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Ministry backs free trade zone for Pearl River Delta
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Luso International opens bank office on Hengqin Island
Chief Executive 1 denies ‘meddling’ with Taipa North plan
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Year II
Number 463 Monday January 27, 2014
Editor-in-chief Tiago Azevedo
Deputy editor-in-chief
Vitor Quintã
Guarantee April 19, 2013 a basic TV service, govt advised
‘Mainland’s Vegas’
has lights dimmed – for now A
five-star resort on the mainland’s holiday island Hainan – featured by Business Daily last year for running casino-style gaming under a so-called “special entertainment facility” licence – has reportedly been severely reprimanded by a local official. It follows an investigative report by state broadcaster China Central Television. Wang Yong, mayor of Sanya city on China’s southern holiday island, was quoted by Xinhua, an official news agency, saying the authorities would “mercilessly punish” Mangrove Tree Resort World. The latest twist raises the question of why – if the local government is so against the scheme – was Jesters not only allowed to reopen, but also another facility – Ocean Sonic Resort – allowed to create facilities and advertise in the Chinese-language media for “casino staff” – as this newspaper reported last year. More on page 3
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January 24
Work-to-rule at casino over bonuses, salaries
Bosses, workers to pay 5 pct each to retirement pot
Casino staff at the Sociedade de Jogos de Macau SAlicensed Grand Emperor Hotel held a work-to-rule on Friday and Saturday. On each day action spanned one hour and involved on-duty staff declining to cover for any late arriving colleagues at shift change times said a workers’ representative. Macau has previously seen a sit-in by other casino cleaning staff about pay and conditions. Industrial action by gaming workers is rare.
Ten percent of employee monthly wages must in future be paid to the government’s provident fund, in order to support permanent residents in their retirement. The administration didn’t say whether the levy – to be shared equally between the government and each employee – would be raised on gross salary or on the net amount after any income or professional taxes. Nor was a firm date given for the policy’s introduction.
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Interview
HSI - Movers Name
%Day
LENOVO GROUP LTD
1.16
HANG LUNG PROPER
0.87
SINO LAND CO
0.75
CHINA UNICOM HON
0.58
TINGYI HLDG CO
0.46
WHARF HLDG
-2.73
HONG KG CHINA GS
-2.83
BANK EAST ASIA
-2.88
TENCENT HOLDINGS
-4.02
HENGAN INTL
-5.90
Source: Bloomberg
Good deals can still be had, says estate agent
I SSN 2226-8294
Housing prices are rising but good deals can still be had in Macau’s property market, says the managing director of estate agency Ambiente Macau Ltd, Suzanne Atkinson. Ms Atkinson told Business Daily that people moving into newer homes left behind some “really old, nice homes” which were affordable. The estate agent said Macau people were moving into the housing market over the border on Hengqin Island. Pages 6 & 7
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January 27, 2014 April 19, 2013
Macau Slow uptake for mainland maids Despite Macau’s chronic labour shortages, as of Friday a quarter of the government’s import quota for mainland maids had not been filled. The Human Resources Office said in a press statement that between December 16 and January 23, it had received 226 applications to employ mainland maids, while the actual quota allowed is for 300. The window to apply for quota will close at noon on January 30. The government’s pilot scheme, announced last year, aims to import 200 maids from China’s Guangdong province and 100 maids from Fujian province to Macau.
Sands China to pay dividends next month Sands China Ltd on Friday said it would pay an interim dividend of 87 HK cents (11 US cents) per share and a special dividend of 77 HK cents per share to stockholders registered as at February 14. It expects to make the payments on or about February 26. Sheldon Adelson, chairman of Sands’ parent firm Las Vegas Sands Corp, stated in LVS’s third quarter earnings call that in the previous 21 months more than US$5 billion had been returned to the owners in the form of dividends and stock repurchases, including US$700 million to Sands China’s shareholders.
Chimelong resort to start trials tomorrow Chimelong International Ocean Resort, first phase of the theme parks for Guangzhou Chimelong Group Co Ltd on Hengqin Island, starts trial operation on January 28, said the company’s website. Mainland Chinese media also quoted Chimelong saying 80 percent of facilities – including an aquarium, a white whale exhibit and fairground roller coasters – would be ready. The resort was originally due to open last year. The company has said the first phase is expected to draw 20 million visitors a year and could help Hengqin Island and its new facilities generate more than 50 billion yuan (65.5 billion patacas) annually.
Work-to-rule at casino over bonuses, salaries SJM ‘family’ shows dysfunctional side as casino staff at satellite operation take industrial action over pay Tony Lai
tony.lai@macaubusinessdaily.com
C
asino staff at the Sociedade de Jogos de Macau SA-licensed Grand Emperor Hotel held a work-to-rule on Friday and Saturday. On each day the action lasted for one hour and involved on-duty staff declining to cover for any late arriving colleagues at shift change times, said a workers’ representative. Although in the past Macau has seen a sit-in by cleaning staff at another casino licensee in a row about pay and conditions, any form of industrial action by casino staff is rare. The weekend’s action was linked to a dispute about yearly bonuses and salary hikes, a senior union official told Business Daily. It involved the live dealer gaming tables operation. At the heart of the trouble appears to be the fact that there are different pay structures and conditions for staff in SJM-licensed casino-hotels – most of which are managed by third parties. SJM was founded by Macau’s former monopolist in the gaming industry, Stanley Ho Hung Sun. Just because a casino is licensed by SJM, doesn’t mean the staff are entitled to the pay and conditions agreed by SJM for its core operations at Casino Lisboa, Grand Lisboa and Casino Oceanus. In the past, casino workers at some SJM satellites have actually managed to negotiate better terms than gaming workers in the core operation.
Family differences On January 2, SJM announced a salary increase of five percent for all its core employees, effective from January 1, plus a bonus – referred to as “a living subsidy for 2014” – worth
Group urges criminal charges on illegal inns A pressure group founded by entrepreneur and legislator Chan Meng Kam urges the government to criminalise the act of running illegal inns, to increase the deterrent effect. Chan Tak Seng, vice-president of the Alliance of Macau People Institution, on Saturday complained the current rule was not strict enough. He said only 10 percent of illegal accommodation cases recorded in the past four years had actually paid their fines. Data from the Macau Government Tourist Office last week said it had fined 253 people since 2010 for such violations but in only 27 cases had offenders paid the penalties.
Grand Emperor Hotel on Macau peninsula
175 percent of one month’s salary for workers earning fewer than 17,000 patacas (US$2,125) a month. Other employees will be given bonuses worth 125 percent of a month’s salary, up to a ceiling of 29,750 patacas. Ieong Man Teng, president of Forefront of Macau Gaming, told this newspaper the action broke out as the casino employees only got bonuses equivalent to one additional month’s salary this year instead of 2.5 months as happened in the past. Casino staff at Grand Emperor with no record last year of sick leave had been expecting to get 14 extra days of salary. That didn’t happen, said Mr Ieong, adding the management had also so far not set out the plan for salary increases during 2014. His association has been helping the employees to negotiate with the casino’s management board. The Grand Emperor’s management on Saturday told the Chineselanguage news service of local public broadcaster TDM that work had returned to normal that day. The employees’ side said the industrial action had been halted but key issues remained unresolved. Nearly 1,000 frontline employees of the gaming portion of the venue – described on the Grand Emperor’s website as Emperor Palace Casino – were involved in the work-to-rule, according to the union. Also according to the union’s version of events, quoted by Chineselanguage media, the work-to-rule suspended the operation of two-thirds of the gaming tables in the premises. No estimate was given in reports of the possible cost in gaming revenue terms of the action.
The casino-hotel, controlled by Hong Kong-listed Emperor Entertainment Hotel Ltd, has 67 mass-market gaming tables and 10 VIP gaming tables, according to the company’s filings to the Hong Kong Stock Exchange.
‘Misunderstanding’ Business Daily approached the management of Emperor Palace Casino for comment but no response was available by press time. But the management told TDM on Saturday that the dispute was a “misunderstanding” on the calculation of bonuses but had been resolved. “The casino operation has returned to normal,” it added. A memorandum to the employees issued by the casino general manager Bernard Lai on Saturday – and obtained by Mr Ieong’s association – said the casino will pay a second of bonus – worth a month’s salary per staff – on June 30, to complement the month’s salary bonus already paid this month. “The salary for all-level employees and other benefits starting January 1, 2014 will follow the mechanism of SJM,” said the memorandum seen by this newspaper. But Mr Ieong gave Business Daily a different version of events. “The strike has been halted but consensus has not been reached on the salary increase and other benefits,” he told us. “The employees will continue to discuss among themselves and meet the management in the coming week. They will then decide what they will do next.” With Michael Grimes
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January 2014 April 19,27, 2013
Macau
‘Mainland’s Las Vegas’ dimmed – for now Sanya government claims will ‘mercilessly punish’ Hainan resort for casino-style entertainment Tony Lai
tony.lai@macaubusinessdaily.com
A
five-star resort on the mainland’s holiday island Hainan – featured by Reuters and by Business Daily last year for running casino-style gaming under a so-called “special entertainment facility” licence – has reportedly been severely reprimanded by a local official following an investigative report by state broadcaster China Central Television. Wang Yong, mayor of Sanya city on China’s southern holiday island, was quoted by Xinhua, one of China’s official news agencies, saying the authorities would “mercilessly punish” Mangrove Tree Resort World. As this newspaper has previously reported, it has what’s sometimes referred to as a ‘cashless casino’ involving the use of pre-paid cards for betting, rather than cash at the tables. The resort tried to get round the mainland’s ban on casino gaming by issuing not cash as prizes but points, that could be redeemed to pay for accommodation and luxury goods at the resort. The latest twist raises the question of why – if the local government is so against the scheme – was Jesters, a casino bar at the resort, allowed to reopen after it first closed last February following the Reuters investigation. This newspaper reported as long ago as September about that reopening.
Mangrove Tree Resort World
An investigative report broadcast on Saturday evening by state-run China Central Television (CCTV) confirmed the continued operation of Jesters. In an item titled “A five-star Sanya hotel turns into casino”, CCTV reported Mangrove Tree was even building a second phase, which would be ten times larger than the existing Jesters bar and boost the facility to 30,000 square metres (323,000 sq feet) of floor space.
Guarantee a basic TV service, govt advised Researchers say the government should pay for the rights to relay free-to-air broadcasts to households Stephanie Lai
sw.lai@macaubusinessdaily.com
T
he government should appoint a public or not-for-profit body to relay free-to-air broadcasts to households through the antenna company networks, the draft of a University of Macau study report says. The draft report says this should be a temporary arrangement until the market for television services becomes more diverse and settles down. The draft says the government should ensure that people have access to “basic” television services, meaning free-to-air broadcasts that are “indispensable” for the public good and “fit the watching habits of local residents”. The government commissioned the University of Macau study of the television market last year. The university released the first draft of its study report on Friday. It intends
to finish the study in September. The draft report says the government should pay the holders of the rights to free-to-air broadcasts for permission to relay their broadcasts in Macau. The professor leading the researchers, Tam Kam Weng, said a public or not-for-profit body would relay free-to-air broadcasts to the antenna companies only until the market matured. “Once it gets more diversified and the whole market for television services stabilises, the government can review the basic television services,” Mr Tam told a press conference.
Mum about TDM The draft report does not list the television services that the researchers
CCTV said Chinese characters meaning “China’s Las Vegas” were displayed outside the ongoing construction of the second phase. The broadcaster quoted an unidentified sales manager for the facility saying: “It is quite amazing the entertainment bar can be still open after it has been closed down.” The government of Sanya city immediately called an emergency meeting on Saturday night following the broadcast, Xinhua
consider basic. It says the government should decide which services are basic. Most of Macau’s households get their free-to-air television from the city’s 14 antenna companies, which pick up broadcasts on common antennas and relay them through their local networks of cables. Under an agreement signed in August with Macau Cable TV Co Ltd, the antenna companies relay Macau Cable TV transmissions to households and the government pays the firm 980,000 patacas (US$122,700) a month in compensation. The draft report does not say much more than what government officials have already said. Secretary for Transport and Public Works Lau Si Io said this month that the government wished a body other than Macau Cable TV to relay free-to-air broadcasts. Mr Tam had no comment to make on Friday on whether public broadcaster Teledifusão de Macau SA (TDM) should be the body relaying free-to-air broadcasts. The draft report suggests that the government temporarily extend Macau Cable TV’s 15-year exclusive concession to provide cable television. The company’s concession contract expires on April 21 and the government has said it wishes to end Macau Cable TV’s monopoly. The draft report says extension of the concession would prevent disruption of cable television until the government has awarded contracts to provide television services that viewers pay for. “We suggest that the government should clearly distinguish between
reported yesterday. The agency quoted Mayor Wang saying the local administration would “resolutely investigate”. It “has to mercilessly punish Mangrove Tree Resort World for its repeated violations,” Mr Wang was reported saying. “Sanya, as a tourism city, should provide more healthy entertainment products but illegal products are banned for existence,” added Mr Wang. “[The administration] will resolutely curb any repeated illegal business practices… particularly against those enterprises driven by benefits [wagering].” Xinhua reported the Sanya government had arrested 16 people in five suspected cases of gambling starting this month. The CCTV report quoted the same anonymous sales manager of Mangrove saying revenue from Jesters accounted for half of Mangrove Tree Resort World’s revenue. Mangrove’s second phase casino bar will be a copy from the casino style entertainment in Macau, the manager said. “We have employed [recruited] the casino operation directors in Macau to here… The waiters and dealers are professionally trained by us, in the exact same way as Macau,” the manager said. With Michael Grimes
free television services and paid television services,” said Mr Tam. “The existing free television services should be improved, and the government should also support more locally produced television programmes.” The draft report suggests that households obtain better hardware so they can receive more television channels. It says a survey of 952 viewers conducted in December found that 85.2 percent received television transmissions solely from an antenna company, 6.2 percent received them from both an antenna company and Macau Cable TV and 2.8 percent received them solely from Macau Cable TV.
The existing free television services should be improved, and the government should also support more locally produced television programmes Tam Kam Weng, professor at the University of Macau
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January 27, 2014
Macau
Cross-border Ministry backs Delta insurance policy free trade zone sent to Beijing Guangdong to apply for free trade zone this year,
T
he Macau and Guangdong governments have already submitted to Beijing a plan for a single motor insurance policy for both sides, said the Monetary Authority of Macau. “We have already drafted a feasible plan, which has been approved by both the regulators and the industry,” Anselmo Teng Lin Seng, chairman of the city’s de facto central bank, said on Friday. “We have reported the plan to Beijing and we are now expecting for more information [from the central government],” he said. He added that it is “very likely” there will be only one insurance policy, including premiums charged for both mainland and Macau, for the coverage of vehicles travelling across the border. Such policy was originally expected to be introduced by the end of last year, with a pilot programme planned for Hengqin Island. Mr Teng stressed on Friday they would strive for a quick approval, adding there had not been any divergence between Macau and the neighbouring Guangdong province. The director of the administrative committee of the Hengqin New Area, Niu Jing, had said earlier this month that the proposal could be finalised in the first half of the year. T.L.
says governor
T
he mainland’s Ministry of Commerce said it would back Guangdong province’s proposal to establish a free trade zone incorporating the province and neighbouring Macau and Hong Kong. The proposed free trade zone in Guangdong should feature its advantage in engaging Hong Kong and Macau, and serve the common interests of all three parties, Sun Tong, deputy director-general of the Department of Taiwan, Hong Kong and Macau Affairs at the ministry, was quoted as saying by mainland media. In a report delivered to the provincial legislature last week, Guangdong Governor Zhu Xiaodan said that the province will apply for the establishment of the free trade zone this year. Official Xinhua news agency reported last week that the central government had agreed in principle to approve 12 free-trade zones, more than three months after the Shanghai zone was created in September. The 12 would include Guangdong and Tianjin, Xinhua cited an official source as telling its subsidiary, the Economic Information Daily. It did not name the remaining 10. Li Youhuan, a senior economist
The first free trade zone opened in Shanghai last September
at the Guangdong Academy of Social Sciences, said the Guangdong free trade zone is expected to be approved “very soon”. “The planned areas – Guangzhou’s Nansha, Shenzhen’s Qianhai and Zhuhai’s Hengqin – will form a delta, to give full play to their proximity to Hong Kong and Macau,” Mr Li was quoted as saying by the Global Times newspaper. Analysts told Hong Kong’s South
China Morning Post that more free-trade zones would increase competition for talent and capital and result in an infrastructure building spree in the near term. In the longer term, they said that punishing competition and economic development might ultimately result in three prominent zones one each in eastern, southern and northern China. T.A.
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Fosun has cash to buy Portuguese insurer: CEO Will look at other financing channels if necessary, says Liang Xinjun
C
hinese conglomerate Fosun International Ltd reassured investors last week that it has enough cash on hand to fund the 1 billion euro (10.9 billion patacas) purchase of the insurance arm of a Portuguese state bank and it will continue to buy foreign assets to expand its overseas reach. Fosun International is acquiring 80 percent of Fidelidade – Companhia de Seguros SA, Multicare – Seguros de Saúde SA and Cares – Companhia de Seguros SA, all of which subsidiaries of Caixa Seguros e Saúde SA, the insurance arm of state-owned Caixa Geral de Depósitos. Fosun International is likely to get access to the market here through
Macau-based Fidelidade. Rating agency Moody’s Investors Service has put Fosun’s debt under review for a possible downgrade, citing uncertainties over its funding plan for the purchase of the insurance unit of Caixa Geral, which comes after a series of investments last year. Liang Xinjun, chief executive of Fosun, declined to disclose its funding plan for the deal, but said the company has enough cash on hand to pay for it. “Our own balance sheet is fully capable of paying for it, but we will also consider other funding channels,” he told Reuters in an interview, adding the firm saw strong growth in profit last year which will help its balance sheet. The 2013 financial results have not yet been published. Fosun had 20 billion yuan (26.44 billion patacas) in cash as of 2012 and 10 billion yuan of securities assets which it could sell if needed, Mr Liang said. He said Fosun will continue to buy overseas assets in sectors such as retail, entertainment and finance to be brought over to the Chinese market. “In the future, while continuing our investment on luxury brands, we will also consider brands of experimental consumption and retail financing,” he said. Fosun also holds stakes in China’s Yongan Property Insurance Co, Hong Kong-based Peak Reinsurance Co, and has formed a private equity venture with U.S. buyout firm the Carlyle Group LP. T.A. with Reuters
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January 27, 2014
Macau
Luso International bank opens office on Hengqin The bank’s general manager says it means to turn its representative office into a proper branch in due course Stephanie Lai
sw.lai@macaubusinessdaily.com
L
uso International Banking Ltd’s representative office just across the border on Hengqin Island will do market research and consult on banking services, general manager Jiao Yun Di says. Luso International’s representative office is in the northeast of the island, occupying part of the 130,000 square metres of the Shizhimen central business district that is reserved for financial institutions. “Under China’s regulations for foreign banks, you have to establish a representative office first before setting up a branch in the mainland,” Mr Jiao told reporters on the sidelines of the opening of the office on Friday. He said a representative office in the mainland could not function as a bank – raising capital, issuing securities for other enterprises and so forth. “As a representative office, you cannot do banking business,” he said. “So we’ll only be doing market research and consultation first.”
Luso International Banking general manager Jiao Yun Di
But Mr Jiao said Luso International intended to turn its representative office into a fully functional branch in due course. “According to the mainland’s regulations for foreign banks, a
representative office can apply to be upgraded to a branch after a year in operation,” he said. Luso International began its effort to expand on Hengqin after the ninth supplement to the Closer
Economic Partnership Arrangement between Macau and the mainland came into effect a year ago. The supplement lowered the minimum assets a Macau bank must have before it may open a Hengqin branch to US$4 billion (32 billion patacas) from US$6 billion.
Yuan lending trials The chairman of the Monetary Authority of Macau, Anselmo Teng Lin Seng, told reporters at the opening that the applications of “one or two” other Macau banks for a presence on Hengqin were still in the works. Mr Teng declined to identify the banks. Business Daily has reported that the mainland authorities are considering an application by Industrial and Commercial Bank of China (Macau) Ltd for a foothold on Hengqin. The bank’s state-owned parent company, Industrial and Commercial Bank of China Ltd, already has a branch on the island. Hong Kong Secretary for Constitutional and Mainland Affairs Raymond Tam Chi Yuen said last Tuesday that Hong Kong enterprises would endeavour to hold trials this year of cross-border lending in yuan on Hengqin and in the Nansha area of Guangzhou. Mr Teng said on Friday that the Macau government wished to hold similar trials on Hengqin. “For services like cross-border financing, we’re still discussing some technical issues with the Guangdong Banking Regulatory Commission and the People’s Bank of China,” he said. “But now it’s quite hard to draw up a schedule for launching this service.”
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Macau
Good deals can s had, says estate
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HOSPITALITY No sea rise The full figures for the number of visitors in 2013 show their total rose by 4.4 percent. That was well above the rate in the previous year, when growth was almost nil; but it was also much below the growth in 2010 and 2011, when the growth rate reached more than 12 and 14 percent, respectively. Last year’s value is not, however, much below the average for the last five years. After the contraction in 2009, associated with the international crisis, we saw a surge the two following years and a slowdown in the latest two years. On average, in the period, the number of visitors grew at an average rate of 5 percent.
The overall share of the various modes of arrival – by land, by sea or by air – did not change much. Land arrivals decreased slightly to 39 percent of the total against 41 percent the year before. Those two percentage points were divided equally between the two other categories, which rose by 1 percentage point each. But the last year showed a pattern of change that was very different from the one seen the year before. The chart shows the contributions, in percentage, of each mode of arrival to the total variation in every year. We leave aside 2009, when the total number of visitors actually decreased. The last four years point to a relative rise in importance for air arrivals, driving 15 percent of the year’s growth, up from almost nothing in 2010. Conversely, sea arrivals are slowly decreasing their share, losing importance as a source of growth. Land arrivals’ reprieve drove the rise last year, while in 2012 its decrease sent overall growth almost to a standstill. J.I.D.
10.3%
Increase in number of arrivals by air in 2013
H
ousing prices are rising but good deals are still to be had in Macau’s property market, says the managing director of estate agency Ambiente Macau Ltd, Suzanne Atkinson. Ms Atkinson told Business Daily in an interview that people moving into newer homes left behind some “really old, nice homes” which were affordable. The estate agent said Macau people were moving into the housing market over the border on Hengqin Island, which could relieve the upward pressure on prices of homes in Macau. Property on Hengqin was a good investment, she said, but the dearth of information made it difficult to get into the market there.
Luciana Leitão
leitao.luciana@macaubusiness.com
Photo by Carmo Correia
New rules for the real estate market had an impact on the number of transactions, but home prices are still increasing. What can we expect from the market in the near future? There are changes happening in Macau: positive changes that come with the new infrastructure and the exciting things going on on Hengqin Island and the connectivity around the region. We’re advising our clients that it is only going to go up. Is it a good time to buy a property? Some of the prices one looks at and thinks: “Oh goodness, that is
really expensive. Is that value for money?” But, of course, that’s me because I’ve been in Macau for 10 years now, so I know that 10 years ago that property was worth HK$800,000 [US$103,000] and now they are asking for HK$6.3 million. But it rents beautifully. And homebuyers, if they want to buy and live in it, it’s one thing. But if they want to buy it to invest in, with rentals [that’s another]. The majority of my business is senior executive rentals and there is a shortage. If you buy anything and it’s remotely looking clean, tidy and attractive, it will be rented in a day. Tiny little places in Old
Taipa Village, for example, that I know cost about HK$800,000 and have gone up to less than HK$1 million are renting for HK$14,000 or HK$15,000. I’ve rented one for HK$19,000 a month. It’s just crazy. There is just no supply, It’s very restricted. So the future for the Macau property market looks rosy and it will most definitely get better over the mid-term. Beyond five years I really can’t say. The Chief Executive hinted at a bubble in the real estate market. Is there a possibility of it bursting in the near future? They’ve put in all these measures
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January 2014 April 19,27, 2013
Macau
till be agent
About the bubble, what can the government do? I suppose, encourage development of more properties. We’ve got the Windsor Arch coming up soon and we’ve got the Oasis coming, and that will certainly help with the rental market. That will ease tremendously the rental side of the market. The government has got a lot of bright-minded people, I would imagine, and I really can’t advise them on that. It’s just a matter of supply and demand. Increase the supply or reduce demand. Hengqin Island, next door, is a good opportunity for those willing to invest in property? No doubt. And at the moment – if you can get hold of something – it’s very much cheaper than what we have in Macau. And I see that would ease the pressure of a bubble in Macau, as, I suppose you could say, it has happened over in Zhuhai.
The future for the Macau property market looks rosy and it will most definitely get better over the mid-term
to try and soften it. The buyer’s stamp duty and the special stamp duty have stopped some of the hot money and the speculation. Certainly it stopped the speculation. The flipping days seem to have dramatically reduced. Those measures have helped with that, but there is a steady climate up. Are these measures the best the government can do to control the market? It’s all about supply and demand. There is tremendous drive among the Chinese to own property. They have seen what’s happened in the past 10 years. Something you could have bought for HK$1 million is now selling at HK$12 million. So those slow starters, those local people within the Macau market that might have sold their property at HK$1 million are now seeing that they’re selling for much more 10 years later. They don’t want to get caught out again, so they’re all very keen to buy. But the supply is so short, so the price is about to get up.
Many of the working people of Macau have been priced out of the market. For example, my car mechanic bought two little places in Zhuhai and so he commutes back and forth to Zhuhai. And I think that if we’re going to be able to commute more easily into Hengqin and if there are going to be a lot of residential buildings built there, then that will definitely ease the bubble. Hengqin Island will certainly help towards increasing supply. It’s still early days, and more information needs to be provided on what residential projects are planned, when they can come on the market. These, perhaps, can be made available to local Macau residents to buy at preferred rates to overseas investors. Do you already have a lot of clients willing to invest in Hengqin’s residential market? Yes. We’ve got a large car retail client who is very eager to buy on Hengqin Island for its showroom and all the mechanical services. But we’ve been over there with our clients on a number of occasions, and it’s very difficult to get information. And it’s not because of lack of language skills, because my team all speak Cantonese and Mandarin. So it is not easy for ordinary investors to gain access to the market there? Yes. There seems to be a lack of information. We went up to a plot of a residential building, and there were very smart uniformed staff out there with a little brochure that were not able to tell us where could we go and buy it. Information is still very poor at the moment.
Apart from Hengqin, are your clients now buying outside Macau? Many of my clients are actually investing in Penang. Malaysia seems to be the old Macau. Longterm residents have come up in horror, and going: “Where is our old, charming Macau?” And many of my clients – Hong Kong as well as Macau – have moved to Penang, and more are starting to invest in Kuala Lumpur because there are some very good places and good deals in Kuala Lumpur. Why is Malaysia such a good opportunity? Malaysia is offering a very attractive basket of benefits. If you invest in Malaysia, you can do it under Malaysia’s “my second home” scheme. Penang is a favourite because Cantonese is still spoken there and expatriates vaguely understand the language because they have been living in Hong Kong or Macau for all this time. It has got a strong Cantonese-speaking community there, so there is a sense of comfort and understanding of the culture. It has good food, a mix of lovely old buildings and some very nice high-rises along the beach, so if you get the best of both worlds there is a welcome factor. Prices are also cheaper than in Macau, and the culture is attractive. Do you see a trend among your clients of buying elsewhere because of the high prices here? I do not see that. The majority of my clients are expatriates coming to build and service casinos – the senior executives coming in – so, of course, they are renting, but pretty soon, [after] a year or two years here, they see under their noses the incredible growth in property. And I’ve got quite a few clients that like to buy in the old, charming areas of Macau and they do renovation, and we can rent for them and we can manage for them. It’s not too much high-risk. They’ll put in, maybe, HK$5 million to HK$6 million into something like that, but meantime continue renting their large place on Taipa. We’re seeing quite a trend in that.
It’s just a matter of supply and demand. Increase the supply or reduce demand
But even those old houses already seem too expensive. Do you still advise your clients to buy these and renovate them? I do, because you get a much bigger capital gain. The dirtier, uglier and worse the condition you can possibly get: that’s the one you need to buy. Of course, the contractor’s prices have dramatically increased over the past years, but if you’re able to get a good contracting team – and there are still some out there that haven’t been into casino building – you can greatly enhance a very small unattractive place. It’s all about location, location, location. That’s what property is all about. Throughout the world, if
you can get property that’s really in a desirable location – let’s say, old Taipa village – from which people can walk to work, what’s not to enjoy there? Sure, you have to put up with the irritation of the noisy buses, and you don’t have a gym and a swimming pool. But the convenience of being so close, walking everywhere, is very attractive not only to expats but also to the local community. But can you still find a cheap old apartment? Yes, you can. I’ve got a new article coming out about one of my contractors. Through his hard efforts he has been able to get a deposit and buy and move his family to the Riviera, in Barra. We don’t want just the expats to benefit here, or the overseas investors. We want the locals to benefit. So I’m hugely excited. What happens to the old, rundown place that he was in? Actually, he is going to keep it and rent it. The move up of the local Macau people to the next level of small, but newer property does leave pockets of the really old, nice homes, which some expats like. So if you’re saying there is no old property around, there is. It’s just digging around. Old and cheap? Yes, they are affordable still. For example, we just sold last year two for HK$2.86 million each – just under HK$3 million –very well located in central Macau. We sold another one last year, for a low HK$4 million, with a rooftop and a lift. That was a success, and that is renting out very nicely for someone senior. Not all expats want to live in high-rises with swimming pools and pay those prices, because the rents are so much higher these days than they were because of the small supply. So there are some expats who don’t have the budget and they are quite happy to live in a small, older, renovated place. The government says it cannot intervene to support supply. What would you like to see the government doing? What I would like to see the government doing is helping the poorer end of the market with some kind of subsidy or some financial support so that they can upgrade their existing places. There are very poor areas in Macau that if the owners could afford to [they would]. And I know there are some measures in place. If you get your neighbours together you can get some sponsorship. But I would like to see more. I would like to see more beautification of areas like they’re trying to do in some old areas of the city.
The dirtier, uglier and worse the condition you can possibly get: that’s the one you need to buy
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Macau
Wing Hang, OCBC extend talks till March Extension gives regulators more time to study the deal Tiago Azevedo
tiago.azevedo@macaubusinessdaily.com
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versea-Chinese Banking Corp will extend exclusive talks to buy Wing Hang Bank Ltd by almost four weeks. Wing Hang said it has extended the deadline for talks until March 3, according to a statement to the Hong Kong Stock Exchange on Friday. OCBC made a similar statement to the Singapore bourse. The Hong Kong lender said that until March 3 “it will engage exclusively with OCBC to seek to finalise the terms” for an agreement. “Any such possible offer would be subject to obtaining all relevant regulatory and other approvals,” it said. Banco Weng Hang SA, a unit of Wing Hang, has 12 outlets in Macau. “No binding agreement… has at this stage been entered into with OCBC,” Wing Hang said, adding that, “definitive terms and formal legal documentation… have not at this stage been agreed with OCBC.” The extension is to give Hong Kong regulators more time to study the deal, four people with knowledge of the matter told Bloomberg. While the banks have largely agreed on financial terms, OCBC is
seeking a go-ahead from the Hong Kong Monetary Authority before announcing a transaction, said the people, who asked not to be named as the deliberations are private. Singapore-based OCBC said on January 6 that it was in talks to buy Wing Hang, a Hong Kong lender with a HK$33.4 billion (US$4.3 billion) market value, and that it had exclusive rights to negotiate with Wing Hang’s biggest shareholders until January 31. The deal has raised concerns about the possibility that OCBC is overpaying and it may need to tap shareholders for funds. OCBC is attempting Hong Kong’s biggest banking acquisition since 2001 as chief executive Samuel Tsien accelerates expansion overseas.
leave Hong Kong with two familyowned lenders, after Chong Hing Bank Ltd agreed last year to be bought by mainland’s Yue Xiu Group. Talks between the companies are centring around a valuation of almost 1.9 times Wing Hang’s book value, one person with knowledge of the
Bridge loan A deal would give OCBC a much sought after gateway to mainland China and helping it bridge the gap with bigger rival DBS Group Holdings Ltd, which operates Hong Kong’s fifth-biggest bank. A purchase of Wing Hang would
matter said. OCBC is in talks to first purchase the 45 percent of Wing Hang held by chairman Patrick Fung’s family, its affiliates and Bank of New York Mellon Corp, before making a general offer for the rest of the bank, according to the January 6 statement. Wing Hang rose as much as 1.8 percent on Friday and closed 1 percent higher in Hong Kong, valuing the bank at 1.64 times book value. OCBC shares fell 0.7 percent to S$9.50. Spokesmen for OCBC, Wing Hang and the HKMA declined to comment or didn’t immediately respond. Yue Xiu’s US$1.5 billion deal to buy a majority stake in Chong Hing Bank, announced in October, was approved by the Hong Kong Monetary Authority on January 9. OCBC has obtained commitments for a bridge loan, primarily to show regulators that it has enough funding to buy Wing Hang, two of the people said. The lender would eventually finance an acquisition by raising money in a rights offer, as well as through debt and internal funds, they said. With Bloomberg News
Banco Weng Hang has 12 outlets here
Canpotex signs potash contract with Sinofert Mainland company to import products sourced by Sinochem Macao
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anpotex Ltd, the offshore selling arm for three North American potash companies, said on Friday it has signed an agreement to supply the crop nutrient to Sinochem Fertilizer Macao Commercial Offshore Ltd (Sinofert), a Macau-based subsidiary of China’s Sinofert Holdings Ltd. Sinochem Macao “shall purchase a minimum of 1,000,000 tonnes of Canadian potash or 33.33 percent of seaborne potash imports” for the year 2014, the company said in a filing. Sinochem Macao is principally engaged in sourcing fertilizer products and other related agricultural products from overseas for the parent company. The company was incorporated here in November 2004. Canpotex, which is owned by Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc, said it would supply Sinofert with 700,000 metric tonnes during the first half of 2014. Canpotex, while not revealing the deal value, said it “is priced at current and competitive market levels”. “Prices for the Canadian potash will be determined through mutual negotiations between the parties with reference to prevailing international market potash prices and competitive sea import prices to the PRC [People’s Republic of China],” Sinofert said.
Sinochem Group, as an approved importer of fertilizer products in the mainland, will import the products sourced by Sinochem Macao and sell them to Sinochem Fertilizer Co Ltd. The price to be paid to Sinochem Macao for fertilizer products will be determined in accordance with the prevailing international market prices. The deal runs until December 31, 2014 and the annual cap is set at US$1.14 billion (HK$8.84 billion), Sinofert said in the filing. “With the increasing demand for potash in the PRC, the group will further enrich its operational resources and ensure a stable supply of potash,” it said. “The production of potash in the PRC falls short of domestic demand.” Chinese contracts traditionally set a global price floor for potash. China, the world’s biggest grower of wheat and second-largest corn producer, is a key potash importer along with the United States, India and Brazil. Potash importers have shied away from purchases since late July, when the globe’s top potash producer by output, Russia’s Uralkali OAO, quit its export partnership with Belaruskali and announced a new emphasis on volume. Potash prices have since slipped, and buyers were gambling that they could fall further. T.A. with Reuters
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Greater China Regulator ‘regrets’ U.S. ruling in audit case China’s securities regulator chided its U.S. counterpart over the latest ruling over access to documents that has snagged the world’s top four accounting firms. China Securities Regulatory Commission spokesman Deng Ge expressed “deep regret” over a ruling that the Chinese units of the four companies should be suspended from auditing U.S.-listed companies for six months. “The SEC would bear all the responsibility for the consequences of its action,” Mr Deng said. The SEC censured the Chinese affiliates of KPMG, Deloitte & Touche, PricewaterhouseCoopers and Ernst and Young, for failing to give U.S. regulators audit documents of certain Chinese companies under investigation for accounting fraud.
Beijing considers tax to deter hot money flows Yuan likely to gain 1.7 pct versus the dollar due to capital inflows Kevin Yao
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hina’s firmer yuan and higher interest rates could attract more money inflows this year, despite the possible impact of the U.S. Federal Reserve’s stimulus tapering, the country’s foreign exchange regulator said. The Chinese authorities are considering a “Tobin tax” on financial transactions to deter speculative capital flows, said Guan Tao, head of the department of international payments at the State Administration of Foreign Exchange (SAFE). A Tobin tax imposes a small charge on individual currency transactions to discourage excessive speculation.
“If the yuan continues to be stable or rise slightly while yuan interest rates are higher than those of major currencies, financial operations of many companies could lead to more money inflows,” Mr Guan told a news conference. “This will increase our foreign exchange reserves, given that we already have large reserves and investment returns from the reserves,” he added. Chinese banks posted a surplus of 1.68 trillion yuan (US$277.61 billion) in their foreign exchange settlements in 2013, up 210 percent from the previous year, Mr Guan said. The central bank has said China’s foreign exchange
KEY POINTS Firmer yuan, higher rates to spur fund inflows SAFE sees limited impact from Fed’s stimulus-tapering FX rules for foreigners selling bad loans to be eased
Hong Kong dollar – the 13th most actively traded currency last year
Hong Kong dollar slides on IPO-related outflows Funds flowing back to developed countries, says analyst
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he Hong Kong dollar weakened by its biggest margin in two years against the greenback on Friday on the back of large outflows related to recent equity offerings.
Friday’s drop in the Hong Kong dollar is the seventh consecutive daily drop for the pegged currency, which is allowed to trade in a 7.75-7.85 band against the dollar. The Macau pataca
reserves, the world’s largest, rose US$157 billion in the fourth quarter to US$3.82 trillion at end-2013. A Reuters poll showed that the yuan is likely to gain 1.7 percent versus the dollar in 2014 due to capital inflows, even as the U.S. currency draws some support from the Fed’s move to unwind its economic stimulus.
Loosen rules Mr Guan said the Fed’s tapering on China’s capital flows has so far been limited, but he cautioned that some money could leave emerging markets as the U.S. central bank pares its stimulus.
is pegged to the Hong Kong dollar. The wave of equity-related outflows triggered a pile of stoploss positions against the dollar around 7.76 and pushed the local currency to its day’s lows of 7.7641, its lowest since June 2013 before recovering somewhat. “Recent IPOs have seen some large oversubscriptions and we are seeing some funds flowing out, though the move has caught some folks by surprise,” said the head of trading at a European bank in Hong Kong who declined to be identified because of company policy. Last week, tycoon Li Ka Shing priced the initial public offering of Hong Kong utility HK Electric Investments Ltd’s at US$3.1 billion, the biggest IPO in Asia excluding Japan since the US$3.6 billion listing by People’s Insurance Group of China Co Ltd in November 2012. Concerns about outflows from emerging market currencies as the U.S. Federal Reserve prepares to withdraw its massive policy stimulus were also a factor. “The weakness of the Hong Kong dollar today is in line with other emerging market currencies as funds have showed signs of flowing back to the U.S. and other developed countries,” said Kenix Lai, senior market analyst at Bank of East Asia in Hong Kong. “The trend is likely to be reinforced if the Fed announces further steps to exit from QE next week. The weak
China’s stable economic growth and large foreign exchange reserves will provide a cushion against possible capital flight caused by the Fed’s tapering, he said. The government has laid out plans to make the yuan convertible on the capital account, but it will also adopt measures to control potential risks from volatile money flows, Mr Guan said. “We will use more marketbased means to manage [capital flows] and there are many tools that are under consideration, including a Tobin tax,” he said. Meanwhile, the foreign exchange regulator said in a statement on its website that it will simplify rules on some currency transactions, including making it easier for foreign investors to deal with non-performing loans. From February 10, foreign investors will no longer need approvals when they exchange profits from disposals of bad loans in China, while approvals on currency dealings by Chinese debt-clearing companies will also be abolished, according to the SAFE. Reuters
stock market in Hong Kong also has some effect on the currency.” The Hong Kong Monetary Authority (HKMA) said in an email reply to Reuters that the Hong Kong dollar had eased slightly against the greenback, following broader U.S. strength against Asian currencies. “We have not spotted anomalies in the HKD FX and money markets,” the HKMA spokesperson said. The spike in daily volatility of the Hong Kong dollar accompanied by rising volume may prove to be a one-off case, with China’s yuan being more widely traded in Hong Kong. The role of the yuan in global FX trading has surged, in line with increased efforts to internationalise the Chinese currency, according to the Bank of International Settlements. Yuan turnover soared from US$34 billion to US$120 billion as a result of which the Chinese currency becoming the ninth most actively traded currency in 2013, with a share of 2.2 percent in global FX volumes, mostly driven by a significant expansion of offshore trading, leaving the Hong Kong dollar in 13th place. The growth of the offshore yuan market in Hong Kong has gone from strength to strength since it was launched in mid-2010, with deposits growing from less than 1 percent of total deposits in the Hong Kong banking system to about 10 percent now. Reuters
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January 27, 2014 April 19, 2013
Greater China Tesla Motors outlines aggressive growth plan U.S. electric carmaker Tesla Motors Inc expects China to contribute one-third of its global sales growth this year, a senior executive said, adding that a trademark issue stalling full-entry into China has now been resolved. Veronica Wu, vice president of Tesla’s China operations, told Reuters the company planned to open stores in 10 to 12 Chinese cities by the end of 2014. Its flagship Beijing store opened late last year. Tesla China had a “very aggressive growth objective” and was aiming to contribute “30 to 35 percent” of Tesla Motors’ global sales growth targeted for 2014, said Ms Wu.
ICBC won’t compensate trust investors: chairman Lender won’t take responsibility for the losses, Jiang tells CNBC as policymakers sought to curb money flows outside the formal banking system. Credit Equals Gold No. 1, which has a maturity of three years, indicated investors would get an annual return of 10 percent, according to information posted on the website of Beijing-based China Credit Trust Co, which structured the product to raise funds for Shanxi Zhenfu Energy Group. The coal miner collapsed after its owner Wang Pingyan was arrested in 2012 for illegally collecting deposits. Individuals were asked to put at least 3 million yuan in the product with guarantees that it was “100 percent safe,” said Fang Ping, one of 20 investors who went to ICBC’s private-banking branch. The trust product was distributed by China’s biggest bank, and some investors were its own private-banking clients.
WH Group applies for US$6b IPO WH Group Ltd, the Chinese company that bought the world’s biggest pork supplier last year, applied to the Hong Kong stock exchange for an initial public offering, two people with knowledge of the matter told Bloomberg. The company plans to seek as much as US$6 billion from the offering in the first half, the people said. WH Group changed its name from Shuanghui International Holdings Ltd this month. WH Group plans the biggest Hong Kong IPO in more than three years as rising incomes spur demand for meat in China.
Wang to invest up to US$5b in U.K. projects Dalian Wanda Group, the property company owned by Chinese billionaire Wang Jianlin, plans to invest as much as 3 billion pounds (US$5 billion) in U.K. developments after a meeting with British Prime Minister David Cameron aimed at bolstering trade. Mr Wang and Mr Cameron announced the investment in Davos, Switzerland, according to a statement. The main part of the 2 billion-pound to 3 billion-pound venture will be a cultural and travel development. The Chinese company didn’t provide details of the project. Dalian Wanda is already investing 1 billion pounds in a British yacht-maker and a London site to build Western Europe’s tallest residential tower.
Property loans ease in fourth quarter Banks’ lending to the mainland’s property sector eased in the last quarter of 2013 from the previous three months, Reuters calculations from central bank data showed, adding to signs of stabilisation in the housing market. Chinese banks lent 440 billion yuan (US$72.7 billion) to home buyers and property developers between October and December 2013, down from the third quarter’s 600 billion yuan but still up 20 percent from a year earlier. Total property loans issued hit 2.3 trillion yuan in 2013, up 998.7 billion yuan from a year ago, the central bank said on its website on Friday.
Safety guaranteed
about the coal industry, Rainy Yuan, an analyst at Masterlink Securities Corp in Shanghai, said. “Coal is a pillar industry in the economy and banks’ exposure to the sector should be quite substantial.” China is the world’s largest producer and consumer of coal. Shares of Industrial and Commercial Bank of China Ltd fell 1 percent in Hong Kong to HK$4.76, the lowest closing price in more than six months. In addition to the coal mining industry, the banking regulator also told regional offices to watch for credit risks associated with changes to China’s economic structure and overcapacity in industries, the people said. The order didn’t mention concerns that the trust product distributed by ICBC may default, they said.
ICBC had assigned the top A ranking to China Credit Trust in 2009 under a four-step scale by which the lender rates its trust partners, according to a marketing presentation for the product that was obtained by Bloomberg News. The sales document included a page on risks attached to the coal industry, such as slower economic growth and the prospect of emission controls lowering demand for the fuel. “We believe an outright bailout by ICBC appears beyond the bank’s options,” Liao Qiang, Beijing-based analyst at Standard & Poor’s Ratings Services, wrote in a report. “ICBC has no legal ground to make such a bold move. Damage to its reputation from the failure of such a highyield and high-risk product may be well manageable.” According to China Banking Regulatory Commission rules, banks aren’t responsible for compensating investors for failures of the trust products they sell. Trust companies that issue the products must make clear the risks, including that there’s no guarantee of principal or minimum return, and compensate investors with their own assets in the event of mismanagement of assets or breaches of trust contracts, the regulations say. If trust companies didn’t breach contracts they will not be asked to assume responsibility for investor losses, according to the regulations. Bank customers need to “see clearly” the risks associated with wealth-management products and other such investments, MrJiang told CNBC. ICBC was a distributor of Credit Equals Gold No. 1 and didn’t offer “ironclad guarantees,” he said, according to the report. The government of Shanxi province, where Zhenfu Energy is based, may take responsibility for about 50 percent of the payments due on Credit Equals Gold No. 1, according to a report last week on the website of Guangzhou city-based Time-Weekly. Local authorities said they won’t take responsibility, and instead urged the financial institutions to prevent and diffuse the risks, the Shanxi government-controlled Yellow River News reported on its website yesterday.
Bloomberg News
Bloomberg News
Incident could be a lesson for investors, says Jiang Jianqing
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ndustrial and Commercial Bank of China Ltd chairman Jiang Jianqing said the lender won’t compensate investors for losses tied to a troubled trust product distributed by the bank, CNBC reported on its website. The incident will be a lesson for investors on moral hazard and risks associated with such investments, Mr Jiang told CNBC from the World Economic Forum in Davos, Switzerland. The Beijing-based lender won’t take “rigid responsibility” for the losses and will review all its partnerships in entities with which it does business, Mr Jiang was quoted as saying.
Investors in the 3 billion-yuan (US$496 million) Credit Equals Gold No. 1 high-yield product met with ICBC officials at a Shanghai branch on Thursday to demand their money amid concern that they wouldn’t be repaid when the trust matures on January 31. A default on the product, which raised money for a failed coal mining company, would undermine the implicit guarantees offered by trust companies to draw funds from wealthy investors. Assets managed by China’s 67 trusts soared 60 percent to US$1.67 trillion in the 12 months ended September, according to the China Trustee Association, even
Bank regulator to issue alert on coal mine loans C
hina’s banking regulator ordered its regional offices to increase scrutiny of credit risks in the coal-mining industry, said two people with knowledge of the matter, signalling government concern about possible defaults. The China Banking Regulatory Commission also told its local branches to closely monitor risks from trust and wealth- management products, said the people, who asked not to be identified as the matter isn’t public. The commission issues such alerts for matters that it judges may pose significant risks to banks, the people said. A default threatens to shake investor faith in China’s US$1.67 trillion trust industry and add to challenges to the Communist Party’s ability to ensure stable growth in the world’s second-biggest economy. The market is “quite worried”
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January 2014 April 19,27, 2013
Asia
BOJ shouldn’t ease more: Shinohara IMF forecasts inflation in Japan will reach 2 percent in 2017 Tetsushi Kajimoto
IMF deputy managing director, Naoyuki Shinohara
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he Bank of Japan should steer clear of further monetary easing as long as inflation expectations are on the rise, even though its 2 percent price goal is unlikely to be met in two years, a senior International Monetary Fund official said. Japan should not rely excessively on monetary easing to stimulate its economy as it could cause an economic bubble and a spike in longterm interest rates, deputy managing director Naoyuki Shinohara said in an interview. “I respect the [BOJ’s] 2 percent inflation goal but there’s no reason to insist that it [the timeframe] must be two years,” Mr Shinohara said. “As long as inflation expectations steadily rise, there’s no need to add to the current quantitative easing.” The BOJ launched aggressive monetary stimulus last April, pledging to boost purchases of government debt and riskier assets under quantitative easing to end 15 years of deflation and meet 2 percent
inflation in roughly two years. Few investors believe the inflation target will be met in the given timeframe, while many are expecting that the BOJ could be forced to ease policy further in case if it fails to fulfil its commitment. “[The BOJ] should wipe out such expectations that the BOJ must do something additional in case if it cannot achieve the 2 percent in two years,” Mr Shinohara said, adding that the IMF forecasts inflation in Japan will reach 2 percent in 2017.
Fiscal consolidation Moneta r y ea s i n g m u s t b e accompanied by medium-term fiscal consolidation and structural reforms to boost growth, or it could cause side-effects such as a spike in interest rates on concerns the bank may be monetising government debt, he said. The BOJ easing helped the yen weaken about 17 percent over the past year, which has supported Japanese exporters. The U.S. dollar last stood
Japan casino lobby in legalisation push Lawson CEO to join new croup backing casino legalisation
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usiness leaders including top executives at Lawson Inc and Suntory Holdings Ltd are joining forces to back the legalisation of casinos in Japan, a proposal that could open up what’s estimated to be the world’s secondlargest gaming market. Lawson chief executive Takeshi Niinami and Suntory executive vice president Shingo Torii are among corporate and academic
leaders forming a group to support a legalisation bill introduced by lawmakers, said Hiroshi Mizohata, a former head of the Japan Tourism Agency, who will also be a member. Mr Niinami, who heads Japan’s second-biggest convenience store chain, and Mr Torii of the country’s third-biggest beermaker expect to add momentum behind a bill submitted last month by lawmakers from Japan’s ruling party to legalise resorts
at around 102.80 yen, after hitting a five-year high of 105.44 yen earlier this month. Mr Shinohara, a former Japanese top financial diplomat tasked with overseeing Tokyo’s currency policy, said there was no change in the IMF’s view that the yen is slightly undervalued against Japan’s mediumto long-term economic fundamentals. But he shrugged off concern that yen weakness may cause friction between Japan and the United States, a key trading partner. “It is clear that what Japan is trying to do now is to beat deflation,” he said. “There may be some changes in the way [the U.S. government] communicates due to its relations with the Congress,” he said. “But I don’t feel Japan’s weak yen is seen as a big problem. Of course it would be different if [Japan] intervenes or manipulates currencies, though.” U.S. Treasury Secretary Jack Lew said last week that Japan’s long-term growth cannot be rooted in unfair reliance on exchange rate advantage.
that combine casinos with hotels and convention centres. Casino operators from MGM Resorts International to Wynn Resorts Ltd, and several other operators in Macau, plan to spend billions of dollars to build gambling resorts in Japan if they’re legalised, the companies have said. Along with the 2020 Tokyo Olympics, allowing casino resorts in Japan “will provide a spark for not just tourism, but also for the revitalisation of local economies in the countryside,” Mr Mizohata said in an interview. “We want to get various stakeholders involved.” The group will work closely with lawmakers in support of the bill, make policy recommendations in collaboration with local governments and companies, and advocate for legalisation to the public, Mr Mizohata said. It will have a preparatory meeting on February 5 and be officially formed
KEY POINTS No need for BOJ to stick to its timeframe for price goal Further BOJ easing could cause bubble, interest rate rise Yen remains ‘slightly undervalued’ vs econ fundamentals Sees no friction between Japan, U.S. over weak yen
But Mr Shinohara said he took the remark as urging Japan to carry out pro-growth reform to boost its growth potential, rather than relying on monetary policy excessively. Reuters
around May, he said. The organisation plans to recruit members from local governments, business lobbies and companies, and will be financed by membership fees, Mr Mizohata said. He said the group won’t accept funding from casino operators. While betting on horse, boat and bicycle races is allowed in the world’s third-largest economy, casinos are banned. Legalising them may generate US$10 billion in annual revenue, according to Union Gaming Group, an investment bank focused on the casino industry. Lawmakers pushing for legalisation have said they intend to pass a bill asking the government to create a legal framework for casinos in the current parliamentary session. A subsequent bill detailing the rules of casino operations would also need to be approved. Bloomberg News
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Asia
Indonesia’s mining exports at standstill Surprise inclusion of export tax adds to confusion over shipments Yayat Supriatna
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ndonesia’s metal ore and concentrate exports have ground to a complete halt, government officials said, signalling the turmoil in the mining sector after a ban on ore shipments and an export tax were imposed nearly two weeks ago. Southeast Asia’s biggest economy introduced a controversial ore export ban on January 12, although lastminute amendments aimed to ease the impact of the export ban on miners like Freeport-McMoRan Copper & Gold and Newmont Mining Corp. They now face a progressive export tax on concentrates. “There has been no concentrate export since January 12,” Bachrul Chairi, director general of foreign trade at the trade ministry told Reuters. “As of now, no miners or companies have requested export approval for concentrate or processed ore from the trade ministry.” Freeport Indonesia and Newmont are in talks with the government over the new rules and are yet to resume exports since the new tax was introduced, while the Mineral Entrepreneurs Association has filed a legal challenge against the ore export ban. Under the new regulation, concentrate exports are allowed to continue for some minerals, including copper, lead, iron ore, zinc and manganese, though with different purity rules attached. Concentrates are an intermediate product between ore and metal, enriched with minerals as a result of processing. “There is still no export for any
There has been no concentrate export since January 12 Bachrul Chairi, Trade Ministry
Collapse of ore and concentrate exports will hurt government revenue
kind of concentrates so far,” added Sukhyar, director general of coal mines and minerals at the energy and mines ministry. “Maybe in the middle of this year some of them can be exported.” The surprise and last-minute inclusion of an escalating export tax on metal concentrates appears to have forced all other miners to stop shipments.
“It’s a problem because nobody can abide by the export tax, including Freeport,” said Erry Sofyan, secretary general of the Indonesian Bauxite and Iron Ore Entrepreneurs Association.
Hong Kong’s Hang Seng Index slid 2.95 percent and the Hang Seng China Enterprises Index, known as the H-share gauge of mainland firms listed in the city, slipped 1.5 percent. One- third of investors surveyed in a Bloomberg Global Poll this month said China’s economic slowdown is the world’s major risk, up from 26 percent in November. Thailand’s SET Index rose 1.5 percent, a third week of gains, even as bombings and shootings threaten to derail elections scheduled for February 2. The Bank of Thailand cut this year’s growth forecast to about 3 percent from a November prediction of 4 percent after holding its policy rate at 2.25 percent last week. The nation’s stocks gauge is down 10 percent in the past year.
20 percent for 2014, but will rise to 60 percent by the second half of 2016. Indonesia is also the world’s biggest exporter of nickel ore, refined tin, thermal coal, and home to the fifth-largest copper mine and top gold mine. Freeport and Newmont produce 97 percent of Indonesia’s copper. Indonesia’s iron ore shipments to China jumped 72.5 percent last year to 17.6 million tonnes. The Southeast Asian nation controls about 12-16 percent of global bauxite supplies, with China again a major buyer. “Our supplier says the policy might be loosened next month, but right now it is forbidden,” said an iron ore trader based in China’s eastern Shandong province. “We are planning to talk with some small miners in other countries like Malaysia, Thailand and the Philippines for possible supplies.” Indonesia-based miners that process some or all of their metal production through smelters, like nickel producers PT Aneka Tambang and PT Vale Indonesia Tbk have escaped the full impact of the new rules. The long-planned ore ban aims to eventually boost Indonesia’s profits from its mineral wealth by forcing miners to process their ores before export. But there are fears a short-term cut in foreign revenue could widen the current account deficit, which has undermined investor confidence and hurt the rupiah currency. The ban is expected to cut government revenue by as much as US$820 million this year, the finance minister has said.
Bloomberg News
Reuters
Revenue hit Under the new rules the export tax for concentrates of lead, iron, zinc, ilmenite, titanium and manganese is
Stocks drop amid China growth slowdown concern MSCI Asia Pacific Index fell a fourth straight week
A
sian stocks fell last week, posting the longest streak of weekly losses in more than 18 months amid concern growth is slowing in China, the world’s secondlargest economy. The MSCI Asia Pacific Index slid 1.4 percent to 137.64 last week. The gauge fell a fourth straight week as a survey from HSBC Holdings Plc and Markit Economics indicated Chinese factory output will shrink this month. The measure’s 5.1 percent advance from the end of August pushed valuations on the gauge to 13 times estimated earnings, above the average multiple during the past three years. “There will be a correction of 10 percent or more,” Monty Guild, chief investment officer of Los Angelesbased Guild Investment Management
Inc, which manages US$143 million in global equity funds, said by e-mail about stocks globally. “We see China as an unattractive place to invest.” Japan’s Topix index fell 2.5 percent last week and the Nikkei 225 Stock Average declined 2.2 percent as the yen strengthened against the dollar. South Korea’s Kospi index lost 2.4 percent and New Zealand’s NZX 50 Index declined 0.4 percent. Singapore’s Straits Times Index slid 2.3 percent and Taiwan’s Taiex Index was little changed. Australia’s S&P/ASX 200 Index retreated 1.2 percent on the week. JPMorgan Chase & Co and Westpac Banking Corp pushed back their forecasts for when Australia’s central bank will lower interest rates, with the strongest inflation in two years offsetting rising joblessness.
editorial council Paulo A. Azevedo, Tiago Azevedo, José I. Duarte, Emanuel Graça, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Editor-in-Chief Tiago Azevedo DEputy Editor-in-Chief Vitor Quintã Associate editor Michael Grimes GROUP SENIOR ANALYST José I. Duarte Newsdesk Luciana Leitão, Stephanie Lai, Tony Lai EDITOR AT LARGE Alex Lee Creative Director José Manuel Cardoso WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia, Manuel Cardoso Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
Business Daily is a product of De Ficção – Multimedia Projects Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 Email newsdesk@macaubusinessdaily.com Advertising advertising@macaubusinessdaily.com Subscriptions sub@macaubusinessdaily.com
13 13
January 2014 April 19,27, 2013
Asia that a postponement was possible. “The problem is not when to hold the election, but how to solve the disputes,” Election Commissioner Dhirawat Dhirarojvit told reporters. “Is it even possible to get all parties together to discuss stepping back?” Suthep Thaugsuban, an opposition politician leading the rallies, has refused Ms Yingluck’s offers to negotiate and plans to maintain a blockade of major Bangkok intersections that began January 13 until she resigns. Protesters want the government replaced with an unelected council that would rewrite rules to erase the influence of Thaksin Shinawatra, Ms Yingluck’s brother, who was ousted in a 2006 coup and whose allies have won the past five elections.
Protest rallies
Protesters show that they can sabotage an election
Thai protesters block early voting Advance voting has been cancelled in a number of locations
T
hai anti-government protesters blocked access to some polling stations as advanced voting began, adding to pressure on Prime Minister Yingluck Shinawatra to delay general elections scheduled for February 2. Demonstrators began blockading polling stations in the capital and Thailand’s south yesterday morning, and voting was cancelled in several districts. One of their leaders has been shot dead during a clash with government supporters just outside the capital,
the opposition said. Polling can be delayed in districts affected by protests, Election Commission Secretary-General Puchong Nutrawong told reporters on Saturday. Ms Yingluck imposed a state of emergency in Bangkok on January 22 after an escalation of violence that has killed nine people and injured more than 500 since protests began in October. She plans to meet election commissioners on January 28 to discuss proposals to delay the election, after the Constitutional Court ruled last week
Ms Yingluck dissolved parliament on December 9 and announced the election a day after opposition Democrat party members resigned en masse to join the rallies, which at their peak have drawn hundreds of thousands of people in Bangkok. Since late October, protesters have invaded government offices and the police headquarters and blocked roads to destabilise Ms Yingluck’s administration. Voting was supposed to take place yesterday at 50 polling stations in Bangkok and 102 outside the capital, according to the Election Commission’s website. Voters in Thailand’s 375 constituencies could register for advanced polls if they expected to be in another part of the country on election day, it said. Overseas residents have already cast their votes. As many as 14 polling stations suspended voting yesterday, the INN News Agency reported, citing reports from local residents. “We ask for cooperation from protesters not to obstruct the vote by threatening people or inciting violence,” Suranand Vejjajiva, Ms Yingluck’s secretary-general, told reporters yesterday. “If you want to be accepted by the people, you should respect and follow the democratic way.”
Samsung pledges higher dividend Samsung Electronics Co Ltd, under pressure to appease investors who have berated it for hoarding the spoils of rapid growth, has pledged to hand out even more profit after almost doubling its full-year dividend to a record US$2 billion. The company has amassed US$51 billion in spare cash in recent years by selling as many as one of every three smartphones, but the amount of profit reaching shareholders hit its lowest in 2012 in five years. Some investors have called for more returns, but the biggest maker of TVs, smartphones and memory chips has been reluctant to change its payout policy largely because of a need to build funds to secure future growth. On Friday, Samsung reported its first quarterly operating profit decline. The company posted a 6 percent on-year decline in operating profit for October-December to 8.3 trillion won (US$7.7 billion). Yet Samsung doubled its 2013 dividend yield to 1.0 percent, sticking to a promise made to shareholders in November.
Seoul, Pyongyang in ‘reconciliation’ talks South Korea accepted the North’s offer to renew reunions of families separated by the Korean War, a move that may signal thawing tensions between the two nations. South Korea’s Unification Ministry said it “welcomed” the offer made by North Korea and would soon propose dates for the restart of the reunions, according to an e-mailed statement, also yesterday. North Korea proposed the reunions be held in the mountain resort of Geumgang, once a popular tourist destination for South Koreans. The two Koreas held their last round of family reunions in late 2010 at the resort just north of the border, where their two armies still face off more than 60 years after the the Korean War. With travel between the countries virtually barred and the Korean War generation dying off, the reunions remain an emotional issue and a link to a united Korea. The last attempt at reunions collapsed in September when the North cancelled the meetings days before they were set to restart.
AFP
Singapore home prices drop in fourth quarter Housing values fall for the first time in two years
S
ingapore’s fourth-quarter home prices slid for the first time in almost two years, trimming annual gains to the smallest since 2008 as mortgage curbs cooled prices in the Southeast Asian city. The private residential property price index fell 0.9 percent in the three months ended December, more than the 0.8 percent drop based on preliminary data announced on January 2. The decline in suburban housing values was 1 percent, more than the 0.6 percent slide in the earlier report, according to a government statement on Friday. “The data means that in the last three weeks of December, the price decline accelerated in the suburban market,” said Nicholas Mak, executive director and head of research at property consultants SLP in Singapore. “We have to wait for another quarter to see if suburban prices continue to weaken, and if they do, it will set the tone for 2014.” Record home prices amid low interest rates raised concerns of a
housing bubble and prompted the government to widen a campaign that started in 2009 to curb speculation in the property market. Singapore unveiled new rules in June governing how financial institutions grant property loans to individuals, in addition to previous curbs including new taxes and higher down-payments.
‘Cooling measures’ The decline in apartment prices in prime neighbourhoods was 2.1 percent in the fourth quarter, according to the statement, compared with the 2.2 percent decrease in the preliminary report. Rents fell 0.5 percent in the fourth quarter, the first drop since the quarter ended
Sept. 2009, the data showed. Housing values gained 1.1 percent in 2013, according to the statement, the smallest annual increase since prices slid 4.7 percent in 2008. “The government’s cooling measures have impacted buying sentiment and the capacity to obtain mortgage loans,” said Alice Tan, head of consultancy and research at broker Knight Frank LLP in Singapore. The new loan framework requires that lenders take a borrower’s debt into consideration when granting mortgages, the Monetary Authority of Singapore said last June. Home loans should not lead to a borrower’s total debt-servicing ratio rising above 60 percent and those that do will be considered imprudent, it said. Private home sales fell to 14,948 units last year from 22,197 in 2012, the data showed. Resale transactions of homes dropped by half to 6,608 units from 13,214 in 2012. “There’s some investor fatigue coming in with the hefty measures,” Mr Mak said. “That will clean off a lot of the investor demand.” Bloomberg News
Japan Pension Fund to stay away from domestic bonds The world’s biggest pension fund said it won’t add to its holdings of Japanese government bonds because it sees “very limited room” for prices to rise as inflation accelerates. “We won’t buy more JGBs,” Takahiro Mitani, president of the Government Pension Investment Fund, which manages 124 trillion yen (US$1.21 trillion) in assets, said in an interview in Davos. “With inflation picking up, the room for JGB prices to increase is very limited. When the ones we hold mature, we will consider investing in other assets.” Japanese stocks and foreign equities and bonds are among assets that the fund will look into, said Mr Mitani. Japanese government securities returned 2.1 percent last year compared with a 7.3 percent gain from Italian government debt, according to Bank of America Merrill Lynch indexes. Japanese stocks rallied, with the Topix index advancing 51 percent. Japan’s core inflation rose to 1.2 percent in November, the fastest pace since 2008, in a sign that the unprecedented stimulus aimed at pulling the country out of 15 years of deflation is working. Rising consumer prices tend to dent demand for bonds as they erode the purchasing power of the securities’ fixed payments.
14 14
January 27, 2014 April 19, 2013
Markets Gaming Stocks - Daily Performance (Hong Kong Stock Exchange)
Max 77.25
average 75.658
Max 60.8
Min 73.55
average 60.377
Last 73.55
Min 59
Last 59.75
77.30
111
32.6
76.35
110
32.3
75.40
109
32.0
74.45
108
31.7
73.50
Max 110.1
average 108.504
25.0
60.5
24.8
60.0
24.6
59.5
24.4
59.0
Max 25
average 24.772
PRICE
DAY %
WTI CRUDE FUTURE Mar14
96.64
-0.698725853
BRENT CRUDE FUTR Mar14
107.88
GASOLINE RBOB FUT Feb14
266.32
GAS OIL FUT (ICE) Mar14 NATURAL GAS FUTR Feb14
YTD %
(H) 52W
Last 24.35
(L) 52W
-1.938102486
104.5199966
84.87999725
0.278862242
-2.39753913
112.4399948
96.31999969
0.052595988
-4.404321763
286.9299889
243.68999
915.25
-0.218043064
-2.813910273
954.5
840
5.182
9.55602537
22.50591017
5.245999813
3.476000071
313.74
1.979522184
2.355474357
317.8399801
278.4999847
Gold Spot $/Oz
1270.06
2.0301
5.5972
1684.87
1180.57
Silver Spot $/Oz
19.9492
-0.6662
2.0023
32.2588
18.2208
Platinum Spot $/Oz
1428.75
-1.6351
5.3845
1742.8
1294.18
NY Harb ULSD Fut Feb14
735
-1.5405
3.3755
786.5
629.75
1762
-0.056721497
-2.124704902
2174
1736.25
Palladium Spot $/Oz LME ALUMINUM 3MO ($) LME COPPER 3MO ($)
7180
-0.360810436
-2.445652174
8346
6602
LME ZINC
2020
-1.246638964
-1.703163017
2230
1811.75
3MO ($)
LME NICKEL 3MO ($) AGRICULTURE ROUGH RICE (CBOT) Mar14
14490
-1.226993865
4.244604317
18770
13205
15.425
-0.032404407
0.981996727
16.77000046
15.12000084
429.5
0.116550117
1.777251185
606.5
406.25
WHEAT FUTURE(CBT) Mar14
565.25
-0.833333333
-6.608839323
834
560.5
SOYBEAN FUTURE Mar14
CORN FUTURE
Min 24.35
Mar14
1284.75
0.606891151
-0.599613153
1377.75
1174
COFFEE 'C' FUTURE Mar14
114.4
-0.694444444
3.342366757
165.3999939
104.1499939
SUGAR #11 (WORLD) Mar14
15.11
0.465425532
-7.921998781
20.36999893
14.96999931
COTTON NO.2 FUTR Mar14
87.21
-0.137409825
3.036389414
90.61000061
76.65000153
COUNTRY MAJOR
AUD GBP CHF EUR JPY MOP HKD CNY INR THB SGD TWD PHP IDR AUDJPY EURCHF EURGBP EURCNY EURMOP EURJPY HKDMOP
ASIA PACIFIC
CROSSES
average 31.922
Min 31.45
Last 31.55
31.4
34.6
34.3
34.0
Max 34.55
average 34.135
Min 33.7
Last 33.75
33.7
World Stock Markets - Indices
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
0.8683 1.6482 0.8945 1.3678 102.31 7.9962 7.7627 6.0484 62.685 32.84 1.2785 30.311 45.31 12181 88.825 1.22353 0.82996 8.2765 10.9349 139.98 1.0299
-1.2735 -0.669 1.0173 0.308 1.9744 -0.0638 -0.058 0.0628 -1.1984 0.1218 -0.0078 0.0561 -0.0221 -0.1314 3.2986 0.6955 -0.9868 -0.4011 -0.3475 1.6288 0.0097
-2.6788 -0.1151 -0.3577 -0.6248 2.6195 -0.1201 -0.1134 0.0975 -1.4118 -0.1979 -1.1263 -1.6628 -2.0194 -0.0821 5.4309 0.2599 0.5048 0.7793 0.5295 3.2362 0.0097
1.0582 1.6668 0.9839 1.3893 105.44 8.0111 7.7664 6.2492 68.845 33.148 1.2862 30.328 45.39 12281 105.433 1.265 0.88151 8.4957 11.0434 145.69 1.032
0.866 1.4814 0.88 1.2746 90.33 7.9818 7.7514 6.0393 52.89 28.56 1.2268 29.259 40.555 9603 86.41 1.21196 0.81683 7.8281 10.195 118.73 1.0289
Macau Related Stocks NAME
PRICE
ARISTOCRAT LEISU CROWN RESORTS LT
DAY %
YTD %
(H) 52W
(L) 52W VOLUME CRNCY
4.4
-2.654867
-6.18337
5.12
3.49
1560333
17.21
-2.768362
2.136496
18.22
11.08
3120930
AMAX INTERNATION
1.63
-4.678363
-5.23256
2.12
0.75
2664450
BOC HONG KONG HO
24.1
-0.8230453
-3.01811
28
22.85
7503444
0.425
-2.298851
-1.162792
0.68
0.26
764500
7.24
-0.8219178
2.695033
7.45
5
63000
21.65
-0.9153318
-0.6880699
25
17.7
25286195
CHINESE ESTATES
18.34
-2.134472
-23.90042
24.7
10.384
29000
CHOW TAI FOOK JE
11.84
1.369863
2.422142
13.2
7.44
4801800
CENTURY LEGEND
NAME
24.2
Max 32.5
Currency Exchange Rates
NAME
METALS
107
Last 108
61.0
Commodities ENERGY
Min 108
CHEUK NANG HLDGS CHINA OVERSEAS
COUNTRY
PRICE
DAY %
YTD %
(H) 52W
(L) 52W
DOW JONES INDUS. AVG
US
15879.11
-1.964766
-4.208024
16588.25
13784.01
NASDAQ COMPOSITE INDEX
US
4128.173
-2.14991
-1.159247
4246.553
3105.365
GALAXY ENTERTAIN
-1.264609
6875.62
6023.44
HANG SENG BK
EMPEROR ENTERTAI
4.61
-2.947368
15.25
5.4
1.95
2835000
FUTURE BRIGHT
4.51
-1.742919
-3.837954
5.3
1.609
2611000
73.55
-2.453581
5.751253
84.5
30
16700018
122.5
-0.648824
-2.545741
132.8
110.6
1508727
FTSE 100 INDEX
GB
6663.74
-1.617237
DAX INDEX
GE
9392.02
-2.481767
-1.676486
9794.05
7418.36
HOPEWELL HLDGS
26.05
-1.698113
-0.7619048
35.3
23.2
573580
NIKKEI 225
JN
15391.56
-1.938915
-5.522883
16320.22
10751.01
HSBC HLDGS PLC
84.4
-0.8807986
0.2970867
90.7
77.85
18661657
HANG SENG INDEX
HK
22450.06
-1.248532
-3.674228
24111.55078
19426.35938
CSI 300 INDEX
CH
2245.678
0.6178175
-3.620042
2791.303
2023.171
TAIWAN TAIEX INDEX
TA
8598.31
0.03734686
-0.1532855
8668.95
7637.2
KOSPI INDEX
SK
1940.56
-0.3609589
-3.519042
2063.28
1770.53
S&P/ASX 200 INDEX
AU
5240.932
-0.4190775
-2.079101
5457.3
4632.3
JAKARTA COMPOSITE INDEX
ID
4437.343
-1.305571
3.817484
5251.296
3837.735
HUTCHISON TELE H
2.87
-1.034483
-2.380954
4.66
2.5
3954000
LUK FOOK HLDGS I
25.55
-1.160542
-13.38983
34
16.88
2210500
MELCO INTL DEVEL
28.75
-4.643449
0.877193
32.5
11.52
6826615
MGM CHINA HOLDIN
31.55
-4.103343
-4.682775
36.15
15.457
7572037
3.7
-0.8042895
-0.8042901
3.98
2.68
2022000
0.31
-1.587302
-8.82353
0.4
0.131
54630000
MIDLAND HOLDINGS NEPTUNE GROUP NEW WORLD DEV
10.12
-0.7843137
3.370787
14.98
9.35
11014269
SANDS CHINA LTD
59.75
-0.4995837
-5.682713
67.15
33.5
24410473
FTSE Bursa Malaysia KLCI
MA
1802.57
-0.3174235
-3.448923
1882.2
1597
SHUN HO RESOURCE
1.63
-2.39521
-1.21212
1.92
1.33
36000
NZX ALL INDEX
NZ
1029.729
-0.7720616
3.086809
1048.998
904.128
SHUN TAK HOLDING
4.68
-3.505155
2.63158
5.18
3.27
9296756
PHILIPPINES ALL SHARE IX
PH
3748.77
0.2516473
3.719924
4571.4
3440.12
SJM HOLDINGS LTD
24.35
-2.40481
-6.346154
28
17.04
6953810
8.74
-0.3420753
-1.354398
14.46
7.38
1912763 7505274
Euromoney Dragon 300 Index Sin
SI
592.39
-1.17
-3.13
NA
NA
STOCK EXCH OF THAI INDEX
TH
1314.63
0.4807619
1.225835
1649.77
1205.44
HO CHI MINH STOCK INDEX
VN
560.19
1.19953
11.01005
564.61
455.25
Laos Composite Index
LO
1220.78
-0.8640431
-2.597076
1446.66
1220.78
SMARTONE TELECOM WYNN MACAU LTD
33.75
-0.7352941
-3.982934
38.25
19
ASIA ENTERTAINME
#N/A N/A
#N/A N/A
#N/A N/A
#N/A N/A
#N/A N/A
0
BALLY TECHNOLOGI
75.68
-5.858938
-3.530908
82.67
45.38
1339590
BOC HONG KONG HO
3.05
-4.08805
-5.279504
3.6
2.99
28565
GALAXY ENTERTAIN
9.25
-3.343783
2.663704
10.81
3.8975
48595 25709784
INTL GAME TECH
Shanghai Shenzhen Composite index is listing the biggest companies by market capitalisation. All data supplied by Bloomberg unless otherwise indicated.
15.04
-14.78754
-17.18062
21.2
14.925
JONES LANG LASAL
104.75
-1.513727
2.304913
106.82
80.86
565333
LAS VEGAS SANDS
73.91
-6.110264
-6.288833
82.48
47.95
10544002 8727061
MELCO CROWN-ADR
38.2
-8.459142
-2.600717
45.4799
17.76
MGM CHINA HOLDIN
4
-2.912621
-7.192574
4.66
2
5900
MGM RESORTS INTE
23.78
-5.559968
1.10544
26.7
11.72
20361867
SHFL ENTERTAINME
#N/A N/A
#N/A N/A
#N/A N/A
23.25
13.88
0
SJM HOLDINGS LTD
3.14
-0.3174603
-5.988022
3.6
2.2
32150
193.14
-5.904706
-0.5509534
216.99
111.3456
3093851
WYNN RESORTS LTD
AUD HKD
USD
Hang Seng Index NAME
PRICE
DAY %
VOLUME
37
-1.333333
28034239
CHINA UNICOM HON
ALUMINUM CORP-H
2.92
0.3436426
23035738
CITIC PACIFIC
BANK OF CHINA-H
3.31
-0.8982036
407646746
BANK OF COMMUN-H
5.09
0.1968504
27149034
BANK EAST ASIA
30.4
-2.875399
2613974
9
-1.531729
42824550
AIA GROUP LTD
BELLE INTERNATIO
NAME
CLP HLDGS LTD CNOOC LTD COSCO PAC LTD ESPRIT HLDGS
24.1
-0.8230453
7503444
HANG LUNG PROPER
CATHAY PAC AIR
16.54
-0.8393285
3311040
HANG SENG BK
CHEUNG KONG
BOC HONG KONG HO
117.9
-0.3381234
2592965
CHINA COAL ENE-H
4.01
-1.474201
42048722
CHINA CONST BA-H
5.4
-0.9174312
330686264
CHINA LIFE INS-H
22.45
-1.965066
34041532
CHINA MERCHANT
27.45
-1.081081
4801605
PRICE
DAY %
VOLUME
10.32
0.5847953
21196632
9.85
-1.696607
8229019
60
-0.990099
3352660
12.66
-0.6279435
85540508
10.2
0
15.46
3664708
SWIRE PACIFIC-A
86.15
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11
0.3649635
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7068240
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1508727
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16.5
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2672411
84.4
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18661657
101.9
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6957678
4.76
-1.039501
330539034
10.98
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20622865
28
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2187500
15194833
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25286195
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0
2352920
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4271078
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6486613
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76.15
4958267
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10.72
82.2
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62.4
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22-January
24-January
15 15
January 2014 April 19,27, 2013
Opinion Business
wires
Japan’s new dawn
Leading reports from Asia’s best business newspapers
The Age Echo Entertainment Group Ltd is selling its smallest operation, the Jupiters casino in Townsville, to the private Colonial Leisure Group for US$70 million. It expects to make a pre-tax profit of about US$8 million on the sale after transaction costs. Echo operates the Star in Sydney, the company’s biggest casino, the Treasury in Brisbane, Jupiters Gold Coast and Jupiters Townsville. “Recent performance of Jupiters Townsville has been positive,’’ Echo chief executive John Redmond said. “However, given the scale of operations and the size of the local market, we saw more limited expansion opportunities, and therefore strategic fit, with the group’s other assets.”
Shinzo Abe
Prime Minister of Japan
F
Indonesia’s West Java administration plans to issue municipal bonds worth 4 trillion rupiah (US$329.8 million) to finance the construction of Kertajati International Airport, which will be located in the province’s Majalengka district. “We are now seeking approval from the Provincial Legislative Council’s [DPRD] Commission, overseeing finance and economic affairs. Once we’ve got the approval, the governor will apply for a permit from the Finance Ministry,” the province’s economic administration bureau chief, Sonny Samsu Adisudarma, said.
or years, pundits called Japan the land of the setting sun. They said that for an economy as mature as Japan’s, growth would be impossible. They said that our public debt was unsustainable. They pointed to our supposed psyche of resignation as a symptom of relative decline. But now such voices are rarely heard. Japan’s economy has swung from negative to positive growth and is on the verge of breaking free from chronic deflation. This spring, wages will increase – a long overdue development that will lead to greater consumption. Our fiscal position has also improved steadily, with my government on track to consolidate public finances. And, as the economy has turned around, Japan’s people have become more vibrant and upbeat – a mood reflected in public enthusiasm over the choice of Tokyo to host the 2020 Olympic and Paralympic Games. So it is not twilight, but a new dawn, that is breaking over Japan. And that is because we have overcome the notion that certain reforms could never be carried out. I have maintained that I am willing to act like a drill bit, strong enough to break through the solid rock of vested interests. And so we have. For example, we will completely liberalise Japan’s electricity market. By the time the Olympians arrive in six years, the power sector will be fully competitive, with electricity generation separated from distribution. We will also foster medical care as an industry. Japan is on the forefront of regenerative medicine, and we will make it possible to generate stem cells at private-sector labs. And I have just proposed additional reforms, because we also need large-scale health-care providers in the form of holding companies, much like America’s Mayo Clinic.
Myanmar Times
Deregulation package
The International Monetary Fund (IMF) raised Myanmar’s economic growth forecast to 7.5 percent for the 2013-14 fiscal year, up from 6.75 percent, due to continued economic reform that includes the loosening of restrictions in the private sector, the Fund announced in a release. Despite the country’s encouraging macroeconomic situation, the IMF once again warned that gains would be hindered by high inflation if steps are not taken to deal with the issue. “Financial sector modernisation will require sustained reform efforts over several years,” the statement reads.
Moreover, we are eliminating the “rice production adjustment” system, which has been in place for more than 40 years. Barriers to private companies’ entry into the agricultural sector will be removed, and farmers will be allowed to grow the crops they want, without official control over supply and demand. Soon, our deregulation package will be set in motion. Over the next two years, in designated areas, no vested interests will remain impervious. For example, in Japanese cities aspiring to world-class status, limits on floor space
Korea Herald South Korea’s chief economic policymaker made another public apology to contain mounting public anger over his comments on the worst-ever data leak by three local credit cards. “I thought I should apologise [again] to the public rather than explain the intention behind my words, if the words hurt the heart of the public,” Finance Minister Hyun Oh-seok said. In response to rising public concerns over a leak of their personal data, the financial authorities reiterated the leaked data was not distributed without a fact-finding process on what was wrong and measures to prevent a reoccurrence.
Jakarta Post
will become a thing of the past. We will soon see highquality housing, business complexes, and zeroemissions towns appearing, one after another. Likewise, the Trans-Pacific Partnership (TPP) will remain a central pillar of my economic policies, and we will press ahead with the JapanEuropean Union Economic Partnership Agreement. As a result, Japan’s economy will become even more deeply integrated into global flows of knowledge, trade, and investment. Companies and people from abroad will find Japan among the most business-friendly places in the world. Japan’s management of public funds – such as the Government Pension Investment Fund, which now holds about US$1.2 trillion – will also undergo far-reaching change. We will press ahead with reforms, including a review of the GPIF’s portfolio, to ensure that public funds contribute to growth-nurturing investments.
Tax changes We must also make our corporate taxes internationally competitive. In April, the tax rate on companies will fall by 2.4 percentage points. And we will put in place tax incentives aimed at encouraging companies to use their cash for capital investment, research and investment, and wage increases. At the same time, we will reform labour-market rules that tie workers to old industries. New industries require innovative and creative human resources, and we will redirect our subsidies so that workers without meaningful employment in declining industries can move on and find rewarding work in rising sectors. Of course, given that Japan’s population is rapidly ageing, and the number of children is falling, investors find themselves asking an obvious question: “Where will Japan find the
innovative and creative human resources that it needs?” Arianna Huffington once quipped that if Lehman Brothers had been “Lehman Brothers and Sisters,” the firm would have survived. Japan’s corporate culture is even more male-dominated – a world of pinstripes and button-downs. I was greatly encouraged when Hillary Clinton told me that Japan’s GDP could be 16 percent larger if women participated in the labour market at the same rate as men. Japan must become a place where women shine. By 2020, we want women to occupy 30 percent of leading management positions – a goal that presupposes a more flexible working environment, as well as support from foreign workers to take over domestic and personal services.
Legal reforms A major impetus for change will come in the form of legal reforms, to be introduced at the next parliamentary session, that will increase the number of external directors on corporate boards. Next month, we will also propose a stewardship code that will enable institutional investors to play a greater role in corporate governance. I am confident that the combined effect of these reforms will enable Japan to double its inward direct investment by 2020, rebooting the entire country and changing its economic landscape dramatically. But there is still much to do. Soon, three years will have passed since the catastrophic earthquake and tsunami struck northeastern Japan on March 11, 2011, causing the failure of the Fukushima Daiichi nuclear power plant. While the recovery is far from complete, the love and compassion reflected in the world’s response touched us deeply, as has the survivors’ spirit of perseverance and mutual aid
to overcome hardship. It is in the same spirit that Japan is now set to contribute even more positively to world peace and development. In our age, no single country can preserve peace by itself. None of us alone can solve the challenges that the world faces without helping one another. Japan is surrounded by neighbors with unlimited possibilities: China, South Korea, the ASEAN countries, India, Russia, and, across the Pacific Rim, the TPP partner countries. Indeed, with Asia becoming the engine driving the world economy, the need to achieve lasting peace and prosperity has never been greater, because the global knock-on effect of any threat to regional stability would be enormous. The foundation underpinning prosperity is freedom of movement for people and goods. On sea-lanes, in air space, and now in outer space and cyber space, freedom of movement must remain secure. The only way to maintain these indispensable public goods is by rigorously upholding the rule of law and promoting fundamental values like freedom, human rights, and democracy.
Defence budget There is no alternative. Asia’s growth dividend must not be wasted on military expansion. We must use it to invest in innovation and human capital, which will further boost growth in the region. As is true elsewhere, trust among Asian countries is crucial for their peace and prosperity, and this can be achieved only through dialogue and adherence to international law, not through force or intimidation. In order to create a region of trust and order, I would like to appeal to Asia and the world. To prevent unchecked military expansion in Asia, defence budgets should be made completely transparent, with verifiable public disclosure. Moreover, Asian governments should create a mechanism for crisis management and strong communication channels among our armed forces. We must also establish rules that promote behaviour based on international maritime law. Only then can we achieve lasting growth and prosperity in Asia, enabling all of us in the region to realize our great potential. Japan has pledged that it will never again wage war, and we have never stopped working for a world that is at peace. It is my fervent hope that Japan’s economic revival, with its promise of increased global and regional prosperity, will help to bring such a world closer. © Project Syndicate
16 16
January 27, 2014 April 19, 2013
Closing Lagarde warns on eurozone deflation
Ukraine opposition rejects offers
The head of the International Monetary Fund has warned that deflation remains a real risk to economic recovery in the eurozone. Despite signs of recovery across the world, Christine Lagarde said that potential risks must not be ignored. One of these was the fact that eurozone inflation, at 0.8 percent, remained “way below” the 2 percent target set by the European Central Bank. She said old risks included any failure to continue banking reforms and re-balance economies. New risks were how emerging economies responded to the winding down of economic stimulus measures in the United States.
Ukrainian opposition leader Arseniy Yatsenyuk says protests will continue after he rejected President Viktor Yanukovych’s offer to appoint him as prime minister of the country. Mr Yatsenyuk said the opposition was generally ready to accept leadership, but several key demands must be met, including new elections. The president’s proposal came amid new efforts to end the deadly unrest. The opposition is demanding that a free trade agreement with the European Union be signed and political prisoners be freed. They are also demanding early presidential elections. A vote is not due until 2015.
Bosses, workers to pay 5 pct each to retirement pot Government likely to start public consultation on central provident fund in March Tony Lai
tony.lai@macaubusinessdaily.com
T
en percent of employee monthly wages must in future be paid to the government’s provident fund, in order to support permanent residents in their retirement. The administration didn’t say whether the levy – to be shared equally between
the government and each employee – would be raised on gross salary or on the net amount after any income or professional taxes. Nor was a firm date given for the policy’s introduction. But the government may in March start collecting the public’s opinions
about the long-awaited fund and submit a bill to the Legislative Assembly later this year, said Ip Peng Kin, president of the Social Security Fund. All private accounts in the central savings system founded in 2009 will be transferred to the new provident fund
accounts. The enabling law also reduces the age at which a person can open a provident fund account from 22 to 18. The government has finished the draft for public consultation, Mr Ip said on Saturday on the sidelines of a public event. He said the current proposal aims to set up three accounts for employees in the fund, each with a different purpose. One will be for the money the government injects into the account of each permanent resident. Only permanent residents staying in Macau over 183 days a year can receive an injection of 10,000 patacas (US$1,250) from the government to activate the account, as well as possible injections from the public budget surplus. The second account will be for workers’ and employers’ contributions, while another account will allow workers to keep their funds when they change jobs. This structure would enable the system to be “transferable”, Mr Ip said. Tax relief will also be given to entice bosses to join this nonmandatory scheme, he said. For instance, employers’ contributions would be regarded as operating costs when calculating employers’ annual complementary taxes, he added. The fund would serve as the second tier of a two-tier system to fund citizens in their retirement. The government first mentioned the idea in 2007. Whether the fund would become mandatory will depend on the experience gathered during the first few years of the non-mandatory fund operation, Mr Ip stated when the idea was previously mooted in 2012.
CE denies meddling with Taipa North plan No development there to be approved before March 1, says Chui Sai On
C
hief Executive Fernando Chui Sai On said yesterday he hadn’t interfered in the Taipa North urban development plan. He also denied any collusion with business interests. Last week a pandemocrat group accused him of both things. Speaking publicly yesterday for the first time about the Taipa North plan, Mr Chui said no developments in the area would be approved before March, when the city’s first urban planning law comes into force. Critics have accused the government of rushing the amended plan through ahead of the new statute.
The pan-democrat New Macau Association last week accused Mr Chui and his administration of collusion with private businesses, including Legislative Assembly members and Mr Chui’s elder brother, Chui Sai Cheong. Asked yesterday on the sidelines of a public event to comment on the accusation, the Chief Executive said: “It is not correct. There were no interests involved in any decision.” Mr Chui said that since taking office in 2009 he has not interfered with approval procedures managed by the five government secretaries. “I also want to put it in
simple words. There should be no more speculation – we will not approve any projects… for the area [Taipa North] before March 1,” Mr Chui said. “We will strictly follow all the regulations regarding the urban planning law” when reviewing proposals for that area, he added. Mr Chui also said for the first time that the government would not announce any urban plan for zones C and D in the Nam Van area before March. He said that the Nam Van urban plan will be drafted under the laws that have been approved and will protect the cultural heritage in the area. Chief Executive Chui Sai On spoke to media yesterday
T.L.