Macau Business Daily August 15, 2016

Local MICE talents trained in Dalian IPIM Page 5

Monday, August 15 2016 Year V Nr. 1083 MOP 6.00 Publisher Paulo A. Azevedo Closing Editor Joanne Kuai Society

Land reclamation areas not to be used to repay land debts Page 3

www.macaubusinessdaily.com

MGTO

Telecommunications

Beijing Imperial Palace granted three months for maintenance Page 4

Estimated compensation to CTM lower than MOP1 bln Page 5

Against long odds Gaming

Wynn Macau will get 150 gaming tables for its US$4.2 bln resort Wynn Palace, to be opened next week, just one third of what the company asked for. Wynn Resorts Ltd. “is satisfied” with the table allocation, however the decision casts doubt on how many tables will be allocated to other upcoming new properties. Page 8

The art of bartending

Bruno Santos, nightclub manager for Pacha Macau and President of the Union of Bartenders and Cocktails of Macau (UBCM) aims to put the SAR on the international bar scene.

Bruno discusses with Business Daily the changes in perception regarding the art of bartending, the difficulties along the way, and his work to elevate the level of bartending in the SAR to international standards, as well as some exciting developments coming this year.

SMEs approved credit drops

Loans AMCM data shows approved lending to new SMEs by Macau banks dropped by almost half year-on-year in the first six months of 2016. On the other hand, the utilisation of SME credit in proportion to the credit limit approved rose Page 3

Raising concerns

Public works Legislators raise questions on the utility of the new ferry terminal in Taipa, legalisation of Uber services and future responsibility for LRT works. Page 2

HK Hang Seng Index August 12, 2016

22,766.91 +186.36 (+0.83%) Worst Performers

China Resources Power

+5.24%

Galaxy Entertainment Group

+2.55%

Cheung Kong Property

-3.86%

AIA Group Ltd

-0.30%

CNOOC Ltd

+3.22%

China Mobile Ltd

+2.38%

Link REIT

-1.08%

MTR Corp Ltd

-0.12%

CK Hutchison Holdings Ltd

+2.68%

Sands China Ltd

+2.35%

Cheung Kong Infrastructure

-0.72%

China Resources Land Ltd

Li & Fung Ltd

+2.65%

Wharf Holdings Ltd/The

+2.35%

Tencent Holdings Ltd

-0.48%

China Overseas Land &

Ping An Insurance Group Co

+2.63%

Bank of Communications

+2.33%

Hong Kong Exchanges and

-0.30%

Hang Seng Bank Ltd

+0.00% +0.19% +0.30%

26° 30° 26° 29° 25° 30° 26° 31° 25° 32° Today

Source: Bloomberg

Best Performers

Tue

Wed

I SSN 2226-8294

Thu

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Interview Pages 6&7

2 Business Daily Monday, August 15 2016

Macau

Legislative Assembly Debate over Grand Prix Museum renovation budget rejected

White elephant repeated?

Legislators raise issues on the utility of the new ferry terminal in Taipa, legalisation of Uber services and future responsibility for LRT works.

Nelson Moura nelson.moura@macaubusinessdaily.com

A

t a plenary session at the Legislative Assembly (AL) last Friday, legislators questioned the government on the utility of the new Pac On ferry terminal in Taipa, and whether its size and capacity are appropriate for the tourism influx of the territory,

“If you build just for the sake of building and spend just for the sake of spending, it will never be possible for us to achieve the principle of scientific governance.

But it will be, for sure, possible to abuse public funds” Song Pek Kei, legislator

Legislator Song Pek Kei described the new ferry terminal as another “white elephant”, however she said

Two strikes you’re out

Legislator Antonio Ng Kuok Cheng saw his requests for a debate on the environmental impact of the private residential project Estrada do Campo, and on the budget for the Grand Prix Museum renovations, refused by the AL. The legislator wanted a debate, demanding the release of environmental studies made for construction projects in Coloane, and questioned the government

“it’s better to arrive late than never appearing at all”.

The construction works on the new ferry terminal in Taipa, known as Pac On Ferry Terminal, have been completed at a total cost of MOP3.8 billion (US$475 million), as announced last week by Secretary for Transport and Public Works, Raimundo do Rosário.

The new ferry terminal covers approximately 200,000 square meters and is expected to house eight operational berths for ferries carrying up to 400 passengers, and three other operational berths for ferries accommodating 1,200 passengers, in addition to a helipad.

The legislator argued that the ferry terminal’s capacity seemed underused for its size, noting that “the international cruise harbour in Shanghai has only 150,000 square meters, and is able to receive three luxury cruises with 70,000 tonnes,” while the larger Pac On terminal is “limited to short passenger routes from Hong Kong and Shenzhen.”

White elephant on the bay

Legislator Si Ka Lon put forward the same view, stating that the terminal is expected to be able to receive 14 million tourists per year, while in 2015 around 11 million tourists arrived in Macau by sea, according to data from the Statistic and Census Services (DSEC).

“If the design had been closer to reality, it could’ve saved a little over MOP1 billion of the MOP3.8 billion spent on the works, and also reduced future operating costs,”

on why the Land, Public Works and Transport Bureau (DSSOPT) had approved the urban planning project in Coloane before its environmental study was authorised.

Antonio Ng also demanded a debate on the estimated MOP300 million budget for the renewal of the Grand Prix Museum, and on what measures would be taken to ensure the amount doesn’t increase in the future.

he said, questioning whether, with the completion of the Hong KongZhuhai-Macau bridge, the Pac On ferry terminal would get “even emptier”.

Making lemonade

Some legislators said the issue now is to simply try to make the best use of the terminal: “Since [its] one terminal installation and highly megalomaniac expensive, now what remains to know is how to monetize it to take maximum advantage,” legislator Tommy Lau Veng Seng stated.

Tommy Lau suggested Hong Kong should be used as an example of city making full use of its harbours, with its Delta River routes covering more than 10 areas in the Guangdong area.

He urged the terminal management to start negotiations with ferry operators to increase routes within the region.

As a way to fully utilise the new project, legislator Song Pek Kei proposed a full development of its interior layout by creating areas for shopping, creative activities and shows, in order to improve the entertainment offered to passengers, and fully utilise the terminal as “the door to Macau”.

“If you build just for the sake of building and spend just for the sake of spending, it will never be possible for us to achieve the principle of scientific governance. But it will be, for sure, possible to abuse public funds,” Ms. Song added.

GIT hot potato

In regards to other public works, legislator Chan Meng Kam also questioned the government on who would be responsible for the Light Rail Transit (LRT) project after the dissolution of the Transportation Infrastructure Office (GIT) in 2017.

In June of this year, the Secretary for Transport and Public Works announced that the government would create a public company responsible for the LRT metro system and its future management. Chan questioned the proximity of the date of the conclusion of the public tender for the LRT depot superstructure and date of the GIT dissolution, and current coordinator Ho Cheong Kei stepping down as interim Co-ordinator.

“The date of the award [of the tender] will probably be close to the dissolution of the body. So when the Co-ordinator packs his things, if a fault occurs, who will be held responsible?” Mr. Chan asked.

The legislator claimed that former GIT interim Co-ordinator Lei Chan Tong, left many problems regarding the design of the Taipa route and the definition of the Outer Harbour route after his tenure, with the former coordinator “showing disinterest in continuing those functions and returning to the Housing Bureau”.

“With a maximum of 834 days to finish the work, the contract will be awarded to the lowest price? Will it be completed in 2019? No matter what contractor gets the project, if the leader escapes with the work still to be done, who will pay the bill for the residents?” Chan questioned.

The LRT Taipa section and depot superstructure will cost an estimated MOP11 billion (US$1.3 billion), with an estimated completion date of 2019.

“Mainland China has already legalized online car rentals, but in Macau, a tourist city supposedly with a higher degree of freedom, the flexibility in attitude to deal with this matter is much lower than in Mainland China” Au Kam San, legislator

Uber in China

Legislator Au Kam San raised the issue of the legalisation of Uber ride sharing services, citing recent developments in Mainland China, where local ride sharing service Didi Chuxing acquired Uber China in order to operate it as a separate brand.

“Mainland China has already legalized online car rentals, but in Macau, a tourist city supposedly with a higher degree of freedom, the flexibility in attitude to deal with this matter is much lower than in Mainland China,” Au stated.

For the legislator, not legalising Uber goes against the objective of developing Macau as a World Centre for Tourism and Leisure.

Business Daily Monday, August 15 2016 3

Macau Society

Land reclamation areas not to be used to repay land debt

O

n the sidelines of a meeting with the Legislative A s s e m b l y Committee, Secretary for Transport and Public Works, Raimundo Rosário clarified to reporters that the SAR Government will not use the newly reclaimed land zones to repay outstanding land debts, and will only use the idle plots of land recently taken back by the government to repay such debts.

The Macau SAR Government acknowledges a total land debt of 88,806 s q u a r e m et r es, Chi ef

Executive (CE) Chui Sai On revealed in the AL last month. It was the first time the CE had confirmed how much land the government s t i l l o w e s t o p r i va t e companies.

H o w e v e r, S e c r e t a r y Rosário last Friday added that it has not yet been c o n f i r m e d i f th e t o ta l reclaimed idle land plots will be enough to repay the land debts owing in the city, with 40 plots of land currently being declared as invalid. He reaffirmed that the reclaimed idle plots of land will first be used to construct public housing.

AMCM

New SMEs approved credit limit drops On the other hand, the utilisation of SME credit in proportion to the credit limit approved rose.

Cecilia U cecilia.u@macaubusinessdaily.com

Approved credit limit by local banks for new small and medium-sized enterprises (SME) in the first half of 2016 decreased by 51.8 per cent compared to the second half of 2015, totalling MOP9.9 billion (US$1.24 billion), according to statistics released on last Friday by the Monetary

Authority of Macao (AMCM). The amount is also a decrease of 44.8 per cent when compared to the same period last year.

The proportion of the credit limit to tangible assets pledged, also referred as the collateralised ratio, was 81.5 per cent, down 201 percentage points when compared to the second half of 2015, but up by 31 percentage points when compared to the first half of 2015.

The outstanding value of total SME loans, meanwhile, rose by 1.5 per cent from the second half of 2015, to MOP67.7 billion, representing a 3.8 per cent increase from the same period a year earlier.

By industry, loans to “manufacturing” and “construction and public works” grew by 28.1 per cent and 6.0 per cent respectively; while loans to “transport, warehouse and communications”, “wholesale and retail trade” and “restaurants, hotels and similar activities” decreased by 13.3 per

cent, 9.4 per cent and 8.6 per cent respectively.

The proportion of outstanding credit balance to the credit limit granted, also known as the utilisation rate, was 61.7 per cent, an increase of 0.5 per cent compared to six months ago.

Meanwhile, a fall of 16.3 per cent was recorded in the outstanding balance of delinquent SME loans half-on-half, totalling MOP306.4 million. However, the balance grew by 56.5 per cent when compared to the same period a year ago. The ratio of outstanding delinquent loans to total outstanding SME loans, referred to as the delinquency ratio, went down by 0.10 per cent half-on-half to 0.45 per cent.

4 Business Daily Monday, August 15 2016

Macau In Brief Governance

CE to visit Beijing for city’s five-year plan Chief Executive Fernando Chui Sai On is leading an official delegation to Beijing today to discuss the city’s first Five-year Development Plan. The top official will stay in the capital city until this Wednesday. During the three-day visit, he will meet with officials from several ministries and departments of the central government.

The MSAR government expects the final version of the plan could be released next month. The Secretary for Administration and Justice, Sonia Chan Hoi Fan will serve as the acting CE during Mr. Chui’s absence.

Imperial Palace The hotel needs to meet official standards for re-opening

Beijing Imperial Palace granted three months for maintenance The Beijing Imperial Palace Hotel is now allowed to maintain its facilities and must correct irregularities until mid-November, following the property being forced to shut down by the Macao Government Tourism Office (MGTO) for six months in July.

According to local Chinese-language newspaper Macao Daily, the hotel license holder, Empresa Hoteleira Macau Lda, has been approved by the tourism body to dispatch workers to do cleaning and

maintenance work inside the venue from August 12 to November 11.

Last month, MGTO closed down the five-star hotel in Taipa for half of a year as it had committed serious administrative irregularities and failed to carry out essential fire safety measures. In addition, MGTO imposed an entry ban on the property.

Imperial Palace is the first five-star hotel to have been closed down temporarily by the government. Since 2014, the hotel has been fined a total

of MOP55,750 (US$6,979) for operational malpractices and failure to comply with fire safety requirements, according to the previous information from MGTO. The property may face permanent closure if it cannot meet the standards required by the authorities following the temporary shutdown, the tourism office has also said.

The hotel, operating since 1992, was formerly known as New Century Hotel, and has over 599 rooms. K.L.

Sino-Luso

Xu Yingzhen assumes secretary-general position of Forum Macao The permanent secretariat of the Forum for Economic and Trade Co-operation between China and Portuguesespeaking countries (Forum Macao) swore in its new secretary-general, Xu Yingzhen last Thursday. According to the announcement of the body, Ms. Xu previously served for several years as Commercial Counsellor of the Department of American and Oceanian Affairs in the Ministry of Commerce of China. She also provided support to previous editions of the Ministerial Conferences of Forum Macao. Meanwhile, the predecessor of Ms. Xu, Chang Hexi, has been transferred to Beijing.

Tourism

Thailand travel alert issued The Tourism Crisis Management Office (GGCT) announced that it has issued a travel alert for Thailand following a series of bombing and arson attacks at several tourist destinations in the country last Thursday and Friday. At the time of the announcement, the Office had received two enquiries from local residents. ‘[GGCT] will keep monitoring the latest developments and alerts Macau residents who intend to travel to Thailand to follow closely the situation,’ the Office wrote. The blasts killed four people and injured at least 34. Tourist spots including a beach in the Patong area of Phuket, and the seaside city of Hua Hin, also suffered attacks.

Graft

Ng Lap Seng: UN bribery charges are a political move The billionaire says the United States is trying to stop him from developing a United Nations conference centre in Macau.

Local real estate developer Ng Lap Seng says America’s charges against him in the United Nations bribery scandal are politically motivated, and a way to prevent him from building a major United Nations (UN) conference centre in the Special Administrative Region, the Associated Press reports.

According to the news agency, l a w y e rs f o r th e 68 - y ea r- o l d businessman said in papers filed in Manhattan federal court last week, that the charges were based on a “fundamentally unsound” and unprecedented criminal prosecution.

“There is every reason to believe that the UN has, indeed, completely shelved the idea of such a center, which would have given developing nations a permanent meeting venue in China. The US geopolitical interest in slowing the progress of Chinese influence over developing nations has been achieved,” the news outlet quoted the papers as saying.

Last fall, Mr. Ng and his assistant, Jeff Yin, were charged by U.S. authorities with bribing John Ashe, who was an ambassador of Antigua and Barbuda to the UN General Assembly from 2013 to 2014. The UN official, however, was found dead at the end of June from injuries resulting from lifting a barbell while on a bench.

The lawyers added in the papers that the U.S. government’s motives in charging the billionaire were demonstrated in its classified documents and its focus on whether his partner was a Chinese agent.

“All these circumstances strongly suggest that the prosecution of Mr. Ng is not, and never was, about policing the integrity of UN operations,” they wrote.

Th e p r o p e r t y d ev e l o p e r i s alleged to have given Mr. Ashe

over US$500,000 (MOP4 million) in bribes, in order for the nowdeceased official to seek support from the UN to build a conference centre in Macau, which was to have been developed by his company – the Sun Kian Ip Group.

The businessman and his assistant, who have both pleaded not guilty, will face a federal trial on January 23 next year.

In June, news agency Reuters quoted a judge’s statement at a hearing in the court, detailing that Chinese officials were involved in the bribery case, including the development of South-South News - a media outlet set up by Mr. Ng for funnelling money to Mr. Ashe.

Business Daily Monday, August 15 2016 5

Macau Telecommunication

Ongoing negotiations with CTM Estimated compensation to CTM would be around MOP700 mln to MOP800 mln if concession contract is discontinued.

Annie Lao annie.lao@macaubusinessdaily.com

A

decision has not yet been made on whether to continue the concession contract with Companhia de Telecomunicações de Macau SARL (CTM), the city’s major operator of public telecommunications services, Secretary for Transport

and Public Works, Raimundo Arrais do Rosário said to reporters after attending a meeting of the Monitoring Committee for Public Administrative Affairs at the Legislative Assembly (AL) last Friday, regarding regulatory matters of the city’s telecommunication services.

The issues still not agreed upon with CTM include service charge fees, allocating concessions of assets

and coverage of telecommunication pipelines.

“Our negotiation with CTM is still ongoing,” he said.

Compensation

The government clarified that the compensation to CTM would not be MOP3 billion, but instead should be no more than MOP1 billion.

“According to the contract, if the government discontinues the concession contract with CTM, the compensation will be 2.5 times the average profit that CTM made in its recent three fiscal years before tax, which is less than MOP1 billion,” Wendy

Tam Van Iu, acting director of Bureau of Telecommunication Regulation (DSRT) explained.

Legislator Chan Meng Kam, who is also the president of the Committee, revealed that the estimated compensation fees to CTM would be around MOP700 million to MOP800 million.

Regarding the ownership of concession assets, he said that after January 1, 2012, all the new investment made by CTM belongs to the company. However, he stressed that CTM has the responsibility to maintain, upgrade and optimize the telecommunication services in the city. Therefore, all of the new invested projects should not belong to CTM only. He added that the SAR Government would decide whether to reveal the asset list by the end of this year.

Lack of competition

In addition, Chan Meng Kam argued that service fees for the Internet and customer hotline should be reduced

by CTM, and stated that a final decision on the lowering of fees is expected in two to three months.

“The SAR Government did not accept the proposed service fees by CTM on hotline services and required it to be lowered. If CTM still has not reached an agreement with the government, the government will set up a standard for service fee charges and then enforce it on CTM to act upon,” he said.

The legislator said that the telecommunication market in the city lacks competition in order to improve the services provided. “The development of telecommunication in the city is low, with high service fees compared to neighbouring regions, so requiring the government to act on public interest is important,” he stressed.

IPIM

MICE talents trained in Dalian The Macau Trade and Investment Promotion Institute (IPIM) and the Department of Taiwan, Hong Kong and Macau Affairs of the Ministry of Commerce of the People’s Republic of China, co-organised the 2nd “Training for Macau Convention and Exhibition Talents”, according to a statement issued by IPIM yesterday.

The event was held in Dalian, China, from 9 to 12 August.

The courses integrated theory with practice, and the training programme was conducive to enhancing the professional standards of Macau people working in the city’s convention and exhibition industry. It also aimed to strengthen exchanges and cooperation between the convention and exhibition industry in Mainland China and that in Macau.

IPIM says that as the body responsible for coordinating the overall development of Macau’s Meetings, Incentives, Conferences, and Exhibitions (MICE) industry, it has put an emphasis on the sustainable development of the Macau convention and exhibition industry, including the training of industry professionals.

IPIM organised a delegation of 20 representatives from the Macau convention and exhibition industry to join the training seminar in Dalian.

Executive Director of IPIM, Irene V.K. Lau headed the delegation.

Ms. Lau said she hoped such t rai n i n g s essi o n s c o u l d h e l p develop the professional skills of Macau people working in the MICE industry, sharpening the industry’s competitive edge further and enhancing exchanges and cooperation between the convention and exhibition industry in Mainland China and that in Macau.

The Training Center of the China Council for the Promotion of International Trade (CCPIT) and the CCPIT Dalian assisted the organisation in inviting experts and experienced professionals as instructors for the four-day training session. The training session analysed and discussed the trends and characteristics of the development of the convention and exhibition industry under the new market fundamentals. In addition, participants visited the venues and related facilities of the BIT Congress Inc. and Dalian International Conference Center.

6 Business Daily Monday, August 15 2016

Macau Interview

Bartending : A noble art “In this industry you come in contact with the clients directly – as compared with the kitchen where you’re behind the line – at a bar you are on the frontline, you face the guests”

Bruno Santos, nightclub manager for Pacha Macau and President of the Union of Bartenders and Cocktails of Macau (UBCM) aims to put the SAR on the international bar scene. Celebrating the recent victory of UCBM member Jonathan Villarma at the 25th Asia Pacific Bartender of the Year Cocktail competition in the flair-tending category, Bruno explains the changes in perception regarding the art of bartending, the difficulties along the way, and his work to elevate the level of bartending in the SAR to international standards, as well as some exciting developments coming this year.

Kelsey Wilhelm kelsey.wilhelm@macaubusinessdaily.com Photos by Kelsey Wilhelm

W

hat is UBCM? UBCM comes from the Portuguese acronym União de Bartenders e Cocktails de Macau (Union of Bartenders and Cocktails of Macau). This started as a gathering of local bartenders in 2009 where we tried for the first time to be part of the International Bartenders Association. In 2009, it didn’t go that well because we were young, and we were structuring everything. In 2012, I joined the group with a new energy after being in Singapore for the Elite Bartender’s Course, which is like a university for bartenders.

With that opportunity and during my time in Singapore, I established a network that we needed to get the ball rolling for Macau to be part of the International Bartenders Association.

What is UBCM’s membership like?

Currently we have over 100 members.

We created the association for bartenders, not specifically for locals, but for all bartenders in Macau that were working within this profession.

It involves a lot of bartenders from taverns, local street bars, and also goes to five-star hotels, four-star hotels, all kind of hotels, casinos, and other venues inside these big properties.

Our main goal was to give support to

these bartenders. Basically there was nothing happening in Macau so our union was about trying to offer the possibility of bringing in interesting things - seminars, workshops, global brand ambassadors, new spirits, bartenders, creating guest bartending programs, exchange bartender programs – Macau bartenders going to Hong Kong or Singapore or Thailand – more on the Asian level.

It was exactly to create a window of opportunity for bartenders which, at the time, I believe was regarded as non-noble profession. There was a perception that to be a bartender was something low-ranking. So we wanted to change that, saying that a bartender is equally important as a chef to his restaurant. That was what was happening in Macau because bartenders without that category could never bring venues the vision and the creativity levels that they desired in order to have unique products and offer them to their guests.

How much do you enjoy creating unique recipes?

On a personal level I love creating drinks. I think this is what being a bartender is all about – giving new experiences to your guests, and of course, getting a little bit of background information, like their favourite flavours, their favourite s p i r i ts, a n d th e n c o m b i n i n g something exciting and new that they’ve never seen before. That’s

the major objective.

As an association, we have developed the local bartender competition. It’s a yearly competition which we call ‘Macau Bartender of the Year’. In this competition we invite many bartenders from all these venues, and of course it’s a competition where creativity is of most importance. After comes other important aspects of being a bartender, like technique in producing your drink and also your skill as a person. In this industry you come in contact with the clients directly, as compared with the kitchen where you’re behind the line. At a bar, you are on the frontline. You face the guests. So it’s most important that you have good body language and people skills, so you can communicate with your guests.

Of course it’s every bartender’s dream to have a drink that is present in a venue, a drink that is made by other bartenders, and a drink that ultimately the guest goes to a venue to request. So you always stay with that pride factor, saying ‘yeah that’s my drink’ and people like it.

What do you see as the role of bartending in the Food and Beverage (F&B) industry?

Bartending is extremely related to F&B, the F is nothing without the B. Bartending comes from the beverage side of course. As chefs handle solids to produce, of course our major thing is liquids – liquids and ice.

Bartending is completely related to

F&B and every hotel should have a good bar. That’s a must at least for a five-star hotel. Big properties like the St. Regis are known all over the world for their famous Bloody Mary, Ritz Carlton with their Gin Trolley programs; hotels are always attached with great bars.

How long have you been in Macau?

This year is going to be my 30th year in Macau. I just love it. I came to Macau when I was four. I have my family here and my brother is currently studying in China, but he’s around every time he can.

How have you dealt with the changes in Macau?

I’m very attached to Macau. Every time I left Macau I left feeling sad, and every time I arrived to Macau I was happy. So it is a really important part of my life. Also, for my side, being an F&B professional, I have a positive outlook. These developments arising in Macau, with these great hotel names, these fantastic properties, Macau is starting to be known in the world as a gaming mecca, a tourism destination, which is a contradiction.

It’s a contradiction from what I miss from the past, which was that calm little village that people, especially from Hong Kong, looked forward to coming to, to have that escape from their daily routines. This doesn’t happen nowadays in Macau; we are as full of neon lights as Hong Kong, but it’s evolution. I think people have gained with this growth of Macau.

And I believe we will still keep on gaining.

In terms of the association, you must work hard to keep the highest standards of quality. What are some of the activities that you have planned for the rest of the year?

It’s of the utmost importance and actually that’s why we created the association in the first place: to give opportunities, especially to locals, to have someone that could influence them to have another career path or another choice of career and give them the right tools, the right information. At this age it’s all about information, if you don’t know where to find it, sometimes it seems to be very hard.

UBCM is to be the conductor of that information for youngsters and for people that are working but need to get more information, who want to learn something new. Regarding activities, we have now expanded our activities not only for local activities but to international activities as well.

Every year we send at least two students to the Elite Bartenders Course; to date we now have seven bartenders who are under this category. We’ve also been participating in a lot of international competitions in Hong Kong, in China, in Taiwan and Singapore. A couple of our bartenders, including myself, did an international final in other countries.

And this year, 2016, it has come to the point that we have finally gone through all the paperwork, and in Tokyo in October we're going to be declared the newest member of the International Bartenders Association, giving us for the first time, the possibility of competing in the World Cocktail Championship, which we are going to do under the ‘Sparkling’ category. So we’re going to participate, making a cocktail that involves a sparkling wine or champagne.

How were you able, through UBCM, to find funding to create these projects?

It’s not easy to start a bar association from the ground up. Now we are in the fourth year of the association, but in the beginning years nobody

Business Daily Monday, August 15 2016 7

Macau “There was a perception that to be a bartender was something low-ranking.

So we wanted to change that, saying that a bartender is equally important as a chef to his restaurant” knew of UBCM so finding funding was very hard. Much of the funding that we got was personal. It was a personal investment from myself and from the rest of the management committee that had a strong belief that we were on the right path and, of course, if we didn’t find sponsorship, which is very hard to get, especially nowadays with the crisis that we are facing, we just invested in ourselves.

Lately we’ve been receiving support from a couple of other organizations, like MGTO [Macau Government Tourism Office], which is one key sponsor for our Bartender of the Year program, as well as some local distributors of spirits, namely Seapower, which has been with us since day one and has always been our biggest sponsor, creating the possibility for us to represent Macau worldwide. Because if we are not there nobody knows that we exist. Our consistent presence at international events like the International Bartenders Meeting (helps create opportunities for funding). Our first one was two years ago in South Africa, and this year we went to Bulgaria, and again in October of 2016 we’ll go to Japan.

This meeting is most important and it’s where every guild or association, from the International Bartenders Association, goes to meet and have seminars. We talk with each other.

We share ideas. It’s great. We’ve been sharing our flag colours.

How will the recognition by the International Bartenders Association affect how UBCM is in Macau?

First of all, we will be able to provide bartending courses recognized by this international institution, which gives our courses another value. Even if our courses are great, by having

a quality stamp attached to them, it makes them even greater. That’s what it brings most.

Also, it now gives us the possibility of one of my biggest dreams, which is to bring the International Bartenders Meeting to Macau. The government seems to be very willing to do this, as they are hungry to bring MICE [Meetings, Incentives, Conventions and Exhibitions] events and these kind of events to Macau. So I believe Macau has everything that an event of this type requires and it’s a perfect region to host this kind of event.

And I believe when we do that, the people will leave Macau with great memories and thinking that Macau was awesome.

What is the difference between the perception of bartenders and the reality?

These people are fun, but they are responsible as well. When people think that we use a lot of alcohol, and we are crazy people and not focused on life (that’s not true). These people surprise me the most when we are having, for example, a post-event after-party that goes until five o’clock in the morning, and then suddenly at 7:30 everybody is in a suit and tie and looking good for a meeting that is happening 30 minutes later.

So the sense of responsibility of these people is very high - that’s something that I’ve been observing and learning.

If you had to pick another city to work in, is there one that calls out to you?

London now is on top of the game.

New York has always been. Singapore is a rising star for Asia and Hong Kong as well. These last five years, we’ve seen bars in Hong Kong being named in the 50 World’s Best Bars. Macau is still a little bit behind, but my goal is to have at least one to two bars also in that list in the coming five years.

Does competition help push the level to be more competitive in bartending and F&B? Of course. I always see as the number one mistake for the industry, saying that it is bad if you have another bar next to your bar. I believe that’s totally wrong. Your business just becomes better by having competition.

You’re working to help develop people in the association. Is that a conflict of interest?

The association is a non-profit organization. I never saw that I had a conflict of interest by doing something for the community. A lot of companies, and especially big

companies, always have a corporate social responsibility program.

I believe that it’s a privilege for a company to have individuals that focus on their company as the priority, but also help the industry. It will raise the standards everywhere.

It will be like a chain reaction that will bring the standards to the level that Macau needs to have.

What are some of the difficulties in Macau getting to that level?

It’s been a challenge for us to engage youngsters because I believe the major challenge for kids nowadays starting in this profession, is the starting salary, the pay rate. For casino croupiers especially, there is a demand to employ a huge quantity of people which, by our local laws, have to be locals holding ID cards.

This gives a certain privilege to people starting their careers, working in the casino, and getting salaries that they would never get by starting as a bar-back.

I believe that the youth follow the money more than their dreams. Until that changes, I believe it’s still going to be our major challenge, which is to captivate people to work in the F&B industry.

If somebody wanted to pursue their dream to set up their own bar, what is the minimum investment necessary?

Well, I’ve been trying personally

“Every hotel should have a good bar – that’s a must at least for a five-star hotel”

to do that myself. If you don’t have strong financial support it is very hard. Because nowadays to rent a venue is crazy and not only that, you have to have a lot of money to survive until your operational license is approved and you can start operating.

That delay and that time frame makes it impossible for people, like myself, without strong financial backing, to open a project. And if you don’t have the beginning funding, you also will not get financial support from banks.

So it’s quite difficult to open a project by yourself nowadays. Especially, I see as most difficult the rents that you need to pay and then the deposits and the agency fees, and then the time it can take - from three months to six months - where you are spending money on rent but you’re still waiting for the go ahead from the authorities to approve your license and be able to operate – that’s what makes things complicated.

Do you have any other personal goals?

For a personal goal, I do have a dream (laughs) and in that dream (laughs)… It actually was the dream that brought me to hotels. I had a dream of working in a resort on an island. And I hope that one day I can be a responsible professional, have a good job, and work on one of those paradise islands that I always dreamed of. And that’s it.

8 Business Daily Monday, August 15 2016

Macau Opinion

Sheyla S. Zandonai Playing ball The old Jai Alai will reopen its doors this year, renamed the Jai Alai Palace. Jai Alai, or Casino Pelota Basca, was one of the first casinos established under the monopoly of the Sociedade de Turismo e Diversões de Macau (STDM) in 1975.

Replacing the gambling activity of Hotel Estoril, it was an early but important development in ZAPE, an area reclaimed from the sea in the 1930s. Back then, Jai Alai stood alone amid the vegetable fields, a scene that many people in Macau today can still recall.

Following the development of the Outer Harbour ferry terminal in the early 1960s, it contributed towards the shift of gambling activity from the west side of the Macau peninsula to the east, facing the Pearl River Delta.

Until the Outer Harbour was built by STDM – back when jetfoils were still called hydrofoils – ferries would dock at the Inner Harbour.

Perhaps the contemporary version will be the nearcomplete passenger terminal at Pac-On, which will channel mass tourism toward Cotai. Or so it is hoped.

Jai Alai has one of the most intriguing casino names in town. Taken from the Basque language – the origin of which nobody seems to know for sure – jai alai is the name of a sport that originated and flourished in the Pyrenees Mountains, which topographically unite Spain and France.

Pelota (Spanish for “ball”) games were played at the Jai Alai stadium in Macau from its founding in 1975 until 1990. Picture four men each wearing a long, claw-shaped hard glove with which they frantically propel a speeding ball back and forth against a wall.

That’s jai alai. Its Chinese name, “return force,” literally captures those movements, as opposed to the more cheerful Basque meaning, “merry celebration.” It must have seemed very exotic in 1970s Macau. But then, this is a city that accommodates all manner of persons and activities.

A much longer story is needed to fill in the gaps between Jai Alai’s debut and its uncertain future.

But if there is one thing the slender, geometric signage 回力JAI ALAI on top of the new building conveys, it is calm confidence. Retrofitted in a surprisingly low-key, matte silver shell, there is no sculptural decoration, no arrogant spires: a bold statement of Jai Alai’s resilience, compensating for its seedy though colourful past. This is a part of Macau’s gambling heritage in the making.

Sheyla S. Zandonai is a scholar and contributor to this newspaper.

Gaming 100 of the newly allocated tables available at the opening next week

Wynn Palace gets 150 new gaming tables The number is much lower than the 400 tables that Wynn Macau Ltd had applied for, and the 250 tables that its two rivals Galaxy and Melco Crown respectively got for the openings of their new projects last year.

Kam Leong* kamleong@macaubusinessdaily.com

T

h e MSAR government has granted a total of 150 newto-market gaming tables for Wynn Palace, a new casino resort in Cotai by Wynn Macau Ltd, in addition to 1,145 slot machines.

Last Friday, the Secretary for Economy and Finance, Lionel Leong Vai Tac announced that the new gaming project is authorized to run 100 new gaming tables at its opening next Monday, while the other 50 gaming tables would only be available in the following two years.

The official claimed the decision was made based on the principle of a compound annual growth rate in new gaming tables of no more than three per cent for a ten-year period starting from 2013.

“As we have been saying, we consider different factors when granting new-to-market gaming tables,” the Secretary told reporters on the sidelines of a public event.

“This includes whether [the project] is helpful for the development of Macau into a World Centre of Tourism and Leisure, whether [the company] supports local SMEs, as well as its input to developing non-gaming elements”.

The allocation for Wynn Palace is only just over one-third of the 400

new gaming tables that its operator had applied for. The number is also lower than the 250 new gaming tables that its two rivals, Galaxy Entertainment Group and Melco Crown Entertainment Ltd were given for the openings of Galaxy Phase II and Studio City in May and October last year, respectively.

Wynn Resort: satisfied

Wynn Resorts Ltd., the parent company of Wynn Macau, “is satisfied” with the table allocation, spokesman Michael Weaver said in an e-mail statement Friday.

The US-based firm had said last month that it expected Wynn Palace to get approval for just 100 tables and that it would move about 250 tables from its current resort on the Macau peninsula to the new one to ensure the new property has enough capacity.

But broker Sanford S. Bernstein b e l i ev es th e a l l o cati o n i s disappointing. “While the initial 100 tables is in line with company guidance from the second-quarter earnings results, the follow up 50 tables are disappointing, in light of the 250 tables issued to both Galaxy Macau and Studio City,” the firm’s analysts, Vitaly Umansky and Clifford Kurz, wrote last Friday.

“We do not believe that the table allocation should have a significant impact on Wynn’s fundamental

growth prospects over the next few years as table capacity is not a limiting constraint on growth,” the analysts added.

Meanwhile, Union Gaming Group LLC analyst Grant Govertsen wrote in a note on Friday that the allocation “does raise concerns on how an operator can ultimately get to where they need to be on a longer-term basis with only 150 tables on a more than US$4 billion investment”.

The decision casts doubt over how many tables will be allocated to other new properties including those by Sands China Ltd. and MGM China Holdings Ltd., the analyst added, indicating the government’s “massonly” mandate shows it wants to further restrict the VIP business.

Wynn Macau reversed earlier gains to fall 0.2 per cent by the close of trading in Hong Kong, after rising as much as 3.7 per cent on Friday. The Hang Seng Index rose 0.8 per cent.

The Macau casino operator’s shares have jumped 43 per cent so far this year through Thursday.

Mass-market focus

Casino revenue in Macau has plunged for 26-straight months, following China’s crackdown on corruption that has kept high-rollers away as tourist numbers dropped. Despite the slowdown, Macau casino operators are in the midst of a building boom.

MGM Cotai, scheduled to open in the second quarter of 2017, will be a “mass tables only” casino resort, MGM China Chief Executive Officer Grant Bowie told reporters last Tuesday. Last month, Sands China President Wilfred Wong said the company’s Parisian project, due to open on September 13, will allocate a minority of its tables to VIPs. Secretary Leong said last Friday, that the government had received an application for new-to-market gaming tables for the Parisian Macao, adding the application was being reviewed. *with Bloomberg

10 Business Daily Monday, August 15 2016

Greater China

M&A

Gadfly: Anbang target, the waiting is the hardest part Gillian Tan

C

hina’s Anbang Insurance Group is stretching the definition of time with its planned acquisition of U.S. insurer Fidelity & Guaranty Life.

It’s been more than 10 weeks since the Beijing-based company withdrew its approval request with the New York Department of Financial Services for its US$1.6 billion acquisition of the life insurer, saying it planned to refile “in the near future.” The Wall Street Journal reported at the time that issues arose over the “sufficiency of answers” provided by Anbang about its ownership structure, relationships among shareholders and sources of funding.

The life insurer’s shareholders aren’t overly optimistic about the situation, with FGL shares trading around US$22.90 on Friday, a discount of almost 15 per cent to Anbang’s US$26.80 offer. That discount was as much as 18.4 per cent at the end of July.

Investors are right to remain sceptical, even after HRG Group, FGL’s biggest shareholder with a stake of roughly 80 per cent, offered assurances this week. On an earnings call with analysts, HRG Chief Executive Officer Omar Asali had this to say: “Closing FGL’s transaction with Anbang remains a priority at HRG. While we won’t comment in detail on the ongoing regulatory process, you should know that we are continuing

to work closely with Anbang and are engaged with the regulators to secure the required approvals to complete this transaction.”

Timing

The problem is, there’s still a lack of clarity around timing. Anbang and FGL say they’re seeking to close the deal as expeditiously as possible, but it all hangs on regulatory approval from Iowa and China, as well as New York.

It also doesn’t help that Anbang unexpectedly abandoned another recent acquisition target, Starwood Hotels, in a move that left market watchers questioning Chinese buyers more broadly. But FGL is a smaller, more logical fit.

FGL, which has US$18.9 billion in assets under management, has seen

short interest peak in the past month at 16.5 per cent of its free float. Those investors are hoping to profit if it the stock falls further, which is a near certainty if the deal collapses.

Unlike many transactions, there would be no termination fee to cushion the blow. In fact, FGL may even have to fork out US$51.4 million, which has also been described as just US$51 due to a typo in at least four FGL filings.

FGL is trading at a discount to its peers and its own two-year average as a measure of price to book value, which may seem enticing. But investors hoping to make a quick buck from an Anbang takeover may want to settle in for a longer wait, if not brace themselves for disappointment. Bloomberg Gadfly

Money supply

Ma: China’s slowing growth in M2 hasn’t affected Economy China’s slowing growth in money supply hasn’t affected the economy and the nation’s fundamentals support a stable foreign-exchange rate, the top economist at the central bank’s research bureau said.

The country’s stabilizing hoard of foreign reserves, which were little changed at US$3.201 trillion in July from the previous month, signal the exchange rate is near equilibrium, Ma Jun, chief economist of the People’s Bank of China’s research bureau, wrote in a note Saturday.

He added China’s corporate debt was high by international standards and that it should reduce the leverage by cleaning up “zombie” companies and implementing debt-to-equity swaps.

Ma’s remarks came after official data on Friday indicated that a recent economic stabilization faltered in July, with factory output, retail sales and investment all missing estimates, and the broadest measure of new credit rising at the slowest pace in two years. He pointed to the International Monetary Fund’s forecasts for China’s growth as a sign of confidence in the world’s second-largest economy.

The nation should weaken its focus on gross domestic product in the future and put more emphasis on a stable job market, he said.

The broad M2 money supply increased 10.2 per cent in July, the slowest pace since April 2015, PBOC data showed Friday. The yuan climbed 0.12 per cent against the U.S. dollar in July, halting three months of declines.

China’s leaders plan to underpin demand with fiscal support and view interest rates as being at “appropriate” levels, according to glimpses of their thinking seen in the IMF’s yearly review of the economy. Its GDP is projected to expand 6.6 per cent in

Ma Jun, chief economist of the People’s Bank of China’s research bureau

2016 and 6.2 per cent in 2017, while inflation is seen picking up to around 2 per cent this year, the IMF said.

China’s economy will probably grow 6.5 per cent in 2016 and 6.3 per cent in 2017, according to estimates compiled by Bloomberg. Bloomberg

Business Daily Monday, August 15 2016 11

Greater China Utilities

In Brief

China State Grid Said to Near Control of US$7 Billion Utility CPFL Vanessa Dezem and Vinicy Chan

State Grid Corp. of China reached a deal to gain control of Brazil’s CPFL Energia SA, after two major shareholders agreed to sell the Chinese company their stakes in the US$7.3 billion utility, people with knowledge of the matter said.

Bonaire Participacoes and Banco do Brasil SA’s pension fund, known as Previ, have given informal approval to sell their combined 44.5 per cent stake in CPFL for 25 reais a share, the people said, asking not to be named because the information isn’t public.

The terms are the same as what the Chinese company offered when it agreed to buy Camargo Correa’s stake in the power distributor in July, and the deal will likely be announced in a few weeks, according to one of the people.

State Grid is currently engaged in due diligence for the Camargo Correa deal, a process that will

take two more weeks, according to a third person with knowledge of the matter. After that, State Grid will send a letter with a formal offer for CPFL’s shareholders, who then have 30 days to respond.

The sale would increase State Grid’s stake in CPFL to 68 per cent. The Chinese company has to extend the offer to all holders, which would also include subsidiary CPFL Renovaveis, according to another person. The full deal could reach 50 billion reais (US$15.7 billion) including debt, the person said.

Hydropower purchase

Previ’s press office said in an e-mail that the fund is analyzing the opportunity and focused on the best interest of its holders, who will be informed as soon as there is a decision. CPFL Energia, State Grid and Bonaire declined to comment.

Chinese firms are buying foreign utilities at the fastest pace in eight

years, according to data compiled

by Bloomberg. This month, Britain and Australia have refused to sign off on investments where state-owned Chinese companies were ready to provide funding.

Their interest also extends to Brazil. In January China Three Gorges Corp. became the nation’s secondlargest private power generator after spending about US$3.7 billion to win concessions to operate hydropower plants. State Grid agreed buy to Camargo Correa’s stake in CPFL in July, and made a bid to acquire Abengoa SA’s power-transmission lines in Brazil, people with knowledge of the matter said last month.

Bonaire -- a company which includes pension funds Petros, Cesp Foundation, Sistel and Sabesprev -has a 15 per cent stake in CPFL, while Previ has 29.4 per cent. The possible takeover would be concluded by the end of the year, one of the people said. Bloomberg News

Banking

Central bank’s net forex sales up in July China’s central bank saw its yuan funds outstanding for foreign exchange fall RMB190.5 billion (US$28.6 billion) to RMB23.4 trillion in July, official data showed on Sunday. The drop, more than the RMB97.7 billion in June, was the ninth consecutive monthly decline.

As the Chinese currency is not freely convertible under the capital account, the central bank has to purchase foreign currency generated by China’s trade surplus and foreign investment in the country, adding funds to the money market. Such funds are an important indicator for foreign capital flow in and out of China as well as domestic yuan liquidity.

Debt

High-risk ‘shadow’ credit at US$2.9 trillion International Monetary Fund staff said that RMB19 trillion (US$2.9 trillion) of Chinese “shadow” credit products are high-risk compared with corporate loans and highlighted the danger that defaults could lead to liquidity shocks. The investment products are structured by the likes of trust and securities companies and based on equities or on debt - typically loans - that isn’t traded, staff members John Caparusso and Kai Yan said in a report released Friday. The commentary highlighted the potential for risks bigger to the nation’s financial stability than from companies’ loan defaults.

Railway

China-Europe freight route adds Chelyabinsk

Overcapacity

Mainland to use tougher environmental standards to tackle capacity glut David Stanway

China will use the stricter enforcement of environmental, safety and energy efficiency standards as well as tougher credit controls to help fight against overcapacity in key industrial sectors, the government said.

The world’s second-largest economy has identified overcapacity as one of its key challenges and it has already pledged mass closures in the steel and coal sectors, but it has so far fallen behind on its targets.

The Ministry of Industry and Information said on Friday in a draft policy document published on its website (http://www.miit.gov.cn) it would “normalise the stricter implementation and enforcement of mandatory standards” to tackle overcapacity in sectors such as steel, coal, cement, glassmaking and aluminium.

It would implement a “differential credit” policy that would allow lenders to extend loans to help firms restructure while cutting off funding for poorly performing enterprises targeted for closure.

Firms that fail to comply with new energy efficiency targets would be given six months to rectify and would be closed if they fail to make progress.

Those that continue to exceed air and water pollution standards would be fined on a daily basis and in serious cases ordered to shut.

It said authorities would cut off power and water supplies, and even demolish the equipment of firms that fail to meet environmental and safety standards. Facilities could also be sealed off to prevent them from going back into operation.

The ministry also repeated a previous pledge to implement differential

and punitive power pricing policies to force firms to toe the line.

Beijing is concerned that some local governments have not been acting with enough urgency when it comes to dealing with overcapacity problems. On Thursday, the state planning agency singled out regions such as Inner Mongolia, Fujian and Guangxi for failing to make progress.

China plans to close 45 million tonnes of annual crude steel capacity this year, and 250 million tonnes of coal production, but only a third of the closures were completed by the end of July, the National Development and Reform Commission said. Reuters

Steel, one sector suffering from overcapacity

A cargo train left east Chinese province of Zhejiang on Saturday for Russia’s Chelyabinsk, the latest freight train service China has launched to boost trade ties along the ancient Silk Road.

The X8024 freight train leaving from Yiwu at 4:18 p.m. Saturday is the fourth route connecting the eastern Chinese export hub with cities in Europe, Central and Western Asia. The weekly train service will travel 7,200 kilometers in eight days before reaching Chelyabinsk, a logistic and transit hub for Russia in the Ural Mountains region.

Trade between Yiwu and Russia amounted to US$507.4 million in 2015.

Environment

China to step up green sector support China’s top economic planner has pledged more efforts to support the green sector after the country fulfilled its energysaving targets and saw the environment improve in the first half of this year. A national plan will be drafted on the development of energy-saving and environmentally friendly industries for the 2016-2020 period, according to a latest statement from the National Development and Reform Commission (NDRC). The government will encourage more qualified companies to issue green bonds, the NDRC said.

It will also consider setting up a fund to support the green industry and attract private investment. Tax breaks will continue for firms using energy-saving and environmentally friendly equipment, the NDRC noted.

12 Business Daily Monday, August 15 2016

Asia In Brief Attacks

UN Secretary condemns Thai bombings UN Secretary-General Ban Kimoon on Friday condemned the bomb attacks in Thailand on Thursday and Friday, saying he “hopes the perpetrators of these crimes will be brought to justice expeditiously.””The SecretaryGeneral extends his condolences to the families of the victims and wishes those injured a speedy recovery,” Farhan Haq, the deputy UN spokesman, said while reading a statement to reporters here.

“He expresses his sympathies to the government and people of Thailand.” Five provinces in Thailand were hit by 11 bombings within 24 hours, reports said, adding that at least four Thai nationals were killed and about 36 others injured, including 10 foreigners.

Foreign exchange

Philippines: major easing of foreign exchange rules The Philippine central bank has approved a significant increase in the amount of foreign exchange that companies and individuals can buy without documentation in what analysts say is a bid to reduce the number of black market currency trades. The Bangko Sentral ng Pilipinas said in a statement Friday that from September 15, the amount of foreign exchange that Philippine residents will be able to purchase for legitimate transactions will be increased from a daily limit of US$120,000 to US$500,000, while the limit for Philippine companies will be raised to US$1 million.

Reparation

Japan, S. Korea specify US$9.8 mln funds for “comfort women” Japan and South Korea on Friday reached a basic agreement on the implementation of a deal over the long-standing issue of “comfort women”, elaborating the establishment of a fund financed by Tokyo to support the victims.

“We came to a basic agreement with South Korea on the scope of the foundation’s activities,” said Japanese Foreign Minister Fumio Kishida after holding telephone talks with his South Korean counterpart Yun Byung-se on Friday. Japan will provide 1 billion yen (about US$9.8 million) to the Reconciliation and Healing Foundation, set up by the South Korean government last month, by the end of this month at the earliest, local media quoted sources close to bilateral ties as saying.

Economy

Malaysia’s economy growth moderates in Q2 Malaysia’s economy growth moderated to 4.0 per cent in the second quarter of the year but remained in line with the official target, the central bank said on Friday. The Malaysian economy registered a growth of 4.0 percent in the second quarter compared with the 4.2 percent growth in the first quarter. “Despite the stronger expansion in domestic demand, growth was weighed down by the continued decline in net exports and a significant drawdown in stocks,” the central bank said in a statement.

Sales

Yamaha sees Asean push lifting margins amid Indonesia slump Ma Jie and Yuki Hagiwara

Y

amaha Motor Co., which sold a third of its motorcycles in Indonesia last year, plans to make up for a slump in the market by boosting sales to the rest of Southeast Asia with new models and almost double profit margin in the region.

The operating profit ratio for the two-wheeler business in the Asean region may reach 10 per cent as soon as this year, compared with 5.7 per cent in 2015, Chief Executive Officer Hiroyuki Yanagi said in an interview.

That’s at least a year ahead of projections by Koichi Sugimoto, an analyst at Mitsubishi UFJ Morgan Stanley.

“The growth will mainly come from more expensive segments in Asian markets including India.”

Wheelie

Yamaha rose 2.7 per cent to 1,935 yen, the highest level since June 1, at the close in Tokyo. The shares have jumped 26 per cent since July 12, when Nikkei Inc. said the company would replace Sharp Corp. on the Nikkei 225 Stock Average from Aug. 1. The benchmark index has gained 5.1 per cent in the same period.

Yamaha last week cut its full-year net income forecast by 25 per cent to 60 billion yen (US$591 million), as the yen strengthens and sales in Indonesia are estimated to plunge about 40 per cent from 2014 levels.

Indonesia’s market may recover next year, Yanagi said on Tuesday.

The operating profit margin for the company’s two-wheeler business in the Asean region widened to 7.8 per cent in the first half, according to Yanagi.

In India, the largest motorcycle market in the world, Yamaha forecasts sales will rise 35 per cent this year to 806,000 units, as the company expands its dealer network in rural areas. India will become another “pillar” of Yamaha’s motorcycle business, after Indonesia and other markets in Southeast Asia, Yanagi said.

“The growth will mainly come from more expensive segments in Asian markets including India,” said Yanagi, who sees buyers upgrading from cheaper scooters to higher-spec models. “I’m not concerned that our overall profit margin will be watered down in the future because of sales volume growth in these markets.”

Hiroyuki Yanagi, Yamaha Motor CEO Indonesia’s economy is feeling the effects of a slowdown in China, its top export market, and slumping commodity prices, weighing on a motorcycle market Yamaha counts on for sales. The manufacturer has introduced models built on common platforms such as the M-SLAZ sports

Hiroyuki Yanagi, Yamaha Motor CEO

Energy

KrisEnergy exploring options as debt covenants come under stress The energy collapse continues to rack up victims in Singapore.

Dan Murtaugh

This time it’s KrisEnergy Ltd., an oil and gas producer that said Sunday it is exploring equity issuance, refinancing and asset sales to strengthen its capital structure as its debt covenants may come under stress. The announcement came just weeks after oil services firm Swiber Holdings Ltd.

“One of the most severe downturns I have seen in my 38 years in the exploration and production industry.”

Jeffrey S. MacDonald, KrisEnergy acting CEO

roiled Singaporean markets by filing for liquidation and then dropping that plan and pursuing a restructuring.

The announcements underscore the struggles energy companies face as the crash in energy prices enters its third year. Brent crude sells for almost 60 per cent less than it did in the summer of 2014. KrisEnergy acting Chief Executive Officer Jeffrey S. MacDonald described it as “one of the most severe downturns I have seen in my 38 years in the exploration and production industry.”

“In the near term, there is a risk that certain of our covenants under

existing debt instruments may come under stress,” MacDonald said in a report to shareholders accompanying the company’s second-quarter earnings. “The company continues to review its financial condition and we have engaged external parties to review all available opportunities to strengthen the group’s capital structure.”

The measures may entail a form of equity issuance or an equity-linked instrument, a refinancing of capital structure, or the divestment of assets, he said.

Situation

The company announced a net loss of US$25.2 million in the second quarter, compared with an US$8.7 million profit a year earlier.

It increased its capital expenditure guidance for 2016 to US$83 million from US$50.8 million to develop the Block A Aceh gas field in Indonesia.

KrisEnergy transferred its revolving credit facility to DBS Bank Ltd. in June, MacDonald said in the report.

KrisEnergy produces about 17,000 barrels of oil equivalent a day, a little more than one-tenth of the daily oil demand in remote New Zealand.

Shares traded at S$0.124 at settlement Friday, down 64 per cent from the year before, giving the company a market capitalization of S$186 million (US$138 million). KrisEnergy has S$130 million in principal maturing next year and another S$200 million in 2018. Bloomberg

Paulo A. Azevedo, pazevedo@macaubusinessdaily.com Editorial Council Paulo A. Azevedo; José I. Duarte; Mandy Kuok Newsdesk Mike Armstrong; Óscar Guijarro; Kam Leong; Joanne Kuai; Nelson Moura; Annie Lao; Kelsey Wilhelm Group Senior Analyst José I. Duarte Design Aivi N. Remulla Web & IT Janne Louhikari Photography Cheong Kam Ka, Ruka Borges, Gonçalo Lobo Pinheiro, António Mil-Homens, Carmo Correia Contributors James Chu; João Francisco Pinto; José Carlos Matias; Larry So; Pedro Cortés; Ricardo Siu; Rose N. Lai; Zen Udani 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. Address Block C, Floor 9, Flat H, Edf. Ind. Nam Fong, Av. Dr. Francisco Vieira Machado, No. 679, Macau Tel. (853) 2833 1258 / 2870 5909 Fax (853) 2833 1487 E-mail newsdesk@macaubusinessdaily.com Advertising advertising@‌macaubusinessdaily.‌com Subscriptions sub@‌macaubusinessdaily.‌com Online www.‌macaubusinessdaily.com Founder & Publisher

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model and the NMAX scooter to reduce costs and boost profitability in Southeast Asia markets Vietnam, Thailand and the Philippines.

“As they upgrade the model lineup, the margins will greatly improve,” Sugimoto said by phone. “The new models have much better margins.”

14 Business Daily Monday, August 15 2016

International In Brief Trade

World’s biggest shipping firm warns against U.S. protectionism A. P. Moeller-Maersk A/S, a Danish conglomerate that owns the world’s largest container shipping company, is voicing concern as a potential shift in U.S. policy threatens to reduce global trade. While Maersk assumes that no matter how the U.S. presidential election ends, it probably “won’t have an effect on the contracts we have and the employment exposure we have in the U.S.,” Trond Westlie, its chief financial officer, said any steps in a more protectionist direction would clearly hurt global economic growth. “In general, trade barriers weaken global growth,” Westlie said in a phone interview on Friday. “Low trade barriers not only help trade growth, but also economic growth.”

M&A

Dubai Financial sells 12 pct stake in EFG-Hermes Dubai Financial Group LLC, an investment company owned by Dubai’s ruler, sold its 12 per cent stake in EFG-Hermes Holding SAE to French bank Natixis SA as part of a debt repayment plan. Dubai Financial, a unit of Dubai Group LLC, did not provide a value of the sale in the Egyptian investment bank, which it announced in an e-mailed statement on Sunday. The stake is worth about 951 Egyptian pounds at (US$107 million) Thursday’s closing price. Dubai Group was among several companies in the emirate that were forced to reschedule loan repayments after property prices slumped and credit markets froze after the 2008 global credit crisis.

Wheat

Egypt reconsiders grain mega project Blumberg Grain said its mega project to store Egyptian grains was back in play, with the government to announce a final decision in two weeks, after earlier indications that plans had been shelved and the company might exit the country entirely. The decision comes as Egypt, the world’s largest wheat importer, remains mired in controversy over its wheat supplies, with industry officials claiming that over 2 million tonnes of the 5 million tonnes of wheat procured locally in this harvest may exist only on paper. If Egypt’s local wheat procurement numbers were misrepresented, it may have to spend more on foreign wheat purchases to meet local demand - even as the country faces a dollar shortage that has sapped its ability to import.

Andrew Haldane, BOE Chief Economist

M&A

Europe’s boutique firms stealing M&A market share Boutique advisory firms now receive nearly half of all mergers and acquisition fees in Europe, stealing market share and top dealmakers from global investment banks hamstrung by a renewed focus on cost-cutting and regulations on how much they can pay.

Anjuli Davies and Pamela Barbaglia

F

ounded largely by veterans fleeing bureaucracy and shrinking paychecks at the large banks, these low-profile small firms are proving popular among companies who value their niche expertise and independent advice as opposed to mega-banks who tend to cross-sell other services like financing.

Advisory boutiques have captured 44 per cent or US$1.7 billion of total completed M&A deals fees in Europe, Thomson Reuters data collected up to August 10 shows. Boutiques based in Europe captured 24.9 per cent, or US$964 million, and other boutiques took the other 19 per cent, or US$728 million.

“Year-to-date advisory revenue at Greenhill is up 16 per cent, whereas advisory revenue at the big five U.S. banks is down slightly and the big European banks are down more.”

Pieter-Jan Bouten, managing director at Greenhil That compares with 42.8 per cent for the whole of 2015, 30.5 per cent at the height of the last M&A boom in 2007 and 20.1 per cent in 2000, when Thomson Reuters began recording the data.

The data excludes some of the massive deals of 2015 that have not yet been completed, including Anheuser-Busch InBev’s US$100 billion-plus merger with SABMiller.

“We are not trying to sell multiple products. Our sole focus is on high-value-add advisory business, and as such we have no conflicts,” Pieter-Jan Bouten, managing director at Greenhill, one of the early U.S.based boutiques to set up in Europe, told Reuters.

Boutiques are defined as firms earning greater than 85 per cent of

their fees from M&A and equity capital markets activity (ECM), with M&A accounting for at least 70 per cent of that wallet.

“With the number of boutique firms occupying M&A league tables at its highest since the 1980s, we can expect the attractiveness of independent advisories (for job seekers) only to increase,” said Alex Howard-Keyes, Head of Wholesale Financial Services at Alderbrooke, the executive search firm.

Crossing the Atlantic

Boutiques have made more progress in stealing business from investment banks in Europe than in the United States, where they accounted for 27.5 per cent or US$2 billion of total completed M&A deals fees so far this year.

As a result, more American bankers are crossing the Atlantic to set up shops in Europe and poaching top dealmakers.

In July, U.S. boutique bank LionTree, founded by former UBS bankers Aryeh Bourkoff and Ehren Stenzler in 2012, hired Jake Donavan from JPMorgan in London to be president of LionTree Europe to grow its business in the region.

In 2015, PJT Partners, an independent financial advisory firm led by Paul J. Taubman, the former senior Morgan Stanley dealmaker in New York, hired a raft of bankers to build out his European arm.

Last year former senior Goldman Sachs investment banker Gordon Dyal launched his own boutique Dyal Co, which then emerged as the lead advisor to Switzerland’s Syngenta on its sale to ChemChina.

“Looking ahead, Donavan’s move could be the tip of the iceberg when it comes to sell-side switches if we see a further proliferation of M&A boutiques,” Howard-Keyes said.

Boutiques range from established firms like Lazard and Rothschild to “micro” outfits such as Zaoui & Co, an advisory firm set up by brothers Michael and Yoel, and Robey Warshaw, set up by Simon Robey and Simon Warshaw, former Morgan Stanley and UBS bankers, both based in London.

Bankers who leave for these boutiques stand to earn potentially more money if they make a success of it, free from a cap imposed by the European Union after the financial crisis that stipulates that bank bonuses

can no longer exceed 100 per cent of fixed salaries, or twice that with shareholder approval.

Robey Warshaw, which worked on the BG Group and Shell merger, has earned US$42 million in fees on completed deals in the year to date, ranking it fifteenth in the league tables in Europe, above HSBC, Societe Generale and Mediobanca.

The figures do not include fees it expects to reap for its work advising SABMiller and most recently having advised Japan’s SoftBank on its acquisition of ARM. “Boutique expansion is a direct consequence of bulge brackets paying less, adding layers of bureaucracy and admin work for senior people,” said one New York-based boutique banker, using a colloquial expression for the top banks. “In a nutshell working for a bulge bracket is no longer fun.”

Finance muscle

Large banks tout their financing muscle as well as their prowess in areas ranging from currency hedging to treasury management to win big M&A assignments.

But for many M&A bankers this just means having to fend off other departments and deal with more bureaucracy.

“A coverage banker at a bulge-bracket is essentially a glorified salesman,” said a second boutique banker.

To be sure, some of Wall Street’s biggest M&A banks still maintain a dominant share of fees in Europe, with Goldman Sachs, JPMorgan and Morgan Stanley in the top five in terms of fees earned so far this year.

Advisory revenues across European investment banks Credit Suisse, Deutsche Bank and UBS fell 21 per cent in the second quarter versus a year ago, however, and none are in the top 10 for fees earned on deals completed so far this year.

“Amid reduced advisory revenue at our competitor group, the trend towards independent M&A advisers remains intact,” said Greenhill’s Bouten.

“Year-to-date advisory revenue at Greenhill is up 16 per cent, whereas advisory revenue at the big five U.S. banks is down slightly and the big European banks are down more.”

Boutiques on both sides of the Atlantic may struggle to replicate 2015’s phenomenal growth in worldwide M&A as activity slows, however.

Megadeals drove global volumes up 41 per cent to US$4.6 trillion in 2015, but European volumes were up a meagre 6 per cent to US$880 billion from a year earlier and have sunk 20 per cent to US$409 billion so far this year, Thomson Reuters data showed. Reuters

Business Daily Monday, August 15 2016 15

Opinion Business Wires

The Japan News The balance of the government’s debts stood at 1.05 quadrillion yen at the end of June, up by 4.1 trillion yen from three months before, the Finance Ministry said.

This suggests that the government owed about 8.3 million yen to each person in Japan, based on the country’s estimated population of 126.99 million as of July 1.

The government’s debts are expected to continue increasing as its social security expenses are seen growing by about one trillion yen each year in line with the rapid aging of the population. Meanwhile, its corporate tax revenue in fiscal 2015, which ended in March, fell short of estimates amid decelerating growth of emerging economies and the yen’s appreciation.

Christine Lagard, managing director of the IMF

Times of India Continuing the bullish momentum, foreign investors poured in over Rs 5,400 crore into Indian equity markets in the first two weeks of this month on positive global cues and the passage of longpending GST Constitutional Amendment bill in Parliament.

It follows a 4-month high inflow of Rs 12,612 crore in the preceding month. That was the highest net inflow since March, when FPIs had pumped in Rs 21,143 crore in the stock markets.

Indian equities have been witnessing positive inflow from foreign investors since March. Foreign Portfolio Investors (FPIs) turned net buyers of equities in March after pulling out a massive Rs 41,661 crore from the market in previous four months (November-February).

China Daily Securities regulators of the Chinese mainland and Hong Kong are working closely with Shenzhen Stock Exchange and Hong Kong Exchanges and Clearing Ltd for the launch of the long-anticipated Shenzhen-Hong Kong Stock Connect program. Deng Ge, a spokesman of the China Securities Regulatory Commission, said on Friday that the commission has set up a special working group to lead and prepare for the stocks trading link. “When relevant regulations and technical preparations are ready, the Shenzhen-Hong Kong Stock Connect will be launched this year,” said Deng, without giving an exact date. The special working group, headed by CSRC ViceChairman Fang Xinghai, is responsible for coordinating efforts among various departments within the commission and relevant government bodies and between the mainland and Hong Kong regulators, according to financial magazine Caixin on Thursday.

Korea Herald Prosecutors indicted the former chief executive of the South Korean unit of Novartis and five other former and current managers over allegations they illegally paid doctors 2.6 billion won (US$2.3 million) in return for prescribing the company’s drugs. In response, Swiss pharmaceutical company expressed regret through a statement, but also said without elaborating that such conduct would not have been sanctioned by the “most senior management’’ at Novartis Korea.

“Novartis does not tolerate misconduct and we are already implementing a remediation plan in Korea based on the findings from our own investigation,” the Basel-based company said.

Airing the IMF’s dirty laundry

F

ollowing the I nternational Monetary Fund’s controversial actions in the Asian financial crisis of 1998, when it conditioned liquidity assistance to distressed countries on government belt-tightening, the IMF established an Independent Evaluation Office (IEO) to undertake arm’s-length assessments of its policies and programs. That office has now issued a comprehensive critique of the Fund’s role in Europe’s post-2008 crisis.

Many of the IEO’s conclusions will be familiar.

IMF surveillance, intended to detect economic vulnerabilities and imbalances, was inadequate.

While staff sometimes pointed to booming credit, gaping current-account deficits, or stagnant productivity, they downplayed the implications.

This reflected a tendency, conscious or not, to think that Europe was different. Its advanced economies did not display the same vulnerabilities as emerging markets. Strong institutions like the European Commission and the European Central Bank had superior management skills. Monetary union, for some less-than-fully articulated reason, changed the rules of the game.

Such self-serving claims were in the interest of European officials, but why was the IMF prepared to accept them? One answer is that European governments are large shareholders in the Fund. Another is that the IMF is a predominantly European institution, with a European managing director, a heavily European staff, and a European culture.

The report, still on familiar ground, then goes on to criticize the Fund for acquiescing to European resistance to debt restructuring by Greece in 2010. It criticizes the IMF for setting ambitious targets for fiscal consolidation– necessary if debt restructuring was to be avoided – but underestimating austerity’s damaging economic effects.

More interestingly, the report then asks how the Fund should coordinate its operations with regional bodies like the European Commission and the ECB, the other members of the so-called Troika of Greece’s official creditors. The report rejects claims that the IMF was effectively a junior member of the Troika, insisting that all decisions were made by consensus.

But that is difficult to square with everything we know about the fateful decision not to restructure Greece’s debt. IMF staff favoured restructuring, but the European Commission and the ECB, which put up two-thirds of the money, ultimately had their way. He who has the largest wallet speaks with the loudest voice. In other words, there are different roads to “consensus.”

The Fund encountered the same problem in 2008, when it insisted on currency devaluation as part of an IMF-EU program for Latvia. In the end, the Fund felt compelled to defer to the EU’s opposition to devaluation, because it contributed only 20 per cent of the funds.

“

Barry Eichengreen professor at the University of California, Berkeley, and the University of Cambridge

Past actions

The implication is that the IMF should not participate in a program to which it contributes only a minority share of the finance. But expecting the IMF to provide majority funding implies the need to expand its financial resources. This is something that the IEO report evidently regarded as beyond its mandate – or too sensitive – to discuss.

And was the ECB even on the right side of the table in these European debt discussions? When negotiating with a country, the IMF ordinarily demands conditions of its government and central bank. In its programs with Greece, Ireland, and Portugal, however, the IMF and the central bank demanded conditions of the government. This struck more than a few people as bizarre.

It would have been better if, in 2010, the IMF had demanded of the ECB a pledge “to do whatever it takes” and a program of “outright monetary transactions,” like those ECB President Mario Draghi eventually offered two years later. This would have addressed the contagion problem that was one basis for European officials’ resistance to a Greek debt restructuring.

One objection to imposing conditions on the ECB is that the eurozone, as a regional entity, is not an IMF member.

Only countries, not regions, are entitled to draw IMF resources.

But nothing prevents the IMF from demanding policy commitments from regional bodies when lending to their member governments. This has been done before when African and Caribbean monetary unions and central banks were involved.

Finally, the report criticizes IMF management for failing to ensure adequate involvement by the Executive Board, its oversight committee of 24 national representatives. Board approval was sought, but only after the key decisions were already made.

Moreover, the Board was forced to act under intense time pressure and lacked the information needed to challenge management recommendations.

The IEO’s report suggests involving the Board more meaningfully, in order to provide a counterweight to political pressure from regional stakeholders.

But this merely threatens to substitute one form of political influence for another.

It would be better to allow an independent management team to make decisions free of political interference, in the manner of a central bank policy committee. But this presupposes freeing the IMF from dependence on financial contributions from its regional stakeholders. And it requires IMF management to demonstrate that it can consistently make decisions based on program countries’ economic interest, not on the political preferences of powerful national shareholders. Project Syndicate

He who has the largest wallet speaks with the loudest voice. In other words, there are different roads to “consensus.”

”

16 Business Daily Monday, August 15 2016

Closing Weather

China renews alerts for heat wave, rainstorm

are expected on Saturday, reaching 40 China’s national weather centre renewed degrees in some areas.

Meanwhile, rainstorms are expected in a yellow alert for high temperatures in central and southern regions and a blue north and northeast China, and parts of alert for rainstorms, mostly in the north. Fujian, Guangdong, Guangxi and Hainan and in the coming three days. Some of High temperatures will persist south of the Yangtze River, in provinces along the those areas will see thunder storms and Yellow River and Huaihe River, and parts gales, the NMC forecast.

China has a four-tier weather warning of Xinjiang Uygur Autonomous Region system, with red representing the most from Saturday to Monday, the National severe, followed by orange, yellow and Meteorological Center (NMC) said.

Temperatures above 35 degrees Celsius blue. Xinhua

Research

HK analyst eviction fuels fears that negative research being muffled Michelle Price

T

he ejection of an analyst from a company briefing in Hong Kong last week has laid bare the pressure on negative research in the Asian financial hub, fuelling concern that critics of companies are being muffled amid a broader clampdown on freedom of speech.

Macquarie analyst Timothy Lam was told to leave an earnings briefing

by China’s Pax Global Technology on Wednesday after a heated exchange with chief financial officer Chris Lee that was videotaped and circulated on social media. Lam was the only analyst at the time covering the stock with a ‘sell’ recommendation, according to Thomson Reuters Eikon data.

In social media posts, Lee said the analyst’s reports had inaccuracies, though he later said he “welcomed all diverse points of view and perspectives toward the company”.

Pax Global said the “one-off” incident did not represent the standpoint of management. Macquarie declined to comment.

Former analysts and hedge fund managers, though, said Hong Konglisted companies - 60 per cent of which are incorporated in mainland China, often with shareholdings dominated by powerful founding families - are especially sensitive to criticism, and alienate researchers who question their business.

A former Hong Kong-based analyst covering Chinese financials at a global bank said she experienced significant pressure to recommend ‘buys’, and had been deliberately excluded from company briefings after recommending investors ‘sell’ the stock.

“This trend exists, but usually it’s invisible and more timid,” said Hui Man-cheong, a Hong Kong shareholder activist. “Chinese companies are less willing to embrace different opinions.”

In extreme cases, companies resort to personal threats and intimidation, three hedge fund managers and a former regulator told Reuters.

Short-sell activist Carson Block, who took aim at several Chinese companies including Hong Konglisted Superb Summit , has said he moved to California from Hong Kong because he received death threats, according to several media reports.

Another prominent short seller who bet against Chinese companies, Jon Carnes, has said he was threatened by representatives of one of those companies.

A spate of attacks in 2010-12 on Chinese companies listed overseas

heightened sensitivity among companies and regulators to this type of public criticism. Last year’s Chinese stock market crash deepened that sensitivity, with local media blaming “malicious” shorting of Chinese stocks by foreigners.

Tougher regulator

Entrenched hostility towards critics of Hong Kong companies has been compounded by a tougher stance taken by the Securities and Futures Commission (SFC), which in 2014 tried to fine Moody’s Investor Services HKUS$23 million (US$3 million) over a 2011 report in which it raised corporate governance concerns about more than four dozen Chinese companies.

Moody’s is appealing the SFC’s claims that its report broke SFC rules by containing inaccuracies, and has said the SFC action is an attack on

freedom of speech.

The SFC has also taken Andrew Left, head of U.S.-based Citron Research, to Hong Kong’s Market Misconduct Tribunal alleging he manipulated the market through the publication of a 2012 report on Chinese property developer Evergrande.

“In Hong Kong, there’s a culture of regulatory bias against critics,” said David Webb, a prominent Hong Kong corporate governance activist and investor. He said the Moody’s action in particular had a “chilling effect on negative research”.

The SFC did not respond to requests for comment, but it has said previously it does not intend to stifle freedom of speech.

An individual familiar with the watchdog’s thinking said negative research served an important purpose - provided it was accurate and responsible. Reuters

Defense

Heist

Brexit

Japan plans to develop missiles to protect islands

Bangladesh bank withholding heist Brexit may be delayed as U.K. probe info from “foreign perpetrators” struggles to set up new ministries

The Japanese government has decided on a plan to develop land-to-sea missiles with a range of 300 kilometers (186 miles) to protect the nation’s isolated islands, including the Senkaku, the Yomiuri newspaper reported, without saying where it got the information.

Costs for development will be part of the defense ministry’s budgetary request for the fiscal year ending March 2018, according to the Yomiuri. The government will aim for deployment around the year ending March 2024, it said.

China has been stepping up pressure on Japan over the disputed Senkaku Islands, which are called Diaoyu in Chinese. Hundreds of fishing boats and more than a dozen coastguard vessels have been spotted recently in the area, encroaching at times on what Japan sees as its territorial waters. Any escalation in the long-running dispute between Asia’s two largest economies over the uninhabited islands raises the risk of an unintended military clash.

Ties between the major trading partners suffered a sharp deterioration in 2012 when Japan bought three of the East China Sea islands from a private landlord, but tensions receded several years into the administrations of Japanese Prime Minister Shinzo Abe and China’s President Xi Jinping. China had also been focused primarily on separate territorial disputes it has in the South China Sea. Bloomberg News

Bangladesh’s central bank has said it is withholding findings of investigations into the cyber theft of $81 million from its account at the Federal Reserve Bank of New York to avoid tipping off the “foreign perpetrators” of the hack.

Bangladesh Bank lawyer Ajmalul Hossain was responding to comments by Rizal Commercial Banking Corp (RCBC) in the Philippines - through which the stolen money was routed before disappearing into Manila’s casino industry - that the central bank in Dhaka was wary of releasing reports that could implicate its own officials.

More than six months have passed since hackers broke into the Bangladesh central bank’s computer systems in one of the biggest-ever cyber heists.

Most of the $81 million stolen is still missing and the culprits have not been identified, but Bangladesh Bank has held RCBC accountable for the loss.

“Bangladesh Bank knows enough about what happened from the internal and external reports so far obtained by it and others,” the central bank’s lawyer Hossain told Reuters late on Saturday.

“This truth is being deliberately withheld from the public domain so as not to allow the foreign perpetrators of the hacking to have knowledge of the investigations.” Reuters

B ri tai n ’ s exi t f r o m th e E u r o p ea n U n i o n could be delayed until late 2019 as new departments set up for the transition may not be ready to start negotiations as early as predicted.

The Brexit and international trade ministries are still recruiting staff, making it unlikely Britain will invoke Article 50 – after which the country has two years to leave the bloc - until late next year, the Sunday Times said, citing people familiar with the situation. The potential delay comes amid tensions between International trade secretary Liam Fox and Foreign Minister Boris Johnson over control of certain aspects of policy, according to the Sunday Telegraph.

Prime Minister Theresa May had been expected to formally start Britain’s exit in early 2017 amid political pressure to deliver on the vote and to salve divisions inflicted on her ruling Conservative Party by the June referendum.

With tensions already emerging in her cabinet, and elections in Europe leaving in doubt who will negotiate with the U.K., there is increasing speculation the process faces significant delays.

Bloomberg News