Macau Business Daily, Jan 20, 2014 by Business Daily

MOP 6.00

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Wealth planners sought as local rich get richer …and more numerous

Deputy editor-in-chief

Vitor Quintã

‘33 years’ – the break even for local taxi permit

Planned Nam Van LRT station could face chop

April 19, 2013

Year II

Number 458 Monday January 20, 2014

Editor-in-chief Tiago Azevedo

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oaring costs in taxi licence fees and running expenses are reducing the attractions of being in the business says the Association of Traders and Operators of Commercial Vehicles. In the past 12 months Macau has been shamed by reports of some local taxi drivers

trying to profiteer from bad weather and high demand at holidays by cherry-picking passengers, often demanding flat fees off-meter for the privilege of a ride. But the association’s vicechairman Leng Sai Hou offers a picture not of exploitation of the public but of hardship

for the cabbies and owners. The buyer of an eight-millionpataca (US$1 million) taxi licence would need about 33 years to break even, based on an average taxi owner’s income of 20,000 patacas a month from leasing the vehicle, he suggests More on page 4

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Hang Seng Index 23244

23172

23100

23028

22956

Airport income soars as shoppers fly in and out

Pachinko operator doubles down on Macau Legend

Airport operator Macau International Airport Co Ltd (CAM) saw its revenue increase by 19 percent to more than 900 million patacas (US$112.6 million) last year, mostly from non-aviation operations, as a record 5.02 million passengers used the facility. The company is expecting slower growth in revenue and passenger volumes for 2014 due to the presence in the region of avian ‘flu and of political instability in Thailand.

A unit of Japanese pachinko parlour operator Dynam Japan Holdings Co Ltd has more than doubled its investment in Macau casino services firm Macau Legend Development Ltd. It’s put in a further US$50 million via a top-up share placement, adding to the US$35 million it invested last year. Dynam paid HK$7.25 a share. Macau Legend’s stock is currently 229 percent up on its HK$2.35 global offering price in July.

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Disabled can help solve labour shortages: NGO

22884

January 17

HSI - Movers Name

%Day

GALAXY ENTERTAIN

5.32

SANDS CHINA LTD

3.51

TENCENT HOLDINGS

3.22

CHINA MERCHANT

3.00

WHARF HLDG

2.29

CHINA CONST BA-H

-1.08

CHINA LIFE INS-H

-1.09

IND & COMM BK-H

-1.21

CHINA UNICOM HON

-1.89

LENOVO GROUP LTD

-4.02

Source: Bloomberg

I SSN 2226-8294

The city’s large employers – including the casino resorts – would like to recruit more people with disabilities as part of their corporate social responsibility programmes. Small- and medium-sized firms have also shown an interest in recruiting disabled people says Jennifer Chau, director of the Fuhong Society of Macau. Ms Chau told Business Daily such moves could help to relieve some of the pressure created by local labour shortages. Pages 6&7

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January 20, 2014 April 19, 2013

Macau

Shoppers by the planeload help boost airport income Macau International Airport Co Ltd sets cautious targets this year amid concerns over bird flu and Bangkok unrest Stephanie Lai sw.lai@macaubusinessdaily.com

evenue increased by 19 percent last year at the airport’s operator after strong growth in income from its non-aviation businesses. Macau International Airport Co Ltd posted revenue of more than 900 million patacas (US$112.6 million) last year and saw a record 5.02 million passengers.

About 53.5 percent of the company’s revenue, about 490 million patacas, came from non-core business operations, including dutyfree retail, shop rentals, restaurant business and advertising. Non-aviation revenue growth slowed to 15 percent after growing by 23 percent in 2012. The non-aviation business accounted for 55 percent revenue in 2012. The airport company’s director of logistics and general aviation development Cui Guang said in July the company would target a more balanced revenue structure with non-aviation business contributing “a bit more than 50 percent”. “It’s actually good to see the proportion of nonaviation business going down

Mixed signs The company is expecting mild growth in revenue and passenger volume this year in the face of avian influenza outbreaks and seemingly unceasing political instability in Bangkok. The company said on Saturday that revenue had exceeded the company’s initial target of 798 million patacas.

Duty-free shopping continues to be a leading source of the airport operator’s annual revenue

a bit while we aim to reinforce our income from the aviation business to make the whole structure better,” the chief of the company’s corporate communications and policy

research office Vicki Mou told Business Daily. The airport welcomed slightly more than 5 million passengers last year, 12 percent more than in 2012,

Nam Van light rail station could face chop Official presents the move as ‘either or’ choice, if NAPE section is shifted to waterfront Stephanie Lai

sw.lai@macaubusinessdaily.com

T Nam Van

NAPE

TAIPA

Government’s 2009 plan for LRT rail system

he government’s initial plan for a light rapid transit (LRT) rail station at Nam Van near the centre of downtown Macau may have to be scrapped. Lei Chan Tong, director of the Transportation Infrastructure Office, gave the news on Saturday, speaking on the sidelines of a public consultation session about separate plans to extend the LRT to a public housing development at Seac Pai Van on the southern fringes of Cotai. Mr Lei presented the potential junking of the Nam Van station – a move likely to be extremely unpopular with locals because the site is close to many shops and offices and also to residential areas – as an ‘either or’ choice. He indicated it would be the price of diverting a section of the LRT along the waterfront of the NAPE commercial district, instead of cutting inland. He didn’t explain the reasons. In a report released on September 6, 2012, the city’s Commission Against Corruption – which also acts as local ombudsman – sided with a NAPE neighbourhood association and demanded that the metro route should be moved away from Rua de Londres and Rua do Porto in the centre of NAPE district and toward the estuary waterfront. The commission suggested it would allow

and higher than the operator’s target of 4.7 million people. There were about 48,000 aircraft movements last year, 16 percent more than in 2012. The operator has set targets of 5.1 million passengers and 960 million patacas in revenue this year. “We have made this cautious projection at the end of last year because we see that the H7N9 avian influenza virus is still not under total control,” said Ms Mou. “It is hard to say how it will impact the passenger traffic in the following months.” “The current political instability we see in Bangkok also creates uncertainty over our passenger traffic this year.” In contrast to last year’s strong passenger growth, the airport handled just 26,000 tonnes of cargo, beneath the target of more than 28,000 tonnes. The company has set the bar lower this year, at 26,465 tonnes. The Macau airport posted overall revenue of more than 4 billion patacas last year, 11.7 percent more than 2012. This figure included the business of the subconcessionaires running cargo handling, fuel supply, catering service for flights and air traffic management at the airport.

a “more balanced development of the district” and “more protection for the legitimate rights and interests of the population”. “Adopting the [NAPE] coastal route is an option,” Mr Lei confirmed to media on Saturday. He added that if the metro is to run along the waterfront, the LRT would not go to Nam Van Lake but instead directly run across the Governor Nobre de Carvalho Bridge to Sai Van and Barra. Michael Lam Soi Hoi, a technical consultant to the infrastructure office also attended the Saturday consultation. He indicated the government would consult the public again on the Macau peninsula route for the LRT within the first half of this year, according to the Chinese-language newspaper Macao Daily News.

Barra hub The government is also redesigning the Barra metro station and its transport hub this year, Mr Lei said. The Barra transport hub is an underground complex of bus stops and car parks for vehicles, buses and tourist coaches that would be connected to the LRT station to be established in the district. The proposal for the Barra transport hub was first introduced to the public in March, 2011. Any redesign for the Barra metro station and transport hub also raises questions about how quickly the peninsular section can be joined to the currently under construction Taipa LRT route. “For designing the [Barra] metro station and the transport hub, it has to take care of all the different possibilities of how the Macau metro line can be set,” Mr Lei said, noting that the detailed design for the Barra transport hub can only start when the whole Macau LRT route is decided.

January 2014 April 19,20, 2013

Macau editorial

Fog of commercial war

Macau Fisherman’s Wharf – undergoing redevelopment

Pachinko op doubles down on Macau Legend bet Dynam Japan hopes to learn about how Macau casinos are run, prior to pitching for a Japanese casino investment Michael Grimes

michael.grimes@macaubusinessdaily.com

unit of Japanese pachinko parlour operator Dynam Japan Holdings Co Ltd has more than doubled its investment in Macau casino services firm Macau Legend Development Ltd. Dynam says the additional investment is part of a strategy to learn more about the casino industry, as it wishes to invest in casino resorts in Japan once they’re legalised. Macau Legend – co-chaired by former Macau legislator David Chow Kam Fai – has never been issued with its own Macau gaming concession. But it is able to operate casinos in the city by virtue of a so-called ‘service agreement’ with Sociedade de Jogos de Macau SA, founded by Stanley Ho Hung Sun. Dynam’s Hong Kong-listed unit said in filings last year it has ambitions to operate what it calls “Next Generation” pachinko machines in Macau in partnership with Macau Legend. Dynam Hong Kong Co Ltd has subscribed to HK$387.50 million (US$50 million) worth of new shares in Macau Legend issued by the latter company last week. Dynam’s purchase represents nearly 29 percent of the HK$1.35 billion (equal to US$174 million) net of fees raised in Macau Legend’s new exercise. In the latest share placement, referred to in a Macau Legend filing as a top-up sale, All Landmark Properties Ltd, a British Virgin Islands company controlled by Macau Legend’s co-chairman David Chow Kam Fai, sold existing stock at HK$7.25 a share. It represents a 7.8 percent discount to the closing price of HK$7.86 on January 16. All Landmark will subscribe for an equal

number of new shares at HK$7.25. On Friday, Macau Legend’s stock price fell 1.53 percent to HK$7.74, but it was still 229 percent above the HK$2.35 launch price from July last year. Dynam’s new subscription adds to the US$35 million (HK$271.50 million) in Macau Legend shares it took at the time of the latter’s global share offering in July. That original exercise raised a total of approximately HK$2.02 billion (US$261 million) net of fees, Macau Legend said in a filing last week. It had initially hoped to raise as much as HK$4.4 billion gross.

Firm bet Late last year Mr Chow charged 390 million shares, representing at that time approximately 6.26 percent of Macau Legend’s issued share capital – and one fifth of his then 30.83 percent total stake, to Credit

US$50 million

Dynam Hong Kong’s new subscription to Macau Legend

Suisse AG, Singapore Branch, in what was described in a company filing as a “bona fide commercial loan”. Dynam Hong Kong explained in its latest filing the rationale for putting more money into Macau Legend. “In light of the fact that a bill primarily designed to legalise casinos and to promote the building of integrated resorts was submitted to the House of Representative of Japan on 5 December 2013, the board has since then decided to enter into the casino business in Japan as a mid- or long-term plan of the group,” said Dynam Hong Kong. “The board is of the view that further strengthening the business relation with MLD [Macau Legend Development] through the said additional investment would turn out to be beneficial for the group to enter into the casino business,” added Dynam. Macau Legend’s other cochairman Carl Tong Ka Wing – whose younger brother Carlson Tong Ka Shing is the chairman of Hong Kong’s financial regulator, the Securities and Futures Commission – in September told Bloomberg his firm intended to raise US$300 million by selling more shares. The latest share exercise represents 58 percent of that target amount. Mr Chow is busy expanding his Macau operations after raising fresh cash. This year his firm plans to open a new casino hotel called Prague Harbor View at Macau Fisherman’s Wharf. Mr Chow’s other assets include the Landmark Macau hotel, and the Pharaoh’s Palace casino inside it, as well as the mass-market Babylon Casino and a 72-room hotel called The Rocks.

ast month the Health Bureau revealed that the six casino concessionaires and sub-concessionaires had jointly petitioned for permission to have smoking rooms on their casino floors. Those rooms – without gaming tables or slots – would replace the existing casino smoking areas. Reports claim one casino company – Sociedade de Jogos de Macau (SJM) SA – has forged ahead and already installed a smoking room in Casino Lisboa on a trial basis. This unexpected coming together of all gaming operators for what at first hand seems to be a common cause is actually baffling. Most of the 14 gaming venues casinos that failed air quality tests and were told by the government to reduce their smoking areas are run under SJM’s licence. The tests gave a passing mark to the casinos of three of the six operators – MGM Grand Paradise SA, Wynn Resorts (Macau) SA and Venetian Macau SA. Once the smoking areas’ reduction came into effect as planned, these operators would have a competitive advantage over their rivals, particularly over SJM. They could lure chain-smoking gamblers into their dens by stressing the size of their smoking areas in comparison to the areas in SJM’s failing venues, whose size would under the originally stated rules be cut by 10 percent. If the government were to make good on its pledge to continue reducing areas with bad air quality, we could be looking at most of SJM’s casinos being forced to push smokers outside in the future. It almost seems like the other operators decided to give SJM a hand and, in the process, resurrected the friendly spirit of the Chamber of Macau Casino Gaming Concessionaires and Subconcessionaires set up in 2009. Is the political clout of SJM, founded by ailing gaming tycoon Stanley Ho Hung Sun, so vast that it managed to arm wrestle its rivals into such a compromise? Or could it be that gaming operators are looking at the wider picture and swapping short-term gains from expensive smoking areas for longterm efficiency? That would imply that they believe the indoor smoking ban will be enforced inside casinos by January 2016, as stated in the law that came into effect two years ago. I would not put my money on that wager, unless I had some kind of inside information. As usual in Macau there has been little transparency surrounding this smoking room proposal. Why is the government so enthusiastic over this idea after years of backing the idea of smoking areas on the casino floors? How can SJM be already testing out a smoking room? Under which regulation? Is this room’s air quality being tested? The government’s delay in releasing the results of a second round of casino air quality tests; the Health Bureau taking a week to realise that all 14 gaming venues had after all submitted their smoking zone reduction plans “on time” and had met an allotted deadline; all leaves a bitter aftertaste. It rather looks as though the operators and the government are playing roulette – but with the health of gaming workers, particularly of dealers.

How can SJM be already testing out a smoking room? Under which regulation? Is this room’s air quality being tested?

January 20, 2014

Macau

The government has said it would issue another 200 new taxi licences in the third quarter

Expensive taxi licences divide drivers, owners At more than MOP8 million to put a taxi on the road and, perhaps, a shortage of drivers, owners say they cannot make a return on their investment Tony Lai

tony.lai@macaubusinessdaily.com

he licence for a taxi may now cost as much as a good-sized family home, but people in the industry say these vehicles are no longer the lucrative investment they once were. A shortage of drivers is dampening the return on investment because it is difficult to keep the vehicles on the road 24 hours a day, taxi owners say. “The most recent re-sale of a permanent taxi licence I am aware of was for over 8 million patacas,” said Leng Sai Hou, the vice-chairman of the Association of Traders and Operators of Commercial Vehicles. For that price, potential investors would have more than enough money to afford a second-hand flat of nearly 1,200 square metres at Nova Taipa Garden. A flat was sold there last month for about 7.6 million patacas, according to transaction records from Centaline (Macau) Property Agency Ltd. Mr Leng told Business Daily that the cost of a licence was about 5 million patacas (US$625,000) only a few years ago. “The taxi licence price is just like everything else in the city, boosted by Macau’s sound GDP growth,” he said. “Also there are limited investment channels for Macau residents and taxis are relatively easier assets for them to understand.” The cost of a licence may have grown substantially, but Mr Leng and Tai Kam Leong, vice-president of the Taxi Association of Macau, say that does not necessarily translate into a better yield on the investment. The buyer of an 8-million-pataca licence would need about 33 years to break even, based on an average taxi owner’s income of 20,000 patacas a month from leasing the vehicle. “The car itself also costs about 200,000 [patacas] and you probably

There are definitely enough people but some owners are asking for too much in rents Tony Kuok Leong Son, Macau Taxi Driver Mutual Association chairman

have to change the car every eight years to meet the latest emission requirements,” Mr Leng said.

Driver shortage? Mr Tai said difficulties in finding drivers means that owners are stuck with a licence that is not being fully utilised. “You can flip the Macao Daily News [Chinese-language newspaper] and easily spot several advertisements each day calling for the drivers to rent taxis,” Mr Tai said. The taxi association has previously said there was a shortage of up to 500 drivers here, even though there are more than 10,000 qualified taxi drivers in Macau. Mr Leng said the city-wide labour shortage was the cause. “As the interest rate may start climbing up again in the near future, I think it might become a more reasonable investment to put the

money in the bank than into taxis,” he said. Macau Taxi Driver Mutual Association chairman Tony Kuok Leong Son rejects the notion there is a driver shortage. “There are definitely enough people but some owners are asking for too much in rents,” Mr Kuok said. “As long as the drivers could earn some 10,000 or 20,000 patacas a month, they would surely keep on driving.” “A reasonable rental” was about 20,000 patacas a month. The government says there were 1,178 taxis on the road at the end of November. That figure includes 100 yellow taxis that have unique licences to take telephone bookings. There are another 600 permanent taxi licences issued before 2005 that can be sold to other investors. The newer licences, which are valid for a maximum of 10 years, cannot be passed on. The most recent tender for 200 eight-year licences was held by the government in 2012. It attracted almost 2,200 bids between 837,000 patacas and 1.1 million patacas.

Kam San asked the government last week to introduce new requirements into the bidding process to circumvent speculative investments. His written inquiry said companies should be banned from owning taxi licences and preference should be given to people qualified to drive taxis. Mr Kuok, a driver himself, agrees with Mr Au’s requests. He says about two-thirds of all taxi licences are held by investors and other parties rather than by drivers. Taxi owner Mr Leng said any further restrictions to vehicle ownership would be “unfair” and “infringe on the free-market principles”. But Mr Tai admitted there were a few cases in which some VIP gaming promoters bid for taxi licences to serve their customers. A government source, who asked not to be identified, said the administration was “unlikely” to implement Mr Au’s suggestions. The criteria for this year’s tender would be similar to the open bid in 2012, the source said. Non-residents and companies were banned from joining the 2012 tender and residents were permitted to but just one licence.

Ownership bids Another open tender for 200 licences is scheduled to take place in the third quarter. Both taxi owners and drivers expect the licences to be valid for eight years and winning bids will be similar to previous tenders. Secretary for Transport and Public Works Lau Si Io said last month the government would issue the new licences later this year but is yet to announce any further details. Legislative Assembly member Au

KEY POINTS Rising licence costs hit owners’ bottom lines Ban on selling existing licences crimps supply Driver shortage keeps cars off road, say owners

January 20, 2014

Macau

Demand for financial planners rises on tide of surging wealth Industry groups sign deal to offer more opportunities for advisers to gain a recognised qualification Tony Lai tony.lai@macaubusinessdaily.com

acau needs more professionals offering financial advice as the city’s wealth multiplies, industry insiders say. “Rapid economic development in the past decade in Macau has led to higher income and growth in savings, and therefore there is a rising demand for financial planning,” said António Félix Pontes, chairman of Macau Institute of Financial Services. The institute signed a three-year cooperation deal with City University of Macau, the International Association of Registered Financial Consultants Hong Kong and Macau Centre Co Ltd on Friday. The deal will allow more students to study for a qualification that is recognised worldwide, the Registered Financial Consultant. The programme is aimed at the 3,000-strong workforce in the insurance industry and bank staff. There are already about 250 people with the qualification in Macau, the financial consultants association says. The city’s financial fortunes are clearly on the rise. Median monthly earnings were 12,000 patacas (US$1,500) in the third quarter of last year, up by onefifth in just two years, according to government data. Deposits into savings accounts reached 118.6 billion patacas in

November, an increase of more than one-third in two years. Mr Pontes, a board member of the Monetary Authority of Macau – a founding member of the financial services institute – said there was a “growing need for better professional qualifications to provide a solid grounding on fundamentals and ethics” for advisers. The chairman of the financial consultants association, Samuel Yung, said planners could offer advice on how to spend, save, invest, insure and plan for a worry-free future. “It is the total opposite to just trying one’s luck at the casinos,” Mr Yung said. Although Macau was not a financial centre like Hong Kong, a prosperous economy had created a demand for financial management, he said. Planners could also help clients find the right investment vehicles among bonds, stocks, funds or property. Mr Pontes said training more finance professionals might also be “helpful” in the development of the insurance industry and contribute towards sustainable economic expansion. Mr Yung said courses would start in May or June for between 30 and 50 students.

Mainland opens wider to Macau-funded clinics Vítor Quintã

vitorquinta@macaubusinessdailky.com

acau companies will be allowed to set up whollyowned hospitals or clinics in any mainland Chinese city at prefecture level or above, the National Health and Family Planning Commission announced last week. Investors from Macau, Hong Kong and Taiwan could previously run their own hospitals or clinics only in municipalities and provincial capital cities. Joint ventures with Chinese firms cooperative medical institutions are also welcome, said Sun Zhigang, deputy head of the National Health and Family Planning Commission. The health authorities will work out guidelines governing each side’s investment percentage. Private capital is allowed to enter any legitimate field in this sector and it has been encouraged to operate various health-related institutions such as rehabilitation centres and

nursing homes, Mr Sun told media. He said China would also simplify the approval procedures for mainlandbased private medical institutions and lead their entrance and development in the sector. “Public hospitals’ scale will be strictly restrained in order to give more room to the development of health care units funded by nongovernmental capital,” Mr Sun added. Service providers based here were first allowed to open up clinics in Guangdong in May 2010. But by December 2011 only one Macau wholly-owned clinic had opened doors in the province, Fong Chio Man, from the Guangdong Provincial Health Department, said at the time. As of August, the mainland had 22 Taiwanese-funded or mainlandTaiwan jointly funded hospitals. In March, the first Hong Kong-funded hospital opened in Shenzhen. With Xinhua

Savings deposits have increased by one-third in just two years

January 20, 2014 April 19, 2013

Macau Brought to you by

HOSPITALITY Rising room rates The Tourist Price Index rose by more than 10 percent in the fourth quarter of last year compared to the previous quarter, bringing the annual increase to 6.8 percent, an increase of 0.5 percent over 2012. A sharp increase in the fourth quarter has been a feature of the index over time. Holidays and big-ticket events cause spikes in the costs of dining out, food and lodgings. Hotel tariffs increased by 36 percent in the fourth quarter. Comparing the final quarter of last year to 2012, a night at a hotel cost 13 percent more – almost double the increase in the index overall. But last year will be viewed as a year of relative stability in the prices paid for a basket of goods and services that tourists might typically consume. The moving average for the annual growth of the index is about 6 percent. Last year’s growth rate was well below the values seen in the three previous years, when the annual average was mostly above 10 percent, peaking at more than 15 percent in the last quarter of 2011.

Employing disabled people can help solve Macau’s labour shortages: NGO

he city’s large employers – including the casino resorts – would like to recruit more people with disabilities as part of their corporate social responsibility programmes. Small and medium-sized firms have also shown an interest in recruiting disabled people says Jennifer Chau, director of the Fuhong Society of Macau. Ms Chau told Business Daily such recruitment could help to relieve some of the pressure created by the city’s labour shortages. But one barrier to progress is that few SME workplaces in Macau have the right protocols and resources to support disabled workers. The Fuhong Society is a non-profit group that was registered with the Macau government in 2003. Its aim is to help those with mental disabilities develop occupational skills, get training and secure employment.

Luciana Leitão

leitao.luciana@macaubusiness.com

Omitting those seasonal and annual variations, the data clearly show a continuous rise in prices over time. Even during the financial crisis in 2008 and 2009, there was no price deflation, only a slowdown in growth. Among the leading components of the index shown above, which make up about twothirds of its value, lodgings are the most volatile component. Hotel tariffs have fluctuated sharply from one quarter to the next, with the noticeable increase at the end of the year. The other components illustrated here – food, alcohol and tobacco, restaurant meals, and clothing and shoes – are clustered around the Tourist Price Index.

6.4%

Fourth-quarter increase in the Tourist Price Index compared to the same time in 2012

Do you believe companies are increasingly interested in hiring disabled workers? The economy is now growing very fast and human resources are tight. The disabled can now become part of the human resources [pool] and solve the tightness [in the labour market]. The Fuhong Society has been doing vocational training for the disabled. We have different kinds of services for them. For example, we have a social enterprise, but we will also send our disabled [clients] into society through open employment. Our social enterprise has to meet two points. We need to have profit and to achieve our social target. It means that we need to earn money and, at the same time, we must allow the disabled to be employed and have a meaningful life along with training. For some of the disabled, their ability can be used in open employment. Sometimes, we talk to companies and try to let [enable] disabled [people to] work independently in society. We also try to encourage companies to use other ways to help [the] disabled. For example, we will ask them to outsource to us some services, so we can finish them in the shelter workshop. Some mentally handicapped and mentally ill people under their rehabilitation stage are

sometimes not capable of working independently. It’s not [a] lack of productivity. They need to work as a team. They cannot finish the whole process by themselves. Regarding open employment opportunities, do you believe companies are now more willing to employ disabled people because of the lack of human resources? Under the corporate social responsibility concept, more companies are willing to employ our disabled to work. They even give equal salary to them. Yet, some of our disabled are not able to work independently. The companies ask for disabled [staff] but sometimes we really have difficulties to supply more. So, you are proposing that in certain cases the companies outsource to Fuhong Society’s team for services instead of hiring workers directly? First, they can employ them. Secondly, they can use the outsource way to use our services. The third way is, if they [the employers] need to buy [source] some things for the guests, they can think about our products. For example, Banyan Tree Hotel uses our pottery products and everyone that goes into the room sees ceramic products on the table from Fuhong Society disabled people.

Are small- and medium-sized enterprises also recruiting disabled people? Now very seldom, but it’s not because they don’t want to employ them. The reason is that disabled people’s families prefer them to be hired by big companies rather than by small enterprises, because of the salary and benefits. If a minimum wage policy is expanded in Macau beyond the one proposed for security staff and cleaners, will it affect the disabled’s working opportunities? If the minimum salary policy is launched, it will affect our disabled. I agree with this policy, but I’m afraid that after this policy is launched the disabled will have less opportunities. If companies use the same price to employ regular and disabled people, they may prefer not to hire the disabled. In some countries or in Hong Kong they have policies to support the minimum salary for the disabled. In other countries they have another policy. For example, if the minimum salary is 23 patacas [US$2.88] for an hour, the employer can give 20 patacas to the disabled and the government gives the rest. If this policy is launched, the government needs to think about the disabled. I do not reject this kind of policy, I agree with this kind of policy for normal people. The big companies hiring disabled people are the casinos? Yes, Venetian, MGM and others. They employ the disabled. Is the positive attitude shown by local companies towards the disabled the result of the lack locally of human resources? No. Now, [not only do] the corporations need to employ a lot of people but also they have some resources under the CSR concept.

Under the corporate social responsibility concept, more companies are willing to employ our disabled to work

January 2014 April 19,20, 2013

Macau Is it the companies that ask Fuhong to supply some workers or the other way around? The companies ask us. Usually, when the companies want to employ the disabled, they will talk with our occupational therapist and tell us the kind of job. Our occupational therapist will go to their place and say which of our disabled can perform, introducing him or her to the firm. Then, the company sees if he or she is suitable or not. If he or she is suitable, he will be employed. Do these workers have the same salary as regular workers? Yes, the same. What kind of positions do they have? Usually, cleaning jobs. For example, lobby cleaning. Some of them do the laundry or other simple jobs, like doing the cleaning in the laundry or delivering a bottle of water to the guests. How many of Fuhong’s service users have been recruited for open employment? For the mentally handicapped people, until this year less than 30 from day one [May 2003] up to now. The number is short [small], because we are not serving the mildly mentally handicapped. We are helping the moderate and severe mentally handicapped, so not that many are able to work independently. And the mentally ill are more suitable after the rehabilitation stage.

If the minimum salary policy is launched, it will affect our disabled

Is it easy for these companies to retain a disabled worker? Yes, because big companies have more resources. For example, The Venetian or MGM have departments in charge of communication with social organisations. So, when we send the disabled to the companies to have a job, the companies will talk a lot with us. Even if the disabled are not capable, the firm will call us and then our social worker or occupational therapist will try hard to find a way. Also, sometimes the companies will give them special opportunities to allow them to be able to do the job. For example, if the company has three working shifts, usually the disabled will not work on the night shift. Under such kind of situation, it is easier for our disabled to keep the job. Should the government give more incentives to companies – especially to SMEs – to hire such workers? There is a need for that. You can see now the SMEs are willing to employ the disabled, but they cannot do more because they do not have enough resources to help the disabled in their job. For example, mentally handicapped people need a long time to learn and to adapt to the job. A small enterprise employer does not have such time. For the whole society’s image or integration, the government can give some support to small

enterprises if they employ the disabled. Even for big companies, we don’t have enough disabled to supply. Nowadays, it’s not as difficult as before for the disabled to go out and find a job. However, for the moderate grade disabled, it is very difficult to send them out. At our shelter workshop, we have more than 100 people there, but we still cannot find a job for all of them. It’s not because the corporation or the employer is not willing to hire them, it’s because they are not able to work individually in society. The government should also give some benefits or tax benefit to those big or small enterprises – especially the small ones – that are willing to use the services of NGOs [non-government organisations]. For example, nowadays, we have a social enterprise working as a laundry. A lot of our customers are small enterprises – salon shops, beauty shops – that use our laundry for washing. There I can have a group of disabled working together. On the small enterprise side, this also can solve the human resources problem, because they don’t need to employ someone to wash the laundry. And they are helping disabled to have a job at our social enterprise. Does your social enterprise get a subsidy from the government? The government only gives us money at the beginning. The

social services department gives us 1.7 million patacas and then after this we need to run for ourselves. Because under this social enterprise, the disabled are not our service users, we need to pay them a salary. It’s quite a difficulty for us to sustain the business. We must have enough orders, enough jobs to keep the business going on and then we can employ the moderate grade people. Now we have three normal [non-disabled] people and then three full-time staff that are disabled and 10 part-time that are disabled. Why do we have parttime jobs? [It’s] Because they are mostly mentally ill persons, still under treatment in the hospital. After treatment in the hospital, they can go out in the society,

…mentally handicapped people need a long time to learn and to adapt to the job. A small enterprise doesn’t have such time

but since they are still in the rehabilitation stage, their energy is not quite good [enough] to work an eight-hour job. Considering Fuhong Society deals mostly with moderate to severe mentally disabled and mentally ill people, is open employment the best solution for your particular service users? Maybe not. Since we are not serving the mild grade, but the moderate and severe grade, that makes it difficult to send our service users to have their own jobs outside. Do you believe that the labour demand is such that more companies are now willing to consider employing the higher-level disability people? Nowadays there are more opportunities for them, but sometimes also because of the environment of the company they cannot work there. For example, some of the enterprises or some of the offices do not allow wheelchairs to go in, or maybe the environment is unsuitable for them to do the job. I know that enterprises can apply for a subsidy of up to 500,000 patacas to adjust the environment to [suit] the disabled. But I don’t think most of the employers know about this or even are not willing to change the environment just to fulfil the needs of one or two disabled.

January 20, 2014 April 19, 2013

Greater China

Major cities step up pollution curbs Beijing, Shanghai threaten to fine firms, car owners flouting emission limits

hina’s capital city and the nation’s financial hub are stepping up measures to curb pollution as the meteorological agency warned of hazardous smog levels for a fourth day. In Beijing, companies, construction sites, street vendors and vehicle owners who exceed stipulated emission limits will face fines and other penalties, according to a draft plan released by the city government Saturday. Shanghai will phase out 500 polluting, hazardous and energyintensive facilities, the city’s mayor Yang Xiong said yesterday. President Xi Jinping has pledged to tackle pollution amid rising public concern that smog and environmental degradation are affecting the nation’s health and the economy. The Ministry of Environmental Protection this month told all provinces and municipalities to cut air pollutants by as much as one quarter. “This pollution is leading to much public worry,” Liu Jigang, deputy director of the standing committee of the Beijing People’s Congress, said in comments posted on the city government’s website yesterday. Beijing’s average reading of PM2.5, fine airborne particulates that pose the largest health risks, were more than 1.5 times higher than the national target of 35 last year, he said. The city published a draft of a pollution prevention plan Saturday

Shanghai introduced new measures in response to the country’s air pollution

Wen Jiabao rejects hidden riches claim As Beijing pushes campaign to fight corruption among high-ranking officials

Wen Jiabao was replaced by Xi Jinping in March

ormer Chinese premier Wen Jiabao has pleaded innocence over claims that his family amassed huge wealth during his decade in power, a Hong Kong columnist said, as Beijing ramps up a much-publicised crackdown on official corruption.

“I have never been involved and would not get involved in one single deal of abusing my power for personal gain because no such gains whatsoever could shake my convictions,” Mr Wen said in a letter to Ng Hong-mun, a columnist with the Ming Pao newspaper, a Hong

Kong-based Chinese-language daily. “I want to walk the last journey in this world well. I came to this world with bare hands and I want to leave this world clean,” Mr Wen said, according to Mr Ng’s column published on Saturday. Mr Wen’s letter dated December 27 follows a 2012 New York Times report that claimed his family controlled assets worth at least US$2.7 billion – a report China vigorously denounced as a smear. Mr Ng is a Hong Kong-based politician who frequently comments on relationships between Beijing and the semi-autonomous region, which was returned to Chinese rule in 1997. He is known to have ties to Mr Wen, and a photo taken of both men and their wives after an April 2011 dinner in Beijing was circulated widely in the Hong Kong press. News of Mr Wen’s letter comes amid an escalating campaign by the current Chinese leadership, led by president Xi Jinping, to fight corruption among high-ranking officials, or “tigers”, as well as lowlevel “flies”.

Pre-emptive act Analysts say that while there is little chance that Mr Wen himself would be ensnared in that crackdown, the former premier is under pressure to clear his name following the New York Times investigation.

Recent reports of an official probe into China’s former chief of internal security, Zhou Yongkang, a onetime member of the all-powerful Politburo Standing Committee, could have prompted Mr Wen to act, said Willy Lam, a politics specialist at the Chinese University of Hong Kong. “I think the point of Wen Jiabao’s letter... is to pre-empt innuendo and speculation that he might be the next to go, after Zhou Yongkang,” Mr Lam said. “Because of the widespread publicity generated by the New York Times and other reports, there has also been speculation that Wen Jiabao could be the next one to come under the party discipline, if not public prosecution,” he added. He noted that it was “highly unlikely” that Mr Wen himself would be charged, “the major reason being that all this action against top officials is connected with a power struggle within the party”. The New York Times was awarded a Pulitzer Prize for its investigation into the wealth of Chinese leadership but has also had its website blocked in mainland China. Several reporters for the newspaper have also had difficulty obtaining visas to report from China. Mr Wen stepped down as premier last March after a decade in power and was succeeded by Li Keqiang in the Communist Party’s decennial leadership change. AFP

January 2014 April 19,20, 2013

Greater China

amid smog with new penalties, according to the Beijing Morning Post newspaper. They include fines of 10,000 yuan ($1,653) to 100,000 yuan and possible closures for companies exceeding national or city emission limits. Owners of vehicles who exceed emission rules will face penalties of as much as 3,000 yuan. The National Meteorological Center issued a yellow alert for smog yesterday, the fourth straight day, the official Xinhua News Agency reported. The warning covered areas in 10 provinces and municipalities including Shanghai and Tianjin, a coastal city neighboring Beijing.

Shanghai warning At a meeting of the municipal people’s congress yesterday, Shanghai’s mayor said the city will retrofit power plants with anti-dust and denitration equipment, and accelerate the replacement of coalfired boilers and furnaces. The city will also implement its clean air action plan, and pay more attention to the treatment of PM2.5 particulate matter, Mr Yang said. Shanghai’s government yesterday warned children and the elderly to avoid prolonged or heavy outdoor activities as PM2.5 readings hit six times the World Health Organization’s (WHO) recommended level of daily exposure. The order was made as the city’s

environmental monitoring center said air quality readings signaled “heavy pollution.” The level of PM2.5 pollutants was 157.2 micrograms per cubic meter, compared with WHO guidelines of exposure of no more than 25 over a 24-hour period.

Exceeding standards

US bankruptcy court sets Fisker auction

Beijing and Shanghai have been told by the environmental protection ministry to cut PM2.5 average readings by 25 percent and 15 percent respectively by 2017. Steel factories and thermal power plants in eastern China that provide real-time emissions data frequently exceed national standards, according to a study led by Beijing-based environmental group Institute of Public & Environmental Affairs released on Tuesday. China’s smog will be tough to eradicate without addressing industrial coal pollution, according to Barbara Finamore, Asia director of the Natural Resources Defense Council, a Washington-based environmental organisation. “In the past year China has announced significant plans to cut pollution and increase transparency,” Ms Finamore said in e-mailed comments on Thursday. “Their challenge now is to put those plans into action fast because the public’s patience is running out.” Mr Xi said solving China’s environmental issues needs “bigger steps and patience,” Xinhua reported on December 28, citing comments the president made during a visit to a power plant in Beijing. PM2.5 has generated heated discussion, Xinhua cited him as saying.

Chinese auto parts maker and a Hong Kong businessman will square off in an auction for Fisker Automotive, the defunct maker of a plug-in hybrid sports car, a United Statess Bankruptcy Court judge ruled on Friday. The February 12 auction will pit the United States unit of China’s Wanxiang Group against Hybrid Tech Holdings, a company affiliated with investor Richard Li of Hong Kong. Hybrid has said its initial bid would be worth US$55 million. Fisker’s committee of unsecured creditors has said it hopes to find other potential buyers by the February 7 bid deadline. United States Bankruptcy judge Kevin Gross of Wilmington, Delaware, said at a Friday hearing that attendance at the auction would be limited to the bidders, Fisker and a representative of the unsecured creditors committee. Mr Li’s legal team is pursuing an appeal of judge Gross’s order last week that will require bids to include some cash. Mr Li had planned to buy Fisker’s assets by forgiving some of what the company owes on a US$168 million secured loan, a process known as a “credit bid.” Unsecured creditors were likely to get next to nothing under that plan.

Bloomberg News

Reuters

Peugeot family split on Chinese capital hike Dongfeng investment on the table as French carmaker tries to halt losses

SA Peugeot Citroen’s supervisory board met yesterday to mull how to raise 3 billion euros (US$4.1 billion), with the family that still controls the French carmaker split over the available options, Le Monde newspaper said on Friday. Peugeot is cutting jobs and plant capacity in an attempt to halt losses inflicted by Europe’s economic slump and an overall decline in car sales that has continued for six years. Peugeot last month agreed to enter final talks on a capital increase that would see China’s Dongfeng Motor and the French state each take around 20 percent, leaving the Peugeot family with around 15 percent, a source told Reuters then. Peugeot advisers Rothschild and Morgan Stanley now estimate the carmaker could raise a larger portion of the capital – between 1.5 billion and 2 billion euros – by issuing shares directly on the market, according to Le Monde. This would see Dongfeng and France investing about 500 million and 750 million euros respectively, instead of

Peugeot is cutting jobs and plant capacity as in car sales decline

1 billion each, turning them and the Peugeot family into three almost equal partners with 12 to 15 percent. This plan is favoured by Robert Peugeot, who runs the family holding. Supervisory board chairman Thierry Peugeot opposes this option, however, and wants instead to carry out the entire capital increase

directly via the market, Le Monde reported. “The most important thing is to find a balance between the different parties involved,” Le Monde quoted a source as saying.

Decision time PSA hopes to be able to present the outline of a

deal with Dongfeng and the French state to investors when it discloses its annual results on February 19, another source told AFP. The carmaker hopes the deal will be sealed before a visit by the Chinese president to France planned for the second quarter of this year. A Peugeot spokesman declined to comment.

“We confirmed in December that we would be negotiating an industrial and commercial project with Dongfeng and other partners. These negotiations are continuing,” he said. “This is going in the right direction,” Erich Hauser, a London-based analyst automotive analyst at International Strategy & Investment Group who recommends buying the shares. “At this point in time, it was important that they can show Dongfeng is willing to commit.” A source familiar with the matter confirmed that the supervisory board would be meeting yesterday, but did not give details of the issues to be discussed. Shares in Peugeot closed 2.3 percent higher at 11.48 euros on Friday. Dongfeng signed last month a US$1.3 billion (960 million euro) joint venture agreement with PSA’s French rival Renault that will give it a manufacturing presence in China after a decade of not assembling vehicles there. Agencies

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Greater China

Shanghai pledges currency reforms in FTZ The city’s economy grew an estimated 7.7 percent last year

Shanghai will work to launch crude oil futures, the city’s mayor said

hanghai’s mayor pledged yesterday to make major progress this year on key financial reforms in the city’s new free-trade zone (FTZ) including full convertibility of China’s currency. China set up the FTZ in the commercial hub in September last year, promising to make the zone a showcase for financial reforms, which have slowed over the last decade. “We will make all-out efforts to build the FTZ,” mayor Yang Xiong told lawmakers at the annual meeting of the city’s legislature. “To intensify opening up and innovation in the financial sector... we will seek substantive progress with pilot reforms,” he said in a speech. He said these reforms included convertibility of the yuan currency under the capital account, crossborder settlement of the yuan and interest rate liberalisation. China keeps a tight grip on its capital account – investment and financial transactions, rather than those related to trade – on worries that unpredictable inflows or outflows could harm the economy and reduce its control over it. Convertibility of the yuan – allowing the currency to be freely bought and sold, and with it the movement of funds into and out of China – is the main obstacle preventing Shanghai from competing with global financial centres such as New York and London. China currently sets deposit rates by administrative order, but the central bank began allowing banks to decide their own lending rates

last year, in a long-awaited move. Mr Yang said the government would also revise a “negative list” of what is barred in the FTZ in a timely way. The list was sharply criticised for being too long and restrictive and officials say a new one will be announced for this year. Shanghai would also work towards the launch of crude oil futures, Mr Yang said, but gave no launch date. Officials have previously said the futures product would be offered through the FTZ. Shanghai also planned to “gear up” for the start of operations of a new Disney theme park in the city, Mr Yang said. City officials earlier this month reaffirmed a deadline for the opening of the park to visitors in 2015. The park will be the second in China after another in its special administrative region of Hong Kong. Shanghai maintained its economic growth target for 2014 at the same pace as last year’s 7.5 percent. The city’s economy grew an estimated 7.7 percent last year, Mr Yang said, driven by services industries. Finance, information services, culture and creative industries expanded at double-digit rates, he said. Inflation in China’s commercial hub will be “kept in line with the national price control target,” after consumer prices rose 2.3 percent last year, Mr Yang said yesterday. Urban unemployment will be capped under 4.5 percent, the same as last year, he said. AFP/Bloomberg News

Guangzhou, Shenzhen drive up home prices Home prices in first-tier cities rose over 15 percent last month despite curbs

ew-home prices in China’s cities defined by the government as first tier rose more than 15 percent last month, led by Guangzhou and Shenzhen in the south, as local property curbs failed to deter buyers. Prices climbed 20 percent in Guangzhou and Shenzhen from a year earlier, and jumped 18 percent in Shanghai and 16 percent in Beijing. They increased in 69 of the 70 cities tracked by the government, the National Bureau of Statistics said in a statement Saturday. At least 10 Chinese cities, many of them provincial capitals, have tightened local property policies since November, with the major cities of Shenzhen, Shanghai and Guangzhou all raising minimum down payments for second homes to 70 percent from 60 percent. Premier Li Keqiang has held off introducing more nationwide policies to cool the real estate market since he took office in March. “China’s big cities will certainly implement the

tightening measures more strictly this year,” said Alan Jin, Hong Kong-based property analyst at Mizuho Securities Asia Ltd. “China still cares about the fast-rising home prices, otherwise those local curbs wouldn’t have come out. They don’t seem to find better ways to tackle the problem.”

‘Near despair’ Existing-home prices rose 20 percent in the capital Beijing last month from a year earlier and increased 14 percent in Shanghai, according to Saturday’s data. Private data also showed there’s no sign of cooling in the property market. Home prices in December had the biggest year-onyear gain in 2013, gaining 12 percent, according to SouFun Holdings Ltd, the nation’s biggest real estate website owner. Beijing, the financial center of Shanghai, and the southern business hubs of Guangzhou and Shenzhen are considered first-tier cities by the bureau of statistics.

The four “are characterised by high levels of international business connectivity, deep corporate bases and welldeveloped international grade stock, and they are the country’s most liquid and transparent markets,” according to broker Jones Lang LaSalle Inc. First-tier cities, including

Beijing and Shanghai, may impose further curbs if prices rise too fast, Standard & Poor’s Hong Kong-based analyst Bei Fu said on a conference call Friday. Almost one-fifth of respondents in a Renmin University of China survey gave a zero score to the government’s property

policies, indicating “near despair” with housing prices, the official China News Service reported last month, citing survey results. Home prices will rise about 5 percent this year from 2013, while home sales volume will jump about 10 percent, according to S&P. Bloomberg News

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Asia

Tepco’s Fukushima nuclear plant was hit by a giant tsunami on March 11

Tepco seeks partnerships to expand shale gas ops Utility maps turnaround from three years of mounting losses following Fukushima

okyo Electric Power Co, operator of the wrecked Fukushima Dai-Ichi nuclear power plant, is considering spending about 2.67 trillion yen (US$25.6 billion) on strategic investments through partnerships as it seeks to move beyond the Fukushima disaster. Of the planned investments, the utility known as Tepco plans to borrow 2 trillion yen in fresh loans from lenders, president Naomi Hirose, 60, said in an interview in Tokyo Saturday. The utility will make loan requests to banks as soon as possible, Mr Hirose said, declining to specify a timeframe. “For the sake of Fukushima’s reconstruction, we have to seek growth,” Mr Hirose said in the interview, three days after the company released the latest plan to turn itself around after almost three years marked by mounting losses, scares over contaminated groundwater and continuing cleanup efforts. The financing plans outlined by Mr Hirose are an attempt by Tepco, Japan’s biggest utility, to chart a fresh course separate from the troubles that have befallen the company in the aftermath of Fukushima. The disaster looms large over the Tokyo-based company, shadowing any attempts to rebuild or to boost morale among its employees. More than 2,000 workers had left Tepco by the end of March 2013 since the Fukushima disaster in 2011 pushed the company to the brink of bankruptcy, forcing it to shrink overseas projects and reduce employees’ salaries and bonuses. Tepco executives, including Mr

Hirose, have voiced concern that the exodus would severely hurt the company as hundreds of talented younger workers leave.

‘Fleeing the utility’ The growth strategy in the business plan “would help Tepco make its employees believe it is returning to a normal company and stop some of them from fleeing the utility,” Shinichi Yamazaki, a Tokyo-based analyst at Okasan Securities Group Inc., said in a Friday phone interview. As part of the growth strategy outlined on Wednesday, Tepco said it planned to invest in upstream energy projects and overseas electricity businesses in the ten years through 2022. Tepco has received “several offers” related to shale gas projects and plans to make an investment decision as early as fiscal 2014, which starts April 1, Mr Hirose said in the interview. He declined to provide details as talks are private. The utility’s fuel and power unit aims to cut Tepco’s skyrocketing fuel bill by teaming with partners on everything in its supply chain from upstream energy investment to power generation, according to the turnaround plan. Tepco plans to boost its gas procurement volume to as much as 40 million metric tons per year through the partnership from current 20 million tons on its own, it said.

Corporate value “To fulfill our responsibilities in Fukushima, we will need a lot

of money and are being granted a goodly amount of the government’s money,” Mr Hirose said. “We have to repay it by improving corporate value.” The Tepco turnaround plan’s reliance on restarting idled nuclear power reactors has served as a lightening rod for criticism directed at the company by foes who oppose restarts. All of Japan’s 48 nuclear operable reactors are shut, forcing the nation to rely on fuel imports that helped push the current account into the largest deficit on record in November. Tepco’s Fukushima Dai-Ichi nuclear plant, 150 miles (240 kilometers) north-east of Tokyo, was hit by a giant tsunami caused by the March 11, 2011 earthquake. Operators lost control of power supply and emergency backup systems failed, causing the world’s worst nuclear accident since Chernobyl.

Energy mix Since the Fukushima accident, Tepco has had to contend with both the disaster’s aftermath and the challenge of surviving as a company. Tepco provides power to 29 million customers in the Tokyo metropolitan area. The accident has also reverberated throughout Japan, affecting everything from energy prices, company planning and a debate over the island nation’s energy mix. The February 9 election for Tokyo governor may prove a litmus test for the Japan public’s acceptance of nuclear power after former prime minister Junichiro Koizumi, who

has renounced the use of atomic power, backed candidate Morihiro Hosokawa, another former prime minister seeking the Tokyo job on an anti-nuclear platform. Nuclear plants produced more than 25 percent of Japan’s electricity before the disaster. Since Fukushima, the nation’s utilities have had to import more oil, coal and gas. As a result, Japan has posted a trade deficit for 17 straight months and the currentaccount shortfall widened to a record in November.

Bond investors In addition to relying on nuclear restarts, the turnaround plan calls for Tepco to adopt a holding company structure by 2016, assuring bond investors that the resulting subsidiaries have sufficient collateral to cover outstanding debt. Tepco hasn’t sold bonds publicly since the 2011 earthquake and Fukushima meltdown and the company says it now plans to return to the market in the fiscal year starting April 1, 2016. Tepco’s shares are largely unchanged since August when the company said it had been contending with leaks of contaminated water from storage tanks at the Fukushima plant. The shares have declined 1.6 percent since August 30, compared with a 17 percent advance for Japan’s Topix index. Net losses at the utility total 2.7 trillion yen for the three full fiscal years ended March 31. Bloomberg News

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Asia

Timor takes Australia to court on spy row Controversial oil and gas treaty at heart of dispute risking Australia’s reputation Charles Onians

iny, young East Timor drags its giant neighbour Australia before the United Nations’ (UN) top court today in a cloak-anddagger case with billions of dollars in natural resources at stake. At the heart of the David and Goliath dispute at the International Court of Justice (ICJ) in The Hague is a controversial oil and gas treaty signed by Dili in 2006, shortly after independence from Indonesia. East Timor wants judges at the ICJ, which rules on disputes between states, to order Australia to return documents its intelligence services seized last year relating to Dili’s bid to get the treaty torn up. “It’s simple: we’re asking for our documents back. Australia has unlawfully taken documents that are rightfully the property of TimorLeste,” government spokesman Agio Pereira told AFP ahead of today’s hearing. East Timor gained its independence in 2002 following years of

brutal Indonesian occupation but has a sluggish economy that is heavily dependent on oil and gas. Dili wants the key treaty it signed with Canberra in 2006 dividing oil and gas resources ripped up, saying Australia spied on ministers to gain a commercial advantage. Australia allegedly used an aid project refurbishing East Timor’s cabinet offices as a front to plant listening devices in the walls in order to eavesdrop on deliberations about the treaty in 2004. The treaty, Certain Maritime Arrangements in the Timor Sea, or CMATS, set out a 50-50 split of proceeds from the vast maritime energy fields between Australia and East Timor estimated at 26 billion euros (US$36 billion). Dili signed such treaties “at fragile and vulnerable times in our young nation’s history,” government spokesman Pereira said. “Now, in 2014, we are acting with a new breadth of information,

data and analysis, including information that Australia may have acted in bad faith and in breach of international law.”

Image tainted Australian media have reported that the lion’s share of Timor Sea oil and gas would be on Timorese territory if the maritime border were defined according to customary rules of the sea. But first the half-island nation wants the ICJ to order the return of documents seized in November when Australia’s domestic spy agency raided the Canberra offices of East Timor’s lawyer, Bernard Collaery. Mr Collaery is representing East Timor’s government in its bid lodged last year to get the CMATS treaty cancelled at the Permanent Court of Arbitration, housed in the same Palace of Justice in The Hague as the ICJ. While that case is being held

behind closed doors, the ICJ hearings will for the first time shine a very public light on Australia’s alleged skulduggery. “This is going to be pretty hard on Australia’s image, it’s not exactly glorious for them,” international law expert Olivier Rentelink from The Hague’s Asser Institute told AFP. The premises of a former Australian intelligence agent turned whistleblower in the arbitration case against Canberra were also raided. Australia has largely refused to comment on the proceedings, although prime minister Tony Abbott has defended the raids as in the national interest. Dili has asked for “provisional measures” until the ICJ rules on the case, including that the documents be handed to the court and that Australia guarantee it will not intercept communications between East Timor and its legal advisers. AFP

SoftBank enters talks on Sprint-T-Mobile deal Japanese bank and Deutsche Telecom split on deal financing

oftBank Corp, which is seeking to combine its Sprint Corp unit with T-Mobile US Inc, has entered direct talks with T-Mobile’s owner Deutsche Telekom AG to resolve obstacles to a potential deal, people with knowledge of the matter said. While SoftBank has assurances from banks that financing for a deal will be available, an agreement could still take months to reach, one of the people said, asking not to be identified as the information is private. Unresolved issues include how much cash and stock SoftBank will pay for Deutsche Telekom’s 67 percent stake in T-Mobile, and how Sprint and T-Mobile will be integrated, two people said. Deutsche Telekom wants an all-cash offer for T-Mobile, which has a market value of about US$26 billion, and SoftBank is trying to finance a deal to provide as much cash as possible, one of the people said. SoftBank founder and president Masayoshi Son

regulators, people have said. Also still to be resolved are the size of a breakup fee in case regulators strike down a deal, two of the people said. AT&T Inc had to pay roughly US$7 billion in cash and assets when its agreement to acquire T-Mobile fell apart in 2011, following opposition from the United States Justice Department and Federal Communications Commission. Mr Son, who serves as Sprint’s chairman, has told banks he doesn’t want to pay a large breakup fee because the company is already carrying a lot of debt, people said last month. A Sprint bid for T-Mobile “would hit a lot of static from federal regulators and antitrust officials,” Jeff Silva, a Washington-based analyst with Medley Global Advisors, said in an interview. There isn’t “political appetite for seeing the national field reduced by one, especially if that one is a maverick carrier,” Mr Silva said.

is seeking to borrow about US$20 billion from banks, people said last month. Sprint would take on any debt relating to the deal, one person said. Combining Sprint and T-Mobile would give each company a better chance of long-term success against AT&T Inc and Verizon Communications Inc. Sprint’s management isn’t controlling deal talks and knows Mr Son will make the decision on whether or not to push ahead with a deal, another person said. Sprint chief executive officer Dan Hesse knew Mr Son wanted to acquire T-Mobile when he agreed to sell SoftBank the majority of the company, the person said.

Beating Verizon No structure for a deal exists, and agreement must be reached at the boards of Deutsche Telekom, SoftBank, Sprint and T-Mobile, one of the people said. The deal may also face objections from

SoftBank wants to combine its Sprint Corp unit with T-Mobile US

Bloomberg News

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Asia

East Timor became a sovereign state in 2002 and depends heavily on oil and gas revenue

India, Pakistan to allow Bahrain courts Asian airlines Country lagging behind Gulf rivals greater land trade in competition for aviation hub status Military tensions on border dampen bilateral trade target

Deena Kamel Yousef

Manoj Kumar

ndia and Pakistan agreed on Saturday to allow round-the-clock movement of trucks and containers through their main border crossing, signalling a thaw in relations after a year’s standoff over military tensions on the border. Trade ministers of the two countries meeting in New Delhi also approved a liberalised visa policy for businessmen to help expand two-way trade, which was barely US$2.5 billion in 2012/13 fiscal year against a potential US$10 billion. Both sides hope closer integration of Pakistan with India’s giant economy would help lay the ground for a lowering of political tensions between them. “We have agreed that we will open Wagah-Attari border 24/7 for trade,” Anand Sharma, India’s trade minister told reporters, referring to the main border crossing in Punjab. The border gates at the moment are open only from dawn to dusk. Pakistan also agreed to provide non-discriminatory market access to Indian companies. Over the last year there

was little movement on trade because of a series of incidents over military control of the line dividing Kashmir between the two countries. Two years ago, the two countries set a goal of taking bilateral trade to US$6 billion by 2014, which now seems difficult to attain. Pakistan’s Commerce minister Khurram Dastgir Khan said the country’s central bank had proposed its Indian counterpart grant banking licences to three Pakistani banks, a move which would be reciprocated by his side. “In the banking sector we are hoping to have some progress, very rapid progress,” he said. Both Indian prime minister Manmohan Singh and Pakistan’s Nawaz Sharif who took power last year are keen to rebuild ties. Pakistan’s economy grew at 3.6 percent in 2012/13 and the government was forced to borrow US$6.7 billion from the International Monetary Fund to avert a default of payments. Mr Sharma said he will lead a business delegation to Pakistan next month. Reuters

ahrain Airports Co said it’s in talks with Asian airlines as it seeks to attract more services to a hub that’s undergoing a US$980 million upgrade aimed at doubling capacity to 13.5 million passengers over five years. BAC is targeting half a dozen carriers from China, India, Indonesia, the Philippines, Malaysia and Singapore with “aggressive incentives,” chief executive officer Mohamed Yousif AlBinfalah said Saturday in an interview. The state-owned company expects to boost passenger numbers 6 percent in 2014 from last year’s 7.4 million. Bahrain is touting for business after losing out to Dubai, Abu Dhabi and Qatar in the competition for major hub status after national carrier Gulf Air grew at a slower pace than

local rivals, leading to losses that resulted in job and route cuts. Terminal-expansion work at Bahrain International Airport should begin at the end of this year following a tender for construction contracts in the third quarter, Mr Al-Binfalah said. “The fundamental market is there; to us it’s a matter of who picks up business in the market, whether it’s Gulf Air or regional carriers who have increased frequency to Bahrain,” he said at the Bahrain Air Show. While the airport may not have access to the millions of customers lured by Dubaibased Emirates, the world’s biggest international carrier, it serves as a gateway to Saudi Arabia, the biggest Gulf economy, and is integrated with Bahrain’s Khalifa bin Salman port, he said. Dubai International

Airport said it was set to surpass its forecast of 65.4 million passengers for 2013. Still, the airport is now a “tired asset,” Mr Al-Binfalah said, designed with a capacity of 4 million passengers – barely half 2013’s total – and last upgraded in 1994. The government plans to invest US$80 million on addressing the most urgent needs involving security, safety and maintenance, with US$900 million earmarked for terminal expansion. BAC signed a total of US$7 million in contracts for upgrades during the Bahrain Air Show, Mr AlBinfalah said. Plans for a new airport will be reviewed in five to 10 years depending on passenger numbers and may involve expansion of the existing site or construction at a new site, he said.

Bahrain Airports signed US$7 million in contracts during Bahrain Air Show

Bloomberg News

14 14

January 20, 2014 April 19, 2013

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

Max 83.2

average 81.937

Min 78.9

Last 83.2

83.3

120.1

82.2

118.9

81.1

117.7

80.0

116.5

78.9

34.6

Max 120.1

average 118.812

Min 115.4

Last 120.1

65.1

64.2

63.3

Max 65.05

average 64.227

Min 62.45

Last 64.95

62.4

Max 25.85

average 25.529

Commodities PRICE

DAY %

YTD %

(H) 52W

94.37

0.436355896

-4.115017273

106.2200012

85.56999969

BRENT CRUDE FUTR Mar14

106.48

0.690307329

-3.664163575

112.4399948

96.31999969

GASOLINE RBOB FUT Feb14

262.04

0.974914261

-5.940629599

286.9299889

243.68999

GAS OIL FUT (ICE) Mar14

910.25

0.858725762

-3.34483674

954.5

840

4.326

-1.277955272

2.269503546

4.770000458

3.476000071

302.37

1.31345284

-1.353908391

317.8399801

278.4999847

Gold Spot $/Oz

1254.05

1.3177

4.2661

1696.2

1180.57

Silver Spot $/Oz

20.3075

1.471

3.8343

32.46

18.2208

Platinum Spot $/Oz

1453.88

2.4083

7.2381

1742.8

1294.18

Palladium Spot $/Oz

748.25

1.334

5.2391

786.5

629.75

LME ALUMINUM 3MO ($)

1821.5

1.307007786

1.180391612

2174

1736.25

LME COPPER 3MO ($)

7340

0.410396717

-0.27173913

8346

6602

LME ZINC

2079

0.241080039

1.167883212

2230

1811.75

NY Harb ULSD Fut Feb14

3MO ($)

LME NICKEL 3MO ($)

14695

5.71942446

18770

13205

15.6

0.128369705

2.127659574

16.77000046

15.12000084

AGRICULTURE ROUGH RICE (CBOT) Mar14

424

-0.934579439

0.473933649

606.5

406.25

WHEAT FUTURE(CBT) Mar14

563.5

-1.615015277

-6.897976043

845

560.5

SOYBEAN FUTURE Mar14

1316.5

0.114068441

1.856866538

1377.75

1174

COFFEE 'C' FUTURE Mar14

117.15

-1.013941698

5.826558266

172.25

104.1499939

15.22

-1.488673139

-7.251675807

20.36999893

15.09999943

CORN FUTURE

Mar14

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

86.8

0.707750401

2.551984877

90.61000061

76.65000153

World Stock Markets - Indices NAME

Last 25.70

(L) 52W

WTI CRUDE FUTURE Feb14

NATURAL GAS FUTR Feb14

METALS

Min 24.95

115.3

34.0

Max 35.15

average 334.441

Min 33.45

Last 35.15

33.4

25.9

36.5

25.7

36.3

25.5

36.1

25.3

35.9

25.1

35.7

24.9

Max 36.45

average 36.00

Min 35.55

Last 36.05

35.5

Currency Exchange Rates

NAME ENERGY

35.2

COUNTRY MAJOR

ASIA PACIFIC

CROSSES

NAME

-5.756931

5.12

3.29

1039981

-1.675978

4.451036

18.22

11.08

866149

1.76

3.529412

2.32558

2.12

0.75

8784575

24.4

0.8264463

-1.810867

22.85

5212105 1228000

CENTURY LEGEND

0.45

5.882353

4.651161

0.68

0.26

CHEUK NANG HLDGS

7.18

-1.778386

1.843969

7.45

58000

CHINA OVERSEAS

21.65

-0.9153318

-0.6880699

17.7

14735927

CHINESE ESTATES

19.04

0.5279831

-20.99585

24.7

10.384

26000

CHOW TAI FOOK JE

11.6

-3.171953

0.3460171

13.38

7.44

10972400

16588.25

13571.86

NASDAQ COMPOSITE INDEX

4197.582

-0.5002977

0.5026155

4219.276

3105.365

1.188456

6875.62

6023.44

HANG SENG BK

NIKKEI 225

15734.46

-0.08090327

-3.418077

16320.22

10441.11

(L) 52W VOLUME CRNCY

AMAX INTERNATION

-0.7124451

7418.36

(H) 52W

BOC HONG KONG HO

0.2530912

9789.89

0.8764 1.4814 0.88 1.2746 88.06 7.9818 7.7514 6.0393 52.89 28.56 1.2251 28.94 40.555 9603 86.41 1.21196 0.82307 7.8281 10.195 117.06 1.0289

-0.4504505

16458.56

1.997452

1.0582 1.6603 0.9839 1.3893 105.44 8.0111 7.7664 6.2492 68.845 33.148 1.2862 30.228 45.17 12281 105.433 1.265 0.88151 8.4957 11.0434 145.69 1.032

4.42

0.2598349

-1.5804 -0.4666 -2.0657 -1.6202 0.6423 -0.02 -0.0155 0.0744 0.4062 -0.1067 -0.9404 -1.1868 -1.3773 0.6616 2.2324 -0.4754 1.1716 1.3389 1.1362 2.308 0

17.6

DOW JONES INDUS. AVG

9742.96

-0.0797 0.5572 -0.2527 -0.5435 0.3834 -0.0113 -0.0052 0.1025 -0.0122 -0.0396 -0.2037 -0.2055 0.2333 0.2812 0.4705 0.2758 1.0964 0.1336 0.0386 0.9416 0

ARISTOCRAT LEISU

(L) 52W

0.8781 1.6424 0.9101 1.3541 104.32 7.9882 7.7551 6.0498 61.55 32.81 1.2761 30.165 45.015 12091 91.604 1.23257 0.82449 8.2308 10.8693 141.25 1.03

CROWN RESORTS LT

(H) 52W

DAX INDEX

(L) 52W

YTD %

6829.3

(H) 52W

DAY %

YTD %

PRICE

FTSE 100 INDEX

DAY %

Macau Related Stocks

COUNTRY

0.2036558

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

PRICE

EMPEROR ENTERTAI

4.53

2.027027

13.25

4.66

1.93

2095800

FUTURE BRIGHT

4.75

-2.263374

1.279316

5.3

1.609

8188000 15159530

GALAXY ENTERTAIN

83.2

5.316456

19.62616

83.4

124.3

1.221498

-1.113761

132.8

110.6

988213

HOPEWELL HLDGS

26.6

0.9487666

1.333333

35.3

23.2

997170

HSBC HLDGS PLC

85.85

-0.232423

2.0202

90.7

77.85

14477701

2.96

1.718213

0.6802701

4.66

2.5

11972000

LUK FOOK HLDGS I

27.5

0.9174312

-6.779661

16.88

2031000

MELCO INTL DEVEL

31.4

5.369128

10.17544

32.5

11.52

9297168

HUTCHISON TELE H

HANG SENG INDEX

23133.35

0.6392473

-0.7424617

24111.55078

19426.35938

CSI 300 INDEX

2178.488

-1.508063

-6.503697

2791.303

2023.171

TAIWAN TAIEX INDEX

8596

-0.1870622

-0.1801051

8668.95

7637.2

MGM CHINA HOLDIN

35.15

4.457652

6.193358

15.457

6900941

KOSPI INDEX

1944.48

-0.655999

-3.324152

2063.28

1770.53

MIDLAND HOLDINGS

3.76

1.347709

0.804289

4.29

2.68

2084000

S&P/ASX 200 INDEX

5305.869

-0.06033069

-0.8658259

5457.3

4632.3

158369000

JAKARTA COMPOSITE INDEX

4412.228

-0.005915029

3.229892

5251.296

3837.735

NEPTUNE GROUP

0.325

3.174603

-4.411766

0.4

0.131

NEW WORLD DEV

10.32

1.176471

5.413688

15.12

9.35

9810108

SANDS CHINA LTD

64.95

3.505976

2.525654

67.15

33.5

18940775

FTSE Bursa Malaysia KLCI

1813.01

-0.6041567

-2.889722

1882.2

1597

SHUN HO RESOURCE

1.67

1.212123

1.92

1.33

NZX ALL INDEX

1035.034

-0.5102168

3.617901

1048.998

904.128

SHUN TAK HOLDING

4.9

3.375527

7.456142

4.93

3.27

32190759

PHILIPPINES ALL SHARE IX

3655.1

0.1561901

1.128291

4571.4

3440.12

10595712

Euromoney Dragon 300 Index Sin

602.98

-0.2

-1.39

STOCK EXCH OF THAI INDEX

1295.41

-0.4663921

-0.2540927

1649.77

1205.44

HO CHI MINH STOCK INDEX

543.59

1.883645

7.720512

549.88

440.48

Laos Composite Index

1244.8

-0.6805795

1455.82

1224.94

SJM HOLDINGS LTD

25.7

1.984127

-1.153846

17.04

SMARTONE TELECOM

8.76

-0.6802721

-1.128664

14.46

7.38

5621000

36.05

1.264045

2.560451

38.25

21140166

WYNN MACAU LTD ASIA ENTERTAINME

N/A

BALLY TECHNOLOGI

81.39

0.7426662

3.747614

81.8525

45.38

454977

BOC HONG KONG HO

3.17

-1.552796

3.6

2.99

15478

GALAXY ENTERTAIN

10.763

5.851692

19.45616

10.81

3.8975

37077 5806408

INTL GAME TECH

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

17.77

2.185164

-2.147576

21.2

14.75

JONES LANG LASAL

103.83

-0.9822621

1.406388

105.78

80.86

207592

LAS VEGAS SANDS

81.93

1.310746

3.879799

81.96

47.95

4401370 2550868

MELCO CROWN-ADR

44.97

1.673073

14.66088

45.4799

17.76

MGM CHINA HOLDIN

4.48

3.464203

3.944317

4.66

1000

MGM RESORTS INTE

26.41

2.443755

12.28741

26.7

11.72

14797578

SHFL ENTERTAINME

N/A

23.25

13.88

SJM HOLDINGS LTD

3.33

2.461538

-0.2993986

3.6

2.2

10285

WYNN RESORTS LTD

215.7

2.670284

11.06534

215.99

111.3456

1709625

AUD HKD

USD

Hang Seng Index NAME

PRICE

DAY %

VOLUME

PRICE

DAY %

VOLUME

AIA GROUP LTD

30.2

1.003344

16574881

CHINA UNICOM HON

13.68

1.333333

22775492

ALUMINUM CORP-H

3.61

15433022

CITIC PACIFIC

10.12

0.1980198

6468988

BANK OF CHINA-H

3.15

1.286174

329406866

BANK OF COMMUN-H

5.87

0.8591065

37793438

0.1727116

14.5

BANK EAST ASIA BELLE INTERNATIO

NAME

CLP HLDGS LTD

NAME

PRICE

DAY %

64.4

0.625

2568679

SANDS CHINA LTD

28.75

-0.1736111

6213954

SINO LAND CO

14.28

0.990099

7686664

SUN HUNG KAI PRO

109.1

1.018519

8616634

-0.4815409

2456828

265.6

1.45149

2048509

23.9

2206357

0.8064516

5926157

52.75

1.05364

3208615

POWER ASSETS HOL

65.6

1561243

CNOOC LTD

16.32

0.4926108

46287676

1260442

COSCO PAC LTD

11.76

3138217

SWIRE PACIFIC-A

7192500

ESPRIT HLDGS

12.44

-0.48

4211743

TENCENT HOLDINGS

0.2087683

10140777

HANG LUNG PROPER

26.55

-0.1879699

7812341

TINGYI HLDG CO

CATHAY PAC AIR

13.78

0.2911208

3140232

HANG SENG BK

119.7

0.167364

1690249

WANT WANT CHINA

CHEUNG KONG

114.9

1.23348

3918568

HENDERSON LAND D

2.059087

5880582

WHARF HLDG

75.55

0.1325381

701703

1.112235

6329376

125.6

3.54493

9625332

76.5 -0.06531679

9291476

BOC HONG KONG HO

CHINA COAL ENE-H

7.7

-0.1297017

40174849

CHINA CONST BA-H

5.87

1.206897

202072100

CHINA LIFE INS-H

22.9

0.4385965

30126882

CHINA MERCHANT

25.6

0.3921569

4209584

CHINA MOBILE

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

85.45

1.064459

16569813

HUTCHISON WHAMPO

CHINA OVERSEAS

20.2

-0.2469136

19374736

IND & COMM BK-H

CHINA PETROLEU-H

8.36

0.9661836

101198904

CHINA RES ENTERP

25.2

0.8

77.35

1.243455

6697663

5.17

1.372549

317570965

LI & FUNG LTD

12.84

-0.9259259

17517410

4219717

MTR CORP

29.85

1.530612

4880670

MOVERS

VOLUME

3 23242

INDEX 23133.35 HIGH

23241.64

LOW

22845.4

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

22845

15-January

17-January

15 15

January 2014 April 19,20, 2013

Opinion Business

wires

Leading reports from Asia’s best business newspapers

India bets on Modinomics, whatever it is

China Daily China has granted licences to import gold to two foreign banks for the first time, sources said, as moves to open the world’s biggest physical bullion market gather pace. Allowing more banks to import gold could increase the supply of the metal into the country, easing local prices that are higher than in most Asian nations. China’s gold imports more than doubled last year to over 1,000 tons – ousting India as the biggest buyer – as demand soared to unprecedented levels due to the first drop in international prices in 12 years.

William Pesek

Bloomberg View columnist

Asahi Shimbun The Bank of Japan said the economy is recovering in all nine regions of the country for the first time since April 2005, when it began compiling its quarterly Sakura Report. Increased production by exporters backed by a weaker yen, large-scale government investment projects, and a pick-up in personal spending ahead of the consumption tax hike in April pushed up the regional economies, according to the latest report. The report upgraded its assessment of five regions, including Hokuriku, Hokkaido, Tokai, Chugoku and Shikoku.

Korea Herald South Korea’s tech giant Samsung Electronics Co Ltd was considered one of the leading brands in major overseas markets, data showed on Friday, reflecting its rising presence in the global market. According to the data by London-based market researcher YouGov, Samsung made the top 10 list of popular brands in 12 countries among 15 places surveyed. YouGov attributed Samsung’s rising presence to the increased popularity of its Galaxy smartphone line-up along with its Galaxy NX smartcameras.

Jakarta Globe Several large auto parts makers are expected to spend a combined US$1.5 billion in total investment to manufacture automotive products in Indonesia, a high level official at the Industry Ministry said. “The components industry is likely to also receive big investment, following recent investment in [automotive] assembling,” said Budi Darmadi, director general for high-technology industries at the ministry. He said around 20-30 automotive component makers may invest in the country this year, but did not provide the names of any specific companies.

Narendra Modi

sia has grown inordinately fond of “-nomics,” slapping the suffix on grand-sounding growth programs in such places as Japan, the Philippines, South Korea, Thailand and China. Thus far, the policies behind these monikers – based on the names of national leaders Shinzo Abe, Benigno Aquino, Park Geun-hye, Thaksin Shinawatra and Xi Jinping, respectively – have met with mixed success: Abenomics (all hype, no substance); Aquinomics (a reasonable winner); Parkonomics (a work in progress); Thaksinomics (seen the streets of Bangkok lately?); Xiconomics (way too soon to tell). Add one more to the list: Modinomics. India is abuzz about the supposed economic chops of opposition leader Narendra Modi, who could be running India five months from now. Can his programme steer India away from a full-blown financial crisis and toward double-digit growth? Who knows? Modi’s programme remains disturbingly vague in details, which leaves me with three worries: Modi might turn out to be India’s Abe; his party isn’t the panacea investors think it is; and the nation’s gridlock may be set to get even worse. Markets love the idea of a Modi-led government because of his success in the western state of Gujarat. Chief minister there since 2001, Modi cut red tape for businesses, attacked graft and produced 10 percentplus growth rates. The idea is that Modi will apply his “Gujarat model” nationally and smash through India’s dysfunction and vested

interests. Prone to Ayn Randesque dictums such as “I believe government has no business to do business,” Modi might sell off sprawling state-owned enterprises that stifle competitiveness. But asked repeatedly how even a charismatic leader can ram reforms down the throats of reluctant states, many also run by powerful and ambitious personalities, Modi has consistently avoided answering.

Powerful parties His argument – essentially, “Just wait and see what I will accomplish!” – reminds me of Abenomics in Japan. A year after Prime Minister Abe came to office pledging dramatic moves to open and deregulate a fossilised economy, he’s implemented none. Stock traders are euphoric; average Japanese have buyer’s remorse. My second concern: Modi still has to deal with his own party. Ten years ago, the Bharatiya Janata Party was unceremoniously shown the door. At the time, Prime Minister Atal Bihari Vajpayee’s splashy re-election slogan was “India Shining”. Millions who didn’t feel part of the magic retorted with their own: “We won’t be ignored.” The BJP’s successes were easy to articulate: rapid growth, an information-technology boom, rising stocks, some key state asset sales. Harder to explain was the failure to spread economic benefits to the 99 percent. The BJP has given little indication that it has since figured out

that conundrum – or that it cares to do so. Though Modi plays on his own humble beginnings, one man is rarely a match for India’s powerful parties. I have little good to say about the ruling Congress Party’s leadership over the past decade. But Prime Minister Manmohan Singh did take a variety of bold steps: introducing the Right to Information Act to boost transparency and expose graft; giving markets a bigger role in setting fuel prices; opening investment in retail, aviation and other sectors to foreigners; championing new land-acquisition laws; opening the door to nuclear power. These successes were simply eclipsed by the fecklessness of a party that squandered infinitely more opportunities than it created.

Complex relations When Modi needs to be currying favour with chief ministers to expand the “Gujarat model,” he’ll also be preoccupied with battling the elites in his own party. And others as well: The sudden rise of the Aam Aadmi (“Common Man”) Party has increased the chances that neither Congress nor the BJP will emerge from elections with a commanding majority. When it comes time to build a workable coalition, Modi’s personal baggage will weigh especially heavily. Anti-Muslim violence on his watch in Gujarat in 2002 claimed more than 1,000 lives. Modi’s reputation as a hardline “Hindu nationalist” turns off many smaller regional parties.

India doesn’t have any time to waste, not with China barrelling ahead and credit‑rating agencies on the verge of downgrading Indian debt to junk

The elections could well leave India with a hung parliament in which no party has even a slight mandate. India doesn’t have any time to waste, not with China barrelling ahead and creditrating agencies on the verge of downgrading Indian debt to junk. Bad loans at the nation’s banks are at a record high, which will restrain lending and could spark a financial crisis. Smart and credible as he is, central bank Governor Raghuram Rajan has no control over the twin budget and current-account deficits that have sent the rupee to record lows. If Modi really does have a specific plan for how to address India’s economic woes, he’d better lay it out soon. Bloomberg View

16 16

January 20, 2014 April 19, 2013

Closing US merchants under cyber attack

Dropbox clinches BlackRock investment

A cybercrime firm says it has uncovered at least six ongoing attacks at United States merchants whose credit card processing systems are infected with malicious software used to steal data from Target Corp. Andrew Komarov, chief executive of the cybersecurity firm IntelCrawler, told Reuters that his company has alerted law enforcement, Visa Inc and intelligence teams at several large banks about the findings. He said payment card data was stolen in the attacks. IntelCrawler’s findings are the latest sign that the cyberattacks disclosed by Target and Neiman Marcus are part of a wider assault.

Dropbox Inc, the provider of online document storage and collaboration tools, raised financing from BlackRock Inc and others that values the company at US$10 billion, said a person with knowledge of the deal. BlackRock led the investment, which totaled US$250 million, said the person, who asked not to be identified because the transaction hasn’t been announced. Dropbox, based in San Francisco, previously raised money in 2011 at a US$4 billion valuation. With the current financing, Dropbox is one of the world’s most highly valued technology startups. Dropbox has about 200 million users.

HK domestic helpers rally for ‘tortured’ maid Criticism from rights groups over how maids are treated is growing

Shell misses profit goal as oil costs soar

Organisers claimed around 5,000 people participated in the rally

housands of domestic helpers took to the streets of Hong Kong yesterday to demand justice for an Indonesian maid allegedly tortured by her employers, the second such rally in a week. Erwiana Sulistyaningsih, 22, was reportedly left unable to walk following eight months of abuse in the southern Chinese city and was admitted to an Indonesian hospital in critical condition last week after returning home. Protesters including maids, rights activists and migrant group members marched through the commercial area of Wanchai, many brandishing the Indonesian national flag and chanting slogans including “Justice for Erwiana”. They handed a petition to Hong Kong Police commissioner Tsang Wai-hun urging faster progress in the case before marching to the city’s government headquarters. “We want the investigation to speed up and we demand the Hong Kong government to stop abuses on domestic helpers in Hong Kong,”

Eni Lestari, chairwoman of the International Migrants Alliance and rally spokeswoman, told reporters at the protest. The allegations have renewed concern about the treatment of domestic helpers in the city following a spate of similar abuse cases and recent criticism by rights groups. Hong Kong police had at first categorised the alleged torture as a miscellaneous case but last week launched a criminal investigation after an outcry by domestic helpers in the city. On Friday authorities said investigators will travel to Indonesia to speak to Ms Sulistyaningsih, who remains in hospital in Sragen on the main island of Java. “Without this kind of protest the case of Erwiana will never go to the public or go to the court. There will be no justice,” Ms Lestari said, adding that two other maids have since come forward alleging abuse at the hands of the same employer. The agency that employed Erwiana has said they were unaware of her

injuries until they were notified by their corresponding agency in Indonesia. Organisers claimed around 5,000 people participated in the rally, a sharp increase in numbers from a similar march on Thursday which drew several dozen protesters. Hong Kong is home to nearly 300,000 maids from mainly Southeast Asian countries – predominantly Indonesia and the Philippines – and criticism from rights groups over their treatment is growing. A Hong Kong couple were jailed in September for attacks on their Indonesian domestic helper, which included burning her with an iron and beatings with a bike chain. Amnesty International in November condemned the “slaverylike” conditions faced by thousands of Indonesian women who work in the Asian financial hub as domestic staff and accused authorities of “inexcusable” inaction. Domestic helpers in Hong Kong are paid about HK$4,000 (US$515) a month. AFP

ess than three weeks after taking charge at Europe’s largest oil company, Ben van Beurden’s challenge is already clear: get a grip on spending. Royal Dutch Shell Plc’s surprise announcement Friday that fourthquarter earnings would fall to the lowest since 2009 showed the rising cost of developing new fields has cut into profit. While Brent oil prices have spent three straight years above US$100 a barrel, getting crude out of the ground is only getting more expensive. Shell, where the new chief executive officer needs to address expenditure that exceeded a record US$44 billion last year, is the most acute case of a malaise affecting the whole exploration industry. At the same time, Schlumberger Ltd, the largest oilfield-services provider, Friday said profit rose 22 percent as customers spent more in the fourth quarter. “Shell has realised that it can’t keep throwing money at projects and saying it’ll be OK in the long term,” said Iain Armstrong, an equity analyst at broker Brewin Dolphin Ltd in London. “In the past four to five years, we’ve seen higher finding costs and significant increases in expenditure. The whole sector has got to be worried that recent levels of dividend growth won’t be sustainable.” Shell saw the cost of finding and developing oil fields triple from 2003 to 2012, in line with the 12 largest European oil producers, data compiled by Bloomberg Industries show. Bloomberg News

Shell warned that fourth quarter results would be ‘significantly lower’ than usual