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MOP 6.00 Year III
Number 753 Friday March 20, 2015
Publisher: Paulo A. Azevedo
Closing editor: Luís Gonçalves
Putting on the brakes
Macau to boost Inditex onli ne sales
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hree fatalities this month alone. Most recently yesterday, on the Hollywood Roosvelt Hotel construction site in Taipa. An abnormal number of deaths and injuries have occurred in recent months. From casino resorts to transport infrastructure, delays mean money and the pressure on companies and workers is at fever pitch. The Federation of Trade Unions points a finger at antiquated safety laws. Now 20 years on the statute books. Update the regulations, increase inspections, and impose harsher penalties, it demands PAGE
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Betting Crude control The Shanghai the house International Energy Exchange. It will on the be the first entity in China to allow foreign to trade in middle class investors oil futures. The gov’t Galaxy Entertainment closed 2014 with a 3 pct increase in profits. But the company sees warning signs. In Q4 2014 revenues dropped 15 pct. Anxiety is growing about what 2H 2015 will bring. “Challenging times,” says Lui Che Woo. Galaxy has hired a quarter of its workforce for the May 27 Phase II opening. And betting the house on the Chinese middle class
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Capacity report completed
The wage subsidy scheme. A provisional measure to compensate the city’s low-income groups. Now being extended for the eighth year. The gov’t is budgeting MOP37 million (US$4.6 million) for the scheme. Which may undergo adjustment next year given the implementation of the city’s first-ever minimum wage law. Expected at the beginning of the year, the Executive Council said yesterday
Quick work. Chief Executive Fernando Chui Sai On has announced the completion of the tourism capacity report. Conducted by Secretary for Security Wong Sio Chak and Secretary for Social Affairs and Culture Alexis Tam Chon Weng. The report will be submitted to the central government. With the Individual Visit Scheme (IVS) for Mainland tourists taking centre stage. The report also addresses crowd control and border crossings
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HSI - Movers March 19
Name
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initiated the move to influence the oil pricing system
%Day
Tencent Holdings Ltd
6.70
Link REIT/The
5.15
Wharf Holdings Ltd/T
4.43
Galaxy Entertainment
3.35
Sands China Ltd
3.31
Lenovo Group Ltd
0.00
New World Developm
-0.34
China Mengniu Dairy
-0.41
Hang Lung Properties
-0.93
China Merchants Hold
-2.02
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Wynn Macau announces 5 pct wage hike PAGE 4
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Bitcoin blues bite Chinese investors PAGE 6
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2 | Business Daily
March 20, 2015
Macau
Gov’t budgets MOP37 mil to extend wage subsidy scheme for 2015 While the minimum wage policy is still not in place, the government is extending the scheme for the eighth year that mainly benefits manufacturing and property management workers Stephanie Lai
sw.lai@macaubusinessdaily.com
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he wage subsidy scheme, a provisional measure meant to compensate the city’s low-income group while a minimum wage policy was still not in place, is being extended for the eighth year. The government is budgeting MOP37 million (US$4.6 million) for the scheme. The permanent local resident aged 40 or above who earns less than MOP15,000 in a quarter is eligible to apply for the wage subsidy scheme, which can grant a maximum of MOP5,000 – a subsidy amount that remains level with last year, Executive Council spokesperson Leong Heng Teng told a press briefing yesterday. The government has seen a reduced number of workers here applying for the scheme since its implementation in 2008, a year when an average 2,520 residents applied for the work subsidy each quarter, costng the government MOP31.47 million for the whole year. Last year, the government spent some MOP27.89 million on the wage subsidy scheme. Each quarter, an average of 1,435 workers applies for the scheme, of
Executive Council spokesperson Leong Heng Teng
whom 40 per cent come from the manufacturing sector and another 39 per cent from workers employed by property management companies; the rest are applicant workers employed by restaurants and the retail industry, Mr. Leong explained. “This proportion is basically very similar to the year 2013, when around 40
per cent of applicants were from the manufacturing sector and another 32 per cent were workers from property management companies,” Mr. Leong added.
Adjustment in 2016? The wage subsidy scheme may undergo adjustment next year as the government
is aiming to implement the city’s first-ever minimum wage law at the beginning of the year, although it only encompasses cleaning and security workers employed by property management companies, the Executive Council spokesperson told media. “When we have the minimum wage law in place, it will also be the time
that spells the finishing of the mission of this subsidy scheme,” said Mr. Leong. On Monday, Secretary for Economy and Finance Lionel Leong Vai Tac said that the government was aiming to implement a citywide minimum wage policy within three years following the enactment of the minimum wage for cleaning and security workers. The minimum wage bill that covers only cleaning and security workers – a bill still being deliberated upon by the Legislative Assembly - will undergo a final reading at the soonest in June this year, the Assembly’s president, Ho Iat Seng, told media earlier this week. The bill, which only comes into force in about six months after being approved, proposes an hourly rate of MOP30 or a monthly MOP6,240 for cleaning and security workers. That means that if the application criteria and the amount of grant of the wage subsidy scheme is to remain the same for next year cleaning and security workers will no longer be eligible to apply for it if the content of the bill remains unchanged.
Polytec Asset net profit rises nine-fold to HK$43.7 mln While the Hong Kong-listed property developer enjoys a stable income from its investment portfolio in Macau, its oil business in Kazakhstan has been hurt by plummeting international oil prices Stephanie Lai
sw.lai@macaubusinessdaily.com
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ong Kong-listed property developer Polytec Asset Holdings Ltd., which holds real estate business in Macau, saw its group-wide net profit increase more than nine-fold last year to HK43.7 million (US$564 million), the company told the stock exchange after trading hours on Wednesday. Polytec Asset’s turnover for 2014 rose by a year-on-year 3.6 per cent to HK$294.6 million, of which about 5.4 per cent, or HK$16 million, was generated by its property business. Some 53.5 per cent of the turnover registered is generated by the oil business, with the rest from the ice and cold storage business, according to the filing. The property developer has seen an 8.3 per cent increase in its gross
rental income to HK$54.2 million generated by its investment properties during the course of last year, a boost primarily due to more rents received by the company’s Macau properties. Rental income from the commercial complex located in the Nam Van district, Macau Square, rose 12 per cent to HK$50.6 million in 2014, the company noted in the filing. Polytec Asset owns 50 per cent interest in Macau Square. The disposal of some car parking spaces in Macau and Hong Kong also generated a combined income of HK$26.5 million for the company last year. While Macau has seen an economic slowdown since the third quarter of last year due to dwindling gaming revenue, leading to a ‘correction’ in
the property market here, Polytec Asset still believes that its property investments in Macau will continue to generate stable income for the group this year. Polytec Asset has a landbank of about 715,000 square metres of gross floor area located adjacent to the landing point of the Hong KongZhuhai-Macau Bridge in Areia Preta district, on the northern part of the Macau Peninsula. This landbank includes lotes ‘T’ and ‘T1’ in the Orient Pearl district in Areia Preta, which are of an aggregate site area of about 17,900 square metres. The project that Polytec Asset is building on the lots, of which the company owns 80 per cent interest, is a cluster of high-end residential blocks with retail
shops and car parking spaces. Polytec Asset also owns 80 per cent in another property development project in the Orient Pearl district, known as ‘Pearl Horizon’. The project, which occupies an aggregate site of about 68,000 square metres, is being developed into a group of high-end residential towers together with a ‘full-facility’ shopping arcade, a clubhouse and car parking spaces. The company previously gained over HK$20 billion from contracted presales of over 3,000 residential units of its two major luxury residential development projects in the Orient Pearl district over the past few years. The two projects are expected to be compled and handed over to homebuyers in 2017/2018, the filing noted.
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March 20, 2015
Macau Tourism capacity report completed
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hief Executive Fernando Chui Sai On has announced that the tourism capacity report, conducted by the Secretary for Security, Wong Sio Chak, and the Secretary for Social Affairs and Culture, Alexis Tam Chon Weng, has been completed and will be submitted to the central government with regard to improving the city’s Individual Visit Scheme (IVS) for Mainland tourists. Secretary Wong told local broadcaster TDM Radio yesterday that the capacity report covers studies on the measures applied for crowd control and border crossing in the past few years, especially during the
Chinese New Year. In addition, he said that the underlying concerns and risks for the measures were also evaluated. The CE, meanwhile, said that the central government would study how to adjust and improve the current IVS policy based on the report, aiming to reach a balance between the capacity and life quality of Macau residents. In fact, earlier this month, the deputy director of Hong Kong Macau Affairs Office of the State Council, Zhou Bo, said that proposals for improving the tourist visa scheme and Hong Kong’s multiple visit scheme will be released very soon.
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fter Customs launched a raid on an electronic devices shop and found 148 counterfeit goods, they detained two Macau residents for further investigation, authorities announced yesterday. The Customs said they had received a tip-off from a resident, saying that a power adapter of the Xiaomi brand that the resident had purchased earlier in a shop in the Central district was a suspected fake and requested the Customs to
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K.L.
Customs bust counterfeit mobile accessories suspects investigate and follow-up. After the Intellectual Property office of the Customs had launched the investigation and collected evidence, the officers took action, raiding the shop on Wednesday. Some 148 devices, notably mobile chargers, batteries and screens were confiscated and deemed counterfeit. The brands involved include Xiaomi, Apple and Samsung. Two suspects were taken away for further investigation. According to them, the goods were ordered from
AL sub-committee reach consensus on dismissal compensation
outside of Macau at prices ranging from 10 to 40 yuan but they were retailed at MOP30 to MOP170. If genuine the confiscated goods would have retailed at MOP20,000. The Customs said the suspects had broken the law related to the economy and industrial properties and that the case will be handed to the Public Prosecutor’s Office. The maximum sentence could reach five years in prison or 600 days of fine. The Customs also warned consumers that counterfeit electronic devices are subject to safety hazards such as shortcircuiting that could cause fire and appealed to the public to raise their awareness when purchasing such products and contact the authorities if anything suspicious was found.
egislators of the second standing committee of the Legislative Assembly have reached consensus on the bill amending the dismissal compensation of the Labour Relations Law, the chairman of the sub-committee, Chan Chak Mo, told reporters yesterday. The amendments, proposed by the government and which passed the first reading last year, suggested that the upper limits of compensation paid by employers to employees upon unreasonable dismissal be increased to MOP20,000 (US$2,500) from the current MOP14,000. Mr. Chan said that despite legislators of the sub-committee holding different opinions on the amount of upper limit for such compensation, they agreed to accept the current amount proposed by the government and review the amount two years after, as the bill regulates. According to Mr. Chan, the submission of the sub-committee for the bill was signed yesterday, meaning that the bill will be sent for its final reading in a plenary session of the AL. K.L.
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March 20, 2015
Macau Wynn Macau announces wages hike Gaming operator Wynn Macau yesterday announced a 5 per cent salary rise to all its workers whose monthly wage was MOP65,000 (US$8,125) or less, according to an internal memorandum of the corporation. “I am pleased to advise that Mr. Wynn has approved a 5 per cent salary increase… This cost-of-living adjustment will take effect from March 1 2015,” the president of Wynn Macau Ian Michael Coughlan said in the notice. Of the six major gaming corporations in Macau, only Galaxy Entertainment Group has not announced a salary hike for workers.
Galaxy profits up 3 pct in 2014 amid growing anxiety this year In spite of a 15 per cent decrease in revenues during the fourth quarter, Galaxy managed to increase profits. Francis Lui expects the new resorts opening in May to stimulate the market but he says that everybody is anxious about the second half of the year João Santos Filipe
jsfilipe@macaubusinessdaily.com
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alaxy Entertainment Group profits increased 3 per cent year-on-year from HK$10.1 billion to HK$10.3 billion, the company announced yesterday during the presentation of the annual results for fiscal year 2014. Concerning the results of the fourth quarter of 2014 alone, however, Galaxy registered a decrease of 15 per cent year-on-year on revenues from HK$18.9 billion in the fourth quarter of 2013 to HK$16 billion in the fourth quarter of last year. The results of the group were affected by the shrinking revenues of the gaming industry in Macau, which has been driven by such factors as the anticorruption crackdown by the central government and the economic slowdown in Mainland China. However, Galaxy still managed to increase profits by 3 per cent, while the overall revenue of the gaming industry dipped 2.6 per cent. “We are living in challenging times. I believe everybody feels anxious about the second half of the year”, the Deputy Chairman of Galaxy Entertainment Group, Francis Lui Yiu Tung, said yesterday during the presentation of the annual results of the company that took place in Hong Kong. Notwithstanding, 2014 it was, in
the words of Chief Financial Officer of the group Robert Drake, “a tale of two stories” with overall mass market segment revenues increasing 12 per cent year-on-year to HK$18.8 million and VIP revenue climbing 8 per cent year-on-year to HK$50.4 billion.
“We have already recruited 2,500 workers” “We estimated that we will need around 8,000 employees for the Phase II of Galaxy Macau and Broadway at Galaxy Macau. We have already recruited 2,500 workers and we are happy to be much closer to our goal”, Francis Lui revealed yesterday in relation to the staff for the new openings. The deputy Chairman also said that the gaming operator applied officially on Wednesday to receive extra gaming tables for the extension of Galaxy Macau and for the new resort Broadway at Galaxy Macau. However, Francis Lui did not reveal the number of gaming tables requested. “We want as many gaming tables as possible. But we understand that given the new macroeconomic environment we cannot expect the growth of tables to be unlimited. We expect the government to be pragmatic but we hope that we can get a reasonable number”, he said. In relation to the opening of the new projects, scheduled for 27 May, it was explained that both are on track in relation to the time and schedule. It was also announced that the three hotels of the new resorts – The Ritz-Carlton Macau, JW Marriot Macau and Broadway Hotel – started to receive reservations on Monday. With regard to Phase III and IV of Galaxy Macau, which will double the footprint of the first two phases of the resort, site investigation works are due to begin this year. As for the Hengqin project, the company is still developing conceptual plans for the 2.7 km sq land parcel that will be used to build a resort.
Electronic gaming revenues increased 3 per cent to HK$1.8 billion. In spite of the cautious approach to the outlook of the industry, Galaxy is opening Phase II of Galaxy Macau and the Broadway at Galaxy Macau on 27 May - openings which are expected to be a turning point. “We are optimistic that the new facilities will make revenue grow. They will stimulate our revenues and the market again. We have made a massive investment and we are not changing our policies because of this economic cycle change”, he explained. As the extension of Galaxy Macau
and the Broadway at Galaxy will be more oriented to the mass market, Francis Lui explained his positive vision about the future of the industry based on the emerging Chinese middle class. “Previously, it was estimated that in 2020 the Chinese middle class would be 400 million people. Now, predictions are that the Chinese middle class will be around 700 million people in 2020. We are very confident because we have a very secure client base”, he said. During the presentation the group also announced a special dividend of HK$0.28 per share reflecting “management confidence”.
Lui Che Woo: “It is normal for the industry to have a slowdown” “Everybody sees and understands where the problem is. There are ups and downs in the market, and after many years going up it is normal for the industry to have a slowdown”, Lui Che Woo, chairman and founder of Galaxy Entertainment Group, said about the Macau gaming industry. “This slowdown is also the result of the policies that have been adopted”. The Chairman of the group also stressed the beginning of a new era in terms of the leisure industry of Macau. “Our investment is trying to provide a full range of choices for the people going to Macau. In the past, resorts would only focus on the gaming aspect but now the resorts will be more a destination for holidays that is not only for gaming. We are moving into a new era”, he said.
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March 20, 2015
Macau CE to deliver 2015 Policy Address on Monday Chief Executive Chui Sai On will deliver the 2015 Policy Address on Monday in the Legislative Assembly and answer legislators’ questions the following day, the government announced yesterday. Following the Chief Executive, the Secretaries and bureau heads will also present their work plans and answer questions from legislators starting next Thursday. The discussion for Administration and Justice will take place on 26,27 March; Economy and Finance on 30,31 March; Security on 9, 10 April; Social and Cultural Affairs on 13,14 April; Transport and Public Works on 16, 17 April. All sessions will be broadcast live on TDM and government websites. The Policy Address brochures will also be handed out at various government departments and locations around Macau.
Labour union demands site safety construction law revision and greater penalties Joanne Kuai
joannekuai@macausbusinessdaily.com
doesn’t have its [desired] effect. The punishments should be harsher.” Industry insiders have attributed machinery handling issues, overwork and lack of stringent internal safety check-ups to the rising number of industrial accidents. Ella Lei says gaming operators rushing to finish their projects has definitely contributed to the lack of diligence, hence tougher inspections should be strictly implemented. “Many accidents happened due to lack of safety appliances and maintenance or check-ups on the machinery,” she said. “Inspections should be launched in a more frequent and strict manner. Once any safety hazard is found, an order to stop the work should be put into effect immediately.” Ella Lei added that the authorities should take more initiative in revealing site inspection results, especially violations and detailed reports on accidents, so that the public is more aware and the industries can stay more vigilant.
Neighbouring regions’ experience
Ella Lei Cheng I
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hree fatal industrial accidents have occurred in this month alone – sounding alarm bells for Macau’s construction site safety regime. While the city is busy developing casino-resort sites and other public infrastructure projects, the number of construction-related injuries and deaths are on the rise. The Federation of Trade Unions met with the Labour Affairs
Bureau yesterday afternoon. ViceChairwoman of the labour union and legislator Ella Lei Cheng I said they have suggested authorities revise the existing laws and regulations on construction site safety, which were made in 1991. “The law was made more than 20 years ago. It’s very outdated,” said Ella Lei. “The amount of fines on the violation against safety measures
The legislator also points out that today, in Macau, only one safety inspector is dispatched to every 100 construction workers on-site. But borrowing from the experience of the neighbouring SAR, there should be at least one safety inspector per every 20 construction workers and one safety director for every 100 workers. The government tends to agree to suggestions submitted by the labour
The Federation of Trade Unions says Macau’s current laws and regulations on construction site safety are outdated and suggests revisions. They also urge the Labour Affairs Bureau to enhance inspection and education
union. The Director of the Labour Affairs Bureau (DSAL), Wong Chi Hong, added that raising safety awareness of construction workers is one of their priorities. “The safety awareness of construction workers is crucial. It not only concerns them but those working with them and even the surrounding environment,” he said. “We plan to introduce the practice of Hong Kong and invite industrial accidents victims or their family members to tell their personal stories to workers or share their experience so that the workers have a better idea and pay more attention to safety issues.” In terms of accountability regarding industrial accidents, the DSAL head said that they have to investigate each case and that the current practice is to hold the direct employer of the victim responsible instead of other related parties (namely, main contractors, property owners or gaming operators). Both the labour union and the government agree that the fine should be higher but has reservations about introducing criminal responsibility even in cases of fatal accident. Ella Lei says that once the construction work is ordered suspended due to safety hazards or industrial accidents, property owners and contractors will face considerable financial losses. Both sides also indicate that prevention is more important and hopefully better safety measures can be carried out by contractors once new measures are implemented in order to improve construction site safety.
Fatal accident on Hollywood Roosevelt construction site A non-resident construction worker aged 40 passed away while receiving treatment after being injured on the site of Hollywood Roosevelt Hotel in Taipa yesterday afternoon
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ccording to Judiciary Police, the worker was transporting goods to the elevator on the fifth floor and didn’t notice the elevator wasn’t there. After falling in the elevator hole, another worker got panic and dropped the lift, the PJ said. The accident happened around 2:00 p.m. yesterday. This is the third fatal industrial accident in Macau this month. Legislator
Ella Lei Cheng I said property owners and contractors rushing to finish work are causing the rising number of industrial accidents in the SAR, with different sectors carrying on construction works together, causing greater safety risks. Labour Affairs Bureau Director (DSAL) Wong Chi Hong expressed his condolences. He said that the Bureau had sent inspectors to the site in the last
two weeks but that conditions in those places change constantly. Mr. Wong said that in terms of non-resident construction workers the Bureau is considering controlling the quotas of imported labour for construction sites in Macau. Workers from elsewhere with experience of working in Macau, or who had completed safety courses organised
by DSAL before would be prioritized. Regarding the other two fatal accidents on MGM and Galaxy Phase Two construction sites in Cotai, the Bureau head said that the investigation is still ongoing and that the Bureau would prepare a press conference soon to explain the details of the cases, such as cause and future prevention measures.
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March 20, 2015
Macau
Glittery MyCoin ends in arrests, Chinese investors burned Virtual currency has grabbed a little success in Macau with some ATM’s near pawnshops encouraging bitcoin companies to invest here. Now, the tide is turning
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n investment in bitcoin promising a 150 per cent yield. That’s what was being offered to more than 2,000 people last August in the grand ballroom of the Sheraton Macao Hotel, where they gathered to hear investor Jim Rogers, eat free meals and be entertained by singers, dancers and glittering beauty queens. It was too good to be true. Hong Kong police arrested six people in connection with an alleged scheme to defraud investors of at least HK$160 million (US$20.6 million). All still await formal charges. Police said that more than 90 people have complained after discovering they can’t contact the company that took their cash, Hong Kong-based Rich Might Investment Ltd. and its trading platform MyCoin. hk. Multiple attempts over five weeks to reach any company representatives by e-mail or phone were unsuccessful. Its storefront in Kowloon closed in January. MyCoin attracted an estimated 3,000 people from Hong Kong and across the China border in Shenzhen, and similar MyCoin conventions or promotional dinners held elsewhere in China, Thailand, South Korea, the Philippines and Taiwan may have drawn hundreds more, according to interviews with eight investors and posts by more than 100 Mainland Chinese on a WeChat group, similar to WhatsApp. Most of MyCoin’s investors live in China and haven’t contacted police, they said.
Huge outflows “People around the world are trying to get money out of the Chinese,” said Hu Xingdou, an economics professor at the School of Humanities and Social Sciences at Beijing Institute
of Technology. “Mainland Chinese are very vulnerable to these kinds of schemes.” About US$324 billion flowed out of China last year, in contrast to 2013’s net inflows of US$56 billion, as Chinese sought in part to flee a declining yuan and investment abroad, according to estimates by Wang Tao, chief China economist at UBS Group AG in Hong Kong. Money from China has driven up housing prices in Sydney, Vancouver and elsewhere. In Portugal, Chinese rushing to buy real estate have been burned by middlemen, some charging a quarter of the sale price as commission. Also this year, Chinese investors complained that they had lost a total US$1.2 billion when a Genevabased foreign-exchange investment firm said it was taken over by hackers that siphoned money from 20,000 people, China’s state broadcaster CCTV reported in February.
Circumventing controls More than 80 per cent of the world’s bitcoin transactions are now conducted in Chinese yuan, up from less than 10 per cent at the beginning of 2013, according to a report by Goldman Sachs Group Inc. Bitcoin is more widely accepted outside China than by Chinese merchants after the People’s Bank of China imposed restrictions last year. One possible explanation: bitcoin transactions may enable citizens to circumvent China’s US$50,000-a-year limit on moving money out of the country. Investors in MyCoin paid a minimum HK$400,000 and were promised HK$1 million a year later, as long as the bitcoins’ value remained
the same or appreciated, according to documents given to Bloomberg News by investors. According to Hong Kong’s Companies Registry, William Dennis Atwood, whose address was listed as in Marina del Rey, California, was the sole director of Rich Might Investment and resigned November 10, transferring 7,000 shares of Rich Might to a company called Fascinating Horizon Overseas Ltd. the same day. No value for the shares was given. Fascinating Horizon’s address is listed in the Registry as in the British Virgin Islands. That address is a branch of a Hong Kong-based corporate services company, SBC International, which helps individuals set up companies. An e-mail response from SBC said the firm could not provide any information about the case or how to reach Atwood or other representatives of Rich Might, MyCoin or Fascinating Horizon due to client confidentiality.
Massage parlour Additional attempts to contact Atwood were unsuccessful. U.S. phone directories don’t show Atwood as being listed at his California address or elsewhere in the Los Angeles area. Two calls and an e-mail sent to the rental office of the apartment building went unanswered. Wong Lok Yan was appointed as director of Rich Might Investment upon Atwood’s departure and resigned January 28, Registry documents show. Wong’s address listed in the Companies Registry is a massage parlour in the Wan Chai district. A woman who opened the door said there was no-one by that name. Hong Kong police would neither confirm nor
deny they were looking for Atwood or Wong, nor say whether they were among those arrested. The six people arrested in Hong Kong in connection with the case, who were not identified, have been released on police bail without yet being charged in court, according to a police spokeswoman, who didn’t give her name due to policy. They must report back to police in April, she said.
Around China MyCoin’s Chinese buyers live in Guangzhou, Xian, Shanxi and Hebei, as well as Shenzhen, the investors said. Shenzhen police didn’t respond to calls, an e-mail and a fax seeking information. A few Chinese investors said on WeChat that they had called their local police, while no collective action has been taken. “The Chinese investors don’t know what they could do to get their money back,” Beijing Institute of Technology’s Hu said. “They may think the police are not going to help, and they don’t want to pay lawyers because the case is uncertain.” Wendy Lin, a 55-year-old Shenzhen housewife, said she first heard about MyCoin from a friend. They travelled several times to Hong Kong, to a Chinese restaurant in Kowloon, for promotional campaigns for the virtual currency and also attended the confab in Macau, a one-hour ferry ride from Hong Kong. They filed a police complaint in Hong Kong. “My family is in total chaos now,” said Lin, who said she invested about 900,000 yuan (US$144,400) along with her daughter and younger sister. “They invited famous people to their
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March 20, 2015
Macau events. How would I have thought the whole thing was a scam?”
No knowledge Rogers confirmed that he accepted the MyCoin speaking engagement through an agent and said he had no knowledge of the alleged scam when he accepted. He has never invested in bitcoin or MyCoin, he said. “I was there to speak about investing in the world,” said Rogers, contacted by phone in Singapore. “I explained whenever anybody asked that I did not know much about bitcoin or MyCoin, but I was there to learn.” The MyCoin venture, started in early 2014, promoted itself through professionals such as insurance brokers, real estate agents and paralegals, said Nancy Lau, a representative of a group of 30 of the MyCoin investors in Hong Kong who have banded together to push to get their money back. “MyCoin has a very complicated structure,” she said. “We aren’t sure who exactly the masterminds are. The sales representatives said they were victims, too.”
Free trips People typically put in HK$400,000 for 90 bitcoins and were to have accumulated 0.64 bitcoins per day for 12 months, Lau said. Their gains were promised to multiply if they introduced more people. Investors were given free trips to MyCoin roadshows, said Jeff Peng, 30, who does importing and exporting in Taiwan. MyCoin provided him with accommodation in Thailand, Macau and the Philippines last year in the expectation that he would help recruiting efforts, he said. Mercedes-Benz cars were given to good performers at the events, and lucky draws awarded prizes such as Samsung tablets, said Peng. He invested almost NT$3 million (US$95,100) and hasn’t made a police complaint because he doesn’t believe it would get his money back. “I did suspect at some point last year that it could have been a scam but I didn’t realise it could be over in less than a year,” he said. “Now I don’t even know whether they hold any bitcoins for real.” Lin said she first grew suspicious of MyCoin in November when the firm said it was planning a backdoor listing in Hong Kong. Also known as a reverse takeover, it’s when a closely held company gains listing status by taking control of a publicly listed entity.
‘Oh, no’ “I was like, ‘Oh no, this must be bad,’” Lin said, noting that she had heard of fraudsters using this tactic to convince investors to leave their money parked as equity in the future listing and declining to return it. Starting in December, a few weeks after Atwood’s resignation, MyCoin started changing bitcoin’s valuations rather than follow the market value, according to Lau. Prices quoted by MyCoin dropped to HK$20 in January, when the market price was HK$1,700, she said. MyCoin investors were prohibited from redeeming their bitcoins, even when they accepted the lower price, she said. The value of the virtual currency plunged 58 per cent last year after reaching a record US$1,100 in 2013. It’s currently valued at US$281. Investors such as Lin just want to get their money back. “They paid for almost everything, and they said they are registered in Hong Kong,” said Lin. “So I trusted them.” Bloomberg
Macau and HK to boost Inditex worldwide online sales growth The owner of Zara plans to launch online sales in Hong Kong, Macau and Taiwan driving its online strategy to put the company ahead of competitors like H&M and Primark
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nditex SA, the world’s largest clothing retailer, has reported accelerating revenue growth after an expansion of online sales and store openings helped drive a 5 per cent profit increase last year. Fourth-quarter sales at the Zara owner rose at the fastest pace in more than two years, according to Bloomberg Intelligence data. Growth continued into the new financial year, with revenue in the six weeks through March 14 up 13 per cent excluding currency fluctuations, Inditex said Wednesday. “This was a positive set of results, namely because of the strong sales momentum,” Filipe Rosa, an analyst at BESI Research, said in a note. Rosa has a neutral recommendation on the stock, which rose as much as 3.1 per cent in Madrid. By entering new markets and extending its reach of online sales, Inditex is keeping ahead of competitors including Hennes & Mauritz AB and Associated British Foods Plc’s Primark. The falling euro has also helped, as much of the retailer’s garment costs are in
that currency. The sales increase in the first six weeks of the new financial year implies like-for-like store sales growth of 6 per cent, according to Anne Critchlow, an analyst at Societe Generale SA, better than the 5 per cent increase last year. After boosting its number of stores by about 5 per cent to 6,683 through January, Inditex said it plans to open as many as 480 outlets this year, including three in New York. It also plans to launch online sales in Hong Kong, Macau and Taiwan.
Euro weakness In January, the company acquired a 4,400 square metre building in New York’s SoHo neighbourhood, continuing a strategy of building large stores in the top shopping areas in some of the world’s biggest cities, such as Milan, where the retailer operates in the Corso Vittorio Emanuele shopping district. Inditex generates more than onethird of its revenue from stores outside of Europe. The euro weakened 17 per cent against the dollar in the
company’s latest fiscal year. A weaker euro boosts Inditex’s profitability because the retailer sources 65 per cent of its garments from Europe and surrounding areas, according to Sanford C. Bernstein. The stock is a “way to play euro weakness,” Jamie Merriman, a Bernstein analyst, wrote before the results were released. “This is particularly attractive when most apparel retailers have net U.S. dollar cost exposure.” Net income climbed to 2.5 billion euros (US$2.7 billion) in the 12 months through January from 2.38 billion euros a year earlier, the company said. Analysts surveyed by Bloomberg had estimated profit of 2.49 billion euros. The company proposed a 0.52 euro-per-share dividend payment, 7.5 per cent more than the previous year. Inditex also unveiled a profit-sharing plan for about 70,000 employees that will distribute 10 per cent of its annual earnings growth, as much as 2 per cent of total profit. Bloomberg
Corporate Three Melco Crown restaurants among best in Hong Kong and Macau Melco Crown Entertainment announced yesterday that its Italian restaurant Aurora at Altira Macau, and its contemporary French restaurant The Tasting Room and Chinese culinary masterpiece Jade Dragon at City of Dreams Macau, have been named among Hong Kong and Macau’s best 100 dining establishments by the independent editorial panel of the South China Morning Post (SCMP). The accolades are the latest additions to Melco Crown Entertainment’s ever-expanding awards list, joining two prestigious Michelin star awards and eight Forbes Five-Star Awards recently received. “In less than six months, Melco Crown Entertainment has been bestowed with a series of internationally-acclaimed awards, from Michelin star ratings to Forbes Five-Star Awards, and now the SCMP 100 Top Tables for three of our signature restaurants. This industryrecognition demonstrates that our finedining establishments have continued to shine and deliver unparalleled service and a fascinating culinary experience like no other to their guests,” said Mr. Kristoffer Luczak, Senior Vice President of Food and Beverage, Melco Crown Entertainment Limited.
8 | Business Daily
March 20, 2015
Greater China No extra stimulus needed China’s growth target of 7 percent for this year is appropriate and the country does not need additional stimulus measures to meet it, deputy finance minister Shi Yaobin told German newspaper Handelsblatt yesterday. “I think the state should support the growth target with certain measures. For example with appropriate economic, fiscal and innovation policies. But there is no reason to take additional measures to raise the pace of growth,” Yaobin said. He added that although Chinese growth was not expected to be as strong as in previous years, it was still high compared to other countries.
China Mobile 2014 profit down China Mobile Ltd said 2014 profit attributable to shareholders fell 10.2 percent to 109.3 billion yuan (US$17.7 billion) as the country’s largest mobile network poured money into its 4G business. The profit was slightly higher than the 108.6 billion yuan forecast by analysts polled by Thomson Reuters Smartestimates. China Mobile’s revenues of 641.4 billion yuan were 1.8 percent higher from a year ago but lower than expectations of 646.2 billion yuan. China Mobile said it had acquired 39.43 million mobile subscribers last year, bringing its total to over 800 million.
Yahoo shutting down its office in China US Internet company Yahoo is shutting down its presence in China, it said, with reports saying at least 200 people will be laid off. The closure of the research centre in Beijing office will eliminate 200 to 300 jobs, Bloomberg reported, quoting a person familiar with the matter. The California-based firm’s move contrasts with other Internet companies, which are courting the world’s biggest online population despite authorities blocking their products. Yahoo confirmed the closure in a statement to AFP, but did not specify how many employees would be affected.
Jimmy Choo to step into China Luxury shoemaker Jimmy Choo reported a 7.2 percent rise in annual earnings and said it would continue to grow by expanding its store portfolio in China. Reporting its first full-year results since floating on the London Stock Exchange in October, Jimmy Choo said adjusted core earnings (EBITDA) of 50.2 million pounds (US$75 million) in 2014 compared to the 46.9 million pounds it made in 2013. Underlying sales rose 5.7 percent at its retail arm in 2014, in what chief executive Pierre Denis said had been a year of progress for the company.
High-protein wheat on the rise Chinese buyers purchased around 450,000 tonnes of high protein wheat over the last few days, with more imports expected due to a domestic shortage of high quality grades, traders and industry sources said. China bought around 300,000 tonnes of high protein milling wheat from Canada and about 150,000 tonnes from Australia, with shipment from May 2015, according to traders in Europe. That follows the purcahase last week of 115,000 tonnes of U.S. hard red spring wheat.
Global push aims to change software approval rules Chinese banks had until Sunday to submit plans for how to comply with the new regulations Krista Hughes
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he United States has joined forces with Japan and the European Union to pressure China on new bank cyber security rules that have upset foreign companies, a senior U.S. official said. Deputy Trade Representative Robert Holleyman said the United States would keep lobbying China to put a hold on the rules, which would force technology vendors to Chinese banks to hand over secret source code and adopt Chinese encryption algorithms, until there was a “satisfactory resolution.” “We are working to try to break down those barriers, and we have also secured support from our allies and trade partners in Japan and the EU,” Holleyman, who raised the issue with Chinese officials during a visit to Beijing last week, told the National Lieutenant Governors Association. “This is not just a U.S.-led initiative; it’s an important global initiative.” Brussels has also raised the issue with Beijing at the ministerial level and plans to flag its concerns at the World Trade Organization’s next meeting on technical trade barriers. “The EU is concerned by the lack of transparency in the development of these measures and by the potential impact on EU companies,” a European Commission spokesperson said. Chinese banks had until Sunday to submit plans for how to comply with the new regulations, which Holleyman said would largely shut U.S. technology and ATM providers out of the Chinese market. Washington is also pressing for China to pause the implementation of a draft counterterrorism law which
could hit IT companies as well. Victoria Espinel, who succeeded Holleyman as president of lobbying group BSA The Software Alliance, said the U.S. industry was working “very closely” with colleagues overseas. “What we have been doing very successfully (is) to make clear towards the United States government, the European government, the Japanese government (and) the government of China that this is a concern,” she said. “It is not good for Chinese companies to be cut off from being
able to choose the best products and services they want, it’s not good for China ... as an economy.” U.S. State Department Under Secretary for Economic Growth Catherine Novelli said the combined approach should pay dividends. “Hearing these things from so many different channels is the proof that ... this actually is the generally widely held view of those who know about technology,” she said earlier this month. Reuters
Shanghai to open oil futures to the world Foreign entities that don’t trade through agents should have a minimum of 10 million yuan of net capital or the equivalent
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hina plans to allow foreign investors to trade its proposed crude futures contract as the world’s second- largest oil consumer seeks to bolster its influence in determining benchmark prices. The Shanghai International Energy Exchange will allow foreign investors to trade through agents that have net capital of at least 30 million yuan (US$4.8 million) or the equivalent in foreign currency, according to draft rules published on its website. It will accept foreign-denominated funds, standard warehouse receipts, treasury bonds and securities with “stable value and high liquidity” as collateral. China wants more control over oil pricing as its reliance on crude imports increases. The nation’s overseas shipments as a share of consumption will surpass 60 percent this year for the first time, up from 59.5 percent in 2014, according to China National Petroleum Corp. The government introduced a domestic crude futures contract in 1993, stopping a year
later because of an overhaul of its energy industry. “The draft guidelines verify for the first time that foreign investors will
The draft guidelines verify for the first time that foreign investors will be able to trade the crude contracts Li Zhoulei analyst Everbright Futures
be able to trade the crude contracts,” Li Zhoulei, an analyst at Everbright Futures Co. in Shanghai, said by phone. “They also designed some clauses such as the one on margin requirement to boost overseas interest.” Foreign entities that don’t trade through agents should have a minimum of 10 million yuan of net capital or the equivalent, according to the exchange, which is seeking public feedback on the draft rules until April 18. The guidelines didn’t elaborate on some of the “major issues” such as tax and foreign exchange rates, which indicates that more fine-tuning is needed before the contracts can be listed, Li said. The China Securities Regulatory Commission, which originally planned for trading to begin last year, approved the latest listing in December. The contract may start this year, Shanghai Futures Exchange’s Chairman Yang Maijun said last week. Bloomberg News
Business Daily | 9
March 20, 2015
Greater China
Starbucks partners Tingyi to expand in China Adam Jourdan and Bill Rigby
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tarbucks Corp will partner Taiwanese drinks maker Tingyi Holding Corp to produce and sell ready-to-drink (RTD) beverages in China, becoming the latest global firm to latch on to a local peer to expand in the tricky market. Starbucks will have Tingyi manufacture the drinks for China and help extend its distribution on the mainland, the U.S. coffee giant’s fastest-growing overseas market, the pair said in a joint statement yesterday. Starbucks announced its deal with the No. 2 soft drink seller in China at its annual shareholder meeting earlier in Seattle. Multinationals in China often turn to local partners as the easiest way to target the country’s huge consumer market, where bureaucracy, developing infrastructure, fragmented distribution and occasionally murky business practices can make it challenging for foreign firms to navigate alone. “China is a tough market to crack logistically. It’s hard to get beyond a few cities without a distribution network you’ve built up yourself, which takes a lot of investment,” said James Roy, associate principal at China Market Research Group.
Multinationals in China often turn to local partners as the easiest way to target the country’s huge consumer market
have tied-up with local partners to boost China sales. PepsiCo Inc already works closely with Tingyi in China. A number of firms have struggled alone. Tesco eventually partnered China Resources Enterprise Ltd in 2013 to turn around its loss making business, and U.S. retailer Best Buy Co Inc sold its struggling China unit last year. Starbucks said it has more than 1,500 stores in nearly 90 cities in China and over 25,000 employees. The majority of stores are companyoperated, unlike elsewhere in AsiaPacific where licensed stores dominate. Reuters
“The best way is to partner with somebody that has a network ready to go.” Starbucks’ China and Asia-Pacific president John Culver said the tie-up would “unlock” the ready-to-drink coffee and energy beverage market in China, which the firms said was worth US$6 billion and set to grow by 20 percent over the next three years. “Tingyi will leverage its strength in production and distribution to increase the market share of Starbucks’ RTD products in the Chinese market,” said
Tingyi CEO James Wei. Analysts said the tie-up would help lower the cost of Starbucks’ RTD coffee products and boost the company’s footprint in smaller cities, potentially giving it access to an army of new consumers. Starbucks currently lags far behind RTD coffee market leader Nestle SA, according to 2014 data from researcher Euromonitor. U.S. drinks maker The Coca-Cola Co, French dairy firm Danone SA and British grocer Tesco PLC all
KEY POINTS Deal to help expand readyto-drink market Coffee chain lags behind in potential US$6 bln market Move could lower costs, spread footprint
10 | Business Daily
March 20, 2015
Greater China
Will that be all, sir? Butler business booms in China The phenomenon has been accompanied by cases of fly-by-night butlers, who are trained to serve in property developers’ showrooms to lure customers Tom Hancock
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ands sheathed in white gloves, Alvin Hu’s dream of serving as butler to China’s growing ranks of super-rich faced an unlikely challenge: a dinner plate piled high with multi-coloured toy bricks. China’s only foreign-run butler school opened last year, riding the coat-tails of increasing demand for the trappings of European-style old money in the Communist-ruled country, even as its economic boom slows. Students at the International Butler Academy are drilled daily on everything from ironing perfect creases into tablecloths, polishing silverware, and the correct cutlery to accompany an eight-course banquet. “In the whole world there are more and more rich people. And especially in China, they want someone to take care of the smaller things,” said Hu, one of dozens of students who have enrolled in the school’s six-week courses, which cost 40,000 yuan (US$6,500). In an exercise designed to test the steadiness of his hand, Hu steered a platter of plastic toys representing food towards his seated Swiss instructor, who furrowed his brow as plastic balls standing in for dinner careened in front of him. “Thank you,” the instructor offered, after Hu used a silver knife and spoon to ferry an oversized brick onto his plate. A butler can typically expect to earn 20,000 yuan (US$3,200) a month, according to Hu, making the course a worthwhile investment. China is home to more than a million people with assets above US$1.6 million, according to wealth publisher Hurun, with numbers expected to swell in coming years. The country’s elite have employed servants for centuries -- with some, such as the eunuchs of the Imperial court, enjoying high status and power of their own -- but screen representations of British-style butlers have lent them a new aura of luxury. “In the last few years the demand for butlers has become bigger and bigger. So it’s logical for us to have teachers here,” said Thomas Kaufmann, head instructor at the school. “It’s easier to train a Chinese
Now that selling apartments has become more challenging, companies have to provide more services for the tenants, who are also demanding more Thomas Kaufmann International Butler Academy head instructor
in the butler trade than it is to train a Western butler in Chinese language and culture.” Butlers have a long history in Western books and films, from Jules Verne’s Passepartout and PG Wodehouse’s Jeeves to Alfred from the Batman movie franchise, but it is Downton Abbey’s Carson who has stoked appetites in China. “Downton Abbey is so famous here in China, that’s the standard we are measured at,” said Kaufmann.
‘A butler for every villa’ The Academy, in the south-western city of Chengdu, is Dutch-run but partly backed by a Chinese real-estate firm -- reflecting the growing number of Chinese housing developments offering butler services to potential homeowners as the property market becomes tougher. A short stroll away, a billboard for a new housing estate shows a grinning man in a suit and bow tie, promising to bring “the elegance of British butlering service into everyday life”. Pu Yan, a spokeswoman for developer Langji Real Estate told AFP: “We provide a butler for each private villa. Our customers have been very happy.” Shi Chunming, a founder of rival Chinese firm Sinobutler said he had recently signed “several cooperation agreements with real-estate firms”. An index of new home prices in 100
major cities fell for eight consecutive months last year, but the downturn has proved a surprising boon for the school, according to Kaufmann. “Now that selling apartments has become more challenging, companies have to provide more services for the tenants, who are also demanding more,” he said. “That’s actually pretty good for us.” But the phenomenon has been accompanied by cases of fly-by-night butlers, who are trained to serve in property developers’ showrooms to lure customers -- in instances of false advertising. “Once the sales office is closed, the butlers disappear,” he said.
‘Are you not listening?’ The school is based in a villa decked out to resemble the kind of luxury home students hope to work in after graduation. Each morning’s classes start with a round of dusting, cleaning and polishing, and the positioning of a water-jug can provoke ferocious debate -- while a butter-knife laid a centimetre out of place can lead to failure. Students laying a banquet table crouched and squinted to gauge the precise spacing of rows of forks, whipping out rulers to make sure the distances were correct. But not to Kaufmann’s exacting standards. “How can you put cutlery
down like this?” he demanded. “Why? Are you not listening? You did not measure. You have to measure!” Chinese student Chrissy Yan -butlering is no longer a male preserve -- said the training “can be hard, especially the table-laying”, as cutlery rattled in the background. But her ambitions were undaunted. “I want to lead a team of Chinese butlers which will be known worldwide, and asked to travel the world,” she said. Once employed, butlers’ duties include more mundane tasks such as “fetching groceries, walking the dog, organising cleaning staff, polishing furniture and shoes”, said Kaufmann. Like most students, Hu is young but spent several years butlering for the likes of US casino magnate Steve Wynn, where he said his tasks included wiping fingerprints from his boss’ mobile phone and picking out his favourite variety of chocolate from assortment packs. “You need to think and take care of every single detail,” he said. But serving the rich is a pleasure, he insisted, and believes a certificate from the school will improve his prospects. “Now butlers don’t only serve wealthy families, but also multinational bosses. These people are successful. To make these kind of people feel relaxed and happy, I get a sense of achievement.” AFP
Business Daily | 11
March 20, 2015
Asia
Japan business mood patchy on effects of weak yen
Managers said they are facing rising costs for materials and other inputs despite cheaper oil prices
Tetsushi Kajimoto and Izumi Nakagawa
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onfidence at Japanese manufacturers rose for a second straight month in March but slid among service sector firms, a Reuters poll showed, reflecting the boost given to big exporters by a weak yen and the pain suffered by other firms paying more for imports. The Reuters Tankan - which closely tracks the Bank of Japan’s tankan survey - suggested that the central bank’s poll due April 1 is likely to show steady improvement among big manufacturers. But the Reuters poll also highlighted an uneven recovery from a recession caused by last year’s sales tax hike. Benefits from slumping oil prices are yet to spread through resource-poor Japan. The poll of 483 big and mid-size firms, of which 255 replied between March 3-16 was taken just as the dollar hit eight-year highs above 122 yen last week, stoking concerns that further yen depreciation could hurt firms who are unable to pass on the rising costs of imports to customers. “Overall sentiment is moving in a positive direction,” said Yuichiro Nagai, economist at Barclays Capital. “Non-manufacturers’ sentiment stopped rising, partly reflecting higher costs caused by a weak yen for companies that rely on imports.” “As such, we expect the sentiment indices in the BOJ tankan to hold broadly steady.” The central bank will scrutinise the upcoming tankan at the next policy review in April, after it stuck to its massive stimulus programme at its last review on Tuesday. The managers, who responded anonymously to the Reuters poll, said they are facing rising cost for materials and other inputs despite cheaper oil prices, and sluggish demand due to
Further yen depreciation could hurt firms who are unable to pass on the rising costs of imports to customers
the sales tax hangover and slowing growth in China. “A weak yen helped improve profits at our overseas business but weakening domestic demand weighs on overall sales,” said one general machinery maker. Another manufacturer said: “Our business conditions deteriorated as we cannot pass on rising costs of raw materials caused by a weak yen.” The Reuters Tankan sentiment index for manufacturers rose to 16 in March from 11 in the prior month, led by gains in precision machinery
KEY POINTS Manufacturers’ March sentiment index 16 vs 11 in Feb Service firms’ March index 21 vs 22 in Feb Manufacturers mood seen up in June; service-sector seen down
Tourists boost New Zealand’s GDP The central bank expects the economy to grow 3.2 percent in the year to March 2015 Naomi Tajitsu
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boost in tourist spending lifted economic growth in New Zealand during the fourth quarter, a sign that a buoyant economy with limited inflation pressures will keep pressure off the central bank to move on interest rates. The economy grew a seasonally adjusted 0.8 percent in the quarter, according to Statistics New Zealand, a touch more than economists’ forecast of 0.7 percent, as the retail trade and accommodation sector received a strong boost from overseas visitors. The annual growth rate rose to 3.5 percent, the highest since the September 2007 quarter. Economists had expected 3.3 percent. The data was in line with the Reserve Bank of New Zealand’s (RBNZ) forecast and consistent
makers and oil refiners. It is expected to improve further to 21 in June. Compared with three months ago, the manufacturers’ index improved by six points, suggesting that the BOJ’s next quarterly tankan will show a steady improvement among big manufacturers. The service-sector index slipped to 21 from 22 in February and it is seen slipping further to 19 over the next three months. The index stood two points lower than in December, pointing to little improvement in the upcoming BOJ tankan. Reuters
the RBNZ’s 1 percent to 3 percent target range and prompt a rate increase in the first half of 2016. The economy still faces risks in coming months because of slowing growth in China and Australia, its biggest trading partners. In addition, many economists expect a drop in agriculture production to reduce growth slightly in the first half of the year as drought weighs on the dairy and meat industries, the country’s largest export earners. Reuters
with the growth trend seen by many economists. Housing services activity rose 1.2 percent, benefiting from the country’s booming real estate market, while financial and insurance services grew 1.1 percent on the back of increased banking activity. Manufacturing activity rose 1.0 percent, boosted by petroleum, chemical and agricultural product processing. The annual reading shows that New Zealand is outperforming many developed countries including Australia, Europe and Japan, which have been loosening monetary policy to shore up their economies. It suggests RBNZ will hold its official cash rate at 3.5 percent into 2016 as the economy remains in a
sweet spot of buoyant growth and low inflation for now. “For now, we think the RBNZ’s inclination is to sit there on hold and allow the economy to recover and for that to gradually push up inflation,” said Ben Jarman of JPMorgan. Last week, the RBNZ kept rates unchanged following a series of monetary tightening last year, as it watches data, commodity prices, inflation and a still-elevated exchange rate. The central bank expects the economy to grow 3.2 percent in the year to March 2015 and 3.5 percent in 2016, before slowing to about 3 percent the two following years. Many economists say sustained growth will lift CPI from an annual 0.8 percent towards the mid-point of
KEY POINTS GDP +0.8 pct qtr/qtr, +3.5 pct yr/yr, best since Q3 2007 Growth bolstered by tourist spending, housing services Qtr/qtr growth in line with RBNZ f’cast, suggests rates on hold
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March 20, 2015
Asia
Singapore introduces commercial solar tariff
The relatively high electricity price and falling solar costs have helped Singapore join to achieve grid parity, in which solar costs break even with electricity sale revenues
Jane Xie
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ingapore is taking steps to reduce its almost total reliance on fossil fuels in power generation by offering commercial customers the city-state’s first dual solar and conventional electricity contract. Singapore generates 95 percent of its power from natural gas and currently has only 25-30 megawattpeak (MW) of photovoltaic capacity installed, around 8 percent of the national target of 350 MW by 2020. Together with Oslo-listed Renewable Energy Corporation (REC), Singapore’s PacificLight Energy (PLE) is offering a hybrid electricity bundle to commercial and industrial users that consume at least 4,000 kilowatt-hour (kWh) a month. Under the collaboration, consumers can consolidate two streams of costs - one to REC for solar-generated electricity at a fixed cost per kWh, the other to PacificLight at prevailing grid prices - into a single bill, unlike most setups where consumers have to pay the solar seller and power
KEY POINTS Commercial users offered hybrid solar, conventional power deal Singapore generates 95 pct of power from natural gas Falling costs make solar power price competitive generator separately. “Once you have made the (solar panel) instalment, you are not subject to any (price) volatility,” said PacificLight’s chief executive officer Yu Tat Ming. Solar power use is rising fast around the world as module prices are down 75 percent since 2009. Singapore’s electricity tariff, by contrast, rose by almost a third between 2009 and 2013, official data shows,
driven by a tight oil and gas market during that time. The relatively high electricity price and falling solar costs have helped Singapore join a host of countries, including most of Europe, the United States and Japan, to achieve grid parity, in which solar costs break even with electricity sale revenues, Deutsche Bank estimates showed. The bank said in its 2015 solar outlook that solar systems will be at grid parity in up to 80 percent of the global market within three years and that grid parity without subsidies already existed in many regions. The International Energy Agency says that solar energy could dominate global electricity markets by 2050. The technology is already in use on a large scale in parts of Europe and the United States, and China raised its target of solar installations by 20 percent in order to fight pollution. While the recent oil price tumble has challenged the solar energy business, REC’s chief executive Martin Cooper
said the continual decline in solar module prices would ensure competitiveness. “It’s a minor hiccup. For a 40 year plan to do something, this afternoon’s price is just blip,” Cooper said.
Thai Supreme Court accepts case against former PM Yingluck Antagonism between the Shinawatras and the establishment has divided the country for the past decade Amy Sawitta Lefevre and Aukkarapon Niyomyat
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hailand’s Supreme Court accepted a criminal case against ousted former Prime Minister Yingluck Shinawatra yesterday on a charge of mishandling a multibillion dollar rice subsidy scheme, and she could be jailed for 10 years if found guilty. “This case is in the Supreme Court’s jurisdiction so we have accepted the case and we have set the first court hearing for May 19,” the court said in a statement. Yingluck was banned from politics for five years in January after a military-backed legislature found her guilty of corruption related to
the rice subsidy. Yingluck, who did not appear in court yesterday, has denied the charges. She has also defended the rice policy which bought rice from farmers at above-market prices, and has said the charges against her are politically motivated. Her supporters see the case as the latest step by the royalist, military establishment to eradicate the influence of her powerful political family, in particular that of her brother, Thaksin Shinawatra, also an ousted former premier. Antagonism between the Shinawatras and the establishment has divided the
country for the past decade. The military ousted Yingluck’s government in May saying it had to step in to end violent anti-government protests. The protests were mounted by establishment supporters bent
Estimated loss incurred by the rice purchasing scheme totalled US$16.46 billion
Brent crude prices have tumbled by as much as 60 percent since its peak in June last year as high output clashes with slowing economic growth and improving energy efficiency. Reuters
on ousting what they said was an administration riddled with corruption. The court’s decision comes as discontent with the ruling junta, known as the National Council for Peace and Order, appears to be growing. On Monday, dozens of protesters, some holding anti-junta banners, gathered outside a military court in Bangkok where four activists were held on charges of violating a ban on public gatherings. Critics denounced the rice scheme as a populist give-away to the Shinawatras’ rural support base. The finance minister said on February 24 rice stockpiles stood at 17.5 million tonnes and the estimated loss incurred by the scheme totalled US$16.46 billion. The military government is still struggling to offload rice stockpiled under the scheme. Authorities have held five rice tenders since the military took power and have sold 1,177,983 tonnes for about 17 billion baht (US$526 million). Exporters criticised the subsidy for distorting the market and dethroning Thailand as the world’s biggest rice exporter. The junta has said it has no plan to revive rice subsidies. Reuters
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Business Daily | 13
March 20, 2015
Asia
Indonesian import barriers challenged U.S. and New Zealand requested World Trade Organization to act against Indonesian agricultural commerce barriers Krista Hughes
The country’s agricultural exports totalled NZ$31.9 billion in 2014 (US$23.84 billion) -- equivalent to 15 percent of U.S. agricultural exports, although its economy is only just over 1 percent the size of the U.S. economy. “Agricultural exports are the lifeblood of our economy,” Groser said. The import restrictions cover products such as apples, grapes, potatoes, onions, flowers, juice, dried fruit, cattle, chicken and beef, the U.S. trade office said. A U.S. official said licensing requirements had the effect of limiting the amount of imports through restrictions on the time when certain products can be imported, their pricing and quantity. U.S. exports to Indonesia fell when the measures were introduced in 2011, and had remained at lower levels since. Nearly US$200 million worth of U.S. exports to Indonesia were affected by import licensing regimes in 2014, including US$122 million of fruit and vegetables, and other horticultural products. Exports of similar produce to Malaysia were worth US$6 million more, although Indonesia’s population is more than eight times bigger than Malaysia’s, the trade office said. It is the fifth WTO case the United States has brought against Indonesia, and New Zealand’s second. Indonesia also has two cases against the United States. Reuters
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he United States and New Zealand challenged Indonesia’s import restrictions on food and other farm products, saying barriers to goods ranging from potatoes to poultry breached international trade obligations. Their request for a World Trade Organization dispute settlement panel to look at the import barriers kicks off a process that could lead to sanctions. “I’m proud to take this action
today standing up on behalf of farmers and ranchers across the United States who have been shouldering unfair export barriers to the fourth largest country in the world (by population), Indonesia,” U.S. Trade Representative Michael Froman said at the announcement, flanked by New Zealand Trade Minister Tim Groser and U.S. lawmakers. Groser said agricultural market access was critical for New Zealand.
Agricultural exports are the lifeblood of our economy Tim Groser New Zealand’s Trade Minister
Japan public pensions to follow leader’s path They switch from government bonds to stocks as the Government Pension Investment Fund did bfore Takashi Umekawa
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hree Japanese public pension funds with a combined US$250 billion in assets will follow the mammoth Government Pension Investment Fund (GPIF) and shift more of their investments out of government bonds and into stocks, two people involved in the decisions said. The three funds and the trillion-dollar Government Pension Investment Fund, the world’s biggest pension fund, will announce today a common model portfolio in line with asset allocations recently decided by the GPIF, the people told Reuters. Assuming, as expected, the three smaller mutual-aid pensions adopt the portfolio, that would mean shifting some 3.58 trillion yen (US$30 billion) into Japanese stocks, a Reuters calculation shows. The GPIF in October slashed its targeted holdings of low-yielding government bonds and doubled its
target for stocks, as part of Prime Minister Shinzo Abe’s plan to boost the economy and promote risk-taking. GPIF in October slashed its targeted holdings of low-yielding government bonds and doubled its target for stocks, as part of Prime Minister Shinzo Abe’s plan to jolt Japan out of two decades of deflation and fitful growth and promote risk-taking. The shift to riskier investments by the 137 trillion yen (US$1.1 trillion) GPIF has helped drive Tokyo Stocks to 15-year highs this week because of the fund’s size and because it is seen as a bellwether for other big Japanese institutional investors. The new model portfolio, part of a government plan to consolidate Japan’s pension system in October, will match the new GPIF allocations of 35 percent in Japanese government bonds, 25 percent in domestic stocks, 15 percent in foreign bonds and 25 percent in foreign stocks, the sources said.
S.Korea’s producer prices rebound Prices paid by producers for goods and services in South Korea rebounded in seven months due to a rise in oil and farm goods prices, central bank data showed yesterday. The producer price index (PPI), which reflects future consumer prices, inched up 0.1 percent in February from a month earlier, according to the Bank of Korea (BOK). It was the first increase in seven months. The rebound came as Dubai crude, South Korea’s benchmark, averaged US$55.69 dollars per barrel in February, up 21.7 percent from a month ago.
Philippines watching market movements The head of the Philippine central bank said yesterday it is monitoring shifts in financial market sentiment, even as he reiterated that the local peso currency has moved in line with the region. Governor Amando Tetangco said markets remain cautious after the U.S. Federal Reserve moved a step closer to hiking rates for the first time since 2006, and policymakers are mindful of potential risks associated with capital flows. Tetangco also said this week the central bank was “mindful” of potential pressures on asset prices.
Sharp to cut 6,000 jobs Japan’s loss-making Sharp Corp intends to cut 12 percent of its workforce in a global restructuring expected to cost more than US$1.7 billion, a person familiar with the plan said yesterday. The job cuts will total around 6,000, half of which would come in Japan through early retirement while the rest would be overseas, according to the person, who was briefed on the matter but declined to be identified as a formal decision has not been made. The manufacturer has been in talks with banks seeking to secure its second major bailout since 2012.
World Bank projects Bangladesh injection
GPIF in October doubled its target for stocks, as part of Prime Minister Shinzo Abe’s (pictured) plan to jolt Japan out of two decades of deflation
Final investment amounts may vary, as the three funds are not required to follow the model and they, like GPIF, will have some leeway above and below their targeted levels to manage their portfolios in practice, the sources said. The smaller funds will also have latitude to keep some of their assets in cash, which GPIF no longer does, the sources said. Shinichiro Mori, head of GPIF’s Planning Division, said nothing has been decided about the model portfolio. Spokesmen for the other funds the 18.9-trillion-yen Pension Fund Association for Local Government Officials, the 7.6-trillion-yen Federation of National Public Service Personnel Mutual Aid Association and the 3.8-trillion-yen The Promotion and Mutual Aid Corporation for Private Schools of Japan - declined to comment on their asset-allocation plans. Reuters
The World Bank’s Board of Directors has approved US$200 million in interestfree credit to improve livelihoods of approximately 5 million poor people in rural Bangladesh under a project. The Nuton Jibon Livelihood Improvement project will benefit the rural poor in the poorest sub-districts in 21 districts, building on the activities supported by the predecessor Social Investment Program Project, said a statement of the Washington-based lender received here yesterday. It said the project will empower rural communities by providing support for livelihoods and access to market through business partnerships.
Two Philippine gov’towned banks to merge A congressional panel in the Philippine House of Representatives yesterday voted for the approval of the merger of two government-owned banks. Batangas Province Representative Nelson Collantes, chairman of the House committee on banks and financial intermediaries as well, said panel members had voted unanimously for the merger of the Development Bank of the Philippines and the Land Bank of the Philippines with the latter as the surviving entity. Collantes said the merger seeks to fuse the two banks financial capabilities, improve the delivery of services, and achieve economic efficiency.
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March 20, 2015
International Kuwait says OPEC to keep production target OPEC has no plans for an extraordinary meeting to discuss ways to shore up oil prices and doesn’t have a choice but to keep its crude production unchanged to maintain market share, Kuwait Oil Minister Ali Al-Omair said. If other producers want to cut supply, “we will be very happy,” al-Omair said in Kuwait City. No “serious” requests have come from OPEC members to hold early talks so “accordingly the next meeting will be in June,” he said. OPEC producer Algeria is seeking to coordinate a global response from outside the group to tumbling prices.
Greek parliament approves anti-poverty law The total cost of the measures is estimated to hit 200 mln euros Tsipras said his government was committed to societyoriented reforms to ease the pain of a six-year recession
Worst over for Russia’s economy Finance Minister Anton Siluanov said yesterday the worst was over for Russia’s economy, which has been hit by Western economic sanctions over the Ukraine crisis and the fall in global oil prices. Gross domestic product fell 1.5 percent in January in annual terms but Siluanov said there were signs the economy had now entered a period of stabilisation. “The end of last year and the beginning of this year were especially difficult when we saw volatility in the foreign exchange market, the value of our assets declining sharply,” Siluanov told a conference of Russian entrepreneurs.
Norway unexpectedly keeps rates Norway’s central bank kept interest rates on hold yesterday, defying near-unanimous expectations for a cut and pushing up the crown currency, but it left the door open to a reduction if the economy is hurt by the drop in the price of crude oil. The bank said the effects of the drop in the price of oil, the country’s biggest export earner, have been relatively small so far, even if prospects have weakened due to a further drop in the crude price.
Interparfums set to buy Rochas Interparfums said yesterday it would buy perfumes and fashion company Rochas from U.S.-based Procter & Gamble for US$108 million, taking the French fragrances group into the fashion business for the first time. Confirming an earlier report in Le Figaro newspaper, the company said in a statement it hoped to close the deal by the end of the first half of 2015 and would finance it with medium term debt.
GM will lose slot in Russia’s market The Kremlin said yesterday it regretted a decision by General Motors’ to reduce its presence in Russia and that the U.S. carmaker would lose out when the market returned to growth. “We can express regret but on the other hand there never is a vacuum on the market, if one company leaves, other companies fill this gap and ... the company unfortunately has put itself at a disadvantage for when the market picks up,” Dmitry Peskov, the Kremlin spokesman, told reporters. GM said it would shut its Russian factory and wind down the Opel brand.
Greekκ Prime Minister Alexis Tsipras (C) delivers his speech during a parliamentary session in Athens yesterday
T
he Greek parliament approved early yesterday a bill aimed at tackling poverty caused by the country’s five-year-old debt crisis. The move is opposed by international creditors who view it as a “unilateral step” taken by Athens and being “inconsistent” with the February 20 Eurogroup deal which gave Greece time until June to reach a final agreement on the Greek crisis after the four-year bailout expired three weeks ago. The new law includes regulations on the provision of free electricity, rent support and food stamps to thousands of Greeks in need, as new Prime Minister Alexis Tsipras had pledged in the pre-election campaign. The total cost of the measures is estimated to hit 200 million euros (US$215 million) annually. The bill, which was the first draft law put in vote in the House by the newly elected left-led government after the January 25 elections, was supported by the two parties of the ruling coalition, which jointly control 162 seats in the 300-member strong parliament.
Declan Costello, European Commission’s chief representative on the technical team monitoring Greece, has reportedly said the step could be considered as inconsistent with the February 20 Eurogroup agreement. Greece said the commission was already aware of the legislation, and claimed it was mentioned in the February 20 agreement with its International Monetary Fund creditors to extend Greece’s 240-billion-euro (US$258-billion) bailout. Greece undertook the obligation to refrain from adopting any policy that could create new deficits before prior consultation with creditors. Addressing the parliament a few hours before the vote, Tsipras said his government was committed to societyoriented reforms to ease the pain of a six-year recession, rejecting any “blackmails against Greek people.” He said the government would go ahead with implementing a different policy program compared to past austerity programs introduced by previous governments.
Europe will never be United States of Europe EU Commission’s Juncker analyses his first 100 days on duty
E
uropean Commission President Jean-Claude Juncker said is never going to be a “united states of Europe,” and that the EU needed to concentrate on “big issues” such as deepening the economic and monetary union and introducing an energy union and digital market. “We cannot build Europe against nations, we will never have a united states of Europe. We don’t want some mix with our differences to disappear,” Juncker said at an event assessing 100 days of him having been in office. He said that there was no example
for Europe to follow or to give: “We need to build Europe together with all these nations, those who can really understand Europe,” said Juncker. He underlined it was important for the EU to concentrate on big issues. “We need to deepen our economic and monetary union for a very simple reason -- the monetary union we have is not optimal. We have an independent central bank, but we do not have a European government, so we need regulations and rules to replace the European government that does not exist,” Juncker said.
He stressed that by the weekend a second debate on a bill concerning the settlement of tax arrears by up to 100 instalments would be held at parliament. The Greek leader travelled to Brussels yesterday for an EU summit and a special five-member meeting with European officials and leaders on its side-lines to seek a political solution to Greece’s deteriorating cash shortage issue. Still shut out of international financing markets and with no international loans until April under the February deal, Greece could run out of money in coming weeks and eventually exit the Eurozone, analysts have warned. According to the bill, free electricity will be provided to 300,000 poor households which had their electricity supply disconnected after failing to pay their bills. About 30,000 households were due to receive monthly rent subsidies of 70 to 220 euros (US$75 to US$237), and approximately 300,000 families will receive coupons to cover food expenses. Xinhua
He also mentioned the energy union and digital market as “big issues” the Commission should concentrate on. Juncker said he was concerned over the EU spending too much on importing gas and oil which threatens the future of industry. “If we could interconnect our networks in Europe, we would be able to save 40 billion euros (US$42.97 billion), while today we spend 1 billion euros a day and our electricity prices are 40 percent higher than in the United States,” he said. Juncker said introducing a digital market in Europe would be a source of income for Europe, and lead to the creation of 1.5 or 2 million jobs in the next five years. Juncker took office on November 1, 2014. He served as the prime minister of Luxembourg from 1995 until 2013. From 2004 until 2013, he was also the president of the Eurogroup. Xinhua
Business Daily | 15
March 20, 2015
Opinion
Slow growth wires for US interest rates Business
Leading reports from Asia’s best business newspapers
THE TIMES OF INDIA
The Securities and Exchange Board of India (Sebi) is planning rule changes that will make it easier for home-grown startups to list their shares on local bourses, sources involved in the process said, helping domestic investors to bet on the country’s booming online economy. The Sebi is considering easing rules on mandatory disclosure for the draft prospectuses of Internet-based companies, the sources said. One of the main items that could be scrapped is the need to detail the use of proceeds from the initial public offering of shares, they said.
Alexander Friedman
Chief Executive Officer of GAM
TAIPEI TIMES Developers and construction firms plan to offer NT$330 billion (US$10.46 billion) in presale and new home projects during the spring sales season and lie low in the second half of the year when presidential campaigns begin to heat up, online property broker HouseFun said. The forecast represents a 28 percent increase from a year earlier, as construction companies seek to promote sales in the first half and embrace a sluggish market for the rest of the year until the presidential election in January next year, company head Ni Tzu-jen said.
THE AGE Rupert Murdoch’s News Corp has taken a 14.9 per cent stake in APN News & Media after the trans-Tasman newspaper and radio group’s two largest shareholders sold out of the company for about A$300 million. Fairfax Media understands that News Corp has acquired a 10 per cent stake in the block trade executed by Credit Suisse at 88 cents per share. News Corp had quietly built a 4.9 per cent stake prior to the trade. In a watershed moment for APN, Independent News & Media has sold 191 million shares valued at about A$180 million.
THE JAKARTA GLOBE Oil giants Shell, Petronas and state energy firm Pertamina are among the companies that have won oil and gas exploration contracts, the Energy and Mineral Resources Ministry announced. “The total commitment explorations from tender winners are worth US$144 million for three years of exploration. The government will get US$12 million as a signature bonus,” the ministry said in a statement on its website. The government has been offering the conventional and non-conventional oil and gas blocks since last year in an effort to boost the country’s declining oil production.
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he US Federal Reserve’s new policy statement will, as usual, be analysed in excruciating detail in the days ahead, as investors seek guidance on when and how quickly interest rates will be raised. Notably, the word “patient” does not appear, and the Fed has signalled that it may raise its benchmark rate as early as June. But the particular wording is far less telling than the context in which the statement is being released. In fact, uncertainty about monetary policy in the United States has been the leading driver of financial-market volatility this year. After all, the potential effect of interest-rate hikes on the US yield curve has a major impact on the pricing of all global assets. But three factors suggest that investors are over-emphasizing the risk of a curve re-pricing. First, economic developments will likely lead the Fed to exhibit caution when it comes to the process of raising interest rates. Second, even if the Fed acts quickly, investor appetite for returns will anchor yields. Third, the technical features of the market will ensure strong demand for US Treasury bills. Let us begin with the relevant economic developments. The consensus nowadays is that the US economy is growing steadily, with the leading indicators pointing toward further expansion, and labour-market data surpassing expectations. Job creation is strong, with total non-farm payroll employment having increased by 295,000 in February and the unemployment rate falling yet
again, to just 5.5%. But some indicators still have the Fed concerned. The Personal Consumption Expenditures deflator remains well below the 2% target. The core consumer price index, to be released next week, is expected to show a year-on-year increase of just 1.7% – or even less, if the
Uncertainty about monetary policy in the United States has been the leading driver of financial-market volatility this year
lower oil price feeds through from headline to core CPI. And real wage growth stands at less than 2%, which is below the level deemed necessary by the Fed to underpin a sustainable acceleration in consumer spending. On top of already modest inflation expectations – characterized by a five-year break-even inflation rate of 1.9% – the dollar has appreciated by around 10% this year, and by almost 25% since the beginning of last year. Given the deflationary impact of a stronger currency – and the Fed’s general intolerance of deflation – there is good reason to believe that the Fed will exercise caution in raising interest rates. Even if the Fed ignores deflationary pressure and hikes interest rates more quickly, medium- and longterm rates are still likely to be anchored, given how little yield is available elsewhere in the world. Yields on German Bunds are now negative out to eight years. In Europe’s peripheral economies, ten-year yields are edging closer to 1%, as the European Central Bank pursues a 1.1 trillion (US$1.3 trillion) quantitative-easing program. And, in Japan, ten-year yields are below 0.4%. Lending to the emerging economies is hardly attractive, either, with even the riskiest economies offering low hard-currency yields. Indeed, even Russia – whose military intervention in Ukraine has led the West to impose strict economic sanctions – offers annual yield of less than 6% on ten-year bonds. Given such low yields in most
of the world, investors will be eager to take advantage of the relative value opportunity offered by rising US interest rates. Add to that America’s safe-haven status, and the fact that any repricing of US rates surely would reflect an economic resurgence, and the bid for US Treasuries should be exceptionally strong. In this context, interest rates would remain capped, mitigating the risk of a disorderly bondmarket sell-off. The final, technical reason why interest rates are not likely to rise excessively is that years of central-bank purchases and a shrinking US budget deficit have made US Treasuries scarce. Indeed, so-called “repo” activity – that is, the sale of a US Treasury obligation that the seller promises to buy back later at a slightly higher price – has declined considerably, with the balance of such transactions having fallen from US$5 trillion before the crisis to US$2.5 trillion today. Both the two-year and five-year US repo rates have been pushed periodically into negative territory, owing to the combined effects of risk-averse behaviour, investor deleveraging, and stricter banking regulation. Though US monetary policy undoubtedly exerts significant influence on global markets, fears surrounding the direction of US interest rates may be overdone. Though the Fed may no longer be promising patience, the current financial environment implies that investors should not, for the time being, anticipate a major hike. Project Syndicate
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March 20, 2015
Closing HK’s total export of goods up 0.9 pct in Jan.
Government issues guideline on investment reform
The volume of Hong Kong’s total exports of goods increased by 0.9 percent in January 2015 over January 2014, the Census and Statistics Department announced yesterday. According to the department, in January 2015, the volume of Hong Kong’s reexports of goods increased by 0.9 percent over January 2014, while that of domestic exports was up 6.3 percent. Taken together, the volume of total exports of goods increased by 0.9 percent. Concurrently, the volume of imports of goods went up 7.8 percent. Taken together, the volume of total exports of goods decreased by 0.7 percent.
The State Council yesterday issued a guideline to boost reforms for investment management. It aims to improve supervision over investment projects to regulate investment behaviour and maintain market order, said a statement on the website of the Chinese government. This is a key move following the government’s efforts to streamline administration and delegate power to lower levels, it said. It will be important to promoting investment, encouraging entrepreneurship and providing jobs, it said. Supervision measures will include a platform for approval procedures for investment projects across the country. Information on the platform will be shared publicly.
Asian markets mostly welcome Fed’s cautious rate talk After a two-day policy meeting, the Fed issued a statement that removed a pledge to remain “patient” on raising interest rates
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ost Asian equity markets rallied yesterday after comments by the US Federal Reserve cooled expectations of an early rate hike, while the euro and yen retreated against the dollar after racking up big gains in New York. While the US central bank opened the door for a rise after six years of zero percent rates, it lowered its forecasts for economic growth and inflation and stressed it would remain cautious before making any move. News that the Fed is in no hurry to depart from the loose monetary policy
that has supported shares sent Wall Street surging, providing a strong platform for Asian indexes. At the close of trade Sydney was 1.86 percent higher, adding 108.5 points to 5,950.8 while Seoul ended up 0.47 percent, or 9.44 points, at 2,037.89. Hong Kong rallied 1.45 percent, or 348.81 points, to 24,468.89. However, Tokyo sank 0.35 percent, or 67.92 points, to close at 19,476.56 as exporters were hurt by the strengthening yen. Shanghai retreated 0.31 percent in late trade
after rising almost nine percent in a six-session winning streak. After a two-day policy meeting, the Fed issued a statement that removed a pledge to remain “patient” on raising interest rates, signalling a possible mid-year rate increase. But bank chair Janet Yellen stressed growth prospects were more muted than three months ago, despite strong increases in jobs creation. She noted consumer spending has slipped, inflation has declined, wages are flat, and the stronger dollar has hurt US exports. The policy committee lowered its rate outlook to 0.5-0.75 percent for the end of this year, from 1.0 percent previously, while also reducing its 2016 forecast to 1.75-2.5 percent from 2.5 percent. “Just because we removed the word patient from the statement doesn’t mean we’re going to be impatient,” Yellen told reporters.
The news sent the dollar tumbling and provided much-needed relief for the euro, which has been hammered by the European Central Bank’s new stimulus programme. However, yesterday the greenback began to recover, buying 120.65 yen against 120.09 yen in New York, although it is still well down from the 121.35 yen level in Tokyo earlier Wednesday.
Gold price benchmark revamped
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Xinhua
AFP
Dollar fights back
Moving forward in developing circular economy hina has seen notable achievements in developing a circular economy, with its key measurement index increasing to 137.6 between 2005 to 2013. The National Bureau of Statics announced yesterday that it has set up a comprehensive evaluation index system to measure the development of China’s circular economy, and calculated an average rise of 4 points per year from 2005 to 2013. The amount of resource consumption declined steadily, with four out of five indicators in 2013 registering obvious drop compared to 2005. Water consumption per unit of GDP fell by 26.4 percent, and the indexes for biological resources, energy and nonmetallic materials all decreased by varying degrees. Considerable advancements are also achieved in reducing waste emissions and improving the ability of disposing pollutants. Emission per unit of GDP for industrial Sulphur Dioxide (SO) dropped 62.8 percent in 2013 compared to 2005, and that for waste water fell by 38.5 percent. A rather slower progress was seen in waste recycling.
The euro changed hands at US$1.0685 against US$1.0871, but is well up from the US$1.059 earlier Wednesday. At one point in New York the dollar had tumbled to 119.57 yen and the euro was at US$1.101. “It’s difficult to see rate hikes in June, and I expect the timing to keep being pushed back,” Mitsushige Akino, an executive officer at Ichiyoshi Asset Management Co. in Tokyo, told Bloomberg News. “Looking at the US’s inflation rates, and the fact that wages haven’t risen despite the good headline jobs numbers, the US is not in a state to hurry into rate hikes.” Also in New York, the Dow climbed 1.27 percent, the S&P 500 jumped 1.21 percent and the Nasdaq advanced 0.92 percent. Oil prices were lower in Asian trade after jumping in New York in reaction to the Fed news. US benchmark West Texas Intermediate for April delivery shed US$1.46 to US$43.20 while Brent crude for May fell 74 cents to US$55.17. On Wednesday WTI gained US$1.20 in US trade and Brent climbed US$2.40. Gold fetched US$1,164.38 against US$1,153.82 late Wednesday.
Just because we removed the word patient from the statement doesn’t mean we’re going to be impatient Janet Yellen U.S. Fed’s chair
Philippines’ global gaming hub ambitions rise
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ix participants will be involved in setting the first London Bullion Market Association (LBMA) gold price, an electronic benchmark brought in to replace the London gold fix, Intercontinental Exchange (ICE) said yesterday. The four current members of the century-old gold fix, Barclays, HSBC, Bank of Nova Scotia and Societe Generale, took part in the new process on March 20. ICE gave no details of who the other participants would be, but said no Chinese banks would take part. Gold fixings have taken place since 1919. The last ever gold fix, a twice-daily conference call to set the price that producers, consumers and investors commonly use to trade and value the metal, was 1500 GMT yesterday. The gold, silver, platinum and palladium fixes came under increased scrutiny in the wake of a scandal in financial markets over rigging of interest rate and foreign exchange benchmarks. Fixing participants said last year that they would no longer operate the processes.
Philippine mega-casino reported yesterday its first annual profit on the back of half a billion dollars in revenues, strengthening the Southeast Asian nation’s bid to become one of the world’s biggest gambling hubs. Bloomberry Resorts, which operates the Solaire Resort and Casino, said it posted a 4.072-billion-peso (US$91-million) net profit in 2014, compared with a loss of 1.315 billion pesos in the previous year. Revenues doubled to 24.122 billion pesos from 2013. Solaire, owned by Filipino billionaire and port magnate Enrique Razon, opened in March 2013, the first of four billion-dollar casinos planned on a glittering strip fronting Manila Bay dubbed Entertainment City. The huge casinos are the centrepiece of the Philippines’ campaign to rival Las Vegas and Singapore as one of the world’s biggest gambling destinations, after the Chinese enclave of Macau, the industry’s capital. Analysts said Solaire’s nearly half billion dollars in revenue, in only its second year, showed the Philippines could achieve its goal.
Reuters
AFP