MOP 6.00
Crowne Plaza Macau slated to open in Q4
Closing editor: Joanne Kuai
AIIB still opens arms to U.S. and Japan
Page 2
Page 8
Tsingtao profit in Macau down 13.61m yuan in first half Page 4
Publisher: Paulo A. Azevedo Number 883 Monday September 21, 2015 Year IV
Newly reshuffled Australian cabinet includes more women Page 16
Interest Rate Increases on Horizon
Minimal impact says ICBC. The Industrial and Commercial Bank of China (Macau) Ltd. believes the US Federal Reserve will take modest steps only. Meaning interest rates will stay relatively low. And mortgages will be manageable. Interest rates are widely expected to creep up 0.25 pct this year. Gathering momentum in 2016. Fresh economic projections show 13 of 17 Fed policymakers foresee rising rates at least once in 2015, down from 15 at the last meeting in June Page
3
Junket jamboree over
Residential Rebound Mainland home prices increased for a fourth consecutive month in August. According to the National Statistics Bureau, prices inched up 0.3 pct on a monthly basis. And 1.7 pct versus a year ago
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Better regulation of junkets’ capital raising activities a necessity. Legislators and concessionaires agree. Hard on the heels of a junket company whose former employee allegedly embezzled HK$100 million ($13 million).
Brought to you by
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Culturally Active More people into culture. Particularly men. According to the latest Statistics and Census Service data. Some 5,600 more people participated in cultural events in 2Q 2015 vs. a year ago. Going to the cinema (32pct) topped activities. Followed by visiting museums or World Heritage Sites (22pct). Or going to the library (21.8pct)
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A degree of confidence
“Human resources are enough for now”. So said Akiko Takahashi, Executive VP and Chief of HR of Melco Crown Entertainment. In the context of Studio City’s 27 October opening. No staff number was volunteered but last year’s reports cited a need for 8,000 personnel. Labour retention programmes are an integral part of the company’s strategy. Particularly with reference to advanced education
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Interview
www.macaubusinessdaily.com
Cut above the rest Local barbershop 2Legit owners share the philosophy of this dying craft with Business Daily. Barbering, they insist, is communitybased and gentleman-oriented. Nurturing a tradition of manners revolving around a uniform, classic men’s haircut. Finding a creative and cultural district to operate in was a masterstroke, they feel. Which continues to feed a passion going way beyond their original vision
Pages 6&7
HSI - Movers September 18
Name
%Day
Sands China Ltd
+5.75
Cheung Kong Property
+4.69
Galaxy Entertainment
+4.07
Sun Hung Kai Propertie
+3.83
Belle International Ho
+3.72
Industrial & Commerci
-1.04
Hang Seng Bank Ltd
-1.16
HSBC Holdings PLC
-1.31
Lenovo Group Ltd
-2.44
China Resources Enter
-48.26
Source: Bloomberg
I SSN 2226-8294
2015-9-21
2015-9-22
2015-9-23
25˚ 31˚
25˚ 31˚
25˚ 31˚
2 | Business Daily
September 21, 2015
Macau
Increased participation in cultural activities Comparing the second quarter of this year with the second quarter of last, it is estimated that 5,600 more people participated in cultural events, with going to the cinema the most popular João Santos Filipe
jsfilipe@macaubusinessdaily.com
T
he number of participants in cultural activities increased 5,600 during the second quarter of the year in comparison to the second quarter of 2014, according to Statistics and Census Service data.
The increase was primarily driven by an increase in the male population participating in such activities, as male participation increased 5.9 per cent year-on-year to 136,700 from 129,100. Female participation shrunk
by 1.3 per cent to 153,400 from 155,400. While the number of participants in events increased 1.9 per cent, the percentage of individuals participating in cultural activities
of the population aged 16, defined as the participation rate, decreased 0.8 percentage points. The decrease in participation rate was driven by the female population, who dropped 2 percentage points to 54.7 per cent from 56.7 per cent. At the same time, the participation rate of males increased to 50.9 from 50.2, some 0.7 percentage points. In terms of cultural activity, going to the cinema is the most popular. However, the participation rate of all cultural activities in the territory went down during the second quarter of the year. In terms of watching movies, the participation rate stood at 32 per cent, down from 32.6 per cent. Visiting museums or World Heritage sites was the second most popular activity, achieving a cultural participation rate of 22 per cent, down from 22.6 per cent during the second quarter of last year. Going to the library posted a participation rate of 21.8 per cent, compared to 22.4 per cent.
Residents display more interest
The Survey on Participation of Residents in Cultural Activities showed that when residents are considered alone, the participation rate increased to 58 per cent from 56.7 per cent during the second quarter of the year. Concerning the number of participants, some249,800 people attended cultural activities versus 240,900 during the second quarter of 2014, representing an increase of 3.7 per cent year-on-year. Regarding the most popular cultural activities, cinema occupies the first place with a participation of 36.7 per cent in terms of residents, up 2.6 percentage points from 34.1 per cent. Visiting the library is the second most popular activity with a 25.8 per cent rate, while visiting museums or World Heritage sites was the third most popular with 22.2 per cent.
Crowne Plaza Macau slated to open in Q4
C
rowne Plaza Macau, a 5-star hotel brand under the InterContinental Hotels Group (IHG) situated in the city’s northern district, expects to open in the fourth quarter of this year, Business Daily has learned. “Hopefully, we can open the hotel by the end of November,” Crowne Plaza Macau GM Dominique Berhouet told Business Daily, noting that the hotel is still pending its operation licence issued by Macau Government Tourist Office (MGTO). The hotel, which is almost ready with a full team of employees, is currently accommodating design changes in its interiors, according to Mr. Berhouet. Originally slated to open in the second quarter, as
mentioned to Business Daily last year, Mr. Berhouet stressed that the preparation works for the hotel have been progressing well so far. Crowne Plaza Macau occupies part of The Residencia project, a luxury housing complex in the heart of Areia Preta district which is predominantly a residential area. The hotel is within a short distance of the busiest inland checkpoint of the Border Gate and is near the future Zhuhai-Macau-Hong Kong Bridge connection. The hotel will be managed by IHG Group but is owned by San You Development Co. Ltd., the developer of the Residencia housing complex. Crowne Plaza Macau will feature 208 rooms, all with full or partial sea views. S.L.
Business Daily | 3
September 21, 2015
Macau
ICBC Macau: Fed’s mild steps unlikely to impact Macau ICBC Macau said the impact on interest rates and mortgage plans here will be ‘minimal’ in the coming year given expectations of modest policy tightening by the US Federal Reserve
T
he Industrial and Commercial Bank of China (Macau) Ltd. said it expects minimal impact on the city’s interest rates and mortgage plans in light of the possibility of modest policy tightening by the US Federal Reserve on interest rates starting later this year. ‘We expect that the Fed may increase the interest rate 0.25 per cent in December this year. Next year, the Fed is forecast to increase the interest rate two to three times at 0.25 per cent pace,’ the risk management department of ICBC Macau remarked to us. ‘The Hong Kong and Macau banking industry may not increase interest rates right away following the Fed decision. The interest rate change impact will be minimal if the interest rate is increased in line with market forecasts,’ ICBC Macau said when asked of the likely
impact on interest rates and mortgage plans here. Macau’s mortgage rate is in lockstep with interest rates in the United States as a result of the currency peg between the pataca and the U.S. dollar. The rock bottom prime rate that Macau sees now has resulted from the US’s down-adjustment of interest
rates in 2008, as the latter has begun pulling out the quantitative easing policy to stimulate the crisis-stricken economy. ‘Since we are still in a low interest rate environment and interest rates are expected to rise slowly, we have not seen our clients’ demand for home mortgage significantly affected by anticipation of
rising interest rates,’ ICBC Macau remarked to us. Rose Lai Neng, professor of finance at the University of Macau, also remarked that the city’s slowing economy and gaming downturn are much stronger factors contributing to the downward pressure currently seen in home prices than the anticipation of rising interest rate.
The US Federal Reserve kept interest rates unchanged on Thursday in a nod to concerns about the global economy, financial market volatility and sluggish inflation at home. In what amounted to a tactical retreat, Fed Chair Janet Yellen said developments in a tightly linked global economy had in effect forced the US central bank’s hand. But the Fed maintained its leaning towards a rate hike some time this year, while lowering its long-term outlook for the economy. Fresh economic projections showed 13 of 17 Fed policymakers foresee rising rates at least once in 2015, down from 15 at the last meeting in June. Traders in futures markets cut bets that the central bank would lift rates by December to around a 47 per cent probability, from 64 per cent before the release of the policy statement. Four Fed policymakers now say rates should not be raised until at least 2016, compared to two who felt that way in June. The Fed has policy meetings in October and December. In deciding when to hike rates, the Fed repeated it wanted to see ‘some further improvement in the labour market,’ and to be ‘reasonably confident’ that inflation will increase. S.L. with Reuters
4 | Business Daily
September 21, 2015
Macau
Legislator calls for better regulation of junkets' capital raising activities Legislator Si Kai Lon says better oversight is necessary regarding the practice of junkets raising capital by offering above-market interest rates, a risk dramatically highlighted in the alleged theft of Dore's capital Stephanie Lai
sw.lai@macaubusinessdaily.com
L
egislator Si Ka Lon has called for better regulations applicable to the extension of credit and financing channels for the city’s VIP gaming promoters and collaborators in light of the recent alleged theft of cage funds from Dore Entertainment Co. Ltd.
In a written enquiry, Mr. Si questioned whether local authorities will adopt any action to strengthen oversight against the common practice of junket operators raising capital by offering private investors abovemarket interest returns for their deposits. This financing format has
been a conventional means of extending credit to VIP gaming players. The question follows the alleged theft of cage capital by former cage manager Mimi Chow of junket firm Dore Entertainment Co. Ltd., which has caused several people claiming to be Dore’s investors demonstrating at Wynn Macau casino and government departments requesting help to withdraw their cash deposits placed with the firm in the past week. A clearer legal framework to regulate the junkets’ financing activities and extension of credit is necessary, remarked Kwok Chi Chung, president of the Association of Gaming and Entertainment Promoters of Macau. “We call these investors ‘shareholders’ that earn fixed monthly interest from their placed deposits with the junket firms,” Mr. Kwok told us. “In many junket firms, this
monthly interest rate is 1 per cent.” Mr. Kwok acknowledged the illegality of this capital raising exercise but said it is still a common practice by the city’s junket firms. Dore published a notice on Thursday announcing that it has never collected capital by offering high interest rates because it understands the practice is illegal. The junket firm said it suspected that its former cage manager Ms. Chow had used the company’s name to attract deposit capital offering high interest rates, and allegedly stole over HK$100 million from the company’s cage. The case has already been filed by the junket operator with Judiciary Police, who said on Friday that it has received 38 complaints. From these reports, police estimate that the lost capital from the firm amounted to HK$390 million.
Gov’t: Gaming operators Tsingtao profit in Macau should enhance down 13.61m yuan in first half supervision of junkets
T
singtao’s profits for the markets of Hong Kong, Macau and overseas declined 51.8 per cent year-on-year to 12.67 million yuan (MOP15.89 million) from 26.28 million yuan (MOP20.94 million) during the first half of the year, according to the interim report of the company. This result was primarily driven by the decline of revenue in the region. For Hong Kong, Macau and the overseas market during the first six months of the year, revenues fell 5.65 per cent year-onyear to 229.3 million yuan (MOP287.7 million). In the previous year, revenue for the first six months from this segment amounted to 243 million yuan (MOP304.9 million). The trend reflects all other markets in which the company is operating, resulting in overall revenue declining 5.26 per cent yearon-year to 16.07 billion yuan (MOP20.16 billion) from 16.96 billion yuan (MOP21.28 billion). While revenues dropped, the company cut the cost of sales by 3.18 per cent to 9.82 billion yuan (MOP12.32 billion) from 10.15 billion yuan (MOP12.74 billion), as well as selling and
distribution expenses by 9.20 per cent to 3.15 billion yuan (MOP3.95 billion) from 3.47 billion yuan (MOP4.35 billion). As a consequence of the decreasing revenues, and costs, the net income of
the company amounted to 1.20 billion yuan (MOP1.50 billion) for the period ended in June, which was a decrease of 14.3 per cent year-onyear from 1.40 billion yuan (MOP1.76 billion). J.S.F.
S
ecretary for Economy and Finance, Lionel Leong Vai Tac has told local casino operators that they should enhance the monitoring and supervision of junket groups that work in their properties. He said that the enhancement of system and mechanism would help the gaming industry optimise its management and lead to a healthy and sustainable development of Macau’s gaming industry. The Secretary met with representatives of all six gaming concessions in town on Friday, in an exchange of opinions on how to maintain the vitality of the industry during the economic consolidation period and how to enhance Macau’s international competitiveness, and how to stabilise the local employment market, as well as the improvement of the industry’s social image. Mr. Leong said that the SAR Government has always given great importance to the healthy development of the gaming industry and employment circumstances of local residents, as well as improving relevant law and regulations managing casino operators and gaming promoters. The gaming operators said that since the gaming industry had entered the adjustment
phase last year, they have been assiduous in complying with government policy and promoting the development of non-gaming elements, as well as supporting local suppliers. In addition, they have been offering on-the-job training for local employees helping their promotion opportunities. The casino operators’ representatives also voiced their difficulties, such as the shortage of human resources, regulations on junkets, and the diminishing pool of customers. They agreed with the government on better internal management as well as regulating junkets. The Secretary said that he expects the gaming industry to lead the Macau economy, stabilise the employment market and protect local employees’ rights. He said that the gaming operators’ investment in non-gaming elements not only helps Macau with economic diversification but helps the companies themselves by enhancing their international competitiveness. Mr. Leong stressed again that importing non-resident workers is just a supplement to the shortage of the local labour force and pledged that his secretariat would help train local workers so that they would have more opportunities of promotion.
Business Daily | 5
September 21, 2015
Macau
Melco Crown Entertainment confident about Studio City opening An unemployment rate of 1.8 per cent has been a challenge for local companies but Melco Crown says it has enough employees to open the new resort “successfully” employees that would be working during the first months of operation of the new integrated-resort. However, in April 2014 reports said the company was in the market for around 8,000 workers for the new project. The Chief of Human Resources spoke with journalists at the end of one of the company’s events to promote the development and qualification of inhouse workers, designed to be part of a strategy for the company to retain the services of workers for longer.
In-house Bachelor’s degree
O
ne of the main challenges to Macau’s gaming operators has been the workforce. However, in spite of the low 1.8 per cent unemployment rate, Melco Crown’s new Studio City resort in Macau maintains it will be well prepared to open its doors on October 27.
“We’re going to open successfully and our human resources are enough for now”, Executive Vice President and Chief of Human Resources, Akiko Takahashi, told the press on the sidelines of a company event. Ms. Takahashi did not reveal the number of
The ‘You-niveristy’ programme will be launched next year and will offer workers the possibility of studying to achieve a university degree, while still employed. The in-house Bachelors degree is accredited by the Edinburgh Napier University but the classes are, for now, planned to take place
in Macau and Hong Kong. The Bachelor degrees have a duration of four years, but because the leadership and managerial experience of the first 15 participants were taken into account by the Scottish institution, employees will only have to study for two years. “I am also very proud of the 15 colleagues who have expressed interest in the programme. Striking a balance between a fulltime job, studying and family commitments is very challenging. I wish them every success, and hope that it will inspire other colleagues to do the same”, the Co-Founder Chief Executive Officer of the company, Lawrence Ho Yau Lung said, leaving the event without taking questions from the press. The event was also attended by the Principal and Vice Chancellor of Edinburgh Napier University,
Andrea Nolan. However, the relationship between Lawrence Ho and the Scottish University is not new, as the son of Stanley Ho has a bursary programme to fund Mainland Chinese, Hong Kong and Macau citizens that want to study at the Scottish institution. “This is a great opportunity for Edinburgh Napier University and Lawrence Ho to deepen our relationship. This is the first time I have been to Macau and I hope to be back in two years to celebrate the success of this programme with the first graduates”, Professor Andrea Nolan said. Melco Crown Entertainment will directly pay for the tuition fees and costs involved for the participants in this programme. In return, the participants have to commit to the company for a certain time, which was not disclosed. J.S.F.
6 | Business Daily
September 21, 2015
Macau
2Legit: “Barbering is an art” Barbering is a culture, tradition and an art. A barber shop that focuses on men and carries forward the tradition of grooming a gentleman’s manner differs vastly from a commercial hair salon. Local barbershop 2Legit partners Luís Lourenço (a.k.a. Rocklee), investor and cousin Fernando Lourenço, and barber Sara Kei talk to Business Daily about reviving the craft of cutting hair Joanne Kuai
joannekuai@macaubusinessdaily.com Photos: Cheong Kam Ka
Fernando Lourenço, Luís Lourenço (a.k.a. Rocklee), Sara Kei
What’s so special about a barbershop? Rocklee: The word barber comes
from the Latin meaning ‘beard’. In ancient times, those that were allowed to cut people’s hair were the high priests. It was a ritual for releasing negative energy. Hairdressing and salons are a modern [phenomenon] that primarily focus on women. They follow the trend. A barber is one who cuts the customer’s hair uniformly and with consistency. So in that case our craft has to be practiced over and over again, giving the same haircut but better each time, by knowing their skull, their head shape and giving them the best cut to suit their character. Hairdressers don’t shave. They don’t use razors. Mainly, barbers do classic men’s haircuts, and uniform haircuts. That’s the difference. My mentor told me we both cut hair but it’s a different world.
What’s your role in this partnership? Fernando: They are the spirit, the skills arm. I’m a shareholder and I provide strategic direction for them. I guide them and suggest them how to think big. Instead of just providing service, this company will also diversify the service and product portfolio. For example, at the moment, apart
form cutting hair, we also sell hair products. At the same time, I think towards the end of the year we will have our own hair products. The manufacturers will be producing a number of hair products for us and then we also have accessories and equipment and a clothing line. Some other merchandising, as well, which I can’t reveal yet. We want to not just have a local company. We want it to be a global company so we will have products out there selling.
Why is the name 2 Legit? Rocklee: When I was young, we
listened to MC Hammer who had a song called 2 Legit 2 Quit. And I was inspired by that. It sounds legit to me. It’s an easy name and a catchy name.
Why did you choose Rua de S Miguel to open your barbershop? Fernando: We were looking for a
location and one of our cousins who is engaged in the real estate business told us that if you want to build something big and build up a brand, maybe you should choose a location that really suits what you are doing and then he said “Why don’t you open a shop in the arts and creative district because it really matches your company, because what you do is a craft and something new”. And
then we started to look around here and found this spot that’s perfect for us. A barbershop is also communitybased. Once, there was this guy who came in looking sad and demotivated. And here’s a place for him to chill and relax and talk. We listened to him and tried to inspire and motivate him. We motivated him so much that now he wants to be a barber.
How did this barbershop happen in the first place? Rocklee: It’s a story that cannot
be repeated. It won’t happen again in my life. As a b-boy, I was invited to perform and compete in the U.S. around 2006. I saw those American b-boys had really nice fades; it’s like a haircut but has a transition. I thought that’s amazing . . . and how did they do that! So, after I came home, I bought a clipper and started cutting my own hair. In 2011, I went to Chicago. The first night I was there I went to a party called ‘chicken and porn’, so literally when you went inside the club you have porn playing and free chicken to eat. It was crazy. And I met a girl, her street name was Missy. She was the only girl that spoke Cantonese there. She knew everybody. She took me out the next day and showed me around Chicago. I had a messy haircut.
And I saw a TV show: there was a guy and I pointed to him saying “I want that haircut!”And she said, “I know a guy. I can take you there”. And she took me to South Chicago. There’s this barber shop called Rockstar Fades 2 and she took me to my mentor. His name is Ruel Rodriguez. I felt like I was going into a Mexican gangster barbershop. But it was beautiful. Lots of graffiti, warm. All the guys looking sharp and nice. Even the
Barbering teaches you how to respect another fellow man. In history, in a neighbourhood, a barber could cut three generations of the family. That kind of bond is unique
Business Daily | 7
September 21, 2015
Macau most famous b-boys were there, hanging out, chilling. I sat there and said I wanted some graphics. And I sat there and watched him and felt like “I want to do this. I want to do what he can do”. That’s how I started. By 2012, I started cutting my friends’ hair for free, just for fun. Reaction is their most honest feedback. And Fernando saw that and said to me your cuts are really good and you can really charge people for money. At the same time, the classic cut trend was coming back. So I set up my Facebook page. A lot of people didn’t take me seriously in the beginning. I started charging but not much. But whenever I cut a client’s hair, when they gave me their time and hair, I felt like they were already paying me. That’s my value. I felt like I enjoy doing this. Later, I had 80 per cent new customers referred by previous clients. I feel that word of mouth is the most powerful and convincing advertising. After I made some money, I was thinking what should I do. Party? No. I bought a chair, a barber chair. I felt that this is growing and I should have better facilities for my clients. I really feel like that’s a good investment. That moment, it also changed my life, the way I see money, and things, whether it’s a seed or trash. If it’s a seed, it will grow. The business taught me how to spend money wisely. And then I understood the book my mom bought me ‘poor dad, rich dad’. I never understood the book until now. Fernando: He had a manager’s job that a lot of people would die for. But here is much better because this is where his passion lies. In February, he was getting very eager “Now is the time; we have to do this”. Because a lot of people were talking about it and he was like “We have to do it now; if we don’t, somebody will”. And I had to hold him down and tell him “Wait. Let’s look at the figures first. Do we have enough customers; is that enough to cover the rent; and if you give up your job do you have enough to pay for your monthly expenses” and all that. And then we did the research and talked to real estate agents and this and that. In the beginning, it was difficult. But since July, it’s been getting better and better.
Sara: My story is simple. In Portugal, when I finished school, I didn’t know what to do. And my parents asked me what did I like to do and I liked to cut hair. So they found a school for me so that I could learn. I went to this CEPAB hair salon school for two years and a half. They have two sides - the ladies and men. I learned the hairdressing skills. But when they started doing colouring and all that, I wasn’t really motivated. But after I went to the barbering side, which was downstairs, I felt like this is it. This is what I want to do. It’s a completely different vibe. Hairstyling is more competitive. But in barbering, everybody helps each other and is very friendly. I started learning and the passion started from there. I came here to Macau in search of a job because in Europe it’s difficult now. And I was introduced to a hair salon in the beginning. I went to try but I
didn’t like it. I was there for a year. It was a long time. I couldn’t do what I wanted to do. My boss didn’t let me do my style of cutting. I had enough and quit. I was really sad. My passion was so low. Because they were very discouraging saying “You’re not good at what you’re doing”. Later, I was freelancing. And one of my clients told me there was another barber, he was a DJ and b-boy too. And then we met. He met me when I was really at a low point in my life. And he had a cut from me. And we became friends. He lit my passion up again. And it started from there. He made me realise that it’s not that I’m not good, it’s just my ex-boss was on a completely different page. Hairstyling and barbering are different.
What’s the difference now that you have your own shop? Rocklee: I worked at so many
places but I’m lazy. I never like to work. I don’t work hard but I work smart. But this business makes me different. I spend 10 hours a day here but I never feel tired or bored. I never even look at the clock. And I even started to save a lot of money because I stopped spending a lot; whatever doesn’t grow, I wouldn’t spend money on it. I feel good. Before we had the shop, I seized every opportunity for exposure. We went to a hit-hop event in Guangzhou and set up a booth. First we were just standing there like idiots but once the first client sat down and we gave him a cut, everyone started to line up. I have a huge passion, a huge drive. But without him and her, I wouldn’t make it. She taught me a lot of techniques, and he’s the most rational one. I’m not good with numbers, but he taught me. You need to have a good team. You won’t succeed by yourself. Everybody has his or her talents and you need to bring them together to make things work. I’m very proud, not just about my brand, but also my team. Talent is the best investment. Every day I work now. I don’t feel like I’m working. I’m living the life I want.
What’s your vision of 2Legit? Rocklee: My ideal vision is to have
a barbershop in Macau. Barbering teaches you how to respect another fellow man. As we were growing up, not a lot of father figures really taught their kids how to be a man, how to talk to a man, how to carry yourself as a gentleman. Barbering really carries that tradition, also that manner. Barbering is a dying craft and people don’t notice it. Some people don’t know about it until we promote it. It’s like showing them a whole different world. It’s a very positive energy in a barbershop. In history, in a neighbourhood, a barber could cut three generation of the family. That kind of bond is unique. There are only three professions that really have that kind of bond. What we say is that there are only three kinds of men that can touch a man: barber, tailor and doctor. We feel proud of that. People come here, we don’t care where you cut before or where you want to cut next, as soon as you sit on our chair, we want to make you feel part of us. We hope you come back. We hope you leave as a friend, someone we know. We try to remember everybody’s name. We have conversations. But, of course, I cannot cut all men in Macau. I only have two hands. But through a barber school, we can revive the craft of barbering.
Sara, what do you feel about being the only girl in this partnership and also as a female barber? Sara: I feel like he’s my brother.
He helps me so much. They protect me. It’s nice to be the girl. If I need something, if something goes wrong, I’m sure I can talk to him, count on them. The customers sometimes say, “I’ve never had a cut from a girl”. And I ask them, is that a good thing or a bad thing. They say I don’t know, let’s see. And after they have a good cut, they tell me, “I trust you now”. Barbering is all about trust. That’s how you get your clients.
What’s your vision? Sara: I’m just following their leads. I’m grateful and happy to have met them. We’re going far. I can see that.
8 | Business Daily
September 21, 2015
Greater China
August home prices rise for 4th month But economists at Standard Chartered say sentiment in the property market is still fragile Xiaoyi Shao and Nicholas Heath
H
ome prices in China rose for a fourth consecutive month in August, offering hope that the ailing property sector is becoming less of a drag on the slowing economy. But analysts do not expect a fullblown turnaround any time soon, as a huge overhang of unsold homes discourages new construction and investment in all but the biggest cities. Average new home prices inched up 0.3 percent in August from the previous month, according to Reuters calculations based on data released by the National Statistics Bureau (NBS) on Friday, the same pace as in July. Price gains were recorded in 35 of the 70 cities the NBS surveyed, up from 31 in the previous month. The NBS said that, on a nationwide basis, prices rose 1.7 percent yearon-year in August, marking the first increase since September 2014. A Reuters calculation, based on the bureau’s data, showed prices were still down 2.3 percent from a year ago. The property sector accounts for 15 percent of China’s gross domestic product, so even modest signs of improvement would relieve some pressure on the economy, which is expected to expand at its slowest pace in a quarter of a century this year. But economists at Standard Chartered say sentiment in the
property market is still fragile, and believe it remains one of the biggest headwinds for the economy, especially as growth in other areas slows. A StanChart survey of 30 nonlisted developers in medium-sized cities such as Hangzhou in July found that inventories are being worked off only slowly, construction activity remains weak and access to financing
is becoming more difficult despite lower funding costs. “Our surveyed developers expected further policy loosening in the second half of 2015,” StanChart said.
Investment recovery is key
While home sales and prices have picked up, growth in China’s property investment in the first eight months
of the year slowed to 3.5 percent from a year earlier, the lowest since early 2009, while new construction starts plunged by nearly 17 percent, depressing demand for materials from cement to steel. Moreover, price trends are uneven across the country, with those in smaller cities such as the northeastern city of Dandong continuing to
Over 20 countries on ‘waiting list’ to join AIIB The bank will be based in Beijing and will have a capital of US$100 billion
M
AIIB president-designate Jin Liqun
ore than 20 countries are waiting to join the Chinainitiated Asian Infrastructure Investment Bank (AIIB), its designated president said Saturday as he allayed concerns it was aimed to challenge US and Japanese influence in the region. The number could bring the AIIB on a par with or even surpass membership in the Japan-led Asian Development Bank (ADB), which currently has 67 members, 19 of them outside of the Asia Pacific, according to its website. “We have 57 countries (which are potential founding members) and to my knowledge...more than 20 countries are on the waiting list,” AIIB president-designate Jin Liqun told delegates of the Singapore Summit conference, without naming them. “That makes it more than 70. I’m sure there will be more countries which will be interested,” added Jin, a former Chinese vice finance minister who was put forward by Beijing to head the bank and was elected in August by the prospective founding members. The AIIB has been viewed by some as a rival to the Washington-based World Bank and the Manila-based ADB, which has been headed by Japan, its biggest donor, since it was founded in 1966. The US and Japan -- the world’s largest and third-largest economies, respectively -- have notably declined to join the AIIB although they are members of the ADB, but Jin said the door is open to both.
“It takes longer for some countries to reach their internal consensus in making their decision,” he said. “We’ve been very much patient. As you know, the door is open to all of the countries and if they make a decision just pick up the phone, make a call and we can handle the rest of the business,” he said, referring to the US and Japan. Of the 57 AIIB potential founding members, 50 have already signed, including Australia, while the seven others have until the end of the year to affix their signatures. The bank will be based in Beijing and will have a capital of US$100 billion, with US$20 billion paid initially. It is expected to start operations next year. China will be the biggest shareholder with 30 percent. Among non-Asian participants, Germany is the largest shareholder with 4.5 percent, followed by France with 3.4 percent and Brazil on 3.2 percent. Jin said the AIIB is not aimed at challenging the ADB and the World Bank for influence in Asia as the region’s funding requirements are so massive. He cited ADB estimates that Asia’s infrastructure demand could reach US$730 billion per year by 2020, vastly exceeding available resources from existing multilateral lenders. “Creating AIIB has never been about challenging existing institutions. The world stage is spacious enough to allow many actors to perform,” Jin said. AFP
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September 21, 2015
Greater China KEY POINTS August home prices +0.3 pct m/m, -2.3 pct y/y New home prices rose m/m in 35 cities versus 31 in July Supply glut seen capping gains in many cities Rebound in new housing starts, investment needed for recovery
fall, albeit at a milder pace. Since economists believe much of the inventory overhang is in secondand third-tier cities, that weakness is expected to persist. The biggest “first-tier” cities fared better, with Shenzhen being the top performer with a rise of 5.1 percent on the month and 31.3 percent from a year earlier. “Getting bank loans is still easy,” said a Shenzhen retiree who gave her surname as Zou, adding she had bought two new apartments recently. “Many people bought new flats because they thought the stock market has peaked, so they took profits from the stock market to buy property,” she said. China’s stock markets have plunged some 40 percent since midJune. Home prices in Beijing rose 1.1 percent from July and 3.0 percent from a year earlier, while those in Shanghai rose 1.3 percent and 5.6 percent, respectively. Reuters
Central bank orders tightening of supervision of clients’ FX deals Authorities said depreciation pressure on the yuan was "basically released" following August's devaluation
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he People’s Bank of China has ordered banks to closely scrutinise clients’ foreign exchange transactions to prevent illicit cross-border currency arbitrage, sources with the direct knowledge of the matter told Reuters on Friday. China’s yuan is not freely convertible under the capital account, but some firms have made use of gray channels, such as via their overseas subsidiaries, to conduct arbitrage trading between onshore and offshore markets. Some have used bogus foreign trade deals to disguise speculative transactions. Now the PBOC has raised its settlement charges for some banks but not others, suggesting the central bank was disciplining particular banks which helped their clients to conduct such arbitrage business. “Several banks got the PBOC notices yesterday evening,” said one source, adding the “punitive” hike in trading fees reflected those banks’ excessive foreign exchange trading of late, which showed they were suspected of making illicit deals.
Beijing hopes for good news on IMF currency basket The IMF’s executive board is scheduled to decide in November whether to add the yuan to the basket of currencies
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hina is well placed to meet the criteria for inclusion in the International Monetary Fund’s benchmark currency basket, the country’s representative at the international lender said on Friday. Beijing has launched a major diplomatic push for the yuan’s
Premier Li encourages widening scope for foreign investment
inclusion in the IMF basket as part of its long-term strategic goal of reducing dependence on the dollar and France said on Friday it would back the bid. Jin Zhongxia, executive director for China on the IMF’s policymaking board, said China would respect the
Another source said banks which were not “punished” this time might see their trading fees raised if they behaved improperly in the future. The central bank did not immediately reply to a Reuters request for comment on Friday. The PBOC has greatly strengthened its intervention in trading to support the yuan and has implemented a range of preventive measures to curb capital outflows and cross-border arbitrage by Chinese banks and companies. Beijing appears to have been so surprised by the global reaction to its currency devaluation that it is likely to keep the yuan on a tight leash in the near term to head off a currency war that could spark a broader financial crisis, policy insiders say. On Thursday, the State Administration of Foreign Exchange, a unit of the central bank, said it would conduct checks on firms’ foreign exchange transactions to prevent speculation on yuan depreciation and intensify action against illegal cross-border money transactions. Reuters
IMF’s decision on whether to include the yuan currency in the Special Drawing Rights (SDR) basket, but was hoping for a positive outcome. The yuan, also known as the renminbi, was already ranked as a top exporting currency, he said. “More importantly, China can potentially satisfy all of the operational requirements for being a reserve currency in the SDR basket,” Jin said at an Atlantic Council event. China had an active currency market, had recently liberalized interest rates and opened interbank bond markets and would soon open its currency market to foreign institutions, he said. The IMF’s executive board is scheduled to decide in November whether to add the yuan to a basket of currencies comprising dollars, euros, pounds and yen. One of the criteria is that the yuan be “freely usable,” or widely used to make international payments and readily traded on foreign exchange markets. Jin said the currency may be nearing its equilibrium exchange rate. China has been using foreign exchange reserves since mid-2014 to support the yuan after pressure on the currency intensified since a surprise devaluation on August 11. The move sparked turbulence on global markets and was one reason the U.S. Federal Reserve cited as driving its decision to refrain from hiking rates on Thursday. But Jin said the market reaction, while possibly “irrational,” also showed the importance of the currency. “This is rare, even for some of the SDR basket currencies. So clearly if the renminbi is not that important, the world would not bother to pay so much attention,” he said. Reuters
Chinese Premier Li Keqiang said on Friday China will continue to widen the scope for foreign investment, and make it easier, state media reported. China welcomed countries from around the world to invest in China, as it was already closely interconnected with the rest of the world, Li told the visiting French finance minister, Michel Sapin, the Xinhua news agency reported. It provided no details.
State firm defaulter applies for bankruptcy protection Baoding Tianwei Group, the Chinese power equipment company which became the first state-owned firm to publicly default on a bond payment in April, will apply for bankruptcy protection, the firm said in a statement posted on the website of the interbank bond market operator Friday. The firm defaulted in April on an 85.5 million yuan (US$13.44 million) interest payment due for a 1.5 billion yuan (US$235.75 million) medium term note maturing in 2016. The statement declared that as a result of deteriorating market conditions since 2011 its business had begun encountering difficulties.
Urgent talks on cybersecurity deal with U.S. The United States and China have been engaged in urgent negotiations in recent weeks on a cybersecurity deal and may announce an agreement when President Chinese President Xi Jinping arrives in Washington on a state visit on Thursday, the New York Times said on Saturday. Citing unidentified officials involved in the discussions, the newspaper said the agreement could address cyber attacks on power stations, cell phone networks and hospitals. The Times said the initial agreement, however, was likely to fall short of offering any protection against most of the attacks.
Hella says to take legal steps against mainland supplier Hella on Friday said it would take an unnamed Chinese supplier to court for abruptly ending a business relationship, a step which forced the German car headlight manufacturer to issue a profit warning earlier this week. On Thursday, Hella said the costs of reworking its supply chain had led to negative one-off charges in the first quarter and the rest of the financial year of up to 50 million euros (US$57 million). On a call with analysts on Friday, Hella Chief Executive Rolf Breidenbach said the fact that the supplier had chosen to cut off ties immediately was an unprecedented step which goes against normal business practice.
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September 21, 2015
Greater China
Investment banks turn to private share deals to tackle IPO drought To offset the drop in China business, banks are aiming for more deals in markets that have fared relatively better Elzio Barreto
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nvestment banks are encouraging Chinese companies to meet their equity funding needs by selling shares to small groups of investors, as they seek ways to recoup fees lost due to a suspension of mainland IPOs since July. In September alone, Huadian Power International and Everbright Securities Co have raised US$2.4 billion through this route. And financial services firm Shenwan Hongyuan Group, battery maker Fengfan Co and coal company Wintime Energy Co are planning to raise nearly US$7 billion in similar deals in coming months, regulatory filings this month show. “The company wins, with longer term shareholders that want slightly more concentrated positions through a club deal,” as the private share sales are also called, said a Hong Kong investment banker, who did not want to be identified. Though fees on private share sales are lower than those for initial public offerings (IPOs), fewer banks are involved in arranging such deals than IPOs, making them profitable for banks. Big asset managers and pension funds typically participate in such deals. China has been the biggest Asia-Pacific IPO market in recent
In September alone, Huadian Power International and Everbright Securities Co have raised US$2.4 billion through this route
years after Beijing lifted an earlier clampdown on new listings and as companies needed capital to support their rapid growth. Investment banks were hopeful of robust equity capital market (ECM) fees in 2015 from the Asia-Pacific region, where IPOs jumped 15 percent through mid-September from the year-earlier period to US$45 billion and looked poised to end the year near a record level. But those expectations were dashed when China’s stocks bull run suddenly reversed course in June, casting a
pall on Asia-Pacific IPOs as a whole. So far in September only US$231 million worth of new listings have been launched in the region.
Waiting game
State-owned bad debt manager China Huarong Asset Management and snack maker Dali Foods Group late last month won approval for their Hong Kong IPOs, slated to raise up to US$4.5 billion in total. But instead of marketing the deal straight away, they have decided to wait for better market conditions, bankers said.
The same holds true for China Reinsurance and China International Capital Corp, which will only market their US$3 billion of deals next month. Block share deals and the sale of convertible bonds have also dwindled, dimming their outlook for the rest of the year. To offset the drop in China business, banks are aiming for more deals in markets that have fared relatively better. These include India, where Interglobe Aviation and Coffee Day Enterprises plan October IPOs to raise nearly US$600 million in total, and the Philippines, where property firm D.M. Wenceslao and Associates is targeting a US$480 million listing next month. Another fee-generating avenue for the banks is pre-IPO financing. India is becoming an active market there too, with taxi-hailing service Ola recently raising US$222.5 million. Chris Marschall, head of North and South Asia ECM for CIMB Securities, said companies are doing what they can to tie up their funding needs while waiting for the IPO market to rebound. “They may also consider additional pre-IPO rounds, which will push their listing further down by several months,” he added.
Fuel oil imports to slow further on reforms China’s appetite for fuel oil, which is also used in shipping, has already been hit hard by a shift to natural gas and the nation’s economic slowdown Jessica Jaganathan and Chen Aizhu
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hinese imports of fuel oil will drop further this year and next as reforms in the world’s No.2 economy allow more independent refineries to ship in crude oil as an alternative feedstock, traders and analysts said. China is opening its crude oil imports to buyers outside the state-owned sector, with
independent refiners so far getting the go-ahead to use a total of nearly 700,000 barrels per day (bpd) in crude imports, or about 11 percent of total crude shipments into the country. With seven refiners already receiving the final green light to use imported crude oil and two of them granted licenses to import
directly themselves, analysts expect fuel oil to be displaced quickly. Consultancy Energy Aspects said fuel oil demand could fall by 9 percent next year. “Straight run fuel oil imports have dropped a lot mainly as teapot refineries are getting import licenses for crude,” said a trader with a Chinese state-owned
company. Small, independent refiners in China, often nicknamed ‘teapots’, prefer to process crude rather than fuel oil due to better refining economics and larger yields of high-value products such as gasoline and diesel. China’s appetite for fuel oil, which is also used in shipping, has already been hit hard by a shift to natural gas and the nation’s economic slowdown, with the nation flipping into net fuel oil exports in July for the second month since 2006. China imported nearly 1.1 million tonnes of fuel oil in July, it’s lowest volumes in a year, while its exports nearly doubled from June, customs data showed. Demand has also been curbed as the government has
Reuters
raised the fuel consumption tax several times, keen to reduce China’s heavy use of energy and natural resources while addressing its severe pollution problems. And appetite from shippers in China has also been fading, traders said. “Fuel oil demand for shipping is also bad as trade has slowed down a lot,” said a Singapore-based bunker fuel supplier. “They are also using larger vessels now so this affects prices as well.” Cash premiums for straight run fuel oil have fallen by at least a third since the start of the year, a Singapore-based trader said. Meanwhile, China’s imports of bitumen mixture, another type of heavy oil that can easily be blended into fuel oil, have also dropped. Companies had in the last two years switched to importing fuel oil declared as bitumen mixture to avoid paying consumption tax, but slowing demand and a clampdown by the government has curbed those imports, traders said. It is now importing about 500,000 to 700,000 tonnes a month of bitumen mixture, compared with 1.5 to 2 million tonnes a month late last year, said a Beijing-based trader. Reuters
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September 21, 2015
Greater China Leading reinsurer and investment bank win approval for Hong Kong IPO China RE is expected to raise some US$2 billion in its offering
KEY POINTS China RE, CICC join queue of companies plan to list in HK IPO pitch to investors seen in October due to volatile markets
Hong Kong Stock Exchange trading floor
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hina Reinsurance and China International Capital Corp (CICC), the country's top domestic investment bank, have won approval for IPOs in Hong Kong expected to be worth up to US$3 billion in total, IFR reported on Friday, citing people familiar with matter. Companies typically start marketing IPOs right away but China RE, the country's biggest reinsurer, and CICC have decided to pitch their offerings in early October after Hong Kong's National Day holiday due to recent turmoil in financial
markets, said IFR, a Thomson Reuters publication. China RE is expected to raise some US$2 billion in its offering while CICC is likely raise US$1 billion, IFR previously reported. A Beijing-based spokeswoman for CICC declined to comment. China RE didn't immediately respond to a request for comment before business hours. Other companies planning Hong Kong IPOs but which have delayed their plans due to a steep sell-off in equities and concerns about a slowdown in China's economy include
state-owned bad debt manager China Huarong Asset Management and snack maker Dali Foods Group. CICC said in its preliminary IPO prospectus it plans to use funds from the listing to expand its equity sales and trading and investment management businesses, while China RE plans to bolster its capital base to support business growth. Government-controlled CICC made its name taking some of China's largest state-owned enterprises onto the Shanghai and Hong Kong stock exchanges, helped by the connections of former CEO Levin Zhu, the 'princeling' son of former premier Zhu Rongji, who resigned from the firm last year. The firm also counts private equity firms KKR & Co, TPG Capital Management and Singapore sovereign wealth fund GIC Ltd among its shareholders. Reuters
Construction Bank to control Indonesian lender Windu Cindy Silviana and Eveline Danubrata
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There are around 120 commercial banks in the country of 250 million people. The ownership cap has acted as a stumbling block to deals in the past, with some foreign banks unwilling to take a minority stake in Indonesian lenders as that is seen as punitive for capital under new global rules. Because of the cap, Singapore’s DBS Group Holdings dropped its takeover bid for Indonesia’s PT Bank Danamon Indonesia Tbk in 2013. OJK’s Tampubolon had said in June that CCB would be permitted to own more than 40 percent of an Indonesian bank should it buy stakes in two separate lenders and combine them into a single entity. Indonesian tycoon Johnny Wiraatmadja owned 61.2 percent of Bank Windu as of June, according
China’s top anti-graft body will set up offices in more central authority departments this year to strengthen supervision, Xinhua learned yesterday. The Central Commission for Discipline Inspection (CCDI) of Communist Party of China (CPC) already has 58 resident offices, supervising a total of 102 central authority departments and institutions, but it will achieve the full coverage of all central organs this year. At the end of last year, the central authority reformed the resident office system, and established seven more in core central departments, including CPC Central Committee General Office and United Front Work Department.
Central bank appoints ICBC as Argentina clearing bank China’s central bank has appointed the Industrial and Commercial Bank of China as the renminbi clearing bank for Argentina, it said on Friday. The two countries signed an agreement on Thursday to pave the way for the establishment of a local renminbi clearing house. The South American country, which faces a dollar shortage, signed the deal with the aim of providing the financial structures to settle trade and investment transactions with China, Argentina’s central bank said.
Maersk Tankers places ship order with Samsung Maersk Tankers, a subsidiary of Danish firm A.P. Moller-Maersk, has ordered nine medium-range tankers, underlining its commitment to the tanker business even though it no longer ships crude oil. Maersk Tanker placed the US$300 million order for the vessels, which will be able to carry refined products such as gasoline and diesel, from Samsung Heavy Industries’ Ningbo shipyard in China. “The investment ... is a clear indication of Maersk Tankers commitment to remain at the very top of the product tanker industry,” the shipping company said in a statement.
France sees no big risk in mainland economy
Windu will then raise around 1 trillion rupiah (US$69.6 million) from a rights issue, with CCB getting a stake of more than 50 percent
hina Construction Bank Corp (CCB) is buying a controlling stake in Jakarta-based PT Bank Windu Kentjana International, in a rare case of a foreign bank being allowed to own more than 40 percent of an Indonesian lender. The Indonesian financial regulator’s move to give an exemption to the country’s 40 percent foreign ownership cap could pave the way for more acquisitions by foreign banks that are eager to tap growth in Southeast Asia’s biggest economy. “The agenda is to support the consolidation process, so the supervisor can give more leeway, for more than 40 percent,” Nelson Tampubolon, banking supervisor at the Indonesia Financial Services Authority (OJK), told Reuters in a text message on Friday.
Anti-graft body to supervise more central organs
to Thomson Reuters data. Under the proposed deal, Bank Windu, which has total assets of nearly 10 trillion rupiah (US$696 million), will merge with PT Bank Antardaerah, Wiraatmadja told a media briefing. It will then raise around 1 trillion rupiah (US$69.6 million) from a rights issue, with CCB getting a stake of more than 50 percent and Wiraatmadja’s stake reduced to 2025 percent. The deal is expected to be completed this year, Wiraatmadja added. Bank Windu is likely to expand into infrastructure and trade finance once CCB becomes its controlling shareholder, said Luianto Sudarmana, president director of the Indonesian lender. Reuters
France sees no significant risk in China’s economy and is supporting its bid to win approval for the yuan’s inclusion in the International Monetary Fund’s currency basket, French Finance Minister Michel Sapin said on Friday. France supports Beijing’s efforts to strengthen the yuan’s position in global trade as well as “China’s bid to integrate the yuan amongst the IMF currencies”, Sapin said at the opening of the China-France High-Level Economic and Financial Dialogue in Beijing.
Hutchison’s telco deal faces full-scale EU probe Hutchison Whampoa is set to face an extensive EU investigation over its bid for Telefonica’s British unit and is prepared to sell network capacity and frequencies to head off antitrust concerns, three sources said on Friday. Hutchison’s planned 10.3-billion-pound (US$16 billion) acquisition of Telefonica’s O2 business would make it the top mobile operator in Britain. But it comes as the European Commission has signalled a tougher line on telecoms mergers, including forcing companies to divest infrastructure network. The stakes are high for Hutchison, owned by Asia’s richest man, Li Ka-shing.
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September 21, 2015
Asia
BOJ brainstorms stimulus overhaul as options dwindle For now, there is no consensus within the BOJ on what any overhaul to the programme might look like Leika Kihara
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ources say the Bank of Japan has been quietly brainstorming the idea of overhauling its massive monetary stimulus programme over time, casting doubt on officials’ confident assertions that it can keep buying up government bonds for several more years. Sources familiar with the BOJ’s thinking say stepping up its 80 trillion yen (US$665 billion) per year asset buying remains its goto option if deflationary pressures persist, given a limited arsenal of obvious policy alternatives. But they say the central bank isn’t ruling out breaking with the money-printing programme over the longer term, as it has had little success in accelerating inflation toward its 2 percent target since it began in April 2013. Senior BOJ officials have been involved in preliminary talks discussing the longer-term options, the sources said. “If the medicine isn’t working, you wonder whether it makes sense to keep prescribing more,”
one of them said on condition of anonymity. Another source quoted a senior BOJ official as saying that if the socalled quantitative and qualitative easing (QQE) programme fails to accelerate inflation for too long, a revamp of the framework may become an option. “QQE is not a programme intended to last another five, 10 years,” said a former BOJ policymaker with knowledge of current monetary policy deliberations. The BOJ has pumped 180 trillion yen into the economy since adopting QQE and each month gobbles up government bonds equivalent to about 1 percent of Japan’s GDP. While the stimulus has boosted exporters’ profits by weakening the yen, its broader impact has been weak as firms remain wary of increasing wages and investment. Inflation has ground to a halt on falling oil costs and soft consumption, rekindling market expectations the BOJ might step up easing as early as next month.
But with borrowing costs near zero, some BOJ officials doubt whether expanding QQE would help the economy much and some worry they might eventually run out of sellers if they accelerate the programme. The BOJ already holds about a quarter of Japanese government bonds (JGB) in the market, and that would rise to nearly 40 percent by the end of 2016 at the current pace of buying. BOJ technocrats say they can keep buying as long as they offer high prices, but BOJ board member Takehiro Sato, a former bond analyst, has argued that there are limits because financial institutions need a certain level of JGBs for collateral. The International Monetary Fund agrees. “Given the pace of the BOJ’s purchases under the QQE program that is under way ... you could run out of willing sellers of JGBs by the end of 2017,” said Kalpana Kochhar, the IMF’s mission chief for Japan.
That would not just make the bond market dysfunctional, it would also prevent the bank from hitting its monetary base target.
Revert to rate target?
For now, there is no consensus within the BOJ on what any overhaul to the programme might look like. Many policymakers still cling to hope that
India’s central bank governor warns against growing too fast Rajan noted Brazil’s current fiscal and economic woes today came after the country “tried to grow too fast” Himank Sharma and Neha Dasgupta
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ndia must focus on keeping inflation low and avoid using monetary policy alone and short-term government incentives to fuel short-term economic growth, the country’s central bank governor said on Friday. Reserve Bank of India Governor Raghuram Rajan is under growing pressure, from industry and from within the government, to cut interest rates as India’s economic growth stutters and inflation cools.
On Friday, Indian markets rallied as investors bet there would be a cut this month after the U.S. Federal Reserve kept interest rates on hold. Rajan said monetary policy can help strengthen the current economic recovery, but he added India will ultimately “expand sustainable growth potential only by continuing to implement reforms the government and regulators have announced.” “For us at the RBI, the
key tasks are to keep inflation low, not just today, but well into the future,” he said in a lecture organised by the Confederation of Indian Industry. Analysts said Rajan’s remarks left open chances for a rate cut, without feeding speculation. “What he is trying to do is temper expectations,” Vijay Sharma, senior executive vice-president at primary dealer PNB Gilts Ltd in New Delhi.
India’s consumer inflation in August hit a record low of 3.66 percent. Rajan, however, attributed that to a favourable base effect and said retail prices would have grown around mid-5 percent without that positive comparison. The RBI has a consumer inflation target of 2 to 6 percent. Rajan used Brazil as a “salutary lesson” in how the wrong policies - including using low rates to fuel
unsustainable growth and government policies that favoured only some sectors - can impact emerging markets. He noted Brazil’s current fiscal and economic woes today came after the country “tried to grow too fast”. Although Rajan said India was far sturdier, calling it “an island of calm in an ocean of turmoil”. Most analysts expect the RBI to cut rates this month, but doubts remain about how much lower they can go, given the RBI has projected consumer inflation will rise again to 6 percent by January. Currently set at 7.25 percent, a quarter percentage point cut in the repo rate would reduce it to its lowest since May 2011. The RBI has already cut the policy rate by 75 basis point so far this year. Analysts said the RBI would likely continue to monitor how much banks pass on existing rate cuts, the Fed’s policy, and the pace of government reforms to determine future action. Reuters
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September 21, 2015
Asia KEY POINTS BOJ QQE programme buying 80 tln yen govt bonds a year Senior BOJ officials discuss longer-term options -sources BOJ could revamp QQE in longer term -sources QQE not intended to last another 5-10 yrs -source Concern that BOJ may run out of sellers of govt bonds
inflation will rise enough to allow them to consider phasing out QQE around 2017. But with a sales tax hike looming that year, many analysts doubt the BOJ can withdraw stimulus so soon. If the BOJ bumps into trouble buying JGBs, some analysts say it could abandon the 0.1 percent interest the central bank pays on reserves the
financial institutions park in BOJ accounts, or even charge a fee for them. That might particularly hurt regional banks, which are already struggling with thin margins on bond investments. “The BOJ can combine this step with an increase of risky asset purchases and call it a new version of QQE,” said Ryutaro Kono, chief
Japan economist at BNP Paribas, who was once considered a candidate to fill a BOJ board vacancy. “That would effectively mean shifting the BOJ’s target to interest rates from the volume of money.” BOJ Governor Haruhiko Kuroda has ruled out the idea as it would make it hard to achieve the BOJ’s base money target by discouraging banks from depositing funds with it. But he also said that in Europe, negative interest rates had had essentially the same effect as QQE in pushing down yields across the curve. The IMF’s Kochhar said cutting the 0.1 percent interest could be one way to “get the money out the door”. “The BOJ has told us while nothing is ruled out, they would watch carefully the European Central Bank’s experience.” Reuters
IMF welcomes Myanmar currency reforms Fund forecasts Myanmar economy will grow 8.5 per cent this year
The current downward pressure on the kyat is largely a result of macroeconomic policy inconsistency. Monetary and fiscal policies are too loose to anchor the exchange rate expectations IMF’s report
something the Fund said needed to be reined in. It forecast that inflation would rise to 13 percent and the current account deficit would also rise to around 9
The U.S. Federal Bureau of Investigation (FBI) has launched an investigation into allegations of money-laundering at troubled Malaysian state fund 1MDB, the Wall Street Journal reported yesterday citing an unidentified source. The scope of the investigation into the debt-laden 1Malaysia Development Berhad (1MDB) was not clear, said the newspaper, which cited “a person familiar with the matter”. Neither the FBI nor 1MDB responded to a request for comment. The reported FBI investigation comes shortly after a former member of Malaysia’s ruling party was arrested just before travelling to the United States.
Bangladesh wants to invest in infrastructure Bangladesh’s government wants to invest US$8 billion over the next few years in infrastructure to improve the economy and sought help from private sector to share the cost which the government could not bear alone. S A Samad, the executive chairman of the state run Board of Investment (BOI) highlighted the figure while meeting with business leaders from bilateral foreign chambers of commerce in Bangladesh. Bangladesh wants to become a ‘middle income’ country and to double garment export earnings to US$50 billion by 2021.
India orders sugar producers to ramp up exports India announced new rules on Friday making it compulsory for sugar producers to ramp up exports to at least 4 million tonnes in the forthcoming crushing season, to cut stockpiles as the country is set to produce a surplus for a sixth straight year. India is the world’s biggest sugar producer after Brazil and much higher exports would help clear huge sugarcane dues to farmers. But it would also add to a global glut and could further depress prices, which are languishing at seven-year lows.
Vietnam unveils railway revamp plan
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he International Monetary Fund welcomed Myanmar’s “bold move” to liberalize its foreign exchange rules in a report published on Friday and warned that the poor Asian country would need to tighten monetary policy and reduce credit expansion. The Fund cautioned that without further reforms, which could lower growth in the short term, Myanmar risked a run on its foreign exchange reserves, which cover just three months of imports, and a burgeoning fiscal deficit. The Fund said that while the official deficit was estimated at 3 percent of gross domestic product, its real number was closer to 5.5 percent of GDP once one-off receipts from telecommunications and gas companies are excluded. The Fund forecast the Myanmar economy would grow 8.5 percent this year. “The projected increase in the fiscal deficit in the 2015/16 budget -- amounting to almost 2 percent of GDP -- will provide an expansionary stimulus and contribute to strong credit growth and a rising current account deficit,” the Fund said. That would result in the Central Bank of Myanmar likely needing to finance part of that shortfall,
FBI investigates Malaysian state fund
percent of GDP, causing the central bank’s reserves to fall further to 2-1/2 months’ worth of imports. While it welcomed reforms in the currency market that have seen the kyat exchange rate move closer to that of the parallel market, the Fund said more reforms were needed. “The current downward pressure on the kyat is largely a result of macroeconomic policy inconsistency. Monetary and fiscal policies are too loose to anchor the exchange rate expectations, although external shocks have also played a role. Under the current macroeconomic policy settings, resisting depreciation pressure could lead to a quick rundown of reserves,” it said. The Fund report said that the kyat had depreciated about 20 percent against the dollar since September 2014. Reuters
The Vietnamese railway system is set to be given a complete overhaul in the next 15 years under a two-phase revamp plan that costs a whopping US$9.11 billion in total investment, local online newspaper Tuoi Tre News reported Saturday. The north-to-south railroad, running 1,726 km from Hanoi to Ho Chi Minh City, will be modernized in two separate phases, ending 2020 and 2030, respectively, said Vietnam Railways, the state-owned operator of the country’s railway system. The first phase, dubbed the “basic upgrade plan,” will include improvement of the bottlenecks of the railway system.
Indonesia expects to control haze within 30 days Indonesia will take 30 days to bring smouldering forest fires under control, the national disaster management agency said on Friday, as smog from the fires pushes pollution in Southeast Asia to record highs. The region has suffered for years from annual bouts of smog caused by slashand-burn practices in Indonesia’s islands of Sumatra and Kalimantan, but governments have failed to tackle the problem. “We expect there will be a potential for haze because of the El Nino effect until the end of November, but we are targeting to put out the majority of the fires by mid-October,” agency spokesman said.
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International Russia proposes move to raise tax on oil extraction Russia’s finance ministry has proposed changing the calculation method for Mineral Extraction Tax for oil companies by including a so-called “rouble deduction” that would significantly boost revenues, news agency RIA reported on Saturday, citing finance ministry documents. The plan would raise an additional 1.6 trillion roubles (US$24.1 billion) in revenues in 2016-2018, RIA reported. The reported plan comes as Russia is struggling to find ways of making its budget numbers add up, following a renewed slide in the price of oil that has blown a hole in government revenues largely dependent on energy taxes.
Obama chips away at Cuba embargo, discusses efforts with Raul Castro Critics accused Obama of making concessions to a country that was not reciprocating
More U.S. firms eyeing overseas moves given EXIM lapse
More U.S. companies are considering moving plants overseas given concerns about the shutdown of the U.S. Export-Import Bank, the largest U.S. aerospace trade group said Friday, a day after General Electric Co announced plans to build a US$400 million turboprop engine plant in Europe. David Melcher, president of the Aerospace Industries Association, said he expected similar announcements from Boeing Co and other companies, which are already losing business due to lack of access to U.S. trade credits. GE, Boeing and others argue that a campaign by conservative Republicans against the bank is damaging U.S. competitiveness.
Albania removed from money laundering watch list Moneyval, the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, has removed Albania from its constant monitoring list, Albanian Daily News reported Saturday. Albania has been monitored since 1997 for the implementation of the recommendations decided by the Committee. John Ringguth, Executive Secretary of Moneyval said that “since 2011 and to this week, when Albania reported the steps that have been taken so far, we were able to come to the conclusion that the progress reached by Albania was good, equal to the wide compatibility range.”
Brazil August tax collection falls to 5-year low August tax receipts by Brazil’s federal government were the lowest in five years, the country’s tax authorities said on Friday, as the worst economic downturn since the 1930s reduced taxable activity. Tax collection in the month fell 9.32 percent compared with a year earlier to 93.7 billion reais (US$23.8 billion), the biggest year-on-year decline so far this year. Brazil’s government has been struggling to cut spending and raise taxes sufficiently to close a budget shortfall and convince ratings agencies that its debt, essential to maintaining government spending, should receive an investment-grade rating.
Pope Francis (L) waves as he arrives, accompanied by Cuba’s President Raul Castro, at the airport in Havana. Pope Francis arrived in Cuba at the start of an historic nine-day trip that is also set to take him to the USA
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he United States announced new rules on Friday to further ease trade, travel and investment restrictions with Cuba, but Cuban President Raul Castro told President Barack Obama that Washington should go even further and lift its economic embargo on the Communist-ruled island. The rare phone call between the two leaders followed the unveiling of changes that will allow certain U.S. companies to establish offices in Cuba, expand banking and Internet activities and eliminate limits on the amount of money that can be taken there, U.S. officials said. Despite Castro’s appeal, the broader 53-year-old U.S. embargo will remain in place, and only Congress can remove it - something majority Republicans are considered highly unlikely to do anytime soon. Aides to Obama touted the latest steps, which he implemented with his executive powers in defiance of critics in Congress, as a way to boost business and promote economic and political reform in Cuba. They also mark Obama’s continuing effort to chip away at the embargo since a thaw. Critics of Obama’s detente slammed the move as another reward to Cuba with no corresponding concessions from Havana, especially on the human rights front. The changes, while significant, stop short of allowing across-theboard investment by U.S. companies or general U.S. tourism, activities banned under the embargo itself. They come as Washington and Havana inch toward normal relations after more than half a century of hostility that followed Cuba’s 1959 revolution. The two countries restored diplomatic ties and reopened embassies earlier this summer. Speaking for the first time since their historic meeting in Panama in April, Obama and Castro discussed ways to advance the normalization process, including steps they “can take together and individually,” the White House said in a statement. In a separate statement released almost simultaneously in Havana, the Cuban government said: “President Raul Castro stressed the
need to deepen the reach (of the new regulations) and to eliminate definitively the blockade policy, for the benefit of both countries.” Both governments lauded Pope Francis for his role in facilitating rapprochement late last year between the two former Cold War foes. The pope visited Cuba last weekend before heading to the United States this week. The new U.S. regulations build on others Obama announced in January to begin lowering economic barriers with Cuba. Obama’s term ends at the start of 2017 and his unilateral steps to loosen the embargo also appear aimed at advancing normalization with Cuba far enough that any future Republican president would be unable to reverse it.
A stronger, more open U.S.-Cuba relationship has the potential to create economic opportunities for both Americans and Cubans alike Jacob Lew, U.S. Treasury Secretary
Call in Cuba’s court
U.S. officials said the full impact of the eased restrictions will depend on whether Cuba makes economic reforms of its own. Some White House aides have privately accused Havana of dragging its feet on such changes for fear of losing its grip on the state-run economy and Cuban society. Castro’s government, while working to improve ties, has repeatedly made clear that full normalization will require complete lifting of the embargo and the return of the U.S. naval base at Guantanamo Bay on the eastern tip of the island. The initial reaction from the American business community was cautious. U.S. companies have shown interest in exploring opportunities in Cuba, but many executives remain wary of the risks. The two countries’ outstanding legal claims against each other remain a key source of uncertainty. Bacardi, the world’s largest privately held spirits maker, was among the most successful companies in Cuba before its Cuban assets were seized by the government and its founders exiled in the 1960s. The company said on Friday it was “way too early” to talk about any possible return to the island. “We will need to wait and see what the impacts are,” Bacardi said in a statement.
American Express said it was “planning on initiating business activities in Cuba” but said it did not have a timeline. Seth Eisen, a spokesman for MasterCard, said: “People (are) starting to think about the market, and it will take time for the infrastructure to develop, from phone lines to Internet access to the terminals themselves.” Sprint Corp said it would expand mobile-phone roaming service to Cuba. But Starbucks Corp said it had no plans to enter Cuba. Under the rules released by the U.S. Treasury and Commerce Departments, certain companies can establish subsidiaries or joint ventures as well as open offices, stores and warehouses in Cuba. They also allow for telecommunications and Internet services between the nations. Although the regulations do not change who can travel to Cuba, the rules do ease movement of authorized travellers by licensing transportation providers. The regulations also abolish the cap on remittances and allow the travellers to open and maintain bank accounts there. But it keeps in place prohibitions on any of those funds going to the Cuban government or Communist Party officials. Reuters
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September 21, 2015
Opinion Business
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Leading reports from Asia’s best business newspapers
The data revolution for sustainable development Jeffrey D. Sachs Robert Chen
PHILSTAR The International Monetary Fund (IMF) has expressed support for the plan of the Bangko Sentral ng Pilipinas (BSP) to undertake major policy reforms to further enhance the country’s financial market operations. In its latest assessment on the Philippines after concluding its 2015 Article IV Consultation, the IMF said its executive board supports the plan of the Philippine central bank to implement an interest rate corridor to improve monetary policy transmission. BSP deputy governor Diwa Guinigundo earlier said the interest rate corridor system was part of the central bank’s long-term reform agenda, slated for implementation next year.
THE KOREA HERALD The current push to implement labour market and broader structural reforms is critical to South Korea overcoming its current economic woes, the country’s top policymaker said yesterday. Speaking to reporters at a policy seminar on Geoje Island 470 kilometres southeast of Seoul, Finance Minister Choi Kyung-hwan pointed out that South Korea had always faced obstacles as it grew economically and now was no different. He cited problems facing China and lingering uncertainties about the U.S.’ stance on interest rates as some of the issues confronting the country.
THE ASAHI SHIMBUN China and South Korea expressed concern September 19 over the passage of contentious security legislation in Japan and called on Tokyo to continue to act with caution and respect the pacifist Constitution in future military endeavours. “The passage of the security legislation by the Japanese Diet is an unprecedented move taken by post-war Japan in the military and security fields,” the Chinese Foreign Ministry said in its comment issued under the name of Hong Lei, deputy director of the Department of Information.
THE STRAITS TIMES Nearly three in 10 Singapore workers expect to receive “a lot less income” in retirement than they do today, according to a new survey. Many workers also expect to rely less on family members for retirement support, according to the survey on retirement attitudes. This Global Aging Institute and Prudential survey polled 750 household “main earners” aged 20 and above in Singapore, both currently working and retired. It was part of a wider survey across East Asia. Some 28 per cent of the respondents now working expect to have “a lot less income”.
Professor of Sustainable Development, Director of the Centre for International Professor of Health Policy and Management, Earth Science Information Network (CIESIN) and Director of the Earth Institute at Columbia University
Enrico Giovannini Shaida Badiee Professor at University of Rome Tor Vergata
Managing Director and co-founder of Open Data Watch
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here is growing recognition that the success of the Sustainable Development Goals (SDGs), which will be adopted on September 25 at a special United Nations summit, will depend on the ability of governments, businesses, and civil society to harness data for decision-making. The key, as I have highlighted before, is to invest in building innovative data systems that draw on new sources of real-time data for sustainable development. We live in a data-driven world. Advertisers, insurance companies, national security agencies, and political advisers have already learned to tap into big data, sometimes to our chagrin; so, too, have countless scientists and researchers, thereby accelerating progress on new discoveries. But the global development community has been slower to benefit – not least because too much development data are still being collected using cumbersome approaches that lag behind today’s technological capabilities. One way to improve data collection and use for sustainable development is to create an active link between the provision of services and the collection and processing of data for decision-making. Take health-care services. Every day, in remote villages of developing countries, community health workers help patients fight diseases (such as malaria), get to clinics for check-ups, receive vital immunizations, obtain diagnoses (through telemedicine), and access emergency aid for their infants and young children (such as for chronic under-nutrition). But the information from such visits is usually not collected, and even if it is put on paper, it is never used again. We now have a much smarter way to proceed. Community health workers are increasingly supported by smart-phone applications, which they can use to log patient information at each visit. That information can go directly onto publichealth dashboards, which health managers can use to spot disease outbreaks, failures in supply chains, or the need to bolster technical staff. Such systems can provide a real-time log of vital events, including births and deaths, and even use so-called verbal autopsies to help identify causes of death. And, as part of electronic medical records, the information can be used at future visits to the doctor or to remind patients of the need for follow-up visits or medical interventions.
Through more effective use of smart data – collected during service delivery, economic transactions, and remote sensing – the fight against extreme poverty will be bolstered; the global energy system will be made much more efficient and less polluting; and vital services such as health and education will be made far more effective and accessible
Education provides the same kind of vast opportunity. Currently, school enrolment rates tend to be calculated based on student registrations at the beginning of the school year, even though actual attendance may be far below the registration rate. Moreover, officials wishing to report higher enrolment rates sometimes manipulate registration data, so we never get an accurate picture of who is actually at school. With mobile apps, schools and community education workers can log student and teacher attendance on a transparent, real-time basis, and follow up more easily with students who drop out, especially for reasons that could be overcome through informed intervention by community education workers. This information can be fed automatically into dashboards that education administrators can use to track progress in key areas. Such data collection can accelerate sustainable development by improving decision-making. But that is only the first step. The same techniques should also be used to collect some of the key
indicators that measure progress on the SDGs. In fact, measuring progress at frequent intervals, and publicizing the successes and shortfalls, is vital to keeping the world on track to meet its ambitious longterm targets. Doing so would not only enable us to reward governments that are fostering progress; it would also keep laggard governments accountable for their weak performance and, one hopes, motivate them to redouble their efforts. The need for such real-time measurement became apparent over the last 15 years, when the world was pursuing the Millennium Development Goals. Given that many key indicators are not yet collected in real time, but only through laborious retrospective household surveys, the indicators for the key povertyreduction goal are as much as five years out of date for many countries. The world is aiming for 2015 targets for poverty, health, and education, with, in some cases, key data only up to 2010. Fortunately, the information and communications technology revolution and the spread of broadband coverage nearly
everywhere can quickly make such time lags a thing of the past. As indicated in the report A World that Counts: Mobilizing the Data Revolution for Sustainable Development, we must modernize the practices used by statistical offices and other public agencies, while tapping into new sources of data in a thoughtful and creative way that complements traditional approaches. Through more effective use of smart data – collected during service delivery, economic transactions, and remote sensing – the fight against extreme poverty will be bolstered; the global energy system will be made much more efficient and less polluting; and vital services such as health and education will be made far more effective and accessible. With this breakthrough in sight, several governments, including that of the United States, as well as businesses and other partners, have announced plans to launch a new “Global Partnership for Sustainable Development Data” at the UN this month. The new partnership aims to strengthen data collection and monitoring efforts by raising more funds, encouraging knowledge-sharing, addressing key barriers to access and use of data, and identifying new big-data strategies to upgrade the world’s statistical systems. The UN Sustainable Development Solutions Network will support the new Global Partnership by creating a new Thematic Network on Data for Sustainable Development, which will bring together leading data scientists, thinkers, and academics from across multiple sectors and disciplines to form a centre of data excellence. We are delighted to be chairing this network, which has at its core a commitment to turn facts and figures into real development progress. We firmly believe the data revolution can be a revolution for sustainable development, and we welcome partners from around the world to join us. Project Syndicate
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Closing More Chinese choose to click and donate
German opposition parties rise in poll
China’s social media have become the main channel for the public make charitable donations, a report showed. Among the total of 104 billion yuan (about US$160 million) donations China received in 2014, about 61 percent were made through Weibo and Wechat, according to a report released by the China Charity and Donation Information Centre, which is under the Ministry of Civil Affairs. Popular online charity platforms run by Sina, Tencent and Alipay, gathered 428 million yuan, up 42.6 percent from the figure in 2013. Experts attribute the trend to an increasing amount of commercial activity through social media.
Support for two German opposition parties not represented in parliament rose as criticism of Chancellor Angela Merkel’s handling of Europe’s refugee crisis mounted. Backing for the Free Democrats, Merkel’s former coalition partner, and the anti-euro Alternative for Germany party each increased 1 percentage point to 5 percent in a weekly poll, the Bild am Sonntag reported, citing an Emnid poll it commissioned. The threshold for parliamentary representation is 5 percent of the votes. All parties represented in the lower house of parliament shed 1 percentage point, with Merkel’s Christian Union bloc dropping to 40 percent.
Turnbull unveils Australian cabinet in break with Abbott past Turnbull told reporters in Canberra yesterday his new team would be a “21st century government and a ministry for the future”
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ustralian Prime Minister Malcolm Turnbull announced a new ministerial line-up, promoting women and younger lawmakers as he seeks to refresh the government by removing figures loyal to his predecessor, Tony Abbott. Scott Morrison, 47, was named treasurer, charged with creating an economic narrative for shoring up growth in the post-mining boom economy. Marise Payne, 51, became the country’s first female defence minister, and will oversee plans for a new fleet of submarines. Kelly O’Dwyer, 38, was appointed assistant treasurer and minister for small business as Turnbull boosted the number of women in cabinet to five from two. “There was a sense that he needed to freshen the ministry,” said Haydon Manning, a politics professor at Flinders University in Adelaide. “Turnbull is addressing the perception that women are unwelcome in a coalition government. But he also had to tread
Australian Prime Minister Malcolm Turnbull speaks to the media during a press conference at Parliament House in Canberra yesterday. Turnbull announced his new ministry, which is expected to be sworn-in 21 September.
carefully as the party has a lot of wounds and the last thing he can afford is sniping from disaffected conservatives.”
Leadership spill
Turnbull is seeking to overhaul the government as he attempts to turn around slumping poll ratings ahead of elections due in late 2016.
At the same time, he must avoid worsening divisions within the party and appease a large group of lawmakers who voted for Abbott to stay in the top job. Julie Bishop, the Deputy Prime Minister who turned against Abbott and stood with Turnbull in the ballot, remains foreign minister. Joe
Hockey, 50, who had served as Treasurer under Abbott, didn’t seek a position in the new Cabinet and will quit parliament after almost 20 years as a lawmaker, he said in an e-mailed statement. Four other members of Abbott’s Cabinet were dumped. They were Defense Minister Kevin Andrews,
Abe Cabinet’s approval rate falls HK immigration director vows after security bill passed to attract more talent
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he approval rate for Japanese Prime Minister Shinzo Abe’s Cabinet fell to 38.9 percent after the enactment of the controversial security bills, a recent poll result showed yesterday. According to the poll conducted by Japan’s Kyodo News Agency on Saturday and yesterday, the support rate for Abe Cabinet was down 4.3 percent from 43.2 percent in the previous survey in mid-August. While the disapproval rate increased to 50.2 percent from 46.4 percent. Regarding the security bills, which would allow Japanese troops to flight abroad even Japan itself is not attacked, 79 percent of respondents said there were not enough deliberations in the Diet. Only 14.1 percent people believed the Diet sufficiently deliberated the bills. About 68 percent of the respondents said the new legislation will increase the risk of Japanese troops getting involved in an armed conflict, while only 2.5 percent said it will lower such a risk and 27.1 percent believe the new laws will have no effect on the possibility of the troops being dragged into a war. Xinhua
Employment Minister Eric Abetz, Industry Minister Ian Macfarlane and Small Business Minister Bruce Billson. Trade Minister Andrew Robb, Finance Minister Mathias Cormann and Environment Minister Greg Hunt were among those to retain their roles. Other ministerial appointments include Christopher Pyne as industry, innovation and science minister; Michaelia Cash as employment minister; Simon Birmingham as education minister; Christian Porter as social services minister; Arthur Sinodinos as Cabinet secretary and Josh Frydenberg as resources, energy and northern Australia minister. Abbott had faced criticism for having too few women in his Cabinet and keeping older ministers who’d served in the previous coalition government that ended in 2007. The result was a ministry that was supposed to look experienced, instead came across as out of date. Bloomberg News
KPMG reviews Swiss auditing unit over FIFA
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ong Kong needs a vast number of talents and its Immigration Department will work to attract talents worldwide through continuously optimizing the immigration policy, Hong Kong’s Director of Immigration Chan Kwokki said. “Sufficient and high-quality talents is the primary condition of Hong Kong’s social and economic development,” Chan told Xinhua in a exclusive interview. It is estimated that Hong Kong’s labour force will decline around 2018, which will directly influence the competitiveness of this region, he said. “In order to attract more talents and professionals from all over the world, the Immigration Department will strive to optimize the immigration policy.” According to the director, the department has tailored different policies to attract different talents, including the General Employment Policy, Admission Scheme for Mainland Talents and Professionals, Quality Migrant Admission Scheme, Immigration Arrangements for Non-local Graduates and Admission Scheme for the Second Generation of Chinese Hong Kong Permanent Residents.
uditing firm KPMG has launched an internal review of its Swiss business over audits of world soccer body FIFA’s financial record keeping, according to a Swiss newspaper. KPMG Switzerland spokesman Andreas Hammer told SonntagsZeitung that services the Swiss unit performed for FIFA were being reviewed, as agreed with its parent company, KPMG International. The U.S. Department of Justice and the Swiss Attorney General’s Office are investigating alleged corruption within FIFA after the indictment of 14 senior soccer officials and sports marketing executives in May. Last week, FIFA put Jerome Valcke, its second-ranking official, on leave after an exfootballer raised allegations he was involved in a plan to resell 2014 World Cup tickets for a lucrative profit. Since 1999, KPMG Switzerland has been responsible for auditing FIFA’s financial reports, SonntagsZeitung reported. Should it discover irregularities during such a review, an auditor is bound by law to report them.
Xinhua
Reuters