Macau business daily, Dec 16 by Business Daily

MOP 6.00 Vitor Quintã Year II

Number 436 Monday December 16, 2013

Editor-in-chief Tiago Azevedo

Deputy editor-in-chief

Chui Sai On takes border crossing hopes to Beijing

April 19, 2013

Tour visitors slump as new rules ban hard sell

Gaming windfall drives govt surplus to MOP100 bln Page 3

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Hang Seng Index

www.macaubusinessdaily.com

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Property curbs drive estate agency to loss

December 13

Reserved housing policy leaves youths behind

LVS gives up on Spain mega resort

The proposed policy of reserving home sales in some areas for Macau permanent residents fails to satisfy the needs of youths because singles will likely be kept out, critics say. Chief Executive Fernando Chui Sai On said the proposals are only “preliminary studies” and pledged to listen closely to what the public has to say during a consultation to be held in the coming quarter.

Las Vegas Sands Corp will not to pursue its plan for a huge casino resort near Madrid. Spain’s ban on smoking in public places was not the key factor, Business Daily understands. The reason was a lack of clarity over a legal framework that would give Sands investment guarantees and a compensation in case of any losses related to future changes in Spanish laws.

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HSI - Movers

Interview

Macau needs new laws to protect environment Macau needs to focus on its legal framework to tackle its environmental problems, says Wang Zhishi, a member of the government’s Environmental Advisory Council. Until that happens, the Environmental Protection Bureau’s hands will remain tied, he told Business Daily in an interview. With air pollution at worrying levels, the expert says public transportation such as the Light Rapid Transit is the long-term solution. Pages 6 & 7

Name

%Day

GALAXY ENTERTAIN

2.99

CHINA LIFE INS-H

2.25

BELLE INTERNATIO

2.04

CITIC PACIFIC

1.36

BANK OF COMMUN-H

1.10

CHEUNG KONG

-0.99

POWER ASSETS HOL

-1.67

CHINA RES ENTERP

-1.91

TINGYI HLDG CO

-1.96

HENGAN INTL

-4.85

Source: Bloomberg

I SSN 2226-8294

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December 16, 2013

Macau

Chui Sai On takes border crossing hopes to Beijing The impediments to longer border opening hours are on the mainland side Stephanie Lai

sw.lai@macaubusinessdaily.com

hief Executive Fernando Chui Sai On hopes to enlist the central government’s help in extending the opening hours of the border when he goes to Beijing today, government spokesman Alexis Tam Chong Weng has said. But Mr Tam told reporters on Friday that the Macau government could not guarantee any temporary extension of hours during the Lunar New Year holidays. He said that on his three-day visit to Beijing Mr Chui would discuss with officials the extension of the border

The obstacles do not lie on the Macau side Alexis Tam, Government spokesman

opening hours, and immigration and customs controls on Hengqin Island. “Many problems have still to be solved, especially the assignment of customs and security officers to man the border crossings,” Mr Tam said. “The obstacles do not lie on the Macau side,” he said. “Chinese New Year will come soon, and we hope that the border opening hours can be extended as soon as possible.” During the Ching Ming festival holidays, from April 4 to 6, the Gongbei border crossing was open for two hours extra each day. Asked if this temporary extension would be repeated, Mr Tam was non-committal. He said the government hoped for a permanent extension. “We will try our best to do whatever can achieve a smooth flow of people across the border and relieve the customs post from congestion,” he said. Separately, Hengqin New Area Administrative Committee chief Niu Jing told reporters on Friday that the schedule for the inspection by Beijing officials of the improvements to the Hengqin-Zhuhai customs post would

be announced this month. “The policy of allowing Macauregistered vehicles to travel freely in and out of Hengqin will definitely come after the central government

Anti-free tour law means package tourism slump But the tour guide association chief expects a swift recovery Stephanie Lai

sw.lai@macaubusinessdaily.com

he number of package tourists visiting Macau fell in October from a year earlier as a law curbing free package tours came into force in the mainland. But the Macau Tourist Guide Association says the new law has righted some wrongs and that package tourism is already recovering from the blow the legislation dealt it. Almost 526,600 mainlanders visited Macau on package tours in October, 10.6 percent fewer than a year earlier, the Statistics and Census Service announced on Friday. The mainland is Macau’s main source of visitors, and in October one in three visitors from the mainland was a package tourist. Mainlanders made up nearly 73.5 percent of the package tourists that visited Macau in October. Over 716,000 package tourists visited, 11.5 percent fewer than a year earlier. The president of the Macau Tourist Guide Association, Angelina Wu Wai Fong, told Business Daily that the fall in the number of package tourists from the mainland was in line with the tourism industry’s expectations.

Year-end incentive trips are expected to stimulate package tourism in November and December

“October is the month when you would expect a drop in mainland package tourists, not only to Hong Kong and Macau but also to places in the mainland and to places in Southeast Asia such as Malaysia,” Ms Wu said. Since October 1 the law in the mainland has banned tour operators

from compelling package tourists to shop in shops designated by the operators. The purpose of the law is to curb free or excessively cheap package tours run by operators that recoup their costs by making tourists shop in shops that pay commission. “The new law really has corrected

inspection,” Mr Niu said. He said the Hengqin authorities had yet to work out the details of the measure or discuss it with the Macau government.

some practices,” Ms Wu said. “Some travel agencies have sought to get their package tourists from elsewhere, to do more business arranging independent tours or to change the itineraries of their tours to include more festivals or special events,” she said. “Because of the new law, the price of package tours for mainlanders has definitely climbed.” But Ms Wu said the number of package visitors “will rebound in November or December, as the market has gradually adapted to the new law”. She said year-end incentive trips for employees of mainland companies might have stimulated package tourism last month and continued to do so this month. The numbers of package tourists from most of Macau’s other main Asian sources of such visitors also fell in October. The number from Japan fell to 10,406, or 43 percent fewer than a year earlier, extending a falling trend this year. The number from Taiwan fell to 60,414 and the number from South Korea fell to 34,646. Despite the slump in October, the number of package tourists from all sources rose to 8.1 million in the first 10 months of this year, 10.2 percent more than in the equivalent period of last year. Altogether, Macau had almost 2.4 million visitors in October, 2 percent more than a year earlier. The average occupancy rate of hotels and guesthouses was 82.9 percent, 1.5 percentage points more than a year earlier. Five-star hotels had the highest occupancy rate, of 84.4 percent.

December 16, 2013 April 19, 2013

Macau

Reserved housing policy ‘fails’ youths The government should provide blueprint for future housing supply, observers say Tony Lai

tony.lai@macaubusinessdaily.com

he proposed policy of reserving home sales in some areas for Macau permanent residents fails to satisfy the needs of youths because singles will likely be kept out, critics say. The administration must provide a clear estimate of the future homes for Macau residents, it was said yesterday in a forum to discuss the policy, better known as ‘Macau land for Macau people’. Chief Executive Fernando Chui Sai On said the government would listen closely to what the public has to say during a consultation to be held in the first quarter of 2014. Last week the University of Macau announced three proposals on the reserved housing scheme, two of which require buyers to be members of households comprising at least two people. These proposals “ignore” the needs of the youths, said Lok Wai Tak, president of the Macau Real Estate Development Association, in the Macau Forum held by public broadcaster TDM yesterday. “It is not fair that [some permanent residents] cannot get a share in the policy simply because they are yet to be married,” Mr Lok added. In the same occasion, Chan Wai Pan, vice-president of Macau New Chinese Youth Association, expressed “disappointment” that the proposed scheme failed to meet youths’ hopes. The same thing has been happening with the public housing policy, he

said. The subsidised housing policy gives preference to households first, pushing singles to the bottom of the waiting list. Mr Chui tried to downplay the issue, stressing that the University of Macau’s report and another to be released by the Macau Polytechnic Institute later this month are only “preliminary studies”. “The most important thing is that the residents can voice out their opinions during the public consultation,” said the chief executive on the sidelines of a public event on Saturday. Secretary for Transport and Public Works Lau Si Io said they would continue to improve the ‘Macau land for Macau people’ scheme to particularly help “those who do not benefit from the current public housing policies”.

Price fix The remarks were not enough to appease Mr Chan of the Macau New Chinese Youth Association: “It is simply to discuss this broad policy… but the problem right now is there is no supply.” “We feel the administration has become less daring in talking about how many homes it can provide” to residents, he said yesterday. Leong Kuai Peng, member of the government’s advisory Public Housing Committee, agreed. The government “should not only say

Chui Sai On promised to listen closely to a public consultation on the reserved housing policy

‘We will put out as many homes as possible’,” she said in the forum. “There should be a clear supply number – a clear figure for each year,” she demanded. The University of Macau suggest the selling price could be somewhere between the prices of public and private housing, or 70 percent to 80 percent of private housing prices.

Ms Leong thinks the price should be based on the residents’ income, whereas Mr Chan thinks the price could be pegged to the construction costs. The university’s study shows most residents would like the reserved homes to cost between 1 million patacas and 2 million patacas (US$250,000).

Govt surplus inches close to MOP100 bln Surplus swollen by higher gaming tax intakes, spending remains below budget Tony Lai

tony.lai@macaubusinessdaily.com

he government surplus is on the verge of topping the 100-billion-pataca (US$12.5billion) mark this year thanks to robust growth driven by gaming revenue, official data show. The Financial Service Bureau said on Friday the surplus reached 96.96 billion patacas in the first 11 months of 2013, rising by 27.5 percent from a year earlier. The better-than-forecasted surplus was fuelled by direct tax on gaming revenues, which accounted for 81.1 percent, or 116 billion patacas, of all revenue until last month. Gaming revenue in the first 11 months of this year grew 18.6 percent year-on-year to 327.3 billion patacas. The government gets 35 percent of takings from gaming directly while it collects another four percen indirectly. The administration is also taking in far more from sales of capital assets – including returns on financial investments and sales of public property – which rose to 4.57 billion patacas in the first 11

Public investment remain low as big projects such as the LRT face delays (Photo: Manuel Cardoso)

months this year, against just 78.7 million patacas a year earlier. On the overall the authorities pocketed 143.1 billion patacas in the January-November period, up

by a fifth year-on-year and a fourth more than the government’s original estimate of 115.1 billion patacas. The government has so far only spent 46.1 billion patacas, or 61.8

percent of the money it budgeted for this year. The execution rate is likely to rise this month, when the government traditionally writes down spending on public infrastructure. The administration has spent just 14.9 percent of the money set aside for its public investment plan in the January-November period, or 2.67 billion patacas. The administration has said it would fork out 17.91 billion patacas this year on projects such as the Light Rapid Transit elevated railway. The Taipa section of the railway is at least half-year behind schedule, the government admitted, while works at the Macau section are yet to begin. The Legislative Assembly heard from several government bodies earlier this month that the low budget execution rate was also caused by difficulties in hiring staff. The government’s current spending – including civil servants’ wages – reached 42.8 billion patacas by the end of November, just 77.2 percent of the budget for the entire year.

December 16, 2013

Macau Govt must make up its mind: Cable TV The administration should quickly come up with concrete proposals for the television market after the Macau Cable TV Co Ltd’s exclusive concession ends in April, the company urged. “The entire market does not know what the government wants now” and that makes it difficult to make long-term investments, said Cable TV chief executive Angela Lam In Nie (pictured). The firm will “actively” discuss with the government the new terms of its future service contract, she added. Ms Lam said it is also “unclear” how the government will distinguish between paid and free-to-air services.

Real estate agency Midland warns of loss Expects to be in the red by circa HK$88 mln in second half Michael Grimes

michael.grimes@macaubusinessdaily.com

idland Holdings Ltd, parent company of local real estate firm Midland Realty (Macau) Ltd, warns it expects to record a consolidated net loss for the second half of 2013. The firm made a consolidated net profit of approximately HK$297.7 million (US$38.4 million) for the year ended December 31, 2012. It added in a filing to the Hong Kong Stock Exchange that the 2013 second half loss – as yet unaudited – was likely to be “approximately similar” to the loss declared in the first half of this year. Midland Holdings said in August that in the first half of 2013 its business had slipped into the red by HK$88.7 million. It warned this month however that things could get worse for the second half numbers. “…uncertainties in the market conditions and other contingencies may affect the current estimation of the loss of the group of 2013,” stated the company. In August, Midland blamed tough trading conditions, including a

decade-low number of property transactions in Hong Kong, mostly because of property curbs introduced by Chief Executive Leung Chun Ying’s government. Hong Kong has increased minimum down payments for homebuyers six times in fewer than three years. In February Hong Kong doubled stampduty taxes for all properties over HK$2 million. According to Midland Holdings’ first half results, revenue from Hong Kong and Macau was HK$1.38 billion in the first six months of the year, a 19.2 percent drop from a year earlier. About a third of Hong Kong’s property agents faced losing their jobs if the government persists with its real estate curbs, Angela Wong Ching Yi, deputy chairman of Midland Holdings, told Bloomberg earlier this year.

Macau rules Macau has also seen a dramatic reduction in transactions after the government applied cooling measures and other rules to control the property market.

Tougher times – govt policies cooling property sector

states a developer must complete the foundations of a housing development and register the flats before selling them. H2 2013 loss warning Another pressure for Midland Holdings on real estate businesses has been Made HK$297.7 mln profit the inflation of in 2012 commercial rents in Hong Kong and HK and Macau revenue Macau. Property HK$1.38 billion in H1 consultancy, Savills (Macau) Ltd, said Midland Macau had 100 staff that in October shop rents in the central and 7 shops, end Q3 business district on the Macau peninsula Macau’s special stamp were between 500 duty imposes a levy on patacas (US$62.60) and sellers of 20 percent of 600 patacas a square foot. the transaction value of a Macau’s shop rents were property if it is sold within likely to rise by 20 percent a year of being purchased, or to 30 percent in the coming 10 percent if it is sold between 12 months, added Savills. one and two years after being One possible bright spot purchased. in Macau during 2013 for New rules in Macau on the bigger agencies has been home sales off-plan, that took the government’s decision to effect from June 1, also hit regulate the real estate agency the local real estate business. sector, thereby squeezing Centaline (Macau) Property out some of the smaller, less Agency Ltd estimated there professional practitioners. were only 150 home deals With effect from July 1, all in June, down by about 90 local sales agents and agencies percent from May. The law must take an exam to get a

KEY POINTS

licence to operate. Agents and agencies established prior to November 12, 2012 are being given a three-year grace period whereby they can continue to operate prior to taking the new exam – provided they apply for a temporary licence. Midland’s Macau operation had seven offices and around 100 staff as of August, but has been looking to recruit more, as some new supply comes onto the local housing market. A total of 74 residential projects were under construction in the third quarter this year, which can provide about 8,830 flats in the pipeline with a majority of them to be completed within the coming one to three years, the latest statistics from Land, Public Works and Transport Bureau show. “We are actually facing a lack of agents now after the enforcement of the real estate agents bill in July, since agents must now be licensed,” Ronald Cheung Yat Fai, chief executive of Midland Realty (Macau) Ltd, told Business Daily in August.

December 16, 2013

December 16, 2013 April 19, 2013

Macau

Environment adviser

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HOSPITALITY

As certain as death The growth of the casino industry is reflected in gaming revenue, the diminution of lotteries and betting on sports, and the tax take from gaming. Gaming revenue has risen continuously. It rose by almost 62 percent in the past two calendar years. In the first 10 months of this year it was 297 billion patacas (US$37.2 billion), 18 percent more than in the equivalent period of last year, amounting to nearly 98 percent of the total last year and 11 percent more than the total in 2011. Lotteries and betting on sports declined in the past two calendar years, and this year’s figures suggest further decline, albeit at a slightly slower rate. The tax take from casino gaming has continued to fill the government’s coffers in steadily increasing amounts.

acau needs specific regulations if it is to solve its environmental problems, says Wang Zhishi, a University of Macau professor who is a member of the government’s Advisory Council on the Environment. Mr Wang told Business Daily in an interview that the city’s efforts to protect its environment had emphasised the construction of infrastructure, but should now also focus on the law. He said the Environmental Protection Bureau had been set up only in 2009, and that it was too early to tell whether the government’s policy on the environment had been effective. Mr Wang said air pollution was a grave problem, and that public transport such as the Light Rapid Transit railway was more likely to reduce the pollution than environmentally friendly motor vehicles. Luciana Leitão

leitao.luciana@macaubusiness.com

Photo by Manuel Cardoso

The proportion of casino gaming revenue taken in tax varies only slightly. The average proportion from 2010 to October this year was about 37.3 percent, and the standard deviation was under 4 percentage points. Since the beginning of last year the proportion has varied less. Between 2010 and last year the tax take increased by twothirds. The momentum of that growth is likely to be maintained this year. In the first nine months it was 16 percent higher than a year earlier. The growth rate for the whole year is likely to be similar. J.I.D.

What are Macau’s main environmental problems? Macau has limited land and a big population for its area. This is the situation in Macau. Because of this, there is a series of problems the government has to face. Every day solid waste is being produced. How do you dispose of it? How do you treat it? There are several options. One is a landfill, so we can bury the garbage. That is the cheaper option. Another option is incineration. The Portuguese administration chose incineration because we had no land for landfills. Another issue is that we had to spend more money for sewage treatment plants because they had to be built in residential areas. Even in Lisbon in Portugal, sewage treatment plants are built far from the city centre, but in Macau we cannot do that as we have no land. It is always a challenge for the government. Another point is that Macau is an international tourist city. An essential requirement for

the tourism industry is a good environment, otherwise tourists will not come. That means the Macau’s standards for environmental protection must be high. The latest government environmental report, for 2011, says Macau is facing tremendous pressure from tourists. How can we live with such pressure? That is right. That is one the important problems mentioned in the 2011 environmental report. The number of tourists is quite high and there is tourism-related pollution. In the future it may get worse, so that is one problem we have to think about how to solve. We must make some sort of environmental impact assessment of tourism industry growth and the environmental stress in this small territory with limited assimilation capacity. Have the government’s environmental protection measures been ineffective? No, not ineffective. We have to wait maybe a little bit longer to see whether the government’s management of the environment or its environmental protection policy is enough, is effective or not. Maybe we can make an assessment next year. The Environmental Protection Bureau has not been established long. It is only four years old. We have to wait a little bit longer to see. The Environmental Protection Bureau is going in the right direction for solving the problems. Previously, 20 years ago, environmental protection in Macau emphasised only the solid waste problem – build more incinerators, more sewage treatment plants – and constantly updating the air quality monitoring system. At the moment the Environmental Protection Bureau is at a crossroads. Either government policy will continue to focus on its usual method of controlling pollution with environmental infrastructure – building more facilities, and maybe 10 years from now they will consider building another set of incinerators – or maybe we should change: more facilities and management on the legal side.

At the moment the Environmental Protection Bureau is at a crossroads

What is the right option? The government is doing it, not only when it comes to facilities but also to management, improving the environmental management side. For example, the work on legislation on impact assessment is not easy. We must do the groundwork for the legislation. We should do clear research on Macau’s environmental background. We should make clear what kind of potential sources of pollution threaten the quality of our soil or air. We should be clear about the environmental background and then we should establish our own environmental protection criteria for air, soil and water. The Environmental Protection Bureau is doing that. They have just invited an environmental research team from mainland China to come to Macau to do that. The government is proposing that projects for developments yielding over 50,000 square metres should include environmental impact assessment studies. Is this threshold too high? I do not care about specific projects. I just think about the general situation in Macau. The Environment Protection Bureau has been going in the right direction on policy issues. As for specific issues, there are many

December 16, 2013 April 19, 2013

Macau

calls for clearer rules We urgently need to update Macau’s law to lay down specific environmental policy measures. Without such legislation the bureau will always have difficulty doing its job. It is not just about goading them to work. We have only a generic law dating from 1995. We lack specific regulations like the United States Clean Water Act – regulations that clearly define what kind of pollution is permitted. The system is not properly constituted. It is just a series of environmental protection standards and pollution control criteria laid down by legislation. There is no law there. That is why the bureau has no mandate and it can do nothing. We need specific policy measures passed by the Legislative Assembly.

We urgently need to update Macau’s law to lay down specific environmental policy measures

things they have not done right. For example, how do you select the right monitoring institution? How do you select the environmental protection report group? They need to have some sort of certification. They should show us they are able to do field monitoring of pollution control according to some sort of international standard. The Policy Address for 2014 has already been delivered, yet some promises on the environment in previous policy addresses remain unkept. For example, there are few environmentally friendly cars around, and there has only been a trial of electric buses. Shouldn’t we have them by now? It is not urgent to have environmentally friendly cars. It is more important to have a public transport system like the one under construction: some sort of urban railway system. That may be more useful, more important for protecting air quality. That may dramatically reduce the number of vehicles of whatever type.

An essential requirement for the tourism industry is a good environment, otherwise tourists will not come

Do we lack sufficient legislation on environmental protection? That is right. The chief executive, in his policy address for next year, emphasised legislation on environmental protection. He also talked about some specific issues, like how to use the green energy fund, and he touched on most of the important issues related to the environment. For example, the chief executive particularly emphasised the importance of environmental impact assessments, environmental planning and environmental quality research. The government has yet to take measures to reduce carbon monoxide emissions. For vehicle pollution, the most important factor is not carbon monoxide emissions. I do not think it is very important in Macau, as Macau is so small. We should care about our own air quality – that the most serious pollution is shown in the particles called PM2.5. Air pollution has been a serious problem in recent years, but it is also a public policy problem. How do you reduce it? It comes down to how to reduce vehicle emissions, particularly from diesel vehicles. We should have a comprehensive solution. We should not only reduce the number of diesel vehicles but also introduce green vehicles – change the fuel to natural gas or change the engine type – and develop the public transport system. Four years have passed since the Environment Protection Bureau was set up. Is the bureau a paper tiger? For the better management of the environment, we need to legislate to lay down specific policy measures or regulations to support the bureau’s work. Macau’s law lacks specific environmental regulations.

December 16, 2013 April 19, 2013

Macau

Spain cites EU law as LVS pulls out Casino firm said earlier this year it wanted ‘guarantees’ on legal framework for Madrid casino venture Michael Grimes

michael.grimes@macaubusinessdaily.com

Govt couldn’t accept all of the conditions sought by LVS, said Spanish deputy PM, Soraya Sáenz de Santamaria (C)

ack of clarity over government guarantees rather than smoking was the key factor in Las Vegas Sands Corp’s decision, announced on Friday, not to pursue its goal of a huge US$30 billion-plus (240 billion patacas) casino resort near the Spanish capital Madrid, Business Daily understands. The company had said in an announcement on September 25 that a decision to proceed with Spain depended on “guarantees that there will be an adequate legal framework, which will not change with time”. On Friday the company chairman said in a statement: “…we do not see a path in which the criteria needed to move forward with this large-scale development can be reached,” and adding “right now our focus is on encouraging Asian countries, like Japan and Korea, to dramatically enhance their tourism offering through the development of integrated resorts there.” Madrid’s city government had taken a range of measures at regional level to try to accommodate the needs of LVS. The firm has said many times it looks for investments in places where it can get a minimum annual return on invested capital of 20 percent.

Tax breaks Given the high cost of labour and of taxation in Europe compared to Macau – where thus far LVS has made the bulk of its foreign investment – the Spain project was seeking a range of tax breaks, tax incentives, and operational incentives. The company’s desire for a waiver – in the casino portion of the project – of Spain’s ban on smoking in public places, was the most–reported

condition, but not in likelihood the deciding factor. On October 22 this year, Madrid’s regional government, which has a degree of autonomy in finance, gazetted a fiscal law with provisions for Centros Integrados de Desarrollo – or integrated development centres. It covers the sort of casino resort LVS wanted to develop.

“consider” deductions in the gross gaming tax payable on the losses of credit-based players. So far so good from LVS’s perspective. But the law also contained a provision for a 10 percent tax in the Madrid region levied on online gambling gross bets. Given the oftenstated opposition of the LVS chairman Sheldon Adelson to online gambling, for the online sector to be given the same GGR tax status as the land-based casino industry, was likely to have been disappointing for the company.

EU law

…we do not see a path in which the criteria needed to move forward with this large-scale development can be reached Sheldon Adelson, LVS chairman

Under the law, the tax rate on gross casino revenue was set at 10 percent, against a previous potential maximum in the region of 45 percent. The law also offered some tax relief relative to the number of jobs created and maintained, and a 95 percent exemption from tax on capital transfers – a factor that analysts told Business Daily could have been important later in the life of the project if LVS had wished to pay investors dividends. The law also said Madrid would

Soraya Sáenz de Santamaría, Spain’s deputy prime minister, told reporters on Friday that some of LVS’s requests were irreconcilable with European Union law. She indicated LVS had been seeking investment guarantees, and a compensation deal in case of any losses related to future changes in Spanish laws. EU law places an emphasis on creating equal conditions for all investors across the various EU markets. Whether however the national government was using the EU compatibility argument as cover for more specific national political concerns – with domestic and European elections looming – is open to debate. “The government has the responsibility to attract to Spain all the foreign investment possible and especially that which creates jobs,” said Ms Saenz de Santamaria, adding, “It also has the duty to protect the general interests of all Spaniards.” Deputy Economy Minister Fernando Jimenez Latorre had said earlier the same day that the government had

been trying to respond to the LVS requests it deemed “reasonable” and had been negotiating with European authorities over their compatibility with European law. He hadn’t been notified of the decision, he said. The project – planned for Alcorcón, a largely commercial district to the southwest of the Spanish capital – had been scheduled for phases over 10 to 12 years and would have included 12 casino resorts with a total of 36,000 rooms. The pro-business People’s Party government in Spain had said the development would help the country recover from a five-year economic slump and lower the 57 percent youth unemployment rate. In October Business Daily reported that Joe Greff – one of JP Morgan’s managing directors in New York – had listed dropping Spain as one of eight possible positive catalysts for LVS’s share price. The stock gained 0.51 percent at the close of Nasdaq on Friday following the Spain announcement, to end the week at US$76.57. With Bloomberg News

KEY POINTS LVS drops US$30 bln-plus Spanish project Operator says to focus on Asian countries Firm’s requests irreconcilable with EU law – deputy PM

December 16, 2013 April 19, 2013

Greater China Regulator to remove price, turnover guidelines for IPOs

Beijing vows to tackle local govt debt

7 percent in 2004. Premier Li said in October that China needs annual expansion of 7.2 percent to keep unemployment stable, after indicating in July his “bottom line” for expansion was 7 percent. The State Information Centre, a government research institute, said China may set next year’s target at 7 percent, the Economic Information Daily reported on December 3, citing an annual report from the organisation. The state-run Chinese Academy of Social Sciences also believes the goal will be set at 7 percent, the newspaper said. While the National Audit Office has yet to release the results of a nationwide audit of local authorities, Caijing magazine reported last week that local government debt may be about 15 trillion yuan (US$2.47 trillion) to 18 trillion yuan, based on a forecast in March by the agency’s deputy director. That compares with an end-2010 total of 10.7 trillion yuan given in an audit office report in June 2011.

hina’s securities regulators issued fresh details on their plans for the resumption of initial public offerings early next year, eliminating pricing and turnover controls for IPOs while detailing how investor participation will be managed. Beijing is moving to reinvigorate its stock markets to make them more responsive to market forces in order to help lessen Chinese firms’ over dependence on bank loans for fundraising. Chinese investors frequently deride the stock markets as hives of speculation, manipulation and insider trading. The government must restore investor confidence in stocks as an asset class compared to other products like housing or wealth management products, and at the same time convince investors that corporate governance at listed Chinese firms is improving. The China Securities Regulatory Commission (CSRC) has already said it will abandon its approval-based listing system in which government officials decided which companies would get to list, and adopt a U.S.style registration system in which the market decides reception and pricing of IPOs. Some 50 companies – out of a total queue of over 800 firms waiting to list – are expected to complete registration and auditing procedures in January, according to official statements, and will theoretically be able to list soon after. In a statement posted on its website on Friday, the CSRC said it will stop involving itself in IPO pricing, inline with its commitment to let the market play a “decisive” role in pricing assets. While there was never a formally published cap on IPO pricing, in the past regulators intervened in the pricing and timing of new issues when they saw it necessary. On Friday evening the Shanghai and Shenzhen stock exchanges published regulations on how investor subscriptions in IPOs will be managed, a key question for China’s legions of retail investors who still dominate transaction volumes.

Bloomberg News

Reuters

Economy faces challenges in maintaining fiscal sustainability

Li Keqiang ordered a nationwide audit of local authorities’ debt in July

hina’s leaders pledged to tackle local government debt next year while creating a stable economic and social environment to promote reforms. The government will maintain continuity and stability in its macroeconomic policies in 2014 and stick to a prudent monetary policy and proactive fiscal policy, China Central Television reported, citing a statement from the annual Central Economic Work Conference that ended on Friday. President Xi Jinping and Premier Li Keqiang are grappling with a surge in local-government debt, risks from shadow banking and environmental degradation as they implement reforms unveiled after a Communist Party summit last month. The conference, held to map out economic policies for next year, concluded that the nation should seek “reasonable” growth in gross domestic product, without giving a target. “Judging from the wording, it is more likely that next year’s GDP target will be set again at 7.5 percent rather than 7 percent,” said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd in Hong Kong. “The main risk identified next year is the local government debt but policymakers appear to be determined to prevent it from being realised.” This year’s meeting, attended by the top party leadership and government officials, ran for four days compared with two days last year and three days for the years from 2008 through 2011. Mr Xi and Mr Li both made speeches, according to CCTV’s report. “We must take controlling and addressing local government debt risks as an important task in economic work,” according to a statement from the conference read out on CCTV’s main evening news bulletin. Provincial-level governments will be held accountable for local debt, it said. Last year’s meeting produced a statement that China will aim for a higher “quality and efficiency” of growth, instead of the “relatively fast” pace sought since 2006, a signal that leaders would tolerate slower expansion than the average pace of

more than 10 percent a year over the past decade. China will try to achieve a growth rate that will improve the quality and efficiency of development and won’t lead to any “hangovers,” according to the statement. The government will aim to stabilise expansion, restructure the economy and promote reforms, it said.

Supportive policies The three goals “hinted that growth is still the priority of the central government,” Hu Yifan, Hong Kong-based chief economist at Haitong International Securities Group Ltd, said in a research note. “More supportive policies are expected to ensure social stability as increasing unemployment in a decelerating economy has become a rising concern.”

KEY POINTS Leaders met to map out economic policies for 2014 Beijing aims to stabilise expansion, promote reforms Provincial govts to be held accountable for local debt Next year’s GDP target to be set at 7.5 pct – analyst

Ms Hu said she expects next year’s growth target to be set at 7.2 percent to 7.5 percent, with an actual expansion pace of 8 percent, led by a new wave of infrastructure investment, 4G network and environment related projects, and recovering domestic consumption. This year’s goal for GDP growth is 7.5 percent, the same as in 2012. An annual target of 8 percent was in place from 2005 to 2011 and it was

10 10

December 16, 2013 April 19, 2013

Greater China ICBC, Ping An picked for option trading China has selected Industrial & Commercial Bank of China Ltd, Ping An Insurance (Group) Co, PetroChina Co and Kweichow Moutai Co as the first stocks in mock options trading, the Shanghai Securities News reported. Investors will also be able to buy and sell options on two exchangetraded funds that track the 50 and 180 biggest yuan- denominated stocks in the Shanghai Stock Exchange, the newspaper reported, citing unidentified brokerages. Both call and put options will be allowed for trading in the trial with the minimum of each contract valued at around 100,000 yuan (US$16,469), according to the Shanghai Securities News report.

Jade Rabbit rover rolls on to moon China’s Jade Rabbit robot rover has driven off its landing module and on to the moon’s surface. The robotic vehicle rolled down a ramp lowered by the lander and on to the volcanic plain known as Sinus Iridum. Earlier on Saturday, the landing module containing the rover fired its thrusters to perform the first soft landing on the moon since 1976. Chang’e-3 is the third unmanned rover mission to touch down on the lunar surface, and the first to go there in more than 40 years. The lander will operate there for a year, while the rover is expected to work for some three months.

CITIC Bank plans US$860 mln write-off Bad loans expected to rise at other Chinese banks

hina CITIC Bank Corp Ltd, the country’s seventhlargest lender, said it aims to more than double its planned bad loan write-offs this year to about US$860 million – the latest sign of rising delinquency after slower economic growth. CITIC’s bad loan situation is among the worst of mid-sized Chinese banks. Its non-performing loan ratio stood at 0.90 percent at end-September, above the average 0.83 percent ratio for other so-called joint-stock banks, an official category for mid-size lenders. It will ask for shareholder permission to write off 5.2 billion yuan in non-performing assets, up from a previous plan of 2 billion yuan, citing the economic downturn. The bank’s balance sheet has also deteriorated markedly this year. It held 17.0 billion yuan in non-performing loans at endSeptember, up 39 percent since the start of the year, it said in its latest quarterly report. Its ratio of loan-loss provisions to total loans stood at 2.09 percent, down 0.03 percent from end-2012 and below the 2.50 percent ratio required by China’s banking regulator. CITIC said, however, the writeoffs would not affect its net profit for 2013 because they will reduce tax liability. It’s not clear to what extent CITIC’s CITIC’s balance sheet among weakest of mid-sized lenders

KEY POINTS

Everbright Bank to raise US$3b in HK China Everbright Bank Co will raise about US$3 billion after pricing Hong Kong’s biggest first-time share sale this year below the midpoint of a marketed range, said two people with knowledge of the matter. The lending unit of state-controlled China Everbright Group will sell about 5.84 billion shares at HK$3.98 apiece after exercising an option to increase the size of the sale, according to two people who asked not to be identified because the number of shares wasn’t made public. The bank may sell a further 760 million shares using an over-allotment option, the people said.

Merchants Property to buy more land China Merchants Property Development Ltd, the country’s third-biggest developer by market value, plans to buy more land next year because of the “positive” outlook for the property market. The developer, on track to meet its 40 billion yuan (US$6.6 billion) sales target this year, will be “more active” in buying land in 2014, said Liu Ning, the company’s board secretary, without elaborating. Home prices in major cities will rise further next year on a supply shortage and will be “relatively stable” in second-tier cities, she said.

CITIC seeks shareholder approval to increase write-offs Aims to write off 5.2 bln yuan, double the prior amount Says write-offs would not affect net profit for 2013

AIG in talks with AerCap on ILFC jet leasing unit U

.S. insurer American International Group is in talks to sell its aircraft leasing business to AerCap Holdings NV, a person briefed on the discussions said. AIG, which was nearly wiped out by derivative bets in the financial crash, has been seeking for some time to sell International Lease Finance Corp (ILFC) to help repay the costs

situation is representative of other Chinese banks. While CITIC’s loan portfolio may have fared worse than that of other banks this year, the rise in reported NPLs could also reflect a more active policy of recognising and writing down bad loans. Official data shows China’s systemwide non-performing loan ratio stood at 0.97 percent at end-September, barely above the 0.95 percent ratio at end-2012, but most analysts believe the true ratio is higher. Banks can disguise bad loans by extending maturities or offering new loans to

roll over old ones. Chinese banks are under pressure to raise capital in order to absorb an expected rise in bad loans and to meet tough new capital adequacy standards that the regulator began phasing in this year in line with global rules known as Basel III. CITIC said in August it would issue as much as 37 billion yuan in subordinate debt, which counts as tier-2 capital under China’s Basel III rules. The bank said the issuance will occur before the end of 2015.

of a 2008 U.S. government bailout. Netherlands-based AerCap is also in touch with private equity firms and others who may be interested in taking part of the assets of ILFC, which is the world’s second largest aircraft lessor by fleet size, the person said. “AerCap gets new aircraft and private equity for example can manage some of the older aircraft, but this is quite surprising as it is still an enormous portfolio,” said the person, an industry source who asked not to be identified. AerCap declined to comment. “As a company policy, we do not comment on market rumours,” a spokeswoman said in an email. Philip Tozer-Pennington, managing editor of Airline Economics magazine which first reported the negotiations, said the move was the latest sign of consolidation in the leasing industry, which has seen several deals involving Asian buyers. “Consolidation is already fast

paced in aircraft leasing and the market has a great deal of room for growth left in it yet as those that remain in the market are struggling to cope with the high levels of business.” In December 2012, AIG said it had reached agreement to sell a stake of up to 90 percent of Californiabased ILFC to a consortium of investors based mainly in China for US$4.7 billion, but it has struggled to complete the deal. While in talks with AerCap, AIG has not formally ended its agreement with the Chinese group, Bloomberg News reported. AIG has said it continues to regard the leasing unit as a noncore business and is pursuing other options, including an alternative sale or an initial public offering. Chief executive Robert Benmosche said in November that AIG hoped to decide on a sale or an initial public offering of ILFC in the fourth quarter.

Reuters

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December 16, 2013 April 19, 2013

Greater China

Beijing sets principles for urbanisation plans Government to encourage hundreds of millions of rural residents to settle in cities

hina has added details to its plans to migrate millions of its citizens from the countryside into cities, state media reported, to

help restructure the economy by boosting consumer demand. The government hopes 60 percent of China’s population of almost 1.4

Govt concerned that too much farmland is being converted for commercial use

China widens access to OTC exchanges New rules for companies with fewer than 200 shareholders

hina will expand and liberalise access to its over-the-counter (OTC) market to all qualified small and medium-sized enterprises (SMEs), the Chinese State Council announced over the weekend. The announcement follows reports in state media on Friday quoting unnamed sources saying the reform could happen before the end of the year, with some saying it could come as soon as December 25, but it appears the government moved even more quickly than even insiders expected. The China Securities Regulatory Commission, acting under instructions from the State Council, will eliminate approval procedures for applicant companies with 200 or fewer shareholders. The announcement also said institutional investors will be encouraged to participate, in particular brokerages, insurance companies, investment funds and foreign funds. The move to ease access to the OTC market, which focuses on facilitating private placements in smaller Chinese firms, follows announcements that regulators will allow China’s IPO market to re-start in early 2014.

Beijing has been consistently trying to expand access to credit for small- and medium-sized enterprises (SMEs), which are usually too small to list but at the same time are too risky for Chinese banks to finance. But analysts say initiatives such as OTC exchanges and high-yield bonds designed for use by smaller companies have so far been hamstrung by regulatory restrictions and lack of investor interest, while efforts to force banks to lend to SMEs have mostly backfired. China’s primary OTC market was originally launched in Beijing in 2006, with around 200 firms trading on the platform, and then expanded to Shanghai. The State Council statement said any joint-stock companies that meet requirements will be able to apply for the right to transfer shares, obtain equity or debt financing or reorganize their assets through the OTC market. Unlike on the main exchanges, which have stricter profit requirements, companies that aren’t profitable will be eligible for trading on the OTC market. Other Chinese cities and provinces have also announced plans to create local platforms. Reuters

billion will be urban residents by 2020 as the country’s new leaders seek to sustain growth that last year slowed to a 13-year low of 7.8 percent. However, the leadership is struggling to balance multiple, occasionally conflicting goals such as encouraging the migration of millions of former farmers into cities without creating the slums and unemployment problems that have occurred in other countries experiencing similar migration. Restrictions on migration, which have created a de-facto illegal immigrant population in many Chinese cities, composed of Chinese citizens who have migrated without permission, have proven a significant source of social instability and have highlighted the uneven distribution of the fruits of China’s economic growth. At the same time China wants to maintain an agricultural sector capable of keeping the country fed independently without recourse to imports, and some officials worry that this will become impossible if too many farmers leave their farms. The statement issued at the end of a government conference committed to

improving the quality of the process, without mentioning any new policies or timetables. Indeed, the report specifically warned of undue haste in pursuing quick results. The statement said more attention would be given to environmental protection during the process, and said care would be taken to more efficiently use land. China is short on arable land given its enormous population, and the government is concerned that too much farmland is being converted to residential or commercial property for the purposes of speculation. “Endeavours will be exerted to gradually allow migrant workers to become more integrated in cities, fully remove hukou restrictions in towns and small cities, gradually ease restrictions in mid-sized cities, setting reasonable conditions for settling in big cities while strictly controlling the population in megacities,” said an article in the official Xinhua news service describing the report. But despite much talk, Beijing has proven reluctant to eliminate the system and has given mixed signals about how aggressively it is prepared to move in the near future. Similarly, regulators have given mixed signals on how land reform will be managed. Giving farmers rights to sell their land and keep the proceeds would transfer wealth to individuals and give them a source of savings if they moved to a city, but it would also deprive local governments the ability to sell that land, which is currently a major source of revenue for them. Reuters

December 16, 2013

Asia Peso’s weakness won’t spur inflation Tetangco says A weakening Philippine peso won’t spur inflation, central bank governor Amando Tetangco said, even as the currency heads for its biggest annual loss since 2008. “The peso weakness of late is not viewed as a significant factor or risk factor for inflation,” Mr Tetangco said in a Bloomberg TV interview. “Policy continues to be a flexible exchangerate system. The central bank comes into the market only to smoothen excessive volatilities.” Bangko Sentral ng Pilipinas yesterday held its benchmark interest rate at a record-low 3.5 percent for a ninth meeting and raised its inflation forecast for next year. The peso has fallen more than 7 percent this year, as investors assess the potential impact of impending tapering of U.S. Federal Reserve stimulus on emerging markets. The central bank on Friday cut its inflation estimate for this year to 2.9 percent from 3 percent in October, and raised its estimate for next year to 4.5 percent. It lowered its 2015 forecast to 3.24 percent from 3.4 percent earlier.

Petronas seeks higher prices for its LNG Malaysia’s Petronas is seeking higher prices for the 2 million tonnes of liquefied natural gas (LNG) a year it supplies to South Korea’s Korea Gas Corp (KOGAS), Petronas sources said. The Petronas contract is one of several that KOGAS, the world’s largest corporate buyer of LNG, is currently renegotiating, and a settlement could pave the way for a sharp jump in long-term LNG prices from Malaysia to South Korea. The move to hike prices comes as Asian LNG users are looking for ways to jointly leverage their buying power to lower prices of the fuel. “We would be happy if we could get above 13 percent of crude oil,” one Petronas source directly involved with the negotiations said but declined to say what the current pricing formula is. A second Petronas source said the Malaysian state-run company is aiming to renegotiate its contract with KOGAS to 13 percent to 13.5 percent of crude oil prices, and that the current pricing formula is below 10 percent of crude oil prices.

Kerry revives focus with Asian trip U.S. Secretary of State John Kerry will emphasise the American presence in Southeast Asia in visits to Vietnam and the Philippines after President Barack Obama’s absence from a summit in October ceded the spotlight to China. Mr Obama skipped the 10-member Association of Southeast Asian Nations summit in Brunei because of the partial U.S. government shutdown at the time. “The U.S. is trying to overcome the fallout from the no- show in Brunei,” Carlyle Thayer, an emeritus professor at the Australian Defence Force Academy in Canberra, said. “In terms of re-balancing, Vietnam is a major strategic player in Southeast Asia.” Mr Kerry observed the signing of a US$94 million deal to provide 52 wind turbines in the southern province of Bac Lieu and today he will have meetings with Vietnam’s Prime Minister Nguyen Tan Dung and other officials. In the Philippines, Mr Kerry will underscore U.S. efforts to provide relief after last month’s devastating typhoon Haiyan. He’s planning to make a side trip to Tacloban, a city in the area that was hit hardest.

Qantas – facing sinking share price and plans to shed 1000 jobs

Abbott backs easing Qantas ownership rule Australian Prime Minister has backed unshackling Qantas from restrictions on foreign share ownership

antas Airways Ltd, Australia’s largest carrier, could get government support to remove restrictions on foreign ownership of its shares, the Australian Financial Review reported citing Prime Minister Tony Abbott. Parliament may consider changes to legislation to help the company compete with Virgin Australia Holdings Ltd, Mr Abbott told the newspaper. Existing laws limit the level of foreign ownership in Qantas to 49 percent, restrictions that don’t apply to its rival. Qantas is cutting 1,000 jobs and seeking A$2 billion (US$1.8 billion) of savings after forecasting a record first-half loss on rising fuel costs and declining ticket prices as it competes

for passengers. Virgin, founded by billionaire Richard Branson, is more than 60 percent owned by Air New Zealand Ltd, Singapore Airlines Ltd and Etihad Airways PJSC. “What Qantas wants is to be unshackled,” Mr Abbott said, according to the newspaper. “Now I don’t think that’s an unreasonable request on their part, but that’s a matter for the Parliament as well as the government.” Standard & Poor’s downgraded Qantas to junk after it forecast the loss, citing competition from Virgin and its “well-capitalised shareholders”. Qantas is rated BB+ by S&P, one level below investment grade. Sydney-based Qantas flagged a loss before tax and one-time items of

A$250 million to A$300 million in the six months ending December 31.

‘Ongoing dialog’ “Qantas appreciates the acknowledgment that we’re playing on an uneven field,” Qantas spokesman Luke Enright said in a statement sent by SMS. “We’re in ongoing dialog with the government about how it could be levelled.” The airline is “certainly not looking for a handout from taxpayers,” Mr Enright said. The 1992 Qantas Sale Act, passed before the government sold the carrier to investors in 1995, limits total ownership by foreign airlines to 35 percent and the largest stake

India’s inflation surge hits ailing rupee, bonds

he Indian rupee fell and bond yields surged after retail inflation spiked to its highest on record, raising expectations for another rate hike by the central bank and adding to the woes of the embattled government. Reserve Bank of India chief Raghuram Rajan said on Thursday he was “very uncomfortable” with the inflation reading, a comment that probably seals the case for him to deliver his third rate increase next Wednesday, despite a weak economy. “Given the upside surprise, and the possibility of higher food prices feeding into core, we see risks that the RBI may tighten earlier than expected,” Goldman Sachs Inc said in a note following the data.

“We continue to expect the repo rate to go up to an above- consensus 8.5 percent by end-June 2014,” it said, a move that would mark another 75-basis-point increase from the current policy rate. The rupee weakened as far as 62.28 to the dollar on Friday, a one-week low, and closed onshore trading at 62.125/135, a third day of losses. It had ended trade at 61.81/82 on Thursday. Sharply higher food prices drove up retail inflation to 11.24 percent in November from 10.17 percent in October, data released on Thursday showed. Some traders even flagged the prospect of a surprise 50-basis-point hike by the RBI, though most still expect a more modest increase of

25 basis points. Factory output, however, showed a contraction in October, muddying the waters for the central bank, which will also be under pressure from the government to support a fledging economic recovery. “After such a print and statement, he [Rajan] now has to hike rates next week – hurting the growth outlook, or lose credibility, both of which would be INR-negative,” said Dariusz Kowalczyk, a Hong Kong-based strategist with Credit Agricole CIB. “The government is bound to pressure him not to do so given the unfavourable growth impact ahead of H114 elections, and we expect the INR to keep falling,” he said. Reuters

editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, 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.

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December 16, 2013

Asia permitted to any single foreign investor is 25 percent. The laws also place restrictions on the company’s name, where it locates operations and the proportion of foreign board members. In promising to support a A$350 million capital raising by Virgin Australia, its airline shareholders are “pumping money in to continue a loss-making business” Qantas chief executive Alan Joyce told reporters on a December 5 conference call. Virgin, which started as a budget carrier before adding business class seats in 2011, has been targeting corporate customers, ending almost a decade of near monopoly on fullservice domestic flights for Qantas. Moody’s Investors Service on December 5 put Qantas’s Baa3 rating, its lowest investment grade, on review for a possible downgrade. An internal review looking at divestments, and a proposed saleand-leaseback arrangement for its fleet, have heightened the uncertainty, according to Westpac Banking Corp. Australia won’t consider offering subsidies to help support the national carrier, Mr Abbott said on December 6 in a radio interview. Qantas is suffering from “selfinflicted wounds,” Virgin founder Mr Branson said in an interview with Bloomberg Television. “What they need to do is get their own house in order and stop complaining when the competition gets too hot.” Bloomberg News

What Qantas wants is to be unshackled… I don’t think that’s an unreasonable request on their part Tony Abbott, Australian prime minister

Indonesia plans new risk standards for banks New regulator agency may charge levy to fund its operations

ndonesia plans to require banks to follow more extensive risk assessment standards and pay a levy, the Financial Services Authority said as it prepares to take over supervision of lenders in January. The agency is considering charging financial companies a fee of 0.03 percent to 0.045 percent of assets to fund its operations, to be phased in gradually starting next year, said Muliaman Hadad, chairman of the regulator known by its Indonesian acronym of OJK. From 2015, banks with investment, securities, insurance and other units will need to include the risk profile of subsidiaries in assessing capital adequacy, he said. “Identifying risk only at the bank level is not enough anymore,” Mr Hadad, 53, said in an interview in Jakarta. “I would like to provide guidelines early next year before we implement all these risk profile” rules broadly, the former central bank deputy governor said. Mr Hadad will take on the task of managing a transition in the oversight of lenders to the OJK from the central bank, as the economy grapples with a declining currency that’s spurred monetary policy tightening and constrained growth. The authority, which became the regulator for non-bank financial services sectors this year, won’t introduce “significant” policy or regulatory changes, the chairman said, while signalling he’s open to altering existing rules or decisions. Over the past decade, Indonesian lenders such as PT Bank Danamon and PT Bank Internasional Indonesia have been expanding by acquiring financing companies, while PT Bank Central

Muliaman Hadad, head of the Financial Services Authority

Asia started a brokerage business to grow beyond commercial banking. Foreign funds have pulled about US$1.5 billion from Indonesian stocks so far this year, and the country is vulnerable to outflows when the U.S. Federal Reserve reduces stimulus, leading Bank Indonesia to maintain a tight policy stance. Asked whether higher interest rates will hurt liquidity at Indonesia banks, Mr Hadad said the OJK will monitor the situation closely even as lenders should still have opportunities for growth next year. “We have to watch very closely what will happen to the asset quality,” he said. “But what has enabled me to be comfortable about it is our banking sector has an appropriate buffer to handle all this.” The proposal for the levy on

Abe to push security agenda next year Public concerns about China’s growing military assertiveness to support move

rime Minister Shinzo Abe will likely push with fresh urgency next year a bid to ease legal limits on the Japanese military’s ability to fight shoulder to shoulder with allies overseas, a goal that eluded him in his first troubled term. Lifting Japan’s self-imposed ban on exercising the right of collective self-defence would mark a major turning point for Japan’s post-war security policy and could increase tensions in the region, where a row over tiny uninhabited islands in the East China Sea encapsulates growing Sino-Japanese mistrust. Since its World War Two defeat in 1945, Japan’s military has not engaged in combat. However, successive governments have stretched the limits of the U.S.-drafted, pacifist constitution to allow non-combat missions abroad. Mr Abe returned in triumph a year ago this month, pledging to revive Japan’s stagnant economy and bolster its global security clout. “Although there is no national election scheduled until 2016, if

Shinzo Abe’s support slid to about 50 percent this month

banks and financial institutions is with the president and is expected to be signed by the end of this year, with implementation in 2014, he said. Indonesian lenders are the most profitable in the world’s 20 biggest economies, according to data compiled by Bloomberg. To deepen the capital market, the authority aims to ease procedures for initial public offers and encourage more of the thousands of mid-sized Indonesian companies to sell shares, he said. Product development is a top priority, he said, citing opportunities in the debt market and real estate investment trusts. The OJK will share all banking industry data and communicate any rule changes with Bank Indonesia, Mr Hadad said. Bloomberg News

he doesn’t resolve various issues in parliament next year, momentum will falter and he will run out of time,” said Hokkaido University professor Jiro Yamaguchi. “Abe probably feels strongly that next year will be the last chance to implement his long-held goals.” Until last month, Mr Abe’s popularity ratings were above 60 percent, rare for a Japanese leader after a year in office, thanks to an economic recovery and buoyant stock prices which were in turn fuelled by hyper-easy monetary policy, a pillar of his “Abenomics” growth agenda. Last month he achieved one cherished goal in his conservative agenda when parliament enacted a law to create a National Security Council, which will concentrate control over security and diplomatic policies in the prime minister’s hands. A first-ever National Security Strategy to be approved tomorrow will underscore Mr Abe’s push to bolster the military and raise Japan’s security profile in the face of a rising China. Mr Abe’s support, however, slid to about 50 percent this month after his ruling bloc steamrolled through parliament a strict state secrets act that the government says is vital to persuade allies to share intelligence. Critics, however, say it echoes Japan’s wartime authoritarian regime and will muzzle the media. Reuters

14 14

December 16, 2013 April 19, 2013

Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 67.30 66.75 66.20 65.65

Max 67.25

average 66.252

Max 62.75

Min 62.2

average 62.327

Last 67.15

Min 61.7

Last 62.65

65.1

Max 98

average 97.181

PRICE 96.6

BRENT CRUDE FUTR Jan14 GASOLINE RBOB FUT Jan14 GAS OIL FUT (ICE) Jan14 NATURAL GAS FUTR Jan14 NY Harb ULSD Fut Jan14 Gold Spot $/Oz

30.1

97.1

29.8

96.8

29.5

96.5

Max 30.7

average 30.154

Min 29.2

29.2

Last 30.6

34.90

62.5

25.55

34.65

62.2

25.40

34.40

61.9

25.25

34.15

61.6

Max 25.7

average 25.408

YTD %

(H) 52W

Min 25.15

Last 25.45

(L) 52W

-0.923076923

3.6591909

107.9400024

85.45999908

108.83

0.147234747

4.213348655

113.3099976

96.13999939

262.93

-0.208744497

3.703557624

287.259984

243.1999922

917.75

-0.837385197

1.972222222

968

838.75

4.351

-1.315491041

7.432098765

4.825000286

3.464999914

297.57

-0.147646052

-0.181141189

320.0099945

278.0799866

1238.69

-0.4429

-25.5801

1703.3

1180.57

19.7

-1.4591

-34.5732

32.5325

18.2208

Platinum Spot $/Oz

1364.5

-1.0242

-10.0972

1742.8

1294.18

Palladium Spot $/Oz

Silver Spot $/Oz

716.45

-2.4747

2.3997

786.5

629.75

LME ALUMINUM 3MO ($)

1799

0.446677834

-13.21755909

2184

1736.25

LME COPPER 3MO ($)

7255

0.401328536

-8.52351532

8346

6602

LME ZINC

1978

0.55922725

-4.903846154

2230

1811.75

3MO ($)

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

14100

0.642398287

-17.35052755

18770

13205

15.545

0.549805951

0.843334415

16.80999947

14.91500092

425.5

-2.014968336

-30.18867925

640

418.5

WHEAT FUTURE(CBT) Mar14

628.75

-0.788954635

-24.40637211

871.25

626.5

SOYBEAN FUTURE Mar14

1313.75

0.171559283

-0.076060087

1377.75

1174

COFFEE 'C' FUTURE Mar14

115.25

3.548966757

-28.12597443

172.25

104.1499939

16.27

-0.18404908

-20.94266278

20.71999931

16.21999931

Mar14

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

83.22

0.192631832

4.797884397

90.61000061

76.65000153

World Stock Markets - Indices NAME

97.4

25.70

DAY %

WTI CRUDE FUTURE Jan14

CORN FUTURE

30.4

25.10

Max 34.9

average 34.468

Min 33.9

Last 34.15

33.90

Currency Exchange Rates

NAME

METALS

Last 96.65

30.7

97.7

62.8

Commodities ENERGY

Min 96.5

98.0

COUNTRY

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

DOW JONES INDUS. AVG

15755.36

0.1012108

20.23193

16174.51

12883.89

NASDAQ COMPOSITE INDEX

4000.975

0.06432568

32.50396

4081.784

2951.036

FTSE 100 INDEX

6439.96

-0.08207595

9.192393

6875.62

DAX INDEX

9006.46

-0.1168903

18.31317

9424.83

NIKKEI 225

15403.11

0.3994963

48.17551

HANG SENG INDEX

23245.96

0.1199063

CSI 300 INDEX

2406.639

TAIWAN TAIEX INDEX

KOSPI INDEX

COUNTRY MAJOR

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

ASIA PACIFIC

CROSSES

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

0.8964 1.63 0.8895 1.3742 103.21 7.9862 7.7538 6.0717 62.125 32.06 1.2552 29.632 44.145 12106 92.512 1.22203 0.84335 8.3571 10.952 141.87 1.03

-0.9503 -0.5794 -0.2586 -0.2251 -0.4457 0.005 -0.0039 -0.0049 -0.4748 0.1029 -0.1115 -0.0034 -0.1291 -0.6856 0.5124 -0.0041 -0.3913 0.152 0.4337 -0.2538 0.0097

-13.625 0.7666 2.9117 4.185 -16.5779 -0.0376 -0.0413 2.6171 -11.4769 -4.6163 -2.6928 -2.0215 -7.1129 -19.1062 -3.4428 -1.1906 -3.3118 -1.6704 -3.8495 -19.9478 -0.0097

1.0599 1.6466 0.9839 1.3832 103.92 8.0111 7.7664 6.2492 68.845 32.48 1.2862 30.228 44.82 12122 105.433 1.265 0.88151 8.4957 11.0434 142.83 1.032

0.8848 1.4814 0.884 1.2746 83.61 7.9818 7.7499 6.0681 52.89 28.56 1.2168 28.913 40.54 9603 86.41 1.2064 0.80817 7.8281 10.195 109.93 1.0289

Macau Related Stocks NAME

PRICE

DAY %

YTD %

(H) 52W

(L) 52W

VOLUME CRNCY

ARISTOCRAT LEISU

4.36

-0.228833

38.41269

5.12

3.04

2575821

CROWN RESORTS LT

15.9

-4.33213

49.01593

17.38

10.08

3542739

AMAX INTERNATION

1.77

-4.83871

26.42857

2.12

0.75

6011900

BOC HONG KONG HO

24.75

0.4056795

2.697094

22.85

10381728 3368000

CENTURY LEGEND

0.53

100

0.68

0.26

CHEUK NANG HLDGS

6.97

16.36061

7.28

4.58

CHINA OVERSEAS

22.6

-0.2207506

-2.164504

25.6

17.7

15370742

CHINESE ESTATES

22.9

-0.2178649

103.6361

23.8

10.128

9205

CHOW TAI FOOK JE

11.76

0.1703578

-5.466235

13.4

7.44

5795588 1166000

4.1

-0.4854369

116.9312

4.66

1.68

3.89

2.368421

220.9502

4.13

1.172

7892000

GALAXY ENTERTAIN

67.15

2.990798

121.2521

67.25

13451981

5873.43

HANG SENG BK

124.1

-0.2411576

4.549287

132.8

110.6

1093491

7418.36

HOPEWELL HLDGS

25.65

0.1953125

-22.85714

35.3

23.2

1324500

15942.6

9687.7

HSBC HLDGS PLC

82.6

0.06056935

1.599012

90.7

77.85

15364505

2.599828

24111.55078

19426.35938

HUTCHISON TELE H

2.53

-2.316602

-28.93258

4.66

2.52

15440000

-0.1400821

-4.610194

2791.303

2023.171

LUK FOOK HLDGS I

28.25

0.177305

15.77869

31.5

16.88

1571650

MELCO INTL DEVEL

27.9

0.7220217

209.6559

28.2

8.9

2322600

8376.94

0.1866928

8.798499

8501.769531

7491.52

MGM CHINA HOLDIN

30.6

4.081633

130.4515

30.75

13.127

7216031

1962.91

-0.2550904

-1.709522

2063.28

1770.53

MIDLAND HOLDINGS

3.39

0.8928571

-8.37838

4.29

2.68

3368000

S&P/ASX 200 INDEX

5098.427

0.7093508

9.668345

5457.3

4569.4

JAKARTA COMPOSITE INDEX

4174.83

-0.8876084

-3.286245

5251.296

3837.735

FTSE Bursa Malaysia KLCI

1840.35

0.3533511

8.964151

1846.92

1597

SHUN HO RESOURCE

NZX ALL INDEX

993.441

0.1717187

12.62827

1048.998

858.253

PHILIPPINES ALL SHARE IX

3542.76

0.09266898

-4.223325

4571.4

3440.12

Euromoney Dragon 300 Index Sin

593.16

-0.39

-4.5

STOCK EXCH OF THAI INDEX

1341.13

-1.111922

-3.649612

1649.77

1260.08

HO CHI MINH STOCK INDEX

506.06

-0.169652

22.31648

533.15

391.31

Laos Composite Index

1267.67

3.144782

4.354736

1455.82

1197.46

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

EMPEROR ENTERTAI FUTURE BRIGHT

NEPTUNE GROUP

0.325

-1.515152

113.8158

0.4

0.131

71010000

NEW WORLD DEV

9.92

-0.6012024

-17.47089

15.12

9.89

13450411

SANDS CHINA LTD

62.65

0.5617978

84.53608

63.85

33.35

9208367

1.57

12.14286

1.92

1.33

SHUN TAK HOLDING

4.41

-0.6756757

5.250595

4.8

3.27

2923500

SJM HOLDINGS LTD

25.45

-0.3913894

43.3992

17.04

7455174

7.7

0.5221932

-45.3125

14.46

7.5

7219479

WYNN MACAU LTD

34.15

-1.157742

63.00715

35.3

8550389

ASIA ENTERTAINME

N/A

BALLY TECHNOLOGI

74.89

0.2275161

67.50168

78.03

43.57

228573

BOC HONG KONG HO

3.18

3.583064

3.6

2.99

42000

GALAXY ENTERTAIN

8.7

3.325416

119.1436

8.7

3.8

9757

INTL GAME TECH

17.42

0.9269988

22.93578

21.2

13.58

4449276

JONES LANG LASAL

99.58

0.7690751

18.63235

102.14

80.86

182184

LAS VEGAS SANDS

76.57

0.5119454

65.87955

77.7

44.444

3327120

MELCO CROWN-ADR

37.83

1.25803

124.6437

38.35

16.13

1393349

MGM CHINA HOLDIN

3.99

6.684492

127.962

3.99

1.7503

12000

MGM RESORTS INTE

21.2

1.776284

82.13058

21.2

11.27

7919291

SHFL ENTERTAINME

23.19

#N/A N/A

59.93103

23.25

13.02

344231

SJM HOLDINGS LTD

3.31

-0.3012048

45.32739

3.6

2.2

5973

181.76

1.264694

64.54555

183.44

106.966

968642

SMARTONE TELECOM

WYNN RESORTS LTD

AUD HKD

USD

Hang Seng Index NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AIA GROUP LTD

30.2

1.003344

16574881

CHINA UNICOM HON

13.68

1.333333

22775492

ALUMINUM CORP-H

3.61

15433022

CITIC PACIFIC

10.12

0.1980198

6468988

BANK OF CHINA-H

3.15

1.286174

329406866

BANK OF COMMUN-H

5.87

0.8591065

37793438

0.1727116

14.5

BANK EAST ASIA BELLE INTERNATIO

NAME

CLP HLDGS LTD

NAME

PRICE

DAY %

64.4

0.625

2568679

SANDS CHINA LTD

28.75

-0.1736111

6213954

SINO LAND CO

14.28

0.990099

7686664

SUN HUNG KAI PRO

109.1

1.018519

8616634

-0.4815409

2456828

265.6

1.45149

2048509

23.9

2206357

0.8064516

5926157

52.75

1.05364

3208615

POWER ASSETS HOL

65.6

1561243

CNOOC LTD

16.32

0.4926108

46287676

1260442

COSCO PAC LTD

11.76

3138217

SWIRE PACIFIC-A

7192500

ESPRIT HLDGS

12.44

-0.48

4211743

TENCENT HOLDINGS

0.2087683

10140777

HANG LUNG PROPER

26.55

-0.1879699

7812341

TINGYI HLDG CO

CATHAY PAC AIR

13.78

0.2911208

3140232

HANG SENG BK

119.7

0.167364

1690249

WANT WANT CHINA

CHEUNG KONG

114.9

1.23348

3918568

HENDERSON LAND D

2.059087

5880582

WHARF HLDG

75.55

0.1325381

701703

1.112235

6329376

125.6

3.54493

9625332

76.5 -0.06531679

9291476

BOC HONG KONG HO

CHINA COAL ENE-H

7.7

-0.1297017

40174849

CHINA CONST BA-H

5.87

1.206897

202072100

CHINA LIFE INS-H

22.9

0.4385965

30126882

CHINA MERCHANT

25.6

0.3921569

4209584

CHINA MOBILE

HENGAN INTL HONG KG CHINA GS HONG KONG EXCHNG HSBC HLDGS PLC

85.45

1.064459

16569813

HUTCHISON WHAMPO

CHINA OVERSEAS

20.2

-0.2469136

19374736

IND & COMM BK-H

CHINA PETROLEU-H

8.36

0.9661836

101198904

CHINA RES ENTERP

25.2

0.8

77.35

1.243455

6697663

5.17

1.372549

317570965

LI & FUNG LTD

12.84

-0.9259259

17517410

4219717

MTR CORP

29.85

1.530612

4880670

MOVERS

23686.8

LOW

23080.19

CHINA RES LAND

17.16

1.179245

6849146

NEW WORLD DEV

12.98

1.564945

12528960

52W (H) 24111.55078

CHINA RES POWER

16.08

-0.618047

7490964

PETROCHINA CO-H

10.94

-1.263538

64234127

(L) 19426.35938

CHINA SHENHUA-H

33.35

-0.1497006

11160228

PING AN INSURA-H

63.35

1.198083

8338502

1 23690

INDEX 23245.96 HIGH

VOLUME

23070

11-December

13-December

15 15

December 16, 2013 April 19, 2013

Opinion Business

wires

Asia’s historical furies

Leading reports from Asia’s best business newspapers

Asahi Shimbun The annual number of foreign visitors to Japan is expected to surpass 10 million for the first time in December. According to a report by the Japan National Tourist Organisation (JNTO), about 9.5 million foreigners visited the country as of the end of November, with the figure set to reach 10 million within this month. Monthly figures also broke records for 10 consecutive months since February. In 2003, the government set a target of attracting 10 million foreign visitors a year by 2010, but it has taken three years longer to achieve that goal.

Myanmar Times Japan and Myanmar signed an investment treaty to nurture closer business ties as the once secluded Southeast Asian country opens its fastgrowing economy to more foreign commerce. Prime Minister Shinzo Abe and Myanmar President Thein Sein signed the deal in summit talks following a gathering of leaders from the Association of Southeast Asian Nations in Tokyo. Japanese businesses have been eager to invest in Myanmar and have stepped up their activities there after Thein Sein’s reformist government came to power in 2011 after nearly 50 years of military rule.

Korea Herald South Korean retailers are competitively foraying overseas, seeking new sources for business growth to replace the much-saturated domestic market, but the latest industry data indicate they will have to wait before any meaningful profit. According to the survey by the Korea Chamber of Commerce and Industry (KCCI), annual sales by 61 retailers operating abroad have been on the increase since 2010 when they rose 17.2 percent on-year. Their combined sales for 2013 are predicted to increase 39.6 percent compared with the previous year. 82 percent of those surveyed said they will expand their overseas business next year.

Jakarta Globe Bank Indonesia and the Bank of Japan have concluded a landmark agreement to support the ailing rupiah. Under the proposed deal the central bank will buy Japanese government securities, such as bonds and bond repurchase agreements, held by Japanese banks operating in Indonesia to help bolster rupiah liquidity in case of a financial crisis. “The scheme will broaden the range of eligible assets in BI’s liquidity facility during the crisis period, and permits greater flexibility in the liquidity management of eligible banks operating in Indonesia,” Bank Indonesia spokesman said.

Jaswant Singh

Former Indian finance minister, foreign minister, and defence minister

country’s foreign policy is supposed to be aimed, first and foremost, at advancing its national interest. But, in large parts of Asia, the national interest – whether building commercial ties or bolstering security – is often subordinated to history and its hold on the popular imagination. As US Vice President Joe Biden just discovered on his tour of Japan, China, and South Korea, the American novelist William Faulkner’s observation – “The past is never dead. It’s not even past.” – could not be more apt. One commonly cited example of this is the relationship between India and Pakistan. Indian Prime Minister Manmohan Singh and Pakistani Prime Minister Nawaz Sharif recognise the vast economic potential of enhanced bilateral trade ties, and the progress that they have sought in this area is clearly in both countries’ national interest. But their diplomatic overtures have been quickly stymied by those who cannot accept such reasoning, going so far at times as to commit acts of terror and launch military incursions. But Asia’s history problem is not confined to its democracies, where public opinion directly influences the government’s actions. China and Vietnam, too, remain in thrall of their long and bitter shared history. The late General Vo Nguyen Giap, who led Vietnam through wars with France and the United States to independence, spent his final years protesting against Chinese investment in his country. Perhaps Asia’s most dangerous case of historical obsession is to be found in the relationship between China and Japan. The current dispute in the East China Sea over the Japanese-controlled Senkaku Islands (the Diaoyu Islands in China) would likely be less tense if the atrocities of the Sino-Japanese War were not rehashed so often in contemporary Chinese life.

Japan’s economic ties with China, they have not had the transformative impact on bilateral relations that one might have expected. Indeed, their relationship is now characterised by what the Japanese call seirei keinetsu (cold politics, hot economics). Bad history also stalks the relationship between Japan and South Korea – a particularly revealing case, given how closely their strategic interests align. Here are two democracies, both among America’s closest allies, unable to overcome the burden of the past. For South Koreans, it is a heavy burden, rooted in Japanese colonisation and the myriad horrors of World War II. But the simple fact is that both countries would benefit substantially, in security terms in particular, from effective cooperation. In fact, serei keinetsu defines the Asian status quo: countries that cannot seem to overcome their historical animosities when it comes to foreign policy readily acknowledge

Cold politics In fact, Japan has attempted to atone for its past actions, including by offering enthusiastic support to Deng Xiaoping’s efforts to open up the Chinese economy. The trillions of yen that Japanese businesses have invested in China since the 1990’s – not to mention the transfer of critical technologies – could not have been about profit alone (and, in any case, Japanese investment has benefited both economies). But, while these efforts have helped to deepen

With China’s efforts to assert itself as a regional hegemon … its neighbours seem to be increasingly willing to vacate old grudges

that better relations means better economies. East Asia, in particular, has experienced an unprecedented surge in intra-regional trade, investment, and even tourism over the last two decades.

Forging alliances Yet there is reason for hope – and it is coming from an unexpected source. With China’s efforts to assert itself as a regional hegemon stoking fears across Asia, its neighbours seem to be increasingly willing to vacate old grudges in favour of stronger alliances. For example, Japan’s relations with Vietnam and Myanmar, both of which border China, have been warming rapidly in recent years – a trend that Japanese Prime Minister Shinzo Abe has sought to cultivate. Likewise, the Philippines – locked in a stand-off with China over the disputed Scarborough shoal – has set aside its resentment over Japan’s wartime occupation and accepted increased aid and naval assistance, including ten patrol vessels, worth US$11 million each, to help with maritime surveillance. Filipino Foreign Minister Albert del Rosario has even declared publicly that the country would welcome a more muscular Japanese defence policy to offset China’s military build-up. One reason for this turnaround is that many in the Philippines have felt somewhat abandoned by the U.S. in their confrontation with China. With China increasingly asserting claims to territories in the South and East China Seas, other Asian countries may also find the burden of history to be too great an impediment to their future prospects. Japan could go a long way toward helping its neighbours

overcome the poisoned past that it shares with so many of them as a result of its old imperial ambitions. Just as U.S. President Richard Nixon’s unyielding anticommunism uniquely suited him to establish diplomatic relations with China, Abe, an affirmed nationalist, may be the Japanese politician best able to blend contrition for the past with forthrightness about the present. The good news is that Abe has shown signs of this kind of courage. At a 2006 summit with Chinese leaders during his first stint as Japan’s prime minister, he agreed to establish a joint commission, involving historians from Japan, China, and elsewhere, to study twentiethcentury history. The idea was that the commission could make unbiased recommendations about contentious issues like the contents of history textbooks and even the Yasukuni shrine, a nationalist pilgrimage site where the remains of Japanese war criminals, among others, are interred. If Abe revived this initiative today, he could help to dampen the regional antagonism he faces in trying to make Japan a “normal” country, with a military capable of participating in collective regional defence. Such an initiative may not work with China, where the government still uses the war with Japan to rouse nationalist sentiment. But countries like South Korea that are feeling the pressure of China’s rise – as demonstrated by the current furore over China’s unilateral expansion of its air defence zone – may well reciprocate such an effort. That alone should be reason enough for Abe to act. © Project Syndicate

16 16

December 16, 2013 April 19, 2013

Closing Failing casinos submit smoking cut plans Germany’s SPD backs coalition deal All 14 current gaming venues that previously failed a second round of air quality checks in smoking zones have submitted plans to reduce those areas “within the timeframe,” said Secretary for Social Affairs and Culture Cheong U (pictured). The government will finish analysing the plans “by the end of January,” he told media yesterday. Six venues operating under the licence of Sociedade de Jogos de Macau SA had not submitted their plans by the deadline of 5.45pm on December 10. The Health Bureau confirmed yesterday the plans were sent after office hours still on December 10.

Members of Germany’s opposition Social Democrats have voted overwhelmingly in favour of entering a grand coalition government led by centreright Chancellor Angela Merkel (pictured). Seventy-six percent of party members who voted approved the plan. A new government can now be formed – three months after a general election. Under a coalition deal signed last month, a minimum hourly rate of 8.50 euros (US&$11.55) will come into force for the first time in 2015. Wolfgang Schaeuble is likely to retain the post of finance minister, while the Economy Ministry is to go to the SPD.

crisis,” she said in a statement. The troika – the European Union, International Monetary Fund, and European Central Bank – have held significant influence on policymaking and the direction of the Irish economy.

Deep recession

The Irish economy now emerging from one of the deepest recessions in the eurozone

Ireland exits bailout with last tranche of aid Government’s tough economic policies to continue, says finance minister

he International Monetary Fund disbursed Ireland’s last aid tranche, as the country became the first eurozone member to successfully exit its international bailout. Ireland on Friday received US$890 million from the IMF, one of a trio of lenders that oversaw Dublin’s 85 billion euro (US$117 billion) bailout, needed after its biggest banks collapsed in 2010.

The exit from its bailout rescue is a “milestone” but not the end of the road, Ireland’s finance minister has said. Michael Noonan told a press conference marking the exit that Ireland’s deficit and debt was still far too high. Ireland has cut spending and raised taxes to rebalance the economy since seeking emergency help, meeting every major target and enduring little public unrest. It has also managed to

fund itself into 2015 thanks to debt issuance over the last 18 months. IMF managing director Christine Lagarde praised Dublin’s “steadfast policy implementation,” but said the economy still faces challenges, including unemployment, heavy public sector debt and the sustainability of public debt. “Continued concerted policy implementation is therefore necessary for Ireland to recover fully from the

Japan, Southeast Asia agree to boost ties U.S., China naval confrontation adds to tension

apan and Southeast Asian countries yesterday pledged to boost economic and security ties, a day after they agreed on the importance of ensuring freedom of the skies after China declared a controversial air defence zone. The leaders were discussing increasing exchanges of top diplomats and defence officials and closer coastguard cooperation, finalising a three-day special summit between Japan and the Association of Southeast Asian Nations (ASEAN), officials said. Tokyo Saturday pledged US$20

billion in aid and loans to Southeast Asia at the summit with leaders of the ASEAN regional bloc, the latest step in its bid to woo global public opinion in its territorial dispute with China. In bilateral talks yesterday, Japan and Myanmar also agreed on an investment accord to accelerate Japanese investment in the former junta-ruled country, while Tokyo and Laos agreed to kick-start talks on a civil aviation agreement, officials said. The talks came a day after Japan and ASEAN agreed on the importance of the “freedom of overflight and

civil aviation safety”, seen as a mild regional rebuke to China for its unilateral declaration last month of an Air Defence Identification Zone (ADIZ). Beijing denounced as “slanderous” remarks by Japanese Prime Minister Shinzo Abe at the summit calling for Beijing to rescind its air zone, which was widely criticised as increasing regional tensions. China is “strongly dissatisfied” over the comments, Hong Lei, a spokesman for the country’s Ministry of Foreign Affairs said in a statement

Exiting the bailout marks a waning of that influence, but Mr Noonan said this would not mean a relaxation of the tough policies that he acknowledged had hit the Irish population hard. “This isn’t the end of the road. This is a very significant milestone on the road,” Mr Noonan said. “But we must continue with the same types of policies. “Ireland sought emergency help three years ago to keep its finances under control and has met the terms of the programme, implementing austerity to bring down its budget deficit and rebalance the economy.” But he said the economy was getting better. “People are beginning to spend. Property prices are improving… it’s fragile. But in my view things are building well and I would hope that next year would be better for a lot of people who have made a lot of sacrifices.” Although Mr Noonan pledged to maintain fiscal discipline, he said the government would consider income tax cuts in the next two budgets to give the economy some support. “If we can make changes which help the economy to grow better and create extra jobs, those are the kind of things we’ll do,” he said. Nevertheless, the Irish economy is now emerging from one of the deepest recessions in the eurozone, and is forecast to grow by about 2 percent next year. Unemployment has fallen below 13 percent, from a 15.1 percent peak in 2012. Reuters/AFP

on the ministry’s website. Mr Hong expressed in the statement China’s “strong anger” over Mr Abe’s “malicious slander” against China in an international arena. Some analysts fear the ADIZ in the East China Sea is a forerunner to a similar zone in the South China Sea, which Beijing claims almost in its entirety. China has sovereignty disputes with four members of ASEAN – the Philippines, Vietnam, Malaysia and Brunei – and has been repeatedly accused of intimidation and coercion. The summit commemorating 40 years of Japan-Asean ties came as the U.S. Navy said one of its ships had to change course to avoid a collision with a Chinese warship in the South China Sea on December 5, underscoring regional tensions. AFP