Year II
Number 444 Monday December 30, 2013
Editor-in-chief Tiago Azevedo
Deputy editor-in-chief
Vitor Quintã
MOP 6.00
‘Macau land for Macau people’ could create mess: study
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April 19, 2013
Ex-PBOC bosses talk up Paradise An asset management company led by two former bosses at China’s central bank has written a report talking up the prospects of Hong Kong-listed casino equipment maker Paradise Entertainment Ltd. The report by Oriental Patron, a Hong Kong-based firm with more than HK$10 billion (US$1.3 billion) in assets under management suggests Paradise’s sales – via its LT Game brand – are due to “soar” in 2014. Page 4
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eserving housing for Macau permanent residents would inevitably increase competition between economic sectors for the city’s limited supply of land, a study suggests. The government is considering a ‘Macau land for Macau people’ policy by reserving housing in some areas of the city for sale only to permanent residents. Macao Polytechnic Institute was asked to report on the idea. “It would be very difficult to clean up the mess if the housing market changed dramatically,” Edmund Li Sheng of the institute’s Gaming Teaching and Research Centre told reporters last week. Any flats built as part of a land reserve policy should have a price cap of 3,000 patacas (US$375.6) per square foot, says the General Union of Neighbourhood Associations. More on page 2
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Rent control proposal back in the assembly
Visitors likely to top 29 mln this year
The Legislative Assembly will on Thursday discuss a new draft law aimed at controlling home and shop rent rises in light of the current property market bubble. Assembly member José Pereira Coutinho, who submitted the bill along with fellow legislator Leong Veng Chai, is “confident” the draft could get past the assembly despite a first failed attempt earlier this year. “It is particularly difficult for the youths and the middle class to rent a house in the current market,” Mr Pereira Coutinho told Business Daily.
Hang Seng Index 23280
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December 27
The number of visitors to Macau is expected to hit 29 million this year after a 2.5-percent increase last month from a year earlier, official data show. More than 2.43 million people visited Macau last month, with the number of mainland Chinese increasing by 2.9 percent to 1.55 million, data from the Statistics and Census Service showed on Friday.
HSI - Movers Name
Page 6
Greek Mythology Casino ‘unaffected’ by hotel seizure
Create gaming policy advisory body: forum
The seizure – by a creditor – of the New Century Hotel, Taipa, will not affect the operation of Greek Mythology Casino inside the hotel grounds says Amax International Holdings Ltd. “The company would like to clarify that the operation of the hotel and Greek Mythology is separated [sic],” said a December 27 filing by Macau casino junket investor Amax to the Hong Kong Stock Exchange.
The city needs a consultation body – with membership drawn from across the community – to review public policy regarding the gaming industry says Billy Song Wai Kit, director-general of Macau Responsible Gaming Association. The call comes in the wake of the controversial relocation of a slot parlour in the Inner Harbour area. Such a body should include representatives from government, gaming operators, scholars, and community associations, he suggested in a weekly television discussion programme called Macau Forum organised by public broadcaster TDM.
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%Day
TENCENT HOLDINGS
2.98
CHINA MERCHANT
1.43
COSCO PAC LTD
1.33
WANT WANT CHINA
1.07
BANK EAST ASIA
1.07
SANDS CHINA LTD
-0.64
CHINA COAL ENE-H
-0.67
KUNLUN ENERGY CO
-0.72
WHARF HLDG
-1.66
HANG LUNG PROPER
-1.84
Source: Bloomberg
I SSN 2226-8294
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2013-12-30
2013-12-31
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12˚ 18˚
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December 30, 2013
Macau
Study finds reserved housing may fan competition for land Copying Hong Kong’s model could cause more speculation, the Macau Polytechnic Institute says Stephanie Lai
sw.la@macaubusinessdaily.com
R
eserving housing for Macau permanent residents would inevitably increase competition for the city’s limited supply of land, a study report says. The government is thinking about turning the slogan ‘Macau land for Macau people’ into policy by reserving housing in some areas for sale only to permanent residents. The Macau Polytechnic Institute was commissioned a study of the idea, and the Housing Bureau posted the study report on its website on Friday. The institute proposes three options. It says a reserved housing scheme could be an adjunct of the arrangements for selling public housing at subsidised prices, or copy a similar scheme in Hong Kong. Whichever option the government chose, it would have to consider the competition for land intended for reserved housing and public housing, the study report says. One of the researchers that took part in the study, Edmund Li Sheng of the Macau Polytechnic institute’s Gaming Teaching and Research Centre, advises caution in setting up a reserved housing scheme. “It would be very difficult to clean up the mess if the housing market changed dramatically,” Mr Li told reporters on Thursday. “So we should consider, from a sustainable development perspective, implementing this more sustainably,” he said. The first option the institute proposes would be to reserve housing for permanent residents that “had not been home owners for a period of time” and that could not afford to buy homes in the private housing market yet earned too much to be eligible to buy homes in public housing at subsidised prices.
Kai Fong eyes price limit on reserved housing T
he price of the flats to be built under the proposed policy of reserving home sales in some areas for Macau permanent residents should be capped at 3,000 patacas (US$375.6) per square foot, says the General Union of Neighbourhood Associations. Leong Heng Kao, vice president of the association, said the price should
The five new land reclamations have been earmarked for reserved housing (Photo: Manuel Cardoso)
The government would make the financial limits on eligibility for reserved housing looser than the limits on eligibility for subsidised housing. The government sets limits on the income and assets of buyers of subsidised housing. The study report concedes that it would be hard to set such limits at the moment. The report also acknowledges that it would be hard to set criteria for deciding who could not afford to buy a home in the private housing market.
not be set halfway between the prices of the affordable housing and the private market. “When calculating the profit and expenses, I assume the [construction] cost [of reserved housing] to be 2,000 patacas,” he said, quoted by TDM News. “If the property developers are not willing to use this standard, the government should take over its role,” Mr Leong added. “The price per square foot should be between 2,500 and 3,000 patacas, and each Macau resident should be restricted to buy one” flat, he said. Mr Leong said the association, known as ‘Kai Fong’ in Cantonese, would release its opinion on this policy, better known as ‘Macau land for Macau people’, next month. The average home price reached 6,923 patacas per square foot in the first 10 months of this year, according to Business Daily calculations on data from the Financial Services Bureau. V.Q.
Buyers of reserved housing would be prohibited from selling their homes for up to 10 years. Buyers of subsidised housing must keep their homes for 16 years before selling them. The government would build the reserved housing and decide how to sell it, but would not help the buyers financially. The second option would be to set no financial limits on eligibility for reserved housing. The government would set the price of reserved housing at 70 percent to 80 percent of the price of housing in the private market. Buyers would be prohibited from selling their homes for up to eight years. The government would help the buyers financially, namely by allowing them to mortgage their homes to a greater degree than other homeowners or by levying housing tax at a reduced rate.
Least govt intervention The first two options would prohibit one-person households, owners of subsidised housing or recipients of other sorts of government housing assistance from buying reserved housing. Both options have similarities to the arrangements for selling public housing at subsidised prices, including deciding who gets to buy a home by drawing lots. The third option would be a reserved housing scheme based on the Hong Kong model. The developer would decide the size of the flats, their price and how to sell them, but would be prohibited from keeping any flats to let.
KEY POINTS Buyers should be ineligible for public housing Hong Kong-type scheme would be easiest Hong Kong-type scheme’s fairness questionable Private market for housing would be little affected
Owners of subsidised housing would be allowed to buy reserved housing. Buyers would be prohibited from selling their homes to companies or associations. The study report says this option would be the easiest to take and require the least government intervention. But the fairness of the allocation of public resources would be questionable, and this option could lead to more property speculation, the report says. The institute thinks the law would permit a viable reserved housing scheme. A reserved housing scheme would have insufficient beneficiaries to have much effect on the market for private housing, the study report says.
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December 30, 2013 April 19, 2013
Macau
Rent control proposal back in the assembly
opinion
On small dogs and white lies
No rental hikes in first two years of contract would cover homes, shops Tony Lai
tony.lai@macaubusinessdaily.com
T
he Legislative Assembly will discuss on Thursday a new draft law aimed at controlling home and shop rent rise as the city’s property market remains red-hot. Assembly member José Pereira Coutinho, who submitted the bill along with fellow legislator Leong Veng Chai, is “confident” the draft could get past the assembly despite a first failed attempt earlier this year. “It is particularly difficult for the youths and the middle class to rent a house in the current market,” Mr Pereira Coutinho told Business Daily. “It is a social problem that requires an urgent solution.” The proposal would allow no increases in rent during the first two years of a lease, and subsequently allow no increases greater than the annual rate of inflation in the previous 12 months. According to the Civil Code, home rental contracts should last at least two years. During that period, rents can only be raised with the tenant’s approval. This draft bill would apply to all property types instead of only limited to homes, unlike the motion Mr Pereira Coutinho first proposed in March – and which was rejected. “We have received a lot of complaints that the micro, small and medium enterprises find difficulties in maintaining their operations with the soaring rents,” the legislator explained. The government keeps no data on the property rents. The city’s consumer price index says household spending on home rents surged 15.3 percent last month from a year earlier. Mr Pereira Coutinho said he is “confident” the bill will pass even though most of the assembly members are business people.
Michael Grimes
michael.grimes@macaubusinessdaily.com
T
he luxury of leaving a job is that you might actually be able to say what you really think. Yao Jingyuan – not to be confused with the Olympic gold medal-winning weightlifter of the same name – made lavish use of that privilege last week. This Mr Yao was chief economist and spokesman of China’s National Bureau of Statistics until 2011. “Banking in China has become like a highway toll system,” he stated at a summit on China’s economy held at Nanjing University. “Banks charge every time money goes through them. “With this kind of operational model, banks will continue making money even if all the bank presidents go home to sleep and you replaced them by putting a small dog in their seats.” Meow. Applying that same principal – as we slouch, coughing and spluttering toward a haze-free 2014 – is my take on what Macau’s leaders of government and industry might really say if they had the luxury of retirement/freedom.
Fernando Chui Sai On, Macau’s Chief Executive
Household spending on home rents surged 15.3 percent in November from a year earlier
The legislator said he asked for the opinion of the Macau Civil Servants Association – of which he is the president – and “nine and a half out of every 10 people” support this bill. The success of the proposal depends on the government, which could “influence” the votes of the chief executive-appointed members, which make up seven of the 33 seats, Mr Pereira Coutinho said. The rent control bill proposed earlier this year could only earn the
support from four of the 20 legislators attending that assembly session. Some legislators said they were voting against the bill because they feared not having enough time to discuss it before the assembly was dissolved ahead of the September election. This second draft says anyone breaching the proposed rules could face a fine of up to 200,000 patacas (US$25,000) and a jail sentence of up to three years.
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What he said (in paraphrase): ‘I’m stepping down because I’ve reached retirement age.’ What he wanted to say: “Don’t you like the new 30 square metre public flats at Seac Pai Van?”
José Chan Fai Man, head of the Computer Service Centre at the Macao Polytechnic Institute What he said: “The IT infrastructure standard in the city lags behind other places like Hong Kong.” What he wanted to say: “Please ask the tech guys at Channel 1 to leave a post-it note in the master control room to switch the Englishlanguage football commentary back to English after the half time break.”
The Infrastructure Development Office, commenting on fresh delays to the Pac On ferry terminal at Taipa
Macau Cable TV Ltd, commenting on the administration’s idea for cleaning up the mess caused by years of signal theft
Real estate becoming ‘another key contributor’ for economic growth The city’s overdependence on the gaming sector has been met with repeated calls for economic diversification from the central government. Chinese President Xi Jinping told Chief Executive Fernando Chui Sai On earlier this month that Macau has to put more effort into improving its economic structure. It was the second time Mr Xi has asked for economic diversification since he succeeded Hu Jintao as the new Chinese leader in March. Zeng Zhonglu, associate professor of gaming at Macao Polytechnic Institute, said on the sidelines of a study released on Friday that gaming could take up half of all economic
Tam Kuong Man, Housing Bureau director
What it said: “We are now working hard with all departments in order to get this project done by the second half of 2014.” What it wanted to say: “We’ve just been given the mother of all bollockings about why – nine years and 3.28 billion patacas [US$411 million] later – we still haven’t opened the bloody thing fully.”
City more reliant on gaming for growth he city’s reliance on the gaming sector to support its economic growth grew slightly last year despite repeated calls for diversification from Beijing. The Statistic and Census Service announced on Friday that gaming accounted for 45.9 percent of the territory’s gross domestic product last year, slightly up from 45.4 percent in 2011. Gaming, hotels, restaurants and the retail sector accounted for 61.5 percent of Macau’s economic growth last year, up from 60.6 percent in 2011. “The tourism and gaming sector played a predominant role in the economy of Macau,” the statistics bureau acknowledged.
What he said: “I’m going to ponder my re-election”. What he wanted to say: “Jeepers, do you guys in Macau ever stop moaning? I’m doing the best I can for pete’s sake.”
growth this year. But he believes the situation could improve in the next five to eight years, after more integrated resorts open in Cotai starting 2015. The statistics bureau said the gaming sector’s contribution to the economy surged by 18.5 percent last year. But the real estate sector was the one that surged the most, up by 24.9 percent, “due to the increase in property prices,” the bureau added. The property sector took up 7.1 percent of the economy last year, up from 6.6 percent in 2011, becoming “another key contributor to economic growth other than the tourism and gaming sector”, said the bureau. T.L.
What it said (in paraphrase): ‘A government proposal to provide a basic, free-to-air television service would distort competition and lead to poor quality pay-television services.’ What it wanted to say: “We know it’s hard to believe that pay-TV in Macau could get any worse… what with our crappy decoders, dodgy picture quality, rubbish channel selection and complete lack of ‘on demand’ programming… but we’ve waited so long for the government to enforce the law and get rid of the pirates, that we have to make our money back somehow.”
Chan Wai Sin, Health Bureau deputy director
What he said (in paraphrase): ‘We’re studying whether casinos failing the second round of air quality tests will after all face reductions in the size of their smoking areas.’ What he wanted to say: “Most of the venues that failed weren’t American, so we’ll keep stalling on punitive action until we get our act together with the smoking lounge idea.” Season’s Greetings.
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December 30, 2013
Macau
We’re confident that by next year the market share for our electronic gaming tables will go up because the revenue these machines generate is more than [that from] slot machines Jay Chun, chairman of Paradise Entertainment
Ex-PBOC bosses talk up Paradise Casino equipment firm ‘secured monopoly position’ in Macau claims research report Michael Grimes and Stephanie Lai newsdesk@macaubusinessdaily.com
A
n asset management company led by two former bosses at China’s central bank has written a report talking up the prospects of Hong Kong-listed casino equipment maker Paradise Entertainment Ltd. The report by Oriental Patron, a Hong Kong-based firm with more than HK$10 billion (US$1.3 billion) in assets under management, suggests Paradise’s sales – via its LT Game brand – are due to “soar” in 2014. “Paradise targets to quintuple the LMG [live multi game] sales in 2014 to 3,000 units with about 80 percent order confirmed,” says the analysts’ report. It refers to LT Game’s main product line – featuring casino electronic table games with a live dealer and electronic betting and bet settlement. The product is exempted from Macau’s cap on numbers of traditional live dealer tables and also provides casinos with the opportunity to offer lower minimum bets than traditional table games. Oriental Patron’s directors include Liu Hong Ru, a former vice president of the People’s Bank of China and a former deputy director of the State Economic Restructuring Committee, and Zhang Zhi Ping, a former executive at the People’s Bank with responsibility for the supervision
of financial markets in the People’s Republic of China. The firm’s report states, referring to a Macau patent registered to a Paradise unit called Natural Noble Ltd: “Protected by the relevant patent (I/380), Paradise secured its monopoly position in the LMG [live multi game] segment, which has gained increasing popularity in Macau due to its superior live and multi-game features. Even SHFL [entertainment Inc], the world leading electronic gaming machine producers, has been precluded from [the] Macau market due to the legal issue stated in the company announcement dated 2013 Nov 18.”
‘Monopoly’ issue The latter is a reference to a Paradise filing made to the Hong Kong Stock Exchange on November 19. It said Macau’s Court of First Instance had dismissed an injunction filed by SHFL Entertainment (Asia) Ltd – a unit of U.S.-based SHFL which in turn is now owned by Bally Technologies Inc – seeking an injunction to prevent Paradise and its units “from claiming they own a monopoly of the ‘multi-gaming system’ and of all and every technical solution of the ‘multigaming’ concept”. Business Daily approached Bally
for a comment regarding the assertions made in the Oriental Patron analysts’ report of SHFL being “precluded” from the Macau market. No comment was available by press time. Paradise expects to boost its Macau market share for electronic gaming tables in 2014, the group’s chairman Jay Chun told reporters on Friday. “We’re confident that by next year the market share for our electronic gaming tables will go up because the revenue these machines generate is more than [that from] slot machines, and casinos are naturally looking for higher-yielding games,” Mr Chun told media on the sidelines of a launch event at Macao Polytechnic Institute for a publication called the Journal of Gaming, Tourism and Leisure Research. “That will expand our local market share to 65 percent,” said Mr Chun. Union Gaming Research Macau estimated in a report in May that LT Game had more than 50 percent of Macau’s current market for electronic table games. The research house added it believed the firm had an order backlog of “at least a few hundred additional ETG [electronic table game] seats in Macau”. Mr Chun said on Friday that Paradise was expanding its sales outside its core market. “We’re selling
1,000 live multi game machines to Australia, 300 machines to Southeast Asia and 700 to the U.S. next year,” Mr Chun stated. He added: “[The] United States is a big market with more than 5,000 casinos, where if we set up 40 to 50 live multi game units a venue, it’ll be a quarter million [units]…so actually our target of selling 700 units to [the] U.S. is very few [modest].”
Technical trials “Now we’re doing the technical trial for the live multi game machines in [the] U.S., which should be completed this week,” he added. “If the trial is okay, we can sell the machines in Nevada,” stated Mr Chun. Paradise also seeks to sell live multi game machines in the California market and hopes to obtain the approval in the first quarter next year, Oriental Patron wrote in its report. Richard J. Lopes, chairman of the California Gambling Control Commission – which will decide on Paradise’s fitness to be a licensee – was the main speaker at the conference portion of the Macao Gaming Show held in November. Mr Chun is chairman of the show’s organising body, the Macau Gaming Equipment Manufacturers Association.
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December 30, 2013
Macau
Advisory body needed for gaming policy: forum Ban on slot parlours in residential areas has ‘loopholes’ claims gaming worker association Tony Lai
tony.lai@macaubusinessdaily.com
T
he city needs a consultation body – with membership drawn from across the community – to review public policy regarding the gaming industry, says Billy Song Wai Kit, director-general of Macau Responsible Gaming Association. The call comes in the wake of the controversial relocation of a slot parlour in the Inner Harbour area. “Macau has so many public consultation bodies on different issues like housing, transportation… but there is none on gaming,” stated Mr Song. Such a body should include representatives from government, gaming operators, scholars, and community associations, he suggested in a weekly television discussion programme called Macau Forum organised by public broadcaster TDM. “The body should also have vetoing power,” said Mr Song. That should include the final say in the opening of standalone slot parlours operating independently of casinos, he added. In the past such venues have principally been targeted at local players. Mr Song’s comments follow news that a new Mocha Clubs slot machine venue has opened on a trial basis near the Ponte 16 casino resort at Macau’s Inner Harbour district. Secretary for Economy and Finance Francis Tam Pak Yuen said in early December that the new parlour – in the recently renovated Canton Hotel – was not in a residential building and was within 500 metres of a casino. That meant it met the terms of the government’s revised rules for slot parlour sites, he said. The new rules were gazetted in November last year. But Mocha, a unit of casino operator Melco Crown Entertainment Ltd, and SJM Slot, a unit of SJM Holdings Ltd – the two standalone slot parlour operators in the city – were given a year’s grace
to relocate premises that fell outside the guidelines. The Canton Hotel venue – in a mainly working class neighbourhood – is a direct replacement for the Mocha Hotel Taipa site according to separate statements by Mr Tam and Constance Hsu Ching Hui, president of Mocha. Mocha Hotel Taipa is next to the mainly middle class area of Taipa Village. Mr Song told Macau Forum: “The administration just approved the new location based on the literal context of the regulation, neglecting the legislative intention to remove all [slot parlours] from the residential areas.” Gaming Industry Workers Association vice-president Leong Sun Iok, speaking in the same forum, criticised the regulation banning parlours from residential area as having “loopholes” that needed closing. In the meantime the government should provide more information on responsible gambling for residents in the Inner Harbour area, he said. Zeng Zhonglu, an associate professor of gaming based at Macao Polytechnic Institute, agreed during the programme that an advisory body should be set up on gaming policy. Such a body would be useful as part of the public discussion – expected from 2015 onward – about how to deal with the expiry of the six current concessions and sub-concessions between 2020 and 2022, said Mr Zeng. “A consultation body can better reflect the public opinions,” he stated. An alternative might be in future to have a public hearing prior to any slot parlour openings, so that the operator and the residents can offer their views, suggested the academic. He also advised the government to carry out studies to “further improve” its laws and regulations, and increase the participation of residents regarding public policies.
The Canton Hotel – controversial venue for new slot parlour
Taiwan widens university recognition Stephanie Lai
sw.la@macaubusinessdaily.com
U
niversity degrees from three more Macau higher education institutions are now recognised in Taiwan, the island’s Ministry of Education announced on Friday. The ministry said in its website it now recognises the bachelor degrees from Macau Polytechnic Institute, Institute for Tourism Studies and Macau University of Science and Technology. These institutions may now find it easier to recruit students from Taiwan. It could also make it easier for Macau university graduates to find jobs in the island. In a statement released on Friday, the Macau Government Spokesperson Office welcomed the ministry’s decision and said it welcomes more Taiwan students to Macau’s universities. The city’s higher education institutions have been developing rapidly and achieving international quality certification, Taiwan’s
Ministry of Education said. Prior to this announcement, Taiwan only recognised the bachelor degrees issued by University of Macau, the Tertiary Education Services Office confirmed to Business Daily in August. The ministry now also recognises the postgraduate and doctorate degrees from University of Macau. The Macau government said the decision comes as a result of joint efforts by both regions. “It represents a new step forward in the continuous development of the Macau-Taiwan relations.” The government statement adds the decision will foster further exchanges on academic research, education and culture between the two sides. The island’s Mainland Affairs Council chairman Wang Yu Chi had said during a visit to Macau in August “there would be good news within this year” on university degree recognition. With Vítor Quintã
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December 30, 2013 April 19, 2013
Macau Brought to you by
HOSPITALITY Money magnet Foreign direct investment has been an important driver of the economy since the opening of the gaming market to competition. And the gaming industry is the main driver of FDI in Macau. Over half of all investment in the past five calendar years has been in gaming. In the chart the plot for total investment follows closely the plot for investment in gaming. The flows of investment vary a lot. The proportion of annual FDI that flowed into or out of gaming rose to a peak of almost 70 percent in 2010 and then fell into a trough with an outflow equivalent to 80 percent in 2011. As investment in gaming constitutes a big part of total investment, the plots for both follow the same W-shape pattern.
Growth in visitor numbers likely to ease next year
Visitors likely to top 29 mln this year City should consolidate its offering in 2014 as growth expected to ease, travel boss says Tony Lai
tony.lai@macaubusinessdaily.com
T Investors put much money into casinos between 2008 and last year, but they also put money into other industries that cater to visitors. The amount of money they put each year into improving shops, especially shops selling upmarket merchandise, has increased steadily in the past five years, from 407 million patacas (US$50.96 million) in 2008 to 4.5 billion patacas last year. Investment in hotels and restaurants made up under 2 percent of all investment. In 2008 there was even an outflow of money, but investment in the hospitality industry rose each year from 2009 to last year. The finance industry benefitted from dynamic economic growth, receiving 18 percent of FDI. J.I.D.
MOP42.7 bln
FDI in gaming, 2009-2012
he number of visitors to Macau is expected to hit 29 million this year after a 2.5-percent increase last month from a year earlier, official data show. More than 2.43 million people visited Macau last month, with the number of mainland Chinese increasing by 2.9 percent to 1.55 million, data from the Statistics and Census Service showed on Friday. The number of Japanese visitors, the city’s fifth largest tourism market, rebounded in November, after 14 straight months of declines. Nearly 27,500 Japanese visitors came to Macau last month, up by 12.5 percent from the year before. In the first 11 months of this year the city welcomed about 26.74 million tourists, up by 4.5 percent year-onyear. Visitor arrivals in Macau reached over 28 million people in 2012, up slightly by 0.3 percent year-on-year, data from the Macau Government Tourist Office show. But the growth in visitor numbers is likely to ease in 2014 as there will be no new attractions opening next year. The city should take the opportunity to focus on consolidating its offering, the head of the travel industry says. The president of the Macau Travel Industry Council Andy Wu Keng Kuong said this year’s growth in the number of tourists “matches” the industry’s expectation. “The growth next year may slow due to a higher base this year and
we are lacking positive factors to stimulate more arrivals,” Mr Wu told Business Daily. “New tourism facilities, like the new resorts in Cotai, will only open at least one or two years from now.” Mr Wu echoed a view expressed by the Macau Government Tourist Office, which said that the visitor numbers would expand by “low single-digit” next year.
‘Rich buffet’ Mr Wu said he thinks the industry should take the time to enhance its offering. Industry players should focus on improving the quality of the services they provide, which in most cases fail to match the price charged, he said. “The city should also work on several
26.74 mln
Visitors arrived at Macau in the year to Nov 30
issues like the capacity of the border [crossing] terminals, its transportation network and diversion of tourists from the major tourism areas to the less visited zones,” Mr Wu added. Maria Helena de Senna Fernandes, director of the tourism office, admitted earlier this month that more promotion should be done for the four tourism walking trails launched in the Macau peninsula in September. She added they would collect opinions next month before launching other trails in Taipa and Coloane, in an effort to divert tourists to other areas. “It is obvious that we have to keep launching more routes, just like a rich buffet offering many choices for the tourists to chose from,” said Mr Wu. Tourists are also staying longer in Macau due to an increase in hotel room supply, he added. Official data show the average length of stay remained at 1 day last month but the length for overnight visitors increased to 2 days from 1.8 days a year earlier. There were over 27,800 rooms available in October, up by 6.7 percent year-on-year, separate data showed. In the first 11 months this year, mainlanders accounted for more than 63 percent of overall visitors’ arrivals to reach 17 million, up by 10.4 percent from a year earlier. But visitors from Hong Kong and Taiwan declined by 4.2 percent and 7 percent respectively to about 6.2 million and 914,600 in the January-November period.
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December 30, 2013 April 19, 2013
Macau
Greek Mythology Casino ‘unaffected’ by hotel seizure Regulatory filing says gaming operation only a tenant of New Century Hotel Michael Grimes
michael.grimes@macaubusinessdaily.com
T
he seizure by a creditor of the New Century Hotel, Taipa, will not affect the operation of Greek Mythology Casino inside the hotel grounds, says Amax International Holdings Ltd. “The company would like to clarify that the operation of the hotel and Greek Mythology is separated [sic],” said a December 27 filing by Macau casino junket investor Amax to the Hong Kong Stock Exchange. Amax has an equity interest in Greek Mythology’s operations. On December 24 Business Daily reported that – according to a judgement of the Court of First Instance – the New Century had been seized earlier in the month for unpaid debts due the owner of a Macau-based travel business. Hoi Cheng Nga, head of Energy Travel Agency Ltd, had sued Empresa Hoteleira de Macau Lda – the Macauregistered operator of New Century. Within the grounds of the hotel is Greek Mythology Casino, which operates under the gaming concession of Stanley Ho Hung Sun’s Sociedade de Jogos de Macau SA. Amax said in its regulatory document: “The company does not have any equity interest in the hotel while Greek Mythology is the tenant of the hotel for the floors to operate the casino.” Amax added: “The company has discussed with a Macau lawyer and the legal advice from the Macau lawyer is that the judgement will not affect the continuous operation of Greek Mythology.” In early December Amax International stated that in the six months to September 30 this year its loss widened to HK$16 million (US$2.06 million) from HK$15
More fake banknotes found in casinos Macau’s security forces have identified a further 22 fake HK$1,000 banknotes up to Saturday afternoon, all of which detected in casinos, according to media reports. In the past week the Macau authorities have found 121 fake HK$1,000 notes purporting to have been issued by Bank of China (Hong Kong) Ltd or HSBC Hong Kong Ltd in 2008. The police has asked businesses and people to be on the alert for these well-made fake banknotes. Some retailers are refusing to accept any HK$1,000 notes, including some convenience store chains.
Hospital construction begins next year The construction of Macau’s second public hospital will begin next year, the Infrastructure Development Office said on Friday. The first phase, which includes the foundations and the surrounding roads, should be ready by mid-2016. The office opened on Friday 12 bids for the construction project, which ranged from 46.5 million patacas (US$5.8 million) to 122.8 million patacas. The works will follow guidelines from the Environmental Protection Bureau to reduce environmental impact, the bureau told media. The new hospital will be located in a plot with 114,000 square metres in Cotai, near the Macau Dome sports pavilion.
Over 2,900 non-residents hired in November New Century Hotel, Taipa – seized by creditor (Photo: Manuel Cardoso)
million in the equivalent 2012 period. The company said in its filing at that time: “…the first six months of the financial year remained a challenging period for the group as it was still struggling to restore normal business order from the aftermath of a series of unforeseeable and unfortunate events originated in the past few years.” The document added: “The loss
was mainly attributable to the fact that relevant financial information of Greek Mythology (Macau) Entertainment Group Corporation Ltd, (an associate of the group which operates and manages Greek Mythology Casino and in which the group owns 24.8 percent equity interest) for the period under review was not yet concluded.”
Corporate
Macau companies have hired a further 2,936 non-residents workers last month, taking the total imported labour to 135,886, the Human Resources Office announced on Thursday. The construction industry was the major driver with 25,355 outside workers by the end of November, up by 1,118 from a month earlier. Hotels and restaurants also helped by hiring 649 imported staff, taking its total to 38,504. Imported labour already accounts for more than a third of Macau’s working population. The city’s businesses hired 25,334 outside workers in the first 11 months of this year.
Correction
Nebraska promotes beef with Macau barbecue
CTM launches activities to support Caritas’ programme
The Nebraska Beef Council is hopeful of increasing the exposure of its produce in the Greater Region by betting on Macau’s growing fine dining business. The United States’ Meat Export Federation held its Second Annual Great American Barbecue dedicated to promoting Nebraska beef at the Hard Rock Macau. Visitors to Macau – most of which from the mainland – “can enjoy many options for fine dining,” said Myron Danner, Nebraska Beef Council director. “While United States beef is locked out of mainland China, we are getting great exposure in the region through Macau,” he added in a statement. About 200 people attended the invitation-only barbecue, about a third more than last year, including “key representatives” from Macau’s food and beverage enterprises, the federation said. “United States beef shipments to Macau are set to grow in future years,” said John Lam, the federation’s Hong Kong-based regional programmes manager.
Companhia de Telecomunicações de Macau SARL (CTM) has launched a charity programme along with the Rilakkuma promotional activities and products to raise funds for the Children Caring Programme of Macau Caritas, a local Catholic charity. Until May 31 2014, CTM will have an Ames Room at the Pedro Coutinho Shop for residents to experience the excitement of spatial illusion, while donation boxes of the Macau Caritas will be set up at the shop, aiming to raise more funds to support the programme. “As a long term partner of the Macau Caritas, CTM is pleased to be able to participate in the programme and offering help to the needy,” Ebel Cham, commercial vice president of at CTM, said in a statement. Until mid-May, all CTM shops will also feature Rilakkuma’s decorations and for every photo customers uploaded and hashtag, CTM will donate MOP$10 to Macau Caritas while all participants will automatically enter a weekly lucky draw that lasts for 24 weeks.
GDP growth of 10.5pct this year: Dagong In our December 27 edition we published an article titled ‘Gaming addiction makes economy ‘a bit fragile’: Dagong’. In that piece we wrote that China’s domestic rating agency Dagong Global Credit Rating Co Ltd had estimated Macau’s economic growth at 10.5 percent in 2014, rising to 11.4 percent in 2015. However, the agency estimates in a review released a fortnight ago that Macau’s economic growth rate would reach 10.5 percent this year, rising to 11.4 percent in 2014. For that inaccuracy we apologise to our readers and to Dagong Global Credit Rating.
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Greater China GM recalls 1.5 mln cars in the mainland General Motors Co’s China joint venture is recalling 1.46 million cars due to a defect with the fuel pump brackets, in one of the largest safety recalls in the world’s biggest auto market. The cars are made locally by Shanghai General Motors Co Ltd, GM’s venture with SAIC Motor Corp. GM said on Friday the bracket may crack after long-term use and in extreme cases could lead to fuel leaks. The recall, which was announced by China’s General Administration of Quality Supervision, Inspection and Quarantine, affects two of GM’s most popular models in China, the Buick Excelle compact car and the Chevrolet Sail subcompact.
China’s 2013 trade g set to miss annual ta
FDI to rise about 5 percent this year, commerc
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Commerce Minister Gao Hucheng’s pledges to keep trade steady
hina’s total exports and imports are expected to reach US$4.14 trillion in 2013, Commerce Minister Gao Hucheng said, a figure that indicates an annual trade growth rate of 7 percent, a touch lower than the official target of 8 percent. The ministry will step up efforts to maintain steady trade growth in 2014 and further balance trade structure by increasing imports of raw materials and energy products, he said. “In 2014, we will speed up adjustment of import and export structure and foster new competitive edge for exporters to maintain a steady growth,” Mr Gao said in remarks to ministry’s national work conference and published on its website. China’s exports have picked up of late amid signs of a slow recovery in demand worldwide, after net exports subtracted 0.1 point from GDP growth in the first three quarters. However, the figures this year have been distorted by hot money inflows disguised as trade deals, casting doubt on their accuracy and prompting a government clampdown. Mr Gao’s promise to keep trade
steady and balanced echoes the government’s line that it is seeking to stabilise the economy this year while it pushes ahead with an ambitious reform agenda. Mr Gao also said that foreign direct investment into China is likely to rise about 5 percent this year from a year ago to US$117 billion. That would be above the record high of US$116 trillion in 2011. He added that China’s nonfinancial outbound investment this year is set to grow about 15 percent to US$88 billion. Retail sales are set to rise about 13 percent to 23.8 trillion yuan in 2013. In 2014, the ministry will quicken the procedure for exporters to claim tax rebates, push forward free trade area negotiations with trade partners and broaden foreign capital access to service industries, the statement said. Separately, the country’s industry ministry also gave forecasts on Friday for full-year industrial output and profits, which are expected to have grown around 9.8 percent and 13 percent in 2013 from a year ago, respectively.
Yuan gains to 20-year high, money rate slides Reverse-repo injection eased market concern, analyst says
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hina’s benchmark moneymarket rate posted its biggest weekly drop since 2011 as central bank cash injections and fiscal fund transfers boosted supply. The yuan rose to the strongest level in 20 years. The seven-day repurchase rate tumbled 252 basis points since December 20, the biggest decline since July 2011, to 5.08 percent in Shanghai, a daily fixing from the National Interbank Funding Centre showed. The gauge of funding availability in the banking system fell 25 basis points, or 0.25 percentage point, on Friday. The People’s Bank of China added a net 29 billion yuan (US$4.8 billion) last week by auctioning seven-day reverse repurchase contracts on December 24. There were no injections the previous week, prompting the biggest surge in the rate since January 2011. The central government’s transfer of fiscal funds to local administrations boosted cash at commercial banks, according to Founder Securities Co.
“The reverse-repo injection greatly eased market concern,” said Gao Hui, Beijing-based analyst at Founder. “While the amount wasn’t big, the market was further aided by fiscal deposit transfers.” The one-year interest-rate swap, the fixed payment needed to receive the floating seven-day repo rate, dropped four basis points last week to 5.01 percent. It increased one basis point on Friday.
Yuan advances The yuan strengthened beyond 6.0700 to the U.S. dollar for the first time, touching 6.0670 before trading 0.1 percent higher at 6.0686, China Foreign Exchange Trade System prices show. That’s a 0.04 percent gain since December 20. The PBOC raised the yuan’s reference rate by 0.17 percent to 6.1050 per dollar on Friday, the strongest since a peg to the greenback ended in July 2005. “The investor perception of the
The investor perception of the Chinese currency is that it’s stable with limited downside risks, and it gives a much higher yield compared to the U.S. dollar Sim Moh Siong, Bank of Singapore
Chinese currency is that it’s stable with limited downside risks, and it gives a much higher yield compared to the U.S. dollar,” said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore Ltd. In Hong Kong’s offshore market, the yuan rose 0.04 percent to 6.0729 per dollar, data compiled by Bloomberg show. Twelvemonth non-deliverable forwards gained 0.17 percent to 6.1315, a 1 percent discount to the spot rate in Shanghai. The yield on the 4.08 percent government bonds due August 2023 was little changed last week at 4.63 percent, according to the Interbank Funding Centre. This compares with 2.99 percent for U.S. Treasuries of similar maturity. International Finance Corp signed an agreement with the PBOC last week to invest in China’s interbank bond market through the central bank, according to a statement posted on the PBOC website. Bloomberg News
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Greater China Govt pledges more protection for small investors China’s cabinet pledged to strengthen protection for small investors in the country’s capital markets, promising to keep unsophisticated investors out of certain areas, boost corporate dividend payouts and increase voting rights for small shareholders. The State Council said in a statement that the government would create a system for classifying investors into groups based on their tolerance for risk and understanding of capital markets with unqualified investors barred from certain markets. The cabinet also urged companies to conduct share buybacks when share prices drop below net asset value.
growth arget
Legislature approves easing of one-child policy Formally abolishes re-education through labour camps
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ce minister says The industry ministry also said it would make more effort to eliminate outdated capacity, and reiterated that it will promote mergers among steel, cement, shipping, solar panel and milk formula companies, according to a statement on its website. China’s fourth-quarter and 2013 GDP, December retail sales and industrial output data are due to be released around the middle of January. Reuters
US$4.14 trln
Expected value of China’s trade in 2013
hina’s legislature approved a policy to let some couples have a second child, after President Xi Jinping last month proposed relaxing population controls to help counter a shrinking workforce. The Standing Committee of the National People’s Congress passed a resolution on adjusting and improving the family planning policy at its bi-monthly session, the official Xinhua news agency reported on Saturday. The committee also voted to abolish the system of re-education through labour camps, known as laojiao, Xinhua said. China’s new leadership is accelerating an unwinding of Communist Party policies that originated during or shortly after the reign of chairman Mao Zedong. The changes were first announced last month as part of the broadest policy reforms since the 1990s. The one-child policy, put in place after Mr Mao’s death in 1976, was intended to alleviate poverty and control the rapid growth in the country’s population. It has also saddled the nation with a declining labour force: The United Nations estimates the number of 15-24
year-olds, the mainstay of factories that drove China’s economic growth for two decades, will shrink by about 67 million by 2030. Under the new rules, couples will be able to have two children if either parent is an only child. Previously, they were only allowed to have a second baby if both were only children. The NPC said provincial governments will be allowed to make their own decisions on implementation of the policy depending on local conditions, Xinhua reported. Beijing’s government said it expects to start implementing the policy in March and the local health department will increase the number of maternity beds to cope with the changes, according to a Xinhua report.
‘Reasonable size’ The new policy will help maintain China’s labour force at a “reasonable size,” ease the speed at which the country’s population is ageing and boost the economy, Wang Peian, deputy director of the National Health and Family Planning Commission said last month.
At the same time, “not too many” couples fulfil the new criteria and the change won’t lead to a large increase in the population in the short term, Mr Wang said. The number of people in China in 2020 will still be “significantly” below 1.43 billion and the expected peak population will be well below 1.5 billion, he added. A 2010 census put the figure that year at 1.34 billion. The move to end re-education through labour camps reflects a recognition by Chinese leadership of widespread anger about the system, which allows police to send people to such institutions for as long as four years without trial. After the abolition, those who are serving “laojiao” penalties will be set free and their remaining terms will not be enforced, Xinhua said, citing the NPC decision. This month, however, the rights group Amnesty International published a report saying that mainland authorities had already begun replacing labour camps with other forms of extrajudicial detention, including “black jails”, drug rehabilitation facilities and “brainwashing centres”. Bloomberg News
Mass poll bribe resignations in mainland province Beijing vows to root out corruption after exposing election fraud
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hina’s ruling Communist Party vowed to curb corruption and enforce party discipline following an official media report that hundreds of regional lawmakers accepted bribes and dozens committed electoral fraud. A total of 512 delegates in the People’s Congress in Hengyang city in Hunan province resigned after they were found to have taken bribes, Xinhua news agency reported, citing the municipal lawmaking body. Another 56 provincial-level congress delegates from Hengyang were found to have used more than 110 million yuan (US$18 million) to win their elections, Xinhua said. The elections were declared invalid, according to the agency. Municipal officials have the power to appoint representatives to the local People’s Congress, the provincial parliament that rubberstamps decisions. Reports of the scandal came after the removal of Hu Guochu, chairman of Hengyang’s municipal People’s Congress, from his role, for “violation of discipline,” which was announced on the website of
the Communist Party’s Central Commission for Disciplinary Inspection on December 18. Another official Tong Mingqian, former party secretary of Hengyang, was “directly responsible” for the corruption, according to the Xinhua report. It didn’t name Mr Hu or any other officials. Chinese authorities are stepping up a crackdown on bribes in moves that underscore President Xi Jinping’s determination to root
KEY POINTS Electoral fraud exposed in Hunan province 512 officials resign over bribe accusations US$18 mln allegedly offered in bribes to lawmakers
out graft. Targeting those Mr Xi has described as both “tigers and flies” – cadres at the top and bottom of the power ladder – may help bolster the party’s image as economic expansion slows and public discontent over corruption increases.
Severe punishment The Hengyang electoral fraud showed “rampant violations” of rules and law, the official communist party newspaper People’s Daily said in a commentary following the Xinhua report. “Thorough investigations and severe punishment must be done to maintain the party’s reverence and the people’s trust in the country’s fundamental political system,” it said. The scandal was also broadcast on the state-controlled China Central Television. China’s new Communist Party leadership, headed by Mr Xi and Premier Li Keqiang, took office in November 2012 in a once-a- decade power transition. In a speech to the Politburo after taking over as party general secretary, Mr Xi told his fellow leaders that unless they address
President Xi has warned that corruption could topple the Communist Party
corruption, social unrest may rise and lead to the demise of the party. Corruption was third among the public’s top 10 concerns in 2013, up from seventh in 2012, according to a survey by the website of People’s Daily carried out every March before the National People’s Congress. Bloomberg News
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Greater China
Beijing warns officials on terror attacks Document also reiterates ban on the use of public funds for gift giving
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Baidu rebounds on acquisition Chinese equities advanced in New York, extending a weekly gain, as Baidu Inc jumped on prospects the purchase of a literature website will help expand its consumer business. The Bloomberg China-US Equity Index of the most traded Chinese stocks in the U.S. rose 1.3 percent to 105.77 on Friday for a weekly gain of 1.9 percent, the most in six weeks. Baidu, China’s biggest web search engine, climbed the most in two weeks after agreeing to buy a reading website from online game operator Perfect World Co. Ctrip.com International Ltd and Sina Corp surged to the highest since November 15. Beijing-based Perfect World agreed to sell its Chinese online reading business to a unit of Baidu for 191.5 million yuan (US$31.6 million), according to a statement it issued on Thursday. Its unit Beijing Baidu Netcom Science Technology Co will buy Huanxiang Zongheng Chinese Literature Website Co from Perfect World, according to the statement. The agreed purchase amount included loan repayment to Perfect World. Baidu has spent at least US$2.5 billion on six acquisitions this year as it competes with Hangzhou, China-based Alibaba Group Holding Ltd and Hong Kong-based Tencent Holdings Ltd to maintain market share among Chinese Internet companies. “Everybody gets what they need: Perfect World needs to consolidate its media assets, Baidu wants to expand further in consumer business,” Nick Ning, a Shanghai-based analyst at 86Research Ltd, said. “With the online reading assets Baidu has acquired, it can do their own literature business, which makes money mainly from selling paid contents to readers.” Baidu’s American depositary receipts jumped 3.9 percent to US$173.77, the highest since December 10, taking its rally this year to 73 percent.
hinese officials and police have been told to step up safety precautions in “key regions” and be on alert for terrorist attacks during the New Year and Spring Festival holidays amid ethnic tensions in Xinjiang. The order was given in a circular issued by the Communist Party Central Committee and the State Council, the Xinhua news agency reported on December 27. The document also reminded officials to avoid extravagance and reiterated a ban on the use of public funds for gift giving and entertainment. “All-out efforts should be made to ensure social stability and harmony,” according to the circular. Related agencies should “solve problems that have aroused strong public complaints properly so as to prevent mass incidents at their roots,” it said. The party’s warning follows what the Xinjiang government described as a terrorist attack on police in the restive northwest province earlier this month which left 16 people dead, and a disturbance in November which killed 11. China has also linked a Uighur militant group founded in the region to an October incident in
which a vehicle rammed into a crowd near Tiananmen Square in Beijing and burst into flames, killing the three occupants and two bystanders. China’s domestic security forces are also on alert for protests against Japan after Japanese Prime Minister Shinzo Abe visited a shrine that honours wartime leaders last week. A vehicle from the People’s Armed Police and about a dozen other police cars and vans were parked around the Japanese Embassy in northeast Beijing yesterday. Uniformed police patrolled the area and a barricade was in place across the entrance. The two nations are locked in a dispute over the ownership of islands in the East China Sea.
Curb waste While the party has issued a circular before the New Year holidays for at least the last three years urging officials to be frugal and refrain from accepting gifts, the document has taken on added significance since Xi Jinping took over as party chief in November 2012. Mr Xi, who also became the country’s president in March, started a campaign to rein in lavish spending, curb waste and
crack down on official corruption. Mr Xi’s campaign and his crackdown on corruption has hit sales of luxury goods and business at highend restaurants and hotels. China’s luxury spending grew about 2 percent this year, the slowest pace since at least 2000, according to estimates from consultant Bain & Co published earlier this month. Shop and restaurant sales during last year’s week-long Lunar New Year festival, which fell in February, rose at the slowest pace in four years as the campaign limited outlays on food and drink. This year’s holiday, also known as the Spring Festival, begins on January 31. Officials must “stay clean by refraining from accepting gifts, money, securities, pre-paid commercial cards, as well as gambling,” according to the circular, Xinhua reported. Tea parties and evening galas should be reduced and simplified, and officials are banned from using public funds for gift giving, expensive recreational or body-building activities, New Year cards, fireworks, liquor, flower, food, trips not related to official activities, and handing out unnecessary bonuses. Bloomberg News
Urbanisation rate to hit 60 pct by 2018 China’s urbanisation rate is expected to hit 60 percent by 2018, according to a prominent government think tank report, two years ahead of previous official expectations, bringing a potential economic boost to the world’s second largest economy. China’s urban population has boomed over the last three decades, with over half of all Chinese living in cities for the first time in 2012. Around 54 percent of the population lives in cities now, according to the Chinese Academy of Social Sciences’ blue book report, the official Xinhua news agency reported. China’s leaders are pushing for a larger number of the country’s near 1.4 billion population to live in cities, a drive to boost economic output and reignite growth that slowed to a 13-year low of 7.8 percent in 2012. But authorities also face the challenge of regulating one of the largest migrations in human history, with steep financial and political costs to facilitate the 25 million people a year who are expected to move to cities. Resettling China’s rural workers into city life could cost around 650 billion yuan (US$107 billion) a year, a Chinese think tank said in July, the equivalent of 5.5 percent of fiscal revenue in 2012. The leadership is also struggling to balance goals such as encouraging the migration of millions of former farmers into cities, while avoiding the slums and unemployment problems that have occurred in other countries experiencing similar migration. China also needs to drive through social welfare reforms to remove obstacles for urbanisation. Millions of migrant workers in China’s big cities lack access to education, health and other services tied to the country’s strict household registration, or hukou, system.
China targets cement, metals in anti-pollution push Government vows to get tough with under-regulated industries
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he central government will raise standards for the production of cement, batteries, leather and heavy metals as part of its efforts to cut air, water and soil pollution, the environment ministry said. Beijing, facing growing public anger over smog, contaminated food and unclean water, has said it will tackle the environmental costs of more than three decades of unbridled growth. It has promised to get tough with under-regulated industries such as cement, iron and steel and
coal but the central government has traditionally struggled to impose its will on powerful industrial sectors and local governments. According to a notice issued by the Ministry of Environmental Protection, China produced 2.21 billion tonnes of cement in 2012, 56 percent of the global total. Beijing aims to close about 370 million tonnes of outdated capacity by 2015. The notice said the sector alone is responsible for 15-20 percent of China’s total particulate matter (PM) emissions, a major cause of hazardous
smog, as well as 8-10 percent of nitrogen oxide and 3-4 percent of sulphur dioxide, components of acid rain. The revised guidelines will force producers to install advanced antipollution technologies to meet the new standards, including the control of at least 60 percent of nitrogen dioxide emissions. China is also the world’s biggest producer and exporter of batteries, including solar cells, and the new measures will seek to impose better standards and higher barriers to entry for the sector, a major source of heavy metal pollution in the country’s soil and water. Beijing’s new leadership has sought to place less emphasis on economic growth and more on creating what it describes as “the beautiful China”. But it said earlier last week that it was struggling to meet a number of key environmental targets for the 2011-2015 period as a result of fasterthan-expected economic expansion. Reuters
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Asia
Falling consumer prices made shoppers cautious
Japan close to escaping deflation Fastest price gains since 2008 stokes wage pressure
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apan’s inflation accelerated to the fastest pace since 2008 last month, bringing the rate closer to policymakers’ target while threatening to erode household spending power unless employers boost wages. Prices excluding fresh food rose 1.2 percent from a year earlier, the statistics bureau said. A separate report showed industrial output rose 0.1 percent from October, less than forecast, in a risk for projections of an acceleration in economic growth this quarter. Bank of Japan governor Haruhiko Kuroda said earlier last week that policymakers have been looking to break the country’s “deflation equilibrium”. “The BOJ’s monetary policy differs from that of other central banks in that it focuses on changing public expectations,” Mr Kuroda said. “We’re seeing broad improvements in the economy, markets, public sentiment. This is the best opportunity to end deflation.” The data raise the stakes for employers girding for annual wage negotiations, with Prime Minister Shinzo Abe calling on them to boost salaries by more than the increase in the cost of living. Separate figures showed signs of a pickup in the labour market, with one job for every
applicant – the most since 2007. “The rate of price rises will allow the unions to push for higher wages,” said Masamichi Adachi, a senior economist at JPMorgan Chase & Co in Tokyo and a former central bank official. At the same time, “they may temper their demands because of concerns about keeping jobs – so it’s difficult to see meaningful wage hikes.” Japan is now past the halfway point to the central bank’s 2 percent inflation target, as a weaker yen and higher costs of energy spur broader price increases. The government dropped a reference to deflation in a monthly economic report last week for the first time in four years. Wages excluding bonuses and overtime were unchanged last month from a year earlier, ending a 17th-month slide, separate data showed on Friday.
Wage talks Prices of consumer durables such as refrigerators and televisions rose for the first time since 1992, increasing 0.3 percent last month from a year earlier. Food prices rose 1.9 percent in November from a year earlier helping to boost the overall consumer price index by 1.5 percent, according to
the CPI release. “It’s hard to say this is good inflation,” said Azusa Kato, an economist at BNP Paribas SA in Tokyo. “The prices that have risen are related to the weakening yen, and the gains aren’t fuelled by wage increases.”
KEY POINTS Prices up at the fastest pace in five years Core inflation rose 1.2 pct in Nov y-o-y Japan more than half-way towards BOJ’s goal Buoyed by positive investor sentiment, the Nikkei stock average hit a six-year high on Friday to close at 16,178.94 points. The benchmark index has gained about 56 percent this year, and is headed for its best annual performance since 1972. The Japanese yen also breached a key level of 105 yen to the U.S. dollar
for the first time in five years due to the positive economic data. Japan’s most influential business lobby has agreed to raise workers’ base pay for the first time in six years as the economy gains momentum and corporate earnings improve, the Asahi newspaper reported yesterday. The Keidanren business lobby will encourage its member companies to raise base pay next year in annual spring wage negotiations, the Asahi reported, citing a draft of the business lobby’s negotiations strategy. Honda Motor Co Executive Vice President Tetsuo Iwamura said on December 13 that the Japanese automaker will set pay based on reaching profitability targets, rather than government directives on how fast to increase compensation. Retail sales rose more in November than economists projected, marking a fourth straight increase, other data released on Friday showed. The climb may be due to spending ahead of a 3-percentage-point sales-tax increase that takes effect in April. Japan’s economy is projected to expand an annualised 3.6 percent this quarter and 4.1 percent in the first three months of next year, before a one-quarter contraction in April-June after the consumption levy goes up. Reuters/Bloomberg News
IMF says Japan upgrade likely as 2014 reforms pushed T he International Monetary Fund may upgrade its growth forecast for Japan, although the nation must start fiscal and structural reforms in 2014, IMF first deputy managing director David Lipton was cited as saying in an interview in the Financial Times. The IMF’s economic growth forecast for Japan of 1.2 percent next year will probably rise because of extra stimulus measures, the FT said, citing Mr Lipton. The
government expects gross domestic product to increase 1.4 percent, according to budget documents released on December 22. Prime Minister Shinzo Abe took office in December 2012 pledging a three-pronged, or a socalled three-arrow, strategy of aggressive monetary easing, fiscal stimulus and deregulation to end 15 years of deflation. “The first year was a year of opportunity for monetary policy and I think they hit
the target and showed they were changing the trajectory for the economy,” Mr Lipton was cited as saying. “The second year they have the opportunity to show that the second and third arrows are potent. It doesn’t mean they have to finish but they really have to start.” The nation’s target of 2 percent inflation in about two years through the Bank of Japan’s bond-buying programme had led to a weaker yen, which “the
international community is supportive of,” Mr Lipton said. The yen has lost about 18 percent of its value versus the dollar this year, according to data compiled by Bloomberg. Japan should proceed with an increase in its consumption tax to 8 percent in April from 5 percent now and manage the impact through extra government spending, the FT cited Mr Lipton as saying. The economy will probably contract an annualised 3.9
percent in the three months after the tax gain, according to the median forecast of 31 economists surveyed by Bloomberg. The government should make it easier for women to participate in the job market, which would boost growth and increase the pool of taxpayers, Mr Lipton said. He also called on Japan to sign up to the 12-nation Trans-Pacific Partnership trade pact. Bloomberg News
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Asia
Thai general refuses to rule out coup Thai protester killed as election tensions rise
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hailand’s army chief refused to rule out the possibility of a coup even after stressing that the military can’t take sides in the deadly dispute between protesters and Prime Minister Yingluck Shinawatra’s government. The army is at “a difficult crossroad,” Army Chief Prayuth Chan-ocha said at a briefing in Bangkok, after two people were killed and more than 125 were wounded in a riot sparked when police tried to stop protesters from disrupting preparations for a snap election. “We can’t go left and right. I have shown a red light to both sides.” The protesters have been calling for the military to add its muscle to the months-long bid to oust Ms Yingluck’s government and set up an unelected council tasked with erasing what they say is her family’s corrupting political influence. Allies of her brother Thaksin Shinawatra have won the past five elections, including two since his ouster in a 2006 coup, enraging royalists who say he’s a threat to Thailand’s monarchy. When asked whether the door remained open for the army to stage a coup, Mr Prayuth said, “I won’t say open or closed. Everything depends on the situation.” Thailand has experienced nine coups and more than 20 prime ministers since 1946. Thailand’s baht fell to its lowest level since 2010 on Friday and the benchmark SET Index of stocks led losses in Southeast Asia on concern worsening political unrest will spur further capital outflows. The unrest has claimed eight lives in the past two months, including a police officer and a protester shot on Thursday. Another protester was killed and four wounded on Saturday, when an unidentified gunman opened fire on demonstrators. The Election Commission urged the government to delay the February 2 poll in the wake of the riot, which saw police fire tear gas and rubber bullets at protesters trying to force their way into a stadium where candidates were registering. The demonstrators say they can’t allow any election under the current system.
Protesters block election registration centres
“Violence could intensify if the election is held as planned, which would cause unrest, chaos, riots and loss of life and bloodshed,” Election Commission chairman Supachai Somcharoen said on Friday. “If conflicts remain, an election cannot take place in a peaceful and orderly atmosphere.” Ms Yingluck dissolved parliament on December 9 to ease tensions, triggering a poll whose date is set by royal decree. Delaying the vote would be unconstitutional and it must go forward, Deputy Prime Minister Pongthep Thepkanjana said. The protesters said a postponement was unacceptable because the election would still eventually take place and Ms Yingluck would stay in power as caretaker prime minister. “The government is now being pressured by the increasingly violent protesters on the one hand and now by the decision of the Election
Violence could intensify if the election is held as planned, which would cause unrest, chaos, riots and loss of life and bloodshed Supachai Somcharoen, Election Commission chairman
Commission,” Sunai Phasuk, a senior researcher at New-York based Human Rights Watch in Bangkok, said. “This sends a very bad and worrying message for the future of democracy in Thailand.” The protesters are closely aligned with the main opposition Democrat party, which plans to boycott the poll. The party and protesters say Ms Yingluck’s government is illegitimate and run from abroad by Mr Thaksin, who faces a two-year jail term for corruption if he returns in a case he says is politically motivated. Ms Yingluck’s offers to negotiate with the protesters have been refused. She has ruled out resigning to make way for the unelected council, saying the roughly 16 million people who voted for her in 2011 should have a say in choosing the nation’s political future at the ballot box. Bloomberg News/Reuters
S.Korea to lend up to US$10 bln to banks S
outh Korea plans to lend up to US$10 billion of its foreign currency reserves to local banks to support capital investment and contain the country’s overall external debt, a senior finance ministry official said. “We have not yet decided on the
specifics, but the terms of the funding provided will be better than what the banks can get from the open market,” the official told Reuters, declining to be identified. On Friday, the finance ministry said it plans to utilise some of its foreign-exchange reserves to offer
dollars to local banks via a dollarwon swap. The country’s reserves stood at a record US$345.01 billion at end-November. South Korea has been accumulating huge current account surpluses, which allow the government to be comfortable with increased imports,
especially for corporate investment. The finance ministry official told Reuters that the dollars being provided to banks will only be used for importing capital goods. Details of the lending programme will be finalised during the first quarter. 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.
Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com
13 13
December 30, 2013 April 19, 2013
Asia
Asian currencies down as Fed taper spurs outflows U.S. tapering giving people an excuse to support the dollar, analyst says
M
ost Asian currencies fell last week as signs of an improving U.S. economy bolstered demand for the dollar amid tapering from the Federal Reserve that’s spurring outflows from emerging markets. Global funds pulled US$3.6 billion from South Korean, Thai, Philippine and Indonesian stocks so far in December as the Fed prepares to pare stimulus in January, exchange data show. The Thai baht led losses last week as the two-month-long political protests escalated, raising concerns about economic growth and tourism. Trading was muted due to closures in many markets for the Christmas holidays, according to Malayan Banking Bhd. “Most Asian currencies weakened because of the broad dollar strength,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking in Singapore. “The positive U.S. data also supports the case for further Fed tapering.” The baht depreciated 0.8 percent from December 20 to 32.873 per dollar in Bangkok, having touched 32.882, the weakest level since February 2010, according to data compiled by Bloomberg. Indonesia’s rupiah fell 0.4 percent to 12,263 before touching a five-year low of 12,281. The Fed announced on December 18 it will trim its monthly bond purchases to US$75 billion from US$85 billion starting next month. Initial jobless claims dropped more than forecast last
Thai baht – heading for its worst annual performance since 2000
week to 338,000, while consumer confidence climbed.
Weakening trend The rupiah is leading the year’s declines among Asian currencies, having fallen 21.4 percent as investors anticipated a cut in U.S. stimulus. The Indian rupee slumped 11.1 percent, the Philippine peso dropped 7.5 percent and Malaysia’s ringgit 7 percent, according to data compiled by Bloomberg. “When you look into 2014, the Fed taper has given people an excuse to support the dollar,” said Gundy Cahyadi, a Singapore-based economist at DBS Group Holdings Ltd. “In Asia, some economies such as
Thailand and Indonesia are grappling with a lot of political noises.” The baht fell for a second week and is down 7 percent in 2013, headed for its worst annual performance since 2000. The Election Commission urged the government to delay a February 2 poll after protesters tried to storm a Bangkok arena where candidates were registering. South Korea’s won and the peso bucked the weakening trend. Trading was quiet last week and could remain that way through the New Year as most people are still away on holidays, Malayan Banking’s Mr Supaat said. The won strengthened 0.7 percent from Dec. 20 to 1,054.36 per dollar, following a decline of 0.8 percent last week, data compiled by Bloomberg show. It rallied 1.4 percent to 10.05 against the yen, rising for a seventh straight week. In 2013, the won climbed 1 percent versus the dollar, trailing a gain of 2.7 percent in the Chinese yuan, Asia’s best performance. The South Korean currency’s movements versus the yen have been “relatively fast” and are “problematic,” Vice Finance Minister Choo Kyung Ho said on December 19. Elsewhere in Asia, India’s rupee increased 0.3 percent to 61.8450 per dollar and the ringgit was little changed at 3.2877. While Taiwan’s currency slipped 0.2 percent to NT$30.025, the Philippine peso gained 0.3 percent to 44.380 and Vietnam’s dong rose 0.1 percent to 21,095. China’s yuan traded at 6.0686, compared with 6.0713 on December 20. Bloomberg News
Japanese banking body to tighten rate setting New administrator body likely to start operations next year Taiga Uranaka
J
apan’s banking industry body said it would set up a separate administrator for interbank benchmark rates with more independent monitoring of the rate-setting process, which is under review globally in the wake of rate-rigging scandals. Authorities in Europe and elsewhere have been pushing for the overhaul of interbank lending-rate setting, which has been criticised for a lack of transparency and given rise to cases of collusion on rate-setting among banks for their advantage. The Japanese Bankers Association (JBA), which calculates and publishes Tokyo interbank offered rates (Tibor), said it would set up a separate administrator for the rates. The timing has not been decided, but a source said the administrator was likely to start operations in the first half of next year. Tibor is the benchmark for an estimated nearly 100 trillion yen (US$955.1 billion) worth of bank lending in Japan and several times more for derivatives trades in terms of
notional principal, the JBA said. While the administrator will be 100 percent owned by the JBA, majority of its board will be occupied by outsiders to the banking industry, and outside specialists will also manage its audit team, the association said. As part of the rate-setting process review, the JBA said it would also cut the number of tenors it publishes for Japanese yen Tibors and euro yen Tibors to six from the current 13 from April 2015. Last week, Japan’s banking regulator, the Financial Services Agency, said it would also put benchmark interest rates under stricter regulatory oversight, part of the global trend in which governments are seeking a more active role in setting benchmark rates. Earlier this month, the European Commission slapped a record 1.7 billion euro (US$2.3 billion) fine on six financial institutions, including Deutsche Bank AG, for manipulating the London Interbank Offered Rate (Libor) and its euro equivalent Euribor.
Britain passed a law requiring Libor to have a new administrator, stripping the British Bankers’ Association trade body of that role. Transatlantic exchanges group NYSE Euronext won the tender to administer Libor. Reuters
Tibor is the benchmark for an estimated US$955 bln worth of bank lending in Japan
Tepco submits new business plan to govt Nuclear plant operator seeks more funds for clean-up
T
he operator of Japan’s crippled Fukushima nuclear plant submitted a revised business plan to the government aimed at securing steady profit with the restart of its undamaged Kashiwazaki Kariwa nuclear plant in July. Details of the new plan were not disclosed, but it is based on getting more support from the state in the clean-up and compensation after the nuclear disaster. Under the revised plan, filed by Tokyo Electric Power Co Inc (Tepco) and the state-backed Nuclear Damage Liability Facilitation Fund, Tepco expects steady profit over 10 years, assuming it can restart its Kashiwazaki-Kariwa nuclear plant, the world’s largest, next July. Tepco had previously forecast that the plant, which could save it about US$1 billion a month in fuel costs, would come back on line from April this year. Criticism of the utility’s handling of the massive clean-up from the March 2011 quake and tsunami sparked calls to spin off Fukushima-related work and place it under government control or even put Tepco into bankruptcy. Prime Minister Shinzo Abe’s government, however, has instead opted to provide fresh financial support while backing an internal Tepco restructuring due to what experts termed reluctance to face legal responsibility for the disaster or risk ripple effects on the wider power industry. The government, which essentially nationalised Tepco last year with a 1 trillion yen (US$9.55 billion) injection of public funds, decided last week to nearly double to 9 trillion yen the amount of interest-free loans it provides the utility through the state-backed fund. The government is expected to approve Tepco’s revised business plan in January. On Friday, Tepco sought additional financial help worth 999.5 billion yen (US$9.5 billion) to pay increased compensation from the Fukushima disaster which spewed radiation and forced some 160,000 residents to flee their homes. In a bid to help revive the utility, the government plans to appoint Fumio Sudo, a former president of Japan’s second-biggest steelmaker JFE Holdings Inc, as the next chairman of Tepco and successor to the current chairman Kazuhiko Shimokobe, a government source close to the matter said. Reuters
14 14
December 30, 2013 April 19, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange) 68.40
102.6
32.6
68.25
101.9
32.4
68.10
101.2
67.95
100.5
32.2 32.0
Max 68.4
average 68.110
Max 62.6
Min 67.8
average 62.052
Last 68.3
Min 61.8
Last 62.05
67.80
Max 102.5
average 101.266
PRICE
average 32.125
Min 31.7
Last 32.3
31.6
35.0
62.4
25.35
34.8
62.2
25.20
34.6
62.0
25.05
34.4
61.8
Max 25.45
average 25.193
DAY %
YTD %
(H) 52W
Min 24.95
Last 25.25
0.773480663
7.847774672
106.2200012
(L) 52W
100.32
BRENT CRUDE FUTR Feb14
112.18
0.178603322
7.782475019
112.7999954
96
GASOLINE RBOB FUT Jan14
281.61
-0.138297872
11.07123136
287.259984
243.1999922
955
0.632244468
6.317840245
960.75
840
4.368
-2.412868633
7.958477509
4.770000458
3.476000071
GAS OIL FUT (ICE) Feb14 NATURAL GAS FUTR Feb14
85.56999969
312.41
0.946749386
4.796887055
320.0099945
278.0799866
Gold Spot $/Oz
1213.27
0.5861
-27.1073
1696.2
1180.57
Silver Spot $/Oz
20.0775
2.8007
-33.3195
32.46
18.2208
Platinum Spot $/Oz
1374.95
2.1888
-9.4087
1742.8
1294.18
Palladium Spot $/Oz
NY Harb ULSD Fut Jan14
711.55
1.81
1.6994
786.5
629.75
LME ALUMINUM 3MO ($)
1810
2.957906712
-12.68692716
2184
1736.25
LME COPPER 3MO ($)
7382
1.359329946
-6.92220401
8346
6602
LME ZINC
2089
0.674698795
0.432692308
2230
1811.75
3MO ($)
14200
0.282485876
-16.76436108
18770
13205
15.355
0.065167807
#N/A N/A
16.77000046
15.12000084
427.5
0.293255132
-29.86054143
614
418.5
609
0.495049505
-26.78088368
845
600.75
SOYBEAN FUTURE Mar14
1313.75
0.651216242
-0.076060087
1377.75
1174
COFFEE 'C' FUTURE Mar14
116.35
0.77955825
-27.43997505
172.25
104.1499939
16.43
0.859422959
-20.16520894
20.71999931
15.85999966
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Mar14 Mar14
WHEAT FUTURE(CBT) Mar14
SUGAR #11 (WORLD) Mar14 COTTON NO.2 FUTR Mar14
24.90
84.12
1.483894318
5.931242917
90.61000061
76.65000153
COUNTRY MAJOR
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
ASIA PACIFIC
CROSSES
Max 35
average 34.789
Min 34.25
Last 34.85
34.2
World Stock Markets - Indices COUNTRY
PRICE
DOW JONES INDUS. AVG
US
16478.41
NASDAQ COMPOSITE INDEX
US
4156.594
FTSE 100 INDEX
GB
DAX INDEX
DAY %
YTD %
(H) 52W
(L) 52W
25.74965
16529.01
12883.89
-0.2540327
37.65774
4175.363
2953.518
6750.87
0.8470057
14.46401
6875.62
5873.43
GE
9589.39
1.059879
25.97081
9589.39
NIKKEI 225
JN
16178.94
0.02782167
55.63887
HANG SENG INDEX
HK
23243.24
0.2747681
CSI 300 INDEX
CH
2303.478
TAIWAN TAIEX INDEX
TA
KOSPI INDEX
SK
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
0.887 1.6483 0.8915 1.3749 105.17 7.9871 7.755 6.0693 61.845 32.84 1.2689 29.962 44.395 12261 93.233 1.22559 0.83395 8.3722 11.0264 144.59 1.03
-0.2025 0.6104 0.5048 0.431 -0.3708 0.0013 0.0052 0.0659 0.5153 0.0091 -0.0788 0.257 0.1464 -0.8238 -0.1094 0.0865 0.1943 -0.737 -0.8371 -0.7884 -0.0097
-14.5307 1.8979 2.6809 4.2381 -18.1325 -0.0488 -0.0567 2.6576 -11.0761 -6.8819 -3.7434 -3.1006 -7.636 -20.1289 -4.1895 -1.4777 -2.222 -1.8478 -4.4983 -21.4538 -0.0097
1.0599 1.6578 0.9839 1.3893 105.19 8.0111 7.7664 6.2492 68.845 32.89 1.2862 30.228 44.82 12281 105.433 1.265 0.88151 8.4957 11.0434 145.69 1.032
0.8821 1.4814 0.88 1.2746 85.67 7.9818 7.7492 6.0663 52.89 28.56 1.2195 28.913 40.54 9603 86.41 1.2064 0.80817 7.8281 10.195 113.2 1.0289
Macau Related Stocks NAME
PRICE
ARISTOCRAT LEISU CROWN RESORTS LT
DAY %
YTD %
(H) 52W
(L) 52W
VOLUME CRNCY
4.61
-1.284797
46.3492
5.12
3.11
787506
16.91
0.1184133
58.48172
17.38
10.49
484286
AMAX INTERNATION
1.63
-2.97619
16.42857
2.12
0.75
4149425
BOC HONG KONG HO
24.9
0.2012072
3.3195
28
22.85
3085199 936000
CENTURY LEGEND
NAME
Max 32.55
25.50
WTI CRUDE FUTURE Feb14
CORN FUTURE
99.8
Currency Exchange Rates
NAME
METALS
Last 102
62.6
Commodities ENERGY
Min 99.9
31.8
0.425
-2.298851
60.37737
0.68
0.26
CHEUK NANG HLDGS
7.06
-0.2824859
17.86311
7.28
5
64985
CHINA OVERSEAS
21.8
-0.456621
-5.627707
25.6
17.7
14819859
CHINESE ESTATES
23.55
0.6410256
109.4162
24
10.334
130000
CHOW TAI FOOK JE
11.5
0.877193
-7.556267
13.4
7.44
4161367
EMPEROR ENTERTAI
3.99
0
111.1111
4.66
1.85
1150000
FUTURE BRIGHT
4.37
1.627907
260.5533
4.59
1.182
5176000
GALAXY ENTERTAIN
68.3
-0.4373178
125.0412
70.4
30
5141055
HANG SENG BK
125.6
0.07968127
5.812977
132.8
110.6
389695
7418.36
HOPEWELL HLDGS
25.85
-0.1930502
-22.25564
35.3
23.2
152265
16232.69
10374.85
HSBC HLDGS PLC
83.9
0.4790419
3.198028
90.7
77.85
9780181
2.58782
24111.55078
19426.35938
HUTCHISON TELE H
2.96
1.369863
-16.85393
4.66
2.5
6204857
1.683814
-8.699091
2791.303
2023.171
LUK FOOK HLDGS I
29.5
2.253033
20.90164
31.5
16.88
737500
MELCO INTL DEVEL
28.2
0.3558719
212.9856
29.15
8.9
2389000
8535.04
0.5791968
10.85187
8543.5
7603.27
MGM CHINA HOLDIN
32.3
0.623053
143.2544
33.3
13.146
2762173
2002.28
0.1490522
0.2618853
2063.28
1770.53
MIDLAND HOLDINGS
3.7
-0.2695418
0
4.29
2.68
5220000
0.325
3.174603
113.8158
0.4
0.131
83919000
NEW WORLD DEV
9.76
-0.4081633
-18.802
15.12
9.67
6488620
SANDS CHINA LTD
62.05
-0.6405124
82.76877
65.9
33.5
4044875
NEPTUNE GROUP
S&P/ASX 200 INDEX
AU
5324.06
-0.05894278
14.52177
5457.3
4632.3
JAKARTA COMPOSITE INDEX
ID
4212.98
0.2414085
-2.402468
5251.296
3837.735
FTSE Bursa Malaysia KLCI
MA
1861.06
0.9196898
10.19036
1862.63
1597
SHUN HO RESOURCE
1.65
1.226994
17.85714
1.92
1.33
26000
NZX ALL INDEX
NZ
1004.379
-0.04189889
13.86833
1048.998
879.821
SHUN TAK HOLDING
4.55
-1.301518
8.591884
4.8
3.27
2488000
PHILIPPINES ALL SHARE IX
PH
3614.32
0.32727
-2.288737
4571.4
3440.12
SJM HOLDINGS LTD
25.25
-0.5905512
42.27229
28
17.04
3782147
9.09
2.944507
-35.44034
14.46
7.38
6186600
WYNN MACAU LTD
34.85
-0.286123
66.34844
36.9
19
2716828
ASIA ENTERTAINME
N/A
N/A
N/A
N/A
N/A
0
-0.09061489
72.62358
78.5999
43.6
137773 22520
SMARTONE TELECOM
Euromoney Dragon 300 Index Sin
SI
602.24
0.05
-3.03
NA
NA
STOCK EXCH OF THAI INDEX
TH
1298.71
-0.7451508
-6.697182
1649.77
1260.08
HO CHI MINH STOCK INDEX
VN
506.41
-0.02763794
22.40108
533.15
408.32
BALLY TECHNOLOGI
77.18
Laos Composite Index
LO
1253.33
-0.7341993
3.174258
1455.82
1214.77
BOC HONG KONG HO
3.22
1.577287
4.885996
3.6
2.99
GALAXY ENTERTAIN
8.84
-0.5624297
122.67
9.15
3.89
52753
17.66
-0.0565931
24.6295
21.2
13.5801
1692432
JONES LANG LASAL
102.31
-0.1853659
21.88468
102.985
80.86
142279
LAS VEGAS SANDS
78.24
-0.6223803
69.4974
79.25
44.45
2752990
MELCO CROWN-ADR
38.93
-0.2562132
131.1758
39.42
16.15
1461254
MGM CHINA HOLDIN
4.08
0
133.104
4.2
1.7651
7100
MGM RESORTS INTE
23.15
-0.3872633
98.88316
23.5
11.32
3449835
SHFL ENTERTAINME
23.19
#N/A N/A
59.93103
23.25
13.88
344231
SJM HOLDINGS LTD
3.23
-2.416918
41.81495
3.6
2.2
20198
191.25
0.1099246
73.13675
191.8999
107.165
587479
INTL GAME TECH
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
WYNN RESORTS LTD
AUD HKD
USD
Hang Seng Index NAME
PRICE
DAY %
VOLUME
PRICE
DAY %
VOLUME
AIA GROUP LTD
30.2
1.003344
16574881
CHINA UNICOM HON
13.68
1.333333
22775492
ALUMINUM CORP-H
3.61
0
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
29
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
93
-0.4815409
2456828
265.6
1.45149
2048509
23.9
0
2206357
10
0.8064516
5926157
52.75
1.05364
3208615
POWER ASSETS HOL
65.6
0
1561243
CNOOC LTD
16.32
0.4926108
46287676
1260442
COSCO PAC LTD
11.76
0
3138217
SWIRE PACIFIC-A
0
7192500
ESPRIT HLDGS
12.44
-0.48
4211743
TENCENT HOLDINGS
24
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
57
2.059087
5880582
WHARF HLDG
75.55
0.1325381
701703
20
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
26
18
23404.45
LOW
22728.15
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
6 23275
INDEX 23243.24 HIGH
VOLUME
22890
23-December
27-December
15 15
December 30, 2013 April 19, 2013
Opinion BUSINESS
WIRES
Leading reports from Asia’s best business newspapers
ASAHI SHIMBUN Mizuho Financial Group Inc officially announced that its chairman, Takashi Tsukamoto, will resign on March 31 to take responsibility for the gangster loan scandal. “Taking into account the responsibility that the whole Mizuho group must shoulder, [Tsukamoto] made an offer to resign,” said Mizuho Bank president Yasuhiro Sato. The bank has fallen under criticism for allowing Mr Tsukamoto to stay as the chairman of Mizuho Financial Group even after he resigned as the Mizuho Bank chairman at the end of October.
JAKARTA GLOBE Indonesia expects to see faster growth in the manufacturing sector next year, amid resilient domestic consumption as well as an increase in foreign direct investment. Industry Minister, MS Hidayat, said the government expected to see the nation’s manufacturing output to grow 6.8 percent next year, faster than the estimate of 6.4 percent this year. Hidayat said growth in manufacturing would be boosted by continued domestic consumption and an increase in foreign direct investment in the manufacturing sector.
KOREA HERALD Earnings of South Korean banking groups are likely to fall 29 percent this year from the previous year as lending margins decline amid a long streak of low rates, industry data showed. The combined earnings of six banking groups are estimated to reach 5.93 trillion won (US$5.62 billion) this year, compared with 8.35 trillion won the previous year, according to the data. The banking groups include Woori Finance Holdings Co, KB Financial Group, Shinhan Financial Group and Hana Financial Group. “Lending growth slowed and interest income declined amid low rates, worsening their profitability,” said Koo Kyunghwe, an analyst at Hyundai Securities.
ECONOMIC TIMES India’s biggest Bitcoin trading platform said on its website that it had suspended operations after the central bank warned against the risks of using virtual money. Buysellbitco.in closed its platform, citing an advisory by the Reserve Bank of India highlighting the risks of trading in digital currencies. “We are suspending buy and sell operations until we can outline a clearer framework with which to work,” Buysellbitco.in said on its website, adding that the move was “to protect the interest of our customers”.
China and Japan’s useless posturing Bloomberg View Editors
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here is never a good time for Japan’s leader to visit the Yasukuni shrine, a controversial memorial to Japan’s war dead. For Prime Minister Shinzo Abe to have gone last week is especially inflammatory. Ever since 14 war criminals were “enshrined” at Yasukuni in 1978, visits by Japanese officials have rightly infuriated Japan’s neighbours, who suffered brutal occupation during World War II. That’s why Japanese emperors have not set foot in the Tokyo shrine ever since, and why Abe did not go during his first stint as prime minister in 2006-2007 nor since returning to office a year ago. He deserved praise for this restraint, more than he ever received from leaders in Beijing and Seoul. By visiting the shrine on Thursday, however, Abe lost any credit he might otherwise have earned. He did so just as Japan appeared to have regained the moral high ground in northeast Asia – thanks to the equally confrontational behaviour of his counterpart in Beijing, Chinese President Xi Jinping. By unilaterally declaring a wide “air-defence identification zone” across the East China Sea, including over various islands and rocks claimed by Japan and South Korea, Xi has revived fears of China as a bullying hegemon. Earlier this month, Japan announced an increase in defence spending and a more aggressive defence strategy without eliciting a peep of protest outside of China. Had Japan made its announcement last week, the reaction would be quite different. What could Abe – or Xi, for that matter – possibly be thinking? An optimist might argue that the two Asian leaders are just being strategic. Both have introduced
ambitious and difficult economic restructuring programmes; perhaps the theory is that by appeasing hard-liners now, they will forestall opposition on other fronts later. More likely, both men see a more assertive foreign policy as a natural and necessary part of their nations’ economic resurgence.
of stores and restaurants. Confrontation abroad only distracts much-needed energy and attention in both Tokyo and Beijing. Nor has the aggressive posturing achieved much in geopolitical terms for either country. China’s air zone was meant in part to push back against
Wrong strategy They are wrong: The one threatens the other. Thus far, in both Japan and China, structural reforms are nothing more than talk. The challenges each economy faces today are no smaller than they were at the beginning of 2013. Just in the last few weeks, Chinese leaders have confronted an interbank cash crunch and a major bankruptcy that have sent tremors through the financial system. Although massive monetary easing has driven down the value of the yen and driven up the profits of Japanese exporters, it hasn’t put more money into the pockets of Japanese workers or the tills
Contrary to what Xi and Abe may intend, neither leader is making his nation any stronger with his aggressive posturing
U.S. military dominance in the Pacific. Since its declaration, the U.S. has in fact reinvigorated its “pivot” to Asia. Visiting American officials now find ready audiences and hands outstretched for the tens of millions in U.S. security aid on offer. Japan has been gratified by the U.S.’s robust response to China’s manoeuvres. U.S. officials, however, have repeatedly underscored that they expect all sides in the region to work toward lowering tensions and are not pleased with Abe’s wilful disregard. Relations between Japan and fellow U.S. ally South Korea, which had shown signs of improvement, have now returned to limbo. Chances of coordinated action to deal with an increasingly unpredictable North Korea have crumbled. Contrary to what Xi and Abe may intend, neither leader is making his nation any stronger with his aggressive posturing. They’re only making the region more dangerous for themselves – and for the rest of the world. Bloomberg View
Turkey in upheaval Leonid Bershidsky
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urkish Prime Minister Recep Tayyip Erdogan fired half his cabinet last week after the resignation of three ministers, all his long-time supporters, in the wake of a major corruption scandal. The sons of Economy Minister Zafer Caglayan, Interior Minister Muammer
Guler and Environment Minister Erdogan Bayraktar were accused of bribery, and Erdogan apparently leaned on the cabinet members to step down and relieve public pressure on him. As he tendered his resignation, Bayraktar, Erdogan’s close friend and ally since the
1990’s, said he felt the prime minister needed to resign, too. Erdogan, however, plans to do nothing of the kind. Instead, after saying repeatedly that the bribery scandal is part of a foreign plot against Turkey, he has responded to it by firing 10 ministers. This is hardly consistent
behaviour, and it is unnerving investors who are selling Turkish stocks and dumping the lira. These developments are bad for Erdogan, whose popularity is based on his government’s economic success. The prime minister’s grasp on power appears to be weakening. Bloomberg Ticker
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December 30, 2013 April 19, 2013
Closing French court approves tax on high salaries
Barclays fined US$3.75 mln over data loss
France’s top court yesterday approved a proposal for companies to pay 75 percent tax on annual salaries exceeding one million euros (US$1.35 million) in line with President Francois Hollande’s drive to limit executive pay at a time of economic hardship. Mr Hollande (pictured) had said the idea was “not to punish” but added that he hoped it would spur companies to lower executive pay at a time when the economy is suffering, unemployment is soaring and workers are being asked to accept wage cuts. The government’s belt-tightening budget for 2014 aims to bring down the public deficit from the current level of 4.1 percent to 3.6 percent of GDP.
Barclays Plc has been fined US$3.75 million by a U.S. regulator for allegedly failing to keep proper electronic records, emails and instant messages. The shortcomings occurred between 2002 and 2012, said the Financial Industry Regulatory Authority. Finra said the bank failed to preserve data detailing its orders, confirmation of trades, records of accounts and other information. Barclays did not admit or deny wrongdoing, but agreed to a censure. Brad Bennett, enforcement chief at Finra, said: “Ensuring the integrity, accuracy and accessibility of electronic books and records is essential to a firm’s ability to meet its compliance obligations.”
Poor performing SOEs C to be ‘severely dealt with’
hina will evaluate the performance of its state-owned enterprises in 2014 and “severely deal with” companies that perform poorly, are continuously loss-making or do not meet safety standards, state news agency Xinhua said yesterday. Beijing hopes to move towards a more efficient model for such enterprises where the state retains ownership but management is more focused on getting returns on investment than meeting policy goals. The government is also seeking to alleviate entrenched industrial overcapacity aggravated by state firms over-investing. Huang Shuhe, deputy head of the State-owned Assets Supervision and Administration Commission (SASAC), said the agency is working on policy changes to make the SOEs more competitive on the global stage, more profit-driven and make bigger contributions to the economy. SASAC is a ministeriallevel body run by China’s cabinet and is directly responsible for more than
Regulator working on policy changes to make SOEs more competitive
China’s state-owned enterprises made about 1.3 trillion yuan of net profit this year
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Reuters
Monte Paschi shareholders delay cash call
U.S. jobless to lose unemployment aid ore than a million Americans will lose their unemployment benefits after an emergency federal programme expired on Saturday. U.S. lawmakers failed to agree on an extension of the scheme before the Congress began its winter recess. Former President George W Bush introduced the assistance plan in 2008 at the start of the recession. Under the programme, jobless people received an average monthly stipend of US$1,166 for up to 73 weeks. The White House says the benefits have kept millions of families out of poverty, but many Republicans argue that the scheme’s annual US$25 billion price tag is too expensive. The stalemate comes two months after a budget fight in the US Congress led to the partial shutdown
100 state-owned companies, including China Petroleum & Chemical Corp, Asia’s top oil refiner, and China Mobile Ltd, which runs the world’s biggest network of mobile phone users. Xinhua said China’s state-owned enterprises made about 1.3 trillion yuan (US$214.22 billion) of net profit in 2013 and the number of loss-making firms had dropped significantly. However, out of more than a hundred large SOEs that SASAC administers, only 11 posted a profit of more than 5 billion yuan. Many others remain deep in the red. Mr Huang said SASAC is determined to “severely deal with” companies that post persistent losses and SOEs that fail to adhere to higher environmental and safety standards will face tough punishment. Analysts have said China needs to make sweeping reforms of its SOEs, while a senior policy researcher has said that most state enterprises would be turned into companies with diversified shareholders by 2020.
I of the government. President Barack Obama has vowed to push for the renewal of the expired programme when Congress reconvenes in early January. “The president said his administration would, as it has for several weeks now, push Congress to act promptly and in bipartisan fashion to address this urgent economic priority,” White House spokesman Josh Earnest said. An estimated 1.3 million people will initially be cut off with the end of the “emergency unemployment compensation”, U.S. officials say. Millions more could be affected next year after they lose state benefits, which in many states expire after six months. Reuters
taly’s third-biggest bank Monte dei Paschi di Siena was forced to delay a vital 3 billion euro (US$4.1 billion) share sale to raise capital until mid-2014 because of shareholder opposition, plunging its turnaround plan into uncertainty. The bank’s chairman and its chief executive may now resign after their plan to launch the cash call in January was defeated at an extraordinary shareholder meeting on Saturday due to the vote of Monte Paschi’s top shareholder. The world’s oldest bank needs to tap investors for cash to pay back 4.1 billion euros in state aid it received earlier this year and avert nationalisation after being hammered by the eurozone debt crisis and lossmaking derivatives trades. The unprecedented clash between the lender’s executives and its main
shareholder – a charitable banking foundation with close links to Siena politicians – casts a pall over a tough restructuring meant to revive its fortunes. Chairman Alessandro Profumo, a strong-willed and internationally respected banker who was formerly the chief of UniCredit, said he and CEO Fabrizio Viola would decide in January whether to step down. Monte Paschi, which reported six quarterly losses, is cutting costs to return to profit. The lender is targeting net income of 200 million euros in 2015 and 900 million euros in 2017, and plans to eliminate 8,000 staff, sell new stock and shrink its balance sheet by 25 percent. The bank also plans to pare its sovereign-debt holdings and trading activities as well as reduce its consumer credit and leasing portfolios. Reuters