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Vitor Quintã
MOP 6.00
Govt to study plan1 for smoking rooms in city’s casinos
April 19, 2013
Deputy editor-in-chief
Slump in CE’s ratings spurs Chui Sai On to reflect on progress Page 4
www.macaubusinessdaily.com
Year II
Number 441 Monday December 23, 2013
Editor-in-chief Tiago Azevedo
Shun Tak eyes Hengqin build launch by summer 2014 Page 9
Neighbourhood group critical of slot parlour plan T
he opening of a Mocha Clubs slot machine parlour in the Inner Harbour district – to replace another parlour that had to close – is in accordance with the rules, Secretary for the Economy and Finance Francis Tam Pak Yuen has said. The Rua Cinco de Outubro Neighbourhood Association, which is a member of the Macau General Union of Neighbourhood Associations, disagrees with Mr Tam.
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The association’s president, Chang Cho Vai, told Business Daily: “Many residents are puzzled why a slot parlour has opened in this old neighbourhood, as the government promised to move all gaming establishments away from residential areas.” Business Daily asked Mocha Clubs, an arm of Melco Crown Entertainment Ltd, for comment, but none was available by press time.
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Interview
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Past, presentand future: city’s European trade endures: EU
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December 20
HSI - Movers European companies are very interested in investing here, said Vincent Piket, head of the European Union Office to Hong Kong and Macao, in an interview with Business Daily. The EU wants closer ties with Macau, not only focused
on trade and economy, but also in fields such as education, science and the creative industries. But he warns that Macau needs to make clear it protects intellectual property rights.
Name
Pages 6&7
Tourism chief predicts single-digit growth next year
Grand Emperor operator buys the Best Western
The number of visitors to Macau is likely grow by under five percent next year as the city focuses on luring greater numbers of big spenders, according to the director of the Macau Government Tourist Office, Maria Helena de Senna Fernandes. “I don’t believe there will be no growth next year, but that the rise will be limited to a low single digit,” she said.
The operator of the Grand Emperor hotel-casino is buying the Best Western Hotel Taipa for HK$900 million (US$116 million). Hong Kong-listed Emperor Entertainment Hotel Ltd didn’t say if there were any plans to have a casino at the venue. The hotel used to have a Mocha Clubs slot machine parlour, but the parlour closed last month because the government now bans slot machine parlours in residential areas.
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%Day
POWER ASSETS HOL
1.75
LI & FUNG LTD
1.75
CATHAY PAC AIR
1.52
CHEUNG KONG
1.51
HANG SENG BK
1.38
CHINA OVERSEAS
-2.21
GALAXY ENTERTAIN
-2.66
LENOVO GROUP LTD
-2.67
CHINA LIFE INS-H
-2.70
PING AN INSURA-H
-4.62
Source: Bloomberg
I SSN 2226-8294
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2013-12-23
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December 23, 2013
Macau
Substitute slot parlours ‘cautiously’ considered Misgivings are expressed about one replacement slot machine parlour, even though it is in line with the rules Tony Lai
tony.lai@macaubusinessdaily.com
A Mocha Clubs slot machine parlour has opened in a building near the Ponte 16 casino
T
he opening of a Mocha Clubs slot machine parlour in the Inner Harbour district to replace another parlour that had to close is in accordance with the rules, Secretary for the Economy and Finance Francis Tam Pak Yuen has said. But Inner Harbour residents fear the new parlour will be harmful to the district. The Mocha Clubs slot machine parlour has opened in premises originally occupied by a hotel opposite the Ponte 16 casino, replacing another parlour elsewhere that was forced to close because it was in a residential area. The government has banned slot machine parlours from residential areas to remove the temptation for residents to gamble. Mr Tam said on the sidelines of a celebration on Friday of the anniversary of the handover that the new parlour was not in a residential building and was within 500 metres of a casino, and so was not covered by the ban. The Rua Cinco de Outubro Neighbourhood Association, which is a member of the Macau General Union of Neighbourhood Associations, disagrees with Mr Tam. The association’s president, Chang Cho Vai, told Business Daily: “Many residents are puzzled why a slot parlour has opened in this old neighbourhood, as the government promised to move all gaming establishments away from residential areas.” Mr Tam said the closure of gaming establishments in residential areas had to be gradual because Macau was a small place, with housing everywhere. He said the government was concentrating first on closing slot machine parlours in the northern
Many residents are puzzled why a slot parlour has opened in this old neighbourhood, as the government promised to move all gaming establishments away from residential areas Chang Cho Vai, Rua Cinco de Outubro Neighbourhood Association president
district that were near housing or schools, “like the one close to the Macau Polytechnic Institute”.
Women at risk Mr Chang said he was worried that the Mocha Clubs slot machine parlour in the Inner Harbour district would have a “negative impact” because residents of the district, particularly housewives and the elderly, would find it easier to gamble. “One of my friends, who is a housewife, has already been there,” he said. “The place provides free fruit juice and air-conditioning,” he said. “I am worried that people will
get into the habit of gambling there to kill time.” A resident of the Inner Harbour district, 27-year-old Gary Cheong, told Business Daily he opposed the new parlour. “It just doesn’t make sense, as many elderly and retired people live in this area. Is this what the socalled responsible gaming policy of the government is all about?” Business Daily asked Mocha Clubs, an arm of Melco Crown Entertainment Ltd, to comment, but there was no reply by the time we went to press. The ban on slot machine parlours in residential areas forced five parlours run by Mocha Clubs and SJM Holdings Ltd to close last month. Mocha Clubs has applied for permission to open a parlour in a commercial centre in ZAPE to replace another in the same area that was forced to close. Mr Tam said the government was thinking about the application. He said the government would “cautiously consider” all applications to open slot machine parlours.
Flexible cap Mr Tam said the government had stopped all free bus services that shuttled people between parlours that had been forced to close and other gaming establishments. He was critical after hearing reports that buses were shuttling people between where SJM’s Yat Yuen Canidrome Slot Lounge used to be and the Casino Lisboa. Mr Tam reiterated that the government would limit the compound annual growth rate in the number of gaming tables to 3 percent until 2022. “But this does not mean the tables will grow by 3 percent every year,” he said.
“There may be special circumstances under which the number of tables will grow by more than 3 percent in one year,” he said, “while in another year there may be no growth.” Macau had 5,748 gaming tables at the end of September, official data show.
Be wary of market lurches, Tam says Macau people should be careful with their investments because the fasing-out of the monetary policy in the United States may cause markets to fluctuate, according to Secretary for the Economy and Finance Francis Tam Pak Yuen. The US Federal Reserve, or central bank, announced last week that it will reduce its monthly bond purchases to US$75 billion (600 billion patacas) from US$85 billion, indicating that the days of ultra-easy money – and therefore miniscule interest rates – may be nearing their end. “We will pay particular attention to whether or not this means the start of the United States withdrawing its stimulus programme,” Mr Tam said on Friday. “For us, the message is still not very clear,” he said. “I want to urge residents investing in the property market or the financial markets to be careful,” he said, “because if the message becomes clearer and there is a change in interest rates this may bring fluctuations.”
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December 23, 2013 April 19, 2013
Macau
Govt to study smoking rooms for casinos 16 venues failed a second round of air quality tests earlier this year
T
he government is to set up a task force to consider establishment of airportstyle smoking rooms in local casinos. It would look at a range of issues including their legality. “This new opinion – if executable and in compliance with the laws – is worth the time and is the development that everyone wants to see,” said Secretary for Social Affairs and Culture Cheong U on Friday. He was referring to a recent petition by the city’s six operators that they be allowed to set up smokers-only lounges with no gaming equipment inside. Casino workers have repeatedly complained about air quality on gaming floors since the current ‘half and half’ arrangements introduced in January. Under those rules, a maximum 50 percent of gaming floor space can be allocated for patrons to smoke in. There was some suggestion the new rules had actually concentrated the effects of smoke in gaming zones. In October it was announced 16 gaming venues had failed a second round of air quality checks that had been mandated to monitor the effectiveness of the policy. Speaking on the sidelines of an official celebration ceremony on Friday for the 14th anniversary of Macau’s handover from Portuguese to Chinese administration, Mr Cheong said there would be “a crossdepartmental government team” to consider the practicalities of the smoking lounge idea. “After the analysis… we will deliberate with the gaming operators,” he added. He did not comment on reports
Operators asked government to consider smoking lounges
that one casino company – SJM Holdings Ltd – has forged ahead and already installed a smoking room in one of its premises – Casino Lisboa – on a trial basis. Angela Leong On Kei, SJM executive director, said last week
that they may do the same in other properties. Chan Wai Sin, deputy director of the Health Bureau, said on Friday that – notwithstanding the smoking lounges idea – his department is studying whether casinos failing
the second round of air quality tests will after all face reductions in the size of their smoking areas. Eight of 14 failing sites (two have since closed for other reasons) are SJMlicensed properties. T.L.
Macau’s got talent, says Chief Executive City’s boss confirms he will spearhead a committee to help locals build their skills and help diversify economy Tony Lai
tony.lai@macaubusinessdaily.com
A
committee to help develop local employees’ skills and their social mobility will be established next month says the city’s Chief Executive Fernando Chui Sai On. “Apart from continuing to strengthen the non-tertiary education and continuing education… [the government] also aims to gradually turn the Macau residents into applied talents, professionals and elites via training,” said Mr Chui. He will lead the committee, but has so far given no other details of its work. Mr Chui was speaking on the sidelines of the official celebration on Friday marking the handover of Macau from Portuguese to Chinese administration in 1999. The human resource development committee – mentioned in his Policy Address for 2014 delivered to legislators last month as a way to “cultivate the talents” of locals – would be set up next month he stated. “The government hopes to provide the residents more training opportunities locally or overseas via an established mechanism,”
said Mr Chui. In his speech at Friday’s ceremony, Mr Chui added: “To face current and future challenges and to promote the sustainable development of Macau, talent is the key.” He also pledged to continue to strengthen “the four long-term mechanisms” next year. He described these as relating to education, social
security, health services and housing. Additionally the government would be “sharing with the public the achievements of growth”, said Mr Chui – hinting at more cash for social measures. Regarding what he termed the “sluggish recovery” of the global economy, the Chief Executive warned: “We must be mindful of
potential crises and be well prepared to overcome volatility and changes.” Mainland China’s ‘opening up’ policy – characterised by initiatives in the Pearl River Delta Region such as free trade zones – can give Macau “new opportunities and the driving force for its future development”, stated Mr Chui. The CE met China’s President Xi Jinping last week in Beijing. According to media reports, Mr Xi told Mr Chui the city should be “prepared for adversity” and further improve its economic structure. Bai Zhijian, director of the Central People’s Government Liaison Office in Macau, reiterated during the handover anniversary celebration on Friday that the city should “consider more long-term issues” and diversify its economy from gaming. Mr Bai also signalled he would “soon” leave his Macau post but declined to say who would succeed him. Li Gang, the deputy director, is widely expected to head the office after transferring to Macau from the Hong Kong liaison office last year.
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December 23, 2013
Macau
Tourism chief predicts slow growth next year The Macau Government Tourist Office is hoping spending by tourists will grow faster than their numbers Tony Lai
tony.lai@macaubusinessdaily.com
T
he number of visitors will grow by under 5 percent next year as Macau focuses on luring more big spenders, according to the director of the Macau Government Tourist Office, Maria Helena de Senna Fernandes. Ms Senna Fernandes said on Friday that annual growth in visitor numbers had been slowing. “I don’t believe there will be no growth next year, but that the rise will be limited to a low single digit,” she said on the sidelines of an official celebration of the anniversary of the handover. Official data show Macau had over 24.3 million visitors in the first 10 months of this year, 4.7 percent more than in the equivalent period last year. “The quality is more important than the quantity, and we also hope to provide better services to our tourists,” she said. “We hope to attract tourists with higher spending power, and who stay for longer. We are not striving for relentless growth.”
Maria Helena de Senna Fernandes says restaurants with good service will win awards
Ms Senna Fernandes gave no targets for how much she would like visitors to spend or how long she would like them to stay. Average spending per head was 1,905 patacas (US$238) in the third quarter, official data show. Each tourist from the mainland spent 2,321 patacas, on average. The average length of stay has been steady at 1.0 day so far this year. To entice big spenders and give better service, the tourist office will begin next year giving establishments catering to tourists awards for good service. Ms Senna Fernandes said the first awards would be for restaurants. “In the past the only thing we would do was to fine or penalise any that breached the rules,” she said. “But we also hope to give some acknowledgment to the service providers that have being doing a good job.” Ms Senna Fernandes said the government would solicit public opinion around the Lunar New Year on walking trails for visitors on Taipa and Coloane. She said four walking trails that had been opened on the peninsula two months ago to divert visitors away from the man tourist spots needed more advertising. The government would next year invite bids from around the world to make a study of the development of tourism in Macau in the medium term to long term, Ms Senna Fernandes said.
Slump in approval rating spurs Chui self-criticism An opinion poll indicates that housing is most pressing issue for the chief executive Tony Lai
tony.lai@macaubusinessdaily.com
C
hief Executive Fernando Chui Sai On has promised to review his performance after an opinion poll showed a net fall in his approval rating. Speaking on the sidelines of Friday’s official celebration of the anniversary of the handover, Mr Chui said he had been “paying attention” to opinion polls since taking office in 2009. “The approval rating has been going up and down. We not only
accept the criticism, but we will also carry out self-criticism,” he said. The results of the University of Hong Kong’s latest annual survey of opinion in Macau, published on Thursday, show Mr Chui’s net approval rating plunged to zero this year from 23 percent last year. The net approval rating is calculated by subtracting the number of respondents in the survey sample expressing no confidence in the chief executive from the number expressing
confidence in him. The results show 39 percent of respondents expressed confidence in the chief executive and 39 percent expressed no confidence in him. The results show Mr Chui’s overall rating dropped to 61.1 points out of 100 from 64.5 points last year. Hong Kong University polled a sample of 511 Macau residents by telephone this month. Nearly 60 percent of respondents said housing was the “most important problem to be tackled by the government next year” – deeming it more important than the economy, transport and inflation.
High aspirations
Chui Sai On says the government will reflect on its housing policy
Mr Chui said the government would reflect on its housing policy to see whether it had affected his rating. He announced no new measures to cool the housing market in the Policy Address for 2014, delivered last month. The net satisfaction rating of the government as a whole fell by 20 percentage points to 15 percent. The director of the Liaison Office of the Central People’s Government,
Bai Zhijian, said on the sidelines of the anniversary celebration that the fall showed the public had high standards and aspirations. Asked whether government secretaries and other officials should be reshuffled after next year’s election of the chief executive, Mr Bai said the government “should balance different opinions and strive for a consensus”. He said the incumbent officials were “diligent”. A chorus of calls by members of the Legislative Assembly and other political figures for the resignation of Secretary for Public Administration and Justice Florinda Chan and Secretary for Transport and Public Works Lau Si Io has grown in volume this year. The results of the opinion poll show 55 percent of respondents expect Macau to develop in a better way next year – a percentage similar to the proportion that expressed the same expectation last year. The results show respondents are most satisfied most with the government’s performance in managing Macau’s relationship with the central government and in managing the city’s economy.
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December 23, 2013 April 19, 2013
Interview Brought to you by
HOSPITALITY Carrying on At first glance, the data for the transport and storage industry from 2008 to last year seem to indicate that the international financial crisis and the economic boom here had little effect on it. The industry comprised 2,149 enterprises last year, 10 fewer than in 2008. But the number of transport and storage enterprises fell noticeably between the peak year of 2009 and 2011. It began to rise again last year. The industry had 13 percent more employees last year than in 2008. But its combined workforce decreased by about 2 percent from 2008 to 2010. It increased by over 15 percent from 2010 to last year.
Past, present and future:
E
uropean companies are very interested in investing here, said Vincent Piket, head of the European Union Office to Hong Kong and Macao, in an interview with Business Daily. The EU wants closer ties with Macau, not only focused on trade and economy, but also in fields such as education, science and the creative industries. The regional integration and the development of Hengqin Island will help boost partnerships between Macau and EU firms, Mr Piket suggested. But he warns that Macau needs to make clear it protects intellectual property rights. Luciana Leitão
leitao.luciana@macaubusinessdaily.com
The chart shows indexes for the transport and storage industry’s labour costs, costs of purchases, other operating costs, combined revenue and combined gross value added from the base year of 2008 to last year. The industry’s combined revenue fell by over 12 percent in 2009. But from 2009 to last year it rose by over 53 percent. The industry’s combined gross value added increased every year from 2008 to last year. Early on in the period under review, the industry’s main costs fell faster than its revenue. So even in 2009 its gross value added increased by 2.6 percent. In 2010 its gross value added increased by 44 percent. From 2008 to last year the transport and storage industry’s gross value added increased by almost 90 percent.
32.6 pct
Rise in transport industry labour costs, 2008-2012
Macau’s relations with the European Union are based on a Trade and Cooperation Agreement, signed more than 20 years ago. Are there other opportunities for collaboration? I don’t think the agreement is limitative. It’s a broadly phased agreement. This is not a contract. Of course commercial trade and economic relations have been growing quite fast in the past years on the back of Macau’s economic growth. But there are also non-economic areas where we work together, like education, science, the legal field and in training interpreters, which is a vital need for Macau and for the European Union. Macau has a problem with the quality and lack of human resources. Could the EU do more and share its expertise in training qualified human resources? First of all, in bilateral cooperation you can always do more. Secondly, I do agree that for European firms based in Macau, but also for local Macau-based companies, it is a growing challenge to find the right person for the job in whatever level it is. That is totally natural if you look at the demography of Macau and certainly look at the demands of the economy. Shortages need to be filled somehow. One way is imported labour but that has limitations for societal reasons. Second, you improve human resources by
training and we do think we can do something there. The very specific training of interpreting that I’ve mentioned is one field where we can do more. We are also going to continue our legal cooperation programme, which means that in this area we can do more in terms of know-how exchange... Third, the EU is about to start a new round of projects under the ERASMUS programme – a student and professor exchange programme within the EU but also between the EU and all our partners abroad. We just published new proposals and we’ll be reaching out to the University of Macau, the Macao Polytechnic Institute and the other main institutes, to publicise this programme and encourage people to apply… Fourth, we won a co-financed project, implemented by the University of Macau with the Institute for European Studies… to promote European studies, by bringing in visiting professors from Europe and sending Macau students for periods of study to European universities.
…commercial trade and economic relations have been growing quite fast in the past years on the back of Macau’s economic growth
What are the EU’s priorities regarding cooperation with Macau? Trade is what makes the world go around, so we want to definitely boost our trade with Macau; see if we can also boost our investment and be part of the phenomenal growth that Macau will continue to see. When [José Manuel] Durão Barroso [president of the European Commission] was in Macau, he attended the inauguration of the new Macau European Chamber of Commerce – a vehicle we will use to boost our economic relations. As for the rest, what we can do is [be] part of the big trade fairs Macau has, like the MIF and the MIECF. Secondly, we will continue with the other cooperation activities that meet our interests – education, legal cooperation, interpreters’ training. We also want to see [if] we can do
more in the scientific field. A new research cooperation programme has just launched, the Horizon programme, so [we’d like] to get Macau involved in areas that are relevant. The third area that is more linked to the overall development of Macau, is its [economic] diversification agenda. It’s tough if you have a small economy and one sector [gaming] so prominent and strong. But it’s not good for the city to be over-dependent on one single source of income and we are interested in discussing with the government what we can do to help diversify the economy. Mostly [that’s about] how European firms can plug into growing sectors more on the technology side and add value. Maybe the cultural and creative industries, where Europe is strong, can be a partnership to explore. Lastly, we’re very interested in what Macau is doing in the Pearl River Delta. If you look from the point of view of Macau, with its land restrictions and 500,000-plus population, what do you do? Macau has no land, you need to find your land elsewhere, Macau has a problem of human resources and the next-door neighbour does not. Macau does have capital, so it’s an ideal match to create something like the economic zone in Hengqin Island with land and human resources where the two sides combine to jointly develop it. Given our [EU] border crossing and integration experiences, we can contribute with some know‑how. Macau is often mentioned in international reports for concerns over corruption and money laundering. Is the European Union concerned with such issues? We talk with all our partners – and Macau is definitely not unique – on how we can collaborate on fighting money laundering, tax evasion and unfair taxation. The big money flows that go to Macau and out of Macau are not toward the EU, so in that sense our dialogue is not very specifically focused. On corruption and transparency, there are also no specific issues there. In Macau, the attractiveness for businesses has to do with the rule of law, the functioning judiciary, transparent rules for public and government procurement. So, we work towards that goal, we advocate for that reason. Macau should join the WTO agreement on government procurement. Joining an agreement like that is very much a signal to the world and to industry around the world of where the government stands. We feel on one or two cases, like the circumvention of duties on shoes and so on, there has been a good response from Macau
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December 23, 2013 April 19, 2013
Interview
city’s European trade endures: EU authorities when we needed information. The [now abolished] extra duty [on shoes] was useful to curb the use – by mainland producers – of Macau as an export origin and [thereby] circumvent the duties we have for them [mainland manufacturers]. The SAR has been removed from the list of territories with reduced or no import tariffs for entry to the European market. How will that impact the city’s shipments to the EU? We don’t think there will be any significant impact. Simply because this preferential scheme is mainly designed for developing and emerging economies, but particularly for developing economies, and Macau is not a developing economy. Macau is not an economy that produces a lot of goods in the overall economic picture. So, the fact that Macau will no longer be part of this preferential scheme will not make any significant difference for Macau.
…it’s not good for the city to be overdependent on one single source of income and we are interested in discussing…what we can do to help diversify
Regarding taxation, there is a new mechanism to exchange information on tax evasion. Have you seen any results so far? We’ve just started the discussion with the Macau government. It’s a top priority for the EU, [for] political as well for economical reasons. It’s a priority we can fulfil only if we have international cooperation. With all these flows of money, we have to do something together if we want to do something about it. Without a doubt, policy around the world is changing towards automatic exchange of information. Not everybody is used to that, I think Macau government will want to study carefully what it means, how to do it, what are the implications. But we see nevertheless the mood on tax cooperation globally has taken a turn and is now more based on the fact that we need this exchange and automatic exchanges without much administrative hassle, because of that we will also get [cooperation] from Asian partners. With the lack of human resources in Macau, and the government’s tight policy on importing labour, are European firms still interested in investing here? It’s definitely on their mind…they are attracted to Macau because
of the dynamics of the economy – success breeds success. I know that firms are dialoguing with the government about what hinders investment and so far I am told that the government has always tried to find ways and solutions to make investments work. Bear in mind you will never see a big European carmaker come to Macau, for obvious reasons. But for specialised smaller or mediumsized firms in the services sector or in other areas, some of them more technological[ly] related, I’m quite positive there are opportunities to explore here with an eye on Hengqin Island. Should the government be more flexible on policy making, to ease foreign investment? The mechanism ought to be an investment promotion agency like IPIM [Macau Trade and Investment Promotion Institute] and its one-stop shop. Part [some] of the hurdles are just administrative procedures and that’s definitely something the government will want to address.
Part of the hurdles are more related to the structure of Macau’s economy. That may require a little bit more [effort]. On the whole, I feel there is a positive mood. Can Macau do more? Definitely. In specific sectors, it can reach out to the European firms, there’s definitely something they could do more, in Macau and in Hong Kong, but also in Europe, some trade and investment promotion work [can be] targeted. There’s no use in going all over the European continent. Regarding intellectual property rights, Macau seems to have legislation in accordance with international conventions, but some problems enforcing it. In practical terms, is Macau up to date on this? We had an issue in the past, which was mostly related to the broadcasting of European content without Macau television operators paying [for] the IPR [intellectual property rights] and fees. The good thing is the Macau government recognised the problem. There’s now an amendment to the law, which will start to be enabled in April.
…you will never see a big European carmaker come to Macau, for obvious reasons
We have a reassurance from the government side that by that time the issue will be resolved. So we’re quite hopeful about that. You will not get any firm bringing in technology and intellectual know-how, unless there is good protection and I think that’s true in Europe, Asia, Hong Kong and Macau. For that reason, it’s also very important for the government to send a very clear message to the world that IPR is protected in Macau and that also the more tech-related industries can come and invest.
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December 23, 2013 April 19, 2013
Macau
Grand Emperor operator buys the Best Western Emperor Entertainment Hotel eyes ‘synergy effect’ with the Taipa hotel Stephanie Lai
sw.lai@macaubusinessdaily.com
HK$900 mln
Price Emperor Entertainment Hotel is paying for the Best Western Hotel Taipa
The owner of the Grand Emperor now has a second hotel in Macau
T
he operator of the Grand Emperor hotel-casino has said it is buying the Best Western Hotel Taipa for HK$900 million (US$116 million).
Hong Kong-listed Emperor Entertainment Hotel Ltd told the Hong Kong Stock Exchange on Friday that it was buying the hotel from Magnificent Estates Ltd.
Magnificent Estates is a Hong Kong-listed property developer which owns and operates three Best Western hotels and a three-star Ramada hotel in Hong Kong. Emperor Entertainment Hotel said the deadline for completion
of the deal was June 20. The company said the Best Western was adjacent to popular tourist spots that would guarantee traffic. The hotel is within a few minutes’ walk of tourist spots such as the Taipa Museum Houses and Old Taipa Village. The 17-storey, three-star hotel opened in 2005. It has a gross floor area of 208,703 square feet and 262 rooms. Emperor Entertainment Hotel said the Best Western could have a synergy effect with its Grand Emperor casino-hotel. The company said the turnover of the Best Western had been nearly 70 million patacas (US$8.76 million) last year and its net profit 32.22 million patacas, 11.5 percent more than the year before. The Best Western used to have a Mocha Clubs slot machine parlour, but the parlour closed last month because the government now bans slot machine parlours in residential areas. The hotel is opposite a cluster of residential buildings. Mocha Clubs has opened a substitute slot machine parlour in a building opposite the Ponte 16 casino in the Inner Harbour district (see page 2). The Grand Emperor, the main asset of Emperor Entertainment Hotel, is a casino-hotel near Nam Van Lake on the peninsula. The Grand Emperor’s casino is run under the gaming licence of Sociedade de Jogos de Macau SA. The casino has 67 massmarket gaming tables and 10 VIP gaming tables.
Chinese conglomerate bids for Fidelidade Deal might not be enough to allow insurer into lucrative casino business Vítor Quintã
vitorquinta@macaubusinessdaily.com
C
hinese conglomerate Fosun International Ltd has bid for the Portuguese insurance firm Companhia de Seguros Fidelidade Mundial SA, which also has a branch here. Fosun is competing against American private equity firm Apollo Management International LLC for the insurance business of Portugal’s Caixa Geral de Depósitos SA (CGD). State-owned CGD, one of Portugal’s biggest financial services conglomerates, is currently going through restructuring and trying to sell-off its three insurance units: Fidelidade, Multicare and Cares. Fosun made a bid for all three units last Monday, said vice president and executive director Liang Xinjun in an interview with Portuguese news agency Lusa. The group made “a pretty attractive offer,” Mr Liang said, without disclosing any concrete figure. “It would be our biggest investment ever in the insurance sector,” he added. Fosun, China’s largest
private-owned conglomerate currently owns shares in three insurers, including an 85 percent stake in Hong Kong’s Peak Reinsurance Co Ltd. Mr Liang emphasised that the group has “a lot of experience in issues related to the restructuring of state-owned companies,” having played a role in the privatisation of 18 such firms. “It is an experience that could help the Portuguese companies. (…) We could, in fact, add value” to CGD’s insurance arm,” the Fosun co-founder said. Mr Liang said he is “confident” of the success of Fosun’s bid and praised the “good communication” with the Portuguese government during the privatisation process. “We hope to win but even if we don’t we will continue to keep a close eye on other investment opportunities in Portugal,” the businessman said. Paulo Barbosa, general manager of Fidelidade’s Macau branch, told Business Daily in July that a sell-off could have a positive impact for the insurer’s operations
Fosun made a ‘pretty attractive offer’ for Fidelidade, says Liang Xinjun
here if the unit’s new owner enjoyed a higher rating. Standard & Poor’s ratings agency has downgraded CGD to a BB-minus rating in July last year due to Portugal’s perilous political and economic situation. That means Fidelidade is unable to grab part of the profitable casino insurance business, Mr Barbosa explained. “The bank syndicates that finance casinos here require that insurers have a rating from Standard & Poor’s of at least A-minus,” he said. Fosun is yet to reach that threshold, though. It currently has a BB+ rating from Standard & Poor’s. Fidelidade’s non-life division has posted a profit of 11.1 million patacas (US$1.4 million) last year, a 26.5-percent increase on 2011. The company had a market share of 5.9 percent. Mr Barbosa said market share had increased to 8.3 percent last year and was “close to 9 percent” in the first quarter of this year. “The company is now fifth in the market in the non-life sector.”
99
December 23, 2013 April 19, 2013
Macau
Shun Tak eyes Hengqin build launch by summer Hotel and office project could be ready by 2017, says Pansy Ho Vítor Quintã
vitorquinta@macaubusinessdaily.com
S
hun Tak Holdings Ltd wants to start building its Hengqin Island development project in the summer of 2014, managing director Pansy Ho Chiu King said on Thursday . The shipping and property conglomerate hopes to complete the construction by 2017, Ms Ho said on the sidelines of the opening of Art Space, a venue for exhibitions and creative events in MGM Macau. Shun Tak has recently concluded the land purchase and has already began discussing the project with the Hengqin authorities, Ms Ho said, quoted by Portuguese news agency Lusa. “There are still many administrative and logistic procedures to handle,” she added. “We will possibly need six more months to submit the project
and obtain all licences and approvals.” The businesswoman gave no details on how much Shun Tak will invest in the project. The conglomerate said in July it would pay 721 million yuan (US$116.7 million) for the land with 23,834 square metres located near the bridge to Macau. “Currently we are still working on the plan: it could be two, three or four buildings, but we will definitely have a hotel, serviced apartments and offices,” she said. In July Shun Tak said in a filing to the Hong Kong Stock Exchange the project would also include commercial spaces. The hotel might not be a five-star hotel, Ms Ho said. One of the possibilities being discussed “is to start the project with a four-star
business hotel,” she added. Shun Tak launched a hotel management company called Artyzen Hospitality Group Ltd to develop its own hotel brands. In April, speaking on the sidelines of the Pacific Asia Travel Association Annual Summit in Bangkok, Thailand, Ms Ho said Shun Tak was looking at “the possibility of building two or three hotels” on a Cotai plot it controls. According to Shun Tak’s 2012 annual report, the firm is still “in discussion” with the government “on its plan to develop five-star hotels on the [Cotai] site”. One of the hotels planned for the project, which in total has a gross floor area of about 248,500 square metres (2.67 million sq feet) could be the “ultraluxurious” Jumeirah Hotel, the report adds.
Pansy Ho says Hengqin project could have four-star business hotel
The project, in a partnership with the Dubaibased hotel chain Jumeirah Group, was originally scheduled to open in 2013.
Shun Tak also said in another filing that it wants to build a hotel at Harbour Mile, a mixed development it plans on Macau peninsula.
10 10
December 23, 2013 April 19, 2013
Greater China
Central bank moves in as cash crunch deepens People’s Bank of China says added over 300 bln yuan over three days Pete Sweeney
C
hina’s central bank sought to allay fears of a cash crunch on Friday, saying it has added US$50 billion in three days to the interbank market, where rates have shot to highs last seen in June when the market seized up. Rapid credit growth in the world’s second-biggest economy in the last four years has worried China’s authorities, who fear rising debt levels are fuelling asset bubbles. The People’s Bank of China (PBOC) said it injected more than 300 billion yuan into China’s interbank market in response to rising rates. But it hinted that banks, too, have work to do if they want to avoid a cash crunch. The PBOC told banks to change their asset and liability structures, an order analysts say is aimed at getting banks to correct a basic mismatch in maturities, where they increasingly rely on short-term funds to make longer-term loans. Authorities also worry that more and more loans are going to speculators through China’s fastgrowing shadow banks, not borrowers with real business needs. Despite the PBOC’s disclosure of its latest intervention on Friday, which experts welcomed as a sign that it is on top of the situation, Nie Wen, an analyst at Hwabao Trust, said Beijing seems to want interbank rates to stay elevated to prod banks into cutting risky loans. “The tight money market condition is partly a result of the central bank’s deliberate push for banks to quicken their deleveraging process,” he said.
Stocks, commodities hit The central bank did not comment directly on liquidity conditions, but signalled that the market has adequate liquidity by noting the level of excess reserves is “relatively high” by historical standards. “The central bank has over three consecutive days, through the use of short-term liquidity operations, collectively injected over 300 billion yuan into the market,” the PBOC said
Rapid credit growth in the last four years has worried China’s authorities
on its Twitter-like Weibo account on Friday evening. “At the same time, we remind major commercial banks to reasonably adjust (their) asset and liability structures.” The interest-rate swap based on the benchmark seven day repo , considered the best indicator of liquidity conditions, on Friday hovered near the record high of 4.99 percent struck the previous day. The seven-day repo average rate also rose to close above 8 percent, the highest level since June 21 and within range of the all-time high of 11.6217 percent hit June 20. The anxiety infected the stock market, where rumours were
beginning to swirl of loan defaults by commercial banks. The CSI300 Index, which tracks the largest listed firms in Shanghai and Shenzhen, slid 2.3 percent on the day and lost 5.3 percent for the week, its worst weekly performance since late February. Demand for commodities was also hit, with spot copper premiums for bonded stocks dropping more than 10 percent this week. Demand for other base metals, including zinc and aluminium, has also weakened due to the cash crunch, trade sources said. The benchmark seven-day bond repurchase contract began rising on Wednesday and the rise accelerated on Thursday.
KEY POINTS Benchmark rate closing in on June peak PBOC in operational challenge: economists CSI300 in biggest weekly fall since February Commodity pricing also hit
Reuters
Tianjin caps car-buying to curb pollution As China’s expanding middle class boost auto sales to the world’s top spot
A
nother Chinese city has capped the total number of car licence plates it will issue annually, state media said yesterday, following moves by Beijing and other metropolises to curb pollution and congestion. The world’s most populous nation is also the world’s largest car-buyer. But it is trying to curb poor air quality and other environmental damages caused by rapid development. Tianjin, a coastal city near
Beijing with 14 million people and 2.36 million registered motor vehicles last year, will cap new car plates to 100,000 a year, the official Xinhua news agency reported. The government will award 60,000 plates by lottery, reserving 10,000 of these for fuel-efficient cars, and auction the remaining 40,000. Of the total plates issued, 88 percent will go to individuals and the rest to companies and other entities,
while government bodies will be ineligible, Xinhua said. Although the details were reported over the weekend, the policy was announced a week earlier and took effect five hours later, sparking “overnight panic buying”, it added. Four other cities – Beijing, the commercial hub of Shanghai, Guiyang in the southwest and Guangzhou in the south – have imposed similar restrictions. Beijing, whose population
tops 20 million, launched a lottery system in 2011 for an annual maximum of 240,000 car registrations. The capital has more than 5.3 million cars on the road, Xinhua said. Demand is so high that applicants have just a 1 in 80 chance, the China Daily newspaper said in October. Guangzhou last year capped registration for small- and medium-sized cars at 120,000. The city of 16 million people had about 2.4 million cars on the road as of May, local media
reported at the time. Starting next March, Tianjin will also restrict a fifth of private vehicles from using the road on workdays depending on their plate number – a practice first introduced in Beijing in 2008. China’s expanding middle class has boosted auto sales to the world’s top spot, with 19.86 million vehicles sold in the first 11 months of 2013. That marked a 13.5 percent rise year-on-year. AFP
11 11
December 23, 2013 April 19, 2013
Greater China
Cathay Pacific orders 21 Boeing 777-9X
China aims for 6mln public homes in 2014
Deal provides Boeing with coveted Asian customer for long-distance jet
C
where Boeing currently builds 777 planes, rejected a contract offer last month, leading the company to consider other places. The deal is worth US$7.9 billion based on Boeing’s published list price for the 406-seat passenger jet but Cathay Pacific said in a filing that the basic price was US$7.464 billion.
hina aims to start building at least 6 million units of public housing next year, state media said on Saturday, reinforcing a government effort to supply more low-cost homes to counter record property prices. But next year’s target is lower than the 2013 objective, even though China built more public homes this year than it had planned, Xinhua said, citing the Ministry of Housing and Urban-Rural Development. The country began building 6.7 million units of public homes this year and has completed 80 percent of them, Xinhua said. The government had intended to start work on 6.3 million units in 2013 and finish building threequarters of them. Large-scale construction of public homes in China not only supports growth in the world’s second-largest economy, it also helps to quell discontent over soaring house prices. Yet some have in the past criticised China’s public homes – also known as affordable housing – as being ineffective because they say good apartments are set aside for officials, leaving poorly built ones for the public. China’s house prices rose at their fastest pace on record last month in defiance of a four-year government campaign to calm an exuberant property market.
Reuters
Reuters
B
oeing Co has won an order from Cathay Pacific Airways Ltd for 21 Boeing 777X jets, valued at more than US$7 billion at current list prices, the United States company said on Friday. Boeing shares rose 1 percent to US$136.68 in early trading on the New York Stock Exchange after news of the order, which confirmed a potential deal earlier reported by Reuters. The deal provides Boeing with a coveted Asian customer for the latest version of its most profitable longdistance passenger jet. The 777X, due for launch in 2020, will be a derivative of Boeing’s topselling wide-body plane with new wings and engines. Cathay Pacific expects to take delivery between 2021 and 2024, the airline said. Industry sources said Cathay Pacific would also increase its fleet of Boeing’s existing model, the 777300ER, by three or four aircraft to meet its medium-term needs. Boeing launched the 777X at the Dubai Airshow last month, where it garnered a record 259 orders and commitments worth US$95 billion at list prices from five Gulf and European airlines.
Cathay Pacific expects to take delivery of its new aircraft until 2024
Reuters reported that Boeing was also closing on a sixth deal with Cathay for around 20 aircraft. The company is yet to decide where to build the 777X, which is expected to be its only new jetliner programme for the next 15 years along with the narrow-body 737 MAX jet due in 2017. Union workers in Washington,
12 12
December 23, 2013 April 19, 2013
Asia
The US$280 million Legoland theme park opened in 2012 in Iskandar
Hopes rise for a shared boom on Malaysia-Singapore border Iskandar development zone betting on cheaper land and labour Shannon Teoh
R
ising from a former palm plantation, the towering Astaka complex will cast its shadow across the Malaysia-Singapore border by 2017, a symbol for an ambitious development zone linking the economies of the two former rivals. Construction cranes are sprouting across southern Malaysia’s Johor state as investment flows into “Iskandar”, a development zone that aims to draw Singaporean capital to its larger neighbour’s cheaper land and labour costs. The zone has been dogged by scepticism since its inception in 2006, due in part to Johor’s reputation in Singapore as a backward hotbed of car thieves. But soaring costs in Singapore are causing a re-think. Anthony Phillips moved his family across the narrow Johor Straits to Iskandar, lured by property prices that are less than half those of Singapore and cheaper schooling. He now commutes to his Singapore communications consultancy, a trip that takes less than an hour. “Last year’s move to Iskandar has been a great success all round. Iskandar offers the best of both worlds,” he said. Authorities say Iskandar – named after a revered former Johor sultan – landed US$40.5 billion in investment commitments by end-October, onethird of the way toward an ambitious 2025 target of US$123 billion. Singaporeans are already a key market for a US$280 million
Legoland theme park that opened in 2012 and brand-outlet shopping. Other projects include a branch of United Kingdom-based movie makers Pinewood Studios and an “Edu-city” bringing together several European universities on one campus. A Singaporean-funded US$1.1 billion Motorsports City being built will include racing circuits, a driving school, and is intended as a regional hub for development of the sport.
Healthy ‘co-opetition’ Bilateral relations have long been prickly. But Ismail Ibrahim, head of Malaysia’s Iskandar Regional Development Authority, notes a “reversal of tide,” saying Iskandar allows each to leverage its strengths amid an uncertain world economy. “We like to describe our relationship with Singapore through this simple term: ‘co-opetition,’” said Mr Ismail, standing beside scale models of the Iskandar area. “We compete, but at the same time we cooperate.” With a world-class financial centre and port, high-tech Singapore’s five million residents create a gross domestic product equal to Malaysia’s 28 million. But soaring prices have crimped competitiveness. A 120-square metre condominium in the centre of Singapore fetches well over US$2 million while the Johor Bahru equivalent rarely tops US$400,000.
Malaysia, meanwhile, views Iskandar as a new inlet for the foreign investment that has been vital to its development. It offers a range of tax breaks and other inducements in Iskandar’s designated 2,217 square kilometres (855 square miles) – three times Singapore’s size – of mostly plantation land. Concerns are rising, however, that Malaysian, Singaporean, and Chinese money is fueling a speculative property bubble while more balanced economic development lags. Johor housing prices have jumped more than 20 percent in the past year, double the national average and causing some local grumbling, yet Iskandar has one of Malaysia’s lowest retail and office occupancy rates. Units in places like Astaka, which at 301 metres (987 feet) will be the tallest residential block in either country, can go for upwards of US$2.5 million.
‘Catalytic’ projects Analysts said recent Malaysian measures to cool speculation would have little impact, especially with huge Chinese developers now eyeing Iskandar. Country Garden, one of China’s top property firms and among a handful of cash-flush Chinese developers in Iskandar, has broken ground on a US$5.6 billion residential township. Of the project’s 9,000 luxury
condominiums, one-quarter were sold to China buyers. Malaysian officials express hope that “catalytic” projects like Legoland and the motorsports facility will stimulate other business growth. “There was a property play in the beginning, now we have to focus on job creation... to migrate to a vibrant economic zone,” said Wan Abdullah Wan Ibrahim, chief executive of Malaysian government-owned UEM Sunrise, a key Iskandar developer. International business consultancy Frost & Sullivan has announced plans to invest US$176 million to house its back-end operations in Iskandar. But few other major corporate names have taken the plunge, causing some concern. Johor business leaders complain the area’s Malaysian labour base is short on skills and that many still prefer better-paying work in Singapore. A speculated linking of Singapore’s mass-transit system with Iskandar has been cited as a potential shot in the arm, but no firm plans have yet emerged. Observers believe, however, that economic fundamentals will ensure the area’s makeover is eventually completed. “Iskandar will succeed because it has to,” said Johor rulingparty parliament member Nur Jazlan Mohamed. “Malaysia needs it economically and Singapore needs it politically to release the cost pressure.”
editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com
AFP
13 13
December 23, 2013 April 19, 2013
Asia
Japan unveils record budget Hyundai selling assets to calm as debt burden mounts investors Budget draft to be submitted to parliament for debate in the new year
H
revenue estimated to rise to 50 trillion yen. This compares with 43 trillion yen estimated for this year’s initial budget. In addition to the sales-levy bump, higher company tax payments as corporate profits rise will also help lift revenue.
yundai Group, owner of South Korea’s secondbiggest shipping company, plans to raise at least 3.3 trillion won (US$3.1 billion) by selling assets to boost cash. Hyundai Group will sell Hyundai Securities Co and two other financial units to raise as much as 1 trillion won, it said in an e-mailed statement yesterday. Hyundai Merchant Marine Co, the biggest shareholder of Hyundai Securities, plans to sell stakes in its terminal business and restructure bulk-carrier operations for about 1.5 trillion won. The group also expects to reap 340 billion won by selling the Banyan Tree Hotel in Seoul, it said in the statement. Hyundai Group’s plan comes three days after Korean Air Lines Co said it plans to raise 3.5 trillion won by selling assets, including refiner S-Oil Corp shares and airplanes. Some South Korean freight companies are running low on cash as weak demand and excessive capacity have caused rates to slump. “While the company has sufficient funds to last until the first half of next year, we’ve decided to come up with a restructuring plan to calm investors’ concerns,” Hyundai Group said in the statement. “We plan to continue restructuring the group next year.” The group plans to seek foreign investment for Hyundai Merchant, and to sell additional Hyundai Elevator Co shares and carry out an initial public offering of Hyundai Logistics Co. Hyundai Group will focus on its shipping, logistics and machinery businesses along with North Korea tourism operations for further growth, according to the statement. Hyundai Merchant plans to sell a container-box yard in South Korea as well as real estate it owns in the United States, China and Singapore. South Korean freight carriers are seeking to pare debt as an expansion after the 2008 global financial crisis pushed them into losses. Hyundai Merchant has 1 trillion won of bonds to pay in the next two years, compared with 678 billion won in cash at the end of September, according to data compiled by Bloomberg.
Bloomberg News
Bloomberg News
Keiko Ujikane
Mr Abe has pledged to revitalise Japan’s economy and achieve fiscal consolidation
J
apan unveiled a record budget for the next fiscal year, as prime minister Shinzo Abe boosts spending on social security, defence and public works while trying to contain the growth of the world’s biggest debt burden. Government ministers and the ruling coalition adopted the 95.88 trillion yen (US$921 billion) budget proposal for the fiscal year starting April 1 at a meeting Saturday in Tokyo, Finance minister Taro Aso told reporters. Japan will issue 41.25 trillion yen of new revenue bonds, Mr Aso said, less than the 42.9 trillion yen earmarked in this year’s initial budget. Mr Abe aims to pull the country out of a 15-year deflationary malaise and cope with the rising welfare costs of its aging population, while containing public debt that’s more than twice the size of the economy. His government has pledged to halve the primary balance deficit by fiscal 2015 and achieve a surplus by fiscal 2020. “The government needs to show that it’s moving in the right direction on fiscal discipline but this budget lacks punch,” said Yoshimasa Maruyama, chief economist at Itochu Corp in Tokyo. “The government must cut spending to reach the planned target of a surplus in 2020.”
The government “will simultaneously achieve the revitalisation of the economy and fiscal consolidation,” Mr Abe said Saturday at the meeting of government ministers and the ruling coalition, adding that the budget draft will be submitted to Parliament in the new year for debate. Japan’s growth slowed for a second straight quarter in JulySeptember, as the initial impulse of Mr Abe’s reflationary policies, dubbed Abenomics, started to fade. While an increase in the sales tax in April will boost revenue, enabling the government to check bond issuance, it is forecast to push the economy into contraction, adding headwinds to Mr Abe’s efforts to drive sustained recovery in the world’s third-biggest economy. Revenue from bond sales will pay for 43 percent of next year’s budget, down from 46.3 percent this year, according to draft budget documents obtained Saturday by Bloomberg News from a government official. Debt-servicing costs – including interest payments for outstanding bond issuance – will rise to 23.3 trillion yen from 22.2 trillion yen this year, the documents show. Japan’s primary balance deficit will improve by 5.2 trillion yen next year, Mr Aso said, with tax
14 14
December 23, 2013 April 19, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 67.20
100.50
31.5
66.75
99.95
31.2
66.30
99.40
65.85
98.85
30.9 30.6
Max 67.20
average 65.885
Min 65.45
Last 65.95
65.40
Max 100.5
average 99.141
Min 98.3
Last 99.9
61.3 61.0 60.7 60.4 60.1 Max 61.25
average 60.316
Min 59.80
Last 60.70
59.8
Max 25.00
average 24.508
Commodities PRICE
DAY %
YTD %
(H) 52W
99.32
0.282714055
6.772737046
BRENT CRUDE FUTR Feb14
111.77
1.341916765
7.388547271
112.5
96
GASOLINE RBOB FUT Jan14
278.31
1.569285792
9.769661592
287.259984
243.1999922
GAS OIL FUT (ICE) Jan14
945.25
1.069232825
5.027777778
968
838.75
4.418
-0.941704036
9.086419753
4.825000286
3.464999914
307.81
1.5673464
3.253832478
320.0099945
278.0799866
1203.24
-0.1966
-27.7099
1696.2
1180.57
NY Harb ULSD Fut Jan14 Gold Spot $/Oz
106.2200012
(L) 52W
WTI CRUDE FUTURE Feb14
NATURAL GAS FUTR Jan14
METALS
85.56999969
19.41
0.1837
-35.5364
32.46
18.2208
Platinum Spot $/Oz
1333.13
0.3296
-12.1641
1742.8
1294.18
Palladium Spot $/Oz
Silver Spot $/Oz
698.75
0.0644
-0.1301
786.5
629.75
LME ALUMINUM 3MO ($)
1785
0.676818951
-13.89290883
2184
1736.25
LME COPPER 3MO ($)
7238
0.520797167
-8.737864078
8346
6602
LME ZINC
2040
2.538326213
-1.923076923
2230
1811.75
14420
1.62085976
-15.47479484
18770
13205
15.44
0.816193275
#N/A N/A
16.77000046
15.12000084
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Mar14
433.25
0.638792102
-28.9171452
618
418.5
WHEAT FUTURE(CBT) Mar14
613.5
0.450266066
-26.23985573
845
607.25
SOYBEAN FUTURE Mar14
1331
0.909780136
1.235976421
1377.75
1174
COFFEE 'C' FUTURE Mar14
115.3
1.362637363
-28.09479264
172.25
104.1499939
SUGAR #11 (WORLD) Mar14
16.45
1.857585139
-20.06802721
20.71999931
15.85999966
CORN FUTURE
Mar14
COTTON NO.2 FUTR Mar14
83.15
-0.21600864
4.70973429
90.61000061
76.65000153
World Stock Markets - Indices NAME
Last 24.55
Max 31.50
average 30.472
Min 30.05
Last 30.45
30.0
25.0
34.3
24.8
34.1
24.6
33.9
24.4
33.7
24.2
Max 34.30
average 33.914
Min 33.55
Last 33.85
33.5
Currency Exchange Rates
NAME ENERGY
Min 24.20
98.30
30.3
COUNTRY MAJOR
0.8923 1.6336 0.8962 1.3673 104.1 7.9871 7.7545 6.0706 62.04 32.61 1.2661 29.949 44.5 12214 92.845 1.22528 0.83685 8.2752 10.9095 142.32 1.03
ASIA PACIFIC
CROSSES
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
0.6543 -0.1955 -0.1674 -0.0731 -0.0576 -0.0138 -0.0155 0.0115 0.1228 -0.4845 -0.1106 -0.4074 -0.1281 -0.0409 -0.6678 -0.0898 -0.1028 0.3746 0.1641 0.0211 0
-14.02 0.9891 2.1424 3.6619 -17.2911 -0.0488 -0.0503 2.6357 -11.3556 -6.2251 -3.5305 -3.0585 -7.8539 -19.8215 -3.7891 -1.4527 -2.5608 -0.6973 -3.475 -20.201 -0.0097
1.0599 1.6484 0.9839 1.3832 104.64 8.0111 7.7664 6.2492 68.845 32.65 1.2862 30.228 44.82 12253 105.433 1.265 0.88151 8.4957 11.0434 142.9 1.032
0.8821 1.4814 0.8833 1.2746 84.22 7.9818 7.75 6.0681 52.89 28.56 1.2195 28.913 40.54 9603 86.41 1.2064 0.80817 7.8281 10.195 110.94 1.0289
0.8821 1.4814 0.8833 1.2746 83.86 7.9818 7.7499 6.0681 52.89 28.56 1.2179 28.913 40.54 9603 86.41 1.2064 0.80817 7.8281 10.195 110.63 1.0289
Macau Related Stocks NAME ARISTOCRAT LEISU CROWN RESORTS LT
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
VOLUME CRNCY
4.52
-0.4405286
43.49206
5.12
3.05
1997638
16.52
1.975309
54.82662
17.38
10.45
1997248
AMAX INTERNATION
1.46
-5.806452
4.285716
2.12
0.75
9404375
BOC HONG KONG HO
24.5
-0.203666
1.659749
28
22.85
7117229
CENTURY LEGEND
0.42
-5.617978
58.49057
0.68
0.26
1868000
CHEUK NANG HLDGS
7.02
0
17.19533
7.28
4.95
47000
22.15
-2.207506
-4.112556
25.6
17.7
36769327
CHINESE ESTATES
22.9
-1.079914
103.6361
23.8
10.334
151500
CHOW TAI FOOK JE
11.16
-4.615385
-10.28939
13.4
7.44
7598274
EMPEROR ENTERTAI
3.87
-3.25
104.7619
4.66
1.79
1440000
FUTURE BRIGHT
3.78
-0.2638522
211.8745
4.13
1.172
2864000
GALAXY ENTERTAIN
65.95
-2.656827
117.2982
70.4
29.5
11449520
124.9
1.37987
5.223255
132.8
110.6
1166373
25.7
-0.1941748
-22.70677
35.3
23.2
646500
82
-0.06093845
0.8610048
90.7
77.85
10010463
CHINA OVERSEAS
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
16221.14
0.2599653
23.78638
16287.83984
12883.89
NASDAQ COMPOSITE INDEX
US
4104.741
1.148459
35.94048
4111.926
2951.036
FTSE 100 INDEX
GB
6606.58
0.3322854
12.01751
6875.62
5873.43
HANG SENG BK
DAX INDEX
GE
9400.18
0.6902506
23.48526
9424.83
7418.36
HOPEWELL HLDGS
NIKKEI 225
JN
15870.42
0.07062138
52.67096
15942.6
9924.42
HSBC HLDGS PLC
HANG SENG INDEX
HK
22812.18
-0.3345312
0.6852642
24111.55078
19426.35938
CSI 300 INDEX
CH
2278.136
-2.326949
-9.70355
2791.303
2023.171
TAIWAN TAIEX INDEX
TA
8408.53
0.01344054
9.208783
8501.769531
KOSPI INDEX
SK
1983.35
0.3897451
-0.6860155
S&P/ASX 200 INDEX
AU
5265.217
1.21073
JAKARTA COMPOSITE INDEX
ID
4195.556
FTSE Bursa Malaysia KLCI
MA
NZX ALL INDEX PHILIPPINES ALL SHARE IX
HUTCHISON TELE H
2.83
10.98039
-20.50562
4.66
2.5
55572006
LUK FOOK HLDGS I
28.95
-1.864407
18.64754
31.5
16.88
2850400
MELCO INTL DEVEL
26.55
-4.151625
194.6726
29.15
8.9
5932100
7520.62
MGM CHINA HOLDIN
30.45
-1.774194
129.3219
33.3
13.146
7543421
2063.28
1770.53
MIDLAND HOLDINGS
3.66
-2.139037
-1.081082
4.29
2.68
13868000
13.25604
5457.3
4611.2
-0.8606846
-2.806107
5251.296
3837.735
1838.03
-0.4414521
8.826791
1851.94
NZ
987.152
-0.3894003
11.91527
PH
3589.89
-1.215989
-2.949194
NEPTUNE GROUP
0.295
0
94.07895
0.4
0.131
71427500
NEW WORLD DEV
9.76
-0.1023541
-18.802
15.12
9.72
11838412
SANDS CHINA LTD
60.7
-1.300813
78.79234
65.9
33.5
11531741
1597
SHUN HO RESOURCE
1.57
-0.6329114
12.14286
1.92
1.33
0
1048.998
875.665
SHUN TAK HOLDING
4.57
-0.4357298
9.069211
4.8
3.27
3573006
4571.4
3440.12
SJM HOLDINGS LTD
24.55
-1.008065
38.32811
28
17.04
6262199
8.81
18.57335
-37.42898
14.46
7.38
44786650 5825991
Euromoney Dragon 300 Index Sin
SI
590.86
-0.45
-4.87
NA
NA
STOCK EXCH OF THAI INDEX
TH
1342.72
-0.2903544
-3.535385
1649.77
1260.08
HO CHI MINH STOCK INDEX
VN
504.45
-0.3614601
21.92734
533.15
Laos Composite Index
LO
1259.54
0
3.685473
1455.82
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
SMARTONE TELECOM WYNN MACAU LTD
33.85
-2.729885
61.57517
36.9
19
ASIA ENTERTAINME
#N/A N/A
#N/A N/A
#N/A N/A
#N/A N/A
#N/A N/A
0
394.27
BALLY TECHNOLOGI
76.01
2.260191
70.00671
78.03
43.57
726018
1199.5
BOC HONG KONG HO
3.18
1.597444
3.583064
3.6
2.99
159093
GALAXY ENTERTAIN
8.538
-2.977273
115.063
9.15
3.8
9022
INTL GAME TECH
17.44
1.101449
23.07692
21.2
13.58
4222359
JONES LANG LASAL
100.2
0.3806852
19.37098
102.14
80.86
407082
LAS VEGAS SANDS
76.57
-0.6745363
65.87955
78.13
44.444
4923879
MELCO CROWN-ADR
37.85
-1.174935
124.7625
39.42
16.13
5314011
MGM CHINA HOLDIN
3.97
-1.732673
126.8194
4.2
1.7651
16000
MGM RESORTS INTE
22.72
0.4865104
95.189
22.82
11.27
11529372
SHFL ENTERTAINME
23.19
#N/A N/A
59.93103
23.25
13.3701
344231
SJM HOLDINGS LTD
3.16
-1.557632
38.74156
3.6
2.2
157800
185.35
0.1296526
67.79554
187.35
106.966
1534641
WYNN RESORTS LTD
AUD HKD
USD
Hang Seng Index NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AIA GROUP LTD
37.8
-0.7874016
20636573
CHINA UNICOM HON
11.46
-1.546392
29507459
ALUMINUM CORP-H
2.69
1.509434
12012092
CITIC PACIFIC
11.88
0
8624420
SANDS CHINA LTD
CLP HLDGS LTD
60.35
0
4073235
SINO LAND CO
CNOOC LTD
14.14
-0.1412429
71865605
SUN HUNG KAI PRO
10.5
0.7677543
6371447
SWIRE PACIFIC-A
15.16
-2.944942
7865196
TENCENT HOLDINGS
BANK OF CHINA-H BANK OF COMMUN-H BANK EAST ASIA BELLE INTERNATIO
3.5
-0.5681818
361218848
5.35
-0.5576208
32632750
32.35
0
790158
8.83
0
160843238
NAME
COSCO PAC LTD ESPRIT HLDGS
24.5
-0.203666
7117229
HANG LUNG PROPER
15.98
1.524778
3920000
HANG SENG BK
CHEUNG KONG
121
1.510067
2526986
HENDERSON LAND D
CHINA COAL ENE-H
4.42
-0.6741573
31627880
CHINA CONST BA-H
5.83
-0.1712329
409548055
CHINA LIFE INS-H
23.45
-2.697095
68961908
CHINA MERCHANT
27.6
-1.953819
4752843
BOC HONG KONG HO CATHAY PAC AIR
CHINA MOBILE
PRICE
DAY %
61
1.75146
VOLUME 4917109
60.7
-1.300813
11531741
10.48
0
23292141
97.05
0.2582645
2957810
90.6
1.172529
987159
463.6 -0.04312204
4464857
24
0
6075900
TINGYI HLDG CO
22.5
-2.173913
1.37987
1166373
WANT WANT CHINA
10.62
-0.7476636
9634516
43.7
0.2293578
2408545
WHARF HLDG
59.95
0.4187605
3401569
HENGAN INTL
92.15
1.208127
3373641
17.44
-0.456621
14308369
HONG KONG EXCHNG
128.5
-0.6187162
4438261
82 -0.06093845
10010463
79.9
0.566394
24961431
HUTCHISON WHAMPO
102.2
0.7889546
5301519
22.15
-2.207506
36769327
IND & COMM BK-H
5.19
0
382057340
CHINA PETROLEU-H
6.19
-0.96
100269557
LI & FUNG LTD
9.89
1.748971
21553778
CHINA RES ENTERP
25.65
0.7858546
1429333
MTR CORP
28.8
0.173913
1944257
CHINA OVERSEAS
POWER ASSETS HOL
124.9
HONG KG CHINA GS HSBC HLDGS PLC
NAME
MOVERS
15
28
2881189
7 23405
INDEX 22812.18 HIGH
23404.45
LOW
22728.15
CHINA RES LAND
19.24
-0.9268795
6958200
NEW WORLD DEV
9.76
-0.1023541
11838412
52W (H) 24111.55078
CHINA RES POWER
17.82
-0.6688963
5194000
PETROCHINA CO-H
8.44
-0.4716981
70020312
(L) 19426.35938
CHINA SHENHUA-H
23.7
-1.25
19201683
PING AN INSURA-H
67.1
-4.619758
45971003
22728
18-December
20-December
15 15
December 23, 2013 April 19, 2013
Opinion Business
wires
Leading reports from Asia’s best business newspapers
Myanmar Times An expected drop in import costs set for January has left thousands of imported vehicles sitting in containers at Yangon Port as dealers fear that bringing them into the market could result in losses. Officials said that sellers are expected to impose a reduction in transportation and insurance costs to dealers termed Cost, Insurance and Freight charges. Dealers, in expecting a better rate for imported cars next month, have opted for the time being to hold out on making purchases. Rumours of a rate change have driven demand down at car sales centres, which are also chock-full of vehicles.
The looming lost decade Ashoka Mody
Former mission chief for Germany and Ireland at the International Monetary Fund, currently Visiting Professor at Princeton University
necessary healing. Countries now seem to think that monetary-policy measures are their only option. But, whereas fiscal stimulus boosts growth at home and abroad, enabling mutual reinforcement through world trade, monetary policy is guided primarily by domestic goals, and, in the short term, one country’s gain can be another’s loss.
Yomiuri Shimbun
Elusive goal
The number of foreign visitors to Japan in 2014 is expected to increase 14.3 percent from the previous year to 11.8 million, hitting a record high for the second consecutive year, the travel agency JTB Corp. has said. The expected growth will be backed by the yen’s weakness, which makes trips to Japan less costly for foreigners. The registration of Mount Fuji, Japan’s tallest mountain, and washoku traditional cuisine on UNESCO’s World Heritage list is expected to give an additional boost. The number of visitors from mainland China is expected to increase about 15 percent.
Philippine Inquirer Global coconut oil supplies will likely fall next year, an industry official said Friday, after the killer typhoon that struck leading exporter the Philippines last month destroyed millions of trees used to produce the commodity. The Philippines provides more than 40 percent of the world’s coconut oil and the areas hit by supertyphoon Haiyan account for 10 percent to 15 percent of the country’s output, said Yvonne Agustin, executive director of the industry group United Coconut Association of the Philippines. “The effect will be seen next year, especially in terms of exports of coconut oil,” she said.
Economic Times The Indian and US economies are so inter-twined that they cannot afford any distrust from the diplomatic row between the two countries to affect their mutual business interests, according to industry body Assocham. “Almost all top American brands from Pepsi, Coke and McDonalds to General Motors, Boeing to Microsoft are well-entrenched into the Indian economy that is set to only grow in terms of the consumption story of its young population,” Assocham said. Over 95 per cent of India’s beverages market is dominated by American drink makers. India sells 60 per cent of its US$75 billion software and IT-enabled services to the US.
A
s 2013 comes to an end, it looks like the world economy will remain stuck in low gear. For those reading the tea leaves of global recovery, the thirdquarter GDP numbers offered no solace. While the United States is ahead of the pack, some of its gains could soon be lost, as accumulating inventories begin eroding profits. Despite glimmers of hope, the eurozone and Japan are struggling to cross the 1 percent threshold for annual economic growth. And the major emerging economies are all slowing, with Russia practically at a standstill. Not surprisingly, a catchphrase in economic-policy debates nowadays is “secular stagnation,” the idea that excess savings chronically dampen demand. The economist Robert Gordon has also argued that the world is low on economically productive ideas. But before we despair, there is work to be done. The coordinated fiscal stimulus that saved the world from economic collapse in 2009 disappeared too quickly, with governments shifting their focus to domestic politics and priorities. As domestic policy options have been exhausted, economic prospects have dimmed. A renewed emphasis on stimulus must be augmented by global coordination on the timing and content of stimulus measures. The crisis was and remains
global. Trade data tell the story: after increasing by about 7 percent annually in the decade before 2008, world trade fell faster than global GDP in 2009 (and more sharply than during the Great Depression). Once the brief stimulus-fuelled recovery faded, growth in world trade again slowed quickly, falling to 2 percent year on year over the past 18 months. Disappointing export performance is largely responsible for the recent weakening of economicgrowth prospects.
Not fully healed At the end of 2008, when the scale of the impending economic destruction was not yet apparent, Olivier Blanchard, the International Monetary Fund’s chief economist, boldly called for a global fiscal stimulus, stating that, in these “not normal times,” the IMF’s usual advice – fiscal retrenchment and public-debt reduction – did not apply. He warned that if the international community did not come together, “vicious cycles” of deflation, liquidity traps, and increasingly pessimistic expectations could take hold. Fortunately, world leaders listened, agreeing in April 2009 at the G-20 Summit in London to provide a total of US$5 trillion in fiscal stimulus. The U.S. and Germany added stimulus amounting to about 2 percent of GDP. And China’s banks pumped
More public investment is twice blessed. It can shake the world out of its stupor; and it can safeguard against “secular stagnation”
massive amounts of credit into the country’s economy, enabling it to sustain import demand, which was critical to the global recovery. But hubris rapidly set in, and parochial interests took over. Before the wounds had fully healed, the treatment was terminated. The worst offenders were the U.S. and Germany, which shirked the responsibility to protect the global common good that accompanies their status as economic hegemons. The United Kingdom, with its contrived rationale for fiscal austerity, was not much better. Fiscal stimulus by these three countries – together with smaller contributions from France and China – could have continued the
America leads the world in monetary-policy ambition. The researchers Cynthia Wu and Fan Dora Xia estimate that the U.S. Federal Reserve’s openended asset purchases (socalled quantitative easing, or QE) have led to an effective U.S. policy rate of -1.6 percent. QE helped American exports by weakening the dollar relative to other currencies. Once the Japanese engineered their own QE, the yen promptly depreciated. That has kept the euro strong. The weakest of the “big three” developed economies – the eurozone – has thus been left with the strongest currency. In the third quarter of 2013, Germany’s export growth slowed and French exports fell. After a spike earlier in the year, Japan’s exports have also contracted. Only U.S. exports have maintained some traction, thanks to the weaker dollar. In the 1930’s, after the gold standard broke down, world leaders could not agree on coordinated reflation of the global economy. In his book Golden Fetters, the economist Barry Eichengreen argued that the lack of coordinated action dragged out the global recovery process. Such delays are costly, and risk allowing pathologies to fester, prolonging the healing process further. Now, despite unfavourable political circumstances, Blanchard should make an even bolder call. These are still not “normal” times, and the “vicious cycles” persist. Another global fiscal stimulus – focused on public investment in infrastructure and education – would deliver the adrenaline shot needed for a robust recovery. More public investment is twice blessed. It can shake the world out of its stupor; and it can safeguard against “secular stagnation”. The U.S., Germany, the United Kingdom, France, and China should act together to provide that boost. Otherwise, a sustainable global recovery may remain elusive, in which case 2014 could end in low gear as well. © Project Syndicate
16 16
December 23, 2013 April 19, 2013
Closing SoftBank eyes T-Mobile deal
Fannie Mae guarantee-fee rise to be delayed
SoftBank Corp chief executive officer Masayoshi Son is exploring a deal for Sprint Corp to buy the majority of T-Mobile US Inc in 2014 and has discussed financing a bid with several banks, people familiar with the matter said. Mr Son is looking for about US$20 billion, said the people. The plan would be to take control of T-Mobile by paying cash for the 67 percent stake owned by Deutsche Telekom AG, said the people. Sprint would then be integrated with T-Mobile, combining the third- and fourth-largest United States wireless carriers.
United States representative Mel Watt, who will leave Congress to become regulator of Fannie Mae and Freddie Mac, said he would delay a planned increase in the fees the American-owned companies charge to guarantee mortgages. Mr Watt, who is scheduled to be sworn in on January 6, said he needs time to evaluate fee increases announced this month by Edward J. DeMarco, the agency’s acting chief. The announcement follows complaints by mortgage bankers that the higher fees set to take effect in March and April were too steep and sudden.
South Sudan oil flow unaffected by fighting Even as petroleum firms started pulling staff out amid killings Ian Timberlake
T
he flow of oil from South Sudan through northern pipelines has been unaffected by a week of fighting on southern soil, Juba’s ambassador to Khartoum said yesterday. “Nothing happened to the oil,” ambassador Mayen Dut Wol told AFP on the sidelines of a news conference. “So oil is flowing and up to this morning I was talking with the minister of petroleum and oil in Southern Sudan and he told me that nothing has happened to petroleum facilities.” Oil is “flowing peacefully”, the ambassador said, as envoys from the United States and Nigeria prepared to fly into the South as part of efforts to avert all-out civil war. Petroleum companies have started pulling staff out of South Sudan’s oil-rich Unity state, which borders Sudan, after several local oil workers were singled out on ethnic grounds and killed last week. There has also been fighting in and around Bentiu, the capital of Unity state where Chinese and Malaysian firms are among those operating in the oilfields.
Foreigners are leaving South Sudan after oil workers were killed last week
On Saturday, a key army commander in control of Unity state defected to join the rebel forces of Riek Machar, the fugitive former vice president. However, army spokesman Philip
Aguer insists that troops loyal to president Salva Kiir remain in control of the area. Oil production forms more than 95 percent of South Sudan’s fledgling economy.
Fees paid by South Sudan to send its oil for export through northern pipelines are also a significant revenueearner for cash-strapped Sudan. On Friday, Information minister Ahmed Bilal Osman expressed concern that the South’s oilfields will become victims of the fighting between the two opposing factions. “Definitely one of the targets of the two powers, will (be to) try to take over the oilfields,” perhaps as a way to improve their bargaining position, he told AFP. “It’s a struggle for wealth and power.” Sudan is to receive an estimated US$1.5 billion in fees from South Sudan next year for moving its crude through Sudanese infrastructure to the Red Sea shipping terminal. The South became independent less than three years ago under a 2005 peace deal that ended 23 years of civil war. It separated with roughly 75 percent of the 470,000 barrels per day of crude produced by the formerly unified country, while refineries and export pipelines stayed under Khartoum’s jurisdiction. On Saturday, a senior oil ministry official in Khartoum said all the South Sudanese oil passing through Sudan’s infrastructure is sold abroad. “We don’t take from them any oil,” Hisham Taj Elsir said, adding Sudan’s own production of about 130,000 barrels per day provides more than enough for domestic petrol consumption. “We have a surplus,” he said. Diesel, however, is supplemented by imports and another ship arrived with more of the fuel on Saturday, he said. AFP
China steel output growth slower in 2014: industry
C
hina’s total crude steel output is likely to increase to 800 million tonnes in 2014 but growth will slow to 2 to 3 percent on the year, the head of its steel association said, with the government trying to tackle over capacity. China imports about two thirds of global seaborne iron ore supplies and big mining firms like Rio Tinto have banked on rising demand from the world’s biggest steel producer to justify their own big expansion plans. But Beijing has drawn up a series of guidelines aimed at tackling a huge domestic steel surplus that has inflated global iron ore prices and eroded margins on the domestic market, causing hundreds of firms to suffer losses. Next year’s growth rate is already expected to be much slower than 2013.
Zhang Changfu, secretarygeneral of the China Iron and Steel Association, said total crude steel output was likely to end this year at 782 million tonnes, up 9 percent from 2012, according to a report by the official Xinhua news agency. Total output over the first 11 months of the year hit 712.8 million tonnes, up 7.8 percent on the year, China’s iron ore imports rose 10.9 percent over the same period to reach 746.1 million tonnes. The government issued policies in October to try to rein in its bloated steel industry, vowing to bring market discipline and tougher technological and environmental standards to a sector cosseted by years of soft loans and local government protectionism. Reuters