last year. Up-and-coming industries making food for tourists or building materials for construction companies are propelling the growth. An associate professor of business and economics at the University of Macau, Ricardo Siu Chi Sen, told Business Daily that some small and traditional companies were adapting as the economy shifted to services with higher value added. The amount contributed to the economy by makers of food and drink grew by 22 percent last year to 518 million patacas. The Statistics and Census Service attributes the growth to the development of the tourism and gaming industries. Chinese bakery products, for instance, are popular among visitors as souvenirs.
The contribution of publishing and printing to the economy rose by over one-third last year to 250 million patacas. The Statistics and Census Service says commercial development stimulated demand for printing. Mr Siu said printers and makers of food and drink were in industries that “still have some room to expand”. This could give companies the breathing space they needed to survive, he said. He said further expansion would depend on demand for food and other supplies for hotels, casinos and airlines, which would depend on tourism.
Concrete progress The fastest-growing contribution to the economy last year was that of makers of non-metallic mineral products. The amount they contributed grew by 76.6 percent to 187 million patacas. The Statistics and Census Service attributes the growth mainly to rising demand for locally produced cement and concrete for the construction of public housing. Manufacturing’s contribution to the economy rose for the second year in a row last year, having shrunk by more than one-half from 2006 to 2010, after the end of quotas for international trade in textiles.
But manufacturing’s contribution was far below the peak of 3.09 billion patacas reached in 2000, when the textiles and clothing industries were Macau’s biggest exporters. For the third year running manufacturing’s contribution to the economy was less than that of electricity, gas and water suppliers, which last year contributed 1.82 billion patacas. Even combined, the contributions of manufacturing and of electricity, gas and water suppliers last year add up to only 3.52 billion patacas, or about 1 percent of GDP. “It will be difficult for manufacturing firms to expand further,” said Mr Siu, “and their scale will still be limited.” He said increased costs, including higher wages, were a big obstacle to expanding manufacturing’s contribution to the economy. “We can’t expect it to become 10 percent again in the future,” he said. Mr Siu said manufacturing would play “a minimal role” in making the economy more diverse. “Macau still needs to develop as a services centre, a trade platform with the Portuguese-speaking countries and a leisure and entertainment destination,” he said. The economy would continue to depend on exports of services rather than manufactured goods, he added.
J.I.D.
25 %
Annual decrease in Q3 flights from Japan
Food from Chinese bakeries is among Macau’s up-and-coming products (Photo: Manuel Cardoso)
You will remember.
@ : signature@macaubusiness.com tel : +853 2833 1258
welcome
opportunity
77
November 13, 2013 April 19, 2013
Macau
Carson Yeung loses second bid to toss trial Hong Kong judge rules new evidence does not prejudice his right to fair hearing Michael Grimes
Nov. casino revenue ‘up 15 to 21 pct’, analysts say
michael.grimes@macaubusinessdaily.com
Three analysts think Macau‘s November gaming revenue is likely to expand by between 15 percent and 21 percent year-on-year. They base their estimates on daily betting revenue up to and including November 10, gleaned from industry sources. The lowest figure is part of a 15 percent to 17 percent estimate by John Kempf of RBC Capital Markets. A mid-range expansion of 19 percent for November comes from Kenneth Fong of JP Morgan in Hong Kong, while the most bullish number is part of a 19 percent to 21 percent year-on-year growth estimate offered by Wells Fargo senior analyst Cameron McKnight in New York. “Near term: we believe that the sector is likely to trade sideways into the year-end after the recent sharp rally,” writes Mr Fong of the local casino stocks. He cites as factors the likelihood there will be “no big revenue number” for the remainder of the year after the “seasonally strongest” October results supported by the Golden Week holiday on the mainland. He adds: “…investors will closely monitor the revenue trend for next two months (especially the higher base of December) to set their base case growth expectation for 2014.” He points out investors tend to “pare down” high beta names into year-end. Mr McKnight says in his latest note: “We would expect ADR [average daily revenue] to remain strong following the end of [the] China Communist Party Third Plenum meetings”. That’s a reference to this week’s meeting of senior mainland leaders to decide on China’s future political and economic strategy.
A
Hong Kong judge has rejected Birmingham City soccer club boss Carson Yeung Ka Sing’s second appeal to have his money laundering trial thrown out of court. Judge Douglas Yau, sitting at the District Court, Wanchai yesterday ruled that Mr Yeung’s trial had not been prejudiced by new evidence submitted by the prosecution last week. Mr Yeung first applied for a permanent stay in April, arguing that records of his wealth from stock trading couldn’t be obtained. He has pleaded not guilty to five charges of laundering HK$721.3 million (US$93 million at current prices) obtained from parties including a Macau casino operator and securities firms over a seven-year period to 2007. The trial – so far lasting 52 days – was in effect extended last month when the court allowed Mr Yeung to reopen his defence by giving evidence in person. He had previously indicated he wouldn’t do so. The change came reportedly because of the businessman’s frustration that forensic auditors
hired by Birmingham International Holdings Ltd – the Hong Kong-listed vehicle for his controlling stake in Birmingham City Football Club based in the English Midlands – had not accurately characterised the source of his wealth. He said forensic accountant Ian Robinson had “found information on the Internet” and had written “according to his feelings”. Mr Yeung has asserted in testimony that the HK$100 million wealth he had amassed by the beginning of last decade was due to hard work and shrewd investment. He paid 81.5 million pounds (1.04 billion patacas) for a controlling stake
in Birmingham City in 2009. Last week the prosecution disclosed new documents linking Mr Yeung to Abba Chan Tat Chee, a Hong Kong concert promoter convicted of embezzlement. Mr Chan, known locally as ‘Uncle Ba’, is considered a founding father of ‘Canto-pop’ – popular music sung in the local Cantonese dialect. In 2010 Mr Chan was ordered to repay HK$25 million he admitted stealing from a company he chaired. Mr Yeung’s lawyers complained the new allegations were part of a pattern of late or incomplete prosecution disclosures that hurt their client’s ability to defend himself. Birmingham City has been struggling to pay its bills. The club was relegated from the elite English Premier League in 2011, a month before Mr Yeung, its largest shareholder, was arrested. Earlier this month, BIHL said in a statement to the Hong Kong Stock Exchange it was discussing ways to raise money or restructure its debt. Shares could resume trading by the end of the year, it added. With Bloomberg News
Wynn Resorts drops Philadelphia plan Chairman Steve Wynn says casino firm ‘primarily an Asian company’
Pension fund takes Louis XIII shares A teachers’ pension fund in Canada has opted to turn convertible bonds for Macau boutique casino developer Louis XIII Holdings Ltd into shares. Ontario Teachers’ Pension Plan bought US$130 million (1.04 billion patacas) in convertible bonds from the then Paul Y Engineering Group at the time of the latter’s fund raising exercise on the Hong Kong Stock Exchange in January. When the fund bought its original convertible bonds, the offer price of the underlying shares was 68 HK cents. Yesterday the stock of Louis XIII Holdings closed flat on the day at HK$8.95. The original sale of shares and convertible bonds was for cash to purchase land for the Casino Louis XIII project on the Cotai-Coloane border and toward the estimated US$800 million cost of construction. Louis XIII Holdings said this week in a filing to the exchange that Ontario Teachers’ Pension Plan – known as OTPP – had invested HK$299.9 million (US$38.7 million) in the company through a zero-coupon convertible bond issue. According to the regulatory document, the bonds will convert into 36.45 million shares at HK$8.23 each, a 15.15 percent discount on the stock’s closing price on the last trading day immediately prior to the latest placing exercise. Following the transaction, OTPP holds a 9.18 percent stake of Louis XIII. Casino Louis XIII is expected to operate a 66-table gaming floor under a so-called ‘service agreement’ via one of the existing concessionaires or sub-concessionaires. Louis XIII Holdings said in a filing on Thursday last week it’s in “advanced discussions with a mainland China-based bank” for some debt funding. M.G.
W
ynn Resorts Ltd said it’s withdrawing an application to open a casino in Philadelphia in the United States, citing looming competition after voters in New York approved plans to expand gambling in their state. Company founder Steve Wynn stated on an October 24 conference call he was frustrated with casino licensing in the U.S. after Massachusetts – where his company is also seeking to invest – acted on investigators’ recommendations to exclude market rival Caesars Entertainment Corp. “You know that we are primarily an Asian company,” Mr Wynn told investors referring to his Wynn Macau Ltd operation. “Thank goodness, and God bless that, and we intend to stay an Asian company primarily.” Wynn Resorts was one of six applicants seeking a licence in Philadelphia, Pennsylvania’s mostpopulous city. The company’s proposal, estimated to cost US$926 million (7.39 billion patacas), was part of what Mr Wynn described as a strategy to build grand hotels in major U.S. cities. “The board took a host of factors into consideration, including the Philadelphia market performance over the past year and the competition which will result from the recent approval of gaming in the State of New York,” Las Vegas-based Wynn
Steve Wynn – says his company is Asian ‘thank goodness’
Resorts said yesterday U.S. time in a statement. Atlantic City, New Jersey, has suffered declining gambling revenue for the past six years, in part because of competition from neighbouring states. Pennsylvania – which passed New Jersey last year to become the state with the second-largest casino business after Nevada – is seeking to award a 13th casino licence for an operator in Philadelphia. Others pursuing the permit include Penn National Gaming Inc and Isle of Capri Casinos Inc. Pennsylvania’s casino revenue
fell 1.5 percent to US$2.37 billion in the nine months to September 30, according to Bloomberg Industries research. Wynn Resorts’ Nasdaq-listed shares have gained 47 percent this year, compared with a 24 percent advance in the Standard & Poor’s 500 Index. New Yorkers voted on November 5 to allow as many as seven casinos in their state. Wynn is also considering a US$1.2 billion casino project in Everett, Massachusetts, outside Boston. M.G. with Bloomberg News
88
November 13, 2013 April 19, 2013
Ad
(TRANSLATED VERSION)
Policy Address for the Fiscal Year 2014 of the Macao Special Administrative Region Major Policies
ENHANCE UNDERLYING STRENGTH PROMOTE SUSTAINABLE DEVELOPMENT
During the past year, with the full support of the Central People’s Government, the MSAR Government and Macao people have jointly made great efforts to promote economic diversification and regional cooperation, building on the foundation laid by the SAR over the years. The Government strived to establish four long-term mechanisms for effective administration focusing on social security, education, medical and health services and housing, enhance the development of systems, allocate increased resources, and effectively improve the overall quality of life. Meanwhile, it also intensified scientific policy-making, implemented research and surveys on policies, enhanced administrative transparency, successfully completed the fifth Legislative Assembly Election according to the amended Legislative Assembly Election Law, maintained a peaceful and harmonious society, and ensured the steady growth of the economy. Looking ahead, the Government will maintain its administrative focus on economic development and livelihood, and will develop comprehensive planning for the cultivation of talent to enhance the quality of life for local residents. It will also pragmatically promote balanced development, enhance underlying strengths, and consolidate achievements in development, so that Macao people joyfully of share in the fruits of their joint efforts. At the same time, the Government will continue to strengthen its administrative systems and improve public administration performance. As well as realising its administrative goals, the Government will also ensure the success of the fourth Chief Executive Election, creating a favourable environment for the SAR to move forward to a new stage in its development.
Pursue social wellbeing
All Macao Residents
The Elderly
Start-up fund for individual accounts of the Central Provident Fund
10,000 patacas (for eligible citizens)
Additional fund injection to individual accounts of the Central Provident Fund
7,000 patacas (for eligible citizens)
Wealth Partaking Scheme
9,000 patacas (permanent residents) / 5,400 patacas (non-permanent residents)
Healthcare voucher
600 patacas / person (permanent residents)
Electricity bill subsidy for residential units
200 patacas / month (each residential unit)
Continuing Education Programme (for a term of three years)
Maximum 6,000 patacas/ person (Macao residents aged 15 or above)
Real estate tax
First 3,500 patacas tax waiver (Macao residents)
Waiver of real estate stamp duty (only for residential properties)
First three million patacas of a home’s value (Macao permanent residents purchasing residential properties for the first time)
Old age allowance
7,000 patacas / year
Pension
3,000 patacas / month
Non-tertiary education: Textbook allowance
Students
Students from families with financial difficulties: Meal allowances and stationery allowances Tertiary education: Study allowance Minimum subsistence index
Disadvantaged Families
Disability gratuity
7,000 patacas / year (ordinary) and 14,000 patacas / year (special)
Subsidy for low-income, full-time employees
Up to 4,700 patacas / month
Special living allowance and special subsidy to the three categories of disadvantaged families
Extension to 10 weeks for each implementation of the programme; upward adjustment of the income ceiling to 1.8 times the minimum subsistence index; provision of one-off food assistance to families receiving food assistance for the first time Disburse an extra one-month’s full general subsidy to eligible families receiving financial assistance Increase special living allowance and raise income ceiling for application; increase the amount of special subsidy
Public housing tenants
Rent waivers for one year (for eligible public housing tenants)
Short-term Food Assistance Programme Financial assistance
Temporary housing subsidies to eligible families on the waiting list for public housing Positive Life Programme and the Community Employment Assistance Scheme Employed Citizens/ Middleincome Group
2,800 patacas / school year (each secondary school student) 2,400 patacas / school year (each primary school student) 2,000 patacas / school year (each kindergarten pupil) Meal allowance: 3,000 patacas / school year Stationery allowance: 2,500 patacas / school year (each secondary school student) 2,000 patacas / school year (each kindergarten pupil or primary school student) 3,000 patacas / academic year (each Macao citizen who is enrolled for a tertiary educational programme) 3,450 patacas / one-person household, to be adjusted in January next year, according to the relevant mechanism
Personal income tax Extra tax rebate
Continue to disburse Continue these programmes
30 percent reduction in personal income tax, with the basic allowance set at 144,000 patacas (for all employed Macao residents) A 60 percent rebate of the personal income tax paid by each Macao resident, subject to a ceiling of 12,000 patacas. (Eligible residents will receive their rebate in 2015)
Increase in profit tax allowance from 200,000 patacas to 300,000 patacas; Business Owners and Related Persons
Continue to provide waivers of all business taxes, hawker licence fees, wet market stall rents, inspection and quarantine fees for live food, and stamp duty on life insurance, non life insurance and bank service charges; Provide waivers of signboard taxes for businesses; exemption from tourism tax for restaurants; Provide waivers of stamp duty on entrance passes and tickets for cultural and arts performances, exhibitions and entertainment programmes
Tips for the Elderly
Old age allowance 7,000 patacas Pension 3,000 patacas × 13 months Wealth Partaking Scheme 9,000 patacas Additional fund injection to central savings account 7,000 patacas Total amount for one year 62,000 patacas (Or approximately 5,166 patacas per month) +Healthcare voucher 600 patacas
99
November 13, 2013 April 19, 2013
Ad
(TRANSLATED VERSION)
Policy Address for the Fiscal Year 2014 of the Macao Special Administrative Region Major Policies
Develop long-term mechanisms for effective administration
●
●
Talent cultivation ●
●
●
●
●
●
●
●
●
●
Based on the principle of “Building Macao with talented individuals”, put emphasis on cultivation of local talents; Aim to set up a talent development committee directly under the Chief Executive for the methodical planning of talent training in scientific approach; Enhance the talent database and develop a talent assessment system;
●
●
●
●
●
Improve the incentive system for awarding and cultivating local talent; C o n s i d e r l a u n c h in g th e “Elite Cu ltiv atio n Programme”, “Expert Incentive Programme” and “Applied Talents Promotion Programme”;
●
●
●
●
Commence public consultation in the coming year to explore the supply of new buildings under the principle of “Macao property for Macao residents”.
Consider providing special benefits to motivate return of talented Macao individuals;
Support development of industries
Cultivate talent in the social and public services.
Prepare to construct a vocational education centre and a language training centre in Seac Pai Van of Coloane; these are expected to commence operations in 2016;
●
●
●
Increase funding for special education and improve the learning environment for students; Substantially increase the quota and number of scholarships, and provide an integrated services platform for students with the newly built “University Student Centre”.
●
Conduct a public consultation on the voluntary central provident fund scheme; Complete the injection of a total of 37 billion patacas into the Social Security Fund by 2016 as planned; Formulate framework policy for the retirement protection system, develop ten-year action plan for the development of services for the elderly for 2016-2025, and accelerate expansion of existing homes for the elderly and construction of new ones;
●
●
●
Formulate framework policy for the ten-year planning of rehabilitation services.
The bill on Legal System for Resolving Disputes in Medical Incidents has already been submitted to the Legislative Assembly for its deliberation; Plan to set up a dedicated healthcare services zone for the elderly at all health centres in Macao;
Launch the new international convention and professional exhibition support scheme; Launch the new website development subsidy scheme for SMEs, and continue to implement the scheme to support operations of long-established and unique small or medium-sized restaurants; Raise the maximum financial subsidy amount to one million patacas for the “Financial Subsidy for Purchasing Environmentally Friendly and Energy-saving Products and Equipment” scheme; A cultural industry fund is already established to provide support to local cultural and creative talented individuals.
Enhance regional cooperation The Chimelong International Ocean Resort in Hengqin will provide a dedicated zone for operations of SMEs from Macao; The first phase of the new Guangdong-Macao border-crossing project will commence, and new customs clearance arrangements are being explored; The Central People’s Government has approved the admission scheme for the first batch of 300 domestic helpers from the Mainland. When the scheme is implemented, the quota will increase in stages to 1,500.
Protect local employees’ rights and interests
Medical and health ●
Implement the construction of “post-19,000 units” public housing, continue to increase land reserves for public housing development, and reserve land for residential use in the new reclamation areas;
Development of a diversified economy
Social security ●
Expedite the development of community facilities at public housing estates;
Raise the proportion of local employees at management level in large corporations;
Education ●
Strengthen law enforcement on smoking control in casinos and other entertainment establishments.
Housing
Expedite the implementation of professional accreditation and vocational examinations; Establish a fair, just and open talent selection system;
Provide 24-hour outpatient and an elderly services zone at the newly completed Emergency Care Building of the Conde S. Januario Hospital;
●
●
Firmly implement measures to prohibit import of foreign workers for gaming dealer posts, enhance training of local employees for the gaming industry, and promote upward mobility of local employees; Strictly enforce labour law to protect local residents’ employment rights.
10 10
November 13, 2013 April 19, 2013
Ad
(TRANSLATED VERSION)
Policy Address for the Fiscal Year 2014 of the Macao Special Administrative Region Major Policies
Building a liveable city Population policy ●
Strive to complete the study on Macao’s population policy by next year.
Environmental protection, transport and telecommunication ●
●
●
●
●
Adjust the NAPE routing of the LRT by adopting a periphery approach instead of the original plan of running through inner streets; Expedite the establishment of the environmental impact assessment system and commence related consultations in the coming year; Improve the bus route network and supervision mechanism; Issue an additional 200 taxi licences; Consider adopting a diverse TV market development model, and protect residents’ right to enjoy lawful quality services.
Public security ●
Strengthen the police force through technology, emphasise cooperation between the police and the public, and prevent and combat crime.
Enhance public administration performance Raise operational efficiency and effectiveness ●
●
●
●
●
Speed up the amendment to the framework law on government budgeting; Implement supplementary measures, such as providing a living subsidy, to support junior civil servants, and commence improvement of benefits and remuneration for all civil servants; Amend the law on the organisational structure and operations of the Cultural Affairs Bureau (ICM) and the Macao Sports Development Board (IDM) to support the migration of the related functions of the Civic and Municipal Affairs Bureau (IACM), and adjust other functions of the IACM; Deepen and improve performance assessment for department heads, and consider establishing a special committee to coordinate and supervise the related work; Review existing consultation bodies, restrict consultation members from doubling up positions, set term limits of offices, and increase inclusiveness and transparency.
Anti-corruption and auditing ●
●
The Commission Against Corruption will optimise its organisational structure and staffing, strive to build a corruption-free government, and persist in its mission to secure fairness and justice in society; The Commission of Audit will continue to strictly implement its audit and supervision functions, enhance the efficiency of follow-up auditing, and support and improve the government’s performance management.
MACAO SAR BUDGET - REVENUE AND EXPENSES FOR 2014 OVERVIEW REVENUE ITEMS
Proposed budget for 2014 REVENUE ITEMS General integrated budget of public expenditure 141,287,275,000.00 123,524,541,300.00 5,553,860,700.00 1,609,695,600.00 2,660,945,100.00 6,704,486,300.00 1,408,600.00 1,140,036,900.00 92,300,500.00
RECURRING REVENUE Direct tax Indirect tax Fees, fine and othter monetary penalties Asset revenue Transfer Sale of durable items Sale of labour and non-durable items Other recurring revenue
Proposed budget for 2014 2,944,505,200.00 1,024,148,100.00 345,069,000.00 1,554,720,500.00 20,567,600.00
CAPITAL REVENUE Disposal of investment assets Transfer Financial assets Other captial revenue Refunds not deducted from payments
General integrated budget of public revenue 144,231,780,200.00
Revenue of special organisations Statutory income and transfer from the MSAR budget Income from sales and provision of services Income from financial investments Other income
EXPENSES ITEMS
16,374,100,100.00 205,890,800.00 4,278,359,500.00 68,578,700.00
Total revenue of special organisations
Adjustment 11,539,008,600.00 Grand total 153,619,700,700.00
Proposed budget for 2014 EXPENSES ITEMS General integrated budget of public expenditure
Macao SAR Government Office of the Chief Executive Exccutive Council Office of the Secretary for Administraiton and Justice Office of the Secretary for Economy and Finance Office of the Secretary for Security Office of the Secretary for Social Affairs and Culture Office of the Secretary for Transport and Public Works Macao Economic and Trade Office in Lisbon Macao Economic and Trade Office to the European Union in Brussels Office of the Macao SAR in Beijing Macao Economic and Trade Office to the World Trade Organization Office for Personal Data Protection Infrastructure Development Office Office for Development of the Energy Sector Supporting Office to the Permanent Secretariat to the Forum for Economic and Trade Cooperation between China and Portuguese-speaking Countries Financial Intelligence Office Human Resources Office Transportation Infrastructure Office The Macao SAR Government Policy Research Office Macao Economic and Cultural Office in Taiwan Protocol, Public Relations and External Affairs Office Public Adminstration and Civil Service Bureau Education and Youth Affairs Bureau Statistics and Census Service Bureau of Telecommunications Regulation Finance Services Bureau Pension and retirement compensation General expenses Tertiary Education Services Office Transport Bureau Law Reform and International Law Bureau Identification Services Bureau Macao Economic Services Bureau Macao Prison Macao Customs Service Meteorological and Geophysical Bureau Government Tourist Office Government Information Bureau Unitary Police Service Gaming Inspection and Coordination Bureau Marine and Water Bureau Public Security Forces Affairs Bureau Labour Affairs Bureau Judicial Council Cartography and Cadastre Bureau
15,450,000.00 259,321,400.00 22,439,000.00 33,710,000.00 42,266,500.00 26,240,500.00 194,028,800.00 59,162,700.00 13,915,000.00 5,442,000.00 25,752,300.00 13,330,900.00 62,787,300.00 85,080,300.00 39,686,600.00 84,961,100.00 30,979,400.00 50,605,600.00 63,148,100.00 47,785,000.00 17,281,900.00 128,618,500.00 424,485,200.00 4,747,178,800.00 175,027,500.00 105,988,000.00 386,117,000.00 30,314,600.00 14,295,586,900.00 235,562,600.00 1,884,331,900.00 87,300,000.00 255,199,000.00 179,762,500.00 458,913,400.00 557,208,200.00 86,747,200.00 249,868,400.00 126,349,000.00 35,236,800.00 220,143,300.00 1,002,390,200.00 3,449,469,200.00 360,284,400.00 620,000.00 69,397,800.00
20,926,929,100.00
Proposed budget for 2014
Judiciary Police Environmental Protection Bureau Legal Affairs Bureau Lands, Public Works and Transport Bureau Macao Sports Development Board Cultural Affairs Bureau Investment projects Designated accounting items: designated appropriations, shared allocations and transfer budget Student Welfare Fund Housing Loan Fund Industrial and Commercial Development Fund Tourism Fund Social Welfare Bureau Judiciary Police Welfare Association Public Security Police Force Welfare Association Coffer of Legal Affairs Government Printing Bureau Macao Prison Fund Housing Bureau Civil Aviation Authority Macao Trade and Investment Promotion Insititute Commission Against Corruption Health Bureau University of Macau Macao Polytechnic Institute Sports Development Fund Culture Fund Consumer Council Institute for Tourism Studies Macao Public Administration Welfare Fund Fire Services Welfare Association Commission of Audit Public Prosecutions Office Office of the President of the Court of Final Appeal Legislative Assembly Civic and Municipal Affairs Bureau Customs Welfare Association Science and Technology Development Fund Marine and Water Bureau Welfare Association Fisheries Development and Support Fund Property Maintenance Fund Education Development Fund Giant Panda Foundation Environmental Protection and Energy Conservation Fund Cultural Industry Fund
727,956,400.00 214,504,900.00 234,454,600.00 454,347,200.00 139,100,000.00 344,607,000.00 14,801,383,500.00
General integrated budget of public expenditure
80,071,048,400.00
11,461,508,600.00 487,751,000.00 43,460,900.00 1,138,582,000.00 1,035,478,600.00 2,425,072,400.00 7,137,000.00 32,030,200.00 183,090,000.00 73,119,000.00 8,628,000.00 450,376,300.00 65,757,000.00 392,693,000.00 238,000,000.00 5,228,913,400.00 1,913,498,000.00 635,104,000.00 579,895,100.00 500,000,000.00 36,742,200.00 278,697,100.00 37,314,600.00 7,402,000.00 125,809,100.00 371,966,000.00 461,100,000.00 148,808,000.00 2,400,026,000.00 4,004,800.00 177,565,900.00 3,000,000.00 90,000,000.00 176,460,000.00 772,715,600.00 7,200,000.00 157,009,000.00 253,305,200.00
Expenditure of special organisations Macao Post Postal Savings Office Pension Fund Social Security Fund Monetary Authority of Macao Automobile and Maritime Security Fund
298,673,000.00 36,155,000.00 1,258,049,300.00 2,963,895,900.00 2,422,606,200.00 5,129,600.00
Macao Foundation Deposit Protection Fund Total expenditure of special organisations Adjustments Grand total
2,091,988,400.00 3,195,000.00 9,079,692,400.00 11,539,008,600.00 77,611,732,200.00
Budget balance & estimated surplus for this year Central budget balance Estimated surplus of special organisations
64,160,731,800.00 11,847,236,700.00
Budget balance & estimated surplus of the year Total expenditure, budget balance and estimated surplus of the year
76,007,968,500.00 153,619,700,700.00
11 11
November 13, 2013 April 19, 2013
Ad
(TRANSLATED VERSION)
Major Policies on Various Areas Deepen regional cooperation Assist industries to leverage CEPA;
Continue to develop a service-oriented and accountable government in line with the MSAR Government’s overall policy objectives; enhance legislative coordination and implement legislative plans for 2014; improve civic and municipal facilities; render full support to the election work of the fourth Chief Executive and the Election Committee.
Facilitate Guangdong-Macao cooperation and encourage all sectors to participate in Hengqin development; Give full play to Macao’s function as a business service platform between China and Portuguese-speaking countries; and
Public Administration
Continuously improve people’s livelihoods
Improve centralised personnel management, enhance training effectiveness and establish a centralised mediation system;
6.4
6.3
7.0
27.5
26.9
6.3
6.0
25.0
6.0 21.8
5.0
20.0 4.9
15.0
4.1
12.6
10.0
14.4
14.3
4.0
3.5
3.8
8.9
3.0
8.6
2.8
3.2
9.9
10.2
2.0
1.9
1.8
2012 9.9 2.0
2013 Q1 10.8 1.9
2013 Q2 10.2 1.8
3.4
2.9
10.8
2.6
5.7
5.0
3.0 2.0
1.7
1.0
0.0
Actively engage in Pan-PRD regional cooperation and join hands with Guangdong and Hong Kong to organise the Pan-PRD Regional Cooperation and Development Forum.
Follow up on the implementation of the performance assessment system for department heads, enhance accountability, and foster a civil service culture of integrity, frugality and readiness to serve the public;
% 8.0 6.8
30.0
-5.0
Optimise facilities and functions of the Government Integrated Service Centre, improve service assessment and feedback collection mechanisms, and develop crossdepartmental self-help services and e-governance;
-2.4
1999 -2.4 6.3
2000 5.7 6.8
2001 2.9 6.4
2002 8.9 6.3
2003 12.6 6.0
2004 26.9 4.9
2005 8.6 4.1
2006 14.4 3.8
Unemployment Rate (%)
2007 14.3 3.2
2008 3.4 3.0
2009 1.7 3.5
2010 27.5 2.8
2011 21.8 2.6
0.0
Economic Growth Rate in Real Terms (%)
Changes in Economic Growth Rate in Real Terms and Unemployment Rate (1999 – 2013 Q2)
Effectively protect local residents’ employment rights and interests; Adopt and effectively implement timely relief measures; Stabilise the supply of goods and services and closely monitor the impact of inflation on people’s livelihoods; and Safeguard consumers’ rights according to law. The IACM Laboratory is fully committed to food safety
Complete a series of adjustments to the purview of the Civic and Municipal Affairs Bureau (IACM), the Cultural Affairs Bureau and the Macao Sports Development Board, and begin assigning transport and public works functions to the IACM.
Legal Affairs Enhance communication and cooperation with the Legislative Assembly, implement legislative plans for 2014, and continue to improve legislative coordination by standardising legislative procedures and optimising formulation of legislative plans;
% 35.0
Collaborate with the Legislative Assembly to approve through legislative procedures the results of rectification and adaptation of laws previously in force in Macao that have been technically reviewed;
Strengthen financial and monetary regulations
Optimise the public fiscal management and taxation systems;
Strengthen financial regulation to ensure the stability of the monetary system;
Manage fiscal reserves effectively; and
Combat money laundering and terrorist financing activities in accordance with the law.
Enhance relevant laws and regulations
Review and amend laws and regulations concerning economic and trade, finance, monetary and labour-related affairs.
Work closely with the judiciary to provide training courses, and review and amend the Judicial Organisation Framework Law in due course.
Civic and Municipal Affairs Follow up on the effective implementation of the Food Safety Law, and optimise operation, supervision and management of the Food Safety Centre;
Coordinate and prepare for relocation of the wholesale market;
Continue to improve internal management and strengthen the police force through technology; Emphasise cooperation between the police and the public; strive to enhance management and staff quality and raise morale; realise policy objectives through practical implementation.
Raise overall quality of life by improving civic and municipal facilities;
Deployment of police operations
Collect and recycle green waste;
Step up civic education to enhance our cultural strength.
Enhance capacity to fight crime; improve law enforcement and highlight community policing; Raise crisis awareness through close monitoring, careful deployment and prompt response; Facilitate convenient border crossing by developing electronic customs clearance and expanding self-service immigration clearance to achieve performance pledges;
Maintain steady growth, optimise economic structure, enhance quality through industrial transformation, and improve people’s livelihoods.
Strengthen cooperation and intelligence collection with overseas counterparts;
Strengthen traffic law enforcement to enhance road safety and improve traffic in various ways.
Promote optimal diversification Facilitate the development of the convention and exhibition sector;
Raising overall capacity Improve law enforcement effectiveness through the use of advanced technology;
Foster industrial transformation and upgrading; Tighten gaming regulation to ensure stable growth of pillar industries; and
Improve technological operations and expedite legislation on construction of a DNA database;
Boost the development of modern logistics, retail, cultural and creative, and Chinese medicine industries.
Study the plan to support frontline law enforcement through the use of information technology including mobile network data and GPS systems;
Support small and medium enterprises
Emphasise staff training and academic research into police issues to enhance service quality;
Effectively implement various financial aid measures;
Help discharged prisoners to start new lives through social rehabilitation by improving existing facilities, overseeing new prison construction, raising prison staffing levels, strengthening publicity and improving the public image of the prison service.
Assist enterprises to enhance management and marketing; Support the development of Macao-branded products and services; and
Provide prompt relief for enterprises facing human resource difficulties.
Maintaining Public Order Enhance efficiency of customs clearance, strengthen law enforcement cooperation and protect intellectual property rights;
Enhance human resource quality
Expand the mobile patrol network to strengthen marine rescue and surveillance services;
Organise diverse vocational training programmes to promote upward mobility of local employees;
Encourage the public to pursue professional qualifications; and Facilitate the establishment of a vocational skills appraisal system.
The PSPF pursue the goals of integrity, high efficiency, competence and professionalism
Closely supervise the progress of Stages II and III of the public video surveillance system project;
Prioritise fire safety education, and develop contingency deployment action plans by fire service sub-stations that focus on protecting historic buildings and major new construction projects.
12 12
November 13, 2013 April 19, 2013
Ad
(TRANSLATED VERSION)
Major Policies on Various Areas Strengthen the radio-dispatch taxi service, issue additional taxi licences, and review the overall approach to development in the taxi service industry;
To make every effort to understand people’s needs, to solicit public opinion, to embrace collective wisdom, to pursue social wellbeing, to promote social cohesion and to strengthen public health. We join hands with the public to build a better special administrative region, our home.
Commence trial operation of the new Taipa Ferry Terminal and continue to enhance sea and air transport infrastructure.
Environmental protection, energy and telecommunications Continue to strengthen air pollution controls, and expedite the establishment of an environmental impact assessment system;
Health
Implement the policy to introduce environmentally friendly vehicles, raise the subsidy cap of the Environmental Protection and Energy Conservation Fund, help enterprises to improve their business environment, and implement in stages the construction of a water recycling plant and public piping system for recycled water;
Perfect healthcare policy for the elderly and build a healthy and peaceful society; Strengthen the quality management system and enhance medical services efficiency; Intensify disease prevention and control and facilitate the long-term development of medical services.
Implement the plan to develop the television market, and the new scheme concerning electricity consumption and pricing.
Education / Youth Establish a quality assurance mechanism and reinforce talent training in all aspects; Implement the System Framework for Private School Teaching Staff of Non-tertiary Education to cultivate high quality teachers; Address students’ diverse needs and facilitate the development of school systems; Engage young people’s positive energy and boost their competitive potential.
In 2014, the Commission Against Corruption will uphold its principles through enforcement and prevention to promote integrity in the special administrative region. A mega delegation for “Experience Macau Tour” visits Macao
Action against graft Monitor areas of public administration considered prone to corruption, and strengthen communication with judicial bodies to enhance investigative efficiency;
Social work / Social security
Improve the capability of investigators through professional training;
Improve planning and implement policies that serve young people and support the elderly; Optimise the family services network and expand childcare and rehabilitation services; Establish a two-tier social security system and provide sustainable retirement protection.
Ensure integrity, fairness and impartiality in the fourth Chief Executive Election; Propose a bill to regulate “affected transactions” to perfect Macao’s anti-corruption system;
Tourism
Strengthen joint investigation of cross-border cases and international law enforcement and judicial cooperation;
Launch tourism planning research and improve the overall tourism environment; Enhance tourism training and management to raise service quality; Engage in regional and international cooperation and develop diverse tourism products.
Culture
Assist the People’s Republic of China regarding the review of implementation of the United Nations Convention against Corruption by United Nations experts.
Complaints to the Ombudsman
Promote heritage protection and launch cultural heritage census; Popularise cultural and art education to nurture artistic talent; Improve cultural facilities and expand physical capacity for more cultural activities.
Sports
Bolster the fight against bribery in the private sector and create a corruption-free business environment;
Enhance promotion of sport for all and encourage public participation; Deepen public knowledge of fitness science and foster all-round sports talent; Expedite the construction of sports facilities and implement green management principles.
Investigate the legitimacy and appropriateness of actions and administrative procedures of public departments and entities, and request rectification of any administrative illegality or misconduct; Handle complaints concerning the basic rights and interests of the public through a special taskforce;
Review flaws in laws and regulations, especially those that affect people’s rights, freedom, safeguards or rightful interests;
Provide staff training to improve work capacity and efficiency;
Exchange and share experience with international ombudsman institutions to strengthen complaint processing workflow.
Publicity and education Intensify integrity education amongst civil servants in order to raise the standards of integrity throughout the civil service; Enhance corruption prevention education in the private sector, and assist industries to formulate codes of conduct to develop a corruption-free business culture;
Realising the administrative objectives to enhance underlying strength and promote sustainable development, gradually improve the legal system, expedite construction of infrastructures for regional integration and livelihood activities, so as to strengthen the driving force for urban development.
Launch community education on integrity and advocate public participation in building a corruption-free government; Improve education materials about integrity and probity for primary and secondary schools, and co-organise activities with schools to enhance integrity education for young people and teenagers.
Regional cooperation and urban planning Maintain steady progress in the construction of the new Guangdong-Macao border-crossing project, and actively participate in negotiations on matters related to the artificial island port facilities of the Hong Kong-Zhuhai-Macao Bridge; Expedite cross-border infrastructure construction in response to regional development; Implement the enactment of the Urban Planning Law, accelerate drafting of relevant laws, and push forward studies on urban planning.
Land management and urban infrastructure development
In relation to enforcement of the amended Land Law, expedite the review and amendment of relevant regulations; Follow up on legislative procedures concerning urban construction laws, fire prevention regulations and recognition of professional qualifications, and formulate remedial measures to enhance the drainage capacity of the public sewage system; Continue the planning and improvement of the pedestrian walking system by developing two walking routes, on the Macao peninsula and in Taipa, to create a user-friendly and comfortable walking environment.
Housing policy
Management of audit projects
Establish a sound audit file management system and plan a feasibility study on the digitisation of audit files.
Staff training
Follow up on the new round of applications for HomeOwnership Scheme housing and public housing, so as to allocate housing units in an orderly manner;
Organise appropriate professional training programmes for staff of the Commission of Audit and enhance the operational expertise of audit teams to meet future needs.
Set up the Building Management Affairs Centre to increase support for building management.
Expedite construction of the Light Rail Transit system and enhance its route on the Macao peninsula; enforce express lanes for public transport to improve road traffic flows;
Learn from the experience of applying the On-site Audit System to account auditing to improve and expand its audit functions, plan for system development for the next stage, and enhance associated technologies to ensure the efficiency and accuracy of account auditing.
Enhance planning and management of audit projects and emphasise proactive management of the annual plan, improve the audit file management system, facilitate study and scientific argumentation of audit projects, and optimise the deployment of audit resources;
Formulate Public Housing Development Strategy by taking into account the studies on the “Macao Property for Macao Residents” policy, and further augment the existing public housing policy to increase the number of its beneficiaries;
Transport
Computer-aided audit
Expedite regional cooperation and cross-border infrastructure construction
Promotion Enhance civil servants’ understanding of auditing work and promote its positive effects on departmental governance through seminars and workshops on audit culture, promote audit culture at operational level, and exchange views on issues of mutual concern.
13 13
November 13, 2013 April 19, 2013
Greater China
Chinese stocks rise most in two weeks Led by consumer staples and financial shares
C
hina’s stocks rose the most in almost two weeks before the conclusion of a four-day Communist Party meeting. Kweichow Moutai Co, China’s biggest liquor maker, climbed 3.8 percent after it announced plans to buy property in France to expand its business. Cosco Shipping Co paced gains for shippers after the China Securities Journal reported the government will make it easier to get subsidies to encourage the scrapping of older vessels. Ping An Bank Co Ltd surged 4.9 percent. China Oilfield Services Ltd, the drilling unit of the nation’s largest offshore oil producer, slid 1.9 percent. The Shanghai Composite Index added 0.8 percent to 2,126.77 at the close, the biggest advance since October 30. Trading volumes plunged 34 percent below the 30day average after falling to a fourmonth low on Monday. “The market is waiting for news from the plenary meeting to see if coming policies will exceed expectations,” said Wei Wei, an analyst at West China Securities Co in Shanghai. “Market sentiment is cautious as trading volumes are light.” Hong Kong shares also slid yesterday led by China’s “Big Four” banks. The Hang Seng Index finished down 0.7 percent at 22,901.4 points, while the China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.2 percent. The Shanghai Composite has dropped 13 percent from this year’s high set on February 6 amid concern
economic growth will slow in the fourth quarter. A gauge of consumer staples in the CSI 300 jumped 1.9 percent for the biggest gain among 10 industry groups, followed by a 1.4 percent advance for financial shares. Kweichow Moutai surged 3.8 percent to 144.84 yuan. The liquor maker said on Monday the board approved a plan to buy a property in Paris for 8.79 million euros (US$11.8
Amid weak demand for Chinese bank stocks
S
Bloomberg News
China expected to lower the threshold on subsidies for scrapping ships
Huishang shares up on debut
hares in Huishang Bank Corp Ltd became the second China bank in just over a week to make a lacklustre Hong Kong debut, underscoring lukewarm investor appetite for the Chinese banking sector despite a likely raft of listings on their way. The start for Huishang, which raised $1.2 billion in the city’s biggest bank
million) to develop its business in Europe. Rival Wuliangye Yibin Co advanced 3.2 percent to 17.04 yuan. Ping An Bank, a unit of the secondbiggest Chinese insurer, climbed 4.9 percent to 14.05 yuan. Huaxia Bank Co, partly owned by Deutsche Bank AG, rose 2.2 percent to 7.85 yuan. “Money and credit growth were still quite solid and investors should not be too much swayed by the seasonality in new loans, deposits
and total social financing,” Lu Ting, head of Greater China economics at Bank of America Corp, wrote in an e-mailed report. “We don’t expect the PBOC to significantly tighten monetary policies as new leaders still need a stable economic and financial environment to consolidate their power base.” Cosco Shipping, a unit of China’s largest shipping company, gained 2.8 percent to 3.34 yuan. China Shipping Development Co, a unit of the nation’s second-biggest sea-cargo group, added 1.2 percent to 4.16 yuan. China will lower the threshold on subsidies for scrapping ships, the China Securities Journal said, citing an unidentified person. The ministries are reviewing the draft rules, which may be announced before the end of the year, it said.
IPO in three years, follows weak pricing for the offer, near the bottom of its marketing range. Huishang Bank shares closed at HK$3.60, up 1.98 percent from their debut price. That compares with a marketing range of HK$3.47 to HK$3.88. The soft tone for bank listings comes as China Cinda Asset Management
Co Ltd, the nation’s biggest bad loan manager, began gauging investor interest for its up to US$2 billion IPO this week. The offer is expected to be priced in the first week of December. Also monitoring the debut are other Chinese lenders, including China Everbright Bank, Bank of Beijing and China Guangfa Bank, which are among companies seeking to raise about US$11 billion through Hong Kong offerings over the next 8 to 10 months. Bank of Chongqing, the fellow Chinese provincial lender which listed last week, was also trading below its IPO price yesterday. Some market participants said that of the two, Huishang, which is based in the booming industrial heartland of Anhui province, looks to be the better bet. “It’s fairly valued and is a better buy compared to recently listed Bank of Chongqing, which counts local governments as its key clients,” said Jackson Wong, Tanrich Securities vicepresident for equity sales. “Huishang is less risky because its business is more retail-driven and it’s one of the more recognisable banks in the central parts of China,” he added. Reuters
PBOC raises yuan fixing toward record C
hina raised the yuan’s reference rate to within 0.1 percent of an all-time high before a visit this week by U.S. Treasury Secretary Jacob J. Lew, who is calling for faster exchange-rate reform in the Asian nation. The People’s Bank of China boosted the fixing by 0.05 percent to 6.136 per dollar, near a record 6.133 on October 23. Mr Lew is traveling to Japan, China, Singapore, Malaysia and Vietnam from yesterday and will discuss the importance of allowing financial markets to determine exchange rates, according to Treasury officials, who requested anonymity as a condition for briefing reporters. China should move more quickly on this front, he wrote in an editorial yesterday in The Wall Street Journal Asia. “The PBOC has been setting the fix on the stronger side in the lead-up to Lew’s visit this Friday,” said Khoon Goh, a Singapore-based
strategist at Australia & New Zealand Banking Group Ltd. “This has helped the yuan fare better compared to other Asian currencies.” The yuan closed at 6.0919 per dollar in Shanghai, little changed from Monday’s 6.0913, according to the China Foreign Exchange Trade System. The rate was 0.72 percent stronger than the People’s Bank of China’s reference rate, compared with the maximum allowed divergence of 1 percent. The yuan has strengthened 0.4 percent in the past month, Asia’s best performance. One-month implied volatility in the onshore yuan, a measure of expected moves in the exchange rate used to price options, fell for a second day before the conclusion of a four-day meeting at which Chinese leaders are discussing economic reforms. The rate fell four basis points, or 0.04 percentage point, to 1.63 percent. Bloomberg News
14 14
November 13, 2013 April 19, 2013
Greater China
ICBC joins financial stability risk list JPMorgan and HSBC top global systemically important rankings Jim Brunsden and Dakin Campbell
I
ndustrial & Commercial Bank of China Ltd was added to the list of too-big-to-fail banks as global regulators revised the roster of lenders that must hold extra capital to prevent another financial crisis. ICBC, China’s largest bank by assets, was the only firm joining the updated list of systemically important firms released by the Financial Stability Board. Lenders whose capital buffers were cut from last year included Citigroup Inc, Deutsche Bank AG and Bank of New York Mellon Corp, while Credit Agricole Group was told to add more. Regulators are ranking financial firms by their potential to cause a global meltdown and demanding bigger financial cushions from them to avert any repeat of the 2008 credit freeze. While ICBC is the world’s most profitable lender, bad loans are rising at China’s top banks after a fiveyear credit spree. As for Western companies, Pri de Silva, an analyst at CreditSights Inc, said he’s surprised by some of the cuts. Are these institutions “less interconnected than they were a year ago? That doesn’t seem likely,” said the New York-based analyst. Some lenders may have gone “to the powers that be and made the case that they should be viewed from a different lens,” he said. The revised list leaves only New York-based JPMorgan Chase & Co, the largest U.S. bank by assets, and London-based HSBC Holdings Plc, Europe’s biggest by market value, in line to face the top 2.5 percent surcharge.
ICBC says its ratios exceed minimum regulatory requirements
Citigroup and Frankfurt-based Deutsche Bank must meet a 2 percent target after previously being in the top category. Beijing-based ICBC’s surcharge is 1 percent, the same as Bank of China Ltd, which was already included last year.
Higher ratios BNY Mellon, the world’s largest custody bank and based in New York, also dropped into the 1 percent cohort. Only Paris-based Credit Agricole was
saddled with an increase, with the surcharge level rising to 1.5 percent from 1 percent. Officials at lenders declined to comment on the changes or didn’t respond to inquiries. The surcharge represents the amount of capital a bank must have beyond the minimums already set by international regulators to fortify banks against their own losses or an external economic shock. Officials decided in 2010 to more than triple thresholds for the core
UBS to boost computer trading in China Institutional investors account for about 20 percent of trading volumes
U
BS AG’s China venture plans to offer more computerisedtrading services as it bets on a surge in demand from institutional money managers in the biggest emerging market. Stock-trading volumes from institutional investors will more than double within five years, spurred by regulators’ efforts to reduce market volatility and reform capital markets, Qu Hongjie, executive director of China equities at UBS Securities Co, a venture of Switzerland’s largest lender, said in an interview from Shanghai. “We foresee in the next 3 to 5 years institutional trading flows will
increase from the current 20 percent to over 50 percent,” Mr Qu said. “As institutional investors have higher demands for better execution services, more powerful and sophisticated electronic trading platforms will become a key factor for brokerage firms to win market share.” The government is targeting more capital from both large domestic and foreign investors to revive a stock market that has been among the world’s worst performers over the past three years. The Shanghai Composite Index has fallen 36 percent since the start of 2010. China almost doubled investment quotas for the qualified foreign
institutional investors programme to US$150 billion in July. Institutional investors account for 60 percent to 70 percent of trading volumes in developed markets, Mr Qu said. In China, that’s only about 20 percent, he said. China will continue expanding the types of contracts traded on local exchanges, Mr Qu said. The China Financial Futures Exchange started mock trading of options on CSI 300 stock-index contracts on November 8. The options will help improve price discovery and market efficiency, according to the exchange. Some local brokers are also testing the use of stock options with the
capital that banks should keep to absorb losses. The FSB produces the list in preparation for capital rules scheduled to be phased in starting in 2016. Alterations to the FSB list were driven by “data quality improvements, changes in the methodology and changes in underlying systemic importance,” the FSB said. ICBC won’t need to raise more capital because its ratios exceeded minimum regulatory requirements, the bank said in an e-mailed statement
exchange that would allow investors to hedge their holdings in specific companies, Mr Qu said. Institutional clients are moving away from traditional brokerages to electronic-trading platforms because they are cheaper and allow for more anonymous trading, he said. UBS currently provides algorithmic-trading services, or “passive” strategies where the client sets up rules in advance and then lets the computer trade, Mr Qu said. The firm wants to start quantitative trading services, where computers identify trading opportunities for clients, he said. While UBS has the technologies for high-frequency trading, barriers prevent their use in the Chinese market, Mr Qu said. These include a stamp duty on stock sales and prohibitions on buying and selling the same stock on the same day, or the “T+1” rule. 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
15 15
November 13, 2013 April 19, 2013
Greater China KEY POINTS ICBC the only firm joining updated list Bank says it won’t need to raise more capital
US$140 bln
Firms ranked by potential to cause global meltdown Citigroup, Deutsche Bank levy drops
China’s aggregate financing in October
yesterday. As a global systemically important bank, ICBC said it needs to meet a minimum core tier 1 capital ratio of 8 percent. The lender had a ratio of 10.48 percent as of June 30, while Bank of China’s was 9.27 percent, stockexchange filings in August show. Those levels were higher than the 8.5 percent the China Banking Regulatory Commission requires the nation’s systemically important banks to hold by the end of 2018. “ICBC is not facing a huge issue in maintaining its capital level, but it does face pressure,” Chen Xingyu, a Shanghai-based analyst at Phillip Securities Group, said by phone yesterday. “It needs capital to support loan growth.” ICBC said its growing international business was a “key factor” behind its addition to the FSB’s list. The bank’s overseas assets amounted to US$182.2 billion at the end of June, representing 6 percent of its total assets. The Chinese lender started expanding overseas with its 2006 purchase of a 90 percent stake in PT Bank Halim Indonesia. In March 2008, ICBC bought 20 percent of Standard Bank Group Ltd, Africa’s largest, for US$5.4 billion, in the biggest overseas acquisition by a Chinese bank. Bloomberg News
Beijing reins in shadow banking October’s numbers reflect a liquidity crunch during the month
C
hina’s broadest measure of new credit fell by more than estimated in October, suggesting authorities are trying to keep shadow-finance risks in check as leaders map out a blueprint to sustain growth. Aggregate financing was 856.4 billion yuan (US$140.6 billion), the People’s Bank of China said yesterday in Beijing, below all nine projections in a Bloomberg News survey. New local-currency loans of 506.1 billion yuan compared with the 580 billion yuan median estimate of analysts. M2, the broadest measure of money supply, rose 14.3 percent from a year earlier. Slower credit would constrain growth while limiting risks of a financial crisis as China seeks a way
Regulator denies reform of private stakes in state firms
C
hina’s supervisory body for state-owned companies has denied a media report that it will allow private investors to buy up to 15 percent stakes in state-owned enterprises (SOEs), adding that it will unveil a reform plan “as soon as possible”. The State-owned Assets Supervision and Administration Commission (SASAC) said yesterday that a report in the official Englishlanguage China Daily newspaper on Monday was incorrect. SASAC issued the denial in a short post on weibo, the Chinese version of Twitter. SASAC, which administers more than a hundred of China’s biggest state-owned companies, has said reform of SOEs is a major area of focus. The China Daily report quoted Bai Yingzi, director of SASAC’s enterprise reform division, as saying that private investors could create private equity consortia to purchase direct stakes in SOEs between 10-15 percent of assets, without giving further details. Private investors are already allowed to purchase shares in major state-owned enterprises listed
on domestic stock exchanges, but state-owned entities usually retain a controlling interest. Private and state-owned firms can currently create joint ventures in which the private share is higher than 15 percent. In June the official Xinhua news service reported that public utilities would be opened up to private investment. Late last month, an influential think-tank, the State Council’s Development Research Centre, recommended ending state-owned monopolies in the rail, oil and gas, and electricity industries, as a key reform. Other high-level officials, including former premier Wen Jiabao, have called for state-owned banks, key financial enablers of inefficient SOEs, to be subjected to more competition. Many economists and analysts remain sceptical that China will take more substantial steps to end SOEs’ privileged market monopolies due to a lack of consensus between conservatives and reformers. Reuters
to replace the debt-fuelled investment and construction that have sustained expansion since the global financial crisis in 2008. “This confirms our view that monetary policy has tightened and growth will slow going forward,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc in Hong Kong. With GDP expansion on track to achieve the 2013 goal of 7.5 percent, new bank loans and aggregate financing will decline this quarter from the previous period’s “high levels,” Mr Zhang said.
Factory production Even as credit growth slows, a revival in the real-estate market has seen developers’ sales of dollar bonds more than double this year, according to a report by Moody’s Investors Service. Such companies sold US$17.88 billion of the notes as of October 20, up from about US$8 billion for the whole of 2012. The below-forecast loans and credit contrast with gains in housing prices, industrial production and exports. Aggregate-financing projections ranged from 1 trillion yuan to 1.35 trillion yuan, with a median of 1.115 trillion yuan, following 1.4 trillion yuan the previous month and 1.29 trillion yuan in October 2012. Estimates for new yuan loans ranged from 420 billion yuan to 870 billion yuan, after lending totaled 787 billion yuan in September. Money supply rose 14.2 percent in September from a year earlier and
This confirms our view that monetary policy has tightened and growth will slow going forward Zhang Zhiwei, chief China economist at Nomura Holdings
was projected to advance 14.2 percent in October, according to the median estimate of economists. There are signals that authorities want to limit debt. The central bank said in a report last week that the economy “may see a decline in leverage” over a relatively long period, a suggestion that UBS AG said hadn’t been previously mentioned by a government economic agency. Premier Li Keqiang said in remarks published last week that “there’s a lot of money in the ‘pool’ and issuing more money may lead to inflation,” citing the nation’s outstanding M2 money supply of more than 100 trillion yuan (US$16 trillion) as of March, about double GDP. The credit data indicate that initiatives by the China Banking Regulatory Commission and PBOC “to contain rampant shadow banking growth appear to have worked,” said Liu Li-Gang, chief Greater China economist at Australia & New Zealand Banking Group Ltd in Hong Kong. “The PBOC also faces a dilemma, that is, if it tightens domestic credit conditions, the money market rates will rise further, leading to higher funding costs for firms,” Mr Liu said.
Liquidity crunch Amid signs of potential tightening, the benchmark seven-day repurchase rate climbed 85 basis points to 5.05 percent in October, helping derail a stock market rally and driving the one-year government bond yield to a record high. The October aggregate-financing figure was the second-lowest this year, after July’s 818.9 billion yuan. New local-currency loans from banks accounted for 59 percent of the total, the highest proportion in three months. Trust loans, one of the categories associated with shadow banking, totaled 40.4 billion yuan, the lowest since July 2012. “We have for a while expected the government to pursue a firmer overall monetary stance in order to rein in overall credit growth,” Louis Kuijs, chief China economist at Royal Bank of Scotland Group Plc in Hong Kong, said in a note. While August and September figures “seemed to call into question the government’s resolve” in implementing such a policy, the October credit numbers “point quite clearly to a firmer stance,” Mr Kuijs said. Bloomberg News
16 16
November 13, 2013 April 19, 2013
Asia
Reconstruction also tended to help improve GDP growth numbers as this provides economic stimulus Amando Tetangco, central bank governor
The storm affected as many as 9.7 million people
Typhoon to hurt Philippine growth Regional economies may shrink by 8 percent as president declares ‘national calamity’
P
hilippine growth will probably be slower than initially estimated this year after super typhoon Haiyan devastated some provinces, then rebound as reconstruction provides a boost, economists said. Gross domestic product for the full year may be as much as half a percentage point lower than a previous estimate of 7.3 percent to 7.5 percent, according to Jun Trinidad, a Manilabased economist at Citigroup Inc. GDP in the affected areas in eastern, central and western parts of the Visayas island group may decline by as much as 8 percent in 2014, Finance Secretary Cesar Purisima said yesterday. “This poses some downside risk to growth this year, but it’s going to be relatively short lived,” said Euben Paracuelles, a Singapore-based economist at Nomura Holdings Inc. “The recovery would be quick as we go into reconstruction and could push next year’s growth a little bit higher.” The areas account for about 12.5 percent of GDP, the government estimates, in a nation that has seen swelling investment from abroad as companies are drawn to the nation’s English-speaking pool of labour. The storm may have killed as many as 10,000 people as islands were flooded and crops damaged, with almost 9.7 million Filipinos affected, according to the National Disaster Risk Reduction and Management Council.
Inflation impact Growth in the Philippine economy, one of the most at risk globally from natural hazards according to risk-research company Maplecroft, has topped 7 percent for four consecutive quarters. Typhoons probably shave as much as 1 percent off the nation’s GDP annually, Mr Purisima said. Haiyan’s strength means the cost this time will probably be a multiple of that, according to at least one estimate.
Losses will be US$12 billion to US$15 billion, or about 5 percent of economic output, according to Charles Watson, director of research and development at Kinetic Analysis Corp, a disaster-modelling firm. “A US$12 billion storm is not really that bad here in the U.S.,” Mr Watson wrote in an e-mail yesterday. “For the Philippine islands, it is catastrophic.” Inflation may spike in November, even as average price gains for the full year are expected to be close to the lower end of the target of 3 percent to 5 percent, Bangko Sentral
ng Pilipinas deputy governor Diwa Guinigundo said on ABS-CBN News Channel yesterday. The nation will be able to achieve this year’s growth target of 6 percent to 7 percent, he said in a separate interview on CNBC Television. “The pace of reconstruction, more than the size of fiscal spending, would be crucial to recovery efforts while cushioning the economic drag from the natural disaster,” Mr Trinidad said in a research note. “The typhoon shock and the devastation wrought to Eastern Visayas only reinforce BSP’s
accommodation and pro-growth bias in the near-term.” The central bank last month held its interest rate at a record-low 3.5 percent for an eighth meeting. The nation has monetary and fiscal policy space to quickly respond to any impact on inflation and growth from the typhoon, central bank governor Amando Tetangco said on November 10, while Mr Guinigundo told ABSCBN rates will not show “upward adjustment”.
Reconstruction bump “If we are to gauge from past experience, natural disasters tend to have a one-off, non-persisting impact on inflation, as supply normalises soon after the occurrence,” Mr Tetangco said. “Reconstruction also tended to help improve GDP growth numbers as this provides economic stimulus.” Haiyan’s total economic impact may reach US$14 billion, about US$2 billion of which will be insured, according to a report by Jonathan Adams, a senior analyst at Bloomberg Industries, citing Kinetic Analysis Corp. Philippine President Benigno Aquino declared a state of calamity to speed aid to areas ravaged by the storm. The government has 18.7 billion pesos (US$429 million) to fund reconstruction, Mr Aquino said yesterday in a televised address. About 22 countries have pledged assistance. The areas hit hardest are not the core manufacturing or services zones and the impact “will not be too huge,” said Jeff Ng, an economist at Standard Chartered Plc in Singapore. Thirdquarter GDP data is scheduled to be released on November 28. “GDP impact could be small because the affected areas make up a small portion of overall GDP,” said Michael Wan, a Singapore-based economist at Credit Suisse Group AG, adding that he is maintaining his growth forecast for the Philippines this year at 7.2 percent. Bloomberg News
17 17
November 13, 2013 April 19, 2013
Asia
IMF calls on Thailand to ditch rice scheme Government pays about 40 percent above market prices
T
he International Monetary Fund called on Thailand to scrap its pricy scheme to support rice farmers and scale back some other fiscal stimulus measures in order to balance the budget and contain rising public debt. In its annual review of Thailand’s economy, the IMF also said the government should do a better job of supervising public banks and nonbank financial institutions, which pose growing financial risks. As Thailand continues to face risks from volatile capital flows and an uncertain global environment, the government should ensure it has enough money to respond to shocks, the IMF said. Gross domestic product data to be released next week is likely to show Southeast Asia’s secondlargest economy has struggled free of recession. But exports, which account for more than 60 percent of the economy, and private consumption remain weak, and analysts reckon the government will need to spend
to strengthen the recovery. The government says its fiscal position is strong, but spending on populist schemes is jeopardising its commitment to balance the budget. The IMF said the central government’s deficit would rise to 3.4 percent of GDP in the fiscal year that ended in September because of lower corporate tax rates and tax relief. And overall public debt is likely to rise to 53 percent of GDP by the end of 2018. The government should consider reducing energy subsidies and increasing corporate income taxes, or eliminating some tax credits, to meet its budget goals, IMF staff said. “The staff sees clear merit in replacing the rice pledging scheme with budgetary transfers targeted at low-income agricultural households,” the IMF report added. Pulling the plug on a rice price guarantee scheme for farmers might help stem the losses of billions of dollars of state funds, but Prime Minister Yingluck Shinawatra would risk losing crucial rural
support by doing so. The rice policy has been a disaster, however, with losses of 136 billion baht (US$4.3 billion) in the 2011-2012 crop year. After that, the government ceased reporting the losses, although former central bank governor and finance minister Pridiyathorn Devakula recently estimated the total at 425 billion baht.
Rajan spurs surge in India’s reserves Building reserves strengthens balance sheet, supports rupee
I
ndia’s biggest jump in foreignexchange reserves in two years offers the nation greater ammunition to support the rupee as U.S. policymakers debate when to pare back monetary stimulus. The reserves rose US$6.7 billion in October to US$283 billion, the steepest monthly increase since 2011, after central bank governor Raghuram Rajan offered concessional dollarswaps for lenders to spur inflows. Bank of America Merrill Lynch estimates they will reach US$305 billion by the end of March, the month
Lender to focus on its core markets
Reuters
Senate rejects amnesty bill Thailand’s Senate rejected a bill that would have provided an amnesty for political offences stretching back to the nation’s 2006 coup, easing concern that street protests in Bangkok may escalate into violence. Senators voted 141-0 against the draft after more than 10 hours of debate, Surachai Liengboonlertchai, vice president of the Senate, told reporters in Bangkok late on Monday. The bill will be sent back to parliament’s lower house, which can re-submit the bill after 180 days. Thousands of people joined daily rallies throughout the Thai capital over the past week, arguing that the amnesty law would fail to heal social divisions if it also exonerated politicians including Prime Minister Yingluck Shinawatra’s brother, former premier Thaksin Shinawatra who was ousted by the military in 2006, and soldiers and political leaders who oversaw a deadly crackdown on demonstrators in 2010.
New limits may help ensure the sustainability of the rice policy
the U.S. Federal Reserve is forecast to pare bond purchases. “Building reserves strengthens India’s balance sheet,” said Vivek Rajpal, a strategist at Nomura Holdings Inc in Singapore. “That should help prevent excessive volatility in the rupee when the U.S. tapers, even as India still needs to curb risks from budget and trade deficits.” A stable exchange rate would help contain the cost of imports as Mr Rajan fights Asia’s fastest consumerprice inflation to protect the more than 800 million Indians living on less than US$2 per day. The rupee has climbed about 8.5 percent since slumping to a record low in August, when speculation of Fed tapering as early as the following month led investors to pull billions of dollars from emerging markets. The currency has fallen this week after U.S. jobs data bolstered the case for the Fed to trim stimulus. The rupee has also been pressured after the Reserve Bank of India cut direct dollar supplies to oil refiners. Consumer-price inflation accelerated to 9.9 percent last month, the fastest in a basket of 17 AsiaPacific economies, according to a separate Bloomberg poll. Mr Rajan has raised the benchmark repurchase rate twice
DBS sells remaining Philippine bank stake
since becoming RBI governor in September, to 7.75 percent, as he seeks to reduce price pressures. The concessional swaps window he announced after taking charge has garnered US$17.5 billion so far, the RBI said yesterday. The facility is due to close on November 30. “Building ammunition gives a sense of comfort to the markets,” said Radhika Rao, an economist at DBS Bank Ltd in Singapore. At the same time, a bigger stock of reserves only buys time as Indian policymakers must achieve structural improvements in the economy, she said. Bloomberg News
US$283 bln
India’s foreignexchange reserves at the end of October
D
BS Group Holdings Ltd, Southeast Asia’s largest lender, agreed to sell its remaining stake in Bank of the Philippine Islands for S$850 million (US$681 million) to focus on key markets including Singapore and Hong Kong. The transaction, to be completed in two phases ending in March, will generate a gain of about S$447 million over the carrying value, DBS said in a statement yesterday. The 9.9 percent indirect ownership will be acquired by GIC Pte, Singapore’s sovereign wealth fund, and Ayala Corp, the Philippine company that is already BPI’s largest stakeholder. DBS began exiting its 14-year investment in BPI, the largest lender by market value in the Philippines, in October 2012 as chief executive Piyush Gupta sought to bolster capital buffers. Growth in the Philippine economy, which has expanded by more than 7 percent for four quarters, may slow this year after typhoon Haiyan devastated some provinces. “In the last two years, the Philippines became a very hot market,” Kenneth Ng, a Singaporebased analyst at CIMB-GK Securities Pte, said by telephone. “One of the reasons why they sold was that the rising Philippine market gave them the opportunity to do so.” GIC will buy 5.6 percent of the Philippine bank and Ayala will purchase 4.3 percent, lifting its stake to 48.3 percent, Ayala said in a statement yesterday. “This acquisition is both a value and earnings accretive investment for Ayala,” Ayala president and chief operating officer Fernando Zobel de Ayala said in the statement. “BPI has been a significant growth driver for Ayala over the years and we believe its earnings growth momentum will continue in step with the expansion of the Philippine economy.” The acquisition adds to GIC’s holdings of financial assets, which including real estate make up the biggest share of its listed holdings, according to data compiled by Bloomberg. DBS’s most-recent divestment follows its sale of a 10.4 percent stake in the Philippine lender to Ayala for S$757.3 million in October last year. DBS, which has been trying to increase the share of its earnings from overseas markets, will focus on its core markets of Singapore, Hong Kong, China, Taiwan, India and Indonesia, it said in the statement. Bloomberg News
18 18
November 13, 2013 April 19, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange)
Max 58.35
average 57.658
Min 57.1
Last 57.45
58.5
89.7
27.1
58.2
89.3
27.0
57.9
88.9
26.9
57.6
88.5
26.8
57.3
88.1
26.7
57.0
Max 89.65
average 89.289
Min 87.8
87.7
Last 89.35
Max 27.05
average 26.885
Min 26.65
Last 27
24.9
55.7 55.3
29.50 29.25
24.6
54.9
29.00 24.3
54.5
Max 55.65
average 54.868
Min 54.15
Last 54.7
54.1
Max 24.85
average 24.289
Commodities PRICE
DAY %
YTD %
(H) 52W
94.28
0.08492569
0.974617115
109.6999969
85.51999664
BRENT CRUDE FUTR Dec13
103.42
-0.038662285
-1.326209331
114.4399948
95.95999908
GASOLINE RBOB FUT Dec13
250.62
0.12384643
-1.501336268
290.3199911
241.5999889
GAS OIL FUT (ICE) Dec13
885.25
-0.056449337
-1.802551303
973
837
3.539
0.568343279
-10.35967579
4.744000435
3.378999949
283.91
-0.003522119
-4.852709541
321.1599827
276.4999866
Gold Spot $/Oz
1311.67
-0.2851
-21.1955
1754.46
1180.57
Silver Spot $/Oz
NY Harb ULSD Fut Dec13
21.7235
-0.2342
-27.8529
34.3838
18.2208
Platinum Spot $/Oz
1458.6
-0.5217
-3.8972
1742.8
1294.18
Palladium Spot $/Oz
761.5
0.3254
8.8386
786.5
604
LME ALUMINUM 3MO ($)
1821
-0.054884742
-12.15629522
2184
1758
7145
0.421644413
-9.910477872
8346
6602
1900.5
-0.653423941
-8.629807692
2230
1811.75
LME COPPER 3MO ($) LME ZINC
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Jan14
14000
-0.779588944
-17.93669402
18770
13205
15.495
-0.064495324
0.518975024
16.80999947
14.91500092
420.25
-0.059453032
-29.92913714
647
419
WHEAT FUTURE(CBT) Dec13
653.25
0.038284839
-20.40816327
913
635.5
SOYBEAN FUTURE Jan14
CORN FUTURE
Last 24
(L) 52W
WTI CRUDE FUTURE Dec13
NATURAL GAS FUTR Dec13
METALS
Min 24
Dec13
1264.25
-0.177654955
-3.418640183
1406
1169
COFFEE 'C' FUTURE Dec13
103.8
-0.144300144
-33.65292426
172.0999908
100.9499969
SUGAR #11 (WORLD) Mar14
18.08
0.22172949
-12.14771623
20.71999931
16.69999886
COTTON NO.2 FUTR Dec13
76.42
-0.442926061
-2.946405893
93.72000122
74.34999847
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
Max 29.35
average 29.025
Min 28.85
Last 29.1
28.50
World Stock Markets - Indices COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
15593.98
-0.970986
19.00041
15797.67969
12471.49
NASDAQ COMPOSITE INDEX
US
3857.333
-1.89761
27.74683
3966.71
2810.8
13.06315
6875.62
5605.589844
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
0.9462 1.6087 0.9165 1.3418 98.21 7.9841 7.7516 6.0908 62.655 31.402 1.2434 29.462 43.193 11413 92.929 1.22975 0.83405 8.1707 10.7127 131.78 1.03
-0.3161 0.0684 -0.3601 -0.6442 0.5091 0 0 0.0115 -0.3831 -0.2452 -0.0643 -0.1358 0.0509 -0.1752 0.8264 0.2862 0.7314 0.8065 0.6562 1.161 0
-8.8264 -0.5502 -0.12 1.7286 -12.3307 -0.0113 -0.0129 2.2953 -12.2257 -2.6177 -1.7693 -1.4561 -5.0656 -14.1943 -3.8761 -1.8109 -2.2337 0.5728 -1.7017 -13.8185 -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
4.73
-1.663202
16.53
-0.6013229
VOLUME CRNCY
50.15873
5.12
2.56
1343388
54.92034
17.38
9.77
2853132
AMAX INTERNATION
1.12
-0.8849558
-20
1.72
0.75
286125
BOC HONG KONG HO
24.9
-0.2004008
3.3195
28
22.85
8214317 184000
CENTURY LEGEND
NAME
24.0
28.75
Currency Exchange Rates
NAME ENERGY
26.6
0.435
2.352941
64.15095
0.56
0.24
CHEUK NANG HLDGS
7.18
-0.1390821
19.86645
7.28
4.1
19000
CHINA OVERSEAS
23.1
-0.6451613
0
25.6
17.7
12291124
CHINESE ESTATES
21.3
0.4716981
89.40828
22.25
9.543
92500
CHOW TAI FOOK JE
12.5
2.124183
0.4823185
13.4
7.44
5722775
EMPEROR ENTERTAI
4.05
-0.4914005
114.2857
4.66
1.48
990000
3.3
1.226994
172.2714
3.41
1.103
1268000
GALAXY ENTERTAIN
57.45
-1.203783
89.2916
63.75
27
5875399
HANG SENG BK
126.6
-1.478599
6.655437
132.8
110.6
1178906
26.05
1.165049
-21.65414
35.3
23.2
1477500
FUTURE BRIGHT
FTSE 100 INDEX
GB
6668.25
-0.4325675
DAX INDEX
GE
9019.32
-0.6795485
18.48211
9193.980469
6950.53
HOPEWELL HLDGS
NIKKEI 225
JN
14086.8
-0.995471
35.51281
15942.6
8619.45
HSBC HLDGS PLC
86
-0.8645533
5.781054
90.7
73.55
6338853
HUTCHISON TELE H
3.2
-4.477612
-10.11236
4.66
3.12
7938000
LUK FOOK HLDGS I
27
-0.9174312
10.65574
30.05
16.88
1549000
MELCO INTL DEVEL
24.5
0.204499
171.9201
25.75
7.56
2674772 3714000
HANG SENG INDEX
HK
22744.39
-0.5971759
0.3860662
23944.74
19426.35938
CSI 300 INDEX
CH
2307.945
-1.393133
-8.522035
2791.303
2023.171
TAIWAN TAIEX INDEX
TA
8229.59
-0.6533305
6.884731
8476.63
7061.87
MGM CHINA HOLDIN
27
0.9345794
103.3396
30
12.236
KOSPI INDEX
SK
1984.87
-0.9565677
-0.6099023
2063.28
1770.53
MIDLAND HOLDINGS
3.25
0.931677
-12.16216
4.29
2.68
1208000
NEPTUNE GROUP
0.31
0
103.9474
0.4
0.131
156914500
NEW WORLD DEV
10.68
-0.1869159
-11.14809
15.12
9.98
8990728
SANDS CHINA LTD
54.7
-0.7259528
61.11929
60.5
29.35
6397086
S&P/ASX 200 INDEX JAKARTA COMPOSITE INDEX
AU
5400.665
-0.3941508
16.16956
5457.3
4334.3
ID
4475.451
-0.2375778
3.677917
5251.296
3837.735
FTSE Bursa Malaysia KLCI
MA
1806.39
-0.0121775
6.953437
1826.22
1590.67
SHUN HO RESOURCE
1.6
1.265823
14.28572
1.92
1.19
0
NZX ALL INDEX
NZ
1042.651
0.5462947
18.2073
1048.998
853.452
SHUN TAK HOLDING
4.36
-1.133787
4.057278
4.8
3.13
1694795
PHILIPPINES ALL SHARE IX
PH
3876.9
-1.048752
4.809973
4571.4
3440.12
SJM HOLDINGS LTD
24
-5.511811
35.22911
28
16.762
17093250
SMARTONE TELECOM
9.31
-6.338028
-33.87784
15.18
9.3
7410000
WYNN MACAU LTD
29.1
-0.6825939
38.90214
32.6
19
1305200
ASIA ENTERTAINME
3.96
0
#N/A N/A
#N/A N/A
#N/A N/A
69409
71.98
1.18077
60.99307
78.03
43.16
265160 1818
Euromoney Dragon 300 Index Sin
SI
622.76
-0.41
0.27
NA
NA
STOCK EXCH OF THAI INDEX
TH
1399.32
-1.817952
0.5309098
1649.77
1260.08
HO CHI MINH STOCK INDEX
VN
498.61
-0.25007
20.51579
533.15
374.15
BALLY TECHNOLOGI
Laos Composite Index
LO
1305.31
0
7.453266
1455.82
1123.21
BOC HONG KONG HO
3.22
0
4.885996
3.6
2.99
GALAXY ENTERTAIN
7.57
0.5312085
90.6801
8.11
3.471
6022
INTL GAME TECH
17.91
2.518603
26.39379
21.2
12.37
5356999
JONES LANG LASAL
94.35
0.1486042
12.40171
101.46
72.56
311371
LAS VEGAS SANDS
70.4
0.8595989
52.513
73.49
37.8353
2578379
MELCO CROWN-ADR
34.82
1.812865
106.7696
37
13.43
2876142
MGM CHINA HOLDIN
3.4
3.030303
94.25337
3.88
1.703
950
MGM RESORTS INTE
19.2
0.5762179
64.94845
20.98
9.15
4498141
SHFL ENTERTAINME
23.11
-0.1296456
59.37931
23.25
12.35
899364
SJM HOLDINGS LTD
3.24
-2.409639
42.254
3.6
2.1494
22943
165.03
0.8063038
46.70638
173.38
103.34
725233
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
38.35
-1.918159
15694921
ALUMINUM CORP-H
2.74
-0.3636364
6615135
BANK OF CHINA-H
3.58
-0.8310249
210477529
AIA GROUP LTD
BANK OF COMMUN-H BANK EAST ASIA BELLE INTERNATIO
5.53
-0.5395683
16173315
33.95
-0.8759124
2381794
9.95
1.323829
40631115
NAME
PRICE
DAY %
VOLUME
CHINA UNICOM HON
11.76
-1.836394
12133000
CITIC PACIFIC
10.82
-0.5514706
3725693
SANDS CHINA LTD
CLP HLDGS LTD
61.55
-0.3238866
2373187
CNOOC LTD
15.26
-1.548387
39845939
COSCO PAC LTD
10.94
-2.146691
3189547
ESPRIT HLDGS
15.82
-0.6281407
14819158
NAME
PRICE
DAY %
VOLUME
62.55
-0.7930214
2251617
54.7
-0.7259528
6397086
SINO LAND CO
10.64
-1.663586
2846632
SUN HUNG KAI PRO
2273224
POWER ASSETS HOL
101.3
-0.1970443
SWIRE PACIFIC-A
90.6
-0.9836066
878000
TENCENT HOLDINGS
409
-0.5350195
4189288
24.9
-0.2004008
8214317
HANG LUNG PROPER
25.65
-0.7736944
1626218
TINGYI HLDG CO
21.95
0.2283105
3744500
CATHAY PAC AIR
15.02
-1.572739
1545095
HANG SENG BK
126.6
-1.478599
1178906
WANT WANT CHINA
11.14
-0.5357143
5538702
CHEUNG KONG
HENDERSON LAND D
45.05
-0.5518764
1274277
WHARF HLDG
64.8
1.726845
5963714
89.5
1.646792
1802850
18.06
0
6071159
124
-0.4815409
1326504
86
-0.8645533
6338853
BOC HONG KONG HO
119.9
-0.9090909
2580508
CHINA COAL ENE-H
4.71
0
18142797
CHINA CONST BA-H
5.97
-1.15894
205262535
CHINA LIFE INS-H
20.95
0.4796163
26354032
CHINA MERCHANT
27.15
-3.380783
3973447
CHINA MOBILE
HENGAN INTL HONG KG CHINA GS HONG KONG EXCHNG HSBC HLDGS PLC
80.45
-1.227747
13582869
HUTCHISON WHAMPO
94
-0.7391763
2930839
CHINA OVERSEAS
23.1
-0.6451613
12291124
IND & COMM BK-H
5.35
-0.1865672
150851064
CHINA PETROLEU-H
6.43
0.7836991
72136366
LI & FUNG LTD
10.5
-0.5681818
25319811
CHINA RES ENTERP
26.05
-0.7619048
9138081
MTR CORP
29.7
-0.5025126
878768
20.9
0.7228916
7189000
NEW WORLD DEV
10.68
-0.1869159
8990728
CHINA RES POWER
CHINA RES LAND
18.96
-2.469136
4240720
PETROCHINA CO-H
8.71
-0.3432494
56645373
CHINA SHENHUA-H
24.05
0
16727087
PING AN INSURA-H
62.25
-0.3202562
9621678
MOVERS
8
39
23090
INDEX 22901.41 HIGH
23088.88
LOW
22706.92
3
52W (H) 23944.74 (L) 19426.359375
22700
8-November
12-November
19 19
November 13, 2013 April 19, 2013
Opinion Business
wires
Leading reports from Asia’s best business newspapers
The uncertain future of central bank supremacy
Business Inquirer Regional economies of Western, Central and Eastern Visayas in the Philippines are expected to contract by as much as 8 percent next year following the devastation caused by super typhoon Haiyan. The process of recovery is expected to take a while and the calamity can cut growth of the overall Philippine economy in 2013 by 0.5 to 1 percentage point. This was the preliminary estimate of the government’s economic team, which stressed that the Aquino administration’s focus at the moment was on search, rescue, relief and restoration of basic services.
Taipei Times Sales of luxury homes have picked up rapidly in Taipei in the past 12 months, thanks to selfoccupancy, relocation and asset allocation needs, property brokers said. Transactions of expensive houses – priced NT$80 million (US$2.71 million) or more – staged a strong comeback in the first half of the year with secondquarter sales surging 124 percent from the first quarter, Evertrust Rehouse Co, the nation’s largest real estate agency by number of outlets, said, based on figures published by the Ministry of Interior.
Straits Times Taxi companies’ fleet growth in Singapore will now be subject to them having met certain conditions, following changes to the Road Traffic (Amendment) Bill. The growth will still be capped at the current 2 percent that has been in place since last year when the framework was introduced. But from January, the maximum number of new licences issued by the Land Transport Authority will be linked to the companies fulfilling minimum standards relating to taxi availability during peak hours, and on the roads in general.
The Age Australia’s business confidence has fallen back towards its pre-election levels as optimism fades and conditions remain weak, a monthly private survey has found. Firms were less positive in October after a surge of sentiment in September, as soft forward indicators pointed to a tepid outlook for domestic demand, the National Australia Bank’s business survey on confidence and conditions found. “Forward indicators do not paint a favourable picture for the outlook, with capacity utilisation falling to a four-year low and the level of forward orders, capex and stocks also declining,” NAB chief economist Alan Oster said in a statement.
Mohamed A. El-Erian
CEO and co-CIO of PIMCO, and the author of When Markets Collide
H
istory is full of people and institutions that rose to positions of supremacy only to come crashing down. In most cases, hubris – a sense of invincibility fed by uncontested power – was their undoing. In other cases, however, both the rise and the fall stemmed more from the unwarranted expectations of those around them. Over the last few years, the central banks of the largest advanced economies have assumed a quasi-dominant policymaking position. In 2008, they were called upon to fix financialmarket dysfunction before it tipped the world into Great Depression II. In the five years since then, they have taken on greater responsibility for delivering a growing list of economic and financial outcomes. The more responsibilities central banks have acquired, the greater the expectations for what they can achieve, especially with regard to the much-sought-after trifecta of greater financial stability, faster economic growth, and more buoyant job creation. And governments that once resented central banks’ power are now happy to have them compensate for their own economic-governance shortfalls – so much so that some legislatures seem to feel empowered to lapse repeatedly into irresponsible behaviour. Advanced-country central banks never aspired to their current position; they got there because, at every stage, the alternatives seemed to imply a worse outcome for society. Indeed, central banks’ assumption of additional responsibilities has been motivated less by a desire for greater power than by a sense of moral obligation, and most central bankers are only reluctantly embracing their new role and visibility. With other policymaking entities sidelined by an unusual degree of domestic and regional political polarisation, advanced-country central banks felt obliged to act on their greater operational autonomy and relative political independence. At every stage, their hope was to buy time for other policymakers to get their act together, only to find themselves forced to look for ways to buy even more time.
Untested tools Central banks were among the first to warn that their ability to compensate for others’ inaction is neither endless nor risk-free. They acknowledged early on
Bank of Japan
that they were using imperfect and untested tools. And they have repeatedly cautioned that the longer they remain in their current position, the greater the risk that their good work will be associated with mounting collateral damage and unintended consequences. The trouble is that few outsiders seem to be listening, much less preparing to confront the eventual limits of central-bank effectiveness. As a result, they risk aggravating the potential challenges.
Central banks inevitably imperfect measures need to be supplemented by more timely and comprehensive responses by other policymaking entities
of inaction and denial. In the United States, for the fifth year in a row, Congress has yet to pass a full-fledged budget, let alone dealt with the economy’s growth and employment headwinds. In the eurozone, fiscal integration and pro-growth regional initiatives have essentially stalled, as have banking initiatives that are outside the direct purview of the European Central Bank. Even Japan is a question mark, though it was a change of government that pushed the central bank to exceed (in relative terms) the U.S. Federal Reserve’s own unconventional balance-sheet operations. Markets, too, have fallen into a state of relative complacency. Comforted by the notion of a “central-bank put,” many investors have been willing to “look through” countries’ unbalanced economic policies, as well as the severe political polarisation that now prevails in some of them. The result is financial risktaking that exceeds what would be warranted strictly by underlying fundamentals – a phenomenon that has been turbocharged by the short-term nature of incentive structures and the lucrative market opportunities afforded until now by central banks’ assurance of generous liquidity conditions.
Minimising risks This is particularly true of those policymaking entities that possess much better tools for addressing advanced economies’ growth and employment problems. Rather than use the opportunity provided by central banks’ unconventional monetary policies to respond effectively, too many of them have slipped into an essentially dormant mode
By contrast, non-financial companies seem to take a more nuanced approach to central banks’ role. Central banks’ mystique, enigmatic policy instruments, and virtually unconstrained access to the printing press undoubtedly captivate some. Others, particularly large corporates, appear more sceptical. Doubting the
multi-year sustainability of current economic policy, they are holding back on long-term investments and, instead, opting for higher self-insurance. Of course, all problems would quickly disappear if central banks were to succeed in delivering a durable economic recovery: sustained rapid growth, strong job creation, stable financial conditions, and more inclusive prosperity. But central banks cannot do it alone. Their inevitably imperfect measures need to be supplemented by more timely and comprehensive responses by other policymaking entities – and that, in turn, requires much more constructive national, regional, and global political paradigms. Having been pushed into an abnormal position of policy supremacy, central banks – and those who have become dependent on their ultraactivist policymaking – would be well advised to consider what may lie ahead and what to do now to minimise related risks. Based on current trends, central banks’ reputation increasingly will be in the hands of outsiders – feuding politicians, other (lessresponsive) policymaking entities, and markets that have over-estimated the monetary authorities’ power. Pushed into an unenviable position, advanced-country central banks are risking more than their standing in society. They are also putting on the line their political independence and the hard-won credibility needed to influence private-sector behaviour. It is in no one’s interest to see these critical institutions come crashing down. © Project Syndicate
20 20
November 13, 2013 April 19, 2013
Closing EU clinches deal on 2014 budget
Vodafone boosts spending plans
Negotiators in Brussels have clinched a deal on the 2014 EU budget after a night of hard talks, cutting spending by about 6 percent compared to 2013. Spending will total 135.5 billion euros (US$181.3 billion), or 500 million euros less than the Commission sought. However, the budget is 500 million euros bigger than what austerityconscious government leaders were demanding. There will be greater funding for economic growth, jobs, innovation and humanitarian aid. It should pave the way for the European Parliament to adopt the EU’s long-term trillion-euro budget for 2014-2020.
Vodafone Group Plc will plough billions into improving its network speed and coverage. Investments in “Project Spring”, the networkimprovement project announced in September, will expand to 7 billion pounds (US$11.2 billion) by March 2016, a year ahead of schedule and 1 billion pounds extra, Vodafone said yesterday. Service revenue, excluding currency swings and acquisitions, fell 4.9 percent in the quarter ended September 30. Vodafone reported a half-year pre-tax profit of 1.5 billion pounds as it said trading in Europe remained “very tough”. It marks a big fall from its 3.9 billion pounds half-year pre-tax profit in 2012.
Indonesia surprises with rate rise Indonesia’s central bank unexpectedly raised its benchmark interest rate, stepping up its campaign to contain inflation and shore up the rupiah. Governor Agus Martowardojo and his board increased the reference rate by 25 basis points to 7.5 percent, the central bank said in Jakarta yesterday. This is the fifth unexpected rate increase since Mr Martowardojo took office in May, as he seeks to bolster the policy credibility of a nation that was among the worst hit in recent months as capital flowed out of emerging markets and the current-account deficit widened to a record. The rupiah, which has tumbled 16 percent since Federal Reserve Chairman Ben S. Bernanke raised the prospect in May of tapering bond purchases, pared declines after yesterday’s announcement. “The move is pre-emptive and they’re willing to live with lower growth, lower credit growth, lower import growth so long as the current account is at a more manageable magnitude,” said Chua Hak Bin, an economist at Bank of America Corp in Singapore. “Nine months ago, there were some concerns that BI was behind the curve. They’re also acting to restore their credibility, to preempt further concerns.” With yesterday’s move, the central bank has raised its key rate by 1.75 percentage points since early June to shore up the rupiah and stem price gains. Inflation remained above 8 percent for a fourth month in October. The current-account shortfall was 4.4 percent of GDP in the three months through June. Bank Indonesia will release the third-quarter figures today.
China leadership pledges ‘decisive’ reform for markets Few details on specific reforms at end of plenum Jason Subler and Kevin Yao
Chinese leaders say state sector remains pillar of economy
C
Koizumi picks up anti-nuclear torch Prime Minister Shinzo Abe faces another prominent opponent to his plans to return to nuclear power after the Fukushima disaster, as a former political mentor called for Japan to immediately abandon its reactors. Former Liberal Democratic Party Premier Junichiro Koizumi (pictured) spoke out against atomic power yesterday in his highest profile speech since retiring from politics in 2009. He joins three other former leaders who have turned against the industry that once provided more than a quarter of Japan’s electricity, with all of Japan’s 50 nuclear reactors now off-line. “I think we should go to zero now,” Mr Koizumi told reporters. “If we re-start the reactors, all that will result is more nuclear waste.” Mr Abe has said he plans to restart reactors that are declared safe by the nuclear regulator, while leading a push to sell Japanese nuclear technology overseas. Surveys published in the Asahi and Mainichi newspapers yesterday found 60 percent and 54 percent of respondents respectively agreed with Koizumi that Japan should aim to go nuclear-free. “It’s the government’s responsibility to ensure a stable and inexpensive supply of energy,” Chief Cabinet Secretary Yoshihide Suga told reporters yesterday. “There is no change to our policy of keeping nuclear power to a minimum.”
hina’s ruling party pledged to let markets play a “decisive” role in allocating resources as it unveiled a reform agenda for the next decade yesterday, looking to overhaul the world’s second-largest economy to drive future growth. Beijing aims to achieve “decisive results” in its reform push by 2020, with economic changes a central focus of overall reforms, the ruling Communist Party said in a communique released by state media at the end of a four-day closed-door meeting of the party’s 205-member Central Committee. “The core issue is to straighten out the relationship between government and the market, allowing the market to play a decisive role in allocating resources and improving the government’s role,” the party said in its statement. It added that it would set up a central leading team for “comprehensively deepening reform,” responsible for “designing reform on an overall basis, arranging and coordinating reform, pushing forward reform as a whole, and supervising the implementation of reform plans”. In previous policy statements, the Communist Party had often described markets as playing a “basic” role in allocating resources, Xinhua news agency said, meaning the new language amounts to an upgrading of its role in the party philosophy. “They are looking to break away from government control, allowing
the markets to take the lead. In the past, prices and investment decisions were predominantly made by the government,” said Dong Tao, Asia ex-Japan chief regional economist with Credit Suisse in Hong Kong. “This is a revolutionary philosophy, by Chinese standards.”
Cautious on SOEs Still, the party did not issue any bold reform plans for the country’s state-owned enterprises (SOEs), saying that while both state firms and the private sector were important and it would encourage private enterprise, the dominance of the “public sector” in the economy would be maintained. While the statement was short on details, it is expected to kick off specific measures by state agencies over the coming years to reduce the role of the state in the economy. Historically, such third plenary sessions of a newly installed Central Committee have acted as a springboard for key economic reforms, and this one will also serve as a first test of the new leadership’s commitment to reform. Among the issues singled out for reform, the party said it would work to deepen fiscal and tax reform, establish a unified land market in cities and the countryside, set up a sustainable social security system, and give farmers more property rights – all seen as necessary for putting the world’s second-largest economy on
a more sustainable footing. President Xi Jinping and Premier Li Keqiang must unleash new growth drivers as the economy, after three decades of breakneck expansion, begins to sputter, burdened by industrial overcapacity, piles of debt and eroding competitiveness. Out of a long list of areas that the meeting was expected to tackle, most analysts have singled out a push towards a greater role of markets in the financial sector and reforms to public finances as those most likely to get immediate attention. As part of that, Beijing is expected to push forward with capital account convertibility, and the 2020 target date for making significant strides on reform could set off expectations that the government will be looking to achieve breakthroughs on freeing up the closely managed yuan by then. Few China watchers had expected the new leaders to take on powerful state monopolies, judging that the political costs of doing so were just too high. Many economists argue that other reforms will have only limited success if the big state-owned firms’ stranglehold on key markets and financing is not tackled. But instead, the focus will be on indirect steps to limit the power of state behemoths and open up space for nimbler, private and foreign rivals – opening up key markets to private and foreign investment and deregulation tested in free trade zones. Reuters