MOP 6.00 Closing editor: Sara Farr Publisher: Paulo A. Azevedo Number 641 Thursday October 9, 2014
Macau Grand Prix budget
to hit MOP200 million
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Year III
acing costs money. As does track preparation. This year, the Macau Grand Prix Committee will stump up to MOP200 million. That’s an extra MOP10-25 million for the 61st MGP. Track installation works will be carried out at night in order not to overly affect residents. The Committee calculates that every pataca spent returns MOP8 in terms of exposure and ticket sales PAGE
MGTO anticipates record arrivals Another milestone. The number of visitor arrivals for the whole of 2014 is set to surpass 30 million. Macau Government Tourist Office says it’s more than likely. Last year, the territory welcomed 29.3 million visitors. MGTO says diversification of purpose and prolonged stay are the new priorities
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Sinking confidence
Bangkok Airways mulls Macau-Koh Samui route Page 2
Renovations take time. Ask Jai Alai Palace. Still at a standstill while authorities review an application for a building modification permit. Suspension of the revamp was ordered by the government in March this year. But neither owners SJM nor the Land, Public Works and Transport Bureau are keen to explain why
Beijing’s 5-star hotels suffer graft fallout Page 4
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French retailer Vivarte sizing up Macau Page 5
Brought to you by
HSI - Movers October 8
Name
It’s that sinking feeling. Consumer confidence has dropped to its lowest level so far this year. The latest index survey by the Macau University of Science and Technology puts overall consumer confidence at 85.1 out of 200 points. An ‘unsatisfactory’ result by survey standards. Mainland Chinese confidence, however, is a perky 7 percent up on a year ago
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Still on hold
2
Adjusting to reality
%Day
Want Want China Hol
1.65
CITIC Ltd
1.51
Tingyi Cayman Island
0.97
New World Developme
0.54
Hong Kong & China Ga
0.12
Sun Hung Kai Propert
-1.51
PetroChina Co Ltd
-1.98
Sands China Ltd
-2.54
Galaxy Entertainment
-2.68
China Resources Powe
-4.74
Source: Bloomberg
I SSN 2226-8294
The tertiary sector has lost momentum. The HSBC/Markit Index measure still exceeds the expansion/contraction line. But the slowing pace, combined with last week’s negative manufacturing figures, gives pause for thought
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2014-10-9
2014-10-10
2014-10-11
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October 9, 2014
Macau 2013 social housing waiting list released The waiting list for the 2013 applications for social housing was released yesterday by the Housing Bureau. A total of 3,724 out of 6,146 applicants have been approved, while the remaining 2,422 applicants were rejected, primarily due to their income or net asset value exceeding the maximum limitation, or not having submitted sufficient documentation. The applicants who were declined by the Bureau can appeal to the authority until October 23. The confirmed list will be released by the end of the year. The lists are posted at the Housing Bureau.
Macau Grand Prix budget increases to MOP200mln This year’s budget for the Macau Grand Prix is set to increase by MOP10 million in order to avoid disturbing people living in the city. The rising costs of construction works also contributed to an overall budget of between MOP190 million and MOP200 million João Santos Filipe
jsfilipe@macaubusinessdaily.com
Photo courtesy of CGPM, GCS
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rom 2012 to 2014, the budget of the Macau Grand Prix has increased by MOP10 million to MOP25 million in order to guarantee that locals will not be overly affected by the track installation, the Coordinator of the Macau Grand Prix Committee, João Costa Antunes, said yesterday during the presentation of the 61st Macau Grand Prix programme. “The increase in the cost of the Grand Prix is related to the installation works of the track that were carried out during the night and in the summer but also the rising costs of construction works in Macau”, he said. “We knew it would be more expensive if the installation procedures of the track were carried out during the night. But we considered that avoiding any inconvenience for the people of Macau was more important”, he explained. As the 2013 edition of the Grand Prix was the celebration of its 60th anniversary and spanned two weekends, this year’s budget has to be compared with that of 2012. In these years, races were run over one weekend. In 2012, the cost of the races was MOP175
million; this year, they will increase to some MOP190-200 million. On the other hand, the organisation has attracted MOP33 million in sponsorship and expects the revenue from ticket sales to exceed MOP44 million. “When we are talking about the budget of the Grand Prix of Macau we have to think as well of the return on investment. Since the handover [of Macau to China] three studies have been carried out by an independent Singaporean company to assess the relation of investment to return. They
Bangkok Airways mulls Macau-Koh Samui route
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angkok Airways is interested in launching direct flights between Macau and one of Thailand’s popular tourist destinations, Koh Samui. In addition, Air New Zealand is interested in launching a trial charter operation from New Zealand to Macau, Macau International Airport Company Limited (CAM) revealed on their official website. The company met with the two airlines during the 20th World Routes Development Forum in Chicago, USA between September 21 and 23. The forum attracted more than 3,000 delegates from airlines, airports, tourism authorities and suppliers as well as civil aviation representatives from more than 100 countries. According to CAM, the company also met with Air India, Mega Maldives Airlines, Jestar Group
and the Okinawa Tourism Board to explore cooperation opportunities during the forum. ‘Recently, MIA [Macau International Airport] has been actively seeking opportunities to launch long haul flight services; it is hoped by attending the subject forum it will bring in more international airlines to the Macau market, providing passengers with more travel options,’ the company wrote in the announcement. Currently, the city provides regular direct flights between Macau and two cities in Thailand, namely Bangkok and Chiang Mai. The Macau-Bangkok routes are offered by three different airlines, Air Macau, Thai Smile Airways and Air Asia, which is also the only one running the Macau-Chiang Mai route. K.L.
proved that every pataca invested in the Grand Prix has a return of MOP8”, Antunes said. “These studies analysed the number of articles in newspapers about the Grand Prix, the number of minutes promoting and talking about Macau because of the Grand Prix on TV and its coverage. We also questioned many tourists, and some admitted that the first time they had heard about Macau was because of the Grand Prix”, he added.
Improving every year As for the programme, which was revealed yesterday, the organisation stressed the increasing quality of the races. It was also said that the Macau Grand Prix Committee is incessantly seeking new ways to improve the championship.
Last Sunday, a crash during the Japanese F1 Grand Prix injured French driver Jules Bianchi, who is in critical condition and fighting for his life. This issue has raised safety questions about the Macau Grand Prix. “We’re trying to improve our safety conditions every year in order to make it a better Grand Prix. These situations can happen in any race but we’re always taking new measures to increase our safety. We are training our race officials and the staff more and more”, Mr. Antunes said. The Coordinator of the Macau Grand Prix Committee also praised the entry list that was revealed yesterday and the capacity of the races to attract a large number of drivers. “All the races in which we select the entry list are full booked. More and more drivers want to race in Macau and so we have to reject some participants. However, this is a sign of the quality of the drivers on the grid”, he explained. This year, Max Verstappen will race for the first on the Guia Circuit in the Formula 3 race. The 17 year-old Dutchman has already signed with F1 team Toro Rosso and will be the youngest driver to ever participate in an F1 race next season.
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October 9, 2014
Macau
Jai Alai Palace revamp on hold The government said it has yet to issue a building modification permit for revamp works to resume at Jai Alai Palace Stephanie Lai
sw.lai@macaubusinessdaily.com
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he government has yet to issue a permit for renovations of casino operator SJM Holdings Ltd’s Jai Alai Palace building to proceed after months of suspension of revamp works, casting severe doubt on the reopening date of the building. Jai Alai Palace was set to be renovated starting late February last year following the lease of the property by Angela Leong On Kei – an executive director at SJM Holdings Ltd and a Macau legislator – to SJM for three years ending December 31, 2016 at a monthly rent of 10.3 million patacas (US$1.3 million), the company said in a filing with the Hong Kong Stock Exchange on November 18, 2012. However, during a site visit by Business Daily to Jai Alai Palace yesterday, there was still no sign of works on the premises following months of revamp suspension ordered by the government in March this year. In an email reply, the Land, Public Works and Transport Bureau told Business Daily that the application for the permit of building modification – one that the government issues for revamp works to proceed – was still being reviewed.
Business Daily Half Page Ad Gala Night October 5th outlines.indd 1
The Bureau did not respond regarding the reasons why the suspension was imposed on the Jai Alai Palace site, and when the works could possibly resume. Business Daily has approached SJM for more information on the revamp suspension at Jai Alai Palace
but had not received a reply by the time the story went to press. Speaking to the city’s Chineselanguage public broadcaster TDM Radio in late March this year, Ms. Angela Leong did not confirm whether the employment of illegal labour was the cause for the revamp suspension at
Jai Alai Palace, although she expressed concerns about the impact of the suspension on the revamp progress. As at June 30 this year, SJM had entered into capital commitments for the Jai Alai Palace renovation project with a total value approximating HK$720 million (US$92.9 million), the casino operator said in its interim report filed with the Hong Kong Stock Exchange on September 1 this year. In the interim report there is no mention of the suspension of works at the Jai Alai Palace building but SJM noted in the report that it expected to see it reopen in 2015, with new facilities including a hotel providing about 130 rooms, restaurants and retail outlets that the company envisioned would enhance the business of the to-be-reopened Casino Jai Alai and its adjacent Casino Oceanus. Jai Alai Palace used to be one of Macau’s oldest casino and entertainment venues, within walking distance of the Macau Maritime Ferry Terminal in the Outer Harbour. The property is connected to Casino Oceanus next door via a pedestrian overpass.
10/6/2014 1:05:15 PM
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October 9, 2014
Macau
Consumer confidence sagging The consumer confidence index in the third quarter reached the lowest it’s been this year. Residents’ faith in purchasing property keeps weakening, while confidence in the SAR’s overall economy continues to increase Joanne Kuai
joannekuai@macaubusinessdaily.com
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onsumer confidence is at an all-time low since the beginning of the year. In the third quarter of the year, consumer confidence was 85.1 out of 200 points, according to the latest Consumer Confidence Index conducted by the Macau University of Science and Technology (MUST). Index scores below 100 suggest a lack of confidence while scores above 100 imply a degree of positive outlook. The survey results from the third quarter of 2014 showed that the overall confidence index declined slightly. Half of the six subindices decreased, while half increased compared to the second quarter. The ‘local economy’ sub-index regidtered 108.82, slightly up 0.51% compared to the second
quarter, indicating that Macau consumers remain optimistic about the local economy’s overall performance. The ‘employment’ subindex was still the highest (124.20) among the six subindices in the third quarter of 2014, down 1.73 percent from the second quarter and suggesting a cautiously optimistic outlook by Macau consumers regarding their employment prospects in the labour markets. The ‘consumer prices’ sub-index was 59.59, up 1.34 percent compared to the second quarter of 2014 and implying a noticeable drop in Macao consumer inflation expectations. The ‘living standards’ sub-index was 93.34, down 1.67 percent from the second quarter of 2014 and indicating that Macao
residents’ living pressures due to inflation were still of concern. The ‘housing purchase’ sub-index remained the lowest (38.34) among the six sub-indices in the third quarter of 2014, down 2.64 percent compared to the second quarter and suggesting a further negative sentiment among potential residential homebuyers. The ‘stock investment’ sub-index stood at 85.76, up 2.3 percent from the second quarter of 2014, reflecting a significantly recovered willingness by local consumers to invest in the volatile stock market. The survey was conducted over a week from 26 September. The survey interviewed 1,015 Macau residents aged above 18 via telephone calls. The Institute for Sustainable
Crowne Plaza job fair offers 220 jobs
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rowne Plaza Macau, scheduled to open in the fourth quarter this year, will recruit around 220 staff, mainly local residents. In a press release regarding the recruitment day, the general manager of the hotel, Dominique Berhouet, said this time the focus would be on hiring local talent, including fresh graduates, in order to inject some new energy into the hotel’s development. Crowne Plaza Macau told Business Daily that around 50 people had applied for a job in the first round of their job fair in April this year. The recruitment process is also ongoing online and via other means. Currently, around 30 people are in position while another 60 to 80 are ready to start working.
Positions that still need to be filled include front office, engineering, and food & beverage among many others. The job fair will take place this Friday and Saturday in Shop A in Residencia at Areia Preta where the pre-opening office of the hotel is sited. Crowne Plaza Macau, a member of the InterContinental Hotels Group, is located at the Residencia, a premier project comprising seven towers, including five residential, one for service apartments and one for the hotel. The hotel is positioned to attract high-end business and leisure travelers, in which people under the age of 18 are not allowed. J.K.
Development of MUST has released the index every quarter since 2009.
Mainlanders more confident Meanwhile, in the neighboring SAR, the consumer confidence index recorded a 4.5 percent drop, according to a survey conducted by the City University of Hong Kong. While in four subsections, namely general local economy, commodity price, purchasing property and investing in stock scored lower than 100, employment scored 99.5 and living quality scored 105.4 in the third quarter of this year. According to Xinhua News Agency, the survey also compared the index before and after the
Occupy Central movement. The result indicates that following the political turmoil the index slumped 16.3 percent in terms of consumers’ confidence in the general economy, whilst confidence in purchasing property increased 17.8 percent. In Taiwan, the overall index dropped 0.7 percent but shows a positive perspective in terms of investing in the stock market whilst price levels and the general economy remain the top concerns. In this cross-straitfour-regions survey, only mainland China scored an increase in confidence in the third quarter, some 5.2 percent up compared to the previous quarter, and 7 percent up year-on-year. It’s also the highest level since 2010.
Beijing’s 5-star hotels suffer graft fallout The anti-graft campaign of the central government has not only affected local gaming operators - currently, the revenue of the highest-standard hotels in Beijing is also having to weather the storm Kam Leong
kamleong@macaubusinessdaily.com
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n addition to depressing gaming revenues in Macau, Mainland China’s campaign against corruption is prompting 5-star hotels in Beijing to re-brand themselves by lowering their prices and shunning their 5-star label. Hong Kong’s English language newspaper South China Morning Post reported yesterday that revenues in the capital’s 5-star hotels dropped some 8.9 percent during the first eight months from a year earlier to 7.2 billion yuan (US$1.1 billion). The newspaper also quoted a senior vice-president of the hotels and hospitality group at Jones Lang LaSalle (JLL), Mandy Li, as saying that “the government’s crackdown against extravagant consumption is having a significant impact on prices… Some newly opened hotels are not eager to be labelled 5-star.” JLL is a global real estate firm providing commercial real estate services for corporations and investors. Earlier this year, the capital
city removed all 5-star hotels from its government procurement list, forcing some operators to turn to the mass market, according to the newspaper, which also quoted official data showing that the average 5-star hotel room rate in the capital city declined by 7 percent in the first seven months from a year earlier to 805 yuan, although the occupancy ratio increased slight to 61.5 percent. In fact, many believe that the anti-graft campaign is one of the factors causing the steepest drop in revenues for Macau’s gaming industry by keeping high-rollers away. According to official data released by the Macau Government on Monday, the gross gaming revenue of the casinos here dropped 11.7 percent year-on-year to 25.6 billion patacas (US$3.2 billion) from 29 billion patacas in September, the fourth consecutive month that the city experienced a decline in profits from its dominant industry. This decline is the biggest since June 2009.
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October 9, 2014
Macau
30 million tourist visitations distinct possibility The director of the Macau Government Tourist Office expects the number of tourists visiting Macau to exceed 30 million for the first time in the history of the city. Now MGTO turns its attention to increasing tourists’ length of stay João Santos Filipe
jsfilipe@macaubusinessdaily.com
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he year 2014 will set a new record in number of tourist visitations to Macau, director of Macau Government Tourist Office Maria Helena de Senna Fernades said yesterday on the sidelines of a press conference announcing the Macau Grand Prix programme. “It’s very likely that the number of tourists to Macau may be over 30 million. However, we haven’t yet set a goal for the number of tourists we want to reach”, Helena de Senna Fernades said. “We consider that the current number of tourists is not small. Having said that, it is not realistic to set as an objective a steep growth in terms of tourist volume”, she added. The record of tourists entering Macau was set last year, after 29.3 million visitors crossed the borders to come to the Special Administrative Region. Since 2010, a new record has been set every year. However, 2014 may be the first year to welcome more than 30 million visitors to the city. The goals of the Macau Government Tourist Office, however, are no longer focused on significantly increasing visitation. “ We’r e t akin g a d iffe rent direction. We want tourists to stay longer, visit different places and spend their money on more varied sectors instead of only one. Of course, such targets take time to be achieved”, she said. The Director of Macau Government Tourist Office was also asked about the central government ban on tour groups to Hong Kong, following pro-
democracy demonstrations in the neighbouring city. More than 40 million Mainland Chinese visit Hong Kong every year. Group tours often include visits to Macau. “We will continue to observe the situation. But it’s hard to tell exactly how big the impact on Macau will be. We know from the press that package tours account for around
10 percent of visitors to Hong Kong. However, for the moment we don’t see any impact”, she said. “I believe that the ban will affect the so-called Hong Kong-Macau tours because tourists from the mainland are used to travelling to both of the cities together”, she added. In spite of this ban, the number of visitors arriving in Macau increased
by 11 percent in the first 4 days of the month, which was explained by the fact that there more tours had Macau as their sole destination. “We believe that this is justified by the fact that there are more Macau tours and other tours related only to Macau. This part has more or less compensated for the ban on Hong Kong-Macau tours”, she said.
French retailer Vivarte sizing up Macau
China Star repurchases movie unit
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rench fashion retailer Vivarte is mulling opening 200 stores in Asia from next year, seeking to generate sales of US$350 million in four years. Macau is one of their destinations. The French group - which owns 4,800 outlets throughout the world and manages some twenty fashion and footwear brands - has signed an agreement with GRI Retail to bring three of its brands, namely Minelli, André and Cosmoparis, to Asia, Spanish newspaper Modaes reported earlier this week. According to the newspaper, Vivarte’s Asian project will kick off in January 2015 by opening its first store in Shanghai. Two other stores in Hong Kong and Macau will be launched in the second half of next year. Other destinations include Singapore, Malaysia, Thailand, South
Korea and Taiwan. Business Daily reached the office of GRI Retail in Hong Kong, which told us that the store planning is not yet confirmed, and could not yet provide the exact date of the Macau store opening. It is the first contract signed by Vivarte and GRI Retail after the French group reached an agreement with its creditors to refinance the company’s debt and reach new resources last July, the newspaper said. Currently, the company has a workforce of 22,000 people and an annual turnover of about 3,000 million euros. Meanwhile, GRI Retail holds more than 1,000 outlets in Asia and France, managing more than 10 brands, such as Nine West and Steve Madden. K.L.
ong Kong-listed gaming service firm China Star Entertainment Ltd – which controls casino Lan Kwai Fong in Macau – announced to the Hong Kong Stock Exchange on Tuesday after trading hours that it was buying back China Star Movie Ltd, a company principally engaged in film production. China Star Movie had been sold to Dance Star Group Ltd for HK$4.3 million (US$554,554) in April. But the movie production company was now being bought back by China Star Entertainment for HK$8.67 million in cash, also the value of China Star Movie’s net assets as at October 7. Heung Wah Keung resigned as the chairman and executive director of China Star Cultural with effect on Tuesday. ‘With Mr. Heung’s resignation as
an executive director of China Star Cultural... the China Star Cultural directors consider that the interests of the China Star Cultural Group would be better served by re-allocating and focusing its management and other resources on its other business segments,’ the Tuesday filing noted. ‘The China Star directors consider that the transaction will enable China Star Group to continue its furtherance and development of its already well established film production business alongside its other principal businesses such as the hotel and gaming services operation and other gaming related services businesses in Macau,’ the filing said. Heung Wah Keung is the chairman of China Star Entertainment Ltd. He held approximately 32.3 percent of the company’s entire issued share capital. S.L.
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October 9, 2014
Macau Brands
Trends
Time for Hermès Raquel Dias newsdesk@macaubusinessdaily.com
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xperts say that equestrian sports have become more popular. To add to this, the fact that we’re still celebrating the Year of the Horse makes the elegant animal one of the major inspirations for fine watchmaking. Hermès celebrates these traditions in the most elegant example we’ve seen so far. The Orient, in all it’s glory, is celebrated in the Arceau Cheval d’Orient. The timepiece makes beautiful usage of French lacquer tradition to mimic this beautiful imagery. The Persian-inspired horse is used as the central element, with three horology compositions. Because the lacquer is made with a metal base instead of wood or bamboo a partial revisiting of the traditional techniques is required. Each of these dials is assembled in a white gold Arceau model, driven by a Manufacture Hermès H1837 calibre. The timepieces are handcrafted and each take several days to complete. The brand’s first incursion into the world of watchmaking dates back to 1912. The inspiration was obvious with the use of the first porte-oignon, a leather casing that protected it from shocks while retaining its readability on horseback. It was only in the 1970s that the Arceau watch was launched. This line, which draws its name and design from the hoop-shaped part of the stirrup, has since become an icon that Hermès regularly reinterprets.
Golden Week gaming revenues down 30 pct Analysts are revising October casino revenues, which could decline by 23 pct. For now - and despite the 6 pct increase in the number of tourists during the holiday - the gaming industry made MOP600 million less than last year… every day Luís Gonçalves
luis.goncalves@macaubusinessdaily.com
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acau casinos suffered a 30 percent drop in revenues during Golden Week, despite the number of tourists in Macau reaching an all-time high of almost one million visitors, 6 percent more than last year. This contradiction indicates that visitors here are spending less (in time and money) in casinos and spending more elsewhere, such as on shopping, dining and entertainment. According to the latest analysts’ estimates released yesterday, gaming revenues during Golden Week registered a record decline of more than 30 percent compared to the same period last year. Wells Fargo says revenues likely dropped 33 percent between October 1 and 5, while Sterne Agee, using a six-day range estimation (October 1 to 6), is anticipating a decrease of 30 percent. Both companies attribute the drop to a lesser presence of high rollers and mass premium gamblers during this year’s Golden Week. The VIP segment generates more than 60 percent of all industry revenues here, and mass premium is a crucial engine for the most profitable mass segment. These wealthy players are assuming a lower profile in Macau or simply gambling in other destinations. During last year’s Golden Week, casinos in Macau raked in a daily average of MOP1.8 billion in revenues. In 2014, the figure likely didn’t surpass the MOP1.2-1.3 billion mark, according to both investment houses. If predictions are correct, the gaming industry in Macau made MOP600 million less in revenues every day (or MOP3-3.6billion during the 5-6 days) during Golden Week compared to 2013. Hong Kong protests during the recent public holiday also exercised a negative impact on Macau. ‘We believe Hong Kong’s Occupy Central protests negatively impacted quality of play early in October’, wrote Sterne
Galaxy wins overall and VIP race, Sands takes the mass market trophy
September Market Shares (%) VIP
Mass
Total
Sands
15.4
29.4
21.8
Wynn
12.3
9.1
10.8
19
23.1
20.8
Melco Crown
10.6
15.1
12.6
MGM
13.2
8.6
11.1
Galaxy
29.5
14.8
22.8
SJM
The worst case scenario would see October gaming revenues decline by 35 percent Wells Fargo
Agee in a note to clients. ‘Many Mainlanders delayed or cancelled trips to Hong Kong in the wake of last week’s protests. Mainlanders often travel to Macau during their visit or holiday in Hong Kong’.
Tourist bonanza Despite the lesser inflow of mainlanders, the tourism industry
here saw a boom this Golden Week. Official data by Macau authorities reveals that in the first seven days of October some 901,000 tourists arrived in the territory, 6.1 percent more than a year ago. With a softer Golden Week, investors quickly revised down their estimations for the rest of the month. Sterne Agee expects revenues to decline 18 to 23 percent year-onyear, while Wells Fargo assumes a more pessimistic tone with a drop of between 20 and 23 percent. Both companies say, however, that October figures could be much worse. Wells Fargo estimates that revenues could drop 35 percent in the worst case scenario, while Sterne Agee admits a downside potential to its estimations. The problem is that revenues normally fall hard after holiday periods like Golden Week. For example, the average daily revenues in casinos after last year’s Golden Week dropped by half (from MOP1.8 billion to MOP980 million). If the same happens this year, revenues from gaming tables in Macau will fall to MOP650 million daily for the rest of the month. Investors are expecting only a drop to a daily MOP850-900 million. Time will tell.
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October 9, 2014
Macau
Chinese skip Hong Kong and ‘Occupy’ Macau Protests in the neighbouring SAR have attracted more mainland Chinese visitors to the territory here, boosting retail sales
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s Hong Kong protesters were blocking roads and forcing shops to close, a record number of Chinese tourists were occupying the streets of Macau. More than 750,000 mainland Chinese tourists have poured into the world’s largest gambling centre since the China National Day holidays known as Golden Week began Oct. 1, with growth accelerating to 17 percent over last year. The surge came as the Occupy Central pro-democracy movement pushed Hong Kong into its worst political crisis in decades and cut its rise in Golden Week visitors to 5.4 percent, compared with 16 percent last year.
Macau has gradually become a tourism destination of its own because it offers shopping, dining and entertainment experiences, such as boxing, concerts and gambling Victor Yip, UOB-Kay Hian analyst
“Occupy Central has boosted the retail market and brought more mainland Chinese to Macau,” said Lei Kuok Keong, who plans casino trips for high-rollers and is also vice chairman of the Macau Gaming Industry Frontline Workers union. “Some Hong Kong people who wanted to avoid the protests also came to Macau. That has helped boost the visitor numbers to casinos.” That’s been a dose of relief for the former Portuguese colony, which is experiencing its worst slump in casino revenue in five years. President Xi Jinping’s nationwide graft crackdown has squeezed high-stakes gamblers, who account for more than 60 percent revenue in China’s only enclave of legal gambling. Macau casino stocks fell today amid a broader drop in Asian markets. Sands China Ltd. fell as much as 4.2 percent to HK$41.45 as in Hong Kong trading, while MGM China Holdings Ltd. and Galaxy Entertainment Group Ltd. dropped 4 percent and 3 percent. Wynn Macau Ltd. lost as much as 3.5 percent, Melco Crown Entertainment Ltd. 2.6 percent and SJM Holdings Ltd. 1.9 percent. The benchmark Hang Seng Index was down 1 percent.
Mass market Casino operators are shifting their focus to China’s growing middle class. That means catering to couples, families and gamblers who bet thousands of yuan instead of millions, a “mass-market” strategy adopted long ago in Las Vegas. The trick has been drawing enough people to make up for the drop in high-rollers. Take Jerry and Joycelyn Lu, who arrived in Macau from the eastern city of Nanjing with their two young children Saturday. The family
I would expect Macau to benefit from some travellers who avoided Hong Kong Victor Yip, UOB-Kay Hian analyst
expected to spend at least 30,000 yuan (US$4,900), including a stay at the Sheraton and 8,800 yuan for a Tissot watch. Jerry Lu said he would only spend about 1,000 yuan in the casinos, a sum he had already lost. “We are not very keen on gambling,” he said. “We would prefer to spend our money on dining and shopping.”
Luxury shops During a visit to four Macau casinos Oct. 6, tables with lower minimum bets had more gamblers than those with higher ones. Customers were scarce in the luxury shops at the Wynn Macau, with a few customers browsing Louis Vuitton bags and Jaeger-LeCoultre watches. Similarly, the economy section of a Shun Tak ferry from Hong Kong was almost full while about two-thirds of the more expensive superclass seats were empty. This year, more than five times as many Golden Week visitors arrived
in Macau directly from the mainland. That may help explain why the gaming hub’s traffic soared while Hong Kong’s fell. “Macau has gradually become a tourism destination of its own because it offers shopping, dining and entertainment experiences, such as boxing, concerts and gambling,” Victor Yip, a Hong Kong-based analyst at UOB-Kay Hian Ltd., said yesterday by phone. “I would expect Macau to benefit from some travellers who avoided Hong Kong.”
Jewellery sales As major Hong Kong retail chains reported declines in holiday sales of as much as 50 percent, shops have fared better in Macau. Chow Sang Sang Holdings International Ltd. saw sales at its five Macau jewellery stores rise more than 10 percent, with more than 90 percent of customers hailing from the mainland. “Shoppers in Macau were more willing to spend compared to those in Hong Kong,” Dennis Lau, director of sales operations for Chow Sang Sang Jewellery Group, said by phone today. “Our Macau sales increase may be partly due to tourists avoiding Hong Kong amid protests.” For some tourists, like Zhao, a businessman from the southeastern city of Xiamen, Macau offers something Hong Kong can’t match: casinos. He said he plans to spend more than 50,000 yuan eating Portuguese food, getting massages and gambling at places like SJM Holdings Ltd.’s Grand Lisboa. “The protests don’t affect me at all,” said Zhao, who would give only his surname. “I have no plans to visit Hong Kong anyway.” Bloomberg
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October 9, 2014
Gaming
Revel auction: loser challenges sale to winner Brookfield, who won the auction, has hired a team of hotel industry experts to assist in turning around Revel
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evel should reopen bidding for its Atlantic City casino, which Brookfield Property Partners LP won at auction last week, according to a Florida investor who claimed he was cheated of a chance to make a higher offer. Revel, which cost US$2.4 billion to build, closed last month after two years of unsuccessfully trying to make a profit in the struggling New Jersey gambling center. It accepted a US$110 million offer from Toronto-based Brookfield on October 1 after an allnight auction. The sale is scheduled to go up for approval today in U.S. Bankruptcy Court in Camden, New Jersey.
Glenn Straub, owner of the Palm Beach Polo Golf and Country Club in Wellington, Florida, protested the way the auction was handled, saying in a court filing October 5 that Revel broke an agreement to provide details about competing bids. Straub also said a “life or death” medical issue hindered his ability to counter Brookfield’s winning offer. “This entire auction proceeding is highly suspect, and, given the appearance of impropriety and lack of open communication, tainted at best,” Straub’s lawyer, Stuart Moskovitz, said in the filing. Straub is asking the court to block the sale
Caesars gets default notice as bondholders make claims on assets
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group of Caesars Entertainment bondholders declared that the casino company’s largest unit is in default after it pledged collateral to senior creditors without giving them similar claims. Wilmington Savings Fund Society, a trustee representing holders of US$3.7 billion of Caesars Entertainment Operating Co.’s 10 percent second-lien notes due December 2018, said failure to grant them a claim on certain assets constitutes a default, Las Vegas-based Caesars disclosed yesterday in a U.S. Securities and Exchange Commission filing. Caesars, taken private in a US$30.7 billion leveraged buyout by Apollo Global Management LLC and TPG Capital in 2008, is in talks with the senior creditors of its biggest unit to craft a plan that would reduce the consolidated company’s US$24.2 billion in long-term debt, according to people with knowledge of the discussions. Investors are jockeying for claims since the company doesn’t have sufficient assets to mollify all creditor classes. Gary Thompson, a spokesman at
Caesars, declined to comment beyond what was disclosed in the filing. The second-lien bonds traded at 22 cents on the dollar yesterday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Holders who own at least 30 percent of those securities “may accelerate the notes upon an actual event of default,” according to the filing. Caesars has 60 days to take action that would avoid a default. Last month, the casino operator granted more senior bondholders and its loan investors the right to possible proceeds from lawsuits brought against it, including claims it fraudulently moved assets away from investors. The more junior debtholders want a similar pledge. In August, certain bondholders sued the company, saying it fraudulently moved assets after Caesars sold a 5 percent stake in its operating unit to undisclosed investors. That meant some bondholders would no longer hold a right to the parent company’s assets, leaving them with less bargaining power in talks over the debt. Bloomberg
and to appoint a trustee to restart and oversee the auction. Andrew Willis, a spokesman for Brookfield, declined to comment on Straub’s complaints.
Hard Rock Brookfield, owner of the Atlantis resort in the Bahamas and the Hard Rock Hotel & Casino in Las Vegas, said it plans to reopen Revel as a casino. Brookfield this year acquired a team of hotel industry experts who can assist in Revel’s turnaround. The company has upgraded the rooms and restaurants at Atlantis and integrated the property into Marriott International Inc.’s booking system, giving an indication of what it could do with Revel, Willis said. Straub entered the auction as the “stalking horse” bidder with a US$90 million opening offer. In a Sept. 29 court filing asking to halt the sale process, Straub said he was led to believe he would see the offers from other interested parties after
the Sept. 23 deadline for submitting bids. He still wasn’t aware of Brookfield’s offer when bidding began Sept. 30, Moskovitz said in a phone interview. Straub could have offered more, but needed time to evaluate his options, according to the lawyer. “We told them we were prepared to bid higher,” Moskovitz said. “We could not do it that day.”
Medical condition According to Straub’s October 5 filing, he didn’t have pills with him that he needed for a medical condition, which isn’t specified in the document. “We gave Mr. Straub every opportunity to make another bid. We stayed up all night and we didn’t receive any,” John K. Cunningham, a Revel attorney, said in an interview last week after the auction. “All he is, is a disgruntled losing bidder.” Bloomberg
Corporate
‘Gift of love’ concludes Biennial of the Lions The Hong Kong Down Syndrome Association has created the 51st lion sculpture for MGM Macau, with the ‘Gift of Love’ bringing the Biennial of the Lions to an end on Sunday after attracting more than 20,000 guests. ‘With this lion sculpture, MGM Macau hopes to further attest to its efforts in making art accessible to all groups across the community,’ a company statement said. The lion sculpture was painted by 15 members of the Hong Kong Down Syndrome Association. ‘The lion, coated in vibrant yellow, orange and green colors, signifies the pure heart which brings happiness and spreads the message of love to the world,’ the company said. Andrew Yuen, vice president of the Association, said “It was an unforgettable experience for our members to create a work of art; through that we are also sending our love and compassion to the rest of the world.”
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October 9, 2014
Gaming Iao Kun rolling chips turnover up 5 percent in September
Philippine gaming regulator to penalise Universal for delayed casino launch
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he Philippine’s gambling regulator will penalise the local affiliate of Japan’s Universal Entertainment Corp if it fails to open a US$2 billion casinoresort along Manila Bay next year as planned, the head of the state authority said. Tiger Resorts Leisure and Entertainment, the local affiliate of Universal, which is controlled by gaming magnate Kazuo Okada, said last month it was likely to launch the first phase of its casino-resort project in 2016, a year later than planned. Asked if the regulator, the Philippine Amusement and Gaming Corp (Pagcor), would penalise Tiger for not meeting the deadline, its chairman Cristino Naguiat said Tiger would lose a 100 million pesos (US$2.24 million) guarantee that all casino operators maintain with the regulator. “Based on the project implementation plan, they are supposed to finish it by March next year,” Naguiat told reporters late on Tuesday. He also said the regulator may take other measures against Tiger. “The lawyers are looking into it,” he added. Tiger officials, however, were not immediately available to comment.
Tiger holds one of four licenses to operate a casino complex in Entertainment City, the Philippines’ answer to gaming hubs in Las Vegas and Macau. The company has yet to say why the project, which started being developed in 2012, would be delayed. The regulator has said that Tiger has so far failed to secure a local partner to address land ownership restrictions that it is currently in violation of. The Philippine constitution bars foreign entities from owning more than 40 percent of land. In 2012, an arm of thePhilippine justice department published a legal opinion indicating the Okada group had
breached the constitution. Three other groups hold licenses to operate in Entertainment City. Bloomberry Resorts Corp opened the first phase of its US$1.2 billion casino-resort last year. The joint venture of local firm Belle Corp and Melco Crown Entertainment is expected to open the Cityof Dreams Manila casino-resort this year, a project worth over US$1 billion. Alliance Global Group Inc and Genting Hong Kong Ltd , partners in casino-hotel firm Travellers International Hotel Group Inc, expect to complete their casino-resort project in Entertainment City by 2018.
ao Kun Group Holding Company Limited announced yesterday that the rolling chip turnover for its VIP rooms in September generated US$1.18 billion, which is 5 percent growth year-on-year, compared to the US$1.12 billion during the same period last year. However, compared to August, the rolling chip turnover of the group actually dropped from US$1.53 billion. Rolling chip turnover is the rate used by casinos to measure the volume of VIP business transacted. Meanwhile, the group, a junket operator of VIP gaming rooms in Macau, posted an 8 percent increase year-on year for the rolling chip turnover during the first nine months of the year, totalling US$ 13.74 billion in the first nine months, compared to the total turnover of US$12.68 billion during the same period in 2013. The group has five VIP gaming rooms in the city, located in StarWorld Hotel, Galaxy Macau, Sands Cotai Central, City of Dreams and Le Royal Arc Casino, respectively. Such VIP rooms primarily cater to high stakes baccarat, which accounts for around 88 percent of total Macau casino winnings.
Reuters
K.L.
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October 9, 2014
Greater China Cross-Strait ties mutually beneficial Positive developments in cross-Straits relations have led more international firms to invest in Taiwan in hopes of tapping into mainland and Asian markets, Taiwan leader Ma Ying-jeou said during a business forum yesterday. Closer cross-Strait ties, together with Taiwan’s favourable geographical condition, innovative market, human resources and industry clusters, are the key factors attracting international investment, Ma said at the 2014 Taiwan Business Alliance Conference in Taipei. Investment from overseas surged 29.4 percent from US$3.812 billion in 2010 to US$4.933 billion in 2013, Ma cited data from the island’s economic authority.
Toyota says auto sales up Toyota Motor Corp and its two Chinese joint ventures sold about 91,100 vehicles in China in September, up 26.1 percent from a year earlier, the Japanese automaker said yesterday. That followed an 8.9 percent year-on-year rise in August and a 1.1 percent fall in July. In the first nine months of the year, Japan’s biggest automaker by sales volume sold about 710,300 vehicles in China, up 11.5 percent from a year earlier. Toyota this year aims to sell more than 1.1 million vehicles in China.
Futures market booms The futures market is expanding in the country with more transactions and trades, according to data released by the China Futures Association (CFA). The combined turnover in China’s four futures exchanges reached 24.5 trillion yuan (about US$4 trillion) in September, up 17.7 percent from the same period last year, said the CFA. The turnover in September was 14.8 percent higher than that in August, according to the CFA data. China Financial Futures Exchange is the biggest marketplace by turnover, followed by Shanghai Futures Exchange, Dalian Commodity Exchange and Zhengzhou Commodity Exchange.
Golden Week retail sales growth slows Growth in China’s retail sales during the long “Golden Week” holiday slowed to 12.1 percent from a 13.6 percent rise in the same period last year, data from the Ministry of Commerce showed yesterday. China’s retailers and catering firms chalked up sales of 975 billion yuan (US$158.94 billion) during the week-long National Day holiday, according to the ministry. The holiday, when millions of people take time out to travel and spend more than usual, also brings huge discounts and promotions as retailers battle for market share.
China shares end up China’s main share index hit a 20-month high in intraday trade yesterday, underpinned by strength in property developers after the central bank rolled out policies to boost the struggling sector. The Shanghai Composite Index unofficially finished up 0.8 percent at 2,382.15 points, after hitting its highest level since February 2013 as the market resumed trade following the National Day holiday. The CSI300 of the leading Shanghai and Shenzhen A-share listings gained 1.1 percent. The property sub-index of the CSI300 jumped 2.1 percent, with Hua Yuan Property surging by its 10 percent daily limit.
Services sector growth wavers The ministry’s survey showed brisk sales of clothing, shoes, jewellery, digital home appliances and cars
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rowth in China’s services sector weakened slightly in September as new business cooled, a private survey showed yesterday, reinforcing signs of a slowdown in the world’s secondlargest economy that could prompt more stimulus measures. The services purchasing managers’ index (PMI) compiled by HSBC/ Markit pulled back to 53.5 in September from a 17-month high of 54.1 in August. A reading above 50 in PMI surveys indicates an expansion in activity while one below that threshold points to a contraction. A sub-index measuring new business fell to 53.2 in September
The upcoming September data release will likely show a tentative improvement in real economic activity Tao Wang, USB, economist
from a 19-month high of 53.9 in August, but sub-indexes measuring employment and outstanding business both inched up, painting a mixed picture. “Overall, the services sector held up in September, despite the downward pressure seen in the manufacturing sector. We think risks to growth in the near term are
still on the downside, and warrant accommodative monetary as well as fiscal policies,” said Qu Hongbin, chief China economist at HSBC. An official survey released last week showed that the services sector grew at its slowest pace in eight months in September after new orders shrank for the first time since the 2008 global financial crisis, exposing
Premier Li starts visit to Germany Li is also scheduled to attend the Hamburg Summit, the largest Chinese-European business meeting that takes place every other year in Hamburg
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hina and Germany will map out bilateral collaboration for the medium and long terms during Premier Li Keqiang’s upcoming visit, says Beijing’s top envoy here. Li’s visit, due to start today, Thursday, is his second to Germany since he took office in March 2013. In Berlin, the premier will co-chair the China-Germany governmental consultation with Chancellor Angela Merkel. The two heads of government are scheduled to spend “seven or eight hours together” on various events, Chinese Ambassador to Germany Shi Mingde told Xinhua in a recent interview. Nearly 30 ministerial-level officials are expected to attend the consultation, during which “a new roadmap for China-Germany relations will be drawn,” according to the senior diplomat. Shi added that the two sides will hammer out a guideline defining new prospects, fields and measures of bilateral cooperation for the medium and long terms. The guideline, he said, will cover “almost all the areas,” including economy, technology and environment protection, and will contain over 100 pieces of concrete measures. China-Germany relations have enjoyed comprehensive and intensive development in recent years, said the
We are making great efforts to transform our economic structure, change our development mode, and address environmental pollution German Chancellor Angela Merkel (C) speaks with the public on the Day of German Unity last week. Merkel is facing a harsh batch of economic results
ambassador, noting that bilateral transactions account for one third of the total China-EU trade volume. From January to August this year, bilateral trade amounted to US$117.3 billion, up 12 percent year on year. Chinese investment in Germany is growing fast, bringing in fresh funds and creating new jobs. Meanwhile, bilateral cooperation has shifted from low- and mid-end manufacturing sectors to space technology, e-mobility, finance, energy saving, environment protection, education and other high quality industries. “The two countries are important markets for each other. Our enhanced
Shi Mingde, Chinese Ambassador to Germany
cooperation is meaningful to our economic growth,” said Shi, adding that China and Germany have complementary advantages and can achieve win-win results in various sectors. The main areas of China-Germany future innovative cooperation will include “industry 4.0,” a strategic hi-tech project of the German government, as well as urbanization, industrialization, informatization and agricultural modernization among many others. Xinhua
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October 9, 2014
Greater China
more weakness in the world’s secondlargest economy. The services sector made up 46.1 percent of gross domestic product in 2013, surpassing the secondary sector - manufacturing and construction for the first time, as the government aims to create more jobs and boost domestic consumption. In a bid to avert a deeper slide in
the housing market, China’s central bank and banking regulator relaxed lending rules for second-home buyers on September 30 by giving them a 30 percent discount on mortgage rates and cutting their down payment levels to 30 percent from 60-70 percent. “We think the easing lending condition is more impactful compared with unwinding of previous housing purchase restrictions. As such, we expect the systemic risk arising from property sector to be contained,” OCBC said in a research note yesterday. Other economists are not so sure. A glut of unsold and unoccupied homes and buyers’ expectations of further price declines could temper any rebound. The central bank said on Sunday it will use various monetary tools to maintain adequate liquidity and reasonable growth in credit and social financing. Analysts expect more policy measures will be needed to help achieve the government’s growth target of around 7.5 percent this year, although any dramatic stimulus looks unlikely as reform-minded top leaders have shown greater tolerance for slower growth. The government is due to release September data on trade, bank lending, investment and factory output in the coming week or so, leading up to third-quarter GDP on October 21 “The upcoming September data release will likely show a tentative improvement in real economic activity, but unlikely be strong enough to prevent full third-quarter growth from falling to 7.1 percent year on year, adding pressure on the government to further intensify policy support,” Tao Wang, China economist at USB, said in a note. Reuters
Chinese food fears hit Yum profits forecast Sales fell 14 percent in China in the quarter
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um! Brands Inc., owner of the KFC and Taco Bell fast-food chains, reduced its forecast for profit this year as another foodsupplier probe hurts sales in its China division. Earnings per share, excluding special items, will rise 6 percent to 10 percent this year, the U.S. company said in a statement. That’s down from a previous projection for growth of at least 20 percent. Yum, which has more than 6,400 restaurants in China, has been under pressure after a second food-safety scare drove customers away from its KFC and Pizza Hut chains there. The fast-food company also is struggling in the U.S., where Pizza Hut is trying to compete with peers offering steep discounts and new items. Third-quarter net income more than doubled to US$404 million, or 89 cents a share, from US$152 million, or 33 cents, a year earlier, the company said. Excluding some items, profit was 87 cents a share. Analysts projected 83 cents, the average of 16 estimates compiled by Bloomberg. Revenue fell 3.2 percent to US$3.35 billion, missing analysts’ US$3.37 billion average projection. The company in September reported a preliminary decline of about 13 percent after supplier OSI Group LLC was investigated for altering
It is difficult to confidently forecast the exact trajectory of China sales. Sales typically take six to nine months to recover from these types of events Yum statement
expiration dates on food. The company terminated its relationship with OSI after the probe and has said it will take legal action against the supplier and its subsidiary Shanghai Husi. In the U.S., Yum’s Taco Bell brand has been attracting customers with new protein-heavy fare and a menu of items priced at US$1. The Mexican-food chain introduced the Dollar Cravings line-up in August with fare including mini quesadillas and cinnamon twists. The company has more than 6,100 Taco Bell locations. Bloomberg News
Top hedge fund exceeds US$1 billion in assets Golden China Fund has returned an annualized 28.6 percent over the past 10 years through the end of August
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olden China Fund, the best-performing hedge fund investing in the nation over 10 years, exceeded US$1 billion in assets for the first time with bets on financial, real estate and technology stocks. The fund, managed by Greenwoods Asset Management Ltd. founder George Jiang, had US$1.1 billion in assets at the end of August, said Joseph Zeng, Hong Kong office head of the Shanghai-based company. The first time it crossed the US$1 billion mark on a month-end basis was in July, he added. Golden China Fund is bucking the trend among hedge funds investing in Chinese stocks that are heading for the worst performance in three years as a slowing economy is depressing stock-market returns. The fund has returned 14.5 percent net of fees through the end of August, according to a newsletter published last month. That compares with 2.7 percent for the Eurekahedge Greater China Long-Short Equities Hedge Fund Index. “What sets the fund apart is that it is reasonably diversified,” said Mohammad
Valuations of financial and realestate stocks are low at the moment as the market has been rather pessimistic on those sectors for a while. However, we have a contrarian view on these sectors and are long some stocks which we regard as highly undervalued Joseph Zeng, Greenwoods Asset Management, Hong Kong office head
Hong Kong Stock Exchange trading floor
Hassan, an analyst at Singapore-based data provider Eurekahedge Pte. “They avoid overexposure to a single sector and it seems they have a number of good names on their books.” Golden China Fund, which bets on rising and falling shares, has returned an annualized 28.6 percent over the past 10 years through the end of August, according to Eurekahedge. That’s the highest among all hedge funds investing in China with a 10-year track record, the data provider said. The fund invests in Hong
Kong-listed shares and American depositary receipts of Chinese companies, as well as yuan and foreign currencydenominated shares on China’s exchanges, according to Zeng. Among the fund’s biggest long positions at the end of August were financial stocks, real estate shares as well as stocks of technology, media and telecommunication companies, according to the newsletter. Hong Kong’s benchmark Hang Seng Index is little changed since the beginning of the year after climbing
about 26 percent in 2012 and 2013 combined. Financial stocks in the CSI 300 Index are currently trading at 5.9 times their 12-month forecast earnings, a 33 percent discount to the fiveyear average multiple of 8.8, according to data compiled by Bloomberg. Greenwoods Asset Management managed US$3.6 billion as of end of August, Zeng said. Its second-biggest fund is the Greenwoods China Alpha fund, which had US$489 million at the end of August. Bloomberg News
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October 9, 2014
Asia
Philippines’ high core inflation
No difference in yen views
Analysts also noted risk of headline inflation breaching the top-end of
Japan’s top government spokesman said yesterday there is no difference in views between the government and the Bank of Japan over the weak yen. “There is no difference at all,” Chief Cabinet Secretary Yoshihide Suga told a news conference, clarifying remarks he made on Tuesday. He said his earlier remarks were to simply state that a weak yen has not boosted exports as the government had expected. Suga also said corporations are still watching the development of the global economy including a soft yen.
S.Korea store sales decline
Sales at top department and discount-store chains declined in September as consumers shut their wallets after splurging for the Chuseok holidays in August, government estimates showed yesterday. Combined sales last month at department stores run by Hyundai Department Store, Lotte Shopping (pictured) and Shinsegae Co fell by 5.5 percent in September on an annual basis, the finance ministry estimated in a report. September’s fall was the steepest since a 8.2 percent decline in January 2013 and paled next to the 10.5 percent sales rise for August, the best performance since late 2011.
Japan current account surplus rises Japan’s current account surplus grew in August, Ministry of Finance data showed yesterday, as income from investments overseas bolstered the balance of payments. The surplus stood at 287.1 billion yen (US$2.7 billion), against a median forecast for a 198.0 billion yen surplus in a Reuters poll of economists. The surplus in August was up 82.7 percent from the same period a year earlier. The surplus in the income balance was 1.5 trillion yen, up 20.6 percent from a year earlier.
1MDB’s Project 3B to rely on Islamic bonds Malaysia sovereign fund 1Malaysia Development Bhd (1MDB) will raise 8.4 billion ringgit (US$2.56 billion) with Islamic bonds to build a power plant, IFR reported yesterday. 1MDB, which is chaired by Prime Minister Najib Razak, is partners with Mitsui & Co Ltd on the 2,000 megawatt coal-fired plant, known as Project 3B. The consortium will rely on Islamic bonds to cover most of the 11 billion ringgit needed for the project, after plans to raise 8.4 billion ringgit via a debt programme led by Japan Bank for International Cooperation fell through, IFR said.
Karen Lema
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he Philippines’ core inflation held at 17-month highs, data showed yesterday, suggesting that the central bank will maintain its hawkish policy bias, and perhaps raise rates again before year-end to quell price pressures. Bangko Sentral ng Pilipinas Governor Amando Tetangco said policymakers remain vigilant of inflation risks and will adjust interest rates if required. “The BSP (central bank) will make adjustments to policy levers as conditions warrant,” Tetangco said in a mobile text message to reporters. The governor’s comments came after the Philippine Statistics Authority said yesterday that headline consumer price inflation eased to 4.4 percent in September - the lowest in five months - driven by declines in food and fuel costs. Economists in a Reuters poll had expected a 4.5 percent rise. But core inflation, which takes out volatile items in the consumer basket and measures the underlying trend in prices, was unchanged at a 17-month peak of 3.4 percent. “The increase in core inflation is worrisome and suggests second round
Central bank of Philippines
effects are becoming apparent sooner and may be stronger than anticipated. Further interest rate tightening will be required,” said Eugenia Victorino, economist at ANZ, in a research note. Victorino retained her forecast that the central bank will hike both the main policy rate and SDA rate by 25 basis points this month to stay on top of inflation.
Rahul Bajoria, economist at Barclays in Singapore, said that policymakers will probably pause their tightening cycle until early next year. “We believe further rate hikes will depend on the data, and with (September) inflation surprising on the downside, risks of another hike in October seem somewhat contained,”
State Bank of India targets corporate cash India’s state-run banks were losing market share in managing companies’ commercial payments to more “inventive” private-sector banks
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tate Bank of India, the country’s largest lender by assets, will focus on expanding its cashmanagement business to help shelter the company from the slowest loan growth in the nation since 2001. Expanding the business, which handles cash and payments for corporate clients, will strengthen the lender’s income streams, Pradeep Kumar, a managing director who heads State Bank of India’s corporate banking, said in a September 30 interview. Cash management will help increase the visibility of borrowers’ cash flows, improving oversight of the bank’s asset quality, he said. Bolstering its cash-management division may help SBI improve profitability and lower the highest bad-loan ratio among the country’s five largest lenders by assets. India is poised to rank among the world’s top 10 trading centres for goods and services by 2020, increasing the scope for payment services, according to Boston Consulting Group Inc. SBI’s US$400 billion of assets,
At many places, we are the major lender but the cash- management process is done by a private-sector lender. We are focusing there Pradeep Kumar, State Bank of India’s corporate banking managing director head
which is more than India’s next four largest banks combined, will support the company’s ambitions to grow in a business dominated by HDFC
Bank Ltd., said Vishal Narnolia, a Mumbai-based banking analyst at SMC Global Securities Ltd. In cash management, a bank collects and disburses cash, and manages surplus funds to support a corporate customer’s day-today operations. Fees on processing transactions and interest income on holding client’s cash could help Mumbai-based SBI improve revenues, Narnolia said. Gross cash management volumes at HDFC Bank amounted to 34 trillion rupees (US$554 billion) in the year ended March 31, a presentation on the company’s website shows. SBI doesn’t disclose its volumes in its investor presentations, while Kumar declined to comment. In coming years, government banks are expected to show a compound annual growth rate of 15 percent in payment-related revenues compared with 25 percent for private-sector institutions, Boston Consulting said in a September 2013 report. Bloomberg News
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October 9, 2014
Asia
anticipates rate hikes S.Korea to shield exporters the central bank’s 2-4 percent target for 2015
from falling yen
It said the government will provide affected companies one-on-one consulting on business difficulties
KEY POINTS Sept headline CPI slows slightly more than expected Core holds steady at 17-month high C.bank says to maintain tightening bias on policy
Bajoria said. The central bank has two more meetings left for 2014, one on October 23 and the other on December 11. It tightened policy for a fifth time in a row on Sept. 11 by raising both the overnight borrowing rate and the rate on its short-term special deposit accounts (SDAs) by 25 basis points each.
Policymakers have said the economy was strong enough to absorb the impact of higher borrowing costs. Growth in the June quarter was 6.4 percent, the fastest in Asia after China and on par with Malaysia, driven by strong consumer spending, manufacturing and exports. The central bank expects average 2014 inflation of 4.5 percent against 4.3 percent previously, and 3.8 percent in 2015 versus a previous forecast of 3.7 percent. It has a 3-5 percent inflation target this year. Reuters
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outh Korea announced several measures to aid local exporters hit by a falling yen, as it expressed concern that prolonged weakness of the Japanese currency could do long-term damage to the Korean economy. The government will work to cut the costs of insurance on exchange-rate volatility for the roughly 4,000 smallto-medium sized companies directly affected by fluctuations in the yen, the Ministry of Strategy and Finance said in a statement yesterday. It said the government will provide affected companies one-on-one consulting on business difficulties stemming from the weakened yen and provide concessional loans. Roughly 1 trillion won (US$937.7 million) will be allocated for such loans and financial aid for firms, but no details were given on the terms for extending them. In recent years, South Korean exports have fared well, with the country maintaining a 3.1 percent share in the global export market from 2011 through the first quarter of 2014, according to government data.
But the situation could change if the yen keeps steadily weakening and Japanese exporters change their sales tactics. It added that although sentiment has recovered in some sectors, the economic recovery in Asia’s fourthlargest economy is progressing “at a very slow pace with momentum weak”. The yen has fallen more than 20 percent against the won since the end of 2012 when “Abenomics” resulted in a fall in the value of the Japanese currency. The measures, which are neither massive or new, were announced a week before the Bank of Korea next reviews its monetary policy. They are expected to add to pressure on the central bank to lower rates again on October 15. In August, the central bank cut its monetary policy rate by 25 basis points to 2.25 percent in a move widely seen as influenced by the government. Finance Minister Choi Kyung-hwan has repeatedly stressed the importance of harmony in policy between the government and central bank. Reuters
Australia to revise jobs data, likely cut August surge The September jobs figures are due at 0030 GMT on Thursday Wayne Cole
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ustralia’s official statistician is making changes to employment figures for the past three months that, on the face of it, would show far fewer jobs created in August than first reported. The Australian Bureau of Statistics (ABS) yesterday said it would restate employment figures to account for an absence of seasonal patterns usually seen in July, August and September. The jobs numbers are closely tracked in financial markets and billions of dollars change hands depending on whether the results beat or miss forecasts. The September data are due on Thursday and analysts had been expecting a sizable fall of 30,000 in seasonally adjusted employment as statistical payback for a record 121,000 increase in August. The August figure had been so far above expectations that analysts had doubted its credibility. The ABS said that while compiling the September data it found that the normal seasonal pattern evident from July to September was not apparent, so it had decided to report the raw numbers instead.
KEY POINTS August employment jump likely to be revised down Statistician cites absence of normal seasonal patterns Problems to lessen importance of data to markets in near term
“This means the seasonally adjusted estimates for these months will be the same as the original series and this will result in revisions to the previously published July and August seasonally adjusted estimates,” the ABS said in a statement released on its website. The original series showed employment rose by 32,100 in August, rather than by 121,000. For July, original employment fell by 11,900 while the adjusted
number dipped 4,100. “The ABS will commission a review with independent external input to develop an appropriate method for seasonally adjusting October 2014 and following months’ estimates,” said acting Australian Statistician Jonathan Palmer. “The report on the results of this review will be presented in due course.” The net result was that job creation should now appear far more subdued
than first reported, said SuLin Ong, a senior economist at RBC Capital Markets. “It looks like monthly jobs growth of around 10,000, which fits in much better with other indicators showing an economy muddling along,” she said. “It also means markets should discount pretty much whatever the ABS reports for September and there shouldn’t be much reaction.” The changes should also
see major revisions to the unemployment rate. The seasonally adjusted series showed the jobless rate spiked to 6.4 percent in July, from 6.1 percent in June, only to drop back to 6.1 percent in August. Yet the original numbers put the jobless rate at 6.0 percent for both July and August. “The jump to 6.4 percent in August always looked a bit much,” noted Ong. Reuters
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October 9, 2014
International Russia spends US$420 mln to defend rouble Russia’s central bank said yesterday it had spent 16.8 billion roubles’ (US$420 million) worth of forex interventions to defend the rouble on October 6. The central bank releases its data on interventions with a two-day lag. The rouble has been sliding on falling oil prices and broad risk aversion towards Russia because of its role in the Ukraine crisis.
U.S. prepares charges against banks, traders in FX Case Justice Department officials have vowed to hold more institutions and individuals accountable for criminal conduct Tom Schoenberg, Greg Farrell and David McLaughlin
Banks to change rules governing derivatives market The world’s biggest banks have agreed to change rules that govern the US$700 trillion derivatives market, the Financial Times reported. Eighteen banks, ranging from Credit Suisse Group AG to Goldman Sachs Group Inc., have agreed to give up the right to “close out” deals on derivatives contracts if a financial institution runs into trouble, the newspaper said, citing people familiar with the matter. The International Swaps and Derivatives Association (ISDA), the body leading the negotiations with regulators on behalf of the industry, said last month that a contractual solution for a temporary stay on derivatives “close outs” was progressing well.
WIF to address sustainable development The World Investment Forum 2014 scheduled to be held here next week will be a platform to tap into the policy frameworks and conditions for investment to address sustainable development challenges, said the United Nations Conference on Trade and Development (UNCTAD) yesterday. A high-level gathering held every two years, the UNCTAD’s World Investment Forum is designed to facilitate dialogue and action on the world’s key and emerging investment-related challenges, and this year’s theme was investing in sustainable development. Over 2,000 private and public sector representatives from the developing and developed world would participate into the forum.
World Bank supports investment in Africa Significant public investments in agricultural production, infrastructure and expanding retail services, finance and telecommunications is expected to stimulate economic growth in Africa, the World Bank said on Tuesday. The World Bank said in its latest report on the continent that this improved growth is expected to occur in a context of lower commodity prices and lower foreign direct investment as a result of subdued global economic conditions. Despite weaker than expected global growth, the report said the continent’s economies continue to expand at a moderately rapid pace.
Rich shoppers to boost U.S. holidays Wealthier U.S. shoppers are likely to drive the most bountiful holiday season in three years as retailers slash prices to cope with tighter budgets as a new survey showed 2014 retail sales rising 4.1 percent. The National Retail Federation predicted retail sales would climb to US$616.9 billion, outpacing last year’s 3.1 percent growth. Sales rose more than 5 percent in 2010 and 2011, and 3.5 percent in 2012, and growth averaged 2.9 percent over the past decade, NRF said. The group’s forecast is one of the closely watched benchmarks ahead of the holiday season.
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.S. prosecutors are pressing to bring charges against a bank for currency-rate rigging by the end of the year, and actions against individuals will probably follow in 2015, according to people familiar with the probe. The Justice Department may seek guilty pleas from several firms, including at least one in the U.S., said one of the people, asking not to be named because details of the investigation aren’t public. While federal prosecutors have wrested convictions from foreign banks this year for wrongdoing, they’ve yet to win a guilty plea from a U.S. lender in that push, and they’re preparing for strong resistance if they attempt to do so. Justice Department officials have vowed to hold more institutions and individuals accountable for criminal conduct amid public frustration over the lack of prosecutions against top Wall Street executives for the worst financial crisis since the Great Depression. Starting currency-rigging prosecutions this year would help the Justice Department keep pace with regulators. The U.K. Financial Conduct Authority, the U.S. Federal Reserve, and the Office of the Comptroller of the Currency are already in settlement talks with several banks with a goal of reaching agreements next month, people familiar with the cases have said.
U.K. charges The U.S. criminal investigation has moved quicker than U.K. prosecutors. The Serious Fraud Office opened an investigation in July and will announce any charges next year at the earliest, according to David Green, the London agency’s director. Attorney General Eric Holder, in his final speech about financial crime before announcing plans last month to step down, said the currency probe was advancing quickly thanks to undercover co-operators and would probably result in charges against bankers in the coming months. Investigators are looking into allegations that traders shared data about orders with people at other firms using instant-message groups with names such as “The Cartel” and “The Bandits’ Club.”
Certain employees, acting on their own initiative, engaged in conduct that falls short of the bank’s standards, and action has been taken accordingly Renee Calabro, Deutsche Bank spokeswoman
One focus is whether dealers sought to move the WM/Reuters benchmark rate in their favour by pushing through trades before and during the 60-second windows when the benchmark is set at 4 p.m. in London each day, a process known in the industry as “banging the close.” About a dozen banks are under investigation in the probe. More than 25 traders have been fired, suspended or put on leave since the allegations emerged last year.
UBS immunity UBS AG, Switzerland’s largest bank, has won immunity from the Justice Department’s antitrust division in exchange for evidence of misconduct, one of the people said. That doesn’t protect the Zurichbased lender from scrutiny from the department’s fraud section, the person said. The bank was also the first to approach the European Commission in its antitrust inquiry in a bid for leniency there. UBS received the same immunity from Europe in a separate investigation into the rigging of interest rates in 2011. In that probe, which is continuing, prosecutors are seeking to conclude their case against Deutsche Bank AG. They have yet to decide whether to
seek a guilty plea against a unit of the bank, according to two people familiar with the investigation. Prosecutors examining whether Frankfurt-based Deutsche Bank rigged the London interbank offered rate, known as Libor, have started coordinating with U.S. regulators to limit any impact on the firm’s business in the event they do pursue a guilty plea from the company or a subsidiary, one of the people said. Authorities haven’t made a final decision, according to the person. Peter Carr, a spokesman for the Justice Department, and Karina Byrne, a spokeswoman for UBS, declined to comment.
U.S. prosecutions Deutsche Bank “is cooperating in the various regulatory investigations and conducting its own on-going review into the interbank-offeredrates matters,” said Renee Calabro, a company spokeswoman. In that examination, the firm has found “that certain employees, acting on their own initiative, engaged in conduct that falls short of the bank’s standards, and action has been taken accordingly.” The developments in prosecuting banks in the currency and interestrate probes were reported on Tuesday by the New York Times. Earlier this year, the Justice Department secured guilty pleas -once viewed as a death penalty for a bank -- from Credit Suisse Group AG’s main bank subsidiary for helping Americans cheat on taxes, and from BNP Paribas SA for handling banned transactions involving Sudan, Iran and Cuba. The U.S. Libor probe has produced settlements with five banks including UBS, Barclays Plc. and the Royal Bank of Scotland Group Plc. and charges against at least nine individuals. The cooperation agreements with those banks gave the government a windfall of information for its currency manipulation investigation. Evidence produced as part of those agreements also is being used in a criminal probe of alleged manipulation of ISDAfix, a benchmark used to set rates for trillions of dollars of financial products, according to a person with knowledge of the matter. Bloomberg News
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October 9, 2014
Opinion
India coal imports wires aren’t a big enough boost Business
Leading reports from Asia’s best business newspapers
THE TIMES OF INDIA Boosted by the US$1.21 billion fund raising by online retail major Flipkart, private equity (PE) investments in Indian firms have more than doubled in January-September 2014. PE investments surged 109.1% year-on-year to US$4.58 billion during the period. Internet firms raked in most of the PE moolah during the year accounting for more than half of the funds raised. Excluding Flipkart, internet companies raised about US$815 million across 43 deals in the first two quarters of 2014. Software firms stood second mobilising around US$874 billion during the year.
Clyde Russell Reuters columnist
THE STAR Hard negotiations for the merger between CIMB Group Holdings Bhd, RHB Capital Bhd and Malaysia Building Society Bhd (MBSB) will only begin from today, when the exclusive period for the discussions between the banks end. An official close to the deal said the banks were expected to submit a proposal to Bank Negara, but it would have several conditions precedent (CPs) to the deal being finalised. “The submissions by the respective banks will ensure that the exclusivity for negotiations remains,” said the official.
THE PHNOM PENH POST The International Business Chamber of Cambodia’s (IBC) two-day investment conference came to a close with the minister of commerce, Sun Chanthol, urging a roomful of industry representatives to buy into the Kingdom’s economy. The two-day conference held panel discussions ranging from tax and monetary policy to banking, the labour force, energy and agriculture. Across the vast field of discussion, one universal message was that infrastructure and skills shortages are holding the Kingdom back. Yasuyuki Inoue, vice president of Minebea Cambodia, said staffing his 6,000-person electronic goods making factory was the biggest hurdle for his firm.
THE STRAITS TIMES A new framework to help SMEs to negotiate fairer tenancy agreements and an initiative to give SMEs more opportunities for Government procurement were announced yesterday to help local businesses weather the strain of economic restructuring. “Overall productivity has been positive but weak,” said Minister of State for Trade and Industry Teo Ser Luck also noted in a speech to more than 300 executives and entrepreneurs at the SME Convention held at Suntec Convention Centre yesterday. The new Fair Tenancy Consideration Framework spells out the general elements of a fair tenancy agreement, including transparency of fees and tenancy terms.
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ustralian coal miners desperate for good news got a double boost recently, but India’s cancelling of private mining blocks and Indonesia’s new export rules are a salve rather than a cure for the industry’s woes. An Indian court ruling scrapping the allocations of coal blocks to private operators will undoubtedly cut production and boost demand for imported fuel. And it’s also likely that new export permit rules being introduced by Indonesia will at least temporarily lower shipments from the world’s largest exporter of thermal coal for use in power plants. Also, it remains the case that many Indian power stations are critically short of coal, given the long-standing inability of state producer Coal India and the railways to mine and transport adequate supplies. All of this seems like manna from heaven for Australian coal miners, the majority of whom are unprofitable given the 25 percent decline this year in the benchmark Newcastle Port thermal coal price to US$64.91 a tonne last week, a fresh five-year low. But there are a few reasons to be sceptical as to whether this will be a significant boost for coal miners, or just a serendipitous lolly in a bowl of bile.
India shortage worsening India’s top court scrapped 214 coal blocks allocated by the former government, ruling its processes were arbitrary and illegal. The operating blocks among those, which were expected to produce an estimated 52
Certainly, the coal futures market hasn’t priced in rising prices further along the curve, suggesting that investors haven’t yet bought into the idea of a demand-led revival
million tonnes in the current fiscal year, will be returned to Coal India by the end of March 2015. However, it’s likely that output from them will start to tail off prior to the handover, and that it won’t be ramped up quickly by Coal India once it assumes control, given it will take time for the state behemoth to get to grips with the new assets. All up, the coal shortage in India is likely to grow substantially, and may exceed even the top end of the government’s estimate of between 185 million to 265 million tonnes by the 2016-17 fiscal year. India imported 168.4 million tonnes in the fiscal year ended
March 2014, and researchers OreTeam expect this to rise to 210 million in the year starting April 2015, while Fitch unit India Ratings & Research says imports may rise as far as 230 million. The OreTeam forecast is a reasonable import demand assumption, and there is little doubt that India could use all 210 million tonnes of imports, and possibly even as much as the India Ratings estimate. But the big question is whether the already strained port and rail infrastructure is ready to handle such an increase in volumes. The Indian experience is generally that capacity increases are realised, but seldom in the time frames initially envisaged. There are also problems in getting projects coordinated, with the risk that a port may be ready to receive more cargoes but the rail not yet able to transport it. India’s imports surged 19 percent to 16 million tonnes in September, according to data from trader mjunction. But even this jump in imports, if maintained, would result in annual imports of 192 million tonnes, which is higher than the 2013-14 outcome, but short of forecasts. It may be more realistic that imports could struggle to rise in the coming fiscal year above 200 million tonnes. That would still sound fairly good to coal miners, especially those outside Indonesia.
Indonesia rules a temporary salve New rules may cut Indonesian exports by between 15 and 20 percent in October from
September, according to the coal industry. The Southeast Asian nation shipped between 25 and 30 million tonnes in September, according to the Indonesian Coal Mining Association. Indonesian miners are worried that the regulations, aimed at ensuring compliance with laws and taxes, will drive some struggling companies to the wall. Notwithstanding the issues surrounding the new export permits, it’s likely this will be only a temporary situation, meaning that the scope for rival miners in Australia, South Africa and even Colombia will be limited. Coal from those suppliers is also more expensive to land in India than cargoes from Indonesia, meaning there may be some reluctance on the part of buyers to pay more that they are used to, even though prices are currently depressed. Certainly, the coal futures market hasn’t priced in rising prices further along the curve, suggesting that investors haven’t yet bought into the idea of a demand-led revival. Newcastle futures are in mild contango, but this has actually flattened slightly in the past month, and the same is true for Indonesian sub-bituminous futures. Lastly, slowing demand for coal imports from China may counteract any increase in demand from India. Even if the court decision in India and new rules in Indonesia do provide some relief to coal miners, the underlying problem of too much capacity chasing too little demand remains unresolved. Reuters
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October 9, 2014
Closing Vietnam to control traffic along border with China
Overseas travel grows during China’s “golden week”
Vietnamese Prime Minister Nguyen Tan Dung has approved a plan proposed by Vietnam’s Ministry of Transport (MoT) on establishing three traffic control offices in border gates with China, local media reported yesterday. According to Bao Giao Thong (Transport News), an online newspaper under the MoT, traffic control offices will be set up in three border gates - Lao Cai in northwestern Lao Cai province, Huu Nghi in northern Lang Son province and Mong Cai in eastern Quang Ninh province. The move is aimed at implementing a protocol on amending bilateral road transport agreement between both governments.
Chinese tourism and civil aviation authorities said yesterday that overseas travel grew among Chinese vacationers during last week’s National Day Holiday. The National Tourism Administration (NTA) said that travel to overseas destinations rose during the seven-day National Day Holiday that ended on October 7 as a result of visa-free or visa-on-arrival policies offered by a rising number of countries to Chinese citizens. Hong Kong, Macao, and Taiwan as well as Southeast Asia were the most popular destinations for Chinese tourists, while the Republic of Korea, Thailand and Japan were the countries receiving the most Chinese visitors.
London Stock Exchange’s CEO on RMB Alexander Justham will visit China this week and kick off the London Stock Exchange Group Beijing IPO Conference
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nternational investors are showing greater interest in Chinese capital market, despite a slower growth of its economy, said, chief executive officer (CEO) of the London Stock Exchange (LSE), in an interview with Xinhua. Chinese economic development has entered the so-called “new normal” and shown a slowdown in growth, but its fundamental story is “absolutely of interest”, as the global investment community is still interested in and focuses on assessing Chinese capital market, Justham said. The LSE CEO will visit China later this week and kick off the London Stock Exchange Group Beijing IPO Conference on October 9.
Right way and time Justham said, “China is the second largest economy in the world. The statistics show that the foreign ownership inside China’s stock is very low, so the global investment community is clearly underweight in China in terms of the scale of economy versus the scale of investment, I think that fact will drive investment for a very long time.” The investment from global investors will also detect the pace of opening up of capital market, the capital flows, like the licenses
In all these contexts, the nonChina investment community is trying to work its way out on how to find the right way and the right time to expose to China
London Stock Exchange and its coat of arms
and quotas of the RQFII (RMB Qualified Foreign Institutional Investors), said Justham. The Shanghai-Hong Kong Stock Connect, which offers the seamless inter-investment channel between the two stock markets, is another way of expanding access to the capital market of the Shanghai Stock Exchange, and the global investors are very interested to watch, as lots of them do have access in Hong Kong, said Justham. Regarding the pace of opening up the capital market, Justham commented that the opening up of China’s capital market needs to take time and to be “definitely managed,” as the wider
Singapore to require reporting cash sales
access to capital flows can have various impacts. “You always want to avoid the problems that come with that, and the Chinese authorities have their plan, and they are also on the course,” he said.
RMB business booming As of the end of September, 60 Chinese companies are now quoted on the LSE, with seven on the Main Market, and 53 on Alternative Investment Market (AIM), or start-ups sector. Regarding the Renminbi (RMB) investment vehicles, four RQFII Exchange Traded Funds (ETFs) and dozens of RMB bonds are now listed or
traded on the bourse. Though the number of China-A share linked RMB ETFs is tiny compared to the more than 1,000 ETFs now listed on the LSE, the bourse is bullish on its outlook. “The (RMB investment) products are new, but they are all going well, and are all successfully subscribed. We understand that people are looking forward to more ETFs here, or other instruments with exposure to China’s market, and we are of course looking to see more in the future,” said Justham. “I think fundamentally the investment community here in Europe and in London is interested in finding ways to buying into or expose into
Honda says China sales fall
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ingapore will implement a cash transaction reporting regime for precious stones and metals dealers with effect from October 15, requiring them to report any cash transaction exceeding 20,000 Singapore dollars (US$16,000), the Ministry of Home Affairs said yesterday. The Corruption, Drug Trafficking and Other Serious Crimes Act was amended in July to enable the reporting regime, which will “help to reduce the risk of money laundering and terrorism financing associated with transactions involving precious commodities,” it said. Under the new regime, the dealers will now have to file a cash transaction report within 15 business days when they conduct any cash transaction exceeding 20,000 Singapore dollars or its equivalent in foreign currency involving precious stones, metals or products. They are also required to determine the identity of the customer and enquire if the customer was acting on behalf of a third party and if so, determine the identity of the third party who owns the cash. Xinhua
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Alexander Justham, London Stock Exchange, CEO
China, and the RMB trading is skyrocketing, I think this is the fundamental change,” he added. In order to better facilitate the RMB trading in London, in the context of the ChinaBritain financial cooperation deepening, the LSEG signed the Memorandum of Understanding with the Bank of China, Agricultural Bank of China and China Construction Bank this year. Xinhua
Asian markets down after IMF forecast cuts
hina sales of Honda Motor Co Ltd and its two Chinese joint ventures fell for the third consecutive month in September as customers awaited the launch of new models later this year, the Japanese automaker said yesterday. Honda said it sold 56,880 autos in China in September, down 23.1 percent from a year earlier, with dealers clearing inventory ahead of the launch of two new models - the Vezel and the Spirior - in November and the XR-V afterwards. September’s drop was steeper than August’s 2.5 percent year-on-year fall and July’s 1.7 percent decline. In the first nine months of this year through the end of September, Honda sold a total of 502,352 vehicles, up 1.0 percent from a year earlier. Honda, which operates car ventures in China with Dongfeng Motor Group Co Ltd and Guangzhou Automobile Group Co Ltd, aims to sell 900,000 cars in the country this year, up 18.9 percent from a year earlier.
sian markets mostly slipped yesterday following a US and European sell-off that came in response to more weak German data and the IMF’s decision to cut its growth forecast for the global economy. The dollar clawed back some of the losses it suffered in New York but with caution taking over among traders it is struggling to return to the six-year highs above 110 yen it touched last week. Tokyo fell 1.19 percent, or 187.85 points, to finish at 15,595.98, while Seoul lost 0.39 percent, or 7.66 points, to 1,965.25 and Sydney eased 0.81 percent, or 42.9 points, to 5,241.3. Hong Kong broke a three-day winning streak to end 0.68 percent lower, giving up 159.19 points to 23,263.33. IMF warned that the world economy faced increased risks from the crisis in Ukraine, ongoing Middle East woes and the spread of Ebola. The damaged inflicted by the economic crisis that began in 2008 is “proving tougher to resolve”, especially in Europe, it added.
Reuters
AFP
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