MOP 6.00
Helping Hand
Closing editor: Joanne Kuai
More policies from Beijing. Designed specifically to support Macau’s economic adjustment. Li Gang, director of the Chinese govt’s local liaison office, says initiatives will be revealed soon. Casino stocks spiked on the news
Year IV
Number 891 Monday October 5, 2015
Publisher: Paulo A. Azevedo
Page 5
Gaming Revenue at 5-year Low
Gross gaming revenues in Macau fell by a third. To MOP17.13 billion (US$2.15b) in September, the Government to 16th consecutive month of y-o-y decline. Local gaming operator SJM Holdings tops market share temporarily renew Canidrome concession at 21.7 pct. With Sands China and Galaxy Entertainment Group neck and neck. Analysts expect Page3 gaming revenues for October to decline about 27 pct y-o-y Page
4
Chinese Tobin
MGM’s solution to trouble in Macau: Treat masses like VIPs
Page 6
Analysts explore new indicators for more accurate vision of China’s economy
The yuan is opening to market forces. While Beijing seeks to limit speculation. Yi Gang says a ‘Tobin tax’ is under consideration. With a non-interest bearing reserve requirement and foreign exchange trading fees
Page 10
Oil market will be impacted by new Chinese contract on futures
Page 11
Page 10
Rainbow Worrier Flights were cancelled or delayed. Ferries between Macau and Shenzhen suspended. And events plunged into disarray, courtesy of Typhoon Mujigae (Typhoon Rainbow). Dozens of incidents were reported. But no injuries as at the end of the weekend
Page 2
www.macaubusinessdaily.com
Theatre of life Local art and culture. Not yet an industry says Macau actor Vong Tin Ian. The Hong Kong-based thespian tells Business Daily that the prevailing mindset has to change. And that gov’t support is essential for local theatre groups to grow. They have to provide more than entertainment, he says. Nurturing the emotions, with co-operation between art and education a starting point
HSI - Movers October 2
Name
%Day
Galaxy Entertainment
+10.15
China Resources Land
+8.70
China Overseas Land &
+6.84
China Mengniu Dairy C
+6.62
AIA Group Ltd
+6.24
CLP Holdings Ltd
+0.23
Link REIT
+0.12
Power Assets Holding
-0.14
Sun Hung Kai Propertie
-0.40
Li & Fung Ltd
-1.52
Source: Bloomberg
I SSN 2226-8294
Pages 8 & 9 2015-10-5
2015-10-6
2015-10-7
24˚ 28˚
25˚ 30˚
25˚ 31˚
2 | Business Daily
October 5, 2015
Macau Macau Recyclers Association ends strike
L
ocal recyclers resumed the recycling of waste last Friday following a six-day strike. Director Chan Man Lin said in a press briefing last Thursday that the government had followed up on the recyclers’ demands as a result of the launch of the industrial action. Mr. Chan said the Association still hopes the authorities can lease land plots to the local recycling industry in order to improve the business environment of the operators. The Association started its strike on September 26, claiming the industry lacked government support in dealing with surging rents, high manpower costs and low material returns.
Typhoon Mujigae disrupts flights and ferries
T
yphoon Mujigae (rainbow in Korean) disrupted Macau’s transport services during the weekend, causing flights and ferry trips to be cancelled. Other incidents caused by the heavy storms included flooding and falling trees. According to local ratio station TDM, from Saturday 6.30 p.m., when signal number 3 was hoisted, until yesterday some 20 incidents were reported. No injuries were caused. Due to the typhoon, TurboJet was forced to cancel ferry connections between Macau and Shenzhen,
including ferries bound for the Mainland airport. The company controlled by Shun Tak also had to suspend maritime connections between Taipa Temporary Ferry Terminal and Hong Kong. Services for Cotai Water Jet, however, were unaffected. Ferries departing from the Outer Harbour Ferry Terminal to Sheung Wan Ferry Terminal, in Hong Kong, were not affected by Typhoon Mujigae. Yesterday, Air Macau was forced to cancel flights to Nanning (NX196) and Chengdu (NX190), among many
delayed connections. Yesterday’s China Eastern’s flight from Macau to Hangzhou (MU264) was also cancelled. On Saturday, Air Macau was forced to cancel flights to Taipei (NX608) and Bangkok (NX880). According to information from Macao Meteorological and Geophysical Bureau, Typhoon Rainbow made landfall at 2.00 p.m. yesterday, near Zhangjiang. In Macau, signal number 3 was hoisted on Saturday at 6.30 p.m. and continued hoisted during yesterday by the time the story went to press. Heavy rains at times are still expected today.
Chui: Still cautiously optimistic
C
hief Executive (CE) Fernando Chui Sai On said he is cautiously optimistic about the city’s economic prospects, anticipating that the local economy will remain positive and steady next year. The CE stressed to reporters on the sidelines of an event celebrating National Day last Thursday that the government was financially stable, claiming a modest fiscal surplus would be posted for the year.
He also said that his government would obey the Basic Law in keeping its expenditure within its revenues, as well as reconsidering any nonessential expenditure given the current gaming downturn Asked by reporters about the government plan to invest in infrastructure projects on Mainland China, the CE claimed that none of the city’s fiscal reserves had been spent yet. He added that the
government would submit proposals to the Legislative Assembly once such projects are initiated. Commenting on UnionPay’s new restriction on annual cash withdrawal limits for card users outside the Mainland, Mr. Chui said the government would collaborate on the new guidelines, as well as closely observing any changes in tourists’ consumption behaviour in the territory.
‘Experience Macau’ at Grand Central Terminal in New York City
M
acau Government Tourist Office (MGTO) staged a large-scale roadshow themed ‘Experience Macau’ at Grand Central Terminal, a famous landmark in New York City. The Office is striving to attract more international visitors to Macau via promotional projects rolled out in visitor source markets. This is the first grand roadshow presented by MGTO in New York City, in the United States. To reach out to a broader range of local residents and visitors for a wider promotional effect, the four-day event took place in Vanderbilt Hall in Grand Central Terminal, the city’s humming major railroad station. The roadshow showcases Macau as a travel destination brimming with blended cultures from East and West, and features a variety of highlights from delicacies to stage performances to demonstrations of Chinese silhouette paper-cutting to an art gallery and workshops to a photo booth for cultural experiences. MGTO said that last year Macau welcomed over 180,000 visitors from the United States, which ranked as its tenth largest source market. From January to August, the total number of visitor arrivals posted a record 20 million, of whom some 1.76 million visitors came from international markets.
Business Daily | 3
October 5, 2015
Macau
Government to temporarily renew Canidrome concession The Executive will allow the Canidrome to keep running until the University of Macau study on the subject is finished João Santos Filipe
jsfilipe@macaubusinessdaily.com
T
he Executive of Macau has decided to ‘temporarily’ extend the concession for Macau (Yat Yuen) Canidrome Co. to exploit greyhound racing, which was set to expire on December 31 of this year. The decision was confirmed by the Secretary for Economy and Finance Lionel Leong in a press statement. “The government is planning to temporarily renew the concession for the Canidrome without any changes to the terms of the existing contract. However, no decision has been made concerning the extension of this renewal”, said Lionel Leong Vai Tac in a statement published last Thursday night. Concerning a final decision to renew or scrap the existing concession for Macau (Yat Yuen) Canidrome, the government will wait for the results of the study requested from the University of Macau. This study will focus on the importance and influence of the Canidrome on the territory as a World Centre for Tourism and Leisure
and is expected to take around one year to complete. “The decision will be well justified. The government requested an independent university to conduct a study on the subject, which will begin this month. After the study is completed there will be an internal analysis to take a decision. The results are expected to take one year”, he announced. “The Canidrome needs
time to deal with its workers and greyhounds”, he added. The government also stressed that the “opinion of the residents and businessmen” near the installations of the Canidrome will be taken into account.
Vigil to close down Canidrome
The temporary extension was announced the day after ANIMA
(Society for the Protection of Animals) held a candlelight vigil in Macau requesting the government to close down the Canidrome and to use the land for the community. The campaign to close down the Canidrome was joined by other similar actions in 26 towns in 10 countries, including the USA, UK, Ireland, German, Italy and Spain, among others. During the first half of the year the revenue from greyhound racing amounted to MOP66 million (US$8.27 million), a decrease of MOP4 million versus the first half of last year, when revenue stood at MOP70 million. In 2014, the Canidrome generated MOP145 million in revenue out of the MOP352.71 billion generated by the whole of the gaming industry in Macau, which represents less than 1 per cent. Legislator and Executive Director of SJM Holdings, Angela Leon On Kei, is the managing director of the company exploiting the Canidrome.
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4 | Business Daily
October 5, 2015
Macau
Gaming industry posts revenues of MOP17.13 bln in September The gaming industry recorded its lowest revenue in almost 5 years for the past month João Santos Filipe
jsfilipe@macaubusinessdaily.com
On the other side, from October on, and until the end of the year, overseas withdrawals with UnionPay cards issued in Mainland China are limited to RMB50,000. While this impact may be limited, as mentioned before by Deutsche Bank, it may end up hitting the mass market. As these factors are taken into account, analysts are expecting gaming revenues to decline around 27 per cent year-on-year. The latest report from Wells Fargo Securities forecasts gaming revenues at somewhere between a decline of 27 and 31 per cent. For its part, Deutsche Bank expects revenue to dip around 27 per cent.
SJM back on top
G
aming revenues sank 33 per cent year-on-on year to MOP17.13 billion (US$2.15 billion) in September from MOP25.56 million a year ago. According to Gaming Inspection and Co-ordination Bureau (DICJ) data, last month recorded the lowest revenue in almost five years.
The previous time gross gaming revenue (GGR) had been lower than MOP17.13 billion was in September 2010, when revenues totalled MOP15.30 billion. However, at that time the sector was expanding at 39.8 per cent year-on-year.
Now, for the first nine months of this year, casinos have raked in MOP176.02 billion, down 36.2 per cent in comparison to January to September last year. Considering this period in 2014, the industry generated MOP275.94 million. Beside the effects of the anticorruption campaign in Mainland China initiated by President Xi Jiping the industry has also been struggling with the economic slowdown of the Mainland economy and decrease in the number of Mainland Chinese visitors to the territory.
Mixed signs
With regard to the current month, new and contradictory factors are influencing the sector. On the bright side, the People’s Republic of China Government has voiced its support for the industry and as an immediate consequence the stock prices of casinos went up. Also, on 27 October, the new resort and casino of Melco Crown Entertainment, Studio City, will start to operate.
The good news for SJM Holdings is that the company founded by King of Gambling Stanley Ho is back at the top of the market with a share of 21.7 per cent, according to data complied by Business Daily. Prior to September, the last time SJM had ‘won’ the market share race was in March with a share of 23.2 per cent. The mass market oriented strategy has been paying dividends for Sands China this year but during the last month the company has only secured second position in terms of share with 21.3 per cent. The company controlled by American billionaire Sheldon Adelson sits marginally in front of Galaxy Entertainment Group, which recorded a share of 21.2 per cent The opening of Studio City in late October is an opportunity for Melco Crown to increase its market in Macau although for September the company assumed fourth place, with 14.5 per cent. The operators occupying the bottom of the list were MGM China, which recorded a share of 11.2 per cent of revenues, and Wynn Macau, which took 10.2 per cent.
September gaming revenues market share November
December
January
February
March
April
May
June
July
August
September
SJM
23.5%
22.6%
23.6%
21.9%
23.1%
23.2%
21.7%
21.9%
21.8%
20.3%
21.8%
21.7%
Sands China
23.7%
22.5%
20.7%
20.4%
23.3%
21.4%
24.1%
26.5%
22.6%
23.8%
25.2%
21.3%
Galaxy
21.4%
21.5%
20.2%
22.5%
21.5%
20.1%
20.0%
18.5%
22.2%
22.6%
21.2%
21.1%
MPEL
14.3%
13.4%
14.9%
14.7%
14.4%
13.9%
12.8%
14.2%
14.4%
14.2%
13.5%
14.5%
MGM
8.2%
11%
10.5%
10.1%
9%
10.2%
9.6%
9.1%
10.2%
9.7%
8.9%
11.3%
Wynn
8.9%
9%
10.2%
10.4%
8.6%
11.2%
11.8%
9.8%
8.8%
9.4%
9.4%
10.1%
Total
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Lippo: Interim profits affected by fair value loss
H
ong Kong-listed property developer Lippo Ltd. says its net profit for the six months ended September 30 this year will be negatively affected by an unrealised fair value loss. The developer said in a profit warning to Hong Kong Stock Exchange on Friday that its financial instruments at fair value through profit or loss would record an unrealised net fair value loss of approximately HK$186 million compared to the net fair value gain of HK$14 million one year ago. ‘Such unrealised fair value loss was mainly attributable to the substantial downturn
Source: Business Daily
October
Birmingham Int’l narrows loss to HK$4.16 million
in the global stock markets in the third quarter of 2015. The Board expects that such unrealised fair value loss would have a negative impact on the consolidated interim results of the Group for the six months ended 30th September,’ the company wrote. According to the filing, Lippo’s interim results will be announced in late November. For its last fiscal year ended March 31, the property developer’s net profit jumped 392.3 per cent year-on-year, totalling HK$522.2 million from HK$112.2 million in 2013. K.L.
B
irmingham International Holdings posted a net loss of HK$4.16 million (US$520,125) attributable to owners of the company for the year ended June 30 this year. Despite the loss, the company made a significant improvement from last year’s net loss of HK$157.4 million. According to the company’s filing with the Hong Kong Stock Exchange by its receivers on Friday, turnover for the year remained stable at HK$254 million versus HK$253 million in 2013. The filing indicated that nearly the total turnover of the company was contributed by its football operation business in the
United Kingdom, where it controls England football team Birmingham City. The football team generated profits of HK$16 million for Birmingham International for the year from a loss of HK$92 million in 2013. Such improvement in result was mainly driven by better performance of football players during the reporting period and conservative spending, in particular, staff costs, the receivers of the company said. The improvement in the football operation business also helped the company to narrow its net loss, according to the filing. The Hong-Kong listed company has been in
receivership since February this year, following the trading in shares of the Group being halted in December last year and February due to the management fight for power. In fact, the problems of Birmingham International Ltd. started at the beginning of last year when its former chairman and executive director Carson Yeung Ka Si was convicted on five counts of money laundering and sentenced to six years imprisonment. A ruling by Hong Kong’s top court in August this year, however, freed the Hong Kong businessman from jail, granting him the right to appeal against his conviction. K.L.
Business Daily | 5
October 5, 2015
Macau
Li Gang: China to announce policies supporting local economy Against the backdrop of the gaming downturn, Beijing’s representative in the territory says supportive measures for Macau, especially for the gaming industry, are in the works Kam Leong
kamleong@macaubusinessdaily.com
T
he director of the Chinese Liaison Office in Macau, Li Gang (pictured), revealed last week that the Chinese central government would introduce more polices to support the city’s economy, several of which will be related to the gaming industry. Talking to reporters on the sidelines of an event celebrating the 66th anniversary of the establishment of the People’s Republic of China last Thursday, the Chinese official, however, did not elaborate on the possible effective measures that would be introduced by the Chinese authorities. Nevertheless, indicating some policies are also to boost the local tourism industry, Mr. Li told reporters that they would be similar to the recent easing of transit visa restrictions for the city’s Mainland Chinese tourists which enables them to spend seven days in the territory rather than five. Asked by reporters whether the central government would allow tourists from more Mainland cities to travel to Macau under the Individual Visit Scheme (IVS), Chinese officials said it would depend upon the city’s tourism capacity, local government studies and public opinion.
the downturn of the local gaming industry is primarily due to the overall economic situation, claiming the central government’s anti-graft policy and restrictions on UnionPay are only some of the factors.
Administrative area to expand
But he stressed that the city needs to improve the quality of tourists over quantity. “Gross gaming
revenues would not be dragged up by increasing the number of [tourists] only,” local broadcaster
Wynn leads casinos’ rise as China signals support for Macau
W
ynn Resorts Ltd. rose the most in more than six years, leading casino stocks higher following a report that the Chinese government plans steps to revive the flagging gambling industry in Macau, where betting has been in freefall. Wynn, which generated 70 per cent of its revenue in the region last year, jumped 23 per cent to $63.52 at the close in New York, the biggest one-day gain since April 2009. Las Vegas Sands Corp. rose 11 per cent to $40.87, while MGM Resorts International advanced 6 per cent to $19.79. Their Hong Kong- listed subsidiaries also rose. Macau’s casino-dependent economy has been suffering from an economic slowdown in China and a campaign against corruption,
with gambling revenue in the betting enclave dropping for 16 straight months. Li Gang, director of the China’s local liaison office, said the government will introduce support policies by the end of this year. “Any potential measures to help Macau’s visitation could be a great boon for the industry, as casual gamblers are now becoming the key pillar of the industry profits in the midst of VIP weakness,” DS Kim, an analyst at JPMorgan Chase & Co., wrote in a note. Gross gaming revenue in Macau fell by a third in September. Results released Thursday showed casino revenue declined 33 per cent to MOP17.1 billion (US$2.2 billion) in September. Bloomberg
TDM Radio quoted Mr. Li as saying. In addition, the Liaison Office director perceives that
Meanwhile, Mr. Li said the Chinese government would demarcate both land and maritime boundaries for the Special Administrative Region within this year. “Following that, the total area that the local government owns the jurisdiction of would be expanded a few times. Meanwhile, it can develop more projects [in the new administrative area]. This is very likely to happen,” the Liaison office head told reporters. Chief Executive Fernando Chui Sai On told reporters at the same event last Thursday that he believes the clarification of the jurisdiction of customary waters would strengthen the city’s efforts to diversify its economy and expand its non-gaming tourism elements. He confirmed that the government had submitted its request for the administrative rights over the city’s customary waters to Beijing last week.
6 | Business Daily
October 5, 2015
Macau
MGM’s solution to trouble in Macau: treat masses like VIPs The US$3 billion MGM Cotai, being built by MGM China Holdings Ltd., will devote more space than the existing MGM Macau to mass-market gamblers
F
aced with a slump that’s shaved almost US$14 billion in revenue from the world’s largest gambling market, MGM Resorts International is making its second casino in Macau a lot friendlier to the average tourist and casual gambler. The US$3 billion MGM Cotai, scheduled to open in the fourth quarter of 2016, will feature smaller rooms for VIPs, the high- rollers whose absence from Macau’s casinos has led to the plunge in gambling, Chairman and Chief Executive Officer Jim Murren said in an interview. The property, being built by MGM China Holdings Ltd., will devote more space than the existing MGM Macau to mass-market gamblers, Murren said in an interview Monday. MGM and other resort owners in Macau are coming to grips with a changing market and more challenging economic climate, even as they prepare to open posh new properties on the area’s Cotai Strip. For years, the casinos relied on junket operators who brought in bigspending clients from mainland China and lent them money to play baccarat in private VIP areas. While junkets played a critical role in Macau’s gambling boom, their importance has waned as high-rollers cut back. The company is looking to bring in
Murren said he isn’t sure how many betting tables MGM Cotai or rivals building new projects such as Wynn Resorts Ltd. will be allocated by the government. The MGM project was originally slated to feature 500 tables
more big-money gamblers on its own, Murren said. “The junkets held such tremendous influence, those older junket rooms were very large and you’d go in and see a bunch of empty tables because they demanded them,” said Murren, who is co-chairman of the 51 per
cent-owned MGM China unit. “The junket rooms will be smaller. It allows you to use tables more productively.” While the VIP rooms in MGM Cotai may be smaller, the property is 1 million square feet larger than the MGM Macau. Taking cues from Chinese government officials looking to diversify Macau’s tourism revenue, MGM Cotai will have a theater that can be converted quickly into a nightclub, concert or ballroom space, and a mall lined with restaurants, landscaping and video effects, Murren said. “It’ll be an indoor space that will feel very outdoor,” he said. Casino betting in Macau has fallen for 16 months, amid a government crackdown on corruption and a slowing Chinese economy. Results released Thursday showed casino revenue declined 33 per cent to MOP17.1 billion (US$2.2 billion) in September. Investors, who have driven down shares of U.S. casino companies operating in Macau, were relieved it wasn’t worse. The Macau numbers, and a report China may move to support the city’s economy further, boosted casino stocks. MGM Resorts advanced 6 per cent to US$19.79 at the close Friday in New York. Las Vegas Sands rose 11 per cent to US$40.87, while Wynn Resorts Ltd. surged 23 per cent to US$63.47.
Their Hong Kong-listed units jumped as well. MGM China was up 6.1 per cent to HK$9.52 on Friday. Sands China Ltd. climbed 6.2 per cent to HK$24.75, and Wynn Macau Ltd. gained 7.4 per cent to HK$9.43. Meanwhile, a US$27 billion surge in property openings has begun. Galaxy Entertainment Group Ltd. unveiled the first of the new hotel-casinos in May, including an area modeled after New York’s Broadway theater district. Melco Crown Entertainment Ltd. plans to open its next resort later this month, complete with Asia’s tallest Ferris wheel. In addition to MGM, Sands China Ltd. follows next year with a property featuring a half-size replica of the Eiffel Tower. Gambling still is the big money maker, and Murren said he isn’t sure how many betting tables MGM Cotai or rivals building new projects such as Wynn Resorts Ltd. will be allocated by the government. The MGM project was originally slated to feature 500 tables. Galaxy received permission for 150 at its Galaxy Macau Phase 2 property that opened in May. Murren said he remained confident in the future of the business there. “Is there any reason why the central government would desire Macau not to grow longer term?” he asked. “I can come up with none.” Bloomberg
Business Daily | 7
October 5, 2015
Macau
NagaCorp gaming revenues surge 47 pct
C
ambodia gaming operator NagaCorp Ltd. saw its gross gaming revenues for the first nine months of this year soar some 47 per cent year-on-year, boosted by the strong growth registered in both of its mass market and VIP gaming businesses. Revealing its operational highlights for the nine months to Hong Kong Stock Exchange last Friday, the gaming operator, however, did not detail the net profits reached for the period. But it said it had raked in gross gaming revenues of a total of US$399.9 million (nearly
MOP3.2 billion) during the first three quarters of the year, which is a jump of US$128 million compared to US$271.9 million one year ago. The operator runs casino NagaWorld in Phnom Penh in the Southeast Asian country. The gross gaming revenues that NagaCorp generated in the VIP gaming market for the period totalled US$193.4 million, accounting for 48.4 per cent of its total revenues, surging 52 per cent year-on-year from US$127.4 million one year ago. VIP rollings for the three quarters jumped, as well, by 46 per cent year-on-year to US$5.94 billion,
compared to US$4.08 billion for the first nine months of 2014. Meanwhile, the Hong Kong-listed gaming operator said its gaming revenues from the mass market also registered a year-on-year growth of 43 per cent, an increase of some US$62 million to US$206.5 million, while buy-ins from mass tables totalled US$404.6 million during the period, a year-on-year increase of 16 per cent from US$349.5 million. In addition, electronic gaming machines bills-in in the market posted a year-on-year growth of 11 per cent, totalling US$986.1 million, compared to US$886.2
Caesars casino operator, creditors face off over bankruptcy date
C
reditors of Caesars Entertainment Corp’s casino business are heading to court on Monday to argue that the company has been bankrupt for three days longer than it acknowledges, and US$468 million hangs on the outcome. The battle stems from how the casino operator wound up in bankruptcy in the first place. Creditors hope to convince U.S. Bankruptcy Judge Benjamin Goldgar in Chicago that the process began on Jan. 12 in Delaware. That was the day that Appaloosa and two other hedge funds filed an involuntary bankruptcy petition against the company. Three days later, the operating unit of Caesars, which was formed by the 2008 buyout of Harrah’s Entertainment, filed its own Chapter 11 in Chicago, and the Delaware judge transferred his case to Goldgar.
The law allows creditors to attack certain transactions dated within 90 days before a bankruptcy filing so they can claw back cash. If the judge considers the Jan. 12 bankruptcy date valid, unsecured creditors could challenge an October deal granting Caesars’ senior creditors a lien on US$468 million in cash. If Caesars wins and Goldgar says the bankruptcy started Jan. 15, that October deal, which is a major part of the faltering restructuring, would be more difficult to challenge. To win their case, the unsecured creditors must prove that they were justified in filing an involuntary petition against Caesars operating unit. “It is the burden of the petitioning creditors to show that the alleged debtor was not paying its debts as they become
due,” said retired U.S. Bankruptcy Judge Bruce Markell, who teaches law at Northwestern University. “There’s no crisp line on what percentage of unpaid debts would be considered insolvent.” The dispute is one of many Caesars faces in its US$18 billion bankruptcy case. In a potentially bigger ruling, an Illinois judge is due to decide whether creditors’ lawsuits against the parent company in New York and Delaware should be stayed, overturning Goldgar’s decision in July to let the litigation proceed. The casino operator’s private equity owners, Apollo Global Management and TPG Capital Management, have been accused of illegally transferring the best properties out of creditors’ reach before the bankruptcy filing. Reuters
million during the same period of last year. In fact, NagaCorp said in its interim report released last month that the downturn in the gaming industry in the Special Administrative Region is one of the factors fuelling its gaming business in Cambodia. It posted a net profit of US$101 million during the first half of the year, while gross gaming revenues totalled US$255.4 million, representing a lift of 49 per cent and 42 per cent year-onyear, respectively, according to its September filing. K.L.
8 | Business Daily
October 5, 2015
Macau
“Long-term support scheme essential for art and culture development” Macau’s dependency upon the gaming industry alone has hindered the development of other areas, according to Macau-born actor Vong Tin Ian, who currently works full-time at a Hong Kong theatre company. Despite the government’s pledge to promote art and culture, Tin Ian says it lacks long‑term vision and a trans‑departmental co-operation strategy to foster the industry Joanne Kuai
joannekuai@macaubusinessdaily.com Photos: Cheong Kam Ka
How did you become an actor? Why get you into theatre in the first place?
I was born and raised in Macau. I left after graduating from high school. The reason I am doing theatre now is serendipity. I used to play soccer and basketball in high school and wanted to study the environment for undergraduate education. I felt that the pollution was very serious and wanted to study environmental protection to change the world. But there was this one time I had a friend who was involved in drama and theatre. He asked me to fill in because he was short of an actor for a show. I said I didn’t know anything. But he convinced me it would be fine. So I joined the show. Later on, performance opportunities kept rolling in. So I took part in a lot of shows when I was in high school. When I was about to choose my major for college, I asked myself, what do I really want to do. The experience I had had in high school performing made the goal clearer. So I took the entrance exams for many theatre schools. I was accepted by many schools but finally chose the Hong Kong Academy for Performing Arts and spent five years studying there. After graduation, I started travelling frequently between Hong Kong and Macau, taking up
many freelance jobs. In February 2014, I became a full-time actor at Chung Ying Theatre Company in Hong Kong. In Macau, I have my own theatre group. I’m the Artistic Director of Brotherhood Art Theatre in Macau.
Do you primarily focus on theatre?
Last year, I joined a TV drama in Hong Kong. The show was about gambling. Some scenes were shot in Macau. At the end of this year, the TV show will be turned into a movie. In mid-October, we’re going to re-shoot some scenes.
Did your identity as a Macau local get you the part?
No. Only when we started shooting the TV drama and chatting backstage did the crew find out I’m from Macau; also, there’s another director from Macau as well. The difference lies in that we really know about the details. Some other crewmembers may have a vague idea about the eco-system of gambling. Sometimes they have doubts about why a certain character behaves in a certain way. And I will tell them “I know this. Let me tell you”. I shared many stories about Macau. It’s interesting that I was telling a story about Macau through a production made somewhere else.
But here in Macau, the theatre groups depend on annual subsidies. We may survive for this year but have no clue whether the government will grant us the subsidy next year. Without a long-term goal, it’s hard to develop
Many stories, movies, about Macau are told, made through organisations or production companies outside of Macau. Why can’t we tell our own stories? That’s right. The reason I didn’t return to Macau to develop my career but had to stay in Hong Kong was that Macau is so one-
sided. Many areas still don’t have an industry. Many organisations and companies still have the old concept and haven’t made a breakthrough. There are many things that can be achieved through art. The companies can convey their messages through theatre groups as well. Theatre is very accessible, in the sense that music may be hard to comprehend, dancing may be too abstract, but theatre is very direct and easy to understand. The unsophisticated way is, of course, to tell you directly. But how can we make you feel so that you can understand comprises many possibilities. The Macau Government, even the educational departments, still have the old way of thinking – let’s stick to what we’ve been doing so far, or let’s do what other people are doing. There’s no innovation and it’s such a waste. There are many ways to promote an organisation, an idea. For instance, theatre will make you feel immersed and vividly see what’s going on. It gives vitality and moves people. The feelings will last for a long time and are much more effective. But this potential has not been developed yet. I can’t say it’s never been developed before but it’s always a light touch and there’s no consistency.
Business Daily | 9
October 5, 2015
Macau There’s no soil for us to grow. As an actor, when there’s no job, I can’t survive here in Macau, unlike in Hong Kong where there are more opportunities. That’s why I have to pursue my career in Hong Kong - and here in Macau I have my own theatre group and I sometimes do volunteer work for other groups during my spare time.
What kind of projects do you mean by conveying messages through theatre?
Besides commercial shows, we mainly do educational programmes. Because the regular performances usually take place during the night; during the daytime we will host small plays with themes on campuses or for other groups, such as sex education, environmental protection, depending upon what the group commission us to do. Through communicating with students and interacting with the audience, we convey the message. In recent years, this form in Hong Kong has become very popular. This is normally what theatre performers’ routine is like.
What’s your take on the current Macau theatre scene?
A theatre group in Macau can’t survive independently. There’s no long-term support scheme from the government. For example, Hong Kong Repertory Theatre has more than 30 years of history. They receive long-term support from the local authorities so that they can cultivate the audience and make efforts in education. So that in 30 years, some students watching their shows before may engage in the area or become a loyal audience so that the whole scene grows. They can make 10-year plans or 5-year plans. Only with a long-term scheme, we can cultivate talent and keep them, in order to produce good shows. But here in Macau, the theatre group depends upon annual subsidy. We may survive for this year but have no clue whether the government will grant us the subsidy next year. Without a longterm goal, it’s hard to develop. There’s always this uncertainty. We do have talent here in Macau. But they’re all amateur; not in the sense that they are not good but they can’t do it as a full-time job. It really matters. Many of them have another job to make a living and can only join theatre groups during their spare time. It’s becoming normal. On the other hand, there’s a lack of education. Every aspect is separated. Art is art. Education is education. The government doesn’t have the strategy to converge, mix or even to work together so that one aspect can benefit from the other. In Macau, the usual is more like “Hey, I have my way of doing things, don’t intervene”. There’s no system or environment to develop the art and cultural industry. I would really like to have a local brand, not for sale but simply to represent Macau to show to the outside world that we have an established theatre brand.
You spoke about Brotherhood Art Theatre . . .
Our group was established in 2010 by a group of enthusiasts. The core members have studied in different areas, such as me in acting, some studied producing, lighting, stage, etc. Having mastered the skills, the group is more mature and the goal clearer. The shows that what we put
on are very diversified. We like to do some plays that can be widely accepted by the audience, nothing too abstract. In Macau, we can’t really copy and paste the European way of theatre. The audience have a totally different upbringing. European audiences are so used to theatres and have a very different point of view and cultural education. We don’t want to do shows that just keep ourselves entertained. It would be meaningless if our audience cannot understand us. But it doesn’t mean that the shows we do are common or plain. We want to be close to the audience. We want to create something that’s based on this society, this social circle, and this living environment. For example, last time we did a play about two delivery guys getting trapped in a lift in an industrial building. This time, Field of Dreams tends to discuss the situation of local athletes. We interviewed lots of professional soccer players in Macau. The difficulties that the local athletic scene is facing are similar to those that we in the art scene are facing. Are we really short of talent? No, but the environment doesn’t allow us to pursue our dreams in our homeland - Macau. This is something close to Macau society, close to us. Every year, we also have an event for writing scripts called ‘First Script’. We have invited very good teachers from Hong Kong to conduct workshops. In the past three years, we’ve produced 13 scripts. And we’re launching a book of a collection of these scripts. It’s a document of local theatre, it’s a second life given to the script, and it’s also a record of contemporary Macau society. If you look back at these scripts in 10 years, it would reflect the current times of Macau. The time that we are living in now results in the works of the screenwriters. Maybe in 10 years when we look back, we will realise “Macau used to be like this” or “Wow, nothing’s changed at all”.
Who comprises local theatre audiences?
Audiences consist of people from different age groups but mainly from 20 to 35 year old, according to my experience and observation. Many of them are students or they started having this hobby when they were still students. It’s rare that a housewife suddenly wanders into a theatre. In Macau, there aren’t many ways to do promotion. Outdoor billboards are controlled by government who don’t necessarily need to help you promote your shows. And we don’t have that much budget to make commercial ads. We mainly use social networking, such as Facebook, which naturally have more exposure to the age group I mentioned before.
What’s the operational model of your group in terms of business? Around 60 per cent of our operational spending comes from government financial aid through the annual subsidy scheme, while 40 per cent comes from the box office. The box office is very important. Take Field of Dreams as an example: there are 1,500 seats per show, three nights in a row, selling for MOP200 or MOP180 a ticket. That’s many thousands of dollars. Of course, we thought about being independent. But if we go our own way, we will be more like a production company that may have to take up jobs that we don’t want to do. I don’t deny [the importance of] business. Some artists don’t want to get involved in business. I think there’s a balance. There are commercial sponsorships, there are government subsidies. And our core value of art wouldn’t be forced to change that much. The government subsidy really helps to relieve some financial burdens.
What do you think can help develop the industry?
A long-term support scheme from the government is crucial. We will have a group of talent and we can manage to keep them so that we can consistently put forth good shows and nurture the audience. If the government has the intention, that’s something that they should really consider doing.
Vong Tin Ian, Actor Tin Ian joined Chung Ying in 2014. Born in Macau, Tin Ian earned his Bachelor of Fine Arts (Honours) Degree in Hong Kong Academy for Performing Arts sponsored by the Macau Special Administrative Region Government. Upon graduation, he attended Theatre du Soleil in France for work study. Tin Ian is also the Artistic Director of Brotherhood Art Theatre in Macau. Performances with Chung Ying The Revenge of Local Heroes Spring Fever Hotel (35th Anniversary Version) Go Go Ghost The Last Bet of My Dead Aunt (2014 Version) Writer’s Block Exit - My Way Other Stage Performances Spiders in Meditation Prospects Theatre The Fantasticks Brotherhood Theatre (Macau) Myth of Fox Travel with Mom Nonsensemakers
The value for art cannot be quantified. It nourishes the population’s heart and soul. The Health Bureau helps us with physical health. Why shouldn’t the government pay more attention to this mental health aspect? Secondly, trans-departmental cooperation by the government can be very helpful. For example, as I mentioned before, art and education can really complement each other. The education department can commission theatre groups to perform plays and workshops. It would be a win-win situation. Besides government support, we have been putting a lot of effort into our own as well. We have to knock on people’s doors. For instance, the production team of Field of Dreams consists of around 50 people. The expenditure is tremendous. We have to ask for sponsorship. We really appreciate that a lot of people helped us with the means that they could. If we have a success this time, maybe the next time the companies would come to know that this would be a nice way to promote them and would be more willing to be involved and help us or other theatre groups as well. This business model is actually very common in Hong Kong already.
And your upcoming show in Macau . . . ?
Field of Dreams is a very inspiring story. It will be performed from 6th to 8th November in Sands Theatre. Now we’ve been busy preparing. It’s a story about dreams. The story takes place in Macau. We’ve been talking with schools as well. I think it’s a show that’s very appropriate for students. The Macau Government subsidised part of my education. That’s why I have always felt like I need to give back to Macau society. After I became a full-time actor, despite some workshops and events, I haven’t been on a stage in Macau for almost two years. I told my company in Hong Kong that I needed to be back in Macau to meet Macau audiences. I’d like to bring what I’ve learned and show it to Macau audiences as well.
10 | Business Daily
October 5, 2015
Greater China Analysts weigh alternative indicators to measure economy China's top economic planner the NDRC last week defended "the credibility of 7 percent economic growth" Julien Girault
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s once-stellar growth rates start to dip, watchers of China’s mammoth economy worry that it could be worse than it looks because the official figures might not be telling the whole story. But amid mistrust of government numbers, economists are divided over what other measurements they can use. Official growth figures last year were the slowest in nearly a quarter of a century, and dropped to seven percent in the first half of this year -- suspiciously close to government predictions. However, there is an emerging consensus among economists that real growth in China is lower. Official data is “mendacious”, said Willem Buiter, chief economist of Citigroup, who estimates the growth rate as “4.5 percent or less,” according to Bloomberg News. The median estimate proffered by eleven other economists consulted by Bloomberg was 6.3 percent. Analysts have long noted the political nature of economic statistics in China -- where the ruling Communist Party depends on growth for legitimacy. “The importance of economic performance to local officials’
evaluations historically provided a strong incentive to provide a rosy picture to higher levels of government,” Goldman Sachs said in a report this month. That means that if you add up all the growth reported by the provinces, it regularly exceeds the national rate.
The importance of economic performance to local officials’ evaluations historically provided a strong incentive to provide a rosy picture to higher levels of government Goldman Sachs report
Figures are also published disconcertingly quickly; It took officials less than two weeks to unveil this year’s second quarter growth, compared with a month in the US. The International Monetary Fund (IMF) said in mid-September that China could “further improve” the quality and the transparency of its data. France’s finance minister Michel Sapin said this month: “Nobody today believes with absolutely certainty that [the official figure] corresponds with reality”.
‘The Li Keqiang Index’
China’s expensive efforts to support diving stock markets and a sudden devaluation of the yuan this summer sparked fears that headline growth data is increasingly out of touch with reality. No less an authority than China’s premier Li Keqiang has expressed doubts about the accuracy of the country’s GDP figures. Leaked US diplomatic cables show that as the top official in Liaoning province in 2007, he told the thenUS ambassador that such data was
“man-made” and thus unreliable. When evaluating the economy, Li said he focused on only three indicators -- electricity consumption, rail cargo volume, and the amount of loans issued, according to the confidential memo released by the WikiLeaks website in late 2010. “All other figures, especially GDP statistics, are ‘for reference only,’ he said with a smile,” according to the cable. And the three indicators that make up this “Li Keqiang Index” reveal a bleak picture. Electricity consumption rose only 1 percent from January to August, the slowest in 30 years, the official Xinhua news agency said. The key manufacturing sector has contracted for seven months, according to the independent Caixin Purchasing Managers’ Index (PMI). Service industry wild card China’s top economic planner the NDRC last week defended “the credibility of 7 percent economic growth”. In an apparent dig at fans of the Li index it said power use and rail freight are less reflective of overall economic activity given the “major changes China’s economic structure has undergone in recent years”. The much less energy-intensive service industry was responsible for 49.5 percent of GDP growth in the first half of 2015, whereas the contribution of heavy industry shrank drastically. Some analysts have also weighed in against the Li index. “Since the first half of 2012, China’s services sector has become the main driver of its economic growth,” said Nicholas Lardy of the Peterson Institute for International Economics in an analyst report. AFP
Oil markets to be shaken up with new crude futures contract The influence of Asia, and China in particular, has been growing on international commodity markets in recent times Caroline Varin
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hina is seeking to assert its growing influence on global oil markets with a yuandenominated crude futures contract expected to be launched this year. At the same time, analysts warn that the second-largest oil consumer after the United States will struggle to compete with more established benchmarks such as London’s Brent North Sea crude and New York’s WTI. “China is the world’s largest oil importer and is going to become the largest oil consumer in the future, so it makes sense for the country to be the place for an oil futures (contract) in Asia,” Lin Boqiang, director of the Energy Economics Research Centre at Xiamen University, told AFP. China’s consumption will exceed that of the United States by 2034, according to the US Energy Information Administration. The country produced about 4.6 million barrels per day (mbpd) of oil in 2014, while the country’s average net imports reached 6.1 mbpd. The influence of Asia, and China in particular, has been growing on international commodity markets in recent times.
Business Daily | 11
October 5, 2015
Greater China
Curbing yuan speculation a government priority
Li Ka-Shing buys Portugal’s Iberwind A joint venture controlled by Hong Kong billionaire Li Ka-Shing agreed to buy the Portuguese wind-farm developer Iberwind Group in a deal worth as much as 288 million euros (US$324 million), the purchasers said Friday in a regulatory filing. Li’s Power Assets Holdings Ltd and his Cheung Kong Infrastructure Holdings Ltd each own half of the venture, according to a filing with the Hong Kong Stock Exchange. Iberwind is owned by the Spanish-Portuguese venture capital firm Magnum Capital Industrial Partners. The deal is subject to regulatory approvals.
Chinese offices have floated the idea of the Tobin tax, a scheme to penalise short-term currency speculators
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hina is studying plans to curb currency speculation even as it seeks to quicken the process of making the yuan trade freely, a deputy central bank governor said. Beijing will further open up its capital markets and develop its foreign exchange market as it aims to “accelerate the renminbi convertibility on the capital account”, Yi Gang wrote in an article published in China Finance magazine, a central bank publication. The yuan is also known as renminbi. While the yuan is already convertible under China’s current account, the broadest measure of trade in goods and services, the capital account, which covers portfolio investment and borrowing, is still subject to restrictions due to worries about abrupt capital flight and hot money inflows. Chinese officials have not given a firm timetable for making the yuan freely tradable. They have pledged financial reforms to make the yuan more convertible as they push for it be included in the International Monetary Fund’s Special Drawing Rights (SDRs) basket. But the authorities are also studying plans to curb currency speculation, including a “Tobin
Hong Kong retail sales fall again tax”, non-interest bearing reserve requirement and foreign exchange trading fees, Yi said. Chinese offices have floated the idea of the Tobin tax, a scheme to penalise short-term currency speculators that was proposed by Nobel prize-winning American economist James Tobin in 1972. “In the long term, foreign exchange management departments should always give top priority to preventing risks,” Yi said. Yi, who also heads the State Administration of Foreign Exchange, said the regulator will improve its monitoring on cross-border capital flows and develop an early warning system.
“China’s vision is to have these commodity markets priced on its own exchanges,” said Daniel Colover, associate editorial director at price reporting agency Platts. It is also consistent with China’s gradual moves towards greater internationalisation of its currency. The Shanghai International Exchange is working on a final draft to be approved by the China securities regulatory commission before a comprehensive mock trading exercise. Market participants expect an official launch by the end of 2015.
Reuters
Two-thirds of the world’s oil is currently priced against the Brent benchmark.
Market influence
Liquidity is key
The initial target of the new contract seems to be local companies and foreign companies with large interests in China, even if trading will be open to international players. “Part of the reason China wants to launch this contract is to allow domestic hedging” that would protect against local price volatility, according to Wiktor Bielski, global head of commodities research at VTB Capital. But the contract could struggle with liquidity, especially if it fails to attract foreign investors, as according to Boqiang, “there are not many players on the Chinese oil market, since the sector is highly monopolised”. The Chinese oil sector is dominated by the country’s national oil companies and even if some private companies have emerged, their scope remains limited. “I don’t know why someone doing business outside China would be interested, given the longerestablished, more transparent and more liquid alternatives are already available elsewhere,” said Julian Jessop, head of commodities at research group Capital Economics.
The authorities have taken a series steps to curb currency speculation and money outflows that intensified after China’s surprising Aug. 11 devaluation of the yuan. The People’s Bank of China has told banks to set aside reserves for purchases of currency derivatives, while the foreign exchange regulator has instructed them to bolster checks on currency dealings and identify “abnormal” cross-border fund transfers. The central bank has intervened heavily to support the yuan, alongside the government’s efforts to stem a slide in China’s stock market.
Part of the reason China wants to launch this contract is to allow domestic hedging Wiktor Bielski, global head of commodities research, VTB Capital
Some grey areas remain around plans for the contract, in particular the crude which is going to be used as underlying instrument. The derivative -- or promise to take or make delivery of a volume of crude at a future date -- will be based on a medium and sour crude, a quality favoured in Asia and imported mainly from the Middle East. Thus supply will likely continue to be influenced by external factors. “A lot of people in the industry -- a cross section of the oil market, trading houses, oil majors, producers -- are keen to see how it behaves and how it is adopted,” said Colover. For Bielski, market adoption should not be a major hurdle. In fact, volumes on the exchange could develop very quickly thanks to retail investments, he said. Plans for smaller lot sizes -- 100 barrels versus 1,000 for Brent -- seems to be tailored to retail investors. According to Bielski, the iron ore futures contract on the Dalian Commodity Exchange, which influences the price of steel, did not trade for the first six months, but volumes then “exploded” on the back of “punters” trading. In China, the amount of liquidity available to retail investors with money is growing faster than the number of products they can invest in, he added. “What if that same thing happens to oil? Chinese markets are going to become more dominant and more importantly they are going to export contagion risk,” predicted Bielski. AFP
Retail sales fell for the sixth straight month in August as a drop-off in tourist arrivals from mainland China and its economic slowdown took a bite out of the luxury goods business. Retail sales slipped 5.4 percent from a year earlier to HK$37.9 billion (US$4.89 billion). That followed a revised 2.9 percent fall in July, a 0.4 percent slide in June, 0.1 percent in May, 2.1 percent in April and 2.9 percent in March. In volume terms, August sales slipped 0.2 percent.
Xi’s UK visit a chance for EDF to clinch deal French utility EDF hopes to sign a commercial agreement with its Chinese partners to build two nuclear reactors in Hinkley Point, Britain in October, but a final investment decision on the project could take a few more weeks or months after that, an industrial source told Reuters. The source, confirming a report in French financial daily Les Echos, said Chinese President Xi Jinping’s planned October 20-23 visit to Britain would provide a “window of opportunity” for EDF to finalise commercial agreements with its partners, Chinese utilities CGN and CNNC.
Deepest gas field to be put into operation China’s deepest gas field in marine strata, Yuanba gas field in Sichuan Province, is to be put into operation by year end, energy giant Sinopec announced. It will produce 3.4 billion cubic meters of natural gas every year, supporting many regions along the middle and lower reaches of the Yangtze River, including Shanghai, Zhejiang, Jiangsu and Anhui, according to Sinopec. The field’s deposits are as deep as 6,700 meters, and it has a total explored reserves of 219.4 billion cubic meters. It is one of the most difficult gas fields to construct due to the high risk.
Anbang leads Fidelity & Guaranty Life bid Anbang Insurance Group Co is in the lead to acquire annuities and life insurance company Fidelity & Guaranty Life, according to people familiar with the matter, as more Chinese insurers seek to expand into the United States. Privately held Anbang has so far prevailed over other bidders, including private equity firms, in the auction for Fidelity & Guaranty Life, the people said. There is no certainty that the negotiations between Anbang and Fidelity & Guaranty Life will result in a deal, the people added.
12 | Business Daily
October 5, 2015
Asia
Japanese household spending picks up Government data showed the jobs-applicants ratio rose to 1.23 in August Stanley White
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apan’s household spending rose in August for the first time in three months and the availability of jobs improved to its best in more than two decades, which could temper concerns that the economy has fallen into a recession. The 2.9 percent annual increase in household spending in August was more than the median estimate for a 0.4 percent year-on-year increase and followed a 0.2 percent annual decline in July as consumers bought more cars. A separate survey from the Bank of Japan showed corporate inflation expectations weakened slightly last quarter, which could bolster the argument that the central bank will ease monetary policy at the end of this month when it updates its longterm economic forecasts. “Household spending and the tight labour market are a positive sign that the economy is chugging along,” said Norio Miyagawa, senior economist at Mizuho Securities.
“I don’t expect the BOJ ease when it meets next week. The BOJ is likely to lower its consumer price forecasts at the end of the month, so it faces a test of credibility if it doesn’t ease policy then.” The gains in auto sales are particularly encouraging, because it suggests this category has finally recovered from a tax increase that triggered a slump in compact car sales, Miyagawa also said. In addition to higher car sales, many consumers bought new domestic
air conditioners during a spell of unusually hot weather, a government official said. Government data showed the jobs-applicants ratio rose to 1.23 in August, which is the highest since January 1992. The jobless rate was 3.4 percent in August, slightly more than the median estimate of 3.3 percent. Gains in household spending suggest financial market turmoil caused by China’s slowing economy
has done less damage to sentiment than initially feared. The BOJ will hold a two-day meeting on October 6-7, but many economists are focused on the following meeting on October 30, where the central bank will recalculate its consumer price and gross domestic product forecasts. Japanese firms expect consumer prices will have risen an average 1.2 percent a year from now, the BOJ’s September tankan showed on Friday. That was less than a 1.4 percent annual increase expected in the previous survey, which suggests the BOJ may have to expand asset purchases again to meet its 2 percent inflation target. Some economists are also calling for the government to launch a stimulus package after a surprise fall in August’s industrial production increased the chance that the economy contracted in July-September, which would put it in recession.
India announces plan to slow rate of greenhouse gas growth
not say if its pledges were contingent on greater funding from the richer world.
Coal to dominate
The United Nations said 146 nations, accounting for almost 87 percent of world greenhouse gas emissions, have issued plans in the run-up to Paris Tommy Wilkes
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ndia has promised to shave a third off the rate at which it emits greenhouse gases over the next 15 years, in a longawaited contribution towards reaching a deal to slow global warming at a U.N. climate summit in December. The world’s third-largest emitter and last major economy to submit plans ahead of the Paris summit did not, however, commit to any absolute cuts in carbon emissions. Of the top two polluters, China has promised its emissions will peak by around 2030, and the United States is already cutting, but India says its economy is too small
and its people too poor to agree to absolute cuts in greenhouse gases now. Instead, it said it aimed to cut carbon intensity - the amount of carbon per rupee of economic output - by between 33 and 35 percent by 2030 from 2005 levels, and to grow to 40 percent the share of power generated from non-fossil fuels. The United Nations said 146 nations, accounting for almost 87 percent of world greenhouse gas emissions, have issued plans in the runup to Paris. They include all members of the Group of 20 except Saudi Arabia, which fears for its oil exports. Experts say the pledges
mark progress in climate action but - even if fully implemented - would not be enough to prevent the planet from warming by more than 2 degrees Celsius (3.6 Fahrenheit) by the end of the century, compared to pre-industrial times. Christiana Figueres, the U.N.’s climate chief, hailed the wide participation as a sign that Paris could be a “turning point” towards 2C, the level accepted by governments as the threshold beyond which the Earth would face dangerous changes including more droughts, extinctions, floods and rising seas. This offered opportunities for investments in “resilient,
Reuters
low-emission, sustainable development”, she said. India’s Environment Minister Prakash Javadekar said New Delhi’s plan balances the need for a lowcarbon future with the need to lift millions out of poverty and industrialise quickly. “Although the developed world has polluted the world and we are suffering, India will be part of the solution,” he told journalists after submitting the pledges to the United Nations. “We want to walk on a cleaner energy path.” India said it needs US$2.5 trillion by 2030 to achieve its plan, but Javadekar did
India, often acting as the voice of the developing world, plays an important role in global climate talks. “India now has positioned itself as a global leader in clean energy,” said Rhea Suh at the New York-based Natural Resources Defense Council. New Delhi stressed in its submission that coal would continue to dominate future power generation. Environmentalists fear India’s emissions will jump as the use of cars, air travel and air conditioning grows among its 1.2 billion people. “The scale of expansion of another 170 to 200 gigawatts of power from coal is baffling. This will set back India’s development prospects,” said Pujarini Sen of Greenpeace India. India’s target for carbon intensity falls well short of China, which pledged at the end of June to reduce its carbon intensity by 60-65 percent by 2030. Preliminary estimates indicate India would need to spend around US$206 billion between 2015 and 2030 to adapt to the effects of climate change, the submission said. Reuters
editorial council Paulo A. Azevedo, José I. Duarte, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Newsdesk João Santos Filipe, Michael Armstrong, Stephanie Lai, Óscar Guijarro, Kam Leong, Joanne Kuai GROUP SENIOR ANALYST José I. Duarte Designer Francisco Cordeiro WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia Assistant to the publisher Lu Yang | lu.yang@projectasiacorp.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.
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Business Daily | 13
October 5, 2015
Asia Indonesian president pushing for lower fuel prices
Vietnam struggles to sell bonds
Energy ministry and Pertamina are studying the president’s request
President Widodo urged banks to review their costs, such as staff, rent and electricity, and cut lending rates, now among the region’s highest
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resident Joko Widodo will push for cuts in bank lending rates and fuel prices as part of a package of policy reforms due to be announced next week, the chief economics minister said. But the central bank governor cautioned that the weak rupiah, now trading at 17-year lows against the dollar, might make it risky to cut interest charges. “(Banks) also have to consider expectations of (rupiah) depreciation,” Bank Indonesia Governor Agus Martowardojo told reporters. “Inflation is better, below 7 percent. But for interest rates, inflation is not the only concern. The main concern is the external condition.”
Widodo’s government rolled out two sets of measures last month in a strategy to halt a slowdown and boost purchasing power in Southeast Asia’s biggest economy after secondquarter growth of 4.67 percent, its slowest pace since 2009. The president urged banks to review their costs, such as staff, rent and electricity, and cut lending rates, now among the region’s highest, Coordinating Minister for Economics Darmin Nasution told reporters. “These are administrative matters, not monetary,” the former central bank governor said. Indonesia’s banking industry is among the world’s most profitable,
Australian retail sales bounce back in August Sales of household goods climbed a modest 0.2 percent but were up a solid 9.1 percent from a year ago Ian Chua
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ustralia’s retail sales bounced back in August as consumers spent more at supermarkets and department stores, an upbeat outcome that will cement expectations of steady interest rates at next week’s policy review. Friday’s data from the Australian Bureau of Statistics showed retail trade rose an expected 0.4 percent in August, recovering from July’s 0.1 percent fall. On the year, sales were up a healthy 4.5 percent. The positive outcome should be welcomed by the Reserve Bank of Australia (RBA), which holds its policy meeting on October 6. All 25 analysts polled by Reuters see the RBA keeping its cash rate steady at a record low 2.0 percent. “Today’s figures will give the RBA a bit of comfort on the consumer spending front,” said Gareth Aird,
senior economist at Commonwealth Bank. “We expect the cash rate to be left unchanged.” Driving the positive monthly result were gains in department store sales, food retailing and other retailing, which includes drugs and recreational goods sales. Sales of household goods climbed a modest 0.2 percent but were up a
but profit growth has slowed this year, hit by softer credit expansion and rising bad loans. Commercial banks charged 12.6 percent interest on average for working-capital loans in August, Bank Indonesia says. That compares with the central bank’s benchmark policy rate of 7.50 percent and the overnight money market rate of around 5.91 percent on Friday. Indonesia’s lending rates are market-driven, but three of its four biggest banks are state-controlled. Widodo also requested state energy firm Pertamina to cut fuel prices, if possible, to help boost purchasing power. Energy minister Sudirman Said told Reuters on Friday his ministry and Pertamina were studying the president’s request to lower fuel prices. State utility PT Perusahaan Listrik Negara (PLN) will be lenient with shoe and textile firms struggling to pay electricity bills, Franky Sibarani, the chairman of Indonesia’s Investment Coordinating Board, said late on Friday. State-owned banks would also ease the way for firms that require debt or finance restructuring, Sibarani said, adding, “These measures are taken to avoid layoffs.” Other policies expected this week will cut the time to get business permits and start labour-intensive projects to offset a loss of jobs in manufacturing and mining. Reuters
KEY POINTS
Vietnam has sold only half of the bonds it had hoped to this year, the Finance Ministry said on Friday, complicating efforts to raise funds for spending projects as public debt climbs. Just 127.5 trillion dong (US$5.67 billion) was raised via government bond auctions in the first nine months of 2015, reaching only 51 percent of the target, the ministry said. Bonds have been a key source of funds for government spending. The communist country wants to boost infrastructure, including transport and energy projects, to meet rising demand as the economy expands.
Sri Lanka to discourage vehicle imports Sri Lanka has imposed a 100 percent margin on letters of credit (LC) for motor vehicles with immediate effect to discourage unnecessary imports, Finance Minister Ravi Karunanayake said, in a move to prevent dollar outflows and further weakening of the rupee currency. “We have information that there are unnecessary vehicle imports taking place. From this moment onwards, there won’t be margin for LCs. A 100 percent has to be paid and they can’t get the interest rate advantage,” Karunanayake told reporters.
Indonesia, Malaysia to set up palm oil council Both countries’ authorities plan to set up an intergovernmental organisation of palm oil producers to ensure further industry cooperation between the world’s top producers and prop up prices, ministers from both countries said. The organisation, which is going to be called Council of Palm Oil Producer Countries, will coordinate palm oil production, manage stocks and stabilise palm prices, Indonesia’s Coordinating Minister for Maritime Affairs Rizal Ramli said in a news conference with Malaysian officials on Saturday. Malaysian palm oil futures fell to 2,387 ringgit (US$541.27) a tonne on Friday’s closing after hitting a 15-month high earlier in the week.
India’s sugar export boost plan looks flawed
Retail sales up 0.4 pct in August, up 4.5 pct on year Upbeat result likely to be welcomed by central bank RBA seen on hold at Oct. 6 policy review
solid 9.1 percent from a year ago, outperforming the other categories. “Household goods retailing is the strongest component of retail trade. It’s a natural response to the significant pickup in residential construction,” Aird added. Indeed, record low interest rates have helped stoke a housing boom in Australia, particularly in Sydney and Melbourne. An industry survey on Friday showed new home sales climbed 2.3 percent in August to be just short of a peak reached in April this year. “It is becoming increasingly apparent that total sales activity has already peaked this year, but today’s update shows that sales are remaining elevated,” said Diwa Hopkins, an economist at the Housing Industry Association (HIA), which produced the survey. Yet, some analysts fear that growth in house prices and construction activity will slow in the months ahead. Reuters
India’s bid to compel producers to export millions of tonnes of surplus sugar will fail without significant subsidies or at least penalties for failing to comply, trade and industry sources said on Friday. India has been pushing mills to sell sugar on the international market and use the proceeds to clear huge debts they owe farmers for sugarcane. The world’s number two producer, announced new rules last month making it compulsory for sugar producers to increase exports to at least 4 million tonnes in the present crushing season, to cut stockpiles.
Philippines aims to cut carbon by 70 pct by 2030 The Philippines aims to cut its carbon emissions by 70 percent by 2030 but only if it gets financial and technical help to meet that target at international climate change talks this year, a presidential aide said on Friday. Countries have submitted plans to limit greenhouse gases this week, in advance of a summit in Paris in December at which negotiators will try to clinch a climate accord. The plans submitted by 140 nations would go some way towards tackling climate change, but not enough to prevent the planet from warming by well over 2 degrees, experts say.
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International Russia ready to meet oil producers Russia, the world’s top oil producer, is ready to meet with OPEC and nonOPEC oil producers to discuss the situation on the global oil markets if such a meeting was called, its energy minister said on Saturday. A separate meeting between Russian and Saudi officials was being planned for the end of October, to discuss energy issues and some other projects, Russian Energy Minister Alexander Novak told reporters. Russia refused to cooperate with OPEC last November in a move to defend its market share.
U.S. job growth stumbles, raising doubts about economy New orders received by U.S. factories fell 1.7 percent in August, the Commerce Department said in a separate report Jason Lange
Norway’s PM warns of currency instability threat As the currency of one of the world’s richest nations becomes increasingly difficult to trade, the government is starting to worry about the economic fallout. Prime Minister Erna Solberg says the rapid weakening of Norway’s krone will only provide short-term relief to western Europe’s biggest oil producer. In the longer term, the loss of liquidity and increased volatility pose a threat to businesses struggling to plan investments. Norway’s krone has plunged more than 20 percent against the dollar over the past year.
Ethiopia aims to grow tourism threefold in five years Ethiopia aims to triple its number of foreign visitors to more than 2.5 million by 2020, making tourism a pillar of one of Africa’s fastest-growing economies. Buoyed by huge spending on infrastructure and an expansion of its services and agricultural sectors, Addis Ababa expects annual economic growth of around 11 percent for the next five years. Though lacking the palm-fringed beaches and safari trails of neighbouring Kenya and Tanzania, the Horn of Africa country boasts magnificent terrain and a fascinating imperial past.
Cameron may could re-examine diesel subsidies British Prime Minister David Cameron said Volkswagen was wrong for cheating diesel emissions tests and that he did not rule out re-examining subsidies for diesel cars, The Sunday Telegraph newspaper reported. In his strongest comment to date on the crisis at the German car maker, Cameron was quoted as saying in an interview that Volkswagen “was wrong to break the rules” over emissions. Re-examining subsidies for diesel cars could be costly for automakers: In 2001, Britain’s finance minister at the time, Gordon Brown, introduced lower vehicle tax for diesel cars, on the grounds that they were less polluting.
U.S. factories are feeling the global chill and shed 9,000 jobs in September after losing 18,000 in August, according to the (pictured) Labour Department’s survey of employers
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.S. employers slammed the brakes on hiring over the last two months, raising new doubts the economy is strong enough for the Federal Reserve to raise interest rates by the end of this year. Payrolls outside of farming rose by 142,000 last month and August figures were revised sharply lower to show only 136,000 jobs added that month, the Labour Department said on Friday. That marked the smallest twomonth gain in employment in over a year and could fuel fears that the China-led global economic slowdown is sapping America’s strength. “You can’t throw lipstick on this pig of a report,” said Brian Jacobsen, a portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin. The weak job growth took Wall Street by surprise and U.S. stocks sold off while the dollar also weakened and yields for government bonds fell. Bets on interest rate futures showed investors only saw a 30 percent chance of a Fed rate hike in December, down from just under 50 percent before the job report’s release. “(With) a weak report here, in combination with some of the other weakness that we are seeing across the globe, the odds get dinged for December,” said Tom Porcelli, an economist at RBC Capital Markets. Investors saw virtually no chance the Fed would end its near-zero interest rate policy at its only other scheduled meeting this year, to be held later in October. Futures prices indicated investors were betting the Fed would probably hike in March. U.S. factories are feeling the global chill and shed 9,000 jobs in September after losing 18,000 in August, according to the Labour Department’s survey of employers. “We saw events in China lead to
some global financial turmoil and you’re seeing that in the data here,” White House chief economist Jason Furman told Reuters. New orders received by U.S. factories fell 1.7 percent in August, the Commerce Department said in a separate report. Paul Ryan, a top Republican lawmaker in the House of Representatives, said the weak turn in the economy should be a wake-up call for Washington to reform the national economy with new tax laws, free trade agreements and policies to get people off welfare. “This recovery continues to disappoint, but we can’t accept it as the new normal,” Ryan said. The recent pace of job growth should have been enough to push the unemployment rate lower because only around 100,000 new jobs are needed a month to keep up with population growth. But the jobless rate held steady at 5.1 percent. The unemployment rate is derived from a separate survey of households that showed 350,000 workers dropping out of the labour force last month, as well as a lower level of employment. The share of the population in the work force, which includes people who have jobs or are looking for one, fell to 62.4 percent, the lowest level since 1977. Average hourly wages fell by a cent to US$25.09 during the month and were up only 2.2 percent from the same month in 2014, holding around the same levels seen all year and pointing to marginal inflationary pressures. The report did have a few bright spots that might be welcomed by Fed chief Janet Yellen, who said last week the economy was doing well enough to warrant higher rates this year. The number of workers with parttime jobs but who want more hours
KEY POINTS Nonfarm payrolls increase 142,000 in September Unemployment rate steady at 5.1 percent Average hourly earnings up just 2.2 percent from year earlier fell by 447,000 in September to 6.0 million. Yellen has signalled that the elevated number of these workers points to hidden slack in the labour market that isn’t captured by the jobless rate. A measure of joblessness that includes these workers and is closely followed by the Fed fell to 10 percent, its lowest level since May 2008. Economists polled by Reuters had expected job growth of 203,000 in September. All told, revised estimates meant 59,000 fewer jobs were created in July and August than previously believed. In another grim sign, the number of hours worked in the country fell 0.2 percent, raising the spectre that some broader softness might have gripped the economy last month. Some of the strongest headwinds on the U.S. economy come from the commodity sector, which has slowed in part because of weaker demand from China. The price of oil has fallen nearly 50 percent over the last year, and U.S. mining payrolls, which include energy sector jobs, fell by 10,000 in September, the ninth straight month of declines. Reuters
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October 5, 2015
Opinion Business
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Leading reports from Asia’s best business newspapers
Bad data but at least we’ve got the Fed James Saft
Reuters columnist
THE KOREA HERALD A growing number of South Korean companies failed to generate enough operating profit to pay tax and interest payments on their debt, potentially raising downside risks in Asia’s fourth-largest economy, data showed yesterday. Out of 628 listed companies excluding financial firms, 34.9 percent of the companies failed to make sufficient profit to pay down the principal on their debt, up from 24.7 percent in 2010, according to LG Economic Research Institute. The rising number of “zombie companies” has been considered a factor that is plaguing the South Korean economy.
PHILSTAR Singapore-based publication The Asian Banker sees the Philippines leading the strong growth in the retail financial services market in Asia Pacific on the back of increasing consumption and improved access. A study conducted by Asian Banker Research showed the income of commercial banks from retail financial services in Asia Pacific growing 77.5 percent to US$824 billion by 2020 from the projected US$464 billion this year. Retail banking income was defined as business from retail deposits, mortgages, credit cards/unsecured lending, wealth management and, wherever possible, small and medium enterprises banking.
TAIPEI TIMES A plan proposed by the Taipei City Government to procure three private plots of land in Shilin District for the construction of a “tourist centre” — for which the city government has budgeted NT$105 million (US$3.17 million) from its second reserve fund — has sparked heated debate among city councillors. The plots on Zhishan Road take up a combined space of about. The expropriation plan drew criticism from Chinese Nationalist Party city councillors, who said proposal to use the fund to purchase the land instead of submitting a budget proposal was a breach of protocol.
THE JAPAN NEWS Stock prices are seen moving on a firm note this week with investors’ eyes fixed on the course of the Bank of Japan’s monetary policy and domestic economic data. Last week, the benchmark 225-issue Nikkei average fell 155.38 points, or 0.87 percent, to close at 17,725.13 on the Tokyo Stock Exchange Friday. This week, the BOJ will hold its policy-setting meeting for two days from Tuesday. BOJ Gov. Haruhiko Kuroda will have a press conference after the meeting. Expectations for additional easing by the BOJ are high following recent disappointing economic data.
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he U.S. jobs data were a bust, China remains a threat, the Fed won’t hike until, well, don’t ask, and bad news is good news for the stock market once again. Stocks plunged and then rallied back to gains on Friday after payrolls data showed not just declining momentum in job creation, but static wage gains and the lowest labour participation rate since 1977. The reaction is likely more a function of the conviction that distress in markets will be met with tender care by the Fed than anything else. The data certainly wasn’t much to celebrate. “From (an) economic viewpoint as bad as bad can be,” Citigroup strategist Steven Englander wrote of the data in a note to clients. “Great for bonds as it raises the possibility that U.S. recovery is losing steam - slower jobs, low inflation. Data are weak from both a demand side and supply side perspective. It is premature to declare recovery dead, but nothing in data to suggest otherwise.” The one clear market reaction to the not-dead economy was in interest rate futures markets, which now show a 30 percent probability of a rate hike in December, down from slightly less than half before the data was released. Expectations now centre around March for a first increase in interest rates. The S&P 500 fell sharply, only to storm back to a gain of 1.4 percent in the afternoon, a swing of nearly 3 percent.
The data arguably helps to vindicate the Fed’s decision to remain on hold at its September meeting, though whether we should expect it to react to developments in China or those in the U.S. remains unclear. Whatever might be driving the Fed, investors appear to feel it has their best interests at heart, though combined with a disquieting feeling that “benign” and “in control” are two different things. Perhaps investors took heart from Fed Vice Chairman Stanley Fischer, who, in a speech which did not touch on monetary policy, made the case for not bursting bubbles with the hammer of monetary policy, citing the “significant costs”. Instead Fischer argued for better “macroprudential” tools, essentially regulatory interventions like lending curbs which seek to cut systemic risk. “The limited macroprudential toolkit in the United States leads me to conclude that there may be times when adjustments in monetary policy should be discussed as a means to curb risks to financial stability,” he said at a Boston Federal Reserve Bank conference. “A more restrictive monetary policy would, all else being equal, lead to deviations from price stability and full employment.” That sounds very much like a policy maker keen not to drop all the eggs, even if willing to admit that sometimes eggs rot.
A stool with three legs Boston Fed president Eric Rosengren argues that Fed
The one clear market reaction to the not-dead economy was in interest rate futures markets, which now show a 30 percent probability of a rate hike in December
policy is consistent with the idea that it has a third mandate, financial stability, to go along with the traditional ones of managing inflation and employment. A paper released at the same conference and authored by Rosengren and colleagues from the Boston Fed illustrates how big a role the fear of financial instability plays in setting policy. They counted up the times
the Fed, between 1987 and 2009, used financial instability terms like “bust” and “crisis” in the transcript of policy-setting meetings. Believe it or not, but every 100 times such terms, which they call “moaning,” are used can account for a 45-basispoint drop in interest rates. That’s a more powerful predictor than a 1 percent move in unemployment rate forecasts, and nearly double the move in rates prompted by a 1 percent move in inflation. Financial stability isn’t the third mandate, it’s the first. Some of the words on the list are good for a laugh; “lending standards,” “price-to-earnings” and “supervision” are all indicators that we need easier policy, it seems. When credit spreads are tight, “moaning” is an even more potent predictor of easing, with every 100 times negative words are used accounting for a 67-basis-point drop in interest rates. Unsurprisingly to observers of the Fed’s ‘tails you win, heads I lose’ approach to investors and markets, the central bank doesn’t behave the same way when credit conditions are loose, perhaps indicating a bubble or similar risks. For every “100 words of moaning” during boom periods we only get 36 basis points of tightening. So, bad news truly is good news if you have risk assets at stake, the only question being what form the easing will take if the bad news (good news) keeps coming. Reuters
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Closing China, U.S. top World Bank’s agenda
Beijing conserves more water in 2014
Development issues and economic conditions in China and the United States will be the focus of the World Bank Group and the International Monetary Fund annual meetings in Lima on October 5-11, said a Peruvian official. Changes in development mode in China and potential interest rate hike by the U.S. Federal Reserve will be the top issues during the meetings, which will attract about 15,000 participants from 188 countries and regions, said Peruvian Economic Minister Alonso Segura. The global economic growth would be around 3.4 percent in 2015, weaker than in 2014, IMF chief Christine Lagarde said.
Beijing conserved 120 million cubic meters of water in 2014 as the city used multiple ways to fight water scarcity, the Ministry of Water Resources said. The figure compared to 113 million cubic meters of water saved in 2012, said the ministry, without mentioning the figure for 2013. Water consumption per 10,000 yuan of GDP growth fell 4 percent last year, it said. Beijing has controlled underground water more strictly, and made rainfall collection and water reclamation more effectively. As it cracked down on private well-digging and improved agricultural water-saving, the city used 1.96 billion cubic meters of underground water last year.
Bitcoin flounders in Australia as regulatory worries bite The banks’ shutdown appears at odds with a government enquiry which in August recommended removing sales tax for bitcoin buyers
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ustralian businesses are turning their backs on bitcoin, as signs grow that the cryptocurrency’s mainstream appeal is fading. Concerns about bitcoin’s potential crime links mean many businesses have stopped accepting it, a trend accelerated by Australian banks’ move last month to close the accounts of 13 of the country’s 17 bitcoin exchanges. The development is a blow to hopes of bitcoin fans that the currency can play a
significant role in everyday business transactions in developed economies, with Australia once seen as one of its most promising markets. It is estimated to hold 7 percent of the currency’s US$3.5 billion global value, a sizeable figure in a country of just 24 million people. “We’ve got a squeaky clean reputation, and that’s actually worth a lot more to us than dipping into this,” said James Snodgrass, principal of Sydney’s Forsyth Real Estate, which ditched the currency in late 2014 after the firm was
Malaysia air unhealthy around Kuala Lumpur as haze persists
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investigated by the federal tax office. Forsyth had offered to collect home deposits and other realtor fees via bitcoin to cater to international buyers. The tax office probe found no wrongdoing but Forsyth was burned by the negative publicity and bailed out before ever taking a bitcoin payment. Although most mainstream banks in Europe and the U.S. already refuse to keep bitcoin-affiliated accounts, developments in Australia represent the
first coordinated shutdown of bitcoin exchanges by a country’s banking system. The move makes it much harder for people to convert regular currencies in to or out of bitcoin, threatening its long-term value.
Bank shutdown
The banks’ shutdown appears at odds with a government inquiry which in August recommended removing sales tax for people who buy bitcoin. The Australian antimoney laundering agency, AUSTRAC, told Reuters that banks have no legal obligation to close bitcoin accounts. The so-called “Big Four” banks - Commonwealth Bank of Australia, Westpac Banking Corp, Australia and New Zealand Banking Group and National Australia Bank - directed inquiries about bitcoin to the Australian Bankers’ Association. Tony Pearson, the association’s acting chief executive, wouldn’t confirm the coordinated rejection of bitcoin but said in an email that its “lack of transparency
and regulatory oversight raises a number of risks for users and also poses risks for the payments system, the integrity of the financial system and the erosion of the tax base”. Australia’s organised crime agency has said it is concerned the currency’s untraceable nature makes it attractive for money laundering and selling illicit drugs. In the U.K. and the U.S., most large banks have already cut ties with bitcoin account holders, but lack of industry co-ordination has left room for individual lenders to support the currency, including Germany’s Fidor Bank AG, which operates in Britain, and tech-focused Californian lender Silicon Valley Bank. The 13 Australian bitcoin exchanges whose accounts were closed by the banks have shut operations. The remaining four have had their accounts frozen, and now face three options: close, move overseas or spread their business into several smaller bank accounts to avoid detection by their banks. Some industry watchers believe ambivalence may be bitcoin’s biggest problem. At least six Australian retail businesses, which as recently as 2014 courted publicity for offering sales by bitcoin, told Reuters they were considering exiting the currency.
APEC dialogue on food security kicks off in Philippines
Several VW engineers admit to installing cheat device
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alaysia’s air quality in six districts around Kuala Lumpur remains at “very unhealthy level” because of haze from Indonesian forest fires, according to pollution readings from the Department of Environment. The country’s air pollutant index in these areas ranges from 201 to 300, according to data from the department’s website. Readings of between zero and 50 indicate good air quality, while those between 51 and 100 are moderate. Levels between 101 and 200 are unhealthy, while 201 and 300 are considered very unhealthy and more than 301 hazardous. The runways of 3 airports in Malaysia reopened yesterday after being forced to close due to the deteriorating haze earlier in the day, Malaysia Airports Bhd. said in a tweet. Sultan Abdul Aziz Shah Airport in Subang, Sultan Abdul Halim Airport in Alor Setar and Sultan Azlan Shah Airport in Ipoh “are now reopened and all operations are running as usual,” the airport operator said. “However, all passengers travelling today are advised to check with their respective airlines in their flight schedules.” All schools in Malaysia, apart from Kelantan, will be closed today and tomorrow, The Star reported on its website, citing Education Minister.
inisters of 21 member economies of the Asia Pacific Economic Cooperation (APEC) convened yesterday for a two-day forum to push for food security and blue economy in the region. Philippine Environment Secretary Ramon Paje, during his opening remarks at the APEC High Level Policy Dialogue held in central Philippine city of Iloilo, called for greater cooperation among member economies to unlock the full potential of the so-called “ blue economy” and achieve inclusive growth in the region. “We envision a regional cooperation to narrow the gap in economic development of our economies while sustaining growth with equity,” he said. Paje underscored the need to narrow the economic gap among APEC nations, noting that the region currently “comprise economies at varying levels in the development spectrum.” Paje said the two-day forum provides “an opportunity to discuss concrete and feasible actions to advance sustainable management and conservation of our coastal and marine ecosystems and habitats, and improved biodiversity to support higher fisheries productivity and provide better ecological services.”
Bloomberg News
Xinhua
Reuters
everal engineers at scandal-hit German automaker Volkswagen have admitted to installing the device in the company’s cars aimed at cheating pollution tests, a newspaper reported yesterday. Bild am Sonntag said the employees told an internal investigation that they had been involved in the affair, which came to light last month. “Several engineers stated that they installed the deception software in 2008,” the newspaper said. Bild did not reveal their identities or say how many had made the admission. But it said their statements had so far failed to unmask those who masterminded the scam. The engineers said the EA 189 engine, developed by VW in 2005, could not have complied with pollution caps and cost targets without the deception. Volkswagen has admitted that up to 11 million diesel vehicles worldwide are fitted with the socalled defeat device. The gadget detects when the car is undergoing testing and switches the engine to a low-emissions mode. AFP