Business Daily #1410 October 26, 2017

I SSN 2226-8294

Thursday, October 26 2017 Year VI Nr. 1410 MOP 6.00 Publisher Paulo A. Azevedo Closing Editor OSCAR guijarro

www.macaubusiness.com

That was yesterday!

2 Business Daily Thursday, October 26 2017

Macau

Singapore's monetary head says city won’t regulate cryptocurrency Fintech Page 12 Thursday, October 26 2017 Year VI Nr. 1410 MOP 6.00 Publisher Paulo A. Azevedo Closing Editor Kelsey Wilhelm Labour

Road safety

Non-resident workers data suggests stable market Page 4

Over 11,000 traffic accidents in 2017 in MSAR Page 6

www.macaubusiness.com

Trade

Refurbish

Macau European Chamber of Commerce changes address Page 7

Hotel Central renovation delayed again Page 6

WTTC upbeat on the city Tourism

A report by the World Travel & Tourism Council (WTTC) on tourism’s impact upon the Asia Pacific region has been published. Suggesting Macau needs to diversify its tourism offer to keep growing strongly.

The report also forecasts growth of 8.3 pct in the coming decade - if things are done properly. Page 5

Look and learn

A security expert analyses Typhoon Hato’s destructive pass.

Pronouncing preparedness is the citizen’s best friend. And identifying risks that can disrupt businesses – especially those of SMEs – and the lives of individuals.

Speaking the lingo

Education Gov’t announces plan to grant citizens passing official language exams a monetary treat. Talent Development Committee says initiative encourages locals to have their skills certified in Mandarin, Hanyu, Portuguese and English. Page 7

New leadership line-up

Typhoon Page 8

HK Hang Seng Index October 25, 2017

28,302.89 +147.92 (+0.53%) Worst Performers

Want Want China Holdings

+3.47%

China Overseas Land &

+2.35%

CK Asset Holdings Ltd

-0.93%

Link REIT

-0.38%

WH Group Ltd

+3.17%

China Shenhua Energy Co

+1.83%

AAC Technologies Holdings

-0.80%

Henderson Land Develop-

-0.38%

China Resources Power

+2.83%

China Mengniu Dairy Co Ltd

+1.68%

Hang Lung Properties

-0.65%

Hong Kong & China Gas Co

-0.29%

CNOOC Ltd

+2.52%

Tencent Holdings Ltd

+1.32%

New World Development Co

-0.51%

Hengan International Group

-0.27%

Geely Automobile Holdings

+2.39%

Ping An Insurance Group Co

+1.32%

CK Hutchison Holdings

-0.40%

China Merchants Port Hold-

-0.26%

22° 26° 21° 27° 21° 27° 20° 26° 20° 25° Today

Source: Bloomberg

Best Performers

THU

FRI

I SSN 2226-8294

SAT

SUN

Source: AccuWeather

Politburo The Communist Party broke with recent precedent. By introducing a new leadership line-up without a clear successor to President Xi Jinping. The make-up of the committee appeared to be a compromise. To include a broad range of voices from party elites, with speculation Xi could stay on in some capacity beyond 2022.Page 10

4 Business Daily Thursday, October 26 2017

Macau

Labour

Number of non-resident workers stable in September Although the number of non-resident workers coming from Hong Kong recorded a drastic drop year-on-year Sheyla Zandonai sheyla.zandonai@macaubusiness.com

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total of 176,666 non-resident workers were employed in the Macau SAR as at the end of September 2017, posting a marginal decrease from 176,889 recorded in August or a 0.12 per cent decrease, according to official data released by the Labour Affairs Bureau (DSAL) yesterday.

As of September, the city’s hotels and restaurants continued to be the largest employers of foreign labour, with 50,126 employees, making up 28.37 per cent

of the total non-resident workforce.

The number of workers employed in the hotels and restaurants sector experienced a slight increase of 10 workers month-on-month and an increase of 1.35 per cent, or 680 more workers than in September 2016.

The construction industry was the second largest employer, with a total of 30,656 non-resident workers employed by the construction industry, a drop of 22.08 per cent when compared to the 39,347 workers registered in the same month last year.

Of the total number of non-resident construction

workers hired, 834 were employed directly by gaming operators, still according to information provided by DSAL on non-resident workers by activity.

Regarding the culture, entertainment, gaming and other activities sector, the number of workers employed as at the end of September was 13,438, a decline of 90 workers year-on-year and 127 workers month-on-month.

Other non-resident workers were primarily employed by the wholesale and retail industry (20,570), and real estate, industrial and commercial establishments (19,384).

The city accommodated some 26,250 domestic workers as at the end of September, an increase of 6.5 per cent from 24,533 a year before.

Sourcing from the region

Mainland China continued to be the main supplier of immigrant workers for the MSAR in the month, in which the number of workers totalled 111,619, accounting for 63.1 per cent of the total foreign workforce.

When compared to last year’s data, the number of Chinese workers fell 3.93 per cent from 116,191 workers.

The other two major origins

of the city’s non-resident workers were the Philippines and Vietnam, which saw 27,878 and 14,734 of their nationals working in the city, down 6.8 per cent and 0.38 per cent year-onyear, respectively.

Overall, the number of workers coming from Hong Kong amounted to 5,189, down 26.86 per cent from 6,583 a year before.

The other countries and regions in the top-ten list of non-resident worker providers to the MSAR in September 2017 are all from Asia, and include Indonesia, Nepal, Thailand, Malaysia, Taiwan and Myanmar.

Labour

Union and employers disagree on Labour Relations Law Cecilia U cecilia.u@macaubusinessdaily.com

Paternal leave should be at least five days and maternity leave at least 90 days, advocated Ian Man Chit, Deputy Director of the Rights Committee of the Macau Federation of Trade Unions (FOAM) while attending a radio programme yesterday hosted by local broadcaster TDM Chinese Radio.

Ian perceived that employees have less bargaining power with their employers in terms of rescheduling mandatory holidays to other public holidays.

According to one of the suggested seven revisions, workers could reach an agreement with their employers on rescheduling

three of the ten mandatory holidays to other non-mandatory holidays.

By contrast, Victor Lei Kuok Fai, Vice-president of the Federal General Commercial Association of Macau Small and Medium Enterprises, said there are no suggestions from the medical segment to add more days for maternity leave, adding that employers always accept longer reasonable leave for female workers who have just g5ven birth if requested.

In terms of the suggestions for part-time workers, the labour representative commented that the revision of the law would downgrade the benefits enjoyed by part-timers.

The new suggestions for

part-timers propose the cancellation of no-paid maternity and sick leave, as well as no probation period, annual leave, notice in advance, compensation for terminating contracts, and no contribution to social security by employers.

Lei said it is unreasonable for part-timers to enjoy benefits that are for fulltime workers, while adding that proposed regulations can be executed specifically for leading industries if the government intends to impose the suggested regulations upon prominent corporations.

Ng Wai Han, Deputy Director of the Labour Affairs Bureau (DSAL), said during the radio programme that a special law pertinent to

part-time jobs is necessary given that workers are often placed in weaker positions because of the different interpretations of part-time jobs made by different industries.

Meanwhile, talking after

the programme, Wong Chi Hong, Director of DSAL, revealed that a public consultation on the universal minimum wage would be performed on November 13, reported TDM Chinese Radio.

in the revenue generated from sales of capital assets at MOP11 million, down 97.9 per cent.

Meanwhile, the city had spent MOP49.94 billion during the nine-month period, posting a decline of 4.9 per cent when compared to MOP52.54 billion spent a year ago.

The budget for expenditure

forthewholeyearisMOP85.30 billion, with the execution rate 58.6 per cent.

Th e g o v e r n m e n t ha d placed some MOP8.13 billion for PIDDA investment, which doubled year-onyear. PIDDA investment involves investment in public infrastructure projects in the city such as public housing projects.

Economy

Fiscal surplus rockets 61.9 pct y-o-y Macau’s fiscal surplus recorded MOP34.95 billion (US$4.35 billion) for the months of January to September this year, posting year-on-year growth of 61.9 per cent, according to data published by the Financial Services Bureau (DSF).

The amount of surplus for the first nine months represents over six times the

targeted fiscal surplus for the entire year, of MOP5.57 billion.

The city posted revenue of MOP84.89 billion from January to September, up 14.5 per cent when compared to MOP74.13 billion generated during the same period last year.

In particular, revenue earned from gaming taxes

registered a year-on-year increase of 17.5 per cent to MOP68.64 billion. The execution rate of the amount earned stood at 95.5 per cent, with the authorised budget for revenue from gaming taxes standing at MOP71.86 billion for the year 2017.

Within the revenue segment, the city sees the biggest year-on-year drop

Business Daily Thursday, October 26 2017 5

Macau

Tourism

Diversify and conquer If more diversification in the tourism offer is seen in the MSAR in future the percentage of GDP created by travel and tourism in the city could reach US$27.2 billion by 2026 Nelson Moura cnelson.moura@macaubusinessdaily.com

T

he tourism and travel sector could represent 37.6 per cent of Macau’s total gross domestic product (GDP) in 2026, amounting to around US$27.2 billion (MOP218.65 million) according to a study conducted by the World Travel & Tourism Council on the sector’s impact on Asia Pacific.

The report indicates that with travel and tourism representing US$12.2 billion or 27.3 per cent of Macau’s GDP in 2016, the city could see an average increase per year of 8.3 per cent in the following 10 years.

The amount of people employed by the travel and tourism sector was also expected to reach some 139,500

individuals or 32.7 per cent of the local workforce by 2026.

The WTTC report collected economic data on travel and tourism from over 30 countries in the Asia Pacific area, with the sector said to contribute US$714 billion to the region’s economy - 2.8 per cent of its total GDP - and with 67 million jobs directly created by the companies and organisations in the sector.

Two fast runners

The study states that between 2006 and 2016, Beijing and Macau were the two fastest growing cities in the Asia Pacific region, with both posting average GDP growth of 10.2 per cent.

‘This has been driven by very strong demand over this period as large numbers of households

move into the middle class and are able to afford travel,’ the report indicated.

The high reliance upon the Chinese market as a source of visitors, however, has led to a fall in visitor numbers with ‘government curbs on excessive expenses and gift-giving in business’ causing a fall in arrivals in 2015 and a larger drop in average spending.

‘The share of GDP directly generated by Travel & Tourism fell from a peak of 38 per cent in 2013 to 27.3 per cent in 2016,’ the report indicates.

Real potential

However, the report considered that encouraging signs were registered this year with growth recorded in visitation and overnight stays and,

‘more importantly’, rising spending.

In the first nine months of this year Macau registered 23.83 million visitor arrivals, an increase of 4.2 per cent year-on-year from the same period last year, with overnight visitors growing by 10.8 per cent yearon-year to 12.63 million, recent data revealed.

Meanwhile, visitors from Mainland China and Hong Kong represented 87 per cent of total visitors in the first nine months of the year.

Despite the increase in visitors, the WTTC report considered that with average hotel room rates ‘remaining low’ a rapid rebound in GDP contribution was ‘unlikely in the nearterm’ with some diversification in tourism offers in the city necessary to allow continued growth. advertisement

6 Business Daily Thursday, October 26 2017

Macau Opinion

Ashley Sutherland-Winch* Safe data?

I think we can all agree that all data is safe . . . until it’s hacked. I’m sure that Yahoo, Dropbox, Equifax and Target all thought their infrastructure was safe . . . until they experienced epic hacks in 2016 and 2017.

Earlier this week, the Alibaba Group stated that ‘the data stored in the centre will be owned by the Macau Government and be under local legislation. Alibaba Cloud is responsible for the technical construction of the smart technology platform, but we do not have access to the data or individual Macau resident information’.

Back in August, the Alibaba Group signed an agreement with local authorities to turn Macau into a Smart City in two phases by 2021 - but after concerns by some local government parties, it was confirmed that data generated by Macau would not be made publicly available to Greater China.

Smart City technology can be really exciting - including smart transportation, smart tourism, smart healthcare and smart city governance, as well as human resources talent - but the data needed to generate the intelligence can be incredibly revealing.

People share sensitive information in emails on the Internet using websites like Dropbox and Yahoo and feel completely safe when they read the terms and agreements. I’m sure Mark Zuckerberg, the founder of Facebook, felt safe creating a LinkedIn account, but when his password was hacked last year along with thousands of other people it became a worldwide notice that everyone should be more aware of what information they enter online.

No-one wants their information hacked but in reality do we really review all websites’ terms and agreements that carefully?

Everyone faces the risk that data can be hacked anytime; but at some point, we must analyse what terms we agree to disclose versus what data improves our lives.

Where is the line where we decide if Smart City data hacks are good or bad? If Bus 25 returns to Hac Sa Beach because data shows that there is a major demand or wait time for this transport is astronomical, many could be pleased. If what we search for while on the bus is hacked, this in turn could be very scary.

Regardless, it is time that every person decide what personal data is truly important and what piece of information should never be placed online. We are all at risk and if 2016 and 2017 have taught us one thing it is that no-one’s data is safe. *Marketing and Public Relations Consultant and frequent contributor to this newspaper.

Traffic

Dangerous streets Police authorities registered 11,087 traffic accidents in the first nine months of the year, with six fatalities Nelson Moura nelson.moura@macaubusinessdaily.com

The Public Security Police Force (PSP) said yesterday it had registered 11,087 traffic accidents in the first nine months of this year at an average of 40 a day.

The police authorities stated that the number of accidents during this period was similar to those in the same period of last year, adding that around 13,000 accidents were registered in the whole year of 2016 and around 15,000 in 2015.

A total of six deaths and around

3,000 injuries were caused by accidents between January and September of this year, with nine deaths registered in the same period last year.

“Of course, the number of accidents is still not ideal, with the number of cars also leading to a high number of accidents,” Transport Bureau Deputy Director Ching Ngoc Vai said yesterday.

The most recent data from the Statistics and Census Service (DSEC) shows that as of August of this year there were 242,756 licensed vehicles in Macau, down 2.5 per cent

year-on-year.

The number of infractions caused by people driving while speaking on mobile phones increased 19.4 per cent yearly to 2,768 cases in the first nine months of this year, with street crossing infractions rising 158 per cent to 483 cases.

“One of the main problems is drivers not keeping a safe distance between vehicles. We want to raise awareness and ask drivers to keep a safe distance and pay attention to surrounding circumstances such as traffic lights and speed signs,” the PSP Traffic Department Commissioner stated.

Urban renewal

Renovation of Hotel Central dogged by delays DSSOPT told Business Daily that the owner of the property has missed the deadline for commencing renovation work on the iconic building Sheyla Zandonai sheyla.zandonai@macaubusiness.com

The owner of Hotel Central has missed the deadline for commencing renovation work on the property, according to information provided to Business Daily by the Land, Public Works, and Transport Bureau (DSSOPT).

DSSOPT explained that after it issued a repair and maintenance work permit to the owner of the project – which permits the beginning of repair works – the hotel owner ‘did not submit any request to start the work’ proper.

The lack of action on the part of Hotel Central’s proprietor resulted in the expiration of the permit, according to information provided by DSSOPT. On the other hand, the Bureau added that the owner has ‘recently submitted … a draft for requesting modification to the property,’ which the authorities claim will be handled accordingly.

Previously, Macao Government Tourism Office (MGTO) informed Business

Daily that the hotel’s status remained as ‘suspension of business.’

In early October, the tourism agency outlined that it had received the ‘application for change of facilities’ from the property owner, while adding that it was ‘waiting for the applicant to follow up with the amendments required to be made on its application,’ without however clarifying what these amendments consisted of upon further enquiries from us.

The 89-year old building located on Avenida Almeida Ribeiro was bought by a consortium in early 2016, with the new owners announcing they were planning to renovate the facilities and re-open the location as a hotel in time for the celebrations of the 20th anniversary of the Macau SAR, in 2019.

The property is considered one of the architectural cornerstones of the complexes and sites in that area, in the vicinity of Senado Square, according to the Cultural Heritage Protection Law.

Business Daily Thursday, October 26 2017 7

Macau

Trade

MECC integrating its business vocation The Macau European Chamber of Commerce has moved to a new office, seeking more co-operation across nations by working physically closer to them Sheyla Zandonai sheyla.zandonai@macaubusiness.com

P

otential for expanding the offer of European-made products in the Macau SAR is matched with will from the Macau European Chamber of Commerce (MECC) to improve co-ordination with several chambers of commerce, according to Kevin Thomson, President of the MECC, and Ambrose So, its Honorary President.

Speaking to Business Daily during the event that marked the launching of the new MECC’s permanent office yesterday in NAPE, Mr. Thomson claimed that in addition to generating local demand for services such as translation, there are other “high quality” products from Europe, such as Ireland, and potential for the creative industries to become “increasingly significant” within the MSAR Government mandate of economic diversification.

“This year, we’ve seen an 11.3 per

cent increase in EU imports into Macau. So I think even more countries could be encouraged, once we actually do all work in promoting Macau,” claimed MECC’s incumbent President.

The new MECC facilities have been provided by the Macao Trade and Investment Promotion Institute (IPIM).

According to Mr. So, the fact that the MECC is now “conveniently lo-

MECC

The Macau European Chamber of Commerce (MECC) was founded in 2013 with the presiding presence of José Manuel Durão Barroso, the then President of the European Commission (2004-2014).

Its members are drawn from the six founding European chambers of commerce in Macau; namely, France, Germany, Ireland, Portugal, Romania, and the United Kingdom.

Kevin Thomson formally took over from Pedro Cardoso, CEO of Banco Nacional Ultramarino (BNU), as MECC President on Monday.

Mr. So, in turn, explained to Business Daily that “with the help of these chambers, we may be open to having more choices and help the various companies that are interested in getting involved in the economic development of Macau.”

cated together with all other national chambers,” will enable the chamber of chambers to have “a more effective communication with all the other national chambers,” including the chambers of Portuguese-speaking countries.

Streamlining red tape

As for current initiatives for facilitating business, Thomson suggested that the MECC channel some of the knowledge and practices in use in the European Chamber of Commerce in Hong Kong, such as the “Blue Card directive.”

“We can actually act upon it, we can tailor-make them [initiatives] for Macau, but that’s for the future, that won’t be done overnight,” he told us.

Mr. So suggested that since the MSAR “has become very international after the liberalisation of gaming,” and considering the development of the city as “a world centre of tourism and leisure,” momentum has been built to “generate a lot of business opportunities for companies from Portuguese-speaking countries and Europe.”

Otherwise, said Mr. Thomson, “we have a small, but integrated team here, and it is very much a chamber of chambers, working across Macau, all the European chambers, and we are constituted.”

Continued education

MSAR to reward certified language skills The governmenmt is handing out cash as a reward for citizens who take language examinations certified by internationally recognised institutions Cecilia U cecilia.u@macaubusinessdaily.com

M

acau citizens could be rewarded with at least MOP1,000 for getting certified by internationally recognised language institutions under the latest encouragement scheme, the Talent Development Committee (CDT) announced yesterday.

Acting as the first attempt to encourage citizens to obtain recognised certificates and qualifications, the scheme initiates language learning, which covers certification in Mandarin, Hanyu, Portuguese and English.

Interested citizens may take Putonghua Shuiping Ceshi (PSC) for Mandarin tests offered by the Chinese State Language and Writing Commission, the Chinese State Education Commission and the Chinese Ministry of Radio Film and Television, with the criteria to obtain the reward earning a grade B or better.

For Hanyu learners, the scheme recognises the Hanyu Shuiping

Kaoshi (HSK) examination offered by the Confucius Institute Headquarters (Hanban), with the criteria of Level Four or above.

Portuguese learners, meanwhile, can take the test provided by the Centre for Evaluation of Portuguese as a Foreign Language (CAPLE) for which scheme applicants must achieve DIPLE B2 or above to obtain the reward.

For English learners, General Training Test of IELTS and the Listening & Reading Test of TOEIC are the two recognised tests, with the criteria for the reward a rating of 7 for IELTS and 750 for TOEIC. From November 1 to June 30, 2018 the scheme welcomes citizens aged 15 or above who have already signed up as a member of the Talent Information Registration online system.

According to Senior Advisor Consultant of CDT Lei Lai Keng, applicants could get MOP5,000 from all the designated examinations.

Qualifications for electricity and cooking

Lei said the committee is considering extending the reward scheme to

qualifications relating to electricity and cooking, adding the scheme might attract some 1,000 applicants based upon previous statistics and data.

The Head of Division of Continuing Education of the Education and Youth Affairs Bureau, Kong Ngai, noted that applicants could take designated tests or examinations anywhere in the world as the reward can be obtained

via uploading requested documents.

When asked if test results come out after the scheme period, Kong affirmed that applicants could upload certificates or results in later terms, while saying that similar schemes will be rolled out in the future.

Meanwhile, Lei revealed that 8,000 citizens have registered on the Talent Information Registration online system since its launch in 2014.

8 Business Daily Thursday, October 26 2017

MACAU

Security

Be prepared Enforcing a periodic risk management process is the best method for local companies or organisations to prevent or diminish the impact of damage caused by potential threats, a security expert told Business Daily yesterday Nelson Moura nelson.moura@macaubusinessdaily.com

Local businesses need to periodically identify any risks that can impact their operation, prioritise the ones that are more likely to impact them, prepare a contingency plan and practice it to prefect its practical application, James Langton, an associate at local security company OMNIRISC Security (Macau) told Business Daily yesterday.

According to Mr. Langton, companies nowadays can be impacted from threats that can go from typhoons, loss of power or bomb threats to IT disruptions, loss of communication or even a social media public relations issue.

With the passage of Typhoon Hato on August 23 leading to financial losses of MOP11.47 billion - with Small and Medium Enterprises reporting

losses of MOP3.63 billion - Mr. Langton recommends local industries be aware of the particular risks they face - investing in an underground energy generator, for example - and planning accordingly.

“It’s a matter of emergency management issues. If flooding is an issue then we have to have a plan to deal with it. Who’s going to deal with it?

Who’s in charge? What actions are we going to take? What equipment do we have? Do we have small generators to pump water out? Can we place a water barrier?” he told Business Daily.

Mr. Langton therefore advised companies and organisations to perform security audits and risk assessments; perform security implementation management and create emergency preparedness training programmes tailored to their business characteristics.

The statements were made after a seminar organised yesterday by the France Macau Chamber of Commerce (FMCC) on Risks, Emergencies and Crises Management.

Highly subjective

When it comes to individuals, Mr. Langton said that the notion of danger is subjective, with people tending to only have an adequate idea of dangerous situations they’ve experienced before.

Thus, it is the role of the government and the media to warn or remind people of potentially dangerous situations that can arise in situations such as a typhoon, like avoiding going to a building’s underground car park.

The majority of the 10 fatalities that occurred in Macau due to Typhoon Hato occurred after people attempted to remove their cars from car parks during the storm.

“I don’t think the people in the car parks were aware of a large flood in an underground space, they had never experienced it. […] It’s the government’s responsibility to explain that there is a risk,” he added.

The security expert considered that having experienced the effects of the typhoon, it could change some people’s behaviour but that the notion of danger diminishes as time passes, with local government and media having the responsibility to ensure that residents do not forget the risks.

“It’s like what happened with seat belts. When initially the procedure was for people to volunteer to wear a seatbelt, few people did. Governments had to legislate [non-wearing of seatbelts] as an offence and now we wear them and we don’t even think about it,” he concluded.

Banking

Slow year The local branch of Portuguese bank Millennium BCP and the offshore branch of CGD both saw yearly decreases in profit in the first nine months of this year The Macau branch of Portuguese bank Banco Comercial Português SA (Millennium BCP) posted MOP81.24 million (US$10.1 million) in profit for the first nine months of this year, a 30.7 per cent yearon-year decrease from the MOP129.23 million registered in the same period last year.

As of September 30 of this year, Millennium BCP Macau branch revenues plunged 29.4 per cent yearly for MOP155.39 million.

Millennium BCP group has had a fully operational onshore banking licence in Macau since 2010, having opened

its Macau branch in 2013.

A Chinese investment group is currently the largest shareholder at the Millennium BCP group, owning 25.1 per cent of the Portuguese banking group.

Meanwhile, the offshore branch in Macau of the Portuguese state-owned bank Caixa Geral de Depósitos (CGD) registered MOP2.56 million in profits for the first nine months of the year, some 37.8 per cent less than the MOP4.11 million in the same period in 2016.

Last December, CGD stated it was planning to scale down its international operations

in order to focus on its operations in African Portuguese-speaking countries as well as in the MSAR, with the bank’s president saying in July of this year that the group’s offshore branches in Macau and the Cayman Islands would close by the end of the year.

The group’s president added that deposits from customers who are not residents of Portugal were not being accepted by those branches with clients contacted to enquire if they would like to remain with the bank or terminate their business relationship. N.M

Business Daily Thursday, October 26 2017 9

gaming CE

Chief Executive to deliver Governance Action Lines Nov. 14

Chief Executive Fernando Chui Sai On will deliver the Governance Action Lines (LAG), defining the strategies for the 2018 financial year on Tuesday, November 14 at 5:00pm, in the Legislative Assembly, according to a release.

The speech will be broadcast live online at www.gov. mo or www.al.gov.mo as well as on youtube at www.

youtube.com/c/gcegovmo. It will also be carried live by local broadcaster TDM. The day after the speech the Chief Executive will return to the Legislative Assembly for a Q & A session with legislators from 3:00pm to 6:00pm. The LAG will be available for download in Chinese and Portuguese at www.gce.gov.mo.

Gaming

Poker pro Ivey dealt bad hand as UK court says he's a cheater Ivey argued that when he played the game of Punto Banco at Crockfords Casino in 2012, he believed edge sorting was a legitimate way to gain an advantage Jeremy Hodges

Poker champion Phil Ivey’s luck ran out at the UK’s Supreme Court, which ruled that he cheated at a form of baccarat to win 7.7 million pounds (US$10.1 million) at a Genting Bhd. casino in London.

The UK Supreme Court was asked to decide whether dishonesty is a necessary element of cheating. Ivey, a 10-time winner of World Series of Poker bracelets, originally sued the London casino for his winnings in 2014.

While the veteran gambler said he was just taking advantage of the dealer and marks on the cards, the top court unanimously ruled

Ivey’s use of a technique called edge-sorting was dishonest. The judges said rather than being clever, Ivey “duped the croupier into unwittingly fixing” the cards.

Edge sorting involves arranging cards to take advantage of slight design differences or flaws to give a player a better idea of high and low-value cards. Ivey argued that when he played the game of Punto Banco at Crockfords Casino in 2012, he believed edge sorting was a legitimate way to gain an advantage.

“It makes no sense that the UK Supreme Court has ruled against me, in my view, contrary to the facts and any possible logic involved in our industry," Ivey said in a

statement following the ruling. "It is because of my sense of honour and respect for the manner in which gambling is undertaken by professional gamblers such as myself that I have pursued this claim for my unpaid winnings," he said.

While Ivey said the case was about honour, UK lawyers called the ruling, which held that most cheating is by definition dishonest, “one of the most significant decisions in criminal law in a generation.”

“For 35 years, juries have been told that defendants will only be guilty if the conduct complained of was dishonest by the standards of ordinary reasonable and honest people and also that they must have

realized that ordinary honest people would regard their behaviour as dishonest,” said Stephen Parkinson, a lawyer for Genting at Kingsley

Napley in London. “The Supreme Court has now said that this second limb of the test does not represent the law." Bloomberg News

10    Business Daily Thursday, October 26 2017

Greater China

Chinese President Xi Jinping (L) and the new members of the Standing Committee of the Politburo (2-L to R) Han Zheng, Wang Huning, Li Zhanshu, Li Keqiang, Wang Yang, and Zhao Leji applaud at a press conference at the Great Hall of the People in Beijing, China, 25 October 2017.

Politburo

New leadership line-up shows no obvious Xi successor A new Central Military Commission was also announced, reduced from 11 members to seven, as had been expected Philip Wen and Michael Martina

C

hina's ruling Communist Party broke with recent precedent on Wednesday and revealed a new leadership line-up without a clear successor to President Xi Jinping, who has become arguably the most powerful Chinese leader since Mao Zedong.

Apart from Xi, Premier Li Keqiang was the only one to retain his spot amid sweeping changes on the Politburo Standing Committee. There is now speculation Xi could seek to stay on in some capacity beyond the end of his second term in 2022.

All seven Standing Committee members are in their 60s and, for the first time, no member was born before the 1949 Communist revolution.

The make-up of the committee, which has ultimate control over the world's second-largest economy, appeared to be a compromise to include a broad range of voices from party elites.

The committee includes one person known to be very close to Xi - Li Zhanshu. Li, who often accompanies Xi on overseas trips, was named the third-ranked member, meaning he

will most likely assume the role of head of the largely rubber-stamp parliament. That will not be confirmed until parliament meets in March.

Xi had already strengthened his hand considerably ahead of the announcement, with his political theory and "Belt and Road" infrastructure-led development strategy put into the party constitution. He was named the party's "core" last year.

Political capital

Damien Ma, fellow and associate director at U.S. think tank the Paulson Institute, said the outcome may not have been entirely what Xi wanted but that he had to balance things out.

"I do think that Xi made more of a power play to get his thought into the party charter - and also OBOR (One Belt, One Road) and being the 'core' - and didn't necessarily spend all his political capital to elevate everyone he wanted," Ma said.

Xi himself made no mention of who his successor might be as he introduced his new Standing Committee in a large room in Beijing's Great Hall of the People, an event shown live around the country.

He did not take questions from the

assembled media but said the party had weathered trials and tribulations.

"These experiences have taught us that peace is precious and development must be valued," Xi said.

"We will also work with other nations to build a global community with a shared future, and make new and greater contributions to the noble cause of peace and development for all humanity," he said.

Guangdong party secretary Hu Chunhua and Chongqing party boss Chen Miner had been previously seen as prominent contenders to succeed Xi among the party's so-called sixth generation of leaders but were not included in the Standing Committee.

Instead, both were named to the wider 25-member Politburo, a rung below the Standing Committee.

Abruptly removed

Xi and Li were first promoted to the Standing Committee at the 17th Party Congress in 2007, in a clear signal that the pair would succeed Hu Jintao and Wen Jiabao and occupy the top two offices - which they did five years later.

B u t S u n Zh e n gcai , a n o th e r sixth-generation contender, was

abruptly removed from his post as Chongqing party secretary in July, signalling the likelihood that Xi would delay naming a successor and adding to speculation that he could still be around in some capacity after 2022.

Zhao Leji, the head of the party's Organisation Department, which oversees personnel decisions, replaced Wang Qishan as head of the Central Commission for Discipline Inspection after being named to the anti-graft body on Tuesday.

Vice Premier Wang Yang will likely head parliament's high-profile but largely ceremonial advisory body, while Wang Huning will likely be in charge of ideology and propaganda.

Shanghai party chief Han Zheng rounds out the list, the most junior of the seven.

A new Central Military Commission was also announced, reduced from 11 members to seven, as had been expected.

Xu Qiliang stayed on as one of its two vice chairmen, while Zhang Youxia, who is close to Xi, was named its other vice chairman and also assumes a position on the Politburo, as previously reported by Reuters. Reuters

Property

Mainland to tweak property price methodology to address "new challenges" The National Bureau of Statistics now compiles and publishes a property price index every month that covers 70 large and medium-sized cities China will make changes to the methodology for calculating its housing price index as the current system has encountered "new challenges", the Statistics Bureau said yesterday.

Li Xiaochao, deputy director at the National Bureau of Statistics (NBS), said the current methodology for calculating housing prices has met with "new challenges and difficulties", after a work meeting with a visiting German delegation this week, according to a statement posted on the agency's website.

Li did not specify what the challenges were, but said China would further improve the housing price statistics system and calculation

methodology to "better facilitate state macro-control in the property market".

He did not give a timetable but added the changes would be made as China actively learns from the experiences of the European Union and Germany.

China first established the real estate price survey system in 1997 and has since introduced two significant changes in its methodology, including extending the number of cities it covers.

The NBS now compiles and publishes every month a property price index that covers 70 large- and medium-sized cities.

The country's property prices have soared since

late 2015, led by a price surge in its biggest cities which has since spilled into smaller centres. More than 45 major cities have imposed measures to cool overheating since October 2016.

Critics have long questioned the reliability of China's official housing price index, as there has been a considerable discrepancy between the official index and people's general perception of price increases.

Prices for new homes in September rose 6.3 per cent from a year earlier, slowing from an 8.3 per cent increase in August, as government measures to cool a long property boom take hold. Reuters

Business Daily Thursday, October 26 2017 11

Greater China Markets

Singapore's OCBC to boost research in Hong Kong Hong Kong’s stock market had an average daily turnover of HK$95 billion in September, compared to less than S$1.15 in Singapore Livia Yap and Tom Redmond

S

ingapore’s second-largest lender has decided that the best place to expand its research is the country’s rival market Hong Kong.

Oversea-Chinese Banking Corp. plans to add coverage of 60 Hong Kong-listed stocks, with 14 to 20 started by year-end, according to Carmen Lee, its head of research.

That would supplement the around 75 firms already tracked by Bank of Singapore Ltd., OCBC’s private banking unit, she said.

OCBC previously invested in midcap coverage of Singapore stocks in an attempt to dominate that area of its home market. But it was difficult to generate trades because the companies were too small for many clients, Lee said.

“Hong Kong is now our No. 1 overseas market,” Lee said in an interview in Singapore. “The names are so familiar. Everyone knows about Ping An Insurance Group, China Life Insurance, Tencent Holdings and Baidu. It’s very easy to promote Hong Kong ideas.”

Lee’s team has already started coverage of China Evergrande Group, Fosun International Ltd. and China State Construction International Holdings Ltd., she said. The firm initiated coverage on China Evergrande and Fosun this month and China State Construction in September.

Hong Kong volume

Hong Kong’s stock market had average daily turnover of HK$95 billion (US$12.2 billion) in September, compared to less than S$1.15 billion (US$845.3 million) in Singapore. Singapore’s stock exchange has accelerated efforts in past months to increase trading in the city-state, as its average daily value of shares traded remains at less than half its average level of S$2.4 billion in 2007. A penny-stock

rout in 2013 shook confidence in the city’s markets.

Nevertheless, OCBC remains focused on its core home market, Lee said. She prefers mid-cap property developers in Singapore and says domestic bank shares could continue to rise, even though they’ve become more expensive. (OCBC itself, for example, has gained 29 per cent in 2017 alone and now trades at 12.9

to take on new ideas, and are also less attached to “core old economy stocks like banking, manufacturing, conglomerates,” she said.

“With young analysts, I find that they’re very enthusiastic,” Lee said.

“They’re fantastic with computers, they’re fantastic with presentation,” she said. “Older analysts tend to be very fixated about certain areas.”

The bank is planning to take on

In Brief Market tapping

Smithfield Foods goes online to sell U.S. pork in Mainland The world's largest pork company WH Group Ltd said on Tuesday its U.S. subsidiary, Smithfield Foods [SFII. UL], will for the first time sell its U.S.-produced pork online in China, via online retailer JD.com Inc. The fresh food division of JD.com, JD Fresh, will be the online sales platform for Smithfield's pork products in China, according to an agreement signed by Smithfield, Henan Shuanghui Investment and Development Co, which is also owned by WH Group, and JD.com.

Smithfield said in a statement on Tuesday that Shuanghui, Asia's largest animal protein company, would be its domestic agent for the venture.

WH Group bought Smithfield in 2013 in a US$4.7-billion deal aimed at tapping the massive supplies of U.S. meat for export to China.

Aviation

China Airlines expects to order at least 20 narrow body jets

times reported earnings, versus its five-year average of 10.5 times.)

Young group

Under Lee, OCBC’s research group has taken the unconventional approach of relying more on younger analysts, she said. Her team consists of six analysts, excluding Lee, with an average age of 30, with older analysts playing an important role in mentoring the younger ones, she said.

Younger researchers are more willing

two more people for its push into Hong Kong, and ultimately intends to have staff in Hong Kong as well, according to Lee. The companies the bank is starting to cover are all group efforts, rather than being dominated by a single analyst, she said.

“It’s quite unusual,” Lee said.

“Perhaps we are the only house in the market that does that,” she said.

“Usually most analysts in the past will just want to take 100 per cent ownership.” Bloomberg

Taiwanese carrier China Airlines Ltd expects to place an order for more than 20 Airbus SE or Boeing Co narrow body aircraft by the end of the year, the airline's president said on Tuesday.

The aircraft being evaluated to replace 20 Boeing 737-800s include the Airbus A320neo and A321neo and the Boeing 737 MAX 8, 9 and 10 models and the first deliveries should occur in 2021 or 2022, China Airlines President Hsieh SuChien said. "[We will order] more than 20 unless we see the market is going to die," he told Reuters on the sidelines of an industry conference. "I think we will expand." Hsieh said the airline was in talks with the aircraft and engine manufacturers and hoped to reach a decision by the end of the year. China Airlines, the country's second-biggest by revenue behind EVA Airways Corp, reported rising passenger numbers in the nine months ended Sept. 30 and is looking to expand flights to south-east Asia.

Corruption

Jinmao's Hong Kong office searched in corruption probe

Sports

Golf - PGA Tour China series back next year after hiatus Analysts are looking to the annual Central Economic Work Conference for signals on the 2018 growth target and policy initiatives The PGA Tour China series will return with a full schedule of tournaments in 2018 after this year's scheduled was scrapped, tour officials announced at the HSBC Champions on Wednesday.

Uncertainty loomed over the series, which has produced Li Haotong and Dou Zecheng, after the initial three-year deal with China Golf Association (CGA) ran out in 2016.

"We are excited to partner with the CGA in this endeavour going

forward and appreciate the CGA and its cooperation," the PGA Tour's Ty Votaw said in a statement.

The tour runs similar series in Latin America and Canada, rewarding top players with a passage to the PGA Tour through the Web.com Tour.

"We are very happy to again operate in 2018 and beyond," Greg Gilligan, Managing Director of PGA Tour Greater China, said.

"We have enjoyed our long-standing partnership with the CGA and

are especially thrilled that it will continue as both entities seek to grow the game in China."

Beginning in the spring of 2018, each event will offer an increased prize purse of at least RMB1.5 million (US$225,855).

Top five money-winners at the end of the season will earn 2019 Web. com Tour membership and at least 15 additional players will have access to the latter stages of the Web.com Tour qualifying tournament.

Chinese state-backed developer China Jinmao Holdings Group Ltd. said its Hong Kong office was searched in a corruption probe.

The company’s shares fell as much as 3.3 per cent in Hong Kong yesterday and JPMorgan Chase & Co. downgraded the stock. Jinmao and its units are not the subject of the investigation, the company said in a filing to Hong Kong’s stock exchange, adding that Chief Financial Officer Jiang Nan was asked to visit the Independent Commission Against Corruption as part of the probe. “Without clarity on any of the details, we believe corporate governance risk will remain high and advise investors to be cautious,” wrote JPMorgan analysts led

by Ryan Li, cutting the company’s rating to neutral from overweight. The analysts lowered their December 2018 target price for the company to HK$3.80 from HK$5.10.

12 Business Daily Thursday, October 26 2017

Asia MAS

Singapore won't regulate cryptocurrency, stays alert to risk Bitcoin’s rally and the proliferation of other digital assets is attracting the wary eyes of regulators globally, though many central banks have still refrained from supervising cryptocurrencies Chanyaporn Chanjaroen, Andrea Tan and Haslinda Amin

T

he victory of premier Shinzo Abe's ruling bloc in a weekend election should strengthen his hand in adopting pro-growth economic policies and his pledge to proceed with a scheduled sales tax will help reduce debt, Fitch Ratings said yesterday.

But prospects for structural reform remain limited, as there is still "little sign" Abe is making a breakthrough necessary to boost Japan's long-term growth, the rating agency said.

Abe's ruling coalition scored a landslide victory at a general election on Sunday, boosted by his campaign promises to invest more heavily on education and childcare. "(The victory) gives Abe a mandate to continue the 'Abenomics' economic strategy launched in early 2013 that aims to revive growth and end deflation through the three

"arrows" of loose monetary policy, fiscal flexibility and structural reforms," Fitch said in a report.

"Importantly, Abe will now be able to re-appoint Haruhiko Kuroda as Bank of Japan governor when Kuroda's term ends in April 2018, or choose a successor supportive of accommodative policies."

Ab e ' s w i n m e a n s a twice-delayed sales tax hike to 10 per cent from 8 per cent now looks more likely to be implemented in 2019, which could have a positive effect in reining in Japan's huge public debt, Fitch said.

The ratings agency said it had previously calculated that the sales tax hike could reduce Japan's fiscal deficit by around 0.8 per centage point per year in the medium term, if the proceeds were used predominantly for debt consolidation.

But Abe has said 2 trillion yen (US$17.6 billion) of the projected 5 trillion yen raised from the tax hike would be spent on education and

“Our attitude is let’s keep an open mind on it” Ravi Menon, Managing Director of Monetary Authority of Singapore

childcare. This would dampen but not eliminate the positive effect of the hike on debt dynamics, it said.

"The government was due to review its fiscal strategy during the fiscal year ending 2019, and we expect more clarity once the review is

complete," it said.

Abe had earlier said his plan to divert some proceeds from the tax hike away from debt payment meant it would be impossible to meet the government's pledge to balance the primary budget -- excluding debt-servicing and

new bond sales -- by the year ending in March 2021.

Fitch revised its outlook for Japan's single A sovereign debt rating to stable from negative in April, citing an improved economic outlook that would drive up tax revenues. Reuters

LNG

JERA's new LNG contract with Petronas foretells smaller, shorter deals The shorter duration and smaller volumes in the new deal, along with changes to the so-called destination clauses that restrict where the cargoes can be sold, highlight the changes that have occurred in the LNG market in the past few years Malaysian state energy company Petroliam Nasional Bhd, or Petronas, signed a three-year liquefied natural gas (LNG) supply agreement with JERA Co, with smaller volumes and for a shorter period than its previous deal with the biggest LNG buyer in Japan.

JERA, the fuel purchasing joint venture between Tokyo Electric Power and Chubu Electric Power,

Key Points Agreement shorter, smaller than prior 15-yr deal Petronas had earlier indicated flexibility in talks (Recasts with Petronas comments and market conditions) will buy 2.5 million tonnes per year (tpy) of LNG from Petronas starting in April 2018, the companies said yesterday.

The Japanese firm is currently in the middle of a 15-year long-term contract with Petronas for 4.8 million tpy of LNG that expires in March next year.

The shorter duration and smaller volumes in the new deal, along with changes to the so-called destination clauses that restrict where the cargoes can be sold, highlight the changes that have occurred in the

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LNG market in the past few years.

Buyers have gained the upper hand as growth in new supplies, mainly from Australia and the United States, has exceeded demand and depressed prices. Asian spot LNG prices have dropped by more than 70 per cent since 2014.

Petronas, the world's third-biggest LNG exporter, is also dealing with

rising production after the start-up of Train 9 at its Bintulu export terminal and its first floating LNG unit.

Petronas officials had said in May they are open to shorter-term LNG contracts and smaller cargo sizes to entice buyers.

"New demand terms and conditions are becoming a norm and providing flexible solutions to

accommodate the different needs of our buyers is our way forward," Ahmad Adly Alias, Vice President of Petronas' LNG Trading & Marketing, said in a statement yesterday.

The deal is JERA's first since the Japan Fair Trade Commission's (JFTC) ruling in June that declared the destination clauses to be anti-competitive.

This deal with Petronas is "in line" with the commission's ruling, JERA said.

"JERA believes this will contribute to its ability not only to respond to uncertainties in LNG demand, but also to put JERA in position to optimize its LNG operations," the company said.

The LNG will be sold as either delivered ex-ship (DES), where the buyer takes the cargo at an agreed destination, or on a free-on-board (FOB) basis, where the buyer takes the cargo once it is loaded onto a ship, JERA said.

The JFTC's June decision said having a destination clause in a FOB contract is "likely to be in violation" of the nation's Antimonopoly Act, while having the clause in a DES contract and requiring a seller's consent to sell a cargo on is not problematic.

JERA signed the supply agreement with Petronas' subsidiary Malaysia LNG Sdn Bhd, which operates the Petronas LNG Complex in Bintulu, Sarawak. Reuters

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Business Daily Thursday, October 26 2017 13

Asia In Brief

Sale

Boeing signs US$13.8 billion deal with Singapore Airlines Boeing Co on Monday signed a previously announced deal with Singapore Airlines Ltd to sell it 39 aircraft worth US$13.8 billion at list prices during a White House event with Singapore's prime minister.

The airline said last week it would finalize the order during the visit as part of its bid to modernize its fleet over the next decade. Airlines typically receive discounts on jet orders, and the deal is estimated to be closer to US$6.5 billion in value.

India tells Tillerson plans to retain North Korea embassy

Poll

Australian economy energised by jobs, infrastructure surge The country's state governments have been particularly active in infrastructure investment and helped revive economic growth in the June quarter after a slow start to the year.

Wayne Cole

Australia's economy looks set to pick up pace over the next two years as surging employment bolsters incomes and state governments splurge on infrastructure, though a mountain of household debt still looms as a concern.

Key Points Economy to grow 2.3 pct in 2017, 2.8 pct in 2018 and 2019 CPI inflation 2.0 pct in 2017, 2.2 pct in 2018, 2.3 pct in 2019 Economists polled by Reuters estimated Australia's A$1.7 trillion (US$1.33 trillion) of annual gross domestic product (GDP) would grow 2.3 per cent in 2017, unchanged from July's forecast.

The economy expanded by only 1.8 per cent in the year to June but mainly due to a weather-beaten contraction in the third quarter of 2016. Once that negative drops out of the calculation,

the pace should spring ahead.

Growth was then seen accelerating to 2.8 per cent for both 2018 and 2019, extending Australia's run of 26 years without a technical recession.

The upbeat outlook is reflected by surveys of business, which have been showing the best conditions since before the global financial crisis, with sales, profits and jobs all improving.

"Leading indicators from the surveys clearly point to an improving economy, at least in the near-to-medium term," said NAB chief economist, Alan Oster.

"A positive by-product of that has been solid outcomes for hiring intentions and capex plans for the year ahead."

The labour market has been a stand out performer with a huge 372,000 jobs created in the year to September, the fastest pace since 2008. That has supported incomes and spending in the face of unusually subdued wage deals.

Healthcare, education and construction have all been major generators of jobs, driven in part by increased public spending. Australia's state

governments have been particularly active in infrastructure investment and helped revive economic growth in the June quarter after a slow start to the year.

Kristina Clifton, a senior economist at Commonwealth Bank of Australia, estimates infrastructure work will add up to 0.7 percentage points to GDP growth in the year to June 2018 and generate around 36,000 new jobs. Yet stubborn softness in wages has kept inflation in check, suggesting there is still plenty of slack in the economy.

Analysts expected consumer price inflation to run at 2.0 per cent this year, the very bottom of the Reserve Bank of Australia's (RBA) 2-3 per cent target range, and to pick up only gradually to 2.3 per cent by 2019.

Such a benign background gives the central bank plenty of scope to keep policy loose and markets are not pricing in a rise in the current 1.45 per cent cash rate until late 2018.

That is likely just as well since households are sitting on record levels of, mainly mortgage, debt and many could not bear a sharp rise in borrowing costs.. Reuters

Meetings

Philippine President Duterte to visit Japan ahead of key regional summits Duterte's visit will mark his second trip to Japan and his third meeting with Abe Philippine President Rodrigo Duterte will visit Japan for talks with Prime Minister Shinzo Abe this month, ahead of key regional meetings beginning with the Asia-Pacific Economic Cooperation (APEC) gathering

in Vietnam in November.

"Japan and the Philippines have close ties and our strategic partnership can promote stability in the region," Japanese Chief Cabinet Secretary Yoshihide Suga said yesterday

during a regular press briefing.

Duterte will arrive on Oct 29 for a three day visit, Suga said.

Japan is concerned about China's growing power in the South China Sea and sees cooperation with the Philippines, which lies on the waterway's eastern side, as key to helping prevent the spread of Beijing's influence into the western Pacific.

Duterte, unlike his predecessor, Benigno Aquino, has courted China and has been less critical of its island building in the region.

Following the two-day APEC meeting from Nov 11, which U.S. President Donald Trump and Chinese President Xi Jinping will attend, Asia Pacific leaders will travel to the Philippines for the East Asia Summit, including representatives from the Association of Southeast Asian Nations (ASEAN) and other Asia Pacific nations.

Duterte's visit will mark his second trip to Japan and his third meeting with Abe. Reuters

India's foreign minister told U.S. Secretary of State Rex Tillerson on Wednesday that New Delhi wanted to retain its small embassy in North Korea despite Washington's efforts to isolate Pyongyang over its nuclear and ballistic missile tests. Sushma Swaraj made the statement after meeting Tillerson in New Delhi. Tillerson is due to meet Indian Prime Minister Narendra Modi later in the day. Swaraj said New Delhi believed a diplomatic presence in North Korea was necessary to keep the lines of communication open. India and North Korea maintain diplomatic offices in each other's capitals, though New Delhi recently banned trade of most goods with the country, except in food or medicine.

Courts

Eminem wins copyright case against New Zealand political party U.S. rapper Eminem has won a court case against a New Zealand political party for using music similar to his hit track ‘Lose Yourself’ in a television commercial.

New Zealand’s High Court on Wednesday found that the conservative National Party breached copyright in a 2014 election campaign advertisement, and ordered it to pay NZ$600,000 (US$414,000) plus interest in damages. The court ruling comes less than a week after National was ousted from government in the latest election. “This decision is a warning to ‘sound alike’ music producers and their clients everywhere,” said Adam Simpson, director of Simpsons Solicitors, who acted for Eminem’s music company Eight Mile Style. “The ruling clarifies and confirms the rights of artists and songwriters. It sets a major precedent in New Zealand and will be influential in Australia, the UK and elsewhere.” National said it believed it had purchased the music, titled ‘Eminem Esque’, legally as it came from a reputable Australian-based music production library and was licensed with the Australasian Mechanical Copyright Owners Society. However, the High Court said the sound-alike track “substantially copied” Lose Yourself and the differences between the two were minimal. The National Party committed three restricted acts amounting to copyright infringement, the court said.

14 Business Daily Thursday, October 26 2017

International In Brief Increase

Exchange operator Nasdaq's profit rises 30.5 pct Business activity across the eurozone slowed in October, a key survey showed yesterday, but job creation hit the fastest pace in a decade as the economic recovery in Europe stayed on track.

Analysts said that while the slip in the headline readings of the survey by data monitoring company IHS Markit was disappointing, the economy remained on its best run since the eurozone debt crisis. A purchasing managers' index (PMI) compiled by Markit dipped to 55.9 in October after 56.7 in September, the group said in a statement.

Chemical

EU delays decision on herbicide glyphosate EU countries failed yesterday to vote on a licence extension for weedkiller glyphosate, delaying again a decision on the widely used herbicide that critics say could cause cancer.

The European Commission said in a statement the relevant committee did not hold a vote at a meeting and that it would announce the date of the next meeting shortly.

It also failed to vote at a meeting earlier this month. The current licence expires at the end of the year.

Europe has been stuck over what to do with the chemical, a key ingredient in Monsanto Co's top-selling weedkiller Roundup, after the World Health Organization's cancer agency concluded in March 2015 it was a substance that probably causes cancer.

Brexit

UK aims for outline Brexit transition deal by first quarter of 2018 Britain and the EU are at odds over the timeline of when the negotiations, incorporating the terms of the divorce, the transitional deal and the future trade deal, will conclude William James and Andrew MacAskill

B

ritain wants an outline agreement with the European Union on the transitional arrangements that will apply after leaving the bloc by the first quarter of 2018, Brexit minister David Davis said yesterday.

Britain is seeking a so-called implementation period of around two years following its departure from the EU in March 2019, during which its access to the EU single market would stay largely unchanged while new arrangements are put in place.

Businesses are anxious to see the details of such a deal as soon as possible to end uncertainty over the trading rules they will face after Britain leaves the bloc.

"I would be aiming to get certainly the outlines of it agreed, if we could, in the first quarter (of 2018) ... but it's a negotiation," Davis told a parliamentary

committee.

Last week EU leaders said at a summit in Brussels that they would begin preparations to move into "phase two" of the Brexit negotiations in December, a step forward that would allow London to discuss its future trade relationship with the bloc.

Davis said he expected to receive guidance from the EU on its approach to a transitional period by December, and that a deal allowing Britain to maintain similar conditions to those it currently has with the EU would be struck quickly afterwards.

Britain and the EU are at odds over the timeline of when the negotiations, incorporating the terms of the divorce, the transitional deal and the future trade deal, will conclude. Britain wants to finish everything by the time it leaves in early 2019, while the EU thinks it could take until 2020.

Davis said he believed Britain would be able to seal a trade and customs

arrangement by the end of the twoyear exit process in March 2019, and that it was important to do so to avoid getting trapped in a protracted negotiation.

"It's not a good position to get into to be still negotiating during such an arrangement," Davis said. "If we were doing the negotiation during a period of transition, I suspect what we would get offered is a year extension and another year extension, each time paying a fee."

An EU official said on Tuesday that the EU will only negotiate on the details of a free trade deal after Britain has actually left in March 2019 because the EU's own laws do not allow it to negotiate trade agreements with its own members.

Asked about this approach, Davis said a trade deal could be signed 'a nanosecond' after Britain leaves, implying that he hoped for a more flexible approach from Brussels. Reuters

Rights

Workers rights get Qatar nod as ILO poised to decide on abuse probe Qatar has signed 36 worker protection agreements with countries that provide much of its labour force, state media reported yesterday, weeks before the International Labour Organisation is to decide whether to investigate it for worker abuse. Qatar is keen to show it is tackling allegations of worker exploitation as it prepares to host the 2022 soccer World Cup, which the Gulf Arab state has presented as a showcase of its progress and development. State news agency QNA did not provide details of the bilateral agreements, but said they are in addition to five memorandums of understanding, preparations for a minimum wage, and an employment support fund that would help workers faced with overdue wages.

Retail

Chinese tourists drive rise in 2017 European tax free shopping Chinese tourists helped drive an 11 per cent rise in tax-free shopping in Europe during the first nine months of 2017, reversing a fall last year, tax-refund firm Global Blue said.

Many tourists buy high-end products shoes, clothes and handbags when travelling and reclaim the local taxes, making such shoppers an important market for retailers.

Chinese duty free customers accounted for 28 per cent of total sales, while Russians represented 9 per cent.

British sales were up by 22 per cent and Spain's by 18 per cent with better global economic conditions, more people travelling to Europe and higher spending driving growth, Global Blue said in a statement yesterday.

Infrastructure

States filling gap as GOP-led Washington stalls, McAuliffe says A planned push for US$1 trillion in infrastructure funding has yet to materialize into legislative action Terrence Dopp

Virginia Governor Terry McAuliffe (pictured) criticized President Donald Trump and the Republican-led Congress over what he called a lack of action on policies that would boost the economy - as well as some Trump policies that he said are harming job growth - adding that the nation’s governors have been forced to fill this leadership gap.

"I’m disappointed and dissatisfied with Washington," he said. "I really wish the federal government was helping us. But they haven’t, they’ve done nothing but hurt us at this point."

McAuliffe, speaking at a Bloomberg Next event in Washington, said Trump hasn’t fulfilled his promises to fix the nation’s infrastructure. A planned push for US$1 trillion in infrastructure funding has yet to materialize into legislative action, and Trump has since balked at a revised plan to make up most of the investment with public-private partnerships. It’s unclear when, given the failed health-care bill and current tax focus, an infrastructure bill could come up. The earliest would almost certainly be in 2018.

Other Trump policies, McAuliffe said, are actively hurting. The Virginia

“I’m sick of the tweets.

I really am” Terry McAuliffe, Governor of the state of Virginia Democrat cited the White House’s decision to end cost-sharing reduction payments under Obamacare, and added that Trump’s hard-line immigration policy is crimping the expansion of minority-owned small businesses in his state.

M c A u l i f f e, a t e r m - l i m i t e d

Democratic governor former head of the Democratic National Committee who has been mentioned as a possible candidate for a higher office someday, spoke as a running feud between Trump and Senate Foreign Relations Committee Chairman Bob Corker reignited, with each Republican going after the other in frank and unusually open 140-character-or-less invective.

"It just sends a message out there of ‘what is going on in the United States of America?’ with the same people that I’m trying to close business deals with," McAuliffe said.

"I’m sick of the tweets. I really am."

Reuters

Business Daily Thursday, October 26 2017 15

Opinion Business Wires

Bangkok Post The cabinet on Tuesday approved an amendment to the five-year strategic plan for public-private partnerships (PPP) to make them compatible with the Thailand's 12th National Economic and Social Development Plan (20162020). Kobsak Phutrakul, assistant minister to the Prime Minister's Office, said amended joint investment under the PPP programme will be categorised into two groups: one that should allow the private sector to take part in joint investment, and another with which the government wants to promote joint investment. The projects in which the government can form joint ventures with the private sector include city rail mass transit, toll projects for rail projects in urban cities, roads, ports and high-speed rail that require private investment. Total investment for this group is estimated to be worth 987.32 billion baht.

Markets, Moody's applaud US$32 billion 'Bazooka' for Indian banks

Straits Times Singapore's central bank chief said while inflation is still well below the historical average, policy makers need to be proactive if a stronger economy results in a pickup in price pressures. Inflation will climb at some point if economic growth continues to strengthen, and under those circumstances, the central bank - like others around the world - needs to be forward-looking, Ravi Menon, managing director of the Monetary Authority of Singapore, said in an interview at the bank's headquarters in the city on Tuesday. "Our track record shows that we are keenly focused on inflation, keeping inflation under control," he said.

"And as long as inflation remains benign, the current policy stance has been appropriate."

I

Anto Antony a Bloomberg columnist

ndia’s government has won a resounding reception from investors and credit-ratings firms for its unprecedented pledge of 2.11 trillion rupees (US$32 billion) in capital for the country’s beleaguered state banks.

The move, which drove an index of governmentrun banks up as much as 26 per cent, is part of Prime Minister Narendra Modi’s goal to help lenders meet tighter capital-reserve requirements, as slower economic growth and falling demand erode borrowers’ ability to repay loans. Soured debt is now the highest since 2000, hampering credit expansion that’s needed to spur Asia’s third-largest economy.

“The proposed infusion is a sizable jump over what had been pledged before as India is seeking to plug a large part of the core equity gap at the staterun banks,” said Jobin Jacob, a Mumbai-based associate director at Fitch Ratings Ltd. This addresses “weak core capitalization, one of the key drivers for our negative outlook on the South Asian nation’s banking sector.”

Moody’s Investors Service analyst Srikanth Vadlamani said the move is a “significant credit positive” for India’s state-run banks. The amount of capital pledged is enough to address the lenders’ solvency challenges and recapitalize them adequately, Vadlamani, who is vice president of the financial institutions group at the unit of Moody’s Corp., said by phone.

The government will sell 1.35 trillion rupees of recapitalization bonds, while banks will raise another 760 billion rupees through “budgetary support” and from the markets, according to the plan announced Tuesday.

The funds vastly outstrip the 700 billion rupees that India had pledged two years ago to inject by 2019, and is likely a recognition that the government had underestimated the impact ballooning bad loans would have on credit growth. Previous central bank Governor Raghuram Rajan had taken broad steps to bring soured credit under control, including encouraging banks to merge with each other and forcing lenders to recognize hidden bad debt.

“These funds will help in efficiently managing risk and credit capital-related requirements of the banks,” State Bank of India Chairman Rajnish

“

Philstar The government will stick to its budget deficit ceiling, which is set at three per cent of the country’s gross domestic product, Finance Secretary Carlos Dominguez said yesterday. Dominguez gave the assurance despite concerns that the Tax Reform for Acceleration and Inclusion (TRAIN) Act may not yield sufficient revenue to help fund the government’s massive infrastructure program. “The Plan B is to stick to the three per cent deficit-to-GDP ceiling.

That is a hard number, we cannot afford to go beyond that,” he said. The finance chief said he is confident Congress would be able to come up with a final tax reform bill with an adequate revenue impact.

Under the original proposal of the DOF, the tax reform bill is projected to yield P157 billion in additional revenue for the government in the first year of its implementation. The House version of the bill has a net revenue impact of P133.8 billion, while the Senate version has P59.9 billion.

Kumar said in an emailed statement.

Shares of SBI jumped as much as 25 per cent, the biggest intraday gain in eight years. Punjab National Bank advanced as much as 40 per cent.

Higher provisions

Analysts were largely positive on what Kotak Institutional Equities called a “capital bazooka.” The resolution of soured credit is expected to accelerate as banks mark down their impaired loans, Kotak analysts led by M B Mahesh wrote in a report.

The recapitalization will help banks meet higher provision requirements under new accounting rules starting April 2018, said analysts at CIMB Securities India Pvt. There was some caution: bank lending will take time to improve, according to Nilanjan Karfa, an analyst at Jefferies India Pvt. India’s government is providing most of the equity capital because investors are reluctant to buy shares of lenders given their concerns over profitability and asset quality.

The country’s soured-debt ratio is the worst among the world’s largest economies, data compiled by the International Monetary Fund show. Staterun banks account for almost 90 per cent of all non-performing loans in the South Asian nation, according to Credit Suisse Group AG data.

Privately owned banks aren’t immune. Shares of Axis Bank Ltd. tumbled last week after the privatesector lender said it expects credit costs to surge because of an increase in soured debt.

As of Tuesday, Fitch had a negative outlook on Indian banks based on its assessment of the sector’s weak core capitalization. Moody’s highlighted significant capital shortfalls at several banks, while assigning a stable outlook to the banking system.

The state banks’ scope to sell shares has also been curtailed by a rule requiring the government to own at least 51 per cent of the lenders. The requirement has left some of the banks, which account for about 70 per cent of India’s outstanding loans, historically less capitalized than their privately owned peers, obliging the government to support them.

“This infusion also helps in maintaining overall systemic stability,” Vadlamani said. Bloomberg

India’s government is providing most of the equity capital because investors are reluctant to buy shares of lenders given their concerns over profitability and asset quality

”

16 Business Daily Thursday, October 26 2017

Closing Logistics

SF Holding signs deal to help modernise China's military logistics China has signed a deal with SF Holding to help modernise the logistics network of the country's air force, the express delivery company said yesterday.

Privately-owned SF Holding, whose subsidiary SF Express is often called China's answer to FedEx Corp, said on its official WeChat account the agreement with the People's Liberation Army (PLA) was part of a wider plan to improve integration between China's civilian and military sectors.

China's armed forces, the world's largest, are in the midst of an ambitious modernisation programme spearheaded by President Xi Jinping. Last year, Beijing set up a new logistics support force to better support military operations.

SF Express is one of the largest companies in the fiercely competitive Chinese package delivery sector and has its own fleet of cargo aircraft. It said it signed the agreement with the PLA on Monday in Beijing, without disclosing financial details.

It said the company and the PLA would cooperate over the next five years in a series of areas such as goods transportation and warehouse management to improve the logistics network and aid air force combat. SF Holding added it had set up a special division to handle the work.

It also said other firms including JD Logistics, part of China's second-largest e-commerce company JD.com, Deppon Logistics, and state courier China Postal Express & Logistics Company Limited had signed similar strategic cooperation agreements with the PLA. Reuters

M&A

U.S. fund, CIC snap up Equis Energy for US$3.7 bln in bet on renewables The transaction is expected to be sealed in the first quarter of 2018 Anshuman Daga

U

.S. fund Global Infrastructure Partners (GIP) has agreed to buy Equis Energy, Asia's largest independent renewable energy firm, for US$3.7 billion with partners including sovereign fund China Investment Corp, underscoring growing global interest in renewables investment.

Singapore-headquartered Equis is the largest renewable energy independent power producer in Asia‐ Pacific, with over 180 assets comprising solar, wind and hydro generation spread across countries including Australia, Japan, India and the Philippines.

Equis' assets have installed capacity of more than 11 gigawatts. A big chunk of the assets are based in Japan.

"The transaction is the largest renewable energy generation acquisition in history and positions GIP as a dominant renewable energy developer in the key OECD growth markets of Australia and Japan, as well as across India and South-East Asia," Equis Pte Ltd and GIP said in a statement yesterday.

Moody's Investors Service said in September that renewables would become a central focus of national energy policies as more countries shift to renewable procurement through competitive auctions.

Reuters reported in July that Japanese trading firms, global pension funds, several companies and buyout firms were competing to buy Equis, at a time when many Asian governments are expanding the use of renewable power and its costs are falling.

"Government policies are supportive and encouraging of renewables. But just as important and if not more so, is that the cost curve of both wind and solar has come down massively," one person familiar with the Equis deal said yesterday.

"In most markets now, you don't need government subsidies to make it economically viable and that's always been the handbrake," said the person, who was not authorised to speak to the media on the matter.

The Public Sector Pension Investment Board, one of Canada's largest pension investment managers, is also part of the buying consortium, the statement showed.

The source said GIP would own a stake of 50 per cent in Equis, while PSP and CIC would each own between 10 per cent and 20 per cent. GIP, PSP and CIC did not immediately respond to a request for a comment outside regular U.S. hours.

This year has already seen CIC sign a big-money deal, after it agreed to buy European warehouse firm Logicor Ltd for nearly US$14 billion.

"We are excited by the new investment in Equis Energy which is a strong fit with GIP's global renewable investment strategy," Adebayo

Ogunlesi, GIP's chairman and managing partner, said in the statement.

New York-based GIP, which manages over US$40 billion for its investors, has investments in Spain's Gas Natural, Port of Melbourne and Britain's Gatwick Airport.

GIP raised a record US$15.8 billion in its third fund that closed in January. Another infrastructure investor, I Squared Capital, aims to raise as much as US$6.5 billion in a new global fund.

During the Equis sale process, many bidders had formed consortia to divide up the portfolio as some were

keen to only buy certain assets, and the total acquisition size was large.

The buyers are also taking on assumed liabilities of US$1.3 billion.

Equis and GIP said they signed a binding deal for the sale of 100 per cent of Equis Energy to GIP and co-investors. The transaction is expected to close in the first quarter of 2018.

Credit Suisse and JPMorgan were financial advisors to Equis Energy. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor while Clifford Chance advised GIP. Reuters

e-commerce

Brexit

Changes

Amazon to sell smart locks so it can slip packages into your home

Banks likely to keep EU access during transition, UK says

Carlyle Group unveils new leadership as founders step back

Passporting arrangements for financial services are likely to continue during the Brexit transition phase, the U.K. government said in a move intended to reassure companies considering whether to move operations out of the country.

Brexit Secretary David Davis said he expects financial-services firms to keep their existing passporting rights -- which allow London-based lenders and insurance companies to sell their services anywhere in the European Union’s single market -- during a two-year bridging period after March 2019.

Davis said he’s aiming for an outline accord on the transition “as quickly as we can.” If EU leaders decide to move the Brexit talks on to a trade deal in December, the minister said, he’d be seeking to get “the outlines of it agreed, if we could, in the first quarter.”

While an outline agreement would be sought quickly, any transition deal wouldn’t be finalized in all its detail until just before Brexit day in March 2019, Davis said, confirming comments from Prime Minister Theresa May this week. Global banks considering relocating their business headquarters to Frankfurt or other EU cities should “save their money” for now and read the “body language”, which clearly signals that a transition deal will be reached, Davis said. Bloomberg

Carlyle Group LP said yesterday that Glenn Youngkin and Kewsong Lee would become its co-chief executives, in the U.S. private equity firm's biggest shakeup since it was founded by David Rubenstein, William Conway and Daniel D'Aniello 30 years ago.

The move makes Carlyle the latest buyout firm to take steps toward a generational change, after peer KKR & Co LP said in July it would promote Joseph Bae and Scott Nuttall to co-presidents and co-chief operating officers, setting them up as successors to its founders Henry Kravis and George Roberts.

Unlike with KKR, however, Carlyle is giving Youngkin and Lee, both aged 51, its top jobs, making it the first among the private equity industry's publicly traded pioneers, that also include Blackstone Group LP and Apollo Global Management LLC, to hand over the reins.

Rubenstein and Conway, both 68, will give up their roles as Carlyle co-CEOs to become co-executive chairmen of the Washington, D.C.-based firm's board, while D'Aniello, 71, will transition from chairman to chairman emeritus, Carlyle said in a statement. The changes will become effective in January.

"Glenn and Kewsong will work together on all issues related to leading Carlyle, and will have full responsibility, authority and accountability for the firm's performance," Rubenstein, Conway and D'Aniello said in a statement. Reuters

Amazon.com Inc has plans to drop off packages directly into shoppers' homes.

The world's largest online retailer yesterday announced Amazon Key, a lock and camera system that users control remotely to let delivery associates slip goods into their houses. Customers can create temporary passcodes for friends and other services professionals to enter as well.

"This is not an experiment for us," said Peter Larsen, Amazon vice president of delivery technology, in an interview. "This is a core part of the Amazon shopping experience from this point forward."

Members of Amazon's Prime shopping club can pay US$249.99 and up for a cloud-controlled camera and lock that the company offers to install. Delivery associates are told to ring a doorbell or knock when they arrive at someone's house. If no one greets them, they press 'unlock' in a mobile app, and Amazon checks its systems in an instant to make sure the right associate and package are present.

The camera then streams video to the customer who remotely can watch the in-home delivery take place. The associate cannot proceed with other trips until the home is again locked.

It is unclear if such protections will persuade customers that the service is safe to use. Reuters