Macau Business Daily October 26, 2015 by Business Daily

Closing editor: Alex Lee

MOP 6.00

Carrying cash? No, thank you

Publisher: Paulo A. Azevedo

Gaming associations are active again. Denouncing Sands China’s new slot machine worker policy to the Labour Affairs Bureau. Effective November, these employees must carry up to HK250,000 to distribute dividends to gamblers. In the cause of efficiency. But workers say it adds pressure. While the consequences of loss are too open-ended.

Year IV

Number 905 Monday October 26, 2015

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Uber Apps Under Wraps

The Secretary for Transport agrees. Both the Transport Bureau and the police say the Uber model is illegal. Macau-China trade surges At least, as currently packaged. Raimundo do Rosário, however, told Business Daily that “we still need 37.5 pct in September Page 2 to know the exact form of how this service operates”. Inferring that a model that complies with the law would be acceptable Page

Untying growth ropes Urban myth. Premier Li Keqiang dismisses assumption China’s economy must grow seven pct this year. It just illustrates the range, he says, that China should expand. But it’s not mandatory.

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Inflation hits 4.23 per cent

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Legend Hotel launched in Fu Chun Jian

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Communist Party of China meeting opens to finalise 13th Five-Year Plan

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HSI - Movers October 23

Name China Mengniu Dairy C

+3.26

Hang Lung Properties L

+3.00

AIA Group Ltd

+2.97

China Petroleum & Che

+2.85

Henderson Land Devel

+2.61

CLP Holdings Ltd

+0.15

China Resources Beer H

0.00

Galaxy Entertainment

-0.92

Fans forever

China Unicom Hong Ko

-1.20

Belle International Ho

-1.80

Some of the biggest celebrities are fans. Of the Mandarin Oriental Group of hotels. But a top brand needs to keep surprising at every level. Particularly in the territory’s new ultra competitive era. Mandarin Oriental Macau’s new GM tells Business Daily that it will continue to mine niche customers through the total experience. Rather than price. Digital marketing and the development of MICE business are high on the strategic agenda

Source: Bloomberg

www.macaubusinessdaily.com

Interview

Heist halves empire

Irreparable damage. The consequences of an alleged multi-million dollar embezzlement from Dore Entertainment. The junket operator is reportedly closing 2 VIP rooms in Wynn Macau. Or half of its portfolio. One room continues to operate in MGM and another in The Venetian Macao

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October 26, 2015

Macau

Macau-China trade surges 37.5 pct in September China’s exports to Macau jumped by nearly 40 per cent last month, but not vice versa Kam Leong

kamleong@macaubusinessdaily.com

he city saw its trade value with the Mainland soar by 37.5 per cent year-on-year last month, driven by the notable increase in the country’s exports to the Special Administrative Region, the latest official data released by the Chinese Ministry of Commerce reveals. In September, the trade value between the two parties totalled US$470 million (MOP3.76 billion), an increase of 4.9 per cent from US$440 million in the previous month. China’s exports to the city account for more than US$450 million of the total, a year-on-year increase of 39.5 per cent, or up 5.6 per cent month-on-month.

Nevertheless, Macau’s exports to the Mainland dropped 9.8 per cent to some US$10 million in the month. On a month-on-month comparison, it represents a decline of 16.6 per cent. For the first nine months of the year, value generated by the trade activities between the parties reached US$3.56 billion, a lift of 35.2 per cent from the same period last year. Meanwhile, China’s exports to the Special Administrative Region registered a year-on-year increase of 37.4 per cent to US$3.42 billion, accounting for 97.2 per cent of the total, while Macau’s exports to the country decreased by 2.4 per cent

year-on-year to US$140 million. The official data also indicated that Chinese authorities had approved 24 investment projects of local firms last month, involving capital used of some US$50 million, decreasing by 44.2 per cent and 16.9 per cent year-on-year, respectively. However, the number of local investment projects approved by the Mainland authorities for the first nine months of the year jumped 15 per cent year-on-year to 106. The actual capital used for these projects soared 75.6 per cent year-on-year to US$750 million. Cumulatively, the Chinese authorities have given the green light

to some 14,138 investment projects by Macau firms, of which the capital used totalled US$12.65 billion as at the end of September. But the amount only accounted for 0.8 per cent of the total foreign investment that the country has received. On the other hand, Mainland companies had been contracted a total of 25 projects in the Special Administrative Region for the first nine months of the year, worth US$1.37 billion, with sales reaching US$820 million. Ministry data also indicated a total of 117,902 Chinese workers were working in the territory as at the end of last month.

Inflation hits 4.23 per cent

riven by higher rentals and rising charges for eating out, inflation increased 4.23 per cent year-on-year during September, according to information released on Friday by the Statistics and Census Service (DSEC). Nevertheless, inflation was down 0.41 percentage points from 4.64 per cent in August. The largest increase in the prices index was recorded for Alcoholic Beverages and

Tobacco, up 38.42 per cent year-on-year. According to DSEC, this increase was caused by the new tobacco tax, which came into effect in July. Month-on-month there was a decline of 0.29 per cent. Education also became more expensive, as its price index increased 8.93 per cent due to higher tuition fees for the new academic year, which started in September. During the same period,

prices for health increased 6.12 per cent, primarily related to outpatient services. I n co m p a r i s o n wi th September of last year, prices for housing and fuel increased 6.05 per cent. Month-on-month prices increased 0.05 per cent, due to higher rental prices. Year-on-year, prices of Clothing and Footwear declined 0.65 per cent, while prices for Communication went down 0.98 per cent.

However, month-on-month, these prices decreased 1.66 per cent and 0.13 per cent, respectively. The decline in the cost of clothes was explained by ‘seasonal sales’. Regarding transportation, while year-on-year recorded an increase of 1.46 per cent, from August to September there was a decline in prices of 0.45 per cent because of lower airfares and gasoline costs.

Recreation and Culture also became cheaper during September by 1.54 per cent, driven by cheaper charges for package tours. Comparing prices with September 2014, however, an increase of 0.41 per cent was recorded. Since 2011, annual inflation in the territory has always exceeded five per cent, ranging from 5.50 per cent to 6.11 per cent. Last year, it achieved 6.05 per cent. J.S.F.

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October 26, 2015

Macau 5,322 companies registered in Hengqin this year A total of 5,322 enterprises registered their businesses on Hengqin Island during the first three quarters of the year, according to the Macau Affairs Bureau of Hengqin New Area. Department vice head Li Juan said on Friday that the registered capital of these companies totalled some 570 billion yuan (US$89.8 billion), up 67.6 per cent compared to the same period last year. Cumulatively, the total number of companies registering on the Island amounts to nearly 12,000. Ms. Li believes the island will continue to be an important platform for the diversification of the Macau economy.

Dore reportedly closing VIP rooms in Wynn Macau Tainted by a fraud scandal in September, the junket promoter is shutting down its two VIP rooms in the casino property at the end of this month, according to Business Daily source and legislator José Coutinho Kam Leong

kamleong@macaubusinessdaily.com

ocal junket operator Dore Entertainment Co. Ltd. is closing its two VIP rooms in Wynn Macau at the end of the month, following reports in September that its former cage manager Mimi Chow had allegedly absconded with as much as HK$2 billion (US$249 million) of the company’s money. “The staff had already received the news that the company’s two VIP rooms, Dore 1 and Dore 2, in Wynn Macau would be shut down on October 31,” a source, who requested anonymity, told Business Daily yesterday. “The closures are strongly related to the HK$2 billion

cage capital theft,” the person added. Since September 13, depositors of the junket company have been protesting outside Wynn Macau, claiming Dore had rejected their withdrawal of deposits placed with the company following the alleged cage theft. Meanwhile, a statement released by Dore later that week claimed its former manager had only allegedly stolen some HK$100 million from the company’s cage. “Dore has had the intention of closing the two VIP rooms in Wynn Macau since one month ago. It was just Wynn Macau telling them not to do so at that time. But it is true that

Corporate

that time that it did not have any involvement in the alleged rejected withdrawals of deposits placed with Dore, nor did the junket promoter owe any money to Wynn. The junket company, founded in 2006, had at least 25 tables in Wynn Macau, according to UBS Securities analyst Anthony Wong.

The missing money HK$2 billion - On September 12, a report by Daiwa Capital Markets analysts, who are led by Jamie Soo, indicated junket promoter Dore Entertainment Co. Ltd. may have lost between HK$200 million and HK$2 billion due to embezzlement, according to Bloomberg. HK$100 million - However, the junket operator said in a statement published in Chinese language newspaper Macao Daily on September 17 that former cage personnel Mimi Chow was suspected of stealing HK$100 million from the company. HK$520 million - Meanwhile, Judiciary Police told Macao Daily two weeks ago that the theft of cage capital from Dore involved at least HK520 million following the preliminary investigation of 49 police reports it had received.

Legend Hotel launched in Fu Chun Jian

Ronaldo lends soccer magic to PokerStars event Brazilian football legend and PokerStars brand ambassador Ronaldo Nazario has confirmed that he will be attending the 2015 Asia Championship of Poker (ACOP). ACOP will be held at the ‘PokerStars LIVE Macau’ poker room from October 30 to November 15. ACOP is the largest annual poker festival in Asia and Ronaldo will be competing in the HK$100,000 (US$13,000) buy-in main event which comes with a HK$15 million prize pool guarantee. Ronaldo is widely regarded as one of the greatest footballers of all time, has won the World Cup twice, and has won the Ballon d’Or twice during his career. Earlier this year, Ronaldo came 26th in the 2015 PokerStars Caribbean Adventure (PCA) main event for US$42,180.

the operator is closing its businesses in Wynn Macau at the end of the month,” legislator José Coutinho, who had accompanied the Dore depositors petitioning the government, told Business Daily in a phone interview yesterday. Business Daily also contacted Wynn Macau and Dore Entertainment for clarification of the closures yesterday but there was no reply from either of the companies by the time this story went to press. According to Mr. Coutinho, the depositors had already known of the planned closures of the junket promoter. “They can only continue their protests on the street now, hoping the government would initiate a face-to-face meeting with them,” the legislator said, urging the government to extend its supervision to the VIP gaming industry, as well as evaluating the possible impact on Dore’s two other VIP rooms in MGM Macau and The Venetian Macao. Judiciary Police (PJ), who are still investigating the cage theft, said recently it had received 49 police reports related to the case, involving at least HK$520 million. In fact, a statement by Wynn Macau released on September 14 claimed that the junket operator, following the fraud scandal, would continue operating in its casino. The gaming operator also stated at

Last year, ACOP attracted nearly 3,000 entrants and awarded more than HK$116 million (US$15 million) in prize money. The 2015 edition is expected to eclipse those figures with a record 23 cash tournaments scheduled for the 17-day series.

egend Hotel Fu Chun Jian, invested in by local gaming businessman David Chow Kam Fai’s mother Lam Fong Ngo, was officially launched in Zhejiang Province in China on Saturday. Chief Executive Fernando Chui Sai On also attended the opening ceremony. The one billion yuan hotel project is one of the four projects invested in by Legend Estates Limited chaired by Ms. Lam in the Chinese province. The almost 90 year-old businesswoman is also vice chairman of local casino operator Macau Legend Development Ltd. owned by her son. The Chief Executive indicated in a briefing with Ms. Lam that his presence at the opening ceremony is to support local enterprises engaging in regional cooperation, which could positively boost

the development of the city’s economic diversification. According to Ms. Lam, her four projects in Zhejiang Province are worth nearly 3 billion yuan (US$473 million) in total. In addition to the hotel project, her investment plans include two property projects and one office project, local Chinese newspaper Macao Daily reported. But the old businesswoman claimed her company had not yet estimated when it would achieve payback from the investment, saying it will be dependent upon luck and support from the government there. The Legend Hotel, occupying a gross area of more than 80,000 square metres, has 40 floors and two basements, offering more than 300 hotel rooms. K.L.

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October 26, 2015

Macau

So far Uber service is illegal, says government The Transport Bureau and Public Security Police Force have declared that the business model of Uber is illegal, according to the existing laws of the territory. Secretary Raimundo do Rosário told Business Daily he agrees. But leaves the door sufficiently ajar should a Uber service not infringe the law. Time will tell João Santos Filipe and Alex Lee newsdesk@macaubusinessdaily.com

ecretary for Land, Public Works and Transport, Raimundo do Rosário. told Business Daily that last week’s joint press release by the Transport Bureau (DSAT) and the Public Security Police Force (CPSP) is correct: the mobile application for ride-sharing Uber is considered illegal. The position of the government was revealed after the company announced on Thursday that it had started to operate in the territory. ‘The Public Security Police Force and the Transport Bureau are greatly concerned about a company saying it can provide transport services via mobile phone application. We are paying close attention to the software of this on-call service’, they said. ‘According to the existing laws of Macau, part of the design of this mobile phone application and its business model cannot legally operate in Macau’.

The two bodies mentioned the Regulations for Road Traffic and the Regulations for Transport of Passengers in Light Vehicles for Renting or Taxis. The first regulation stipulates that a vehicle being used for a purpose other than that registered with DSAT is liable to a fine of MOP30,000. The second says drivers being paid to transport passengers are not allowed to charge a different fare from the tariffs defined by law. “In Macau we are not at one extreme or the other. If this service is done by a private vehicle, charging for the service is illegal; also, because in Macau there’s a special driving licence for that. But if they succeed in creating a system to provide a limousine service that exists all over the world, it might be fine”, Mr. Rosário told this newspaper, concluding that at this stage “we need to understand the details of how the service is provided”.

Sa Sa profits down more than half The Hong Kong-based company has issued a warning for investors to prepare for a profit cut to around HK$170 mln

osmetics sale company Sa Sa International Holdings Limited is expecting profits to plunge more than 50 per cent for the six months ended September, according to a filing sent to Hong Kong Stock Exchange. These results are explained by ‘the worsening operating environment of the retail sector which has led to significant drops in both sales and gross profit and reduced operational efficiency’. According to the previous interim report of the company, for the six months ended September 2014, Sa Sa posted a profit of HK$339.76 million (US$43.84 million), which at that time was also down by around 5 per cent from HK$357.38 million. Now, the profit for the period is expected to be less than HK$169.88 million. Regarding sales for the second quarter of fiscal 2015/2016, Sa Sa has announced in another filing that turnover for the Hong Kong and Macau market declined 13.2 per cent yearon-year to HK$1.59 billion. Over this period, same stores sales dipped 10.1 per cent, while average sales per transaction declined 7.9 per cent to HK$346.

Second quarter results

In the filing sent to the Hong Kong Stock Exchange with data for the second

quarter, the company says ‘overall consumer sentiment and Mainland Chinese tourist arrivals continued to be adversely affected by a number of factors with no significant signs of improvement’. ‘The strength of the Hong Kong dollar and the weaker yuan adversely affected the attractiveness of shopping in Hong Kong for both local consumers and Mainland Chinese visitors’, the company explains. ‘The impact of the ‘one-trip-per-week’ policy has gradually gained momentum, leading to a decline of 13.1 per cent and 10.1 per cent in the Group’s retail sales and same store sales in Hong Kong and Macau markets during the second quarter, respectively.’ It is also explained that the number of transactions of Mainland Chinese customers declined 4.1 per cent, and that their average sales per transaction went down 12.5 per cent year-on-year, dragging down the overall performance of the group. Regarding the group performance, including Mainland China, Singapore, Malaysia and Taiwan markets, turnover declined during the second quarter of the year, 12.4 per cent year-on-year to HK$1.96 billion. Of the group’s 281 shops and counters, 110 are in Macau and Hong Kong. J.S.F.

The government has also called the attention of residents to cases related to insurance cover in the event of accident while travelling in a vehicle rented via mobile application. ‘We would like to remind residents that whenever using services provided by mobile application, they have to pay attention to privacy issues and the possible leaking of credit card details. When traffic accidents happen, there may not be insurance cover. Residents are advised to use the existing legal transport system to protect their own safety and consumer rights’, the message reads. CPSP announced in the statement that since the beginning of the year until the middle of October it has prosecuted 326 cases of unlicensed cars charging transported passengers. Uber provides an on-demand taxi service to users but the company does

not employ any driver or owns any taxi. Instead, it connects drivers, who drive their own cars and are not required to have legal licences, to passengers. Through the application, the company charges a fee from the fare paid. The passenger’s credit card is used as the sole method of payment. Business Daily contacted Uber but the company has declined to comment upon the position of the Macau Government.

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October 26, 2015

Macau Mandarin Oriental Macau eyes active digital marketing, dynamic MICE offerings While the city has been experiencing a softening of visitor arrivals and occupancy rate, Jill Goh, the new General Manager of Mandarin Oriental Macau, told us how the non-gaming hotel is facing the challenge with its digital marketing strategies and development of the MICE business. The hotel is also unfazed by rising competition from waves of newly opening hotels and resorts Stephanie Lai

sw.lai@macaubusinessdaily.com

The city’s hotel occupancy rate and visitor arrivals have been dropping this year, in contrast to the growth of previous years. Has Mandarin Oriental Macau also felt this downtrend in terms of occupancy rate?

I’d be lying if I said no. Of course, we’re part of the gaming city. And yes, we do feel the effect of it. However, being a Mandarin Oriental Hotel in the city and being a unique non-gaming hotel, you know our focus is always to bring non-gaming guests into the hotel. So, with the group’s reputation and worldwide marketing strategies we hope to ride out this storm in a less turbulent way.

How?

Well, I think we focus a lot on capturing the non-gaming business from Asia Pacific, predominantly from China – our main market feeder is from China. So, the team is very actively looking at digital marketing and so on; looking at dynamic offerings for the MICE market to come in and have small and medium-sized meetings in the hotel; plus, offering a lot of

attractive and exciting packages to invite families to come over for vacation from Taiwan, Korea, Hong Kong. These are also our important market segmentation – people who look for a true 5-star luxury experience. That’s what we’re famous for.

We’re definitely mindful of making sure that our offer is great value for money, but we don’t believe reducing the price is the right strategy for us to bring in the guests for higher occupancy. Because we’re looking at a niche market

We’ve seen some casinoresorts offer promotional packages reducing room rates. Does that strategy affect Mandarin Oriental’s design of accommodation packages?

We’re definitely mindful of making sure that our offer is great value for money but we don’t believe reducing the price is the right strategy for us to bring in guests for higher occupancy. Because we’re looking at a niche market. Staying with us is the total experience of a luxury hotel. Indeed, there are a lot of great promotions in Cotai, and I think that’s for various reasons. For example, Studio City is opening and they need to create awareness, to bring in people to see what they have. And they’ve come up with very creative packages.

We’ve recently launched a very creative digital marketing [campaign] to [showcase] the rich cultural part of Macau to remind people what this city was, and what were the old values. For example, for the recent [international] fireworks [contest] in the month of September we [highlighted] the firecrackers part of Macau city. It’s a digital marketing [campaign] called Hidden Faces [conducted via WeChat messager]. So it sort of reminds people that there’s more to see in Macau than gaming. WeChat is a big plaform for the Chinese, especially the current generation. The way that they get to know the world. The way that they conduct themselves and look for places to go is to information on the Internet and WeChat. Friends recommending to friends; so that they read these, and then share these. It’s very powerful. And we recognise the fact that it is the future of our guests. And we want to make sure that they get to know us more – but not in a hard-sell way. We want to tell them: ‘Look, come and visit Macau; there are

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October 26, 2015

Macau many hidden sides here that people may have forgotten’. Depending upon the time of year, the first Hidden Faces [vignette] was about the culture of firecrackers. And subsequently we talked about musicians, which is also another part of Macau culture. Moving forward, we always pick the topical issue for that period. So we’ll soon be talking about the Grand Prix [in November]. We want to do our part to promote Macau plus ourselves as a unique destination. That’s the key thing; the emotional engagement that people actually read the story behind. And that has a link to where they feel comfortable staying and when they come to visit Macau. The reception for Hidden Faces has been good since Summer. It takes time to register in people’s minds. We will continue to tell stories, and find more unique, forgotten sides of Macau.

You mentioned that Mainland China is an important source of hotel guests. But we’ve seen the trend that they’re increasingly attracted to Japan and South Korea and other short-haul destinations. Correspondingly, we see visitor arrivals to Hong Kong and Macau falling. What’s the strategy to appeal to these Chinese visitors?

I think we will continue to pride ourselves on being a non-gaming hotel in Macau, and matching the needs of the niche market coming out of China. So, they will still want to come to Macau, to come to see this city and stay in a comfortable and intimate hotel like ours.

What about the MICE business? How has Mandarin Oriental Macau approached this segment?

Our facilities are perfect for small and medium-sized meetings. So, we have a very good offering of food and beverage, and our size of meeting room is good for catering to about 200 visitors. So, not the large convention [halls] of The Venetian or Sheraton. We focus on some companies who want to conduct a couple of days of offsite meetings with top executives; so we provide comprehensive services from the state-of-theart technology to personalised service and personalised food and beverage offerings. We have definitely restructured our sales and marketing human resources to really target Southeast Asia, especially Hong Kong and the southern part of China to encourage a lot of these mediumsized to small-sized group meetings to be conducted here in the hotel. However, with the dynamic business planning in the world nowadays, everything is so short in [terms of] lead time. Nobody actually plans for a meeting months ahead. So, a lot of short lead [times] and depending upon the season, like for November, we do see a pretty healthy base on our books. We do have that. But the effort now is to continue to sell it and make our meeting packages very dynamic to meet the needs of these companies. For example, I think previously the city may have been a bit too expensive for some companies to come over. Now, it has become reasonable and affordable for them to come. And for some companies that used to travel further away for a company event, now this city has become very much part of their choices. So we are betting a lot on this segment of the business continuing to keep us busy.

Jill Goh, GM of Mandarin Oriental Macau Mrs. Goh, the new General Manager of Mandarin Oriental Macau, began her career with Mandarin Oriental Hotel Group in Singapore in 1993. Most recently, Mrs Goh was Resident Manager of Mandarin Oriental Hyde Park, London before taking on the role of Corporate Operations Manager, Asia based in Hong Kong in 2013.

In this meeting business segment Hong Kong poses competition with very good transportation and logistics links . . .

Hong Kong’s hotels are also very actively seeking this segmentation of the business to keep occupancy healthy. But I’m sure people who would consider coming to Macau would appreciate that this is a different environment. Hong Kong is very efficient and also very busy. This [Macau] is a different mood altogether. When you come to this part of the world, even though it’s just an hour away, your mood and offering here is different. You can then serve the business part, and also you can keep cool within a small island, and then have a lot of intimate dinners with close proximity from one point to another.

A lot more hotels are nearing completion, notably in Cotai. And for non-gaming hotels, we see Ascott operating here, with Crowne Plaza Macau opening in the fourth quarter. How does Mandarin Oriental Macau see this competition; what’s the strategy to attract guests?

It’s definitely competition that we cannot ignore. However, we always believe that every hotel has its own niche to work on and to capture. All this is healthy competition, in my opinion. They make this city even more interesting, with more reason for people to come. They may stay with us and dine at Wynn Palace, or have a ride on the Golden Reel in Studio City. So, this is for the prosperity of the city and we are mindful of the new supply coming to town and have prepared ourselves to continue to maintain our attractiveness. The Mandarin Oriental Hotel in the city has actually been established since 1984. So the reputation and name of Mandarin Oriental is quite a legacy in the city; people have a special attachment and loyalty to us. We continue to work on our strengths and the group of friends we have established in the city, and worldwide.

Is China where Mandarin Oriental now has the quickest pace of expansion?

We’re in Asia definitely for the next couple of years. The newer hotels in that direction, Greater China. The most recent one we opened in Asia is in Taipei – it’s a beautiful, beautiful hotel. And prior to that, we have two properties in China that opened within a short span of time: Mandarin Oriental Guangzhou in January 2013 and Mandarin Oriental Pudong in April 2013. Currently, we have three hotels in China in operation; one of them is in Sanya and opened in 2009 – a very exquisite resort in China, as well.

WeChat is a big plaform for the Chinese, especially the current generation... It’s very powerful. And we recognise the fact that it is the future of our guests. We want to make sure that they get to know us more – but not in a hard-sell way

So, in the next couple of years, we have two hotels [opening] in Beijing. Mandarin Oriental, Beijing is scheduled for a 2017 opening. The property is owned by CCTV. At the same time, this year we also signed a new management contract with Wangfujing, which is a small boutique hotel of 74 rooms opposite the Forbidden City. It will also open in 2017. We also have one in Chongqing, one in Chengdu, and one in Shenzhen. They are opening in the next two to five years.

How have the Mandarin Oriental hotels in China been doing?

They have been going from strength to strength. And we have, I must say, as a company, very quickly established ourselves in the marketplace, especially the two in cities like Shanghai and Guangzhou. These hotels have done very, very well in establishing themselves reputation-wise in the marketplace as far as the service standard of the hotels within a very short time. Both hotels are now placed number one in TripAdvisor in the city, which is a remarkable achievement for a new hotel.

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October 26, 2015

Macau Studio City given 2,000 foreign-labour quota The Human Resources Office said it had granted 2,000 quotas to gaming operator Melco Crown Entertainment to hire non-resident workers for its new project Studio City opening tomorrow. The Office told Chinese language newspaper Macao Daily that these non-resident workers could work in the new Cotai project or other properties of the gaming operator. However, it noted that the operator would also need to hire at least 2,900 new local workers otherwise the quotas approved for non-resident workers could be cut or cancelled.

Sands China workers asked to carry cash

aming operator Sands China Ltd. has ordered its slot machine workers to carry cash of HK$250,000 (US$31,127) from next month in order to distribute dividends to gamblers immediately, local gaming associations claim. The director-general of the Macau Gaming Enterprises Staff Association, Choi Kam Fu, led more than 10 slot machine workers of The Venetian Macao to meet with the city’s Labour Affairs Bureau (DSAL) last Friday, urging the government department to

stop the operator from implementing the new measure in its casinos. The Association claimed that Sands China would increase the pressure on its workers. Meanwhile, according to Mr. Choi, DSAL said it would contact the gaming operator to understand the measure as soon as possible. Another local gaming labour union, Forefront of Macau Gaming (FMG), claimed that it had also learned about the operator’s new policy, indicating not every slot machine worker had received the related orders.

“We have confirmed that Sands China is really conducting such a policy according to our members. But we are still figuring out whether it is implementing it in all of its casinos,” the vice director of FMG, Lei Kuok Keong, told Business Daily yesterday. “The company primarily asked its supervisors in the slot machine areas to carry the cash. Meanwhile, we believe the cash is only for smallamount dividends, like HK$5,000 to HK$10,000. After all, casinos usually distribute a voucher for gamblers to

exchange big-amount dividends,” he claimed. Business Daily tried to contact Sands China on the issue yesterday but it was unreachable before this story went to press. “From the company’s perspective, the policy makes work more efficient. But for workers, they are worried about the possible responsibilities of carrying cash; for example, whether they need to compensate the [company] if it is stolen or lost,” Mr. Lei said. K.L.

Neptune chairman expects improvements at “snail’s pace”

eptune junket chairman Danny Xuda Huang wrote in his statement in the company’s annual results that improvement lies “around the corner” for the VIP segment in Macau. However, this will only come at a very slow pace. “Without being overly pessimistic on the future, the business can sustain over the long term and the sector has experienced the worst period for quite some time [but] we do see improvement around the corner. However, improvements will come at a snail’s pace”, Mr. Huang wrote. At the end of September Neptune Group Ltd. had already announced it had recorded a net loss attributable to owners of the company of HK$828 million (US$103 million) during fiscal year ended June. At that time, the company said that if the situation

failed to improve they might consider leaving Macau. Among the reasons for these results, the company cited “tightening government measures on Chinese citizens gaming, regulatory oversight over gaming operators, and monetary controls in gaming premises”. The report also reveals that Neptune is considering expanding into money lending activities. “The group may consider entering into the money lending business to effectively utilise the group’s cash resources and diversify the source of the group’s income. Management may consider starting the Securities Investment business. So as to achieve a better return for the group”, according to the management discussion and analysis segment. J.S.F.

Business Daily | 9

October 26, 2015

Greater China Great Hall of People in Beijing hosting last year’s event

Growth vs. reform debate for new plan Leaders will seek to address social restrictions that obstruct growth, such as residency rules and the “one child policy” Benjamin Dooley

hina’s leaders gather from today to hash out a new Five Year Plan to battle slowing growth, and analysts say they must choose between chasing a traditional GDP target and embracing reforms such as to the “one child policy” to help the country develop its full potential. After a decades-long boom, experts say China needs to embrace further liberalisation to avoid the “middle income trap” when developing countries fail to transform their growth model to maintain their competitive edge. Implementing reforms that are necessary to ensure long-term sustainability come at a cost for current growth -- a dilemma for the ruling Communist Party, whose projected aura of competence underpins its claim to legitimacy. Julian Evans-Pritchard of Capital Economics expected the growth target to be set at or only slightly below the current goal of around seven percent. “Policymakers will struggle to meet such a high target without undermining progress on rebalancing,” he said. Five Year Plans are a holdover from the planned economy days of the past, but still provide a broad blueprint for the country, a key driver of global growth whose performance affects companies from Australia to Zimbabwe. China’s embrace of market economics and opening up to the rest of the world from the late

1970s transformed the livelihoods of hundreds of millions of people and propelled the country to global prominence, but growth has been slowing for several years. Beijing has repeatedly said it wants to transition to a “new normal” of slower, more reliable growth led by domestic consumer demand, rather than the overheated exports and state investment of the past. But in recent months questions have been raised over its ability to manage the process by stumbles such as clumsy interventions in falling stock markets.

Black cat, green cat

The Communist conclave, known as the Fifth Plenum and typically held at a Beijing hotel, brings together the ruling party’s 205-strong Central Committee and around 170 reserve members for four days from yesterday to burnish the plan, although it will not be finally approved until China’s legislature meets next year. Economic reformer Deng Xiaoping argued against ideological objections to change with the metaphor that it did not matter whether a cat was black or white, as long as it caught mice. But now the colour is critical, says Hu Angang, an economics professor at Tsinghua University who served on an experts committee that helped guide the planning process. China has become the world’s biggest polluter and its major cities are regularly blanketed by choking

China needs to transform from the world’s largest ‘black cat’ into the world’s largest ‘green cat’ Hu Angang, economics professor, Tsinghua University

smog, causing widespread public anger. “China needs to transform from the world’s largest ‘black cat’ into the world’s largest ‘green cat’,” Hu said in an email, urging a more environmentally efficient economy. “Chasing mice in the form of GDP is still important, but making the cat ‘green’ is even more important.” Leaders will also seek to address social restrictions that obstruct growth, such as residency rules and the “one child policy”, which limits most couples to a single offspring. It was introduced in the late 1970s over fears that the skyrocketing population was economically unsustainable.

After years of strict, sometimes brutal enforcement, by a dedicated government commission China’s population -- the world’s largest -- is now ageing rapidly, gender imbalances are severe, and its workforce is shrinking. The concerns led to limited reforms in 2013, including allowing a second child for some couples in urban areas, but relatively few have taken up the opportunity. Several Chinese media reports in recent weeks have cited researchers urging a two-child policy for all and Bank of America Merrill Lynch said: “We expect the one-child policy to be significantly loosened and baby-product makers should benefit.” But even a dramatic announcement does not guarantee change. China has a mixed record when it comes to achieving its planning goals, according to Anne StevensonYang, co-founder of China analysis firm J-Capital Research, and slowing growth will make it more difficult to overcome longstanding bureaucratic resistance. The failure to reform the one-child policy was a “significant emblem of paralysis in this government”, she said. “There’s no desire to have it anymore, there’s no need for it anymore. There’s a lot of loosening around the edges, but they have this bureaucracy they don’t seem to be able to get rid of.” AFP

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October 26, 2015

Greater China

Beijing cuts rates again as growth engine stalls The reserve requirement ratio was also cut by 50 basis points for all banks

hina’s central bank cut interest rates on Friday for the sixth time in less than a year, and it again lowered the amount of cash that banks must hold as reserves

in a bid to jump start growth in its stuttering economy. Monetary policy easing in the world’s second-largest economy is at its most aggressive since the 2008/09

financial crisis, as growth looks set to slip to a 25-year-low this year of under 7 percent. Yet underscoring China’s drive to deepen financial reforms, which many

believe are necessary to invigorate the economy, the People’s Bank of China (PBOC) said it was freeing the interest rate market by scrapping a ceiling on deposit rates. The change, which Beijing had promised to deliver for months, will in theory allow banks to price loans according to their risk, and remove a distortion to the price of credit that analysts say fuels wasteful investment in China. China’s policy loosening came a day after the European Central Bank said it could give a bigger policy jolt to the economy as soon as December to fight falling prices. “We’ve got half the world’s central banks in easing mode,” said Joe Rundle, the head of trading at ETX Capital in London. “And we’ll probably see more easing from China to come.” The PBOC said on its website that it was lowering the one-year benchmark bank lending rate by 25 basis points to 4.35 percent, effective from October 24. The one-year benchmark deposit rate was lowered by 25 basis points to 1.50 percent. The reserve requirement ratio (RRR) was also cut by 50 basis points for all banks, taking the ratio to 17.5 percent for the biggest lenders, while banks that lend to agricultural firms and small companies received another 50-basis-point reduction to their RRR. “In the next step, monetary policy ... will be kept not too loose or too tight to ensure stable economic growth,” the PBOC said in a separate questionand-answer session. It added that China’s current muted consumer inflation and falling market interest rates provided a window for the country to liberalize its deposit rates. Reuters

Home prices rise for 5th month in September First-tier cities fared better, with Shenzhen being the top performer Xiaoyi Shao and Nicholas Heath

ome prices in China rose for a fifth consecutive month in September, suggesting a mild recovery in the housing market that will relieve some pressure on the struggling economy. The sector, which accounts for 15 percent of GDP, has become a rare bright spot in an economy that is expected to grow at its slowest pace in 25 years this year. But it may be some time before it begins contributing to broader activity again. Average new home prices inched up 0.3 percent in September from August, according to Reuters calculations based on data released by the National Statistics Bureau (NBS) on Friday. That matched the pace in August. Month-on-month price gains were recorded in 39 of the 70 cities surveyed, up from 35 in August. However, while home prices and sales have improved in recent months after a barrage of government support measures, conditions remain weak in smaller cities

and a huge overhang of unsold houses is discouraging new investment and construction. In a sign property investment might be bottoming out, new construction rose 15.3 percent in September from the same period a year ago, the first such growth in nearly a year, Reuters calculations based on official data showed. Central bank figures also showed that bank lending to the property market increased in the third quarter by 20.9

percent from a year earlier, quickening from 19.4 percent in the second quarter.

Mixed outlook

Economists at ING said a revival in new home starts could point the way for property to become an economic growth driver again next year, boosting demand for construction materials from cement to steel. But single-month data, derived from cumulative figures, can be volatile, and

economists are divided on the outlook. Price gains in China’s bigger cities may have passed their peak, economists at Nomura said, noting price growth in Tier-1 cities eased to 2.0 percent in September month-on-month from 2.1 percent in August. Stabilising home prices may only imply that housing demand has returned to more normal levels after being driven higher by earlier policy easing, Nomura said,

noting growth in property sales has also been easing from its recent July peak. “This reinforces our view that property investment growth may turn negative in 2016,” they said. Ma Jun, the chief economist at the People’s Bank of China (PBOC), conceded that the weak property investment was the main source of downward pressure weighing on the economy but said he expected investment to improve in coming months. Major Chinese construction machinery maker Zoomlion Heavy Industry Co said last week it expected to report a loss in the third quarter due to the weakness in the yuan and a supply glut at home. A breakdown of NBS data also pointed to continued weakness in property markets in smaller cities where the glut of unsold houses is believed to be the highest. Prices in Shenzhen were up 37.6 percent in September from a year earlier, compared with a 31.3 percent rise the previous month. Reuters

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October 26, 2015

Greater China Central bank sees 'very normal' 6-7 percent growth in next few years

C.bank calls for close attention to financial sector risks

The PBOC’s vice governor said China in the future would lower the reserve requirement ratio for banks, the amount of cash that major lenders need to keep on hand - at a "normal" pace Koh Gui Qing

U.S. pork to be resumed

hina will be able to keep annual economic growth at around 6-7 percent over the next three to five years, a top People’s Bank of China (PBOC) policymaker said on Saturday, a day after the bank cut interest rates for the sixth time in less than a year. The comments from Yi Gang, vice governor of the People’s Bank of China, appeared to be aimed at reassuring investors this level of growth, China’s slowest pace in two decades but still faster than other major economies, is the Chinese economy’s “new normal”. “China’s future economic growth will still be relatively quick. Around seven, six-point-something. These will all be very normal,” he told a conference in Beijing. As well as cutting interest rates on Friday, the PBOC lowered the amount of cash that banks must hold as reserves. Monetary policy easing in the world’s second-largest economy is at

its most aggressive since the 2008/09 financial crisis, as growth looks set to slip to a 25-year-low this year of under 7 percent. “Our reserve requirement ratio is still at a relatively high level so there is still room to lower the RRR. In future, we will proceed to lower the RRR at a normal pace,” he said. Yi said the PBOC planned to keep interest rates at a reasonable level to reduce the corporate debt burden, and noted that interest rate liberalisation does not mean that the central bank would reduce regulation of rates. China will also continue to set

benchmark lending and deposit rates for some time, he said, but these rates would not restrict market pricing. Yi noted that China’s stock market, which has fallen sharply since June, had completed most of its adjustments and that the yuan, which was buffeted in the wake of a surprise devaluation in early August, had “basically” stabilised. “Following August 11, our original intention was to pursue market reforms. But after that, we realised there was a relatively big depreciation pressure (on the yuan), and so we decided to resolutely stabilise the yuan,” he said. The PBOC was looking into leverage levels in the debt market, Yi noted. He said that China did not have exceptionally high debt levels, and while the bank was not overly anxious about cutting the level of leverage in the economy, the overall strategy is to stabilise leverage levels. Reuters

Premier Li says 7 pct growth goal never set in stone The statements come at a time of growing concern in global financial markets over China’s once mighty economic juggernaut

hina has never said the economy must grow seven percent this year, Premier Li Keqiang said in comments reported by the government ahead of a key meeting this week that will set economic and social targets for the next five years. Li’s comments coincide with remarks by a top central bank official, who said on Saturday that China would be able to keep annual economic growth at around 6-7 percent over that period. China cut interest rates for the sixth time in less than a year on Friday. Monetary policy easing in the world’s second-largest economy is at its most aggressive since the 2008/09 financial crisis, as growth looks set to slip to a 25-year-low this year of under 7 percent. China’s economy grew 6.9 percent in the July-to-September quarter from a year earlier, data showed last week. Speaking on Friday at the Central Party School, which trains rising officials, Li said the economic difficulties ahead for China should not be underestimated. His report to the annual meeting of parliament set this year’s GDP growth target at about seven percent. “We have never said that we

China needs to pay close attention to risks in its financial sector due to the current international and domestic economic situation, the country’s central bank quoted its deputy governor as saying. Pan Gongsheng, deputy governor of the People’s Bank of China, made the comments at a meeting about the financial sector on October 20. The central bank reported the meeting on Friday.

should defend to the death any goal, but that the economy should operate within a reasonable range,” the central government paraphrased Li as saying in a statement released on its website late on Saturday. Chinese leaders will signal that growth is their priority over reform by setting a growth target of around 7 percent in the next long-term plan, policy insiders say.

“New normal”

China’s economic growth has not been bad over the last year considering the problems in the global economy, Li added. There were reasons for optimism going forward, such as rising employment, more spending on tourism and a fast growing service sector, Li said. “The hard work of people up and down the country and the enormous potential of China’s economy gives us more confidence that we can overcome the various difficulties,” he said. While the government has flagged a “new normal” of slower growth as it tries to shift the economy to sustainable, consumption-led growth, official data shows it has consistently at least met, and mostly exceeded, the growth targets it sets.

KEY POINTS China should not “defend to the death any goal” - Premier Li Economy should operate within a reasonable range - Li His comments come ahead of key meeting to set growth goals China cut interest rates on Friday, sixth time in less than year Also liberalised interest rate market

Beijing needs average growth of close to 7 percent over the next five years to hit a previously declared goal of doubling gross domestic product and per capita income by 2020 from 2010. Reuters

China, the world’s largest pork consumer, will soon resume imports from 14 U.S. pork plants and warehouses, after halting some shipments last year over the use of a feed additive, the U.S. Department of Agriculture said on Friday. The USDA did not provide a date on which China will resume the imports. China’s decision will “mean a significant boost in sales for American pork producers,” the USDA said. The agency touted “China’s recognition of strong regulatory controls and the high quality of U.S. pork.”

Cut on-grid power tariffs before end of year China may cut on-grid wholesale prices of thermal electricity for the second time this year, state media said on Friday, a move which could reinforce the downward trend in coal prices and hit struggling coal mines. More than 70 percent of coal mines have suffered losses in the first half of the year. The country’s State Council has proposed cutting benchmark on-grid prices, perhaps by an average of 0.03 yuan per kilowatt hour, from November at the earliest, the state-run Economic Information Daily said.

AgBank Q3 net profit up 1 pct Agricultural Bank of China Ltd, the country’s third-biggest lender by assets, reported a 1.0 percent rise in third-quarter net profit, in line with analysts’ estimates. The first of China’s five biggest banks to report quarterly earnings, AgBank said its net profit for the June-September period was 48.90 billion yuan (US$7.70 billion), compared with 48.41 billion yuan in the year-ago period. Analysts at Pingan Securities and China Merchants Securities expected an on-year 0.2 percent growth in net profit in the third quarter. AgBank said the non-performing loan ratio increased to 2.02 percent at the end of September.

Zhongwang evading aluminium import duties U.S. aluminium extruders have accused Zhongwang Group, the world’s second largest producer of aluminium extrusions, of evading U.S. import duties, firing the first salvo in a dispute over China’s ballooning exports. In a petition filed with the U.S. Commerce Department late, the U.S. Aluminium Extruders Council (AEC) alleged China Zhongwang Holdings Ltd is shipping extruded aluminium products, including pallets and 5050 alloy extrusions, into the United States without paying duties. The complaint asked the government to clarify that pallets and 5050 alloys are subject to the antidumping and countervailing duties introduced in 2011. That ruling marked a major victory for U.S. extruders that argued Chinese exports were unfairly subsidized.

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October 26, 2015

Asia Cambodian PM embarks upon visit to France Cambodian Prime Minister Hun Sen left here Saturday night for a visit to France where he will witness a signing ceremony of six agreements between the two countries. “Over there, I will hold talks with French President Francois Hollande on bilateral relations and cooperation between Cambodia and France, and will preside over a signing ceremony of several agreements,” the prime minister said in a video clip posted on his Facebook page on Saturday afternoon. During his stay in France, which run through Tuesday, the prime minister will also meet with French company representatives.

Vietnam’s October inflation stays flat on year Vietnam’s inflation stayed at 0 percent in October, unchanged from a year earlier, figures of the General Statistics Office showed on Saturday. However, the consumer price index (CPI), the main gauge of inflation, increased by 0.11 percent on a monthly basis, the statistics agency said on its website. Vietnamese Prime Minister Nguyen Tan Dung said recently the country’s inflation this year would be at 2 percent.

Japan, Turkmenistan sign deals on energy Japan and Turkmenistan on Friday signed deals worth over US$18 billion on a package of projects in the energy-rich central Asian nation, which has become an important supplier of natural gas to China. Turkmenistan, a reclusive nation of 5.5 million, holds the world’s fourth-largest reserves of natural gas. Since independence in 1991, it has launched ambitious projects to process the commodity at home and find new export routes. Japanese Prime Minister Shinzo Abe was starting a tour of the five post-Soviet Central Asian nations where former imperial master Russia and China are vying for clout.

Unipec oil trading head Zhang Nie resigns Zhang Nie, the Singapore oil trading head of Chinese state trader Unipec has resigned from the company after working there for 10 years, industry sources said on Friday. Zhang, who is also the team leader of middle distillates for the company’s global book, resigned last week for “family reasons” and will be with the company until end of the year, one of the sources said. A replacement for Zhang, who has been trading head of Unipec Singapore for about five years, has not been identified yet, the sources said. Before joining Unipec, he was with its parent company Sinopec.

DBS, South Africa’s FirstRand in talks to buy RBS India Michelle Price and Sumeet Chatterjee

ingapore’s biggest lender DBS Group Holdings and South African banking group FirstRand are in separate talks to buy Royal Bank of Scotland Group Plc’s India unit, people with direct knowledge of the matter told Reuters. Financial details of the transaction were not immediately clear, though one of the people said the deal could fetch about US$200 million. An Indian private sector lender is also likely to bid for the unit, another source directly involved in the process said, declining to give details. The sources declined to be named as the talks are not yet public. RBS, 73 percent owned by the British government, said in February it would shrink its banking operations, pulling out of about 25 countries including India to help it refocus on lending in Britain.

The India business of RBS is comprised of corporate and institutional banking, trade finance and cash management. The planned sell-off of RBS’s India assets will not involve its back-office outsourcing business in India, said the sources. Last year, RBS’s net balance sheet exposure in India fell by 1.7 billion pounds (US$2.6 billion) to 2 billion pounds due to a drop in corporate lending, particularly in the oil and gas and mining and metals sectors, according to its annual report. RBS was rescued by a 46 billion pound British government bailout during the 2007/09 financial crisis, before which it was briefly among the world’s biggest banks by assets after M&A-backed expansion and aggressive lending. It has faced a

long struggle back to health involving slashing its loan book and boosting capital ratios. Chief Executive Ross McEwan has narrowed the Edinburghbased bank’s focus to UK retail and commercial banking and it has slashed the size of its investment bank and sold businesses in the United States and around the world. As part of its strategy to pull back from some foreign markets, RBS has been paring its presence in India in the recent past and last month it announced the sale of its Indian private banking unit. In 2013, Ratnakar Bank Ltd, a small-sized Indian private sector lender whose top ranks are filled executives from Wall Street banks, acquired RBS’s Indian credit cards, mortgage and commercial banking portfolios. The deal with Ratnakar Bank came after RBS’s divestment of its Indian retail and commercial banking operations to HSBC Holdings Plc fell through in 2012, more than two years after it was struck. The takeover of RBS’s corporate banking business in India, if completed, would help the local units of foreign lenders DBS or FirstRand compete better with bigger Indian rivals, most of whom are state-owned, banking sector experts said. DBS, FirstRand and RBS declined to comment. Reuters

S&P says Japan needs to raise tax revenue with sales tax hike Japan’s government plans to raise the nationwide sales tax to 10 percent from 8 percent in 2017 Stanley White

apan needs to use a planned increase in its sales tax to boost government revenue and lower its outstanding debt burden, ratings agency Standard & Poor’s said on Friday. Exempting some food items from a tax increase scheduled in 2017 could prove a positive step by making it easier for voters to accept higher taxes, KimEng Tan, S&P’s Asia-Pacific senior director of sovereign ratings, said in an interview. However, tax exemptions will pose an administrative cost to companies

and the government as they have to decided which items to exempt and set up a system to deal with multiple tax rates, Tan said. “The important thing is the sales tax must bring in revenue to bring down debt level,” Tan said. “Exempting some items from the sales tax hike is not unusual, but any time you exempt something, you make it more expensive to enforce the system.” S&P last month cut its rating on Japan from AA- to A+, which is four notches below its top rating of AAA, because it doubts the government’s will reverse economic deterioration. The agency raised its outlook to stable from negative. The stable outlook means Japan’s rating is unlikely to change for the next one to two years, but S&P will review it annually, Tan said. Japan’s government plans to raise the nationwide sales tax to 10 percent from 8 percent in 2017 to pay for rising

welfare spending, and Prime Minister Shinzo Abe wants to exclude some food from this tax hike to help low-income households. Abe’s government aims to return to a primary budget surplus in fiscal 2020 and then lower the debt-GDP ratio, the world’s worst, at around twice the size of Japan’s US$5-trillion economy. It is important for the government to meet this target and encourage strong economic growth to boost tax revenues, Tan said. Abe also plans to lower the corporate tax rate to spur companies to invest more, but Tan expressed doubt this would work because large companies already have a lot of savings. Japan’s consumer prices have started falling recently, partly because of lower oil prices, but the government needs to ensure a moderate level of inflation, as this implies more economic activity, making it easier to cut the debt burden, Tan 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 26, 2015

Asia

Malaysia’s Najib frames popular budget to shore up support The 2016 budget allocation was put at 267.2 billion ringgit, 6.5 billion ringgit more than in 2015

alays ia’s Prime Minister Najib Razak delivered a budget on Friday that gave cash to low income families and taxed the rich, but opponents criticised his failure to explain away a scandal over millions of dollars deposited in his bank accounts. Slumping revenues from oil and gas - Malaysia is Southeast Asia’s second largest oil producer and the world’s second largest exporter of liquefied natural gas - persuaded Najib to raise personal tax rates by one to three percentage point for higher earners. “This budget and future budgets will be premised on striking a balance between the capital economy and people economy,” the embattled prime minister told parliament. Najib has been under fire over allegations of corruption at 1Malaysia Development Bhd (1MDB), the indebted state fund whose advisory board he chairs. His opponents are demanding he step down after the Wall Street Journal reported in July that nearly US$700 million was moved into his personal bank accounts. Criticism of his leadership could be soothed by the budget spending plans, which included increased cash support for low income families, extra funds for affordable housing projects and higher development expenditure, more pay for the Malaysia’s 1.6 million civil servants, and heavy

investment in the farm sector. The target to lower the fiscal deficit to 3.1 percent of gross domestic product in 2016 from 3.2 percent this year, and 3.4 percent in 2014 could help Malaysia hold on to its investment grade credit rating.

Thinning external surplus

Worryingly, the government released an economic report that forecast Malaysia’s current account surplus would be more than halved to 11.3 billion ringgit (US$2.63 billion) in 2016, extending a negative trend that has been a key factor behind the ringgit’s 17 percent fall this year.

More positively, the report predicted economic growth of 4.0 to 5.0 percent next year barely changed expectations for this year. Low oil prices, the slowdown in China, and weak demand in developed nations have all weighed on Malaysia’s economy, pressuring finances. The 2016 budget allocation was put at 267.2 billion ringgit, 6.5 billion ringgit more than in 2015. Revenues are projected at 225.7 billion ringgit in 2016, an increase of 3.2 billion ringgit over 2015. Najib said the portion of total government revenues

derived from oil and gas would fall to 14.1 percent in 2016, down from 19.7 percent in 2015. However, a highly unpopular sales tax, introduced in April, is expected to raise 39 billion in 2016, as against 27 billion ringgit in eight months this year.

Ignored “elephant”

Opposition leaders have called on all parliamentarians to reject Najib’s budget as a show of no confidence against him. They have also launched moves to bring a formal confidence vote. Najib would likely survive any trust vote, but he still

Reuters

Malaysia Prime Minister Najib Razak (R) addresses the members of Parliament at the Parliament House in Kuala Lumpur, Malaysia, 23 October 2015

Japan’s finance minister voices caution over further easing Minister’s remarks came amid speculation that the central bank may embark on a fresh round of quantitative easing Tetsushi Kajimoto

needs to convince worried members of the ruling United Malays National Organisation (UMNO) that he can overcome the 1MDB scandal to lead them into an election due by 2018. “The Prime Minister did not see it fit to take on the massive elephants in the room,” said Tony Pua, member of parliament with the opposition Democratic Alliance Party. Pua said the absence of an explanation for the allegations surrounding 1MDB will only “fail to lift local and international investor confidence”, rendering the budget a non-event.

inance Minister Taro Aso voiced caution about the merits of further stimulus by the Bank of Japan (BOJ), saying that monetary policy alone could not achieve its 2 percent inflation target. Aso’s remarks came amid speculation that the BOJ may embark on a fresh round of quantitative easing at its policy meeting on October 30

in a bid to nudge inflation up toward the target next year. “There’s limit to what monetary policy can do to boost prices,” Aso told reporters on Friday after a cabinet meeting. “In the current situation, it is hard to hit the original aim with the BOJ’s monetary easing alone.” Given that oil prices have halved since last year it is difficult to boost

prices, although cheaper oil is positive for resource-poor Japan, he said. Aso said it was up to the BOJ to decide policy, when asked whether the BOJ should deploy fresh monetary stimulus now. Etsuro Honda, a leading economic adviser to Prime Minister Shinzo Abe, also said there was no need for the BOJ to ease policy further now, Kyodo news agency reported on Friday.

Instead, Honda called for steps to support low-income groups to stimulate private consumption as the economy stalls. “These remarks probably reflect the government’s worry about further yen weakening,” said Hidenobu Tokuda, senior economist at Mizuho Research Institute. “Fresh monetary stimulus would weaken the yen further, which should boost costs of food and necessities, hitting household consumption harder.” More efforts were needed to boost demand by encouraging companies to spend their cash piles on raising wages and workers’ disposable income, which should in turn help boost prices, Aso said. “It’s not that there’s no money out there, but there’s no demand. Therefore prices won’t rise. Governor (Haruhiko) Kuroda must be thinking a lot about that.” There was no need for the central bank to change the price goal, Aso said, adding that the BOJ should persist with its strategy until the target is achieved. Reuters

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October 26, 2015

International U.S. oil drillers slow pace of rig cuts U.S. energy firms reduced oil rigs for an eighth week in a row this week but slowed the rate of those cuts to just one rig, data showed on Friday, a sign some drillers may soon return to the well pad with hopes of rising crude prices in the future. The total rig count for the week ended October 23 fell to 594, the least since July 2010. Over the past eight weeks, drillers cut a total of 81 rigs, oil services company Baker Hughes Inc said in its closely followed report.

UK rate rise not a certainty says BoE’s Carney An increase in Britain’s rock-bottom interest rates is not guaranteed although households should prepare for higher borrowing costs, Bank of England Governor Mark Carney said in comments published on Saturday. “If we think there is a prospect, a possibility - that’s a possibility not a certainty - of rate rises, then that is far, far better to let the British people know so they can prepare,” he said in an interview with the Mail on Sunday newspaper. Carney has previously said that a decision about when to raise rates would become clearer around the turn of the year.

Austrian oil giant OMV, Gazprom sign MoU Austrian oil and gas giant OMV on Friday signed a Memorandum of Understanding (MoU) on oil supply with Russian stateowned Gazprom in Vienna. OMV Chairman Rainer Seele and Gazprom Chairman Alexey Miller signed the MoU that shows the intent of both parties to consider the possibility of oil supply to OMV from the Gazprom Group portfolio, OMV said in a press release. The two company leaders also discussed cooperation on the Nord Stream-2 gas pipeline project, which was agreed upon in early September in conjunction with other large European companies such as EON AG, BASF, Shell and Engie.

Ex-Rabobank traders to testify in Libor trial Two former Rabobank traders from Britain facing U.S. charges that they engaged in a scheme to manipulate Libor interest rates plan to testify in their own defence, their lawyers said on Friday. Their disclosure came as prosecutors said they were prepared to rest today in presenting their case in Manhattan federal court against the two traders on trial, Anthony Allen and Anthony Conti. The traders are the first to face trial in the United States following a global investigation into whether various banks submitted artificial rate estimates to bolster profits on trading derivatives tied to Libor.

VW to freeze promotions due to emissions scandal Volkswagen will freeze managerial promotions next year at its VW division as part of a savings drive to help meet more than 30 billion euros of costs arising from the diesel emissions tests scandal, a German business magazine said on Saturday. The German company also plans to re-use as many parts as possible in the next generation of its popular Golf model to save hundreds of millions of euros, according to the Manager Magazin report, which cited Volkswagen sources. The company has already set aside US$7.2 billion to pay for fallout from the scandal.

Rare split at Federal Reserve ahead of policy meeting US exports continued to slow due to the strong dollar, and with them industrial output

ederal Reserve Chair Janet Yellen faces a rare open split among her team of policymakers as they head into a meeting Tuesday and Wednesday to again weigh raising interest rates. A new wave of doubts about the US economy among several Fed officials is almost certain to see the central bank again put off the decision for its first hike in the benchmark federal funds rate in nine years, analysts say. A rate cut Friday by the People’s Bank of China and signals the day before that the European Central Bank is leaning toward lower rates or more stimulus boost the argument that the world economy, and the US in turn, remains vulnerable and would not benefit from a higher US rate. Many analysts are now betting the Federal Open Market Committee’s first step to begin lifting the fed funds rate up from the 0-0.25 percent level will not happen until next year. “It is highly unlikely that the FOMC will announce a change in the federal funds target range at the 27-28 October policy meeting,” said financial analysts at Nomura. The Fed message “will show a marking down in the Fed’s assessment of economic activity and the strength of the labour market,” with some blame put on the soft global economy, predicts Deutsche Bank. That is not where Yellen, now in her second year at the head of the Fed, expected to be, nearly seven years after the fed funds rate was slashed to zero to combat the Great Recession. A year ago FOMC members were confident enough in US growth that, on average, they were predicting the fed funds rate would be at 1.25 percent by the end of 2015. Following the FOMC meeting in September Yellen said she was still

Lael Brainard (pictured) and Daniel Tarullo, to come out firmly on the side of waiting until 2016

confident that US growth data would justify a rate increase by the end of the year. The FOMC appeared to be only marginally on the side of waiting, some members wanting to see just a bit more evidence from economic data that the US economy was ready. But within weeks there were more signs of the global malaise spilling over into the US economy. US exports continued to slow due to the strong dollar, and with them industrial output. Inflation, which the Fed wants to rise as a sign of strength, fell. August and September job creation was more feeble than expected, and workers’ wages -- another crucial gauge of

strength -- also remained stubbornly flat. That stirred two of the five Fed governors, Lael Brainard and Daniel Tarullo, to come out firmly on the side of waiting until 2016. Tarullo said in a television interview that he “wouldn’t expect it would be appropriate to raise rates” before next year. And Brainard, the newest member of the board, said in a speech that the downside risks to the economy “make a strong case for continuing to carefully nurture the US recovery -- and argue against prematurely taking away the support that has been so critical to its vitality.” AFP

U.S. House to start voting today on revival of shuttered trade bank House passage could move Congress toward reopening the bank, which offers loans, loan guarantees and trade insurance to U.S. exporters and buyers

.S. lawmakers will begin voting today on legislation to revive the shuttered ExportImport Bank, a spokeswoman for a leading Republican backer of the bank said on Friday. A so-called “discharge petition,” a procedural manoeuvre that has been successful only a handful of times in the past century, to renew the trade bank’s charter matures today. The petition has support from 218 lawmakers, a majority of the chamber, including 42 Republicans, effectively overruling House Financial Services Committee Chairman Jeb Hensarling, a vocal critic of the bank. Representative Stephen Fincher, who circulated the petition, will start

the voting process with a floor motion today, his spokeswoman said. There could be several procedural votes before a vote on final House passage, possibly on Tuesday. House passage could move Congress toward reopening the bank, which offers loans, loan guarantees and trade insurance to U.S. exporters and buyers of U.S. goods such as Caterpillar Inc heavy equipment and Boeing Co airplanes. But the effort to renew the bank’s charter faces obstacles in the Senate, where Majority Leader Mitch McConnell is among those who oppose it. The bank’s charter expired on June 30, after Hensarling refused to move legislation to extend it, and

it has been unable to conduct new business for more than three months. Several companies have announced the loss of export contracts due to the resulting lack of financing. Some conservative Republicans and political groups have targeted the bank as an example of “corporate welfare” for large, wealthy companies although supporters point out it also supports small businesses. The move to force a House vote reviving the Export-Import Bank’s charter is unusual. “This is what happens when one chairman refuses to acknowledge the desires of twothirds of the House and Senate,” Republican Representative Mike Simpson said. Reuters

Business Daily | 15

October 26, 2015

Opinion Business

wires

Schäuble’s gathering storm

Leading reports from Asia’s best business newspapers

Yanis Varoufakis

Former finance minister of Greece, is Professor of Economics at the University of Athens

THE KOREA HERALD The corporate earnings outlook for the fourth quarter of this year has turned bleaker amid a series of weak third-quarter performance reports by major South Korean companies, a market tracker said yesterday. FnGuide, which provides financial information, said 128 major listed companies, for which more than two brokerages houses have offered earnings estimates, are projected to register a combined operating profit of 27.4 trillion won (US$24.3 billion) for the OctoberDecember period. The number is down 1.18 percent from an estimate made a month earlier and 4.05 percent from a prediction three months earlier.

PHILSTAR The Association of Southeast Asian Nations (Asean) has renewed for the fifth time the short-term foreign exchange liquidity support for member countries experiencing balance of payments difficulties. The Bangko Sentral ng Pilipinas (BSP) and other Asean member central banks signed the fifth supplemental memorandum of understanding on the Asean Swap Arrangement (ASA) last October 8. BSP Governor Amando Tetangco Jr. signed the memorandum extending the ASA for two years starting November 7. The ASA involves the provision of US$2 billion short-term foreign exchange liquidity support for Asean member countries that experience balance of payments difficulties.

THE TIMES OF INDIA Bank employees will observe a country-wide strike on December 2, a leading union said. All-India Bank Employees Association (AIBEA) General Secretary C H Venkatchalam said the strike call is to press for addressing issues like de-linking associate banks from State Bank of India (SBI) and extending compassionate appointments as per government guidelines. Separately, the State Sector Bank Employees Association (SSBEA) has also given a call for strike on two days (December 1 and 2) in SBI’s associate banks, its Chairman Mahesh Mishra said.

TAIPEI TIMES Chinese Nationalist Party (KMT) Chairman Eric Chu was trailing his Democratic Progressive Party (DPP) counterpart by 18 percentage points, the latest survey conducted by the Chinese-language China Times regarding support for presidential candidates published yesterday showed. The results showed that 38.9 percent of respondents said they would vote for DPP presidential candidate Tsai Ing-wen, 21.8 percent for Chu and 8.8 percent for People First Party Chairman James Soong. If a “pan-blue integration” were to occur, meaning that Soong withdraws from the race, both Tsai and Chu’s support would increase.

urope’s crisis is poised to enter its most dangerous phase. After forcing Greece to accept another “extend-and-pretend” bailout agreement, fresh battle lines are being drawn. And, with the refugee influx exposing the damage caused by divergent economic prospects and skyhigh youth unemployment in Europe’s periphery, the ramifications are ominous, as recent statements by three European politicians – Italian Prime Minister Matteo Renzi, French Economy Minister Emmanuel Macron, and German Finance Minister Wolfgang Schäuble – have made clear. Renzi has come close to demolishing, at least rhetorically, the fiscal rules that Germany has defended for so long. In a remarkable act of defiance, he threatened that if the European Commission rejected Italy’s national budget, he would resubmit it without change. This was not the first time Renzi had alienated Germany’s leaders. And it was no accident that his statement followed a months-long effort by his own finance minister, Pier Carlo Padoan, to demonstrate Italy’s commitment to the eurozone’s German-backed “rules.” Renzi understands that adherence to German-inspired parsimony is leading Italy’s economy and public finances into deeper stagnation, accompanied by further deterioration of the debtto-GDP ratio. A consummate politician, Renzi knows that this is a short path to electoral disaster. Macron is very different from Renzi in both style and substance. A banker-turnedpolitician, he is President François Hollande’s only minister who combines a serious understanding of France’s and Europe’s macroeconomic challenges with a reputation in Germany as a reformer and skilful interlocutor. So when he speaks of an impending

religious war in Europe, between the Calvinist Germandominated northeast and the largely Catholic periphery, it is time to take notice. Schäuble’s recent statements about the European economy’s current trajectory similarly highlight Europe’s cul-de-sac. For years, Schäuble has played a long game to realize his vision of the optimal architecture Europe can achieve within the political and cultural constraints that he takes as given. The “Schäuble plan,” as I have dubbed it, calls for a limited political union to support the euro. In brief, Schäuble favours a formalized Eurogroup (composed of the eurozone’s finance ministers), presided over by a president who wields veto power – legitimized by a Euro Chamber comprising parliamentarians from the eurozone member states – over national budgets. In exchange for forfeiting control over their budgets, Schäuble offers France and Italy – the primary targets of his plan – the promise of a small eurozone-wide common budget that would partly fund unemployment and depositinsurance schemes. Such a disciplinarian, minimalist political union does not go down well in France, where elites have always resisted forfeiting sovereignty. While politicians like Macron have moved a long way toward accepting the need to transfer powers over national budgets to the “centre,” they fear that Schäuble’s plan asks too much and offers too little: severe limits on France’s fiscal space and a macroeconomically insignificant common budget. But even if Macron could persuade Hollande to accept Schäuble’s plan, it is not clear whether German Chancellor Angela Merkel would consent to it. Schäuble’s ideas have so far failed to persuade her or, indeed, the Bundesbank (which, through its president, Jens Weidmann, has been hugely

Germany’s commitment to “rules” that are incompatible with the eurozone’s survival undermines those French and Italian politicians who were, until recently, hoping for an alliance with Europe’s largest economy

negative toward any degree of fiscal mutualisation, even the limited version that Schäuble is willing to trade for control over the French and Italian budgets). Caught between a reluctant German chancellor and an indisposed France, Schäuble imagined that the turbulence caused by a Greek exit from the eurozone would help persuade the French, as well as his cabinet colleagues, of his plan’s necessity. Now, while waiting for the current Greek “program” to collapse under the weight of its inherent contradictions, Germany’s finance ministry is preparing for the battles ahead. In September, Schäuble distributed to his Eurogroup colleagues an outline of three

proposals for preventing a new euro crisis. First, eurozone government bonds should include clauses that make it easy to “bail in” bondholders. Second, the European Central Bank’s rules ought to be altered to prevent commercial banks from counting such bonds as ultra-safe, liquid assets. And, third, Europe should ditch the idea of common deposit insurance, replacing it with a commitment to let banks fail when they no longer fulfil the ECB’s collateral rules. Implementing these proposals in, say, 1999, might have limited the gush of capital to the periphery immediately following the single currency’s introduction. Alas, in 2015, given the eurozone members’ legacy public debts and banking losses, such a scheme would cause a deeper recession in the periphery and almost certainly lead to the monetary union’s breakup. Exasperated by Schäuble’s backtracking from his own plan for political union, Macron recently vented his frustration: “The Calvinists want to make others pay until the end of their life,” he complained. “They want reforms with no contributions toward any solidarity.” The most troubling aspect of Renzi’s and Macron’s statements is the hopelessness they convey. Renzi’s defiance of fiscal rules that push Italy further into an avoidable debt-deflationary spiral is understandable; but, in the absence of proposals for alternative rules, it leads nowhere. Macron’s difficulty is that there seems to be no set of painful reforms that he can offer Schäuble to persuade the German government to accept the degree of surplus recycling necessary to stabilize France and the eurozone. Meanwhile, Germany’s commitment to “rules” that are incompatible with the eurozone’s survival undermines those French and Italian politicians who were, until recently, hoping for an alliance with Europe’s largest economy. Some, like Renzi, respond with acts of blind rebellion. Others, like Macron, are beginning gloomily to accept that the eurozone’s current institutional framework and policy mix will ultimately lead either to a formal breakup or to a death by a thousand cuts, in the form of continued economic divergence. The silver lining in the gathering storm cloud is that minimalist proposals for political union, like Schäuble’s plan, are losing ground. Nothing short of macroeconomically significant institutional reforms will stabilize Europe. And only a pan-European democratic alliance of citizens can generate the groundswell needed for such reforms to take root. Project Syndicate

16 | Business Daily

October 26, 2015

Closing Too soon for India to mint its own gold coins, says PM

China’s vice premier meets IUCN Director-General

Indian Prime Minister Narendra Modi said yesterday that the country will soon mint its own gold coins and introduce its own gold bullion. “It has been 70 years since Independence and still we are using foreign minted gold coins and bullion. Why can’t we have our own?” Modi said in his monthly radio address to the nation. “India will mint its own gold coins that will carry the Ashok Chakra (national) emblem. The coins will be of 5 g and 10 g in weight,” he added. The prime minister also said that the country’s ambitious gold monetization scheme - which will allow people to deposit gold in banks and earn interest from it - will soon be implemented.

Chinese Vice Premier Wang Yang yesterday met with the Director-General of the International Union for Conservation of Nature (IUCN) Inger Anderson and representatives who attended the first World Forum on Ecosystem Governance in Beijing. In the Great Hall of the People, Wang said the Chinese government has attached great importance to environmental protection. China is willing to enhance cooperation with the IUCN on the governance of global ecosystem, said Wang, adding that he hopes the forum will fully play the role of an international platform so as to promote the global sustainable development.

Ethiopian Airlines targets Asia with new Chinese crew Because of China’s ever-expanding investments across Africa, the Chinese community has grown steadily in the continent Karim Lebhour

frica’s flourishing Ethiopian Airlines is clear -- the future lies with China and it plans to hit home that point by putting Chinese crew members on all flights to China as of next month. “Asia and particularly China is our focus. This is our biggest market,” CEO Tewolde Gebremariam told AFP. The Addis Ababa-based company already has flights to Beijing, Shanghai, Hong Kong and Guangzhou. Now the airline is training Chinese crews for its Chinabound flights, because “90 percent of passengers flying to China don’t speak English”. “They don’t understand the safety instructions,” Gebremariam said, adding that they needed teams that speak their language and “understand their culture”. Some 30 young Chinese recruits are completing their

An Ethiopian Airlines plane at Hong Kong Airport

training at the Ethiopian Airlines aviation academy. “I chose Ethiopian Airlines because I want an international experience,” said He Xupeng, who left a Chinese company back home to join the African air carrier. China has invested heavily in major construction projects in Africa, one of the latest being sub-Saharan Africa’s first modern tramway, a US$475-

million scheme largely funded by China’s Exim bank that opened last month in the Ethiopian capital. Beijing sees Africa as a key source of natural resources and raw materials and even built the US$200 million African Union headquarters in Addis Ababa in 2012 as a gift expressing “friendship to the African people”. Because of China’s ever-

expanding investments across the continent, the Chinese community has grown steadily in Africa, as has the market for flights to and from Asia.

Junction of Africa and Asia

At the Ethiopian Airlines training centre, Africa’s sole centre to boast a Boeing 787 simulator, there are pilots, technicians and flight crew of 49 nationalities.

Communist party paper says China should join TPP

Philippines cancels flights, alerts hospitals over haze

The country has come a long way from the global headlines generated by Ethiopia’s 1984 famine, experiencing near-doubledigit economic growth and huge infrastructure investment that have made it one of Africa’s top-performing economies and a magnet for foreign investment. Ethiopian now boasts the largest fleet in Africa, with 77 aircraft. It has grown rapidly, acquiring 32 new planes since 2010. With six million passengers in 2014, it aims to surpass other major African airlines such as EgyptAir and South African Airways -- which count seven million passengers. Gebremariam said he wants to make Ethiopian Airlines the primary carrier between Africa and Asia. “We’re the best point of entry for the continent,” Gebremariam said. “Addis is situated at the junction point between the emerging economies of Africa and Asia.” In addition to its 91 international destinations, the company hopes to add Jakarta and Ho Chi Minh City in the next year. It also wants Yaounde on its list of destinations in Africa. “Today, 80 percent of air traffic in Africa is controlled by non-African companies,” Ethiopian’s chief executive said. “The market is unbalanced. We want to change that.” AFP

Myanmar picks 10 firms as players of stock market

he Philippines cancelled flights and put hospitals on alert yesterday, as its southern and central islands were covered by thickening haze from Indonesian forest fires. Smog from Indonesian slash-and-burn farming has choked vast expanses of Southeast Asia for weeks, killing at least 10 people, forcing events to be shut down and schools to close across the region. International efforts to douse the blazes have done little to clear the air, and Filipino authorities warned ash levels were becoming increasingly dangerous in the southern islands. “The department of health is advising those who have breathing problems or respiratory diseases to wear face masks in areas covered by haze,” presidential spokesman Herminio Coloma told reporters. Hospitals in the south were ready to receive anyone affected by the haze, he added. Six flights to central and southern islands were cancelled or delayed Sunday due to the thickening smog, after thousands were left stranded over the past 10 days. Pilots flying in the central city of Cebu could only see eight kilometres ahead.

hina should join at an appropriate time the U.S.-backed regional trade accord the Trans-Pacific Partnership (TPP) as its broad aims are in line with China’s own economic reform agenda, an influential Communist Party newspaper said yesterday. China is not among the 12 Pacific Rim countries who earlier this month agreed the trade pact, the most ambitious in a generation. The accord includes Australia and Japan among economies worth a combined US$28 trillion. China’s trade minister has said the country does not feel targeted by it, but will evaluate the likely impact comprehensively. In a commentary, the biweekly Study Times, published by the Central Party School that trains rising officials, admitted there were those in China who viewed the TPP as a “plot” to isolate and restrain the country’s global ambitions. But the broad aims of the TPP, including reducing things such as administrative approvals and protecting the environment, were what China wants to achieve too, it wrote. China has been trying to shift to a more sustainable, ecologicallysound, consumption-led economic growth model.

total of 10 companies have been tentatively selected to act as players in Myanmar’s first ever Yangon Stock Exchange Market, planned to be launched in early December, an official report said yesterday. Deputy Finance Minister U Maung Maung Thein, who is also chair of the Securities and Exchange Supervisory Commission, urged the firms to make collaborative efforts in ensuring the development of the stock market. He said Yangon Stock Exchange is set to start as an equity market. The emerging stock exchange with the abbreviation YEX was originally scheduled to debut in October but was postponed to December to make way for the country’s upcoming general election set for November 8. The Yangon Stock Exchange will be operated by the Myanmar Economic Bank in partnership with Japan’s Tokyo Stock Exchange and Daiwa Securities Group. Once the operation starts, Asia Green Development Bank (AGD), Myanmar Agribusiness Public Corporation (MAPCO) and First Myanmar Investment Co., Ltd. (FMI) will sell their stock shares in the market among others.

AFP

Reuters

Xinhua