Queen's Birthday Celebration Poolside BBQ Lunch Sat, 10 June 2017 │ 11:00am - 2:00pm │ The St. Regis Macao Join us in this relaxing and lighthearted get-together at a poolside BBQ lunch. Bring your swimmers, and slip, slop & slap!
Club Cubic one step closer to Zhuhai venue through JV Party Page 6
Friday, June 9 2017 Year VI Nr. 1314 MOP 6.00 Publisher Paulo A. Azevedo Closing Editor Kelsey Wilhelm Gaming
Success Universe drops energy investment amidst CEO switch Page 7
CEPA
Gov’t set to ‘update’ CEPA agreement by the end of the year Page 3
www.macaubusinessdaily.com
Missile
Fuel
North Korea tests short-range missiles as Moon halts shield Page 12
Philippines eyes US$2 bln storage facility for LNG imports Page 13
Regional Realignment Mooted OBOR
The MSAR could be an ‘economic and intellectual powerhouse unmatched anywhere in the world’. This, according to speakers at the International Conference on Belt and Road and Macao’s Development. Increased mobility, one-stop Customs, and single licences for entry to HK, Macau, the Mainland and GuangdongMacau transport system are deemed necessary precursors. Page 4
Agent MSAR
Becoming a fragment
Democratic legislator Ng Kuok Cheong says we live in an ‘era of fragmentation of public will’. Ng and pan-democrat Au Kam San submitted two separate nomination lists for this year’s Legislative Assembly elections. With a view to greater participation in the process.
Investment Linking East and West. Now the MSAR can also link African and S. American Portuguese-speaking communities. Preparing investment for the future, says the former Deputy PM of Portugal. With flexibility and adaptation dictating success, and China at the forefront. Page 2
Moody’s knuckles rapped
Elections Page 2
HK Hang Seng Index June 8, 2017
26,063.06 +88.90 (+0.34%) Worst Performers
Geely Automobile Holdings
+9.39%
Swire Pacific Ltd
+2.39%
Kunlun Energy Co Ltd
Cathay Pacific Airways Ltd
+6.27%
Ping An Insurance Group Co
+2.16%
New World Development
-1.11%
Wharf Holdings Ltd/The
-0.56%
China Petroleum & Chemical
-0.46%
AAC Technologies Holdings
+4.00%
China Mengniu Dairy Co Ltd
+1.79%
Henderson Land Develop-
-1.07%
PetroChina Co Ltd
-0.39%
Galaxy Entertainment Group
+3.26%
Lenovo Group Ltd
+1.58%
Sands China Ltd
+2.71%
Link REIT
+1.54%
Hengan International Group
-0.72%
CLP Holdings Ltd
-0.36%
CNOOC Ltd
-0.57%
China Merchants Port Hold-
-2.18%
+1.13%
28° 31° 28° 31° 27° 31° 27° 32° 27° 31° Today
Source: Bloomberg
Best Performers
Sat
Sun
I SSN 2226-8294
Mon
TUE
Source: AccuWeather
Conduct Moody’s Investors Service has appealed a decision made by the Securities and Futures Appeals Tribunal in March 2016. Which resulted in a HK$11 million (US$1.4 million) fine and affirmed action by the city’s Securities and Futures Commission. The regulator said a 2011 report on public companies failed to provide sufficient insight and did not verify the accuracy of its claims. Page 10
2 Business Daily Friday, June 9 2017
Macau One Belt, One Road
Speaking the same language The future necessity of energy and food supplies from African and South American Portuguesespeaking countries positions the MSAR as an agent of investment for the One Belt, One Road Policy Nelson Moura nelson.moura@macaubusinessdaily.com
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frican and South American Portuguese-speaking countries will be decisive in resolving future questions regarding energy and food supplies, placing Macau in the [vortex] of the One Belt, One Road policy, according to Paulo Portas, the former Deputy Prime Minister of Portugal and the current Chairman of the International Strategic Council for Latin America and Africa of Portuguese construction company Mota-Egil. The statements were made during the ‘Grand Thought Think Tank’ held at the International Conference on Belt and Road and Macao’s Development yesterday. Mr. Portas said Macau can use its history of connecting the Eastern and Western worlds and its Portuguese-language heritage to be a “dynamic platform for Chinese internationalisation” and an “agent for investment” in lusophone countries “Portuguese is the most-spoken
language in the southern hemisphere and the third most spoken language online, which gives Macau, the rising star of globalisation and its consequences, great importance,” the former Portuguese Deputy Prime Minister said. Mr. Portas considered that the successful and peaceful handover of Macau to China helped the country create a successful partnership with Portugal and enter the European market. “Portugal proved to China it was possible for state owned enterprises to beat private companies in entering the European market. A lot of successful partnerships between the two countries were born in Macau,” he added.
Latin America gold
The same potential for Macau’s Portuguese language heritage to serve as an investment agent in the One Belt, One Road policy was reflected by Gilmar Masiero, Professor of the Faculty of Economics, Administration and Accounting of the University of Sao Paulo, Brazil.
Gilmar Masiero, Professor of the Faculty of Economics, Administration and Accounting of the University of Sao Paulo, Brazil
According to Mr. Masiero, with Brazil the largest Portuguese-speaking trading partner of Mainland China, it opened a door for Chinese investments in South America, especially for raw materials and infrastructure development. “Brazil was the third largest exporter of food products worldwide, having exported a total value of US$20.8 billion (MOP167.03 billion) in food products to Mainland China in 2016,” he said. The economics expert stated that until 2010, Chinese investment in Latin America or the Caribbean was very modest, increasing considerably
Flexible China
Paulo Portas, the former Deputy Prime Minister of Portugal and the current Chairman of the International Strategic Council for Latin America and Africa of Portuguese construction company Mota-Egil
According to Mr. Portas, almost 40 years after the fall of the Berlin Wall, the new world order revealed that the balance of power is defined not just by military power but by power of trade, with automation and digitalisation forever altering the world economy. “Uber, the world’s largest ridesharing company, owns no cars. Airbnb, the largest room rental company, owns no hotels. And Skype, the largest voice
after that, with Chinese capital inflows averaging US$8 billion per year - mainly for the extraction industries - and with the majority being directed to Brazil. Chinese infrastructure projects in the country also increased considerably, with Chinese state owned company State Grid Corporation of China having acquired a 16 per cent stake in CPFL in 2016 for a total of US$1.8 billion, and with a Chinese backed U.S.$10 billion project for a 5,000 kilometre transcontinental railway connecting Brazil’s soy growing and ore mining areas with the Peru coast, boosting trade with Asia.
communication [facility], has no phones,” said Mr. Portas. According to the former statesman, the new economy rewarded flexibility and adaptation by governments, with China proving to be more flexible and adaptable to new technologies than “any other region on the planet,” with estimates that 50 per cent of all electric cars will be produced in China in 2020 and that a third of new licences for robotics will be applied for in the country.
Elections
Ng Kuok Cheong a willing ‘fragment’ Lawmakers Ng Kuok Cheong and Au Kam San are again leading two different electoral lists and have submitted their nominations Cecilia U cecilia.u@macaubusinessdaily.com
Pan-democratic legislators Ng Kuok Cheong and Au Kam San submitted their nomination lists yesterday to the Public Administration and Civil Service Bureau. The two lawmakers are to lead two different nomination lists - the Prosperous Democratic Macau Association and the New Democratic Macau Association. Both nomination lists, according to legislator Ng, succeeded in collecting the necessary 500 signatures. In fact, each group received up to 700 signatures from voters, according to legislator Au. When asked if members from the New Macau Association (AMN) are within the nominated lists, Ng said that the world has entered the era of fragmentation of public will and he is willing to be one of the ‘fragments’ of society. “The public and the media to a significant extent have integrated
with the Internet,” commented Ng. “The big union era [in the old days] has ended.” With the inevitable change of public will, Ng said the advantages of fragmentation are groups or individuals that will be more proactive and in depth in engaging. However, fragmentation would also mean more attacks on each other.
“Like our neighbours, they call it ‘catching ghosts’ - which means people would attack those who are assigned by the Communist Party or Leung Chun-ying, the Hong Kong Chief Executive,” the legislator said. Nonetheless, if the majority abandon the act of ‘catching ghosts’ and focus on their respective areas, Ng perceived that the phenomenon of fragmentation could be favourable. “Fragments [can] have resonance,” said Ng.
Strategies
Meanwhile, legislator Au said the
reason for splitting into two groups is to cultivate and attract more new blood. “Of course, [splitting into two] would pose competition but we aim to invite more young people to participate in the city’s social events,” commented Au, adding that young candidates would become society’s valued assets just by participating even if some may fail to be elected. On the other hand, Ng said there will be at least six candidates on one nomination list. Both legislators revealed that time is still needed to confirm the number of candidates. “My group will consist of people of both genders and different age groups,” said Ng. With Ng working as a legislator since 1992 and Au since 2001, legislator Au said having more experience would not be advantageous in the new ‘fragmented’ era, given that many people can participate. “In my opinion, we support democracy and hope that direct elections can happen in future legislative elections,” said Au. “For us, the existence of indirect elections is unbearable.” Au added that all who participate in direct elections, in which candidates except opposition, could all be friends, despite candidates competing with each other.
Business Daily Friday, June 9 2017 3
Macau CEPA
Shuffling up the deal Thirteen years since the implementation of the Close Economic Arrangement between the MSAR and Mainland China it will be renegotiated, with a new agreement to be presented by the end of the year The existing Close Economic Arrangement (CEPA) programme operating between the MSAR and Mainland China will be renegotiated by the end of the year, according to a release by the Office of the Secretary for Economy and
Finance. The release announces that the MSAR Government and the Chinese Ministry of Commerce have already initiated the works to “update” the CEPA agreement, which came into effect in 2004,
with the Deputy Director of Taiwan, Hong Kong and Macao Affairs of the Ministry of Commerce of China, Sun Tong, meeting yesterday with the Chief of Staff of the Office of the Secretary for Economy and Finance, Teng Nga Kan. The new agreement on the works will focus on economic and technical co-operation and in investment protection, while prioritising the role of Macau in the One Road, One Belt policy as a gateway to Portuguese-speaking countries.
The agreement implemented 13 years ago allows local service providers to operate their businesses in Mainland China with zero-tariff treatment, with almost half of the certificate holders – some 306 – providing transport
services, including freight forwarding agencies, logistics, storage and warehousing. As of May 2017, the total value of exports under the CEPA agreement reached MOP801.4 million (US$99.7 million). N.M.
Internet Services
Connecting Taipa CTM is expanding its service provision south of Macau Sheyla Zandonai sheyla.zandonai@macaubusiness.com
Local telecom provider Companhia de Telecomunicações de Macau (CTM) plans to install 3,000 hotspots by the end of this year, according to comments provided by CTM’s Vice-President of Network Service, Declan Leong. Speaking on the sidelines of an event organised in Taipa Village yesterday to mark the launch of
48 new CTM Wi-Fi hotspots in the area, Mr. Leong said that in order for the company to continue to expand its coverage, speed, and the number of hotspots, they “also need to get approval and agreement from shop-owners to allow us to install the equipment inside their shops.” According to information provided by the company, there are currently 2,500 CTM Wi-Fi hotspots located around the city, including tourist
attractions, hotels, commercial centres, and restaurants. The VP, who claimed that CTM’s outdoor coverage is “nearly a hundred per cent,” also said that the company’s 4G coverage has been operating on “full since day one.” “We had full coverage outdoors, and also in the majority of private, indoor environments, we have very good coverage,” he claimed. Mr. Leong added that there are current plans for expansion, now that new casino complexes will also take on the service. With regard to compensating CTM customers affected during the interruption of Internet services in April, announced by the company as being discounted from customers’ bills for the month of June, Mr. Leong confirmed that more information “will be released pretty soon, according to
what we have announced.”
New Wi-Fi hotspots
During the launch ceremony, Ms. Ebel Cham, Vice-President of Commercial of CTM, said that the new services being provided in Taipa “can accommodate the current use of over 5,000 smart devices.” Ms. Cham added that the CTM WiFi services now also cover “all public buses” circulating in Macau. She claimed that the company seeks to “stimulate e-commerce activities,” in addition to “promoting the image of Macau as a tourism city.” Other participants in the ceremony included the Director of Macao Economic Services, Mr. Tai Kin Ip, the Director of the Macao Post and Telecommunications Bureau (CTT), Ms. Derby Lau, and the CEO of CTM, Mr. Vandy Poon. advertisement
Property
Polytex rushing for deadline Details of the completion of construction of the residential project being developed by Polytex Corporation Ltd., located on plots T and T1 of the reclamation land of Areia Preta, have been forwarded to the Land, Public Works and Transport Bureau (DSSOPT) with requested inspection by the Bureau, local Chinese language newspaper Macao Daily reported. While the project licence was approved in 2013 the plot was granted on July 6, 1992, for which the land concession will terminate on July 5 this year. If the project developer is unable to complete the construction and confirm a new contract before the deadline in July, buyers of the new property’s off-plan units might face
similar circumstances to those of the Pearl Horizon project. The Financial Services Bureau previously disclosed that there are some 620 cases of applications for the transfer of stamp duty on the new residential project by Polytex up to January 10 this year, with the payment amounting to MOP120 million (US$14.94 million). The government previously announced it would take back the plot for the Pearl Horizon project in 2015 as the developer’s temporary concession for the site had expired despite over 3,000 of these units having already been sold off-plan. The chairman of the developer, Or Wai Sheun, said earlier this year that the project construction would be completed by May. C.U.
4 Business Daily Friday, June 9 2017
Macau Opinion
Pedro Cortés*
Obrigado, Portugal Tomorrow is Portugal’s National Day, which will be celebrated around the globe, from Brazil to East Timor, with, of course, a special emphasis in the Macau Special Administrative Region. Without the true entrepreneurs and swashbucklers of the past, you – yes, Jack, you! – my sole reader; and you also, my dear Henry, and all of us - would not be here. That’s a fact. We would be in another place, for sure. Probably cooler than in recent days. Or even with less pollution. But surely different from what we experience in this amazing city full of opportunities. The same applies for those who came from Guangzhou and Fujian Province. They would be in a very different place, with rules that are not those we currently have in Macau. Compared to 15 years ago – relying upon the reports of those who were here – Portuguese heritage and language is more protected today. Due to the People’s Republic of China, of course, but also due to the efforts made by Portuguese diplomacy in recent years, with the capacity, vision, savoir faire, energy and outstanding personality of the Portuguese General Consul, Ambassador Mr. Vitor Sereno. I would venture that Mr. Sereno has done more for the Portuguese community, heritage, business, industries in this city than all of his predecessors and even more than any other former Governor – even given that the environment and conditions were different. We should all - Portuguese and non-Portuguese, expats and locals - thank Mr. Sereno for his efforts in giving, as we call it, our “rectangle by the sea” a true role in the development of the Macau Special Administrative Region as a platform between the People’s Republic of China and the Portuguesespeaking Countries. What the Portuguese language and heritage represents to Macau should be esteemed by all Macau society, putting unquestionably behind the stigma of the former Administration country. This applies to various areas of society and we all know where it comes from. Macau cannot disown its past and surely cannot pledge its future with old views. This is a train that even the strongest cannot stop. It might be still too early to evaluate, but one day the history books will confirm that Macau will only be Macau due to what is presently being done. Obrigado, Mr. Sereno; Obrigado, Portugal! *lawyer and frequent contributor to this newspaper.
One Belt, One Road
The Greater Bay Metropolis beckons The Greater Bay Area could be transformed into an integrated metropolis that would function as an international platform for the One Belt, One Road policy. But it would have to further improve the integration of different systems of its cities and regions, economy and development, experts believe Nelson Moura nelson.moura@macaubusinessdaily.com
T
he Greater Bay Area has great potential to be a central metropolis region for the One Belt, One Road (OBOR) policy, but better integration of financial and judicial systems of its different cities and regions would be necessary, several economics and external policy experts stated yesterday at the International Conference on Belt and Road and Macao’s Development. “The extraordinary connectivity in the Pearl River Delta by road, rail and waterways is setting the scene for a globally emerging cluster of cities, including Macau. [The Greater Bay Area] has the potential to become an economic and intellectual powerhouse unmatched anywhere in the world. […] There could be a ‘one megapolis, two systems’ policy,” enthused Richard Vuylsteke, President of the East-West Centre. The importance of the Greater Bay Area was also echoed by the former Minister of Foreign Affairs of Thailand, Surakiart Sathiratha, who believes the area could be a mainstay for OBOR. “The 11 cities in the area account for US$1.5 trillion (MOP12.04 trillion) in trade and with the combined economic size of the area being equivalent to the world’s tenth largest economy, the Greater Bay Area promises to be one of the pillars of OBOR,” Mr. Sathiratha stated yesterday. According to Sathiratha, currently Chairman of the Asian Peace and Reconciliation Council, the Bay Area provides a “strong counterpart” for the ASEAN Economic Community and the Lancing-Mekong co-operation initiatives, facilitating improved Asian co-operation.
take part in the OBOR development’s “high speed train” - although there are different views on how to get that ticket. According to Mr. Ngai, the Chinese central government should create more policies for co-operation between Guangdong Province, Macau and Hong Kong while protecting each region’s special advantages. “A Close Economic Arrangement (CEPA) was created for Hong Kong and Macau for cross-border trade with Mainland China but we still need to improve co-operation in other areas,” he added. For Mr. Lao, that increased co-operation could involve creating “onestop customer control, single licences to allow entry to the three regions, a seamless Guangdong-Macau transport system,” and turning the MSAR into a tariff-free outpost for Portuguese-speaking countries’ products. According to Zheng Yongnian, the Director of East Asian Studies at the National University of Singapore, the Chinese government is seeking to encourage private companies to invest abroad by mobilising stateowned companies, but the reach of companies from the interior of China is limited. “That’s why Guangdong, Hong Kong and Macau can position
themselves as an important part of OBOR as an international platform,” he added. Zheng believes that in order to assume a leading role in OBOR, there should be better integration and co-operation between cities like Macau, Shenzhen and Zhuhai, following a model similar to that of the European Union. “We could take lessons from the European Union; we could create a common real estate market, a common financial market, and a common financial sector. Integration is very important and it would be easier to achieve in the Greater Bay Area since the different cities are not sovereign countries as in the European Union,” he stated.
Growing pains
However, the MSAR Legislator and Director of the Macau Development Strategy Research Centre, Sio Chi Wai, warned that integration would require “proper policy design” to resolve any of the problems that could arise from the difference between legal systems enforced in the different regions. For the former President of the Hong Kong Institute of Planners, Ling Kar Kan, such a large and integrated Greater Bay Area metropolis would have to be a “liveable city” with a development plan focused on sustainable solutions. “[Guangdong-Macau-Hong Kong] should make a comprehensive plan for living conditions. There needs to be a good ecological environment, development of recreational facilities, the setting up of public services that put people first, and creation of an interconnected and efficient transport system,” he concluded.
Getting the VIP ticket
For the Macau Economic Association Chairman, Lao Chi Ngai, the Greater Bay Area has the “VIP ticket” to
Richard Vuylsteke, President of the East-West Centre
Business Daily Friday, June 9 2017 5
Macau
6 Business Daily Friday, June 9 2017
Macau Economy
José Tavares: New wholesale market move by September
A
s the contract for the wholesale market near Jardim Municipal Dr. Sun Yat Sen expires in 2022, having been signed in 1998, the President of the Civic and Municipal Affairs Bureau (IACM), José Tavares, assures that related parties will try to finish a relocation to a new
wholesale market by September of this year, according to local Chinese language newspaper Macao Daily. The comments came during a meeting with the Central Community Services Advisory Committee. The new wholesale market, located at the Cross Border Industrial Zone in Ilha Verde, attracted
some 105 applicants, according to data provided by Guangdong Nam Yue Group, the contractor for the project. The relocation would allow the improvement of support facilities, including additional booths to boost operational scale as well as market competition.
Public departments responsible for quarantine inspection will also be moving into the new market to increase efficiency and ensure food safety. In light of the sales ban on live poultry, the IACM head affirmed that changes will be made to the floor which was initially used for the wholesale of live poultry. Previously, the government said the new wholesale project would be ready in 2016 and that it would cost MOP860 million (US$107 million). C.U.
The latest filing posted by the club operator with the Hong Kong Stock Exchange revealed that 19.5 per cent of the equity interest belongs to Luk Hing WOFE, 38.9 per cent to Zhuhai Wei Chong and 41.6 per cent to Oasis Capital. The registered capital of the new consortium is RMB20 million (MOP23.63 million/US$2.94 million), of which RMB3.89 million is set to be contributed by Luk Hing WOFE, RMB7.79 million
by Zhuhai Wei Chong and RMB8.32 million by Oasis Capital. Luk Hing’s current business in the MSAR – namely, Club Cubic in the City Of Dreams complex in Cotai – is limited to its agreements with Melco Resorts & Entertainment Limited, requiring it to seek the consent of the casino-resort operator if it is to own, operate, or has any interest in developing businesses similar to Club Cubic in the territory, according to its previous filings.
that seeks to connect Portuguese traders and suppliers with international clients. According to a company release, the strategic partnership agreement with AEIM allows mutual support between the members of the MSAR association and the companies registered at BuyinPortugal.pt. ‘Buyin.pt. – Comércio Electrónico, S.A. is proud of its innovation, as the creator of the first B2B e-marketplace for Portuguese exporting companies, assisting the companies registered at BuyinPortugal.pt in their connection with the largest global
commercial power while assuring support to the companies associated with AEIM in connection with Portugal and lusophone countries,’ the company stated. The Portuguese company was also invited by AEIM to participate in the 2017 World Project and Commodity of Global Entrepreneurs Expo to be part of the Macau & Portuguese-speaking Countries’ Commodity (Tianjin) Exhibition Centre to be set up at the 2017 World Project and Commodity of Global Entrepreneurs Expo in the Chinese city of Tianjin, taking place on June 14. N.M.
Investment
Club Cubic Zhuhai Cecilia U cecilia.u@macaubusinessdaily.com
The operator of Club Cubic, Luk Hing Entertainment Group Holdings Ltd., has moved a step closer to opening its club in Zhuhai. The company’s subsidiary, Luk
Hing WOFE, successfully inked an agreement with the Zhuhai Wei Chong Culture Broadcasting Company Limited and Oasis Capital to form a joint venture (Zhuhai Ruiye Bar Management Company Limited) in Mainland China to operate and manage the new branch - Club Cubic Zhuhai.
E-commerce
Mutual support all the e-commerce buzz Co-operation agreement established between Portuguese e-commerce company Buyin.pt - Comércio Electrónico, S.A. and the Macau Importers and Exporters Association Portuguese e-commerce company Buyin. pt - Comércio Electrónico, S.A. has announced it has established a co-operation agreement with the Macau Importers and
Exporters Association (AEIM). Buyin.pt - Comércio Electrónico, S.A. owns BuyinPortugal.pt, a business-to-business (B2B) online platform
Business Daily Friday, June 9 2017 7
Gaming Management
Closing doors Management reshuffle of board of Success Dragon linked to cessation of business with Primus Sheyla Zandonai sheyla.zandonai@macaubusiness.com
S
uccess Dragon International Holdings Limited, a service provider of outsourced management solutions to the gaming industry, has announced it is abandoning its right to acquire further shares in Primus Power Corporation and giving up on the potential acquisition of companies engaging in energy related business in Mainland China, according to a filing by the company with the Hong Kong Stock Exchange yesterday.
The company noted that the decision follows the resignation of its Chief Executive Officer (CEO), Mr.
Jiang Dan. Through Success Dragon Asset Holdings Limited, a directly wholly-owned subsidiary of the company, Success Dragon had invested in 20.82 per cent of the issued share capital of Primus, according to previous company filings. Potential investments of the company included the signing of a renewable energy management framework
agreement related to the development of photovoltaic energy generation and storage projects.
Resignations
In addition to the resignation of its CEO, company Chairperson Ms. Li Xuehua, and an independent non-executive Director, Dr. Jia Limin, have also tendered their resignations, effective last Wednesday.
Upon his resignation, Jiang also quit his functions as a member of Success Dragons’ executive committee, investment committee, nomination committee, and remuneration committee. Jiang had been in the position since March 24, replacing Carlos Luis Salas Porras, who left the company citing the same reasons as the recent resigning individuals; namely, ‘to focus time and effort on other business.’ Mr. Tan Teng Hong has been appoin ted as th e new Chairman, CEO, and Executive Director of the company. Mr. Tan, aged 41, is a member of the board of directors of Banque de Développement de Guinée of the Republic of Guinea, and has worked in a number of reputable global financial institutions engaging in securities research and private banking in Singapore and Hong Kong, according to the filing.
Crime
Macau Judiciary Police help nab chips forger Toh Hock Thiam, the man behind the largest counterfeit casino chip scam in Singapore, was sentenced on Wednesday to seven years and four months in jail, The Straits Times reported yesterday. Toh was arraigned in court last month on 13 counts of engaging in a conspiracy to
exchange fake casino chips for cash at Marina Bay Sands (MBS),run by Las Vegas Sands, an Integrated Resort in Singapore. The 14-day trial leading to his conviction relates to a counterfeit scam dating back to the end of 2015, when Toh exchanged 1,291 fake chips for cash at the Singaporean
casino between the evening of November 22 and early morning of November 23. The loss attributed to MBS due to the scam amounts to nearly S$1.3 million (US$940,773/MOP7.55 million) the publication reports. The scheme was discovered only a week later when a cashier noticed a slight
discolouration in one of the chips. The forger had been apprehended in Malaysia on December 31, 2015, with the help of Malaysian police and Macau Judiciary Police, and handed over to the Singapore police authorities the next day. Deputy Public Prosecutor Asoka Markandu said Toh was directly responsible for 420 counterfeit chips, but
the court heard he could be indirectly held accountable for the total losses MBS sustained. Court documents did not reveal, however, where the counterfeit chips were made. Two accomplices also participated in the scam, one helping Toh distribute the chips and collect the money, the other helping to recruit some 16 runners. S.Z. advertisement
Refund
Suncity wants its money back Suncity Group Holdings is still trying to retrieve about RMB315.26 million paid out under two memorandums of understanding involving two property development projects, according to the group’s filing with the Hong Kong Stock Exchange. The agreements were both signed in December 2011 and relate to a HK$200 million property investment in Anhui Province and a RMB150 million property
investment in Jiangsu Province, with the group having ‘notified vendors about the termination of the MOUs’ and demanding the refund. Some RMB95 million of the RMB150 million has been refunded on one of the properties and of the HK$200 million ‘half’ is expected to be refunded ‘by the end of July 2017’ with the remainder ‘by the end of this year,’ the filing declares.
Investment
Get it while it’s hot Top management for both Melco and MGM China are purchasing shares in their respective companies, according to recent filings with the Hong Kong Stock Exchange. Evan Andrew Winkler, Managing Director of Melco International Development Limited, subscribed to some 2 million shares from Melco at a closing price of HK$19.90 (US$2.55), with the total shares worth HK$42.3
million. The validity period of the share is 10 years, which spans from June 7, 2017 to June 6, 2027. Meanwhile, MGM China Holdings Limited has also announced the grant of some 2 million shares to Grant R. Bowie, the CEO of MGM, with the closing price of shares at HK$17.132, making for a total of HK$38.0 million. C.U.
8 Business Daily Friday, June 9 2017
Consigliere
Tools of perfection lie in their selection Brew your own cuppa! Afternoon tea is a traditional activity in Britain going back more than a century. But in Macau it has become a trendy lifestyle choice for just a short while. A good afternoon tea venue should have great food, warm service and eye-catching interior design for people not only eating but sharing photos on social media. Cha Bei at Galaxy Macau is ideal, meeting all the aforementioned criteria. Cha Bei is the Chinese pronunciation for a tea cup. With its floral theme, Cha Bei is decorated with
lovely pink, white and green reminiscent of a big garden. It is a space where you can enjoy food, art and design, and relax, share and infuse your own stories and ideas in great company. In order to provide a chic lifestyle for people, Cha Bei periodically launches a select menu and products, and just like fashion the trend changes every season. Throughout June, ten kinds of tea from Canton Bloom are available in Cha Bei. Canton Bloom was founded by young Hong Kong
tea enthusiasts who embrace Hong Kong’s love for all types of tea and tisanes. They believe in the body’s innate ability to heal itself given the right tools and tea is the right tool. They travel around the world to find the best quality tea leaves and natural ingredients to make the aromatic tea – pledging that all the aromatic tea is made only from natural ingredients certified toxin and pesticide free. Tea pairing is a form of knowledge and an art just like wine pairing.To pair with a wide selection of fresh salads in Cha Bei, the Peachy Oolong which originates from Taiwan is the best choice. The fragrance has a perfectly ripe fruit in the tea pack with a smooth astringency and lingering floral aroma. It is well known that Oolong tea can help burn off carbohydrates, and it also contains a cocktail of potent antioxidants to ward off wrinkles and sagging skin. Meat is always good to pair with some stronger flavour drink. The Hot Caramel Apple blends South African organic rooibos tea with antioxidant-rich infusion brews to a beautiful deep colour with overtones of sweet caramel and delicious apple. Drinking this tea with meat really helps enhance the flavour of the dish as well as reducing that fatty feel. A good afternoon tea venue cannot be called such without desserts. Cha
Bei offers an array of mouth-watering sweet treats that are not only delicious but beautifully presented. To pair with desserts, the aromatic flavour of the Fruity Houjicha not only ‘cuts the grease’ but refreshes the mind. Roasting only ‘First Grade Green Tea’ for Houjicha, it is infused with a selection of rose hip, lemon peel, orange peel and hibiscus. In addition to the teas above, there is a wide selection of Canton Bloom aroma tea available at Cha Bei during this month. All the teas presented not only smell good but are just right for your tastebuds, too! Why not replace those sugary fizzy drinks with your own cup of tea! Edwina Liu, Essential Macau Editor
The elite US$156,000 supercar no-one is talking about The hybrid is handsome, powerful, great on the road, and luxurious. So where’s the buzz? Hannah Elliott
The 2017 Acura NSXs have been on the road for a year now, but chances are, you haven’t seen one. It’s been delayed and ignored, and it suffers from a weak public image because of its association with the hordes of forgettable Acuras out there. That’s too bad. Because after test-driving a US$204,600 version of the car, I can tell you it more than deserves to be considered in the same vaunted category as the Audi R8, the Mercedes AMG GT, and even the McLaren 570S.
The forgotten supercar
Here’s the short version of the car’s troubled life in
recent years: Honda first announced plans for a new NSX—the successor to a highly praised first-generation NSX—in 2007 but then canceled production after the economy went south in 2008. Then, in 2011, the company said it had started again on a second-generation, updated NSX concept. By 2012 it was showing one at the Detroit Auto Show, but it took an additional three years before the production model hit the same car show in 2015. The modern NSX finally went on sale last year, nearly a decade after first rumors. Designed by Michelle Christensen and built in Ohio, the 2017 NSX follows the same vein of calculated angles and muted aggression of the original NSX, conceived in Japan in 1990. When compared
against such distinctively designed supercars as the brash Chevrolet Corvette, the callipygian Ferrari California, the robotic Nissan GT-R, and the discreet Porsche 911, the NSX holds its own with subdued flair. Christensen, who designed the exterior, has said she used “animals and trees” as reference points in the restrained final look; I don’t quite see poplars or willows in the NSX, but careful sobriety is clearly there. It’s as if Honda didn’t want to risk making its important new supercar look too nuts—better to make it look polished, rather than polarizing. I’m glad that an automaker resisted the urge to overstyle just for the sake of impact. We’ve seen that before, and it’s not pretty. Instead, the NSX comes with thin LED headlights strung like diamonds on either side of a flared front grille. The air intakes flanking its rhinoplasty-perfect nose match those set on each side of the rear haunches. The 20-inch alloy wheels are set widely on either side. The (only) two seats are positioned comfortably and supportively inside the cabin, and the visibility on all turns is actually startling, when you consider the black walls that impede vision in most other supercars.
And how does it drive?
“Aggressive,” “raw,” “guttural,” “beastly” - these are NOT the words to describe how the NSX looks and drives. Nor “elegant,” “curvaceous,” nor “buxom.” NSX falls in the center of the Approval Matrix of all those extremes. Is there such thing as an androgynous coupe that edges toward the sylphlike, with the balance of a dancer and the manners of a samurai? This is it. Did you know the NSX is an all-wheel-drive hybrid? You wouldn’t pick up on this if you didn’t already know before getting behind the wheel. And you wouldn’t know it from watching one drive past. Nothing much lets on about its hidden electric power except for a small indicator on the dash and the fact that the engine kicks off when you come to a stop outside Track mode. It’s also incredibly hushed—there’s even a “Quiet” drive mode that lends utter stealth. Guys who love a Corvette will complain that the NSX needs more growl behind
Business Daily Friday, June 9 2017 9
Consigliere
Eight ways you’re doing burgers wrong It’s now easier than ever to avoid the pitfalls to perfection often not the fault of the restaurants. Health authorities frown on anything cooked less than medium and often require well done. “I don’t know why we have to cremate burgers,” he says.
Richard Vines
A
great burger is a beautiful thing, as simple as it is delicious. With just a few cheap ingredients, it packs a dizzying punch of flavor. But a bad burger is like dad-dancing: It lacks taste and finesse and often is plain embarrassing. So where does it go wrong? We asked someone who has spent years searching for the perfect burger, eating hundreds along the way. David Michaels has just published that research in a book, “The World Is Your Burger: A Cultural History” (Phaidon, US$39.95/£24.95). The book was about a decade in the making, during which the London-based author visited everywhere from McDonald’s to tiny independent stores. In this 430-page encyclopedia Michaels traces the history of household-name chains and also looks at cult burgers and regional upstarts. Along the way, he spoke to giants such as chef Daniel Boulud, but he’s no snob. He remembers with fondness his first-ever visit to a McDonald’s, aged 12. “I can still taste that first bite of a Quarter Pounder with Cheese and it’s fair to say that was the moment my lifelong passion for the hamburger was born,” he writes.
7. Beware brioche
“I like a traditional burger bap, like a good sesame-seed bun,” Michaels says. “Brioche takes away from the taste of the meat. And never serve bread that tastes stale.”
8. Keep It Simple, Stupid
everybody loves Heinz, so why try and improve on it?”
should be on the side. I am OK with cheese.” That’s a relief.
2. Going skinny
5. Melt that cheese
A half-pounder is good. A quarter-pounder is acceptable. Anything thinner is all wrong. “I like a thick patty,” Michaels says. “A lot of places do compromise but a half-pounder is a nice size. It’s a good meal. If you are hungry, you want something meaty.”
3. Don’t curb the fat
Here’s the eight biggest mistakes made in search of patty perfection.
“You need fat to give a burger that moist taste,” Michaels says. “I don’t like a dry burger. Burgers by their very nature should be picked up and squished and the juices come out. OK, there are fine-dining burgers. But for the most part, just pick it up and get messy with it.”
1. Getting overly creative
4. Going over the top(pings)
The best condiments have stood the test of time, so use them. “If you are going to serve sauce, use Heinz ketchup, French’s mustard or a good Dijon,” Michaels says. “So far as feeding the mass market goes,
One of Michaels’s bugbears is un-melted cheese. And he’s also bored with Cheddar and American varieties. “I like brie, I like mozzarella, I like Swiss cheese, I like blue cheese,” he says. “Mix it up a little bit, you know. But for me a burger is always about the meat.”
6. Well done is a crime against burgers
“I’d say 90 per cent of burger places overcook their meat,” he says. It’s
You generally don’t need a lot of toppings, Michaels reckons: “People are putting too much on. If a burger is really good, it doesn’t need a lot. Great meat speaks for itself. I don’t like salads in burger either. They
its power, but the NSX isn’t meant for those guys, anyway. NSX has three electric motors: two on the front axle and a third between the twin-turbo, mid-engine V6. This helps it achieve 573-horsepower and 22 miles per gallon on the highway, among the best fuel efficiency of any in this segment. (The North Star for the hybrid supercar group would be Porsche’s US$850,000 918 Spyder, which gets
nearly 90mpg.) Some have criticized as “not fun” the ample driving technology that the NSX uses to enhance acceleration and handling. “Magnetorheological” dampers control rolling independently at all four corners; in Track mode, for instance, the car corrects itself coming out of corners so that you don’t -can’t- slide. The thing hits 60 miles per hour in 2.7 seconds; top speed is 191mph. (Did I mention I had the prototype up on Pike’s Peak?)
Michaels reckons there are too many options, often with a variety of toppings and condiments to try to create something novel. Instead channel creativity into using different meats, offering lamb, buffalo and duck as good alternatives to beef. And finally...
Michaels offers three hotspots around the world for that special burger:
Burger Table, Sao Paulo: There are now two branches of this simple restaurant, where you pay on arrival and then pick up your burger to eat at a communal table. There are no frills and there isn’t a whole lot of choice, but the burger is epic. Hard Times Sundaes, New York: This started out as a truck in Brooklyn before migrating to Manhattan. It’s is a favourite of aficionados, who are happy to go anywhere and line up for as long as it takes to get chef Andrew Zurica’s burgers. Fergburger, Queenstown, New Zealand: It’s not so much the quality of the burger here, so much as its popularity. “Backpackers queue from early morning to late at night,” Michaels says. “I’ve never seen anything like it in the world.” Bloomberg
Those people are wrong. This car is a joy to drive. With swooping, swift acceleration, nimble steering, and alert, hyper-quick brakes, it easily compares well against the Audi R8 and the McLaren 570S. This type of precision, my darling, is not boring. It’s exhilarating. In fact, go drive the NSX for 30 minutes and come back and tell me you didn’t have fun. I dare you. Bloomberg
10 Business Daily Friday, June 9 2017
Greater China Code of conduct
Moody’s loses Hong Kong credit note appeal against regulator The regulator had said a 2011 report on public companies breached the code by failing to provide sufficient explanations for its judgments and not ensuring the accuracy of its claims Benjamin Robertson and Denise Wee
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oody’s Corp. lost an appeal against a judgment that found it broke Hong Kong’s regulatory code of conduct. Moody’s Investors Service was appealing a decision by the Securities and Futures Appeals Tribunal in March 2016 that resulted in a HK$11 million (US$1.4 million) fine and affirmed an action against the company by the city’s Securities and Futures Commission. The regulator had said a 2011 report on public companies breached the code by failing to provide sufficient explanations for its judgments and not ensuring the accuracy of its claims. That ruling alarmed investors and analysts, concerned that it could strangle critical commentary about Hong Kong’s markets. “The conclusion that outsiders might draw from this case is that Hong Kong’s chief securities regulator is policing the content of market research and analyses, even when issued by licensed firms,” said Basil Hwang, a Hong Kong-based partner who specializes in financial regulation at Zhong Lun Law Firm. “This is something that in other jurisdictions would be a matter of civil liability lawsuits taken up by private individuals or corporations.”
While the judges on Thursday rejected the appeal, they did agree with some of Moody’s arguments. The tribunal was wrong to call the research note a credit-rating report, they said, because it did not meet the necessary criteria. That distinction has wider significance for the market, according to Timothy Loh, a Hong Kong-based securities lawyer. “There is far less risk that laymen, financial advisers, journalists and others giving opinions as to credit-worthiness would be inadvertently carrying out a Type 10 regulated activity,” Loh said, referencing the SFC rules that govern credit-rating firms.
Warning signs
The 2011 Moody’s note highlighted warning signs about weak corporate governance, opaque business models and unclear financial reporting at dozens of Chinese companies. The tribunal said in March last year that the note qualified as a ratings notice, which meant it should be held to higher standards. At a January appeal hearing, Adrian Huggins, lawyer for the New Yorkbased credit-rating firm, told the judges that Moody’s had considered using the note’s contents as part of a credit-review report but “decided not to as it was inappropriate.” A bright line between regulated and
unregulated activities had been blurred by the regulator, Huggins said at the time. “Moody’s did not engage in misleading conduct and disagrees that the Securities and Futures Commission should be able to regulate the content of research publications,” Donough Foley, senior vice president for government and public affairs, said in an emailed statement. “Moody’s is reviewing the court’s opinion and is considering its options.” An SFC spokesman declined to comment. Shares plunged and borrowing costs jumped for some of the companies, including Winsway Coking Coal Holdings Ltd. and West China Cement Ltd., in the days after the note was published. Moody’s said
the research was a primer on possible credit-rating reviews, rather than a review itself. A first of its kind in Hong Kong, the tribunal’s decision was seen as having wide-ranging implications for how ratings companies operate in the former British colony, especially as it came at around the same time as an SFC action against U.S. short seller Andrew Left. In August, Left was found culpable of market misconduct for a report that his Citron Research firm published that was critical of real estate developer Evergrande Real Estate Group Ltd. He was fined HK$6.9 million and banned from the Hong Kong market for 5 years. Left lost an appeal against the ruling in January, and a second appeal hearing is still pending. Bloomberg
Trade
U.S. business group urges trade fixes ahead of China’s party congress China says foreign companies receive equal treatment under Chinese laws and policies, but many sectors of China’s economy are either off limits or severely restricted to foreign investors A U.S. business lobby in China said on Thursday that Washington should use leverage afforded by China’s desire to avoid trade frictions with the United States ahead of its Communist Party Congress this fall in order to fix market access discrepancies. Beijing and Washington agreed to 100 days of trade talks after U.S. President Donald Trump met his counterpart Xi Jinping in April, aimed at cutting last year’s US$347 billion U.S. trade in goods deficit with the world’s second largest economy. But critics within U.S. industry have said that outcomes of the talks so far have yielded only superficial remedies and failed to address more pressing issues of Chinese market access restrictions and industrial policies. Social and economic stability is seen as a top priority for China’s ruling elite ahead of a 5-yearly party congress this fall. Diplomats suggest that turmoil in relations with the
United States would be an unwanted distraction for Xi ahead of a tricky leadership transition within the party. William Zarit, Chairman of the
American Chamber of Commerce in China, said the Chinese leadership wants to go into the congress “without any major difficulties in the trade area with the U.S..” “So, I’m actually hoping that this can be a positive for coming up with some measures that will address the fairness and reciprocal treatment issues,” Zarit said in a meeting with reporters.
Using that leverage ahead of the congress was “part of the conversation” with U.S. officials and lawmakers when the chamber made a lobbying trip to Washington in early May. But Zarit added that it was not a long-term solution and that the Trump administration needed to be more strategic in trade relations with China. During the May trip, the chamber met with U.S. Treasury Secretary Steven Mnuchin, Trump trade advisor Peter Navarro, and dozens of lawmakers, including Republican Senate Majority Leader Mitch McConnell, and pressed them to ensure U.S.-China trade relations were based on “reciprocal treatment”. The U.S. business community in China, which had long lobbied Washington against aggressive policies on China out of fear of retribution, has in recent months advocated for more forceful measures to get China to open its market wider. China says foreign companies receive equal treatment under Chinese laws and policies, but many sectors of China’s economy are either off limits or severely restricted to foreign investors. Reuters
Business Daily Friday, June 9 2017 11
Asia
Finance
PBOC set to take centre stage hours after expected Fed hike The yuan’s recent surge has turned around its weakening bias and the deleveraging campaign, revved up a gear in April, has propelled interbank rates higher
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ith a Federal Reserve interest-rate hike next week all but a done deal, the burden of anticipation is shifting to a less predictable central bank 7,000 miles away: China’s. When the Fed last hiked, in March, the People’s Bank of China followed suit hours later, boosting borrowing costs in what was seen as a bid to support the yuan by preserving the rate advantage over the U.S. Viewed at the time as a sign the two central banks were moving in step, much has changed over the past three months. Economists are more skeptical that the PBOC will track the Fed this time around, with ING Groep NV, Australia & New Zealand Banking Group Ltd. and UBS Group AG judging China has already done enough. The yuan’s recent surge has turned around its weakening bias and the deleveraging campaign, revved up a gear in April, has propelled interbank rates higher. “The PBOC will remain on hold,” said Tim Condon, head of Asia research at ING in Singapore. “The last rate hike was part of the tightening of monetary conditions, which included curbs on financial-system leverage. I think the authorities now will adopt a wait-and-see approach to determine whether more tightening is needed.” Since the March hike -- which saw the PBOC boost the rate it charges in open-market operations and its medium-term lending facility by 10 basis points -- China has taken the yuan in hand, altering its approach
to managing the currency in a bid to drive it higher, and burning bears in the process. Officials have also made a show of tackling financial risk, cracking down on speculation and leverage amid angst over the country’s record debt pile. Benchmark bond yields spiked to a twoyear high last month, and stocks slid. Wang Tao, head of China economic research at UBS in Hong Kong, also sees the PBOC standing pat next week, even with odds of a Fed hike above 90 per cent, according to pricing of Fed funds futures contracts. “Yuan depreciation pressure has faded,” meaning U.S. tightening will have limited impact on the currency, she said. “The market has more or less already priced in a June Fed hike.”
Clockwork
China has a history of trying to preempt the impact of Fed moves. In the run-up to the December 2015 Fed hike, officials tried to de-emphasize the yuan’s exchange rate versus the dollar, publishing a new index of the currency valued against a range of counterparts. The news sent it tumbling, however, and by the eve of the U.S. announcement China was intervening to prop up the yuan. The Fed’s rate rise a year later also rocked Chinese markets, with the unexpected inclusion of a prediction for three increases in 2017 contributing to the yuan’s slide to a 2008 low. Conversely, the currency rallied after the PBOC matched the Fed in March. The Chinese central bank didn’t
reply to a fax request seeking comments. The groundwork the PBOC has put in place over the past three months means that China is now leading the Fed in terms of tightening, rather than following it, said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. “China faces little pressure to follow the Fed because its effective interest rates have already gone up noticeably,” said Liang Hong, chief economist at China International Capital Corp. in Beijing. She cited the almost 1 percentage point increase in 10-year bond yields over the past year.
“China faces little pressure to follow the Fed because its effective interest rates have already gone up noticeably” Liang Hong, chief economist at China International Capital Corp. But not everyone is letting their guard down. Standard Chartered Plc’s Eddie Cheung says China’s rate gap with the U.S. is still a focus for the PBOC. “Policy makers have made it very clear that they want the yuan to be strong in the near term,” said Cheung, a currency strategist in Hong Kong. He sees the PBOC boosting rates on open-market operations after the Fed so the rate differential
doesn’t become a reason for investors to renew selling pressure on the yuan. Officials are speculated to have paired stronger yuan fixing rates over the past few weeks with dollar sales to re-orient the currency on a rising path. The exchange rate jumped 1.2 per cent in May, posting the biggest monthly advance in more than a year. While that’s forced strategists to moderate their forecasts, they still expect further losses. The yuan was at 6.7939 per dollar in Shanghai Thursday, stronger than its 6.8002 average over the past year. Scotiabank, too, expects a repeat of March, with analysts tipping another 10 basis-point increase to the PBOC’s medium-term loan rate should the Fed hike by 25 basis points. China may have been supercharging the yuan to insulate it ahead of a potential dollar rally on the Fed, says Tom Orlik, chief Asia economist for Bloomberg Intelligence in Beijing. Evidence that growth in Asia’s largest economy has peaked this year also makes raising borrowing costs less palatable, so supporting the currency is a good alternative, he said. Read more: China’s Growth Dividend for World Economy Shows Signs of Fading While it isn’t necessary for the PBOC to follow the Fed this time, the potential for more U.S. tightening over the next three years means they’ll have to confront the issue again, says Hua Changchun, global chief economist at Guotai Junan Securities Co. in Shenzhen. “The PBOC will be in a dilemma later,” Hua said. “Downward pressure on China’s economy will mount late this year and next year -- following the Fed at that time will be painful.” Bloomberg news
12 Business Daily Friday, June 9 2017
Asia Missile
North Korea tests short-range missiles as Moon halts shield Kim has now conducted four missile tests since Moon was elected last month, complicating the new President’s ambitions to engage with Pyongyang Seyoon Kim and Shinhye Kang
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orth Korea launched a series of short-range missiles early Thursday that appeared to be designed to attack ships, the latest provocation by Kim Jong Un’s isolated regime. South Korea’s Joint Chiefs of Staff said the rockets -- probably cruise missiles -- were fired from the eastern port of Wonsan and flew about 200 kilometres (124 miles). South Korean President Moon Jae-in condemned the launch, which came a day after he suspended the deployment of an American missile shield. North Korea’s 10th test of missile technology this year comes after Kim told his air force to be ready to bomb U.S. aircraft carriers that are gathering in the western Pacific, according to China’s official Xinhua News Agency. On Tuesday, the U.S. Navy said its Nimitz carrier left San Diego to join the Carl Vinson and Ronald Reagan as part of a routine deployment. “We will not take a single step backwards or compromise on security,” Moon was quoted as saying at a National Security Council meeting, according to his spokesman Park Suhyun. “North Korea will only gain
international isolation and economic difficulty through its provocations.” Kim has now conducted four missile tests since Moon was elected last month, complicating the new president’s ambitions to engage with Pyongyang. Moon temporarily halted the installation of remaining components of the U.S.’s Terminal High Altitude Area Defence system, known as Thaad, pending an environmental impact assessment. He previously called for a review of the deployment that was approved by his predecessor despite protests from China.
while the U.S. reaction has so far been muted. “I hope any environmental concerns related to the full deployment of Thaad will be dispelled with a quick and thorough review,” House Foreign Affairs Committee Chairman Ed Royce said in a statement Wednesday. A full environmental assessment could take as long as a year, Yonhap News reported, citing a South Korean presidential official.
Defied sanctions
North Korea has accelerated its missile testing program in defiance of United Nations sanctions as Kim seeks to develop a device that can deliver a nuclear warhead to North America. Before Thursday’s launch, Kim had conducted 78 ballistic missile tests since he took power in 2012,
of which 61 were considered to be successful, U.S. lawmaker Mike Rogers, chairman of the House Armed Services strategic forces panel, said Wednesday. The U.S. last week tested a defence system that it said successfully intercepted and destroyed a mock intercontinental ballistic missile. The trial was the first intended to replicate the flight profile of an ICBM that could be deployed by North Korea. Recent missile tests by Kim showed possible advancements in distance and accuracy. On May 14, North Korea fired a rocket that analysts estimate had a range of 4,500 kilometres, putting it within reach of Guam. Last week it launched a Scud variant it said landed within seven meters of its target. Bloomberg
China, U.S.
Two launchers for the Thaad battery were deployed in April in Seongju county, more than 200 kilometres southeast of Seoul, with four more needed to make the system fully operational. Moon ordered an investigation into how the final components arrived in South Korea without the defence ministry informing him. The suspension may please China, which had retaliated to Thaad by restricting some tourism and retail business with South Korea. Its foreign ministry reiterated its opposition to the deployment on Wednesday,
Green energy
Vietnam conglomerate plans US$1 bln solar parks project TTC’s interest in solar marks an expansion into clean energy in a country that relies on hydropower for most of its renewable capacity Mai Ngoc Chau
Vietnam’s TTC Group, a sugar, energy, real estate and tourism conglomerate, is planning to spend as much as US$1 billion on an ambitious plan to build one of the country’s largest portfolio of solar projects in an effort to capitalize on the nation’s growing power needs. “Solar energy is very hot right now as the recent pricing set by the government is reasonable, development costs are much cheaper and coalfired power plants have caused so many concerns,” Chief Executive Officer Thai Van Chuyen said in an interview at the company’s headquarters. “Vietnam always needs more power every year for its expanding economy.” The Ho Chi Minh City-based company is looking for new investors for 10 to 20 solar parks it expects to have in operation by 2018, Chuyen said. The company, which will fund 30 per cent of the project, is in talks with banks and financial institutions for the remainder of the funds needed for the parks, which would account for total capacity of as much as 1,000 megawatts, he said. TTC’s interest in solar marks an expansion into clean energy in a country that relies on hydropower for most of its renewable capacity.
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Vietnam is also facing a power gap. The country will need to invest US$74 billion in coal, gas, wind, solar and hydro power plants through 2025 as power demand doubles, Bloomberg New Energy Finance wrote in a report in March.
Power gap
To address the power gap, Vietnam’s government has vowed to boost the country’s installed power capacity by
14 per cent annually between 2015 and 2030. TTC Group’s Gia Lai Electricity JSC unit will oversee the development of 800 megawatts of the solar projects, Chuyen said. Related, the subsidiary is seeking mergers and acquisitions in hydropower and wind power in an effort to lead the nation’s green energy sector by 2020, said Chuyen, who’s also chairman of the unit. Gia Lai Electricity, in which International Finance Corp. and Armstrong Asset Management hold a combined stake of 36 per cent, plans to remove the 49 per cent ceiling from its foreign ownership limit, Chuyen said, without elaborating
on the timing. Gia Lai Electricity also plans to acquire a 51 per cent stake in a 40-megawatt wind power project in a central-region province this year, according to the group’s CEO. The unit, whose shares are traded on the Hanoi Stock Exchange’s Unlisted Public Market, expects to list shares on the Ho Chi Minh City Stock Exchange in 2020 and looks to raise registered capital nearly sixfold to more than 4.1 trillion dong (US$181 million) through 2020. TTC Sugar, which plans a Singapore listing in two years, will develop 200 megawatts of the solar projects, Chuyen said. Bloomberg
Founder & Publisher Paulo A. Azevedo, pazevedo@macaubusinessdaily.com Editorial Council Paulo A. Azevedo; José I. Duarte; Mandy Kuok Newsdesk Mike Armstrong; Óscar Guijarro; Nelson Moura; Kelsey Wilhelm; Matthew Potger; Cecilia U; Sheyla Zandonai Group Senior Analyst José I. Duarte Design Aivi N. Remulla Photography Cheong Kam Ka, Ruka Borges, Gonçalo Lobo Pinheiro, António Mil-Homens, Carmo Correia Contributors Albano Martins; 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
Business Daily Friday, June 9 2017 13
Asia Corruption
Former South Korean minister jailed over role in Samsung merger-Yonhap He was accused of abusing his authority as minister to pressure the NPS to cast a key vote in favour of the US$8 billion merger of two Samsung Group affiliates A Seoul court on Thursday sentenced a former South Korean health minister to two and a half years jail for his role in a corruption scandal that led to the impeachment and arrest of former president Park Geun-hye, Yonhap reported. The ruling is one of the first from several ongoing trials that emerged from the scandal, including that of Park herself and Samsung Group chief Jay Y. Lee. Moon Hyung-pyo, a former minister of health and welfare during the Park administration and subsequent chairman of South Korea’s National
Pension Service (NPS), had been indicted and arrested last December. He was accused of abusing his authority as minister to pressure the NPS to cast a key vote in favour of the US$8 billion merger of two Samsung Group affiliates, Samsung C&T Corp and Cheil Industries Inc in 2015. The health ministry supervises the NPS, which held a substantial stake in both companies. The NPS supported the merger deal in 2015. The Seoul Central District Court said Moon had “severely harmed the independence of the NPS by pressuring
it through health ministry officials”, sentencing him to two and a half years in jail, according to Yonhap. Moon had denied the charges. Prosecutors have argued Jay Y. Lee and other former Samsung Group executives gave bribes to Choi Soonsil, Park’s long-time confidante, and in return, received political favours and government support for the 2015 merger, which prosecutors say transferred control of the key company to Lee from hospitalised patriarch Lee Kun-hee at the expense of other shareholders. Jay Y. Lee, held in detention and undergoing trial on charges such as bribery and embezzlement, has denied all charges. Choi and Park, also in detention and undergoing trials on charges such as abuse of power and extortion, have also denied all charges. Reuters
Defence
Japan weighs adding missile shelters as North Korea threat grows Isabel Reynolds and Yuki Hagiwara
Japan’s ruling party urged Prime Minister Shinzo Abe to consider building missile shelters and carrying out more evacuation drills in response to the growing threat from North Korea. Television and other advertising should also be used to increase public awareness of the need to evacuate to a robust building or underground shopping centre if a ballistic missile heads for Japan, the Liberal Democratic Party said in a proposal submitted to Abe on Thursday, hours after Kim Jong Un’s regime fired another volley of missiles. Abe told the lawmakers submitting the proposal that he wanted to deal properly with making sure the public knows what to do in the event of a missile falling on Japan. Nuclear-armed North Korea, which already possesses rockets that can reach Japan, has accelerated its missile-testing program this year. Abe’s government is considering how to bolster its existing two-layer missile-defence system, and his party has previously proposed obtaining the capacity to counter-attack.
“The country must take rapid and effective action to deal with the new level of threat from North Korea,” the LDP said in the document. A wide variety of evacuation drills should be held, including in densely populated areas, it said. They should include training on dealing with chemical attacks and Japan’s Self-Defence Forces need to be involved, it added. Local governments need to designate existing buildings and
underground shopping centres as evacuation points, calculate the number of people they can hold and consider building new shelters, according to the proposal. It recommends the central government formulate a plan for evacuating Japanese citizens from South Korea in an emergency.
‘Reduced to ashes’
North Korea regularly threatens Japan with nuclear annihilation. The regime’s official KCNA news agency warned Thursday that the country may be “reduced into ashes” if it “behaves wickedly.” Kim has conducted 10 missile tests this year in defiance of United Nations sanctions. The rockets fired on Thursday were thought to be anti-ship cruise missiles that don’t present a direct threat to the Japanese mainland. A ballistic missile launched from North Korea would probably take about 10 minutes to fly the 1,600 kilometres (1,000 miles) to Japan’s southern island of Okinawa, according to the government’s civil protection website, leaving little time to evacuate. The government already provides information on a website about how to proceed if the missile early-warning system, called J-Alert, is activated, but the party said most people are unaware of it. Bloomberg
Fuel
Philippines eyes US$2-bln storage facility for LNG imports The country needs to step up power generation capacity by 7,000 megawatts over the next five years to support a fast-growing economy and wants foreign investors to help Enrico Dela Cruz
The Philippines aims to build a US$2-billion receiving and distribution facility for imported LNG, as it seeks to replace depleting domestic gas reserves that now produce a fifth of its power, the energy department said. Construction could be completed by 2020, or four years before the Malampaya natural gas field is depleted, Energy Secretary Alfonso Cusi said in a presentation to an industry forum this week. The Philippines’ energy demand will triple by 2040, with electricity requirements anticipated to grow four times from 2015, Cusi said during the forum. The Philippines needs to step up power generation capacity by 7,000
megawatts over the next five years to support a fast-growing economy and wants foreign investors to help. Chinese and Japanese companies are among the foreign investors who want to help build energy infrastructure, including liquefied natural gas facilities, Cusi told Reuters in February. The LNG project, which includes a 200-megawatt power plant, is among the investment opportunities up for grabs in the country’s long-term energy plan, which seeks to add power capacity of 43,765 MW by 2040, Cusi said. “Hopefully, with Dutertenomics attracting the adequate level of private investments, we can reach our targeted additional power capacity by 2040,” he said. Cusi was referring to the economic
agenda of President Rodrigo Duterte, which envisages massive spending to build new infrastructure and modernise existing facilities. Several firms have expressed interest in building LNG facilities in the Philippines, including Manila Electric Company, formerly in talks with Osaka Gas Co Ltd for a joint venture. Energy authorities said the talks halted because both decided to separately reassess the power supply situation. In April Philippine power producer First Gen Corp said it was willing to work with the government to build a US$1-billion LNG terminal to sustain its gas-fired power plants currently running on Malampaya gas. The operator of Malampaya, a unit of Royal Dutch Shell Plc , has also been looking to set up a floating regasification facility to sell LNG in the Philippines. Australia-listed Energy World Corp Ltd has been building an LNG hub in eastern Quezon province that includes a floating storage regasification unit and power plants. Reuters
In Brief Power
Japan’s Tepco, Chubu eye US$910 mln cost cut from merging fossil businesses Tokyo Electric Power Company Holdings (Tepco) and Chubu Electric Power Co said on Thursday they aim to cut costs by more than 100 billion yen (US$910 million) a year within five years after combining their fossil fuel power plants under their JERA Co joint venture. The two companies, which had agreed on the integration in March, signed a contract for this on Thursday. The biggest and the third-biggest of Japan’s regional power utilities aim to combine the businesses in AprilSeptember 2019 to form a company that will oversee 68 gigawatts of capacity in the country and account for nearly half of domestic power generation. Oil
Australian provincial gov’t approves start of US$600 mln gas pipeline The government of Australia’s Northern Territory on Thursday gave the go-ahead to start building an A$800 million (US$600 million) gas pipeline that could help ease a shortage of the commodity in the country’s east. Jemena, owned by State Grid Corp of China and Singapore Power, was given permission to build the westernmost portion of the 622 kilometre (386 mile) line designed to join gasfields in northern Australia with the eastern state of Queensland. Australia is the world’s second-largest liquefied natural gas (LNG) exporter, but has faced a growing crisis over local gas supply with prices rocketing over the past two years as the commodity is shipped abroad. “Jemena has indicated that it will start construction ... as soon as practicable to take advantage of the dry season,” Northern Territory Minister for Resources Ken Vowles said in a statement, referring to the drier months between May and October. The initial portion will be over 340 kilometres long. Investment
Billionaire VC Draper shifts attention from China to Indonesia Billionaire investor Tim Draper sees opportunities in Indonesia, especially with bitcoin and blockchain technology, as entrepreneurs take advantage of a lack of modern banking infrastructure to build their own. Despite its young tech-savvy citizens raised on smartphones and apps, Indonesia has the second-highest dependency on cash in the world after India, according to the World Bank. The managing partner of Draper Associates expects users to jump to cryptocurrency. “They don’t have very good banking services. So they have an opportunity to use bitcoin and make that as their currency,” he said in a Bloomberg Television interview with Haidi Lun and Rishaad Salamat from Jakarta. “Suddenly, we’ve got this major opportunity that’s not going to be around for those countries that already have strong infrastructure.” Draper is one of the most high-profile U.S. venture capitalists to begin turning their attention from China to Indonesia, the biggest country in Southeast Asia. Earlier this week he said he wasn’t going to make new investments in China because it was difficult to get money out amid capital controls.
14 Business Daily Friday, June 9 2017
International In Brief Olympics
Olympics Games rights holder Discovery backs Paris 2024 bid over LA Olympic Games rights holder Discovery Communications, a U.S. firm, threw its weight behind Paris’ bid for the 2024 summer Games on Thursday, picking the French capital over Los Angeles. The two cities are the only ones left in the bidding race after four others withdrew over financial concerns. “We are excited to show our support for the Paris bid and their quest to bring the 2024 Olympic Games back to Europe,” Discovery Communications President and CEO David Zaslav said in a statement. The U.S. firm has secured the rights across Europe for the Olympic Games from 2018-2024. Paris looks to have the edge over Los Angeles to land the 2024 edition, with LA 2024 bid chairman Casey Wasserman hinting on Wednesday that the U.S. city would accept a 2028 Games. Outlook
ECB’s Draghi drops reference to “downside risks” to economy European Central Bank President Mario Draghi dropped a long-standing reference to “downside risks” to the euro zone’s economic outlook from his policy message on Thursday, saying instead that risks are now “broadly balanced”. He added that inflation remains subdued. The widely expected change in the wording reflects an acceleration of the bloc’s economic recovery in recent months and is likely to be taken as a sign that the ECB is preparing for an eventual withdrawal of its aggressive stimulus measures. Earlier, the ECB dropped reference to possibly lower interest rates when it pledged to keep at their present level for an extended period of time and well past the horizon of its asset purchases.
Advertising
European broadcasters said to start video advertising alliance Stefan Nicola
T
hree major European broadcasters are in advanced talks to start a digital video-advertising company to counter online players such as Facebook Inc. and Google that have lured away clients from traditional TV, according to people familiar with the matter. The venture between ProSiebenSat.1 Media SE of Germany, Television Francaise 1 SA in France and Italy’s Mediaset SpA would sell access to pan-European ad campaigns that would appear on the Internet and on web-connected TVs, said the people, who asked not to be identified discussing the venture before it was announced. ProSiebenSat.1 and Mediaset
declined to comment. TF1 didn’t respond to requests for comment. The new venture, to be based in London, is the latest sign that Europe’s broadcasters are increasingly willing to join forces to gain scale as they compete for ad clients with global tech firms such as Alphabet Inc.’s Google and Facebook, and battle online rivals like Netflix Inc. and Amazon.com Inc. for viewers. In January, the three broadcasters formed an alliance to jointly push their online video efforts. With the new venture, the broadcasters aim to give their clients an alternative to the highly focused advertising offered by U.S. technology companies that is based on web-surfing habits, the people said. The campaigns will appear on outlets ranging from TV channels’ catch-up
platforms to media websites. The broadcasters will ensure that clients’ video ads won’t be posted next to inappropriate content as happened in March, when major advertisers across Europe and Asia appeared alongside extremist videos on YouTube. The technology platform will be open, to encourage other European media companies to get involved in a bid to gain more scale, the people said. The advertising venture builds on a January alliance between ProSiebenSat.1, TF1 and Mediaset. Their prime asset, Studio71, racks up about 6 billion video views a month with online video stars ranging from Hollywood big shots such as Dwayne “The Rock” Johnson to LeFloid, a tattooed German who became the first YouTuber to interview Chancellor Angela Merkel. Bloomberg
M&A
TUI, Etihad abandon plans to form new leisure airline Etihad said that it was not able to reach agreement on the final nature of the joint venture despite “many months of negotiations” Abu Dhabi-based Etihad Airways said on Thursday it had pulled out of talks with TUI Group , Europe’s largest tour operator, aimed at creating a new joint venture holiday airline. Under plans outlined last year TUI’s own airline TUIfly was to be merged with Air Berlin’s leisure airline Niki once Niki was bought out of Air Berlin by Etihad. The Gulf airline has a near 30 per cent stake in Etihad. Etihad said on Thursday that it was not able to reach agreement on the
final nature of the joint venture despite “many months of negotiations”, while TUI said Niki was “no longer available” for a deal. “A strong European leisure airline continues to make great strategic sense. After all, the aviation sector is characterised by overcapacity in Germany,” TUI’s executive board member Sebastian Ebel said in a statement. “However, Niki is no longer available for a joint venture. We will push
the repositioning of TUIfly further ahead in order to develop long-term prospects for the airline and its employees,” Ebel added. TUI said it remained open for partnerships and joint ventures. As part of the deal Etihad was planning to buy Niki from Air Berlin before combining the business with TUIfly. Air Berlin had already received 300 million euros (US$337 million) from Etihad for Niki, according to Air Berlin’s annual report. But Etihad said in the statement the leisure operations of Air Berlin group would now continue to operate as a separate business unit, under the Niki brand. “Further details of this structure will be announced in due course by Air Berlin,” Etihad said. Air Berlin did not immediately respond to requests for comment. Reuters
Banking
ECB’s Constancio says bank run triggered Banco Popular rescue The decision to orchestrate a rescue of Spain’s Banco Popular this week was triggered by a run on the bank, European Central Bank Vice President Vitor Constancio said on Thursday. “The reasons that triggered that decision were related to the liquidity problems. There was a bank run. It was not a matter of assessing the developments of solvency as such, but the liquidity issue,” Constancio told a press conference following the ECB’s regular policy meeting. “Our role as ECB was just the declaration that the bank for liquidity reasons was failing or likely to fail,” he said. The ECB, the euro zone’s top banking supervisor, stepped in to avert a collapse of Banco Popular, orchestrating a last-minute rescue on Wednesday by bigger local rival Santander. A final decision to sell Popular was made early on Wednesday by the Single Resolution Board (SRB), the agency set up by the EU to wind down stricken banks.
Arrest
Former HSBC trader in forex probe arrested by UK police The inquiry led to four banks pleading guilty to conspiring to manipulate currency prices in the United States British authorities have arrested Stuart Scott, a former senior HSBC executive accused of participating in a fraudulent scheme involving a $3.5 billion currency transaction, according to a U.S. court filing seen by Reuters on Thursday. Scott was arrested in Britain on Monday following an extradition request by the U.S. Department of Justice, the document filed with the court by acting U.S. Attorney Bridget M. Rohde said. Scott, HSBC’s former head of cash trading for Europe, the Middle East and Africa, was charged in July last year along with Mark Johnson, a British citizen who was HSBC’s global head of foreign exchange cash trading and who was arrested in New York.
“Our client strongly denies the allegations. Given there are ongoing proceedings it would be inappropriate to comment further at this time,” Anne Davies, a lawyer at Gunnercooke who is representing Scott, said. HSBC said Scott had left the firm in 2014. “We are unable to comment further on personnel issues or matters which are the subject of ongoing legal proceedings,” a spokeswoman for the bank said in an emailed statement. Scott and Johnson are believed to be the first people to face U.S. criminal charges arising from an investigation of foreign-exchange rigging at banks. The inquiry led to four banks pleading guilty to conspiring to manipulate
currency prices in the United States. HSBC was not among those banks, but in 2014 agreed to pay $618 million to resolve related probes by U.S. and British regulators. Johnson, a British citizen who at the time of his arrest in 2016 was HSBC’s global head of foreign exchange cash trading, has pleaded not guilty to a charge of wire fraud and conspiracy last August. Prosecutors said Johnson and Scott in 2011 misused information provided by a client that hired HSBC to convert $3.5 billion to British pounds in connection with a planned sale of the client’s foreign subsidiaries. They then used their insider knowledge to trade ahead of the transaction, causing a spike in the price of the currency that hurt HSBC’s client, prosecutors said. London police could not immediately confirm Scott’s arrest. Bloomberg News earlier reported Scott’s arrest. Reuters
Business Daily Friday, June 9 2017 15
Opinion Business Wires
The Korea Herald In their first official meeting with the new government’s policy advisory panel, the Korean Chamber of Commerce and Industries on Thursday said it appears to be premature to talk about President Moon Jae-in’s labour policies, stressing that both sides need to seek “realistic measures.” “In a big picture, I think it is a bit early to carry out (Moon’s labour policies),” said KCCI Chairman Park Yong-maan to President Moon’s de facto transition team. “We need to find feasible measures by discussing the matter together and draw detailed plans on what would happen (after implementing the new measures).” Though Park didn’t pinpoint a specific labour policy, his comments were widely seen as delivering South Korean businesses’ concerns over the new leader’s initiative to turn irregular jobs into regular ones in the public sector, urging for the conglomerates to follow suit.
The Phnom Penh Post Dollarisation in Cambodia’s economy remains very high, leading to increased local costs and reducing the appeal of the Kingdom’s exports, Chea Serey, director general of the National Bank of Cambodia (NBC), said at a business conference in Phnom Penh. The majority of transactions in Cambodia, between 82 to 84 per cent of them, are still done in dollars, according to Serey. She explained the use of dollars made transacting in the local currency more expensive, effectively penalising those who used riel. The high level of dollarisation continues to have a negative impact on the country’s major economic sectors, particularly exports and tourism, she said. As the dollar grows in value, exporting goods from Cambodia becomes more expensive relative to the exports of other export-driven economies.
Bangkok Post Thailand’s consumer confidence in May declined for the first time in six months, due to a bomb blast at a Bangkok hospital, low commodity prices and slow economic recovery, a private survey showed on Thursday. The index of the University of the Thai Chamber of Commerce slipped to 76.0 last month from 77.0 in April. Last month’s bomb blast wounded 24 people, on the third anniversary of a 2014 military coup. Consumer spending is expected to improve in the second half of the year if the government speeds up spending and investment projects, the university said in a statement. The Bank of Thailand has forecast economic growth of 3.4 per cent this year, after 3.2 per cent last year.
The Star The ringgit may advance 4 per cent as the latest measures by Bank Negara Malaysia reduce the risks of holding the currency and the economy improves, a member of the central bank’s financial markets committee said. The currency could reach 4.1 to the dollar in the second half, said Datuk Lee Kok Kwan, who is also a director at lender CIMB Group Holdings Bhd. The fair value of the ringgit should be between 3.8 and 4.0, when benchmarked against regional and commodity currencies, said Lee, who accurately predicted in January that the currency will rebound from a 19-year low.
A better investment framework for Africa
A
frica’ s enormous economic potential is not news. But, until now, policymakers around the world have not successfully defined the political and economic steps that must be taken to enable Africa to realize this potential fully. That is why the German G20 presidency has launched its G20 Africa Partnership initiative. At the core of this effort to intensify cooperation with Africa lies the G20 Compact with Africa (CWA). The CWA offers interested African countries the opportunity to improve conditions for private investment, including in infrastructure. The CWA’s structure is straightforward: African countries, together with their bilateral partners and international financial organizations with proven expertise on Africa (such as the African Development Bank, the World Bank Group, and the International Monetary Fund), will jointly develop, coordinate, and implement tailor-made measures. The main aim is to lower the level of risk for private investments, by improving economic and financial conditions and strengthening institutions. Over time, the resulting increase in investment will boost growth and productivity, create jobs, and raise living standards, as envisioned in the African Union’s own Agenda 2063 program. The CWA stands for a new approach in international d ev e l o p m e n t p o l i c y . O f course, we are not reinventing the wheel. But the mode of cooperation and coordination among the many bilateral and multilateral players, as well as the commitment of the African countries, is something new. We view the CWA as a longterm, demand-driven process. It is open to all African countries that are interested in improving their investment environment on a sustainable basis. But, most important, the decision-makers are the African countries themselves. They will determine what they want to do to improve conditions for private investment, with whom they want to cooperate, and in what form. Only if the African countries “own” the initiative will it be a success. So far, five African countries – Côte d’Ivoire, Morocco, Rwanda, Senegal, and Tunisia – have committed to full participation in the CWA. Ghana and Ethiopia will join this month. CWA countries, the international financial organizations, and bilateral partners are working closely together on the details of the
“
Wolfgang Schäuble Germany’s Federal Minister of Finance
country-specific compacts. At the G20 meeting in Baden-Baden in March, some members – and also non-G20 countries – indicated that they would like to become bilateral partners. The German government will also contribute via the bilateral framework – called a “Marshall Plan with Africa” – developed by our Federal Ministry for Economic Development and Cooperation. Our main job, however, is to bring private investors and African countries together. With the upcoming G20 Africa Partnership Conference in Berlin on June 12-13, we will provide a platform for these African countries to reach out to investors in order to enhance the continent’s engagement with the private sector. CWA countries will present the key elements of their investment compacts in a roundtable with investors. They will also outline the key industries and infrastructure projects for which they are seeking private funds. After the Berlin meeting, the implementation phase of the CWA initiative will start. The country teams will further specify their compact measures and consider the milestones for their implementation. At this point, dialogue with investors will be particularly significant, because such conversations will help African countries to establish which measures and instruments are crucial for engagement with the private sector. To be successful, this initiative cannot focus on short-term results. It needs to continue beyond Germany’s G20 presidency in 2017/2018 and to be supported by the G20 over the longer term. Germany, of course, will continue to take responsibility for the CWA’s implementation. The G20 will be informed on a regular basis about how the investment compacts develop. Most important, by sending a signal to other African countries, progress in the participating countries will determine whether the CWA becomes a success for all of Africa. If all parties involved – African countries, international organizations, bilateral partners, and, not least, investors – collaborate closely, the CWA has the capacity to promote sustainable, robust, and inclusive economic growth throughout the continent. Project Syndicate
To be successful, this initiative cannot focus on short-term results. It needs to continue beyond Germany’s G20 presidency in 2017/2018 and to be supported by the G20 over the longer term
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16 Business Daily Friday, June 9 2017
Closing Smuggling Gunvor Singapore executive charged by Chinese prosecutors in oil probe -document
Charged with smuggling 1.3 million tonnes of fuel and evading nearly RMB378 million in taxes
Guangdong province, said in the document dated June 2 and seen by Reuters. Gunvor confirmed in an email an employee had been charged by Chinese prosecutors have charged an employee of Swiss commodity Chinese authorities in a customs dispute between China and the trader Gunvor Group who has been held for a year for allegedly Philippines. It did not identify the person, but said it continues to do smuggling fuel and evading taxes on sales from the Philippines, business in China. according to a legal document viewed by Reuters. “Gunvor itself has not been charged,” it said. “The company views this In May last year, Chinese authorities seized a tanker and detained situation as a purely political matter.” several people as part of a probe into suspected tax evasion on It said it was not liable to pay duties because it was not the importer of imported oil. A Gunvor senior executive based out of Singapore was one of the people detained, a source briefed on the matter told Reuters. record into China. “Given that Gunvor is not the importer, legally the charges don’t make Yin Dikun, managing director of Gunvor Singapore, was charged with smuggling 1.3 million tonnes of fuel and evading nearly RMB378 million sense,” the company said. (US$55.7 million) of taxes, prosecutors in Guangzhou, the capital city of The prosecutors did not respond to a request for comment. Reuters
Taxation
EU bill foresees sanctions for accountants, banks helping dodge tax The draft law dictates “effective, proportionate and dissuasive penalties” for non-compliance, but leaves EU states free to decide sanctions or fines at national level Francesco Guarascio
T
ax advisers in the European Union will be penalised for helping companies to set up schemes to cut their tax bills excessively by shifting profits to low-tax countries, under a draft law seen by Reuters.
Key Points
avoidance by wealthy individuals and big firms through carefully constructed plans. The draft law, expected to be published in June, dictates “effective, proportionate and dissuasive penalties” for non-compliance, but leaves EU states free to decide sanctions or fines at national level. Tax advisers will have to disclose cross-border tax schemes deemed to be too “aggressive” to tax authorities
in the countries where they operate. The information should then be “automatically” shared among EU countries’ administrations. This requirement for an early warning is intended to discourage the transfer of corporate profits taxable in one EU state to other countries or jurisdictions where they would be taxed at much lower rates. If there is no intermediary, or the tax adviser is located outside the EU, the obligation of disclosure would fall on the taxpayer using the arrangement. The draft law does not define “aggressive tax planning”, because any definition would risk being overtaken by ever-evolving avoidance schemes. But a list of red flags, or “hallmarks”,
will be drafted to spot arrangements that present “a strong indication of tax avoidance or abuse”, the draft law says. The list will be regularly updated by the European Commission. The Commission’s legislative proposal will need the approval of the European Parliament and all EU states to become law. Some EU states have shown little appetite to move fast in the fight against tax avoidance, saying it could hamper the competitiveness of European companies. Malta, which holds the rotating presidency of the EU, proposed to slow down the pace of tax reform in a document circulated among finance ministers in April. Reuters
EU states to determine level of “effective” penalties Draft law to be published by the end of June Accounting firms, banks to be forced to disclose information The measure, prepared by the EU executive, the European Commission, and still subject to changes, would force accounting firms such as PricewaterhouseCoopers(PwC), KPMG, Ernst & Young and Deloitte, banks and other tax advisers to inform authorities about “potentially aggressive tax planning arrangements” set up for their clients. The move is part of a set of measures adopted by the European Union after last year’s Panama Papers and other revelations of widespread tax
Forecast
Alibaba Sales Forecast Tops All Estimates as New Forays Pay Off Alibaba is spending billions of dollars on new businesses in part to counter Tencent’s increasing dominance of online social media and entertainment through WeChat Lulu Yilun Chen
Alibaba Group Holding Ltd. forecast sales growth that topped every analyst’s estimate, defying expectations that growth must slow by dint of a decelerating economy and its own sheer scale. China’s largest e-commerce company forecast 45 to 49 per cent revenue growth in the year ending March, sustaining a near-unbroken run of 40 per cent-plus annual rises and underscoring how investments into businesses beyond its bread-and-butter of online shopping are paying off. The company’s
German shares rose as much as 5.2 per cent. A l i baba a n d T e n c e n t Holdings Ltd. -- which dominate online shopping and social media, respectively -- have ventured deeper into new areas from cloud computing services to streaming music and video as the country’s economy slows. The online shopping giant founded by billionaire Jack Ma is capturing more digital advertising spending by incorporating social elements such as video in its shopping sites. To reflect an increasingly diverse customer base, Alibaba will start reporting “active consumers”
as opposed to just buyers, Chief Financial Officer Maggie Wu said during the company’s annual investor-day conference Thursday. It’ll begin to disclose “customer management revenue” instead of just online marketing, to reflect a broader base of advertising platforms. “Its market valuation has fallen behind Tencent’s recently, so the forecast could inject some confidence,” said Ray Zhao, an analyst at Guotai Junan Securities Co. “This will be good news for its share price, which could rise 6 to 7 per cent based on this forecast,” he added without specifying a timeframe. The forecast compares with the 35 per cent average of estimates and surpassed the most bullish projection of the 43 analysts tracked by Bloomberg. Alibaba is spending billions of dollars on new
businesses in part to counter Tencent’s increasing dominance of online social media and entertainment through WeChat, a messaging and networking powerhouse. Considered a barometer of Chinese consumer sentiment, Alibaba has also expanded abroad since buying control of Lazada Group SA to establish a foothold in Southeast Asia, potentially setting up a clash with Amazon.com Inc. Its AliExpress site remains for now the main window through which it targets foreign shoppers. While Alibaba has outperformed expectations, investors remain concerned about a deceleration in China’s economy and similar efforts by Tencent to capture digital ad spending and muscle in on its turf. In response, Alibaba moved into untapped rural markets and explored new sources of
income. Most of those new businesses are years away from contributing to the bottom line. On Thursday, Wu said Alibaba will continue to sacrifice a small slice of profitability to help bankroll its forays. Cloud computing services in particular now account for about 5 per cent of overall sales. A service akin to Amazon’s AWS that provides computing power over the Internet, it’s become one of the company’s fastest-growing businesses and underpins other pieces of the Alibaba empire such as streaming and e-commerce. The priority remains expansion for now, she added. “Profitability is still not the priority for our cloud business,” Wu told investors. Alibaba wants to “quickly expand cloud leadership in coming quarters.” Bloomberg